SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-4996
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
(Former name, former address and former fiscal year, if changed since
last report)
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
Number of common shares outstanding as of March 31, 1997:
186,543,592
The Exhibit Index is located at sequential page 15 .
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ALLTEL CORPORATION
FORM 10-Q
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The following consolidated financial statements of ALLTEL Corporation
and subsidiaries, included in the interim report of ALLTEL Corporation to its
stockholders for periods ended March 31, 1997, a copy of which is attached
hereto, are incorporated herein by reference:
Consolidated Statements of Income - for the three and
twelve months ended March 31, 1997 and 1996.
Consolidated Balance Sheets - March 31, 1997 and 1996 and
December 31, 1996.
Consolidated Statements of Cash Flows - for the three
and twelve months ended March 31, 1997 and 1996.
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ALLTEL CORPORATION
FORM 10-Q
PART I - FINANCIAL STATEMENTS
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's total capital structure was $3.8 billion at March 31, 1997,
reflecting 54 percent common and preferred equity and 46 percent debt. This
compares to a capital structure of $3.9 billion at December 31, 1996, also
reflecting 54 percent common and preferred equity and 46 percent debt. The
Company has adequate internal and external resources available to finance its
ongoing operating requirements, including capital expenditures, business
development and the payment of dividends.
Cash provided by operations, which is the Company's primary source of
liquidity, was $246.9 million and $876.0 million for the three and twelve month
periods in 1997, respectively, compared to $177.1 million and $698.2 million
for the same periods in 1996. The increase in the three month period of 1997
reflects growth in the earnings of the Company, decreased working capital
requirements and the timing of additional tax payments associated with a gain
on the sale of information services healthcare operations, as further discussed
below. The increase in the twelve month period primarily reflects decreased
working capital requirements and the timing of certain property and income tax
payments, including the additional taxes related to the sale of the healthcare
operations. Growth in earnings of the Company, excluding the impact of certain
non-cash, non-extraordinary charges further discussed below, also contributed
to the increase in cash provided by operations for the twelve month period of
1997. The net proceeds received from the sale of the healthcare operations
totaling $104.9 million are included in cash from investing activities for both
the three and twelve month periods of 1997. These proceeds were used primarily
to reduce borrowings under the Company's revolving credit agreement.
Capital expenditures for the three and twelve month periods in 1997 were
$145.4 million and $506.2 million, respectively, compared to $102.9 million and
$485.8 million for the same periods in 1996. The Company financed the majority
of its capital expenditures through the internal generation of funds in each of
the past two year periods. During each of the past two year periods, the
Company's capital expenditures were directed toward its wireline operations to
continue to modernize its network and invest in equipment to provide new
telecommunications services. In addition, capital expenditures were incurred
for expansion into existing wireless and information services markets, and to
upgrade existing wireless network facilities. Capital expenditures for the
three and twelve month periods of 1997 also include approximately $30.7 million
related to the acquisition of Personal Communications Services ("PCS")
licensing rights. The Company participated in the Federal Communications
Commission's ("FCC") "D" and "E" band PCS auctions, and on January 14, 1997,
the Company was awarded the PCS licensing rights for 73 markets in 12 states.
When issued by the FCC, the PCS licenses will enable the Company to increase
the size of its potential wireless customer base to 34 million. The Company
will pay an additional $115.8 million, or a total of approximately $146.5
million, to obtain the PCS licenses. The final payment for the PCS licenses
was made on May 12, 1997. Capital expenditures, excluding amounts related to
the acquisition of PCS licenses and the construction of the PCS network, are
forecast at $490.4 million for 1997, which are expected to be financed
primarily from internally generated funds. The Company believes it has the
capital resources available to fund the construction of its PCS network. Cash
flows from investing activities for the three and twelve month periods of 1997
also include a cash outlay of $32.9 million related to the acquisition of two
wireless properties in Alabama.
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Included in cash flows from financing activities are dividend payments and
the repurchase by the Company of its common stock. Common and preferred
dividend payments for the three and twelve month periods of 1997 were
$52.0 million and $200.6 million, respectively, compared to $49.5 million and
$186.3 million for the same periods in 1996. The increases in dividend
payments in the 1997 periods primarily reflect the October 1996 action of the
Board of Directors to increase the quarterly common stock dividend rate from
$.26 per share to $.275 per share. On October 21, 1996, the Company announced
its plans to repurchase up to 3.5 million shares of its common stock. Through
March 31, 1997, the Company had repurchased 3,433,400 shares at a total cost of
$108.1 million. Of this total, $32.5 million was expended during the first
three months of 1997. On April 24, 1997, the Company announced expansion of
its share repurchase program to include an additional 3.5 million shares.
The Company has a $750 million revolving credit agreement. Borrowings
outstanding under this agreement at March 31, 1997 were $28.8 million, compared
to $83.7 million that was outstanding at December 31, 1996. There were no
borrowings outstanding under this agreement at March 31, 1996. The weighted
average interest rate on borrowings outstanding under this agreement at
March 31, 1997, was 6.6 percent. Borrowings under this agreement in 1997 were
incurred primarily to fund the stock repurchase program and to acquire the PCS
licensing rights. As previously noted, the proceeds from the sale of the
healthcare operations were used primarily to reduce borrowings under the
revolving credit agreement, and the net reduction in revolving credit agreement
borrowings from December 31, 1996, represent the majority of long-term debt
retired in the three month period ended March 31, 1997. Scheduled long-term
debt retirements, net of additional borrowings under the revolving credit
agreement, amounted to $43.2 million for the twelve month period ended
March 31, 1997.
RESULTS OF OPERATIONS
Wireline Operations
In November 1994, the Company signed definitive agreements to sell
wireline properties serving approximately 117,000 access lines in Arizona,
California, Nevada, New Mexico, Oregon, Tennessee, Utah and West Virginia to
Citizens Utilities Company ("Citizens") in exchange for approximately
$250 million in cash, assumed debt and a wireline property serving 3,600 access
lines in Pennsylvania. The sale of properties in Oregon and West Virginia was
completed at the end of the second quarter of 1995, the sale of all remaining
properties except for those in Nevada was completed during the fourth quarter
of 1995, and the sale of properties in Nevada was completed during March 1996.
Wireline revenues and sales increased $11.4 million or 4 percent and
decreased $4.5 million or less than 1 percent for the three and twelve months
ended March 31, 1997, respectively. Wireline operating income increased
$0.5 million or less than 1 percent and decreased $11.2 million or 3 percent
for the three and twelve month periods of 1997, respectively. Excluding the
impact of the sale of properties to Citizens, wireline's revenues and sales
would have increased $16.2 million and $64.6 million or 6 percent and operating
income would have increased $2.6 million or 2 percent and $14.7 million or
4 percent for the three and twelve month periods ended March 31, 1997,
respectively.
Local service revenues increased $8.5 million or 8 percent and
$23.6 million or 6 percent in the three and twelve month periods of 1997,
respectively. Customer access lines, net of lines sold to Citizens, increased
more than 5 percent during the past twelve month period, reflecting increased
sales of residential and second access lines. Growth in custom calling feature
revenues also contributed to the increase in local service revenues for both
the three and twelve month periods. The increases in local service revenues
due to growth in access lines and custom calling feature revenues were
partially offset by the sale of properties to Citizens, which reduced revenues
$1.3 million and $17.6 million for the three and twelve month periods,
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respectively. There have been no local rate increases granted to any of the
Company's wireline operating subsidiaries during 1997, nor are there any rate
requests currently pending before regulatory commissions.
Network access and long-distance revenues increased $2.5 million or
2 percent and decreased $25.9 million or 4 percent for the three and twelve
month periods of 1997, respectively. The increase in the three month period
primarily reflects the addition of the Company's long-distance operations,
which began serving customers during the second quarter of 1996. The
long-distance operations, which currently serve nearly 154,000 customers,
generated operating revenues of $6.4 million and $16.2 million during the three
and twelve month periods ended March 31, 1997, respectively. The increase in
revenues in the three month period resulting from the start-up of the
long-distance operations was partially offset by the sale of properties to
Citizens, which reduced revenues $2.7 million. The decrease in the twelve
month period primarily reflects the sale of properties to Citizens, which
accounted for $42.6 million of the decrease, partially offset by the additional
revenues derived from the Company's long-distance operations.
Miscellaneous revenues increased $0.4 million or 1 percent and decreased
$2.2 million or 2 percent for the three and twelve month periods of 1997,
respectively. The increase in the three month period reflects growth in both
rental revenues and sales of wireline equipment protection plans, partially
offset by the reduction in miscellaneous revenues as a result of the sale of
properties to Citizens. The decrease in miscellaneous revenues in the twelve
month period primarily reflects the sale of properties to Citizens, which
reduced miscellaneous revenues $8.9 million, partially offset by increases in
directory advertising revenues, rental revenues, and sales of wireline
equipment protection plans.
Total wireline operating expenses increased $10.9 million or 6 percent and
$6.7 million or 1 percent for the three and twelve month periods of 1997,
respectively. Excluding the impact of the sale of properties to Citizens,
wireline's operating expenses would have increased $13.7 million or 8 percent
and $49.8 million or 7 percent for the three and twelve month periods ended
March 31, 1997, respectively. The decreases in operating expenses for both
periods resulting from the sale of properties to Citizens were more than offset
by the additional expenses incurred by the start-up long-distance operations,
increased depreciation and maintenance-related expenses and additional costs
incurred as a result of the Company consolidating its customer service
operations. Until the new regional customer service centers become fully
operational and replace all existing customer call centers later this year, the
Company will continue to incur some duplicate costs in operating both the
existing and new facilities.
The Company's wireline subsidiaries follow the accounting for regulated
enterprises prescribed by Statement of Financial Accounting Standards No. 71,
"Accounting for the Effects of Certain Types of Regulation" ("SFAS 71"). If
the Company's wireline subsidiaries no longer qualified for the provisions of
SFAS 71, the accounting impact to the Company would be an extraordinary
non-cash charge to operations of an amount that could be material. Criteria
that would give rise to the discontinuance of SFAS 71 include (1) increasing
competition that restricts the wireline subsidiaries' ability to establish
prices to recover specific costs and (2) a significant change in the manner in
which rates are set by regulators from cost-based regulation to another form of
regulation. The Company periodically reviews these criteria to ensure the
continuing application of SFAS 71 is appropriate. As a result of the passage
of the Telecommunications Act of 1996 (the "96 Act") and state
telecommunications reform legislation, the Company's wireline subsidiaries
could begin to experience increased competition in their local service areas.
Presently, competition has not had a significant adverse effect on the
operations of the Company's wireline subsidiaries. In August 1996, as required
by the 96 Act, the FCC issued regulations establishing pricing rules for
interconnection of telecommunications carriers' networks and for provisioning
of unbundled network services. These regulations were challenged by various
telecommunications carriers in the federal courts, and in October 1996, the
U.S. Eighth Circuit Court of Appeals issued a stay of the FCC's pricing rules
pending the outcome of the appeal process. On May 7, 1997, as required by the
96 Act, the FCC issued regulations relating to access charge reform and
subsidizing of universal service. The Company has not yet evaluated the
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impact, if any, that these new rules will have on its wireline operations.
Accordingly, the Company cannot predict at this time the specific effects that
the 96 Act and future competition will have on its wireline operations.
However, the Company is intent on taking advantage of the various opportunities
that competition should provide.
Wireless Operations
Wireless operations contributed significantly to the Company's overall
earnings growth. Revenues and sales reflect increases of $16.0 million or
15 percent and $73.5 million or 18 percent for the three and twelve month
periods ended March 31, 1997, respectively. Operating income increased
$7.1 million or 22 percent and $26.3 million or 20 percent for the three and
twelve month periods of 1997, respectively. During the twelve month period
ended March 31, 1997, subscriber growth remained strong as the number of
wireless customers grew to 843,658 from 663,406, an increase of 180,252
customers or 27 percent. The acquisition of two wireless properties in
Alabama, completed in February 1997, added 21,362 customers, and accounted for
approximately 3 percent of the increase in customers.
Wireless revenues and sales increased in all periods primarily due to the
significant growth in its customer base. The acquisition of the two wireless
properties in Alabama also contributed to the growth in revenues and sales in
both periods. Partially offsetting the increases in revenues and sales
resulting from subscriber growth and acquisitions were declines in the average
monthly revenue per subscriber. Average revenue per subscriber per month was
$52 and $57 for the three and twelve months ended March 31, 1997, compared to
$58 and $62 for the same periods in 1996. The declines in average revenue per
subscriber primarily reflect the migration of existing wireless customers to
lower access rate plans, reductions in roaming revenue rates and the
industry-wide trend of continued penetration into lower-usage market segments.
As a result of increased current and expected future competition in its service
areas, the Company has increased its offering of monthly service plans which
have lower base access rates and include more packaged airtime minutes.
Migration of existing customers to the newly offered rate plans is expected to
continue throughout the remainder of 1997, and accordingly, this trend could
continue to impact future revenue growth. Growth in revenues and sales for the
twelve month period of 1997 was also impacted by an increase in uncollectible
revenues, reflecting increased write-offs from bad debts.
The growth in operating income for both periods of 1997 primarily reflects
the increases in revenues and sales, partially offset by higher expenses for
selling and advertising, depreciation and other operating expenses. Growth in
operating income for the twelve month period was also impacted by increased
losses sustained from fraud. During the third quarter of 1996, the Company
implemented new technologies and enhanced its credit and collection procedures
in order to reduce future losses incurred from both fraud and bad debts. For
each of the past two consecutive calendar quarters, the Company has experienced
a decline in losses sustained from fraud and bad debts.
As previously noted, the Company was a successful bidder in the FCC's "D"
and "E" band PCS auctions, obtaining licenses for 73 markets in 12 states.
These PCS licensing rights will increase the Company's potential wireless
customer base to 34 million "POPs". The Company is currently developing its
PCS network deployment plans.
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Information Services
Information services' revenues and sales decreased $9.5 million or
4 percent and increased $14.9 million or 2 percent for the three and twelve
month periods ended March 31, 1997, respectively. The decrease in the three
month period of 1997 primarily reflects the sale of information services'
healthcare operations completed in January 1997. In addition to the sale of
the healthcare operations, revenues and sales for the twelve month period of
1997 also reflect the sale of the check processing operations completed in
September 1995. Excluding the impact of the sales of the healthcare and check
processing operations, revenues and sales would have increased 6 percent in
each period or $12.1 million and $49.5 million in the three and twelve month
periods of 1997, respectively.
Excluding the impact of the sales of the healthcare and check processing
operations, revenues and sales increased in both periods primarily due to
growth in the financial services outsourcing business, reflecting volume growth
in existing data processing contracts and the addition of new outsourcing
agreements. Additional software maintenance and service revenues also
contributed to the increase in revenues and sales for all periods. The
increase in revenues and sales for the twelve month period also reflects the
acquisition of Vertex Business Systems, Inc. completed in May 1995. The
increases in revenues and sales in all periods were partially offset by a
reduction in revenues earned on an outsourcing agreement accounted for under
the percentage-of-completion method, lost operations from contract terminations
due primarily to the merger and consolidation activity in the domestic
financial services market, and by a reduction in revenues collected for early
termination of facilities management contracts. The domestic financial
services industry continues to experience consolidation due to mergers.
Operating income increased $3.7 million or 12 percent and decreased
$63.7 million or 47 percent for the three and twelve month periods of 1997,
respectively. The increase in operating income in the three month period
primarily reflects the sale of the healthcare business, as these operations
had incurred an operating loss during the first quarter of 1996. Growth in
revenues and sales, net of the healthcare operations, also contributed to the
growth in operating income in the three month period. In addition to the sale
of the healthcare and check processing operations, operating income for the
twelve month period was also adversely impacted by a $75.0 million write-down
in the carrying value of software and certain other assets during the third
quarter of 1996, as further discussed below. Excluding the impact of the sales
of the healthcare and check processing operations and the third quarter 1996
asset write-downs, operating income would have increased $17.6 million or
14 percent for the twelve months ended March 31, 1997. This increase in
operating income for the twelve month period reflects the growth in revenues
and sales previously discussed, as well as, improved profit margins realized on
international software contracts. The increases in operating income in both
periods attributable to revenue growth were partially offset by the loss of
higher-margin operations due to contract terminations, reductions in fees
collected on the early termination of facilities management contracts, and an
increase in operating costs including depreciation and amortization expense.
Operating income for both periods of 1997 was also impacted by start-up costs
associated with the Enterprise Network Services business unit, which was
established in May 1996 to offer network consulting, implementation and
operations support services to customers across all the Company's vertical
markets. Depreciation and amortization expense increased in both periods
primarily due to the acquisition of additional data processing equipment and
due to an increase in amortization of internally developed software.
During the third quarter of 1996, information services recorded a pretax
write-down of $53.0 million in the carrying value of certain assets primarily
consisting of capitalized software development costs. The write-down of
software resulted from a net realizability evaluation of software-related
products that have been impacted by changes in software and hardware
technologies, including a shift from mainframe to client server-based
applications. In addition, due to current and projected future operating
losses sustained by the community banking operations, information services also
recorded a pretax write-down of $22.0 million to adjust the carrying value of
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these operations to their estimated fair value based upon projections of future
cash flows. The Company plans to dispose of or discontinue these operations by
the end of 1997. The effects of these asset write-downs are included in the
twelve months ended March 31, 1997. In accordance with the Company's plan for
the disposal of the check processing operations, the Company recorded a pre-tax
write-down of $5.0 million in June 1995 to reflect the net realizable value of
these operations. The effect of this write-down is included in the twelve
months ended March 31, 1996.
Product Distribution Operations
Product distribution's revenues and sales decreased $4.0 million or
4 percent and increased $2.1 million or less than 1 percent for the three and
twelve month periods ended March 31, 1997, respectively. Operating income
decreased $2.0 million or 32 percent and $5.0 million or 19 percent for the
three and twelve month periods of 1997, respectively.
Sales of electrical wire and cable products for both periods of 1997 have
been adversely impacted by the Company's announcement, at the end of the third
quarter of 1996, to dispose of its wire and cable subsidiary, HWC Distribution
Corp. ("HWC"). As a result of the impending sale, HWC has experienced
increased competition in its sales territories from other distribution
companies and from direct sales by manufacturers, resulting in lower sales and
reduced profit margins. Compared to the prior-year periods, sales of wire and
cable products have decreased $9.8 million and $14.7 million and operating
income has decreased $1.3 million and $4.4 million in the three and twelve
month periods of 1997, respectively. The Company plans to complete the sale of
HWC by the end of 1997.
The decrease in revenues and sales in the three month period is primarily
due to the reduction in sales of electrical wire and cable products noted
above, partially offset by growth in sales of telecommunications and data
products to non-affiliated customers, including increased retail sales of these
products at counter showrooms. Compared to the prior-year periods, retail
sales of telecommunications and data products have increased $2.5 million and
$16.1 million for the three and twelve month periods of 1997, respectively.
The increase in revenue and sales in the twelve month period is primarily due
to growth in sales of telecommunications and data products to non-affiliated
customers, including increased retail sales, partially offset by the reduction
in sales of electrical wire and cable products, as previously noted. Revenue
growth for the twelve month period was also impacted by decreased sales of
telecommunications and data products to affiliates, which decreased
$10.6 million compared to the prior-year period. The decrease in sales to
affiliates in the twelve month period reflects both the sale of properties to
Citizens and an overall reduction in capital expenditures by the remaining
wireline subsidiaries, as compared to the prior year.
Operating income decreased in the three month period primarily due to the
decrease in revenues and sales noted above and due to lower profit margins
realized on the sale of telecommunications and data products, primarily
resulting from a reduction in product cost rebates received from vendors.
Although revenues and sales increased in the twelve month period, operating
income has been adversely impacted by lower gross profit margins realized on
the sale of telecommunications and data products and electrical wire and cable
products, reflecting the effects of increased competition and the reduction in
product cost rebates received from vendors. Gross profit margins on the sale
of electrical wire and cable products for the twelve month period have also
been adversely impacted by sharp declines in copper prices, compared to the
prior-year period. Additionally, increases in selling-related expenses have
also impacted operating income growth in both periods of 1997.
During the third quarter of 1996, the Company recorded a pretax write-down
of $45.3 million in the carrying value of goodwill related to HWC. This
write-down resulted from the Company's plan to dispose of this non-strategic
operation. The impact of this write-down has been included in corporate
operating expenses for the twelve months ended March 31, 1997.
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Other Operations
Other operations revenues and sales decreased $3.8 million or 10 percent
and $3.9 million or 3 percent for the three and twelve month periods of 1997,
respectively. Operating income increased $0.5 million or 19 percent and
$4.6 million or 65 percent for the three and twelve month periods of 1997,
respectively.
Revenues and sales for other operations decreased in both periods
primarily due to a decrease in directory publishing revenues mainly
attributable to a reduction in the number of directories published. Eleven
fewer directories were published during the first quarter of 1997 compared to
the first three months of 1996, while nine fewer directories were published
during the twelve month period ended March 31, 1997, compared to the
corresponding twelve month period of 1996.
The increase in operating income for the three month period primarily
reflects the reclassification of the Company's long-distance operations to its
wireline operations in April 1996. This reclassification had a positive impact
on other operations' operating income due to the start-up nature of the
long-distance operations, which had incurred an operating loss of $0.7 million
during the first quarter of 1996. Excluding the impact of this
reclassification, other operations' operating income would have decreased
$0.2 million or 8 percent in the three month period of 1997, consistent with
the overall decrease in directory publishing revenues noted above. In addition
to including the impact of the reclassification of the Company's long-distance
operations, the increase in other operations' operating income for the twelve
month period also reflects the elimination of certain amounts paid to GTE
Directories Corporation. The Company's publishing subsidiary had contracted
with GTE Directories Corporation to receive directory advertising sales
support, printing and other services. Beginning in the second quarter of 1996,
these sales and service functions were performed at a lower cost internally by
the Company's publishing subsidiary. Operating income for the twelve month
period also reflects lower expenses for advertising, market research and new
product development.
Corporate Operating Expenses
Corporate operating expenses decreased $0.3 million or 6 percent and
increased $42.8 million or 157 percent for the three month and twelve month
periods of 1997, respectively. The increase in the twelve month period
primarily reflects the $45.3 million write-down in the carrying value of
goodwill related to HWC, as previously discussed. Excluding the impact of this
write-down, corporate operating expenses would have decreased $2.5 million or
9 percent for the twelve month period of 1997. The decrease in the three month
period of 1997 reflects the corresponding reduction in amortization of excess
cost resulting from the write-down in the carrying value of HWC's goodwill.
Primarily as a result of the write-down in HWC's goodwill, amortization of
excess cost decreased $2.6 million in the twelve month period ended
March 31, 1997.
Other Income, Net
Other income, net decreased $1.1 million or 205 percent for the three
month period and increased $0.4 million or 24 percent for the twelve month
period of 1997, respectively. Other income, net for the three and twelve month
periods of 1996 include net gains realized on the sale of the Company's
investment in Comdial Corporation common stock. Excluding the impact of these
gains, other income, net would have increased $0.6 million and $3.3 million for
the three and twelve month periods of 1997, respectively; and these increases
primarily reflect growth in equity income recognized by the Company on its
investments in wireless limited partnerships, partially offset by a reduction
in interest income and an increase in the minority interest in earnings of the
Company's wireless operations by others. Other income, net for the twelve
month period of 1997 also reflects a decrease in capitalized interest costs
related to long-term construction projects.
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Interest Expense
Interest expense decreased $2.2 million or 6 percent and $13.9 million or
10 percent for the three and twelve month periods of 1997, respectively. The
decreases in interest expense in both periods reflect the issuance of
$300 million of 7.0 percent debentures in March 1996 to retire $200 million of
9.5 percent debentures and to reduce borrowings under the Company's revolving
credit agreement. The decrease in interest expense for the twelve month
period also reflects the issuance of $200 million of 6.75 percent debentures
issued in September 1995 to retire two high-cost debt issues, consisting of
$150 million of 10.375 percent debentures and $50 million of 8.875 percent
debentures. This debt refinancing was completed in October 1995. In
connection with the debt refinancings completed in March 1996 and October 1995,
the Company was required to pay termination fees in the amount of $15.8 million
and $14.0 million, respectively; however, the two debt refinancings are
expected to produce approximately $10.5 million in annual pretax interest
savings. The decrease in interest expense for the twelve month period also
reflects a reduction in the average borrowing rates for amounts outstanding
under the Company's revolving credit agreement.
Provision to Reduce Carrying Value of Certain Assets
During the third quarter of 1996, the Company incurred non-cash, pretax
charges of $120.3 million to writedown the carrying value of certain assets.
In accordance with the Company's plan to dispose of its wire and cable
subsidiary, the Company recorded a pretax write-down of goodwill in the amount
of $45.3 million. In addition, information services recorded a pretax
write-down of $53.0 million in the carrying value of certain assets primarily
consisting of capitalized software development costs. The write-down of
software resulted from performing a net realizability evaluation of
software-related products that have been impacted by changes in software and
hardware technologies. Information services also recorded a pretax write-down
of $22.0 million to adjust the carrying value of its community banking
operations to their estimated fair value based upon projections of future cash
flows. The Company plans to dispose of or discontinue these operations by the
end of 1997. The net income impact of these write-downs resulted in a decrease
in net income of $72.7 million or $.38 per share for the twelve months ended
March 31, 1997.
Gain on Disposal of Assets, Write-down of Assets and Other
During the first quarter of 1997, the Company recorded a pre-tax gain of
$16.2 million from the sale of information services healthcare operations. The
net income impact from this transaction resulted in an increase of $9.2 million
in net income and $.05 in earnings per share for the three and twelve month
periods ended March 31, 1997.
During the first quarter of 1996, the Company recorded a pre-tax gain of
$15.3 million from the sale of wireline properties in Nevada to Citizens. The
Company also incurred $15.8 million of termination fees related to the early
retirement of $200 million of long-term debt. Finally, the Company realized a
loss of $1.8 million related to the withdrawal of its investment in GO
Communications Corporation ("GOCC"). The Company's investment in GOCC was
subject to a number of conditions, including GOCC's ability to secure "C" band
licenses in the PCS auctions conducted by the FCC. Following GOCC's decision
to exit the PCS auctions, the Company elected to withdraw its investment in
GOCC. The net income impact from these transactions resulted in a decrease of
$1.5 million in net income and $.01 in earnings per share for the three month
period ended March 31, 1996.
Including the impact of the above transactions, net income for the twelve
month period of 1996 includes pre-tax gains totaling $65.1 million from the
disposal of certain wireline properties to Citizens, termination fees totaling
$29.8 million related to the refinancing of long-term debt completed in
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October 1995 and March 1996, an additional pre-tax write-down of $5.0 million
to reflect the net realizable value of the information services segment's check
processing operations, and the $1.8 million loss incurred on the withdrawal of
the Company's investment in GOCC. The net income impact from these
transactions resulted in an increase of $18.4 million in net income and $.10
in earnings per share for the twelve month period ended March 31, 1996.
Income Taxes
Income tax expense increased $12.0 million or 23 percent and decreased
$39.3 million or 18 percent for the three and twelve month periods of 1997,
respectively. The changes in income tax expense in both periods primarily
reflect the tax-related impact of the various one-time, non-extraordinary
items, as previously discussed. Income tax expense for the three month period
of 1997 includes additional tax expense of $7.0 million related to the gain on
the sale of the healthcare operations. In addition to including the tax
effects of this gain, income tax expense for the twelve month period of 1997
includes a net tax benefit of $47.6 million resulting from the write-downs of
the wire and cable subsidiary, community banking operations and other assets
primarily consisting of capitalized software development costs. Income tax
expense for the three month period of 1996 includes a net tax benefit of
$0.8 million resulting from the payment of termination fees related to a debt
refinancing and a loss incurred on the withdrawal of an investment, partially
offset by the gain on the sale of wireline properties in Nevada to Citizens.
Income tax expense for the twelve month period of 1996 includes net tax expense
of $10.1 million resulting from gains on the sale of wireline properties to
Citizens, partially offset by the payment of termination fees related to two
debt refinancings, the write-down of the check processing operations and a loss
incurred on the withdrawal of an investment. Excluding the impact on tax
expense of these transactions, income tax expense would have increased
$4.2 million or 8 percent and $11.4 million or 5 percent in the three and
twelve month periods of 1997, respectively, consistent with the overall growth
in the Company's earnings from continuing operations before one-time,
non-extraordinary items.
Net Income Applicable to Common Shares
Net income applicable to common shares increased $17.7 million or
21 percent and decreased $50.6 million or 14 percent for the three and twelve
month periods of 1997, respectively. Primary earnings per common share
increased 23 percent and decreased 14 percent for the three and twelve month
periods of 1997, respectively. Excluding the net income impact in each period
of the one-time, non-extraordinary items detailed in the sections entitled
"Provision to Reduce Carrying Value of Certain Assets" and "Gain on Disposal of
Assets, Write-Down of Assets and Other", net income would have increased $6.9
million or 8 percent and $31.2 million or 9 percent and primary earnings per
share would have increased 9 percent in both the three and twelve month periods
ended March 31, 1997, respectively.
Average Common Shares Outstanding
The average number of common shares outstanding decreased 1 percent in the
three month period of 1997 and decreased slightly in the twelve month period
of 1997. The decreases in both periods were primarily due to the Company's
repurchase of its common stock on the open market, partially offset by
additional shares issued under the Company's stock option plans.
11
<PAGE>
Other Financial Information and Forward-Looking Statements
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share",
("SFAS 128"). This pronouncement, effective for calendar year 1997 financial
statements, establishes new standards for computing and presenting earnings per
share ("EPS") information. This standard replaces the presentation of primary
EPS with a presentation of basic EPS and requires dual presentation of basic
and diluted EPS on the face of the income statement for all entities with
complex capital structures. Additionally, the standard requires a
reconciliation of the numerator and denominator of the basic EPS computation
to the numerator and denominator of the diluted EPS computation. Basic EPS
excludes dilution and is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding for
the period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock. The Company estimates that the annual impact to its EPS
disclosures of reporting basic EPS versus primary EPS will be an increase of
approximately $.01 per share. Accordingly, the basic and diluted EPS
disclosures that will be included in the Company's 1997 Annual Report to
Stockholders will not be materially different from the primary EPS data
disclosed by the Company for the first three quarters of 1997.
This Management's Discussion and Analysis of Financial Condition and
Results of Operations includes, and future filings by the Company on Form 10-K,
Form 10-Q and Form 8-K and future oral and written statements by the Company
and its management may include, certain forward-looking statements, including
(without limitation) statements with respect to anticipated future operating
and financial performance, growth opportunities and growth rates, acquisition
and divestitive opportunities and other similar forecasts and statements of
expectation. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" and "should", and variations of these words
and similar expressions, are intended to identify these forward-looking
statements. Forward-looking statements by the Company and its management are
based on estimates, projections, beliefs and assumptions of management and are
not guarantees of future performance. The Company disclaims any obligation to
update or revise any forward-looking statement based on the occurrence of
future events, the receipt of new information, or otherwise.
Actual future performance, outcomes and results may differ materially from
those expressed in forward-looking statements made by the Company and its
management as a result of a number of important factors. Representative
examples of these factors include (without limitation) rapid technological
developments and changes in the telecommunications and information services
industries; ongoing deregulation (and the resulting likelihood of significantly
increased price and product/service competition) in the telecommunications
industry as a result of the Telecommunications Act of 1996 and other similar
federal and state legislation and the federal and state rules and regulations
enacted pursuant to that legislation; regulatory limitations on the Company's
ability to change its pricing for communications services; the possible future
unavailability of SFAS 71 to the Company's wireline subsidiaries; continuing
consolidation in certain industries, such as banking, served by the Company's
information services business; and the risks associated with relatively large,
multi-year contracts in the Company's information services business. In
addition to these factors, actual future performance, outcomes and results may
differ materially because of other, more general, factors including (without
limitation) general industry and market conditions and growth rates, domestic
and international economic conditions, governmental and public policy changes
and the continued availability of financing in the amounts, at the terms and
on the conditions necessary to support the Company's future business.
12
<PAGE>
ALLTEL CORPORATION
FORM 10-Q
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) See the exhibits specified on the Index of Exhibits located at
Sequential Page 15.
(b) Reports on Form 8-K:
The Company filed a Current Report on Form 8-K dated
February 3, 1997, which was filed in connection with the
extension of the Company's Shareholders Rights Plan.
No other reports on Form 8-K have been filed during the
quarter for which this report is filed.
13
<PAGE>
SIGNATURE
Pursuant to the requirements 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)
/s/ Dennis J. Ferra
Dennis J. Ferra
Senior Vice President and
Chief Financial Officer
May 13, 1997
14
<PAGE>
ALLTEL CORPORATION
FORM 10-Q
INDEX OF EXHIBITS
Form 10-Q Sequential
Exhibit No. Description Page No.
(10)(k)(5) Amendments No. 8 and 9 to ALLTEL Corporation 25 - 29
Pension Plan (January 1, 1994 Restatement)
(10)(l)(4) Amendment No. 6 to ALLTEL Corporation 30 - 36
Profit-Sharing Plan (January 1, 1994 Restatement)
(10)(o)(4) Amendment No. 6 to ALLTEL Corporation 37 - 42
Thrift Plan (January 1, 1994 Restatement)
(19) Interim Report to Stockholders and 16 - 24
Notes to Consolidated Financial Statements
for the periods ended March 31, 1997
(27) Financial Data Schedule 43
for the three months ended March 31, 1997
15
EXHIBIT 19
<TABLE>
<CAPTION>
HIGHLIGHTS (UNAUDITED)
Three Months Ended March 31, Twelve Months Ended March 31,
% Increase % Increase
(Dollars in thousands, except per share amounts) 1997 1996 (Decrease) 1997 1996 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Revenues and sales $784,305 $774,266 1 $3,202,457 $3,120,376 3
Net income $101,708 $ 84,073 21 $ 309,372 $ 360,066 (14)
Primary earnings per average common
share outstanding $.54 $.44 23 $1.63 $1.89 (14)
Excluding provision to reduce carrying value
of certain assets, gain on disposal of
assets, write-down of assets, and other:
Operating income $181,225 $171,165 6 $ 721,965 $ 693,605 4
Net income $ 92,487 $ 85,554 8 $ 372,867 $ 341,698 9
Earnings per share $.49 $.45 9 $1.96 $1.79 9
Average common shares
including equivalents 188,009,000 190,610,000 (1) 189,732,000 190,218,000 -
Annual dividend rate per common share $1.10 $1.04 6
Total assets $5,227,170 $5,246,250 -
Wireline access lines 1,707,877 1,622,499 5
Wireless customers 843,658 663,406 27
16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BUSINESS SEGMENTS (UNAUDITED)
Three Months Ended March 31, Twelve Months Ended March 31,
% Increase % Increase
(Dollars in thousands) 1997 1996 (Decrease) 1997 1996 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Revenues and Sales:
Wireline $301,176 $289,808 4 $1,180,444 $1,184,955 -
Wireless 124,117 108,153 15 491,073 417,556 18
Total communications 425,293 397,961 7 1,671,517 1,602,511 4
Information services 217,164 226,659 (4) 949,576 934,691 2
Product distribution 107,590 111,634 (4) 448,336 446,263 -
Other operations 34,258 38,012 (10) 133,028 136,911 (3)
Total $784,305 $774,266 1 $3,202,457 $3,120,376 3
Operating Income:
Wireline $105,901 $105,435 - $ 408,848 $ 420,079 (3)
Wireless 39,688 32,547 22 158,861 132,590 20
Total communications 145,589 137,982 6 567,709 552,669 3
Information services 33,664 29,966 12 70,733 134,464 (47)
Product distribution 4,417 6,459 (32) 21,618 26,662 (19)
Other operations 2,928 2,454 19 11,755 7,126 65
Corporate expenses (5,373) (5,696) (6) (70,130) (27,316) 157
Total $181,225 $171,165 6 $ 601,685 $ 693,605 (13)
17
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Twelve Months
Ended March 31, Ended March 31,
(Dollars in thousands, except per share amounts) 1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues and Sales:
Service revenues $625,814 $607,046 $2,543,613 $2,458,106
Product sales 158,491 167,220 658,844 662,270
Total revenues and sales 784,305 774,266 3,202,457 3,120,376
Costs and Expenses:
Cost of products sold 104,070 108,467 444,059 442,517
Operations 340,255 336,417 1,401,464 1,353,188
Maintenance 35,884 36,699 146,408 147,439
Depreciation and amortization 106,728 105,992 424,851 419,317
Taxes, other than income taxes 16,143 15,526 63,710 64,310
Provision to reduce carrying value
of certain assets - - 120,280 -
Total costs and expenses 603,080 603,101 2,600,772 2,426,771
Operating Income 181,225 171,165 601,685 693,605
Other income, net (573) 546 1,806 1,451
Interest expense (32,002) (34,210) (128,624) (142,506)
Gain on disposal of assets,
write-down of assets and other 16,216 (2,278) 16,216 28,497
Income before income taxes 164,866 135,223 491,083 581,047
Income taxes 63,158 51,150 181,711 220,981
Net income 101,708 84,073 309,372 360,066
Preferred dividends 258 274 1,055 1,115
Net income applicable to common shares $101,450 $ 83,799 $ 308,317 $ 358,951
Primary Earnings per Share $.54 $.44 $1.63 $1.89
18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Twelve Months
Ended March 31, Ended March 31,
(Dollars in thousands) 1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Cash Provided by Operations $246,904 $177,125 $875,961 $698,185
Cash Flows from Investing Activities:
Additions to property, plant and equipment (145,351) (102,866) (506,186) (485,781)
Sale of property 104,856 38,687 104,856 251,598
Purchase of property, net of cash acquired (32,946) -- (32,946) --
Additions to capitalized software development costs (15,513) (12,930) (80,902) (53,385)
Investments sold (acquired) (680) 31,126 (14,022) 6,494
Other, net (1,238) (6,916) (57,366) (79,996)
Net cash used in investing activities (90,872) (52,899) (586,566) (361,070)
Cash Flows from Financing Activities:
Dividends on preferred and common stock (51,997) (49,489) (200,603) (186,257)
Reductions in long-term debt (61,383) (357,203) (14,438) (621,981)
Preferred stock redemptions and purchases (44) (54) (694) (1,188)
Purchase of common stock (32,462) -- (108,066) --
Long-term debt issued -- 305,707 10,294 496,749
Common stock issued 4,246 1,630 6,140 12,875
Net cash used in financing activities (141,640) (99,409) (307,367) (299,802)
Increase (decrease) in cash and short-term investments 14,392 24,817 (17,972) 37,313
Cash and Short-term Investments:
Beginning of period 13,874 21,421 46,238 8,925
End of period $ 28,266 $ 46,238 $ 28,266 $ 46,238
19
</TABLE>
<PAGE>
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
March 31, Dec. 31, March 31,
Assets (Dollars in thousands) 1997 1996 1996
<S> <C> <C> <C>
Current Assets:
Cash and short-term investments $ 28,266 $ 13,874 $ 46,238
Accounts receivable (less allowance for
doubtful accounts of $21,376, $21,271
and $18,431, respectively) 504,878 554,316 589,345
Materials and supplies 17,893 17,152 21,676
Inventories 83,434 85,970 96,278
Prepaid expenses 29,984 38,156 27,211
Total current assets 664,455 709,468 780,748
Investments 736,401 838,651 728,447
Excess of cost over equity in
purchased entities 438,044 425,823 476,375
Property, Plant and Equipment:
Wireline 3,794,874 3,827,659 3,651,202
Wireless 611,317 582,707 494,220
Information services 481,190 506,905 476,545
Other 24,132 27,618 26,931
Under construction 256,675 169,439 166,052
Total property, plant and equipment 5,168,188 5,114,328 4,814,950
Less accumulated depreciation 2,085,804 2,072,789 1,865,806
Net property, plant and equipment 3,082,384 3,041,539 2,949,144
Other assets 305,886 343,702 311,536
Total Assets $5,227,170 $5,359,183 $5,246,250
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Liabilities and Shareholders' Equity
March 31, Dec. 31, March 31,
1997 1996 1996
<S> <C> <C> <C>
Current Liabilities:
Current maturities of long-term debt $ 40,331 $ 37,798 $ 37,039
Accounts payable 213,422 240,570 210,045
Advance payments and customers' deposits 67,371 78,080 80,516
Accrued taxes 112,643 41,932 73,888
Accrued dividends 52,176 52,440 49,166
Other current liabilities 145,965 139,876 139,584
Total current liabilities 631,908 590,696 590,238
Deferred Credits:
Investment tax 11,625 12,915 20,204
Income taxes 589,068 661,972 633,666
Total deferred credits 600,693 674,887 653,870
Long-term debt 1,698,913 1,756,142 1,699,719
Other liabilities 236,263 233,896 238,683
Preferred stock, redeemable 6,413 6,455 6,998
Shareholders' Equity:
Preferred stock 9,196 9,198 9,240
Common stock 186,544 187,200 189,440
Additional capital 258,219 285,779 357,183
Unrealized holding gain on investments 285,976 351,867 293,600
Retained earnings 1,313,045 1,263,063 1,207,279
Total shareholders' equity 2,052,980 2,097,107 2,056,742
Total Liabilities and Shareholders' Equity $5,227,170 $5,359,183 $5,246,250
21
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
~
1. Financial Statement Presentation:
The consolidated financial statements at March 31, 1997 and 1996 and for
the three and twelve month periods then ended are unaudited and reflect
all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of
the financial position and operating results for the interim periods.
Certain prior year amounts have been reclassified to conform with the 1997
financial statement presentation.
2. Assets Held For Disposal:
During the third quarter of 1996, the Company recorded a pre-tax write-down
of $45.3 million in the carrying value of goodwill related to its product
distribution segment's wire and cable subsidiary, HWC Distribution Corp.,
("HWC"). This write-down resulted from the Company's plan to dispose of
this non-strategic operation. The Company expects to complete the sale of
HWC by the end of 1997.
Operating results of the wire and cable subsidiary included in the
Company's consolidated results of operations for the three and twelve
months ended March 31, 1997 and 1996, were as follows:
(Thousands)
Three Months Twelve Months
Ended Ended
1997 1996 1997 1996
Revenues and sales $31,530 $41,317 $146,749 $161,412
Operating income $ 1,139 $ 2,431 $ 6,627 $ 11,031
22
<PAGE>
TO ALLTEL STOCKHOLDERS:
ALLTEL Corporation recently announced its financial results for the period
ended March 31, 1997.
First quarter earnings per share from operations were 49 cents per share,
compared with 45 cents per share a year ago, a 9 percent increase. Net income
from operations for the first quarter of 1997 was $92,487,000, compared with
$85,554,000 in the first quarter of 1996, an increase of 8 percent. Revenues
and sales were $784,305,000, compared with $774,266,000 in the corresponding
quarter of 1996.
Earnings per share from operations for the 12 months ended March 31, 1997
were $1.96, compared to $1.79 a year ago, while net income from operations was
$372,867,000, compared with $341,698,000 in 1996.
In the first quarter, ALLTEL recognized a one-time, after-tax gain of
$9,221,000 from the disposition of our healthcare business. Including this
one-time item, first quarter earnings per share rose 23 percent to 54 cents,
and net income rose 21 percent to $101,708,000. As reported in previous
quarters, rolling 12-month net income for 1997 includes one-time adjustments
resulting in net write-downs after tax of approximately $63,495,000. Reported
earnings per share and net income for the 12 months ended March 31, 1997 were
$1.63 and $309,372,000, respectively.
ALLTEL delivered solid performance as we moved to integrate our wireline
(telephone) and wireless (cellular) businesses to take advantage of the growing
demand for communications services.
Wireline had strong access line growth leading to good revenue growth. In
addition, we continued to support several new service offerings, such as long
distance and Internet service, even as we complete plans to offer competitive
communications services in Little Rock.
Wireless produced double-digit growth in earnings, customers, revenues and
operating income. We were also successful in reducing fraud through the
implementation of fraud prevention measures.
Information services signed a major information services contract in the
international marketplace. First quarter results also include the disposition
of our healthcare operations, which reduced the reported revenue growth rate.
Company Signs International Outsourcing Contract
ALLTEL signed a seven-year agreement with Colonial Limited, an Australian-based
financial services provider, to create and operate a comprehensive information
and telecommunications system. The Colonial Group has operations in 11
countries and assets of more than $30 billion.
The contract is one of the largest outsourcing agreements in ALLTEL's
history. This was a significant competitive win for us and reflects our
growing reputation as an international information technology firm capable of
providing a full range of sophisticated services to very large customers.
23
<PAGE>
ALLTEL Combines Wireline, Wireless Operations
ALLTEL announced in March that we are combining our wireline and wireless
operations into a single organization - ALLTEL Communications - capable of
delivering a full range of communications products and services to customers
in our markets.
The convergence of the business units will improve ALLTEL's competitive
position in the fast-changing telecommunications marketplace, create new jobs
and enable us to provide our customers one-stop shopping for a broad array of
services.
1997 Stockholders Meeting Results
At ALLTEL's Annual Meeting of Stockholders held April 24 in Little Rock,
Arkansas, Joe T. Ford, Scott T. Ford, John P. McConnell and Josie C. Natori
were elected directors to the class whose term will expire in 2000.
Ben W. Agee retired from the Company's Board of Directors. Agee joined the
board in 1988. His years of dedicated service greatly benefited ALLTEL and its
stockholders.
Board Names President, Approves Expanded Share Repurchase, Declares Dividends
ALLTEL's Board of Directors named Scott T. Ford president of the corporation.
Ford previously served as executive vice president of the Company.
The board also approved an expansion of the Company's 3.5 million share
repurchase program. Effective immediately, the program authorizes repurchase of
an additional 3.5 million shares for a total of 7 million shares of ALLTEL
common stock.
In addition, the board declared regular quarterly dividends on ALLTEL's
common stock. The 27.5 cent dividend is payable July 3, 1997 to stockholders of
record as of June 6, 1997.
Regular quarterly dividends were also declared on all series of the
Company's preferred stock. Preferred dividends are payable June 15, 1997 to
stockholders of record as of May 23, 1997.
/s/ Joe T. Ford
Joe T. Ford,
Chairman and Chief Executive Officer
April 24, 1997
24
AMENDMENT NO. 8
TO
ALLTEL CORPORATION PENSION PLAN
(January 1, 1994 Restatement)
WHEREAS, ALLTEL Corporation (the "Company") maintains the ALLTEL
Corporation Pension Plan, as amended and restated effective January 1, 1994,
and subsequently further amended, (the "Plan"); and
WHEREAS, the Company desires further to amend the Plan;
NOW THEREFORE, BE IT RESOLVED, that the Company hereby amends the
Plan in the respects hereinafter set forth.
Effective as if set forth in the January 1, 1994 Restatement of the
Plan when originally executed, subsection (h) of Section 8.01 of the Plan is
amended to provide as follows:
(h) Key Employee
An Employee or former Employee who, at any time during the current
Plan Year or any of the four preceding Plan Years, is:
(1) an officer of an employer having an annual compensation greater
than 50% of the amount in effect under Section 415(c)(1)(A) of
the Code for any such Plan Year (limited to no more than 50
Employees or, if lesser, the greater of three (3) or 10% of the
Employees);
(2) one of the 10 Employees who, (A) own (or are considered as
owning within the meaning of Section 318 of the Code) during the
Plan Year containing the Determination Date or any of the four
preceding Plan Years both more than one-half percent (0.5%)
ownership interests in value and the largest percentage
ownership interests in value of any of the employees required to
be aggregated under Section 414(b), (c), or (m) of the Coded
and (B) have during the Plan Year of ownership annual
compensation from the employer of more than the limitation in
effect under Section 415(c)(1)(A) of the Code for the calendar
year in which such Plan Year ends;
(3) a five percent owner (as such term is defined in Section
416(i)(1)(B)(i) of the Code); or
25
<PAGE>
(4) a one percent owner (as such term is defined in Section
416(i)(1)(B)(ii) of the Code) having an annual compensation of
more than $150,000.
For purposes of this subsection (h), compensation shall mean
compensation as defined in Section 415(c)(3) of the Code and the
regulations issued thereunder, without regard to Sections 125,
402(e)(3), and 402(h)(1)(B) of the Code, and excluding amounts in
excess of the limitations of Section 401(a)(17) of the Code, of an
Employee paid to him by and Employer or other member of the
Controlled Group during a Plan Year beginning after
December 31, 1983.
The term "Key Employee" shall also include such Employee's
Beneficiary in the event of his death.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
caused this Amendment to be executed on this 2nd day of Feb., 1997.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: V.P. Human Resources
26
<PAGE>
AMENDMENT NO. 9
TO
ALLTEL CORPORATION PENSION PLAN
(January 1, 1994 Restatement)
WHEREAS, ALLTEL Corporation (the "Company") maintains the ALLTEL
Corporation Pension Plan, as amended and restated effective January 1, 1994,
and subsequently further amended, (the "Plan"); and
WHEREAS, the Company desires further to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED, that the Company hereby amends the
Plan in the respects hereinafter set forth.
1. Effective as of December 26, 1994, Section 13 of the Plan is
amended by adding the following Section13.25 thereto:
13.25 Employees of Medical Data Technologies, Inc.
(a) Effective Date - December 26, 1994.
(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 Section401(a)(12) of the Code - Not
Applicable.
(j) Miscellaneous - See APPENDIX Z - SPECIAL PROVISIONS APPLICABLE
TO CERTAIN EMPLOYEES OF MEDICAL DATA TECHNOLOGIES, INC., which
follows immediately hereafter.
27
<PAGE>
APPENDIX Z
SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
OF
MEDICAL DATA TECHNOLOGIES, INC.
Effective as of December 26, 1994, certain employees of Medical Data
Technologies, Inc. ("Medical Data") became employees of the Controlled Group.
Notwithstanding any other provision of the Plan, the Plan is modified as set
forth below with respect to active employees of Medical Data who became
employees of the Controlled Group on December 26, 1994.
A. Section 1.07 is modified by adding to the definition thereof the following:
1.07Z "Basic Compensation" shall include only amounts earned (as an
Employee of an Employer) after December 25, 1994.
B. Section 1.14 is modified by adding to the definition thereof the following:
1.14Z "Compensation" shall include only amounts earned (as an Employee
of an Employer) after December 25, 1994.
C. Section 1.37(g) is modified as follows:
1.37(g)Z 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 December 26, 1994: An Employee's
period(s) of employment with Medical Data after
December 25, 1989, and prior to December 26, 1994,
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 December 26, 1994: In
accordance with the provisions of Section 1.37(g).
2
28
<PAGE>
D. Section 1.37(d) is modified as follows:
1.37(d)Z 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 December 26, 1994: None.
(ii) Benefit Service From and After December 26, 1994: In
accordance with the provisions of Section 1.37(d).
E. Section 1.37(f) is modified as follows:
1.37(f)Z 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 December 26, 1994: An Employee's
period(s) of employment with Medical Data after
December 25, 1989, and prior to December 26, 1994,
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 December 26, 1994: In
accordance with the provisions of Section 1.37(f).
IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
caused this Amendment to be executed on this 3rd day of February, 1997.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: V.P. Human Resources
and Administraion
3
29
AMENDMENT NO. 6
TO
ALLTEL CORPORATION PROFIT-SHARING PLAN
(January 1, 1994 Restatement)
WHEREAS, ALLTEL Corporation (the "Company") maintains the ALLTEL
Corporation Profit-Sharing Plan, as amended and restated effective
January 1, 1994, and subsequently further amended, (the "Plan"); and
WHEREAS, the Company desires further to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED, that the Company hereby amends the
Plan in the respects hereinafter set forth.
1. Effective as of March 1, 1996, Section 13.05 of the Plan is
amended by adding a new subsection (i) at the end thereof to provide as
follows:
(i) Each person who
(i) was an active employee of Five Paces, Inc. and became
an Employee on March 1, 1996;
(ii) met the eligibility requirements to become a
Participant on or before the last day of the 1996
Plan Year; and
(iii) is not otherwise eligible for an allocation of
Employer Contribution for the 1996 Plan Year under
Section 13.04;
shall receive an allocation of Employer Contribution for
the 1996 Plan Year as provided in this subsection (i), 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Subject to the
last sentence of Section 13.01, the portion of Employer
Contribution assigned to the Region including such
Participants shall be specified on the Schedule for the 1996
Plan Year and shall be allocated among the Participants in
such Region as provided in Section 13.04, but without regard
to the requirement that a Participant have a Year of
Participation. Notwithstanding the provisions of
Section 13.04, any Participant who would receive an
allocation of Employer Contribution under this subsection
(i) but for his transfer of employment prior to
December 31, 1996, shall be deemed to be in the Region
including the Participants eligible under this
subsection (i) for the 1996 Plan Year.
30
<PAGE>
2. Effective as of March 1, 1996, Section 13.05 of the Plan is
amended by adding a new subsection (j) at the end thereof to provide as
follows:
(j) Each person who
(i) was an active employee of Rockland Trust Company and
became an Employee on March 1, 1996;
(ii) met the eligibility requirements to become a
Participant on or before the last day of the 1996
Plan Year; and
(iii) is not otherwise eligible for an allocation of
Employer Contribution for the 1996 Plan Year under
Section 13.04;
shall receive an allocation of Employer Contribution for the
1996 Plan Year as provided in this subsection (j), 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Subject to the
last sentence of Section 13.01, the portion of Employer
Contribution assigned to the Region including such
Participants shall be specified on the Schedule for the 1996
Plan Year and shall be allocated among the Participants in
such Region as provided in Section 13.04, but without regard
to the requirement that a Participant have a Year of
Participation. Notwithstanding the provisions of
Section 13.04, any Participant who would receive an
allocation of Employer Contribution under this
subsection (j) but for his transfer of employment prior to
December 31, 1996, shall be deemed to be in the Region
including the Participants eligible under this
subsection (j) for the 1996 Plan Year.
3. Effective as of March 17, 1996, Section 13.05 of the Plan is
amended by adding a new subsection (k) at the end thereof to provide as
follows:
(k) Each person who
(i) was an active employee of St. Vincent Infirmary
Medical Center and became an Employee on
March 17, 1996;
(ii) met the eligibility requirements to become a
Participant on or before the last day of the 1996
Plan Year; and
(iii) is not otherwise eligible for an allocation of
Employer Contribution for the 1996 Plan Year under
Section 13.04;
2
31
<PAGE>
shall receive an allocation of Employer Contribution for
the 1996 Plan Year as provided in this subsection (k), 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Subject to the
last sentence of Section 13.01, the portion of Employer
Contribution assigned to the Region including such
Participants shall be specified on the Schedule for the 1996
Plan Year and shall be allocated among the Participants in
such Region as provided in Section 13.04, but without regard
to the requirement that a Participant have a Year of
Participation. Notwithstanding the provisions of Section
13.04, any Participant who would receive an allocation of
Employer Contribution under this subsection (k) but for his
transfer of employment prior to December 31, 1996, shall be
deemed to be in the Region including the Participants
eligible under this subsection (k) for the 1996 Plan Year.
4. Effective as of May 17, 1996, Section 13.05 of the Plan is
amended by adding a new subsection (l) at the end thereof to provide as
follows:
(l) Each person who
(i) was an active employee of Citizens Savings Bank and
became an Employee on May 17, 1996;
(ii) met the eligibility requirements to become a
Participant on or before the last day of the 1996
Plan Year; and
(iii) is not otherwise eligible for an allocation of
Employer Contribution for the 1996 Plan Year under
Section 13.04;
shall receive an allocation of Employer Contribution for
the 1996 Plan Year as provided in this subsection (l), 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Subject to the
last sentence of Section 13.01, the portion of Employer
Contribution assigned to the Region including such
Participants shall be specified on the Schedule for the 1996
Plan Year and shall be allocated among the Participants in
such Region as provided in Section 13.04, but without regard
to the requirement that a Participant have a Year of
Participation. Notwithstanding the provisions of Section
13.04, any Participant who would receive an allocation of
Employer Contribution under this subsection (l) but for his
transfer of employment prior to December 31, 1996, shall be
3
32
<PAGE>
deemed to be in the Region including the Participants
eligible under this subsection (l) for the 1996 Plan Year.
5. Effective as of June 1, 1996, Section 13.05 of the Plan is
amended by adding a new subsection (m) at the end thereof to provide as
follows:
(m) Each person who
(i) was an active employee of Security First Network
Bank and became an Employee on June 1, 1996;
(ii) met the eligibility requirements to become a
Participant on or before the last day of the 1996
Plan Year; and
(iii) is not otherwise eligible for an allocation of
Employer Contribution for the 1996 Plan Year under
Section 13.04;
shall receive an allocation of Employer Contribution for the
1996 Plan Year as provided in this subsection (m), 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Subject to the
last sentence of Section 13.01, the portion of Employer
Contribution assigned to the Region including such
Participants shall be specified on the Schedule for the 1996
Plan Year and shall be allocated among the Participants in
such Region as provided in Section 13.04, but without regard
to the requirement that a Participant have a Year of
Participation. Notwithstanding the provisions of Section
13.04, any Participant who would receive an allocation of
Employer Contribution under this subsection (m) but for his
transfer of employment prior to December 31, 1996, shall be
deemed to be in the Region including the Participants
eligible under this subsection (m) for the 1996 Plan Year.
6. Effective as of June 23, 1996, Section 13.05 of the Plan is
amended by adding a new subsection (n) at the end thereof to provide as
follows:
(n) Each person who
(i) was an active employee of St. Elizabeth Hospital and
became an Employee on June 23, 1996;
(ii) met the eligibility requirements to become a
Participant on or before the last day of the 1996
Plan Year; and
4
33
<PAGE>
(iii) is not otherwise eligible for an allocation of
Employer Contribution for the 1996 Plan Year under
Section 13.04;
shall receive an allocation of Employer Contribution for the
1996 Plan Year as provided in this subsection (n), 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Subject to the
last sentence of Section 13.01, the portion of Employer
Contribution assigned to the Region including such
Participants shall be specified on the Schedule for the 1996
Plan Year and shall be allocated among the Participants in
such Region as provided in Section 13.04, but without regard
to the requirement that a Participant have a Year of
Participation. Notwithstanding the provisions of Section
13.04, any Participant who would receive an allocation of
Employer Contribution under this subsection (n) but for his
transfer of employment prior to December 31, 1996, shall be
deemed to be in the Region including the Participants
eligible under this subsection (n) for the 1996 Plan Year.
7. Effective as of July 1, 1996, Section 13.05 of the Plan is
amended by adding a new subsection (o) at the end thereof to provide as
follows:
(o) Each person who
(i) was an active employee of Regional Acceptance
Corporation and became an Employee on July 1, 1996;
(ii) met the eligibility requirements to become a
Participant on or before the last day of the 1996
Plan Year; and
(iii) is not otherwise eligible for an allocation of
Employer Contribution for the 1996 Plan Year under
Section 13.04;
shall receive an allocation of Employer Contribution for the
1996 Plan Year as provided in this subsection (o), 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Subject to the
last sentence of Section 13.01, the portion of Employer
Contribution assigned to the Region including such
Participants shall be specified on the Schedule for the 1996
Plan Year and shall be allocated among the Participants in
such Region as provided in Section 13.04, but without regard
to the requirement that a Participant have a Year of
5
34
<PAGE>
Participation. Notwithstanding the provisions of Section
13.04, any Participant who would receive an allocation of
Employer Contribution under this subsection (o) but for his
transfer of employment prior to December 31, 1996, shall be
deemed to be in the Region including the Participants
eligible under this subsection (o) for the 1996 Plan Year.
8. Effective as of September 1, 1996, Section 13.05 of the Plan is
amended by adding a new subsection (p) at the end thereof to provide as
follows:
(p) Each person who
(i) was an active employee of West Jefferson Medical
Center and became an Employee on September 1, 1996;
(ii) met the eligibility requirements to become a
Participant on or before the last day of the 1996
Plan Year; and
(iii) is not otherwise eligible for an allocation of
Employer Contribution for the 1996 Plan Year under
Section 13.04;
shall receive an allocation of Employer Contribution for the
1996 Plan Year as provided in this subsection (p), 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Subject to the
last sentence of Section 13.01, the portion of Employer
Contribution assigned to the Region including such
Participants shall be specified on the Schedule for the 1996
Plan Year and shall be allocated among the Participants in
such Region as provided in Section 13.04, but without regard
to the requirement that a Participant have a Year of
Participation. Notwithstanding the provisions of Section
13.04, any Participant who would receive an allocation of
Employer Contribution under this subsection (p) but for his
transfer of employment prior to December 31, 1996, shall be
deemed to be in the Region including the Participants
eligible under this subsection (p) for the 1996 Plan Year.
9. Effective as of the date of execution hereof, the phrase
"paragraph (b), (c), (d), (e), (f), or (g)" in subsection (a) of Section 9.04
of the Plan is deleted therefrom and the phrase "the succeeding subsections" is
substituted therefor.
10. Effective as of December 26, 1994, Section 9.04 of the Plan is
amended by adding a new subsection (h) at the end thereof to provide as
follows:
(h) In determining Years of Eligibility Service for an Employee
who was an employee of Medical Data Technologies, Inc.
6
35
<PAGE>
("Medical Data") immediately prior to December 26, 1994, and
became an Employee on December 26, 1994, the Employee's
period or periods of employment with Medical Data prior to
December 26, 1994, that would have been taken into account
under the Plan if such period or periods of employment were
service with a member of the Controlled Group, shall be
counted as Years of Eligibility Service. Notwithstanding
any other provision of the Plan, there shall be no
duplication of Years of Eligibility Service under the Plan
by reason of service (or hours of service) in respect of any
single period or otherwise.
11. Effective as of the date of execution hereof, the phrase
"paragraph (b), (c), (d), (e), (f), (g), or (h)" in subsection (a) of Section
9.05 of the Plan is deleted therefrom and the phrase "the succeeding
subsections" is substituted therefor.
12. Effective as of December 26, 1994, Section 9.05 of the Plan is
amended by adding a new subsection (i) at the end thereof to provide as
follows:
(i) In determining Years of Vesting Service for an Employee who
was an employee of Medical Data Technologies, Inc.
("Medical Data") immediately prior to December 26, 1994, and
became an Employee on December 26, 1994, the Employee's
period or periods of employment with Medical Data prior to
December 26, 1994, that would have been taken into account
under the Plan if such period or periods of employment were
service with a member of the Controlled Group, shall be
counted as Years of Vesting Service. Notwithstanding any
other provision of the Plan, there shall be no duplication
of Years of Vesting Service under the Plan by reason 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 3rd day of February, 1997.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: V.P. Human Resources
and Administration
7
36
AMENDMENT NO. 6
TO
ALLTEL CORPORATION THRIFT PLAN
(January 1, 1994 Restatement)
WHEREAS, ALLTEL Corporation (the "Company") maintains the ALLTEL
Corporation Thrift Plan, as amended and restated effective January 1, 1994, and
subsequently further amended, (the "Plan"); and
WHEREAS, the Company desires further to amend the Plan;
NOW, THEREFORE, BE IT RESOLVED, that the Company hereby amends the
Plan in the respects hereinafter set forth:
1. Effective as of March 1, 1996, a new Section 13.11 of the Plan is
added to the Plan to provide as follows:
13.11 Allocation of Employer Qualified Nonelective Contributions for Certain
Transfer Employees
(a) Each person who
(i) was an active employee of Five Paces, Inc. and became an
Employee on March 1, 1996;
(ii) met the eligibility requirements to become a Participant
as provided in subsection (b) of Section 10.01 on or
before the last day of the 1996 Plan Year; and
(iii) is not otherwise eligible for an allocation of the
Employer Qualified Nonelective Contribution for the 1996
Plan Year under Section 13.04;
shall receive an allocation of the Employer Qualified Nonelective
Contribution for the 1996 Plan Year, as provided in this
subsection (a) 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Such a Participant
shall receive an allocation of the Employer Qualified Nonelective
Contribution as provided in Section 13.04, but without regard to
the requirement that a Participant have a Year of Participation.
37
<PAGE>
(b) Each person who
(i) was an active employee of Rockland Trust Company and
became an Employee on March 1, 1996;
(ii) met the eligibility requirements to become a Participant
as provided in subsection (b) of Section 10.01 on or
before the last day of the 1996 Plan Year; and
(iii) is not otherwise eligible for an allocation of the
Employer Qualified Nonelective Contribution for the 1996
Plan Year under Section 13.04; shall receive an allocation
of the Employer Qualified Nonelective Contribution for the
1996 Plan Year, as provided in this subsection (b) 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Such a
Participant shall receive an allocation of the Employer
Qualified Nonelective Contribution as provided in Section
13.04, but without regard to the requirement that a
Participant have a Year of Participation.
2. Effective as of March 17, 1996, Section 13.11 of the Plan is
amended by adding a new subsection (c) at the end thereof to provide as
follows:
(c) Each person who
(i) was an active employee of St. Vincent Infirmary Merical
Center and became an Employee on March 17, 1996;
(ii) met the eligibility requirements to become a Participant
as provided in subsection (b) of Section 10.01 on or
before the last day of the 1996 Plan Year; and
(iii) is not otherwise eligible for an allocation of the
Employer Qualified Nonelective Contribution for the 1996
Plan Year under Section 13.04;
shall receive an allocation of the Employer Qualified
Nonelective Contribution for the 1996 Plan Year, as
provided in this subsection (c) 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
2
38
<PAGE>
employment with the Controlled Group completed by the
Participant in the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Such a
Participant shall receive an allocation of the Employer
Qualified Nonelective Contribution as provided in Section
13.04, but without regard to the requirement that a
Participant have a Year of Participation.
3. Effective as of May 17, 1996, Section 13.11 of the Plan is
amended by adding a new subsection (d) at the end thereof to provide as
follows:
(d) Each person who
(i) was an active employee of Citizens Savings Bank and became
an Employee on May 17, 1996;
(ii) met the eligibility requirements to become a Participant
as provided in subsection (b) of Section 10.01 on or
before the last day of the 1996 Plan Year; and
(iii) is not otherwise eligible for an allocation of the
Employer Qualified Nonelective Contribution for the 1996
Plan Year under Section 13.04;
shall receive an allocation of the Employer Qualified Nonelective
Contribution for the 1996 Plan Year, as provided in this
subsection (d) 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Such a Participant
shall receive an allocation of the Employer Qualified Nonelective
Contribution as provided in Section 13.04, but without regard to
the requirement that a Participant have a Year of Participation.
4. Effective as of June 1, 1996, Section 13.11 of the Plan is
amended by adding a new subsection (e) at the end thereof to provide as
follows:
(e) Each person who
(i) was an active employee of Security First Nework Bank and
became an Employee on June 1, 1996;
(ii) met the eligibility requirements to become a Participant
as provided in subsection (b) of Section 10.01 on or
before the last day of the 1996 Plan Year; and
3
39
<PAGE>
(iii) is not otherwise eligible for an allocation of the
Employer Qualified Nonelective Contribution for the 1996
Plan Year under Section 13.04;
shall receive an allocation of the Employer Qualified Nonelective
Contribution for the 1996 Plan Year, as provided in this
subsection (e) 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Such a Participant
shall receive an allocation of the Employer Qualified Nonelective
Contribution as provided in Section 13.04, but without regard to
the requirement that a Participant have a Year of Participation.
5. Effective as of June 23, 1996, Section 13.11 of the Plan is
amended by adding a new subsection (f) at the end thereof to provide as
follows:
(f) Each person who
(i) was an active employee of St. Elizabeth Hospital and
became an Employee on June 23, 1996;
(ii) met the eligibility requirements to become a Participant
as provided in subsection (b) of Section 10.01 on or
before the last day of the 1996 Plan Year; and
(iii) is not otherwise eligible for an allocation of the
Employer Qualified Nonelective Contribution for the 1996
Plan Year under Section 13.04;
shall receive an allocation of the Employer Qualified
Nonelective Contribution for the 1996 Plan Year, as
provided in this subsection (f) 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
the 1996 Plan Year and the denominator of which is three
hundred sixty-five (365). Such a Participant shall
receive an allocation of the Employer Qualified
Nonelective Contribution as provided in Section 13.04, but
without regard to the requirement that a Participant have
a Year of Participation.
6. Effective as of July 1, 1996, Section 13.11 of the Plan is
amended by adding a new subsection (g) at the end thereof to provide as
follows:
4
40
<PAGE>
(g) Each person who
(i) was an active employee of Regional Acceptance Corporation
and became an Employee on July 1, 1996;
(ii) met the eligibility requirements to become a Participant
as provided in subsection (b) of Section 10.01 on or
before the last day of the 1996 Plan Year; and
(iii) is not otherwise eligible for an allocation of the
Employer Qualified Nonelective Contribution for the 1996
Plan Year under Section 13.04;
shall receive an allocation of the Employer Qualified
Nonelective Contribution for the 1996 Plan Year, as
provided in this subsection (g) 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 the 1996 Plan Year and the denominator of
which is three hundred sixty-five (365). Such a
Participant shall receive an allocation of the Employer
Qualified Nonelective Contribution as provided in Section
13.04, but without regard to the requirement that a
Participant have a Year of Participation.
7. Effective as of September 1, 1996, Section 13.11 of the Plan is
amended by adding a new subsection (h) at the end thereof to provide as
follows:
(h) Each person who
(i) was an active employee of West Jefferson Medical Center
and became an Employee on September 1, 1996;
(ii) met the eligibility requirements to become a Participant
as provided in subsection (b) of Section 10.01 on or
before the last day of the 1996 Plan Year; and
(iii) is not otherwise eligible for an allocation of the
Employer Qualified Nonelective Contribution for the 1996
Plan Year under Section 13.04;
shall receive an allocation of the Employer Qualified
Nonelective Contribution for the 1996 Plan Year, as
provided in this subsection (h) 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
5
41
<PAGE>
with the Controlled Group completed by the Participant in
the 1996 Plan Year and the denominator of which is three
hundred sixty-five (365). Such a Participant shall
receive an allocation of the Employer Qualified
Nonelective Contribution as provided in Section 13.04, but
without regard to the requirement that a Participant have
a Year of Participation.
8. Effective as of January 1, 1996, Section 9.04 of the Plan is
amended by adding a new subsection (i) at the end thereof to provide as
follows:
(i) In determining Years of Eligibility Service for an
Employee who was an employee of Medical Data Technologies,
Inc. ("Medical Data") immediately prior to
December 26, 1994, and became an Employee on
December 26, 1994, the Employee's period or periods of
employment with Medical Data prior to December 26, 1994,
that would have been taken into account under the Plan if
such period or periods of employment were service with a
member of the Controlled Group, shall be counted as Years
of Eligibility Service. Notwithstanding any other
provision of the Plan, there shall be no duplication of
Years of Eligibility Service under the Plan by reason 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 3rd day of February, 1997.
ALLTEL CORPORATION
By: /s/ John L. Comparin
Title: V.P. Human Resources
and Administration
6
42
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FIRST
QUARTER REPORT TO STOCKHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH REPORT.
</LEGEND>
<CIK> 0000065873
<NAME> ALLTEL CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 28,266
<SECURITIES> 0
<RECEIVABLES> 504,878
<ALLOWANCES> 21,376
<INVENTORY> 83,434
<CURRENT-ASSETS> 664,455
<PP&E> 5,168,188
<DEPRECIATION> 2,085,804
<TOTAL-ASSETS> 5,227,170
<CURRENT-LIABILITIES> 631,908
<BONDS> 1,698,913
6,413
9,196
<COMMON> 186,544
<OTHER-SE> 1,857,240
<TOTAL-LIABILITY-AND-EQUITY> 5,227,170
<SALES> 158,491
<TOTAL-REVENUES> 784,305
<CGS> 104,070
<TOTAL-COSTS> 603,080
<OTHER-EXPENSES> 573
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,002
<INCOME-PRETAX> 164,866
<INCOME-TAX> 63,158
<INCOME-CONTINUING> 101,708
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 101,708
<EPS-PRIMARY> .54
<EPS-DILUTED> 0
</TABLE>
