BELL ATLANTIC VIRGINIA INC, 10-K, 1994-03-31

BELL ATLANTIC VIRGINIA INC
10-K, 1994-03-31
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

Previous: BELL ATLANTIC WEST VIRGINIA INC /, 10-K, 1994-03-31

Next: CHRIS CRAFT INDUSTRIES INC, 10-K, 1994-03-31

<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

________________

FORM 10-K
________________

(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993

[ ] 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 1-6964

BELL ATLANTIC - VIRGINIA, INC.

(Former Name: The Chesapeake and Potomac Telephone Company of Virginia)

A Virginia Corporation I.R.S. Employer Identification No. 54-0167060

600 East Main Street, Richmond, Virginia 23219

Telephone Number (804) 225-6300

_____________

Securities registered pursuant to Section 12(b) of the Act: See attached
Schedule A.

Securities registered pursuant to Section 12(g) of the Act: None.

THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF BELL ATLANTIC CORPORATION, MEETS
THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J(1)(a) AND (b) OF FORM 10-K AND
IS THEREFORE FILING THIS FORM WITH REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL
INSTRUCTION J(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 - VIRGINIA, INC.

SCHEDULE A

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered
- ------------------------------------------------------ ---------------------

Forty Year 7-1/4% Debentures, due June 1, 2012 New York Stock
Exchange
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
ITEM NO. PAGE
- -------- ----
<S> <C> <C>
PART I

1. Business......................................................... 1
2. Properties....................................................... 13
3. Legal Proceedings................................................ 14
4. Submission of Matters to a Vote of Security Holders ............. 15

PART II

5. Market for Registrant's Common Equity and Related
Stockholder Matters ............................................. 15
6. Selected Financial Data ......................................... 15
7. Management's Discussion and Analysis of Results of Operations ...
(Abbreviated pursuant to General Instruction J(2)) .............. 16
8. Financial Statements and Supplementary Data ..................... 22
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure ........................................ 22

PART III

10. Directors and Executive Officers of the Registrant............... 22
11. Executive Compensation........................................... 22
12. Security Ownership of Certain Beneficial Owners and
Management....................................................... 22
13. Certain Relationships and Related Transactions................... 22

PART IV

14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K ........................................................ 22
</TABLE>

UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF MARCH 24, 1994.
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

PART I

ITEM 1. BUSINESS

GENERAL

Bell Atlantic - Virginia, Inc. (formerly The Chesapeake and Potomac
Telephone Company of Virginia) (the "Company") is incorporated under the laws of
the Commonwealth of Virginia and has its principal offices at 600 East Main
Street, Richmond, Virginia 23219 (telephone number 804-225-6300). The Company
is a wholly owned subsidiary of Bell Atlantic Corporation ("Bell Atlantic"),
which is one of the seven regional holding companies ("RHCs") formed in
connection with the court-approved divestiture (the "Divestiture"), effective
January 1, 1984, of those assets of the American Telephone and Telegraph Company
("AT&T") related to exchange telecommunications, exchange access functions,
printed directories and cellular mobile communications.

The Company presently serves a territory consisting of five complete Local
Access and Transport Areas ("LATAs") and part of a sixth LATA. These LATAs are
generally centered on a city or based on some other identifiable common
geography and, with certain limited exceptions, each LATA marks the boundary
within which the Company may provide telephone service.

The Company provides two basic types of telecommunications services. First,
the Company transports telecommunications traffic between subscribers located
within the same LATA ("intraLATA service"), including both local and toll
services. Local service includes the provision of local exchange ("dial tone"),
local private line and public telephone services (including dial tone service
for pay telephones owned by the Company and other pay telephone providers).
Among other local services provided are Centrex (telephone company central
office-based switched telephone service enabling the subscriber to make both
intercom and outside calls) and a variety of special and custom calling
services. Toll service includes message toll service (calling service beyond the
local calling area) within LATA boundaries, and intraLATA Wide Area Toll Service
(WATS)/800 services (volume discount offerings for customers with highly
concentrated demand). Second, the Company provides exchange access service,
which links a subscriber's telephone or other equipment to the transmission
facilities of interexchange carriers which, in turn, provide telecommunications
service between LATAs ("interLATA service") to their customers. See "Competition
- -IntraLATA Toll Competition".

The communications industry is currently undergoing fundamental changes
driven by the accelerated pace of technological innovation, the convergence of
the 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. Although no
definitive prediction can be made of the market opportunities these changes will
present or whether Bell Atlantic and its subsidiaries, including the Company,
will be able successfully to take advantage of these opportunities, Bell
Atlantic is positioning itself to be a leading communications, information
services and entertainment company.

OPERATIONS

During 1993, Bell Atlantic reorganized certain functions formerly performed
by each of the seven Bell System operating companies ("BOCs") transferred to it
pursuant to the Divestiture, including the Company (collectively, the "Network
Services Companies"), into nine lines of business ("LOBs") organized across the
Network Services Companies around specific market segments. The Network
Services Companies, however, remain responsible within their respective service
areas for the provision of telephone services, for financial performance and for
regulatory matters. The nine LOBs are:

The Consumer Services LOB markets communications services to residential
-----------------
customers within the service territories of the Network Services Companies,
including the service territory of the Company, and plans in the future to
market information services and entertainment programming.

1
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

The Carrier Services LOB markets (i) switched and special access to the
----------------
Company's local exchange network, and (ii) billing and collection services,
including recording, rating, bill processing and bill rendering. The principal
customers of this LOB are interexchange carriers; AT&T is the largest single
customer. Other customers include business customers and government agencies
with their own special access network connections, wireless customers and other
local exchange carriers ("LECs") which resell network connections to their own
customers.

The Small Business Services LOB markets communications and information
-----------------------
services to small businesses (customers having up to 20 access lines or 100
Centrex lines).

The Large Business Services LOB markets communications and information
-----------------------
services to large businesses (customers having more than 20 access lines or more
than 100 centrex lines). These services include voice switching/processing
services (e.g., dedicated private lines, custom Centrex, call management and
voice messaging), end-user networking (e.g., credit and debit card transactions,
and personal computer-based conferencing, including data and video),
internetworking (establishing links between the geographically disparate
networks of two or more companies or within the same company), network
integration (integrating multiple geographically disparate networks into one
system), network optimization (disaster avoidance, 911, intelligent vehicle
highway systems), video services (distance learning, telemedicine, surveillance,
videoconferencing) and integrated multi-media applications services.

The Directory Services LOB manages the provision of (i) advertising and
------------------
marketing services to advertisers, and (ii) listing information (e.g., White
Pages and Yellow Pages). These services are currently provided primarily
through print media, but the Company expects that use of electronic formats will
increase in the future. In addition, the Directory Services LOB manages the
provision of photocomposition, database management and other related products
and services to publishers.

The Public and Operator Services LOB markets pay telephone and operator
----------------------------
services in the service territories of the Network Services Companies to meet
consumer needs for accessing public networks, locating and identifying network
subscribers, providing calling assistance and arranging billing alternatives
(e.g., calling card, collect and third party calls).

The Federal Systems LOB markets communications and information technology
---------------
and services to departments, agencies and offices of the executive, judicial and
legislative branches of the federal government.

The Information Services LOB has been established to provide programming
--------------------
services, including on-demand entertainment, transactions and interactive
multimedia applications within the Territory and in selected other markets. See
"FCC Regulation and Interstate Rates - Telephone Company Provision of Video Dial
Tone and Video Programming".

The Network LOB manages the technologies, services and systems platforms
-------
required by the other eight LOBs and the Network Services Companies, including
the Company, to meet the needs of their respective customers, including, without
limitation, switching, feature development and on-premises installation and
maintenance services.

The Company has been making and expects to continue to make significant
capital expenditures on its networks to meet the demand for communications
services and to further improve such services. Capital expenditures of the
Company were approximately $385 million in 1991, $383 million in 1992, and $360
million in 1993. The total investment of the Company in plant, property and
equipment decreased from $4.95 billion at December 31, 1991 to approximately
$4.73 billion at December 31, 1992, and increased to approximately $4.90 billion
at December 31, 1993, after giving effect to retirements, but before deducting
accumulated depreciation at such date.

The Company is projecting construction expenditures for 1994 at
approximately $368 milllion. However, subject to regulatory approvals, the
Network Services Companies, including the Company, plan to allocate capital
resources to the deployment of broadband network platforms (technologies
ultimately capable of providing a switched facility for access to and transport
of, high-speed data services, video-on-demand, and image and interactive
multimedia applications). Most of the funds for

2
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

these expenditures are expected to be generated internally. Some additional
external financing may be necessary or desirable.

LINE OF BUSINESS RESTRICTIONS

The consent decree entitled "Modification of Final Judgment" ("MFJ")
approved by the United States District Court for the District of Columbia (the
"D.C. District Court") which, together with the Plan of Reorganization ("Plan")
approved by the D.C. District Court set forth the terms of Divestiture also
established certain restrictions on the post-Divestiture activities of the RHCs,
including Bell Atlantic. The MFJ's principal restrictions on post-Divestiture
RHC activities included prohibitions on (i) providing interexchange
telecommunications, (ii) providing information services, (iii) engaging in the
manufacture of telecommunications equipment and customer premises equipment
("CPE"), and (iv) entering into any non-telecommunications businesses, in each
case without the approval of the D.C. District Court. Since Divestiture, the
D.C. District Court has retained jurisdiction over the construction,
modification, implementation and enforcement of the MFJ.

In September 1987, the D.C. District Court rendered a decision which
eliminated the need for the RHCs to obtain its approval prior to entering into
non-telecommunications businesses. However, the D.C. District Court refused to
eliminate the restrictions relating to equipment manufacturing or providing
interexchange services. With respect to information services, the Court issued
a ruling in March 1988 which permitted the RHCs to engage in a number of
information transport functions as well as voice storage and retrieval services,
including voice messaging, electronic mail and certain information gateway
services. However, the RHCs were generally prohibited from providing the
content of the data they transmitted. As the result of an appeal of the D.C.
District Court's September 1987 and March 1988 decisions by the RHCs and other
parties, the United States Court of Appeals for the District of Columbia Circuit
ordered the D.C. District Court to reconsider the RHCs' request to provide
information content and determine whether removal of the restrictions thereon
would be in the public interest. In July 1991, the D.C. District Court removed
the remaining restrictions on RHC participation in information services, but
imposed a stay pending appeal of that decision. In October 1991, the United
States Court of Appeals for the District of Columbia Circuit vacated the stay,
thereby permitting the RHCs to provide information services, and in May 1993
affirmed the D.C. District Court's July 1991 decision. The United States
Supreme Court denied certiorari in November 1993.

Several bills have been introduced in the current session of Congress
pursuant to which the line of business restrictions established by the MFJ could
be eliminated or modified. No definitive prediction can be made as to whether
or when any such legislation will be enacted, the provisions thereof or their
impact on the business or financial condition of the Company.

FCC REGULATION AND INTERSTATE RATES

The Company is subject to the jurisdiction of the Federal Communications
Commission ("FCC") with respect to interstate services and certain related
matters. The FCC prescribes a uniform system of accounts for telephone
companies, interstate depreciation rates and the principles and standard
procedures used to separate plant investment, expenses, taxes and reserves
between those applicable to interstate services under the jurisdiction of the
FCC and those applicable to intrastate services under the jurisdiction of the
respective state regulatory authorities ("separations procedures"). The FCC
also prescribes procedures for allocating costs and revenues between regulated
and unregulated activities.

Interstate Access Charges

The Company provides intraLATA service and does not participate in the
provision of interLATA service except through offerings of exchange access
service. The FCC has prescribed structures for exchange access tariffs to
specify the charges ("Access Charges") for use and availability of the Company's
facilities for the origination and termination of interstate interLATA service.
Access Charges are intended to

3
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

recover the related costs of the Company which have been allocated to the
interstate jurisdiction ("Interstate Costs") under the FCC's separations
procedures.

In general, the tariff structures prescribed by the FCC provide that
Interstate Costs of the Company which do not vary based on usage ("non-traffic
sensitive costs") are recovered from subscribers through flat monthly charges
("Subscriber Line Charges"), and from interexchange carriers through usage-
sensitive Carrier Common Line ("CCL") charges. See "FCC Regulation and
Interstate Rates - FCC Access Charge Pooling Arrangements". Traffic-sensitive
Interstate Costs are recovered from carriers through variable access charges
based on several factors, primarily usage.

In May 1984, the FCC authorized the implementation of Access Charge tariffs
for "switched access service" (access to the local exchange network) and of
Subscriber Line Charges for multiple line business customers (up to $6.00 per
month per line). In 1985, the FCC authorized Subscriber Line Charges for
residential and single-line business customers at the rate of $1.00 per month
per line, which increased in installments to $3.50 effective April 1, 1989.

As a result of the phasing in of Subscriber Line Charges, a substantial
portion of non-traffic sensitive Interstate Costs is now recovered directly from
subscribers, thereby reducing the per-minute CCL charges to interexchange
carriers. This significant reduction in CCL charges has tended to reduce the
incentive for interexchange carriers and their high-volume customers to bypass
the Company's switched network via special access lines or alternative
communications systems. However, competition for this access business has
increased in recent years. See "Competition - Alternative Access and Local
Services".

FCC Access Charge Pooling Arrangements

The FCC previously required that all LECs, including the Company, pool
revenues from CCL and Subscriber Line Charges that cover the non-traffic
sensitive costs of the local exchange network, that is, the Interstate Costs
associated with the lines from subscribers' premises to telephone company
central offices. To administer such pooling arrangements, the FCC mandated the
formation of the National Exchange Carrier Association, Inc. Some LECs received
more revenue from the pool than they billed their interexchange carrier
customers using the nationwide average CCL rate. Other companies, including the
Company, received substantially less from the pool than the amount billed to
their interexchange carrier customers.

By an order adopted in 1987, the FCC changed its mandatory pooling
requirements. These changes, which became effective April 1, 1989, permitted all
of the Network Services Companies as a group to withdraw from the pool and to
charge CCL rates which more closely reflect their non-traffic sensitive costs.
The Network Services Companies, including the Company, are still obligated to
make contributions of CCL revenues to companies who choose to continue to pool
non-traffic sensitive costs so that the pooling companies can charge a CCL rate
no greater than the nationwide average CCL rate. In addition to this continuing
obligation, the Network Services Companies, including the Company, have a
transitional support obligation to high cost companies who left the pool in 1989
and 1990. This transitional support obligation phases out over five years. These
long-term and transitional support requirements will be recovered in the Network
Services Companies' (including the Company's) CCL rates.

Depreciation

Depreciation rates provide for the recovery of the Company's investment in
telephone plant and equipment, and are revised periodically to reflect more
current estimates of remaining service lives and future net salvage values. In
October 1993, the FCC issued an order, simplifying the depreciation filing
process by reducing the information required for certain categories of plant and
equipment whose remaining service life, salvage estimates and depreciation
rates fall within an approved range. Petitions for reconsideration of that order
were filed in December 1993. In November 1993, the FCC issued a further order
inviting comments on proposed ranges for an initial group of categories of plant
and equipment.

4
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

Price Caps

In September 1990, the FCC adopted "price cap" regulation to replace the
traditional rate of return regulation of LECs. LEC price cap regulation became
effective on January 1, 1991.

The price cap system places a cap on overall prices for interstate services
and requires that the cap decrease annually, in inflation-adjusted terms, by a
fixed percentage which is intended to reflect expected increases in
productivity. The price cap level can also be adjusted to reflect "exogenous"
changes, such as changes in FCC separations procedures or accounting rules.
LECs subject to price caps have somewhat increased flexibility to change the
prices of existing services within certain groupings of interstate services,
known as "baskets".

Under price cap regulation, the FCC set an authorized rate of return of
11.25% for the years 1991 and beyond. To the extent that a company is able to
earn a higher rate of return through improved efficiency, the FCC's price cap
rules permit them to retain the full amount of this higher return up to 100
basis points above the authorized rate of return (currently, up to a 12.25% rate
of return). If a company's rate of return is between 100 and 500 basis points
above the authorized rate of return (that is, currently, between 12.25% and
16.25%), the company must share 50% of the earnings above the 100-basis-point
level with customers by reducing rates prospectively. All earnings above the
500-basis-point level must be returned to customers in the form of prospective
rate decreases. If, on the other hand, a company's rate of return is more than
100 basis points below the authorized rate of return (that is, currently, below
10.25%), the company is permitted to increase rates prospectively to make up the
deficiency.

Under FCC-approved tariffs, the Network Services Companies are charging
uniform rates for interstate access services (with the exception of Subscriber
Line Charges) throughout their service areas and are regarded as a single unit
by the FCC for rate of return measurement.

On February 16, 1994, the FCC initiated a rulemaking proceeding to determine
the effectiveness of LEC price cap rules and decide what changes, if any, should
be made to those rules. This rulemaking is expected to be concluded by the end
of 1994.

In January 1993, the FCC denied the Company exogenous treatment of the
increased expense for postretirement benefits required under Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions", which the Company adopted
effective January 1, 1991. The Company has appealed this decision. The appeal
is likely to be decided during the second half of 1994.

Computer Inquiry III

In August 1985, the FCC initiated Computer Inquiry III to re-examine its
regulations requiring that "enhanced services" (e.g., voice messaging services,
electronic mail, videotext gateway, protocol conversion) be offered only through
a structurally separated subsidiary. In 1986, the FCC eliminated this
requirement, permitting the Company to offer enhanced services, subject to
compliance with a series of nonstructural safeguards designed to promote an
effectively competitive market. These safeguards include detailed cost
accounting, protection of customer information and certain reporting
requirements.

In June 1990, the United States Court of Appeals for the Ninth Circuit
vacated and remanded the Computer Inquiry III decisions to the FCC, finding that
the FCC had not fully justified those decisions. In December 1991, the FCC
adopted an order which reinstated relief from the separate subsidiary
requirement upon a company's compliance with the FCC's Computer III Open Network
Architecture ("ONA") requirements and strengthened some of the nonstructural
safeguards. In the interim, the Network Services Companies, including the
Company, had filed interstate tariffs implementing the ONA requirements. Those
tariffs became effective in February 1992, subject to further investigation.
That investigation was completed on December 15, 1993, when an order was
released making minor changes to the Network Services Companies' ONA rates. In
March 1992, the Company certified to the FCC that it had complied with all
initial ONA obligations and therefore should be granted structural relief for
enhanced services. The FCC granted the Company structural relief in June 1992.
Other parties have appealed this

5
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

decision, which remains in effect pending the outcome of the appeal. A decision
on the appeal is likely by the end of 1994.

The FCC's December 1991 order has been appealed to the United States Court
of Appeals for the Ninth Circuit by several parties. Pending decision on those
appeals, the FCC's decision remains in effect. If a court again reverses the
FCC, the Company's right to offer enhanced services could be impaired.

FCC Cost Allocation and Affiliate Transaction Rules

In 1987, the FCC adopted rules governing (i) the allocation of costs between
the regulated and unregulated activities of a communications common carrier and
(ii) transactions between the regulated and unregulated affiliates of a
communications common carrier.

The cost allocation rules apply to certain unregulated activities:
activities that have never been regulated as communications common carrier
offerings and activities that have been preemptively deregulated by the FCC.
The costs of these activities are removed prior to the separations procedures
process and are allocated to unregulated activities in the aggregate, not to
specific services for pricing purposes. Other activities must be accounted for
as regulated activities, and their costs are subject to separations procedures.
These activities include (i) those which have been deregulated by the FCC
without preempting state regulation, (ii) those which have been deregulated by a
state but not the FCC and (iii) "incidental activities," which cannot, in the
aggregate, generate more than 1% of a company's revenues. Since the Network
Services Companies, including the Company, engaged in these types of activities,
the Network Services Companies, including the Company, pursuant to the FCC's
cost allocation rules, filed a cost allocation manual, which has been approved
by the FCC.

The affiliate transaction rules govern the pricing of assets transferred to
and services provided by affiliates. These rules generally require that assets
be transferred between affiliates at "market price", if such price can be
established through a tariff or a prevailing price actually charged to third
parties. In the absence of a tariff or prevailing price, "market price" cannot
be established, in which case (i) asset transfers from a regulated to an
unregulated affiliate must be valued at the higher of cost or fair market value,
and (ii) asset transfers from an unregulated to a regulated affiliate must be
valued at the lower of cost or fair market value. The affiliate transaction
rules require that a service provided by one affiliate to another affiliate,
which service is also provided to unaffiliated entities, must be valued at
tariff rates or market prices. If the affiliate does not also provide the
service to unaffiliated entities, the price must be determined in accordance
with the FCC's cost allocation principles. In October 1993, the FCC proposed
new affiliate transaction rules which would essentially eliminate the different
rules for the provision of services and apply the asset transfer rules to all
affiliate transactions. The Network Services Companies, including the Company,
have filed comments opposing the proposed rules.

The FCC has not attempted to make its cost allocation or affiliate
transaction rules preemptive. State regulatory authorities are free to use
different cost allocation methods and affiliate transaction rules for intrastate
ratemaking and to require carriers to keep separate allocation records.

Telephone Company Provision of Video Dial Tone and Video Programming

In 1987, the FCC initiated an inquiry into whether developments in the cable
and telephone industries warranted changes in the rules prohibiting telephone
companies such as the Company from providing video programming in their
respective service territories directly or indirectly through an affiliate.

In November 1991, the FCC released a Further Notice of Proposed Rulemaking
in these proceedings. In August 1992, the FCC issued an order permitting
telephone companies such as the Company to provide "video dial tone" service.
Video dial tone permits telephone companies to provide video transport to
multiple programmers on a non-discriminatory common carrier basis. The FCC has
also ruled that neither telephone companies that provide video dial tone
service, nor video programmers that

6
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

use these services, are required to obtain local cable franchises. Other
parties have appealed these orders, which remain in effect pending the outcome
of the appeal.

In December 1992, two Bell Atlantic Companies, the Company and Bell Atlantic
Video Services Company, filed a lawsuit against the federal government in the
United States District Court for the Eastern District of Virginia seeking to
overturn the prohibition in the Cable Communications Policy Act of 1984 against
LECs providing video programming in their respective service areas. In a
decision rendered in August 1993 and clarified in October 1993, the court struck
down this prohibition as a violation of the First Amendment's freedom of speech
protections and enjoined its enforcement against Bell Atlantic, the Network
Services Companies, including the Company, and Bell Atlantic Video Services
Company. This decision has been appealed to the United States Court of Appeals
for the Fourth Circuit.

In early 1993, the FCC granted Bell Atlantic authority to test a new
technology known as Asynchronous Digital Subscriber Line ("ADSL") for use in
delivering video entertainment and information over existing copper telephone
lines. Beginning in March 1993, Bell Atlantic began a one-year technical trial
of ADSL serving up to 400 Bell Atlantic employees in northern Virginia. In the
Fall of 1993, Bell Atlantic petitioned the FCC for authorization to expand and
convert this technical trial upon its completion into a six month market trial
serving up to 2,000 customers. Bell Atlantic also requested authority to offer a
commercial video dial tone service to customers served by 25 central offices in
parts of northern Virginia and southern Maryland upon completion of the six
month market trial. These applications are pending at the FCC.

Interconnection and Collocation

In October 1992, the FCC issued an order allowing third parties to collocate
their equipment in telephone company offices to provide special access (private
line) services to the public. The FCC's stated purpose was to encourage greater
competition in the provision of interstate special access services. The order
permits collocating parties to pay LECs an interconnection charge that is lower
than the existing tariffed rates for similar non-collocated services; it allows
LECs limited additional pricing flexibility for their own special access
services when collocated interconnection is operational. In February 1993, Bell
Atlantic's seven telephone subsidiaries, including the Company, filed an
interstate tariff to allow collocation for special access services. This tariff
is currently effective. Bell Atlantic and certain other parties have appealed
the FCC's special access collocation order. Bell Atlantic expects the appeal to
be decided in 1994.

On September 2, 1993, the FCC extended collocation to switched access
services. The terms and conditions for switched access collocation are similar
to those for special access collocation. On November 18, 1993, Bell Atlantic's
seven telephone subsidiaries, including the Company, filed an interstate tariff
to allow collocation for switched access services. This tariff became effective
on February 16, 1994. Bell Atlantic and certain other parties have appealed the
FCC's switched access collocation order. Appeals of this order have been stayed
pending a decision on the appeals of the special access collocation order.

Increased competition through collocation will adversely affect the revenues
of the Company, although some of the lost revenues could be offset by increased
demand of the Company's own special access services as a result of the slightly
increased pricing flexibility that the FCC has permitted. 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.

Intelligent Networks

In December 1991, the FCC issued a Notice of Inquiry into the plans of the
BOCs, including the Company, to deploy new "modular" network architectures, such
as Advanced Intelligent Network ("AIN") technology. The Notice of Inquiry asks
what, if any, regulatory action the FCC should take to assure that such
architectures are deployed in a manner that is "open, responsive, and
procompetitive". On August 31, 1993, the FCC issued a Notice of Proposed
Rulemaking proposing a schedule for AIN deployment. The proposals in that
Notice of Proposed Rulemaking generally follow those that Bell

7
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

Atlantic proposed in its response to the Notice of Inquiry. The Company cannot
estimate when the FCC will conclude this proceeding.

The results of this proposed rulemaking could include a requirement that the
Company offer individual components of its services, such as switching and
transport, to competitors who will provide the remainder of such services
through their own facilities. Such increased competition could divert revenues
from the Company. However, deployment of AIN technology may also enable the
Company to respond more quickly and efficiently to customer requests for new
services. This could result in increased revenues from new services that could
at least partially offset losses resulting from increased competition.

STATE REGULATION AND INTRASTATE RATES

The communications services of the Company are subject to regulation by the
Virginia State Corporation Commission (the "SCC") with respect to intrastate
rates and services and other matters.

In December 1988, the SCC adopted an Experimental Plan for Alternative
Regulation (the "Experimental Plan") of Virginia telephone companies. The
Company elected to participate in the Experimental Plan effective January 1,
1989, and remained subject to it through the end of 1993. The Experimental Plan
marked a departure from traditional regulation and classified services into four
categories: actually competitive, potentially competitive, discretionary and
basic. Combined earnings from potentially competitive, discretionary and basic
services were capped at a 14% return on equity.

The Company's financial results under the Experimental Plan for the years
1989 through 1992 have been filed with the SCC. The SCC's audit of the Company's
1989 and 1990 financial results found no refunds to be due. The Company's
financial results for 1991 and 1992, which as filed with the SCC indicate that
no refunds are due, are still subject to SCC audit.

Following an evaluation of the Experimental Plan in 1993, the SCC issued an
order on December 17, 1993 adopting a Modified Plan for Alternative Regulation
(the "Modified Plan"). The Modified Plan became effective January 1, 1994. The
Company is deemed by the SCC to be subject to this Modified Plan.

The Modified Plan places the Company's services into one of three
categories:

- "Competitive" services for which there are readily available substitutes
which reasonably meet customer needs and for which competition in the
marketplace effectively regulates the price (e.g., Centrex intercom services,
directory advertising).

- "Discretionary" services which can only be provided by the local
exchange telephone company, but which are optional, nonessential enhancements to
basic communications services or services which others are capable of providing
but which do not conform to the competitive services definition (e.g., Caller ID
and operator call completion services).

- "Basic" services which are not discretionary and, due to their nature or
legal/regulatory restraints, only the local exchange telephone companies can
provide (e.g., residential and business local exchange telephone service and
operator directory assistance service).

The latter two categories of services are subject to rate of return
regulation. For 1994, the SCC has established a permissible range for return on
equity for these two regulated services of 10.55% to 12.55%. In assessing
whether earnings have exceeded this permitted range, the SCC will impute to
regulated earnings an amount equal to 25% of the net profits of Yellow Pages
advertising, which the SCC will otherwise continue to treat as a competitive
service under the Modified Plan. If the Company's earnings on this basis exceed
the permitted range, refunds of the excess must be made. If the Company were to
seek an increase in rates for Basic service that, taking into account rate
changes in Discretionary services, results in an increase in overall regulated
operating revenue, the financial performance considered

8
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

by the SCC would include results for all categories of services. Earnings from
Competitive services are not otherwise regulated.

In its Final Order of December 17, 1993, the SCC also announced its
intention to hold a proceeding in the first half of 1994 to consider further
modifications to the Modified Plan or alternative regulatory plans that local
exchange companies might offer. Under legislation passed in the 1993 session of
the Virginia General Assembly, the SCC is no longer statutorily required to
regulate telephone companies on the basis of rate of return regulation; for
example, the SCC is free to adopt a price cap form of regulation. On February
8, 1994, the Company filed a proposal in this new proceeding to have its
Discretionary and Basic services regulated on a price cap basis; competitive
services would not be regulated. The Company's proposal will be discussed in
hearings to begin in late April 1994.

NEW PRODUCTS AND SERVICES

During the 1990's, Bell Atlantic - Virginia introduced many of the
IQ(SM) Services family of calling features, which include Identa Ring(SM)
-----------
which allows a single line to have multiple telephone numbers, each with a
distinctive ring; Repeat Call, which allows customers automatically to redial
-----------
busy phone numbers; Return Call, which allows customers automatically to return
-----------
the last incoming call, even without knowing the number; Ultra Forward(SM)
-------------
which customers can use to program call-forwarding instructions; Home Intercom,
-------------
which allows for phone-to-phone dialing within the home; and Caller ID, which
---------
displays the telephone number of the calling party. Further augmenting this
growing array of IQ(SM) Services, a Caller ID Deluxe technical trial commenced
----------------
in late 1993 and has been expanded to a market trial in the Richmond area in
1994. Caller ID Deluxe enhances the already available Caller ID service by
providing the name, as well as the number, of a calling party.

In 1993, the Company continued to expand its high speed data transmission
family of services with the availability of Frame Relay Service and Fiber
Distributed Data Interfacer Network Service. These services join Switched
Multi-Megabit Data Services, the first high-speed, public, packet-switched data
transmission service, which was introduced in 1992.

Integrated Service Digital Network (ISDN) service for Centrex was introduced
in December 1991. ISDN service was introduced generally in 1993 with IntelliLinQ
Basic Rate Interface and IntelliLinQ Primary Rate Interface (PRI) services. ISDN
services provide for simultaneous transport of voice, data and images.

In recognition of the growing work-at-home market, Home Business Service was
initiated in October 1993. This new offering provides a hybrid
residence/business service for customers requiring both a residence and business
listing. Calls are distinguished by distinctive ringing patterns.

COMPETITION

Regulatory proceedings, as well as new technology, are continuing to expand
the types of available communications services and equipment and the number of
competitors offering such services. 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.

Alternative Access and Local Services

A substantial portion of the Company's revenues from business and government
customers is derived from a relatively small number of large, multiple-line
subscribers.

The Company faces competition from alternative communications systems,
constructed by large end users, interexchange carriers and alternative access
vendors, which are capable of originating and/or terminating calls without the
use of the local telephone company's plant. In the Virginia suburbs of
Washington, D.C., Institutional Communications Company has deployed an optical
fiber network to compete with the Company in the provision of switched and
special access services and local services. In July 1993, Virginia Metrotel,
Inc. was granted authority by the SCC to compete

9
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

against the Company in the provision of access services in the Richmond
metropolitan area.

The ability of such alternative access providers to compete with the Company
has been enhanced by the FCC's orders requiring the Company to offer collocated
interconnection for special and switched access services.

Other potential sources of competition are cable television systems, shared
tenant services and other non-carrier systems which are capable of bypassing the
Company's local plant, either partially or completely, through substitution of
special access for switched access or through concentration of
telecommunications traffic on fewer of the Company's lines.

Well-financed competitors are seeking authority, or are likely soon to seek
authority, to offer competing local exchange services, such as dial tone and
local usage, in some of the most lucrative of the Company's local telephone
service areas. Southwestern Bell Corporation ("Southwestern Bell") acquired
existing cable television systems in Arlington, Virginia. Southwestern Bell
could use these systems to compete with the Company's telephone services in
these areas. Southwestern Bell also provides cellular service in the Washington,
D.C. metropolitan area.

The two largest long-distance carriers are also positioning themselves to
begin to offer services that will compete with the Company's local exchange
services. In November 1992, AT&T announced its intention to acquire a
controlling interest in McCaw Cellular Communications Inc. ("McCaw"), the
largest cellular company in the United States, and to integrate McCaw's wireless
local service network with AT&T's long distance network. In December 1993, MCI
Communications Corporation ("MCI") announced its intention to invest $2 billion
to begin building competing local exchange and access networks in twenty major
markets in the United States, some of which are likely to be in the Company's
service territory. In March 1994, MCI also announced its intention to acquire a
substantial interest in Nextel Communications Inc. (formerly Fleet Call Inc.),
and to integrate Nextel's wireless local service network with MCI's long
distance network in at least 10 major markets, one or more of which might be in
the Company's service territory.

The entry of these and other local exchange service competitors will almost
certainly reduce the local exchange service revenues of the Company, at least in
the market segments and geographical areas in which the competitors operate.
Depending on such competitors' success in marketing their services, and the
conditions of interconnection established by the regulatory commissions, these
reductions could be significant. These revenue reductions may be offset to some
extent by revenues from interconnection charges to be paid to the Company by
these competitors.

The Company seeks to meet such competition by establishing and/or
maintaining competitive cost-based prices for local exchange services (to the
extent the FCC and state regulatory authorities permit the Company's prices to
move toward costs), by keeping service quality high and by effectively
implementing advances in technology. See "FCC Regulation and Interstate Rates -
Interstate Access Charges" and "- FCC Access Charge Pooling Arrangements".

Personal Communications Services

Radio-based personal communications services ("PCS") also constitute
potential sources of competition to the Company. PCS consists of wireless
portable telephone services which would allow customers to make and receive
telephone calls from any location using small handsets, and which could also be
used for data transmission. The FCC has authorized trials of such services,
using a variety of technologies, by numerous companies.

In September 1993, the FCC issued a report and order allocating radio
spectrum to be licensed for use in providing PCS. Under the order, seven
separate bandwidths of spectrum, ranging in size from 10 MHz to 30 MHz, would be
auctioned to potential PCS providers in each geographic area of the United
States; five of the spectrum blocks would be auctioned by "basic trading area"
and the remaining two would be auctioned by larger "major trading area" (as such
trading areas are defined by Rand McNally). LECs and companies with LEC
subsidiaries, such as Bell Atlantic are

10
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

eligible to bid for PCS licenses, except that cellular carriers such as Bell
Atlantic are limited to obtaining only 10 MHz of PCS bandwidth in areas where
they provide cellular service. Bidders other than cellular providers may obtain
multiple licenses aggregating up to 40 MHz of bandwidth in any area. Bell
Atlantic has stated that it intends to pursue PCS licenses in the auctions,
which are expected to be held in 1994 or in early 1995.

In December 1993, the FCC awarded pioneer's preference PCS licenses to,
among other entities, American Personal Communications ("APC"), which is owned
in part by The Washington Post Company. APC's license authorizes it to provide
PCS service in competition with the local exchange services of the Network
Services Companies in all or large portions of Pennsylvania, the District of
Columbia, Maryland, Virginia and West Virginia. APC has announced its intention
to build out an operational system by the first quarter of 1995.

If implemented, PCS and other similar services would compete with services
currently offered by the Company, and could result in losses of revenues.

Centrex

The Company offers Centrex service, which is a telephone company central
office-based communications system for business, government and other
institutional customers consisting of a variety of integrated software-based
features located in a centralized switch or switches and extended to the
customer's premises primarily via local distribution facilities. In the
provision of Centrex, the Company is subject to significant competition from the
providers of CPE systems, such as private branch exchanges ("PBXs"), which
perform similar functions with less use of the Company's switching facilities.

Users of Centrex systems generally require more subscriber lines than users
of PBX systems of similar capacity. The FCC increased the maximum Subscriber
Line Charge on embedded Centrex lines to $6.00 per month per line effective
April 1, 1989. Increases in Subscriber Line Charges result in Centrex users
incurring higher charges than users of comparable PBX systems. In Virginia, the
intercom portion of Centrex service has been detariffed. This enables the
Company to charge rates for these services which offset the effects of such
higher Subscriber Line Charges.

IntraLATA Toll Competition

The ability of interexchange carriers to engage in the provision of
intrastate intraLATA toll service in competition with the Company is subject to
state regulation. The SCC has instituted a proceeding to consider whether and
on what terms to permit intraLATA competition in Virginia.

Directories

The Company continues to face significant competition from other providers
of directories as well as competition from other advertising media. In
particular, the former sales representative of several of the Network Services
Companies, including the Company, publishes directories in competition with
those published by the Company in its service territory.

Public Telephone Services

The Company faces increasing competition in the provision of pay telephone
services from other pay telephone service providers. In addition, the growth of
wireless communications negatively impacts usage of public telephones.

11
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

Operator Services

Alternative operator services providers have entered into competition with
the Company's operator services product line.

CERTAIN CONTRACTS AND RELATIONSHIPS

Certain planning, marketing, procurement, financial, legal, accounting,
technical support and other management services are provided on behalf of the
Company on a centralized basis by Bell Atlantic's wholly owned subsidiary, Bell
Atlantic Network Services, Inc. ("NSI"). Bell Atlantic Network Funding
Corporation provides short-term financing and cash management services to the
Company.

The seven RHCs each own (directly or through subsidiaries) a one-seventh
interest in Bell Communications Research, Inc. ("Bellcore"). Pursuant to the
Plan, Bellcore furnishes the RHCs and their BOC subsidiaries with technical
assistance such as network planning, engineering and software development, as
well as various other consulting services that can be provided more effectively
on a centralized basis. Bellcore is the central point of contact for
coordinating the efforts of the RHCs in meeting the national security and
emergency preparedness requirements of the federal government. It also helps to
mobilize the combined resources of the RHCs in times of natural disasters.

EMPLOYEE RELATIONS

As of December 31, 1993, the Company employed approximately 7,800 persons,
including employees of the centralized staff at NSI. This represents
approximately a 4% increase from the number of employees at December 31, 1992.

The Company's workforce is augmented by members of the centralized staff of
NSI, who perform services for the Company on a contract basis.

Approximately 87% of the employees of the Company are represented by the
Communications Workers of America union, which is affiliated with the American
Federation of Labor-Congress of Industrial Organizations.

Under the terms of the three-year contracts ratified in October 1992 by
unions representing associate employees of the Network Services Companies,
including the Company, and NSI, represented associates received a base wage
increase of 3.74% in August 1993. Under the same contracts, associates received
a Corporate Profit Sharing payment of $495 per person in 1994 based upon
Bell Atlantic's 1993 financial performance.

12
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

ITEM 2. PROPERTIES

The principal properties of the Company do not lend themselves to simple
description by character and location. At December 31, 1993, the Company's
investment in plant, property and equipment consisted of the following:

<TABLE>
<S> <C>
Connecting lines .................. 42%
Central office equipment .......... 42
Land and buildings ................ 6
Telephone instruments and
related equipment ................ 2
Other ............................. 8
---
100%
===
</TABLE>

"Connecting lines" consists primarily of aerial cable, underground cable,
poles, conduit and wiring. "Central office equipment" consists of switching
equipment, transmission equipment and related facilities. "Land and buildings"
consists of land owned in fee and improvements thereto, principally central
office buildings. "Telephone instruments and related equipment" consists
primarily of public telephone terminal equipment and other terminal equipment.
"Other" property consists primarily of furniture, office equipment, vehicles and
other work equipment, capital leases, leasehold improvements and plant under
construction.

The Company's central offices are served by various types of switching
equipment. At December 31, 1993 and 1992, the number of local exchanges and the
percent of subscriber lines served by each type of equipment were as follows:

<TABLE>
<CAPTION>
1993 1992
---------------------------- ---------------------------
# OF LOCAL % OF SUBSCRIBER # OF LOCAL % OF SUBSCRIBER
EXCHANGES LINES SERVED EXCHANGES LINES SERVED
---------- --------------- ---------- ---------------
<S> <C> <C> <C> <C>
Digital.. 520 67.4 451 60.7
Analog... 207 32.6 242 39.3
Other.... 1 -- 1 --
---- ---- --- ----
728 100 694 100
==== ==== === ====
</TABLE>

13
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

ITEM 3. LEGAL PROCEEDINGS

PRE-DIVESTITURE CONTINGENT LIABILITIES AND LITIGATION

The Plan provides for the recognition and payment by AT&T and the former
BOCs (including the Company) of liabilities that are attributable to pre-
Divestiture events but do not become certain until after Divestiture. These
contingent liabilities relate principally to litigation and other claims with
respect to the former Bell System's rates, taxes, contracts and torts (including
business torts, such as alleged violations of the antitrust laws). Except to
the extent that affected parties otherwise agree, contingent liabilities that
are attributable to pre-Divestiture events are shared by AT&T and the BOCs in
accordance with formulas prescribed by the Plan, whether or not an entity was a
party to the proceeding and regardless of whether an entity was dismissed from
the proceeding by virtue of settlement or otherwise. Each company's allocable
share of liability under these formulas depends on several factors, including
the type of contingent liability involved and each company's relative net
investment as of the effective date of Divestiture. Under the formula generally
applicable to most of the categories of these contingent liabilities, the
Company's aggregate allocable share of liability is approximately 1.6%.

AT&T and various of its subsidiaries and the BOCs (including, in some cases,
the Company) have been and are parties to various types of litigation relating
to pre-Divestiture events, including actions and proceedings involving
environmental claims and allegations of violations of equal employment laws.
Damages, if any, ultimately awarded in the remaining actions relating to pre-
Divestiture events could have a financial impact on the Company whether or not
the Company is a defendant since such damages will be treated as contingent
liabilities and allocated in accordance with the allocation rules established by
the Plan.

While complete assurance cannot be given as to the outcome of any contingent
liabilities or litigation, in the opinion of the Company's management, any
monetary liability or financial impact to which the Company would be subject
after final adjudication of all of the remaining potential or actual pre-
Divestiture claims would not be material in amount to the financial position of
the Company.

14
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

PART I

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(Omitted pursuant to General Instruction J(2).)

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(Inapplicable.)

ITEM 6. SELECTED FINANCIAL DATA

(Omitted pursuant to General Instruction J(2).)

15
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
(Abbreviated pursuant to General Instruction J(2).)

This discussion should be read in conjunction with the Financial Statements
and Notes to Financial Statements as listed in the index set forth on page F-1.

RESULTS OF OPERATIONS

Net income for 1993 decreased $23,435,000 or 9.1% from the same period last
year. Results in 1993 reflect an after-tax charge of $9,205,000 for the
adoption of Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits" (Statement No. 112) and an extraordinary
charge, net of tax, of $9,734,000 for the early extinguishment of debt. Results
for 1992 included an $11,655,000 extraordinary charge, net of tax, for the early
extinguishment of debt.

OPERATING REVENUES

Operating revenues increased $81,099,000 or 4.6% in 1993. The increase in
total operating revenues was comprised of the following:

<TABLE>
<CAPTION>
(Dollars In Thousands)
----------------------
<S> <C>
Local service ........................... $36,287
Network access .......................... 20,755
Toll service ............................ 5,360
Directory advertising,
billing services and other ............ 19,617
Less: Provision for uncollectibles ...... 920
-------
$81,099
=======
</TABLE>

Local service revenues are earned from the provision of local exchange, local
private line, and public telephone services. Local service revenues increased
$36,287,000 or 4.2% in 1993. The increase resulted primarily from growth in
network access lines and higher demand for value-added central office services
such as Custom Calling and Caller ID. The growth in access lines in service was
89,500 lines or a 3.3% increase in 1993.

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
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 increased $20,755,000 or 4.1% in 1993, primarily due
to lower support payments to the National Exchange Carrier Association (NECA)
interstate common line pool and an 8.2% growth in access minutes of use. Also
contributing to this increase were higher end-user revenues, principally due to
growth in network access lines in service. These increases were partially
offset by the net effect of interstate rate reductions filed by the Company with
the Federal Communications Commission (FCC), which became effective on July 2,
1993 and July 1, 1992, and by related estimated price cap sharing liabilities.

Toll service revenues are earned from interexchange usage services such as
Message Toll Services (MTS) and Unidirectional Services (Wide Area
Telecommunications Services (WATS) and 800 services). Toll service revenues
increased $5,360,000 or 4.3% in 1993. Total toll message volume growth was 7.8%
in 1993. Volume-related message toll service revenue increases were partially
offset in 1993 by declines in revenues from WATS and private line services,
principally due to competitive pressures.

Directory advertising, billing services and other revenues include amounts
earned from directory advertising, billing and collection services provided to
IXCs, premises services such as inside wire installation and maintenance, rent
of Company facilities by affiliates and non-affiliates, and certain nonregulated
enhanced network services.

16
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

Directory advertising, billing services and other revenues in 1993 increased
$19,617,000 or 7.2% in 1993, principally due to higher revenues from directory
advertising, premises services and Answer Call, a nonregulated enhanced network
service. Directory advertising revenue growth was adversely impacted by
decreasing sales volume attributable primarily to competition. Revenues from
premises services and Answer Call increased principally as a result of higher
demand for these services. These revenue increases were partially offset by
declines in billing and collection revenues resulting from reductions in
services provided under long-term contracts with certain IXCs.

The provision for uncollectibles, expressed as a percentage of total
revenue, was .8% in 1993 and 1992.

OPERATING EXPENSES

Operating expenses increased $88,003,000 or 6.9% in 1993. The increase in
total operating expenses was comprised of the following:

<TABLE>
<CAPTION>
(Dollars In Thousands)
----------------------
<S> <C>
Employee costs .......................... $22,163
Depreciation and amortization ........... 54,318
Taxes other than income ................. 1,125
Other ................................... 10,397
-------
$88,003
=======
</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 increased $22,163,000 or
6.0% in 1993. Higher employee costs from salary and wage increases and overtime
were offset in part by savings resulting from workforce reduction programs
implemented in 1992.

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 increased $54,318,000 or 16.7% in 1993,
primarily due to additional expense resulting from represcribed depreciation
rates for certain classes of telephone plant. Also contributing to the increase
was growth in the level of depreciable plant in 1993.

Taxes other than income increased $1,125,000 or 2.2% in 1993, due to an
increase in property taxes as a result of higher property assessments and rates.

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 $10,397,000 or 1.9% in 1993. The increase is principally due to
increased costs for contracted services as a result of higher employee costs and
taxes allocated from NSI, and higher software costs associated with enhancing
the Company's network. These increases were offset in part by lower costs for
other contracted services resulting from the Company's continued cost
containment measures during 1993.

OPERATING INCOME TAXES

The provision for income taxes increased $11,591,000 or 9.4% in 1993. The
Company's effective income tax rate was 34.4% in 1993 compared to 31.5% in 1992.
The increase in the 1993 effective tax rate is principally the result of federal
tax legislation enacted in 1993, which increased the federal corporate tax rate
from 34% to 35%, and the effect of recording in 1992 an adjustment to deferred
taxes associated with the retirement of certain plant investment. A
reconciliation of the statutory federal income tax rate to the effective rate
for each period is provided in Note 5 of Notes to Financial Statements.

17
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (Statement No. 109).
In connection with the adoption of Statement No. 109, the Company recorded a
charge to income of $211,000 in the first quarter of 1993 (see Note 5 of Notes
to Financial Statements).

OTHER INCOME AND EXPENSE

Other income, net of expense, decreased $4,488,000 in 1993, primarily due to
the effect of interest income recognized in 1992 in connection with the
settlement of various federal income tax matters related to prior periods.

INTEREST EXPENSE

Interest expense decreased $6,832,000 or 8.6% in 1993, principally due to
the effects of lower average short-term debt levels, lower interest rates and
long-term debt refinancings.

EXTRAORDINARY ITEM

The Company called $300,000,000 in 1993 of long-term debentures which were
refinanced at more favorable interest rates. As a result of these early
retirements, the Company incurred after-tax charges of $9,734,000 in 1993.
These debt refinancings will reduce interest costs on the refinanced debt by
approximately $5,400,000 annually.

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE

In connection with the adoption of Statement No. 112, effective January 1,
1993, the Company recorded a one-time, cumulative effect after-tax charge of
$9,205,000 in 1993 (see Note 4 of Notes to Financial Statements).

The adoption of Statement No. 112 did not have a significant effect on the
Company's ongoing level of expense in 1993 and is not expected to have a
significant effect in future periods.

COMPETITION AND REGULATORY ENVIRONMENT

The telecommunications industry is currently undergoing fundamental changes
which may have a significant impact on future financial performance of all
telecommunications companies. These changes are driven by a number of factors,
including the accelerated pace of technology change, customer requirements, a
changing industry structure characterized by strategic alliances and the
convergence of telecommunications and cable television, and a changing
regulatory environment in which traditional regulatory barriers are being
lowered and competition encouraged.

The convergence of cable television, computer technology, and
telecommunications can be expected to dramatically increase competition in the
future. The Company is already subject to competition from numerous sources,
including competitive access providers for network access services, competing
cellular telephone companies and others.

During 1993, a number of business alliances were announced that have the
potential to significantly increase competition both within the industry and
within the areas currently served by Bell Atlantic. Over the past several years,
Bell Atlantic has taken a number of actions in anticipation of the increasingly
competitive environment. Cost reductions have been achieved, giving greater
pricing flexibility for services exposed to competition. A new lines of business
organization structure was adopted. Subject to regulatory approval, the Company
plans to allocate capital resources to the deployment of broadband network
platforms. On the regulatory front, the Company has achieved alternative
regulation which permits the Company to be regulated under price cap regulation,
rather than the traditional rate of return regulation.
18
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

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
decisions by the Company to accelerate deployment of new technology, in response
to specific regulatory actions 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.

In September 1993, the FCC issued a report and order allocating radio
spectrum to be licensed for use in providing personal communications services
(PCS). Under the order, seven separate bandwidths of spectrum, ranging in size
from 10 MHz to 30 MHz, would be auctioned to potential PCS providers in each
geographic area of the United States. The geographical units by which the
licenses would be allocated will be "basic trading areas" or larger "major
trading areas." Five of the spectrum blocks are to be auctioned on a basic
trading area basis, and the remaining two are to be auctioned by major trading
area. Local exchange carriers such as the Company are eligible to bid for PCS
licenses, except that cellular carriers are limited to obtaining 10 MHz of PCS
bandwidth in areas where they provide cellular service. Bidders other than
cellular providers may obtain multiple licenses aggregating up to 40 MHz of
bandwidth in any area. Bell Atlantic has stated that it intends to pursue PCS
licenses in the auctions, which are expected to be held in 1994.

In August 1993, the United States District Court for the Eastern District of
Virginia ruled unconstitutional the 1984 Cable Act's limitation on in-territory
provision of programming by local exchange carriers such as the Company. The
Cable Act currently prohibits local exchange carriers from owning more than 5%
of any company that provides cable programming in their local service area. In
a case originally brought by the Company and another Bell Atlantic subsidiary,
the court ruled that this prohibition violates the First Amendment's freedom of
speech protections, and enjoined enforcement of the prohibition against the
Company and other Bell Atlantic telephone subsidiaries. The ruling has been
appealed.

STATE REGULATORY ENVIRONMENT

The communications services of the Company are subject to regulation by the
Virginia State Corporation Commission (the "SCC") with respect to intrastate
rates and services and other matters.

19
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

The Modified Plan places the Company's services into one of three categories:

OTHER MATTERS

The Company has been designated as a potentially responsible party by the
U.S. Environmental Protection Agency in connection with two Superfund sites.
Designation as a potentially responsible party subjects the named company to
potential liability for costs relating to cleanup of the affected sites.
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 operating 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.

20
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

During 1993, as in prior years, the Company's primary source of funds
continued to be cash generated from operations. Revenue growth, cost
containment measures and savings on interest costs contributed to cash provided
from operations of $602,583,0000 for the year ended December 31, 1993.

The primary use of capital resources continued to be capital expenditures.
The Company invested $360,399,000 in 1993 in the network. This level of
investment is expected to continue in 1994. The Company plans to allocate
capital resources to the deployment of broadband network platforms, subject to
regulatory approval.

The Company's debt ratio was 42.1% as of December 31, 1993 compared to 42.7%
at December 31, 1992.

On April 26, 1993, the Company sold $75,000,000 of Thirty-one Year 7 1/4%
Debentures through a public offering. The debentures are not redeemable by the
Company prior to April 15, 2003. The net proceeds were used to redeem
$75,000,000 of Forty Year 8 3/4% Debentures. This refinancing will reduce
annual interest costs on the refinanced debt by approximately $1,100,000.

On July 21, 1993, the Company sold $100,000,000 of Twelve Year 6 1/8%
Debentures, through a public offering. The debentures are not redeemable by the
Company prior to maturity. On July 23, 1993, the Company sold $125,000,000 of
Thirty-two Year 7% Debentures through a public offering. These debentures are
not redeemable by the Company prior to July 15, 2003. The net proceeds from
these two issuances were used to redeem $125,000,000 of Forty Year 8 1/2%
Debentures and $100,000,000 of Thirty-five Year 8 5/8% Debentures. These
refinancings will reduce annual interest costs on the refinanced debt by
approximately $4,300,000.

As of December 31, 1993, the Company had $100,000,000 outstanding under a
shelf registration statement filed with the Securities and Exchange Commission.

21
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

PART II

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item is set forth on pages F-1
through F-24.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(Omitted pursuant to General Instruction J(2).)

ITEM 11. EXECUTIVE COMPENSATION

(Omitted pursuant to General Instruction J(2).)

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(Omitted pursuant to General Instruction J(2).)

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(Omitted pursuant to General Instruction J(2).)

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report:

(1) Financial Statements

See Index to Financial Statements and Financial Statement Schedules
appearing on Page F-1.

(2) Financial Statement Schedules

See Index to Financial Statements and Financial Statement Schedules
appearing on Page F-1.

22
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(Continued)

(3) Exhibits

Exhibits identified in parentheses below, on file with the Securities
and Exchange Commission (SEC), are incorporated herein by reference
as exhibits hereto.

Exhibit Number (Referenced to Item 601 of Regulation S-K)
---------------------------------------------------------

3a Certificate of Incorporation of the registrant, as amended July 28,
1977. (Exhibit (3)a to the registrant's Annual Report on Form 10-K
for the year ended December 31, 1985, File No. 1-6964.)

3a(i) Certificate of Amendment to the registrant's Certificate of
Incorporation, as amended August 24, 1990. (Exhibit 3a(1) to the
registrant's Annual Report on Form 10-K for the year ended December
31, 1990, File No. 1-6964.)

3a(ii) Certificate of Amendment to the registrant's Certificate of
Incorporation, adopted December 31, 1993 and filed January 13,
1994.

3b By-Laws of the registrant, as amended October 1, 1993.

4 No instrument which defines the rights of holders of long-term debt
of the registrant is filed herewith pursuant to Regulation S-K, Item
601(b)(4)(iii)(A). Pursuant to this regulation, the registrant hereby
agrees to furnish a copy of any such instrument to the SEC upon
request.

10a Agreement Concerning Contingent Liabilities, Tax Matters and
Termination of Certain Agreements among AT&T, Bell Atlantic
Corporation, the Bell Atlantic Corporation telephone subsidiaries,
and certain other parties, dated as of November 1, 1983. (Exhibit 10a
to Bell Atlantic Corporation Annual Report on Form 10-K for the year
ended December 31, 1993, File No. 1-8606.)

10b Agreement among Bell Atlantic Network Services, Inc. and the Bell
Atlantic Corporation telephone subsidiaries, dated November 7, 1983.
(Exhibit 10b to Bell Atlantic Corporation Annual Report on Form 10-K
for the year ended December 31, 1993, File No. 1-8606.)

23 Consent from Coopers & Lybrand.

24 Powers of attorney.

(b) Reports on Form 8-K:

There were no Current Reports on Form 8-K filed during the quarter ended
December 31, 1993.

23
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

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.

Bell Atlantic - Virginia, Inc.

By /s/ O. Riley Young, Jr.
----------------------------------
O. Riley Young, Jr.
Controller

March 29, 1994

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THIS REGISTRANT AND
IN THE CAPACITIES AND ON THE DATE INDICATED.

____
Principal Executive Officer: )
)
Hugh R. Stallard President and )
Chief Executive )
Officer )
)
Principal Financial Officer and Controller: )
)
O. Riley Young, Jr. Controller )
)
)
) By /s/ O. Riley Young, Jr.
Directors: ) ------------------------------
) O. Riley Young, Jr.
William R. Battle ) (individually and as
Paula P. Brownlee ) attorney-in-fact)
Warner F. Brundage, Jr. ) March 29, 1994
John T. Losier )
C. Coleman McGehee )
Josiah P. Rowe, III )
Dwight C. Schar )
Hugh R. Stallard )
Harrison B. Wilson )
____)

24
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants......................... F-2

Statements of Income and Reinvested Earnings
For the years ended December 31, 1993, 1992, and 1991.. F-3

Balance Sheets - December 31, 1993 and 1992............... F-4

Statements of Cash Flows
For the years ended December 31, 1993, 1992, and 1991.. F-6

Notes to Financial Statements............................. F-7

Schedule V - Plant, Property and Equipment
For the years ended December 31, 1993, 1992, and 1991.. F-18

Schedule VI - Accumulated Depreciation
For the years ended December 31, 1993, 1992, and 1991.. F-22

Schedule VIII - Valuation and Qualifying Accounts
For the years ended December 31, 1993, 1992, and 1991.. F-23

Schedule X - Supplementary Income Statement Information
For the years ended December 31, 1993, 1992, and 1991.. F-24

</TABLE>

Financial statement schedules other than those listed above have been omitted
either because the required information is contained in the financial statements
and notes thereto, or because such schedules are not required or applicable.

F-1
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareowner of
Bell Atlantic - Virginia, Inc.

We have audited the financial statements and the financial statement
schedules of Bell Atlantic - Virginia, Inc. as listed in the index on page F-1
of this Form 10-K. These financial statements and financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bell Atlantic - Virginia, Inc.
as of December 31, 1993 and 1992, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1993 in
conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedules referred to above, when considered in
relation to the basic financial statements taken as a whole, present fairly, in
all material respects, the information required to be included therein.

As discussed in Notes 1, 4 and 5 to the financial statements, the Company
changed its method of accounting for income taxes and postemployment benefits in
1993 and postretirement benefits other than pensions in 1991.

/s/ COOPERS & LYBRAND

2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 7, 1994

F-2
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

STATEMENTS OF INCOME AND REINVESTED EARNINGS
FOR THE YEARS ENDED DECEMBER 31
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>

1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
OPERATING REVENUES
Local service............................ $ 892,070 $ 855,783 $ 819,402
Network access.......................... 532,472 511,717 520,911
Toll service............................ 129,282 123,922 126,333
Directory advertising, billing
services and other (including $16,631,
$16,454, and $15,589 from affiliates).. 291,487 271,870 261,075
Provision for uncollectibles............ (15,495) (14,575) (12,542)
---------- ---------- ----------
1,829,816 1,748,717 1,715,179
---------- ---------- ----------

OPERATING EXPENSES
Employee costs, including benefits
and taxes.............................. 391,402 369,239 384,251
Depreciation and amortization........... 380,437 326,119 350,561
Taxes other than income................. 51,744 50,619 46,317
Other (including $318,844, $300,035,
and $295,520 to affiliates)............ 544,270 533,873 522,257
---------- ---------- ----------
1,367,853 1,279,850 1,303,386
---------- ---------- ----------
NET OPERATING REVENUES................... 461,963 468,867 411,793
---------- ---------- ----------
OPERATING INCOME TAXES
Federal................................. 109,478 96,856 85,430
State................................... 25,842 26,873 24,389
---------- ---------- ----------
135,320 123,729 109,819
---------- ---------- ----------
OPERATING INCOME......................... 326,643 345,138 301,974
---------- ---------- ----------
OTHER INCOME (EXPENSE)
Allowance for funds used during
construction........................... 3,580 3,835 2,871
Miscellaneous - net..................... (3,408) 825 (1,701)
---------- ---------- ----------
172 4,660 1,170
---------- ---------- ----------
INTEREST EXPENSE (including $590,
$2,343 and $6,893 to affiliate)........ 72,710 79,542 87,397
---------- ---------- ----------
INCOME BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES................... 254,105 270,256 215,747

EXTRAORDINARY ITEM
Early Extinguishment of Debt,
Net of Tax............................. (9,734) (11,655) ---

CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES
Postemployment Benefits, Net of Tax.... (9,205) --- ---
Postretirement Benefits Other Than
Pensions, Net of Tax.................. --- --- (224,083)
---------- ---------- ----------
NET INCOME (LOSS)........................ $ 235,166 $ 258,601 $ (8,336)
========== ========== ==========
REINVESTED EARNINGS
At beginning of year.................... $ 431,875 $ 365,315 $ 558,047
Add: net income (loss)................. 235,166 258,601 (8,336)
---------- ---------- ----------
667,041 623,916 549,711
Deduct: dividends...................... 228,005 191,943 184,381
other changes.................. 176 98 15
---------- ---------- ----------
At end of year.......................... $ 438,860 $ 431,875 $ 365,315
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-3
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1993 1992
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Accounts receivable:
Customers and agents, net of allowances for
uncollectibles of $16,537 and $16,675....... $ 301,493 $ 262,409
Affiliates................................... 32,673 52,559
Other........................................ 12,585 8,175
Material and supplies......................... 9,454 10,018
Prepaid expenses.............................. 36,833 37,245
Deferred income taxes......................... 14,021 14,157
Other......................................... 3,267 3,261
---------- ----------
410,326 387,824
---------- ----------

PLANT, PROPERTY AND EQUIPMENT
In service.................................... 4,793,223 4,631,739
Under construction and other.................. 102,559 101,272
---------- ----------
4,895,782 4,733,011
Less accumulated depreciation................. 1,778,043 1,554,933
---------- ----------
3,117,739 3,178,078
---------- ----------

OTHER ASSETS .................................. 259,076 37,410
---------- ----------
TOTAL ASSETS ................................. $3,787,141 $3,603,312
========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1993 1992
--------- ---------
<S> <C> <C>
LIABILITIES AND SHAREOWNER'S INVESTMENT
CURRENT LIABILITIES
Debt maturing within one year:
Affiliate.............................. $ 19,755 $ 36,354
Other.................................. 1,202 1,607
Accounts payable:
Parent and affiliates.................. 120,678 104,686
Other.................................. 203,571 187,482
Accrued expenses:
Vacation Pay........................... 28,057 26,439
Interest............................... 20,412 20,415
Taxes.................................. 22,640 12,504
Other.................................. 50,743 33,900
Advance billings and customer deposits.. 60,049 57,129
---------- ----------
527,107 480,516
---------- ----------
LONG-TERM DEBT........................... 935,293 933,995
---------- ----------
EMPLOYEE BENEFIT OBLIGATIONS............. 364,421 337,197
---------- ----------

DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes................... 344,177 381,434
Unamortized investment tax credits...... 77,521 91,113
Other................................... 226,077 73,497
---------- ----------
647,775 546,044
---------- ----------
COMMITMENTS (Note 3)

SHAREOWNER'S INVESTMENT
Common stock - one share, without
par value, owned by parent............. 873,685 873,685
Reinvested earnings..................... 438,860 431,875
---------- ----------
1,312,545 1,305,560
---------- ----------

TOTAL LIABILITIES AND SHAREOWNER'S
INVESTMENT ............................. $3,787,141 $3,603,312
========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)................................ $ 235,166 $ 258,601 $ (8,336)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization................. 380,437 326,119 350,561
Extraordinary item related to early
extinguishment of debt, net of tax benefit.. 9,734 11,655 ---
Cumulative effect of changes in accounting
principles.................................. 9,205 --- 224,083
Allowance for funds used during construction.. (3,580) (3,835) (2,871)
Other items, net.............................. 146 366 311
Changes in certain assets and liabilities:
Accounts receivable........................ (23,608) (12,364) (4,348)
Material and supplies...................... (2,952) (7,303) (803)
Other assets............................... (20,913) 40,316 (22,273)
Accounts payable and accrued taxes......... 25,701 74,279 18,657
Deferred income taxes, net................. (23,601) (7,841) (1,076)
Unamortized investment tax credits......... (13,592) (11,352) (12,662)
Employee benefit obligations............... 14,619 3,812 13,412
Other liabilities.......................... 15,821 3,637 7,960
--------- --------- ---------

Net cash provided by operating activities........ 602,583 676,090 562,615
--------- --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to plant, property and equipment....... (360,399) (377,752) (378,924)
Other plant-related changes...................... (3,554) 2,318 629
--------- --------- ---------

Net cash used in investing activities............ (363,953) (375,434) (378,295)
--------- --------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings......................... 297,707 296,864 ---
Principal repayments of
capital lease obligations....................... (1,609) (2,257) (2,068)
Early extinguishment of debt and related
call premium.................................... (310,970) (315,660) ---
Net change in note payable to affiliate.......... (16,599) (83,446) 35,435
Dividends paid................................... (228,005) (191,943) (184,381)
Net change in outstanding checks drawn on
controlled disbursement accounts................ 20,846 (4,214) (33,306)
--------- --------- ---------

Net cash used in financing activities............ (238,630) (300,656) (184,320)
--------- --------- ---------

NET CHANGE IN CASH............................... --- --- ---

CASH, BEGINNING OF YEAR.......................... --- --- ---
--------- --------- ---------

CASH, END OF YEAR................................ $ --- $ --- $ ---
========= ========= =========

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

Bell Atlantic - Virginia, Inc. (formerly The Chesapeake and Potomac Telephone
Company of Virginia (the Company), a wholly owned subsidiary of Bell Atlantic
Corporation (Bell Atlantic), maintains its accounts in accordance with the
Uniform System of Accounts (USOA) prescribed by the Federal Communications
Commission (FCC) and makes certain adjustments necessary to present the
accompanying financial statements in accordance with generally accepted
accounting principles applicable to regulated entities. Such principles differ
in certain respects from those used by unregulated entities, but are required to
appropriately reflect the financial and economic impacts of regulation and the
ratemaking process. Significant differences resulting from the application of
these principles are disclosed elsewhere in these Notes to Financial Statements
where appropriate.

REVENUE RECOGNITION

Revenues are recognized as earned on the accrual basis, which is generally
when services are rendered based on the usage of the Company's local exchange
network and facilities.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of 90
days or less when purchased to be cash equivalents. Cash equivalents are stated
at cost, which approximates market value.

MATERIAL AND SUPPLIES

New and reusable materials are carried in inventory, principally at average
original cost, except that specific costs are used in the case of large
individual items. Nonreusable material is carried at estimated salvage value.

PREPAID DIRECTORY

Costs of directory production and advertising sales are deferred until the
directory is published. Such costs are amortized to expense and the related
advertising revenues are recognized over the average life of the directory,
which is generally 12 months.

PLANT AND DEPRECIATION

The Company's provision for depreciation is based principally on the
remaining life method of depreciation and straight-line composite rates. The
provision for depreciation is based on the following estimated remaining service
lives: buildings, 25 to 35 years; central office equipment, 1 to 10 years;
telephone instruments and related equipment, 7 to 8 years; poles, 16 years;
cable and wiring, 11 to 15 years; conduit, 41 years; office equipment and
furniture, 5 to 9 years; and vehicles and other work equipment, 4 to 10 years.
This method provides for the recovery of the remaining net investment in
telephone plant, less anticipated net salvage value, over the remaining service
lives authorized by regulatory commissions. Depreciation expense also includes
amortization of certain classes of telephone plant (and certain identified
depreciation reserve deficiencies) over periods authorized by regulatory
commissions.

When depreciable plant is replaced or retired, the amounts at which such
plant has been carried in plant, property and equipment are removed from the
respective accounts and charged to accumulated depreciation, and any gains or
losses on disposition are amortized over the remaining service lives of the
remaining net investment in telephone plant.

F-7
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

MAINTENANCE AND REPAIRS

The cost of maintenance and repairs of plant, including the cost of replacing
minor items not constituting substantial betterments, is charged to operating
expenses.

ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION

Regulatory commissions allow the Company to record an allowance for funds
used during construction, which includes both interest and equity return
components, as a cost of plant and as an item of other income. Such income is
not recovered in cash currently, but will be recoverable over the service life
of the plant through higher depreciation expense recognized for regulatory
purposes.

EMPLOYEE RETIREMENT BENEFITS

Pension Plans

Substantially all employees of the Company are covered under multi-employer
noncontributory defined pension benefit plans sponsored by Bell Atlantic and its
subsidiaries, including the Company. The Company uses the projected unit credit
actuarial cost method for determining pension cost for financial reporting
purposes. Amounts contributed to the Company's pension plans are actuarially
determined, principally under the aggregate cost actuarial method, and are
subject to applicable federal income tax regulations.

Postretirement Benefits Other Than Pensions

Substantially all employees of the Company are covered under postretirement
health and life insurance benefit plans.

Effective January 1, 1991, the Company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," which requires accrual accounting for all postretirement
benefits other than pensions. Under the prescribed accrual method, the
Company's obligation for these postretirement benefits is to be fully accrued by
the date employees attain full eligibility for such benefits.

A portion of the postretirement accrued benefit obligation is contributed to
501(c)(9) trusts and 401h accounts under applicable federal income tax
regulations. The amounts contributed to these trusts and accounts are
actuarially determined, principally under the aggregate cost actuarial method.

Postemployment Benefits

The Company provides employees with postemployment benefits such as
disability, benefits, workers' compensation, and severance pay.

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits," which requires accrual accounting for the estimated cost of benefits
provided to former or inactive employees after employment but before retirement.
Prior to 1993, the cost of these benefits was charged to expense as the benefits
were paid.

INCOME TAXES

Bell Atlantic and its domestic subsidiaries, including the Company, file a
consolidated federal income tax return.

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (Statement No. 109),
which requires the determination of deferred taxes using the liability method.
Under the liability method, deferred taxes are provided on book and tax basis
differences and deferred tax balances are adjusted to reflect enacted changes in
income tax rates.

F-8
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

The consolidated amount of current and deferred tax expense is allocated by
applying the provisions of Statement No. 109 to each subsidiary as if it were a
separate taxpayer.

Prior to 1993, the Company accounted for income taxes based on the provisions
of Accounting Principles Board Opinion No. 11, "Accounting for Income Taxes"
(APB No. 11). Under APB No. 11, deferred taxes were generally provided to
reflect the effect of timing differences on the recognition of revenue and
expense determined for financial and income tax reporting purposes.

The Tax Reform Act of 1986 repealed the investment tax credit (ITC) as of
January 1, 1986, subject to certain transitional rules. ITCs were deferred and
are being amortized as a reduction to income tax expense over the estimated
service lives of the related assets.

RECLASSIFICATIONS

Certain reclassifications of prior years' data have been made to conform to
1993 classifications.

2. DEBT

LONG-TERM

Long-term debt consists principally of debentures issued by the Company.
Interest rates and maturities of the amounts outstanding at December 31 are as
follows:

<TABLE>
<CAPTION>
1993 1992
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>

Ten year 7 1/8%, due 2002.................... $100,000 $100,000
Thirty-nine year 5 1/4%, due 2005............ 50,000 50,000
Twelve year 6 1/8%, due 2005................. 100,000 ---
Forty year 5 5/8%, due 2007.................. 65,000 65,000
Forty year 6 3/4%, due 2008.................. 70,000 70,000
Thirty-five year 8 5/8%, due 2009............ --- 100,000
Forty year 8 3/4%, due 2010.................. --- 75,000
Twenty year 7 5/8%, due 2012................. 100,000 100,000
Forty year 7 1/4%, due 2012.................. 50,000 50,000
Thirty year 7 7/8%, due 2022................. 100,000 100,000
Thirty-one year 7 1/4%, due 2024............. 75,000 ---
Thirty-two year 7%, due 2025................. 125,000 ---
Forty year 8 1/2%, due 2026.................. --- 125,000
Forty year 8 3/8%, due 2029.................. 100,000 100,000
-------- --------
935,000 935,000

Unamortized discount and premium, net........ (5,498) (7,999)
Capital lease obligations - average rate
12.1% and 12.2%............................ 6,993 8,601
-------- --------
Total long-term debt, including current
maturities............................. 936,495 935,602
Less maturing within one year................ 1,202 1,607
-------- --------
Total long-term debt......................... $935,293 $933,995
======== ========
</TABLE>

Long-term debt outstanding at December 31, 1993 includes $235,000,000 that is
callable by the Company. The call prices range from 102.5% to 101.3% of face
value, depending upon the remaining term to maturity of the issue. In addition,
long-term debt includes $100,000,000 that will become redeemable only on October
1, 1999 at the option of the holders. The redemption prices will be 100% of
face value, plus accrued interest.

F-9
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

On April 26, 1993, the Company issued $75,000,000 of Thirty-one Year 7 1/4%
Debentures, due April 15, 2024, through a public offering. The debentures are
not redeemable by the Company prior to April 15, 2003. The net proceeds from
this issue were used to redeem, on May 13, 1993, $75,000,000 of Forty Year 8
3/4% Debentures due March 1, 2010 at a call price equal to 103.38% of the
principal amount of the issue. As a result of the early extinguishment of this
debt, the Company recorded a charge of $2,530,000, before an income tax benefit
of $960,000.

On July 21, 1993, the Company sold $100,000,000 of Twelve Year 6 1/8%
Debentures, due July 15, 2005, through a public offering. The debentures are
not redeemable by the Company prior to maturity. On July 23, 1993, the Company
sold $125,000,000 of Thirty-two Year 7% Debentures, due July 15, 2025, through a
public offering. These debentures are not redeemable by the Company prior to
July 15, 2003. A portion of the proceeds from these issuances was used to
redeem, on August 9, 1993, $125,000,000 of Forty Year 8 1/2% Debentures, due
September 1, 2026, at a call price of 104.30% of the principal amount, plus
accrued interest from March 1, 1993. The remainder of the proceeds was used to
redeem, on August 16, 1993, $100,000,000 of Thirty-Five Year 8 5/8% Debentures,
due April 1, 2009, at a call price of 103.06% of the principal amount, plus
accrued interest from April 1, 1993. As a result of the early extinguishment of
these debentures, which were called on July 9, 1993 and July 16, 1993,
respectively, the Company recorded a charge of $13,160,000, before an income tax
benefit of $4,996,000.

In 1992, the Company recorded an extraordinary charge associated with the early
extinguishment of debentures called by the Company of $11,655,000, net of an
income tax benefit of $7,131,000.

At December 31, 1993, the Company had $100,000,000 outstanding under a shelf
registration statement filed with the Securities and Exchange Commission.

The fair value of long-term debt is estimated based on quoted market prices for
the same or similar issues. At December 31, 1993 and 1992, the fair value of
the Company's long-term debt, excluding unamortized discount and premium and
capital lease obligations, is estimated at $969,000,000 and $930,000,000,
respectively.

MATURING WITHIN ONE YEAR

Debt maturing within one year consists of the following at December 31:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
INTEREST RATES**
----------------
1993 1992 1991 1993 1992 1991
------- -------- -------- ---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>

Note payable to affiliate ....... $ 19,755 $ 36,354 $119,800 3.3% 3.6% 5.0%
=== === ===
Capital lease obligations........ 1,202 1,607 2,619
-------- -------- --------
Total ........................... $ 20,957 $ 37,961 $122,419
======== ======== ========
Average amount of note
payable outstanding
during the year * .............. $ 18,577 $ 60,728 $114,383 3.2% 3.9% 6.0%
=== === ===
Maximum amount of note
payable at any month-end
during the year ................ $ 34,492 $118,500 $156,217
</TABLE>

* Amounts represent average daily face amount of the note.
** Weighted average interest rates are computed by dividing the average daily
face amount of the note into the aggregate related interest expense.

At December 31, 1993, the Company had an unused line of credit balance of
$180,200,000 with an affiliate, Bell Atlantic Network Funding Corporation
(BANFC) (Note 7).

At December 31, 1993 and 1992, the carrying amount of debt maturing within
one year, excluding capital lease obligations, approximates fair value.

F-10
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

3. LEASES

The Company has entered into both capital and operating leases for facilities
and equipment used in operations. Plant, property and equipment included
capital leases of $18,166,000 and $18,187,000 and related accumulated
amortization of $11,193,000 and $9,590,000 at December 31, 1993 and 1992,
respectively. The Company incurred no initial capital lease obligations in
1993, as compared to $69,000 in 1992, and $3,704,000 in 1991.

Total rent expense amounted to $68,512,000 in 1993, $68,434,000 in 1992, and
$66,803,000 in 1991. Of these amounts, the Company incurred rent expense of
$30,993,000, $31,280,000, and $33,232,000 in 1993, 1992, and 1991, respectively,
from affiliated companies.

At December 31, 1993, the aggregate minimum rental commitments under
noncancelable leases for the periods shown are as follows:

YEARS CAPITAL LEASES OPERATING LEASES
----- -------------- ----------------
(DOLLARS IN THOUSANDS)

<S> <C> <C>
1994....................... $ 2,230 $12,883
1995....................... 1,730 11,794
1996....................... 2,436 11,459
1997....................... 617 11,149
1998....................... 681 10,500
Thereafter................. 2,517 24,061
------- -------
Total...................... 10,211 $81,846
=======

Less imputed interest and
executory costs........... 3,218
-------
Present value of net
minimum lease payments.... 6,993
Less current installments.. 1,202
-------
Long-term obligation at
December 31, 1993......... $ 5,791
=======
</TABLE>

4. EMPLOYEE BENEFITS

PENSION PLANS

Substantially all of the Company's management and associate employees are
covered under multi-employer noncontributory defined benefit pension plans
sponsored by Bell Atlantic and its subsidiaries, including the Company. The
pension benefit formula is based on a flat dollar amount per year of service
according to job classification under the associate plan and a stated percentage
of adjusted career average earnings under the plans for management employees.
The Company's objective in funding the plans is to accumulate funds at a
relatively stable level over participants' working lives so that benefits are
fully funded at retirement. Plan assets consist principally of investments in
domestic and foreign corporate equity securities, U.S. and foreign Government
and corporate debt securities, and real estate.

Aggregate pension cost for the plans is as follows:

YEARS ENDED DECEMBER 31,
------------------------------
1993 1992 1991
-------- -------- --------
(DOLLARS IN THOUSANDS)

Pension cost ........................ $12,828 $14,824 $13,729
======= ======= =======

Pension cost as a percentage of
salaries and wages ................. 4.5% 4.3% 4.0%
======= ======= =======

F-11
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

The decrease in pension cost in 1993 is due to the net effect of the
elimination of one-time charges associated with special termination benefits
that were recognized in the preceding years, favorable investment experience,
and changes in plan demographics due to retirement and severance programs.

In 1992, the Company recognized $6,021,000 of special termination benefit costs
related to the early retirement of associate employees. The special termination
benefit costs and the net effect of changes in plan provisions, certain
actuarial assumptions, and the amortization of actuarial gains and losses
related to demographic and investment experience increased pension cost in 1992.
A change in the expected long-term rate of return on plan assets resulted in a
$7,985,000 reduction in pension cost (which reduced operating expenses by
$6,862,000 after capitalization of amounts related to the construction program)
and substantially offset the 1992 cost increase.

Statement of Financial Accounting Standards No. 87, "Employers' Accounting for
Pensions" (Statement No. 87) requires a comparison of the actuarial present
value of projected benefit obligations with the fair value of plan assets, the
disclosure of the components of net periodic pension costs and a reconciliation
of the funded status of the plans with amounts recorded on the balance sheets.
The Company participates in multi-employer plans and therefore, such disclosures
are not presented for the Company because the structure of the plans does not
allow for the determination of this information on an individual participating
company basis.

Significant actuarial assumptions are as follows:

<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Discount rate used to measure the
projected benefit obligation .................. 7.25% 7.75% 7.75%
Assumed rate of future increases in
compensation levels ........................... 5.25% 5.25% 5.25%
Expected long-term rate of return on plan
assets used to calculate pension cost ......... 8.25% 8.25% 7.50%
</TABLE>

The Company in the past has entered into collective bargaining agreements with
unions representing certain employees and expects to do so in the future.
Pension benefits have been included in these agreements and improvements in
benefits have been made from time to time. Additionally, the Company has
amended the benefit formula under pension plans maintained for its management
employees. Expectations with respect to future amendments to the Company's
pension plans have been reflected in determining the Company's pension cost
under Statement No. 87.

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

Effective January 1, 1991, the Company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," (Statement No. 106). Statement No. 106 requires accrual
accounting for all postretirement benefits other than pensions. Under the
prescribed accrual method, the Company's obligation for these postretirement
benefits is to be fully accrued by the date employees attain full eligibility
for such benefits.

In conjunction with the adoption of Statement No. 106, the Company elected, for
financial reporting purposes, to recognize immediately the accumulated
postretirement benefit obligation for current and future retirees, net of the
fair value of plan assets and recognized accrued postretirement benefit cost
(transition obligation), in the amount of $224,083,000, net of a deferred income
tax benefit of $137,108,000.

For purposes of measuring the interstate rate of return achieved by the
Company, the Federal Communications Commission (FCC) permits recognition of
postretirement benefit costs, including amortization of the transition
obligation, in accordance with the prescribed accrual method included in
Statement No. 106. In January 1993, the FCC denied adjustments to the
interstate price cap formula which would have permitted tariff increases to
reflect the incremental postretirement benefit cost resulting from the adoption
of Statement No. 106.

F-12
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

For intrastate ratemaking purposes, the Virginia State Corporation Commission
issued an order on December 30, 1992, which permits recognition of accrued
postretirement benefit costs, including the amortization of the transition
obligation, for rate of return measurement purposes, so long as recognition of
such costs does not cause the Company to seek a rate increase.

Pursuant to Statement of Financial Accounting Standards No. 71, "Accounting for
the Effects of Certain Types of Regulation" (Statement No. 71), a regulatory
asset associated with the recognition of the transition obligation was not
recorded because of uncertainties as to the timing and extent of recovery given
the Company's assessment of its long-term competitive environment.

Substantially all of the Company's management and associate employees are
covered under postretirement health and life insurance benefit plans sponsored
by Bell Atlantic and certain of its subsidiaries, including the Company. The
determination of benefit plan cost for postretirement health benefit plans is
based on comprehensive hospital, medical, surgical and dental benefit plan
provisions. The postretirement life insurance benefit formula used in the
determination of postretirement benefit cost is primarily based on annual basic
pay at retirement.

The Company funds the postretirement health and life insurance benefits of
current and future retirees. Plan assets consist principally of investments in
domestic and foreign corporate equity securities, and U.S. Government and
corporate debt securities.

The aggregate postretirement benefit cost for the years ended December 31,
1993, 1992, and 1991 was $34,769,000, $30,070,000, and $29,327,000,
respectively. As a result of the 1992 collective bargaining agreements, Bell
Atlantic amended the postretirement medical benefit plan for associate employees
and certain associate retirees of the Company. The increases in the
postretirement benefit cost between 1993 and 1991 were primarily due to the
change in benefit levels and claims experience. Also contributing to these
increases were changes in actuarial assumptions and demographic experience.

Statement No. 106 requires a comparison of the actuarial present value of
projected benefit obligations with the fair value of plan assets, the disclosure
of the components of net periodic postretirement benefit costs, and a
reconciliation of the funded status of the plan with amounts recorded on the
balance sheets. The Company participates in multi-employer plans and therefore,
such disclosures are not presented for the Company because the structure of the
plans does not provide for the determination of this information on an
individual participating company basis.

The assumed discount rate used to measure the accumulated postretirement
benefit obligation was 7.25% at December 31, 1993 and 7.75% at December 31,
1992. The assumed rate of future increases in compensation levels was 5.25% at
December 31, 1993 and 1992. The expected long-term rate of return on plan
assets was 8.25% for 1993 and 1992 and 7.5% for 1991. The medical cost trend
rate in 1993 was approximately 13.0%, grading down to an ultimate rate in 2003
of approximately 5.0%. The dental cost trend rate in 1993 and thereafter is
approximately 4.0%.

Postretirement benefits other than pensions have been included in collective
bargaining agreements and have been modified from time to time. The Company has
periodically modified benefits under the plans maintained for its management
employees. Expectations with respect to future amendments to the Company's
postretirement plans have been reflected in determining the Company's
postretirement benefit costs under Statement No. 106.

POSTEMPLOYMENT BENEFITS

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" (Statement No. 112). Statement No. 112 requires accrual accounting
for the estimated cost of benefits provided to former or inactive employees
after employment but before retirement. This change principally affects the
Company's accounting for disability and workers' compensation benefits, which
previously were charged to expense as the benefits were paid.

F-13
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

The cumulative effect at January 1, 1993 of adopting Statement No. 112 reduced
net income by $9,205,000, net of a deferred income tax benefit of $5,633,000.
The adoption of Statement No. 112 did not have a significant effect on the
Company's ongoing level of operating expense in 1993.

5. INCOME TAXES

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (Statement No. 109).
Statement No. 109 requires the determination of deferred taxes using the
liability method. Under the liability method, deferred taxes are provided on
book and tax basis differences and deferred tax balances are adjusted to reflect
enacted changes in income tax rates. Prior to 1993, the Company accounted for
income taxes based on the provisions of Accounting Principles Board Opinion No.
11.

Statement No. 109 has been adopted on a prospective basis and amounts presented
for prior years have not been restated. As of January 1, 1993, the Company
recorded a charge to income of $211,000, representing the cumulative effect of
adopting Statement No. 109, which has been reflected in Operating Income Taxes
in the Statement of Income and Reinvested Earnings.

Upon adoption of Statement No. 109, the effects of required adjustments to
deferred tax balances were primarily deferred on the balance sheet as regulatory
assets and liabilities in accordance with Statement of Financial Accounting
Standards No. 71, "Accounting for the Effects of Certain Types of Regulation"
(Statement No. 71). At January 1, 1993, the Company recorded income tax-related
regulatory assets totaling $154,198,000 in Other Assets. These regulatory
assets represent the anticipated future regulatory recognition of the Statement
No. 109 adjustments to recognize (i) temporary differences for which deferred
taxes had not been provided and (ii) the increase in the deferred state tax
liability which resulted from increases in state income tax rates subsequent to
the dates the deferred taxes were recorded. In addition, income tax-related
regulatory liabilities totaling $177,295,000 were recorded in Deferred Credits
and Other Liabilities - Other. These regulatory liabilities represent the
anticipated future regulatory recognition of the Statement No. 109 adjustments
to recognize (i) a reduced deferred tax liability resulting from decreases in
federal income tax rates subsequent to the dates the deferred taxes were
recorded and (ii) a deferred tax benefit required to recognize the effects of
the temporary differences attributable to the Company's policy of accounting for
investment tax credits using the deferred method. These deferred taxes and
regulatory assets and liabilities have been increased for the tax effect of
future revenue requirements. These regulatory assets and liabilities are
amortized at the time the related deferred taxes are recognized in the
ratemaking process.

Prior to the adoption of Statement No. 109, the Company had income tax timing
differences for which deferred taxes had not been provided pursuant to the
ratemaking process of $90,948,000 and $83,856,000 at December 31, 1992 and 1991,
respectively. These timing differences principally related to the allowance for
funds used during construction and certain taxes and payroll-related
construction costs capitalized for financial statement purposes, but deducted
currently for income tax purposes, net of applicable depreciation.

The Omnibus Budget Reconciliation Act of 1993, which was enacted in August
1993, increased the federal corporate income tax rate from 34% to 35%, effective
January 1, 1993. In the third quarter of 1993, the Company recorded a net
charge to the tax provision of $364,000, which included $3,496,000 charge for
the nine month effect of the 1% rate increase, largely offset by a one-time net
benefit of $3,132,000 related to adjustments to deferred tax assets associated
with the postretirement benefit obligation of the Company.

Pursuant to Statement No. 71, the effect of the income tax rate increase on the
deferred tax balances was primarily deferred through the establishment of
regulatory assets of $4,504,000 and the reduction of regulatory liabilities of
$14,629,000. The Company did not recognize regulatory assets and liabilities
related to the postretirement benefit obligation or the associated deferred
income tax asset.

F-14
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

The components of income tax expense are as follows:

YEARS ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
--------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal............... $151,171 $122,881 $105,458
State................. 21,342 20,041 17,913
-------- -------- --------
172,513 142,922 123,371
-------- -------- --------
Deferred:
Federal............... (28,101) (14,673) (7,551)
State................. 4,500 6,832 6,476
-------- -------- --------
(23,601) (7,841) (1,075)
-------- -------- --------
148,912 135,081 122,296
Investment tax credits.. (13,592) (11,352) (12,477)
-------- -------- --------

Total................... $135,320 $123,729 $109,819
======== ======== ========
</TABLE>

Income tax expense (benefit) which relates to non-operating income and expense
and is included in Miscellaneous-net was $(1,998,000), $496,000, and $(572,000)
in 1993, 1992, and 1991, respectively.

For the years ended December 31, 1992 and 1991, deferred income tax expense
resulted from timing differences in the recognition of revenue and expense for
financial and income tax accounting purposes. The sources of these timing
differences and the tax effects of each were as follows:

YEARS ENDED DECEMBER 31,
--------------------------
1992 1991
------------- -----------
<S> <C> <C>
(DOLLARS IN THOUSANDS)
Accelerated depreciation......................... $ 10,732 $ 9,776
Employee benefits................................ (10,278) (2,244)
Other, net....................................... (8,295) (8,607)
-------- -------
Total............................................ $ (7,841) $(1,075)
======== =======
</TABLE>

The provision for income taxes varies from the amount computed by applying the
statutory federal income tax rate to income before provision for income taxes.
The difference is attributable to the following factors:

YEARS ENDED DECEMBER 31,
------------------------
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>

Statutory federal income tax rate .......... 35.0% 34.0% 34.0%
Investment tax credits ..................... (3.1) (2.7) (3.8)
State income taxes, net of
federal income tax benefits................ 3.1 3.2 4.9
Benefit of rate differential applied
to reversing timing differences ........... (1.6) (2.2) (3.1)
Reversal of previously capitalized
taxes and payroll-related
construction costs......................... 1.5 (.1) 1.3
Prior year tax adjustment................... (.7) (1.0) --
Other, net.................................. .2 .3 .3
---- ---- ------
Effective income tax rate .................. 34.4% 31.5% 33.6%
==== ==== ======

</TABLE>

F-15
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

At December 31, 1993, the significant components of deferred tax assets and
liabilities were as follows:

<TABLE>
<CAPTION>
DEFERRED TAX DEFERRED TAX
ASSETS LIABILITIES
------------ ------------
<S> <C> <C>
(DOLLARS IN THOUSANDS)

Depreciation..................................... $ --- $592,100
Employee benefits ............................... 189,900 ---
Investment tax credits........................... 49,400 ---
Advance payments................................. 2,200 ---
Other............................................ 25,200 4,800
-------- --------
Total ........................................... $266,700 $596,900
======== ========
</TABLE>

Total deferred tax assets include approximately $146,000,000 related to
postretirement benefit costs recognized in accordance with Statement No. 106.
This deferred tax asset will gradually be realized over the estimated lives of
current retirees and employees.

6. SUPPLEMENTAL CASH FLOW AND ADDITIONAL FINANCIAL INFORMATION
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1993 1992 1991
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Supplemental Cash Flow Information:
Interest paid, net of interest capitalized.... $ 69,415 $ 75,328 $ 85,154
Income taxes paid............................. $154,772 $136,783 $131,452

Additional Financial Information:
Interest expense:
Interest on long-term debt.................. $ 70,588 $ 76,550 $ 79,636
Interest on note payable to affiliate....... 590 2,343 6,893
Other....................................... 1,532 649 868
-------- -------- --------
Total interest expense........................ $ 72,710 $ 79,542 $ 87,397
======== ======== ========
</TABLE>

For the years ended December 31, 1993, 1992, and 1991, revenues generated from
services provided to AT&T, principally network access, billing and collection,
and sharing of network facilities, were $234,448,000, $254,148,000, and
$265,336,000, respectively. At December 31, 1993 and 1992, Accounts receivable,
net, included $17,391,000 and $18,962,000, respectively, from AT&T.

Financial instruments that potentially subject the Company to concentrations of
credit risk consist of trade receivables with AT&T, as noted above. Credit risk
with respect to other trade receivables is limited due to the large number of
customers included in the Company's customer base.

At December 31, 1993 and 1992, $28,899,000 and $6,880,000 of negative cash
balances were classified as Accounts payable, respectively.

7. TRANSACTIONS WITH AFFILIATES

The Company has contractual arrangements with an affiliated company, Bell
Atlantic Network Services, Inc. (NSI), for the provision of various centralized
corporate, administrative, planning, financial and other services. These
arrangements serve to fulfill the common needs of Bell Atlantic's telephone
subsidiaries on a centralized basis.

In connection with these services, the Company recognized $285,066,000,
$268,755,000, and $262,288,000 in operating expenses for the years ended
December 31, 1993, 1992, and 1991, respectively. Included in these expenses
were $22,367,000 in 1993, $30,077,000 in 1992, and $24,395,000 in 1991 billed to
NSI and allocated to the Company by Bell Communications Research, Inc., another
affiliated company owned jointly by the seven regional holding companies. In
1991, these charges included $6,962,000, associated with NSI's adoption of
Statement No. 106. In addition, in

F-16
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

1991, the Company recognized a charge of $70,400,000 representing the Company's
proportionate share of NSI's accrued transition obligation under Statement No.
106.

In connection with the adoption of Statement No. 112 in 1993, the cumulative
effect included $1,385,000, net of a deferred income tax benefit of $848,000,
representing the Company's proportionate share of NSI's accrued cost of
postemployment benefits at January 1, 1993.

The Company has a contractual agreement with an affiliated company, BANFC, for
the provision of short-term financing and cash management services. BANFC
issues commercial paper and secures bank loans to fund the working capital
requirements of the telephone subsidiaries and NSI and invests funds in
temporary investments on their behalf. In connection with this arrangement, the
Company recognized interest expense of $590,000, $2,343,000, and $6,893,000 in
1993, 1992, and 1991, respectively, and $513,000 and $371,000 in interest
income in 1993 and 1992, respectively.

In 1993, the Company received $16,631,000 in revenue from affiliates,
principally related to rent received for the use of Company facilities and
equipment, and paid $33,778,000 in other operating expenses to affiliated
companies. These amounts were $16,454,000 and $31,280,000, respectively, in
1992 and $15,589,000 and $33,232,000, respectively, in 1991.

On February 1, 1994, the Company declared and paid a dividend in the amount of
$50,510,000 to Bell Atlantic.

8. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
INCOME BEFORE
EXTRAORDINARY
ITEM AND
CUMULATIVE
TOTAL NET EFFECT OF CHANGE
OPERATING OPERATING IN ACCOUNTING NET
QUARTER ENDED REVENUES REVENUES PRINCIPLE INCOME
- ------------- ---------- --------- ---------------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
1993:
March 31..................... $ 439,691 $127,933 $ 69,568 $ 60,363
June 30...................... 455,658 111,816 59,809 58,239
September 30................. 470,594 118,068 61,895 53,731
December 31.................. 463,873 104,146 62,833 62,833
---------- -------- -------- --------
Total........................ $1,829,816 $461,963 $254,105 $235,166
========== ======== ======== ========
1992:
March 31..................... $ 428,322 $123,051 $ 70,545 $ 62,212
June 30...................... 442,711 124,963 70,871 70,871
September 30................. 438,903 123,224 69,222 69,222
December 31.................. 438,781 97,629 59,618 56,296
---------- -------- -------- --------
Total........................ $1,748,717 $468,867 $270,256 $258,601
========== ======== ======== ========
</TABLE>

Net income for the first quarter of 1993 has been restated to include a
charge of $9,205,000, net of a deferred income tax benefit of $5,633,000,
related to the adoption of Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (Note 4).

F-17
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

SCHEDULE V - PLANT, PROPERTY AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
(DOLLARS IN THOUSANDS)

- ------------------------------------------------------------------------------------------------------------------
BALANCE AT ADDITIONS OTHER
BEGINNING AT COST RETIREMENTS CHANGES BALANCE AT
CLASSIFICATION OF PERIOD NOTE(a) NOTE(b) NOTE(c) END OF PERIOD
- --------------------------------------------- ---------- ------------ -------------- ---------- -------------
<S> <C> <C> <C> <C> <C>

Land......................................... $ 13,359 $ 541 $ 122 $ (19) $ 13,759
Buildings.................................... 262,918 14,102 4,406 (50) 272,564
Central Office Equipment..................... 1,984,691 220,508 142,103 (3,975) 2,059,121
Telephone Instruments and Related Equipment.. 81,871 8,206 2,066 3,382 91,393
Poles........................................ 75,585 2,256 1,118 (4) 76,719
Cable and Wiring............................. 1,645,999 85,332 36,071 44 1,695,304
Conduit...................................... 289,568 10,640 1,018 --- 299,190
Office Equipment and Furniture............... 155,071 19,435 10,591 (224) 163,691
Vehicles and Other Work Equipment............ 86,564 4,957 6,413 29 85,137
Other........................................ 36,113 1,981 1,738 (11) 36,345
---------- -------- -------- ------- ----------
Total In Service (c)....................... 4,631,739 367,958 205,646 (828) 4,793,223

Plant Under Construction..................... 99,286 805 --- 14 100,105
Other........................................ 1,986 1 --- 467 2,454
---------- -------- -------- ------- ----------

Total Plant, Property and Equipment........ $4,733,011 $368,764 $205,646 $ (347) $4,895,782
========== ======== ======== ======= ==========

</TABLE>

The notes on page F-21 are an integral part of this schedule.

F-18
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

SCHEDULE V - PLANT, PROPERTY AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
(DOLLARS IN THOUSANDS)

- ------------------------------------------------------------------------------------------------------------------
BALANCE AT ADDITIONS OTHER
BEGINNING AT COST RETIREMENTS CHANGES BALANCE AT
CLASSIFICATION OF PERIOD NOTE(a) NOTE(b) NOTE(d) END OF PERIOD
- --------------------------------------------- ---------- ------------ -------------- ---------- -------------
<S> <C> <C> <C> <C> <C>

Land......................................... $ 13,464 $ 34 $ 139 $ --- $ 13,359
Buildings.................................... 254,540 11,049 2,671 --- 262,918
Central Office Equipment..................... 1,913,350 217,194 145,853 --- 1,984,691
Telephone Instruments and Related Equipment.. 83,779 7,421 9,329 --- 81,871
Poles........................................ 73,487 2,548 450 --- 75,585
Cable and Wiring............................. 1,966,071 97,553 417,625 --- 1,645,999
Conduit...................................... 280,596 11,091 2,119 --- 289,568
Office Equipment and Furniture............... 148,883 21,199 15,011 --- 155,071
Vehicles and Other Work Equipment............ 84,969 6,814 5,219 --- 86,564
Other........................................ 37,188 1,684 2,759 --- 36,113
---------- -------- -------- ------- ----------
Total In Service (c)....................... 4,856,327 376,587 601,175 --- 4,631,739

Plant Under Construction..................... 91,886 7,400 --- --- 99,286
Other........................................ 1,389 597 --- --- 1,986
---------- -------- -------- ------- ----------

Total Plant, Property and Equipment........ $4,949,602 $384,584 $601,175 $ --- $4,733,011
========== ======== ======== ======= ==========
</TABLE>

The notes on page F-21 are an integral part of this schedule.

F-19
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

SCHEDULE V - PLANT, PROPERTY AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
(DOLLARS IN THOUSANDS)

- ------------------------------------------------------------------------------------------------------------------
BALANCE AT ADDITIONS OTHER
BEGINNING AT COST RETIREMENTS CHANGES BALANCE AT
CLASSIFICATION OF PERIOD NOTE(a) NOTE(b) NOTE(d) END OF PERIOD
- --------------------------------------------- ---------- ------------ -------------- ---------- -------------
<S> <C> <C> <C> <C> <C>

Land......................................... $ 13,428 $ 30 $ 2 $ 8 $ 13,464
Buildings.................................... 241,127 15,674 2,251 (10) 254,540
Central Office Equipment..................... 1,845,596 215,049 146,452 (843) 1,913,350
Telephone Instruments and Related Equipment.. 78,770 11,041 6,761 729 83,779
Poles........................................ 71,897 3,556 1,968 2 73,487
Cable and Wiring............................. 1,927,091 101,050 61,610 (460) 1,966,071
Conduit...................................... 271,023 12,023 2,414 (36) 280,596
Office Equipment and Furniture............... 145,732 15,758 12,462 (145) 148,883
Vehicles and Other Work Equipment............ 81,169 10,230 6,524 94 84,969
Other........................................ 36,933 5,916 5,664 3 37,188
---------- -------- -------- ----- ----------
Total In Service (c)....................... 4,712,766 390,327 246,108 (658) 4,856,327

Plant Under Construction..................... 93,414 (1,456) 72 --- 91,886
Other........................................ 906 554 64 (7) 1,389
---------- -------- -------- ----- ----------

Total Plant, Property and Equipment........ $4,807,086 $389,425 $246,244 $(665) $4,949,602
========== ======== ======== ===== ==========

</TABLE>

The notes on page F-21 are an integral part of this schedule.

F-20
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

NOTES TO SCHEDULE V - PLANT, PROPERTY AND EQUIPMENT

- -----------------

(a) These additions include (1) the original cost (estimated if not
specifically determinable) of reused material, which is concurrently
credited to material and supplies, and (2) allowance for funds used during
construction. Transfers between Plant in Service, Plant Under Construction
and Other are also included in Additions at Cost.

(b) Items of plant, property and equipment are deducted from the property
accounts when retired or sold at the amounts at which they are included
therein, estimated if not specifically determinable.

(c) The Company's provision for depreciation is principally based on the
remaining life method and straight-line composite rates prescribed by
regulatory authorities. The remaining life method provides for the full
recovery of the remaining net investment in plant, property and equipment.
In 1993, the Company implemented changes in depreciation rates approved by
regulatory authorities. These changes reflect reductions in estimated
service lives of the Company's plant, property and equipment in service.
The ruling will allow a more rapid recovery of the Company's investment in
plant, property and equipment through closer alignment with current
estimates of its remaining economic useful life. For the years 1993, 1992,
and 1991, depreciation expressed as a percentage of average depreciable
plant was 8.1%, 6.9%, and 7.3%, respectively.

(d) Represents reclassifications within the plant, property and equipment
accounts.

(e) See Note 1 of Notes to Financial Statements for the Company's depreciation
policies.

F-21
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

SCHEDULE VI - ACCUMULATED DEPRECIATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BALANCE AT ADDITIONS OTHER
BEGINNING CHARGED TO CHANGES BALANCE AT
CLASSIFICATION OF PERIOD EXPENSES RETIREMENTS NOTE(a) END OF PERIOD
- ---------------- ---------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>

Year 1993....... $1,554,933 $380,437 $198,089 $40,762 $1,778,043

Year 1992....... $1,827,125 $326,119 $596,102 $(2,209) $1,554,933

Year 1991....... $1,722,424 $350,561 $247,617 $ 1,757 $1,827,125
</TABLE>

- ------------------------------------------

(a) Includes any gains or losses on disposition of plant, property and
equipment. These gains and losses are amortized to depreciation expense
over the remaining service lives of remaining net investment in plant,
property and equipment. In 1993, the amount principally represents the
reclassification of a prior year extraordinary retirement of intrabuilding
cable which is being amortized over a five year period, as approved by the
FCC. In 1992 and 1991, the amount consisted primarily of accumulated
amortization adjustments related to capital lease assets.

F-22
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
ADDITIONS
--------------------------
BALANCE AT CHARGED CHARGED TO BALANCE AT
BEGINNING TO OTHER ACCOUNTS DEDUCTIONS END OF
DESCRIPTION OF PERIOD EXPENSES NOTE(a) NOTE(b) PERIOD
- ----------- ---------- ---------- -------------- ---------- ----------
Allowance for Uncollectible Accounts:
<S> <C> <C> <C> <C> <C>
Year 1993........................... $16,675 $15,425 $22,683 $38,246 $16,537

Year 1992........................... $15,571 $14,385 $21,630 $34,911 $16,675

Year 1991........................... $ 7,192 $11,951 $26,363 $29,935 $15,571
</TABLE>

- ------------------------------------------

(a) (i) Amounts previously written off which were credited directly to this
account when recovered; and (ii) accruals charged to accounts payable for
anticipated uncollectible charges on purchases of accounts receivable from
others which were billed by the Company.

(b) Amounts written off as uncollectible.

F-23
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1992
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
CHARGED TO COSTS
ITEM AND EXPENSES
---- ----------------
<S> <C>
Year 1993
Maintenance and Repairs ..................................... $331,891
========
Other operating taxes:
Property .................................................. $ 39,901
Gross receipts ............................................ 8,142
Other ..................................................... 3,701
--------
Total other operating taxes ................................. $ 51,744
========

Year 1992
Maintenance and Repairs ..................................... $305,986
========

Other operating taxes:
Property .................................................. $ 38,520
Gross receipts ............................................ 8,651
Other ..................................................... 3,448
--------
Total other operating taxes ................................. $ 50,619
========

Year 1991
Maintenance and Repairs ..................................... $306,547
========

Other operating taxes:
Property .................................................. $ 36,437
Gross receipts ............................................ 7,662
Other ..................................................... 2,218
--------
Total other operating taxes ................................. $ 46,317
========
</TABLE>

Advertising costs for 1993, 1992, and 1991 are not presented, as such amounts
are less than 1 percent of total operating revenues.

Amounts reported for 1992 and 1991 for maintenance and repairs have been revised
to include certain additional costs.

F-24
<PAGE>

EXHIBITS

FILED WITH ANNUAL REPORT FORM 10-K

UNDER THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993

BELL ATLANTIC - VIRGINIA, INC.

COMMISSION FILE NUMBER 1-6964
<PAGE>

Form 10-K for 1993
File No. 1-6964
Page 1 of 1

EXHIBIT INDEX

Exhibits identified in parentheses below, on file with the Securities and
Exchange Commission (SEC), are incorporated herein by reference as exhibits
hereto.

Exhibit Number (Referenced to Item 601 of Regulation S-K)
- ---------------------------------------------------------

3a Certificate of Incorporation of the registrant, as amended July 28,
1977. (Exhibit (3)a to the registrant's Annual Report on Form 10-K for
the year ended December 31, 1985, File No. 1-6964.)

3a(ii) Certificate of Amendment to the registrant's Certificate of
Incorporation, adopted December 31, 1993 and filed January 13,
1994.

3b By-Laws of the registrant, as amended October 1, 1993.

4 No instrument which defines the rights of holders of long-term debt of
the registrant is filed herewith pursuant to Regulation S-K, Item
601(b)(4)(iii)(A). Pursuant to this regulation, the registrant hereby
agrees to furnish a copy of any such instrument to the SEC upon
request.

10a Agreement Concerning Contingent Liabilities, Tax Matters and
Termination of Certain Agreements among AT&T, Bell Atlantic
Corporation, the Bell Atlantic Corporation telephone subsidiaries, and
certain other parties, dated as of November 1, 1983. (Exhibit 10a to
Bell Atlantic Corporation Annual Report on Form 10-K for the year
ended December 31, 1993, File No. 1-8606.

23 Consent from Coopers & Lybrand.

24 Powers of attorney.

<PAGE>

EXHIBIT 3a(ii)

CERTIFICATE OF AMENDMENT
OF
THE CHESAPEAKE AND POTOMAC TELEPHONE COMPANY
OF VIRGINIA

* * * * *

1. The name of the corporation is The Chesapeake and Potomac Telephone
Company of Virginia.

2. The name of the corporation has been changed to:
Bell Atlantic - Virginia, Inc.

3. The foregoing amendment was adopted on December 31, 1993.

4. The amendment was adopted by unanimous consent of the shareholders.

The undersigned secretary declares that the facts herein stated are true as
of January 6, 1994.

The Chesapeake and Potomac Telephone
Company of Virginia

By: \s\ Warner F. Brundage, Jr.
---------------------------
Warner F. Brundage, Jr.

<PAGE>

EXHIBIT 3b

BY-LAWS
OF
BELL ATLANTIC - VIRGINIA, INC.

CONTENTS

Article I ............................................... Shareholders' Meetings

Article II ........................................................... Directors

Article III ........................................................... Officers

Article IV .................................... Certificates for Stock, Transfer

Article V ............................ Indemnification of Directors and Officers

Article VI ....................................................... Miscellaneous
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

ARTICLE I

SHAREHOLDERS' MEETINGS
----------------------

Section 1-a Place of Meetings. All meetings of the shareholders shall
-----------------------------
be held at the principal office of the corporation in the City of Richmond or at
such other place, within or without the Commonwealth of Virginia, as the Board
of Directors or shareholders may from time to time determine.

Section 1-b Annual Meeting. An annual meeting of the shareholders
--------------------------
shall be held in April of each year on a business day and at an hour to be fixed
by the President and set forth in the notice of the meeting, for the election of
Directors and the transaction of such other business as may properly be brought
before the meeting.

Section 1-c Special Meetings. Special meetings of the shareholders
----------------------------
may be called at any time by the Board of Directors or the President.

Section 1-d Notice of Meetings. Written notice of every meeting of
------------------------------
the shareholders shall be given by or at the direction of the person or persons
authorized to call the meeting, to each shareholder of record entitled to vote
at the meeting, not less than ten (10) nor more than sixty (60) days prior to
the date named for the meeting, unless a greater period of notice is required by
law in a particular case, by delivery of or by mailing such notice to each
shareholder addressed to such shareholder at such shareholder's address
appearing on the books of the corporation for the purpose of notice. Such
notice shall specify the place, day and hour of the meeting, and shall state the
nature of the business to be transacted if, and to the extent, required by law.

Section 1-e Quorum. A majority of the votes entitled to be cast by
------------------
the shareholders on a matter shall constitute a quorum with respect to the
matter, except as otherwise provided by statute or in the Articles of
Incorporation.

Section 1-f Shareholders Entitled to Vote. Unless the Articles of
-----------------------------------------
Incorporation otherwise provide, each outstanding share, regardless of class, is
entitled to one vote on each matter voted on at a shareholders meeting and in
the election of Directors each outstanding share, regardless of class, is
entitled to one vote for as many persons as there are Directors to be elected at
that time and for whose election the shareholder has a right to vote.
<PAGE>

Section 1-g Voting. When a quorum exists at any meeting and unless
------------------
otherwise provided by law, the vote of a plurality of the votes cast, in person
or by proxy, shall be sufficient to elect Directors and to pass any measure.

Section 1-h Informal Action. Except as may be otherwise provided in
---------------------------
the Articles of Incorporation, any action which could be taken at a meeting of
the shareholders may be taken without a meeting, if a consent in writing,
setting forth the action so taken, is signed by all of the shareholders who
would be entitled to vote at a meeting for such purpose and is filed with the
Secretary of the corporation.

ARTICLE II

DIRECTORS
---------

Section 2-a Number and Term of Office. All corporate powers shall be
-------------------------------------
exercised by or under the authority of, and the business and affairs of the
corporation managed under the direction of, the Board of Directors. The Board
of Directors shall consist of not less than seven (7) nor more than fifteen (15)
Directors, the exact number within such limits to be determined from time to
time by the Board of Directors, provided that not more than three (3) Directors
shall be employees of the corporation or any affiliated company and not more
than twelve (12) shall be outside Directors. Directors shall be natural persons
of full age. At each annual meeting the Directors shall be elected by the
shareholders to serve until their respective successors shall be elected and
shall qualify.

Section 2-b Place of Meetings. The meetings of the Board of Directors
-----------------------------
may be held at such place, within or without the Commonwealth of Virginia, as a
majority of the Directors may, from time to time, by resolution prescribe, or as
may be designated in the notice or waiver of notice of a particular meeting. In
the absence of specification, such meetings shall be held at the registered
office of the corporation.

Section 2-c Time of Meetings. The first meeting of each newly elected
----------------------------
Board of Directors shall be the regularly scheduled meeting of the Board of
Directors next following the annual meeting of the shareholders, unless
otherwise provided in the notice of the meeting. Such meeting shall be for the
purpose of organization, the election of officers and the transaction of other
business.

Regular meetings of the Board of Directors may be held at such times
as the Board of Directors may by resolution determine. Unless otherwise
specified by resolution of the Board of Directors, if any day fixed for a
regular meeting shall be a legal holiday, then the meeting shall be held at the
same hour and place on the immediately preceding business day which is not a
legal holiday.

2
<PAGE>

Special meetings of the Board of Directors may be called at any time
by the President, and shall be called upon the written request of any two or
more Directors stating the purpose or purposes for which it is to be called.
Upon receipt of such request it shall be the duty of the Secretary promptly to
issue the call for such meeting.

Section 2-d Notice of Meetings. Written notice of every meeting of
------------------------------
the Board of Directors shall be given personally or by mailing the same at least
forty-eight (48) hours before the time names for such meeting, except that
notice of a special meeting of the Board of Directors may instead be given by
telegraphing or telephoning the same, at least twenty-four (24) hours before the
time named for such meeting. Such notice shall specify the place, day and hour
of the meeting, and shall also state the nature of the business to be transacted
at a special meeting or if otherwise required by law.

Section 2-e Quorum. At all meetings of the Board of Directors a
------------------
majority of the number of Directors prescribed pursuant to Section 2-a shall be
necessary to constitute a quorum for the transaction of business, and the acts
of a majority of the Directors present at a meeting at which a quorum is present
shall be the acts of the Board of Directors, except as may otherwise be
specifically provided by statute.

Section 2-f Vacancies. Vacancies in the Board of Directors, whether
---------------------
or not caused by an increase in the number of Directors, may be filled by a
majority of the remaining members of the Board of Directors though less than a
quorum, and each person so elected shall be a Director until his or her
successor is elected and qualified or until his or her earlier death,
resignation or removal. Any Director may resign at any time upon written notice
to the corporation.

Section 2-g Removal of Directors. Any Director, or the entire Board
--------------------------------
of Directors, may be removed with or without cause by a majority of the votes
entitled to be cast by shareholders for the election of Directors.

Section 2-h General Powers. The Board of Directors may exercise all
--------------------------
such powers of the corporation and do all such lawful acts and things as are not
by statute, or by the Articles of Incorporation, directed or required to be
exercised and done by the shareholders. The Board of Directors may adopt and
enforce such rules and regulations, not inconsistent herewith, as they may deem
necessary for the conduct of the corporation's business; the Board of Directors
may, from time to time, designate one of its members to serve as Chairman, with
such duties as the Board of Directors shall specify. The Chairman or, if the
position is vacant, the President, shall preside at all Board Meetings.

3
<PAGE>

Section 2-i Board Committees. The Board of Directors shall, by
----------------------------
resolution adopted by a majority of the whole Board of Directors, designate an
Executive Committee, which shall consist of three or more Directors, and the
Board of Directors may, by resolution adopted by a majority of the whole Board
of Directors, designate from time to time such other Committees consisting of
three or more Directors, as it shall deem necessary or appropriate, each to have
such powers, in addition to those set forth in these By-Laws, as the Board of
Directors by resolution shall authorize. Vacancies in the membership of any
Committee shall be filled by the Board of Directors at a regular or special
meeting of the Board of Directors. The Board of Directors may designate one or
more Directors as alternate members of the Executive or other Committee (to
serve in the order named if more than one) who may replace any absent or
disqualified member at any meeting of such Committee. If the Board of Directors
has not made such designation, or if none of the alternate members designated is
available, in the absence or disqualification of any member of the Executive or
other Committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not the member or members constitute a
quorum, may unanimously appoint another Director to act at the meeting in the
place of any such absent or disqualified member. The Executive or other
Committee shall keep regular minutes of its proceedings and shall report actions
taken by it to the next meeting of the Board of Directors.

Section 2-j Specific Powers of Executive and Other Committees. The
-------------------------------------------------------------
President, if a Director, shall be a member of the Executive Committee. Except
as prohibited by law or granted to another Committee by resolution of the Board
of Directors, the Executive Committee shall have and exercise all the powers of
the Board of Directors provided that neither the Executive nor any other
Committee shall have the power to adopt, amend or repeal the By-Laws of the
corporation or to elect Directors. At any meeting of a Committee a majority of
such Committee shall constitute a quorum. Each Committee may fix the time and
place of its regular meetings, and after such time and place shall have been
fixed no notice of such regular meeting shall be necessary. Special meetings of
the Executive Committee may be called by the President whenever he or she shall
think proper, and the President shall call such meetings whenever requested, in
writing, by any two members of the Executive Committee. Special meetings of
other Committees may be called by the respective chairmen. Notice of the time
and place of every special meeting of a Committee shall be given by the
Secretary to each member of the Committee in the manner prescribed in Section
2-d for special meetings of the whole Board of Directors.

Section 2-k Informal Action. Any action which could be taken at a
---------------------------
meeting of the Board of Directors or the Executive or other Board Committee,
may be taken without a meeting, if consent in writing setting forth the action
so taken is signed by all of the Directors or the members of the Executive or
other Committee, as

4
<PAGE>

the case may be, and is filed by the Secretary of the corporation with the
minutes of the proceedings of the Board of Directors or the appropriate
Committee.

Section 2-1 Emergency Authority. The Board of Directors may adopt
-------------------------------
emergency succession rules which make advance provision for the continuity and
authority of the corporation's management in the event of a major catastrophe,
such as nuclear attack, or other disaster resulting in the loss or
unavailability of members of the Board of Directors, whether by death,
incapacity, isolation or otherwise, or in loss or unavailability of officers of
the corporation, and in the vent of such a major catastrophe or disaster, the
terms of any such rules shall have the same effect as if included in these By-
Laws and shall supersede the terms of these By-Laws and any resolutions of the
Board of Directors, to the extent that they may be inconsistent therewith, until
the Board of Directors can be convened pursuant to such rules.

Section 2-m Compensation of Directors. The Board of Directors shall
-------------------------------------
have the authority to fix the compensation of Directors and Committee Members
and to provide for reimbursement of expenses incurred in the performance of
duties as a Director or Committee Member. A Director may serve the corporation
in any other capacity and may receive compensation therefor.

Section 2-n Telecommunications. One or more Directors may participate
------------------------------
in a meeting of the Board of directors or a committee thereof, by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other. Participation in a
meeting pursuant to this Section shall constitute presence in person at such
meeting.

ARTICLE III

OFFICERS
--------

Section 3-a Number, Qualifications and Designation. The officers of
--------------------------------------------------
the corporation shall be a President, who shall be the chief executive officer,
a Secretary, a Treasurer and such other officers (who may also be officers of an
affiliated company) as may be required by law or may from time to time be
elected by the Board of Directors and whose powers and duties shall be as
prescribed by these By-Laws or as from time to time prescribed by the Board of
Directors. One person may hold more than one office except that the same person
shall not hold the offices of President and Secretary.

5
<PAGE>

Section 3-b Election and Term of Office. The officers of the
---------------------------------------
Corporation, except subordinate officers appointed pursuant to Section 3-c
hereof, shall be elected by the Board of Directors for such terms as may be
specified by the Board of Directors, and each such officer shall hold such
officer until such officer's successor shall have been elected and qualified, or
until such officer's earlier death, resignation or removal. The Board of
Directors shall designate a principal financial officer and a principal
accounting officer. Any officer may resign at any time upon written notice to
the corporation and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. If the office of an
officer elected by the Board of Directors becomes vacant for any reason, the
vacancy may be filled by the President on an interim basis until the next
meeting of the Board of Directors, at which time the position shall be filled by
the Board of Directors.

Section 3-c Subordinate Officers, Employees and Agents. The Board of
------------------------------------------------------
Directors may from time to time appoint such subordinate officers, employees or
agents (who may also be officers or employees of an affiliated company) as it
deems necessary, who shall hold such positions for such terms and shall exercise
such powers and perform such duties as are provided in these By-Laws, or as the
Board of Directors may from time to time determine. The Board of Directors may
delegate to any officer or Committee of the Board of Directors the power to
appoint or remove subordinate officers and to retain, appoint or remove
employees or other agents, and to prescribe the authority and duties, not
inconsistent with these By-Laws of such subordinate officers, employees or other
agents. In the absence of any such specific delegation, the President shall
have the authority to appoint subordinate officers, employees or agents. The
President shall have the authority to approve giving one or more subordinate
officers the title of Vice President, if deemed appropriate under the
circumstances.

Section 3-d Removal of Officers, Agents or Employees. Any officer,
----------------------------------------------------
subordinate officer, agent or employee of the corporation may be removed, of his
or her authority revoked, by resolution of the Board of Directors whenever in
its judgment the best interest of the corporation will be served thereby. Any
subordinate officer, agent or employee likewise may be removed by the President
or subject to the President's supervision, by the person having authority with
respect to the appointment of such subordinate officer, agent or employee.

Section 3-e President. The President shall have such authority and
---------------------
perform such duties as usually appertain to that office in business
corporations, and shall perform such other duties as shall from time to time be
assigned to him or her by the Board of Directors.

6
<PAGE>

Section 3-f Secretary. The Secretary, or an Assistant Secretary,
---------------------
shall attend all meetings of the shareholders and of the Board of Directors and
shall record the proceedings of the shareholders and Directors in a book or
books to be kept for that purpose; see that notices are given and records and
reports properly kept and filed by the corporation as required by law; be the
custodian of the seal of the corporation and attest or cause to be attested
documents on behalf of the corporation under its seal; and in general, perform
all duties incident to the office of Secretary and such other duties as may from
time to time be assigned to him or her by the Board of Directors or President.
The Secretary shall appoint one or more Assistant Secretaries with such powers
and duties as the Board of Directors, the President or the Secretary shall from
time to time determine.

Section 3-g Treasurer. The Treasurer, or an Assistant Treasurer,
---------------------
shall have or provide for the custody of the funds and other property of the
corporation and shall keep or cause to be kept full and accurate accounts,
receipts, and disbursements in books belonging to the corporation; collect and
receive, or in any manner due to or received by the corporation; deposit all
funds in his or her custody as Treasurer in such banks or other places of
deposit as may be designated from time to time by the Board of Directors or
pursuant to its authority; whenever so required by the Board of Directors,
render an account showing his or her transactions as Treasurer and the financial
condition of the corporation; and, in general, discharge such other duties as
may from time to time be assigned to him or her by the Board of Directors or the
President. The Treasurer shall appoint one or more Assistant Treasurers with
such powers and duties as the Board of Directors, the President or the Treasurer
shall from time to time determine.

Section 3-h Controller. The Controller, if one shall have been
----------------------
elected or appointed, shall have custody and charge of all books of account,
except those required by the Treasurer in keeping records of the work of the
Treasurer's office, and shall have supervision over subsidiary accounting
records, wherever located. The Controller shall have access to all books of
account, including the Treasurer's records, for purposes of audit and for
obtaining information necessary to verify or complete the records of the
Controller's office. Unless otherwise provided by the Board of Directors, the
Controller shall certify to authorization and approvals pertaining to vouchers
and shall perform such other duties as may be assigned by the Board of Directors
or the President. With the approval of the President, the Controller may
designate one or more person to perform all of the Controller's duties as may be
found necessary to delegate in the ordinary course of the business or in the
event of the absence or disability of the Controller.

7
<PAGE>

Section 3-i Delegation of Duties. The President may delegate duties
--------------------------------
to other officers, subordinate officers, employees or agents and may similarly
provide for the redelegation thereof.

Section 3-j Voting of Stock. Unless otherwise provided by the Board
---------------------------
of Directors, the President or the Treasurer shall have full power and
authority, on behalf of the corporation, to attend, and to act and vote, in
person or by proxy, at any meeting of the shareholders of any company in which
the corporation may hold stock, and at any such meeting shall possess and may
exercise any and all of the rights and powers incident to the ownership of such
stock which, as the owner thereof the corporation might have possessed and
exercised if present. The Board of Directors may from time to time confer like
powers upon any other person or persons.

Section 3-k Endorsement of Securities for Transfer. The President and
--------------------------------------------------
the Treasurer shall each have power to endorse and deliver for sale, assignment
or transfer certificates of stock, bonds or other securities, registered in the
name of or belonging to the corporation, whether issued by this corporation or
by any other corporation, government, state or municipality or agency thereof.

ARTICLE IV

CERTIFICATES FOR STOCK, TRANSFER, ETC.
--------------------------------------

Section 4-a Issuance. Each shareholder shall be entitled to a
--------------------
certificate or certificates, under the seal of the corporation, showing the
number of shares to which the shareholder is entitled. Such certificates shall
be signed by the President and by the Treasurer or an Assistant Treasurer.

Section 4-b Transfer. Stock shall be transferable on the books of the
--------------------
corporation only by the holder thereof in person, or by attorney, upon surrender
of the outstanding certificate; provided, however, that in the case of a lost,
stolen or destroyed certificate, a new certificate may be issued in place
thereof upon such terms as the Board of Directors may prescribe.

Section 4-c Record Holder of Shares; Record Date. The corporation
------------------------------------------------
shall be entitled to recognize the exclusive right of a person registered on its
books as the owner of shares to receive dividends and to vote as such owner and
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person except as otherwise
provided by law. In order that the corporation may determine the shareholders
entitled to notice of or to vote at any meeting of shareholders, to receive any
dividend or other distribution, or to exercise any other right to which a
shareholder is entitled, the Board of Directors may fix in advance a record date
in accordance

8
<PAGE>

with the provisions specified by statute. If no record date is fixed, then the
record date shall be determined in accordance with the applicable statutory
provisions.

ARTICLE V

INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------

Section 5-a Indemnification of Directors and Officers. Each person
-----------------------------------------------------
made or threatened to be made a party to an action, suit or proceeding, civil or
criminal, by reason of the fact that he or she, his or her testator or intestate
is or was a Director or officer of the corporation shall be indemnified by the
Company against liabilities, costs and expenses of every kind actually and
reasonably incurred by him or her as a result of such action, suit or
proceeding, or any threat thereof or any appeal thereon, but in each case only
if and to the extent permissible under applicable law. The foregoing indemnity
shall not be exclusive of other rights to which such person may be entitled.

Section 5-b Advancing Expenses. Reasonable expenses incurred by a
------------------------------
Director or officer who is a party to a proceeding may be paid or reimbursed by
the corporation in advance of the final disposition of the proceeding, provided
the statutory conditions precedent are met.

Section 5-c Insurance. The corporation may purchase and maintain
----------------------
insurance on behalf of any person for whom indemnity would be provided pursuant
to Section 5-a, above, in the capacity therein set forth, against liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not the corporation
would have the power to indemnify such person against such liability under the
provisions of this article or otherwise.

Section 5-d Limitation of Liability. An officer or Director shall
-----------------------------------
have no liability for damages in any proceeding brought by a shareholder in the
right of the Company or brought by or on behalf of shareholders of the Company.

The liability of an officer or Director shall not be eliminated as
provided in this Section 5-d if the officer or Director engaged in willful
misconduct or a knowing violation of the criminal law or any federal or state
securities law, including without limitation, any claim of unlawful insider
trading or manipulation of the market for any security.

No such elimination of liability pursuant to this Section 5-d shall be
effective with respect to any act or omission occurring before the date of
adoption of this Section 5-d.

9
<PAGE>

ARTICLE VI

MISCELLANEOUS
-------------

Section 6-a Waiver of Notice. Except as otherwise provided by law or
----------------------------
the Articles of Incorporation, any notice required to be given under the
provisions of the By-Laws, or otherwise, may be waived in writing by the
shareholder, Director or officer to whom such notice is required to be given,
either before or after the meeting or action of which notice is waived.
Attendance of any shareholder, in person or by proxy, and of any Director of
officer at any meeting shall constitute a waiver of notice of such meeting
except where a person entitled to notice attends the meeting for the express
purpose of objecting to the transaction of any business because the meeting was
not lawfully called or convened. A shareholder or Director who signs a written
consent, in lieu of a meeting, as provided for in these By-Laws, shall be deemed
to have waived any notice of such meeting.

Section 6-b Checks, Notes, Etc.. All checks, notes and evidence of
-------------------------------
indebtedness of the corporation shall be signed by such person or persons as the
Board of Directors may from time to time designate or the Board may adopt a
single symbol to be affixed to such documents. In either case, the signature of
such person or persons, or a symbol, if such is adopted, and any facsimile or
facsimiles thereof, shall be an "authorized signature" of the corporation and
shall be affixed to such checks, notes, and evidences of indebtedness in such
manner, and by such persons, as the Board of Directors shall authorize.

Section 6-c Corporate Seal. The corporate seal shall have inscribed
--------------------------
thereon the name of the corporation, with such device or devices as the Board of
Directors may determine. The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or in any other manner reproduced.

Section 6-d Amendment of By-Laws. The By-Laws may be adopted, amended
--------------------------------
or repealed by the Board of Directors at any meeting, except that Sections 2-a
and 5-d, above, shall be amended or repealed only by the shareholders.

<PAGE>

EXHIBIT 23
FORM 10-K FOR 1993
FILE NO. 1-6964

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statement
of Bell Atlantic - Virginia, Inc. on Form S-3 (File No. 33-65152) of our report
dated February 7, 1994, which includes an explanatory paragraph stating that the
Company changed its method of accounting for income taxes and postemployment
benefits in 1993 and postretirement benefits other than pensions in 1991, on our
audits of the financial statements and financial statement schedules of Bell
Atlantic - Virginia, Inc. as of December 31, 1993 and December 31, 1992, and for
each of the three years in the period ended December 31, 1993, which report is
included in this Annual Report on Form 10-K.

/s/ COOPERS & LYBRAND

2400 Eleven Penn Center
Philadelphia, Pennsylvania
March 29, 1994

<PAGE>

EXHIBIT 24
BA - VA 10K

THE CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF VIRGINIA
POWER OF ATTORNEY
10-K

WHEREAS BELL ATLANTIC - VIRGINIA, INC., a Virginia corporation (hereinafter
referred to as the "Company"), will file with the Securities and Exchange
Commission on or before March 31, 1994, an Annual Report on Form 10K pursuant to
provisions of the Securities Exchange Act of 1934, as amended, and implementing
regulations thereto; and

WHEREAS, the undersigned is an officer or director, or both, of the Company
as stated below;

NOW THEREFORE, the undersigned hereby constitutes and appoints Warner F.
Brundage, Jr., Robert W. Woltz, Jr., and O. Riley Young, Jr. and each of them,
as attorneys for the purpose of executing and filing such Annual Report, and
thereafter to execute and file any amended Annual Report or supplements to such
report, hereby granting said attorneys full power to do all things necessary to
be done as fully to all intents and purposes as if the undersigned were
personally present, hereby ratifying and confirming all that said attorneys may
or shall lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, each of the undersigned has executed this power of
attorney on the 24th day of March, 1994.

\s\ William R. Battle \s\ Paula P. Brownlee
- --------------------- ---------------------
William R. Battle Paula P. Brownlee
Director Director

\s\ Warner F. Brundage, Jr. \s\ John T. Losier
- --------------------------- ------------------
Warner F. Brundage, Jr. John T. Losier
Director, Vice President Director

\s\ C. Coleman McGehee \s\ Josiah P. Rowe, III
- ---------------------- -----------------------
C. Coleman McGehee Josiah P. Rowe, III
Director Director

\s\ Dwight C. Schar \s\ Hubert R. Stallard
- ------------------- ----------------------
Dwight C. Schar Hubert R. Stallard
Director Director, President and CEO

\s\ Harrison B. Wilson
- ----------------------
Harrison B. Wilson
Director
<PAGE>

BELL ATLANTIC - VIRGINIA, INC.

STATE OF VIRGINIA
CITY OF RICHMOND

SS: ###-##-####

I HEREBY CERTIFY that on the 24th day of March, 1994, before me the
subscriber, a Notary Public of the State of Virginia, personally appeared
William R. Battle, Paula P. Brownlee, Warner F. Brundage, Jr., John T. Losier,
C. Coleman McGehee, Josiah P. Rowe, III, Dwight C. Schar, Hubert R. Stallard,
and Harrison B. Wilson known to me to be the persons described in and who
executed the foregoing instrument, and they severally duly acknowledged to me
that each of them executed the same for purposes therein expressed.

WITNESS my hand and notarial seal this 24th day of March, 1994.

\s\ Notary Public
-----------------

My commission expires:
October 31, 1996

<PAGE>

POWER OF ATTORNEY

WHEREAS, the undersigned is an officer of the Company as stated below;

NOW THEREFORE, the undersigned hereby constitutes and appoints Warner F.
Brundage, Jr. and Robert W. Woltz, Jr. and each of them, as attorneys for the
purpose of executing and filing such Annual Report, and thereafter to execute
and file any amended Annual Report or supplements to such report, hereby
granting to said attorneys full power to do all things necessary to be done as
fully to all intents and purposes as if the undersigned were personally present,
hereby ratifying and confirming all that said attorneys may or shall lawfully do
or cause to be done by virtue hereof.

IN WITNESS WHEREOF, each of the undersigned has executed this power of
attorney on the 24th day of March, 1994.

\s\ O. Riley Young, Jr.
-----------------------
O. Riley Young, Jr.
Controller

STATE OF VIRGINIA
CITY OF RICHMOND

SS: ###-##-####

I HEREBY CERTIFY that on the 24th day of March, 1994, before me the
subscriber, a Notary Public of the State of Virginia, personally appeared O.
Riley Young, Jr. known to me to be the person described in and who executed the
foregoing instrument, and he duly acknowledged to me that he executed the same
for purposes therein expressed.

WITNESS my hand and notarial seal this 24th day of March, 1994.

\s\ Notary Public
-----------------
Notary Public

My commission expires:
October 31, 1996