<PAGE>Cover
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): April 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 April 20, 1999 announcing the earnings for the first
quarter ended March 31, 1999.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits.
99 Press Release, dated April 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: April 20, 1999
Ameritech Corporation
By: /s/ Barbara A. Klein
Barbara A. Klein
Vice President and
Comptroller
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[LOGO] [News Release]
30 South Wacker Drive
Suite 3400
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, April 20, 1999
Ameritech Earnings Grow 19.5 Percent in First Quarter,
Earnings Per Share Up 18.9 Percent to $0.63
Data Services Revenues Increase 40 Percent, European Investments Power Results
CHICAGO - Ameritech (NYSE: AIT) today reported record first-quarter
earnings, driven by rapid growth in data communications and continued
strong contributions from its extensive European investments. The
results marked Ameritech's 22nd consecutive quarter of double-digit
profit growth before one-time items.
First-quarter earnings grew 19.5 percent to $705 million, up from
$590 million a year ago before one-time items, and earnings per share
climbed 18.9 percent to $0.63, up from $0.53 in the first quarter of
1998. Revenues advanced 7.8 percent to a first-quarter record of $4.46
billion, up from $4.13 billion in the first quarter of 1998.
First-quarter earnings included adoption of a new accounting
pronouncement, SOP 98-1, that calls for certain computer software
expenses to be capitalized. Without this required change, Ameritech's
earnings before one-time items would have increased 17.3 percent to
$692 million, and earnings per share would have grown 17.0 percent to
$0.62.
"This was a standout quarter built on strong fundamentals," said
Richard C. Notebaert, Ameritech chairman and chief executive officer.
"First-quarter revenues from data services increased 40 percent and
represented nearly half of our total revenue growth. Continued
excellent results from our European holdings contributed more than one-
fourth of our earnings growth. And to expand in high-potential markets
for the future, we took important steps forward - announcing a major
strategic alliance with Bell Canada and acquisition of one of North
America's leading network integration businesses. We're excited about
the opportunities ahead."
Ameritech's first-quarter results included the following highlights:
- 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 37.1
million, driven by rapid growth in high-capacity connections.
Business voice channel equivalents grew 25 percent.
- 62 percent growth in ISDN channels and 37 percent growth in high-
capacity circuits.
(more)
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- 10 percent growth in U.S. cellular customers to 3.7 million.
First-quarter operating cash flow from U.S. wireless businesses
nearly doubled.
- 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.
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. Ameritech has interests in 15 European countries,
including wireless operations in 11 countries, and a European portfolio
valued at $10 billion.
To further expand its growth potential, during the past three months
Ameritech:
- Broadened its international portfolio by agreeing to invest
$3.4 billion for a 20 percent equity stake in Bell Canada,
Canada's premier telecommunications company. Bell Canada
provides a full range of communications services to markets with
a total population of more than 20 million. The companies expect
to finalize the transaction by the end of May.
- Strengthened its data communications capabilities by acquiring
Anixter International's North American Network Integration Division,
a data network design and consulting unit. Through this
acquisition, Ameritech increased its data work force by 35 percent
and became the top U.S. carrier reseller of Cisco, Nortel/Bay
Networks and 3Com data equipment. This transaction closed on April
2, 1999.
- Advanced its planned merger with SBC Communications obtaining
clearances from the U.S. Department of Justice and the Public
Utilities Commission of Ohio. Shareowners of both Ameritech and SBC
overwhelmingly approved the companies' merger agreement in December
of last year. Upon closing of the transaction, Ameritech shareowners
will receive 1.316 shares of SBC common stock for each share of
Ameritech common stock. The companies expect to complete the
transaction by the middle of 1999.
Ameritech's first-quarter results in both 1999 and 1998 included one-
time items. First-quarter 1998 results included a $64 million after-
tax charge for restructuring costs and a $34 million after-tax charge
for a currency-related fair value adjustment related to Ameritech's
investment in Tele Danmark. First-quarter 1999 results included a one-
time after-tax gain of $27 million from adjustments to previously
announced restructuring plans. Including these items, reported first-
quarter 1998 net income was $492 million or $0.44 per share, and
reported first-quarter 1999 net income was $732 million or $0.66 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
70,000 employees, 1 million shareowners and $30 billion in assets.
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Ameritech Corporation
Financial Summary - Quarter Ended March 31
(Dollars in millions, except per share amounts)
(Unaudited)
First Quarter Results
Percent
Before One-time Items 1999 1998 Change
Operating revenues $4,455 $4,133 7.8 %
Operating expenses 3,317 3,125 6.2 %
Net income 705 590 19.5 %
Diluted earnings per share 0.63 0.53 18.9 %
As Reported
Operating revenues $4,455 $4,133 7.8 %
Operating expenses 3,273 3,228 1.4 %
Net income 732 492 48.8 %
Diluted earnings per share 0.66 0.44 50.0 %
Average common shares
outstanding (000) 1,099,066 1,099,650 (0.1)%
Average common shares
outstanding with dilution (000) 1,111,988 1,108,617 0.3 %
First Quarter 1999 One-time Items
Normalized operating expenses for 1999 exclude a reduction of $44
million ($27 million after-tax or $0.03 per share) to our 1998
accrual for restructuring. We have determined that certain
restructuring activities will no longer occur and are being
accomplished more cost effectively than originally planned.
First Quarter 1998 One-time Items
Normalized operating expenses for 1998 exclude a $104 million
restructuring charge ($64 million after-tax or $0.06 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 charge of $34 million, or $0.03 per share, resulting from a
currency-related fair-value adjustment in connection with our
Tele Danmark investment.
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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 March 31, 1999 and 1998 or
for the quarters then ended:
1999 1998
Total assets $29,796 $27,953
Long-term debt $5,521 $7,019
Dividends per common share $0.3175 $0.3000
Book value per common share $9.94 $7.75
Voice channel equivalents 37,056 32,143
Network access lines (000s) 21,146 20,609 #
# - restated to eliminate access lines sold to Century Telephone
Enterprises, Inc. in November 1998.
