SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 28, 1994
THE OHIO BELL TELEPHONE COMPANY
(Exact name of registrant as specified in its charter)
Ohio
(State or other jurisdiction of incorporation)
1-6781 34-0436390
Commission File Number IRS Employer ID No.
45 Erieview Plaza, Cleveland, Ohio 44114
(Address of principal executive offices)
Registrant's telephone number, including area code: (216)822-9700
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Item 5. Other Events
On November 28, 1994, The Ohio Bell Telephone Company (the "Company")
announced through its parent, Ameritech Corporation, that it will
discontinue the application of Statement of Financial Accounting
Standards No. 71 ("SFAS No. 71"), "Accounting for the Effects of
Certain Types of Regulation." As a result, the Company will record in
the fourth quarter an extraordinary noncash charge of approximately
$448.7 million after taxes.
Under SFAS No. 71, the Company had accounted for the effects of
regulation by depreciating telecommunications plant using asset lives
prescribed by regulators and deferring certain costs and recognizing
certain liabilities ("regulatory assets and liabilities").
Criteria that give rise to the discontinuance of SFAS No. 71 include
(1) increasing competition which restricts the Company's ability to
establish prices to recover specific costs, and (2) a significant
change in the manner in which rates are set by regulators from cost-
based regulation to another form of regulation. The Company has
periodically reviewed these criteria and, in light of recent changes
in its competitive and regulatory environments, concluded that
continued application of SFAS No. 71 was no long appropriate.
As a result of the discontinuation of applying SFAS No. 71 the Company
recognized a noncash, after-tax extraordinary charge of $448.7 million
by reducing the net carrying value of its telecommunications plant and
eliminated regulatory assets and liabilities from its balance sheet.
The adjustment to telecommunications plant was about $741.7 million
and was recorded as an increase to the accumulated depreciation
balance. The discontinuation of applying SFAS No. 71 does not affect
the accounting and reporting followed by the Company to state and
federal regulators.
When adjusting its net telecommunications plant, the Company gave
effect to shorter, more economically realistic lives.
In addition to the SFAS No. 71 discontinuance, the Company announced
that it will reduce certain asset values, primarily for real estate
that it plans to sell or no longer use in the business. The reduction
of $7.2 million after taxes, reflects the disposition value of these
assets. Disposition of these assets will not have a material effect
on the revenues or expenses of the Company in the future.
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Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Dated: December 1, 1994
THE OHIO BELL TELEPHONE COMPANY
By /s/ Bruce B. Howat
Bruce B. Howat
Assistant Secretary
