<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Quarterly Period Ended September 30, 1999
or
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 333-49871
Transtel Pass Through Trust
(Exact name of Registrant as specified in its charter)
Delaware 52-6875613
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
(Address of principal executive office) (Zip Code)
(302) 651-10000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report date)
Indicate by check mark whether the registrant (1) has filed all reports 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
---- ----
The Index of Exhibits appears on page I-1.
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<PAGE>
TRANSTEL PASS THROUGH TRUST
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements (Unaudited): <C>
Statements of Assets and Undivided Interests as of December 31, 1998
and September 30, 1999...................................................................3
Statements of Distributable Income and Changes in Undivided Interests
for the three and nine months ended September 30, 1998 and September
30, 1999.................................................................................4
Statements of Cash Flow for the nine months ended September 30, 1998
and September 30, 1999...................................................................5
Notes to Financial Statements............................................................6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations............................................................................8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................................................9
Item 2. Changes in Securities and Use of Proceeds................................................9
Item 3. Defaults Upon Senior Securities..........................................................9
Item 4. Submission of Matters to a Vote of Security Holders......................................9
Item 5. Other Information........................................................................9
Item 6. Exhibits and Reports on Form 8-K.........................................................9
Signatures ........................................................................................10
Exhibit Index........................................................................................I-1
</TABLE>
2
<PAGE>
Item 1.
TRANSTEL PASS THROUGH TRUST
STATEMENTS OF ASSETS AND UNDIVIDED INTERESTS
(Thousands of Dollars)
<TABLE>
<CAPTION>
December 31, 1998 September 30, 1999
----------------- ------------------
ASSETS
<S> <C> <C>
Receivable - Senior Notes due 2007
from Transtel S.A..................................... $ 150,000 $ 150,000
Accrued interest income................................. 3,658 8,231
---------- ----------
Total assets............................................ $ 153,658 $ 158,231
========= =========
UNDIVIDED INTERESTS OF CERTIFICATEHOLDERS............... $ 153,658 $ 158,231
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
TRANSTEL PASS THROUGH TRUST
STATEMENTS OF DISTRIBUTABLE INCOME AND
CHANGES IN UNDIVIDED INTERESTS
(Thousands of Dollars)
<TABLE>
<CAPTION>
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
--------------------------- --------------------------
1998 1999 1998 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Distributable income - interest income ....... $ 4,954 $ 4,731 $ 14,431 $ 15,177
Undivided interests of Certificateholders:
Beginning of period ........................ 153,200 153,500 153,281 153,658
Income distributed to Certificateholders.. - - (9,558) (10,604)
-------- -------- -------- --------
End of period................................. $158,154 $158,231 $158,154 $158,231
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
TRANSTEL PASS THROUGH TRUST
STATEMENTS OF CASH FLOW
(Thousands of Dollars)
<TABLE>
<CAPTION>
For the Nine
Months Ended
September 30,
---------------------------------------
1998 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Distributable income........................................ $ 14,431 $ 15,177
Adjustments to reconcile distributable income
to net cash provided by operations:
Accrued interest income................................ (4,973) (4,573)
---------- ----------
Net cash provided by financing activities................. 9,558 10,604
---------- ----------
Cash flows from operating activities:
Income distributed to Certificateholders............... (9,558) (10,604)
---------- ----------
$ (9,558) $ (10,604)
---------- ----------
Cash flows used by investing activities:
Net change in cash..................................... - -
Cash at beginning of period............................ - -
Cash at end of period.................................. $ - $ -
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
TRANSTEL PASS THROUGH TRUST
NOTES TO FINANCIAL STATEMENTS
Note 1 - Nature of Operations
Transtel Pass Through Trust (the "Trust") is a statutory business trust,
created under Delaware law pursuant to a trust agreement and the filing of a
certificate of trust with the Delaware Secretary of State on October 20, 1997.
The Trust is governed by the Amended and Restated Pass Through Trust Agreement,
dated October 28, 1997, among Transtel, S.A., Wilmington Trust Company, as pass
through trustee, and the holders of the certificates (the "Certificateholders"),
as amended by First Amendment to Amended and Restated Pass Through Trust
Agreement, dated November 24, 1998. The Trust exists for the exclusive purposes
of (i) issuing and selling the certificates, (ii) using the proceeds from the
sale of the certificates to acquire the Senior Notes, and (iii) engaging in only
those other activities necessary or incidental thereto. Accordingly, the Senior
Notes and related accrued interest will be the sole assets of the Trust and
payments received in respect of the Senior Notes will be the sole source of
revenue of the Trust.
On October 28, 1997, the Trust sold $150 million of certificates
representing pro rata interests in the assets of the Trust (the "Certificates").
Concurrently, the Trust used the proceeds of the sale to purchase $150 million
of 12 1/2% Senior Notes due 2007 (the "Senior Notes") issued by Transtel S.A.
Note 2 - Significant Accounting Policies
Basis of presentation
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These estimates and assumptions affect the reported amount of
distributable income, assets and liabilities and disclosure of contingencies.
Actual results could differ from these estimates.
The Trust maintains its books and records on a cash basis. The
accompanying financial statements contain adjustments, not recorded in the
Trust's accounting records, to reflect the accrual method of accounting. The
accompanying statements of assets and undivided interests and the statements of
distributable income and changes in undivided interests and of cash flow are
unaudited. In the opinion of management, these statements have been prepared on
the same basis as the audited annual financial statements and include all
adjustments, consisting of only normal recurring adjustments, necessary for the
fair presentation of the results for the interim periods.
Interest income
Interest income is recorded on the accrual method using the contractual
rate of interest on the Senior Notes, including additional interest when
applicable.
Administrative expenses
Administrative expenses of the Trust are paid by the Company and are not
recorded in the financial statements of the Trust.
Note 3 - 12 1/2% Senior Notes due 2007
The Senior Notes bear interest at a rate of 12 1/2% per annum payable
semiannually in cash on May 1 and November 1 of each year commencing May 1,
1998. Interest distributions received on each May 1 and November 1 will be paid
to the persons who are the registered Certificateholders on the April 15 and
October 15, as the case may be, immediately preceding such interest payment
date. Certain additional interest clauses may increase the interest rate by a
maximum of 2% for certain periods of time. The interest rates in effect at
September 30, 1998 and September 30, 1999 were 13 1/2% and 12 1/2%,
respectively. Each Certificateholder will be entitled to receive a pro rata
share of any payments received by, or on behalf of, the pass through trustee or
on behalf of the Trust in respect of the Senior Notes.
6
<PAGE>
The Senior Notes are redeemable, in whole or in part, at the option of
Transtel S.A., on or after November 1, 2002, at the following redemption prices
plus accrued and unpaid interest to the date of redemption:
12-month period Redemption
commencing November 1 Price
--------------------- --------
2002.......................... 106.250%
2003.......................... 104.688
2004.......................... 103.125
2005.......................... 101.565
2006 and thereafter........... 100.000
In addition, in the event of the sale by Transtel S.A. of at least $25
million of its capital stock in one or more public equity offerings or to one or
more strategic equity investors, as defined, on or prior to November 1, 2000,
Transtel S.A. may, at its option, use the net cash proceeds of such sale or
sales to redeem up to 35% of the Senior Notes at a redemption price of 112 1/2%
of the principal amount thereof plus accrued and unpaid interest to the date of
redemption. Upon a change of control, Transtel S.A. will be required to make an
offer to repurchase the Senior Notes at a price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, to the date of repurchase.
Note 4 - Federal Income Tax
The Trust is classified as a grantor trust for federal income tax
purposes, and therefore is not taxable. Each Certificateholder will be treated
as the owner of a pro rata undivided interest in each of the assets in the
Trust.
7
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the financial condition and results of
operations of Transtel Pass Through Trust (the "Trust") as of September 30, 1998
and September 30, 1999. The discussion should be read in conjunction with the
Interim Financial Statements of the Trust and the notes included. The following
discussion gives all amounts in thousands of U.S. Dollars.
General
The Trust is a statutory business trust, created under Delaware law
pursuant to a trust agreement and the filing of a certificate of trust with the
Delaware Secretary of State on October 20, 1997. The Trust, a special purpose
business trust, issued $150 million aggregate principal amount of 12 1/2% Pass
Through Trust Certificates due 2007 (the "Certificates"). Each Certificate
represents a pro rata interest in all of the assets of the Trust, including the
12 1/2% Senior Notes due 2007 (the "Senior Notes") issued by Transtel S.A., a
Colombian corporation, and all payments of principal, interest, redemption
premium, if any, and additional amounts, if any, made in respect of the Senior
Notes. The Senior Notes were issued under an indenture dated October 28, 1997
between Transtel S.A. and HSBC Bank USA (formerly know as Marine Midland Bank),
as indenture trustee, as amended by First Amendment and Waiver to Indenture,
dated as of July 13, 1998.
The Trust is governed by the Amended and Restated Pass Through Trust
Agreement, dated October 28, 1997, among the Trust, Wilmington Trust Company, as
pass through trustee, including any successor pass through trustee and the
holders of the Certificates (the "Certificateholders"), as amended by First
Amendment to Amended and Restated Pass Through Trust Agreement, dated November
24, 1998. HSBC Bank USA is the paying agent and certificate registrar. The Trust
exists for the exclusive purposes of (i) issuing and selling the Certificates,
(ii) using the proceeds from the sale of the Certificates to acquire the Senior
Notes and (iii) engaging in only those other activities necessary or incidental
thereto such as registering the transfer of the Certificates, soliciting
directions from the Certificateholders and taking such actions as the
Certificateholders owning a majority of the principal amount of the Certificates
direct. The Senior Notes and related accrued interest are the sole assets of the
Trust, and payments received in respect of the Senior Notes are the sole source
of revenue of the Trust.
Nine months ended September 30, 1998 and September 30, 1999
As of September 30, 1999 the assets of the Trust consist of $150,000,000
aggregate principal amount of Senior Notes and $8,231,000 related interest
accrued since May 1, 1999 related to the Senior Notes. Distributable income in
all periods consists solely of interest earned on the Senior Notes. Although the
stated interest rate on the Senior Notes is 12 1/2%, additional interest, up to
a total of 14 1/2%, was due until Transtel S.A. completed a registered exchange
offer relating to the Senior Notes. The interest rates in effect at September
30, 1998 and 1999 were 14% and 12 1/2%, respectively. Transtel S.A.'s exchange
offer was completed on July 8, 1999 and the interest rate on the Senior Notes
reverted to 12 1/2% on that date.
All payments to the Certificateholders are dependent upon the payments of
Transtel S.A. on the Senior Notes. For information with respect to Transtel
S.A., its business and financial results, see the publicly available reports
filed by Transtel S.A. with the Securities and Exchange Commission.
8
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
The Trust is currently not party to any material legal
proceedings.
Item 2. Changes in Securities and Use of Proceeds
Not applicable.
Item 3. Defaults upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a.) Exhibits.
The following Exhibits are filed or incorporated by reference
herewith:
Exhibit 4.1 Indenture, dated as of October 28, 1997, between Transtel
S.A. and HSBC Bank USA (formerly known as Marine Midland
Bank), as Indenture Trustee, as amended by First
Amendment and Waiver to Indenture, dated as of July 13,
1998 (incorporated by reference to Exhibit 4.1 of
Transtel S.A. and the Trust's Form F-4 registration
statement, as amended by Post-effective Amendment No. 1
to F-4 filed on June 24, 1999).
Exhibit 10.1 Trust Agreement of Transtel Pass Through Trust dated as
of October 28, 1997, among the Trust, Transtel S.A., as
depositor, and Wilmington Trust Company (incorporated by
reference to Exhibit 4.4 of Transtel S.A. and the Trust's
Form F-4 registration statement, as amended by Post-
effective Amendment No. 1 to F-4 filed on June 24, 1999).
Exhibit 10.2 Amended and Restated Pass Through Trust Agreement, dated
as of October 28, 1997, among the Trust, Transtel S.A.,
as depositor, Wilmington Trust Company, as pass through
trustee, and HSBC Bank USA (formerly known as Marine
Midland Bank), as registrar and paying agent, as amended
by First Amendment to Amended and Restated Pass Through
Trust Agreement, dated November 24, 1998 (incorporated by
reference to Exhibit 4.5 of Transtel S.A. and the Trust's
Form F-4 registration statement, as amended by Post-
effective Amendment No. 1 to F-4 filed on June 24, 1999).
Exhibit 27.1 Financial Data Schedule, which is submitted
electronically to the Securities and Exchange Commission
for information only.
(b.) Reports on Form 8-K.
None.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereto duly authorized.
TRANSTEL PASS THROUGH TRUST,
as Registrant
By: Wilmington Trust Company,
not in its individual capacity but solely
as Pass Through Trustee
Date: March 29, 2000 By: /s/ Anita E. Dallago
----------------------------------------------
Name: Anita E. Dallago
Title: Administrative Account Manager
10
<PAGE>
EXHIBIT INDEX
The following Exhibits are filed or incorporated by reference
herewith:
Exhibit 4.1 Indenture, dated as of October 28, 1997, between Transtel S.A. and
HSBC Bank USA (formerly known as Marine Midland Bank), as
Indenture Trustee, as amended by First Amendment and Waiver to
Indenture, dated as of July 13, 1998 (incorporated by reference to
Exhibit 4.1 of Transtel S.A. and the Trust's Form F-4 registration
statement, as amended by Post-effective Amendment No. 1 to F-4
filed on June 24, 1999).
Exhibit 10.1 Trust Agreement of Transtel Pass Through Trust dated as of October
28, 1997, among the Trust, Transtel S.A., as depositor, and
Wilmington Trust Company (incorporated by reference to Exhibit 4.4
of Transtel S.A. and the Trust's Form F-4 registration statement,
as amended by Post-effective Amendment No. 1 to F-4 filed on June
24, 1999).
Exhibit 10.2 Amended and Restated Pass Through Trust Agreement, dated as of
October 28, 1997, among the Trust, Transtel S.A., as depositor,
Wilmington Trust Company, as pass through trustee, and HSBC Bank
USA (formerly known as Marine Midland Bank), as registrar and
paying agent, as amended by First Amendment to Amended and
Restated Pass Through Trust Agreement, dated November 24, 1998
(incorporated by reference to Exhibit 4.5 of Transtel S.A. and the
Trust's Form F-4 registration statement, as amended by Post-
effective Amendment No. 1 to F-4 filed on June 24, 1999).
Exhibit 27.1 Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only.
I-1
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998 DEC-31-1999 DEC-31-1998
<PERIOD-START> JUL-01-1999 JUL-01-1998 JAN-01-1999 JAN-01-1998
<PERIOD-END> SEP-30-1999 SEP-30-1998 SEP-30-1999 SEP-30-1998
<CASH> 0 0 0 0
<SECURITIES> 0 0 0 0
<RECEIVABLES> 158,231 158,154 158,231 158,154
<ALLOWANCES> 0 0 0 0
<INVENTORY> 0 0 0 0
<CURRENT-ASSETS> 158,231 158,154 158,231 158,154
<PP&E> 0 0 0 0
<DEPRECIATION> 0 0 0 0
<TOTAL-ASSETS> 158,231 158,154 158,231 158,154
<CURRENT-LIABILITIES> 8,231 8,154 8,231 8,154
<BONDS> 150,000 150,000 150,000 150,000
0 0 0 0
0 0 0 0
<COMMON> 0 0 0 0
<OTHER-SE> 0 0 0 0
<TOTAL-LIABILITY-AND-EQUITY> 158,231 158,154 158,231 158,154
<SALES> 0 0 0 0
<TOTAL-REVENUES> 0 0 0 0
<CGS> 0 0 0 0
<TOTAL-COSTS> 0 0 0 0
<OTHER-EXPENSES> 0 0 0 0
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 0 0 0 0
<INCOME-PRETAX> 0 0 0 0
<INCOME-TAX> 0 0 0 0
<INCOME-CONTINUING> 0 0 0 0
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 0 0 0 0
<EPS-BASIC> 0 0 0 0
<EPS-DILUTED> 0 0 0 0
</TABLE>
