<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended June 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number 1-3090
GTE FLORIDA INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 59-0397520
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
600 Hidden Ridge, HQE04B12 - Irving, Texas 75038
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code 214-718-5600
(Former name, former address and formal 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
--- ---
The Company had 23,400,000 shares of $25 par value common stock outstanding at
July 31, 1996. The Company's common stock is 100% owned by GTE Corporation.
<PAGE> 2
PART I. FINANCIAL INFORMATION
GTE FLORIDA INCORPORATED AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- -------------------------
1996 1995 1996 1995
-------- -------- -------- --------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
REVENUES AND SALES:
Local services $164,144 $155,329 $332,567 $306,979
Network access services 124,391 110,520 255,763 225,325
Toll services 18,556 21,023 37,160 41,625
Other services and sales 77,417 73,395 116,979 112,443
-------- -------- -------- --------
Total revenues and sales 384,508 360,267 742,469 686,372
-------- -------- -------- --------
OPERATING COSTS AND EXPENSES:
Cost of services and sales 137,070 133,476 274,129 258,301
Selling, general and administrative 54,388 54,191 100,427 105,816
Depreciation and amortization 91,208 71,559 165,918 141,409
-------- -------- -------- --------
Total operating costs and expenses 282,666 259,226 540,474 505,526
-------- -------- -------- --------
OPERATING INCOME 101,842 101,041 201,995 180,846
Interest - net 15,107 15,806 30,478 31,599
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 86,735 85,235 171,517 149,247
Income taxes 33,223 31,419 65,420 56,100
-------- -------- -------- --------
NET INCOME $ 53,512 $ 53,816 $106,097 $ 93,147
======== ======== ======== ========
</TABLE>
Per share data is omitted since the Company's common stock is 100% owned by GTE
Corporation (GTE).
See Notes to Condensed Consolidated Financial Statements.
1
<PAGE> 3
GTE FLORIDA INCORPORATED AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in Millions)
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- -------------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income $ 53.5 $ 53.8 $ 106.1 $ 93.1
</TABLE>
Net income remained virtually unchanged for the three months and increased 14%
or $13 for the six months ended June 30, 1996, compared to the same periods in
1995. Net income was flat for the second quarter as higher depreciation
expenses due to changes in plant balances and one-time adjustments were offset
by continuing revenue growth. The six month increase is primarily due to
higher revenues and sales, partially offset by higher operating costs and
expenses, including higher depreciation expense as mentioned above.
Revenues and Sales
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Local services $164.1 $155.4 $332.6 $307.0
Network access services 124.4 110.5 255.7 225.3
Toll services 18.6 21.0 37.2 41.6
Other services and sales 77.4 73.4 117.0 112.5
------ ------ ------ ------
Total revenues and sales $384.5 $360.3 $742.5 $686.4
</TABLE>
Total revenues and sales increased 7% or $24.2 and 8% or $56.1 for the three
and six months ended June 30, 1996, respectively, compared to the same periods
in 1995.
Local service revenues increased 6% or $8.7 and 8% or $25.6 for the three and
six months ended June 30, 1996, respectively, compared to the same periods in
1995. The number of switched access lines increased 5% for both the three and
six months ended June 30, 1996, which generated additional revenues of $5.1 and
$10, respectively. The increases also reflect growth of $2.3 and $5.4 in sales
of CentraNet(R) and custom calling features, such as SmartCall(R).
Additionally, the year-to-date increase reflects a $9.5 favorable settlement
recorded in the first quarter of 1996 from a previous rate case discussed in
Other Matters.
Network access service revenues increased 13% or $13.9 and $30.4 for the three
and six months ended June 30, 1996, respectively, compared to the same periods
in 1995. Minutes of use increased 9% for both the three and six months ended
June 30, 1996, which generated additional revenues of $7.8 and $14.5,
respectively. The three and six month increases are also due to increases of
$3 and $4.9 in special access revenues. The net effect of the May and August
1995 interstate rate changes associated with the Federal Communications
Commission's (FCC) price cap resulted in additional revenues of $1 and $5.2
during second quarter and year-to-date periods, respectively.
Toll service revenues decreased 11% or $2.4 and $4.4 for the three and six
months ended June 30, 1996, respectively, compared to the same periods in 1995.
These decreases are primarily due to the introduction of optional discount
calling plans, which effectively lowered intrastate long distance rates, and
10XXX intraLATA toll competition. These decreases are slightly offset by an
increase in toll volumes.
2
<PAGE> 4
GTE FLORIDA INCORPORATED AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
Other services and sales revenues increased 5% or $4 and 4% or $4.5 for the
three and six months ended June 30, 1996, respectively, compared to the same
periods in 1995. These increases are related to growth in Personal
Secretary(R) voice messaging services and timing of directory publications.
Operating Costs and Expenses
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -----------------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Total operating costs and expenses $282.7 $259.2 $540.5 $505.5
</TABLE>
Total operating costs and expenses increased 9% or $23.5 and 7% or $35 for the
three and six months ended June 30, 1996, respectively, compared to the same
periods in 1995. The increases primarily reflect increases in depreciation
expense of $19.6 and $24.5, mainly due to changes in plant balances and
one-time adjustments and prospective rate changes, increases of $2.1 and $5.2
in digital switching software upgrades and increases of $2.9 and $5 in
uncollectibles. The impact of $5.5 in pension settlement gains recorded in the
second quarter of 1995 was partially offset by $2.5 of settlement gains
recorded in the first quarter of 1996 which resulted from lump-sum payments
from the Company's pension plans.
Income Taxes
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
Income taxes $33.2 $31.4 $65.4 $56.1
</TABLE>
Income taxes increased 6% or $1.8 and 17% or $9.3 for the three and six months
ended June 30, 1996, respectively, compared to the same periods in 1995. These
increases are primarily due to corresponding increases in pre-tax income.
CAPITAL RESOURCES AND LIQUIDITY
Management believes that the Company has adequate internal and external
resources available to meet ongoing operating requirements for construction of
new plant, modernization of facilities and payment of dividends. The Company
generally funds its construction program from operations, although external
financing is available. Short-term borrowings can be obtained through
commercial paper borrowings or borrowings from GTE. As of July 1, 1996, the
Company participated with other affiliates in a $1,500 syndicated line of
credit to back up commercial paper borrowings. Through this shared arrangement
the Company can issue up to $300 of commercial paper.
The Company's primary source of funds during the first six months of 1996 was
cash from operations of $267.4 compared to $191.7 for the same period in 1995.
The year-to-year increase in cash from operations primarily reflects improved
results from operations and a decrease in the Company's working capital
requirements. Cash from operations is also being utilized to fund the
Company's re-engineering plan.
3
<PAGE> 5
GTE FLORIDA INCORPORATED AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
The Company's capital expenditures during the first six months of 1996 were
$115.4 compared to $127.3 for the same period in 1995. The 1996 expenditures
reflect the Company's continued access line growth and modernization of current
facilities and introduction of new products and services, including broadband
digital services and switched digital services. The Company anticipates lower
capital expenditures during the remainder of 1996 compared to 1995, as future
capital expenditures related to the deployment of broadband video networks will
be incurred by Media Ventures Incorporated, a separate subsidiary of GTE (see
discussion in Other Matters).
Cash used in financing activities was $144.7 during the first six months of
1996 compared to $64.6 for the same period in 1995. Cash used in financing
included dividend payments of $100.1 in the first six months of 1996 compared
to $72.2 for the same period in 1995. Short-term financing, including the net
change in affiliate notes, increased $26.4 for the first six months of 1996,
compared to a decrease of $22.8 for the same period in 1995. In May 1995, the
Company received a capital contribution of $50 from GTE to improve the
Company's financial position.
OTHER MATTERS
In connection with the re-engineering plan, during the first six months of
1996, costs of approximately $28.6 have been incurred, including $21.6 to
re-engineer customer service processes and $7 to re-engineer administrative
processes. Since the plan's inception at the beginning of 1994, costs of
approximately $121 have been incurred, including $80 to re-engineer customer
service processes and $17 to re-engineer administrative processes. The
restructuring costs also include $24 to consolidate facilities and operations
and other related costs. These expenditures were primarily associated with the
closure and relocation of various service centers, software enhancements and
separation benefits associated with employee reductions. Implementation of the
re-engineering plan is expected to be substantially completed by the end of
1996. As of June 30, 1996, $73.3 remains in the restructuring reserve which
management believes is adequate to cover future expenditures.
On August 1, 1996, the Federal Communications Commission (FCC) voted to release
its rules implementing Section 251 of the Telecommunications Act of 1996 (the
Telecommunications Act) dealing with interconnection, unbundling of network
elements and wholesale prices and other terms for competitive entry into
local-exchange service (Competitive Entry Terms). The terms of the FCC's
Report and Order (Order) were published on August 8, 1996, and GTE is in the
process of reviewing the Order.
The Order acknowledges that the Telecommunications Act calls for negotiation of
terms and prices for Competitive Entry Terms between the local-exchange carrier
(LEC) and the competing carriers. The Order, among other things, prescribes
the rules for interconnection of a LEC's facilities with those of carriers
competing in the local-exchange market and the pricing methodology to be used
by states in establishing interconnection rates. The FCC methodology calls for
the states to use forward-looking costs defined as Total Element Long Run
Incremental Cost (TELRIC), including a reasonable amount of forward-looking
joint and common costs. State regulatory commissions are to establish the
appropriate prices based on this methodology. The FCC also identified network
elements to be unbundled and priced by the states using the same TELRIC plus
reasonable joint and common costs. Proxy prices for the various network
elements are set out and may be used by states which have not approved cost
studies by statutory deadlines for completing any arbitration of issues
unresolved by negotiation between the LEC and other carriers. Access to the
unbundled elements are to be at technically feasible points.
Additionally, the Order mandated use of a method of determining a LEC's avoided
costs for purposes of resale rates. States are to determine the specific rates
using this methodology but, on an interim basis, may instead elect to use a
default range of rates established by the FCC. The default discount rates
range from 17% - 25% off retail rates.
To continue to support universal service, the FCC established a temporary
access framework. A competitor purchasing local service for resale or
providing only long distance service must pay full current access rates. If
unbundled local switching is purchased, the competitor must pay 75% of the
existing Transport Interconnection Charge and all of the existing Carrier
Common Line Charge. A competitor providing its own switching facility pays no
access charges even if it purchases an unbundled loop from a LEC.
The Order also provides for mutual compensation for interconnection but
presumes calling will be balanced and permits "bill and keep" arrangements. If
the LEC demonstrates calling is not balanced, interconnection prices are to be
set by the state for both carriers at the LEC's forward-looking costs.
GTE is still reviewing the impact of the approximately 700-page Order. In
addition, the FCC is scheduled to release additional rules relating to
universal service and access charge reform in the second quarter of 1997.
Until all the rules have been issued, it is difficult to determine the effect
on GTE. However, GTE has concerns about the Order as it relates to the ability
of a local-exchange carrier to recover all of its present costs from its
ongoing retail customers and the wholesale prices to be set by state regulatory
agencies pursuant to the FCC's guidelines.
GTE plans to appeal various aspects of the Order. Although it is too early to
determine the impact of these rules, GTE believes that, if implemented as
contained in the Order, they may advantage new entrants and competitors in a
LEC's territory. Thus, while the Order may contribute to some market erosion in
GTE's franchised territories, it may also advantage GTE outside of its
franchised territory.
During 1995 and the first six months of 1996, the Company had expended $10.5 on
the construction of its broadband video dialtone network in Clearwater,
Florida. In June 1996, the City of Clearwater, Florida approved a cable TV
franchise application which enabled Media Ventures Incorporated (Media
Ventures), a separate subsidiary of GTE, to begin offering cable service on
June 24, 1996. As a result of Media Ventures receiving approval to pursue
video entry as a cable operator, the network originally constructed by the
Company will be transferred at cost to Media Ventures in the third quarter of
1996. All future cable services will be offered by GTE through Media Ventures.
In 1996, GTE, through a separate subsidiary, began offering long distance
service to its customers in selected states, including Florida, marketed under
the name GTE Easy Savings Plan(SM). GTE plans to offer this service in all 28
states where it currently offers local telephone service by December 1996.
The Company submitted its 1996 annual interstate access filing on April 2,
1996, utilizing the FCC's interim price cap rules. On June 24, 1996, the FCC
ordered all local-exchange carriers (LECs) subject to price cap regulation,
including the Company, to update their GDP-PI inflation factors through the
fourth quarter of 1995. Overall, the final 1996 interstate access filing
resulted in an annual price reduction of $1, effective July 1, 1996.
4
<PAGE> 6
GTE FLORIDA INCORPORATED AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
On January 21, 1993, the Florida Public Service Commission (FPSC) issued an
order effective January 6, 1993 to reduce rates by $14.5. This order
established a midpoint return on equity of 12.2% for 1993 and beyond for all
state ratemaking purposes. The Company filed a motion for reconsideration of
the rate order and the FPSC lowered the rate reduction by $0.8. The Company
filed an appeal of various aspects of the FPSC's rate case decision with the
Florida Supreme Court. Oral arguments were heard by the Court on January 31,
1994. On July 7, 1994, the Court issued its opinion accepting the Company's
argument that the FPSC should not have made a $4.8 adjustment for expenses
associated with affiliate transactions and remanded this issue to the FPSC.
Effective May 2, 1995, the FPSC approved a $4.8 increase to certain local
rates; however, it did not approve a surcharge to recover lost revenues for the
period that the wrongful decision was in effect. Consequently, the Company
filed an appeal of the surcharge issue with the Florida Supreme Court. On
February 29, 1996, the Florida Supreme Court reversed the FPSC's surcharge
decision, finding that the Company is entitled to recovery of its erroneously
disallowed expenses for the period of May 27, 1993 through May 3, 1995. On
remand, the FPSC approved a one-time surcharge of $8.65 (in whole dollars) per
line. Based on this decision, the Company recorded $9.5 of revenues in the
first quarter of 1996. However, the Company was precluded from billing the
surcharge when the Office of Public Counsel filed a petition for hearing with
the FPSC. The petition was denied and parties are now required to file briefs
regarding the legal issues. The FPSC should rule on the surcharge during the
third quarter of 1996.
In July 1995, the Florida Legislature passed a bill which replaces earnings
regulation with price regulation and opens the local-exchange to competition.
One provision of the bill requires intrastate access rates that are higher than
interstate access rates be reduced by at least 5% annually until parity with
1994 interstate access rates is attained. The estimated impact of the
intrastate access rate reduction is $7.7 annually. The rates from the first
annual filing under these provisions should be effective October 1, 1996.
In April 1996, the FPSC issued an order which established the rates, terms and
conditions for interconnection between the Company and alternative
local-exchange carriers (ALECs). The Company filed for reconsideration of the
order which the FPSC denied. Legal options are currently being evaluated. In
June 1996, the FPSC ruled on the rates, terms and conditions for the resale of
the Company's services by ALECs. The Company has appealed the order to the
Florida Supreme Court and requested a stay of the FPSC's order pending the
Court's review.
5
<PAGE> 7
GTE FLORIDA INCORPORATED AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and temporary investments $ 10,328 $ 3,066
Receivables, less allowances of $24,344 and $17,717 323,996 332,842
Notes receivable from affiliate -- 5,412
Inventories and supplies 21,842 17,733
Deferred income tax benefits -- 9,394
Other 7,522 7,961
------------ ------------
Total current assets 363,688 376,408
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at cost 4,014,601 3,935,080
Accumulated depreciation (2,113,604) (1,985,482)
------------ ------------
Total property, plant and equipment, net 1,900,997 1,949,598
------------ ------------
OTHER ASSETS, primarily employee benefit plans 130,900 118,765
------------ ------------
Total assets $ 2,395,585 $ 2,444,771
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term obligations, including current maturities $ 28,627 $ 78,634
Accounts payable 103,298 125,435
Taxes payable 36,531 876
Accrued interest 8,823 9,111
Accrued payroll costs 35,279 38,177
Dividends payable 73,170 34,027
Accrued restructuring costs 73,292 101,905
Deferred income tax liabilities 2,402 --
Other 33,131 47,934
------------ ------------
Total current liabilities 394,553 436,099
------------ ------------
NON-CURRENT LIABILITIES:
Long-term debt 786,070 785,155
Deferred income taxes 199,696 199,598
Employee benefit plans 133,724 117,050
Other liabilities 11,067 3,293
------------ ------------
Total non-current liabilities 1,130,557 1,105,096
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred stock 60,096 60,096
Common stock (23,400,000 shares issued) 585,000 585,000
Additional paid-in capital 50,289 50,289
Retained earnings 175,090 208,191
------------ ------------
Total shareholders' equity 870,475 903,576
------------ ------------
Total liabilities and shareholders' equity $ 2,395,585 $ 2,444,771
============ ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
6
<PAGE> 8
GTE FLORIDA INCORPORATED AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------------
1996 1995
---------- ---------
(Thousands of Dollars)
<S> <C> <C>
OPERATIONS:
Net income $ 106,097 $ 93,147
Adjustments to reconcile net income
to net cash from operations:
Depreciation and amortization 165,918 141,409
Deferred income taxes 11,894 11,718
Provision for uncollectible accounts 18,916 13,934
Changes in current assets and current liabilities (41,852) (64,734)
Other - net 6,427 (3,774)
--------- ---------
Net cash from operations 267,400 191,700
--------- ---------
INVESTING:
Capital expenditures (115,430) (127,301)
--------- ---------
Cash used in investing (115,430) (127,301)
--------- ---------
FINANCING:
Long-term debt retired (71,058) (19,817)
Dividends (100,055) (72,236)
Capital contribution from GTE -- 50,000
Decrease in short-term obligations, excluding current maturities -- (38,033)
Net change in affiliate notes 26,405 15,191
Other - net -- 272
--------- ---------
Net cash used in financing (144,708) (64,623)
--------- ---------
Increase (decrease) in cash and temporary investments 7,262 (224)
Cash and temporary investments:
Beginning of period 3,066 10,527
--------- ---------
End of period $ 10,328 $ 10,303
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
7
<PAGE> 9
GTE FLORIDA INCORPORATED AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) 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 financial statements and the notes
thereto included in the Company's 1995 Annual Report on Form 10-K.
(2) Reclassifications of prior year data have been made, where appropriate, to
conform to the 1996 presentation.
8
<PAGE> 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required by Item 601 of Regulation S-K.
(12) Statement re: Calculation of the Consolidated Ratio of Earnings
to Fixed Charges
(27) Financial Data Schedule
(b) The Company filed no reports on Form 8-K during the second quarter of
1996.
9
<PAGE> 11
SIGNATURE
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 FLORIDA INCORPORATED
------------------------------
(Registrant)
Date: August 14, 1996 WILLIAM M. EDWARDS, III
--------------- ------------------------------
William M. Edwards, III
Vice President - Controller
(Principal Accounting Officer)
10
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
12 Statement re: Calculation of the Consolidated Ratio of Earnings
to Fixed Charges
27 Financial Data Schedule
</TABLE>
<PAGE> 1
Exhibit 12
GTE FLORIDA INCORPORATED AND SUBSIDIARY
STATEMENT OF THE CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1996
----------------
<S> <C>
Net earnings available for fixed charges:
Income from continuing operations $106,097
Add - Income taxes 65,420
- Fixed charges 35,805
--------
Adjusted earnings $207,322
========
Fixed charges:
Interest expense $ 32,184
Portion of rent expense
representing interest 3,621
--------
Adjusted fixed charges $ 35,805
========
RATIO OF EARNINGS TO FIXED CHARGES 5.79
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 10,328
<SECURITIES> 0
<RECEIVABLES> 348,340
<ALLOWANCES> 24,344
<INVENTORY> 21,842
<CURRENT-ASSETS> 363,688
<PP&E> 4,014,601
<DEPRECIATION> 2,113,604
<TOTAL-ASSETS> 2,395,585
<CURRENT-LIABILITIES> 394,553
<BONDS> 786,070
<COMMON> 585,000
0
60,096
<OTHER-SE> 225,379
<TOTAL-LIABILITY-AND-EQUITY> 2,395,585
<SALES> 742,469
<TOTAL-REVENUES> 742,469
<CGS> 274,129
<TOTAL-COSTS> 540,474
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,478
<INCOME-PRETAX> 171,517
<INCOME-TAX> 65,420
<INCOME-CONTINUING> 106,097
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,097
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
