Form 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark one)
- - -
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
- - - OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
- - -
X 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 1-3435
NEW YORK TELEPHONE COMPANY
Incorporated under the laws of the State of New York
I.R.S. Employer Identification Number 13-5275510
1095 Avenue of the Americas, New York, New York 10036
Telephone Number (212) 395-2121
THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF NYNEX CORPORATION, MEETS THE
CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS
THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO
GENERAL INSTRUCTION H(2).
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes __X__. No ____.
AMENDMENT NO. 1
The registrant hereby amends the following items of its Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 1994, as set forth in the
pages attached hereto:
Part I - Item 1 "Financial Statements"
Part I - Item 2 "Management's Discussion and Analysis of Results of
Operations"
<PAGE>
Form 10-Q/A Part I New York Telephone Company
PART I - FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(In Millions) (Unaudited)
<TABLE>
<CAPTION>
For The Three Months Ended
March 31,
1994 1993
<S> <C> <C>
OPERATING REVENUES
Local service. . . . . . . . . . . . . . . . . $1,168.2 $1,147.7
Long distance. . . . . . . . . . . . . . . . . 88.3 93.5
Network access . . . . . . . . . . . . . . . . 567.6 558.1
Other. . . . . . . . . . . . . . . . . . . . . 95.4 146.6
----- ------
Total operating revenues. . . . . . . . . . 1,919.5 1,945.9
-------- --------
OPERATING EXPENSES
Maintenance and support. . . . . . . . . . . . 628.0 556.3
Depreciation and amortization. . . . . . . . . 367.2 358.1
Marketing and customer services. . . . . . . . 249.7 230.5
Taxes other than income taxes. . . . . . . . . 200.0 219.2
Provision for uncollectibles . . . . . . . . . 21.2 15.0
Other. . . . . . . . . . . . . . . . . . . . . 147.6 211.6
------ ------
Total operating expenses. . . . . . . . . . 1,613.7 1,590.7
-------- --------
Operating income . . . . . . . . . . . . . . . . 305.8 355.2
Other income - net . . . . . . . . . . . . . . . 3.3 19.7
Interest expense . . . . . . . . . . . . . . . . 74.7 88.6
----- -----
Earnings before Income taxes and
cumulative effect of change in
accounting principle. . . . . . . . . . . . . 234.4 286.3
Income taxes . . . . . . . . . . . . . . . . . . 72.2 81.0
----- -----
Earnings before cumulative effect of change
in accounting principle . . . . . . . . . . . 162.2 205.3
Cumulative effect of change in accounting
for postemployment benefits, net of
taxes . . . . . . . . . . . . . . . . . . . . - (90.8)*
---- ------
NET INCOME . . . . . . . . . . . . . . . . . . . $ 162.2 $ 114.5 *
======= =======
Retained Earnings
Beginning of period. . . . . . . . . . . . . . . $1,082.0 $1,813.6
Net income. . . . . . . . . . . . . . . . . 162.2 114.5 *
Dividends . . . . . . . . . . . . . . . . . (181.3) (181.0)
------- -------
End of period. . . . . . . . . . . . . . . . . . $1,062.9 $1,747.1 *
======== ========
</TABLE>
* Restated to reflect the adoption of Statement of Financial Accounting
Standards No. 112 in the fourth quarter of 1993 retroactive to January 1,
1993.
See accompanying notes to consolidated financial statements.
<PAGE>
Form 10-Q/A Part I New York Telephone Company
CONSOLIDATED BALANCE SHEETS
(In Millions)
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and temporary cash investments. . . . . $ 32.5 7.5
Receivables (net of allowance of $131.8
and $134.8, respectively). . . . . . . . . 1,368.3 1,427.5
Deferred charges . . . . . . . . . . . . . . 85.0 55.5
Deferred income taxes. . . . . . . . . . . . 32.2 99.4
Inventory. . . . . . . . . . . . . . . . . . 69.0 72.4
Prepaid expenses and other . . . . . . . . . 141.5 102.9
------ ------
Total current assets . . . . . . . . . . . 1,728.5 1,765.2
-------- ---------
Telephone plant - at cost. . . . . . . . . . . 19,889.2 19,696.5
Less: accumulated depreciation. . . . . . . 7,847.5 7,580.5
12,041.7 12,116.0
Deferred charges and other . . . . . . . . . . 1,549.7 1,554.2
-------- ---------
Total Assets . . . . . . . . . . . . . . . . $15,319.9 $15,435.4
========= =========
LIABILITIES AND SHARE OWNER'S EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . $ 1,606.9 $ 1,744.7
Short-term debt. . . . . . . . . . . . . . . 254.1 255.7
Dividends payable. . . . . . . . . . . . . . 181.2 181.0
Taxes accrued. . . . . . . . . . . . . . . . 166.6 48.3
Advance billing and customers' deposits. . . 185.3 187.2
Interest accrued . . . . . . . . . . . . . . 64.0 58.2
----- -----
Total current liabilities. . . . . . . . . 2,458.1 2,475.1
-------- ---------
Long-term debt . . . . . . . . . . . . . . . . 3,976.2 3,972.1
Deferred income taxes. . . . . . . . . . . . . 1,719.7 1,826.9
Unamortized investment tax credits . . . . . . 236.9 244.9
Other long-term liabilities and deferred
credits. . . . . . . . . . . . . . . . . . . 1,762.9 1,731.2
-------- --------
Total liabilities. . . . . . . . . . . . . 10,153.8 10,250.2
--------- ---------
Commitments and contingencies (Notes (d)
and (e))
Share owner's equity:
Common stock - one share, without par value. 4,103.2 4,103.2
Retained earnings. . . . . . . . . . . . . . 1,062.9 1,082.0
Total share owner's equity . . . . . . . . 5,166.1 5,185.2
-------- ---------
Total Liabilities and Share Owner's Equity . $15,319.9 $15,435.4
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Form 10-Q/A Part I New York Telephone Company
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions) (Unaudited)
<TABLE>
<CAPTION>
For The Three Months Ended
March 31,
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income. . . . . . . . . . . . . . . . . . $ 162.2 $ 114.5 *
------- -------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization . . . . . . . . 367.2 358.1
Allowance for funds used during
construction - equity component . . . . . . (4.7) (5.9)
Change in operating assets and liabilities:
Receivables . . . . . . . . . . . . . . . . 59.2 43.7
Current Deferred charges, Inventory and
Prepaid expenses and other. . . . . . . . 2.5 (164.1)
Accounts payable, Taxes Accrued, Deferred
income taxes, Advance billing and
customers' deposits and Interest accrued. (15.6) (75.9)*
Deferred income taxes and Unamortized
investment tax credits. . . . . . . . . . . (115.2) 64.4 *
Other long-term liabilities and
deferred credits. . . . . . . . . . . . . . 31.7 81.5 *
Other - net . . . . . . . . . . . . . . . . . (16.5) 13.9
------ -----
Total adjustments . . . . . . . . . . . . . . 308.6 315.7
------ ------
Net cash provided by operating
activities. . . . . . . . . . . . . . . . . 470.8 430.2
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures. . . . . . . . . . . . (266.7) (238.2)
Advances from NYNEX . . . . . . . . . . . . - (198.2)
------ -------
Net cash used in investing activities . . . (266.7) (436.4)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from NYNEX . . . . . . . . . . . . (590.2) (113.2)
Dividends paid to NYNEX . . . . . . . . . . (181.0) (174.9)
Issuance of long-term debt. . . . . . . . . 593.5 295.9
Repayment of long-term debt and
capital leases. . . . . . . . . . . . . . (1.4) (1.3)
----- -----
Net cash (used) provided by financing
activities. . . . . . . . . . . . . . . . . (179.1) 6.5
------- ----
Net increase in Cash and
temporary cash investments. . . . . . . . . 25.0 .3
Cash and temporary cash investments at
beginning of period . . . . . . . . . . . . 7.5 24.7
------- ------
Cash and temporary cash investments at
end of period . . . . . . . . . . . . . . . $ 32.5 $ 25.0
====== ======
</TABLE>
* Restated to reflect the adoption of Statement of Financial Accounting
Standards No. 112 in the fourth quarter of 1993 retroactive to
January 1, 1993.
See accompanying notes to consolidated financial statements.
<PAGE>
Form 10-Q/A Part I New York Telephone Company
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(a) BASIS OF PRESENTATION - The consolidated financial statements have been
prepared by New York Telephone Company (the "Company"), a wholly owned
subsidiary of NYNEX Corporation ("NYNEX"), pursuant to the rules and regulations
of the Securities and Exchange Commission (the "SEC") and, in the opinion of
management, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the financial information for
each period shown. Certain information and footnote disclosures normally
included in consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to such SEC rules and regulations. Management believes that the disclosures made
are adequate to make the information presented not misleading. Certain
information in the consolidated financial statements for 1993 has been
reclassified to conform to the current year's presentation. The results for
interim periods are not necessarily indicative of the results for the full year.
These consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
1993 Annual Report on Form 10-K/A, Amendment No. 1.
(b) CASH AND TEMPORARY CASH INVESTMENTS - The Company's cash management policy
is to make funds available in banks when checks are presented. At March 31,
1994, the Company had recorded in Accounts payable checks outstanding but not
yet presented for payment of $74.4 million.
(c) SUPPLEMENTAL INFORMATION - The following information is provided in
accordance with Statement of Financial Accounting Standards No. 95, "Statement
of Cash Flows":
For the Three Months Ended
March 31,
1994 1993
(in millions)
Income tax (refunds) payments ................ $(40.4) $99.7
Interest payments ............................ $ 62.8 $55.0
(d) REVENUES SUBJECT TO POSSIBLE REFUND - Several state and federal regulatory
matters may possibly require the refund of a portion of the revenues collected
in the current and prior periods, including affiliate transactions issues in the
Company's 1990 intrastate rate case and overearnings complaints by interstate
access customers. As of March 31, 1994, the aggregate amount of such revenues
that was estimated to be subject to possible refund was approximately $175
million, plus related interest. The outcome of each pending matter, as well as
the time frame within which each will be resolved, is not presently
determinable.
<PAGE>
Form 10-Q/A Part I New York Telephone Company
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(e) LITIGATION AND OTHER CONTINGENCIES - It is probable that local tax claims
aggregating approximately $200 million in tax and $105 million in associated
interest will be asserted against the Company for the period 1984 through the
first quarter of 1994. The claims relate to the taxability of the Company's
interstate and intrastate network access revenues. The current status is that
these matters have been identified as possible audit adjustments by the taxing
authority, and the Company is presenting its arguments against those
adjustments. While the Company's counsel cannot give assurance as to the
outcome, counsel believes that the Company has strong legal positions in these
matters.
Various other legal actions and regulatory proceedings are pending that may
affect the Company, including matters involving Racketeer Influenced and Corrupt
Organizations Act, antitrust, tort, contract and tax deficiency claims. While
counsel cannot give assurance as to the outcome of any of these matters, in the
opinion of Management based on the advice of counsel, the ultimate resolution of
these matters in future periods is not expected to have a material effect on the
Company's financial position or annual operating results but could have a
material effect on quarterly operating results.
<PAGE>
Form 10-Q/A Part I New York Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
The following Management's Narrative Analysis of Results of Operations is
provided pursuant to General Instruction H(2) to Form 10-Q.
STATE REGULATORY MATTERS
As previously reported (see the Company's Annual Report on Form 10-K for the
year ended December 31, 1993), in the first phase of the incentive regulation
proceeding, the New York State Public Service Commission ("NYSPSC") issued
Orders on December 24, 1993 and January 28, 1994 for a reduction in the
Company's rates of $170 million annually, effective January 1, 1994, and
required that an additional $153.3 million of current revenues be made available
"for the ultimate benefit of customers and the Company's competitive position
through earnings incentives for short-term service improvements and a longer
term plan for performance-based earning incentives and network improvements."
That incentive regulatory plan will be pursued in a second phase of the
proceeding during 1994. The Company has set aside $31 million of the $153.3
million as ordered by the NYSPSC, as an incentive to improve overall service
quality in the Brooklyn-Queens-Bronx service area.
BUSINESS RESTRUCTURING
As previously reported (see the Company's Annual Report on Form 10-K for the
year ended December 31, 1993), the Company recorded pretax charges of
approximately $992 million in the fourth quarter of 1993 for business
restructuring, of which approximately $287 million was for employee severance
payments and approximately $270 million was for postretirement medical costs
recognized as a result of the planned decrease in the work force. In February
1994, the Board of Directors of NYNEX Corporation approved a pension enhancement
for eligible management employees who retire through December 31, 1996. This
enhancement will be offered at different times through 1996 according to local
force requirements. The Company has reached a tentative agreement with the
Communications Workers of America and with the International Brotherhood of
Electrical Workers ("IBEW") in New York which, subject to ratification, would
extend the existing labor agreements to August 1998 and would provide a
retirement incentive. The management and nonmanagement retirement incentives are
intended to provide a voluntary means to implement a portion of the planned work
force reductions of approximately 9,000 employees by the end of 1996.
The reserves established for severance will be transferred to the pension
liability on a per employee basis as a result of employees' leaving under the
pension enhancements as opposed to severance provisions, and the incremental
cost of the pension enhancements will be charged to expense as employees leave.
The retirement incentives credit employees with an additional six years toward
both their age and their length of service for the purpose of determining
pension eligibility and benefits. Postretirement medical costs will be increased
on a per employee basis, because these incentives resulted in more individuals
qualifying
<PAGE>
Form 10-Q/A Part I New York Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
BUSINESS RESTRUCTURING (Continued)
for lifetime medical coverage than under the severance plan, and will be charged
to expense as employees leave. Under the assumption that nonmanagement employees
will leave under the retirement incentive, the expected utilization of
nonmanagement severance reserves and the application of the postretirement
medical liability per year have been revised from the expected utilization as
previously reported (see the Company's Annual Report on Form 10-K/A, Amendment
No. 1, for the year ended December 31, 1993) as follows:
(In Millions)
Severance 1994 1995 1996 Total
--------- ---- ---- ---- -----
Management $17 $ 61 $ 56 $134
Nonmanagement 19 54 80 153
--- -- -- ---
Total $36 $115 $136 $287
=== ==== ==== ====
Medical 1994 1995 1996 Total
------- ---- ---- ---- -----
Management $ 7 $ 24 $ 22 $ 53
Nonmanagement 32 77 108 217
--- -- --- ---
Total $39 $101 $130 $270
=== ==== ==== ====
The restructuring reserve balance at March 31, 1994, which does not include the
liability recorded at year-end for postretirement medical benefits associated
with employees leaving the Company under the business restructuring, was
approximately $713 million. The Company reduced 1993 restructuring reserves by
$9 million in the following categories:
Severance $-
Relocation -
Training -
Systems redesign:
Customer contact $-
Customer provisioning -
Customer operations -
Customer support -
-
--
Total systems redesign -
Work center consolidation -
Branding 7
Re-engineering implementation -
-
--
Subtotal 7
Telesector Resources Group
("TRG") allocated reserves:
Severance -
Postretirement medical benefits -
Systems re-engineering -
Re-engineering implementation 2
Work center consolidation -
-
--
Total allocated 2
--
Total $9
==
<PAGE>
Form 10-Q/A Part I New York Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
BUSINESS RESTRUCTURING (Continued)
There were no significant cost savings as a result of business restructuring in
the first quarter of 1994; it is anticipated that force reductions and
re-engineering initiatives will begin in the second quarter of 1994 upon
ratification of the tentative labor agreements and as retirement incentives are
offered to eligible employees.
FIRST THREE MONTHS OF 1994 AS COMPARED TO FIRST THREE MONTHS OF 1993
OPERATING REVENUES
Operating revenues for the three months ended March 31, 1994 decreased $26.4
million, or 1.4%, from the same period last year. This decrease in total
operating revenues is comprised of the following:
Increase (Decrease)
(Dollars in Millions)
Local service. . . . . . . . . . $ 20.5
Long distance. . . . . . . . . . (5.2)
Network access . . . . . . . . . 9.5
Other. . . . . . . . . . . . . . (51.2)
-----
$(26.4)
Local service revenues are earned from the provision of local exchange, local
private line and local public network services. The increase in Local service
revenues was primarily due to a net $49 million increase attributable to
increased demand as evidenced by growth in access lines, growth in sales of
calling features such as call waiting, remote call forwarding and touch-tone
services, and higher usage associated with the severe winter storms. In
addition, there was a $5 million increase due to a 1993 reduction in revenues
associated with the reversal of a 1990 deferral of private line revenues. These
increases were partially offset by a $33 million revenue reduction pursuant to
an NYSPSC order (see STATE REGULATORY MATTERS above).
Long distance revenues are earned from the provision of services beyond the
local service area, but within the local access and transport area ("LATA"), and
include public and private network switching. The decrease in Long distance
revenues was primarily attributable to a $3 million revenue reduction pursuant
to an NYSPSC order (see STATE REGULATORY MATTERS above) and a decrease in demand
for private line and wide area telecommunications services as a result of
increased competition and customer shifts to lower priced services offered by
the Company.
Network access revenues are earned from the provision of exchange access
services primarily to interexchange carriers. Switched access revenues are
charges to telecommunication carriers for access to the Company's local exchange
facilities. Switched access revenues increased a net $16 million principally due
to increased usage, partially offset by a reduction in interstate rates which
included the
<PAGE>
Form 10-Q/A Part I New York Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
FIRST THREE MONTHS OF 1994 AS COMPARED TO FIRST THREE MONTHS OF 1993 (Continued)
phase-out of the equal access cost recovery charge and a $3 million revenue
reduction pursuant to an NYSPSC order (see STATE REGULATORY MATTERS above).
Special access revenues are charges for dedicated lines that connect terminal
locations of interexchange carriers and end users. Special access revenues
decreased $7 million primarily due to a reduction in interstate rates, increased
competition and customer shifts to lower priced Company services.
Other revenues are earned from the provision of products and services other than
Local service, Long distance and Network access. The decrease in Other revenues
was due principally to a $38 million reduction in revenues representing the
first quarter deferral of the $153.3 million to be set aside as ordered by the
NYSPSC (see STATE REGULATORY MATTERS above) and a $24 million decrease in
revenues attributable to the 1993 reversal of previously recorded reductions in
revenues in connection with the phase-out of ad valorem taxes on central office
equipment. Partially offsetting these decreases was a $10 million increase due
to the 1993 reversal of a 1992 deferral of revenues for concession service.
OPERATING EXPENSES
Operating expenses for the three months ended March 31, 1994 increased $23.0
million, or 1.5%, over the same period last year. This increase in total
operating expenses is comprised of the following:
Increase (Decrease)
(Dollars in Millions)
Depreciation and amortization . $ 9.1
Taxes other than income taxes . (19.2)
All other:
Employee related . . . . . . 24.2
Other. . . . . . . . . . . . 8.9
-----
$23.0
=====
Depreciation and amortization increased principally due to an increase in plant
investment.
Taxes other than income taxes decreased from the same period last year
principally due to a $23 million decrease in property taxes resulting primarily
from lower assessments of property value.
Employee related costs consist primarily of wages, payroll taxes, and employee
benefits. Wages and payroll taxes increased $16 million principally due to
increases in salary and wage rates and additional labor costs due to initiatives
to improve service quality, partially offset by decreases resulting from
reductions in the Company's work force due to the transfer of employees to
Telesector Resources Group, Inc. ("TRG") associated with re-engineering the way
service is delivered to customers, including operating the Company and New
England
<PAGE>
Form 10-Q/A Part I New York Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
FIRST THREE MONTHS OF 1994 AS COMPARED TO FIRST THREE MONTHS OF 1993 (Continued)
Telephone and Telegraph Company ("New England Telephone") as a single enterprise
under the "NYNEX" brand (see Other operating expenses below). Benefit expenses
increased $8 million primarily due to higher costs of providing medical coverage
for active and retired employees.
Other operating expenses consist primarily of contracted and centralized
services, rent and other general and administrative costs. The increase in other
operating expenses was due principally to a $20 million net increase in charges
from affiliated companies primarily attributable to the transfer of employees
from the Company to TRG (see Employee related costs above), a $7 million
increase in bad debt expense recognized pursuant to provisions of the billing
and collection contract with AT&T, and a $6 million increase in the Provision
for uncollectibles. Partially offsetting these increases were a $9 million
decrease attributable to the reversal in 1993 of deferred inside wire expense
recorded in 1991 and 1992, a $7 million decrease due to the completion of equal
access amortization in 1993, and a $5 million decrease in expenses relating to
intra-LATA toll calling in upstate New York.
OTHER INCOME - NET
Other income - net for the three months ended March 31, 1994 decreased $16.4
million from the same period last year. This decrease was primarily attributable
to the termination in 1994 of payments from New England Telephone pursuant to
the transition plan to phase in the earnings impact of the unified tariff access
rate structure. This decrease was partially offset by an increase due to higher
expenses in the first three months of 1993 for the interstate portion of call
premiums and other charges associated with the refinancing of long-term debt.
INTEREST EXPENSE
Interest expense for the three months ended March 31, 1994 decreased $13.9
million from the same period last year. This decrease was due primarily to lower
average interest rates resulting from long-term debt refinancings during 1993.
INCOME TAXES
Income taxes for the three months ended March 31, 1994 decreased $8.8 million
from the same period last year. This decrease was due principally to a decrease
in taxable income, partially offset by an increase in tax expense associated
with the enactment of the Revenue Reconciliation Act of 1993 on August 10, 1993,
which increased the statutory corporate federal income tax rate from 34 percent
to 35 percent retroactive to January 1, 1993.
<PAGE>
Form 10-Q/A Part I New York Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
FIRST THREE MONTHS OF 1994 AS COMPARED TO FIRST THREE MONTHS OF 1993 (Continued)
FINANCING
On February 28, 1994, the Company issued $450 million of its Thirty Year 7 1/4%
Debentures, due February 15, 2024, and $150 million of its Ten Year 6 1/4%
Notes, due February 15, 2004. The net proceeds were used to repay short-term
advances from NYNEX. At March 31, 1994, the Company had $250 million of
unissued, unsecured debt securities registered with the SEC.
Pursuant to the indentures for certain of its debentures, the Company has
covenanted that it will not issue additional funded debt securities ranking
equally with or prior to such debentures unless it has maintained an earnings
coverage of 1.75 for interest charges for a period of any 12 consecutive months
out of the 15 month period prior to the date of the proposed issuance. As a
result of the 1993 business restructuring charges, the Company does not
currently meet the earnings coverage requirement.
<PAGE>
Form 10-Q/A New York Telephone Company
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
New York Telephone Company
Mel Meskin
Mel Meskin
Vice President - Finance and Treasurer
(Principal Financial and Chief Accounting
Officer)
December 13, 1994
