FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X 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, 1994
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
SBC COMMUNICATIONS INC.
(formerly known as 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
SBC Communications Inc. hereby amends the following exhibits of its
Annual Report for the year ended December 31, 1994 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 the year 1994.
(2) Exhibit 99.b Annual Report on Form 11-K for the Southwestern
Bell Corporation Savings and Security Plan for the year
1994.
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 25th day
of May, 1995.
SBC COMMUNICATIONS INC.
by /s/ Liam S. Coonan
Liam S. Coonan
Senior Vice President and
Assistant General Counsel
May 25, 1995
EX-99.a
Form 10-K for 1994
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, 1994
Commission File Number 1-8610
_____________
SOUTHWESTERN BELL CORPORATION
SAVINGS PLAN
_____________
SBC COMMUNICATIONS INC.
(formerly known as Southwestern Bell Corporation)
175 E. Houston, San Antonio, Texas 78205
Financial Statements, Supplemental Schedules and Exhibits
Table of Contents
Page
Report of Independent Auditors
Financial Statements:
Statement of Net Assets Available for Plan Benefits as of
December 31, 1994
Statement of Net Assets Available for Plan Benefits as of
December 31, 1993
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1994
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1993
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1992
Notes to Financial Statements
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
Item 27d - Schedule of Reportable Transactions
Exhibits:
23.a Consent of Ernst & Young LLP
REPORT OF INDEPENDENT AUDITORS
Benefit Plan Committee of the
Southwestern Bell Corporation Savings Plan
We have audited the accompanying statements of net assets
available for plan benefits of the Southwestern Bell Corporation
Savings Plan (the Plan) as of December 31, 1994 and 1993, 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, 1994. 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 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, 1994 and
1993, and the changes in its net assets available for plan
benefits for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole. The
accompanying supplemental schedules as of and for the year ended
December 31, 1994 listed in the table of contents are presented
for purposes of additional analysis and are not a required part
of the basic financial statements but are supplemental
information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental
schedules have been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
ERNST & YOUNG LLP
San Antonio, Texas
May 22, 1995
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994
(Dollars in Thousands)
<CAPTION>
Employee Stock SBC Diversified Interest
Ownership Shares Bond Equity Income
Plan Fund Fund Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value
(cost $949,721):
SBC common shares:
allocated $ 192,257 $ - $ - $ - $ - $ 192,257
unallocated 228,549 - - - - 228,549
other - 423,830 - - - 423,830
Wells Fargo Government/Corporate
Bond Index Fund - - 33,090 - - 33,090
Contracts with insurance
companies and other
financial institutions - - - - 238,845 238,845
Wells Fargo Equity Index Fund - - - 153,872 - 153,872
Temporary cash investments 7,810 6,371 731 3,932 184 19,028
Total Investments 428,616 430,201 33,821 157,804 239,029 1,289,471
Shares distributable at value:
SBC common shares - 1,521 - - - 1,521
SBC allocated common shares 644 - - - - 644
Total Shares Distributable 644 1,521 - - - 2,165
Contributions receivable:
Participant - 421 42 254 190 907
Employer 2,473 - - - - 2,473
Total Contributions Receivable 2,473 421 42 254 190 3,380
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994
(Dollars in Thousands)
<CAPTION>
Employee Stock SBC Diversified Interest
Ownership Shares Bond Equity Income
Plan Fund Fund Portfolio Fund Total
(Continued)
<S> <C> <C> <C> <C> <C> <C>
Dividends and interest receivable 35 179 222 467 83 986
Loans receivable from participants - 24,712 2,064 13,302 11,904 51,982
Transfers receivable from other
funds and plans - 2 - 220 2,841 3,063
Other 453 - - - - 453
Total Assets 432,221 457,036 36,149 172,047 254,047 1,351,500
LIABILITIES
Distributions payable 1,042 4,327 455 1,644 2,984 10,452
Transfers payable to other
funds and plans - 1,597 1,463 - 2 3,062
Payable for investments purchased - 124 205 382 - 711
Administrative expenses 19 6 2 5 5 37
Interest payable 7,628 - - - - 7,628
Current portion of long-term debt 29,581 - - - - 29,581
Long-term debt 160,242 - - - - 160,242
Total Liabilities 198,512 6,054 2,125 2,031 2,991 211,713
Net Assets Available for Plan
Benefits $ 233,709 $ 450,982 $ 34,024 $ 170,016 $ 251,056 $ 1,139,787
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair 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 Government/Corporate
Bond Index Fund - - 33,475 - - - 33,475
Contracts with insurance
companies and other
financial institutions - - - - 200,668 - 200,668
Wells Fargo Equity 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
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund Fund Portfolio Fund Portfolio Total
(Continued)
<S> <C> <C> <C> <C> <C> <C> <C>
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
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income
Plan Fund Fund Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1993 $ 228,883 $ 427,035 $ 36,770 $ 151,564 $ 251,210 $ 1,095,462
Additions to Net Assets:
Contributions and transfers:
Participant contributions - 26,837 3,233 16,185 12,833 59,088
Employer contributions 22,989 - - - - 22,989
Transfers of participants'
balances - net - 11,440 (2,996) 7,640 (13,411) 2,673
Proceeds from debt refinancing 8,500 - - - - 8,500
Loan transfer 27,375 - - - - 27,375
58,864 38,277 237 23,825 (578) 120,625
Investment income:
Dividends on SBC common shares 16,450 15,684 - - - 32,134
Other dividends - - - 4,343 - 4,343
Interest 207 255 2,384 - 14,530 17,376
16,657 15,939 2,384 4,343 14,530 53,853
Interest income on participant loans - 1,796 174 820 903 3,693
Net appreciation (depreciation) in
fair value of investments (12,090) (11,020) (3,537) (2,036) - (28,683)
Total Net Additions 63,431 44,992 (742) 26,952 14,855 149,488
</TABLE>
(Continued)
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income
Plan Fund Fund Portfolio Fund Total
(Continued)
<S> <C> <C> <C> <C> <C> <C>
Deductions from Net Assets:
Administrative expenses 113 72 27 60 77 349
Interest expense 15,773 - - - - 15,773
Loan payment - principal 27,375 - - - - 27,375
Refinanced long-term debt 8,500 - - - - 8,500
Distributions to participants 6,844 20,973 1,977 8,440 14,932 53,166
Total Deductions 58,605 21,045 2,004 8,500 15,009 105,163
Net Assets Available for Plan
Benefits, December 31, 1994 $ 233,709 $ 450,982 $ 34,024 $ 170,016 $ 251,056 $ 1,139,787
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund 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 Net Additions 121,135 148,213 4,976 32,919 (2,056) (35,691) 269,496
</TABLE>
(Continued)
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund Fund Portfolio Fund Portfolio Total
(Continued)
<S> <C> <C> <C> <C> <C> <C> <C>
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
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund 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 Net Additions 121,039 65,823 4,020 30,818 32,141 1,957 255,798
</TABLE>
(Continued)
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund Fund Portfolio Fund Portfolio Total
(Continued)
<S> <C> <C> <C> <C> <C> <C> <C>
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>
SOUTHWESTERN BELL CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands, Except per Unit Amounts)
1. Plan Description - The Southwestern Bell Corporation Savings Plan
(Plan) was established by SBC Communications Inc. (SBC), formerly
known as Southwestern Bell Corporation, to provide a convenient
way for eligible employees to save for retirement on a regular
and long-term basis. During 1994, participants could invest
their contributions in the Southwestern Bell Corporation Shares
Fund (SBC Shares Fund), the Bond Fund, the Diversified Equity
Portfolio, the Interest Income Fund or equally among selected
funds. Beginning in mid-1995, participants will be able to
invest their contributions in these funds and two new funds in 1%
increments.
Effective January 1, 1984, distributions of Plan participant
investments in the American Telephone and Telegraph Company
Shares Fund of the predecessor Bell System Savings Plan for
Salaried Employees were transferred into the Diversified
Telephone Portfolio (DTP) of the Plan. No contributions could be
invested in the DTP and all earnings of the DTP were invested in
SBC common shares and transferred to the SBC 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 SBC Shares Fund.
In 1989, SBC'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%, made solely in the form of shares
of SBC's common stock held in the ESOP.
The Plan prefunded the ESOP by borrowing $290.0 million through
the issuance of 8.49% Guaranteed Salaried Employees' ESOP Notes
due 2000 (ESOP Notes), the repayment of which is guaranteed by
SBC. Funds borrowed by the Plan were used to purchase shares of
SBC's common stock held in the open market (Financed Shares),
which act as collateral for reimbursement to SBC for any payments
it makes under its guarantee of the ESOP Notes. Dividends on
Financed Shares and employer cash contributions are used by the
Plan to make the required principal and interest payments on the
ESOP Notes. As the ESOP Notes are paid down, the Financed Shares
are released from the collateral. The Financed Shares are
allocated to participants' accounts 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. Effective January 1,
1993, the interest rate on the ESOP Notes was reduced from 8.49%
to 8.41% as a result of a change in the federal tax rate.
Effective July 1, 1994, the Plan refinanced $8.5 million of the
outstanding balance of the ESOP Notes described above with a note
payable to SBC annually at 7.89% until July 2003.
To the extent insufficient shares have been released through
payments on outstanding notes net of amounts refinanced,
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 shares released
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.
Participants may borrow funds from their vested account balances,
excluding ESOP balances and earnings attributable thereto. Loans
receivable from participants on the statements of net assets
represents an allocation between funds of the total amount of
outstanding loans based on the investment direction of loan
repayments currently due at December 31 of the Plan year.
Bankers Trust Company is the Trustee for the Plan.
2. Plan Provisions - The Plan has detailed provisions covering
participant eligibility, participant allotments from pay,
participant withdrawals, participant loans, employer
contributions and related vesting and Plan expenses. The Plan
text and Prospectus include complete descriptions of these and
other Plan provisions.
Although it has not expressed any intent to do so, SBC has the
right under the Plan to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). In the
event that the Plan is terminated, subject to the conditions set
forth by ERISA, the account balances of all participants shall be
100% vested.
Effective November 1994, the Plan was amended to change it's name
from Southwestern Bell Corporation Savings Plan for Salaried
Employees to Southwestern Bell Corporation Savings Plan. Certain
other amendments were made to the Plan effective in 1994,
including the merger of certain other plan's assets into the
Plan. 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 on the basis of the last published
sales prices as reported on the composite tape of the New York
Stock Exchange and other exchanges; contracts with insurance
companies and other financial institutions at principal plus
reinvested interest; Wells Fargo Equity Index Fund and Wells
Fargo Government/Corporate 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.
4. Units of Participation - The interest of a participant in each
type of fund in the Plan is represented by units (as described in
Article 7 of the Plan), except for the ESOP which is represented
by shares. The number and net asset value of units, carried to
the fourth decimal place, for each fund in the Plan (other than
shares in the ESOP) were:
December December 31,
31, 1994 1993
Number of Value of Number of Value of
Units Units Units Units
SBC Shares Fund 63,753,577 $ 7.0738 61,030,013 $ 6.9971
Bond Fund 3,992,144 $ 8.5227 4,168,249 $ 8.8213
Diversified 17,457,357 $ 9.7389 15,783,895 $ 9.6024
Equity Portfolio
Interest Income 57,334,489 $ 4.3787 61,033,585 $ 4.1159
Fund
5. Participants - The number of active and inactive participants in
the Plan by investment direction described in Article 6 of the
Plan was:
December 31,
1994 1993
Entirely in SBC Shares Fund 4,697 4,346
Entirely in Bond Fund 164 217
Entirely in Diversified Equity 1,510 1,421
Portfolio
Entirely in Interest Income Fund 2,233 2,782
Equally in SBC Shares Fund and Bond 391 370
Fund
Equally in SBC Shares Fund and 2,646 2,231
Diversified Equity Portfolio
Equally in SBC Shares Fund and 1,452 1,648
Interest Income Fund
Equally in Bond Fund and Diversified 470 525
Equity Portfolio
Equally in Diversified Equity 772 853
Portfolio and Interest Income Fund
Equally in SBC Shares Fund, Bond Fund 620 491
and Diversified Equity Portfolio
Equally in SBC Shares Fund, 761 736
Diversified Equity Portfolio and
Interest Income Fund
Total 15,716 15,620
6. Tax Status -The Internal Revenue Service issued a determination
letter on July 26, 1990, stating that the Plan is designed in
accordance with applicable sections of the Internal Revenue Code
(IRC). The Plan has been amended since the determination letter
was received. SBC has requested a determination that the Plan,
as amended, continues to be qualified. The Plan Administrator
believes that the Plan is currently designed and being operated
in compliance with the applicable requirements of the IRC.
7. Investments - The fair values of investments representing 5% or
more of Plan net assets at either December 31, 1994 or 1993
were:
1994 1993
Employee Stock Ownership Plan
SBC common shares:
allocated $ 192,257 $ 159,603
unallocated $ 228,549 $ 280,338
SBC Shares Fund
SBC common shares $ 423,830 $ 364,298
Diversified Equity Portfolio
Wells Fargo Equity Index Fund $ 153,872 $ 138,864
Interest Income Fund
Contracts with insurance
companies and other financial
institutions:
John Hancock $ 58,190 $ 57,494
Provident National Life $ 55,214 $ 67,719
Insurance Company
8. Long-Term Debt - Long-term debt consists of the ESOP Notes issued
in connection with the ESOP and the refinancing note (as
discussed in note 1). The aggregate principal amount of long-
term debt scheduled for repayment in each of the five years
subsequent to 1994 is $29,581 in 1995, $31,274 in 1996, $33,102
in 1997, $35,076 in 1998 and $37,213 in 1999.
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1994
(Dollars in Thousands)
<CAPTION> Description of Fair
Name of Issuer or Title of Issue Investment Cost Value
<S> <C> <C> <C>
Employee Stock Ownership Plan
* SBC common shares:
allocated 4,761,786 shares $ 132,698 $ 192,257
unallocated 5,660,667 shares 155,982 228,549
* Bankers Trust Company temporary cash investment 7,810 7,810
Total Employee Stock Ownership Plan 296,490 428,616
SBC Shares Fund
* SBC common shares 10,497,336 shares 250,671 423,830
* Bankers Trust Company temporary cash investment 6,371 6,371
Total SBC Shares Fund 257,042 430,201
Bond Fund
* Wells Fargo Government/Corporate Bond
Index Fund 319,148 units 33,918 33,090
* Bankers Trust Company temporary cash investment 731 731
Total Bond Fund 34,649 33,821
Diversified Equity Portfolio
* Wells Fargo Equity Index Fund 1,474,887 units 118,579 153,872
* Bankers Trust Company temporary cash investment 3,932 3,932
Total Diversified Equity Portfolio 122,511 157,804
Interest Income Fund (a)
John Hancock 5.00 % - 5.35 % 58,190 58,190
Provident National Life Insurance
Company 6.98 % - 7.01 % 55,214 55,214
Metropolitan Life Insurance Company 7.95 % - 8.80 % 47,344 47,344
Cassie Des Depots et Consignations 4.66 % 40,929 40,929
The Prudential Insurance Company
of America 6.79 % - 8.02 % 37,168 37,168
238,845 238,845
* Bankers Trust Company temporary cash investment 184 184
Total Interest Income Fund 239,029 239,029
TOTAL $ 949,721 $ 1,289,471
* Party-in-Interest.
(a)Investments in this fund consist of guaranteed investment contracts with insurance
companies and similar contracts with other financial institutions which provide for the
payment of principal plus accrued interest and are collateralized by obligations of other
organizations. The composite effective semi-annual interest rate for the first and second
six-month periods of 1994 was approximately 6.20% and 6.05%, 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.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1994
(Dollars in Thousands)
<CAPTION> Current Value
of Asset on
Description of Purchase Selling Cost of Transaction Net gain
Identity of Party Involved Assets Price Price Asset Date or (loss)
Category (iii) transactions:
<S> <C> <C> <C> <C> <C> <C>
Bankers Trust Directed Account Cash Temporary $ 210,644 $ - $ 210,644 $ 210,644 $ 0
Fund Cash
Investments
Bankers Trust Directed Account Cash Temporary $ - $ 265,304 $ 265,304 $ 265,304 $ 0
Fund Cash
Investments
<FN>
There were no category (i), (ii), or (iv) transactions.
</TABLE>
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
By Benefit Plan Committee
By /s/ Cassandra C. Carr
Cassandra C. Carr, Chairman
Date: May 25, 1995
EX-23.a
Form 11-K for 1994
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 and 33-54309)
pertaining to the Southwestern Bell Corporation Savings Plan
of our report dated May 22 , 1995, with respect to the
financial statements and supplemental schedules of the
Southwestern Bell Corporation Savings Plan included in this
Annual Report (Form 11-K) for the year ended December 31,
1994.
ERNST & YOUNG LLP
San Antonio, Texas
May 22, 1995
EX-99.b
Form 10-K for 1994
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, 1994
Commission File Number 1-8610
_____________
SOUTHWESTERN BELL CORPORATION
SAVINGS AND SECURITY PLAN
_____________
SBC COMMUNICATIONS INC.
(formerly known as Southwestern Bell Corporation)
175 E. Houston, San Antonio, Texas 78205
Financial Statements, Supplemental Schedules and Exhibits
Table of Contents
Page
Report of Independent Auditors
Financial Statements:
Statement of Net Assets Available for Plan Benefits as of
December 31, 1994
Statement of Net Assets Available for Plan Benefits as of
December 31, 1993
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1994
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1993
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1992
Notes to Financial Statements
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
Item 27d - Schedule of Reportable Transactions
Exhibits:
23.b Consent of Ernst & Young LLP
REPORT OF INDEPENDENT AUDITORS
Benefit Plan Committee of the
Southwestern Bell Corporation Savings and Security Plan
We have audited the accompanying statements of net assets
available for plan benefits of the Southwestern Bell Corporation
Savings and Security Plan (the Plan) as of December 31, 1994 and
1993, 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, 1994. 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 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, 1994 and
1993, and the changes in its net assets available for plan
benefits for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole. The
accompanying supplemental schedules as of and for the year ended
December 31, 1994 listed in the table of contents are presented
for purposes of additional analysis and are not a required part
of the basic financial statements but are supplemental
information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental
schedules have been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
ERNST & YOUNG LLP
San Antonio, Texas
May 22, 1995
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income
Plan Fund Fund Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair value
(cost $642,874):
SBC common shares:
allocated $ 162,843 $ - $ - $ - $ - $ 162,843
unallocated 158,112 - - - - 158,112
other - 397,552 - - - 397,552
Wells Fargo Government/Corporate
Bond Index Fund - - 2,156 - - 2,156
Contracts with insurance
companies and other
financial institutions - - - - 158,206 158,206
Wells Fargo Equity Index Fund - - - 16,242 - 16,242
Temporary cash investments 5,871 5,414 120 760 18 12,183
Total Investments 326,826 402,966 2,276 17,002 158,224 907,294
Shares distributable at value:
SBC common shares - 790 - - - 790
SBC allocated common shares 536 - - - - 536
Total Shares Distributable 536 790 - - - 1,326
Contributions receivable:
Participant - 956 27 166 698 1,847
Employer 4,966 - - - - 4,966
Total Contributions Receivable 4,966 956 27 166 698 6,813
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income
Plan Fund Fund Portfolio Fund Total
(Continued)
<S> <C> <C> <C> <C> <C> <C>
Dividends and interest receivable 27 209 17 58 72 383
Loans receivable from participants - 30,585 375 2,425 12,360 45,745
Transfers receivable from other
funds and plans - - - - 230 230
Other 158 - - - - 158
Total Assets 332,513 435,506 2,695 19,651 171,584 961,949
LIABILITIES
Distributions payable 682 3,094 19 145 1,829 5,769
Transfers payable to other
funds and plans - 115 93 22 - 230
Payable for investments purchased - 125 14 40 - 179
Administrative expenses 52 14 1 2 9 78
Interest payable 5,463 - - - - 5,463
Current portion of long-term debt 19,741 - - - - 19,741
Long-term debt 107,325 - - - - 107,325
Total Liabilities 133,263 3,348 127 209 1,838 138,785
Net Assets Available for Plan
Benefits $ 199,250 $ 432,158 $ 2,568 $ 19,442 $ 169,746 $ 823,164
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund Fund Portfolio Fund Portfolio Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at fair 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 Government/Corporate
Bond Index Fund - - 1,365 - - - 1,365
Contracts with insurance
companies and other
financial institutions - - - - 127,053 - 127,053
Wells Fargo Equity 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
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund Fund Portfolio Fund Portfolio Total
(Continued)
<S> <C> <C> <C> <C> <C> <C> <C>
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
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income
Plan Fund Fund Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1993 $ 186,930 $ 415,986 $ 1,830 $ 14,408 $ 158,510 $ 777,664
Additions to Net Assets:
Contributions and transfers:
Participant contributions - 29,584 772 4,111 17,845 52,312
Employer contributions 24,274 - - - - 24,274
Transfers of participants'
balances - net - 3,019 63 1,284 (4,592) (226)
Loan transfers 18,576 - - - - 18,576
42,850 32,603 835 5,395 13,253 94,936
Investment income:
Dividends on SBC common shares 12,496 14,895 - - - 27,391
Other dividends - - - 437 - 437
Interest 156 194 136 - 8,953 9,439
12,652 15,089 136 437 8,953 37,267
Interest income on participant loans - 2,048 26 155 779 3,008
Net appreciation (depreciation) in
fair value of investments (8,995) (10,548) (190) (204) - (19,937)
Total Net Additions 46,507 39,192 807 5,783 22,985 115,274
(Continued)
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income
Plan Fund Fund Portfolio Fund Total
(Continued)
<S> <C> <C> <C> <C> <C> <C>
Deductions from Net Assets:
Administrative expenses 221 182 10 18 112 543
Interest expense 11,292 - - - - 11,292
Loan payment - principal 18,576 - - - - 18,576
Distributions to participants 4,098 22,838 59 731 11,637 39,363
Total Deductions 34,187 23,020 69 749 11,749 69,774
Net Assets Available for Plan
Benefits, December 31, 1994 $ 199,250 $ 432,158 $ 2,568 $ 19,442 $ 169,746 $ 823,164
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund 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 Net 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
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund Fund Portfolio Fund Portfolio Total
(Continued)
<S> <C> <C> <C> <C> <C> <C> <C>
Deductions from Net Assets:
Administrative 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
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund 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 Net Additions 89,487 73,418 566 6,556 30,716 2,295 203,038
</TABLE>
(Continued)
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Diversified
Ownership Shares Bond Equity Income Telephone
Plan Fund Fund Portfolio Fund Portfolio Total
(Continued)
<S> <C> <C> <C> <C> <C> <C> <C>
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>
SOUTHWESTERN BELL CORPORATION
SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands, Except per Unit Amounts)
1. Plan Description - The Southwestern Bell Corporation Savings and
Security Plan (Plan) was established by SBC Communications Inc.
(SBC), formerly known as Southwestern Bell Corporation, to
provide a convenient way for eligible employees to save for
retirement on a regular and long-term basis. During 1994,
participants could invest their contributions in the Southwestern
Bell Corporation Shares Fund (SBC Shares Fund), the Bond Fund,
the Diversified Equity Portfolio, the Interest Income Fund or
equally among selected funds.
Effective January 1, 1984, distributions of Plan participant
investments in the American Telephone and Telegraph Company
Shares Fund of the predecessor Bell System Savings and Security
Plan were transferred into the Diversified Telephone Portfolio
(DTP) of the Plan. No contributions could be invested in the DTP
and all earnings of the DTP were invested in SBC common shares
and transferred to the SBC 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
SBC Shares Fund.
In 1989, SBC'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. Company
matching contributions are made solely in the form of shares of
SBC's common stock held in the ESOP.
The Plan prefunded the ESOP by borrowing $165.0 million through
the issuance of 8.49% Guaranteed Non-Salaried Employees' ESOP
Notes due 2000, the repayment of which is guaranteed by SBC. On
February 27, 1990, the Plan issued an additional $45.0 million of
9.40% Guaranteed Non-Salaried Employees' ESOP Notes due 2000, the
repayment of which is also guaranteed by SBC. Funds borrowed by
the Plan were used to purchase shares of SBC's common stock held
in the open market (Financed Shares), which act as collateral for
reimbursement to SBC for any payments it makes under its
guarantee of the ESOP Notes. Dividends on Financed Shares and
employer cash contributions are used by the Plan to make the
required principal and interest payments on the ESOP Notes. As
the ESOP Notes are paid down, the Financed Shares are released
from the collateral. The Financed Shares are allocated to
participants' accounts 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. Effective January 1, 1993,
the interest rate on the 8.49% notes was reduced to 8.41% as a
result of a change in the federal tax rate.
To the extent insufficient shares have been released through
payments on the ESOP Notes, 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 shares released through note 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.
Participants may borrow funds from their vested account balances,
excluding ESOP balances and earnings attributable thereto. Loans
receivable from participants on the statements of net assets
represents an allocation between funds of the total amount of
outstanding loans based on the investment direction of loan
repayments currently due at December 31 of the Plan year.
Bankers Trust Company is the Trustee for the Plan.
2. Plan Provisions - The Plan has detailed provisions covering
participant eligibility, participant allotments from pay,
participant withdrawals, participant loans, employer
contributions and related vesting and Plan expenses. The Plan
text and Prospectus include complete descriptions of these and
other Plan provisions.
Although it has not expressed any intent to do so, SBC has the
right under the Plan to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). In the
event that the Plan is terminated, subject to the conditions set
forth by ERISA, the account balances of all participants shall be
100% vested.
Effective November 1994, the Plan was amended to change it's name
from Southwestern Bell Corporation Savings and Security Plan (Non-
Salaried Employees) to Southwestern Bell Corporation Savings and
Security Plan. Certain other amendments were made to the Plan
effective in 1994, including changes as a result of collective
bargaining agreement negotiations. 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 on the basis of the last published
sales prices as reported on the composite tape of the New York
Stock Exchange and other exchanges; contracts with insurance
companies and other financial institutions at principal plus
reinvested interest; Wells Fargo Equity Index Fund and Wells
Fargo Government/Corporate 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.
4. Units of Participation - The interest of a participant in each
type of fund in the Plan is represented by units (as described in
Article 7 of the Plan), except for the ESOP which is represented
by shares. The number and net asset value of units, carried to
the fourth decimal place, for each fund in the Plan (other than
shares in the ESOP) were:
December December
31, 1994 31, 1993
Number of Value of Number of Value of
Units Units Units Units
SBC Shares Fund 58,635,669 $ 7.3702 57,094,829 $ 7.2858
Bond Fund 1,918,412 $ 1.3388 1,315,534 $ 1.3913
Diversified 12,307,748 $ 1.5796 9,234,365 $ 1.5601
Equity Portfolio
Interest Income 37,392,341 $ 4.5395 37,034,471 $ 4.2800
Fund
5. Participants - The number of active and inactive participants in
the Plan by investment direction described in Article 6 of the
Plan was:
December 31,
1994 1993
Entirely in SBC Shares Fund 12,730 11,859
Entirely in Bond Fund 39 42
Entirely in Diversified Equity 711 646
Portfolio
Entirely in Interest Income Fund 10,044 11,116
Equally in SBC Shares Fund and Bond 217 214
Fund
Equally in SBC Shares Fund and 1,635 1,260
Diversified Equity Portfolio
Equally in SBC Shares Fund and 6,110 6,255
Interest Income Fund
Equally in Bond Fund and Diversified 236 203
Equity Portfolio
Equally in Diversified Equity 402 343
Portfolio and Interest Income Fund
Equally in SBC Shares Fund, Bond Fund 413 327
and Diversified Equity Portfolio
Equally in SBC Shares Fund, 761 549
Diversified Equity Portfolio and
Interest Income Fund
Total 33,298 32,814
6. Tax Status - The Internal Revenue Service issued a determination
letter on July 26, 1990, stating that the Plan is designed in
accordance with applicable sections of the Internal Revenue Code
(IRC). The Plan has been amended since the determination letter
was received. SBC has requested a determination that the Plan,
as amended, continues to be qualified. The Plan Administrator
believes that the Plan is currently designed and being operated
in compliance with the applicable requirements of the IRC.
7. Investments - The fair values of investments representing 5% or
more of Plan net assets at either December 31, 1994 or 1993 were:
1994 1993
Employee Stock Ownership Plan
SBC common shares:
allocated $ 162,843 $ 140,390
unallocated $ 158,112 $ 192,472
SBC Shares Fund
SBC common shares $ 397,552 $ 348,220
Interest Income Fund
Contracts with insurance
companies and other financial
institutions:
John Hancock $ 52,198 $ 60,318
Prudential Insurance Company $ 41,870 $ 13,556
of America
8. Long-Term Debt - Long-term debt consists of the 8.49% and 9.40%
Guaranteed Non-Salaried Employees' ESOP Notes due 2000 issued in
connection with the ESOP (as discussed in note 1). The aggregate
principal amount of long-term debt scheduled for repayment in
each of the five years subsequent to 1994 is $19,741 in 1995,
$21,174 in 1996, $22,281 in 1997, $23,469 in 1998 and $24,546 in
1999.
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1994
(Dollars in Thousands)
<CAPTION>
Description of Fair
Name of Issuer or Title of Issue Investment Cost Value
<S> <C> <C> <C>
Employee Stock Ownership Plan
* SBC common shares:
allocated 4,033,264 shares $ 114,431 $ 162,843
unallocated 3,916,076 shares 108,482 158,112
* Bankers Trust Company temporary cash investment 5,871 5,871
Total Employee Stock Ownership Plan 228,784 326,826
SBC Shares Fund
* SBC common shares 9,846,501 shares 232,082 397,552
* Bankers Trust Company temporary cash investment 5,414 5,414
Total SBC Shares Fund 237,496 402,966
Bond Fund
* Wells Fargo Government/Corporate Bond
Index Fund 20,800 units 2,307 2,156
* Bankers Trust Company temporary cash investment 120 120
Total Bond Fund 2,427 2,276
Diversified Equity Portfolio
* Wells Fargo Equity Index Fund 155,685 units 15,183 16,242
* Bankers Trust Company temporary cash investment 760 760
Total Diversified Equity Portfolio 15,943 17,002
Interest Income Fund (a)
John Hancock 5.00 % - 5.33 % 52,198 52,198
The Prudential Insurance Company
of America 6.88 % - 8.06 % 41,870 41,870
Provident National Life Insurance
Company 6.93 % - 7.01 % 26,002 26,002
Cassie Des Depots et Consignations 4.66 % 20,465 20,465
Metropolitan Life Insurance Company 7.93 % - 8.77 % 11,714 11,714
Pacific Mutual 7.17 % 5,957 5,957
158,206 158,206
* Bankers Trust Company temporary cash investment 18 18
Total Interest Income Fund 158,224 158,224
TOTAL $ 642,874 $ 907,294
* Party-in-Interest.
(a)Investments in this fund consist of guaranteed investment contracts
with insurance companies and similar contracts with other financial
institutions which provide for the payment of principal plus accrued
interest and are collateralized by obligations of other
organizations. The composite effective semi-annual interest rate for
the first and second six-month periods of 1994 was approximately 5.85%.
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.
</TABLE>
<TABLE>
SOUTHWESTERN BELL CORPORATION (SBC) SAVINGS AND SECURITY PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1994
(Dollars in Thousands)
<CAPTION> Current Value
of Asset on
Description of Purchase Selling Cost of Transaction Net gain
Identity of Party Involved Assets Price Price Asset Date or (loss)
Category (iii) transactions:
<S> <C> <C> <C> <C> <C> <C>
Bankers Trust Directed Account Cash Temporary $ 138,264 $ - $ 138,264 $ 138,264 $ 0
Fund Cash
Investments
Bankers Trust Directed Account Cash Temporary $ - $ 163,132 $ 163,132 $ 163,132 $ 0
Fund Cash
Investments
<FN>
There were no category (i), (ii), or (iv) transactions.
</TABLE>
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
By Benefit Plan Committee
By /s/ Cassandra C. Carr
Cassandra C. Carr, Chairman
Date: May 25, 1995
EX-23.b
Form 11-K for 1994
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 and 33-54309)
pertaining to the Southwestern Bell Corporation Savings and
Security Plan of our report dated May 22, 1995, with respect
to the financial statements and supplemental schedules of
the Southwestern Bell Corporation Savings and Security Plan
included in this Annual Report (Form 11-K) for the year
ended December 31, 1994.
ERNST & YOUNG LLP
San Antonio, Texas
May 22, 1995
