-----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, WsJz7MzQm0O4jolfkYFMvFnRGz7Hy9ZcIliqIkifErnbZxux0zuJXczz0DRj6nRm m1oBG9690/UGbDy6FimvCA== 0000891020-03-002310.txt : 20030911 0000891020-03-002310.hdr.sgml : 20030911 20030911172742 ACCESSION NUMBER: 0000891020-03-002310 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030911 ITEM INFORMATION: Other events FILED AS OF DATE: 20030911 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN WIRELESS CORP CENTRAL INDEX KEY: 0000930738 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 911638901 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-28160 FILM NUMBER: 03892485 BUSINESS ADDRESS: STREET 1: 3650 131 ST AVENUE SE STREET 2: SUITE 400 CITY: BELLEVUE STATE: WA ZIP: 98006 BUSINESS PHONE: 4255868700 MAIL ADDRESS: STREET 1: 3650 131ST AVE. S.E STREET 2: SUITE 400 CITY: BELLEVUE STATE: WA ZIP: 98006 8-K 1 v92916e8vk.htm FORM 8-K Western Wiereless Corporation
Table of Contents

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): September 11, 2003

WESTERN WIRELESS CORPORATION


(Exact name of registrant as specified in its charter)
         
Washington   000-28160   91-1638901

       
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (IRS Employer
Identification No.)
         
3650 131st Avenue S.E., Bellevue, Washington     98006  

       
(Address of principal executive offices)     (Zip Code)  

Registrant’s telephone number, including area code (425) 586-8700


(Former name or former address, if changes since last report)

 


Item 5. Other Events
SIGNATURE


Table of Contents

This Current Report is being filed in connection with the Company’s registration statements to be filed with the Securities and Exchange Commission. The registration statements have not yet become effective. The securities being registered under the registration statements may not be sold, nor may offers to buy be accepted, prior to the time the registration statements become effective. This Form 8-K shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Item 5. Other Events

     On February 14, 2003, Western Wireless Corporation (the “Company”) filed a Current Report on Form 8-K (the “February 14, 2003 8-K”) which included, as an exhibit, its press release dated February 13, 2003, announcing, among other things, its fourth quarter and full year 2002 financial results. This press release included the non-GAAP financial measure, “EBITDA.”

     On March 27, 2003, the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (the “2002 10-K”). Under Item 6, “Selected Financial Data,” it presented a table which included the non-GAAP financial measure, EBITDA, for each of the five fiscal years in the period ended December 31, 2002. It also referred to EBITDA in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

     On April 14, 2003, the Company filed a Current Report on Form 8-K (the “April 14, 2003 8-K”) which reported a reconciliation of the non-GAAP financial measure EBITDA previously disclosed in the February 14, 2003 8-K and the 2002 10-K to what the Company believed was its most directly comparable financial measure calculated in accordance with GAAP.

ADJUSTED EBITDA

     In each of the reports listed above, the Company reported the non-GAAP financial measure EBITDA, which it defined as income (loss) from continuing operations before provision

2


Table of Contents

for income taxes and cumulative change in accounting principle exclusive of: (i) depreciation and amortization; (ii) asset dispositions; (iii) stock-based compensation; (iv) total other expense, including interest; and (v) minority interests in net loss of consolidated subsidiaries. In such reports, the Company reconciled EBITDA to income (loss) from continuing operations before provision for income taxes and cumulative change in accounting principle.

     In subsequent reports, the Company has redefined EBITDA, which, as redefined, is now referred to as Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss) exclusive of: (i) depreciation, amortization and accretion; (ii) asset dispositions; (iii) stock-based compensation; (iv) interest and financing expense, net; (v) equity in net (income) loss of unconsolidated affiliates, net of tax and other, net; (vi) (gain) loss on sale of joint venture; (vii) minority interests in net loss of consolidated subsidiaries; (viii) provision for income taxes; (ix) discontinued operations; and (x) cumulative change in accounting principle. The Company believes that the GAAP financial measure most directly comparable to the non-GAAP financial measure Adjusted EBITDA is net income (loss). In order to present such non-GAAP financial measure and the reconciliation of such non-GAAP financial measure to its most directly comparable GAAP financial measure for the periods covered by the reports listed above consistently with the non-GAAP financial measure and the reconciliation of such non-GAAP financial measure to its most directly comparable GAAP financial measure reported in subsequent reports, the Company has set forth below, a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods covered by the reports listed above:

3


Table of Contents

Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA

(Dollars in Thousands)

                                                   
      Year ended December 31,
     
      2002   2001
     
 
      Domestic   International   Consolidated   Domestic   International   Consolidated
     
 
 
 
 
 
Net income (loss)
  $ (80,194 )   $ (105,487 )   $ (185,681 )   $ (3,526 )   $ (151,551 )   $ (155,077 )
 
Depreciation and amortization
    194,003       46,484       240,487       190,601       19,325       209,926  
 
Asset dispositions
    21,304               21,304                          
 
Stock-based compensation
    1,328       (5,450 )     (4,122 )     4,183       (1,876 )     2,307  
 
Interest and financing expense, net
    110,080       46,611       156,691       138,384       23,469       161,853  
 
Equity in net (income) loss of unconsolidated affiliates, net of tax and other, net
    (315 )     (4,717 )     (5,032 )     8,768       9,852       18,620  
 
Gain on sale of Latvian joint venture
                                               
 
Minority interests in net loss of consolidated subsidiaries
            (8,408 )     (8,408 )             (18,967 )     (18,967 )
 
Provision for income taxes
    120,687       2,583       123,270                          
 
Total discontinued operations
    721       (30,360 )     (29,639 )             5,933       5,933  
 
Cumulative change in accounting principle
                            6,600       (1,020 )     5,580  
 
   
     
     
     
     
     
 
Adjusted EBITDA
  $ 367,614     $ (58,744 )   $ 308,870     $ 345,010     $ (114,835 )   $ 230,175  
 
   
     
     
     
     
     
 

[Additional columns below]

[Continued from above table, first column(s) repeated]
                           
      Year ended December 31,
     
      2000
     
      Domestic   International   Consolidated
     
 
 
Net income (loss)
  $ 39,720     $ 25,686     $ 65,406  
 
Depreciation and amortization
    120,826       4,235       125,061  
 
Asset dispositions
                       
 
Stock-based compensation
    9,334       10,763       20,097  
 
Interest and financing expense, net
    141,182       11,047       152,229  
 
Equity in net (income) loss of unconsolidated affiliates, net of tax and other, net
    9,347       1,366       10,713  
 
Gain on sale of Latvian joint venture
            (57,412 )     (57,412 )
 
Minority interests in net loss of consolidated subsidiaries
            (2,058 )     (2,058 )
 
Provision for income taxes
                       
 
Total discontinued operations
                       
 
Cumulative change in accounting principle
                       
 
   
     
     
 
Adjusted EBITDA
  $ 320,409     $ (6,373 )   $ 314,036  
 
   
     
     
 

4


Table of Contents

                                           
      Year ended December 31,
     
      2002   2001   2000   1999   1998
     
 
 
 
 
      Consolidated   Consolidated   Consolidated   Consolidated   Consolidated
     
 
 
 
 
Net income (loss)
  $ (185,681 )   $ (155,077 )   $ 65,406     $ (148,773 )   $ (224,069 )
 
Depreciation and amortization
    240,487       209,926       125,061       102,013       74,402  
 
Asset dispositions
    21,304                                  
 
Stock-based compensation
    (4,122 )     2,307       20,097       79,223          
 
Interest and financing expense, net
    156,691       161,853       152,229       99,993       92,227  
 
Equity in net (income) loss of unconsolidated affiliates, net of tax and other, net
    (5,032 )     18,620       10,713       10,667       2,891  
 
Gain on sale of Latvian joint venture
                    (57,412 )                
 
Minority interests in net loss of consolidated subsidiaries
    (8,408 )     (18,967 )     (2,058 )     (1,610 )     (479 )
 
Provision for income taxes
    123,270                                  
 
Total discontinued operations
    (29,639 )     5,933               100,652       210,710  
 
Cumulative change in accounting principle
            5,580                          
 
   
     
     
     
     
 
Adjusted EBITDA
  $ 308,870     $ 230,175     $ 314,036     $ 242,165     $ 155,682  
 
   
     
     
     
     
 

5


Table of Contents

     EBITDA is a non-GAAP financial measure generally defined as net income (loss) before interest, taxes, depreciation and amortization. However, when the Company uses the non-GAAP financial measure EBITDA it further excludes the following items: (i) accretion, (ii) asset dispositions; (iii) stock-based compensation; (iv) equity in net (income) loss of unconsolidated affiliates, net of tax and other, net; (v) (gain) loss on sale of joint venture; (vi) minority interests in net loss of consolidated subsidiaries; (vii) discontinued operations; and (viii) cumulative change in accounting principle. Accordingly, the Company has revised the title “EBITDA” that it has used in the past to “Adjusted EBITDA.” Each of the items excluded from Adjusted EBITDA referenced above is presented in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

     Other companies in the wireless industry may define Adjusted EBITDA in a different manner or present other varying financial measures, and, accordingly, the Company’s presentation may not be comparable to other similarly titled measures of other companies. The Company’s calculation of Adjusted EBITDA is also not directly comparable to EBIT (earnings before interest and taxes) or EBITDA.

     The Company views Adjusted EBITDA as an operating performance measure and as such, believes that the GAAP financial measure most directly comparable to Adjusted EBITDA is net income (loss). The Company has presented Adjusted EBITDA because this financial measure, in combination with other financial measures, is an integral part of the Company’s internal reporting system utilized by management to assess and evaluate the performance of its business. Adjusted EBITDA is also considered a significant performance measure. It is used by management as a measurement of the Company’s success in obtaining, retaining and servicing customers by reflecting the Company’s ability to generate subscriber revenue while providing a high level of customer service in a cost effective manner. The components of Adjusted EBITDA include the key revenue and expense items for which the Company’s operating managers are responsible and upon which the Company evaluates their performance.

     Adjusted EBITDA is consistent with certain financial measures used in the Company’s Credit Facility and 9.250% Senior Notes due 2013. Such financial measures are key components of several negative covenants including, among others, the limitation on incurrence of indebtedness, the limitations on investments and acquisitions and the limitation on distributions and dividends.

     Adjusted EBITDA should not be construed as an alternative to net income (loss), as determined in accordance with GAAP, as an alternative to cash flows from operating activities, as determined in accordance with GAAP, or as a measure of liquidity. The Company believes Adjusted EBITDA is useful to investors as a means to evaluate the Company’s operating performance prior to financing costs, deferred tax charges, non-cash depreciation and amortization expense and certain other non-cash charges. Although Adjusted EBITDA may be defined differently by other companies in the wireless industry, the Company believes that Adjusted EBITDA provides some commonality of measurement in analyzing operating performance of companies in the wireless industry.

6


Table of Contents

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 hereunto duly authorized.

         
    WESTERN WIRELESS CORPORATION
    (Registrant)
         
Date: September 11, 2003   By:   /s/ Jeffery A. Christianson
       
        Jeffrey A. Christianson
        Senior Vice President and General
        Counsel

7 -----END PRIVACY-ENHANCED MESSAGE-----