GTE CORPORATION
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 CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY
EMPLOYEES
GTE CORPORATION
ONE STAMFORD FORUM
STAMFORD, CONNECTICUT 06904
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY EMPLOYEES
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1993 AND DECEMBER 31,
1992
TOGETHER WITH
AUDITORS' REPORT
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the GTE Corporation Savings, Investment
& Tax-Deferral Plan for Hourly Employees:
We have audited the accompanying Statements of Net Assets
Available for Plan Benefits of the GTE Corporation Savings,
Investment & Tax-Deferral Plan for Hourly Employees as of December
31, 1993 and 1992, and the related Statements of Changes in Net
Assets Available for Plan Benefits for the years then ended as
restated (see Note 2). 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 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 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 Corporation Savings, Investment &
Tax-Deferral Plan for Hourly Employees as of December 31, 1993 and
1992, and the changes in its 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 CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
<CAPTION>
GTE
Stock Equity Bond Income Loan
Fund Fund Fund Fund Fund Total
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments $72,365 $13,698 $1,422 $25,852 $4,246 $117,583
Receivables 1,968 79 15 141 - 2,203
NET ASSETS AVAILABLE FOR PLAN BENEFITS $74,333 $13,777 $1,437 $25,993 $4,246 $119,786
The accompanying notes are an integral part of this statement.
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1992
<CAPTION>
GTE
Stock Equity Bond Income Loan
Fund Fund Fund Fund Fund Total
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments $382,894 $61,302 $9,313 $210,372 $45,425 $709,306
Receivables 29,508 946 545 3,173 3,236 37,408
Total Assets 412,402 62,248 9,858 213,545 48,661 746,714
Forfeitures Payable 4,140 462 17 2,240 5,526 12,385
NET ASSETS AVAILABLE FOR PLAN BENEFITS $408,262 $61,786 $9,841 $211,305 $43,135 $734,329
The accompanying notes are an integral part of this statement.
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
<CAPTION>
GTE
Stock Equity Bond Income Loan
Fund Fund Fund Fund Fund Total
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
Contributions (Note 3)
Employee $ 17,715 $ 4,789 $ 753 $ 11,747 $ - $ 35,004
Employer 1,734 - - - - 1,734
Interest and Dividends 12,060 - - 10,853 - 22,913
Net Investment Gain 23,612 4,984 987 632 - 30,215
Withdrawals, Terminations and
Interfund Transfers (45,009) (4,678) (851) (24,689) 8,620 (66,607)
Transfer to Another Plan (Note 5) (344,041) (53,104) (9,293) (183,855) (47,509) (637,802)
Net change during the year (333,929) (48,009) (8,404) (185,312) (38,889) (614,543)
NET ASSETS AVAILABLE FOR PLAN
BENEFITS - beginning of year 408,262 61,786 9,841 211,305 43,135 734,329
NET ASSETS AVAILABLE FOR PLAN
BENEFITS - end of year $ 74,333 $13,777 $1,437 $ 25,993 $ 4,246 $119,786
The accompanying notes are an integral part of this statement.
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
<CAPTION>
GTE
Stock Equity Bond Income Loan
Fund Fund Fund Fund Fund Total
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
Contributions (Note 3)
Employee $ 24,599 $ 7,965 $1,465 $ 26,233 $ - $ 60,262
Employer 23,847 - - - - 23,847
Interest and Dividends 18,835 - - 15,388 - 34,223
Net Investment Gain 242 4,327 628 - - 5,197
Withdrawals, Terminations and
Interfund Transfers (28,982) (3,255) (609) (22,497) 7,052 (48,291)
Transfer to Another Plan (Note 5) (2,160) (146) (70) (1,128) 15 (3,489)
Net change during the year 36,381 8,891 1,414 17,996 7,067 71,749
NET ASSETS AVAILABLE FOR PLAN
BENEFITS - beginning of year 371,881 52,895 8,427 193,309 36,068 662,580
NET ASSETS AVAILABLE FOR PLAN
BENEFITS - end of year $408,262 $61,786 $9,841 $211,305 $43,135 $734,329
The accompanying notes are an integral part of this statement.
</TABLE>
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY
EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
(1) Description of the Plan:
The GTE Corporation ("GTE") Savings, Investment & Tax-Deferral
Plan for Hourly Employees ("Plan") is a defined contribution plan
under the Employee Retirement Income Security Act of 1974 ("ERISA").
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 employees of GTE's Participating
Affiliates who (a) are not in units covered by a collective
bargaining agreement unless such agreement specifically provides for
the participation of such employees in the Plan, or (b) are not in
units deemed by a Participating Affiliate to be a nonparticipating
unit on the basis of uniform and nondiscriminatory rules, (c) are not
active participants in the GTE Savings Plan or (d) are not
nonresident aliens who do not receive compensation that constitutes
earned income from sources within the United States.
Normally, participation will continue as long as a member is
employed by GTE or a Participating Affiliate. Participation ceases
upon death, disability or separation from service for more than one
year, and when all funds in a member's account have been paid to the
member or his beneficiaries.
Company 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, Company contributions
vest 50% immediately and 50% two years 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.
Through December 31, 1993, each member directed their
contributions to be invested in any of four funds. Members are
permitted to make changes to their investment choices once every six
months. A description of the funds follows:
GTE Stock Fund - Common Stock of GTE Corporation
Equity Fund - Common stocks of various corporations
in
accordance with a commonly used index
of
corporate equity shares of stock, such
as
the Standard & Poor's 500 Composite
Price
Index; stock index futures contracts;
stock index options; or cash, interests
in
money-market funds, or other cash
equivalents
Bond Fund - Public and private bonds and
debentures,
interest and other distributions
received
with respect to those bonds and
debentures
will be invested in bonds as soon as is
practicable
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY
EMPLOYEES
NOTES TO FINANCIAL STATEMENTS - (Continued)
Income Fund - Funds invested in contracts with
insurance
companies, securities of U. S.
government,
government agencies or other highly
rated
issuers yielding current income and
reasonable rate of return with low risk
of
principal loss.
A loan feature is available to members which permits borrowing
up to 50% of a participant's vested balance subject to certain
limitations. The primary assets of the Loan Fund are the promissory
notes executed by participants who have taken loans.
The Plan participates in a master trust with other plans and,
along with these 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 two percent of
the assets in the trust. Dividends and interest and net investment
gain or losses are allocated to the plan based upon the plan's
participation in the master trust as a percentage of the total
participation.
Through December 31, 1992, State Street Bank and Trust Company
(the "Trustee") was designated as the Trustee under the Plan and was
responsible for the investment, reinvestment, control and
disbursement of the funds of the Plan. Administrative expenses of
the Plan were paid by the Participating Affiliates. Effective
January 1, 1993, Fidelity Management Trust Company became the trustee
of the Plan. GTE Service Corporation 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 members. In the event of termination or discontinuance of the
Plan by GTE, a participant's interest in his account will be fully
vested.
(2) Accounting Policies:
The accompanying financial statements have been prepared on the
accrual basis of accounting. The 1993 financial statements have been
restated, the effect of which increased the previously reported net
assets available for plan benefits.
GTE Stock Fund is valued on the last published sales price on
the last business day of the year on the composite listing of the New
York Stock Exchange.
The Equity and Bond Funds are valued based on the market values
of the securities which underlie the portfolio of the pooled
investments plus dividends and interest awaiting reinvestment
(Securities listed on national securities exchanges are valued at
closing sales prices on such exchanges or, in the absence of closing
sales prices, at the mean of the last published bid and asked prices
or the last published sales price, whichever is more recent.
Nonlisted securities are valued at either the mean of the most recent
published bid and asked prices or by officers of State Street Bank
and Trust Company or Fidelity Management Trust Company, as Trustee).
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY
EMPLOYEES
NOTES TO FINANCIAL STATEMENTS - (Continued)
Investment contracts in the Income Fund are valued at cost plus
reinvested interest. Promissory notes in the Loan Fund are valued at
cost plus interest earned.
Dividends and interest earned on underlying securities in the
Equity and Bond Funds are reinvested in such funds and are not
remitted to the Plan. Accordingly, dividends and interest in these
funds are included in the net investment gains and losses.
Realized and unrealized gains and losses of Plan assets are
based on the value of the assets at the beginning of the Plan year or
at time of purchase if acquired during the year. For the GTE Stock
Fund, the realized gain or loss on the sale of investments was a $0.6
million gain and a $0.3 million loss for 1993 and 1992, respectively.
The unrealized gains on investments were $23.0 million and $0.5
million for 1993 and 1992, respectively.
Withdrawals are reported on the cash basis in the Statement of
Changes in Net Assets Available for Plan Benefits. Amounts payable
to individuals at December 31, 1992, who withdrew from participation
in the Plan have been included in plan equity of the accompanying
December 31, 1992 statement of net assets available for plan benefits
and are as follows (in thousands):
Fund
GTE Shares $1,093
Equity 180
Bond -
Income 1,409
Total $2,682
There were no amounts payable to individuals who had withdrawn from
participation in the Plan as of December 31, 1993.
(3) Contributions:
The Plan is funded by contributions from participants 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 member's 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"). For the
part of any Plan year in which a member's Elective and/or After-Tax
contributions were at least 6% of compensation, but less than the 16%
maximum, the member was eligible to make an additional After-Tax
contribution in succeeding years equivalent to the difference between
these contributions and 16% of compensation. Each member's Elective
Contributions to the Plan for the 1993 Plan year was limited to
$8,994.
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY
EMPLOYEES
NOTES TO FINANCIAL STATEMENTS - (Continued)
Company contributions in the form of GTE Common Stock are
generally made within 60 days after the end of the Plan year.
Contributions for the 1993 and 1992 Plan years were 52,714 shares and
675,526 shares, respectively.
(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. Certain changes have
been made to the Plan to comply with the Tax Reform Act of 1986 ("TRA
86"). Management also intends to make additional changes to comply
with the final rulings of TRA 86 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) Transfer (to) from Another Plan:
During 1993, approximately $638 million of net assets were
transferred out of the Plan into the newly established GTE Hourly
Savings Plan.
During 1992, net assets of approximately $3.5 million were
transferred to a newly established plan for certain employees of
WESGO Corporation.
<TABLE>
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY EMPLOYEES
SCHEDULE OF INVESTMENTS IN MASTER TRUST
(thousands of dollars)
<CAPTION>
1993 1992
<S> <C> <C>
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 1,410,604 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 $4,360,623 $3,960,695
The accompanying notes are an integral part of this schedule.
GTE CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY EMPLOYEES
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
SAVINGS, INVESTMENT & TAX-DEFERRAL PLAN FOR HOURLY
EMPLOYEES
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 2 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.
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 CORPORATION
SAVINGS, INVESTMENT & TAX-DEFERRAL
PLAN
FOR HOURLY
EMPLOYEES
(Name of Plan)
Date June 27, 1995 By Lawrence R. Whitman
(Lawrence R. Whitman)
Vice President and Controller
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K/A into GTE
Corporation's previously filed Registration Statement on Form S-8
(File No. 33-46612).
ARTHUR ANDERSEN LLP
Stamford, Connecticut
June 21, 1995
