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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 15, 1996
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Date of Report (Date of earlier event reported)
360 COMMUNICATION COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 1 - 14108 47-0649117
- ---------------------- ------------------- --------------------------------
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
8725 W. Higgins Road, Chicago, Illinois 60631
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(Address of principal executive offices) (Zip Code)
(773) 399-2500
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On October 15, 1996, 360 Communications Company (the "Company") issued a press
release announcing the consolidated operating results of the Company and its
subsidiaries for the third quarter of 1996. A copy of the press release is
attached hereto as Exhibit 1.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 1: Press Release issued by 360 Communications Company on
October 15, 1996 regarding the consolidated operating results of 360
Communications Company and its subsidiaries for the third quarter of 1996.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
360 Communications Company
By: /s/ Gary L. Burge
Gary L. Burge
Senior Vice President - Finance
Date: October 25, 1996
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EXHIBIT INDEX
Exhibit
No. Description of Exhibits
- -------- ----------------------------
1 Press Release issued by 360 Communications Company on
October 15, 1996 regarding the consolidated operating results
of 360 Communications Company and its subsidiaries for the
third quarter of 1996.
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360 Communications....Corporate Communications....8725 W. Higgins Road....
Chicago, Illinois 60631....(773)399-2200
MEDIA: FOR IMMEDIATE RELEASE
Margaret Kirch Cohen
(773) 399-2385
ANALYSTS:
Dave Gould
(773) 399-2284
(919) 218-3777 (cellular)
360 COMMUNICATIONS REPORTS SOLID THIRD QUARTER RESULTS
STRONG REVENUES, OPERATING CASH FLOW MARGIN AND NET INCOME
(Chicago) Oct. 15, 1996 -- Fueled by strong growth in its core wireless
communications business, Chicago-based 360 Communications (NYSE:XO)
today reported record total operating revenue of $281.7 million during the third
quarter of 1996, up nearly 30 percent from $217.8 million in the third quarter
of 1995. Cellular service revenues during the quarter were a record $271.8
million, up 31 percent over $207.5 million during the same period in 1995.
360 reported operating cash flow of $100.4 million during the
third quarter, a 38 percent increase over $72.8 million in the third quarter of
1995. Operating cash flow, as a percentage of cellular service revenues, reached
37 percent, compared with 35 percent in the third quarter of 1995.
"Our fundamental wireless business remains strong, and we're pleased
with our solid performance," said Dennis E. Foster, president and chief
executive officer of 360 Communications. "Highlighting the quarter was
our successful launch of CDMA digital service in Las Vegas, as well as our
rollout of residential long distance and paging reselling services. As we enter
the final quarter of our first year as an independent company, we continue to
aggressively increase revenues, capitalize on our competitive strengths and
leverage the infrastructure we have in place."
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"Despite two major hurricanes that affected three of our five regions,
our network performed extremely well, providing critical communications to our
customers as well as disaster support and recovery agencies. I'm proud of the
outstanding job our 360 field associates and disaster recovery team did
during these natural disasters," Foster added.
360 Communications reported net income of $22.9 million, or 20
cents per share, for the third quarter of 1996, compared with net income of $4.5
million, or 4 cents per share, for the third quarter of 1995.
360 added 100,199 net customers during the third quarter of
1996, closing the period with more than 1.85 million customers. Excluding 46,647
customers obtained through acquisitions in the first quarter of 1996, the
company's customer growth rate increased 34 percent year over year.
The company reported a market penetration rate of 8.84 percent at the
end of the third quarter of 1996, representing an annualized penetration gain of
1.92 percent for the period. 360 Communications' market penetration rate
is among the best in the industry.
Chicago-based 360 Communications provides wireless voice and data
services to more than 1.85 million customers in nearly 100 markets in Alabama,
Florida, Illinois, Indiana, Iowa, Nevada, New Mexico, North Carolina, Ohio,
Pennsylvania, South Carolina, Tennessee, Texas and Virginia. The company also
offers residential long distance service. In addition to the New York Stock
Exchange, 360 Communications' stock is listed on the Chicago and Pacific
stock exchanges under the symbol XO.
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To obtain copies of the company's Form 10-K, 10-Qs, or copies of quarterly
earnings and other recent news releases issued by the company, please call
toll-free 1.888.360.INFO (1.888.360.4636), 24 hours a day, seven days a week.
360 Communications' news releases are also available through PR Newswire
and can be accessed by calling (800) 578-7888, #111849. 360's internet
address is www.360.com.
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360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------------------- ---------------------------------
1996 1995 1996 1995
-------------- ------------- -------------- --------------
Operating Revenues
Cellular Service Revenues $ 271,819 $ 207,472 $ 766,133 $ 572,028
Equipment Sales 9,857 10,311 29,411 34,125
-------------- ------------- -------------- --------------
Total Operating Revenues 281,676 217,783 795,544 606,153
-------------- ------------- -------------- --------------
Operating Expenses
Cost of Service 24,148 17,488 68,492 50,489
Cost of Equipment Sales 25,046 27,324 71,010 77,933
Other Operations Expense 15,498 10,695 39,824 28,527
Sales, Marketing and Advertising Expenses 48,527 35,697 143,146 97,719
General, Administrative and Other Expenses 68,030 53,773 190,287 153,900
Depreciation and Amortization 36,833 29,380 104,987 83,666
-------------- ------------- -------------- --------------
Total Operating Expenses 218,082 174,357 617,746 492,234
-------------- ------------- -------------- --------------
Operating Income 63,594 43,426 177,798 113,919
Interest Expense (24,752) (32,376) (78,854) (95,081)
Minority Interests in Net Income
of Consolidated Entities (13,843) (9,303) (38,168) (26,218)
Equity in Net Income of
Unconsolidated Entities 16,339 12,003 40,359 23,566
Other Income (Expense), net 101 (1,236) 423 (1,188)
-------------- ------------- -------------- --------------
Income Before Income Taxes 41,439 12,514 101,558 14,998
Income Tax Expense 18,552 7,967 47,407 17,128
-------------- ------------- -------------- --------------
Net Income (Loss) $ 22,887 $ 4,547 $ 54,151 $ (2,130)
============== ============= ============== ==============
Net Income (Loss) per Share (in Dollars) $ 0.20 $ (0.01) <F1> $ 0.46 $ (0.02) <F1>
============== ============= ============== ==============
Weighted Average Shares
Outstanding, in thousands 117,086 116,844 <F1> 117,060 116,600 <F1>
============== ============= ============== ==============
<FN>
<F1>
(1) In 1995 Net Income (Loss) per Share has been calculated based upon the
number of Sprint Corporation weighted average shares outstanding for each
respective period, adjusted for a conversion ratio of 1 share of 360
Common Stock to 3 shares of Sprint Common Stock.
(2) Certain amounts have been reclassified to conform to the presentation used
for the Three Months Ended September 30, 1996.
</FN>
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360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
OPERATING DATA
For the Three Months Ended
and as of September 30,
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1996 1995
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EBITDA (in thousands) $ 100,427 $ 72,806
EBITDA Margin 36.95% 35.09%
Capital Expenditures (in thousands) $ 49,601 $ 91,295
Controlled POPs 20,938,734 19,670,534
Controlled Customers 1,850,528 1,348,496
Gross Customer Additions 204,437 180,846
Net Customer Additions 100,199 107,214
Average Customers 1,799,913 1,296,382
Churn 1.86% 1.89%
Penetration 8.84% 6.86%
Service Revenue per Average Customer per Month $ 50.34 $ 53.35
Cost to Acquire a New Customer <F1> $ 312 $ 291
For the Nine Months Ended
and as of September 30,
--------------------------------------------------
1996 1995
---------------- -----------------
EBITDA (in thousands) $ 282,785 $ 197,585
EBITDA Margin 36.91% 34.54%
Capital Expenditures (in thousands) $ 193,543 $ 270,027
Controlled POPs 20,938,734 19,670,534
Controlled Customers <F1> 1,850,528 1,348,496
Gross Customer Additions <F2> 582,227 495,423
Net Customer Additions <F2> 302,124 308,507
Average Customers 1,684,336 1,184,541
Churn 1.80% 1.79%
Penetration 8.84% 6.86%
Service Revenue per Average Customer per Month $ 50.54 $ 53.66
Cost to Acquire a New Customer <F3> $ 317 $ 286
<FN>
<F1>
(1) Controlled Customers include 46,647 customers added through acquisitions
which were completed in the first quarter of 1996.
<F2>
(2) The 1996 amounts exclude customer base acquired.
<F3>
(3) Cost to Acquire a New Customer includes Sales, Marketing and Advertising
Expenses and the gross margin on equipment sales.
</FN>
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360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
September 30, December 31,
ASSETS 1996 1995
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Current Assets
Cash and Cash Equivalents $ 9,869 $ 19,023
Accounts Receivable, less allowances
of $4,788 and $2,370, respectively 89,257 68,087
Other Receivables 30,977 29,799
Unbilled Revenue 28,389 23,481
Inventory 17,002 19,576
Other 6,267 6,604
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Total Current Assets 181,761 166,570
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Property, Plant and Equipment 1,364,267 1,151,157
Less: Accumulated Depreciation 395,237 300,703
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Property, Plant and Equipment, net 969,030 850,454
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Investments in Unconsolidated Entities 344,630 318,287
Intangibles, net 711,093 632,756
Other Assets 18,946 5,179
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Total Assets $ 2,225,460 $ 1,973,246
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LIABILITIES AND SHAREOWNERS' EQUITY
-----------------------------------
Current Liabilities
Trade Accounts and Other Payables $ 110,162 $ 111,770
Advance Billings 25,178 20,559
Accrued Taxes 33,453 19,690
Short-Term Debt 45,650 ------
Accrued Agent Commissions 6,905 15,417
Other 36,731 27,092
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Total Current Liabilities 258,079 194,528
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Long-Term Debt 1,362,720
Advances From and Notes to Affiliates 1,517,729
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Deferred Credits and Other Liabilities
Deferred Income Taxes 111,460 99,168
Postretirement and Other Benefit Obligations 5,931 12,859
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Total Deferred Credits and Other Liabilities 117,391 112,027
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Minority Interests in Consolidated Entities 179,115 146,894
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Shareowners' Equity 308,155 2,068
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Total Liabilities and Shareowners' Equity $ 2,225,460 $ 1,973,246
=============== ===============
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360 COMMUNICATIONS COMPANY AND SUBSIDIARIES
`
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
For the Nine Months
Ended September 30,
-------------------------------------
1996 1995
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Operating Activities
Net Income (Loss) $ 54,151 $ (2,130)
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 104,987 83,666
Deferred Income Taxes 19,119 11,131
Equity in Net Income of Unconsolidated
Entities, net of distributions (25,104) 2,462
Minority Interests in Net Income of
Consolidated Entities 38,168 26,218
Changes in Operating Assets and Liabilities
Receivables, net (16,009) (22,173)
Other Current Assets (1,410) 8,265
Trade Accounts and Other Payables 1,825 2,512
Accrued Expenses and Other
Current Liabilities 10,267 105
Noncurrent Assets and Liabilities, net (868) 2,484
Other, net 5,266 (1,596)
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Net Cash Provided by Operating Activities 190,392 110,944
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Investing Activities
Capital Expenditures (193,543) (270,027)
Acquisitions (109,613) -------
Investment in Unconsolidated Entities and Other (14,709) (3,642)
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Net Cash Used by Investing Activities (317,865) (273,669)
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Financing Activities
Net Borrowings under Bank Revolving Credit Facility 448,543 -------
Proceeds from Long-Term Debt 900,000 -------
Net Short-Term Borrowings 45,650 -------
Increase (Decrease) in Advances from Affiliates (1,400,000) 161,012
Contributions from Minority Investors 4,881 6,093
Distributions to Minority Investors (9,275) (6,341)
Equity Contributions 130,355 -------
Other (1,835) -------
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Net Cash Provided by Financing Activities 118,319 160,764
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Decrease in Cash and Cash Equivalents (9,154) (1,961)
Cash and Cash Equivalents at Beginning of Period 19,023 5,527
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Cash and Cash Equivalents at End of Period $ 9,869 $ 3,566
=============== ===============
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October 25, 1996
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: Filing Desk, Stop 1-4
Re: Current Report on Form 8-K of 360 Communications Company
Ladies and Gentlemen:
On behalf of 360 Communications Company (the "Company"), I am
transmitting herewith for filing with the Commission pursuant to Sections 13 or
15(d) of the Securities Exchange Act of 1934, as amended, a copy of the
Company's Current Report on Form 8-K, with attached exhibit, relating to events
reported as of October 15, 1996.
Very truly yours,