Annual Report (Form 10-K), fiscal year 1994




ITEM 2. PROPERTIES
Tellabs' corporate headquarters is located on 18-1/2 acres of Company-owned land approximately 30 miles west of Chicago in Lisle, Illinois. A 65,000 square foot building at this location houses the Company's headquarters and administrative operations. A 103,000 square foot building at this location, which formerly housed a substantial portion of its manufacturing operations, was renovated for use by the Company's Customer Services and other departments. In addition, a 54,000 square foot building houses the Digital Systems division marketing and engineering operations.
The Company also owns 50 acres of land in Bolingbrook, Illinois (near Lisle) where a new 230,000 square foot manufacturing, engineering and office building was completed and occupied in July 1993. All of the manufacturing operations previously conducted in Lisle were moved to the Bolingbrook facility in addition to the International division, Network Access product's marketing and engineering operations and other administrative operations.
The Company also owns approximately 75 acres of land in Round Rock, Texas, and approximately 2.6 acres of land in Mississauga, Ontario, Canada. The Texas property includes an 84,000-square foot manufacturing facility. The Canadian property includes a 20,000-square foot office/warehousing building. The Company also owns three office/manufacturing facilities in Espoo, Finland. A 62,000-square foot building is used for engineering, marketing, and administrative offices. The second building of approximately 150,000 square feet is used for production and was renovated and expanded during 1994 to its current size. The third is a 35,000 square foot office building which is currently used for engineering offices.
The Company leases additional facilities at the following locations: Mishawaka, Indiana (research); Atlanta, Georgia (sales); White Plains, New York (customer service); Naperville, Illinois (sales); Santa Ana, California (sales); Denver, Colorado (sales); Pulallup, Washington (customer service); Casselberry, Florida (sales); Irving, Texas (sales); Bethesda, Maryland (sales); and Lisle, Illinois (training). Some of the Company's international subsidiaries also lease space for their operations, including a 56,000 square foot sales and production facility in County Clare, Ireland and additional engineering space in Oulu, Finland.
The Company owns substantially all the equipment used in its business. The Company believes that its facilities are adequate for the level of production anticipated in 1995, and that suitable additional space and equipment will be available to accommodate expansion as needed.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
The Company is not involved in any material litigation.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
NAMES AND BUSINESS EXPERIENCE YEAR OF CURRENT BIRTH POSITION
Michael J. Birck 1938 President, Chief President, Chief Executive Officer Executive Officer and and Director since 1975. Director
Peter A. Guglielmi President, Tellabs International, 1942 President, Tellabs Inc. and Director since 1993; International, Inc., Executive Vice President, Chief Executive Vice President, Financial Officer and Treasurer Chief Financial Officer, since 1990; Secretary 1988 to 1993. Treasurer and Director
Brian J. Jackman 1941 President, Tellabs President, Tellabs Operations, Inc. Operations, Inc, and Director since 1993; Executive Executive Vice President Vice President, since 1990. and Director
Charles C. Cooney 1941 Vice President, Sales and Vice President, Sales and Service, Service, Tellabs Operations, Tellabs Operations, Inc. since 1993; Inc. Vice President, Sales, 1979 to 1993.
Carol Coghlan Gavin 1956 Vice President, General Vice President and General Counsel, Counsel and Secretary, Tellabs Operations, Inc. since Tellabs Operations, Inc., 1992; Secretary since 1993; Secretary Assistant Secretary 1989 to 1993; General Counsel, 1988 to 1992.
Jon C. Grimes 1947 Vice President and General Vice President and General Manager, Manager, Network Access Network Access Systems Division, Systems Division, Tellabs Operations, Inc. since 1993; Tellabs Operations, Inc. Vice President and General Manager, Network Products Division 1989 to 1993.
J. Peter Johnson 1949 Vice President, Finance and Vice President, Finance and Treasury, Treasury, Assistant Secretary Assistant Secretary and Controller, and Controller, Tellabs Tellabs Operations, Inc. since 1992; Operations, Inc. Vice President, Finance and Treasury, Assistant Secretary and Controller, 1990 to 1992; Controller, 1988 to 1990.
John C. Kohler 1952 Vice President, Manufacturing, Vice President, Manufacturing, Tellabs Operations, Inc. Tellabs Operations, Inc. since 1993; Vice President, Product Support Services, 1989 to 1993.
James L. Melsa, Ph.D. 1938 Vice President, Strategic Vice President, Strategic Quality Quality and Process and Process Management, Tellabs Management, Tellabs Operations, Inc. since 1993; Operations, Inc. Vice President and General Manager, Data Communications Division, 1990 to 1993.
Harvey R. Scull 1949 Vice President, Advanced Vice President, Advanced Technology, Technology, Tellabs Tellabs Operations, Inc. since 1993; Operations, Inc. Director, New Business Development, 1989 to 1993.
Richard T. Taylor 1948 Vice President and General Vice President and General Manager, Manager, Digital Systems Digital Systems Division, Tellabs Division, Tellabs Operations, Inc. since 1993; Director Operations, Inc. of Marketing and Product Development, Digital Systems Division, 1989 to 1993.
Jeffrey J. Wake 1949 Vice President and General Vice President and General Manager, Europe, Middle East Manager, Europe, Middle East and Africa, Tellabs and Africa, Tellabs International, International, Inc. Inc. since 1993; Director of International Sales, 1992; Sales Director, Tellabs Pty. Ltd, 1990 to 1992; General Manager, AWA Communications, 1988 to 1990.
Nicholas J. Williams 1947 Vice President and General Vice President and General Manager, The Americas, Manager, The Americas, Tellabs Tellabs International, Inc. International, Inc. since 1993; Vice President and General Manager, Advanced Technology Products, AT&T Paradyne Corporation, 1992 to 1993; Vice President, North American Sales, AT&T Paradyne Corporation, 1989 to 1991.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The sections entitled "Common Stock Market Data" on pages 1 and 46 of the Company's Annual Report to Stockholders for the year ended December 30, 1994 (the "Annual Report") are incorporated herein by reference. They are also included in Exhibit 13, as filed with the SEC. See discussion referred to in Item 7 below for dividend information.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The section entitled "Five-Year Summary of Selected Financial Data" on page 1 of the Annual Report is incorporated herein by reference. It is also included in Exhibit 13, as filed with the SEC.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The section entitled "Management's Discussion and Analysis" on Pages 42 to 44 of the Annual Report is incorporated herein by reference. It is also included in Exhibit 13, as filed with the SEC.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Report of Independent Certified Public Accountants and the Consolidated Financial Statements and Notes thereto on pages 25 through 41 of the Annual Report are incorporated herein by reference. They are also included in Exhibit 13, as filed with the SEC.
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 information required, except for information relating to the executive officers of the registrant which appears at the end of Part I above, is incorporated herein by reference to the section entitled "Election of Directors" in the registrant's Proxy Statement (the "Proxy Statement") dated March 21, 1995.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
The section entitled "Executive Compensation" in the Proxy Statement is incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section entitled "Security Ownership of Management and Certain Other Beneficial Owners" in the Proxy Statement is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The section entitled "Executive Compensation" in the Proxy Statement is incorporated herein by reference.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements:
The following Consolidated Financial Statements of Tellabs, Inc., and Subsidiaries, included in registrant's Annual Report to Stockholders for the year ended December 30, 1994, are incorporated by reference in Item 8:
Report of Independent Certified Public Accountants
Consolidated Balance Sheets: December 30, 1994 and December 31, 1993
Consolidated Statements of Earnings: Years ended December 30, 1994, December 31, 1993 and January 1, 1993
Consolidated Statements of Stockholders' Equity: Years ended December 30, 1994, December 31, 1993, and January 1, 1993
Consolidated Statements of Cash Flows: Years ended December 30, 1994, December 31, 1993 and January 1, 1993
Notes to Consolidated Financial Statements
2. Financial Statement Schedules:
The following Consolidated Financial Statement Schedules of Tellabs, Inc., and Subsidiaries are included herein pursuant to Item 14(d):
Report of Independent Certified Public Accountants on Schedule
Schedule II Valuation and Qualifying Accounts and Reserves
Schedules not included have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto.
(b) The Registrant filed one report on Form 8-K on or about April 26, 1994, as disclosed in the second quarter 10-Q.
(c) Exhibits: 3.1 Restated Certificate of Incorporation 3/ 3.2 Amended and Restated By-Laws, as amended 3/ 4. Upon request of the Securities and Exchange Commission, registrant hereby agrees to furnish to the Commission copies of instruments (not filed) defining the rights of holders of long-term debt of the Company. (This undertaking is in lieu of a separate exhibit.) 10.1 Tellabs, Inc. Deferred Compensation Plan 4/ 10.2 1981 Incentive Stock Option Plan, as amended and restated 1/ 10.3 1984 Incentive Stock Option Plan, as amended and restated 1/ 10.4 1986 Non-Qualified Stock Option Plan, as amended and restated 1/ 10.5 1987 Stock Option Plan for Non-Employee Corporate Directors, as amended and restated 1/ 10.6 1989 Stock Option Plan, as amended and restated 1/ 10.7 Employee Quality Stock Award Program 2/ 10.8 Form of Employment Agreement 3/ 10.9 1991 Stock Option Plan, as amended and restated 1/ 10.10 Description of Split-Dollar Insurance Arrangement with the Michael J. Birck Irrevocable Trust 3/ 10.11 1994 Stock Option Plan 4/ 11. Computation of Per Share Earnings 13. Annual Report to Stockholders 21. Subsidiaries of the Registrant 23. Consent of Independent Certified Public Accountants 27. Financial Data Schedule
Exhibits 10.1 through 10.11 are management contracts or compensatory plans or arrangements required to be filed as an Exhibit to this Form 10-K pursuant to Item 14(c) hereof.
(d) Schedules: See Item 14(a)2 above.
1/ Incorporated by reference from Tellabs, Inc. Post-effective Amendment No. 1 on Form S-8 to Form S-4 filed on or about June 29, 1992 (File No. 33-45788).
2/ Incorporated by reference from Tellabs, Inc. Form 10-Q Quarterly Report for the quarter ended April 1, 1988 (File No. 0-9692).
3/ Incorporated by reference from Tellabs, Inc. Form 10-K Annual Report for the year ended January 1, 1993 (File No. 0-9692).
4/ Incorporated by reference from Tellabs, Inc. Form 10-K Annual Report for the year ended December 31, 1993 (File No. 0-9692).
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.
TELLABS, INC.
March 27, 1995 By /s Michael J. Birck Date
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s Michael J. Birck President and Director March 27, 1995 (Principal Executive Officer)
/s Peter A. Guglielmi Executive Vice President March 27, 1995 (Principal Financial Officer) and Director
/s J. Peter Johnson Controller (Principal March 27, 1995 Accounting Officer)
/s Brian J. Jackman Director March 27, 1995
/s John D. Foulkes Director March 27, 1995
/s Frederick A. Krehbiel Director March 27, 1995
/s Robert P. Reuss Director March 27, 1995
/s William F. Souders Director March 27, 1995
/s Thomas H. Thompson Director March 27, 1995
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON SCHEDULES
Board of Directors Tellabs, Inc.
In connection with our audit of the consolidated financial statements of Tellabs, Inc., and Subsidiaries, referred to in our report dated January 23, 1995, which is included in the annual report to shareholders and incorporated by reference in Part II of this form, we have also audited Schedule II for each of the three years in the period ended December 30, 1994. In our opinion, this schedule presents fairly the information required to be set forth therein.
Grant Thornton LLP
Chicago, Illinois January 23, 1995