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
April 15, 1997
----------------------------------------------------------------
Date of Report (Date of earlier 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)
(773) 399-2500
---------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
On April 15, 1997, 360 Communications Company (the "Company") issued a
press release announcing the consolidated operating results of the Company and
its subsidiaries for the first quarter of 1997. A copy of such press release is
attached hereto as Exhibit 1. Also on April 15, 1997, the Company issued a press
release announcing the authorization by its board of directors of a program to
repurchase up to 3 million shares of the Company's common stock through May 1,
1998. A copy of such press release is attached hereto as Exhibit 2.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 1: Press Release issued by 360 Communications Company on April
15, 1997 announcing the consolidated operating results of the Company and its
subsidiaries for the first quarter of 1997.
Exhibit 2: Press Release issued by 360 Communications Company on April
15, 1997 announcing the authorization by its board of directors of a program to
repurchase up to 3 million shares of the Company's common stock through May 1,
1998.
-2-
<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
By: /s/ Gary L. Burge
Gary L. Burge
Senior Vice President - Finance
Date: April 15, 1997
-3-
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description of Exhibits
- -------- ----------------------------
1 Press Release issued by 360 Communications Company on April 15,
1997 announcing the consolidated operating results of the Company
and its subsidiaries for the first quarter of 1997.
2 Press Release issued by 360 Communications Company on April 15,
1997 announcing the authorization by its board of directors of a
program to repurchase up to 3 million shares of the Company's
common stock through May 1, 1998.
-4-
<PAGE>
360 Communications....Corporate Communications....8725 W. Higgins
Road....Chicago, Illinois 60631....(773)399-2200
FOR IMMEDIATE RELEASE
MEDIA:
Sal Cinquegrani Margaret Kirch Cohen
(773) 399-2783 (773) 399-2385
ANALYSTS:
Dave Gould
(773) 399-2284
360 REPORTS RECORD FIRST QUARTER CUSTOMER GROWTH
(Chicago) April 15, 1997 -- Chicago-based 360 Communications Company
(NYSE:XO) today reported its best-ever first quarter customer growth and posted
higher revenues, operating cash flow and net income.
360 added a record 125,000 net customers during the quarter, up 32
percent from 95,000 during the first quarter of 1996. 360 closed the period with
nearly 2.3 million customers, up 39 percent over the prior year. The company
said its strong customer gain was bolstered by brand positioning and promotional
activities.
"Competition continues to heat up for wireless service, both from
cellular providers and from new Personal Communications Services (PCS)
competitors, and 360 is meeting the challenge," said Dennis E. Foster, president
and chief executive officer of 360 Communications. "We're positioning 360 as a
company that's easy to do business with and one that delivers real value to our
customers. Our efforts have been successful, and we're extremely pleased with
the company's outstanding customer growth and the fundamentals of our cellular
business. In fact, we're experiencing very strong growth in most of our markets,
including those where we've seen new competition from PCS providers."
<PAGE>
360 Reports First Quarter Results
Page 2
360 reported total operating revenues of $307 million during the first
quarter of 1997, up 28 percent from $240 million in the same period last year.
Consolidated service revenues were $294 million, including $2 million for
residential long distance. Cellular service revenues during the quarter were
$292 million, up 27 percent from $231 million reported in the first quarter of
1996.
For the first quarter of 1997, 360 reported cellular operating cash
flow of $92 million, excluding a loss of $4 million for residential long
distance. This represents a 16 percent increase over $79 million reported in the
first quarter of 1996. Cellular operating cash flow as a percentage of cellular
service revenues was 31 percent for the quarter, compared with 34 percent for
the same period last year.
360 reported net income of $9.4 million, or 8 cents per share, for the
first quarter of 1997, up 35 percent from $7 million, or 6 cents per share, for
the first quarter of 1996.
The company reported a market penetration rate of 9.4 percent, compared
with 7.8 percent for the first quarter of 1996. 360's total market penetration
is among the highest in the industry. At March 31, 1997, 360 had more than 15
percent penetration in 11 markets.
"As previously announced, our first quarter results were impacted by
cellular cloning fraud and the implementation of simplified roaming rate plans.
Fraud is an ongoing struggle in the wireless industry. We have put systems in
place to achieve an appropriate balance between fraud prevention and customer
convenience," Foster said.
Chicago-based 360 Communications provides wireless voice and data
services to nearly 2.3 million customers in more than 100 markets in Alabama,
Florida, Illinois, Indiana, Iowa, Kentucky, Nevada, New Mexico, North Carolina,
Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West
Virginia. The company also offers residential long distance and paging services.
In addition to the New York Stock Exchange, 360 Communications' stock is listed
on the Chicago and Pacific stock exchanges under the symbol XO.
###
To obtain copies of the company's Form 10-K, 10-Qs, or copies of quarterly
earnings and other recent news releases issued by the company, please call
toll-free 1.888.360.INFO (1.888.360.4636), 24 hours a day, seven days a week.
360 Communications' news releases are also available through PR Newswire and can
be accessed by calling (800) 578-7888, #111849. 360's Internet address is
www.360.com.
<PAGE>
360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands,except share and per share amounts)
(Unaudited)
For the Three Months
Ended March 31,
---------------------------------
1997 1996 (2)
----------- ------------
Operating Revenues
Service revenues $ 293,970 $ 230,754
Equipment sales 12,876 8,941
----------- ------------
Total operating revenues 306,846 239,695
----------- ------------
Operating Expenses
Cost of service 41,489 22,139
Cost of equipment sales 28,449 20,609
Other operations expense 14,993 12,543
Sales, marketing and advertising expenses 60,581 46,970
General, administrative and other expenses 73,092 58,014
Depreciation and amortization 45,529 32,997
----------- ------------
Total operating expenses 264,133 193,272
----------- ------------
Operating Income 42,713 46,423
Interest expense (31,190) (29,828)
Minority interests in net income
of consolidated entities (9,709) (10,464)
Equity in net income of
unconsolidated entities 13,163 9,672
Other income, net (1) 3,014 459
----------- ------------
Income before income taxes 17,991 16,262
Income tax expense 8,546 9,282
----------- ------------
Net income $ 9,445 $ 6,980
=========== ============
Earnings per share $ 0.08 $ 0.06
=========== ============
Weighted average shares
outstanding 123,422 117,035
=========== ============
(1) In January 1997, the Company recognized a gain of $3 million ($2 million,
net of tax) in connection with the divestiture of its ownership interests
in two of its unconsolidated entities.
(2) Certain 1996 amounts have been reclassified to conform to the
presentation used in 1997.
<PAGE>
360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED OPERATING DATA
(Unaudited)
For the Three Months Ended
and as of March 31,
--------------------------------
1997 1996
-------------- -------------
Consolidated
EBITDA (in thousands) $ 88,242 $ 79,420
EBITDA margin 30.02% 34.42%
Capital expenditures (in thousands) $ 23,273 $ 56,776
Cellular
Controlled POPs 24,358,200 20,938,734
Controlled customers 2,280,938 1,643,009
Gross customer additions (1) 254,072 178,586
Net customer additions (1) 124,526 94,605
Average customers 2,219,930 1,560,815
Churn 1.87% 1.79%
Penetration 9.36% 7.85%
Service revenue per average customer per month $ 43.91 $ 49.28
Cost to acquire a new customer (2) $ 290 $ 328
Long Distance
Revenue (in thousands) $ 1,518 $ -----
EBITDA (in thousands) $ (3,688) $ -----
(1) There were 46,647 customers added through acquisitions in the first
quarter of 1996. The 1996 amounts exclude customer base acquired.
(2) Cost to acquire a new customer includes sales, marketing and advertising
expenses and the gross margin on equipment sales.
<PAGE>
360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, December 31,
1997 1996
------------- -------------
ASSETS
Current Assets
Cash and cash equivalents $ 8,670 $ 2,554
Accounts receivable, less allowances
of $5,319 and $5,730, respectively 90,197 102,483
Other receivables 31,023 27,090
Unbilled revenue 32,828 35,712
Inventory 39,060 35,908
Deferred income taxes 9,772 8,462
Prepaid expenses and other 14,202 16,634
------------ ------------
Total current assets 225,752 228,843
------------ ------------
Property, plant and equipment 1,519,435 1,499,407
Less: accumulated depreciation 452,246 415,981
------------ ------------
Property, plant and equipment, net 1,067,189 1,083,426
------------ ------------
Investments in unconsolidated entities 356,220 349,231
Intangibles, net 1,145,353 1,136,587
Other assets 15,225 13,982
------------ ------------
Total assets $ 2,809,739 $ 2,812,069
============ ============
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities
Trade accounts and other payables $ 153,013 $ 227,654
Short-term borrowings 13,750 43,750
Advance billings 29,446 28,314
Accrued taxes 15,608 17,951
Accrued agent commissions 7,060 12,089
Other 19,608 21,090
------------ ------------
Total current liabilities 238,485 350,848
------------ ------------
Long-term debt 1,799,513 1,699,778
------------ ------------
Deferred Credits and Other Liabilities
Deferred income taxes 116,476 113,005
Postretirement and other benefit obligations 5,915 5,855
------------ ------------
Total deferred credits and other liabilities 122,391 118,860
------------ ------------
Minority interests in consolidated entities 176,143 180,083
------------ ------------
Shareowners' Equity
Common stock 1,233 1,233
Additional paid-in capital 773,461 772,199
Accumulated deficit (301,487) (310,932)
------------ ------------
Total shareowners' equity 473,207 462,500
------------ ------------
Total liabilities and shareowners' equity $ 2,809,739 $ 2,812,069
============ ============
<PAGE>
360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Three Months
Ended March 31,
--------------------------
1997 1996
----------- -------------
Operating Activities
Net income $ 9,445 $ 6,980
Adjustments to reconcile net income to net
cash (used for) provided by operating activities:
Depreciation and amortization 45,529 32,997
Deferred income taxes 2,161 6,930
Gain on sale of cellular investments (3,029)
Equity in net income of unconsolidated
entities, net of distributions (7,803) (5,876)
Minority interests in net income of
consolidated entities 9,709 10,464
Changes in operating assets and liabilities,
excluding acquisitions
Receivables, net 15,170 4,663
Other current assets (4,389) (363)
Trade accounts and other payables (75,932) 12,965
Accrued expenses and other
current liabilities (7,763) (18,604)
Noncurrent assets and liabilities, net (1,112) (39)
Other, net 1,178 (69)
----------- -------------
Net Cash (Used for) Provided by Operating Activities (16,836) 50,048
----------- -------------
Investing Activities
Capital expenditures (23,273) (56,776)
Acquisitions and divestitures (20,924) (109,613)
Other, net (933)
----------- -------------
Net Cash Used for Investing Activities (44,197) (167,322)
----------- -------------
Financing Activities
Net (payments) borrowings under bank revolving
credit facility (100,000) 527,000
Proceeds from long-term debt 200,000 900,000
Debt issuance costs (1,609) (15,229)
Net short-term payments (30,000)
Increase in advances from affiliates 135,892
Contributions from minority investors 3,372
Distributions to minority investors (2,040) (3,673)
Repayment of advances from affiliates (1,400,000)
Other, net 798 (3,937)
----------- -------------
Net Cash Provided by Financing Activities 67,149 143,425
----------- -------------
Increase in Cash and Cash Equivalents 6,116 26,151
Cash and Cash Equivalents at Beginning of Period 2,554 19,023
----------- -------------
Cash and Cash Equivalents at End of Period $ 8,670 $ 45,174
=========== =============
<PAGE>
360 Communications....Corporate Communications....8725 W. Higgins
Road....Chicago, Illinois 60631....(773)399-2200
FOR IMMEDIATE RELEASE
MEDIA:
Margaret Kirch Cohen
360 Communications
(773) 399-2385
ANALYSTS:
Dave Gould
(773) 399-2284
360 COMMUNICATIONS ANNOUNCES STOCK BUYBACK
(CHICAGO) -- April 15, 1997 -- 360 Communications Company (NYSE:XO)
today announced that its board of directors has authorized a program to
repurchase up to 3 million shares of the company's common stock through May 1,
1998. The shares may be purchased from time to time on the open market at
prevailing prices, subject to market conditions.
360 Communications, which became an independent company following its
March 1996 spinoff from Sprint Corporation, has approximately 123.3 million
shares outstanding.
Chicago-based 360 Communications provides wireless voice and data
services to nearly 2.3 million customers in more than 100 markets in 16 states.
The company also offers residential long distance and paging services. In
addition to the New York Stock Exchange, 360 Communications' stock is listed on
the Chicago and Pacific stock exchanges under the symbol XO.
###
To obtain copies of the company's Form 10-K, 10-Qs, or copies of quarterly
earnings and other recent news releases issued by the company, please call
toll-free 1.888.360.INFO (1.888.360.4636), 24 hours a day, seven days a week.
360 Communications' news releases are also available through PR Newswire and can
be accessed by calling (800) 578-7888, #111849. 360's Internet address is
www.360.com.
