UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A
AMENDMENT NO. 2 TO ANNUAL REPORT FILED 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) 905-8000
------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
Common Stock New York and Pacific
$2.06 No Par Cumulative Convertible
Preferred Stock New York and Pacific
Securities registered pursuant to Section 12(g) of the Act:
NONE
- --------------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
Aggregate market value of voting stock held by non-affiliates as of
February 28, 1999 - $16,836,745,818
---------------
Common shares outstanding, February 28, 1999 - 281,198,260
-----------
DOCUMENTS INCORPORATED BY REFERENCE
Document Incorporated Into
- -------- -----------------
Proxy statement for the 1999 Annual Meeting
of stockholders Part III
The Exhibit Index is located on page 2 of this amendment.
<PAGE>
SIGNATURE
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its 1998 Annual Report on
Form 10-K as set forth in the pages attached hereto;
(list all such items, financial statements, exhibits
or other portions amended)
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K.
- ------- ----------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
ALLTEL CORPORATION
----------------------------------------
(Registrant)
/s/ Jeffery R. Gardner
----------------------------------------
Jeffery R. Gardner
Senior Vice President - Finance
and Treasurer
April 30, 1999
<PAGE>
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K:
3. Exhibits:
See "Exhibit Index" located on page 2 of this amendment.
1
<PAGE>
EXHIBIT INDEX
-------------
Number and Name
- ---------------
(23)(a) Consent of Arthur Andersen LLP (filed herewith).
(23)(b) Consent of Ernst & Young LLP. (Financial statements
of 360 Communications Company Retirement Savings
Plan for the year ended December 31, 1997 are not
included separately in this Form 10-K/A)
(99)(a) Form 11-K information for the ALLTEL Corporation Thrift
Plan as of December 31, 1998 and 1997 and for the year
ended December 31, 1998 (filed herewith).
(99)(b) Form 11-K information for the 360 Communications Company
Retirement Savings Plan as of December 31, 1998 and 1997
and for the year ended December 31, 1998 (filed herewith).
2
EXHIBIT 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
ALLTEL Corporation:
As independent public accountants, we hereby consent to the incorporation by
reference in the previously filed registration statements of ALLTEL Corporation
on Forms S-8 (Registration No's. 2-99523, 33-35343, 33-48476, 33-54175, 33-56291
and 33-65199) of our report dated April 16, 1999, on our audit of the financial
statements of the ALLTEL Corporation Thrift Plan as of December 31, 1998 and
1997 and for the year ended December 31, 1998 and our report dated April 16,
1999, on our audit of the 360 Retirement Savings Plan as of December 31, 1998
and 1997 and for the year ended December 31, 1998, which reports are
incorporated by reference in this Amendment No. 2 to the 1998 ALLTEL Corporation
Annual Report on Form 10-K.
/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Little Rock, Arkansas,
April 28, 1999.
3
EXHIBIT 23(b)
CONSENT OF INDEPENDENT PUBLIC AUDITORS
We consent to the incorporation by reference in the Post-Effective Amendment
No. 2 to Form S-8 Registration Statement for the ALLTEL Corporation Incentive
Stock Option Plan (No. 2-99523); Form S-8 Registration Statement for
Systematics, Inc. 1981 Incentive Stock Option Plan (No. 33-35343); Form S-8
Registration Statement for the ALLTEL Corporation 1991 Stock Option Plan
(No. 33-48476); Form S-8 Registration Statement for the ALLTEL Corporation 1994
Stock Option Plan (No. 33-54175); Form S-8 Registration Statement for the
ALLTEL Corporation Thrift Plan (No. 33-56291); and Form S-8 Registration
Statement for the ALLTEL Corporation 1994 Stock Option Plan for Employees
(No. 33-65199) of our report dated May 29, 1998 with respect to the financial
statements of the 360 Communications Company Retirement Savings Plan, included
in ALLTEL Corporation's Amendment No. 2 to Form 10-K (Form 10-K/A) for the year
ended December 31, 1998.
/s/Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois,
April 28, 1999.
4
EXHIBIT 99 (a)
FORM 11-K INFORMATION FOR THE
ALLTEL CORPORATION THRIFT PLAN
AS OF DECEMBER 31, 1998 AND 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1998
<PAGE>
REQUIRED INFORMATION
The ALLTEL Corporation Thrift Plan (the "Plan") is subject to the
Employee Retirement Income Security Act of 1974.
Item 4. In lieu of the requirements of Items 1, 2 and 3 of Form 11-K,
the following financial statements of the Plan are being filed as Exhibit 99(a)
to this Report:
1 Report of Independent Public Accountants
2. Statements of Net Assets Available for Benefits with Fund
Information as of December 31, 1998 and 1997
3. Statement of Changes in Net Assets Available for Benefits
with Fund Information for the year ended December 31, 1998
4. Notes to Financial Statements and Supplemental Schedules as
of December 31, 1998 and 1997
5. Schedule of Assets Held for Investment Purposes as of
December 31, 1998
6. Schedule of Loans or Fixed Income Obligations as of
December 31, 1998
7. Schedule of Reportable Transactions for the year ended
December 31, 1998
The Consent of Independent Public Accountants to the inclusion of the
foregoing financial statements herein is being filed as Exhibit 23(a) to this
Report.
<PAGE>
ALLTEL CORPORATION THRIFT PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
As of December 31, 1998 and 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE>
ALLTEL CORPORATION THRIFT PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
As of December 31, 1998 and 1997
Report of Independent Public Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits with Fund
Information as of December 31, 1998 and 1997 2 - 3
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the year ended December 31, 1998 4
Notes to Financial Statements and Supplemental Schedules 5 - 11
Supplemental Schedules:
Schedule I: Line 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1998 12
Schedule II: Line 27b - Schedule of Loans or Fixed Income
Obligations as of December 31, 1998 13
Schedule III: Line 27d - Schedule of Reportable Transactions
for the year ended December 31, 1998 14
<PAGE>
Report of Independent Public Accountants
To the Participants and Administrator of the
ALLTEL Corporation Thrift Plan:
We have audited the accompanying statements of net assets available for benefits
of the ALLTEL Corporation Thrift Plan (the "Plan") as of December 31, 1998 and
1997, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1998. These financial statements and the
schedules referred to below are the responsibility of ALLTEL Corporation in its
capacity as administrator of the Plan (the "Administrator"). Our responsibility
is to express an opinion on these financial statements and schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Administrator, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the year ended December 31, 1998, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. Supplemental Schedules I, II and III are
presented for purposes of additional analysis and are not a required part of the
basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's administrator. The Fund
Information in the statements of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and Fund Information have been subjected to the
auditing procedures applied in our audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/Arthur Andersen LLP
Little Rock, Arkansas,
April 16, 1999.
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
As of December 31, 1998
Fund Information (Note 2)
-----------------------------------------------------------------------------------------
Participant Directed
-----------------------------------------------------------------------------------------
BZW Barclays Global Investors, N.A.
-------------------------------------------------------------------------
ALLTEL
Corporation International S&P 500 U.S. Debt Money LifePath
Common Equity Equity Index Market 2000
Stock Fund Index Fund Index Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- -----------
ASSETS:
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Schedule I and Note 2):
ALLTEL Corporation Common Stock $48,835,291
Mutual Investment Funds $ 7,865,945 $38,212,851 $10,501,580 $1,498,674
BZW Barclays Global Investors, N.A.
Money Market Fund $37,789,343
Chase Manhattan Bank Cash Investment
Money Market Fund 669,555 165 71,861
Participant Loans
----------- ----------- ----------- ----------- ----------- -----------
Total investments 49,504,846 7,866,110 38,212,851 10,501,580 37,861,204 1,498,674
----------- ----------- ----------- ----------- ----------- -----------
Receivables:
Employer's contribution - - - - - -
Accrued interest and dividends 245,906 - - - - -
Due from (to) other funds 91,683 (15,483) 15,874 (294) (99,280) 11,980
----------- ----------- ----------- ----------- ----------- -----------
Total receivables 337,589 (15,483) 15,874 (294) (99,280) 11,980
----------- ----------- ----------- ----------- ----------- -----------
Total assets 49,842,435 7,850,627 38,228,725 10,501,286 37,761,924 1,510,654
LIABILITIES:
Due to broker 269,423 - - - - -
----------- ----------- ----------- ----------- ----------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS $49,573,012 $ 7,850,627 $38,228,725 $10,501,286 $37,761,924 $1,510,654
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of this statement.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued
As of December 31, 1998
Fund Information (Note 2)
--------------------------------------------------------------------------------------
Participant Directed
--------------------------------------------------------------------------------------
BZW Barclays Global Investors, N.A. Fidelity Investments
-------------------------------------------------------- --------------------------
LifePath LifePath LifePath LifePath Equity-
2010 2020 2030 2040 Income Magellan
Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- -----------
ASSETS:
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Schedule I and Note 2):
ALLTEL Corporation Common Stock
Mutual Investment Funds $ 4,529,259 $18,491,212 $ 4,383,859 $ 5,456,798 $58,186,801 $95,675,388
BZW Barclays Global Investors, N.A.
Money Market Fund
Chase Manhattan Bank Cash Investment
Money Market Fund
Participant Loans
----------- ----------- ----------- ----------- ----------- -----------
Total investments 4,529,259 18,491,212 4,383,859 5,456,798 58,186,801 95,675,388
----------- ----------- ----------- ----------- ----------- -----------
Receivables:
Employer's contribution - - - - - -
Accrued interest and dividends - - - - - -
Due from (to) other funds (3,072) 1,869 12 15,859 (19,416) 268
----------- ----------- ----------- ----------- ----------- -----------
Total receivables (3,072) 1,869 12 15,859 (19,416) 268
----------- ----------- ----------- ----------- ----------- -----------
Total assets 4,526,187 18,493,081 4,383,871 5,472,657 58,167,385 95,675,656
LIABILITIES:
Due to broker - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 4,526,187 $18,493,081 $ 4,383,871 $ 5,472,657 $58,167,385 $95,675,656
=========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued
As of December 31, 1998
Fund Information (Note 2)
------------------------------------------------
Participant Directed
--------------------
Participant
Loans Other Total
----------- ----------- ------------
ASSETS:
<S> <C> <C> <C>
Investments, at fair value
(Schedule I and Note 2):
ALLTEL Corporation Common Stock $ 48,835,291
Mutual Investment Funds 244,802,367
BZW Barclays Global Investors, N.A.
Money Market Fund 37,789,343
Chase Manhattan Bank Cash Investment
Money Market Fund 741,581
Participant Loans $ 4,839,385 4,839,385
----------- ----------- ------------
Total investments 4,839,385 - 337,007,967
----------- ----------- ------------
Receivables:
Employer's contribution - $11,188,514 11,188,514
Accrued interest and dividends - - 245,906
Due from (to) other funds - - -
----------- ----------- ------------
Total receivables - 11,188,514 11,434,420
----------- ----------- ------------
Total assets 4,839,385 11,188,514 348,442,387
LIABILITIES:
Due to broker - - 269,423
----------- ----------- ------------
NET ASSETS AVAILABLE
FOR BENEFITS $ 4,839,385 $11,188,514 $348,172,964
=========== =========== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
As of December 31, 1997
Fund Information (Note 2)
-----------------------------------------------------------------------------------------
Participant Directed
-----------------------------------------------------------------------------------------
BZW Barclays Global Investors, N.A.
-------------------------------------------------------------------------
ALLTEL
Corporation International S&P 500 U.S. Debt Money LifePath
Common Equity Equity Index Market 2000
Stock Fund Index Fund Index Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- -----------
ASSETS:
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Schedule I and Note 2):
ALLTEL Corporation Common Stock $28,079,988
Mutual Investment Funds $ 5,865,478 $27,507,451 $ 9,333,392 $1,460,952
Bankers Trust Pyramid Open-End
Government Investment Contract Fund
BZW Barclays Global Investors, N.A.
Money Market Fund $31,167,627
Nations Cash Reserves Capital Class
Money Market Fund 359,575 3,965
Participant Loans
----------- ----------- ----------- ----------- ----------- -----------
Total investments 28,439,563 5,865,478 27,507,451 9,333,392 31,171,592 1,460,952
----------- ----------- ----------- ----------- ----------- -----------
Receivables:
Employer's contribution - - - - - -
Accrued interest and dividends 201,115 - - - 2,190 -
----------- ----------- ----------- ----------- ----------- -----------
Total receivables 201,115 - - - 2,190 -
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $28,640,678 $ 5,865,478 $27,507,451 $ 9,333,392 $31,173,782 $1,460,952
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of this statement.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued
As of December 31, 1997
Fund Information (Note 2)
--------------------------------------------------------------------------------------
Participant Directed
--------------------------------------------------------------------------------------
BZW Barclays Global Investors, N.A. Fidelity Investments
-------------------------------------------------------- --------------------------
LifePath LifePath LifePath LifePath Equity-
2010 2020 2030 2040 Income Magellan
Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- -----------
ASSETS:
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Schedule I and Note 2):
ALLTEL Corporation Common Stock
Mutual Investment Funds $ 2,931,006 $16,504,765 $ 2,601,154 $ 3,662,688 $52,373,883 $68,801,357
Bankers Trust Pyramid Open-End
Government Investment Contract Fund
BZW Barclays Global Investors, N.A.
Money Market Fund
Nations Cash Reserves Capital Class
Money Market Fund
Participant Loans
----------- ----------- ----------- ----------- ----------- -----------
Total investments 2,931,006 16,504,765 2,601,154 3,662,688 52,373,883 68,801,357
----------- ----------- ----------- ----------- ----------- -----------
Receivables:
Employer's contribution - - - - - -
Accrued interest and dividends - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Total receivables - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS $ 2,931,006 $16,504,765 $ 2,601,154 $ 3,662,688 $52,373,883 $68,801,357
=========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued
As of December 31, 1997
Fund Information (Note 2)
------------------------------------------------------------------------------
Non-Participant
Participant Directed Directed
---------------------------- -----------
Government
Investment Money
Contract Participant Market
Fund Loans Other Fund Total
----------- ----------- ----------- ----------- ------------
ASSETS:
<S> <C> <C> <C> <C> <C>
Investments, at fair value
(Schedule I and Note 2):
ALLTEL Corporation Common Stock $ 28,079,988
Mutual Investment Funds 191,042,126
Bankers Trust Pyramid Open-End
Government Investment Contract Fund $ 892,570 892,570
BZW Barclays Global Investors, N.A.
Money Market Fund 31,167,627
Nations Cash Reserves Capital Class
Money Market Fund 957,631 $ 408,903 1,730,074
Participant Loans $ 4,300,465 4,300,465
----------- ----------- ----------- ----------- ------------
Total investments 1,850,201 4,300,465 - 408,903 257,212,850
----------- ----------- ----------- ----------- ------------
Receivables:
Employer's contribution - - $ 9,663,516 - 9,663,516
Accrued interest and dividends 4,604 - - - 207,909
----------- ----------- ----------- ----------- ------------
Total receivables 4,604 - $ 9,663,516 - 9,871,425
----------- ----------- ----------- ----------- ------------
NET ASSETS AVAILABLE
FOR BENEFITS $ 1,854,805 $ 4,300,465 $ 9,663,516 $ 408,903 $267,084,275
=========== =========== =========== =========== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
For the year ended December 31, 1998
Fund Information (Note 2)
------------------------------------------------------------------------------------------
Participant Directed
------------------------------------------------------------------------------------------
BZW Barclays Global Investors, N.A.
--------------------------------------------------------------------------
ALLTEL
Corporation International S&P 500 U.S. Debt Money LifePath
Common Equity Equity Index Market 2000
Stock Fund Index Fund Index Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Dividend income $ 883,006 $ - $ - $ - $ - $ -
Interest income 36,547 165 - - 1,872,852 -
Net appreciation in fair
value of investments 14,672,764 1,186,840 8,261,223 812,980 - 135,926
----------- ----------- ----------- ----------- ----------- ----------
Total investment income 15,592,317 1,187,005 8,261,223 812,980 1,872,852 135,926
----------- ----------- ----------- ----------- ----------- ----------
Contributions:
Employer - - - - - -
Employee 2,397,473 1,313,019 3,883,348 942,974 2,180,065 167,621
Employee rollovers 344,632 88,936 360,752 38,780 264,052 3,256
----------- ----------- ----------- ----------- ----------- -----------
Total contributions 2,742,105 1,401,955 4,244,100 981,754 2,444,117 170,877
----------- ----------- ----------- ----------- ----------- -----------
Interfund transfers, net 4,285,506 (18,917) 909,801 563,731 7,196,935 187,539
Transfers from other plans 249,886 50,591 80,107 30,012 826,964 2,601
----------- ----------- ----------- ----------- ----------- -----------
Total additions 22,869,814 2,620,634 13,495,231 2,388,477 12,340,868 496,943
----------- ----------- ----------- ----------- ----------- -----------
DEDUCTIONS:
Benefit payments and withdrawals 1,937,480 635,485 2,773,957 1,220,583 5,752,726 447,241
----------- ----------- ----------- ----------- ----------- -----------
Total deductions 1,937,480 635,485 2,773,957 1,220,583 5,752,726 447,241
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) 20,932,334 1,985,149 10,721,274 1,167,894 6,588,142 49,702
NET ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 28,640,678 5,865,478 27,507,451 9,333,392 31,173,782 1,460,952
----------- ----------- ----------- ----------- ----------- -----------
End of year $49,573,012 $ 7,850,627 $38,228,725 $10,501,286 $37,761,924 $ 1,510,654
=========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of this statement.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued
For the year ended December 31, 1998
Fund Information (Note 2)
------------------------------------------------------------------------------------------
Participant Directed
------------------------------------------------------------------------------------------
BZW Barclays Global Investors, N.A. Fidelity Investments
----------------------------------------------------------- --------------------------
LifePath LifePath LifePath LifePath Equity-
2010 2020 2030 2040 Income Magellan
Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Dividend income $ - $ - $ - $ - $ 3,316,425 $ 4,415,119
Interest income - - - - 42 -
Net appreciation in fair
value of investments 496,397 2,962,554 711,344 1,004,299 2,988,612 19,290,984
----------- ----------- ----------- ----------- ----------- -----------
Total investment income 496,397 2,962,554 711,344 1,004,299 6,305,079 23,706,103
----------- ----------- ----------- ----------- ----------- -----------
Contributions:
Employer - - - - - -
Employee 540,619 1,365,153 718,015 1,016,819 6,155,577 7,971,142
Employee rollovers 74,364 75,469 181,379 48,294 524,742 759,150
----------- ----------- ----------- ----------- ----------- -----------
Total contributions 614,983 1,440,622 899,394 1,065,113 6,680,319 8,730,292
----------- ----------- ----------- ----------- ----------- -----------
Interfund transfers, net 625,810 (914,664) 635,872 272,482 (1,950,543) (306,211)
Transfers from other plans 62,683 55,954 68,847 19,584 128,874 262,720
----------- ----------- ----------- ----------- ----------- -----------
Total additions 1,799,873 3,544,466 2,315,457 2,361,478 11,163,729 32,392,904
----------- ----------- ----------- ----------- ----------- -----------
DEDUCTIONS:
Benefit payments and withdrawals 204,692 1,556,150 532,740 551,509 5,370,227 5,518,605
----------- ----------- ----------- ----------- ----------- -----------
Total deductions 204,692 1,556,150 532,740 551,509 5,370,227 5,518,605
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) 1,595,181 1,988,316 1,782,717 1,809,969 5,793,502 26,874,299
NET ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 2,931,006 16,504,765 2,601,154 3,662,688 52,373,883 68,801,357
----------- ----------- ----------- ----------- ----------- -----------
End of year $ 4,526,187 $18,493,081 $ 4,383,871 $ 5,472,657 $58,167,385 $95,675,656
=========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLTEL CORPORATION THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION - Continued
For the year ended December 31, 1998
Fund Information (Note 2)
---------------------------------------------------------------------------
Non-Participant
Participant Directed Directed
------------------------------------------- -----------
Government
Investment Money
Contract Participant Market
Fund Loans Other Fund Total
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Dividend income $ - $ - $ - $ - $ 8,614,550
Interest income 3,594 347,293 - - 2,260,493
Net appreciation in fair
value of investments - - - - 52,523,923
----------- ----------- ----------- ----------- ------------
Total investment income 3,594 347,293 - - 63,398,966
----------- ----------- ----------- ----------- ------------
Contributions:
Employer - - 11,188,514 - 11,188,514
Employee - - - - 28,651,825
Employee rollovers - - - - 2,763,806
----------- ----------- ----------- ----------- ------------
Total contributions - - 11,188,514 - 42,604,145
----------- ----------- ----------- ----------- ------------
Interfund transfers, net (1,853,563) 438,641 (9,663,516) (408,903) -
Transfers from other plans - - - - 1,838,823
----------- ----------- ----------- ----------- ------------
Total additions (1,853,563) 785,934 1,524,998 (408,903) 107,841,934
----------- ----------- ----------- ----------- ------------
DEDUCTIONS:
Benefit payments and withdrawals 4,836 247,014 - - 26,753,245
----------- ----------- ----------- ----------- ------------
Total deductions 4,836 247,014 - - 26,753,245
----------- ----------- ----------- ----------- ------------
Net increase (decrease) (1,854,805) 538,920 1,524,998 (408,903) 81,088,689
NET ASSETS AVAILABLE
FOR BENEFITS:
Beginning of year 1,854,805 4,300,465 9,663,516 408,903 267,084,275
----------- ----------- ----------- ----------- ------------
End of year $ - $ 4,839,385 $11,188,514 $ - $348,172,964
=========== =========== =========== =========== ============
</TABLE>
<PAGE>
ALLTEL CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
DECEMBER 31, 1998 AND 1997
1. PLAN DESCRIPTION
The following is a brief description of the ALLTEL Corporation Thrift
Plan (the "Plan") and the administration thereof and is provided for
general information purposes only. Participants should refer to the
plan document or the summary plan description for a more complete
description of the Plan's provisions.
General
The Plan is a defined contribution employee benefit plan designed to
assist employees in planning for retirement. The Plan covers
substantially all nonbargaining employees of ALLTEL Corporation and its
subsidiaries ("ALLTEL" or the "Company"). Employees who are (1) covered
by a collective bargaining agreement, subject to certain limitations,
(2) leased by the Company or (3) nonresident aliens with no U.S. income
are not eligible to participate in the Plan.
Administration
The Plan is administered by ALLTEL Corporation (the "Administrator").
Chase Manhattan Bank ("Chase" or the "Trustee") is the trustee of the
Plan.
Plan Contributions
Each year, participants may contribute up to 10 percent (increased to
14 percent for payroll periods beginning after December 19, 1998) of
their pretax annual compensation, as defined in the Plan document.
Participant contributions are subject to certain dollar limitations
established by the Internal Revenue Service ( the "IRS"), which were
$10,000 for 1998 and $9,500 for 1997. Employees considered "highly
compensated" as defined in the Plan document are currently limited to
contributing up to 7 percent of their pretax annual compensation.
Following the end of the Plan year, the Company will contribute 1
percent of eligible Plan compensation to the account of every eligible
participant. A participant will receive this nonelective employer
contribution regardless of whether the participant has elected to defer
any of his/her own compensation to the Plan. To qualify for the
nonelective employer contribution, a participant must (1) have worked
at least 1,000 hours during the year for which the contribution is
being made, (2) have completed one year of service (12 consecutive
months during which at least 1,000 hours are worked) and (3) be
employed by the Company on the last business day of the year. The
nonelective employer contribution will also be made to the account of a
participant who dies, becomes disabled or qualifies for normal or early
retirement during the year.
In addition to the 1 percent nonelective employer contribution,
employees of ALLTEL Information Services, Inc. (a wholly-owned
subsidiary of ALLTEL) and its subsidiaries may receive a matching
employer contribution. The amount of the match is determined each year
by the Company. In 1998, the Company provided a basic employer matching
contribution equal to 25 percent of the first 6 percent of eligible
compensation that a participant contributed to the Plan, plus an
additional matching contribution of 12 percent on salary deferrals
greater than 3 percent but less than 6 percent of eligible plan
compensation. All employer contributions are funded annually following
the Plan's year-end.
5
<PAGE>
ALLTEL CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES, Continued
----
The Plan as amended and restated allows for any eligible employee who
was a participant in a plan qualified under Section 401 of the Internal
Revenue Code ("IRC") and who receives a cash distribution from such
plan to make a rollover contribution to the Plan if he/she is entitled
under Section 402 (c)(1) or Section 408 (d)(3)(A) of the IRC to
rollover such distribution to another qualified retirement plan.
Participant Accounts
Individual accounts are maintained for each of the Plan's participants
to reflect the participant's contributions and related employer
nonelective and matching contributions, if applicable, as well as the
participant's share of the Plan's earnings and any related
administrative expenses. Allocations of the Plan's earnings and
administrative expenses, if applicable, are based upon participant
earnings or account balances. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
vested account.
Vesting and Benefits
Participants are fully vested in their employee contributions,
nonelective and matching employer contributions and the accumulated
earnings thereon. Participants may elect upon termination of employment
to defer payment of their account balance if it exceeds $3,500, ($5,000
after December 31, 1998). The Plan's obligation for the undistributed
net assets of former employees approximated $56,941,000 and $49,321,000
as of December 31, 1998 and 1997, respectively. As of December 31, 1998
and 1997, the Plan had 15,086 and 15,210 participants with account
balances, respectively.
Benefit Payments
Participants or their beneficiaries, as applicable, are entitled to
receive the vested balance of their Plan account when they retire at
age 65 or later, if they become permanently disabled, upon death or
upon separation from service with the Company. The Plan permits early
retirements between ages 55 and 65 provided that required service
levels have been met. If a participant's account balance exceeds
$3,500, ($5,000 after December 31, 1998), participants may elect to
receive the distributions in a lump-sum payment, in installment
payments or a combination of both. If a participant's account balance
is equal to or less than $3,500, ($5,000 after December 31, 1998), the
account will be distributed in a lump-sum payment. Additionally,
participants may withdraw funds, with the approval of the
Administrator, from their Plan account for "hardship" reasons as
defined by the IRS.
Plan Termination
While it has not expressed any intention to do so, the Administrator
has the right to terminate the Plan. In the event that the Plan is
terminated, the interest of all affected participants shall be fully
vested and nonforfeitable as of the date of the Plan's termination, and
each participant shall be entitled to receive the entire amount of his
account balance in cash or in assets of the Plan as the Trustee shall
determine. Participants in the Plan are entitled to certain rights and
protection under the Employee Retirement Income Security Act of 1974
("ERISA").
6
<PAGE>
ALLTEL CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES, Continued
----
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Presentation
The accompanying financial statements have been prepared on the accrual
basis of accounting. The financial statements and supplementary
Schedules I, II and III have been prepared to satisfy the reporting and
disclosure requirements of ERISA. The preparation of financial
statements in conformity with generally accepted accounting principles
requires the Administrator to make estimates and assumptions that
affect the amount of assets, liabilities and disclosures of certain
contingent assets and liabilities at the date of the financial
statements and the reported amount of income and expenses during the
reporting period. The estimates and assumptions used in the
accompanying financial statements are based upon the Administrator's
evaluation of the relevant facts and circumstances as of the date of
the financial statements. Actual results may differ from those
estimates and assumptions.
Investments
During 1998, participants directed their contributions among the
following investment options and were allowed to change their
investment elections subject to certain restrictions imposed by the
funds and the Plan. Among the Plan's investment options are investment
funds managed by BZW Barclays Global Investors, N.A. ("Barclays") and
by Fidelity Investments ("Fidelity"). A brief description of each
investment option available to plan participants during 1998 is
provided below:
ALLTEL Corporation Common Stock Fund - Contributions to this fund
are primarily used to purchase shares of ALLTEL common stock in
the open market. This fund also holds up to 5 percent of its
invested funds in cash or cash equivalents. The percentage
invested in cash or cash equivalents is determined by the Trustee.
A brief description of the nine investment funds managed by Barclays is
as follows:
International Equity Index Fund - This fund seeks long-term
capital appreciation through investment in substantially the same
common stocks in substantially the same percentages as those that
comprise the Morgan Stanley Capital International Europe,
Australia and Far East "Free" Index (the "EAFE Index"), an index
designed to measure the aggregate performance of the stock markets
of Europe, Australia, New Zealand and the Far East.
S&P 500 Equity Index Fund - This fund seeks long-term capital
appreciation through investment in substantially the same common
stocks and in substantially the same percentages as those that
comprise the S&P 500 Index.
U.S. Debt Index Fund - This fund seeks long-term capital
appreciation through investment in obligations issued or
guaranteed by the U.S. Government or its agencies, including
mortgage-backed securities and investment grade obligations issued
by domestic and certain foreign corporations with a remaining
maturity exceeding one year, including asset-backed securities.
This fund attempts to duplicate the total return of the Lehman
Brothers Aggregate Bond Index, an index designed to measure the
aggregate performance of the U.S. market for investment-grade debt
securities.
7
<PAGE>
ALLTEL CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES, Continued
----
Money Market Fund - This fund seeks maximum current income while
preserving capital through investment in money market instruments
including U.S. Government and agency obligations, bank obligations
including certificates of deposit, bankers' acceptances and time
deposits, and short-term commercial debt instruments such as
commercial paper, unsecured loan participations or variable rate
demand notes and repurchase agreements.
LifePath Funds - These funds consist of the LifePath 2000 Fund,
LifePath 2010 Fund, LifePath 2020 Fund, LifePath 2030 Fund and the
LifePath 2040 Fund. Each fund name contains a target investment
date and seeks to provide a balance of short-term stability and
long-term appreciation most appropriate for its target investment
date. Each fund invests in various classes of domestic and foreign
equity and debt securities and money market instruments.
Generally, the funds with longer time horizons invest more heavily
in equity securities, while funds with shorter time horizons
invest in debt securities and money market instruments.
Following is a brief description of the two investment funds managed by
Fidelity:
Equity-Income Fund - This fund seeks reasonable income by
investing in income-producing equity securities. The fund invests
in common and preferred stocks and debt securities whose yields
exceed the composite yield of the Standard & Poor's 500 Composite
Stock Price Index (the "S&P 500 Index"), have rising or
above-average dividends or have potential for future dividend
growth.
Magellan Fund - This fund seeks long-term capital appreciation
through investment in common stocks and convertible securities of
domestic, foreign and multinational companies.
During 1998, two investment funds, the Government Investment Contract
Fund and a Money Market Fund managed by NationsBank of Texas, N.A. were
liquidated by the Plan. Prior to liquidation, no additional
contributions or investments were made to either of these funds. Upon
liquidation, participants could elect to transfer their account
balances invested in these funds to one of the other investment
options. If no election was made by a participant, then his/her account
balance was transferred to the Barclays Money Market Fund. A brief
description of the two liquidated funds is as follows:
Government Investment Contract Fund - The assets of this fund
consisted of cash and investments made in the Bankers Trust
Pyramid Open-End Government Investment Contract Fund, a
commingled common trust fund.
Money Market Fund - The assets of this fund were invested in money
market instruments.
Any excess cash in the above investment funds is automatically invested
daily by the Trustee into the Chase Cash Investment Money Market Fund,
a short-term investment fund. Assets consist mainly of corporate demand
notes, commercial paper and short-term U.S. Government securities. The
carrying value approximates fair value due to the short-term maturity
of these investments.
8
<PAGE>
ALLTEL CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES, Continued
----
Investments are stated at their fair value as determined by the
Trustee. Securities traded on a national exchange are valued at their
quoted market price on the last business day of the year. Investment
contracts are reported at contract value. The net appreciation in fair
value of investments in the accompanying statement of changes in net
assets available for benefits with fund information reflects the net
difference between the market value and the cost of investments bought
during the year and the net difference between the market value and the
beginning of the year market value of assets held, sold or distributed.
All investments that represent 5 percent or more of the Plan's total
net assets as of December 31, 1998 and 1997 are presented separately in
the accompanying statements of net assets available for benefits.
Plan Expenses
As outlined in the Plan document, expenses related to the Plan's
operation are paid from Plan assets unless ALLTEL elects to pay these
expenses. ALLTEL paid all administrative expenses related to the Plan
in 1998.
3. PARTICIPANT LOANS
Participants can borrow from their account balances amounts not to
exceed 50 percent of their vested balance, up to a maximum loan amount
of $50,000. Such loans are allowed only for specific purposes and must
be repaid through payroll deductions within five years, unless used to
purchase a principal residence. Principal and interest is paid ratably
through payroll deductions over the term of the loan. If a
participant's employment terminates with an outstanding loan, the
entire loan must be repaid in full within the time prescribed by the
IRS. If the loan is not repaid on time, the unpaid portion will be
considered taxable income to the individual. Loans are secured by the
balance in the participant's account and bear interest at rates
determined by the Administrator upon execution of the loan. Interest
rates on the loans outstanding at December 31, 1998 range from 6
percent to 11 percent. Loan transactions are recorded as a transfer to
(from) the investment fund from (to) the Participant Loan fund.
4. EMPLOYER CONTRIBUTIONS
Contributions in the amount of $11,188,514 due to the Plan from the
Company had not been funded or allocated among the Plan's funds as of
December 31, 1998. The employer's contribution receivable was funded by
the Company and allocated among the Plan's investment funds, according
to participant elections, during April 1999.
9
<PAGE>
ALLTEL CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES, Continued
----
5. PLAN AMENDMENTS
During 1997, the following amendments to the Plan agreement were
adopted:
6. Provided for service crediting under the Plan to certain employees
of ALLTEL Information Services, Inc. or its subsidiaries who
became eligible participants of the Plan pursuant to facilities
management agreements entered into during 1996.
7. Provided for service crediting under the Plan to certain employees
of ALLTEL Information Services, Inc. or its subsidiaries who
became eligible participants of the Plan pursuant to facilities
management agreements entered into during 1997.
During 1998, the following amendments to the Plan agreement were
adopted:
8. Provided for service crediting under the Plan to certain employees
of ALLTEL Information Services, Inc. or its subsidiaries who
became eligible participants of the Plan pursuant to facilities
management agreements entered into during 1997. Provided for
service crediting under the Plan to certain employees of Frontier
Cellular of Alabama, Inc. ("Frontier") who became eligible
participants of the Plan as a result of ALLTEL's acquisition of
Frontier during 1997.
9. Provided for the transfer of assets during 1998 from the WSFS
Financial Corporation 401(k) Savings and Retirement Plan into the
Plan. The assets are attributable to former employees of WSFS
Financial Corporation who, pursuant to an outsourcing agreement,
became employees of ALLTEL Information Services, Inc. and are
eligible participants of the Plan.
10. Increased the maximum employee salary deferral contribution amount
from 10 percent of eligible plan compensation to 14 percent,
effective for payroll periods beginning after December 19, 1998.
11. Increased the limits at which benefits can be unilaterally
distributed to participants of the Plan from $3,500 to $5,000,
effective for distributions settled after December 31, 1998.
Provided that members of certain bargaining units that were
decertified in 1998 and became participants of the Plan would be
eligible to receive the 1998 employer contribution. Provided for
service crediting under the Plan to certain employees of ALLTEL
Information Services, Inc. or its subsidiaries who became eligible
participants of the Plan pursuant to facilities management
agreements entered into during 1998. Provided for service
crediting under the Plan to former employees of 360 Communications
Company ("360") who terminated service with 360 prior to its
merger with ALLTEL and were hired by the Company.
10
<PAGE>
ALLTEL CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES, Continued
----
6. TAX STATUS
The Plan has received a favorable determination letter from the IRS
dated January 10, 1997, which states that the Plan, as restated
January 1, 1994 and as amended by Amendment Nos. 1 through 4, is
"qualified" for the purposes of Section 401(a) of the IRC. Amendment
Nos. 5 through 11 have not yet been filed with the IRS. The
Administrator is of the opinion that the Plan, as amended, is designed
and operating in accordance with applicable IRS requirements, and
therefore, believes the Plan is qualified and is tax-exempt as of the
financial statement date. Employer contributions and income of the Plan
are not taxable to the participants until withdrawals or distributions
are made.
7. RECONCILIATION TO FORM 5500
As of December 31, 1998 and 1997, the Plan had pending distributions to
participants who elected to withdraw from the Plan of $296,842 and
$150,699, respectively. These amounts are recorded as a liability in
the Plan's Form 5500; however, these amounts are not recorded as a
liability in the accompanying statements of net assets available for
benefits in accordance with generally accepted accounting principles.
The following table reconciles the financial statements to the Plan's
Form 5500 as filed by the Company for the plan year ended December 31,
1998:
<TABLE>
<CAPTION>
Benefits Distributions Net Assets Available for Benefits
Payable to Participants 1998 1997
-------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Per financial statements $ - $26,753,245 $348,172,964 $267,084,275
Accrued benefits payable 296,842 296,842 (296,842) (150,699)
Reversal of prior year
benefit payments accrual - (150,699) - -
-------- ----------- ------------ ------------
Per Form 5500 $296,842 $26,899,388 $347,876,122 $266,933,576
======== =========== ============ ============
</TABLE>
11
<PAGE>
<TABLE>
Schedule I
ALLTEL CORPORATION THRIFT PLAN
Line 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
As of December 31, 1998
<CAPTION>
Identity of Issuer, Borrower, Number of
Lessor or Similar Party Units/Shares Historical Cost Fair Value
- ----------------------------- ------------ --------------- --------------
<S> <C> <C> <C>
Mutual Investment Funds Managed by
BZW Barclays Global Investors, N.A.:
International Equity Index Fund 515,935 $ 6,800,248 $ 7,865,945
S&P 500 Equity Index Fund 1,957,826 25,285,535 38,212,851
U.S. Debt Index Fund 744,687 9,327,777 10,501,580
LifePath 2000 Fund 117,774 1,362,644 1,498,674
LifePath 2010 Fund 318,760 3,799,384 4,529,259
LifePath 2020 Fund 1,197,928 12,915,227 18,491,212
LifePath 2030 Fund 266,366 3,361,514 4,383,859
LifePath 2040 Fund 315,750 4,147,781 5,456,798
------------ ------------
67,000,110 90,940,178
------------ ------------
Mutual Investment Funds Managed by
Fidelity Investments:
Equity-Income Fund 1,047,467 45,184,895 58,186,801
Magellan Fund 791,884 66,497,559 95,675,388
------------ ------------
111,682,454 153,862,189
------------ ------------
Total Mutual Investment Funds 178,682,564 244,802,367
------------ ------------
Money Market Investment Funds:
BZW Barclays Global Investors, N.A.
Money Market Fund 37,789,343 37,789,343 37,789,343
* Chase Manhattan Bank Cash Investment
Money Market Fund 741,581 741,581 741,581
------------ ------------
Total Money Market Funds 38,530,924 38,530,924
------------ ------------
Other Investments:
* ALLTEL Corporation Common Stock 816,473 23,388,792 48,835,291
* Participants Loans with interest rates
ranging from 6.00 percent to 11.00 percent - 4,839,385 4,839,385
------------ ------------
Total Investments $245,441,665 $337,007,967
============ ============
* Indicates a party in interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
12
<PAGE>
<TABLE>
Schedule II
ALLTEL CORPORATION THRIFT PLAN
Line 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
As of December 31, 1998
<CAPTION>
Detailed description of loan including date of
Original Amount Received Unpaid making and maturity, interest rate, the type and
Identity and Amount During Reporting Year Balance value of collateral, any renegotiation of the loan Amount Overdue
Address of Obligor of Loan Principal Interest at Year-End and terms of renegotiation and other material items Principal Interest
- ------------------ ------- --------- -------- ----------- --------------------------------------------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
*Various $356,270 $28,914 $7,487 $260,514 Loans issued September 20, 1990 through $78,033 $9,020
Participants September 15, 1998; loan terms of 12 to 240
months with interest rates of 7.0 percent to
10.46 percent. Loans are collateralized by
value of participants' account balance. Loans
will be defaulted and deducted from future
amounts distributed to participants. Loan defaults
will be reported as taxable income to the
participants.
* Indicates parties in interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
13
<PAGE>
<TABLE>
Schedule III
ALLTEL CORPORATION THRIFT PLAN
Line 27d - SCHEDULE OF REPORTABLE TRANSACTIONS (a)
For the year ended December 31, 1998
<CAPTION>
Number of Purchase Number of Selling Net Gain/
Identity of Party Involved Description of Asset Purchases Price Sales Price Cost (Loss)
- -------------------------- -------------------- --------- ----------- --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
*ALLTEL Corporation ALLTEL Corporation
Common Stock 81 $10,570,726 34 $ 4,488,186 $ 4,114,478 $ 373,708
BZW Barclays Global S&P 500 Equity
Investors, N.A. Index Fund 131 10,946,547 110 8,520,371 7,632,947 887,424
BZW Barclays Global
Investors, N.A. Money Market Fund 134 23,245,507 121 16,623,791 16,623,791 --
*Chase Manhattan Bank Chase Manhattan Bank
Cash Investment
Money Market Fund 198 61,639,280 167 60,898,582 60,898,582 --
Fidelity Investments Equity-Income Fund 105 14,561,813 140 11,737,506 11,471,102 266,404
Fidelity Investments Magellan Fund 116 21,237,259 128 13,654,213 12,534,899 1,119,314
* Indicates a party in interest.
(a) Represents a transaction or a series of transactions in excess of 5 percent of the fair value of plan assets at the
beginning of the year.
The accompanying notes are an integral part of this schedule.
</TABLE>
14
EXHIBIT 99 (b)
FORM 11-K INFORMATION FOR THE
360 COMMUNICATIONS COMPANY RETIREMENT SAVINGS PLAN
AS OF DECEMBER 31, 1998 AND 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1998
<PAGE>
REQUIRED INFORMATION
The 360 Communications Company Retirement Savings Plan (the "Plan")
is subject to the Employee Retirement Income Security Act of 1974.
Item 4. In lieu of the requirements of Items 1, 2 and 3 of Form 11-K,
the following financial statements of the Plan are being filed as Exhibit 99(b)
to this Report:
1. Reports of Independent Public Accountants
2. Statements of Net Assets Available for Benefits with Fund
Information as of December 31, 1998 and 1997
3. Statement of Changes in Net Assets Available for Benefits with
Fund Information for the year ended December 31, 1998
4. Notes to Financial Statements and Supplemental Schedules as
of December 31, 1998 and 1997
5. Schedule of Assets Held for Investment Purposes as of
December 31, 1998
6. Schedule of Reportable Transactions for the year ended
December 31, 1998
The Consents of Independent Public Accountants to the inclusion of the
foregoing financial statements herein are being filed as Exhibit 23(a) and
Exhibit 23(b) to this Report.
<PAGE>
360 COMMUNICATIONS COMPANY
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
As of December 31, 1998 and 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE>
360 COMMUNICATIONS COMPANY
RETIREMENT SAVINGS PLAN
Financial Statements and Supplemental Schedules
As of December 31, 1998 and 1997
Contents
Reports of Independent Public Accountants.................................1 - 2
Financial Statements:
Statements of Net Assets Available for Benefits With Fund Information
As of December 31, 1998 and 1997....................................3 - 4
Statement of Changes in Net Assets Available for Benefits With Fund
Information for the year ended December 31, 1998....................5
Notes to Financial Statements and Supplemental Schedules................6 - 10
Supplemental Schedules:
Schedule I Line 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1998.............................................11
Schedule II Line 27b - Schedule of Loans or Fixed Income Obligations
as of December 31, 1998.............................................12
Schedule III Line 27d - Schedule of Reportable Transactions for the
year ended December 31, 1998........................................13
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Participants and Administrative Committee of the
360 Communications Company Retirement Savings Plan:
We have audited the accompanying statement of net assets available for benefits
with fund information of the 360 Communications Company Retirement Savings Plan
(the "Plan") as of December 31, 1998, and the related statement of changes in
net assets available for benefits with fund information for the year then ended.
The financial statements of the Plan as of December 31, 1997, were audited by
other auditors whose report dated May 29, 1998, expressed an unqualified opinion
on those statements. These financial statements and the schedules referred to
below are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits with fund
information of the Plan as of December 31, 1998, and the changes in net assets
available for benefits with fund information for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes, loans or fixed income obligations, and reportable
transactions are presented for the purpose of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The Fund Information in the statement of net assets available for
benefits with fund information and the statement of changes in net assets
available for benefits with fund information is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and Fund Information have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/Arthur Andersen LLP
Little Rock, Arkansas,
April 16, 1999.
1
<PAGE>
Report of Independent Auditors
The Administrative Committee
360 Communications Company
We have audited the accompanying statement of net assets available for benefits
of the 360 Communications Company Retirement Savings Plan as of December 31,
1997. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1997, in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Fund Information in the statement of
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits for each
fund. The Fund Information has been subjected to the auditing procedures applied
in our audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois
May 29, 1998
2
<PAGE>
360 Communications Company Retirement Savings Plan
Statement of Net Assets Available For Benefits With Fund Information
As of December 31, 1998
(In thousands)
ALLTEL PIMCO
Corporation Total Return
Common Investment
Total Stock Fund(1) Fund
------ ------------- ------------
Assets:
Cash $ 851 $ 851
Receivables:
Due from broker 471 471
Income 132 132
------- ------- ------
Total receivables 603 603
------- ------- ------
Investments, at
fair value:
ALLTEL Corporation
common stock 25,420 25,420
Mutual funds 68,805 $4,192
Participant loans 4,217
------- ------- ------
Total investments 98,442 25,420 4,192
------- ------- ------
Total assets 99,896 26,874 4,192
------- ------- ------
Liabilities:
Due to broker 205 205
Accrued expenses 9 9
------- ------- ------
------- ------- ------
Total liabilities 214 214
------- ------- ------
Net Assets Available
for Benefits$ $99,682 $26,660 $4,192
======= ======= ======
(1) Previously 360 Communications Company common stock. See Note 1 to the
Financial Statements and Supplemental Schedules for information related
to the merger.
The accompanying notes are an integral part of this statement.
3
<PAGE>
<TABLE>
<CAPTION>
360 Communications Company Retirement Savings Plan
Statement of Net Assets Available For Benefits With Fund Information - continued
As of December 31, 1998
(In thousands)
Fidelity Investments
-----------------------------------------------------------------------------------------------
Equity Over the Managed
Income Magellan Counter Overseas Income Freedom Freedom Freedom Freedom Freedom Participant
Fund Fund Fund Fund Fund Income 2000 2010 2020 2030 Loans
------- -------- -------- -------- ------- ------- ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash
Receivables:
Due from broker
Income
------- ------- ------ ------ ------- --- ---- ---- ---- ---- ------
Total receivables
------- ------- ------ ------ ------- --- ---- ---- ---- ---- ------
Investments, at
fair value:
ALLTEL Corporation
common stock
Mutual funds $17,666 $20,419 $6,773 $3,597 $13,557 $26 $243 $865 $782 $685
Participant loans $4,217
------- ------- ------ ------ ------- --- ---- ---- ---- ---- ------
Total investments 17,666 20,419 6,773 3,597 13,557 26 243 865 782 685 4,217
------- ------- ------ ------ ------- --- ---- ---- ---- ---- ------
Total assets 17,666 20,419 6,773 3,597 13,557 26 243 865 782 685 4,217
------- ------- ------ ------ ------- --- ---- ---- ---- ---- ------
Liabilities:
Due to broker
Accrued expenses
------- ------- ------ ------ ------- --- ---- ---- ---- ---- ------
Total liabilities
------- ------- ------ ------ ------- --- ---- ---- ---- ---- ------
Net Assets Available
for Benefits $17,666 $20,419 $6,773 $3,597 $13,557 $26 $243 $865 $782 $685 $4,217
======= ======= ====== ====== ======= === ==== ==== ==== ==== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
360 Communications Company Retirement Savings Plan
Statement of Net Assets Available For Benefits With Fund Information
As of December 31, 1997
(In thousands)
Fidelity Investments
-----------------------------------------------
360 Sprint Total
Communications Corporation Return Equity Over the Managed
Common Common Investment Income Magellan Counter Overseas Income Participant
Total Stock Fund Stock Fund Fund Fund Fund Fund Fund Fund Loans
------- ------------- ---------- -------- -------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash $ 612 $ 324 $ 288
Investments, at
fair value:
360 Communications
Company common
stock 11,316 11,316
Sprint Corporation
common stock 10,001 10,001
Mutual funds 42,073 $2,402 $14,019 $11,025 $3,515 $2,608 $8,504
Participant loans 2,598 $2,598
------- ------- -------- ------ ------- ------- ------ ------ ------ ------
Total investments 65,988 11,316 10,001 2,402 14,019 11,025 3,515 2,608 8,504 2,598
Dividend income
receivable 3 2 1
------- ------- ------- ------ ------- ------- ------ ------ ------ ------
Total assets 66,603 11,642 10,290 2,402 14,019 11,025 3,515 2,608 8,504 2,598
------- ------- ------- ------ ------- ------- ------ ------ ------ ------
Liabilities:
Accrued expenses 20 20
------- ------- ------- ------ ------- ------- ------ ------ ------ ------
Net Assets Available
for Benefits $66,583 $11,622 $10,290 $2,402 $14,019 $11,025 $3,515 $2,608 $8,504 $2,598
======= ======= ======= ====== ======= ======= ====== ====== ====== ======
The accompanying notes are an intregral part of this statement.
</TABLE>
4
<PAGE>
360 Communications Company Retirement Savings Plan
Statement of Changes in Net Assets Available For Benefits With Fund Information
For the year ended December 31, 1998
(In thousands)
ALLTEL Sprint PIMCO
Corporation Corporation Total Return
Common Common Investment
Total Stock Fund(1) Stock Fund Fund
----- ------------- ----------- ------------
Additions:
Investment Income:
Interest and dividends $ 3,427 $ - $ 34 $ 330
Realized and unrealized
appreciation
(depreciation) in
the fair value
of investments 21,967 14,105 1,503 (41)
------- ------- ------ ------
Net investment income 25,394 14,105 1,537 289
------- ------- ------ ------
Contributions:
Employer contributions, net 7,762 1,696 - 804
Participant contributions 8,442 1,651 - 492
------- ------- ------ ------
Total contributions 16,204 3,347 - 1,296
------- ------- ------ ------
Total additions 41,598 17,452 1,537 1,585
------- ------- ------ ------
Deductions:
Benefit payments (8,714) (1,574) (169) (279)
Forfeitures - (123) (49) (28)
Loan withdrawals - (945) (27) (128)
Administrative expense (19) (1) - (1)
------- ------- ------ ------
Total deductions (8,733) (2,643) (245) (436)
------- ------- ------ ------
Loan repayments
Principal - 330 - 39
Interest 188 52 - 5
------- ------- ------ ------
188 382 - 44
Other transfers, net 46 (42) - (129)
------- ------- ------ ------
Net increase(decrease) prior
to interfund transfers 33,099 15,149 1,292 1,064
Interfund transfers, net - (111) (11,582) 726
------- ------- -------- ------
Net increase (decrease) 3,099 15,038 (10,290) 1,790
Net assets available
for benefits:
Beginning of year 66,583 11,622 10,290 2,402
------- ------- ------- ------
End of year $99,682 $26,660 $ - $4,192
======= ======= ======= ======
(1) Previously 360 Communications Company common stock. See Note 1 to the
Financial Statements and Supplemental Schedules for information related
to the merger.
The accompanying notes are an integral part of this statement.
5
<PAGE>
<TABLE>
<CAPTION>
360 Communications Company Retirement Savings Plan
Statement of Changes in Net Assets Available For Benefits With Fund Information - continued
For the year ended December 31, 1998
(In thousands)
Fidelity Investments
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Equity Over the Managed
Income Magellan Counter Overseas Income Freedom Freedom Freedom Freedom Freedom Participant
Fund Fund Fund Fund Fund Income 2000 2010 2020 2030 Loans
------- ------- ------- ------ ------- ------- ------ ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions:
Investment Income:
Interest and dividends $ 960 $ 892 $ 335 $ 69 $ 705 $ 1 $ 11 $ 31 $ 29 $ 30
Realized and unrealized
appreciation
(depreciation) in
the fair value
of investments 839 3,702 1,448 241 - 1 17 48 59 45
------- ------- ------ ------ ------- ---- ---- ----- ---- ----
Net investment income 1,799 4,594 1,783 310 705 2 28 79 88 75
------- ------- ------ ------ ------- ---- ---- ----- ---- ----
Contributions:
Employer contributions, net 1,668 1,971 662 420 220 3 9 60 120 129
Participant contributions 1,746 2,071 784 479 884 3 12 51 121 148
------- ------- ------ ------ ------- ---- ---- ----- ---- ----
Total contributions 3,414 4,042 1,446 899 1,104 6 21 111 241 277
------- ------- ------ ------ ------- ---- ---- ----- ---- ----
Total additions 5,213 8,636 3,229 1,209 1,809 8 49 190 329 352
------- ------- ------ ------ ------- ---- ---- ----- ---- ----
Deductions:
Benefit payments (1,723) (1,184) (669) (363) (2,148) (11) - (113) (30) (66) $ (385)
Forfeitures (84) (87) (35) (24) 430 - - - - - -
Loan withdrawals (571) (774) (177) (165) (477) (5) (9) (27) (27) (9) 3,341
Administrative expense (5) (3) - - (9) - - - - - -
------- ------- ------ ------ ------- ---- ---- ----- ---- ---- ------
Total deductions (2,383) (2,048) (881) (552) (2,204) (16) (9) (140) (57) (75) 2,956
------- ------- ------ ------ ------- ---- ---- ----- ---- ---- ------
Loan repayments
Principal 257 290 81 86 207 1 - 4 21 21 (1,337)
Interest 36 43 10 9 27 - - 2 3 1 -
------- ------- ------ ------ ------- ---- ---- ----- ---- ---- -------
293 333 91 95 234 1 - 6 24 22 (1,337)
Other transfers, net 50 76 43 18 30 - - - - - -
------- ------- ------ ------ ------- ---- ---- ----- ---- ---- -------
Net increase (decrease) prior
to interfund transfers 3,173 6,997 2,482 770 (131) (7) 40 56 296 299 1,619
Interfund transfers, net 474 2,397 776 219 5,184 33 203 809 486 386 -
------- ------- ------ ------ ------- ---- ---- ----- ---- ---- -------
Net increase (decrease) 3,647 9,394 3,258 989 5,053 26 243 865 782 685 1,619
Net assets available for
benefits:
Beginning of year 14,019 11,025 3,515 2,608 8,504 - - - - - 2,598
------- ------- ------ ------ ------- ---- ---- ----- ---- ---- -------
End of year $17,666 $20,419 $6,773 $ 3,597 $13,557 $ 26 $243 $ 865 $782 $685 $ 4,217
======= ======= ====== ====== ======= ==== ==== ===== ==== ==== =======
</TABLE>
<PAGE>
360 COMMUNICATIONS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
1. DESCRIPTION OF THE PLAN
The following brief description of the 360 Communications Company
Retirement Savings Plan (the "Plan") provides only general information.
Participants should refer to the Plan document and the summary plan description
for more complete information.
General
The Plan is a defined contribution plan established and sponsored by 360
Communications Company ("360" or the "Company") and is intended to
qualify under Section 401(a) of the Internal Revenue Code (the "Code").
The Plan includes a qualified cash or deferred arrangement as defined in Section
401(k) of the Code and is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
Merger
On July 1, 1998, 360 completed its merger with ALLTEL Corporation ("ALLTEL")
under a definitive merger agreement entered into on March 16, 1998. Under the
terms of the merger agreement, 360 became a wholly-owned subsidiary of ALLTEL.
In connection with the merger, each outstanding share of 360 common stock was
converted into the right to receive .74 shares of ALLTEL Corporation common
stock. Accordingly, the Plan was amended during 1998 to convert the Plan's
investment in 360 common stock into ALLTEL Corporation common stock. In
addition, participants in the Plan became fully vested in all allocated Company
contributions as a result of the merger. The Company expects that the Plan will
be merged with and into the ALLTEL Corporation Thrift Plan during 1999. See
note 4 for other changes in plan provisions resulting from the merger with
ALLTEL.
Background
Prior to March 7, 1996, 360 was a subsidiary of Sprint Corporation ("Sprint").
On March 7, 1996, Sprint effected a tax-free spinoff of 360 to Sprint
shareholders. Concurrent with the spinoff, a new Plan was established by which
identical investment funds were adopted and all account balances for the
Company's associates were transferred from the Sprint Retirement Savings Plan to
the Plan.
Eligibility
Elective deferrals made by associates to the Plan are voluntary. Individuals
employed by the Company for more than one year and who are not represented by a
collective bargaining unit are eligible to participate. Regular full-time
employees who have attained age 35 but not yet completed one year of service are
also eligible to participate in the Plan.
6
<PAGE>
360 COMMUNICATIONS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
1. DESCRIPTION OF THE PLAN (continued)
Contributions
Participants can contribute up to 16% of their eligible pay to a pre-tax
account, provided total contributions to the pre-tax account did not exceed an
annual limitation of $10,000 for 1998 and $9,500 for 1997. The percentage that
can be contributed by participants who meet the definition of a highly
compensated employee as defined in the Code is periodically recomputed in order
to maintain compliance with the permitted disparity provisions of the Code. The
annual limitation on contributions to the pre-tax account is established under
the Code. Currently contributions are allowed only to the pre-tax account.
Subject to certain limitations and restrictions, the Plan permits participants
to make rollover contributions from other plans qualified under sections 401(a)
of the Code. The Plan, as amended December 17, 1998, suspends any contributions
for compensation paid after December 30, 1998. In addition, no contribution of
any rollover amount that had not been approved by the Committee prior to
January 1, 1999 shall be permitted.
The Company makes a dollar for dollar matching contribution to the Plan.
Contributions in excess of 6% of each participant's pay are not included in this
calculation of the Company contribution. Contributions are made in cash or
Company stock with a market value equal to the Company contribution requirement.
The Plan, as amended December 17, 1998, suspends any contributions of any
matching amount with respect to compensation paid after December 30, 1998.
In 1996, the Company introduced an age-related contribution referred to as the
age-progressive contribution in the Plan. This age-related contribution is
available for eligible participants in the Plan who have attained age 25 and are
employed by the Company as of the last pay period each year. Employees not
enrolled in the Plan that have completed one year of service or are age 35 or
older are still eligible for the age-progressive contribution. If an investment
election does not appear on file for eligible participants at the time the
age-progressive contribution is made, the allocation is automatically invested
in the PIMCO Total Return Investment Fund (previously referred to as the Bond
Fund). The Plan, as amended December 17, 1998, suspends any age-progressive
contributions for plan years beginning after December 31, 1998.
Investment Funds
During 1998, participants may direct their contributions into the ALLTEL
Corporation Common Stock Fund (360 Communications Company Common Stock
Fund prior to December 17, 1998), a Bond Fund invested in the PIMCO Total Return
Investment Fund, Inc., and any of ten funds managed by Fidelity Investments
consisting of the Equity Income Fund, Magellan Fund, Managed Income Fund, Over
the Counter Fund, Overseas Fund, Freedom Income Fund, Freedom 2000 Fund, Freedom
2010 Fund, Freedom 2020 Fund, and the Freedom 2030 Fund. The Company
discontinued the Sprint Stock Fund on March 31, 1998. Company contributions are
invested in the same investment funds as plan participant contributions.
Participants may redirect the funds in which their current contributions are
invested each pay period. In addition, participants may also transfer existing
balances between funds on any week day, except holidays when the New York Stock
Exchange is closed. However, certain limitations do apply in that at no time can
transfers be made directly or indirectly (within 90 days) from the Managed
Income Fund to the PIMCO Total Return Investment Fund. During 1997, the Managed
Income Fund received a $400,000 distribution from the bankruptcy settlement of a
fund previously available to participants under the Sprint Retirement Savings
Plan.
7
<PAGE>
360 COMMUNICATIONS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
1. DESCRIPTION OF THE PLAN (continued)
Vesting
Participants are 100% vested in their participant contribution accounts at all
times.
Participants have an immediate 100% vested right to their Company contributions
upon 5 or more years of continuous service with the Company. Earlier vesting may
occur, if while an employee of the Company, a participant: (1) attains age 65,
(2) incurs a permanent and total disability, (3) dies, or (4) receives approval
of the Company's Board of Directors under certain circumstances.
Terminating participants who do not meet these vesting guidelines forfeit the
non-vested portion of the Company contribution. Such amounts are used to offset
future Company contribution requirements. In 1998, approximately $524,000 was
used to offset company contributions.
Withdrawals
Participants may withdraw the vested value of their account when they retire,
terminate employment with the Company, reach age 59 1/2, meet "hardship"
requirements defined in the Code, or become permanently and totally disabled.
Withdrawals may also be made from the after-tax portion of their account and the
vested portion of their Company contribution account that has been held by the
Plan for two full calendar years following the year of contribution. These
withdrawals may not be made more often than twice per year. The minimum
withdrawal is the lesser of $1,000 or 50% of the amount that may be withdrawn.
Participant Loans
Participants may borrow the lower of (1) one-half of the total value of their
vested account balance, (2) $50,000 reduced by the highest outstanding balance
of the participant's loan from the Plan during the one year period ending on the
date the loan is made, or (3) the total value of their pre-tax account. The
minimum loan is $1,000. Participants may have no more than two loans outstanding
from the Plan at a time. Amounts borrowed by participants must be repaid within
5 years and no sooner than 6 months. In the event that the proceeds of the loan
are used to acquire a participant's principal residence, the maximum repayment
period may be as much as 25 years. The interest rate charged on loans is set by
an administrative committee.
Participant Accounts
A separate account is maintained for each participant in the Plan. Each
participant's account is adjusted for (a) Company contributions made on behalf
of the participant, (b) the participant's own contributions made to the Plan,
including rollover contributions, (c) the participant's share of any investment
income (losses), (d) withdrawals, (e) loans, (f) forfeitures of Company
contributions due to the participant's withdrawal and (g) transfers directed by
the participant from one investment fund to another.
Administration and Plan Expenses
The Plan is administered by the Administrative Committee established pursuant to
the Plan. Most administrative expenses are paid for by the Company. Mutual funds
offered under the Plan incur fees related to their daily operations. These
expenses are paid out of the Plan's mutual fund assets and are reflected in
their share price or dividends; they are neither billed directly to participants
nor deducted from their accounts. Certain administrative charges for employee
loans are charged to participants with outstanding loans.
8
<PAGE>
360 COMMUNICATIONS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the Plan:
Valuation of Investments
Investments of the Plan are valued at fair market value except the Managed
Income Fund which is valued at estimated fair value (contract value representing
invested principal plus accrued interest thereon). The fair market value of the
common stock and mutual funds is based on the value of the last reported sale on
the last business day of the year. Loans to participants are valued at their
principal balance.
Interest
Income from the investments is recorded as earned on an accrual basis.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, and changes therein, and
disclosure of contingent assets and liabilities. Actual results could differ
from these estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform with the 1998
financial statement presentation.
Withdrawals
Withdrawals, other than cash, are recorded at the fair market value of the
assets on the date of distribution.
3. INVESTMENTS
The following table presents the cost and fair value of Plan investments that
represent 5% or more of the Plan's net assets available for benefits (in
thousands):
December 31, 1998 December 31, 1997
---------------------- --------------------
Cost Fair Value Cost Fair Value
------- ---------- ------ ----------
Investments at fair
value as determined
by quoted market price:
Common stock:
ALLTEL common stock $13,986 $25,420 $ - $ -
360 common stock - - 11,228 11,316
Sprint common stock - - 4,568 10,001
Mutual funds:
Magellan Fund 16,165 20,419 10,116 11,025
Equity Income Fund 15,176 17,666 11,178 14,019
Over the Counter Fund 5,484 6,773 3,556 3,515
Managed Income Fund 13,557 13,557 8,504 8,504
PIMCO Total Return
Investment Fund 4,229 4,192 2,391 2,402
9
<PAGE>
360 COMMUNICATIONS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
4. PLAN AMENDMENTS
In connection with the merger, the Plan was amended to reflect the following
changes:
Amendment No. 4 to the Plan transitions the Company Stock (360 common
stock) to ALLTEL common stock, par value $1.00 per share, as of December 17,
1998.
Amendment No. 5 to the Plan allows participants in the Plan that had not become
fully vested in the Company contribution prior to September 11, 1998 to become
fully vested and the contributions become non-forfeitable as of the close of
business on September 11, 1998. In addition, the amendment provides for the
funding of the contribution through forfeitures, amounts contributed by the
employers for such purpose, or if that is insufficient, by earnings or gains to
the Plan.
Amendment No. 6 to the Plan suspends the contributions and any matching amount
for any compensation paid after December 30, 1998. In addition, no
age-progressive contributions are permitted for plan years beginning after
December 31, 1998.
5. INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated October 9, 1997, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC"). The
Plan has been amended since receiving the determination letter. However, the
Plan administrator and the Plan's tax counsel believe that the Plan is designed
and is currently being operated in compliance with the applicable requirements
of the IRC.
6. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Fidelity
Investments. Fidelity Investments is the trustee as defined by the Plan and,
therefore, these transactions qualify as party-in-interest. Fees paid by the
Plan for the investment management services amounted to $19,000 for the year
ended December 31, 1998.
10
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
SCHEDULE I
360 COMMUNICATIONS COMPANY
RETIREMENT SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
As of December 31, 1998
(In thousands, except share amounts)
Description of Assets Shares Cost Fair Value
- --------------------- ------ ---- ----------
*ALLTEL Corporation
Common Stock 424,999 $13,986 $25,420
Mutual Funds:
PIMCO Total Return
Investment Fund 397,762 4,229 4,192
Mutual funds managed by Fidelity Investments:
*Magellan Fund 169,000 16,165 20,419
*Equity Income Fund 318,021 15,176 17,666
*Over the Counter Fund 155,233 5,484 6,773
*Overseas Fund 99,973 3,365 3,597
*Managed Income Fund 13,557,413 13,557 13,557
*Freedom Income 2,300 26 26
*Freedom 2000 19,695 231 243
*Freedom 2010 65,011 820 865
*Freedom 2020 56,040 720 782
*Freedom 2030 49,324 640 685
------- -------
56,184 64,613
------- -------
Total Mutual Funds 60,413 68,805
------- -------
*Participant Loans Loans with interest rates
ranging from 7.0 percent
to 11.55 percent 4,217 4,217
------- -------
Total Investments $78,616 $98,442
======= =======
*Represents a Party-In-Interest
11
<PAGE>
SCHEDULE II
360 COMMUNICATIONS COMPANY
RETIREMENT SAVINGS PLAN
Line 27b - Schedule of Loans in Default
As of December 31, 1998
Original Amount Unpaid Detailed
Identity of Amount Received Balance at Description Amount
Obligator of Loan During Year (a) End of Year of Loan Overdue (a)
- ----------- ------- --------------- ----------- ----------- -----------
Various Plan $20,670 $1,848 $14,841 Issued
Participants November 30, $1,919
1993 through
May 18, 1998;
interest rates
7.00% to 7.25%
(a) Amount includes principal and interest
12
<PAGE>
SCHEDULE III
360 COMMUNICATIONS COMPANY
RETIREMENT SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1998
(In thousands, except number of transactions)
<TABLE>
<CAPTION>
Fair
Number of Purchase Selling Market Realized
Description of Assets Transactions Price Price Cost Value Gain
- --------------------- ------------ -------- ------- ---- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Category (iii) = A series of transactions in excess of 5% of plan assets
*ALLTEL Corporation
Common Stock Fund 250 $ 7,577 $ - $ 7,577 $ 7,577 $ -
240 - 6,643 4,818 6,643 1,825
*Fidelity Magellan Fund 248 9,128 - 9,128 9,128 -
236 - 3,437 3,080 3,437 357
*Fidelity Equity Income Fund 243 7,698 - 7,698 7,698 -
231 - 4,889 4,299 4,889 590
*Fidelity Over the Counter Fund 230 3,607 - 3,607 3,607 -
200 - 1,796 1,679 1,796 117
*Fidelity Managed Income Fund 241 11,936 - 11,936 11,936 -
234 - 6,883 6,883 6,883 -
Sprint Stock Fund 62 34 - 34 34 -
62 - 11,826 4,601 11,826 7,225
PIMCO Total Return
Investment Fund 223 3,092 - 3,092 3,092 -
203 - 1,231 1,224 1,231 7
There were no category (i), (ii) or (iv) transactions during the year.
*Represents a Party-In-Interest
</TABLE>
13
