UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: November 6, 1997
(date of earliest event reported): (October 1, 1997)
DOBSON COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
OKLAHOMA 333-23769
(State or other jurisdiction of (Commission File No.)
incorporation or organization)
73-1110531
(I.R.S Employer Identification No.)
13439 North Broadway Extension
Suite 200
Oklahoma City, Oklahoma 73114
(Address of principal executive offices) (Zip Code)
(405) 391-8500
(Registrant's telephone number, including area code)
<PAGE>
This Current Report on Form 8-K/A amends the Current Report on Form 8-K filed
by Dobson Communications Corporation ("DCC") on October 15, 1997 to add the
financial statements of the business acquired required by Item 7(a), the pro
forma financial information required by Item 7(b), and additional exhibits
required by Item 7 (c).
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
(1) The audited financial statements of the Gila River Cellular
General Partnership ("Partnership") as of December 31,
1996 and 1995 and for the years ended December 31, 1996, 1995,
and 1994 are incorporated herein by reference to pages F-49 to
F-56 of the Prospectus forming a part of DCC's Registration
Statement on Form S-4 (No. 333-23769).
(2) The unaudited financial statements of the Partnership as of
June 30, 1997 and for the six months ended June 30, 1997 and
1996 are set forth below.
<PAGE>
GILA RIVER CELLULAR GENERAL PARTNERSHIP
CONDENSED BALANCE SHEETS
As of June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
1997
-----------
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 4,716,654
Accounts receivable, net 938,314
Other current assets 43,103
-----------
Total current assets 5,698,071
-----------
PROPERTY AND EQUIPMENT, net 7,393,593
-----------
Total assets $13,091,664
===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable $ 721,035
Accrued liabilities 100,335
-----------
Total current liabilities 821,370
Other non-current liabilities 8,002
Partners' capital 12,262,292
-----------
Total liabilities and partners' capital $13,091,664
===========
</TABLE>
See accompanying note to unaudited condensed financial statements.
<PAGE>
GILA RIVER CELLULAR GENERAL PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
---------------------------------
1997 1996
----------- ------------
<S> <C> <C>
OPERATING REVENUES:
Cellular service $ 1,275,052 $ 957,105
Cellular roaming 3,657,721 2,685,005
Cellular equipment sales 228,953 133,392
Other 54,157 34,295
----------- -----------
Total operating revenues 5,215,883 3,809,797
----------- -----------
OPERATING EXPENSES:
Cellular service 701,849 412,015
Cellular equipment 241,329 173,690
Selling 388,955 548,148
General and administrative 634,876 630,720
Depreciation and
amortization 601,058 481,739
----------- -----------
Total operating expenses 2,568,067 2,246,312
----------- -----------
OPERATING INCOME 2,647,816 1,563,485
----------- -----------
OTHER INCOME (EXPENSE):
Interest income 82,791 -
Interest expense - (49,361)
Other (9,267) -
----------- -----------
Total other income(expense) 73,524 (49,361)
----------- -----------
NET INCOME $ 2,721,340 $ 1,514,124
=========== ===========
</TABLE>
See accompanying note to unaudited condensed financial statements.
<PAGE>
GILA RIVER CELLULAR GENERAL PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------------
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities $ 3,303,836 $ 1,697,913
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (612,953) (244,481)
----------- -----------
Net cash used in investing activities (612,953) (244,481)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITES:
Change in due to managing partner 456,176 (1,453,432)
----------- -----------
Net cash used in financing activities 456,176 (1,453,432)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,147,059 -
CASH AND CASH EQUIVALENTS, beginning of
period 1,569,595 -
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 4,716,654 $ -
=========== ===========
</TABLE>
See accompanying note to unaudited condensed financial statements.
<PAGE>
GILA RIVER CELLULAR GENERAL PARTNERSHIP
NOTE TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 1997 and 1996
BASIS OF PRESENTATION
The unaudited condensed financial statements include all normal adjustments
which, in the opinion of management, are necessary to present fairly the con-
densed financial position at June 30, 1997, and the results of operations and
cash flows for the six months ended June 30, 1997 and 1996. These unaudited
condensed financial statements should be read in conjunction with the December
31, 1996 financial statements and related notes which have been incorporated by
reference in this Form 8-K/A.
RECENT TRANSACTION
Subsequent to June 30, 1997, and effective October 1, 1997, the Gila River
Cellular General Partnership (the "Partnership") completed the transaction
wherein Dobson Communications Corporation ("DCC") agreed to purchase the in-
terests of the general partners. As a result of this transaction, Dobson
and the Gila River Indian Community own a 100% interest in Arizona 5 RSA.
See Note 1 and Note 4 of the December 31, 1996 financial statements for
more information related to this transaction.
<PAGE>
(b) Pro Forma Financial Information
(1) The unaudited pro forma consolidated condensed balance sheet
and statement of operations as of December 31, 1996 and for
the year then ended included under the caption "Pro Forma
Consolidated Financial Data," pages 37 to 41, in the Prospectus
forming a part of the Company's Registration Statement on Form
S-4 (No. 333-23769) are incorporated herein by reference.
(2) The following unaudited pro forma condensed consolidated
balance sheet and statement of operations as of June 30, 1997
and for the six months then ended give effect to DCC's
1997 acquisitions.
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED BALANCE SHEET
June 30, 1997
($ in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Dobson
Communications Arizona 5 Pro
Corporation Partnership Adjustments Forma
----------------------------------------------------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash restricted $ 38,231 - - $ 38,231
Current assets 16,279 5,698 629 (a) 22,606
Property, plant and equipment 69,514 7,394 - 76,908
Receivables- affiliates 5,035 - (3,960) (d) 1,075
Notes receivable 6,111 (b) 6,111
Cellular license acquisition costs 161,234 - 41,201 (c) 202,435
Intangible assets 21,273 - (3,016) (e) 18,257
Investment in unconsolidated
subsidiaries and other 2,225 - - 2,225
-------- ------- -------- --------
Total assets $313,791 $13,092 44,925 $367,848
======== ======= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities 16,832 822 - 17,654
Long-term debt, net of current portion 309,000 8 39,952 (d) 348,960
Deferred credits 1,087 - - 1,087
Minority interests 3,230 - 13,275 (f) 16,505
Preferred stock 11,623 - - 11,623
Stockholders' equity
(deficit) (27,981) 12,262 (12,262) (g) (27,981)
-------- ------- -------- --------
Total liabilities and
stockholders' equity $313,791 $13,092 $ 44,925 $367,848
======== ======= ======== ========
</TABLE>
See accompanying notes to unaudited pro forma consolidated condensed
financial statements.
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED STATEMENT OF OPERATIONS
Six Months Ended June 30, 1997
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Dobson Horizon
Communications Properties and Arizona 5 Pro
Corporation Maryland 2 Partnership Adjustments Forma
---------------- -------------- -------------- --------------- ----------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Cellular service $16,272 $ 2,953 $ 1,275 - $ 20,500
Cellular roaming 9,855 2,055 3,658 - 15,568
Cellular equipment sales 357 54 229 - 640
Wireline telephone service 7,414 - - 7,414
Fiber service revenues 1,704 - - 1,704
Other 508 54 - 562
-------- -------- -------- -------- --------
Total operating revenues 36,110 5,062 5,216 - 46,388
-------- -------- -------- -------- --------
OPERATING EXPENSES:
Cellular service 5,384 1,153 702 - 7,239
Cellular equipment 1,790 217 241 - 2,248
Wireline telephone service 980 - - 980
Fiber service 145 - - 145
Marketing and selling 4,113 818 389 - 5,320
General and administrative 9,060 1,073 635 - 10,768
Depreciation and
amortization 9,593 405 601 3,035 (h) 13,634
-------- -------- -------- -------- --------
Total operating expenses 31,065 3,666 2,568 3,035 40,334
-------- -------- -------- -------- --------
OPERATING INCOME 5,045 1,396 2,648 (3,035) 6,054
-------- -------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest income 1,073 83 - 1,156
Interest expense (11,648) (126) - (5,080) (i) (16,854)
Other 36 (9) - 27
-------- -------- -------- -------- --------
Total other expense (10,539) (126) 74 (5,080) (15,671)
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE MINORITY
INTERESTS IN INCOME OF
SUBSIDIARIES, INCOME TAXES AND
EXTRAORDINARY ITEMS (5,494) 1,270 2,722 (8,115) (9,617)
MINORITY INTERESTS IN INCOME OF
SUBSIDIARIES (801) - - (242) (j) (1,043)
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME
TAXES AND EXTRAORDINARY ITEMS (6,295) 1,270 2,722 (8,357) (10,660)
INCOME TAX (PROVISION) BENEFIT 252 - 174 (k) 426
-------- -------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS (6,043) 1,270 2,722 (8,183) (10,234)
======== ======== ======== ======== ========
NET LOSS FROM CONTINUING
OPERATIONS PER SHARE $(10.54) - - $(17.86)
======== ======== ======== ======== ========
WEIGHTED AVERAGE COMMON SHARES AND
COMMON SHARE EQUIVALENTS OUTSTANDING 573,152 - - 573,152
======== ======== ======== ======== ========
</TABLE>
See accompanying notes to unaudited pro forma consolidated condensed statement
of operations.
<PAGE>
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Accounting
On October 1, 1997, Dobson Communications Corporation ("DCC") completed
the acquisition of a 75 percent interest in the Gila River Cellular
General Partnership ("Partnership") in exchange for approximately
$39,825,000 in cash ("Arizona 5 Acquisition).
On March 3, 1997, DCC acquired the FCC licenses for and assets related to
the Maryland 2 RSA ("Maryland 2") for $75.8 million in cash (the
"Maryland 2 Acquisition").
On February 28, 1997, DCC acquired the FCC licenses for and assets
related to the Cumberland MSA, Hagerstown MSA, Maryland 3 RSA and
Pensylvania 10 West RSA (collectively, the "Horizon Properties") for
$77.7 million in cash (the "Horizon Properties Acquisition"). The
Arizona 5 Acquisition, Maryland 2 Acquisition and Horizon Properties
Acquisition are hereafter referred to collectively as the "Acquisitions."
The pro forma unaudited consolidated statement of operations gives effect
to the Acquisitions and related financings as if they had taken place on
January 1, 1997. The pro forma unaudited condensed consolidated balance
has been prepared as if the Arizona 5 Acquisition occurred on June 30,
1997. The Acquisitions have been accounted for using the purchase method
of accounting.
The pro forma condensed combined financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
of DCC and with the financial statements and notes thereto of the Arizona
5 Partnership, Horizon Properties, and Maryland 2.
The unaudited pro forma consolidated condensed financial statements and
notes thereto are provided for informational purposes only and do not
purport to be indicative of the results that would have actually been
obtained had DCC, Horizon Properties, Maryland 2, and the Arizona 5
Partnership been combined during the periods presented. In addition, the
pro forma results are not intended to be a projection of future results.
2. Pro Forma Condensed Consolidated Balance Sheet and Pro Forma Condensed
Consolidated Statement of Operations
(a) To reflect an escrow receivable of approximately $.6 million which
will be returned to DCC within one year.
(b) To reflect a $6.1 million non-recourse loan to Gila River
Telecommunications Subsidiary, Inc. ("GRTSI") to finance a portion
of the purchase price for a 25% interest in the Partnership acquired
by GRTSI at the same time DCC completed the Arizona 5 Acquisition.
(c) To allocate the purchase price of the Partnership to the assets
acquired.
(d) To reflect the increase in borrowings used to finance the Arizona 5
Acquisition of approximately $43.9 million net of repayments by cer-
tain related parties of approximately $4.0 million of liabilities
owed to DCC upon consummation of the Arizona 5 Acquisition.
(e) To apply previously paid escrow deposit of approximately $2.7 mil-
lion and other costs of approximately $.3 million to the purchase
price.
(f) To reflect the 25% equity interest in the Partnership owned by
GRTSI.
(g) To eliminate partners' capital account of the Arizona 5 Partnership.
(h) To reflect the additional depreciation and amortization resulting
from the increase in the fair value of property and equipment
and cellular license acquisition costs of approximately $1.3 mil-
lion relating to the Arizona 5 Partnership for the six month period
and approximately $1.7 million relating to the Horizon Properties
and Maryland 2 for two months (acquired February 28, 1997 and
March 3, 1997, respectively). Property and equipment is being
depreciated over five to eight years, cellular license acquisi-
tion costs over fifteen years, and intangible assets over five
years. The fifteen-year period used for cellular acquisition costs
is based primarily on DCC's internal analysis of the recovery period
for its cellular investments, which indicates that such costs
will be recovered through operations over a period of not more
than fifteen years.
(i) To reflect $5.1 million of interest expense relating to the addi-
tional indebtedness incurred in conjunction with the Acquisi-
tions, of which approximately $2.4 million relates to the Arizona 5
Partnership for the six month period and approximately $2.7 mil-
lion which relates to the Horizon Properties and Maryland 2 for
two months.
(j) To reflect the 25% equity interest in the income of the Arizona 5
Partnership owned by GRTSI.
(k) To reflect an adjustment to income tax expense for the effects
of the Acquisitions. Net operating loss carryforwards have not
been recognized as an income tax benefit due to the uncertainty of
realizing the benefit of these carryforwards.
(c) Exhibits
The following exhibits are filed as a part of this report:
EXHIBIT
NO. DESCRIPTION
- ------- -----------
2.1 Purchase Agreement dated February 28, 1997 among Aztel, Inc., Gila
River Telecommunications, Inc., U S West New Vector Group, Inc.,
Tohono O'odham Utility Authority and Dobson Cellular of Arizona, Inc.
Incorporated herein by reference to Exhibit 10.5.3 to the Company's
Registration Statement on Form S-4 (No. 333-23769) (1)
2.1.1 First Amendment to Purchase Agreement dated August 29, 1997 (1)
2.2 Stock Purchase Agreement dated September 30, 1997 among Dobson
Operating Company, Associated TTI Limited Partnership and Hinton CATV
relating to the Company's purchase of the ATTI stock (1)
10.7 Non-Recourse Term Loan Agreement dated September 30, 1997
between the Company and Gila River Telecommunications Subsidiary,
Inc., as borrower, with respect to $6.1 million loan (1)
10.8 Second Amended and Restated Partnership Agreement of Gila River
Cellular General Partnership dated September 30, 1997 (1)
23.1 Consent of Arthur Andersen LLP with respect to Gila River Cellular
General Partnership
99 Press release dated October 6, 1997 announcing the Company's acquisi-
tion of its interest in the Partnership (2)
__________________
(1) Previously incorporated by reference to Current Report on Form 8-K
filed on October 15, 1997
(2) Previously filed with the Current Report on Form 8-K filed on
October 15, 1997
<PAGE>
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: November 6, 1997 Dobson Communications Corporation
(Registrant)
By: BRUCE R. KNOOIHUIZEN
Bruce R. Knooihuizen
Vice President and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
- ------- ----------- ----------------
<S> <C> <C>
2.1 Purchase Agreement dated February Incorporated herein by reference
28, 1997 among Aztel, Inc., Gila
River Telecommunications, Inc.,
U S West New Vector Group, Inc.,
Tohono O'odham Utility Authority
and Dobson Cellular of Arizona, Inc.
2.1.1 First Amendment to Purchase Agree- Incorporated herein by reference
ment dated August 29, 1997
2.2 Stock Purchase Agreement dated Incorporated herein by reference
September 30, 1997 among Dobson
Operating Company, Associated TTI
Limited Partnership and Hinton
CATV relating to the Company's
purchase of the ATTI stock
10.7 Non-Recourse Term Loan Agreement Incorporated herein by reference
dated September 30, 1997
between the Company and Gila
River Telecommunications Subsidiary,
Inc., as borrower, with respect
to $6.1 million loan
10.8 Second Amended and Restated Partner- Incorporated herein by reference
ship Agreement of Gila River
Cellular General Partnership dated
September 30, 1997
23.1 Consent of Arthur Andersen LLP with Filed herewith electronically
respect to Gila River Cellular
General Partnership
99 Press release dated October 6, 1997 Incorporated herein by reference
announcing the Company's acquisi-
tion of its interest in the
Partnership
</TABLE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report incorporated by reference in this Form 8-K/A, as it relates to Gila
River Cellular General Partnership, into Dobson Communications Corporation's
previously filed Registration Statement File No. 333-23769. It should be
noted that we have not audited any financial statements of Gila River Cellular
General Partnership subsequent to December 31, 1996 or performed any audit pro-
cedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
Seattle, Washington,
October 31, 1997
