<PAGE>
<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] 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 33-91250
ROCHESTER TELEPHONE CORP.
(Exact name of registrant as specified in its charter)
New York 16-1469713
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
180 South Clinton Avenue, Rochester, NY 14646-0700
(Address of principal executive offices) (Zip Code)
(716) 777-1000
(Registrant's telephone number, including area code)
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___
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
No Par, No Stated Value Common Stock: 772 shares
outstanding as of April 30, 1997
The Registrant 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.
<PAGE>
<PAGE>
ROCHESTER TELEPHONE CORP.
Form 10-Q
Index
Page Number
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Income for the three months ended
March 31, 1997 and March 31, 1996 3
Balance Sheets as of March 31, 1997 and
December 31, 1996 4
Statements of Cash Flows for the three months
ended March 31, 1997 and March 31, 1996 5
Notes to Financial Statements 6
Item 2. Management's Narrative Analysis of the
Results of Operations 8
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 5. Employees and Labor Relations 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Index to Exhibits 16
<PAGE>
<PAGE>
ROCHESTER TELEPHONE CORP.
Statements of Income
(Unaudited)
3 Months Ended March 31,
In thousands of dollars 1997 1996
- --------------------------------------------------------------
Revenues $80,798 $81,134
- --------------------------------------------------------------
Costs and Expenses
Operating expenses 36,744 41,371
Depreciation and amortization 13,672 12,799
Taxes other than income taxes 5,961 5,098
- --------------------------------------------------------------
Total Costs and Expenses 56,377 59,268
- --------------------------------------------------------------
Operating Income 24,421 21,866
Interest expense 652 898
Other expense 279 631
- --------------------------------------------------------------
Income Before Taxes and Cumulative
Effect of Change in Accounting Principle 23,490 20,337
Income taxes 8,195 7,136
- --------------------------------------------------------------
Income Before Cumulative Effect
of Change in Accounting Principle 15,295 13,201
Cumulative effect of change in
accounting principle - 6,949
- --------------------------------------------------------------
Net Income $15,295 $ 6,252
- --------------------------------------------------------------
- --------------------------------------------------------------
See accompanying Notes to Financial Statements.
<PAGE>
<PAGE>
ROCHESTER TELEPHONE CORP.
Balance Sheets
March 31, December 31,
1997 1996
In thousands of dollars (Unaudited)
- --------------------------------------------------------------
ASSETS
Current Assets
Cash and cash equivalents $ 1,010 $ 3,591
Accounts receivable, (less
allowance for uncollectibles
of $1,300 and $1,501,
respectively) 44,298 47,777
Accounts receivable - affiliates 2,950 2,670
Advances to affiliates 1,276 -
Materials and supplies 1,545 2,006
Prepaid directory 8,864 12,463
Other prepayments 1,764 1,406
- --------------------------------------------------------------
Total Current Assets 61,707 69,913
- --------------------------------------------------------------
Property, plant and equipment,
net 326,290 330,552
Prepaid pension 15,121 14,204
Deferred and other assets 1,365 1,247
- --------------------------------------------------------------
Total Assets $404,483 $415,916
- --------------------------------------------------------------
- --------------------------------------------------------------
<PAGE>
<PAGE>
LIABILITIES AND SHAREOWNER'S EQUITY
Current Liabilities
Accounts payable $ 21,538 $ 31,759
Accounts payable - affiliates 8,786 19,022
Advances from affiliate - 3,827
Advance billings 4,908 4,994
Taxes accrued 12,053 3,047
Other current liabilities 3,661 5,908
- --------------------------------------------------------------
Total Current Liabilities 50,946 68,557
- --------------------------------------------------------------
Long-term debt 53,787 62,872
Deferred income taxes 23,323 25,266
Postretirement benefits
obligation 23,774 23,176
Other long-term liabilities 5,193 4,971
- --------------------------------------------------------------
Total Liabilities 157,023 184,842
- --------------------------------------------------------------
Shareowner's Equity
Common stock, no par value and
additional paid in capital:
authorized, 1,000 shares:
issued, 772 shares in 1997
and 1996 232,165 231,074
Retained earnings 15,295 -
- --------------------------------------------------------------
Total Shareowner's Equity 247,460 231,074
- --------------------------------------------------------------
Total Liabilities and
Shareowner's Equity $404,483 $415,916
- --------------------------------------------------------------
- --------------------------------------------------------------
See accompanying Notes to Financial Statements.
<PAGE>
<PAGE>
ROCHESTER TELEPHONE CORP.
Statements of Cash Flows
(Unaudited)
3 Months Ended March 31,
In thousands of dollars 1997 1996
- --------------------------------------------------------------
Operating Activities
Net income $15,295 $ 6,252
- --------------------------------------------------------------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cumulative effect of change in
accounting principle - 10,691
Depreciation and amortization 13,672 12,799
Changes in operating assets
and liabilities:
Decrease (increase) in accounts
receivable 3,199 (688)
Decrease (increase) in materials
and supplies 461 (44)
Decrease in prepaid directory 3,599 3,621
(Increase) decrease in other
prepayments (358) 166
Increase in prepaid pension (917) (413)
Increase in deferred and other assets (152) (496)
Decrease in accounts payable (20,457) (7,312)
Decrease in advance billings (86) (90)
Increase in accrued interest
and taxes 9,006 5,727
Decrease in other current
liabilities (2,247) (1,376)
Increase in postretirement
benefits obligation 598 1,422
Decrease in deferred income taxes (852) (5,327)
Increase (decrease) in other long
term liabilities 222 (462)
- --------------------------------------------------------------
Total adjustments 5,688 18,218
- --------------------------------------------------------------
Net cash provided by operating
activities 20,983 24,470
- --------------------------------------------------------------
<PAGE>
<PAGE>
Investing Activities
Expenditures for property, plant
and equipment (9,376) (11,505)
- --------------------------------------------------------------
Net cash used in investing
activities (9,376) (11,505)
- --------------------------------------------------------------
Financing Activities
Repayments of long-term debt (9,085) -
Proceeds of long-term debt - 3,799
Advances to/from affiliate (5,103) (5,753)
Dividends paid - (14,000)
- --------------------------------------------------------------
Net cash used in financing
activities (14,188) (15,954)
- --------------------------------------------------------------
Net Decrease in Cash and
Cash Equivalents (2,581) (2,989)
Cash and Cash Equivalents at
Beginning of Period 3,591 5,643
- --------------------------------------------------------------
Cash and Cash Equivalents at
End of Period $ 1,010 $ 2,654
- --------------------------------------------------------------
- --------------------------------------------------------------
See accompanying Notes to Financial Statements.
<PAGE>
<PAGE>
Rochester Telephone Corp.
Notes to Financial Statements
(Unaudited)
Note 1: Accounting Policies
The accounting policies of Rochester Telephone Corp.
("RTC" or "the Company"), a wholly owned subsidiary of
Frontier Corporation ("Frontier"), are in conformity with
generally accepted accounting principles. Preparation of
financial statements in accordance with generally accepted
accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
In the opinion of management, the financial statements
reflect all adjustments (of a normal and recurring nature)
which are necessary to present fairly the financial
positions, results of operations and cash flows for the
interim periods.
Note 2: Long-Lived Assets to Be Disposed Of
Effective January 1, 1996, the Company adopted
Financial Accounting Standards No. 121 ("FAS 121"),
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of". FAS 121 requires that
certain long-lived assets and identified intangibles be
written down to fair value whenever an impairment review
indicates that the carrying value cannot be recovered on an
undiscounted cash flow basis. The statement also requires
that certain long-lived assets and identifiable intangibles
to be disposed of be reported at fair value less selling
costs. The Company's adoption of this standard resulted in
a non-cash charge of $6.9 million (net of a tax benefit of
$3.7 million) and is reported in the Statement of Income as
a cumulative effect of a change in accounting principle.
The charge represents the cumulative adjustment required by
FAS 121 to remeasure the carrying amount of certain assets
held for disposal as of January 1, 1996. It applies to an
asset write-down for the expected impairment loss and
disposal costs for telephone switching equipment as a result
of the Company implementing a central office switch
consolidation project.
Note 3: Long-Term Debt
On March 31, 1997, Standard & Poor's ("S& P") announced
their new domestic telephone company rating methodology,
which addresses the impact of deregulation on operating and
holding company ratings. As a result, the ratings of 16
companies were affected by S&P's announcement, and S&P
lowered their rating of the Company's long-term debt from
"AA" to "AA-". Under S&P's revised rating methodology, a
local telephone company is typically allowed a rating one
"notch" higher than that of the consolidated entity (i.e.,
holding company and operating subsidiaries). However, the
Company was allowed a two "notch" differential, largely as a
result of the regulatory controls in existence under the
Company's Open Market Plan.
Note 4: Common Stock and Additional Paid In Capital
The value assigned to common stock and additional paid
in capital of the Company was determined based on the
historical book value of the assets transferred from
Frontier to the Company on January 1, 1995. In the first
quarter of 1997, a $1.1 million adjustment to this valuation
was required relating to deferred taxes associated with the
assets transferred. This adjustment is reflected as an
increase to common stock and additional paid in capital and
a decrease in deferred taxes.
Note 5: Regulatory Matters
The Open Market Plan prohibits the payment of dividends
by the Company to Frontier Corporation if (i) the
Company's senior debt has been downgraded to "BBB" by S&P,
or the equivalent rating by other rating agencies or is
placed on credit watch for such a downgrade, or (ii) a
service quality penalty is imposed under the Open Market
Plan. Dividends paid to Frontier also are prohibited unless
the Company's directors certify that such dividends will
impair neither the Company's service quality nor its ability
to finance its short and long term capital needs on
reasonable terms while maintaining an S&P debt rating target
of "A".
In 1996, the Company failed to achieve the service
quality levels required by the Open Market Plan. On
December 19, 1996, pursuant to the Open Market Plan, RTC
requested the New York State Public Service Commission
("NYSPSC") staff to exclude certain months from the
calculation used to measure service quality, due to
operating conditions considered by management to be abnormal
and beyond the Company's control. In April 1997, the Company
received notice from the NYSPSC that its request for a
waiver of certain conditions in the Open Market Plan related
to service quality results was denied. The NYSPSC's ruling
will result in a temporary restriction on the payments of
dividends from the Company to Frontier and a refund to the
Company's customers of approximately $.9 million. Reserves
sufficient to cover the refund were established in 1996.
Note 6: Cash Flows
For purposes of the Statement of Cash Flows, the
Company considers all highly-liquid investments with an
original maturity of three months or less to be cash
equivalents.
The Company paid a cash dividend to Frontier in the
amount of $14.0 million in March 1996. No dividends were
paid during the first quarter of 1997.
Actual interest paid was $1.4 million and $1.8 million
for the three months ended March 31, 1997 and 1996,
respectively. The Company received an income tax refund of
$0.8 million in the first quarter of 1997 and paid no income
taxes during the first quarter of 1996.
ITEM 2 - MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS
OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
The matters discussed throughout this Form 10-Q, except
for historical financial results contained herein, may be
forward looking in nature or "forward looking statements."
Actual results may differ materially from the forecasts or
projections presented. Forward looking statements are
identified by such words as "expects," "anticipates,"
"believes," "intends," "plans" and variations of such words
and similar expressions. The Company believes that its
primary risk factors include, but are not limited to:
changes in the overall economy and the economy in Rochester,
New York, the nature and pace of technological change, the
number and size of competitors in the Company's market,
changes in law and regulatory policy and the mix of products
and services offered in the Company's markets. Any forward
looking statements in the March 31, 1997 Form 10-Q should be
evaluated in light of these important risk factors.
DESCRIPTION OF BUSINESS
Rochester Telephone Corp. (the "Company") is a
regulated independent telephone company that serves
approximately 534,000 access lines in the greater Rochester,
New York area. The Company was incorporated in December
1994 as a wholly owned subsidiary of Frontier Corporation.
Frontier Corporation, previously known as Rochester
Telephone Corporation, has been providing local telephone
service in the greater Rochester market since 1920. The
Company is the primary provider of basic telephone services
in the Rochester market and offers its customers a full
complement of local telephone network services, access to
long distance network services, directory and other operator
services. The Company also offers all of its network
services for sale on a wholesale basis to other
telecommunication service providers in the Rochester market.
RESULTS OF OPERATIONS
Revenues for the three months ended March 31, 1997 were
$80.8 million, relatively unchanged compared to $81.1
million in the comparable period for 1996.
The revenue growth attributable to an increase in demand
for dedicated circuits, enhanced features and the expansion
of the Internet customer base was offset by a decline in
IntraLATA toll revenue and a reduction in leased phones and
PBX sales. In addition, revenue was negatively impacted by
the elimination of the surcharge on wholesale, flat rate,
local measured service and an increase in the discount to
wholesale providers from 5% to 17%, as ordered by the New
York State Public Service Commission ("NYSPSC") and the $1.5
million annual rate reduction, effective January 1, 1997,
associated with the Open Market Plan.
Costs and expenses, excluding certain one-time charges
that were incurred in 1996, were consistent for the first
quarters of 1997 and 1996. The one-time costs that were
incurred during the first quarter of 1996 related to higher
labor and associated expenses resulting from the expiration
of the Communication Workers of America ("CWA") Local 1170
union labor agreement with the Company. These increased
costs were necessary to ensure reliable and uninterrupted
customer service in the event of a work stoppage or
slowdown. In addition, the Company experienced higher
overtime costs in 1996 to handle increased maintenance work
on its network.
Depreciation and amortization expense for the first
three months of 1997 increased $.9 million or 6.8% from the
comparable period last year due primarily to increases in
telephone plant and equipment in service balances during
1997.
Net income for the first three months of 1997 was $15.3
million as compared to net income of $6.3 million for the
same period in 1996. Results for the first three months of
1996 reflect a one-time after tax charge of $6.9 million for
the adoption of Financial Accounting Standards Board
Statement No.121 ("FAS 121"), "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of", which relates to the accounting for a central
office switch consolidation project. Excluding this charge,
1997 net income increased by $2.1 million or 15.9% over the
comparable 1996 period. The increase in net income is
largely due to the reduction in operating expenses during
the first three months of 1997.
During 1995, management committed to a plan which makes
Rochester Telephone Corp. the first company in the United
States to begin a central office switch consolidation
project in a major market. The three-year plan to
consolidate host switches by over 60% is projected to
improve network efficiency and reduce the cost of
maintenance and software upgrades. As of March 31, 1997,
the project is progressing as scheduled and two host
switches have been consolidated. The Company anticipates
that the project will be substantially complete by July
1998.
Other Income Statement Items
Interest expense for the period ended March 31, 1997
amounted to $0.7 million, a decrease of $0.2 million or
27.4% from the first three months of 1996. This decrease is
attributed to lower average outstanding debt levels and an
increase in capitalized interest.
The effective income tax rate for the first quarter of
1997 is 34.9%, consistent with the first quarter of 1996.
FINANCIAL CONDITION
Review of Cash Flow Activity
Cash provided by operating activities for the three
months of 1997 decreased $3.5 million or 14.3% as a result
of increased working capital requirements. Offsetting the
cash provided by operating activities in 1997 and 1996 are
outflows for capital expenditures of $9.4 million and $11.5
million, respectively.
Cash flow from financing activities amounted to a net
outflow of $14.2 million for the three months ended March
31, 1997 compared with a net outflow of $16.0 million for
the same period last year. In the first quarter of 1997,
the Company repaid $9.1 million of outstanding debt under
its commercial paper program and repaid advances in the
amount of $5.1 million to Frontier. There were no cash
dividends paid during the first three months of 1997. (See
discussion relating to the dividend policy on page 12.) In
the first quarter of 1996, the Company paid cash dividends
of $14.0 million and repaid advances to Frontier in the
amount of $5.8 million. In addition, the Company borrowed
$3.8 million under its commercial paper program.
Debt
At March 31, 1997, the Company's total outstanding long-
term debt amounted to $53.8 million. This debt consisted of
$13.8 million issued under the Company's Commercial Paper
program and $40.0 million of medium-term notes.
On March 31, 1997, Standard & Poor's ("S& P") announced
their new domestic telephone company rating methodology,
which addresses the impact of deregulation on operating and
holding company ratings. As a result, the ratings of 16
companies were affected by S&P's announcement, and S&P
lowered their rating of the Company's long-term debt from
"AA" to "AA-". Under S&P's revised rating methodology, a
local telephone company is typically allowed a rating one
"notch" higher than that of the consolidated entity (i.e.,
holding company and operating subsidiaries). However, the
Company was allowed a two "notch" differential, largely as a
result of the regulatory controls in existence under the
Company's Open Market Plan. The change in debt rating is
not expected to impact the Company's cost of borrowing as
S&P's modification of its rating criteria impacts the
telecommunications industry as a whole.
Debt Ratio and Interest Coverage
The Company's debt ratio (total debt as a percent of
total capitalization) was 17.9% at March 31, 1997 as
compared with 21.4% at December 31, 1996. This change is
primarily due to the reduction of outstanding debt under the
Company's commercial paper program. Pre-tax interest
coverage was 23.8 times through the first three months of
1997, as compared with 19.3 times for the first three months
of 1996.
Capital Spending
For the three months ended March 31, 1997, capital
expenditures amounted to $9.4 million as compared to $11.5
million for comparable period in 1996. The Company plans to
expend a total of approximately $50 million for additions to
property, plant and equipment in 1997.
OTHER ITEMS
Open Market Plan
The Company began its third year of operations under
the Open Market Plan in January 1997. The Open Market Plan
promotes telecommunications competition in the Rochester,
New York marketplace by providing for (1) interconnection of
competing local networks including reciprocal compensation
for terminating traffic, (2) equal access to network
databases, (3) access to local telephone numbers, (4)
service provider telephone number portability, and (5)
certain wholesale discounts to resellers of local services.
The inherent risk associated with opening the Rochester
market to competition is that some customers are able to
purchase services from competitors, which may reduce the
number of retail customers and potentially cause a decrease
in the revenues and profitability for Rochester Telephone.
However, results since implementation of the Open Market
Plan indicate that a stimulation of demand in the use of the
network and new product revenue may offset the losses of
some retail customers. Increased competition may also lead
to additional price decreases for services, adversely
impacting the Company's margins. An additional positive
feature of the Open Market Plan provides that the Company
can retain additional earnings achieved through operating
efficiencies. Previously these earnings would have been
shared with customers.
During the seven year period of the Open Market Plan,
rate reductions of $21 million (the "Rate Stabilization
Plan") will be implemented for Rochester area consumers,
including $14 million of which occurred through 1996 and an
additional $1.5 million which commenced in January 1997.
Rates charged for basic residential and business telephone
service may not be increased during the seven year period of
the Plan. The Company is allowed to raise prices on certain
enhanced products such as caller ID and call forwarding.
Price increases on enhanced products partially offset the
rate reductions required under the Plan during 1997.
AT&T Communications of New York filed a complaint with
the NYSPSC for reconsideration of the Open Market Plan on
October 3, 1995. The complaint sought a change in the
wholesale discount, a change in the minutes of use surcharge
and also changes in a number of operational and support
activities. Some of these issues are also being considered
in other states in other unrelated local competition
proceedings. On July 18, 1996, the NYSPSC issued an order
establishing a temporary wholesale discount of 13.5% for
services and eliminating the minutes of use surcharge. On
November 27, 1996, the NYSPSC set permanent wholesale
discounts retroactive to July 24, 1996, of 17.0% for
resellers that use the Company's operator services and 19.6%
for resellers that provide their own operator services. The
Company believes that, currently, all resellers in this
market use the Company's operator services.
Under the Telecommunications Act of 1996 and a
statewide proceeding, the NYSPSC is considering the prices
that local exchange companies in New York may charge for
"unbundled" service elements such as links (the wire from
the switch to the customer premise), ports (the portion of
the switch that terminates the link) and switch usage
features. The Company is actively participating in this
proceeding and expects the NYSPSC to issue a decision on
service elements in 1997.
Management believes there are significant market and
business opportunities associated with the Company's Open
Market Plan. However, there are also uncertainties
associated with the Plan. In the Company's opinion, the
most significant risks relate to increased competition in
the Rochester, New York market, the risk inherent in the
Rate Stabilization Plan and the potential diversification
risk.
There can be no assurance that the changing regulatory
environment will not have a negative impact on the Company.
Dividend Policy
The Open Market Plan prohibits the payment of dividends
by the Company to Frontier Corporation if (i) the
Company's senior debt has been downgraded to "BBB" by S&P,
or the equivalent rating by other rating agencies or is
placed on credit watch for such a downgrade, or (ii) a
service quality penalty is imposed under the Open Market
Plan. Dividends paid to Frontier also are prohibited unless
the Company's directors certify that such dividends will
impair neither the Company's service quality nor its ability
to finance its short and long term capital needs on
reasonable terms while maintaining an S&P debt rating target
of "A".
In 1996, the Company failed to achieve the service
quality levels required by the Open Market Plan. On
December 19, 1996, pursuant to the Open Market Plan, RTC
requested the NYSPSC staff to exclude certain months from
the calculation used to measure service quality, due to
operating conditions considered by management to be abnormal
and beyond the Company's control. In April 1997, the Company
received notice from the NYSPSC that its request for a
waiver of certain conditions in the Open Market Plan related
to service quality results was denied. The NYSPSC's ruling
will result in a temporary restriction on the payments of
dividends to Frontier and a refund to the Company's
customers of approximately $.9 million. Reserves sufficient
to cover the refund were established in 1996.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
AT&T Communications of New York filed a complaint with
the NYSPSC for reconsideration of the Open Market Plan on
October 3, 1995. The complaint sought a change in the
wholesale discount, a change in the minutes of use surcharge
and also changes in a number of operational and support
activities. Some of these issues are also being considered
in other states in other unrelated local competition
proceedings. On July 18, 1996, the NYSPSC increased the
wholesale discount to 13.5% on a temporary basis, effective
July 24, 1996. On November 27, 1996, the NYSPSC
established permanent wholesale discounts, retroactive to
July 24, of 17.0% for resellers using the Company's operator
services and 19.6% for resellers providing their own
operator services. In a statewide proceeding also examining
New York Telephone Company's wholesale prices, the NYSPSC is
determining the prices applicable to the purchase of
unbundled network elements such as subscriber loops
("links"), switch ports and transport and switching
services. In a related statewide proceeding, the NYSPSC is
also examining possible changes in the prices and rate
structure of intrastate access charges paid by long distance
companies for the origination and termination of long
distance calls.
Item 5. Employees and Labor Relations
The labor contract between the CWA, Local 1170 and the
Company expired on January 31, 1996. The Company's total
workforce is 1,486 employees at March 31, 1997. Membership
in the CWA Local accounted for approximately 40% of that
total. After six months of collective bargaining without
reaching an agreement, the Company declared that the
negotiations were at impasse and implemented the terms of
its final offer effective April 9, 1996. The CWA Local 1170
challenged the Company's declaration of impasse and
implementation through the filing of several unfair labor
practice charges with the National Labor Relations Board
("NLRB"). All but one of these charges was dismissed by the
NLRB on December 2, 1996. The remaining charge was returned
to the NLRB's Regional Office in Buffalo, New York for an
administrative hearing that is scheduled to commence on May
19, 1997. The Company cannot predict the final outcome of
these matters at this time. On May 6, 1997, the members of
CWA, Local 1170, ratified a tentative agreement which was
reached with Rochester Telephone on April 29, 1997 which
contained provisions that differed from the Company's final
offer implemented at the time of impasse. This new
agreement will provide several operational improvements and
will result in alignment of benefits with the rest of the
Corporation. The differences between the Company's final
offer and the agreement that was ratified are not material
in the view of management.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - See Index
27 Financial Data Schedule
(b) Reports on Form 8-K filed during the quarter: None
The Company filed the following reports on Form 8-K
subsequent to the quarter ended March 31, 1997:
SEC Filing Date Item No. Financial Statements
April 10, 1997 5 No
<PAGE>
<PAGE>
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.
ROCHESTER TELEPHONE CORP.
-------------------------
(Registrant)
Dated: May 14, 1997 By: /s/Michael L. Evans
-------------------------------
Michael L. Evans
Vice President and Treasurer
(and principal financial officer)
<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description Reference
3.1 Certificate of Incorporation Incorporated by reference
to Exhibit 3.1
to Form 10-K
for the year ended
December 31, 1995.
3.2 Certificate of Amendment to Incorporated by reference
Certificate of Incorporation to Exhibit 3.2 to Form
10-K for the year ended
December 31, 1995.
3.3 Bylaws Incorporated by reference
to Exhibit 3.3 to Form
10-K
for the year ended
December 31, 1995.
27 Financial Data Schedule Filed herewith
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SECHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ROCHESTER
TELEPHONE CORP.'S FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH
31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000936105
<NAME> ROCHESTER TELEPHONE CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,010
<SECURITIES> 0
<RECEIVABLES> 45,598
<ALLOWANCES> 1,300
<INVENTORY> 1,545
<CURRENT-ASSETS> 61,707
<PP&E> 905,001
<DEPRECIATION> 578,711
<TOTAL-ASSETS> 404,483
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<BONDS> 53,787
0
0
<COMMON> 232,165
<OTHER-SE> 15,295
<TOTAL-LIABILITY-AND-EQUITY> 404,483
<SALES> 0
<TOTAL-REVENUES> 80,798
<CGS> 0
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<INTEREST-EXPENSE> 652
<INCOME-PRETAX> 23,490
<INCOME-TAX> 8,195
<INCOME-CONTINUING> 15,295
<DISCONTINUED> 0
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<NET-INCOME> 15,295
<EPS-PRIMARY> 0
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</TABLE>
