1
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
July 16, 1996
- - -------------------------------------------------------------------------------
Date of Report (Date of earliest event reported)
360 COMMUNICATIONS COMPANY
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-14108 47-0649117
- - ----------------------- -------------------- --------------------------------
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
8725 W. Higgins Road, Chicago, Illinois 60631
- - -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(312) 399-2500
- - -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
2
<PAGE>
Item 5. Other Events.
On July 16, 1996, 360 Communications Company (the "Company")issued a
press release announcing the consolidated operating results of the Company
and its subsidiaries for the second quarter of 1996. The Company also
announced its plans to begin offering Code Division Multiple Access digital
technology to its Las Vegas customers in early August 1996. A copy of the press
release is attached hereto as Exhibit 1.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 1: Press Release issued by 360 Communications Company on
July 16, 1996 regarding the consolidated operating results
of 360 Communications Company and its subsidiaries for the
second quarter of 1996 and its plans to begin offering
Code Division Multiple Access digital technology to its
Las Vegas customers in early August 1996.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
360 Communications Company
/s/ Gary L. Burge
By:____________________________________
Gary L. Burge
Senior Vice President - Finance
Date: July 16, 1996
4
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description of Exhibits
- - --- -----------------------
1 Press Release issued by 360 Communications Company on July 16, 1996
regarding the consolidated operating results of 360 Communications
Company and its subsidiaries for the second quarter of 1996 and its
plans to begin offering Code Division Multiple Access digital
technology to its Las Vegas customers in early August 1996.
5
<PAGE>
360 Communications....Corporate Communications....8725 W. Higgins Road
Chicago, Illinois 60631....(312)399-2200
MEDIA: FOR IMMEDIATE RELEASE
Margaret Kirch Cohen
(312) 399-2385
ANALYSTS:
Dave Gould
(312) 399-2284
360 COMMUNICATIONS REPORTS RECORD SECOND QUARTER RESULTS
Will Deploy CDMA in Las Vegas in Early August
Chicago, July 16,1996 -- For the second consecutive quarter since becoming
an independent company, 360 Communications (NYSE:XO) today reported record
quarterly results driven by record revenue and operating cash flow.
Revenue rose 31 percent in the second quarter of 1996 to a record $274.2
million, up from $208.9 million in the second quarter of 1995. Cellular
service revenue during the second quarter was a record $263.6 million, up 34
percent over $196.5 million during the same period in 1995.
360 Communications reported record operating cash flow levels of $102.9
million during the second quarter, a 52 percent increase over $67.7 million
reported in the second quarter of 1995. Operating cash flow, as a percentage
of cellular service revenues, reached 39.1 percent, compared with 34.5 percent
in the second quarter of 1995. The company also posted record operating
income of $67.8 million, a 69 percent increase over 1995.
For the second quarter, 360 reported record net income of $24.3 million,
or 21 cents per share, compared with a loss of $758,000, or a loss of 1 cent
per share, during the second quarter of 1995.
"Our strong second quarter results demonstrate that we are squarely on
track to meet our business objectives for the year and are firmly positioned
for the future," said Dennis Foster, president and chief executive officer
of 360 Communications. "We have moved quickly and aggressively to establish our
new brand identity in our markets, and we continue to be pleased with the
success of our new name and logo," Foster said.
360 Communications added 107,320 new customers during the second
quarter of 1996, closing the period with more than 1.75 million customers, up
41 percent from the second quarter of 1995. Excluding 46,600 customers
obtained through acquisitions in the first quarter, the company added 201,925
customers during the first six months of 1996.
360 reported an average market penetration rate of 8.4 percent during
the second quarter of 1996, up from 6.3 percent in the second quarter of 1995.
360 Communications' market penetration rate, as well as its penetration gain,
is expected to be among the best in the industry.
Also during the second quarter, 360 Communications announced it had
signed a definitive agreement to acquire Independent Cellular Network's
(ICN) cellular operations. This major acquisition includes ICN's interests in 20
markets, representing 3.2 million potential customers (net POPs) in
Pennsylvania, Ohio, Kentucky and West Virginia and is expected to be completed
during 1996.
The company also said it plans to begin offering Code Division Multiple
Access (CDMA) digital technology to new and existing Las Vegas customers in
early August 1996. The deployment follows a six month long trial in Las Vegas.
"The ICN acquisition further strengthens our clustering strategy. The
ICN markets are adjacent to our existing markets and the acquisition will
instantly provide expansion of coverage for our customers," Foster said. "In Las
Vegas, we've been testing and perfecting CDMA technology and we're excited about
offering the service in one of the country's most highly penetrated mobile phone
markets."
Chicago-based 360 Communications provides wireless voice and data
services to more than 1.75 million customers in nearly 100 markets in Alabama,
Florida, Illinois, Indiana, Iowa, Nevada, New Mexico, North Carolina, Ohio,
Pennsylvania, South Carolina, Tennessee, Texas and Virginia. In addition to the
New York Stock Exchange, 360 Communications' stock is listed on the Chicago and
Pacific stock exchanges under the symbol XO.
###
6
<PAGE>
<TABLE>
<CAPTION>
360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars)
For the Three Months
Ended June 30,
----------------------------------------
1996 1995
-------------- ----------------
<S> <C> <C>
OPERATING REVENUES
Cellular Service Revenues $ 263,560 $ 196,478
Equipment Sales 10,613 12,417
-------------- ----------------
Total Operating Revenues 274,173 208,895
-------------- ----------------
OPERATING EXPENSES
Cost of Service 22,205 18,181
Cost of Equipment Sales 23,224 24,437
Other Operations Expense 11,783 8,930
Selling, General, Administrative and Other Expenses 114,023 89,638
Depreciation and Amortization 35,157 27,502
-------------- ----------------
Total Operating Expenses 206,392 168,688
-------------- ----------------
OPERATING INCOME 67,781 40,207
Interest Expense (24,274) (31,864)
Minority Interests in Net Income
of Consolidated Entities (13,861) (8,895)
Equity in Net Income of Unconsolidated
Entities 14,348 7,455
Other Income (Expense), net (137) 53
-------------- ----------------
Income (Loss) Before Income Taxes 43,857 6,956
Income Tax Expense 19,573 7,714
-------------- ----------------
Net Income (Loss) $ 24,284 $ (758)
============== ================
Net Income (Loss) per Share (in Dollars) $ 0.21 $ (0.01) <F1>
============== ================
Weighted Average Shares
Outstanding, in thousands 117,066 116,725 <F1>
============== ================
<FN>
<F1>
(1) In 1995 Net Income (Loss) per Share has been calculated based upon the
number of Sprint Corporation weighted average shares outstanding for each
respective period, adjusted for a conversion ratio of 1 share of 360 Common
Stock to 3 shares of Sprint Common Stock.
</FN>
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars)
For the Six Months
Ended June 30,
----------------------------------------
1996 1995
-------------- ----------------
<S> <C> <C>
OPERATING REVENUES
Cellular Service Revenues $ 494,314 $ 364,556
Equipment Sales 19,554 23,814
-------------- ----------------
Total Operating Revenues 513,868 388,370
-------------- ----------------
OPERATING EXPENSES
Cost of Service 44,344 33,001
Cost of Equipment Sales 41,667 45,675
Other Operations Expense 24,326 17,832
Selling, General, Administrative and Other Expenses 221,173 167,083
Depreciation and Amortization 68,154 54,286
-------------- ----------------
Total Operating Expenses 399,664 317,877
-------------- ----------------
OPERATING INCOME 114,204 70,493
Interest Expense (54,102) (62,705)
Minority Interests in Net Income
of Consolidated Entities (24,325) (16,915)
Equity in Net Income of Unconsolidated
Entities 24,020 11,563
Other Income(Expense), net 322 48
-------------- ----------------
Income (Loss) Before Income Taxes 60,119 2,484
Income Tax Expense 28,855 9,161
-------------- ----------------
Net Income (Loss) $ 31,264 $ (6,677)
============== ================
Net Income (Loss) per Share (in Dollars) $ 0.27 $ (0.06)<F1>
============== ================
Weighted Average Shares
Outstanding, in thousands 117,048 116,549 <F1>
============== ================
<FN>
<F1>
(1) In 1995 Net Income (Loss) per Share has been calculated based upon the
number of Sprint Corporation weighted average shares outstanding for each
respective period, adjusted for a conversion ratio of 1 share of 360 Common
Stock to 3 shares of Sprint Common Stock.
</FN>
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
OPERATING DATA
(Thousands of Dollars, Except per Customer Data)
For the Three Months Ended
and as of June 30,
--------------------------------------------------
1996 1995
----------------- ----------------
<S> <C> <C>
EBITDA (in thousands) $ 102,938 $ 67,709
EBITDA Margin (% of Total Revenue) 37.54% 32.41%
EBITDA Margin (% of Celluar Service Revenue) 39.06% 34.46%
Capital Expenditures (in thousands) $ 87,166 $ 128,438
Controlled POPs 20,938,734 19,670,534
Controlled Customers 1,750,329 1,241,282
Gross Customer Additions 199,204 174,646
Net Customer Additions 107,320 116,443
Average Customers 1,698,446 1,179,486
Churn 1.80% 1.72%
Penetration 8.36% 6.31%
Service Revenue per Average Customer per Month $ 51.73 $ 55.53
Cost to Acquire a New Customer $ 250 $ 215
</TABLE>
<TABLE>
<CAPTION>
For the Six Months Ended
and as of June 30,
--------------------------------------------------
1996 1995
----------------- ----------------
<S> <C> <C>
EBITDA (in thousands) $ 182,358 $ 124,779
EBITDA Margin (% of Total Revenue) 35.49% 32.13%
EBITDA Margin (% of Celluar Service Revenue) 36.89% 34.23%
Capital Expenditures (in thousands) $ 143,942 $ 178,732
Controlled POPs 20,938,734 19,670,534
Controlled Customers <F1> 1,750,329 1,241,282
Gross Customer Additions <F2> 377,790 314,577
Net Customer Additions <F2> 201,925 201,293
Average Customers 1,627,719 1,128,737
Churn 1.80% 1.74%
Penetration 8.36% 6.31%
Service Revenue per Average Customer per Month $ 50.61 $ 53.83
Cost to Acquire a New Customer $ 262 $ 213
<FN>
<F1>
(1) Controlled Customers include 46,647 customers added through acquisitions
which were completed in the first quarter of 1996.
<F2>
(2) The 1996 amounts exclude customer base acquired.
</FN>
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
June 30, December 31,
ASSETS 1996 1995
------ ------------- -------------
<S> <C> <C>
Current Assets
Cash and Cash Equivalents $ 28,607 $ 19,023
Accounts Receivable, less allowances
of $3,780 and $2,370, respectively 86,275 68,087
Other Receivables 28,592 29,799
Unbilled Revenue 34,909 23,481
Inventory 16,731 19,576
Other 7,666 6,604
-------------- --------------
Total Current Assets 202,780 166,570
-------------- --------------
Property, Plant and Equipment 1,315,369 1,151,157
Less: Accumulated Depreciation 364,580 300,703
-------------- --------------
Property, Plant and Equipment, net 950,789 850,454
-------------- --------------
Investments in Unconsolidated Entities 333,851 318,287
Intangibles, net 709,363 632,756
Other Assets 20,210 5,179
-------------- --------------
Total Assets $ 2,216,993 $ 1,973,246
============== ==============
LIABILITIES AND SHAREOWNERS' EQUITY
-----------------------------------
Current Liabilities
Trade Accounts and Other Payables $ 141,462 $ 111,770
Advance Billings 23,949 20,559
Accrued Taxes 32,589 19,690
Short Term Debt 24,950 ---
Accrued Agent Commissions 7,170 15,417
Other 31,336 27,092
-------------- --------------
Total Current Liabilities 261,456 194,528
-------------- --------------
Long Term Debt 1,387,662 ---
Advances From and Notes to Affiliates --- 1,517,729
-------------- --------------
Deferred Credits and Other Liabilities
Deferred Income Taxes 103,741 99,168
Postretirement and Other Benefit Obligations 5,871 12,859
-------------- --------------
Total Deferred Credits and Other Liabilities 109,612 112,027
-------------- --------------
Minority Interests in Consolidated Entities 171,596 146,894
-------------- --------------
Shareowners' Equity 286,667 2,068
-------------- --------------
Total Liabilities and Shareowners' Equity $ 2,216,993 $ 1,973,246
============== ==============
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
For the Six Months
Ended June 30,
------------------------------------
1996 1995
--------------- --------------
<S> <C> <C>
Operating Activities
Net Income (Loss) $ 31,264 $ (6,677)
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided by Operating Activities
Depreciation and Amortization 68,154 54,286
Deferred Income Taxes 11,919 7,294
Equity in Net Income of Unconsolidated
Entities, net of distributions (14,891) 529
Minority Interests in Net Income of
Consolidated Entities 24,325 16,915
Changes in Operating Assets and Liabilities
Receivables, net (12,010) 4,618
Other Current Assets (6,529) 8,746
Accounts Payable 26,573 14,448
Accrued Expenses and Other
Current Liabilities 7,759 (12,126)
Noncurrent Assets and Liabilities, net 255 588
Other, net (2) (522)
--------------- --------------
Net Cash Provided by Operating Activities 136,817 88,099
--------------- --------------
Investing Activities
Capital Expenditures (143,942) (178,732)
Acquisitions (109,642) ---
Investment in Unconsolidated Entities and Other (2,476) (3,552)
--------------- --------------
Net Cash Used by Investing Activities (256,060) (182,284)
--------------- --------------
Financing Activities
Net Borrowings under Bank Revolving Credit 473,658 ---
Increase (Decrease) in Advances from Affiliates (1,400,000) 113,874
Proceeds from Long-Term Debt Borrowings 900,000 ---
Net Short Term Borrowings 24,950 ---
Equity Contributions 132,697 ---
Contributions from Minority Investors 4,597 3,903
Distributions to Minority Investors (7,075) (3,537)
--------------- --------------
Net Cash Provided by Financing Activities 128,827 114,240
--------------- --------------
Increase in Cash and Cash Equivalents 9,584 20,055
Cash and Cash Equivalents at Beginning of Period 19,023 5,527
--------------- --------------
Cash and Cash Equivalents at End of Period $ 28,607 $ 25,582
=============== ==============
</TABLE>
11
<PAGE>
July 16, 1996
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: Filing Desk, Stop 1-4
Re: Current Report on Form 8-K of 360 Communications Company
Ladies and Gentlemen:
On behalf of 360 Communications Company (the "Company"), I am
transmitting herewith for filing with the Commission pursuant to Sections 13 and
15(d) of the Securities Exchange Act of 1934, as amended, a copy of the
Company's Current Report on Form 8-K, with attached exhibit, relating to events
reported as of July 16, 1996.
Very truly yours,
William M. Kochlefl
Senior Attorney
12
<PAGE>
