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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 15, 2000
PEGASUS MEDIA & COMMUNICATIONS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 33-95042 23-2778525
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
c/o Pegasus Communications Management Company, 225 City Line Avenue,
Suite 200, Bala Cynwyd, Pennsylvania 19004
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 888-438-7488
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c/o Pegasus Communications Management Company, 100 Matsonford Road,
5 Radnor Corporate Center, Suite 454, Radnor, Pennsylvania 19087
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
Sale of Puerto Rico Cable System. On September 15, 2000, pursuant to
the terms of an Asset Purchase Agreement, MCT Cablevision, LP and Pegasus Cable
Television of San German, Inc. sold the assets of their entire cable system in
Puerto Rico to Centennial Puerto Rico Cable TV Corp., a subsidiary of Centennial
Communications Corp., for the purchase price of $170,000,000 in cash (subject to
certain adjustments). Pegasus Media & Communications, Inc., through one of its
wholly-owned subsidiaries, is the indirect parent of MCT Cablevision, LP and
Pegasus Cable Television of San German, Inc. The Puerto Rico cable system served
approximately 57,000 subscribers and passed over approximately 170,000 homes in
Aguadilla, Mayaguez, San German and surrounding communities in the western part
of Puerto Rico.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Acquired or to be Acquired Businesses.
Not applicable.
(b) Pro Forma Financial Information.
PM&C began accounting for the Puerto Rico cable system as a
discontinued operation as of December 31, 1999, and, accordingly, has
disclosed and reported the net revenues and income separately from its
continuing operations in previous disclosure documents filed with the
Securities and Exchange Commission. On this basis, PM&C does not
believe that a pro forma consolidated statement of operations is
required to be included in this form 8-K. The unaudited pro forma
condensed combined balance sheet as of June 30, 2000 and the notes to
the unaudited pro forma condensed combined balance sheet are attached
hereto.
(c) Exhibits.
2.1 Asset Purchase Agreement dated as of May 15, 2000 among
Centennial Puerto Rico Cable TV Corp., Pegasus
Communications Corporation, Pegasus Cable Television of
San German, Inc. and MCT Cablevision, Limited
Partnership (which is incorporated by reference herein
to Exhibit 2.1 to Pegasus Communication Corporation's
Current Report on Form 8-K dated September 15, 2000).
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SIGNATURE
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.
PEGASUS MEDIA & COMMUNICATIONS, INC.
By: /s/ Scott A. Blank
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Name: Scott A. Blank
Title: Vice President
September 29, 2000
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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
On September 15, 2000, MCT Cablevision, LP and Pegasus Cable Television of San
German, Inc. jointly sold their entire interests in the Puerto Rico cable
system. Pegasus Media & Communications, Inc., through one of its operating
subsidiaries, is the indirect parent of MCT and PCTSG. The sale price was $170.0
million cash, subject to adjustment for accounts receivables, prepaid items and
liabilities associated with the system on the date of sale.
The provided unaudited pro forma condensed combined balance sheet of PM&C as of
June 30, 2000 gives effect to the sale of the Puerto Rico cable system as if the
sale had occurred on June 30, 2000. The pro forma balance sheet also gives
effect to the assumed write-off at June 30, 2000 of the remaining balances of
intangible assets connected with the Puerto Rico cable operations that have no
future benefit after the sale of the cable system.
The unaudited pro forma condensed combined balance sheet is provided for
informational purposes only and is not necessarily indicative of the financial
position that actually would have existed had the sale occurred on the date
indicated or that may exist in the future. The pro forma adjustments are based
upon available information and certain assumptions that the management of PM&C
believes are reasonable in the circumstances. The ultimate use of the cash
proceeds from the sale may differ from the assumptions used in the pro forma
balance sheet as of June 30, 2000, where the proceeds are reflected as being
invested in a money market fund.
Pegasus Media & Communications, Inc.
Pro Forma Condensed Combined Balance Sheet
June 30, 2000
(in thousands)
(Unaudited)
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Historical Adjustments Pro Forma
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ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 10,758 $ 165,030 (a) $ 175,788
Accounts receivable, net 33,069 (694)(b) 32,375
Inventory 20,292 (725)(b) 19,567
Prepaid expenses 6,098 (307)(c) 5,791
Other current assets 8,043 8,043
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Total current assets 78,260 163,304 241,564
Property and equipment, net 51,591 (18,837)(b) 32,754
Intangibles, net 826,934 (61,836)(d) 765,098
Other non-current assets 173,857 3,000 (e) 176,857
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Total assets $ 1,130,642 $ 85,631 $ 1,216,273
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LIABILITIES AND EQUITY
Accounts payable $ 7,166 $ 7,166
Other current liabilities 85,039 $ 23,423 (f) 108,462
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Total current liabilities 92,205 23,423 115,628
Long-term debt, net 362,170 362,170
Program rights payable, net 2,248 2,248
Deferred taxes 115,135 (2,043)(g) 113,092
Common stock 2 2
Other stockholder's equity 558,882 64,251 (h) 623,133
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Total liabilities and equity $ 1,130,642 $ 85,631 $ 1,216,273
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Notes to Unaudited Pro Forma Condensed Combined Balance Sheet:
(a) Sale price of $170.0 million less adjustments to the sale price of $1.8
million, amount placed in escrow of $3.0 million and payments associated
with the sale of $195,000. The net cash proceeds are expected to be
primarily used to fund acquisitions and for general corporate purposes.
(b) Net book value of assets sold or amounts included in adjustments to the
sale price.
(c) Net book value of assets sold of $108,000 and deferred costs connected with
the sale of $199,000.
(d) Write-off of net book value of intangible assets associated with
acquisitions of cable operations in Puerto Rico.
(e) Cash proceeds from the sale placed in escrow.
(f) Net of assumed Puerto Rico capital gains and withholding taxes payable on
the sale of approximately $26.0 million, less amounts included in
adjustments to the sale price aggregating $2.6 million. For U.S. income tax
purposes, it is assumed that any tax gain recognized on the sale is offset
by available net operating loss carryforwards.
(g) Reversal of an assumed amount of deferred taxes associated with the Puerto
Rico cable operations.
(h) Assumed net after tax gain of the sale and related write-offs.
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Exhibit Index
Exhibit No. Description
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2.1 Asset Purchase Agreement dated as of May 15, 2000 among
Centennial Puerto Rico Cable TV Corp., Pegasus
Communications Corporation, Pegasus Cable Television of
San German, Inc. and MCT Cablevision, Limited
Partnership (which is incorporated by reference herein
to Exhibit 2.1 to Pegasus Communications Corporation's
Current Report on Form 8-K dated September 15, 2000).
