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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K/A
Amendment No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 15, 2000
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VOICESTREAM WIRELESS CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Washington 000-25441 91-1956183
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3650 131st Avenue S.E. Bellevue, Washington 98006
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (425) 653-4600
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(Former Name or Former Address, if Changed Since Last Report)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following financial statements required by Item 7 with respect
to VoiceStream Wireless Corporation's acquisition of Aerial
Communications, Inc. through the merger of a subsidiary of
VoiceStream with and into Aerial, are filed as part of this
report:
(a) Financial statements of businesses required.
Page
Consolidated statements of operations .................. 2
Consolidated statements of cash flows .................. 3
Consolidated balance sheets ............................ 4
Notes to Consolidated Financial Statements ............. 5
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AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
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2000 1999
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(Dollars in thousands,
except per share amounts)
<S> <C> <C>
OPERATING REVENUES
Service $ 61,925 $ 44,098
Equipment sales 5,604 6,443
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Total Operating Revenues 67,529 50,541
OPERATING EXPENSES
System operations 22,613 20,353
Marketing and selling 25,305 20,077
Customer service 10,752 9,851
Cost of equipment sold 18,732 12,402
General and administrative 18,026 15,921
Depreciation 24,196 19,882
Amortization of intangibles 1,848 1,889
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Total Operating Expenses 121,472 100,375
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OPERATING (LOSS) (53,943) (49,834)
INVESTMENT AND OTHER INCOME
Minority share of loss (income) 11,655 (8,043)
Other income (expense), net 3,901 (636)
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Total Investment and Other Income 15,556 (8,679)
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(LOSS) BEFORE INTEREST AND INCOME TAXES (38,387) (58,513)
INTEREST EXPENSE
Interest expense-affiliate 4,122 17,036
Interest expense-other 6,330 5,008
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Total Interest Expense 10,452 22,044
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(LOSS) BEFORE INCOME TAXES (48,839) (80,557)
Income tax expense (benefit) 606 (113,934)
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NET (LOSS) INCOME $ (49,445) $ 33,377
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WEIGHTED AVERAGE COMMON AND
SERIES A COMMON SHARES (000s) 95,504 71,804
(LOSS) INCOME PER COMMON AND SERIES
A COMMON SHARE (Basic and Diluted) $ (0.52) $ 0.46
========= =========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
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AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months ended
March 31,
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2000 1999
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(Dollars in Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) Income $ (49,445) $ 33,377
Add (Deduct) adjustments to reconcile net (loss) income
to net cash (used) provided by operating activities
Depreciation and amortization 26,044 21,771
Noncash interest expense 4,826 4,440
Change in deferred taxes 606 566
Equity (income) loss on investments (99) 100
Minority share of operating (loss) income (11,655) 8,043
Loss on sale of property and equipment 298 6
Change in accounts receivable-customer (1,505) (1,494)
Change in inventory (1,462) (1,530)
Change in accounts payable-affiliates 2,999 43
Change in accounts payable-trade (2,355) (16,227)
Change in accrued interest-affiliate 3,149 2,067
Change in other assets and liabilities (4,719) 1,557
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(33,318) 52,719
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CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under the Revolving Credit Agreement-TDS 52,000 66,853
Repayments of borrowings under the Revolving Credit Agreement-TDS -- (114,500)
Issuance of common stock (4,445) 739
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47,555 (46,908)
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CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (9,773) (5,253)
Change in temporary cash and other investments (3,355) (671)
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(13,128) (5,924)
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NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 1,109 (113)
CASH AND CASH EQUIVALENTS-
Beginning of period 19,887 4,943
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End of period $ 20,996 $ 4,830
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</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
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AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
March 31, December 31,
2000 1999
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ASSETS (Dollars in Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 20,996 $ 19,887
Accounts receivable
Customer, less allowance of $5,497 and $3,767, respectively 30,047 28,542
Roaming 4,070 3,079
Other 3,133 1,951
Inventory 9,798 8,336
Prepaid rent 3,834 3,920
Other 2,111 1,347
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73,989 67,062
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PROPERTY and EQUIPMENT
In service and under construction 841,193 816,757
Less accumulated depreciation (220,961) (196,844)
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620,232 619,913
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INVESTMENTS
Investment in PCS licenses-net of accumulated
amortization of $21,446 and $19,597, respectively 280,086 281,934
Other 6,717 3,263
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286,803 285,197
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DEFERRED COSTS 197 204
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TOTAL ASSETS $ 981,221 $ 972,376
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
Affiliates $ 2,999 $ --
Trade 31,518 35,230
Current portion of long-term debt 121,273 103,765
Accrued interest-affiliate 3,302 153
Accrued compensation 6,552 9,732
Accrued taxes 7,325 7,419
Other 4,971 4,675
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177,940 160,974
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REVOLVING CREDIT AGREEMENT-TDS 89,786 37,786
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LONG-TERM DEBT 255,664 250,846
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DEFERRED TAX LIABILITY-NET 18,378 17,772
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MINORITY INTEREST 82,709 94,364
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COMMON SHAREHOLDERS' EQUITY
Common Shares, par value $1.00 per share 42,967 42,289
Series A Common Shares, par value $1.00 per share 52,924 52,924
Additional paid-in capital 1,110,469 1,115,592
Retained deficit (849,616) (800,171)
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356,744 410,634
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 981,221 $ 972,376
=========== ===========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
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AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein have been prepared by
Aerial Communications, Inc. ("Aerial" or the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is suggested
that these consolidated financial statements be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K and in the VoiceStream Wireless
Corporation ("VoiceStream") Form 8-K filed on March 22, 2000.
The accompanying unaudited consolidated financial statements contain all
adjustments (consisting of only normal recurring items) necessary to present
fairly the financial position as of March 31, 2000, and December 31, 1999,
the results of operations for the three months ended March 31, 2000 and 1999,
and the cash flows for the three months ended March 31, 2000 and 1999.
Certain amounts reported in prior periods have been reclassified to conform
to the current period presentation.
2. VoiceStream Merger. On May 4, 2000, VoiceStream and Aerial merged their two
companies. Pursuant to the Agreement and Plan of Reorganization which was
approved by VoiceStream's and Aerial's Boards of Directors on September 17,
1999, VoiceStream exchanged 0.455 shares of VoiceStream common stock for each
of the Company's Common and Series A Common Shares.
3. Minority Interest. On September 8, 1998, pursuant to the terms of a Purchase
Agreement (the "Purchase Agreement") between Telephone and Data Systems, Inc.
("TDS"), the Company, Aerial Operating Company, Inc. ("AOC") and Sonera
Corporation, a company organized under the laws of Finland and formerly known
as Sonera Ltd. ("Sonera"), Sonera purchased approximately 2.4 million shares
of common stock of AOC representing a 19.4% equity interest in AOC for an
aggregate purchase price of $200 million.
On September 17, 1999, TDS, Aerial, AOC, VoiceStream and Sonera entered into
a Settlement and Release providing for the Sonera-Aerial Investment. In
accordance with the Sonera-Aerial Investment, on November 1, 1999, Sonera
invested an aggregate of $230 million in Aerial and AOC at an equivalent
purchase price of $22.00 per share of Aerial common stock. Aerial issued 3.4
million Aerial Common Shares to Sonera in consideration for $75 million and
AOC issued 1.0 million shares of AOC common stock to Sonera in consideration
for $155 million. Additionally, Sonera surrendered 317,108 shares of AOC
stock on November 1, 1999.
On May 4, 2000, Sonera, pursuant to the Sonera-Aerial Investment, surrendered
an additional 317,108 shares of AOC stock. Immediately prior to the merger
becoming effective, Sonera converted (at a conversion ratio of 6.72919) its
2.8 million shares of AOC common stock into 19.0 million Common Shares of
Aerial Communications, Inc. Sonera then exchanged its 22.4 million Aerial
Common Shares into VoiceStream Common Shares at an exchange ratio of 0.455
shares of VoiceStream for each Aerial Common Share.
Minority share of loss of $11.7 million represents Sonera's share of AOC's
consolidated net loss for the first quarter of 2000.
4. Revolving Credit Agreement. Under the TDS Revolving Credit Agreement, as
amended, AOC may borrow up to a maximum amount (the "Maximum Amount"), less
the amount of certain financing obtained by AOC or Aerial, including the
amount of any borrowings under the Nokia 1998 Credit Agreement. In March
2000, the TDS and Aerial Boards of Directors approved an amendment to the
Revolving Credit Agreement which changed the maturity date from April 2,
2000, to May 4, 2000, the date of the merger close with VoiceStream.
As of March 31, 2000, the Maximum Amount available under the TDS Revolving
Credit Agreement was $355 million and the amount available for borrowing by
AOC was approximately $143.9 million. The interest rate under the Revolving
Credit Agreement is equal to the prime rate plus 2.35%. Interest on the
balance due under the Revolving Credit Agreement is payable quarterly and no
principal is payable until maturity.
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5. Net (Loss) per Common and Series A Common Share for the three months ended
March 31, 2000 and 1999, was computed based on the weighted average number of
Common and Series A Common Shares outstanding during the period.
6. Supplemental Cash Flow Information. In 2000, additions to property and
equipment of $17.5 million were financed through an increase in long-term
debt.
During the three months ended March 31, 2000, the Company incurred interest
charges totaling $10.5 million. The interest charges were comprised of $2.6
million related to the Revolving Credit Agreement with Telephone and Data
Systems, Inc. ("TDS"), $1.6 million for TDS guarantee fees on the Series A
and Series B Zero Coupon Notes and obligations under the 1998 Credit
Agreement with Nokia Networks Inc. ("Nokia", formerly known as Nokia
Telecommunications Inc.) $1.5 million paid to Nokia for interest charges
relating to the 1998 Credit Agreement and $4.8 million in accreted interest
on the Series A and Series B Zero Coupon Notes. All interest charges incurred
were expensed in 2000.
During the three months ended March 31, 1999, the Company incurred interest
charges totaling $22.0 million. The interest charges were comprised of $15.1
million related to the Revolving Credit Agreement with Telephone and Data
Systems, Inc. ("TDS"), $2.0 million for TDS guarantee fees on the Series A
and Series B Zero Coupon Notes and obligations under the Nokia 1998 Credit
Agreement, $0.5 million paid to Nokia for interest charges relating to the
1998 Credit Agreement and $4.4 million in accreted interest on the Series A
and Series B Zero Coupon Notes. All interest charges incurred were expensed
in 1999.
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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 hereunto duly authorized.
VOICESTREAM WIRELESS CORPORATION
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(Registrant)
Date May 15, 2000 By /S/ Alan R. Bender
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(Signature)
Alan R. Bender, Executive Vice President
