<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11- K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to _____________
Commission File Number 1-12342
AirTouch Communications Retirement Plan
AirTouch Communications, Inc.
One California Street
San Francisco, CA 94111
<PAGE> 2
TABLE OF CONTENTS
Description
ITEM
<TABLE>
<CAPTION>
<S> <C> <C>
Item 1. Financial Statements and Exhibits
(a)Financial Statements of the Plan included herein:
Report of Independent Accountants - Price Waterhouse LLP 3
Financial Statements:
Statement of Net Assets Available for Benefits,
with Fund Information, at December 31, 1996 4
Statement of Net Assets Available for Benefits,
with Fund Information, at December 31, 1995 6
Statement of Changes in Net Assets Available for Benefits,
with Fund Information, for the year ended December 31, 1996 7
Statement of Changes in Net Assets Available for Benefits,
with Fund Information, for the year ended December 31, 1995 9
Notes to Financial Statements 10
Additional Information:
Schedule I - Item 27a - Assets Held for Investment Purposes at
December 31, 1996 16
Schedule V - Item 27d - Reportable Transactions for the year
ended December 31, 1996 17
Note: Other schedules (Schedules II-IV) required by Section
2520.103-10 of the Department Labor Rules and Regulations for
the Reporting and Disclosure under ERISA have been omitted
because they are not applicable or the required information is
included in the financial statements.
(b)Exhibits:
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
23.1 Consent of Independent Accountants
Price Waterhouse LLP
</TABLE>
2
<PAGE> 3
Report of Independent Accountants
To the Participants of the AirTouch Communications Retirement Plan and AirTouch
Communications, Inc. as Administrator
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the AirTouch Communications Retirement Plan (the Plan) at December 31, 1996
and 1995, and the changes in net assets available for benefits for the years
then ended, in conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedule I and Schedule V (Schedules) is presented for purposes of additional
analysis and is not a required part of the basic financial statements but is
additional information required by the Employee Retirement Income Security Act
of 1974 (ERISA). The Fund Information in the statements of net assets available
for benefits and the statements of changes in net assets available for benefits
is presented for purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
of each fund. The Schedules and Fund Information have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ PRICE WATERHOUSE LLP
San Francisco, California
June 19, 1997
3
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AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AIRTOUCH TELESIS INTERNATIONAL MONEY
STOCK STOCK EQUITY GROWTH EQUITY MARKET
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
AirTouch Communications, Inc., common stock $43,944 $ - $ - $ - $ - $ -
Pacific Telesis Group common stock 13,922
Europacific Growth Fund 2,085
Fidelity Contrafund 49,926
Wells Fargo Equity Index 36,637
Barclays US Money Market Fund 12,212
Barclays LifePath 2000
Barclays LifePath 2010
Barclays LifePath 2020
Barclays LifePath 2030
Barclays LifePath 2040
Barclays Daily US Debt Fund
Short-term Investments 417 76
Contracts with insurance companies
INVESCO Stable Value Fund
Loans to participants
------- ------- ------ ------- ------- -------
Total investments 44,361 13,998 2,085 49,926 36,637 12,212
------- ------- ------ ------- ------- -------
Contributions receivable, net of forfeitures 1,159 81 1,046 682 556
Fund transfers receivable and other 8 32
Dividends and interest receivable 1 120 12 55
------- ------- ------ ------- ------- -------
Total assets 45,521 14,118 2,174 50,984 37,351 12,823
------- ------- ------ ------- ------- -------
LIABILITIES
Fund transfers payable and other 47 42 78 16
------- ------- ------ ------- ------- -------
Total liabilities 47 42 -- 78 -- 16
------- ------- ------ ------- ------- -------
NET ASSETS AVAILABLE FOR BENEFITS $45,474 $14,076 $2,174 $50,906 $37,351 $12,807
------- ------- ------ ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
LIFEPATH
BOND 2000
FUND FUND
<S> <C> <C>
ASSETS
Investments:
AirTouch Communications, Inc., common stock $ - $ -
Pacific Telesis Group common stock
Europacific Growth Fund
Fidelity Contrafund
Wells Fargo Equity Index
Barclays US Money Market Fund
Barclays LifePath 2000 39
Barclays LifePath 2010
Barclays LifePath 2020
Barclays LifePath 2030
Barclays LifePath 2040
Barclays Daily US Debt Fund 2,899
Short-term Investments
Contracts with insurance companies
INVESCO Stable Value Fund
Loans to participants
------ ---
Total investments 2,899 39
------ ---
Contributions receivable, net of forfeitures 99 3
Fund transfers receivable and other
Dividends and interest receivable
------ ---
Total assets 2,998 42
------ ---
LIABILITIES
Fund transfers payable and other 2
------ ---
Total liabilities 2 --
------ ---
NET ASSETS AVAILABLE FOR BENEFITS $2,996 $42
------ ---
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996 - (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH INTEREST
2010 2020 2030 2040 INCOME
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
AirTouch Communications, Inc., common stock $ - $ - $ - $ - $ -
Pacific Telesis Group common stock
Europacific Growth Fund
Fidelity Contrafund
Wells Fargo Equity Index
Barclays US Money Market Fund
Barclays LifePath 2000
Barclays LifePath 2010 137
Barclays LifePath 2020 17,365
Barclays LifePath 2030 292
Barclays LifePath 2040 189
Barclays Daily US Debt Fund
Short-term Investments 1,596
Contracts with insurance companies 1,737
INVESCO Stable Value Fund 7,490
Loans to participants
---- ------- ---- ---- -------
Total investments 137 17,365 292 189 10,823
---- ------- ---- ---- -------
Contributions receivable, net of forfeitures 10 373 27 19 72
Fund transfers receivable and other 4
Dividends and interest receivable 42
---- ------- ---- ---- -------
Total assets 147 17,738 323 208 10,937
---- ------- ---- ---- -------
LIABILITIES
Fund transfers payable and other 12 22
---- ------- ---- ---- -------
Total liabilities - 12 - - 22
---- ------- ---- ---- -------
NET ASSETS AVAILABLE FOR BENEFITS $147 $17,726 $323 $208 $10,915
---- ------- ---- ---- -------
</TABLE>
<TABLE>
<CAPTION>
CASH
PARTICIPANT & CASH
LOANS EQUIVALENTS TOTAL
<S> <C> <C> <C>
ASSETS
Investments:
AirTouch Communications, Inc., common stock $ - $ - $ 43,944
Pacific Telesis Group common stock 13,922
Europacific Growth Fund 2,085
Fidelity Contrafund 49,926
Wells Fargo Equity Index 36,637
Barclays US Money Market Fund 12,212
Barclays LifePath 2000 39
Barclays LifePath 2010 137
Barclays LifePath 2020 17,365
Barclays LifePath 2030 292
Barclays LifePath 2040 189
Barclays Daily US Debt Fund 2,899
Short-term Investments 56 2,145
Contracts with insurance companies 1,737
INVESCO Stable Value Fund 7,490
Loans to participants 4,982 4,982
------ --- --------
Total investments 4,982 56 196,001
------ --- --------
Contributions receivable, net of forfeitures 4,127
Fund transfers receivable and other 44
Dividends and interest receivable 230
------ --- --------
Total assets 4,982 56 200,402
------ --- --------
LIABILITIES
Fund transfers payable and other 219
------ --- --------
Total liabilities - - 219
------ --- --------
NET ASSETS AVAILABLE FOR BENEFITS $4,982 $56 $200,183
------ --- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AIRTOUCH TELESIS MONEY
STOCK STOCK GROWTH EQUITY MARKET BOND
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
AirTouch Communications, Inc.
common stock $40,660 $ - $ - $ - $ - $ -
Pacific Telesis Group common stock 15,378
SIT New Beginning Growth Fund 34,179
State Street S&P 500 Index
Flagship Fund 25,084
State Street Yield Plus Fund 9,572
State Street Bond Market Fund 2,185
State Street Balanced Fund
Short-term investments 938 15 200 160 37
Contracts with insurance companies
INVESCO Stable Value Fund
-------- -------- -------- -------- -------- -------
Total investments 41,598 15,393 34,179 25,284 9,732 2,222
-------- -------- -------- -------- -------- -------
Contributions receivable, net of forfeitures 1,443 40 882 588 607 93
Fund transfers receivable and other 25 478 234
Dividends and interest receivable 250
-------- -------- -------- -------- -------- -------
Total assets 43,066 15,683 35,539 26,106 10,339 2,315
-------- -------- -------- -------- -------- -------
LIABILITIES
Fund transfers payable and other 438 139 16
-------- -------- -------- -------- -------- -------
Total liabilities - 438 - - 139 16
-------- -------- -------- -------- -------- -------
NET ASSETS AVAILABLE FOR BENEFITS $43,066 $15,245 $35,539 $26,106 $10,200 $2,299
-------- -------- -------- -------- -------- -------
</TABLE>
<TABLE>
<CAPTION>
INTEREST
BALANCED INCOME
FUND FUND TOTAL
<S> <C> <C> <C>
ASSETS
Investments:
AirTouch Communications, Inc.
common stock $ - $ - $ 40,660
Pacific Telesis Group common stock 15,378
SIT New Beginning Growth Fund 34,179
State Street S&P 500 Index
Flagship Fund 25,084
State Street Yield Plus Fund 9,572
State Street Bond Market Fund 2,185
State Street Balanced Fund 14,986 14,986
Short-term investments 150 909 2,409
Contracts with insurance companies 7,602 7,602
INVESCO Stable Value Fund 3,347 3,347
-------- -------- ---------
Total investments 15,136 11,858 155,402
-------- -------- ---------
Contributions receivable, net of forfeitures 353 174 4,180
Fund transfers receivable and other 60 797
Dividends and interest receivable 1 251
-------- -------- ---------
Total assets 15,549 12,033 160,630
-------- -------- ---------
LIABILITIES
Fund transfers payable and other 388 981
-------- -------- ---------
Total liabilities - 388 981
-------- -------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $15,549 $11,645 $159,649
-------- -------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AIRTOUCH TELESIS INTERNATIONAL
STOCK STOCK EQUITY GROWTH EQUITY
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Dividend income $ -- $ 613 $ -- $ -- $ --
Interest income 20 4 56 450 9
Net appreciation (depreciation) of investments (5,168) 1,194 93 8,865 6,383
Employee contributions/ salary deferrals 3,835 8 321 4,810 3,199
Employer contributions 10,836 35 116 3,130 2,112
Loans to participants
-------- -------- ------- -------- --------
Total additions 9,523 1,854 586 17,255 11,703
-------- -------- ------- -------- --------
DEDUCTIONS FROM NET ASSETS:
Distributions to participants 4,847 1,004 36 2,951 2,094
Forfeitures and other adjustments, net 587 679 (7) (22) (86)
-------- -------- ------- -------- --------
Total deductions 5,434 1,683 29 2,929 2,008
-------- -------- ------- -------- --------
Change in net assets before transfers 4,089 171 557 14,326 9,695
Interfund transfers, net (1,681) (1,340) 1,617 1,041 1,550
-------- -------- ------- -------- --------
Change in net assets 2,408 (1,169) 2,174 15,367 11,245
Net assets available for benefits,
December 31, 1995 43,066 15,245 -- 35,539 26,106
-------- -------- ------- -------- --------
Net assets available for benefits,
December 31, 1996 $ 45,474 $ 14,076 $ 2,174 $ 50,906 $ 37,351
-------- -------- ------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
MONEY LIFEPATH
MARKET BOND 2000
FUND FUND FUND
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Dividend income $ -- $ -- $--
Interest income 609 1
Net appreciation (depreciation) of investments 110 3
Employee contributions/ salary deferrals 909 443 3
Employer contributions 1,949 296 3
Loans to participants
------- ------ ---
Total additions 3,467 850 9
------- ------ ---
DEDUCTIONS FROM NET ASSETS:
Distributions to participants 1,320 196
Forfeitures and other adjustments, net 446 21
------- ------ ---
Total deductions 1,766 217 --
------- ------ ---
Change in net assets before transfers 1,701 633 9
Interfund transfers, net 906 64 33
------- ------ ---
Change in net assets 2,607 697 42
Net assets available for benefits,
December 31, 1995 10,200 2,299 --
------- ------ ---
Net assets available for benefits,
December 31, 1996 $12,807 $2,996 $42
------- ------ ---
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996 - (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH INTEREST
2010 2020 2030 2040 BALANCED INCOME
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Dividend income $ -- $ -- $ -- $ -- $ -- $ --
Interest income 3 2 691
Net appreciation (depreciation) of investments 4 77 18 13 1,992
Employee contributions/salary deferrals 32 873 99 97 859 284
Employer contributions 14 751 30 22 387 215
Loans to participants
------ -------- ----- ---- -------- --------
Total additions 50 1,704 147 132 3,240 1,190
------ -------- ----- ---- -------- --------
DEDUCTIONS FROM NET ASSETS:
Distributions to participants 12 925 7 10 88 1,255
Forfeitures and other adjustments, net 48 (192) (5)
------ -------- ----- ---- -------- --------
Total deductions 12 973 7 10 (104) 1,250
------ -------- ----- ---- -------- --------
Change in net assets before transfers 38 731 140 122 3,344 (60)
Interfund transfers, net 109 16,995 183 86 (18,893) (670)
------ -------- ----- ---- -------- --------
Change in net assets 147 17,726 323 208 (15,549) (730)
Net assets available for benefits,
December 31, 1995 -- -- -- -- 15,549 11,645
------ -------- ----- ---- -------- --------
Net assets available for benefits,
December 31, 1996 $ 147 $ 17,726 $ 323 $208 $ -- $ 10,915
------ -------- ----- ---- -------- --------
</TABLE>
<TABLE>
<CAPTION>
CASH
PARTICIPANT & CASH
LOANS EQUIVALENTS TOTAL
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Dividend income $ -- $ -- $ 613
Interest income 131 9 1,985
Net appreciation (depreciation) of investments 13,584
Employee contributions/salary deferrals 15,772
Employer contributions 19,896
Loans to participants 5,457 5,457
------- ---- --------
Total additions 5,588 9 57,307
------- ---- --------
DEDUCTIONS FROM NET ASSETS:
Distributions to participants 14,745
Forfeitures and other adjustments, net 606 (47) 2,028
------- ---- --------
Total deductions 606 (47) 16,773
------- ---- --------
Change in net assets before transfers 4,982 56 40,534
Interfund transfers, net --
------- ---- --------
Change in net assets 4,982 56 40,534
Net assets available for benefits,
December 31, 1995 -- -- 159,649
------- ---- --------
Net assets available for benefits,
December 31, 1996 $ 4,982 $ 56 $200,183
------- ---- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 9
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AIRTOUCH TELESIS MONEY
STOCK STOCK GROWTH EQUITY MARKET
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Dividend income $ -- $ 1,054 $ -- $ -- $ --
Interest income 17 1 5 1 549
Net appreciation (depreciation)
of investments (977) 2,345 8,129 6,391
Employee contributions/
salary deferrals 4,581 3,130 2,147 912
Employer contributions 9,252 (16) 2,346 1,574 2,609
-------- -------- ------- ------- --------
Total additions 12,873 3,384 13,610 10,113 4,070
-------- -------- ------- ------- --------
DEDUCTIONS FROM NET ASSETS:
Distributions to participants 1,911 849 1,378 1,025 532
Forfeitures and other adjustments, net (700) 1,102 99 47 374
-------- -------- ------- ------- --------
Total deductions 1,211 1,951 1,477 1,072 906
-------- -------- ------- ------- --------
Change in net assets before transfers 11,662 1,433 12,133 9,041 3,164
Interfund transfers, net (288) (1,292) 945 821 (376)
-------- -------- ------- ------- --------
Change in net assets 11,374 141 13,078 9,862 2,788
Net assets available for benefits,
December 31, 1994 31,692 15,104 22,461 16,244 7,412
-------- -------- ------- ------- --------
Net assets available for benefits,
December 31, 1995 $ 43,066 $ 15,245 $35,539 $26,106 $ 10,200
-------- -------- ------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
INTEREST
BOND BALANCED INCOME
FUND FUND FUND TOTAL
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS:
Dividend income $ -- $ -- $ -- $ 1,054
Interest income 1 787 1,361
Net appreciation (depreciation)
of investments 308 2,854 19,050
Employee contributions/
salary deferrals 335 1,642 212 12,959
Employer contributions 286 1,199 145 17,395
------- ------- ------- --------
Total additions 929 5,696 1,144 51,819
------- ------- ------- --------
DEDUCTIONS FROM NET ASSETS:
Distributions to participants 100 830 812 7,437
Forfeitures and other adjustments, net 12 101 7 1,042
------- ------- ------- --------
Total deductions 112 931 819 8,479
------- ------- ------- --------
Change in net assets before transfers 817 4,765 325 43,340
Interfund transfers, net (59) 137 112 --
------- ------- ------- --------
Change in net assets 758 4,902 437 43,340
Net assets available for benefits,
December 31, 1994 1,541 10,647 11,208 116,309
------- ------- ------- --------
Net assets available for benefits,
December 31, 1995 $ 2,299 $15,549 $11,645 $159,649
------- ------- ------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE> 10
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. DESCRIPTION OF PLAN
Effective April 1, 1994, AirTouch Communications, Inc. ("AirTouch") adopted
the AirTouch Communications Retirement Plan (the "AirTouch Plan" or the
"Plan"). The Plan is a defined contribution plan covering eligible
employees of AirTouch and participating subsidiary companies of AirTouch or
its separate operating units participating in the Plan ("Participating
Entities"). It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
The following description of the Plan provides only general information and
includes certain changes to the Plan effective June 1, 1996. Participants
should refer to the Summary Plan Description and Prospectus for a more
complete description of the Plan's provisions, including the income tax
consequences of participation and restrictions on early withdrawals from
the Plan.
ELIGIBILITY
An employee is eligible to participate in the Plan if he or she is an
employee of a Participating Entity and has completed three consecutive
months with at least 250 hours of service. Employees are not eligible to
participate if they are (a) covered by a collective bargaining agreement
that does not provide for Plan participation, (b) employed by an AirTouch
company that does not participate, (c) leased employees or (d) nonresident
aliens with no United States source income.
SALARY DEFERRALS AND EMPLOYEE CONTRIBUTIONS
A participant may elect to contribute to the Plan in the amount of any
whole percentage, not to exceed 16% (10% for participants who qualify as
highly compensated employees) of compensation. Contributions may be
designated as before-tax deductions ("Salary Deferrals") or as after-tax
deductions ("Employee Contributions"). Salary Deferrals were limited to
$9,500 and $9,240 for 1996 and 1995, respectively. This maximum allowable
limit is subject to annual revision for cost-of-living increases.
PARTICIPATING ENTITY CONTRIBUTIONS
There are four types of Participating Entity contributions:
- Basic Contributions -- Each participant may receive an allocation of
Basic Contributions equal to a percentage between zero and 6% of
compensation, depending on the rate selected by his or her
Participating Entity.
- Matching Contributions -- Each participant receives Matching
Contributions equal to 100% of his or her Salary Deferrals and Employee
Contributions. For this purpose, monthly Salary Deferrals and Employee
Contributions on behalf of each participant in excess of 6% of his or
her compensation for such month are disregarded.
- Variable Contributions -- If a Participating Entity elects to make a
Variable Contribution for a calendar year, each participant who was
employed at the end of the calendar year or who has died, attained
retirement status or incurred a disability during such year will
receive a Variable Contribution equal to a percentage of compensation
determined by the Compensation and Personnel Committee of the Board of
Directors of AirTouch. "Retirement Status" means attaining any age with
30 years of service, age 50 with 25 years of service, age 55 with 20
years of service, or age 65 with 10 years of service.
10
<PAGE> 11
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
- QNEC Contributions -- Participating Entities may elect to make
contributions to non-highly compensated participants in the form of
Qualified Nonelective Contributions ("QNEC") to meet Internal Revenue
Code ("IRC") nondiscrimination requirements. The variable contribution
may be a percentage of the participant's compensation or a fixed
dollar amount per eligible participant.
INVESTMENT DIRECTIONS
Contributions are remitted to The Northern Trust Company, as Trustee, for
investment under the Plan. A participant may direct the investment of his
or her account balance, other than unvested Matching Contributions, in
increments of one percent in one or more of the following investment funds:
- AirTouch Stock Fund
- Telesis Stock Fund (closed to new contributions and incoming transfers
April 1, 1994)
- International Equity Fund (beginning June 1, 1996)
- Growth Fund
- Equity Fund
- Interest Income Fund (beginning June 1, 1995)
- Money Market Fund
- Bond Fund
- LifePath Funds 2000, 2010, 2020, 2030, 2040 (beginning June 1, 1996)
Matching Contributions are invested entirely in the AirTouch Stock Fund. A
participant may, on a daily basis, change investment directions as to
future deductions and allocations of AirTouch contributions and may
redirect the investment of his or her total account among the investment
funds. Amounts may be transferred in one percent increments from a fund. No
amounts may be transferred from the Interest Income Fund to the Money
Market Fund. No amounts may be transferred to the Telesis Stock Fund, and
Matching Contributions may not be transferred from the AirTouch Stock Fund
until fully vested.
The participant's interest in the investment funds is valued daily at the
closing price of the funds on the New York Stock Exchange (Note 2).
VESTING
Salary Deferrals, Employee Contributions and QNECs are always fully
vested.
Participating Entity contributions vest on the earliest of: the completion
of 3 years of service; death, disability, or attainment of age 65 while
employed; or the Plan termination.
A participant receives credit for a year of service for each calendar year
in which at least 1,000 hours of service are completed. Participating
Entity contributions which are not yet vested are forfeited when the
participant terminates employment.
PARTICIPANT LOANS
Participants who are active AirTouch employees may borrow against their
portion of the Plan assets subject to the limitations and restrictions set
forth in the Plan's Prospectus and the IRC. All loans bear a fixed
interest rate equal to the Prime Rate
11
<PAGE> 12
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
plus one percentage point. There are two types of loans available: general
purpose loans, which must be repaid over a maximum four and one-half year
term, and principal residence loans, which must be repaid over a maximum
ten-year term. Payments of principal and interest are made by participants
through payroll deductions, which may not exceed 25% of a participant's
base pay per pay period. The loans are secured by the participant's account
balance. The loans can be paid in full at any time without penalty.
IN-SERVICE WITHDRAWALS
The Plan provides for four types of participant withdrawals:
- Employee Contributions Account and/or Rollover Account - Participants
may withdraw all or part of their Employee Contributions Account and/or
Rollover Account for any reason. No Matching Contributions are
allocated for six months following withdrawal.
- Company Matching Contributions Account - Participants who are 100%
vested may withdraw all or part of their Matching Contributions
Account. No Matching Contributions are allocated for six months
following withdrawal.
- Age 59-1/2 Withdrawal - Participants may withdraw from their Salary
Deferral Account and their investment earnings after they reach age
59-1/2. This is permitted only after the participant has withdrawn the
maximum from his or her Employee Contributions Account, Rollover
Account, and Matching Contributions Account. No suspension of Matching
Contributions applies.
- Hardship Withdrawal - Participants with financial hardship may withdraw
from their Salary Deferral Account. Such withdrawals are subject to
Company approval and are permitted only after the participant has first
taken a loan and has withdrawn the maximum from their Employee
Contributions Account, Rollover Account, and Matching Contributions
Account. No Matching Contributions are allocated for six months
following withdrawal.
In addition, all withdrawals are made pro rata from the various investment
funds. Other than withdrawals from the participant's Salary Deferral
Account, a participant may not make more than two withdrawals in any
calendar year. Withdrawals made before the age of 59-1/2 are subject to
tax penalty.
DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT
If a participant terminates employment after he or she is fully vested, his
or her account balance will be distributed in a single sum. In the case of
the participant's death, a single sum will be distributed to the
participant's beneficiary. If a participant terminates employment before he
or she is fully vested, the vested portion of his or her account balance
will be distributed in a single sum and the nonvested portion will be
forfeited.
A participant or beneficiary may elect to receive the single sum
distribution as of the 15th or last day of the month in which termination
of employment or death occurs. If a participant's account balance exceeds
$3,500, the participant or beneficiary may elect to receive the
distribution on any later date but not later than the April 1 following the
calendar year the participant reaches the age of 70-1/2. A beneficiary may
elect to receive the distribution on any later date but not later than five
years after the participant's death. However, if the beneficiary is the
participant's spouse, the beneficiary may elect to receive the distribution
on the latest date that the participant could have elected to receive the
distribution. If a participant's account balance does not exceed $3,500,
the participant or his or her
12
<PAGE> 13
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
beneficiary will receive the distribution as of the close of the calendar
month in which termination of employment or death occurs.
FORMS OF DISTRIBUTION
A participant's vested account balance will be distributed in the form of a
single lump sum in cash except that, if any portion of the account balance
is invested in the Telesis Stock Fund or the AirTouch Stock Fund, the
participant may elect to receive that portion in whole shares of Telesis or
AirTouch common stock and cash for any fractional shares.
If a participant ceases to be an employee before becoming 100% vested, the
nonvested portion of his or her account balance is forfeited during the
plan year in which employment terminates. Forfeitures arising from
Participating Entity contributions other than the Variable Contribution are
applied in the following order:
- to restore allocations for participants improperly excluded from such
allocations;
- to restore forfeitures for reinstated employees; and
- to reduce future Participating Entity contributions.
Forfeitures arising from the Variable Contribution are reallocated when the
Variable Contribution is credited to the participants' accounts.
RESTORATION OF FORFEITED AMOUNTS
Forfeitures will be restored to the participant's account if the
participant is reemployed before incurring a permanent service break (five
consecutive calendar years during which the participant does not complete
more than 500 hours of service in each calendar year). Reinstatement is
made from other forfeitures of former employees of the Participating Entity
which reemployed the participant.
ACCEPTANCE OF TAX-FREE ROLLOVERS
Eligible employees may rollover the taxable portion of an eligible rollover
distribution from another tax-qualified plan or IRA by contributing all or
part of that distribution in cash to the Plan. The rollover does not
qualify for Matching Contributions.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Plan are prepared in accordance with
generally accepted accounting principles ("GAAP"). Accordingly, revenues
are recognized when earned and expenses are recognized when incurred
(accrual basis).
Conformity with GAAP requires not only the use of the accrual basis of
accounting but also the use of estimates and assumptions that affect the
reported amount of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
13
<PAGE> 14
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
INVESTMENTS AND INVESTMENT INCOME
The fair value of investments is determined as follows:
- Shares or equivalent shares in the AirTouch Stock Fund and Telesis
Stock Fund are valued based on the daily closing price as reported on
the New York Stock Exchange composite tape.
- For those investments which represent an ownership of units of
investment funds held by an investment manager, the underlying
investments are valued based on published sources where available or,
if not available, from other sources considered reliable.
- Short-term investments are valued by the Trustee at cost, which
approximates market value.
Contracts with insurance companies in the Interest Income Fund are reported
at contract value, which is principal plus reinvested interest, less
distributions. The contracts bear interest at rates from 5.24% to 6.29% and
mature at various dates through 1998. The contract value of such contracts
approximates market value.
Purchases and sales of securities and units of investment funds are
reflected as of the trade date.
Dividend income is recorded on the ex-dividend date. Interest earned on
investments is recorded on the accrual basis.
Realized gains or losses and the change in unrealized appreciation
(depreciation) of the investments of the Plan are presented in the
statement of changes in net assets available for benefits as net
appreciation (depreciation) of investments.
PLAN EXPENSES
Expenses of the Plan are paid directly by the Participating Entity and the
Plan's participants and, as such, are not reflected in the accounts of the
Plan. However, brokerage fees, transfer taxes and other fees incident to
the purchase and sale of securities held by the Plan are reflected in the
accounts of the Plan.
UNPAID PARTICIPANT ACCOUNTS
At December 31, 1996 and 1995, amounts allocated to accounts of
participants who have elected to withdraw from the Plan but have not been
paid totaled $691,000 and $1,210,000, respectively, and are included in net
assets available for benefits. These amounts are reported as a liability in
the Form 5500 as required by the Department of Labor.
3. TAX-QUALIFIED STATUS
AirTouch received a favorable determination letter on March 26, 1996 from
the Internal Revenue Service as to the tax-qualified status of the Plan.
The Plan has been amended since receiving the determination letter.
AirTouch believes these amendments to be in compliance with the
tax-qualification rules of the IRC. Accordingly, no provision has been
made for federal or state income taxes.
14
<PAGE> 15
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
4. SUBSEQUENT EVENT
During 1996, AirTouch acquired Cellular Communications, Inc. ("CCI").
Effective January 27, 1997, assets of CCI's retirement plans (the "Great
Lakes Market Plans") with an aggregate fair market value of $39.9 million
were transferred to the Plan. The participants of the Great Lakes Market
Plans became participants of the Plan on the date of transfer.
15
<PAGE> 16
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT COST VALUE
----------------- ------------- ---- -----
<S> <C> <C> <C>
AirTouch Communications, Inc.* Common Stock $ 45,635 $ 43,944
Pacific Telesis Group Common Stock 9,703 13,922
Europacific Growth Fund International Equity Fund 2,001 2,085
Fidelity Contrafund Growth Fund 45,518 49,926
Wells Fargo Equity Index Equity Fund 32,204 36,637
Barclays US Money Market Short-term Fund 12,212 12,212
Barclays LifePath 2000 Asset Allocation Fund 37 39
Barclays LifePath 2010 Asset Allocation Fund 128 137
Barclays LifePath 2020 Asset Allocation Fund 15,823 17,365
Barclays LifePath 2030 Asset Allocation Fund 276 292
Barclays LifePath 2040 Asset Allocation Fund 178 189
Barclays Daily US Debt Fund Bond Fund 2,763 2,899
The Northern Trust Company* Short-term Investment Fund 2,145 2,145
Contracts with insurance companies:
Provident Life & Accident #627-05395, 6.29%, 1,026 1,026
matures 12/31/97
Prudential Insurance Company GA-7756-211, 5.24%, 711 711
matures 12/31/98
INVESCO Stable Value Fund Diversified Pooled Fund 7,490 7,490
Participant Loans Loans issued for terms of
1-10 years bearing interest
of 9.25% during 1996 - 4,982
--------- ---------
$177,850 $196,001
--------- ---------
</TABLE>
*Party-in-interest
16
<PAGE> 17
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS(1)
FOR THE YEAR ENDED AT DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PRICE DATA)
<TABLE>
<CAPTION>
EXPENSE
INCURRED
IDENTITY OF DESCRIPTION OF PURCHASE SELLING LEASE WITH
PARTY INVOLVED ASSETS PRICE PRICE RENTAL TRANSACTIONS
<S> <C> <C> <C> <C> <C>
Fidelity Contrafund 1,299,262 units bought in $ 38.39*
104 transactions
114,790 units sold in 64 $ 40.39*
transactions
SIT New Beginning Growth Fund 2,487,666 units sold in 10 $ 14.69*
transactions
The Northern Trust Company Collective short-term
investment fund:
214 purchases $ 1.00
206 sales $ 1.00
State Street Yield Plus Fund 772,342 units bought in 22 $ 1.00
transactions
10,344,348 units sold in 2 $ 1.00
transactions
Barclays Daily US Debt Fund 511,423 units bought in 57 $ 11.27*
transactions
237,196 units sold in 68 $ 12.70*
transactions
Barclays US Money Market Fund 14,890,618 units bought in $ 1.00
58 transactions
2,678,367 units sold in 100 $ 1.00
transactions
</TABLE>
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET ON NET
IDENTITY OF COST OF TRANSACTION GAIN
PARTY INVOLVED ASSETS DATE OR (LOSS)
<S> <C> <C> <C>
Fidelity Contrafund $49,880 $49,880
$ 4,362 $ 4,637 $ 275
SIT New Beginning Growth Fund $27,779 $36,544 $8,765
The Northern Trust Company
$55,573 $55,573
$55,033 $55,033
State Street Yield Plus Fund $ 772 $ 772
$10,344 $10,344
Barclays Daily US Debt Fund $ 5,763 $ 5,763
$ 3,000 $ 3,012 $ 12
Barclays US Money Market Fund $14,891 $14,891
$ 2,678 $ 2,678
</TABLE>
(1) Transactions during the year ended December 31, 1996 in excess of 5% of the
current value of Plan assets at January 1, 1996 as defined in Section
2520.103-6 of the Department of Labor Rules and Regulations for Reporting
and Disclosure under ERISA.
* Average price per share.
17
<PAGE> 18
AIRTOUCH COMMUNICATIONS RETIREMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS(1)
FOR THE YEAR ENDED AT DECEMBER 31, 1996 -- (Continued)
(DOLLARS IN THOUSANDS, EXCEPT PRICE DATA)
<TABLE>
<CAPTION>
EXPENSE
INCURRED
IDENTITY OF DESCRIPTION OF PURCHASE SELLING LEASE WITH
PARTY INVOLVED ASSETS PRICE PRICE RENTAL TRANSACTIONS
<S> <C> <C> <C> <C> <C>
Wells Fargo Equity Index Fund 2,031,720 units bought in $ 17.22*
103 transactions
162,488 units sold in 51 $ 17.93*
transactions
AirTouch Communications, Inc. 478,190 shares bought in $ 27.79*
25 transactions
258,033 shares sold in 26 $ 27.50* $ 13
transactions
Barclays Equity Index Fund 1,458,360 units bought in $ 19.32*
2 transactions
1,458,360 units sold in 1 $ 19.34
transaction
Barclays LifePath 2020 Fund 1,412,817 units bought in $ 13.20*
53 transactions
214,455 units sold in 87 $ 13.53*
transactions
State Street PacTel Balanced Fund 1,064,827 units sold in 1 $ 15.38
transaction
State Street S&P Index Fund 271,524 units sold in 1 $ 103.58
transaction
</TABLE>
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET ON NET
IDENTITY OF COST OF TRANSACTION GAIN
PARTY INVOLVED ASSETS DATE OR (LOSS)
<S> <C> <C> <C>
Wells Fargo Equity Index Fund $34,985 $34,985
$ 2,781 $ 2,914 $ 133
AirTouch Communications, Inc. $13,289 $13,289
$ 6,758 $ 7,096 $ 325
Barclays Equity Index Fund $28,180 $28,180
$28,180 $28,207 $ 27
Barclays LifePath 2020 Fund $18,647 $18,647
$ 2,824 $ 2,901 $ 77
State Street PacTel Balanced Fund $12,235 $16,382 $4,147
State Street S&P Index Fund $18,301 $28,124 $9,823
</TABLE>
(1) Transactions during the year ended December 31, 1996 in excess of 5% of the
current value of Plan assets at January 1, 1996 as defined in Section
2520.103-6 of the Department of Labor Rules and Regulations for Reporting
and Disclosure under ERISA.
* Average price per share.
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
AirTouch Communications Retirement Plan
By: AirTouch Communications, Inc.
(Plan Administrator)
By: /s/ Mohan S. Gyani
Executive Vice President and
Chief Financial Officer
Date: June 20, 1997
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
23.1 Consent of Independent Accountants
Price Waterhouse LLP
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-57083) of AirTouch Communications, Inc. of our
report dated June 19, 1997 appearing on page 3 of the Annual Report of the
AirTouch Communications Retirement Plan on Form 11-K for the year ended December
31, 1996.
/s/ PRICE WATERHOUSE LLP
San Francisco, California
June 19, 1997
