GTE NORTH INC
10-Q, 1997-05-15
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
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<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 quarterly 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                              0-1210

                             GTE NORTH INCORPORATED
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                                         <C>
                WISCONSIN                                                35-1869961
     (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)
</TABLE>

Registrant's telephone number, including area code                  972-718-5600


  (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
                                  ---      ---

The Company had 978,351 shares of $1,000 stated value common stock outstanding
at April 30, 1997.  The Company's common stock is 100% owned by GTE
Corporation.
<PAGE>   2
PART I.  FINANCIAL INFORMATION

GTE North Incorporated and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                                      March 31,
                                                                             ---------------------------------
                                                                                1997                  1996
                                                                             -----------           -----------
                                                                                   (Thousands of Dollars)
<S>                                                                          <C>                   <C>
REVENUES AND SALES
  Local services                                                             $   301,691           $   281,062
  Network access services                                                        272,630               269,880
  Toll services                                                                   82,389                92,201
  Other services and sales                                                        84,939                88,418
                                                                             -----------           -----------
   Total revenues and sales                                                      741,649               731,561
                                                                             -----------           -----------

OPERATING COSTS AND EXPENSES
  Cost of services and sales                                                     212,186               257,657
  Selling, general and administrative                                             94,609               106,855
  Depreciation and amortization                                                  122,401               136,367
                                                                             -----------           -----------
   Total operating costs and expenses                                            429,196               500,879
                                                                             -----------           -----------

OPERATING INCOME                                                                 312,453               230,682

  Interest - net                                                                  29,078                28,011
                                                                             -----------           -----------

INCOME BEFORE INCOME TAXES                                                       283,375               202,671
  Income taxes                                                                   105,376                73,628
                                                                             -----------           -----------
NET INCOME                                                                   $   177,999           $   129,043
                                                                             ===========           ===========

</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 North 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
                                               March 31,
                                        ------------------------
                                         1997              1996
                                        ------            ------
         <S>                            <C>               <C>
         Net income                     $178.0            $129.0
</TABLE>

Net income increased 38% or $49 for the three months ended March 31, 1997,
compared to the same period in 1996.  This increase is primarily due to
significantly lower operating costs and expenses combined with higher revenues,
partially offset by higher income taxes.

REVENUES AND SALES

<TABLE>
<CAPTION>
                                            Three Months Ended
                                                March 31,
                                        ------------------------
                                         1997              1996
                                        ------            ------
         <S>                            <C>               <C>
         Local services                 $301.7            $281.1
         Network access services         272.6             269.9
         Toll services                    82.4              92.2
         Other services and sales         84.9              88.4
                                        ------            ------
          Total revenues and sales      $741.6            $731.6
</TABLE>

Total revenues and sales increased 1% or $10 for the three months ended March
31, 1997, compared to the same period in 1996.

Local service revenues increased 7% or $20.6 for the three months ended March
31, 1997, compared to the same period in 1996.  The number of access lines
increased 4% for the three months ended March 31, 1997, which generated
additional revenue of $4.7.  The increase is also due to growth in revenues of
$6.1 from enhanced custom calling features, such as SmartCall(R), $2.5 of growth
in revenues from CentraNet(R) services, $0.9 of growth in directory assistance
and operator services, and $1.9 of growth in revenues from integrated digital
services, enabling rapid transmission of voice, data, image and text, such as
Internet access.

Network access service revenues increased 1% or $2.7 for the three months ended
March 31, 1997, compared to the same period in 1996.  Minutes of use increased
13% for the three months ended March 31, 1997, which generated additional
revenues of $20.1.  The increase is partially offset by a decrease of $12.3 in
interstate and intrastate access revenues from the rate changes associated with
the Federal Communications Commission's (FCC's) 1995 and 1996 price caps and the
rate restructure in Michigan.  The increase is also offset by a $5.2 reduction
in access revenues associated with the conversion to an Originating
Responsibility Plan (ORP) in Illinois in July 1996, as discussed in Other
Matters. 






                                       2
<PAGE>   4
GTE North Incorporated and Subsidiary

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)


Toll service revenues decreased 11% or $9.8 for the three months ended March 31,
1997, compared to the same period in 1996.  The decrease is due to the impact of
optional discount calling plans, which effectively lowered intrastate long
distance rates.  In addition, the decrease results from intraLATA (local access
transport area) toll competition, partially offset by an increase in toll 
volumes primarily due to the Illinois conversion to an ORP (as discussed in
Other Matters).  The decrease is also due to unfavorable intrastate settlement
activity.

Other services and sales revenues decreased 4% or $3.5 for the three months
ended March 31, 1997, compared to the same period in 1996.  The decrease is
primarily due to a decline of $4.2 in intrastate billing and collection
revenues resulting from the Illinois conversion to an ORP (as discussed in
Other Matters).  This decrease is partially offset by a $1 growth in sales of
paging and voice messaging services.


OPERATING COSTS AND EXPENSES

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                         March 31,
                                                                  ------------------------
                                                                   1997              1996
                                                                  ------            ------
         <S>                                                      <C>               <C>
         Total operating costs and expenses                       $429.2            $500.9
</TABLE>

Total operating costs and expenses decreased 14% or $71.7 for the three months
ended March 31, 1997, compared to the same period in 1996.

The decrease is primarily attributable to the impact of $27.6 in  pension
settlement gains resulting from lump-sum payments from the Company's pension
plans which were recorded in the first quarter of 1997, partially offset by $7.2
in settlement gains recorded during the same period of 1996. The decrease is
also attributable to lower depreciation charges of $14, decreased application
software costs of $12.9, lower contract labor costs of $9 and lower labor and
employee benefit costs of $14.1.  The decrease is partially offset by an
increase in advertising and promotion costs of $11.9.

OTHER EXPENSES

<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                                            March 31,
                                                                      -----------------------
                                                                      1997               1996
                                                                      ----               ----
         <S>                                                          <C>                <C>
         Interest - net                                               $29.1              $28.0
         Income taxes                                                 105.4               73.6
</TABLE>

Interest - net increased 4% or $1.1 for the three months ended March 31, 1997,
compared to the same period in 1996.  This increase is primarily attributable
to higher interest expense reflecting higher interest rates on the long-term
debt refinanced from commercial paper.

Income taxes increased 43% or $31.8 for the three months ended March 31, 1997,
compared to the same period in 1996.  This increase is primarily due to a
corresponding increase in pre-tax income.





                                       3
<PAGE>   5
GTE North Incorporated and Subsidiary

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)


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 financings can be obtained through
borrowings from GTE or GTE Funding Incorporated, an affiliate of the Company.
On July 1, 1996, the Company began participating with other affiliates in a
$1,500 syndicated line of credit.  The Company has as existing shelf
registration statement outstanding for an additional $150 of debentures.

The Company's primary source of funds during the first three months of 1997 was
cash from operations of $336.1 compared to $316.8 for the same period in 1996.
The year-to-year increase in cash flow from operations is primarily
attributable to improved results from operations.  This increase is partially
offset by an increase in working capital requirements.

The Company's capital expenditures during the first three months of 1997 were
$129.9 compared to $128.6 for the same period in 1996.  The 1997 expenditures
reflect the Company's continued access line growth and modernization of current
facilities to support new products and expanded services.  The Company
anticipates capital expenditures to increase slightly during the remainder of
1997 compared to 1996, reflecting the continued expansion of existing networks
and upgrades associated with the support of expanded services.

Cash used in financing activities was $187 during the first three months of
1997 compared to $196.3 for the same period in 1996.  This included dividend
payments of $124.8 during the first three months of 1997 compared to $98.5 for
the same period in 1996.  Financing activities also included a decrease in
short-term debt of $46.3 for the first three months of 1997 compared to a
decrease of $98.2 for the same period in 1996.  The Company entered into
forward contracts to hedge against changes in interest rates related to the
1996 debt refinancing.  A $19 gain on the settlement of forward contracts is
being amortized over the life of the refinanced debt as an offset to interest
expense.


OTHER MATTERS

On May 7, 1997, in accordance with the Telecommunications Act of 1996 (the
Telecommunications Act), the 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.

The Company 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 December 1996, state commission decisions determining the
prices and terms of unresolved issues have been released in Illinois, Indiana,
Michigan, Ohio, Pennsylvania and Wisconsin.  Subsequent decisions are expected
to be issued over a period extending throughout 1997.




                                       4
<PAGE>   6
GTE North Incorporated and Subsidiary

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)


On October 6, 1996, the Illinois Commerce Commission (ICC) initiated its
investigation into the Company's total element long run incremental cost
(TELRIC ) studies and to establish rates for interconnection, unbundled network
elements (UNEs) and transport and termination of traffic.  The docket will
address wholesale rates separately from UNEs, with each issue having a separate
procedural schedule.  The determination of wholesale rates is expected to
conclude in the third quarter of 1997.  The schedule for UNEs is expected to
run through the first quarter of 1998.

On December 3, 1996, the ICC issued its decision in the Company's arbitration
with AT&T Corp. (AT&T) to determine interconnection, resale and unbundling
terms and conditions.  Interim discount rates for the Company's resold services
were set equal to Ameritech's average rate of 20.07%.  Where the Company does
not have services similar to Ameritech's, a default discount of 17.5% is to be
used.  The Company's cost studies are to be used in the interim until permanent
discounts are established in a separate generic cost proceeding.  The Company
has filed a lawsuit in the U.S. District Court challenging portions of the
ICC's arbitration determinations.  AT&T withdrew its arbitration agreement with
the Company for the ICC's consideration causing the time period for an ICC
decision to expire.  Negotiations would have to run their course before another
request for arbitration can be submitted to the ICC.  The Company remains in
negotiations with AT&T.

On December 24, 1996, the Public Utilities Commission of Ohio (PUCO) issued its
decision in the Company's arbitration with AT&T to determine interconnection,
resale and unbundling terms and conditions. The interim discount rate for the
Company's resold services was set at 12.16%. The Company filed a lawsuit in the
U.S. District Court challenging portions of the PUCO's arbitration
determinations. AT&T has filed a motion to dismiss the Company's complaint.

On January 30, 1997, the PUCO issued its decision in the Company's arbitration
with Sprint on many of the same issues that were submitted by AT&T. These
decisions reaffirmed the rate issued in the previous arbitration proceedings.
The Company filed a lawsuit in the U.S. District Court challenging portions of
the PUCO's arbitration determinations. Sprint has filed a motion to dismiss the
Company's complaint.

On December 6, 1996, the Pennsylvania Public Utility Commission (PPUC) issued
its decision in the Company's arbitration with AT&T to determine
interconnection, resale and unbundling terms and conditions. The interim
discount rate for the Company's resold services was set at 22.8%. The Company
has filed a lawsuit in the U.S. District Court challenging portions of the
PPUC's arbitration determinations. Both the PPUC and AT&T have filed motions to
dismiss the Company's complaint.

On December 19, 1996, the PPUC issued its decision in the Company's arbitration
with Sprint on many of the same issues that were submitted by AT&T. These
decisions reaffirmed the rate issued in the previous arbitration proceedings.
The Company filed a lawsuit in the U.S. District Court challenging portions of
the PPUC's arbitration determinations. Sprint has filed a motion to dismiss the
Company's complaint.

On January 17, 1997, the Company filed a petition with the Indiana Utility
Regulatory Commission (IURC) for a change to economic depreciation rates to
be effective retroactively to January 1, 1997.  An order is expected in the
third quarter of 1997.

On March 26, 1997, the IURC opened an investigation into access charge reform
and universal service.  This docket has been established in anticipation of the
FCC decisions on the same issues.  A final resolution is expected by the end of
1997.

On July 5, 1994, regulatory reform legislation was signed into law in
Wisconsin.  Effective September 1, 1994, this legislation allows local-exchange
carriers (LECs) to choose to be regulated under price cap regulation or remain
under traditional rate of return regulation.  Regardless of the LEC's choice,
the legislation opens the LEC's local-exchange franchises to competition and
requires interconnection with competitors and provision of basic local services
on an unbundled basis. If a LEC chooses to operate under the price cap plan, it
is required to file a network modernization plan.  On November 2, 1994, the
Company formally notified the Public Service Commission of Wisconsin (PSCW) that
it would elect price cap regulation as of January 1, 1995.  On April 30, 1997,
the Company filed its second year results (1996) under this regulation.  An
order approving these results is expected in the third quarter 1997.

As discussed above, Illinois went through a conversion to an Originating
Responsibility Plan (ORP) in July 1996.  Under an ORP, the Company keeps the
revenues from originating toll calls, records them as toll service revenues and
remits access charges to other LECs for calls terminating outside the Company's
service territories.  The Company also receives access revenues for intraLATA
toll calls that are terminated by the Company.  On an overall basis, the ORP
plan is intended to be income neutral, as decreases in access revenues are
offset by increases in toll revenues and corresponding increases in access
charge expenses.





                                       5
<PAGE>   7
GTE North Incorporated and Subsidiary

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)


OTHER MATTERS (CONTINUED)

In May 1997, the Company's parent, 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.





                                       6
<PAGE>   8
GTE North Incorporated and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                             March 31,            December 31,
                                                                                1997                 1996
                                                                            ------------         -------------
                                                                                (Thousands of Dollars)
<S>                                                                          <C>                   <C>
ASSETS
Current assets:
  Cash and cash equivalents                                                      $32,105               $12,975
  Receivables, less allowances of $30,760 and $31,248                            800,122               805,965
  Inventories and supplies                                                        44,102                40,996
  Deferred income tax benefits                                                    63,132                59,438
  Prepaid taxes and other                                                         78,639                24,623
                                                                            ------------         -------------
   Total current assets                                                        1,018,100               943,997
                                                                            ------------         -------------
Property, plant and equipment, at cost                                         9,250,266             9,182,323
  Accumulated depreciation                                                    (6,311,777)           (6,243,002)
                                                                            ------------         -------------
   Total property, plant and equipment, net                                    2,938,489             2,939,321
Employee benefit plans                                                           706,514               686,134
Other assets                                                                      47,711                40,476
                                                                            ------------         -------------
Total assets                                                                  $4,710,814            $4,609,928
                                                                            ============         =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Short-term obligations, including current maturities                          $197,451              $257,766
  Accounts payable                                                               253,159               227,087
  Taxes payable                                                                  208,714               159,589
  Accrued interest                                                                31,184                24,031
  Accrued payroll costs                                                          201,748               219,406
  Dividends payable                                                              190,356               124,555
  Other                                                                          219,499               198,015
                                                                            ------------         -------------
   Total current liabilities                                                   1,302,111             1,210,449
                                                                            ------------         -------------

  Long-term debt                                                               1,530,946             1,532,650
  Deferred income taxes                                                          218,181               206,386
  Employee benefit plans                                                         363,994               352,200
  Other liabilities                                                               25,402                25,426
                                                                            ------------         -------------
   Total liabilities                                                           3,440,634             3,327,111
                                                                            ------------         -------------

Preferred stock, subject to mandatory redemption                                  16,937                16,937
                                                                            ------------         -------------

Shareholders' equity:
  Preferred stock                                                                 29,033                29,033
  Common stock (978,351 shares issued)                                           978,351               978,351
  Additional paid-in capital                                                      43,110                43,110
  Retained earnings                                                              202,749               215,386
                                                                            ------------         -------------
   Total shareholders' equity                                                  1,253,243             1,265,880
                                                                            ------------         -------------
Total liabilities and shareholders' equity                                    $4,710,814            $4,609,928
                                                                            ============         =============
</TABLE>


See Notes to Condensed Consolidated Financial Statements.





                                       7
<PAGE>   9
GTE North Incorporated and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                     Three Months Ended
                                                                                         March 31,
                                                                               -------------------------------
                                                                                 1997                   1996
                                                                               ---------              --------
                                                                                    (Thousands of Dollars)
<S>                                                                            <C>                    <C>
OPERATIONS
  Net income                                                                    $177,999              $129,043
  Adjustments to reconcile net income
  to net cash from operations:
   Depreciation and amortization                                                 122,401               136,367
   Deferred income taxes                                                           7,733                16,574
   Provision for uncollectible accounts                                            8,509                10,271
   Changes in current assets and current liabilities                              25,637                30,653
   Other - net                                                                    (6,178)               (6,087)
                                                                             -----------            ----------
   Net cash from operations                                                      336,101               316,821
                                                                             -----------            ----------

INVESTING
  Capital expenditures                                                          (129,942)             (128,602)
                                                                             -----------            ----------
   Cash used in investing                                                       (129,942)             (128,602)
                                                                             -----------            ----------

FINANCING
  Long-term debt retired                                                         (15,862)              (17,598)
  Dividends                                                                     (124,835)              (98,511)
  Decrease in short-term obligations, excluding current maturities               (46,332)              (98,179)
  Other - net                                                                         --                17,943
                                                                             -----------            ----------
   Net cash used in financing                                                   (187,029)             (196,345)
                                                                             -----------            ----------
Increase (decrease) in cash and cash equivalents                                  19,130                (8,126)

Cash and cash equivalents:
  Beginning of period                                                             12,975                31,655
                                                                             -----------            ----------
  End of period                                                                  $32,105               $23,529
                                                                             ===========            ==========
</TABLE>





See Notes to Condensed Consolidated Financial Statements.





                                       8
<PAGE>   10
GTE North 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 1996
Annual Report on Form 10-K.





                                       9
<PAGE>   11
GTE North Incorporated and Subsidiary
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 first quarter
             of 1997.





                                       10
<PAGE>   12
                                   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.


<TABLE>
<S>                                                               <C>
                                                                        GTE North Incorporated
                                                                  ----------------------------------
                                                                             (Registrant)

Date:            May 15, 1997                                           William M. Edwards, III
      --------------------------------------                      ----------------------------------
                                                                        William M. Edwards, III
                                                                      Vice President - Controller
                                                                    (Principal Accounting Officer)
</TABLE>





                                       11
<PAGE>   13
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 North Incorporated and Subsidiary

STATEMENT OF THE CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                  Three Months
                                                                      Ended
                                                                     March 31,
                                                                       1997
                                                                    ----------
<S>                                                                   <C>
Net earnings available for fixed charges:
  Income from continuing operations                                   $177,999
  Add - Income taxes                                                   105,376
       - Fixed charges                                                  32,523
                                                                    ----------
Adjusted earnings                                                     $315,898
                                                                    ==========
Fixed charges:
  Interest expense                                                     $30,360
  Portion of rent expense
     representing interest                                               2,163
                                                                    ----------
Adjusted fixed charges                                                 $32,523
                                                                    ==========
RATIO OF EARNINGS TO FIXED CHARGES                                        9.71
</TABLE>

<TABLE> <S> <C>

<ARTICLE> 5
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1997
<PERIOD-END>                               MAR-31-1997
<CASH>                                          32,105
<SECURITIES>                                         0
<RECEIVABLES>                                  830,882
<ALLOWANCES>                                    30,760
<INVENTORY>                                     44,102
<CURRENT-ASSETS>                             1,018,100
<PP&E>                                       9,250,266
<DEPRECIATION>                               6,311,777
<TOTAL-ASSETS>                               4,710,814
<CURRENT-LIABILITIES>                        1,302,111
<BONDS>                                      1,530,946
                           16,937
                                     29,033
<COMMON>                                       978,351
<OTHER-SE>                                     245,859
<TOTAL-LIABILITY-AND-EQUITY>                 4,710,814
<SALES>                                        741,649
<TOTAL-REVENUES>                               741,649
<CGS>                                          212,186
<TOTAL-COSTS>                                  429,196
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              29,078
<INCOME-PRETAX>                                283,375
<INCOME-TAX>                                   105,376
<INCOME-CONTINUING>                            177,999
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   177,999
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
        

</TABLE>



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