<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
----------------
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-7368
BELL ATLANTIC - WASHINGTON, D.C., INC.
A New York Corporation I.R.S. Employer Identification No. 53-0046277
1710 H Street, N.W., Washington, D.C. 20006
Telephone Number (202) 392-9900
----------------
THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF BELL ATLANTIC CORPORATION, MEETS
THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND
IS THEREFORE FILING THIS FORM WITH REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL
INSTRUCTION H(2).
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
STATEMENTS OF INCOME AND REINVESTED EARNINGS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
--------------------
1994 1993
--------- ---------
<S> <C> <C>
OPERATING REVENUES
Local service.................................. $ 73,140 $ 69,828
Network access................................. 28,147 31,757
Toll service................................... 1,113 970
Directory advertising, billing services
and other (including $13,087 and $15,225
from affiliates).............................. 31,732 32,675
Provision for uncollectibles................... (1,374) (767)
-------- --------
132,758 134,463
-------- --------
OPERATING EXPENSES
Employee costs, including benefits
and taxes..................................... 38,737 39,165
Depreciation and amortization.................. 25,973 27,677
Taxes other than income........................ 11,151 10,069
Other (including $28,343 and $24,103 to
affiliates)................................... 38,477 37,951
-------- --------
114,338 114,862
-------- --------
NET OPERATING REVENUES........................... 18,420 19,601
-------- --------
OPERATING INCOME TAXES
Federal........................................ 3,341 3,334
State.......................................... 1,484 1,687
-------- --------
4,825 5,021
-------- --------
OPERATING INCOME................................. 13,595 14,580
-------- --------
OTHER INCOME (EXPENSE)
Allowance for funds used during
construction.................................. 110 123
Miscellaneous - net............................ (352) (284)
-------- --------
(242) (161)
-------- --------
INTEREST EXPENSE (including $68 and $37 to
affiliate)...................................... 4,693 5,150
-------- --------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE........ 8,660 9,269
EXTRAORDINARY ITEM
Early Extinguishment of Debt,
Net of Tax.................................... --- (4,494)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
Postemployment Benefits, Net of Tax............ --- (4,221)
-------- --------
NET INCOME....................................... $ 8,660 $ 554
======== ========
REINVESTED EARNINGS
At beginning of period......................... $ 33,739 $ 41,340
Add: net income................................ 8,660 554
-------- --------
42,399 41,894
Deduct: dividends.............................. 7,672 6,030
other changes.......................... 70 23
-------- --------
At end of period............................... $ 34,657 $ 35,841
======== ========
</TABLE>
See Notes to Financial Statements.
-1-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)
ASSETS
------
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
---------- ------------
<S> <C> <C>
CURRENT ASSETS
Cash........................................... $ 7,714 $ 36
Note from affiliate............................ 11,354 6,728
Accounts receivable:
Customers and agents, net of allowances for
uncollectibles of $5,613 and $5,705......... 102,980 111,122
Affiliates................................... 19,059 16,639
Other........................................ 20,733 24,376
Material and supplies.......................... 2,293 1,979
Prepaid expenses............................... 9,802 11,476
Deferred income taxes.......................... 3,237 2,818
Other.......................................... 4,961 4,845
---------- ----------
182,133 180,019
---------- ----------
PLANT, PROPERTY AND EQUIPMENT.................... 1,306,892 1,305,203
Less accumulated depreciation.................. 534,907 518,432
---------- ----------
771,985 786,771
---------- ----------
OTHER ASSETS..................................... 32,203 31,163
---------- ----------
TOTAL ASSETS..................................... $ 986,321 $ 997,953
========== ==========
</TABLE>
See Notes to Financial Statements.
-2-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)
LIABILITIES AND SHAREOWNER'S INVESTMENT
---------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
----------- ------------
<S> <C> <C>
CURRENT LIABILITIES
Debt maturing within one year................ $ 962 $ 1,006
Accounts payable:
Parent and affiliates....................... 85,861 82,570
Other....................................... 28,364 45,221
Accrued expenses:
Taxes....................................... 8,404 3,601
Other....................................... 25,813 27,941
Advance billings and customer deposits....... 8,835 8,277
-------- --------
158,239 168,616
-------- --------
LONG-TERM DEBT................................. 243,188 243,367
-------- --------
EMPLOYEE BENEFIT OBLIGATIONS................... 139,007 137,120
-------- --------
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes........................ 77,540 76,360
Unamortized investment tax credits........... 15,683 16,350
Other........................................ 68,039 72,433
-------- --------
161,262 165,143
-------- --------
SHAREOWNER'S INVESTMENT
Common stock, one share, without par value,
owned by parent............................. 249,968 249,968
Reinvested earnings.......................... 34,657 33,739
-------- --------
284,625 283,707
-------- --------
TOTAL LIABILITIES AND SHAREOWNER'S INVESTMENT.. $986,321 $997,953
======== ========
</TABLE>
See Notes to Financial Statements.
-3-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
------------------
1994 1993
-------- --------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES ...... $ 31,337 $ 27,834
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to plant, property and equipment.... (11,500) (16,731)
Net change in note receivable from affiliate.. (4,626) 4,658
Other, net.................................... 440 727
-------- --------
Net cash used in investing activities........... (15,686) (11,346)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings...................... --- 89,348
Principal repayments of capital lease
obligations.................................. (301) (506)
Early extinguishment of debt and related
call premium................................. --- (95,983)
Net change in note payable to affiliate....... --- 223
Dividends paid................................ (7,672) (6,030)
Net change in outstanding checks drawn
on controlled disbursement accounts.......... --- (491)
-------- --------
Net cash used in financing activities........... (7,973) (13,439)
-------- --------
NET CHANGE IN CASH ............................. 7,678 3,049
CASH, BEGINNING OF PERIOD ...................... 36 47
-------- --------
CASH, END OF PERIOD ............................ $ 7,714 $ 3,096
======== ========
</TABLE>
See Notes to Financial Statements.
-4-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) Basis of Presentation
The accompanying financial statements are unaudited and have been
prepared by Bell Atlantic - Washington, D.C., Inc. (formerly The Chesapeake
and Potomac Telephone Company) (the Company) pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). The December 31,
1993 balance sheet was derived from audited financial statements, but does not
include all disclosures required by generally accepted accounting principles.
In the opinion of management, these financial statements include all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the results of operations, financial position and cash flows.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such SEC rules and
regulations. The Company believes that the disclosures made are adequate to
make the information presented not misleading. It is suggested that these
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1993.
(2) Dividend
On May 2, 1994, the Company declared and paid a dividend in the amount of
$8,477,000 to Bell Atlantic Corporation (Bell Atlantic).
(3) Restatement - First Quarter 1993
Results of operations for the three months ended March 31, 1993 were
restated in the fourth quarter of 1993 to reflect the cumulative effect of the
adoption of Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits," effective January 1, 1993.
(4) Regulatory Matters
The communications services of the Company are subject to regulation by the
District of Columbia Public Service Commission (PSC) with respect to intrastate
rates and services and other matters.
In January 1993, the PSC adopted a regulatory reform plan for a three year
trial period, effective April 1, 1993. Under the plan, the PSC adopted a banded
rate of return of 100 basis points over or under the authorized return on
equity. Under this banded rate of return, the Company shares 50% of the
earnings over, and may file a rate case if the Company's earnings are under.
Rates for basic residential services remain frozen at the level set in 1992.
Under the plan, the Company also applied for and received pricing flexibility
for several competitive services, including Centrex, High Speed Private Line
Services, Digital Data Services, Paging Services, Speed Calling, Repeat Call,
Home Intercom and Home Intercom Extra. The Company can request a change in
rates by filing a 14 day filing application with the PSC.
In December 1993, the PSC issued its Opinion and Order approving a
$15,800,000 rate increase, effective January 1, 1994. In this Order, the PSC
approved an authorized return on equity of 11.45% resulting in a banded return
of 10.45% to 12.45% for monitoring purposes in the Company's regulatory reform
plan. The PSC increased rates for public telephone service, increased the
message unit rate for business customers and increased certain other business
and residential rates to cover the increased revenue requirement.
On April 22, 1994, the Company filed an appeal with the District of
Columbia Court on two issues related to the Order, (i) the PSC's use of an
inappropriate capital structure for ratemaking and (ii) the PSC's departure
from the Federal Communications Commission's Uniform System of Accounts for
accounting purposes.
-5-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
On May 5, 1994, the PSC issued a Show Cause Order on the overcollection
of the Subscriber Plant Factor surcharge revenues in 1993. The PSC requires the
Company to show cause why it should not refund to its customers $2,300,000, plus
interest, as a result of this overcollection. Comments by the parties are due
June 6, 1994, with reply comments to be filed on June 13, 1994.
-6-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
SELECTED OPERATING DATA
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
At March 31,
----------------
1994 1993
---- ----
<S> <C> <C>
Network Access Lines in Service:
Residence.......................... 283 281
Business........................... 555 561
Public............................. 10 11
--- ---
848 853
=== ===
</TABLE>
<TABLE>
<CAPTION>
Three months ended
March 31,
--------------------
1994 1993
-------- --------
<S> <C> <C>
Carrier Access Minutes of Use:
Interstate .............................. 659,099 630,110
======= =======
</TABLE>
<TABLE>
<CAPTION>
Three months ended
March 31,
--------------------
1994 1993
-------- --------
<S> <C> <C>
Toll Messages:
Message Telecommunication Services ...... 1,016 911
===== =====
</TABLE>
-7-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
Item 2. Management's Discussion and Analysis of Results of Operations
(Abbreviated pursuant to General Instruction H(2).)
This discussion should be read in conjunction with the Financial Statements
and Notes to Financial Statements.
RESULTS OF OPERATIONS
Net income for the quarter ended March 31, 1994 increased $8,106,000 from the
corresponding period last year. Results for the first quarter of 1993 reflect
an after-tax charge of $4,221,000 for the adoption of Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" and a $4,494,000 extraordinary charge, net of tax, for the early
extinguishment of debt.
OPERATING REVENUES
Operating revenues decreased $1,705,000 or 1.3% for the first quarter of 1994
from the corresponding period last year. The decrease in total operating
revenues was comprised of the following:
<TABLE>
<CAPTION>
Increase/(Decrease)
(Dollars In Thousands)
----------------------
<S> <C>
Local service............................. $ 3,312
Network access............................ (3,610)
Toll service.............................. 143
Directory advertising, billing services
and other............................... (943)
Less: Provision for uncollectibles....... 607
-------
$(1,705)
=======
</TABLE>
Local service revenues are earned from the provision of local exchange, local
private line, and public telephone services. Local service revenues increased
$3,312,000 or 4.7% for the first quarter of 1994. This increase was principally
due to an increase in rates, effective January 1, 1994, for basic business
service and Custom Calling features (see Note 4 of Notes to Financial
Statements). Also contributing to this increase was higher demand for value-
added central office services such as Custom Calling and Caller ID. Access
lines in service at March 31, 1994 were substantially unchanged from March 31,
1993 (see Selected Operating Data on page 7).
Network access revenues are received from interexchange carriers (IXCs) for
their use of the Company's local exchange facilities in providing interstate
long-distance services to IXCs' customers and from end-user subscribers.
Switched access revenues are derived from usage-based charges paid by IXCs for
access to the Company's network. Special access revenues arise from access
charges paid by customers who have private lines, and end-user access revenues
are earned from local exchange carrier customers who pay for access to the
network.
Network access revenues decreased $3,610,000 or 11.4% in the first quarter of
1994 due to the effect of an interstate rate reduction filed by the Company with
the Federal Communications Commission (FCC), which became effective on July 2,
1993. This decrease was partly offset by a 4.6% growth in access minutes of use
due to the effect of a recovering economy and inclement weather in the region
(see Selected Operating Data on page 7), and lower support payments to the
National Exchange Carrier Association (NECA) interstate common line pool. In
its April 1, 1994 tariff filing, the Company filed revised rates which will
become effective July 1, 1994, subject to FCC approval.
Toll service revenues are earned from interexchange usage services such as
Message Telecommunication Services. Toll service revenues increased $143,000
or 14.7% in the first quarter of 1994. Toll message volumes, which were
partially storm-driven, were 11.5% higher than the first quarter of 1993 (see
Selected Operating Data on page 7).
-8-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
Directory advertising, billing services and other revenues include revenues
earned from directory advertising, billing and collection services provided to
IXCs and others, premises services such as inside wire installation and
maintenance services, rent of Company facilities by affiliates and non-
affiliates, and certain nonregulated enhanced network services.
Directory advertising, billing services and other revenues decreased $943,000
or 2.9% for the first quarter of 1994. This decrease was primarily due to
lower facilities rental revenue received from affiliated companies due to
adjustments recorded in the first quarter of 1993. This decrease was partially
offset by increased demand for voice messaging services such as Answer Call,
and increased revenue from contracts with the federal government for inside
wire installation. Directory advertising revenues were substantially
unchanged from the first quarter of 1993.
The provision for uncollectibles, expressed as a percentage of total operating
revenues, was 1.0% for the first quarter of 1994 and .6% for the same period
last year. The increase in the provision reflects unfavorable collection
experience.
OPERATING EXPENSES
Operating expenses decreased $524,000 or .5% for the first quarter of 1994
from the corresponding period last year. The decrease in total operating
expenses was comprised of the following:
<TABLE>
<CAPTION>
Increase/(Decrease)
(Dollars In Thousands)
----------------------
<S> <C>
Employee costs ........................ $ (428)
Depreciation and amortization ......... (1,704)
Taxes other than income ............... 1,082
Other ................................. 526
-------
$ (524)
=======
</TABLE>
Employee costs consist of salaries, wages and other employee compensation,
employee benefits, and payroll taxes paid directly by the Company. Similar
costs incurred by employees of Bell Atlantic Network Services, Inc. (NSI), who
provide centralized services on a contract basis, are allocated to the Company
and are included in other operating expenses. Employee costs decreased $428,000
or 1.1% in the first quarter of 1994, primarily due to a reduction in workforce
and lower performance award expense. This decrease was partially offset by
salary and wage increases and the effect of winter storms on repair and
maintenance activity.
The Company continues to evaluate ways to streamline and restructure its
operations and reduce its workforce requirements in an effort to improve its
cost structure.
Depreciation and amortization expense decreased $1,704,000 or 6.2% in the
first quarter of 1994. This decrease was principally due to lower depreciation
expense resulting from a reduction in the level of depreciable plant.
Taxes other than income increased $1,082,000 or 10.7% in the first quarter of
1994 due in part to additional property taxes assessed in the first quarter of
1994.
Other operating expenses consist primarily of contracted services, including
centralized service expenses allocated from NSI, rent, network software costs,
and other general and administrative expenses. Other operating expenses
increased $526,000 or 1.4% in the first quarter of 1994, primarily reflecting
higher costs for contracted services as a result of higher employee costs and
taxes allocated from NSI. This increase was offset in part by decreases in
material and directory costs.
-9-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
OPERATING INCOME TAXES
The provision for income taxes decreased $196,000 or 3.9% in the first
quarter of 1994. The Company's effective income tax rate was 35.1% for the
first quarter of 1994, compared to 35.7% in the first quarter of 1993. The
decrease in the effective tax rate was principally the result of a decrease in
state income taxes resulting from lower pretax income, partially offset by the
effect of federal tax legislation enacted in the third quarter of 1993, which
increased the federal corporate tax rate from 34% to 35%.
INTEREST EXPENSE
Interest expense decreased $457,000 or 8.9% in the first quarter of 1994,
principally due to the effect of long-term debt refinancings in 1993.
COMPETITIVE ENVIRONMENT
The communications industry is currently undergoing fundamental changes which
may have a significant impact on future financial performance of
telecommunications companies. These changes are driven by a number of factors,
including the accelerated pace of technological innovation, the convergence of
telecommunications, cable television, information services and entertainment
businesses, and a regulatory environment in which many traditional regulatory
barriers are being lowered and competition permitted or encouraged.
Communications services and equipment and the number of competitors offering
such services are continuing to expand. The Company's telecommunications
business is currently subject to competition from numerous sources, including
competitive access providers for network access services and competing cellular
telephone companies. An increasing amount of this competition is from large
companies which have substantial capital, technological and marketing resources,
many of which do not face the same regulatory constraints as the Company. Other
potential sources of competition are cable television systems, shared tenant
services and other non-carrier systems which are capable of partially or
completely bypassing the Company's local network.
The entry of well-financed competitors, such as large long-distance carriers
and other local exchange service competitors, has the potential to adversely
affect multiple revenue streams of the Company including local exchange, local
access, and long-distance services in the market segments and geographical areas
in which the competitors operate. The amount of revenue reductions will depend
on competitors' success in marketing these services, and the conditions of
interconnection established by regulators. The potential impact is expected to
be offset, to some extent, by revenues from interconnection charges to be paid
to the Company by these competitors.
The Company continues to focus its efforts on becoming more competitive and
seeking growth opportunities. The Company's responses to competitive challenges
include an increased emphasis on meeting customer requirements through the rapid
introduction of new products and services, the delivery of increased customer
value, and the development of customer loyalty programs. In addition, the
Company continues to strive for increased pricing flexibility through efforts to
reprice and repackage existing competitive services, reduce its cost structure
and workforce through consolidation, re-engineering and streamlining
initiatives, and to achieve an improved regulatory and legislative environment.
Other important competitive responses including the development of broadband
networks, will improve the Company's ability to take advantage of the growth
opportunities created by technological advances and the convergence of the
communications, information services and entertainment industries.
REGULATORY ENVIRONMENT
Federal Regulation
------------------
Recent FCC regulatory rulings have sought to expand competition for special
and switched access services. Effective February 1994, the FCC ordered local
exchange
-10-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
carriers, including the Company, to allow competing carriers to interconnect
to the local exchange network for the purpose of providing switched access
transport services. The terms and conditions of this ruling are similar to
those for special access collocation ordered during 1992. The principal goal
of the FCC's collocation rulings is to encourage competition for these
services. The FCC also granted additional, but limited, pricing flexibility
for these services so that the local exchange carriers can better respond to
the competition that will result. The Company does not expect the net revenue
impact of special access collocation to be material. Revenue losses from
switched access collocation, however, may be larger than from special access
collocation. Bell Atlantic and certain other parties have appealed both the
special and switched access collocation orders. Appeals of the switched access
collocation order have been stayed pending a decision on the appeal of the
special access collocation order. Bell Atlantic expects the appeal on the
special access collocation order to be decided in 1994.
In February 1994, the FCC initiated a rulemaking proceeding to determine the
effectiveness of the price cap rules and decide what changes, if any, should be
made to those rules. Under proposed rulemaking, the FCC identified for
examination three broad sets of issues including those related to the basic
goals of price regulation, the operation of price caps and the transition of
local exchange services to a fully competitive market. This rulemaking is
expected to be concluded by the end of 1994. Any changes to the current price
cap plan are expected to be effective January 1, 1995 or shortly thereafter. At
this time, the Company cannot estimate the financial impact, if any, that would
result if the FCC revised its current price cap rules.
State Regulation
----------------
The communications services of the Company are subject to regulation by the
District of Columbia Public Service Commission (PSC) with respect to intrastate
rates and services and other matters.
For a complete discussion of state regulatory matters, see Note 4 of Notes to
Financial Statements.
REGULATORY ACCOUNTING
The Company conducts ongoing evaluations of its accounting practices, many of
which have been prescribed by regulators. These evaluations include the
assessment of whether costs that have been deferred as a result of actions of
regulators and the cost of the Company's telephone plant will be recoverable in
the future. In the event recoverability of costs becomes unlikely due to
changes in cost-based regulation to another form of regulation, decisions by the
Company to accelerate deployment of new technology, or increasing levels of
competition, the Company may no longer apply the provisions of Statement of
Financial Accounting Standards No. 71, "Accounting for the Effects of Certain
Types of Regulation" (Statement No. 71). The discontinued application of
Statement No. 71 would require the Company to write off its regulatory assets
and liabilities and may require the Company to adjust the carrying amount of its
telephone plant should it determine that such amount is not recoverable. The
Company believes that it continues to meet the criteria for continued financial
reporting under Statement No. 71. A determination in the future that such
criteria are no longer met may result in a significant one-time, non-cash,
extraordinary charge, if the Company determines that a substantial portion of
the carrying value of its telephone plant may not be recoverable.
OTHER MATTERS
Environmental Issues
--------------------
The Company is subject to a number of environmental matters as a result of its
operations and shared liability provisions in the Plan of Reorganization,
related to the Modification of Final Judgment. Certain of these environmental
matters relate to Superfund sites for which the Company has been designated as a
potentially responsible
-11-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
party by the U.S. Environmental Protection Agency. Designation as a
potentially responsible party subjects the named company to potential
liability for costs relating to cleanup of the affected sites. The Company is
also responsible for the remediation of sites with underground fuel storage
tanks and other expenses associated with environmental compliance.
The Company continually monitors its operations with respect to potential
environmental issues, including changes in legally mandated standards and
remediation technologies. The Company's recorded liability reflects those
specific issues where remediation activities are currently deemed to be probable
and where the cost of remediation is estimable. Management believes that the
aggregate amount of any potential liability would not have a material effect on
the Company's financial condition or results of operations.
FINANCIAL CONDITION
Management believes that the Company has adequate internal and external
resources available to meet ongoing requirements, including network expansion
and modernization, and payment of dividends. Management expects that presently
foreseeable capital requirements will be financed primarily through internally
generated funds, although additional long-term debt may be needed to fund
development activities and to maintain the Company's capital structure within
management's guidelines.
The Company's debt ratio was 46.2% at March 31, 1994, compared to 46.3% at
December 31, 1993 and 45.5% at March 31, 1993.
As of March 31, 1994, the Company had $60,000,000 remaining under a shelf
registration statement filed with the Securities and Exchange Commission.
-12-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
For background concerning the Company's contingent liabilities
under the Plan of Reorganization governing the divestiture by AT&T
Corporation (formerly American Telephone and Telegraph Company) of
certain assets of the former Bell System Operating Companies with
respect to private actions relating to pre-divestiture events,
including pending antitrust cases, see Item 3 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1993.
Item 6. Exhibits and Reports on Form 8-K
(b) There were no Current Reports on Form 8-K filed during the
quarter ended March 31, 1994.
-13-
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
SIGNATURES
Pursuant to the requirements 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.
BELL ATLANTIC - WASHINGTON, D.C., INC.
Date: May 12, 1994 By /s/ Sheila D. Shears
--------------------------------------
Sheila D. Shears
Controller
UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF MAY 9, 1994.
-14-
