SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 19, 1999
Telecommunications Growth & Income Fund L.P.
(Exact name of registrant as specified in charter)
Virginia 033-26427 59-1482898
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1525 Wilson Boulevard, Arlington, VA 22209
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 703-247-290
Item 2. Acquisition or Disposition of Assets.
(b) The Asset Purchase Agreement.
On January 19, 1999, Tower Ventures Limited Partnership (Tower Ventures
or the Seller) entered into an asset purchase agreement to sell to Pinnacle
Towers Inc., a Delaware corporation (Purchaser), all of the tangible and
intangible assets used or held for use in connection with Tower Ventures'
tower business (the Tower Business) located in Montgomery County,
Pennsylvania. Pinnacle Towers Inc. is an unaffiliated third party. The
Tower Business includes a radio tower, associated buildings and equipment.
Closing was completed January 19, 1999 (the Closing Date).
Telecommunications Growth & Income Fund L.P. (TGIF L.P. or the
Partnership) owns a 99% general partnership interest in and controls Tower
Ventures.
Total consideration under the asset purchase agreement was $8,531,000
(Purchase Price), which was paid by $7,906,000 in cash to Tower Ventures and
$625,000 in cash to be held in escrow until distributed in accordance with the
terms of an Escrow Agreement (the Escrow Agreement). On January 19, 1999,
Tower Ventures received cash at closing in the amount of $7,797,217, which was
the Purchase Price of $8,531,000, net of closing costs of $86,395, the Escrow
Deposit of $625,000, adjustments for the seller's pro rata share of 1999
prepaid taxes of $1,582, and the buyer's pro rata share of January lease
receipts of $23,970. Additional closing costs of $266,229 were paid after
closing for legal fees and sales commissions. A balance of $28,100 in
additional sales commissions is due upon collection of the Escrow Deposit.
During the period between the Closing Date and May 17, 1999, the
Purchaser has the right to perform due diligence inspections of the Real
Property and the Tower Business, to determine whether any latent defects exist
in the structural integrity of the tower based on its use as of the Closing
Date, and the validity of the Seller's representations in the Purchase
Agreement. Purchaser may provide Seller and the Escrow Agent with written
notification, no later than May 17, 1999, of any adjustments, up to a maximum
of $625,000, to the Purchase Price resulting from the inspection that
materially adversely affect the Real Property or the Tower Business. If
Purchaser fails to provide Seller and the Escrow Agent with any such notice by
May 17, 1999, then Purchaser shall be deemed to have waived any right to adjust
the Final Payment, and the Escrow Agent shall release the entire Escrow Deposit
and all interest thereon to Seller
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
The following Unaudited Pro Forma Condensed Consolidated Balance Sheet
presents the financial position of the Partnership assuming the sale of the
assets of Tower Ventures had occurred on December 31, 1998. The following
Unaudited Pro Forma Condensed Consolidated Statement of Operations reflects the
results of operations for the 12 months ended December 31, 1998 as if the sale
had been completed on January 1, 1998. Such pro forma information is based
upon the historical consolidated financial statements of the Partnership and
the expected results of a transaction based on an Asset Purchase Agreement for
the sale of the tangible and intangible assets used or held for use in
connection with the operations of Tower Ventures.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet includes
adjustments related to the sale of the assets of Tower Ventures. The
adjustments include elimination of the assets of Tower Ventures and the
addition of proceeds in the form of cash and the Escrow Deposit resulting from
the sale. The net book value of the assets sold was approximately $1,123,799
at December 31, 1998.
Revenues and operating, general and administrative expenses presented in
the Unaudited Pro Forma Condensed Consolidated Statement of Operations are
based on the twelve month historical financial statements of the Partnership.
The Pro Forma Condensed Consolidated Statement of Operations includes
adjustments related to the elimination of the operations of Tower Ventures and
related management fees payable to the general partner of the Partnership and
the gain on sale of the assets of Tower Ventures.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet and
Unaudited Pro Forma Combined Statement of Operations should be read in
conjunction with the appropriate Notes to Unaudited Condensed Consolidated Pro
Forma Financial Statements.
All of the following unaudited pro forma financial information is based
on the January 19, 1999 asset purchase agreement described above and estimated
expense adjustments. The actual results may vary from those presented in the
Unaudted Pro Forma Condensed Consolidated Financial Statements.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet and
Statement of Operations do not purport to represent what actual financial
position and results of operations of the Partnership would have been assuming
such transactions had been completed as set forth above, nor do they purport to
represent the results of future periods.
TELECOMMUNICATIONS GROWTH & INCOME FUND L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
(UNAUDITED)
Condensed Pro Forma Pro Forma
Historical Adjustments Amount
Assets:
Cash and cash equivalents $1,978,000 $7,525,276 (1) $9,503,276
Receivables 13,761 625,000 (1) 638,761
Net investments in communications
Businesses 1,017,133 (1,017,133)(1) -
Other 113,602 (106,666)(1) 6,936
$3,122,496 $,7,026,477 $10,148,973
Liabilities and Partners' Capital
(Deficit):
Current liabilities $42,804 $42,804
Minority interest in
Tower Ventures L.P. 9,959 9,959
Minority interest in UMN L.P. 12,877 12,877
Partners' capital (deficit)
General partner (32,010) 762,538 (1) 730,528
Limited partners 3,088,866 6,263,939 (1) 9,352,805
3,056,856 7,026,477 10,083,333
$3,122,496 $7,026,477 $10,148,973
Pro Forma Condensed Consolidated Balance Sheet
In preparing the Unaudited Pro forma Condensed Consolidated Balance Sheet, the
following adjustment has been made, as if the sale of the assets of Tower
Ventures had occurred on December 31, 1999:
(1) Reflects the adjustments to the net assets resulting from a sale of Tower
Ventures.
TELECOMMUNICATIONS GROWTH & INCOME FUND L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
Condensed Pro Forma Pro Forma
Historical Adjustments Amount
Revenues: $775,913 $ (775,913) (1) $ -
Costs and expenses:
Operating, general and administrative 157,191 (83,723) (1) 73,468
Management fees
- Affiliates 41,996 (36,780) (2) 5,216
- Others 80,874 (68,874) (1) 12,000
Depreciation and amortization 99,551 (98,010) (1) 1,541
379,612 (287,387) 92,225
Operating income (loss) 396,301 (488,526) (92,225)
Other income 144,720 144,720
Minority interest in Tower Ventures (5,253) 5,253 (1) -
Minority interest in UMN L.P. (1,216) (1,216)
Net income (loss) $534,552 $(483,273) $ 51,279
Gain on sale of To6wer Ventures $7,071,015 (3) $7,071,015
Allocations of net income before gain:
General Partner $5,345 $ 513
Limited Partners $529,207 $50,766
Per Limited Partner Unit $ 99.21 $ 9.52
Allocations of gain on sale of Tower Ventures:
General Partner $787,619
Limited Partners $6,283,396
Per Limited Partner Unit $ 1,177.99
Pro Forma Condensed Consolidated Statements of Operations
In preparing the Unaudited Pro Forma Condensed Statements of Operations
for the Twelve Months Ending December 31, 1998, the following adjustments have
been made as if the sale of the assets of Tower Ventures had occurred on
January 1, 1998:
(1) Elimination of operations of Tower Ventures for the twelve months
ended December 31, 1998.
(2) Elimination of management fees payable to TGIF, the general partner
of the Partnership, that are based on the gross revenues of Tower
Ventures for the twelve months ended December 31, 1998.
(3) Represents the gain resulting from the sale of the assets of Tower
Ventures as if the sale had occurred on January 1, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 29, 1999
Telecommunications Growth and Income Fund L.P.
Registrant
By: Telecommunications Growth and Income Fund
Management Limited Partnership
General Partner
By: Telecommunications Growth and Income Fund,
Inc.
General Partner
By: /s/___________________________________
Name: B. Eric Sivertsen
Title: Vice-President, Secretary, Director,
And Chief Financial and Accounting
Officer
