SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended SEPTEMBER 30, 1997
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to ________________
Commission file number 0-9728
GST EQUIPMENT FUNDING, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 91-1785734
- ---------------------------------- --------------------------------------
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization Number)
4001 Main Street, Vancouver, Washington 98663
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (360) 906-7100
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(A)
AND (B) OF FORM 10-K AND IS THEREFORE FILING THIS FORM 10-K WITH THE
REDUCED DISCLOSURE FORMAT CONTEMPLATED THEREBY.
Indicate by check mark 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
<PAGE>
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the latest practicable date: At
January 7, 1998, there were outstanding 100 shares of the Registrant's common
stock, $.01 par value per share.
<PAGE>
ITEM 1. BUSINESS
OVERVIEW
GST Equipment Funding, Inc. ("GST Funding") is a special purpose
finance subsidiary of GST Telecommunications, Inc. ("GST"). GST Funding was
formed to issue its 13 1/4% Senior Secured Notes due 2007 (the "Secured Notes")
that were sold in a private placement in May 1997 (the "Secured Notes Offering")
and to purchase equipment with the proceeds of the Secured Notes Offering. GST
Funding acts as a purchasing agent for GST USA, Inc., a wholly owned subsidiary
of GST and the parent of GST Funding ("GST USA") and sells to GST USA the
equipment it purchases. Ultimately, such equipment is leased to the operating
subsidiaries of GST by GST USA. Of the $255.8 million of net proceeds from the
issuance of the Secured Notes, as of September 30, 1997 approximately $93.8
million was used to purchase securities pledged to fund the first six interest
payments on the Secured Notes and approximately $91.3 million was used to
purchase telecommunications equipment ($41.5 million of which was used to
refinance intercompany indebtedness).
GST provides a broad range of integrated telecommunications products
and services, primarily to business customers located in the western continental
United States and Hawaii. As a facilities-based competitive local exchange
carrier, GST operates state-of-the-art, digital telecommunications networks that
represent an alternative to incumbent local exchange carriers. GST's full line
of products, which offer a "one-stop" solution to customers' telecommunications
services requirements, include long distance, Internet, data transmission and
private line services, and local dial tone services, which were recently
introduced.
GST's digital networks currently serve 39 markets in Arizona,
California, Hawaii, Idaho, New Mexico, Texas and Washington. In addition, GST
has networks under construction which, when completed, will serve three
additional markets and expand its regional footprint to Oregon. GST also
constructs, markets and manages longhaul fiber optic facilities, principally in
Arizona, California and Hawaii. GST's longhaul fiber optic facilities currently
extend approximately 600 route miles and an additional 1,100 route miles are
expected to become operational over the next 12 months.
ITEM 2. PROPERTIES.
GST Funding neither owns nor leases material properties.
ITEM 3. LEGAL PROCEEDINGS.
There are no material legal proceedings to which GST Funding is a
party. GST Funding knows of no threatened or pending material legal action
against it.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not required.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
There is no established public trading market for GST Funding's common
equity. All of the issued and outstanding shares of such common equity are owned
by GST USA.
-1-
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
Not required.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
OVERVIEW
GST Funding was formed on March 5, 1997 for the purpose of issuing the
Secured Notes and financing the purchase of telecommunications equipment. GST
Funding acts as purchasing agent for GST USA and sells to GST USA the equipment
it purchases with the proceeds from the Secured Notes Offering. GST Funding has
only a limited operating history.
As of September 30, 1997, GST Funding has purchased approximately $91.3
million of equipment and holds restricted cash and investments of approximately
$170.7 million restricted for the acquisition of equipment and the payment of
interest. All of such equipment has been sold to GST USA in exchange for
intercompany notes. Ultimately, such equipment is leased by GST USA to the
various operating subsidiaries of GST.
OPERATIONS
The operations of GST Funding are limited to (i) purchasing equipment,
(ii) selling equipment, (iii) receiving payments under intercompany notes, (iv)
making payments of interest and principal on the Secured Notes, and (v)
fulfilling its obligations under the indenture relating to the Secured Notes,
the pledge agreement relating to the security interest in the Secured Notes and
the registration rights agreement relating to the Secured Notes. GST Funding
satisfied its obligations under such registration rights agreement in November
1997, upon the consummation of an exchange offer for the Secured Notes.
LIQUIDITY AND CAPITAL RESOURCES
On May 13, 1997, GST Funding completed the Secured Notes Offering,
consisting of $265.0 million in Secured Notes. Of the $255.8 million of net
proceeds from the issuance of the Secured Notes, as of September 30, 1997
approximately $93.8 million was used to purchase securities pledged to fund the
first six interest payments on the Secured Notes and approximately $91.3 million
was used to purchase telecommunications equipment ($41.5 million of which was
used to refinance intercompany indebtedness). The indenture governing the
Secured Notes includes restrictive covenants which, among other items, limit or
restrict additional indebtedness incurred by GST Funding and GST, investment in
certain subsidiaries and the payment of dividends.
ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
-2-
<PAGE>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Not required.
ITEM 11. EXECUTIVE COMPENSATION.
Not required.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Not required.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not required.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K.
(a)(1) Financial Statements: see the Index to Financial Statements.
(2) Financial Statement Schedules: see the Index to Financial Statements.
(3) Exhibits:
*3(a) Certificate of Incorporation of GST Funding.
*3(b) By-Laws of GST Funding.
*4(a) Indenture dated as of May 13, 1997, by and among GST Funding, GST, GST
USA and United States Trust Company of New York.
*10(a) Collateral Pledge and Security Agreement dated as of May 13, 1997, by
and among GST Funding, United States Trust Company of New York and the
holders of the Notes as defined therein.
**27 Financial Data Schedule.
- ----------------------------------------
* Incorporated by reference to GST Funding's Registration Statement on
Form S-4 (No. 333-33601).
** Filed herewith.
(b) Reports on Form 8-K: None.
-3-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Vancouver, State of Washington, on the 7th day of January, 1998.
GST EQUIPMENT FUNDING, INC.
By: /S/ JOHN WARTA
-----------------------------
John Warta,
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John Warta, Stephen Irwin, Daniel
Trampush and Clifford V. Sander his true and lawful attorney-in-fact, each
acting alone, with full power of substitution and resubstitution for him and in
his name, place and stead, in any and all capacities to sign any and all
amendments to this report, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact or
their substitutes, each acting alone, may lawfully do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been duly signed by the following persons in the
capacities on January 7, 1998.
SIGNATURE TITLE
/S/ JOHN WARTA
---------------------------- Chairman of the Board, Chief Executive Officer
(John Warta) (Principal Executive Officer) and Director
/S/ DANIEL L. TRAMPUSH
- ----------------------------- Vice President and Chief Financial Officer
(Daniel L. Trampush) (Principal Financial Officer)
/S/ CLIFFORD V. SANDER
- ----------------------------- Vice President, Treasurer and Assistant
(Clifford V. Sander) Secretary (Principal Accounting Officer)
and Director
/S/ STEPHEN IRWIN
- ----------------------------- Senior Vice President, Secretary and Director
(Stephen Irwin)
<PAGE>
INDEX TO FINANCIAL STATEMENTS
GST Equipment Funding, Inc.
Independent Auditors' Report of KPMG Peat Marwick LLP.....................F-2
Balance Sheet at September 30, 1997.......................................F-3
Statement of Operations for the period from March 5, 1997
(date of inception) to September 30, 1997...............................F-4
Statement of Shareholder's Deficit for the period
from March 5, 1997 (date of inception) to
September 30, 1997......................................................F-5
Statement of Cash Flows for the period from March 5, 1997
(date of inception) to September 30, 1997...............................F-6
Notes to Financial Statements.............................................F-7
F - 1
<PAGE>
GST EQUIPMENT FUNDING, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
GST Equipment Funding, Inc.:
We have audited the accompanying balance sheet of GST Equipment Funding, Inc.
(the Company) as of September 30, 1997, and the related statement of operations,
shareholder's deficit, and cash flows for the period from March 5, 1997 (date of
inception) to September 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GST Equipment Funding, Inc. as
of September 30, 1997, and the results of its operations and cash flows for the
period from March 5, 1997 (date of inception) to September 30, 1997 in
conformity with generally accepted accounting principles.
/s/ KPMG PEAT MARWICK LLP
-------------------------
KPMG PEAT MARWICK LLP
Portland, Oregon
November 26, 1997
F - 2
<PAGE>
GST EQUIPMENT FUNDING, INC.
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
SEPTEMBER 30, 1997
ASSETS
Current assets:
Cash..................................................... $ 1,003
Restricted cash and investments.......................... 48,964
----------
49,967
----------
Restricted investments........................................ 121,711
Notes receivable from parent.................................. 91,274
Interest receivable from parent............................... 3,655
Deferred financing costs, less accumulated
amortization of $364..................................... 9,182
----------
225,822
----------
$ 275,789
==========
LIABILITIES AND SHAREHOLDER'S DEFICIT
Current liabilities:
Accrued interest payable................................. 13,460
Accrued income taxes payable to parent................... 2,680
Other payable to parent.................................. 1,905
----------
18,045
----------
Long-term debt................................................ 265,000
Shareholder's deficit:
Common stock:
Authorized - 1,000 of $.01 par common shares;
issued and outstanding - 100 shares................ -
Additional paid-in capital............................... 1,000
Accumulated deficit...................................... (8,256)
----------
(7,256)
----------
$ 275,789
===========
See accompanying notes to financial statements.
F - 3
<PAGE>
GST EQUIPMENT FUNDING, INC.
STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE PERIOD FROM MARCH 5, 1997
(DATE OF INCEPTION) TO SEPTEMBER 30, 1997
Revenues:
Interest income.............................. $ 8,248
---------
Total revenues.................... 8,248
---------
Operating costs and expenses:
Interest expense............................. 13,824
---------
Loss before income taxes.......... (5,576)
---------
Income taxes...................................... (2,680)
---------
Net loss.......................... $ (8,256)
=========
See accompanying notes to financial statements.
F - 4
<PAGE>
GST EQUIPMENT FUNDING, INC.
STATEMENT OF SHAREHOLDER'S DEFICIT
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
FOR THE PERIOD FROM MARCH 5, 1997
(DATE OF INCEPTION) TO SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
-------------- PAID-IN ACCUMULATED SHAREHOLDER'S
SHARES AMOUNT CAPITAL DEFICIT DEFICIT
------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
Balance, at date of inception...... 100 $ - 1 - 1
Capital investment by parent....... - - 999 - 999
Net loss........................... - - - (8,256) (8,256)
--- ---- ----- ------ -------
Balance, September 30, 1997........ 100 $ - 1,000 (8,256) (7,256)
=== ==== ===== ====== ========
</TABLE>
See accompanying notes to financial statements.
F - 5
<PAGE>
GST EQUIPMENT FUNDING, INC.
STATEMENT OF CASH FLOWS
(IN THOUSANDS)
FOR THE PERIOD FROM MARCH 5, 1997
(DATE OF INCEPTION) TO SEPTEMBER 30, 1997
Operations:
Net loss............................................. $ (8,256)
Items not involving cash:
Amortization of deferred financing costs.......... 364
Changes in non-cash operating working capital:
Interest receivable from parent...................... (3,655)
Accrued interest payable............................. 13,460
Accrued income taxes payable to parent............... 2,680
Other payable to parent.............................. 1,905
----------
Cash provided by operations............... 6,498
----------
Investing:
Change in cash and investments restricted for
fixed asset purchases............................. (76,885)
Notes receivable from parent......................... (91,274)
----------
Cash used in investing activities......... (168,159)
-------
Financing:
Proceeds from issuance of long-term debt............. 265,000
Purchase of investments restricted for interest
payments.......................................... (93,790)
Deferred debt financing costs........................ (9,546)
Proceeds from investment by parent................... 1,000
----------
Cash provided by financing activities..... 162,664
----------
Increase in cash and cash equivalents..... 1,003
Cash and cash equivalents, beginning of period............ -
---------
Cash and cash equivalents, end of period.................. $ 1,003
==========
See accompanying notes to financial statements.
F - 6
<PAGE>
GST EQUIPMENT FUNDING, INC.
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS)
SEPTEMBER 30, 1997
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF THE COMPANY
GST Equipment Funding, Inc. (the Company) was formed on March 5, 1997.
The Company is a wholly-owned subsidiary of GST USA, Inc. (GST USA),
which is a wholly-owned subsidiary of GST Telecommunications, Inc. (GST).
The Company's operations are limited to (i) purchasing equipment, (ii)
selling equipment to parent, (iii) receiving payments under Intercompany
Notes, and (iv) making payments of interest and principal on senior
secured notes.
RESTRICTED CASH AND INVESTMENTS
Pursuant to the terms of the senior secured notes issued on May 13, 1997,
the Company's use of the net proceeds are restricted for the acquisition
of equipment and payment of interest.
INVESTMENTS
The Company classifies its investments, consisting exclusively of U.S.
Treasury securities, as available-for-sale and held-to-maturity.
Held-to-maturity investments, totaling $95,974 and maturing between one
and three years, are restricted for interest payments. Available-for-sale
investments, totaling $74,701 and maturing between one month and two
years, are restricted for equipment purchases. All investments are
reported in the accompanying financial statements at amortized cost.
Amortized cost approximates the market value at September 30, 1997.
DEFERRED FINANCING COSTS
Deferred financing costs consisting of legal, accounting and underwriting
fees related to the May 13, 1997 debt offering have been deferred and are
being amortized to interest expense over the life of the related notes.
(Continued)
F - 7
<PAGE>
GST EQUIPMENT FUNDING, INC.
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS)
INCOME TAXES
The Company accounts for income taxes under the asset and liability
method. Under the asset and liability method, deferred income taxes
reflect the future tax consequences of differences between the tax bases
of assets and liabilities and their financial reporting amounts at each
year-end. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in the tax rates is
recognized in income in the period that includes the enactment date.
Valuation allowances are established when necessary to reduce deferred
tax assets to the amounts expected to be realized.
FINANCIAL INSTRUMENTS
The carrying amounts reported in the balance sheet for cash, short-term
borrowings, accounts payable and accrued liabilities approximate fair
values due to the short maturity of those instruments.
The carrying amount of the Company's long-term debt approximates its fair
value. The fair value of the Company's long-term debt was determined
based on quoted market prices for similar issues or on current rates
available to the Company for debt of the same remaining maturities and
similar terms.
Fair value estimates are made at a specific point in time, based on
relevant market information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and matters
of significant judgment and therefore cannot be determined with
precision. Changes in assumptions could significantly affect the
estimates.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
(Continued)
F - 8
<PAGE>
GST EQUIPMENT FUNDING, INC.
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS)
(2) FINANCING ARRANGEMENTS
LONG-TERM DEBT
The Company's long-term debt consists of the following at September 30,
1997:
Senior secured notes, interest at 13.25%
with semi-annual interest payments due
commencing November 1, 1997,
principal due May 13, 2007........................ $ 265,000
========
ISSUANCE OF SENIOR SECURED NOTES
The Company completed a private placement (the May Offering) under an
indenture (the Indenture) dated May 13, 1997, of $265,000 of senior
secured notes (the Notes). The Notes bear interest at 13.25% payable in
semi-annual installments commencing November 1, 1997. Net proceeds from
the May Offering totaled approximately $255,800, and are to be used to
refinance approximately $41,500 of intercompany indebtedness, and fund
the purchase of equipment and the first six scheduled interest payments
totaling $93,790 on the Notes. Pursuant to the Indenture, all purchased
equipment will be sold to GST USA for use in its telecommunications
operations (see note 3). The Notes are secured by a first priority
security interest in the equipment and the restricted investment
securities held for the payment of interest. The Notes are subject to
certain debt covenants.
The Indenture provides that GST USA will assume and become a direct
obligor on the Notes and GST will guarantee the Notes on May 13, 2000, or
earlier if permitted by the terms of their existing debt. Once assumed
the Notes will be secured senior indebtedness of GST USA. The Note
Guarantee will be senior unsecured indebtedness of GST.
The Notes are redeemable at the option of GST USA, in whole or in part,
at any time, on or after May 1, 2002, initially at 106.625% of their
principal amount, plus accrued and unpaid interest, declining ratably to
100% on or after May 1, 2004. If on May 13, 2000, GST USA is prohibited
from assuming all of the Notes, the Company will redeem the portion of
the Notes that cannot be assumed at 101% of their principal amount plus
accrued interest at the date of redemption.
(Continued)
F - 9
<PAGE>
GST EQUIPMENT FUNDING, INC.
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS)
(3) RELATED PARTY TRANSACTIONS
The Company acts as a purchasing agent for GST USA and sells to GST USA
the equipment it purchases with the proceeds from the May Offering. At
September 30, 1997, the Company's cumulative purchases for GST USA
totaled $91,274, represented by the note receivable from parent. The note
receivable is guaranteed by GST and bears interest at 15.25%, compounded
semiannually on May and November 1, and is payable in full on May 13,
2000.
The payable to parent of $1,905 at September 30, 1997 consists of cash
advances from GST USA for the purchase of equipment and the payment of
expenses related to the May Offering.
(4) INCOME TAXES
Income tax expense for the period from March 5, 1997 (date of inception)
to September 30, 1997, consists of:
CURRENT DEFERRED TOTAL
Federal................. $ 2,680 - 2,680
State................... - - -
-------- --------- ------
$ 2,680 - 2,680
======== ========= =======
The provision for income taxes differs from the "expected" amount
computed by applying the U.S. federal corporate rate as follows:
Computed "expected" income tax benefit................. $(1,896)
Increase resulting from:
Change in valuation allowance...................... 4,576
-------
Actual tax expense..................................... $ 2,680
=======
The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities at September 30, 1997, are derived
primarily from interest expense not currently deductible for tax
purposes. Gross deferred tax assets and liabilities amount to $4,576 and
$-0-, respectively, at September 30, 1997.
(Continued)
F - 10
<PAGE>
GST EQUIPMENT FUNDING, INC.
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS)
The valuation allowance for deferred tax assets as of September 30, 1997,
was $4,576. The net change in the total valuation allowance for the
period from March 5, 1997 (date of inception) ended September 30, 1997,
was an increase of $4,576.
The Company files consolidated income tax returns with its parent
corporation. However, income tax expense is computed as if the Company
filed on a single entity basis. The tax related balance due to the parent
corporation as of September 30, 1997 was $2,680.
F - 11
<PAGE>
EXHIBIT INDEX
EXHIBIT
*3(a) Certificate of Incorporation of GST Funding.
*3(b) By-Laws of GST Funding.
*4(a) Indenture dated as of May 13, 1997, by and among GST Funding, GST, GST
USA and United States Trust Company of New York.
*10(a) Collateral Pledge and Security Agreement dated as of May 13, 1997, by
and among GST Funding, United States Trust Company of New York and the
holders of the Notes as defined therein.
**27 Financial Data Schedule.
- ----------------------
* Incorporated by reference to GST Funding's Registration Statement on
Form S-4 (No. 333-33601).
** Filed herewith.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from GST
Funding's Form 10-K for the year ended September 30, 1997 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,003,435
<SECURITIES> 48,964,477
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 93,348,732
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 275,788,432
<CURRENT-LIABILITIES> 18,044,935
<BONDS> 265,000,000
<COMMON> 1
0
0
<OTHER-SE> (7,256,503)
<TOTAL-LIABILITY-AND-EQUITY> 275,788,432
<SALES> 0
<TOTAL-REVENUES> 8,247,674
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,824,177
<INCOME-PRETAX> (5,576,503)
<INCOME-TAX> 2,680,000
<INCOME-CONTINUING> (8,256,503)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,256,503)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
