FINANCIAL INFORMATION IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2004 AND SEPTEMBER 30, 2005 (In thousands of U.S. Dollars, except per share amounts) ( Unaudited ) December 31, September 30, ------------ ------------- 2004 2005 ---- ---- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 63,655 $ 19,794 Trade accounts receivable, net 29,363 36,586 Other receivables 12,865 11,941 Prepaid expenses 3,008 4,267 ----------- ----------- Total current assets 108,891 72,588 ----------- ----------- PROPERTY, PLANT AND EQUIPMENT, Net 317,310 321,820 ----------- ----------- OTHER NON-CURRENT ASSETS 17,706 17,902 ----------- ----------- TOTAL $ 443,907 $ 412,310 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable- trade $ 36,485 $ 45,385 Short- term debt 2,656 1,623 Current portion of long-term debt 45,092 16,727 Accrued and other liabilities 31,217 42,678 ----------- ----------- Total current liabilities 115,450 106,413 LONG-TERM DEBT, Net 233,335 229,346 OTHER LONG-TERM LIABILITIES 16,109 16,602 ----------- ----------- Total liabilities 364,894 352,361 ----------- ----------- COMMITMENTS AND CONTINGENCIES (NOTE 11) STOCKHOLDERS' EQUITY: Preferred stock, $0.01 par value; 5,000,000 shares authorized, no shares outstanding as of December 31, 2004 and September 30, 2005 - - Common stock, $0.01 par value; 50,000,000 shares authorized; 10,116,100 shares issued and outstanding (including 100,000 and 50,000 restricted shares held in the 2003 Stock Incentive Plan as of December 31, 2004 and September 30, 2005, respectively) 101 101 Additional paid in capital 90,542 90,542 Accumulated deficit (4,742) (25,096) Deferred stock-based compensation (880) (440) Accumulated other comprehensive loss (6,008) (5,158) ----------- ----------- Total stockholders' equity 79,013 59,949 ----------- ----------- TOTAL $ 443,907 $ 412,310 =========== =========== IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2005 (In thousands of U.S. Dollars, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------- 2004 2005 2004 2005 ------- ------- -------- -------- NET REVENUES: Broadband and satellite $40,577 $44,172 $120,156 $128,037 Internet 6,542 7,873 19,242 22,200 Value added services 4,270 6,351 12,306 17,147 Telephony 5,479 6,579 15,527 18,720 Sales of equipment 722 433 964 634 ------- ------- -------- -------- Total net revenues 57,590 65,408 168,195 186,738 ------- ------- -------- -------- COSTS AND EXPENSES: Direct costs: Contracted services 5,364 6,601 14,756 17,887 Other direct costs 5,343 7,014 14,862 20,957 Leased capacity 16,960 18,763 48,695 55,948 Cost of equipment sold 571 375 747 572 ------- ------- -------- -------- Total direct costs 28,238 32,753 79,060 95,364 Salaries and wages 11,961 12,100 35,941 37,347 Selling, general and administrative 6,254 5,766 17,719 16,903 Gain on extinguishment of debt (115) (115) Depreciation and amortization 11,525 13,963 32,246 40,355 ------- ------- -------- -------- Total costs and expenses 57,863 64,582 164,851 189,969 ------- ------- -------- -------- Operating (loss) income (273) 826 3,344 (3,231) ------- ------- -------- -------- OTHER INCOME (EXPENSE): Interest income 262 250 870 852 Interest expense (5,429) (7,372) (15,635) (22,093) Net gain (loss) on foreign exchange 7,159 4,362 (2,751) 15,632 Other income (expense), net 64 (1,386) 1,353 (6,737) ------- ------- -------- -------- Total other (expense) income 2,056 (4,146) (16,163) (12,346) ------- ------- -------- -------- Income (loss) before income taxes 1,783 (3,320) (12,819) (15,577) Provision for foreign income taxes (1,108) (1,843) (2,989) (4,777) ------- ------- -------- -------- NET INCOME (LOSS) $ 675 $(5,163) $(15,808) $(20,354) ======= ======= ======== ======== NET INCOME (LOSS) PER COMMON SHARE: BASIC AND DILUTED $ 0.07 $ (0.51) $ (1.58) $ (2.03) ======= ======= ======== ======== WEIGHTED AVERAGE NUMBER OF COMMON SHARES: BASIC AND DILUTED 10,011 10,066 9,987 10,049 ======= ======= ======== ======== SUPPLEMENTAL FINANCIAL INFORMATION Reconciliation of EBITDA to Operating Income (Loss) Three Months ended Nine Months ended 30-Sep04 30-Sep05 30-Sep04 30-Sep05 EBITDA $ 11,137 $ 14,789 $ 35,475 $ 37,124 Depreciation and Amortization $(11,525) $ (13,963) $(32,246) $(40,355) Gain on early extinguishment of debt $ 115 $ - $ 115 Operating Income (Loss) $ (273) $ 824 $ 3,344 $ (3,231)