<PAGE> 1
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): July 5, 1996
HORIZON CELLULAR TELEPHONE COMPANY, L.P.
HORIZON FINANCE CORPORATION
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(Exact name of registrants as specified in their charters)
Delaware
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(State or other jurisdiction of organization)
23-2617703 - Horizon Cellular
33-71002 Telephone Company, L.P.
23-2741164 - Horizon Finance
33-71002-01 Corporation
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(Commission File Number) (IRS Employer Identification No.)
101 Lindenwood Drive, Suite 125, Malvern, PA 19355
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(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (610) 651-5900
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Item 2. Acquisition or Disposition of Assets.
On July 5, 1996, Horizon Cellular Telephone Company of Spalding, L.P.,
an affiliate of the Registrants ("Spalding"), consummated the sale of
substantially all of Spalding's assets (subject to certain operating
liabilities) to Columbus Cellular Telephone Company ("Columbus") and Macon
Cellular Telephone Systems Limited Partnership ("Macon"), pursuant to the terms
of an Asset Acquisition Agreement dated as of March 22, 1996 between the
parties. The assets included a cellular operating license granted by the
Federal Communications Commission ("FCC") for the Georgia Non-Wireline Rural
Service Area ("RSA") Number 6 and related assets used in connection with the
operation of a cellular communications system in that RSA. Spalding received
approximately $35.4 million, which amount is subject to certain post-closing
adjustments.
On July 16, 1996, Horizon Cellular Telephone Company of Dawson, L.P.,
an affiliate of the Registrants ("Dawson"), consummated the sale of
substantially all of Dawson's assets (subject to certain operating liabilities)
to Cellco Partnership ("Cellco"), pursuant to the terms of an Asset Acquisition
Agreement dated as of March 22, 1996 between the parties. The assets included
a cellular operating license granted by the FCC for the Georgia Non-Wireline
RSA Number 2 and related assets used in connection with the operation of a
cellular communications system in that RSA. Dawson received approximately $54.4
million, which amount is subject to certain post-closing adjustments.
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Item 5. Other Events
On July 12, 1996, Horizon Cellular Telephone Company of Chautauqua,
L.P., Horizon Cellular Telephone Company of Crawford, L.P., and Horizon
Cellular Telephone Company of Indiana, L.P., affiliates of the Registrants
(collectively,"Sellers"), entered into an Asset Acquisition Agreement with
SYGNET Communications Inc. ("SYGNET") to sell substantially all of Sellers'
assets (subject to certain operating liabilities) to SYGNET for $250 million
plus assumption of certain liabilities. The assets include cellular operating
licenses granted by the FCC for the Pennsylvania RSA Numbers 1, 6 and 7 and the
New York RSA Number 3, licenses and related authorities granted by the State
of New York Public Service Commission ("PSC") for the New York RSA Number 3 and
related assets used in connection with the operation of the cellular
communications systems in those RSAs.
On or about June 25, 1996, the parties filed applications with the FCC
and PSC for consent to the assignment of the applicable licenses and related
authorities. Consummation of the transactions contemplated by the Acquisition
Agreement is subject to and contingent upon, among other things, the consents
of the FCC and PSC to the assignment of the applicable licenses and related
authorities, and compliance with the provisions of (including the expiration of
the waiting period under) the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
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Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Filed herewith is the pro forma financial information required pursuant to
Article 11 of Regulation S-X.
(c) Exhibits.
Exhibit No. Description
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2.1 Asset Acquisition Agreement dated as of March 22, 1996
between Horizon Cellular Telephone Company of Spalding, L.P.,
Columbus Cellular Telephone Company and Macon Cellular
Telephone Systems Limited Partnership (Incorporated by
reference to Exhibit 10.1 to the Registrants' Quarterly Report
on Form 10-Q filed May 15, 1996).
2.2 Asset Acquisition Agreement dated as of March 22, 1996
between Horizon Cellular Telephone Company of Dawson, L.P. and
Cellco Partnership (Incorporated by reference to Exhibit 10.2
to the Registrants' Quarterly Report on Form 10-Q filed May
15, 1996).
2.3 Letter Agreement dated March 22, 1996 between Horizon
Cellular Telephone Company of Dawson, L.P. and Cellco
Partnership (Incorporated by reference to Exhibit 10.4 to the
Registrants' Quarterly Report on Form 10-Q filed May 15,
1996).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrants have duly caused this report to be signed on their behalf by
the undersigned hereunto duly authorized.
HORIZON CELLULAR TELEPHONE
COMPANY, L.P. (a Delaware
Limited Partnership)
BY: KCCGP, L.P., its General Partner
BY: HORIZON G.P., INC., its
(Corporate) General Partner
Date: July , 1996 BY: /s/ Bruce M. Hernandez
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Bruce M. Hernandez, Vice
President-Finance and Chief
Financial Officer
HORIZON FINANCE CORPORATION
Date: July , 1996 BY: /s/ Bruce M. Hernandez
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Bruce M. Hernandez, Vice President
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<PAGE> 6
UNAUDITED PRO FORMA FINANCIAL STATEMENT DATA
The unaudited pro forma consolidated statements of operations data for the year
ended December 31, 1995 and the three months ended March 31, 1996 give effect
to the sale in July 1996 of the Federal Communications Commission ("FCC")
Operating Licenses, together with certain operating assets and liabilities,
of Georgia RSA #6 for $35.4 million and of Georgia RSA #2 for $54.4 million
(collectively referred to as the "Georgia Cluster") and the assumed application
of proceeds as if the transactions had occurred as of January 1, 1995.
The unaudited pro forma consolidated balance sheet data as of March 31, 1996
give effect to the sale of the Georgia Cluster as if it had occurred on March
31, 1996.
The pro forma adjustments are based upon available information and upon certain
assumptions that the Company believes are reasonable. The unaudited pro forma
financial statement data are provided for informational purposes only and do
not purport to be indicative of the Company's results of operations or
financial position which would actually have been obtained had such sale of the
Georgia Cluster been completed as of or for the periods presented, or which may
be obtained in the future. They should be read in conjunction with the audited
and unaudited historical financial statements of the Company.
The pro forma financial statement data do not include adjustments for the
pending sale of the West Virginia RSA #3 or the pending sale of the Systems as
discussed in Item 5 herein. Pro forma financial statement data will be
provided upon the consummation of those sales.
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HORIZON CELLULAR TELEPHONE COMPANY, L.P.
UNAUDITED CONSOLIDATED PRO FORMA BALANCE SHEET DATA
ASSETS
<TABLE>
<CAPTION>
SALE OF
MARCH 31, GEORGIA USE OF
1996 CLUSTER (a) CASH (b) PRO FORMA
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<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . $ 2,121,535 $ 89,834,770 $(84,384,543) $ 7,571,762
Cash in escrow . . . . . . . . . . . . . . . . . . . 5,250,000 5,250,000
Accounts receivable, net . . . . . . . . . . . . . . 11,009,697 (2,060,763) 8,948,934
Inventory . . . . . . . . . . . . . . . . . . . . . . 760,700 (125,420) 635,280
Prepaid expenses . . . . . . . . . . . . . . . . . . 1,032,980 (79,272) 953,708
------------- -------------- ------------- -------------
Total current assets . . . . . . . . . . . . . . . . . . 14,924,912 87,569,315 (79,134,543) 23,359,684
Property and equipment
Cellular systems . . . . . . . . . . . . . . . . . . 65,980,810 (11,230,683) 54,750,127
Other . . . . . . . . . . . . . . . . . . . . . . . . 7,242,074 (1,440,532) 5,801,542
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73,222,884 (12,671,215) 60,551,669
Accumulated depreciation . . . . . . . . . . . . . . . . (19,943,151) 2,881,748 (17,061,403)
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53,279,733 (9,789,467) 43,490,266
License . . . . . . . . . . . . . . . . . . . . . . . . . 239,574,857 (48,973,462) 190,601,395
Less accumulated amortization . . . . . . . . . . . . . . (16,065,390) 2,472,926 (13,592,464)
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223,509,467 (46,500,536) 177,008,931
Advances to affiliates . . . . . . . . . . . . . . . . . 991,341 991,341
Other assets . . . . . . . . . . . . . . . . . . . . . . 35,853,046 (3,746,710) (2,184,677)(c) 29,921,659
Less accumulated amortization . . . . . . . . . . . . . . (15,717,850) 1,182,954 (14,534,896)
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20,135,196 (2,563,756) (2,184,677) 15,386,763
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Total assets . . . . . . . . . . . . . . . . . . . . . . $312,840,649 $ 28,715,556 $(81,319,220) $260,236,985
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</TABLE>
LIABILITIES AND PARTNERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C>
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . $ 3,330,623 $ (598,725) $ $ 2,731,898
Accrued liabilities . . . . . . . . . . . . . . . . . 4,930,691 (1,017,758) 3,912,933
Deferred revenue . . . . . . . . . . . . . . . . . . 1,991,932 (206,503) 1,785,429
Current portion of revolving credit agreement . . . . 4,875,000 (4,875,000)
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Total current liabilities . . . . . . . . . . . . . . . . 15,128,246 (1,822,986) (4,875,000) 8,430,260
Revolving credit agreement, net of current portion . . . 73,125,000 (73,125,000)
11 3/8% senior subordinated notes . . . . . . . . . . . . 174,182,769 174,182,769
Minority interest . . . . . . . . . . . . . . . . . . . . 2,840,138 305,385 (d) (723,809) 2,421,714
Partners' Equity:
Partners' contributions . . . . . . . . . . . . . . . 127,197,323 127,197,323
Cumulative net loss. . . . . . . . . . . . . . . . . . (79,632,827) 30,233,157 (d) (2,595,411)(c) (51,995,081)
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Total partners' equity 47,564,496 30,233,157 (2,595,411) 75,202,242
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Total liabilities and partners' equity . . . . . . . . . $312,840,649 $ 28,715,556 $(81,319,220) $260,236,985
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</TABLE>
See accompanying notes.
<PAGE> 8
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
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SALE OF
HORIZON GEORGIA PRO FORMA
HISTORICAL CLUSTER (e) ADJUSTMENTS PRO FORMA
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<S> <C> <C> <C> <C>
Revenues and sales:
Subscriber revenues . . . . . . . . . . . . . . . . . $ 28,610,515 $ 3,071,601 $ $ 25,538,914
Roaming revenues . . . . . . . . . . . . . . . . . . . 25,287,319 4,358,090 20,929,229
Toll revenues . . . . . . . . . . . . . . . . . . . . 4,603,618 1,039,816 3,563,802
Equipment sales . . . . . . . . . . . . . . . . . . . 2,996,780 306,131 2,690,649
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Total revenues and sales . . . . . . . . . . . . . . . . 61,498,232 8,775,638 52,722,594
Costs and expenses:
Cost of Services . . . . . . . . . . . . . . . . . . 8,814,789 1,475,453 7,339,336
Cost of equipment sales . . . . . . . . . . . . . . . 6,428,954 811,515 5,617,439
General and administrative . . . . . . . . . . . . . 13,735,363 1,716,157 12,019,206
Selling . . . . . . . . . . . . . . . . . . . . . . . 11,283,926 1,993,120 9,290,806
Depreciation and amortization . . . . . . . . . . . . 18,639,219 3,343,376 15,295,843
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58,902,251 9,339,621 49,562,630
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Income (loss) from operations . . . . . . . . . . . . . . 2,595,981 (563,983) 3,159,964
Interest expense, net . . . . . . . . . . . . . . . . . . 26,240,552 5,713,937 (f) 20,526,615
Loss before extraordinary item -------------- ------------- -------------- --------------
and minority interest (g) . . . . . . . . . . . . . . $ (23,644,571) $ (563,983) $ (5,713,937) $ (17,366,651)
============== ============= ============== ==============
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1996
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SALE OF
HORIZON GEORGIA PRO FORMA
HISTORICAL CLUSTER (e) ADJUSTMENTS PRO FORMA
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<S> <C> <C> <C> <C>
Revenues and sales:
Subscriber revenues . . . . . . . . . . . . . . . . . $ 9,100,112 $ 1,159,282 $ $ 7,940,830
Roaming revenues . . . . . . . . . . . . . . . . . . 6,931,860 1,465,341 5,466,519
Toll revenues . . . . . . . . . . . . . . . . . . . . 1,232,417 265,627 966,790
Equipment sales . . . . . . . . . . . . . . . . . . . 764,268 81,347 682,921
-------------- ------------- -------------- --------------
Total revenues and sales . . . . . . . . . . . . . . . . 18,028,657 2,971,597 15,057,060
Costs and expenses:
Cost of Services . . . . . . . . . . . . . . . . . . 2,447,051 404,610 2,042,441
Cost of equipment sales . . . . . . . . . . . . . . . 1,516,642 153,510 1,363,132
General and administrative . . . . . . . . . . . . . 3,845,802 501,287 3,344,515
Selling . . . . . . . . . . . . . . . . . . . . . . . 2,962,849 408,950 2,553,899
Depreciation and amortization . . . . . . . . . . . . 5,354,326 893,506 4,460,820
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16,126,670 2,361,863 13,764,807
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Income (loss) from operations . . . . . . . . . . . . . . 1,901,987 609,734 1,292,253
Interest expense, net . . . . . . . . . . . . . . . . . . 6,819,220 1,829,166 (f) 4,990,054
Loss before extraordinary item
-------------- ------------- -------------- --------------
and minority interest (g) . . . . . . . . . . . . . . $ (4,917,233) $ 609,734 $ (1,829,166) $ (3,697,801)
============== ============= ============== ==============
</TABLE>
See accompanying notes.
<PAGE> 9
NOTES TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENT DATA
a. Reflects the sale of the related FCC operating licenses, together with
certain operating assets and liabilities assumed by the purchasers, of
the Georgia Cluster as if the transactions had occurred on March 31,
1996.
b. Assumes the application of the $89.8 million generated from the sale
of the Georgia Cluster as follows: a) $78.0 million used to pay off
the revolving credit agreement; b) $5.3 million placed in escrow per
the sale agreements; c) $0.7 million minority interest payment; d)
$0.4 million for certain closing costs and expenses, and e) $5.4
million excess cash.
c. Represents the write-off of deferred financing fees ($2.2 million)
related to the assumed pay-off of the revolving credit agreement and
certain closing costs and expenses aggregating $0.4 million.
d. Represents the gain on the sale of the Georgia Cluster as if the sale
had occurred on March 31, 1996, not of the $0.3 million allocated to
minority interest and before write-off or deferred fees and certain
closing costs described in Note c above.
e. Reflects the actual results of operations of the Georgia Cluster for
the periods presented.
f. Represents a reduction of interest expense resulting from the assumed
pay-off of the revolving credit agreement from the application of the
proceeds of the sale.
g. Loss before extraordinary item and minority interest does not include
the gain on sale of the Georgia Cluster or any allocation to minority
interest. Minority interest primarily represents KCCGP, L.P.
