SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 1995
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
A New York Commission File I.R.S. Employer Identification
Corporation Number 1-1150 No. 04-1664340
125 High Street, Boston, Massachusetts 02110
Telephone Number (617) 743-9800
Form 8-K New England Telephone and Telegraph Company
August 2, 1995
Item 5. Other Events
On August 2, 1995, NYNEX Corporation ("NYNEX")
announced that it has discontinued accounting for the
operations of its telephone subsidiaries, New England
Telephone and Telegraph Company (the "Company") and New
York Telephone Company, in accordance with the
provisions of Statement of Financial Accounting
Standards No. 71, "Accounting for the Effects of
Certain Types of Regulation" ("Statement No. 71"), in
the second quarter of 1995. As a result, the Company
recorded in the second quarter an extraordinary non-cash
charge of approximately $628 million net of tax.
Under Statement No. 71, NYNEX had accounted for the
effects of rate actions by federal and state regulatory
commissions by establishing certain regulatory assets
and liabilities, including the depreciation of its
telecommunications plant and equipment using asset
lives approved by regulators and the deferral of
certain costs and obligations based on approvals
received from regulators. NYNEX had continually
assessed its position and the recoverability of its
telecommunications assets with respect to Statement
No. 71. The Company's operations no longer met the
criteria for application of Statement No. 71 due to
significant changes in regulation, including the
achievement of price regulation rather than rate-of-
return regulation in Massachusetts and Maine and the
ongoing efforts to achieve price regulation in the
remaining jurisdictions, an intensifying level of
competition, and the increasingly rapid pace of
technological change.
In accordance with Statement of Financial Accounting
Standards No. 101, "Regulated Enterprises - Accounting
for the Discontinuation of Application of FASB
Statement No. 71" ("Statement No. 101"), the Company
has adjusted its telecommunications plant through an
increase in accumulated depreciation, to reflect the
difference between recorded depreciation and
depreciation that would have been recorded had the
Company not been subject to rate regulation, and has
eliminated the non-plant regulatory assets and
liabilities from its balance sheet. The after-tax
extraordinary charge recorded consists of approximately
$473 million for the adjustment to telecommunications
plant and equipment and approximately $155 million for
the write-off of non-plant regulatory assets and
liabilities. The application of Statement No. 101 does
not change the Company's accounting and reporting for
regulatory purposes.
Form 8-K New England Telephone and Telegraph Company
August 2, 1995
Item 5. Other Events (Continued)
When adjusting its net telecommunications plant, the
Company will utilize shorter, more economically
realistic asset lives. The following is a summary of
average asset lives before and after the discontinuance
of Statement No. 71, for the most significantly
affected categories of plant and equipment:
<TABLE>
<CAPTION>
Composite
Regulator-Approved Economic Asset
Category of Asset Asset Lives (in years) Lives (in years)
<S> <C> <C>
Digital Switching 17 12
Circuit-Other 11 8
Aerial Metallic Cable 21 17
Underground Metallic Cable 25 15
Buried Metallic Cable 22 17
Fiber 30 20
</TABLE>
Form 8-K New England Telephone and Telegraph Company
August 2, 1995
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.
New England Telephone and Telegraph Company
By John Diercksen
John Diercksen
Controller
August 2, 1995
