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Previous: EQUITY INCOME FUND CONCEPT SERIES NATURAL GAS TRUST 2 DAF, 485BPOS, 1995-09-21 |
Next: AIRTOUCH COMMUNICATIONS, S-3, 1995-09-21 |
<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: September 20, 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
1
<PAGE> 2
Item 5.
This Current Report on Form 8-K is being filed by AirTouch
Communications, Inc. pursuant to the requirements of Form S-3 under the
Securities Act of 1933.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
The audited financial statements of Cellular Communications, Inc. and
Subsidiaries ("CCI") as of December 31, 1994 and 1993 and for the three
years in the period ended December 31, 1994, and unaudited interim
financial statements of CCI as of June 30, 1995 and for the three- and
six-month periods ended June 30, 1995, required hereunder are
incorporated by reference from Item 8 of CCI's Annual Report on Form 10-K
for the year ended December 31, 1994 (Commission File Number 1-10789),
dated March 24, 1995, and Item 1 of CCI's Quarterly Report on Form 10-Q
for the period ended June 30, 1995 (Commission File Number 1-10789),
dated August 10, 1995.
(b) Pro Forma Financial Information
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<PAGE> 3
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements
have been prepared based on the historical financial statements of AirTouch
Communications, Inc. (the "Company"), adjusted to give effect to 1) the intended
October 1995 purchase of an additional 25% of CCI for approximately $720
million, as part of a multi-step acquisition of CCI (see Note F to the 1994
Consolidated Financial Statements) and 2) the Company's borrowing against a
revolving credit facility to finance the purchase. These unaudited pro forma
condensed consolidated financial statements are not necessarily indicative of
the results of future operations.
The pro forma condensed consolidated statements of income data for the year
ended December 31, 1994 and for the six months ended June 30, 1995 have been
prepared as if the transactions described above occurred at the beginning of
such periods. Accordingly, the historical consolidated statements of income were
affected as follows: interest expense was increased by $36.9 million and $23.7
million for the year ended December 31, 1994 and the six months ended June 30,
1995, respectively; and equity in net income of unconsolidated wireless systems
was decreased by $12.3 million and $3.3 million for the year ended December 31,
1994 and the six months ended June 30, 1995, respectively.
The pro forma condensed consolidated balance sheets as of December 31, 1994 and
June 30, 1995 have been presented as if the transactions had been consummated on
those respective dates. The Company's investment in CCI is accounted for as an
equity method investment.
3
<PAGE> 4
<TABLE>
<CAPTION>
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1994
Borrowings to
Acquisition of 25% CCI Finance CCI Acquisition
Pro Forma Adjustments Pro Forma Adjustments
As ---------------------- -----------------------
(Dollars in millions, except per share amounts) Reported DR CR DR CR Pro Forma
-------- -------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Wireless services and other revenues $1,139.0 $ $ $ $ $1,139.0
Cellular and paging equipment sales 96.4 96.4
-------- ---------
Total Operating Revenues 1,235.4 1,235.4
OPERATING EXPENSES:
Cost of revenues 155.9 155.9
Cost of cellular and paging equipment sales 99.2 99.2
Selling and customer operations expenses 389.8 389.8
General, administrative, and other expenses 312.6 312.6
Depreciation and amortization 205.3 205.3
-------- ---------
Total Operating Expenses 1,162.8 1,162.8
OPERATING INCOME 72.6 72.6
Interest expense (10.3) 36.9(3) (47.2)
Minority interests in net income of consolidated
wireless systems (16.3) (16.3)
Equity in net income (loss) of unconsolidated
wireless systems:
Domestic 125.4 16.7(1) 4.4(2) 113.1
International (14.7) (14.7)
Interest income 54.7 54.7
Miscellaneous income (expense) (5.0) (5.0)
-------- ---------
INCOME BEFORE INCOME TAXES 206.4 157.2
Income taxes 108.3 15.2(4) 93.1
-------- ---------
NET INCOME $ 98.1 $ 64.1
======== ========
NET INCOME PER SHARE $ 0.20 (5) $ 0.13 (5)
======== ========
Weighted average shares outstanding (in millions) 493.4 493.4
======== ========
</TABLE>
See explanatory Notes to Pro Forma Condensed Consolidated Financial Statements.
4
<PAGE> 5
<TABLE>
<CAPTION>
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1994
Borrowings to
Acquisition of 25% CCI Finance CCI Acquisition
Pro Forma Adjustments Pro Forma Adjustments
As ---------------------- -----------------------
(Dollars in millions) Reported DR CR DR CR Pro Forma
-------- ---------------------- ----------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets $1,266.3 $ $ $ $ $1,266.3
Property, plant, and equipment 1,560.7 1,560.7
Less: accumulated depreciation 585.4 585.4
-------- --------
Net property, plant, and equipment 975.3 975.3
Investments in unconsolidated wireless systems 1,697.9 720.0(6) 2,417.9
Intangible assets, net 470.5 470.5
Deferred charges and other noncurrent assets 78.0 78.0
-------- --------
Total Assets $4,488.0 $5,208.0
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 529.8 $ 529.8
Long-term debt 120.2 720.0(7) 840.2
Deferred income taxes 209.2 209.2
Deferred credits 39.4 39.4
-------- --------
Total liabilities 898.6 1,618.6
Minority interests in consolidated wireless systems 129.8 129.8
-------- --------
Stockholders' Equity
Preferred stock ($.01 par value; 50,000,000 shares
authorized; no shares issued or outstanding)
Common stock ($.01 par value; 1,100,000 shares
authorized; 493,915,064 shares issued and
493,792,104 shares outstanding) 4.9 4.9
Additional paid-in capital 3,730.4 3,730.4
Accumulated deficit (290.0) (290.0)
Cumulative translation adjustment 11.1 11.1
Other 3.2 3.2
-------- --------
Total stockholders' equity 3,459.6 3,459.6
-------- --------
Total Liabilities and Stockholders' Equity $4,488.0 $5,208.0
======== ========
</TABLE>
See explanatory Notes to Pro Forma Condensed Consolidated Financial Statements.
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<PAGE> 6
<TABLE>
<CAPTION>
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Six Months Ended June 30, 1995
Borrowings to
Acquisition of 25% CCI Finance CCI Acquisition
As Pro Forma Adjustments Pro Forma Adjustments
(Dollars in millions, except per share amounts) Reported DR CR DR CR Pro Forma
-------- ---------------------- ----------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Wireless services and other revenues $708.3 $ $ $ $ $708.3
Cellular and paging equipment sales 54.0 54.0
------ ------
Total Operating Revenues 762.3 762.3
OPERATING EXPENSES:
Cost of revenues 96.5 96.5
Cost of cellular and paging equipment sales 60.9 60.9
Selling and customer operations expenses 247.8 247.8
General, administrative, and other expenses 167.7 167.7
Depreciation and amortization 100.8 100.8
------ ------
Total Operating Expenses 673.7 673.7
OPERATING INCOME 88.6 88.6
Interest expense (4.4) 23.7(3) (28.1)
Minority interests in net income of consolidated
wireless systems (13.6) (13.6)
Equity in net income (loss) of unconsolidated
wireless systems:
Domestic 78.8 8.3(1) 5.0(2) 75.5
International (11.3) (11.3)
Interest income 23.1 23.1
Miscellaneous income (expense) (8.8) (8.8)
------ ------
INCOME BEFORE INCOME TAXES 152.4 125.4
Income taxes 78.4 9.6(4) 68.8
NET INCOME $ 74.0 $ 56.6
====== ======
NET INCOME PER SHARE $ 0.15 (5) $ 0.11 (5)
====== ======
Weighted average shares outstanding (in millions) 494.3 494.3
====== ======
</TABLE>
See explanatory Notes to Pro Forma Condensed Consolidated Financial Statements.
6
<PAGE> 7
<TABLE>
<CAPTION>
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1995
Borrowings to
Acquisition of 25% CCI Finance CCI Acquisition
Pro Forma Adjustments Pro Forma Adjustments
As ---------------------- ------------------------
(Dollars in millions) Reported DR CR DR CR Pro Forma
-------- ---------------------- ------------------------ ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets $ 597.5 $ $ $ $ $ 597.5
Property, plant, and equipment 1,839.0 1,839.0
Less: accumulated depreciation 661.8 661.8
-------- --------
Net property, plant, and equipment 1,177.2 1,177.2
Investments in unconsolidated wireless systems 2,250.7 720.0(6) 2,970.7
Intangible assets, net 496.5 496.5
Deferred charges and other noncurrent assets 77.1 77.1
-------- --------
Total Assets $4,599.0 $5,319.0
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 404.7 $ 404.7
Long-term debt 123.1 720.0(7) 843.1
Deferred income taxes 216.3 216.3
Deferred credits 143.3 143.3
-------- --------
Total liabilities 887.4 1,607.4
Minority interests in consolidated wireless systems 137.5 137.5
-------- --------
Stockholders' Equity:
Preferred stock ($.01 par value; 50,000,000 shares
authorized; no shares issued or outstanding)
Common stock ($.01 par value; 1,100,000 shares
authorized; 494,961,876 shares issued and
494,795,514 shares outstanding) 4.9 4.9
Additional paid-in capital 3,750.9 3,750.9
Accumulated Deficit (216.0) (216.0)
Cumulative translation adjustment 14.6 14.6
Other 19.7 19.7
-------- --------
Total stockholders' equity 3,574.1 3,574.1
-------- --------
Total Liabilities and Stockholders' Equity $4,599.0 $5,319.0
======== ========
</TABLE>
See explanatory Notes to Pro Forma Condensed Consolidated Financial Statements.
7
<PAGE> 8
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
EXPLANATORY NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(1) Reflects amortization of excess purchase price over underlying 25% equity
interest in CCI intended to be acquired. The straight-line method of
amortization is being used over forty years.
(2) Represents the Company's additional share of CCI's net income resulting
from the expected acquisition of 25% additional equity in CCI.
(3) Represents interest expense incurred on $720 million borrowings used to
finance the purchase of 25% additional equity in CCI, based on average
interest rates of 5.127% and 6.579% for the year ended December 31, 1994
and the six months ended June 30, 1995, respectively.
(4) Reflects income tax benefit from interest expense on $720 million
borrowings, based on effective tax rates of 41.24% and 40.65% at December
31, 1994 and June 30, 1995, respectively.
(5) Pro forma net income per share is calculated based on weighted average
shares of 493,350,500 and 494,338,389 for the year ended December 31, 1994
and the six months ended June 30, 1995, respectively.
(6) Represents the purchase price of the expected acquisition of 25% additional
interest in CCI.
(7) Reflects borrowings against the Company's revolving credit facility to
finance the purchase of 25% additional interest in CCI.
8
<PAGE> 9
Exhibits
23.1 Consent of Ernst & Young LLP, independent auditors
99.0 The audited financial statements of CCI as of December 31, 1994 and 1993
and for the three years in the period ended December 31, 1994, and
unaudited interim financial statements of CCI as of June 30, 1995 and
for the three- and six-month periods ended June 30, 1995
(incorporated by reference from Item 8 of CCI's Annual
Report on Form 10-K for the year ended December 31, 1994 (Commission
File Number 1-10789), dated March 24, 1995, and Item 1 of CCI's
Quarterly Report on Form 10-Q for the period ended June 30, 1995
(Commission File Number 1-10789), dated August 10, 1995).
9
<PAGE> 10
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/ Lydell L. Christensen
----------------------------
Lydell L. Christensen
Executive Vice President and
Chief Financial Officer
Date: September 20, 1995
10
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
23.1 Consent of Ernst & Young LLP, independent auditors
99.0 The audited financial statements of CCI as of December 31, 1994
and 1993 and for the three years in the period ended December
31, 1994, and unaudited interim financial statements of CCI as
of June 30, 1995 and for the three- and six-month periods ended
June 30, 1995, (incorporated by reference from Item 8
of CCI's Annual Report on Form 10-K for the year ended
December 31, 1994 (Commission File Number 1-10789), dated
March 24, 1995, and Item 1 of CCI's Quarterly Report on Form
10-Q for the period ended June 30, 1995 (Commission File Number
1-10789), dated August 10, 1995).
</TABLE>
11
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Form 8-K of AirTouch
Communications, Inc. relating to the acquisition of an additional 25% of
Cellular Communications, Inc. of our report dated February 16, 1995 with respect
to the consolidated financial statements and schedule of Cellular
Communications, Inc. included in its Annual Report (Form 10-K) for the year
ended December 31, 1994 filed with the Securities and Exchange Commission.
/s/ Ernst & Young, LLP
New York, New York
September 18, 1995
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