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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 14, 1997
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 today reported record third-quarter profits, its 16th
consecutive quarter of double-digit earnings growth before one-time items.
Earnings per share grew 11.7% to $1.05 in the third quarter before a
one-time gain, compared with 94 cents in the third quarter of 1996.
Earnings before the gain increased 11.0% to $576 million, from $519 million
in the third quarter a year ago. Third-quarter revenues rose 7.6% to $4.01
billion, compared with $3.72 billion in the third quarter of 1996.
During the third quarter of 1997, Ameritech realized a one-time after-
tax gain of $37 million or 7 cents per share from the sale of its stake in
Sky Network Television Limited of New Zealand. Including the gain,
reported earnings per share in the third quarter were up 19.1% to $1.12 per
share, and reported net income was up 18.1% to $613 million.
Ameritech's third-quarter growth included:
30% annual growth in cellular customers to 3.0 million.
34% annual increase in paging customers to 1.4 million.
3.3% annual increase in access lines to 20.2 million.
11.6% annual growth in network access minutes of use.
43% annual increase in security monitoring customers to 578,000.
During the past three months, Ameritech made significant progress in
furthering its growth strategies. Highlights include:
Expanded in the high-growth security monitoring business by acquiring
in early October the security monitoring assets of Republic Industries,
Inc. and Rollins, Inc. With these transactions, SecurityLink from
Ameritech now has about one million customers and a presence in 92 of the
United States' 100 largest metropolitan areas.
Continued expansion of americast[TM] enhanced cable television
service. Ameritech now has 53 franchise agreements with communities
covering more than 2.2 million people and offers its enhanced cable TV
service in 32 communities in Illinois, Michigan and Ohio. Ameritech is
winning more than one out of every three cable TV households where its
service has been marketed.
Increased its cellular capabilities through an acquisition that will
double its number of owned retail stores in the Chicago metro area and
through launch of ClearPath[SM] digital cellular service in Chicago and
Detroit, Ameritech's two largest markets. ClearPath increases network
capacity and gives customers a host of new benefits including improved call
clarity, longer talk time and added calling features such as Caller ID and
voice mail.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Three Months Ended
September 30 %
1997(1) 1996(1) Change
(Unaudited) (Unaudited)
Revenues $4,006 $3,722 7.6%
Operating expenses 3,044 2,849 6.9%
Operating income 962 873 10.1%
Other income, net (2) 127 74 71.6%
Interest expense 123 130 (5.4)%
Income before income taxes 966 817 18.2%
Income taxes 353 298 18.5%
Net income $ 613 $ 519 18.1%
Average common shares
Outstanding (000) 549,035 549,830 (0.1)%
Earnings per common share $1.12 $0.94 19.1%
Dividends declared per
common share $0.565 $0.530 6.6%
(1) Income before one-time items rose 11.0 percent to $576 million from
$519 million in the third quarter of 1996. Earnings per share before
one-time items grew 11.7 percent to $1.05 per share, up from $0.94 per
share in the third quarter of 1996. See note (2) for details of the
one-time item reflected in 1997.
(2) 1997 results include a $52 million pretax gain ($37 million after-tax
or $0.07 per share) resulting from the sale of our 12.5 percent
interest in Sky Network Television of New Zealand.
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CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except per share amounts)
Nine Months Ended
September 30 %
1997 (1) 1996 (1) Change
(Unaudited) (Unaudited)
Revenues $11,851 $11,033 7.4%
Operating expenses 8,936 8,392 6.5%
Operating income 2,915 2,641 10.4%
Other income, net (2) 178 198 (10.1)%
Interest expense 371 382 (2.9)%
Income before income taxes 2,722 2,457 10.8%
Income taxes 1,036 893 16.0%
Net income $ 1,686 $ 1,564 7.8%
Average common shares
outstanding (000) 549,840 552,575 (0.5)%
Earnings per common share $3.07 $2.83 8.5%
Dividends declared per
common share $1.695 $1.590 6.6%
(1) Income before one-time items rose 11.0 percent to $1,736 million from
$1,564 million in the first nine months of 1996. Earnings per share
before one-time items grew 11.7 percent to $3.16 per share, up from
$2.83 per share in the first nine months of 1996. See note (2) for
details of the one-time items reflected in 1997.
(2) 1997 results include an $87 million after-tax net charge ($0.16 per
share) related to our share of the costs of a work force restructuring
at Belgacom, the national communications company in Belgium. We are a
17.5 percent owner and strategic partner in Belgacom.
1997 results also include a $52 million pretax gain ($37 million after-
tax or $0.07 per share) resulting from the sale of our 12.5 percent
interest in Sky Network Television of New Zealand.
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
Change
from
Sept. 30 Sept. 30 Dec. 31
1997 1996 1996
ASSETS (Unaudited)
Current assets $ 4,525 $ 3,799 $ 726
Property, plant and equipment 13,586 13,507 79
Investments, primarily international 1,924 2,323 (399)
Other assets and deferred charges 4,531 4,078 453
Total assets $24,566 $23,707 $ 859
LIABILITIES AND SHAREOWNERS' EQUITY
Debt maturing within one year $ 3,583 $ 3,155 $ 428
Other current liabilities 3,853 3,677 176
Long-term debt 4,065 4,437 (372)
Deferred credits and
other long-term liabilities 5,067 4,751 316
Shareowners' equity 7,998 7,687 311
Total liabilities and
shareowners' equity $24,566 $23,707 $ 859
SELECTED FINANCIAL AND OPERATING DATA
(Unaudited)
(Dollars in millions)
Sept. 30 Sept. 30 %
1997 1996 Change
Debt ratio 48.9% 51.7% (5.4)%
Customer lines (000's) 20,204 19,552 3.3%
Employees 69,056 65,790 5.0%
Telephone company employees 50,603 50,712 (0.2)%
Customer lines per telephone
company employee 399 386 3.4%
Return on average
equity - annualized Qtr. 29.1% 27.8% 4.7%
YTD 28.7% 28.2% 1.8%
Return on average total
capital - annualized Qtr. 18.3% 16.5% 10.9%
YTD 17.8% 16.9% 5.3%
Construction activity Qtr. $652 $657 (0.8)%
YTD $1,829 $1,679 8.9%
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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 14, 1997
AMERITECH CORPORATION
By /s/ Bruce B. Howat
Bruce B. Howat
Secretary
