Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report 19 119K
2: EX-4.3 Instrument Defining the Rights of Security Holders 31 85K
3: EX-4.4 Instrument Defining the Rights of Security Holders 22 77K
4: EX-4.5 Instrument Defining the Rights of Security Holders 5 18K
5: EX-10.60 Material Contract 31 135K
6: EX-10.61 Material Contract 31 102K
7: EX-10.62 Material Contract 8 39K
8: EX-27 Financial Data Schedule 2 9K
9: EX-99 Exhibit 99.1 2 11K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1998
---------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _ ____
COMMISSION FILE NUMBER: 0-27442
OMNIPOINT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 04-2969720
(State or other jurisdiction of (IRS employer
incorporation or organization) identification No.)
THREE BETHESDA METRO CENTER, SUITE 400 20814
BETHESDA, MD (Zip Code)
(Address of principal executive office)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (301) 951-2500
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS: ON WHICH REGISTERED:
-------------------- --------------------
COMMON STOCK, PAR VALUE NASDAQ NATIONAL MARKET
$0.01 PER SHARE
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No __
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 52,540,578 shares of common
---------------------------
stock were outstanding as of May 1,1998.
----------------------------------------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Note 1)
OMNIPOINT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
[Download Table]
March 31,
1998 December 31,
(unaudited) 1997
--------- ----
ASSETS
Current assets:
Cash and cash equivalents $ 49,323 $ 63,581
Short term investments 3,259 15,009
Escrow deposit 25,614 51,230
Accounts receivable, net of allowances
of $5,687 and $5,746 as of March 31,
1998 and December 31, 1997, respectively 28,690 20,079
Inventory 29,134 39,962
Prepaid expenses and other current
assets 18,223 8,554
---------- ----------
Total current assets 154,243 198,415
Fixed assets, net
Network infrastructure equipment-in-
service 489,336 281,191
Construction in progress 253,420 274,575
Other fixed assets 78,689 76,110
Accumulated depreciation (60,915) (46,886)
Fixed assets, net 760,530 584,990
FCC licensing costs, net of accumulated
amortization of $33,541 and $28,854 as
of March 31, 1998 and December 31, 1997,
respectively 937,623 938,533
Investment in joint ventures 26,652 23,180
Deferred financing costs and other
intangible assets, net of accumulated
amortization of $3,689 and $2,814 as
of March 31, 1998 and December 31,
1997 35,989 27,534
Other long-term assets 7,074 6,937
---------- ----------
Total assets $1,922,111 $1,779,589
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses 148,535 150,135
Accrued interest payable 54,555 57,791
FCC license obligations 107,070 79,527
Loans payable under financing agreement 5,000 --
Deferred revenue 3,672 3,059
Capital lease obligations 51 68
---------- ----------
Total current liabilities 318,883 290,580
Loans payable under financing agreements 776,373 513,766
Senior notes 20,135 19,797
11 5/8% Senior and Series A Notes due
2006 458,138 458,289
FCC license obligations 654,265 679,063
Commitments and contingencies (Note 6)
Stockholders' deficit:
Common stock, par value, $.01 per
share; authorized 75,000,000 shares,
52,515,865 shares and 52,270,879
shares issued and outstanding at
March 31, 1998, and December 31,
1997 respectively 525 523
Additional paid-in capital 334,831 334,231
Accumulated deficit (632,223) (507,438)
Unearned compensation (6,693) (7,136)
Notes receivable (2,123) (2,086)
---------- ----------
Total stockholders deficit (305,683) (181,906)
---------- ----------
Total liabilities and
stockholders deficit $1,922,111 $1,779,589
========== ==========
See notes to consolidated financial statements
-1-
OMNIPOINT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share data)
[Download Table]
Three Months Ended March 31,
-----------------------------
1998 1997
--------------- ------------
Revenues:
Service and handset revenues, net $ 33,328 $ 3,087
License fees and engineering services 740 4,500
--------------- ------------
Total revenues 34,068 7,587
Operating expenses:
Cost of service revenues and handset sales 53,196 13,204
Research and development 5,109 7,707
Sales, general, and administrative 45,638 14,686
Depreciation and amortization 19,879 10,419
--------------- ------------
Total operating expenses 123,822 46,016
Loss from operations (89,754) (38,429)
Other income (expense):
Losses on investment in joint ventures (2,023) -
Interest income 1,591 4,661
Interest expense (34,689) (18,595)
Other income (expense) 90 -
---------------- ------------
Net loss $(124,785) $(52,363)
================ ============
Net Loss per share basic and diluted $ (2.38) $ (1.02)
================ ============
Weighted average common shares outstanding--
basic and dilute 52,384 51,278
================ ============
See notes to consolidated financial statements
Continued
-2-
OMNIPOINT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
[Download Table]
Three Months Ended
March 31,
-----------------------------------
1998 1997
----------------- ------------
Cash flows used in operating activities:
Net loss $(124,785) $(52,363)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization and depreciation 19,879 10,419
Inventory writedown to replacement cost - 3,000
Compensation expense from stock grants 548 670
Accrued interest (3,236) 3,323
Interest expense with amortization
of discount, premium and issuance costs 3,202 1,915
Interest income associated with
restricted cash (541) (999)
Loss on investment in joint venture 2,023 -
Sales of trading securities 11,750 -
Changes in assets and liabilities:
(Increase) decrease in operating
assets:
Accounts receivable (8,611) (6,490)
Prepaid expenses and other assets (9,806) (1,847)
Inventory 10,827 762
Increase (decrease) in operating
liabilities:
Accounts payable and accrued expenses (1,600) (13,399)
Deferred revenue 612 189
----------------- ------------
Net cash used in operating activities (99,738) (54,820)
----------------- ------------
Cash flows used in investing activities:
Purchase of fixed assets (190,124) (78,349)
Down payments for FCC licenses - (28,851)
Refund of FCC deposit - 60,000
Capitalized interest on C and F Block
licenses (3,779) (9,964)
Purchase of investment securities (13,801)
Sales of investment securities - 16,516
Proceeds from held to maturity
investments and restricted cash 26,157 18,278
Investment in joint venture (5,495) -
----------------- ------------
Net cash used in investing activities (173,241) (36,171)
----------------- ------------
Cash flows from financing activities:
Proceeds from issuance of common stock 460 557
Proceeds from vendor financing
agreements 92,607 73,775
Payments of obligations under capital
leases (16) -
Proceeds from permanent credit facility 500,000 -
Payments on interim facility (350,000) -
Proceeds from interim facility 25,000 -
Payment of deferred financing costs (9,330)
----------------- ------------
Net cash provided by financing activities 258,721 74,332
----------------- ------------
Net decrease in cash and cash equivalents (14,258) (16,659)
Cash and cash equivalents at beginning of
period 63,581 215,029
----------------- ------------
Cash and cash equivalents at end of period 49,323 $198,370
================= ============
See notes to consolidated financial statements
-3-
OMNIPOINT CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(UNAUDITED)
(In thousands, except per share data)
[Enlarge/Download Table]
For The Three Months Ended March 31, 1998
Common Stock Accumulated Unearned Notes
------------
Shares Amount Paid-in Capital Deficit Compensation Receivable
------ ------ --------------- ------- ------------ ----------
Balance, December 31, 1997 52,270,879 $523 $334,231 $(507,438) $(7,136) $(2,086)
Exercise of stock options 244,986 2 458 - - -
Issuance of options in form of
advanced compensation - - 365 - (365) -
Amortization of unearned
compensation - - - - 585 -
Cancellation of unearned
compensation - - (223) - 223 -
Interest on employee notes (37)
receivable - - - - -
Net loss - - - (124,785) - -
------------------------------------- ----------------------------- ----------
Balance, March 31, 1998 52,515,865 $525 $(334,831) $(632,223) $(6,693) $(2,123)
========== ====== ======== ============================= ==========
Total
Stockholders'
Deficit
------------------
Balance, December 31, 1997 $(181,906)
Exercise of stock options 460
Issuance of options in form of
advanced compensation -
Amortization of unearned
compensation 585
Cancellation of unearned
compensation -
Interest on employee notes
receivable (37)
Net loss (124,785)
------------------
Balance, March 31, 1998 $ (305,683)
==================
See notes to consolidated financial statements
Continued
-4-
OMNIPOINT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL:
--------
The consolidated financial statements have been prepared by Omnipoint
Corporation ("Omnipoint" or the "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC") and, in
the opinion of management, include all adjustments necessary for a fair
presentation of the financial information for each period shown. Certain
information and footnote disclosures normally included in consolidated
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such SEC
rules and regulations. Management believes that the disclosures made are
adequate to make the information presented not misleading. The results for
interim periods are not necessarily indicative of the results for the full
year. These unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company's 1997 Annual Report on Form 10-K.
Certain prior year amounts have been reclassified to conform to the three
month presentation.
2. LOSS PER COMMON SHARE
---------------------
The Company computes basic and diluted earnings per share in accordance with
Financial Accounting Standards No. 128, Earnings per Share, (SFAS 128) which
the Company adopted as of December 31, 1997. The following table reconciles
the numerator and denominator of the basic and diluted earnings per share
computations shown on the Consolidated Statement of Operations. As the
Company is in a loss position, both basic and diluted earnings per share are
the same amount.
[Download Table]
FOR THE THREE MONTHS ENDED
MARCH 31,
1998 1997
------------- -------------
Numerator:
Loss before extraordinary items $(124,785) $(52,363)
Denominator:
Common shares outstanding 52,384 51,278
Basic and diluted EPS $ (2.38) $ (1.02)
Options and warrants to purchase 9,258,918 and 6,423,873 shares of common
stock outstanding as of March 31, 1998 and 1997, respectively, were excluded
from the calculation of diluted net loss per share as the effect of their
inclusion would have been anti-dilutive.
3. INVENTORY:
----------
Inventory consists of the following for March 31, 1998 (unaudited) and
December 31 1997:
[Download Table]
March 31, December 31,
1998 1997
----------- ------------
(in thousands)
Raw Materials 660 810
GSM Handsets 23,487 33,254
Accessories & SIM Cards 4,987 5,898
----------- ------------
$29,134 $39,962
=========== ============
-5-
4. FIXED ASSETS:
-------------
Fixed assets including equipment under capital leases consist of the
following at March 31, 1998 (unaudited) and December 31, 1997:
[Download Table]
March 31 December 31,
1998 1997
------------------------------
(In thousands)
Building and building improvements $ 18,060 $ 16,985
Machinery, office and computer equipment 60,019 58,635
Network infrastructure equipment 489,336 281,191
Vehicles 610 490
------------------------------
568,025 357,301
Less: accumulated depreciation (60,915) (46,886)
------------------------------
507,110 310,415
Construction in progress 253,420 274,575
$760,530 $584,990
=============================
Depreciation expense for the three months ended March 31, 1998 and for the
year ended December 31, 1997 was $14.6 million and $39.9 million,
respectively. Approximately $4.8 million and $18.0 million of capitalized
interest has been included in network infrastructure equipment at March 31,
1998 and December 31, 1997, respectively.
5. OMNIPOINT MIDWEST FINANCING FACILITY:
-------------------------------------
On January 30, 1998, the Company, through an indirectly-held, wholly-owned
subsidiary, Omnipoint Midwest Holdings LLC ("OMWH"), entered into a credit
facility agreement with Northern Telecom Inc. ("NorTel") to provide financing
to OMWH for up to $400.0 million (the "Midwest Facility"). The credit facility
will finance the buildout of networks in certain Midwest markets including
Detroit, Indianapolis and certain other designated markets including Atlantic
City. The Midwest Facility provides that up to $85.0 million is available to
OMWH for any purpose, including an inter-company loan to the Parent Company.
The Company at its sole option can repay the $85.0 million portion of the loan
in cash or the Company's Common Stocks under certain conditions.
Under the terms of the Midwest Facility, OMWH is subject to certain financial
and operational covenants, including restrictions on OMH's ability to pay
dividends, level of indebtedness, and certain other financial maintenance
requirements. The Midwest Facility is collateralized by substantially all the
assets of OMWH and its license and operating subsidiaries and certain other
designated markets, including a pledge of all capital stock of each such
license and operating subsidiaries, as well as all capital stock of OMWH owned
by OPCS Two LLC.
The principal amount of a portion of the Midwest Facility which is available
to finance equipment purchases from NorTel and certain eligible third party
expenses is payable in installments beginning in 2002, with a final payment
due on December 31, 2006. Interest on such amount is payable quarterly with
regard to base rate loans and at the end of an applicable interest period with
regard to LIBOR rate loans. The $85.0 million portion of the Midwest Facility
which has no required amortization, matures on March 31, 2008. Interest on
such portion is payable semi-annually (which interest may be accreted until
March 31, 2004). The Midwest Facility was provided in conjunction with the
Amendment to the Northern Telecom Supply Agreement, wherein OMWH, together
with other affiliates of the Company, agreed to purchase up to $210.0 million
of equipment and services from Northern Telecom over a four-year period and to
purchase GSM PCS network equipment exclusively from Northern Telecom in the
Midwest markets.
Continued
-6-
OMNIPOINT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
6. $750 MILLION PERMANENT CREDIT FACILITY:
On February 17, 1998, Omnipoint Communications Inc. ("OCI") refinanced the
$516 million Interim Credit Facility with a $750.0 million credit facility
with DLJ and certain other parties (the "Permanent Credit Facility")
pursuant to (a) a $595 million credit facility agreement and (b) a $155
million note purchase agreement (the "Agreements"). The $595 million
credit facility agreement may be increased under certain circumstances. On
February 17, 1998, OCI borrowed $450.0 million (of which $295 million was
funded under the credit facility agreement and the entire $155 million was
funded under the note purchase agreement). A portion of the proceeds,
approximately $351.6 million, was used to fully repay outstanding borrowings
including accrued interest on the Interim Credit Facility. An additional
$50.0 million was borrowed under the facility in March 1998. Under the terms
of the Agreements, OCI and the Company are subject to certain financial and
operational covenants, including restrictions on the Company's ability to
pay dividends, level of indebtedness, and certain other financial
maintenance requirements. The Agreements are collateralized by substantially
all of the assets of OCI and its license subsidiary, including a pledge of
all capital stock and such license subsidiary, as well as 95.6% of the
capital stock of OCI. The obligations of OCI under the Agreements are
supported by guarantees by Omnipoint Holdings, Inc., Omnipoint Investments
Two, Inc. and Omnipoint PCS, Inc., each a directly held, wholly-owned
subsidiary of the Company, and secured by substantially all of their assets.
The principal amount of the Agreements are payable in installments beginning
June 30, 1998, with a final payment due on February 17, 2006. Interest on
such amount is payable quarterly in arrears or at the end of an applicable
interest period as provided in the Agreements.
7. COMMITMENTS AND CONTINGENCIES:
------------------------------
The Company, through its subsidiary Omnipoint Communication Services LLC is
in various stages of negotiation for infrastructure equipment, handsets,
accessories and services from various suppliers. These new contracts could
require minimum purchase commitments from the Company. Management believes
that the Company will fulfill these commitments in the normal course of
business.
8. SUBSEQUENT EVENTS:
------------------
C BLOCK RE-STRUCTURING
The FCC issued a reconsideration order which went into effect on April 8,
1998, allowing companies holding C Block Personal Communications Services
licenses several options to restructure their license holdings and
associated obligations. Two options the Company is planning to use are
amnesty and disaggregation. Under the amnesty option, a licensee can return
a license and either a) rebid on it in the re-auction, foregoing the
original 10 percent deposit; or b) forego the right to rebid on the license
in exchange for receiving a 70 percent credit of the original 10 percent
down payment. The 70 percent credit can then be applied to licenses retained
by the Company. Under the disaggregation option, a licensee can retain 15
MHz of its bandwidth and return 15 MHz (on which it cannot rebid in the re-
auction), in return for a 50 percent reduction of the outstanding debt on
those licenses. Both of these options preclude the Company from owning the
affected licenses for two years and are not expected to affect any plans for
markets in service or under construction. The election date for all C Block
licensees is June 8, 1998. The FCC has currently scheduled the re-auction of
all returned C Block licenses to begin in February 1999. The Company's
ability to make the above elections may be affected by any further
reconsideration of the order by the FCC, litigation regarding the order, or
other government actions. Accordingly, the Company is currently evaluating
its options and therefore can not determine the impact of its elections on
its financial statements.
-7-
PREFERRED STOCK
On May 6, 1998, the Company completed the private placement of 6,500,000
Depositary Shares, each representing 1/20 of a share of 7% Cumulative
Convertible Preferred Stock (the "Offering"). Each Depositary Share has a
liquidation preference of $50, equivalent to $1,000 per share of Preferred
Stock. Net proceeds to the Company totaled approximately $251.9 million net
of offering costs and proceeds placed into a deposit account.
Simultaneously with the closing of the Offering, the purchasers of the
Depositary Shares deposited approximately $62.8 million into a deposit
account. The holder of each Depositary share is entitled to a quarterly
payment from the deposit account in an amount equal to $0.875 per Depositary
share. The quarterly payments (paid on February 1, May 1, August 1, and
November 1 of each year) will commence August 1, 1998 and continue until May
1, 2001. The Company, at its option, may instruct the Deposit Agent to
disburse the quarterly payment in the form of cash or shares of the Company's
Common Stock. The number of shares of Common Stock to be paid is calculated
by dividing the quarterly payment amount by 95% of the market value of the
Common Stock as of the date notice is given by the Company to the Deposit
Agent. Additionally, the Company, at its option, may elect to defer delivery
of the quarterly payment until the next quarterly payment date or any
subsequent quarterly payment date. However, the payment cannot be delayed
beyond May 1, 2001, the Deposit Expiration Date. As of the Deposit Expiration
Date, all remaining funds in the Deposit Account will be delivered to holders
of the Depository shares in the form of Common Stock or cash.
Holders of the Depositary shares are entitled to receive cumulative annual
dividends of 7% of the Liquidation Preference per Depositary Share. The
dividends are payable quarterly in arrears, when and if declared by the Board
of Directors, commencing August 1, 2001. Cumulative annual dividends begin to
accrue on the Depositary Shares beginning on May 2, 2001. If the Company
elects early termination of the Deposit Account, dividends will begin to
accrue immediately preceding the date of the early termination.
Each Depositary Share may be converted at any time at the option of the holder
into 1.6069 shares of Common Stock. The Depositary shares may not be redeemed
prior to May 1, 2001. On or after May 1, 2001 the Depositary Shares may be
redeemed, in whole or in part, at the option of the Company, in cash or Common
Stock or a combination thereof, plus all accrued and unpaid dividends to the
redemption date. The redemption price is $52 in 2001, declining to $50 in
2005 and thereafter.
9. RECENT ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income".
SFAS 130 requires the reporting of comprehensive income (loss) in addition to
net income (loss) from operations. Comprehensive income is a more inclusive
reporting methodology that includes disclosure of certain financial information
that historically has not been recognized in the calculation of net loss. The
adoption of SFAS 130 had no impact on the Company's net loss or stockholders'
deficit. As of March 31, 1998, there were no differences between the Company's
net loss, as reported, and comprehensive loss.
In March 1998, Statement of Position 98-1, "Accounting for the Cost of
Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"), was
issued which provides guidance on applying generally accepted accounting
principles in addressing whether and under what conditions the costs of
internal-use software should be capitalized. SOP 98-1 is effective for all
transactions entered into in fiscal years beginning after December 15, 1998,
however earlier adoption is encouraged. The Company adopted the guidelines of
SOP 98-1 as of January 1, 1998, and the impact of such adoption was not material
to results of operations or cash flows for the quarter ended March 31, 1998.
Continued
-8-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Management's Discussion and Analysis of Financial Condition and Results of
Operations contain forward-looking statements, which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in forward-looking statements. Factors that might cause such a
difference include, but are not limited to, the "Risk Factors" set forth in the
Company's Registration Statement on Form S-1 (File No. 333-03739).
OVERVIEW
Omnipoint reported a 1998 first quarter loss of $124.8 million or $2.38 per
share, an increase of 138.2%, or approximately $72.4 million, compared to the
same quarter in 1997. The 1997 first quarter loss was $52.4 million, or $1.02
per share.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31,
1997
Revenues for the three months ended March 31, 1998 were $34.1 million,
compared to $7.6 million in the the three months ended March 31, 1997. Service
revenues and handset sales increased by $30.2 million because of the increased
customer base. The larger customer base resulted from commercial operations in
the New York metro area, Philadelphia, and several other Pennsylvania markets.
The New York metro area has been operating for more than one year, while the
Philadelphia and other Pennsylvania markets began offering commercial service in
September 1997. Revenues for the first quarter of 1997 were generated from the
New York metro area exclusively. Additionally, the Company did not heavily
advertise in the New York metro market until February 1997. The Company's
Equipment Subsidiary had revenues of $0.7 million related to engineering
services in the first quarter of 1998, compared to $4.5 million from license
fees in the first quarter of 1997.
Cost of service revenues and handset sales increased by 303.0%, or
approximately $40.0 million to $53.2 million for the three months ended March
31, 1998, compared to $13.2 million for the three months ended March 31, 1997.
Key drivers for the increase are increased numbers of cell sites in operation
and under construction, expanded minutes of use, and higher subscriber additions
in the first quarter of 1998 compared to the first quarter of 1997. The
increase in these indicators result from the Company offering commercial service
in several markets in 1998, which were not operational in 1997. The Boston and
Miami markets were under construction in the first quarter of 1998, with no
activity in the first quarter of 1997. Additionally, the Company recognized
significant expenses associated with expanding and supplying its distribution
channels with handset inventory in the first quarter of 1998.
Research and development expenses decreased by 33.8%, or approximately $2.6
million, to $5.1 million for the three months ended March 31, 1998, compared to
$7.7 million for the three months ended March 31, 1997. The Companys technology
subsidiary is nearing completion of its work on the PCS Fixed Access System,
resulting in the expense reduction. The decrease was primarily due to a
decrease of $1.1 million in R&D components, and $0.4 million in equipment
purchases.
Sales, general and administrative expenses increased by 210.2%, or
approximately $30.9 million, to $45.6 million for the three months ended March
31, 1998, compared to $14.7 million for the three months ended March 31, 1997.
Of this increase, $7.4 million was due to payroll and payroll related expenses
associated with increases in headcount resulting from expansion of the Company's
operations. Activity in the first quarter of 1998 includes launching the Boston
and Miami markets, building of the midwest markets and expanding of its network
in New Jersey, Connecticut, and Pennsylvania. The remaining increase consists of
$9.6 million in advertising and promotion, $2.9 million in bad debt and other
expenses, $2.8 million in billing and other third party acquisition costs, and
$4.4 million in consulting and professional fees. The Company expects that such
expenses will continue to increase significantly during the remainder of 1998 as
the Company continues to expand its operations.
Depreciation and amortization increased by 91.3%, or approximately $9.5
million to $19.9 million for the three months ended March 31, 1998, compared to
$10.4 million for the three months ended March 31, 1997. The increase is due to
commencement of depreciation on the network infrastructure equipment and
amortization of FCC licenses placed into commercial service to date.
-9-
Interest income decreased approximately $3.1 million, to $1.6 million for the
three months ended March 31, 1998 compared to $4.7 million for the three months
ended March 31, 1997. The decrease was due to lower cash and equivalents and
short-term investment balances, which result from the Company's continued
expansion and equipment purchases for new and existing markets.
Interest expense increased by 86.6%, or approximately $16.1 million, to
$34.7 million for the three months ended March 31, 1998 compared to $18.6
million for the three months ended March 31, 1997. The increase was due to $8.2
million of interest expense for the loans payable under financing agreements,
and $7.9 million for the FCC license obligations. The Company capitalized
interest of $8.6 million during the first quarter of 1998.
Net loss increased by 137.4%, or approximately $72.4 million to $124.8 million
for the three months ended March 31, 1998 compared to $52.4 million for the
three months ended March 31, 1997. This increase was primarily due to a general
increase in operating expenses, as well as an increase of $20.7 million in net
other expenses associated with an increasing customer base and expansion of
commercial operations in existing and new markets.
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended March 31, 1998, the Company has financed its
operations and met its capital requirements primarily through its loans payable
under financing agreements. These financing activities provided net cash of
$258.7 million for the three months ended March 31, 1998 compared to $74.3
million for the three months ended March 31, 1997. Operating activities used
net cash of $99.7 million for the three months ended March 31, 1998, compared
to $54.8 million for the three months ended March 31, 1997. The increase
resulted from the Company's additional activity relating to operating the New
York MTA network, several Pennsylvania markets, preparations for the March 1998
launch of the Boston and Miami markets and buildout of the Company's core PCS
networks; and interest expense associated with the Company's related
obligations. Investing activities used net cash of $173.2 million for the three
months ended March 31, 1998, compared to $36.2 million for the three months
ended March 31, 1997. The increase in investing activities consists of $97.3
million for purchases of PCS network infrastructure related items and lab
equipment used in engineering and manufacturing, and $5.5 million for investment
in joint ventures; offset by cash provided of $16.9 million net from short and
long term investments, and $31.1 million deposits on FCC licenses net of
payments.
As of March 31, 1998, the Company had negative working capital of
approximately $164.6 million. The Company has available borrowing capacity from
its existing credit facilities and proceeds from the May Preferred Stock
offering totaling approximately $1,093.1 million, as of March 31 1998.
Approximately $107.1 million associated with the FCC obligations is now
classified as short term liabilities. The FCC issued a reconsideration order
which went into effect on April 8, 1998, allowing companies holding C Block
Personal Communications Services licenses several options to restructure their
license holdings and associated obligations. This order requires the Company to
begin making its regularly scheduled C & F Block payments in July 1998. As of
March 31, 1998, the Company had $43.4 million in accrued PCS interest payments.
These interest payments will be payable to the FCC in quarterly payments over
the next eight quarters. The amount of accrued interest payable to the FCC will
ultimately depend on the Company's final decisions on disaggregation and amnesty
of its C Block licenses. Also, credits associated with the disaggregation and
amnesty options will be used to offset a portion of the accrued interest.
Accordingly, the Company is currently evaluating its options and therefore can
not determine the impact of its elections on its financial statements. On
February 15, 1998, the Company used $26.2 million of proceeds from its
deposit account to pay interest on the 11 5/8% Senior and Series A Notes due
2006.
On August 4, 1997, Omnipoint MB Holdings, Inc. ("OMB"), an indirectly-held,
wholly-owned subsidiary of the Company, entered into a credit facility agreement
with Ericsson Inc. to provide financing to the Company for up to $352.5 million
for the purpose of financing the buildout of networks in the Boston and Miami
markets, (the "Ericsson MB Facility"). The Ericsson MB Facility finances
purchases and installations of telecommunications equipment, engineering
services, certain related construction costs, third-party equipment and other
expenses and up to $100.0 million for the unrestricted use of OMB, including
making a loan to the Company. The Ericsson MB Facility provides the immediate
availability of $202.5 million, of which $100.0 million was funded to OMB at
closing. The Company at its sole option can repay or prepay in whole or in part
interest or principal under the $100 million portion of the loan in cash or with
the Company's Common Stock under certain conditions. The remaining $150.0
million is dependent on a loan guarantee from a governmental agency. If the
loan guarantee is completed before June 30, 1998, the Company will
-10-
grant Ericsson a five-year exclusive right to supply network equipment for the
Boston and Miami markets. As of March 31, 1998, the Company had $206.1 million
outstanding under the Ericsson MB Facility.
Under the terms of the Ericsson MB Facility, OMB is subject to certain
financial and operational covenants including restrictions on OMB's ability to
pay dividends, restrictions on indebtedness and certain financial maintenance
requirements. Additionally, the Ericsson MB Facility provides that, among other
events, the failure of OMB to pay when due amounts owing to the FCC shall
constitute an event of default. The Ericsson MB Facility is collateralized by
substantially all of the assets of OMB and each of the license and operating
subsidiaries for the Boston and Miami markets, including a pledge of all capital
stock of each such license and operating subsidiaries as well as capital stock
of OMB.
The principal amount of portions of the Ericsson MB Facility financing
equipment purchases from Ericsson, and certain eligible third party provided
costs, is repayable in installments beginning 2001, with a final payment due on
August 4, 2006. Interest on such portion of the loan is payable quarterly (of
which portions of the loan proceeds are available to finance such interest
payments). The $100.0 million portion funded at closing has no required
principal amortization, and matures on August 4, 2007. Interest on such portion
is payable semi-annually (of which interest may be accreted until August 4,
2003).
On July 25, 1997, OPCS Philadelphia Holdings, LLC ("OPCS"), an indirectly-
held, wholly-owned subsidiary of the Company, entered into a credit facility
agreement with Ericsson to provide financing to OPCS for up to $120.0 million
for the purpose of financing the buildout of networks in the Philadelphia and
Dover markets (the "Ericsson Philadelphia Facility"). As of March 31, 1998, the
Company had approximately $60.8 million outstanding under the Ericsson
Philadelphia Facility.
Under the terms of the Ericsson Philadelphia Facility, OPCS is subject to
certain financial and operational covenants including restrictions on OPCS's
ability to pay dividends, restrictions on indebtedness and certain other
financial maintenance requirements. Additionally, the Ericsson Philadelphia
Facility provides that, among other events, the failure of OPCS to pay when due
amounts owing to the FCC shall constitute an event of default. The Ericsson
Philadelphia Facility is collateralized by substantially all of the assets of
OPCS and each of the license and operating subsidiaries for the Philadelphia and
Dover markets, including a pledge of all capital stock of each such license and
operating subsidiary as well as capital stock of OPCS.
The principal amount of the Ericsson Philadelphia Facility is payable in
twenty quarterly installments beginning in the year 2001, with a final payment
due on December 31, 2005. Interest on such amount is payable quarterly in
arrears with regard to base rate loans and at the end of an applicable interest
period with regard to LIBOR loans (of which a portion of the loan proceeds are
available to finance such interest payments).
On February 17, 1998, Omnipoint Communications Inc. ("OCI") refinanced the
Interim Credit Facility with a $750.0 million credit commitment with DLJ and
certain other parties (the "Permanent Credit Facility") pursuant to (a) a $595
million credit facility agreement and (b) a $155 million note purchase agreement
(the "Agreements"). The $595 million credit facility agreement may be increased
under certain circumstances. On February 17, 1998, OCI borrowed $450.0 million
(of which $295 million was funded under the credit facility agreement and the
entire $155 million was funded under the note purchase agreement), a portion of
the proceeds, approximately $351.6 million was used to fully repay outstanding
borrowings including accrued interest on the Interim Credit Facility. The
Company borrowed an additional $50.0 million in March 1998. Under the terms of
the Agreements, OCI and the Company are subject to certain financial and
operational covenants, including restrictions on the Company's ability to pay
dividends, level of indebtedness, and certain other financial maintenance
requirements. The Agreements are collateralized by substantially all of the
assets of OCI and its license subsidiary, including a pledge of all capital
stock and such license subsidiary, as well as 95.6% of the capital stock of OCI.
The obligations of OCI under the Agreements are supported by guarantees by
Omnipoint Holdings, Inc., Omnipoint Investments Two, Inc. and Omnipoint PCS,
Inc., each a directly held, wholly-owned subsidiary of the Company, and secured
by substantially all of their assets. The principal amount of the Agreements are
payable in installments beginning June 30, 1998, with a final payment due on
February 17, 2006. Interest on such amount is payable quarterly in arrears or at
the end of an applicable interest period as provided in the Agreements. As of
March 31, 1998, the Company had approximately $500.0 million outstanding under
the Permanent Credit Facility.
-11-
On January 30, 1998, Omnipoint Midwest Holdings, LLC ("OMWH"), an
indirectly-held, wholly-owned subsidiary of the Company, entered into a credit
facility agreement with Northern Telecom, Inc. to provide financing to the
Company for up to $400.0 million for the purpose of financing the buildout of
networks in certain midwest markets, including the Detroit and Indianapolis
markets as well as certain other designated markets including Atlantic City (the
"Midwest Facility") The Midwest Facility provides that up to $85.0 million is
available for any purpose, including a loan to the Company. As of March 31,
1998, the Company had approximately $14.4 million outstanding under the Midwest
Facility.
Under the terms of the Midwest Facility, OMWH is subject to certain
financial and operational covenants, including restrictions on OMWH's ability to
pay dividends, level of indebtedness, and certain other financial maintenance
requirements. The Midwest Facility is collateralized by substantially all the
assets of the OMWH and the license and operating subsidiaries for the Midwest
and certain other designated markets, including a pledge of all capital stock of
each such license and operating subsidiaries, as well as all the capital stock
of the Companys subsidiary, OMWH Holdings, LLC.
A portion of the Midwest Facility is available to finance equipment
purchases from Northern Telecom and certain eligible third party expenses and is
payable in installments beginning in 2002, with a final payment due on December
31, 2006. Interest on such amount is payable quarterly. The $85.0 million
portion of the Midwest Facility has no required amortization, and matures on
March 31, 2008. Interest on such portion is payable semi-annually (which
interest may be accreted until March 31, 2004). The Company at its sole option
can repay or prepay in whole or in part interest or principal under the $85.0
million portion of the loan in cash or the Company's Common Stock under certain
conditions. The Midwest Facility was provided in conjunction with the Amendment
to the Northern Telecom Supply Agreement, wherein the Company and its affiliates
agreed to purchase at least $210.0 million of equipment and services from
Northern Telecom over a four-year period and to purchase GSM PCS network
exclusively from Northern Telecom in the Midwest markets.
On May 6, 1998, the Company completed the private placement of 6,500,000
Depositary Shares, each representing 1/20 of a share of 7% Cumulative
convertible Preferred Stock. Each Depositary Share has a Liquidation Preference
of $50, equivalent to $1,000 per share of Preferred Stock. Net proceeds to the
Company totaled approximately $251.9 million net of offering costs and proceeds
placed into the Deposit Account.
The Company believes that access to capital and financial flexibility are
necessary to successfully implement its strategy. The Company believes the
Permanent Facility, the Ericsson MB Facility, the Ericsson Philadelphia
Facility, the Midwest Facility and the 1998 offering of Preferred Stock, will be
sufficient to fund operating losses, capital expenditures and working capital
necessary for the buildout of the Company's PCS networks for the next 12 months.
To the extent that the buildout of these networks is faster than expected, the
costs are greater than anticipated or the Company takes advantage of other
opportunities, including those that may arise through future FCC auctions, the
Company may require additional funding to implement its business strategy.
The Company's future capital requirements will depend upon many factors,
including the successful development of new markets, the extent and timing of
acceptance of the Company's services in the market, the progress of the
Company's research and development efforts, expansion of the Company's marketing
and sales efforts, the Company's results of operations and the status of
competitive products. The Company believes that cash and cash equivalents on
hand, anticipated revenues, loans payable under financing agreements and
additional strategic partnerships will be adequate to fund its operations and
its network buildout for the next 12 months. There can be no assurance, however,
that the Company will not require additional financing prior to such date to
fund its operations and network buildout. The Company believes that it will
require substantial amounts of additional capital over the next several years
and anticipates that this capital will be derived from a mix of public offerings
and private placements of debt or equity securities or both.
-12-
Part II Other Information
ITEM 5: OTHER INFORMATION
PREFERRED STOCK
On May 6, 1998, the Company completed the private placement of 6,500,000
Depositary Shares, each representing 1/20 of a share of 7% Cumulative
Convertible Preferred Stock (the "Offering"). Each Depositary Share has a
Liquidation Preference of $50, equivalent to $1,000 per share of Preferred
Stock. Net proceeds to the Company totaled approximately $251.9 million net
of offering costs and proceeds placed into a deposit account.
Simultaneously with the closing of the Offering, the purchasers of the
Depositary Shares deposited approximately $62.8 million into a deposit
account. The holder of each Depositary share is entitled to a quarterly
payment from the deposit account in an amount equal to $0.875 per Depositary
share. The quarterly payments (paid on February 1, May 1, August 1, and
November 1 of each year) will commence August 1, 1998 and continue until May
1, 2001. The Company, at its option, may instruct the Deposit Agent to
disburse the quarterly payment in the form of cash or shares of the Company's
Common Stock. The number of shares of Common Stock to be paid is calculated
by dividing the quarterly payment amount by 95% of the market value of the
Common Stock as of the date notice is given by the Company to the Deposit
Agent. Additionally, the Company, at its option, may elect to defer delivery
of the quarterly payment until the next quarterly payment date or any
subsequent quarterly payment date. However, the payment cannot be delayed
beyond May 1, 2001, the Deposit Expiration Date. As of the Deposit Expiration
Date, all remaining funds in the Deposit Account will be delivered to holders
of the Depository shares in the form of Common Stock or cash.
Holders of the Depositary shares are entitled to receive cumulative annual
dividends of 7% of the Liquidation Preference per Depositary Share. The
dividends are payable quarterly in arrears, when and if declared by the Board
of Directors, commencing August 1, 2001. Cumulative annual dividends begin to
accrue on the Depositary Shares beginning on May 2, 2001. If the Company
elects early termination of the Deposit Account, dividends will begin to
accrue immediately preceding the date of the early termination.
Each Depositary Share may be converted at any time at the option of the holder
into 1.6069 shares of Common Stock. The Depositary shares may not be redeemed
prior to May 1, 2001. On or after May 1, 2001 the Depositary Shares may be
redeemed, in whole or in part, at the option of the Company, in cash or Common
Stock or a combination thereof, plus all accrued and unpaid dividends to the
redemption date. The redemption price is $52 in 2001, declining to $50 in
2005 and thereafter.
ITEM 6: EXHIBITS AND REPORTS ON FORM 10-Q
(a) Exhibits
Exhibit Number Description
-------------- -----------
3.1* Amended and Restated Certificate of Incorporation of the
Registrant.
3.2@@@ Amended and Restated Bylaws of the Registrant.
4.2 See Exhibit 3.1.
4.3 Certificate of Designation establishing the Voting
Powers, Designations, Preferences, Limitations,
Restrictions and Relative Rights of 7% Cumulative
Convertible Preferred Stock.
4.4 Registration Rights Agreement by and among the Company,
Donaldson, Lufkin & Jenrette Securities Corporation,
BancAmeric Robertson Stephens, Bear, Stearns & Co. Inc.
and Smith Barney Inc., dated May 6, 1998
4.5 Form of Depositary Share.
10.1@ Registrants Amended and Restated 1990 Stock Option Plan.
-13-
10.2@ Form of Incentive Stock Option Agreement under Registrant's
1990 Stock Option Plan.
10.3@ Form of Stock Option Agreement under Registrant's 1990 Stock
Option Plan for non-qualified options.
10.4@ Form of Stock Option Agreement outside scope of Registrant's
1990 Stock Option Plan for non-qualified options.
10.5@ Warrant Certificate, dated August 2, 1991, by and between the
Registrant and Allen & Company Incorporated.
10.6@ Warrant Certificate, dated August 2, 1991, by and between the
Registrant and Allen & Company Incorporated.
10.7@ Letter agreement, dated June 29, 1995, by and between the
Registrant and Allen & Company Incorporated (relating to
Exhibit 10.6).
10.8! Letter Agreement of Warrant Extension, dated November 1, 1996,
by and between the Registrant and Allen & Company
Incorporated (relating to Exhibit 10.6).
10.9@ Common Stock Purchase Warrant issued March 10, 1995, granted to
Madison Dearborn Capital Partners, L.P.
10.10@ Common Stock Purchase Warrant issued March 10, 1995, granted to
Madison Dearborn Capital Partners, L.P.
10.11@ Employment Agreement, effective October 1, 1995, by and between
the Registrant, Omnipoint Communications Inc. and George F.
Schmitt.
10.12@ Promissory Note, dated October 1, 1995, by George F. Schmitt.
10.13@ Stock Restriction Agreement, dated October 1, 1995, by and
between the Registrant and George F. Schmitt.
10.14@ Employment Agreement, dated April 17, 1995, by and between the
Registrant and Bradley E. Sparks.
10.15@ Promissory Note, dated April 17, 1995, by Bradley E. Sparks.
10.16@ Stock Restriction Agreement, dated April 17, 1995, by and
between the Registrant and Bradley E. Sparks.
10.17*** Employment Agreement, dated November 3, 1996, by and between
the Registrant and Kjell S. Andersson.
10.18*** Promissory Note, dated February 24, 1997, by Kjell S.
Andersson.
10.19*** Stock Restriction Agreement, dated February 24, 1997, by and
between the Registrant and Kjell S. Andersson.
10.20@ Series B Convertible Preferred Stock Purchase Agreement, dated
August 9, 1993, by and among the Registrant and Madison
Dearborn Capital Partners, L.P.
10.21@ Amendment No. 1 to Series B Convertible Preferred Stock
Purchase Agreement, dated June 29, 1995, by and between the
Registrant and Madison Dearborn Capital Partners, L.P.
10.22@ Series C Convertible Preferred Stock Purchase Agreement, dated
June 29, 1995, by and among the Registrant and the other
parties named therein.
10.23@ Amended and Restated Registration Rights Agreement, dated June
29, 1995, by and among the Registrant and the parties named
therein.
10.24@ First Amended and Restated Voting Agreement, dated June 29,
1995, by and among the Registrant and the other parties named
therein.
10.25@ OEM Supply Agreement for Omnipoint PCS (Personal Communication
Systems) Products, dated September 22, 1994, by and between
the Registrant and Northern Telecom Inc.
10.26@ Manufacturing License and Escrow Agreement for Personal
Communication Service Products, dated February 28, 1995, by
and between the Registrant and Northern Telecom Inc.
10.27@ Collaborative Development Agreement, dated March 1, 1995, by
and between the Registrant and Northern Telecom Inc.
10.28@ Reciprocal OEM Agreement Memorandum of Understanding, dated
March 30, 1995, by and between the Registrant and Northern
Telecom Inc.
10.29@ Supply Agreement, dated September 22, 1994, by and between
Omnipoint Communications Inc. and Northern Telecom Inc.
-14-
10.30@ Amendment No. 1 to Supply Agreement, dated July 21, 1995, by
and between Omnipoint Communications Inc. and Northern
Telecom Inc.
10.31! Amendment No. 2 to Supply Agreement, dated March 21, 1997, by
and between Omnipoint Communications Inc. and Northern
Telecom Inc.
10.32***+++ Amended and Restated Loan Agreement, dated August 7, 1996,
by and between Omnipoint Communications Inc. and Northern
Telecom Inc.
10.33***+++ Loan Agreement, dated August 7, 1996, by and between
Omnipoint Communications Inc. and Ericsson Inc., as amended.
10.34@ Memorandum of Understanding, dated April 21, 1995, by and
between the Registrant and Pacific Bell Mobile Services.
10.35@ Note and Warrant Purchase Agreement dated November 22, 1995,
between the Registrant and the purchasers named therein.
10.36@ Senior Note Due 2000 issued by the Registrant on November 22,
1995 to the holder identified therein.
10.37@ Senior Note Due 2000 issued by the Registrant on November 22,
1995 to the holder identified therein.
10.38@+ Memorandum of Understanding, dated November 22, 1995, by and
between the Registrant and Ericsson Inc.
10.39@ Letter Agreement, dated January 24, 1996, by and between the
Registrant and Ericsson Inc.
10.40@ Letter of Intent, dated October 26, 1995, by and between the
Registrant and BellSouth Personal Communications, Inc.
10.41@ Contract for Sale of Real Estate, dated August 30, 1995, by and
between F&R Bari Realty, Ltd., Inc. and Omnipoint
Communications Inc.
10.42@ Lease Agreement, dated October 15, 1995, by and between the
Registrant and Baetis Properties, Inc.
10.43**++ Acquisition Agreement for Ericsson CMS 40 Personal
Communications Systems (PCS) Infrastructure Equipment, dated
as of April 16, 1996, by and between Ericsson Inc. and
Omnipoint Communications.
10.44**++ Acquisition Supply and License Agreement for Omnipoint
Personal Communications Systems (PCS) Infrastructure
Equipment, dated as of April 16, 1996, by and between
Ericsson Inc. and the Registrant.
10.45**++ Agreement for Purchase and Sale of Ericsson Inc. Masko
Terminal Units, dated as of April 16, 1996, by and between
Ericsson, Inc. and Omnipoint Communications Inc.
10.46**++ Memorandum of Understanding, dated April 2, 1996, by and
between Orbitel Mobile Communications Inc. and the Registrant
10.47@@ Letter of Intent, dated November 20, 1995, by and between the
Registrant and Western Wireless Corporation
10.48@@ Letter of Intent, dated February 26, 1996, by and between
Omnipoint Communications Inc. and American Portable Telecom,
Inc.
10.49@@ Letter of Intent, dated March 22, 1996, by and between
Omnipoint Communications Inc. and American Personal
Communications.
10.50@@ Letter of Intent, dated May 13, 1996, by and between the
Registrant and InterCel, Inc.
10.51@@ License Agreement, dated March 22, 1996, by and between the
Registrant and Bender & Company, Inc.
10.52@@ Second License Agreement, dated April 17, 1996, by and between
Registrant and Bender & Company, Inc.
10.53@@ Lease Agreement, dated March 1, 1996, by and between Omniset
Corporation and Roots Stone Limited Partnership.
10.54*** Agreement dated as of February 24, 1997 between the Registrant
and Kjell S. Andersson, amending Employment Agreement dated
November 3, 1996.
10.55#! Loan Agreement by and among Omnipoint MB Holdings, Inc.,
Ericsson Inc. and certain other lenders named therein, dated
July 25, 1997.
10.56##!! Loan Agreement by and among OPCS Philadelphia Holdings, Inc.,
Ericsson Inc. and certain other lenders named therein, dated
July 25, 1997.
-15-
10.57##!! Loan Agreement by and among Omnipoint Midwest Holdings, LLC,
Northern Telecom Inc. and certain other lenders named
therein, dated January 30, 1998.
10.58##!! Loan Agreement by and among Omnipoint Corporation, Omnipoint
Communications Inc., DLJ Capital Funding Inc. and certain
other lenders named therein, dated February 17, 1998.
10.59##!! Note Purchase Agreement by and among Omnipoint Corporation,
Omnipoint Communications Inc., IBJ Schroder Bank & Trust
Company and certain other purchasers named therein, dated
February 17, 1998.
10.60 Purchase Agreement by and among the Company, Donaldson, Lufkin
& Jenrette Securities Corporation, BancAmeric Robertson
Stephens, Bear, Stearns & Co. Inc. and Smith Barney Inc.,
dated May 1, 1998.
10.61 Deposit Agreement by and among the Company, Marine Midland
Bank, and the holders from time to time of the Depositary
Shares, dated May 6, 1998.
10.62 Deposit Account Agreement by and between the Company and The
First National Bank of Maryland, dated May 6, 1998.
21.1@ Subsidiaries of the Registrant.
24.1 Power of Attorney (included in signature pages).
27 Financial Data Schedule.
99.1 Press Release, dated May 1, 1998.
______________
@ Incorporated herein by reference to the Company's Registration
Statement on Form S-1, No. 33-98360.
@@ Incorporated herein by reference to the Company's Registration
Statement on Form S-1, No. 33-03739.
@@@ Incorporated herein by reference to the Company's Registration
Statement on Form S-4, No. 333-19895.
* Incorporated herein by reference to Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
** Incorporated herein by reference to the Company's Current Report on
Form 8-K, filed May 3, 1996.
*** Incorporated herein by reference to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996.
# Incorporated herein by reference to the Company's Current Report on
Form 8-K, filed August 28, 1997.
## Incorporated herein by reference to the Company's Current Report on
Form 8-K, filed March 26, 1998.
+ Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to
the Registrant's Application Requesting Confidential
Treatment under Rule 406 of the Act, which application was
granted by the Commission.
++ Portions of this Exhibit were omitted and filed separately with the
Secretary of the Commission pursuant to the Registrant's
Application Requesting Confidential Treatment under Rule
24b-2 under the Exchange Act of 1934, filed May 3,1996.
+++ Portions of this Exhibit were omitted and filed separately with the
Secretary of the Commission pursuant to the Registrant's
Application Requesting Confidential Treatment under Rule
24b-2 under the Exchange Act of 1934, filed March 31,1997.
! Portions of this Exhibit were omitted and filed separately with the
Secretary of the Commission pursuant to the Registrant's
Application Requesting Confidential Treatment under Rule
24b-2 under the Exchange Act of 1934, filed August 28, 1997.
!! Portions of the Exhibit were omitted and filed separately with the
Secretary of the Commission pursuant to the Registrant's
Application Requesting Confidential Treatment under Rule 24b-
2 under the Exchange Act of 1934, filed March 26, 1998.
-16-
! Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1997.
(b) REPORTS ON FORM 8-K
On March 26, 1998, a Form 8-K, Item 5, was filed relating to the Midwest
Facility, the Ericsson Philadelphia Facility and the Permanent Credit
Facility.
-17-
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.
OMNIPOINT CORPORATION
Date: May 14, 1998 /s/ Bradley E. Sparks
-------------------- -----------------------------
Bradley E. Sparks
Chief Financial Officer
-18-
Dates Referenced Herein and Documents Incorporated by Reference
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