SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended March 31, 1994
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-8612
AMERITECH CORPORATION
(Incorporated under the laws of the State of Delaware)
30 S. Wacker Drive, Chicago, Illinois 60606
I.R.S. Employer Identification Number 36-3251481
Telephone - Area Code (312) 750-5000
At April 29, 1994, 548,074,377 common shares were outstanding.
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 ___.
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Part I - Financial Information
The following financial statements have been prepared by Ameritech
Corporation ("Ameritech" or the "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC") and, in the
opinion of the Company, include all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of results of
operations, financial position and cash flows for each period shown.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such SEC rules and
regulations. The Company believes that the disclosures made are adequate
to make the information presented not misleading. These financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's latest annual report on Form 10-K.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Millions, except per share amounts)
(Unaudited)
Three Months Ended
March 31
1994 1993
-------- --------
Revenues. . . . . . . . . . . . . . . . . $2,990.4 $2,796.5
-------- --------
Operating Expenses
Employee-related expenses . . . . . . . 878.8 871.5
Depreciation and amortization . . . . . 546.9 535.1
Other operating expenses. . . . . . . . 745.0 642.3
Restructuring charge. . . . . . . . . . 530.0 --
Taxes other than income taxes . . . . . 148.8 153.6
-------- --------
2,849.5 2,202.5
-------- --------
Operating income. . . . . . . . . . . . . 140.9 594.0
Interest expense. . . . . . . . . . . . . 105.2 119.5
Other (income) expense, net . . . . . . . (32.9) 19.3
-------- --------
Income before income taxes. . . . . . . . 68.6 455.2
Income taxes. . . . . . . . . . . . . . . 24.8 155.2
-------- --------
Net income. . . . . . . . . . . . . . . . $ 43.8 $ 300.0
======== ========
Earnings per common share . . . . . . . . $0.08 $0.55*
===== =====
Dividends declared per common share . . . $0.48 $0.46*
===== =====
Average common shares outstanding (millions) 547.3 541.7*
===== =====
* Restated for two-for-one stock split effective December 31, 1993.
See Notes to Consolidated Financial Statements
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CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
March 31, 1994 Dec. 31, 1993
-------------- -------------
(Unaudited) (Derived from
Audited
Financial
ASSETS Statements)
Current assets
Cash and temporary cash investments . . . $ 219.2 $ 155.9
Receivables, net. . . . . . . . . . . . . 2,027.9 2,068.9
Material and supplies . . . . . . . . . . 150.6 133.7
Prepaid and other . . . . . . . . . . . . 261.4 268.2
--------- ---------
2,659.1 2,626.7
--------- ---------
Property, plant and equipment . . . . . . . 29,335.8 29,117.4
Less, accumulated depreciation. . . . . . 12,066.1 11,751.3
--------- ---------
17,269.7 17,366.1
--------- ---------
Investments, primarily international. . . . 1,176.0 1,219.0
Other assets and deferred charges . . . . . 1,952.2 2,215.9
--------- ---------
Total assets. . . . . . . . . . . . . . . . $23,057.0 $23,427.7
========= =========
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Debt maturing within one year . . . . . . $ 2,498.7 $ 2,601.6
Accounts payable. . . . . . . . . . . . . 1,040.1 1,210.6
Other current liabilities . . . . . . . . 2,093.8 1,873.1
--------- ---------
5,632.6 5,685.3
--------- ---------
Long-term debt. . . . . . . . . . . . . . . 4,029.0 4,090.4
--------- ---------
Deferred credits and other long-term liabilities
Accumulated deferred income taxes . . . . 1,681.3 1,889.4
Unamortized investment tax credits. . . . 341.0 354.3
Postretirement benefits
other than pensions. . . . . . . . . . . 2,662.7 2,519.7
Other . . . . . . . . . . . . . . . . . . 977.0 1,044.0
--------- ---------
5,662.0 5,807.4
--------- ---------
Shareowners' equity
Common stock, par value $1; 1.2 billion
shares authorized, 587,612,000 issued. . 587.6 587.6
Proceeds in excess of par value . . . . . 5,473.6 5,454.8
Reinvested earnings . . . . . . . . . . . 3,236.2 3,455.3
Treasury stock, at cost (39,716,000 shares
in 1994 and 40,969,000 shares in 1993) . (1,071.2) (1,105.0)
Deferred compensation . . . . . . . . . . (416.5) (468.5)
Currency translation adjustments. . . . . (73.6) (76.3)
Unearned compensation, restricted
stock awards . . . . . . . . . . . . . . (2.7) (3.3)
--------- ---------
7,733.4 7,844.6
--------- ---------
Total liabilities and shareowners' equity . $23,057.0 $23,427.7
========= =========
See Notes to Consolidated Financial Statements
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
Three Months Ended
March 31
1994 1993
-------- --------
Cash Flows from Operating Activities
Net income. . . . . . . . . . . . . . . . $ 43.8 $300.0
Restructuring charge, net of tax. . . . . 332.8 --
Depreciation and amortization . . . . . . 546.9 535.1
Deferred income taxes, net. . . . . . . . (8.3) 10.2
Investment tax credits, net . . . . . . . (13.3) (16.9)
Interest during construction. . . . . . . (2.8) (2.2)
Provision for uncollectibles. . . . . . . 43.5 37.7
Increase in accounts receivable . . . . . (2.1) (23.9)
Increase in material and supplies . . . . (18.6) (16.2)
Decrease in certain other current assets. 7.0 4.6
Decrease in accounts payable. . . . . . . (170.6) (292.1)
Increase in accrued taxes . . . . . . . . 177.8 132.6
Increase (decrease) in certain
other current liabilities. . . . . . . . (92.5) 70.1
Change in certain other noncurrent
assets and liabilities . . . . . . . . . (66.7) (66.1)
Other . . . . . . . . . . . . . . . . . . (8.9) 7.5
------ ------
Net cash from operating activities. . . . 768.0 680.4
------ ------
Cash Flows from Investing Activities
Capital expenditures. . . . . . . . . . . (409.6) (488.2)
Additional investments. . . . . . . . . . (6.9) --
Other investing activities, net . . . . . 71.3 (2.0)
------ ------
Net cash from investing activities. . . . (345.2) (490.2)
------ ------
Cash Flows from Financing Activities
Net change in short-term debt . . . . . . 198.5 (108.0)
Issuance of long-term debt. . . . . . . . 196.1 400.0
Retirement of long-term debt. . . . . . . (535.7) (271.5)
Dividend payments . . . . . . . . . . . . (262.4) (248.6)
Proceeds from reissuance of treasury stock 51.7 73.8
Other financing activities, net . . . . . (7.7) (6.0)
------ ------
Net cash from financing activities. . . . (359.5) (160.3)
------ ------
Net increase in cash and
temporary cash investments . . . . . . . 63.3 29.9
Cash and temporary cash investments,
beginning of period. . . . . . . . . . . 155.9 92.4
------ ------
Cash and temporary cash investments,
end of period. . . . . . . . . . . . . . $219.2 $122.3
====== ======
See Notes to Consolidated Financial Statements
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1994
(per share amounts for 1993 have been restated to give effect to the
two-for-one stock split effective December 31, 1993)
NOTE 1: Work Force Restructuring
On March 25, 1994, Ameritech announced that it will reduce its
nonmanagement work force by 6,000 employees by the end of 1995. Under
terms of agreements between Ameritech, the Communication Workers of America
(CWA) and the International Brotherhood of Electrical Workers (IBEW),
Ameritech is implementing an enhancement to the Ameritech Pension Plan by
adding three years to the age and the net credited service of eligible
nonmanagement employees who leave the business during a designated period
that ends in mid-1995. In addition, certain of the Company's business
units are offering financial incentives under terms of its current
contracts with the CWA and the IBEW to selected nonmanagement employees who
leave the business before the end of 1995.
This program resulted in a charge of $530.0 million or $332.8 million
after-tax. This charge reduced the Company's prepaid pension asset by
$304.7 million for pension enhancements and curtailment losses. The charge
also includes a curtailment loss of $131.5 million related to SFAS No. 106
("Employers' Accounting for Postretirement Benefits Other than Pensions")
and a severance accrual of $93.8 million.
NOTE 2: Investment in Telecom Corporation of New Zealand Limited
(New Zealand Telecom)
The Company currently owns 469,060,000 shares of New Zealand Telecom, or
24.8 percent of the common equity of that company. Shares of New Zealand
Telecom are publicly traded and, as of March 31, 1994, the closing price of
such shares was about US$2.87 per share. The aggregate market value of
Ameritech's investment is difficult to ascertain as the New Zealand Telecom
shares are thinly traded with approximately 50 percent of the company owned
by Ameritech and one other corporate investor.
During the first quarter of 1994 the Company received a distribution of
cash totaling $67.1 million from New Zealand Telecom. This resulted from a
capital restructuring by New Zealand Telecom effected by canceling about 20
percent of its outstanding shares, increasing its debt level, and making a
special capital distribution to shareholders. At March 31, 1994, the
carrying amount of Ameritech's investment in New Zealand Telecom was $564.1
million.
NOTE 3: Investment in General Electric Company subsidiary
On May 2, 1994, Ameritech concluded its agreement to invest $472.5 million
into a newly formed subsidiary of General Electric Company. The new
subsidiary received a contribution from the General Electric Company of the
principal net assets of its General Electric Information Services division
in exchange for all of the voting common stock. Ameritech's investment is
in the form of a four-year interest bearing convertible debenture, which if
legal restrictions are removed, converts into a 30 percent equity interest
in the new company. The debenture has been guaranteed as to repayment by
the General Electric Company. Ameritech may extend the term of the
debenture by one year under certain circumstances.
The Company's investment was funded principally by the issuance of $450.0
million of new unsecured noncallable debt by Ameritech Capital Funding
Corporation, guaranteed by the Company. The debt is due in 1997 and 1998
with interest tied to LIBOR. This debt was issued from an existing SEC
shelf registration statement, which has a remaining capacity of $192.2
million.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1994 vs.
THREE MONTHS ENDED MARCH 31, 1993
RESULTS OF OPERATIONS
For the three months ended March 31, 1994, net income was $43.8 million or
$0.08 per common share on 547.3 million average common shares outstanding.
Net income in the first quarter of 1993 was $300.0 million or $0.55 per
common share on 541.7 million average common shares outstanding.
Results in the first quarter of 1994 included an after-tax charge of $332.8
million or $0.61 per common share for work force restructuring related to
the Company's plans to reduce its nonmanagement work force by 6,000
employees by the end of 1995. Results in the first quarter of 1993
included an after-tax restructuring charge of $37.3 million or $0.07 per
common share related to the Company's investment in New Zealand Telecom.
Excluding the above noted significant items in both years, net income would
have been $376.6 million in 1994 and $337.3 million in 1993, an increase of
11.7 percent, and earnings per common share would have been $0.69 and $0.62
per common share, respectively, an increase of 11.3 percent.
___________________________________________________________________________
Revenues
Total revenues for the three months ended March 31, 1994 increased 6.9
percent over the comparable prior year period to $2,990.4 million. The
increase was primarily attributable to higher network usage due to access
line growth and volume increases at the cellular operation due to cellular
subscriber line growth. Rate reductions at the landline telephone
operations partially offset these increases.
___________________________________________________________________________
Local service
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $1,307.9 $1,231.4 $76.5 6.2
The increase in local service revenues in the first quarter of 1994 was
primarily attributable to higher network usage which increased revenues by
$70.5 million. The increased network usage resulted principally from
growth in the number of access lines, which increased 3.3 percent or
575,000 lines to 17,761,000 from 17,186,000 as of March 31, 1993, as well
as increased usage and greater sales of special calling features (e.g. Call
Forwarding, Caller ID, etc.).
___________________________________________________________________________
_
Network access
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Interstate
Three Months Ended $544.2 $500.2 $44.0 8.8
Intrastate
Three Months Ended $159.1 $149.8 $9.3 6.2
The increase in interstate network access revenues for the three months
ended March 31, 1994, was primarily due to higher network usage, which
resulted in additional revenues of $29.0 million, a reduction in common
line pool support payments of $18.7 million and revenue sharing accruals of
$8.6 million recorded in 1993. Partially offsetting these increases were
net rate reductions of $16.3 million. Minutes of use related to interstate
calls increased 6.7 percent in 1994.
The increase in intrastate network access revenues for the three months
ended March 31, 1994, was primarily due to higher network usage which
resulted in additional revenues of $24.8 million, partially offset by rate
reductions of $15.3 million. Minutes of use related to intrastate calls
increased 18.2 percent in 1994.
___________________________________________________________________________
Long distance service
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $364.2 $349.8 $14.4 4.1
The increase in long distance service revenues for the three months ended
March 31, 1994, was primarily attributable to a change in the method in
which independent company settlements were recorded at Illinois Bell and
Indiana Bell (accounting for $15.3 million of the increase) and volume
related increases of $5.1 million.
___________________________________________________________________________
Directory and other
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $615.0 $565.3 $49.7 8.8
The increase in directory and other revenue for the three months ended
March 31, 1994, was attributable primarily to cellular subscriber line
growth of 46.9 percent to 949,000 lines from 646,000 lines at March 31,
1993.
___________________________________________________________________________
Operating expenses
Total operating expenses for the three months ended March 31, 1994
increased by $647.0 million or 29.4 percent. The increase was primarily
attributable to a $530.0 million charge related to a work force
restructuring plan announced in March 1994 under which the Company plans to
reduce its nonmanagement work force. Also contributing to the increase
were higher advertising expenses, access expenses and growth-related and
other increases at the cellular operation.
___________________________________________________________________________
Employee-related expenses
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $878.8 $871.5 $7.3 0.8
The increase in employee-related expenses for the three months ended
March 31, 1994, was attributable primarily to the effect of higher wage
rates, costs of postretirement benefits and other employee-related expenses
such as travel and training. Partially offsetting these increases were the
effects of work force reductions over the past year, reduced incentive
accruals, decreased overtime payments and increased pension credits.
There were 67,229 employees at March 31, 1994, compared with 69,639 at
March 31, 1993. Work force reductions, primarily at the landline telephone
operations, accounted for the majority of the reduction.
___________________________________________________________________________
Depreciation and
amortization expense
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $546.9 $535.1 $11.8 2.2
The increase in depreciation and amortization expense for the three months
ended March 31, 1994, was principally due to an increase of the telephone
plant investment base and growth-related increases at the Company's
cellular operation resulting in depreciation expense increases of $7.0
million and $6.5 million, respectively.
___________________________________________________________________________
Other operating expenses
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $745.0 $642.3 $102.7 16.0
The increase in other operating expenses for the three months ended
March 31, 1994, was primarily attributable to increased contract and
professional services, a change in the method in which access expenses are
recorded with independent telephone companies, advertising expenses and
growth-related cost of sales increases at the cellular operation. Also
contributing to the increase was a first quarter 1993 net credit to this
expense category of $13.6 million related to a voluntary and involuntary
management work force separation program which ended March 31, 1993. The
credit resulted from settlement and curtailment gains from the pension
plan, net of special termination benefits.
___________________________________________________________________________
Restructuring charge
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $530.0 $-- $530.0 --
As discussed more fully in Note 1, the Company announced on March 25, 1994,
that it will reduce its nonmanagement work force by 6,000 employees by the
end of 1995. Reduction of the work force results from technological
improvements, consolidations, and initiatives identified by management to
balance its cost structure with emerging competition.
This program resulted in a first quarter 1994 charge of $530.0 million
($332.8 million on an after-tax basis). A significant portion of the
program's cost will be funded by the Ameritech Pension Plan, whereas
financial incentives to be paid by the Company will require Company funds
of approximately $140 million. Settlement gains (estimated to exceed $200
million), which result from lump-sum payments from the Ameritech Pension
Plan, will be reflected in income as payments are made by the Ameritech
Pension Plan. Settlement gains are noncash in nature and result from the
funded status of the Ameritech Pension Plan.
The Company expects that approximately 3,700 employees will leave the
payroll in 1994 and approximately 2,300 in 1995. The anticipated timing of
employees leaving the payroll is: 500 in the second quarter of 1994, 1,500
in the third quarter of 1994, 1,700 in the fourth quarter of 1994, 1,400 in
the first quarter of 1995, 800 in second quarter of 1995 and 100 in the
third quarter of 1995. The Company will manage the departure of all 6,000
employees to minimize disruption within its business and to its customers.
Cash requirements of the Company to fund the financial incentives
(principally contractual termination payments) will be met as prescribed by
applicable collective bargaining agreements. Certain of these collective
bargaining agreements require contractual termination payments to be paid
to employees in a manner other than lump-sum, thus requiring cash payments
beyond an employee's termination date.
The Company believes this program will reduce its employee-related costs by
approximately $300 million on an annual basis upon completion of the
program. However, these anticipated savings may be partially offset by
growth in new businesses and the cost of adding other employees with
different skills.
___________________________________________________________________________
Taxes other than income taxes
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $148.8 $153.6 $(4.8) (3.1)
The decrease in taxes other than income taxes for the three months ended
March 31, 1994, is primarily attributable to lower capital stock taxes in
Illinois.
___________________________________________________________________________
OTHER INCOME AND EXPENSES
Interest expense
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $105.2 $119.5 $(14.3) (12.0)
The decrease in interest expense for the three months ended March 31, 1994,
was primarily due to the calling of certain long-term debt in 1993 and
subsequent refinancing at lower rates. Also contributing to the decrease
was the application of proceeds from the sale of New Zealand Telecom shares
in July 1993. Costs related to the corporate-owned life insurance programs
also decreased. Partially offsetting these decreases was an increase in
interest expense related to the funding of the Company's investment of
$437.5 million in the Hungarian telephone company, MATAV, on December 22,
1993.
___________________________________________________________________________
Other (income) expense, net
Change
March 31 (Income) Percent
(dollars in millions) 1994 1993 Expense Change
Three Months Ended $(32.9) $19.3 $(52.2) --
Other (income) expense, net includes equity earnings in affiliates,
interest during construction, interest income, costs associated with the
early retirement of debt (including call premiums and write-offs of
unamortized deferred costs) and other nonoperating items.
The following is an analysis of the major components of other (income)
expense, net for the respective periods:
Three Months Ended Change
March 31 (Income)
1994 1993 Expense
Equity earnings in affiliates
(primarily related to
Investment in New
Zealand Telecom) $(17.4) $25.3 $(42.7)
Interest income on company
owned life insurance and
other related programs (12.9) (13.6) .7
Interest during construction (2.8) (2.2) (.6)
Call premiums on long-term debt -- 9.5 (9.5)
Other .2 .3 (.1)
------ ----- ------
Total other (income) expense, net $(32.9) $19.3 $(52.2)
====== ===== ======
The principal reason for the increase in equity earnings of affiliates
related to a New Zealand Telecom $42.0 million restructuring charge in the
first quarter of 1993. The call premium charge in 1993 related to certain
Ohio Bell debt.
___________________________________________________________________________
Income taxes
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $24.8 $155.2 $(130.4) (84.0)
The decrease in income taxes for the three months ended March 31, 1994, was
due primarily to lower pretax income as a result of the 1994 work force
restructuring charge of $530.0 million (or $332.8 million after-tax).
Excluding the effect of the restructuring charge, income taxes increased in
line with increased earnings of the business.
___________________________________________________________________________
FINANCIAL CONDITION
Capital expenditures
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $437.5 $491.0 $(53.5) (10.9)
Capital expenditures include cash payments to acquire property, plant and
equipment and noncash items such as capitalized leases and interest during
construction.
The decrease in capital expenditures for the first three months of 1994
relates primarily to lower planned capital expenditures at the landline
telephone operations and delayed expenditures at the cellular operation.
___________________________________________________________________________
Dividends declared
March 31 Increase Percent
(dollars in millions) 1994 1993 (Decrease) Change
Three Months Ended $263.0 $249.6 $13.4 5.4
On March 15, 1994, the Board of Directors declared a quarterly dividend of
$.48 per common share, a 4.3 percent increase over the $.46 per common
share declared in the same quarter in the prior year.
___________________________________________________________________________
Debt ratio
The Company's debt ratio was 45.8 as of March 31, 1994, compared with 46.0
percent as of December 31, 1993. The relatively constant debt ratio can be
primarily attributed to lower debt levels partially offset by lower
reinvested earnings due to the after tax first quarter work force
restructuring charge of $332.8 million.
See Note 3 for debt issued after March 31, 1994.
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OTHER INFORMATION
Effects of Regulatory Accounting
The Company presently gives accounting recognition to the actions of
regulators where appropriate, as prescribed by Statement of Financial
Accounting Standards No. 71, "Accounting for the Effects of Certain Types
of Regulation" (SFAS No. 71). Under SFAS No. 71, the Company records
certain assets and liabilities because of actions of regulators. Further,
amounts charged to operations for depreciation expense reflect estimated
useful lives and methods prescribed by regulators rather than those that
might otherwise apply to unregulated enterprises. The Company cannot
presently quantify, without a complete historical assessment of its
competitive and regulatory environments, what the financial statement
impact would have been had depreciation expense been determined absent
regulation.
In the event the Company determines that it no longer meets the criteria
for following SFAS No. 71, the accounting impact to the Company would be an
extraordinary noncash charge to operations of an amount which could be
material. Criteria that give rise to the discontinuance of SFAS No. 71
include (1) increasing competition which restricts the Company's ability to
establish prices to recover specific costs, and (2) a significant change in
the manner in which rates are set by regulators from cost-based regulation
to another form of regulation. The Company periodically reviews these
criteria to ensure the continuing application of SFAS No. 71 is still
appropriate.
___________________________________________________________________________
Ratio of earnings to fixed charges
The Company's ratio of earnings to fixed charges for the three months ended
March 31 was 1.63 in 1994 and 4.41 in 1993. The ratio in 1994 was
adversely affected by a first quarter charge of $530.0 million for work
force restructuring (see prior discussion of this charge). This charge
will be primarily funded from the Ameritech Pension Plan. The Company
believes its ratio in 1994 is not indicative of a significant change in its
ability to fund its debt.
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Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The 1994 Annual Meeting of Shareowners of the Company was held on
April 20, 1994.
The number of common shares present at the Annual Meeting in person
or by proxy and voting and withholding authority to vote in the
election of Directors was 449,891,133 or 82.154 percent of the
common shares of Ameritech outstanding on February 22, 1994, the
record date for the Annual Meeting.
(b) The following nominees, having received the FOR votes set opposite
their respective names, constituting a plurality of the votes cast
at the Annual Meeting for the election of Directors, were duly
elected Directors of the Company for a three-year term.
DIRECTORS FOR WITHHELD
Donald C. Clark 439,637,542 10,253,591
Melvin R. Goodes 439,223,483 10,667,650
James A. Henderson 439,695,742 10,195,391
John B. McCoy 439,698,383 10,192,750
The largest percentage of shares withheld from voting with respect
to any nominee for director was 2.371 percent. The terms of office
of the following Directors continued after the meeting: Weston R.
Christopherson, Hanna Holborn Gray, John D. Ong, Louis J.
Rutigliano, A. Barry Rand, Richard H. Brown, Sheldon B. Lubar, Lynn
M. Martin and Richard C. Notebaert.
(c) Shareowners ratified the appointment of Arthur Andersen & Co., as
independent public accountants, to examine the consolidated
financial statements of the Company for the current year ending
December 31, 1994. The vote was 439,002,173 shares FOR and
6,494,124 shares AGAINST, with 4,394,836 shares abstaining.
A proposal by a shareowner to provide for cumulative voting in the
election of Directors was disapproved. A total of 82,370,841
shares were voted FOR the proposal, 322,601,438 shares were voted
AGAINST, 11,090,483 shares abstained and 33,828,371 broker
non-votes were recorded.
A proposal by a shareowner to provide for the election of Directors
annually was disapproved. A total of 100,531,910 shares were voted
FOR the proposal, 305,367,843 shares were voted AGAINST, 10,163,009
shares abstained and 33,828,371 broker non-votes were recorded.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
12 Computation of ratio of earnings to fixed charges for the
three months ended March 31, 1994 and March 31, 1993.
(b) Reports on Form 8-K:
Form 8-K dated April 29, 1994, was filed on April 29, 1994, under
Item 7, Financial Statements and Exhibits, to file copies of the
Underwriting Agreement and Pricing Agreement, both dated April 25,
1994 and executed in connection with an offering of floating rate
notes by Ameritech Capital Funding Corporation (ACF), a wholly
owned subsidiary of Ameritech, together with the forms of Officers'
Certificate and notes.
Form 8-K dated May 5, 1994, was filed on May 11, 1994, under
Item 7, Financial Statements and Exhibits, to file copies of the
Underwriting Agreement, dated April 25, 1994, and Pricing
Agreement, dated May 5, 1994, executed in connection with an
offering of floating rate notes by ACF, together with the forms of
Officers' Certificate and notes.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Ameritech Corporation
Date: May 12, 1994 By /s/ Betty F. Elliott
------------------------------
Betty F. Elliott
Vice President and Comptroller
(Principal Accounting Officer)
<PAGE>
<PAGE>
Exhibit 12
AMERITECH CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
Three Months Ended
March 31
1994 1993
EARNINGS
Income before interest and income taxes $173.8 $574.7
Portion of rent expense representing
interest expense 16.0 15.9
Michigan Single Business tax 7.4 6.9
------ ------
Total earnings $197.2 $597.5
------ ------
FIXED CHARGES
Interest expense $105.2 $119.5
Portion of rent expense representing
interest expense 16.0 15.9
------ ------
Total fixed charges $121.2 $135.4
------ ------
Ratio of earnings to fixed charges 1.63 4.41
==== ====
(1) The results for the first quarter of 1994 reflect a $530 million
pretax charge for work force restructuring (see MD&A discussion of
this charge). This charge will be funded primarily from the Ameritech
Pension Plan.
(2) Earnings have not been adjusted to reflect the timing of dividends
received and equity in earnings of unconsolidated affiliates as the
effect on an annual basis has been insignificant.
