<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
Registration Number 333-2432
PROSPECTUS SUPPLEMENT NO. 1
TO
PROSPECTUS DATED MAY 22, 1996
--------------
[WESTERN WIRELESS LOGO]
WESTERN WIRELESS CORPORATION
CLASS A COMMON STOCK
(NO PAR VALUE PER SHARE)
--------------
SEE "RISK FACTORS" BEGINNING ON PAGE 12 OF THE PROSPECTUS DATED MAY 22,
1996 FOR CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE CLASS A COMMON
STOCK.
The Class A Common Stock is quoted on the
Nasdaq National Market under the symbol "WWCA."
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
This Prospectus Supplement, together with the Prospectus dated May 22,
1996, has been prepared for and is to be used by Goldman, Sachs & Co. in
connection with offers and sales of the shares of Class A Common Stock related
to market-making transactions, at prevailing market prices, related prices or
negotiated prices. The Company will not receive any of the proceeds of such
sales. Goldman, Sachs & Co. may act as principal or agent in such transactions.
See "Plan of Distribution."
GOLDMAN, SACHS & CO.
--------------
The date of this Prospectus Supplement is August 14, 1996.
<PAGE> 2
This Prospectus Supplement is intended to be read in conjunction with
the Prospectus dated May 22, 1996 with respect to the Class A Common Stock (the
"Prospectus"). Capitalized terms used in this Prospectus Supplement and not
otherwise defined herein have the same meanings as in the Prospectus.
The initial closings for the Offerings and the Debt Offering referred
to in the Prospectus occurred on May 29, 1996. The Underwriters exercised their
over-allotment options in full in connection with the Offerings. The
over-allotment options closed on June 11, 1996.
On August 14, 1996, the Company filed with the Securities and Exchange
Commission a report on Form 10-Q, a copy of which is attached hereto and deemed
to be a part hereof.
<PAGE> 3
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 333-2432
WESTERN WIRELESS CORPORATION
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1638901
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2001 NW SAMMAMISH ROAD
ISSAQUAH, WASHINGTON 98027
(Address of principal executive offices) (Zip Code)
(206) 313-5200
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No X
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Title Shares Outstanding as of July 31, 1996
----- --------------------------------------
<S> <C>
Class A Common Stock, no par value 12,734,190
Class B Common Stock, no par value 56,661,721
</TABLE>
Page 1 of 22 sequentially numbered pages
1
<PAGE> 4
WESTERN WIRELESS CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets
as of June 30, 1996, and December 31, 1995............................... 3
Consolidated Statements of Operations
for the Three and Six Months Ended June 30, 1996 and June 30, 1995....... 4
Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 1996 and June 30, 1995................. 5
Notes to Consolidated Financial Statements............................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS................................ 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.............................................................. 20
ITEM 2. CHANGES IN SECURITIES.......................................................... 20
ITEM 3. DEFAULTS UPON SENIOR SECURITIES................................................ 20
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................ 20
ITEM 5. OTHER INFORMATION.............................................................. 20
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................................... 21
</TABLE>
2
<PAGE> 5
PART 1. FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
WESTERN WIRELESS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 90,729 $ 8,572
Accounts receivable, net of allowance for doubtful accounts
of $3,061 and $2,800, respectively 23,578 18,074
Inventory 16,602 5,361
Prepaid expenses and other current assets 7,288 4,001
Deposit held by FCC 1,500
--------- ---------
Total current assets 138,197 37,508
Property and equipment, net of accumulated depreciation
of $74,508 and $53,423, respectively 296,769 193,692
Licensing costs and other intangible assets, net of accumulated
amortization of $40,923 and $28,364, respectively 538,816 417,971
Investments in and advances to unconsolidated affiliates 5,088 8,388
Other assets 1,094 1,469
--------- ---------
$ 979,964 $ 659,028
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,812 $ 7,568
Accrued liabilities 20,112 16,659
Construction accounts payable 57,742 28,408
Unearned revenue and customer deposits 4,601 3,301
--------- ---------
Total current liabilities 90,267 55,936
--------- ---------
Long-term debt, net of current portion 446,471 362,487
--------- ---------
Commitments and contingent liabilities (Note 5)
Shareholders' equity:
Preferred stock, no par value, 50,000,000 shares authorized; no shares
issued and outstanding
Common stock, no par value, 300,000,000 shares authorized;
Class A, 12,734,190 and 0 shares issued and outstanding,
respectively, and Class B, 56,661,721 and 58,047,235 shares 568,624 324,729
issued and outstanding, respectively
Deferred compensation (1,104)
Deficit (124,294) (84,124)
--------- ---------
Total shareholders' equity 443,226 240,605
--------- ---------
$ 979,964 $ 659,028
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 6
WESTERN WIRELESS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------------------ -------------------------------
1996 1995 1996 1995
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Subscriber revenues $ 43,814 $ 24,584 $ 79,151 $ 43,551
Roamer revenues 9,114 7,165 15,871 11,967
Equipment sales and other revenue 5,641 2,864 9,582 5,179
----------- ----------- ----------- ------------
Total revenues 58,569 34,613 104,604 60,697
----------- ----------- ----------- ------------
Operating expenses:
Cost of service 10,739 6,346 19,554 12,132
Cost of equipment sales 8,438 5,020 14,792 8,890
General and administrative 16,139 6,899 28,409 13,153
Sales and marketing 18,587 9,247 32,078 16,411
Depreciation and amortization 17,824 11,124 33,434 21,900
----------- ----------- ----------- ------------
Total operating expenses 71,727 38,636 128,267 72,486
----------- ----------- ----------- ------------
Operating loss (13,158) (4,023) (23,663) (11,789)
----------- ----------- ----------- ------------
Other income (expense):
Interest and financing expense, net (8,880) (6,302) (17,014) (11,329)
Other, net 442 180 507 510
----------- ----------- ----------- ------------
Total other income (expense) (8,438) (6,122) (16,507) (10,819)
----------- ----------- ----------- ------------
Loss before extraordinary item (21,596) (10,145) (40,170) (22,608)
Extraordinary loss on early extinguishment
of debt (6,645) (6,645)
----------- ----------- ----------- ------------
Net loss $ (21,596) $ (16,790) $ (40,170) $ (29,253)
=========== =========== =========== ============
Loss per common share before extraordinary item $ (0.35) $ (0.19) $ (0.66) $ (0.43)
Per common share effect of extraordinary item (0.12) (0.12)
----------- ----------- ----------- ------------
Net loss per common share $ (0.35) $ (0.31) $ (0.66) $ (0.55)
=========== =========== =========== ============
Weighted average common shares and common
equivalent shares outstanding 62,363,000 54,785,000 60,925,000 53,574,000
=========== =========== =========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 7
WESTERN WIRELESS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
--------------------------
1996 1995
--------- ---------
<S> <C> <C>
Operating activities:
Net loss $ (40,170) $ (29,253)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 33,972 21,900
Extraordinary loss on early extinguishment of debt 6,645
Employee equity compensation 725
Other, net 708 96
Changes in operating assets and liabilities, net of effects
from consolidating acquired interests:
Accounts receivable, net (4,929) (3,268)
Inventory (10,957) 1,184
Prepaid expenses and other current assets (3,241) (162)
Accounts payable (539) 1,628
Accrued liabilities 3,066 (199)
Unearned revenue and customer deposits 814 1,350
--------- ---------
Net cash used in operating activities (20,551) (79)
--------- ---------
Investing activities:
Purchase of property and equipment (89,825) (22,164)
Purchase of wireless licenses and other (77,346) (134,735)
Acquisition of wireless properties, net of cash acquired (40,102) (53,387)
Investments in and advances to unconsolidated affiliates 2,478 (240)
Purchase of subsidiary stock, including fees (5,843)
Refund of deposit held by FCC 1,500
--------- ---------
Net cash used in investing activities (203,295) (216,369)
--------- ---------
Financing activities:
Proceeds from issuance of common stock, net 234,949 143,002
Additions to long-term debt 548,800 363,000
Payment of debt (465,011) (276,492)
Deferred financing costs (12,735) (12,639)
Loans from shareholders 3,842
--------- ---------
Net cash provided by financing activities 306,003 220,713
--------- ---------
Increase in cash and cash equivalents 82,157 4,265
Cash and cash equivalents, beginning of period 8,572 7,787
--------- ---------
Cash and cash equivalents, end of period $ 90,729 $ 12,052
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 8
WESTERN WIRELESS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION:
Western Wireless Corporation (the "Company") provides wireless
communications services in the western United States principally through the
ownership and operation of cellular communications systems. In addition to the
cellular communications systems, the Company has acquired seven personal
communications services ("PCS") licenses covering seven Metropolitan Trading
Areas ("MTAs"). During the months of February and June 1996, the Company
initiated service in the Honolulu and Salt Lake City MTAs, respectively. In July
1996, the Company initiated PCS service in the Albuquerque MTA and plans to
initiate PCS service in the Portland MTA during August 1996. The Company intends
to initiate wireless services in the remaining MTAs by the end of the first
calendar quarter of 1997.
The Company expects to incur significant operating losses and to generate
negative cash flows from operating activities during the next several years
while it develops and constructs its PCS systems and builds its PCS customer
base.
The accompanying consolidated financial statements and the financial
information included herein are unaudited. However, such information includes
adjustments (consisting solely of normal recurring adjustments) which are, in
the opinion of management, necessary to fairly state the results of the interim
periods. Interim results are not necessarily indicative of results to be
expected for the full year. For further information, refer to the Company's
annual audited financial statements and footnotes thereto, for the year ended
December 31, 1995, contained in the Company's Prospectus dated May 22, 1996.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Net income (loss) per common share:
Net income (loss) per common share is calculated using the weighted average
number of shares of outstanding common stock and common stock equivalents during
the period. As required by the Securities and Exchange Commission (the "SEC"),
common shares issued by the Company in the year preceding the filing of an
initial public offering have been included in the calculation of shares used in
determining the net income (loss) per share as if they had been outstanding for
the entire period prior to, and including the interim period ended March 31,
1996, the effect of which is anti-dilutive. The calculation of shares used for
periods subsequent to this interim period have been calculated based on the
requirements of Accounting Principles Board Opinion Number 15. Due to the net
loss of the three and six months ended June 30, 1996, all options and warrants
are anti-dilutive, thus primary and fully diluted loss per share are equal.
Cash and cash equivalents:
Cash and cash equivalents generally consist of cash, time deposits,
commercial paper and money market instruments. The Company invests its excess
cash in deposits with major banks, and money market securities of investment
grade companies from a variety of industries and, therefore, bears minimal risk.
These investments have original maturity dates not exceeding three months. Such
investments are stated at cost, which approximates fair value.
Supplemental cash flow disclosure:
Cash paid for interest (net of amounts capitalized) was $19.6 million and
$12.7 million for the six months ended June 30, 1996, and 1995, respectively.
6
<PAGE> 9
WESTERN WIRELESS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(Unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED):
Non-cash investing and financing activities were as follows (in thousands):
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE, 30
-------------------------
1996 1995
---- ----
<S> <C> <C>
Conversion of revolving
debt to term debt .................. $200,000
Issuance of common stock in exchange
for wireless properties ............. 7,117
Conversion of FCC deposit
to wireless license .................. $10,000
Exchange of shareholder loans and
accrued interest for common stock .... 14,068
</TABLE>
During May 1995, the Company issued 896,210 shares of its common stock in
exchange for minority interests in General Cellular Corporation, the Company's
predecessor corporation.
Capitalized interest:
During the six months ended June 30, 1996, the Company capitalized
interest in the amount of $2.4 million pertaining to the build out of its PCS
markets. This interest will be amortized using the straight line method over 40
years as each market becomes operational.
3.PROPERTY AND EQUIPMENT:
Property and equipment consists of (in thousands):
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---- ----
<S> <C> <C>
Land, buildings and improvements .. $ 5,566 $ 2,879
Wireless communications systems ... 214,769 165,825
Furniture and equipment ........... 27,230 16,273
-------- --------
247,565 184,977
Less accumulated depreciation ..... (74,508) (53,423)
-------- --------
173,057 131,554
Construction in progress .......... 123,712 62,138
-------- --------
$296,769 $193,692
======== ========
</TABLE>
Depreciation expense was $12.0 million and $7.2 million for the three months
ended June 30, 1996, and 1995, respectively, and $21.4 million and $13.7 million
for the six months ended June 30, 1996, and 1995, respectively.
4. LONG-TERM DEBT:
Long-term debt consists of (in thousands):
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---- ----
<S> <C> <C>
Credit Facility ...................... $347,000
Term Loan ............................ $200,000
10-1/2% Senior Subordinated Notes .... 200,000
NORTEL Facility ...................... 43,800 13,000
Other ................................ 2,671 2,487
-------- --------
$446,471 $362,487
======== ========
</TABLE>
7
<PAGE> 10
WESTERN WIRELESS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(Unaudited)
4. LONG-TERM DEBT - (CONTINUED):
In 1995, the Company entered into a credit facility with a group of banks
(the "Credit Facility"). On May 6, 1996, the Company amended the Credit Facility
to increase the Company's borrowing capacity. The increase took the form of a
$200 million term loan (the "Term Loan") which increased the maximum total
borrowings under the Credit Facility to $950 million. Additionally, the
repayment terms and the related covenant requirements were extended by one year.
In May 1996 the Company issued $200 million in Senior Subordinated Notes.
These Senior Subordinated Notes will mature on June 1, 2006. Interest will
accrue at a rate of 10-1/2% per annum and will be payable semi-annually on each
June 1 and December 1, commencing on December 1, 1996. The Senior Subordinated
Notes may be redeemed at any time at the option of the Company, in whole or from
time to time in part, at varying redemption prices. The Senior Subordinated
Notes contain certain restrictive covenants which impose limitations on the
operations and activities of the Company and certain of its subsidiaries,
including the incurrence of other indebtedness, the creation of liens, the sale
of assets, issuance of preferred stock of subsidiaries, and certain investments
and acquisitions.
The Company incurred costs that were deferred, in the amount of
approximately $12.7 million. These costs, which related to the Senior
Subordinated Notes issuance and the amendment to the Credit Facility, are being
amortized using the straight line method over the life of the respective
agreements, which approximates the effective interest method.
A wholly owned subsidiary of the Company has a $200 million credit
facility (the "NORTEL Facility") with Northern Telecom, Inc. ("NORTEL").
At June 30, 1996 the unused portions of the NORTEL Facility and the Credit
Facility were $156 million and $750 million, respectively.
The aggregate amounts of principal maturities of the Company's debt are as
follows (in thousands):
<TABLE>
<S> <C>
Six months ending December 31, 1996 .......... $ 0
Year ending December 31,
1997 ......................................... 17
1998 ......................................... 2,528
1999 ......................................... 45
2000 ......................................... 5,179
Thereafter ................................... 438,702
--------
$446,471
========
</TABLE>
8
<PAGE> 11
WESTERN WIRELESS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(Unaudited)
5. COMMITMENTS AND CONTINGENT LIABILITIES:
Lease commitments:
During the six months ended June 30, 1996, the Company entered into
various new leases for PCS and cellular sites under operating lease agreements.
Future minimum payments required under all operating leases and agreements
that have initial or remaining non-cancelable terms in excess of one year at
June 30, 1996, are summarized below (in thousands):
<TABLE>
<S> <C>
Six months ending December 31, 1996 .......... $ 3,707
Year ending December 31,
1997 ......................................... 6,903
1998 ......................................... 5,921
1999 ......................................... 4,948
2000 ......................................... 4,238
Thereafter ................................... 7,759
-------
$33,476
=======
</TABLE>
Purchase commitments:
In connection with the NORTEL Facility, a wholly owned subsidiary of the
Company entered into an agreement with NORTEL to purchase $200 million of PCS
network equipment and related services. At June 30, 1996, the Company had
ordered, net of canceled and amended purchase orders, $80.9 million under this
agreement, of which $55.9 million is outstanding. The Company is currently in
negotiations with NORTEL to amend the terms of the existing facility.
Contingent liabilities
The Company is involved in various lawsuits arising in the normal course
of business, none of which is expected to have a material adverse affect on the
Company's financial position, cash flows, liquidity or results of operations.
6. SHAREHOLDERS' EQUITY:
During the second quarter of 1996, 10,664,800 shares of common stock were
issued and approximately $233.9 million in net proceeds were received by the
Company under a registration statement of the Company's Class A Common Stock
filed with the SEC.
7. ACQUISITIONS:
In June 1996, the Company purchased a Denver MTA PCS wireless license for
approximately $66.1 million in cash. The transaction was accounted for as an
asset purchase.
In June 1996, the Company acquired the operations and the cellular license
for the Kansas 3, RSA for approximately $4.1 million in cash. The transaction
was accounted for using the purchase method.
9
<PAGE> 12
WESTERN WIRELESS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(Unaudited)
8. RELATED PARTY TRANSACTIONS:
Goldman, Sachs & Co.:
In connection with the debt and equity offerings the Company paid total
underwriting fees during the three months ended June 30, 1996 of approximately
$23.3 million. Goldman, Sachs & Co., an affiliate of a shareholder of the
Company, was the lead underwriter on both offerings.
10
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Statements contained in
this Quarterly Report that are not based on historical fact are "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The "Risk Factors" and cautionary statements identifying important
factors that could cause actual results to differ materially from those in the
forward looking statements are detailed in the Company's 1996 prospectuses filed
with the Securities and Exchange Commission.
The following is a discussion and analysis of the consolidated
financial condition and results of operations of the Company and should be read
in conjunction with the Company's consolidated financial statements and notes
thereto and other financial information included in the Company's prospectuses.
As a result of acquisitions, the Company's operating results for prior periods
may not be indicative of future performance.
OVERVIEW
The Company provides wireless communications services in the western
United States through the ownership and operation of cellular communications
systems in 73 Rural Service Areas ("RSAs") and Metropolitan Statistical Areas
("MSAs"). The Company has acquired broadband personal communications services
("PCS") licenses in seven Major Trading Areas ("MTAs"). At June 30, 1996, the
Company had PCS systems providing commercial services in the Honolulu and Salt
Lake City MTAs. At June 30, 1996, the Company served a total of 270,600 wireless
subscribers.
The Company's revenues primarily consist of subscriber revenues
(including access charges and usage charges), roamer revenues (fees charged for
providing services to subscribers of other cellular communications systems when
such subscribers, or "roamers", place or receive a phone call within one of the
Company's service areas) and equipment sales. The majority of the Company's
revenues are derived from subscriber revenues. The Company had no revenues from
its paging or PCS systems prior to February 1, 1996, and February 29, 1996,
respectively. Revenues from paging systems are included in other revenue and are
expected to account for less than 3% of the Company's total revenues in 1996.
The Company expects to continue to sell cellular and PCS handsets below cost and
regards these losses as a cost of building its subscriber base.
As used herein, "EBITDA" represents operating income (loss) from
operations before interest, taxes and depreciation and amortization. EBITDA is a
measure commonly used in the industry and should not be construed as an
alternative to operating income (loss) (as determined in accordance with
Generally Accepted Accounting Principlies, "GAAP"), as an alternative to cash
flows from operating activities (as determined in accordance with GAAP), or as a
measure of liquidity. Cellular EBITDA represents EBITDA from the Company's
cellular operations.
In the comparisons that follow, the Company has separately set forth
certain information relating to cellular operations (including paging) and PCS
operations. The Company believes that this is appropriate because its cellular
systems have been operating for a number of years while its PCS systems did not
commence operations until 1996, although the Company incurred start-up costs
beginning in the third quarter of 1995 in connection with such operations.
11
<PAGE> 14
RESULTS OF OPERATIONS
Results of Operations for the Three Months Ended June 30, 1996,
Compared to Three Months Ended June 30, 1995
The Company had 264,200 cellular subscribers at June 30, 1996. This
represents a net increase of 25,700 or 10.7% growth in subscribers generated
through the Company's distribution channels since March 31, 1996. At June 30,
1995, the Company had 154,000 cellular subscribers representing a net increase
of 20,100 or 15.7% growth in subscribers generated through the Company's
distribution channels from March 31, 1995. The Company had 6,400 PCS subscribers
at June 30, 1996, an increase of 4,200 or 191% from March 31, 1996.
REVENUES
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
------------------------------------
1996 1995
---------------------- --------
CELLULAR PCS CELLULAR
(IN THOUSANDS)
<S> <C> <C> <C>
Subscriber revenues . . . . . . . . $43,109 $ 705 $24,584
Roamer revenues . . . . . . . . . . 9,114 7,165
Equipment sales . . . . . . . . . . 3,304 1,213 2,864
Other revenues (1) . . . . . . . . 1,124
------- ------- -------
Total revenues . . . . . . . . $56,651 $ 1,918 $34,613
======= ======= =======
</TABLE>
- -----------------
(1) Primarily revenues from paging services
Cellular subscriber revenues increased to $43.1 million for the three
months ended June 30, 1996, from $24.6 million for the three months ended June
30, 1995. This $18.5 million or 75.4% increase is primarily due to continued
growth in the number of subscribers. Average monthly cellular subscriber revenue
per subscriber was $57.04 for the three months ended June 30, 1996, compared to
$58.03 for the three months ended June 30, 1995. Whereas the Company has
experienced relatively stable average monthly cellular subscriber revenue per
subscriber, the industry in general has experienced consistent declines for a
number of years. The 1.7% decline for three month period ended June 30, 1996 may
reflect the beginning of a downward trend in the Company's average monthly
cellular subscriber revenue per subscriber.
PCS subscriber revenues for the three months ended June 30, 1996, were
$0.7 million. Average monthly PCS subscriber revenue per subscriber was $54.65
for the three months ended June 30, 1996. As the Company's PCS operations only
began generating revenue during 1996, these results are not necessarily
representative of future operations.
Roamer revenues were $9.1 million for the three months ended June 30,
1996, compared to $7.2 million for the three months ended June 30, 1995, an
increase of $1.9 million or 27.2%. Growth in the Company's roamer revenues
generally reflects increases in the Company's geographic coverage and the
general subscriber growth in the industry. Roamer revenues as a percentage of
total cellular revenues declined to 16.1% for the three months ended June 30,
1996, from 20.7% for the three months ended June 30, 1995, as a result of the
75.4% growth in subscriber revenues which exceeded the 27.2% increase in roamer
revenues. While the Company expects total roamer revenues to continue to
increase, it expects its roamer revenues as a percentage of the total revenues
to continue to decline. This trend should continue based upon the above
mentioned factors and from the effects of the decline in reciprocal per minute
roamer rates charged by carriers in the industry.
12
<PAGE> 15
OPERATING EXPENSES
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
-----------------------------------
1996 1995
---------------------- --------
CELLULAR(1) PCS CELLULAR
----------- --- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Cost of service .................... $ 9,570 $ 1,169 $ 6,346
Cost of equipment sales ............ 6,115 2,323 5,020
General and administrative ......... 11,633 4,506 6,899
Sales and marketing ................ 12,813 5,774 9,247
Depreciation and amortization ...... 16,389 1,435 11,124
------- ------- -------
Total operating expenses ...... $56,520 $15,207 $38,636
======= ======= =======
</TABLE>
- -------------
(1) Includes expenses attributable to paging services
The comparisons below only relate to the Company's cellular operations
(which include paging operations for 1996).
Cost of service increased to $9.6 million for the three months ended
June 30, 1996, from $6.3 million for the three months ended June 30, 1995. This
increase is primarily attributable to the increased number of subscribers which
resulted in increased costs to access local exchange and long distance carrier
facilities and to maintain the Company's expanding wireless network. While cost
of service increased $3.3 million or 50.8%, it decreased as a percentage of
service revenues to 17.9% for the three months ended June 30, 1996, from 20.0%
for the three months ended June 30, 1995, which is due primarily to efficiencies
gained from the growing subscriber base. Service revenues include subscriber,
roamer and other revenues.
General and administrative costs increased to $11.6 million, which
includes a one-time charge of $0.5 million for deferred compensation expense,
for the three months ended June 30, 1996 from $6.9 million for the three months
ended June 30, 1995, an increase of $4.7 million or 68.6%. This increase is
primarily attributable to the increase in costs associated with supporting the
increased subscriber base. The increase in general and administrative costs
exclusive of the one-time charge was $4.3 million or 62.0% over the three months
ended June 30, 1995. Exclusive of the one-time charge, these costs continue to
decline as a percentage of service revenues to 20.9% for the three months ended
June 30, 1996, from 21.7% for the three months ended 1995, primarily due to
improved efficiency and as a result of continuing economies of scale.
Sales and marketing costs increased to $12.8 million for the three
months ended June 30, 1996, from $9.2 million for the three months ended June
30, 1995, primarily due to net subscriber additions. Sales and marketing costs
per gross subscriber remained relatively constant for the three month period
ended June 30, 1996 from the three month period ended June 30, 1995. Although
the Company noted a decline in the rate of churn for the three months ended June
30, 1996 from the three months ended June 30, 1995, the growing subscriber base
resulted in a higher number of disconnected subscribers. This increase in the
number of disconnected subscribers resulted in an increase in the cost per net
subscriber added during the three months ended June 30, 1996 to $499 from $434
for the three months ended June 30, 1995. Including the losses on equipment
sales, the cost per net subscriber added increased to $608 for the three months
ended June 30, 1996, from $535 for the three months ended June 30, 1995.
Depreciation expense increased to $10.6 million for the three months
ended June 30, 1996, from $7.2 million for the three months ended June 30, 1995.
This increase of $3.4 million or 47.2%, is attributable to the continued
expansion of the Company's cellular systems. Amortization expense increased to
$5.8 million for the three months ended June 30, 1996, from $3.9 million for the
three months ended June 30, 1995. This $1.9 million or 48.7%, increase is
primarily attributable to an increase in gross cellular licensing costs and
other intangible assets.
13
<PAGE> 16
The majority of the PCS operating expenses of $15.2 million for the
three months ended June 30, 1996 were start-up costs in the five non-operating
PCS MTAs of the Company. Accordingly, the operating expenses for PCS are not
representative of future operations.
OPERATING LOSS
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------------------
1996 1995
---------------------- --------
CELLULAR(1) PCS CELLULAR
----------- --- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Operating income (loss) . . . . . . . $131 $(13,289) $(4,023)
==== ======== ======
</TABLE>
- ----------------
(1) Includes paging operations
Total operating income (loss) increased to $(13.2) million for the
three months ended June 30, 1996, from $(4.0) million for the three months ended
June 30, 1995, as a result of the $(13.3) million operating loss attributable to
PCS operations offset by the cellular operating income. For the three months
ended June 30, 1996, the Company recognized its first quarter of cellular
operating income of $0.1 million, an increase of $4.1 million from the $(4.0)
million loss for the three months ended June 30, 1995, due to increased
revenues, which exceeded increases in operating expenses.
OTHER INCOME (EXPENSE)
Interest and financing expense increased to $8.9 million for the three
months ended June 30, 1996, from $6.3 million for the three months ended June
30, 1995. The increase of $2.6 million or 40.9%, is primarily attributable to an
increase in long-term debt, which increased to $446.5 million at June 30, 1996,
from $287.8 million at June 30, 1995, to fund the company's capital
expenditures, partially offset by a decrease in the weighted average interest
rate to 9.1% for the three months ended June 30, 1996, from 9.8% for the three
months ended June 30, 1995. The Company anticipates interest and financing
expense to continue to increase due to the issuance of its Senior Subordinated
Notes at 10.5% which were only outstanding for one month during the three months
ended June 30, 1996.
EBITDA
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------------------
1996 1995
---------------------- --------
CELLULAR(1) PCS CELLULAR
----------- --- --------
(IN THOUSANDS)
<S> <C> <C> <C>
EBITDA . . . . . . . . . . . . . $16,520 $(11,854) $7,101
======= ======== ======
</TABLE>
- ----------------
(1) Includes paging operations
EBITDA declined to $ 4.7 million for the three months ended June 30,
1996, from $7.1 million for the three months ended June 30, 1995, primarily due
to the $(11.9) million EBITDA attributable to PCS operations offset by an
increase in cellular EBITDA. Cellular EBITDA increased 133% to $16.5 million for
the three months ended June 30, 1996, from $7.1 million for the three months
ended June 30, 1995, primarily as a result of increased revenues due to the
increased subscriber base and the related cost efficiencies. As a result,
cellular operating margin (cellular EBITDA as a percentage of cellular service
revenues) increased to 31.0% for the three months ended June 30, 1996, from
22.4% for the three months ended June 30, 1995.
14
<PAGE> 17
Results of Operations for the Six Months Ended June 30, 1996, Compared to Six
Months Ended June 30, 1995
The Company had 264,200 cellular subscribers at June 30, 1996. This
represents a net increase of 50,000 or 23.9% growth in subscribers generated
through the Company's distribution channels for the six months ended June 30,
1996. At June 30, 1995, the Company had 154,000 cellular subscribers
representing a net increase of 35,500 or 31.4% growth in subscribers generated
through the Company's distribution channels for the six months ended June 30,
1995. The Company had 6,400 PCS subscribers at June 30, 1996.
REVENUES
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------------------
1996 1995
---------------------- --------
CELLULAR PCS CELLULAR
-------- --- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Subscriber revenues . . . . . . . . . $ 78,297 $ 854 $43,551
Roamer revenues . . . . . . . . . . . 15,871 11,967
Equipment sales . . . . . . . . . . . 5,999 1,633 5,179
Other revenues (1) . . . . . . . . . 1,950
-------- ------ -------
Total revenues . . . . . . . . . $102,117 $2,487 $60,697
======== ====== =======
</TABLE>
- --------------
(1) Primarily revenues from paging services
Cellular subscriber revenues increased to $78.3 million for the six
months ended June 30, 1996, from $43.6 million for the six months ended June 30,
1995. This $34.7 million or 79.8% increase is primarily due to continued growth
in the number of subscribers added through the Company's distribution channels
during the twelve months ended June 30, 1996. Average monthly cellular
subscriber revenue per subscriber was $54.60 for the six months ended June 30,
1996, compared to $55.63 for the six months ended June 30, 1995. Whereas the
Company has experienced relatively stable average monthly cellular subscriber
revenue per subscriber, the industry in general has experienced consistent
declines for a number of years. The 1.9% decline for six month period ended June
30, 1996 may reflect the beginning of a downward trend in the Company's average
monthly cellular subscriber revenue per subscriber.
PCS subscriber revenues for the six months ended June 30, 1996, were
$0.9 million. Average monthly PCS subscriber revenue per subscriber was $61.00
for the six months ended June 30, 1996. As the Company's PCS operations only
began generating revenue during 1996, these results are not necessarily
representative of future operations.
Roamer revenues were $15.9 million for the six months ended June 30,
1996, compared to $12.0 million for the six months ended June 30, 1995, an
increase of $3.9 million or 32.6%. Growth in the Company's roamer revenue
generally reflects increases in the Company's geographic coverage and the
general subscriber growth in the industry. Roamer revenues as a percentage of
total cellular revenues declined to 15.5% for the six months ended June 30,
1996, from 19.7% for the six months ended June 30, 1995, as a result of the
79.8% growth in subscriber revenues, which exceeded the 32.6% increase in roamer
revenues. While the Company expects total roamer revenues to continue to
increase, it expects its roamer revenues as a percentage of the total revenues
to continue to decline. This trend should continue based upon the above
mentioned factors and from the effects of the decline in reciprocal per minute
roamer rates charged by carriers in the industry.
15
<PAGE> 18
OPERATING EXPENSES
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------------------
1996 1995
---------------------- --------
CELLULAR(1) PCS CELLULAR
----------- --- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Cost of service . . . . . . . . . . . . $ 17,977 $ 1,577 $12,132
Cost of equipment sales . . . . . . . . 11,552 3,240 8,890
General and administrative . . . . . . 20,802 7,607 13,153
Sales and marketing . . . . . . . . . . 23,817 8,261 16,411
Depreciation and amortization . . . . . 31,549 1,885 21,900
-------- ------- -------
Total operating expenses . . . . . $105,697 $22,570 $72,486
======== ======= =======
</TABLE>
- --------------
(1) Includes expenses attributable to paging services
The comparisons below only relate to the Company's cellular operations
(which include paging operations for 1996).
Cost of service increased to $18.0 million for the six months ended
June 30, 1996, from $12.1 million for the six months ended June 30, 1995. This
increase is primarily attributable to the increased number of subscribers which
resulted in increased costs to access local exchange and long distance carrier
facilities and maintain the Company's expanding wireless network. While cost of
service increased $5.9 million or 48.2%, it decreased as a percentage of service
revenues to 18.7% for the six months ended June 30, 1996, from 21.9% for the six
months ended June 30, 1995, which is due primarily to efficiencies gained from
the growing subscriber base. Service revenues include subscriber, roamer and
other revenues.
General and administrative costs increased to $20.8 million, which
includes a one-time charge of $0.5 million for deferred compensation expense for
the six months ended June 30, 1996 from $13.2 million for the six months ended
June 30, 1995, an increase of $7.6 million or 58.2%. This increase is primarily
attributable to the increase in costs associated with supporting the increased
subscriber base. The increase in general and administrative costs exclusive of
the one-time charge was $7.2 million or 54.7% over the six months ended June 30,
1995. Exclusive of the one-time charge, these costs continue to decline as a
percentage of service revenues to 21.2% for the six months ended June 30, 1996,
from 23.7% for the six months ended June 30, 1995, primarily due to improved
efficiency and as a result of continuing economies of scale.
Sales and marketing costs increased to $23.8 million for the six months
ended June 30, 1996, from $16.4 million for the six months ended June 30, 1995,
primarily due to net subscriber additions. Sales and marketing costs per net
subscriber added increased to $476 for the six months ended June 30, 1996, from
$460 for the six months ended June 30, 1995. Including the losses on equipment
sales, the costs per net subscriber added increased to $587 for the six months
ended June 30, 1996, from $564 for the six months ended June 30, 1995.
Depreciation expense increased to $19.8 million for the six months
ended June 30, 1996, from $13.7 million for the six months ended June 30, 1995.
This increase of $6.1 million or 44.5%, is attributable to the continuing
expansion of the Company's cellular systems. Amortization expense increased to
$11.7 million for the six months ended June 30, 1996, from $8.2 million for the
six months ended June 30, 1995. This $3.5 million or 42.7%, increase is
primarily attributable to an increase in gross cellular licensing costs and
other intangible assets.
The majority of the PCS operating expenses of $22.6 million for the six
months ended June 30, 1996 consist of start-up costs in the non-operating PCS
MTAs of the Company. Accordingly, the operating expenses for PCS are not
representative of future operations.
16
<PAGE> 19
OPERATING LOSS
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------------------------
1996 1995
------------------------- --------
CELLULAR (1) PCS CELLULAR
---------- --- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Operating loss. . . . . . . . . $(3,580) $(20,083) $(11,789)
======= ======== ========
</TABLE>
- ----------------
(1) Includes paging operations
Total operating loss increased to $23.7 million for the six months
ended June 30, 1996, from $11.8 million for the six months ended June 30, 1995,
as a result of the $20.1 million operating loss attributable to PCS operations
offset by the reduced cellular operating loss. Cellular operating loss improved
to $3.6 million for six months ended June 30, 1996, from $11.8 million for the
six months ended June 30, 1995, due to increased revenues, which exceeded
increases in operating expenses.
OTHER INCOME (EXPENSE)
Interest and financing expense increased to $17.0 million for the six
months ended June 30, 1996, from $11.3 million for the six months ended June 30,
1995. The increase of $5.7 million or 50.2%, is primarily attributable to an
increase in long-term debt, which increased to $446.5 million at June 30, 1996,
from $287.8 million at June 30, 1995, to fund the Company's expansion, partially
offset by a decrease in the weighted average interest rate to 8.5% for the six
months ended June 30, 1996, from 9.2% for the six months ended June 30, 1995.
The Company anticipates interest and financing expense to continue to increase
due to the issuance of its Senior Subordinated Notes at 10.5% which were only
outstanding for one month during the six months ended June 30, 1996.
EBITDA
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------------------------
1996 1995
------------------------- --------
CELLULAR (1) PCS CELLULAR
---------- --- --------
(IN THOUSANDS)
<S> <C> <C> <C>
EBITDA . . . . . .. . . . . $27,969 $(18,198) $10,111
======= ======== =======
</TABLE>
- --------------------
(1) Includes paging operations
Total EBITDA decreased to $9.8 million for the six months ended June
30, 1996, from $10.1 million for the six months ended June 30, 1995, as a result
of increased cellular EBITDA offset by the $(18.2) million EBITDA attributable
to PCS operations. Cellular EBITDA increased 177% to $28.0 million for the six
months ended June 30, 1996, from $10.1 million for the six months ended June 30,
1995, primarily as a result of increased revenues due to the increased
subscriber base and the related cost efficiencies. As a result, cellular
operating margin (cellular EBITDA as a percentage of cellular service revenues)
increased to 29.1% for the six months ended June 30, 1996, from 18.2% for the
six months ended June 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's initial public offering (the "Equity Offering") became
effective on May 22, 1996. Approximately 12.7 million shares of common stock
were sold to the public, of which approximately 10.7 million shares were sold
by the Company. The net proceeds to the Company of the Equity Offering was
approximately $233.9 million. Simultaneously with the Equity Offering, the
Company sold $200 million of senior subordinated debt (the "Debt Offering" and,
together with the Equity Offering, the "Offerings") on the public market. The
net proceeds to the Company of the debt offering after the underwriting
discount, but before other offering expenses, was approximately $194 million.
17
<PAGE> 20
The Company has a credit facility (the "Credit Facility") with a
consortium of lenders providing for $750 million of revolving credit and a $200
million term loan. A subsidiary of the Company also has a $200 million credit
facility (the "NORTEL" Facility and, together with the Credit Facility, the
"Senior Secured Facilities") with Northern Telecom Inc. ("NORTEL"). As of June
30, 1996, $200 million and $43.8 million were outstanding under the Credit
Facility and the NORTEL Facility, respectively, and the amounts available for
borrowing under the Credit Facility and the NORTEL Facility were $185 million
and $33 million, respectively. Indebtedness under the Credit Facility and the
NORTEL Facility matures on March 31, 2005 and December 31, 2003, respectively,
and bears interest at variable rates. Substantially all the assets of the
Company are pledged as security for such indebtedness.
The Company currently anticipates that it will require approximately
$425 million to complete the build-out of its PCS systems through the end of
1998, and will require additional funds to finance the continued growth of its
cellular operations, provide for working capital, service debt and finance
potential acquisitions. The Company believes that the proceeds from its
Offerings, together with the availability of financing under the Senior Secured
Facilities will be sufficient to fund operating losses, capital expenditures and
working capital necessary for the build-out of its PCS systems and the continued
growth of its cellular operations through December 1998, although to the extent
that the build-out of the PCS systems or the marketing costs incurred in
connection with PCS customer growth are faster than expected, or if the Company
takes advantage of acquisition opportunities, the Company may require additional
funding to implement its business strategy.
Net cash used in operating activities for the six months ended June 30,
1996, was $20.6 million. Adjustments to the $40.2 million net loss for such
period to reconcile to net cash used in operating activities consisted of $34.0
million of depreciation and amortization. Other offsets included changes in
operating assets and liabilities, net of effects from consolidating acquired
interests, consisting primarily of a increase of $4.9 million in accounts
receivable primarily as a result of increased subscriber base and an increase of
$11.0 million in inventories as a result of the purchase of PCS handsets for the
Honolulu, Salt Lake City, Albuquerque and Portland MTAs. Net cash used in
operating activities was $0.1 million for the six months ended June 30, 1995.
Adjustments to the $29.3 million net loss for such period to reconcile to net
cash used in operating activities consisted primarily of $21.9 million of
depreciation and amortization and $6.6 million of extraordinary loss on the
early extinguishment of debt.
Net cash used in investing activities was $203.3 million for the six
months ended June 30, 1996. Investing activities for such period consisted
primarily of purchases of wireless licenses and other of $77.4 million of which
$66.1 million was attributable to the purchase of the Denver PCS MTA, purchases
of property and equipment of $89.8 million of which $59.1 million was
attributable to PCS capital expenditures and acquisitions of wireless
properties, net of cash acquired which used cash of $40.1 million. Net cash used
in investing activities was $216.4 million the six months ended June 30, 1995,
the majority of which was comprised of the purchase of the Company's PCS
licenses.
Net cash provided by financing activities was $306.0 million for the
six months ended June 30, 1996. Financing activities for such period consisted
primarily of additions to long-term debt, which provided cash of $71.1 million
net of $465.0 million in repayments and $12.7 million in fees and the issuance
of stock in the Equity Offering which provided cash of $234.9 million. Net cash
provided by financing activities was $220.7 million for the six months ended
June 30, 1995.
The Company holds a 49.9% limited partnership interest in Cook Inlet
Western Wireless PV/SS PCS, L.P. ("Cook Inlet PCS"), an entity which was the
high bidder for licenses in 13 Basic Trading Areas ("BTAs") in the Federal
Communications Commission's ("FCC") C Block auctions. During a subsequent
reauction by the FCC of certain C Block BTAs during July 1996, Cook Inlet PCS
was the high bidder on one additional BTA. Cook Inlet PCS is subject to the
FCC's Five Year Build-Out Requirement and will require significant additional
funds to complete the build-out of its PCS systems and to meet the government
debt service requirements on the license purchase prices. The potential sources
of such additional funds include vendor loans or capital contributions by the
partners of Cook Inlet PCS or other third party financing. Currently, the
Company is assisting Cook Inlet PCS in identifying potential sources of
18
<PAGE> 21
funds. Until such time as additional funding is provided to Cook Inlet PCS, the
Company plans to advance such funds as required for Cook Inlet PCS to meet its
operating needs.
In the ordinary course of business, the Company continuously reviews
potential acquisition opportunities and has entered into various joint
development agreements with respect to international interests. Any such
prospective acquisitions would be financed with the proceeds from the Offerings,
borrowings under the Senior Secured Facilities or additional financing.
SEASONALITY
The Company, and the wireless communications industry in general, have
historically experienced significant subscriber growth during the fourth
calendar quarter. Accordingly, during such quarter the Company experiences
greater losses on equipment sales and increases in sales and marketing expenses.
The Company has historically experienced highest usage and revenue per
subscriber during the summer months. The Company expects these trends to
continue.
19
<PAGE> 22
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material, pending legal proceedings to which the Company
or any of its subsidiaries or affiliates is a party or of which any of their
property is subject which, if adversely decided, would have a material adverse
effect on the Company.
ITEM 2. CHANGES IN SECURITIES
Effective May 14, 1996, the Company's predecessor, Western Wireless
Corporation, a Delaware corporation ("WWC Delaware"), recapitalized by
authorizing 300,000,000 shares of Common Stock and 50,000,000 shares of
Preferred Stock (the "Recapitalization"). The Recapitalization created two
classes of Common Stock with identical rights except for voting, Class A Common
Stock having one vote per share, and Class B Common Stock having ten votes per
share. Effective May 17, 1996, the Company reincorporated under the laws of the
State of Washington through a merger of WWC Delaware with and into the Company
(the "Reincorporation Merger"). The Company, at the time of the Reincorporation
Merger, was a wholly-owned subsidiary of WWC Delaware. Descriptions of the
Company's Common Stock and Preferred Stock are incorporated herein by reference
to the "Description of Capital Stock" section of the Company's Registration
Statement on Form S-1 (Commission File No. 333-2432).
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
By written consent dated May 10, 1996, shareholders of the Company
holding 15,510,506 of the 18,945,509 shares of common stock of the Company, or
81.9% of the then outstanding shares, approved the Recapitalization and the
Reincorporation Merger. See Item 2 herein for brief descriptions of the
Recapitalization and Reincorporation Merger.
ITEM 5. OTHER INFORMATION
None.
20
<PAGE> 23
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit Description
------- -----------
3.1* Amended and Restated Articles of Incorporation of the
Registrant
3.2* Bylaws of the Registrant
4.1** Form of Indenture relating to the Registrant's Senior
Subordinated Notes due 2006
10.1 Second Amendment to Block "C" Organization and Financing
Agreement and Cook Inlet Western Wireless PV/SS PCS,
L.P. Limited Partnership Agreement by and among Western
PCS BTA I Corporation, Western Wireless Corporation,
Cook Inlet PV/SS PCS Partners, L.P., Cook Inlet
Telecommunications, Inc., SS PCS Corporation and
Providence Media Partners L.P. dated as of June 27, 1996
27.1 Financial Data Schedule
* Incorporated herein by reference to the exhibit filed with the
Registrant's Registration Statement on Form S-1 (Commission File No.
333-2432).
** Incorporated herein by reference to the exhibit filed with the
Registrant's Registration Statement on Form S-1 (Commission File No.
333-4229).
(b) Reports on Form 8-K
None.
21
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Western Wireless Corporation
By /s/ Theresa E. Gillespie By /s/ Nastashia Stoneman Press
-------------------- ------------------------
Theresa E. Gillespie Nastashia Stoneman Press
Chief Financial Officer Principal Accounting Officer
Dated: August 12, 1996
22
