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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 15, 1996
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 the
third quarter of 1996, reporting double-digit increases in
revenues, earnings and earnings per share, excluding one-time
gains in 1995.
Third quarter earnings increased 11.9% to $519 million, up
from $464 million in the third quarter of 1995, before one-time
gains in 1995. The results marked Ameritech's 12th consecutive
quarter of double-digit earnings growth before one-time items.
Earnings per share grew 11.9% to 94 cents per share, up from 84
cents a year earlier, before one-time gains. International
investments drove more than one-third of Ameritech's earnings
growth in the third quarter of 1996, led by investments in
Belgacom of Belgium, Matav of Hungary and Telecom New Zealand.
Third quarter revenues rose 10.1% to $3.7 billion, up from
$3.4 billion in the third quarter of 1995. compared with the
year-ago quarter, the core communications business generated
solid growth as:
Access lines increased to 3.7% or 706,000 to 19.6 million
lines
Cellular customers increased 37% or 619,000 to 2.3 million
customers
Paging customers increased 45% or 325,000 to 1.05 million
customers
Network minutes of use increased 7.5%
Reported net income for the third quarter of 1996 was $519
million, up from $512 million in the year-earlier quarter.
Reported earnings per share were 94 cents, up from 92 cents. In
the third quarter of 1995, Ameritech recorded a $10 million
pretax gain ($7 million after-tax or 1 cent per share) related
to net settlement gains associated with lump-sum pension
payments from the pension plan to former employees, plus a $66
million pretax gain ($41 million after-tax or 7 cents per
share) resulting from the exchange of minority interests in
certain cellular partnerships.
For the first nine months of 1996, Ameritech revenues grew
11.5% to $11.0 billion, up from $9.9 billion in the first nine
months of 1995. Income before one-time items rose 12.8% to $1.6
billion, up from $1.4 billion in the first nine months of 1995.
Earnings per share for the first nine months of 1996 totaled
$2.83 before one-time items, an increase of 12.8% from $2.51 a
year earlier. In 1995, Ameritech recorded a $266 million pretax
gain ($167 million after-tax or 30 cents per share) related to
net settlement gains associated with lump-sum pension payments
from the pension plan to former employees, plus a $66 million
pretax gain ($41 million after-tax or 7 cents a share) from the
exchange of minority interests in certain cellular
partnerships.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Three Months Ended
September 30
%
1996 (1) 1995 (1) Change
(Unaudited) (Unaudited)
Revenues $3,722 $3,381 10.1%
Operating expenses (2) 2,849 2,578 10.5%
Operating income 873 803 8.7%
Other income, net (2) 74 112 (33.9)%
Interest expense 130 119 9.2%
Income before income taxes 817 796 2.6%
Income taxes 298 284 4.9%
Net income $ 519 $ 512 1.4%
Average common shares
Outstanding (000) 549,830 554,513 (0.8)%
Earnings per common share (1) $0.94 $0.92 2.2%
Dividends declared per
common share $0.53 $0.50 6.0%
(1) Income before one-time items rose 11.9 percent to $519
million from $464 million in the third quarter of 1995.
Earnings per share before one-time items grew 11.9 percent to
$0.94 per share, up from $0.84 per share in the third quarter
of 1995. See note (2) for details of the one-time items
reflected in 1995.
(2) 1995 results include a $10 million pretax gain ($7 million
after-tax or $0.01 per share) related to net settlement gains
associated with lump-sum pension payments from the
pension plan to former employees. 1995 results also include
a $66 million pretax gain ($41 million after-tax or $0.07 per
share) resulting from the exchange of minority interests in
certain cellular partnerships.
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CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Nine Months Ended
September 30
%
1996 (1) 1995 (1) Change
(Unaudited) (Unaudited)
Revenues $11,033 $9,896 11.5%
Operating expenses (2) 8,392 7,245 15.8%
Operating income 2,641 2,651 (0.4)%
Other income, net (2) 198 181 9.4%
Interest expense 382 356 7.3%
Income before income taxes 2,457 2,476 (0.8)%
Income taxes 893 881 1.4%
Net income $ 1,564 $1,595 (1.9)%
Earnings per common share (1) $2.83 $2.88 (1.7)%
Average common shares
outstanding (000) 552,575 553,509 (0.2)%
Dividends declared per
common share $1.59 $1.50 6.0%
(1) Income before one-time items rose 12.8 percent to $1,564
million from $1,387 million in the first nine months of 1995.
Earnings per share before one-time items grew 12.8 percent to
$2.83 per share, up from $2.51 per share in the first nine
months of 1995. See note (2) for details of the one-time
items reflected in 1995.
(2) 1995 results include a $266 million pretax gain ($167 million
after-tax or $0.30 per share) related to net settlement gains
associated with lump-sum pension payments from the pension
plan to former employees. 1995 results also include a $66
million pretax gain ($41 million after-tax or $0.07 per
share) resulting from the exchange of minority interests in
certain cellular partnerships.
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
Change
from
Sept. 30 Dec. 31 Dec. 31
1996 1995 1995
ASSETS (Unaudited)
Current assets $ 3,903 $ 3,452 $ 451
Property, plant and equipment 13,273 13,457 (184)
Investments,
primarily international 2,362 1,497 865
Other assets and
deferred charges 3,896 3,536 360
Total assets $23,434 $21,942 $1,492
LIABILITIES AND SHAREOWNERS' EQUITY
Debt maturing within one year $ 3,650 $ 2,138 $1,512
Other current liabilities 3,395 3,623 (228)
Long-term debt 4,309 4,513 (204)
Deferred credits and
other long-term liabilities 4,658 4,653 5
Shareowners' equity 7,422 7,015 407
Total liabilities and
shareowners' equity $23,434 $21,942 $1,492
SELECTED FINANCIAL AND OPERATING DATA
(Unaudited)
(Dollars in millions)
Sept. 30 Sept. 30 %
1996 1995 Change
Debt ratio 51.7% 47.7% 8.4%
Customer lines (000's) 19,552 18,846 3.7%
Employees 65,790 62,252 5.7%
Telephone company employees 50,712 50,991 (0.5)%
Customer lines per telephone
company employee 386 370 4.3%
Return on average
equity - annualized Qtr. 27.8% 29.5% (5.8)%
YTD 28.2% 31.7% (11.0)%
Return on average total
capital - annualized Qtr. 16.5% 18.4% (10.3)%
YTD 16.9% 19.4% (12.9)%
Construction activity Qtr. $657 $564 16.5%
YTD $1,679 $1,369 22.6%
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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 15, 1996
AMERITECH CORPORATION
By /s/ Bruce B. Howat
Bruce B. Howat
Secretary
