FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 18, 1998
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TELEPHONE AND DATA SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-14157 36-2669023
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
30 North LaSalle Street, Chicago, Illinois 60602
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 630-1900
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On December 18, 1998, Telephone and Data Systems, Inc. (the "Company"
or "TDS") announced it is withdrawing its offers to exchange tracking stocks for
the outstanding Common Shares of United States Cellular Corporation and Aerial
Communications, Inc. In addition, the Company announced that it is pursuing a
tax-free spin-off of its 82.3% interest in Aerial Communications, Inc., as well
as other alternatives.
This Current Report on Form 8-K is being filed for the purpose of
filing the news release issued by the Company relating to such announcement as
an exhibit.
Item 7. Financial Statements and Exhibits
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Exhibits
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The exhibits accompanying this report are listed in the accompanying
Exhibit Index.
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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, thereto duly authorized.
Telephone and Data Systems, Inc.
(Registrant)
Date: December 23, 1998
By: /s/ GREGORY J. WILKINSON
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Gregory J. Wilkinson
Vice President and Controller
(principal accounting officer)
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
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99 News Release dated December 18, 1998
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Exhibit 99
Contact: Mark A. Steinkrauss
Vice President - Corporate Relations
(312) 630-1900 email: [email protected]
FOR RELEASE: IMMEDIATE
TDS TO WITHDRAW TRACKING STOCK OFFERS:
WILL PURSUE SPIN-OFF OF AERIAL COMMUNICATIONS
December 18, 1998, Chicago, Illinois - Telephone and Data Systems, Inc. [AMEX:
TDS], a leading provider of telecommunications services, announced today that it
is withdrawing its offers to exchange tracking stocks for the outstanding Common
Shares of United States Cellular Corporation [AMEX:USM] and Aerial
Communications, Inc. [NASDAQ:AERL]. In addition, the Company announced that it
is pursuing a tax-free spin-off of its 82.3% interest in Aerial, as well as
reviewing other alternatives.
LeRoy T. Carlson Jr., President and Chief Executive Officer of TDS said, "As an
independent, publicly held company, Aerial will be positioned to access the
capital markets or seek other means to fund its future growth. TDS can then
focus on its principal strategy of being a world class provider of
telecommunications services to the rural and suburban markets in the U.S. A
spin-off of Aerial would also allow Aerial to align itself with other GSM
(Global System for Mobile Communications) providers in the U.S. or overseas
should it decide to do so."
Mr. Carlson continued, "With TDS refocused on its rural and suburban markets,
its cash flow can be directed to fund the growth opportunities that exist at
U.S. Cellular and TDS Telecommunications Corporation. Depending on the
conditions existing after the spin-off, we may consider stock repurchase
programs as an additional means of building shareholder value."
TDS intends to ask the Internal Revenue Service (IRS) to rule on the tax-free
status of such a spin-off. There are a number of conditions that must be met for
a spin-off to occur, including receipt of a favorable IRS ruling, final approval
by the TDS Board of Directors, certain government and third party approvals and
review by the Securities and Exchange Commission (SEC) of appropriate SEC
filings. Prior to any spin-off, it is expected that Aerial will seek additional
financing so that Aerial would have the appropriate capitalization to operate as
a stand-alone entity. In connection with such financing, it is anticipated that
a substantial amount of Aerial's debt to TDS may be converted into equity. TDS
intends to seek shareholder approval of a proposal to distribute Aerial Series A
Common Shares, on a pro-rata basis, to holders of TDS Series A Common Shares and
Aerial Common Shares, on a pro-rata basis, to holders of TDS Common Shares.
There can be no assurance that a spin-off will be consummated or that other
alternatives will not be pursued.
The tracking stock proposal, which was announced in December 1997 and approved
by shareholders in April 1998, was part of a broad corporate restructuring
designed to unlock for shareholders the value of TDS's three principal business
units. The restructuring would have created three new classes of common stock,
commonly known as "tracking stocks," which were intended to separately reflect
the performance of U. S. Cellular, Aerial, and TDS Telecom, the Company's
cellular, personal communications services (PCS) and landline telephone
businesses, respectively. Mr. Carlson said, "Because of uncertainties in the IPO
market earlier this year, we were unable to complete the offering of shares in
TDS Telecom , which was integral to our tracking stock proposal. In addition,
TDS has been unable to reach mutually
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acceptable agreements with the special committees representing the minority
shareholders of U.S. Cellular and Aerial. In light of these events, we have
decided to withdraw the offers and pursue other means to improve shareholder
value."
Except for the historical and factual information presented, other information
set forth in this news release represents forward-looking statements, including
all statements about the Company's plans, beliefs, estimates and expectations.
These statements are based on current estimates and projections, which involve
certain risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Important factors that
may affect these forward-looking statements include, but are not limited to:
changes in technology that might effect the Company's services; changes in
Delaware law; potential litigation; and changes in market conditions. Investors
are encouraged to consider these and other risks and uncertainties which are
discussed in documents filed by the Company with the Securities and Exchange
Commission.
TDS is a diversified telecommunications corporation founded in 1969. Through its
strategic business units, U. S. Cellular, TDS Telecom and Aerial, TDS operates
primarily in cellular, local telephone and PCS markets around the country. TDS
builds value for its shareholders by providing excellent communications services
in growing, closely-related segments of the telecommunications industry. The
Company currently employs over 10,000 people and serves over 2.7 million
customers in 35 states.
TDS Internet Home Page: http://www.teldta.com
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