<PAGE>
Registration No. 33-51911
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
GTE NORTH INCORPORATED
(Exact name of registrant as specified in its charter)
Wisconsin 35-1869961
(State of Incorporation) (I.R.S. Employer Identification No.)
19845 North U.S. 31, Westfield, Indiana 46074
(317) 896-6464
(Address and telephone number of principal executive offices)
DAVID S. KAUFFMAN, ESQ. DALE E. SPORLEDER, ESQ.
GTE Service Corporation GTE North Incorporated
One Stamford Forum 19845 North U.S. 31
Stamford, Connecticut 06904 Westfield, Indiana 46074
(203-965-2986) (317-896-6464)
(Names, addresses and telephone numbers of agents for service)
------------
Copies to: George J. Forsyth, Esq., Milbank, Tweed, Hadley & McCloy,
1 Chase Manhattan Plaza, New York, New York 10005
Approximate date of commencement of proposed sale to the public:
February 16, 1994.
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<PAGE>
PROSPECTUS
$200,000,000
LOGO - GTE NORTH INCORPORATED
5 1/2% DEBENTURES, SERIES B, DUE 1999
INTEREST PAYABLE FEBRUARY 15 AND AUGUST 15
The 5 1/2% Debentures, Series B, Due 1999 (the "New Debentures") will not be
redeemable prior to maturity.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture........................ 99.569% 0.197% 99.372%
- --------------------------------------------------------------------------------
Total................................ $199,138,000 $394,000 $198,744,000
</TABLE>
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- --------------------------------------------------------------------------------
(1) Plus accrued interest from February 15, 1994.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(3) Before deducting estimated expenses of $230,000 payable by the Company.
----------------
The New Debentures are offered by the several Underwriters named herein
subject to receipt and acceptance by them and to their right to reject any
order in whole or in part. It is expected that delivery of the New Debentures
will be made on or about February 24, 1994.
----------------
KIDDER, PEABODY & CO.
INCORPORATED
DAIWA SECURITIES AMERICA INC.
GOLDMAN, SACHS & CO.
SMITH BARNEY SHEARSON INC.
The date of this Prospectus is February 16, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NEW DEBENTURES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
STATEMENT OF AVAILABLE INFORMATION
GTE North Incorporated (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports and other information with
the Securities and Exchange Commission (the "SEC"). These reports and other
information can be inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, as well as at the following Regional Offices: Seven World Trade Center,
New York, New York 10048 and 500 West Madison Street, Chicago, Illinois 60661.
Copies of such material can be obtained from the public reference section of
the SEC at its prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
1. The Registration Statement on Form S-4 of the Company (File No.
33-55704);
2. Items 10, 11, 12, 13 and 14(b) of the Annual Report on Form 10-K of GTE
North Incorporated, a predecessor to the Company which merged with and
into the Company on April 1, 1993 and whose name was adopted by the
Company on April 2, 1993 (the "Predecessor Corporation"), for the fiscal
year ended December 31, 1992;
3. The Quarterly Reports on Form 10-Q of the Company for the quarters ended
March 31, 1993, June 30, 1993 and September 30, 1993; and
4. The Current Reports on Form 8-K of the Company dated April 1, 1993,
September 28, 1993 and January 13, 1994.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act on or after the date of this Prospectus and prior to
the termination of the offering of the New Debentures hereunder shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, including any beneficial owner, a copy of any or
all of the documents referred to above which have been or may be incorporated
in this Prospectus by reference, other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into the information
that the Prospectus incorporates. Requests for such copies should be directed
to David S. Kauffman, Esq., Assistant Secretary of the Company, at One Stamford
Forum, Stamford, Connecticut 06904. Mr. Kauffman's telephone number is (203)
965-2986.
2
<PAGE>
THE COMPANY
GENERAL
The Company was incorporated in Wisconsin as Contel North Incorporated on
June 18, 1992. There is no public trading market for the Common Stock of the
Company because all of the Common Stock of the Company is owned by GTE
Corporation, a New York corporation ("GTE"). The Company has one wholly-owned
subsidiary, GTW Telephone Systems Incorporated, which markets and services
telecommunications customer premises equipment. The Company's principal
executive offices are located at 19845 North U.S. 31, Westfield, Indiana,
46074, telephone number (317) 896-6464. No matters have been submitted to a
vote of the holders of the Company's Preferred Stock or long-term debt since
the date of the incorporation of the Company.
THE PREDECESSOR CORPORATION, THE CONTEL SUBSIDIARIES AND THE MERGERS
Prior to April 1, 1993, the Company had no business operations and no
material assets. On April 1, 1993, the Predecessor Corporation, along with
Contel of Illinois, Inc., Contel of Indiana, Inc. and Contel of Pennsylvania,
Inc. (the "Contel Subsidiaries"), merged with and into the Company (the
"Mergers"). On April 2, 1993, the Company changed its name to GTE North
Incorporated.
The Predecessor Corporation was incorporated in Wisconsin on January 27, 1987
and was the successor to the merger of eight telephone companies into the
Predecessor Corporation on March 31, 1987. All of the Common Stock of the
Predecessor Corporation was owned by GTE. Prior to March 31, 1993, the
Predecessor Corporation provided communication services in the states of
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio,
Pennsylvania and Wisconsin. On March 31, 1993, the Predecessor Corporation
transferred its assets and operations in Iowa, Kansas, Minnesota, Missouri and
Nebraska to GTE Midwest Incorporated, which is now a wholly-owned subsidiary of
GTE (the "Midwest Transfer"). In addition, on March 31, 1993, all of the
directors and executive officers of the Predecessor Corporation were elected as
directors and executive officers, respectively, of the Company (to the extent
that such persons were not already serving in such capacities prior to that
date).
The Contel Subsidiaries were indirect, wholly-owned subsidiaries of GTE. They
provided communication services in the states of Illinois, Indiana and
Pennsylvania. The Contel Subsidiaries were, individually and in the aggregate,
significantly smaller in terms of operating revenues, net income and total
assets than the Predecessor Corporation prior to the Midwest Transfer.
Where appropriate, financial and other information has been restated in this
Prospectus to reflect the Midwest Transfer and the Mergers as if such events
had been consummated as of the date or at the beginning of the respective
periods presented.
BUSINESS
The Company provides local telephone service within its franchise areas and
intraLATA (Local Access Transport Area) long distance service between the
Company's facilities and the facilities of other telephone companies within the
Company's LATAs. InterLATA service to other points in and out of the states in
which the Company operates is provided through connection with interexchange
(long distance) common carriers. These common carriers are charged fees (access
charges) for interconnection to the Company's local facilities. End user
business and residential customers are also charged access charges for access
to the facilities of the long distance carriers.
The Company also earns other revenues by leasing interexchange plant
facilities and providing such services as billing and collection and operator
services to interexchange carriers, primarily American Telephone and Telegraph
Company (AT&T). The number of access lines served has grown steadily from
3,537,907 on January 1, 1988 to 3,897,641 on December 31, 1992.
3
<PAGE>
The following table denotes the access lines in the states in which the
Company operates as of December 31, 1992:
<TABLE>
<CAPTION>
ACCESS
STATE LINES SERVED
----- ------------
<S> <C>
Indiana...................................................... 810,877
Illinois..................................................... 764,997
Ohio......................................................... 740,866
Pennsylvania................................................. 584,005
Michigan..................................................... 583,534
Wisconsin.................................................... 413,362
---------
Total...................................................... 3,897,641
=========
</TABLE>
The Company's principal line of business is providing telecommunication
services. These services fall into five major classes: local network, network
access, long distance, equipment sales and service, and other. Revenues from
each of these classes over the last three years were as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------
1992 1991 1990
-------- -------- --------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Local Network Services............................ $945,175 $916,302 $871,331
% of Total Revenues............................... 37% 36% 35%
Network Access Services........................... $973,661 $966,500 $964,457
% of Total Revenues............................... 38% 39% 39%
Long Distance Services............................ $332,150 $319,674 $319,577
% of Total Revenues............................... 13% 13% 13%
Equipment Sales and Services...................... $103,607 $127,485 $128,256
% of Total Revenues............................... 4% 5% 5%
Other............................................. $205,449 $175,026 $193,932
% of Total Revenues............................... 8% 7% 8%
</TABLE>
The Company holds franchises, licenses and permits adequate for the conduct
of its business in the territory which it serves.
RATES, REGULATION AND COMPETITION
The Company is subject to regulation by the regulatory bodies of the states
of Illinois, Indiana, Michigan, Ohio, Pennsylvania and Wisconsin as to its
intrastate business operations and by the Federal Communications Commission
(the "FCC") as to its interstate business operations.
FCC and other regulatory actions as well as advances in technology have
expanded the types of products and services available in the marketplace, as
well as the number of alternative service providers. As a result, the Company
faces increasing competition in virtually all aspects of its business.
Specialized communications companies have been successful in some markets in
constructing new systems to bypass the local exchange network. Additional
competition from interexchange carriers as well as wireless and cable TV
companies continues to evolve for both intrastate and interstate
communications.
The GTE Consent Decree, which was issued in connection with the 1983
acquisition of GTE Sprint (since divested) and GTE Spacenet, prohibits GTE's
domestic telephone operating subsidiaries from providing long distance service
beyond the boundaries of the local access transport area (LATA). This
prohibition restricts their direct provision of long distance service to
relatively short distances. The degree of competition allowed in the intraLATA
market is subject to state regulation. However, regulatory constraints
4
<PAGE>
on intraLATA competition are gradually being relaxed. Some form of intraLATA
competition is authorized in most of the states in which the Company provides
service.
During 1993, GTE continued to introduce new business features and pricing
options. The introduction of Integrated Services Digital Network (ISDN) and
Switched Multimegabit Data Services (SMDS) is specifically targeted at
satisfying the increasing demand for more efficient and effective data
communications vehicles. In 1993, GTE initiated an infrastructure project which
will establish 50 Synchronous Optical (SONET) fiber ring networks in twelve
states to provide access to very high speed digital transmission systems and
self-healing fiber networks.
The Company expects its financial results to benefit from reduced costs and
the introduction of new products and services that will result in the increased
usage of its telephone networks. However, it is likely that such improvements
will be offset in part by strategic price reductions and revenue erosion
resulting from increased competition.
LEGAL MATTERS
The Company, along with many other corporations, has been named as a
potentially responsible party at a number of "Superfund Sites"--sites, lawfully
used in the past, but now determined to require remediation. Additionally,
operations of the Company have been subjected to new and increasingly stringent
environmental requirements. While the Company's annual expenditures for site
cleanups and environmental compliance have not been material, they are
increasing. By way of illustration, these increasing costs include the
Company's share of cleanup expenses for Superfund Sites, outlays required to
keep existing operations in compliance with environmental regulations and an
underground storage tank replacement program.
Although the complexity of environmental regulations, and the widespread
imposition of multi-party joint and several liabilities at Superfund Sites,
makes it difficult to assess the Company's share of liability, management
believes it has made adequate provision in its financial statements.
There are no pending legal proceedings which would have a material adverse
impact on the Company's financial condition or results of operations.
EMPLOYEES
At September 30, 1993, the Company had 18,404 employees. In 1992, agreements
were reached on one contract with the International Association of Machinists
and Aerospace Workers, four contracts with the International Brotherhood of
Electrical Workers ("IBEW"), and two contracts with the United Steelworkers of
America. In 1993, agreements were reached on one contract with the
Communications Workers of America ("CWA") and on four contracts with the IBEW,
one contract with the CWA expired and is being renegotiated, and one contract
with the Bakers, Confectioners and Chocolate Workers ("BCCW") expired. The
Company reached agreement with the BCCW in early 1994.
PROPERTIES
The Company's property consists of network facilities (80%), company
facilities (14%), customer premises equipment (3%) and other (3%). From January
1, 1988 to December 31, 1992, the Company made gross property additions in the
amount of $2.8 billion and property retirements of $1.4 billion. Substantially
all of the Company's property is subject to liens securing long-term debt. In
the opinion of management, the Company's telephone plant is substantially in
good repair.
5
<PAGE>
RECENT DEVELOPMENTS
The Company announced on January 13, 1994 that its results for the fourth
quarter of 1993 will include a one-time pre-tax restructuring charge of $374.6
million related primarily to the implementation of its re-engineering plan over
the next three years. The restructuring charge will reduce fourth quarter and
full year net income by $230.7 million.
The re-engineering plan will redesign and streamline processes in order to
improve customer-responsiveness and product quality, reduce the time necessary
to introduce new products and services and further reduce costs. The re-
engineering plan includes $148.8 million to upgrade or replace existing
customer service and administrative systems and enhance network software,
$169.4 million for employee separation benefits associated with workforce
reductions and $45.6 million primarily for the consolidation of facilities and
operations and other related costs. The charge for employee separation benefits
includes $84.9 million related to the recognition of previously deferred
postretirement health and life insurance costs for separating employees.
USE OF PROCEEDS
The net proceeds from the offering and sale of the New Debentures, exclusive
of accrued interest, will be applied toward the payment of short-term
borrowings incurred in connection with the redemption on November 15, 1993 of
the following series of the Company's first mortgage bonds:
<TABLE>
<CAPTION>
ORIGINAL OUTSTANDING TOTAL PRINCIPAL
INTEREST MATURITY PRINCIPAL AMOUNT PREMIUM PAID AND PREMIUM
RATE DATE AT REDEMPTION AT REDEMPTION AT REDEMPTION
- -------- -------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
9.250% 06/01/05 $ 29,990,000 $ 938,687 $ 30,928,687
9.375% 08/01/05 39,472,000 1,330,206 40,802,206
9.250% 10/01/05 34,934,000 1,226,183 36,160,183
9.000% 06/01/06 40,000,000 1,364,000 41,364,000
9.000% 05/15/16 50,000,000 2,690,000 52,690,000
9.375% 06/01/16 80,000,000 4,488,000 84,488,000
9.125% 08/01/00 17,000,000 312,800 17,312,800
9.000% 12/01/00 25,000,000 542,500 25,542,500
------------ ----------- ------------
$316,396,000 $12,892,376 $329,288,376
============ =========== ============
</TABLE>
At September 30, 1993, the Company had short-term borrowings of $271,587,000
at an annual average interest rate of 3.10%. The balance of the funds required
in connection with such redemption was obtained primarily from internal sources
and short-term borrowings.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE
MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, ----------------------------
1993(A) 1992 1991 1990 1989 1988
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges (Unaudited)(b)........... 4.60 5.09 4.12 3.94 4.19 4.37
</TABLE>
- --------
(a) Reflects increased operating expenses related to the adoption, effective
January 1, 1993, of Statement of Financial Accounting Standards (SFAS) No.
106 "Employers' Accounting for Postretirement Benefits Other than Pensions"
and a one-time charge associated with the enhanced early retirement and
voluntary separation programs completed during the second quarter of 1993.
Excluding these items, the ratio of earnings to fixed charges for the nine
months ended September 30, 1993 would have been 4.88.
(b) Computed as follows: (1) "earnings" have been calculated by adding income
taxes and fixed charges to income from continuing operations; (2) "fixed
charges" include interest expense and the portion of rentals representing
interest.
6
<PAGE>
SELECTED FINANCIAL DATA
Set forth below is certain selected financial data regarding the Predecessor
Corporation, Contel of Illinois, Inc., Contel of Indiana, Inc., Contel of
Pennsylvania, Inc. and the Company. The selected financial data for the
Predecessor Corporation does not reflect the Midwest Transfer.
<TABLE>
<CAPTION>
1992 1991(a) 1990 1989 1988
---------- ---------- ---------- ---------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Predecessor Corporation:
Operating Revenues...... $2,461,347 $2,390,016 $2,352,312 $2,348,708 $2,190,305
Net Income.............. 371,557 282,994 270,728 281,702 283,889
Total Assets............ 5,555,033 5,244,060 4,976,639 4,880,939 4,730,744
Long-term Obligations
and Preferred Stock,
Subject to Mandatory
Redemption............. 1,421,069 1,445,349 1,242,407 1,267,909 1,293,675
Contel of Illinois,
Inc.:
Operating Revenues...... $ 122,601 $ 130,969 $ 135,041 $ 125,885 $ 125,858
Net Income.............. 13,568 13,525 16,085 16,090 19,318
Total Assets............ 222,277 241,456 223,567 219,015 213,881
Long-term Obligations... 38,206 49,775 54,410 39,525 41,463
Contel of Indiana, Inc.:
Operating Revenues...... $ 101,179 $ 100,623 $ 105,628 $ 96,109 $ 92,379
Net Income.............. 14,218 12,849 15,136 12,529 12,441
Total Assets............ 180,159 174,968 172,733 170,072 168,999
Long-term Obligations... 13,686 16,925 31,408 36,618 38,005
Contel of Pennsylvania,
Inc.:
Operating Revenues...... $ 58,291 $ 54,923 $ 57,283 $ 52,518 $ 51,128
Net Income.............. 5,502 4,049 6,520 5,976 5,330
Total Assets............ 94,836 102,694 94,470 92,840 90,776
Long-term Obligations... 17,292 25,251 30,834 27,656 28,140
The Company:
Operating Revenues...... $2,560,042 $2,504,987 $2,480,553 $2,461,450 $2,306,040
Net Income.............. 369,542 291,837 282,221 293,291 295,702
Total Assets............ 5,679,570 5,385,303 5,100,667 4,991,767 4,825,992
Long-term Obligations
and Preferred Stock,
Subject to Mandatory
Redemption............. 1,387,072 1,434,209 1,255,781 1,266,109 1,294,480
</TABLE>
- --------
(a) The 1991 net income includes one time costs of $9.2 million, $3.0 million,
$4.5 million, $2.1 million and $17.1 million for the Predecessor
Corporation, Contel of Indiana, Inc., Contel of Illinois, Inc., Contel of
Pennsylvania, Inc. and the Company, respectively, related to costs incurred
for the merger of GTE and Contel Corporation which was consummated on March
14, 1991.
Per share information is omitted since each of the above corporation's Common
Stock is 100% owned, directly or indirectly, by GTE. Market values of the
Preferred Stock of the Predecessor Corporation and the Company are also omitted
because there is no established public trading market for the Preferred Stock
and price quotations are therefore generally unavailable.
7
<PAGE>
THE NEW DEBENTURES
The New Debentures are to be issued as a new series of the Company's
Debentures under an Indenture dated as of January 1, 1994 (the "Indenture"),
between the Company and The First National Bank of Chicago, as Trustee (the
"Trustee"). By resolution of the Board of Directors of the Company specifically
authorizing the New Debentures (the "Board Resolution"), the Company will
designate the title of the series, aggregate principal amount, date or dates of
maturity, dates for payment and rate of interest, redemption dates, prices,
obligations and restrictions, if any, and any other terms with respect to such
series. The following summary does not purport to be complete and is subject in
all respects to the provisions of, and is qualified in its entirety by express
reference to, the cited Articles and Sections of the Indenture and the Board
Resolution, which are filed as exhibits to the Registration Statement.
FORM AND EXCHANGE
The New Debentures are to be issued in registered form only in denominations
of $1,000 and integral multiples thereof and will be exchangeable for New
Debentures of other denominations of a like aggregate principal amount without
charge except for reimbursement of taxes, if any. (BOARD RESOLUTION)
MATURITY, INTEREST AND PAYMENT
The New Debentures will mature February 15, 1999. Interest will be payable
semi-annually on February 15 and August 15, commencing August 15, 1994, to the
persons in whose names the New Debentures are registered at the close of
business on the February 1 or August 1, as the case may be, preceding such
interest payment date, subject to certain exceptions provided for in the
Indenture. (BOARD RESOLUTION)
REDEMPTION
The New Debentures will not be redeemable prior to maturity. (BOARD
RESOLUTION)
RESTRICTIONS
The New Debentures will not be secured. The Indenture provides, however, that
if the Company shall at any time mortgage or pledge any of its property, the
Company will secure the New Debentures, equally and ratably with the other
indebtedness or obligations secured by such mortgage or pledge, so long as such
other indebtedness or obligations shall be so secured. There are certain
exceptions to the foregoing, among them that the Debentures need not be
secured:
(i) in the case of (a) purchase money mortgages, (b) conditional sales
agreements or (c) mortgages existing at the time of purchase, on property
acquired after the date of the Indenture;
(ii) with respect to certain deposits or pledges to secure the
performance of bids, tenders, contracts or leases or in connection with
workmen's compensation and similar matters;
(iii) with respect to mechanics' and similar liens in the ordinary course
of business;
(iv) with respect to the Company's first mortgage bonds outstanding on
the date of the Indenture, issued and secured by the Company and its
predecessors in interest under various security instruments, all of which
have been assumed by the Company (collectively, the "First Mortgage
Bonds"), and any replacement or renewal (without increase in principal
amount or extension of maturity date) of such outstanding First Mortgage
Bonds;
(v) with respect to First Mortgage Bonds which may be issued by the
Company in connection with the consolidation or merger of the Company with
or into certain affiliates of the Company in exchange for or otherwise in
substitution for long-term senior indebtedness of any such affiliate
("Affiliate Debt") which by its terms (x) is secured by a mortgage on all
or a portion of the property of such affiliate, (y) prohibits long-term
senior secured indebtedness from being incurred by such affiliate, or a
successor thereto, unless the Affiliate Debt shall be secured equally and
ratably with such long-term senior secured indebtedness or (z) prohibits
long-term senior secured indebtedness from being incurred by such
affiliate; or
8
<PAGE>
(vi) with respect to indebtedness required to be assumed by the Company
in connection with the merger or consolidation of certain affiliates of the
Company with or into the Company. (SECTION 4.05)
The Indenture does not limit the amount of debt securities which may be
issued or the amount of debt which may be incurred by the Company. (SECTION
2.01) However, while the restriction in the Indenture described above would not
afford the holders of the New Debentures protection in the event of a highly
leveraged transaction in which unsecured indebtedness was incurred, the
issuance of most debt securities by the Company, including the New Debentures,
does require state regulatory approval (which may or may not be granted). In
addition, in the event of a highly leveraged transaction in which secured
indebtedness was incurred, the above restriction would require the New
Debentures to be secured equally and ratably with such secured indebtedness,
subject to the exceptions described above. It is unlikely that a leveraged
buyout initiated or supported by the Company, the management of the Company or
an affiliate of either party would occur because all of the common stock of the
Company is owned by GTE, which has no intention of selling its ownership in the
Company.
MODIFICATIONS OF INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debentures of any series at the time outstanding and
affected by such modification, to modify the Indenture or any supplemental
indenture affecting that series of the Debentures or the rights of the holders
of that series of Debentures. However, no such modification shall (i) extend
the fixed maturity of any Debenture, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce
any premium payable upon the redemption thereof, without the consent of the
holder of each Debenture so affected, or (ii) reduce the aforesaid percentage
of Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of each holder of Debentures then
outstanding and affected thereby. (SECTION 9.02)
The Company and the Trustee may execute, without the consent of any holder of
Debentures, any supplemental indenture for certain other usual purposes
including the creation of any new series of Debentures. (SECTIONS 2.01, 9.01
and 10.01)
EVENTS OF DEFAULT
The Indenture provides that the following described events constitute "Events
of Default" with respect to each series of the Debentures thereunder: (a)
failure for 30 business days to pay interest on the Debentures of that series
when due; (b) failure to pay principal or premium, if any, on the Debentures of
that series when due, whether at maturity, upon redemption, by declaration or
otherwise, or to make any sinking fund payment with respect to that series; (c)
failure to observe or perform any other covenant (other than those specifically
relating to another series) in the Indenture for 90 days after notice with
respect thereto; or (d) certain events in bankruptcy, insolvency or
reorganization. (SECTION 6.01)
The holders of a majority in aggregate outstanding principal amount of any
series of the Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee for that
series. (SECTION 6.06) The Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of any particular series of the
Debentures may declare the principal due and payable immediately on default
with respect to such series, but the holders of a majority in aggregate
outstanding principal amount of such series may rescind and annul such
declaration and waive the default if the default has been cured and a sum
sufficient to pay all matured installments of interest and principal and any
premium has been deposited with the Trustee. (SECTION 6.01)
The holders of a majority in aggregate outstanding principal amount of any
series of the Debentures may, on behalf of the holders of all the Debentures of
such series, waive any past default except a default in
9
<PAGE>
the payment of principal, premium, if any, or interest. (SECTION 6.06) The
Company is required to file annually with the Trustee a certificate as to
whether or not the Company is in compliance with all the conditions and
covenants under the Indenture. (SECTION 5.03)
CONCERNING THE TRUSTEE
The Trustee, prior to an Event of Default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after the occurrence
of an Event of Default, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his own affairs. (SECTION 7.01)
Subject to such provision, the Trustee is under no obligation to exercise any
of the powers vested in it by the Indenture at the request of any holders of
Debentures, unless offered reasonable security or indemnity by such security
holders against the costs, expenses and liabilities which might be incurred
thereby. (SECTION 7.02) The Trustee is not required to expend or risk its own
funds or incur personal financial liability in the performance of its duties if
the Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it. (SECTION 7.01)
EXPERTS AND LEGAL OPINIONS
The financial statements and schedules included as an exhibit to the
Company's Current Report on Form 8-K dated September 28, 1993, as well as the
financial statements and schedules included or incorporated by reference in the
Registration Statement on Form S-4 (File No. 33-55704) of the Company, each of
which is incorporated by reference in this Prospectus, have been audited by
Arthur Andersen & Co., independent public accountants, as indicated in their
reports with respect thereto, and are incorporated herein in reliance upon the
authority of said firm as experts in giving said reports. Reference is made to
said reports on financial statements, which include an explanatory paragraph
with respect to the change in the method of accounting for income taxes in 1992
as discussed in Note 1 to the financial statements. Arthur Andersen & Co. has
audited the financial statements of the Company and the Predecessor Corporation
since their respective incorporations. For the periods presented in the
Company's Current Report on Form 8-K dated September 28, 1993, which is
incorporated by reference herein, there have been no changes in or
disagreements with the Company's independent public accountants on accounting
and financial disclosure.
The statements of law and legal conclusions under "The New Debentures" have
been reviewed by Dale E. Sporleder, Esq., Area Vice President-General Counsel
and Secretary of the Company, and are included upon his authority as an expert.
Certain legal matters in connection with the New Debentures will be passed upon
for the Company by Mr. Sporleder, and for the underwriters by Milbank, Tweed,
Hadley & McCloy of New York, New York.
10
<PAGE>
UNDERWRITING
The several Underwriters named below (the "Underwriters") have entered into a
Purchase Agreement, dated February 16, 1994, with the Company (the "Purchase
Agreement") whereby they have severally agreed to purchase the respective
principal amounts of the New Debentures indicated below from the Company,
subject to the terms and conditions of the Purchase Agreement, the form of
which is filed as an exhibit to the Registration Statement.
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
<S> <C>
Kidder, Peabody & Co. Incorporated .......................... $130,000,000
Daiwa Securities America Inc. ................................ 25,000,000
Goldman, Sachs & Co. ......................................... 25,000,000
Smith Barney Shearson Inc. ................................... 20,000,000
------------
Total................................................ $200,000,000
============
</TABLE>
The Purchase Agreement provides that the Underwriters are obligated to
purchase all of the New Debentures if any are purchased. In the event of a
default of one or more of the Underwriters involving not more than 10% of the
aggregate principal amount of the New Debentures offered for sale, the
nondefaulting Underwriters would be required to purchase the New Debentures
agreed to be purchased by such defaulting Underwriter or Underwriters. In the
event of a default in excess of 10% of the aggregate principal amount of the
New Debentures, the Company may, at its option, sell less than all the New
Debentures offered.
The Company has been advised by the several Underwriters that the several
Underwriters propose to offer the New Debentures to the public at the offering
price set forth on the cover page of this Prospectus and to certain dealers at
such price less a concession not in excess of 0.15% of the principal amount of
the New Debentures, and that the Underwriters and such dealers may reallow a
discount of not in excess of 0.125% of the principal amount of the New
Debentures to other dealers. The public offering price and the concession and
discount to dealers may be changed by the Underwriters after the initial public
offering and other selling terms may from time to time be varied by the
Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
11
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALES MADE HEREUNDER SHALL
UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. NO DEALER, SALESMAN OR
ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFER CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFOR-
MATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING BY THE COMPANY OR ANY DEALER IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
STATEMENT OF AVAILABLE INFORMATION......................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 2
THE COMPANY................................................................ 3
RECENT DEVELOPMENTS........................................................ 6
USE OF PROCEEDS............................................................ 6
RATIO OF EARNINGS TO FIXED CHARGES......................................... 6
SELECTED FINANCIAL DATA.................................................... 7
THE NEW DEBENTURES......................................................... 8
EXPERTS AND LEGAL OPINIONS................................................. 10
UNDERWRITING............................................................... 11
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$200,000,000
LOGO - GTE NORTH INCORPORATED
5 1/2% DEBENTURES
SERIES B, DUE 1999
----------------
PROSPECTUS
----------------
KIDDER, PEABODY & CO.
INCORPORATED
DAIWA SECURITIES AMERICA INC.
GOLDMAN, SACHS & CO.
SMITH BARNEY SHEARSON INC.
DATED FEBRUARY 16, 1994
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment
to Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, in the City of Westfield, State of Indiana, on the
16th day of February, 1994.
GTE NORTH INCORPORATED
(Registrant)
By: EARL A. GOODE
-----------------------------
Earl A. Goode
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
Registration Statement is signed below by the following persons in the
capacities and on the dates indicated.
EARL A. GOODE )
- ---------------------------------- )
Earl A. Goode President and )
Director )
(Principal Executive )
Officer) )
)
)
GERALD K. DINSMORE )
- ---------------------------------- )
Gerald K. Dinsmore Vice President )
- Finance ) February 16, 1994
(Principal Financial )
Officer) )
)
WILLIAM M. EDWARDS III )
- ---------------------------------- )
William M. Edwards III Controller )
(Principal Accounting )
Officer) )
)
KENT B. FOSTER )
- ---------------------------------- )
Kent B. Foster Director )
II-1
<PAGE>
EARL A. GOODE )
- ------------------------------- )
Earl A. Goode Director )
)
)
MICHAEL B. ESSTMAN )
- ------------------------------- )
Michael B. Esstman Director )
)
)
THOMAS W. WHITE )
- ------------------------------- ) February 16, 1994
Thomas W. White Director )
)
)
GERALD K. DINSMORE )
- ------------------------------- )
Gerald K. Dinsmore Director )
)
)
RICHARD M. CAHILL )
- ------------------------------- )
Richard M. Cahill Director )
II-2
