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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): July 20, 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
July 20, 1999 announcing the earnings for the second quarter ended June 30,
1999.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits.
99 Press Release, dated July 20, 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: July 20, 1999
Ameritech Corporation
By: /s/Barbara A. Klein
Barbara A. Klein
Vice President and Comptroller
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Exhibit 99
News Release
30 South Wacker Drive
Suite 3400
[Ameritech logo] Chicago, IL 60606
www.ameritech.com
For further information, contact:
Jerrell Ross, Ameritech, 312 750-5265
[email protected]
George Stenitzer, Ameritech, 312 609-6166
[email protected]
FOR IMMEDIATE RELEASE: Tuesday, July 20, 1999
Ameritech Earnings Grow 20.9 Percent in Second Quarter,
Earnings Per Share up 20.6 Percent to $0.76
Revenues Advance 12.0 Percent, Led by Strong Gains in Data
Services
CHICAGO - Ameritech (NYSE: AIT) today reported its best-
ever quarterly earnings growth, driven by rapid expansion in
data services and continued strong contributions from its
extensive international partnerships. The results marked
Ameritech's 23rd consecutive quarter of double-digit profit
growth before one-time items.
Second-quarter earnings grew 20.9 percent to $840
million, up from $695 million a year ago, before one-time
items, and earnings per share advanced 20.6 percent to $0.76,
up from $0.63. Revenues climbed 12.0 percent to a record
$4.80 billion, up from $4.29 billion
in the second quarter of 1998.
"We're moving toward completion of our merger with SBC
Communications with outstanding momentum," said Richard C.
Notebaert, Ameritech chairman and chief executive officer.
"Revenues from data services advanced 71 percent, representing
more than half of the quarter's total revenue growth. Our
international partnerships continue to deliver strong double-
digit earnings growth. And our major strategic initiatives,
including our recently completed 20-percent equity partnership
in Bell Canada, have substantially expanded our growth platform
for the future."
Ameritech's second-quarter results included the following
highlights:
- 55 percent growth in ISDN channels and 37 percent
growth in high-capacity circuits.
- 17 percent growth in sales of residential call
management services, such as Caller ID, Call Waiting and
Voice Messaging.
- 15 percent increase in total voice channel equivalents
to 38.5 million, driven by rapid growth in high-capacity
connections. Business voice channel equivalents grew 25
percent.
- 8 percent growth in U.S. cellular customers to 3.7
million. Second-quarter operating cash flow from U.S.
wireless businesses increased more than 30 percent.
- 10 percent growth in security customers to 1.2 million.
Ameritech provides security services in all 50 states and
Canada, and in 92 of the top 100 U.S. markets.
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Strong results from Ameritech's international partnerships
also contributed to second-quarter growth. Earnings from
international investments nearly doubled compared with the
second-quarter a year ago and represented more than 10 percent
of Ameritech's record earnings growth. Ameritech has interests
in communications companies in 16 countries beyond the United
States - a portfolio with a current value of approximately $13
billion. Ameritech is the largest non-European investor in
European communications providers, with major strategic
partnerships in the national communications companies Belgacom
of Belgium, Tele Danmark of Denmark and MatAv of Hungary.
In the second quarter, Ameritech invested $3.4 billion
for a 20 percent equity partnership in Bell Canada, Canada's
largest telecommunications company. Bell Canada provides a
full range of communications services through 12.6 million
phone lines and serves more than 1.5 million cellular and PCS
customers in markets that cover a total population of nearly
20 million.
On June 29, 1999, Ameritech, SBC Communications Inc. and
the staff of the Federal Communications Commission announced
that they had reached agreement on a sweeping set of proposed
conditions for approval of Ameritech's planned merger with
SBC. Pending final regulatory approvals, on close of the
transaction Ameritech shareowners will receive 1.316 shares of
SBC common stock for each share of Ameritech common stock.
Second-quarter 1999 net income included an after-tax
charge of $21 million or $0.02 per share for costs associated
with Ameritech's investment in Bell Canada, primarily a
currency-related fair-value adjustment. Including this
charge, second-quarter earnings per share were $0.74, and net
income was $819 million. During the second quarter of 1998,
Ameritech completed a global offering of substantially all of
its 24.95 percent stake in Telecom Corporation of New Zealand
Limited. The sale resulted in an after-tax gain to Ameritech
of $1.0 billion or $0.91 per share. Including this gain,
second-quarter 1998 earnings per share were $1.54, and net
income was $1,707 million.
Also in the second quarter, Ameritech implemented an
accounting change, retroactive to the beginning of this year,
to recognize directory revenues at the time of publication
rather than as billed over the duration of the directory. The
cumulative effect of this change is an after-tax gain of $207
million or $0.19 per share included in restated first-quarter
results. Beyond this one-time gain, the accounting change did
not have a material impact on operating results in the first
half of 1999.
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, directories, paging, security,
cable TV, Internet and more. One of the world's 100 largest
companies, Ameritech (www.ameritech.com) has 70,000 employees,
1 million shareowners and $33 billion in assets.
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Ameritech Corporation
Financial Summary - Quarter Ended June 30
(Dollars in millions, except per share amounts)
(Unaudited)
Second Quarter Results
Percent
Before One-time Items 1999 1998 Change
Operating revenues $4,802 $4,289 12.0 %
Operating expenses 3,426 3,125 9.6 %
Net income 840 695 20.9 %
Diluted earnings per share 0.76 0.63 20.6 %
As Reported
Operating revenues $4,802 $4,289 12.0 %
Operating expenses 3,426 3,125 9.6 %
Net income 819 1,707 (52.0)%
Diluted earnings per share 0.74 1.54 (51.9)%
Average common shares
outstanding (000) 1,099,081 1,101,153 (0.2)%
Average common shares
outstanding with dilution 1,112,127 1,110,257 0.2 %
(000)
Second Quarter 1999 One-time Items
Results for the second quarter ended June 30, 1999 were impacted
by a pretax charge of $27 million ($21 million after-tax, or
$0.02 per share), for costs associated with our Bell Canada
investment, primarily a currency-related fair-value adjustment.
Also in the second quarter, we implemented an accounting change,
retroactive to the beginning of the year, to recognize directory
revenues at the time of publication rather than as billed over
the duration of the directory. The cumulative effect of this
change is an after-tax gain of $207 million or $0.19 per share
and is included in restated first-quarter results. Other than
this gain, the change did not have a material impact on operating
results in the first or second quarter of 1999.
Second Quarter 1998 One-time Items
Results of the second quarter ended June 30, 1998 included a one-
time pretax gain of $1,543 million ($1,012 million after-tax, or
$0.91 per share) resulting from the public sale of substantially
all of our stake in Telecom Corporation of New Zealand Limited
(TCNZ).
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Ameritech Corporation
Financial Summary - Six Months Ended June 30
(Dollars in millions, except per share amounts)
(Unaudited)
Year-to-date Results
(includes 1999 restatement in first quarter for directory
accounting change)
Percent
Before One-time Items 1999 1998 Change
Operating revenues $9,232 $8,422 9.6 %
Operating expenses 6,702 6,353 5.5 %
Net income 1,527 1,286 18.7 %
Diluted earnings per share 1.37 1.16 18.1 %
As Reported
Operating revenues $9,232 $8,422 9.6 %
Operating expenses 6,702 6,353 5.5 %
Net income 1,740 2,200 (20.9)%
Diluted earnings per share 1.57 1.98 (20.7)%
Average common shares
outstanding (000) 1,099,073 1,100,405 (0.1)%
Average common shares
outstanding with dilution 1,111,682 1,109,349 0.2 %
(000)
Year-to-date 1999 One-time Items
Results for the six months ended June 30, 1999 were impacted by:
- - a pretax credit of $44 million ($27 million after-tax, or
$0.03 per share) related to a reduction of our 1998 accrual
for restructuring determined to be no longer needed;
- - a pretax charge of $27 million ($21 million after-tax, or
$0.02 per share) for costs associated with our Bell Canada
investment, primarily a currency-related fair-value adjustment;
and,
- - an after-tax gain of $207 million, or $0.19 per share
related to the cumulative effect of the directory publishing
accounting change previously discussed.
Year-to-date 1998 One-time Items
Results for the six months ended June 30, 1998 were impacted by:
- - a pretax gain of $1,543 million ($1,012 million after-tax,
or $0.91 per share) from the sale of substantially all of our
shares in TCNZ;
- - a pretax charge of $104 million ($64 million after-tax, or
$0.06 per share) for restructuring related to a cost
containment program announced in March 1998; and,
- - a pretax charge of $54 million ($34 million after-tax, or
$0.03 per share), for a currency-related fair-value adjustment
related to our Tele Danmark investment completed in January
1998.
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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 June 30, 1999 and 1998 or
for the quarters then ended:
1999 1998
Total assets $33,243 $29,045
Long-term debt $6,157 $7,013
Dividends per common share $0.635 $0.600
Book value per common share $10.44 $9.14
Voice channel equivalents 38,496 33,304
Network access lines (000s) 21,174 20,746 #
# - restated to eliminate access lines sold to Century Telephone
Enterprises, Inc. in
November 1998.
