BELL ATLANTIC NEW JERSEY INC, 10-K405, 1995-03-30

BELL ATLANTIC NEW JERSEY INC
10-K405, 1995-03-30
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------
FORM 10-K
----------------

(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994

[ ] 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 1-3488

BELL ATLANTIC - NEW JERSEY, INC.

A New Jersey Corporation I.R.S. Employer Identification
No. 22-1151770

540 Broad Street, Newark, New Jersey 07101

Telephone Number (201) 649-9900

----------------

Securities registered pursuant to Section 12(b) of the Act: See attached
Schedule A.

Securities registered pursuant to Section 12(g) of the Act: None.

THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF BELL ATLANTIC CORPORATION, MEETS
THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J(1)(a) AND (b) OF FORM 10-K AND
IS THEREFORE FILING THIS FORM WITH REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL
INSTRUCTION J(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
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Bell Atlantic - New Jersey, Inc.

SCHEDULE A

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered
----------------------------------------------- ---------------------

Forty Year 7 1/4% Debentures, due April 1, 2011 New York Stock
Exchange

Forty Year 7 3/8% Debentures, due June 1, 2012 "

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Bell Atlantic - New Jersey, Inc.

TABLE OF CONTENTS

ITEM NO. PAGE
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PART I
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1. Business........................................... 1
2. Properties......................................... 11
3. Legal Proceedings.................................. 12
4. Submission of Matters to a Vote of Security Holders 13
</TABLE>

PART II
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<S> <C> <C>
5. Market for Registrant's Common Equity and Related
Stockholder Matters ............................... 13
6. Selected Financial Data ........................... 13
7. Management's Discussion and Analysis of Results of
Operations (Abbreviated pursuant to General
Instruction J(2).) ................................ 14
8. Financial Statements and Supplementary Data ....... 22
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure ............... 22

</TABLE>
PART III
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<S> <C> <C>
10. Directors and Executive Officers of the Registrant. 22
11. Executive Compensation............................. 22
12. Security Ownership of Certain Beneficial Owners and
Management......................................... 22
13. Certain Relationships and Related Transactions..... 22

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PART IV
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<S> <C> <C>
14. Exhibits, Financial Statement Schedule, and Reports
on Form 8-K ....................................... 22

</TABLE>

UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF MARCH 27, 1995.
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Bell Atlantic - New Jersey, Inc.

PART I

Item 1. Business

GENERAL

Bell Atlantic - New Jersey, Inc. (the "Company") is incorporated under the
laws of the State of New Jersey and has its principal offices at 540 Broad
Street, Newark, New Jersey 07101 (telephone number 201-649-9900). The Company
is a wholly owned subsidiary of Bell Atlantic Corporation ("Bell Atlantic"),
which is one of the seven regional holding companies ("RHCs") formed in
connection with the court-approved divestiture (the "Divestiture"), effective
January 1, 1984, of those assets of American Telephone and Telegraph Company
("AT&T") related to exchange telecommunications, exchange access functions,
printed directories and cellular mobile communications.

The Company presently serves a territory consisting of three Local Access and
Transport Areas ("LATAs"). These LATAs are generally centered on a city or
based on some other identifiable common geography and, with certain limited
exceptions, each LATA marks the boundary within which the Company may provide
telephone service.

The Company provides two basic types of telecommunications services. First,
the Company transports telecommunications traffic between subscribers located
within the same LATA ("intraLATA service"), including both local and toll
services. Local service includes the provision of local exchange ("dial tone"),
local private line and public telephone services (including dial tone service
for pay telephones owned by the Company and other pay telephone providers).
Among other local services provided are Centrex (telephone company central
office-based switched telephone service enabling the subscriber to make both
intercom and outside calls) and a variety of special and custom calling
services. Toll service includes message toll service (calling service beyond
the local calling area) within LATA boundaries, and intraLATA Wide Area Toll
Service (WATS)/800 services (volume discount offerings for customers with highly
concentrated demand). The Company also earns toll revenue from the provision of
telecommunications service between LATAs ("interLATA service") in the corridors
between the cities (and certain surrounding counties) of (i) New York, New York
and Newark, New Jersey, and (ii) Philadelphia, Pennsylvania and Camden, New
Jersey. Second, the Company provides exchange access service, which links a
subscriber's telephone or other equipment to the transmission facilities of
interexchange carriers which, in turn, provide interLATA telecommunications
service to their customers. The Company also provides exchange access service
to interexchange carriers which provide intrastate intraLATA long distance
telecommunications service.

OPERATIONS

During 1993, Bell Atlantic reorganized certain functions formerly performed
by each of the seven Bell System operating companies ("BOCs") transferred to it
pursuant to the Divestiture, including the Company (collectively, the "Network
Services Companies"), into lines of business ("LOBs") organized across the
Network Services Companies around specific market segments. The Network Services
Companies, however, remain responsible within their respective service areas for
the provision of telephone services, financial performance and regulatory
matters. The LOBs are:

The Consumer Services LOB markets communications services to residential
customers within the service territories of the Network Services Companies,
including the service territory of the Company, and plans to market information
services and entertainment programming.

The Carrier Services LOB markets (i) switched and special access to the
Company's local exchange network, and (ii) billing and collection services,
including recording, rating, bill processing and bill rendering. The principal
customers of this LOB are interexchange carriers; AT&T is the largest single
customer. Other customers include business customers and government agencies
with their own special access network connections, wireless companies and other
local exchange carriers ("LECs") which resell network connections to their own
customers.

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Bell Atlantic - New Jersey, Inc.

The Small Business Services LOB markets communications and information
services to small businesses (customers having up to 20 access lines or 100
Centrex lines).

The Large Business Services LOB markets communications and information
services to large businesses (customers having more than 20 access lines or more
than 100 Centrex lines). These services include voice switching/processing
services (e.g., dedicated private lines, custom Centrex, call management and
voice messaging), end-user networking (e.g., credit and debit card transactions,
and personal computer-based conferencing, including data and video),
internetworking (establishing links between the geographically disparate
networks of two or more companies or within the same company), network
integration (integrating multiple geographically disparate networks into one
system), network optimization (disaster avoidance, 911, intelligent vehicle
highway systems), video services (distance learning, telemedicine, surveillance,
videoconferencing) and integrated multi-media applications services.

The Directory Services LOB manages the provision of (i) advertising and
marketing services to advertisers, and (ii) listing information (e.g., White
Pages and Yellow Pages). These services are currently provided primarily
through print media, but the Company expects that use of electronic formats will
increase in the future. In addition, the Directory Services LOB manages the
provision of photocomposition, database management and other related products
and services to publishers.

The Public and Operator Services LOB markets pay telephone and operator
services in the service territories of the Network Services Companies to meet
consumer needs for accessing public networks, locating and identifying network
subscribers, providing calling assistance and arranging billing alternatives
(e.g., calling card, collect and third party calls).

The Federal Systems LOB markets communications and information technology and
services to departments, agencies and offices of the executive, judicial and
legislative branches of the federal government.

The Network LOB manages the technologies, services and systems platforms
required by the other LOBs and the Network Services Companies, including
the Company, to meet the needs of their respective customers, including
switching, feature development and on-premises installation and maintenance
services.

The Company has been making and expects to continue to make significant
capital expenditures to meet the demand for communications services and to
further improve such services. Capital expenditures were approximately $596
million in 1992, $590 million in 1993 and $629 million in 1994. The total
investment in plant, property and equipment was approximately $8.08 billion at
December 31, 1992, $8.38 billion at December 31, 1993, and $8.70 billion at
December 31, 1994, in each case after giving effect to retirements, but before
deducting accumulated depreciation at such date.

The Company is projecting construction expenditures for 1995 of approximately
$642 million. The Company will allocate capital resources to the deployment of
broadband network platforms (technologies ultimately capable of providing a
switched facility for access to and transport of high-speed data services,
video-on-demand, and image and interactive multimedia applications). Most of
the funds for these expenditures are expected to be generated internally. Some
additional external financing may be necessary or desirable.

LINE OF BUSINESS RESTRICTIONS

The consent decree entitled "Modification of Final Judgment" ("MFJ") approved
by the United States District Court for the District of Columbia (the "D.C.
District Court") which, together with the Plan of Reorganization ("Plan")
approved by the D.C. District Court, set forth the terms of Divestiture also
established certain restrictions on the post-Divestiture activities of the RHCs,
including Bell Atlantic

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Bell Atlantic - New Jersey, Inc.

and its subsidiaries. Currently, the MFJ's principal restrictions on post-
Divestiture RHC activities are prohibitions on (i) providing interexchange
telecommunications, and (ii) engaging in the manufacture of telecommunications
equipment and customer premises equipment ("CPE"). Since Divestiture, the D.C.
District Court has retained jurisdiction over the construction, modification,
implementation and enforcement of the MFJ.

Legislation has been introduced in the current session of Congress pursuant
to which the line of business restrictions established by the MFJ could be
eliminated or modified. No definitive prediction can be made as to whether or
when any such legislation will be enacted, the provisions thereof or the impact
on the business or financial condition of the Company.

FCC REGULATION AND INTERSTATE RATES

The Company is subject to the jurisdiction of the Federal Communications
Commission ("FCC") with respect to interstate services and certain related
matters. The FCC prescribes a uniform system of accounts for telephone
companies, interstate depreciation rates and the principles and standard
procedures used to separate plant investment, expenses, taxes and reserves
between those applicable to interstate services under the jurisdiction of the
FCC and those applicable to intrastate services under the jurisdiction of the
respective state regulatory authorities ("separations procedures"). The FCC
also prescribes procedures for allocating costs and revenues between regulated
and unregulated activities.

Interstate Access Charges

The Company provides intraLATA service and, with certain limited exceptions,
does not participate in the provision of interLATA service except through
offerings of exchange access service. The FCC has prescribed structures for
exchange access tariffs to specify the charges ("Access Charges") for use and
availability of the Company's facilities for the origination and termination of
interstate interLATA service.

In general, the tariff structures prescribed by the FCC provide that
interstate costs of the Company which do not vary based on usage ("non-traffic
sensitive costs") are recovered from subscribers through flat monthly charges
("Subscriber Line Charges"), and from interexchange carriers through usage-
sensitive Carrier Common Line ("CCL") charges. Traffic-sensitive interstate
costs are recovered from carriers through variable access charges based on
several factors, primarily usage.

In May 1984, the FCC authorized the implementation of Access Charge tariffs
for "switched access service" (access to the local exchange network) and of
Subscriber Line Charges for multiple line business customers (up to $6.00 per
month per line). In 1985, the FCC authorized Subscriber Line Charges for
residential and single-line business customers at the rate of $1.00 per month
per line, which increased in installments to $3.50, effective April 1, 1989.

FCC Access Charge Pooling Arrangements

The FCC previously required that all LECs, including the Company, pool
revenues from CCL and Subscriber Line Charges that cover the non-traffic
sensitive costs of the local exchange network, that is, the interstate costs
associated with the lines from subscribers' premises to telephone company
central offices. To administer such pooling arrangements, the FCC mandated the
formation of the National Exchange Carrier Association, Inc. ("NECA"). All but
one of the Network Services Companies, including the Company, received
substantially less from the pool than the amount billed to their interexchange
carrier customers.

The FCC changed its mandatory pooling requirements, effective April 1, 1989.
As a result, the Network Services Companies as a group withdrew from the pool
and were permitted to charge CCL rates which more closely reflect their non-
traffic sensitive costs. The Network Services Companies, including the Company,
are still obligated to make contributions of CCL revenues to companies who
choose to continue to pool non-traffic sensitive costs so that the pooling
companies can charge a CCL rate no greater than the nationwide average CCL rate
of price cap companies. In addition to this

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Bell Atlantic - New Jersey, Inc.

continuing obligation, the Network Services Companies, including the Company,
had a transitional support obligation to high cost companies who left the pool
in 1989 and 1990. This transitional support obligation ended in July 1994.

In February 1995, the FCC issued an Order to Show Cause with respect to
certain findings contained in an independent audit concluded in December 1991
with respect to certain filings by the Network Services Companies with NECA.
Resolution of these issues is expected in the second half of 1995.

Price Caps

The price cap system, which has been in effect since 1991, places a cap on
overall LEC prices for interstate access services which is modified annually, in
inflation-adjusted terms, by a fixed percentage which is intended to reflect
increases in productivity. The price cap level can also be adjusted to reflect
"exogenous" changes, such as changes in FCC separations procedures or accounting
rules. LECs subject to price caps have somewhat increased flexibility to change
the prices of existing services within certain groupings of interstate services,
known as "baskets".

FCC regulations applicable to the Company provide for an authorized rate of
return of 11.25% for the years 1991 and beyond. To the extent that a company is
able to earn a higher rate of return through improved efficiency, the FCC's
price cap rules permit them to retain the full amount of this higher return up
to 100 basis points above the authorized rate of return (currently, up to a
12.25% rate of return). If a company's rate of return is between 100 and 500
basis points above the authorized rate of return (that is, currently, between
12.25% and 16.25%), the company must share 50% of the earnings above the 100-
basis-point level with customers by reducing rates prospectively. All earnings
above the 500-basis-point level must be returned to customers in the form of
prospective rate decreases. If, on the other hand, a company's rate of return
is more than 100 basis points below the authorized rate of return (that is,
currently, below 10.25%), the company is permitted to increase rates
prospectively to make up the deficiency.

Under FCC-approved tariffs, the Network Services Companies are charging
uniform rates for interstate access services (with the exception of Subscriber
Line Charges) throughout the service territories and are regarded as a single
unit by the FCC for rate of return measurement.

In February 1994, the FCC initiated a rulemaking proceeding to determine the
effectiveness of LEC price cap rules and to decide what changes, if any, should
be made to those rules. This rulemaking is expected to be concluded in the
first half of 1995.

Enhanced Services

In 1985, the FCC initiated an examination of its regulations requiring that
"enhanced services" (e.g. voice messaging services, electronic mail, videotext
gateway, protocol conversion) be offered only through a structurally separated
subsidiary. In 1986, the FCC eliminated this requirement, permitting the Company
to offer enhanced services, subject to compliance with a series of non-
structural safeguards. These safeguards include detailed cost accounting,
protection of customer information, public disclosure of technical interfaces
and certain reporting requirements. In 1990, the U.S. Court of Appeals for the
Ninth Circuit (Court of Appeals) vacated and remanded the matter to the FCC. In
1991, the FCC adopted an order which reinstated relief from the separate
subsidiary requirement upon a company's compliance with the FCC's Open Network
Architecture requirements and strengthened some of the nonstructural safeguards.
In 1992, the Company certified to the FCC that it had complied with applicable
requirements, and the FCC granted structural relief.

In October 1994, the Court of Appeals vacated the 1991 order and remanded the
matter to the FCC for further proceedings. As a result, the FCC has initiated a
broad examination of the state of competition in the enhanced services business
and the adequacy of existing non-structural safeguards. The Company is permitted
to continue to offer existing enhanced services pending further action.

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Bell Atlantic - New Jersey, Inc.

FCC Cost Allocation and Affiliate Transaction Rules

FCC rules govern: (i) the allocation of costs between the regulated and
unregulated activities of a communications common carrier and (ii) transactions
between the regulated and unregulated affiliates of a communications common
carrier.

The cost allocation rules apply to certain unregulated activities: activities
that have never been regulated as communications common carrier offerings and
activities that have been preemptively deregulated by the FCC. The costs of
these activities are removed prior to the separations procedures process and are
assigned to unregulated activities in the aggregate, not to specific services,
for pricing purposes. Other activities must be accounted for as regulated
activities, and their costs are subject to separations procedures.

The affiliate transaction rules govern the pricing of assets transferred to
and services provided by affiliates. These rules generally require that assets
be transferred between affiliates at "market price", if such price can be
established through a tariff or a prevailing price actually charged to third
parties. In the absence of a tariff or prevailing price, "market price" cannot
be established, in which case (i) asset transfers from a regulated to an
unregulated affiliate must be valued at the higher of cost or fair market value,
and (ii) asset transfers from an unregulated to a regulated affiliate must be
valued at the lower of cost or fair market value.

The FCC has not attempted to make its cost allocation or affiliate
transaction rules preemptive. State regulatory authorities are free to use
different cost allocation methods and affiliate transaction rules for intrastate
ratemaking and to require carriers to keep separate allocation records.

Telephone Company Provision of Video Dial Tone and Video Programming

In August 1992, the FCC issued an order permitting telephone companies such
as the Company to provide "video dial tone" service. Video dial tone permits
telephone companies to provide video transport to multiple programmers on a non-
discriminatory common carrier basis. In November 1994, the FCC issued an order
which stated that jurisdiction for video dial tone service will be divided
between the FCC and the states. Over the air services and services transported
across state lines will be deemed interstate services subject to regulation by
the FCC. Services delivered entirely within a single state will be deemed
intrastate services subject to state regulation. The order also generally
prohibits the Company from acquiring in-region cable television facilities or
entering into a joint venture with an in-region cable television company or
other video programmer to jointly construct or operate a video dial tone
platform.

In December 1992, two Bell Atlantic Companies, Bell Atlantic - Virginia, Inc.
and Bell Atlantic Video Services Company, filed a lawsuit against the federal
government in the United States District Court for the Eastern District of
Virginia seeking to overturn the prohibition in the Cable Communications Policy
Act of 1984 against LECs providing video programming in their respective
telephone service areas. In 1993, the court struck down this prohibition as a
violation of the First Amendment's freedom of speech protections and enjoined
its enforcement against Bell Atlantic, the Network Services Companies, including
the Company, and Bell Atlantic Video Services Company. This decision was
affirmed by the United States Court of Appeals for the Fourth Circuit in 1994.
The federal government is expected to petition the United States Supreme Court
to review the decision.

In 1992, the Company entered into an agreement with Future Vision of America
Corporation ("Future Vision") pursuant to which the Company will deploy fiber
optic technology in the Dover Township, New Jersey telephone network to
establish a video dial tone platform that will allow Future Vision and other
video information providers to deliver video programming services. The FCC
approved the deployment of this system in late 1994. Service is expected to
commence later in 1995.

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Bell Atlantic - New Jersey, Inc.

Interconnection and Collocation

In order to encourage greater competition in the provision of interstate
special access services, the FCC issued an order in 1992 allowing third parties
to collocate their equipment in telephone company offices to provide special
access (private line) services to the public. The order permits collocating
parties to pay LECs an interconnection charge that is lower than the existing
tariffed rates for similar non-collocated services and it allows LECs limited
additional pricing flexibility for their own special access services when
collocated interconnection is operational. In 1993, the FCC extended collocation
to switched access services under terms and conditions similar to those for
special access collocation. In June 1994, the U.S. Court of Appeals for the
District of Columbia vacated the FCC's special access collocation order insofar
as it required physical collocation. In July 1994, the FCC voted to require LECs
to offer virtual collocation, with the LECs having the option to offer physical
collocation.

STATE REGULATION AND COMPETITIVE ENVIRONMENT

The communications services of the Company are subject to regulation by the
New Jersey Board of Public Utilities (the "BPU") with respect to intrastate
rates and services and other matters.

The New Jersey Telecommunications Act of 1992 authorized the BPU to adopt
alternative regulatory frameworks to address changes in technology and the
structure of the telecommunications industry and to promote economic
development. It also deregulated services which the BPU found to be
competitive. Pursuant to that legislation, the Company filed a Plan for
Alternative Form of Regulation (the "PAR"), which became effective in May 1993.

The PAR replaced the Rate Stability Plan, which was approved by the BPU in
1987. In general, the Rate Stability Plan separated intrastate services into two
categories: Group I (more competitive) and Group II (less competitive). Only
Group II services were subject to financial performance monitoring by the BPU.

The PAR divides the Company's services into Rate-Regulated Services (formerly
Group II services) and Competitive Services (formerly Group I services and
services which have never been regulated by the BPU). Rate-Regulated Services
are grouped in two categories:

--"Protected Services": Basic residence and business service, Touch-Tone,
access services, message toll services and the ordering, installation and
restoration of these services. Rates for Protected Services, other than basic
residence service, may be increased beginning January 1996 in an amount
limited to the prior year's increase in the Gross National Product-Price
Index ("GNP-PI") less a 2% productivity offset, as long as the return on
equity for Rate-Regulated Services does not exceed 11.7%. Basic residence
service rates are frozen through December 1999.

--"Other Services": Custom Calling, Custom Local Area Signaling Services
("CLASS" services which utilize Signaling System 7), operator services and
911 enhanced service. Rates for Other Services may be increased beginning
January 1996 in an amount limited to the prior year's increase in the GNP-PI
less a 2% productivity offset, as long as the return on equity for Rate-
Regulated Services does not exceed 12.7%.

All earnings above a return on equity of 13.7% for Rate-Regulated Services will
be shared equally with customers. There is no point at which the earnings are
capped.

Competitive Services are deregulated under the New Jersey Telecommunications
Act. Other services such as premises wire maintenance, Answer Call and
electronic messaging, which have never been regulated by the BPU, continue to be
deregulated under the New Jersey Telecommunications Act. An appeal of the PAR
is pending.

In January 1995, MFS-Intelenet filed a petition with the BPU requesting
authority to provide local exchange services in areas served by the Company.

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Bell Atlantic - New Jersey, Inc.

COMPETITION

General

Regulatory proceedings, as well as new technology, are continuing to expand
the types of available communications services and equipment and the number of
competitors offering such services. An increasing amount of this competition is
from large companies which have substantial capital, technological and marketing
resources, many of which do not face the same regulatory constraints as the
Company.

Alternative Access

A substantial portion of the Company's revenues from business and government
customers is derived from a relatively small number of large, multiple-line
subscribers.

The Company faces competition from alternative communications systems,
constructed by large end users, interexchange carriers, and alternative access
vendors which are capable of originating and/or terminating calls without the
use of the company's plant. Teleport Communications Group Inc. ("Teleport") and
MFS provide competitive access service in the Princeton-Trenton corridor and
northern New Jersey.

The ability of such alternative access providers to compete with the Company
has been enhanced by the FCC's orders requiring the Company to offer virtual
collocated interconnection for special and switched access services.

Other potential sources of competition are cable television systems, shared
tenant services and other non-carrier systems which are capable of bypassing the
Company's local plant, either partially or completely, through substitution of
special access for switched access or through concentration of
telecommunications traffic on fewer of the Company's lines.

IntraLATA Toll Competition

The ability of interexchange carriers to engage in the provision of
intrastate intraLATA toll service in competition with the Company is subject to
state regulation. Such competition is permitted in New Jersey.

In May 1994, the BPU approved a settlement of a proceeding addressing
intraLATA toll competition. The settlement permitted IXCs to compete for the
provision of intraLATA toll services on an access code basis (e.g., customers
must dial 10XXX to use an IXC), beginning July 1, 1994, and granted the Company
substantial flexibility in the pricing and marketing of the services it offers
to enable it to compete with the IXCs. In January 1995, the BPU commenced a
further proceeding to examine issues of intraLATA toll service competition
including whether presubscription should be authorized, and if so, under what
terms and conditions, and to address the issue of subsidies embodied in the
Company's rates. Currently, intraLATA toll calls default to the Company unless
the customer dials a five digit access code to use an alternate carrier.
Presubscription would enable customers to make intraLATA toll calls using the
carrier of their choice without having to dial the five digit access code. A
decision on this proceeding is expected by the end of 1995.

Personal Communications Services

Radio-based personal communications services ("PCS") also constitute
potential sources of competition to the Company. PCS consists of wireless
portable telephone services which would allow customers to make and receive
telephone calls from any location using small handsets, and which could also be
used for data transmission. The FCC has authorized trials of such services,
using a variety of technologies, by numerous companies, including Bell
Atlantic's cellular telecommunications subsidiaries.

In September 1993, the FCC issued an order allocating radio spectrum to be
licensed for use in providing PCS. Under the order, seven separate bandwidths
of spectrum, ranging in size from 10 MHz to 30 MHz, would be auctioned to
potential PCS providers in each geographic area of the United States; five of
the spectrum blocks would be auctioned by "basic trading area" and the remaining
two would be auctioned

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Bell Atlantic - New Jersey, Inc.

by larger "major trading area" (as such trading areas are defined by Rand
McNally). LECs and companies with LEC subsidiaries, such as Bell Atlantic, are
eligible to bid for PCS licenses, except that cellular carriers, such as Bell
Atlantic, are limited to obtaining only 10 MHz of PCS bandwidth in areas where
they provide cellular service. Bidders other than cellular providers may obtain
multiple licenses aggregating up to 40 MHz of bandwidth in any area.

In October 1994, Bell Atlantic, NYNEX, AirTouch Communications and U S WEST,
Inc., formed a partnership to bid jointly in the FCC's auctions for PCS
licenses. In March 1995, this partnership was a successful bidder for licenses
for spectrum to provide PCS services in the following markets: Chicago; Dallas;
Tampa; Houston; Miami; New Orleans; Milwaukee; Richmond; San Antonio;
Jacksonville; and Honolulu.

Centrex

The Company offers Centrex service, which is a telephone company central
office-based communications system for business, government and other
institutional customers consisting of a variety of integrated software-based
features located in a centralized switch or switches and extended to the
customer's premises primarily via local distribution facilities. In the
provision of Centrex, the Company is subject to significant competition from the
providers of CPE systems, such as private branch exchanges ("PBXs"), which
perform similar functions with less use of the Company's switching facilities.

Users of Centrex systems generally require more subscriber lines than users
of PBX systems of similar capacity. The FCC increased the maximum Subscriber
Line Charge on embedded Centrex lines to $6.00 per month per line, effective
April 1, 1989. Increases in Subscriber Line Charges result in Centrex users
incurring higher charges than users of comparable PBX systems. The BPU has
permitted flexible pricing of certain Centrex services, which helps offset the
effects of higher Subscriber Line Charges.

Directories

The Company continues to face significant competition from other providers of
directories, as well as competition from other advertising media. In
particular, the former sales representative of several of the Network Services
Companies publishes directories in competition with those published by the
Company in its service territory.

Public Telephone Services

The Company faces increasing competition in the provision of pay telephone
services from other pay telephone service providers. In addition, the growth of
wireless communications negatively impacts usage of public telephones.

Operator Services

Alternative operator services providers have entered into competition with
the Company's operator services product line.

NEW PRODUCTS AND SERVICES

The following were among the new products and services introduced by the
Company in 1994:

Small Business Economic Development Incentive Program provides a discounted
rate plan designed to provide an incentive to small business customers to expand
business and employment in New Jersey's Urban Enterprise Zones. The program
provides the waiving of up to $500 of the nonrecurring charges for the
connection of new or additional exchange access lines and will provide one month
of free service for up to three new or additional CLASS or Custom Calling
features for one business line.

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Bell Atlantic - New Jersey, Inc.

Individual Line Business IntelliLinQ Basic Rate Interface provides customers
with simultaneous access, transmission and switching of voice, data and image
capabilities over a single line by utilizing Integrated Services Digital Network
architecture.

Consumer Opportunity Savings Plan is an optional calling plan that provides a
20% discount on direct distance dialed ("DDD") calls for residence customers who
enroll in the plan and whose monthly intraLATA DDD charges equal or exceed $20.

Toll Savings Plan is an optional toll calling plan for business customers who
generate $150,000 or more in annual billing for the Company's services
(exclusive of Directory Advertising) or who have 21 or more access lines or 101
or more station lines. This plan provides a fixed rate per minute for 50 hours
or more of calling based on the total hours of intraLATA DDD usage.

Outward WATS Savings Plan is an optional calling plan for business customers
who generate $150,000 or more in annual billing for the Company (exclusive of
Directory Advertising) or who have 21 or more access lines or 101 or more
station lines. This plan provides a fixed rate per minute for 50 hours or more
of calling based on the total hours of intrastate intraLATA Outward WATS usage.

CustoPAK is a Centrex service targeted to small business customers which
provides intercommunication between Centrex lines within the customer's system,
Local Exchange Service, direct in dialing to Centrex lines, identification and
billing of outgoing long distance messages by line number where such billing is
done by the Company, Touch Tone Calling service, and intercept to the main
listed number.

The Company also introduced ISDN Anywhere which allows customers in non-
equipped Integrated Services Digital Network ("ISDN") offices to be offered
service from a designated host switch. Customers served by non-equipped offices
will be offered service from the designated host switch until such time as their
home office becomes equipped with ISDN. ISDN services provide for simultaneous
transport of voice, data and images. Other new services introduced were Three
Way Call Transfer and Operator Revert. The Company also introduced the
capability for Per Call Blocking and Anonymous Call Rejection.

CERTAIN CONTRACTS AND RELATIONSHIPS

Certain planning, marketing, procurement, financial, legal, accounting,
technical support and other management services are provided on behalf of the
Company on a centralized basis by Bell Atlantic's wholly owned subsidiary, Bell
Atlantic Network Services, Inc. ("NSI"). Bell Atlantic Network Funding
Corporation provides short-term financing and cash management services to the
Company.

The seven RHCs each own (directly or through subsidiaries) a one-seventh
interest in Bell Communications Research, Inc. ("Bellcore"). Pursuant to the
Plan, Bellcore furnishes the RHCs and their BOC subsidiaries with technical
assistance such as network planning, engineering and software development, as
well as various other consulting services that can be provided more effectively
on a centralized basis. Bellcore is the central point of contact for
coordinating the efforts of the RHCs in meeting the national security and
emergency preparedness requirements of the federal government. It also helps to
mobilize the combined resources of the RHCs in times of natural disasters.

9
<PAGE>

Bell Atlantic - New Jersey, Inc.

EMPLOYEE RELATIONS

As of December 31, 1994, the Company employed approximately 14,500 persons,
including personnel managed by the centralized staff of NSI. This represents a
decrease of approximately 5% from December 31, 1993. This workforce is
augmented by employees of the centralized staff of NSI, who perform services for
the Company on a contract basis.

Approximately 86% of the Company's employees are represented by unions. Of
those so represented, approximately 39% are represented by the Communications
Workers of America, and approximately 61% are represented by the International
Brotherhood of Electrical Workers. Both are affiliated with the American
Federation of Labor - Congress of Industrial Organizations.

The represented associates received a base wage increase of 4.00% in August
1994 under the terms of three-year contracts, which were ratified in October
1992 by unions representing associate employees of the Bell Atlantic Network
Services Companies, including the Company and NSI. Under the same contracts,
associates received a Corporate Profit Sharing payment of $480 per person in
1995 based upon Bell Atlantic's 1994 financial performance.

The terms of the contracts ratified in October 1992 by unions representing
associate employees of the Bell Atlantic Network Services Companies, including
the Company and NSI, expire in August 1995.

<PAGE>

Bell Atlantic - New Jersey, Inc.

Item 2. Properties

The principal properties of the Company do not lend themselves to simple
description by character and location. The Company's investment in plant,
property and equipment consisted of the following at December 31:

1994 1993
----- -----
<S> <C> <C>

Central office equipment.... 37% 38%
Cable, wiring, and conduit.. 38 38
Land and buildings.......... 8 8
Other equipment............. 12 12
Other....................... 5 4
---- ----
100% 100%
==== ====
</TABLE>

"Central office equipment" consists of switching equipment, transmission
equipment and related facilities. "Cable, wiring, and conduit" consists
primarily of aerial cable, underground cable, conduit and wiring. "Land and
buildings" consists of land owned in fee and improvements thereto, principally
central office buildings. "Other equipment" consists of public telephone
terminal equipment and other terminal equipment, poles, furniture, office
equipment, and vehicles and other work equipment. "Other" property consists
primarily of plant under construction, capital leases and leasehold
improvements.

The Company's customers are served by electronic switching systems that
provide a wide variety of services. The Company's network is in a transition
from an analog to a digital network, which provides the capabilities to furnish
advanced data transmission and information management services. At December 31,
1994, approximately 71% of the access lines were served by digital capability.

11
<PAGE>

Bell Atlantic - New Jersey, Inc.

Item 3. Legal Proceedings

PRE-DIVESTITURE CONTINGENT LIABILITIES AND LITIGATION

The Plan provides for the recognition and payment by AT&T and the former BOCs
(including the Company) of liabilities that are attributable to pre-Divestiture
events but do not become certain until after Divestiture. These contingent
liabilities relate principally to litigation and other claims with respect to
the former Bell System's rates, taxes, contracts and torts (including business
torts, such as alleged violations of the antitrust laws). Except to the extent
that affected parties otherwise agree, contingent liabilities that are
attributable to pre-Divestiture events are shared by AT&T and the BOCs in
accordance with formulas prescribed by the Plan, whether or not an entity was a
party to the proceeding and regardless of whether an entity was dismissed from
the proceeding by virtue of settlement or otherwise. Each company's allocable
share of liability under these formulas depends on several factors, including
the type of contingent liability involved and each company's relative net
investment as of the effective date of Divestiture. Under the formula generally
applicable to most of the categories of these contingent liabilities, the
Company's aggregate allocable share of liability is approximately 2.8%.

AT&T and various of its subsidiaries and the BOCs (including, in some cases,
the Company) have been and are parties to various types of litigation relating
to pre-Divestiture events, including actions and proceedings involving
environmental claims and allegations of violations of equal employment laws.
Damages, if any, ultimately awarded in the remaining actions relating to pre-
Divestiture events could have a financial impact on the Company whether or not
the Company is a defendant since such damages will be treated as contingent
liabilities and allocated in accordance with the allocation rules established by
the Plan.

While complete assurance cannot be given as to the outcome of any contingent
liabilities or litigation, in the opinion of the Company's management, any
monetary liability or financial impact to which the Company would be subject
after final adjudication of all of the remaining potential or actual pre-
Divestiture claims would not be material in amount to the financial position of
the Company.

12
<PAGE>

Bell Atlantic - New Jersey, Inc.

PART I

Item 4. Submission of Matters to a Vote of Security Holders

(Omitted pursuant to General Instruction J(2).)

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

(Inapplicable.)

Item 6. Selected Financial Data

(Omitted pursuant to General Instruction J(2).)

13
<PAGE>

Bell Atlantic - New Jersey, Inc.

Item 7. Management's Discussion and Analysis of Results of Operations
(Abbreviated pursuant to General Instruction J(2).)

This discussion should be read in conjunction with the Financial Statements
and Notes to the Financial Statements included in the index set forth on page
F-1.

RESULTS OF OPERATIONS
---------------------
<S> <C> <C>

For the Years Ended December 31 1994 1993
--------------------------------------------------------------------------------
(Dollars in Millions)
Income Before Extraordinary Items and
Cumulative Effect of Change in Accounting Principle $ 455.7 $487.3

Extraordinary Items
Discontinuation of regulatory accounting
principles, net of tax (589.7) ---
Early extinguishment of debt, net of tax (6.7) (6.9)

Cumulative Effect of Change in Accounting Principle
Postemployment benefits, net of tax --- (30.0)
------- ------

Net Income (Loss) $(140.7) $450.4
======= ======

</TABLE>

The Company reported a loss of $140.7 million in 1994, compared to net income
of $450.4 million in 1993.

Results for 1994 included a noncash, after-tax extraordinary charge of $589.7
million in connection with the Company's decision to discontinue application of
regulatory accounting principles required by Statement of Financial Accounting
Standards No. 71, "Accounting for the Effects of Certain Types of Regulation"
(Statement No. 71). Results also included an extraordinary charge of $6.7
million for the early extinguishment of debt, net of tax.

The discontinued application of Statement No. 71 required the Company, for
financial reporting purposes, to eliminate its regulatory assets and
liabilities, resulting in an after-tax charge of $15.8 million. In addition,
the Company recorded an after-tax charge of $573.9 million, net of related
investment tax credits of $41.1 million, to adjust the carrying amount of its
telephone plant and equipment. On August 1, 1994, the Company began using
shorter asset lives to depreciate certain categories of plant and equipment.
The use of the shorter asset lives increased depreciation expense in 1994 by
approximately $27 million, for financial reporting purposes, over the amount
that would have been recorded using asset lives in effect at the time of the
discontinued application of Statement No. 71. See Notes 1, 2 and 3 to the
Financial Statements for additional information on the discontinuation of
regulatory accounting principles.

Results for 1993 included an extraordinary charge of $6.9 million for the
early extinguishment of debt, net of tax, and $30.0 million for the cumulative
effect of adopting Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits" (Statement No. 112).

In the third quarter of 1994, the Company recorded a pretax charge of $44.9
million, in accordance with Statement No. 112, to recognize the Company's
proportionate share of benefit costs for the separation of employees who are
entitled to benefits under preexisting Bell Atlantic separation pay plans. The
charge, which was actuarially determined, represents benefits earned through
July 1, 1994 for employees who are expected to receive separation payments in
the future, including those who will be separated through 1997, pursuant to
initiatives announced in August 1994. These workforce reductions will be made
possible by changes in provisioning systems and customer service processes,
increased spans of control, and consolidation and centralization of
administrative and staff groups. Costs to enhance systems and consolidate work
activities will be charged to expense as incurred. The Company will continue to
evaluate ways to streamline and restructure its operations and reduce its
workforce to improve its future cost structure.

14
<PAGE>

Bell Atlantic - New Jersey, Inc.
<TABLE>
<CAPTION>

OPERATING REVENUES
------------------
<S> <C> <C>
For the Years Ended December 31 1994 1993
---------------------------------------------------------------------
(Dollars in Millions)
Transport Services
Local service $ 833.9 $ 799.5
Network access 904.1 851.3
Toll service 732.0 724.6
Ancillary Services
Directory advertising 350.9 344.5
Other 141.6 152.2
Value-added Services 421.8 404.0
-------- --------
Total $3,384.3 $3,276.1
======== ========
</TABLE>

TRANSPORT SERVICES OPERATING STATISTICS
---------------------------------------

<TABLE>
<CAPTION>
Percentage
1994 1993 Increase
-----------------------------------------------------------------------------
<S> <C> <C> <C>
AT YEAR-END
-----------
ACCESS LINES IN SERVICE (In thousands)
Residence 3,513 3,440 2.1%
Business 1,717 1,641 4.6
Public 96 96 -
------ ------
5,326 5,177 2.9
====== ======

FOR THE YEAR
------------
ACCESS MINUTES OF USE (In millions)
Interstate 17,670 16,467 7.3
Intrastate 4,069 3,547 14.7
------ ------
21,739 20,014 8.6
====== ======
TOLL MESSAGES (In millions)
Intrastate 2,190 2,135 2.6
Interstate 73 73 -
------ ------
2,263 2,208 2.5
====== ======
</TABLE>

LOCAL SERVICE REVENUES

<TABLE>
<CAPTION>
Dollars in Millions Increase
------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $ 34.4 4.3%
------------------------------------------------------------------------------
</TABLE>

Local service revenues are earned by the Company from the provision of local
exchange, local private line and public telephone services.

Local service revenues increased in 1994 due primarily to the 2.9% growth in
the number of access lines in service, as well as higher usage of basic calling
services.

NETWORK ACCESS REVENUES

<TABLE>
<CAPTION>
Dollars in Millions Increase
------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $ 52.8 6.2%
------------------------------------------------------------------------------
</TABLE>

Network access revenues are received from interexchange carriers (IXCs) for
their use of the Company's local exchange facilities in providing long-distance
services to IXCs' customers and from end-user subscribers. Switched access
service revenues are derived from usage-based charges paid by IXCs for access to
the Company's network. Special access revenues arise from access charges paid
by customers who have private lines, and end-user access revenues are earned
from local exchange carrier customers who pay for access to the network.

15
<PAGE>

Bell Atlantic - New Jersey, Inc.

Network access revenues increased principally due to higher customer demand
for access services as reflected by growth in access minutes of use of 8.6%, as
well as growth in revenue from end-user charges attributable to increasing
access lines in service. Volume-related increases were partially offset by the
effect of price reductions.

TOLL SERVICE REVENUES

<TABLE>
<CAPTION>
Dollars in Millions Increase
------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $ 7.4 1.0%
------------------------------------------------------------------------------
</TABLE>

Toll service revenues are earned from calls made outside a customer's local
calling area, but within the same service area boundaries of the Company,
commonly referred to as "LATAs." Other toll services include 800 services, Wide
Area Telephone Service (WATS) and corridor services (between southern New Jersey
and Philadelphia and northern New Jersey and New York City).

Toll service revenues grew in the first half of 1994 by $22.5 million, but
declined by $15.1 million during the second half of 1994 over comparable periods
in 1993. Growth in the first half of the year was primarily the result of the
recovering economy and harsh weather conditions. The decline in revenues in the
second half of the year reflects increased competition. Beginning July 1, 1994,
IXCs were permitted to compete for intraLATA toll services on an access code
basis. Competition for WATS, private line and interstate toll services resulted
in a revenue decline for the year of $5.8 million. The Company expects that
competition for toll services will continue to intensify in 1995. (see State
Regulation section).

DIRECTORY ADVERTISING REVENUES

<TABLE>
<CAPTION>
Dollars in Millions Increase
------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $ 6.4 1.9%
------------------------------------------------------------------------------
</TABLE>

Directory advertising revenues are earned primarily from local advertising
and marketing services provided to businesses in White and Yellow Page
directories. Other directory advertising services include database and foreign
directory marketing.

Growth in directory advertising revenues was principally due to a change in
customer billing resulting in accelerated revenue recognition in 1994, and
higher rates charged for these services. Volume growth continues to be impacted
by competition from other directory companies, as well as other advertising
media.

OTHER ANCILLARY REVENUES

<TABLE>
<CAPTION>
Dollars in Millions (Decrease)
------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $(10.6) (7.0)%
------------------------------------------------------------------------------
</TABLE>

Other ancillary services include billing and collection services provided to
IXCs, and facilities rental services provided to affiliates and non-affiliates.

Other ancillary services revenues decreased principally due to a reduction in
intraLATA toll compensation, which ceased July 1, 1994 with the commencement of
intraLATA toll competition, and a reduction in rental revenues from non-
affiliates.

16
<PAGE>

Bell Atlantic - New Jersey, Inc.

VALUE-ADDED SERVICES REVENUES

<TABLE>
<CAPTION>
Dollars in Millions Increase
-------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $ 17.8 4.4%
-------------------------------------------------------------------------------
</TABLE>

Value-added services represent a family of enhanced services including Call
Waiting, Return Call, Caller ID, Answer Call, and Voice Mail. These services
also include customer premises services such as inside wire installation and
maintenance and other central office services and features.

Continued growth in the network customer base (access lines) and higher
demand by residence customers for value-added central office and voice messaging
services offered by the Company increased value-added services revenues in 1994.
Value-added services revenues were positively impacted by increased demand and
higher rates for inside wire installation and maintenance services. These
revenue increases were offset, in part, by lower revenues generated from certain
maturing central office services and features.

OPERATING EXPENSES
------------------
<TABLE>
<CAPTION>

For the Years Ended December 31 1994 1993
-------------------------------------------------------------------------------
(Dollars in Millions)
<S> <C> <C>
Employee costs, including benefits and taxes $ 818.5 $ 760.2
Depreciation and amortization 632.4 596.6
Other operating expenses 1,158.9 1,119.0
-------- --------
Total $2,609.8 $2,475.8
======== ========
</TABLE>

EMPLOYEE COSTS

<TABLE>
<CAPTION>
Dollars in Millions Increase
-------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $ 58.3 7.7%
-------------------------------------------------------------------------------
</TABLE>

Employee costs consist of salaries, wages and other employee compensation,
employee benefits and payroll taxes paid directly by the Company. Similar costs
incurred by employees of Bell Atlantic Network Services, Inc. (NSI), who provide
centralized services on a contract basis, are allocated to the Company and are
included in other operating expenses.

The increase in employee costs was largely attributable to a charge of $35.4
million to recognize, in accordance with Statement No. 112, the Company's
proportionate share of benefit costs for the aforementioned separation of
employees. The third and fourth quarters of 1994 also included approximately $2
million for the ongoing recognition of costs under separation pay plans.
Benefit costs associated with the separation of employees of NSI were allocated
to the Company and are included in other operating expenses. Employee costs
were also higher due to salary and wage increases, and increased overtime pay
and higher repair and maintenance activity caused by unusually severe weather
conditions experienced during the year. These expense increases were offset, in
part, by the effect of lower workforce levels during 1994.

DEPRECIATION AND AMORTIZATION

<TABLE>
<CAPTION>
Dollars in Millions Increase
-------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $ 35.8 6.0%
-------------------------------------------------------------------------------
</TABLE>

Depreciation and amortization expense increased due principally to growth in
telephone plant and increased rates of depreciation, including depreciation
increases resulting from the Company's aforementioned discontinued application
of Statement

17
<PAGE>

Bell Atlantic - New Jersey, Inc.

No. 71. On August 1, 1994, the Company began using shorter asset lives for
certain categories of plant and equipment which reflect the Company's
expectations as to the revenue-producing lives of the assets (see Note 3 to the
Financial Statements). The use of the shorter asset lives increased depreciation
expense in 1994, for financial reporting purposes, by approximately $27 million
over the amount that would have been recorded using asset lives in effect at the
time of the discontinued application of Statement No. 71. Future depreciation
rate changes for regulatory purposes will not affect depreciation expense
recognized for financial reporting purposes.

OTHER OPERATING EXPENSE

<TABLE>
<CAPTION>
Dollars in Millions Increase
------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $ 39.9 3.6%
------------------------------------------------------------------------------
</TABLE>

Other operating expenses consist primarily of contracted services including
centralized service expenses allocated from NSI, rent, network software costs,
operating taxes other than income, provision for uncollectible accounts
receivable and other costs.

The increase in other operating expenses was due principally to higher costs
allocated from NSI primarily as a result of higher employee costs, contracted
services, and employee-related expenses incurred in that organization, including
$9.5 million for the Company's allocated share of separation benefit costs
associated with employees of NSI. Also contributing to the increase were higher
costs for non-affiliate contract labor and engineering services.

These increases were partially offset by $14.2 million, representing the
Company's allocated share of reimbursements of previously recognized costs as a
result of the decision by other Bell Communications Research, Inc. owners to
participate in the Advanced Intelligent Network (AIN) project. Previously, this
project had been supported entirely by Bell Atlantic's network services
subsidiaries, including the Company.

OTHER INCOME AND (EXPENSE), NET

<TABLE>
<CAPTION>
Dollars in Millions (Decrease)
------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $(14.5) ---
------------------------------------------------------------------------------
</TABLE>

The change in other income and (expense), net was largely attributable to the
effect of the reversal of an accrual recorded in 1993 in connection with the
favorable settlement of a tax issue, and a reduction in income related to the
allowance for funds used during construction.

Upon the discontinued application of Statement No. 71, effective August 1,
1994, interest costs on telephone plant under construction were capitalized in
accordance with the provisions of Statement of Financial Accounting Standards
No. 34, "Capitalization of Interest Cost," and reported as a cost of telephone
plant and a reduction of interest expense. Previously, the Company recorded an
allowance for funds used during construction as a cost of plant and an item of
other income. The allowance for funds used during construction recorded prior
to August 1, 1994 totaled $8.4 million, compared to $11.3 million for the
twelve-month period ended December 31, 1993. The lower amount recorded in 1994
resulted primarily from the discontinued application of Statement No. 71 offset,
in part, by increased levels of telephone plant under construction during the
year.

18
<PAGE>

Bell Atlantic - New Jersey, Inc.

INTEREST EXPENSE

<TABLE>
<CAPTION>
Dollars in Millions (Decrease)
--------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $(12.4) (11.0)%
--------------------------------------------------------------------------------
</TABLE>

Interest expense decreased principally due to the effects of long-term debt
refinancings in 1994 and 1993, and a reduction in capital lease interest
expense. Interest expense was further reduced by the recognition of $5.1
million in capitalized interest costs, subsequent to the discontinued
application of Statement No. 71. These decreases were partially offset by
additional expense resulting from higher levels of average short-term debt and
rising interest rates.

PROVISION FOR INCOME TAXES

<TABLE>
<CAPTION>
Dollars in Millions Increase
--------------------------------------------------------------------------------
<S> <C> <C>
1994 - 1993 $ 3.7 1.7%
--------------------------------------------------------------------------------
</TABLE>

EFFECTIVE INCOME TAX RATES

<TABLE>
<CAPTION>
For the Years Ended December 31
--------------------------------------------------------------------------------
<S> <C>
1994 32.6%
--------------------------------------------------------------------------------
1993 30.7%
--------------------------------------------------------------------------------
</TABLE>

The Company's effective income tax rate was higher in 1994 due to the
reduction in the amortization of investment tax credits and the elimination of
the benefit of the rate differential applied to reversing timing differences as
a result of the discontinued application of Statement No. 71. The higher
effective income tax rate also resulted from the effect of a one-time net
benefit recorded in 1993 to adjust deferred taxes for the increase in the
federal corporate income tax rate from 34% to 35%.

COMPETITIVE AND REGULATORY ENVIRONMENT
--------------------------------------

The communications industry continues to undergo fundamental changes which
may have a significant impact on future financial performance of
telecommunications companies. These changes are being driven by a number of
factors, including the accelerated pace of technological innovation, the
convergence of the telecommunications, cable television, information services
and entertainment businesses and a regulatory environment in which traditional
barriers are being lowered or eliminated and competition permitted or
encouraged.

The Company's telecommunications business is subject to competition from
numerous sources. An increasing amount of this competition is from companies
that have substantial capital, technological and marketing resources, many of
which do not face the same regulatory constraints as the Company.

Well-financed competitors are seeking authority, or are likely soon to seek
authority, to offer competing local exchange services, such as dial tone and
local usage, in some of the most lucrative of the Company's local telephone
service areas. In January 1995, MFS-Intelenet filed a petition with the Board
of Public Utilities (BPU) to provide local exchange service in areas served by
the Company.

The entry of well-financed competitors has the potential to adversely affect
multiple revenue streams of the Company, including toll, local exchange and
network access services in the market segments and geographical areas in which
the competitors operate. The amount of revenue reductions will depend, in part,
on the competitors' success in marketing these services, and the conditions
established by regulatory authorities. The potential impact is expected to be
offset, to some extent, by revenues from interconnection charges to be paid to
the Company by these competitors.

19
<PAGE>

Bell Atlantic - New Jersey, Inc.

The Company continues to respond to competitive challenges by intensely
focusing on meeting customer requirements and by reducing its cost structure
through efficiency and productivity initiatives. In addition, the Company
continues to seek growth opportunities in businesses where it possesses core
competencies.

FEDERAL REGULATION

Legislation has been introduced in the current session of the United States
Congress that would remove barriers to entry in the local exchange markets and
would permit local exchange carriers, such as the Company, to provide interLATA
services. The impact of the enactment of such legislation on the Company's
future financial performance will depend on a number of factors, including the
degree of parity under which competition is permitted in the local and long-
distance markets.

In February 1994, the Federal Communications Commission (FCC) initiated a
rulemaking proceeding to determine the effectiveness of the price cap rules
affecting local exchange carriers, including the Company, and to decide what
changes, if any, should be made to those rules. This rulemaking is expected to
be concluded in the first half of 1995.

Recent FCC rulings have sought to expand competition for special and switched
access services. The FCC ordered local exchange carriers, including the
Company, to provide virtual collocation in the Company's central offices to
competitors, with the option of offering physical collocation, for the purpose
of providing special and switched access transport services. The Company does
not expect the net revenue impact of collocation to be material.

STATE REGULATION

The communications services of the Company are subject to regulation by the
BPU with respect to intrastate rates and services and other matters.

In May 1994, the BPU approved a settlement of a proceeding addressing
intraLATA toll competition. The settlement permits IXCs to compete for the
provision of intraLATA toll services on an access code basis (e.g., customers
must dial 10XXX to use an IXC), beginning July 1, 1994, and granted the Company
substantial flexibility in the pricing and marketing of the services it offers
to enable it to compete with the IXCs. In January 1995, the BPU commenced a
further proceeding to examine issues of intraLATA toll service competition
including whether presubscription should be authorized, and if so, under what
terms and conditions, and to address the issue of subsidies embodied in the
Company's rates. A decision on this proceeding is expected by the end of 1995.
The Company's ability to offset such competition will depend, in part, upon the
terms and conditions under which presubscription of intraLATA toll services may
be authorized.

See Item 1 - Description of Business, State Regulation and Competitive
Environment for a complete description of the Company's current regulatory plan
and competitive environment.

OTHER MATTERS
-------------

ENVIRONMENTAL ISSUES

The Company is subject to a number of environmental proceedings as a result
of its operations and shared liability provisions in the Plan of Reorganization
related to the Modification of Final Judgment. Certain of these environmental
matters relate to Superfund sites for which the Company has been joined as a
third-party defendant in pending Superfund litigation. Such joinder subjects
the Company to potential liability for costs relating to cleanup of the affected
sites. The Company is also

20
<PAGE>

Bell Atlantic - New Jersey, Inc.

responsible for the remediation of sites with underground fuel storage tanks and
other expenses associated with environmental compliance.

The Company continually monitors its operations with respect to potential
environmental issues, including changes in legally mandated standards and
remediation technologies. The Company's recorded liability reflects those
specific issues where remediation activities are currently deemed to be probable
and where the cost of remediation is estimable. Management believes that the
aggregate amount of any additional potential liability would not have a material
effect on the Company's results of operations or financial condition.

FINANCIAL CONDITION
-------------------

Management believes that the Company has adequate internal and external
resources available to meet ongoing operating requirements, including network
expansion and modernization, and payment of dividends. Management expects that
presently foreseeable capital requirements will be financed primarily through
internally generated funds. Additional long-term debt may be needed to fund
development activities and to maintain the Company's capital structure within
management's guidelines.

As of December 31, 1994, the Company had $354.7 million of an unused line of
credit with an affiliate, Bell Atlantic Network Funding Corporation. In
addition, the Company had $50.0 million remaining under a shelf registration
statement filed with the Securities and Exchange Commission for the issuance of
unsecured debt securities.

The Company's debt ratio was 48.2% at December 31, 1994, compared to 39.6% at
December 31, 1993. The 1994 debt ratio was impacted significantly by the equity
reduction associated with the discontinued application of Statement No. 71.

As a result of the discontinued application of Statement No. 71, the Balance
Sheet at December 31, 1994 reflects significant changes due to the elimination
of regulatory assets and liabilities, the revaluation of plant and equipment and
the accelerated amortization of investment tax credits (see Note 2 to the
Financial Statements).

21
<PAGE>

Bell Atlantic - New Jersey, Inc.

PART II

Item 8. Financial Statements and Supplementary Data

The information required by this Item is set forth on pages F-1 through
F-20.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

PART III

Item 10. Directors and Executive Officers of the Registrant

(Omitted pursuant to General Instruction J(2).)

Item 11. Executive Compensation

(Omitted pursuant to General Instruction J(2).)

Item 12. Security Ownership of Certain Beneficial Owners and Management

(Omitted pursuant to General Instruction J(2).)

Item 13. Certain Relationships and Related Transactions

(Omitted pursuant to General Instruction J(2).)

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) The following documents are filed as a part of this report:

(1) Financial Statements

See Index to Financial Statements and Financial Statement
Schedule appearing on Page F-1.

(2) Financial Statement Schedules

See Index to Financial Statements and Financial Statement
Schedule appearing on Page F-1.

22
<PAGE>

Bell Atlantic - New Jersey, Inc.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(Continued)

(3) Exhibits

Exhibits identified in parentheses below, on file with the
Securities and Exchange Commission (SEC), are incorporated herein
by reference as exhibits hereto.

Exhibit Number (Referenced to Item 601 of Regulation S-K)
--------------------------------------------------------

3a Restated Certificate of Incorporation of the registrant, dated
September 28, 1989 and filed November 28, 1989. (Exhibit 3a to
the registrant's Annual Report on Form 10-K for 1989, File No. 1-
3488.)

3a(i) Certificate of Amendment to the Certificate of
Incorporation of the registrant's, dated January 7, 1994
and filed January 13, 1994. (Exhibit 3a(i) to the
registrant's Annual Report on Form 10-K for 1993, File
No. 1-3488.)

3b By-Laws of the registrant, as amended January 26, 1995.

4 No instrument which defines the rights of holders of long and
intermediate term debt of the registrant is filed herewith
pursuant to Regulation S-K, Item 601(b)(4)(iii)(A). Pursuant to
this regulation, the registrant hereby agrees to furnish a copy
of any such instrument to the SEC upon request.

10a Agreement Concerning Contingent Liabilities, Tax Matters and
Termination of Certain Agreements among AT&T, Bell Atlantic
Corporation, and the Bell Atlantic Corporation telephone
subsidiaries, and certain other parties, dated as of November 1,
1983. (Exhibit 10a to Bell Atlantic Corporation Annual Report on
Form 10-K for the year ended December 31, 1993, File No. 1-8606.)

10b Agreement among Bell Atlantic Network Services, Inc. and the Bell
Atlantic Corporation telephone subsidiaries, dated November 7,
1983. (Exhibit 10b to Bell Atlantic Corporation Annual Report on
Form 10-K for the year ended December 31, 1993, File No. 1-8606.)

23 Consent of Independent Accountants.

24 Powers of Attorney.

27 Financial Data Schedule.

(b) Reports on Form 8-K:

There were no Current Reports on Form 8-K filed during the
quarter ended December 31, 1994.

23
<PAGE>

Bell Atlantic - New Jersey, Inc.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Bell Atlantic - New Jersey, Inc.

By /s/ Michael J. Losch
------------------------------------
Michael J. Losch
Controller and Treasurer
and Chief Financial
Officer

March 29, 1995

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

<TABLE>
<CAPTION>
__
Principal Executive Officer: |
|
<S> <C> | <C>
Alfred C. Koeppe President and Chief |
Executive Officer |
|
Principal Accounting |
and Financial Officer: |
|
Michael J. Losch Controller and Treasurer |
and Chief Financial |
Officer |
|
Directors: |_ By /s/ Michael J. Losch
| -------------------------
| Michael J. Losch
Robert E. Campbell | (individually and as
Bruce S. Gordon | attorney-in-fact)
Jon F. Hanson | March 29, 1995
Alfred C. Koeppe |
Ellen R. Levine |
James M. Seabrook |
Anthony P. Terracciano |
Leslie A. Vial |
__|
</TABLE>

24
<PAGE>

Bell Atlantic - New Jersey, Inc.

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

Page
----
<S> <C>

Report of Independent Accountants......................... F-2

Statements of Operations and Reinvested Earnings
For the years ended December 31, 1994, 1993, and 1992.. F-3

Balance Sheets - December 31, 1994 and 1993............... F-4

Statements of Cash Flows
For the years ended December 31, 1994, 1993, and 1992.. F-6

Notes to Financial Statements............................. F-7

Schedule II - Valuation and Qualifying Accounts
For the years ended December 31, 1994, 1993, and 1992.. F-20

</TABLE>

Financial statement schedules other than that listed above have been omitted
because such schedules are not required or applicable.

F-1
<PAGE>

Bell Atlantic - New Jersey, Inc.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareowner of
Bell Atlantic - New Jersey, Inc.

We have audited the financial statements and financial statement schedule of
Bell Atlantic - New Jersey, Inc. as listed in the index on page F-1 of this Form
10-K. The financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements and financial statement schedule based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bell Atlantic - New Jersey,
Inc. as of December 31, 1994 and 1993, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly, in
all material respects, the information required to be included therein.

As discussed in Notes 1 and 2 to the financial statements, the Company
discontinued accounting for its operations in accordance with Statement of
Financial Accounting Standards No. 71, "Accounting for the Effects of Certain
Types of Regulation," effective August 1, 1994. Also, as discussed in Notes 1,
7 and 8 to the financial statements, the Company changed its method of
accounting for income taxes and postemployment benefits in 1993.

/s/ COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 6, 1995

F-2
<PAGE>

Bell Atlantic - New Jersey, Inc.

STATEMENTS OF OPERATIONS AND REINVESTED EARNINGS
FOR THE YEARS ENDED DECEMBER 31
(DOLLARS IN MILLIONS)

1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
OPERATING REVENUES (including $54.5,
$49.7 and $46.0 from affiliates)........... $3,384.3 $3,276.1 $3,182.9
-------- -------- --------

OPERATING EXPENSES
Employee costs, including benefits
and taxes................................ 818.5 760.2 770.8
Depreciation and amortization............. 632.4 596.6 535.8
Other (including $541.4,
$511.5 and $515.6 to affiliates)......... 1,158.9 1,119.0 1,122.5
-------- -------- --------
2,609.8 2,475.8 2,429.1
-------- -------- --------

OPERATING INCOME............................ 774.5 800.3 753.8

OTHER INCOME AND (EXPENSE), NET
Allowance for funds used
during construction...................... 8.4 11.3 10.9
Other, net (including $.1,
$.1 and $0 from affiliate)............... (7.1) 4.5 (.3)
-------- -------- --------
1.3 15.8 10.6
INTEREST EXPENSE (including $5.5,
$3.1 and $3.0 to affiliate)................ 100.0 112.4 117.8
-------- -------- --------

INCOME BEFORE PROVISION FOR INCOME TAXES,
EXTRAORDINARY ITEMS, AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE.................................. 675.8 703.7 646.6
PROVISION FOR INCOME TAXES.................. 220.1 216.4 185.5
-------- -------- --------

INCOME BEFORE EXTRAORDINARY ITEMS AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE....................... 455.7 487.3 461.1
-------- -------- --------

EXTRAORDINARY ITEMS
Discontinuation of Regulatory Accounting
Principles, Net of Tax................... (589.7) --- ---
Early Extinguishment of Debt,
Net of Tax............................... (6.7) (6.9) (16.7)
-------- -------- --------
(596.4) (6.9) (16.7)
-------- -------- --------

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE
Postemployment Benefits, Net of Tax....... --- (30.0) ---
-------- -------- --------

NET INCOME (LOSS)........................... $ (140.7) $ 450.4 $ 444.4
======== ======== ========

REINVESTED EARNINGS
At beginning of year...................... $ 750.1 $ 739.4 $ 652.1
Add: net income (loss)................... (140.7) 450.4 444.4
-------- -------- --------
609.4 1,189.8 1,096.5
Deduct: dividends........................ 434.7 439.5 357.1
other changes.................... (.1) .2 ---
-------- -------- --------
At end of year............................ $ 174.8 $ 750.1 $ 739.4
======== ======== ========

</TABLE>

See Notes to Financial Statements.

F-3
<PAGE>

Bell Atlantic - New Jersey, Inc.

BALANCE SHEETS
(DOLLARS IN MILLIONS)

ASSETS
------
<TABLE>
<CAPTION>

DECEMBER 31
------------------
1994 1993
-------- --------
<S> <C> <C>
CURRENT ASSETS
Note receivable from affiliate............ $ --- $ 9.4
Accounts receivable:
Customers and agents, net of allowances
for uncollectibles of $51.4 and $57.7... 577.8 562.3
Affiliates............................... 17.7 24.8
Other.................................... 28.4 24.9
Material and supplies..................... 9.9 17.1
Prepaid expenses.......................... 192.6 137.2
Deferred income taxes..................... 24.5 9.9
Other..................................... 5.8 12.4
-------- --------
856.7 798.0
-------- --------

PLANT, PROPERTY AND EQUIPMENT.............. 8,697.3 8,378.1
Less accumulated depreciation............. 4,555.7 3,295.3
-------- --------
4,141.6 5,082.8
-------- --------

OTHER ASSETS............................... 54.8 168.4
-------- --------

TOTAL ASSETS............................... $5,053.1 $6,049.2
======== ========

</TABLE>

See Notes to Financial Statements.

F-4
<PAGE>

Bell Atlantic - New Jersey, Inc.

BALANCE SHEETS
(DOLLARS IN MILLIONS)

LIABILITIES AND SHAREOWNER'S INVESTMENT
---------------------------------------
<TABLE>
<CAPTION>

DECEMBER 31
------------------
1994 1993
-------- --------
<S> <C> <C>
CURRENT LIABILITIES
Debt maturing within one year:
Note payable to affiliate..................... $ 117.4 $ ---
Other......................................... 29.3 103.8
Accounts payable:
Parent and affiliates......................... 246.8 194.3
Other......................................... 321.7 354.5
Accrued expenses:
Vacation pay.................................. 54.5 52.7
Interest...................................... 16.5 19.5
Taxes......................................... 20.4 27.0
Other......................................... 69.7 61.7
Advance billings and customer deposits.......... 151.4 155.6
-------- --------
1,027.7 969.1
-------- --------
LONG-TERM DEBT................................... 1,301.3 1,294.7
-------- --------

EMPLOYEE BENEFIT OBLIGATIONS..................... 821.3 744.5
-------- --------

DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes........................... 48.1 380.0
Unamortized investment tax credits.............. 46.6 125.1
Other........................................... 252.1 404.5
-------- --------
346.8 909.6
-------- --------
COMMITMENTS (Note 4)

SHAREOWNER'S INVESTMENT
Common stock-one share, without par value,
owned by parent................................ 1,381.2 1,381.2
Reinvested earnings............................. 174.8 750.1
-------- --------
1,556.0 2,131.3
-------- --------

TOTAL LIABILITIES AND SHAREOWNER'S INVESTMENT ... $5,053.1 $6,049.2
======== ========

</TABLE>

See Notes to Financial Statements.

F-5
<PAGE>

Bell Atlantic - New Jersey, Inc.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
(DOLLARS IN MILLIONS)

1994 1993 1992
--------- --------- --------
<S> <C> <C> <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)................................ $ (140.7) $ 450.4 $ 444.4
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization................. 632.4 596.6 535.8
Extraordinary items, net of tax............... 596.4 6.9 16.7
Cumulative effect of change in accounting
principle, net of tax....................... --- 30.0 ---
Allowance for funds used during construction.. (8.4) (11.3) (10.9)
Other items, net.............................. (10.0) (2.0) (20.0)
Changes in certain assets and liabilities:
Accounts receivable........................ (11.9) (17.5) (69.4)
Material and supplies...................... 4.5 4.7 6.6
Other assets............................... (92.3) (38.0) 45.9
Accounts payable and accrued taxes......... 5.0 106.8 30.6
Deferred income taxes, net................. (40.1) (42.8) (39.5)
Unamortized investment tax credits......... (15.2) (13.8) (22.6)
Employee benefit obligations............... 76.8 23.3 12.1
Other liabilities.......................... 25.9 12.5 50.4
-------- -------- -------

Net cash provided by operating activities........ 1,022.4 1,105.8 980.1
-------- -------- -------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to plant, property and equipment....... (628.9) (594.8) (589.6)
Net change in note receivable from affiliate..... 9.4 (9.4) ---
Other plant-related changes...................... 3.4 4.2 (7.0)
-------- -------- -------

Net cash used in investing activities............ (616.1) (600.0) (596.6)
-------- -------- -------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings......................... 249.5 198.2 295.3
Principal repayments of borrowings and
capital lease obligations....................... (4.0) (37.9) (14.3)
Early extinguishment of debt..................... (350.0) (100.0) (300.0)
Net change in note payable to affiliate.......... 117.4 (57.9) .3
Dividends paid................................... (434.7) (439.5) (357.1)
Net change in outstanding checks drawn
on controlled disbursement accounts............. 15.5 (68.7) (7.7)
-------- -------- -------

Net cash used in financing activities............ (406.3) (505.8) (383.5)
-------- -------- -------

INCREASE (DECREASE) IN CASH...................... --- --- ---

CASH, BEGINNING OF YEAR.......................... --- --- ---
-------- -------- -------

CASH, END OF YEAR................................ $ --- $ --- $ ---
======== ======== =======

</TABLE>

See Notes to Financial Statements.

F-6
<PAGE>

Bell Atlantic - New Jersey, Inc.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

Bell Atlantic - New Jersey, Inc. (the Company), is a wholly owned subsidiary
of Bell Atlantic Corporation (Bell Atlantic).

Effective August 1, 1994, the Company discontinued accounting for its
operations under the provisions of Statement of Financial Accounting Standards
No. 71, "Accounting for the Effects of Certain Types of Regulation" (Statement
No. 71) (see Note 2).

REVENUE RECOGNITION

Revenues are recognized as earned on the accrual basis, which is generally
when services are rendered based on the usage of the Company's local exchange
network and facilities.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of 90
days or less when purchased to be cash equivalents. Cash equivalents are stated
at cost, which approximates market value.

MATERIAL AND SUPPLIES

New and reusable materials are carried in inventory, principally at average
original cost, except that specific costs are used in the case of large
individual items.

PREPAID DIRECTORY

Costs of directory production and advertising sales are principally deferred
until the directory is published. Such costs are amortized to expense and the
related advertising revenues are recognized over the average life of the
directory, which is generally 12 months.

PLANT AND DEPRECIATION

The Company's provision for depreciation is based principally on the
composite group remaining life method of depreciation and straight-line
composite rates. This method provides for the recovery of the remaining net
investment in telephone plant, less anticipated net salvage value, over the
remaining asset lives. In connection with the discontinued application of
Statement No. 71, the Company began recording depreciation expense based on
expected revenue-producing asset lives. The following asset lives were used,
effective August 1, 1994: buildings, 21 to 40 years; central office equipment,
8 to 12 years; cable, wiring, and conduit, 16 to 50 years; and other equipment,
6 to 35 years. Previously depreciation expense was based on regulatory asset
lives (see Note 3) and included regulatory determined amortization of certain
classes of telephone plant.

When depreciable plant is replaced or retired, the amounts at which such
plant has been carried in plant, property and equipment are removed from the
respective accounts and charged to accumulated depreciation, and any gains or
losses on disposition are amortized over the remaining asset lives of the
remaining net investment in telephone plant.

MAINTENANCE AND REPAIRS

The cost of maintenance and repairs, including the cost of replacing minor
items not constituting substantial betterments, is charged to operating expense.

F-7
<PAGE>

Bell Atlantic - New Jersey, Inc.

CAPITALIZED INTEREST COST

Upon the discontinued application of Statement No. 71, effective August 1,
1994, the Company began reporting capitalized interest as a cost of telephone
plant and equipment and a reduction in interest expense, in accordance with the
provisions of Statement of Financial Accounting Standards No. 34,
"Capitalization of Interest Cost."

Prior to the discontinued application of Statement No. 71, the Company
recorded an allowance for funds used during construction, which included both
interest and equity return components, as a cost of plant and as an item of
other income.

EMPLOYEE BENEFITS

Pension Plans

Substantially all employees of the Company are covered under noncontributory
multi-employer defined benefit pension plans sponsored by Bell Atlantic and
certain of its subsidiaries, including the Company.

Amounts contributed to the Company's pension plans are actuarially
determined, principally under the aggregate cost actuarial method, and are
subject to applicable federal income tax regulations.

Postretirement Benefits Other Than Pensions

Substantially all employees of the Company are covered under postretirement
health and life insurance benefit plans sponsored by Bell Atlantic and certain
of its subsidiaries, including the Company.

Amounts contributed to 501(c)(9) trusts and 401(h) accounts under applicable
federal income tax regulations to pay certain postretirement benefits are
actuarially determined, principally under the aggregate cost actuarial method.

Postemployment Benefits

The Company provides employees with postemployment benefits such as
disability benefits, workers' compensation, and severance pay.

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits," which requires accrual accounting for the estimated cost of benefits
provided to former or inactive employees after employment but before retirement.
Prior to 1993, the cost of these benefits was primarily charged to expense as
the benefits were paid.

INCOME TAXES

Bell Atlantic and its domestic subsidiaries, including the Company, file a
consolidated federal income tax return.

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (Statement No. 109),
which requires the determination of deferred taxes using the asset and liability
method. Under the asset and liability method, deferred taxes are provided on
book and tax basis differences and deferred tax balances are adjusted to reflect
enacted changes in income tax rates.

The consolidated amount of current and deferred tax expense is allocated by
applying the provisions of Statement No. 109 to each subsidiary as if it were a
separate taxpayer.

Prior to 1993, the Company accounted for income taxes based on the provisions
of Accounting Principles Board Opinion No. 11, "Accounting for Income Taxes"
(APB No. 11). Under APB No. 11, deferred taxes were generally provided to
reflect the effect of timing differences on the recognition of revenue and
expense determined for financial and income tax reporting purposes.

F-8
<PAGE>

Bell Atlantic - New Jersey, Inc.

The Tax Reform Act of 1986 repealed the investment tax credit (ITC) as of
January 1, 1986, subject to certain transitional rules. ITCs were deferred and
are being amortized as a reduction to income tax expense over the estimated
service lives of the related assets.

RECLASSIFICATIONS

Certain reclassifications of prior years' data have been made to conform to
1994 classifications.

2. DISCONTINUATION OF REGULATORY ACCOUNTING PRINCIPLES

In the third quarter of 1994, the Company determined that it was no longer
eligible for continued application of the accounting required by Statement of
Financial Accounting Standards No. 71, "Accounting for the Effects of Certain
Types of Regulation" (Statement No. 71). In connection with the decision to
discontinue regulatory accounting principles under Statement No. 71, the Company
recorded a noncash, after-tax extraordinary charge of $589.7 million, which is
net of an income tax benefit of $423.2 million.

The Company's determination that it was no longer eligible for continued
application of the accounting required by Statement No. 71 was based on the
belief that the convergence of competition, technological change (including the
Company's technology deployment plans), actual and potential regulatory,
legislative and judicial actions, and other factors are creating fully open and
competitive markets. In such markets, the Company does not believe it can be
assured that prices can be maintained at levels that will recover the net
carrying amount of existing telephone plant and equipment, which has been
depreciated over relatively long regulatory lives.

The components of the charge recognized as a result of the discontinued
application of Statement No. 71 follow:
<TABLE>
<CAPTION>

(DOLLARS IN MILLIONS)
----------------------
PRE-TAX AFTER-TAX
--------- -----------
<S> <C> <C>

Increase in plant and equipment depreciation reserve.... $ 946.1 $615.0
Accelerated investment tax credit amortization.......... --- (41.1)
Tax-related regulatory asset and liability elimination.. --- (27.6)
Other regulatory asset and liability elimination........ 66.8 43.4
-------- ------
Total................................................... $1,012.9 $589.7
======== ======

</TABLE>

The increase in the accumulated depreciation reserve of $946.1 million was
supported by both an impairment analysis, which identified estimated amounts not
recoverable from future discounted cash flows, and a depreciation study, which
identified inadequate depreciation reserve levels which the Company believes
resulted principally from the cumulative underdepreciation of plant as a result
of the regulatory process. Investment tax credit amortization was accelerated
as a result of the reduction in remaining asset lives of the associated
telephone plant and equipment.

Upon adoption of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," the effects of required adjustments to deferred
tax balances were deferred on the balance sheet as regulatory assets and
liabilities and amortized at the time the related deferred taxes were recognized
in the ratemaking process. As of August 1, 1994, tax-related regulatory assets
of $117.5 million and tax-related regulatory liabilities of $145.1 million were
eliminated. The elimination of other regulatory assets and liabilities relate
principally to deferred debt refinancing and vacation pay costs, which were
being amortized as they were recognized in the ratemaking process.

F-9
<PAGE>

Bell Atlantic - New Jersey, Inc.

3. PLANT, PROPERTY AND EQUIPMENT

Plant, property and equipment, which is stated at cost, is summarized as
follows at December 31:
<TABLE>
<CAPTION>
1994 1993
----------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C>

Land........................ $ 47.4 $ 45.8
Buildings................... 615.9 594.2
Central office equipment.... 3,193.7 3,157.2
Cable, wiring, and conduit.. 3,319.8 3,214.0
Other equipment............. 1,086.0 1,040.3
Other....................... 122.2 135.5
Construction-in-progress.... 312.3 191.1
--------- ---------
8,697.3 8,378.1
Accumulated depreciation.... (4,555.7) (3,295.3)
--------- ---------
Total....................... $ 4,141.6 $ 5,082.8
========= =========

</TABLE>

The increase in accumulated depreciation in 1994 included $946.1 million
attributable to the adjustment to the carrying value of plant and equipment
resulting from the discontinued application of Statement No. 71 (see Note 2).
The components of the adjustment to the accumulated depreciation reserve are
summarized as follows:
<TABLE>
<CAPTION>

(DOLLARS IN MILLIONS)
---------------------
<S> <C>

Buildings................... $ 38.7
Central office equipment.... 311.1
Cable, wiring, and conduit.. 486.8
Other equipment............. 109.5
------
Total....................... $946.1
======

</TABLE>

In connection with the discontinued application of Statement No. 71,
effective August 1, 1994, for financial reporting purposes, the Company began
using estimated asset lives for certain categories of plant and equipment that
are shorter than those in effect prior to the discontinuance of Statement No.
71. The shorter lives result from the Company's expectation as to the revenue-
producing lives of the assets. A comparison of the regulatory asset lives to
the shorter new asset lives for the most significantly impacted categories of
plant and equipment follows:
<TABLE>
<CAPTION>

AVERAGE LIVES (IN YEARS)
-------------------------------
REGULATORY NEW
ASSET LIVES ASSET LIVES
----------- ------------------
<S> <C> <C>

Buildings........ 21 - 50 21 - 40
Digital switch... 17.5 - 19 12
Digital circuit.. 13 9
Conduit.......... 60 50
Copper cable..... 22 - 30 16 - 17
Fiber cable...... 25 - 30 20 - 25

</TABLE>

4. LEASES

The Company has entered into both capital and operating leases for facilities
and equipment used in operations. Plant, property and equipment included
capital leases of $68.9 million and $85.4 million and related accumulated
amortization of $39.1 million and $47.1 million at December 31, 1994 and 1993,
respectively. The Company incurred initial capital lease obligations of $.5
million in 1994, as compared to no initial capital lease obligations in 1993 and
$.3 million in 1992.

Total rent expense amounted to $53.3 million in 1994, $53.6 million in 1993,
and $55.1 million in 1992. Of these amounts, the Company incurred rent expense
of $12.3 million, $6.8 million, and $3.6 million in 1994, 1993, and 1992,
respectively, to affiliated companies.

F-10
<PAGE>

Bell Atlantic - New Jersey, Inc.

At December 31, 1994, the aggregate minimum rental commitments under
noncancelable leases for the periods shown are as follows:
<TABLE>
<CAPTION>

YEARS CAPITAL LEASES OPERATING LEASES
----- -------------- ----------------
(DOLLARS IN MILLIONS)
<S> <C> <C>

1995....................... $ 9.7 $ 8.0
1996....................... 9.4 7.0
1997....................... 9.3 5.4
1998....................... 9.3 3.8
1999....................... 8.8 2.9
Thereafter................. 26.2 14.1
----- -----
Total...................... 72.7 $41.2
=====

Less imputed interest and
executory costs........... 25.6
-----
Present value of net
minimum lease payments.... 47.1
Less current installments.. 4.3
-----
Long-term obligation at
December 31, 1994......... $42.8
=====

</TABLE>
5. DEBT

LONG-TERM

Long-term debt consists principally of debentures issued by the Company.
Interest rates and maturities of the amounts outstanding are as follows at
December 31:
<TABLE>
<CAPTION>

1994 1993
----------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C>

Forty year 8 1/4%, due 1994.............. $ --- $ 100.0
Forty year 3 3/8%, due 1995.............. 25.0 25.0
Forty year 4 7/8%, due 2000.............. 20.0 20.0
Ten year 7 1/4%, due 2002................ 100.0 100.0
Ten year 5 7/8%, due 2004................ 250.0 ---
Forty year 4 5/8%, due 2005.............. 40.0 40.0
Forty year 5 7/8%, due 2006.............. 55.0 55.0
Forty year 6 5/8%, due 2008.............. 50.0 50.0
Forty year 7 1/4%, due 2011.............. 125.0 125.0
Forty year 7 3/8%, due 2012.............. 75.0 75.0
Forty year 7 3/4%, due 2013.............. --- 150.0
Forty year 8%, due 2016.................. --- 100.0
Thirty year 8%, due 2022................. 200.0 200.0
Thirty year 7 1/4%, due 2023............. 100.0 100.0
Thirty-one year 6.80%, due 2024.......... 100.0 100.0
Forty year 7.85%, due 2029............... 150.0 150.0
-------- --------
1,290.0 1,390.0

Unamortized discount and premium, net.... (6.5) (41.9)
Capital lease obligations-average rate
11.1% and 10.8%......................... 47.1 50.4
-------- --------
Total long-term debt, including current
maturities.............................. 1,330.6 1,398.5
Less maturing within one year............ 29.3 103.8
-------- --------
Total long-term debt..................... $1,301.3 $1,294.7
======== ========
</TABLE>

Long-term debt outstanding at December 31, 1994 includes $390.0 million that
is callable by the Company. The call prices range from 102.7% to 100.0% of face
value, depending upon the remaining term to maturity of the issue. In addition,
long-term debt includes $150.0 million that will become redeemable only on
November 15, 1999 at the option of the holders. The redemption price will be
100.0% of face value, plus accrued interest.

F-11
<PAGE>

Bell Atlantic - New Jersey, Inc.

On February 14, 1994, the Company sold $250.0 million of Ten Year 5 7/8%
Debentures, due February 1, 2004, through a public offering. The debentures are
not redeemable by the Company prior to maturity. The net proceeds from this
issuance were used on March 2, 1994, to redeem $150.0 million of Forty Year 7
3/4% Debentures due in 2013, and $100.0 million of Forty Year 8% Debentures due
in 2016. The Company redeemed the $150.0 million 7 3/4% debentures at a call
price equal to 102.8% of the principal amount, plus accrued interest from March
1, 1994, and the $100 million 8% debentures at a call price equal to 104.1% of
the principal amount, plus accrued interest from September 15, 1993. As a result
of the early extinguishment of these debentures, which were called on January
31, 1994, the Company recorded a charge of $10.3 million, before an income tax
benefit of $3.6 million, in the first quarter of 1994.

The Company recorded extraordinary charges associated with the early
extinguishment of debentures called by the Company of $10.5 million, before an
income tax benefit of $3.6 million in 1993, and $25.3 million, before an income
tax benefit of $8.6 million in 1992.

At December 31, 1994, the Company had $50.0 million remaining under a shelf
registration statement filed with the Securities and Exchange Commission.

DEBT MATURING WITHIN ONE YEAR

Debt maturing within one year consists of the following at December 31:
<TABLE>
<CAPTION>

1994 1993
----------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C>

Note payable to affiliate (BANFC)................ $117.4 $ ---
Long-term debt maturing within one year.......... 29.3 103.8
------ ------
Total............................................ $146.7 $103.8
====== ======

Weighted average interest rate for note payable
outstanding at year-end......................... 5.7% ---%
====== ======
</TABLE>

The Company has a contractual agreement with an affiliated company, Bell
Atlantic Network Funding Corporation (BANFC), for the provision of short-term
financing and cash management services. BANFC issues commercial paper and
secures bank loans to fund the working capital requirements of Bell Atlantic's
network services subsidiaries, including the Company, and invests funds in
temporary investments on their behalf. At December 31, 1994, the Company had
$354.7 million of an unused line of credit with BANFC.

6. FINANCIAL INSTRUMENTS

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations
of credit risk consist primarily of trade receivables and a note receivable from
affiliate.

Concentrations of credit risk with respect to trade receivables, other than
those from AT&T, are limited due to the large number of customers in the
Company's customer base. For the years ended December 31, 1994, 1993 and 1992,
revenues generated from services provided to AT&T, primarily network access,
billing and collection, and sharing of network facilities, were $419.2 million,
$423.8 million, and $470.1 million, respectively. At December 31, 1994 and
1993, Accounts receivable, net, included $53.5 million and $66.1 million,
respectively, from AT&T.

F-12
<PAGE>

Bell Atlantic - New Jersey, Inc.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments.

Accounts Receivable, Note Receivable from Affiliate (BANFC), Accounts Payable,
Note Payable to Affiliate (BANFC), and Accrued Liabilities

The carrying amount approximates fair value.

Debt Maturing Within One Year and Long-Term Debt

Fair value is estimated based on the quoted market prices for the same or
similar issues or is based on the net present value of the expected future cash
flows using current interest rates.

The estimated fair values of the Company's financial instruments are as
follows at December 31:
<TABLE>
<CAPTION>

1994 1993
------------------ ------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>

Debt maturing within one
year, excluding capital
lease obligations.............. $ 142.4 $ 141.5 $ 100.0 $ 103.8

Long-term debt, excluding
unamortized discount and
premium and capital lease
obligations.................... $1,265.0 $1,127.6 $1,290.0 $1,345.0

Note receivable from affiliate.. --- --- $ 9.4 $ 9.4

</TABLE>
7. EMPLOYEE BENEFITS

PENSION PLANS

Substantially all of the Company's management and associate employees are
covered under multi-employer noncontributory defined benefit pension plans
sponsored by Bell Atlantic and certain of its subsidiaries, including the
Company. The pension benefit formula is based on a flat dollar amount per year
of service according to job classification under the associate plan and a stated
percentage of adjusted career average earnings under the plans for management
employees. The Company's objective in funding the plans is to accumulate funds
at a relatively stable level over participants' working lives so that benefits
are fully funded at retirement. Plan assets consist principally of investments
in domestic and foreign corporate equity securities, U.S. and foreign government
and corporate debt securities, and real estate.

Aggregate pension cost is as follows:
<TABLE>
<CAPTION>

YEARS ENDED DECEMBER 31
--------------------------
1994 1993 1992
-------- ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>

Pension cost.................. $25.7 $25.4 $35.2
===== ===== ======

Pension cost as a percentage
of salaries and wages........ 4.2% 4.5% 4.8%
===== ===== ======

</TABLE>

F-13
<PAGE>

Bell Atlantic - New Jersey, Inc.

Pension cost in 1994 increased slightly over 1993 cost. Pension cost
decreases resulting from plan amendments were more than offset by cost increases
resulting from assumption changes, primarily a decrease in the discount rate
from 7.75% to 7.25%.

The decrease in pension cost in 1993 compared to 1992 is due to the net
effect of the elimination of one-time charges associated with special
termination benefits that were recognized in the preceding year, favorable
investment experience, and changes in plan demographics due to retirement and
severance programs.

Statement of Financial Accounting Standards No. 87, "Employers' Accounting
for Pensions" (Statement No. 87) requires a comparison of the actuarial present
value of projected benefit obligations with the fair value of plan assets, the
disclosure of the components of net periodic pension costs and a reconciliation
of the funded status of the plans with amounts recorded on the balance sheets.
The Company participates in multi-employer plans and therefore, such disclosures
are not presented for the Company because the structure of the plans does not
allow for the determination of this information on an individual participating
company basis.

Significant actuarial assumptions for pension benefits are as follows at
December 31:
<TABLE>
<CAPTION>
1994 1993 1992
----- ----- -----
<S> <C> <C> <C>

Discount rate................ 8.25% 7.25% 7.75%
Rate of future increases in
compensation levels......... 5.25% 5.25% 5.25%
</TABLE>
The expected long-term rate of return on plan assets was 8.25% for 1994,
1993, and 1992.

The Company has in the past entered into collective bargaining agreements
with unions representing certain employees and expects to do so in the future.
Pension benefits have been included in these agreements and improvements in
benefits have been made from time to time. Additionally, the Company has
amended the benefit formula under pension plans maintained for its management
employees. Expectations with respect to future amendments to the Company's
pension plans have been reflected in determining the Company's pension cost
under Statement No. 87.

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

Substantially all of the Company's management and associate employees are
covered under postretirement health and life insurance benefit plans sponsored
by Bell Atlantic and certain of its subsidiaries, including the Company. The
determination of benefit cost for postretirement health benefit plans is based
on comprehensive hospital, medical, surgical and dental benefit plan provisions.
The postretirement life insurance benefit formula used in the determination of
postretirement benefit cost is primarily based on annual basic pay at
retirement. The Company funds the postretirement health and life insurance
benefits of current and future retirees. Plan assets consist principally of
investments in domestic and foreign corporate equity securities, and U.S.
Government and corporate debt securities.

Aggregate postretirement benefit cost is as follows:

YEARS ENDED DECEMBER 31
------------------------
1994 1993 1992
----- ------ -----
(DOLLARS IN MILLIONS)

Postretirement benefit cost .......... $61.5 $64.1 $59.7
===== ===== =====

Postretirement benefit cost decreased in 1994 as a result of favorable claims
and demographic experience offset, in part, by cost increases resulting from
assumption changes, primarily a decrease in the discount rate from 7.75% to
7.25%. As a result of the 1992 collective bargaining agreements, Bell Atlantic
amended the postretirement medical benefit plan for associate employees and
certain associate retirees of the Company. The increase in 1993 postretirement
benefit cost over 1992 cost was primarily due to the change in benefit levels
and claims experience. Also contributing to the increase were changes in
actuarial assumptions and demographic experience.

F-14
<PAGE>

Bell Atlantic - New Jersey, Inc.

Statement of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other than Pensions," (Statement No. 106) requires a
comparison of the actuarial present value of projected postretirement benefit
obligations with the fair value of plan assets, the disclosure of the components
of net periodic postretirement benefit costs, and a reconciliation of the funded
status of the plan with amounts recorded on the balance sheets. The Company
participates in multi-employer plans and therefore, such disclosures are not
presented for the Company because the structure of the plans does not provide
for the determination of this information on an individual participating company
basis.

Significant actuarial assumptions for postretirement benefits are as follows
at December 31:
<TABLE>
<CAPTION>

1994 1993 1992
------ ------ ------
<S> <C> <C> <C>

Discount rate................ 8.25% 7.25% 7.75%
Rate of future increases in
compensation levels......... 5.25 5.25 5.25
Medical cost trend rate:
Year ending................ 12.00 13.00 14.50
Ultimate (year 2003)....... 5.00 5.00 5.00
Dental cost trend rate....... 4.00 4.00 4.00
</TABLE>
The expected long-term rate of return on plan assets was 8.25% for 1994,
1993, and 1992.

Postretirement benefits other than pensions have been included in collective
bargaining agreements and have been modified from time to time. The Company has
periodically modified benefits under plans maintained for its management
employees. Expectations with respect to future amendments to the Company's
postretirement benefit plans have been reflected in determining the Company's
postretirement benefit cost under Statement No. 106.

POSTEMPLOYMENT BENEFITS

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" (Statement No. 112). Statement No. 112 requires accrual accounting
for the estimated cost of benefits provided to former or inactive employees
after employment but before retirement. The cumulative effect at January 1,
1993 of adopting Statement No. 112 reduced net income by $30.0 million, net of a
deferred income tax benefit of $15.4 million. The adoption of Statement No. 112
did not have a significant effect on the Company's ongoing level of operating
expense.

SAVINGS PLANS AND EMPLOYEE STOCK OWNERSHIP PLANS

Substantially all of the Company's employees are eligible to participate in
savings plans established by Bell Atlantic to provide opportunities for eligible
employees to save for retirement on a tax-deferred basis and encourage employees
to acquire and maintain an equity interest in Bell Atlantic. Under these plans,
a certain percentage of eligible employee contributions are matched with shares
of Bell Atlantic common stock. Bell Atlantic funds the matching contribution
through two leveraged employee stock ownership plans (ESOPs). Bell Atlantic
accounts for its ESOPs in accordance with the accounting rules applicable to
companies with ESOP trusts that held securities prior to December 15, 1989. The
Company recognizes its proportionate share of total ESOP cost based on the
Company's matching obligation attributable to participating Company employees.
The Company recorded total ESOP cost

F-15
<PAGE>

Bell Atlantic - New Jersey, Inc.

of $14.4 million, $12.8 million, and $19.0 million, in 1994, 1993, and 1992,
respectively.

8. INCOME TAXES

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (Statement No. 109).
Statement No. 109 requires the determination of deferred taxes using the asset
and liability method. Under the asset and liability method, deferred taxes are
provided on book and tax basis differences and deferred tax balances are
adjusted to reflect enacted changes in income tax rates. Prior to 1993, the
Company accounted for income taxes based on the provisions of Accounting
Principles Board Opinion No. 11.

Statement No. 109 has been adopted on a prospective basis and amounts
presented for prior years have not been restated. As of January 1, 1993, the
Company recorded a charge to income of $.8 million, representing the cumulative
effect of adopting Statement No. 109, which has been reflected in the Provision
for Income Taxes in the Statement of Operations and Reinvested Earnings.

Upon adoption of Statement No. 109, the effects of required adjustments to
deferred tax balances of the Company, which would be recognized in the future
for regulatory purposes, were deferred on the balance sheet as regulatory assets
and liabilities in accordance with Statement No. 71. At January 1, 1993, the
Company recorded income tax-related regulatory assets totaling $130.6 million in
Other Assets and income tax-related regulatory liabilities totaling $228.6
million in Deferred Credits and Other Liabilities - Other. During 1993, these
regulatory assets were increased by $5.9 million and regulatory liabilities were
reduced by $21.7 million for the effect of the federal corporate income tax rate
increase from 34% to 35%, effective January 1, 1993.

The income tax-related regulatory assets and liabilities were eliminated as a
result of the discontinued application of Statement No. 71, effective August 1,
1994 (see Note 2).

The components of income tax expense are as follows:
<TABLE>
<CAPTION>

YEARS ENDED DECEMBER 31
--------------------------
1994 1993 1992
-------- ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Current:
Federal.................. $275.4 $273.0 $247.6

Deferred:
Federal.................. (40.1) (42.8) (39.5)
Investment tax credits.... (15.2) (13.8) (22.6)
------ ------ ------
Total income tax expense.. $220.1 $216.4 $185.5
====== ====== ======
</TABLE>

As a result of the increase in the federal corporate income tax rate from 34%
to 35%, effective January 1, 1993, the Company recorded a net charge to the tax
provision of $.1 million in 1993.

The provision for income taxes varies from the amount computed by applying
the statutory federal income tax rate to income before provision for income
taxes. The difference is attributable to the following factors:
<TABLE>
<CAPTION>

YEARS ENDED DECEMBER 31
-----------------------
1994 1993 1992
----- ------ -----
<S> <C> <C> <C>

Statutory federal income tax rate............ 35.0% 35.0% 34.0%
Investment tax credits....................... (2.3) (1.9) (2.8)
Benefit of rate differential applied to
reversing timing differences................ (1.4) (2.8) (2.5)
Reversal of previously capitalized taxes
and payroll-related construction costs ..... .8 1.1 1.6
Other, net................................... .5 (.7) (1.6)
----- ------ -----
Effective income tax rate.................... 32.6% 30.7% 28.7%
===== ====== =====
</TABLE>

F-16
<PAGE>

Bell Atlantic - New Jersey, Inc.

Significant components of deferred tax liabilities (assets) were as follows
at December 31:
1994 1993
------- -------
(DOLLARS IN MILLIONS)
Deferred tax liabilities:
Depreciation................ $ 470.5 $ 832.7
Other....................... 43.6 24.1
------- -------
514.1 856.8
------- -------
Deferred tax assets:
Employee benefits........... (346.2) (337.4)
Investment tax credits...... (16.3) (67.4)
Advance payments............ (30.4) (34.4)
Other....................... (97.6) (47.4)
------- -------
(490.5) (486.6)
------- -------
Net deferred tax liability... $ 23.6 $ 370.2
======= =======

Total deferred tax assets include approximately $256 million and $257 million
at December 31, 1994 and 1993, respectively, related to postretirement benefit
costs recognized in accordance with Statement No. 106. This deferred tax asset
will gradually be realized over the estimated lives of current retirees and
employees.

For the year ended December 31, 1992, a deferred income tax benefit resulted
from timing differences in the recognition of revenue and expense for financial
and income tax accounting purposes. The sources of these timing differences and
the tax effects of each were as follows:

1992
---------------------
(DOLLARS IN MILLIONS)

Accelerated depreciation ................ $ 3.9
Employee benefits ....................... (32.7)
Other, net .............................. (10.7)
-------
Total ................................... $ (39.5)
=======

9. SUPPLEMENTAL CASH FLOW AND ADDITIONAL FINANCIAL INFORMATION
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------
1994 1993 1992
------- ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for:
Interest, net of amounts capitalized... $ 98.8 $102.6 $113.8
Income taxes, net of amounts refunded.. 281.1 259.3 274.9

ADDITIONAL FINANCIAL INFORMATION:
Interest expense incurred, net of
amounts capitalized.................... 100.0 112.4 117.8
Capitalized interest.................... 5.1 --- ---

</TABLE>

Interest paid during the year includes $5.1 million in 1994, $3.0 million in
1993, and $3.2 million in 1992 related to short-term financing services provided
by Bell Atlantic Network Funding Corporation (see Note 5).

At December 31, 1994 and 1993, $37.5 million and $22.0 million, respectively,
of negative cash balances were classified as accounts payable.

F-17
<PAGE>

Bell Atlantic - New Jersey, Inc.

10. TRANSACTIONS WITH AFFILIATES

The financial statements include transactions with Bell Atlantic Network
Services, Inc. (NSI), Bell Atlantic Network Funding Corporation (BANFC), Bell
Atlantic, and various other affiliates.

The Company has contractual arrangements with NSI for the provision of
various centralized corporate, administrative, planning, financial and other
services. These arrangements serve to fulfill the common needs of Bell
Atlantic's telephone subsidiaries on a centralized basis. The Company's
allocated share of NSI costs include costs billed by Bell Communications
Research, Inc. (Bellcore), another affiliated company owned jointly by the seven
regional holding companies (as shown separately below).

The Company recognizes interest expense and income in connection with
contractual arrangements with BANFC to provide short-term financing, investing
and cash management services to the Company (see Note 5).

Operating revenues include amounts paid to other affiliates in connection
with an interstate revenue sharing arrangement with Bell Atlantic network
services subsidiaries. Operating revenues and expenses also include
miscellaneous items of income and expense resulting from transactions with
other affiliates, primarily rental of facilities and equipment. The Company
also paid cash dividends to its parent, Bell Atlantic.

Transactions with affiliates are summarized as follows:
<TABLE>
<CAPTION>

YEARS ENDED DECEMBER 31
-----------------------
1994 1993 1992
------- ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>

Operating revenues:
Interstate revenue sharing
to affiliates................ $ (2.9) $ (4.6) $ ---
Other revenue from affiliates. 57.4 54.3 46.0
------ ------ ------
54.5 49.7 46.0

Operating expenses:
NSI.......................... 499.7 458.8 457.0
Bellcore..................... 27.1 39.9 55.0
Other........................ 14.6 12.8 3.6
------ ------ ------
541.4 511.5 515.6

Interest income from BANFC....... .1 .1 ---

Interest expense to BANFC........ 5.5 3.1 3.0

Dividends paid to Bell Atlantic.. 434.7 439.5 357.1

</TABLE>

Outstanding balances with affiliates are reported on the balance sheets at
December 31, 1994 and 1993 as Note receivable from affiliate, Accounts
receivable - affiliates, Note payable to affiliate, and Accounts payable -
parent and affiliates.

In 1994, NSI expenses included $9.5 million, representing the Company's
proportionate share of separation benefit costs associated with employees of
NSI. Bellcore expenses in 1994 included reimbursements of $14.2 million from
other Bellcore owners in connection with their decision to participate in the
Advanced Intelligent Network (AIN) project. This project previously had been
supported entirely by Bell Atlantic's network services subsidiaries, including
the Company.

In 1993, the Company's reported charge for the cumulative effect of the
change in accounting for postemployment benefits included $2.5 million, net of a
deferred income tax benefit of $1.3 million, representing the Company's
proportionate share of NSI's accrued cost of postemployment benefits at January
1, 1993.

On February 1, 1995, the Company declared and paid a dividend in the amount
of $108.0 million to Bell Atlantic.

F-18
<PAGE>

Bell Atlantic - New Jersey, Inc.

11. QUARTERLY FINANCIAL INFORMATION (unaudited)
<TABLE>
<CAPTION>

INCOME BEFORE
EXTRAORDINARY
ITEMS AND
CUMULATIVE
EFFECT OF CHANGE NET
OPERATING OPERATING IN ACCOUNTING INCOME
QUARTER ENDED REVENUES INCOME PRINCIPLE (LOSS)
------------- --------- --------- --------------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
1994:
March 31....... $ 843.1 $209.5 $127.1 $ 120.4
June 30........ 854.1 226.2 137.4 137.4
September 30*.. 848.4 139.8 78.0 (511.7)
December 31.... 838.7 199.0 113.2 113.2
-------- ------ ------ -------
Total.......... $3,384.3 $774.5 $455.7 $(140.7)
======== ====== ====== =======

1993:
March 31**..... $ 811.0 $204.7 $123.0 $ 89.2
June 30........ 815.6 224.4 143.7 143.7
September 30... 826.5 193.1 116.5 116.5
December 31.... 823.0 178.1 104.1 101.0
-------- ------ ------ -------
Total.......... $3,276.1 $800.3 $487.3 $ 450.4
======== ====== ====== =======
</TABLE>

* The loss for the third quarter of 1994 includes an extraordinary charge of
$589.7 million, net of an income tax benefit of $423.2 million, related to
the discontinuation of regulatory accounting principles (see Note 2).

** Net income for the first quarter of 1993 includes a charge of $30.0 million,
net of a deferred income tax benefit of $15.4 million, related to the
adoption of Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits" (see Note 7).

F-19
<PAGE>

Bell Atlantic - New Jersey, Inc.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 1994, 1993, and 1992
(Dollars in Millions)
<TABLE>
<CAPTION>

ADDITIONS
-----------------------
CHARGED
BALANCE AT CHARGED TO OTHER CHARGED TO BALANCE
BEGINNING TO ACCOUNTS DEDUCTIONS AT END
DESCRIPTION OF PERIOD EXPENSES NOTE(a) NOTE(b) OF PERIOD
----------- --------- -------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Allowance for Uncollectible
Accounts Receivable:

Year 1994.................. $57.7 $59.6 $48.7 $114.6 $51.4

Year 1993.................. $40.6 $57.2 $48.1 $ 88.2 $57.7

Year 1992.................. $37.1 $33.7 $40.2 $ 70.4 $40.6

</TABLE>
------------------------------------------

(a) (i) Amounts previously written off which were credited directly to this
account when recovered; and (ii) accruals charged to accounts payable for
anticipated uncollectible charges on purchases of accounts receivable from
others which were billed by the Company.

(b) Amounts written off as uncollectible.

F-20
<PAGE>

EXHIBITS

FILED WITH ANNUAL REPORT FORM 10-K

UNDER THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994

Bell Atlantic - New Jersey, Inc.

COMMISSION FILE NUMBER 1-3488
<PAGE>

Form 10-K for 1994
File No. 1-3488
Page 1 of 1

EXHIBIT INDEX

Exhibits identified in parentheses below, on file with the Securities and
Exchange Commission (SEC), are incorporated herein by reference as exhibits
hereto.

Exhibit Number (Referenced to Item 601 of Regulation S-K)
---------------------------------------------------------

3a Restated Certificate of Incorporation of the registrant, dated September
28, 1989 and filed November 28, 1989. (Exhibit 3a to the registrant's
Annual Report on Form 10-K for 1989, File No. 1-3488.)

3a(i) Certificate of Amendment to the Certificate of
Incorporation of the registrant's, dated January 7, 1994 and
filed January 13, 1994. (Exhibit 3a(i) to the registrant's
Annual Report on Form 10-K for 1993, File No. 1-3488.)

3b By-Laws of the registrant, as amended January 26, 1995.

4 No instrument which defines the rights of holders of long and
intermediate term debt of the registrant is filed herewith pursuant to
Regulation S-K, Item 601(b)(4)(iii)(A). Pursuant to this regulation, the
registrant hereby agrees to furnish a copy of any such instrument to the
SEC upon request.

10a Agreement Concerning Contingent Liabilities, Tax Matters and Termination
of Certain Agreements among AT&T, Bell Atlantic Corporation, and the Bell
Atlantic Corporation telephone subsidiaries, and certain other parties,
dated as of November 1, 1983. (Exhibit 10a to Bell Atlantic Corporation
Annual Report on Form 10-K for the year ended December 31, 1993, File No.
1-8606.)

10b Agreement among Bell Atlantic Network Services, Inc. and the Bell
Atlantic Corporations telephone subsidiaries, dated November 7, 1983.
(Exhibit 10b to Bell Atlantic Corporation Annual Report on Form 10-K for
the year ended December 31, 1993, File No. 1-8606.)

23 Consent of Independent Accountants.

24 Powers of Attorney.

27 Financial Data Schedule.

<PAGE>

Exhibit 3b
BELL ATLANTIC-NEW JERSEY, INC.
(formerly New Jersey Bell Telephone Company)

BY-LAWS

As Amended January 26, 1995

ARTICLE 1

STOCKHOLDERS MEETINGS

SECTION 1:1 PLACE OF MEETING. MEETINGS OF THE STOCKHOLDER SHALL BE HELD
AT THE PRINCIPAL OFFICE OF THE CORPORATION IN THE STATE OF NEW JERSEY, OR AT
SUCH OTHER PLACE IN THE MUNICIPALITY IN WHICH THE PRINCIPAL OFFICER MAY BE
LOCATED AS MAY BE DESIGNATED FROM TIME TO TIME BY THE BOARD OF DIRECTORS.

SECTION 1:2 ANNUAL MEETING: ELECTION OF DIRECTORS AND INSPECTORS OF
ELECTION. THERE SHALL BE AN ANNUAL MEETING OF THE STOCKHOLDERS OF THE
CORPORATION FOR THE ELECTION OF DIRECTORS AND INSPECTORS OF ELECTION, AND FOR
THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY BE BROUGHT BEFORE THE MEETING.
ANY BUSINESS WHICH MAY PROPERLY BE BROUGHT BEFORE A GENERAL MEETING OF THE
STOCKHOLDERS AND, IF DUE NOTICE IS GIVEN, ANY BUSINESS WHICH MAY BE CONSIDERED
AND TRANSACTED AT A SPECIAL MEETING OF THE STOCKHOLDERS, MAY BE CONSIDERED AT
THE ANNUAL MEETING.

The annual meeting shall be held on the third Tuesday in March of each year
(unless that day be a holiday, then on the next business day) between the hours
of 10 oclock in the forenoon and 3 oclock in the afternoon or as soon thereafter
as may be convenient.

SECTION 1:3 INSPECTORS OF ELECTION. THERE SHALL BE TWO INSPECTORS OF
ELECTION ELECTED AT THE ANNUAL MEETING OF THE STOCKHOLDERS TO SERVE FOR ONE YEAR
AND UNTIL THEIR SUCCESSORS ARE ELECTED. THEY SHALL ACT AS INSPECTORS AT
ELECTIONS HELD DURING THE ENSUING YEAR AND AT THE NEXT SUCCEEDING ANNUAL
ELECTION FOR DIRECTORS AND INSPECTORS OF ELECTION. EITHER OF THE INSPECTORS, IN
THE ABSENCE OF THE OTHER SHALL HAVE POWER TO CONDUCT AN ELECTION. IF NONE OF
THE INSPECTORS IS PRESENT AT AN ELECTION, THE STOCKHOLDERS PRESENT AT THE
OPENING OF THE MEETING SHALL FILL THE VACANCIES BY THE VOTE OF THE HOLDERS OF
RECORD OF A MAJORITY IN INTEREST OF THE ISSUED AND OUTSTANDING STOCK ENTITLED TO
VOTE AND WHO ARE PRESENT IN PERSON OR BY PROXY. NO PERSON WHO IS A CANDIDATE
FOR THE OFFICE OF DIRECTOR SHALL ACT AS JUDGE, INSPECTOR OR CLERK OF ANY
ELECTION FOR DIRECTORS.

SECTION 1:4 ELECTIONS. THE POLLS AT EVERY ELECTION FOR DIRECTORS AND
INSPECTORS OF ELECTION SHALL REMAIN OPEN UNTIL ALL OF THE STOCKHOLDERS PRESENT
IN PERSON OR BY PROXY HAVE VOTED OR HAVE HAD AN OPPORTUNITY TO VOTE.

At every election each stockholder, whether resident or non-resident, shall
be entitled to one vote, in person or by proxy, for each share of stock held by
such stockholder, but no proxy shall be voted on after three years from its
date.

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SECTION 1:5 SPECIAL MEETINGS. A SPECIAL MEETING OF THE STOCKHOLDERS MAY
BE CALLED BY THE DIRECTORS, THE PRESIDENT, OR IN THE ABSENCE OF THE PRESIDENT,
BY THE VICE PRESIDENT-OPERATIONS & CHIEF OPERATING OFFICER, AT ANY TIME, AND THE
PRESIDENT, OR, IN HIS ABSENCE, THE VICE PRESIDENT-OPERATIONS & CHIEF OPERATING
OFFICER, SHALL CALL A SPECIAL MEETING WHENEVER HE IS REQUESTED, IN WRITING, TO
DO SO BY TWO OF THE DIRECTORS, OR BY THE HOLDERS OF RECORD OF NOT LESS THAN ONE-
THIRD IN INTEREST OF THE ISSUED AND OUTSTANDING STOCK OF THE CORPORATION.

SECTION 1:6 NOTICE OF MEETINGS. UNLESS OTHERWISE REQUIRED BY LAW, A
WRITTEN OR PRINTED NOTICE OF THE TIME AND PLACE OF EVERY ANNUAL MEETING, AND OF
THE TIME, PLACE AND PURPOSE OF EVERY SPECIAL MEETING OF THE STOCKHOLDER SHALL BE
GIVEN, OR CAUSED TO BE GIVEN, BY THE SECRETARY TO EACH STOCKHOLDER OF RECORD AT
LEAST TWO DAYS BEFORE THE DATE SPECIFIED FOR SUCH MEETING.

SECTION 1:7 QUORUM. AT ANY MEETING OF THE STOCKHOLDERS, THE HOLDERS OF A
MAJORITY IN INTEREST OF ALL THE ISSUED AND OUTSTANDING STOCK OF THE CORPORATION,
WHO ARE PRESENT IN PERSON OR BY PROXY, SHALL CONSTITUTE A QUORUM.

If less than a quorum be present, a majority of those present shall
nevertheless have power to adjourn such meeting to another date.

ARTICLE II
BOARD OF DIRECTORS

SECTION 2:1 NUMBER AND QUALIFICATIONS OF DIRECTORS. THE BOARD OF
DIRECTORS SHALL CONSIST OF NOT LESS THAN THREE OR MORE THAN TEN MEMBERS, AS MAY
BE DETERMINED FROM TIME TO TIME BY THE BOARD. A MAJORITY OF THE DIRECTORS SHALL
BE CITIZENS OF THE STATE OF NEW JERSEY. EACH DIRECTOR SHALL CONTINUE IN OFFICE
FOR ONE YEAR, AND UNTIL HIS SUCCESSOR SHALL BE ELECTED AND QUALIFIED.

SECTION 2:2 MEETINGS; TIME AND PLACE. A STATED MEETING OF THE BOARD OF
DIRECTORS SHALL BE HELD AS SOON AS PRACTICABLE, BUT NOT LATER THAN THIRTY DAYS
AFTER THE ANNUAL MEETING OF THE STOCKHOLDERS. THEREAFTER STATED MEETINGS SHALL
BE HELD AT SUCH TIMES AND PLACES AS MAY BE FIXED FROM TIME TO TIME BY THE BOARD;
PROVIDED, HOWEVER, THAT IF IT BE DETERMINED BY THE PRESIDENT, OR, IN HIS
ABSENCE, BY THE VICE PRESIDENT-OPERATIONS & CHIEF OPERATING OFFICER, THAT IT
WOULD BE DESIRABLE TO HOLD ANY SUCH MEETING AT A TIME OR PLACE OTHER THAN THAT
FIXED BY THE BOARD, THE PRESIDENT, OR THE VICE PRESIDENT-OPERATIONS & CHIEF
OPERATING OFFICER, AS THE CASE MAY BE, MAY DESIGNATE ANOTHER TIME OR PLACE FOR
HOLDING THAT MEETING.

Any or all directors may participate in a meeting of the Board or a
committee of the Board by means of conference telephone or any means of
communication by which all persons participating in the meeting are able to hear
each other. A Board or committee meeting may be held entirely or partially by
such means and any director so participating shall be counted as present at the
meeting for all purposes.

A special meeting of the Board of Directors may be called by the President,
or, in his absence, by the Vice President-Operations & Chief Operating Officer,
whenever he shall

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deem it advisable, and he shall call such a meeting whenever
requested, in writing, to do so by two members of the Committee.

If at any meeting of the Board of Directors, the Chairman of the Board, if
there be one, and the President are absent, then the Board shall select from
among the Directors present one of their number to preside at that meeting.

SECTION 2:3 NOTICE OF MEETINGS. UNLESS OTHERWISE REQUIRED BY LAW, A
WRITTEN OR PRINTED NOTICE OF THE TIME AND PLACE OF EVERY STATED MEETING OF THE
BOARD OF DIRECTORS, AND OF THE TIME, PLACE AND PURPOSE OF EVERY SPECIAL MEETING
OF THE BOARD SHALL BE GIVEN, OR CAUSED TO BE GIVEN, BY THE SECRETARY TO EACH
DIRECTOR AT LEAST TWO DAYS BEFORE THE DATE SPECIFIED FOR SUCH MEETING.

SECTION 2:4 QUORUM. AT ANY MEETING OF THE BOARD OF DIRECTORS A MAJORITY
OF THE DIRECTORS THEN IN OFFICE SHALL CONSTITUTE A QUORUM, EXCEPT THAT IN THE
EVENT OF A MAJOR CATASTROPHE OF THE KIND REFERRED TO IN SECTION 2:6 OF THESE BY-
LAWS A QUORUM SHALL CONSIST OF THREE DIRECTORS UNTIL SUCH TIME AS IT SHALL BE
DETERMINED THAT TEN OR MORE DIRECTORS ARE AVAILABLE FOR SERVICE ON THE BOARD.

If less than a quorum be present, a majority of those present shall
nevertheless have power to adjourn such meeting to another date.

SECTION 2:5 POWERS. THE BOARD OF DIRECTORS SHALL MANAGE THE BUSINESS,
AFFAIRS, AND PROPERTY OF THE CORPORATION. ANY DIRECTORSHIP NOT FILLED AT THE
ANNUAL MEETING AND ANY VACANCY, HOWEVER CAUSED, OCCURRING IN THE BOARD OF
DIRECTORS MAY BE FILLED BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE REMAINING
DIRECTORS. THEY SHALL APPOINT AN EXECUTIVE COMMITTEE AND MAY APPOINT SUCH OTHER
COMMITTEES AS THEY MAY FROM TIME TO TIME DEEM NECESSARY OR DESIRABLE. NO
COMMITTEE SHALL CONSIST OF LESS THAN THREE DIRECTORS.

The Board shall elect the officers provided for in Section 5:1 of these By-
Laws and may appoint a General Counsel, one or more than one Assistant
Secretary, one or more than one Assistant Treasurer, and such other officers and
agents as in the judgment of the Board may be necessary. Any officer elected by
the Board and any officer or agent appointed by the Board shall be removable at
the pleasure of the Board, and the Board may fill any vacancy occurring in any
office or position.

SECTION 2:6 EMERGENCY AUTHORITY. THE BOARD OF DIRECTORS BY RESOLUTION
ADOPTED BY A MAJORITY OF THE WHOLE BOARD, MAY MAKE ADVANCE PROVISION FOR THE
CONTINUITY AND AUTHORITY OF THE CORPORATION'S MANAGEMENT IN THE EVENT OF A MAJOR
CATASTROPHE, SUCH AS A NUCLEAR ATTACK, RESULTING IN THE LOSS OR UNAVAILABILITY
OF MEMBERS OF THE BOARD OF DIRECTORS, WHETHER BY DEATH, INCAPACITY, ISOLATION OR
OTHERWISE, OR IN LOSS OR UNAVAILABILITY OF OFFICERS OF THE CORPORATION, AND IN
THE EVENT OF SUCH A MAJOR CATASTROPHE, THE TERMS OF ANY SUCH RESOLUTION SHALL
HAVE THE SAME EFFECT AS IF INCLUDED IN THESE BY-LAWS AND SHALL SUPERSEDE THE
TERMS OF THESE BY-LAWS TO THE EXTENT THAT THEY MAY BE INCONSISTENT THEREWITH.

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ARTICLE III
BOARD OF DIRECTORS COMMITTEES

EXECUTIVE COMMITTEE

SECTION 3:1 MEETINGS AND NOTICES. THE EXECUTIVE COMMITTEE MAY FIX THE
TIME AND PLACE OF HOLDING ITS STATED MEETINGS, AND AFTER SUCH TIME AND PLACE ARE
FIXED, NO NOTICE OF SUCH STATED MEETINGS SHALL BE NECESSARY.

A special meeting of the Executive Committee may be called by the
President, or, in his absence, by the Vice President-Operations & Chief
Operating Officer, whenever he shall deem it advisable, and he shall call such a
meeting whenever requested, in writing, to do so by two members of the
committee.

If at any meeting of the Executive Committee, the Chairman of the Board of
Directors, if there be one, and the President are absent, then the Committee
shall select from among the members present one of their number to preside at
that meeting.

A written or printed notice of the time, place and purpose of every special
meeting of the Committee shall be given, or caused to be given, by the Secretary
to each member at least two days before the date specified for the meeting.

SECTION 3:2 ABSENCES. THE PRESIDENT, OR, IN HIS ABSENCE, THE VICE
PRESIDENT-OPERATIONS & CHIEF OPERATING OFFICER, MAY DESIGNATE FROM TIME TO TIME
A MEMBER OF THE BOARD TO ACT AS A MEMBER OF THE EXECUTIVE COMMITTEE AT ANY
MEETING OR MEETINGS THEREOF IN THE PLACE OF ANY MEMBER OF THE EXECUTIVE
COMMITTEE ABSENT THEREFROM.

SECTION 3:3 QUORUM. AT ANY MEETING OF THE EXECUTIVE COMMITTEE A MAJORITY
OF THE MEMBERS OF THE COMMITTEE SHALL CONSTITUTE A QUORUM.
If less than a quorum be present, a majority of those present shall
nevertheless have power to adjourn such meeting to another date.

SECTION 3:4 POWERS. THE EXECUTIVE COMMITTEE SHALL HAVE AND EXERCISE THE
POWERS OF THE BOARD OF DIRECTORS IN THE MANAGEMENT OF THE BUSINESS, AFFAIRS AND
PROPERTY OF THE CORPORATION DURING THE INTERVALS BETWEEN MEETINGS OF THE BOARD,
EXCEPT THAT THE EXECUTIVE COMMITTEE SHALL NOT HAVE THE POWER OF ELECTION,
APPOINTMENT OR REMOVAL, OR ASSIGNMENT OF ANY POWERS OR DUTIES, WITH RESPECT TO
ANY OFFICE OR POSITION PROVIDED FOR IN SECTION 2:5 OF THESE BY-LAWS.

AUDIT COMMITTEE

SECTION 3:5 NUMBER AND QUALIFICATIONS OF MEMBERS. THE AUDIT COMMITTEE
SHALL CONSIST OF NOT LESS THAN THREE DIRECTORS WHO ARE NOT ACTIVE OR RETIRED
OFFICERS OF THIS COMPANY.
A chairman shall be designated from among its membership who shall preside
at all meetings.

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SECTION 3:6 MEETINGS AND NOTICES. THE AUDIT COMMITTEE MAY FIX THE TIME
AND PLACE OF HOLDING ITS STATED MEETINGS, AND AFTER SUCH TIME AND PLACE ARE
FIXED, NO NOTICE OF SUCH STATED MEETINGS SHALL BE NECESSARY.

A special meeting of the Audit Committee may be called by the Chief
Financial Officer or, in his absence, by the Chairman, whenever he shall deem it
advisable and he shall call such a meeting whenever requested, in writing, to do
so by two members of the Committee.

A written or printed notice of time, place and purpose of every special
meeting of the committee shall be given, or cause to be given, by the Chief
Financial Officer to each member at least two days before the date specified for
the meeting.

SECTION 3:7 ABSENCE. THE CHIEF FINANCIAL OFFICER, OR, IN HIS ABSENCE, THE
CHAIRMAN, MAY DESIGNATE FROM TIME TO TIME A MEMBER OF THE BOARD TO ACT AS A
MEMBER OF THE AUDIT COMMITTEE AT ANY MEETING OR MEETINGS THEREOF IN THE PLACE OF
ANY MEMBER OF THE AUDIT COMMITTEE ABSENT THEREFROM.

SECTION 3:8 QUORUM. AT ANY MEETING OF THE AUDIT COMMITTEE TWO MEMBERS OF
THE COMMITTEE SHALL CONSTITUTE A QUORUM.
If only one member be present, he shall nevertheless have power to adjourn
such meeting to another date.

SECTION 3:9 RESPONSIBILITIES. THE AUDIT COMMITTEE SHALL HAVE THE
RESPONSIBILITY OF RECOMMENDING THE SELECTION OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS TO CONDUCT AN ANNUAL AUDIT OF THE COMPANY'S BOOKS AND RECORDS;
MEETING WITH THE INDEPENDENT PUBLIC ACCOUNTS TO REVIEW THEIR REPORT AND
COMMENTS; MEETING WITH THE CHIEF FINANCIAL OFFICER TO REVIEW THE COMPANY'S
INTERNAL AUDIT PROGRAM AND FINDINGS; AND SUCH OTHER MATTERS RELATING TO THE
INTERNAL AND EXTERNAL AUDITS OF THE COMPANY BOOKS AND RECORDS AND ACCOUNTING
PROCEDURES AS THE COMMITTEE MAY, AT ITS DISCRETION, DEEM TO BE DESIRABLE.

DIVIDEND COMMITTEE

SECTION 3:10 NUMBER OF MEMBERS. THE DIVIDEND COMMITTEE SHALL CONSIST OF
NOT LESS THAN THREE DIRECTORS. A CHAIRMAN SHALL BE DESIGNATED FROM AMONG ITS
MEMBERSHIP WHO SHALL PRESIDE AT ALL MEETINGS.

SECTION 3:11 MEETINGS AND NOTICES. THE DIVIDEND COMMITTEE MAY FIX THE
TIME AND PLACE OF HOLDING ITS STATED MEETINGS, AND AFTER SUCH TIME AND PLACE ARE
FIXED, NO NOTICE OF SUCH DATE AND MEETING SHALL BE NECESSARY.

A special meeting of the Dividend Committee may be called by the President,
or in his absence, by the Vice President-Operations and Chief Operating Officer,
whenever he shall deem it advisable and he shall call such a meeting whenever
requested, in writing, to do so by two members of the Committee.

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A written or printed notice of the time, place and purpose of every special
meeting of the Committee shall be given, or caused to be given, by the Secretary
to each member of the committee at least two days before the date specified for
the meeting.

SECTION 3:12 ABSENCES. THE PRESIDENT, OR, IN HIS ABSENCE, THE VICE
PRESIDENT-OPERATIONS AND CHIEF OPERATING OFFICER, MAY DESIGNATE FROM TIME TO
TIME A MEMBER OF THE BOARD TO ACT AS A MEMBER OF THE DIVIDEND COMMITTEE AT ANY
MEETING OR MEETINGS THEREOF IN THE PLACE OF ANY MEMBER OF THE DIVIDEND COMMITTEE
ABSENT THEREFROM.

SECTION 3:13 QUORUM. AT ANY MEETING OF THE DIVIDEND COMMITTEE, TWO
MEMBERS OF THE COMMITTEE SHALL CONSTITUTE A QUORUM. IF ONLY ONE MEMBER BE
PRESENT, HE SHALL NEVERTHELESS HAVE POWER TO ADJOURN SUCH MEETING TO ANOTHER
DATE.

SECTION 3:14 RESPONSIBILITIES. THE DIVIDEND COMMITTEE, FROM TIME TO TIME,
SHALL BE RESPONSIBLE FOR DECLARING DIVIDENDS TO THE COMPANY'S STOCKHOLDER OR
STOCKHOLDERS OF RECORD, PROVIDED HOWEVER THAT THE COMMITTEE MAY DECLARE A
DIVIDEND ON BEHALF OF THE BOARD ONLY TO THE EXTENT THAT THE BOARD SHALL HAVE
PREVIOUSLY SPECIFIED, BY RESOLUTION, THE MAXIMUM AMOUNT OF SUCH DIVIDEND.

ARTICLE IV
NOTICES AND WAIVERS OF NOTICE

SECTION 4:1 NOTICES. ANY NOTICE REQUIRED TO BE GIVEN TO ANY STOCKHOLDER,
DIRECTOR OR OFFICER UNDER THE PROVISIONS OF THESE BY-LAWS OR OTHERWISE SHALL
(SUBJECT TO THE PROVISIONS OF LAW AND OF THE CERTIFICATE OF INCORPORATION OF THE
CORPORATION) BE DEEMED TO BE SUFFICIENTLY GIVEN IF SUCH NOTICE BE WRITTEN OR
PRINTED AND BE DEPOSITED IN THE POST OFFICE WITH POSTAGE PREPAID ADDRESSED TO
SUCH STOCKHOLDER, DIRECTOR OR OFFICER AT HIS ADDRESS AS THE SAME APPEARS ON THE
BOOKS OR RECORDS OF THE CORPORATION, AND THE MAILING OF SUCH NOTICE SHALL
CONSTITUTE DUE NOTICE.

SECTION 4:2 WAIVERS OF NOTICE. ANY NOTICE REQUIRED TO BE GIVEN UNDER THE
PROVISIONS OF THESE BY-LAWS OR OTHERWISE MAY (SUBJECT TO THE PROVISIONS OF LAW
AND OF THE CERTIFICATE OF INCORPORATION OF THE CORPORATION) BE WAIVED BY THE
STOCKHOLDER, DIRECTOR OR OFFICER TO WHOM SUCH NOTICE IS REQUIRED TO BE GIVEN,
EITHER BEFORE OR AFTER THE MEETING OR ACTION OF WHICH NOTICE IS WAIVED.

ARTICLE V
OFFICERS AND AGENTS

SECTION 5:1 OFFICERS. THERE SHALL BE A PRESIDENT OF THE CORPORATION, WHO
SHALL BE CHOSEN FROM AMONG THE DIRECTORS, SUCH NUMBER OF VICE PRESIDENTS AS THE
BOARD SHALL DETERMINE FROM TIME TO TIME, A SECRETARY AND A TREASURER, EACH OF
WHOM SHALL HOLD OFFICE UNTIL THE FIRST MEETING OF THE BOARD OF DIRECTORS
FOLLOWING THE NEXT ANNUAL MEETING OF THE STOCKHOLDERS, OR ANY ADJOURNMENT
THEREOF AT WHICH DIRECTORS SHALL HAVE BEEN ELECTED, OR UNTIL HIS SUCCESSOR SHALL
HAVE BEEN ELECTED AND SHALL QUALIFY.

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There may be a Chairman of the Board of Directors, who shall be chosen from
the Directors, and who shall serve until the annual meeting of the stockholders
next succeeding his election.

SECTION 5:2 CHAIRMAN OF THE BOARD OF DIRECTORS. THE CHAIRMAN OF THE BOARD
OF DIRECTORS, WHEN PRESENT, SHALL PRESIDE AT MEETINGS OF THE BOARD AND SHALL BE,
EX OFFICIO, A MEMBER OF THE EXECUTIVE COMMITTEE AND CHAIRMAN THEREOF. HE SHALL
HAVE SUCH OTHER POWERS AND DUTIES AS MAY BE ASSIGNED TO HIM FROM TIME TO TIME BY
THE BOARD OF DIRECTORS.

SECTION 5:3 PRESIDENT. THE PRESIDENT SHALL BE THE CHIEF EXECUTIVE OFFICER
OF THE CORPORATION. HE SHALL PERFORM ALL THE DUTIES PERTAINING TO THE OFFICE OF
PRESIDENT OF A CORPORATION AND SUCH OTHER DUTIES AS MAY BE ASSIGNED TO HIM FROM
TIME TO TIME BY THE BOARD OF DIRECTORS. ALL OFFICERS AND AGENTS ELECTED OR
APPOINTED BY THE BOARD OF DIRECTORS, EXCEPT THE CHAIRMAN OF THE BOARD, SHALL
REPORT TO THE PRESIDENT.

The President shall be, ex officio, a member of the Executive Committee,
and if there be no Chairman of the Board of Directors, or, if the Chairman be
absent, the President shall, when present, preside at meetings of the Board of
Directors and at meetings of the Executive Committee.

SECTION 5:4 VICE PRESIDENT OR VICE PRESIDENTS. THE VICE PRESIDENT AND
EACH OF THE VICE PRESIDENTS, IF THERE BE MORE THAN ONE, SHALL HAVE SUCH POWERS
AND PERFORM SUCH DUTIES AS MAY BE ASSIGNED TO HIM FROM TIME TO TIME BY THE BOARD
OF DIRECTORS OR THE PRESIDENT.

SECTION 5:5 SECRETARY AND ASSISTANT SECRETARIES. THE SECRETARY AND EACH
ASSISTANT SECRETARY SHALL BE SWORN TO THE FAITHFUL DISCHARGE OF HIS DUTIES.

The Secretary shall give, or cause to be given, the necessary notices of
all meetings of the stockholders, the Board of Directors and the Executive
Committee. He shall keep and record the proceedings of all meetings of the
stockholders, the Board of Directors and the Executive Committee. He shall keep
and record the proceedings of all meetings of the stockholders, the Board of
Directors and the Executive Committee and shall keep such books and records as
the Board of Directors may direct. He shall have the custody of the corporate
seal and generally shall perform such services and duties as may be assigned to
him from time to time by the Board of Directors or the President.

Each Assistant Secretary shall have all the powers and perform all the
duties of the Secretary in the absence of that officer. He shall perform such
other duties as may be assigned to him from time to time by the Board of
Directors or the Secretary.

SECTION 5:6 TREASURER AND ASSISTANT TREASURERS. THE TREASURER AND EACH
ASSISTANT TREASURER SHALL GIVE BOND FOR THE FAITHFUL DISCHARGE OF HIS DUTIES IN
SUCH SUM AND WITH SUCH SURETIES AS THE BOARD OF DIRECTORS SHALL APPROVE,
PROVIDED THAT WHERE A BLANKET SURETY BOND IS IN EFFECT BONDING SUCH OFFICERS OF
THE CORPORATION, A SPECIAL BOND AS REQUIRED ABOVE NEED NOT BE GIVEN BY THEM.

The Treasurer shall receive and have charge of all funds and securities of
the Corporation; he shall deposit, or cause to be deposited, the funds to the
credit of the Corporation in such depositories as he shall deem appropriate
subject to the approval of the Chief Financial Officer.

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He shall disburse the funds only under such rules and regulations as may be
adopted from time to time by the Board of Directors. He shall keep an account
of all receipts and disbursements, make such reports and perform such other
duties as may be required from time to time by the Board of Directors or the
President.

Each Assistant Treasurer shall have all the powers and perform all the
duties of the treasurer in the absence of that officer. He shall perform such
other duties as may be assigned to him from time to time by the Board of
Directors or the Treasurer.

SECTION 5:7 CHIEF FINANCIAL OFFICER. THE CHIEF FINANCIAL OFFICER SHALL
EXERCISE ACCOUNTING CONTROL OVER ALL RECEIPTS AND DISBURSEMENTS AND OVER THE
FUNDS, SECURITIES AND OTHER SIMILAR PROPERTY OF THE CORPORATION IN THE CUSTODY
OF OFFICERS AND EMPLOYEES. HE SHALL MAINTAIN THE ACCOUNTS OF THE CORPORATION
AND SHALL BE RESPONSIBLE FOR COMPLIANCE BY THE CORPORATION WITH THE ACCOUNTING
REGULATIONS PROMULGATED BY PUBLIC REGULATORY AUTHORITIES. HE SHALL PERFORM SUCH
OTHER DUTIES AS THE BOARD OF DIRECTORS OR THE PRESIDENT MAY ASSIGN TO HIM FROM
TIME TO TIME.

SECTION 5:8 OTHER OFFICERS AND AGENTS. ANY OTHER OFFICER OR AGENT
APPOINTED PURSUANT TO SECTION 2:5 OF THESE BY-LAWS SHALL HAVE SUCH POWERS AND
PERFORM SUCH DUTIES AS THE BOARD OF DIRECTORS OR THE PRESIDENT MAY ASSIGN TO HIM
FROM TIME TO TIME.

ARTICLE VI
INDEMNIFICATION AND LIMITATION OF LIABILITY

SECTION 6:1 ACTIONS AGAINST DIRECTORS, TRUSTEES OR OFFICERS. ANY PRESENT
OR FUTURE DIRECTOR, TRUSTEE OR OFFICER OF THIS COMPANY OR THE LEGAL
REPRESENTATIVE OF ANY SUCH DIRECTOR, TRUSTEE OR OFFICER, SHALL BE INDEMNIFIED BY
THIS COMPANY AGAINST REASONABLE COSTS, EXPENSES (EXCLUSIVE OF ANY AMOUNT PAID TO
THE CORPORATION IN SETTLEMENT) AND COUNSEL FEES PAID OR INCURRED IN CONNECTION
WITH ANY ACTION, SUIT OR PROCEEDING TO WHICH ANY SUCH DIRECTOR, TRUSTEE OR
OFFICER OR HIS LEGAL REPRESENTATIVE MAY BE MADE A PARTY BY REASON OF HIS BEING
OR HAVING BEEN SUCH DIRECTOR, TRUSTEE OR OFFICER; PROVIDED (1) THAT SUCH ACTION,
SUIT OR PROCEEDING SHALL BE PROSECUTED AGAINST SUCH DIRECTOR, TRUSTEE OR
OFFICER, OR AGAINST HIS LEGAL REPRESENTATIVE TO FINAL DETERMINATION, AND IT
SHALL NOT BE FINALLY ADJUDGED IN SAID ACTION, SUIT OR PROCEEDING THAT HE HAD
BEEN DERELICT IN THE PERFORMANCE OF HIS DUTIES AS SUCH DIRECTOR, TRUSTEE OR
OFFICER; OR (2) SAID ACTION, SUIT OR PROCEEDING SHALL BE SETTLED OR OTHERWISE
TERMINATED AS AGAINST SUCH DIRECTOR, TRUSTEE OR OFFICER OR HIS LEGAL
REPRESENTATIVE WITHOUT A FINAL DETERMINATION ON THE MERITS, AND IT SHALL BE
DETERMINED BY THE BOARD OF DIRECTORS OF THIS COMPANY THAT SAID DIRECTOR, TRUSTEE
OR OFFICER HAD NOT BEEN DERELICT IN ANY SUBSTANTIAL WAY IN THE PERFORMANCE OF
HIS DUTIES AS SUCH DIRECTOR, TRUSTEE OR OFFICER AS CHARGED IN SAID ACTION, SUIT
OR PROCEEDING.

This Article shall not constitute a restriction or limitation upon the
power of this Company to take any other action with respect to the
indemnification or reimbursement of directors, trustees, officers or employees.

Pursuant to further action by the stockholder on March 24, 1988, the
following Amendment to the Certificate of Incorporation was approved:

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To the fullest extent that the New Jersey Business
Corporation Act, as it exists on the date hereof or as it
may hereafter be amended, permits the limitation or
elimination of the liability of directors and officers, no
director or officer of this Corporation shall be liable to
this Corporation or its stockholders for damages for
breach of duty as a director or officer. No amendment
or repeal of this Article shall apply to or have any effect
on the liability or alleged liability of any director or
officer of this Corporation for or with respect to any
acts or omissions of such director or officer occurring
prior to such amendment or repeal.

ARTICLE VII
STOCK

SECTION 7:1 STOCK CERTIFICATES. STOCK CERTIFICATES, SIGNED IN THE MANNER
PRESCRIBED BY LAW, SHALL BE ISSUED TO EACH STOCKHOLDER, CERTIFYING THE NUMBER OF
SHARES OF STOCK TO WHICH HE IS ENTITLED, AND SAID CERTIFICATES AND THE SHARES
REPRESENTED THEREBY SHALL BE TRANSFERABLE ONLY UPON THE BOOKS OF THE CORPORATION
BY THE STOCKHOLDER NAMED IN THE CERTIFICATE OR HIS DULY AUTHORIZED ATTORNEY OR
REPRESENTATIVE.

No new stock certificate shall be issued until the old certificate
representing the same shares of stock has been surrendered and cancelled;
provided, however, that in case of a lost stock certificate, another certificate
in lieu thereof may be issued upon such conditions as the Board of Directors may
prescribe.

ARTICLE VIII
TRANSFER BOOKS

SECTION 8:1 CLOSING TRANSFER BOOKS. THE BOARD OF DIRECTORS SHALL HAVE THE
POWER TO CLOSE THE STOCK TRANSFER BOOKS OF THE CORPORATION FOR A PERIOD NOT
EXCEEDING FIFTY DAYS PRECEDING THE DATE OF ANY MEETING OF STOCKHOLDERS OR THE
DATE FOR PAYMENT OF ANY DIVIDEND, OR THE DATE FOR THE ALLOTMENT OF RIGHTS, OR
THE DATE WHEN ANY CHANGE OR CONVERSION OR EXCHANGE OF CAPITAL STOCK SHALL GO
INTO EFFECT; PROVIDED, FURTHER, THAT IN LIEU OF SO CLOSING THE STOCK TRANSFER
BOOKS AS AFORESAID, THE BOARD OF DIRECTORS MAY FIX, IN ADVANCE, A DATE, NOT
EXCEEDING FIFTY DAYS PRECEDING THE DATE OF ANY MEETING OF STOCKHOLDERS, OR THE
DATE FOR THE PAYMENT OF ANY DIVIDEND, OR THE DATE FOR THE ALLOTMENT OF RIGHTS,
OR THE DATE WHEN ANY CHANGE OR CONVERSION OR EXCHANGE OF CAPITAL STOCK SHALL GO
INTO EFFECT, AS A RECORD DATE FOR THE DETERMINATION OF THE STOCKHOLDERS ENTITLED
TO NOTICE OF, AND TO VOTE AT, ANY SUCH MEETING OR ENTITLED TO RECEIVE PAYMENT OF
ANY SUCH DIVIDEND, OR TO ANY SUCH ALLOTMENT OF RIGHTS, OR TO EXERCISE THE RIGHTS
IN RESPECT TO ANY SUCH CHANGE,

conversion or exchange of capital stock, and in such case only stockholders of
record on the date so fixed shall be entitled to such notice of, and to vote at
such meeting, or to receive

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payment of such dividend, or allotment of rights or exercise of such rights, as
the case may be, and stockholders of record on such date shall be exclusively so
entitled, notwithstanding any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid.

ARTICLE IX
SEAL

SECTION 9:1 FORM. THE SEAL OF THE CORPORATION SHALL BE CIRCULAR IN FORM
AND SHALL HAVE THE NAME OF THE CORPORATION, "NEW JERSEY BELL TELEPHONE COMPANY",
ON THE CIRCUMFERENCE AND THE WORD "SEAL" IN THE CENTER.

ARTICLE X
CHANGES IN BY-LAWS

SECTION 10:1 AMENDMENTS, ETC. THESE BY-LAWS MAY BE ALTERED, AMENDED OR
REPEALED AT ANY MEETING OF THE BOARD OF DIRECTORS BY A MAJORITY VOTE OF THE
NUMBER OF DIRECTORS FIXED PURSUANT TO SECTION 2:1 OF THESE BY-LAWS, OR AT ANY
MEETING OF THE STOCKHOLDERS BY THE VOTE OF THE HOLDERS OF RECORD OF A MAJORITY
IN INTEREST OF THE ISSUED AND OUTSTANDING STOCK, WHO ARE PRESENT IN PERSON OR
REPRESENTED BY PROXY AT THE MEETING; PROVIDED THAT IN THE CALL FOR ANY SUCH
MEETING NOTICE SHALL HAVE BEEN GIVEN OF THE PROPOSED ACTION TO ALTER, AMEND OR
REPEAL THE BY-LAWS.

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RESOLUTION TO AMEND BY-LAWS

WHEREAS, Article II, Section 2:1 of the Company's By-Laws states that the
Board of Directors shall consist of not less than ten or more than fifteen
members; and
WHEREAS, this Company has determined that the By-Laws should be amended to
reduce that number.
On motion, duly seconded, it was-

RESOLVED, that Section 2:1 of the Company's By-Laws be amended and restated
as follows:

SECTION 2:1 Number and Qualifications of Directors. The Board of
Directors shall consist of not less than three or more than ten members, as may
be determined from time to time by the Board. A majority of the Directors shall
be citizens of the State of New Jersey. Each director shall continue in office
for one year, and until his successor shall be elected and qualified.

Resolution adopted by the Bell Atlantic-New Jersey, Inc., Board of Directors at
a stated meeting held on January 26, 1995.

<PAGE>

Exhibit 23

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statement of
Bell Atlantic - New Jersey, Inc. on Form S-3 (File No. 33-49851) of our report
dated February 6, 1995, which includes an explanatory paragraph stating that the
Company discontinued accounting for its operations in accordance with Statement
of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain
Types of Regulation," effective August 1, 1994, and changed its method of
accounting for income taxes and postemployment benefits in 1993, on our audit of
the financial statements and financial statement schedule of the Company as of
December 31, 1994 and December 31, 1993, and for each of the three years in the
period ended December 31, 1994, which report is included in this Annual Report
on Form 10-K.

/s/ COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
March 29, 1995

<PAGE>
Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, BELL ATLANTIC - NEW JERSEY, INC., a New Jersey corporation
(hereinafter referred to as the "Company"), proposes to file shortly with the
Securities and Exchange Commission, under the provisions of the Securities
Exchange Act of 1934, as amended, an Annual Report on Form 10-K; and

WHEREAS, the undersigned is an officer and a director of the Company as
indicated below under his name;

NOW, THEREFORE, the undersigned hereby constitutes and appoints MICHAEL J.
LOSCH as attorney for him and in his name, place and stead, and in each of his
offices and capacities as an officer and a director of the Company, to execute
and file such Annual Report, and thereafter to execute and file any amendment or
amendments thereto on Form 8, hereby giving and granting to said attorney full
power and authority to do and perform all and every act and thing whatsoever
requisite and necessary to be done in and about the premises as fully, to all
intents and purposes, as the undersigned might or could do if personally present
at the doing thereof, hereby ratifying and confirming all that said attorney may
or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th
day of March, 1995.

[SIGNATURE OF ALFRED C. KOEPPE
APPEARS HERE]
______________________________
Alfred C. Koeppe
President and Director

STATE OF NEW JERSEY )
:
COUNTY OF ESSEX )

On the day of March, 1995, personally appeared before me
ALFRED C. KOEPPE, to me known to be the person described in and who executed the
foregoing instrument and who duly acknowledged that he executed and delivered
the same for the purposes therein expressed.

________________________
Notary Public
<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the undersigned is an officer and a director of the Company as
indicated below under her name;

NOW, THEREFORE, the undersigned hereby constitutes and appoints ALFRED C.
KOEPPE and MICHAEL J. LOSCH, and each of them, as attorneys for her and in her
name, place and stead, and in each of her offices and capacities as an officer
and a director of the Company, to execute and file such Annual Report, and
thereafter to execute and file any amendment or amendments thereto on Form 8,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully, to all intents and purposes, as the
undersigned might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 28th
day of March, 1995.

[SIGNATURE OF LESLIE A. VIAL
APPEARS HERE]
_____________________________
Leslie A. Vial
Vice President-General Counsel
and Secretary and Director

STATE OF NEW JERSEY )
:
COUNTY OF ESSEX )

On the 28th day of March, 1995, personally appeared before me LESLIE A.
VIAL, to me known to be the person described in and who executed the foregoing
instrument and who duly acknowledged that she executed and delivered the same
for the purposes therein expressed.

________________________
Notary Public
<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the undersigned is a director of the Company;

NOW, THEREFORE, the undersigned hereby constitutes and appoints ALFRED C.
KOEPPE and MICHAEL J. LOSCH, and each of them, as attorneys for the undersigned
and in the undersigned's name, place and stead as a director of the Company, to
execute and file such Annual Report, and thereafter to execute and file any
amendment or amendments thereto on Form 8, hereby giving and granting to said
attorneys full power and authority to do and perform all and every act and thing
whatsoever requisite and necessary to be done in and about the premises as
fully, to all intents and purposes, as the undersigned might or could do if
personally present at the doing thereof, hereby ratifying and confirming all
that said attorneys may or shall lawfully do, or cause to be done, by virtue
hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th
day of March, 1995.

[SIGNATURE OF BRUCE S. GORDON
APPEARS HERE]
____________________________
Bruce S. Gordon

STATE OF )
:
COUNTY OF )

On the date set forth above, personally appeared before me to me known to
be the person described in and who executed the foregoing instrument and such
person duly acknowledged that such person executed and delivered the same for
the purposes therein expressed.

________________________
<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the undersigned is a director of the Company;

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th
day of March, 1995.

[SIGNATURE OF ROBERT E. CAMPBELL
APPEARS HERE]
________________________________
Robert E. Campbell

STATE OF )
:
COUNTY OF )

________________________
<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the undersigned is a director of the Company;

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th
day of March, 1995.

[SIGNATURE OF JON F. HANSON
APPEARS HERE]
___________________________
Jon F. Hanson

STATE OF )
:
COUNTY OF )

________________________
<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the undersigned is a director of the Company;

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th
day of March, 1995.

[SIGNATURE OF ELLEN R. LEVINE
APPEARS HERE]
_____________________________
Ellen R. Levine

STATE OF )
:
COUNTY OF )

________________________
<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the undersigned is a director of the Company;

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th
day of March, 1995.

[SIGNATURE OF JAMES M. SEABROOK
APPEARS HERE]
_______________________________
James M. Seabrook

STATE OF )
:
COUNTY OF )

________________________
<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the undersigned is a director of the Company;

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th
day of March, 1995.

[SIGNATURE OF ANTHONY P. TERRACCIANO
APPEARS HERE]
____________________________________
Anthony P. Terracciano

STATE OF )
:
COUNTY OF )

________________________

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1994 AND THE BALANCE
SHEET AS OF DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 629
<ALLOWANCES> 51
<INVENTORY> 10
<CURRENT-ASSETS> 857
<PP&E> 8,697
<DEPRECIATION> 4,556
<TOTAL-ASSETS> 5,053
<CURRENT-LIABILITIES> 1,028
<BONDS> 1,301
<COMMON> 1,381
0
0
<OTHER-SE> 175
<TOTAL-LIABILITY-AND-EQUITY> 5,053
<SALES> 0
<TOTAL-REVENUES> 3,384
<CGS> 0
<TOTAL-COSTS> 2,610
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 100
<INCOME-PRETAX> 676
<INCOME-TAX> 220
<INCOME-CONTINUING> 456
<DISCONTINUED> 0
<EXTRAORDINARY> (596)
<CHANGES> 0
<NET-INCOME> (141)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>