SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-07155 (R.H. Donnelley Corporation)
001-08612 (Ameritech Corporation)
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
DonTech Profit Participation Plan, 200 E. Randolph Drive, Chicago, Illinois
60601
B. Name of issuers of the securities held pursuant to the plan and the address
of their principal executive offices:
R.H. Donnelley Corporation, One Manhattanville Road, Purchase, NY 10577,
and Ameritech Corporation, 30 South Wacker Drive, Chicago, Illinois 60606
REQUIRED INFORMATION
The required financial statements are attached to this report.
<PAGE>
THE DONTECH PROFIT PARTICIPATION PLAN
INDEX TO FORM 11-K
Page
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Accountants 3
Statement of Changes in Net Assets Available for
Benefits With Fund Information for the Year
Ended December 31, 1998 4
Statement of Net Assets Available for Benefits
With Fund Information as of December 31, 1998 5
Statement of Net Assets Available for Benefits
With Fund Information as of December 31, 1997 6
Notes to Financial Statements 7-14
Signatures 15
Exhibit 23 - Consent of Independent Accountants 16
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Employee Benefits Committee of The Board of Directors of
DonTech II:
In our opinion, the accompanying statements of net assets
available for benefits and the related statement of changes in
net assets available for benefits present fairly, in all
material respects, the net assets available for benefits of the
DonTech Profit Participation Plan (the `Plan') as of December
31, 1998 and 1997 and the changes in net assets available for
benefits for the year ended December 31, 1998 in conformity with
generally accepted accounting principles. These financial
statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing
standards, which require that we plan and perform the audits to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The fund
information in the statements of net assets available for plan
benefits and the statement of changes in net assets available
for benefits is presented for purposes of additional analysis
rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The
fund information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in
our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
New York, New York
May 28, 1999
<PAGE>
<TABLE>
<CAPTION>
DONTECH PROFIT PARTICIPATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
(Dollars in Thousands)
R.H.
Donne- Ameri- The BGI BGI BGI BGI
BGI lley tech D&B Special Balan- Mid & Int'l Par-
Equity Common Common Common Fixed ced Small Equity Lega- tic-
Total Index Stock Stock Stock Income Index Index Index cy pant
Plan Fund Fund Fund Fund Fund Fund Fund Fund Fund Loans
------ ----- ------- ------ ----- ------ ------ ----- ------ ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Allocated
income in
Master
Trust $ 6,770 $ 2,431 $ 136 $ 3,028 $(254) $ 958 $ 136 $(9) $ 29 $ 243 $72
Accrued
interest
receivable
from loans 6 3 1 1 - 1 - - - - -
Contributions received:
- - from
employer 752 280 53 64 11 167 28 46 32 71 -
- - from
part-
icipants 2,361 1,099 164 299 159 296 97 139 117 (9) -
Participant loan
repay-
ments (14) 150 26 52 23 95 12 8 7 3 (390)
Distributions to
partici-
pants (5,817) (1,468) (39) (342) (171) (3,486) (44) (33) (86) (82) (66)
Loans to
partici-
pants (57) (155) (26) (50) (50) (77) (8) (10) (16) (15) 350
Administrative
fees (20) (8) (1) (4) - (6) (1) - - - -
Transfer from other
Trustee 4,605 3,146 99 190 146 138 85 465 96 240 -
InterFund
transfers - (1,194) 2,243 3,824 (787) 1,444 375 (772) (284)(4,849) -
------------------------------------------------------------------------
Net increase/
(de-
crease) 8,586 4,284 2,656 7,062 (923) (470) 680 (166) (105)(4,398)(34)
Net assets available for
benefits as of
January 1,
1998 41,715 14,277 - 3,037 923 15,711 946 715 747 4,398 961
------------------------------------------------------------------------
Net assets available for
benefits as of
December 31,
1998 $50,301 $18,561 $2,656 $10,099 $- $15,241 $1,626 $549 $642 $ - $927
======================================================================
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
DONTECH PROFIT PARTICIPATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
R.H.
Donne- Ameri- The BGI BGI BGI BGI
BGI lley tech D&B Special Balan- Mid & Int'l Par-
Equity Common Common Common Fixed ced Small Equity Lega- tic-
Total Index Stock Stock Stock Income Index Index Index cy pant
Plan Fund Fund Fund Fund Fund Fund Fund Fund Fund Loans
------ ----- ------- ------ ----- ------ ------ ----- ------ ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
in Master
Trust $50,175 $18,517 $2,592 $10,048 $ 2 $15,098 $1,828 $528 $635 $- $927
Accrued interest
receivable from
loans 6 3 1 1 - 1 - - - - -
Interfund receivable /
(payable) - (11) 37 27 (2) 145 (207) 14 (3) - -
Contributions receivable:
- - from parti-
cipants 118 54 22 22 - 1 5 6 8 - -
- - from empl-
oyer 27 10 5 5 - 2 1 1 3 - -
Other accrued
disburse-
ments (25) (12) (1) (4) - (6) (1) - (1) - -
------------------------------------------------------------------------
Net assets available for
benefits as of
December 31,
1998 $50,301 $18,561 $2,656 $10,099 $- $15,241 $1,626 $ 549 $642 $- $927
======================================================================
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
DONTECH PROFIT PARTICIPATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
(Dollars in Thousands)
<TABLE>
<CAPTION>
R.H.
Donne- Ameri- The BGI BGI BGI BGI
BGI lley tech D&B Special Balan- Mid & Int'l Par-
Equity Common Common Common Fixed ced Small Equity Lega- tic-
Total Index Stock Stock Stock Income Index Index Index cy pant
Plan Fund Fund Fund Fund Fund Fund Fund Fund Fund Loans
------ ----- ------- ------ ----- ------ ------ ----- ------ ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment in
Group
Trust $41,490 $14,054 $ - $3,047 $898 $15,774 $930 $700 $732 $4,394 $961
Accrued interest
receivable from
loans 6 2 - 1 - 2 - - - 1 -
Interfund receivable /
(payable) - 119 - (32) (24) (71) 7 5 (3) (1) -
Contributions receivable:
- from parti-
cipants 50 21 - 3 8 1 3 3 12 (1) -
- from
employer 169 81 - 18 41 5 6 7 6 5 -
Other accrued
disburse-
ments - - - - - - - - - - -
------------------------------------------------------------------------
Net assets available for
benefits as of
December 31,
1997 $41,715 $14,277 $- $3,037 $923 $15,711 $946 $ 715 $747 $4,398 $961
============================================================================
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>
<PAGE>
THE DONTECH PROFIT PARTICIPATION PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1. Plan Description
Overview
DonTech II is a general partnership between R.H. Donnelley Corporation (`RHD')
and Ameritech Publishing of Illinois, Inc.,(`APIL') an indirect, wholly owned
subsidiary of Ameritech Corporation (`Ameritech'). The partnership does
business under the name DonTech (`DonTech' or the `Company'). On July 1, 1998,
RHD separated from The Dun & Bradstreet Corporation (`D&B'), and operates as an
independent public company. In 1997, RHD and APIL signed a series of
agreements changing the structure of the existing partnership, AM-DON, and
forming the current DonTech partnership.
DonTech has adopted the DonTech Profit Participation Plan (the `Plan') for the
benefit of its eligible employees. The Plan is a defined contribution plan and
is subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended (`ERISA'). The Plan was established to provide a convenient
way for eligible employees to save on a regular and long-term basis. The
following summary provides an overview of major Plan provisions in effect for
the Plan year ended December 31, 1998 and is provided for general informational
purposes. Employees who contribute to the Plan (`Participants') or former
employees who have assets in the plan should refer to the Plan document for
more complete information and a full description of the Plan provisions and
qualifications.
Eligibility and Contributions
Full-time employees of the Company are immediately eligible to participate in
the Plan on their date of hire. Part-time employees who work at least one
thousand hours during the consecutive twelve-month period following employment
or in any calendar year thereafter are eligible to participate in the Plan on
the first day of the following January.
Participants in the Plan authorize direct payroll deductions of between 1% and
6%, in whole percent increments, of their included compensation, as defined by
the Plan document (`Basic Contributions'). The Company makes contributions
(`Matching Contributions') equal to a minimum of 50% of aggregate Basic
Contributions. In accordance with the provisions of the Plan, the Company may
contribute an additional percentage of the participant's aggregate Basic
Contribution if the Company's net income for a Plan year increases more than 5%
over the preceding Plan year.
Participants may make additional contributions (`Investment Contributions') up
to a maximum of 10% of included compensation. Investment Contributions are not
eligible for Matching Contributions. All contributions are subject to
limitations imposed by the Internal Revenue Code (`IRC') and ERISA.
Participants' Basic Contributions and Investment Contributions may be made from
before-tax earnings, which has the effect of reducing current taxable earnings
for federal income tax purposes, and/or after tax earnings. In any Plan year,
a Participant may contribute up to a maximum of 16% of his or her included
compensation (up to 6% in Basic Contributions and 10% in Investment
Contributions) or the maximum allowed by the IRC, whichever is less. For Plan
year 1998, the IRC limit on before-tax contributions was $10,000.
To comply with certain provisions of the Tax Reform Act of 1986, as amended
(the `Act'), the Plan limits covered compensation for purposes of determining
Basic, Investment and Matching Contributions (collectively, `Contributions') to
$160,000 for calendar year ended December 31, 1998.
<PAGE>
THE DONTECH PROFIT PARTICIPATION PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
Vesting and Investment Options
Basic and Investment Contributions are fully vested when made. Matching
Contributions are fully vested when the Participant has completed three years
of service with the Company. In addition, a participant becomes fully vested
in Matching Contributions immediately upon attaining age 65 or in the event of
death or disablement.
The Plan allows participants to allocate their Contributions to various
investment options available under the Plan. These elections must be made in
10% increments and are subject to certain restrictions as described in the Plan
document. Participants are not permitted to invest more than 50% of their
account balance or contributions in the R.H. Donnelley Corporation or Ameritech
Corporation Common Stock Funds (together the `Company Stock Fund'), nor are
they permitted to specify a dollar amount to be transferred into these funds.
Contributions, transfers and reallocations of actual balances into the Company
Stock fund are invested 50% in Ameritech Corporation Common Stock Fund and 50%
in R.H. Donnelley Corporation Common Stock Fund. Participants are able to
reallocate their entire account balances in multiples of 10% among the Plan's
investment options, subject to the 50% maximum in the Company Stock Funds.
Upon termination of service with the Company, participants become eligible for
a lump sum distribution of the vested portion of their account. Retired and
terminated participants who have an account balance in excess of $5,000 may
elect various forms of deferred distribution.
Amounts forfeited by non-vested or partially vested participants who terminated
during the year ended December 31, 1998 totaled $48,000. Forfeited amounts
reduce future Company contributions.
Participant Loans
Participants may obtain loans from the Plan, which are secured by the vested
balance in their accounts. The Plan limits the total number and amount of
loans outstanding at any time for each participant. Interest rates applicable
to Plan loans are commensurate with prevailing rates of interest charged on
similar commercial loans determined in the marketplace plus 2%. The total
number of participants with outstanding loans was 151 and 201 at December 31,
1998 and 1997, respectively.
Note 2. Summary of Significant Accounting Policies
Master Trust
Prior to July 1, 1998, assets of the Plan were commingled with the assets of
the Profit Participation Plan of The Dun & Bradstreet Corporation in The Dun &
Bradstreet Defined Contribution Plan Group Trust (the `Group
Trust'). From January 1, 1998 through April 30, 1998 and for the Plan year
ended December 31, 1997, the Group Trust was held by Bankers Trust Company as
trustee. On May 1, 1998, D&B terminated its trustee relationship with Bankers
Trust, established a new Group Trust at the Northern Trust Company (the
`Trustee') and transferred the assets of the Plan to the Trustee.
On July 1, 1998, RHD established with the Trustee the R.H. Donnelley
Corporation Defined Contribution Plan Master Trust (the `Master Trust'). Upon
the separation of RHD from D&B, the assets of the Plan were transferred from
the Group Trust to the Master Trust. As of December 31, 1998, assets of the
Plan are commingled with the assets of The Profit Participation Plan of R.H.
Donnelley. The Plan's investment in the Master Trust is based on its relative
interest in the fair value of the assets held in the Master Trust. Investment
income, gains and losses on sales of investments and net
appreciation/depreciation in the fair value of investments are allocated to the
Plan based upon the relative
<PAGE>
THE DONTECH PROFIT PARTICIPATION PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
investment balances at fair value during the valuation period. Fair value is
determined based on quoted market prices of investment securities or contract
value for investment contracts.
Contributions and Benefit Payments
Participant contributions are recorded in the period payroll deductions are
made. Company contributions are based upon amounts required under the
provisions of the Plan. Benefits are recorded when paid.
Liabilities relating to Participants who have elected to withdraw from the Plan
but have not yet been paid were $352,000 and $322,000 as of December 31, 1998
and 1997, respectively. These amounts will be reflected on the Form 5500 to be
filed by the Plan Administrator. The difference between benefits paid to
Participants reported in the Statement of Changes in Net Assets Available for
Benefits and Form 5500 for the year ended December 31, 1998 amounted to
$30,000.
Expenses and Administrative Costs
Transaction and investment manager fees related to the Plan are charged against
Plan assets. Trustee fees and other miscellaneous expenses of administering
the Plan are borne by the Company.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Risks and Uncertainties
The Plan provides for various investment options in a number of funds invested
in stocks, bonds, fixed income securities, mutual funds, and other investment
securities. Certain investment securities are exposed to risks such as changes
in interest rates, fluctuations in market conditions and credit risk. The
level of risk associated with certain investment securities and uncertainty
related to changes in the value of these securities could materially affect
Participant account balances and amounts reported in the financial statements
and accompanying notes.
Plan Termination
While the Company has not expressed any intent to do so, it may discontinue its
contributions or terminate the Plan at any time, subject to the provisions of
ERISA and the IRC. These provisions state that in such an event, all
Participants of the Plan shall be fully vested in the current market value of
amounts credited to their accounts as of the date of termination.
Note 3. Investment Funds
Participants of the Plan can elect to have Contributions credited to their Plan
accounts invested in one or more of the following investment funds. The
percentage indicated represents the percentage of the total Master Trust
investments dedicated to Participants. Remaining amounts are dedicated to
participants in the Profit Participation Plan of R.H. Donnelley.
<PAGE>
THE DONTECH PROFIT PARTICIPATION PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
<TABLE>
<CAPTION>
<S> <C>
BGI Equity Index Fund The BGI Equity Index Fund invests in common
stock of companies included in the Standard &
Poor's 500 Stock Index (S&P 500). Vested and
non-vested Participant balances in this fund
represented 39% of the total Master Trust
and 4% of the total Group Trust investment in
this option as of December 31, 1998 and 1997,
respectively.
R.H. Donnelley Corporation The R.H. Donnelley Corporation Common Stock
Common Stock Fund fund invests in the common stock of R.H.
Donnelley Corporation. Vested and non-vested
Participant balances in this fund represented
34% of the total Master Trust investment in
this option as of December 31, 1998.
Ameritech Corporation Common The Ameritech Corporation Common Stock
Stock Fund Fund invests in the common stock of Ameritech
Corporation. The fund was established as an
investment option of Plan participants only.
As such, vested and non-vested participant
balances in the fund represented 100% of the
total Master Trust and Group Trust investment
at December 31, 1998 and 1997, respectively.
The Dun & Bradstreet Corporation The Dun & Bradstreet Corporation Common
Common Stock Fund Stock Fund invests in the common stock of The
Dun & Bradstreet Corporation. As of December
31, 1997, vested and non-vested participant
balances in the fund represented 4% of the
total Group Trust investment in this option.
As of December 31, 1998, The Dun & Bradstreet
Corporation Common Stock Fund was terminated.
Unless otherwise instructed by the
Participant, all remaining balances were
transferred to the R.H. Donnelley Corporation
Common Stock Fund.
Legacy Common Stock Fund The Legacy Common Stock Fund consists of Common
Stock of D&B, ACNielsen Corporation and
Cognizant Corporation. As of December 31,
1997, vested and non-vested participant
balances in the fund represented 4% of the
total Group Trust investment in this option.
On May 31,1998, the Legacy Common
Stock Fund was terminated. Unless otherwise
instructed by the Participant, all remaining
balances were transferred to The Dun &
Bradstreet Corporation Common Stock Fund.
BGI Special Fixed Income Fund The BGI Special Fixed Income Fund invests in
group insurance contracts (`GICs') with one or
more insurance companies and/or financial
institutions selected by RHD. The insurance
companies and/or financial institutions contract
to repay both principal and a specific rate of
return, depending on market conditions when the
contract is negotiated and the length of the
contract. Vested and non-vested Participant
balances in this fund represented 47% of the
total Master Trust and 4% of the total Group
Trust investment in this option as of December
31, 1998 and 1997, respectively.
BGI Balanced Index Fund The BGI Balanced Index Fund invests in the
common stock of companies included in the S&P
500 and long-term, investment grade bonds.
Vested and non-vested Participant balances in
this fund represented 34% of the total Master
Trust and 3% of the total Group Trust investment
in this option as of December 31, 1998 and 1997,
respectively.
BGI Mid & Small Cap Equity The BGI Mid & Small Cap Equity Index Fund
Index Fund invests in common stocks in the U.S. equity
market that are not included in the S&P 500.
Vested and non-vested Participant balances in
this fund represented 14% of the total Master
Trust and 2% of the total Group Trust investment
in this option as of December 31, 1998 and 1997,
respectively.
BGI International Equity The BGI International Equity Index Fund
Index Fund invests in a portfolio of securities traded
outside the U.S. Investment selections are
based on the Europe, Australia and Far East
Index. Vested and non-vested Participant
balances in this fund represented 23% of the
total Master Trust and less than 1% of the total
Group Trust investment in this option as
of December 31, 1998 and 1997, respectively.
</TABLE>
Contributions received from Participants and the Company are temporarily
invested in the Northern Trust Company Collective Short-Term Investment Fund
pending investment into the funds described above. Investments of the
Collective Short-Term Investment Fund consist of high quality money market
instruments with short maturities.
Note 4. Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated January 31, 1996, that the Plan and related trust are designed in
accordance with applicable sections of the IRC. Although the Plan has been
amended since the date of the letter, the Plan Administrator and the
Administrator's legal counsel believe the amendments do not alter the tax
status of the Plan and the Plan is currently being operated in compliance with
the applicable requirements of the IRC.
Note 5. Investment in Trusts
The investment reflected in the Statement of Net Assets Available for Benefits
represents the Plan's share of total assets in the Master Trust as of December
31, 1998 and the Group Trust as of December 31, 1997. This share represents
44% of the total Master Trust assets and 5% of total Group Trust assets,
respectively.
Assets at fair value in the Master and Group Trust are summarized as follows
(in thousands):
<TABLE>
<CAPTION>
December 31,
<S> <C> <C>
1998 1997
BGI Equity Index Fund $47,994* $364,313*
R.H. Donnelley Corporation Common
Stock Fund 7,726* -
Ameritech Corporation Common Stock Fund 10,047* 3,011
The Dun & Bradstreet Corporation Common
Stock Fund - 21,114
Legacy Common Stock Fund - 107,651*
BGI Special Fixed Income Fund 32,417* 308,139*
BGI Balanced Index Fund 5,300 27,481
BGI Mid & Small Cap Equity Index Fund 3,846 31,096
BGI International Equity Index Fund 2,710 18,371
Loan Account 3,214 18,304
Bankers Trust Short-term Investment Fund - 13,074
Total Investments 113,254 912,554
Accrued Contributions, Income
and Expenses 54 1,797
------------ -----------
Total Assets in Trusts $113,308 $914,351
============ ===========
<FN>
*These investments represent 5% or more of total Trust assets.
</FN>
</TABLE>
The Master Trust investments had the following income and expense during the
six month period ended December 31, 1998 (in thousands):
<TABLE>
<CAPTION>
Income/(Expense)
<S> <C>
Net Appreciation/(Depreciation) July 1, 1998- December 31, 1998
BGI Equity Index Fund $4,077
R.H. Donnelley Corporation Common Stock Fund 306
Ameritech Corporation Common Stock Fund 2,606
The Dun & Bradstreet Corporation Common Stock Fund (1,036)
BGI Balanced Index Fund 262
BGI Mid & Small Cap Equity Index Fund 5
BGI International Equity Index Fund 91
--
Total Net Appreciation 6,311
-----
Investment Income
Interest 1,162
Dividends 208
Fees and Expenses (61)
-----
Total Investment Income 1,309
-----
Master Trust Income $ 7,620
=======
</TABLE>
<PAGE>
THE DONTECH PROFIT PARTICIPATION PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
The Group Trust investments had the following income and expense during the six
month period ended June 30, 1998 (in thousands):
<TABLE>
<CAPTION>
Income/(Expense)
Net Appreciation/(Depreciation) January 1, 1998- June 30, 1998
<S> <C>
BGI Equity Index Fund $53,238
Ameritech Corporation Common Stock Fund 269
The Dun & Bradstreet Corporation Common Stock Fund 560
Legacy Common Stock Fund 4,616
BGI Balanced Index Fund 4,575
BGI Mid & Small Cap Equity Index Fund (657)
BGI International Equity Index Fund 1,315
------
Total Net Appreciation 63,916
------
Investment Income
Interest 19,220
Dividends 2,123
Fees and Expenses (679)
------
Total Investment Income 20,664
------
Group Trust Income $ 84,580
========
</TABLE>
The Plan's allocated income in the Group Trust and the Master Trust represents
its participating share in the net income of the Trusts for the six month
periods ended June 30, 1998 and December 31, 1998, respectively. Trust
investments in securities are included at fair value. The fair value of
investments is determined utilizing the applicable June 30, 1998 or December
31, 1998 closing sales prices as quoted in published financial sources. Fair
value for investments in the BGI Balanced Equity Index Fund, the BGI Mid &
Small Cap Equity Index Fund and the BGI International Equity Index Fund are
determined by using the applicable June 30, 1998 or December 31, 1998
redemption prices reported by the managers of the funds.
The Trust has entered into benefit responsive investment contacts with various
insurance companies(`Insurers'). The fair value of these contracts are
recorded in the BGI Special Fixed Income Fund. The Insurers maintain the
contributions in a pooled account, which is credited with earnings on the
underlying assets and charged for Participant withdrawals and administrative
expenses. These contracts are included in the financial statements at contract
value and there are no reserves against contract value for credit risk of the
contract insurer or other risks. Fair value of the contracts was $24,844,000
and $308,139,000 as of December 31, 1998 and 1997, respectively. The average
interest rates were approximately 6.6% and 6.5% for the plan year ended
December 31, 1998 and 1997, respectively.
Dividend income is recorded on the ex-dividend date. Interest earned on
investments is recorded on the accrual basis. Purchases and sales of
securities are recorded on the trade date. The net appreciation in the fair
value of the investments of the Group Trust or Master Trust, as applicable,
consists of realized and unrealized gains and losses for the specified period.
Note 6. Ameritech / SBC Transaction
On May 11, 1998, Ameritech jointly announced with SBC Communications Inc.
(`SBC') a definitive agreement to merge an SBC subsidiary, SBC Delaware, Inc.,
with Ameritech. As a result of the merger, each share of Ameritech common
stock (other than shares owned by Ameritech, SBC or their respective
subsidiaries) will be converted into and exchanged for 1.316 shares of SBC
common stock. The merger has been approved by the Board of Directors and
shareholders of both companies, as well as the Department of Justice and the
Public Utilities Commission of Ohio, but remains subject to the satisfaction of
certain other regulatory approvals. Subsequent to the merger, Ameritech will
be a wholly owned subsidiary of
<PAGE>
THE DONTECH PROFIT PARTICIPATION PLAN
NOTES TO FINANCIAL STATEMENTS - (Continued)
SBC. At the effective date of the merger, shares of Ameritech common stock
held by the Plan will be converted into shares of SBC common stock at the
exchange ratio.
Note 7. Subsequent Events
On March 1, 1999 the Plan Administrators removed the Plan from the R.H.
Donnelley Corporation Defined Contribution Master Trust. The Administrators
appointed Northern Trust as Trustee of the Plan assets and Merrill Lynch as
record keeper and investment advisor.
In connection with the foregoing, the BGI Equity Index Fund, BGI Balanced
Index Fund, BGI Mid & Small Cap Equity Index Fund and BGI International
Equity Index Fund were removed as investment options of the Plan. The Pacific
Investment Management Company Total Return Fund, Global Asset Management
International Fund, Merrill Lynch Equity Index Trust, Van Kampen American Value
Fund and Three GoalManager Model Portfolios were added as investment options of
the Plan.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
DonTech II general partnership (the administrator of the DonTech Profit
Participation Plan) has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
DonTech Profit Participation Plan
(Name of Plan)
BY: ---------------------
Robert Gross
Vice President - Finance &
Chief Financial Officer
Date: June 29, 1999
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in (i) the Registration
Statement on Form S-8 (File No. 33-49036) of Ameritech Corporation, and (ii)
the Registration Statement on Form S-8 (File No. 33-27144) of R.H. Donnelley
Corporation of our report dated May 28, 1999, which appears in this annual
report on Form 11-K.
/s/PricewaterhouseCoopers LLP
New York, New York
June 29, 1999
