FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended December 31, 1993
or
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For the transition period from to
Commission file Number 1-8610
SOUTHWESTERN BELL CORPORATION
Incorporated under the laws of the State of Delaware
I.R.S. Employer Identification Number 43-1301883
175 E. Houston, San Antonio, Texas 78205
Telephone Number 210-821-4105
Southwestern Bell Corporation hereby amends the following
exhibits of its Annual Report for the year ended
December 31, 1993 on Form 10-K as set forth in the pages attached
hereto:
(1) Exhibit 99.a Annual Report on Form 11-K for the
Southwestern Bell Corporation Savings Plan
for Salaried Employees for the year 1993.
(2) Exhibit 99.b Annual Report on Form 11-K for the
Southwestern Bell Corporation Savings and
Security Plan (Non-Salaried Employees) for
the year 1993.
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized on
the 26th day of May, 1994.
SOUTHWESTERN BELL CORPORATION
by /s/ Donald E. Kiernan
Donald E. Kiernan
Senior Vice President,
Treasurer and Chief Financial
Officer
May 26, 1994
<PAGE>
EX-99.a
Form 10-K for 1993
File No. 1-8610
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 11-K
ANNUAL REPORT
_____________
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993
Commission File Number 1-8610
_____________
SOUTHWESTERN BELL CORPORATION
SAVINGS PLAN FOR SALARIED EMPLOYEES
_____________
SOUTHWESTERN BELL CORPORATION
175 E. Houston, San Antonio, Texas 78205
<PAGE>
Financial Statements and Exhibits.
(a) Financial Statements of the Plan included herein:
Page
Report of Independent Auditors . . . . . . . . . . . . . 3
Statement of Net Assets Available for Plan Benefits at
December 31, 1993 . . . . . . . . . . . . . . . . . . . 4
Statement of Net Assets Available for Plan Benefits at
December 31, 1992 . . . . . . . . . . . . . . . . . . . 6
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1993 . . . . . 8
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1992 . . . . 10
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1991 . . . . 12
Notes to Financial Statements . . . . . . . . . . . . 14
Schedule of Investments . . . . . . . . . . . . . . . 18
(b) Exhibits:
Exhibit
Number
23.a Consent of Ernst & Young
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Benefit Plan Committee of the
Southwestern Bell Corporation
Savings Plan for Salaried Employees
We have audited the accompanying statements of net assets
available for plan benefits of the Southwestern Bell Corporation
Savings Plan for Salaried Employees (the Plan) as of December 31,
1993 and 1992, and the related statements of changes in net
assets available for plan benefits for each of the three years in
the period ended December 31, 1993. Our audit also included the
schedule of investments listed in the Index. These financial
statements and schedule are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit 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. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for plan benefits of the Plan at December 31, 1993 and
1992, and the changes in its net assets available for plan
benefits for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted
accounting principles. Also, in our opinion, the related
schedule of investments, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
ERNST & YOUNG
San Antonio, Texas
May 25, 1994 <PAGE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at value
(cost $908,852):
SBC common shares:
allocated $ 159,603 $ - $ - $ - $ - $ - $ 159,603
unallocated 280,338 - - - - - 280,338
other - 364,298 - - - 31,580 395,878
Wells Fargo Bank Bond
Index Fund - - 33,475 - - - 33,475
Contracts with insurance
companies and financial
institutions - - - - 200,668 - 200,668
Wells Fargo Commingled
Index Fund - - - 138,864 - - 138,864
Temporary cash investments 7,634 10,829 2,463 2,345 48,047 2,364 73,682
Total Investments 447,575 375,127 35,938 141,209 248,715 33,944 1,282,508
Shares distributable at value:
SBC common shares - 4,435 - - - 14 4,449
SBC allocated common shares 1,476 - - - - - 1,476
Total Shares Distributable 1,476 4,435 - - - 14 5,925
Contributions receivable:
Participant - 484 59 277 230 - 1,050
Total Contributions Receivable - 484 59 277 230 - 1,050
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Dividends and interest receivable 20 323 226 137 169 18 893
Loans receivable from participants - 21,782 2,047 10,958 12,394 - 47,181
Transfers receivable from other
funds and plans - 35,658 11 2,150 - - 37,819
Other 1,935 1,040 99 526 593 - 4,193
Total Assets 451,006 438,849 38,380 155,257 262,101 33,976 1,379,569
LIABILITIES
Distributions payable 4,625 10,936 948 3,689 6,764 767 27,729
Transfers payable to other
funds and plans - - 468 - 4,104 33,208 37,780
Payable for investments purchased - 873 192 - 16 - 1,081
Administrative expenses 21 5 2 4 7 1 40
Interest payable 8,779 - - - - - 8,779
Current portion of long-term debt 27,375 - - - - - 27,375
Long-term debt 181,323 - - - - - 181,323
Total Liabilities 222,123 11,814 1,610 3,693 10,891 33,976 284,107
Net Assets Available for Plan
Benefits $ 228,883 $ 427,035 $ 36,770 $ 151,564 $ 251,210 $ - $1,095,462
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at value
(cost $844,105):
SBC common shares:
allocated $ 118,838 $ - $ - $ - $ - $ - $ 118,838
unallocated 280,255 - - - - - 280,255
other - 288,608 - - - 4,864 293,472
Wells Fargo Bank Bond
Index Fund - - 32,556 - - - 32,556
Other marketable equity - - - - - 36,336 36,336
securities
Contracts with insurance
companies and financial
institutions - - - - 259,667 - 259,667
Wells Fargo Commingled
Index Fund - - - 118,810 - - 118,810
Temporary cash investments 7,529 2,824 1,224 2,571 573 1,124 15,845
Total Investments 406,622 291,432 33,780 121,381 260,240 42,324 1,155,779
Shares distributable at value:
SBC common shares - 1,017 - - - 12 1,029
SBC allocated common shares 277 - - - - - 277
Other marketable equity securities - - - - - 91 91
Total Shares Distributable 277 1,017 - - - 103 1,397
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Contributions receivable:
Participant - 425 64 321 381 - 1,191
Total Contributions Receivable - 425 64 321 381 - 1,191
Dividends and interest receivable 21 126 217 372 110 236 1,082
Loans receivable from participants - 16,894 2,223 9,781 15,561 - 44,459
Transfers receivable from other
funds and plans - 260 - - 3,110 - 3,370
Total Assets 406,920 310,154 36,284 131,855 279,402 42,663 1,207,278
LIABILITIES
Distributions payable 919 2,990 709 2,653 6,632 554 14,457
Transfers payable to other
funds and plans - 2,059 416 261 - 528 3,264
Payable for investments purchased - - 198 251 - - 449
Interest payable 9,970 - - - - - 9,970
Current portion of long-term debt 25,962 - - - - - 25,962
Long-term debt 208,698 - - - - - 208,698
Total Liabilities 245,549 5,049 1,323 3,165 6,632 1,082 262,800
Net Assets Available for Plan
Benefits $ 161,371 $ 305,105 $ 34,961 $ 128,690 $ 272,770 $ 41,581 $ 944,478
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1992 $ 161,371 $ 305,105 $ 34,961 $ 128,690 $ 272,770 $ 41,581 $ 944,478
Additions to Net Assets:
Contributions and transfers:
Participant contributions - 22,705 2,892 14,203 15,710 - 55,510
Employer contributions 30,314 - - - - - 30,314
Transfers of participants'
balances - net - 72,023 (1,559) 5,588 (37,537) (39,903) (1,388)
Loan transfer 25,962 - - - - - 25,962
56,276 94,728 1,333 19,791 (21,827) (39,903) 110,398
Investment income:
Dividends on SBC common shares 16,115 12,360 - - - 140 28,615
Other dividends - - - 3,628 - 1,363 4,991
Interest 137 283 2,322 2 18,628 41 21,413
Transfer of interest and dividends - 1,537 - - - (1,537) -
16,252 14,180 2,322 3,630 18,628 7 55,019
Interest income on participant loans - 1,626 172 789 1,143 - 3,730
Net appreciation (depreciation) in
fair value of investments 48,607 37,679 1,149 8,709 - 4,205 100,349
Total Additions 121,135 148,213 4,976 32,919 (2,056) (35,691) 269,496
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Administrative Expenses 74 37 14 29 45 8 207
Interest expense 18,108 - - - - - 18,108
Loan payment - principal 25,962 - - - - - 25,962
Distributions to participants 9,479 26,246 3,153 10,016 19,459 5,882 74,235
Total Deductions 53,623 26,283 3,167 10,045 19,504 5,890 118,512
Net Assets Available for Plan
Benefits, December 31, 1993 $ 228,883 $ 427,035 $ 36,770 $ 151,564 $ 251,210 $ - $1,095,462
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1991 $ 91,905 $ 269,929 $ 35,597 $ 114,163 $ 286,598 $ 46,985 $ 845,177
Additions to Net Assets:
Contributions and transfers:
Participant contributions - 17,342 2,540 11,967 17,574 - 49,423
Employer contributions 29,998 - - - - - 29,998
Transfers of participants'
balances - net - (2,941) (1,019) 9,705 (8,763) (2,234) (5,252)
Loan transfer 24,462 - - - - - 24,462
54,460 14,401 1,521 21,672 8,811 (2,234) 98,631
Investment income:
Dividends on SBC common shares 15,908 12,336 - - - 215 28,459
Other dividends - - - 3,436 - 1,930 5,366
Interest 193 187 2,566 3 21,958 58 24,965
Transfer of interest and dividends - 2,168 - - - (2,168) -
16,101 14,691 2,566 3,439 21,958 35 58,790
Interest income on participant loans - 1,374 164 706 1,372 - 3,616
Net appreciation (depreciation) in
fair value of investments 50,478 35,357 (231) 5,001 - 4,156 94,761
Total Additions 121,039 65,823 4,020 30,818 32,141 1,957 255,798
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Interest expense 20,448 - - - - - 20,448
Loan payment - principal 24,462 - - - - - 24,462
Distributions to participants 6,663 30,647 4,656 16,291 45,969 7,361 111,587
Total Deductions 51,573 30,647 4,656 16,291 45,969 7,361 156,497
Net Assets Available for Plan
Benefits, December 31, 1992 $ 161,371 $ 305,105 $ 34,961 $ 128,690 $ 272,770 $ 41,581 $ 944,478
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1991
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1990 $ 29,547 $ 298,618 $ 43,563 $ 102,409 $ 323,608 $ 73,517 $ 871,262
Additions to Net Assets:
Contributions and transfers:
Participant contributions - 21,062 2,820 9,099 25,004 - 57,985
Employer contributions 36,735 - - - - - 36,735
Transfers of participants'
balances - net - (13,457) (1,525) 9,007 11,051 (3,754) 1,322
Loan transfer 22,767 - - - - - 22,767
59,502 7,605 1,295 18,106 36,055 (3,754) 118,809
Investment income:
Dividends on SBC common shares 15,888 14,507 - - - 343 30,738
Other dividends - - - 3,780 - 2,987 6,767
Interest 392 211 3,494 1 27,697 75 31,870
Transfer of interest and dividends - 3,381 - - - (3,381) -
16,280 18,099 3,494 3,781 27,697 24 69,375
Interest income on participant loans - 1,563 172 538 1,776 - 4,049
Net appreciation (depreciation) in
fair value of investments 48,204 44,644 2,855 25,802 - 3,235 124,740
Total Additions 123,986 71,911 7,816 48,227 65,528 (495) 316,973
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1991
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Interest expense 22,491 - - - - - 22,491
Loan payment - principal 22,767 - - - - - 22,767
Distributions to participants 16,370 100,600 15,782 36,473 102,538 26,037 297,800
Total Deductions 61,628 100,600 15,782 36,473 102,538 26,037 343,058
Net Assets Available for Plan
Benefits, December 31, 1991 $ 91,905 $ 269,929 $ 35,597 $ 114,163 $ 286,598 $ 46,985 $ 845,177
<FN>
See Notes to Financial Statements.
</TABLE>
SOUTHWESTERN BELL CORPORATION
SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands, Except per Unit Amounts)
1. Plan Description - Southwestern Bell Corporation
(Corporation or SBC) established the Southwestern Bell
Corporation Savings Plan for Salaried Employees (Plan)
effective January 1, 1984, as a result of the disaggregation
of the Bell System Savings Plan for Salaried Employees
(Predecessor Plan). A participant's investment in the
American Telephone and Telegraph Company Shares Fund of the
Predecessor Plan automatically became an investment in the
Diversified Telephone Portfolio Fund (DTP).
In 1989, the Corporation's Board of Directors authorized the
establishment of a leveraged Employee Stock Ownership Plan
(ESOP), which became a part of the existing Plan effective
September 1, 1989. Concurrent with the establishment of the
ESOP, the company matching contribution was raised to
80 percent from 66 2/3 percent and is made solely in the
form of shares of the Corporation's common stock in the
ESOP. The Plan prefunded the ESOP by borrowing
$290.0 million through the issuance of 8.49 percent
Guaranteed Salaried Employees' ESOP Notes due 2000, the
repayment of which is guaranteed by the Corporation. Funds
borrowed by the Plan were used to purchase shares of the
Corporation's common stock held in the open market (Financed
Shares), which act as collateral for reimbursement to the
Corporation for any payments it makes under its guarantee of
the notes. Dividends on Financed Shares and employer cash
contributions are used by the Plan to make the required
principal and interest payments on the loan. As the loan is
paid down, the Financed Shares are released from the
collateral. The Financed Shares are allocated to
participants' accounts over a period of up to ten years in
the form of the company matching contribution. In lieu of
dividends on Financed Shares previously allocated to
participants, additional Financed Shares are allocated to
participants' accounts. To the extent insufficient shares
have been released through payments on the loan, additional
employer contributions are made to the ESOP as are necessary
to meet any shortfall in the company match or in the shares
issued in lieu of dividends. Should the amounts released
through loan payments exceed the required company matching
contribution, the excess is considered an additional
employer contribution and is allocated to participants'
accounts based on each participant's proportionate share of
actual plan year ESOP contributions. Dividends on non-
Financed Shares in the ESOP are used to acquire additional
shares which are allocated to participants' accounts in the
ESOP.
As of January 1, 1984, no contributions could be invested in
the DTP and all earnings of the DTP were invested in SBC
common shares and transferred to the Corporation Shares
fund. Effective December 31, 1993, the DTP was eliminated.
Participants had the option to transfer their DTP account
balance to one or more funds within the Plan or receive a
distribution. Balances not designated for transfer or
distribution by participants were transferred to the
Corporation Shares fund.
Participants may invest their contributions in Corporation
Shares, the Bond Fund, the Diversified Equity Portfolio, the
Interest Income Fund or equally among selected funds.
Participants may also borrow funds from their vested account
balances, excluding ESOP balances and earnings attributable
thereto.
2. Plan Provisions - The Plan has detailed provisions covering
participant eligibility, participant allotments from pay,
participant withdrawals, participant loans, employer
contributions and related vesting, Plan expenses and Plan
termination. The Plan text and Prospectus include complete
descriptions of these and other Plan provisions. Certain
amendments were made to the Plan effective in 1993 relating
to new requirements of federal and state laws and
regulations and certain business acquisitions and
dispositions entered into by the Corporation. These
amendments did not significantly affect net assets of the
Plan.
3. Accounting Policies - The values of investments are
determined as follows: SBC common shares and other
marketable equity securities comprising the DTP on the basis
of the last published sales prices as reported on the
composite tape of the New York Stock Exchange and other
exchanges; over-the-counter securities, United States
Government Treasury notes and bills and other marketable
debt securities on the basis of the bid prices from
published sources where available and, if not available,
from other sources considered reliable; contracts with
insurance companies and financial institutions at principal
plus reinvested interest; Wells Fargo Commingled Index Fund
and Wells Fargo Bank Bond Index Fund at net asset values per
share obtained from published sources; and temporary cash
investments at cost which approximates fair value.
Purchases and sales of securities are reflected as of the
trade date. Dividend income is recognized on the ex-dividend
date. Interest earned on investments is recognized on the
accrual basis.
Certain reclassifications were made to the 1992 and 1991
financial statements to conform with the 1993 presentation.
4. Units of Participation - The interest of a participant in
each type of investment in the Plan is represented by units
(as described in Section 8 of the Plan), except for the ESOP
which is represented by shares. The number and value of
units for investments in the Plan (other than shares in the
ESOP) were:
December 31, 1993 December 31, 1992
Number of Value of Number Value of
Units Units of Units Units
Corporation
Shares 61,030,013 $ 7.00 50,605,610 $ 6.03
Bond Fund 4,168,249 $ 8.82 4,388,531 $ 7.97
Diversified
Equity
Portfolio 15,783,895 $ 9.60 14,749,082 $ 8.73
Interest Income
Fund 61,033,585 $ 4.12 71,395,316 $ 3.82
Diversified
Telephone
Portfolio - - 3,927,034 $ 10.59
5. Participants - The number of active and inactive
participants in the Plan by investment direction described
in Section 7 of the Plan was (included in inactive
participants for 1992 are employees who accepted an early
retirement offer at the end of 1991):
December 31,
1993 1992
Entirely in Corporation Shares 4,346 4,053
Entirely in Bond Fund 217 345
Entirely in Diversified Equity
Portfolio 1,421 1,600
Entirely in Interest Income Fund 2,782 5,010
Equally in Corporation Shares and
Bond Fund 370 423
Equally in Corporation Shares and
Diversified Equity Portfolio 2,231 2,091
Equally in Corporation Shares and
Interest Income Fund 1,648 2,286
Equally in Bond Fund and Diversified
Equity Portfolio 525 546
Equally in Diversified Equity
Portfolio and Interest Income Fund 853 1,215
Equally in Corporation Shares, Bond
Fund and Diversified Equity
Portfolio 491 445
Equally in Corporation Shares,
Diversified Equity Portfolio and
Interest Income Fund 736 896
Total 15,620 18,910
6. Income Taxes - The Internal Revenue Service has previously
determined that the Plan, as amended, is qualified under
Section 401(a) of the Internal Revenue Code (Code) and is
exempt from federal income taxes under Section 501(a) of the
Code. Participating employee (participant) contributions
may be made on either an after tax or, within limits set
under Section 401(k) of the Code, a deferred tax basis or a
combination of both. Employer matching contributions and
earnings on participant accounts are not taxed until
distributed.
Withdrawals and distributions from participant accounts are
subject to the provisions and restrictions of the Code.
These provisions include, but are not limited to: a
restriction on the distribution of deferred tax allotments
until the participant's separation from service, disability,
death, attaining age 59 1/2 or on account of hardship; the
taxable amount of any distribution or withdrawal prior to
attaining age 59 1/2 may be subject to a 10 percent penalty
tax; also certain large distributions, in excess of dollar
limitations specified in the Code, may be subject to a
15 percent penalty tax; a participant's tax upon
distribution may be reduced by special tax treatment or
rollover to an Individual Retirement Account; and, Plan
loans are available to participants without tax consequences
so long as the loans are repaid in accordance with Code
provisions.
7. Investments - The fair values of investments representing
5 percent or more of Plan net assets at either December 31,
1993 or 1992 were:
1993 1992
Employee Stock Ownership Plan
SBC common shares:
unallocated $ 280,338 $ 280,255
allocated $ 159,603 $ 118,838
Corporation Shares
SBC common shares $ 364,298 $ 288,608
Diversified Equity Portfolio
Wells Fargo Commingled Index
Fund $ 138,864 $ 118,810
Interest Income Fund
Contracts with insurance
companies and
financial institutions:
John Hancock $ 57,494 -
Metropolitan Life Insurance
Company $ 54,388 $ 117,575
Provident National Life
Insurance Company $ 67,719 $ 80,029
8. Long-Term Debt - Long-term debt consists of the Guaranteed
Salaried Employees' ESOP Notes due 2000 issued in connection
with the ESOP. Effective January 1, 1993, the interest rate
on the notes was reduced from 8.49 percent to 8.41 percent
as a result of a change in the federal tax rate. The notes
are guaranteed by the Corporation. Dividends on the
Financed Shares and cash contributions from the Corporation
are used to repay the notes.
The aggregate principal amount of long-term debt scheduled
for repayment in each of the five years subsequent to 1993
is $27,375 in 1994, $28,897 in 1995, $30,537 in 1996,
$32,306 in 1997 and $34,217 in 1998. <PAGE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN FOR SALARIED EMPLOYEES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Number of Shares or Fair
Name of Issuer or Title of Issue (a) Principal Amount (b) Cost Value
<S> <C> <C> <C>
Employee Stock Ownership Plan
SBC common shares:
unallocated 122.5% 6,755,139 shares $ 186,107 $ 280,338
allocated 69.7% 3,847,922 shares 107,025 159,603
Temporary cash investments 3.3% 7,634 7,634 7,634
Total Employee Stock
Ownership Plan 195.5% 300,766 447,575
Corporation Shares
SBC common shares 85.3% 8,781,874 shares 180,186 364,298
Temporary cash investments 2.5% 10,829 10,829 10,829
Total Corporation Shares 87.8% 191,015 375,127
Bond Fund
Wells Fargo Bank Bond Index Fund 91.0% 311,470 units 30,780 33,475
Temporary cash investments 6.7% 2,463 2,463 2,463
Total Bond Fund 97.7% 33,243 35,938
Diversified Equity Portfolio
Wells Fargo Commingled Index Fund 91.6% 1,348,710 units 100,838 138,864
Temporary cash investments 1.6% 2,345 2,345 2,345
Total Diversified Equity
Portfolio 93.2% 103,183 141,209
Interest Income Fund
Contracts with insurance companies and
financial institutions: (c)
Connecticut General Life Insurance
Company 932 932 932
John Hancock 57,494 57,494 57,494
Metropolitan Life Insurance Company 54,388 54,388 54,388
Provident National Life Insurance
Company 67,719 67,719 67,719
The Prudential Insurance Company
of America 20,135 20,135 20,135
79.9% 200,668 200,668
Temporary cash investments 19.1% 48,047 48,047 48,047
Total Interest Income Fund 99.0% 248,715 248,715
Diversified Telephone Portfolio
SBC common shares NA 760,958 shares 29,566 31,580
Temporary cash investments NA 2,364 2,364 2,364
Total Diversified Telephone
Portfolio NA 31,930 33,944
TOTAL $ 908,852 $ 1,282,508
</TABLE>
(a) Percentages represent the percentage of net assets available
for plan benefits for each applicable fund.
(b) SBC common shares reflect two-for-one stock split effective
May 25, 1993.
(c) The contracts with these insurance companies and financial
institutions provide for the repayment of principal and the
crediting of interest at a composite effective semi-annual
interest rate for the first and second six-month periods of
1993 of approximately 7.65 percent and 7.10 percent,
respectively. This composite interest rate is subject to
semi-annual adjustment. The timing of the remittance of
participating employee contributions and other participating
employee-directed transactions may cause the actual yield to
vary from this rate.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Benefit Plan Committee has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
SOUTHWESTERN BELL CORPORATION
SAVINGS PLAN FOR SALARIED EMPLOYEES
By Benefit Plan Committee
By /s/ Cassandra Carr
Cassandra Carr, Chairman
Date: May 26, 1994 <PAGE>
EX-23.a
Form 11-K for 1993
File No. 1-8610
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement (Form S-8, No. 33-38706) pertaining to
the Southwestern Bell Corporation Savings Plan for Salaried
Employees of our report dated May 25, 1994, with respect to
the financial statements and schedule of investments of the
Southwestern Bell Corporation Savings Plan for Salaried
Employees included in this Annual Report (Form 11-K) for the
year ended December 31, 1993.
ERNST & YOUNG
San Antonio, Texas
May 26, 1994
<PAGE>
EX-99.b
Form 10-K for 1993
File No. 1-8610
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 11-K
ANNUAL REPORT
_____________
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993
Commission File Number 1-8610
_____________
SOUTHWESTERN BELL CORPORATION
SAVINGS AND SECURITY PLAN (NON-SALARIED EMPLOYEES)
_____________
SOUTHWESTERN BELL CORPORATION
175 E. Houston, San Antonio, Texas 78205
<PAGE>
Financial Statements and Exhibits.
(a) Financial Statements of the Plan included herein:
Page
Report of Independent Auditors . . . . . . . . . . . . . 3
Statement of Net Assets Available for Plan Benefits at
December 31, 1993 . . . . . . . . . . . . . . . . . . . 4
Statement of Net Assets Available for Plan Benefits at
December 31, 1992 . . . . . . . . . . . . . . . . . . . 6
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1993 . . . . . 8
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1992 . . . . 10
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1991 . . . . 12
Notes to Financial Statements . . . . . . . . . . . . 14
Schedule of Investments . . . . . . . . . . . . . . . 19
(b) Exhibits:
Exhibit
Number
23.b Consent of Ernst & Young
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Benefit Plan Committee of the
Southwestern Bell Corporation
Savings and Security Plan (Non-Salaried Employees)
We have audited the accompanying statements of net assets
available for plan benefits of the Southwestern Bell Corporation
Savings and Security Plan (Non-Salaried Employees) (the Plan) as
of December 31, 1993 and 1992, and the related statements of
changes in net assets available for plan benefits for each of the
three years in the period ended December 31, 1993. Our audit
also included the schedule of investments listed in the Index.
These financial statements and schedule are the responsibility of
the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit 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. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for plan benefits of the Plan at December 31, 1993 and
1992, and the changes in its net assets available for plan
benefits for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted
accounting principles. Also, in our opinion, the related
schedule of investments, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
ERNST & YOUNG
San Antonio, Texas
May 25, 1994 <PAGE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at value
(cost $605,560):
SBC common shares:
allocated $ 140,390 $ - $ - $ - $ - $ - $ 140,390
unallocated 192,472 - - - - - 192,472
other - 348,220 - - - 35,047 383,267
Wells Fargo Bank Bond
Index Fund - - 1,365 - - - 1,365
Contracts with insurance
companies and financial
institutions - - - - 127,053 - 127,053
Wells Fargo Commingled
Index Fund - - - 12,234 - - 12,234
Temporary cash investments 5,659 7,367 98 271 23,391 253 37,039
Total Investments 338,521 355,587 1,463 12,505 150,444 35,300 893,820
Shares distributable at value:
SBC common shares - 585 - - - - 585
SBC allocated common shares 107 - - - - - 107
Total Shares Distributable 107 585 - - - - 692
Contributions receivable:
Participant - 670 17 85 427 - 1,199
Employer 476 - - - - - 476
Total Contributions Receivable 476 670 17 85 427 - 1,675
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Dividends and interest receivable 15 181 2 12 65 14 289
Loans receivable from participants - 25,772 318 1,860 10,716 - 38,666
Transfers receivable from other
funds and plans - 36,648 34 - - - 36,682
Other 144 11 - 1 5 - 161
Total Assets 339,263 419,454 1,834 14,463 161,657 35,314 971,985
LIABILITIES
Distributions payable 393 2,376 3 41 1,699 93 4,605
Transfers payable to other
funds and plans - - - 12 1,437 35,220 36,669
Payable for investments purchased - 1,083 - - 3 - 1,086
Administrative expenses 38 9 1 2 8 1 59
Interest payable 6,260 - - - - - 6,260
Current portion of long-term debt 18,576 - - - - - 18,576
Long-term debt 127,066 - - - - - 127,066
Total Liabilities 152,333 3,468 4 55 3,147 35,314 194,321
Net Assets Available for Plan
Benefits $ 186,930 $ 415,986 $ 1,830 $ 14,408 $ 158,510 $ - $ 777,664
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at value
(cost $549,469):
SBC common shares:
allocated $ 96,923 $ - $ - $ - $ - $ - $ 96,923
unallocated 197,412 - - - - - 197,412
other - 289,559 - - - 4,865 294,424
Wells Fargo Bank Bond
Index Fund - - 741 - - - 741
Other marketable equity
securities - - - - - 33,931 33,931
Contracts with insurance
companies and financial
institutions - - - - 136,633 - 136,633
Wells Fargo Commingled
Index Fund - - - 8,614 - - 8,614
Temporary cash investments 5,563 5,428 31 61 12,647 1,107 24,837
Total Investments 299,898 294,987 772 8,675 149,280 39,903 793,515
Shares distributable at value:
SBC common shares - 753 - - - 24 777
SBC allocated common shares 106 - - - - - 106
Other marketable equity securities - - - - - 165 165
Total Shares Distributable 106 753 - - - 189 1,048
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Contributions receivable:
Participant - 570 14 85 560 - 1,229
Employer 5,117 - - - - - 5,117
Total Contributions Receivable 5,117 570 14 85 560 - 6,346
Dividends and interest receivable 45 129 5 28 68 226 501
Loans receivable from participants - 17,018 57 1,362 9,927 - 28,364
Transfers receivable from other
funds and plans - 640 - - - - 640
Total Assets 305,166 314,097 848 10,150 159,835 40,318 830,414
LIABILITIES
Distributions payable 321 2,345 1 27 1,446 473 4,613
Transfers payable to other
funds and plans - - - 107 205 327 639
Payable for investments purchased - - 5 18 - - 23
Interest payable 7,050 - - - - - 7,050
Current portion of long-term debt 17,271 - - - - - 17,271
Long-term debt 145,642 - - - - - 145,642
Total Liabilities 170,284 2,345 6 152 1,651 800 175,238
Net Assets Available for Plan
Benefits $ 134,882 $ 311,752 $ 842 $ 9,998 $ 158,184 $ 39,518 $ 655,176
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1992 $ 134,882 $ 311,752 $ 842 $ 9,998 $ 158,184 $ 39,518 $ 655,176
Additions to Net Assets:
Contributions and transfers:
Participant contributions - 24,360 577 3,315 19,162 - 47,414
Employer contributions 20,363 - - - - - 20,363
Transfers of participants'
balances - net - 52,290 382 423 (15,341) (38,008) (254)
Loan transfers 17,271 - - - - - 17,271
37,634 76,650 959 3,738 3,821 (38,008) 84,794
Investment income:
Dividends on SBC common shares 12,015 12,075 - - - 136 24,226
Other dividends - - - 289 - 1,273 1,562
Interest 102 204 74 - 10,298 37 10,715
Transfer of interest and dividends - 1,439 - - - (1,439) -
12,117 13,718 74 289 10,298 7 36,503
Interest income on participant loans - 1,669 17 113 727 - 2,526
Net appreciation (depreciation) in
fair value of investments 36,564 36,260 26 667 - 3,746 77,263
Total Additions 86,315 128,297 1,076 4,807 14,846 (34,255) 201,086
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Adminstative expenses 134 85 5 8 57 14 303
Interest expense 12,884 - - - - - 12,884
Loan payment - principal 17,271 - - - - - 17,271
Distributions to participants 3,978 23,978 83 389 14,463 5,249 48,140
Total Deductions 34,267 24,063 88 397 14,520 5,263 78,598
Net Assets Available for Plan
Benefits, December 31, 1993 $ 186,930 $ 415,986 $ 1,830 $ 14,408 $ 158,510 $ - $ 777,664
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1991 $ 79,322 $ 267,618 $ 312 $ 3,804 $ 145,689 $ 43,318 $ 540,063
Additions to Net Assets:
Contributions and transfers:
Participant contributions - 19,981 391 2,949 21,521 - 44,842
Employer contributions 24,702 - - - - - 24,702
Transfers of participants'
balances - net - 1,225 123 2,914 (2,848) (1,485) (71)
Loan transfers 15,418 - - - - - 15,418
40,120 21,206 514 5,863 18,673 (1,485) 84,891
Investment income:
Dividends on SBC common shares 11,585 11,512 - - - 210 23,307
Other dividends - - - 191 - 1,711 1,902
Interest 158 171 38 - 11,410 36 11,813
Transfer of interest and dividends - 1,948 - - - (1,948) -
11,743 13,631 38 191 11,410 9 37,022
Interest income on participant loans - 1,243 12 93 633 - 1,981
Net appreciation (depreciation) in
fair value of investments 37,624 37,338 2 409 - 3,771 79,144
Total Additions 89,487 73,418 566 6,556 30,716 2,295 203,038
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Interest expense 14,431 - - - - - 14,431
Loan payment - principal 15,418 - - - - - 15,418
Distributions to participants 4,078 29,284 36 362 18,221 6,095 58,076
Total Deductions 33,927 29,284 36 362 18,221 6,095 87,925
Net Assets Available for Plan
Benefits, December 31, 1992 $ 134,882 $ 311,752 $ 842 $ 9,998 $ 158,184 $ 39,518 $ 655,176
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1991
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1990 $ 23,904 $ 216,799 $ 64 $ 679 $ 123,556 $ 45,962 $ 410,964
Additions to Net Assets:
Contributions and transfers:
Participant contributions - 19,251 209 979 22,659 - 43,098
Employer contributions 26,828 - - - - - 26,828
Transfers of participants'
balances - net - (174) 13 1,881 (180) (1,532) 8
Loan transfers 15,354 - - - - - 15,354
42,182 19,077 222 2,860 22,479 (1,532) 85,288
Investment income:
Dividends on SBC common shares 11,072 10,950 - - - 236 22,258
Other dividends - - - 44 - 1,918 1,962
Interest 252 183 14 - 11,015 51 11,515
Transfer of interest and dividends - 2,197 - - - (2,197) -
11,324 13,330 14 44 11,015 8 35,735
Interest income on participant loans - 567 4 19 298 - 888
Net appreciation (depreciation) in
fair value of investments 33,680 34,525 13 258 - 1,835 70,311
Total Additions 87,186 67,499 253 3,181 33,792 311 192,222
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1991
(Dollars in Thousands)
<CAPTION>
Employee Stock Diversified Interest Diversified
Ownership Corporation Bond Equity Income Telephone
Plan Shares Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Interest expense 15,748 - - - - - 15,748
Loan payment - principal 15,354 - - - - - 15,354
Distributions to participants 666 16,680 5 56 11,659 2,955 32,021
Total Deductions 31,768 16,680 5 56 11,659 2,955 63,123
Net Assets Available for Plan
Benefits, December 31, 1991 $ 79,322 $ 267,618 $ 312 $ 3,804 $ 145,689 $ 43,318 $ 540,063
<FN>
See Notes to Financial Statements.
</TABLE>
SOUTHWESTERN BELL CORPORATION
SAVINGS AND SECURITY PLAN (NON-SALARIED EMPLOYEES)
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands, Except per Unit Amounts)
1. Plan Description - Southwestern Bell Corporation
(Corporation or SBC) established the Southwestern Bell
Corporation Savings and Security Plan (Non-Salaried
Employees) (Plan) effective January 1, 1984, as a result of
the disaggregation of the Bell System Savings and Security
Plan (Predecessor Plan). A participant's investment in the
American Telephone and Telegraph Company Shares Fund of the
Predecessor Plan automatically became an investment in the
Diversified Telephone Portfolio Fund (DTP).
In 1989, the Corporation's Board of Directors authorized the
establishment of a leveraged Employee Stock Ownership Plan
(ESOP), which became a part of the existing Plan effective
October 1, 1989. For all participating companies, the
employing company matching contribution is made solely in
the form of shares of the Corporation's common stock held in
the ESOP. The employer matching contribution was raised to
66 2/3 percent from 50 percent effective October 1, 1989 for
employees of the Corporation and Southwestern Bell Telephone
Company, January 1, 1991 for employees of Southwestern Bell
Yellow Pages, Inc. and July 1, 1991 for employees of
Southwestern Bell Telecommunications, Inc. (Telecom). The
Plan prefunded the ESOP by borrowing $165.0 million through
the issuance of 8.49 percent Guaranteed Non-Salaried
Employees' ESOP Notes due 2000, the repayment of which is
guaranteed by the Corporation. The Plan issued on
February 27, 1990, an additional $45.0 million of 9.40
percent Guaranteed Non-Salaried Employees' ESOP Notes due
2000, the repayment of which is also guaranteed by the
Corporation. Funds borrowed by the Plan were used to
purchase shares of the Corporation's common stock held in
the open market (Financed Shares), which act as collateral
for reimbursement to the Corporation for any payments it
makes under its guarantee of the notes. Dividends on
Financed Shares and employer cash contributions are used by
the Plan to make the required principal and interest
payments on the loan. As the loan is paid down, the
Financed Shares are released from the collateral. The
Financed Shares are allocated to participants' accounts over
a period of up to ten years in the form of the company
matching contribution. In lieu of dividends on Financed
Shares previously allocated to participants, additional
Financed Shares are allocated to participants' accounts. To
the extent insufficient shares have been released through
payments on the loan, additional employer contributions are
made to the ESOP as are necessary to meet any shortfall in
the company match or in the shares issued in lieu of
dividends. Should the amounts released through loan
payments exceed the required company matching contribution,
the excess is considered an additional employer contribution
and is allocated to participants' accounts based on each
participant's proportionate share of actual plan year ESOP
contributions. Dividends on non-Financed Shares in the ESOP
are used to acquire additional shares which are allocated to
participants' accounts in the ESOP.
As of January 1, 1984, no contributions could be invested in
the DTP and all earnings of the DTP were invested in SBC
common shares and transferred to the Corporation Shares
fund. Effective December 31, 1993, the DTP was eliminated.
Participants had the option to transfer their DTP account
balance to one or more funds within the Plan or receive a
distribution. Balances not designated for transfer or
distribution by participants were transferred to the
Corporation Shares fund.
Participants may invest their contributions in Corporation
Shares, the Bond Fund, the Diversified Equity Portfolio, the
Interest Income Fund, or equally among selected funds. The
Plan was modified effective January 1, 1991, for all
participants except employees of Telecom, to permit
participants to borrow funds from their vested account
balances, excluding ESOP balances and earnings attributable
thereto. Modifications to the Plan for Telecom employees
were effective July 1, 1991.
2. Plan Provisions - The Plan has detailed provisions covering
participant eligibility, participant allotments from pay,
participant withdrawals, participant loans, employer
contributions and related vesting, Plan expenses and Plan
termination. The Plan text and Prospectus include complete
descriptions of these and other Plan provisions. Certain
amendments were made to the Plan effective in 1993 relating
to new requirements of federal and state laws and
regulations, collective bargaining agreement, and certain
business acquisitions and dispositions entered into by the
Corporation. These amendments did not significantly affect
net assets of the Plan.
3. Accounting Policies - The values of investments are
determined as follows: SBC common shares and the other
marketable equity securities comprising the DTP on the basis
of the last published sales prices as reported on the
composite tape of the New York Stock Exchange and other
exchanges; over-the-counter securities, United States
Government Treasury notes and bills and other marketable
debt securities on the basis of the bid prices from
published sources where available and, if not available,
from other sources considered reliable; contracts with
insurance companies and financial institutions at principal
plus reinvested interest; Wells Fargo Commingled Index Fund
and Wells Fargo Bank Bond Index Fund at net asset values per
share obtained from published sources; and temporary cash
investments at cost which approximates fair value.
Purchases and sales of securities are reflected as of the
trade date. Dividend income is recognized on the ex-
dividend date. Interest earned on investments is recognized
on the accrual basis.
Certain reclassifications were made to the 1992 and 1991
financial statements to conform with the 1993 presentation.
4. Units of Participation - The interest of a participant in
each type of investment in the Plan is represented by units
(as described in Section 8 of the Plan), except for the ESOP
which is represented by shares. The number and value of
units for investments in the Plan (other than shares in the
ESOP) were:
December 31, 1993 December 31, 1992
Number of Value of Number of Value
Units Units Units of
Units
Corporation
Shares 57,094,829 $ 7.29 49,795,151 $ 6.26
Bond Fund 1,315,534 $ 1.39 667,467 $ 1.26
Diversified
Equity
Portfolio 9,234,365 $ 1.56 7,038,162 $ 1.42
Interest Income
Fund 37,034,471 $ 4.28 39,616,233 $ 3.99
Diversified
Telephone
Portfolio - - 8,023,405 $ 4.93
5. Participants - The number of active and inactive
participants in the Plan by investment direction
described in Section 7 of the Plan was:
December 31,
1993 1992
Entirely in Corporation Shares 11,859 10,046
Entirely in Bond Fund 42 33
Entirely in Diversified Equity
Portfolio 646 736
Entirely in Interest Income Fund 11,116 13,924
Equally in Corporation Shares and
Bond Fund 214 122
Equally in Corporation Shares and
Diversified Equity Portfolio 1,260 925
Equally in Corporation Shares and
Interest Income Fund 6,255 6,807
Equally in Bond Fund and Diversified
Equity Portfolio 203 181
Equally in Diversified Equity
Portfolio and Interest Income Fund 343 345
Equally in Corporation Shares, Bond
Fund and Diversified Equity
Portfolio 327 220
Equally in Corporation Shares,
Diversified Equity Portfolio and
Interest Income Fund 549 399
Total 32,814 33,738
6. Income Taxes - The Internal Revenue Service has
previously determined that the Plan, as amended, is
qualified under Section 401(a) of the Internal Revenue
Code (Code) and is exempt from federal income taxes
under Section 501(a) of the Code. Participating
employee (participant) contributions may be made on
either an after tax or, within limits set under Section
401(k) of the Code, a deferred tax basis or a
combination of both. Employer matching contributions
and earnings on participant accounts are not taxed
until distributed.
Withdrawals and distributions from participant accounts
are subject to the provisions and restrictions of the
Code. These provisions include, but are not limited
to: a restriction on the distribution of deferred tax
allotments until the participant's separation from
service, disability, death, attaining age 59 1/2 or on
account of hardship; the taxable amount of any
distribution or withdrawal prior to attaining age 59
1/2 may be subject to a 10 percent penalty tax; also
certain large distributions, in excess of dollar
limitations specified in the Code, may be subject to a
15 percent penalty tax; a participant's tax upon
distribution may be reduced by special tax treatment or
rollover to an Individual Retirement Account; and, Plan
loans are available to participants without tax
consequences so long as the loans are repaid in
accordance with Code provisions.
7. Investments - The fair values of investments
representing 5 percent or more of Plan net assets at
either December 31, 1993 or 1992 were:
1993 1992
Employee Stock Ownership Plan
SBC common shares:
unallocated $ 192,472 $ 197,412
allocated $ 140,390 $ 96,923
Corporation Shares
SBC common shares $ 348,220 $ 289,559
Interest Income Fund
Contracts with insurance
companies and
financial institutions:
John Hancock $ 60,318 -
Metropolitan Life Insurance
Company $ 18,936 $ 55,111
Pacific Mutual $ 19,648 $ 34,314
8. Long-Term Debt - Long-term debt consists of the 8.49
percent and 9.40 percent Guaranteed Non-Salaried
Employees' ESOP Notes due 2000 issued in connection
with the ESOP. Effective January 1, 1993, the interest
rate on the 8.49 percent notes was reduced to 8.41
percent as a result of a change in the federal tax
rate. The notes are guaranteed by the Corporation.
Dividends on the Financed Shares and cash contributions
from the Corporation are used to repay the notes.
The aggregate principal amount of long-term debt
scheduled for repayment in each of the five years
subsequent to 1993 is $18,576 in 1994, $19,741 in 1995,
$21,174 in 1996, $22,281 in 1997 and $23,469 in 1998.
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Number of Shares or Fair
Name of Issuer or Title of Issue (a) Principal Amount (b) Cost Value
<S> <C> <C> <C>
Employee Stock Ownership Plan
SBC common shares:
unallocated 103.0% 4,637,870 shares $ 128,456 $ 192,472
allocated 75.1% 3,383,816 shares 95,930 140,390
Temporary cash investments 3.0% 5,659 5,659 5,659
Total Employee Stock
Ownership Plan 181.1% 230,045 338,521
Corporation Shares
SBC common shares 83.7% 8,391,016 shares 172,348 348,220
Temporary cash investments 1.8% 7,367 7,367 7,367
Total Corporation Shares 85.5% 179,715 355,587
Bond Fund
Wells Fargo Bank Bond Index Fund 74.6% 12,696 units 1,326 1,365
Temporary cash investments 5.3% 98 98 98
Total Bond Fund 79.9% 1,424 1,463
Diversified Equity Portfolio
Wells Fargo Commingled Index Fund 84.9% 118,814 units 10,909 12,234
Temporary cash investments 1.9% 271 271 271
Total Diversified Equity
Portfolio 86.8% 11,180 12,505
Interest Income Fund
Contracts with insurance companies and
financial institutions: (c)
Connecticut General Life Insurance
Company 2,111 2,111 2,111
John Hancock 60,318 60,318 60,318
Metropolitan Life Insurance Company 18,936 18,936 18,936
Pacific Mutual 19,648 19,648 19,648
Provident National Life Insurance
Company 12,484 12,484 12,484
The Prudential Insurance Company
of America 13,556 13,556 13,556
80.1% 127,053 127,053
Temporary cash investments 14.8% 23,391 23,391 23,391
Total Interest Income Fund 94.9% 150,444 150,444
Diversified Telephone Portfolio
SBC common shares NA 844,504 shares 32,499 35,047
Temporary cash investments NA 253 253 253
Total Diversified Telephone
Portfolio NA 32,752 35,300
TOTAL $ 605,560 $ 893,820
</TABLE>
(a) Percentages represent the percentage of net assets
available for plan benefits for each applicable fund.
(b) SBC common shares reflect two-for-one stock split
effective May 25, 1993.
(c) The contracts with these insurance companies and
financial institutions provide for the repayment of
principal and the crediting of interest at a composite
effective semi-annual interest rate for the first and
second six-month periods of 1993 of approximately 7.25
percent and 6.65 percent, respectively. This composite
interest rate is subject to semi-annual adjustment. The
timing of the remittance of participating employee
contributions and other participating employee-directed
transactions may cause the actual yield to vary from
this rate.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Benefit Plan Committee has
duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
SOUTHWESTERN BELL CORPORATION
SAVINGS AND SECURITY PLAN
(NON-SALARIED EMPLOYEES)
By Benefit Plan Committee
By /s/ Cassandra Carr
Cassandra Carr, Chairman
Date: May 26, 1994
EX-23.b
Form 11-K for 1993
File No. 1-8610
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement (Form S-8, No. 33-38706) pertaining to
the Southwestern Bell Corporation Savings and Security Plan
(Non-Salaried Employees) of our report dated May 25, 1994, with
respect to the financial statements and schedule of investments
of the Southwestern Bell Corporation Savings and Security Plan
(Non-Salaried Employees) included in this Annual Report
(Form 11-K) for the year ended December 31, 1993.
ERNST & YOUNG
San Antonio, Texas
May 26, 1994
<PAGE>
