<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
---------------
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 31, 1998
---------------
IXC COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
COMMISSION FILE NUMBER 0-20803
DELAWARE 75-2644120
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1122 CAPITAL OF TEXAS HIGHWAY SOUTH,
AUSTIN, TEXAS 78746-6426
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) (512) 328-1112
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On June 3, 1998, the Company completed the acquisition of Network Long
Distance, Inc., now named Eclipse Telecommunications, Inc. ("Eclipse") in a
transaction accounted for as a pooling of interests. The acquisition was
completed through a merger of a Company subsidiary with Eclipse.
The Company released its Form 10-Q for the quarter and six-month
period ended June 30, 1998 on August 12, 1998. The condensed consolidated
financial statements included in that Form 10-Q were stated on a combined basis
as if Eclipse had always been a part of the Company. Following are condensed
consolidated statements of operations for each the four quarters in the year
ended December 31, 1997, and for the quarters ended March 31, 1998, and June 30,
1998, and certain operating results for the month ended July 31, 1998, stated on
a combined basis as if Eclipse had always been a part of the Company. The
condensed consolidated financial statements are unaudited. They do not include
all of the information and notes required by generally accepted accounting
principles for complete financial statements. However, management believes that
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation for the periods indicated have been included. Operating
results for the quarters ended March 31, 1998, and June 30, 1998, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1998. Certain amounts shown in the 1997 financial information have
been reclassified to conform to the 1998 presentation.
<PAGE> 3
IXC COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED
-------------------------------------------------------------- YEAR ENDED
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1997 1997 1997 1997 1997
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net operating revenue:
Private line ............................. $ 30,869 $ 38,494 $ 41,948 $ 51,087 $ 162,398
Long distance switched services .......... 76,013 75,318 94,881 113,007 359,219
--------- --------- --------- --------- ---------
106,882 113,812 136,829 164,094 521,617
Operating expenses:
Cost of services ......................... 84,894 90,979 101,035 118,759 395,667
Operations and administration ............ 21,983 24,380 28,047 28,350 102,760
Depreciation and amortization ............ 10,914 14,559 22,866 19,065 67,404
Merger related costs ..................... 3,325 -- 302 (36) 3,591
--------- --------- --------- --------- ---------
Operating loss ................... (14,234) (16,106) (15,421) (2,044) (47,805)
Interest income ............................ 1,295 1,172 2,232 3,069 7,768
Interest expense ........................... (7,991) (8,096) (8,027) (7,588) (31,702)
Equity in net loss of unconsolidated
subsidiaries .............................. (1,819) (4,532) (7,317) (10,132) (23,800)
Other, net ................................. 14 12 (1,757) 25 (1,706)
--------- --------- --------- --------- ---------
Loss before (provision) benefit for income
taxes and minority interest ............... (22,735) (27,550) (30,290) (16,670) (97,245)
(Provision) benefit for income taxes ....... 440 (250) (696) (853) (1,359)
Minority interest .......................... (203) (114) (186) (57) (560)
--------- --------- --------- --------- ---------
Net loss ................................... (22,498) (27,914) (31,172) (17,580) (99,164)
Dividends applicable to preferred stock .... (470) (2,288) (6,727) (12,037) (21,522)
--------- --------- --------- --------- ---------
Net loss applicable to common stockholders . $ (22,968) $(30,202) $ (37,899) $ (29,617) $(120,686)
========= ========= ========= ========= =========
Basic and diluted net loss per share: ...... $ (0.67) $ (0.87) $ (1.09) $ (0.84) $ (3.47)
========= ========= ========= ========= =========
Shares used in calculating net loss per
share ..................................... 34,383 34,696 34,791 35,239 34,777
========= ========= ========= ========= =========
EBITDA (a) ................................. $ 5 $ (1,547) $ 7,747 $ 16,985 $ 23,190
========= ========= ========= ========= =========
</TABLE>
- ----------
(a) EBITDA is defined as operating income (loss) plus depreciation and
amortization and merger related costs. EBITDA is not a measurement
determined in accordance with generally accepted accounting principles and
should not be considered in isolation or as a substitute for measures of
performance in accordance with generally accepted accounting principles.
EBITDA is not necessarily comparable with similarly titled measures for
other companies.
<PAGE> 4
IXC COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX
THREE MONTH PERIOD ENDED MONTHS
-------------------------- ENDED
MARCH 31, JUNE 30, JUNE 30,
1998 1998 1998
--------- --------- ---------
<S> <C> <C> <C>
Net operating revenue:
Private line ............................. $ 43,816 $ 50,433 $ 94,249
Long distance switched services .......... 113,767 105,502 219,269
--------- --------- ---------
157,583 155,935 313,518
Operating expenses:
Cost of services ......................... 107,949 107,593 215,542
Operations and administration ............ 29,336 29,992 59,328
Depreciation and amortization ............ 20,152 22,636 42,788
Merger related costs ..................... (36) 7,681 7,645
--------- --------- ---------
Operating income loss ............ 182 (11,967) (11,785)
Interest income ............................ 1,597 3,324 4,921
Interest expense ........................... (6,311) (8,530) (14,841)
Equity in net loss of unconsolidated
subsidiaries ............................. (11,265) (10,754) (22,019)
Other, net ................................. 143 33 176
--------- --------- ---------
Loss before (provision) benefit for income
taxes, minority interest and
extraordinary loss ....................... (15,654) (27,894) (43,548)
(Provision) benefit for income taxes ....... (2,068) (4,551) (6,619)
Minority interest .......................... (173) (252) (425)
--------- --------- ---------
Loss before extraordinary loss ............. (17,895) (32,697) (50,592)
Extraordinary loss on early extinguishment of
debt, net of provision for income tax of
$3,407 ................................... -- (69,810) (69,810)
--------- --------- ---------
Net loss ................................... (17,895) (102,507) (120,402)
Dividends applicable to preferred stock .... (11,736) (15,471) (27,207)
--------- --------- ---------
Net loss applicable to common stockholders . $ (29,631) $(117,978) $(147,609)
========= ========= =========
Basic and diluted loss per share:
Before extraordinary loss ................ $ (0.83) $ (1.35) $ (2.18)
Extraordinary loss ....................... -- (1.95) (1.96)
--------- --------- ---------
Net loss ................................... $ (0.83) $ (3.30) $ (4.14)
========= ========= =========
Shares used in calculating net loss per
share .................................... 35,522 35,785 35,653
========= ========= =========
EBITDA (a) ................................. $ 20,298 $ 18,350 $ 38,648
========= ========= =========
</TABLE>
- ----------
(a) EBITDA is defined as operating income (loss) plus depreciation and
amortization and merger related costs. EBITDA is not a measurement
determined in accordance with generally accepted accounting principles and
should not be considered in isolation or as a substitute for measures of
performance in accordance with generally accepted accounting principles.
EBITDA is not necessarily comparable with similarly titled measures for
other companies.
<PAGE> 5
Consolidated net operating revenues and net loss for the one month period ended
July 31, 1998, were $55,703,000 (unaudited) and $3,663,000 (unaudited),
respectively. Operating results for the one month period ended July 31, 1998,
are not necessarily indicative of the results that may be expected for the three
month period ended September 30, 1998, or for the year ended December 31, 1998.
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 21, 1998
IXC Communications, Inc.
By: /s/ STUART K. COPPENS
-------------------------------------
Stuart K. Coppens
Vice President of Finance and
Chief Accounting Officer
