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UNITED STATES
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: October 10, 1995
AirTouch Communications, Inc.
Delaware 1-12342 94-3213132
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
One California Street, San Francisco, California 94111
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415)658-2000
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Item 5. Other Events.
AirTouch Communications, Inc. ("AirTouch") and U S West Inc. announced today
that the two companies have established a support relationship between their
joint venture management company, the Wireless Management Company ("WMC"), and
their respective domestic cellular businesses effective November 1, 1995. WMC
will serve as a single management resource providing support services to the two
companies' domestic cellular operations, which will remain separately owned
during this phase. The establishment of the support relationship represents the
first phase of the joint venture, Phase I, and follows completion of contractual
agreements between the two partners, regulatory approvals, and U S West's
exchange of its San Diego cellular property for several GTE cellular properties
including Portland, Oregon.
The next phase of the joint venture, Phase II, will involve a merger of each of
the two companies' domestic cellular operations into the WMC. This will take
place upon the lifting of certain regulatory restrictions imposed on U S West
by the Modification of Final Judgment (or earlier at AirTouch's option), but
will occur in any event no later than July 25, 1998. When merged, AirTouch and
U S West will hold interests of approximately 70 percent and 30 percent,
respectively, in the WMC. At such time each company will deconsolidate for
financial reporting purposes the domestic cellular operations contributed by it
to the WMC, using instead the equity method of accounting to report their
respective percentage interests in subsequent operating results. Because
AirTouch expects, based upon current results, that its domestic cellular
operations over the next few years will continue to achieve higher profit
margins than those of U S West, it is possible that AirTouch could experience
some short term earnings dilution once Phase II occurs. Such dilution could be
material depending upon the timing of the Phase II merger and the performance
of the respective operations. AirTouch may experience some near term minor
earnings impact prior to the Phase II merger as a result of entering into the
support relationship.
The two companies' equally-owned PCS partnership also will be contributed to the
WMC either at the closing of Phase II or thereafter, but no later than three
years after the partnership acquired its first PCS license. The timing of such
contribution is at U S West's sole discretion. AirTouch expects the PCS
partnership to make significant capital contributions for the buildout of PCS
markets and to experience substantial operating losses associated with the start
up phase of the PCS business, which is expected to last several years. Upon the
contribution of the PCS partnership to WMC, AirTouch's share of the PCS capital
contributions and operating losses will increase to some greater percentage
depending upon the relative values of the WMC and the PCS partnership at such
time.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AIRTOUCH COMMUNICATIONS, INC.
By: /s/ Mohan S. Gyani
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Mohan S. Gyani
Executive Vice President and
Chief Financial Officer
Date: October 10, 1995
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