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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 period 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
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Commission File Number: 0-1210
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GTE NORTH INCORPORATED
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WISCONSIN 35-1869961
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(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 REGISTERED
- ---------------------------------- ----------------------------------------
NONE
- ---------------------------------- ----------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
$1.15 SERIES CUMULATIVE PREFERRED STOCK-OH NO PAR VALUE
$1.25 SERIES CUMULATIVE PREFERRED STOCK-OH NO PAR VALUE
$2.00 SERIES CUMULATIVE PREFERRED STOCK-IN NO PAR VALUE
$2.10 SERIES CUMULATIVE PREFERRED STOCK-PA NO PAR VALUE
$2.20 SERIES CUMULATIVE PREFERRED STOCK-OH NO PAR VALUE
$2.25 SERIES CUMULATIVE PREFERRED STOCK-PA NO PAR VALUE
$2.30 SERIES CUMULATIVE PREFERRED STOCK-IL NO PAR VALUE
$2.375 SERIES CUMULATIVE PREFERRED STOCK-IL NO PAR VALUE
$2.40 SERIES CUMULATIVE PREFERRED STOCK-MI $50 PAR VALUE
$2.50 SERIES CUMULATIVE PREFERRED STOCK-IL NO PAR VALUE
$2.50 SERIES CUMULATIVE PREFERRED STOCK-IN NO PAR VALUE
$2.50 SERIES C CUMULATIVE PREFERRED STOCK-IN NO PAR VALUE
$4.50 SERIES CUMULATIVE PREFERRED STOCK-WI $100 PAR VALUE
$5.00 SERIES CUMULATIVE PREFERRED STOCK-WI $100 PAR VALUE
$7.60 SERIES CUMULATIVE PREFERRED STOCK-IN NO PAR VALUE
4.60% SERIES CUMULATIVE PREFERRED STOCK-MI $50 PAR VALUE
5.16% SERIES CUMULATIVE PREFERRED STOCK-MI $50 PAR VALUE
- ------------------------------------------------------------------------------
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. [ ]
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 REQUIREEMENTS FOR THE PAST 90 DAYS.
YES X NO
----- -----
The Company had 978,351 shares of $1,000 stated 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 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 18
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 North Incorporated (the Company) was incorporated in Wisconsin on January
27, 1987 and was the successor to the merger of eight telephone companies into
the Company on March 31, 1987. All of the Common Stock of the Company was
owned by GTE Corporation (GTE). Prior to March 31, 1993, the Company provided
communication services in the states of Ilinois, Indiana, Iowa, Michigan,
Minnesota, Missouri, Nebraska, Ohio, Pennsylvania and Wisconsin. On March 31,
1993, the Company transferred its assets and operations in Iowa, Minnesota,
Missouri and Nebraska to GTE Midwest Incorporated, which is a wholly-owned
subsidiary of GTE (the Midwest Transfer).
Contel North Incorporated was incorporated in Wisconsin on June 22, 1992.
Prior to April 1, 1993, Contel North Incorporated had no business operations
and no material assets. On April 1, 1993, the Company, along with Contel of
Illinois, Inc., Contel of Indiana, Inc. and Contel of Pennsylvania, Inc. (the
Contel Subsidiaries), merged with and into Contel North Incorporated. On April
2, 1993, Contel North Incorporated changed its name to GTE North Incorporated.
The Contel Subsidiaries were wholly-owned subsidiaries of GTE. They
provided communication services in the states of Illinois, Indiana and
Pennsylvania. The Contel Subsidiaries were, individually and in the aggregate,
significantly smaller in terms of operating revenues, net income and total
assets than the Company prior to the Midwest Transfer.
There is no public trading market for the Common Stock of the Company because
all of the Common Stock is owned by GTE, a New York corporation. The Company
has one wholly-owned subsidiary, GTW Telephone Systems Incorporated, which
markets and services telecommunications customer premises equipment.
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 has grown steadily from 3,537,907 on January 1,
1989 to 4,031,547 on 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
------------ -------------
Ohio 763,545
Indiana 838,220
Illinois 787,016
Michigan 605,126
Pennsylvania 598,781
Wisconsin 438,859
------------
Total 4,031,547
============
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 $ 980,039 $ 945,175 $ 916,302
% of Total Revenues 38% 37% 36%
Network Access Services $ 963,918 $ 973,661 $ 966,500
% of Total Revenues 37% 38% 39%
Long Distance Services $ 391,050 $ 332,150 $ 319,674
% of Total Revenues 15% 13% 13%
Equipment Sales and Services $ 106,288 $ 103,607 $ 127,485
% of Total Revenues 4% 4% 5%
Other $ 160,952 $ 205,449 $ 175,026
% of Total Revenues 6% 8% 7%
Telephone Competition
At December 31, 1993, the Company had 17,382 employees. In 1993, agreements
were reached on six contracts with the International Brotherhood of Electrical
Workers (IBEW), two contracts with the Communication Workers of America (CWA)
and one contract with the Bakers, Confectioners and Chocolate Workers (BCT).
During 1994, five contracts with the IBEW and one contract with the CWA will
expire.
The Company holds franchises, licenses and permits adequate for the conduct of
its business in the territory which it serves.
The Company is subject to regulation by the regulatory bodies of the states of
Illinois, Indiana, Michigan, Ohio, Pennsylvania and Wisconsin as to its
intrastate business operations and by the Federal Communications Commission
(FCC) as to its interstate business 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.
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.
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.
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 (81%), company facilities
(13%), customer premises equipment (3%) and other (3%). From January 1, 1989
to December 31, 1993, the Company made gross property additions in the amount
of $2.8 billion and property retirements of $1.7 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 21, 1994, are listed below along with their business
experience during the past five years.
a. Identification of Directors
Director
Name Age Since Business Experience
- --------------- ---- -------- ------------------------------------------
Kent B. Foster 50 1993 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 1993 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 1993 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 1993 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.
Earl A. Goode 53 1991 President, GTE North Incorporated; Various
positions with GTE including President -
GTE Southwest and Vice President - General
Manager/Wisconsin; Director, Legacy Fund,
COMMIT, NBD Financial Corporation, Indiana
State Symphony Society, United Way of
Central Indiana, Goodwill Industries of
Central Indiana, Indianapolis Chamber of
Commerce, Indianapolis Community Hospital
Foundation, Indiana Fiscal Policy
Institute, National Art Museum of Sport,
Corporate Community Council and the
Georgetown College Foundation Board;
Executive Committee, GTE North Classic;
President's Advisory Council, Purdue
University; Dean's Advisory Council,
Purdue University Krannert School of
Management and the State of Indiana
Commission for Higher Education.
Thomas W. White 47 1993 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
March, 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. Goode, were elected December
16, 1993 following the resignations from the Board of Raymond C. Burroughs,
Gilbert L. Homstad, James C. McGill, Don W. Montgomery, James D. Reigle, Ian M.
Rolland, Donald E. Smith and Jane Theuerkauf.
b. Identification of Executive Officers
Year
Assumed
Current
Name Age Position Position with Company
- ------------------------ ---- -------- -------------------------------------
Earl A. Goode (1) 53 1991 President
Clare D. Coxey (1) 55 1986 Area Vice President - Public Affairs
James T. Jeske (1) 48 1991 Area Vice President - Human Resources
M. L. Keith, Jr. (1) 51 1986 Area Vice President - Sales
Jeffrey L. Schmitt (1) 48 1987 Area Vice President - Regulatory and
Government Affairs
Dale E. Sporleder (1) 53 1989 Area Vice President - General Counsel
Roger L. Utzinger (1) 47 1989 Area Vice President - Finance
William D. Wilson (1)(2) 46 1993 Area Vice President - General
Manager - East
James D. Blanchard (1) 53 1982 Regional Vice President - General
Manager - Illinois/Wisconsin
William J. Crowley 54 1991 Regional Vice President - General
Manager - Northeast
William A. Griswold (3) 41 1993 Regional Vice President - General
Manager - Ohio/Pennsylvania
William A. Zielke 47 1991 Regional Vice President - General
Manager - Indiana/Michigan
Larry E. Atwell (4) 46 1994 State Vice President - General
Manager - Michigan
Dennis Blair 37 1991 State Vice President - General
Manager - Wisconsin
Charles V. Monaghan, 56 1994 State Vice President - General
Jr.(4) Manager - Pennsylvania
Charles J. Somes (5) 48 1994 Secretary
Date
Assumed
Current Position with
Name Age Position GTE Telephone Operations (6)
- -------------------------- ---- ------- --------------------------------
Kent B. Foster 50 1989 President
Michael B. Esstman (7) 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 (8) 44 1993 Senior Vice President - Finance and
Planning
Robert C. Calafell (9) 52 1993 Vice President - Video Services
A. T. Jones 54 1992 Vice President - International
Brad M. Krall (10) 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(11) 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 these individuals became executive officers
for both GTE South Incorporated and GTE North Incorporated. M.
Michael Foster was appointed State Vice President - Operations for
GTE Florida Incorporated.
(2) William D. Wilson, previously Vice President - Business Planning for
GTE Telephone Operations, was appointed Area Vice President -
General Manager - East effective September 27, 1993, replacing
Ronald K. Poidevin who retired.
(3) William A. Griswold was appointed Regional Vice President - General
Manager - Ohio/Pennsylvania effective March 18, 1993, replacing
Robert R. Randall who retired.
(4) Larry E. Atwell and Charles V. Monaghan, Jr. were appointed State
Vice President - General Manager - Michigan and State Vice President
- General Manager - Pennsylvania, respectively, effective March 7,
1994.
(5) Charles J. Somes was appointed Secretary to replace Jerry Austin who
retired.
(6) Position is with, and duties are performed at, the GTE Telephone
Operations General Office Headquarters in Irving, Texas.
(7) Michael B. Esstman was appointed Executive Vice President -
Operations effective April 25, 1993 replacing Charles A. Crain who
retired on April 1, 1993.
(8) Gerald K. Dinsmore, previously South Area President, was appointed
Senior Vice President - Finance and Planning effective November 21,
1993, replacing John L. Hume who retired.
(9) Robert C. Calafell was appointed Vice President - Video Services
effective March 28, 1993.
(10) Brad M. Krall was appointed Vice President - Centralized Serices
effective November 7, 1993.
(11) William M. Edwards, III was appointed Controller effective November
7, 1993 replacing John D. Utzinger.
The Federal securities laws require the Company's directors and executive
officers,and persons who own more than 10% of a registered class of the
Company's equity securities, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership
of any equity securities of the Company.
To the Company's knowledge, none of the persons subject to these reporting
requirements filed the required initial statement of beneficial ownership
of securities on a timely basis, but the Company has determined that each
of its current directors and executive officers is in the process of
completing this filing. All of the Company's common stock is owned by GTE
and, to the Company's knowledge, none of such directors or executive
officers currently owns, or has ever owned, any shares of the Company's
registered preferred stock (which is the only registered class of the
Company's equity securities).
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(1) Awards Payments
------------------------------------------- -------------------- --------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
All
Reserved Other
Name and Principal Other Annual Stock Options LTIP Compensa-
Position in Group Year Salary($)(1) Bonus($) Compensation($) Awards(#) SARs(#) Payments($) tions($)(4)
- ----------------------- ------ ----------- -------- --------------- -------- -------- ------------ -----------
Earl A. Goode 1993 252,897 162,378 6,950 -- 14,500 38,747 7,587
President (2) 1992 238,674 224,242 23,523 -- -- 70,980 7,160
1991 191,512 186,754 32,187 -- 31,600 53,913 5,278
Kent B. Foster 1993 122,310 112,348 3,975 -- 58,800 24,743 1,374
President - GTE 1992 110,628 129,242 2,166 -- -- 40,238 1,409
Telephone Operations 1991 88,666 119,853 6,865 -- 133,300 50,010 1,295
M. L. Keith, Jr. 1993 155,301 49,921 1,921 -- 4,000 -- 4,659
Area Vice President- 1992 149,506 67,905 958 -- -- -- 4,485
Sales 1991 155,429 73,200 980 -- 4,300 -- 4,917
James D. Blanchard 1993 151,885 39,600 1,196 -- 2,700 -- 4,557
Regional Vice 1992 145,538 55,100 1,958 -- -- -- 4,366
President-General 1991 133,983 54,900 1,426 -- 3,000 -- 4,274
Manager-IL/WI
William A. Zeilke 1993 137,504 41,200 981 -- 2,700 -- 4,125
Regional Vice 1992 131,306 55,100 12,303 -- -- -- --
President-General 1991 60,418 30,200 23,406 -- -- -- 1,626
Manager-IN/MI (3)
- ----------
(1) Annual Compensation represents the Company's pro rata share of salaries,
bonuses and other annual compensation. Total annual cash compensation for
Messrs. Goode, Foster and Keith, for whom allocated amounts are shown
above, is $468,567, $1,129,356 and $229,878, respectively, for 1993.
(2) Mr. Goode was appointed President effective March 1991.
(3) Mr. Zeilke was appointed Region Vice President - General Manager - Indiana
in June 1991.
(4) All Other Compensation includes Company contributions to defined
contribution plans.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table shows all grants of options to the named executive officers
of the Company in 1993. Pursuant to Securities and Exchange Commission (the
SEC) rules, the table also shows the value of the options granted at the end
of the option terms (ten years) if the stock price were to appreciate
annually by 5% and 10%, respectively. There is no assurance that the stock
price will appreciate at the rates shown in the table. The table also
indicates that if the stock price does not appreciate, there will be no
increase in the potential realizable value of the options granted.
Potential Realizable Value at
Assumed Annual Rate of Stock
Price Appreciation For
Individual Grants(1) Option Term
----------------------------------------------- ---------------------------------
(a) (b) (c) (d) (e) (f) (g) (h)
Percent of
Total Options/
SARs Granted Exercise
to All GTE Or Base
Option/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year ($/SH) Date 0% 5% 10%
- ------------------ ------------ ------------- --------- ---------- ----- ----------- ----------
Earl A. Goode 14,500 0.73% $35.0825 02/15/03 $0 $ 319,734 $ 810,269
Kent B. Foster 48,400 2.42 35.0625 02/15/03 0 1,067,249 2,704,621
10,400 0.52 37.6250 10/12/03 0 246,087 623,632
M. L. Keith, Jr. 4,000 0.20 35.0625 02/15/03 0 88,202 223,522
James D. Blanchard 2,700 0.14 35.0625 02/15/03 0 59,537 150,878
William A. Zeilke 2,700 0.14 35.0625 02/15/03 0 59,537 150,878
- ----------
(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 FY-End At FY-End($)
Name On Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---------------- -------------- ------------ ------------ --------------- ------------- --------------
Earl A. Goode -- -- 44,000 30,300 $ 233,713 $ 50,383
Kent B. Foster 70,517 $1,447,800 99,450 125,450 341,551 212,447
M. L. Keith, Jr. -- -- 4,332 8,368 13,442 13,190
James D. Blanchard -- -- 6,400 3,700 56,975 3,188
William A. Zeilke -- -- 11,896 4,182 177,414 11,100
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 10.
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. Goode 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(4)
- ------------------ ------------- ------------- ------------- ---------- -----------
Earl A. Goode 2,000 3 years 468 2,941
Kent B. Foster (5) 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
M. L. Keith, Jr. 0 N/A 0 0
James D. Blanchard 0 N/A 0 0
William A. Zielke 0 N/A 0 0
- ----------
(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) 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. Goode 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. Goode 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 85,979 114,638 143,298 171,957 200,617
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 21, 1994, the credited years of service under
the plan for Messrs. Goode, Foster, Keith, Blanchard and Zeilke are 31, 23, 27,
31 and 22, 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. Goode,
Foster, Keith, Blanchard and Zeilke 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 remuneration, as such, for service 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 978,351 100%
GTE North One Stamford Forum shares of
Incorporated Stamford, Connecticut record
06904
(b) Security Ownership of Management as of December 31, 1993:
Common Stock of Name of Director or Nominee All less
GTE Corporation ---------------------------- than 1%
Richard M. Cahill 37,188
Gerald K. Dinsmore 18,503
Michael B. Esstman 54,051
Thomas W. White 83,071
Earl A. Goode 56,634
Kent B. Foster 168,299
-------
417,746
=======
Executive Officers(1)(2)
---------------------------
Earl A. Goode 56,634
Kent B. Foster 168,299
M. L. Keith, Jr. 9,904
James D. Blanchard 17,933
William A. Zielke 15,283
-------
268,053
=======
All directors and
executive
officers as a group(1)(2) 824,013
=======
(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.
Goode, Foster, Keith, Blanchard and Zeilke and all directors and
executive officers as a group are 48,833; 115,583; 7,132; 7,300;
14,278 and 559,603 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. None of the Company's directors were involved
in any business relationships with the Company.
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.
Consolidated Balance Sheets - December 31, 1993 and
1992.
Consolidated Statements of Income for the years
ended December 31, 1993-1991.
Consolidated Statements of Reinvested Earnings for
the years ended December 31, 1993-1991.
Consolidated Statements of Cash Flows for the years
ended December 31, 1993-1991.
Notes to Consolidated 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* Bylaws. Articles of Incorporation and amendments are
referenced in the 1986 and 1987 Form 10-K's, respectively.
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 North Incorporated:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in GTE North Incorporated and
subsidiary'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 consolidated 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 consolidated 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 NORTH INCORPORATED AND SUBSIDIARY
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 Retirements Other Balance at
Beginning Additions or Sales Debits or Close of
Classification of Year at Cost (Note 1) (Credits) Year
- --------------------------------------------------------------------------------------------------------
TELEPHONE PLANT -
TANGIBLE PROPERTY, stated
at original cost:
Land $ 30,173 $ 218 $ (82) $ (696) $ 29,777
Buildings 546,333 28,397 16,276 (547) 557,907
Central office equipment 2,982,576 239,975 136,090 (6,500) 3,079,961
Station apparatus 134,652 6,143 2,337 (7,436) 131,022
Station connections 128,906 -- -- -- 128,906
Cable, underground conduit, etc. 3,499,642 217,669 47,115 1,488 3,671,684
Furniture and office equipment 323,200 48,583 76,512 1,937 297,208
Vehicles and other work equipment 227,651 21,198 18,086 8,430 239,193
Telephone plant under 103,863 (6,191) -- -- 97,672
construction
---------- --------- ---------- ---------- ----------
Total Telephone Plant 7,976,996 555,992 296,334 (3,324) 8,233,330
NONREGULATED PLANT 120,147 10,829 18,631 (10,370) 101,975
---------- --------- ---------- ---------- ----------
Total Property, Plant and $8,097,143 $ 566,821 $ 314,965 $(13,694) $8,335,305
Equipment
- ----------
NOTE:
(1) All retirements or sales in Column D were charged to accumulated
depreciation (Schedule VI, Note 2).
GTE NORTH INCORPORATED AND SUBSIDIARY
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
---------------- ------------ ----------- ------------ ---------- ----------
Other
Balance at Retirements Debits or Balance at
Beginning Additions or Sales (Credits) Close of
Classification of Year at Cost (Note 1) (Note 2) Year
- ----------------------------------------------------------------------------------------------------------
TELEPHONE PLANT -
TANGIBLE PROPERTY, stated at
original cost:
Land $ 30,667 $ (305) $ -- $ (189) $ 30,173
Buildings 536,357 19,473 5,907 (3,590) 546,333
Central office equipment 2,781,594 277,584 114,163 37,561 2,982,576
Station apparatus 127,977 6,392 2,190 2,473 134,652
Station connections 134,292 (2) 5,384 -- 128,906
Cable, underground conduit, etc. 3,285,038 229,914 39,382 24,072 3,499,642
Furniture and office equipment 296,489 32,628 3,706 (2,211) 323,200
Vehicles and other work equipment 224,767 18,523 9,876 (5,763) 227,651
Telephone plant under construction 148,206 (44,338) -- (5) 103,863
Property held for future
telephone use 65 (68) -- 3 --
----------- ----------- ---------- ---------- ----------
Total Tangible Property 7,565,452 539,801 180,608 52,351 7,976,996
INTANGIBLES 208 1 216 7 --
----------- ----------- ---------- ---------- ----------
Total Telephone Plant 7,565,660 539,802 180,824 52,358 7,976,996
NONREGULATED PLANT 115,765 12,441 22,875 14,816 120,147
----------- ----------- ---------- ---------- ----------
Total Property, Plant and
Equipment $7,681,425 $ 552,243 $ 203,699 $ 67,174 $8,097,143
========== =========== ========== ========== ==========
- ----------
NOTES:
(1) All retirements or sales in Column D were charged to accumulated
depreciation (Schedule VI, Note 3).
(2) Represents adjustments in 1992 due to the adoption of SFAS No. 109,
prior-year adjustments to conform to the current year presentation
and transfers in accordance with FCC Docket No. 86-111.
GTE NORTH INCORPORATED AND SUBSIDIARY
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 Debits or Balance at
Beginning Additions or Sales (Credits) Close of
Classification of Year at Cost (Note 1) (Note 2) Year
- -----------------------------------------------------------------------------------------------------------------
TELEPHONE PLANT -
TANGIBLE PROPERTY, stated at
original cost:
Land $ 29,759 $ 865 $ (22) $ 21 $ 30,667
Buildings 516,000 24,027 5,321 1,651 536,357
Central office equipment 2,720,471 220,599 156,691 (2,785) 2,781,594
Station apparatus 122,755 6,270 1,048 -- 127,977
Station connections 311,040 -- 176,748 -- 134,292
Private branch exchanges (246) 224 (22) -- --
Cable, underground conduit, etc. 3,104,748 235,273 51,417 (3,566) 3,285,038
Furniture and office equipment 244,506 73,621 19,027 (2,611) 296,489
Vehicles and other work equipment 222,896 22,970 12,520 (8,579) 224,767
Telephone plant under construction 150,579 (2,746) -- 373 148,206
Property held for future
telephone use 9 58 15 13 65
----------- ----------- ---------- ---------- ----------
Total Tangible Property 7,422,517 581,161 422,743 (15,483) 7,565,452
INTANGIBLES 207 -- -- 1 208
----------- ----------- ---------- ---------- ----------
Total Telephone Plant 7,422,724 581,161 422,743 (15,482) 7,565,660
NONREGULATED PLANT 107,943 6,219 7,584 9,187 115,765
----------- ----------- ---------- ---------- ----------
Total Property, Plant and
Equipment $7,530,667 $ 587,380 $ 430,327 $ (6,295) $7,681,425
=========== =========== ========== ========== ==========
- ----------
NOTES:
(1) All retirements or sales in Column D were charged to accumulated
depreciation (Schedule VI, Note 3).
(2) Primarily represents prior-year adjustments to conform to the
current year presentation and transfers in accordance with
FCC Docket No. 86-111.
GTE NORTH INCORPORATED AND SUBSIDIARY
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION 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 Other
Charged to Charges -
Balance Costs and Add Balance at
Beginning Expenses Retirements (Deduct) End of
Description of Period (Note 1) (Note 2) (Note 3) Period
- ----------------------------------------------------------------------------------------
Accumulated
depreciation
and amortization
for the year
ended:
December 31, 1993 $3,461,699 $ 510,553 $ 315,047 $ (2,238) $3,654,967
========== ========== ========== ========== ==========
December 31, 1992 $3,143,428 $ 498,011 $ 203,660 $ 23,920 $3,461,699
========== ========== ========== ========== ==========
December 31, 1991 $3,070,615 $ 497,761 $ 425,491 $ 543 $3,143,428
========== ========== ========== ========== ==========
- ----------
NOTES:
(1) Reference is made to Note 1
of Notes to Consolidated Financial
Statements with respect to
depreciation policy: 1993 1992 1991
---- ---- ----
Total as shown in
Consolidated Statements
of Income $ 501,733 $ 490,624 $ 488,417
General office allocations 8,590 11,106 6,678
Other 230 (3,719) 2,666
---------- ---------- ----------
Total as shown above $ 510,553 $ 498,011 $ 497,761
========== ========== ==========
(2) Represents: Retirements or sales
credited to property,
plant and equipment
(Schedule V) $ 314,966 $ 203,699 $ 430,327
Other 81 (39) (4,836)
---------- ---------- ----------
Total as shown above $ 315,047 $ 203,660 $ 425,491
========== ========== ==========
(3) Represents: Salvage including
properties sold in 1993 $ 22,527 $ 12,070 $ 23,390
Removal costs (22,110) (26,781) (22,706)
Other (2,655) 38,631 (141)
---------- ---------- ----------
Total as shown above $ (2,238) $ 23,920 $ 543
========== ========== ==========
GTE NORTH INCORPORATED AND SUBSIDIARY
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 (Notes 1 & 2) (Notes 1 & 2) Year
- ---------------------------------------------------------------------------------------------------
Allowance for
uncollectible accounts
for the year ended:
December 31, 1993 $14,332 $37,577 $43,926 $70,662 $25,173
======= ======= ======= ======= =======
December 31, 1992 $ 5,370 $31,907 $19,982 $42,927 $14,332
======= ======= ======= ======= =======
December 31, 1991 $ 1,217 $21,535 $18,301 $35,683 $ 5,370
======= ======= ======= ======= =======
- ----------
NOTES:
(1) Prior year data was restated to conform to the 1992 presentation.
(2) Recoveries of previously written-off amounts.
(3) Charges for purpose for which reserve was created. Represents write-offs of
receivable accounts.
GTE NORTH INCORPORATED AND SUBSIDIARY
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 $ 477,224 $459,736 $474,975
=========== ======== ========
Taxes, other than payroll
and income taxes,
are as follows:
Real and personal property $ 70,999 $ 67,718 $ 64,667
State gross receipts 44,496 48,061 40,359
Other 17,803 12,904 16,515
Portion of above taxes charged
to plant and other accounts (9,429) (9,128) (9,819)
----------- -------- --------
Total $ 123,869 $119,555 $111,722
=========== ======== ========
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 NORTH 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