SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For Quarter ended September 30, 2000 Commission file number 333-23435
CHORUS COMMUNICATIONS GROUP, LTD.
(Exact Name of Registrant as Specified in its Charter)
WISCONSIN 39-1880843
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8501 Excelsior Drive, Madison, Wisconsin 53717
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (608) 828-2000
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
As of November 1, 2000, there were 5,374,726 shares of Common Stock outstanding.
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
3RD QUARTER REPORT ON FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 2000 and December 31, 1999
Consolidated Statements of Income -
Three and Nine Months Ended September 30, 2000 and 1999
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 2000 and 1999
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
All other schedules and compliance information called for by the instructions
to Form 10-Q have been omitted since the required information is not present
or not present in amounts sufficient to require submission.
<PAGE>
PART 1
FINANCIAL INFORMATION
Item 1. Financial Statements
CHORUS COMMUNICATIONS GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
<TABLE>
September 30, December 31,
ASSETS 2000 1999
In Thousands
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,652 $ 4,078
Temporary investments 100 800
Accounts receivable
Due from customers 4,430 5,354
Other, principally connecting
companies 2,662 1,625
Inventories 1,763 1,829
Other 2,161 1,825
Total Current Assets 12,768 15,511
PROPERTY, PLANT AND EQUIPMENT, Net 54,916 47,221
CELLULAR LIMITED PARTNERSHIP INTERESTS 3,715 3,715
PERSONAL COMMUNICATION SERVICES LICENSE 3,748 3,748
GOODWILL, Net of accumulated amortization of
$415 and $297, respectively 1,099 1,217
OTHER 1,638 1,543
TOTAL ASSETS $ 77,884 $ 72,955
</TABLE>
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
<TABLE>
September 30, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 2000 1999
In Thousands Except For Share Amounts
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt $ 1,576 $ 1,333
Notes payable to banks 11,300 4,726
Accounts payable 2,809 2,531
Accrued expenses 2,790 2,557
Other 665 638
Total Current Liabilities 19,140 11,785
LONG-TERM DEBT 23,213 24,217
DEFERRED INCOME TAXES 3,674 3,707
OTHER LIABILITIES 2,041 1,927
Total Liabilities 48,068 41,636
MINORITY INTEREST 351 377
SHAREHOLDERS' EQUITY
Common stock, no par value;
authorized 25 million shares;
issued 5,415,288 shares 14,784 14,791
Less treasury stock at cost; 41,692
and 41,880 shares respectively (713) (717)
Retained earnings 15,394 16,868
Total Shareholders' Equity 29,465 30,942
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 77,884 $ 72,955
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
In Thousands Except For Per Share Data
<S> <C> <C> <C> <C>
REVENUES AND SALES
Local exchange carrier services $ 6,499 $ 6,484 $ 19,570 $ 19,507
System sales and services 1,767 2,053 5,649 7,829
Other services and sales 2,858 2,763 8,864 7,167
Total Revenues and Sales 11,124 11,300 34,083 34,503
OPERATING COSTS AND EXPENSES
Cost of goods sold 1,302 1,680 4,293 6,166
Cost of services 3,140 2,528 8,711 6,969
Selling, general & administrative 4,077 4,055 12,541 11,522
Depreciation & amortization 1,725 1,520 5,065 4,420
Total Operating Costs
and Expenses 10,244 9,783 30,610 29,077
OPERATING INCOME 880 1,517 3,473 5,426
Other income 19 196 112 578
Interest expense (564) (452) (1,689) (1,310)
Minority interest 10 (1) 26 (2)
INCOME BEFORE INCOME TAXES 345 1,260 1,922 4,692
Income tax expense (benefit) 164 496 817 1,840
NET INCOME (LOSS) $ 181 $ 764 $ 1,105 $ 2,852
BASIC AND DILUTED EARNINGS PER SHARE $ .03 $ .14 $ .21 $ .53
Basic weighted average common
shares outstanding 5,374 5,412 5,373 5,410
Diluted weighted average common
shares outstanding 5,375 5,412 5,373 5,410
Dividends per share $ .16 $ .155 $ .48 $ .465
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
Nine Months Ended
Sept. 30, Sept. 30,
2000 1999
In Thousands
<S> <C> <C>
OPERATIONS
Net income $ 1,105 $ 2,852
Adjustments to reconcile net income
to net cash from operations:
Depreciation and amortization 5,065 4,420
Deferred income taxes (33) 42
Provision for uncollectible accounts 20 (1)
Changes in current assets and
current liabilities:
Receivables (133) (143)
Inventories 66 (117)
Payables 278 (21)
Accrued expenses 233 2,541
Other (53) (404)
Net cash from operations 6,548 9,169
INVESTING
Capital expenditures (12,787) (5,939)
Personal Communication Services license - (129)
Net decrease in short-term investments 700 400
Other 145 (3)
Net cash used in investing (11,942) (5,671)
FINANCING
Net borrowing (repayment)
of short-term bank notes 6,574 (1,126)
Long-term debt issued 5,000 -
Long-term debt repaid (6,024) (971)
Sale of common stock - 64
Sale of treasury stock under employee stock plan 72 -
Purchase of treasury stock (75) -
Dividends paid (2,579) (2,516)
Net cash provided by (used in) financing 2,968 (4,549)
Net decrease in cash and cash equivalents (2,426) (1,051)
Cash and cash equivalents:
Beginning of period 4,078 5,327
End of period $ 1,652 $ 4,276
Cash paid during the period:
Interest $ 1,672 $ 1,443
Income tax $ 864 $ 1,760
See Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
CHORUS COMMUNICATIONS GROUP, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The unaudited financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information in footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations, although
the Company believes the disclosures are adequate to make the
information presented not misleading. It is suggested that these
financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's Form 10-K for
the year ended December 31, 1999.
In the opinion of the Company, the accompanying financial statements
contain all adjustments, consisting of normal recurring accruals,
necessary to present fairly the financial position as of September 30,
2000 and December 31, 1999, the results of operations for the three and
nine month periods ended September 30, 2000 and 1999, and cash flows for
the nine months ended September 30, 2000 and 1999. The results for the
nine months ended September 30, 2000 are not necessarily indicative of
the results of operations which may be expected for the entire year
ending December 31, 2000.
2. OPERATING SEGMENTS
Chorus organizes its business into three reportable segments: local
exchange carrier (LEC) services, system sales and services and Internet
services. The LEC services segment provides telephone and data services
to customers in local exchanges located in Southern Wisconsin. The
system sales and services segment sells, installs and services business
telephone systems, and computer networks. Prior to 2000, this segment
also sold and serviced personal desktop computers. The Company's
Internet segment provides dial up and dedicated Internet services to
subscribers in Southern Wisconsin. Chorus also has operations in
directory publishing, long distance and competitive local exchange
services (CLEC), that do not meet the quantitative thresholds for
reportable segments.
Due to continued growth in 2000, the Company's Internet operations met
the requirements for a reportable segment in accordance with Statement
of Financial Accounting Standard Number 131, "Disclosures About Segments
of an Enterprise and Related Information". Accordingly, previously
reported segment information has been restated to reflect the current
presentation.
<PAGE>
<TABLE>
(In Thousands) Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
LEC Services
<S> <C> <C> <C> <C>
Revenues and sales
External customers $ 6,499 $ 6,484 $ 19,570 $ 19,507
Intersegment 391 114 1,152 438
Segment profit 1,243 1,379 4,027 4,184
System Sales and Services
Revenues and sales
External customers $ 1,767 $ 2,053 $ 5,649 $ 7,829
Intersegment (4) - 67 -
Segment (loss) (485) (581) (1,688) (1,271)
Internet
Revenues and sales
External customers $ 1,345 $ 1,074 $ 3,973 $ 3,080
Intersegment 9 - 26 -
Segment profit (loss) (113) (4) (244) 64
Other
Revenues and sales
External customers $ 1,513 $ 1,689 $ 4,891 $ 4,087
Intersegment 569 351 1,288 1,002
Segment (loss) (464) (30) (990) (125)
Total
Revenues and sales
External customers $ 11,124 $ 11,300 $ 34,083 $ 34,503
Intersegment 965 465 2,533 1,440
Segment profit (loss) 181 764 1,105 2,852
</TABLE>
3. LONG-TERM DEBT
On June 30, 2000, registered subordinate debentures of $5 million were
retired by the Company. Funds for the retirement were provided by
long-term financing by the Rural Telephone Finance Cooperative (RTFC).
Terms of the debt call for quarterly payments through 2012 with a
variable interest rate based upon RTFC's cost of funds, which at
November 1, 2000 was 8.3%. Additionally as a condition of the loan, the
Company purchased additional Subordinate Capital Certificates of
$263,000.
<PAGE>
4. EARNINGS PER SHARE AND STOCK OPTIONS
Basic earnings per share is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the
three and nine month periods ended September 30, 2000. Shares used in
the diluted earnings per share calculation are based on the weighted
average number of shares of common stock outstanding increased by
dilutive potential common equivalent shares from stock options. Common
equivalent shares are computed using the treasury stock method. As of
September 30, 2000, the Company has granted 54,100 shares of stock
options.
5. CONTINGENCIES
As described in the Company's Form 10-K for the year ended December 31,
1999, an industry controversy exists concerning incumbent LEC liability
for reciprocal compensation on certain calling activity with Internet
providers. In November of 2000, the Public Service Commission of
Wisconsin issued a generic order regarding this compensation. The
Company continues to believe that it is not legally obligated to pay the
compensation required under the order, given the facts and circumstances
of its particular contract. However, if the Company is not successful in
the challenge of this order, the Company might be required to pay up to
$0.5 million in reciprocal compensation for the period August 1, 1998
through September 30, 2000. Due to the uncertainty of this matter, this
potential liability is not reflected in the Company's financial
statements at September 30, 2000.
In the fourth quarter of 2000, Chorus is planning on moving its Internet
server operations to its new technology center. In doing so, the
Company will be replacing numerous leased circuits with its own
facilities. Termination of these lease circuits on terms shorter than
originally agreed could result in higher monthly charges computed from
the inception of the lease, resulting in an possible additional
liability of $0.2 million to the Company as of September 30, 2000, which
is not currently reflected in the financial statement due to the
uncertainty of the matter.
6. CAPITALIZED INTEREST
In the third quarter 2000, the Company capitalized $150,000 of interest.
7. RECLASSIFICATION
Certain amounts previously reported for the prior year have been
reclassified to conform to the 2000 presentation.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
OVERVIEW
Revenues for Chorus Communications Group, Ltd. and its subsidiaries (Chorus
or the Company) decreased $0.2 million and $0.4 million for the three and
nine months ended September 30, 2000 as compared to similar periods in 1999.
The decreases were primarily due to the decision to eliminate personal
desktop computers from the Company's sales offerings, offset by increases in
the Company's Internet and CLEC operating revenues.
<PAGE>
Operating costs and expenses increased $0.5 million and $1.5 million for the
three and nine months ended September 30, 2000 as compared to similar periods
in 1999. This was primarily due to costs incurred in servicing the Company's
growing Internet subscriber base, costs associated with expanding the
Company's CLEC operations and general growth of supporting corporate
operations. These increases were partially offset by a decline in cost of
goods sold related to the decline in the Company's system sales and services
revenues.
Other income was $0.2 and $0.5 million lower for the three months and nine
months ended September 30, 2000 as compared to similar periods in 1999, due
to receipts in 1999 of a partnership distribution relating to the Company's
cellular limited partnership interest.
Interest expense for the three and nine months ended September 30, 2000 was
$0.1 and $0.4 million higher than comparable periods in 1999. This was the
result of the Company's increased utilization of its short-term lines of
credit during 2000 to meet its investing and financing needs. Additionally
due to management's consideration of the sale of its PCS license, interest
related to the PCS license is being expensed, whereas prior to 2000, these
costs had been capitalized.
As a result of the above, Chorus' net income decreased $0.6 and $1.7 million
for the three and nine months ended September 30, 2000 as compared to similar
periods in 1999.
RESULTS OF OPERATIONS BY BUSINESS SEGMENT
Chorus' primary operations are local exchange carrier services, system sales
and services and Internet services.
Local Exchange Carrier Services
LEC services provide telephone and data services to customers in local
exchanges located in Southern Wisconsin. LEC services operating income
consisted of the following:
<TABLE>
(In Thousands) THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenues and Sales $ 6,890 $ 6,598 $ 20,722 $ 19,945
Operating Costs and Expenses 4,567 4,305 13,398 12,911
LEC Services Operating Income 2,323 2,293 7,324 7,034
Intercompany Eliminations 20 81 (266) 119
Operating Income $ 2,343 $ 2,374 $ 7,058 $ 7,153
</TABLE>
LEC services revenues are derived from local network services, network
access, and other services.
Local service revenues are based on fees charged to customers for providing
local telephone exchange service within designated service areas. Local
service revenues grew $0.2 million for the three months ended September 30,
2000 as compared to the same time period in 1999. For the nine months ended
September 30, 2000, as compared to similar time period in 1999, revenues
increased $0.5 million. This was principally due to an increase in
residential rates, an increase in the number of residential subscribers and
an increase in enhanced services provided, partially offset by a decrease in
business subscribers and revenues caused by competition.
<PAGE>
Operating costs increased 6.1% and 3.8% for the three and nine month periods
ended September 30, 2000, due to an increase in the Company's plant
infrastructure resulting in higher depreciation expense and due to general
growth in operations.
System Sales and Services
This segment sells, installs and services business telephone systems and
computer networks. Prior to 2000, this segment also sold and serviced
personal desktop computers.
System sales and services operating income consisted of the following:
<TABLE>
(In Thousands) THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenues and Sales $ 1,763 $ 2,053 $ 5,716 $ 7,829
Operating Costs and Expenses 2,503 2,979 8,220 9,836
System Sales and Services
Operating (Loss) (740) (926) (2,504) (2,007)
Intercompany Eliminations 216 31 584 180
Operating (Loss) $ (524) $ (895) $ (1,920) $ (1,827)
</TABLE>
The decline in revenues of $0.3 million and $2.1 million for the three and
nine months ended September 30, 2000 as compared to similar periods in 1999
was due to the Company's elimination of personal desktop computers from the
Company's sales offerings partially offset by an increase in business
telephone systems sales.
Operating costs and expenses decreased $0.5 million and $1.6 million for the
three and nine month periods ended September 30, 2000 as compared to similar
periods in 1999. The decrease was primarily due to lower cost of goods sold
resulting from the decline in sales noted above, partially offset by an
increase in selling, general and administrative costs.
Internet
This segment provides dial up and dedicated Internet services to subscribers
in Southern Wisconsin. Internet operating revenues consisted of the following:
<TABLE>
(In Thousands) THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenues and Sales $ 1,354 $ 1,074 $ 3,999 $ 3,080
Operating Costs and Expenses 1,433 989 4,160 2,801
Internet Operating
Income (Loss) (79) 85 (161) 279
Intercompany Eliminations (104) - (121) -
Operating Income (Loss) $ (183) $ 85 $ (282) $ 279
</TABLE>
<PAGE>
Internet revenues increased $0.3 million and $0.9 million for the three and
nine months ended September 30, 2000 as compared to similar periods in 1999.
The increase was primarily the result of a $3 monthly rate increase on dial
up accounts which went into effect in September of 1999 and a 12.4% growth in
the number of subscribers served.
Operating costs and expenses increased $0.4 million and $1.4 million for the
three and nine month periods ended September 30, 2000 as compared to similar
periods in 1999. This was primarily the result of increased costs necessary
to service the growth in the number of the Company's Internet subscribers, as
well as costs associated with expanding types and location of service.
Other Services and Sales
Other services and sales include operations from long distance, competitive
local exchange carrier and directory publishing operations. Other services
and sales operating income consisted of the following:
<TABLE>
(In Thousands) THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenues and Sales $ 2,082 $ 2,039 $ 6,179 $ 5,089
Operating Costs and Expenses 2,706 1,974 7,365 4,969
Other Services and Sales
Operating Income (Loss) (624) 65 (1,186) 120
Intercompany Eliminations (132) (112) (197) (299)
Operating (Loss) $ (756) $ (47) $(1,383) $ (179)
</TABLE>
Revenue from other services and sales increased $1.1 million for the nine
months ended September 30, 2000, as compared to the same time period in
1999. The increase was primarily related to CLEC revenues ($0.4 million) and
intercompany directory publishing revenues ($0.6 million).
Operating costs and expenses increased $0.7 million and $2.4 million for the
three and nine month periods ended September 30, 2000 as compared to similar
periods in 1999. This was primarily due to costs incurred relating to
expanding the Company's CLEC operations. The nine month period also included
costs associated with the increase in publishing revenues noted above.
LIQUIDITY AND CAPITAL RESOURCES
OVERVIEW
Chorus requires funds primarily for its construction programs, the maturity
and retirement of long-term debt, repurchase of Company stock, dividend
payments and investments. The capital resources available to meet these
requirements are provided through operating and financing activities. Net
cash from operating activities of Chorus and its subsidiaries for the first
nine months of 2000 was $6.5 million.
<PAGE>
INVESTING ACTIVITIES AND CAPITAL REQUIREMENTS
The primary capital requirement of Chorus has historically consisted of
expenditures under its construction program. Total construction expenditures
for the first nine months of 2000 were $12.8 million.
The Company owns 75% of PCS Wisconsin, LLC (PCS-WI). PCS-WI was granted a
personal communications services (PCS) license from the Federal
Communications Commission in April of 1997 which allows it to construct and
operate a PCS network in ten counties in Southern Wisconsin. Under the terms
of the license, there must be a 25% buildout within five years. Buildout
would require substantial capital and operating expenditures in a highly
competitive market. Management is currently considering various opportunities
with regard to buildout, partnering with established wireless providers
and/or the sale of the license.
FINANCING ACTIVITIES
On June 30, 2000, registered subordinate debentures of $5 million were
retired by the Company. Funds for the retirement were provided by long-term
financing by the Rural Telephone Finance Cooperative (RTFC). Terms of the
debt call for quarterly payment through 2012 with a variable interest rate
based upon RTFC's cost of funds, which at November 1, 2000 was 8.3%. As a
condition of the loan, the Company purchased additional Subordinate Capital
Certificates of $263,000.
In addition to the above financing activities, Chorus borrowed a net $6.6
million of short-term debt, while repaying $1.0 million on other long-term
debt during the first nine months of 2000.
In 1999, the Company's Board of Directors authorized management to repurchase
shares of Chorus common stock in the open market or through private
transactions. Through November 1, 2000 the Company repurchased 46,318 shares
for $0.8 million, with 5,755 shares being subsequently reissued in 2000 under
the Company's Employee Stock Ownership Plan. Management has the authority to
repurchase approximately 494,000 additional shares, with no definite
timetable.
It is anticipated that the cash requirements for Chorus' construction
programs, retirement of long-term debt, repurchase of Company stock, dividend
payments and investments will be provided for with cash flow from operating
activities and the issuance of debt. Competition and lower earnings may have
a negative impact on Chorus' future operations and cash flows.
Chorus obtained a waiver through November 30, 2000 for non-compliance with a
short-term debt covenant.
At October 31, 2000, Chorus has available unused lines-of-credit of $2.5
million.
<PAGE>
REGULATION
Pursuant to a nationwide rule adopted by the Federal Communications
Commission, the Public Service Commission of Wisconsin ( the "Commission") in
November 2000 issued an order to collect data to establish a minimum of three
cost-related zones for unbundled local loops. Although the impact upon the
ILEC operations of Mid-Plains, Farmers Telephone Company and Dickeyville
Telephone Corporation is not known, among other potential impacts the
possibility exists that Mid-Plains will be required to geographically
de-average its unbundled local loop rates at some time in the future, which
could adversely affect its revenues and results of operations.
Also in November 2000, the Commission issued a generic order regarding
reciprocal compensation. For a discussion of this order see Note 5 to the
financial statements included in this Form 10-Q.
FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and Results
of Operations includes, and future filings by the Company on Form 10-K, Form
10-Q and Form 8-K, and future oral and written statements by the Company and
its management may include statements that are based on our estimates and
assumptions, and are subject to risks and uncertainties. Forward-looking
statements include information concerning our possible or assumed future
results of operations. Forward-looking statements also include those
preceded or followed by the words "anticipates," "believes," "estimates,"
"expects" or similar expressions. For those statements, we claim the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
The following important factors, along with those discussed elsewhere in this
report and other reports issued by the Company, could affect future results
and could cause those results to differ materially from those expressed in
the forward-looking statements: materially adverse changes in economic
conditions in the markets served by us; material changes in available
technology; federal, state and local regulatory and judicial decisions and
proceedings, pertaining to, among other matters, the terms of interconnection,
access charges, universal service, and unbundled network element and resale
rates; the extent, timing, success, and overall effects of competition from
others in the markets we currently serve; and the timing and profitability of
our entry into new internet and competitive local exchange markets.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company has debt financial instruments that are sensitive to changes in
interest rates. The interest rates on the Company's short-term debt are
variable and are tied to the London Interbank Offered Rate or prime, while
the interest rate on its long-term variable interest debt is tied to the
Rural Telephone Finance Cooperatives cost of funds. Market risk is defined
as the potential decrease in annual earnings resulting from a hypothetical
increase of 10% in the interest rates. Such an increase in rates would
result in approximately $0.1 million reductions in earnings. To manage this
risk, the Company has maintained a mixture of both variable and fixed
interest debt.
<PAGE>
PART II.
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits
3(i) Articles of Incorporation (incorporated by reference to
Form 8-12G, reporting under Exchange Act Section 12(g), filed
on December 2, 1997, File No. 000-23443)
3(ii) By-Laws (incorporated by reference to Form 10-K, reporting
under Exchange Act Section 12(g), filed on March 30, 1999,
File No. 000-23443)
(27) Financial Data Schedule
(b) Reports on Form 8-K
On September 14, 2000 the Company filed a Form 8-K stating that
shareholders of record on September 1, 2000 were sent correspondence
concerning cash dividends and results of operations for the six months
ended June 30, 2000.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
CHORUS COMMUNICATIONS GROUP, LTD.
(Registrant)
Date: November 14, 2000 /s/Dean W. Voeks
Dean W. Voeks
President, Chief Executive Officer and Director
Date: November 14, 2000 /s/Howard G. Hopeman
Howard G. Hopeman
Executive Vice-President, Chief
Financial Officer and Treasurer
