<PAGE> 1
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: April 27, 1998
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
<PAGE> 2
Item 5. Other Events.
AirTouch Communications, Inc. ("AirTouch") announced first quarter
earnings on Thursday, April 23, 1998 as described in the press release attached
as Exhibit 99.1.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit 12.1 Statement re: Computation of Ratios
Exhibit 99.1 Press Release dated April 23, 1998.
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
----------------------------------------
Mohan S. Gyani
Executive Vice President and
Chief Financial Officer
Date: April 27, 1998
2
<PAGE> 3
Exhibits Index
Exhibit 12.1 Statement re: Computation of Ratios
Exhibit 99.1 Press Release dated April 23, 1998.
3
<PAGE> 1
EXHIBIT 12.1
AIRTOUCH COMMUNICATIONS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------
1997 1997 1996
--------- -------- ------
Pro Forma
NewVector
Merger(1)
---------
<S> <C> <C> <C>
EARNINGS
Pre-tax income $ 607 $ 714 $ 348
Add back:
Minority interests in net income of
consolidated wireless systems 161 119 95
Equity in net (income) losses of less-than-
fifty-percent-owned unconsolidated
wireless systems (216) (93) 56
Distributed income of less-than-
fifty-percent-owned unconsolidated
wireless systems 286 284 1
Fixed charges included in reported pre-tax
income 227 120 80
------- ------- -----
Total $ 1,065 $ 1,144 $ 580
======= ======= =====
FIXED CHARGES
Total interest on debt $ 196 $ 103 $ 83
1/3 operating rental expense 44 30 28
Preferred stock dividends (2) 231 85 35
------- ------- -----
Total fixed charges $ 471 $ 218 $ 146
======= ======= =====
RATIO OF EARNINGS TO
FIXED CHARGES 2.3 5.2 4.0
======= ======= =====
</TABLE>
(1) Adjusted to reflect the consummation of the merger of the U.S.
cellular and PCS interests of US WEST Media Group, Inc., pursuant
to the Agreement and Plan of Merger dated January 29, 1998.
(2) Preferred stock dividends of $139 million (including pro forma
amount of $85 million) and $54 million for year ended December 31,
1997 and $20 million for the year ended December 31, 1996, were
increased to amounts of pre-tax earnings that would be required to
cover such dividends based on the effective income tax rates for
the periods presented.
<PAGE> 1
Exhibit 99.1
April 23, 1998
AIRTOUCH POSTS BEST FIRST QUARTER GROWTH EVER
- - Net Income Jumps 139 Percent
- - Company Adds Nearly 700,000 Proportionate Customers, Increasing Base 36%
- - Proportionate Operating Cash Flow Margins Exceed 40% for the First Time
SAN FRANCISCO - AirTouch Communications (NYSE:ATI) today announced record first
quarter net income and customer growth, demonstrating its ability to perform
successfully despite increasing worldwide competition. Net income applicable to
common stockholders rose 139 percent to $153 million ($0.30 per share) compared
to $64 million ($0.13 per share) in the same period last year.
First quarter earnings per share (EPS) before acquisition amortization expense
were $0.35 compared to $0.18 in 1997. This EPS measure will become increasingly
important to AirTouch when it begins amortizing intangibles from its $5.9
billion April 6 acquisition of MediaOne Group's U.S. wireless interests.
During the quarter ended March 31, 1998, AirTouch added 695,000 proportionate
wireless customers, for a total of 11.5 million proportionate worldwide
customers. The company added 655,000 proportionate cellular and PCS subscribers
- -- 92 percent more than it added in the same quarter last year. Due to explosive
global demand for wireless service, AirTouch's international ventures
contributed 70 percent of these new customers.
"The year is off to a great start. We proved again that when it comes to
profitably adding customers, AirTouch is second to none," said Sam Ginn,
chairman and chief executive officer of AirTouch Communications. "Worldwide
competition increased but that didn't slow us. We outperformed our competitors,
proving that experience, execution, and focus make a difference.
"Knowing that our large customer base is one of our key assets, we maintained
our intense focus on customer retention," Ginn continued. "In wireless, one size
doesn't fit all, so we attract and retain customers through a segmented approach
to meet their differing needs for competitive pricing plans and innovative
services."
Driven by a growing customer base, quarterly proportionate operating revenues
rose 22 percent to $1.355 billion and proportionate operating cash flow
(operating income plus depreciation and amortization) grew 32 percent to $547
million. For the first time, total company proportionate operating cash flow
(OCF) margins reached 40 percent, up from 37 percent in the same period last
year.
1
<PAGE> 2
FIRST QUARTER 1998 PROPORTIONATE RESULTS BY OPERATIONS(1)
<TABLE>
<CAPTION>
Three Months Ended March 31, 1998
-----------------------------------------------------------
U.S. U.S. CORP. HQ & TOTAL
(Dollars in millions except per share amounts) CELLULAR INTERNATIONAL PAGING U.S. PCS COMPANY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Service and other revenues(3) $ 621 $ 626 $ 89 $ 19 $1,355
Operating expenses before depreciation and
amortization expenses(4) 324 370 59 55 808
- ----------------------------------------------------------------------------------------------------------------------
Operating cash flow(5) 297 256 30 (36) 547
Depreciation and amortization expenses 102 81 19 14 216
- ----------------------------------------------------------------------------------------------------------------------
Operating income $ 195 $ 175 $ 11 $ (50) $ 331
Interest and other income (expenses) (34)
Income tax (expense) (130)
Preferred dividends (14)
- ----------------------------------------------------------------------------------------------------------------------
Net income applicable to common stockholders $ 153
======================================================================================================================
Earnings per share applicable to common stockholders,
basic and diluted $ 0.30
Acquisition amortization expense, net of applicable tax
benefits - impact per share $ 0.05
Earnings per share before acquisition amortization -
basic and diluted $ 0.35
- ----------------------------------------------------------------------------------------------------------------------
See footnotes on Page 12
</TABLE>
PROPORTIONATE U.S. CELLULAR (DOES NOT INCLUDE MEDIAONE GROUP MERGER)
Despite increased competition in all of its markets, AirTouch added 16 percent
more customers in the first quarter than it added in the same period last year.
By offering a high-quality digital service and a range of pricing plans and
promotions, the company added 171,000 proportionate U.S. cellular customers,
reaching 4,560,000 proportionate U.S. cellular customers, up 29 percent from
March 31, 1997.
AirTouch's emphasis on customer retention and cost reduction continued to pay
off during the quarter. In spite of its strong growth, proportionate operating
cash flow margins were 48 percent -- among the best reported in the industry.
After completing the launch of CDMA service in all its major markets in 1997,
AirTouch added 75,000 CDMA digital customers during the quarter, including new
customers and existing customers migrating from AirTouch's analog networks.
AirTouch now has 175,000 CDMA customers. On a proportionate basis, the company
has about 260,000 CDMA/TDMA subscribers, approximately 6 percent of its U.S.
cellular customer base.
On April 6, AirTouch announced it had completed the acquisition of MediaOne
Group's U.S. cellular and PCS interests. Because the transaction closed during
the second quarter, MediaOne Group numbers are not included in AirTouch's first
quarter results. The deal, valued at $5.9 billion, increased AirTouch's customer
base by 2.5 million. Including these subscribers, AirTouch is now the largest
wireless provider in the U.S. based on the total number of U.S. cellular and PCS
customers served by its ventures (9 million) and the world's largest
multinational wireless company based on total global venture customers (about 29
million).
AirTouch's PCS partnership, PrimeCo, continued its solid growth during the
quarter. PrimeCo added more than 120,000 subscribers, reaching a customer base
of more than 508,000.
2
<PAGE> 3
PROPORTIONATE INTERNATIONAL CELLULAR
AirTouch's international ventures produced excellent results during the quarter.
Driven by continued demand for prepaid offerings and strong growth in Germany,
Italy, and Portugal, AirTouch added 455,000 proportionate cellular customers,
159 percent more than it added in first quarter 1997. AirTouch serves 3,589,000
proportionate international customers, up 88 percent over the same period last
year.
As of March 31, proportionate international cellular customers accounted for 43
percent of AirTouch's total cellular/PCS customer base and 46 percent of its
total proportionate revenue. Due to increased scale and improved profitability
at its former start-ups, international operating cash flow rose 72 percent to
$256 million, while OCF margins reached 41 percent.
Two of AirTouch's European ventures have announced plans to issue their first
cash dividends. Sweden's Europolitan, in which AirTouch owns 51 percent, will
pay about $24 million; AirTouch will receive about $12 million. And pending
shareholder approvals, Telecel, the Portuguese operator in which AirTouch holds
51 percent, plans to issue a dividend of approximately $35 million. AirTouch's
share will be about $17 million.
U.S. PAGING
During the quarter, AirTouch's U.S. paging operations added 38,000 units in
service, reaching a total of 3,140,000. First quarter operating cash flow
increased 20 percent from the same period last year to $30 million.
Demonstrating its strong focus on profitability, the company's operating income
climbed 57 percent to $11 million. AirTouch Paging is the only large paging
company that is profitable and free cash flow positive.
1998 OUTLOOK
On April 29 AirTouch plans to announce its revised 1998 outlook to reflect the
impact of its MediaOne Group acquisition.
AirTouch Communications, based in San Francisco, is the largest multinational
wireless company in the world. AirTouch owns interests in cellular, paging, and
personal communications services in the United States, Belgium, Germany, India,
Italy, Japan, Poland, Portugal, Romania, South Korea, Spain, and Sweden, as well
as an interest in the Globalstar satellite system. Based on its ownership share
of its global ventures, the company serves 14 million proportionate customers
(29 million total venture customers) including those acquired through the April
6 MediaOne Group transaction.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:
Except for the historical information presented, the matters discussed in this
release are forward-looking statements and are subject to risks and
uncertainties that could cause actual results to differ materially. Such factors
include: a change in economic conditions in the various markets served by the
Company's operations which would adversely affect the level of demand for
wireless services; greater-than-anticipated competitive activity requiring
reduced pricing and/or new product offerings or resulting in higher acquisition
costs; declining average revenue per customer due to an increasing proportion of
consumer customers and declining rates; greater-than-expected growth in
customers and usage driving increased investment in network capacity; the level
of fraudulent activity; the impact of new business opportunities requiring
significant up-front investments; the acquisition of US WEST Inc.'s cellular
properties in the U.S.; the impact on capital spending from the deployment of
new technologies, and the possibility that technologies will not perform
according to expectations. These and other factors related to the business are
described in the Company's 10-K under "Investment Considerations" and the
quarterly reports on Form 10-Q.
For a fax copy of this or other recent AirTouch press releases, please call
1-800-344-7531, or visit the AirTouch web site at www.airtouch.com.
3
<PAGE> 4
AIRTOUCH COMMUNICATIONS - FIRST QUARTER 1998 KEY SELECTED PROPORTIONATE
OPERATING HIGHLIGHTS
(All changes compared to first quarter 1997)
TOTAL COMPANY
- --------------------------------------------------------------------------------
- - 11.5m customers, a 36% increase
- - Cellular and PCS net adds of 655,000, a 92% increase(#)
- - Service and other revenues of $1.4b, a 22% increase
- - OCF of $547m, a 32% increase
- - OCF as a % of service and other revenues of 40% compared to 37%
- - 181m cellular and PCS POPs
- - Proportionate capex of $314m, a 15% increase
- - -$2.3b in total proportionate debt
U.S. CELLULAR
- --------------------------------------------------------------------------------
- - 4.6m customers, a 29% increase
- - Net adds of 171,000, a 16% increase(#)
- - Service and other revenues of $621m, an 11% increase
- - OCF of $297m, a 9% increase
- - OCF as a % of service and other revenues of 48%, compared to 48%
- - Monthly average revenue per unit of $46.71, a 13% decrease
- - Monthly cash cost per unit of $24.37, a 13% decrease
- - 44m POPS
U.S. PAGING
- --------------------------------------------------------------------------------
- - 3.1m customers, a 7% increase
- - Net adds of 38,000, a 48% decrease(#)
- - Net operating revenues of $89m, a 13% increase
- - OCF of $30m, a 20% increase
- - OCF as a % of net operating revenues of 34% compared to 32%
U.S. PCS
- --------------------------------------------------------------------------------
- - 121,000 customers
- - Net adds of 29,000, a 61% increase
- - Service and other revenues of $19m
- - Monthly average revenue per unit of $59.86, a 4% decrease
- - Monthly cash cost per unit of $119.72, a 77% decrease
- - 14m POPs
INTERNATIONAL CELLULAR
- --------------------------------------------------------------------------------
- - 3.6m customers, an 88% increase
- - Net adds of 455,000, a 159% increase(#)
- - Service and other revenues of $626m, a 33% increase
- - OCF of $256m, a 72% increase
- - OCF as a % of service and other revenues of 41%, compared to 32%
- - Monthly average revenue per unit of $62.06, a 28% decrease
- - Monthly cash cost per unit of $36.88, a 38% decrease
- - 122m POPs
TOTAL ENTERPRISE DATA (000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total System
Customers Net Adds
--------- --------
<S> <C> <C>
U.S. Cellular/PCS 6,484 318
Germany >4,000 >458
Portugal 843 98
Sweden 474 50
Belgium 797 107
Italy 3,100 640
Spain 1,314 164
Poland ~350 ~50
Romania ~150 ~40
Japan
Digital Phone Group 2,373 108
Digital TU-KA 1,750 154
South Korea 1,178 54
India 26 2
Paging 3,349 40
------ -----
TOTAL 26,188 2,283
</TABLE>
TELECEL (PORTUGAL)
[US$ = 185.21 Escudo]
- --------------------------------------------------------------------------------
- - Stock price at 4/21/98 of 36,351 Escudo
- - YTD return of 85%
- - Per POP value of ~$400
EUROPOLITAN (SWEDEN)
[US$ = 7.77 Krona]
- --------------------------------------------------------------------------------
- - Stock price at 4/21/98 of 508 Krona
- - YTD return of 68%
- - Per POP value of ~$300
COMBINED GAAP RESULTS
- --------------------------------------------------------------------------------
- - Net Income Applicable to Common Stockholders of $153m, a 139% increase
- - Earnings Per Share of $0.30, a 131% increase
- - Weighted Shares Outstanding of 509,268,000, a 1% increase
- - Total debt of $1.5b, an 8.1% increase from year-end 1997
- - Capital expenditures and capital calls of $265m(#), a 62% increase
# Excluding Acquisitions
4
<PAGE> 5
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
====================================================================================================================
1st QTR 1st QTR
(Dollars in millions, except per share information) 1998 1997 CHANGE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating revenues:
Wireless services and other revenues $ 903 $ 787 14.7 %
Cellular and paging equipment sales 55 49 12.2 %
- --------------------------------------------------------------------------------------------------------------------
Total operating revenues 958 836 14.6 %
- --------------------------------------------------------------------------------------------------------------------
Operating expenses:
Cost of revenues 119 104 14.4 %
Cost of cellular and paging equipment sales 82 73 12.3 %
Selling and customer operations expenses 261 208 25.5 %
General, administrative, and other expenses 118 107 10.3 %
Depreciation and amortization expense 144 136 5.9 %
- --------------------------------------------------------------------------------------------------------------------
Total operating expenses 724 628 15.3 %
- --------------------------------------------------------------------------------------------------------------------
Operating income 234 208 12.5 %
Equity in net income (loss) of unconsolidated wireless systems:
U. S. (4) (2) (100.0)%
International 81 10 710.0 %
Minority interests in net (income) loss of consolidated
wireless systems (42) (39) (7.7)%
Interest:
Expense (19) (26) 26.9 %
Income 6 5 20.0 %
Miscellaneous income (expense) (10) 3 (433.3)%
- --------------------------------------------------------------------------------------------------------------------
Income before income taxes and preferred dividends 246 159 54.7 %
Income taxes 79 82 (3.7)%
- --------------------------------------------------------------------------------------------------------------------
Income before preferred dividends 167 77 116.9 %
Preferred dividends 14 13 7.7 %
- --------------------------------------------------------------------------------------------------------------------
Net income applicable to common stockholders $ 153 $ 64 139.1 %
====================================================================================================================
Net income applicable to common stockholders - per share:
Basic and Diluted $ 0.30 $ 0.13 130.8 %
====================================================================================================================
Weighted average shares outstanding (in thousands) 509,268 502,811 1.3 %
====================================================================================================================
</TABLE>
5
<PAGE> 6
CONSOLIDATED BALANCE SHEETS (Unaudited)
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
===================================================================================================================
(Dollars in millions) 3/31/98 12/31/97 CHANGE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 35 $ 1
Accounts receivable, net 445 472 (5.7)%
Inventories 84 106 (20.8)%
Other receivables 139 44 215.9 %
Due from related parties 52 48 8.3 %
Other current assets 113 51 121.6 %
- -------------------------------------------------------------------------------------------------------------------
Total current assets 868 722 20.2 %
Property, plant, and equipment, net 2,597 2,539 2.3 %
Investments in unconsolidated wireless systems 2,382 2,068 15.2 %
Intangible assets, net 3,279 3,297 (0.5)%
Deferred charges and other noncurrent assets 275 344 (20.1)%
- -------------------------------------------------------------------------------------------------------------------
Total assets $ 9,401 $ 8,970 4.8 %
===================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable - trade $ 208 $ 244 (14.8)%
Current portion of long-term debt 46 57 (19.3)%
Other current liabilities 584 675 (13.5)%
- -------------------------------------------------------------------------------------------------------------------
Total current liabilities 838 976 (14.1)%
Long-term debt 1,488 1,362 9.3 %
Deferred income taxes 731 711 2.8 %
Deferred credits 89 86 3.5 %
- -------------------------------------------------------------------------------------------------------------------
Total liabilities 3,146 3,135 0.4 %
- -------------------------------------------------------------------------------------------------------------------
Commitments and contingencies
Minority interests in consolidated wireless systems 337 306 10.1 %
- -------------------------------------------------------------------------------------------------------------------
Preferred stock and additional paid-in capital 1,041 1,041 0.0 %
Common stock and additional paid-in capital, net of treasury shares 4,343 4,079 6.5 %
Retained earnings 568 415 36.9 %
Other comprehensive income (6) 1 (700.0)%
Deferred compensation (28) (7) (300.0)%
- -------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 5,918 5,529 7.0 %
- -------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 9,401 $ 8,970 4.8 %
===================================================================================================================
</TABLE>
6
<PAGE> 7
PROPORTIONATE OPERATING DATA (Unaudited) (1)(2)
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
===================================================================================================================================
TOTAL COMPANY
FINANCIAL DATA 1st QTR 1st QTR
(Dollars in millions & operating data in thousands) 1998 1997 CHANGE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service and other revenues (3) $ 1,355 $ 1,113 21.7 %
Operating expenses before depreciation and amortization expenses (4) 808 700 15.4 %
Depreciation and amortization expenses 216 188 14.9 %
- -----------------------------------------------------------------------------------------------------------------------------------
Operating income 331 225 47.1 %
Interest and other income (expenses) (34) (24) (41.7)%
- -----------------------------------------------------------------------------------------------------------------------------------
Income before income taxes and preferred dividends 297 201 47.8 %
Income taxes 130 124 4.8 %
- -----------------------------------------------------------------------------------------------------------------------------------
Income before preferred dividends 167 77 116.9 %
Preferred dividends 14 13 7.7 %
- -----------------------------------------------------------------------------------------------------------------------------------
Net income applicable to common stockholders $ 153 $ 64 139.1 %
===================================================================================================================================
Earnings per share applicable to common stockholders - basic & diluted $ 0.30 $ 0.13 130.8 %
Operating cash flow (5) $ 547 $ 413 32.4 %
Operating cash flow margin (6) 40.4% 37.1% 8.8 %
Acquisition amortization expense, net of applicable tax benefits (7) $ 25 $ 27 (7.4)%
Earnings per share before acquisition amortization - basic & diluted (7) $ 0.35 $ 0.18 94.4 %
===================================================================================================================================
Capital expenditures and capital calls, excluding acquisitions (GAAP Basis) $ 265 $ 164 61.6 %
Proportionate capital expenditures $ 314 $ 273 15.0 %
Cellular and PCS subscriber net adds in period, excluding acquisitions (8) 655 341 92.1 %
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
OPERATING DATA (In thousands) 3/31/98 3/31/97 CHANGE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cellular and PCS POPs (8)(9) 180,759 178,367 1.3 %
Cellular and PCS subscribers (8) 8,270 5,487 50.7 %
Paging units in service (10) 3,228 2,960 9.1 %
Total proportionate customers 11,498 8,447 36.1 %
===================================================================================================================================
</TABLE>
See footnotes.
7
<PAGE> 8
PROPORTIONATE OPERATING DATA (CONTINUED) (Unaudited) (1)(2)
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
=========================================================================================================================
U.S. CELLULAR OPERATIONS
FINANCIAL DATA 1st QTR 1st QTR
(Dollars in millions & operating data in thousands, except per unit data) 1998 1997 CHANGE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service and other revenues $ 621 $ 562 10.5 %
- -------------------------------------------------------------------------------------------------------------------------
Cost of revenues 63 57 10.5 %
Selling and customer operations expenses (4) 225 197 14.2 %
General, administrative, and other expenses 36 36 0.0 %
Depreciation and amortization expenses 102 95 7.4 %
- -------------------------------------------------------------------------------------------------------------------------
Operating income $ 195 $ 177 10.2 %
- -------------------------------------------------------------------------------------------------------------------------
Operating cash flow (5) $ 297 $ 272 9.2 %
Operating cash flow margin (6) 47.8% 48.4% (1.2)%
- -------------------------------------------------------------------------------------------------------------------------
Proportionate capital expenditures $ 120 $ 66 81.8 %
Cellular subscriber net adds in period, excluding acquisitions 171 147 16.3 %
Monthly average revenue per unit $ 46.71 $ 53.95 (13.4)%
Monthly cash cost per unit $ 24.37 $ 27.84 (12.5)%
=========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
OPERATING DATA (In thousands) 3/31/98 3/31/97 CHANGE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cellular POPs (9) 44,092 43,364 1.7 %
Cellular subscribers 4,560 3,550 28.5 %
=========================================================================================================================
</TABLE>
See footnotes.
8
<PAGE> 9
PROPORTIONATE OPERATING DATA (CONTINUED) (Unaudited) (1)(2)
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
===================================================================================================================================
U.S. PCS OPERATIONS (8)
FINANCIAL DATA 1st QTR 1st QTR
(Dollars in millions & operating data in thousands, except per unit data) 1998 1997 CHANGE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service and other revenues $ 19 $ 3 533.3 %
Operating expenses before depreciation and amortization expenses (4) 38 25 52.0 %
Depreciation and amortization expenses 11 8 37.5 %
- ------------------------------------------------------------------------------------------------------------------------------------
Operating income (loss) $ (30) $ (30) 0.0 %
- ------------------------------------------------------------------------------------------------------------------------------------
Operating cash flow (5) $ (19) $ (22) 13.6 %
Operating cash flow margin (6) -100.0% -733.3% 86.4 %
====================================================================================================================================
PCS subscriber net adds in period, excluding acquisitions 29 18 61.1 %
Monthly average revenue per unit $ 59.86 $ 62.43 (4.1)%
Monthly cash cost per unit $ 119.72 $ 520.25 (77.0)%
====================================================================================================================================
</TABLE>
<TABLE>
OPERATING DATA (In thousands) 3/31/98 3/31/97 CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PCS POPs (8) (9) 14,229 14,229 0.0 %
PCS subscribers (8) 121 27 348.1 %
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
U.S. PAGING OPERATIONS (11)
FINANCIAL DATA 1st QTR 1st QTR
(Dollars in millions & operating data in thousands) 1998 1997 CHANGE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service and other revenues $ 88 $ 79 11.4 %
Equipment sales 10 9 11.1 %
Cost of equipment sales (9) (9) 0.0 %
- ------------------------------------------------------------------------------------------------------------------------------------
Net operating revenues (3) 89 79 12.7 %
- ------------------------------------------------------------------------------------------------------------------------------------
Operating expenses before depreciation and amortization expenses 59 54 9.3 %
Depreciation and amortization expenses 19 18 5.6 %
- ------------------------------------------------------------------------------------------------------------------------------------
Operating income $ 11 $ 7 57.1 %
- ------------------------------------------------------------------------------------------------------------------------------------
Operating cash flow (5) $ 30 $ 25 20.0 %
Operating cash flow margin (6) 33.7% 31.6% 6.6 %
====================================================================================================================================
Capital expenditures $ 18 $ 18 0.0 %
Units in service net adds in period, excluding acquisitions 38 73 (47.9)%
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three Months Three Months
(Dollars in millions & operating data in thousands) 1998 1997 CHANGE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service and other revenues $ 88 $ 79 11.4 %
Equipment sales 10 9 11.1 %
Cost of equipment sales (9) (9) 0.0 %
- ------------------------------------------------------------------------------------------------------------------------------------
Net operating revenues (3) 89 79 12.7 %
- ------------------------------------------------------------------------------------------------------------------------------------
Operating expenses before depreciation and amortization expenses 59 54 9.3 %
Depreciation and amortization expenses 19 18 5.6 %
- ------------------------------------------------------------------------------------------------------------------------------------
Operating income $ 11 $ 7 57.1 %
- ------------------------------------------------------------------------------------------------------------------------------------
Operating cash flow (6) $ 30 $ 25 20.0 %
Operating cash flow margin (7) 33.7% 31.6% 6.6 %
====================================================================================================================================
Capital expenditures $ 18 $ 18 0.0 %
Units in service net adds in period, excluding acquisitions 38 73 (47.9)%
====================================================================================================================================
OPERATING DATA (In thousands) 3/31/98 3/31/97 CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
Units in service 3,140 2,923 7.4 %
====================================================================================================================================
</TABLE>
See footnotes.
9
<PAGE> 10
PROPORTIONATE OPERATING DATA (CONTINUED) (Unaudited) (1)(2)
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
============================================================================================================================
INTERNATIONAL OPERATIONS
FINANCIAL DATA 1st QTR 1st QTR
(Dollars in millions & operating data in thousands, except per unit data) 1998 1997 CHANGE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service and other revenues $ 626 $ 470 33.2 %
Operating expenses before depreciation and amortization expenses (4) 370 321 15.3 %
Depreciation and amortization expenses 81 64 26.6 %
- ----------------------------------------------------------------------------------------------------------------------------
Operating income $ 175 $ 85 105.9 %
- ----------------------------------------------------------------------------------------------------------------------------
Operating cash flow (5) $ 256 $ 149 71.8 %
Operating cash flow margin (6) 40.9% 31.7% 29.0 %
- ----------------------------------------------------------------------------------------------------------------------------
Proportionate capital expenditures $ 155 $ 158 (1.9)%
Cellular subscriber net adds in period, excluding acquisitions 455 176 158.5 %
Monthly average revenue per unit $ 62.06 $ 85.96 (27.8)%
Monthly cash cost per unit $ 36.68 $ 58.71 (37.5)%
============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
OPERATING DATA (In thousands) 3/31/98 3/31/97 CHANGE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cellular POPs (9) 122,438 120,774 1.4 %
Cellular subscribers 3,589 1,910 87.9 %
============================================================================================================================
</TABLE>
See footnotes.
10
<PAGE> 11
OPERATING DATA (Unaudited)
AIRTOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
TOTAL ENTERPRISE DATA
<TABLE>
<CAPTION>
3/31/98
--------------------------- 1Q98
Total System Total System Total System
(In thousands) POPs Customers Net Adds
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. CELLULAR 65,016 5,976 198
INTERNATIONAL CELLULAR
European Operations
Germany - 34.8% 81,870 >4,000 >458
Portugal - 50.9% 9,920 843 98
Sweden - 51.1% 8,830 474 50
Belgium - 25.0% 10,130 797 107
Italy - 15.5% 57,330 3,100 640
Spain - 21.7% 39,210 1,314 164
Poland - 19.3% 38,500 ~350 ~50
Romania - 10.0% 23,200 ~150 ~40
Asian Operations
Japan
Digital Phone Group - 13.0 % - 15.0% 77,215 2,373 108
Digital TU-KA Companies * - 4.5% 46,252 1,750 154
South Korea - 10.7% 45,600 1,178 54
India - 20.0% & 49.0% 79,357 26 2
---------------------------------------
TOTAL INTERNATIONAL 517,414 16,355 1,925
---------------------------------------
PRIMECO - 25.0% (9) 60,983 508 120
---------------------------------------
TOTAL CELLULAR AND PCS 643,413 22,839 2,243
=======================================
PAGING (10) N/A 3,349 40
---------------------------------------
TOTAL ENTERPRISE 643,413 26,188 2,283
=======================================
</TABLE>
* Cost based investments which are not included in proportionate results.
See footnotes.
11
<PAGE> 12
FOOTNOTES:
(1) Because significant assets of the Company are not consolidated, the
Company believes that proportionate financial and operating data
facilitate the understanding and assessment of its results. Unlike
consolidation accounting, proportionate accounting is not in accordance
with generally accepted accounting principles ("GAAP"). Proportionate
accounting reflects the relative weight of the Company's ownership
interests in its domestic and international systems, total subscribers of
all cellular systems, and total units in service of all paging systems,
exclusive of cost-based investments and certain equity-based investments
that are not material to the Consolidated Financial Statements taken as a
whole.
(2) Proportionate debt on a Total Company basis, which includes both
consolidated and unconsolidated entities, was approximately $2.3 billion
for each of the quarters ended March 31, 1998 and 1997.
(3) Total Company "Service and other revenues" include "Net operating
revenues" of U.S. Paging Operations.
(4) Includes net losses on equipment sold to acquire and retain customers.
(5) "Operating cash flow" is defined as "Operating income" plus "Depreciation
and amortization expenses" and is not the same as cash flow from operating
activities in the Company's Consolidated Statements of Cash Flows.
Proportionate operating cash flow represents the Company's ownership
interest in the respective entities' operating cash flows. As such,
proportionate operating cash flow does not represent cash available to the
Company.
(6) "Operating cash flow margin" is calculated by dividing "Operating cash
flow" by "Service and other revenues" or in the case of U.S. Paging
Operations, dividing "Operating cash flow" by "Net operating revenues."
(7) "Acquisition amortization expense, net of applicable tax benefit" is
defined as amortization expense of intangibles related to the acquisition
of interest in wireless systems net of related tax benefits. "Earnings per
share before acquisition amortization " is calculated by adding back
"Acquisition amortization expense, net of applicable tax benefits", to
"Net income applicable to common stockholders" and dividing the results by
the "Weighted average shares outstanding". Such calculation is not in
accordance with GAAP and is shown here only to provide supplemental
financial information.
(8) PCS data relates to PrimeCo Personal Communications, L.P. ("PrimeCo"), a
U.S. personal communications service ("PCS") business in which the Company
has a 25% interest. Because PrimeCo does not own 100% of all its markets,
the Company's current effective ownership is 23.4% based on POPs (9).
(9) POPs are the estimated market population multiplied by the Company's
ownership interest in a licensee operating in that market and includes
markets in which the networks are under construction and the markets of
certain cost-basis investments not included in proportionate operating
results.
(10) Total Company "Paging units in service" include units in service in the
U.S. and Internationally.
(11) U.S. Paging Operations, which are wholly owned by the Company, include
operations in Canada.
12
