Item 1. Business
GTE Florida Incorporated (the Company) (formerly General Telephone Company of Florida, formerly Peninsular Telephone Company) was incorporated on June 20, 1901, as a corporation for profit pursuant to the general corporation laws of the state of Florida. The Company is a wholly-owned subsidiary of GTE Corporation (GTE).
The Company has a wholly-owned subsidiary, GTE Communications Corporation (GTECC). In 1989, the assets of another subsidiary, GTE Ventures (GTEV), were sold to affiliated companies at net book value. GTECC contains the majority of the Company's nonregulated operations including the provision of terminal equipment to business and residential customers, cellular mobile phones and other nonregulated telecommunication services.
The Company provides local telephone service within its franchise area 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 Florida 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 carrier. 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 1,623,994 on January 1, 1989 to 1,978,220 on December 31, 1993.
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 $ 537,446 $ 498,151 $ 450,489 % of Total Revenues 44% 40% 37%
Network Access Services $ 406,244 $ 425,860 $ 419,628 % of Total Revenues 34% 34% 34%
Long Distance Services $ 74,646 $ 110,101 $ 161,412 % of Total Revenues 6% 9% 13%
Equipment Sales and Services $ 91,536 $ 89,436 $ 92,267 % of Total Revenues 8% 7% 7%
Other $ 101,243 $ 130,993 $ 105,483 % of Total Revenues 8% 10% 9%
At December 31, 1993, the Company had 8,210 employees, both bargaining and non-bargaining unit members. In 1993, an agreement was reached on one contract with the international Brotherhood of Electrical Workers (IBEW). During 1994, there are no contracts which 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 Florida Public Service Commission (FPSC) as to its intrastate business operations and 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 10 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.
In 1993, GTE also continued to make progress in advanced telecommunications technology. In Tampa, Florida, GTE concluded the largest market trial of residential personal communication services (PCS) in the United States. The knowledge and experience gained during this trial will enhance GTE's ability to compete in this emerging market. 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 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. Legislative activity to change the Florida regulatory scheme is expected to evolve within the next year. The Company is continuing to pursue favorable pricing arrangements through the FPSC.
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 Florida.
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.
Item 2. Properties
The Company's property consists of network facilities (82%), company facilities (13%), customer premises equipment (1%) and other (4%). From January 1, 1989 to December 31, 1993, the Company made gross property additions of $1.5 billion and property retirements of $1.3 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.
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.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.
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.
Item 6. Selected Financial Data
Reference is made to the Registrant's Annual Report to Shareholders, page 28, for the year ended December 31, 1993, incorporated herein and filed as Exhibit 13.
Item 7.
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 24 to 27, for the year ended December 31, 1993, incorporated herein and filed as Exhibit 13.
Item 8.
Item 8. Financial Statements and Supplementary Data
Reference is made to the Registrant's Annual Report to Shareholders, pages 5 to 22, for the year ended December 31, 1993, incorporated herein and filed as Exhibit 13.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.
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 - ------------------ --- -------- ----------------------------------------
Peter A. Daks 48 1994 State President - Florida; various positions with GTE including Regional Vice president-General Manager, Florida- GTE South Area; Vice President- Information Management, GTE Telephone Operations; Assistant Vice President- Business Systems Planning at GTE Service Corporation in Stamford, CT; Vice President-Information Management and Information Management; Director-GTE Southeast and Manager-System Development at GTE Products Corporation.
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 Marsha Lewis Brown, Raleigh W. Greene, Mia C. Hardcastle, A. Lamar Matthews Jr., Richard D. Pope, Jr., T. Terrell Sessums, Jan E. Smith and Gus A. Stavros.
b. Identification of Executive Officers
Year Assumed Present Name Age Position Position with Company - ---------------------- --- ------------ ----------------------------
Peter A. Daks (1) 48 1994 President James D. Bennett (2) 48 1994 State Vice President - Sales M. Michael Foster (3) 50 1994 State Vice President - Operations Fassil Gabremariam (4) 49 1994 State Vice President - Finance Donald W. McLeod (5) 53 1994 State Vice President - External Affairs Marceil Morrell (6) 44 1994 State Vice President - General Counsel David H. Richter (7) 44 1994 State Vice President - Human Resources Charles J. Somes (8) 48 1994 Secretary
Position with GTE Telephone Operations (9) ----------------------------- Kent B. Foster 50 1989 President Michael B. Esstman (10) 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 (1) 44 1993 Senior Vice President - Finance and Planning Robert C. Calafell (11) 52 1993 Vice President - Video Services A. T. Jones 54 1992 Vice President - International Brad M. Krall (12) 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 (13) 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) Peter A. Daks, previously Regional Vice President - General Manager/Florida, was appointed President for GTE Florida Inc. replacing Gerald K. Dinsmore who was appointed Senior Vice President - Finance and Planning for GTE Telephone Operations effective March 7, 1994, replacing John L. Hume who retired.
(2) James D. Bennett, previously Area Vice President - Sales, was appointed State Vice President - Sales effective March 7, 1994.
(3) M. Michael Foster, previously Regional Vice President - General Manager - Michigan, was appointed State Vice President - Operations replacing Peter A. Daks who was appointed President.
(4) Fassil Gabremariam, previously Area Vice President - Finance was appointed State Vice President - Finance effective March 7, 1994.
(5) Donald W. McLeod was appointed State Vice President - External Affairs replacing Bruce M. Holmberg who retired and Jorge Jackson who was appointed Area Vice President - Public Affairs - West.
(6) Marceil Morrell was appointed State Vice President - General Counsel replacing James V. Carideo who retired effective March 7, 1994.
(7) David H. Richter was appointed State Vice President - Human Resources replacing Margaret B. Haight who was appointed State Vice President - General Manager - Kentucky for GTE South Incorporated effective March 7, 1994.
(8) Charles J. Somes was appointed Secretary replacing Jerry L. Austin who retired effective March 7, 1994.
(9) Position is with, and duties are performed at, the GTE Telephone Operations Headquarters in Irving, Texas.
(10) Michael B. Esstman was appointed Executive Vice President - Operations effective April 25, 1993 replacing Charles A. Crain who retired on April 1, 1993.
(11) Robert C. Calafell was appointed Vice President - Video Services effective March 28, 1993.
(12) Brad M. Krall was appointed Vice President - Centralized Services effective November 7, 1993.
(13) 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. Stephen A. Inkrott accepted a position with GTE Telephone Operations as Assistant Vice President - Network Planning.
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 South directors or executive officers currently owns, or has ever owned, any shares of the Company's registered preferred stock.
Item 11.
Item 11. Executive Compensation
Executive Compensation Tables
The following tables provide information about executive compensation.
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, Daks 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.
Executive Agreements
GTE has entered into agreements (the Agreements) with Messrs. Dinsmore, Daks 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, Daks 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, Daks, Foster, Inkrott and Gabremariam are 18, 14, 23, 28 and 20, 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, Daks, Foster, Inkrott and Gabremariam 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 of renumeration, as such, for services on the Board.
Item 12.
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 23,400,000 100% GTE Florida One Stamford Forum shares of Incorporated Stamford, Connecticut record
(b) Security Ownership of Management as of December 31, 1993:
Common Stock of Name of Director or Nominee (1) GTE Corporation ------------------------------- No director Kent B. Foster 168,299 or nominee or Thomas W. White 83,071 executive Michael B. Esstman 54,051 officer owns Richard M. Cahill 37,188 as much as Gerald K. Dinsmore 18,503 1/10 of Peter A. Daks 9,606 1 percent ------- 370,718 ======= Executive Officers(1)(2) ------------------------ Gerald K. Dinsmore 18,503 Peter A. Daks 9,606 Kent B. Foster 168,299 Stephen A. Inkrott 21,102 Fassil Gabremariam 15,733 ------- 233,243 =======
All directors and executive Represents officers as a group(1)(2) 743,055 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, Daks, Foster, Inkrott and Gabremariam and all directors and executive officers as a group are 16,798; 5,166; 115,583; 13,232; 6,500; and 509,655 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.
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.
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 - 22, 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.
3-1* Restated Articles of Incorporation dated May 1, 1989 (Exhibit 3-2 of 1989 Form 10-K, File No. 1-3090).
3-2* By-Laws (Exhibit 3-2, File No. 2-52735).
4* Indenture with Index, dated November 1, 1950, between the Company and Chemical Bank and NCNB National Bank of Florida (formerly Exchange Bank and Trust Company of Florida), Trustees, as supplemented by 28 Supplemental Indentures (Exhibits 1 and 2, File No. 1-3090; Exhibit 4(e), File No. 2-10839; Exhibit 4(f), File No. 2-11521; Exhibit 4-18a, File No. 2-13958; Exhibit 4-21, File No. 2-14633; Exhibit 2-3, File No. 2-16152; Exhibits 2-3 and 2-4, File No. 2-23625; Exhibits 2-3 and 2-4, File No. 2-27412; Exhibit 2-3, File No. 2-30311; Exhibit 4-3, File No. 2-39215; Exhibit 2-3, File No. 2-45015; Exhibit 2-3, File No. 2-49304; Exhibit 4-3, File No. 2-51282; Exhibits 4-3 and 4-4, File No. 2-52735; Exhibit 2-3, File No. 2-57428; Exhibits 2-3, 2-4, and 2-5, File No. 2-68285; Exhibit 20 of the 1980 Form 10-K, File No. 1-3090; Exhibit 15, File No. 33-4557; and File No. 33-20998).
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 Florida Incorporated:
We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in GTE Florida 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 FLORIDA 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 $211,504 $188,653 $217,290 ======== ======== ======== Taxes, other than payroll and income taxes,	are as follows: Real and personal property $ 46,402 $ 41,012 $ 46,064 State gross receipts 15,944 15,961 12,793 Other 4,794 4,667 5,807 Portion of above taxes charged to plant and other accounts (3,612) (4,006) (3,494) -------- -------- -------- Total $ 63,528 $ 57,634 $ 61,170 ======== ======== ========
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 FLORIDA INCORPORATED ----------------------------------- (Registrant)
Date March 21, 1994 By PETER A. DAKS -------------------- ------------------------------- PETER A. DAKS 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.
PETER A. DAKS President and Director March 21, 1994 - ----------------------- (Principal Executive Officer) PETER A. DAKS
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