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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-4229
PROSPECTUS SUPPLEMENT NO. 7
TO
PROSPECTUS DATED MAY 1, 1997
[LOGO]
WESTERN WIRELESS CORPORATION
CLASS A COMMON STOCK
(NO PAR VALUE PER SHARE)
10 1/2% SENIOR SUBORDINATED NOTES DUE 2006
10 1/2% SENIOR SUBORDINATED NOTES DUE 2007
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SEE "RISK FACTORS" BEGINNING ON PAGE 13 FOR A DISCUSSION OF CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE CLASS A COMMON STOCK, 10 1/2%
SENIOR SUBORDINATED NOTES DUE 2006 OR 10-1/2% SENIOR SUBORDINATED NOTES DUE
2007.
The Class A Common Stock is quoted on the Nasdaq National Market under the
symbol "WWCA."
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EACH OF THE 10 1/2% SENIOR SUBORDINATED NOTES DUE 2006 (THE "2006
NOTES") AND THE 10 1/2% SENIOR SUBORDINATED NOTES DUE 2007 (THE "2007 NOTES,"
AND, TOGETHER WITH THE 2006 NOTES, THE "SENIOR SUBORDINATED NOTES") ARE SENIOR
UNSECURED OBLIGATIONS OF THE COMPANY AND ARE SUBORDINATED IN RIGHT OF PAYMENT TO
THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS AND SENIOR IN RIGHT OF
PAYMENT TO ANY CURRENT OR FUTURE SUBORDINATED INDEBTEDNESS OF THE COMPANY. IN
ADDITION, ALL EXISTING AND FUTURE INDEBTEDNESS AND OTHER LIABILITIES OF THE
COMPANY'S SUBSIDIARIES WILL BE EFFECTIVELY SENIOR IN RIGHT OF PAYMENT TO THE
SENIOR SUBORDINATED NOTES. THE 2006 NOTES AND THE 2007 NOTES RANK PARI PASSU
WITH ONE ANOTHER. THE COMPANY HAS NOT ISSUED, AND DOES NOT HAVE ANY FIRM
ARRANGEMENT TO ISSUE, ANY SIGNIFICANT INDEBTEDNESS TO WHICH THE SENIOR
SUBORDINATED NOTES WOULD BE SENIOR. AT SEPTEMBER 30, 1997, SENIOR INDEBTEDNESS
AGGREGATED APPROXIMATELY $770 MILLION.
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.
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This Prospectus 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, the 10 1/2% Senior Subordinated Notes Due 2006 and the 10 1/2% Senior
Subordinated Notes Due 2007 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.
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The date of this Prospectus Supplement is February 23, 1998.
<PAGE> 2
This Prospectus Supplement is intended to be read in conjunction with
the Prospectus dated May 1, 1997 (the "Prospectus"), as supplemented by
Prospectus Supplement No. 1 thereto dated May 9, 1997 ("Prospectus Supplement
No. 1"), Prospectus Supplement No. 2 thereto dated June 19, 1997 ("Prospectus
Supplement No. 2"), Prospectus Supplement No. 3 thereto dated August 13, 1997
("Prospectus Supplement No. 3"), Prospectus Supplement No. 4 thereto dated
October 14, 1997 ("Prospectus Supplement No. 4"), Prospectus Supplement No. 5
thereto dated November 6, 1997 ("Prospectus Supplement No. 5") and Prospectus
Supplement No. 6 thereto dated December 8, 1997 ("Prospectus Supplement No. 6")
with respect to the Class A Common Stock, 10 1/2% Senior Subordinated Notes Due
2006 and 10 1/2% Senior Subordinated Notes Due 2007. Capitalized terms used in
this Prospectus Supplement and not otherwise defined herein have the same
meanings as in the Prospectus.
On May 9, 1997, the Company filed with the Securities and Exchange
Commission a report on Form 10-Q, a copy of which is attached to Prospectus
Supplement No. 1.
On June 19, 1997, the Company filed with the Securities and Exchange
Commission a report on Form 8-K, a copy of which is attached to Prospectus
Supplement No. 2.
On August 13, 1997, the Company filed with the Securities and Exchange
Commission a report on Form 10-Q, a copy of which is attached to Prospectus
Supplement No. 3.
On October 14, 1997, the Company filed with the Securities and Exchange
Commission a report on Form 8-K, a copy of which is attached to Prospectus
Supplement No. 4.
On November 6, 1997, the Company filed with the Securities and Exchange
Commission a report on Form 10-Q, a copy of which is attached to Prospectus
Supplement No. 5.
On December 8, 1997, the Company filed with the Securities and Exchange
Commission a report on Form 8-K, a copy of which is attached to Prospectus
Supplement No. 6.
On February 18, 1998, the Company issued a press release relating to
1997 financial results, a copy of which is attached hereto and deemed to be a
part hereof.
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FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION CONTACT:
Investment Community: Media:
Ken Prussing John Snyder
Western Wireless Corporation Kaufer Miller Communications
(425) 313-7803 (425) 450-9965
[email protected] [email protected]
www.kmrc.com
WESTERN WIRELESS ANNOUNCES FOURTH QUARTER AND
YEAR END 1997 FINANCIAL RESULTS
CELLULAR BUSINESS GENERATES POSITIVE FREE CASH FLOW, SUBSCRIBERS PASS 645,000
ISSAQUAH, Wash. (February 18, 1998) -- Western Wireless Corporation (NASDAQ:
WWCA), a leading provider of cellular and personal communications services
(PCS), announced today its financial and operating results for the fourth
quarter and year ended December 31, 1997.
"1997 has been a watershed year for Western Wireless," said John Stanton,
chairman and chief executive officer of Western Wireless. "Our PCS business has
taken off, moving from focusing on building systems to providing service to over
125,000 customers and attaining in one year a 1 percent penetration level of the
covered population - it took many cellular companies four years to reach this
penetration level. The results of cellular operations continue to prove our
belief in using cellular technology to provide affordable, high quality,
wireless phone service to rural America. Financially, our cellular business
achieved the important milestone of generating free cash flow (EBITDA less
capital expenditures) each quarter of the year. Our international efforts have
been rewarded with licenses in four countries and our partnerships have launched
service in Latvia and Georgia. Finally, the strategic investment by Hutchison
Whampoa has positioned Western Wireless to play an important part in the
continued development of wireless telecommunications in the United States."
TOTAL COMPANY RESULTS
At the end of the fourth quarter 1997 the company had 648,600 subscribers,
an 80 percent increase over the fourth quarter of 1996. The company reported
revenues of $113.4 million for the quarter, up 59 percent over the same quarter
a year ago. Net loss was $72.3 million, a loss of $0.99 per share for the
quarter. Consolidated EBITDA loss (operating income before depreciation and
amortization) in the fourth quarter was $2.2 million.
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Western Wireless Announces Year End Fourth Quarter 1997 Financial Results Page 2
For the year ended December 31, 1997, total revenues for the company were
$380.6 million, a 57 percent increase from $243.1 million in 1996. The net loss
for the year ended December 31, 1997, was $265.5 million, a loss of $3.76 per
share. The loss in the fourth quarter and year 1997 is due primarily to planned
expenses associated with service expansion and subscriber growth in its PCS
markets.
CELLULAR AND PCS SUMMARIES
Cellular subscribers increased by 195,800 during the year, including the
acquisition of 58,500 subscribers from Triad Cellular during the fourth quarter.
For the quarter ending December 31, 1997, cellular subscribers were 520,000, a
60 percent year to year increase. Cellular service revenues for the fourth
quarter of 1997 increased 45 percent from the same quarter a year ago to $85.2
million. Cellular EBITDA for the quarter was $30.6 million, a 111 percent
increase over the same quarter in 1996. Cellular capital expenditures were $13
million for the quarter. For the year ended December 31, 1997, cellular service
revenues were $290.5 million, a 36 percent increase over 1996, and EBITDA was
$103.9 million. Free cash flow for the cellular business was positive all four
quarters of 1997. Free cash flow for the year was $49.6 million and for the
quarter was $17.6 million.
At the end of the year, Western Wireless had 128,600 PCS subscribers
compared to 35,500 at the end of 1996. PCS service revenues were $16.5 million
for the quarter compared to $4.7 million for the fourth quarter of 1996. Western
Wireless added 27,600 PCS subscribers during the fourth quarter of 1997 compared
to 17,900 during the same quarter of 1996. For the year ended December 31, 1997,
PCS net additions were 93,100, and service revenues were $52.6 million compared
to service revenues of $7.8 million in 1996.
STRATEGIC INVESTMENT IN COMPANY
Today Western Wireless also announced that a subsidiary of Hutchison
Telecommunications Limited (Hutchison Telecom) and Western Wireless closed
Hutchison Telecom's $248 million investment in Western PCS Corp., a subsidiary
of Western Wireless. The investment represents the purchase of newly issued
shares representing a 19.9 percent interest in Western PCS Corp., the holding
company for all PCS investments of Western Wireless in the United States.
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Western Wireless Announces Year End Fourth Quarter 1997 Financial Results PAGE 3
On November 26, 1997, Hutchison Telecom invested approximately $74 million
for an approximate 5 percent interest in Western Wireless. Two Hutchison
representatives have also been added to the board of Western PCS Corp.: Canning
Fok, group managing director of Hutchison Whampoa Limited (the holding company
of Hutchison Telecom) and chairman of Orange plc, and Hans Snook, managing
director of Orange.
Based in Issaquah, Wash., Western Wireless Corp. is a leading provider of
wireless communications services in the western United States. It currently
offers cellular service marketed under the Cellular One(R) name in 15 western
states; and it provides PCS using the globally dominant GSM technology marketed
under the VoiceStream(R) Wireless name in seven U.S. metropolitan markets. In
1997, Western Wireless was granted PCS licenses for 100 new markets through the
Federal Communications Commission's D- and E-block auctions, and was granted an
additional seven markets in the F-block auction through its partnership with
Cook Inlet PCS. As a result, Western Wireless' combined cellular and PCS
licenses, along with its investment in Cook Inlet PCS, cover 59 percent of the
land in the continental United States.
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Western Wireless Announces Year End Fourth Quarter 1997 Financial Results PAGE 4
WESTERN WIRELESS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended December 31, For the year ended December 31,
-------------------------------- --------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Subscriber revenues $ 88,207 $ 54,566 $ 297,724 $ 182,441
Roamer revenues 12,167 7,775 39,977 34,065
Equipment sales and other revenues 13,008 8,801 42,877 26,579
------------ ------------ ------------ ------------
Total revenues 113,382 71,142 380,578 243,085
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Operating expenses:
Cost of service 23,621 19,068 90,184 53,600
Cost of equipment sales 25,671 18,110 83,167 46,305
General and administrative 33,694 20,707 112,543 66,673
Sales and marketing 32,621 26,765 120,875 83,652
Depreciation and amortization 36,543 22,226 133,470 79,741
------------ ------------ ------------ ------------
Total operating expenses 152,150 106,876 540,239 329,971
============ ============ ============ ============
Operating loss (38,768) (35,734) (159,661) (86,886)
------------ ------------ ------------ ------------
Other income (expense):
Interest and financing expense (31,167) (16,102) (98,964) (44,690)
Equity in net loss of unconsolidated affiliates (3,951) (882) (11,058) (968)
Other, net 1,593 1,388 4,149 2,439
------------ ------------ ------------ ------------
Total other income (expense) (33,525) (15,596) (105,873) (43,219)
------------ ------------ ------------ ------------
Net loss $ (72,293) $ (51,330) $ (265,534) $ (130,105)
============ ============ ============ ============
Net loss per common share $ (0.99) $ (0.74) $ (3.76) $ (2.00)
============ ============ ============ ============
Weighted average common shares and common
equivalent shares outstanding 72,758,000 69,586,000 70,692,000 65,196,000
============ ============ ============ ============
</TABLE>
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Western Wireless Announces Year End Fourth Quarter 1997 Financial Results PAGE 5
WESTERN WIRELESS CORPORATION
SUPPLEMENTARY FINANCIAL AND OPERATIONAL DATA
(Dollars in thousands)
(Unaudited)
(Note: The following Table sets forth certain selected financial and operating
data of the company for the three months and year ended December 31, 1997)
<TABLE>
<CAPTION>
Three Months Ended December 31,
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1997 1996
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Cellular PCS Cellular PCS
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<S> <C> <C> <C> <C>
Revenues:
Subscriber revenues $ 71,904 $ 16,303 $ 49,875 $ 4,691
Roamer revenues 11,940 227 7,775
Equipment sales 3,948 7,736 3,503 4,246
Other revenues 1,324 1,052
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Total revenues 89,116 24,266 62,205 8,937
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Operating expenses:
Cost of service 12,424 11,197 12,172 6,896
Cost of equipment sales 9,654 16,017 7,630 10,480
General and administrative 18,416 15,278 13,262 7,445
Sales and marketing 18,049 14,572 14,624 12,141
Depreciation and amortization 17,267 19,276 17,411 4,815
--------- --------- --------- ---------
Total operating expenses 75,810 76,340 65,099 41,777
--------- --------- --------- ---------
Operating income (loss) $ 13,306 $ (52,074) $ (2,894) $ (32,840)
========= ========= ========= =========
Ending subscribers 520,000 128,600 324,200 35,500
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Twelve Months Ended December 31,
-----------------------------------------------------------
1997 1996
------------------------- --------------------------
Cellular PCS Cellular PCS
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<S> <C> <C> <C> <C>
Revenues:
Subscriber revenues $ 245,364 $ 52,360 $ 174,647 $ 7,794
Roamer revenues 39,750 227 34,065
Equipment sales 12,353 25,143 12,595 9,745
Other revenues 5,381 4,239
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Total revenues 302,848 77,730 225,546 17,539
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Operating expenses:
Cost of service 47,001 43,183 41,130 12,470
Cost of equipment sales 29,698 53,469 25,516 20,789
General and administrative 60,865 51,678 46,464 20,209
Sales and marketing 61,409 59,466 52,147 31,505
Depreciation and amortization 66,595 66,875 65,346 14,395
--------- --------- --------- ---------
Total operating expenses 265,568 274,671 230,603 99,368
--------- --------- --------- ---------
Operating income (loss) $ 37,280 $(196,941) $ (5,057) $ (81,829)
========= ========= ========= =========
Ending subscribers 520,000 128,600 324,200 35,500
========= ========= ========= =========
</TABLE>
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