EXHIBIT 99.1
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PRO FORMA FINANCIAL INFORMATION
In order to improve our capital structure, we entered into an exchange
agreement on January 31, 2007 with certain holders of the 9 3/8% senior
subordinated notes due 2011 and the 8 3/4% senior subordinated notes due 2011
issued by SunCom Wireless, Inc., a wholly owned subsidiary of SunCom Wireless
Holdings, Inc. (Holdings). Under the exchange agreement, holders of SunCom
Wireless subordinated notes a party to the agreement agreed to tender their
subordinated notes in exchange for shares of Holdings Class A common stock.
On May 15, 2007, Holdings implemented a 1-for-10 reverse stock split to
ensure that there existed sufficient authorized shares of Class A common stock
to complete the debt-for-equity exchange contemplated by the exchange agreement.
To accomplish this reverse stock split, Holdings merged with a wholly owned
subsidiary of Holdings. Holdings was the surviving corporation in this merger.
In the merger, each outstanding share of Class A common stock converted
into 0.1 share of Class A common stock of Holdings, as the surviving
corporation. Accordingly, Holdings issued or will issue approximately 7.3
million shares of Class A common stock, inclusive of shares held in treasury, as
part of this merger transaction. Holdings had no other class or series of
capital stock outstanding at the time of the merger.
Also, on May 15, 2007, holders of SunCom Wireless subordinated notes
exchanged notes representing 98.3% of the outstanding subordinated notes for
shares of Holdings' Class A common stock.
The following unaudited pro forma financial statements sets forth our
historical selected financial data on a pro forma basis, after giving effect to
the merger and exchange transactions described above, at March 31, 2007 and for
the quarter ended March 31, 2007 and the fiscal year ended December 31, 2006.
This financial data has been derived from, and should be read in conjunction
with, our audited consolidated financial statements, the related notes and
selected financial information filed as part of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2006 and our quarterly report on Form
10-Q for the period ended March 31, 2007.
The unaudited pro forma combined financial statements give effect to the
following transactions, as if each transaction occurred on the date or at the
beginning of the periods indicated:
o the acquisition by SunCom Investment Co. LLC, a wholly owned
subsidiary of Holdings, of $341,514,000 aggregate principal amount of
the 9 3 / 8 % senior subordinated notes due 2011 and $390,106,000
aggregate principal amount of the 8 3 / 4 % senior subordinated notes
due 2011;
o the issuance of approximately 52.0 million new shares of Class A
common stock (after giving effect to the 1 for 10 reverse stock split
effected through the merger immediately prior to the exchange),
through SunCom Investment, to the holders of the SunCom Wireless
subordinated notes participating in the exchange; and
o the payment of fees and expenses related to the merger and exchange
transactions.
The unaudited pro forma combined financial statements are for informational
purposes only, are not indications of future performance, and should not be
considered indicative of actual results that would have been achieved had the
merger and the exchange actually been consummated on the dates or at the
beginning of the periods presented.
SUNCOM WIRELESS HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2007
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HISTORICAL ADJUSTMENTS PRO FORMA
----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PAR VALUE)
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 34,133 $ (1,000)(A) $ 33,133
Short-term investments 173,850 -- 173,850
Restricted cash and restricted short-term investments 1,689 -- 1,689
Accounts receivable, net of allowance for doubtful accounts of $8,291 88,729 -- 88,729
Accounts receivable -- roaming partners 15,489 -- 15,489
Inventory, net 25,668 -- 25,668
Prepaid expenses 24,636 -- 24,636
Assets held for sale 377 -- 377
Other current assets 19,394 (12,433)(B) 6,961
----------- ----------- -----------
TOTAL CURRENT ASSETS 383,965 (13,433) 370,532
LONG TERM ASSETS:
Property and equipment, net 462,918 -- 462,918
Intangible assets, net 786,160 (924)(C) 785,236
Other long-term assets 8,988 -- 8,988
----------- ----------- -----------
TOTAL ASSETS $ 1,642,031 $ (14,357) $ 1,627,674
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
CURRENT LIABILITIES:
Accounts payable $ 74,818 $ -- $ 74,818
Accrued liabilities 84,925 -- 84,925
Current portion of long term debt 2,809 -- 2,809
Other current liabilities 27,266 -- 27,266
----------- ----------- -----------
TOTAL CURRENT LIABILITIES 189,818 -- 189,818
LONG-TERM DEBT:
Capital lease obligations 454 -- 454
Senior secured term loan 241,875 -- 241,875
Senior notes 714,657 -- 714,657
----------- ----------- -----------
SENIOR LONG-TERM DEBT 956,986 -- 956,986
Subordinated notes 732,904 (720,708)(D) 12,196
----------- ----------- -----------
TOTAL LONG-TERM DEBT 1,689,890 (720,708) 969,182
Deferred income taxes, net 143,236 -- 143,236
Deferred revenue 1,638 -- 1,638
Deferred gain on sale of property and equipment 57,686 -- 57,686
Other 5,429 -- 5,429
----------- ----------- -----------
TOTAL LIABILITIES 2,087,697 (720,708) 1,366,989
Commitments and contingencies -- -- --
STOCKHOLDERS' EQUITY (DEFICIT)
Series B Preferred Stock, $0.01 par value, 50,000,000 shares
authorized; no shares issued or outstanding as of March 31, 2007 -- -- --
Series C Convertible Preferred Stock, $0.01 par value,
3,000,000 shares authorized; no shares issued or outstanding as of
March 31, 2007 -- -- --
Preferred stock, $0.01 par value, 17,000,000 shares authorized; no
shares issued or outstanding as of March 31, 2007 -- -- --
Class A Common Stock, $0.01 par value, 520,000,000 shares
authorized; 73,038,482 shares issued and 71,252,453 shares
outstanding as of March 31, 2007 713 (650)(E) 583
520 (F)
Class B Non-voting Common Stock, $0.01 par value, 60,000,000 shares
authorized; no shares issued or outstanding as of March 31, 2007 -- -- --
Additional paid-in capital 612,524 889,165 (G) 1,502,339
650 (E)
Accumulated deficit (1,057,162) (183,334)(H) (1,240,496)
Class A common stock held in treasury, at cost (1,786,029 shares) (1,741) -- (1,741)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (445,666) 706,351 260,685
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 1,642,031 $ (14,357) $ 1,627,674
=========== =========== ===========
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SUNCOM WIRELESS HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 2007
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HISTORICAL ADJUSTMENTS PRO FORMA
------------ ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Revenues:
Service $ 186,435 $ -- $ 186,435
Roaming 22,002 -- 22,002
Equipment 24,483 -- 24,483
------------ ------------ ------------
Total revenues 232,920 -- 232,920
Operating Expenses:
Cost of service (excluding the below amortization
and excluding depreciation and asset disposal of
$ 21,013) 62,932 -- 62,932
Cost of equipment 38,867 -- 38,867
Selling, general and administrative (excluding
depreciation and asset disposal of $3,133) 89,040 -- 89,040
Depreciation and asset disposal 24,146 -- 24,146
Amortization 7,834 -- 7,834
Total operating expenses 222,819 -- 222,819
Income from operations 10,101 -- 10,101
Interest expense (38,334) 17,125 (I) (21,209)
Interest and other income 2,404 -- 2,404
Income (loss) before taxes (25,829) 17,125 (8,704)
Income tax provision (3,098) -- (3,098)
Net loss (28,927) 17,125 (11,802)
Net loss per common share (basic) $ (4.20)(E) $ 0.33 $ (0.20)
Net loss per common share (diluted) $ (4.20)(E) $ 0.33 $ (0.20)
============ ============ ============
Weighted average common shares outstanding (basic
and diluted) 6,895,516 (E) 52,028,376(F) 58,923,892
============ ============ ============
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SUNCOM WIRELESS HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2006
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HISTORICAL ADJUSTMENTS PRO FORMA
------------ --------------- ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Revenues:
Service $ 669,671 $ -- $ 669,671
Roaming 85,716 -- 85,716
Equipment 97,492 -- 97,492
------------ --------------- ------------
Total revenues 852,879 -- 852,879
Operating Expenses:
Cost of service (excluding the below amortization
and excluding depreciation and asset disposal of
$ 221,762) 266,214 -- 266,214
Cost of equipment 151,073 -- 151,073
Selling, general and administrative (excluding
depreciation and asset disposal of $9,072) 345,006 -- 345,006
Termination benefits and other related charges 1,841 -- 1,841
Depreciation and asset disposal 230,834 -- 230,834
Amortization 39,883 -- 39,883
------------ --------------- ------------
Total operating expenses 1,034,851 -- 1,034,851
------------ --------------- ------------
Loss from operations (181,972) -- (181,972)
Interest expense (152,659) 68,372(I) (84,287)
Interest and other income 13,557 -- 13,557
------------ --------------- ------------
Income (loss) before taxes (321,074) 68,372 (252,702)
Income tax provision (16,304) -- (16,304)
------------ --------------- ------------
Net loss (337,378) 68,372 (269,006)
Net loss per common share (basic) $ (49.09)(E) $ 1.31 $ (4.57)
============ =============== ============
Net loss common share (diluted) $ (49.09)(E) $ 1.31 $ (4.57)
============ =============== ============
Weighted average common shares outstanding (basic
and diluted) 6,872,976 (E) 52,028,376(F) 58,901,352
============ =============== ============
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SUNCOM WIRELESS HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma financial data presented herein is not necessarily
indicative of our operating results or financial position had the merger and
exchange transactions been completed at the dates indicated, nor are they
necessarily indicative of our future results of operations or financial
position.
(A) Reflects the net decrease in cash and cash equivalents resulting from
the payment of incremental assumed transaction expenses estimated at $1.0
million.
(B) Reflects the write-off of direct costs capitalized in connection with
the exchange agreement.
(C) Reflects the write-off of deferred financing costs associated with
98.4% of the outstanding 9 3 / 8 % notes and 98.3% of the 8 3 / 4 % notes.
(D) Reflects the retirement of the subordinated notes tendered in exchange
for shares of Class A common stock described in Note (G) below.
(E) Reflects the 1 for 10 reverse stock split.
(F) Reflects the issuance of 52,028,376 shares of Class A common stock to
the bondholders in exchange for the retirement of 98.4% of the outstanding 9 3 /
8 % notes and 98.3% of the 8 3 / 4 % notes.
(G) Reflects the issuance of 52,028,376 shares of Class A common stock,
with an assumed market value of $17.10 per share, to the bondholders in exchange
for the tendered subordinated notes. The assumed market price is based upon the
closing price of Holdings' Class A common stock on May 15, 2007, adjusted for
the 1 for 10 reverse stock split. If the Holdings' split adjusted stock price
changed by $0.01, the gain or loss recorded on the exchange transaction would be
adjusted by approximately $0.5 million.
(H) Reflects the assumed fair value of the Class A common stock issued to
the bondholders in excess of par, based on the assumed market price described in
Note (G), less the value of the subordinated notes exchanged, thereby increasing
the accumulated deficit as a result of the exchange transaction.
(I) Reflects consolidated interest expense reduction as the result of
retiring the tendered subordinated notes.
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