<PAGE>
Filed Pursuant to Rule 424(b)(2)
Commission File No. 333-46751
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 23, 1998)
$100,000,000
[LOGO]
ALIANT COMMUNICATIONS INC.
6 3/4% NOTES DUE APRIL 1, 2028
------------------
The 6 3/4% Notes due April 1, 2028 (the "Notes") of Aliant Communications
Inc., a Nebraska corporation ("Aliant" or the "Company"), being offered hereby
will mature on April 1, 2028. Interest on the Notes is payable semi-annually on
October 1 and April 1 of each year, commencing October 1, 1998. The Notes will
be redeemable, as a whole or in part, at the option of the Company at any time
at a redemption price equal to the greater of (i) 100% of the principal amount
of the Notes to be redeemed or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate (as defined herein) plus 12.5 basis
points, together in either case with accrued interest to the date of redemption.
See "Certain Terms of the Notes--Optional Redemption" and "Description of Debt
Securities--Redemption of Debt Securities."
The Notes will be senior, unsecured indebtedness of the Company. The Notes
will be structurally subordinated to all existing and future liabilities,
including trade payables, of the Company's subsidiaries.
The Notes will be represented by one or more Global Notes registered in the
name of a nominee of The Depository Trust Company, which will act as the
depositary for the Global Notes (the "Depositary"). Beneficial interests in the
Global Notes will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary and its participants. Except as
described herein, individual notes in definitive form will not be issued.
Settlement for the Notes will be made in immediately available funds. The Notes
will trade in the Depositary's Same-Day Funds Settlement System until maturity,
and secondary market trading activity for the Notes will therefore settle in
immediately available funds. All payments of principal and interest will be made
by the Company in immediately available funds. See "Certain Terms of the
Notes--Same-Day Settlement and Payment" and "--Global Notes."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) COMPANY (1)(3)
<S> <C> <C> <C>
Per Note....................................................... 99.872% .875% 98.997%
Total.......................................................... $99,872,000 $875,000 $98,997,000
</TABLE>
(1) Plus accrued interest, if any, from April 1, 1998 to the date of delivery.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $275,000.
------------------------
The Notes are offered by the several Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of certain
legal matters by counsel for the Underwriters and certain other conditions. The
Underwriters reserve the right to withdraw, cancel or modify such offer and
reject any orders in
<PAGE>
whole or in part. It is expected that delivery of the Notes will be made only in
book-entry form through the facilities of the Depositary on or about April 1,
1998.
------------------------
MERRILL LYNCH & CO. MORGAN STANLEY DEAN WITTER
---------------
The date of this Prospectus Supplement is March 26, 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING AND THE PURCHASE OF NOTES TO COVER
SYNDICATE SHORT POSITIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDER-
WRITING."
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Prospectus Supplement, including documents incorporated by reference
herein, may contain "forward-looking" statements, as defined in the Private
Securities Litigation Reform Act of 1995. All statements, other than historical
facts, that address activities, events, or developments that the Company
expects, believes or anticipates will or may occur in the future, including such
things as expansion and growth of the Company's business, acquisitions, capital
expenditures and the Company's business strategy are forward-looking statements.
These statements contain potential risks and uncertainties; therefore, actual
results may differ materially. The Company undertakes no obligation to update
publicly any forward-looking statements whether as a result of new information,
future events or otherwise.
Important assumptions and other important factors that could cause actual
results to differ from those set forth in the forward-looking information
include, but are not limited to: changes in the national and local economic and
market conditions; demographic changes; the size and growth of the overall
telecommunications market; changes in competition in markets in which the
Company operates; advances in telecommunications technology; changes in the
telecommunications regulatory environment; the need for regulatory approval to
make acquisitions or undertake certain other activities, including rate
re-balancing; changes in business strategy or development plans; pending and
future litigation; availability of future financing; start-up of Personal
Communications Services operations; new product and service development and
introductions; changes in consumer preferences; and unanticipated changes in
growth in cellular customers, penetration rates, churn rates and the mix of
products and services offered in the Company's markets. GIVEN SUCH
UNCERTAINTIES, PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE
ON SUCH FORWARD-LOOKING STATEMENTS.
THE COMPANY
UNLESS THE CONTEXT INDICATES OTHERWISE: (I) REFERENCES TO "ALIANT" OR THE
"COMPANY" REFER TO ALIANT COMMUNICATIONS INC. AND ITS SUBSIDIARIES; (II)
REFERENCES TO AN "MSA" OR TO A PARTICULAR CITY REFER TO THE METROPOLITAN
STATISTICAL AREA, AS DESIGNATED BY THE U.S. OFFICE OF MANAGEMENT AND BUDGET AND
USED BY THE FEDERAL COMMUNICATIONS COMMISSION (THE "FCC") IN DESIGNATING
METROPOLITAN CELLULAR MARKET AREAS; (III) REFERENCES TO AN "RSA" REFER TO THE
RURAL SERVICE AREA, AS USED BY THE FCC IN DESIGNATING NON-MSA CELLULAR MARKET
AREAS; (IV) REFERENCES TO CELLULAR "MARKETS" OR "SYSTEMS" REFER TO MSAS, RSAS OR
BOTH; (V) REFERENCES TO "POPS" MEAN THE POPULATION OF A MARKET, BASED ON
DONNELLEY MARKETING SERVICE ESTIMATES FOR 1996 OR FOR SUCH OTHER YEAR AS
INDICATED HEREIN; AND (VI) REFERENCES TO PROPORTIONATELY-OWNED POPS MEANS POPS
FOR A MARKET MULTIPLIED BY THE PERCENTAGE INTERESTS THAT THE COMPANY OWNS IN AN
ENTITY LICENSED BY THE FCC TO OPERATE A CELLULAR SYSTEM IN SUCH MARKET.
GENERAL
Aliant Communications Inc., formerly Lincoln Telecommunications Company, is
a diversified communications company providing retail services and products to
consumers, businesses, educational institutions and government agencies as well
as wholesale network services to other communications companies. Consistent with
its strategy of providing one-stop, single source communications services, the
Company offers local and long distance services, wireless services, enhanced
services, directory services, communications systems and equipment and a full
range of data communications services.
S-2
<PAGE>
LANDLINE OPERATIONS (ILEC AND CLEC)
The Company operates an Incumbent Local Exchange Carrier ("ILEC") that
provides local and intraLATA service to approximately 196,000 retail customers
in the contiguous geographical area consisting of the southeastern 22 counties
of Nebraska. The Company's fully digital local exchange network supports
Signaling System 7 technology and includes over 1,550 route miles of fiber optic
cable, much of it in a ring configuration. Data communications services include
Internet access, which is provided under the Navix-Registered Trademark- brand
name. Enhanced services include Voice Mail, Caller ID, Custom Calling, Centrex,
Continuous Redial, Selective Call Forwarding and Integrated Services Digital
Network. The Company publishes six regional telephone directories and provides
access service to long distance and cellular companies.
Although not provided through the Company's ILEC, the Company is also a
"reseller" of long distance services, primarily in its ILEC market. The Company
provides this service by aggregating customer traffic to take advantage of
volume discounts offered by national network operators. As a result, the Company
offers long distance, cellular, Internet and local exchange services to its ILEC
customers.
The Telecommunications Act of 1996 (the "Telecommunications Act")
facilitated the entry of competitive local exchange services, including
competitive local exchange carriers ("CLEC(s)") into local exchange markets
historically controlled by ILECs. In June 1997, Aliant Midwest Inc. ("Midwest"),
the Company's wholly-owned CLEC, began offering competitive local exchange
services in the Omaha metropolitan area and in Nebraska's third largest city,
Grand Island.
In fiscal 1997, the Company formed Aliant Network Services Inc. ("Aliant
Network") to sell network capacity and services through its fully digital,
fiber-based network to other telecommunications companies entering the Company's
markets. To enhance its ability to sell network services, the Company expanded
its network facilities to Omaha and formed a consortium with seven other
companies which provides the Company with the capacity to offer interconnection
services with other fiber networks serving major metropolitan areas in 18
states. In January 1998, the Company received its first request for
interconnection services from US West Communications, Inc. ("US West"). See
"--Recent Developments" below.
In fiscal 1997, the Company's landline operations generated net sales of
approximately $219 million (including sales of telephone equipment and
services). The Company continues to focus on achieving greater market
penetration of access lines, and traditional and enhanced services. As of
December 31, 1997, the Company's customer access lines totaled 273,000, an
increase of 3.7% over the prior year. Residential penetration of enhanced
services was 20.2% at December 31, 1997, a 16.1% increase from the prior year.
CELLULAR OPERATIONS
The Company's cellular services are provided throughout the State of
Nebraska and in one RSA in Iowa contiguous to the Omaha MSA. As of December 31,
1997, the Company had cellular networks and services consisting of four managed
markets. The Company served 267,497 customers in these markets as of that date,
which represents a penetration rate of 15.1% of the total operating area of
approximately 1.8 million POPs.
On February 27, 1998, the Company completed the acquisition from 360 DEG.
Communications Company of Nebraska ("360 DEG.") of the remaining 50% ownership
interest in the Omaha Cellular General Partnership ("OCGP") that the Company did
not already own (the "OCGP Acquisition"). As a result of the OCGP Acquisition,
the Company owns 100% of OCGP which, in turn, owns approximately 56% of the
operating limited partnership that provides cellular services in Douglas and
Sarpy Counties in Nebraska and Pottawatamie County in Iowa (including the
Omaha-Council Bluffs metropolitan area). Based on December 31, 1997 statistics,
the OCGP Acquisition doubled the Company's proportionately-owned POPs in this
service area to 354,172 and its subscribers to 44,892. See "--Recent
Developments" below.
S-3
<PAGE>
In fiscal 1997, the Company's managed proportionate cellular operations
generated net sales of approximately $85 million, representing average monthly
revenue per customer of $38.75. Over the past two years, the Company's average
customer acquisition cost was approximately $300 and its monthly churn rate was
below 1%, compared to a national churn rate of 1.8% as reported in the Cellular
Telecommunications Industry Association survey as of June 1997. The following
table sets forth certain information regarding the Company's cellular operations
as of March 1, 1998.
CELLULAR OPERATIONS
<TABLE>
<CAPTION>
PERCENTAGE POPS WITHIN NET
SYSTEM (1) OWNERSHIP AREA NET POPS CUSTOMERS CUSTOMERS
- --------------------------------------------- ----------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Lincoln MSA.................................. 100.0% 231,114 231,114 51,045 51,045
Omaha MSA.................................... 55.8%(2) 634,489 354,172(5) 80,424 44,892(4)
Nebraska RSAs................................ 100.0% 848,366(4) 848,366 131,942 131,942
Iowa RSA 1................................... 16.1%(3) 62,364(5) 10,040 4,086 658
------------ ---------- ----------- ------------
Total...................................... 1,776,333 1,443,692 267,497 228,537
------------ ---------- ----------- ------------
------------ ---------- ----------- ------------
</TABLE>
- ------------------------
(1) Systems are as follows:
Lincoln MSA--Lancaster County, Nebraska
Omaha MSA--Douglas and Sarpy Counties in Nebraska and Pottawatamie County
in Iowa
Nebraska RSAs--89 of the 90 Nebraska counties not in the Omaha and Lincoln
MSAs
Iowa RSA 1--Southwestern six counties of Iowa
(2) As a result of the OCGP Acquisition, limited partners owning approximately
17% of the partnership interests in the operating limited partnership have
the right, subject to certain limitations, to require the Company to
purchase their interests. See "--Recent Developments" below.
(3) Includes the Company's allocable portion of the 14.1% interest in Iowa RSA 1
held by the operating limited partnership serving the Omaha MSA system. As a
result of the OCGP Acquisition, approximately 8% of this ownership interest
is subject to rights of first refusal in favor of the general and limited
partners in Iowa RSA 1. See "--Recent Developments" below.
(4) Does not include the Omaha MSA licensee's 14.1% interest in Iowa RSA 1
(which system has been separately included in the table) or the Omaha MSA
licensee's 8.3% interest in Iowa RSA 8 (representing 4,544 POPs and 2,536
net POPs).
(5) According to estimates available to the Company, approximately 96% of these
POPs are covered by the networks of these systems.
BUSINESS STRATEGY
The Company's business strategy is to maintain its strong local presence and
brand awareness within its traditional market, and to pursue full service
telecommunications opportunities in new markets. Components of this strategy
include:
- Maintaining market share in ILEC operations through strong local branding
efforts, market segmentation and customer care programs;
- Increasing the penetration and use of enhanced services by its ILEC
customers through packaging and targeted marketing;
- Pursuing the re-balancing of regulated ILEC rates with the Nebraska Public
Service Commission ("NPSC") to align these rates more closely with costs,
reducing competitive vulnerability;
S-4
<PAGE>
- Increasing the utilization of its ILEC network by offering attractive
wholesale services to other communications companies, including retail
competitors;
- Increasing cellular customers outside of its traditional ILEC market both
for immediate revenue growth and to provide a platform for its CLEC to
offer integrated convenient communications services to customers in new
geographic areas;
- Considering selected strategic acquisitions, both within and outside its
traditional ILEC market; and
- Investing in landline and wireless networks to provide new services and
features, reduce operating costs and accommodate high customer service
standards.
The Company's strategy is designed to increase the Company's revenues and
enhance long-term profitability. The Company believes that its strategy will
position it to compete effectively with existing competitors, as well as
Regional Bell Operating Companies, long distance carriers and telecommunications
companies offering Personal Communications Services, in its traditional
operating area.
The Company's principal wholly-owned subsidiary is Aliant Communications Co.
("Telco"), a Delaware corporation, formerly The Lincoln Telephone and Telegraph
Company, which was incorporated on May 5, 1928. Other wholly-owned subsidiaries
of the Company are Aliant Cellular Inc., formerly Nebraska Cellular Telephone
Corporation; Aliant Systems Inc., formerly LinTel Systems Inc.; Prairie
Communications, Inc., Midwest and Aliant Network.
RECENT DEVELOPMENTS
OCGP ACQUISITION. On February 27, 1998, the Company completed the OCGP
Acquisition for approximately $15 million in cash and the release of 360 DEG.
from its obligations pursuant to a discounted note receivable, the balance of
which at December 31, 1997, was approximately $47.7 million. Until February 27,
1999, limited partners owning approximately 17% of the partnership interests in
the operating limited partnership will each have the option to require the
Company to repurchase such interests at a price equal to the price paid by the
Company to 360 DEG. in the OCGP Acquisition, less a 30% discount. If all such
options are exercised, the estimated cost to the Company of purchasing such
interests would be approximately $17 million. See "--Cellular Operations."
RATE RE-BALANCING. On March 10, 1998, Telco received approval of its
application with the NPSC to increase Telco's residential basic local service
rates to $16.35 per month (existing residential rates range from $11.00 to
$13.75 per month). This increase will be implemented in May 1998. The additional
revenue to be generated by such increase will be offset by (i) reductions in
Telco's business basic local service rates to $31.40 per month (existing
business rates range from $33.00 to $39.00 per month); (ii) the elimination of a
separate Touch Tone charge ($.50 and $1.50 per month for residential and
business customers, respectively); (iii) the reduction of day time intraLATA
toll rates from $.18 per minute to $.13 per minute; and (iv) the reduction of
intraLATA access charges by approximately $900,000 per year. Telco has estimated
that the net impact of all these changes will be immaterial to revenues.
The Company may, in the future, request authority from the NPSC to further
re-balance its local service rates to more closely reflect costs of service. The
timing and the specific rates that may be requested in any such further
re-balancing dockets are not currently known. However, such timing and specific
rates will likely be influenced by the outcome of the current NPSC docket in
which the structure of access charges and the nature of universal service
funding in Nebraska are being investigated. No assurance can be given that any
future rate re-balancing requests will be approved.
US WEST REQUEST. On January 9, 1998, the Company received a letter from US
West requesting that Telco negotiate the terms and conditions for
interconnection services and network elements under and
S-5
<PAGE>
pursuant to the provisions of Sections 251 and 252 of the Telecommunications
Act. Receipt of this request was acknowledged by the Company on January 12,
1998.
Pursuant to the Telecommunications Act, Telco and US West have a period of
135 days following receipt of the request to voluntarily negotiate the terms and
conditions of interconnection. Thereafter, from the 135th to the 160th day
following receipt of the request, Telco or US West may petition the NPSC to
arbitrate any open issues. Section 252 of the Telecommunications Act sets forth
further provisions concerning arbitration and interconnection. Pursuant to
Section 251(f)(2) of the Telecommunications Act, Telco may petition the NPSC for
suspension or modification of certain interconnection requirements if the NPSC
determines that certain conditions as specified in such Section exist. However,
the Company has advised the NPSC that it does not intend to make a request
pursuant to Section 251(f)(2) with respect to an interconnection request for
resale or for transport and termination. Upon completion of this process, it is
expected that US West will be in a position to offer competitive local exchange
services within the Company's traditional ILEC market.
As of the date hereof, no other requests have been received by the Company
to provide interconnection services or network elements to carriers seeking to
establish competitive wireline telecommunications businesses in Telco's
operating area. However, other carriers may make such requests to seek to
establish CLEC operations in Telco's operating area in the future.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Notes (i)
to repay approximately $15 million of short-term debt incurred under one of the
Company's credit facilities to fund the OCGP Acquisition (the "Acquisition
Debt"), which debt matures on July 6, 1998, (ii) to redeem approximately $48
million in principal amount of Telco's Series K 9.91% First Mortgage Bonds, due
June 1, 2000 (the "Series K Bonds"), including a make-whole premium of
approximately $4 million, (iii) to redeem all of Telco's outstanding 5%
preferred stock for approximately $4.7 million, including a redemption premium
of approximately $225,000, and (iv) to utilize the balance of the proceeds
(approximately $31 million) to repay a portion of the principal amount
outstanding under one of the Company's credit facilities, which debt matures on
July 6, 1999 (the "Other Indebtedness"). Principal amounts outstanding under the
Company's credit facilities bear interest based on LIBOR-based 30-day, 60-day or
90-day floating rate pricing formulas. The Acquisition Debt currently bears
interest at a rate of 5.88% per annum and approximately $15 million of the Other
Indebtedness currently bears interest at a rate of 6.24% per annum and
approximately $16 million of the Other Indebtedness currently bears interest at
a rate of 5.93% per annum. Pending application of the net proceeds for such
purposes, the proceeds may be invested in short-term or marketable securities.
See "Capitalization" below.
S-6
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated short-term debt and
capitalization of the Company at December 31, 1997 on an actual basis and on a
pro forma basis after giving effect to the OCGP Acquisition. The following table
also sets forth the consolidated short-term debt and capitalization of the
Company on a pro forma as adjusted basis after giving effect to the sale of the
Notes and the receipt and application of the estimated net proceeds therefrom as
described in "Use of Proceeds" in this Prospectus Supplement. For additional
information as to the capitalization of the Company, see "Summary Consolidated
Financial Information" included in this Prospectus Supplement and Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
consolidated financial statements of the Company and the related notes thereto
incorporated by reference herein.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
------------------------------------------
PRO FORMA
ACTUAL AS ADJUSTED(3)
---------- PRO FORMA(2) --------------
--------------
(IN THOUSANDS)
<S> <C> <C> <C>
Short-term debt (including current
portion of long-term debt)......................................... $ 19,000 $ 34,000 $ 19,000
---------- -------------- --------------
---------- -------------- --------------
Long-term debt:
Series K bonds..................................................... $ 44,000 $ 44,000 $ --
Long-term bank indebtedness........................................ 50,000 50,000 19,000
Notes offered hereby............................................... -- -- 100,000
---------- -------------- --------------
Total long-term debt............................................. 94,000 94,000 119,000
---------- -------------- --------------
5% redeemable preferred stock (1).................................... 4,499 4,499 --
Minority interest.................................................... -- 12,743 12,743
Common stockholders' equity.......................................... 302,998 302,998 300,373
---------- -------------- --------------
Total capitalization................................................. $ 401,497 $ 414,240 $ 432,116
---------- -------------- --------------
---------- -------------- --------------
</TABLE>
- ------------------------
(1) Telco, a wholly-owned subsidiary of the Company, is the issuer of the 5%
redeemable preferred stock, which preferred stock is publicly-held. Such
preferred stock is redeemable solely at the option of Telco.
(2) Reflects incurrence of the Acquisition Debt to fund the OCGP Acquisition and
the effect of consolidating OCGP with the Company at December 31, 1997.
(3) Reflects (i) the sale of the $100 million of Notes offered hereby, (ii) the
repayment of the Acquisition Debt and the effect of consolidating OCGP with
the Company, including the related minority interest, at December 31, 1997,
(iii) the redemption of the Series K Bonds for approximately $48 million,
including a make-whole premium of approximately $4 million, which is
reflected net of taxes as a reduction of common stockholders' equity using a
40% tax rate, (iv) the redemption of Telco's outstanding 5% preferred stock
for approximately $4.7 million, including a redemption premium of
approximately $225,000, and (v) the repayment of approximately $31 million
of Other Indebtedness.
S-7
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
The following summary consolidated financial information for each fiscal
year in the five-year period ended December 31, 1997 is derived from, and should
be read in conjunction with, the audited consolidated financial statements and
the related notes thereto and Management's Discussion and Analysis of Financial
Condition and Results of Operations incorporated by reference herein.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
EARNINGS STATEMENT DATA:
Revenues and sales:
Telephone revenues................................. $ 199,873 $ 189,426 $ 179,916 $ 175,417 $ 169,317
Wireless communications services................... 76,710 63,696 34,121 10,740 7,006
Equipment sales and services....................... 19,176 18,930 18,768 18,100 15,270
Intercompany revenues.............................. (9,431) (7,827) (7,113) (7,611) (7,618)
--------- --------- --------- --------- ---------
Total revenues and sales......................... 286,328 264,225 225,692 196,646 183,975
Operating expenses:
Depreciation and amortization...................... 49,525 46,404 37,422 35,915 28,745
Other operating expenses........................... 152,580 143,646 120,627 106,869 103,100
Restructuring charges.............................. -- -- 21,611 -- --
Taxes, other than payroll and income............... 4,282 4,200 3,184 3,180 2,923
Intercompany expenses.............................. (9,431) (7,827) (7,113) (7,611) (7,618)
--------- --------- --------- --------- ---------
Total operating expenses......................... 196,956 186,423 175,731 138,353 127,150
--------- --------- --------- --------- ---------
Operating income..................................... 89,372 77,802 49,961 58,293 56,825
Net non-operating expense............................ 2,016 3,348 2,485 3,621 4,016
--------- --------- --------- --------- ---------
Income before income taxes and extraordinary item.... 87,356 74,454 47,476 54,672 52,809
Income taxes......................................... 34,317 29,500 18,447 21,067 19,618
--------- --------- --------- --------- ---------
Income before extraordinary item and change in
accounting principle............................... 53,039 44,954 29,029 33,605 33,191
Extraordinary item................................... -- -- (16,516) -- --
--------- --------- --------- --------- ---------
Earnings before cumulative effect of change in
accounting principle............................... 53,039 44,954 12,513 33,605 33,191
Cumulative effect of change in accounting
principle.......................................... -- -- -- -- (23,166)
--------- --------- --------- --------- ---------
Net earnings......................................... 53,039 44,954 12,513 33,605 10,025
Preferred dividends.................................. 225 225 225 225 225
--------- --------- --------- --------- ---------
Earnings available for common stock.................. $ 52,814 $ 44,729 $ 12,288 $ 33,380 $ 9,800
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Earnings per share before restructuring charge,
extraordinary item and change in accounting
principle.......................................... $ 1.46 $ 1.22 $ 0.84 $ 1.03 $ 1.01
Net earnings per share............................. $ 1.46 $ 1.22 $ 0.36 $ 1.03 $ 0.30
Dividends declared per share....................... $ 0.66 $ 0.61 $ 0.57 $ 0.53 $ 0.49
Average shares outstanding (in 000s)................. 36,260 36,602 34,360 32,408 32,548
</TABLE>
S-8
<PAGE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Assets:
Current assets..................................... $ 92,595 $ 81,218 $ 84,102 $ 79,957 $ 81,751
Net property and equipment......................... 258,955 255,020 255,262 241,770 246,104
Other assets....................................... 196,092 185,164 180,957 71,457 67,424
--------- --------- --------- --------- ---------
Total assets..................................... 547,642 521,402 520,321 393,184 395,279
Liabilities:
Current liabilities................................ 84,782 73,594 74,764 62,324 74,385
Deferred credits................................... 61,363 61,662 63,805 85,926 88,363
Capitalization:
Long-term debt..................................... 94,000 103,080 117,708 44,000 44,000
Preferred stock.................................... 4,499 4,499 4,499 4,499 4,499
Shareholders' equity............................... 302,998 278,567 259,545 196,435 184,032
--------- --------- --------- --------- ---------
Total capitalization............................... 401,497 386,146 381,752 244,934 232,531
--------- --------- --------- --------- ---------
Total capitalization and liabilities............... 547,642 521,402 520,321 393,184 395,279
</TABLE>
SUMMARY OPERATING DATA
The following table is a summary of certain landline and cellular operating
data of the Company:
<TABLE>
<CAPTION>
AT OR FOR YEARS ENDED DECEMBER 31,
-----------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Landline Operations:
Total access lines.............................. 273,008 263,208 254,173 246,963 238,142
Access minutes of use (in millions)............. 1,024.8 968.2 899.9 840.1 789.2
Cellular Operations (1):
POPs............................................ 1,263,925 1,252,807 1,234,250 400,540 400,040
Customers....................................... 205,915 165,233 122,852 29,989 19,245
Penetration rate at year end.................... 16.3% 13.2% 10.0% 7.5% 4.8%
Churn rate per month............................ 0.9% 0.8% 1.2% 1.4% N/A
</TABLE>
- ------------------------
(1) Cellular data reflects amounts based on proportionately-owned POPs. This
data does not reflect the effect of the OCGP Acquisition.
S-9
<PAGE>
CERTAIN TERMS OF THE NOTES
The Notes will be issued under an Indenture dated as of February 23, 1998
(the "Indenture"), between the Company and U.S. Bank National Association, as
Trustee. The Indenture constitutes the Indenture described in the accompanying
Prospectus and the Notes constitute Debt Securities described in the
accompanying Prospectus. The following description of the particular terms of
the Notes offered hereby supplements the description of the general terms and
provisions set forth in the Prospectus, to which description reference is hereby
made. References to the "Company" in this section, unless the context indicates
otherwise, are to Aliant Communications Inc. and not its subsidiaries or any
other entities in which it holds an interest.
GENERAL
The Notes will mature on April 1, 2028, and will be limited to $100,000,000
aggregate principal amount. Each Note will bear interest at the rate per annum
stated on the cover page hereof from April 1, 1998 or from the most recent
interest payment date to which interest has been paid or provided for, payable
semi-annually on October 1 and April 1 of each year (each such date being
referred to herein as an "Interest Payment Date"), commencing October 1, 1998,
to the person in whose name a Note is registered at the close of business on
September 15 or March 15, as the case may be, preceding such Interest Payment
Dates. Interest on the Notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
The Notes will be unsecured and will rank PARI PASSU with all other
unsecured and unsubordinated indebtedness of the Company from time to time
outstanding. In addition, the Notes will be structurally subordinated to all
existing and future liabilities, including trade payables, of the Company's
subsidiaries.
The Company is a holding company which conducts substantially all of its
operations through subsidiaries. Virtually all of the operating assets of the
Company and its subsidiaries are owned by such subsidiaries. Therefore, the
right of the Company, and hence the right of creditors of the Company (including
the holders of the Notes), to participate in any distribution of the assets of
any subsidiary, upon its liquidation or reorganization or otherwise, is
necessarily subject to the prior claims of creditors of the subsidiary, except
to the extent that claims of the Company itself as a creditor of the subsidiary
may be recognized.
The defeasance provisions contained in the Indenture and described under
"Description of Debt Securities--Defeasance and Discharge" in the accompanying
Prospectus will be applicable to the Notes. The Indenture does not contain any
covenants or other provisions applicable to the Notes which might afford
beneficial owners of Notes protection in the event of a highly leveraged
transaction, change in credit rating of the Notes or other similar occurrence.
The Notes will not be entitled to any sinking fund.
OPTIONAL REDEMPTION
The Notes will be redeemable, as a whole or in part, at the option of the
Company at any time and from time to time, on not less than 30 or more than 60
days' notice mailed to registered holders thereof, at a redemption price equal
to the greater of (i) 100% of the principal amount of the Notes to be redeemed
or (ii) the sum of the present values of the Remaining Scheduled Payments (as
defined below) thereon discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined below) plus 12.5 basis points, together in either case with
accrued interest on the principal amount being redeemed to the date of
redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity (computed as of the
second business day immediately preceding such
S-10
<PAGE>
redemption date) of the Comparable Treasury Issue (as defined below), assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price (as defined below) for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Company.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations,
or (B) if the Trustee is able to obtain only one Reference Treasury Dealer
Quotation from the Reference Treasury Dealers, such Quotation. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer as of 5:00 p.m., New York City time on the
third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Merrill Lynch & Co. and Morgan
Stanley & Co. Incorporated, and their respective successors; provided, however,
that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor another nationally recognized investment banking firm
that is a Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each Note to be
redeemed, the remaining scheduled payments of the principal thereof and interest
thereon that would be due after the related redemption date but for such
redemption; provided, however, that, if such redemption date is not an Interest
Payment Date with respect to such Note, the amount of the next succeeding
scheduled interest payment thereon will be reduced by the amount of interest
accrued thereon to such redemption date.
From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Notes called for redemption shall have been made
available on such redemption date, such Notes will cease to bear interest on the
date fixed for such redemption specified in such notice, and the only right of
holders of the Notes will be to receive payment of the redemption price. See
"Description of Debt Securities--Redemption of Debt Securities" in the
accompanying Prospectus.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds. The Notes will trade in the Depositary's
Same-Day Funds Settlement System until maturity, and secondary market trading
activity in the Notes will therefore be required by the Depositary to settle in
immediately available funds.
S-11
<PAGE>
GLOBAL NOTES
Upon issuance, all Notes will be represented by Global Notes. The Global
Notes representing the Notes will be deposited with, or on behalf of, the
Depositary and will be registered in the name of the Depositary or a nominee of
the Depositary. No Global Notes may be transferred, except as a whole by a
nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or such nominee to a successor of the
Depositary or a nominee of such successor.
So long as the Depositary or its nominee is the registered owner of a Global
Note, the Depositary or its nominee, as the case may be, will be the sole holder
of the Notes represented thereby for all purposes under the Indenture. Except as
otherwise provided in this section, the Beneficial Owners (as defined below) of
the Global Notes representing the Notes will not be entitled to receive physical
delivery of certificated Notes and will not be considered the holders thereof
for any purpose under the Indenture, and no Global Note representing the Notes
shall be exchangeable or transferable. Accordingly, each Beneficial Owner must
rely on the procedures of the Depositary and, if such Beneficial Owner is not a
Participant (as defined below), on the procedures of the Participant through
which such Beneficial Owner owns its interest in order to exercise any rights of
a holder under such Global Note or the Indenture. The laws of some jurisdictions
require that certain purchasers of securities take physical delivery of such
securities in certificated form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Note representing the
Notes.
The Global Notes representing the Notes will be exchangeable for
certificated Notes of like tenor and terms and of differing authorized
denominations aggregating a like principal amount, only if (i) the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for the Global Notes, (ii) the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (iii) the Company in its sole discretion determines that the Global Notes
shall be exchangeable for certificated Notes, or (iv) there shall have occurred
and be continuing an "Event of Default" under the Indenture with respect to the
Notes. Upon any such exchange, the certificated Notes shall be registered in the
names of the Beneficial Owners of the Global Notes representing the Notes, which
names shall be provided by the Depositary's relevant Participants (as identified
by the Depositary) to the Trustee.
The following is based on information furnished by the Depositary:
The Depositary will act as securities depository for the Notes. The Notes
will be issued as fully registered securities, registered in the name of Cede &
Co. (the Depositary's partnership nominee). Fully registered Global Notes will
be issued for the Notes, in the aggregate principal amount of such issue, and
will be deposited with the Depositary.
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary holds securities that its participants (the "Participants")
deposit with the Depositary. The Depositary also facilitates the settlement
among Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes to
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants of the Depositary ("Direct
Participants") include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations. The Depositary is owned by a number of its Direct Participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and
the National Association of Securities Dealers, Inc. Access to the Depositary's
system is also available to others, such as securities brokers and dealers,
banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to the Depositary and its Participants are
on file with the Securities and Exchange Commission (the "Commission").
S-12
<PAGE>
Purchases of Notes under the Depositary's system must be made by or through
Direct Participants, which will receive a credit for such Notes on the
Depositary's records. The ownership interest of each actual purchaser of each
Note represented by a Global Note (a "Beneficial Owner") is in turn to be
recorded on the Direct and, if applicable, Indirect Participants' records.
Beneficial Owners will not receive written confirmation from the Depositary of
their purchase, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which such Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Global Notes representing the Notes are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners of the Global Notes representing the Notes will not receive
certificated Notes representing their ownership interests therein, except as
described above.
To facilitate subsequent transfers, all Global Notes representing the Notes
which are deposited with, or on behalf of, the Depositary are registered in the
name of the Depositary's nominee, Cede & Co. The deposit of Global Notes with,
or on behalf of, the Depositary and their registration in the name of Cede & Co.
effect no change in beneficial ownership. The Depositary has no knowledge of the
actual Beneficial Owners of the Global Notes representing the Notes. The
Depositary's records reflect only the identity of the Direct Participants to
whose accounts such Notes are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Global Notes representing the Notes. Under its usual procedure, the
Depositary mails an Omnibus Proxy to the Company as soon as possible after the
applicable record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Notes are
credited on the applicable record date (identified in a listing attached to the
Omnibus Proxy).
Payments of principal and/or interest, if any, on the Global Notes
representing the Notes will be made to the Depositary. The Depositary's practice
is to credit Direct Participants' accounts on the applicable payment date in
accordance with their respective holdings shown on the Depositary's records,
unless the Depositary has reason to believe that it will not receive payment on
such date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of the
Depositary, the Trustee or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal and/or
interest, if any, to the Depositary is the responsibility of the Company or the
Trustee. Disbursement of such payments to Direct Participants shall be the
responsibility of the Depositary, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
The Depositary may discontinue providing its services as securities
depository with respect to the Notes at any time by giving reasonable notice to
the Company or the Trustee. Under such circumstances, in the event that a
successor securities depositary is not obtained, certificated Notes are required
to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor securities depository). In that
event, certificated Notes will be printed and delivered.
S-13
<PAGE>
The information in this section concerning the Depositary and the
Depositary's system has been obtained from sources that the Company believes to
be reliable, but the Company assumes no responsibility for the accuracy thereof.
A further description of the Depositary's procedures with respect to the
Global Notes representing the Notes is set forth in the accompanying Prospectus
under "Description of Debt Securities--Registered Global Securities."
THE TRUSTEE
U.S. Bank National Association is the Trustee under the Indenture. The
Company maintains normal banking relations with U.S. Bank National Association.
S-14
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") among the Company and each of Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated
(collectively, the "Underwriters"), the Company has agreed to sell to each of
the Underwriters and each of the Underwriters severally has agreed to purchase
from the Company the aggregate principal amount of the Notes set forth opposite
its name below. The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the Notes if any are
purchased.
<TABLE>
<CAPTION>
UNDERWRITERS PRINCIPAL AMOUNT
- ------------------------------------------------------------------------------------------------ ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................................................................... $ 50,000,000
Morgan Stanley & Co. Incorporated............................................................... 50,000,000
----------------
Total................................................................................. $ 100,000,000
----------------
----------------
</TABLE>
The Underwriters have advised the Company that they propose initially to
offer the Notes to the public at the public offering price set forth on the
cover page of this Prospectus Supplement and to certain dealers at such price
less a concession not in excess of .50% of the principal amount of the Notes.
The Underwriters may allow, and such dealers may reallow, a discount not in
excess of .25% of the principal amount of the Notes to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.
There is no public trading market for the Notes and the Company does not
intend to apply for listing of the Notes on any national securities exchange or
for quotation of the Notes on any automated dealer quotation system. The Company
has been advised by the Underwriters that they presently intend to make a market
in the Notes after the consummation of the offering contemplated hereby,
although they are under no obligation to do so and may discontinue any
market-making activities at any time without any notice. No assurance can be
given as to the liquidity of the trading market for the Notes or that an active
public market for the Notes will develop. If an active public trading market for
the Notes does not develop, the market price and liquidity of the Notes may be
adversely affected. If the Notes are traded, they may trade at a discount from
their initial offering price, depending on prevailing interest rates, the market
for similar and other type of securities, the performance of the Company and
certain other factors.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments that the Underwriters may be required to make in
respect thereof.
Until the distribution of the Notes is completed, rules of the Commission
may limit the ability of the Underwriters and certain selling group members to
bid for and purchase the Notes. As an exception to these rules, the Underwriters
are permitted to engage in certain transactions that stabilize the price of the
Notes. Such transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Notes.
If the Underwriters create a short position in the Notes in connection with
the offering (i.e., if they sell more Notes than are set forth on the cover page
of this Prospectus Supplement), the Underwriters may reduce that short position
by purchasing Notes in the open market.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Notes. In addition, neither the
Company nor any of the Underwriters makes any representation that the
S-15
<PAGE>
Underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
From time to time the Underwriters and certain of their affiliates have
engaged, and may in the future engage, in transactions with, and perform
services for, the Company and its affiliates in the ordinary course of business.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the Company
by Foley & Lardner, Milwaukee, Wisconsin, and certain legal matters will be
passed upon for the Underwriters by Skadden, Arps, Slate, Meagher & Flom
(Illinois), Chicago, Illinois. Foley & Lardner and Skadden, Arps, Slate, Meagher
& Flom (Illinois) will rely on Woods & Aitken, Lincoln, Nebraska, with respect
to matters of Nebraska corporate law.
S-16
<PAGE>
PROSPECTUS
ALIANT COMMUNICATIONS INC.
$250,000,000
DEBT SECURITIES
---------------------
Aliant Communications Inc. ("Aliant" or the "Company") may offer and sell,
from time to time, debentures, notes and/or other unsecured evidences of
indebtedness (the "Debt Securities") at an aggregate initial offering price not
to exceed U.S. $250,000,000 or its equivalent in any other currency or units
based on or relating to foreign currencies. The Debt Securities will be senior,
unsecured indebtedness of the Company and senior to subordinated indebtedness.
The Debt Securities will be structurally subordinated to all existing and future
liabilities, including trade payables, of the Company's subsidiaries. The Debt
Securities may be offered in one or more series in amounts, at prices and on
terms to be determined at the time of sale. When a particular series of Debt
Securities is offered (the "Offered Securities"), a supplement to this
Prospectus (the "Prospectus Supplement"), will be delivered with this
Prospectus, setting forth, with respect to such Offered Securities, the specific
designation, aggregate principal amount, original issue discount, if any,
denomination (which may be in United States dollars, in any other currency or in
units based on or relating to foreign currencies), maturity, interest rate
(which may be fixed or variable) and time of payment of interest, if any, any
terms for redemption at the option of Aliant or the holder, any terms for
sinking fund payments, any listing on a securities exchange, the initial public
offering price and any other terms in connection with the offering and sale of
the Offered Securities.
The Debt Securities may be issued in registered form, without coupons, in
bearer form with coupons attached or both. In addition, all or a portion of the
Debt Securities of any series may be issuable in temporary or permanent
registered global form which will be exchangeable only under certain conditions
for definitive Debt Securities.
Aliant may sell Debt Securities to or through underwriters or dealers, and
also may sell Debt Securities to other purchasers, directly or through agents.
An accompanying Prospectus Supplement will set forth the names of any
underwriters, dealers or agents involved in the sale of the Offered Securities,
the principal amounts, if any, to be purchased by underwriters and the
compensation of such underwriters, dealers or agents. See "Plan of
Distribution."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement applicable to the Offered
Securities.
------------------------
The date of this Prospectus is February 23, 1998.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER
THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY ANY DEBT SECURITIES OTHER THAN THE
REGISTERED DEBT SECURITIES TO WHICH IT RELATES. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SUCH DEBT SECURITIES TO ANY PERSON IN ANY JURISDICTION TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
Aliant is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; New York Regional Office, Public Reference Room, 7 World
Trade Center, 13th Floor, New York, New York 10048; and Chicago Regional Office,
Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Aliant's Common Shares are listed for quotation on the Nasdaq National
Market. The Company is subject to the electronic filing requirements of the
Commission. Accordingly, pursuant to the rules and regulations of the
Commission, certain documents, including annual and quarterly reports and proxy
statements, filed by the Company with the Commission have been and will be filed
electronically. The Commission maintains a Web site at http://www.sec.gov
containing reports, proxy and information statements and other information
regarding registrants, including the Company, that file electronically with the
Commission.
This Prospectus constitutes a part of a Registration Statement on Form S-3
filed by Aliant with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to Aliant
and the Debt Securities. The Registration Statement and any amendments thereto,
including exhibits filed as a part thereof, are available for inspection and
copying as set forth above. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
2
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by Aliant with the Commission under
the Exchange Act are incorporated herein by reference: (a) the Company's Annual
Report on Form 10-K for the year ended December 31, 1996, (b) the Company's
Quarterly Report for the period ended March 31, 1997, (c) the Company's
Quarterly Report for the period ended June 30, 1997, (d) the Company's Quarterly
Report for the period ended September 30, 1997, (e) the Company's Current Report
on Form 8-K dated November 18, 1997 and (f) the Company's Current Report on Form
8-K dated December 19, 1997.
All documents filed by Aliant pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes hereof to the extent that a
statement contained herein (or in any other subsequently filed document which
also is incorporated by reference herein) modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed to constitute a part
hereof, except as so modified or superseded. All information appearing in this
Prospectus is qualified in its entirety by the information and financial
statements (including notes thereto) appearing in the documents incorporated
herein by reference.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER THAN EXHIBITS THERETO) ARE
AVAILABLE, WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST BY ANY PERSON TO WHOM
THIS PROSPECTUS HAS BEEN DELIVERED, FROM THE INVESTOR RELATIONS CENTER, ALIANT
COMMUNICATIONS INC., 1440 M STREET, LINCOLN, NEBRASKA 68508 (TELEPHONE
1-800-550-2568).
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Prospectus and the accompanying Prospectus Supplement, including
documents incorporated by reference herein, may contain "forward-looking"
statements, as defined in the Private Securities Litigation Reform Act of 1995.
All statements, other than historical facts, that address activities, events, or
developments that the Company expects, believes or anticipates will or may occur
in the future, including such things as expansion and growth of the Company's
business, acquisitions, future capital expenditures and the Company's business
strategy are forward-looking statements. These statements contain potential
risks and uncertainties; therefore, actual results may differ materially. The
Company undertakes no obligation to update publicly any forward-looking
statements whether as a result of new information, future events or otherwise.
Important assumptions and other important factors that could cause actual
results to differ from those set forth in the forward-looking information
include, but are not limited to: changes in the national and local economic and
market conditions; demographic changes; the size and growth of the overall
telecommunications market; changes in competition in markets in which the
Company operates; advances in telecommunications technology; changes in the
telecommunications regulatory environment; the need for regulatory approval to
make acquisitions or undertake certain other activities, including rate
re-balancing; changes in business strategy or development plans; pending and
future litigation; availability of future financing; start-up of Personal
Communications Services operations; new product and service development and
introductions; changes in consumer preferences; and unanticipated changes in
growth in cellular customers, penetration rates, churn rates and the mix of
products and services offered in the Company's markets. GIVEN SUCH
UNCERTAINTIES, PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE
ON SUCH FORWARD-LOOKING STATEMENTS.
3
<PAGE>
THE COMPANY
Aliant Communications Inc., formerly Lincoln Telecommunications Company, is
a diversified communications company providing retail products and services to
consumers, businesses, educational institutions and government agencies as well
as wholesale network services to other communications companies. Consistent with
its strategy of providing one-stop, single source communications services, the
Company offers local and long distance services, wireless services, enhanced
services, directory services, communications systems and equipment and a full
range of data communications services.
The Company's executive offices are located at 1440 M Street, Lincoln,
Nebraska 68508. Its telephone number is (402) 474-2211.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Debt Securities for
general corporate purposes, including working capital, the repayment or
refinancing of indebtedness, acquisitions and/or capital expenditures. Pending
application of the net proceeds for specific purposes, such proceeds may be
invested in short-term or marketable securities.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges for each of the years ended December 31, 1993 through 1997.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------
1997 1996 1995 1994 1993
- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
9.04x 8.52x 6.40x 8.48x 6.96x
</TABLE>
For purposes of calculating this ratio, earnings consist of net income from
continuing operations before taxes. Fixed charges consist of interest expenses,
dividends paid on the 5% redeemable preferred stock of the Company's subsidiary,
Aliant Telecommunications Co., and the estimated interest portion of rentals.
The ratio of earnings to fixed charges for 1995 reflects a non-recurring,
non-cash charge of $21,611,000 relating to two workforce restructuring programs.
Excluding this charge, the Company's ratio of earnings to fixed charges for 1995
would have been 8.74x.
4
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture dated as of February
23, 1998 (the "Indenture") between Aliant and U.S. Bank National Association, as
Trustee (the "Trustee"), the form of which is incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is a part. The
following statements with respect to the Indenture and the Debt Securities are
brief summaries of certain provisions of the Indenture and do not purport to be
complete. Such statements are subject to the detailed referenced provisions of
the Indenture, including the definitions of capitalized terms used under this
caption. Wherever particular sections or defined terms of the Indenture are
referred to, such sections or defined terms are incorporated herein by reference
as part of the statement made, and the statement is qualified in its entirety by
such reference. References to "Aliant" in this section, unless the context
indicates otherwise, are to Aliant Communications Inc. and not its subsidiaries
or any other entities in which it holds an interest.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities (which may include debentures, notes and other unsecured evidences of
indebtedness) which may be issued thereunder, and Debt Securities may be issued
thereunder from time to time in one or more series and may be denominated and
payable in foreign currencies or units based on or relating to foreign
currencies, including European Currency Units. Special United States federal
income tax considerations applicable to any Debt Securities so denominated will
be described in the Prospectus Supplement relating thereto. Unless otherwise
indicated in the applicable Prospectus Supplement, the Indenture also permits
Aliant to increase the principal amount of any series of Debt Securities
previously issued and to issue such increased principal amount. (Section 2.3)
The Prospectus Supplement will set forth the following terms relating to the
Offered Securities: (1) the specific designation of the Offered Securities; (2)
any limit on the aggregate principal amount of the Offered Securities; (3) the
date or dates, if any, on which the Offered Securities will mature; (4) the rate
or rates per annum (which may be fixed or variable) at which the Offered
Securities will bear interest, if any, the date or dates on which any such
interest will be payable and the Record Dates for any interest payable on the
Offered Securities which are Registered Securities; (5) original issue discount,
if any; (6) any mandatory or optional redemption or sinking fund provisions,
including the period or periods within which, the price or prices at which and
the terms and conditions upon which the Offered Securities may be redeemed or
purchased at the option of Aliant or otherwise; (7) whether the Offered
Securities will be issuable in registered form or bearer form or both, and, if
issuable in bearer form, the restrictions as to the offer, sale and delivery of
the Offered Securities in bearer form and as to exchanges between registered and
bearer form; (8) whether the Offered Securities will be issuable in the form of
one or more temporary or permanent Global Securities and, if so, the identity of
the Depositary for such Global Securities; (9) the denominations of $1,000 and
any multiple thereof, and the denominations in which any of the Offered
Securities which are in bearer form will be issuable, if other than the
denominations of $1,000 and $5,000; (10) each office or agency where the
principal of and any premium and interest on the Offered Securities will be
payable, and each office or agency where the Offered Securities may be presented
for registration of transfer or exchange; (11) if other than United States
dollars, the foreign currency or the units based on or relating to foreign
currencies in which the Offered Securities are denominated and/or in which the
payment of the principal of and any premium and interest on the Offered
Securities will or may be payable; (12) certain United States federal income tax
consequences, if applicable; and (13) any other terms of the Offered Securities
(which terms shall not adversely affect the interests of any Holders of Debt
Securities then Outstanding), including additions to or deletions from the
covenants and events of default with respect to the Offered Securities.
Debt Securities may be issued under the Indenture bearing no interest or
interest at a rate below the prevailing market rate at the time of issuance, to
be offered and sold at a discount below their stated
5
<PAGE>
principal amount. United States federal income tax consequences and other
special considerations applicable to any such discounted Debt Securities or to
other Debt Securities offered and sold at par which are treated as having been
issued at a discount for United States federal income tax purposes will be
described in the Prospectus Supplement relating thereto.
The Debt Securities and any coupons appertaining thereto will be unsecured
and will rank PARI PASSU with all other unsecured and unsubordinated
indebtedness of Aliant. However, since Aliant is a holding company, the right of
Aliant, and hence the right of the creditors of Aliant (including the Holders of
Debt Securities), to participate in any distribution of the assets of any
subsidiary, upon its liquidation or reorganization or otherwise, is necessarily
subject to the prior claims of creditors of such subsidiary, except to the
extent that claims of Aliant as a creditor of such subsidiary may be recognized.
There is no restriction in the Indenture against subsidiaries of Aliant
incurring secured or unsecured indebtedness or issuing secured or unsecured
securities. The ability of Aliant to make payments of principal and interest on
the Debt Securities will be dependent upon the payment to it by its subsidiaries
of dividends, distributions, loans or advances.
The Indenture does not contain covenants or other provisions designed to
afford Holders of Debt Securities protection in the event of a highly leveraged
transaction, change in credit rating or other similar occurrence.
EXCHANGE AND TRANSFER
Debt Securities may be presented for exchange and registered Debt Securities
may be presented for registration of transfer at the offices, and subject to the
restrictions, set forth therein and in the applicable Prospectus Supplement,
without service charge, but upon payment of any taxes or other governmental
charges due in connection therewith, subject to any applicable limitations
contained in the Indenture. Aliant has appointed the Trustee as Security
Registrar. Debt Securities in bearer form and the coupons appertaining thereto,
if any, will be transferable by delivery. (Sections 2.8 and 3.2)
PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of the principal of and the premium and interest, if any, on all Debt Securities
(other than a Registered Global Security) in registered form will be made at the
office or agency of the Trustee in the Borough of Manhattan, The City of New
York, except that, at the option of Aliant, payment of any interest may be made
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer to an
account maintained by the Person entitled thereto as specified in the Security
Register. (Sections 3.1 and 3.2) Unless otherwise indicated in the applicable
Prospectus Supplement, payment of any interest due on Debt Securities in
registered form will be made to the Persons in whose name such Registered
Securities are registered at the close of business on the Record Date for such
interest payments. (Section 2.7)
REGISTERED GLOBAL SECURITIES
The registered Debt Securities of a particular series may be issued in the
form of one or more Registered Global Securities which will be deposited with a
Depositary, or its nominee, each of which will be identified in the Prospectus
Supplement relating to such series. Unless and until exchanged, in whole or in
part, for Securities in definitive registered form, a Registered Global Security
may not be transferred except as a whole by the Depositary for such Registered
Global Security to a nominee of such Depositary, by a nominee of such Depositary
to such Depositary or another nominee of such Depositary or by such Depositary
or any such nominee to a successor of such Depositary or a nominee of such
successor. (Section 2.8)
6
<PAGE>
The specific terms of the depositary arrangement with respect to any portion
of a particular series of Debt Securities to be represented by a Registered
Global Security will be described in the Prospectus Supplement relating to such
series. Aliant anticipates that the following provisions will apply to all
depositary arrangements:
Upon the issuance of a Registered Global Security, the Depositary therefor
or its nominee will credit, on its book entry and registration system, the
respective principal amounts of the Debt Securities represented by such
Registered Global Security to the accounts of such persons having accounts with
such Depositary ("participants") as shall be designated by the underwriters or
agents participating in the distribution of such securities, or by Aliant if
such Debt Securities are offered and sold directly by Aliant. Ownership of
beneficial interests in a Registered Global Security will be limited to
participants or persons that may hold beneficial interests through participants.
Ownership of beneficial interests in a Registered Global Security will be shown
on, and the transfer of such ownership will be effected only through, records
maintained by the Depositary therefor or its nominee (with respect to beneficial
interests of participants) or by participants or persons that hold through
participants (with respect to interests of persons other than participants). The
laws of some states require certain purchasers of securities to take physical
delivery thereof in definitive form. Such depositary arrangements and such laws
may impair the ability to transfer beneficial interests in a Registered Global
Security.
So long as the Depositary for a Registered Global Security or its nominee is
the registered owner thereof, such Depositary or such nominee, as the case may
be, will be considered the sole owner or Holder of the Debt Securities
represented by such Registered Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a
Registered Global Security will not be entitled to have Debt Securities of the
series represented by such Registered Global Security registered in their names,
will not receive or be entitled to receive physical delivery of Debt Securities
of such series in definitive form and will not be considered the owners or
Holders thereof under the Indenture.
Principal, premium, if any, and interest payments on a Registered Global
Security registered in the name of a Depositary or its nominee will be made to
such Depositary or nominee, as the case may be, as the registered owner of such
Registered Global Security. None of Aliant, the Trustee or any paying agent for
Debt Securities of the series represented by such Registered Global Security
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial interests in such Registered Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial interests.
Aliant expects that the Depositary for a Registered Global Security or its
nominee, upon receipt of any payment of principal, premium or interest, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amounts of such
Registered Global Security as shown on the records of such Depositary or its
nominee. Aliant also expects that payments by participants to owners of
beneficial interests in such Registered Global Security held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in "street name," and will be the responsibility of such participants.
If the Depositary for a Registered Global Security representing Debt
Securities of a particular series is at any time unwilling or unable to continue
as Depositary and a successor Depositary is not appointed by Aliant within 90
days, Aliant will issue Debt Securities of such series in definitive form in
exchange for such Registered Global Security. In addition, Aliant may, at any
time and in its sole discretion, determine not to have the Debt Securities of a
particular series represented by one or more Registered Global Securities and,
in such event, will issue Debt Securities of such series in definitive form in
exchange for all of the Registered Global Securities representing Debt
Securities of such series.
7
<PAGE>
CERTAIN COVENANTS OF ALIANT
Under the Indenture, Aliant has agreed that it will not engage in certain
transactions, as described below.
LIMITATION ON SECURED DEBT. Neither Aliant nor any Restricted Subsidiary
will create, assume, incur or guarantee any Secured Debt without effectively
providing that Debt Securities (together with, if Aliant shall so determine, any
other Debt of or guaranteed by Aliant ranking equally with the Debt Securities)
shall be secured equally and ratably with (or, at the option of Aliant, prior
to) such Secured Debt, with certain stated exceptions. These exceptions permit
(a) Secured Debt (i) in respect of Liens on Property existing at the time such
Property is acquired by Aliant or any Restricted Subsidiary, (ii) in respect of
Liens created upon or within 270 days following the acquisition or construction
of Property (including any improvements to existing Property) to secure the
payment of all or part of the purchase or construction price thereof, or (iii)
incurred by Aliant or any Restricted Subsidiary prior to, at the time of or
within 270 days following the acquisition of Property which is subject to a
related Lien, which Secured Debt is incurred for the purpose of financing all or
part of the purchase price thereof, provided that no such Lien applies to any
Property theretofore owned by Aliant or any Restricted Subsidiary (including
Property transferred by Aliant to any Subsidiary or from any Restricted
Subsidiary to Aliant or another Subsidiary in contemplation of or in connection
with the creation of such Lien) or to any Property of Aliant or any Restricted
Subsidiary other than the Property so acquired (other than, in the case of
construction or improvement, any theretofore unimproved real Property or portion
thereof on which the Property so constructed, or the improvement, is located);
(b) Secured Debt in respect of Liens on Property of a Person (i) existing at the
time such Person is merged into or consolidated with Aliant or any Restricted
Subsidiary or at the time of a sale, lease or other disposition of the
properties of a Person as an entirety or substantially as an entirety to Aliant
or any Restricted Subsidiary, (ii) resulting from such merger, consolidation,
sale, lease or disposition by virtue of any Lien on Property granted by Aliant
or any Restricted Subsidiary prior to such merger, consolidation, sale, lease or
disposition (and not in contemplation thereof or in connection therewith) which
applies to after-acquired Property of Aliant or any Restricted Subsidiary or
(iii) resulting from such merger, consolidation, sale, lease or disposition
pursuant to a Lien or contractual provision granted or entered into by such
Person prior to such merger, consolidation, sale, lease or disposition (and not
at the request of Aliant); PROVIDED, HOWEVER, that any such Lien referred to in
clause (i) shall not apply to any Property of Aliant or any Restricted
Subsidiary other than the Property subject thereto at the time such Person or
properties were acquired and any such Lien referred to in clause (ii) or (iii)
shall not apply to any Property of Aliant or any Restricted Subsidiary other
than the Property so acquired; (c) Liens existing at the date of the Indenture;
(d) Liens in favor of a government or governmental entity to secure partial
progress, advance or other payments, or other obligations, or to secure any Debt
incurred for the purpose of financing all or any part of the cost of acquiring,
constructing or improving the Property subject thereto (including, without
limitation, Liens incurred in connection with industrial revenue, pollution
control, private activity bond or similar financing); (e) Liens arising by
reason of deposits with, or the giving of any form of security to, any
governmental agency or any body created or approved by law or governmental
regulation, which Lien is required by law or governmental regulation as a
condition to the transaction of any business or the exercise of any privilege,
franchise, license or permit; (f) Liens for taxes, assessments or governmental
charges or levies not yet delinquent or governmental charges or levies already
delinquent, the validity of which charge or levy is being contested in good
faith and for which any reserves required in accordance with generally accepted
accounting principles have been established; (g) Judgment liens for which
execution thereon is stayed and for which any reserves required in accordance
with generally accepted accounting principles have been established; and (h)
Secured Debt secured by any extension, renewal or replacement (or successive
extensions, renewals or replacements) of any Liens referred to in the foregoing
clauses (a) to (g), inclusive (provided that the principal amount of Secured
Debt secured thereby does not exceed the principal amount of such Debt
immediately prior to such extension, renewal or replacement, and that any
8
<PAGE>
Lien created in connection therewith is limited to all or part of the Property
(plus improvements to such Property) which secured the Secured Debt so extended,
renewed or replaced). (Section 3.6)
The foregoing restrictions do not apply if, immediately after the incurrence
of such Secured Debt (giving effect to the application of the proceeds
therefrom), the aggregate principal amount of Secured Debt (other than Secured
Debt described in clauses (a) to (h), inclusive, of the immediately preceding
paragraph), plus the aggregate amount of Capitalized Rent in respect of Sale and
Leaseback Transactions (other than Sale and Leaseback Transactions the proceeds
of which are or will be applied as described in clauses (a) to (e) inclusive,
under "Limitation on Sale and Leaseback Transactions" below), would not exceed
10% of Consolidated Capitalization. (Sections 1.1 and 3.6)
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. Neither Aliant nor any
Restricted Subsidiary will enter into any Sale and Leaseback Transaction unless,
immediately after the completion of such Sale and Leaseback Transaction (giving
effect to the application of the proceeds therefrom), the aggregate amount of
Capitalized Rent in respect of Sale and Leaseback Transactions (other than Sale
and Leaseback Transactions described in clauses (a) to (e), inclusive, of the
immediately succeeding paragraph), plus the aggregate principal amount of
Secured Debt (other than Secured Debt described in clauses (a) to (h),
inclusive, under "Limitation on Secured Debt" above), would not exceed 10% of
Consolidated Capitalization. (Section 3.7)
The foregoing restrictions do not apply to, and there shall be excluded in
computing the aggregate amount of Capitalized Rent for the purpose of such
restrictions, the following Sale and Leaseback Transactions: (a) any Sale and
Leaseback Transaction entered into to finance the payment of all or any part of
the purchase price of Property acquired or constructed by Aliant or any
Restricted Subsidiary (including any improvements to existing Property) or
entered into prior to, at the time of or within 270 days after the acquisition
or construction of such Property, which Sale and Leaseback Transaction is
entered into for the purpose of financing all or part of the purchase or
construction price thereof; PROVIDED, HOWEVER, that in the case of any such
acquisition, such Sale and Leaseback Transaction shall not involve any Property
transferred by Aliant to a Subsidiary or by a Restricted Subsidiary to Aliant or
to another Subsidiary thereof in contemplation of or in connection with such
Sale and Leaseback Transaction or involve any Property of Aliant or any
Restricted Subsidiary other than the Property so acquired (other than, in the
case of construction or improvement, any theretofore unimproved real property or
portion thereof on which the Property so constructed, or the improvement, is
located); (b) any Sale and Leaseback Transaction involving Property of a Person
existing at the time such Person is merged into or consolidated with Aliant or
any Restricted Subsidiary or at the time of a sale, lease or other disposition
of the properties of a Person as an entirety or substantially as an entirety to
Aliant or any Restricted Subsidiary; (c) any Sale and Leaseback Transaction in
which the lessor is a government or governmental entity and which Sale and
Leaseback Transaction is entered into to secure partial progress, advance or
other payments, or other obligations, pursuant to any contract or statute or to
secure any Debt incurred for the purpose of financing all or any part of the
cost of constructing or improving the Property subject to such Sale and
Leaseback Transaction (including, without limitation, Sale and Leaseback
Transactions incurred in connection with pollution control, industrial revenue,
private activity bond or similar financing); (d) any Sale and Leaseback
Transaction involving the extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of a lease pursuant
to a Sale and Leaseback Transaction referred to in the foregoing clauses (a) to
(c), inclusive; PROVIDED, HOWEVER, that such lease extension, renewal or
replacement shall be limited to all or any part of the same Property leased
under the lease so extended, renewed or replaced (plus improvements to such
Property); and (e) any Sale and Leaseback Transaction the net proceeds of which
are at least equal to the fair value (as determined by the Board of Directors of
Aliant) of the Property leased pursuant to such Sale and Leaseback Transaction,
so long as within 270 days of the effective date of such Sale and Leaseback
Transaction, Aliant or any Restricted Subsidiary applies (or irrevocably commits
to an escrow account for the purpose or purposes hereinafter mentioned) an
amount equal to the net proceeds of such Sale and Leaseback Transaction to
either (x) the purchase of
9
<PAGE>
other Property having a fair value at least equal to the fair value of the
Property leased in such Sale and Leaseback Transaction and having a similar
utility and function, or (y) the retirement or repayment (other than any
mandatory retirement or repayment at maturity) of Debt Securities; PROVIDED,
HOWEVER, that in lieu of applying an amount equivalent to all or any part of
such net proceeds to such retirement or repayment (or committing such an amount
to an escrow account for such purpose), Aliant may deliver to the Trustee
Outstanding Securities and thereby reduce the amount to be applied pursuant to
(y) of this clause (e) by an amount equivalent to the aggregate principal amount
of the Debt Securities so delivered. (Section 3.7)
In addition, under the Indenture, Aliant has agreed to certain other
covenants including:
EXISTENCE. Except as described above under "Consolidation, Merger or Sale
of Assets", Aliant will be required to do or cause to be done all things
necessary to preserve and kept in full force and effect its existence, rights
(charter and statutory) and franchises; provided, however, that Aliant shall not
be required to preserve any right of franchise if it determines that the
preservation thereof is no longer desirable in the conduct of its business and
that the loss thereof is not disadvantageous in any material respect to the
holders of the Debt Securities (Section 3.8).
MAINTENANCE OF PROPERTIES. Aliant will be required to cause all of its
material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times (Section 3.9).
INSURANCE. Aliant will be required to, and will be required to cause each
of its Subsidiaries to, keep all of its insurable properties insured against
loss or damage at least equal to their then full insurable value with
financially sound and reputable insurers. (Section 3.10).
PAYMENT OF TAXES AND OTHER CLAIMS. Aliant will be required to pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or Property of
Aliant or any Subsidiary, and (b) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the Property of
Aliant or any Subsidiary; provided, however, that Aliant shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings (Section 3.11).
CERTAIN DEFINITIONS
"CAPITAL STOCK" means and includes any and all shares, interests,
participations or other equivalents (however designated) of ownership in a
corporation or other Person.
"CAPITALIZATION" means, with respect to a Person, the total of (a) Funded
Debt, (b) the par value or, in the case of Capital Stock with no par value, a
value stated on the books, of all outstanding shares of Capital Stock, (c) the
paid-in surplus and retained earnings (or minus the net surplus deficit, as the
case may be), (d) deferred taxes and deferred investment tax credits, (e)
Capitalized Rent, and (f) minority interests in subsidiaries of such Person.
10
<PAGE>
"CAPITALIZED RENT" means the present value (discounted semi-annually at a
discount rate equal to the weighted average rate of interest borne by the Debt
Securities then Outstanding) of the total net amount of rent payable for the
remaining term of any lease of Property by Aliant or any Subsidiary (including
any period for which such lease has been extended); PROVIDED, HOWEVER, that no
such rental obligation shall be deemed to be Capitalized Rent unless the lease
resulted from a Sale and Leaseback Transaction. The total net amount of rent
payable under any lease for any period shall be the total amount of the rent
payable by the lessee with respect to such period but shall not include amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water rates, sewer rates and similar charges.
"CONSOLIDATED CAPITALIZATION" means the Capitalization of Aliant and its
Subsidiaries, determined on a consolidated basis, at the end of Aliant's then
most recently reported fiscal year or quarter, as the case may be, including
minority interests in Subsidiaries.
"DEBT" means, with respect to a Person, all obligations of such Person for
borrowed money which is created, assumed, incurred or guaranteed in any manner
by such Person or for which such Person is otherwise liable.
"FUNDED DEBT" means any Debt maturing by its terms more than one year from
its date of issuance (notwithstanding that any portion of such Debt is included
in current liabilities).
"LIEN" means any mortgage, pledge, security interest, lien, charge or other
encumbrance.
"OUTSTANDING" means, subject to certain exceptions, all Debt Securities
issued under the Indenture, except those theretofore canceled by the Trustee or
delivered to it for cancellation, defeased in accordance with the Indenture,
paid in full, or in respect of which substitute Debt Securities have been
authenticated and delivered by the Trustee.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"PROPERTY" means any directly-held interest of a Person in any kind of
property or asset, whether real, personal or mixed and whether tangible or
intangible, and includes Capital Stock of a subsidiary or other Person.
"RESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Company which has
substantially all its property in the United States, which owns or is a lessee
of any Property and in which the investment of the Company and all its
Subsidiaries exceeds 2% of Consolidated Capitalization as of the date of such
determination, and (b) any Subsidiary which is designated by Aliant (evidenced
by a resolution of the Board of Directors) to be a Restricted Subsidiary;
provided, however, that Aliant may not designate any such Subsidiary to be a
Restricted Subsidiary if Aliant would thereby breach any covenant or agreement
contained in the Indenture (on the assumption that any transaction to which such
Subsidiary was a party at the time of such designation and which would have
given rise to a Secured Debt, or constituted a Sale and Leaseback Transaction at
the time it was entered into had such Subsidiary then been a Restricted
Subsidiary was entered into at the time of such designation).
"SALE AND LEASEBACK TRANSACTION" means any arrangement with any Person,
providing for the leasing (as lessee) by Aliant or any Restricted Subsidiary of
any Property whether now or hereafter acquired (except for temporary leases for
a term, including any renewal thereof, of not more than three years), which
Property has been or is to be sold or transferred by Aliant or such Restricted
Subsidiary (i) to any Subsidiary in contemplation of or in connection with such
arrangement; or (ii) to such other Person.
"SECURED DEBT" means Debt of Aliant or any Restricted Subsidiary secured by
any Lien on Property (including Capital Stock or indebtedness of Subsidiaries)
owned by Aliant or any Restricted Subsidiary.
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"SUBSIDIARY" means a Person which is consolidated with Aliant in accordance
with generally accepted accounting principles.
EVENTS OF DEFAULT
The occurrence of any of the following events with respect to the Debt
Securities of any series will constitute an "Event of Default" with respect to
the Debt Securities of such series: (a) default for 30 days in the payment of
any interest on any of the Debt Securities of such series; (b) default in the
payment of any of the principal of or the premium, if any, on any of the Debt
Securities of such series, whether at maturity, upon redemption, by declaration
or otherwise; (c) default in the deposit of any sinking fund payment in respect
of any Debt Securities of such series; (d) default for 90 days by Aliant in the
observance or performance of any other covenant or agreement contained in the
Indenture relating to the Debt Securities of such series after written notice
thereof as provided in the Indenture; (e) (i) an event of default occurs under
any instrument under which there is outstanding, or by which there may be
secured or evidenced, any indebtedness of Aliant or any Restricted Subsidiary
for money borrowed (other than non-recourse indebtedness) which results in
acceleration of, or non-payment at maturity (after giving effect to any
applicable grace period) of such indebtedness in an aggregate amount exceeding
the greater of $10,000,000 or 10% of Consolidated Capitalization, in which case
Aliant shall immediately give notice to the Trustee of such acceleration or
non-payment, and (ii) there shall have been a failure to cure such default or to
discharge such indebtedness within ten days after notice thereof to Aliant by
the Trustee or to Aliant and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Debt Securities then Outstanding; or (f)
certain events of bankruptcy, insolvency or reorganization relating to Aliant.
(Section 5.1) Different Events of Default may be prescribed for the benefit of
the Holders of a particular series of Debt Securities and will be described in
the Prospectus Supplement relating thereto.
If an Event of Default due to a default in the payment of the principal of
or the premium or interest, if any, on, or in the deposit of any sinking fund
payment with respect to, any series of Debt Securities shall have occurred and
be continuing, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Debt Securities of such series then
Outstanding may declare the principal of all Debt Securities of such series and
the interest, if any, accrued thereon to be due and payable immediately. If an
Event of Default due to a default in the observance or performance of any other
covenant or agreement of Aliant contained in the Indenture and applicable to the
Debt Securities of one or more (but less than all) series then outstanding shall
have occurred and be continuing, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Debt Securities of the affected
series then Outstanding (voting as one class) may declare the principal of all
Debt Securities of each such affected series and the interest, if any, accrued
thereon to be due and payable immediately. If an Event of Default due to a
default in the observance or performance of any other covenant or agreement of
Aliant contained in the Indenture applicable to all Debt Securities then
Outstanding or due to the acceleration or non-payment at maturity of certain
indebtedness of Aliant or any Restricted Subsidiary shall have occurred and be
continuing, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of all Debt Securities then Outstanding (voting as one class)
may declare the principal of all Debt Securities and the interest, if any,
accrued thereon to be due and payable immediately. If an Event of Default due to
certain acts of bankruptcy, insolvency or reorganization of Aliant or any
Significant Subsidiary shall have occurred and be continuing, the principal and
interest on all the Debt Securities then Outstanding shall thereby become and be
immediately due and payable, without any declaration or other act on the part of
the Trustee or any Securityholders. Upon certain conditions, any such
declarations may be rescinded and annulled if all Events of Default, other than
the nonpayment of accelerated principal, with respect to the Debt Securities of
all such affected series then Outstanding shall have been cured or waived as
provided in the Indenture by the Holders of a majority in aggregate principal
amount of the Debt Securities of the affected series then Outstanding (voting as
one class, except in the case of Events of Default described in clauses (a), (b)
and (c) of the preceding paragraph, as to which each series so affected will
vote as a separate class). See "Modification of the Indenture" below. Reference
is made to the Prospectus
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<PAGE>
Supplement relating to any series of Original Issue Discount Securities for the
particular provisions relating to the acceleration of a portion of the principal
amount thereof upon the occurrence and continuance of an Event of Default with
respect thereto. (Section 5.1)
The Indenture provides that, subject to the duty of the Trustee to act with
the requisite standard of care, in case a default with respect to a series of
Debt Securities shall have occurred and be continuing, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at the
request, order or direction of the Holders of the Debt Securities, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Sections 5.6
and 6.2) Subject to such provisions for indemnity and certain other limitations
contained in the Indenture, the Holders of a majority in aggregate principal
amount of the Debt Securities of each affected series then Outstanding will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Debt Securities of such affected series.
(Section 5.9)
The Indenture provides that no Holder of Securities may institute any action
against Aliant under the Indenture (except actions for payment of overdue
principal, premium or interest) unless such Holder previously shall have given
to the Trustee written notice of default and continuance thereof and unless the
Holders of not less than 25% in aggregate principal amount of the Debt
Securities of the affected series then Outstanding (voting as one class) shall
have requested the Trustee to institute such action and shall have offered the
Trustee reasonable indemnity, the Trustee shall not have instituted such action
within 60 days of such request and the Trustee shall not have received direction
inconsistent with such request by the Holders of a majority in aggregate
principal amount of the Debt Securities of the affected series then Outstanding
(voting as one class). (Sections 5.6 and 5.9)
CONSOLIDATION, MERGER OR SALE OF ASSETS
Aliant may consolidate with or merge into, or sell, lease or convey its
Property as an entirety or substantially as an entirety to, any other entity if
(a) such entity assumes the obligations of Aliant under the Debt Securities and
the Indenture; (b) such entity is organized and existing under the laws of the
United States or any state thereof or the District of Columbia; (c) upon request
by the Trustee, Aliant delivers to the Trustee certain certificates and opinions
specified in the Indenture; (d) immediately after giving effect to such
transaction (and treating any Secured Debt or Sale and Leaseback Transaction
which becomes an obligation of the resulting, surviving or transferee Person as
a result of such transaction as having been incurred or entered into by such
Person at the time of such transaction), no Event of Default (or event which,
after notice or lapse of time or both, would be an Event of Default) shall exist
and (e) upon such consolidation, merger, sale, lease or conveyance any Property
owned by Aliant or any Restricted Subsidiary immediately prior thereto would
become subject to any Lien (unless such Lien would be permitted by the
provisions described above under "Limitation on Secured Debt"), the Debt
Securities must be secured (together with, if Aliant shall so determine, any
other Debt ranking on a parity with or prior to the Debt Securities incurred,
assumed or guaranteed by Aliant, whether then or thereafter existing) by a
direct Lien on such Property prior to all Liens other than any theretofore
existing thereon. (Sections 9.1 and 9.2). The covenant phrase "substantially as
an entirety" is not defined in the Indenture, and Aliant is unaware of an
established meaning or quantification of the phrase under New York law, which is
the law governing construction of the Indenture. A Holder may bear the burden of
establishing the meaning of the phrase "substantially as an entirety."
MODIFICATION OF THE INDENTURE
The Indenture permits Aliant and the Trustee to enter into supplemental
indentures without the consent of the Holders of the Debt Securities to: (a)
subject to compliance with Aliant's covenants described above under "Certain
Covenants of Aliant--Limitation on Secured Debt," secure the Debt Securities of
one or more series, (b) add guaranties with respect to the Debt Securities of
one or more
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<PAGE>
series, (c) evidence the assumption by a successor Person of the obligations of
Aliant under the Indenture and the Debt Securities then Outstanding, (d) add
covenants for the protection of the Holders of the Debt Securities, (e) cure any
ambiguity or correct any inconsistency in the Indenture, provided that no such
action shall adversely affect the interests of the Holders of the Debt
Securities of any series, (f) establish the form and terms of the Debt
Securities of any series, (g) evidence the acceptance of appointment by a
successor Trustee, (h) subject to compliance with certain requirements of the
Indenture, provide for uncertificated Securities in addition to or in place of
certificated Securities and (i) comply with any requirements of the Commission
in connection with qualifying the Indenture under the Trust Indenture Act of
1939, as amended. (Section 8.1)
The Indenture also permits Aliant and the Trustee, with the consent of the
Holders of not less than a majority in aggregate principal amount of the Debt
Securities of all series then Outstanding and affected (voting as one class), to
add any provisions to, or change in any manner or eliminate any of the
provisions of, the Indenture or modify in any manner the rights of the Holders
of the Debt Securities of each such affected series; PROVIDED, HOWEVER, that
Aliant and the Trustee may not, without the consent of the Holder of each
Security then Outstanding and affected thereby: (a) extend the time of payment
of the principal (or any installment) of any Security, or reduce the principal
amount thereof, or reduce the rate, alter the method of computation of the rate
or extend the time of payment of interest thereon, or reduce any amount payable
on the redemption thereof, or change the currency in which the principal thereof
or the interest thereon is payable, or reduce the amount payable on any Original
Issue Discount Security upon acceleration or provable in bankruptcy, or alter
certain provisions of the Indenture relating to Securities not denominated in
United States dollars, or impair the right to institute suit for the enforcement
of any payment on any Security when due; or (b) reduce the percentage in
principal amount of the Debt Securities of the affected series, the consent of
whose Holders is required for any such modification or for any waiver provided
for in the Indenture. (Section 8.2)
Prior to the acceleration of the maturity of any Debt Securities, the
Holders of a majority in aggregate principal amount of the Debt Securities of
all series at the time Outstanding with respect to which a default or an Event
of Default shall have occurred and be continuing (voting as one class) may, on
behalf of the Holders of all such affected Securities, waive any past default or
Event of Default and its consequences, except a default or an Event of Default
in respect of a covenant or provision of the Indenture or of any Security which
cannot be modified or amended without the consent of the Holder of each Security
affected.
DEFEASANCE AND DISCHARGE
The Indenture provides that, at the option of Aliant, (a) Aliant will be
discharged from any and all obligations in respect of the Debt Securities of a
particular series then Outstanding (except for certain obligations to register
the transfer of or exchange the Debt Securities of such series, to replace
stolen, lost or mutilated Securities of such series, to maintain paying
agencies, in the event that the Trustee is not the Security Registrar, to
furnish the Trustee with the names and addresses of the Holders of Registered
Securities of each series, to cause any successor Person substituted for Aliant
in accordance with the Indenture to assume Aliant's obligations thereunder and
with respect to the Securities, to comply with certain covenants described under
"Consolidation, Merger or Sale of Assets" and to maintain the trust described
below), or (b) Aliant need not comply with certain covenants of the Indenture
(including certain of those described under "Certain Covenants of Aliant" and
"Consolidation, Merger or Sale of Assets"), in each case if Aliant irrevocably
deposits in trust with the Trustee money, and/or securities of the government
which issued the currency in which the Debt Securities of such series are
payable or securities backed by the full faith and credit of such government
which, through the payment of the principal thereof and the interest thereon in
accordance with their terms, will provide money in an amount sufficient to pay
all the principal of (and premium, if any) and interest on the Debt Securities
of such series on the stated maturity of such Securities in accordance with the
terms thereof. To exercise such option, Aliant is
14
<PAGE>
required, among other things, to deliver to the Trustee an opinion of
independent counsel of nationally recognized standing in matters of federal
income tax law to the effect that the exercise of such option would not cause
the Holders of the Debt Securities of such series to recognize income, gain or
loss for United States federal income tax purposes as a result of such
defeasance, and such Holders will be subject to United States federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred, and, in the case of a discharge as
described in clause (a) of the preceding sentence, such opinion states that
either (A) there has been a change in the applicable federal income tax law to
the foregoing effect or (B) Aliant has received a private letter ruling from the
Internal Revenue Service or there has been published a revenue ruling to the
foregoing effect. (Section 10.1)
In the event Aliant exercises its option to effect a covenant defeasance
with respect to the Debt Securities of any series as described in the preceding
paragraph and the Debt Securities of such series are thereafter declared due and
payable because of the occurrence of any Event of Default other than an Event of
Default caused by failing to comply with the covenants which are defeased, and
the amount of money and securities on deposit with the Trustee would be
insufficient to pay amounts due on the Debt Securities of such series at the
time of their accelerated maturity, Aliant would remain liable for such amounts.
If the Trustee or paying agent is unable to apply any money or Government
Obligation in accordance with the foregoing provisions by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
Aliant's obligations under the Indenture and the Debt Securities shall be
revived and reinstated as though no deposit had occurred pursuant to such
provisions until such time as the Trustee or paying agent is permitted to apply
all such money or Government Obligations in accordance therewith; PROVIDED,
HOWEVER, that, if Aliant has made any payment of interest on or principal of any
Debt Securities because of the reinstatement of its obligations, Aliant shall be
entitled, at its election, (a) to receive from the Trustee or paying agent, as
applicable, that portion of such money or Government Obligations equal to the
amount of such payment or (b) to be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or Government Obligations
held by the Trustee or paying agent.
REDEMPTION OF DEBT SECURITIES
The Indenture provides that the Debt Securities may be redeemed at any time
at the option of Aliant, in whole or in part, at such price as provided for in
the Indenture or any indentures supplemental thereto (the "Redemption Price").
From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Debt Securities called for redemption shall have been
made available on such redemption date, such Debt Securities will cease to bear
interest on the date fixed for such redemption specified in such notice, and the
only right of the holders of the Debt Securities will be to receive payment of
the Redemption Price.
Notice of any optional redemption of any Debt Securities will be given to
Holders at their addresses, as shown in the Security Register, not more than 60
nor less than 30 days prior to the date fixed for redemption. The notice of
redemption will specify, among other items, the Redemption Price and the
principal amount of the Debt Securities held by such holder to be redeemed.
If Aliant elects to redeem Debt Securities, it will notify the Trustee at
least 45 days prior to the redemption date (or such shorter period as
satisfactory to the Trustee) of the aggregate principal amount of Debt
Securities to be redeemed and the redemption date. If less than all the Debt
Securities are to be redeemed, the Trustee shall select the Debt Securities to
be redeemed pro rata, by lot or in such manner as it shall deem fair and
appropriate.
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<PAGE>
GOVERNING LAW
The Indenture and the Debt Securities issued thereunder will be governed by
the laws of the State of New York.
CONCERNING THE TRUSTEE
U.S. Bank National Association, the trustee under the Indenture, is one of a
number of banks with which Aliant and its subsidiaries maintain ordinary banking
relationships.
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<PAGE>
PLAN OF DISTRIBUTION
Aliant may sell Debt Securities being offered hereby: (i) directly to
purchasers, (ii) through agents, (iii) through underwriters or dealers, or (iv)
through a combination of any such methods of sale.
The Prospectus Supplement relating to the particular series of Debt
Securities offered thereby will set forth the terms of the offering of such
series of Debt Securities, including the name or names of any underwriters,
dealers or agents, the purchase price of such Debt Securities, the proceeds to
the Company from such sale, any underwriting discounts and other items
constituting underwriters' or agents' compensation, any initial public offering
price, any discounts or sales agent commissions or concessions allowed or
reallowed or paid to dealers and any securities exchanges on which the Debt
Securities of such series may be listed.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Offers to purchase Debt Securities may be solicited by agents designated by
Aliant from time to time. Any such agent, who may be deemed to be an underwriter
as that term is defined in the Securities Act, involved in the offer or sale of
the Debt Securities in respect of which this Prospectus is delivered will be
named, and any commissions payable by Aliant to such agent will be set forth, in
the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
If underwriters are utilized in the sale, Aliant will execute an
underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the transaction will be set forth
in the Prospectus Supplement, which will be used by the underwriters to make
resales of the Debt Securities in respect of which this Prospectus is delivered
to the public. Any underwriters will acquire Debt Securities for their own
account and may resell such Debt Securities from time to time in one or more
transactions, including negotiated transactions, at fixed public offering prices
or at varying prices determined at the time of sale. Debt Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters, or directly by the managing underwriters. Only
underwriters named in the Prospectus Supplement are deemed to be underwriters in
connection with the Debt Securities offered thereby. If any underwriters are
utilized in the sale of the Debt Securities, the underwriting agreement will
provide that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a sale of Debt
Securities will be obligated to purchase all such Debt Securities, if any are
purchased. Any initial public offering price or concession allowed or reallowed
or paid to dealers may be changed from time to time.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, Aliant will sell such Debt Securities to the
dealer, as principal. The dealer may then resell such Debt Securities to the
public at varying prices to be determined by such dealer at the time of resale.
Agents, underwriters and dealers may be entitled, under agreements entered
into with Aliant, to indemnification by Aliant against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the agents, underwriters or dealers may be
required to make in respect thereof. Agents, underwriters and dealers may be
customers of, engage in transactions with, or perform services for Aliant in the
ordinary course of business.
Offers to purchase Debt Securities may be solicited directly by Aliant and
sales thereof may be made by Aliant directly to institutional investors or
others. The terms of any such sales will be described in the Prospectus
Supplement relating thereto.
If so indicated in the Prospectus Supplement, Aliant will authorize agents
and underwriters to solicit offers by certain institutions to purchase Debt
Securities from Aliant at the public offering price set forth
17
<PAGE>
in the Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date stated in the
Prospectus Supplement. Each Contract will be for an amount not less than, and
unless Aliant otherwise agrees the aggregate principal amount of Debt Securities
sold pursuant to Contracts shall be not less nor more than, the respective
amounts stated in the Prospectus Supplement. Institutions with whom Contracts,
when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but shall in all cases be subject to the
approval of Aliant. Contracts will not be subject to any conditions except as
set forth in the Prospectus Supplement. A commission indicated in the Prospectus
Supplement will be paid to underwriters and agents soliciting purchases of Debt
Securities pursuant to Contracts accepted by Aliant.
The place and time of delivery for the Debt Securities in respect of which
this Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
LEGAL MATTERS
Certain legal matters with respect to the Debt Securities of the Company
offered hereunder will be passed upon by Foley & Lardner, Milwaukee, Wisconsin.
EXPERTS
The audited consolidated financial statements of Aliant Communications Inc.
incorporated by reference in this Prospectus have been audited by KPMG Peat
Marwick LLP, independent public accountants, as indicated in their reports
incorporated by reference herein. Such financial statements have been
incorporated by reference in reliance on the reports of KPMG Peat Marwick LLP,
given on the authority of such firm as experts in auditing and accounting in
giving said reports.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Statement Regarding Forward-Looking Information........................... S-2
The Company............................................................... S-2
Use of Proceeds........................................................... S-6
Capitalization............................................................ S-7
Summary Consolidated Financial Information................................ S-8
Summary Operating Data.................................................... S-9
Certain Terms of the Notes................................................ S-10
Underwriting.............................................................. S-15
Legal Matters............................................................. S-16
PROSPECTUS
Available Information..................................................... 2
Documents Incorporated by Reference....................................... 3
Statement Regarding Forward-Looking Information........................... 3
The Company............................................................... 4
Use of Proceeds........................................................... 4
Consolidated Ratios of Earnings to Fixed Charges.......................... 4
Description of Debt Securities............................................ 5
Plan of Distribution...................................................... 17
Legal Matters............................................................. 18
Experts................................................................... 18
</TABLE>
$100,000,000
[LOGO]
ALIANT
COMMUNICATIONS INC.
6 3/4% NOTES
DUE APRIL 1, 2028
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P R O S P E C T U S S U P P L E M E N T
------------------------
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
MARCH 26, 1998
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