SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[ 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, 1994
GTE HOURLY SAVINGS PLAN
GTE CORPORATION
ONE STAMFORD FORUM
STAMFORD, CONNECTICUT 06904
GTE HOURLY SAVINGS PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1994 AND 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 Statements of Net Assets Available
for Plan Benefits with Fund Information of the GTE Hourly Savings Plan
as of December 31, 1994 and 1993, and the related Statements of Changes
in Net Assets Available for Plan Benefits with Fund Information for the
years then ended. These financial statements are the responsibility of
the Plan Administrator. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audits 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 audits provide 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, 1994 and
1993, and the changes in net assets available for plan benefits for the
years then ended in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the
financial statements taken as a whole. The fund information in the
Statements of Net Assets Available for Plan Benefits and Statements of
Changes in Net Assets Available for Plan Benefits is presented for
purposes of additional analysis rather than to present the net assets
available for plan benefits and changes in net assets available for plan
benefits of each fund. The fund information has been subjected to the
auditing procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Stamford, Connecticut
June 9, 1995
<TABLE>
GTE HOURLY SAVINGS PLAN
STATEMENT of Net Assets Available for Plan Benefits, WITH FUND INFORMATION
DECEMBER 31, 1994
(thousands of dollars)
<CAPTION>
Investments
in Master Trust Receivables Total
<S> <C> <C> <C>
FIDELITY FUNDS:
Equity - Income Fund $ 21,585 $ 124 $ 21,709
Overseas Fund 15,607 114 15,721
U.S. Equity Index Collective Trust Fund 27,341 50 27,391
Retirement Government Money Market Portfolio 24,943 446 25,389
Magellan Fund 49,209 331 49,540
Conservative Strategy Portfolio 111,685 124 111,809
Conservative Growth Strategy Portfolio 25,342 118 25,460
Moderate Growth Strategy Portfolio 26,981 166 27,147
Long-Term Growth Strategy Portfolio 22,156 141 22,297
OTHER FUNDS:
GTE Stock Portfolio 320,831 20,788 341,619
Loan Fund 54,384 - 54,384
Total $700,064 $22,402 $722,466
The accompanying notes are an integral part of this financial statement.
GTE HOURLY SAVINGS PLAN
STATEMENT of Net Assets Available for Plan Benefits, WITH FUND INFORMATION
DECEMBER 31, 1993
(thousands of dollars)
<CAPTION>
Investments
in Master Trust 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:
GTE Stock Portfolio 320,279 20,386 340,665
Loan Fund 50,643 - 50,643
Total $639,118 $21,772 $660,890
The accompanying notes are an integral part of this financial statement.
Page 1 of 2
GTE HOURLY SAVINGS PLAN
STATEMENT of Changes in Net Assets Available for Plan Benefits, WITH FUND INFORMATION
For the Year Ended December 31, 1994
(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>
Interest and Dividends $ 1,973 $ 262 $ - $ 692 $ 1,804 $ -
Net Investment Gain (Loss) (Note 2) (2,034) (426) 329 - (2,955) 6,216
Contributions (Note 3):
Employee 3,179 2,707 1,286 12,804 8,820 3,126
Employer - - - - - -
Transfers (To) From Other Plans (Note 5) (331) (263) 10,617 (186) (685) 20,162
Net Transfers Between Funds 5,747 7,104 (9,683) 1,365 12,550 (15,073)
Participant Loans:
Repayments 670 561 276 5,902 1,876 712
Withdrawals (726) (551) (925) (1,459) (1,697) (3,695)
Withdrawals and Terminations (1,714) (842) (3,919) (2,329) (3,562) (20,730)
INCREASE (DECREASE) IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS DURING YEAR 6,764 8,552 (2,019) 16,789 16,151 (9,282)
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT BEGINNING OF YEAR 14,945 7,169 29,410 8,600 33,389 121,091
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT END OF YEAR $21,709 $15,721 $27,391 $25,389 $49,540 $111,809
The accompanying notes are an integral part of this financial statement.
Page 2 of 2
GTE HOURLY SAVINGS PLAN
STATEMENT of Changes in Net Assets Available for Plan Benefits, WITH FUND INFORMATION
For the Year Ended December 31, 1994
(thousands of dollars)
<CAPTION>
Fidelity Funds Other Funds
Conservative Moderate Long-Term
Growth Growth Growth GTE
Strategy Strategy Strategy Stock Loan
Portfolio Portfolio Portfolio Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C>
Interest and Dividends $ - $ - $ - $ 19,272 $ 3,085 $ 27,088
Net Investment Gain (Loss) (Note 2) 1,034 753 566 (50,827) - (47,344)
Contributions (Note 3):
Employee 3,137 4,338 3,574 12,392 - 55,363
Employer - - - 20,365 - 20,365
Transfers (To) From Other Plans (Note 5) (378) (304) (141) 55,681 17 84,189
Net Transfers Between Funds 3,313 4,610 5,362 (15,295) - -
Participant Loans:
Repayments 654 838 710 10,528 (22,727) -
Withdrawals (731) (890) (789) (15,122) 26,585 -
Withdrawals and Terminations (2,872) (1,767) (1,091) (36,040) (3,219) (78,085)
INCREASE (DECREASE) IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS DURING YEAR 4,157 7,578 8,191 954 3,741 61,576
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT BEGINNING OF YEAR 21,303 19,569 14,106 340,665 50,643 660,890
NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT END OF YEAR $25,460 $27,147 $22,297 $341,619 $54,384 $722,466
The accompanying notes are an integral part of this financial statement.
Page 1 of 2
GTE HOURLY SAVINGS PLAN
STATEMENT of Changes in Net Assets Available for Plan Benefits, WITH FUND INFORMATION
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>
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 Transfers Between Funds 13,398 6,236 (23,200) 1,369 29,630 (66,353)
Participant Loans:
Repayments 156 72 60 1,888 366 178
Withdrawals (143) (60) (321) (116) (362) (1,628)
Withdrawals and Terminations (135) (36) (1,347) (145) (237) (7,850)
INCREASE IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS 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 this financial statement.
Page 2 of 2
GTE HOURLY SAVINGS PLAN
STATEMENT of Changes in Net Assets Available for Plan Benefits, WITH FUND INFORMATION
For the Year Ended DECEMBER 31, 1993
(thousands of dollars)
<CAPTION>
Fidelity Funds Other Funds
Conservative Moderate Long-Term
Growth Growth Growth GTE
Strategy Strategy Strategy Stock Loan
Portfolio Portfolio Portfolio Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C>
Interest and Dividends $ - $ - $ - $ 4,442 $ 740 $ 7,388
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) 57 133 111 355,809 47,509 652,115
Net Transfers Between Funds 20,308 18,071 13,149 (12,608) - -
Participant Loans:
Repayments 152 242 117 2,711 (5,942) -
Withdrawals (262) (263) (241) (5,680) 9,076 -
Withdrawals and Terminations (308) (240) (99) (11,954) (740) (23,091)
INCREASE (DECREASE) IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS DURING YEAR 21,303 19,569 14,106 340,665 50,643 660,890
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 $340,665 $50,643 $660,890
The accompanying notes are an integral part of this financial statement.
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 and its 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 that provides for participation in the
Plan; or (ii) is a nonunion hourly-paid employee that GTE or a
Participating Affiliate has agreed, by resolution of its board of
directors, to co-sponsor under the Plan. "Eligible Employee" does not
include any of the following:
a. an active participant in any other tax-qualified retirement
plan maintained by GTE or a Participating Affiliate that includes
a cash or deferred arrangement qualified under Internal Revenue
Service 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.
To the extent expressly provided in any written separation policy of
GTE or a Participating Affiliate, "Eligible Employee" also includes any
former employee of GTE or a Participating Affiliate who is receiving salary
continuation payments pursuant to the separation policy.
An individual's active participation in the Plan shall terminate when
the individual ceases to be an Eligible Employee; but the individual shall
remain a participant 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 with GTE or a
Participating Affiliate. For participants with less than five years of
service, matching contributions vest 50% immediately and 50% 24 months
after the end of the Plan year for which the contributions were made.
Forfeitures of a participant's account due to termination prior to 100%
vesting are used to reduce GTE's future contributions.
GTE CORPORATION
GTE HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
Each participant directs their contributions to be invested in one of
the current investment options: five Fidelity funds, one of four Fidelity
strategy portfolios, in the GTE stock portfolio or in any combination of
these funds and portfolios. Participants are permitted to make changes to
their investment choices on a daily basis. A description of the investment
choices follows:
a. Fidelity Equity-Income Fund - invests primarily in corporate
common and preferred stock, with up to 20% of the fund invested in
bonds and convertible securities.
b. Fidelity Overseas Fund - invests primarily in securities of
issuers whose principal activities are outside the U.S. and also
invests in public and private bonds (both foreign and domestic)
and bank deposits and money market instruments denominated in U.S.
dollars or foreign currencies.
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. as represented by the Standard & Poor's 500 Composite Stock
Price Index.
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 and
securities convertible into common stock of U.S. and foreign
companies and also invests in high yield securities,
options and futures contracts related to securities in the
portfolio.
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 approximately
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 approximately 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 approximately
75% of its assets in a portfolio of equity securities consisting
of a combination of U.S. equities (50%) and international equities
GTE CORPORATION
GTE HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
(25%). The remaining 25% is invested in a portfolio of fixed-
income securities, including investment contracts and bonds.
j. GTE Stock Portfolio - invests principally in GTE common stock,
but may also invest a portion in short-term money market
instruments.
The Savings Plan Committee may, at its sole discretion, eliminate,
and/or change the underlying composition of any of the investment options,
and may add other funds as a current investment option.
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 promissory notes executed by
participants who have taken loans.
Interest rates on loans are equal to the prime interest rate at the
first business day of each calendar quarter. Participant loans are
withdrawn proportionately from the participants' investment accounts. When
loans are repaid, they are reinvested according to the participants'
current investment decision. Short-term loan terms are from six months to
five years while long-term loan terms for the purchase of a primary
residence are from sixty-six months to twenty years.
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, 1994, the
Plan owned 17% of the assets in the various investment funds and portfolios
that comprise the master trust. Interest and dividends along with net
investment gains or losses are allocated to the Plan on a daily basis based
upon the Plan's participation in the various investment funds and
portfolios that comprise the master trust as a percentage of the total
participation in such funds and portfolios.
Fidelity Management Trust Company (the "Trustee") has been designated
as the Trustee under the Plan and is responsible for the investment,
reinvestment, control and disbursement of the funds of the Plan. Expenses
of administering the Plan, including fees and expenses of the Trustee, are
charged to the participants' accounts. GTE Service Corporation, a
subsidiary of GTE, is the plan administrator.
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
participants. In the event of termination or discontinuance of the Plan by
GTE, participants' interest in their accounts will become 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
GTE CORPORATION
GTE HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
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 and realized
gains and losses on sales of Plan investments 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 if
acquired during the Plan year. For the GTE Stock Fund, the realized loss
on sale of investments was $7.9 million during 1994 and the realized gain
on sale of investments was $2.9 million during 1993. The unrealized losses
on investments were $42.9 million and $18.5 million for 1994 and 1993,
respectively.
Reclassifications of prior year data have been made in the financial
statements where appropriate to conform to the 1994 presentation.
(3) Contributions:
The Plan is funded by employee contributions up to a maximum of 16%
of compensation and by employer contributions in shares of GTE common stock
equivalent in value up to 50% of the initial 6% of the employees'
contributions not withdrawn during the Plan year. The employee's matching
contribution is credited following the close of each calendar year to the
accounts of employees who have not terminated their active participation.
Participant contributions may be before tax ("Elective Contributions") or
from currently taxed compensation. Each participant's Elective
Contribution to the Plan for the 1994 Plan year was limited to $9,240. The
total amount of Elective Contributions, After-Tax Contributions and
matching contributions and certain forfeitures that may be allocated to a
Plan participant for the 1994 Plan year was limited to the lesser of (i)
$30,000 or (ii) 25% of the participant's total compensation; and the
compensation on which such contributions were based was limited to
$150,000.
GTE matching contributions for the 1994 and 1993 Plan years consisted
of approximately 602,000 and 610,000 shares of GTE common stock,
respectively. In general, participants cannot redirect these shares into
other investment choices.
(4) Tax Status:
The Plan is a qualified profit sharing plan under Sections 401(a),
401(k) and 501 of the Internal Revenue Code of 1986, as amended, ("the
Code") and consequently is exempt from Federal income tax. Management
amended the Plan in 1995 to comply with the final rulings under the Tax
Reform Act of 1986, as amended, and has filed 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 qualifies
under Sections 401(a), 401(k) and 501 of the Code will be received in due
course.
(5) Plan Transfers:
During 1994, net assets of plan participants totaling $2 million were
transferred from the Plan to the savings plans of Citizens Utilities
Company
GTE CORPORATION
GTE HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
as a result of the sale of certain non-strategic local-exchange telephone
properties by GTE.
During 1994 and 1993, net assets of plan participants totaling $86
million and $638 million, respectively, were transferred to the Plan from
the GTE Corporation Savings, Investment and Tax-deferral Plan for Hourly
Employees as a result of labor unions negotiating to participate in such
Plan. Also during 1993, net assets of plan participants totaling $14
million were transferred to the Plan from the GTE Savings Plan.
</TABLE>
<TABLE>
GTE HOURLY SAVINGS PLAN
SCHEDULE OF INVESTMENTS IN MASTER TRUST
(thousands of dollars)
<CAPTION>
1994 1993
<S> <C> <C>
FIDELITY FUNDS:
Equity - Income Fund $ 152,380 $ 142,560
Overseas Fund 117,757 86,633
U.S. Equity Index Collective Trust Fund 112,306 131,013
Retirement Government Money Market Portfolio 78,287 45,128
Magellan Fund 307,397 282,612
Broad Market Duration Collective Trust 779 1,422
Conservative Strategy Portfolio 515,488 556,015
Conservative Growth Strategy Portfolio 221,646 228,880
Moderate Growth Strategy Portfolio 257,401 249,088
Long-Term Growth Strategy Portfolio 204,259 177,260
OTHER FUNDS:
GTE Stock Portfolio 1,196,697 1,410,604
ESOP Shares Fund 724,649 850,243
Loan Fund 176,034 173,313
Income Portfolio 8,351 25,852
Total $4,073,431 $4,360,623
The accompanying notes are an integral part of this schedule.
GTE HOURLY SAVINGS PLAN
Schedule of INVESTMENT INCOME IN MASTER TRUST
(thousands of dollars)
<CAPTION>
December 31, 1994 December 31, 1993
Dividends Net Investment Dividends Net Investment
& Interest Gain (Loss) & Interest Gain
<S> <C> <C> <C> <C>
FIDELITY FUNDS:
Equity - Income Fund $ 14,713 $ (14,699) $ 4,119 $ 11,122
Overseas Fund 2,004 (2,019) 1,296 11,598
U.S. Equity Index Collective Trust Fund - 1,704 - 21,397
Retirement Government Money Market Portfolio 2,494 - 917 3
Magellan Fund 11,984 (18,123) 23,172 7,337
Broad Market Duration Collective Trust - (16) - 987
Conservative Strategy Portfolio - 28,189 - 41,707
Conservative Growth Strategy Portfolio - 9,554 - 14,289
Moderate Growth Strategy Portfolio - 8,186 - 17,772
Long-Term Growth Strategy Portfolio - 6,503 - 16,366
OTHER FUNDS:
GTE Stock Portfolio 74,534 (183,332) 61,959 40,045
ESOP Shares Fund 46,000 (107,957) 45,568 8,859
Loan Fund 10,046 - 9,187 -
Income Portfolio - 657 - 11,485
Total $161,775 $(271,353) $146,218 $202,967
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 Corporation Savings, Investment and
Tax-Deferral Plan for Hourly Employees; AGCS Savings Plan (limited
participation) and AGCS Hourly Savings Plan (limited participation).
(2) Funds invested in contracts with insurance companies represented 68% of
the Conservative Strategy Portfolio consisting of 56 investment contracts
held with 24 insurance companies. These insurance companies, excluding
Mutual Benefit Life Insurance Company (Mutual Benefit) discussed in note 3
below and Confederation Life Insurance and Annuity Company (Confederation)
discussed in note 4 below, at December 31, 1994, were rated A- or better by
Standard & Poor's as of December 31, 1994. The investment contracts,
excluding Mutual Benefit and Confederation Life, bear interest rates
ranging from 5.28% to 9.23% and have scheduled maturities from January 3,
1995 to May 25, 2001.
(3) At December 31, 1994, the Income Portfolio had an investment contract
with Mutual Benefit which represented approximately 7% of the Conservative
Strategy Portfolio's investments and approximately 1% of the master trust
investments. At December 31, 1994, this investment is carried at contract
value of $34.9 million 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 principal and
extends maturities, with minimum interest and premium payments over the
rehabilitation period. During 1993 and 1994, the contract was credited
with interest at a rate of 3.5%. During 1995, interest will be credited at
3.55%. In each subsequent 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.
(4) At December 31, 1994, the Income Portfolio had three investment
contracts with Confederation, which represented approximately 3% of the
Conservative Strategy Portfolio's investments and are less than 1% of the
master trust investments. On August 11, 1994, Confederation was seized by
Canada's Office of the Superintendent of Financial Institutions. As of
December 31, 1994, the workout of the appropriation of assets had not been
completed. At December 31, 1994, this investment is carried at contract
value of $13.3 million in the master trust.
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 LLP
Stamford, Connecticut
June 23, 1995
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 27, 1995 By Lawrence R. Whitman
(Lawrence R. Whitman)
Vice President and Controller
