<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 June 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6746
INDIANA BELL TELEPHONE COMPANY, INCORPORATED
(Incorporated under the laws of the State of Indiana
240 North Meridian Street, Indianapolis, Indiana 46204
I.R.S. Employer Identification Number 35-0407820
Telephone Number - (317) 265-2266
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 July 31, 1995, 13,490,876 common shares were outstanding.
<PAGE>2
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
Part I - Financial Information
The following condensed financial statements have been prepared by Indiana
Bell Telephone Company, Incorporated (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 and the quarterly report on Form 10-Q previously filed in the
current year.
CONDENSED STATEMENTS OF INCOME AND REINVESTED EARNINGS
(Millions of Dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
Revenues $ 299.0 $ 289.7 $ 590.7 $ 582.7
--------- --------- --------- --------
Operating Expenses
Employee-related expenses 55.5 58.5 111.4 120.3
Depreciation and amortization 47.6 52.9 95.1 105.8
Other operating expenses 96.6 89.3 188.1 174.0
Restructuring (credit) charge -- -- (36.5) 68.9
Taxes other than income taxes 12.1 11.7 23.9 23.4
--------- --------- --------- --------
211.8 212.4 382.0 492.4
--------- --------- --------- --------
Operating income 87.2 77.3 208.7 90.3
Interest expense 4.7 3.8 9.0 8.1
Other income, net (0.5) (1.3) (0.5) (2.0)
--------- --------- --------- --------
Income before income taxes 83.0 74.8 200.2 84.2
Income taxes 30.0 25.2 73.6 27.6
--------- --------- --------- --------
Net income 53.0 49.6 126.6 56.6
Reinvested earnings, beginning
of period 55.9 213.1 30.2 250.8
Less, dividends 52.6 45.5 100.5 90.2
--------- --------- --------- --------
Reinvested earnings, end
of period $ 56.3 $ 217.2 $ 56.3 $ 217.2
========= ======== ========= ========
See Notes to Condensed Financial Statements.
<PAGE>3
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
CONDENSED BALANCE SHEETS
(Dollars in Millions)
June 30, 1995 Dec. 31, 1994
(Unaudited) (Derived from
Audited
Financial
Statements)
ASSETS
Current assets
Cash and temporary cash investments $ -- $ 0.5
Receivables, net
Customers 167.6 186.5
Ameritech and affiliates 16.4 15.5
Other 7.6 12.7
Material and supplies 4.4 4.2
Prepaid and other 79.3 19.2
-------- --------
275.3 238.6
-------- --------
Property, plant and equipment 3,040.6 3,000.1
Less, accumulated depreciation 1,840.8 1,772.5
-------- --------
1,199.8 1,227.6
-------- --------
Investments, principally in affiliates 36.1 40.1
Other assets and deferred charges 76.2 35.2
-------- --------
Total assets $1,587.4 $1,541.5
======== ========
See Notes to Condensed Financial Statements
<PAGE>4
Form 10-Q Indiana Bell Telephone Company, Incorporated
CONDENSED BALANCE SHEETS (continued)
(Dollars in Millions)
June 30, 1995 Dec. 31, 1994
(Unaudited) (Derived from
Audited
Financial
Statements)
LIABILITIES AND SHAREOWNER'S EQUITY
Current liabilities
Debt maturing within one year
Ameritech $ 149.3 $ 222.0
Other 0.3 0.3
Accounts payable
Ameritech Services, Inc. (ASI) 50.0 71.7
Ameritech and affiliates 15.4 12.9
Other 55.4 61.8
Other current liabilities 216.5 141.2
-------- --------
486.9 509.9
-------- --------
Long-term debt 85.9 86.1
-------- --------
Deferred credits and other long-term liabilities
Accumulated deferred income taxes 71.4 24.9
Unamortized investment tax credits 24.5 27.2
Postretirement benefits other than pensions 269.3 270.0
Long-term payable to ASI 8.3 8.8
Other 19.8 19.4
-------- ---------
393.3 350.3
-------- ---------
Shareowner's equity
Common shares - ($40 par value;
15,000,000 shares authorized;
13,490,876 issued and outstanding) 539.6 539.6
Proceeds in excess of par value 25.4 25.4
Reinvested earnings 56.3 30.2
-------- ---------
621.3 595.2
-------- ---------
Total liabilities and shareowner's equity $1,587.4 $1,541.5
======== ========
See Notes to Condensed Financial Statements.
<PAGE>5
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
Six Months Ended
June 30
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 126.6 $ 56.6
Adjustments to net income
Restructuring (credit) charge, net of tax (22.9) 42.8
Depreciation and amortization 95.1 105.8
Deferred income taxes, net (2.0) (2.4)
Investment tax credits, net (2.7) (2.5)
Interest during construction (0.2) (0.4)
Provision for uncollectibles 7.1 4.0
Change in accounts receivable 15.9 (9.5)
Change in material and supplies (0.6) (0.5)
Change in certain other current assets 6.8 2.7
Change in accounts payable (25.6) 27.2
Change in certain other current liabilities (5.2) (33.8)
Change in certain other noncurrent
assets and liabilities (8.1) (16.3)
Cost of refinancing long-term debt -- (8.7)
Other (1.4) 10.2
-------- -------
Net cash from operating activities 182.8 175.2
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (65.4) (61.1)
Proceeds from disposals of
property, plant and equipment 2.8 1.6
Other investments 0.2 (7.8)
-------- ------
Net cash from investing activities (62.4) (67.3)
-------- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany financing, net (72.7) 206.5
Issuance of long-term debt -- 1.0
Retirements of long-term debt (0.2) (220.0)
Dividend payments (48.0) (90.3)
-------- ------
Net cash from financing activities (120.9) (102.8)
-------- ------
Net (decrease) increase in cash
and temporary cash investments (0.5) 5.1
Cash and temporary cash investments
at beginning of period 0.5 0.6
-------- ------
Cash and temporary cash investments
at end of period $ -- $ 5.7
======== ========
See Notes to Condensed Financial Statements.
<PAGE>6
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Dollars in Millions)
JUNE 30, 1995
NOTE 1: Work Force Restructuring
During March 1994, the Company's parent, Ameritech Corporation, announced
its plan to reduce its existing nonmanagement work force. Approximately
11,500 employees are expected to leave under this program, including 1,399
employees of the Company. Under terms of agreements between Ameritech, the
Communications Workers of America (CWA) and the International Brotherhood
of Electrical Workers (IBEW), Ameritech implemented an enhancement to the
Ameritech Pension Plan by adding three years to both the age and the net
credited service of eligible nonmanagement employees who leave the business
during a designated period that corresponds to contract expiration in 1995.
In addition, certain business units are offering financial incentives under
terms of the current contracts with the CWA and IBEW to selected
nonmanagement employees who leave the business before the end of 1995. See
additional discussion in Management's Discussion and Analysis below.
As a result of the restructuring, a pretax charge of $68.9, or $42.8
after-tax, was recorded in the first quarter 1994. In the first quarter
1995, a gain of $36.5 or $22.9 after-tax, was recorded resulting primarily
from settlement gains from lump sum pension payments from the Ameritech
pension plan to former employees. Settlement gains were not recorded in
the second quarter of 1995 as they were not significant. The cumulative
gross program costs through June 30, 1995 totaled $130.6, partially offset
by settlement gains of $73.6 for an aggregate pretax net program cost of
$57.0, or $35.1 after-tax. At June 30, 1995, the remaining severance
accrual was $5.9.
As of June 30, 1995, 1,207 employees have left the Company as a result of
the restructuring, with 192 expected to leave later in 1995.
NOTE 2: Discontinuation of FAS 71 and Reclassifications
As discussed more fully in the 1994 Annual Report on Form 10-K, during the
fourth quarter of 1994, the Company incurred an extraordinary noncash
after-tax charge of $220.7 as a result of its decision to discontinue the
application of Statement of Financial Accounting Standards No. 71 (FAS 71),
"Accounting for the Effects of Certain Types of Regulation."
The principal component of the above charge related to a determination that
telephone plant asset lives were too long and analog switches were
obsolete. The net effect of this determination is causing 1995
depreciation expense to decrease. Long-term, depreciation expense will
increase as the effects of shorter lives on plant assets and future plant
additions offset the discontinuation of depreciation of analog switches.
Certain additional financial statement impacts occurred as a result of the
discontinuance of FAS 71, including the reclassification of the provision
for uncollectibles, previously shown as a reduction in other revenues, to
other operating expenses.
<PAGE>7
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
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 six months
of 1995 as compared with the first six months of 1994:
Results of Operations
Revenues
Total revenues in the first six months of 1995 were $590.7 and were $582.7
for the same period in 1994. The following paragraphs explain the
components of that change.
Local service
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $277.1 $262.5 $ 14.6 5.6
The increase in local service revenues in the first six months of 1995 was
primarily attributable to higher network volumes which increased local
service revenues by $18.4 The increased network usage volumes resulted
principally from growth in the number of access lines, which increased 4.0
percent to 1,965,460 as of June 30, 1995 as compared with June 30, 1994, as
well as increased volumes and greater sales of special calling features,
such as Call Forwarding and Caller ID. This increase was primarily offset
by rate reductions of $3.8, primarily resulting from regulatory proceedings
which adopted price regulation in place of rate-of-return regulation and
removed limits on intrastate earnings.
<PAGE>8
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Network access
June 30 Increase Percent
1995 1994 (Decrease) Change
Interstate
Six Months Ended $123.4 $121.0 $ 2.4 2.0
Intrastate
Six Months Ended $ 44.3 $ 53.6 $ (9.3) (17.4)
The increase in interstate network access revenues for the six months ended
June 30, 1995 was primarily due to higher network usage, which resulted in
additional revenues of $6.2, and a reduction in NECA common line pool
support payments of $2.8. Partially offsetting these revenue increases
were net rate reductions of $6.4. Minutes of use related to interstate
calls increased 5.4 percent in 1995. See additional discussion below
regarding Ameritech's interstate access rate reductions.
The decrease in intrastate network access revenues for the six months ended
June 30, 1995 was primarily due to rate reductions of $13.6, primarily
resulting from regulatory proceedings which adopted certain regulatory
freedoms as previously discussed. Higher network usage resulted in
additional revenues of $4.3 which partially offset these decreases.
Minutes of use related to intrastate calls increased 11.6 percent in 1995.
___________________________________________________________________________
Long distance service
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $ 77.1 $ 75.5 $ 1.6 2.1
The increase in long distance service revenues for the six months ended
June 30, 1995 was primarily attributable to net rate increases of $1.2, as
well as increased usage volumes of $0.4.
<PAGE>9
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Other
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $ 68.8 $ 70.1 $ (1.3) (1.9)
Other revenues include revenues derived from directory advertising, billing
and collection services, inside wire installation and maintenance services
and other miscellaneous services. The decrease in other revenues was
primarily due to a decrease of $5.5 in directory, billing and collection
services, rents and miscellaneous revenues. Intercompany rent revenues
decreased as a result of a change in methodology in the way the Company
accounts for these revenues. In 1995, these revenues were reflected as
credits to expense, whereas in 1994, such amounts were included in other
revenues. Partially offsetting these decreases were rate increases in
inside wire installation and maintenance services of $2.1, as well as
growth in central office features and other nonregulated services of $1.7.
___________________________________________________________________________
Operating expenses
Total operating expenses for the six months ended June 30, 1995 decreased
by $110.4 or 22.4 percent to $382.0. The decrease was almost entirely
attributable to the 1994 work force restructuring, which resulted in a
credit of $36.5 in the first quarter of 1995 related to the net settlement
gains previously discussed, compared with a first quarter 1994 charge of
$68.9.
___________________________________________________________________________
Employee-related expenses
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $111.4 $120.3 $ (8.9) (7.4)
The decrease in employee-related expenses for the six months ended
June 30, 1995 was attributable primarily to the effect of work force
reductions over the past year of $12.4, as well as reduced bonus accruals
and other benefits of $6.4. Partially offsetting these decreases were the
effects of increased overtime payments and medical, dental and
postretirement benefits of $9.9.
There were 4,237 employees at June 30, 1995, compared with 4,832 at
June 30, 1994.
<PAGE>10
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Depreciation and
amortization
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $ 95.1 $105.8 $ (10.7) (10.1)
The decrease in depreciation and amortization expense for the six months
ended June 30, 1995 was primarily due to the cessation of depreciation of
analog switches determined to be obsolete in connection with the
discontinuance of Statement of Financial Accounting Standards No. 71 (FAS
71), "Accounting for the Effects of Certain Types of Regulation," in the
fourth quarter of 1994. This decrease was partially offset by the increase
in depreciation rates as a result of shortening telephone plant lives
following the discontinuation of FAS 71.
___________________________________________________________________________
Other operating expenses
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $188.1 $174.0 $ 14.1 8.1
The increase in other operating expenses for the six months ended
June 30, 1995 was primarily attributable to higher affiliate services
expenses of $16.7, resulting from increased billings from Ameritech
Services, Inc. (ASI) primarily for contract and professional services.
Advertising and bad debt expenses increased $5.1 as a result of increased
marketing and sales efforts. These increases were offset by a net decrease
of $7.7 in expenses for material and supplies, access charges, as a result
of renegotiated contracts, and switching system software charges as
compared to the prior year period.
<PAGE>11
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Restructuring (credit) charge
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $(36.5) $ 68.9 $(105.4) n/a
As discussed in Note 1, Ameritech announced in March 1994 that it intended
to reduce its nonmanagement work force by 6,000 employees (780 at the
Company) by the end of 1995. Reduction of the work force results from the
Company's implementation of technological improvements, consolidations and
initiatives to balance the cost structure with emerging competition.
Ameritech currently expects its nonmanagement work force to be reduced by
about 11,500 employees through 1995 instead of the 6,000 originally
estimated in March 1994, including 1,399 at the Company. A pretax charge
of $68.9 related to the original estimated work force reduction was
recorded in the first quarter of 1994, with additional charges later in
1994. A noncash settlement gain of $36.5 was recorded in the first quarter
of 1995 associated with lump-sum pension payments to former employees.
Future settlement gains (estimated at $6.0) are anticipated.
Actual employee reductions by quarter were: 220 in the second quarter of
1994, 271 in the third quarter of 1994, 604 in the fourth quarter of 1994,
46 in the first quarter of 1995 and 66 in the second quarter of 1995.
Employee reductions of 192 are expected in the third quarter of 1995. Cash
requirements to fund the financial incentives (principally contractual
termination payments totaling approximately $26.6) are being met as
prescribed by applicable collective bargaining agreements. Certain of
these collective bargaining agreements require contractual termination
payments to be paid in a manner other than lump-sum, thus requiring cash
payments beyond an employee's termination date.
This program will reduce annual employee-related costs by approximately $50
thousand per departing employee. The projected savings are being partially
offset by the hiring of new employees with better matched skills to
accommodate growth, ensure high quality customer service and meet staffing
requirements for new business opportunities.
___________________________________________________________________________
Taxes other than income taxes
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $ 23.9 $ 23.4 $ 0.5 2.1
The increase in taxes other than income taxes for the six months ended June
30, 1995 is primarily attributable to higher property taxes partially
offset by lower gross receipts taxes due to lower revenues subject to the
tax.
<PAGE>12
Form 10-Q Part I Indiana Bell Telphone Company, Incorporated
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Other Income and Expenses
Interest expense
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $ 9.0 $ 8.1 $ 0.9 11.1
The increase in interest expense for the six months ended June 30, 1995
resulted from higher short-term interest on borrowings from the Ameritech
short-term funding pool resulting from higher short-term interest rates,
partially offset by lower average debt balances. Offsetting this increase
was a decrease of $1.2 in interest expense related to long-term debt
resulting from refinancing activity in late 1993.
___________________________________________________________________________
Other income, net
June 30 (Increase) Percent
1995 1994 Decrease Change
Six Months Ended $ (0.5) $ (2.0) $ 1.5 n/a
Other income, net includes equity earnings in affiliates, interest income
and other nonoperating items. The change in other income, net results
primarily from decreased equity earnings from ASI and decreased rental
property income.
___________________________________________________________________________
Income taxes
June 30 Increase Percent
1995 1994 (Decrease) Change
Six Months Ended $ 73.6 $ 27.6 $ 46.0 n/a
The increase in income taxes for the six months ended June 30, 1995 was due
primarily to the change in pretax income as a result of the work force
restructuring credit of $36.5 (22.9 after-tax) in the first quarter of 1995
as compared to the work force restructuring charge of $68.9 ($42.8 after-
tax) in the first quarter of 1994. Excluding these items, income taxes
changed in line with the earnings in the business.
<PAGE>13
Form 10-Q Part I Indiana Bell Telephone Company, Incorporated
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Ratio of earnings to fixed charges
The ratio of earnings to fixed charges for the six months ended June 30,
was 19.89 in 1995 and 7.63 in 1994. The ratio in 1995 was favorably
affected by a credit of $36.5 for work force restructuring (see prior
discussion of this item). The ratio in 1994 was adversely affected by a
$68.9 charge for work force restructuring. The work force restructuring
program has largely been funded by the Ameritech Pension Plan. After
adjustment to remove the effects of the work force restructuring, the ratio
is indicative of the Company's ability to meet its debt funding.
___________________________________________________________________________
Interstate access rate reduction
On July 18, 1995, the Federal Communications Commission (FCC) approved
Ameritech's request for price regulation without sharing of earnings
effective January 1, 1995. By receiving FCC approval of Ameritech's waiver
request effective January 1, 1995, the total annual reduction in prices
that the Company charges long distance companies for local connections
increased to $11.8 effective August 1, 1995. The current year impact is
expected to be a reduction in interstate access revenues of $5.0, which
represents an increase of $1.8 over the 1995 reduction otherwise required
under the FCC's interim price cap rules.
___________________________________________________________________________
Labor negotiations
The Company's nonmanagement workforce (about 75 percent of total employees)
is represented principally by two labor unions with expiring labor
contracts. The International Brotherhood of Electrical Workers contract
originally expired in June 1995 but has been extended until August 9, 1995.
The Communications Workers of America (CWA) contract was set to expire on
August 5, 1995, but has been extended indefinitely. The extension may be
canceled by either the Company or the CWA with 24 hour notice. Membership of
both unions have authorized a work stoppage. Negotiations with both unions
continue and management believes a satisfactory resolution will be achieved.
<PAGE>14
Form 10-Q Part II Indiana Bell Telephone Company, Incorporated
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
Six Months Ended June 30, 1995 and June 30, 1994.
27 Financial Data Schedule.
(b) Reports on Form 8-K
No Form 8-K was filed by the registrant during the quarter for
which this report is filed.
<PAGE>15
Form 10-Q Part II Indiana Bell Telephone Company, Incorporated
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.
INDIANA BELL TELEPHONE COMPANY, INCORPORATED
(Registrant)
Date: August 7, 1995 /s/ Richard A. Kuzmar
Richard A. Kuzmar
Vice President and Comptroller
(Principal Financial Officer)
<PAGE>16
EXHIBIT 12
INDIANA BELL TELEPHONE COMPANY, INCORPORATED
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
Six Months Ended
June 30
1995 1994
1. EARNINGS
a) Income before interest cost
income taxes $209.4 $ 92.7
b) Portion of rental expense
representative of the
interest factor (1) 1.4 4.2
------ ------
Total 1(a) through 1(b) $210.8 $ 96.9
------ ------
2. FIXED CHARGES
a) Total interest cost including
capital lease obligations $ 9.2 $ 8.5
b) Portion of rental expense
representative of the
interest factor (1) 1.4 4.2
------ ------
Total 2(a) through 2(b) $ 10.6 $ 12.7
------ ------
3. RATIO OF EARNINGS TO FIXED CHARGES 19.89 7.63
________________ ===== ====
(1) One-third of rental expense is considered to be the amount repres
enting return on capital.
(2) The results for the first six months of 1995 reflect a first quarter
1995 $36.5 pretax credit primarily from settlement gains resulting form
lump sum pension payments from the pension plan to former employees as
sociated with the nonmanagement work force restructuring. Results for the
first six months of 1994 reflect a first quarter 1994 $68.9 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.
(3) Interest cost includes capitalized interest expense.
(4) Earnings have not been adjusted to reflect the timing of dividends
received and equity in earnings of unconsolidated affiliates as the effect
on an annual basis has been insignificant.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Indiana Bell Telephone Company, Incorporated's June 30, 1995 financial
statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 0
<SECURITIES> 0<F1>
<RECEIVABLES> 197,400
<ALLOWANCES> 5,800
<INVENTORY> 4,400
<CURRENT-ASSETS> 275,300
<PP&E> 3,040,600
<DEPRECIATION> 1,840,800
<TOTAL-ASSETS> 1,587,400
<CURRENT-LIABILITIES> 486,900
<BONDS> 85,900
<COMMON> 539,600
0
0
<OTHER-SE> 81,700
<TOTAL-LIABILITY-AND-EQUITY> 1,587,400
<SALES> 0<F2>
<TOTAL-REVENUES> 590,700
<CGS> 0
<TOTAL-COSTS> 382,000<F3>
<OTHER-EXPENSES> (500)
<LOSS-PROVISION> 7,100
<INTEREST-EXPENSE> 9,000
<INCOME-PRETAX> 200,200
<INCOME-TAX> 73,600
<INCOME-CONTINUING> 126,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 126,600
<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>
