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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1993
------------------------------------------------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 19334 [Fee Required]
For the transition period from to
--------------------- ------------------------
Commission File Number 2-36292
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GTE SOUTH INCORPORATED
- ------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
VIRGINIA 56-0656680
- ------------------------------------ ---------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
19845 N. U.S. 31, P.O. BOX 407, Westfield, Indiana 46074
- ------------------------------------------------------- -------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code 317-896-6464
----------------------------
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH WAS REGISTERED
- ----------------------------------- --------------------------------------
NONE
- ----------------------------------- --------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
NONE
- ------------------------------------------------------------------------------
(TITLE OF CLASS)
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
----
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
--- ---
THE COMPANY HAD 18,936,000 SHARES OF $25 PAR VALUE COMMON STOCK OUTSTANDING AT
FEBRUARY 28, 1994.
DOCUMENT INCORPORATED BY REFERENCE
ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1993
(INCORPORATED IN PARTS I AND II).
TABLE OF CONTENTS
Item Page
PART I
1. Business 1
2. Properties 4
3. Legal Proceedings 4
4. Submission of Matters to a Vote of Security Holders 4
PART II
5. Market for the Registrant's Common Equity and Related
Shareholder Matters 5
6. Selected Financial Data 5
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
8. Financial Statements and Supplementary Data 5
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 5
PART III
10. Directors and Executive Officers of the Registrant 6
11. Executive Compensation 11
12. Security Ownership of Certain Beneficial Owners and
Management 17
13. Certain Relationships and Related Transactions 18
PART IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K 19
PART I
Item 1. Business
GTE South Incorporated (the Company), was incorporated in Virginia on July 29,
1947. The Company is a wholly-owned subsidiary of GTE Corporation (GTE) and
currently provides communications services in the states of Alabama, Illinois,
Kentucky, North Carolina, South Carolina and Virginia. Prior to the sale of
properties described below, the Company provided communications services in
Georgia, Tennessee and West Virginia.
On November 1, 1993, the Company in a series of transactions exchanged its
telephone plant in service, materials and supplies and customers (representing
244,000 access lines) in the state of Georgia for similar assets (including
38,000 access lines) in ALLTEL Corporation's (ALLTEL) Illinois operations and
$446 million in cash.
On December 31, 1993, the Company sold its telephone plant in service, materials
and supplies and customers (representing 123,000 access lines) in the states of
West Virginia and Tennessee to Citizens Utilities Company for $291 million in
cash.
The Company provides local telephone service within its franchise areas and
intraLATA (Local Access Transport Area) long distance service between the
Company's facilities and the facilities of other telephone companies within the
Company's LATAs. InterLATA service to other points in and out of the states in
which the Company operates is provided through connection with interexchange
(long distance) common carriers. These common carriers are charged fees (access
charges) for interconnection to the Company's local facilities. End user
business and residential customers are also charged access charges for access to
the facilities of the long distance carriers. The Company also earns other
revenues by leasing interexchange plant facilities and providing such services
as billing and collection and operator services to interexchange carriers,
primarily the American Telephone and Telegraph Company (AT&T). The number of
access lines served was 1,051,872 on January 1, 1989 and 968,951 December 31,
1993.
The following table denotes the access lines in the states in which the Company
operates as of December 31, 1993:
Access
State Lines Served
--------------- ------------
Kentucky 384,450
North Carolina 214,211
South Carolina 155,686
Alabama 143,542
Illinois 38,214
Virginia 32,848
------------
Total 968,951
============
The Company's principal line of business is providing telecommunication
services. These services fall into five major classes: local network, network
access, long distance, equipment sales and services and other. Revenues from
each of these classes over the last three years are as follows:
Years Ended December 31
---------------------------------------
1993 1992 1991
-------- -------- ---------
(Thousands of Dollars)
Local Network Services $ 379,533 $ 371,535 $ 359,419
% of Total Revenues 40% 38% 37%
Network Access Services $ 395,480 $ 412,604 $ 340,539
% of Total Revenues 41% 42% 36%
Long Distance Services $ 28,783 $ 47,947 $ 138,249
% of Total Revenues 3% 5% 14%
Equipment Sales and Services $ 75,141 $ 79,431 $ 79,857
% of Total Revenues 8% 8% 8%
Other $ 74,360 $ 63,451 $ 45,359
% of Total Revenues 8% 7% 5%
At December 31, 1993, the Company had 4,729 employees. The Company has written
agreements with the Communications Workers of America (CWA) and International
Brotherhood of Electrical Workers (IBEW) covering approximately 3,200 of the
Company's employees. In 1993, agreements were reached on four contracts with
the CWA and two contracts with the IBEW. During 1994, three contracts with CWA
and two contracts with IBEW will expire.
Telephone Competition
The Company holds franchises, licenses and permits adequate for the conduct of
its business in the territories which it serves.
The Company is subject to regulation by the regulatory bodies of the states of
Alabama, Illinois, Kentucky, North Carolina, South Carolina and Virginia as to
its current intrastate business operations and by the Federal Communications
Commission (FCC) as to its interstate business operations. Prior to the sale of
properties described above, the state regulatory commissions in Georgia,
Tennessee and West Virginia also regulated the Company's intrastate operations.
Information regarding the Company's activities with the various regulatory
agencies and revenue arrangements with other telephone companies can be found in
Note 11 of the Company's Annual Report to Shareholders for the year ended
December 31, 1993, incorporated herein and filed as Exhibit 13.
The year was marked by important changes in the U.S. telecommunications
industry. Rapid advances in technology, together with government and industry
initiatives to eliminate certain legal and regulatory barriers are accelerating
and expanding the level of competition and opportunities available to the
Company. As a result, the Company faces increasing competition in virtually all
aspects of its business. Specialized communications companies have constructed
new systems in certain markets to bypass the local-exchange network. Additional
competition from interexchange carriers as well as wireless companies continues
to evolve for both intrastate and interstate communications.
During 1994, the Company will begin implementation of a re-engineering plan that
will redesign and streamline processes. Implementation of its re-engineering
plan will allow the Company to continue to respond aggressively to these
competitive and regulatory developments through reduced costs, improved service
quality, competitive prices and new product offerings. Moreover, implementation
of this program will position the Company to accelerate delivery of a full array
of voice, video and data services. The re-engineering program will be
implemented over three years. During the year, the Company continued to
introduce new business and consumer services utilizing advanced technology,
offering new features and pricing options while at the same time reducing costs
and prices.
During 1993, the FCC announced its decision to auction licenses during 1994 in
51 major markets and 492 basic trading areas across the United States to
encourage the development of a new generation of wireless personal
communications services (PCS). These services will both complement and compete
with the Company's traditional wireline services. The Company will be permitted
to fully participate in the license auctions in areas outside of GTE's existing
cellular service areas. Limited participation will be permitted in areas in
which GTE has an existing cellular presence.
In 1992, the FCC issued a "video dialtone" ruling that allows telephone
companies to transmit video signals over their networks. The FCC also
recommended that Congress amend the Cable Act of 1984 to permit telephone
companies to supply video programming in their service areas.
Activity directed toward changing the traditional cost-based rate of return
regulatory framework for intrastate and interstate telephone services has
continued. Various forms of alternative regulation have been adopted, which
provide economic incentives to telephone service providers to improve
productivity and provide the foundation for the pricing flexibility necessary to
address competitive entry into the markets the Company serves.
The GTE Consent Decree, which was issued in connection with the 1983 acquisition
of GTE Sprint (since divested) and GTE Spacenet, prohibits GTE's domestic
telephone operating subsidiaries from providing long distance service beyond the
boundaries of the LATA. This prohibition restricts their direct provision of
long distance service to relatively short distances. The degree of competition
allowed in the intraLATA market is subject to state regulation. However,
regulatory constraints on intraLATA competition are gradually being relaxed. In
fact, some form of intraLATA competition is authorized in many of the states in
which the Company provides service.
In September 1993, the FCC released an order allowing competing carriers to
interconnect to the local-exchange network for the purpose of providing switched
access transport services. This ruling complements similar interconnect
arrangements for private line services ordered during 1992. The order
encourages competition for the transport of telecommunications traffic between
local exchange carriers' (LECs) switching offices and interexchange carrier
locations. In addition, the order allows LECs flexibility in pricing
competitive services.
These and other actions to eliminate the existing legal and regulatory barriers,
together with rapid advances in technology, are facilitating a convergence of
the computer, media and telecommunications industries. In addition to allowing
new forms of competition, these developments are also creating new opportunities
to develop interactive communications networks. The Company supports these
initiatives to assure greater competition in telecommunications, provided that
overall the changes allow an opportunity for all service providers to
participate equally in a competitive marketplace under comparable conditions.
Item 2. Properties
The Company's property consists of network facilities (79%), company facilities
(13%), customer premises equipment (1%) and other (7%). From January 1, 1989 to
December 31, 1993, the Company made gross property additions of $1.2 billion and
property retirements of $1.5 billion. Substantially all of the Company's
property is subject to liens securing long-term debt. In the opinion of
management, the Company's telephone plant is substantially in good repair.
Item 3. Legal Proceedings
There are no pending legal proceedings, either for or against the Company, which
would have a material impact on the Company's financial statements.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters
Market information is omitted since the Company's common stock is wholly-owned
by GTE Corporation.
Item 6. Selected Financial Data
Reference is made to the Registrant's Annual Report to Shareholders, page 32,
for the year ended December 31, 1993, incorporated herein and filed as Exhibit
13.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Reference is made to the Registrant's Annual Report to Shareholders, pages 27 to
31, for the year ended December 31, 1993, incorporated herein and filed as
Exhibit 13.
Item 8. Financial Statements and Supplementary Data
Reference is made to the Registrant's Annual Report to Shareholders, pages 5 to
25, for the year ended December 31, 1993, incorporated herein and filed as
Exhibit 13.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The names, ages and positions of all the directors and executive officers of the
Company as of March 7, 1994 are listed below along with their business
experience during the past five years.
a. Identification of Directors
Director
Name Age Since Business Experience
- -------------- --- --------- -------------------------------------------
Earl A. Goode 53 1994 President, GTE South Incorporated and GTE
North Incorporated; various positions with
GTE including President - GTE Southwest
and Vice President - General
Manager/Wisconsin; Director, Legacy Fund;
Director, COMMIT; Executive Committee, GTE
North Classic; Director, Indiana State
Symphony Society; Director, INB Financial
Corporation; Director, United Way of
Central Indiana; Director, Goodwill
Industries of Central Indiana; Director,
Indianapolis Chamber of Commerce;
President's Advisory Council of Purdue
University; Dean's Advisory Council for
the Purdue University Krannert School of
Management.
Kent B. Foster 50 1994 Vice Chairman of the Board of Directors of
GTE Corporation, October 1993. President,
GTE Telephone Operations, 1989; Director,
GTE Corporation, 1992; Director, all GTE
domestic telephone subsidiaries, 1993;
Director, BC Telecom, Inc.; Director,
Compania Anonima Nacional Telefonos de
Venezuela; Director, National Bank of
Texas.
Richard M. Cahill 55 1994 Vice President - General Counsel of GTE
Telephone Operations, 1988; Director, all
GTE domestic telephone subsidiaries, 1993;
Director, GTE Vantage Incorporated, 1991;
Director, GTE Intelligent Network Services
Incorporated, 1993.
Gerald K. Dinsmore 44 1992 Senior Vice President - Finance and
Planning for GTE Telephone Operations,
1994. Vice President - Finance, GTE
Telephone Operations, 1993; Vice President
- Intermediary Customer Markets, GTE
Telephone Operations, 1991. President,
South Area, GTE Telephone Operations,
1992; Director, all GTE domestic telephone
subsidiaries, 1993.
Michael B. Esstman 47 1994 Executive Vice President-Operations, GTE
Telephone Operations, 1993; President,
Central Area, GTE Telephone Operations,
1991. President, Contel Eastern Region,
Telephone Operations Sector, 1983;
Director, AG Communications System;
Director, all GTE domestic telephone
subsidiaries, 1993.
Thomas W. White 47 1994 Executive Vice President of GTE Telephone
Operations, 1993; Senior Vice President -
General Office Staff, GTE Telephone
Operations, 1989; Director, all GTE
domestic telephone subsidiaries, 1993;
Director, Quebec-Telephone.
Directors are elected annually. The term of each director expires on the date
of the next annual meeting of shareholders, which may be held on any day during
May, as specified in the notice of the meeting.
There are no family relationships between any of the directors or executive
officers of the Company.
All of the directors, with the exception of Mr. Dinsmore, were elected January
1, 1994, following the resignations from the Board of John L. Atkins, III,
Archie S. Dargan, K.v.R. Dey, Jr., Durward R. Everett, Jr., Robert H.
Hillenmeyer, John Hopkins, Mary W. Walker, Richard W. Wilkinson and John W.
Woods, III.
b. Identification of Executive Officers
Year Assumed
Current
Name Age Position Position with Company
- ----------------- --- ------------ -------------------------------
Earl A. Goode (1) 53 1994 President
James D. Blanchard (1) 53 1994 Region Vice President -
General Manager-North
(Illinois, Wisconsin)
Clare D. Coxey (1) 55 1994 Area Vice President - Public
Affairs
Margaret B. Haight (1) 45 1994 State Vice President - General
Manager - Kentucky
James T. Jeske (1) 48 1994 Area Vice President - Human
Resources
M. L. Keith, Jr. (1) 51 1994 Area Vice President - Sales
C. Sumpter Logan (2) 56 1994 Region Vice President -
General Manager - South
(Alabama, Kentucky, North
Carolina, South Carolina)
Jeffrey L. Schmitt (1) 48 1994 Area Vice President -
Regulatory and Government
Affairs
Dale E. Sporleder (1) 53 1994 Area Vice President - General
Counsel
Roger L. Utzinger (1) 47 1994 Area Vice President - Finance
Edward J. Weise (3) 49 1994 Region Vice President -
General Manager - South
(Virginia)
William D. Wilson (1) 46 1994 Area Vice President - General
Manager - East
Charles J. Somes (1) 48 1994 Secretary
Position with
GTE Telephone Operations (4)
------------------------------
Kent B. Foster 50 1989 President
Michael B. Esstman (5) 47 1993 Executive Vice President -
Operations
Thomas W. White 47 1989 Executive Vice President
Guillermo Amore 55 1990 Senior Vice President -
International
Gerald K. Dinsmore (6) 44 1993 Senior Vice President -
Finance and Planning
Robert C. Calafell (7) 52 1993 Vice President - Video
Services
A. T. Jones 54 1992 Vice President - International
Brad M. Krall (8) 52 1993 Vice President - Centralized
Services
Donald A. Hayes 56 1992 Vice President - Information
Technology
Richard L. Schaulin 51 1989 Vice President - Human
Resources
Clarence F. Bercher 50 1991 Vice President - Sales
Mark S. Feighner 45 1991 Vice President - Product
Management
Geoff C. Gould 41 1989 Vice President - Regulatory
and Governmental Affairs
G. Bruce Redditt 43 1991 Vice President - Public
Affairs
Richard M. Cahill 55 1989 Vice President and General
Counsel
Leland W. Schmidt 60 1989 Vice President - Industry
Affairs
Paul E. Miner 49 1990 Vice President - Regional
Operations Support
Katherine J. Harless 43 1992 Vice President - Intermediary
Markets
William M. Edwards, III (9) 45 1993 Controller
Each of these executive officers has been an employee of the Company or an
affiliated company for the last five years.
Except for duly elected officers and directors, no other employees had a
significant role in decision making.
All officers are appointed for a term of one year.
- -----------
NOTES:
(1) Effective March 7, 1994 the following individuals became executive
officers for both GTE South Incorporated and GTE North Incorporated:
Earl A. Goode was appointed President replacing Gerald K. Dinsmore who
was appointed Senior Vice President - Finance and Planning for GTE
Telephone Operations.
James D. Blanchard was appointed Region Vice President - General Manager
- North (Illinois, Wisconsin).
Clare D. Coxey was appointed Area Vice President - Public Affairs
replacing Jorge Jackson who was appointed Area Vice President - Public
Affairs - West.
James T. Jeske was appointed Area Vice President - Human Resources
replacing Margaret B. Haight who was appointed State Vice President -
General Manager - Kentucky.
M. L. Keith, Jr. was appointed Area Vice President - Sales replacing
James D. Bennett who was appointed State Vice President - Sales for GTE
Florida Incorporated.
Jeffrey L. Schmitt was appointed Area Vice President - Regulatory and
Government Affairs replacing Bruce M. Holmberg who retired.
Dale E. Sporleder was appointed Area Vice President - General Counsel
replacing James V. Carideo who retired.
Roger L. Utzinger was appointed Area Vice President - Finance replacing
Fassil Gabremariam who was appointed State Vice President - Finance for
GTE Florida Incorporated.
William D. Wilson, previously Vice President - Business Planning for GTE
Telephone Operations, was appointed Area Vice President - General
Manager - East replacing Stephen A. Inkrott who was appointed Assistant
Vice President - Network Planning for GTE Telephone Operations.
Charles J. Somes was appointed Secretary replacing Jerry L. Austin who
retired.
Charles C. Merritt previously Regional Vice President - General
Manager/Southeast was appointed General Manager - North Carolina/South
Carolina.
(2) C. Sumpter Logan, previously Regional Vice President - General
Manager/North, was appointed Region Vice President General Manager -
South (Alabama, Kentucky, North Carolina, South Carolina) effective
March 7, 1994.
(3) Edward J. Weise, previously Regional Vice President - General
Manager/Virginia, was appointed Region Vice President - General Manager
- South (Virginia) effective March 7, 1994.
(4) Position is with, and duties are performed at, the GTE Telephone
Operations Headquarters in Irving, Texas.
(5) Michael B. Esstman was appointed Executive Vice President - Operations
effective April 25, 1993 replacing Charles A. Crain who retired on
April 1, 1993.
(6) Gerald K. Dinsmore, previously South Area President, was appointed
Senior Vice President - Finance and Planning replacing John L. Hume who
retired.
(7) Robert C. Calafell was appointed Vice President - Video Services
effective March 28, 1993.
(8) Brad M. Krall was appointed Vice President - Centralized Services
effective November 7, 1993.
(9) William M. Edwards, III, was appointed Controller effective November 21,
1993 replacing John D. Utzinger.
William E. Starkey retired November 21, 1993, George N. King retired May 21,
1993 and Clark W. Barlow retired August 21, 1993.
Item 11. Executive Compensation
Executive Compensation Tables
The following tables provide information about executive compensation.
SUMMARY COMPENSATION TABLE
The following table sets forth information about the compensation of the Chief
Executive Officer and each of the other four most highly compensated executive
officers of the Company for services in all capacities to the Company and its
subsidiary.
Long-Term Compensation
----------------------------------------------
Annual Compensation(2) Awards Payments
-------------------------------------- ------------------ ------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Annual Reserved LTIP All Other
Name and Principal Compensation Stock Options Payments Compensations
Position in Group(1) Year Salary($)(1) Bonus($) ($) Awards(#) SARs(#) ($) ($)(5)
- ---------------------- ---- ----------- -------- ------------ --------- ------- -------- -------------
Gerald K. Dinsmore 1993 68,286 66,312 39,973 -- 14,500 4,743 1,989
President (3) 1992 22,998 22,128 241 -- 16,200 -- 620
C. Sumpter Logan 1993 116,540 25,721 3,530 -- 2,700 -- 3,496
Regional Vice President 1992 146,517 91,089 12,579 -- -- -- 4,395
General Manager/North 1991 173,033 124,300 18,520 -- 7,900 -- --
Charles C. Merritt 1993 76,753 22,850 2,398 -- 2,700 -- 2,303
Regional Vice President - 1992 96,151 40,443 1,178 -- -- -- --
General Manager/Southeast 1991 119,549 51,900 2,132 -- 3,000 -- --
Stephen A. Inkrott 1993 50,279 23,653 1,747 -- 4,900 -- 1,508
Area Vice President - 1992 52,806 31,579 7,797 -- 5,500 -- 1,584
General Manager (4) 1991 30,551 16,583 8,786 -- 3,300 -- 836
Kent B. Foster 1993 35,136 32,274 1,707 -- 58,800 7,108 395
President 1992 41,280 48,230 808 -- -- 15,014 526
GTE Telephone Operations 1991 36,111 48,813 2,796 -- 133,300 20,368 528
- ----------
(1) Individual was an officer for GTE South Incorporated at December 31,
1993.
(2) Annual Compensation represents the Company's pro rata share of salaries,
bonuses and other annual compensation. Total annual cash compensation
for Messrs. Dinsmore, Logan, Merritt, Inkrott and Foster, for whom
allocated amounts are shown above is $544,684, $248,833, $174,093,
$236,127 and $1,129,356 for 1993, respectively.
(3) Mr. Dinsmore became president in October 1992. Mr. Dinsmore was
appointed Senior Vice President - Finance and Planning for GTE Telephone
Operations effective March 1994. Earl Goode replaced Mr. Dinsmore as
President.
(4) Mr. Inkrott was elected Area Vice President - General Manger in June
1991.
(5) All other compensation includes Company contributions to defined
contribution plans.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table shows all grants of options to the named executive officers
of the Company in 1993. Pursuant to Securities and Exchange Commission (the
SEC) rules, the table also shows the value of the options granted at the end of
the option terms (ten years) if the stock price were to appreciate annually by
5% and 10%, respectively. There is no assurance that the stock price will
appreciate at the rates shown in the table. The table also indicates that if
the stock price does not appreciate, there will be no increase in the potential
realizable value of the options granted.
Potential Realizable Value at
Assumed Annual Rate of Stock
Price Appreciation For
Individual Grants(1) Option Term
-------------------------------------------------- --------------------------------
(a) (b) (c) (d) (e) (f) (g) (h)
Percent of
Total
Options/
SARs Granted Exercise
to All GTE Or Base
Option/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year ($/SH) Date 0% 5% 10%
- ------------------ ----------- ------------ -------- ---------- ---- ---------- ----------
Gerald K. Dinsmore 14,500 0.73% $35.0625 2/15/03 $0 $ 319,734 $ 810,269
C. Sumpter Logan 2,700 0.14 35.0625 2/15/03 0 59,537 150,878
Charles C. Merritt 2,700 0.14 35.0625 2/15/03 0 59,537 150,878
Stephen A. Inkrott 4,900 0.25 35.0625 2/15/03 0 108,048 273,815
Kent B. Foster 48,400 2.42 35.0625 2/15/03 0 1,067,249 2,704,621
10,400 0.52 37.6250 10/12/03 0 246,087 623,632
- ----------
(1) Under the Long-Term Incentive Plan, options are presently granted with
tandem stock appreciation rights ("SARs"). One-third of these grants vest
annually commencing one year after the date of grant.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
The following table provides information as to options and stock appreciation
rights exercised by each of the named executive officers of the Company during
1993 and the value of options and stock appreciation rights held by such
officers at year-end measured in terms of the closing price of GTE Common Stock
on December 31, 1993.
(a) (b) (c) (d) (e)
Value of Unexercised
Shares Number of Unexercised In-the-Money Options/SARs
Acquired Value Options/SARs at YE-End At FY-End($)
Name On Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------ -------------- ----------- ----------- ------------- ----------- -------------
Gerald K. Dinsmore 0 $ 0 9,732 27,468 $ 24,328 $ 27,947
C. Sumpter Logan 0 0 15,066 5,334 129,485 8,396
Charles C. Merritt 0 0 6,400 3,700 58,975 3,188
Stephen A. Inkrott 0 0 9,788 10,334 85,426 15,403
Kent B. Foster 70,517 1,447,800 99,450 125,450 341,551 212,447
Long-Term Incentive Plan - Awards in Last Fiscal Year
The GTE Long-Term Incentive Plan (LTIP) provides for awards, currently in the
form of stock options with tandem stock appreciation rights and cash bonuses,
to participating employees. The stock options and stock appreciation rights
awarded under the LTIP to the five most highly compensated individuals in 1993
are shown in the table on page 11.
Under the LTIP, performance bonuses are paid in cash based on the achievement
of pre-established goals for GTE's return on equity (ROE) over a three-year
award cycle. Performance bonuses are denominated in units of GTE Common Stock
("Common Stock Units") and are maintained in a Common Stock Unit Account.
At the time performance targets are established for the three-year cycle, a
Common Stock Unit Account is set up for each participant who is eligible to
receive a cash award under the LTIP. An initial dollar amount for each account
is determined based on the competitive performance bonus grant practices of
other major companies in the telecommunications industry and with other
selected corporations that are comparable to GTE in terms of revenue, market
value and other quantitative measures. That amount is then divided by the
average market price of GTE Common Stock for the calendar week preceding the
day the account is established to determine the number of Common Stock Units in
the account. The value of the account increases or decreases based on the
market price of the GTE Common Stock. An amount equal to the dividends
declared on an equivalent number of shares of GTE Common Stock is added each
time a dividend is paid. This amount is then converted into the number of
Common Stock Units obtained by dividing the amount of the dividend by the
average price of the GTE Common Stock on the composite tape of the New York
Stock Exchange on the dividend payment date and added to the Common Stock Unit
Account. Messrs. Dinsmore and Foster are the only individuals of the five most
highly compensated individuals eligible to receive a cash award under the LTIP.
The number of Common Stock Units initially allocated in 1993 to their accounts
and estimated future payouts under the LTIP are shown in the following table.
Estimated Future Payouts
Under Non-Stock Price Based Plans(1)
--------------------------------------
(a) (b) (c) (d) (e) (f)
Performance
Number of Or Other
Shares, Units Period Until
Or Other Maturation
Name Rights Or Payout Threshold(2) Target(3) Maximum(5)
- ------------------ ------------- ------------ ------------ --------- ----------
Gerald K. Dinsmore 2,000 3 Years 468 2,341
C. Sumpter Logan 0 N/A 0 0
Charles C. Merritt 0 N/A 0 0
Stephen A. Inkrott 0 N/A 0 0
Kent B. Foster (4) 6,100 3 Years 1,428 7,139
670 2 Years 149 743
326 1 Year 69 343
1,620 26 Months 365 1,827
854 14 Months 183 913
119 2 Months 24 121
- ----------
(1) It is not possible to predict future dividends and, accordingly,
estimated Common Stock Unit accruals in this table are calculated for
illustrative purposes only and are based upon the dividend rate and
price of GTE Common Stock at the close of business on December 31, 1993.
The target award is the dollar amount derived by multiplying the Common
Stock Unit balance at the end of the award cycle by the price of GTE
Common Stock.
(2) The level of average ROE during the cycle which represents minimum
acceptable performance and which, if attained, results in payment of 20%
of the target award. Below the minimum acceptable performance level, no
award is earned.
(3) The average ROE target during the cycle which represents outstanding GTE
performance and which, if attained, results in payment of 100% of the
target award.
(4) The award of 6,100 units to Mr. Foster represents the grant for the 1993-
95 performance period made while he was President - GTE Telephone
Operations. The other grants shown are incremental, prorated awards
made when his position was reclassified and when he was promoted to Vice
Chairman - GTE Corporation, as well as President - GTE Telephone
Operations and apply to the original targets under the 1993-95, 1992-94
and 1991-93 performance periods.
(5) This column has intentionally been left blank because it is not possible
to determine the maximum award until the award cycle has been completed.
The maximum amount of the award is limited by the amount the actual ROE
exceeds the targeted ROE. If GTE's average ROE during the cycle exceeds
the performance target, additional bonuses may be earned according to
the following schedule:
Performance Increment Above Added Percentage
Maximum ROE Performance Target to Maximum Awards
---------------------------------------------------------------
First and Second 0.1% +2%
Third and Fourth 0.1% +3%
Fifth and above 0.1% +4%
For example, if average ROE performance exceeds the ROE target by 0.5%, the
performance bonus will equal 114% of the target award.
Executive Agreements
GTE has entered into agreements (the Agreements) with Messrs. Dinsmore and
Foster regarding benefits to be paid in the event of a change in control of GTE
(a "Change in Control").
A Change in Control is deemed to have occurred if a majority of the members of
the Board do not consist of members of the incumbent Board (as defined in the
Agreements) or if, in any 12-month period, three or more directors are elected
without the approval of the incumbent Board. An individual whose initial
assumption of office occurred pursuant to an agreement to avoid or settle a
proxy or other election contest is not considered a member of the incumbent
Board. In addition, a director who is elected pursuant to such a settlement
agreement will not be deemed a director who is elected or nominated by the
incumbent Board for purposes of determining whether a Change in Control has
occurred. A Change in Control will not occur in the following situations: (1)
certain merger transactions in which there is at least 50% GTE shareholder
continuity in the surviving corporation, at least a majority of the members of
the board of directors of the surviving corporation consists of members of the
Board of GTE and no person owns more than 20% (or under certain circumstances,
a lower percentage, not less than 10%) of the voting power of the surviving
corporation following the transaction, and (2) transactions in which GTE's
securities are acquired directly from GTE.
The Agreements provide for benefits to be paid in the event this individual
separates from service and has a "good reason" for leaving or is terminated
without "cause" within two years after a Change in Control of GTE.
Good reason for leaving includes but is not limited to the following events:
demotion, relocation or a reduction in total compensation or benefits, or the
new entity's failure to expressly assume obligations under the Agreements.
Termination for cause includes certain unlawful acts on the part of the
executive or a material violation of his or her responsibilities to the
Corporation resulting in material injury to the Corporation.
An executive who experiences a qualifying separation from service will be
entitled to receive up to two times the sum of (i) base salary and (ii) the
average of his or her other percentage awards under the EIP for the previous
three years. The executive will also continue to receive medical and life
insurance coverage for up to two years and will be provided with financial and
outplacement counseling.
In addition, the Agreements with Messrs. Dinsmore and Foster provide that in
the event of a separation from service, they will receive service credit in the
following amounts: two times years of service otherwise credited if the
executive has five or fewer years of credited service; 10 years if credited
service is more than five and not more than 10 years; and, if the executive's
credited service exceeds 10 years, the actual number of credited years of
service. These additional years of service will apply towards vesting,
retirement eligibility, benefit accrual and all other purposes under the
Supplemental Executive Retirement Plan and the Executive Retired Life Insurance
Plan. In addition, each executive will be considered to have not less than 76
points and 15 years of accredited service for the purpose of determining his or
her eligibility for early retirement benefits. However, there will be no
duplication of benefits.
The Agreements remain in effect until the earlier of July 1 of each successive
year or the date on which the executive reaches age 65, unless the Agreement is
terminated earlier pursuant to its terms. The Agreements will be automatically
renewed on each successive July 1 unless, not later than December 31 of the
preceding year, one of the parties notifies the other that he does not wish to
extend the Agreement. If a Change in Control occurs, the Agreements will
remain in effect until the obligations of GTE (or its successor) under the
Agreements have been satisfied.
Retirement Programs
Pension Plans
The estimated annual benefits payable, calculated on a single life annuity
basis, under GTE's defined benefit pension plans at normal retirement at age
65, based upon final average earnings and years of employment, are illustrated
in the table below:
PENSION PLAN TABLE
Years of Service
Final Average ------------------------------------------------------------
Earnings 15 20 25 30 35
- -----------------------------------------------------------------------------
$ 150,000 $ 31,604 $ 42,138 $ 52,672 $ 63,207 $ 73,742
200,000 42,479 56,638 70,797 84,957 99,117
300,000 64,229 85,638 107,048 128,457 149,867
400,000 85,979 114,638 143,298 172,957 200,617
500,000 107,729 143,638 179,548 215,457 251,367
600,000 129,479 172,638 215,798 258,957 302,117
700,000 151,229 201,638 252,048 302,457 352,867
800,000 172,979 230,638 288,298 345,957 403,617
900,000 194,729 259,638 324,548 389,457 454,367
1,000,000 216,479 288,638 360,798 432,957 505,117
1,200,000 259,979 346,638 433,298 519,957 606,617
GTE Service Corporation, a wholly-owned subsidiary of GTE, maintains a
noncontributory pension plan for the benefit of GTE employees based on years of
service. Pension benefits to be paid from this plan and contributions to this
plan are related to basic salary exclusive of overtime, differentials,
incentive compensation (except as otherwise described) and other similar types
of payment. Under this plan, pensions are computed on a two-rate formula basis
of 1.15% and 1.45% for each year of service, with the 1.15% service credit
being applied to that portion of the average annual salary for the five highest
consecutive years that does not exceed the Social Security Integration Level
(the portion of salary subject to the Federal Security Act), and the 1.45%
service credit being applied to that portion of the average annual salary that
exceeds said level. As of March 7, 1993, the credited years of service under
the plan for Messrs. Dinsmore, Logan, Merritt, Inkrott and Foster are 18, 33,
30, 28 and 23, respectively.
Under Federal law, an employee's benefits under a qualified pension plan such
as the GTE Service Corporation plan are limited to certain maximum amounts.
GTE maintains a Supplemental Executive Retirement Plan (SERP), which
supplements the benefits of any participant in the qualified pension plan by
direct payment of a lump sum or by an annuity, on an unfunded basis, of the
amount by which any participant's benefits under the GTE Service Corporation
pension plan are limited by law. In addition, the SERP includes a provision
permitting the payment of additional retirement benefits determined in a
similar manner as under the qualified pension plan on remuneration accrued
under management incentive plans as determined by the Executive Compensation
and Organizational Structure Committee.
Executive Retired Life Insurance Plan
The Executive Retired Life Insurance Plan (ERLIP) provides Messrs. Dinsmore,
Logan, Merritt, Inkrott and Foster a maximum postretirement life insurance
benefit of three times final base salary. Upon retirement, ERLIP benefits may
be paid as life insurance or optionally, an equivalent amount may be paid as a
lump sum payment equal to the present value of the life insurance amount (based
on actuarial factors and the interest rate then in effect), as an annuity or as
installment payments. If an optional payment method is selected, the ERLIP
benefit will be based on the actuarial equivalent of the present value of the
insurance amount.
Directors' Compensation
The current directors, all of whom are employees of GTE, are not paid any fees
or renumeration, as such, for services on the Board.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners as of February 28, 1994:
Name and Shares of
Title Address of Beneficial Percent
of Class Beneficial Owner Ownership of Class
--------------- ------------------ ----------- --------
Common Stock of GTE Corporation 18,936,000 100%
GTE South One Stamford Forum shares of
Incorporated Stamford, record
Connecticut 06904
(b) Security Ownership of Management as of December 31, 1993:
Common Stock of Name of Director or Nominee No director
GTE Corporation Kent B. Foster 168,299 or nominee or
Thomas W. White 83,071 executive
Michael B. Esstman 54,051 officer owns
Gerald K. Dinsmore 18,503 as much as
Richard M. Cahill 37,188 1/10 of
------- 1 percent
361,112
=======
Executive Officers(1)(2)
Gerald K. Dinsmore 18,503
C. Sumpter Logan 33,072
Charles C. Merritt 8,032
Stephen A. Inkrott 21,102
Kent B. Foster 168,299
-------
249,008
=======
All directors and executive Represents
officers as a group(1)(2) 782,371 less than 1/10
======= of 1 percent
of outstanding
common stock.
- ----------
(1) Includes shares acquired through participation in GTE's
Consolidated Employee Stock Ownership Plan and/or the GTE Savings
Plan.
(2) Included in the number of shares beneficially owned by Messrs.
Dinsmore, Logan, Merritt, Inkrott and Foster and all directors and
executive officers as a group are 16,798; 15,966; 7,300; 13,232;
115,583; and 528,655 shares, respectively, which such persons have
the right to acquire within 60 days pursuant to stock options.
(c) There were no changes in control of the Company during 1993.
Item 13. Certain Relationships and Related Transactions
The Company`s executive officers or directors were not materially indebted to
the Company or involved in any material transaction in which they had a direct
or indirect material interest.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements - Reference is made to the Registrant's Annual
Report to Shareholders, pages 5 - 25 for the year ended December
31, 1993, incorporated herein and filed as Exhibit 13.
Report of Independent Public Accountants.
Balance Sheets - December 31, 1993 and 1992.
Statements of Income for the years ended December 31, 1993-1991.
Statements of Reinvested Earnings for the years ended December 31,
1993-1991.
Statements of Cash Flows for the years ended December 31,
1993-1991.
Notes to Financial Statements.
(2) Financial Statement Schedules - Included in Part IV of this report
for the years ended December 31, 1993-1991:
Page(s)
-------
Report of Independent Public Accountants 21
Schedules:
V - Property, Plant and Equipment 22-24
VI - Accumulated Depreciation and Amortization of
Property, Plant and Equipment 25
VIII - Valuation and Qualifying Accounts 26
X - Supplementary Income Statement Information 27
Note: Schedules other than those listed above are omitted as not applicable,
not required, or the information is included in the financial
statements or notes thereto.
(3) Exhibits - Included in this report or incorporated by reference.
3-1* Restated Articles of Incorporation dated August 24,
1990.(Exhibit 3-1 of the 1989 Form 10-K, File No. 2-36292).
3-2* Amended By-Laws, effective January 1, 1988, File No. 2-36292.
4-1* Indenture of Mortgage and Deed of Trust dated November 1,
1947, as supplemented by the Thirty-First Supplemental
Indenture dated September 15, 1989, File No. 33-17141 and the
Thirty-Second Supplemental Indenture dated June 15, 1990, File
No. 33-35027.
4-2* Indenture dated as of October 1, 1992 between GTE South
Incorporated and Chemical Bank Trustee as supplemented by the
First Supplemental Indenture dated as of November 15, 1992,
File No. 33-53348.
10* Salary Continuation Arrangements in the Event of a Change in
Control, File No. 2-36292.
13 Annual Report to Shareholders for the year ended December 31,
1993, filed herein as Exhibit 13.
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
fourth quarter of 1993.
* Denotes exhibits incorporated herein by reference to previous filings
with the Securities and Exchange Commission as designated.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To GTE South Incorporated:
We have audited in accordance with generally accepted auditing standards, the
financial statements included in GTE South Incorporated's annual report to
shareholders incorporated by reference in this Form 10-K, and have issued our
report thereon dated January 28, 1994. Our report on the financial statements
includes an explanatory paragraph with respect to the change in the method of
accounting for income taxes in 1992 as discussed in Note 1 to the financial
statements. Our audit was made for the purpose of forming an opinion on those
statements taken as a whole. The schedules listed under Item 14 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 part
of the basic financial statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
ARTHUR ANDERSEN & CO.
Dallas, Texas
January 28, 1994.
GTE SOUTH INCORPORATED
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- --------------------------------------- ---------- --------- ----------- ------------ ----------
Balance at Additions Retirements Other Debits Balance at
Beginning at Cost or Sales or (Credits) Close of
Classification of Year (Note 1) (Note 2) (Note 3) Year
- -----------------------------------------------------------------------------------------------------------------
TELEPHONE PLANT, stated at original cost:
Land $ 15,296 $ 57 $ 1,661 $ (607) $ 13,085
Buildings 187,545 6,482 55,025 9,172 148,174
Central office equipment 1,125,944 108,340 390,925 25,560 868,919
Station apparatus 45,468 2,458 15,311 (1,076) 31,539
Cable/underground conduit, etc. 1,352,223 86,173 479,077 35,172 994,491
Furniture and office equipment 126,948 7,096 45,072 4,097 93,069
Vehicles and other work equipment 77,379 5,815 33,918 7,846 57,122
Telephone plant under construction 46,457 (3,271) -- -- 43,186
Property held for future telephone use -- -- -- 67 67
Telephone plant acquisition adjustment -- -- -- 28,930 28,930
---------- ---------- ---------- ---------- ----------
Total Telephone Plant 2,977,260 213,150 1,020,989 109,161 2,278,582
NONREGULATED PLANT 124,792 5,969 36,625 (3,317) 90,819
---------- ---------- ---------- ---------- ----------
Total Property, Plant and Equipment $3,102,052 $ 219,119 $1,057,614 $ 105,844 $2,369,401
========== ========== ========== ========== ==========
- -------------------------------------------
NOTES:
(1) Reconciliation of additions at cost:
Additions at cost per Schedule V $ 219,119
Acquisition of assets in Illinois (42,919)
Other (481)
----------
Total $ 175,719
==========
(2) All retirements or sales in Column D were charged to
accumulated depreciation (Schedule VI, Note 2), including
costs associated with the disposition of Georgia, Tennessee
and West Virginia.
(3) Primarily represents costs associated with the disposition of
Georgia, Tennessee and West Virginia, adjustments to the reserve
in 1993 due to the adoption of SFAS No. 109 and
transfers in accordance with FCC Docket No. 86-111.
GTE SOUTH INCORPORATED
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
---------- ---------- ----------- ------------- ----------
Balance at Retirements Other Debits Balance at
Beginning Additions or Sales or (Credits) Close of
Classification of Year at Cost (Note 1) (Note 2) Year
- ------------------------------------------------------------------------------------------------------------------
TELEPHONE PLANT, stated at original cost:
Land $ 14,433 $ 1,334 $ -- $ (471) $ 15,296
Buildings 181,213 9,480 2,336 (812) 187,545
Central office equipment 1,029,189 153,606 66,847 9,996 1,125,944
Station apparatus 43,775 2,231 924 386 45,468
Cable/underground conduit, etc. 1,271,487 129,598 59,654 10,792 1,352,223
Furniture and office equipment 125,063 11,119 854 (8,380) 126,948
Vehicles and other work equipment 76,095 9,135 6,857 (994) 77,379
Telephone plant under construction 130,662 (80,552) -- (3,653) 46,457
Property held for future telephone use 247 (257) -- 10 --
Telephone plant acquisition adjustment -- (37) -- 37 --
---------- ---------- ---------- ---------- ----------
Total Telephone Plant 2,872,164 235,657 137,472 6,911 2,977,260
NONREGULATED PLANT 106,524 5,085 2,782 15,965 124,792
---------- ---------- ---------- ---------- ----------
Total Property, Plant and Equipment $2,978,688 $ 240,742 $ 140,254 $ 22,876 $3,102,052
========== ========== ========== ========== ===========
- -----------------------------------------
NOTES:
(1) All retirements or sales in Column D were charged to accumulated
depreciation (Schedule VI, Note 2).
(2) Represents adjustments in 1992 due to adoption of SFAS No. 109 and
transfers in accordance with FCC Docket No. 86-111.
GTE SOUTH INCORPORATED
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- ---------------------------------------- ---------- ---------- ----------- ----------- -----------
Balance at Retirements Other Debits Balance at
Beginning Additions or Sales or (Credits) Close of
Classification of Year at Cost (Note 1) (Note 2) Year
- ---------------------------------------------------------------------------------------------------------------------
TELEPHONE PLANT, stated at original cost:
Land $ 15,888 $ 213 $ -- $ (1,668) $ 14,433
Buildings 185,773 8,986 1,273 (12,273) 181,213
Central office equipment 998,877 97,199 66,887 -- 1,029,189
Station apparatus 42,498 1,420 143 -- 43,775
Cable/underground conduit, etc. 1,258,674 65,611 52,798 -- 1,271,487
Furniture and office equipment 106,583 11,672 250 7,058 125,063
Vehicles and other work equipment 71,950 9,576 7,691 2,260 76,095
Telephone plant under construction 84,357 46,247 -- 58 130,662
Property held for future telephone use 340 -- -- (93) 247
---------- ----------- ---------- ---------- -----------
Total Telephone Plant 2,764,940 240,924 129,042 (4,658) 2,872,164
NONREGULATED PLANT 96,935 6,701 1,770 4,658 106,524
---------- ---------- ---------- ---------- ----------
Total Property, Plant and Equipment $2,861,875 $ 247,625 $ 130,812 $ -- $2,978,688
========== ========== ========== ========== ==========
- ------------------------------------------
NOTES:
(1) Reconciliation of retirements or sales charged to
accumulated depreciation:
Retirement or sales per Schedule VI, Note 2 $ 130,529
Other 283
----------
Total retirements or sales per Column D above $ 130,812
==========
Retirements include write-offs of customer premises
equipment due to deregulation by the FCC.
(2) Primarily represents prior-year adjustments to conform to
the current year presentation and transfers in accordance
with FCC Docket No. 86-111.
GTE SOUTH INCORPORATED
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- --------------------------------- ------------ --------- ----------- ---------- -----------
Additions
Balance at Charged to Retirements Other Balance at
Beginning of Income or Sales Charges Close of
Description Year (Note 1) (Note 2) (Note 3) Year
- ----------------------------------------------------------------------------------------------------------------
Accumulated depreciation and
amortization for the year ended:
December 31, 1993 $1,057,456 $ 208,153 $1,054,277 $ 663,232 $ 874,564
========== ========== ========== ========== ==========
December 31, 1992 $ 985,172 $ 205,670 $ 140,191 $ 6,805 $1,057,456
========== ========== ========== ========== ==========
December 31, 1991 $ 916,224 $ 203,150 $ 130,529 $ (3,673) $ 985,172
========== ========== ========== ========== ==========
- -----------------------------------
NOTES:
(1) Reference is made to Note 1 of Notes to Financial
Statements with respect to depreciation policy: 1993 1992 1991
---------- ---------- ----------
Total as shown in Statements of Income $ 207,324 $ 206,905 $ 203,108
Other 829 (1,235) 42
---------- ---------- ----------
Total as shown above $ 208,153 $ 205,670 $ 203,150
========== ========== ==========
(2) Represents: Retirements or sales credited to property,
plant and equipment (Schedule V) $1,057,614 $ 140,254 $ 130,812
Other (3,337) (63) (283)
---------- ---------- ----------
Total as shown above $1,054,277 $ 140,191 $ 130,529
========== ========== ==========
(3) Represents: Salvage (including amounts related to
properties sold in 1993) $ 621,720 $ 7,357 $ 5,268
Removal costs (8,078) (10,118) (10,269)
Other 49,590 9,566 1,328
---------- ---------- ----------
Total as shown above $ 663,232 $ 6,805 $ (3,673)
========== ========== ==========
GTE SOUTH INCORPORATED
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ------------------------------------ ---------- ---------------------- ---------- ----------
Additions
----------------------
Charged Deductions
Balance at Charged to Other from Balance at
Beginning to Accounts Reserves Close of
Description of Year Income (Note 1) (Note 2) Year
- ----------------------------------------------------------------------------------------------------------
Allowance for uncollectible accounts
for the year ended:
December 31, 1993 $ 7,743 $ 18,250 $ 17,497 $ 33,808 $ 9,682
========== ========== ========== ========== ==========
December 31, 1992 $ 2,273 $ 16,165 $ 16,059 $ 26,754 $ 7,743
========== ========== ========== ========== ==========
December 31, 1991 $ 3,948 $ 10,056 $ 10,743 $ 22,474 $ 2,273
========== ========== ========== ========== ==========
- ------------------------------------
NOTES:
(1) Recoveries of previously written off amounts.
(2) Charges for purpose for which reserve was created.
Represents write-offs of receivable accounts.
GTE SOUTH INCORPORATED
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------
Column A Column B
- ------------------ ----------------------------------------
Item Charged to Operating Expenses
- ----------------------------------------------------------------------------
1993 1992 1991
---------- ---------- ----------
Maintenance and repairs $ 149,645 $ 145,448 $ 160,163
========== ========== ==========
Taxes, other than payroll and
income, are as follows:
Real and personal property $ 24,353 $ 23,879 $ 22,870
State gross receipts 4,425 4,240 3,691
Other 3,969 4,167 4,265
Portion of above taxes charged
to plant and other accounts (2,977) (3,258) (2,901)
---------- ---------- ----------
Total $ 29,770 $ 29,028 $ 27,925
========== ========== ==========
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.
GTE SOUTH INCORPORATED
-----------------------------
(Registrant)
Date March 21, 1994 By EARL A. GOODE
--------------------- --------------------------
EARL A. GOODE
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report is signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
EARL A. GOODE President and Director March 21, 1994
- ------------------------ (Principal Executive Officer)
EARL A. GOODE
GERALD K. DINSMORE Senior Vice President - Finance March 21, 1994
- ------------------------ and Planning and Director
GERALD K. DINSMORE (Principal Financial Officer)
WILLIAM M. EDWARDS, III Controller March 21, 1994
- ------------------------ (Principal Accounting Officer)
WILLIAM M. EDWARDS, III
RICHARD M. CAHILL Director March 21, 1994
- ------------------------
RICHARD M. CAHILL
MICHAEL B. ESSTMAN Director March 21, 1994
- ------------------------
MICHAEL B. ESSTMAN
KENT B. FOSTER Director March 21, 1994
- ------------------------
KENT B. FOSTER
THOMAS W. WHITE Director March 21, 1994
- ------------------------
THOMAS W. WHITE