SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-4996-2
ALLTEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 34-0868285
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Allied Drive, Little Rock, Arkansas 72202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (501) 661-8000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock New York and Pacific
$2.06 No Par Cumulative Convertible
Preferred Stock New York and Pacific
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. (X)
Aggregate market value of voting stock held by non-affiliates as of
January 31, 1994 - $ 5,228,787,092
Common shares outstanding, January 31, 1994 - 187,579,806
DOCUMENTS INCORPORATED BY REFERENCE
Document Incorporated Into
Portions of the annual report to stockholders
for the year ended December 31, 1993 Parts I, II and IV
Proxy statement for the 1994 annual meeting
of stockholders Part III
The Exhibit Index is located on pages 37 to 40.
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ALLTEL CORPORATION
Form 10-K
CROSS-REFERENCE SHEET
Page Reference
Form Annual Proxy
10-K Report Statement
Part I
Item 1 Business 1 - -
Item 2 Properties 16 - -
Item 3 Legal Proceedings 17 - -
Item 4 Submission of Matters to
Vote of Security Holders 17 - -
Item 10(b) Executive Officers of Registrant 17 - -
Part II
Item 5 Market for the Registrant's - 35, 37, -
Common Equity and Related 40 and
Stockholder Matters inside back
cover page
Item 6 Selected Financial Data - 30 -
Item 7 Management's Discussion and - 25-28 -
Analysis of Financial Condition
and Results of Operations
Item 8 Financial Statements and - 29, 31-43 -
Supplementary Data
Item 9 Changes in and Disagreements 19 - -
with Accountants on Accounting
and Financial Disclosure
Part III
Item 10(a) Directors of the Registrant - - 1-6
Item 11 Executive Compensation - - 10-17
Item 12 Security Ownership of Certain - - 7-8
Beneficial Owners and
Management
Item 13 Certain Relationships and - - 24
Related Transactions
Part IV
Item 14 Exhibits, Financial Schedules 20-21 - -
and Reports on Form 8-K
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
THE COMPANY
GENERAL
ALLTEL Corporation ("ALLTEL" or the "Company"), incorporated in June 1960
under the laws of Ohio as Mid-Continent Telephone Corporation, changed its
name to ALLTEL Corporation in October 1983. During 1990, the Company
changed its state of incorporation to Delaware. ALLTEL is a diversified
telecommunications and information services company. The Company provides
local and network access services to customers throughout 22 states. The
Company owns subsidiaries or investments that provide cellular telephone,
wide-area paging and fiber optic-based long-distance telephone service.
Information processing management services and advanced applications
software are provided to the financial, healthcare and telecommunications
industries by the Company's information services subsidiaries.
Telecommunications products and electronic and electric wire and cable are
warehoused and sold by the Company's distribution subsidiaries. In
addition, the Company publishes telephone directories and provides cable
television service to more than 17,000 customers.
ACQUISITIONS
Effective November 1, 1993, the Company and GTE Corporation completed an
exchange of telephone service areas in several states. ALLTEL exchanged
approximately 95,000 access lines in Illinois, Indiana and Michigan and $443
million in cash for GTE's Georgia telephone operations, which serve
approximately 320,000 access lines.
In October 1993, the Company completed its merger with TDS Healthcare
Systems Corporation ("TDS"). TDS is a leading provider of comprehensive
patient care and healthcare enterprise information systems serving more than
200 hospitals in the United States, Canada and Europe.
In October 1993, ALLTEL Publishing Corporation ("ALLTEL Publishing")
completed its purchase of GTE Directories Service Corporation's ("GTE
Directories") independent publishing business which includes contracts with
more than 125 independent telephone companies across the country.
During 1993, ALLTEL Mobile Communications, Inc. ("ALLTEL Mobile") acquired a
100% interest in one Georgia Rural Service Area ("RSA") which has a
population of approximately 145,000. In addition, ALLTEL Mobile acquired
interests in two other Georgia RSA's and increased its ownership in one
Texas RSA and one Mississippi RSA.
At December 31, 1992, ALLTEL Mobile had a transaction pending to acquire an
additional 20% interest in the Ft. Smith, Ark. Metropolitan Statistical Area
("MSA"). This transaction was completed during the first quarter of 1993
and increased ALLTEL Mobile's interest in the Ft. Smith MSA to 80%.
On December 31, 1992, ALLTEL Mobile acquired a 60% interest and a 90%
interest in the Ft. Smith, Ark. and Fayetteville, Ark. MSAs, respectively.
The Ft. Smith MSA has a population of approximately 219,000 and the
Fayetteville MSA has a population of approximately 211,000.
1
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
THE COMPANY (continued)
ACQUISITIONS (continued)
In December 1992, the Company acquired SLT Communications, Inc. ("SLT").
SLT serves approximately 42,000 telephone customers primarily in suburban
Houston. It also has approximately 328,000 cellular "pops," including 2.34%
ownership in the Houston, Galveston and Beaumont, Texas MSA, a 1% interest
in the Little Rock, Ark. MSA, and has interest in four Texas RSA markets.
In addition, SLT serves 6,400 cable television subscribers and owns
one-third of Metropolitan Houston Paging Services, one of the largest paging
networks in Texas, serving nearly 70,000 subscribers.
During 1992, ALLTEL Mobile increased its ownership to 100% in the
Springfield, Mo. and Charlotte, N.C. MSAs, to 80% in the Savannah, Ga. MSA
and to 64% in the Little Rock, Ark. MSA.
In February 1992, the Company acquired Computer Power, Inc. ("CPI"), the
nation's largest provider of software and processing services to the
mortgage industry. CPI has a comprehensive set of proprietary software
systems which includes the Mortgage Servicing Package, Residential Loan
Inventory Control Package, the Residential Loan Production Control Package,
and a number of related systems as well as consulting, training, portfolio
conversion and other services.
During 1992, ALLTEL Mobile purchased an additional 42% interest in the
Savannah, Ga., MSA, increasing its total interest to 80%, purchased
operating control of the Ft. Smith and Fayetteville, Ark., MSAs, as well as
additional interests in three RSAs in Arkansas and Oklahoma, one Missouri
RSA, and three Alabama RSAs.
In 1991, the Company acquired Missouri Telephone Company. Missouri
Telephone Company serves approximately 20,000 customer access lines and
2,600 cable television customers in Missouri. It also has 320,000 cellular
"pops" including 48% ownership in the Springfield, Mo. MSA cellular market
where together with ALLTEL Mobile, the Company now owns a 98% interest.
In early 1991, Systematics Information Services, Inc. ("Systematics")
acquired Systems Limited, an international banking software firm
headquartered in Hong Kong. Systems Limited is a provider of wholesale
banking software.
In January 1991, Systematics completed its acquisition of the cellular
telephone billing and information system software of C-TEC Corporation
("C-TEC"), an independent telecommunications company. In addition,
Systematics signed a long-term outsourcing agreement to manage all of
C-TEC's information processing functions.
In October 1990, Systematics acquired Computer Dynamics, Inc.("CDI"), a
mortgage data processor that services 200,000 loans for financial
institutions in six states. During 1993, these mortgages were transferred
to the CPI system.
2
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
THE COMPANY (continued)
ACQUISITIONS (continued)
In July 1990, Systematics acquired HORIZON Financial Software Corporation
("Horizon") of Orlando, Florida. HORIZON, now operating as Systematics
Mid-Range Systems Division, develops and markets software for mid-sized
community financial institutions using the IBM AS/400/ computer technology.
In May 1990, the Company acquired Systematics headquartered in Little Rock,
Arkansas. Systematics is one of the nation's leading providers of
information processing management services and advanced application software
for the financial services, healthcare and telecommunications industries.
ALLTEL Mobile acquired the remaining 55% of the Aiken, S.C./ Augusta, Ga.
system in 1990, where ALLTEL Mobile already held a 45% interest thereby
increasing its ownership to 100% in 1990 and acquired Kansas Cellular
Telephone Company's 40% interest in the Wichita, Kansas cellular system in
1989.
In April 1989, the Company acquired HWC Distribution Corp. ("HWC"),
headquartered in Houston, Texas. HWC is a supplier of specialty wire and
cable products.
DISPOSITIONS
In 1992, the Company sold substantially all of the assets of Ocean
Technology, Inc. ("OTI"). OTI designed, developed, and manufactured
command, control and communication systems primarily for military use. In
September 1991, the Company completed the sale of all of its natural gas
operations. During 1990, the Company sold Denro, Inc., a manufacturing
subsidiary.
MANAGEMENT
The Company's headquarters and regional offices staff supervise, coordinate
and assist subsidiaries in management activities, investor relations,
acquisitions, corporate planning, insurance and technical research. They
also coordinate the financing program for the entire corporate system.
EMPLOYEES
At December 31, 1993, the Company had 14,864 employees. Some of the
employees of the Company's telephone subsidiaries are part of collective
bargaining units. The Company maintains good relations with all employee
groups.
INDUSTRY SEGMENTS
Financial information about industry segments is included in the Company's
1993 Annual Report to Stockholders, which is incorporated herein by
reference.
3
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS
LOCAL SERVICE
General
The Company's telephone operating subsidiaries provide local service to over
1,576,000 customer lines through 668 exchanges. The telephone operating
subsidiaries also offer facilities for private line, data transmission and
other communications services. In addition, these subsidiaries sell and
lease end user telephone equipment (terminal equipment) as well as
maintenance and protection plans for customer-owned equipment.
Regulation
The Company's telephone operating subsidiaries are subject to regulation by
the utility commissions of the states in which they operate. These
commissions have jurisdiction over various matters including local and
intrastate toll rates, conditions of service, securities issues,
depreciation rates, the encumbering or disposition of public utility
properties and the prescription of a uniform system of accounts. There were
no local rate increases granted to any of the Company's telephone operating
subsidiaries in 1993, nor are there any rate requests currently pending
before regulatory commissions. During 1993, telephone operations were
affected by certain regulatory commission orders designed to reduce earnings
levels. These orders did not materially impact the results of operations of
the Company.
Competition
The Company's telephone subsidiaries provide local telephone service in
their service areas without significant competition from other regulated
carriers. However, ALLTEL is beginning to experience competition in its
territories from alternative telecommunications systems which include
facilities constructed by large end users or by interexchange carriers,
satellite transmission services, cellular communications, cable television
systems, radio-based personal communications services, competitive access
providers and other systems which are capable of completely or partially
bypassing the local telephone facilities. ALLTEL's subsidiaries are also
competing for the sale and leasing of terminal equipment to business and
residential customers as well as for the installation and maintenance of
inside wire and terminal equipment.
4
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS (continued)
ACCESS SERVICES
General
The Company's customers have access to message and private line toll
services through the local exchanges of the Company's telephone operating
subsidiaries. Local exchanges provide toll service and network access for
interexchange telephone traffic to locations outside of the Company's
service areas through connections with other local exchange and
interexchange carriers. These connections permit communications from any
telephone in the ALLTEL system to nationwide locations and to points in most
foreign countries.
Regulation
The Federal Communications Commission ("FCC") authorizes a rate-of-return
("ROR") that telephone companies may earn on interstate services they
provide. Effective January 1, 1991, the FCC replaced rate-of-return
regulation with price cap regulation for the Bell Operating Companies and
GTE Corporation with an optional election for all other companies not
remaining in the National Exchange Carrier Association ("NECA") Common Line
and Traffic Sensitive Pools. The FCC reduced the ROR from 12.0% to 11.25%
for companies remaining under ROR regulation. This 11.25% ROR continued
through 1993 and most likely will continue through 1994. A proceeding to
establish the methodology for prescribing the ROR was initiated in 1992.
This proceeding should result in new rules for setting the ROR sometime in
1994. As of December 31, 1993, certain of the Company's telephone operating
subsidiaries have exited the NECA traffic sensitive and end user tariffs.
Price cap regulation for holding companies, such as ALLTEL, requires all
affiliated operating telephone companies settling on a cost basis to choose
price cap regulation at the same time or all remain under ROR regulation
(with the exception of average schedule affiliates). Price cap regulation
allows for different earnings potential than ROR depending on the
"productivity offset" the company chooses. In addition, companies electing
price cap regulation may make adjustments for the rate of inflation and
exogenous (non-controllable) costs. Price cap regulation is designed to
allow greater pricing flexibility and includes the risk of earnings lower
than under ROR regulation. In 1992, the FCC initiated a rulemaking
proceeding (CC Docket No. 92-135) to address regulatory alternatives for
mid-size and small local exchange carriers. This proceeding resulted in a
set of rules, adopted in September of 1993, that provide for a non price cap
form of incentive regulation for which ALLTEL would be eligible.
Certain states in which the Company operates, either through legislative
changes or by commission actions, have adopted various forms of alternatives
to rate-of-return regulation. However, most of these plans have been
adopted for the Bell Operating Companies and have not been widely used by
commissions in dealing with other telephone companies including the
Company's telephone operating subsidiaries.
5
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS (continued)
ACCESS SERVICES (continued)
Regulation (continued)
To date, the Company has not elected price cap (incentive) regulation, but
is monitoring the activity of the FCC and the states in which the Company
operates telephone companies and will determine the appropriate action
required as these activities develop.
Interexchange carrier charges
The FCC establishes procedures by which interexchange carriers reimburse the
Company's telephone operating subsidiaries for the use of their local
networks to complete long-distance calls. With the exception of ALLTEL New
York, Inc., ALLTEL Carolina, Inc., Oklahoma ALLTEL, Inc., Sugar Land
Telephone Company, ALLTEL Georgia Communications Corp. and Georgia ALLTEL
Telecom Inc., all of the Company's telephone operating subsidiaries
participated in NECA's interstate traffic sensitive tariff and settlements
processes during 1993. All companies, with the exception of ALLTEL Georgia
Communications Corp. and Georgia ALLTEL Telecom Inc., also participated in
NECA's common line tariffs and pools during 1993. As of December 31, 1993,
participation in the NECA revenue distribution ("pooling") process is based
on nationwide average schedules for four of the Company's telephone
operating subsidiaries with the remaining companies settling on actual
costs. Intrastate interlata services are reimbursed to the Company's
telephone operating subsidiaries under arrangements ordered by state
commissions. These arrangements are based on access and can be on a
bill-and-keep or pooled basis. The Company's telephone operating
subsidiaries receive reimbursement for intrastate intralata services through
access or toll based revenue arrangements, once again on either a
bill-and-keep or pooled basis.
Equal access
The Company's telephone operating subsidiaries offer equal access to nearly
90% of their customers. The availability of equal access provides customers
with the opportunity to choose the long-distance company they want to use.
The Company's telephone operating subsidiaries then program their equipment
to allow the customer to use the selected long-distance company by dialing
1, the area code, and a seven-digit telephone number.
Billing and collection
Interstate billing and collection services were previously detariffed as
ordered by the FCC. The Company's telephone operating subsidiaries continue
to provide interstate billing and collection services for interexchange
carriers through various agreements and also provide intrastate billing and
collection services under state tariff arrangements or under contract where
these services are detariffed.
6
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS (continued)
ACCESS SERVICES (continued)
Competition
Long-distance services are provided by several competing companies. One
aspect of competition is the potential bypass of the local exchange
carrier's facilities by large volume toll users. Certain states in which
the Company's telephone subsidiaries operate allow various forms of
intralata competition for select functions or complete intralata service.
There has been no significant measurable effect on the operations of the
Company's telephone subsidiaries as a result of this competition.
The long-range effect of competition on the provision and cost of
telecommunications services and equipment will depend on technological
advances, regulatory actions at both the state and federal levels, court
decisions, and possible future federal and state legislation. The continued
growth of competition may have an effect on the cost of telephone service to
customers and on the telephone revenues of the Company's telephone operating
subsidiaries. The FCC has ordered that the larger (Tier 1) local exchange
carriers provide special transport interconnection for competitive
providers. In addition, an order was released in late 1993, requiring the
same category of companies to tariff switched transport interconnection.
The switched transport interconnection tariffs will become effective in
early 1994.
7
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES
GENERAL
Systematics provides a wide range of information processing services to the
financial services, healthcare and telecommunications industries through
information processing centers that it staffs, equips and operates.
Information processing contracts are generally for a multi-year period.
Systematics' software and services have been developed and improved
continuously over the last 25 years and are designed to fulfill
substantially all of the retail information processing and management
information requirements of financial institutions. Systematics also
markets software worldwide to financial services, healthcare and
telecommunications companies operating their own information processing
departments.
CPI provides data processing and related computer software and systems to
financial institutions originating and/or servicing single family mortgage
loans. CPI's software products and processing services, combined with CPI's
team of mortgage bankers, are intended to offer a cost-effective alternative
to the extensive technical support staff and the enlarged group of mortgage
bankers which would otherwise have to be assembled in-house by each
customer. CPI's on-line systems automate processing functions required in
the origination of mortgage loans, the management of such loans while in
inventory before they are sold in the secondary market, and their subsequent
servicing.
TDS is primarily engaged in the development and marketing of comprehensive
patient centered healthcare enterprise information systems to medium to
large healthcare companies throughout North America and Europe. These
systems are designed to enhance the quality of patient care, control
processing costs and provide substantially all of the information
requirements of its users. Under typical arrangements with hospitals, TDS'
software is licensed under perpetual license arrangements. Software and
hardware maintenance are normally contracted for periods of five to seven
years. Additionally, TDS contracts with its customers to install software
over periods which range from twelve to eighteeen months. Other services
provided by TDS include training, consulting and data processing services.
CUSTOMERS
Systematics' primary market for its financial products and services are the
nation's commercial banks and savings institutions and financial
institutions outside the United States, primarily in Europe and Asia.
Financial software and services are also marketed to mortgage service
companies, credit unions and healthcare companies. Systematics' primary
market for its telecommunications products and services is the top 150
telephone companies and top 50 cellular companies in the United States.
8
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES (continued)
CUSTOMERS (continued)
CPI provides its services primarily to financial institutions originating
and/or servicing single family mortgage loans that have sold the loans in
the secondary market while continuing to service the loans. These
institutions which include 60 of the top 100 servicers of residential
mortgages are located throughout the United States. In total, more than 13
million mortgage loans representing over $1 trillion are processed by CPI's
software.
TDS' primary market for its software products are hospitals with 400 or more
beds. TDS also markets data processing services to smaller healthcare
companies. Many of TDS' customers are large, state funded hospitals which
include a significant number of university hospitals and other large
healthcare providers. TDS clients are located throughout the United States,
Canada and Europe.
COMPETITION
Systematics' competition primarily comes from "in-house" bank information
processing departments and other companies engaged in active competition for
financial institution outsourcing contracts. Numerous large financial
institutions provide information processing for smaller institutions in
their respective geographic areas, along with other companies that perform
such services for small institutions. There are also other companies that
provide information processing services to the telecommunications industry.
CPI's competition comes from "in-house" information processing departments
and from other companies that offer information processing services to the
mortgage banking industry. CPI competes in its business by providing a high
level of service and support.
TDS' competition primarily comes from other companies that provide
comprehensive integrated hospital information systems and from companies
which offer solutions for individual departments within the respective
healthcare enterprises.
The information services subsidiaries substantially rely upon and vigorously
enforce contract and trade secret laws and internal non-disclosure
safeguards to protect the proprietary nature of their computer software.
9
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES (continued)
REGULATION AND EXAMINATION
Systematics and CPI are regulated by the federal agencies that have
supervisory authority over banking, thrift, and credit union operations.
Systematics is also classified as one of twelve national vendors that, as a
result of their market share, process a significant portion of the financial
industry assets. These industry leaders are also examined by the federal
Financial Institutions Examination Council on an ongoing basis.
Systematics' and CPI's management practices, policies, procedures, standards
and overall financial condition are components of these reviews. In
addition to these corporate examinations, Systematics' individual processing
sites are examined, as if they were departments of their respective clients,
by federal and state regulators, as well as, the clients' internal audit
departments and their independent auditing firms. The same standards of
performance are applied to those information processing centers as are
applied to the client financial institutions. Reports of Systematics' and
CPI's data center performance are furnished to the Board of Directors of
Systematics and to the Board of Directors of the examined client. The
supervisory agencies include applicable state banking departments, the
Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the
Office of the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System and the National Credit Union Administration.
Systematics' and CPI's processing contracts include a commitment to install
all necessary changes in its computer software that are required by changes
in regulations.
CPI operates transmitters at the network's information processing facility
hub and operates very small aperture technology ("VSAT") earth stations at
numerous customer locations. Prior to initiation, construction or operation
of the transmitters used in a VSAT satellite network, operators of these
transmitters such as CPI are required by the Communications Act of 1934 to
be authorized by the FCC. The FCC grants licenses to VSAT operators for a
predetermined number of earth stations that may be placed at unspecified
locations in the domestic United States. CPI has FCC authorization to
operate its domestic earth station satellite network, consisting of one hub
located in Jacksonville, Florida and various 1.8m and 2.4m VSAT's.
TDS is not specifically regulated by any federal or state healthcare
agency. However, its software must meet all federal and state reporting
requirements of its customers, including Medicare, Medicaid and other state
sponsored programs.
10
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES (continued)
PRODUCT DEVELOPMENT AND SUPPORT
In the past five years, the information services subsidiaries have spent
approximately $113 million ($35.6 million in 1993) on IBM mainframe COBOL
software design and development, or an average of 5.4% of their total
information services operating revenues in those years. One of the
information services subsidiaries has also begun to develop products which
will be utilized in a UNIX based environment. Changes in regulatory
requirements of both state and federal authorities, increasing competition
and the development of new products and markets create the need to
continually update or modify existing software and systems offered to
customers. The information services subsidiaries intend to continue to
maintain, improve, and expand the functions and capabilities of their
software products over the next several years.
OTHER
In 1993, Systematics signed a long-term agreement with GTE
Telecommunications Products and Services Group to outsource GTE's cellular
billing operations. This agreement further strengthens Systematics'
position in the telecommunications information processing market.
Within three months of acquiring TDS, Systematics signed its first hospital
outsourcing contract with St. Joseph's Hospital in Parkersburg, West
Virginia. Under terms of the five-year contract, Systematics will assume
all healthcare information systems operations for this 375 bed hospital,
including providing on-site and remote management, software implementation
and support, hardware and network manangement and maintenance.
In 1992, Systematics purchased an equity interest in Treasury Services
Corporation of Santa Monica, California, joining forces with that
organization to provide its financial services industry customers with
better tools for managing profitability and risk.
In 1991, Systematics entered into a worldwide strategic alliance with
Andersen Consulting to jointly pursue financial services clients seeking
outsourcing, software and systems integration expertise.
During 1991, Systematics signed a long-term facilities management contract
to handle all information processing activities for ALLTEL's telephone and
cellular operations. In 1990, Systematics signed a long-term contract with
C-TEC to perform data processing services for their telephone, cable
television and cellular operations. The ALLTEL and C-TEC facilities
management contracts emphasize Systematics' efforts to establish a strong
position in the telecommunications software and services marketplace.
11
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
PRODUCT DISTRIBUTION OPERATIONS
GENERAL
ALLTEL Supply, Inc., ("ALLTEL Supply") with twelve warehouses and nine
counter-sales showrooms across the United States, is a major distributor of
telecommunications equipment and materials. It supplies equipment to
affiliated and non-affiliated telephone companies, business systems
suppliers, railroads, governments and retail and industrial companies. HWC,
with ten warehouses throughout the United States, is one of the nation's
leading suppliers of specialty wire and cable products.
COMPETITION
ALLTEL Supply and HWC (the "Distribution companies") experience substantial
competition throughout their sales territories from other distribution
companies and direct sales by manufacturers. Competition is based primarily
on quality, product availability, service, price and technical assistance.
PRODUCTS
ALLTEL Supply offers more than 35,000 products for sale. In addition,
ALLTEL Supply inventories single and multi-line telephone sets, local area
networks ("LANS"), switching equipment modules, interior cable, pole line
hardware and various other telecommunications supply items.
HWC inventories more than 38,000 reels of specialty wire and cable. These
include shielded and unshielded power cables, flame resistant cables and
high temperature precision engineered cables.
The Distribution companies have not encountered any material shortages or
delays in delivery of products from their suppliers.
12
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
CELLULAR MOBILE TELEPHONE
GENERAL
ALLTEL Mobile provides cellular mobile telephone service in various major
markets throughout the United States. Cellular telephone service combines
the latest advances in telephone, radio and computer technology and is being
marketed to business executives, on-the-move professional people and
individual consumers. As cellular becomes increasing more popular with
broader segments of the population, ALLTEL Mobile has opened several retail
stores, in addition to its traditional sales offices, where customers can
purchase equipment and learn more about wireless services.
BUSINESS
The potential of a cellular telephone market's investment is quantified by
the market's population times the percent of a company's ownership interest
of the cellular operation in that market ("pops"). ALLTEL Mobile owns a
majority interest in cellular operations in 12 MSAs and a minority interest
in 13 other MSAs. This represents 4.4 million cellular pops. ALLTEL Mobile
also owns a majority interest in cellular operations in 47 RSAs and a
minority interest in 23 other RSAs. This represents 3.2 million cellular
pops.
ALLTEL Mobile operates systems in Charlotte, N.C.; Little Rock, Ark.;
Jackson, Miss.; Montgomery, Ala.; Springfield, Mo.; Ocala/Gainesville, Fla.;
Albany, Ga.; Aiken, S.C./Augusta, Ga.; Savannah, Ga.; Ft. Smith, Ark.; and
Fayetteville, Ark.
COMPETITION
Direct competition in the cellular telephone market consists of a
non-wireline carrier licensed to provide cellular telephone service in the
same area. Additionally, non-cellular mobile telephone service may be
available in the licensed area but is not currently considered a direct
competitor within the cellular market.
13
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ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
PAGING
ALLTEL Mobile also operates wide-area computer-driven paging networks as a
complementary service to cellular telephones. In addition to paging
networks in Arkansas and Florida, the Company's acquisition of SLT in 1992
added a one-third ownership in one of the largest paging networks in Texas,
which serves more than 115,000 subscribers.
DIRECTORY PUBLISHING
ALLTEL Publishing currently coordinates advertising, sales, printing and
distribution for 372 telephone directories in 39 states.
In October 1993, ALLTEL Publishing completed its purchase of GTE Directories
independent publishing business, which includes contracts with more than 125
independent telephone companies across the country. Under the terms of the
agreement, ALLTEL Publishing will provide all directory publishing services
including contract management, production and marketing. As subcontractor,
GTE Directories will provide directory sales and printing services through a
separate contract with ALLTEL Publishing.
CABLE TELEVISION SERVICE
The Company provides cable television service to more than 17,000
customers in certain areas of the Navajo Indian Reservation (which covers an
area including parts of New Mexico, Arizona, and Utah), and to residents of
Needles, California, Springfield, Missouri, and central Texas.
NATURAL GAS DISTRIBUTION
In 1991, the Company disposed of all natural gas distribution operations.
MANUFACTURING
During 1992, the Company sold substantially all of the assets of OTI, which
designed, developed, manufactured and marketed products for use in military
command, control and communications systems. During 1990, the Company sold
Denro, Inc., which designs and manufactures microprocessor-based air traffic
control voice switching and control systems. After the sale of OTI, the
Company did not have any manufacturing operations.
14
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INVESTMENTS
LDDS
ALLTEL owns a 11.2% interest in LDDS Communications, Inc. ("LDDS"), a
publicly-held company. The investment was acquired in exchange for the
Company's previous interest in Advance Telecommunications Corporation
("ATC"), which was acquired by LDDS during 1992.
LDDS is one of the largest regional long-distance companies in the United
States and provides long-distance telecommunications services to customers
located in 41 states.
Max E. Bobbitt, ALLTEL's President, is a member of LDDS's Board of Directors.
COMDIAL
ALLTEL owns a 8.1% interest in Comdial Corporation, a producer of quality
telephone sets and key systems. Max E. Bobbitt, ALLTEL's President, is a
member of Comdial's Board of Directors.
CHILLICOTHE
ALLTEL owns a 19.8% interest in Chillicothe Telephone Company, which serves
approximately 27,000 telephone lines in Ohio. Frederick G. Griech,
President of ALLTEL Service Corporation's Northeast Region, and Americo
Cornacchione, Senior Vice President-Accounting and Finance of ALLTEL Service
Corporation's Northeast Region, are members of Chillicothe's Board of
Directors.
OTHER
During 1991, the Company sold its stock in Luz International Limited, a
provider of solar energy, to an investment group in a private transaction.
During 1990, the Company completed the sale of its 14.5% interest in TPI
Enterprises, Inc., which had been a supplier of business communications
systems.
15
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 2. Properties
TELEPHONE PROPERTY
The Company's telephone property in service consists primarily of land and
buildings, central office equipment, telephone lines, telephone instruments
and related equipment. The gross investment by category in telephone
property as of December 31, 1993 was as follows:
(Thousands)
Telephone-
Land, buildings and leasehold
improvements $ 252,402
Central office equipment 1,158,172
Outside plant 1,844,273
Telephone instruments,
related equipment and other 300,173
Total $3,555,020
Standard practices prevailing in the telephone industry are followed by the
Company's telephone operating subsidiaries in the construction and
maintenance of plant and facilities. Certain properties of the Company and
its telephone operating subsidiaries are pledged as collateral for long-term
debt.
OTHER PROPERTY
Other properties of the Company in service consist primarily of property,
plant and equipment used in information services, product distribution and
cellular telephone operations. The total investment by category for these
operations as of December 31, 1993 was as follows:
(Thousands)
Land, buildings and leasehold
improvements $ 97,113
Data processing equipment 195,470
Cellular telephone plant
and equipment 160,896
Furniture, fixtures
and miscellaneous 70,353
Machinery and equipment 2,789
Total $526,621
All of the Company's property is considered to be in sound operating
condition.
16
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 3. Legal Proceedings
The Company is not currently involved in any material pending legal
proceedings, other than routine litigation incidental to its
business, and, to the knowledge of the Company's management, no
material legal proceedings, either private or governmental, are
contemplated or threatened.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to the security holders for a vote during
the fourth quarter of the fiscal year.
Item 10(b). Executive Officers of the Registrant.
Name Age Position
Joe T. Ford 56 Chairman and Chief Executive
Officer
Max E. Bobbitt 49 President
Dennis J. Ferra 40 Senior Vice President - Accounting
and Administration
Francis X. Frantz 40 Senior Vice President - External
Affairs, General Counsel
and Secretary
Tom T. Orsini 43 Senior Vice President - Finance
and Corporate Development
John L. Comparin 41 Vice President - Human Resources
Ronald D. Payne 47 Vice President - Corporate
Communications
Jerry M. Green 46 Treasurer
John M. Mueller 43 Controller
Deborah J. Akins 38 Assistant Treasurer
17
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 10(b). Executive Officers of the Registrant (continued)
There are no arrangements between any officer and any other person pursuant
to which he was selected as an officer. Except for Francis X. Frantz and
John L. Comparin, each of the officers named above has been employed by
ALLTEL or a subsidiary for the last five years. Mr. Frantz joined the
Company in March, 1990 as Senior Vice President and General Counsel. Prior
to joining ALLTEL, Mr. Frantz was a partner in the law firm of Thompson,
Hine, and Flory, in Cleveland, Ohio. Mr. Comparin joined the Company in
February, 1990 as Vice President - Human Resources. Prior to joining
ALLTEL, Mr. Comparin was Director of Human Resources for Maxus Corp.
(formerly Diamond Shamrock Corp.) of Dallas Texas.
FORM 10-K Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
For information pertaining to Markets for ALLTEL Corporation's
Common Stock and Related Shareholder Matters, refer to pages 35,
37, 40 and the inside back cover of ALLTEL's 1993 Annual Report to
Stockholders, which is incorporated herein by reference.
Item 6. Selected Financial Data.
For information pertaining to Selected Financial Data of ALLTEL
Corporation, refer to page 30 of ALLTEL's 1993 Annual Report to
Stockholders, which is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
For information pertaining to Management's Discussion and Analysis
of Financial Condition and Results of Operations of ALLTEL
Corporation, refer to pages 25-28 of ALLTEL's 1993 Annual Report to
Stockholders, which is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
For information pertaining to Financial Statements and
Supplementary Data of ALLTEL Corporation, refer to pages 29 and
31-43 of ALLTEL's 1993 Annual Report to Stockholders, which is
incorporated herein by reference.
18
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part II
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
During the two most recent fiscal years or the subsequent
interim period up to the date of this Form 10-K, there were no
disagreements with the Company's independent certified public
accountants on any matter of accounting principles or
practices, financial statement disclosures or auditing scope
or procedures. In addition, none of the "kinds of events"
described in item 304(a)(1)(v)(A), (B), (C) and (D) of
regulation S-K have occurred.
FORM 10-K PART III
Item 10(a). Directors of the Registrant.
For information pertaining to Directors of ALLTEL Corporation
refer to "Election of Directors" in ALLTEL's Proxy Statement
for its 1994 Annual Meeting of Stockholders, which is
incorporated herein by reference.
Item 10(b). Executive Officers of the Registrant.
For information pertaining to Executive Officers of ALLTEL
Corporation, refer to Part I, pages 17 and 18 of this Report.
Item 11. Executive Compensation.
For information pertaining to Executive Compensation, refer to
pages 10 through 17 in ALLTEL's Proxy Statement for its 1994
Annual Meeting of Stockholders, which is incorporated herein
by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
For information pertaining to beneficial ownership of ALLTEL
securities, refer to "Security Ownership of Certain Beneficial
Owners and Management" in ALLTEL's Proxy Statement for its
1994 Annual Meeting of Stockholders, which is incorporated
herein by reference.
19
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part IV
Item 13. Certain Relationships and Related Transactions.
For information pertaining to Certain Relationships and Related
Transactions, refer to "Management Compensation" in ALLTEL's
Proxy Statement for its 1994 Annual Meeting of Stockholders,
which is incorporated herein by reference.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as a part of this report:
1. Financial Statements:
The following Consolidated Financial Statements of ALLTEL
Corporation and subsidiaries, included in the annual
report of ALLTEL Corporation to its stockholders for the
year ended December 31, 1993, are incorporated herein by
reference:
Annual Report
Page Number
Report of Independent Certified Public
Accountants 29
Consolidated Balance Sheets - December 31, 1993
and 1992 32-33
Consolidated Statements of Income - for the
years ended December 31, 1993, 1992, and 1991 31
Consolidated Statements of Shareholders' Equity
- for the years ended December 31, 1993,
1992 and 1991 35
Consolidated Statements of Cash Flows
- for the years ended December 31, 1993
1992, and 1991 34
Notes to Consolidated Financial Statements 38-43
Supplementary Information-Business Segment and
Quarterly (Unaudited) Financial Information 36,37
and 43
The Consolidated Financial Statements and Supplementary
Financial Information listed in the above index which are
included in the 1993 Annual Report to Stockholders of
ALLTEL Corporation are hereby incorporated by reference.
20
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(continued):
2. Financial Statement Schedules:
Form 10-K
Page Number
Report of Independent Public
Accountants 23
I. Marketable Securities -
Other Investments 24
V. Property, Plant and Equipment 25-30
VI. Accumulated Depreciation and
Amortization of Property, Plant
and Equipment 31-33
VIII. Valuation and Qualifying Accounts 34
IX. Short-Term Borrowings 35
X. Supplementary Income Statement
Information 36
3. Exhibits:
See "Exhibit Index" located on page 37-40 of this
document.
(b) No reports on Form 8-K were filed during the last quarter
of 1993.
Separate condensed financial statements of ALLTEL Corporation have
been omitted since the Company meets the tests set forth in
Regulation S-X Rule 4-08(e)(3). All other schedules are omitted
since the required information is not present or is not present in
amounts sufficient to require submission of the schedule, or
because the information required is included in the consolidated
financial statements and notes thereto.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ALLTEL Corporation
Registrant
By /s/ Joe T. Ford
Joe T. Ford, Chairman and Chief Executive Date: February 18, 1994
Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
By /s/ Max E. Bobbitt Date: February 18, 1994
Max E. Bobbitt, President and Director
Joe T. Ford, Chairman, Chief Executive
Officer, and Director
(Principal Executive Officer)
Max E. Bobbitt, President and Director
Dennis J. Ferra, Senior Vice President -
Accounting and Administration
(Principal Accounting Officer)
Tom T. Orsini, Senior Vice President -
Finance and Corporate Development
(Principal Financial Officer)
By /s/ Max E. Bobbitt
Ben W. Agee, Director (Max E. Bobbitt,
Attorney-in-fact)
Alfred E. Campdon, Director
W. W. Johnson, Director Date: February 18, 1994
Emon A. Mahony, Jr., Director
George C. McConnaughey, Director
John H. McConnell, Director
Walter G. Olson, Director
Philip F. Searle, Director
John E. Steuri, Director
Carl H. Tiedemann, Director
Ronald Townsend, Director
William H. Zimmer, Jr., Director
22
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
ALLTEL Corporation:
We have audited in accordance with generally accepted auditing standards,
the financial statements included in ALLTEL Corporation's Annual Report
to shareholders incorporated by reference in this Form 10-K, and have
issued our report thereon dated January 27, 1994. Our audit was made for
the purpose of forming an opinion on those statements taken as a whole.
The schedules on pages 24 through 36 are the responsibility of the
company's management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not a required part of
the basic financial statements. This information has been subjected to
the auditing procedures applied in the audit 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.
As explained in Note 3 to the financial statements, as of December 31,
1993, the Company changed its method of accounting for investments in
conjunction with the adoption of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities."
ARTHUR ANDERSEN & CO.
Little Rock, Arkansas
January 27, 1994
23
<PAGE>
<TABLE>
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS
for the year ended December 31, 1993
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
Amount at
Number of which carried
shares or Market on balance
Description principal amount Cost value sheet (A)
<S> <C> <C> <C> <C>
LDDS Communications, Inc. 6,671,303 $104,082 $321,890 $321,890
All other investments (B) 60,453 60,453
Total $164,535 $382,343
</TABLE>
(A) Securities available-for-sale are carried at fair value with unrealized
gains and losses included as a separate component of shareholders' equity,
net of tax. Investments for which there is no quoted market price readily
determinable are carried at cost.
(B) No other individual investment is greater than 2% of total assets.
24
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (A)
for the year ended December 31, 1993
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
<S> <C> <C> <C> <C> <C>
Telephone plant:
Land $ 15,538 $ 4 $ 103 $ 2,058 (B) $ 16,565
(940)(C)
8 (D)
Buildings and leasehold improvements 210,886 6,536 1,329 35,028 (B) 235,837
(15,544)(C)
260 (D)
Central office equipment 900,998 108,661 46,574 262,896 (B) 1,158,172
(68,941)(C)
1,132 (D)
Station equipment 83,423 4,256 19,467 14,897 (B) 74,636
(8,284)(C)
(189)(D)
Outside plant 1,456,852 98,036 13,316 399,592 (B) 1,844,273
(97,020)(C)
129 (D)
Furniture, fixtures,
vehicles and other 183,822 24,907 9,298 34,446 (B) 225,537
(7,243)(C)
(1,097)(D)
Total telephone plant in service 2,851,519 242,400 90,087 551,188 3,555,020
Plant under construction 73,095 29,154 - 4,807 (B) 105,243
(253)(C)
(1,560)(D)
Total telephone plant $2,924,614 $271,554 $ 90,087 $554,182 $3,660,263
Continued on next page
</TABLE>
25
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT - CONTINUED (A)
for the year ended December 31, 1993
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
<S> <C> <C> <C> <C> <C>
Other plant:
Land $ 14,588 $ 9,750 $ 150 $ 334 (B) $ 24,522
Buildings and leasehold improvements 43,138 27,554 2 1,901 (B) 72,591
Data processing equipment 145,518 58,686 16,746 2,385 (B) 195,470
5,627 (D)
Cellular telephone plant and equipment 109,955 35,832 136 15,245 (B) 160,896
Furniture, fixtures and miscellaneous 45,299 18,118 736 13,233 (B) 70,353
(5,561)(D)
Machinery and equipment 2,815 221 64 (183)(D) 2,789
Total other plant in service 361,313 150,161 17,834 32,981 526,621
Plant under construction 11,464 31,751 5 4,743 (B) 47,953
Total other plant 372,777 181,912 17,839 37,724 574,574
Total property, plant and equipment $3,297,391 $453,466 $107,926 $591,906 $4,234,837
</TABLE>
(A) Depreciation is calculated using primarily the straight-line method.
(B) Property, plant and equipment of companies acquired in 1993.
(C) Property, plant and equipment of companies exchanged in 1993.
(D) Property, plant and equipment transferred between categories and other
miscellaneous transactions.
26
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (A)
for the year ended December 31, 1992
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
<S> <C> <C> <C> <C> <C>
Telephone plant:
Land $ 12,839 $ 2,701 $ 30 $ 28 (C) $ 15,538
Buildings and leasehold improvements 185,733 25,879 1,124 398 (C) 210,886
Central office equipment 846,634 128,335 70,135 (3,836)(C) 900,998
Station equipment 83,382 4,700 6,292 1,633 (C) 83,423
Outside plant 1,378,082 94,180 15,401 (9)(C) 1,456,852
Furniture, fixtures,
vehicles and other 169,240 22,840 8,829 571 (C) 183,822
Total telephone plant in service 2,675,910 278,635 101,811 (1,215) 2,851,519
Plant under construction 73,148 (929) 144 1,020 (C) 73,095
Total telephone plant $2,749,058 $277,706 $101,955 $ (195) $2,924,614
</TABLE>
Continued on next page
27
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT - CONTINUED (A)
for the year ended December 31, 1992
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
<S> <C> <C> <C> <C> <C>
Other plant:
Land $ 12,875 $ 2,085 $ 300 $ (30)(B) $ 14,588
(42)(C)
Buildings and leasehold improvements 38,830 6,506 - (2,085)(B) 43,138
(113)(C)
Data processing equipment 103,459 57,539 15,480 - 145,518
Cellular telephone plant and equipment 79,135 31,260 595 155 (C) 109,955
Furniture, fixtures and miscellaneous 40,362 9,610 4,613 (369)(B) 45,299
309 (C)
Machinery and equipment 9,309 126 96 (1,815)(C) 2,815
(4,709)(B)
Total other plant in service 283,970 107,126 21,084 (8,699) 361,313
Plant under construction 11,793 (171) 158 - 11,464
Total other plant 295,763 106,955 21,242 (8,699) 372,777
Total property, plant and equipment $3,044,821 $384,661 $123,197 $ (8,894) $3,297,391
</TABLE>
(A) Depreciation is calculated using primarily the straight-line method.
(B) Property, plant and equipment of companies sold in 1992.
(C) Property, plant and equipment transferred between categories and other
miscellaneous transactions.
28
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (A)
for the year ended December 31, 1991
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
<S> <C> <C> <C> <C> <C>
Telephone plant:
Land $ 12,693 $ 107 $ - $ 85 (C) $ 12,839
(46)(D)
Buildings and leasehold improvements 176,568 6,384 570 1,775 (C) 185,733
1,576 (D)
Central office equipment 782,007 103,380 47,621 8,934 (C) 846,634
(66)(D)
Station equipment 96,082 5,587 22,256 297 (C) 83,382
3,672 (D)
Outside plant 1,288,546 80,045 13,644 23,143 (C) 1,378,082
(8)(D)
Furniture, fixtures,
vehicles and other 160,737 20,015 11,336 2,063 (C) 169,240
(2,239)(D)
Total telephone plant in service 2,516,633 215,518 95,427 39,186 2,675,910
Plant under construction 48,091 25,733 - (676)(D) 73,148
Total telephone plant $2,564,724 $241,251 $ 95,427 $38,510 $2,749,058
</TABLE>
Continued on next page
29
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT - CONTINUED (A)
for the year ended December 31, 1991
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
<S> <C> <C> <C> <C> <C>
Other plant:
Land $ 5,047 $ 2,955 $ - $ (335)(B) $ 12,875
389 (C)
4,819 (D)
Buildings and leasehold improvements 33,681 8,944 10 (1,754)(B) 38,830
410 (C)
(2,441)(D)
Data processing equipment 87,788 30,549 14,878 - 103,459
Gas distribution plant and equipment 75,802 4,697 108 (80,391)(B) -
Cellular telephone plant and equipment 41,827 36,020 709 2,364 (C) 79,135
(367)(D)
Furniture, fixtures and miscellaneous 31,375 10,278 2,315 (800)(B) 40,362
831 (C)
6,993 (D)
(6,000)(E)
Machinery and equipment 22,796 506 51 1,803 (C) 9,309
(15,745)(D)
Total other plant in service 298,316 93,949 18,071 (90,224) 283,970
Plant under construction 21,871 - 10,180 (55)(B) 11,793
157 (D)
Total other plant 320,187 93,949 28,251 (90,122) 295,763
Total property, plant and equipment $2,884,911 $335,200 $123,678 $(51,612) $3,044,821
</TABLE>
(A) Depreciation is calculated using primarily the straight-line method.
(B) Property, plant and equipment of companies sold in 1991.
(C) Property, plant and equipment of companies purchased in 1991.
(D) Property, plant and equipment transferred between categories and other
miscellaneous transactions.
(E) Write-down to net realizable value of manufacturing property, plant and
equipment.
30
<PAGE>
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
for the year ended December 31, 1993
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Balance at
Beginning Costs and Other Changes End of
Classification of Period Expenses Retirements Add (Deduct) Period
<S> <C> <C> <C> <C> <C>
Allowance for depreciation
of property, plant and
equipment in service:
Telephone plant $1,098,005 $190,572 $ 79,988 $(101,290)(A) $1,359,021
(39,307)(B)
291,029 (C)
Other plant 137,397 62,528 14,580 (59)(B) 199,382
14,096 (C)
Total $1,235,402 $253,100 $ 94,568 $ 164,469 $1,558,403
</TABLE>
(A) Accumulated depreciation of companies exchanged in 1993.
(B) Miscellaneous transfers between plant categories and other.
(C) Accumulated depreciation of companies purchased in 1993.
31
<PAGE>
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
for the year ended December 31, 1992
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Balance at
Beginning Costs and Other Changes End of
Classification of Period Expenses Retirements Add (Deduct) Period
<S> <C> <C> <C> <C> <C>
Allowance for depreciation
of property, plant and
equipment in service:
Telephone plant $1,016,963 $177,185 $101,419 $ 5,276 (B) $1,098,005
Other plant 118,959 46,392 18,930 (8,922)(A) 137,397
(102)(B)
Total $1,135,922 $223,577 $120,349 $ (3,748) $1,235,402
</TABLE>
(A) Accumulated depreciation of companies sold in 1992.
(B) Miscellaneous transfers between plant categories and other.
32
<PAGE>
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
for the year ended December 31, 1991
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Balance at
Beginning Costs and Other Changes End of
Classification of Period Expenses Retirements Add (Deduct) Period
<S> <C> <C> <C> <C> <C>
Allowance for depreciation
of property, plant and
equipment in service:
Telephone plant $ 918,312 $173,222 $ 94,544 $ 17,424 (B) $1,016,963
2,549 (C)
Other plant 127,960 38,695 15,516 (31,501)(A) 118,959
1,092 (B)
(1,771)(C)
Total $1,046,272 $211,917 $110,060 $(12,207) $1,135,922
</TABLE>
(A) Accumulated depreciation of companies sold in 1991.
(B) Accumulated depreciation of companies purchased in 1991.
(C) Miscellaneous transfers between plant categories and other.
33
<PAGE>
<TABLE>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Per Adjusted Charged to Charged Balance at
Previous Adjustments Beginning Cost and to Other Deduction End of
Description Report (B) Balance Expense Accounts Describe Period
<S> <C> <C> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts, subscribers,
and others:
For the years ended
December 31, 1993 $ 8,849 $656 $ 9,505 $13,636 $ - $12,375 (A) $10,766
December 31, 1992 $10,961 $10,961 $10,506 $205 $12,823 (A) $ 8,849
December 31, 1991 $ 4,802 $ 4,802 $12,736 $127 $ 6,704 (A) $10,961
</TABLE>
(A) Accounts charged off less recoveries of amounts previously charged off.
(B) Reclassification of amount for companies purchased in 1993.
34
<PAGE>
<TABLE>
SCHEDULE IX - SHORT-TERM BORROWINGS
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E Column F
At End of Period During the Period
Category of Weighted Weighted
Aggregate Average Maximum Average Average
Short-term Interest Amount Amount Interest
Borrowings Balance Rate Outstanding Outstanding (2) Rate (2)
<S> <C> <C> <C> <C> <C>
Short-term Borrowings (1):
for the years ended December 31, 1993 $ - 0.0% $ 4,400 $ 169 6.0%
December 31, 1992 $4,400 6.0% $27,500 $ 3,072 6.4%
December 31, 1991 $5,500 6.5% $ 5,500 $ 3,958 8.7%
</TABLE>
(1) Short-term borrowing consists of notes payable to banks under lines
of credit of certain subsidiaries purchased in 1992.
(2) Based on average daily amounts outstanding.
35
<PAGE>
<TABLE>
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(Dollars in Thousands)
<CAPTION>
Column A Column B Column B Column B
Charged to Costs Charged to Costs Charged to Costs
and Expenses and Expenses and Expenses
For the Year Ended For the Year Ended For the Year Ended
Item December 31, 1993 December 31, 1992 December 31, 1991
<S> <C> <C> <C>
1. Depreciation and amortization of intangible
assets, preoperating costs and similar
deferrals:
Amortization of computer software $17,813 $13,718 $16,148
Amortization of intangible assets 18,451 12,342 12,727
Amortization of extraordinary retirements 448 1,150 853
$36,712 $27,210 $29,728
2. Taxes, other than payroll and income taxes:
Property and franchise taxes $44,160 $40,938 $34,850
Gross receipts tax 12,255 11,085 11,238
Other taxes 1,193 737 1,644
$57,608 $52,760 $47,732
</TABLE>
NOTE: Amounts for items other than those reported have been excluded because
they appear separately in the financial statements or they amount to
less than one percent of total revenue and sales.
36
<PAGE>
EXHIBIT INDEX
Number and Name Page
(3)(a) Amended and Restated Certificate of Incorporation of *
ALLTEL Corporation (incorporated herein by reference to
Exhibit B to Proxy Statement, dated March 9, l990).
(b) By-Laws of ALLTEL Corporation (Exhibit 3(b) to Form SE *
dated February 17, 1993).
(4)(a) Amended and Restated Rights Agreement dated as of *
April 26, l989, between ALLTEL Corporation and
Ameritrust Company N.A. (incorporated herein by
reference to Form 8 dated April 26, l989, filed
with the Commission on April 28, l989).
(b) First Amendment to Amended and Restated Rights *
Agreement dated as of April l6, l990, between
ALLTEL Corporation and Ameritrust Company N.A.
(incorporated herein by reference to Form SE of
ALLTEL Corporation filed with the Commission on
April 23, l990).
(c) The Company agrees to provide to the Commission, upon --
request, copies of any agreement defining rights of
long-term debt holders.
(10)(a)(1) Executive Compensation Agreement and amendments thereto *
by and between the Corporation and Joe T. Ford
(incorporated herein by reference to Exhibit 10(b)
to Form 10-K for the fiscal year ended December 31, 1983).
(a)(2) Modification to Executive Compensation Agreement by and *
between the Corporation and Joe T. Ford effective as of
January 1, 1987 (incorporated herein by reference to
Exhibit 10(b)(2) to Form 10-K for the fiscal year ended
December 31, 1986).
(a)(3) Modification to Executive Compensation Agreement by and *
between ALLTEL Corporation and Joe T. Ford, effective as
of January 1, 1991 (incorporated herein by reference to
Exhibit 10 of ALLTEL Corporation Registration Statement
(No. 33-44736) on Form S-4 dated December 23, 1991).
(a)(4) Split-dollar Life Insurance Agreement by and between *
the Corporation and Joe T. Ford effective as of
January 24, 1990 (incorporated herein by reference
to Exhibit 10(b)(3) to Form 10-K for the fiscal year
ended December 31, 1989).
* Incorporated herein by reference as indicated.
37
<PAGE>
EXHIBIT INDEX, Continued
Number and Name Page
10(b)(1) Executive Compensation Agreement by and between the Cor- *
poration and Max E. Bobbitt effective as of October 29,
1986 (incorporated herein by reference to Exhibit 10(c)(1)
to Form 10-K for the fiscal year ended December 31, 1986).
(b)(2) Modification to Executive Compensation Agreement by and *
between the Corporation and Max E. Bobbitt effective as
of January 1, 1987 (incorporated herein by reference to
Exhibit 10(c)(2) to Form 10-K for the fiscal year ended
December 31, 1986).
(b)(3) Modification to Executive Compensation Agreement by and *
between ALLTEL Corporation and Max E. Bobbitt, effective
as of January 1, 1991 (incorporated herein by reference
to Exhibit 10 of ALLTEL Corporation Registration Statement
(No. 33-44736) on Form S-4 dated December 23, 1991).
(b)(4) Split-dollar Life Insurance Agreement by and between the *
Corporation and Max E. Bobbitt effective as
of May 26, 1989 (incorporated herein by reference to
Exhibit 10(c)(3) to Form 10-K for the fiscal year ended
December 31, 1989).
(c) Executive Compensation Agreement by and between the *
Company and John E. Steuri effective as of April l7,
l990 (incorporated herein by reference to Exhibit B
of ALLTEL Corporation Registration Statement
(No. 33-34495) on Form S-4 dated April 23, 1990).
(d) Directors' Retirement Plan of ALLTEL Corporation (as 74
amended and restated effective January 1, 1994).
(e) Executive Deferred Compensation Plan of ALLTEL 77
Corporation (as amended and restated effective
October 1, 1993).
(f) Deferred Compensation Plan for Directors of ALLTEL 99
Corporation (as amended and restated effective
October 1, 1993).
(g)(l) ALLTEL Corporation 1975 Incentive Stock Option Plan (as *
amended and restated effective July 26, 1988)
(incorporated herein by reference to Exhibit 10(i)
to Form 10-K for the fiscal year ended December 31, 1988).
* Incorporated herein by reference as indicated.
38
<PAGE>
EXHIBIT INDEX, Continued
Number and Name Page
10(g)(2) ALLTEL Corporation l99l Stock Option Plan (incorporated *
herein by reference to Exhibit A to Proxy Statement,
dated March 8, l99l).
(h)(1) Systematics, Inc. 1981 Incentive Stock Option Plan and *
Amendment No. 1 thereto (incorporated herein by
reference to Form S-8 (No. 33-35343) of ALLTEL Corporation
filed with the Commission on June 11, 1990).
(h)(2) Stock Purchase Plan for Employees of Systematics, Inc. *
and Amendment No. 1 thereto (incorporated herein by
reference to Post-effective Amendment No.1 to Form S-4
on Form S-8 (No. 33-34495) of ALLTEL Corporation filed
with the Commission on June 11, 1990).
(i) ALLTEL Corporation Performance Incentive Compensation Plan *
as amended, effective January 1, 1993 (Exhibit 10(i) to
Form SE dated February 17, 1993).
(j) ALLTEL Corporation Long-Term Performance Incentive *
Compensation Plan, as amended and restated effective
January 1, 1993 (Exhibit 10(j) to Form SE dated
February 17, 1993).
(k)(l) ALLTEL Corporation Pension Plan (January 1, 1989 *
Restatement) and Amendment Nos. 1 - 4 thereto
(incorporated herein by reference to Exhibit 10(p)
to Form 10-K for the fiscal year ended December 31, 1989).
(k)(2) Amendments No. 5 through 9 to ALLTEL Corporation Pension *
Plan (incorporated herein by reference to Exhibit 10(m)(2)
to Form 10-K for the fiscal year ended December 31, 1990).
(k)(3) Amendments No. 10 and 11 to ALLTEL Corporation Pension *
Plan (incorporated herein by reference to Exhibit 10 of
ALLTEL Corporation Registration Statement (No. 33-44736)
on Form S-4 dated December 23, 1991).
(k)(4) Amendments No. 12 through 14 to ALLTEL Corporation Pension *
Plan (Exhibit 10(k)(4) to Form SE dated February 17, 1993).
(k)(5) Amendments No. 15 through 18 to ALLTEL Corporation Pension 122
Plan.
(l)(1) ALLTEL Corporation Profit-Sharing Plan and Amendment *
No. 1 thereto (incorporated herein by reference to
Exhibit 10(q) to Form 10-K for the fiscal year ended
December 31, 1987).
(l)(2) Amendment No. 2 to ALLTEL Corporation Profit-Sharing Plan *
(incorporated herein by reference to Exhibit 10(q)(2)
to Form 10-K for the fiscal year ended December 31, 1988).
* Incorporated herein by reference as indicated.
39
<PAGE>
EXHIBIT INDEX, Continued
Number and Name Page
10(l)(3) Amendments No. 3 through 6 to ALLTEL Corporation *
Profit-Sharing Plan (incorporated herein by reference
to Exhibit 10(q)(3) to Form 10-K for the fiscal year
ended December 31, 1989).
(l)(4) Amendments No. 7 and 8 to ALLTEL Corporation Profit- *
Sharing Plan (incorporated by reference to Exhibit 10(n)(4)
to Form 10-K for the fiscal year ended December 31, 1990).
(l)(5) Amendments No. 9 and 10 to ALLTEL Corporation Profit- *
Sharing Plan (incorporated herein by reference to
Exhibit 10 of ALLTEL Corporation Registration
Statement (No. 33-44736) on Form S-4 dated December 23,
1991).
(l)(6) Amendment No. 11 to ALLTEL Corporation Profit-Sharing Plan *
(Exhibit 10(l)(6) to Form SE dated February 17, 1993).
(l)(7) Amendments No. 12 through 16 to ALLTEL Corporation 134
Profit-Sharing Plan.
(m) ALLTEL Corporation Excess Benefit Plan (incorporated *
herein by reference to Exhibit 10(r) to Form 10-K
for the fiscal year ended December 31, 1987).
(n) Amended and Restated ALLTEL Corporation Supplemental *
Medical Expense Reimbursement Plan (incorporated herein
by reference to Exhibit 10(p) to Form 10-K for the fiscal
year ended December 31, 1990).
(11) Statement re computation of per share earnings. 41
(13) Annual report to stockholders for the year ended 46
December 31, 1993. Such report, except for the portions
incorporated by reference herein, is furnished for the
information of the SEC and is not "filed" as part
of this report.
(21) Subsidiaries of the registrant. 42
(23) Consents of experts and counsel. 45
(24) Powers of Attorney. 144
(99)(a) Annual report on Form 11-K for the Stock Purchase Plan --
for Employees of Systematics Information Services, Inc.
and its Affiliates for the year ended December 31, 1993
will be filed by amendment.
(99)(b) Annual report on Form 11-K for the CP National --
Corporation Incentive Thrift Savings Plan for the year
ended December 31, 1993 will be filed by amendment.
* Incorporated herein by reference as indicated.
40
<PAGE>
<TABLE>
EXHIBIT 11
ALLTEL CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(Dollars and Shares in Thousands, except per share amounts)
<CAPTION>
For the Years Ended December 31,
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Net income applicable to common shares $260,439 $226,894 $196,883 $197,249 $175,331
Adjustments for convertible securities:
Interest on convertible debentures
net of tax effect - - - - 241
Dividends paid on convertible
preferred stocks 293 355 566 716 862
Net income applicable to common
shares, assuming conversion of
above securities $260,732 $227,249 $197,449 $197,965 $176,434
Average common shares outstanding
for the year 187,665 185,672 180,007 181,453 174,437
Increase in shares which would result
from conversion of:
Convertible debentures - - - - 1,494
Convertible preferred stocks 755 905 2,921 3,519 1,586
Employee stock options and stock
purchase plans - - - - 40
Average common shares, assuming conversion
of the above securities 188,420 186,577 182,928 184,972 177,557
Earnings per share of common stock:
Primary $1.39 $1.22 $1.09 $1.09 $1.01
Fully-diluted $1.38 $1.22 $1.08 $1.07 $ .99
</TABLE>
Note: Amounts have been restated for mergers accounted for as a
pooling-of-interests, and for the 2-for-1 stock split in 1993.
41
<PAGE>
EXHIBIT 21
ALLTEL Corporation
Subsidiaries of the Registrant
State of
Incorporation
NORTHEAST REGION:
ALLTEL Ohio, Inc. Ohio
The Western Reserve Telephone Company Ohio
ALLTEL Pennsylvania, Inc. Pennsylvania
Brookville Telephone Company Pennsylvania
The Murraysville Telephone Company Pennsylvania
Mountain State Telephone Company West Virginia
ALLTEL New York, Inc. New York
SOUTHERN REGION:
ALLTEL Alabama, Inc. Alabama
ALLTEL Carolina, Inc. North Carolina
ALLTEL Florida, Inc. Florida
ALLTEL Georgia, Inc. Georgia
ALLTEL Georgia Communications Corp. Georgia
ALLTEL Kentucky, Inc. Kentucky
ALLTEL Mississippi, Inc. Mississippi
ALLTEL South Carolina, Inc. South Carolina
ALLTEL Tennessee, Inc. Tennessee
Georgia ALLTEL Telecom Inc. Georgia
Heins Telephone Company North Carolina
Sandhill Telephone Company North Carolina
SOUTHWEST REGION:
ALLTEL Arkansas, Inc. Arkansas
ALLTEL Missouri, Inc. Missouri
ALLTEL Oklahoma, Inc. Arkansas
ALLTEL Texas, Inc. Texas
Oklahoma ALLTEL, Inc. Oklahoma
Texas ALLTEL, Inc. Texas
Missouri Telephone Company Missouri
Eastern Missouri Telephone Company Missouri
SLT Communications, Inc. Texas
Sugar Land Telephone Company Texas
Perco Telephone Company Arkansas
SLT Cable TV, Inc. Texas
42
<PAGE>
EXHIBIT 21
ALLTEL Corporation
Subsidiaries of the Registrant, cont.
State of
Incorporation
WESTERN DIVISION:
ALLTEL Nevada, Inc. Nevada
ALLTEL Oregon, Inc. Oregon
CP National Corporation California
Navajo Communications Company, Inc. New Mexico
NCC Systems, Inc. Texas
Tuolumne Telephone Company California
OTHER COMPANIES:
ALLTEL Mobile Communications, Inc. Delaware
ALLTEL Mobile Communications of Alabama, Inc. Alabama
ALLTEL Mobile Communications of Arkansas, Inc. Arkansas
ALLTEL Mobile Communications of the
Carolinas, Inc. North Carolina
ALLTEL Mobile Communications of Florida, Inc. Florida
ALLTEL Mobile Communications of Georgia, Inc. Georgia
ALLTEL Mobile Communications of Mississippi, Inc. Mississippi
ALLTEL Mobile Communications of Missouri, Inc. Missouri
ALLTEL Mobile Communications of Nevada, Inc. Nevada
ALLTEL Mobile Corporation of Northwest Arkansas, Inc. Arkansas
ALLTEL Mobile Communications of West Virginia, Inc. West Virginia
Cellular Phone of Aiken-Augusta Georgia
Chattanooga-Northwest Georgia Cellular Radio, Inc. Tennessee
Missouri Telephone Cellular Systems, Inc. Missouri
Southwest Missouri Cellular Delaware
Planters Cellular Co. Georgia
Alma Cellular II Georgia
ALLTEL Communications Group, Inc. Delaware
ALLTEL Communications Corporation Ohio
ALLTEL Holding, Inc. Delaware
ALLTEL Publishing Corporation Ohio
ALLTEL Service Corporation Ohio
ALLTEL Supply, Inc. Ohio
ALLTEL Distribution, Inc. Delaware
HWC Distribution Corp. Delaware
Houston Wire & Cable Company Texas
Specialty Purchases, Inc. Texas
Sygnis, Inc. Arkansas
Ocean Technology, Inc. California
Control Communications Industries, Inc. Delaware
Metropolitan Houston Paging Services, Inc. Texas
43
<PAGE>
EXHIBIT 21
ALLTEL Corporation
Subsidiaries of the Registrant, cont.
State of
Incorporation
OTHER COMPANIES (continued):
Systematics Information Services, Inc. Arkansas
Systematics Telecommunications Services, Inc. Arkansas
Systematics Financial Services, Inc. Arkansas
Systematics of Arkansas, Inc. Arkansas
Systematics Healthcare Services, Inc. Delaware
TDS Healthcare Systems Corporation Delaware
New York Systematics, Inc. Arkansas
Massachusetts Systematics, Inc. Arkansas
Systematics Financial Processing Corp. Arkansas
Systematics International, Ltd. Jamaica
Systematics, Incorporated Limited United Kingdom
Horizon Financial Software Corporation Florida
Systematics of Delaware, Inc. Delaware
Computer Dynamics, Inc. Arkansas
Systematics of California, Inc. California
Systematics Processing Corporation Wisconsin
Systems Limited Hong Kong
Systematics International Resource
Management, Inc. Delaware
CPI Datanet, Inc. Delaware
Computer Power, Inc. Florida
CPI Acquisition, Inc. Delaware
44
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
ALLTEL Corporation:
As independent public accountants, we hereby consent to the incorporation
by reference in the previously filed registration statements of ALLTEL
Corporation on Forms S-8 (Registration No's. 2-99523, 33-25382, 33-35343,
33-34495, 33-41234, and 33-48476) of our report dated January 27, 1994,
on our audits of the financial statements and financial statement
schedules of ALLTEL Corporation as of December 31, 1993 and 1992 and for
each of the three years in the period ended December 31, 1993, which
report is incorporated by reference in this Annual Report on Form 10-K.
ARTHUR ANDERSEN & CO.
Little Rock, Arkansas
February 16, 1994
45
<PAGE>
EXHIBIT 13
PORTIONS OF ANNUAL REPORT TO STOCKHOLDERS
FOR THE YEAR ENDED DECEMBER 31, 1993
(incorporated by reference into this filing)
Form 10-K
Page Number
Management's Discussion and Analysis of Financial 47-54
Condition and Results of Operations
Report of Independent Certified Public Accountants 55
Selected Financial Data 56
Consolidated Statements of Income 57
Consolidated Balance Sheets 58
Consolidated Statements of Cash Flows 59
Consolidated Statements of Shareholders' Equity 60
Business Segments 61
Quarterly Financial Data 62
Notes to Consolidated Fianancial Statements 63-72
Investor Information 73
46
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FINANCIAL CONDITION
(Dollars in millions,
except per share amounts) 1993 1992 1991
Capital expenditures......................... $ 426.2 $ 367.2 $ 321.0
Cash provided from operations................ $ 569.1 $ 523.0 $ 435.5
Long-term debt issued........................ $ 627.8 $ 105.0 $ 228.4
Total capital structure...................... $3,203.5 $2,368.5 $2,247.3
Percent debt to total capital................ 51% 45% 49%
Interest coverage ratio...................... 5.28x 4.89x 4.08x
Book value per share......................... $8.24 $7.01 $6.29
The Company's financial position remained strong in 1993. This financial
strength continues to provide the Company the flexibility to make necessary
and desirable capital expenditures and to expand its presence in the
telecommunications and information services markets. During 1993, the Company
financed 91 percent of its capital expenditures through the internal
generation of funds. Capital expenditures are forecast at $522.0 million for
1994, which is expected to be primarily internally financed. The majority of
the Company's capital expenditures continue to be directed toward telephone
operations to modernize its network and invest in equipment to offer new
telecommunications services. In addition, capital expenditures are used for
expansion into new cellular markets and growth in information services.
During 1993, the Company and its subsidiaries issued long-term debt of
$627.8 million, compared to $105.0 million in 1992 and $228.4 million in 1991.
The issuance of $400 million of 6.5 percent debentures by the Company and a
subsidiary to finance the acquisition of certain telephone properties of GTE
Corporation in the State of Georgia and an increase in the use of the
Company's revolving credit agreement accounted for the majority of long-term
debt issued in 1993.
The issuance of $50 million of 7.47 percent notes by a subsidiary and $43
million of 8.05 percent notes as part of the re-alignment of debt in our
Western Division telephone operations represent a significant portion of
long-term debt issued in 1992. The issuance by the Company of $200 million of
9.5 percent debentures used to reduce the amount outstanding under the
Company's revolving credit agreement represents the majority of long-term debt
issued in 1991. The remaining borrowings for the three years were used for
investments, acquisitions and other general corporate requirements. The loans
were obtained through the private placement market, public issuance and the
Rural Electrification Administration financing programs for telephone
companies. The Company and its subsidiaries expect these sources to continue
to be available for future borrowings.
The Company has a $500 million revolving credit agreement. Total
borrowings outstanding against this agreement at December 31, 1993 and 1992
were $214.5 million and $2.4 million, respectively. The increase in 1993
results primarily from the prepayment of long-term debt, acquisition costs not
funded by the issuance of the $400 million of 6.5 percent debentures,
expansion of cellular investments and other general corporate requirements.
The Company's debt ratio was 51 percent as of December 31, 1993 compared
with 45 percent as of December 31, 1992. The increase is primarily due to the
issuance of the $400 million of 6.5 percent debentures and the increase in the
revolving credit agreement borrowings. There were no changes in the Company's
bond ratings during 1993. Moody's Investors Service and Standard & Poors
Corporation senior debt ratings for the Company are A2 and A+, respectively.
47
<PAGE>
Common dividends declared totaled $152.5 million in 1993 or 58 percent of
net income. In October 1993, the Board of Directors approved a 10 percent
increase in the quarterly dividend to $.22 per share. The action raised the
annualized dividend to $.88 per share and marks the 33rd consecutive year in
which the Company has increased its common stock dividend.
RESULTS OF OPERATIONS
Overview
Solid earnings growth, strengthening of the core telephone business and
expansion of the Company's other operations through selective acquisitions
were significant accomplishments made by the Company in 1993. The Company
continued its transition from primarily a regional telephone company to a
fully diversified provider of communications and information services.
In 1993, the Company purchased all the assets of the telephone operations
of GTE Corporation in the State of Georgia in exchange for the Company's
telephone operations in Illinois, Indiana and Michigan and $443 million in
cash. The exchange of telephone service areas with GTE Corporation resulted in
a net increase of 225,000 access lines for the Company. This acquisition was
accounted for as a purchase, and accordingly, GTE Georgia's results of
operations have been included in the financial statements as of November 1,
1993. The Company also acquired TDS Healthcare Systems Corporation ("TDS"), a
leading provider of comprehensive healthcare systems serving more than 200
hospitals in the United States, Canada and Europe. This acquisition will
provide additional opportunities for expansion into the healthcare industry.
The merger was accounted for as a pooling of interests; however, financial
statements of prior periods have not been restated since TDS' results are not
significant to the consolidated results of operations. Additional information
regarding the financial impact of these acquisitions is provided in Note 2 on
page 39. In 1993, the Company also purchased GTE's non-affiliated directory
publishing business, which includes contracts with 125 independent telephone
companies across the country.
The Company's consolidated net income for 1993 increased to $262.0 million
from $228.6 million in 1992 and $199.4 million in 1991, an increase of 15
percent in 1993 and 1992. In 1993, revenues and sales increased to $2,342.1
million from $2,082.5 million in 1992 and $1,884.0 million in 1991. This
represents an increase of 12 percent in 1993 compared to an increase of 11
percent in 1992. Total costs and expenses increased to $1,823.0 million from
$1,639.7 million in 1992. This was an increase of 11 percent compared to an
increase of 9 percent in 1992. Earnings per share in 1993 increased to $1.39
from $1.22 reflecting an increase of 14 percent compared to an increase of 12
percent in 1992.
In 1993, the Company recorded a gain on the exchange of telephone
properties with GTE, which was partially offset by the reorganization of its
telephone operations as a result of this transaction. In addition, the Company
recorded a write-down to reflect an impairment of its product distribution
operations. The net income impact of these transactions is not significant to
the results of operations.
48
<PAGE>
Telephone Operations
(Dollars in millions) 1993 1992 1991
Revenues.................................... $1,016.1 $ 947.8 $ 890.9
Operating income............................ $ 353.2 $ 315.8 $ 295.1
Operating cash flow......................... $ 535.7 $ 488.3 $ 467.3
Capital expenditures........................ $ 252.6 $ 247.3 $ 221.4
Access lines in service..................... 1,576,361 1,301,981 1,252,337
Access lines per telephone employee.......... 268 237 229
In 1993, telephone operations of the Company continued to perform well in an
increasingly challenging economic, competitive and regulatory environment.
Revenues and sales increased $68.3 million or 7 percent for 1993, compared to
increases of $56.9 million or 6 percent in 1992 and $38.3 million or 4 percent
in 1991. Operating income increased $37.4 million or 12 percent for 1993,
compared to an increase of $20.7 million or 7 percent in 1992 and a decrease
of $2.8 million or 1 percent in 1991. The acquisition of the GTE Georgia
properties accounted for 3 percent of the increase in both revenues and
operating income in 1993. Access lines in service increased 21 percent from
1992, with the acquisition of the GTE Georgia telephone properties accounting
for a 17 percent increase. The Company anticipates future access line growth
to come from population growth in its service areas, acquisitions and an
improving national economy.
Local service revenue increased in all periods due primarily to an
increase in customer lines and growth in custom calling feature revenues.
There were no local rate increases granted to any of the Company's telephone
operating subsidiaries in 1993, nor are there any rate requests currently
pending before regulatory commissions. Management does not anticipate filing
for any local rate increases during 1994. During 1993, telephone operations
were affected by certain regulatory commission orders designed to reduce
earnings levels. These orders did not materially impact the results of
operations of the Company.
Network access and long-distance revenues increased in all periods
primarily due to an increase in universal service fund revenues and higher
volumes of access connection. The increases in network access revenue for 1992
and 1991 were also due to an acquisition of a telephone company in the third
quarter of 1991 accounted for under the purchase method. These increases were
partially offset by decreases in long-distance revenue.
The increase in miscellaneous revenue in 1993 is primarily due to
increases in directory advertising and telephone equipment rentals, partially
offset by decreases in billing and collection revenues from AT&T. The increase
in miscellaneous revenue in 1992 was the result of increases in directory
advertising, telephone equipment rentals and sales of protection plans,
partially offset by decreases in customer-owned telephone equipment
maintenance plans and message center revenues. The decrease in miscellaneous
revenue in 1991 was the result of decreases in the direct sales and lease
rentals of deregulated equipment and reduced billing and collection services.
Total telephone operating expenses increased $30.9 million or 5 percent to
$662.9 million in 1993. This compares to an increase of 6 percent from 1991 to
1992. The acquisition of the GTE Georgia properties accounted for $18.1
million of the increase or 3 percent. In connection with the GTE Georgia
acquisition and to strengthen its competitive position, the Company
reorganized its telephone headquarters staff and consolidated its five
telephone regions into three in 1993.
49
<PAGE>
Operating expenses increased in 1993 primarily due to increased expense
for maintenance and repair of cable, digital electronic switching and circuit
equipment, and increased information services charges. The increase in
operating expenses in 1992 was due to increased expense for maintenance and
repair of cable, digital electronic switching and circuit equipment, increases
in real estate, personal property, gross receipts and franchise taxes, and
increased information services charges. The increase in operating expenses in
1991 was due to increased expense for maintenance and repair of cable, digital
electronic switching equipment and buildings, growth in depreciation due to a
6 percent growth in new telephone plant in service, special regulatory
amortizations, increased information services charges and other general and
administration expenses. The increases in 1992 and 1991 were partially offset
by lower maintenance expense related to electro-mechanical switching equipment
and a reduction in cost of products sold related to protection plans,
deregulated equipment and customer-owned telephone equipment maintenance plans.
Information Services
(Millions) 1993 1992 1991
Sales and revenues........................... $ 677.8 $ 569.4 $ 476.6
Operating income............................. $ 116.6 $ 94.4 $ 56.2
Operating cash flow.......................... $ 171.9 $ 138.4 $ 101.7
The information services segment provided solid operating results and
contributed significantly to the earnings growth of the Company. Sales and
revenues reflect increases of $108.4 million or 19 percent in 1993, $92.8
million or 19 percent in 1992, and $138.9 million or 41 percent in 1991.
Operating income reflects increases of $22.2 million or 23 percent in 1993,
$38.2 million or 68 percent in 1992, and $12.4 million or 28 percent for 1991.
Revenues and operating income growth continue to be affected by the number of
mergers and consolidations taking place in the financial services industry.
Information services enhanced the telecommunications portion of its
outsourcing business when it signed a long-term contract with GTE
Telecommunications Products and Services Group to perform all of GTE's
cellular billing. As noted earlier, the acquisition of TDS will provide
additional opportunities in the healthcare information processing market.
Information services sales and revenues increased in all periods as a
result of new facilities management and remote processing contracts including
telecommunications and new item processing operations, additional services
provided under existing facilities management contracts, an increase in the
number of loans processed and increased usage of new mortgage processing
service offerings. The increased nationwide refinancing activity in 1993 and
1992 also contributed to revenue through additional transaction processing
charges. Revenues for 1993 also increased as a result of recording the TDS
operations from the date of acquisition. These increases were partially offset
by lost operations from contract terminations due primarily to merger and
acquisition activity in the financial services market. Revenues increased for
1991 due to new facilities management contracts and maintenance contracts,
increased mortgage processing revenue and higher equipment sales.
50
<PAGE>
Operating income increased for all periods due to the revenue increases
previously mentioned. Operating income in 1993 also increased due to higher
margins realized on contract termination fees. Operating income in 1992 and
1991 also increased due to a reduction in the amortization of software at
Computer Power, Inc. ("CPI"). In 1991, the growth in operating income was not
as rapid as the revenue growth due to expenses in new financial and
telecommunications business units, continued investment and rebuilding in the
international marketplace, and to a lesser extent, increased depreciation,
marketing and other operating expenses.
Product Distribution Operations
(Millions) 1993 1992 1991
Sales and revenues...................... $370.7 $377.0 $333.2
Operating income........................ $ 17.0 $ 18.3 $ 15.6
Operating cash flow..................... $ 18.1 $ 19.5 $ 16.8
As a result of sluggish market conditions and intense competitive pressures
especially affecting the Company's specialty wire and cable subsidiary,
product distribution operations reflected decreases in both sales and revenues
and operating income in 1993. Sales and revenues decreased $ 6.3 million in
1993, or 2 percent from 1992. Operating income decreased 7 percent in 1993.
Although growth in the sale of telecommunications and data products to new and
existing customers including sales to affiliates as discussed in the
"Accounting Policies" footnote occurred in 1993, these increases were offset
by decreased sales of electrical wire and cable products. The product
distribution companies experienced increased competition from other
distribution companies and direct sales by manufacturers.
Product distribution operations sales and revenues increased in 1992
primarily due to growth in sales of telecommunications and data products to
new and existing customers including sales to affiliates. Product distribution
operations sales and revenues increased in 1991 primarily due to the addition
of a significant new customer in the fourth quarter of 1990, additional
customers obtained through aggressive marketing efforts and growth in sales to
existing customers. These increases were offset by reduced sales attributable
to competition in the electrical and electronic wire and cable distribution
business.
Operating income decreased in 1993 primarily due to the decrease in sales
previously noted. As a result of increased sales in 1992, operating income
also increased. Inventory controls and flexible pricing techniques helped
operating income grow faster than revenue in 1992. Operating income decreased
in 1991 due primarily to the effects of greater selling expenses and
decreasing gross margins resulting from greater manufacturer competition.
Cellular Operations
(Dollars in millions) 1993 1992 1991
Sales and revenues...................... $201.2 $125.5 $ 75.9
Operating income........................ $ 44.3 $ 20.9 $ 8.6
Operating cash flow..................... $ 66.8 $ 35.4 $ 18.1
Total customers......................... 275,611 161,419 82,677
51
<PAGE>
Cellular operations continued their long-standing trend of making an
increasingly larger contribution to the Company's earnings growth. Sales and
revenues increased $75.7 million or 60 percent for 1993, compared to $49.6
million or 65 percent in 1992. Operating income increased $23.4 million or 111
percent over 1992. In the future, cellular operations are expected to continue
to demonstrate high growth rates. Subscriber growth continued to be strong. At
year-end 1993, cellular customers totaled 275,611, an increase of 114,192
customers or 71 percent.
Cellular sales and revenues and operating income increased in all periods
primarily due to subscriber growth. The acquisition of new cellular properties
and increased interest in existing cellular properties also contributed to the
growth in revenues in 1993 and 1992. Revenues in 1991 also increased due to a
reclassification of long-distance revenues from other income, net. Operating
income also improved for all periods reflecting the increases in revenues
noted above partially offset by higher expenses for selling and advertising,
depreciation and other operating expenses. Operating income in 1991 also
improved due to the effect of a reclassification of long-distance revenues and
expenses from other income, net.
Other Operations
(Millions) 1993 1992 1991
Sales and revenues...................... $ 76.3 $ 62.8 $107.4
Operating income........................ $ 9.2 $ 9.1 $ 15.0
Other operations sales and revenues increased in 1993 primarily due to the
purchase of GTE's non-affiliated directory publishing business in mid-October
1993. These increases were partially offset by the loss of revenues due to the
sale of Ocean Technology, Inc. ("OTI") in the second quarter of 1992. The
decrease in sales and revenues in 1992 was primarily due to the sale of OTI.
Other operations revenues decreased in 1991 primarily due to the sale of
natural gas distribution operations in September 1991 and a decrease in
manufacturing revenue resulting from a reduction in cost-type contracts in
progress at OTI.
The increase in operating income in 1993 primarily resulted from the
increase in sales and revenues previously noted, partially offset by one-time
costs incurred with the purchase and start-up of the GTE directory publishing
business and the reduction in income due to the sale of OTI. Operating income
decreased in 1992 primarily due to the sale of OTI and natural gas operations.
Other Income, Net
Other income, net decreased $11.1 million or 83 percent primarily due to the
elimination of equity income recognized from investments now accounted for in
accordance with Statement of Financial Accounting Standards No. 115. Other
income, net increased $1.2 million or 10 percent in 1992 due primarily to an
increase in interest income.
52
<PAGE>
Interest Expense
Interest expense increased 6 percent or $5.5 million in 1993 and decreased 1
percent or $1.0 million in 1992 and increased 8 percent or $6.8 million in
1991. The increase in interest expense in 1993 is primarily due to the
issuance of $400 million of debentures in the fourth quarter. The decrease in
interest expense in 1992 is primarily due to a reduction in the usage and
lower rates on the Company's revolving credit agreement. This was partially
offset by a subsidiary debt issuance totalling $50 million. The increase in
1991 is primarily due to the issuance of $200 million of 9.5 percent
debentures in March 1991. The proceeds were used to reduce the amount
outstanding under the Company's revolving credit agreement.
Merger Expenses, Gain (Loss) on Exchange or Disposal of Assets and Other
In 1993, the Company recorded a gain on the exchange of telephone properties
with GTE, which was partially offset by the reorganization of its telephone
operations as a result of this transaction. During the fourth quarter of 1993,
the Company also recorded a partial write-down to reflect an impairment in the
carrying value of its product distribution operations. The net income impact
from these transactions is not significant to the results of operations.
As a result of the acquisition of CPI in 1992, merger expenses were
recorded in the first quarter which decreased net income by $5.0 million or
$.03 per share for the year ended December 31, 1992.
In 1991, the Company completed the sale of its natural gas distribution
assets for $85 million. The Company also recorded a write-down to market value
of its OTI manufacturing subsidiary. The sum of these transactions increased
net income by $3 million or $.01 per share for the year ended December 31,
1991.
Income Taxes
The increase in income taxes for 1993 resulted primarily from an increase in
taxable income and additional taxes due to the Revenue Reconciliation Act of
1993 which increased the statutory federal corporate income tax rate 1 percent
to 35 percent effective January 1, 1993. In addition, 1993 income taxes do not
reflect a tax benefit from the write-down of product distribution operations
since it resulted in a capital loss and utilization of this benefit is not
certain. The increase in income taxes for 1992 resulted primarily from an
increase in taxable income partially offset by the recording in 1991 of a net
gain from the sale of natural gas operations and the write-down to the market
value of OTI. The increase in income taxes for 1991 resulted primarily from
the net gain mentioned above. The 1991 increase was partially offset by
reduced income taxes on a loss realized on the sale of stock in Luz
International Limited.
53
<PAGE>
Average Common Shares Outstanding
The average number of common shares outstanding increased 1 percent in 1993.
During 1993, 92,559,000 common shares were issued in connection with a 2-for-1
stock split effective June 18, 1993. Common shares outstanding and earnings
per share amounts have been restated for all periods presented to reflect the
stock split. In 1993, approximately 2 million common shares were issued for
the acquisition of TDS. Stock option plan issuances amounted to 721,000 common
shares, and debentures and preferred stock were converted into 81,000 shares.
The average number of common shares outstanding increased 3 percent in 1992.
Contributing to the increase was the issuance of 2.7 million shares of common
stock previously repurchased. In 1992, 3,994,000 common shares were issued
through stock option plans, and debentures and preferred stock were converted
into 188,000 shares. Increases in average common shares outstanding in 1991
from employee plans and the conversion of debentures and preferred stock were
offset by the Company's repurchase on the open market of 838,000 of its own
common shares.
Other Financial Information
The Company was required in 1993 to change its accounting for income taxes and
postretirement benefits as promulgated by the Financial Accounting Standards
Board (FASB). In addition, the Company adopted early Statement of Financial
Accounting Standards No. 115 (SFAS 115) "Accounting for Certain Investments in
Debt and Equity Securities". See the Notes to Consolidated Financial
Statements for a discussion of the impact of these accounting pronouncements.
In November 1992, the FASB issued Statement of Financial Accounting
Standards No. 112 (SFAS 112) "Employers' Accounting for Postemployment
Benefits". SFAS 112 requires employers to recognize the obligation to provide
postemployment benefits to former or inactive employees, their beneficiaries,
and covered dependents. SFAS 112 is effective for fiscal years beginning after
December 15, 1993. Management does not expect this statement to have a
material effect on the financial condition or results of operations of the
Company.
Management is currently not aware of any environmental matters which in
the aggregate would have a material adverse effect on the financial condition
or results of operations of the Company.
The financial information included in the Quarterly Financial Data
reflects all adjustments necessary for a fair presentation.
54
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS OF ALLTEL CORPORATION
We have audited the accompanying consolidated balance sheets of ALLTEL
Corporation (a Delaware corporation) and subsidiaries as of December 31, 1993
and 1992, and the related consolidated statements of income, shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1993. These financial statements are the responsibility of the Company's
management. 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 financial position of ALLTEL Corporation and
subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1993, in conformity with generally accepted accounting
principles.
As explained in Note 3 to the financial statements, as of December 31,
1993, the Company changed its method of accounting for investments in
conjunction with the adoption of Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities."
ARTHUR ANDERSEN & CO.
Little Rock, Arkansas
January 27, 1994
55
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
For the years ended December 3l
(Dollars in thousands, except per share amounts)
<CAPTION>
1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C>
TOTAL REVENUES AND SALES $2,342,087 $2,082,481 $1,883,954 $1,691,163 $1,556,718 $1,361,875
COSTS AND EXPENSES:
Cost of products sold 353,120 359,148 357,049 361,973 316,658 258,751
Operating expenses 1,469,921 1,280,591 1,154,066 961,296 905,500 810,213
Total costs and expenses 1,823,041 1,639,739 1,511,115 1,323,269 1,222,158 1,068,964
Operating income 519,046 442,742 372,839 367,894 334,560 292,911
Non-operating income 2,230 13,364 12,117 11,973 7,818 14,245
Interest expense ( 98,746) (93,245) (94,244) (87,465) (83,702) (78,529)
Income before merger expenses, gain (loss) on exchange
or disposal of assets, other, and income taxes 422,530 362,861 290,712 292,402 258,676 228,627
Merger expenses, gain (loss) on exchange or disposal
of assets and other 27,390 (5,512) 8,347 - - (4,504)
Income before income taxes 449,920 357,349 299,059 292,402 258,676 224,123
Income taxes 187,903 128,713 99,633 92,275 80,131 78,400
Net income 262,017 228,636 199,426 200,127 178,545 145,723
Preferred dividends 1,578 1,742 2,543 2,878 3,214 3,718
Net income applicable to common shares $ 260,439 $ 226,894 $ 196,883 $ 197,249 $ 175,331 $ 142,005
PRIMARY EARNINGS PER SHARE $1.39 $1.22 $1.09 $1.09 $1.01 $ .84
Dividends per common share $ .82 $ .77 $ .71 $ .66 $ .59 $ .53
Common shares--
average for year 187,665,000 185,672,000 180,007,000 181,453,000 174,437,000 169,220,000
at year end 187,458,000 184,678,000 177,796,000 171,951,000 174,584,000 168,703,000
Total assets $4,270,458 $3,125,976 $2,957,232 $2,774,584 $2,666,940 $2,435,664
Total shareholders' equity $1,554,708 $1,304,454 $1,127,878 $1,043,771 $1,003,311 $ 885,257
Total redeemable preferred stock and
long-term debt $1,604,659 $1,027,803 $1,057,277 $1,003,844 $ 917,151 $ 804,856
</TABLE>
56
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31,
(Dollars in thousands, except per share amounts)
1993 1992 1991
REVENUES AND SALES $2,342,087 $2,082,481 $1,883,954
COSTS AND EXPENSES:
Cost of products sold 353,120 359,148 357,049
Operations 1,007,224 859,050 746,380
Maintenance 131,159 121,881 114,839
Depreciation and amortization 272,436 244,616 242,403
Taxes, other than income taxes 59,102 55,044 50,444
Total costs and expenses 1,823,041 1,639,739 1,511,115
OPERATING INCOME 519,046 442,742 372,839
Other income, net 2,230 13,364 12,117
Interest expense (98,746) (93,245) (94,244)
Income before merger expenses, gain (loss)
on exchange or disposal of assets,
other, and income taxes 422,530 362,861 290,712
Merger expenses, gain (loss) on exchange
or disposal of assets and other 27,390 (5,512) 8,347
Income before income taxes 449,920 357,349 299,059
Federal and state income taxes 187,903 128,713 99,633
Net income 262,017 228,636 199,426
Preferred dividends 1,578 1,742 2,543
Net income applicable to common shares $ 260,439 $ 226,894 $ 196,883
PRIMARY EARNINGS PER SHARE $1.39 $1.22 $1.09
The accompanying notes are an integral part of these financial statements.
57
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
December 31, 1993 and 1992
(Dollars in thousands)
<CAPTION>
ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY
1993 1992 1993 1992
CURRENT ASSETS: CURRENT LIABILITIES:
<S> <C> <C> <C> <C> <C>
Cash and short-term investments $ 7,881 $ 30,423 Current maturities of long-term debt $ 44,138 $ 36,220
Accounts receivable 379,743 257,290 Accounts payable 221,569 149,944
Materials and supplies 22,321 20,455 Advance payments and customers deposits 62,490 42,388
Inventories 68,673 57,667 Accrued taxes 35,053 55,536
Prepaid expenses 15,520 12,597 Accrued interest, dividends, and other 209,395 124,143
Total current assets 494,138 378,432 Other current liabilities 35,937 43,237
Total current liabilities 608,582 451,468
Investments 382,343 164,771
DEFERRED CREDITS:
Excess of cost over equity in Investment Tax 38,575 45,977
subsidiary companies 508,227 397,774 Income taxes 377,253 264,319
Total deferred credits 415,828 310,296
PROPERTY, PLANT AND EQUIPMENT:
Telephone 3,555,020 2,851,519 Long-term debt 1,596,032 1,018,228
Information services 290,737 196,238 Other liabilities 86,861 31,955
Other 235,884 165,075 Preferred stock, redeemable 8,627 9,575
Under construction 153,196 84,559
Total property, plant and equipment 4,234,837 3,297,391 SHAREHOLDERS' EQUITY:
Less accumulated depreciation 1,558,403 1,235,402 Preferred stock 9,405 9,488
Net property, plant and equipment 2,676,434 2,061,989 Common stock 187,458 92,339
Additional capital 333,698 399,955
OTHER ASSETS 209,316 123,010 Unrealized holding qain on investment 121,507 -
Retained earnings 902,640 802,672
Total shareholders' equity 1,554,708 1,304,454
TOTAL ASSETS $4,270,458 $3,125,976 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$4,270,458 $3,125,976
</TABLE>
The accompanying notes are an integral part of these
consolidated balance sheets.
58
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
(Dollars in thousands)
1993 1992 1991
CASH PROVIDED FROM OPERATIONS:
Net income $262,017 $228,636 $199,426
Non-cash operating activities:
Depreciation and amortization 272,436 244,616 242,403
(Gain) loss on exchange or disposal of
assets and other (48,669) - (8,347)
Other, net 52,756 11,077 7,923
Increase (decrease) in deferred credits 19,096 (18,534) (14,162)
Changes in operating assets
and liabilities:
Accounts receivable (84,854) (28,907) (13,215)
Inventories (8,749) 6,311 5,122
Accounts payable 41,050 3,582 10,215
Other current liabilities 51,483 69,430 12,820
Other, net 12,539 6,814 (6,706)
Net cash provided by
operating activities 569,105 523,025 435,479
CASH USED IN INVESTING:
Additions to property,
plant and equipment 426,171 367,203 321,019
Purchase of subsidiaries,
net of cash acquired 443,000 - 76,707
Sale of property - (8,394) (85,880)
Additions to investments 20,441 43,510 292
Other, net 86,536 30,906 26,375
Net cash used in investing activities 976,148 433,225 338,513
CASH (PROVIDED) USED IN FINANCING:
Dividends on preferred and common stock 154,110 134,981 114,853
Reductions in long-term debt 91,136 173,439 176,027
Purchase of common stock - - 13,894
Preferred stock redemptions and purchases 3,813 1,630 2,395
Long-term debt issued (627,804) (105,011) (228,434)
Common stock issued (5,756) (69,719) (4,541)
Net cash (provided) used in
financing activities (384,501) 135,320 74,194
(Decrease) increase in cash
and short-term investments (22,542) (45,520) 22,772
CASH AND SHORT-TERM INVESTMENTS:
Beginning of year 30,423 75,943 53,171
End of year $ 7,881 $ 30,423 $ 75,943
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $ 91,574 $ 89,585 $ 87,847
Income taxes paid $163,583 $110,132 $105,714
The accompanying notes are an integral part of these financial statements.
59
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
For the years ended December 31,
(Dollars in thousands, except per share amounts)
1993 1992 1991
<S> <C> <C> <C>
PREFERRED STOCK:
Balance at beginning of the year $ 9,488 $ 9,634 $ 9,871
Conversion of preferred stock (83) (146) (237)
Balance at end of the year $ 9,405 $ 9,488 $ 9,634
COMMON STOCK:
Balance at beginning of the year $ 92,339 $ 88,898 $ 85,975
Employee plans 721 1,997 2,175
Acquisition of subsidiary 1,758 - -
Conversion of preferred stock and debentures 81 94 82
Conversion of preferred stock by
subsidiary prior to merger - - 1,085
Stock split 92,559 - -
Re-issuance/(purchase) of stock - 1,350 (419)
Balance at end of the year $ 187,458 $ 92,339 $ 88,898
ADDITIONAL CAPITAL:
Balance at beginning of the year $ 399,955 $ 320,329 $ 323,443
Employee plans 20,485 27,536 8,430
Acquisition of subsidiary 5,422 - -
Conversion of preferred stock and debentures 395 838 678
Conversion of preferred stock by
subsidiary prior to merger - - 1,254
Stock split (92,559) - -
Re-issuance/(purchase) of stock - 51,252 (13,476)
Balance at end of the year $ 333,698 $ 399,955 $ 320,329
UNREALIZED HOLDING GAIN ON INVESTMENTS:
Balance at beginning of the year $ - $ - $ -
Change in unrealized holding gain
on investments 121,507 - -
Balance at end of the year $ 121,507 $ - $ -
RETAINED EARNINGS:
Balance at beginning of the year $ 802,672 $ 709,017 $ 624,482
subsidiary (7,939) - -
Net income for the year 262,017 228,636 199,426
Dividends:
Common per share, $.82 in 1993,
$.77 in 1992 and $.71 in 1991 (152,532) (133,239) (112,114)
Preferred (1,578) (1,742) (1,990)
By subsidiaries prior to merger - - (749)
Re-issuance/(purchase) of stock - - (38)
Balance at end of the year $ 902,640 $ 802,672 $ 709,017
equity $1,554,708 $1,304,454 $1,127,878
</TABLE>
The accompanying notes are an integral part of these financial statements.
62
<PAGE>
BUSINESS SEGMENTS
For the years ended December 31,
(Dollars in thousands)
1993 1992 1991
REVENUES AND SALES:
Telephone:
Local service $ 310,495 $ 283,015 $ 268,981
Network access and
long distance 581,520 545,052 511,582
Miscellaneous 124,079 119,692 110,350
Total telephone 1,016,094 947,759 890,913
Information services 677,753 569,370 476,565
Product distribution 370,692 377,036 333,158
Cellular 201,215 125,531 75,942
Other operations 76,333 62,785 107,376
Total $ 2,342,087 $2,082,481 $1,883,954
OPERATING INCOME:
Telephone $ 353,194 $ 315,782 $ 295,139
Information services 116,608 94,454 56,184
Product distribution 16,994 18,336 15,575
Cellular 44,292 20,945 8,570
Other operations 9,191 9,128 14,992
Total business segments 540,279 458,645 390,460
Corporate expenses 21,233 15,903 17,621
Total $ 519,046 $ 442,742 $ 372,839
IDENTIFIABLE ASSETS:
Telephone $ 2,795,984 $2,101,454 $2,020,941
Information services 468,490 299,240 284,444
Product distribution 157,561 204,986 202,063
Cellular 401,791 318,553 232,142
Other Operations 28,157 17,100 59,080
Corporate 418,475 184,643 158,562
Total $ 4,270,458 $3,125,976 $2,957,232
(Refer to page 43 for additional information concerning business segments.)
61
<PAGE>
<TABLE>
QUARTERLY FINANCIAL INFORMATION - (Unaudited)
<CAPTION>
(Dollars in thousands, except for per share amounts)
1993 1992
Total 4th 3rd 2nd 1st Total 4th 3rd 2nd 1st
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues and sales $2,342,087 $654,817 $571,678 $568,868 $546,724 $2,082,481 $533,392 $524,014 $519,336 $505,714
Operating income $ 519,046 $139,904 $129,202 $126,699 $123,241 $ 442,742 $117,604 $113,616 $107,372 $104,150
Income before merger expenses,
gain on exchange of assets,
other, and income taxes $ 422,530 $111,325 $106,428 $103,085 $101,692 $ 362,861 $ 96,805 $ 92,437 $ 88,711 $ 84,908
Net income $ 262,017 $ 69,057 $ 65,975 $ 63,829 $ 63,156 $ 228,636 $ 63,155 $ 58,457 $ 57,418 $ 49,606
Preferred dividends 1,578 382 387 403 406 1,742 409 418 456 459
Net income applicable to
common shares $ 260,439 $ 68,675 $ 65,588 $ 63,426 $ 62,750 $ 226,894 $ 62,746 $ 58,039 $56,962 $49,147
Primary earnings
per share $1.39 $ .36 $ .35 $ .34 $ .34 $1.22 $ .34 $ .31 $ .31 $ .26
Net income and earnings per share
excluding merger expenses, gain
on exchange of assets and other:
Net income $ 262,038 $ 69,078 $ 65,975 $ 63,829 $ 63,156 $ 233,615 $ 63,155 $ 58,457 $ 57,418 $ 54,585
Primary earnings
per share $1.39 $ .36 $ .35 $ .34 $ .34 $1.25 $ .34 $ .31 $ .31 $ .29
Dividends per
common share $ .82 $ .22 $ .20 $ .20 $ .20 $ .77 $ .20 $ .19 $ .19 $ .19
</TABLE>
62
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES:
Consolidation - The consolidated financial statements include the accounts of
ALLTEL Corporation, its subsidiary companies and majority-owned partnerships
(the "Company"). Investments in 20% to 50% owned entities and all
unconsolidated partnerships are accounted for using the equity method. Other
investments are recorded in accordance with Statement of Financial Accounting
Standards No. 115 (see Note 3). All intercompany transactions, except those
with certain affiliates described below, have been eliminated in the
consolidated financial statements. Certain amounts have been reclassified to
conform with the 1993 financial statement presentation.
Transactions with Certain Affiliates - ALLTEL Supply, Inc. sells equipment
and materials to telephone subsidiaries of the Company ($93,232,000 in 1993,
$81,766,000 in 1992, and $55,562,000 in 1991) as well as to other telephone
companies and related industries. The cost of equipment and materials sold to
such subsidiaries is included, principally, in telephone plant in the
consolidated financial statements. Beginning in April 1991, Systematics, Inc.
provides the data processing services for the Company's telephone operations
($65,925,000 in 1993, $57,730,000 in 1992, and $41,741,000 in 1991) in
addition to other companies. Intercompany profit, to the extent not offset by
depreciation on the capitalized cost of equipment and materials, has not been
eliminated because prices charged by the supply and information services
subsidiaries are comparable to prices the individual telephone subsidiaries
would be required to pay other suppliers.
Cash and Short-term Investments - Cash and short-term investments consist
of short-term, highly liquid investments which are readily convertible into
cash.
Inventories - Inventories are stated at the lower of cost or market value.
Cost is determined using the first-in, first-out method of valuation.
Property, Plant and Equipment - Property, plant and equipment are stated
at cost. Depreciation is computed using the straight-line method for financial
reporting. The composite depreciation rates by class of property as a percent
of average depreciable plant and equipment were:
1993 1992 1991
Telephone 6.4% 6.5% 6.7%
Information Services 16.9 16.9 15.9
Other 12.4 11.8 9.0
When utility property, plant and equipment are retired, the original cost,
net of salvage, is charged against the accumulated depreciation. The cost of
maintenance and repairs of property, plant and equipment, including the cost
of replacing minor items not affecting substantial betterments, is charged to
maintenance expense. The Company capitalized estimated interest during periods
of construction. Capitalized interest amounts were $2,005,000, $1,957,000 and
$1,890,000 for 1993, 1992 and 1991, respectively.
Excess of Cost Over Equity in Subsidiary Companies - Excess of cost over
equity of $471,488,000 relating to certain companies purchased subsequent to
November 1970 is being amortized on a straight-line basis for periods up to 40
years. Amortization amounted to $12,633,000 in 1993, $10,872,000 in 1992, and
$10,846,000 in 1991.
63
<PAGE>
Investment Tax Credit - The investment tax credit is amortized to income
over the productive lives of the related equipment.
Revenue Recognition - Information services revenues primarily consist of
data processing revenue recognized as services are performed. Software
licensing revenue is recognized when delivery of the software occurs, while
related software maintenance revenue is recognized ratably over the
maintenance period. Billed but unearned revenue is deferred.
Earnings Per Share - Primary earnings per share of common stock was
determined by dividing net income applicable to common shares by the average
number of common shares outstanding, including common stock equivalents,
during each year. The numbers of shares used in computing primary earnings
per share were 187,665,000 in 1993, 185,672,000 in 1992, and 180,007,000 in
1991. Conversion of all convertible preferred stock and convertible
debentures would not have a significant dilutive effect on earnings per
share.
2. ACQUISITIONS:
On October 1, 1993, the Company completed its merger with TDS Healthcare
Systems Corporation ("TDS"). In connection with the merger, approximately
2.0 million shares of the Company's common stock were issued for all of the
outstanding shares and stock options of TDS. The merger was accounted for as
a pooling of interests; however, the financial statements for all prior
periods have not been restated, since its results are not significant to the
consolidated results of operations. The accompanying financial statements
include the accounts and results of operations of TDS from the date of
acquisition.
On November 1, 1993, the Company purchased substantially all of the
assets of the telephone operations of GTE Corporation in the State of
Georgia ("GTE Georgia") in exchange for the Company's telephone operations
in Illinois, Indiana and Michigan, which had a net book value of $112
million, and $443 million in cash. This acquisition was accounted for as a
purchase. GTE Georgia's results of operations are included in the Company's
Consolidated Statements of Income beginning November 1, 1993, and the excess
cost resulting from the transaction is being amortized on a straight-line
basis over 40 years.
Unaudited pro forma consolidated results of operations, as though the
Company acquired GTE Georgia on January 1, 1992, are as follows:
(Thousands, except per share)
1993 1992
Revenues and sales $2,487,068 $2,256,440
Income before merger expenses, gain
on exchange of assets, other,
and income taxes $ 469,133 $ 411,861
Income before income taxes $ 496,523 $ 406,349
Net income applicable to common shares $ 288,370 $ 257,680
Primary earnings per share $1.53 $1.38
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3. FINANCIAL INSTRUMENTS AND INVESTMENT SECURITIES:
The carrying amount of cash and short-term investments approximates fair
value due to the short maturity of those instruments. The fair value of
other investments is $382.3 million based on the quoted market price and the
carrying value of investments for which there is no quoted market price. The
fair value of the Company's long-term debt, after deducting current
maturities, is estimated to be the carrying value based on the overall
weighted rates and maturity compared to rates and terms currently available
in the long-term financing markets. The fair value of the Company's
redeemable preferred stock is estimated to be $20.7 million in 1993 and
$20.4 million in 1992 versus a carrying amount of $8.6 million in 1993 and
$9.6 million in 1992. The fair value estimates are based on the conversion
of the Series D convertible redeemable preferred stock to common stock of
the Company and the carrying value of the Series A redeemable preferred
stock for which there is no quoted market price. The fair value of all other
financial instruments is estimated by management to approximate the carrying
value.
In May 1993, the FASB issued Statement of Financial Accounting Standards
No. 115 ("SFAS 115") which establishes accounting for certain investments in
debt and equity securities. The Company adopted the provisions of the new
standard in its financial statements as of December 31, 1993. Under SFAS
115, equity securities owned by the Company have been classified as
available-for-sale and are reported at fair value, with unrealized gains and
losses reported, net of tax, in a separate component of shareholders'
equity. At December 31, 1993, the Company had an unrealized gain of $121.5
million, net of tax, on its investment in LDDS Communications, Inc. The
adoption of this pronouncement resulted in a non-cash increase in
investments of $217.8 million, an increase in deferred taxes of $96.3
million and an increase in shareholders' equity of $121.5 million, all of
which have been excluded from the 1993 Consolidated Statement of Cash Flows.
All other unrealized gains and losses on investments in equity securities
are not material to the Company's financial position or results of
operations.
4. DEBT:
Long-term debt, after deducting current maturities, was as follows at
December 31, 1993:
(Thousands)
First mortgage bonds and collateralized notes,
Weighted Rate 8.4%, Weighted Maturity 6 years $ 41,684
Debentures and notes, without collateral,
Weighted Rate 8.3%, Weighted Maturity 19 years 1,001,755
Industrial revenue bonds and collateralized notes,
Weighted Rate 4.7%, Weighted Maturity 11 years 8,992
Revolving credit agreement,
Weighted Rate 3.4%, Weighted Maturity 3 years 214,545
Rural Electrification Administration notes,
Weighted Rate 4.2%, Weighted Maturity 19 years 94,047
Rural Telephone Bank and Federal Financing Bank notes,
Weighted Rate 8.2%, Weighted Maturity 20 years 234,861
Other 148
Total long-term debt $1,596,032
Weighted Rate 7.3%
Weighted Maturity 16 years
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The Company has a $500 million revolving credit agreement which has a
termination date of October 1, 1996, with provision for annual extensions.
It is the Company's intention to continue to renew the agreement. The
revolving credit agreement provides a variety of pricing options.
The indentures and agreements, as amended, provide among other things,
for various restrictions on the payment of dividends by the Company and
subsidiary companies. Retained earnings unrestricted as to payment of
dividends by the Company amounted to $664.1 million at December 31, 1993.
Certain properties have been pledged as collateral on $379.6 million of
obligations.
Interest expense on long-term debt amounted to $96.2 million in 1993,
$91.4 million in 1992, and $92.9 million in 1991.
Maturities and sinking fund requirements for the four years after 1994
for long-term debt outstanding, excluding the revolving credit agreement as
of December 31, 1993, were $53.2 million, $38.8 million, $41.3 million, and
$47.6 million for the years 1995 through 1998, respectively.
5. COMMON STOCK:
On April 22, 1993, the Board of Directors approved a 2-for-1 stock split of
the Company's common stock in the form of a 100% stock dividend. The
dividend was distributed on July 9, 1993 to shareholders of record on June
18, 1993. Stock options and other commitments payable in shares of the
Company's common stock were amended to provide for the 2-for-1 split. All
share information in the consolidated financial statements has been adjusted
to reflect the stock split on a retroactive basis. An amount equal to the
par value of the common shares issued was transferred from Additional
Capital to Common Stock.
There are 500,000,000 shares of $1 par value common stock authorized of
which 187,457,609 and 184,677,988 shares were outstanding at December 31,
1993 and 1992, respectively. At December 31, 1993, the Company had 9,234,698
common shares reserved for issuance in connection with convertible preferred
stock (1,076,059) and stock options (8,158,639).
The Company's Stock Option Plan provides for the granting of options to
officers and key employees at prices not less than the market value of the
stock at the date of grant.
The following is a summary of stock options outstanding, granted,
exercised and cancelled:
Average Price
Shares Per Share
1993 1992 1993 1992
Outstanding at beginning
of period 5,566,674 5,178,446 $14.26 $11.19
Granted 2,325,000 1,830,000 28.12 20.00
Acquisition of subsidiary 242,313 - 3.83 -
Exercised (1,014,495) (1,331,570) 10.14 10.08
Cancelled (173,564) (110,202) 17.55 15.76
Outstanding at end of period 6,945,928 5,566,674 $19.06 $14.26
Exercisable at end of period 2,643,591 2,473,868
Reserved for future options 1,212,711 3,379,512
During 1991, 4,156,906 shares were exercised at an average price of $2.77 per
share.
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6. PREFERRED STOCK:
Cumulative preferred stock is issuable in series, and the Board of Directors
is authorized to designate the number of shares and fix the terms. There are
50,000,000 $25.00 par value voting shares and 50,000,000 no par value
non-voting shares authorized.
The outstanding cumulative preferred stock, which is not redeemable at the
option of the holder, was as follows at December 31, 1993:
Quarterly Amount
Dividend Outstanding
Per Share Shares (Thousands)
$25 par value:
Series A, 5% $.31 1/4 39,853 $ 996
Series C, 5% .31 1/4 5,000 125
Series E, 6% .37 1/2 32,000 800
Series F, 5 1/2% .34 3/8 245,955 6,149
Series H, 6% .37 1/2 12,184 305
Series I, 5 1/2% .34 3/8 4,000 100
Series J, 6% .37 1/2 1,800 45
No par value:
Series C, $2.06 Convertible .51 1/2 35,419 885
$9,405
The $25 par value preferred stock may be redeemed at the option of the
Company at par value. The no par value Series C preferred shares are
convertible at any time prior to redemption into 5.963 shares of the
Company's common stock. Rate of conversion is subject to adjustment under
certain conditions.
The outstanding cumulative preferred stock, which is redeemable at the
option of the holder, was as follows at December 31, 1993:
Quarterly Amount
Dividend Outstanding
Per Share Shares (Thousands)
No par value:
Series A, 7 3/4% $1.93 3/4 61,000 $6,100
Series D, $2.25 Convertible .56 1/4 90,240 2,527
$8,627
The Company's Series A preferred stock is redeemed through required
annual sinking fund payments. The sinking fund requirements in each of the
five years ending December 31, 1994 through 1998 amount to $540,000.
In addition to redemption at the option of the holder and through
required sinking fund payments, at the stated value per share, the Company
may at its option under certain conditions redeem outstanding cumulative
preferred stock at varying premiums above par or stated value.
The Company's Series D stock is convertible at any time prior to
redemption into 5.486 shares of the Company's common stock. The rate of
conversion is subject to adjustment under certain conditions. During 1993,
$408,000 of Series D stock was converted. The stock may be redeemed at the
option of the Company or of the holder at the $28.00 per share stated value.
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7. RETIREMENT PLANS:
The Company has a trusteed, noncontributory, defined benefit pension
plan which provides retirement benefits for eligible employees of the
Company. Pension benefits are based on an employee's years of service and
compensation. The Company's funding policy for the defined benefit
contributions is to satisfy the funding requirements of the Employees'
Retirement Income Security Act ("ERISA").
Certain key officers have unfunded executive compensation agreements.
These agreements provide that retirements paid thereunder shall be in lieu of
payments under the Company's pension plan.
Pension expense (credit), including provision for executive compensation
agreements, totaled $(3,892,000) in 1993, $(5,594,000) in 1992, and
$(2,829,000) in 1991.
Pension expense (credit) includes the following components:
(Thousands)
1993 1992 1991
Benefits earned during the year $ 10,504 $ 8,842 $ 7,214
Interest cost on projected
benefit obligation 16,964 15,841 14,633
Actual return on plan assets (34,176) (23,624) (55,324)
Net amortization and deferral 2,816 (6,653) 30,648
Pension expense (credit) $ (3,892) $ (5,594) $ (2,829)
The following table presents the funded status of the plan at December 31,
1993 and 1992:
(Thousands)
1993 1992
Actuarial present value of accumulated
benefit obligation, including vested
benefits of $220,404 in 1993 and
$151,287 in 1992 $228,386 $152,566
Actuarial present value of projected
benefit obligation 282,816 209,444
Plan assets at fair value 336,812 293,596
Plan assets in excess of projected benefit
obligation 53,996 84,152
Unrecognized net gain (20,873) (44,165)
Remaining unrecognized prior service cost (7,036) (9,977)
Unrecognized transition asset being
amortized over 16 years (11,833) (13,017)
Prepaid pension expense $ 14,254 $ 16,993
Actuarial assumptions used to calculate the projected benefit
obligations were 7.5% for the settlement rate in 1993 and 8% for 1992, and
5% for future compensation level increases in 1993 and 5.5% for 1992. The
investment earnings rate was 8.5% in 1993 and 9% for 1992.
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The increases in the actuarial present value of the accumulated benefit
obligation and the projected benefit obligation for 1993 primarily resulted
from the acquisition of the GTE Georgia properties, the changes in actuarial
assumptions, and a special early retirement program offered to employees
meeting certain age and service requirements.
Assets of the plan consist primarily of listed stocks, including common
stock of the Company amounting to $18,690,000 and $15,126,000 at December 31,
1993 and 1992, respectively, and corporate and government debt.
The Company has noncontributory defined contribution plans in the form of
profit sharing arrangements for eligible employees, except bargaining unit
employees. The amount of profit sharing contributions to the plans is
determined annually by the Company's and subsidiaries' Board of Directors.
Profit sharing expense amounted to $22,717,000 in 1993, $20,659,000 in 1992,
and $11,579,000 in 1991.
8. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS:
Effective January 1, 1993, the Company, as required, changed its method of
accounting for certain postretirement benefits by adopting Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." The statement requires the
recognition of a liability for postretirement benefits on an accrual basis
compared to the current practice of recognizing these expenses when paid.
This change in accounting does not have a material effect on the financial
position or results of operation of the Company.
The Company provides healthcare and life insurance benefits for eligible
employees. The healthcare benefit is based on comprehensive hospital, medical
and surgical benefit provisions, while the life insurance is based on annual
earnings at the time of retirement. The employees share in the cost of these
benefits. The Company is not currently funding these plans.
The postretirement expense includes the following components:
(Thousands)
Benefits earned $ 423
Amortization of transition obligation 1,000
Service and interest cost for former GTE employees 50
Interest cost on accumulated postretirement
benefit obligation 2,987
Postretirement expense $ 4,460
The following table presents the plan status as of December 31, 1993:
(Thousands)
Accumulated postretirement benefit obligation:
Retirees $28,829
Fully eligible active plan participants 1,164
Other active plan participants 7,296
Total accumulated postretirement benefit obligation 37,289
Unrecognized net gain 3,752
Unrecognized transition obligation being amortized
over 20 years (18,542)
Accrued postretirement benefit obligation $22,499
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Actuarial assumptions are 7.5% for the weighted average discount rate,
and the healthcare cost trend rate was 12% for 1993, decreasing on a
graduated basis to an ultimate rate of 6% in the year 2000. A one
percentage point change in the assumed healthcare cost trend rate for each
future year would increase the postretirement benefit cost by approximately
$165,000 for the year ended December 31, 1993, and the accumulated
postretirement benefit obligation as of December 31, 1993, by approximately
$1.8 million.
9. MERGER EXPENSES, GAIN (LOSS) ON EXCHANGE OR DISPOSAL OF ASSETS AND
OTHER:
In 1993, the Company recorded a gain on the exchange of telephone
properties with GTE, which was partially offset by the reorganization of
its telephone operations as a result of this transaction. These
transactions amounted to $69.9 million. In addition, the Company recorded a
write-down of $42.5 million in 1993 to reflect an impairment in the
carrying value of its product distribution operations. The net income
impact from these transactions is not significant to the results of
operations.
In 1992, the Company recorded merger expenses of $5.5 million for the
acquisitions of CPI Acquisition, Inc. and SLT Communications, Inc. These
merger expenses resulted in a decrease in earnings per share of $.03 in
1992.
In 1991, the Company realized a net gain from the sale of its' natural
gas operations. An estimated net loss was recorded in 1991 to reflect a
decline in net realizable value of manufacturing operations which the
Company sold in the second quarter of 1992. The net increase to net income
from these transactions was $3.0 million or $.01 per share in 1991.
10. INCOME TAXES:
Effective January 1, 1993, the Company, as required, changed its method of
accounting for income taxes by adopting Statement of Financial Accounting
Standards No. 109 ("SFAS 109"). In addition to other provisions, SFAS 109
requires that deferred tax balances be adjusted to reflect the effective
tax rates. For the Company's regulated operations, since the manner in
which taxes are treated for ratemaking purposes has not changed, the
adjustment in deferred tax balances for the change in tax rates is
reflected as a regulatory asset or liability. These regulatory assets and
liabilities will be amortized over the lives of the related depreciable
asset or liability concurrent with recovery in rates. The cumulative effect
of the change in accounting for income taxes is not significant to the
consolidated results of operations.
On August 10, 1993, the Revenue Reconciliation Act of 1993 was enacted.
In addition to other provisions, the statutory federal corporate income tax
rate was increased by 1% to 35% retroactive to January 1, 1993.
Accordingly, deferred tax balances were adjusted to reflect the new tax
laws and rates and the effect is included in net income for 1993.
Income tax expense was as follows:
(Thousands)
1993 1992 1991
Federal $158,376 $106,846 $83,574
State and other 29,527 21,867 16,059
$187,903 $128,713 $99,633
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The federal income tax expense consists of the following:
(Thousands)
1993 1992 1991
Currently payable $119,489 $125,516 $99,750
Deferred 46,289 (10,874) (7,920)
Investment tax credit amortized (7,402) (7,796) (8,256)
$158,376 $106,846 $83,574
Deferred income tax expense results principally from temporary differences
between depreciation expense for income tax purposes and depreciation expense
recorded in the financial statements.
Differences between the federal income tax statutory rates and effective
income tax rates, which include both federal and state income taxes, were as
follows:
1993 1992 1991
Statutory income tax rates 35.0% 34.0% 34.0%
Increase (decrease):
Investment tax credit (1.6) (2.2) (2.9)
State income taxes, net of
federal benefit 4.3 4.0 3.4
Reversal of excess deferred
federal taxes (0.9) (1.6) (1.8)
Write-down of product distribution
operations 3.3 - -
Other items 1.7 1.8 .6
Effective income tax rates 41.8% 36.0% 33.3%
The write-down of the product distribution operations resulted in
capital losses for which the tax benefit can only be recognized to the
extent of available capital gains. Without this write-down, the effective
income tax rate would have been 38.5% in 1993.
At December 31, 1993, the significant components of the Company's net
deferred income tax liability were as follows:
Deferred Income Taxes (Thousands)
Property, plant and equipment $318,711
Unrealized holding gain on investments 96,301
Other, net (37,759)
Total $377,253
At December 31, 1993, total deferred tax assets and liabilities were
$151.1 million and $528.4 million, respectively.
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11. BUSINESS SEGMENTS:
The Company's telephone operating subsidiaries provide primary local service
and network access in 22 states. Information services provides electronic
information processing services and software primarily through long-term
contracts and markets other information processing products and services to
the financial, telecommunications and healthcare industries. Product
distribution sells equipment and materials to affiliated and non-affiliated
telephone companies and related industries and electrical and electronic
wire and cable to other distributors and wholesalers. Cellular includes
cellular mobile telephone services in various major U.S. markets. Other
operations primarily include directory publishing and wide-area paging
services, and prior to June 1992, manufacturing of marine communications and
navigation equipment, and prior to September 1991, natural gas distribution.
Corporate items represent general corporate expenses and assets not
allocated to segments. (Refer to Page 36 for a schedule of business segment
information.)
Corporate identifiable assets consist primarily of cash, investments and
headquarters facilities and equipment. Depreciation and amortization and
capital expenditures are primarily related to telephone operations.
In 1993, 1992 and 1991, AT&T provided approximately 21%, 23% and 25%,
respectively, of the Company's total telephone revenues, primarily network
access revenues and billing and collection services.
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INVESTOR INFORMATION
Corporate Headquarters
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202
(501)661-8000
Annual Meeting
The Annual Meeting of ALLTEL Corporation stockholders will be
held at 11 a.m. (CDT) on Thursday, April 21, 1994, at ALLTEL Corporation's
Headquarters at One Allied Drive, Little Rock, Arkansas.
Transfer Agent, Registrar and
Dividend Disbursing Agent
Society National Bank
P.O. Box 6477
Cleveland, OH 44101-1477
Common Stock Price and Dividend Information
Ticker Symbol AT
Newspaper Listings ALLTEL, ALTEL
Market Price
Dividend
Year Qtr. High Low Close Declared
1993 4th 30 7/8 25 5/8 29 1/2 .22
3rd 31 1/4 25 1/2 30 1/2 .20
2nd 26 15/16 23 7/8 26 3/4 .20
1st 25 5/16 22 7/8 24 11/16 .20
1992 4th 25 21 3/8 23 7/8 .20
3rd 22 1/8 19 3/8 22 1/8 .19
2nd 20 1/8 18 9/16 19 1/2 .19
1st 20 1/2 17 3/8 19 1/16 .19
The above figures have been restated to reflect the
2-for-1 stock split in 1993.
The common stock is listed and traded on the New York
and Pacific Stock Exchanges. The above table reflects
the range of high, low and closing prices as reported
by Dow Jones & Company, Inc.
Annual Report on Form 10-K
The 1993 report on Form 10-K filed with the Securities and Exchange
Commission is availale without charge to stockholders upon request to the
Corporate Headquarters.
Investor Relations
Information request from investors, security analysts, other members of the
investment community and the news media should be addressed to Ron Payne,
Vice President-Corporate Communications, at One Allied Drive, Little Rock,
Arkansas 72202 (501)661-8989.
Shareholder Services
General questions about accounts, stock certificates or dividends checks my
be directed to the Shareholder Services Department at 2000 Highland Road,
Twinsburg, Ohio 44087 (216)963-1469.
73
Exhibit 10(d)
ALLTEL CORPORATION
Directors' Retirement Plan
(as amended as of January 1, 1994)
Honorary Directors as of December 31, 1989 will continue to receive honorary
director fees in accordance with past policies. Honorary directors fees will
not apply to a director who ceases to be a director after December 31, 1989.
A director who "retires" (as defined below) after December 31, 1989 and prior
to January 1, 1994, and who is age 65 or older and not a corporate officer at
the time of retirement will receive the applicable percentage of the retirement
benefit specified below:
Percent of Base Annual Director
Years of Retirement Fee in Effect on Date of Retirement
less than 10 none
10 but less than 11 50%
11 but less than 12 55%
12 but less than 13 60%
13 but less than 14 65%
14 but less than 15 70%
15 but less than 16 75%
16 but less than 17 80%
17 but less than 18 85%
18 but less than 19 90%
19 but less than 20 95%
20 or more 100%
A director who "retires" (as defined below) after December 31, 1993, and who
is not a corporate officer at the time of retirement will receive the applicable
percentage of the retirement benefit specified below:
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Percent of Base Annual Director
Years of Retirement Fee in Effect on Date of Retirement
less than 5 none
5 but less than 6 50%
6 but less than 7 55%
7 but less than 8 60%
8 but less than 9 65%
9 but less than 10 70%
Percent of Base Annual Director
Years of Retirement Fee in Effect on Date of Retirement
10 but less than 11 75%
11 but less than 12 80%
12 but less than 13 85%
13 but less than 14 90%
14 but less than 15 95%
15 or more 100%
"Years of Service" shall include only service as a director of ALLTEL
Corporation, Allied Telephone Company, and Mid-Continent Telephone
Corporation. Service shall be measured to the nearest whole month beginning on
a date the retired director became a director and ending on the date the retired
director ceased to be a director. Separated periods of service as a director
shall be aggregated. A director shall be deemed to "retire" if his status as a
director ceases for any reason other than his death or removal in accordance
with applicable law. The retirement benefit shall consist of an annual payment
equal to the applicable percentage of the base annual directors fee in effect on
the date of retirement, except that the payment for the year in which retirement
occurs shall be reduced (but not below zero) by the amount of the base annual
directors fee paid to the retired director for that year. The retirement
benefit shall be payable as of such date each year as the Board of Directors
shall determine from time to time. The retirement benefit shall be paid only
for the remainder of the retired director's lifetime, the last annual payment
being the payment that immediately precedes the retired director's death.
The Board of Directors reserves the right to amend or terminate this Director's
Retirement Plan at any time and for any reason. No such amendment or
75
termination shall,however, adversely affect the retirement benefit of a director
who retired prior to the date the action adopting such amendment or termination
is taken by the Board of Directors, nor shall any such amendment or termination
reduce the amount of retirement benefit to which a director would have been
entitled if he had retired on the day immediately preceding the date the action
adopting such amendment or termination is taken by the Board of Directors.
76
Exhibit 10(e)
ALLTEL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
(October 1, 1993 Restatement)
This plan is hereby amended and restated by ALLTEL Corporation (the
"Company"), effective as of October 1, 1993, and is intended to be a
continuation of the plan originally effective as of December 1,1982, as amended.
The purpose of the deferred compensation plan is to provide to certain key
management employees who are selected to participate in the plan the option of
deferring a portion of their compensation to be received from the Company or a
subsidiary.
ARTICLE I
DEFINITIONS
For the purposes hereof, the following words and phrases shall have
the meanings indicated:
1. "Beneficiary" shall mean the beneficiary or beneficiaries
designated in accordance with the Plan to receive the amount of the remaining
balance of the Deferred Compensation Account in the event of the death of the
Participant prior to his receipt of the entire amount of the Deferred
Compensation Account.
2. "Book Value" of the Company's common stock shall mean the book
value of each share of ALLTEL Corporation common stock as of the end of the Year
as reflected in its published consolidated financial statements and as computed
in accordance with Exhibit A-1 attached hereto.
3. "CEO" shall mean the Chief Executive Officer of the Company.
4. "Company" shall mean ALLTEL Corporation, a Delaware corporation,
its successors and survivors resulting from any merger or acquisition of ALLTEL
Corporation with or by any other corporation or other entity or enterprise.
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5. "Compensation" of an Eligible Employee shall mean the base
salary, which may be paid to an Eligible Employee with respect to a Year by the
Company or any Subsidiary.
6. "Deferral Year" shall mean a Year for which Compensation is
deferred in accordance with the Plan and in which, in the absence of the
deferral, the Compensation otherwise would be paid to the Participant.
7. "Deferred Compensation Account" shall mean the bookkeeping
account on which the amount of Compensation that is deferred by a Participant
and any adjustments thereto in accordance with the Plan shall be recorded. A
separate Deferred Compensation Account shall be established for each Deferral
Year.
8. "Eligible Employee" shall mean those Employees who are
specifically designated as an Eligible Employee by the CEO.
9. "Employee" shall mean any officer or key management employee of
the Company or a Subsidiary who is a regular full time employee of the Company
or a Subsidiary. A "full time" employee means any employee who is customarily
employed for more than 20 hours per week and at least six months per year.
10. "Market Value" shall mean the closing sales price of one share
of the common stock of the Company on the New York Stock Exchange (or such other
securities exchange on which the shares of common stock of the Company are
traded) on the last trading day of the Company's fiscal year. If the shares of
common stock of the Company are not listed for trading on a securities exchange
on the last business day of the Company's fiscal year, then Market Value shall
mean the fair market value of one share of common stock of the Company on the
last day of the Company's fiscal year as determined by the Board of Directors of
the Company in its sole and absolute discretion.
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11. "Participant" shall mean an Eligible Employee who has elected
to defer payment of all or a portion of his Compensation for a Year in
accordance with the Plan.
12. "Plan" shall mean the deferred compensation plan, as set forth
herein, together with all amendments hereto, which Plan shall be called the
"ALLTEL Corporation Executive Deferred Compensation Plan".
13. "Subsidiary" shall mean a corporation of which 50% or more of
the issued and outstanding voting stock is owned by the Company or by a
Subsidiary.
14. "Year" shall mean the Company's fiscal year for tax and
financial reporting purposes.
ARTICLE II
DEFERRAL OF COMPENSATION
1. Eligibility. Any Eligible Employee shall be entitled to elect
to defer the payment of all or a portion of his Compensation for any Year in
accordance with Section 2 of this Article. An Eligible Employee's entitlement
to defer shall cease with respect to the Year following the Year in which he
retires, dies, or otherwise terminates his employment with the Company or any
Subsidiary, or is removed from the list of Eligible Employees by the CEO.
2. Election to Defer. An Eligible Employee who desires to defer
the payment of all or a portion of his Compensation for any Year must complete
and deliver to the Company no later than the last day of the Year prior to the
Year for which the Compensation would otherwise be paid an Election Agreement in
the form attached hereto as Exhibit B; provided, however, that any person
hereafter designated as an Eligible Employee who was not an Eligible Employee on
the preceding December 31, may make an election to defer payment of his
Compensation, payable subsequent to
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delivery of an Election Agreement, by delivering the Election Agreement to the
Company within 30 days of his designation as an Eligible Employee.
An Eligible Employee, who timely delivers to the Company the Election
Agreement, shall be a Participant. An Election Agreement must be timely
completed and delivered for each Year for which Compensation is desired to be
deferred, and shall be irrevocable on and after the beginning of the period to
which it relates.
3. Amount Deferred; Period of Deferral. A Participant shall
designate on the Election Agreement the percentage of his Compensation for the
Year that he wishes to defer. That percentage of Compensation shall be deferred
until the termination of the Participant's employment with the Company or any
Subsidiary, whether due to retirement, death or otherwise, or until the date
specified by the Participant, at which time payment of the amount deferred shall
be made in accordance with Sections 5 or 6 of this Article.
4. Deferred Compensation Account. The amount of Compensation (if
any) a Participant elects to defer for each Deferral Year shall be credited to
the Deferred Compensation Account of the Participant for that Deferral Year on
the date the Compensation otherwise would have been paid to the Participant. As
of the close of business on December 31 of the Deferral Year, on each December
31 occurring thereafter, and prior to the date specified by the last sentence of
this Section 4, the Participant's Deferred Compensation Account for the Deferral
Year shall be credited with earnings in an amount, if any, equal to the greater
of (a) or (b) below:
(a) In the case of the Deferral Year, the total Compensation
deferred for that Year and, in the case of any Year subsequent to
that Deferral Year, the balance of the Deferred Compensation Account
as of the close of business on the immediately preceding December 31
after the crediting required by this Section 4, if any, multiplied
by a percentage determined by dividing the cash dividends paid
during the current Year (the Year for which the crediting, if
any, is to be made) on one share of the Company's common stock by
the Book Value for the Year immediately preceding such current Year;
or
(b) In the case of the Deferral Year, the total Compensation
deferred for
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that Deferral Year and, in the case of any Year subsequent to that
Deferral Year, the balance of the Deferred Compensation account
as of the close of business on the immediately preceding December
31 after the crediting required by this Section 4, if any,
multiplied by a percentage equal to the sum of (i) and (ii) below:
(i) the percentage increase (if any) in the Market Value
from the Year immediately preceding the current Year (the
Year for which the crediting, if any, is to be made)
to the current Year, except that, if the Market
Value for such immediately preceding Year is less than
the Market Value used in calculating earnings for any
preceding Year, then the foregoing percentage increase
shall instead be the percentage increase (if any) in
the Market Value from the prior highest market value used
in calculating earnings to the Market Value for the current
Year; and
(ii) a percentage determined by dividing the cash dividends
paid during the current Year (the Year for which the
crediting, if any, is to be made) on one share of the
Company's common stock by the Market Value for the Year
immediately preceding the current Year.
In the event of any change in the Company's fiscal year,such
appropriate adjustments to the crediting provided for in this Section 4 to
reflect such change in fiscal year shall be made as the Board of Directors of
the Company in its sole and absolute discretion shall determine. In addition,
the Board of Directors shall make appropriate adjustments to cash dividends,
Market Value and Book Value to reflect stock splits, stock dividends,
recapitalizations, mergers, acquisitions, and similar changes.
As of the close of business on the date of termination of a
Participant's employment with the Company and any Subsidiary, death of the
Participant, or if earlier, on the date elected by the Participant for
commencement of payments, the then current balance of his Deferred Compensation
Account(s) shall be paid pursuant to Section 5 or Section 6 of Article II.
If such date occurs on any date other than December 31, the portion of his
Deferred Compensation Account(s) consisting of Compensation and earnings
previously credited thereon that related to elections made by
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the Participant prior to February 18, 1993 (the "Separate Portion") shall not be
credited as provided in this Section 4 for the Year in which such date occurs,
but instead shall be credited with interest on the basis specified in Section 5
of this Article II from January 1 of the Year in which such date occurs through
such date (after which the provisions of Section 5 of this Article II shall
apply).
5. Payment of Deferred Compensation. The amount of the
Participant's Deferred Compensation Account, together with any interest and
earnings credited to the Deferred Compensation Account in accordance with this
Section 5, shall be paid to the Participant in a lump sum or in a number of
approximately equal annual installments (not more than 15), as designated by the
Participant on the Election Agreement. The amount of a Deferred Compensation
Account remaining unpaid shall bear interest or be credited with earnings,
beginning on the date of the termination of a Participant's employment with
the Company and/or any Subsidiary, the date of death of a Participant
or, if earlier, on the date elected by a Participant for commencement of
payments, and continuing until the lump sum payment or the last annual install-
ment is made, at which time the entire remaining balance shall be paid to the
Participant. In the case of any Separate Portion, interest to be credited
thereon shall be credited at the end of each calendar quarter or, if earlier,
on the date the Separate Portion and any earnings thereon (a "Separate
Portion Balance") is paid in full, at the rate in effect at the
beginning of each calendar quarter at Society National Bank or its successor for
one year Certificates of Deposit. In the case of the remaining portion of a
Participant's Deferred Compensation Account (the "Remaining Portion"), earnings
thereon shall be credited at the end of each Year or, if earlier, on the date
the Remaining Portion and any earnings thereon are paid in full, at the rate
determined in accordance with Section 4 of this Article for the corresponding
period, except that, in the case of a final payment or installment payable as
of a date other than December 31, earnings thereon shall be credited using
the rate applicable for the Year immediately preceding the Year in which
the final payment or installment is payable. The lump sum payment or the
first annual installment, as the case may be, shall be made on the March 1 next
following the end of the Year in which the Participant's employment with the
Company
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and/or any Subsidiary terminates or the Particpant's death occurs, unless the
Participant has elected to commence payment on one of the following dates:
(i) a specified date (payment to be made within one month thereafter, but
not earlier than March 1 of the year of the specified date); (ii) the
date of the Participant's retirement and termination of employment is by
retirement (payment to be made within one month thereafter but not earlier
than March 1 of the Year of the Participant's retirement); or (iii) one year
after the date of the Participant's retirement and termination of employment is
by retirement. In the event a Participant makes different elections as to lump
sum payment or a number of equal annual installments or as to the time for
commencement of payments with respect to compensation deferred for different
years, for purposes of determining the amount to be paid under each election,
the Participant shall be treated as having a separate Deferred Compensation
Sub-Account for compensation deferred pursuant to differing elections.
6. Death of Participant. In the event of the death of a
Participant, the amount of the Participant's Deferred Compensation Account shall
be paid to the Beneficiary, designated in a writing in the form attached hereto
as Exhibit C, in accordance with the Participant's Election Agreement and
Section 5 of this Article. A Participant's Beneficiary designation may be
changed at any time prior to his death by execution and delivery of a new
beneficiary designation form. The Beneficiary designation on file with the
Company at the time of the Participant's death which bears the lates date
shall govern, and any Beneficiary designation received thereafter shall be
disregarded. In the absence of a Beneficiary designation or the failure of a
Beneficiary to survive the Participant, the amount of the Deferred Compensation
Account shall be paid to the Participant's estate in a lump sum ninety days
after the appointment of an executor or administrator, notwithstanding the
Election Agreement and Section 5 of this Article. In the event of the death
of a Beneficiary after the death of the Participant,
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the remaining amount of the Deferred Compensation Account shall be paid to the
Beneficiary's estate in a lump sum ninety days after the appointment of an
executor or administrator.
7. Small Payments. Notwithstanding the foregoing, if the annual
installment payments elected by a Participant would result in an annual payment
of less than $500.00, the entire amount of the Deferred Compensation Account
shall be paid in a lump sum in accordance with Section 5 of this Article.
8. Acceleration. Notwithstanding the foregoing, the Compensation
Committee of the Board of Directors may, in its sole discretion, accelerate the
making of payment of the amount of a Participant's Deferred Compensation Account
in the event of financial hardship of the Participant due to causes not within
the control of the Participant. In addition, the entire amount of the
Participants' Deferred Compensation Accounts will be paid in a lump sum to the
Participants or their Beneficiaries in the event of the acquisition of
substantially all of the assets of the Company or more than fifty percent
(50%) of its stock by any person, firm, corporation or group of related
corporations, in a transaction or transactions not approved by the Board of
Directors of the Company if, and to the extent that, the Compensation Committee
of the Board of Directors determines, prior to the conclusion of the foregoing
transaction or transactions, that accelerating the foregoing payments would be
in the best interests of the Participants.
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ARTICLE III
ADMINISTRATION
The Company shall be responsible for the general administration of
the Plan and for carrying out the provisions hereof. The Company shall have all
such powers as may be necessary to carry out the provisions of the Plan,
including the power to determine all questions relating to eligibility for
and the amount in the Deferred Compensation Account and all questions
pertaining to claims for benefits and procedures for claim review; to resolve
all other questions arising under the Plan, including any
questions of construction; and to take such further action as the Company shall
deem advisable in the administration of the Plan. The actions taken and the
decisions made by the Company hereunder shall be final and binding upon all
interested parties. In accordance with the provisions of Section 503 of the
Employee Retirement Income Security Act of 1974, the Company shall provide a
procedure for handling claims of Participants or their Beneficiaries under this
Plan. Such procedure shall be in accordance with regulations issued by the
Secretary of Labor and shall provide adequate written notice within a reasonable
period of time with respect to the denial of any such claim as well as a
reasonable opportunity for a full and fair review by the Company of any
such denial. The Company shall prepare and deliver to each participant by March
1 of each Year, a statement of his Deferred Compensation Account.
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ARTICLE IV
AMENDMENT AND TERMINATION
The Company reserves the right to amend or terminate the Plan at any
time by action of its Board of Directors; provided, however, that no such action
shall modify any election by a Participant or deny any benefit under the Plan
applicable to Compensation deferred by a Participant prior to the date of such
amendment or termination unless the Participant consents thereto.
ARTICLE V
MISCELLANEOUS
1. Nonalienation of Deferred Compensation. No Participant or
Beneficiary shall encumber or dispose of his right to receive any payments
hereunder, without the written consent of the Company. If a Participant or
Beneficiary without the written consent of the Company attempts to assign,
transfer, alienate or encumber his right to receive any payment hereunder
or permits the same to be subject to alienation, garnishment, attachment,
execution or levy of any kind, then thereafter during the life of
such Participant or Beneficiary and also during any period in which any
Participant or Beneficiary is incapable in the judgment of the Company of
attending to his financial affairs, any payment which the Company is required
to make hereunder may be made, in the discretion of the Company, directly to
him or to any other person for his use or benefit or that of his dependents
(if any) including any person furnishing goods or services to or for his use
or benefit or the use or benefit of his dependents (if any).
Each such payment may be made without the intervention of a guardian, the
receipt of the payee shall constitute a complete acquittance to the Company with
respect thereto, and neither the Company, nor any Subsidiary shall have any
responsibility for the proper application thereof.
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2. Plan Noncontractual. Nothing herein contained shall be
construed as a commitment or agreement on the part of
any person employeed by the Company or
any Subsidiary to continue his employment with the Company or Subsidiary, and
nothing herein contained shall be construed as a commitment or agreement on the
part of the Company or any Subsidiary to continue the employment or the annual
rate of compensation of any such person for any period, and all Employees shall
remain subject to discharge to the same extent as if the Plan had never been put
into effect.
3. Interest of Employee. The obligation of the Company under the
Plan to make payment of amounts reflected on the Deferred Compensation Account
merely constitutes the unsecured promise of the Company to make payments from
its general assets as provided herein, and no Participant or Beneficiary shall
have any interest in, or a lien or prior claim upon, any property of the
Company or any Subsidiary.
4. Claims of Other Persons. The provisions of the Plan shall in no
event be construed as giving any person, firm or corporation any legal or
equitable right as against the Company or any Subsidiary, their officers,
employees, or directors, except any such rights as are specifically provided for
in the Plan or are hereafter created inaccordance with the terms and provisions
of the Plan.
5. Severability. The invalidity and unenforceability of any
particular provision of the Plan shall not affect any other provision hereof,
and the Plan shall be construed in all respects as if such invalid or
unenforceable provision were omitted herefrom.
6. Governing Law. The provisions of the Plan shall be governed and
construed in accordance with the laws of the State of Delaware.
7. Prior Plan Provisions. Notwithstanding any other provision
herein to the contrary, any provision of this plan as in effect prior to this
amendment and restatement as of October 1, 1991 (the "Prior Plan Provisions"),
including, without limitation, any amendment to the Prior Plan Provisions made
before or after this amendment and restatement, that operates with respect to
periods or events occurring
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prior to the effective date of this amendment and restatement of the Plan shall
if applicable and as appropriate, be taken into account under the Plan as
amended and restated herein, including, without limitation, any elections,
consents, "crediting" of Deferred Compensation Accounts, conversion of "Book
Value Shares" to "dollars," and effective date and transition provisions of any
amendment to the Prior Plan Provisions.
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Exhibit A
ALLTEL CORPORATION
DEFERRED COMPENSATION PLAN
EXAMPLE OF DEFERRAL
I. Assumptions
December 31, 19X1 Book Value* = $14 Market Value** = $30
December 31, 19X2 Book Value* = $16 Market Value** = $33
December 31, 19X3 Book Value* = $17 Market Value** = $31
December 31, 19X4 Book Value* = $19 Market Value** = $36
December 31, 19X5 Book Value* = $21 Market Value** = $39
Participant elects to defer $12,000 for 19X2.
Common stock cash dividends = $.32 per share per quarter, payable to
shareholders of record 3 days after the end of the quarter.
Participant elects payment in lump sum one month after retirement.
Participant retires as of January 1, 19X6.
Certificate of Deposit rate is 8.25% per annum.
II. Results***
19X2
December 31, 19X2 - The Participant's Deferred Compensation Account for the
19X2 Year has $12,000 deferred in 19X2.
The percentage increase in the value of the Participant's Deferred
Compensation Account for 19X2 is the greater of A or B, as follows:
A. 19X2 dividends per share/19X1 Book Value per share $1.28/$14 = 9.14%
* Method of computing Book Value is shown in Exhibit A-1.
** Market Value as of the last trading day of the Company's fiscal year.
*** Rounded to the nearest hundredth.
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B. 1. (a) Market Value of share at 12/31/X1 = $30
(b) Market Value of share at 12/31/X2 = $33
(c) Highest prior year-end Market Value per share does not
apply.
Percentage change in Market Value between (a) and (b) = 10.00%
2. 19X2 dividends per share/19X1 Market Value per share $1.28/$30 =
4.27%
Total percentage increase is the sum of B.1. and B.2. above = 14.27%
The value of the Deferred Compensation Account is increased by $12,000 x
14.27%, which equals 1,712.40.
19X3
December 31, 19X3 - The Participant's 19X2 Deferred Compensation Account
has $13,712.40.
The percentage increase in the value of the Participant's 19X2 Deferred
Compensation Account for 19X3 is the greater of A or B, as follows:
A. 19X3 dividends per share/19X2 Book Value per share $1.28/$16 = 8.00%
B. 1. (a) Market Value of share at 12/31/X2 = $33
(b) Market Value of share at 12/31/X3 = $31
(c) Highest prior year-end Market Value per share does not
apply.
Percentage change in Market Value between (a) and (b) = (6.06%)%
2. 19X3 dividends per share/Market Value per share $1.28/$33 = 3.88%
Total percentage increase (decrease) of B.1. and B.2. above = (2.18%)
The value of the Deferred Compensation Account is increased by $13,712.40 x
8.00%, which equals $1,096.99.
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19X4
December 31, 19X4 -The Participant's 19X2 Deferred Compensation Account has
$14,809.39.
The percentage increase in the value of the Participants 19X2 Deferred
Compensation Account for 19X4 is the greater of A or B as follows:
A. 19X4 dividends per share/19X3 Book Value per share $1.28/$17 = 7.53%
B. 1. (a) Market Value of share at 12/31/X3 = $31
(b) Market Value of share at 12/31/X4 = $36
(c) Highest prior year-end Market Value per share = $33 (19X2)
Percentage change in Market Value between (a) and (b) = 16.13%
If (c) is greater than (a), however, the percentage change will
be the greater of the percentage change between (c) and (b), or
0%.
Percentage change in Market Value between (c) and (b) = 9.09%.
2. 19X4 dividends per share/19X3 Market Value per share $1.28/$31 =
4.13%
Total percentage increase (decrease) of B.1. and B.2. above = 13.22%
The value of the Deferred Compensation Account is increased by $14,809.39 x
13.22%, which equals $1,957.80.
19X5
December 31, 19X5 -The Participant's 19X2 Deferred Compensation Account has
$16,767.19.
The percentage increase in the value of the Participant's 19X2 Deferred
Compensation Account for 19X5 is the greater of A or B as follows:
A. 19X5 dividends per share/19X4 Book Value per share $1.28/$19 = 6.74%
B. 1. (a) Market Value of share at 12/31/X4 = $36
(b) Market Value of share at 12/31/X5 = $39
(c) Highest prior year-end Market Value per share does not
apply.
Percentage change in Market Value between (a) and (b) = 8.33%
2. 19X5 dividends per share/19X4 Market Value per share $1.28/$36 =
3.56%
Total percentage increase (decrease) of B.1. and B.2. above = 11.89%
The value of the Deferred Compensation Account is increased by $16,767.19 x
11.89%, which equals $1,993.62.
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19X6
January 1, 19X6 - The value of the Participant's 19X2 Deferred Compensation
Account is $18,760.81.
March 1, 19X6 - The Participant's 19X2 Deferred Compensation Account has
$18,760.81 + $257.96 interest (two months at 8.25%). $19,018.77 is paid to
the Participant on March 1, 19X6, based on a deferral of $12,000 during
19X2.
NOTE:
If the above example were to start with an election made after February 17,
1993, the first payment on March 1, 19X6 would include two months earnings
at 11.89%, (the prior years earnings rate), instead of the two months
interest at 8.25% as shown above.
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Exhibit A-1
ALLTEL CORPORATION
EXAMPLE OF
BOOK VALUE PER SHARE COMPUTATION
Audited Consolidated Accounts on As of
the Books of the Company December 31, 19X1
Common Stock $ 79,219,000
plus
Additional Capital 316,714,000
plus
Retained Earnings 609,402,000
equals
Total Book Value $1,005,335,000
Total Common Shares Authorized,
Issued and Outstanding
(Excludes Treasury Shares)
at December 31 79,219,000
Book Value Per Share $12.69
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Exhibit B
EXECUTIVE DEFERRED COMPENSATION PLAN
ELECTION AGREEMENT
I, ,
hereby elect to participate in the ALLTEL Corporation Deferred Compensation
Plan, as amended (the "Plan"), with respect to the Compensation which I may
receive from the Company or a Subsidiary for services rendered in the Year
ending December 31, .
I hereby irrevocably elect to defer under the Plan the payment
of percent ( %) of the Compensation which I otherwise would be
entitled to receive for such Year and authorize the Company to credit my
Deferred Compensation Account under the Plan to reflect such amount.
I understand that execution of this irrevocable Election
Agreement shall not be construed as giving me any rights to receive any
Compensation or right to be retained in the employ of the Company or a
Subsidiary.
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Please defer the percentage of my Compensation specified above for
the following deferral term (check one):
1. UNTIL MARCH 1, NEXT FOLLOWING THE END OF THE YEAR IN WHICH MY
EMPLOYMENT WITH THE COMPANY TERMINATES. (I understand that if
I make this election, and, for example, terminate my employment
on June 1 of a Year, my Deferred Compensation Account
for this deferral will be credited with earnings thereon, at
the rate determined in accordance with Article II, Section 5,
of the Plan, and a payment will be made to me on March 1, of
the following Year.)
2. UNTIL THE DATE OF MY RETIREMENT. This election is effective
only if termination of employment is by retirement.
If not, election 1 will automatically apply. A payment will be
made within one month after retirement, but not earlier than
March 1 of the year of my retirement. (I understand that
if I make this election and, for example, retire on June 1 of
a Year, my Deferred Compensation Account for this deferral will
be credited with earnings thereon, at the rate determined in
accordance with Article II, Section 5 of the Plan, and a
payment will be made to me by July 1. On the other hand, if I
retire on December 31 of a Year, my Deferred Compensation
Account for this deferral will be credited with earnings in
the manner described above, as of the next day, January 1, and
a payment will be made to me on the following March 1.)
3. UNTIL ONE YEAR AFTER THE DATE OF MY RETIREMENT. This election
is effective only if termination of employment is by retirement.
If not, election 1 will automatically apply. (I understand
that if I make this election, and, for example, retire on June
1 of a Year, my Deferred Compensation Account for this
deferral will be credited with earnings thereon, at the
rate determined in accordance with Article II, Section 5, of
the Plan, and a payment will be made to me on June 1 of the
following Year.)
4. UNTIL (SPECIFY DATE).
Payment will be made within one month after the specified
date, but not earlier than March 1 of the year of the specified
date. A deferral term of one year or more, with payout during
active employment, is permissible under the Plan. (I
understand that if I make this election and, for example,
specify January 1, 19X6 as the payment date, my Deferred
Compensation Account for this deferral will be credited with
earnings thereon, at the rate determined in accordance with
Article II, Section 5, of the Plan, and a payment will be made
to me on March 1, 19X6. If I specify any date after
January 1 of a Year, my Deferred Compensation Account for this
deferral will be credited with earnings in the manner described
above, and a payment will be made to me as soon as possible,
but within one month of the specified date.)
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Please make payment of the above-specified percentage of my
Compensation together with all amounts reflected on my Deferred Compensation
Account attributable thereto in accordance with Section 4
of Article II of the Plan as follows (check one):
1. Pay in a lump sum on the date checked above.
2. Pay in equal annual installments, beginning on the
date elected above. The number of annual installments cannot
exceed 15.
I acknowledge that I have reviewed the Plan and understand that my
participation will be subject to the terms and conditions in the Plan.
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I acknowledge that I have been advised to consult with my own
tax and estate planning advisors before making this election to defer in order
to determine the tax effect of my participation in the Plan and its effect in
conjunction with the other benefits of the Company or a Subsidiary to which
I may be entitled.
Dated this day of , .
(Signature)
(Print or type name)
The foregoing Election to Participate is
acknowledged as of the date of execution
above written.
ALLTEL CORPORATION
By
Title:
* * * * *
I hereby elect not to participate in the Plan with respect to
the Compensation which I may receive from the Company or a Subsidiary for
services rendered in the Year ending December 31, .
Dated this day of , .
(Signature)
(Print or type name)
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Exhibit C
DEFERRED COMPENSATION PLAN
BENEFICIARY DESIGNATION
In accordance with the terms and conditions of the ALLTEL
Corporation Executive Deferred Compensation Plan (the "Plan"),
I hereby designate the person indicated below as my beneficiary to
receive the amounts payable under said Plan.
Name Address Relationship
I hereby expressly revoke all prior designations of beneficiaries, reserve
the right to change the beneficiary herein designated, and agree that the
rights of said beneficiary shall be subject to the terms of said Plan.
(Date) (Signature)
(Print or type name)
The foregoing Beneficiary Designation
is acknowledged as of the date of
execution above written.
ALLTEL CORPORATION
By
Title:
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Exhibit 10(f)
ALLTEL CORPORATION
DEFERRED COMPENSATION PLAN FOR DIRECTORS
(October 1, 1993 Restatement)
This plan is hereby amended and restated by ALLTEL Corporation
(the "Company"), effective as of October 1, 1993, and is intended to be a
continuation of the plan originally effective as of December 1, 1982, as
amended. The purpose of this deferred compensation plan is to provide
Directors of ALLTEL Corporation with the option to defer payment of their
directors' Fees.
ARTICLE I
DEFINITIONS
For the purposes hereof, the following words and phrases shall have
the meanings indicated:
1. "Beneficiary" shall mean the beneficiary or beneficiaries
designated in accordance with the Plan to receive the amount of the
remaining balance of the Deferred Compensation Account in the event of the
death of the Participant prior to his receipt of the entire amount of the
Deferred Compensation Account.
2. "Book Value" of the Company's common stock shall mean the
book value of each share of ALLTEL Corporation common stock as of the
end of the Year as reflected in its published consolidated financial
statements and as computed in accordance with Exhibit A-1 attached
hereto.
3. "Company" shall mean ALLTEL Corporation, a Delaware
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corporation, its successors and survivors resulting from any
acquisition of ALLTEL Corporation with or by any other corporation or other
entity or enterprise.
4. "Deferral Year" shall mean a Year for which Fees are deferred
in accordance with the Plan and in which, in the absence of the deferral, the
Fees otherwise would be paid to the Participant.
5. "Deferred Compensation Account" shall mean the bookkeeping
account on which the amount of Fees that are deferred by a Participant and
any adjustments thereto in accordance with the Plan, shall be recorded. A
separate Deferred Compensation Account shall be established for each
Deferral Year.
6. "Director" shall mean any Director of the Company who is not
an employee of the Company or of any Subsidiary.
7. "Fees" shall mean the director's fees which may be paid to a
Director by the Company with respect to a Year.
8. "Market Value" shall mean the closing sales price of one
share of the common stock of the Company on the New York Stock Exchange (or
such other securities exchange on which the shares of common stock of the
Company are traded) on the last trading day of the Company's fiscal year. If
the shares of common stock of the Company are not listed for trading on a
securities exchange on the last business day of the Company's fiscal year,
then Market Value shall mean the fair market value of one share of common
stock of the Company on the last day of the Company's fiscal year as
determined by the Board of Directors of the Company in its sole and
absolute discretion.
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9. "Participant" shall mean a Director who has elected to defer
payment of all or a portion of his Fees for a Year in accordance with the
Plan.
10. "Plan" shall mean the deferred compensation plan, as set forth
herein, together with all amendments hereto, which Plan shall be called the
"ALLTEL Corporation Deferred Compensation Plan for Directors".
11. "Subsidiary" shall mean a corporation of which 50% or more
of the issued and outstanding voting stock is owned by the Company or by a
Subsidiary.
12. "Year" shall mean the Company's fiscal year for tax and
financial reporting purposes.
ARTICLE II
DEFERRAL OF FEES
1. Eligibility. Any Director shall be entitled to elect to
defer the payment of all or a portion of his Fees for any Year in accordance
with Section 2 of this Article. A Director's entitlement to defer shall cease
with respect to the Year following the Year in which he retires, dies, or
otherwise ceases to be a Director of the Company.
2. Election to Defer. A Director who desires to defer the
payment of all or a portion of his Fees for any Year must complete and
deliver to the Company no later than the last day of the Year prior to the
Year for which the Fees would otherwise be paid an Election Agreement in
the form attached hereto as Exhibit B; provided, however, that any person
hereafter elected to the Board of Directors who was not a Director on the
preceding December 31 may make an election to defer payment of his Fees,
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payable subsequent to delivery of an Election Agreement, by delivering the
Election Agreement to the Company within 30 days of his election to the
Board of Directors. A Director who timely delivers to the Company the
Election Agreement shall be a Participant. An Election Agreement must be
timely completed and delivered for each Year for which Fees are desired to
be deferred, and shall be irrevocable on and after the beginning of the period
to which it relates.
3. Amount Deferred; Period of Deferral. A Participant shall
designate on the Election Agreement the percentage of his Fees for the Year
that he wishes to defer. That percentage of Fees shall be deferred until the
Director retires, dies or otherwise ceases to be a Director, or until the date
specified by the Participant, at which time payment of the amount deferred
shall be made in accordance with Sections 5 or 6 of this Article.
4. Deferred Compensation Account. The amount of Fees (if any)
a Participant elects to defer for each Deferral Year shall be credited to the
Deferred Compensation Account of the Participant for that Deferral Year on
the date the Fees otherwise would have been paid to the Participant. As of
the close of business on December 31 beginning with the Deferral Year
ending December 31, 1990, on each December 31 occurring thereafter, and
prior to the date specified by the last sentence of this Section 4, the
Participant's Deferred Compensation Account for the Deferral Year shall be
credited with earnings in an amount, if any, equal to the greater of (a) or (b)
below:
(a) In the case of the Deferral Year,the total Fees deferred for
that Year and,in the case of any Year subsequent to that Deferral
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Year, the balance of the Deferred Compensation Account as of the
close of business on the immediately preceding December 31 after
the crediting required by this Section 4, if any, multiplied
by a percentage determined by dividing the cash dividends paid
during the current Year (the Year for which the crediting, if
any, is to be made) on one share of the Company's common
stock by the Book Value for the Year immediately preceding such
current Year; or
(b) In the case of the Deferral Year, the total Fees deferred
for that Deferral Year and, in the case of any Year subsequent to
that Deferral Year, the balance of the Deferred Compensation
account as of the close of business on the immediately preceding
December 31 after the crediting required by this Section 4, if
any, multiplied by a percentage equal to the sum of (i) and (ii)
below:
(i) the percentage increase (if any) in the Market Value
from the Year immediately preceding the current Year (the
Year for which the crediting, if any, is to be made) to
the current Year, except that, if the Market Value for
such immediately preceding Year is less than the Market
Value used in calculating earnings for any preceding Year,
then the foregoing percentage increase shall instead be
the percentage increase (if any) in the Market Value from
the prior highest market value used in calculating
earnings to the Market Value for the current Year; and
(ii) a percentage determined by dividing the cash
dividends paid during the current Year (the Year for which
the crediting, if any, is to be made) on one share of the
Company's common stock by the Market Value for the Year
immediately preceding the current Year.
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In the event of any change in the Company's fiscal year, such
appropriate adjustments to the crediting provided for in this Section 4 to
reflect such change in fiscal year shall be made as the Board of Directors of
the Company in its sole and absolute discretion shall determine. In addition,
the Board of Directors shall make appropriate adjustments to cash dividends,
Market Value, and Book Value to reflect stock splits, stock dividends,
recapitalizations, mergers, acquisitions, and similar changes.
As of the close of business on the date a Participant ceases to
be a Director of the Company, or if earlier, on the date elected by the
Participant for commencement of payments, the then current balance of his
Deferred Compensation Account(s) shall be paid pursuant to Section 5 or
Section 6 of Article II. If such date occurs on any date other than December
31, the portion of his Deferred Compensation Account(s) consisting of Fees
and earnings previously credited thereon that related to elections made by
the Participant prior to February 18, 1993 (the "Separate Portion") shall not
be credited as provided in this Section 4 for the Year in which such date
occurs, but instead shall be credited with interest on the basis specified in
Section 5 of this Article II, from January 1 of the Year in which such date
occurs through such date (after which the provisions of Section 5 of this
Article II shall apply).
5. Payment of Deferred Compensation. The amount of the
Participant's Deferred Compensation Account determined in accordance with
Section 4 of this Article, together with any interest and earnings credited to
the Deferred Compensation Account in accordance with this Section 5, shall
be paid to the Participant in a lump sum or in a number of approximately
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equal annual installments (not more than 15), as designated by the
Participant on the Election Agreement. The amount of a Deferred
Compensation Account remaining unpaid shall bear interest or be credited
with earnings, beginning on the date a Participant ceases to be a Director or,
if earlier, on the date elected by a Participant for commencement of
payments, and continuing until the lump sum payment or the last annual
installment is made, at which time the entire remaining balance shall be paid
to the Participant. In the case of any Separate Portion, interest to be
credited thereon shall be credited at the end of each calendar quarter or, if
earlier, on the date the Separate Portion and any earnings thereon (a
"Separate Portion Balance") is paid in full, at the rate in effect at the
beginning of each calendar quarter at Society National Bank or its successor
for one-year Certificates of Deposit. In the case of the remaining portion of
a Participant's Deferred Compensation Account (the "Remaining Portion"),
earnings thereon shall be credited at the end of each Year or, if earlier, on
the date the Remaining Portion and any earnings thereon are paid in full, at
the rate determined in accordance with Section 4 of this Article for the
corresponding period, except that, in the case of a final payment or
installment payable as of a date other than December 31, earnings thereon
shall be credited using the rate applicable for the Year immediately preceding
the Year in which the final installment is payable. The lump sum payment or
the first annual installment, as the case may be, shall be made on the March
1 next following the end of the Year in which the Participant ceases to be a
Director, unless the Participant has elected to commence payment on one of
the following dates: (i) a specified date (payment to be made within one
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month thereafter, but not earlier than March 1 of the Year of the specified
date); (ii) the date one month after the date the Participant ceases to be a
Director, but not earlier than March 1 of the Year in which the Participant
ceases to be a Director; (iii) the date one year after the date the Participant
ceases to be a Director; and (iv) the later to occur of the date one month
after the date the Participant ceases to be a Director and the date of the
Participant's 70th birthday, (payment to be made within one month of the
Participant's 70th birthday, if applicable, but in either event not earlier than
March 1 of the Year in which the Participant ceases to be a Director or the
Year of the Participant's 70th birthday). In the event a Participant makes
different elections as to lump sum payments or number of equal annual
installments or as to the time for commencement of payments with respect
to Fees deferred for different Years, for purposes of determining the
amounts to be paid under each election, the Participant shall be treated as
having a separate Deferred Compensation Sub-Account for Fees deferred
pursuant to differing elections.
6. Death of Participant. In the event of the death of a
Participant, the amount of the Participant's Deferred Compensation Account
shall be paid to the Beneficiary, designated in a writing in the form attached
hereto as Exhibit C, in accordance with the Participant's Election Agreement
and Section 5 of this Article. A Participant's Beneficiary designation may be
changed at any time prior to his death, by execution and delivery of a new
Beneficiary designation form. The Beneficiary designation on file with the
Company at the time of the Participant's death which bears the latest date
shall govern, and any Beneficiary designation received thereafter shall be
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disregarded. In the absence of a Beneficiary designation or the failure of a
Beneficiary to survive the Participant, the amount of the Deferred
Compensation Account shall be paid to the Participant's estate in a lump
sum ninety days after the appointment of an executor or administrator,
notwithstanding the Election Agreement and Section 5 of this Article. In the
event of the death of a Beneficiary after the death of the Participant, the
remaining amount of the Deferred Compensation Account shall be paid to
the Beneficiary's estate in a lump sum ninety days after the appointment of
an executor or administrator.
7. Small Payments. Notwithstanding the foregoing, if the annual
installment payments elected by a Participant would result in an annual
payment of less than $500.00, the entire amount of the Deferred
Compensation Account shall be paid in a lump sum in accordance with
Section 5 of this Article.
8. Acceleration. Notwithstanding the foregoing, the entire
amount of a Participant's Deferred Compensation Account will be paid in a
lump sum to the Participant or his Beneficiary in the event of the acquisition
of substantially all of the assets of the Company or more than fifty percent
(50%) of its stock by any person, firm, corporation or group of related
corporations, in a transaction or transactions not approved by the Board of
Directors of the Company.
ARTICLE III
ADMINISTRATION
The Company shall be responsible for the general administration
of the Plan and for carrying out the provisions hereof. The Company shall
have all such powers as may be necessary to carry out the provisions of the
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Plan, including the power to determine all questions relating to eligibility for
and the amount in the Deferred Compensation Account and all questions
pertaining to claims for benefits and procedures for claim review; to resolve
all other questions arising under the Plan, including any questions of
construction; and to take such further action as the Company shall deem
advisable in the administration of the Plan. The actions taken and the
decisions made by the Company hereunder shall be final and binding upon all
interested parties. In accordance with the provisions of Section 503 of the
Employee Retirement Income Security Act of 1974, the Company shall
provide a procedure for handling claims of Participants or their Beneficiaries
under this Plan. Such procedure shall be in accordance with regulations
issued by the Secretary of Labor and shall provide adequate written notice
within a reasonable period of time with respect to the denial of any such
claim as well as a reasonable opportunity for a full and fair review by the
Company of any such denial. The Company shall prepare and deliver to
each Participant by March 1 of each Year a statement of his Deferred
Compensation Account.
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ARTICLE IV
AMENDMENT AND TERMINATION
The Company reserves the right to amend or terminate the Plan at
any time by action of its Board of Directors; provided, however, that no such
action shall modify any election by a Participant or deny any benefit under
the applicable Plan to Fees deferred by a Participant prior to the date of such
amendment or termination, unless the Participant consents thereto.
ARTICLE V
MISCELLANEOUS
1. Nonalienation of Deferred Compensation. No Participant or
Beneficiary shall encumber or dispose of his right to receive any payments
hereunder, without the written consent of the Company. If a Participant or
Beneficiary without the written consent of the Company attempts to assign,
transfer, alienate or encumber his right to receive any payment hereunder or
permits the same to be subject to alienation, garnishment, attachment,
execution or levy of any kind, then thereafter during the life of such
Participant or Beneficiary and also during any period in which any Participant
or Beneficiary is incapable in the judgment of the Company of attending to
his financial affairs, any payment which the Company is required to make
hereunder may be made, in the discretion of the Company, directly to him or
to any other person for his use or benefit or that of his dependents, if any,
including any person furnishing goods or services to or for his use or benefit
or the use or benefit of his dependents (if any). Each such payment may be
made without the intervention of a guardian, the receipt of the payee shall
constitute a complete acquittance to the Company with respect thereto, and
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neither the Company, nor any Subsidiary, shall have any responsibility for
the proper application thereof.
2. Interest of Director. The obligation of the Company under the
Plan to make payment of amounts reflected on the Deferred Compensation
Account merely constitutes the unsecured promise of the Company to make
payments from its general assets as provided herein, and no Participant or
Beneficiary shall have any interest in, or a lien or prior claim upon, any
property of the Company.
3. Claims of Other Persons. The provisions of the Plan shall in
no event be construed as giving any person, firm or corporation any legal or
equitable right as against the Company, its officers, employees, or directors,
except any such rights as are specifically provided for in the Plan or are
hereafter created in accordance with the terms and provisions of the Plan.
4. Severability. The invalidity and unenforceability of any
particular provision of the Plan shall not affect any other provision hereof,
and the Plan shall be construed in all respects as if such invalid or
unenforceable provision were omitted herefrom.
5. Governing Law. The provisions of the Plan shall be governed
and construed in accordance with the laws of the State of Delaware.
6. Prior Plan Provisions. Notwithstanding any other provision
herein to the contrary, any provision of this plan as in effect prior to this
amendment and restatement as of October 1, 1991 (the "Prior Plan
Provisions"), including, without limitation, any amendment to the Prior Plan
Provisions made before or after this amendment and restatement, that
operates with respect to periods or events occurring prior to the effective
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date of this amendment and restatement of the Plan shall, if applicable and
as appropriate, be taken into account under the Plan as amended and
restated herein, including, without limitation, any elections, consents,
"crediting" of Deferred Compensation Accounts, conversion of "Book Value
Shares" to "dollars," and effective date and transition provisions of any
amendment to the Prior Plan Provisions.
Exhibit A
ALLTEL CORPORATION
DEFERRED COMPENSATION PLAN
EXAMPLE OF DEFERRAL
I. Assumptions
December 31, 19X1 Book Value* = $14 Market Value** = $30
December 31, 19X2 Book Value* = $16 Market Value** = $33
December 31, 19X3 Book Value* = $17 Market Value** = $31
December 31, 19X4 Book Value* = $19 Market Value** = $36
December 31, 19X5 Book Value* = $21 Market Value** = $39
Participant elects to defer $12,000 for 19X2.
Common stock cash dividends = $.32 per share per quarter, payable to
shareholders of record 3 days after the end of the quarter.
Participant elects payment in lump sum one month after retirement.
Participant retires as of January 1, 19X6.
Certificate of Deposit rate is 8.25% per annum.
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II. Results***
19X2
December 31, 19X2 - The Participant's Deferred Compensation Account
for the 19X2 Year has $12,000 deferred in 19X2.
The percentage increase in the value of the Participant's Deferred
Compensation Account for 19X2 is the greater of A or B, as follows:
A. 19X2 dividends per share/19X1 Book Value per share $1.28/$14 =
9.14%
* Method of computing Book Value is shown in Exhibit A-1.
** Market Value as of the last trading day of the Company's fiscal year.
*** Rounded to the nearest hundredth.
<PAGE>
B. 1. (a) Market Value of share at 12/31/X1 = $30
(b) Market Value of share at 12/31/X2 = $33
(c) Highest prior year-end Market Value per share does not apply.
Percentage change in Market Value between (a) and (b) = 10.00%
2. 19X2 dividends per share/19X1 Market Value per share $1.28/$30
= 4.27%
Total percentage increase is the sum of B.1. and B.2. above =
14.27%
The value of the Deferred Compensation Account is increased by
$12,000 x 14.27%, which equals 1,712.40.
19X3
December 31, 19X3 - The Participant's 19X2 Deferred Compensation
Account has $13,712.40.
The percentage increase in the value of the Participant's 19X2 Deferred
Compensation Account for 19X3 is the greater of A or B, as follows:
A. 19X3 dividends per share/19X2 Book Value per share $1.28/$16
= 8.00%
B. 1. (a) Market Value of share at 12/31/X2 = $33
112
(b) Market Value of share at 12/31/X3 = $31
(c) Highest prior year-end Market Value per share does not apply.
Percentage change in Market Value between (a) and (b) = (6.06%)%
2. 19X3 dividends per share/Market Value per share $1.28/$33 =
3.88%
Total percentage increase (decrease) of B.1. and B.2. above =
(2.18%)
The value of the Deferred Compensation Account is increased by
$13,712.40 x 8.00%, which equals $1,096.99.
113
19X4
December 31, 19X4 - The Participant's 19X2 Deferred Compensation
Account has $14,809.39.
The percentage increase in the value of the Participants 19X2 Deferred
Compensation Account for 19X4 is the greater of A or B as follows:
A. 19X4 dividends per share/19X3 Book Value per share $1.28/$17
= 7.53%
B. 1. (a) Market Value of share at 12/31/X3 = $31
(b) Market Value of share at 12/31/X4 = $36
(c) Highest prior year-end Market Value per share = $33 (19X2)
Percentage change in Market Value between (a) and (b) = 16.13%
If (c) is greater than (a), however, the percentage change will be the
greater of the percentage change between (c) and (b), or 0%.
Percentage change in Market Value between (c) and (b) = 9.09%.
2. 19X4 dividends per share/19X3 Market Value per share $1.28/$31
= 4.13%
Total percentage increase (decrease) of B.1. and B.2. above =
13.22%
The value of the Deferred Compensation Account is increased by
$14,809.39 x 13.22%, which equals $1,957.80.
19X5
December 31, 19X5 - The Participant's 19X2 Deferred Compensation
Account has $16,767.19.
The percentage increase in the value of the Participant's 19X2 Deferred
Compensation Account for 19X5 is the greater of A or B as follows:
A. 19X5 dividends per share/19X4 Book Value per share $1.28/$19
= 6.74%
B. 1. (a) Market Value of share at 12/31/X4 = $36
(b) Market Value of share at 12/31/X5 = $39
(c) Highest prior year-end Market Value per share does not apply.
Percentage change in Market Value between (a) and (b) = 8.33%
2. 19X5 dividends per share/19X4 Market Value per share $1.28/$36
= 3.56%
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Total percentage increase (decrease) of B.1. and B.2. above =
11.89%
The value of the Deferred Compensation Account is increased by
$16,767.19 x 11.89%, which equals $1,993.62.
19X6
January 1, 19X6 - The value of the Participant's 19X2 Deferred
Compensation Account is $18,760.81.
March 1, 19X6 - The Participant's 19X2 Deferred Compensation
Account has $18,760.81 + $257.96 interest (two months at 8.25%).
$19,018.77 is paid to the Participant on March 1, 19X6, based on a
deferral of $12,000 during 19X2.
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Exhibit A-1
ALLTEL CORPORATION
EXAMPLE OF
BOOK VALUE PER SHARE COMPUTATION
Audited Consolidated Accounts on As of
the Books of the Company December 31, 19X1
Common Stock $ 79,219,000
plus
Additional Capital 316,714,000
plus
Retained Earnings 609,402,000
equals
Total Book Value $1,005,335,000
Total Common Shares Authorized,
Issued and Outstanding
(Excludes Treasury Shares)
at December 31 79,219,000
Book Value Per Share $12.69
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Exhibit B
DEFERRED COMPENSATION PLAN FOR DIRECTORS
ELECTION AGREEMENT
I,
, hereby elect to participate in the ALLTEL Corporation Deferred
Compensation Plan for Directors, as amended (the "Plan"), with respect to
the Fees which I may receive from the Company or a Subsidiary for services
rendered in the Year ending December 31, .
I hereby irrevocably elect to defer under the Plan the payment
of percent ( %) of the Fees which I otherwise would be entitled
to receive for such Year and authorize the Company to credit my Deferred
Compensation Account under the Plan to reflect such amount.
Please defer the percentage of my Fees specified above for the
following deferral term (check one):
1. UNTIL MARCH 1, NEXT FOLLOWING THE END OF THE YEAR IN
WHICH I CEASE TO BE A DIRECTOR. (I understand that if I
make this election, and, for example, cease to be a Director on
June 1 of a Year, my Deferred Compensation Account for this
deferral will be credited with earnings thereon, at the rate
determined in accordance with Article II,Section 5,of the Plan,
and a payment will be made to me on March 1, of the following
Year.)
2. UNTIL ONE MONTH AFTER THE DATE I CEASE TO BE A
DIRECTOR. BUT NOT EARLIER THAN MARCH 1 OF THE YEAR
IN WHICH I CEASE TO BE A DIRECTOR. (I understand that if I
make this election and, for example, cease to be a Director on
June 1 of a Year, my Deferred Compensation Account for this
deferral will be credited with earnings thereon, at the rate
determined in accordance with Article II,Section 5,of the Plan,
and a payment will be made to me on July 1 of the same Year.
On the other hand, if I cease to be a Director on December 31
of
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a Year, my Deferred Compensation Account for this deferral will
be credited with earnings in the manner described above, and a
payment will be made to me on the following March 1.)
3. UNTIL ONE YEAR AFTER THE DATE I CEASE TO BE A
DIRECTOR. (I understand that if I make this election, and, for
example, cease to be a Director on June 1 of a Year, my
Deferred Compensation Account for this deferral will be
credited with earnings thereon, at the rate determined in
accordance with Article II, Section 5, of the Plan and a
payment will be made to me on June 1 of the following Year.)
4. UNTIL THE LATER OF THE DATE ONE MONTH AFTER I CEASE
TO BE A DIRECTOR OR THE DATE OF MY 70TH BIRTHDAY. If
my 70th birthday is the operative date, a payment will be made
within one month thereafter, but in neither case will a payment
be made earlier than March 1 of the Year in which I cease to be
a Director or attain age 70. (I understand that if I make this
election, and, for example, my 70th birthday is January 15,
19X6, and I am then still a Director, my Deferred Compensation
Account for this deferral will be credited with earnings
thereon, at the rate determined in accordance with Article II,
Section 5, of the Plan, and a payment will be made one month
later, or by March 1 of the year I cease to be a Director (the
delay being necessary to prepare year-end audited financial
statements). If I am not a Director on January 15, 19X6, my
Deferred Compensation Account for this deferral will be
credited with earnings in the manner described above, and a
payment will be made to me on March 1, 19X6.)
5. UNTIL
(SPECIFY DATE). Payment will be made within one month after
the specified date, but not earlier than March 1 of the year
of the specified date. (I understand that if I make this
election and, for example, specify January 1, 19X6 as the
payment date, my Deferred Compensation Account for this
deferral will be credited with earnings thereon, at the rate
determined in accordance with Article II, Section 5, of the
Plan, and a payment will be made to me on March 1, 19X6, the
delay being necessary to prepare year-end audited financial
statements. If I specify any date after January 1 of a Year,
my Deferred Compensation Account for this deferral will be
credited with earnings in the manner described above, and a
payment will be made to me as soon as possible, but within one
month of the specified date.)
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Please make payment of the above-specified percentage of my Fees
together with all amounts reflected on my Deferred Compensation Account
attributable thereto in accordance with Section 4 of Article II of the Plan as
follows (check one):
1. Pay in a lump sum on the date checked above.
2. Pay in equal annual installments, beginning
on the date elected above. The number of annual installments
cannot exceed 15.
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I acknowledge that I have reviewed the Plan and understand that my
participation will be subject to the terms and conditions contained in the
Plan.
I acknowledge that I have been advised to consult with my own tax
and estate planning advisors before making this election to defer in order to
determine the tax effect of my participation in the Plan.
Dated this day of , .
(Signature)
(Print or type name)
The foregoing Election to Participate is
acknowledged as of the date of execution
above written.
ALLTEL CORPORATION
By
Title:
* * * * *
I hereby elect not to participate in the Plan with respect to the Fees
which I may receive from the Company for the Year ending December 31, .
Dated this day of , .
(Signature)
(Print or type name)
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Exhibit C
DEFERRED COMPENSATION PLAN
BENEFICIARY DESIGNATION
In accordance with the terms and conditions of the ALLTEL
Corporation Deferred Compensation Plan for Directors (the "Plan"), I hereby
designate the person indicated below as my beneficiary to receive the
amounts payable under said Plan.
Name Address Relationship
I hereby expressly revoke all prior designations of
beneficiaries, reserve the right to change the beneficiary herein designated,
and agree that the rights of said beneficiary shall be subject to the terms of
said Plan.
(Date) (Signature)
(Print or type name)
The foregoing Beneficiary Designation is
acknowledged as of the date of execution
above written.
ALLTEL CORPORATION
By
Title:
121
Exhibit 10(k)(5)
AMENDMENT NO. 15
TO
ALLTEL CORPORATION PENSION PLAN
(January 1, 1989 Restatement)
WHEREAS, ALLTEL Corporation (the "Company") amended
and restated the ALLTEL Corporation Pension Plan (the "Plan"), effective
January 1, 1989; and
WHEREAS, the Plan, as amended and restated effective
January 1, 1989, has been amended on fourteen previous occasions; and
WHEREAS, the Company desires further to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED, that the Company
hereby amends the Plan, effective as of close of business on April 30, 1993,
to provide as follows:
The second paragraph of Section 2.01 of the Plan is hereby
amended to provide as follows:
The term "Eligible Employee" shall mean each Employee
of the Employer, except (1) Employees whose period of
Service prior to January 1, 1988 otherwise would have
commenced after the first day of the calendar month
immediately following his sixtieth (60th) birthday and
who did not perform one Hour of Service on or after
January 1, 1988, (2) Employees covered by a collective
bargaining agreement between an Employer and a
representative of such Employees where retirement
benefits were the subject of good faith bargaining
between the parties, unless it is agreed that such
Employees would be eligible to participate in the Plan,
(3) Employees who are covered by an agreement with
the Company which prohibits inclusion in the Plan,
(4) leased employees, (5) on and after May 1, 1993,
Employees of ALLTEL Publishing Corporation, or (6) on
or after May 1, 1993, Employees of Sygnis, Inc.
IN WITNESS WHEREOF, the Company, by its duly authorized
officer, has caused this Amendment to be executed on this 2nd day of April,
1993.
ALLTEL CORPORATION
By:/s/ John L. Comparin
Title: VP - Human Resources
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AMENDMENT NO. 16
TO
ALLTEL CORPORATION PENSION PLAN
(January 1, 1989 Restatement)
WHEREAS, ALLTEL Corporation (the "Company")
amended and restated the ALLTEL Corporation Pension Plan (the "Plan"),
effective January 1, 1989; and
WHEREAS, the Plan, as amended and restated
effective January 1, 1989, has been amended on fifteen previous occasions; and
WHEREAS, the Company desires further to amend
the Plan;
NOW THEREFORE, BE IT RESOLVED, that, effective
as of the effective date, as set forth in a collective bargaining agreement
with respect to participants covered under Appendix I of the Plan or any
amendment or modification thereto, of participation by such participants in any
arrangement described in Section 125 of the Internal Revenue Code of 1986,
as amended, maintained by an Employer, the Company hereby amends Section 1.4 of
Appendix I of the Plan by adding immediately following the first sentence
thereof, the following:
An Employee's cash compensation shall not be affected by any
compensation reduction pursuant to a "cafeteria plan" as defined in
Section 125 of the Code.
IN WITNESS WHEREOF, the Company, by its duly authorized officer,
has caused this Amendment to be executed on this 29th day of April, 1993.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: VP - Human Resources
123
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AMENDED AND RESTATED
AMENDMENT NO. 17
TO
ALLTEL CORPORATION PENSION PLAN
(January 1, 1989 Restatement)
WHEREAS, ALLTEL Corporation (the "Company")
amended and restated the ALLTEL Corporation Pension Plan (the "Plan"),
effective January 1, 1989; and
WHEREAS, the Plan, as amended and restated
effective January 1, 1989, has been amended on sixteen previous occasions; and
WHEREAS, the Company desires further to amend
the Plan; and
WHEREAS, this Amended and Restated Amendment
No. 17 shall supersede in its entirety Amendment No. 17;
NOW THEREFORE, BE IT RESOLVED, that the
Company hereby amends the Plan as follows:
1. Effective as of March 1, 1993, the Plan is
amended by adding immediately following Article XIII thereof, the following
new Article XIV:
ARTICLE XIV
1993 SPECIAL EARLY RETIREMENT PROVISIONS
14.1 General
This Article XIV provides for certain increased benefits with respect
to certain Participants (or former Participants in the case of a
deceased former employee) who satisfy the requirements specified in
this Article XIV for such increased benefits. Except as otherwise
provided in this Article XIV, the provisions of this Article XIV shall
apply notwithstanding any other provision
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of the Plan to the contrary and shall control in the case of any
conflict with any other provision of the Plan.
14.2 Eligibility
In order to be eligible for increased benefits pursuant to this Article
XIV, a Participant must be listed on Schedule A to the Plan.
14.3 Termination of Employment
In order to receive the increased benefits provided under this Article
XIV, a Participant who meets the eligibility requirements of Section
14.2 of this Article XIV must voluntarily terminate his employment with
the Employer (and any other member(S) of the Controlled Group)
as of the Retirement Date applicable to such Participant as specified
on Schedule A to the Plan; provided, however, that such retirement
shall be deemed satisfied by any such Participant whose employment
with the Employer terminates on or prior to his Retirement Date as
specified on Schedule A to the Plan by reason of his
death.
14.4 Increased Benefits
Benefits under the Plan of a Participant who both meets the eligibility
requirements of Section 14.2 of this Article XIV and satisfies the
requirements and conditions of Section 14.3 of this Article XIV shall
be increased, beginning as of the latest of March 1, 1993, the first
day of the month following the month in which such Participant's
Retirement Date as specified on Schedule A to the Plan occurs,
or as specified below in this Section 14.4,
in accordance with the following:
(a) The amount of such Participant's Accrued Pension shall be increased
by an amount equal to the Participant's "Special Early Retirement
Compensation" (as hereinafter defined) multiplied by five-twelfths
(5/12) of one percent. A Participant's "Special Early Retirement
Compensation" shall mean the Participant's annualized base salary
in effect on the day preceding the Partici-pant's termination of
employment with the Employer.
(b) The Pension of any such Participant whose Pension commences prior
to his Normal Retirement Date shall not be reduced for commencement
prior to the month following the month in which such Participant
would (if he survived) attain age 65.
(c) If such Participant is less than age 62 on his Pension commencement
date, he shall receive a supplemental monthly benefit in the
amount of $200 per month payable beginning as of his Pension
commencement date and continuing through the earlier of the month
in which he attains age 62 or the month in which his death occurs.
If such Participant dies prior to his Pension commencement date or
the first
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day of the month in which he would have attained age 62 and is
survived by his Spouse to whom he had been continuously married
for at least one year ending on his date of death, such Spouse
shall receive a supplemental monthly benefit in the amount of $200
per month payable beginning as of the later of the month following
the month in which occurs the Retirement Date applicable to such
Participant as specified on Schedule A to the Plan or the month
following the month in which the Participant's death occurred and
continuing through the end of the month in which the Participant
would have attained age 62.
(d) For purposes of computing the amount of the Qualified
Preretirement Survivor Annuity (if any) (as of the date such
Qualified Preretirement Survivor Annuity otherwise commences under
the Plan) with respect to such a Participant who dies prior to his
Pension commencement date and prior to the month following the
month in which such Participant would (if he survived)
attain age 65, the Pension that would have been payable to the
Participant shall not be reduced for commencement prior
to the month following the month in which such Participant would
(if he survived) attain age 65.
(e) Notwithstanding any other provision of this Article XIV to the
contrary, Sections 1.33 and 1.34 and Article V and the
corresponding provisions of any applicable Appendix to the Plan
shall be applied based upon such Participant's actual age.
(f) The increased benefits payable pursuant to this Article XIV shall
be subject to all generally applicable provisions regarding
payment or benefits and conditions and limitations thereon of the
Plan and of applicable law, including, without limitation,
subsection (f) of Section 1.01.
2. Effective as of March 1, 1993, the Plan is amended by adding
at the end thereof a new Schedule A to provide as set forth on Exhibit 1 to this
Amendment.
IN WITNESS WHEREOF, the Company, by its duly authorized officer,
has caused this Amendment to be executed on this 23rd day of July, 1993.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: VP - Human Resources
126
<PAGE>
Exhibit 1
SCHEDULE A
TO
ALLTEL CORPORATION PENSION PLAN
(JANUARY 1, 1989 RESTATEMENT)
PARTICIPANT'S PARTICIPANT'S
PARTICIPANT'S SOCIAL SECURITY RETIREMENT
NAME NUMBER DATE
127
<PAGE>
AMENDMENT NO. 18
TO
ALLTEL CORPORATION PENSION PLAN
(January 1, 1989 Restatement)
WHEREAS, ALLTEL Corporation (the "Company")
amended and restated the ALLTEL Corporation Pension Plan (the "Plan"), effective
January 1, 1989; and
WHEREAS, the Plan, as amended and restated
effective January 1, 1989, has been amended on eighteen previous occasions; and
WHEREAS, the Company desires further to amend
the Plan;
NOW, THEREFORE, BE IT RESOLVED, the Company
hereby amends the Plan, effective as hereinafter set forth, to provide as
follows:
1. Section 13 of the Plan is hereby amended to add
the following Section 13.17 thereto:
13.17 Employees of Sugar Land Telephone
Company, Perco Telephone Company, SLT Cable TV, Inc., and Metropolitan Houston
Paging Services, Inc.
(a) Effective Date - January 1, 1993.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to IRC Section 401(a)(12) - Not Applicable.
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(j) Miscellaneous - See APPENDIX Q - SPECIAL PROVISIONS APPLICABLE TO
CERTAIN EMPLOYEES OF Sugar Land TELEPHONE COMPANY, PERCO
TELEPHONE COMPANY, SLT CABLE TV, INC., AND METROPOLITAN
HOUSTON PAGING SERVICES, INC., which follows immediately hereafter.
APPENDIX Q
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
Sugar Land TELEPHONE COMPANY, PERCO TELEPHONE COMPANY,
SLT CABLE TV, INC., AND
METROPOLITAN HOUSTON PAGING SERVICES, INC.
Pursuant to the merger a subsidiary of ALLTEL Corporation into
SLT Communications, Inc. with SLT Communications, Inc. as the surviving
corporation, as defined in the Plan of Merger dated June 12, 1992 between ALLTEL
Corporation and SLT Communications, Inc., as amended, certain employees of Sugar
Land Telephone Company, Perco Telephone Company, and SLT Cable TV, Inc.
(collectively, "SLT") and certain former employees of Metropolitan Houston
Paging Services, Inc. ("Metropolitan") whose employment transferred to
SLT Cable TV, Inc. became Employees.
Notwithstanding any other provision of the Plan, the Plan is
modified as set forth below with respect to active employees of SLT on the date
of the merger and the employees of Metropolitan whose employment
transferred to SLT Cable TV, Inc. in connection with the merger who became
Employees:
A. Section 1.07 is modified by adding to the definition thereof the following:
1.07Q "Basic Compensation" shall include only amounts
earned after December 31, 1992.
B. Section 1.14 is modified by adding to the definition thereof the following:
1.14Q "Compensation" shall include only amounts earned
after December 31, 1992.
C. Section 1.37(g) is modified as follows:
1.37(g)Q Vesting Service
(a) A Participant's eligibility for benefits under the Plan shall
be determined by his period of Vesting Service, in accordance with the
following:
(i) Service Prior to January 1, 1993: An Employee's
period(s) of employment with SLT or Metropolitan shall be
counted as Vesting Service to the extent that such periods
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<PAGE>
would have counted under the Plan if such employment had been with
the Company.
(ii) Service From and After January 1, 1993: In
accordance with the provisions of Section 1.37(g).
D. Section 1.37(d) is modified as follows:
1.37(d)Q Benefit Service
(a) The amount of the benefit payable to or on behalf of a
Participant shall be determined on the basis of his Benefit Service, in
accordance with the following:
(i) Benefit Service Prior to January 1, 1993: None.
(ii) Benefit Service From and After January 1, 1993:
In accordance with the provisions of Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)Q Eligibility Year of Service
(a) A Participant's Eligibility Years of Service under the Plan
shall be determined in accordance with the following:
(i) Service Prior to January 1, 1993: An Employee's
period(s) of employment with SLT or Metropolitan shall be
counted as Eligibility Years of Service to the extent that such
periods would have counted under the Plan if such
employment had been with the Company.
(ii) Service From and After January 1, 1993: In
accordance with the provisions of Section 1.37(f).
2. Section 13 of the Plan is hereby amended to add the following
Section 13.18 thereto:
13.18 Employees of Contel Cellular of Arkansas, Inc.
(a) Effective Date - January 1, 1993.
(b) Account - None.
(c) Minimum Normal Retirement Pension - None.
(d) Minimum Early Retirement Pension - None.
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<PAGE>
(e) Minimum Disability Retirement Pension - None.
(f) Minimum Deferred Vested Pension - None.
(g) Minimum Death Benefit - None.
(h) Prior Plan Offset - Not Applicable.
(i) Provision Relative to IRC Section 401(a)(12) - Not Applicable.
(j) Miscellaneous - See APPENDIX R - SPECIAL PROVISIONS APPLICABLE TO
CERTAIN EMPLOYEES OF CONTEL CELLULAR OF ARKANSAS, INC., which
follows immediately hereafter.
APPENDIX R
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
CONTEL CELLULAR OF ARKANSAS, INC.
Pursuant to a Purchase and Sale Agreement dated December 22,
1992, by and among ALLTEL Mobile Communications, Inc, Contel Cellular, Inc., and
GTE Mobilnet Incorporated, certain former employees of Contel Cellular of
Arkansas, Inc. and/or its Affiliates (as defined in the Purchase and Sale
Agreement) (collectively, "Contel") became Employees.
Notwithstanding any other provision of the Plan, the Plan is
modified as set forth below with respect to active employees of Contel who
became Employees pursuant to the Purchase and Sale Agreement:
A. Section 1.07 is modified by adding to the definition thereof the following:
1.07R "Basic Compensation" shall include only amounts
earned after December 31, 1992.
B. Section 1.14 is modified by adding to the definition thereof the following:
1.14R "Compensation" shall include only amounts earned
after December 31, 1992.
C. Section 1.37(g) is modified as follows:
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<PAGE>
1.37(g)R Vesting Service
(a) A Participant's eligibility for benefits under the Plan shall
be determined by his period of Vesting Service, in accordance with the
following:
(i) Service Prior to January 1, 1993: An Employee's
period(s) of employment with Contel shall be counted as
Vesting Service to the extent that such periods would have
counted under the Plan if such employment had been with the
Company.
(ii) Service From and After January 1, 1993: In
accordance with the provisions of Section 1.37(g).
D. Section 1.37(d) is modified as follows:
1.37(d)R Benefit Service
(a) The amount of the benefit payable to or on behalf of a
Participant shall be determined on the basis of his Benefit Service, in
accordance with the following:
(i) Benefit Service Prior to January 1, 1993: None.
(ii) Benefit Service From and After January 1, 1993:
In accordance with the provisions of Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)R Eligibility Year of Service
(a) A Participant's Eligibility Years of Service under the Plan
shall be determined in accordance with the following:
(i) Service Prior to January 1, 1993: An Employee's
period(s) of employment with Contel shall be counted as
Eligibility Years of Service to the extent that such periods
would have counted under the Plan if such employment had
been with the Company.
(ii) Service From and After January l, 1993: In
accordance with the provisions of Section 1.37(f).
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<PAGE>
3. Paragraph (f) of Section 1.01 of the Plan is hereby amended,
effective as of the close of business on August 31, 1993, by the addition of the
following new subparagraph at the end thereof:
Notwithstanding the foregoing provisions under this paragraph
(f), the provisions of this paragraph (f) shall become ineffective
in the manner provided in IRS Notice 88-131 and any
subsequent IRS Notices, Revenue Procedures, or other
guidance, effective as of the close of business on August 31,
1993, as though the Plan had been amended to comply with
the terms of TRA '86 as contemplated by the second
subparagraph of this paragraph (f).
IN WITNESS WHEREOF, the Company, by its duly authorized officer,
has caused this Amendment to be executed on this 23rd day of July, 1993.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: VP - Human Resources
133
Exhibit 10(l)(7)
TWELFTH AMENDMENT
TO THE
ALLTEL CORPORATION PROFIT-SHARING PLAN
WHEREAS, the ALLTEL Corporation Profit-Sharing Plan
(the "Plan") was established by ALLTEL Corporation (the "Company")
effective January 1, 1988; and
WHEREAS, pursuant to Section 10.02 of the Plan, the
Company has reserved the right to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED, that the Plan is
hereby amended, effective as of March 1, 1993, as set forth below:
1. Paragraph (b) of Section 4.03 of the Plan is
amended by the addition of a new sentence at the end thereof to provide as
follows:
For purposes of this paragraph (b), a Participant who retires
under conditions of eligibility for increased benefits under the
provisions of Article XIV of the ALLTEL Corporation Pension Plan
shall be deemed to have retired under the Plan, notwithstanding
the provisions of Article VI.
2. Section 6.03 of the Plan is amended by the addition
of a new sentence at the end thereof to provide as follows:
A Participant who retires under conditions of eligibility for
increased benefits under the provisions of Article XIV of the
ALLTEL Corporation Pension Plan shall be eligible for distribution
of his Account as described in the immediately preceding
sentence.
IN WITNESS WHEREOF, the Company, by its duly
authorized officer, has caused this Amendment to be executed on this 23rd
day of July, 1993.
ALLTEL CORPORATION
By: /s/John L. Comparin
Title: VP-Human Resources
134
<PAGE>
THIRTEENTH AMENDMENT
TO THE
ALLTEL CORPORATION PROFIT-SHARING PLAN
WHEREAS, the ALLTEL Corporation Profit-Sharing Plan
(the "Plan") was established by ALLTEL Corporation (the "Company")
effective January 1, 1988; and
WHEREAS, pursuant to Section 10.02 of the Plan, the
Company has reserved the right to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED, that the Plan is
hereby amended, effective as of the Closing Date, as Closing Date is defined
in the Employee Transfer Agreements between ALLTEL Illinois, Inc. and GTE
South Incorporated, ALLTEL Indiana, Inc. and Contel of the South, Inc., and
ALLTEL Michigan, Inc. and Contel of the South, Inc., each dated April 5,
1993, but contingent upon consummation (as determined by the Company
and communicated in writing to the Committee) of the transactions
contemplated by the Employee Transfer Agreements, as set forth below:
1. Section 1.36 of the Plan is amended by adding a
new paragraph at the end thereof to provide as follows:
Effective as of the Closing Date, as Closing Date is defined in
the Employee Transfer Agreements between ALLTEL Illinois,
Inc. and GTE South Incorporated, ALLTEL Indiana, Inc. and
Contel of the South, Inc., and ALLTEL Michigan, Inc. and
Contel of the South, Inc., each dated April 5, 1993, with
respect to Participants who are GTE Transfer Employees (as
GTE Transfer Employees is defined in Section 4.03 (c) of the
Plan) as of the Closing Date or Participants who become GTE
Transfer Employees after the Closing Date, the Vesting Years
of Service of an Employee who transfers employment from an
Employer to GTE South Incorporated or to Contel of the South,
Inc. pursuant to an Employee Transfer Agreement shall be
determined taking into account service with GTE (as defined in
the Employee Transfer Agreements).
2. Section 4.03 of the Plan is amended by adding a
new paragraph (c) at the end thereof to provide as follows:
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<PAGE>
(c) Effective as of the Closing Date, as Closing
Date is defined in the Employee Transfer Agreements between
ALLTEL Illinois, Inc. and GTE South Incorporated, ALLTEL
Indiana, Inc. and Contel of the South, Inc., and ALLTEL
Michigan, Inc. and Contel of the South, Inc., each dated
April 5, 1993, with respect to Participants who are GTE
Transfer Employees (as hereinafter defined) as of the Closing
Date or Participants who become GTE Transfer Employees
after the Closing Date, the provisions of Section 2.01 and of
paragraph (a) and paragraph (b) of this Section 4.03 shall be
modified as follows:
(i) The requirement that a Participant be
actively employed by an Employer on the last
day of the Plan Year and the requirement in
Section 2.01 that an Eligible Employee becomes
a Participant if he has not separated from service
prior to the date he has one Eligibility Year of
Service shall not apply with respect to the Plan
Year in which the Participant becomes a GTE
Transfer Employee if the Participant was actively
employed or on an Authorized Leave of Absence
as of the day immediately preceding the date the
Participant becomes a GTE Transfer Employee,
provided that the Participant is employed by GTE
South Incorporated or Contel of the South, Inc.
on the last day of the Plan Year in which the
Participant becomes a GTE Transfer Employee.
The preceding sentence shall also apply to any
GTE Transfer Employee who would have
become a Participant during the period beginning
on the date as of which he becomes a GTE
Transfer Employee and the last day of the Plan
Year in which he becomes a GTE Transfer
Employee had he remained an Eligible Employee
during such period.
(ii) The requirement that a Participant
have a Year of Participation shall be satisfied for
the Plan Year in which he becomes a GTE
Transfer Employee if the Participant is credited
with at least such number of Hours of Service as
the number determined by multiplying 1,000 by
a fraction the numerator of which is the number
of days of employment with the Controlled
Group completed by the Participant in such Plan
Year and the denominator of which is three
hundred sixty-five (365).
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<PAGE>
A "GTE Transfer Employee" shall mean an active Employee
(including an Employee on military leave, maternity leave, or
other approved leaves of absence, short-term disability, and an
Employee on layoff with recall rights) whose employment
transfers from ALLTEL Illinois, Inc. to GTE South Incorporated,
from ALLTEL Indiana, Inc. to Contel of the South, Inc., or from
ALLTEL Michigan, Inc. to Contel of the South, Inc., as of the
Closing Date. An "LTD Recipient" or "WC Recipient" (as
defined in the GTE Employee Transfer Agreements) shall not
be a Transfer Employee on the Closing Date, but an LTD
Recipient or WC Recipient may, however, become a GTE
Transfer Employee upon commencement of employment with
GTE (as defined in the Employee Transfer Agreements), as
provided in the Employee Transfer Agreements.
IN WITNESS WHEREOF, the Company, by its duly
authorized officer, has caused this Amendment to be executed on this 1st
day of November , 1993.
ALLTEL CORPORATION
By:/s/ John L. Comparin
Title: VP - Human Resources
137
<PAGE>
FOURTEENTH AMENDMENT
TO THE
ALLTEL CORPORATION PROFIT-SHARING PLAN
WHEREAS, the ALLTEL
Corporation Profit-Sharing Plan (the "Plan") was established by ALLTEL
Corporation (the "Company") effective January 1, 1988; and
WHEREAS, pursuant to
Section 10.02 of the Plan, the Company has reserved the right to amend the
Plan;
NOW, THEREFORE, BE IT
RESOLVED, that the Plan is hereby amended, effective as of the Closing
Date, as Closing Date is defined in the Employee Transfer Agreements
between ALLTEL Georgia Communications Corp. and GTE South
Incorporated, ALLTEL Illinois, Inc. and GTE South Incorporated, ALLTEL
Indiana, Inc. and Contel of the South, Inc., and ALLTEL Michigan, Inc. and
Contel of the South, Inc., each dated April 5, 1993, but contingent upon
consummation (as determined by the Company and communicated in writing
to the Committee) of the transactions contemplated by the Employee
Transfer Agreements, as set forth below:
1. Section 4.03 of the Plan is
amended by adding a new paragraph (d) at the end thereof to provide as
follows:
(d) Effective as of the Closing Date, as Closing Date is
defined in the Employee Transfer Agreements between ALLTEL
Georgia Communications Corp. and GTE South Incorporated, ALLTEL
Illinois, Inc. and GTE South Incorporated, ALLTEL Indiana, Inc. and
Contel of the South, Inc., and ALLTEL Michigan, Inc. and Contel of
the South, Inc., each dated April 5, 1993, (the "Employee Transfer
Agreements") with respect to each person who becomes an
Employee pursuant to the Employee Transfer Agreements as of the
Closing Date or subsequent thereto (a "Former GTE Employee") and
has met the eligibility requirements to become a Participant on or
before the last day of the Plan Year in which he becomes a Former
GTE Employee, the requirements of paragraph (a) and paragraph (b)
of this Section 4.03 that a Participant have a Year of Participation
shall be satisfied for the Plan Year in which he becomes a Former
GTE Employee if the Participant is credited with at least such number
of Hours of Service as the number determined by multiplying 1,000
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<PAGE>
by a fraction the numerator of which is the number of day of
employment with the Controlled Group completed by the Participant
in such Plan Year and the denominator of which is three hundred
sixty-five (365). An "LTD Recipient" or "WC Recipient" (as defined in
the Employee Transfer Agreements) shall not become a Former GTE
Employee on the Closing Date, but an LTD Recipient or WC Recipient
may, however, become a Former GTE Employee upon
commencement of employment with ALLTEL (as defined in the
Employee Transfer Agreements), as provided in the Employee
Transfer Agreements.
IN WITNESS WHEREOF, the Company, by its duly
authorized officer, has caused this Amendment to be executed on this 1st
day of November, 1993.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: VP- Human Resources
139
<PAGE>
FIFTEENTH AMENDMENT
TO THE
ALLTEL CORPORATION PROFIT-SHARING PLAN
WHEREAS, the ALLTEL Corporation Profit-Sharing Plan
(the "Plan") was established by ALLTEL Corporation (the "Company")
effective January 1, 1988; and
WHEREAS, pursuant to Section 10.02 of the Plan, the
Company has reserved the right to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED, that the Plan is
hereby amended, effective as of January 1, 1993, as set forth below:
1. Section 1.12 of the Plan is amended by adding
thereto the following:
In determining the Eligibility Years of Service for an Employee
who was an employee of HWC Distribution Corp. or one of its
subsidiaries ("HWC") immediately prior to the date as of which
HWC became a member of the Controlled Group, the Employee's
period(s) of employment with HWC prior to the date as of which
HWC became a member of the Controlled Group that would have
been taken into account under the Plan if such period(s) of
employment were service with a member of the Controlled
Group, shall be counted as Eligibility Years of Service.
Notwithstanding any other provision of the Plan, there shall be no
duplication of Eligibility Years of Service under the Plan by reason
of service (or hours of service) in respect of any single period or
otherwise.
2. Section 1.36 of the Plan is amended by adding
thereto the following:
In determining the Vesting Years of Service for an Employee who
was an employee of HWC Distribution Corp. or one of its
subsidiaries ("HWC") immediately prior to the date as of which
HWC became a member of the Controlled Group, the Employee's
period(s) of employment with HWC prior to the date as of which
HWC became a member of the Controlled Group that would have
been taken into account under the Plan if such period(s) of
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<PAGE>
employment were service with a member of the Controlled Group, shall
be counted as Vesting Years of Service. Notwithstanding any other
provision of the Plan, there shall be no duplication of Vesting Years of
Service under the Plan by reason of any restoration of, crediting of, or
granting of service (or hours of service) in respect of any single period
or otherwise.
IN WITNESS WHEREOF, the Company, by its duly
authorized officer, has caused this Amendment to be executed on this 1st
day of November, 1993.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: VP - Human Resources
141
<PAGE>
SIXTEENTH AMENDMENT
TO THE
ALLTEL CORPORATION PROFIT-SHARING PLAN
WHEREAS, the ALLTEL Corporation Profit-Sharing Plan
(the "Plan") was established by ALLTEL Corporation (the "Company")
effective January 1, 1988; and
WHEREAS, pursuant to Section 10.02 of the Plan, the
Company has reserved the right to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED, that the Plan is
hereby amended, effective as of October 15, 1993, as set forth below:
1. Section 1.12 of the Plan is amended by adding
thereto the following:
In determining the Eligibility Years of Service for an Employee
who was an employee of GTE Directories Service Corporation
or one of its subsidiaries ("GTE Directories") immediately prior
to October 15, 1993 and became an Employee on October 15,
1993 in connection with the Purchase and Sale Agreement
dated May 18, 1993 between GTE Directories Service
Corporation and ALLTEL Publishing Corporation, the
Employee's period(s) of employment with GTE Directories and
its affiliated corporations prior to October 15, 1993 that would
have been taken into account under the Plan if such period(s)
of employment were service with a member of the Controlled
Group, shall be counted as Eligibility Years of Service.
Notwithstanding any other provision of the Plan, there shall be
no duplication of Eligibility Years of Service under the Plan by
reason of service (or hours of service) in respect of any single
period or otherwise.
2. Section 1.36 of the Plan is amended by adding
thereto the following:
In determining the Vesting Years of Service for an Employee
who was an employee of GTE Directories Service Corporation
or one of its subsidiaries ("GTE Directories") immediately prior
to October 15, 1993 and became an Employee on October 15,
1993 in connection with the Purchase and Sale Agreement
dated May 18, 1993 between GTE Directories Service
Corporation and ALLTEL Publishing Corporation, the
Employee's period(s) of employment with GTE Directories and
its affiliated corporations prior to October 15, 1993 that would
have been taken into account under the Plan if such period(s)
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<PAGE>
of employment were service with a member of the Controlled Group
shall be counted as Vesting Years of Service. Notwithstanding any
other provision of the Plan, there shall be no duplication of Vesting
Years of Service under the Plan by reason of any restoration of,
crediting of, or granting of service (or hours of service) in respect of
any single period or otherwise.
3. Section 4.03 of the Plan is amended by adding a
new paragraph (e) at the end thereof to provide as follows:
(e) Effective as of October 15, 1993, with respect to
each person who becomes an Employee in
connection with the Purchase and Sale Agreement
dated May 18, 1993 between GTE Directories
Service Corporation and ALLTEL Publishing
Corporation, (a "Former GTE Directories Employee")
and has met the eligibility requirements to become a
Participant on or before the last day of the Plan Year
in which he becomes a Former GTE Directories
Employee, the requirements of paragraph (a) and
paragraph (b) of this Section 4.03 that a Participant
have a Year of Participation shall be satisfied for the
Plan Year in which he becomes a Former GTE
Directories Employee if the Participant is credited
with at least such number of Hours of Service as the
number determined by multiplying 1,000 by a
fraction the numerator of which is the number of
days of employment with the Controlled Group
completed by the Participant in such Plan Year and
the denominator of which is three hundred sixty-five
(365).
IN WITNESS WHEREOF, the Company, by its duly
authorized officer, has caused this Amendment to be executed on this 27th
day of January, 1994.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: VP - Human Resources
143
Exhibit 24
Securities and Exchange Commission
Washington, D.C. 20549
Re: ALLTEL Corporation
Commission File No. 1-4996-2
1934 Act Filings on Form 10-K
Authorized Representatives
Gentlemen:
The above Company is the issuer of securities registered under
Section 12 of the Securities Exchange Act of 1934 (The "Act"). Each of the
persons signing his name below confirms, as of the date appearing opposite his
signature, that each of the "Authorized Representatives" named below is
authorized on his behalf to sign and to submit to the Securities and Exchange
Commission such filings on Form 10-K as are required by the Act. Each person
so signing also confirms the authority of each of the Authorized
Representatives to do and perform on his behalf, any and all acts and things
requisite or necessary to assure compliance by the signing person with the
Form 10-K requirements. The authority confirmed herein shall remain in effect
as to each person signing his name below until such time as the Commission
shall receive from such person a written communication terminating or
modifying the authority. Each person signing his name below expressly revokes
all authority heretofore given or executed by him with respect to such filings
under the Act.
Authorized Representatives
Max E. Bobbitt
Dennis J. Ferra
February 17, 1994
/s/ Tom Orsini
144
