-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EJVn2mUTsO5PDrYIjtadHtxBtzmjW4Apkgo/thErZuodGhQhgVaMhuY5A6ddD4Qb 7YeU4SFOVwB0Yza/2R2ZCg== 0000893220-02-000453.txt : 20020416 0000893220-02-000453.hdr.sgml : 20020416 ACCESSION NUMBER: 0000893220-02-000453 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020401 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: D&E COMMUNICATIONS INC CENTRAL INDEX KEY: 0001011737 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 232837108 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20709 FILM NUMBER: 02611094 BUSINESS ADDRESS: STREET 1: BROSSMAN BUSINESS COMPLEX STREET 2: 124 EAST MAIN ST PO BOX 458 CITY: EPHRATA STATE: PA ZIP: 17560 BUSINESS PHONE: 7177334101 MAIL ADDRESS: STREET 1: BROSSMAN BUSINESS COMPLEX STREET 2: 124 EAST MAIN STREET CITY: EPHRATA STATE: PA ZIP: 17560 8-K 1 w59677e8-k.txt FORM 8-K FOR D&E COMMUNICATIONS, INC. DATED 4-1-02 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 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): April 1, 2002 D&E COMMUNICATIONS, INC. (Exact Name of Registrant as Specified in Charter) Pennsylvania 000-20709 23-2837108 (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation) Identification No.) 124 East Main Street P.O. Box 458 Ephrata, PA 17522-0458 (Address of Principal Executive Offices) (Zip Code) (717) 733-4101 (Registrant's telephone number, including area code) No Change Since Last Report ---------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On April 1, 2002, D&E Communications, Inc. ("D&E") completed the sale of its 50% interest in D&E/Omnipoint Wireless Joint Venture, L.P., a wireless services joint venture doing business as PCS ONE, to VoiceStream Wireless, D&E's partner in the joint venture. The sale was made pursuant to a Partnership Interest Purchase Agreement, dated as of October 17, 2001, among D&E, D&E Wireless, Inc., a wholly owned subsidiary of D&E, VoiceStream PA II, LLC and VoiceStream PA I, LLC. The consideration received by D&E was determined through arm's-length negotiations, is subject to customary post-closing adjustments, and consisted of $75.0 million in cash, after adjustments for estimated working capital and long-term debt of approximately $42.0 million. This transaction was contemplated as part of D&E's plan to exit the wireless services business, D&E's investment in PCS ONE and the related contract services D&E provides to PCS ONE, which also have been discontinued subsequent to the disposition, constitute a separate segment of D&E's business. D&E reported the assets and liabilities and results of operations of the wireless services segment as discontinued operations in its Annual Report on Form 10-K for the year ended December 31, 2001. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Business Acquired. Not applicable. (b) Pro forma Financial Information. Unaudited Pro Forma Balance Sheet as of December 31, 2001 and the notes thereto. (c) Exhibits. 10.1 Partnership Interest Purchase Agreement among D&E Wireless, Inc., D&E Communications, Inc., VoiceStream PA II, LLC, and VoiceStream PA I, LLC dated as of October 17, 2001 (Incorporated herein by reference from Exhibit 10.13 to D&E's Annual Report on Form 10-K for the year ended December 31, 2001.) 99.1 D&E press release to the disposition of its interest in PCS ONE. 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. D&E COMMUNICATIONS, INC. ------------------------ (Registrant) By: /s/ Thomas E. Morell --------------------- Thomas E. Morell Vice President, Chief Financial Officer and Treasurer Date: April 15, 2002 Pro Forma Financial Information The following unaudited pro forma condensed balance sheet as of December 31, 2001 of D&E Communications, Inc. and subsidiaries has been prepared to illustrate the effect of D&E's disposition of its interest in D&E/Omnipoint Wireless Joint Venture, L.P., a joint venture doing business as PCS ONE, had such disposition occurred on December 31, 2001. In accordance with pro forma financial statement requirements, an unaudited pro forma condensed statement of operations should exclude the effects of discontinued operations, extraordinary items and cumulative effects of changes in accounting principles. Therefore, since D&E's statement of operations included in its Annual Report on Form 10-K for the year ended December 31, 2001 reflected the results of operations of the PCS ONE business as a discontinued operation pursuant to APB 30 as a result of the pending sale, a pro forma statement of operations for the year ended December 31, 2001 has not been presented herein. This unaudited pro forma balance sheet is presented for illustrative purposes only. It is not necessarily indicative of the financial position that would have occurred had the sale been completed on the date assumed above, nor is the information indicative of the future financial position. You should read the financial information in this section along with D&E's historical consolidated financial statements and accompanying notes. D & E Communications, Inc Unaudited Pro Forma Condensed Balance Sheet As of December 31, 2001 (in thousands)
D&E Wireless Operations D&E Disposal Pro Forma Historical Adjustments As Adjusted ---------- ------------ ----------- ASSETS Current Assets Cash and cash equivalents $ 615 $ 45,738 $ 46,353 Accounts receivable 10,105 -- 10,105 Accounts receivable - affiliated companies 5,938 (5,938) -- Inventories, lower of cost or market, at average cost 1,781 -- 1,781 Prepaid expenses and other 4,311 -- 4,311 --------- --------- --------- Total Current Assets 22,750 39,800 62,550 --------- --------- --------- Investments Investments and advances in affiliated companies 6,431 -- 6,431 Investments available-for-sale 4,425 -- 4,425 --------- --------- --------- 10,856 -- 10,856 --------- --------- --------- Property & Equipment, net 95,145 3,000 98,145 --------- --------- --------- Other Assets Cost in excess of net assets of business acquired 5,126 -- 5,126 Deferred income taxes 905 2,654 3,559 Other 8,096 -- 8,096 --------- --------- --------- 14,127 2,654 16,781 --------- --------- --------- Total Assets $ 142,878 $ 45,454 $ 188,332 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Long-term debt maturing within one year $ 52 $ -- 52 Notes payable 1,757 -- 1,757 Accounts payable and accrued liabilities 16,319 -- 16,319 Accrued taxes 352 -- 352 Accrued interest and dividends 333 -- 333 Advance billings, customer deposits and other 3,668 -- 3,668 --------- --------- --------- Total Current Liabilities 22,481 -- 22,481 --------- --------- --------- Long-Term Obligations 58,124 -- 58,124 --------- --------- --------- Other Liabilities Equity in net losses of discontinued operations in excess of investments and advances 10,388 (10,388) -- Other 6,564 6,564 --------- --------- --------- 16,952 (10,388) 6,564 --------- --------- --------- Preferred Stock of Utility Subsidiary 1,446 -- 1,446 --------- --------- --------- Commitments Shareholders/ Equity Common stock 1,219 -- 1,219 Additional paid-in capital 39,956 -- 39,956 Accumulated other comprehensive income (loss) (2,833) -- (2,833) Retained earnings 10,637 55,842 66,479 Treasury stock, at cost (5,104) -- (5,104) --------- --------- --------- 43,875 55,842 99,717 --------- --------- --------- Total Liabilities and Shareholders' Equity $ 142,878 $ 45,454 $ 188,332 ========= ========= =========
See accompanying Note to Unaudited Pro Forma Condensed Balance Sheet Note To Unaudited Pro Forma Condensed Balance Sheet (Dollar amounts are in thousands) D&E will receive approximately $75,000 in cash after working capital and long-term debt adjustments of approximately $42,000. Management estimates that approximately $33,400 of the cash received will be used to pay taxes with the remainder used to pay down debt or to help finance the acquisition of Conestoga Enterprises, Inc. The pro forma combined condensed balance sheet includes adjustments to eliminate D&E's wireless assets and liabilities to be sold, including the related equity in losses of PCS ONE in excess of investments and advances of $10,388; recognize $39,800 of estimated cash proceeds on the sale, net of estimated tax payments of $33,400 and selling costs of $1,800; recognize $3,000 for the estimated value of equipment to be received from PCS ONE; recognize the collection of receivables due from PCS ONE and recognize in retained earnings $55,842 of estimated gain on sale, net of estimated taxes of $30,746 (including deferred taxes of $2,654). EX-99.1 3 w59677ex99-1.txt PRESS RELEASE DATED APRIL 1, 2002 Exhibit 99.1 04-01-02 - Sale of Interest in PCS ONE to VoiceStream Completed EPHRATA, PA - D&E Communications, Inc. (NASDAQ: DECC) announced today the closing of the previously announced sale of its 50% interest in its PCS joint venture to VoiceStream Wireless Corporation. Pending final post-closing adjustments, D&E today received cash consideration of approximately $75.0 million, after adjustments for estimated working capital and long-term debt of approximately $42.0 million, and expects to recognize a gain on the sale of approximately $50.0 million, net of tax. D&E estimates that approximately $34.0 million of the cash received will be used to pay taxes and that the remaining $41.0 million of transaction proceeds will be used to pay down debt and to finance, in part, D&E's pending acquisition of Conestoga Enterprises, Inc. D&E Communications, Inc. is a provider of integrated communications services to residential and business customers in markets throughout south central Pennsylvania. D&E has developed a comprehensive package of voice and data communications services including local and long distance telephone service, high-speed data services and Internet access service. D&E also provides business customers with integrated voice and data network solutions. Comprehensive information about D&E Communications is available on the World Wide Web at http://www.decommunications.com. This press release contains forward-looking statements. These forward-looking statements are found in various places throughout this press release and include, without limitation, statements regarding the expected consequences of the sale of D&E's interest in the PCS joint venture, the anticipated use of proceeds of such sale and financial and other information. These statements are based upon the current beliefs and expectations of D&E's management concerning the development of our business and the consequences of such sale transaction, are not guarantees of future performance and involve a number of risks, uncertainties, and other important factors that could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, final determination of adjustments to the purchase price for D&E's interest in the PCS joint venture, the timely completion of the Conestoga merger; and other key factors that we have indicated could adversely affect our business and financial performance contained in our past and future filings and reports, including those filed with the United States Securities and Exchange Commission. D&E undertakes no obligation to revise or update its forward-looking statements whether as a result of new information, future events, or otherwise. D&E and Conestoga Enterprises filed an amended registration statement on Form S-4, including a preliminary joint proxy statement/prospectus, with the Securities and Exchange Commission on March 28, 2002. This registration statement has not yet become effective and may be changed. Amendments to the registration statement, including the definitive form of joint proxy statement/prospectus, will also be filed with the Commission. Investors and security holders may obtain a free copy of such documents at the Commission's web site at www.sec.gov. The documents filed with the Commission by D&E and Conestoga may also be obtained for free from D&E by directing a request to D&E, 124 East Main Street, Ephrata, Pennsylvania 17522, Attn: Investor Relations. Certain of these documents may also be accessed on D&E's web site at www.decommunications.com when they become available. THE REGISTRATION STATEMENT AND, WHEN THEY BECOME AVAILABLE, AMENDMENTS TO THE REGISTRATION STATEMENT, THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS SHOULD BE READ CAREFULLY, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. -----END PRIVACY-ENHANCED MESSAGE-----