<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
__
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
______________________________________
OR
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 0-873
_______________________________________________
PACIFIC TELECOM, INC.
______________________________________________________________________
(Exact name of registrant as specified in its charter)
Washington 91-0644974
______________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
805 Broadway, P.O. Box 9901, Vancouver, Washington 98668 - 8701
______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (360)905-5800
___________________
No Change
______________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report)
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.
Common Stock, no par value 100 shares
__________________________________________________________________
(Title of Class) (Outstanding at August 2, 1996)
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>
<TABLE>
PACIFIC TELECOM, INC.
INDEX
_____
<CAPTION>
PART I FINANCIAL INFORMATION: PAGE NO.
_____________________ ________
<S> <C>
Item 1 - Financial Statements:
Consolidated Balance Sheets -
June 30, 1996 and December 31, 1995 3
Consolidated Statements of Income -
Three and six months ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows -
Six months ended June 30, 1996 and 1995 5
Condensed Notes to Consolidated Financial Statements 6 - 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 -10
PART II OTHER INFORMATION:
_________________
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
- 2 -
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. - Financial Statements
PACIFIC TELECOM, INC.
Consolidated Balance Sheets
(Unaudited)
ASSETS
______
June 30, December 31,
1996 1995
________ ____________
(In thousands)
Current assets:
Cash and temporary cash investments $ 17,227 $ 6,331
Accounts receivable 102,695 81,528
Accounts and notes receivable affiliates (Note 2) 35,968 41,234
Material and supplies (at average cost) 9,895 7,082
Inventory - North Pacific Cable 59,045 60,571
Other 9,506 9,522
_________ _________
Total current assets 234,336 206,268
Investments 126,345 124,555
Plant in service:
Telecommunications 1,580,822 1,570,262
Other 22,265 22,655
Less accumulated depreciation 694,989 678,328
_________ _________
908,098 914,589
Construction work in progress 16,973 13,970
_________ _________
Net plant 925,071 928,559
Intangible assets - net 372,519 378,214
Deferred charges 16,204 16,528
_________ _________
Total assets $1,674,475 $1,654,124
_________ _________
_________ _________
LIABILITIES AND CAPITALIZATION
______________________________
Current liabilities:
Currently maturing long-term debt $ 5,712 $ 5,535
Notes payable 73,000 90,000
Accounts payable 67,287 48,395
Accrued liabilities 61,946 58,736
Dissenters' rights 28,706 27,930
Accrued access and unearned revenue 9,542 8,354
_______ _______
Total current liabilities 246,193 238,950
Long-term debt 457,717 459,502
Deferred income taxes 132,522 126,539
Unamortized investment tax credits 6,066 6,929
Other long-term liabilities 49,845 48,502
Minority interest 18,973 18,288
Shareholder's equity:
Common stock - -
Additional paid-in capital 225,943 225,943
Retained earnings 537,216 529,471
_________ _________
Total shareholder's equity 763,159 755,414
_________ _________
Total liabilities and capitalization $1,674,475 $1,654,124
_________ _________
_________ _________
[FN]
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
<TABLE>
PACIFIC TELECOM, INC.
Consolidated Statements of Income
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
__________________ ________________
1996 1995 1996 1995
____ ____ ____ ____
(In thousands)
<S> <C> <C> <C> <C>
Operating revenues:
Local network service $ 34,515 $ 29,951 $ 67,770 $ 57,211
Network access service 62,657 52,882 126,128 100,736
Long distance network service 339 64,275 762 126,345
Private line service - 14,369 - 29,597
Sales of cable capacity 2,174 1,124 2,249 2,684
Cellular 10,609 8,029 19,377 14,147
Other 19,205 21,714 37,643 43,335
_______ _______ _______ _______
Total operating revenues 129,499 192,344 253,929 374,055
_______ _______ _______ _______
Operating expenses:
Plant support 22,656 32,483 44,691 62,726
Depreciation and amortization 25,548 29,672 50,888 57,232
Leased circuits 701 7,714 1,108 16,507
Access expense - 22,611 - 44,977
Other operating expense 7,573 10,845 14,842 20,756
Cost of cable sales 1,490 666 1,526 1,724
Customer operations 13,623 19,443 26,819 38,003
Administrative support 14,995 19,370 30,999 38,406
Taxes other than income taxes 4,999 4,047 9,787 8,076
_______ _______ _______ _______
Total operating expenses 91,585 146,851 180,660 288,407
_______ _______ _______ _______
Operating income 37,914 45,493 73,269 85,648
_______ _______ _______ _______
Other income (expense):
Interest expense (10,554) (11,470) (20,607) (21,468)
Interest income 596 453 1,201 1,077
Gain on sale of subsidiaries
and investments 2,890 - 3,705 -
Other (1,312) (1,200) (1,821) (4,869)
_______ _______ _______ _______
Other income (expense)
- net (8,380) (12,217) (17,522) (25,260)
_______ _______ _______ _______
Income before income taxes 29,534 33,276 55,747 60,388
Income taxes 11,490 12,864 21,686 23,249
_______ _______ _______ _______
Net income $ 18,044 $ 20,412 $ 34,061 $ 37,139
_______ _______ _______ _______
_______ _______ _______ _______
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
-4-
<PAGE>
PACIFIC TELECOM, INC.
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
________________
1996 1995
______ _____
(In thousands)
Cash Flows from Operating Activities:
Net income $ 34,061 $ 37,139
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 54,951 61,076
Deferred income taxes and investment tax credits,
net 3,267 (2,319)
Gain on sale of subsidiaries and investments (3,705) -
Gains from unconsolidated entities, net (2,991) (689)
Accounts receivable and other current assets (15,184) (10,805)
Inventory - North Pacific Cable 1,526 1,722
Accounts payable and accrued liabilities 25,863 (2,990)
Other 4,677 (1,073)
_______ ________
Net cash provided by operating activities 102,465 82,061
_______ ________
Cash Flows from Investing Activities:
Construction expenditures (46,972) (60,206)
Cost of business acquired - (197,905)
Investments in and advances to affiliates (1,928) (2,751)
Proceeds from sales of assets 2,255 1,826
_______ _______
Net cash used by investing activities (46,645) (259,036)
_______ ________
Cash Flows from Financing Activities:
(Decrease) increase in short-term debt (17,000) 224,091
Proceeds from issuance of long-term debt 1,740 2,148
Purchase of common stock - (782)
Dividends paid (26,317) (26,146)
Payments of long-term debt (3,347) (2,904)
_______ _______
Net cash (used) provided by financing activities (44,924) 196,407
_______ _______
Increase in Cash and Temporary Cash Investments 10,896 19,432
Cash and Temporary Cash Investments at
Beginning of Period 6,331 9,883
_______ _______
Cash and Temporary Cash Investments at
End of Period $ 17,227 $ 29,315
_______ _______
_______ _______
Supplemental Disclosures of Cash Flow Information:
Cash paid during the six months ended June 30 for:
Interest $ 20,080 $ 21,037
Income Taxes $ 11,081 $ 20,204
[FN]
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
Notes to Consolidated Financial Statements
(Unaudited)
1. The consolidated financial statements include all normal adjustments
which, in the opinion of management, are necessary to present fairly
the consolidated financial position at June 30, 1996, and the
consolidated results of operations and cash flows for the three and
six months ended June 30, 1996 and 1995. These consolidated
financial statements should be read in conjunction with the
financial statements and related notes included in the latest annual
report filed on Form 10-K of Pacific Telecom, Inc. (Company).
The consolidated results of operations presented herein are not
necessarily indicative of the results to be expected for the year.
The 1995 consolidated financial statements reflect certain
reclassifications to conform to the current year presentation. These
reclassifications have no effect on previously stated net income.
2. The Company is a wholly-owned subsidiary of PacifiCorp Holdings,
Inc. (Holdings), which is a wholly-owned subsidiary of PacifiCorp.
See Note 2 to the Consolidated Financial Statements included
in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, for information related to the affiliated note
for amounts to be paid dissenters relating to the minority buy-out.
3. Certain loan agreements contain provisions restricting the payment
of cash dividends. Retained earnings of approximately $243 million
were available for dividends and other distributions at June 30, 1996.
The Company's ratio of earnings to fixed charges for the six months
ended June 30, 1996, calculated in accordance with Item 503 of
Regulation S-K under the Securities Exchange Act of 1934, was
3.4 to 1.
4. The Company's effective combined state and federal income tax rates
were 38.9 percent and 38.5 percent for the six months ended
June 30, 1996 and 1995, respectively. The difference between
taxes calculated at the statutory federal tax rates and the
effective combined rates for 1996 and 1995 is reconciled as follows:
1996 1995
____ ____
Federal statutory rate 35.0% 35.0%
State income taxes, net of federal benefit 4.8 4.5
Amortization of investment tax credits (1.5) (3.2)
Amortization of excess deferred income taxes (.5) (.6)
Amortization of excess cost 1.9 1.9
Other (.8) .9
____ ____
Effective tax rate 38.9% 38.5%
____ ____
____ ____
The components of income tax expense are as follows:
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
_____ _____ _____ _____
(In thousands)
Federal income taxes $ 8,870 $10,550 $17,598 $19,082
State income taxes 2,620 2,314 4,088 4,167
_______ _______ ______ ______
$11,490 $12,864 $21,686 $23,249
______ ______ ______ ______
______ ______ ______ ______
Income taxes currently payable $ 9,744 $15,181 $18,361 $25,888
Deferred income taxes 2,177 (1,318) 4,188 (640)
Amortization of deferred
investment tax credits (431) (999) (863) (1,999)
______ ______ ______ ______
$11,490 $12,864 $21,686 $23,249
______ ______ ______ ______
______ ______ ______ ______
-6-
<PAGE>
Notes to Consolidated Financial Statements
(Unaudited)
5. On August 7, 1995, the Company closed the sale of the stock of
Alascom, Inc. (Alascom) to AT&T Corp. in a transaction providing
$365.5 million in proceeds. See Note 16 to the Consolidated
Financial Statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, for information
related to this transaction.
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations*
Six Months Ended June 30
________________________
Results of Operations
_____________________
The Company's net income for the six months ended June 30, 1996 was
$34.1 million, a decrease of 8 percent compared to net income of $37.1
million for the same period in 1995. This decrease was attributable to
the sale of Alascom in August, 1995. Operating income decreased 14
percent or $12.4 million in the first half of 1996 compared to 1995.
In the first half of 1995, Alascom's contribution to operating income
was $30.4 million. This decrease was offset in part by the
acquisitions of local exchange assets in 1995. The Colorado
acquisition in February 1995 contributed operating income of $10.5
million in the first half of 1996 and $8.0 million in the first half
of 1995. Acquisitions of LEC assets in Washington and Oregon
late in September and October 1995 contributed operating income of
$8.3 million in the first half of 1996. The resulting net increase
in operating income from all the 1995 acquisitions for the first half
of 1996 was $10.8 million. Also increasing operating income were
increases resulting from LEC internal access line growth, revised
local exchange revenue estimates for prior years and cellular
customer growth. Operating revenues for the first half of 1996 were
$253.9 million, a decrease of $120.2 million, or 32 percent, compared
to the same period in 1995. Operating expenses in the first half of
1996 were $180.6 million, a decrease of $107.8 million, or 37
percent, compared to the first half of 1995. See Part II,
Item 7. "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995, for information
about the North Pacific Cable.
The following table summarizes the effects of the sale of Alascom in
August 1995 and the acquisition of LEC assets in 1995 on operating
income for the period ended June 30, 1996, when compared to 1995.
Other material variances are footnoted below:
<TABLE>
<CAPTION>
Consolidated Alascom Consolidated
Six Months Six Months Variance Six Months
Ended Ended due to Ended
June 30, June 30, LEC June 30,
1995 1995 Acquisitions Other 1996
____________ _________ ____________ _____ ___________
<S> <C> <C> <C> <C> <C>
(in millions)
Operating revenues:
Local network service $ 57.2 $ 5.7 $4.9 (a) $ 67.8
Network access service 100.7 21.5 3.9 (b) 126.1
Long distance
network service 126.4 $(125.7) .1 .8
Private line service 29.6 (29.6) -
Sales of cable capacity 2.7 (.5) 2.2
Cellular 14.1 5.3 (c) 19.4
Other 43.4 (9.0) 1.5 1.7 (d) 37.6
_____ _____ ____ ____ _____
Total operating
revenues 374.1 (164.3) 28.8 15.3 253.9
_____ _____ ____ ____ _____
Operating expenses:
Plant support 62.7 (22.5) 3.9 .6 44.7
Depreciation and
amortization 57.2 (16.9) 7.7 2.9 (e) 50.9
Leased circuits 16.5 (14.3) (1.1)(f) 1.1
Access expense 45.0 (45.0) -
Other operating expense 20.8 (7.7) .9 .8 14.8
Cost of cable sales 1.7 (.2) 1.5
Customer operations 38.0 (13.3) .6 1.5 (g) 26.8
Administrative support 38.4 (13.3) 2.8 3.1 (h) 31.0
Taxes other than
income taxes 8.1 (.9) 2.1 .5 9.8
_____ _____ ____ ___ _____
Total operating expenses 288.4 (133.9) 18.0 8.1 180.6
_____ _____ ____ ___ _____
Operating income $ 85.7 $(30.4) $10.8 $7.2 $ 73.3
_____ _____ ____ ___ _____
_____ _____ ____ ___ _____
<FN>
_________________________
*Pursuant to General Instruction H (1)(a) and (b) of Form 10-Q, the
Company is substituting a management's narrative analysis of results of
operations for Item 2.
</TABLE>
-8-
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(a) Revenue from enhanced services, such as caller name and number
identification, voice messaging, automatic call back, auto recall
and call trace, of $1.7 million, revenue from LEC access line
growth of $1.9 million and LEC installation related charges of $.6
million due to customer growth and certain rate increases
accounted for most of the $4.9 million increase in local network
service revenue.
(b) Network access service revenue grew by $3.9 million, with $3.6
million resulting from access line growth and higher minutes of
use and $1.6 million resulting from revised LEC revenue estimates
for prior years. This increase was partially offset by decreased
Universal Service Fund (USF) support of $1.9 million. The national
average cost per access line to provide service to rural telephone
customers (the USF benchmark) increased while the Company's cost
per access line increased at a rate below the national average.
This caused a slight decrease in the USF support received per
access line.
(c) Cellular revenue grew $5.3 million due to growth in customers and
increased roaming revenues.
(d) Other increased $1.7 million mainly due to increased
nonregulated equipment sales of $1.0 million.
(e) Depreciation expense was higher by $2.9 million, which included
$1.9 million due to increased LEC depreciable plant balances
and $.4 million due to growth in cellular operations.
(f) Leased circuits expense decreased $1.1 million in 1996 due to
the cable outage restoration services provided in February and
May 1995.
(g) Customer operations expense grew $1.5 million, which included $.8
million due to growth in cellular operations and $.4 million due
to LEC customer growth.
(h) Administrative support increased $3.1 million mainly due to
higher corporate support costs for information systems and
benefits.
Other expense - net for the first half of 1996 was $17.5 million, a
decrease of $7.7 million or 31 percent from 1995. Gain on sale
of subsidiaries and investments of $3.7 million includes the
sales of cellular properties. Equity earnings from cellular and
telephone investments increased $1.8 million and diversified company
income increased $.6 million in the first half of 1996 compared to
the same period in 1995. Other expense in 1995 included $1.4 million
in costs relating to Holdings' offer to purchase the minority interest
in the Company.
Acquisitions
____________
The Company has definitive agreements with US WEST Communications, Inc.
and GTE North Incorporated to purchase local exchange telephone
properties in Minnesota and Michigan, respectively. The Minnesota
properties represent 32 exchanges serving 26,600 access lines and the
Michigan properties represent eight exchanges serving 11,100 access lines.
These acquisitions are subject to regulatory approval and are expected
to close by the end of 1996. The Company also has a definitive
agreement with the City of Ketchikan to purchase telephone assets and
operations in Ketchikan, Alaska with 9,600 access lines. The Company
is currently negotiating a definitive agreement with the Fairbanks
Municipal Utility System to acquire its telephone and cellular
operations that has 32,000 access lines. In addition to the
receipt of required regulatory approvals, voter approval is required
for the Ketchikan and Fairbanks acquisitions. The Alaska acquisitions
are expected to close during the first half of 1997 assuming the
necessary approvals are obtained. The Company anticipates that
all four acquisitions will require $280 million in cash. The
Company expects to fund these acquisitions through the issuance of
external debt and internally generated funds.
-9-
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
See Part II, Item 7. "Management's Discussion and Analysis of
Financial Condition and Results of Operations" under "Acquisitions"
and Notes 14 and 15 to the Consolidated Financial Statements included
in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, for information about acquisitions.
Liquidity and Capital Resources
_______________________________
During the six months ended June 30, 1996, construction expenditures
amounted to $47.0 million. These expenditures pertained mainly to
network upgrades and internal growth of the Company's operations.
The construction expenditures were funded primarily with cash from
operations. In 1996, total construction expenditures estimated
at $114.2 million are expected to be funded primarily through
cash from operations. Cash from operations in the first half of
1996 was comparable with amounts for the same period in 1995. Lower
operating cash, relating mainly to the sale of Alascom, was offset by
higher interstate access receipts from the National Exchange
Carrier Association (NECA), including $10.1 million attributable to
certain revenue requirement issues. Due to an FCC ruling, the Company
did not record the $10.1 million receipt as income and expects
that this amount will be refunded or used to offset future
cash flow from NECA.
The Company has access to funds through its $300 million revolving
credit agreement which terminates in November 1999. At June 30, 1996,
no borrowings were outstanding under this agreement. The revolving
credit agreement also serves as backup for a $100 million commercial
paper program, under which $50 million was outstanding at June 30, 1996.
The Company had $98 million outstanding under other available
banking arrangements at June 30, 1996. Short-term borrowings from
other available banking arrangements of $25 million and commercial
paper of $50 million have been classified as long-term debt
based on management's intent and the Company's ability to support
this debt on a long-term basis. In January 1996, the Company
established a $200 million Series C Medium-term Note program, which
will be used primarily to fund future acquisitions and to repay some
of the short-term debt outstanding at June 30, 1996. At June 30, 1996,
the Company had approval from the Rural Telephone Bank to borrow $17.6
million in additional Rural Utilities Service debt for certain
construction projects.
The Company has an agreement that allows temporary cash advances to or
from its parent, Holdings. Interest rates on advances from Holdings
are based on Holdings' cost of short-term funds plus 3/8 percent.
Interest rates on advances to Holdings are based on Holdings' cost of
short-term funds. At June 30, 1996, $28.7 million was due from Holdings
for amounts to be paid to dissenters relating to the minority buy-out.
(See Note 2 to the Consolidated Financial Statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995
for more information about this note.)
Any temporary cash or liquidity requirements during 1996 are expected
to be met through utilization of funds available under the revolving
credit agreement or temporary advances from Holdings. Long-term
liquidity requirements are expected to be met through utilization
of funds available under the revolving credit agreement or the Series
C Medium-term Note program. Cash needed to pay dissenters' rights
will be provided by Holdings.
-10-
<PAGE>
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
12 Statements re Computation of Ratios
27 Financial Data Schedule (filed electronically only)
(b) Reports on Form 8-K
None
-11-
<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.
Pacific Telecom, Inc.
______________________
(Registrant)
Date: August 9, 1996 /s/James H. Huesgen
____________________________
James H. Huesgen
Executive Vice President and
Chief Financial Officer
-12-
<PAGE>
<TABLE>
EXHIBIT 12
Pacific Telecom, Inc.
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in millions)
<CAPTION>
Six
Months
Ended Year Ended December 31,
June 30, __________________________________
1996 1995 1994 1993 1992 1991
________ _____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined*:
Income from continuing operations
before income taxes $55.7 $186.6 $122.2 $ 82.9 $ 99.8 $120.4
Add:
Fixed charges 23.4 54.5 48.6 59.5 63.2 67.7
Equity losses of less than 50%
owned persons - - - - 0.9 0.5
Minority interest 1.1 1.3 1 0.6 0.1 2.0
_____ _____ _____ _____ _____ _____
Total earnings $80.2 $242.4 $171.8 $143.0 $164.0 $190.6
_____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____
Fixed charges:
Interest $20.6 $42.3 $34.7 $44.3 $52.1 $55.0
Interest portion of
rental expense 2.8 12.2 13.9 15.2 11.1 12.7
____ ____ ____ ____ ____ ____
Total fixed charges $23.4 $54.5 $48.6 $59.5 $63.2 $67.7
____ ____ ____ ____ ____ ____
____ ____ ____ ____ ____ ____
Ratio of earnings to fixed charges 3.4 4.4 3.5 2.4 2.6 2.8
____ ____ ____ ____ ____ ____
____ ____ ____ ____ ____ ____
</TABLE>
[FN]
* For the purpose of computing these ratios, "earnings" represents the
aggregate of (a) income from continuing operations before income taxes,
(b) fixed charges,(c) equity losses of less than 50% owned persons and
(d) minority interest. Equity losses of less than 50% owned persons are
added to income from continuing operations before income taxes since the
Company does not guarantee the debt of such persons. "Fixed Charges"
consist of interest charges and an estimated amount representing the
interest portion of rental expense.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE PACIFIC
TELECOM, INC. FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 907766
<OTHER-PROPERTY-AND-INVEST> 143650
<TOTAL-CURRENT-ASSETS> 234336
<TOTAL-DEFERRED-CHARGES> 16204
<OTHER-ASSETS> 372519
<TOTAL-ASSETS> 1674475
<COMMON> 0
<CAPITAL-SURPLUS-PAID-IN> 225943
<RETAINED-EARNINGS> 537216
<TOTAL-COMMON-STOCKHOLDERS-EQ> 763159
0
0
<LONG-TERM-DEBT-NET> 382717
<SHORT-TERM-NOTES> 73000
<LONG-TERM-NOTES-PAYABLE> 75000
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 5712
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 374887
<TOT-CAPITALIZATION-AND-LIAB> 1674475
<GROSS-OPERATING-REVENUE> 253929
<INCOME-TAX-EXPENSE> 21686
<OTHER-OPERATING-EXPENSES> 180660
<TOTAL-OPERATING-EXPENSES> 202346
<OPERATING-INCOME-LOSS> 51583
<OTHER-INCOME-NET> 3085
<INCOME-BEFORE-INTEREST-EXPEN> 54668
<TOTAL-INTEREST-EXPENSE> 20607
<NET-INCOME> 34061
0
<EARNINGS-AVAILABLE-FOR-COMM> 34061
<COMMON-STOCK-DIVIDENDS> 26317
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 102465
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
