<PAGE>
EXHIBIT 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined balance sheet as of
March 31, 2000 and the unaudited pro forma condensed combined statements of
operations for the year ended December 31, 1999 and the three months ended March
31, 2000, which we refer to as the Pro Forma Financial Information, present the
pro forma effect of PSINet's acquisitions of Metamor Worldwide, Inc. (Metamor),
Transaction Network Services, Inc. (TNI), certain other acquisitions, capital
raising activity of PSINet since January 1, 2000 and the exchange of PSINet
common stock for a portion of its outstanding Series C preferred stock described
below.
The objective of Pro Forma Financial Information is to provide investors
with information about the continuing impact of particular completed or
probable transactions by indicating how the transactions might have affected
historical financial statements had they occurred at an earlier date.
Under the terms of the merger agreement with Metamor entered into on March
21, 2000, the aggregate consideration paid to Metamor stockholders consisted of
approximately 31.7 million shares of PSINet's common stock (at a conversion
ratio of 0.9 shares of PSINet's common stock for each share of Metamor's common
stock outstanding), which represents an aggregate value of approximately $1.38
billion, based upon an average price per share of PSINet's common stock of
$43.35 for the period from March 20, 2000 through March 24, 2000. PSINet also
assumed options to acquire approximately 4.3 million shares of Metamor common
stock which, under the terms of the merger agreement, will be exercisable into
approximately 3.9 million shares of PSINet's common stock and represent an
aggregate fair value of approximately $134.0 million. Simultaneously with the
merger, PSINet invested $50.0 million in a convertible note that will convert
into 8 1/2% convertible preferred stock of Xpedior, a majority owned subsidiary
of Metamor. The source of the cash for the investment in Xpedior was cash on
hand.
On November 23, 1999, PSINet acquired TNI. PSINet paid shareholders of TNI
aggregate consideration of approximately $339.3 million in cash and
approximately 15.2 million shares of PSINet common stock, which represented an
aggregate value of approximately $347.7 million, based upon a price per share
of PSINet common stock of $22.859 at the time we entered the definitive
agreement with TNI. PSINet also assumed options to acquire approximately
463,000 shares of TNI common stock which, at the time we entered into the
definitive agreement, were exercisable into 926,000 shares of PSINet common
stock and represented an aggregate fair value of approximately $13.0 million.
PSINet also repaid outstanding principal and interest under TNI's revolving
credit facility in the amount of $52.1 million as a condition to closing. The
source of the cash consideration for the TNI merger and the cash for the
repayment of the TNI revolving credit facility obligation was cash on hand.
In addition to the TNI merger, during the year ended December 31, 1999,
PSINet completed a total of 43 acquisitions for aggregate purchase prices and
related payments of approximately $247.0 million exclusive of assumed debt.
In February 2000, PSINet completed an offering of 16.5 million shares of 7%
Series D cumulative convertible preferred stock ("Series D preferred stock")
for net proceeds of approximately $740.2 million after expenses (excluding
amounts paid by the purchasers of the Series D preferred stock into the deposit
account that is not an asset of PSINet).
In February and March 2000, PSINet exchanged approximately 8.2 million newly
issued shares of its common stock for an aggregate of approximately 4.6 million
shares of its Series C preferred stock through individually negotiated
transactions with a limited number of holders of the Series C preferred stock.
Subsequent to the exchange, PSINet converted the exchanged Series C preferred
stock into approximately 7.4 million shares of PSINet common stock, which are
held as treasury shares.
<PAGE>
The following unaudited pro forma condensed combined balance sheet at
March 31, 2000 presents, on a pro forma basis, PSINet's condensed combined
financial position assuming the following had occurred on March 31, 2000:
. PSINet's acquisition of Metamor and the simultaneous investment in
Xpedior.
The following unaudited pro forma condensed combined statement of operations
for the year ended December 31, 1999 presents, on a pro forma basis, PSINet's
condensed combined results of operations assuming each of the following had
occurred on January 1, 1999:
. PSINet's acquisition of Metamor and the simultaneous investment in
Xpedior;
. PSINet's acquisition of TNI;
. PSINet's acquisitions during 1999 of Planete.net S.A.R.L., Satelnet S.A.,
Telelinx Ltd., Horizontes Internet Ltd., Wavis Equipamentos de Informatica
Ltd., Sao Paulo On-Line Ltda., Internet de Mexico S.A. de C.V., Datanet
S.A. de C.V., The Internet Company, Caribbean Internet Service Corp., The
Internet Access Company, Argentina On-Line S.A., CSO.net Telecom Services
GmbH, Intercomputer, S.A. and Intercomputer Soft, S.A., ABAFoRUM S.A.,
Netwing EDV-Dienstleistungs GmbH, Global Link, Netsystem S.A., Domain
Acesso e Servicos Internet Ltda, Netline Communicaciones S.A., Sinfonet
S.A., Vision Network Limited, Servnet Servicos de Informatica e
Communicacao Ltda, Elender Informatikai, Infase Comunicaciones, S.L.,
Internet Network Technologies, Site Internet Ltda, TotalNet Inc,
Terzomillennio S.L., Orbinet Telecommunications, Inc., ZebraNet, Inc., SPIN
GmbH, Zircon, Mlink Internet, Inc., Netup, Lyceum, Telalink Corporation,
Transaction Network Services, Inc, Alpha dot net, Netgate, JoinNet,
Correionet, Lynx, and Pacwan, which we refer to collectively as the Other
Acquisitions;
. PSINet's February 2000 offering of its Series D preferred stock and the
application of the net proceeds; and
. the exchange of PSINet's Series C preferred stock and the subsequent
conversion of the Series C preferred stock into PSINet's common stock held
as treasury shares.
The following unaudited pro forma condensed combined statement of operations
for the three months ended March 31, 2000 presents, on a pro forma basis,
PSINet's condensed combined results of operations assuming the following had
occurred on January 1, 1999:
. PSINet's acquisition of Metamor and the simultaneous investment in Xpedior;
. PSINet's February 2000 offering of its Series D preferred stock and the
application of the net proceeds; and
. the exchange of PSINet's Series C preferred stock and the subsequent
conversion of the Series C preferred stock into PSINet's common stock held
as treasury shares.
The acquisition of Metamor will be accounted for as a purchase business
combination and, accordingly, the purchase price of Metamor will be allocated
to tangible assets acquired and liabilities assumed, based upon their
respective fair values, with the excess allocated to intangible assets to be
amortized over the estimated economic lives of the intangible assets. PSINet
has undertaken a study by an independent third party to determine the
allocation of the total purchase price of PSINet's acquisition of Metamor.
Until the study is complete, PSINet is unable to determine the allocation of
the total purchase price of Metamor. For purposes of this Pro Forma Financial
Information, PSINet attributed the excess of the purchase price over the
acquired net tangible assets for Metamor of $1.539 billion to goodwill with a
twenty year estimated useful life. PSINet's management expects that a portion
of the purchase price will be allocated to nongoodwill intangibles. To the
extent that a portion of the purchase price of Metamor is allocated among other
intangible assets with a useful life shorter than twenty years, the adjustment
for amortization expense for the twelve months ended December 31, 1999 and for
the three months ended March 31, 2000 would be higher. In addition, PSINet's
management is in the process of assessing and formulating its integration plans.
PSINet's management does not know the exact amount, if any, of restructuring and
other costs to be included in purchase accounting but does not expect them to be
material.
The acquisition of TNI was accounted for as a purchase business combination
and, accordingly, the purchase price of TNI has been allocated to tangible
assets acquired and liabilities assumed, based upon their respective fair
values, with the excess allocated to intangible assets to be amortized over the
estimated economic lives of the intangible assets. PSINet engaged an
independent third party to determine the allocation of the total purchase price
of its acquisition of TNI. The evaluation for TNI indicated there were the
following intangible assets present: existing technology, tradenames, customer
contracts and relationships, existing workforce and goodwill, with estimated
useful lives from three to 20 years, and approximately $84.0 million of
purchased in-process research and development which is included in PSINet's
historical consolidated retained deficit reflected in the unaudited pro forma
condensed combined balance sheet and PSINet's historical loss from continuing
operations available to common shareholders in the unaudited pro forma
condensed combined statement of operations for the year ended December 31, 1999.
Each of the Other Acquisitions was paid for in cash and has been accounted
for as a purchase business combination and, accordingly, the purchase price has
been allocated to tangible assets acquired and liabilities assumed, based upon
their respective fair values, with the excess allocated to intangible assets to
be amortized over the estimated economic lives of the intangible assets from
the respective dates of acquisition.
The Pro Forma Financial Information is not intended to be indicative of the
results which would actually have been obtained had the transactions described
above occurred on the dates indicated or the results which may be obtained in
the future. The pro forma adjustments are based upon available information and
assumptions that PSINet management believes to be reasonable under the
circumstances. The unaudited pro forma condensed combined statement of
operations does not give effect to any potential cost savings and synergies that
could result from the acquisitions included in that statement. The Pro Forma
Financial Information should be read in conjunction with PSINet's consolidated
financial statements and notes to those financial statements included in our
Annual Report on Form 10-K and our Quarterly Report on Form 10-Q as previously
filed with the Securities and Exchange Commission and Metamor's consolidated
financial statements and notes to those financial statements included in its
Annual Report on Form 10-K and its Quarterly Report on Form 10-Q as previously
filed with the Securities and Exchange Commission.
<PAGE>
PSINET INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
(In millions of U.S. dollars, except per share and share amounts)
<TABLE>
<CAPTION>
Transaction
Network
Metamor Metamor Services
PSINet Inc. Worldwide, Inc. Worldwide, Inc. Inc. Other
Consolidated Consolidated Adjustments Consolidated Acquisitions
------------ --------------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Internet access
revenue................ $ 554.7 $ -- $ $152.8 $51.3
Services revenue........ -- 577.0 -- --
------- ------ ------ ------ -----
Total revenue........ 554.7 577.0 152.8 51.3
Operating costs and
expenses:
Data communications
and operations........ 396.4 -- 98.3 28.7
Cost of services
revenue............... -- 341.0 -- --
Selling, general and
administrative........ 182.5 174.3 27.8 18.6
Depreciation and
amortization.......... 166.5 26.0 62.0 (a) 17.6 3.6
Charge for acquired
in-process R&D........ 88.7 -- -- --
------- ------ ------ ------ -----
Total operating costs
and expenses........ 834.1 541.3 62.0 143.7 50.9
------- ------ ------ ------ -----
(Loss) income from
operations............. (279.4) 35.7 (62.0) 9.1 0.4
Interest expense........ (193.1) (21.4) (3.7) (0.8)
Interest income......... 54.4 0.5 1.4 0.2
Other income (expense),
net.................... (0.9) 2.4 -- (0.4)
------- ------ ------ ------ -----
(Loss) income from
continuing operations
before income taxes.... (419.0) 17.2 (62.0) 6.8 (0.6)
Income tax benefit
(expense).............. 2.8 (7.0) 5.0 (c) (5.8) (0.8)
------- ------ ------ ------ -----
(Loss) income from
continuing operations.. (416.2) 10.2 (57.0) 1.0 (1.4)
Return to preferred
shareholders........... (17.7) -- -- --
------- ------ ------ ------ -----
(Loss) income from
continuing operations
available to common
shareholders........... $(433.9) $ 10.2 $(57.0) $ 1.0 $(1.4)
======= ====== ====== ====== =====
Basic and diluted loss
per share from
continuing
operations(e).......... $ (3.49)
=======
Shares used in computing
basic and diluted loss
per share from
continuing operations
(in thousands)......... 124,386 31,739
======= ======
</TABLE>
<PAGE>
PSINET INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
(In millions of U.S. dollars, except per share and share amounts)
<TABLE>
<CAPTION>
Pro
Adjustments Forma
----------- -------
<S> <C> <C>
Internet access revenue................................ $ $ 758.8
Services revenue....................................... 577.0
------ -------
Total revenue...................................... 1,335.8
Operating costs and expenses:
Data communications and operations................... 523.4
Cost of services revenue............................. 341.0
Selling, general and administrative.................. 403.2
Depreciation and amortization........................ 62.4 (a) 338.1
Charge for acquired in-process R&D................... 88.7
------ -------
Total operating costs and expenses................. 62.4 1,694.4
------ -------
(Loss) income from operations.......................... (62.4) (358.6)
Interest expense....................................... 1.4 (b) (217.6)
Interest income........................................ 56.5
Other income (expense), net............................ 1.1
------ -------
(Loss) income from continuing operations before income
taxes................................................. (61.0) (518.6)
Income tax benefit (expense)........................... 5.8 (c) --
------ -------
(Loss) income from continuing operations............... (55.2) (518.6)
Return to preferred shareholders....................... (46.7)(d) (64.4)
------ -------
(Loss) income from continuing operations available to
common shareholders................................... $(101.9) $(583.0)
====== =======
Basic and diluted loss per share from continuing opera-
tions................................................. $ (3.55)
=======
Shares used in computing basic and diluted loss per
share from continuing operations (in thousands)....... 8,155 164,280
====== =======
</TABLE>
<PAGE>
PSINET INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 2000
(In millions of U.S. dollars, except per share and share amounts)
<TABLE>
<CAPTION>
Metamor Metamor
PSINet Inc. Worldwide, Inc. Worldwide, Inc. Pro
Consolidated Consolidated Adjustments Adjustments Forma
------------ --------------- --------------- ----------- -----
<S> <C> <C> <C> <C> <C>
Internet access
revenue................ $ 222.9 $ -- $ $ $ 222.9
Services revenue........ -- 158.4 158.4
------- ------ ------ ----- -------
Total revenue........ 222.9 158.4 381.3
Operating costs and
expenses:
Data communications
and operations........ 163.6 -- 163.6
Cost of services
revenue............... -- 96.9 96.9
Selling, general and
administrative........ 74.8 65.6 140.4
Depreciation and
amortization.......... 134.5 8.8 14.6 (f) 157.9
Restructuring charge... 16.9 -- 16.9
Costs related to
planned distribution
and sale of consumer
business.............. 1.1 -- 1.1
------- ------ ------ ----- -------
Total operating costs
and expenses........ 390.9 171.3 14.6 576.8
------- ------ ------ ----- -------
(Loss) income from
operations............. (168.0) (12.9) (14.6) (195.5)
Interest expense........ (79.0) (3.6) (82.6)
Interest income......... 24.8 0.6 25.4
Other income (expense),
net.................... 33.6 6.6 40.2
------- ------ ------ ----- -------
(Loss) income from
continuing operations
before income taxes.... (188.6) (9.3) (14.6) (212.5)
Income tax benefit
(expense).............. -- 3.6 (1.3)(g) 2.3
------- ------ ------ ----- -------
(Loss) income from
continuing operations.. (188.6) (5.7) (15.9) (210.2)
Return to preferred
shareholders........... (15.6) -- (3.2)(h) (18.8)
------- ------ ------ ----- -------
(Loss) income from
continuing operations
available to common
shareholders........... $(204.2) $ (5.7) $(15.9) $(3.2) $(229.0)
======= ====== ====== ===== =======
Basic and diluted loss
per share from
continuing
operations(e).......... $ (1.35) $ (1.22)
======= =======
Shares used in computing
basic and diluted loss
per share from
continuing operations
(in thousands)......... 150,848 31,739 5,075 (i) 187,662
======= ====== ===== =======
</TABLE>
<PAGE>
PSINET INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1999 and the Three Months Ended
March 31, 2000
The pro forma adjustments outlined below present separate adjustments
related to the acquisition of Metamor and the adjustments related to the other
transactions reflected in the unaudited pro forma condensed combined statements
of operations.
The purchase price of each acquisition has been allocated to tangible assets
acquired and liabilities assumed, based upon their respective fair values, with
the excess allocated to intangible assets to be amortized over the estimated
economic lives of the intangible assets of up to 20 years from the respective
dates of acquisition.
PSINet has undertaken a study by an independent third party to determine the
allocation of the total purchase price of its acquisition of Metamor. Until the
study is complete, PSINet is unable to determine the allocation of the total
purchase price of Metamor. For purposes of this Pro Forma Financial
Information, PSINet has attributed the excess of the purchase price over the
acquired net tangible assets for Metamor of $1.539 billion to goodwill with an
estimated twenty year useful life. To the extent that a portion of the purchase
price of Metamor is allocated among other intangible assets with a useful life
shorter than twenty years, the adjustment for amortization expense for the
twelve months ended December 31, 1999 and the three months ended March 31, 2000
would be higher and PSINet would record a deferred tax liability relating to
nongoodwill intangibles.
For the Year Ended December 31, 1999
(a) Reflects the increase in amortization resulting from the allocation of
the purchase price for the acquisition to the acquired net tangible and
intangible assets (principally tradename, customer relationships, goodwill,
assembled workforce and existing technology relating to TNI and the other
acquisitions and goodwill relating to Metamor). The assigned lives of the
acquired intangible assets range from three to 20 years.
<TABLE>
<CAPTION>
Amortization
------------
(millions of
U.S.
dollars)
<S> <C>
Metamor goodwill............................................. $(76.9)
Reversal of amortization of intangible assets included in
Metamor's historical statement of operations............... 14.9
------
$(62.0)
======
TNI merger.................................................. $(42.2)
Other acquisitions.......................................... (20.2)
------
$(62.4)
======
(b) Reflects the following:
<CAPTION>
Interest
------------
(millions of
U.S.
dollars)
<S> <C>
Interest expense avoided through assumed repayment of the
TNI revolving credit facility as of January 1, 1999........ $ 1.8
Other....................................................... (0.4)
------
$ 1.4
======
</TABLE>
<PAGE>
PSINET INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS--
(Continued)
For the Year Ended December 31, 1999 and the Three Months Ended
March 31, 2000
(c) Reversal of tax expense recorded by Metamor and TNI as a result of
availability of PSINet taxable losses for the periods presented to offset
Metamor and TNI taxable income.
(d) Reflects the following:
<TABLE>
<CAPTION>
Return to Preferred
Shareholders
-------------------
(millions of
U.S. dollars)
<S> <C>
Dividends on the Series D preferred stock ........... $(55.3)
Dividends on the Series C preferred stock avoided
through assumed exchange for common stock as of Jan-
uary 1, 1999........................................ 8.6
------
$(46.7)
======
</TABLE>
(e) Basic and diluted loss per share are computed using net loss available
to common shareholders divided by the weighted average number of shares of
PSINet's common stock that were outstanding during the period presented and
assumes that the issuance of approximately 31.7 million shares of PSINet's
common stock in connection with the acquisition of Metamor and the aggregate
issuance in February and March 2000 of approximately 8.2 million shares of
PSINet's common stock in connection with the Series C preferred stock exchange
had occurred on January 1, 1999. Because all common stock equivalents are
antidilutive, basic and diluted loss per share are the same for all periods
presented.
For the Three Months Ended March 31, 2000
(f) Reflects the increase in amortization resulting from the allocation of
the purchase price to the acquired net tangible and intangible assets
(principally tradename, customer relationships, goodwill, assembled workforce
and existing technology relating to TNI and the other acquisitions and goodwill
relating to Metamor). The assigned lives of the acquired intangible assets
range from three to 20 years.
<TABLE>
<CAPTION>
Amortization
------------
(millions of
U.S.
dollars)
<S> <C>
Metamor goodwill............................................. $(19.3)
Reversal of amortization of intangible assets included in
Metamor's historical statement of operations............... 4.7
------
$(14.6)
======
</TABLE>
<PAGE>
PSINET INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS--
(Continued)
For the Year Ended December 31, 1999 and the Three Months Ended
March 31, 2000
(g) Reversal of tax expense recorded by Metamor as a result of availability
of PSINet taxable losses for the periods presented to offset Metamor taxable
income.
(h) Reflects the following:
<TABLE>
<CAPTION>
Return to Preferred
Shareholders
-------------------
(millions of
U.S. dollars)
<S> <C>
Dividends on the Series D preferred stock............ $ (4.8)
Dividends on the Series C preferred stock avoided
through assumed exchange for common stock as of Jan-
uary 1, 1999........................................ 1.6
------
$ (3.2)
======
</TABLE>
(i) Basic and diluted loss per share are computed using net loss available
to common shareholders divided by the weighted average number of shares of
PSINet's common stock that were outstanding during the period presented and
assumes that the issuance of approximately 31.7 million shares of PSINet's
common stock in connection with the acquisition of Metamor and the aggregate
issuance in February and March 2000 of approximately 8.2 million shares of
PSINet's common stock in connection with the Series C preferred stock exchange
had occurred on January 1, 1999. Because all common stock equivalents are
antidilutive, basic and diluted loss per share are the same for all periods
presented.
<PAGE>
PSINET INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of March 31, 2000
(In millions of U.S. dollars)
<TABLE>
<CAPTION>
Metamor Metamor
PSINet Inc. Worldwide, Inc. Worldwide, Inc. Pro
Consolidated Consolidated Adjustments Forma
------------ --------------- --------------- --------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents........... $1,425.3 $ 31.5 $1,456.8
Restricted cash and
short-term
investments........... 158.7 -- 158.7
Short-term investments
and marketable
securities............ 439.8 -- 439.8
Accounts receivable,
net................... 112.2 194.0 306.2
Prepaid expenses and
other current assets.. 123.4 32.5 155.9
-------- ------ --------
Total current assets... 2,259.4 258.0 2,517.4
Property, plant and
equipment, net......... 1,528.4 61.7 1,590.1
Goodwill and other
intangibles, net....... 1,154.8 601.5 $ (601.5)(b)
1,539.5 (b) 2,694.3
Other assets and
deferred charges....... 198.9 46.9 245.8
-------- ------ -------- --------
Total assets........... $5,141.5 $968.1 $ 938.0 $7,047.6
======== ====== ======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of
debt.................. $ 119.9 $ 119.9
Trade accounts
payable............... 143.7 $ 10.9 154.6
Accrued payroll and
related expenses...... 33.7 22.5 56.2
Other accounts payable
and accrued
liabilities........... 95.9 76.7 $ 22.3 (c) 194.9
Accrued interest
payable............... 73.5 0.9 74.4
Deferred revenue....... 31.9 4.2 36.1
-------- ------ -------- --------
Total current
liabilities........... 498.6 115.2 22.3 636.1
Long-term debt.......... 3,159.7 218.9 3,378.6
Deferred income tax
liabilities............ 13.8 2.4 (2.4)(b) 13.8
Other liabilities....... 83.8 3.3 87.1
Minority interest....... -- 173.9 (137.7)(b) 36.2
-------- ------ -------- --------
Total liabilities...... 3,755.9 513.7 (117.8) 4,151.8
-------- ------ -------- --------
Shareholders' equity:
Convertible preferred
stock, Series C....... 189.7 -- 189.7
Convertible preferred
stock, Series D....... 749.1 -- 749.1
Common stock........... 1.6 0.3 (0.3)(d)
0.3 (a) 1.9
Capital in excess of par
value.................. 1,434.0 308.6 137.7 (b)
(446.3)(d)
1,509.9 (a) 2,943.9
Accumulated (deficit)
earnings............... (1,065.8) 141.2 (141.2)(d) (1,065.8)
Treasury stock......... -- --
Accumulated other
comprehensive income.. 139.1 4.3 (4.3)(d) 139.1
Bandwidth asset to be
delivered under IXC
agreement............. (62.1) -- (62.1)
-------- ------ -------- --------
Total shareholders'
equity................ 1,385.6 454.4 1,055.8 2,895.8
-------- ------ -------- --------
Total liabilities and
shareholders' equity.. $5,141.5 $968.1 $ 938.0 $7,047.6
======== ====== ======== ========
</TABLE>
<PAGE>
PSINET INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of March 31, 2000
Reflects the acquisition of Metamor and other events as if they had occurred
on March 31, 2000, including:
(a) the assumed issuance of approximately 31.7 million shares of PSINet
common stock in connection with the Metamor acquisition (the shares of
PSINet common stock assume a value of $43.35 per share, based on the
average of the closing price of PSINet common stock for the period from
March 20, 2000 through March 24, 2000).
(b) PSINet has undertaken a study by an independent third party to
determine the allocation of the total purchase price of the acquisition of
Metamor. Until the study is complete, PSINet is unable to determine the
allocation of the total purchase price of Metamor. For purposes of this Pro
Forma Financial Information, PSINet has attributed the excess of the purchase
price over the acquired net tangible assets for Metamor of $1.539 billion to
goodwill with an estimated twenty year useful life. To the extent that a
portion of the purchase price of Metamor is allocated among other intangible
assets, PSINet would record a deferred tax liability related to the
nongoodwill intangibles and additional goodwill. The adjustment also includes
reversal of historical goodwill that Metamor had on its balance sheet.
(c) the estimated closing costs associated with the Metamor acquisition.
(d) the elimination of the Metamor common stock, capital in excess of
par value, retained earnings and accumulated other comprehensive income.
