<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
December 20, 1996
- --------------------------------------------------------------------------------
Date of Report (Date of earliest event reported)
Heartland Wireless Communications, Inc.
- --------------------------------------------------------------------------------
(Exact Name of registrant as specified in its charter)
Delaware 0-23695 73-1435149
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
200 Chisholm Place, Suite 200, Plano, Texas 75075
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(972) 423-9494
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal year,
if Changed Since Last Report)
- --------------------------------------------------------------------------------
<PAGE> 2
ITEM 5. OTHER EVENTS
(a) Press Release. As permitted by General Instruction F to Form
8-K promulgated under the Securities Exchange Act of 1934, as amended,
Heartland Wireless Communications, Inc., a Delaware corporation (the
"Company"), is filing as Exhibit 99.1 to this Current Report on Form 8-K, that
press release issued by and on behalf of the Company on December 20, 1996,
which such press release is specifically incorporated herein by reference.
(b) Updated Pro Forma Financial Information. The Company hereby
updates certain pro forma financial information previously filed by the Company
by filing as Exhibit 99.2 hereto the following unaudited pro forma financial
information which is incorporated by referenced herein:
Introduction to Unaudited Pro Forma Financial Information
Unaudited Pro Forma Condensed Combined Balance Sheet as of
September 30, 1996
Unaudited Pro Forma Condensed Combined Statement of Operations for
the year ended December 31, 1995
Unaudited Pro Forma Condensed Combined Statement of Operations for
the nine months ended September 30, 1996
Notes to Unaudited Pro Forma Financial Information
The Pro Forma Statements filed as Exhibit 99.2 hereto (the
"Statements") reflect adjustments to the historical consolidated financial
statements of the Company to give effect to (i) the Transactions (as defined in
Statements), (ii) the CS Transaction (as defined in the Statements), (iii) the
payment of $6.9 million in consent solicitation fees to the holders of the
Existing Notes (as defined in the Statements), (iv) the offering of the Notes
(as defined in the Statements) and (v) certain other events.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Exhibits.
Exhibit No. Document Description
99.1 Press release issued by the Company
on December 20, 1996 (filed herewith).
99.2 Heartland Wireless Communications, Inc.
Unaudited Pro Forma Financial Information
(filed herewith).
2
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this Current Report to be signed on its behalf by
the undersigned hereunto duly authorized.
HEARTLAND WIRELESS COMMUNICATIONS, INC.
Dated: December 20, 1996 By: /s/ David D. Hagey
-----------------------------------
David D. Hagey
Vice President and Controller
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Document Description
- ----------- --------------------
<S> <C>
99.1 Press release issued by the Company on December 20, 1996
(filed herewith).
99.2 Heartland Wireless Communications, Inc. Unaudited Pro Forma
Financial Information (filed herewith).
</TABLE>
4
<PAGE> 1
FOR IMMEDIATE RELEASE
For further information contact:
John R. Bailey
Senior Vice President and Chief Financial Officer
(972) 633-4037
Russell J. Iorio
Director of Investor Communications
(972) 633-4042
HEARTLAND SELLS $125 MILLION OF SENIOR NOTES
Dallas, Texas -- December 20, 1996 -- Heartland Wireless Communications, Inc.
(Nasdaq NMS -- HART) today announced that it has sold $125.0 million aggregate
principal amount of 14% Senior Notes due 2004 through a Rule 144A offering.
Funds sufficient to pay the first three interest payments on the Notes was
placed in escrow. Heartland plans to utilize the net proceeds from the sale
primarily for its system construction, development, launch and expansion
activities and for subscriber growth in its 54 operating wireless cable
systems.
Mr. David E. Webb, President and Chief Executive Officer of Heartland,
commented, "We are proud that we were able to successfully complete the sale of
the Notes under extremely difficult market conditions. Although certain
sectors of the wireless cable industry have come under recent pressure, we
believe that the completion of this offering affirms that Heartland's business
strategy of providing affordable cable television programming to households
that are unpassed by traditional hard-wire cable systems remains firmly
intact."
***************
Heartland Wireless Communications, Inc. is America's largest wireless cable
television company. Pro-forma for previously announced acquisitions and
divestitures, Heartland currently holds wireless cable channel rights in 95
small to mid-size markets located in the central United States, representing
approximately 10.3 million households, approximately 9.2 million of which can
be served by line-of-sight transmissions. Furthermore, Heartland estimates
that within these markets approximately 3.7 million households are currently
unpassed by traditional hard-wire cable systems. At November 30, 1996,
Heartland had 54 markets with systems in operation, providing wireless cable
service to an aggregate of approximately 231,245 subscribers. In addition,
Heartland owns a 21% equity interest in Wireless One, Inc. (Nasdaq NMS --
WIRL), the largest rural wireless cable television operator in the southeastern
United States, and owns a 37% pro forma equity interest in CS Wireless Systems,
Inc., one of the largest wireless cable television companies in the United
States in terms of subscribers and line-of-sight households.
ooo
200 Chisholm Place, Suite 200 o Plano, Texas 75075 o 972-423-9494 o Fax:
972-633-0074
<PAGE> 1
HEARTLAND WIRELESS COMMUNICATIONS, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information
consists of an unaudited Pro Forma Condensed Combined Balance Sheet as of
September 30, 1996 and the related unaudited Pro Forma Condensed Combined
Statements of Operations for the year ended December 31, 1995 and the nine
months ended September 30, 1996 (collectively, the "Pro Forma Statements"). The
Pro Forma Statements reflect adjustments to the historical consolidated
financial statements of the Company to give effect to (i) the transactions
(collectively, the "Transactions") simultaneously consummated by the Company
effective February 23, 1996, wherein the Company, directly or indirectly,
acquired all of the assets and liabilities and succeeded to the businesses of
American Wireless Systems, Inc. ("AWS") and CableMaxx, Inc. ("CMAX") and
acquired substantially all of the assets and certain liabilities and succeeded
to all the businesses of Fort Worth Wireless Cable T.V. Associates, Wireless
Cable TV Associates #38, and Three Sixty Corp., successor to Technivision, Inc.
("TechniVision"), (ii) the transactions effected by the Company immediately
following the closing of the Transactions pursuant to which the Company (or
certain of its subsidiaries) contributed or sold a substantial portion of the
assets received in the Transactions and certain other assets to CS Wireless
Systems, Inc. ("CS Wireless") in exchange for (A) approximately $28.3 million in
cash, (B) shares of CS Wireless Common Stock constituting approximately 35% of
the outstanding shares of CS Wireless, (C) a $25 million promissory note payable
on or before nine months from the closing and (D) a $15 million promissory note
payable ten years from the closing and prepayable from asset sales and upon
certain other events (the "CS Transaction"), (iii) the payment of $6.9 million
in consent solicitation fees to the holders of the Company's $115 million
aggregate principal amount of 13% Senior Notes due 2003 (the "Existing Notes"),
(iv) the offering of the Company's $125 million aggregate principal amount of
14% Senior Notes due 2004 (the "Notes") and (v) certain other events. The Pro
Forma Condensed Combined Balance Sheet has been prepared assuming the payment of
$6.9 million in consent solicitation fees to the holders of the Existing Notes
and the offering of the Notes occurred on September 30, 1996. The Pro Forma
Condensed Combined Statements of Operations have been prepared assuming the
Transactions, the CS Transaction, the payment of $6.9 million in consent
solicitation fees to the holders of the Existing Notes, the offering of the
Notes and certain other acquisitions and transactions (as discussed in the Notes
to the Pro Forma Statements) occurred on January 1, 1995.
For financial reporting purposes, the Existing Notes have been treated as
being extinguished and reissued as of September 30, 1996 as a result of the
consent solicitation fees to be paid to the holders of the Existing Notes. The
Existing Notes have been recorded in the Pro Forma Statements at their estimated
fair value as of September 30, 1996 of $124.2 million. The associated write-off
of debt issuance costs related to the Existing Notes of $5.5 million, the
consent solicitation fees of $6.9 million and the adjustment of $11.6 million to
the Existing Notes to reflect their estimated fair value as of September 30,
1996 would result in an extraordinary item of approximately $24.0 million.
Assuming the Existing Notes had been recorded at their estimated fair value as
of November 27, 1996 of $115.0 million, total long term debt (including current
portion) would have been $306.0 million and, the associated extraordinary item
would have been approximately $14.8 million.
The Transactions were accounted for by the purchase method of accounting.
With respect to the Transactions, the purchase price has been allocated on a
preliminary basis to the assets and liabilities acquired based on the estimated
fair values of such assets and liabilities.
The Pro Forma Statements have been determined utilizing the historical
unaudited statement of operations of TechniVision for the year ended November
30, 1995. The TechniVision historical statement of operations for the year ended
November 30, 1995 has been derived utilizing TechniVision's historical audited
statement of operations for the year ended May 31, 1995 and unaudited statements
of operations for the six months ended November 30, 1994 and 1995. The CMAX
historical statement of operations for the year ended December 31, 1995 has been
derived utilizing CMAX's historical audited statement of operations for the year
ended June 30, 1995 and unaudited statements of operations for the six months
ended December 31, 1994 and 1995. The CMAX and TechniVision historical statement
of operations for the period from January 1, 1996 to
<PAGE> 2
February 23, 1996 has been derived utilizing unaudited statements of operations
for the two months ended February 28, 1996. No material adjustments were
recorded in determining such amounts.
The Pro Forma Statements and accompanying notes should be read in
conjunction with the historical financial statements of the Company, including
the notes thereto. The Pro Forma Statements do not purport to represent what the
Company's results of operations or financial position actually would have been
had such transactions or events occurred on the dates specified, or to project
the Company's results of operations or financial position for any future period
or date. The pro forma adjustments are based upon available information and
certain adjustments that management believes are reasonable. In the opinion of
management, all adjustments have been made that are necessary to present fairly
the Pro Forma Statements.
<PAGE> 3
HEARTLAND WIRELESS COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 1996
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
NOTES PRO FORMA
HEARTLAND OFFERING AS ADJUSTED
--------- -------- -----------
<S> <C> <C> <C>
Cash and cash equivalents................................ $ 15,144 $ 95,750 (A) $ 103,994
(6,900)(B)
Restricted investments................................... 14,533 17,000 (A) 31,533
Other current assets..................................... 9,365 9,365
--------- -------- ---------
Total current assets........................... 39,042 105,850 144,892
Systems and equipment, net............................... 128,043 128,043
License and leased license investment, net............... 131,605 131,605
Investments in affiliates................................ 98,538 98,538
Excess of cost over fair value of net assets acquired,
net.................................................... 38,072 38,072
Restricted investments................................... -- 8,000 (A) 8,000
Other assets, net........................................ 11,541 4,250 (A) 10,300
(5,491)(B)
--------- -------- ---------
$ 446,841 $112,609 $ 559,450
========= ======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt........................ $ 740 $ $ 740
Other current liabilities................................ 19,273 19,273
--------- -------- ---------
Total current liabilities...................... 20,013 -- 20,013
Long-term debt, less current portion..................... 177,858 125,000 (A) 314,505
11,647 (B)
Deferred income taxes.................................... 28,756 28,756
Other liabilities........................................ 239 239
Stockholders' equity..................................... 219,975 (24,038)(B) 195,937
--------- -------- ---------
$ 446,841 $112,609 $ 559,450
========= ======== =========
</TABLE>
See accompanying notes to Pro Forma Statements
<PAGE> 4
HEARTLAND WIRELESS COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA ADJUSTMENTS
-------------------------------------------------------------------------- ----------------------
FTW MINNEAPOLIS PURCHASE
HEARTLAND CMAX AWS PARTNERSHIP PARTNERSHIP TECHNIVISION ACCOUNTING OTHER
---------- -------- ------- ----------- ----------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................. $ 15,300 $ 14,292 $ 100 $ 597 $ 982 $ 6,716 $ -- $ 1,284(H)
---------- -------- ------- ------- ------- ------- --------- -------
Operating expenses:
Systems operations..... 4,893 6,928 -- 526 1,435 3,306 -- 627(H)
250(I)
Selling, general and
administrative....... 11,887 8,512 2,123 768 735 3,029 (1,862)(C) 587(H)
350 (D)
Depreciation and
amortization......... 6,234 9,876 83 779 1,072 2,600 2,974 (E) 351(H)
1,122 (F) 270(J)
---------- -------- ------- ------- ------- ------- --------- -------
Total operating
expenses......... 23,014 25,316 2,206 2,073 3,242 8,935 2,584 2,085
---------- -------- ------- ------- ------- ------- --------- -------
Operating loss..... (7,714) (11,024) (2,106) (1,476) (2,260) (2,219) (2,584) (801)
Interest expense......... (13,717) (1,267) (161) -- -- (1,469) -- --
Equity in losses of
affiliates............. (1,369) -- (188) -- -- -- 188 (G) 129(K)
Interest income and
other.................. 2,613 142 763 59 131 3,616 (188) (G) --
---------- -------- ------- ------- ------- ------- --------- -------
Loss before income
taxes and
extraordinary
item............. (20,187) (12,149) (1,692) (1,417) (2,129) (72) (2,584) (672)
Income tax benefit....... 4,285 -- -- -- -- -- -- 12,273(L)
---------- -------- ------- ------- ------- ------- --------- -------
Loss before
extraordinary
item............. $ (15,902) $(12,149) $(1,692) $(1,417) $(2,129) $ (72) $ (2,584) $11,601
========== ======== ======= ======= ======= ======= ========= =======
Loss per share before
extraordinary item..... $ (1.34)
==========
Weighted average shares
outstanding............ 11,865,551 6,757,166 (O) 623,043(O)
========== ========= =======
<CAPTION>
PRO FORMA
ADJUSTMENTS
---------------
INVESTMENTS IN
WIRELESS ONE
AND NOTES PRO FORMA
CS WIRELESS PRO FORMA OFFERING AS ADJUSTED
-------------- ---------- -------- -----------
<S> <C> <C> <C> <C>
Revenues................. $ (632)(N) $ 32,994 -- $ 32,994
(5,645)(M)
-------- ----------
Operating expenses:
Systems operations..... (4,111)(M) 13,454 13,454
(400)(N)
Selling, general and
administrative....... (5,472)(M) 20,309 20,309
(348)(N)
Depreciation and
amortization......... (8,506)(M) 16,661 16,661
(194)(N)
-------- ----------
Total operating
expenses......... (19,031) 50,424 -- 50,424
-------- ----------
Operating loss..... 12,754 (17,430) (17,430)
Interest expense......... 161(M) (16,453) (18,031) (P) (32,784)
1,700 (Q)
Equity in losses of
affiliates............. (4,954)(N) (18,564) (18,564)
(12,370)(M)
Interest income and
other.................. (763)(M) 6,373 6,373
-------- ----------
Loss before income
taxes and
extraordinary
item............. (5,172) (46,074) (16,331) (62,405)
Income tax benefit....... -- 16,558 6,042 (L) 22,600
-------- ----------
Loss before
extraordinary
item............. $ (5,172) $ (29,516) (10,289) (39,805)
======== ==========
Loss per share before
extraordinary item..... $ (1.53) $ (2.06)
==========
Weighted average shares
outstanding............ 78,242(O) 19,324,002 19,324,002
======== ==========
</TABLE>
See accompanying notes to Pro Forma Statements.
<PAGE> 5
HEARTLAND WIRELESS COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
FOR THE NINE PRO FORMA
MONTHS ENDED FOR THE PERIOD JANUARY 1, 1996 TO FEBRUARY 23, 1996 ADJUSTMENTS
SEPTEMBER 30, 1996 ----------------------------------------------------------- -----------
------------------ FTW MINNEAPOLIS PURCHASE
HEARTLAND CMAX AWS PARTNERSHIP PARTNERSHIP TECHNIVISION ACCOUNTING
------------------ ------- ----- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues..................... $ 38,964 $ 2,535 $ 15 $ 85 $ 148 $1,053 $ --
---------- ------- ----- ----- ----- ------ ---------
Operating expenses:
Systems operations......... 13,179 1,043 -- 86 480 570
Selling, general and
administrative........... 23,865 1,369 317 96 218 522 (271)(C)
Depreciation and
amortization............. 18,150 2,366 21 117 172 319 739 (E)
175 (F)
---------- ------- ----- ----- ----- ------ ---------
Total operating
expenses........... 55,194 4,778 338 299 870 1,411 643
---------- ------- ----- ----- ----- ------ ---------
Operating loss....... (16,230) (2,243) (323) (214) (722) (358) (643)
Interest expense............. (15,167) (185) (12) -- -- (161)
Equity in losses of
affiliates................. (12,702) -- (38) -- -- -- 38 (G)
Interest income and other.... 8,182 4 (2) 8 30 -- (38)(G)
---------- ------- ----- ----- ----- ------ ---------
Loss before income
taxes and
extraordinary
item............... (35,917) (2,424) (375) (206) (692) (519) (643)
Income tax benefit........... 11,826 -- -- -- -- --
---------- ------- ----- ----- ----- ------ ---------
Loss before
extraordinary
item............... $ (24,091) $(2,424) $(375) $(206) $(692) $ (519) $ (643)
========== ======= ===== ===== ===== ====== =========
Loss per share before
extraordinary item......... $ (1.33)
==========
Weighted average shares
outstanding................ 18,103,000 1,329,678 (O)
========== =========
<CAPTION>
PRO FORMA
ADJUSTMENTS
-------------
INVESTMENT IN
CS WIRELESS NOTES PRO FORMA
AND OTHER PRO FORMA OFFERING AS ADJUSTED
------------- ---------- -------- -----------
<S> <<C> <C> <C> <C>
Revenues..................... $(1,500)(M) $ 41,300 -- $ 41,300
------- ---------- ------- ----------
Operating expenses:
Systems operations......... (1,201)(M) 14,157 14,157
Selling, general and
administrative........... (1,242)(M) 24,874 24,874
Depreciation and
amortization............. (1,469)(M) 20,590 20,590
------- ---------- ------- ----------
Total operating
expenses........... (3,912) 59,621 -- 59,621
------- ---------- ------- ----------
Operating loss....... 2,412 (18,321) -- (18,321)
Interest expense............. 128(M) (15,397) (13,523)(P) (27,220)
1,700 (Q)
Equity in losses of
affiliates................. (4,015)(M) (16,717) (16,717)
Interest income and other.... 8,184 8,184
------- ---------- ------- ----------
Loss before income
taxes and
extraordinary
item............... (1,475) (42,251) (11,823) (54,074)
Income tax benefit........... (3,376) 8,450 8,450
------- ---------- ------- ----------
Loss before
extraordinary
item............... $(4,851) $ (33,801) $(11,823) $ (45,624)
======= ========== ======= ==========
Loss per share before
extraordinary item......... $ (1.74) $ (2.35)
========== ==========
Weighted average shares
outstanding................ 19,432,678 19,432,678
========== ==========
</TABLE>
See accompanying notes to Pro Forma Statements.
<PAGE> 6
HEARTLAND WIRELESS COMMUNICATIONS, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(A) Reflects the issuance of the Notes, net of estimated debt issuance costs of
$4.25 million, and the payment of $6.9 million in bondholder consent
solicitation fees. The Company will place approximately $25.0 million of the
net proceeds realized from the sale of the Notes, representing funds
sufficient to pay the first three interest payments on the Notes, into an
Escrow Account to be held by an Escrow Agent for the benefit of the holders
of the Notes.
(B) Reflects the write-off of debt issuance costs related to the Existing Notes
and the adjustment of the Existing Notes to their estimated fair value as
of September 30, 1996. For financial reporting purposes, the Existing Notes
have been treated as being extinguished and reissued as of September 30,
1996 as a result of the consent solicitation fees to be paid to the holders
of the Existing Notes.
(C) Reflects the elimination of certain historical corporate general and
administrative expenses that, in the opinion of Company management, will not
be incurred by the Company. Such expenses consist primarily of management
fees, salaries of officers and other duplicative corporate personnel and
professional fees.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995 CMAX TECHNIVISION TOTAL
---------------------------- ------ ------------ ------
<S> <C> <C> <C>
Compensation(a).......................................... $ 513 $ -- $ 513
Office, legal, BOD and other(b).......................... 849 -- 849
Management fees.......................................... 230 270 500
------ ---- ------
$1,592 $270 $1,862
====== ==== ======
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1996
------------------------------
<S> <C> <C> <C>
Compensation(a).......................................... $ 74 $ -- $ 74
Office, legal, BOD and other(b).......................... 197 -- 197
------ ---- ------
$ 271 $ -- $ 271
====== ==== ======
</TABLE>
(a) Represents 50% of historical corporate compensation expense of CMAX.
(b) Represents historical expenses related to corporate office, legal,
board of director fees and shareholder costs.
(D) Reflects the additional expense from the non-competition and consulting
agreement with an AWS executive officer.
(E) Reflects incremental amortization of license and leased license investment
associated with the Transactions. Amortization of license and leased
license investment is calculated beginning with inception of service in
each respective market over an estimated useful life of 20 years.
(F) Reflects incremental amortization of excess of cost over fair value of net
assets acquired in the Transactions. Excess of cost over fair value of net
assets required is amortized over an estimated useful life of 20 years.
(G) Reflects the elimination of AWS' share of the losses of the Fort Worth and
Minneapolis joint ventures.
(H) Reflects the historical revenues and expenses associated with the
acquisitions of wireless cable systems in Lubbock, Texas in May 1995,
Lykens, Ohio in July 1995, Paragould, Arkansas in July 1995, and Sikeston,
Missouri in July 1995, until the respective acquisition dates of such
systems.
(I) Reflects the incremental lease rental payments associated with the 1995
purchases by and distribution to the Company of certain non-operating
markets previously owned by RuralVision Joint Venture.
<PAGE> 7
HEARTLAND WIRELESS COMMUNICATIONS, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(J) Reflects the incremental amortization of license and leased license
investment associated with the acquisitions of wireless cable systems in
Lubbock, Texas; Lykens, Ohio; Paragould, Arkansas; and Sikeston, Missouri
and the incremental amortization of the excess of cost over fair value of
net assets acquired associated with the acquisitions of certain minority
interests in March 1995. The acquisition dates of each respective system
are set forth in note (H). Amortization of license and leased license
investment is calculated beginning with inception of service in each
respective market.
(K) Reflects the reversal of equity in losses in RuralVision Joint Venture due
to the termination of such venture in January 1995 and acquisition of such
venture's markets by the Company.
(L) Reflects the adjustment to income tax benefit related to the pro forma
adjustments. Income tax benefit reflects the recognition of deferred tax
assets to the extent such assets can be realized through reversals of
existing taxable differences.
(M) Reflects the elimination of historical revenues and expenses (as adjusted
for additional amortization related to license and lease license investment
for the markets acquired in the Transactions) associated with the net assets
contributed to CS Wireless and the Company's equity in pro forma losses of
CS Wireless.
(N) Reflects the elimination of historical revenues and expenses associated with
the wireless cable systems located in Milano, Texas and Monroe, Louisiana
which were contributed to Wireless One, Inc. and the Company's equity in pro
forma losses of Wireless One, Inc.
(O) Reflects the effect of shares issued in connection with the Transactions,
the transaction with Wireless One, Inc. and certain other transactions as if
each had occurred as of January 1, 1995.
(P) Reflects additional interest expense at a rate of 14.0% and amortization of
estimated debt issuance costs of $4.25 million associated with the Notes.
(Q) Reflects the estimated reduction in interest expense associated with the
write-off of debt issuance costs related to the Existing Notes and the
adjustment of the Existing Notes to their estimated fair value as of
September 30, 1996 as set forth in note (B).
