TRILOGY INTERNATIONAL PARTNERS INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTER ENDED SEPTEMBER 30, 2022

PART I - FINANCIAL INFORMATION Item 1) Financial Statements

TRILOGY INTERNATIONAL PARTNERS INC.

Condensed Consolidated Balance Sheets

(US dollars in thousands, except share amounts)

(unaudited)

September 30,

December 31,

2022

2021

ASSETS

Current assets:

Cash and cash equivalents Restricted cash Short-term investments Accounts receivable, net

Equipment Installment Plan ("EIP") receivables, net

Inventory

Sale proceeds held in escrow

Prepaid expenses and other current assets Total current assets

Property and equipment, net Operating lease right-of-use assets, net License costs and other intangible assets, net Goodwill

Long-term EIP receivables Deferred income taxes Other assets

Total assets

$

12,624

$

53,486

-

1,524

13,895

-

-

61,073

-

41,663

-

10,918

12,468

-

1,615

32,175

40,602

200,839

12

307,085

-

120,414

-

61,377

-

9,689

-

34,537

-

23,890

-

46,036

$

40,614

$

803,867

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current liabilities:

Accounts payable

$

129

$

27,171

Construction accounts payable

-

22,466

Current portion of debt and financing lease liabilities

-

31,589

Customer deposits and unearned revenue

-

25,851

Short-term operating lease liabilities

-

19,315

Other current liabilities and accrued expenses

6,730

99,231

Total current liabilities

6,859

225,623

Long-term debt and financing lease liabilities

-

631,685

Deferred income taxes

-

298

Non-current operating lease liabilities

-

168,437

Other non-current liabilities

-

23,858

Total liabilities

6,859

1,049,901

Commitments and contingencies

-

-

Shareholders' equity (deficit):

Common shares and additional paid-in capital; no par value, unlimited

authorized, 88,627,603 and 86,461,484 shares issued and outstanding

-

486

Accumulated earnings (deficit)

33,699

(288,235)

Accumulated other comprehensive income

56

6,860

Total Trilogy International Partners Inc. shareholders' equity (deficit)

33,755

(280,889)

Noncontrolling interests

-

34,855

Total shareholders' equity (deficit)

33,755

(246,034)

Total liabilities and shareholders' equity (deficit)

$

40,614

$

803,867

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements

1

TRILOGY INTERNATIONAL PARTNERS INC.

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

(US dollars in thousands, except share and per share amounts)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2022

2021

2022

2021

Revenues

Wireless service revenues

$

-

$

104,018

$

154,752

$

316,582

Fixed broadband service revenues

-

28,134

42,498

83,697

Equipment sales

-

23,090

38,096

77,539

Non-subscriber international long distance and other

revenues

-

2,296

3,171

6,620

Total revenues

-

157,538

238,517

484,438

Operating expenses

Cost of service, exclusive of depreciation, amortization

and accretion shown separately

-

55,952

81,045

163,360

Cost of equipment sales

-

25,190

39,157

84,240

Sales and marketing

-

22,510

30,800

65,710

General and administrative

3,407

29,213

60,367

89,097

Depreciation, amortization and accretion

1

28,033

18,417

85,589

Impairment of long-lived assets

-

113,844

-

113,844

Loss on disposal of assets and (gain) on sale of

operations

-

257

(457,590)

854

Total operating expenses

3,408

274,999

(227,804)

602,694

Operating (loss) income

(3,408)

(117,461)

466,321

(118,256)

Other (expenses) income

Interest expense

-

(13,419)

(22,887)

(39,934)

Change in fair value of warrant liability

-

-

105

107

Debt extinguishment, modification and issuance costs

-

-

(8,527)

(7,016)

Other, net

(2,018)

2,204

13,607

4,442

Total other expenses

(2,018)

(11,215)

(17,702)

(42,401)

(Loss) income before income taxes

(5,426)

(128,676)

448,619

(160,657)

Income tax benefit (expense)

-

972

(11,337)

(5,258)

Net (loss) income

(5,426)

(127,704)

437,282

(165,915)

Less: Net loss (income) attributable to noncontrolling

interests

-

37,133

(3,578)

49,392

Net (loss) income attributable to Trilogy International

Partners Inc.

$

(5,426)

$

(90,571)

$

433,704

$

(116,523)

Comprehensive (loss) income

Net (loss) income

$

(5,426)

$

(127,704)

$

437,282

$

(165,915)

Other comprehensive (loss) income:

Foreign currency translation adjustments

-

(2,494)

(13,197)

(8,583)

Net income (loss) on short-term investments

56

-

56

(2)

Other comprehensive income (loss)

56

(2,494)

(13,141)

(8,585)

Comprehensive (loss) income

(5,370)

(130,198)

424,141

(174,500)

Comprehensive loss (income) attributable to

noncontrolling interests

-

37,467

(59)

52,721

Comprehensive (loss) income attributable to Trilogy

International Partners Inc.

$

(5,370)

$

(92,731)

$

424,082

$

(121,779)

Net (loss) income attributable to Trilogy

International Partners Inc. per share:

Basic (see Note 14 - Earnings per Share)

$

(0.06)

$

(1.37)

$

4.95

$

(1.90)

Diluted (see Note 14 - Earnings per Share)

$

(0.06)

$

(1.37)

$

4.91

$

(1.90)

Weighted average common shares:

Basic

88,627,603

66,348,444

87,580,236

61,353,637

Diluted

88,627,603

66,348,444

88,314,955

61,353,637

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements

2

TRILOGY INTERNATIONAL PARTNERS INC.

Condensed Consolidated Statements of Changes in Shareholders' Equity (Deficit)

(US dollars in thousands, except shares)

(unaudited)

Three Months Ended

Accumulated

Additional

Accumulated

Other

Total

Common Shares

Paid-In

(Deficit)

Comprehensive

Noncontrolling

Shareholders'

Shares

Amount

Capital

Earnings

Income

Interests

(Deficit) Equity

Balance, June 30, 2021

59,921,124

$

-

$

7,176

$

(123,321)

$

6,881

$

25,231

$

(84,033)

Dividends declared and paid

-

-

-

-

-

(3,182)

(3,182)

Equity-based compensation

-

-

725

-

-

55

780

Net loss

-

-

-

(90,571)

-

(37,133)

(127,704)

Other comprehensive loss

-

-

-

-

(2,160)

(334)

(2,494)

Redemption of Class C Units, issuance of shares related

to RSUs and other

25,917,778

-

(7,901)

(44,508)

3,287

49,080

(42)

Balance, September 30, 2021

85,838,902

$

-

$

-

$

(258,400)

$

8,008

$

33,717

$

(216,675)

Balance, June 30, 2022

88,627,603

$

-

$

-

$

39,125

$

-

$

-

$

39,125

Net loss

-

-

-

(5,426)

-

-

(5,426)

Other comprehensive income

-

-

-

-

56

-

56

Balance, September 30, 2022

88,627,603

$

-

$

-

$

33,699

$

56

$

-

$

33,755

Nine Months Ended

Accumulated

Additional

Accumulated

Other

Total

Common Shares

Paid-In

(Deficit)

Comprehensive

Noncontrolling

Shareholders'

Shares

Amount

Capital

Earnings

Income

Interests

(Deficit) Equity

Balance, December 31, 2020

59,126,613

$

-

$

5,978

$

(97,369)

$

9,936

$

42,566

$

(38,889)

Dividends declared and paid

-

-

-

-

-

(5,673)

(5,673)

Equity-based compensation

-

-

2,495

-

-

169

2,664

Net loss

-

-

-

(116,523)

-

(49,392)

(165,915)

Other comprehensive loss

-

-

-

-

(5,256)

(3,329)

(8,585)

Redemption of Class C Units, issuance of shares related

to RSUs and other

26,712,289

-

(8,473)

(44,508)

3,328

49,376

(277)

Balance, September 30, 2021

85,838,902

$

-

$

-

$

(258,400)

$

8,008

$

33,717

$

(216,675)

Balance, December 31, 2021

86,461,484

$

-

$

486

$

(288,235)

$

6,860

$

34,855

$

(246,034)

Equity-based compensation

-

-

3,485

-

-

87

3,572

Net income

-

-

-

433,704

-

3,578

437,282

Other comprehensive loss

-

-

-

-

(9,622)

(3,519)

(13,141)

Forfeiture of shares

(1,675,336)

-

-

-

-

-

-

Return of capital, net of distribution repaid

-

-

(1,333)

(111,634)

-

-

(112,967)

Issuance of shares related to RSUs, change in

noncontrolling interests and other

3,841,455

-

(2,638)

(136)

2,818

(35,001)

(34,957)

Balance, September 30, 2022

88,627,603

$

-

$

-

$

33,699

$

56

$

-

$

33,755

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements

3

TRILOGY INTERNATIONAL PARTNERS INC. Condensed Consolidated Statements of Cash Flows (US dollars in thousands)

(unaudited)

Nine Months Ended

September 30,

2022

2021

Operating activities:

Net income (loss)

$

437,282

$

(165,915)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating

activities:

Provision for doubtful accounts

2,759

6,856

Depreciation, amortization and accretion

18,417

85,589

Equity-based compensation

3,572

2,664

Impairment of long-lived assets

-

113,844

(Gain) on sale of operations and loss on disposal of assets

(457,590)

854

Non-cashright-of-use asset lease expense

3,686

15,165

Non-cash interest expense

3,385

5,597

Settlement of cash flow hedges

(335)

(1,331)

Change in fair value of warrant liability

(105)

(107)

Debt extinguishment costs

8,527

-

Non-cash gain from change in fair value on cash flow hedges

(2,946)

(3,280)

Gain on forward exchange contracts and unrealized foreign exchange transactions

(14,789)

(461)

Deferred income taxes

396

57

Changes in operating assets and liabilities:

Accounts receivable

(6,460)

(13,681)

EIP receivables

5,207

(374)

Inventory

(1,470)

3,337

Prepaid expenses and other current assets

(12,693)

(12,472)

Other assets

(1,546)

(3,192)

Accounts payable

(6,989)

6,650

Operating lease liabilities

(7,376)

3,238

Other current liabilities and accrued expenses

23,738

(1,639)

Customer deposits and unearned revenue

(1,866)

32

Net cash (used in) provided by operating activities

(7,196)

41,431

Investing activities:

Proceeds from the sale of operations, inclusive of proceeds from forward exchange

contract of $16.6 million, net of cash sold of $51.1 million

552,210

-

Purchase of property and equipment

(32,429)

(65,449)

Purchase of short-term investments

(13,837)

-

Purchase of spectrum licenses and other additions to license costs

-

(6,735)

Maturities and sales of short-term investments

-

9,987

Other, net

(687)

(3,688)

Net cash provided by (used in) investing activities

505,257

(65,885)

Financing activities:

Payments of debt, including sale-leaseback and EIP receivables financing obligations

(438,807)

(374,694)

Return of capital, net of distribution repaid

(112,967)

-

Proceeds from debt

10,000

350,000

Proceeds from EIP receivables financing obligation

7,290

33,514

Dividends to noncontrolling interests

-

(5,673)

Other, net

(2,778)

(2,200)

Net cash (used in) provided by financing activities

(537,262)

947

Net decrease in cash, cash equivalents and restricted cash

(39,201)

(23,507)

Cash, cash equivalents and restricted cash, beginning of period

55,010

102,525

Effect of exchange rate changes

(3,185)

(1,382)

Cash, cash equivalents and restricted cash, end of period

$

12,624

$

77,636

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements

4

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Trilogy International Partners Inc. published this content on 08 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 December 2022 15:02:05 UTC.