SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-2755
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
GTE HOURLY SAVINGS PLAN
GTE CORPORATION
ONE STAMFORD FORUM
STAMFORD, CONNECTICUT 06904
GTE HOURLY SAVINGS PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1993
TOGETHER WITH
AUDITORS' REPORT
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the
GTE Hourly Savings Plan:
We have audited the accompanying statement of net assets available
for plan benefits of the GTE Hourly Savings Plan as of December 31, 1993
and the related statement of changes in net assets available for plan
benefits for the period ended December 31, 1993. These financial
statements and the schedules referred to below are the responsibility of
the Plan Administrator. Our responsibility is to express an opinion on
these financial statements and schedules based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the GTE Hourly Savings Plan as of December 31, 1993 and the
changes in its net assets available for plan benefits for the period
ended December 31, 1993, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules
of investments and investment income in Master Trust are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The
supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Stamford, Connecticut,
June 28, 1994
<TABLE>
GTE HOURLY SAVINGS PLAN
STATEMENT of Net Assets Available for Plan Benefits
DECEMBER 31, 1993
(thousands of dollars)
<CAPTION>
Investments Receivables Total
<S> <C> <C> <C>
FIDELITY FUNDS:
Equity - Income Fund $ 14,855 $ 90 $ 14,945
Overseas Fund 7,115 54 7,169
U.S. Equity Index Collective Trust Fund 29,366 44 29,410
Retirement Government Money Market Portfolio 8,088 512 8,600
Magellan Fund 33,143 246 33,389
Conservative Strategy Portfolio 120,983 108 121,091
Conservative Growth Strategy Portfolio 21,201 102 21,303
Moderate Growth Strategy Portfolio 19,437 132 19,569
Long-Term Growth Strategy Portfolio 14,008 98 14,106
OTHER FUNDS:
Loan Fund 50,643 - 50,643
GTE Stock Fund 320,279 20,386 340,665
Total $639,118 $21,772 $660,890
The accompanying notes are an integral part of these financial statements.
Page 1 of 2
GTE HOURLY SAVINGS PLAN
STATEMENT of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1993
(thousands of dollars)
<CAPTION>
Fidelity Funds
U.S. Equity Retirement
Equity- Index Government Conservative
Income Overseas Collective Money Market Magellan Strategy
Fund Fund Trust Fund Portfolio Fund Portfolio
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Interest and Dividends $ 207 $ 106 $ - $ 43 $ 1,850 $ -
Net Investment Gain (Loss) (Note 2) 203 245 666 - (937) 2,308
Contributions: (Note 3)
Employee 814 434 411 5,258 2,103 977
Employer - - - - - -
Transfers From Other Plans (Note 5) 445 172 53,141 303 976 193,459
Net Exchanges (To) From Other Funds 13,398 6,236 (23,200) 1,369 29,630 (66,353)
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Withdrawals, Terminations and Loans (122) (24) (1,608) 1,627 (233) (9,300)
NET INCREASE DURING YEAR 14,945 7,169 29,410 8,600 33,389 121,091
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT BEGINNING OF YEAR - - - - - -
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT END OF YEAR $14,945 $7,169 $29,410 $8,600 $33,389 $121,091
The accompanying notes are an integral part of these financial statements.
Page 2 of 2
GTE HOURLY SAVINGS PLAN
STATEMENT of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1993
(thousands of dollars)
<CAPTION>
Fidelity Funds
Conservative Moderate Long-Term
Growth Growth Growth GTE
Strategy Strategy Strategy Loan Stock
Portfolio Portfolio Portfolio Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Interest and Dividends $ - $ - $ - $ - $ 4,442 $ 6,648
Net Investment Gain (Loss) (Note 2) 454 445 213 - (15,554) (11,957)
Contributions: (Note 3)
Employee 902 1,181 856 - 3,515 16,451
Employer - - - - 19,984 19,984
Transfers From Other Plans (Note 5) 57 133 111 47,509 355,809 652,115
Net Exchanges From (To) Other Funds 20,308 18,071 13,149 - (12,608) -
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Withdrawals and Terminations (418) (261) (223) 3,134 (14,923) (22,351)
NET INCREASE DURING YEAR 21,303 19,569 14,106 50,643 340,665 660,890
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT BEGINNING OF YEAR - - - - - -
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT END OF YEAR $21,303 $19,569 $14,106 $50,643 $340,665 $660,890
The accompanying notes are an integral part of these financial statements.
</TABLE>
GTE CORPORATION
GTE HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(1) Description of the Plan:
The GTE Corporation ("GTE") GTE Hourly Savings Plan ("Plan") is a
defined contribution plan under the Employee Retirement Income Security
Act of 1974 ("ERISA"). The Plan commenced in 1993. The purpose of the
Plan is to provide eligible employees of GTE's subsidiaries
("Participating Affiliates") with a convenient way to save for both
medium and long-term needs.
The Plan is available to any eligible employee of GTE or a
Participating Affiliate, who either (i) is in a unit covered by a
collective bargaining agreement with GTE or a Participating Affiliate
and the collective bargaining agreement, by specific reference to the
Plan, provides for coverage under the Plan; or (ii) is a nonunion
hourly-paid employee, and GTE or a Participating Affiliate has agreed,
by resolution of its board of directors, to become a co-sponsor under
the Plan for such employee. "Eligible Employee" shall not include any
of the following:
(a) an active participant in any other tax-qualified
retirement plan maintained by GTE or an Participating Affiliate that
includes a cash or deferred arrangement qualified under code Section
401(k);
(b) a nonresident alien who does not receive compensation
from GTE or a Participating Affiliate that constitutes earned income
from sources within the United States;
(c) a "leased employee" within the meaning of the Internal
Revenue Code Section 414(n);
(d) an individual whose basic compensation for services
rendered on behalf of GTE or a Participating Affiliate is not paid
directly by GTE or a Participating Affiliate; and
(e) an individual retained by GTE or a Participating
Affiliate pursuant to a contract or agreement that specifies that the
employee is not eligible to participate in the Plan.
An individual's active membership in the Plan shall terminate when
the individual ceases to be an Eligible Employee; but the individual
shall remain a member until the entire account balance under the Plan
has been distributed or forfeited.
Matching contributions vest immediately upon death, disability,
retirement, attainment of age 65 or five years of service. For members
with less than five years of service, matching contributions vest 50%
immediately and 50% two years after the end of the Plan year for which
the contributions were made. Forfeitures of a member's account due to
termination prior to 100% vesting are used to reduce GTE's future
contributions.
Each member directs their contributions to be invested in one of
five Fidelity funds, one of four Fidelity strategy portfolios, in the
GTE stock fund or in any combination of these funds and portfolios.
Members are permitted to make GTE
CORPORATION
GTE HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
changes to their investment choices on a daily basis by telephoning the
trustee. A description of the investment choices follows:
a. Fidelity Equity-Income Fund - invests primarily in
corporate common stock, with some investments in bonds and
convertible securities.
b. Fidelity Overseas Fund - invests primarily in securities
of issuers whose principal activities are outside the U.S.
c. Fidelity U.S. Equity Index Collective Trust Fund -
invests in commingled funds seeking to provide results that
correspond to the total return performance of common stocks
publicly traded in the U.S.
d. Fidelity Retirement Government Money Market Portfolio -
invests in high-quality money market instruments and
obligations issued or guaranteed by the U.S. government or its
agencies or instrumentalities.
e. Fidelity Magellan Fund - invests primarily in stocks of
both well-known and lesser-known companies with above-
average growth potential.
f. Conservative Strategy Portfolio - invests 100% of its
assets in an underlying portfolio of fixed-income
securities, including investment contracts and bonds.
g. Conservative Growth Strategy Portfolio - invests 75% of
its assets in a portfolio of fixed-income securities,
including investment contracts and bonds, with the remaining
25% invested in a portfolio of U.S. equities.
h. Moderate Growth Strategy Portfolio - invests 50% of its
assets in a portfolio of U.S. equities. The remaining 50% is
invested in a portfolio of fixed-income securities,
including investment contracts and bonds.
i. Long-Term Growth Strategy Portfolio - invests 75% of its
assets in a portfolio of equity securities consisting of a
combination of U.S. equities (50%) and international
equities (25%). The remaining 25% is invested in a
portfolio of fixed-income securities, including investment
contracts and bonds.
j. GTE Stock Fund - invests in GTE common stock and such
short-term instruments as are deemed advisable on an interim
basis.
A loan feature is available which permits participants to borrow
up to 50% of their vested balance, subject to certain limitations. The
primary assets of the Loan Fund are the promissory notes executed by
participants.
GTE CORPORATION
GTE HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
The Plan participates in a master trust and, along with other
plans, owns a percentage of the assets in the master trust. These
percentages are based on a pro rata share of the trust assets. At
December 31, 1993, the Plan owned 15% of the assets in the master trust.
Dividends and interest and net investment gains or losses are allocated
to the plan based upon the plan's participation in the master trust as a
percentage of the total participation.
Fidelity Management Trust Company is the trustee of the Plan.
Administrative expenses of the Plan are charged to the participants'
accounts.
GTE reserves the right to terminate, modify, alter or amend the
Plan at any time, provided that no such change shall permit any of the
funds to be used for any purpose other than the exclusive benefit of the
members. In the event of termination or discontinuance of the Plan by
GTE, participants' interest in their accounts will be fully vested.
(2) Accounting Policies:
The accompanying financial statements have been prepared on the
accrual basis of accounting. Investments are stated at market value
determined from publicly stated price information, if available;
otherwise, the estimated fair value is used. Guaranteed investment
contracts are stated at cost plus accrued interest. Net investment
gains and losses include both unrealized gains and losses on investments
held by the Plan at year-end as well as realized gains and losses on
sales of Plan investments sold during the year. Net unrealized and net
realized gains and losses are based on the value of the investments at
the beginning of the Plan year or at the time of purchase acquired
during the Plan year. For the GTE Stock Fund, the realized gain on sale
of investments was $2.9 million and the unrealized loss on investments
was $18.5 million.
(3) Contributions:
The Plan is funded by contributions from members up to a maximum
of 16% of compensation and from Participating Affiliates in shares of
GTE Common Stock equivalent in value to 50% of the initial 6% of the
members' contribution not withdrawn during the Plan year. The
Participating Affiliates matching contribution is credited following the
close of each calendar year to the accounts of participants who have not
terminated their active membership. Member contributions may be before
tax ("Elective Contributions") or from currently taxed compensation
("After-Tax Contributions"). Each member's Elective Contributions to
the Plan for the 1993 Plan year was limited to $8,994.
Accrued company contributions for the 1993 Plan year were
$19,984,000 or approximately 610,000 shares of GTE common stock.
(4) Tax Status:
The Plan is a qualified profit sharing plan under Sections 401 and
501 of the Internal Revenue Code ("Code"), as amended, and consequently
is exempt from Federal income tax. Management intends to make changes
to the Plan to GTE CORPORATION
GTE HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
comply with the final rulings of the Tax Reform Act of 1986 and will
file for a determination letter in accordance with guidelines as issued
by the Internal Revenue Service. Management anticipates that a letter
to the effect that the Plan, as amended, qualifies under Sections 401
and 501 of the Code will be received in due course.
(5) Plan Transfers:
During 1993, net assets of plan participants totaling $638 million
were transferred from the GTE Savings, Investment and Tax-deferral Plan
for Hourly Employees. Also during 1993, net assets of plan participants
totaling $14 million were transferred from the GTE Savings Plan.
GTE HOURLY SAVINGS PLAN
Schedule of INVESTMENTS IN MASTER TRUST
(thousands of dollars)
1993 1992
FIDELITY FUNDS:
Equity - Income Fund $ 142,560 $ -
Overseas Fund 86,633 -
U.S. Equity Index Collective Trust Fund 117,315 -
Retirement Government Money Market Portfolio 45,128 -
Magellan Fund 282,612 -
Conservative Strategy Portfolio 556,015 -
Conservative Growth Strategy Portfolio 228,880 -
Moderate Growth Strategy Portfolio 249,088 -
Long-Term Growth Strategy Portfolio 177,260 -
OTHER FUNDS:
GTE Stock Fund 1,385,236 1,434,617
ESOP Shares Fund 850,243 860,188
Loan Fund 173,313 141,237
Equity Fund 13,698 399,381
Bond Fund 1,422 45,868
Income Fund 25,852 1,079,404
Total $4,335,255 $3,960,695
The accompanying notes are an integral part of this schedule.
<TABLE>
GTE HOURLY SAVINGS PLAN
Schedule of INVESTMENT INCOME IN MASTER TRUST
(thousands of dollars)
<CAPTION>
December 31, 1993 December 31, 1992
Dividends Net Investment Dividends Net Investment
& Interest Gain & Interest Gain
<S> <C> <C> <C> <C>
FIDELITY FUNDS:
Equity - Income Fund $ 4,119 $ 11,122 $ - $ -
Overseas Fund 1,296 11,598 - -
U.S. Equity Index Collective Trust Fund - 16,413 - -
Retirement Government Money Market Portfolio 917 3 - -
Magellan Fund 23,172 7,337 - -
Conservative Strategy Portfolio - 41,707 - -
Conservative Growth Strategy Portfolio - 14,289 - -
Moderate Growth Strategy Portfolio - 17,772 - -
Long-Term Growth Strategy Portfolio - 16,366 - -
OTHER FUNDS:
GTE Stock Fund 61,959 40,045 68,612 2,843
ESOP Shares Fund 45,568 8,859 44,133 237
Loan Fund - - - -
Equity Fund - 4,984 559 28,132
Bond Fund - 987 605 2,437
Income Fund 10,853 632 80,503 -
Total $147,884 $192,114 $194,412 $33,649
The accompanying notes are an integral part of this schedule.
</TABLE>
GTE CORPORATION
GTE HOURLY SAVINGS PLAN
SAVINGS & INVESTMENT MASTER TRUST
Notes to Schedules
(1) The plans participating in the Master Trust include the GTE Savings
Plan; GTE Hourly Savings Plan; GTE Savings, Investment and Tax-Deferral
Plan for Hourly Employees; AGCS Savings Plan and AGCS Hourly Savings
Plan.
(2) Funds invested in contracts with insurance companies, excluding
Mutual Benefit Life Insurance Company (Mutual Benefit) discussed in note
3 below, at December 31, 1993, represented 66% of the Conservative
Strategy Portfolio consisting of 68 investment contracts held with 24
different insurance companies (these insurance companies were rated A-
or better by Standard & Poor's as of December 31, 1993). The investment
contracts bear interest rates ranging from 5.28% to 9.67% and have
scheduled maturities from March 1, 1994 to December 31, 1999.
(3) At December 31, 1993, the Income Fund had an investment contract
with Mutual Benefit which represented approximately 5% of the
Conservative Strategy Portfolio's investments and approximately 1% of
the master trust investments. At December 31, 1993, this investment is
carried at contract value of $31,560,000 in the master trust. On July
15, 1991, the Board of Directors of Mutual Benefit asked the New Jersey
Department of Insurance to place Mutual Benefit into rehabilitation. On
January 15, 1993, Mutual Benefit filed its First Amended Plan of
Rehabilitation which was approved by the Superior Court of New Jersey
effective May 2, 1994. GTE opted into the plan and will receive a new
contract which preserves principle and extends maturities, with minimum
interest and premium payments over the rehabilitation period. The
contract balance will be credited with the contract rate of interest for
the period from July 16, 1991 to December 31, 1991. A crediting rate of
4% will be applied from January 1, 1992 to December 31, 1992 and 3.50%
will be applied for each year in the period from January 1, 1993 to
December 31, 1994. In each subsequent rehabilitation period year, the
contract balance will earn an annual rate of interest that can be
adjusted each year, or more often under certain circumstances, and will
be determined by a formula based on the investment performance of the
assets which support the GTE contract. No interest has been accrued on
the investment since October 1, 1991.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 11-K into GTE Corporation's previously
filed Registration Statement on Form S-8 (File No. 33-46612).
ARTHUR ANDERSEN & CO.
Stamford, Connecticut,
June 28, 1994
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Savings Plan Committee has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
GTE HOURLY SAVINGS PLAN
(Name of Plan)
Date June 28, 1994 By William D. Wilson
(William D. Wilson)
Vice President and Controller
