FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X Quarterly Report Pursuant to Section 13
or 15(d) of the
Securities Exchange Act of 1934
For the period ended March 31, 1995
or
___ Transition Report Pursuant to Section 13 or
15(d) of the
Securities Exchange Act of 1934
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
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
At April 28, 1995, 607,746,811 common shares were outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SBC COMMUNICATIONS INC.
CONSOLIDATED STATEMENTS OF INCOME
Dollars in millions except per share amounts
(Unaudited)
Three months ended
March 31,
1995 1994
Operating Revenues
Local service $ 1,539.9 $ 1,364.2
Network access 743.3 681.5
Long-distance service 210.2 223.6
Directory advertising 115.0 119.5
Other 269.3 257.4
Total operating revenues 2,877.7 2,646.2
Operating Expenses
Cost of services and products 867.5 839.5
Selling, general and administrative 758.7 716.3
Depreciation and amortization 532.2 492.0
Total operating expenses 2,158.4 2,047.8
Operating Income 719.3 598.4
Other Income (Expense)
Interest expense (133.8) (115.5)
Equity in net income of affiliates 4.5 70.0
Other expense - net (5.8) (13.9)
Total other income (expense) (135.1) (59.4)
Income Before Income Taxes 584.2 539.0
Income Taxes
Federal 170.7 159.0
State and local 18.3 22.3
Total income taxes 189.0 181.3
Net Income $ 395.2 $ 357.7
Earnings Per Common Share $ 0.65 $ 0.59
Weighted Average Number of Common
Shares Outstanding (in millions) 607.5 601.8
Dividends Declared Per Common Share $ 0.4125 $ 0.3950
See Notes to Consolidated Financial Statements.
<TABLE>
SBC COMMUNICATIONS INC.
CONSOLIDATED BALANCE SHEETS
Dollars in millions except per share amounts
<CAPTION>
March 31, December 31,
1995 1994
(Unaudited)
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 517.3 $ 364.6
Accounts receivable - net of allowances for uncollectibles
of $122.1 and $130.4 2,047.2 2,204.6
Material and supplies 140.0 141.8
Prepaid expenses 217.6 162.0
Deferred charges 258.0 240.1
Deferred income taxes 177.1 180.7
Other 155.2 199.5
Total current assets 3,512.4 3,493.3
Property, Plant and Equipment - at cost 29,566.2 29,256.4
Less: Accumulated depreciation and amortization 12,269.6 11,939.8
Property, Plant and Equipment - Net 17,296.6 17,316.6
Intangible Assets - Net of Accumulated Amortization of
$458.0 and $427.6 2,639.3 2,648.9
Investments in Equity Affiliates 1,841.9 1,748.0
Other Assets 788.0 798.5
Total Assets $26,078.2 $ 26,005.3
Liabilities and Shareowners' Equity
Current Liabilities
Debt maturing within one year $ 2,311.0 $ 1,668.6
Accounts payable and accrued liabilities 2,913.8 3,281.4
Dividends payable 250.7 240.8
Total current liabilities 5,475.5 5,190.8
Long-Term Debt 5,559.5 5,848.3
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes 2,317.4 2,319.7
Postemployment benefit obligation 2,580.0 2,707.2
Unamortized investment tax credits 357.8 369.8
Other noncurrent liabilities 1,498.9 1,213.9
Total deferred credits and other noncurrent liabilities 6,754.1 6,610.6
Shareowners' Equity
Common shares issued ($1 par value) 620.5 620.5
Capital in excess of par value 6,287.3 6,286.1
Retained earnings 2,740.8 2,593.5
Guaranteed obligations of employee stock ownership plans (302.5) (314.7)
Foreign currency translation adjustment (532.6) (366.5)
Treasury shares (at cost) (524.4) (463.3)
Total shareowners' equity 8,289.1 8,355.6
Total Liabilities and Shareowners' Equity $26,078.2 $ 26,005.3
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
SBC COMMUNICATIONS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in millions, increase (decrease) in cash and cash equivalents
(Unaudited)
<CAPTION>
Three months ended
March 31,
1995 1994
<S> <C> <C>
Operating Activities
Net income $ 395.2 $ 357.7
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 532.2 492.0
Undistributed earnings from investments in equity
affiliates (4.4) (69.1)
Provision for uncollectible accounts 32.2 27.8
Amortization of investment tax credits (12.0) (14.9)
Pensions and other postemployment benefits (100.6) (47.8)
Deferred income tax expense 41.3 50.8
Other - net (235.0) (289.2)
Total adjustments 253.7 149.6
Net Cash Provided by Operating Activities 648.9 507.3
Investing Activities
Construction and capital expenditures (460.3) (478.6)
Investments in affiliates (72.3) -
Purchase of short-term investments (98.0) (60.7)
Proceeds from short-term investments 122.8 121.0
Acquisitions (360.9) (563.8)
Net Cash Used in Investing Activities (868.7) (982.1)
Financing Activities
Net change in short-term borrowings with original
maturities of three months or less 599.7 502.4
Repayment of other short-term borrowings - (5.0)
Issuance of long-term debt 92.2 51.5
Repayment of long-term debt (15.7) (93.0)
Issuance of common shares - 11.1
Purchase of treasury shares (105.8) (43.3)
Issuance of treasury shares 16.5 10.0
Dividends paid (214.4) (202.4)
Net Cash Provided by Financing Activities 372.5 231.3
Net increase (decrease) in cash and cash equivalents 152.7 (243.5)
Cash and cash equivalents beginning of year 364.6 618.4
Cash and Cash Equivalents End of Period $ 517.3 $ 374.9
Cash paid during the three months ended March 31 for:
Interest $ 140.8 $ 124.4
Income taxes $ 320.9 $ 332.4
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
SBC COMMUNICATIONS INC.
CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY
Dollars in millions
(Unaudited)
<CAPTION>
Guaranteed
Obligations Foreign
Capital in of Employee Currency
Common Excess of Retained Stock Owner- Translation Treasury
Shares Par Value Earnings ship Plans Adjustment Shares
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993 $ 602.7 $ 5,577.0 $ 1,891.4 $ (352.9) $ (40.2) $ (109.6)
Net income - - 357.7 - - -
Dividends to shareowners - - (238.4) - - -
Reduction of debt associated with
Employee Stock Ownership Plans - - - 11.5 - -
Foreign currency translation adjustment - - - - 1.4 -
Issuance of common shares:
Dividend Reinvestment Plan 0.9 35.1 - - - -
Purchase of treasury shares - - - - - (43.4)
Issuance of treasury shares - 4.6 - - - 88.4
Other - - 1.6 - - -
Balance, March 31, 1994 $ 603.6 $ 5,616.7 $ 2,012.3 $ (341.4) $ (38.8) $ (64.6)
Balance, December 31, 1994 $ 620.5 $ 6,286.1 $ 2,593.5 $ (314.7) $ (366.5) $ (463.3)
Net income - - 395.2 - - -
Dividends to shareowners - - (250.0) - - -
Reduction of debt associated with
Employee Stock Ownership Plans - - - 12.2 - -
Foreign currency translation adjustment - - - - (166.1) -
Purchase of treasury shares - - - - - (105.8)
Issuance of treasury shares:
Dividend Reinvestment Plan - 2.5 - - - 29.3
Other - (1.3) - - - 15.4
Other - - 2.1 - - -
Balance, March 31, 1995 $ 620.5 $ 6,287.3 $ 2,740.8 $ (302.5) $ (532.6) $ (524.4)
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
* * * *
SELECTED FINANCIAL AND OPERATING DATA
At March 31, or for the three months then ended: 1995 1994
Return on weighted average shareowners' equity # . . . . 18.88% 18.34%
Debt ratio # . . . . . . . . . . . . . . . . . . . . . . . . 48.70% 48.31%
Network access lines in service (000) # . . . . . . . . . . 13,794 13,313
Access minutes of use (000,000). . . . . . . . . . . . . . 12,678 11,423
Long-distance messages billed (000) #. . . . . . . . . . . 243,792 248,919
Cellular customers (000) # . . . . . . . . . . . . . . . . 3,092 2,210
Number of employees. . . . . . . . . . . . . . . . . . . . 58,380 59,040
# 1994 amounts have been restated to conform to the current year's
classifications.
SBC COMMUNICATIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. PREPARATION OF INTERIM FINANCIAL STATEMENTS - The consolidated
financial statements have been prepared by SBC Communications Inc.
(SBC), formerly known as Southwestern Bell Corporation, pursuant to
the rules and regulations of the Securities and Exchange Commission
(SEC) and, in the opinion of management, include all adjustments
(consisting only of normal recurring accruals) necessary to present
fairly the results for the interim periods shown. Certain information
and footnote disclosures, normally included in financial statements
prepared in accordance with generally accepted accounting principles,
have been condensed or omitted pursuant to such SEC rules and
regulations. Management believes that the disclosures made are
adequate to make the information presented not misleading. Certain
reclassifications have been made to the 1994 consolidated financial
statements to conform with the 1995 presentation. The results for the
interim periods are not necessarily indicative of results for the full
year. The financial statements contained herein should be read in
conjunction with the consolidated financial statements and notes
thereto included in SBC's 1994 Annual Report to Shareowners.
2. CONSOLIDATION - The consolidated financial statements include the
accounts of SBC and its majority-owned subsidiaries. Southwestern
Bell Telephone Company (Telephone Company) is SBC's largest
subsidiary. All significant intercompany transactions are eliminated
in the consolidation process. Investments in companies in which SBC
owns 20% to 50% of the voting common stock or otherwise exercises
significant influence over operating and financial policies of the
company are accounted for under the equity method. Earnings from
foreign investments accounted for under the equity method are included
for periods ended within three months of the date of SBC's
Consolidated Statements of Income.
SBC COMMUNICATIONS INC.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Dollars in millions except per share amounts
RESULTS OF OPERATIONS
SBC Communications Inc. (SBC) reported net income of $395.2, or $.65
per share, for the first quarter of 1995. Financial results for the
first quarters of 1995 and 1994 are summarized as follows:
First quarter Percent
change
1995 vs.
1995 1994 1994
Operating revenues $ 2,877.7 $ 2,646.2 8.7%
Operating expenses $ 2,158.4 $ 2,047.8 5.4%
Net income $ 395.2 $ 357.7 10.5%
The primary factors contributing to the increase in net income during
the first quarter were growth in demand for services and products at
Southwestern Bell Telephone Company (Telephone Company) and
Southwestern Bell Mobile Systems (Mobile Systems). Results for 1995
also reflect the effects of the recent decline in value of the Mexican
peso on SBC's equity affiliate, Telefonos de Mexico, S.A. de C.V.
(Telmex).
SBC's operating revenues in the first quarter of 1995 increased
$231.5, or 8.7%, over the first quarter of 1994. Components of
operating revenues for the first quarters of 1995 and 1994 are as
follows:
First quarter Percent
change
1995 vs.
1995 1994 1994
Local service
Landline $ 1,037.2 $ 991.5 4.6%
Wireless 502.7 372.7 34.9
Network access
Interstate 497.4 454.9 9.3
Intrastate 245.9 226.6 8.5
Long-distance service 210.2 223.6 (6.0)
Directory advertising 115.0 119.5 (3.8)
Other 269.3 257.4 4.6
Total $ 2,877.7 $ 2,646.2 8.7%
Landline local service revenues increased in the first quarter of
1995 due primarily to increases in demand, including 3.6% growth
in the number of access lines since March 31, 1994. This
increase was partially offset by accruals for potential revenue
sharing in Texas.
Wireless local service revenues increased in the first quarter of
1995 due primarily to a 39.9% increase in cellular customers
since March 31, 1994 (31.3% increase excluding acquisitions),
offset partially by a decline in average revenue per customer.
Interstate network access revenues increased in the first quarter
of 1995 due primarily to an increase in demand for access
services and growth in end user charges attributable to an
increasing access line base.
Intrastate network access revenues increased in the first quarter
of 1995 due primarily to increases in demand, partially offset by
accruals for potential revenue sharing in Texas.
Long-distance service revenues decreased in the first quarter of
1995 due to competition related decreases in residential message
volumes.
Other operating revenues increased in the first quarter of 1995
due to increased demand for the Telephone Company's non-regulated
services and products, including Caller ID equipment, partially
offset by a decrease in equipment sales revenues at Mobile
Systems.
SBC's operating expenses in the first quarter of 1995 increased
$110.6, or 5.4%, over the first quarter of 1994. Components of
operating expenses for the first quarters of 1995 and 1994 are as
follows:
First quarter Percent
change
1995 vs.
1995 1994 1994
Cost of services and products $ 867.5 $ 839.5 3.3%
Selling, general and 758.7 716.3 5.9
administrative
Depreciation and amortization 532.2 492.0 8.2
Total $ 2,158.4 $ 2,047.8 5.4%
Cost of services and products increased for the first quarter of
1995 due to increased demand for cellular services, demand
related increases for enhanced services at the Telephone Company
and annual compensation increases. These increases were
partially offset by the absence of expenses associated with
United Kingdom cable television operations, which were changed to
the equity method of accounting in the fourth quarter of 1994,
and a decrease in switching system software license fees at the
Telephone Company.
Selling, general and administrative expenses increased in the
first quarter of 1995 due to growth in cellular operations,
higher benefit expenses and increased advertising.
Depreciation and amortization increased in the first quarter of
1995 due primarily to a growth in plant level and changes in
plant composition, primarily at Mobile Systems and the Telephone
Company, and, to a lesser extent, the estimated effect of
depreciation represcription expected to be granted to the
Telephone Company later this year which would be retroactive to
January 1, 1995.
Interest expense increased $18.3, or 15.8%, in the first quarter of
1995 due primarily to debt issued for acquisitions in France and Chile
and growth and acquisitions at Mobile Systems.
Equity in net income of affiliates decreased $65.5 in the first
quarter of 1995 primarily due to the effects of the decline in the
value of the Mexican peso on SBC's earnings from its investment in
Telmex. Earnings decreased equally from exchange losses on Telmex's
non-peso denominated debt and reductions in the translated amount of
U.S. dollar earnings from Telmex's operations. SBC's investment in
Telmex is recorded under U.S. generally accepted accounting
principles, which exclude inflation adjustments and include
adjustments for the purchase method of accounting.
Absent any further changes in the value of the peso during the
remainder of 1995, it is anticipated that SBC's earnings from Telmex
in 1995 will decline from 1994 levels due to the decline in the peso's
value compared to 1994.
Also contributing to the decrease between years is the inclusion in
1995 of United Kingdom cable operations, which were changed to the
equity method of accounting in the fourth quarter of 1994 due to
decreased ownership percentage, and the investments in France and
Chile made in late 1994 and early 1995, respectively.
OPERATING ENVIRONMENT AND TRENDS OF THE BUSINESS
Federal Regulatory Developments
The Telephone Company has operated under price cap regulation since
1991. Under this system, prices charged by local exchange carriers
(LEC) for interstate access services are subject to a cap which is
adjusted annually for inflation, a productivity offset and certain
other cost changes. The productivity offset is a fixed percentage
offset to prices, intended to reflect the effects of increased
productivity. Under the original plan, a productivity offset of
either 3.3% or 4.3% was elected annually by each LEC. Since 1991, the
Telephone Company has elected the 3.3% productivity offset, which
requires no sharing of profits up to a 12.25% rate of return on
investment, 50% sharing of profits over 12.25% and 100% sharing over
16.25%.
In 1994, the Federal Communications Commission (FCC) initiated a
review of the existing price cap plan. As a result, in March 1995 the
FCC adopted revised price cap rules which become effective August 1,
1995. The rules require an initial reduction in price caps at a level
based on each LEC's previous selection of productivity offsets. This
would represent a 2.8% initial reduction in price caps for the
Telephone Company. In addition, the new rules give LECs three
productivity/sharing options: (1) 4.0% productivity offset with 50%
sharing of profits above 12.25%, and 100% sharing of profits over
13.25%; (2) 4.7% productivity offset with 50% sharing of profits over
12.25% and 100% sharing of profits over 16.25%; and (3) 5.3%
productivity offset with no sharing. The Telephone Company intends to
elect the 5.3% productivity offset, no-sharing option. Other changes
include the adoption of additional pricing flexibility for certain
services, and a revision to exogenous rules to exclude accounting
changes with no cash flow effects, including Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." The total effect of
these changes in price-cap regulation is expected to result in an
annualized reduction in interstate access revenues of approximately
$150.
The plan described above is an interim measure, as the FCC has
indicated that the rules will be revised again in 1996. The FCC is
expected to conduct further proceedings to address various pricing and
productivity issues, and to perform a broader review of how price cap
regulation fits in a competitive environment. The Telephone Company
intends to appeal the revised price cap rules.
Competitive Environment
Pending Legislation
During the first quarter of 1995, legislation was introduced at the
federal and state levels which addresses various aspects of
competition within, and regulation of, the telecommunications
industry. Significant features of the bills, all of which are
currently pending, are discussed below.
Several bills have been introduced in the U.S. Congress which could
significantly affect SBC. Among other things, these bills would, to
differing degrees, define the conditions under which SBC could offer
interLATA long-distance service. Some of these bills would require
the Telephone Company to comply with certain terms and conditions
intended to promote local exchange competition before providing relief
from the long-distance restrictions. The number of potential bills
makes it impossible for management to predict what form final
legislation, if any, will take.
In Texas, House Bill 2128 would allow the Telephone Company to elect
to move from rate-of-return regulation to price regulation, which
includes pricing flexibility and elimination of earnings sharing. In
addition, the Telephone Company would commit to a $1.1 billion
infrastructure investment over a six year period. The bill would also
establish a transition to local exchange competition by allowing
multiple providers of local exchange services. Access rates and
intraLATA toll rates would be reduced but the revenue streams
historically used to offset the cost of providing service to all
points within the service area (known as universal service) would be
replaced by a fund contributed to by all providers. The Telephone
Company would remain the default carrier of intraLATA "1 plus" traffic
until SBC is allowed to carry interLATA long-distance. The Texas
Senate is currently considering similar legislation.
All of the pending legislation described above is subject to change.
At this time it is not known whether or in what form any of the above
legislation might be enacted.
Judicial Matters
In 1994, SBC filed a lawsuit in the United States District Court in
Dallas (Court), seeking to overturn provisions of the Cable
Communications Policy Act of 1984, in order to provide cable
television service in the Telephone Company's five-state area. In
March 1995, the Court ruled in favor of SBC. SBC plans to offer
interactive and cable television programming in 1996 on a test basis
as part of a broadband market trial in Richardson, Texas.
Alternatives for offering such services in other markets within the
five-state area are being evaluated in connection with the Richardson
trial.
In connection with the divestiture of SBC and the other Regional
Holding Companies (RHCs) from AT&T, ordered by the United States
District Court for the District of Columbia (District Court), SBC was
prohibited from providing interexchange services, among other things.
In April 1995, the District Court ruled that the RHCs may offer long-
distance services to their cellular customers through resale
arrangements with interexchange carriers, subject to certain
conditions. Various parties, including SBC, have filed notices of
appeal to this order. SBC is presently evaluating its options for
offering these services.
Also in April 1995, SBC joined with Bell Atlantic Corporation,
BellSouth Corporation, the U.S. Telephone Association and two other
telephone industry groups in filing a lawsuit against the FCC and the
United States Attorney General. The lawsuit, filed in the United
States District Court in Alexandria, Virginia, challenges the FCC's
announced intention to require telephone companies to file
applications with the FCC before they acquire or operate cable systems
in their telephone service area. SBC is unable to predict the outcome
of this proceeding.
Other Business Matters
Pending Litigation
In March 1995, the Telephone Company reached a preliminary settlement
with the municipalities involved in the class action case City of Port
Arthur, et al., v. Southwestern Bell Telephone Company, et al. which
is further described in SBC's 1994 Annual Report to Shareowners in the
"Other Business Matters" section of "Management's Discussion and
Analysis of Financial Condition and Results of Operations". The
settlement has been approved by the court, subject to ratification by
July 1995 by the municipalities involved. If ratified, the settlement
will not materially affect SBC's results of operations.
Personal Communications Services (PCS) Licenses
The FCC auction for PCS licenses concluded in March 1995, with SBC
being granted licenses in Memphis, Little Rock and Tulsa for
approximately $73. These licenses complement existing cellular
territories.
Dispositions
As part of the strategic alliance discussed in SBC's 1994 Annual
Report to Shareowners, Compagne Generale des Eaux (CGE) invested $247
in March 1995 for an effective 10% interest in SBC's Washington, D.C.
- - Baltimore wireless operations.
Name Change
On April 28, 1995, SBC filed an amendment to its Restated Certificate
of Incorporation with the Secretary of State of Delaware reflecting
the change in name from Southwestern Bell Corporation to SBC
Communications Inc.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of 1995, as in 1994, SBC's primary source of
funds continued to be cash provided by operating activities. Other
sources of cash used for 1995 acquisitions and affiliate investments
included proceeds from the issuance of short-term debt and sales of
short-term investments.
SBC had $517.3 of cash and cash equivalents available at March 31,
1995. SBC has entered into agreements with several banks for lines of
credit totaling $1,020.0, all of which may be used to support
commercial paper borrowings. These lines had not been utilized as of
March 31, 1995. Commercial paper borrowings as of March 31, 1995
totaled $1,948.2.
SBC COMMUNICATIONS INC.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 3 Restated Certificate of Incorporation of SBC
Communications Inc., filed with the
Secretary of State of Delaware on April 28, 1995.
Exhibit 12 Computation of Ratios of Earnings to Fixed
Charges.
Exhibit 27 Financial Data Schedule.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the first quarter
ended March 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SBC Communications Inc.
May 9, 1995 /s/ Donald E. Kiernan
Donald E. Kiernan
Senior Vice President, Treasurer
and Chief Financial Officer
Exhibit 3
RESTATED CERTIFICATE OF INCORPORATION
OF
SBC COMMUNICATIONS INC.
SBC COMMUNICATIONS INC., a Corporation organized and
existing under the laws of the State of Delaware, hereby
certifies as follows:
1. The name of the corporation is SBC COMMUNICATIONS INC.,
and the name under which the corporation was originally
incorporated was SOUTHWESTERN BELL CORPORATION. The date of
filing of its original Certificate of Incorporation with the
Secretary of State was October 5, 1983.
2. This Restated Certificate of Incorporation only restates
and integrates and does not further amend the provisions of the
Restated Certificate of Incorporation of this corporation as
heretofore amended or supplemented and there is no discrepancy
between those provisions and the provisions of this Restated
Certificate of Incorporation.
3. The text of the Restated Certificate of Incorporation as
amended or supplemented heretofore is hereby restated and without
further amendments or changes to read as herein set forth in
full:
ARTICLE ONE
The name of the corporation is SBC Communications Inc.
ARTICLE TWO
The address of the registered office of the corporation in
the State of Delaware is 1209 Orange Street, Wilmington, Delaware
19801, County of New Castle. The name of the registered agent of
the corporation at such address is The Corporation Trust Company.
ARTICLE THREE
The purpose of the corporation is to engage in any business,
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE FOUR
The corporation shall have perpetual existence.
ARTICLE FIVE
The aggregate number of shares which the corporation is
authorized to issue is 1,110,000,000 shares, consisting of
1,100,000,000 common shares having a par value of $1 per share and
10,000,000 preferred shares having a par value of $1 per share.
The preferred shares may be issued from time to time in one or
more series. The Board of Directors is authorized to establish by
resolution the number of preferred shares in each series, the
designation thereof, the powers, preferences, and rights and the
qualifications, limitations or restrictions of each series and the
variations, if any, as between each series.
No holder of any class or series of shares shall have any
preemptive right to purchase any additional issue of shares of the
corporation of any class or series or any security convertible into
any class or series of shares.
In accordance with this Article Five, the Board of Directors
has designated shares of Preferred Stock with the voting powers,
preferences, rights, qualifications, limitations, and restrictions
as set forth on Exhibit A hereto.
ARTICLE SIX
The business and affairs of the corporation shall be under
direction of a Board of Directors. The number of directors, their
terms and the manner of their election shall be fixed by the Bylaws
of the corporation. The directors need not be elected by written
ballot unless required by the Bylaws of the corporation.
No director of this corporation shall be liable to this
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability 1) for any
breach of the director's duty of loyalty to the corporation or its
stockholders; 2) for acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of the law; 3)
under Section 174 of the Delaware General Corporation Law; or 4)
for any transaction from which a director derived an improper
benefit.
ARTICLE SEVEN
The Board of Directors is expressly authorized to adopt, amend
or repeal the Bylaws of the corporation, except that any Bylaw of
the corporation providing for the maximum number of Directors that
may serve on the Board of Directors, or providing for a classified
Board of Directors with staggered terms of office or requiring the
approval by the shareholders or the Board of Directors of any
business combinations may only be amended or repealed by a two-
thirds majority vote of the total number of shares of stock of the
corporation then outstanding and entitled to vote.
ARTICLE EIGHT
Notwithstanding any other provisions of this Certificate of
Incorporation or the Bylaws of the corporation, no action which is
required to be taken or which may be taken at any annual or special
meeting of stockholders of the corporation may be taken by written
consent without a meeting, except where such consent is signed by
stockholders representing at least two-thirds of the total number
of shares of stock of the corporation then outstanding and entitled
to vote thereon.
ARTICLE NINE
The corporation reserves the right to amend and repeal any
provision contained in this Certificate of Incorporation in the
manner prescribed by the laws of the State of Delaware. All rights
herein conferred are granted subject to this reservation.
4. This Restated Certificate of Incorporation was duly
adopted by the Board of Directors on April 28, 1995, in accordance
with Section 245 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said SBC Communications Inc. has caused
this Restated Certificate of Incorporation to be signed by Edward
E. Whitacre, Jr., its Chairman of the Board of Directors, President
and Chief Executive Officer, and attested by Judith M. Sahm, its
Secretary, this 28th day of April, 1995.
SBC COMMUNICATIONS INC.
(seal) /s/ Edward E. Whitacre, Jr.
Edward E. Whitacre, Jr.
Chairman of the Board, President
and Chief Executive Officer
Attest: /s/ Judith M. Sahm
Judith M. Sahm
Secretary
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
SOUTHWESTERN BELL CORPORATION*
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
That pursuant to the authority conferred upon the Board
of Directors by the Restated Certificate of Incorporation of the
said Corporation, the said Board of Directors on January 27, 1989,
adopted the following resolution creating a series of 4,000,000
shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Corporation in accordance with the
provisions of its Restated Certificate of Incorporation, a series
of Preferred Stock of the Corporation be and it hereby is created,
and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock" and the number of shares constituting such series
shall be 4,000,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series A Junior Participating
Preferred Stock with respect to dividends, the holders of shares of
Series A Junior Participating Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends
payable in cash on the last day of April, July, October and January
in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Junior Participating Preferred
- -----
*
Pursuant to an amendment to the Restated Certificate of
Incorporation effective April 28, 1995, the name of the Corporation
was changed to SBC Communications Inc.
- -----
Stock, in an amount per share (rounded to the nearest cent) equal
to the greater of (a) $5.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock,
par value $1.00 per share of the Corporation (the "Common Stock")
since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series A Junior Participating Preferred Stock. In the event the
Corporation shall at any time after January 27, 1989 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to
which holders of shares of Series A Junior Participating Preferred
Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred Stock
as provided in paragraph (A) above immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend
of $5.00 per share on the Series A Junior Participating Preferred
Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Junior Participating Preferred
Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Junior
Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which
record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights. The holders of shares of
Series A Junior Participating Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the shareowners of the Corporation. In the
event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of votes per
share to which holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred Stock
and the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of the shareowners of
the Corporation.
(C) (i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in an
amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a
period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series A Junior
Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock (including
holders of the Series A Junior Participating Preferred Stock)
with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective
of series, shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of
the holders of Series A Junior Participating Preferred Stock
may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of shareowners, and thereafter at annual
meetings of shareowners, provided that neither such voting
right nor the right of the holders of any other series of
Preferred Stock, if any, to increase, in certain cases, the
authorized number of Directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Preferred
Stock outstanding shall be present in person or by proxy. The
absence of a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of Preferred
Stock shall exercise such voting right initially during an
existing default period, they shall have the right, voting as
a class, to elect Directors to fill such vacancies, if any, in
the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting,
to elect two (2) Directors. If the number which may be so
elected at any special meeting does not amount to the required
number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as
shall be necessary to permit the election by them of the
required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the
number of Directors shall not be increased or decreased except
by vote of the holders of Preferred Stock as herein provided
or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series A Junior Participating
Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may
order, or any shareowner or shareowners owning in the
aggregate not less than ten percent (10%) of the total number
of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the
holders of Preferred Stock, which meeting shall thereupon be
called by the President, a Vice-President or the Secretary of
the Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to
vote pursuant to this paragraph (C) (iii) shall be given to
each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on
the books of the Corporation. Such meeting shall be called for
a time not earlier than 20 days and not later than 60 days
after such order or request or in default of the calling of
such meeting within 60 days after such order or request, such
meeting may be called on similar notice by any shareowner or
shareowners owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this paragraph
(C) (iii), no such special meeting shall be called during the
period within 60 days immediately preceding the date fixed for
the next annual meeting of the shareowners.
(iv) In any default period, the holders of Common
Stock, and other classes of Stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) Directors voting
as a class, after the exercise of which right (x) the
Directors so elected by the holders of Preferred Stock shall
continue in office until their successors shall have been
elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may
(except as provided in paragraph (C) (ii) of this Section 3)
be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock which
elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the
holders of a particular class of Stock shall include Directors
elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the certificate of
incorporation or bylaws irrespective of any increase made
pursuant to the provisions of paragraph (C) (ii) of this
Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the certificate
of incorporation or bylaws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in
the preceding sentence may be filled by a majority of the
remaining Directors.
(D) Except as set forth herein, holders of Series A
Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears, thereafter
and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Junior Participating
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Participating Preferred Stock,
provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to Dividends or upon dissolution,
liquidation or winding up) to the Series A Junior
Participating Preferred Stock;
(iv) purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock,
or any shares of stock ranking on a parity with the Series A
Junior Participating Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as
determined by the Board Of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a
new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution shall
be made to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount
of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i)
the Series A Liquidation Preference by (ii)100 (as appropriately
adjusted as set forth in subparagraph C below to reflect such
events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause (ii), the
"Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Junior Participating
Preferred Stock and Common Stock, respectively, holders of Series A
Junior Participating Preferred Stock and holders of shares of
Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all other
series of Preferred Stock, if any, which rank on a parity with the
Series A Junior Participating Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences.
In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then
such remaining assets shall be distributed ratably to the holders
of Common Stock.
(C) In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the Outstanding Common
Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment. The Restated Certificate of
Incorporation of the Corporation shall not be further amended in
any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior Participating
Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Junior Participating Preferred
Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
<TABLE>
EXHIBIT 12
SBC COMMUNICATIONS INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Dollars in Millions
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
1995 1994 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Income Before Income Taxes,
Extraordinary Loss and Cumulative
Effect of Changes in
Accounting Principles* $ 579.8 $ 469.9 $2,300.0 $1,882.9 $1,701.2 $1,557.0 $1,541.4
Add: Interest Expense 133.8 115.5 480.2 496.2 530.0 577.7 529.7
1/3 Rental Expense 11.7 10.0 41.8 41.0 45.1 37.5 43.4
Adjusted Earnings $ 725.3 $ 595.4 $2,822.0 $2,420.1 $2,276.3 $2,172.2 $2,114.5
Total Interest Charges $ 133.8 $ 115.5 $ 480.2 $ 496.2 $ 530.0 $ 577.7 $ 529.7
1/3 Rental Expense 11.7 10.0 41.8 41.0 45.1 37.5 43.4
Adjusted Fixed Charges $ 145.5 $ 125.5 $ 522.0 $ 537.2 $ 575.1 $ 615.2 $ 573.1
Ratio of Earnings to Fixed Charges 4.98 4.74 5.41 4.51 3.96 3.53 3.69
<FN>
*Undistributed earnings on investments accounted for under the equity method have been excluded.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SBC
COMMUNICATIONS INC.'S MARCH 31, 1995 CONSOLIDATED FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 517,300
<SECURITIES> 0<F1>
<RECEIVABLES> 2,169,300
<ALLOWANCES> 122,100
<INVENTORY> 0<F1>
<CURRENT-ASSETS> 3,512,400
<PP&E> 29,566,200
<DEPRECIATION> 12,269,600
<TOTAL-ASSETS> 26,078,200
<CURRENT-LIABILITIES> 5,475,500
<BONDS> 5,559,500
<COMMON> 620,500
0
0
<OTHER-SE> 7,668,600
<TOTAL-LIABILITY-AND-EQUITY> 26,078,200
<SALES> 0<F2>
<TOTAL-REVENUES> 2,877,700
<CGS> 0<F3>
<TOTAL-COSTS> 867,500
<OTHER-EXPENSES> 532,200
<LOSS-PROVISION> 32,200
<INTEREST-EXPENSE> 133,800
<INCOME-PRETAX> 584,200
<INCOME-TAX> 189,000
<INCOME-CONTINUING> 395,200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 395,200
<EPS-PRIMARY> .65
<EPS-DILUTED> 0
<FN>
<F1>THIS AMOUNT IS IMMATERIAL.
<F2>NET SALES OF TANGIBLE PRODUCTS IS NOT MORE THAN 10% OF TOTAL OPERATING
REVENUES AND THEREFORE HAS NOT BEEN STATED SEPARATELY IN THE FINANCIAL
STATEMENTS PURSUANT TO REGULATION S-X, RULE 5-03(B). THIS AMOUNT IS INCLUDED
IN THE "TOTAL REVENUES" TAG.
<F3>COST OF TANGIBLE GOODS SOLD IS INCLUDED IN COST OF SERVICES AND PRODUCTS
IN THE FINANCIAL STATEMENTS AND THE "TOTAL-COST" TAG, PURSUANT TO
REGULATION S-X, RULE 5-03(B).
</FN>
</TABLE>
