<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, 1996
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 OPERATIONS AND REINVESTED EARNINGS (ACCUMULATED DEFICIT)
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
-----------------------
1996 1995
---------- -----------
<S> <C> <C>
OPERATING REVENUES
(including $19,215 and $12,532 from affiliates)..... $144,801 $136,799
-------- --------
OPERATING EXPENSES
Employee costs, including benefits and taxes........ 28,328 39,007
Depreciation and amortization....................... 33,368 27,059
Other (including $38,253 and $31,861 to
affiliates)........................................ 58,623 61,979
-------- --------
120,319 128,045
-------- --------
OPERATING INCOME...................................... 24,482 8,754
OTHER EXPENSE, NET.................................... 94 316
INTEREST EXPENSE
(including $878 and $491 to affiliate)............. 4,920 4,311
-------- --------
INCOME BEFORE PROVISION FOR INCOME TAXES.............. 19,468 4,127
PROVISION FOR INCOME TAXES............................ 7,819 1,590
-------- --------
NET INCOME............................................ $ 11,649 $ 2,537
======== ========
REINVESTED EARNINGS (ACCUMULATED DEFICIT)
At beginning of period............................. $ 3,786 $(27,330)
Add: net income................................... 11,649 2,537
-------- --------
15,435 (24,793)
Deduct: other changes............................. 91 ---
-------- --------
At end of period................................... $ 15,344 $(24,793)
======== ========
</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,
1996 1995
---------- ------------
<S> <C> <C>
CURRENT ASSETS
Short-term investments......................... $ 4,000 $ ---
Accounts receivable:
Trade and other, net of allowances for
uncollectibles of $9,937 and $9,193......... 145,856 145,477
Affiliates................................... 17,711 19,750
Material and supplies.......................... 2,255 2,591
Prepaid expenses............................... 15,916 20,139
Deferred income taxes.......................... 5,052 5,054
---------- ----------
190,790 193,011
---------- ----------
PLANT, PROPERTY AND EQUIPMENT.................. 1,448,964 1,445,606
Less accumulated depreciation.................. 722,696 703,316
---------- ----------
726,268 742,290
---------- ----------
OTHER ASSETS................................... 11,779 14,037
---------- ----------
TOTAL ASSETS................................... $ 928,837 $ 949,338
========== ==========
</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,
1996 1995
-------- ------------
<S> <C> <C>
CURRENT LIABILITIES
Debt maturing within one year:
Note payable to affiliate......................... $ 50,312 $ 74,451
Other............................................. 1,065 1,375
Accounts payable and accrued liabilities:
Affiliates........................................ 105,158 102,772
Other............................................. 76,082 82,417
Advance billings and customer deposits.............. 11,031 11,261
-------- --------
243,648 272,276
-------- --------
LONG-TERM DEBT...................................... 247,708 247,709
-------- --------
EMPLOYEE BENEFIT OBLIGATIONS........................ 146,975 151,217
-------- --------
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes............................... 18,655 18,315
Unamortized investment tax credits.................. 4,714 4,895
Other............................................... 31,276 30,623
-------- --------
54,645 53,833
-------- --------
SHAREOWNER'S INVESTMENT
Common stock - one share, owned by parent, at
stated value...................................... 191,968 191,968
Capital surplus..................................... 28,549 28,549
Reinvested earnings................................. 15,344 3,786
-------- --------
235,861 224,303
-------- --------
TOTAL LIABILITIES AND SHAREOWNER'S INVESTMENT....... $928,837 $949,338
======== ========
</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,
--------------------------
1996 1995
------------- -----------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES............ $ 48,474 $ 42,582
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in short-term investments................. (4,000) (5,791)
Additions to plant, property and equipment........... (18,065) (37,547)
Other, net........................................... 684 (30)
------------ -----------
Net cash used in investing activities................ (21,381) (43,368)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal repayments of borrowings and capital
lease obligations.................................. (321) (292)
Net change in note payable to affiliate.............. (24,139) 19,236
Capital surplus distribution......................... --- (12,756)
Net change in outstanding checks drawn
on controlled disbursement accounts................ (2,633) (5,402)
------------ -----------
Net cash (used in)/provided by financing activities.. (27,093) 786
------------ -----------
NET CHANGE IN CASH................................... --- ---
CASH, BEGINNING OF PERIOD............................ --- ---
------------ -----------
CASH, END OF PERIOD.................................. $ --- $ ---
============ ===========
</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. (the Company) pursuant to the rules
and regulations of the Securities and Exchange Commission (SEC). The December
31, 1995 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, 1995.
2. Reclassifications
Certain reclassifications of the prior year's data have been made to
conform to 1996 classifications.
3. Subsequent Event - Proposed Bell Atlantic - NYNEX Merger
On April 22, 1996, Bell Atlantic Corporation (Bell Atlantic) and NYNEX
Corporation announced a proposed merger of equals pursuant to a definitive
merger agreement dated April 21, 1996, that provides for the formation of a new
company to be named Bell Atlantic Corporation. Under the terms of the agreement,
NYNEX shareholders will receive one share in the new company for each NYNEX
share owned and Bell Atlantic shareholders will receive 1.302 shares in the new
company for each Bell Atlantic share owned. The merger, which is expected to
qualify as a pooling of interests for accounting purposes, is subject to a
number of conditions, including regulatory approvals, receipt of opinions that
the merger will be tax free, and the approval of the shareholders of both Bell
Atlantic and NYNEX. The transaction is expected to close within 12 months.
5
<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
- ---------------------
The Company reported net income for the first quarter of 1996 of
$11,649,000, compared to net income of $2,537,000 for the same period in 1995.
Items affecting the comparison of operating results between the three month
periods ended March 31, 1996 and 1995 are discussed in the following sections.
<TABLE>
<CAPTION>
OPERATING REVENUES
- ------------------
(Dollars in Thousands)
For the Three Month Period Ended March 31 1996 1995
- -------------------------------------------------------------------------
<S> <C> <C>
Transport Services
Local service........................... $ 61,130 $ 59,773
Network access.......................... 30,767 29,985
Toll service............................ 973 1,130
Ancillary Services
Directory publishing.................... 8,050 8,048
Other................................... 20,220 15,369
Value-added Services...................... 23,661 22,494
-------- --------
Total..................................... $144,801 $136,799
======== ========
<CAPTION>
TRANSPORT SERVICES OPERATING STATISTICS
- ---------------------------------------
Percentage
1996 1995 Increase
- -------------------------------------------------------------------------
<S> <C> <C> <C>
At March 31
- -----------
Access Lines in Service (In thousands)
Residence.............................. 289 287 .7%
Business............................... 580 566 2.5
Public................................. 10 10 --
--- ---
879 863 1.9
=== ===
For the Three Month Period Ended March 31
- -----------------------------------------
Access Minutes of Use (In millions)
Interstate............................. 703 674 4.3
=== ===
Toll Messages (In thousands)
Interstate............................. 939 855 9.8
=== ===
</TABLE>
6
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
LOCAL SERVICE REVENUES
1996-1995 Increase
- --------------------------------------------------------------------------------
Three Months $1,357 2.3%
- --------------------------------------------------------------------------------
Local service revenues are earned by the Company from the provision of local
exchange, local private line and public telephone services.
Higher network usage increased local service revenues during the first
quarter of 1996. The increase in calling volumes principally resulted from
growth in the number of access lines in service, which increased 1.9% from March
31, 1995.
NETWORK ACCESS REVENUES
1996-1995 Increase
- --------------------------------------------------------------------------------
Three Months $782 2.6%
- --------------------------------------------------------------------------------
Network access revenues are received from interexchange carriers (IXCs) for
their use of the Company's local exchange facilities in providing long distance
services to IXCs' customers and from end-user subscribers. Switched access
service 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 IXCs and end-users who have private networks. End-user access revenues are
earned from local exchange carrier customers who pay for access to the network.
Network access revenues increased due to higher revenues from affiliated
companies pursuant to an interstate revenue sharing agreement, and higher
customer demand for access services as reflected by growth in access minutes of
use of 4.3% over the same period in 1995. Revenue growth was partially offset
by the net effect of price reductions under the Federal Communications
Commission's (FCC) Price Cap Plans.
See "Factors That May Impact Future Results - FCC Interim Price Cap Plan"
below for a discussion of Bell Atlantic's proposed FCC price cap filing, which
would become effective during the third quarter of 1996.
TOLL SERVICE REVENUES
1996-1995 (Decrease)
- --------------------------------------------------------------------------------
Three Months $(157) (13.9)%
- --------------------------------------------------------------------------------
Toll service revenues are earned from calls made outside a customer's local
calling area, but within the same service area of the Company, commonly referred
to as Local Access and Transport Areas (LATAs).
The decrease in toll service revenues was principally due to company-
initiated price reductions. This decrease was partially offset by increased
network usage, partially attributable to severe winter storms in early 1996.
7
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
DIRECTORY PUBLISHING REVENUES
1996-1995 Increase
- --------------------------------------------------------------------------------
Three Months $2 --%
- --------------------------------------------------------------------------------
Directory publishing revenues are earned primarily from local advertising
and marketing services provided to businesses in White and Yellow Pages
directories. Other directory publishing services include database and foreign
directory marketing.
The increase in directory publishing revenues was due to higher rates
charged for these services. This increase was substantially offset by volume
decreases resulting from the impact of competition from other directory
companies, as well as other advertising media.
OTHER ANCILLARY SERVICES REVENUES
1996-1995 Increase
- --------------------------------------------------------------------------------
Three Months $4,851 31.6%
- --------------------------------------------------------------------------------
Other ancillary services include billing and collection services provided to
IXCs, facilities rental services provided to affiliates and non-affiliates and
sales of materials and supplies to affiliates.
Other ancillary services revenues increased primarily due to higher
facilities rental revenues from affiliates. The increase was offset, in part, by
a reduction in billing and collection services revenues, primarily as a result
of the elimination of certain services from a contract with an IXC.
VALUE-ADDED SERVICES REVENUES
1996-1995 Increase
- --------------------------------------------------------------------------------
Three Months $1,167 5.2%
- --------------------------------------------------------------------------------
Value-added services represent a family of services which expand the
utilization of the network. These services include recent products such as
voice messaging services, Caller ID and Return Call as well as more mature
products such as Centrex, Touch-Tone, and other customer premises wiring and
maintenance services.
The increase in value-added services revenues during the first quarter of
1996 was primarily attributable to higher demand for customer premises wiring
and maintenance services by government customers.
8
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
<TABLE>
<CAPTION>
OPERATING EXPENSES
- ------------------
(Dollars in Thousands)
For the Three Month Period Ended March 31 1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
Employee costs, including benefits and taxes.. $ 28,328 $ 39,007
Depreciation and amortization................. 33,368 27,059
Other operating expenses...................... 58,623 61,979
-------- --------
Total......................................... $120,319 $128,045
======== ========
</TABLE>
EMPLOYEE COSTS
1996-1995 (Decrease)
- --------------------------------------------------------------------------------
Three Months $(10,679) (27.4)%
- --------------------------------------------------------------------------------
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.
The decrease in employee costs was attributable to savings associated with
employees who left the Company during 1995 and the effect of employees
transferred from the Company to NSI in December 1995. These reductions were
partially offset by annual salary and wage increases.
DEPRECIATION AND AMORTIZATION
1996-1995 Increase
- --------------------------------------------------------------------------------
Three Months $6,309 23.3%
- --------------------------------------------------------------------------------
Depreciation and amortization increased due to growth in depreciable
telephone plant and higher depreciation rates. The composite depreciation rate
was 9.5% for the first quarter of 1996, compared to 8.3% for the three month
period ended March 31, 1995.
OTHER OPERATING EXPENSES
1996-1995 (Decrease)
- --------------------------------------------------------------------------------
Three Months $(3,356) (5.4)%
- --------------------------------------------------------------------------------
Other operating expenses consist primarily of contract services including
centralized services expenses allocated from NSI, rent, network software costs,
operating taxes other than income, provision for uncollectible accounts
receivable and other costs.
The decrease in other operating expenses was attributable to lower network
software costs, lower operating taxes other than income, and a reduction in
write-offs of uncollectible accounts receivable associated with the Company's
billing and collection services. Other operating expenses were further reduced
by lower costs for contract services, materials and rent.
These decreases were partially offset by higher centralized services expenses
allocated from NSI. This increase was due, in part, to higher employee costs
incurred in that organization as a result of the transfer of employees from the
network services subsidiaries to NSI in December 1995. Additional operating
costs incurred to enhance billing and operating systems, consolidate work
activities and market value-added services also contributed to the increase in
centralized services expenses during the first quarter of 1996.
9
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
OTHER EXPENSE, NET
1996-1995 (Decrease)
- --------------------------------------------------------------------------------
Three Months $(222)
- --------------------------------------------------------------------------------
The change in other expense, net was attributable to an increase in certain
nonoperating income in the first quarter of 1996.
INTEREST EXPENSE
1996-1995 Increase
- --------------------------------------------------------------------------------
Three Months $609 14.1%
- --------------------------------------------------------------------------------
Interest expense increased principally due to higher levels of average short-
term debt in the first quarter of 1996. A reduction in capitalized interest
costs also contributed to the increase in interest expense.
PROVISION FOR INCOME TAXES
1996-1995 Increase
- --------------------------------------------------------------------------------
Three Months $6,229
- --------------------------------------------------------------------------------
EFFECTIVE INCOME TAX RATES
For the Three Months Ended March 31
- --------------------------------------------------------------------------------
1996 40.2%
- --------------------------------------------------------------------------------
1995 38.5%
- --------------------------------------------------------------------------------
The Company's effective income tax rate was higher in the first quarter of
1996 principally due to an increase in pretax income.
FACTORS THAT MAY IMPACT FUTURE RESULTS
- --------------------------------------
Federal Legislation
The Telecommunications Act of 1996 (the Act) became effective on February 8,
1996 and replaces the Modification of Final Judgment (MFJ). In general, the Act
includes provisions that would open the Company's local exchange market to
competition and would permit local exchange carriers, such as the Company, upon
meeting certain conditions, to provide interLATA services (long distance) and
video programming and to engage in manufacturing. However, the ability of the
Company to engage in businesses previously prohibited by the MFJ is largely
dependent on satisfying certain conditions contained in the Act and regulations
promulgated thereunder. The following is a brief discussion regarding certain
provisions of the Act.
With regard to the rules governing competition in the interLATA market, the
Act takes a two-fold approach. Effective February 8, 1996, Bell Atlantic is
permitted to apply for approval to offer interLATA services outside of the
geographic region in which it currently operates as a local exchange carrier.
Bell Atlantic has announced its plans to offer such services in several states.
In addition, Bell Atlantic's wireless businesses are now permitted to offer
interLATA services without having to comply with the conditions imposed in
waivers granted under the MFJ.
Secondly, within Bell Atlantic's geographic region, each of the telephone
subsidiaries, including the Company, must demonstrate to the FCC that it has
satisfied certain requirements in order to be permitted to offer interLATA
services within its jurisdiction. Among the requirements with which the Company
must comply is a 14-point "competitive checklist" which is aimed at ensuring
that competitors have the ability to connect to the Company's network. The
Company must also demonstrate to the FCC that its entry into the interLATA
market would be in the public interest.
10
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
The Act also imposes specific requirements on the Company that are intended
to promote competition in the local exchange markets. These requirements include
the duty to: (i) provide interconnection to any other carrier for the
transmission and routing of telephone exchange service at any technically
feasible point; (ii) provide unbundled access to network elements at any
technically feasible point; (iii) provide retail services at wholesale prices
for resale; (iv) establish reciprocal compensation arrangements for the
origination and termination of telecommunications; and (v) provide physical
collocation.
No definitive prediction can be made as to the specific impact of the Act on
the business or financial condition of the Company. The financial impact on the
Company will be dependent on several factors, including the timing, extent and
success of competition in the Company's markets and the timing, extent and
success of the Company's pursuit of new business opportunities resulting from
the Act.
Competition
Local Exchange Services
The ability to offer local exchange services has historically been subject to
regulation by the District of Columbia Public Service Commission (PSC). An
application to provide local exchange services filed by MFS - Intelenet of
Washington, D.C., a subsidiary of MFS Communications Company, Inc., is currently
pending. The Act is expected to significantly increase the level of competition
in the Company's local exchange market. However, increased competition in the
local exchange market will facilitate FCC approval of the Company's entry into
the interLATA markets.
FCC Interim Price Cap Plan
On April 2, 1996, Bell Atlantic filed its Annual Access Tariff Filing of
Interstate Rates, as required by the FCC's Interim Price Cap Plan. In the
filing, Bell Atlantic selected the 5.3% Productivity Factor for the July 1996 to
June 1997 tariff period. Companies selecting the 5.3% Productivity Factor are
not required to share earnings in excess of allowed rates of return. The
reduction in the price cap index resulting from the 5.3% Productivity Factor was
more than offset by the reversal of prior year exogenous rate reductions and the
FCC's partial annulment of ratemaking requirements related to the Company's
adoption of Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." The rates included
in the April 2, 1996 filing propose actual price increases for the Company
totaling approximately $750,000 on an annual basis, which would become effective
July 1, 1996.
In 1995, Bell Atlantic filed an appeal with the Court of Appeals for the D.C.
Circuit for review of the FCC's Interim Price Cap Plan. On March 29, 1996, the
U.S. Court of Appeals denied Bell Atlantic's petition.
By the end of 1996, Bell Atlantic expects the FCC to replace the Interim
Price Cap Plan for interstate access charges with a revised price cap plan.
Other State Regulatory Matters
The communications services of the Company are subject to regulation by the
PSC with respect to intrastate rates and certain other matters.
In January 1995, the Company filed a petition with the PSC seeking approval of
a proposed price cap plan to become effective upon the expiration of its current
regulatory reform plan (D.C. Reform Plan) in 1996. In February 1996, the
Company signed a settlement agreement with the Office of People's Counsel to
implement a four-year price cap plan to replace the D.C. Reform Plan. The
settlement agreement, if approved, would: (1) introduce a four-year price cap
plan effective 1/1/96 through 12/31/99; (2) divide services into three
categories: basic, discretionary and competitive; (3) cap certain basic
residence rates for the term of the plan and allow other basic rates to change
with the rate of inflation minus 3%; (4) allow discretionary services rates to
increase by 15% annually; (5) eliminate pricing regulation of competitive
services; (6) reduce residential rates by $3.1 million in 1996; business rates
by $2.2 million in 1997 and $3.2 million in 1998; and (7) establish a trust fund
to wire public schools and libraries with Bell Atlantic integrated services
digital network (ISDN) lines. The agreement is pending approval by the PSC,
which is expected in the third quarter of 1996.
11
<PAGE>
Bell Atlantic - Washington, D.C., Inc.
OTHER MATTERS
- -------------
Environmental Issues
The Company is subject to a number of environmental proceedings as a result
of its operations and the shared liability provisions in the Plan of
Reorganization related to the Modification of Final Judgment. 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 liabilities reflect those
specific situations 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 additional potential liability would not have a
material effect on the Company's results of operations or financial condition.
Subsequent Event - Proposed Bell Atlantic - NYNEX Merger
On April 22, 1996, Bell Atlantic and NYNEX Corporation announced a proposed
merger of equals pursuant to a definitive merger agreement dated April 21, 1996,
that provides for the formation of a new company to be named Bell Atlantic
Corporation. Under the terms of the agreement, NYNEX shareholders will receive
one share in the new company for each NYNEX share owned and Bell Atlantic
shareholders will receive 1.302 shares in the new company for each Bell Atlantic
share owned. The merger, which is expected to qualify as a pooling of interests
for accounting purposes, is subject to a number of conditions, including
regulatory approvals, receipt of opinions that the merger will be tax free, and
the approval of the shareholders of both Bell Atlantic and NYNEX. The
transaction is expected to close within 12 months.
FINANCIAL CONDITION
- -------------------
Management believes that the Company has adequate internal and external
resources available to meet ongoing operating requirements, including network
expansion and modernization. Management expects that presently foreseeable
capital requirements will be financed primarily through internally generated
funds. Additional long-term debt may be needed to fund development activities
and to maintain the Company's capital structure within management's guidelines.
As of March 31, 1996, the Company had $74,688,000 of an unused line of
credit with an affiliate, Bell Atlantic Network Funding Corporation. In
addition, the Company has $60,000,000 remaining under a shelf registration
statement filed with the Securities and Exchange Commission for the issuance of
unsecured debt securities.
The Company's debt ratio was 55.9% at March 31, 1996, compared to 59.1% at
December 31, 1995.
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 Corp.
(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, 1995.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Number
27 Financial Data Schedule.
(b) There were no Current Reports on Form 8-K filed during the
quarter ended March 31, 1996.
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 8, 1996 By /s/ Sheila D. Shears
---------------------------------
Sheila D. Shears
Controller and Treasurer
UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF MAY 3, 1996.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND THE
BALANCE SHEET AS OF MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 0
<SECURITIES> 4,000
<RECEIVABLES> 155,793
<ALLOWANCES> 9,937
<INVENTORY> 2,255
<CURRENT-ASSETS> 190,790
<PP&E> 1,448,964
<DEPRECIATION> 722,696
<TOTAL-ASSETS> 928,837
<CURRENT-LIABILITIES> 243,648
<BONDS> 247,708
0
0
<COMMON> 191,968
<OTHER-SE> 43,893
<TOTAL-LIABILITY-AND-EQUITY> 928,837
<SALES> 0
<TOTAL-REVENUES> 144,801
<CGS> 0
<TOTAL-COSTS> 120,319
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,920
<INCOME-PRETAX> 19,468
<INCOME-TAX> 7,819
<INCOME-CONTINUING> 11,649
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,649
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
