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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):
July 20, 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
Ameritech extended its record of double-digit growth in
profits and earnings per share in the second quarter of 1995.
Second-quarter profits grew 12.7% to $503.5 million, compared
with $446.6 million in the second quarter of 1994. Earnings per
share increased 12.3% to 91 cents per share, up from 81 cents
per share in the second quarter of 1994.
Ameritech revenues for the second quarter of 1995 grew
5.8% or $185 million to $3.37 billion, despite price reductions
of $50.7 million that resulted from Ameritech achieving price
regulation in its states. This strong growth was fueled by:
o Sustained cellular growth with a 50.5% increase in cellular
customers, up 525,000 to 1,564,000 customers, compared with the
second quarter of 1994.
o Solid 8.7% growth in network access minutes of use.
o Record access line growth of 4.2% to 18.6 million. Sales of
additional lines were particularly strong, representing more
than one-third of all lines sold in the quarter.
Successfully concluding a three-year effort, on Tuesday
Ameritech became the first regional company without regulatory
limits on earnings in any jurisdiction as a result of the
Federal Communications Commission's (FCC) approval of pure
price regulation for the company. Under price regulation, state
and federal regulators place limits on prices - rather than on
profits, as they once did under traditional rate-of return
regulation.
During the quarter, Ameritech made significant progress in
its plans to enter the long-distance and video businesses. In
comments from the industry, the U.S. District Court heard
unprecedented support for a U.S. Department of Justice
recommendation that would allow Ameritech to offer long
distance in the Chicago and Grand Rapids, Michigan, areas on a
trial basis. The Court is expected to rule on Ameritech's
proposed trial this fall, and Ameritech remains optimistic that
it will be allowed to offer long distance services in 1996.
Ameritech also completed its first cable TV franchise
agreements in suburban Detroit during June, enabling the
company to begin construction of its cable TV network, with
plans to begin offering services in early 1996.
For the first six months of 1995, Ameritech revenues rose
4.8% to $6.51 billion, up from $6.22 billion in the first half
of 1994. Income rose 12.0% to $922.3 million from $823.3
million, excluding one-time items. These items relate to
workforce restructuring and resulted in an after-tax charge in
the first quarter of 1994 of $332.8 million and an after-tax
gain in the first quarter of 1995 of $160.1 million from
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settlement gains associated with lump-sum payments from the
pension plan. Reported net income was $1.08 billion in the
first half of 1995, compared with $490.4 million in the first
half of 1994.
Earnings per share excluding one-time items grew 11.3% to
$1.67 in the first half of 1995. Reported earnings per share
were $1.96 in the first half of 1995, compared with 89 cents in
the first half of 1994.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Three Months Ended
June 30 %
1995 1994 Change
(Unaudited) (Unaudited)
Revenues $3,368.9 $3,184.4 5.8%
Operating expenses 2,509.3 2,438.8 2.9%
Operating income 859.6 745.6 15.3%
Other income, net (35.0) (32.5) 7.7%
Interest expense 119.3 107.3 11.2%
Income before income taxes 775.3 670.8 15.6%
Income taxes 271.8 224.2 21.2%
Net income $ 503.5 $ 446.6 12.7%
Average common shares
outstanding (000) 553,719 548,635 0.9%
Earnings per common share $0.91 $0.81 12.3%
Dividends declared per
common share $0.50 $0.48 4.2%
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CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Six Months Ended
June 30 %
1995 (1) 1994 (1) Change
(Unaudited)(Unaudited)
Revenues $6,514.6 $6,218.3 4.8%
Operating expenses (2) (3) 4,666.0 5,331.8 (12.5)%
Operating income 1,848.6 886.5 108.5%
Other income, net (68.6) (62.6) 9.6%
Interest expense 237.2 209.7 13.1%
Income before income taxes 1,680.0 739.4 127.2%
Income taxes 597.6 249.0 140.0%
Net income $1,082.4 $ 490.4 120.7%
Average common shares
outstanding (000) 552,998 547,995 0.9%
Earnings per common share $1.96 $0.89 120.2%
Dividends declared per
common share $1.00 $0.96 4.2%
(1)Income before one-time items rose 12.0 percent to $922.3
million from $823.2 million in the first quarter 1994.
Earnings per share before one-time items grew 11.3 percent
to $1.67 per share, up from $1.50 per share in the first
quarter of 1994. See notes (2) and (3) for details of one-
time items.
(2)1995 results include a $256.3 million pretax net credit
($160.1 after-tax or $0.29 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.
(3)1994 results include a $530.0 million pretax charge ($332.8
million after-tax or $0.61 per share) related to work force
restructuring.
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
Change
from
June 30 Dec. 31 Dec.31
1995 1994 1994
ASSETS (Unaudited)
Current assets $ 2,960.4 $ 2,890.6 $ 69.8
Property, plant and equipment 13,233.6 13,454.5 (220.9)
Investments, primarily international 1,209.4 1,197.0 12.4
Other assets and deferred charges 2,929.7 2,404.7 525.0
Total assets $20,333.1 $19,946.8 $386.3
LIABILITIES AND SHAREOWNERS' EQUITY
Debt maturing within one year $ 1,696.6 $ 1,898.3 $(201.7)
Other current liabilities 2,873.2 3,257.8 (384.6)
Long-term debt 4,571.7 4,447.9 123.8
Deferred credits and
other long-term liabilities 4,439.1 4,287.7 151.4
Shareowners' equity 6,752.5 6,055.1 697.4
Total liabilities and
shareowners' equity $20,333.1 $19,946.8 $ 386.3
SELECTED FINANCIAL AND OPERATING DATA
(Unaudited)
(Dollars in millions)
June 30 June 30 %
1995 1994 Change
Debt ratio 48.1% 45.8% n/m
Customer lines (000's) 18,618 17,875 4.2%
Employees 62,127 66,593 (6.7)%
Telephone company employees 51,856 57,924 (10.5)%
Customer lines per telephone
company employee 359 309 16.2%
Return on average
equity - annualized Qtr. 29.6% 22.2% 33.3%
YTD 32.9% 12.2% n/m
Return on average total
capital - annualized Qtr. 18.5% 14.4% 28.5%
YTD 19.8% 9.0% n/m
Construction activity Qtr. $440.1 $456.7 (3.6)%
YTD $805.1 $894.2 (10.0)%
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: July 20, 1995 AMERITECH CORPORATION
By /s/ Bruce B. Howat
Bruce B. Howat
Secretary
