<PAGE>1
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, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-2222
ILLINOIS BELL TELEPHONE COMPANY
(Incorporated under the laws of the State of Illinois)
225 W. Randolph Street, Chicago, Illinois 60606
I.R.S. Employer Identification Number 36-1253600
Telephone Number - (800) 257-0902
THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF AMERITECH 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
---- ----
At April 30, 1996, 81,938,121 common shares were outstanding.
<PAGE>2
Part I - Financial Information
------------------------------
The following condensed financial statements have been prepared by Illinois
Bell Telephone Company (the Company) pursuant to the rules and regulations
of the Securities and Exchange Commission (SEC) and, in the opinion of the
Company, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair statement of results for each period
shown. 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 SEC
rules and regulations. The Company believes that the disclosures made are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's latest Annual Report on Form 10-K.
CONDENSED STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
(Dollars in Millions)
(Unaudited)
Three Months Ended
March 31
-------------
1996 1995
---- ----
Revenues................................. $ 897.1 $ 809.3
--------- ---------
Operating Expenses
Employee-related expenses.............. 203.8 199.7
Depreciation and amortization.......... 140.7 128.8
Other operating expenses............... 292.8 243.8
Restructuring credit................... -- (76.9)
Taxes other than income taxes.......... 19.5 17.2
--------- ---------
656.8 512.6
--------- ---------
Operating income......................... 240.3 296.7
Interest expense......................... 28.1 28.7
Other (income) expense, net.............. (3.5) 0.1
--------- ---------
Income before income taxes............... 215.7 267.9
Income taxes............................. 84.9 100.8
--------- ---------
Net income............................... 130.8 167.1
Accumulated deficit,
beginning of period.................... (465.8) (608.5)
Less, dividends...................... 130.3 134.5
--------- ---------
Accumulated deficit,
end of period.......................... $ (465.3) $ (575.9)
========= =========
See Notes to Condensed Financial Statements.
<PAGE>3
CONDENSED BALANCE SHEETS
(Dollars in Millions)
Mar. 31, 1996 Dec. 31, 1995
------------- -------------
(Unaudited) (Derived from
Audited
Financial
Statements)
ASSETS
- ------
Current assets
Cash and temporary cash investments......... $ 0.2 $ 0.3
Receivables, net
Customers................................. 753.8 745.8
Ameritech and affiliates.................. 53.8 39.5
Other..................................... 38.2 29.9
Material and supplies....................... 13.3 17.8
Prepaid and other........................... 20.3 26.4
--------- ---------
879.6 859.7
--------- ---------
Property, plant and equipment................ 8,550.7 8,444.7
Less, accumulated depreciation............... 4,803.4 4,689.4
--------- ---------
3,747.3 3,755.3
--------- ---------
Investments, primarily in affiliates......... 77.4 85.5
Other assets and deferred charges............ 280.6 279.8
--------- ---------
Total assets................................. $ 4,984.9 $ 4,980.3
========= =========
See Notes to Condensed Financial Statements.
<PAGE>4
CONDENSED BALANCE SHEETS (continued)
(Dollars in Millions)
Mar. 31, 1996 Dec. 31, 1995
------------- -------------
(Unaudited) (Derived from
Audited
Financial
Statements)
LIABILITIES AND SHAREOWNER'S EQUITY
Current liabilities
Debt maturing within one year
Ameritech............................... $ 688.4 $ 544.0
Other................................... 1.6 1.3
Accounts payable
Ameritech Services, Inc. (ASI).......... 125.7 197.0
Ameritech and affiliates................ 31.3 11.9
Other................................... 217.6 225.1
Other current liabilities................ 307.8 362.0
--------- ---------
1,372.4 1,341.3
--------- ---------
Long-term debt............................ 1,063.3 1,061.2
--------- ---------
Deferred credits and other long-term liabilities
Accumulated deferred income taxes........ 210.5 220.8
Unamortized investment tax credits....... 58.1 61.0
Postretirement benefits
other than pensions.................... 921.4 932.5
Long-term payable to ASI................. 25.5 27.3
Other.................................... 94.2 97.2
--------- ---------
1,309.7 1,338.8
--------- ---------
Shareowner's equity
Common shares - ($20 par value;
100,000,000 shares authorized;
81,938,121 issued and outstanding)..... 1,638.8 1,638.8
Proceeds in excess of par value.......... 66.0 66.0
Accumulated deficit....................... (465.3) (465.8)
--------- ---------
1,239.5 1,239.0
--------- ---------
Total liabilities and shareowner's equity.. $ 4,984.9 $ 4,980.3
========= =========
See Notes to Condensed Financial Statements.
<PAGE>5
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
Three Months Ended
March 31
-------------
1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................... $ 130.8 $ 167.1
Adjustments to net income
Restructuring credit, net of tax............ -- (46.4)
Depreciation and amortization............... 140.7 128.8
Deferred income taxes, net.................. (13.3) 2.7
Investment tax credits, net................. (2.9) (3.7)
Capitalized interest........................ (0.9) (0.6)
Provision for uncollectibles................ 17.2 11.6
Change in accounts receivable............... (47.8) 86.4
Change in material and supplies............. 1.8 0.1
Change in certain other current assets...... 6.1 24.7
Change in accounts payable.................. (59.4) (204.0)
Change in certain other current liabilities. 102.9 95.5
Change in certain other noncurrent
assets and liabilities.................... (20.1) (25.1)
Other....................................... 8.3 11.5
-------- --------
Net cash from operating activities............ 263.4 248.6
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................... (126.7) (103.4)
Proceeds from disposals of
property, plant and equipment................. 1.1 3.2
Other investing activity....................... (0.1) --
-------- --------
Net cash from investing activities............. (125.7) (100.2)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany financing, net.................... 144.4 (43.2)
Issuance of long-term debt..................... 3.0 --
Retirements of long-term debt.................. (0.7) (0.2)
Dividend payments.............................. (284.5) (112.0)
-------- --------
Net cash from financing activities............. (137.8) (155.4)
-------- --------
Net decrease in cash and
temporary cash investments.................... (0.1) (7.0)
Cash and temporary cash investments,
beginning of period........................... 0.3 7.1
-------- --------
Cash and temporary cash investments,
end of period................................. $ 0.2 $ 0.1
======== ========
See Notes to Condensed Financial Statements.
<PAGE>6
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Dollars in Millions)
MARCH 31, 1996
NOTE 1: Work Force Restructuring
As announced in March 1994, the Company's parent, Ameritech Corporation,
restructured its existing nonmanagement work force, reducing the work force
by 11,500 employees during 1994 and 1995, including 3,503 at the Company.
As a result of the restructuring, the Company recorded a gain of $76.9
million or $46.4 million after-tax in the first three months of 1995,
resulting primarily from settlement gains from lump sum pension payments
from the Ameritech Pension Plan to former employees. No restructuring
charges or credits were recorded in the first three months of 1996.
The Company recorded additional restructuring charges in the fourth quarter
of 1995, primarily for the consolidation of data centers and additional
work force reductions.
<PAGE>7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
(Dollars in Millions)
The following is a discussion and analysis of the changes in revenues,
operating expenses and other income and expenses for the first three months
of 1996 as compared with the first three months of 1995.
Results of Operations
- ---------------------
Revenues
- --------
Total revenues in the first three months of 1996 were $897.1 million and
were $809.3 million for the same period in 1995. The following paragraphs
explain the components of that change.
- ----------------------------------------------------------------------
Local service
- -------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 510.5 $ 464.0 $ 46.5 10.0
The increase in local service revenues for the three months ended March 31,
1996 was due primarily to higher network usage volumes, which increased
local service revenues by $40.8 million. The increased network usage
volumes resulted primarily from growth in the number of access lines, which
increased 4.9 percent to 6,335,000 as of March 31, 1996 as compared with
6,041,000 at March 31, 1995, and greater sales of call management services,
such as Call Forwarding and Caller ID. Revenues also increased by $5.8
million in the first quarter of 1996 due to net rate increases.
- ----------------------------------------------------------------------
Network access
- --------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Interstate
- ----------
Three Months Ended $ 191.0 $ 189.9 $ 1.1 0.6
Intrastate
- ----------
Three Months Ended $ 24.5 $ 21.9 $ 2.6 11.9
The increase in interstate network access revenues for the three months
ended March 31, 1996 was primarily attributable to volume increases,
resulting in a revenue increase of $14.6 million, partially offset by net
rate reductions of $11.3 million, as well an increase in National Exchange
Carrier Association common line support payments and the results of prior
year one-time billing adjustments. Minutes of use related to interstate
calls increased 10.1 percent in the first quarter of 1996 compared with the
prior year period.
<PAGE>8
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Network access (cont'd.)
- ------------------------
The increase in intrastate network access revenues for the three months
ended March 31, 1996 was due to volume increases of $4.3 million, partially
offset by rate reductions of $1.7 million. Minutes of use related to
intrastate calls increased 13.5 percent in the three months ended March 31,
1996 compared with the prior year period.
- ----------------------------------------------------------------------
Long distance service
- ---------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 64.1 $ 56.8 $ 7.3 12.9
The increase in long distance service revenues for the three months ended
March 31, 1996 is due primarily to higher network usage of $6.2 million, as
well as one-time adjustments of $1.1 million.
- ----------------------------------------------------------------------
Other
- -----
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 107.0 $ 76.7 $ 30.3 39.5
Other revenues include revenues derived from directory advertising, billing
and collection services, inside wire installation and maintenance services
and other miscellaneous services. The increase in other revenues for the
three months ended March 31, 1996 was due to growth in voice messaging,
equipment sales and other nonregulated services of $23.2 million, as well
as rate increases in inside wire installation and maintenance services of
$7.3 million. These increases were partially offset by a $1.6 million
decrease in billing and collection services, as certain long distance
carriers began billing their own customers in 1996, as well as a decrease
in directory revenues.
- ----------------------------------------------------------------------
Operating expenses
- ------------------
Total operating expenses for the three months ended March 31, 1996
increased by $144.2 million or 28.1 percent to $656.8 million. The
increase was primarily attributable to work force restructuring, which
resulted in a credit of $76.9 million in the first quarter of 1995 related
to settlement gains previously discussed. Total operating expenses also
increased in the first quarter of 1996 due to increases in depreciation
expense and other operating expenses, such as advertising and contract and
professional services.
<PAGE>9
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Employee-related expenses
- -------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 203.8 $ 199.7 $ 4.1 2.1
The increase in employee-related expenses for the three months ended March
31, 1996 was primarily due to increases in salary and wage rates of $3.9
million, as well as bonus increases of $2.4 million, and additional
overtime of $1.0 million, partially offset by a decrease of $2.8 million
due to work force reductions.
There were 14,885 employees at March 31, 1996, compared with 15,244 at
March 31, 1995.
- ----------------------------------------------------------------------
Depreciation and
amortization
- ------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 140.7 $ 128.8 $ 11.9 9.2
The increase in depreciation and amortization expense for the three months
ended March 31, 1996 was due primarily to an adjustment to the
intrabuilding cable asset category, as well as higher plant balances, which
resulted in higher depreciation expense.
- ----------------------------------------------------------------------
Other operating expenses
- ------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 292.8 $ 243.8 $ 49.0 20.1
The increase in other operating expenses for the three months ended March
31, 1996 was due to an increase of $18.2 million in contract and affiliated
services related primarily to systems programming and reengineering,
increases in advertising, uncollectible and other expenses of $17.9 million
related to increased sales efforts for equipment and call management
services such as voice messaging and other nonregulated services, and cost
of sales increases of $14.4 million related to equipment sales. These
increases were partially offset by a decrease in switching system software
expenses of $1.6 million.
<PAGE>10
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Restructuring credit
- --------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ -- $ (76.9) $ 76.9 100.0
As discussed in Note 1, the Company significantly reduced its nonmanagement
work force during 1994 and 1995 by 3,503 employees. New employees with
different skills were added during this period to accommodate growth and
meet staffing requirements for new business opportunities. As of March 31,
1995, 2,799 employees had left the Company, with 99 leaving in the first
quarter of 1995. A pretax, noncash settlement gain of $76.9 million was
recorded in the first quarter of 1995, associated with lump-sum pension
payments to former employees. No restructuring charges or credits were
recorded in the first quarter of 1996.
- ----------------------------------------------------------------------
Taxes other than income taxes
- -----------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 19.5 $ 17.2 $ 2.3 13.4
The increase in other taxes for the three months ended March 31, 1996 was
primarily due to higher capital stock taxes of $3.6 million reflecting a
higher tax base, partially offset by decreases in property taxes of $1.2
million, resulting from favorable legislation involving property tax
reforms.
- ----------------------------------------------------------------------
Other Income and Expenses
- -------------------------
Interest expense
- -----------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 28.1 $ 28.7 $ (0.6) (2.1)
The decrease in interest expense for the three months ended March 31, 1996
was due to decreased miscellaneous interest expense as well as increased
capitalized interest, partially offset by an increase in interest on
borrowings from the Ameritech short-term funding pool.
<PAGE>11
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Other income, net
- -----------------
Change
March 31 (Income) Percent
----------
(dollars in millions) 1996 1995 Expense Change
------------------- ---- ---- -------- ------
Three Months Ended $ (3.5) $ 0.1 $ (3.6) n/a
Other income, net includes equity earnings in affiliates, interest income
and other nonoperating items. The increase in other income, net for the
three months ended March 31, 1996 was due to increased equity earnings from
ASI, as well as a decrease in miscellaneous nonoperating expenses.
- ----------------------------------------------------------------------
Income taxes
- ------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 84.9 $ 100.8 $ (15.9) (15.8)
The decrease in income taxes in the three months ended March 31, 1996 as
compared with the prior year period was primarily attributable to the
decrease in pretax earnings, related to the revenue and expense items
previously discussed.
- ----------------------------------------------------------------------
Ratio of earnings to fixed charges
- ----------------------------------
The ratio of earnings to fixed charges for the three months ended March 31
was 7.56 in 1996 and 9.45 in 1995. The ratio in 1995 was favorably
affected by a credit of $76.9 million for work force restructuring (see
prior discussion of this item). The work force restructuring program was
largely funded by the Ameritech Pension Plan.
The computations of the ratio of earnings to fixed charges for the five
years ended December 31, 1995 have been restated. The ratio, as adjusted,
for the years ended December 31, 1995, 1994, 1993, 1992 and 1991 was 7.87,
5.34, 5.77, 5.63 and 4.57, respectively. The impact of the restatement was
not significant and was made to be consistent with unregulated enterprises.
<PAGE>12
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Other Matters
- --------------
Telecommunications Act of 1996
- ------------------------------
The Telecommunications Act of 1996 was signed into law by the President on
February 8, 1996. This legislation defines the conditions under which
Ameritech will be permitted to offer interLATA long distance service and
provides certain mechanisms intended to facilitate local exchange
competition. This legislation, in addition to allowing Ameritech to offer
interLATA long distance services, will allow competitors into the Company's
traditional local exchange markets. Management believes the legislation
gives the Company an opportunity to expand its revenue base by providing
long distance services, while retaining lower-margin access revenues as
other local service providers, acting as resellers, continue to use
Ameritech's network facilities.
On April 19, 1996 the Federal Communications Commission (FCC) issued a
notice of proposed rulemaking seeking comment on proposed rules opening
local telephone markets to competition. The FCC has until August 8, 1996
to issue the new rules.
- ----------------------------------------------------------------------
Dial 1+
- -------
The Company implemented intraMSA presubscription on April 7, 1996 pursuant
to the Customers First Order issued by the Illinois Commerce Commission
(the Commission) on April 7, 1995. Presubscription allows customers to
select one carrier for interMSA interstate calling and a second carrier for
non-local intraMSA calls. Non-local intraMSA calls include all Band C
calls (more than 15 miles) plus intraMSA toll calls between Ameritech's
territory and that of an independent company. As a result, the Company's
customers may now select an alternate long distance carrier for Band C
calls by dialing 1 before the regular phone number.
- ----------------------------------------------------------------------
Illinois rate reductions
- ------------------------
On April 1, 1996 the Company filed its proposal for the annual rate changes
required by the alternative regulation order approved by the Commission in
October 1994. The Company is proposing a $29.0 million annual reduction
based on criteria set forth in the order. The change will be implemented
in July 1996 after the Commission review process is complete.
Contingency
- ------------
During October 1995, the Commission denied earlier filings of the Company
related to the "competitive" classification for business Band B and C usage
and business operator assistance and credit card surcharges and ordered
rates reduced to prior levels and refunds, as applicable. The estimated
refund amount calculated through December 1, 1995 was estimated to be $46.5
million pretax ($28.0 million after-tax). On November 8, 1995, the
Commission rejected the Company's petition for a rehearing of the order,
but granted the Company's petition for stay regarding rate reductions and
refunds for business customers with twelve or more lines. The Company
refunded $24.9 million related to business customers with under twelve
lines for these services in December 1995, whereas the remaining amount may
need to be refunded in the future.
<PAGE>13
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits
--------
12 Computation of Ratio of Earnings to Fixed Charges for the
three months ended March 31, 1996 and March 31, 1995, and
for the five years ended December 31, 1995.
27 Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
No Form 8-K was filed by the registrant during the quarter which
this report is filed.
<PAGE>14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ILLINOIS BELL TELEPHONE COMPANY
-------------------------------
(Registrant)
Date: May 10, 1996 /s/ Laurie L. Streling
----------------------
Laurie L. Streling
Comptroller
State Finance Organization
(Principal Accounting Officer)
EXHIBIT 12
ILLINOIS BELL TELEPHONE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
Three Months Ended
March 31
-------------
1996 1995
---- ----
1. EARNINGS
a) Income before interest expense,
income taxes and undistributed
equity earnings (2).......... $ 240.2 $ 293.8
b) Portion of rental expense
representative of the
interest factor (1)................. 3.2 2.0
-------- --------
Total 1(a) through 1(b)................. $ 243.4 $ 295.8
-------- --------
2. FIXED CHARGES
a) Total interest expense including
capital lease obligations........... $ 28.1 $ 28.7
b) Capitalized interest................. 0.9 0.6
c) Portion of rental expense
representative of the
interest factor (1)................. 3.2 2.0
-------- --------
Total 2(a) through 2(c)................. $ 32.2 $ 31.3
-------- --------
3. RATIO OF EARNINGS TO FIXED CHARGES....... 7.56 9.45
==== ====
(1) One-third of rental expense is considered to be the amount
representing return on capital.
(2) The results for the first three months of 1995 reflect a $76.9
million pretax credit primarily from settlement gains resulting
from lump-sum pension payments from the pension plan to former
employees who left the business in the nonmanagement work force
restructuring.
EXHIBIT 12
ILLINOIS BELL TELEPHONE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
1. EARNINGS
a) Income before interest expense, income
tax, extraordinary charge, cumulative
effect of change in accounting
principles and undistributed
equity earnings (2)........... $1,012.8 $ 620.8 $ 743.0 $ 699.8 $ 639.6
b) Portion of rental expense representative
of the interest factor (1).... 9.9 8.8 10.8 12.3 10.8
-------- ------- ------- ------- -------
Total 1(a) through 1(b)... $1,022.7 $ 629.6 $ 753.8 $ 712.1 $ 650.4
======== ======= ======= ======= =======
2. FIXED CHARGES
a) Total interest expense including capital
lease obligations............. $ 117.2 $ 105.7 $ 117.5 $ 112.9 $ 127.0
b) Capitalized interest........... 2.8 3.3 2.4 1.2 4.5
c) Portion of rental expense representative
of the interest factor (1).... 9.9 8.8 10.8 12.3 10.8
------- ------- ------- ------- -------
Total 2(a) through 2(c)... $ 129.9 $ 117.8 $ 130.7 $ 126.4 $ 142.3
======== ======= ======= ======= =======
3. RATIO OF EARNINGS TO FIXED CHARGES 7.87 5.34 5.77 5.63 4.57
======== ======= ======= ======= =======
(1) One-third of rental expense is considered to be the amount
representing return on capital.
(2) The results for 1995 reflect a $57.1 pretax credit primarily from
settlement gains resulting from lump sum pension payments from the
pension plan to former employees who left the business in the
nonmanagement work force restructuring, partially offset by increased
force costs related to the restructuring started in 1994, as well as a
write-down of certain data processing equipment to net realizable
value. Results for 1994 reflect a $196.5 pretax charge associated
with the nonmanagement work force restructuring. Costs of the work
force restructuring program have largely been funded from the
Ameritech Pension Plan.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
ILLINOIS BELL TELEPHONE COMPANY'S MARCH 31, 1996 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-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 200
<SECURITIES> 0<F1>
<RECEIVABLES> 907,700
<ALLOWANCES> 61,900
<INVENTORY> 13,300
<CURRENT-ASSETS> 879,600
<PP&E> 8,550,700
<DEPRECIATION> 4,803,400
<TOTAL-ASSETS> 4,984,900
<CURRENT-LIABILITIES> 1,372,400
<BONDS> 1,063,300
0
0
<COMMON> 1,638,800
<OTHER-SE> (399,300)
<TOTAL-LIABILITY-AND-EQUITY> 4,984,900
<SALES> 0<F2>
<TOTAL-REVENUES> 897,100
<CGS> 0<F3>
<TOTAL-COSTS> 656,800
<OTHER-EXPENSES> (3,500)
<LOSS-PROVISION> 17,200
<INTEREST-EXPENSE> 28,100
<INCOME-PRETAX> 215,700
<INCOME-TAX> 84,900
<INCOME-CONTINUING> 130,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 130,800
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>SECURITIES ARE NOT MATERIAL AND THEREFORE HAVE NOT BEEN STATED SEPARATELY
IN THE FINANCIAL STATEMENTS. THIS AMOUNT IS INCLUDED IN THE CASH TAG.
<F2>NET SALES OF TANGIBLE PRODUCTS IS NOT MORE THAN 10% OF TOTAL OPERATING
REVENUES AND THEREFORE HAS NOT BEEN STATED SEPARATELY IN THE FINANCIAL
STATEMENTS PURSUANT TO REGULATION S-X, RULE 5-03(B). THIS AMOUNT IS
INCLUDED IN THE "TOTAL REVENUES" TAG.
<F3>COST OF TANGIBLE GOODS SOLD IS INCLUDED IN COST OF SERVICE AND PRODUCTS
IN THE FINANCIAL STATEMENTS AND THE "TOTAL COST" TAG, PURSUANT TO
REGULATION S-X, RULE 5-03(B).
</FN>
</TABLE>
