<PAGE>1
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, 1995
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 Number - (312) 750-5000
At April 28, 1995, 553,218,430 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 ___.
<PAGE>
<PAGE>2
Part I - Financial Information
The following consolidated 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
1995 1994
Revenues. . . . . . . . . . . . . . . . . . . $3,145.7 $3,033.9
-------- --------
Operating Expenses
Employee-related expenses . . . . . . . . . 880.3 878.8
Depreciation and amortization . . . . . . . 526.3 546.9
Other operating expenses. . . . . . . . . . 862.9 788.5
Restructuring (credit) charge . . . . . . . (256.3) 530.0
Taxes other than income taxes . . . . . . . 143.5 148.8
-------- --------
2,156.7 2,893.0
-------- --------
Operating income. . . . . . . . . . . . . . . 989.0 140.9
Interest expense. . . . . . . . . . . . . . . 117.9 102.4
Other income, net . . . . . . . . . . . . . . (33.6) (30.1)
-------- --------
Income before income taxes. . . . . . . . . . 904.7 68.6
Income taxes. . . . . . . . . . . . . . . . . 325.8 24.8
-------- --------
Net income. . . . . . . . . . . . . . . . . . $ 578.9 $ 43.8
======== ========
Earnings per common share . . . . . . . . . . $1.05 $0.08
===== =====
Dividends declared per common share . . . . . $0.50 $0.48
===== =====
Average common shares outstanding (millions). 552.3 547.3
===== =====
See Notes to Consolidated Financial Statements.
<PAGE>
<PAGE>3
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
March 31, 1995 Dec. 31, 1994
(Unaudited) (Derived from
Audited
Financial
ASSETS Statements)
Current assets
Cash and temporary cash investments . . . . $ 111.0 $ 73.7
Receivables, net. . . . . . . . . . . . . . 2,128.0 2,300.0
Material and supplies . . . . . . . . . . . 189.7 203.7
Prepaid and other . . . . . . . . . . . . . 289.4 313.2
--------- ---------
2,718.1 2,890.6
--------- ---------
Property, plant and equipment . . . . . . . . 29,857.8 29,545.7
Less, accumulated depreciation. . . . . . . . 16,542.1 16,091.2
--------- ---------
13,315.7 13,454.5
--------- ---------
Investments, primarily international. . . . . 1,227.0 1,197.0
Other assets and deferred charges . . . . . . 2,751.8 2,404.7
--------- ---------
Total assets. . . . . . . . . . . . . . . . . $20,012.6 $19,946.8
========= =========
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Debt maturing within one year . . . . . . . $ 1,644.0 $ 1,898.3
Accounts payable. . . . . . . . . . . . . . 1,162.7 1,546.3
Other current liabilities . . . . . . . . . 1,853.8 1,711.5
--------- ---------
4,660.5 5,156.1
--------- ---------
Long-term debt. . . . . . . . . . . . . . . . 4,564.7 4,447.9
--------- ---------
Deferred credits and other long-term liabilities
Accumulated deferred income taxes . . . . . 621.6 611.0
Unamortized investment tax credits. . . . . 243.5 255.8
Postretirement benefits other than pensions 2,919.8 2,915.0
Other . . . . . . . . . . . . . . . . . . . 526.5 505.9
--------- ---------
4,311.4 4,287.7
--------- ---------
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 . . . . . . 5,542.2 5,520.9
Reinvested earnings . . . . . . . . . . . . 1,627.8 1,325.3
Treasury stock, at cost (34,781,000 shares
in 1995 and 36,150,000 shares in 1994) . . (941.1) (977.0)
Deferred compensation . . . . . . . . . . . (341.2) (396.0)
Currency translation adjustments. . . . . . (12.5) (15.9)
Other, net. . . . . . . . . . . . . . . . . 13.2 10.2
--------- ---------
6,476.0 6,055.1
--------- ---------
Total liabilities and shareowners' equity . . $20,012.6 $19,946.8
========= =========
See Notes to Consolidated Financial Statements.
<PAGE>
<PAGE>4
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
Three Months Ended
March 31
1995 1994
Cash Flows from Operating Activities
Net income. . . . . . . . . . . . . . . . . . . $578.9 $ 43.8
Restructuring (credit) charge, net of tax . . . (160.1) 332.8
Depreciation and amortization . . . . . . . . . 526.3 546.9
Deferred income taxes, net. . . . . . . . . . . 18.3 (8.3)
Investment tax credits, net . . . . . . . . . . (12.3) (13.3)
Interest during construction. . . . . . . . . . (2.8) (2.8)
Provision for uncollectibles. . . . . . . . . . 43.8 43.5
Change in accounts receivable . . . . . . . . . 128.7 (2.1)
Change in material and supplies . . . . . . . . 12.1 (18.6)
Change in certain other current assets. . . . . 23.4 7.0
Change in accounts payable. . . . . . . . . . . (383.6) (170.6)
Change in certain other current liabilities . . 43.1 85.3
Change in certain other noncurrent
assets and liabilities . . . . . . . . . . . . (75.0) (66.7)
Other . . . . . . . . . . . . . . . . . . . . . (24.7) (8.9)
------ ------
Net cash from operating activities. . . . . . . 716.1 768.0
------ ------
Cash Flows from Investing Activities
Capital expenditures. . . . . . . . . . . . . . (360.7) (409.6)
Additional investments. . . . . . . . . . . . . (6.5) (6.9)
Other investing activities, net . . . . . . . . (2.1) 71.3
------ ------
Net cash from investing activities. . . . . . . (369.3) (345.2)
------ ------
Cash Flows from Financing Activities
Net change in short-term debt . . . . . . . . . (80.3) 198.5
Issuance of long-term debt. . . . . . . . . . . -- 196.1
Retirement of long-term debt. . . . . . . . . . (10.7) (535.7)
Dividend payments . . . . . . . . . . . . . . . (275.7) (262.4)
Proceeds from issuance of treasury stock. . . . 56.2 51.7
Other financing activities, net . . . . . . . . 1.0 (7.7)
------ ------
Net cash from financing activities. . . . . . . (309.5) (359.5)
------ ------
Net increase in cash and
temporary cash investments . . . . . . . . . . 37.3 63.3
Cash and temporary cash investments,
beginning of period. . . . . . . . . . . . . . 73.7 155.9
------ ------
Cash and temporary cash investments,
end of period. . . . . . . . . . . . . . . . . $111.0 $219.2
====== ======
See Notes to Consolidated Financial Statements.
<PAGE>
<PAGE>5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
NOTE 1: Work Force Restructuring
During March 1994, Ameritech announced its plan to reduce its existing
nonmanagement work force. Approximately 11,500 employees are expected to
leave under this program. Under terms of agreements between Ameritech, the
Communications Workers of America (CWA) and the International Brotherhood
of Electrical Workers (IBEW), Ameritech implemented an enhancement to the
Ameritech Pension Plan by adding three years to both 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
business units are offering financial incentives under terms of the current
contracts with the CWA and IBEW to selected nonmanagement employees who
leave the business before the end of 1995. See additional discussion in
Management's Discussion and Analysis below.
As a result of this restructuring, a pretax charge of $530.0 million, or
$332.8 million after-tax, was recorded in the first quarter 1994. In the
first quarter 1995, a gain of $256.3 million, or $160.1 million after-tax,
was recorded resulting primarily from settlement gains from lump-sum
pension payments from the pension plan to former employees. The cumulative
gross program costs through March 31, 1995 totaled $1,080.0 million,
partially offset by settlement gains of $608.2 million for an aggregate
pretax net program cost of $471.8 million, or $295.7 million after-tax. At
March 31, 1995, the remaining severance accrual was $54.7 million.
As of March 31, 1995, approximately 9,400 employees have left the Company
as a result of this restructuring, with 2,100 to leave later in 1995.
NOTE 2: Discontinuation of FAS 71 and Reclassifications
As discussed more fully in the 1994 Annual Report to Shareowners and Annual
Report on Form 10-K, during the fourth quarter of 1994, Ameritech incurred
an extraordinary noncash after-tax charge of $2.2 billion as a result of
its decision to discontinue the application of Statement of Financial
Accounting Standards No. 71 (FAS 71), "Accounting for the Effects of
Certain Types of Regulation." FAS 71 was followed by the Company's five
landline telephone subsidiaries.
The principal component of the above charge related to a determination that
telephone plant asset lives were too long and analog switches were
obsolete. The net effect of this determination is causing 1995
depreciation expense in the landline telephone subsidiaries to decrease.
Long-term, depreciation expense will increase as the effects of shorter
lives on plant assets and future plant additions offset the discontinuation
of depreciation of analog switches.
<PAGE>
<PAGE>6
Certain additional financial statement impacts occur as a result of no
longer following FAS 71, including the provision for uncollectibles,
previously shown as a reduction in directory and other revenues, has been
reclassified to other operating expenses.
NOTE 3: Long-term Debt Issuance
Subsequent to March 31, 1995, Ameritech Capital Funding Corporation (ACF)
issued debentures totaling $192.2 million due April 1, 2005. The
debentures are noncallable and have a coupon rate of 7.5 percent. Proceeds
from the issuance were used to reduce short-term debt. The effect of this
transaction was considered when determining debt maturing within one year
and long-term debt in the March 31, 1995 consolidated balance sheet. This
issuance utilized the remaining capacity under a "shelf" registration
statement ACF had on file with the SEC.
<PAGE>
<PAGE>7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 vs.
THREE MONTHS ENDED MARCH 31, 1994
RESULTS OF OPERATIONS
For the three months ended March 31, 1995 net income was $578.9 million or
$1.05 per common share on 552.3 million average common shares outstanding.
Net income in the first quarter of 1994 was $43.8 million or $0.08 per
common share on 547.3 million average common shares outstanding.
Results in the first quarter of 1995 included an after-tax credit of $160.1
million or $0.29 per common share related to settlement gains associated
with lump-sum pension payments under the 1994 work force restructuring
program. Results in the first quarter of 1994 included an after-tax charge
of $332.8 million or $0.61 per common share related to work force
restructuring.
Excluding the above significant items in both years, net income would have
been $418.8 million in 1995 compared with $376.6 million in 1994, an
increase of 11.2 percent, and earnings per common share would have been
$0.76 and $0.69 per common share, respectively, an increase of 10.1
percent.
___________________________________________________________________________
Revenues
Total revenues for the three months ended March 31, 1995 increased 3.7
percent over the comparable prior year period to $3,145.7 million. The
increase was primarily attributable to higher network volumes due to access
line growth, as well as volume increases in cellular services due to
cellular subscriber growth. Rate reductions at the landline telephone
operations partially offset these increases.
___________________________________________________________________________
Local service
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $1,329.9 $1,307.9 $22.0 1.7
The increase in local service revenues in the first quarter of 1995 was
primarily attributable to higher network volumes which increased revenues
by $51.6 million. The increased network volumes resulted principally from
growth in the number of access lines at March 31, 1995, which increased 3.8
percent or 681,000 lines to 18,442,000 as compared to March 31, 1994, as
well as increased volumes and greater sales of special calling features,
such as Call Forwarding and Caller ID. This increase was partially offset
by net rate reductions of $30.5 million, primarily resulting from
regulatory proceedings in Illinois, Indiana and Ohio and legislation in
Wisconsin which adopted price regulation in place of rate-of-return
regulation and removed limits on intrastate earnings.
<PAGE>
<PAGE>8
Network access
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Interstate
Three Months Ended $562.1 $544.2 $17.9 3.3
Intrastate
Three Months Ended $137.0 $159.1 $(22.1) (13.9)
The increase in interstate network access revenues for the three months
ended March 31, 1995 was primarily due to higher network usage, which
resulted in additional revenues of $33.9 million, and a reduction in NECA
common line pool support payments of $13.4 million. Partially offsetting
these increases were net rate reductions of $24.0 million and certain
one-time billing revisions of $5.7 million. Minutes of use related to
interstate calls increased 5.7 percent in 1995. See additional discussion
below regarding Ameritech's interstate access price cap filing.
The decrease in intrastate network access revenues for the three months
ended March 31, 1995 was primarily due to rate reductions of $23.4 million,
approximately $14.5 million of which resulted from regulatory proceedings
in Illinois, Indiana and Ohio and legislation in Wisconsin which achieved
certain regulatory freedoms as previously discussed, as well as certain
one-time billing revisions of $3.5 million. Higher network usage resulted
in additional revenues of $7.3 million which partially offset these
decreases. Minutes of use related to intrastate calls increased 9.8
percent in 1995.
___________________________________________________________________________
Long distance service
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $350.3 $364.2 $(13.9) (3.8)
The decrease in long distance service revenues for the three months ended
March 31, 1995 was primarily attributable to volume decreases of $9.1
million and the impact of the Extended Community Calling plan in
Wisconsin, which reclassified portions of long distance usage to local
service usage and effectively lowered long distance revenues by $7.7
million. These decreases were partially offset by net rate increases of
$3.6 million.
<PAGE>
<PAGE>9
Directory and other
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $766.4 $658.5 $107.9 16.4
The increase in directory and other revenue for the three months ended
March 31, 1995 was primarily attributable to cellular and paging subscriber
growth of 50.9 percent and 23.6 percent, respectively. Also contributing
to the increase were price increases in nonregulated services, such as
inside wire maintenance in the landline telephone subsidiaries, and
increased telephone set sales and PBX and system sales in certain business
units. Revenues at the security monitoring services subsidiary, acquired
in December 1994, also contributed to the increase.
___________________________________________________________________________
Operating expenses
Total operating expenses for the three months ended March 31, 1995
decreased by $736.3 million or 25.5 percent to $2,156.7 million. The
decrease was almost entirely attributable to the work force restructuring,
which resulted in a credit of $256.3 million ($160.1 after-tax) in the
first quarter of 1995 related to the settlement gains previously discussed
compared with a first quarter 1994 charge of $530.0 million ($332.8 after-
tax).
___________________________________________________________________________
Employee-related expenses
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $880.3 $878.8 $1.5 0.2
The increase in employee-related expenses for the three months ended
March 31, 1995 was attributable primarily to the effect of higher wage
rates and overtime of $34.6 million at the landline telephone subsidiaries,
as well as increased employee benefits and employee-related expenses, such
as sales incentives and training, of $22.0 million. Partially offsetting
these increases were the effects of net work force reductions over the past
year of $47.2 million.
There were 62,094 employees at March 31, 1995, compared with 67,229 at
March 31, 1994. Work force reductions, primarily at the landline telephone
subsidiaries, have been partially offset by additional employees in other
business units, such as the cellular operation and security monitoring
services subsidiary.
<PAGE>
<PAGE>10
Depreciation and
amortization expense
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $526.3 $546.9 $(20.6) (3.8)
The decrease in depreciation and amortization expense for the three months
ended March 31, 1995 was primarily due to the cessation of depreciation of
analog switches at the landline telephone subsidiaries determined to be
obsolete in connection with the discontinuance of Statement of Financial
Accounting Standards No. 71 (FAS 71), "Accounting for the Effects of
Certain Types of Regulation," in the fourth quarter of 1994. This decrease
was partially offset by the change in depreciation rates as a result of
shortening telephone plant lives following the discontinuation of FAS 71,
as well as depreciation and amortization in the Company's other business
units.
___________________________________________________________________________
Other operating expenses
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $862.9 $788.5 $74.4 9.4
The increase in other operating expenses for the three months ended
March 31, 1995 was primarily attributable to increased contract and
professional services of $74.4 million, primarily for systems development
and process reengineering projects, advertising expenses of $22.0 million
resulting from increased marketing efforts and growth-related cost of sales
increases at the cellular operation. Also contributing to the increase
were increased cost of sales of $15.7 million related to telephone sets and
PBX and system sales. Partially offsetting these increases were reduced
access charges paid to independent telephone companies, primarily due to
renegotiated rates, as well as lower switching system software expense and
other totaling $43.7 million.
<PAGE>
<PAGE>11
Restructuring (credit) charge
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $(256.3) $530.0 $(786.3) n/a
As discussed in Note 1, the Company announced in March 1994 that it
intended to reduce its nonmanagement work force by 6,000 employees by the
end of 1995. Reduction of the work force results from implementation of
technological improvements, consolidations and initiatives to balance cost
structure with emerging competition. The Company now expects its
nonmanagement work force to be reduced by about 11,500 employees through
1995 instead of the 6,000 originally estimated in March 1994. A pretax
charge of $530.0 million ($332.8 million after-tax) related to the original
estimated work force reduction was recorded in the first quarter of 1994,
with additional charges recorded later in 1994. A net noncash settlement
gain of $256.3 million ($160.1 million after-tax) was recorded in the first
quarter of 1995 associated with lump-sum pension payments to former
employees. Future settlement gains (estimated at $70.0 million) are
anticipated.
Actual employee reductions by quarter were: 1,595 in the second quarter of
1994, 2,281 in the third quarter of 1994, 5,239 in the fourth quarter of
1994 and 313 in the first quarter of 1995. Estimates for the remainder of
1995 are 921 in the second quarter and 1,219 in the third quarter. Cash
requirements to fund the financial incentives (principally contractual
termination payments totaling approximately $239.7 million) are being met
as prescribed by applicable collective bargaining agreements. Certain of
these collective bargaining agreements require contractual termination
payments to be paid in a manner other than lump-sum, thus requiring cash
payments beyond an employee's termination date.
This program will reduce annual employee-related costs by approximately
$50,000 per departing employee. The projected savings may be partially
offset by the hiring of new employees with better matched skills to
accommodate growth, ensure high quality customer service and meet staffing
requirements for new business opportunities.
___________________________________________________________________________
Taxes other than income taxes
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $143.5 $148.8 $(5.3) (3.6)
The decrease in taxes other than income taxes for the three months ended
March 31, 1995 is primarily attributable to lower capital stock taxes in
Illinois. Also contributing to the decrease are lower sales taxes in Ohio
resulting from a change in the method of assessing this tax.
<PAGE>
<PAGE>12
Other Income and Expenses
Interest expense
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $117.9 $102.4 $15.5 15.1
The increase in interest expense for the three months ended March 31, 1995
was primarily due to the increase in short-term interest rates, partially
offset by lower average debt balances. Also contributing to the increase
are costs related to the corporate-owned life insurance program.
___________________________________________________________________________
Other income, net
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $(33.6) $(30.1) $3.5 n/a
Other income, net includes equity earnings in affiliates, interest income
and other nonoperating items. The change in other income, net results
primarily from increased equity earnings from Telecom Corporation of New
Zealand Limited, in which the Company owns a 24.8 percent interest.
___________________________________________________________________________
Income taxes
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $325.8 $24.8 $301.0 n/a
The increase in income taxes for the three months ended March 31, 1995 was
due primarily to the change in pretax income as a result of the work force
restructuring credit of $256.3 million (or $160.1 million after-tax) in the
first quarter of 1995 as compared to the work force restructuring charge of
$530.0 million ($332.8 million after-tax) in the first quarter of 1994.
Excluding these effects, income taxes increased in line with earnings in
the business.
<PAGE>
PAGE>13
FINANCIAL CONDITION
Capital expenditures
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $365.0 $437.5 $(72.5) (16.6)
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 1995
relates primarily to lower capital expenditures at the landline telephone
subsidiaries.
___________________________________________________________________________
Dividends declared
March 31 Increase Percent
(Dollars in Millions) 1995 1994 (Decrease) Change
Three Months Ended $276.4 $263.0 $13.4 5.1
On March 15, 1995, the Board of Directors declared a quarterly dividend of
$0.50 per common share, a 4.2 percent increase over the $0.48 per common
share declared in the same quarter in the prior year.
___________________________________________________________________________
Debt ratio
The debt ratio was 48.9 percent as of March 31, 1995, compared with 51.2
percent as of December 31, 1994. The decrease can be attributed primarily
to lower debt levels, as well as increased reinvested earnings due to the
after-tax net work force restructuring credit of $160.1 million.
See Note 3 for debt issued after March 31, 1995.
___________________________________________________________________________
Ratio of earnings to fixed charges
The ratio of earnings to fixed charges for the three months ended March 31
was 8.73 in 1995 and 1.63 in 1994. The ratio in 1995 was favorably
affected by a credit of $256.3 million for work force restructuring (see
prior discussion of this item). The ratio in 1994 was adversely affected
by a $530.0 million charge for work force restructuring. The work force
restructuring program has largely been funded by the Ameritech Pension
Plan. After adjustment to remove the effects of the work force
restructuring, the ratio is indicative of the Company's ability to meet its
debt funding requirements.
<PAGE>
<PAGE> 14
Interstate Access Price Cap Filing
On May 9, 1995 in its annual interstate access price cap filing, Ameritech
elected the 5.3 productivity factor with no earnings sharing as allowed
under the new price cap rules of the Federal Communications Commission
(FCC). That selection, together with other index changes required by the
FCC's rules, results in annual rate reductions to Ameritech's customers
totaling approximately $66.0 million effective August 1, 1995.
Ameritech filed a waiver request with the FCC to make an additional
downward adjustment of its indices that would have the effect of applying
the 5.3 productivity factor retroactively back to January 1, 1995. The
result would be an additional annual rate reduction for Ameritech's
customers of $26.5 million effective August 1, 1995. In return, Ameritech
would be relieved of all sharing obligations for the entire 1995 calendar
year.
<PAGE>
<PAGE>15
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The 1995 Annual Meeting of Shareowners was held on April 19, 1995.
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 463,755,034 or 83.924 percent of the
common shares of Ameritech outstanding on February 21, 1995, 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
Hanna Holborn Gray, Ph.D. 454,333,229 9,421,805
Arthur C. Martinez 454,373,050 9,381,984
John D. Ong 454,598,714 9,156,320
A. Barry Rand 454,586,022 9,169,012
James A. Unruh 454,492,131 9,262,903
The largest percentage of shares withheld from voting with respect
to any nominee for director was 2.032 percent. The terms of office
of the following Directors continued after the meeting: Richard H.
Brown, Donald C. Clark, Melvin R. Goodes, James A. Henderson,
Sheldon B. Lubar, Lynn M. Martin, John B. McCoy and Richard C.
Notebaert.
(c) Shareowners ratified the appointment of Arthur Andersen LLP, as
independent public accountants, to examine the consolidated
financial statements for the current year ending December 31, 1995.
The vote was 454,896,400 shares FOR and 5,039,626 shares AGAINST,
with 3,819,008 shares abstaining.
Shareowners also approved the Ameritech Management Committee Short
Term Incentive Plan. The vote was 396,894,389 shares FOR the
proposal, 56,983,107 shares were voted AGAINST, with 9,877,538
shares abstaining.
(d) A proposal by a shareowner to provide for cumulative voting in the
election of Directors was not approved. A total of 113,000,490
shares were voted FOR the proposal, 301,996,246 shares were voted
AGAINST, 12,346,167 shares abstained and 36,412,131 broker
non-votes were recorded.
A proposal by a shareowner to provide for the election of all
Directors annually was not approved. A total of 146,962,288 shares
were voted FOR the proposal, 268,350,718 shares were voted AGAINST,
12,029,897 shares abstained and 36,412,131 broker non-votes were
recorded.
<PAGE>
<PAGE>16
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, 1995 and March 31, 1994.
(b) Reports on Form 8-K:
On April 3, 1995, a Current Report on Form 8-K dated March 28,
1995, was filed under Item 7, Financial Statements and Exhibits, to
file copies of the Underwriting Agreement, Pricing Agreement, as
well as the forms of the Officers' Certificate and 7.5% Debentures,
all dated March 28, 1995.
On April 20, 1995, a Current Report on Form 8-K dated April 19,
1995, was filed under Item 5, Other Events, to report Ameritech's
earnings for the first quarter 1995.
<PAGE>
<PAGE>17
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 9, 1995 By /s/ Betty F. Elliott
Betty F. Elliott
Vice President and Comptroller
(Principal Accounting Officer)
<PAGE>
<PAGE>18
AMERITECH CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
Three Months Ended
March 31
1995 1994
EARNINGS
Income before interest and income taxes . . . $1,025.4 $173.8
Preferred dividends (4) . . . . . . . . . . . 2.3 --
Portion of rent expense representing
interest . . . . . . . . . . . . . . . . . . 15.6 16.0
Michigan Single Business tax. . . . . . . . . 9.0 7.4
-------- ------
Total earnings (1) (2) (3). . . . . . . . . . $1,052.3 $197.2
-------- ------
FIXED CHARGES
Interest cost . . . . . . . . . . . . . . . . $102.7 $105.2
Preferred dividends . . . . . . . . . . . . . 2.3 --
Portion of rent expense representing
interest expense . . . . . . . . . . . . . . 15.6 16.0
------ ------
Total fixed charges . . . . . . . . . . . . . $120.6 $121.2
------ ------
Ratio of earnings to fixed charges. . . . . . 8.73 1.63
==== ====
_______________
(1) The results for the first quarter of 1995 reflect a $256.3 million
pretax credit primarily from settlement gains resulting from lump-sum
pension payments from the pension plan to former employees associated
with the nonmanagement work force restructuring. Results for the
first quarter 1994 reflect a $530.0 million pretax charge associated
with the nonmanagement work force restructuring. Costs of the work
force restructuring program have largely been funded from the
Ameritech Pension Plan.
(2) Earnings are income before income taxes and fixed charges. Since the
Michigan Single Business Tax ("the Tax") and rental expense have been
deducted, the Tax and the one-third portion of rental expense
considered to be fixed charges are added back.
(3) 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.
(4) For purposes of above computation, the preferred stock dividend
requirement of a subsidiary has been increased to an amount
representing the pretax earnings which would be required to cover the
dividend requirements.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
AMERITECH CORPORATION'S MARCH 31, 1995 CONSOLIDATED FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 111,000
<SECURITIES> 0<F1>
<RECEIVABLES> 2,273,600
<ALLOWANCES> 145,600
<INVENTORY> 189,700
<CURRENT-ASSETS> 2,718,100
<PP&E> 29,857,800
<DEPRECIATION> 16,542,100
<TOTAL-ASSETS> 20,012,600
<CURRENT-LIABILITIES> 4,660,500
<BONDS> 4,564,700
<COMMON> 587,600
0
0
<OTHER-SE> 5,888,400
<TOTAL-LIABILITY-AND-EQUITY> 20,012,600
<SALES> 0<F2>
<TOTAL-REVENUES> 3,145,700
<CGS> 0<F3>
<TOTAL-COSTS> 2,156,700
<OTHER-EXPENSES> (33,600)
<LOSS-PROVISION> 43,800
<INTEREST-EXPENSE> 117,900
<INCOME-PRETAX> 904,700
<INCOME-TAX> 325,800
<INCOME-CONTINUING> 578,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 578,900
<EPS-PRIMARY> 1.05
<EPS-DILUTED> 1.05
<FN>
<F1>SECURITIES ARE NOT MATERIAL AND THEREFORE HAVE NOT BEEN STATED SEPARATELY
IN THE FINANCIAL STATEMENTS. THIS AMOUNT IS INCLUDED IN THE "CASH" TAG.
<F2>NET SALES OF TANGIBLE PRODUCTS IS NOT MORE THAN 10% OF TOTAL OPERATING
REVENUES AND THEREFORE HAS NOT BEEN STATED SEPARATELY IN THE FINANCIAL
STATEMENTS PURSUANT TO REGULATION S-X, RULE 5-03(B). THIS AMOUNT IS
INCLUDED IN THE "TOTAL REVENUES" TAG.
<F3>COST OF TANGIBLE GOODS SOLD IS INCLUDED IN COST OF SERVICE AND PRODUCTS
IN THE FINANCIAL STATEMENTS AND THE "TOTAL COST" TAG, PURSUANT TO
REGULATION S-X, RULE 5-03(B).
</FN>
</TABLE>
