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, 1995
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.
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, 1995 on Form 10-K as set
forth in the pages attached hereto:
(1) Exhibit 99.a Annual Report on Form 11-K for the SBC Savings
Plan for the year 1995.
(2) Exhibit 99.b Annual Report on Form 11-K for the SBC Savings and
Security Plan for the year 1995.
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 14th day
of June, 1996.
SBC COMMUNICATIONS INC.
by /s/ Donald E. Kiernan
Donald E. Kiernan
Senior Vice President, Treasurer
and Chief Financial Officer
June 14, 1996
EX-99.a
Form 10-K for 1995
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, 1995
Commission File Number 1-8610
_____________
SBC SAVINGS PLAN
_____________
SBC COMMUNICATIONS INC.
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, 1995
Statement of Net Assets Available for Plan Benefits as of
December 31, 1994
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1995
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1994
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
SBC Savings Plan
We have audited the accompanying statements of net assets
available for plan benefits of the SBC Savings Plan (the Plan) as of
December 31, 1995 and 1994, and the related statements of changes in
net assets available for plan benefits for the years then ended.
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, 1995 and 1994, and the
changes in its net assets available for plan benefits for the years
then ended, 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, 1995
listed in the table of contents are presented for purposes of
complying with Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security
Act of 1974, and are not a required part of the basic financial
statements. The fund information in the statement of net assets
available for plan benefits and the statement of changes in net assets
available for plan benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in our 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 31, 1996
<TABLE>
SBC SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Asset Global
Ownership Shares Bond Equity Income Allocation Equity Loan
Plan Fund Fund Portfolio Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
SBC common shares:
allocated $313,154 $ - $ - $ - $ - $ - $ - $ - $313,154
unallocated 274,684 - - - - - - - 274,684
other - 590,738 - - - - - - 590,738
BZW Barclays
Government/ - - 36,556 - - - - - 36,556
Corporate Bond
Index Fund E
BZW Barclays Equity - - - 235,829 - - - - 235,829
Index Fund E
Contracts with insurance
companies and other - - - - 241,440 - - - 241,440
financial institutions
BZW Barclays U.S.
Tactical Asset - - - - - 9,162 - - 9,162
Allocation Fund E
BZW Barclays U.S.
Equity Market - - - - - - 10,796 - 10,796
Fund E
BZW Barclays
EAFE Equity - - - - - - 3,455 - 3,455
Index Fund E
Loans to
plan participants - - - - - - - 70,492 70,492
Temporary
cash investments 8,696 3,688 109 910 1,774 38 65 - 15,280
Total Investment 596,534 594,426 36,665 236,739 243,214 9,200 14,316 70,492 1,801,586
Contributions receivable:
Participant - 57 - 3 - - - - 60
Employer - - - - - - - - -
Total Contributions
Receivable - 57 - 3 - - - - 60
</TABLE>
<TABLE>
SBC SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Asset Global
Ownership Shares Bond Equity Income Allocation Equity Loan
Plan Fund Fund Portfolio Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Dividends and interest 45 13 4 11 12 - - 36 121
receivable
Transfers receivable
from other funds
and plans 21 - - 33 - 196 162 213 625
Total Assets 596,600 594,496 36,669 236,786 243,226 9,396 14,478 70,741 1,802,392
LIABILITIES
Transfers payable
to other funds - 290 58 - 253 - - - 601
and plans
Payable for investments - - 203 812 1,237 155 102 - 2,509
purchased
Administrative 28 54 8 41 28 4 3 - 166
expenses
Interest payable 6,412 - - - - - - - 6,412
Current portion of 31,906 - - - - - - - 31,906
long-term debt
Long-term debt 135,837 - - - - - - - 135,837
Total Liabilities 174,183 344 269 853 1,518 159 105 - 177,431
Net Assets Available
for Plan Benefits $422,417 $594,152 $36,400 $235,933 $241,708 $9,237 $14,373 $70,741 $1,624,961
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
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 Loan
Plan Fund Fund Portfolio Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
SBC common shares:
allocated $192,901 $ - $ - $ - $ - $ - $192,901
unallocated 228,549 - - - - - 228,549
other - 425,351 - - - - 425,351
Wells Fargo Government/
Corporate Bond Index Fund - - 33,090 - - - 33,090
Wells Fargo Equity Index Fund - - - 153,872 - - 153,872
Contracts with insurance companies
and other financial institutions - - - - 238,845 - 238,845
Loans to plan participants - - - - - 51,982 51,982
Temporary cash investments 7,810 6,371 731 3,932 184 - 19,028
Total Investments 429,260 431,722 33,821 157,804 239,029 51,982 1,343,618
Contributions receivable:
Participant - 421 42 254 190 - 907
Employer 2,473 - - - - - 2,473
Total Contributions Receivable 2,473 421 42 254 190 - 3,380
</TABLE>
<TABLE>
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 Loan
Plan Fund Fund Portfolio Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Dividends and interest receivable 35 21 208 395 8 319 986
Transfers receivable from other
funds and plans - - - 24 2,108 1,793 3,925
Other 453 - - - - - 453
Total Assets 432,221 432,164 34,071 158,477 241,335 54,094 1,352,362
LIABILITIES
Transfers payable to other
funds and plans - 2,433 1,491 - - - 3,924
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 197,470 2,563 1,698 387 5 - 202,123
Net Assets Available for Plan
Benefits $234,751 $429,601 $32,373 $158,090 $241,330 $54,094 $1,150,239
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SBC SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Asset Global
Ownership Shares Bond Equity Income Allocation Equity Loan
Plan Fund Fund Portfolio Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available
for Plan Benefits $234,751 $429,601 $32,373 $158,090 $241,330 $ - $ - $54,094 $1,150,239
December 31, 1994
Additions to Net Assets:
Contributions and transfers:
Participant - 27,299 2,632 17,132 12,337 317 557 - 60,274
contributions
Employer 19,219 - - - - - - - 19,219
contributions
Transfers of
participants'
balances - net - (27,986) (2,638) 9,711 (10,136) 8,313 12,803 13,358 3,425
Forfeitures 423 - - - - - - - 423
Proceeds from 7,500 - - - - - - - 7,500
debt refinancing
Loan transfer 29,580 - - - - - - - 29,580
56,722 (687) (6) 26,843 2,201 8,630 13,360 13,358 120,421
Investment income:
Dividends on SBC 16,932 17,031 - - - - - - 33,963
common shares
Other dividends - - - 1,702 - - - - 1,702
Interest 307 247 884 - 15,040 1 1 4,308 20,788
17,239 17,278 884 1,702 15,040 1 1 4,308 56,453
Net appreciation
(depreciation) in
value of investments 174,432 175,696 5,231 59,323 - 658 1,075 - 416,415
Total Net Additions 248,393 192,287 6,109 87,868 17,241 9,289 14,436 17,666 593,289
</TABLE>
<TABLE>
SBC SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest Asset Global
Ownership Shares Bond Equity Income Allocation Equity Loan
Plan Fund Fund Portfolio Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Administrative
expenses 240 476 54 264 259 13 12 - 1,318
Forfeitures 423 - - - - - - - 423
Interest expense 14,107 - - - - - - - 14,107
Loan payment - 29,580 - - - - - - - 29,580
principal
Refinanced 7,500 - - - - - - - 7,500
long-term debt
Distributions to
participants 8,877 27,260 2,028 9,761 16,604 39 51 1,019 65,639
Total Deductions 60,727 27,736 2,082 10,025 16,863 52 63 1,019 118,567
Net Assets Available
for Plan Benefits,
December 31, 1995 $422,417 $594,152 $36,400 $235,933 $241,708 $9,237 $14,373 $70,741 $1,624,961
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
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 Diversified
Ownership Shares Bond Equity Income Telephone Loan
Plan Fund Fund Portfolio Fund Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1993 $233,508 $414,920 $35,545 $143,718 $244,712 $767 $50,021 $1,123,191
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 - 10,334 (2,774) 6,287 (12,046) - 2,010 3,811
Forfeitures 185 - - - - - - 185
Proceeds from debt refinancing 8,500 - - - - - - 8,500
Loan transfer 27,375 - - - - - - 27,375
59,049 37,171 459 22,472 787 - 2,010 121,948
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 - 3,693 21,069
16,657 15,939 2,384 4,343 14,530 - 3,693 57,546
Net appreciation (depreciation) in
value of investments (12,090) (11,020) (3,537) (2,036) - - - (28,683)
Total Net Additions 63,616 42,090 (694) 24,779 15,317 - 5,703 150,811
</TABLE>
<TABLE>
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 Diversified
Ownership Shares Bond Equity Income Telephone Loan
Plan Fund Fund Portfolio Fund Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Administrative expenses 113 72 27 60 77 - - 349
Forfeitures 185 - - - - - - 185
Interest expense 15,773 - - - - - - 15,773
Loan payment - principal 27,375 - - - - - - 27,375
Refinanced long-term debt 8,500 - - - - - - 8,500
Distributions to participants 10,427 27,337 2,451 10,347 18,622 767 1,630 71,581
Total Deductions 62,373 27,409 2,478 10,407 18,699 767 1,630 123,763
Net Assets Available for Plan
Benefits, December 31, 1994 $234,751 $429,601 $32,373 $158,090 $241,330 $ - $54,094 $1,150,239
<FN>
See Notes to Financial Statements.
</TABLE>
SBC SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Dollars in thousands, Except per Unit Amounts)
1. Plan Description - The SBC Savings Plan (Plan) was established by
SBC Communications Inc. (SBC) to provide a convenient way for
eligible employees to save for retirement on a regular and long-
term basis. The following description of the Plan provides only
general information. 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.
During 1995, participants could invest their contributions in the
SBC Shares Fund, the Bond Fund, the Diversified Equity Portfolio,
the Interest Income Fund or equally among selected funds.
Beginning in mid-1995, participants were able to invest their
contributions in these funds and two new funds, the Asset
Allocation Fund and the Global Equity Fund, 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. 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 $290.0 million through
the issuance of 8.49% Guaranteed Salaried Employees' ESOP Notes
due 2000, 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 a 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.
On July 1, 1995 and July 1, 1994, the Plan refinanced $7.5
million and $8.5 million, respectively, of the outstanding
balance of the ESOP Notes described above. The refinanced notes
are payable to SBC annually at 6.79% and 7.89%, until July 2004
and July 2003, respectively.
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 to
purchase shares necessary to meet any shortfall in the company
match or in the shares issued in lieu of dividends. Dividends on
these shares are used to acquire additional shares which are
allocated to participants' accounts in the ESOP. 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.
Bankers Trust Company is the Trustee for the Plan.
Effective November 1994, the Plan was amended to change its name
from Southwestern Bell Corporation Savings Plan for Salaried
Employees to Southwestern Bell Corporation Savings Plan.
Effective in August 1995, the Plan was amended again to change
its name from Southwestern Bell Corporation Savings Plan to SBC
Savings Plan. Other amendments were made to the Plan that were
effective in 1995 and 1994, including the merger of certain other
plans' assets into the Plan. These amendments did not
significantly affect the net assets of the Plan.
Effective June 1995, the valuation of the Plan funds went from a
monthly valuation to a daily valuation. Concurrent with this
change, income earned on the underlying investments in BZW
Barclays (formerly Wells Fargo) investment funds are no longer
reported separately but are reflected through increases in the
unit values of these funds. Such increases are included in
appreciation in the value of investments on the Statement of
Changes in Net Assets Available for Plan Benefits.
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.
2. 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 which approximates fair value; BZW Barclays:
Equity Index Funds, Government/Corporate Bond Index Funds, U.S.
Tactical Asset Allocation Fund E, U.S. Equity Market Fund E and
EAFE Equity Index Fund E 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.
As required by the American Institute of Certified Public
Accountants Audit and Accounting Guide for Audits of Employee
Benefit Plans, distributions payable to participants are no
longer reported as a liability on the Statement of Net Assets
Available for Plan Benefits. A retroactive adjustment was made
in 1995 to reflect the effect of this change as of December 31,
1993. This change did not significantly affect net assets of the
Plan.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Certain amounts in prior period financial statements have been
reclassified to conform to the current year's presentation.
3. Participant Interest in the Plan - During 1995, the Plan was
amended to change the interest of a participant in the ESOP fund
from shares to units. The interest of a participant in each of
the other funds in the Plan, except for the Loan Fund, is
represented by units (as described in the Plan text). The number
of participants, number of units and the value per unit for each
of these funds as of December 31 were:
<TABLE>
<CAPTION>
1995 1994
Number of Number of Value per Number of Number of Value per
Participants Units Unit Participants Units Unit
<S> <C> <C> <C> <C> <C> <C>
ESOP 15,549 243,915,356 $ 1.2909 - - -
SBC Shares Fund 12,928 57,339,073 $10.3620 12,548 60,730,962 $ 7.0738
Bond Fund 2,673 3,581,330 $10.1639 2,807 3,798,419 $ 8.5227
Diversified Equity 8,715 17,645,244 $13.3709 7,957 16,232,770 $ 9.7389
Portfolio
Interest Income Fund 7,951 51,996,414 $ 4.6485 8,260 55,113,409 $ 4.3787
Asset Allocation Fund 675 8,317,923 $ 1.1105 - - -
Global Equity Fund 1,052 12,628,919 $ 1.1381 - - -
</TABLE>
The total number of participants in the Plan was less than the
sum of the number of participants shown above because many
participants were in more than one fund.
4. Investments - Investments representing 5% or more of Plan net
assets at either December 31, 1995 or 1994 were:
1995 1994
Employee Stock Ownership Plan
SBC common shares:
allocated $ 313,154 $ 192,901
unallocated $ 274,684 $ 228,549
SBC Shares Fund
SBC common shares $ 590,738 $ 425,351
Diversified Equity Portfolio
Wells Fargo Equity Index Fund $ - $ 153,872
BZW Barclays Equity Index Fund E $ 235,829 $ -
Interest Income Fund
Contracts with insurance companies
and other financial institutions:
John Hancock $ 49,225 $ 58,190
For the years ended December 31, 1995 and 1994, the average
interest rates earned on investments in contracts with insurance
companies and other financial institutions were 6.20% and 6.31%,
respectively. At December 31, 1995, the crediting interest rates
on these contracts ranged from 4.66% to 7.85% and at December 31,
1994, they ranged from 4.66% to 8.80%.
The Plan is invested in a synthetic guaranteed investment
contract with Cassie Des Depots et Consignations (CDC) whereby
the Plan owns a bond held in trust and has entered into a
contract with CDC which guarantees the return on the bond. At
December 31, 1995, the fair value of the bond was $38,976 and the
fair value of the guarantee was $2,111. The investment contract
is recorded at contract value of $41,087 which approximates fair
value.
5. Long-Term Debt - Long-term debt consists of the ESOP Notes issued
in connection with the ESOP and the refinancing notes (as
discussed in note 1). At December 31, 1995, the aggregate
principal amounts of long-term debt scheduled for repayment for
the years 1996 through 2000 were $31,906, $33,776, $35,797,
$37,982 and $20,901, respectively. The carrying amount and the
estimated fair value of the ESOP and refinancing notes as of
December 31 were:
1995 1994
Carrying Amount $ 167,743 $ 189,823
Fair Value $ 180,126 $ 197,133
The fair values of the ESOP Notes were estimated based on quoted
prices. The fair value of the refinancing notes were estimated
based on discounted future cash flows using current interest
rates.
6. Tax Status -The Internal Revenue Service issued a determination
letter on July 26, 1990, stating that the Plan and related trust
are 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 is operating in compliance with the
applicable requirements of the IRC.
7. Reconciliation of Financial Statements to Form 5500 - The
following is a reconciliation of net assets available for plan
benefits per the financial statements to the Form 5500 as of
December 31:
1995 1994
Net assets available for
plan benefits per the $ 1,624,961 $ 1,150,239
financial statements
Less: Distributions payable 1,804 10,452
to participants
Net assets available for
plan benefits per the Form $ 1,623,157 $ 1,139,787
5500
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500 for
the year ended December 31, 1995:
1995
Distributions to participants per
the financial statements $65,639
Add: Distributions payable to
participants at December 31, 1995 1,804
Less: Distributions payable to
participants at December 31, 1994 10,452
Distributions to participants per
the Form 5500 $56,991
Distributions payable to participants are recorded on the Form
5500 for benefit claims that have been processed and approved for
payment prior to December 31, but not yet paid as of that date.
<TABLE>
SBC SAVINGS PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1995
(Dollars in Thousands)
<CAPTION>
Description of Current
Identity of Issue Investment Cost Value
<S> <C> <C> <C>
Employee Stock Ownership Plan
* SBC common shares:
allocated 5,469,941 shares $ 152,620 $ 313,154
unallocated 4,797,963 shares 132,286 274,684
* Bankers Trust Company temporary cash investment 8,696 8,696
Total Employee Stock Ownership Plan 293,602 596,534
SBC Shares Fund
* SBC common shares 10,318,574 shares 255,168 590,738
* Bankers Trust Company temporary cash investment 3,688 3,688
Total SBC Shares Fund 258,856 594,426
Bond Fund
* BZW Barclays Government/Corporate
Bond Index Fund E 2,937,827 units 33,582 36,556
* Bankers Trust Company temporary cash investment 109 109
Total Bond Fund 33,691 36,665
Diversified Equity Portfolio
* BZW Barclays Equity Index Fund E 13,057,746 units 199,293 235,829
* Bankers Trust Company temporary cash investment 910 910
Total Diversified Equity Portfolio 200,203 236,739
Interest Income Fund (a)
Metropolitan Life Insurance Company 7.85 % 72,846 72,846
John Hancock 4.85 % - 5.20 % 49,225 49,225
Principal Mutual 6.35 % 45,339 45,339
Cassie Des Depots et Consignations 4.66 % 41,087 41,087
The Prudential Insurance Company
of America 6.64 % - 6.74 % 26,108 26,108
Provident National Life Insurance
Company 6.86 % 6,835 6,835
241,440 241,440
* Bankers Trust Company temporary cash investment 1,774 1,774
Total Interest Income Fund 243,214 243,214
</TABLE>
<TABLE>
SBC SAVINGS PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1995
(Dollars in Thousands)
<CAPTION>
Description of Current
Identity of Issue Investment Cost Value
<S> <C> <C> <C>
Asset Allocation Fund
* BZW Barclays U.S. Tactical Asset
Allocation Fund E 541,018 units 8,530 9,162
* Bankers Trust Company temporary cash investment 38 38
Total Asset Allocation Fund 8,568 9,200
Global Equity Fund
* BZW Barclays U.S. Equity Market Fund E 798,797 units 9,897 10,796
* BZW Barclays EAFE Equity Index Fund E 243,429 units 3,294 3,455
* Bankers Trust Company temporary cash investment 65 65
Total Global Equity Fund 13,256 14,316
Loan Fund
Loans to Plan Participants 9.50 % - 10.00 % - 70,492
TOTAL $ 1,051,390 $ 1,801,586
<FN>
* 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 average interest rate earned on these
investment contracts during 1995 was 6.20%.
</TABLE>
<TABLE>
SBC SAVINGS PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1995
(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)
<S> <C> <C> <C> <C> <C> <C>
Category (iii) transactions:
Bankers Trust Directed Temporary Cash Investments $243,063 $ - $243,063 $243,063 $ -
Account Cash Fund
Bankers Trust Directed Temporary Cash Investments $ - $246,811 $246,811 $246,811 $ -
Account Cash Fund
BZW Barclays (Wells Fargo) Equity Index Fund $6,501 $ - $6,501 $6,501 $ -
BZW Barclays (Wells Fargo) Equity Index Fund $ - $184,155 $126,705 $184,155 $57,450
BZW Barclays (Wells Fargo) Equity Index Fund E $207,736 $ - $207,736 $207,736 $ -
BZW Barclays (Wells Fargo) Equity Index Fund E $ - $ 9,073 $8,443 $9,073 $ 630
Metropolitan Life Contract with Insurance Company $64,540 $ - $64,540 $64,540 $ -
Insurance Company
Metropolitan Life Contract with Insurance Company $ - $13,702 $13,702 $13,702 $ -
Insurance Company
Principal Mutual Contract with Insurance Company $66,104 $ - $66,104 $66,104 $ -
Principal Mutual Contract with Insurance Company $ - $21,000 $21,000 $21,000 $ -
<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.
SBC SAVINGS PLAN
By Benefit Plan Committee
By /s/ Cassandra C. Carr
Cassandra C. Carr, Chairman
Date: June 14, 1996
EX-23.a
Form 11-K for 1995
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 SBC Savings Plan of our report dated May 31,
1996, with respect to the financial statements and supplemental
schedules of the SBC Savings Plan included in this Annual Report
(Form 11-K) for the year ended December 31, 1995.
ERNST & YOUNG LLP
San Antonio, Texas
June 12, 1996
EX-99.b
Form 10-K for 1995
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, 1995
Commission File Number 1-8610
_____________
SBC SAVINGS AND SECURITY PLAN
_____________
SBC COMMUNICATIONS INC.
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, 1995
Statement of Net Assets Available for Plan Benefits as of
December 31, 1994
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1995
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1994
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
SBC Savings and Security Plan
We have audited the accompanying statements of net assets
available for plan benefits of the SBC Savings and Security Plan
(the Plan) as of December 31, 1995 and 1994, and the related
statements of changes in net assets available for plan benefits for
the years then ended. 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, 1995 and 1994, and the
changes in its net assets available for plan benefits for the years
then ended, 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, 1995
listed in the table of contents are presented for purposes of
complying with Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security
Act of 1974, and are not a required part of the basic financial
statements. The fund information in the statement of net assets
available for plan benefits and the statement of changes in net assets
available for plan benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in our 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 31, 1996
<TABLE>
SBC SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income Loan
Plan Fund Fund Portfolio Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
SBC common shares:
allocated $269,847 $ - $ - $ - $ - $ - $269,847
unallocated 180,355 - - - - - 180,355
other - 588,472 - - - - 588,472
BZW Barclays Government/
Corporate Bond Index Fund - - 3,103 - - - 3,103
BZW Barclays Equity Index Fund - - - 27,890 - - 27,890
Contracts with insurance companies
and other financial institutions - - - - 173,663 - 173,663
Loans to plan participants - - - - - 48,499 48,499
Temporary cash investments 6,085 6,742 166 1,671 406 - 15,070
Total Investments 456,287 595,214 3,269 29,561 174,069 48,499 1,306,899
Contributions receivable:
Participant - 1,809 - 331 16 - 2,156
Employer 4,594 - - - - - 4,594
Total Contributions Receivable 4,594 1,809 - 331 16 - 6,750
</TABLE>
<TABLE>
SBC SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income Loan
Plan Fund Fund Portfolio Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Dividends and interest receivable 30 26 17 57 3 996 1,129
Transfers receivable from other
funds and plans - - - 770 - 3,067 3,837
Other 301 - - 1 - - 302
Total Assets 461,212 597,049 3,286 30,720 174,088 52,562 1,318,917
LIABILITIES
Transfers payable to other
funds and plans - 1,066 210 - 2,452 - 3,728
Payable for investments purchased - - 17 50 886 - 953
Administrative expenses 18 39 - 3 16 - 76
Interest payable 4,617 - - - - - 4,617
Current portion of long-term debt 21,174 - - - - - 21,174
Long-term debt 86,151 - - - - - 86,151
Total Liabilities 111,960 1,105 227 53 3,354 - 116,699
Net Assets Available for Plan
Benefits $349,252 $595,944 $3,059 $30,667 $170,734 $52,562 $1,202,218
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
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 Loan
Plan Fund Fund Portfolio Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
SBC common shares:
allocated $163,379 $ - $ - $ - $ - $ - $163,379
unallocated 158,112 - - - - - 158,112
other - 398,342 - - - - 398,342
Wells Fargo Government/
Corporate Bond Index Fund - - 2,156 - - - 2,156
Wells Fargo Equity Index Fund - - - 16,242 - - 16,242
Contracts with insurance companies
and other financial institutions - - - - 158,206 - 158,206
Loans to plan participants - - - - - 45,745 45,745
Temporary cash investments 5,871 5,414 120 760 18 - 12,183
Total Investments 327,362 403,756 2,276 17,002 158,224 45,745 954,365
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
</TABLE>
<TABLE>
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 Loan
Plan Fund Fund Portfolio Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Dividends and interest receivable 27 22 15 43 1 275 383
Transfers receivable from other
funds and plans - - - - - 1,657 1,657
Other 158 - - - - - 158
Total Assets 332,513 404,734 2,318 17,211 158,923 47,677 963,376
LIABILITIES
Transfers payable to other
funds and plans - 1,053 93 114 397 - 1,657
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 132,581 1,192 108 156 406 - 134,443
Net Assets Available for Plan
Benefits $199,932 $403,542 $2,210 $17,055 $158,517 $47,677 $828,933
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
SBC SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income Loan
Plan Fund Fund Portfolio Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1994 $199,932 $403,542 $2,210 $17,055 $158,517 $47,677 $828,933
Additions to Net Assets:
Contributions and transfers:
Participant contributions - 31,179 702 4,688 17,559 - 54,128
Employer contributions 18,142 - - - - - 18,142
Transfers of participants'
balances - net - (1,210) (155) 2,958 (2,773) 1,361 181
Forfeitures 48 - - - - - 48
Loan transfers 19,741 - - - - - 19,741
37,931 29,969 547 7,646 14,786 1,361 92,240
Investment income:
Dividends on SBC common shares 12,931 16,381 - - - - 29,312
Other dividends - - - 598 - - 598
Interest 213 306 177 - 10,148 3,924 14,768
13,144 16,687 177 598 10,148 3,924 44,678
Net appreciation (depreciation) in
value of investments 133,301 170,760 277 6,182 - - 310,520
Total Net Additions 184,376 217,416 1,001 14,426 24,934 5,285 447,438
</TABLE>
<TABLE>
SBC SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
(Dollars in Thousands)
<CAPTION>
Employee
Stock SBC Diversified Interest
Ownership Shares Bond Equity Income Loan
Plan Fund Fund Portfolio Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Administrative expenses 118 281 3 18 125 - 545
Forfeitures 48 - - - - - 48
Interest expense 9,656 - - - - - 9,656
Loan payment - principal 19,741 - - - - - 19,741
Distributions to participants 5,493 24,733 149 796 12,592 400 44,163
Total Deductions 35,056 25,014 152 814 12,717 400 74,153
Net Assets Available for Plan
Benefits, December 31, 1995 $349,252 $595,944 $3,059 $30,667 $170,734 $52,562 $1,202,218
<FN>
See Notes to Financial Statements.
</TABLE>
<TABLE>
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 Diversified
Ownership Shares Bond Equity Income Telephone Loan
Plan Fund Fund Portfolio Fund Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for Plan
Benefits, December 31, 1993 $187,323 $392,525 $1,522 $12,604 $149,416 $93 $38,764 $782,247
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 - (971) 21 739 (6,137) - 6,500 152
Forfeitures 78 - - - - - - 78
Loan transfers 18,576 - - - - - - 18,576
42,928 28,613 793 4,850 11,708 - 6,500 95,392
Investment income:
Dividends on SBC common shares 12,496 14,895 - - - - - 27,391
Other dividends - - - 437 - - - 437
Interest 156 194 136 - 8,953 - 3,008 12,447
12,652 15,089 136 437 8,953 - 3,008 40,275
Net appreciation (depreciation) in
value of investments (8,995) (10,548) (190) (204) - - - (19,937)
Total Net Additions 46,585 33,154 739 5,083 20,661 - 9,508 115,730
</TABLE>
<TABLE>
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 Diversified
Ownership Shares Bond Equity Income Telephone Loan
Plan Fund Fund Portfolio Fund Portfolio Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(Continued)
Deductions from Net Assets:
Administrative expenses 221 176 10 18 109 - - 534
Forfeitures 78 - - - - - - 78
Interest expense 11,292 - - - - - - 11,292
Loan payment - principal 18,576 - - - - - - 18,576
Distributions to participants 3,809 21,961 41 614 11,451 93 595 38,564
Total Deductions 33,976 22,137 51 632 11,560 93 595 69,044
Net Assets Available for Plan
Benefits, December 31, 1994 $199,932 $403,542 $2,210 $17,055 $158,517 $ - $47,677 $828,933
<FN>
See Notes to Financial Statements.
</TABLE>
SBC SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands, Except per Unit Amounts)
1. Plan Description - The SBC Savings and Security Plan (Plan) was
established by SBC Communications Inc. (SBC) to provide a
convenient way for eligible employees to save for retirement on a
regular and long-term basis. The majority of eligible employees
are represented by the Communications Workers of America. The
following description of the Plan provides only general
information. 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.
During 1995, participants could invest their contributions in the
SBC Shares Fund, the Bond Fund, the Diversified Equity Portfolio,
the Interest Income Fund or equally among selected funds.
Beginning in mid-1996, 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 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 a 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 to purchase shares necessary to meet any
shortfall in the company match or in the shares issued in lieu of
dividends. Dividends on these shares are used to acquire
additional shares which are allocated to participants' accounts
in the ESOP. 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.
Bankers Trust Company is the Trustee for the Plan.
Effective November 1994, the Plan was amended to change its name
from Southwestern Bell Corporation Savings and Security Plan
(Non-Salaried Employees) to Southwestern Bell Corporation Savings
and Security Plan. Effective in August 1995, the Plan was
amended again to change its name from Southwestern Bell
Corporation Savings and Security Plan to SBC Savings and Security
Plan. Other amendments were made to the Plan that were effective
in 1995 and 1994, including changes as a result of collective
bargaining agreement negotiations. These amendments did not
significantly affect the net assets of the Plan.
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.
2. 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 which approximates fair value; BZW Barclays
(formerly Wells Fargo): Equity Index Fund and
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.
As required by the American Institute of Certified Public
Accountants Audit and Accounting Guide for Audits of Employee
Benefit Plans, distributions payable to participants are no
longer reported as a liability on the Statement of Net Assets
Available for Plan Benefits. A retroactive adjustment was made
in 1995 to reflect the effect of this change as of December 31,
1993. This change did not significantly affect net assets of
the Plan.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Certain amounts in prior period financial statements have been
reclassified to conform to the current year's presentation.
3. Participant Interest in the Plan - The interest of a participant
in the ESOP fund is represented by shares. The interest of a
participant in each of the other funds in the Plan, except for
the Loan Fund, is represented by units (as described in the Plan
text). The number of participants, number of units and value per
unit for each of these funds as of December 31 were:
<TABLE>
<CAPTION>
1995 1994
Number of Number of Value per Number of Number of Value per
Participants Units Unit Participants Units Unit
<S> <C> <C> <C> <C> <C> <C>
SBC Shares Fund 28,266 55,124,445 $10.8108 28,332 54,753,062 $ 7.3702
Bond Fund 1,214 1,917,145 $ 1.5954 1,189 1,650,853 $ 1.3388
Diversified Equity 5,726 14,278,407 $ 2.1477 5,001 10,796,929 $ 1.5796
Portfolio
Interest Income Fund 21,488 35,372,144 $ 4.8267 21,746 34,918,877 $ 4.5395
</TABLE>
The total number of participants in the Plan was less than the
sum of the number of participants shown above because many
participants were in more than one fund.
4. Investments - Investments representing 5% or more of Plan net
assets at either December 31, 1995 or 1994 were:
1995 1994
Employee Stock Ownership Plan
SBC common shares:
allocated $ 269,847 $ 163,379
unallocated $ 180,355 $ 158,112
SBC Shares Fund
SBC common shares $ 588,472 $ 398,342
Interest Income Fund
Contracts with insurance
companies and other financial
institutions:
John Hancock $ 46,826 $ 52,198
Prudential Insurance $ 48,811 $ 41,870
Company of America
Loan Fund
Loans to Plan Participants $ 48,499 $ 45,745
For the years ended December 31, 1995 and 1994, the average
interest rates earned on investments in contracts with insurance
companies and other financial institutions were 6.30% and 6.04%,
respectively. At December 31, 1995, the crediting interest rates
on these contracts ranged from 4.66% to 8.06% and at December 31,
1994, they ranged from 4.66% to 8.77%.
The Plan is invested in a synthetic guaranteed investment
contract with Cassie Des Depots et Consignations (CDC) whereby
the Plan owns a bond held in trust and has entered into a
contract with CDC which guarantees the return on the bond. At
December 31, 1995, the fair value of the bond was $19,488 and the
fair value of the guarantee was $1,055. The investment contract
is recorded at contract value of $20,543 which approximates fair
value.
5. Long-Term Debt - Long-term debt consists of the ESOP Notes issued
in connection with the ESOP (as discussed in note 1). At
December 31, 1995, the aggregate principal amounts of long-term
debt scheduled for repayment for the years 1996 through 2000 were
$21,174, $22,281, $23,468, $24,546 and $15,856, respectively.
The carrying amount and the estimated fair value of the ESOP
Notes as of December 31 were:
1995 1994
Carrying Amount $ 107,325 $ 127,066
Fair Value $ 116,098 $ 132,222
The fair values of the 8.41% ESOP Notes were estimated based on
quoted prices and the fair values of the 9.40% ESOP Notes were
estimated based on discounted future cash flows using current
interest rates.
6. Tax Status - The Internal Revenue Service issued a determination
letter on July 26, 1990, stating that the Plan and related trust
are 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 is operating in compliance with the
applicable requirements of the IRC.
7. Reconciliation of Financial Statements to Form 5500 - The
following is a reconciliation of net assets available for plan
benefits per the financial statements to the Form 5500 as of
December 31:
1995 1994
Net assets available for plan
benefits per the financial $ 1,202,218 $ 828,933
statements
Less: Distributions payable to 6,300 5,769
participants
Net assets available for plan
benefits per the Form 5500 $ 1,195,918 $ 823,164
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500 for
the year ended December 31, 1995:
1995
Distributions to participants per the
financial statements $44,163
Add: Distributions payable to
participants at December 31, 1995 6,300
Less: Distributions payable to
participants at December 31, 1994 5,769
Distributions to participants per the
Form 5500 $44,694
Distributions payable to participants are recorded on the Form
5500 for benefit claims that have been processed and approved for
payment prior to December 31, but not yet paid as of that date.
<TABLE>
SBC SAVINGS AND SECURITY PLAN
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1995
(Dollars in Thousands)
<CAPTION>
Description of Current
Identity of Issue Investment Cost Value
<S> <C> <C> <C>
Employee Stock Ownership Plan
* SBC common shares:
allocated 4,713,484 shares $ 133,713 $ 269,847
unallocated 3,150,313 shares 87,295 180,355
* Bankers Trust Company temporary cash investment 6,085 6,085
Total Employee Stock
Ownership Plan 227,093 456,287
SBC Shares Fund
* SBC common shares 10,278,992 shares 253,774 588,472
* Bankers Trust Company temporary cash investment 6,742 6,742
Total SBC Shares Fund 260,516 595,214
Bond Fund
* BZW Barclays Government/
Corporate Bond Index Fund 25,091 units 2,978 3,103
* Bankers Trust Company temporary cash investment 166 166
Total Bond Fund 3,144 3,269
Diversified Equity Portfolio
* BZW Barclays Equity Index Fund 194,249 units 20,649 27,890
* Bankers Trust Company temporary cash investment 1,671 1,671
Total Diversified Equity
Portfolio 22,320 29,561
Interest Income Fund (a)
The Prudential Insurance Company
of America 6.88 % - 8.06 % 48,811 48,811
John Hancock 5.00 % - 5.33 % 46,826 46,826
Principal Mutual 6.50% 35,917 35,917
Provident National Life Insurance
Company 6.93 % - 7.01 % 21,566 21,566
Cassie Des Depots et Consignations 4.66% 20,543 20,543
173,663 173,663
* Bankers Trust Company temporary cash investment 406 406
Total Interest Income Fund 174,069 174,069
Loan Fund
Loans to Plan Participants 9.50 % - 10.00 % - 48,499
TOTAL $ 687,142 $ 1,306,899
* 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 average interest rate earned on these investment contracts during 1995
was 6.30%.
</TABLE>
<TABLE>
SBC SAVINGS AND SECURITY PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1995
(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)
<S> <C> <C> <C> <C> <C> <C>
Category (iii) transactions:
Bankers Trust Directed Temporary Cash Investments $122,587 $ - $122,587 $122,587 $ -
Account Cash Fund
Bankers Trust Directed Temporary Cash Investments $ - $119,700 $119,700 $119,700 $ -
Account Cash Fund
The Prudential Insurance Contract with Insurance Company $30,030 $ - $30,030 $30,030 $ -
Company of America
The Prudential Insurance Contract with Insurance Company $ - $18,169 $18,169 $18,169 $ -
Company of America
Principal Mutual Contract with Insurance Company $41,775 $ - $41,775 $41,775 $ -
Principal Mutual Contract with Insurance Company $ - $6,040 $6,040 $6,040 $ -
<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.
SBC SAVINGS AND SECURITY PLAN
By Benefit Plan Committee
By /s/ Cassandra C. Carr
Cassandra C. Carr, Chairman
Date: June 14, 1996
EX-23.b
Form 11-K for 1995
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 SBC Savings and Security Plan of our report
dated May 31, 1996, with respect to the financial statements and
supplemental schedules of the SBC Savings and Security Plan
included in this Annual Report (Form 11-K) for the year ended
December 31, 1995.
ERNST & YOUNG LLP
San Antonio, Texas
June 12, 1996
