<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, 2000
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 2-33059
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
HAWAII 99-0049500
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1255 Corporate Drive, SVC04C08, Irving, Texas 75038
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
Registrant's telephone number, including area code 972-507-5000
(Former name, former address and former fiscal year, if changed since
last report)
The registrant, a wholly-owned subsidiary of GTE Corporation, meets the
conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is
therefore filing this form with reduced disclosure format pursuant to General
Instruction H(2).
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
The Company had 10,000,000 shares of $25 par value common stock outstanding at
April 30, 2000. The Company's common stock is 100% owned by GTE Corporation.
===============================================================================
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
2000 1999
------------- --------------
(Dollars in Millions)
<S> <C> <C>
REVENUES AND SALES
Local services $ 71.4 $ 68.4
Network access services 41.7 45.2
Other services and sales 42.6 42.9
------------- --------------
Total revenues and sales 155.7 156.5
------------- --------------
OPERATING COSTS AND EXPENSES
Cost of services and sales 67.3 61.6
Selling, general and administrative 29.6 38.1
Depreciation and amortization 31.5 31.9
------------- --------------
Total operating costs and expenses 128.4 131.6
------------- --------------
OPERATING INCOME 27.3 24.9
OTHER (INCOME) EXPENSE
Interest - net 8.9 9.2
Other - net 0.3 (0.7)
------------- --------------
INCOME BEFORE INCOME TAXES 18.1 16.4
Income taxes 6.3 4.7
------------- --------------
NET INCOME $ 11.8 $ 11.7
============= ==============
</TABLE>
Per share data is omitted since the Company's common stock is 100% owned by GTE
Corporation.
The accompanying notes are an integral part of these statements.
1
<PAGE> 3
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------- ---------------
(Dollars in Millions)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 3.2 $ 2.3
Receivables, less allowances of $6.4 million and $4.2 million 133.7 156.1
Affiliate receivables 7.1 14.5
Inventories and supplies 7.3 5.5
Prepayments and other 16.5 16.1
--------------- ---------------
Total current assets 167.8 194.5
--------------- ---------------
Property, plant and equipment, at cost 2,088.1 2,069.2
Accumulated depreciation (1,259.5) (1,233.9)
--------------- ---------------
Total property, plant and equipment, net 828.6 835.3
--------------- ---------------
Prepaid pension costs 321.0 308.3
Other assets 22.9 19.3
--------------- ---------------
Total assets $ 1,340.3 $ 1,357.4
=============== ===============
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE> 4
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited) - Continued
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------- --------------
(Dollars in Millions)
<S> <C> <C>
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Current maturities of long-term debt $ 3.0 $ 3.0
Note payable to affiliate 82.4 101.7
Accounts payable 50.1 47.8
Affiliate payables 27.1 26.1
Advanced billings and customer deposits 23.5 14.2
Dividends payable 27.0 17.0
Accrued interest 5.1 12.5
Other 27.8 32.2
--------------- ---------------
Total current liabilities 246.0 254.5
--------------- ---------------
Long-term debt 460.8 461.6
Deferred income taxes 222.4 210.9
Employee benefit plans and other 24.8 29.1
--------------- ---------------
Total liabilities 954.0 956.1
--------------- ---------------
Shareholder's equity
Common stock (10,000,000 shares issued) 250.0 250.0
Additional paid-in capital 93.4 93.3
Retained earnings 42.9 58.0
--------------- ---------------
Total shareholder's equity 386.3 401.3
--------------- ---------------
Total liabilities and shareholder's equity $ 1,340.3 $ 1,357.4
=============== ===============
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 5
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
2000 1999
------- -------
(Dollars in Millions)
<S> <C> <C>
OPERATIONS
Net income $ 11.8 $ 11.7
Adjustments to reconcile net income to net cash from operations:
Depreciation and amortization 31.5 31.9
Employee retirement benefits (14.4) (10.1)
Provision for uncollectible accounts 2.1 1.9
Changes in current assets and current liabilities 26.7 18.5
Deferred income taxes and other - net 4.5 12.8
------- -------
Net cash from operations 62.2 66.7
------- -------
INVESTING
Capital expenditures (24.4) (15.8)
Other - net -- 0.5
------- -------
Net cash used in investing (24.4) (15.3)
------- -------
FINANCING
Long-term debt retired (0.6) (4.4)
Dividends paid (17.0) (18.5)
Net change in affiliates notes (19.3) (26.0)
------- -------
Net cash used in financing (36.9) (48.9)
------- -------
Increase in cash and cash equivalents 0.9 2.5
Cash and cash equivalents:
Beginning of period 2.3 1.3
------- -------
End of period $ 3.2 $ 3.8
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 6
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE 1. BASIS OF PRESENTATION
GTE Hawaiian Telephone Company Incorporated (the Company) is incorporated under
the laws of the State of Hawaii and is a subsidiary of GTE Corporation (GTE).
The accompanying unaudited condensed consolidated financial statements have
been prepared based upon Securities and Exchange Commission (SEC) rules that
permit reduced disclosure for interim periods. These condensed consolidated
financial statements reflect all adjustments that are necessary for a fair
presentation of results of operations and financial position for the interim
periods shown including normal recurring accruals. The results for the interim
periods are not necessarily indicative of results for the full year. For a more
complete discussion of significant accounting policies and certain other
information, please refer to the consolidated financial statements and the
notes thereto included in the Company's 1999 Annual Report on Form 10-K.
Reclassifications of prior year data have been made, where appropriate, to
conform to the 2000 presentation.
NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. The statement requires
entities that use derivative instruments to measure these instruments at fair
value and record them as assets or liabilities on the balance sheet. It also
requires entities to reflect the gains or losses associated with changes in the
fair value of these derivatives, either in earnings or as a separate component
of comprehensive income, depending on the nature of the underlying contract or
transaction. The Company is currently assessing the impact of adopting SFAS No.
133, as amended, which is effective January 1, 2001.
In December 1999, the SEC issued Staff Accounting Bulletin (SAB) No. 101,
"Revenue Recognition in Financial Statements," which currently must be adopted
by June 30, 2000. SAB No. 101 provides additional guidance on revenue
recognition as well as criteria for when revenue is generally realized and
earned and also requires the deferral of incremental costs. The Company is
currently assessing the impact of SAB No. 101.
NOTE 3. DIRECTORY PUBLISHING REVENUES
Consistent with industry practice, effective January 1, 2000, GTE changed its
method of recognizing directory publishing revenues. GTE Directories, a
wholly-owned subsidiary of GTE, publishes telephone directories for which it
receives advertising revenue. Under the previous method of revenue recognition,
approximately 60% of the advertising revenue for directories published in the
Company's operating areas was recognized as revenue by the Company. The
remaining 40% was recognized as revenue by GTE Directories. Under the new
method, GTE Directories now recognizes 100% of the directory publishing
revenues. The Company, in-turn, bills GTE Directories for customer listing
information and billing and collection services. As a result, the Company's
other services and sales revenues and operating income for the three months
ended March 31, 2000 decreased $0.3 million and less than $0.1 million,
respectively, compared to the first quarter of 1999.
NOTE 4. PROPOSED MERGER WITH BELL ATLANTIC CORPORATION
Bell Atlantic and GTE have announced a proposed merger of equals under a
definitive merger agreement dated July 27, 1998. Under the terms of the
agreement, GTE shareholders will receive 1.22 shares of Bell Atlantic common
stock for each share of GTE common stock they own. Bell Atlantic shareholders
will continue to own their existing shares after the merger.
5
<PAGE> 7
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued
The merger is expected to qualify as a pooling of interests, which means that
for accounting and financial reporting purposes the companies will be treated
as if they had always been combined. At annual meetings held in May 1999, the
shareholders of each company approved the merger. The completion of the merger
is subject to a number of conditions, including certain regulatory approvals
and receipt of opinions that the merger will be tax-free. All state regulatory
commissions have now approved the merger and the only remaining approval is
required from the Federal Communications Commission.
6
<PAGE> 8
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Results of Operations
(Abbreviated pursuant to General Instruction H(2) of Form 10-Q.)
RESULTS OF OPERATIONS
Net income increased $0.1 million or 1% for the three months ended March 31,
2000, compared to the same period in 1999, primarily due to a decline in total
operating costs and expenses, partially offset by a slight decline in total
revenues.
<TABLE>
<CAPTION>
REVENUES AND SALES
(Dollars in Millions) Three Months Ended
March 31,
------------------- Increase Percent
2000 1999 (Decrease) Change
------- ------- ------- -------
<S> <C> <C> <C> <C>
Local services $ 71.4 $ 68.4 $ 3.0 4%
Network access services 41.7 45.2 (3.5) (8)%
Other services and sales 42.6 42.9 (0.3) (1)%
------- ------- -------
Total revenues and sales $ 155.7 $ 156.5 $ (0.8) (1)%
======= ======= =======
</TABLE>
Local Services Revenues
The increase in local services revenues in the first quarter of 2000 was
primarily due to an increase in revenues from operator and directory assistance
services of $2.2 million. Greater demand for enhanced custom calling features,
such as SmartCall(R) services, contributed an additional $0.5 million in local
services revenue growth for the first quarter of 2000.
Network Access Services Revenues
Minutes of use increased 4%, generating additional revenues of $0.5 million for
the first quarter of 2000 compared to the first quarter of 1999. Special access
revenues grew by $0.9 million as a result of greater demand for increased
bandwidth services by high-capacity users. The overall decrease in network
access services revenues was driven by mandated interstate and intrastate
access price reductions of $4.4 million.
<TABLE>
<CAPTION>
OPERATING COSTS AND EXPENSES
(Dollars in Millions) Three Months Ended
March 31,
-------------------- Increase Percent
2000 1999 (Decrease) Change
------- -------- --------- -------
<S> <C> <C> <C> <C>
Cost of services and sales $ 67.3 $ 61.6 $ 5.7 9%
Selling, general and administrative 29.6 38.1 (8.5) (22)%
Depreciation and amortization 31.5 31.9 (0.4) (1)%
------- -------- ------
Total operating costs and expenses $ 128.4 $ 131.6 $ (3.2) (2)%
======= ======== ======
</TABLE>
Operating costs and expenses decreased $3.2 million in the first quarter of
2000 compared to the same period in 1999. The decrease was primarily due to a
one-time special charge of $7.2 million in the first quarter of 1999 associated
with employee separation programs. Partially offsetting this decrease was an
increase in access charges of $1.1 million, primarily due to increased
competitive local exchange carrier (CLEC) activity. Higher costs of $3.3
million associated with higher telecommunications equipment sales volume and
increased costs for new initiatives, such as digital subscriber line (DSL)
service, further offset the decrease in operating costs and expenses.
7
<PAGE> 9
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Management's Discussion and Analysis of Results of Operations - Continued
(Abbreviated pursuant to General Instruction H(2) of Form 10-Q.)
OTHER INCOME STATEMENT ITEMS
The $1.0 million change in other - net was primarily due to foreign currency
translation gains from international toll operations in the first quarter of
2000.
Income taxes increased $1.6 million or 34% in the first quarter of 2000
compared to the same period in 1999, primarily due to a corresponding increase
in pretax income and a decrease in the portion of income from nontaxable
foreign operations.
INTERSTATE REGULATORY DEVELOPMENTS
During the first quarter of 2000, regulatory and legislative activity at both
the state and federal levels continued to be a direct result of the
Telecommunications Act of 1996 (Telecommunications Act). Along with promoting
competition in all segments of the telecommunications industry, the
Telecommunications Act was intended to preserve and advance universal service.
GTE continued in 2000 to meet the wholesale requirements of new competitors.
GTE has continued to sign interconnection agreements with other carriers,
providing them the capability to purchase unbundled network elements (UNEs),
resell retail services and interconnect facilities-based networks.
Universal Service
In November 1999, the Federal Communications Commission (FCC) released an order
dealing with implementation of the new FCC federal high cost support mechanism
for non-rural incumbent local exchange carriers (ILECs), including GTE. The
effective date for the new federal universal service plan was January 1, 2000.
This plan will distribute federal high cost funds to states with higher than
average costs. The role of state commissions is to ensure reasonable
comparability within the borders of a state. Federal high cost support will be
calculated by comparing the nationwide average cost with each state's average
cost per line, and providing federal support for only states that exceed 135%
of the nationwide average. To guard against rate shock, the FCC also adopted a
"hold harmless" approach so that the amount of support provided to each
non-rural carrier under the new plan will not be less than the amount provided
today. U S WEST has appealed this order on the basis that it fails to provide a
sufficient amount of support. This FCC order also established a May 1, 2000
deadline by which state commissions must create at least three deaveraged price
zones for UNEs. In January 2000, GTE requested the FCC grant a one year delay
to give state commissions ample opportunity to implement deaveraged retail
rates and establish state universal service funds in concert with UNE
deaveraging. However, on April 6, 2000, the FCC denied GTE's request for an
extension of time. The FCC expects state commissions, rather than the
individual telephone companies, to file a waiver of the May 1, 2000 deadline,
if necessary. On April 28, 2000, the FCC granted temporary waivers to seven
state commissions allowing them to delay compliance up to six months. The
remaining states that GTE operates in have already adopted permanent deaveraged
UNE rates.
OTHER DEVELOPMENTS
Proposed Merger with Bell Atlantic Corporation
Bell Atlantic and GTE have announced a proposed merger of equals under a
definitive merger agreement dated July 27, 1998. Under the terms of the
agreement, GTE shareholders will receive 1.22 shares of Bell Atlantic common
stock for each share of GTE common stock they own. Bell Atlantic shareholders
will continue to own their existing shares after the merger.
8
<PAGE> 10
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Management's Discussion and Analysis of Results of Operations - Continued
(Abbreviated pursuant to General Instruction H(2) of Form 10-Q.)
The merger is expected to qualify as a pooling of interests, which means that
for accounting and financial reporting purposes the companies will be treated
as if they had always been combined. At annual meetings held in May 1999, the
shareholders of each company approved the merger. The completion of the merger
is subject to a number of conditions, including certain regulatory approvals
and receipt of opinions that the merger will be tax-free. All state regulatory
commissions have now approved the merger and the only remaining approval is
required from the FCC. Both companies are working diligently to complete the
merger and are targeting completion of the merger in the second quarter of
2000.
Directory Publishing Revenues
Consistent with industry practice, effective January 1, 2000, GTE changed its
method of recognizing directory publishing revenues. GTE Directories, a
wholly-owned subsidiary of GTE, publishes telephone directories for which it
receives advertising revenue. Under the previous method of revenue recognition,
approximately 60% of the advertising revenue for directories published in the
Company's operating areas was recognized as revenue by the Company. The
remaining 40% was recognized as revenue by GTE Directories. Under the new
method, GTE Directories now recognizes 100% of the directory publishing
revenues. The Company, in-turn, bills GTE Directories for customer listing
information and billing and collection services. As a result, the Company's
other services and sales revenues and operating income for the three months
ended March 31, 2000 decreased $0.3 million and less than $0.1 million,
respectively, compared to the first quarter of 1999. Other services and sales
revenues and operating income for the year ended December 31, 2000 are expected
to decrease by approximately $41.1 million and $35.6 million, respectively,
compared to 1999.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. The statement requires
entities that use derivative instruments to measure these instruments at fair
value and record them as assets or liabilities on the balance sheet. It also
requires entities to reflect the gains or losses associated with changes in the
fair value of these derivatives, either in earnings or as a separate component
of comprehensive income, depending on the nature of the underlying contract or
transaction. The Company is currently assessing the impact of adopting SFAS No.
133, as amended, which is effective January 1, 2001.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements," which currently must be adopted by June 30, 2000. SAB No. 101
provides additional guidance on revenue recognition as well as criteria for
when revenue is generally realized and earned and also requires the deferral of
incremental costs. The Company is currently assessing the impact of SAB No.
101.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
In this Management's Discussion and Analysis, the Company has made
forward-looking statements. These statements are based on the Company's
estimates and assumptions and are subject to certain risks and uncertainties.
Forward-looking statements include the information concerning possible or
assumed future results of operations of the Company, as well as those
statements preceded or followed by the words "anticipates," "believes,"
"estimates," "expects," "hopes," "targets" or similar expressions. For each of
these statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995.
9
<PAGE> 11
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Management's Discussion and Analysis of Results of Operations - Continued
(Abbreviated pursuant to General Instruction H(2) of Form 10-Q.)
The future results of the Company could be affected by subsequent events and
could differ materially from those expressed in the forward-looking statements.
If future events and actual performance differ from the Company's assumptions,
the actual results could vary significantly from the performance projected in
the forward-looking statements.
The following important factors could affect the future results of the Company
and could cause those results to differ materially from those expressed in the
forward-looking statements: (1) materially adverse changes in economic
conditions in the markets served by the Company; (2) material changes in
available technology; (3) the final resolution of federal, state and local
regulatory initiatives and proceedings, including arbitration proceedings, and
judicial review of those initiatives and proceedings, pertaining to, among
other matters, the terms of interconnection, access charges, universal service,
unbundled network elements and resale rates; and (4) the extent, timing,
success and overall effects of competition from others in the local telephone
and intraLATA (local access and transport area) toll service markets.
10
<PAGE> 12
PART II. OTHER INFORMATION
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required by Item 601 of Regulation S-K.
10 Material Contracts - Letter Agreement between GTE Service
Corporation and John Appel
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
2000.
11
<PAGE> 13
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 Hawaiian Telephone Company Incorporated
-----------------------------------------------
(Registrant)
Date: May 12, 2000 /s/ Stephen L. Shore
------------ -----------------------------------------------
Stephen L. Shore
Controller
(Principal Accounting Officer)
12
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
10 Material Contracts - Letter Agreement between GTE
Service Corporation and John Appel
12 Statement re: Calculation of the Consolidated Ratio
of Earnings to Fixed Charges
27 Financial Data Schedule
</TABLE>
<PAGE> 1
Exhibit 10
PERSONAL & CONFIDENTIAL
April 26, 2000
Mr. John Appel
[Address]
[Address]
Dear John:
As we have discussed, it is important to GTE that you remain with the company at
least through the closing of the merger. That being the case, if you remain with
GTE at least through the closing (or, if later, June 30, 2000) but separate as a
result of the merger thereafter, GTE will calculate your lump sum pension
benefit using the interest rate as of July 1, 2000 or the interest rate that
would ordinarily be used given your actual separation date, whichever would
provide you with the highest lump sum benefit. This special interest rate
protection will only be applicable if you elect to receive a lump sum pension
distribution following your separation, and any increase in the amount to which
you are entitled as a result of this commitment will be payable from the general
assets of GTE.
John, I want to thank you again for your flexibility. We need your leadership
now - more than ever. I truly appreciate this additional commitment.
Sincerely,
J. Randall MacDonald
Executive Vice President -
Human Resources & Administration
JRM:wh
c: J. T. D'Angelo, Jr.
E. D. Singer
<PAGE> 1
Exhibit 12
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED AND SUBSIDIARIES
Statement of the Consolidated Ratio of Earnings to Fixed Charges
(Unaudited)
(Dollars in Millions) Three Months Ended
March 31, 2000
------------------
Net earnings available for fixed charges:
Income from continuing operations $ 11.8
Add - Income taxes 6.3
- Fixed charges 11.2
--------
Adjusted earnings $ 29.3
========
Fixed charges:
Interest expense $ 10.0
Portion of rent expense representing interest 1.2
--------
Adjusted fixed charges $ 11.2
========
RATIO OF EARNINGS TO FIXED CHARGES 2.62
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ACCOMPANYING FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,200
<SECURITIES> 0
<RECEIVABLES> 147,200
<ALLOWANCES> 6,400
<INVENTORY> 7,300
<CURRENT-ASSETS> 167,800
<PP&E> 2,088,100
<DEPRECIATION> 1,259,500
<TOTAL-ASSETS> 1,340,300
<CURRENT-LIABILITIES> 246,000
<BONDS> 460,800
0
0
<COMMON> 250,000
<OTHER-SE> 136,300
<TOTAL-LIABILITY-AND-EQUITY> 1,340,300
<SALES> 155,700
<TOTAL-REVENUES> 155,700
<CGS> 67,300
<TOTAL-COSTS> 128,400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,000
<INCOME-PRETAX> 18,100
<INCOME-TAX> 6,300
<INCOME-CONTINUING> 11,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,800
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
