-----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, Dr2nEaWDAmzlKhXl5Z1K+4mZwhn6pCI8raFF5t954n7INfaHPRb6xkTXELugDaoC ZKCvOhpnJLC6WbI8a7JUnw== 0000931763-02-000185.txt : 20020414 0000931763-02-000185.hdr.sgml : 20020414 ACCESSION NUMBER: 0000931763-02-000185 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020131 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20020131 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRGATE PCS INC /DE/ CENTRAL INDEX KEY: 0001086844 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 582422929 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27455 FILM NUMBER: 02523134 BUSINESS ADDRESS: STREET 1: 233 PEACHTREE ST NE STREET 2: SUITE 1700 CITY: ATLANTA STATE: GA ZIP: 30303 BUSINESS PHONE: 4045257272 MAIL ADDRESS: STREET 1: 233 PEACHTREE ST STREET 2: SUITE 1700 CITY: ATLANTA STATE: GA ZIP: 30303 8-K 1 d8k.txt FORM 8-K UNITED STATES 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): January 31, 2002 AIRGATE PCS, INC. (Exact name of Registrant as specified in its charter) Delaware 027455 58-2422929 (State or other jurisdiction (Commission File Number) IRS Employer Number) of incorporation) Harris Tower, 233 Peachtree Street N.E., Suite 1700 30303 Atlanta, Georgia (Address of principal executive offices) (Zip Code) (404) 525-7272 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits. Exhibit No. Description ----------- ----------- 99.1 Slide presentation dated January 31, 2002. Item 9. Regulation FD Disclosure On January 31, 2002, AirGate PCS, Inc. made a presentation to investors. AirGate PCS, Inc. hereby incorporates by reference herein the information set forth in its slide presentation dated January 31, 2002, a copy of which is attached hereto as Exhibit 99.1 2 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 hereunto duly authorized. AIRGATE PCS, INC. (Registrant) Date: January 31, 2002 By: /s/ Alan B. Catherall -------------------------- Name: Alan B. Catherall Title: Chief Financial Officer 3 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 99.1 Slide presentation dated January 31, 2002. 4 EX-99.1 3 dex991.txt SLIDE PRESENTATION DATED JANUARY 31, 2002 EXHIBIT 99.1 [AirGate PCS LOGO] Presentation to Investors January 2002 =============================================================================== 1 [AirGate PCS LOGO] Safe Harbor Provisions Certain statements contained in this presentation, such as statements concerning AirGate PCS', iPCS' or the combined company's anticipated performance, plans for growth and anticipated financial results and other factors that could affect future operations or performance and other non-historical facts, are forward looking statements made pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Since these forward looking statements are based on factors that involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward looking statements. Such factors include: the ability to successfully integrate the two businesses, the competitiveness and financial impact of Sprint PCS pricing plans, products and services; the ability of Sprint PCS to provide back office, customer care and other services; consumer purchasing patterns; potential fluctuations in quarterly results; an adequate supply of subscriber equipment; risks related to our ability to compete with larger, more established businesses; rapid technological and market change; risks related to future growth and expansion; the ability to successfully complete the build-out of the iPCS network, the potential need for additional capital, anticipated future losses; the significant level of indebtedness of the combined companies and volatility of AirGate PCS's stock price. For a detailed discussion of these and other cautionary statements and factors that could cause actual results to differ from those contained in this presentation, please refer to AirGate PCS's and iPCS' filings with the Securities and Exchange Commission ("SEC"), especially in the "investment considerations" section of AirGate PCS's Form 10-K for the fiscal year ended September 30, 2001, iPCS' Form 10-K for the fiscal year ended December 31, 2000, iPCS' Form 10-Q for the fiscal quarter ended September 30, 2001, and in subsequent filings with the SEC. In addition, EBITDA is a financial measure used in the financial community. It is not, however, a measure of financial performance under generally accepted accounting principles in the United States. Neither company will undertake to update or revise any forward- looking statement contained herein. ================================================================================ 2 [AirGate PCS LOGO] Investment Highlights . One of the largest Sprint PCS affiliates based on covered POPs . Attractive Markets . Strategic relationship with Sprint PCS . Proven management team with superior track record . Build-out near completion . Superior network technology and 3G transition path . "Best practices" from iPCS merger . Fully-funded business plan . EBITDA breakeven in calendar Q3 2002 ================================================================================ 3 [AirGate PCS Logo] AirGate Overview [Map of AirGate and Sprint PCS territories in Nebraska, Iowa, Wisconsin, Illinois, Michigan, Indiana, Ohio, Kentucky, Tennessee, North Carolina, South Carolina and Georgia] . One of the largest Sprint PCS affiliates 14.5 million total POPs 11.3 million covered POPs Over 453,000 subscribers . 30MHz of spectrum in most Midwestern markets Spring local exchange carrier presence in 30% of Southeastern territory Contiguous to Sprint PCS major markets Atlanta Charlotte Chicago Detroit Des Moines Indianapolis St. Louis ================================================================================ 4 [AIRGATE LOGO] AirGate with iPCS Airgate PCS, Inc. Current PCSA Stock (Public Company) $300M Sr Disc Notes (Operating Company) $153.5M Sr Credit Facility (Lehman) Unrestricted Subsidiary AGW Leasing, Inc. AirGate Network Services iPCS, Inc. $300M (Equipment Company) LLC (Softco) (Holding Company) Sr Disc Notes 100% iPCS Wireless, Inc. $140M (Operating Company) Sr Credit Facility 100% iPCS Equipment, Inc. (Equipment Company) Current Indenture Current Indenture (Existing Operations) (Existing Operations) ================================================================================ 5 [AirGate PCS LOGO] Attractive Markets . AirGate PCS has some of the strongest demographics in the Sprint PCS affiliate space Population Density - ------------------------------------------------------------------------------- AirGate 113 - ------------------------------------------------------------------------------- US Unwired 78 - ------------------------------------------------------------------------------- UbiquiTel 70 - ------------------------------------------------------------------------------- Alamosa 43 - ------------------------------------------------------------------------------- Median Household Income - ------------------------------------------------------------------------------- AirGate $29,382 - ------------------------------------------------------------------------------- US Unwired $28,029 - ------------------------------------------------------------------------------- UbiquiTel $26,242 - ------------------------------------------------------------------------------- Alamosa $25,674 - ------------------------------------------------------------------------------- Interstate Traffic Density - ------------------------------------------------------------------------------- AirGate 20,371 - ------------------------------------------------------------------------------- US Unwired 17,907 - ------------------------------------------------------------------------------- UbiquiTel 17,613 - ------------------------------------------------------------------------------- Alamosa 11,943 - ------------------------------------------------------------------------------- /1/ Source: Data per Paul Kagan's Wireless Telecom Atlas & Databook, 2001, as reported per individual BTA. =============================================================================== 6 [AIRGATE LOGO] Efficient Migration Path to 1XRTT . Minimal switch/base station modification Less than $25 million for initial deployment of the combined territory . Sprint PCS nationwide deployment of 1XRTT will be completed by June 30, 2002 . Will provide significant benefits, including: Increased voice and data capacity Faster data speeds Longer battery life . 1XRTT plus new location identification capability will provide exciting new applications 7 [AIRGATE PCS LOGO] AirGate Incremental Controls for Clear Pay . Clear Pay Deposit not required, $34.99 activation fee collected User friendly rates same as traditional base "Weak" to "no" credit customers can obtain service Limit usage to predefined spending limit / emphasis on payment No other national provider can offer this service . AirGate Additional Controls $25 set up fee Phone cost $100 and up, target low subsidy Encourage $49.99 rate plans Extended commissions chargeback period Welcome Call Accounting policy sets reserve for non-paying subscribers $125 Deposit reinstated in Q2 FY 2002 8 [AIRGATE LOGO] Operating Performance 9 [AIRGATE LOGO] Strong Operational Performance Net Adds / 100,000 POPs / Week - -------------------------------------------------------------------------------- AirGate 59 - -------------------------------------------------------------------------------- Alamosa 49 - -------------------------------------------------------------------------------- Sprint PCS 42 - -------------------------------------------------------------------------------- Trition 39 - -------------------------------------------------------------------------------- IPCS 34 - -------------------------------------------------------------------------------- US Unwired 32 - -------------------------------------------------------------------------------- Nextel Partners 12 - -------------------------------------------------------------------------------- Note: As of quarter ending December 31, 2001 ================================================================================ 10 [AirGate PCS LOGO] Strong Operational Performance Cost per Gross Add - -------------------------------------------------------------------------------- IPCS $311 - -------------------------------------------------------------------------------- Sprint PCS $320 - -------------------------------------------------------------------------------- Alamosa $324 - -------------------------------------------------------------------------------- US Unwired $340 - -------------------------------------------------------------------------------- AirGate $343 - -------------------------------------------------------------------------------- Triton $417 - -------------------------------------------------------------------------------- Telecorp $434 - -------------------------------------------------------------------------------- Nextel Partners $483 - -------------------------------------------------------------------------------- Note: As of quarter ending September 30, 2001 =============================================================================== 11 [AirGate PCS LOGO] iPCS Acquisition ================================================================================ 12 [AirGate PCS Logo] iPCS Transaction Summary . Transaction Value: $900 million enterprise value (enterprise value per POP of $121) (1) . Consideration: 12.4 million common shares 1.1 million options & warrants $97 million assumed net debt (2) . POPs Added: 7.4 million . Governance: CEO Thomas M. Dougherty CFO Alan B. Catherall Board Composition Tim Yager - CEO of iPCS Michael Chae - Blackstone Independent - TBD . Structure: Wholly-owned subsidiary (1) Based on PCSA close price of $59.47 as of 8/28/01. (2) Includes anticipated cash proceeds from the exercise of options and warrants. 13 [Logo of AirGate PCS] iPCS Strategic Rationale . Attractive territory . Acquisition at a discount . Build out substantially complete . Excellent demographics and growth . Improved spectrum position . Pro forma company is fully funded . Combined company EBITDA breakeven delayed by just one quarter . "Best Practices" from iPCS transaction ================================================================================ 14 [AirGate PCS LOGO] Broad Distribution Channels AirGate - -------------------------------------------------------------------------------- B2B 10% - -------------------------------------------------------------------------------- Sprint 15% - -------------------------------------------------------------------------------- National Third Party 41% - -------------------------------------------------------------------------------- Company Stores 35% - -------------------------------------------------------------------------------- iPCS - -------------------------------------------------------------------------------- B2B 3% - -------------------------------------------------------------------------------- Sprint 8% - -------------------------------------------------------------------------------- National Third Party 30% - -------------------------------------------------------------------------------- Company Stores 23% - -------------------------------------------------------------------------------- Local Third Party 36% - -------------------------------------------------------------------------------- Note: As of quarter ending December 31, 2001 =============================================================================== 15 [AirGate PCS logo] Financial Performance 16 [AirGate PCS LOGO] Another Strong Quarter As of 12/31/01 (data in millions, except subscribers) ----------------------------------------------------- - -------------------------------------------------------------------------------- AirGate IPCS Pro Forma - -------------------------------------------------------------------------------- Total POPs 7.1 7.4 14.6 - -------------------------------------------------------------------------------- Total Subscribers 289,844 163,514 453,358 - -------------------------------------------------------------------------------- Net Adds 54,820 32,439 87,259 - -------------------------------------------------------------------------------- Churn, net 30 days 3.1% 2.7% 3.0% - -------------------------------------------------------------------------------- ARPU $60 $57 $59 - -------------------------------------------------------------------------------- Total Revenue $67.7 $40.3 $108.0 - -------------------------------------------------------------------------------- Roaming Margin $3.4 $3.7 $7.1 - -------------------------------------------------------------------------------- Pre-Marketing EBITDA $13.4 $5.3 $18.7 - -------------------------------------------------------------------------------- EBITDA ($14.6) ($12.0) ($26.6) - -------------------------------------------------------------------------------- CapEx $6.3 $39.9 $46.2 - -------------------------------------------------------------------------------- (1) Excludes non-cash stock option compensation and one-time merger related costs. ================================================================================ 17 [AirGate PCS] Driving Growth and Profitability AirGate and iPCS Combined Performance $in millions - ------------------------------------------------------------------------------ Revenue Pre-Marketing EBITDA - ------------------------------------------------------------------------------ 3/31/00 $3.1 ($10.8) - ------------------------------------------------------------------------------ 6/30/00 $10.3 ($7.3) - ------------------------------------------------------------------------------ 9/30/00 $23.2 ($2.9) - ------------------------------------------------------------------------------ 12/31/00 $32.6 ($4.1) - ------------------------------------------------------------------------------ 3/31/01 $53.5 $4.6 - ------------------------------------------------------------------------------ 6/30/01 $75.3 $12.6 - ------------------------------------------------------------------------------ 9/30/01 $97.8 $16.5 - ------------------------------------------------------------------------------ 12/31/01 $108.0 $18.7 - ------------------------------------------------------------------------------ ================================================================================ 18 [AirGate Logo] Cumulative CapEx per Covered POP - ------------------------------------------------------------------------------- AirGate $43 - ------------------------------------------------------------------------------- AT&T Affiliates $62 - ------------------------------------------------------------------------------- Sprint PCS $79 - ------------------------------------------------------------------------------- Note: As of quarter ending September 30, 2001 ================================================================================ 19 [AirGate Logo] Quarters to EBITDA Positive - -------------------------------------------------------------------------------- AirGate 12 - -------------------------------------------------------------------------------- Triton 10 - -------------------------------------------------------------------------------- Sprint PCS 21 - -------------------------------------------------------------------------------- ================================================================================ 20 [AirGate PCS LOGO] 21 -----END PRIVACY-ENHANCED MESSAGE-----