IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED BALANCE SHEETS (SUCCESSOR COMPANY)

               AS OF DECEMBER 31, 2003 AND JUNE 30, 2004

         (In thousands of U.S. Dollars, except share amounts)

                              (Unaudited)

 

                                                 Successor Company

                                             -------------------------

                                             December 31,    June 30,

                                                 2003          2004

                                             -------------------------

 

              ASSETS

CURRENT ASSETS:

 Cash and cash equivalents                    $   61,498   $   63,265

 Trading investments                               2,474          251

 Trade accounts receivable, net                   31,213       28,683

 Other receivables                                11,630       11,291

 Prepaid expenses                                  2,249        4,062

                                               ----------   ----------

     Total current assets                        109,064      107,552

                                               ----------   ----------

PROPERTY, PLANT AND EQUIPMENT, Net               315,817      303,142

                                               ----------   ----------

NON-CURRENT ASSETS:

 Investments in common stock                       1,873

 Other non-current assets                         13,875       15,961

                                               ----------   ----------

     Total non-current assets                     15,748       15,961

                                               ----------   ----------

TOTAL                                         $  440,629   $  426,655

                                               ==========   ==========

 

     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

 Accounts payable -- trade                    $   37,095   $   35,179

 Current portion of long-term debt                11,851       28,974

 Accrued and other liabilities                    33,140       29,587

                                               ----------   ----------

     Total current liabilities                    82,086       93,740

LONG-TERM DEBT, Net                              249,394      238,039

OTHER LONG-TERM LIABILITIES                       11,904       14,649

                                               ----------   ----------

     Total liabilities                           343,384      346,428

                                               ----------   ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

 

 Preferred stock, $0.01 par value; 5,000,000

  shares authorized, no shares outstanding

  as of December 31, 2003 and June 30, 2004

  Common stock, $0.01 par value; 50,000,000

  shares authorized, 10,100,000 shares issued

  and outstanding (including 150,000 and

  100,000 restricted shares held in the 2003

  Stock Incentive Plan as of December 31, 2003

  and June  30, 2004, respectively)                  101          101

 Additional paid in capital                       90,294       90,294

 Retained earnings (accumulated deficit)           9,477       (7,006)

 Deferred stock-based compensation                (1,320)        (880)

 Accumulated other comprehensive loss             (1,307)      (2,282)

                                               ----------   ----------

     Total stockholders' equity                   97,245       80,227

                                               ----------   ----------

TOTAL                                         $  440,629   $  426,655

                                               ==========   ==========

 

-0-

 

             IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES

            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

   FOR THE THREE MONTHS ENDED JUNE 30, 2003 (SUCCESSOR COMPANY), FOR

   THE THREE MONTHS ENDED JUNE 30, 2004 (SUCCESSOR COMPANY), FOR THE

  THREE MONTHS ENDED MARCH 31, 2003 (PREDECESSOR COMPANY) AND FOR THE

          SIX MONTHS ENDED JUNE 30, 2004 (SUCCESSOR COMPANY)

       (In thousands of U.S. Dollars, except per share amounts)

                              (Unaudited)

 

                                         Three Months Ended June 30,

                                       -------------------------------

                                         Successor         Successor

                                          Company           Company

                                       --------------    -------------

                                            2003             2004

                                       --------------    -------------

NET REVENUES:

  Broadband and satellite                $    41,781      $    40,005

  Internet                                     5,761            6,716

  Value added services                         3,852            3,832

  Telephony                                    4,595            4,903

  Sales of equipment                             385               90

                                          -----------      -----------

          Total net revenues                  56,374           55,546

                                          -----------      -----------

COSTS AND EXPENSES:

  Direct costs:

     Contracted services                       4,525            5,065

     Other direct costs                        7,868            5,761

     Leased capacity                          17,559           15,945

     Cost of equipment sold                      108               80

                                          -----------      -----------

          Total direct costs                  30,060           26,851

  Salaries and wages                          11,842           11,773

  Selling, general and administrative          7,127            5,961

  Gain on extinguishment of debt              (8,793)

  Depreciation and amortization                8,969           10,560

                                          -----------      -----------

          Total costs and expenses            49,205           55,145

                                          -----------      -----------

Operating income (loss)                        7,169              401

                                          -----------      -----------

OTHER INCOME (EXPENSE):

  Interest income                                970              296

  Interest expense (contractual interest

   of $21,801 for the  three months

   ended March 31, 2003 (Predecessor))        (6,281)          (5,272)

  Net gain (loss) on foreign exchange         21,445           (5,519)

  Reorganization items

  Other income (loss), net                      (313)           1,420

                                          -----------      -----------

          Total other income (expense)        15,821           (9,075)

                                          -----------      -----------

INCOME (LOSS) BEFORE INCOME TAXES             22,990           (8,674)

PROVISION FOR FOREIGN INCOME TAXES              (744)          (1,339)

                                          -----------      -----------

NET INCOME (LOSS)                        $    22,246      $   (10,013)

                                          ===========      ===========

NET INCOME  (LOSS) PER COMMON SHARE:

  BASIC                                  $      2.26      $     (1.00)

                                          ===========      ===========

  DILUTED                                $      1.62      $     (1.00)

                                          ===========      ===========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES:

  BASIC                                        9,850           10,000

                                          ===========      ===========

  DILUTED                                     15,901           10,000

                                          ===========      ===========

 

 

                                  Six Months Ended June 30,

                            --------------------------------------

                            Predecessor    Successor     Successor

                              Company       Company       Company

                            -----------------------    -----------

 

                            Three Months  Three Months

                             Ended March  Ended to June

                              31, 2003      30, 2003        2004

                             -------------------------- ------------

NET REVENUES:

  Broadband and satellite    $  41,382     $  41,781       $  79,579

  Internet                       5,733         5,761          12,700

  Value added services           4,781         3,852           8,036

  Telephony                      4,106         4,595          10,049

  Sales of equipment                74           385             242

                             -----------------------   -------------

      Total net revenues        56,076        56,374         110,606

                             -----------------------   -------------

COSTS AND EXPENSES:

  Direct costs:

     Contracted services         4,125         4,525           9,392

     Other direct costs          4,696         7,868           9,518

     Leased capacity            17,407        17,559          31,735

     Cost of equipment sold         48           108             177

                             -----------------------   -------------

      Total direct costs        26,276        30,060          50,822

  Salaries and wages            10,727        11,842          23,980

  Selling, general and

   administrative                5,553         7,127          11,466

  Gain on extinguishment

   of debt                                    (8,793)

  Depreciation and

   amortization                 19,358         8,969          20,721

                             -----------------------   -------------

       Total costs and

         expenses               61,914        49,205         106,989

                             -----------------------   -------------

Operating income (loss)         (5,838)        7,169           3,617

                             -----------------------   -------------

OTHER INCOME (EXPENSE):

  Interest income                  200           970             607

  Interest expense

   (contractual interest of

   $21,801 for the three months

   ended March 31, 2003

   (Predecessor))               (1,909)       (6,281)        (10,206)

  Net gain (loss) on

   foreign exchange              9,969        21,445          (9,910)

  Reorganization items         726,127

  Other income (loss), net       2,923          (313)          1,291

                             -----------------------   -------------

    Total other income

     (expense)                 737,310        15,821         (18,218)

                            ------------------------   -------------

INCOME (LOSS) BEFORE

 INCOME TAXES                  731,472        22,990         (14,601)

PROVISION FOR FOREIGN

 INCOME TAXES                     (406)         (744)         (1,882)

                            ------------------------   -------------

NET INCOME (LOSS)           $  731,066     $  22,246     $   (16,483)

                            ========================   =============

NET INCOME  (LOSS) PER

 COMMON SHARE:

  BASIC                     $     8.00     $    2.26     $     (1.65)

                            ========================   =============

  DILUTED                   $     8.00     $    1.62     $     (1.65)

                            ========================   =============

WEIGHTED AVERAGE NUMBER OF

 COMMON SHARES:

  BASIC                         91,429        9,850            9,975

                            ========================   =============

  DILUTED                       91,429        9,850            9.975

                            ========================   =============

 

-0-

 

 

Appendix I

 

SUPPLEMENTAL FINANCIAL INFORMATION

 

Reconciliation of EBITDA to Operating (Loss) Income

 

                                         Three months ended

                                 ----------------------------------

                                 March 31,   June 30,  September 30,

                                   2003        2003        2003

--------------------------------------------------------------------

EBITDA                            13,520      7,345       11,085

--------------------------------------------------------------------

Depreciation and Amortization    (19,358)    (8,969)     (10,312)

--------------------------------------------------------------------

Gain on early extinguishment

 of debt                               0      8,793        5,460

--------------------------------------------------------------------

Operating Income (Loss)           (5,838)     7,169        6,233

--------------------------------------------------------------------

 

                                          Three months ended

                               -------------------------------------

                               December 31, March 31,    June 30,

                                   2003       2004         2004

--------------------------------------------------------------------

EBITDA                             8,273     13,376       10.961

--------------------------------------------------------------------

Depreciation and Amortization    (10,396)   (10,161)     (10.560)

--------------------------------------------------------------------

Gain on early extinguishment

 of debt                               0          0            0

--------------------------------------------------------------------

Operating Income (Loss)           (2,123)     3,215          401

--------------------------------------------------------------------