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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-4996-2
ALLTEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 34-0868285
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Allied Drive, Little Rock, Arkansas 72202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (501) 661-8000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock New York and Pacific
$2.06 No Par Cumulative Convertible
Preferred Stock New York and Pacific
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. (X)
Aggregate market value of voting stock held by non-affiliates as of
January 31, 1994 - $ 5,228,787,092
Common shares outstanding, January 31, 1994 - 187,579,806
DOCUMENTS INCORPORATED BY REFERENCE
Document Incorporated Into
Portions of the annual report to stockholders
for the year ended December 31, 1993 Parts I, II and IV
Proxy statement for the 1994 annual meeting
of stockholders Part III
The Exhibit Index is located on pages 37 to 40.
ALLTEL CORPORATION
Form 10-K
CROSS-REFERENCE SHEET
Page Reference
Form Annual Proxy
10-K Report Statement
Part I
Item 1 Business 1 - -
Item 2 Properties 16 - -
Item 3 Legal Proceedings 17 - -
Item 4 Submission of Matters to
Vote of Security Holders 17 - -
Item 10(b) Executive Officers of Registrant 17 - -
Part II
Item 5 Market for the Registrant's - 35, 37, -
Common Equity and Related 40 and
Stockholder Matters inside back
cover page
Item 6 Selected Financial Data - 30 -
Item 7 Management's Discussion and - 25-28 -
Analysis of Financial Condition
and Results of Operations
Item 8 Financial Statements and - 29, 31-43 -
Supplementary Data
Item 9 Changes in and Disagreements 19 - -
with Accountants on Accounting
and Financial Disclosure
Part III
Item 10(a) Directors of the Registrant - - 1-6
Item 11 Executive Compensation - - 10-17
Item 12 Security Ownership of Certain - - 7-8
Beneficial Owners and
Management
Item 13 Certain Relationships and - - 24
Related Transactions
Part IV
Item 14 Exhibits, Financial Schedules 20-21 - -
and Reports on Form 8-K
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
THE COMPANY
GENERAL
ALLTEL Corporation ("ALLTEL" or the "Company"), incorporated in June 1960
under the laws of Ohio as Mid-Continent Telephone Corporation, changed its
name to ALLTEL Corporation in October 1983. During 1990, the Company
changed its state of incorporation to Delaware. ALLTEL is a diversified
telecommunications and information services company. The Company provides
local and network access services to customers throughout 22 states. The
Company owns subsidiaries or investments that provide cellular telephone,
wide-area paging and fiber optic-based long-distance telephone service.
Information processing management services and advanced applications
software are provided to the financial, healthcare and telecommunications
industries by the Company's information services subsidiaries.
Telecommunications products and electronic and electric wire and cable are
warehoused and sold by the Company's distribution subsidiaries. In
addition, the Company publishes telephone directories and provides cable
television service to more than 17,000 customers.
ACQUISITIONS
Effective November 1, 1993, the Company and GTE Corporation completed an
exchange of telephone service areas in several states. ALLTEL exchanged
approximately 95,000 access lines in Illinois, Indiana and Michigan and $443
million in cash for GTE's Georgia telephone operations, which serve
approximately 320,000 access lines.
In October 1993, the Company completed its merger with TDS Healthcare
Systems Corporation ("TDS"). TDS is a leading provider of comprehensive
patient care and healthcare enterprise information systems serving more than
200 hospitals in the United States, Canada and Europe.
In October 1993, ALLTEL Publishing Corporation ("ALLTEL Publishing")
completed its purchase of GTE Directories Service Corporation's ("GTE
Directories") independent publishing business which includes contracts with
more than 125 independent telephone companies across the country.
During 1993, ALLTEL Mobile Communications, Inc. ("ALLTEL Mobile") acquired a
100% interest in one Georgia Rural Service Area ("RSA") which has a
population of approximately 145,000. In addition, ALLTEL Mobile acquired
interests in two other Georgia RSA's and increased its ownership in one
Texas RSA and one Mississippi RSA.
At December 31, 1992, ALLTEL Mobile had a transaction pending to acquire an
additional 20% interest in the Ft. Smith, Ark. Metropolitan Statistical Area
("MSA"). This transaction was completed during the first quarter of 1993
and increased ALLTEL Mobile's interest in the Ft. Smith MSA to 80%.
On December 31, 1992, ALLTEL Mobile acquired a 60% interest and a 90%
interest in the Ft. Smith, Ark. and Fayetteville, Ark. MSAs, respectively.
The Ft. Smith MSA has a population of approximately 219,000 and the
Fayetteville MSA has a population of approximately 211,000.
1
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
THE COMPANY (continued)
ACQUISITIONS (continued)
In December 1992, the Company acquired SLT Communications, Inc. ("SLT").
SLT serves approximately 42,000 telephone customers primarily in suburban
Houston. It also has approximately 328,000 cellular "pops," including 2.34%
ownership in the Houston, Galveston and Beaumont, Texas MSA, a 1% interest
in the Little Rock, Ark. MSA, and has interest in four Texas RSA markets.
In addition, SLT serves 6,400 cable television subscribers and owns
one-third of Metropolitan Houston Paging Services, one of the largest paging
networks in Texas, serving nearly 70,000 subscribers.
During 1992, ALLTEL Mobile increased its ownership to 100% in the
Springfield, Mo. and Charlotte, N.C. MSAs, to 80% in the Savannah, Ga. MSA
and to 64% in the Little Rock, Ark. MSA.
In February 1992, the Company acquired Computer Power, Inc. ("CPI"), the
nation's largest provider of software and processing services to the
mortgage industry. CPI has a comprehensive set of proprietary software
systems which includes the Mortgage Servicing Package, Residential Loan
Inventory Control Package, the Residential Loan Production Control Package,
and a number of related systems as well as consulting, training, portfolio
conversion and other services.
During 1992, ALLTEL Mobile purchased an additional 42% interest in the
Savannah, Ga., MSA, increasing its total interest to 80%, purchased
operating control of the Ft. Smith and Fayetteville, Ark., MSAs, as well as
additional interests in three RSAs in Arkansas and Oklahoma, one Missouri
RSA, and three Alabama RSAs.
In 1991, the Company acquired Missouri Telephone Company. Missouri
Telephone Company serves approximately 20,000 customer access lines and
2,600 cable television customers in Missouri. It also has 320,000 cellular
"pops" including 48% ownership in the Springfield, Mo. MSA cellular market
where together with ALLTEL Mobile, the Company now owns a 98% interest.
In early 1991, Systematics Information Services, Inc. ("Systematics")
acquired Systems Limited, an international banking software firm
headquartered in Hong Kong. Systems Limited is a provider of wholesale
banking software.
In January 1991, Systematics completed its acquisition of the cellular
telephone billing and information system software of C-TEC Corporation
("C-TEC"), an independent telecommunications company. In addition,
Systematics signed a long-term outsourcing agreement to manage all of
C-TEC's information processing functions.
In October 1990, Systematics acquired Computer Dynamics, Inc.("CDI"), a
mortgage data processor that services 200,000 loans for financial
institutions in six states. During 1993, these mortgages were transferred
to the CPI system.
2
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
THE COMPANY (continued)
ACQUISITIONS (continued)
In July 1990, Systematics acquired HORIZON Financial Software Corporation
("Horizon") of Orlando, Florida. HORIZON, now operating as Systematics
Mid-Range Systems Division, develops and markets software for mid-sized
community financial institutions using the IBM AS/400/ computer technology.
In May 1990, the Company acquired Systematics headquartered in Little Rock,
Arkansas. Systematics is one of the nation's leading providers of
information processing management services and advanced application software
for the financial services, healthcare and telecommunications industries.
ALLTEL Mobile acquired the remaining 55% of the Aiken, S.C./ Augusta, Ga.
system in 1990, where ALLTEL Mobile already held a 45% interest thereby
increasing its ownership to 100% in 1990 and acquired Kansas Cellular
Telephone Company's 40% interest in the Wichita, Kansas cellular system in
1989.
In April 1989, the Company acquired HWC Distribution Corp. ("HWC"),
headquartered in Houston, Texas. HWC is a supplier of specialty wire and
cable products.
DISPOSITIONS
In 1992, the Company sold substantially all of the assets of Ocean
Technology, Inc. ("OTI"). OTI designed, developed, and manufactured
command, control and communication systems primarily for military use. In
September 1991, the Company completed the sale of all of its natural gas
operations. During 1990, the Company sold Denro, Inc., a manufacturing
subsidiary.
MANAGEMENT
The Company's headquarters and regional offices staff supervise, coordinate
and assist subsidiaries in management activities, investor relations,
acquisitions, corporate planning, insurance and technical research. They
also coordinate the financing program for the entire corporate system.
EMPLOYEES
At December 31, 1993, the Company had 14,864 employees. Some of the
employees of the Company's telephone subsidiaries are part of collective
bargaining units. The Company maintains good relations with all employee
groups.
INDUSTRY SEGMENTS
Financial information about industry segments is included in the Company's
1993 Annual Report to Stockholders, which is incorporated herein by
reference.
3
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS
LOCAL SERVICE
General
The Company's telephone operating subsidiaries provide local service to over
1,576,000 customer lines through 668 exchanges. The telephone operating
subsidiaries also offer facilities for private line, data transmission and
other communications services. In addition, these subsidiaries sell and
lease end user telephone equipment (terminal equipment) as well as
maintenance and protection plans for customer-owned equipment.
Regulation
The Company's telephone operating subsidiaries are subject to regulation by
the utility commissions of the states in which they operate. These
commissions have jurisdiction over various matters including local and
intrastate toll rates, conditions of service, securities issues,
depreciation rates, the encumbering or disposition of public utility
properties and the prescription of a uniform system of accounts. There were
no local rate increases granted to any of the Company's telephone operating
subsidiaries in 1993, nor are there any rate requests currently pending
before regulatory commissions. During 1993, telephone operations were
affected by certain regulatory commission orders designed to reduce earnings
levels. These orders did not materially impact the results of operations of
the Company.
Competition
The Company's telephone subsidiaries provide local telephone service in
their service areas without significant competition from other regulated
carriers. However, ALLTEL is beginning to experience competition in its
territories from alternative telecommunications systems which include
facilities constructed by large end users or by interexchange carriers,
satellite transmission services, cellular communications, cable television
systems, radio-based personal communications services, competitive access
providers and other systems which are capable of completely or partially
bypassing the local telephone facilities. ALLTEL's subsidiaries are also
competing for the sale and leasing of terminal equipment to business and
residential customers as well as for the installation and maintenance of
inside wire and terminal equipment.
4
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS (continued)
ACCESS SERVICES
General
The Company's customers have access to message and private line toll
services through the local exchanges of the Company's telephone operating
subsidiaries. Local exchanges provide toll service and network access for
interexchange telephone traffic to locations outside of the Company's
service areas through connections with other local exchange and
interexchange carriers. These connections permit communications from any
telephone in the ALLTEL system to nationwide locations and to points in most
foreign countries.
Regulation
The Federal Communications Commission ("FCC") authorizes a rate-of-return
("ROR") that telephone companies may earn on interstate services they
provide. Effective January 1, 1991, the FCC replaced rate-of-return
regulation with price cap regulation for the Bell Operating Companies and
GTE Corporation with an optional election for all other companies not
remaining in the National Exchange Carrier Association ("NECA") Common Line
and Traffic Sensitive Pools. The FCC reduced the ROR from 12.0% to 11.25%
for companies remaining under ROR regulation. This 11.25% ROR continued
through 1993 and most likely will continue through 1994. A proceeding to
establish the methodology for prescribing the ROR was initiated in 1992.
This proceeding should result in new rules for setting the ROR sometime in
1994. As of December 31, 1993, certain of the Company's telephone operating
subsidiaries have exited the NECA traffic sensitive and end user tariffs.
Price cap regulation for holding companies, such as ALLTEL, requires all
affiliated operating telephone companies settling on a cost basis to choose
price cap regulation at the same time or all remain under ROR regulation
(with the exception of average schedule affiliates). Price cap regulation
allows for different earnings potential than ROR depending on the
"productivity offset" the company chooses. In addition, companies electing
price cap regulation may make adjustments for the rate of inflation and
exogenous (non-controllable) costs. Price cap regulation is designed to
allow greater pricing flexibility and includes the risk of earnings lower
than under ROR regulation. In 1992, the FCC initiated a rulemaking
proceeding (CC Docket No. 92-135) to address regulatory alternatives for
mid-size and small local exchange carriers. This proceeding resulted in a
set of rules, adopted in September of 1993, that provide for a non price cap
form of incentive regulation for which ALLTEL would be eligible.
Certain states in which the Company operates, either through legislative
changes or by commission actions, have adopted various forms of alternatives
to rate-of-return regulation. However, most of these plans have been
adopted for the Bell Operating Companies and have not been widely used by
commissions in dealing with other telephone companies including the
Company's telephone operating subsidiaries.
5
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS (continued)
ACCESS SERVICES (continued)
Regulation (continued)
To date, the Company has not elected price cap (incentive) regulation, but
is monitoring the activity of the FCC and the states in which the Company
operates telephone companies and will determine the appropriate action
required as these activities develop.
Interexchange carrier charges
The FCC establishes procedures by which interexchange carriers reimburse the
Company's telephone operating subsidiaries for the use of their local
networks to complete long-distance calls. With the exception of ALLTEL New
York, Inc., ALLTEL Carolina, Inc., Oklahoma ALLTEL, Inc., Sugar Land
Telephone Company, ALLTEL Georgia Communications Corp. and Georgia ALLTEL
Telecom Inc., all of the Company's telephone operating subsidiaries
participated in NECA's interstate traffic sensitive tariff and settlements
processes during 1993. All companies, with the exception of ALLTEL Georgia
Communications Corp. and Georgia ALLTEL Telecom Inc., also participated in
NECA's common line tariffs and pools during 1993. As of December 31, 1993,
participation in the NECA revenue distribution ("pooling") process is based
on nationwide average schedules for four of the Company's telephone
operating subsidiaries with the remaining companies settling on actual
costs. Intrastate interlata services are reimbursed to the Company's
telephone operating subsidiaries under arrangements ordered by state
commissions. These arrangements are based on access and can be on a
bill-and-keep or pooled basis. The Company's telephone operating
subsidiaries receive reimbursement for intrastate intralata services through
access or toll based revenue arrangements, once again on either a
bill-and-keep or pooled basis.
Equal access
The Company's telephone operating subsidiaries offer equal access to nearly
90% of their customers. The availability of equal access provides customers
with the opportunity to choose the long-distance company they want to use.
The Company's telephone operating subsidiaries then program their equipment
to allow the customer to use the selected long-distance company by dialing
1, the area code, and a seven-digit telephone number.
Billing and collection
Interstate billing and collection services were previously detariffed as
ordered by the FCC. The Company's telephone operating subsidiaries continue
to provide interstate billing and collection services for interexchange
carriers through various agreements and also provide intrastate billing and
collection services under state tariff arrangements or under contract where
these services are detariffed.
6
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
TELEPHONE OPERATIONS (continued)
ACCESS SERVICES (continued)
Competition
Long-distance services are provided by several competing companies. One
aspect of competition is the potential bypass of the local exchange
carrier's facilities by large volume toll users. Certain states in which
the Company's telephone subsidiaries operate allow various forms of
intralata competition for select functions or complete intralata service.
There has been no significant measurable effect on the operations of the
Company's telephone subsidiaries as a result of this competition.
The long-range effect of competition on the provision and cost of
telecommunications services and equipment will depend on technological
advances, regulatory actions at both the state and federal levels, court
decisions, and possible future federal and state legislation. The continued
growth of competition may have an effect on the cost of telephone service to
customers and on the telephone revenues of the Company's telephone operating
subsidiaries. The FCC has ordered that the larger (Tier 1) local exchange
carriers provide special transport interconnection for competitive
providers. In addition, an order was released in late 1993, requiring the
same category of companies to tariff switched transport interconnection.
The switched transport interconnection tariffs will become effective in
early 1994.
7
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES
GENERAL
Systematics provides a wide range of information processing services to the
financial services, healthcare and telecommunications industries through
information processing centers that it staffs, equips and operates.
Information processing contracts are generally for a multi-year period.
Systematics' software and services have been developed and improved
continuously over the last 25 years and are designed to fulfill
substantially all of the retail information processing and management
information requirements of financial institutions. Systematics also
markets software worldwide to financial services, healthcare and
telecommunications companies operating their own information processing
departments.
CPI provides data processing and related computer software and systems to
financial institutions originating and/or servicing single family mortgage
loans. CPI's software products and processing services, combined with CPI's
team of mortgage bankers, are intended to offer a cost-effective alternative
to the extensive technical support staff and the enlarged group of mortgage
bankers which would otherwise have to be assembled in-house by each
customer. CPI's on-line systems automate processing functions required in
the origination of mortgage loans, the management of such loans while in
inventory before they are sold in the secondary market, and their subsequent
servicing.
TDS is primarily engaged in the development and marketing of comprehensive
patient centered healthcare enterprise information systems to medium to
large healthcare companies throughout North America and Europe. These
systems are designed to enhance the quality of patient care, control
processing costs and provide substantially all of the information
requirements of its users. Under typical arrangements with hospitals, TDS'
software is licensed under perpetual license arrangements. Software and
hardware maintenance are normally contracted for periods of five to seven
years. Additionally, TDS contracts with its customers to install software
over periods which range from twelve to eighteeen months. Other services
provided by TDS include training, consulting and data processing services.
CUSTOMERS
Systematics' primary market for its financial products and services are the
nation's commercial banks and savings institutions and financial
institutions outside the United States, primarily in Europe and Asia.
Financial software and services are also marketed to mortgage service
companies, credit unions and healthcare companies. Systematics' primary
market for its telecommunications products and services is the top 150
telephone companies and top 50 cellular companies in the United States.
8
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES (continued)
CUSTOMERS (continued)
CPI provides its services primarily to financial institutions originating
and/or servicing single family mortgage loans that have sold the loans in
the secondary market while continuing to service the loans. These
institutions which include 60 of the top 100 servicers of residential
mortgages are located throughout the United States. In total, more than 13
million mortgage loans representing over $1 trillion are processed by CPI's
software.
TDS' primary market for its software products are hospitals with 400 or more
beds. TDS also markets data processing services to smaller healthcare
companies. Many of TDS' customers are large, state funded hospitals which
include a significant number of university hospitals and other large
healthcare providers. TDS clients are located throughout the United States,
Canada and Europe.
COMPETITION
Systematics' competition primarily comes from "in-house" bank information
processing departments and other companies engaged in active competition for
financial institution outsourcing contracts. Numerous large financial
institutions provide information processing for smaller institutions in
their respective geographic areas, along with other companies that perform
such services for small institutions. There are also other companies that
provide information processing services to the telecommunications industry.
CPI's competition comes from "in-house" information processing departments
and from other companies that offer information processing services to the
mortgage banking industry. CPI competes in its business by providing a high
level of service and support.
TDS' competition primarily comes from other companies that provide
comprehensive integrated hospital information systems and from companies
which offer solutions for individual departments within the respective
healthcare enterprises.
The information services subsidiaries substantially rely upon and vigorously
enforce contract and trade secret laws and internal non-disclosure
safeguards to protect the proprietary nature of their computer software.
9
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES (continued)
REGULATION AND EXAMINATION
Systematics and CPI are regulated by the federal agencies that have
supervisory authority over banking, thrift, and credit union operations.
Systematics is also classified as one of twelve national vendors that, as a
result of their market share, process a significant portion of the financial
industry assets. These industry leaders are also examined by the federal
Financial Institutions Examination Council on an ongoing basis.
Systematics' and CPI's management practices, policies, procedures, standards
and overall financial condition are components of these reviews. In
addition to these corporate examinations, Systematics' individual processing
sites are examined, as if they were departments of their respective clients,
by federal and state regulators, as well as, the clients' internal audit
departments and their independent auditing firms. The same standards of
performance are applied to those information processing centers as are
applied to the client financial institutions. Reports of Systematics' and
CPI's data center performance are furnished to the Board of Directors of
Systematics and to the Board of Directors of the examined client. The
supervisory agencies include applicable state banking departments, the
Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the
Office of the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System and the National Credit Union Administration.
Systematics' and CPI's processing contracts include a commitment to install
all necessary changes in its computer software that are required by changes
in regulations.
CPI operates transmitters at the network's information processing facility
hub and operates very small aperture technology ("VSAT") earth stations at
numerous customer locations. Prior to initiation, construction or operation
of the transmitters used in a VSAT satellite network, operators of these
transmitters such as CPI are required by the Communications Act of 1934 to
be authorized by the FCC. The FCC grants licenses to VSAT operators for a
predetermined number of earth stations that may be placed at unspecified
locations in the domestic United States. CPI has FCC authorization to
operate its domestic earth station satellite network, consisting of one hub
located in Jacksonville, Florida and various 1.8m and 2.4m VSAT's.
TDS is not specifically regulated by any federal or state healthcare
agency. However, its software must meet all federal and state reporting
requirements of its customers, including Medicare, Medicaid and other state
sponsored programs.
10
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INFORMATION SERVICES (continued)
PRODUCT DEVELOPMENT AND SUPPORT
In the past five years, the information services subsidiaries have spent
approximately $113 million ($35.6 million in 1993) on IBM mainframe COBOL
software design and development, or an average of 5.4% of their total
information services operating revenues in those years. One of the
information services subsidiaries has also begun to develop products which
will be utilized in a UNIX based environment. Changes in regulatory
requirements of both state and federal authorities, increasing competition
and the development of new products and markets create the need to
continually update or modify existing software and systems offered to
customers. The information services subsidiaries intend to continue to
maintain, improve, and expand the functions and capabilities of their
software products over the next several years.
OTHER
In 1993, Systematics signed a long-term agreement with GTE
Telecommunications Products and Services Group to outsource GTE's cellular
billing operations. This agreement further strengthens Systematics'
position in the telecommunications information processing market.
Within three months of acquiring TDS, Systematics signed its first hospital
outsourcing contract with St. Joseph's Hospital in Parkersburg, West
Virginia. Under terms of the five-year contract, Systematics will assume
all healthcare information systems operations for this 375 bed hospital,
including providing on-site and remote management, software implementation
and support, hardware and network manangement and maintenance.
In 1992, Systematics purchased an equity interest in Treasury Services
Corporation of Santa Monica, California, joining forces with that
organization to provide its financial services industry customers with
better tools for managing profitability and risk.
In 1991, Systematics entered into a worldwide strategic alliance with
Andersen Consulting to jointly pursue financial services clients seeking
outsourcing, software and systems integration expertise.
During 1991, Systematics signed a long-term facilities management contract
to handle all information processing activities for ALLTEL's telephone and
cellular operations. In 1990, Systematics signed a long-term contract with
C-TEC to perform data processing services for their telephone, cable
television and cellular operations. The ALLTEL and C-TEC facilities
management contracts emphasize Systematics' efforts to establish a strong
position in the telecommunications software and services marketplace.
11
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
PRODUCT DISTRIBUTION OPERATIONS
GENERAL
ALLTEL Supply, Inc., ("ALLTEL Supply") with twelve warehouses and nine
counter-sales showrooms across the United States, is a major distributor of
telecommunications equipment and materials. It supplies equipment to
affiliated and non-affiliated telephone companies, business systems
suppliers, railroads, governments and retail and industrial companies. HWC,
with ten warehouses throughout the United States, is one of the nation's
leading suppliers of specialty wire and cable products.
COMPETITION
ALLTEL Supply and HWC (the "Distribution companies") experience substantial
competition throughout their sales territories from other distribution
companies and direct sales by manufacturers. Competition is based primarily
on quality, product availability, service, price and technical assistance.
PRODUCTS
ALLTEL Supply offers more than 35,000 products for sale. In addition,
ALLTEL Supply inventories single and multi-line telephone sets, local area
networks ("LANS"), switching equipment modules, interior cable, pole line
hardware and various other telecommunications supply items.
HWC inventories more than 38,000 reels of specialty wire and cable. These
include shielded and unshielded power cables, flame resistant cables and
high temperature precision engineered cables.
The Distribution companies have not encountered any material shortages or
delays in delivery of products from their suppliers.
12
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
CELLULAR MOBILE TELEPHONE
GENERAL
ALLTEL Mobile provides cellular mobile telephone service in various major
markets throughout the United States. Cellular telephone service combines
the latest advances in telephone, radio and computer technology and is being
marketed to business executives, on-the-move professional people and
individual consumers. As cellular becomes increasing more popular with
broader segments of the population, ALLTEL Mobile has opened several retail
stores, in addition to its traditional sales offices, where customers can
purchase equipment and learn more about wireless services.
BUSINESS
The potential of a cellular telephone market's investment is quantified by
the market's population times the percent of a company's ownership interest
of the cellular operation in that market ("pops"). ALLTEL Mobile owns a
majority interest in cellular operations in 12 MSAs and a minority interest
in 13 other MSAs. This represents 4.4 million cellular pops. ALLTEL Mobile
also owns a majority interest in cellular operations in 47 RSAs and a
minority interest in 23 other RSAs. This represents 3.2 million cellular
pops.
ALLTEL Mobile operates systems in Charlotte, N.C.; Little Rock, Ark.;
Jackson, Miss.; Montgomery, Ala.; Springfield, Mo.; Ocala/Gainesville, Fla.;
Albany, Ga.; Aiken, S.C./Augusta, Ga.; Savannah, Ga.; Ft. Smith, Ark.; and
Fayetteville, Ark.
COMPETITION
Direct competition in the cellular telephone market consists of a
non-wireline carrier licensed to provide cellular telephone service in the
same area. Additionally, non-cellular mobile telephone service may be
available in the licensed area but is not currently considered a direct
competitor within the cellular market.
13
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
PAGING
ALLTEL Mobile also operates wide-area computer-driven paging networks as a
complementary service to cellular telephones. In addition to paging
networks in Arkansas and Florida, the Company's acquisition of SLT in 1992
added a one-third ownership in one of the largest paging networks in Texas,
which serves more than 115,000 subscribers.
DIRECTORY PUBLISHING
ALLTEL Publishing currently coordinates advertising, sales, printing and
distribution for 372 telephone directories in 39 states.
In October 1993, ALLTEL Publishing completed its purchase of GTE Directories
independent publishing business, which includes contracts with more than 125
independent telephone companies across the country. Under the terms of the
agreement, ALLTEL Publishing will provide all directory publishing services
including contract management, production and marketing. As subcontractor,
GTE Directories will provide directory sales and printing services through a
separate contract with ALLTEL Publishing.
CABLE TELEVISION SERVICE
The Company provides cable television service to more than 17,000
customers in certain areas of the Navajo Indian Reservation (which covers an
area including parts of New Mexico, Arizona, and Utah), and to residents of
Needles, California, Springfield, Missouri, and central Texas.
NATURAL GAS DISTRIBUTION
In 1991, the Company disposed of all natural gas distribution operations.
MANUFACTURING
During 1992, the Company sold substantially all of the assets of OTI, which
designed, developed, manufactured and marketed products for use in military
command, control and communications systems. During 1990, the Company sold
Denro, Inc., which designs and manufactures microprocessor-based air traffic
control voice switching and control systems. After the sale of OTI, the
Company did not have any manufacturing operations.
14
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 1. Business
INVESTMENTS
LDDS
ALLTEL owns a 11.2% interest in LDDS Communications, Inc. ("LDDS"), a
publicly-held company. The investment was acquired in exchange for the
Company's previous interest in Advance Telecommunications Corporation
("ATC"), which was acquired by LDDS during 1992.
LDDS is one of the largest regional long-distance companies in the United
States and provides long-distance telecommunications services to customers
located in 41 states.
Max E. Bobbitt, ALLTEL's President, is a member of LDDS's Board of Directors.
COMDIAL
ALLTEL owns a 8.1% interest in Comdial Corporation, a producer of quality
telephone sets and key systems. Max E. Bobbitt, ALLTEL's President, is a
member of Comdial's Board of Directors.
CHILLICOTHE
ALLTEL owns a 19.8% interest in Chillicothe Telephone Company, which serves
approximately 27,000 telephone lines in Ohio. Frederick G. Griech,
President of ALLTEL Service Corporation's Northeast Region, and Americo
Cornacchione, Senior Vice President-Accounting and Finance of ALLTEL Service
Corporation's Northeast Region, are members of Chillicothe's Board of
Directors.
OTHER
During 1991, the Company sold its stock in Luz International Limited, a
provider of solar energy, to an investment group in a private transaction.
During 1990, the Company completed the sale of its 14.5% interest in TPI
Enterprises, Inc., which had been a supplier of business communications
systems.
15
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 2. Properties
TELEPHONE PROPERTY
The Company's telephone property in service consists primarily of land and
buildings, central office equipment, telephone lines, telephone instruments
and related equipment. The gross investment by category in telephone
property as of December 31, 1993 was as follows:
(Thousands)
Telephone-
Land, buildings and leasehold
improvements $ 252,402
Central office equipment 1,158,172
Outside plant 1,844,273
Telephone instruments,
related equipment and other 300,173
Total $3,555,020
Standard practices prevailing in the telephone industry are followed by the
Company's telephone operating subsidiaries in the construction and
maintenance of plant and facilities. Certain properties of the Company and
its telephone operating subsidiaries are pledged as collateral for long-term
debt.
OTHER PROPERTY
Other properties of the Company in service consist primarily of property,
plant and equipment used in information services, product distribution and
cellular telephone operations. The total investment by category for these
operations as of December 31, 1993 was as follows:
(Thousands)
Land, buildings and leasehold
improvements $ 97,113
Data processing equipment 195,470
Cellular telephone plant
and equipment 160,896
Furniture, fixtures
and miscellaneous 70,353
Machinery and equipment 2,789
Total $526,621
All of the Company's property is considered to be in sound operating
condition.
16
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 3. Legal Proceedings
The Company is not currently involved in any material pending legal
proceedings, other than routine litigation incidental to its
business, and, to the knowledge of the Company's management, no
material legal proceedings, either private or governmental, are
contemplated or threatened.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to the security holders for a vote during
the fourth quarter of the fiscal year.
Item 10(b). Executive Officers of the Registrant.
Name Age Position
Joe T. Ford 56 Chairman and Chief Executive
Officer
Max E. Bobbitt 49 President
Dennis J. Ferra 40 Senior Vice President - Accounting
and Administration
Francis X. Frantz 40 Senior Vice President - External
Affairs, General Counsel
and Secretary
Tom T. Orsini 43 Senior Vice President - Finance
and Corporate Development
John L. Comparin 41 Vice President - Human Resources
Ronald D. Payne 47 Vice President - Corporate
Communications
Jerry M. Green 46 Treasurer
John M. Mueller 43 Controller
Deborah J. Akins 38 Assistant Treasurer
17
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part I
Item 10(b). Executive Officers of the Registrant (continued)
There are no arrangements between any officer and any other person pursuant
to which he was selected as an officer. Except for Francis X. Frantz and
John L. Comparin, each of the officers named above has been employed by
ALLTEL or a subsidiary for the last five years. Mr. Frantz joined the
Company in March, 1990 as Senior Vice President and General Counsel. Prior
to joining ALLTEL, Mr. Frantz was a partner in the law firm of Thompson,
Hine, and Flory, in Cleveland, Ohio. Mr. Comparin joined the Company in
February, 1990 as Vice President - Human Resources. Prior to joining
ALLTEL, Mr. Comparin was Director of Human Resources for Maxus Corp.
(formerly Diamond Shamrock Corp.) of Dallas Texas.
FORM 10-K Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
For information pertaining to Markets for ALLTEL Corporation's
Common Stock and Related Shareholder Matters, refer to pages 35,
37, 40 and the inside back cover of ALLTEL's 1993 Annual Report to
Stockholders, which is incorporated herein by reference.
Item 6. Selected Financial Data.
For information pertaining to Selected Financial Data of ALLTEL
Corporation, refer to page 30 of ALLTEL's 1993 Annual Report to
Stockholders, which is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
For information pertaining to Management's Discussion and Analysis
of Financial Condition and Results of Operations of ALLTEL
Corporation, refer to pages 25-28 of ALLTEL's 1993 Annual Report to
Stockholders, which is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
For information pertaining to Financial Statements and
Supplementary Data of ALLTEL Corporation, refer to pages 29 and
31-43 of ALLTEL's 1993 Annual Report to Stockholders, which is
incorporated herein by reference.
18
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part II
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
During the two most recent fiscal years or the subsequent
interim period up to the date of this Form 10-K, there were no
disagreements with the Company's independent certified public
accountants on any matter of accounting principles or
practices, financial statement disclosures or auditing scope
or procedures. In addition, none of the "kinds of events"
described in item 304(a)(1)(v)(A), (B), (C) and (D) of
regulation S-K have occurred.
FORM 10-K PART III
Item 10(a). Directors of the Registrant.
For information pertaining to Directors of ALLTEL Corporation
refer to "Election of Directors" in ALLTEL's Proxy Statement
for its 1994 Annual Meeting of Stockholders, which is
incorporated herein by reference.
Item 10(b). Executive Officers of the Registrant.
For information pertaining to Executive Officers of ALLTEL
Corporation, refer to Part I, pages 17 and 18 of this Report.
Item 11. Executive Compensation.
For information pertaining to Executive Compensation, refer to
pages 10 through 17 in ALLTEL's Proxy Statement for its 1994
Annual Meeting of Stockholders, which is incorporated herein
by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
For information pertaining to beneficial ownership of ALLTEL
securities, refer to "Security Ownership of Certain Beneficial
Owners and Management" in ALLTEL's Proxy Statement for its
1994 Annual Meeting of Stockholders, which is incorporated
herein by reference.
19
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part IV
Item 13. Certain Relationships and Related Transactions.
For information pertaining to Certain Relationships and Related
Transactions, refer to "Management Compensation" in ALLTEL's
Proxy Statement for its 1994 Annual Meeting of Stockholders,
which is incorporated herein by reference.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as a part of this report:
1. Financial Statements:
The following Consolidated Financial Statements of ALLTEL
Corporation and subsidiaries, included in the annual
report of ALLTEL Corporation to its stockholders for the
year ended December 31, 1993, are incorporated herein by
reference:
Annual Report
Page Number
Report of Independent Certified Public
Accountants 29
Consolidated Balance Sheets - December 31, 1993
and 1992 32-33
Consolidated Statements of Income - for the
years ended December 31, 1993, 1992, and 1991 31
Consolidated Statements of Shareholders' Equity
- for the years ended December 31, 1993,
1992 and 1991 35
Consolidated Statements of Cash Flows
- for the years ended December 31, 1993
1992, and 1991 34
Notes to Consolidated Financial Statements 38-43
Supplementary Information-Business Segment and
Quarterly (Unaudited) Financial Information 36,37
and 43
The Consolidated Financial Statements and Supplementary
Financial Information listed in the above index which are
included in the 1993 Annual Report to Stockholders of
ALLTEL Corporation are hereby incorporated by reference.
20
ALLTEL Corporation
Securities and Exchange Commission
Form 10-K, Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(continued):
2. Financial Statement Schedules:
Form 10-K
Page Number
Report of Independent Public
Accountants 23
I. Marketable Securities -
Other Investments 24
V. Property, Plant and Equipment 25-30
VI. Accumulated Depreciation and
Amortization of Property, Plant
and Equipment 31-33
VIII. Valuation and Qualifying Accounts 34
IX. Short-Term Borrowings 35
X. Supplementary Income Statement
Information 36
3. Exhibits:
See "Exhibit Index" located on page 37-40 of this
document.
(b) No reports on Form 8-K were filed during the last quarter
of 1993.
Separate condensed financial statements of ALLTEL Corporation have
been omitted since the Company meets the tests set forth in
Regulation S-X Rule 4-08(e)(3). All other schedules are omitted
since the required information is not present or is not present in
amounts sufficient to require submission of the schedule, or
because the information required is included in the consolidated
financial statements and notes thereto.
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ALLTEL Corporation
Registrant
By /s/ Joe T. Ford
Joe T. Ford, Chairman and Chief Executive Date: February 18, 1994
Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
By /s/ Max E. Bobbitt Date: February 18, 1994
Max E. Bobbitt, President and Director
Joe T. Ford, Chairman, Chief Executive
Officer, and Director
(Principal Executive Officer)
Max E. Bobbitt, President and Director
Dennis J. Ferra, Senior Vice President -
Accounting and Administration
(Principal Accounting Officer)
Tom T. Orsini, Senior Vice President -
Finance and Corporate Development
(Principal Financial Officer)
By /s/ Max E. Bobbitt
Ben W. Agee, Director (Max E. Bobbitt,
Attorney-in-fact)
Alfred E. Campdon, Director
W. W. Johnson, Director Date: February 18, 1994
Emon A. Mahony, Jr., Director
George C. McConnaughey, Director
John H. McConnell, Director
Walter G. Olson, Director
Philip F. Searle, Director
John E. Steuri, Director
Carl H. Tiedemann, Director
Ronald Townsend, Director
William H. Zimmer, Jr., Director
22
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
ALLTEL Corporation:
We have audited in accordance with generally accepted auditing standards,
the financial statements included in ALLTEL Corporation's Annual Report
to shareholders incorporated by reference in this Form 10-K, and have
issued our report thereon dated January 27, 1994. Our audit was made for
the purpose of forming an opinion on those statements taken as a whole.
The schedules on pages 24 through 36 are the responsibility of the
company's management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not a required part of
the basic financial statements. This information has been subjected to
the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects
in relation to the basic financial statements taken as a whole.
As explained in Note 3 to the financial statements, as of December 31,
1993, the Company changed its method of accounting for investments in
conjunction with the adoption of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities."
ARTHUR ANDERSEN & CO.
Little Rock, Arkansas
January 27, 1994
23
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS
for the year ended December 31, 1993
(Dollars in Thousands)
Column A Column B Column C Column D Column E
Amount at
Number of which carried
shares or Market on balance
Description principal amount Cost value sheet (A)
LDDS Communications, Inc. 6,671,303 $104,082 $321,890 $321,890
All other investments (B) 60,453 60,453
Total $164,535 $382,343
(A) Securities available-for-sale are carried at fair value with unrealized
gains and losses included as a separate component of shareholders' equity,
net of tax. Investments for which there is no quoted market price readily
determinable are carried at cost.
(B) No other individual investment is greater than 2% of total assets.
24
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (A)
for the year ended December 31, 1993
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
Telephone plant:
Land $ 15,538 $ 4 $ 103 $ 2,058 (B) $ 16,565
(940)(C)
8 (D)
Buildings and leasehold improvements 210,886 6,536 1,329 35,028 (B) 235,837
(15,544)(C)
260 (D)
Central office equipment 900,998 108,661 46,574 262,896 (B) 1,158,172
(68,941)(C)
1,132 (D)
Station equipment 83,423 4,256 19,467 14,897 (B) 74,636
(8,284)(C)
(189)(D)
Outside plant 1,456,852 98,036 13,316 399,592 (B) 1,844,273
(97,020)(C)
129 (D)
Furniture, fixtures,
vehicles and other 183,822 24,907 9,298 34,446 (B) 225,537
(7,243)(C)
(1,097)(D)
Total telephone plant in service 2,851,519 242,400 90,087 551,188 3,555,020
Plant under construction 73,095 29,154 - 4,807 (B) 105,243
(253)(C)
(1,560)(D)
Total telephone plant $2,924,614 $271,554 $ 90,087 $554,182 $3,660,263
Continued on next page
25
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT - CONTINUED (A)
for the year ended December 31, 1993
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
Other plant:
Land $ 14,588 $ 9,750 $ 150 $ 334 (B) $ 24,522
Buildings and leasehold improvements 43,138 27,554 2 1,901 (B) 72,591
Data processing equipment 145,518 58,686 16,746 2,385 (B) 195,470
5,627 (D)
Cellular telephone plant and equipment 109,955 35,832 136 15,245 (B) 160,896
Furniture, fixtures and miscellaneous 45,299 18,118 736 13,233 (B) 70,353
(5,561)(D)
Machinery and equipment 2,815 221 64 (183)(D) 2,789
Total other plant in service 361,313 150,161 17,834 32,981 526,621
Plant under construction 11,464 31,751 5 4,743 (B) 47,953
Total other plant 372,777 181,912 17,839 37,724 574,574
Total property, plant and equipment $3,297,391 $453,466 $107,926 $591,906 $4,234,837
(A) Depreciation is calculated using primarily the straight-line method.
(B) Property, plant and equipment of companies acquired in 1993.
(C) Property, plant and equipment of companies exchanged in 1993.
(D) Property, plant and equipment transferred between categories and other
miscellaneous transactions.
26
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (A)
for the year ended December 31, 1992
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
Telephone plant:
Land $ 12,839 $ 2,701 $ 30 $ 28 (C) $ 15,538
Buildings and leasehold improvements 185,733 25,879 1,124 398 (C) 210,886
Central office equipment 846,634 128,335 70,135 (3,836)(C) 900,998
Station equipment 83,382 4,700 6,292 1,633 (C) 83,423
Outside plant 1,378,082 94,180 15,401 (9)(C) 1,456,852
Furniture, fixtures,
vehicles and other 169,240 22,840 8,829 571 (C) 183,822
Total telephone plant in service 2,675,910 278,635 101,811 (1,215) 2,851,519
Plant under construction 73,148 (929) 144 1,020 (C) 73,095
Total telephone plant $2,749,058 $277,706 $101,955 $ (195) $2,924,614
Continued on next page
27
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT - CONTINUED (A)
for the year ended December 31, 1992
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
Other plant:
Land $ 12,875 $ 2,085 $ 300 $ (30)(B) $ 14,588
(42)(C)
Buildings and leasehold improvements 38,830 6,506 - (2,085)(B) 43,138
(113)(C)
Data processing equipment 103,459 57,539 15,480 - 145,518
Cellular telephone plant and equipment 79,135 31,260 595 155 (C) 109,955
Furniture, fixtures and miscellaneous 40,362 9,610 4,613 (369)(B) 45,299
309 (C)
Machinery and equipment 9,309 126 96 (1,815)(C) 2,815
(4,709)(B)
Total other plant in service 283,970 107,126 21,084 (8,699) 361,313
Plant under construction 11,793 (171) 158 - 11,464
Total other plant 295,763 106,955 21,242 (8,699) 372,777
Total property, plant and equipment $3,044,821 $384,661 $123,197 $ (8,894) $3,297,391
(A) Depreciation is calculated using primarily the straight-line method.
(B) Property, plant and equipment of companies sold in 1992.
(C) Property, plant and equipment transferred between categories and other
miscellaneous transactions.
28
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (A)
for the year ended December 31, 1991
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
Telephone plant:
Land $ 12,693 $ 107 $ - $ 85 (C) $ 12,839
(46)(D)
Buildings and leasehold improvements 176,568 6,384 570 1,775 (C) 185,733
1,576 (D)
Central office equipment 782,007 103,380 47,621 8,934 (C) 846,634
(66)(D)
Station equipment 96,082 5,587 22,256 297 (C) 83,382
3,672 (D)
Outside plant 1,288,546 80,045 13,644 23,143 (C) 1,378,082
(8)(D)
Furniture, fixtures,
vehicles and other 160,737 20,015 11,336 2,063 (C) 169,240
(2,239)(D)
Total telephone plant in service 2,516,633 215,518 95,427 39,186 2,675,910
Plant under construction 48,091 25,733 - (676)(D) 73,148
Total telephone plant $2,564,724 $241,251 $ 95,427 $38,510 $2,749,058
Continued on next page
29
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT - CONTINUED (A)
for the year ended December 31, 1991
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Debits End of
Classification of Period at Cost Retirements (Credits) Period
Other plant:
Land $ 5,047 $ 2,955 $ - $ (335)(B) $ 12,875
389 (C)
4,819 (D)
Buildings and leasehold improvements 33,681 8,944 10 (1,754)(B) 38,830
410 (C)
(2,441)(D)
Data processing equipment 87,788 30,549 14,878 - 103,459
Gas distribution plant and equipment 75,802 4,697 108 (80,391)(B) -
Cellular telephone plant and equipment 41,827 36,020 709 2,364 (C) 79,135
(367)(D)
Furniture, fixtures and miscellaneous 31,375 10,278 2,315 (800)(B) 40,362
831 (C)
6,993 (D)
(6,000)(E)
Machinery and equipment 22,796 506 51 1,803 (C) 9,309
(15,745)(D)
Total other plant in service 298,316 93,949 18,071 (90,224) 283,970
Plant under construction 21,871 - 10,180 (55)(B) 11,793
157 (D)
Total other plant 320,187 93,949 28,251 (90,122) 295,763
Total property, plant and equipment $2,884,911 $335,200 $123,678 $(51,612) $3,044,821
(A) Depreciation is calculated using primarily the straight-line method.
(B) Property, plant and equipment of companies sold in 1991.
(C) Property, plant and equipment of companies purchased in 1991.
(D) Property, plant and equipment transferred between categories and other
miscellaneous transactions.
(E) Write-down to net realizable value of manufacturing property, plant and
equipment.
30
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
for the year ended December 31, 1993
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Balance at
Beginning Costs and Other Changes End of
Classification of Period Expenses Retirements Add (Deduct) Period
Allowance for depreciation
of property, plant and
equipment in service:
Telephone plant $1,098,005 $190,572 $ 79,988 $(101,290)(A) $1,359,021
(39,307)(B)
291,029 (C)
Other plant 137,397 62,528 14,580 (59)(B) 199,382
14,096 (C)
Total $1,235,402 $253,100 $ 94,568 $ 164,469 $1,558,403
(A) Accumulated depreciation of companies exchanged in 1993.
(B) Miscellaneous transfers between plant categories and other.
(C) Accumulated depreciation of companies purchased in 1993.
31
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
for the year ended December 31, 1992
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Balance at
Beginning Costs and Other Changes End of
Classification of Period Expenses Retirements Add (Deduct) Period
Allowance for depreciation
of property, plant and
equipment in service:
Telephone plant $1,016,963 $177,185 $101,419 $ 5,276 (B) $1,098,005
Other plant 118,959 46,392 18,930 (8,922)(A) 137,397
(102)(B)
Total $1,135,922 $223,577 $120,349 $ (3,748) $1,235,402
(A) Accumulated depreciation of companies sold in 1992.
(B) Miscellaneous transfers between plant categories and other.
32
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
for the year ended December 31, 1991
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Balance at
Beginning Costs and Other Changes End of
Classification of Period Expenses Retirements Add (Deduct) Period
Allowance for depreciation
of property, plant and
equipment in service:
Telephone plant $ 918,312 $173,222 $ 94,544 $ 17,424 (B) $1,016,963
2,549 (C)
Other plant 127,960 38,695 15,516 (31,501)(A) 118,959
1,092 (B)
(1,771)(C)
Total $1,046,272 $211,917 $110,060 $(12,207) $1,135,922
(A) Accumulated depreciation of companies sold in 1991.
(B) Accumulated depreciation of companies purchased in 1991.
(C) Miscellaneous transfers between plant categories and other.
33
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Thousands)
Column A Column B Column C Column D Column E
Additions
Per Adjusted Charged to Charged Balance at
Previous Adjustments Beginning Cost and to Other Deduction End of
Description Report (B) Balance Expense Accounts Describe Period
Allowance for doubtful
accounts, subscribers,
and others:
For the years ended
December 31, 1993 $ 8,849 $656 $ 9,505 $13,636 $ - $12,375 (A) $10,766
December 31, 1992 $10,961 $10,961 $10,506 $205 $12,823 (A) $ 8,849
December 31, 1991 $ 4,802 $ 4,802 $12,736 $127 $ 6,704 (A) $10,961
(A) Accounts charged off less recoveries of amounts previously charged off.
(B) Reclassification of amount for companies purchased in 1993.
34
SCHEDULE IX - SHORT-TERM BORROWINGS
(Dollars in Thousands)
Column A Column B Column C Column D Column E Column F
At End of Period During the Period
Category of Weighted Weighted
Aggregate Average Maximum Average Average
Short-term Interest Amount Amount Interest
Borrowings Balance Rate Outstanding Outstanding (2) Rate (2)
Short-term Borrowings (1):
for the years ended December 31, 1993 $ - 0.0% $ 4,400 $ 169 6.0%
December 31, 1992 $4,400 6.0% $27,500 $ 3,072 6.4%
December 31, 1991 $5,500 6.5% $ 5,500 $ 3,958 8.7%
(1) Short-term borrowing consists of notes payable to banks under lines
of credit of certain subsidiaries purchased in 1992.
(2) Based on average daily amounts outstanding.
35
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(Dollars in Thousands)
Column A Column B Column B Column B
Charged to Costs Charged to Costs Charged to Costs
and Expenses and Expenses and Expenses
For the Year Ended For the Year Ended For the Year Ended
Item December 31, 1993 December 31, 1992 December 31, 1991
1. Depreciation and amortization of intangible
assets, preoperating costs and similar
deferrals:
Amortization of computer software $17,813 $13,718 $16,148
Amortization of intangible assets 18,451 12,342 12,727
Amortization of extraordinary retirements 448 1,150 853
$36,712 $27,210 $29,728
2. Taxes, other than payroll and income taxes:
Property and franchise taxes $44,160 $40,938 $34,850
Gross receipts tax 12,255 11,085 11,238
Other taxes 1,193 737 1,644
$57,608 $52,760 $47,732
NOTE: Amounts for items other than those reported have been excluded because
they appear separately in the financial statements or they amount to
less than one percent of total revenue and sales.
36
EXHIBIT INDEX
Number and Name Page
(3)(a) Amended and Restated Certificate of Incorporation of *
ALLTEL Corporation (incorporated herein by reference to
Exhibit B to Proxy Statement, dated March 9, l990).
(b) By-Laws of ALLTEL Corporation (Exhibit 3(b) to Form SE *
dated February 17, 1993).
(4)(a) Amended and Restated Rights Agreement dated as of *
April 26, l989, between ALLTEL Corporation and
Ameritrust Company N.A. (incorporated herein by
reference to Form 8 dated April 26, l989, filed
with the Commission on April 28, l989).
(b) First Amendment to Amended and Restated Rights *
Agreement dated as of April l6, l990, between
ALLTEL Corporation and Ameritrust Company N.A.
(incorporated herein by reference to Form SE of
ALLTEL Corporation filed with the Commission on
April 23, l990).
(c) The Company agrees to provide to the Commission, upon --
request, copies of any agreement defining rights of
long-term debt holders.
(10)(a)(1) Executive Compensation Agreement and amendments thereto *
by and between the Corporation and Joe T. Ford
(incorporated herein by reference to Exhibit 10(b)
to Form 10-K for the fiscal year ended December 31, 1983).
(a)(2) Modification to Executive Compensation Agreement by and *
between the Corporation and Joe T. Ford effective as of
January 1, 1987 (incorporated herein by reference to
Exhibit 10(b)(2) to Form 10-K for the fiscal year ended
December 31, 1986).
(a)(3) Modification to Executive Compensation Agreement by and *
between ALLTEL Corporation and Joe T. Ford, effective as
of January 1, 1991 (incorporated herein by reference to
Exhibit 10 of ALLTEL Corporation Registration Statement
(No. 33-44736) on Form S-4 dated December 23, 1991).
(a)(4) Split-dollar Life Insurance Agreement by and between *
the Corporation and Joe T. Ford effective as of
January 24, 1990 (incorporated herein by reference
to Exhibit 10(b)(3) to Form 10-K for the fiscal year
ended December 31, 1989).
* Incorporated herein by reference as indicated.
37
EXHIBIT INDEX, Continued
Number and Name Page
10(b)(1) Executive Compensation Agreement by and between the Cor- *
poration and Max E. Bobbitt effective as of October 29,
1986 (incorporated herein by reference to Exhibit 10(c)(1)
to Form 10-K for the fiscal year ended December 31, 1986).
(b)(2) Modification to Executive Compensation Agreement by and *
between the Corporation and Max E. Bobbitt effective as
of January 1, 1987 (incorporated herein by reference to
Exhibit 10(c)(2) to Form 10-K for the fiscal year ended
December 31, 1986).
(b)(3) Modification to Executive Compensation Agreement by and *
between ALLTEL Corporation and Max E. Bobbitt, effective
as of January 1, 1991 (incorporated herein by reference
to Exhibit 10 of ALLTEL Corporation Registration Statement
(No. 33-44736) on Form S-4 dated December 23, 1991).
(b)(4) Split-dollar Life Insurance Agreement by and between the *
Corporation and Max E. Bobbitt effective as
of May 26, 1989 (incorporated herein by reference to
Exhibit 10(c)(3) to Form 10-K for the fiscal year ended
December 31, 1989).
(c) Executive Compensation Agreement by and between the *
Company and John E. Steuri effective as of April l7,
l990 (incorporated herein by reference to Exhibit B
of ALLTEL Corporation Registration Statement
(No. 33-34495) on Form S-4 dated April 23, 1990).
(d) Directors' Retirement Plan of ALLTEL Corporation (as 74
amended and restated effective January 1, 1994).
(e) Executive Deferred Compensation Plan of ALLTEL 77
Corporation (as amended and restated effective
October 1, 1993).
(f) Deferred Compensation Plan for Directors of ALLTEL 99
Corporation (as amended and restated effective
October 1, 1993).
(g)(l) ALLTEL Corporation 1975 Incentive Stock Option Plan (as *
amended and restated effective July 26, 1988)
(incorporated herein by reference to Exhibit 10(i)
to Form 10-K for the fiscal year ended December 31, 1988).
* Incorporated herein by reference as indicated.
38
EXHIBIT INDEX, Continued
Number and Name Page
10(g)(2) ALLTEL Corporation l99l Stock Option Plan (incorporated *
herein by reference to Exhibit A to Proxy Statement,
dated March 8, l99l).
(h)(1) Systematics, Inc. 1981 Incentive Stock Option Plan and *
Amendment No. 1 thereto (incorporated herein by
reference to Form S-8 (No. 33-35343) of ALLTEL Corporation
filed with the Commission on June 11, 1990).
(h)(2) Stock Purchase Plan for Employees of Systematics, Inc. *
and Amendment No. 1 thereto (incorporated herein by
reference to Post-effective Amendment No.1 to Form S-4
on Form S-8 (No. 33-34495) of ALLTEL Corporation filed
with the Commission on June 11, 1990).
(i) ALLTEL Corporation Performance Incentive Compensation Plan *
as amended, effective January 1, 1993 (Exhibit 10(i) to
Form SE dated February 17, 1993).
(j) ALLTEL Corporation Long-Term Performance Incentive *
Compensation Plan, as amended and restated effective
January 1, 1993 (Exhibit 10(j) to Form SE dated
February 17, 1993).
(k)(l) ALLTEL Corporation Pension Plan (January 1, 1989 *
Restatement) and Amendment Nos. 1 - 4 thereto
(incorporated herein by reference to Exhibit 10(p)
to Form 10-K for the fiscal year ended December 31, 1989).
(k)(2) Amendments No. 5 through 9 to ALLTEL Corporation Pension *
Plan (incorporated herein by reference to Exhibit 10(m)(2)
to Form 10-K for the fiscal year ended December 31, 1990).
(k)(3) Amendments No. 10 and 11 to ALLTEL Corporation Pension *
Plan (incorporated herein by reference to Exhibit 10 of
ALLTEL Corporation Registration Statement (No. 33-44736)
on Form S-4 dated December 23, 1991).
(k)(4) Amendments No. 12 through 14 to ALLTEL Corporation Pension *
Plan (Exhibit 10(k)(4) to Form SE dated February 17, 1993).
(k)(5) Amendments No. 15 through 18 to ALLTEL Corporation Pension 122
Plan.
(l)(1) ALLTEL Corporation Profit-Sharing Plan and Amendment *
No. 1 thereto (incorporated herein by reference to
Exhibit 10(q) to Form 10-K for the fiscal year ended
December 31, 1987).
(l)(2) Amendment No. 2 to ALLTEL Corporation Profit-Sharing Plan *
(incorporated herein by reference to Exhibit 10(q)(2)
to Form 10-K for the fiscal year ended December 31, 1988).
* Incorporated herein by reference as indicated.
39
EXHIBIT INDEX, Continued
Number and Name Page
10(l)(3) Amendments No. 3 through 6 to ALLTEL Corporation *
Profit-Sharing Plan (incorporated herein by reference
to Exhibit 10(q)(3) to Form 10-K for the fiscal year
ended December 31, 1989).
(l)(4) Amendments No. 7 and 8 to ALLTEL Corporation Profit- *
Sharing Plan (incorporated by reference to Exhibit 10(n)(4)
to Form 10-K for the fiscal year ended December 31, 1990).
(l)(5) Amendments No. 9 and 10 to ALLTEL Corporation Profit- *
Sharing Plan (incorporated herein by reference to
Exhibit 10 of ALLTEL Corporation Registration
Statement (No. 33-44736) on Form S-4 dated December 23,
1991).
(l)(6) Amendment No. 11 to ALLTEL Corporation Profit-Sharing Plan *
(Exhibit 10(l)(6) to Form SE dated February 17, 1993).
(l)(7) Amendments No. 12 through 16 to ALLTEL Corporation 134
Profit-Sharing Plan.
(m) ALLTEL Corporation Excess Benefit Plan (incorporated *
herein by reference to Exhibit 10(r) to Form 10-K
for the fiscal year ended December 31, 1987).
(n) Amended and Restated ALLTEL Corporation Supplemental *
Medical Expense Reimbursement Plan (incorporated herein
by reference to Exhibit 10(p) to Form 10-K for the fiscal
year ended December 31, 1990).
(11) Statement re computation of per share earnings. 41
(13) Annual report to stockholders for the year ended 46
December 31, 1993. Such report, except for the portions
incorporated by reference herein, is furnished for the
information of the SEC and is not "filed" as part
of this report.
(21) Subsidiaries of the registrant. 42
(23) Consents of experts and counsel. 45
(24) Powers of Attorney. 144
(99)(a) Annual report on Form 11-K for the Stock Purchase Plan --
for Employees of Systematics Information Services, Inc.
and its Affiliates for the year ended December 31, 1993
will be filed by amendment.
(99)(b) Annual report on Form 11-K for the CP National --
Corporation Incentive Thrift Savings Plan for the year
ended December 31, 1993 will be filed by amendment.
* Incorporated herein by reference as indicated.
40