<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE SECURITIES ACT OF 1934
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1999
OR
[ ] 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: 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 Identification
incorporation or organization) No.)
c/o Wilmington Trust
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
(Address of principal executive office)
(302) 651-1000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: Not applicable.
Securities registered pursuant to section 12(g) of the Act: Not applicable.
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 [_]
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 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]
The aggregate market value of the voting and non-voting common equity stock held
by non-affiliates of the Registrant: Not applicable.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [_] No [_]. Not applicable
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of December 31, 1999: Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE
Not applicable.
<PAGE>
TRANSTEL PASS THROUGH TRUST
INDEX
PART I
<TABLE>
<S> <C>
Item 1. Business................................................................................... 1
Item 2. Properties................................................................................. 1
Item 3. Legal Proceedings.......................................................................... 1
Item 4. Submission of Matters to a Vote of Security Holders........................................ 1
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters................. 2
Item 6. Selected Financial Data................................................................... 2
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations..... 2
Item 7A. Quantitative and Qualitative Disclosures About Market Risk................................ 4
Item 8. Financial Statements and Supplementary Data............................................... 4
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure...... 11
PART III
Item 10. Directors and Executive Officers of the Registrant........................................ 12
Item 11. Executive Compensation.................................................................... 12
Item 12. Security Ownership of Certain Beneficial Owners and Management............................ 12
Item 13. Certain Relationships and Related Transactions............................................ 12
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.......................... 13
</TABLE>
Signatures
<PAGE>
PART I
This Annual Report on Form 10-K (the "Form 10-K") is filed with respect
to the trust entitled Transtel Pass Through Trust (the "Trust").
Item 1. Business
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., a Colombian corporation ("Transtel"), as depositor, Wilmington
Trust Company, as pass through trustee, including any successor pass through
trustee (the "Pass Through Trustee"), HSBC Bank USA (formerly known as Marine
Midland Bank), as registrar and paying agent, 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 Agreement").
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 from the sale of the Certificates to
purchase $150 million of 12 1/2% Senior Notes due 2007 issued by Transtel (the
"Senior Notes"). Pursuant to the Certificate Guarantee, dated as of October 28,
1997, Transtel fully, irrevocably and unconditionally guaranteed all of the
Trust's obligations under the Certificates.
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, (iii) registering the exchange certificates under the
Securities Act of 1933, as amended (the "Securities Act") which are identical to
the Certificates except that they are registered under the Securities Act (the
"Exchange Certificates"), (iv) exchanging the Certificates for the Exchange
Certificates (the "Exchange Offer"), and (v) 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. All action by the Trust is conducted by the Pass
Through Trustee. 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.
On July 8, 1999, the Trust completed the Exchange Offer by issuing the
Exchange Certificates in exchange for the Certificates. Pursuant to the Exchange
Certificate Guarantee, dated as of July 8, 1999, Transtel fully, irrevocably and
unconditionally guaranteed all of the Trust's obligations under the Exchange
Certificates.
Item 2. Properties
Not applicable.
Item 3. Legal Proceedings
There are no material pending legal proceedings relating to the Trust
to which the Trust, the Pass Through Trustee or Transtel are a party.
Item 4. Submission of Matters to a Vote of Security Holders
No matters have been submitted to a vote of the Certificateholders.
1
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PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
Not applicable.
Item 6. Selected Financial Data
The following selected financial data has been derived from the audited
financial statements for the Trust as of and for the period October 27, 1997
through December 31, 1997 and as of and for the years ended December 31, 1998
and December 31, 1999, included elsewhere in this 10-K. This information should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Trust's Financial Statements and
Notes thereto included elsewhere in this Form 10-K.
<TABLE>
<CAPTION>
For the Period
October 20,
1997
(Inception)
Through
December 31, As of and for the year ended
1997 December 31,
-------------------------------------------------
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
(Thousands of Dollars)
Statement of Distributable Income:
Distributable income--interest income.......................... $ 3,281 $ 19,781 $ 20,005
Statement of Assets and Undivided Interests:
Total assets................................................... $ 153,281 $ 153,658 $ 153,125
Undivided interest of Certificateholders....................... $ 153,281 $ 153,658 $ 153,125
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion of the financial condition and results of
operations of the Trust should be read in conjunction with the Consolidated
Financial Statements and Notes thereto included elsewhere in this Form 10-K.
Overview
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., a Colombian corporation ("Transtel"), as depositor, Wilmington
Trust Company, as pass through trustee, including any successor pass through
trustee (the "Pass Through Trustee"), HSBC Bank USA (formerly known as Marine
Midland Bank), as registrar and paying agent, 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 Agreement").
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 from the sale of the Certificates to
purchase $150 million of 12 1/2% Senior Notes due 2007 issued by Transtel (the
"Senior Notes"). Pursuant to the Certificate Guarantee, dated as of October 28,
1997, Transtel fully, irrevocably and unconditionally guaranteed all of the
Trust's obligations under the Certificates.
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, (iii) registering the exchange certificates under the
Securities Act of 1933, as amended (the "Securities Act") which are identical to
the
2
<PAGE>
Certificates except that they are registered under the Securities Act (the
"Exchange Certificates"), (iv) exchanging the Certificates for the Exchange
Certificates (the "Exchange Offer"), and (v) 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. All action by the Trust is conducted by the Pass
Through Trustee. 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.
On July 8, 1999, the Trust completed the Exchange Offer by issuing the
Exchange Certificates in exchange for the Certificates. Pursuant to the Exchange
Certificate Guarantee, dated as of July 8, 1999, Transtel fully, irrevocably and
unconditionally guaranteed all of the Trust's obligations under the Exchange
Certificates.
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. Each Certificateholder will be entitled to receive a pro rata share of any
payments received by, or on behalf of, the Pass Through Trustee on behalf of the
Trust in respect of the Senior Notes. 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 December 31, 1997, December 31, 1998 and December
31, 1999 were 12 1/2%, 13 1/2% and 12 1/2%, respectively. The maximum additional
interest rate is 2%. The additional interest increased to such maximum on
February 21, 1999, and thus the interest rate became 14 1/2% on that date. On
July 8, 1999, Transtel and the Trust completed their Exchange Offer and the
interest rate decreased to 12 1/2% on that date. Each Certificateholder will be
entitled to receive a pro rata share of any payments received by, or on behalf
of, the trustee or on behalf of the Trust in respect of the Senior Notes. The
following table sets forth the interest rates in effect for the Senior Notes,
and thus the Certificates, for the periods specified below:
<TABLE>
<CAPTION>
Period Interest Rate
------ -------------
<S> <C>
October 28, 1997 - March 27, 1998 ....................... 12 1/2%
March 28, 1998 - April 10, 1998 ......................... 13%
April 11, 1998 - May 26, 1998 ........................... 12 1/2%
May 27, 1998 - August 24, 1998 .......................... 13%
August 25, 1998 - November 22, 1998 ..................... 13 1/2%
November 23, 1998 - February 20, 1999 ................... 14%
February 21, 1999 - July 7, 1999 ........................ 14 1/2%
July 8, 1999 - December 31, 1999 ........................ 12 1/2%
</TABLE>
The distributable income earned for the period October 20, 1997 through
December 31, 1997 is interest accrued at 12 1/2% on the $150 million Senior
Notes receivable for that period. The distributable income for the year ended
December 31, 1998 and December 31, 1999 is interest earned at 12 1/2% to 13 1/2%
and interest earned at 12 1/2% to 14 1/2%, respectively, during such period on
the Senior Notes. Transtel made the required cash payments to the Trust for
interest of approximately $9.6 million, $9.8 million, $10.6 million and $9.9
million on May 1, 1998, November 1, 1998, May 1, 1999 and November 1, 1999,
respectively, and the Trust made the same payments to the Certificateholders on
those dates.
All payments to the Certificateholders are dependent upon payments of
Transtel on the Senior Notes.
Years ended December 31, 1997, December 31, 1998 and December 31, 1999
As of December 31, 1999 the assets of the Trust consisted of
$150,000,000 aggregate principal amount of Senior Notes and $3,125,000 related
interest accrued since November 1, 1999 related to the Senior
3
<PAGE>
Notes. As of December 31, 1998 the assets of the Trust consisted of $150,000,000
aggregate principal amount of Senior Notes and $3,658,000 related interest
accrued since November 1, 1998 related to the Senior Notes. As of December 31,
1997 the assets of the Trust consisted of $150,000,000 aggregate principal
amount of Senior Notes and $3,281,000 related interest accrued since November 1,
1997 related to the Senior Notes. Distributable income in all periods consist
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 completed a registered exchange offer relating to the
Senior Notes. The interest rates in effect at December 31, 1997, 1998 and 1999
were 12 1/2%, 14 1/2% and 12 1/2%, respectively. Transtel'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.
Transtel paid the interest payments on the Senior Notes through
November 1, 1999 out of an escrow account which was funded with approximately
$35.3 million of the net proceeds realized from the sale of the Senior Notes and
which was created to fund the first four interest payments. All interest
payments on the Senior Notes to be made by Transtel after November 1, 1999 will
not be made from the escrow account. All payments to the Certificateholders are
dependent upon the payments of Transtel on the Senior Notes. For information
with respect to Transtel, its business and financial results, see the publicly
available reports filed by Transtel with the Securities and Exchange Commission.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 8. Financial Statements and Supplementary Data
<TABLE>
<CAPTION>
Financial Statements Page
<S> <C>
Independent Auditors' Report............................................................... 5
Statements of Assets and Undivided Interests............................................... 6
Statements of Distributable Income and Changes in Undivided Interests...................... 7
Statements of Cash Flow.................................................................... 8
Notes to Financial Statements.............................................................. 9
</TABLE>
4
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders of
TRANSTEL PASS TROUGH TRUST
Wilmington, Delaware
We have audited the accompanying statements of assets and undivided interests of
Transtel Pass Trough Trust as of December 31, 1999, 1998 and 1997, and the
related statements of distributable income and changes in undivided interests,
and cash flows for the period from October 20, 1997 (inception) through December
31, 1997 and for the years ended December 31, 1999 and 1998. 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 audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. 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 audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1999, 1998
and 1997, and the results of its distributable income and changes in undivided
interests and its cash flows for the period from October 20, 1997 (inception)
through December 31, 1997 and for the years ended December 31, 1999 and 1998, in
conformity with generally accepted accounting principles in the United States of
America.
/s/ DELOITTE & TOUCHE
DELOITTE & TOUCHE
Cali, Colombia
March 31, 2000
5
<PAGE>
TRANSTEL PASS THROUGH TRUST
STATEMENTS OF ASSETS AND UNDIVIDED INTERESTS
(Thousands of Dollars)
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
ASSETS
Receivables - Senior Notes due 2007
$ 150,000 $ 150,000 $ 150,000
from Transtel S.A..................................
Accrued interest income.................................. 3,281 3,658 3,125
-------------- -------------- --------------
Total assets............................................. $ 153,281 $ 153,658 $ 153,125
============== ============== ==============
UNDIVIDED INTERESTS OF CERTIFICATEHOLDERS................ $ 153,281 $ 153,658 $ 153,125
============== ============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
TRANSTEL PASS THROUGH TRUST
STATEMENTS OF DISTRIBUTABLE INCOME AND
CHANGES IN UNDIVIDED INTERESTS
(Thousands of Dollars)
<TABLE>
<CAPTION>
For the Period
October 20, 1997
(Inception) Through For the Year Ended
December 31, 1997 December 31,
------------------ -------------------------------
1998 1999
---- ----
<S> <C> <C> <C>
Distributable income - interest income ....................... $ 3,281 $ 19,781 $ 20,005
Undivided interests of Certificateholders:
Beginning of period....................................... - 153,281 153,658
Income distributed to Certificateholders.................. $ 150,000 (19,404) (20,538)
----------------- --------------- ------------
End of period............................................. $ 153,281 $ 153,658 $ 153,125
================= =============== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
TRANSTEL PASS THROUGH TRUST
STATEMENTS OF CASH FLOW
(Thousands of Dollars)
<TABLE>
<CAPTION>
For the Period
October 20, 1997
(Inception) Through For the Year Ended
December 31, 1997 December 31
---------------------- -----------------------------
1998 1999
---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Distributable income................................... $ 3,281 $ 9,781 $ 20,005
Adjustments to reconcile distributable income
to net cash provided by operations:
Accrued interest income........................... (3,281) (377) 533
---------------- ------------- ----------
Net cash provided by financing activities.............. - 19,404 20,538
---------------- ------------- ----------
Cash flows from operating activities:
Proceeds from sale of Certificates................ 150,000 - -
---------------- ------------- ----------
Income distributed to Certificateholders.......... - (19,404) (20,538)
---------------- ------------- ----------
$ 150,000 $ (19,404) $ (20,538)
---------------- ------------- ----------
Cash flows used by investing activities:
Purchase of Senior Notes from
Transtel S.A................................. (150,000) - -
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.
8
<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 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").
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, (iii) registering the exchange certificates under the
Securities Act of 1933, as amended (the "Securities Act") which are identical to
the Certificates except that they are registered under the Securities Act (the
"Exchange Certificates"), (iv) exchanging the Certificates for the Exchange
Certificates, and (v) 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. 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.
("Transtel"). Pursuant to the Certificate Guarantee, dated as of October 28,
1997, Transtel fully, irrevocably and unconditionally guaranteed all of the
Trust's obligations under the Certificates.
On July 8, 1999, the Trust completed the Exchange Offer by issuing the
Exchange Certificates in exchange for the Certificates. Pursuant to the Exchange
Certificate Guarantee, dated as of July 8, 1999, Transtel fully, irrevocably and
unconditionally guaranteed all of the Trust's obligations under the Exchange
Certificates.
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.
9
<PAGE>
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
semi-annually 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
December 31, 1998 and December 31, 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.
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 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 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 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.
10
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
As previously disclosed in the Trust's Form 8-K, dated February 2,
2000, the Trust dismissed Price Waterhouse, as its independent accountants,
effective on January 28, 2000. The dismissal of Price Waterhouse was approved by
the Pass Through Trustee. The reports of Price Waterhouse on the Trust's
financial statements as of December 31, 1998 and December 31, 1997 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During the Trust's two
most recent fiscal years and through the subsequent interim period ended
September 30, 1999, there have been no disagreements with Price Waterhouse on
any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements if not resolved to the
satisfaction of Price Waterhouse would have caused them to make reference
thereto in their report. During the two most recent fiscal years and through
September 30, 1999, there have been no reportable events (as defined in
Regulation S-K Item 304(a)(1)(v)).
The Trust engaged Deloitte & Touche LLP as its new independent accountants,
effective on January 28, 2000. During the two most recent fiscal years and
through September 30, 1999, the Trust has not consulted with Deloitte & Touche
LLP on items which (1) were or should have been subject to Statement of Auditing
Standard No. 50 or (2) concerned the subject matter of a disagreement or
reportable event with the former accountants (as described in Regulation S-K
Item 304(a)(2)).
The Trust's Form 8-K, dated February 2, 2000, is incorporated herein by
reference.
11
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The Trust has no directors or executive officers. The Trust is managed by
the Pass Through Trustee.
Item 11. Executive Compensation
The Pass Through Trustee receives $2,500 from Transtel S.A. in annual
compensation. The Pass Through Trustee is also reimbursed for all reasonable
out-of-pocket expenses, disbursements and advances incurred or made by the Pass
Through Trustee in accordance with the Trust Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and counsel).
Item 12. Security Ownership of Certain Beneficial Owners and Management
The Pass Through Trustee does not beneficially own any Certificates. The
following table sets forth as of March 29, 2000, the amount of the Certificates
beneficially owned by all persons who beneficially own more than five percent of
the Certificates.
Amount of
Certificates Percent
Name of Beneficial Owner Owned Owned
- --------------------------------------------------- ------------- -------
Bankers Trust Company
c/o BT Services Tennessee Inc.
648 Grassmbre Park Drive
Nashville, TN 37211............................ $35,175,000 24%
Boston Safe Deposit and Trust Company
c/o Mellon Bank N.A.
Three Mellon Bank Center, Room 153-3015
Pittsburgh, PA 15259........................... $ 8,605,000 5.78%
Chase Bank of Texas, N.A.
P.O. Box 2558
Houston, TX 77252-8009......................... $19,865,000 13.35%
Chase Manhattan Bank
4 New York Plaza
New York, NY 10004............................. $56,813,000 38.18%
Citibank, N.A.
P.O. Box 30576
Tampa, FL 33630-3576........................... $10,060,000 6.76%
State Street Bank and Trust Company
1776 Heritage Dr.
Global Corporate Action Unit JAB SNW No.
Quincy, MA 02171............................... $ 8,250,000 5.54%
Item 13. Certain Relationships and Related Transactions
Not applicable.
12
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Documents filed as part of this report:
(1) Financial Statements. The following financial statements of
--------------------
the Trust are included in Part II, Item 8, of this Annual
Report on Form 10-K:
. Statement of Assets and Undivided Interests;
. Statements of Distributable Income and Changes in
Undivided Interests; and
. Statements of Cash Flow.
(2) Consolidated Financial Statement Schedules: Not applicable.
------------------------------------------
(3) 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 Transtel
S.A., as depositor, and Wilmington Trust Company,
as pass through trustee (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 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 10.3 Form of Exchange Certificate Guarantee, by Transtel
S.A. in favor of HSBC Bank USA (formerly known as
Marine Midland Bank) and the Exchange
Certificateholders (incorporated by reference to
Exhibit 4.7 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:
Transtel Pass Through Trust filed a Form 8-K with the
Securities and Exchange Commission dated February 2, 2000
regarding Item 4. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure.
13
<PAGE>
Signatures
Pursuant to the requirements of the 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.
TRANSTEL PASS THROUGH TRUST,
as Registrant
By: Wilmington Trust Company,
not in its individual
capacity but solely
as Pass Through Trustee
Date: April 14, 2000 By: /s/ Mary St. Amand
---------------------------
Name: Mary St. Amand
Title: Assistant Vice President
14
<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>
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1999 JAN-01-1998 OCT-20-1997
<PERIOD-END> DEC-31-1999 DEC-31-1998 DEC-31-1997
<CASH> 0 0 0
<SECURITIES> 0 0 0
<RECEIVABLES> 153,125 153,658 153,281
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<INVENTORY> 0 0 0
<CURRENT-ASSETS> 153,125 153,658 153,281
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<TOTAL-ASSETS> 153,125 153,658 153,281
<CURRENT-LIABILITIES> 3,125 3,658 3,281
<BONDS> 150,000 150,000 150,000
0 0 0
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