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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 16, 1995
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
Double-digit profit growth continued for the eighth
consecutive quarter at Ameritech, as income rose 10.8% to $464.3
million in the third quarter of 1995 from $419.1 million in the
third quarter of 1994, before one-time items in both quarters.
Earnings per share increased 10.5% to 84 cents in the third
quarter of 1995 from 76 cents in the third quarter of 1994,
before one-time items in both quarters. Aggressive marketing and
continued cost control contributed to the quarter's results.
Revenues grew 6.7% to $3.4 billion, up from $3.2 billion in
the third quarter of 1994. Unit growth in the core business was
fueled by:
- - a record 4.4% rise in access lines, up to more than 18.8
million;
- - a 47% increase in cellular customers, up to 1,673,000 over the
past year; and
- - growth of 8.7% in network access minutes of use.
Ameritech completed the acquisition of National Guardian in
early October. Taken together with the December 1994 acquisition
of SecurityLink, National Guardian makes Ameritech a key player
in the $11.2 billion security monitoring industry, serving
319,000 customers. The number of U.S. homes with security systems
is expected to double from 15% to 30% by the year 2000.
Including one-time items in both quarters, net income rose
to $512.5 million in the third quarter of 1995, up from $250.9
million in the third quarter of 1994. Reported earnings per
share rose to 92 cents in the third quarter of 1995 from 46 cents
in the third quarter of 1994. The third quarter of 1995 includes
net pretax gains from one-time items including $10.0 million
($6.9 million after taxes, or 1 cent per share) from net
settlement gains related to lump-sum pension payments to former
employees, and $65.8 million ($41.3 million after taxes or 7
cents a share) from Ameritech's swap of certain minority cellular
interests. The third quarter of 1994 included a $270.1 million
pretax charge ($168.2 million after taxes or 30 cents per share)
for work force restructuring.
For the first nine months of 1995, Ameritech revenues rose
5.4% to $9.9 billion, up from $9.4 billion in the first nine
months of 1994. Excluding one-time events, income for the first
nine months of 1995 rose 11.6% to $1,386.6 million from $1,242.3
million a year ago. One-time events excluded in this calculation
of income were a 1995 gain of $167 million after taxes from
settlement gains, a 1995 gain of $41.3 million after taxes on the
cellular swap, and a 1994 charge of $501 million after taxes for
work force restructuring. Reported net income was $1,594.9
million in the first nine months of 1995, compared with $741.3
million in the first nine months of 1994.
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Before one-time events, earnings per share for the first
nine months of 1995 grew 11.1% to $2.51 from $2.26 in the first
nine months of 1994. Including one-time events, reported
earnings per share were $2.88 in the first nine months of 1995,
compared with $1.35 in the first nine months of 1994.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Three Months Ended
September 30 Percent
1995 (1) 1994 (1) Change
--------- --------- -------
(Unaudited) (Unaudited)
Revenues $3,381.4 $3,170.0 6.7
Operating expenses (2) (3) 2,578.7 2,737.6 (5.8)
-------- --------
Operating income 802.7 432.4 85.6
Other income, net (2) (112.4) (41.4) 171.5
Interest expense 119.0 113.6 4.8
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Income before income taxes 796.1 360.2 121.0
Income taxes 283.6 109.3 159.5
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Net income $ 512.5 $ 250.9 104.3
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Average common shares
outstanding (000) 554,513 549,893 0.8
Earnings per common share $0.92 $0.46 100.0
Dividends declared per
common share $0.50 $0.48 4.2
(1) Income before one-time items rose 10.8 percent to $464.3
million from $419.1 million in the third quarter 1994. Earnings
per share before one-time items grew 10.5 percent to $0.84 per
share, up from $0.76 per share in the third quarter of 1994. See
notes (2) and (3) for details of one-time items.
(2) Third quarter 1995 results include a $10.0 million pretax
net credit ($6.9 million after-tax or $0.01 per share) related to
net settlement gains associated with lump-sum pension payments
from the nonmanagement pension plan to former employees, related
to the work force restructuring program. Third quarter 1995
results also include a $65.8 million pretax gain ($41.3 million
after-tax or $0.07 per share) resulting from the swap of minority
interests in certain cellular partnerships inIndianapolis,
Cleveland and Rockford in exchange for cash and a minority
interest in the Ameritech Detroit/Flint cellular partnership.
This transaction was necessitated by Ameritech's successful bid
for the personal communications services (PCS) licenses in
Indianapolis and Cleveland.
(3) Third quarter 1994 results include a $270.1 million pretax
charge ($168.2 million after-tax or $0.30 per share) related to
work force restructuring.
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CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Nine Months Ended
September 30 Percent
1995 (1) 1994 (1) Change
--------- --------- -------
(Unaudited) (Unaudited)
Revenues $9,896.0 $9,388.3 5.4
Operating expenses (2) (3) 7,244.7 8,069.4 (10.2)
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Operating income 2,651.3 1,318.9 101.0
Other income, net (2) (181.0) (104.0) 74.0
Interest expense 356.2 323.3 10.2
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Income before income taxes 2,476.1 1,099.6 125.2
Income taxes 881.2 358.3 145.9
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Net income $1,594.9 $ 741.3 115.1
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Average common shares
outstanding (000) 553,509 548,634 0.9
Earnings per common share $2.88 $1.35 113.3
Dividends declared per
common share $1.50 $1.44 4.2
(1) Income before one-time items rose 11.6 percent to $1,386.6
million from $1,242.3 million in the first nine months of 1994.
Earnings per share before one-time items grew 11.1 percent to
$2.51 per share, up from $2.26 per share in the first nine months
of 1994. See notes (2) and (3) for details of one-time items.
(2) 1995 results include a $266.3 million pretax net credit
($167.0 million after-tax or $0.30 per share) related to net
settlement gains associated with lump-sum pension payments from
the nonmanagement pension plan to former employees, related to
the work force restructuring program. 1995 results also include a
$65.8 million pretax gain ($41.3 million after-tax or $0.07 per
share) resulting from the swap of minority interests in certain
cellular partnerships as previously discussed.
(3) 1994 results include an $800.1 million pretax charge ($501.0
million after-tax or $0.91 per share) related to work force
restructuring.
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
Change
from
Sept. 30 Dec. 31 Dec. 31
1995 1994 1994
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ASSETS (Unaudited)
- ------
Current assets $ 3,420.5 $ 2,890.6 $ 529.9
Property, plant and equipment 13,272.3 13,454.5 (182.2)
Investments, primarily international 1,172.0 1,197.0 (25.0)
Other assets and deferred charges 3,127.3 2,404.7 722.6
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Total assets $20,992.1 $19,946.8 $1,045.3
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LIABILITIES AND SHAREOWNERS' EQUITY
- -----------------------------------
Debt maturing within one year $ 1,806.4 $ 1,898.3 $(91.9)
Other current liabilities 3,181.0 3,257.8 (76.8)
Long-term debt 4,547.1 4,447.9 99.2
Deferred credits and
other long-term liabilities 4,498.7 4,287.7 211.0
Shareowners' equity 6,958.9 6,055.1 903.8
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Total liabilities and
shareowners' equity $20,992.1 $19,946.8 $1,045.3
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SELECTED FINANCIAL AND OPERATING DATA
(Unaudited)
(Dollars in millions)
Sept. 30 Sept. 30 Percent
1995 1994 Change
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Debt ratio 47.7% 44.8% n/m
Customer lines (000's) 18,846 18,054 4.4
Employees 62,252 65,146 (4.4)
Telephone company employees 50,991 56,043 (9.0)
Customer lines per telephone
company employee 370 322 14.9
Return on average
equity - annualized Qtr. 29.5% 18.4% 60.3
YTD 31.7% 14.3% n/m
Return on average total
capital - annualized Qtr. 18.4% 12.6% 46.0
YTD 19.4% 10.2% n/m
Construction activity Qtr. $563.6 $448.6 25.6
YTD $1,368.7 $1,342.8 1.9
n/m - not meaningful
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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 16, 1995 AMERITECH CORPORATION
By _____________________
Bruce B. Howat
Secretary
