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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
(Amendment No. 4)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 16, 1993
McCAW CELLULAR COMMUNICATIONS, INC.
A Delaware Commission File I.R.S. Employer
Corporation No. 1-9854 No. 91-1379052
5400 Carillon Point, Kirkland, Washington 98033
Telephone Number (206) 827-4500
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial statements of businesses to be merged.
(1) Report of Independent Auditors.*
(2) AT&T's Consolidated Statements of Income for the
Years Ended December 31, 1993, 1992 and 1991.*
(3) AT&T's Consolidated Balance Sheets at December 31,
1993 and 1992.*
(4) AT&T's Consolidated Statements of Cash Flows for
the Years Ended December 31, 1993, 1992 and 1991.*
(5) AT&T's Notes to Consolidated Financial Statements,
December 31, 1993.*
(6) AT&T's Consolidated Statements of Income for the
Three Months Ended March 31, 1994 and 1993.
(7) AT&T's Consolidated Balance Sheets at March 31,
1994 and December 31, 1993.
(8) AT&T's Consolidated Statements of Cash Flows for
the Three Months Ended March 31, 1994 and 1993.
(9) AT&T's Notes to Consolidated Financial Statements,
March 31, 1994.
(b) Pro Forma Financial Information.
(1) Unaudited Pro Forma Combined Statement of Income
for the Year Ended December 31, 1993*
(2) Unaudited Pro Forma Combined Statement of Income
for the Year Ended December 31, 1992*
(3) Unaudited Pro Forma Combined Statement of Income
for the Year Ended December 31, 1991*
(4) Unaudited Pro Forma Combined Balance Sheet at
December 31, 1993*
(5) Notes to Unaudited Pro Forma Combined Financial
Statements*
(6) Unaudited Pro Forma Combined Statement of Income
for the Three Months Ended March 31, 1994.
(7) Unaudited Pro Forma Combined Statement of Income
for the Three Months Ended March 31, 1993.
(8) Unaudited Pro Forma Combined Balance Sheet at March
31, 1994.
(9) Notes to Unaudited Pro Forma Combined Financial
Statements.
- - ----------------------
* Previously filed.<PAGE>
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(c) Exhibits.
Exhibits identified in parentheses below, on file with
the Securities and Exchange Commission ("SEC"), are
incorporated herein by reference as exhibits hereto.
Exhibit
Number
2(a) Agreement and Plan of Merger, dated August 16,
1993, among AT&T, Ridge Merger Corporation and the
Company (incorporated by reference to Exhibit 2(a)
to the Company's quarterly report on Form 10-Q for
the quarter ended June 30, 1993, as amended).
99(a) Agreement, dated as of August 16, 1993, among
AT&T, Craig O. McCaw, John E. McCaw, Jr., Bruce R.
McCaw and Keith W. McCaw, et al (incorporated by
reference to Exhibit 99(a) to the Company's
quarterly report on Form 10-Q for the quarter
ended June 30, 1993, as amended).
99(b) Press Release, dated August 16, 1993 (incorporated
by reference to Exhibit 99(b) to the Company's
quarterly report on Form 10-Q for the quarter
ended June 30, 1993, as amended).
99(c) Letter, dated August 16, 1993, from American
Telephone and Telegraph Company to McCaw Cellular
Communications, Inc. (incorporated by reference to
Exhibit 99(c) to the Company's quarterly report on
Form 10-Q for the quarter ended June 30, 1993, as
amended).
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AT&T
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
For the Three
Months Ended
March 31,
1994 1993(b)
Sales and Revenues
Telecommunications services.......... $10,224 $ 9,967
Products and systems................. 4,070 3,554
Rentals and other services........... 1,575 1,628
Financial services and leasing....... 691 570
Total revenues....................... 16,560 15,719
Costs
Telecommunications services
Access and other
interconnection costs............ 4,519 4,457
Other costs........................ 1,741 1,836
Total telecommunications services.... 6,260 6,293
Products and systems................. 2,440 2,069
Rentals and other services........... 774 788
Financial services and leasing....... 452 377
Total costs.......................... 9,926 9,527
Gross margin......................... 6,634 6,192
Operating Expenses
Selling, general and
administrative expenses............ 4,102 3,917
Research and development expenses.... 758 747
Total operating expenses............. 4,860 4,664
Operating income..................... 1,774 1,528
Other income - net................... 119 143
Interest expense (e)................. 129 202
Income before income taxes and
cumulative effects of
accounting changes................. 1,764 1,469
Provision for income taxes........... 670 533
Income before cumulative
effects of accounting changes...... 1,094 936
(CONT'D)
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AT&T
CONSOLIDATED STATEMENTS OF INCOME (CONT'D)
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
For the Three
Months Ended
March 31,
1994 1993(b)
Cumulative effects on prior years
of changes in accounting for:
Postretirement benefits (net of
income taxes of $4,294) (c)..... - (7,023)
Postemployment benefits (net of
income taxes of $681)(c)........ - (1,128)
Income taxes (c).................. - 383
Cumulative effects of accounting
changes......................... - (7,768)
Net Income (Loss).................... $ 1,094 $(6,832)
Weighted average common shares
outstanding (millions)............ 1,360 1,347
Per Common Share:
Income before cumulative effects
of accounting changes........... $ .80 $ .69
Cumulative effects of accounting
changes......................... $ - $ (5.76)
Net Income (Loss)................. $ .80 $ (5.07)
Dividends declared per
common share...................... $ .33 $ .33
See Notes to Consolidated Financial Statements.
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AT&T
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions Except Per Share Amount)
(Unaudited)
March 31, December 31,
1994 1993
ASSETS
Cash and temporary cash investments.... $ 793 $ 532
Receivables less allowances
of $977 and $1,003
Accounts receivable.................. 11,814 11,933
Finance receivables.................. 11,314 11,370
Inventories (d)........................ 3,857 3,187
Deferred income taxes.................. 2,258 2,079
Other current assets................... 623 637
Total current assets................... 30,659 29,738
Property, plant and equipment, net
of accumulated depreciation of
$21,665 and $21,496.................. 19,229 19,397
Investments............................ 1,428 1,503
Finance receivables.................... 3,972 3,815
Prepaid pension costs.................. 3,738 3,576
Other assets........................... 2,983 2,737
TOTAL ASSETS........................... $62,009 $60,766
(CONT'D)
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AT&T
CONSOLIDATED BALANCE SHEETS (CONT'D)
(Dollars in Millions Except Per Share Amount)
(Unaudited)
March 31, December 31,
1994 1993
LIABILITIES AND DEFERRED CREDITS
Accounts payable....................... $ 5,156 $ 4,694
Payroll and benefit-related
liabilities.......................... 2,988 3,746
Postretirement and postemployment
benefit liabilities.................. 1,096 1,301
Debt maturing within one year.......... 9,671 10,904
Dividends payable...................... 448 448
Other current liabilities.............. 5,196 4,241
Total current liabilities.............. 24,555 25,334
Long-term debt including capital
leases............................... 7,387 6,812
Postretirement and postemployment
benefit liabilities.................. 9,318 9,082
Other liabilities...................... 4,481 4,298
Deferred income taxes.................. 206 275
Unamortized investment tax credits..... 256 270
Other deferred credits................. 386 263
Total liabilities & deferred credits... 46,589 46,334
Minority interests..................... 618 582
SHAREOWNERS' EQUITY
Common stock - par value $1 per share.. 1,357 1,352
Authorized shares: 2,000,000,000
Outstanding shares:
1,357,388,000 at March 31, 1994
1,352,398,000 at December 31, 1993
Additional paid-in capital............. 12,269 12,028
Guaranteed ESOP obligation............. (331) (355)
Foreign currency translation
adjustments.......................... 20 (32)
Retained earnings...................... 1,487 857
Total shareowners' equity.............. 14,802 13,850
TOTAL LIABILITIES/SHAREOWNERS' EQUITY.. $62,009 $60,766
See Notes to Consolidated Financial Statements.
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AT&T
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
For the Three
Months Ended
March 31,
1994 1993(b)
Operating Activities
Net income (loss)........................ $ 1,094 $(6,832)
Adjustments to reconcile net income to
net cash provided by operating
activities:
Cumulative effects of accounting
changes (c)......................... - 7,768
Depreciation.......................... 916 893
Provision for uncollectibles.......... 419 403
(Increase) decrease in accounts
receivable.......................... (176) 110
(Increase) in inventories............. (652) (381)
Increase in accounts payable.......... 445 51
Net change in other operating
assets and liabilities.............. 26 (57)
Other adjustments for non-cash
items - net......................... 2 35
Net cash provided by operating
activities............................. 2,074 1,990
Investing Activities
Capital expenditures net of proceeds
from sale or disposal of property,
plant and equipment of $40 and $87... (675) (614)
(Increase) in finance receivables, net
of lease-related repayments of $933
and $1,212........................... (156) (97)
Net (increase) in investments.......... 3 (766)
Acquisitions, net of cash acquired..... (114) -
Other investing activities - net....... 76 (122)
Net cash used in investing activities.... (866) (1,599)
Financing Activities
Proceeds from long-term debt issuance.. 966 112
Retirements of long-term debt.......... (284) (551)
Issuance of common shares.............. 246 166
Dividends paid......................... (451) (443)
(Decrease)short-term borrowings - net.. (1,412) (1)
Other financing activities - net....... (22) (17)
Net cash (used in)financing activities... (957) (734)
(CONT'D)
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AT&T
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT'D)
(Dollars in Millions)
(Unaudited)
For the Three
Months Ended
March 31,
1994 1993(b)
Effect of exchange rate
changes on cash........................ 10 9
Net increase (decrease) in cash and
temporary cash investments............. 261 (334)
Cash and temporary cash investments
at beginning of year................... 532 1,310
Cash and temporary cash investments
at end of period....................... $ 793 $ 976
See Notes to Consolidated Financial Statements.
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AT&T
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
(a) ACCOUNTING POLICIES - The consolidated financial statements
have been prepared by AT&T Corp. ("AT&T" or the "Company")
pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and, in the opinion of management,
include all adjustments, consisting of only normal recurring
adjustments, necessary for a fair statement of the
consolidated results of operations, financial position and
cash flows for each period presented. The consolidated
financial statements include the accounts of foreign entities
based on their fiscal years, which end either November 30 or
December 31. The consolidated results for interim periods are
not necessarily indicative of results for the full year. These
financial statements should be read in conjunction with AT&T's
1993 Annual Report to Shareowners and Form 10-K for the year
ended December 31, 1993.
(b) RESTATEMENTS AND RECLASSIFICATIONS - Previously reported
quarterly results for 1993 were restated to reflect the
adoption of Statement of Financial Accounting Standards
("SFAS") No. 112, "Employers' Accounting for Postemployment
Benefits." In addition, the provisions for business
restructuring have been reclassified to costs and operating
expenses.
(c) CHANGES IN ACCOUNTING PRINCIPLES - Effective January 1, 1993,
AT&T adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." This standard
requires companies to accrue for estimated future
postretirement benefit expenses during the years employees are
working and earning benefits for retirement. Previously,
AT&T expensed these benefits as claims were incurred. AT&T
recorded an after-tax charge of $7,023 ($5.21 per share) to
record the unprovided portion of these liabilities as the
cumulative effect of an accounting change in the first quarter
of 1993. This accounting change does not affect cash flows.
Effective January 1, 1993, AT&T adopted SFAS No. 112. This
standard requires companies to accrue for estimated future
postemployment benefits during the years employees are working
and accumulating these benefits. Before this change in
accounting method, AT&T recognized the separation costs as
they were identified and disability benefits when paid. AT&T
recorded an after-tax charge of $1,128 ($.83 per share) to
record the unprovided portion of these liabilities as the
cumulative effect of an accounting change in the first quarter
of 1993. This accounting change does not affect cash flows.<PAGE>
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AT&T
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
Also effective January 1, 1993, AT&T adopted SFAS No. 109,
"Accounting for Income Taxes." Among other provisions, this
standard requires tax assets and liabilities to be determined
using the enacted income tax rates for the years in which
taxes will be paid or refunds received. Prior to 1993, AT&T's
deferred tax accounts reflected the statutory rates that were
in effect when the deferrals were initiated. The adoption of
SFAS No. 109 resulted in a net income benefit of $383, or $.28
per share. This benefit was recorded as the cumulative effect
of an accounting change in the first quarter of 1993. This
accounting change does not affect cash flows.
Effective January 1, 1994, AT&T adopted SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities". The standard provides for the accounting and
reporting for investments in equity securities that have
readily determinable fair values and for all investments in
debt securities. The new standard did not have a material
impact on AT&T's results of operations or financial position.
(d) INVENTORIES - Inventories at March 31, 1994 and December 31,
1993 were as follows:
March 31, December 31,
1994 1993
Completed goods .............. $2,343 $1,893
Work-in-process and raw
materials ................. 1,514 1,294
Total inventories ............ $3,857 $3,187
(e) LONG-TERM DEBT REDEMPTION - In March 1993, AT&T issued
redemption notices for debentures and notes with an aggregate
outstanding balance of $1,750 at March 31, 1993. Expenses
associated with these redemptions of $83 ($52 or $.04 per
share after taxes) were included in interest expense for the
three months ended March 31, 1993.
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AT&T
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
(f) STATUS OF PROSPECTIVE MERGER WITH McCAW CELLULAR
COMMUNICATIONS, INC. ("McCaw")- On April 5, 1994 the U.S.
District Court, acting on a motion filed by BellSouth
Corporation on December 2, 1993, ruled that AT&T's
acquisition, under the proposed merger, of the interests owned
by McCaw in certain cellular properties controlled by regional
Bell operating companies would violate the antitrust consent
decree entered into by AT&T in 1982 (the "Decree"). The court
determined that AT&T must seek a waiver of the Decree to
proceed with the merger, and that the record before the court
was insufficient to support a waiver previously requested by
AT&T. Accordingly, the court declined to grant such a waiver
without prejudice to a renewed request by AT&T, and noted that
its ruling does not absolutely foreclose the waiver. Rather,
the court held that AT&T must satisfy the legal standard for a
Decree modification. The proposed merger is also subject to
the approval of the Federal Communications Commission and
expiration of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act ("HSR"). There can be no assurance
as to whether the foregoing approvals or waiver will be
granted, or if granted, when that will occur.
(g) AT&T CREDIT HOLDINGS, INC. - In connection with a March 31,
1993 legal restructuring of AT&T Capital Holdings, Inc.
(formerly AT&T Capital Corporation), AT&T issued a direct,
full and unconditional guarantee of all the outstanding public
debt of AT&T Credit Holdings, Inc. (formerly AT&T Credit
Corporation) existing at March 31, 1993.
AT&T Credit Holdings, Inc. holds the majority of AT&T's
investment in AT&T Capital Corporation and the lease finance
assets of the former AT&T Credit Corporation. The table below
shows summarized consolidated financial information for AT&T
Credit Holdings, Inc., which consolidates the accounts of AT&T
Capital Corporation. Financial information for prior periods
was restated for the legal restructuring. The summarized
financial information includes transactions with AT&T that are
eliminated in consolidation.
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AT&T
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
For the Three
Months Ended
March 31,
1994 1993
Total revenue $ 342 $ 349
Interest expense 69 73
Operating and administrative
expense 101 103
Income before cumulative effect of
accounting change 18 22
Cumulative effect of accounting
change (1) - (22)
Net Income 18 -
At At
March 31, December 31,
1994 1993
Finance receivables $6,712 $6,220
Net investment in operating
lease assets 797 978
Total assets 8,303 7,886
Total debt 4,979 4,639
Total liabilities 7,268 6,867
Minority interest 253 251
Total shareholder's equity 782 768
(1) Effective January 1, 1993, AT&T Credit Holdings, Inc. adopted
SFAS No. 109.
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AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited Pro Forma Combined Statements of Income
and Balance Sheet give effect to the proposed merger (the "Merger") of
McCaw Cellular Communications, Inc. ("McCaw") with a subsidiary of
AT&T Corp. ("AT&T") pursuant to an Agreement and Plan of Merger dated
August 16, 1993 (the "Merger Agreement") on a pooling-of-interests
basis of accounting. These unaudited Pro Forma Combined Financial
Statements have been prepared from the historical consolidated
financial statements of AT&T and McCaw and should be read in
conjunction therewith.
This pro forma combined information is not necessarily indicative
of actual or future operating results or financial position that would
have occurred or will occur upon consummation of the Merger.
The Unaudited Pro Forma Combined Balance Sheet gives effect to
the Merger as if it had occurred on March 31, 1994, combining the
balance sheets of AT&T and McCaw at March 31, 1994. The Unaudited Pro
Forma Combined Statements of Income give effect to the Merger as if it
had occurred at the beginning of each of the periods presented,
combining the results of AT&T and Mccaw for the three month periods
ended March 31, 1994 and 1993.<PAGE>
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AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
Three Months Ended March 31, 1994
(Dollars in Millions, Except Per Share Amounts)
Historical Pro Forma
AT&T McCaw Adjustments Combined
Sales and Revenues
Telecommunications services......... $10,224 $506 $10,730
Sales of products and systems....... 4,070 - 4,070
Rentals and other services.......... 1,575 125 1,700
Financial services and leasing...... 691 - 691
Total revenues................. 16,560 631 17,191
Costs
Telecommunications services......... 6,260 195 6,455
Products and systems................ 2,440 - 2,440
Rentals and other services.......... 774 76 850
Financial services and leasing...... 452 - 452
Total costs..................... 9,926 271 10,197
Gross margin........................ 6,634 360 6,994
Operating Expenses
Selling, general and administrative
expenses.......................... 4,102 280 4,382
Research and development expenses... 758 - 758
Total operating expenses........ 4,860 280 5,140
Operating income.................... 1,774 80 1,854
Other income, net................... 119 33 152
Interest expense.................... 129 67 196
Income before income taxes and
preferred stock dividend of a
subsidiary........................ 1,764 46 1,810
Provision for income taxes.......... 670 20 690
Provision for preferred stock
dividend of a subsidiary........... - 34 34
Net Income (Loss)................... $ 1,094 $ (8) $ 1,086
Weighted average common shares
outstanding....................... 1,360 209 (14) (3B) 1,555
Earnings per common share........... $ 0.80 $ 0.70
Dividends declared per common share. $ 0.33 $ 0.33
See accompanying notes to unaudited pro forma combined financial statements.<PAGE>
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AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
Three Months Ended March 31, 1993
(Dollars in Millions, Except Per Share Amounts)
Historical Pro Forma
AT&T McCaw Adjustments Combined
Sales and Revenues
Telecommunications services........ $ 9,967 $393 $10,360
Sales of products and systems...... 3,554 - 3,554
Rentals and other services......... 1,628 87 1,715
Financial services and leasing..... 570 - 570
Total revenues................. 15,719 480 16,199
Costs
Telecommunications services........ 6,293 164 6,457
Products and systems............... 2,069 - 2,069
Rentals and other services......... 788 42 - 830
Financial services and leasing..... 377 - 377
Total costs................... 9,527 206 9,733
Gross margin....................... 6,192 274 6,466
Operating Expenses
Selling, general and administrative
expenses......................... 3,917 195 4,112
Research and development expenses.. 747 - 747
Total operating expenses....... 4,664 195 4,859
Operating income................... 1,528 79 1,607
Other income, net.................. 143 75 218
Interest expense................... 202 109 311
Income before income taxes,
preferred stock dividend of a
subsidiary and cumulative effects
of accounting changes............ 1,469 45 1,514
Provision for income taxes........ 533 25 558
Provision for preferred stock
dividend of a subsidiary......... - 34 34
Income (loss) before cumulative
effects of accounting changes... 936 (14) 922
Cumulative effects on prior years of
changes in accounting for:
postretirement benefits, net.. (7,023) - (7,023)
postemployment benefits, net.. (1,128) - (1,128)
Income taxes.................. 383 - $(l,840) (3C)(1,457)
Net Loss........................... $(6,832) $(14) $(1,840) $(8,686)
Weighted average common shares
outstanding...................... 1,347 192 (6) (3B) 1,533
Per common share:
Income before cumulative effects of
accounting changes............... $ 0.69 $ 0.60
Cumulative effects of accounting
changes.......................... (5.76) (6.27)
Net loss $(5.07) $(5.67)
Dividends declared per common share $0.33 $0.33
See accompanying notes to unaudited pro forma combined financial statements<PAGE>
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AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
March 31, 1994
(Dollars in millions)
Historical Pro Forma
AT&T McCaw Adjustments Combined
ASSETS
Cash and temporary cash
investments...................... $793 $ 216 $ 1,009
Receivables, net of allowances
Accounts receivable.............. 11,814 354 12,168
Finance receivables.............. 11,314 - 11,314
Inventories........................ 3,857 60 3,917
Deferred income taxes.............. 2,258 - 2,258
Other current assets............... 623 93 716
Total current assets........... 30,659 723 31,382
Property, plant and
equipment, net................... 19,229 1,680 20,909
Licensing costs, net............... - 4,008 4,008
Investments........................ 1,428 1,948 $(400) (3B) 2,976
Finance receivables................ 3,972 - 3,972
Prepaid pension costs.............. 3,738 - 3,738
Other assets, net.................. 2,983 857 (39) (3C) 3,801
TOTAL ASSETS....................... $62,009 $9,216 $(439) $70,786
LIABILITIES, and
DEFERRED CREDITS
Accounts payable................... $ 5,156 $ 107 $ 5,263
Payroll and benefit-related
liabilities...................... 2,988 51 3,039
Postretirement and postemploy-
ment benefit liabilities.......... 1,096 - 1,096
Debt maturing within one year...... 9,671 173 9,844
Dividends payable.................. 448 - 448
Other current liabilities.......... 5,196 363 5,559
Total current liabilities..... 24,555 694 25,249
Long-term debt, including
capital leases................... 7,387 5,098 12,485
Postretirement and postemploy-
ment benefit liabilities......... 9,318 - 9,318
Other liabilities.................. 4,481 64 4,545
Deferred income taxes.............. 206 1,973 2,179
Unamortized investment tax
credits.......................... 256 - 256
Other deferred credits............. 386 - 386
Total liabilities and
deferred credits............ 46,589 7,829 54,418
Minority interests................. 618 71 689
Redeemable preferred stock
of a subsidiary.................. - 1,339 1,339
(continued)<PAGE>
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AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(continued)
March 31, 1994
(Dollars in millions)
Historical Pro Forma
AT&T McCaw Adjustments Combined
SHAREOWNERS' EQUITY
Common stock...................... $ 1,357 $2 $ 193 (3A) $1,552
Additional paid-in capital ....... 12,269 2,912 (193) (3A) 14,588
(400) (3B)
Guaranteed ESOP
obligation...................... (331) - (331)
Foreign currency translation
adjustments..................... 20 - 20
Retained earnings (deficit)....... 1,487 (2,937) (39) (3C) (1,489)
Total shareowners'
equity (deficiency)......... 14,802 (23) (439) 14,340
TOTAL LIABILITIES
& SHAREOWNERS' EQUITY........ $62,009 $9,216 $(439) $70,786
See accompanying notes to unaudited pro forma combined financial statements.<PAGE>
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AT&T AND SUBSIDIARIES AND McCAW AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(Dollars in millions, except per share amounts)
Note 1 - McCaw Historical Presentation
Certain amounts reported in McCaw's historical financial statements
have been reclassified to conform to the AT&T presentations in the
accompanying Unaudited Pro Forma Combined Balance Sheet and Statements of
Income. Such reclassifications are not material to the Unaudited Pro Forma
Combined Financial Statements.
Note 2 - Exchange Ratio
As defined in the Merger Agreement, the Exchange Ratio will be one
AT&T Common Share for each share of McCaw Common Stock; provided, however,
that (i) in the event the Closing Date Market Price of one AT&T Common
Share (as such terms are defined in the Merger Agreement) is less than
$53.00, the-Exchange Ratio will be equal to $53.00 divided by the Closing
Date Market Price of one AT&T Common Share, but in no event greater than
1.111 AT&T Common Shares, and (ii) in the event the Closing Date Market
Price of one AT&T Common Share is greater than $71.73, the Exchange Ratio
will be equal to $71.73 divided by the Closing Date Market Price of one
AT&T Common Share, but in no event less than .909 of an AT&T Common Share.
For purposes of the unaudited Pro Forma Combined Financial Statements, an
Exchange Ratio of one AT&T Common Share per share of McCaw Common Stock (as
defined in the Merger Agreement) is assumed.
Note 3 - Other Pro Forma Adjustments
(A) The McCaw Common Stock account has been adjusted to reflect the
assumed exchange of one AT&T Common Share, par value $1.00 per share, for
each of approximately 194.6 million shares of McCaw Common Stock, par value
$.01 per share, outstanding at March 31, 1994 (excluding shares of McCaw
Common Stock held by AT&T - see Note 3 (5)). The difference between the
par value of the AT&T Common Shares and the par value of the McCaw Common
Stock, after giving effect to the assumed Exchange Ratio, is reflected as a
reduction to additional paid-in capital of $193.
(B) The $400 investment by AT&T in 14.5 million shares of Class A
Common Stock purchased in February 1993 has been eliminated. The weighted
average common shares outstanding for the three months ended March 31, 1993
and March 31, 1994 have been adjusted to eliminate the impact of this
investment.
(C) McCaw's historical financial statements reflect the adoption of
SFAS No. 109, "Accounting for Income Taxes," retroactive to January 1,
1991. AT&T adopted SFAS No. 109 effective January 1, 1993. For conformity
purposes, the pro forma combined information for AT&T and McCaw has been
adjusted as if McCaw had adopted SFAS No. 109 on January 1, 1993. Such
adoption would result in the use of different tax assumptions related to
intangible assets McCaw acquired in purchase business combinations in 1991
and 1992 that would increase the cumulative effect of adopting SFAS No. 109
by $39. Accordingly, the pro forma combined net income and earnings per <PAGE>
<PAGE> 20
common share have been decreased $1,840 and $1.20 for the period ended
March 31, 1993, respectively. Pro forma combined total assets and
shareowners' equity have been decreased $39 at March 31, 1994. Also,
effective January 1, 1993, AT&T adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." McCaw adopted SFAS No. 112
effective January 1, 1994. The impact of this standard on McCaw's
financial statements is immaterial.
(D) No adjustments have been reflected in the unaudited Pro Forma
Combined Financial Statements for direct expenses related to the Merger.
Direct expenses included in the historical periods presented have not been
adjusted for in the Unaudited Pro Forma Combined Financial Statements. Such
amounts are not material.
(E) No adjustments to eliminate intercompany transactions and
balances have been made in the unaudited Pro Forma Combined Financial
Statements as such amounts are not material.
(F) The cash dividends per common share in the unaudited Pro Forma
Combined Financial Statements reflect AT&T's cash dividends declared in the
periods presented. McCaw has never paid cash dividends on the McCaw Common
stock.
Note 4 - Federal Income Tax Consequences of the Merger
The Unaudited Pro Forma Combined Financial Statements assume that the
Merger qualifies as a "tax-free" reorganization for federal income tax
purposes.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned thereunto duly
authorized.
McCAW CELLULAR COMMUNICATIONS, INC.
ANDREW A. QUARTNER
-----------------------------------
Andrew A. Quartner
Senior Vice President-Law
Date: June 6, 1994
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number
2(a) Agreement and Plan of Merger, dated August 16,
1993, among AT&T, Ridge Merger Corporation and the
Company (incorporated by reference to Exhibit 2(a)
to the Company's quarterly report on Form 10-Q for
the quarter ended June 30, 1993, as amended).
99(a) Agreement, dated as of August 16, 1993, among
AT&T, Craig O. McCaw, John E. McCaw, Jr., Bruce R.
McCaw and Keith W. McCaw, et al (incorporated by
reference to Exhibit 99(a) to the Company's
quarterly report on Form 10-Q for the quarter
ended June 30, 1993, as amended).
99(b) Press Release, dated August 16, 1993 (incorporated
by reference to Exhibit 99(b) to the Company's
quarterly report on Form 10-Q for the quarter
ended June 30, 1993, as amended).
99(c) Letter, dated August 16, 1993, from American
Telephone and Telegraph Company to McCaw Cellular
Communications, Inc. (incorporated by reference to
Exhibit 99(c) to the Company's quarterly report on
Form 10-Q for the quarter ended June 30, 1993, as
amended).
