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U. S. Securities And Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 21, 1999
Commission File Number 1-8612
Ameritech Corporation
a Delaware Corporation
30 South Wacker Drive
Chicago, Illinois 60606
I.R.S. Employer Identification Number 36-3251481
Telephone number (800)257-0902
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Item 5. Other Events
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Attached as an exhibit is a press release issued by Ameritech Corporation on
January 21, 1999 announcing the earnings for the fourth quarter and year ended
December 31, 1998.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits.
99 Press Release, dated January 21, 1999, issued by Ameritech
Corporation.
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Under the requirements of the Securities Exchange Act of 1934, an
authorized company official has signed this report on our behalf.
Dated: January 21, 1999
Ameritech Corporation
By: /s/ Oren G. Shaffer
Oren G. Shaffer
Executive Vice President and
Chief Financial Officer
<PAGE>1 Exhibit 99
[Ameritech logo]
For further information, contact:
Jerrell Ross, Ameritech, 312 750-5265
[email protected]
George Stenitzer, Ameritech, 312 609-6166
[email protected]
FOR IMMEDIATE RELEASE: Thursday, Jan. 21, 1999
Ameritech Earnings up 12.1 Percent in Fourth Quarter, 11.4
Percent for Year; Gains in Data Communications, European
Investments Drive Results
CHICAGO - Ameritech (NYSE: AIT) today reported record
fourth-quarter and full- year earnings, its 21st consecutive
quarter and sixth straight year of double-digit profit growth.
The gains were powered by rapid growth in data services and
continued strong contributions from the company's extensive
European portfolio.
Fourth-quarter earnings grew 12.1 percent to $684 million
before one-time items, compared with $610 million in the fourth
quarter of 1997, and earnings per share grew 10.9 percent to 61
cents, up from 55 cents a year ago. Revenues advanced 7.1
percent to $4.44 billion in the quarter, up from $4.15 billion
in the fourth quarter of 1997.
For the year, Ameritech's earnings grew 11.4 percent to
$2.61 billion before one-time items, up from $2.35 billion, and
earnings per share grew 10.8 percent to $2.35, up from $2.12 in
1997. Revenues advanced 7.2 percent in 1998 to $17.15 billion,
compared with $16.00 billion in 1997.
"Ameritech starts 1999 with outstanding momentum," said
Richard C. Notebaert, Ameritech chairman and chief executive officer.
"Customer demand is robust across the board, and we're setting a fast
pace in our industry's high-potential growth segments. Revenues from
data communications advanced to $1.7 billion and represented one-
third of our annual revenue growth. More than one-fourth of our
earnings growth came from progress at our European partnerships.
And in 1998, we recorded the best financial results in the
history of our U.S. wireless business. We continue to build an
exciting, full-service platform for the future."
Ameritech's results included the following highlights:
o 18 percent fourth-quarter growth in sales of call
management services such as Caller ID, Call Waiting and
Voice Messaging.
o 13 percent increase in total voice channel equivalents,
which includes 2.7 percent growth in switched access lines
to 21.0 million combined with rapid growth in high-capacity
connections.
o 58 percent growth in ISDN channels and 33 percent
growth in high-capacity circuits.
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o 35 percent annual growth in operating cash flow from cellular,
driven by 13 percent growth in customers to 3.6 million coupled
with sales channel improvements and productivity gains.
o 13 percent growth in security customers to 1.2 million.
Ameritech provides security services in all 50 states and
Canada and has a presence in 92 of the top 100 U.S. markets.
o Ameritech's European portfolio contributed more than
one-fourth of the company's earnings growth in both the
fourth quarter and for the full year.
With major strategic partnerships in the national
communications companies Belgacom of Belgium, Tele Danmark of
Denmark and MATAV of Hungary, Ameritech is the largest foreign
investor in European telecommunications. During 1998, the
estimated value of these investments increased 65 percent to
more than $10 billion.
Ameritech's 1998 achievements both in the United States
and in Europe contributed to its best-ever one-year total
return to shareowners: 61 percent. Total return equals
stock price appreciation plus reinvested dividends.
In December 1998, the shareowners of Ameritech and SBC
Communications Inc. overwhelmingly approved the companies'
agreement to merge, pending regulatory approvals. The
companies expect the merger to further accelerate growth.
Upon closing of the transaction, targeted for mid-1999,
Ameritech shareowners will receive 1.316 shares of SBC common
stock for each share of Ameritech common stock.
Ameritech's 1998 fourth-quarter results include a one-
time after-tax gain of $102 million or 9 cents per share from
the sale of 19 local phone exchanges in Wisconsin and a one-
time after-tax charge of $24 million or 2 cents per share for
charges associated with the early redemption of $1.3 billion
in long-term debt. With these items included, fourth-quarter
earnings were $762 million or 68 cents per share. Full-year
earnings with one-time items included were $3.61 billion or
$3.25 per share.
Ameritech (NYSE: AIT) serves millions of customers in
50 states and 40 countries. Ameritech provides a full range
of communications services including local and long-distance
telephone and data, cellular, paging, security, cable TV,
Internet and more. One of the world's 100 largest
companies, Ameritech (www.ameritech.com) has 70,500
employees, 1 million shareowners and more than $30 billion
in assets.
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Ameritech Corporation
Financial Summary - Quarter Ended December 31
(Dollars in millions, except per share amounts)
(Unaudited)
Fourth Quarter Results
Percent
Before One-time Items 1998 1997 Change
Operating revenues $4,442 $4,147 7.1%
Operating expenses 3,381 3,194 5.9%
Net income 684 610 12.1%
Diluted earnings per share 0.61 0.55 10.9%
As Reported
Operating revenues $4,442 $4,147 7.1%
Operating expenses 3,381 3,263 3.6%
Net income 762 610 24.9%
Diluted earnings per share 0.68 0.55 23.6%
Average common shares
outstanding (000) 1,102,510 1,095,800 0.6%
Average common shares
outstanding with dilution 1,114,028 1,103,008 1.0%
(000)
Fourth Quarter 1998 One-time Items
Net income before one-time items for the fourth quarter of
1998 excludes an after-tax gain of $102 million, or $0.09
per share, on the sale of certain telecommunications and
directory assets to Century Telephone Enterprises, Inc., as
well as an after-tax charge of $24 million, or $0.02 per
share, resulting from the early redemption of $1.3 billion
in long-term debt.
Fourth Quarter 1997 One-time Items
Normalized operating expenses for 1997 exclude a $69 million
pretax charge ($42 million after-tax or $0.04 per share)
related to an agreement to settle lawsuits related to our
inside wire maintenance services.
Net income before one-time items for 1997 also excludes
several one-time items. These items include an after-tax
gain of $25 million, or $0.02 per share, resulting from the
sale of our 14.3% interest in Bell Communications Research
(Bellcore), an after-tax gain of $27 million, or $0.03 per
share, resulting from the sale in an initial public offering
of a portion of our stake in MATAV, the telecommunications
provider in Hungary, and a $10 million after-tax charge, or
$0.01 per share, for a currency-related fair-value
adjustment related to our investment in Tele Danmark.
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Ameritech Corporation
Financial Summary - Year Ended December 31
(Dollars in millions, except per share amounts)
(Unaudited)
Annual Results
Percent
Before One-time Items 1998 1997 Change
Operating revenues $17,154 $15,998 7.2%
Operating expenses 12,857 12,130 6.0%
Net income 2,614 2,346 11.4%
Diluted earnings per share 2.35 2.12 10.8%
As Reported
Operating revenues $17,154 $15,998 7.2%
Operating expenses 12,961 12,199 6.2%
Net income 3,606 2,296 57.1%
Diluted earnings per share 3.25 2.08 56.3%
Average common shares
outstanding 1,101,573 1,098,702 0.3%
Average common shares
outstanding with dilution 1,110,892 1,104,077 0.6%
(000)
1998 One-time Items
Normalized operating expenses for 1998 exclude a $104
million pretax restructuring charge ($64 million after-tax
or $0.05 per share) related to the cost containment program
announced in March 1998.
Net income before one-time items for 1998 also excludes an
after-tax gain of $1.012 billion, or $0.91 per share,
resulting from the sale of substantially all of our shares
in Telecom Corporation of New Zealand, an after-tax gain of
$102 million, or $0.09 per share, from the sale of certain
telecommunications and directory assets to Century Telephone
Enterprises, Inc., as well as an after-tax charge of $34
million, or $0.03 per share, resulting from a currency-
related fair-value adjustment in connection with our Tele
Danmark investment and a $24 million charge, or $0.02 per
share, resulting from the early redemption of $1.3 billion
in long-term debt.
1997 One-time Items
Normalized operating expenses for 1997 exclude a $69 million
pretax charge ($42 million after-tax or $0.04 per share)
related to an agreement to settle lawsuits related to our
inside wire maintenance services.
Net income before one-time items excludes several additional
one-time items. These items include an after-tax charge of
$87 million, or $0.08 per share, resulting from our share of
a work force restructuring charge at Belgacom, the national
telecommunications provider in Belgium, an after-tax gain of
$37 million, or $0.04 per share, resulting from the sale of
our 12.5% interest in Sky Network Television of New Zealand,
an after-tax gain of $25 million, or $0.02 per share,
resulting from the sale of our 14.3% interest in Bell
Communications Research (Bellcore), an after-tax gain of $27
million, or $0.03 per share, resulting from the sale in an
initial public offering of a portion of our stake in MATAV,
the telecommunications provider in Hungary, and a $10
million after-tax charge, or $0.01 per share, for a currency-
related fair-value adjustment related to our investment in
Tele Danmark.
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Ameritech Corporation
Financial Summary
(Dollars in millions, except per share amounts)
(unaudited)
The following information supplements the overall reported
results of Ameritech Corporation as of December 31, 1998 and
1997 or for the years then ended:
1998 1997
Total assets $30,299 $25,339
Long-term debt $5,557 $4,610
Dividends per common share $1.2175 $1.1475
Book value per common share $9.92 $7.57
Network access lines (000s) 20,968 20,502 #
# - restated to standardize counting of voice channel
equivalents
