UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-556
ROSEVILLE COMMUNICATIONS COMPANY
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(Exact name of registrant as specified in its charter)
California 68-0365195
----------------------------------------------------- --------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
211 Lincoln Street, Roseville, California 95678
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (916) 786-6141
--------------
Securities registered pursuant to Section
12(g) of the Act:
Common Stock - Without Par Value
(Title of class)
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 X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of September 30, 2000, 15,526,129 shares of the registrant's Common Stock
were outstanding.
<PAGE>
<TABLE>
<CAPTION>
ROSEVILLE COMMUNICATIONS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share amounts)
Quarter Quarter Nine Months Nine Months
Ended Ended Ended Ended
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
<S> ------------- ------------- ------------- -------------
Operating revenues: <C> <C> <C> <C>
Local service 17,286 $17,362 $ 52,027 $ 51,216
Network access service 12,898 10,562 36,820 32,405
------ ------- -------- --------
Total rate regulated revenues 30,184 27,924 88,847 83,621
Directory advertising 3,123 2,990 9,767 9,501
Nonregulated sales and service 1,997 1,699 5,521 4,854
Other 3,989 2,745 9,425 7,362
------ ------- -------- -------
Total operating revenues 39,293 35,358 113,560 105,338
Operating expenses:
Cost of services and products 10,673 9,682 32,926 27,411
Customer operations and selling 6,277 4,323 16,353 12,542
General and administrative 5,248 5,963 14,510 15,018
Depreciation and amortization 7,072 5,956 20,662 16,106
------ ------- -------- --------
Total operating expenses 29,270 25,924 84,451 71,077
------ ------- -------- --------
Income from operations 10,023 9,434 29,109 34,261
Other income (expense):
Interest income 261 431 644 1,429
Interest expense (1,283) (848) (3,036) (2,399)
Equity in earnings of cellular
partnership 3,315 3,181 10,206 7,489
Other, net 639 553 1,592 1,541
------ ------- -------- --------
Total other income, net 2,932 3,317 9,406 8,060
------ ------- -------- --------
Income before income taxes 12,955 12,751 38,515 42,321
Income taxes 5,193 5,156 15,485 17,132
------ ------- -------- --------
Net income $7,762 $ 7,595 $ 23,030 $ 25,189
====== ======= ======== ========
Basic and diluted earnings per
share (1) $ .50 $ .48 $1.47 $1.59
===== ===== ===== =====
Cash dividends per share (2) $ .25 $ .25 $ .75 $ .75
===== ===== ===== =====
Shares of common stock used to
calculate earnings per share (1) 15,515 15,828 15,646 15,820
====== ====== ====== ======
</TABLE>
(1) Shares used in the computation of net income per share of common stock are
based on the weighted average number of shares outstanding in each period.
Shares used in the computation of diluted earnings per share are not
significantly different than the number of shares used in the computation of
basic earnings per share.
(2) Cash dividends per share of common stock are based on the actual dividends
per share, as declared by the Company's Board of Directors.
See accompanying notes.
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<TABLE>
<CAPTION>
ROSEVILLE COMMUNICATIONS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands)
September 30, December 31,
2000 1999
-------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 16,778 $ 10,886
Short-term investments - 6,464
Accounts receivable, net 21,887 20,399
Refundable income taxes - 330
Inventories 3,794 2,510
Deferred income tax asset 1,625 1,625
Prepaid expenses and other current assets 196 251
Investment in cellular partnership, held
for sale 40,489 -
-------- --------
Total current assets 84,769 42,465
Property, plant and equipment, net 274,209 238,908
Investments and other assets:
Cellular partnership - 38,426
Wireless licenses, at cost, net 13,024 8,737
Deferred charges and other assets 4,679 4,651
-------- --------
17,703 51,814
-------- --------
$376,681 $333,187
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 40,000 $ -
Current portion of long-term debt 2,143 2,143
Accounts payable and accrued liabilities 10,039 6,265
Payables to telecommunications entities 5,791 6,353
Advance billings and customer deposits 2,805 2,014
Accrued pension cost 6,899 5,128
Accrued compensation 5,187 4,253
-------- --------
Total current liabilities 72,864 26,156
Long-term debt 44,821 46,428
Deferred credits and other liabilities 30,486 31,747
Minority interest in subsidiary 1,764 1,256
Shareholders' equity:
Common stock, without par value;
100,000 shares authorized,
15,526 shares issued and
outstanding (15,828 shares in 1999) 181,944 189,554
Retained earnings 44,802 38,046
-------- --------
Total shareholders' equity 226,746 227,600
-------- --------
$376,681 $333,187
======== ========
</TABLE>
See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
ROSEVILLE COMMUNICATIONS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Unaudited)
(Amounts in thousands)
Nine Months Ended Nine Months Ended
Sept 30, 2000 Sept 30, 1999
----------- ----------
<S> <C> <C>
Net cash provided by operating activities $38,156 $40,407
Cash flows from investing activities:
Capital expenditures for property, plant and equipment (55,626) (41,685)
Purchases of held-to-maturity investments (33) (6,008)
Maturities of held-to-maturity investments 6,497 5,800
Investment in cellular partnership (9,903) -
Return of investment in cellular partnership 18,046 4,249
Purchase of wireless licenses (4,624) -
Changes in deferred charges and other assets (756) 142
------- -------
Net cash used in investing activities (46,399) (37,502)
Cash flows from financing activities:
Principal payments of long-term debt (1,607) (1,607)
Dividends paid (11,762) (11,865)
Increase in short-term borrowing 40,000 -
Repurchase of common stock (12,496) -
------- -------
Net cash provided by (used in)financing activities 14,135 (13,472)
------- -------
Increase (decrease) in cash and cash equivalents 5,892 (10,567)
Cash and cash equivalents at beginning of period 10,886 38,840
------- -------
Cash and cash equivalents at end of period $16,778 $28,273
======= =======
</TABLE>
See accompanying notes.
<PAGE>
ROSEVILLE COMMUNICATIONS COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share amounts)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated financial statements of Roseville
Communications Company (the "Company") have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission
(the "SEC") and, in the opinion of management, include all adjustments
(consisting only of normal recurring adjustments) necessary to present
fairly the results for the interim periods shown. Certain information
and footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such SEC rules
and regulations and generally accepted accounting principles applicable
for interim periods. Management believes that the disclosures made are
adequate to make the information presented not misleading. These
condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Company's 1999 Annual Report to Shareholders.
The Company is a holding company with subsidiaries operating in the
communications services industry. The Company's wholly-owned principal
operating subsidiary is Roseville Telephone Company ("Roseville
Telephone"). Roseville Directory Company ("RCS Directories"), Roseville
Long Distance Company ("Roseville Long Distance"), RCS Internet
Services ("RCS Internet"), Roseville PCS, Inc. and Roseville
Alternative Company ("Roseville Alternative") are also wholly-owned
subsidiaries of the Company. Roseville PCS, Inc. is the manager of and
has an approximate 97.6% interest in West Coast PCS LLC (d.b.a. "RCS
Wireless"), which was formed for the purpose of providing wireless
personal communications services ("PCS"). The Company expects that the
sources of its revenues and its cost structure may be different in
future periods as a result of its entry into these communications
markets.
The Company's consolidated financial statements have been prepared in
accordance with Statement of Financial Accounting Standards ("SFAS")
No. 71, "Accounting for the Effects of Certain Types of Regulation",
which requires companies meeting its criteria to give effect in their
financial statements to certain actions of regulators. For example,
amounts charged to operations for depreciation expense reflect
estimated lives and methods prescribed by regulators rather than the
economic lives that might otherwise apply to nonregulated enterprises.
A number of telecommunications companies, including all of the Regional
Bell Operating Companies, have determined that they no longer meet the
criteria of SFAS No. 71. The Company believes its regulated operations
continue to meet the criteria of SFAS No.71 due to the authority of
federal and state regulators to establish rates and monitor Roseville
Telephone's earnings, the California Public Utilities Commission's
("P.U.C.") regulatory authority to set Roseville Telephone's
depreciation lives and recent legal proceedings at the federal level
which prohibit a regulatory agency from setting rates and charges at
levels which do not allow telephone companies to recover their cost of
providing telephone services, including a reasonable profit.
As a result of increasing competition and rapid changes in the
telecommunications industry, the Company periodically monitors whether
its regulated operations continue to meet the criteria which require
the use of SFAS No. 71. If it becomes no longer reasonable to assume
that Roseville Telephone can recover its costs of providing regulated
services through rates charged to customers, whether resulting from the
effects of increased competition or specific regulatory actions, SFAS
No. 71 would no longer apply. In the future, should the Company
determine its regulated operations no longer meet the SFAS No. 71
criteria, a material, extraordinary, non-cash charge would result. The
approximate non-cash charge for Roseville Telephone's net regulatory
asset at September 30, 2000 was between $14,000 and $22,000, consisting
principally of property, plant and equipment. The estimate for
property, plant and equipment was calculated based upon a projection of
useful lives which may be affected by the increasing competition and
rapid changes in the telecommunications industry referred to above.
2. Investment in Sacramento-Valley Limited Partnership ("SVLP")
------------------------------------------------------------
As of September 2000 the Company owned an approximate 24% interest in
SVLP, which operates a cellular mobile radiotelephone system
principally in California.
Summarized unaudited income statement information for the quarter and
nine month periods ended September 30, 2000 and 1999 for SVLP is as
follows:
<TABLE>
<CAPTION>
Quarter Quarter Nine Months Nine Months
Ended Ended Ended Ended
September 30, 2000 September 30, 1999 September 30, 2000 September 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenues $55,368 $51,787 $156,666 $144,561
Costs and
expenses 41,574 38,172 113,513 112,591
------- ------- -------- -------
Net Income $13,794 $13,615 $ 43,153 $31,970
======= ======= ======== =======
</TABLE>
The Company, on the one hand, and Airtouch Cellular, d.b.a. Verizon
Wireless ("Verizon"), on the other, are parties to a purchase agreement
dated October 6, 2000 ("Purchase Agreement"), pursuant to which Verizon
will acquire from the Company its limited partnership interest in SVLP,
which constitutes the entirety of any beneficial interest in SVLP held
directly or indirectly by the Company.
The aggregate purchase price to be paid at closing for the SVLP limited
partnership interest is approximately $236,153. Under the terms of the
SVLP partnership agreement, before a limited partner may sell any part
of its partnership interest, notice must be given to other partners of
SVLP, which partners then have a right of first refusal to purchase a
pro rata portion of the partnership interest proposed to be sold. The
Company has agreed under the Purchase Agreement to sell its entire
partnership interest to Verizon and any partner of SVLP which exercises
its right of first refusal to purchase a pro rata portion of the
partnership interest proposed to be sold.
The closing of the transaction contemplated by the Purchase Agreement
is subject to appropriate filings, if any, with the Federal
Communications Commission. The Company believes that the closing will
occur in the fourth quarter of 2000. Accordingly, the Company has
classified its investment in SVLP as a current asset in the
accompanying condensed consolidated balance sheet as of September 30,
2000.
Pro Forma Financial Information
The Company accounts for its interest in SVLP using the equity method.
Consequently, the interest in SVLP has been reflected as a discrete
element in the "Investments and other assets" section of the Company's
consolidated balance sheets. Similarly, the Company's pro rata portions
of SVLP's earnings have been reported separately in the "Other income
(expense)" section of its consolidated statements of income.
The Company believes that a limited number of easily understood pro
forma adjustments result from the transaction contemplated by the
Purchase Agreement, and furnishes the following narrative description
of the unaudited pro forma effect of such transaction.
After giving effect to the transaction contemplated by the Purchase
Agreement, as if it had occurred on September 30, 2000, the Company's
unaudited pro forma condensed consolidated balance sheet as of such
date would reflect (1) an increase in cash and cash equivalents of
$236,153, resulting in a pro forma balance of $252,931 (2) an increase
in deferred income tax assets of $6,123, resulting in a pro forma
balance of $7,748, (3) the elimination of the investment in cellular
partnership of $40,489, (4) a net increase in total current assets of
$201,787, resulting in a pro forma balance of $286,556, (5) an increase
in total assets of $201,787, resulting in a pro forma balance of
$578,468, (6) an increase in accounts payable and accrued liabilities
and total current liabilities of $88,168, resulting in pro forma
balances of $98,207 and $161,032, respectively, (7) a decrease in
deferred credits and other liabilities of $2,555, resulting in a pro
forma balance of $27,931, (8) increases in retained earnings and total
shareholders' equity of $116,174, resulting in pro forma balances of
$160,976 and $342,920, respectively, and (9) a net increase in total
liabilities and shareholders equity of $201,787, resulting in a pro
forma balance of $578,468.
After giving effect to the transaction contemplated by the Purchase
Agreement as if it had occurred on January 1, 2000, and excluding (1)
the nonrecurring gain of $191,727 that would have been recognized if
such transaction had occurred on January 1, 2000 and (2) any income
that could have been earned or expenses that could have been avoided
based upon management's use of the proceeds from this transaction, the
Company's unaudited pro forma consolidated statement of income for the
nine month period ended September 30, 2000 would reflect the
elimination of the equity in income of cellular partnership of $10,206
and corresponding decreases in total other income (expense), net and
income before income taxes of $10,206 and decreases in income taxes,
net income and basic and diluted earnings per share of $4,144, $6,062
and $.39, respectively, resulting in pro forma balances of ($800),
$28,309, $11,341, $16,968 and $1.08, respectively.
3. BUSINESS SEGMENTS
The Company has two reportable business segments: Telecom and PCS. The
Telecom segment primarily provides local, network access and long
distance services, directory advertising services, internet services
and the sale of non-regulated products and services principally to
customers residing in Roseville Telephone's service area. Additionally,
the Telecom segment includes Roseville Telephone's investment in SVLP.
The PCS segment provides personal communications services and the sale
of related communications equipment. The Company evaluates the
performance of these business segments based on income from operations.
These segments are strategic business units that offer different
products and services. The accounting policies of these segments are
the same as those described in Note 1 - Summary of Significant
Accounting Policies. The Company accounts for intersegment sales and
transfers at prevailing market rates. Intersegment sales and transfers
between the Telecom and PCS segments are not significant. The Company's
business segment information is as follows:
<TABLE>
<CAPTION>
Three months ended September 30, 2000
Telecom PCS Consolidated
------- -------- ------------
<S> <C> <C> <C>
Operating revenues $37,901 $1,392 $39,293
Depreciation and amortization 5,358 1,714 7,072
Income/(loss) from operations 14,492 (4,469) 10,023
Three months ended September 30, 1999
Telecom PCS Consolidated
------- -------- ------------
Operating revenues $35,057 $301 $35,358
Depreciation and amortization 5,272 684 5,956
Income/(loss) from operations 11,483 (2,049) 9,434
At September 30, 2000 or the nine months ended
Telecom PCS Consolidated
------- -------- ------------
Operating revenues $111,519 $2,041 $113,560
Depreciation and amortization 16,606 4,056 20,662
Income/(loss) from operations 40,111 11,002) 29,109
Assets 317,644 59,037 376,681
At September 30, 1999 or the nine months ended
Telecom PCS Consolidated
------- ------- ------------
Operating revenues $104,926 $412 $105,338
Depreciation and amortization 15,323 783 16,106
Income/(loss) from operations 37,846 (3,585) 34,261
Assets 302,157 32,739 334,896
</TABLE>
4. PENDING ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements." SAB 101 summarizes certain of the staff's views
in applying generally accepted accounting principles to revenue
recognition in financial statements and is effective for the Company in
the fourth quarter of 2000, retroactive to January 1, 2000. The Company
is currently evaluating the impact that SAB 101 has on its various
revenue recognition policies, including those pertaining to
nonrefundable activation and installation fees, which the Company
currently recognizes as revenue upon completion of the service.
Furthermore, the F.C.C. has not yet issued an order indicating the
extent or manner in which telephone companies should adopt the
provisions of SAB 101. Accordingly, the Company cannot yet fully
evaluate the impact of SAB 101 on its consolidated financial
statements.
The Financial Accounting Standards Board issues SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which
is effective for fiscal years beginning after June 15, 2000. This
statement standardizes the accounting for derivatives and hedging
activities and requires that all derivatives be recognized in the
statement of financial position as either assets or liabilities at fair
value. Changes in the fair value of derivatives that do not meet the
hedge accounting criteria are to be reported in earnings. The Company
is required to adopt this accounting pronouncement in 2001; however,
management believes it will not have a significant impact on the
Company's consolidated financial statements.
5. LINE OF CREDIT
In March 2000, the Company entered into a business loan agreement with
a bank for a $30,000 revolving line of credit with a term of three
years. In September 2000, the bank amended said loan agreement
increasing the borrowing capacity from $30,000 to $50,000. At September
30, 2000, the Company had utilized $40,000 of said borrowing capacity.
Interest on such borrowings accrues on a LIBOR-based pricing formula
with an average interest rate of 7.65% as of September 30, 2000 and is
payable monthly. The maturity date on such borrowings is April 13,
2001.
6. EQUITY INCENTIVE PLANS
The Company has adopted two Equity Incentive Plans for certain
employees, outside directors, and consultants of the Company, which
were subsequently approved by the shareholders. The Company authorized
for future issuance under the Plans one million shares of authorized
but unissued common stock. The Plans include issuance by the Company to
certain individuals awards in the form of Restricted Shares, Stock
Units, Performance Shares, Options and Stock Appreciation Rights. The
exercise price per share of Company common stock purchasable under any
stock option shall be determined by the Company provided, however, the
exercise price under an incentive stock option shall not be less than
100% of the fair market value of a share of the Company's common stock
on the date of the grant, and the exercise price under a non-qualified
stock option shall not be less than 85% of the fair market value of the
Company's common stock on the date of the grant.
Effective May 22, 2000,non-qualified stock options to purchase 5,000
shares of the Company's common stock were granted at an exercise price
of $40.00 per share, with a vesting period of one year. On June 28,
2000, incentive stock options to purchase 387,000 shares of the
Company's common stock were granted at an exercise price of $39.25 per
share, with vesting periods ranging from four to five years. Options
granted under the Plans generally have maximum terms of ten years. The
Company applies APB Opinion No. 25 and related interpretations in
accounting for its stock-based compensation plans. No stock based
compensation expense was recognized for the quarter and nine month
period ended September 30, 2000.
7. STOCK REPURCHASE
In February 2000, the Board of Directors authorized the repurchase of
up to one million shares of the Company's common stock. The shares are
purchased from time to time in the open market or through privately
negotiated transactions subject to overall financial and market
conditions. Through September 30, 2000, approximately 313,000 shares of
common stock have been repurchased. As a result, the Company has
authorization from the Board of Directors to repurchase the remaining
687,000 outstanding shares.
ROSEVILLE COMMUNICATIONS COMPANY
PART I
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. (Dollars in thousands)
Information included in the Company's quarterly report on From 10-Q contains
"forward looking" statements, as defined in the Private Securities Litigation
Reform Act of 1995, that are based on current expectations, estimates and
projections. Statements that are not historical facts, including statements
about the beliefs and expectations of the Company and its subsidiaries, are
forward looking statements. Such forward looking statements are subject to a
number of risks, assumptions and uncertainties that could cause the Company's
actual results to differ materially from those projected in such forward looking
statements.
Important factors that could cause actual results to differ from those set forth
in the forward looking statements include, but are not limited to: advances in
telecommunications technology, changes in the telecommunications regulatory
environment, changes in competition in markets in which the Company operates,
the availability of future financing, changes in the demand for services and
products, new product and service development and introductions, pending and
future litigation and unanticipated changes in the growth of PCS operations. The
Company does not undertake any obligation to update any forward looking
statements whether as a result of new information, future events or otherwise.
Results of Operations
General
Roseville Communications Company (the "Company") is a holding company with
subsidiaries operating in the Telecommunications ("Telecom") and Personal
Communications Services ("PCS") segments.
The Telecom segment is aligned with specific subsidiaries of the Company.
Roseville Telephone Company("Roseville Telephone"), a wholly-owned subsidiary of
the Company, provides local and toll telephone services, network access
services, billing and collection services, directory advertising services and
certain nonregulated services. Additionally, Roseville Telephone and Roseville
Alternative Company ("Roseville Alternative"), wholly-owned subsidiaries of the
Company, own an approximate 24% limited partnership interest in
Sacramento-Valley Limited Partnership ("SVLP") which provides cellular telephone
service principally in California. However, Roseville Telephone and Roseville
Alternative have entered into an agreement to sell the SVLP limited partnership
interest. See "Result of Operations - Subsequent Event" below.
Roseville Directory Company ("RCS Directories"), a wholly-owned subsidiary of
the Company, produces, publishes and distributes Roseville Telephone's directory
including the sale of yellow pages advertising. RCS Directories is also engaged
in the business of producing, publishing and distributing directories in other
Northern California communities outside of Roseville Telephone's service area.
The Company's wholly-owned subsidiary, Roseville Long Distance Company
("Roseville Long Distance"), is engaged in the provision of long distance
services. The Company's wholly-owned subsidiary, RCS Internet Services ("RCS
Internet"), is engaged in the provision of high speed internet services.
The PCS segment consists of the Company's wholly-owned subsidiary, Roseville
PCS, Inc., which is the manager of and has an approximate 97.6% interest in West
Coast PCS LLC (d.b.a. "RCS Wireless"), which was formed together with another
entity not controlled by the Company for the purpose of providing PCS.
The Company expects that the sources of its revenues and its cost structure may
be different in future periods as a result of its entry into new communications
markets.
Subsequent Event
The Company, on the one hand, and AirTouch Cellular, d.b.a. Verizon Wireless
("Verizon"), on the other, are the parties to a Purchase Agreement dated October
6, 2000 ("Purchase Agreement"), pursuant to which Verizon will acquire from the
Company the limited partnership interest in SVLP, which constitutes the entirety
of any beneficial interest in SVLP held directly or indirectly by the Company.
The aggregate purchase price to be paid at closing for the SVLP limited
partnership interest is approximately $236,153. Under the terms of the SVLP
partnership agreement, before a limited partner may sell any part of its
partnership interest, notice must be given to other partners of SVLP, which
partners then have a right of first refusal to purchase a pro rata portion of
the partnership interest proposed to be sold. The Company has agreed under the
Purchase Agreement to sell its entire partnership interest to Verizon and any
partner of SVLP which exercises its right of first refusal to purchase a pro
rata portion of the partnership interest proposed to be sold.
The closing of the transaction contemplated by the Purchase Agreement is subject
to appropriate filings, if any, with the Federal Communications Commission. The
Company believes that the closing will occur in the fourth quarter of 2000.
Accordingly, the Company has classified its investment in SVLP as a current
asset in the accompanying condensed consolidated balance sheet as of September
30, 2000. For further information regarding the pro forma impact to the
Company's unaudited condensed financial results see "Pro Forma Financial
Information" below.
Operating Revenues
The Telecom segment derives its revenue from rate regulated services, long
distance services, directory advertising services, internet services and the
sale of non-regulated products and services. The PCS segment derives its revenue
from the provision of wireless digital personnel communication services and the
sale of related communications equipment.
Revenues from rate regulated services, which include local service and network
access service generated by Roseville Telephone, constituted approximately 77%
and 79% of the Company's total operating revenues for the quarters ended
September 30, 2000 and 1999, respectively. For the nine month periods ended
September 30, 2000 and 1999, revenues from rate regulated services constituted
approximately 78% and 79%, respectively, of the Company's total operating
revenues. Rate regulated revenues are derived from various sources, including
billings to business and residential subscribers for basic exchange services,
extended area service charges, surcharges mandated by the California Public
Utilities Commission (the "P.U.C."), billings to Pacific Bell, long distance
carriers, competitive access providers and subscribers for network access
services; interstate settlement revenues from the National Exchange Carrier
Association; and support payments from the interstate Universal Service Fund.
Roseville Telephone bills Pacific Bell various charges for certain local service
and network access service revenues pursuant to certain agreements described
below. Of the Company's total revenues for the quarters ended September 30, 2000
and 1999, 10% and 13%, respectively, were recorded under these agreements.
Approximately 11% and 13% of the Company's total revenues were recorded under
Pacific Bell agreements during the nine month periods ended September 30, 2000
and 1999. In March 1999, Pacific Bell expressed interest in withdrawing from the
designated carrier plan ("DCP") for Roseville Telephone's toll traffic and to
enter into a new, permanent compensation arrangement for extended area service
("EAS"). The DCP is a compensation arrangement between Roseville Telephone and
Pacific Bell for certain intraLATA toll services. Pacific Bell also pays
Roseville Telephone $11,500 per year for EAS pursuant to a Settlement Transition
Agreement ("STA"). Pacific Bell and Roseville Telephone have agreed to
modifications to these agreements whereby Pacific Bell's payments to Roseville
Telephone for EAS will cease as of December 31, 2000. In addition, Roseville
Telephone filed an application with the P.U.C. for revenues to replace potential
changes in Pacific Bell's payments. In October 2000, the P.U.C. issued a
proposed decision which, if adopted, would authorize Pacific Bell to discontinue
its $11,500 annual payments to Roseville Telephone and authorize Roseville
Telephone to receive interim payments in the same amount from the California
High Cost Fund - B. During the interim period, the P.U.C. will conduct an
investigation to reconsider the expense levels and revenue requirement
established in Roseville Telephone's last general rate case in order to
determine whether or not ratepayers should be responsible to make up some or all
of the $11,500 annual payments made by Pacific Bell.
In December 1996, the P.U.C. issued a decision in connection with Roseville
Telephone's general rate proceeding which authorized Roseville Telephone to
implement a New Regulatory Framework ("NRF") for services furnished within the
State of California in order to accommodate market and regulatory movement
toward competition and greater pricing flexibility. Under the NRF, Roseville
Telephone is subject to ongoing monitoring and reporting requirements, including
a sharing mechanism whereby Roseville Telephone may be required to share
earnings with customers based on its earned annual rate-of-return. As of
December 31, 1999 and 1998, Roseville Telephone had no obligation to share
earnings with customers.
In accordance with the requirements of its general rate case order, Roseville
Telephone filed an application for review of its NRF in March 1999. This
proceeding will consider modifications to the NRF structure, including potential
changes to the current monitoring and reporting requirements, the earnings
sharing mechanism, promotional and pricing flexibility, and related matters. In
addition, the P.U.C. Office of Ratepayer Advocates ("ORA") conducted a
verification audit of Roseville Telephone's non-regulated and affiliated
transactions pursuant to the general rate case, the NRF framework and other
P.U.C. orders. The ORA report was submitted in the NRF proceeding and
evidentiary hearings on how this impacts the NRF framework were completed on
April 21, 2000. During these hearings, ORA claimed, among other things, that the
results of the verification audit allegedly show that Roseville Telephone has
misallocated costs and revenues between regulated and non-regulated accounts. As
a result, ORA recommends retroactive rate adjustments and continuation of the
sharing mechanism. The Company disagrees with the audit findings and ORA's
recommendations to the P.U.C. The Company anticipates a P.U.C. decision in the
NRF proceeding later this year, the effect of which on Roseville Telephone
cannot yet be determined.
Rate regulated revenues increased $2,300 and $5,200, or 8% and 6%, for the
quarter and nine month periods ended September 30, 2000, respectively, compared
to the same periods in 1999 due to the combined effects of 1) access line growth
of 2%, 2) improved penetration in custom calling, voice mail and other enhanced
network services, 3) increased network access revenues due to larger
minute-of-use volumes and expanded demand for dedicated access services and 4)
the introduction of digital subscriber line ("DSL") services in August of 1999.
Subscribers of DSL services have grown from approximately 1,300 as of December
31, 1999 to more than 4,900, or 277%, as of September 30, 2000. Additionally, in
the first quarter 1999, the Company recorded a one-time positive adjustment of
$812 relating to interstate access settlements.
Directory advertising revenues increased $133 and $266 for the quarter and nine
month periods ended September 30, 2000, respectively, compared to the same
periods in 1999 due primarily to an increase in advertising sales relating to
Roseville Telephone's directory. Other operating revenues increased $1,200 and
$2,100 for the quarter and nine month periods ended September 30, 2000,
respectively, compared to the same periods in 1999, due primarily to an increase
in the market penetration of long distance services and the introduction of
wireless and internet services in June and August of 1999, respectively.
Operating Expenses:
Operating expenses increased $3,300 and $13,400 or 13% and 19%, for the quarter
and nine month periods ended September 30, 2000, respectively, compared to the
same periods in 1999 due to the factors described below.
Cost of services and products increased $991 and $5,500, or 10% and 20%, for the
quarter and nine month periods ended September 30, 2000, respectively, compared
to the same periods in 1999 due primarily to an increase in tower rents related
to the continuing expansion of the coverage area of RCS Wireless, transport
costs associated with long distance services, and modem and transports costs
related to Internet services. The above increases were partially offset by an
$899 one-time decrease related to recovery of costs associated with local number
portability authorized by the P.U.C.
Customer operations and selling expense increased $2,000 and $3,800, or 45%, and
30%, for the quarter and nine month periods ended September 30, 2000,
respectively, compared to the prior year periods due to increased labor costs
relating to an increase in personnel, marketing and advertising costs associated
with wireless services, and customer support activities associated with internet
services.
General and administrative costs decreased $715 and $508 or 12%, and 3%, for the
quarter and nine month periods ended September 30, 2000, respectively, compared
to the same periods in 1999. Increases in various general and administrative
costs during the quarter and nine months ended September 30, 2000 compared to
the same period in 1999 were offset by costs related to the year 2000 computer
upgrades in 1999 which did not occur in 2000.
Depreciation and amortization costs increased $1,100 and $4,600, or 19% and 28%,
for the quarter and nine month periods ended September 30, 2000, respectively,
compared to the same periods in 1999 due primarily to an increase in telephone
and wireless plant depreciation, the amortization of network software and,
commencing in June 1999, the amortization of PCS licenses.
Other Income, Net:
Other income, net, decreased $385 and increased $1,346, or 12% and 17%, for the
quarter and nine month periods ended September 30, 2000, respectively, compared
to the same periods in 1999. The decrease in quarter to quarter income is due in
part to the decrease in interest income due to lower investment balances and
increased interest expense due to higher aggregate long-term and short-term
borrowings. The year to date increase is due primarily to an increase in income
attributable to its interest in SVLP of $2,700. This increase was partially
offset by decreases in interest income and increases in interest expense
described above.
Income Taxes:
Income taxes for the quarter ended September 30, 2000 increased $37 compared to
the same period in 1999 due primarily to the increase in income subject to
taxes. Income taxes for nine month period ended September 30, 2000, decreased
$1,600, compared to the same period in 1999 due to the decrease in income
subject to tax. The effective federal and state income tax rates were
approximately 40.1% and 40.4% for the quarters ended September 30, 2000 and
1999, respectively and the effective federal and state income tax rates were
approximately 40.2% and 40.5% for the nine month periods ended September 30,
2000 and 1999, respectively.
Liquidity and Capital Resources
As reflected in the Condensed Consolidated Statements of Cash Flows, net cash
provided by operating activities was $38,200 and $40,400 for the nine month
periods ended September 30, 2000 and 1999, respectively. During the nine month
period ended September 30, 2000, the Company used cash flows from operations and
existing cash, cash equivalents and short-term investments to fund 1) capital
expenditures of $55,600 pertaining to ongoing plant construction projects, 2)
common stock repurchases of $12,500, 3) dividends of $11,800, 4) principal
payments of $1,600 to retire long-term debt and 5) the purchase of Local
Multipoint Distribution System ("LMDS") broadband wireless licenses in the
aggregate amount of $4,600.
The Company's most significant use of funds for the balance of 2000 is expected
to be for 1) remaining budgeted capital expenditures of approximately $16,300,
2) remaining scheduled payments of long-term debt of $536 3) anticipated cash
dividends of $3,900 and 4) net operating expenditures of up to $6,500 relating
to RCS Wireless.
In February 2000, the Board of Directors authorized the repurchase of up to one
million shares of the Company's common stock. The shares are purchased from time
to time in the open market or through privately negotiated transactions subject
to overall financial and market conditions. Through September 30, 2000,
approximately 313,000 shares of common stock have been repurchased. As a result,
the Company has authorization from the Board of Directors to repurchase the
remaining 687,000 outstanding shares.
In March 2000, the Company entered into a business loan agreement with a bank
for a $30,000 revolving line of credit with a term of three years. In September
2000, the bank amended said loan agreement increasing the borrowing capacity
from $30,000 to $50,000. At September 30, 2000, the Company had utilized $40,000
of said borrowing capacity. Interest on such borrowings accrues on a LIBOR-based
pricing formula with an average interest rate of 7.65% as of September 30, 2000
and is payable monthly. The maturity date on such borrowings is April 13, 2001.
In addition to net cash provided by operations and existing cash and cash
equivalents, the Company's borrowing capacity under the aforementioned business
loan agreement, and the anticipated proceeds from the Company's sale of its 24%
limited partnership in Sacramento - Valley Limited Partnership, the Company may
consider other sources of external financing for the purposes of funding future
capital expenditures and potential investments.
Pro Forma Financial Information
The Company accounts for its interest in SVLP using the equity method.
Consequently, the interest in SVLP has been reflected as a discrete element in
the "Investments and other assets" section of the Company's consolidated balance
sheets. Similarly, the Company's pro rata portions of SVLP's earnings have been
reported separately in the "Other income (expense)" section of its consolidated
statements of income.
The Company believes that a limited number of easily understood pro forma
adjustments result from the transaction contemplated by the Purchase Agreement,
and furnishes the following narrative description of the unaudited pro forma
effect of such transaction.
After giving effect to the transaction contemplated by the Purchase Agreement,
as if it had occurred on September 30, 2000, the Company's unaudited pro forma
condensed consolidated balance sheet as of such date would reflect (1) an
increase in cash and cash equivalents of $236,153, resulting in a pro forma
balance of $252,931 (2) an increase in deferred income tax assets of $6,123,
resulting in a pro forma balance of $7,748, (3) the elimination of the
investment in cellular partnership of $40,489, (4) a net increase in total
current assets of $201,787, resulting in a pro forma balance of $286,556, (5) an
increase in total assets of $201,787, resulting in a pro forma balance of
$578,468, (6) an increase in accounts payable and accrued liabilities and total
current liabilities of $88,168, resulting in pro forma balances of $98,207 and
$161,032, respectively, (7) a decrease in deferred credits and other liabilities
of $2,555, resulting in a pro forma balance of $27,931, (8) increases in
retained earnings and total shareholders' equity of $116,174, resulting in pro
forma balances of $160,976 and $342,920, respectively, and (9) a net increase in
total liabilities and shareholders equity of $201,787, resulting in a pro forma
balance of $578,468.
After giving effect to the transaction contemplated by the Purchase
Agreement as if it had occurred on January 1, 2000, and excluding (1) the
nonrecurring gain of $191,727 that would have been recognized if such
transaction had occurred on January 1, 2000 and (2) any income that could have
been earned or expenses that could have been avoided based upon management's use
of the proceeds from this transaction, the Company's unaudited pro forma
consolidated statement of income for the nine month period ended September 30,
2000 would reflect the elimination of the equity in income of cellular
partnership of $10,206 and corresponding decreases in total other income
(expense), net and income before income taxes of $10,206 and decreases in income
taxes, net income and basic and diluted earnings per share of $4,144, $6,062 and
$.39, respectively, resulting in pro forma balances of ($800), $28,309, $11,341,
$16,968 and $1.08, respectively.
Other Financial Information
As discussed in the notes to the condensed consolidated financial statements,
the Company's consolidated financial statements have been prepared in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 71, "Accounting
for the Effects of Certain Types of Regulation", which requires companies
meeting its criteria to give effect in their financial statements to certain
actions of regulators. For example, amounts charged to operations for
depreciation expense reflect estimated lives and methods prescribed by
regulators rather than the economic lives that might otherwise apply to
nonregulated enterprises. A number of telecommunications companies, including
all of the Regional Bell Operating Companies, have determined that they no
longer meet the criteria of SFAS No. 71. The Company believes its regulated
operations continue to meet the criteria of SFAS No.71 due to the authority of
federal and state regulators to establish rates and monitor Roseville
Telephone's earnings, the P.U.C.'s regulatory authority to set Roseville
Telephone's depreciation lives and recent legal proceedings at the federal level
which prohibit a regulatory agency from setting rates and charges at levels
which do not allow telephone companies to recover their cost of providing
telephone services, including a reasonable profit.
As a result of increasing competition and rapid changes in the
telecommunications industry, the Company periodically monitors whether its
regulated operations continue to meet the criteria which require the use of SFAS
No. 71. If it becomes no longer reasonable to assume that Roseville Telephone
can recover its costs of providing regulated services through rates charged to
customers, whether resulting from the effects of increased competition or
specific regulatory actions, SFAS No. 71 would no longer apply. In the future,
should the Company determine its regulated operations no longer meet the SFAS
No. 71 criteria, a material, extraordinary, non-cash charge would result. The
approximate non-cash charge for Roseville Telephone's net regulatory asset at
September 30, 2000 was between $14,000 and $22,000, consisting principally of
property, plant and equipment. The estimate for property, plant and equipment
was calculated based upon a projection of useful lives which may be affected by
the increasing competition and rapid changes in the telecommunications industry
referred to above.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." SAB
101 summarizes certain of the staff's views in applying generally accepted
accounting principles to revenue recognition in financial statements and is
effective for the Company in the fourth quarter of 2000, retroactive to January
1, 2000. The Company is currently evaluating the impact that SAB 101 has on its
various revenue recognition policies, including those pertaining to
nonrefundable activation and installation fees, which the Company currently
recognizes as revenue upon completion of the service. Furthermore, the F.C.C.
has not yet issued an order indicating the extent or manner in which telephone
companies should adopt the provisions of SAB 101. Accordingly, the Company
cannot yet fully evaluate the impact of SAB 101 on its consolidated financial
statements.
The Financial Accounting Standards Board issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which is effective for fiscal
years beginning after June 15, 2000. This statement standardizes the accounting
for derivatives and hedging activities and requires that all derivatives be
recognized in the statement of financial position as either assets or
liabilities at fair value. Changes in the fair value of derivatives that do not
meet the hedge accounting criteria are to be reported in earnings. The Company
is required to adopt this accounting pronouncement in 2001; however, management
believes it will not have a significant impact on the Company's consolidated
financial statements.
PART II
Item 1. Regulatory and Legal Proceedings.
---------------------------------
Except for the proceedings described below, the Company is not aware of any
material pending legal proceedings, other than ordinary routine litigation
incidental to its business, to which it is a party or to which any of its
property is subject.
Roseville Telephone is subject to regulation by the F.C.C. and P.U.C. In the
past, there have been various proceedings before these agencies to which
Roseville Telephone has been a party.
In 1996, Congress passed the Telecommunications Act of 1996 (the "Act") which
significantly changed the regulatory environment for telecommunications
companies. Beginning in 1996, the F.C.C. adopted orders implementing the Act's
provisions to open local exchange service markets to competition. The F.C.C.
rules outline pricing methodologies for the states to follow when setting rates
for resale, interconnection and unbundled network elements. In 1997, the United
States Court of Appeals for the Eighth Circuit found that the F.C.C. exceeded
its jurisdiction in connection with some of its orders implementing the Act. In
early 1999, the United States Supreme Court reversed the Eighth Circuit's
determinations that the F.C.C. lacked authority to implement the Act by adopting
local pricing standards or to bar incumbent local exchange carriers from
separating already-combined unbundled network elements ("UNEs") before offering
them to competitors. The Supreme Court also reinstated the agency's
"pick-and-choose" rules. However, the Supreme Court invalidated the F.C.C.'s
original list of UNEs, saying the F.C.C. had failed to determine that those
elements were necessary for competitors to offer service. The F.C.C. has opened
a proceeding to review this issue in light of the Supreme Court's order, and on
September 15, 1999, adopted an order identifying UNEs that incumbent local
exchange carriers ("ILECs") must make available to competitors. On July 18,
2000, the United States Court of Appeals for the Eighth Circuit vacated the
FCC's Total Element Long Run Incremental Cost ("TELRIC") pricing standard for
determining the price that ILECs can charge to CLECs seeking use of unbundled
network elements. The 1998 United States Supreme Court decision remanded the
reasonableness of TELRIC pricing back to the Eighth Circuit for determination.
In addition, the Circuit's decision, also vacated, among other things, the FCC's
rules which define "avoided retail costs" for purposes of determining wholesale
rates, the FCC's proxy prices, the FCC's rules which addressed the
identification of additional network elements to be unbundled, and the FCC's
superior quality and additional combinations rules.
In 1997, the F.C.C. adopted orders on access charge reform and a new universal
service program. The F.C.C.'s order on access charge reform generally removed
from minute-of-use access charges costs that are not incurred on a
per-minute-of-use basis. The F.C.C. also adopted changes to its interstate rate
structure for transport services which are designed to move the charges for
these services to more cost-based levels. The F.C.C.'s order on universal
service reformed the existing system of universal service in a manner that will
permit local telephone markets to move to a competitive arena. The order on
universal service provides continued support to low-income consumers and will
help to connect eligible schools, libraries and rural health care providers to
the global telecommunications network. In 1999, the United States Court of
Appeals for the Fifth Circuit issued an opinion addressing challenges to the
F.C.C.'s universal service order. The Court upheld the F.C.C.'s authority to
implement its program for funding telecommunications services for schools and
libraries and rejected challenges on technical issues such as the F.C.C.'s use
of models in determining universal service. The Court ruled, however, that the
F.C.C. can't use intrastate revenues in determining a carriers' universal
service contribution and rejected the so-called flowback method of collecting
universal service contributions through access charges. To implement the Fifth
Circuit's decision, the F.C.C. adopted an order in October 1999, making
revisions to its rules, effective on November 1, 1999, requiring, among other
things, that ILECs recover their universal service contributions either through
interstate access charges or interstate end-user charges based on interstate and
international end-user telecommunications revenues only. On October 21, 1999,
the Commission adopted two orders in connection with universal service reform.
In the first order, the F.C.C. completed development of the cost model to be
used as a basis for federal universal service support. In the second order, the
F.C.C. adopted a methodology based on the results of the cost model to calculate
the level of support for non-rural carriers serving high-cost areas. In
addition, the F.C.C. held that the amount of support provided to carriers on a
per-line basis by the forward-looking mechanism will be no less than the amount
of support provided to the carrier by the present mechanism but that federal
universal service support will be portable among all eligible telecommunications
carriers. If a competitor acquires a subscriber line from an incumbent receiving
support, the competitor will receive the incumbent's federal universal service
support for that line.
Given the Act's relatively recent enactment, the ongoing actions of the
F.C.C. to implement the Act, and the various ongoing legal challenges
considering the validity of these F.C.C. orders, it is not yet possible to
determine fully the impact of the Act and related F.C.C. regulations on
Roseville Telephone's operations.
Roseville Telephone bills Pacific Bell various charges for certain local service
and network access service revenues pursuant to certain agreements described
below. In March 1999, Pacific Bell expressed interest in withdrawing from the
designated carrier plan ("DCP") for Roseville Telephone's toll traffic and to
enter into a new, permanent compensation arrangement for extended area service
("EAS"). The DCP is a compensation arrangement between Roseville Telephone and
Pacific Bell for certain intraLATA toll services. Pacific Bell also pays
Roseville Telephone $11,500 per year for EAS pursuant to a Settlement Transition
Agreement ("STA"). Pacific Bell and Roseville Telephone have agreed to
modifications to these agreements whereby Pacific Bell's payments to Roseville
Telephone for EAS will cease as of December 31, 2000. In addition, Roseville
Telephone filed an application with the P.U.C. for revenues to replace potential
changes in Pacific Bell's payments. In October 2000, the P.U.C. issued a
proposed decision which, if adopted, would authorize Pacific Bell to discontinue
its $11,500 annual payments to Roseville Telephone and authorize Roseville
Telephone to receive interim payments in the same amount from the California
High Cost Fund - B. During the interim period, the P.U.C. will conduct an
investigation to reconsider the expense levels and revenue requirement
established in Roseville Telephone's last general rate case in order to
determine whether or not ratepayers should be responsible to make up some or all
of the $11,500 annual payments made by Pacific Bell.
The Company's financial condition and results of operations have been and
will be affected by recent and future proceedings before the P.U.C. and F.C.C.
Pending before the F.C.C. and P.U.C. are proceedings which are considering:
The rules governing the opening of markets to competition
The goals and definition of universal telephone service in a changing
environment, including examination of subsidy support mechanisms for
subscribers in high cost areas and issues of "carrier of last resort"
and "franchise" obligations
Rules that will provide non-discriminatory access by competing service
providers to the network capabilities of local exchange carriers
The eventual impact on the Company of the effect of all the proceedings
described above cannot presently be determined.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
a) See Index to Exhibits.
b) Reports on Form 8-K
The Company filed a report on Form 8-K on October 20, 2000 relating to
the proposed sale of its approximate 24% limited partnership interest
in Sacramento-Valley Limited Partnership.
<PAGE>
ROSEVILLE COMMUNICATIONS COMPANY
INDEX TO EXHIBITS
(Item 6 (a))
Method
Exhibit No. Description of Filing Page
----------- ----------- ------- ----
3(a) Articles of Incorporation of the Company, Incorporated -
together with Incorporated Certificate of by reference
Amendment of Articles of January 25, 1996
and Certificate of Amendment of Articles
of Incorporation dated June 21, 1996
(Filed as Exhibit 3(a) to Form 10-Q
Quarterly Report for the quarter ended
September 30, 1996)
3(b) Bylaws of the Company Incorporated -
by reference
4(a) Shareholder Rights Plan(Filed Incorporated -
as Exhibit 2.1 to Form 8-A Registration by reference
Statement under the Securities Act of 1934)
10(a) Sacramento-Valley Limited Partnership Incorporated -
Agreement, dated April 4, 1984 by reference
(Filed as Exhibit I to Form 10-Q
Quarterly Report of Roseville
Telephone Company for the quarter ended
March 31, 1984)
10(b) Credit Agreement of Roseville Incorporated -
Telephone Company with Bank of America by reference
National Trust and Savings Association,
dated March 27, 1992, with respect to
$25,000,000 term loan.(Filed as
Exhibit 10(a) to Form 10-Q Quarterly
Report of Roseville Telephone
Company for the quarter ended March 31,
1992)
10(c) Note Purchase Agreement for Series Incorporated -
A Senior Notes in the aggregate amount by reference
of $40,000,000 dated December 9, 1998
(Filed as Exhibit 10(c) to Form 10-K
Annual Report of Roseville Communications
Company for the year ended December 31, 1998)
10(d) Operating Agreement of West Coast PCS LLC Incorporated -
Filed as Exhibit 10(d) to Form 10-K by reference
Annual Report of Roseville Communications
Company for the year ended December 31, 1997)
10(e) 1999 Restricted Stock Bonus Plan Incorporated -
(Filed as Exhibit 10(e) to Form 10-K by reference
Annual Report of Roseville Communications
Company for the year ended December 31, 1998)
10(f) 2000 Equity Incentive Plan Incorporated -
(Filed as Exhibit 10 (f) to Form by reference
10-K Annual Report of Roseville
Communications Company for the year
ended December 31, 1999)
10(g) Business Loan Agreement of Roseville Incorporated -
Communications Company with Bank of by reference
America, dated March 15, 2000
(Filed as Exhibit 10(g) to Form 10-Q
Quarterly Report of Roseville
Communications Company for the quarter
ended March 31, 2000)
21(a) List of subsidiaries
Incorporated -
by reference
27 Financial Data Schedule Filed herewith -
<PAGE>
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.
ROSEVILLE COMMUNICATIONS COMPANY
(Registrant)
Date: October 31, 2000 By: /s/BRIAN H. STROM
----------------------------------------
Brian H. Strom,
President and Chief
Executive Officer
Date: October 31, 2000 By: /s/MICHAEL D. CAMPBELL
----------------------------------------
Michael D. Campbell,
Executive Vice-President
and Chief Financial Officer
<PAGE>
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.
ROSEVILLE COMMUNICATIONS COMPANY
(Registrant)
Date: October 31, 2000 By: ___________________________
Brian H. Strom,
President and Chief
Executive Officer
Date: October 31, 2000 By: ___________________________
Michael D. Campbell,
Executive Vice-President
and Chief Financial Officer