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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 19, 1994
AMERITECH CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of other jurisdiction of incorporation)
1-8612 36-3251481
Commission File Number IRS Employer ID No.
30 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices)
Registrant's telephone number, including area code: (312)750-5000
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Item 7. Financial Statements and Exhibits
Propelled by record growth in the number of cellular customers and
customer access lines, Ameritech Corporation (Ameritech) revenues rose
5.9 percent in the third quarter, growing to $3.12 billion from $2.95
billion in the third quarter a year ago.
Before one-time events in both years, income rose 15.4 percent to
$419.1 million in the third quarter of 1994, compared with $363.3
million in the third quarter of 1993. Based on these results, earnings
per share increased 13.4 percent to 76 cents per share in the third
quarter of 1994, up from 67 cents per share in the third quarter of
1993.
Growth in the third quarter was fueled by these developments:
o Ameritech gained a record 385,000 new cellular customers over the
past 12 months, up 51 percent from a year ago, to almost 1,140,000
customers.
o The company added 638,000 customer access lines in the past 12
months, expanding its total lines by a record 3.7 percent to more
than 18 million. Business lines grew 6.5 percent, while residence
lines were up 2.3 percent.
o Network access minutes of use grew 8.0 percent, compared with the
third quarter of 1993.
Reported net income for the third quarter of 1994 was $250.9
million, compared with $425.0 million a year ago. Reported earnings per
share were 46 cents, compared with 78 cents a year ago. Comparisons
between the two quarters are affected by one-time events in both years.
In the third quarter of 1994, Ameritech recorded an additional
after-tax charge of $168.2 million or 30 cents a share for a workforce
restructuring. When the restructuring plan was announced in March,
Ameritech had estimated that 6,000 employees would leave under the
plan. Now the company expects 10,000 employees to accept the plan, and
the third-quarter charge adjusts for the additional 4,000 employees.
In the third quarter of 1993, Ameritech recorded a one-time gain
of $61.7 million, or 11 cents a share, from the sale of shares of
Telecom Corporation of New Zealand.
For the first nine months of 1994, Ameritech revenues rose 6.5
percent to $9.26 billion, up from $8.69 billion in the first nine
months of 1993. Excluding one-time events, income for the first nine
months of 1994 rose 14.0 to $1.24 billion from $1.09 billion a year
ago. One-time events excluded in this calculation of income were the
1994 after-tax charges of $501.0 million for workforce restructuring; a
1993 charge of $37.3 million for restructuring at Telecom Corporation
of New Zealand; and the 1993 after-tax gain of $61.7 million from the
sale of shares of Telecom Corporation of New Zealand. Reported net
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income was $741.3 million in the first nine months of 1994, compared
with $1,114.6 million in the first nine months of 1993.
Before one-time events, earnings per share for the first nine
months of 1994 grew 12.4 percent to $2.26 from $2.01 in the first nine
months of 1993. Including one-time events, reported earnings per share
were $1.35 in the first nine months of 1994, compared with $2.05 in the
first nine months of 1993.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Three Months Ended
September 30 %
1994 (1) 1993 (1) Change
(Unaudited) (Unaudited)
Revenues $3,121.4 $2,946.8 5.9%
Operating expenses (2) 2,689.0 2,326.4 15.6%
Operating income 432.4 620.4
(30.3)%
Other (income) expense, net (3) (45.6) (103.6)
(56.0)%
Interest expense 117.8 117.0 0.7%
Income before income taxes 360.2 607.0
(40.7)%
Income taxes 109.3 182.0
(39.9)%
Net income $ 250.9 $ 425.0
(41.0)%
Average common shares
outstanding (000) (4) 549,893 544,934 0.9%
Earnings per common share (4) $0.46 $0.78
(41.0)%
Dividends declared per
common share (4) $0.48 $0.46 4.3%
(1) Income before one-time adjustments rose 15.4 percent to $419.1
million from $363.3 million in the third quarter of 1993.
Earnings per share before one-time adjustments grew 13.4
percent to 76 cents, up from 67 cents in the third quarter of
1993. See notes 2 and 3 for details of one-time adjustments.
(2) 1994 results include a $270.1 million pretax charge ($168.2
million after tax or $0.30 per share) related to workforce
restructuring.
(3) 1993 results include a $85.7 million pretax gain ($61.7 million
after tax or $0.11 per share) related to sale of shares of
Telecom Corporation of New Zealand.
(4) All 1993 share and per share data have been restated to reflect
the two-for-one stock split effective December 31, 1993.
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Nine Months Ended
September 30 %
1994 (1) 1993 (1) Change
(Unaudited) (Unaudited)
Revenues $9,258.2 $8,694.1 6.5%
Operating expenses (2) 7,939.3 6,831.0 16.2%
Operating income 1,318.9 1,863.1
(29.2)%
Other (income) expense, net (3) (114.0) (111.7) 2.1%
Interest expense 333.3 354.6
(6.0)%
Income before income taxes 1,099.6 1,620.2
(32.1)%
Income taxes 358.3 505.6
(29.1)%
Net income $ 741.3 $1,114.6
(33.5)%
Average common shares
outstanding (000) (4) 548,634 543,337 1.0%
Earnings per common share (4) $1.35 $2.05
(34.1)%
Dividends declared per
common share (4) $1.44 $1.38 4.3%
(1) Income before one-time adjustments rose 14.0 percent to
$1,242.3 million from $1,090.2 million for the nine months of
1993. Earnings per common share before one-time adjustments
grew 12.4 percent to $2.26, up from $2.01 in the first nine
months of 1993. See notes 2 and 3 for details of one-time
adjustments.
(2) 1994 results include $800.1 million in pretax charges ($501.0
million after tax or $0.91 per share) related to workforce
restructuring.
(3) 1993 results include a $42.3 million pretax charge ($37.3
million after tax or $0.07 per share) related to restructuring
at Telecom Corporation of New Zealand. Also included in 1993
results was a $85.7 million pretax gain ($61.7 million after
tax or $0.11 per share) related to the sale of shares of
Telecom Corporation of New Zealand.
(4) All 1993 share and per share data have been restated to reflect
the two-for-one stock split effective December 31, 1993.
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
Change from
Sept. 30 Dec. 31 Dec. 31
1994 1993 1993 E
ASSETS (Unaudited)
Current assets $ 2,742.2 $ 2,626.7 $115.5
Property, plant and equipment, net 17,083.7 17,366.1 (282.4)
Investments, primarily international 1,232.9 1,219.0 13.9
Other assets and deferred charges 2,459.7 2,215.9 243.8
Total assets $23,518.5 $23,427.7 $ 90.8
LIABILITIES AND SHAREOWNERS' EQUITY
Debt maturing within one year $ 2,036.8 $ 2,601.6 ($564.8)
Other current liabilities 3,007.1 3,083.7 (76.6)
Long-term debt 4,490.0 4,090.4 399.6
Deferred credits and
other long-term liabilities 5,934.2 5,807.4 126.8
Shareowners' equity 8,050.4 7,844.6 205.8
Total liabilities and
shareowners' equity $23,518.5 $23,427.7 $ 90.8
SELECTED FINANCIAL AND OPERATING DATA
(Unaudited)
(Dollars in millions)
Sept. 30 Sept. 30 % E
1994 1993 Change
Debt ratio 44.8% 45.5% n/aE
Customer lines (000's) 18,054 17,416 3.7%
Employees 65,146 68,434
(4.8)%
Telephone company employees 56,043 60,539
(7.4)%
Customer lines per telephone
company employee 322 288 11.8%
Return to average
equity - annualized Qtr. 18.4% (1) 22.2% n/aE
YTD 14.3% (2) 20.0% n/aE
Return to average total
capital - annualized Qtr. 12.6% (1) 14.3% n/aE
YTD 10.2% (2) 13.0% n/aE
Construction activity Qtr. $ 448.6 $ 513.6
(12.7)%
YTD $1,342.8 $1,542.9
(13.0)%
(1) Adjusted for third quarter 1994 after tax workforce
restructuring charge of $168.2 million.
(2) Adjusted for after tax workforce restructuring charges of $501.0
million.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: October 19, 1994
AMERITECH CORPORATION
By /s/ Bruce B. Howat
Bruce B. Howat
Secretary
