UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
F O R M 10 - Q
X Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended March 31, 1997
..............
or
Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from to
Commission File Number: 1-2755
......
GTE Corporation
......................................................
(Exact name of registrant as specified in its charter)
New York 13-1678633
............................................................................
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Stamford Forum, Stamford, Conn. 06904
.........................................................
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 203-965-2000
............
............................................................................
Former name, former address and former fiscal year, if changed since last
report
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 .
GTE had 954,945,935 shares of $.05 par value common stock outstanding
(excluding 27,975,444 treasury shares) at April 30, 1997.
PART I. FINANCIAL INFORMATION
GTE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31
1997 1996
(In Millions)
REVENUES AND SALES
Local services $1,633 $1,510
Network access services 1,152 1,132
Toll services 643 607
Cellular services 677 603
Directory services 186 223
Other services and sales 990 876
Total revenues and sales 5,281 4,951
OPERATING COSTS AND EXPENSES
Cost of services and sales 1,952 1,921
Selling, general & administrative 1,027 851
Depreciation and amortization 956 929
Total costs and expenses 3,935 3,701
OPERATING INCOME 1,346 1,250
OTHER (INCOME) EXPENSE
Interest expense 303 283
Interest capitalized (13) (10)
Interest income (15) (14)
Other - net 20 (3)
295 256
INCOME BEFORE INCOME TAXES 1,051 994
Income taxes 386 378
NET INCOME $ 665 $ 616
EARNINGS PER COMMON SHARE $ .69 $ .63
DIVIDENDS DECLARED PER COMMON SHARE $ .47 $ .47
AVERAGE COMMON SHARES 960 975
The accompanying notes are an integral part of these statements.
- 1 -
GTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated net income for the first quarter of 1997 was $665 million, or
$.69 per share, compared with $616 million, or $.63 per share in the first
quarter of last year. The results for the first quarter of 1996 include an
after-tax gain on the sale of nonstrategic telephone properties of $8
million, or $.01 per share. Excluding this gain, earnings per share for the
first quarter of 1997 increased 11 percent over the first quarter of 1996.
Operating income increased 8 percent to $1.35 billion, compared with $1.25
billion reported in the first quarter of last year, reflecting continued
growth in GTE's core wireline and wireless revenues and the favorable impact
of ongoing operating cost reduction programs. The revenue growth and
improved cost position were offset, in part, by higher selling and marketing
expenses associated with significant growth in wireless and long-distance
customers, the continued expansion of Internet access and video activities
and the launch of personal communications services in the Cincinnati area.
Consolidated revenues and sales for the first quarter increased 7 percent to
$5.28 billion, compared to $4.95 billion in the first quarter of last year.
This increase primarily resulted from continued growth in core domestic and
international wireline and wireless services.
For the first quarter of 1997, minutes of use of GTE's domestic
local-exchange network for long-distance calling grew at an annual rate of
13.8 percent, while total domestic access lines increased 8 percent to 20.3
million. Access lines per employee, a key indicator of productivity,
increased from 298 a year ago to 327, representing a 10 percent improvement.
Internationally, GTE serves 5.8 million access lines, an increase of 4
percent over the first quarter of 1996.
Domestic cellular service revenues in the first quarter of 1997 totaled $617
million, an 11 percent increase over the same period last year, as customer
growth continued. During the first quarter of 1997, GTE added 260,000 new
domestic cellular customers bringing total U.S. customers served to
4,009,000 an increase of 30 percent over a year ago. Customer growth at
GTE's international operations increased 43 percent, bringing total cellular
customers served worldwide to 4.8 million.
GTE is one of the largest publicly held telecommunications companies in the
world. In the United States, GTE offers local and wireless service in 29
states and long-distance service in all 50 states. GTE was the first among
its peers to offer "one-stop shopping" for local, long-distance and Internet
access services. Outside the United States, where GTE has operated for more
than 40 years, GTE serves over 6.5 million customers. GTE is also a leader
in government and defense communications systems and equipment, directories
and telecommunication-based information services, and aircraft-passenger
telecommunications.
- 2 -
GTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
Other (Income) Expense
Other-net for the first quarter of 1996 includes a pre-tax gain of $12
million, resulting from the sale of nonstrategic local-exchange telephone
properties.
CAPITAL RESOURCES AND LIQUIDITY
Cash from operations for the first three months of 1997 totaled $1.69
billion compared to $1.64 billion for the first quarter of 1996. The
increase in cash from operations is primarily due to improved operating
results in the first quarter of 1997.
Cash used in investing activities for the first three months of 1997 totaled
$857 million, compared with $891 million in the first quarter of 1996.
Capital expenditures for the first quarter of 1997 totaled $800 million
compared with $729 million in the same period last year. For the full year
1997, capital expenditures are expected to be approximately $4.7 billion
compared with $4.1 billion in 1996. The majority of new investment is being
made in GTE's telephone operations to meet the demands of growth, modernize
facilities and position GTE as a low-cost provider of high-quality voice,
data and video telecommunications services. Significant capital investments
are also being made in GTE's other businesses, such as mobile-cellular, to
increase capacity and continue to improve and expand the network.
In addition, under the terms of a recently announced transaction, which was
approved by the Board of Directors of both companies, GTE has commenced a
cash tender offer to acquire all the outstanding shares of BBN Corporation
("BBN") common stock at a price of $29 per share, or approximately $616
million based on the number of shares of BBN stock currently outstanding.
As soon as practicable following the conclusion of the tender offer, GTE
will initiate a merger through which any remaining shares of BBN not owned
by GTE will be converted into cash at the cash tender offer price in the
merger. BBN, based in Cambridge, Massachusetts, is a leading provider of
high performance end-to-end Internet solutions such as World Wide Web site
hosting, network security, consulting, systems integration, and dedicated
and dial-up Internet access for government and commercial customers. Its
2,200 employees have extensive experience in leading-edge Internet and other
telecommunications applications. Twenty-eight years ago, BBN created
ARPANET, the forerunner of the Internet.
Cash used in financing activities for the first three months of 1997 totaled
$297 million, compared with $692 million in the same period last year.
During the first quarter of 1997, dividend payments of $452 million and the
repurchase of 8.6 million shares of GTE common stock for $402 million were
partially offset by a $613 million increase in long-term borrowings and
preferred securities outstanding.
In March 1997, GTE's senior debt was upgraded by Standard and Poor's to an
"A" rating. This rating along with the investment grade ratings of GTE's
subsidiaries provide ready access to the capital markets at reasonable rates
and provides GTE with the financial flexibility necessary to pursue growth
- 3 -
GTE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
opportunities as they arise. At March 31, 1997, GTE had $4.5 billion of
unused bank lines of credit available to back up commercial paper borrowings
and for working capital requirements.
RECENT DEVELOPMENTS
On May 7, 1997, in accordance with the Telecommunications Act of 1996 ("the
Act"), the Federal Communications Commission ("FCC") announced its decisions
concerning price caps, access charge reform, and universal service. The
text of the universal service order was released on May 8, 1997. The FCC
price cap and access reform orders are expected to be released by May 20,
1997. GTE is currently assessing the effect of these recent decisions.
GTE is continuing to negotiate with requesting carriers over the terms of
interconnection, unbundled network elements and resale rates. In some
cases, the parties have been unable to agree within the statutory period for
negotiation and have gone to arbitration before various state regulatory
commissions. Since November 1996, a number of state commission decisions
determining the prices and terms of unresolved issues were released.
Subsequent decisions are expected to be issued throughout 1997.
GTE is challenging state arbitration decisions in all cases where GTE
believes Public Utility Commissions have made arbitrary decisions that are
inconsistent with the pro-competitive objective of the Act. GTE fully
endorses genuine local competition. In 1996 and early 1997, GTE filed one
or more complaints in Federal District Court in each of the following
states: California, Florida, Hawaii, Illinois, Indiana, Iowa, Kentucky,
Michigan, Minnesota, Missouri, Nebraska, New Mexico, Ohio, Oklahoma, Oregon,
Pennsylvania, Texas, Virginia, Washington and Wisconsin. Several complaints
have been dismissed without prejudice to refiling because approval of
arbitrated agreements have not been received from state commissions. As
such approvals are obtained, GTE is filing new complaints.
In May 1997, GTE announced initiatives to become a leading national provider
of telecommunications services, including the acquisition of BBN
Corporation, a leading provider of end-to-end Internet solutions. In
addition, GTE announced a strategic alliance with Cisco Systems, Inc. to
jointly develop enhanced data and Internet services for customers; and, the
purchase of a national, state-of-the-art fiber-optic network from Qwest
Communications. For additional information, including the modification of
certain financial projections previously made by GTE, reference is made to
GTE Corporation's Form 8-K and Schedule 14D-1 and 13D filed on May 6, 1997
and May 12, 1997, respectively, which are incorporated herein by reference.
In April 1997, GTE announced the relocation of its corporate-staff functions
to the greater-Dallas area, where its Telephone Operations and Directories
businesses are headquartered. The transfers to Dallas and the consolidation
of certain staffs are expected to begin within the next few months, and will
continue through 1998. GTE is continuing to develop the specific transition
plan associated with the announcement which will determine the timing and
extent of any financial impact.
- 4 -
GTE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(In Millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 942 $ 405
Receivables, less allowances
of $316 and $299 million 4,232 4,482
Inventories and supplies 811 673
Deferred income tax benefits 177 200
Other 335 273
Total Current Assets 6,497 6,033
PROPERTY, PLANT AND EQUIPMENT, at cost 53,709 53,481
Accumulated depreciation (31,039) (30,579)
Total Property, Plant and Equipment, net 22,670 22,902
INVESTMENTS AND OTHER ASSETS:
Employee benefit plans 3,774 3,639
Franchises, goodwill and other intangibles,
net of accumulated amortization of
$507 and $488 million 2,495 2,507
Investments in unconsolidated companies 2,103 2,035
Other assets 1,401 1,306
Total Investments and Other Assets 9,773 9,487
Total Assets $38,940 $38,422
The accompanying notes are an integral part of these statements.
- 5 -
GTE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(In Millions)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term obligations, including
current maturities $ 2,234 $ 2,497
Accounts payable and accrued expenses 3,977 4,156
Taxes payable 932 754
Dividends payable 471 472
Other 470 435
Total Current Liabilities 8,084 8,314
Long-term debt 13,924 13,210
Employee benefit plans 4,734 4,688
Deferred income taxes 1,548 1,474
Minority interests in equity of subsidiaries 2,329 2,316
Other liabilities 1,099 1,084
Total Liabilities 31,718 31,086
SHAREHOLDERS' EQUITY:
Common stock - shares issued 982,551,954
and 980,911,281 49 49
Additional paid-in capital 7,270 7,248
Retained earnings 1,585 1,370
Guaranteed ESOP obligations (568) (575)
Treasury stock- 25,489,605 and
17,813,275 shares, at cost (1,114) (756)
Total Shareholders' Equity 7,222 7,336
Total Liabilities and Shareholders' Equity $38,940 $38,422
The accompanying notes are an integral part of these statements.
- 6 -
GTE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31
1997 1996
(In Millions)
Operations
Net income $ 665 $ 616
Adjustments to reconcile net income
to net cash from operations:
Depreciation and amortization 956 929
Change in current assets and current
liabilities, excluding the effects of
acquisitions and dispositions (6) 17
Deferred income taxes and other - net 76 77
Net cash from operations 1,691 1,639
Investing
Capital expenditures (800) (729)
Other - net (57) (162)
Net cash used in investing (857) (891)
Financing
Common stock issued 107 157
Purchase of treasury stock (402) (205)
Long-term debt and preferred securities issued 613 546
Long-term debt and preferred securities retired (88) (82)
Dividends paid (452) (456)
Decrease in short-term obligations,
excluding current maturities (66) (697)
Other - net (9) 45
Net cash used in financing (297) (692)
Increase in cash and cash equivalents 537 56
Cash and cash equivalents:
Beginning of period 405 332
End of period $ 942 $ 388
Cash paid during the period for:
Interest $ 203 $ 198
Income taxes 125 119
The accompanying notes are an integral part of these statements.
- 7 -
GTE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION:
The unaudited Condensed Consolidated Financial Statements included
herein have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. However, in the opinion of management of the Company, the
Condensed Consolidated Financial Statements include all adjustments,
which consist only of normal recurring accruals, necessary to present
fairly the financial information for such periods. These Condensed
Consolidated Financial Statements should be read in conjunction with
the consolidated financial statements and the notes thereto included in
the Company's 1996 Annual Report on Form 10-K.
(2) PROPERTY SALES:
In connection with the program to sell or trade a small percentage of
nonstrategic domestic local-exchange telephone properties, during the
first quarter of 1996, GTE recorded a pre-tax gain of $12 million,
which increased net income by $8 million, or $.01 per share.
(3) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per
Share" ("FAS 128"), establishing standards for computing and presenting
earnings per share ("EPS"). The new standard is effective for year-end
1997 financial statements. Upon adoption, all prior-period EPS data,
including the first three quarters of 1997, must be restated.
The goal of FAS 128 is to harmonize the EPS calculation in the United
States with those common in other countries and to simplify complex
provisions of APB Opinion No. 15, "Earnings per Share" ("APB 15"). The
primary change is that the concept of primary EPS has been replaced by
basic EPS. Basic EPS is computed by dividing reported earnings
available to common stockholders by weighted average shares
outstanding. No dilution for any potentially dilutive securities is
included. Fully diluted EPS, now called diluted EPS, is still
required.
As required, GTE currently calculates EPS in accordance with APB 15.
Had GTE calculated EPS in accordance with FAS 128, basic EPS and
diluted EPS would not have been materially different than the amounts
reported as primary and fully diluted EPS in accordance with APB 15.
- 8 -
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Annual Meeting - April 16, 1997
(b) Proxies for the meeting were solicited pursuant to Regulation
14A. There was no solicitation in opposition to management's
nominees as listed in the proxy statement. All of
management's nominees as listed in the proxy statement were
elected, the vote on said proposal being as follows:
Shares Voted
Directors Shares For Shares Withheld
Class II Directors:
James R. Barker 788,906,809 24,536,890
Robert F. Daniell 787,993,791 25,449,908
Richard W. Jones 780,803,138 32,640,561
Michael T. Masin 787,696,448 25,747,252
(c) Other matters voted upon:
Proposal to Ratify the Appointment of Auditors
Shareholders ratified the appointment of Arthur Andersen LLP to
conduct the annual audit of the financial statements of GTE
Corporation and its subsidiary companies for the year ending
December 31, 1997. The vote was:
FOR - 798,141,691 shares, or 98.98 percent of the shares voted.
AGAINST - 8,249,700 shares, or 1.02 percent of the shares voted.
ABSTENTIONS - 7,052,309 shares.
Proposal to Adopt the GTE Corporation 1997 Executive
Incentive Plan
Shareholders voted for the adoption of the GTE Corporation 1997
Executive Incentive Plan. The vote was:
FOR - 716,625,423 shares, or 90.05 percent of the shares voted.
AGAINST - 79,215,808 shares, or 9.95 percent of the shares voted.
ABSTENTIONS - 17,602,467 shares.
- 9 -
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - (Continued)
Proposal to Adopt the GTE Corporation 1997 Long-Term
Incentive Plan
Shareholders voted for the adoption of the GTE Corporation 1997
Long-Term Incentive Plan. The vote was:
FOR - 694,163,149 shares, or 87.18 percent of the shares voted.
AGAINST - 102,054,780 shares, or 12.82 percent of the shares voted.
ABSTENTIONS - 17,225,770 shares.
Proposal to Eliminate the Staggered Election of Directors
Shareholders voted against a shareholder proposal to eliminate the
staggered election of Directors. The vote was:
FOR - 287,725,149 shares, or 42.92 percent of the shares voted.
AGAINST - 382,617,749 shares, or 57.08 percent of the shares voted.
ABSTENTIONS - 19,938,085 shares.
BROKERS NON-VOTES - 123,162,716 shares.
Proposal that the Board of Directors Provide a Comprehensive Report
on Foreign Military Sales
Shareholders voted against a shareholder proposal to require the
Board of Directors to provide a comprehensive report on GTE's
foreign military sales. The vote was:
FOR - 110,589,976 shares, or 17.00 percent of the shares voted.
AGAINST - 539,855,667 shares, or 83.00 percent of the shares voted.
ABSTENTIONS - 39,835,440 shares.
BROKERS NON-VOTES - 123,162,616 shares.
- 10 -
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - (Continued)
Proposal that the Rights Issued Under GTE's Rights Plan be
Redeemed or Put to a Shareholder Vote
Shareholders voted against a shareholder proposal to redeem
the Rights issued under GTE's Rights Plan or submit the Rights
Plan to a shareholder vote. The vote was:
FOR - 331,570,682 shares, or 49.67 percent of the shares voted.
AGAINST - 335,961,106 shares, or 50.33 percent of the shares voted.
ABSTENTIONS - 22,749,295 shares.
BROKERS NON-VOTES - 123,162,616 shares.
Proposal to Establish Criteria to Limit Executive Officers'
Compensation
Shareholders voted against a shareholder proposal to establish
criteria to limit executive officers' compensation so that it does
not exceed 75 times the wages of the average hourly employee and
to more closely link executive wages and compensation to company
profits. The vote was:
FOR - 120,540,800 shares, or 18.09 percent of the shares voted.
AGAINST - 545,655,095 shares, or 81.91 percent of the shares voted.
ABSTENTIONS - 24,095,131 shares.
BROKERS NON-VOTES - 123,152,673 shares.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K.
(11) Statement re: Calculation of earnings per common
share
(12) Statement re: Calculation of the ratio of earnings to
fixed charges
(23) Consent of Independent Public Accountants
(27) Financial Data Schedule
(b) GTE filed a report on Form 8-K dated January 21, 1997 under
Item 7, "Financial Statements and Exhibits." No financial
information was included with this report. GTE also filed a
report on Form 8-K dated January 28, 1997 under Item 7,
"Financial Statements and Exhibits." Financial information
was included with this report.
- 11 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GTE CORPORATION
.............................
(Registrant)
Date: May 14, 1997 By Lawrence R. Whitman
.............................
Lawrence R. Whitman
Vice President - Controller
Date: May 14, 1997 By Marianne Drost
.............................
Marianne Drost
Secretary
- 12 -
EXHIBIT 11
GTE CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER COMMON SHARE
Three Months Ended
March 31
1997 1996
(In Thousands)
Consolidated net income $665,347 $616,278
Adjustments to consolidated net income:
Add - Interest expense, net of tax effect, on
employees' stock plan - 235
Adjusted consolidated net income $665,347 $616,513
Average common shares 960,434 974,646
Adjustments to common shares:
Add - Employees' stock and stock option plans 1,692 2,691
Adjusted average common shares 962,126 977,337
EARNINGS PER COMMON SHARE:
Primary (1) $ .69 $ .63
Fully diluted (2) $ .69 $ .63
(1) Computed by dividing consolidated net income for the periods by the
average common shares outstanding. Common stock equivalents are
excluded from this computation since they do not have a 3% dilutive
effect.
(2) Computed assuming the exercise of those stock plans and options that
would have a dilutive effect.
(a) Equivalent common shares to be added to average shares for the
employees' stock plan, stock ownership plan and stock options
are computed according to "treasury stock" method.
(b) Consolidated net income for the periods is adjusted to reflect
the increase in income for the interest accrued, net of tax
effect, on funds received from installments under the employees'
stock plan.
<TABLE>
Exhibit 12
GTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF THE RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)
(Unaudited)
<CAPTION>
Three Months Ended Years Ended December 31
March 31, 1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Net earnings available for fixed charges:
Income from continuing operations $ 665,347 $2,798,270 $2,537,949 $2,440,869 $ 971,978 $1,760,704
Add (deduct) -
Income taxes 386,015 1,613,261 1,466,426 1,532,482 567,747 966,589
Interest expense 303,251 1,146,481 1,150,625 1,139,233 1,298,234 1,475,670
Capitalized interest (net of
amortization) (5,876) (34,984) (22,971) (6,045) (3,421) (4,931)
Preferred stock dividends of Parent - - 5,598 9,910 17,825 26,331
Dividends on preferred securities of
subsidiaries 26,615 106,643 98,604 18,252 22,162 23,429
Additional income requirement on preferred
dividends of subsidiaries 2,394 9,640 9,664 11,426 12,739 12,671
Minority interests 41,661 149,467 145,437 140,464 112,335 112,425
Portion of rent expense representing
interest 31,562 130,660 128,034 139,715 153,058 196,533
1,450,969 5,919,438 5,519,366 5,426,306 3,152,657 4,569,421
Deduct - Minority interests (63,965) (263,122) (246,678) (242,937) (236,944) (248,979)
Adjusted earnings available
for fixed charges from
continuing operations $1,387,004 $5,656,316 $5,272,688 $5,183,369 $2,915,713 $4,320,442
Fixed Charges:
Interest charges $ 303,251 $1,146,481 $1,150,625 $1,139,233 $1,298,234 $1,475,670
Dividends on preferred secrities
of subsidiaries 26,615 106,643 98,604 18,252 22,162 23,429
Additional income requirement on preferred
dividends of subsidiaries 2,394 9,640 9,664 11,426 12,739 12,671
Portion of rent expense representing
interest 31,562 130,660 128,034 139,715 153,058 196,533
363,822 1,393,424 1,386,927 1,308,626 1,486,193 1,708,303
Deduct - Minority interests (16,769) (68,166) (70,052) (68,096) (78,421) (86,504)
Adjusted fixed charges $ 347,053 $1,325,258 $1,316,875 $1,240,530 $1,407,772 $1,621,799
Ratio of Earnings to Fixed Charges - continuing
operations 4.00 4.27 4.00 4.18 2.07 2.66
</TABLE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report, dated January 28, 1997, on the consolidated
financial statements and supporting schedule of GTE Corporation and
subsidiaries included in GTE Corporation's Form 10-K filed on March 18,
1997, into the previously filed Registration Statement on Form S-8 of GTE
Corporation (File No. 33-20178)
ARTHUR ANDERSEN LLP
Stamford, Connecticut
May 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 942
<SECURITIES> 0
<RECEIVABLES> 4,232
<ALLOWANCES> 0
<INVENTORY> 811
<CURRENT-ASSETS> 6,497
<PP&E> 53,709
<DEPRECIATION> 31,039
<TOTAL-ASSETS> 38,940
<CURRENT-LIABILITIES> 8,084
<BONDS> 13,924
<COMMON> 49
0
0
<OTHER-SE> 7,173
<TOTAL-LIABILITY-AND-EQUITY> 38,940
<SALES> 5,281
<TOTAL-REVENUES> 5,281
<CGS> 3,935
<TOTAL-COSTS> 3,935
<OTHER-EXPENSES> 20
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 303
<INCOME-PRETAX> 1,051
<INCOME-TAX> 386
<INCOME-CONTINUING> 665
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 665
<EPS-PRIMARY> .69
<EPS-DILUTED> .69
</TABLE>
