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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 [Fee Required}
or
For the fiscal year ended December 31, 1993
---------------------------------------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
For the transition period from to
----------------------- --------------------
Commission File Number 1-6417
-------------------------------------------------------
GTE CALIFORNIA INCORPORATED
- ------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 95-0510200
- --------------------------------------- -------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
One GTE Place, Thousand Oaks, California 91362-3811
- -------------------------------------------------- -----------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code 805-372-6000
---------------------------
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH WAS REGISTERED
- ---------------------------------- -------------------------------------
FIRST MORTGAGE BONDS--SERIES X, PACIFIC STOCK EXCHANGE
DUE DECEMBER 1, 2001
- ---------------------------------- -------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
4 1/2% SERIES CUMULATIVE PREFERRED STOCK $20 PAR VALUE
4 1/2% SERIES CUMULATIVE PREFERRED STOCK $20 PAR VALUE
5 % SERIES CUMULATIVE PREFERRED STOCK $20 PAR VALUE
7.48 % SERIES CUMULATIVE PREFERRED STOCK $100 PAR VALUE
- -------------------------------------------------------------------
(TITLE OF CLASS)
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO
THIS FORM 10-K. X
-----
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
------ ------
THE COMPANY HAD 69,438,190 SHARES OF $20 PAR VALUE COMMON STOCK OUTSTANDING AT
FEBRUARY 28, 1994.
THE AGGREGATE MARKET VALUE OF THE REGISTRANT'S VOTING PREFERRED STOCK HELD BY
NON-AFFILIATES AT FEBRUARY 28, 1994, AMOUNTED TO $3,467,459.
DOCUMENTS INCORPORATED BY REFERENCE
ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1993
(INCORPORATED IN PARTS I AND II).
PROXY STATEMENT FOR THE ELECTION OF DIRECTORS DATED MARCH 22, 1994
(INCORPORATED IN PARTS III AND IV).
TABLE OF CONTENTS
Item Page
- ----- ----
PART I
1. Business 1
2. Properties 4
3. Legal Proceedings 4
4. Submission of Matters to a Vote of Security Holders 4
PART II
5. Market for the Registrant's Common Equity and Related
Shareholder Matters 5
6. Selected Financial Data 5
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
8. Financial Statements and Supplementary Data 5
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 5
PART III
10. Directors and Executive Officers of the Registrant 6
11. Executive Compensation 8
12. Security Ownership of Certain Beneficial Owners and
Management 8
13. Certain Relationships and Related Transactions 8
PART IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K 9
PART I
Item 1. Business
GTE California Incorporated (the Company), was incorporated in California in
1929. The Company is a wholly-owned subsidiary of GTE Corporation (GTE) and
provides communications services in Southern and Central California.
The Company has a wholly-owned subsidiary, GTEL. GTEL comprises the majority
of the Company's nonregulated operations including marketing telecommunications
equipment and other deregulated products and services.
The Company provides local telephone service within its franchise area and
intraLATA (Local Access Transport Area) long distance service between the
Company's facilities and the facilities of other telephone companies within the
Company's LATAs. InterLATA service to other points in and out of California is
provided through connection with interexchange (long distance) common carriers.
These common carriers are charged fees (access charges) for interconnection to
the Company's local facilities. End user business and residential customers
are also charged access charges for access to the facilities of the long
distance carriers. The Company also earns other revenues by leasing
interexchange plant facilities and providing such services as billing and
collection and operator services to interexchange carriers, primarily the
American Telephone and Telegraph Company (AT&T). The number of access lines
served has grown steadily from 3,213,645 on January 1, 1989 to 3,714,570 on
December 31, 1993.
The Company's principal line of business is providing telecommunication
services. These services fall into five major classes: local network, network
access, long distance, equipment sales and services and other. Revenues from
each of these classes over the last three years are as follows:
Years Ended December 31
-----------------------------------------
1993 1992 1991
---------- ---------- ----------
(Thousands of Dollars)
Local Network Services $ 975,780 $ 937,797 $ 960,224
% of Total Revenues 34% 32% 32%
Network Access Services $ 616,122 $ 663,154 $ 667,525
% of Total Revenues 21% 23% 23%
Long Distance Services $1,003,154 $1,022,330 $1,010,236
% of Total Revenues 35% 35% 34%
Equipment Sales and Services $ 163,546 $ 180,281 $ 177,891
% of Total Revenues 6% 6% 6%
Other $ 116,176 $ 117,456 $ 148,167
% of Total Revenues 4% 4% 5%
At December 31, 1993, the Company had 14,379 employees. The Company has
written agreements with the Communications Workers of America (CWA) covering
substantially all hourly employees. The current agreements with the CWA expire
in March 1996.
Telephone Competition
The Company holds franchises, licenses and permits adequate for the conduct of
its business in the territories which it serves.
The Company is subject to regulation by the California Public Utilities
Commission (CPUC) as to its intrastate business operations and by the Federal
Communications Commission (FCC) as to its interstate business operations.
Information regarding the Company's activities with the various regulatory
agencies and revenue arrangements with other telephone companies can be found
in Note 10 of the Company's Annual Report to Shareholders for the year ended
December 31, 1993, incorporated herein and filed as Exhibit 13.
The year was marked by important changes in the U.S. telecommunications
industry. Rapid advances in technology, together with government and industry
initiatives to eliminate certain legal and regulatory barriers are accelerating
and expanding the level of competition and opportunities available to the
Company. As a result, the Company faces increasing competition in virtually
all aspects of its business. Specialized communications companies have
constructed new systems in certain markets to bypass the local-exchange
network. Additional competition from interexchange carriers as well as
wireless companies continues to evolve for both intrastate and interstate
communications.
During 1994, the Company began implementation of a re-engineering plan that
will redesign and streamline processes. Implementation of its re-engineering
plan will allow the Company to continue to respond aggressively to these
competitive and regulatory developments through reduced costs, improved service
quality, competitive prices and new product offerings. Moreover,
implementation of this program will position the Company to accelerate delivery
of a full array of voice, video and data services. The re-engineering program
will be implemented over three years. During the year, the Company continued
to introduce new business and consumer services utilizing advanced technology,
offering new features and pricing options while at the same time reducing costs
and prices.
During 1993, the FCC announced its decision to auction licenses during 1994 in
51 major markets and 492 basic trading areas across the United States to
encourage the development of a new generation of wireless personal
communications services (PCS). These services will both complement and compete
with the Company's traditional wireline services. The Company will be
permitted to fully participate in the license auctions in areas outside of
GTE's existing cellular service areas. Limited participation will be permitted
in areas in which GTE has an existing cellular presence.
In Cerritos, California, GTE is testing and comparing the capabilities of
copper wire, coaxial cable, and fiber optics. The Cerritos test has enhanced
GTE's expertise in the areas of pay-per-view video service, video-on-demand and
local video conferencing, and led to a new interactive video service, GTE Main
Street, TM which allows customers to shop, bank and access various other
information services from their homes. In 1992, the FCC issued a "video
dialtone" ruling that allows telephone companies to transmit video signals over
their networks. The FCC also recommended that Congress amend the Cable Act of
1984 to permit telephone companies to supply video programming in their service
areas.
During 1993, the CPUC approved a settlement agreement allowing the Company,
beginning in 1994, to retain 100% of any earnings up to a 15.5% rate of return
on investment while refunding 100% of any earnings above 15.5%. Under its
prior plan, the Company was required to share 50% of any earnings over a 13%
rate of return and refund 100% of any earnings over 16.5%. As part of this
agreement and its normal annual price cap filing, the Company will reduce its
rates by about $100 million in 1994. Additionally, the CPUC is expected to
issue a final decision in early 1994 generally authorizing intralata toll
competition and ordering significant rate restructuring in California.
Although intended to be revenue neutral, the ultimate effect on revenue will
depend, in part, on the extent to which toll and access rate reductions result
in increased calling volumes.
The GTE Consent Decree, which was issued in connection with the 1983
acquisition of GTE Sprint (since divested) and GTE Spacenet, prohibits GTE's
domestic telephone operating subsidiaries from providing long distance service
beyond the boundaries of the LATA. This prohibition restricts their direct
provision of long distance service to relatively short distances. The degree
of competition allowed in the intraLATA market is subject to state regulation.
However, regulatory constraints on intraLATA competition will gradually be
relaxed.
In September 1993, the FCC released an order allowing competing carriers to
interconnect to the local-exchange network for the purpose of providing
switched access transport services. This ruling complements similar
interconnect arrangements for private line services ordered during 1992. The
order encourages competition for the transport of telecommunications traffic
between local exchange carriers' (LECs) switching offices and interexchange
carrier locations. In addition, the order allows LECs flexibility in pricing
competitive services.
These and other actions to eliminate existing legal and regulatory barriers,
together with rapid advances in technology, are facilitating a convergence of
the computer, media and telecommunications industries. In addition to allowing
new forms of competition, these developments are also creating new
opportunities to develop interactive communications networks. The Company
supports these initiatives to assure greater competition in telecommunications,
provided that overall the changes allow an opportunity for all service
providers to participate equally in a competitive marketplace under comparable
conditions.
Item 2. Properties
The Company's property consists of network facilities (82%), company facilities
(14%), customer premises equipment (1%) and other (3%). From January 1, 1989
to December 31, 1993, the Company made gross property additions of $2.8 billion
and property retirements of $1.8 billion. Substantially all of the Company's
property is subject to liens securing long-term debt. In the opinion of
management, the Company's telephone plant is substantially in good repair.
Item 3. Legal Proceedings
There are no pending legal proceedings, either for or against the Company,
which would have a material impact on the Company's financial statements.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters
Market information is omitted since the Company's common stock is wholly-owned
by GTE Corporation.
Item 6. Selected Financial Data
Reference is made to the Registrant's Annual Report to Shareholders, page 32,
for the year ended December 31, 1993, incorporated herein and filed as Exhibit
13.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Reference is made to the Registrant's Annual Report to Shareholders, pages 27
to 31, for the year ended December 31, 1993, incorporated herein and filed as
Exhibit 13.
Item 8. Financial Statements and Supplementary Data
Reference is made to the Registrant's Annual Report to Shareholders, pages 5 to
25, for the year ended December 31, 1993, incorporated herein and filed as
Exhibit 13.
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
Reference is made to the Registrant's Proxy Statement, dated March 22, 1994,
pages 3 to 4, incorporated herein and filed as Exhibit 13A. A complete list of
Executive Officers of the Registrant as of March 1, 1994 is provided below.
Identification of Executive Officers
Year
Assumed
Current
Name Age Position Position with Company
- --------------------------- ---- -------- ----------------------
Larry J. Sparrow (1) 50 1992 Area President - West
Susan L. Clay (2) 48 1993 Acting Regional Vice
President - General
Manager - California
Clark M. Crawford (1) 47 1990 Area Vice President -
General Manager
Jorge Jackson (1)(3) 49 1993 Area Vice President -
Public Affairs
Timothy J. McCallion (1)(4) 40 1993 Area Vice President -
Regulatory and
Governmental Affairs
Robert G. McCoy (1) 49 1992 Area Vice President -
Sales
Richard J. Nordman (1)(5) 44 1993 Area Vice President -
Finance
Kenneth K. Okel (1) 47 1991 Area Vice President -
General Counsel and
Secretary
Ronald E. Pejsa (1)(6) 49 1993 Area Vice President -
Human Resources
Position with
GTE Telephone Operations (7)
----------------------------
Kent B. Foster 50 1989 President
Michael B. Esstman (8) 47 1993 Executive Vice President
- Operations
Thomas W. White 47 1989 Executive Vice President
Guillermo Amore 55 1990 Senior Vice President -
International
Gerald K. Dinsmore (9) 44 1993 Senior Vice President -
Finance and Planning
Robert C. Calafell (10) 52 1993 Vice President - Video
Services
A. T. Jones 54 1992 Vice President -
International
Brad M. Krall (11) 52 1993 Vice President -
Centralized Services
Donald A. Hayes 56 1992 Vice President -
Information Technology
Richard L. Schaulin 51 1989 Vice President - Human
Resources
Clarence F. Bercher 50 1991 Vice President - Sales
Mark S. Feighner 45 1991 Vice President - Product
Management
Geoff C. Gould 41 1989 Vice President -
Regulatory and
Governmental Affairs
G. Bruce Redditt 43 1991 Vice President - Public
Affairs
Richard M. Cahill 55 1989 Vice President and
General Counsel
Leland W. Schmidt 60 1989 Vice President - Industry
Affairs
Paul E. Miner 49 1990 Vice President - Regional
Operations Support
Katherine J. Harless 43 1992 Vice President -
Intermediary Markets
William M. Edwards, III(12) 45 1993 Controller
Each of these executive officers has been an employee of the Company or an
affiliated company for the last five years.
Except for duly elected officers and directors, no other employee had a
significant role in decision making.
All officers are appointed for a term of one year.
NOTES:
(1) Individual is an executive officer for West Area which is comprised of
GTE California Incorporated, GTE Hawaiian Telephone Company Incorporated
and GTE Northwest Incorporated.
(2) Susan L. Clay is Acting Regional Vice President - General Manager -
California replacing John C. Appel who was appointed President of GTE
Southwest Incorporated.
(3) Jorge Jackson was appointed Area Vice President - Public Affairs
effective November 21, 1993 to replace Jim J. Parrish who retired.
(4) Timothy J. McCallion was appointed Area Vice President - Regulatory and
Governmental Affairs effective November 21, 1993 replacing Keith M.
Kramer who retired.
(5) Richard J. Nordman was appointed Area Vice President - Finance effective
November 7, 1993 replacing Paul R. Shuell.
(6) Ronald E. Pejsa was appointed Area Vice President - Human Resources
effective October 24, 1993 replacing James R. Poling who retired.
(7) Position is with, and duties are performed at, the GTE Telephone
Operations Headquarters in Irving, Texas.
(8) Michael B. Esstman was appointed Executive Vice President - Operations
effective April 25, 1993 replacing Charles A. Crain who retired on April
1, 1993.
(9) Gerald K. Dinsmore, previously South Area President, was appointed
Senior Vice President - Finance and Planning replacing John L. Hume who
retired.
(10) Robert C. Calafell was appointed Vice President - Video Services
effective March 28, 1993.
(11) Brad M. Krall was appointed Vice President - Centralized Services
effective November 7, 1993.
(12) William M. Edwards, III was appointed Controller effective November 7,
1993 replacing John D. Utzinger.
William E. Starkey retired November 21, 1993, George N. King retired May 21,
1993 and Clark W. Barlow retired August 21, 1993.
William D. Wilson resigned effective November 1, 1993 to accept a new position
in GTE South Incorporated and GTE North Incorporated as Area Vice President -
General Manager - East.
Jerry L. Austin retired November 21, 1993.
Item 11. Executive Compensation
Reference is made to the Registrant's Proxy Statement, dated March 22, 1994,
pages 5 to 13, incorporated herein and filed as Exhibit 13A.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Reference is made to the Registrant's Proxy Statement, dated March 22, 1994,
page 14, incorporated herein and filed as Exhibit 13A.
Item 13. Certain Relationships and Related Transactions
Reference is made to the Registrant's Proxy Statement, dated March 22, 1994,
pages 3 to 5 and 13, incorporated herein and filed as Exhibit 13A.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements - Reference is made to the Registrant's Annual
Report to Shareholders, pages 5 - 25, for the year ended December 31,
1993, incorporated herein and filed as Exhibit 13.
Report of Independent Public Accountants.
Consolidated Balance Sheets - December 31, 1993 and 1992.
Consolidated Statements of Income for the years ended December 31,
1993-1991.
Consolidated Statements of Reinvested Earnings for the years ended
December 31, 1993-1991.
Consolidated Statements of Cash Flows for the years ended December 31,
1993-1991.
Notes to Consolidated Financial Statements.
(2) Financial Statement Schedules - Included in Part IV of this report for
the years ended December 31, 1993-1991:
Page(s)
-------
Report of Independent Public Accountants 11
Schedules:
V - Property, Plant and Equipment 12-14
VI - Accumulated Depreciation and Amortization of
Property, Plant and Equipment 15
VIII - Valuation and Qualifying Accounts 16
X - Supplementary Income Statement Information 17
Note: Schedules other than those listed above are omitted as not applicable,
not required, or the information is included in the financial statements
or notes thereto.
(3) Exhibits - Included in this report or incorporated by reference.
2-1* Agreement of Merger, dated September 10, 1992, between GTE
California Incorporated and Contel of California, Inc.
3* Articles of Incorporation and Bylaws (Exhibit 3 of the 1988 Form
10-K, File No. 1-6417).
4-1* Indenture dated December 1, 1939, between the Company and
Security-First National Bank of Los Angeles, now named Security
Pacific National Bank, Trustee, (Exhibit 7-A, File No. 2-4262), as
supplemented by fifty-one supplemental indentures or deeds of
conveyance (Filed as exhibits to the Form 10-K's for the years
1970, 1971, 1981, 1985 and 1986) and File No. 33-54788 in 1992.
12 Statement of the ratio of earnings to fixed charges.
13 Annual Report to Shareholders for the year ended December 31,
1993, filed herein as Exhibit 13.
13A Proxy Statement for the election of directors dated March 22,
1994, filed herein as Exhibit 13A.
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
fourth quarter of 1993.
* Denotes exhibits incorporated herein by reference to previous filings
with the Securities and Exchange Commission as designated.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To GTE California Incorporated:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in GTE California Incorporated and
subsidiary's annual report to shareholders incorporated by reference in this
Form 10-K, and have issued our report thereon dated January 28, 1994. Our
report on the consolidated financial statements includes an explanatory
paragraph with respect to the change in the method of accounting for income
taxes in 1992 as discussed in Note 1 to the consolidated financial statements.
Our audit was made for the purpose of forming an opinion on those statements
taken as a whole. The schedules listed under Item 14 are the responsibility of
the Company's management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN & CO.
Dallas, Texas
January 28, 1994.
GTE CALIFORNIA INCORPORATED AND SUBSIDIARY
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
----------------- ----------- ----------- ----------- ------------- -----------
Balance at Additions Retirements Other Debits Balance at
Beginning of at or Sales or (Credits) Close of
Classification Year Cost (Note 1) (Note 2) Year
- ----------------------------------------------------------------------------------------------------------
TELEPHONE PLANT, stated at original cost:
Land $ 58,495 $ 1,390 $ -- $ (613) $ 59,272
Buildings 651,604 16,340 2,019 (606) 665,319
Central office equipment 2,750,186 226,447 63,119 (1,639) 2,911,875
Station apparatus 104,215 8,693 2,369 (219) 110,320
Cable, underground conduit and
poles 3,604,984 199,010 23,233 1,784 3,782,545
Furniture and office equipment 310,940 20,958 126,561 3,295 208,632
Vehicles and other work equipment 223,632 6,995 4,168 (426) 226,033
Telephone plant under
construction 98,906 17,036 -- -- 115,942
---------- -------- -------- -------- ----------
Total Telephone Plant 7,802,962 496,869 221,469 1,576 8,079,938
NONREGULATED PLANT 137,120 7,081 6,271 (2,748) 135,182
---------- -------- -------- -------- ----------
Total Property, Plant and
Equipment $7,940,082 $ 503,950 $227,740 $ (1,172) $8,215,120
========== ========= ======== ======== ==========
NOTES:
(1) All retirements or sales in Column D were charged to accumulated
depreciation (Schedule VI, Note 2).
(2) Primarily represents retirements not charged to reserve and transfers in
accordance with FCC Docket No. 86-111.
GTE CALIFORNIA INCORPORATED AND SUBSIDIARY
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
----------------- ----------- ----------- ----------- ------------- -----------
Balance at Additions Retirements Other Debits Balance at
Beginning of at or Sales or (Credits) Close of
Classification Year Cost (Note 1) (Note 2) Year
- ----------------------------------------------------------------------------------------------------------
TELEPHONE PLANT, stated at original cost:
Land $ 56,366 $ 2,431 $ -- $ (302) $ 58,495
Buildings 625,737 33,680 3,528 (4,285) 651,604
Central office equipment 2,673,804 295,926 241,848 22,304 2,750,186
Station apparatus 87,909 17,984 2,656 978 104,215
Cable, underground conduit and
poles 3,412,646 232,011 52,967 13,294 3,604,984
Furniture and office equipment 339,998 23,403 47,599 (4,862) 310,940
Vehicles and other work equipment 217,273 13,424 8,205 1,140 223,632
Telephone plant under
construction 189,431 (90,662) -- 137 98,906
Property held for future
telephone use 738 (750) -- 12 --
---------- -------- -------- --------- ----------
Total Telephone Plant and
Equipment 7,603,902 527,447 356,803 28,416 7,802,962
NONREGULATED PLANT 128,889 8,588 10,077 9,720 137,120
---------- -------- -------- --------- ----------
Total Property, Plant and
Equipment $ 7,732,791 $ 536,035 $366,880 $ 38,136 $7,940,082
=========== ========= ======== ======== ==========
NOTES:
(1) All retirements or sales in Column D were charged to accumulated
depreciation (Schedule VI, Note 2).
(2) Represents adjustments in 1992 due to the adoption of SFAS No. 109,
retirements not charged to reserve and transfers in
accordance with FCC Docket No. 86-111.
GTE CALIFORNIA INCORPORATED AND SUBSIDIARY
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
----------------- ----------- ----------- ----------- ------------- -----------
Balance at Additions Retirements Other Debits Balance at
Beginning of at or Sales or (Credits) Close of
Classification Year Cost (Note 1) (Note 2) Year
- ----------------------------------------------------------------------------------------------------------
TELEPHONE PLANT, stated at original cost:
Land $ 55,943 $ 421 $ -- $ 2 $ 56,366
Buildings 608,216 19,935 2,598 184 625,737
Central office equipment 2,743,935 203,955 274,084 (2) 2,673,804
Station apparatus 84,619 3,858 568 -- 87,909
Station connections 415,652 -- 415,652 -- --
Cable, underground conduit and
poles 3,189,625 282,816 59,795 -- 3,412,646
Furniture and office equipment 320,709 22,482 2,928 (265) 339,998
Vehicles and other work equipment 201,482 22,241 7,003 553 217,273
Telephone plant under construction 164,270 25,544 -- (383) 189,431
Property held for future telephone
use 737 -- -- 1 738
---------- -------- -------- --------- ----------
Total Telephone Plant 7,785,188 581,252 762,628 90 7,603,902
NONREGULATED PLANT 113,360 19,984 4,365 (90) 128,889
---------- -------- -------- --------- ----------
Total Property, Plant and
Equipment $7,898,548 $601,236 $766,993 $ -- $7,732,791
========== ======== ======== ========= ==========
NOTES:
(1) Represents: All retirements or sales in Column D were charged to
accumulated depreciation (Schedule VI, Note 2).
Retirements include write-offs of customer premises equipment due
to deregulation by the FCC.
(2) Primarily represents prior-year adjustments to conform to the current
year presentation and transfers in accordance with FCC Docket No. 86-
111.
GTE CALIFORNIA INCORPORATED AND SUBSIDIARY
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
--------------- -------------- ----------- ----------- ------------ -----------
Additions
Balance at Charged to Retirements Other Balance at
Beginning of Income or Sales Charges Close of
Description Year (Note 1) (Note 2) (Note 2) Year
- ---------------------------------------------------------------------------------------------------------
Accumulated depreciation and
amortization for the year ended:
December 31, 1993 $2,900,851 $ 582,361 $ 221,940 $ (8,531) $ 3,252,741
========== ========== =========== ============ ===========
December 31, 1992 $2,701,079 $ 561,345 $ 366,885 $ 5,312 $ 2,900,851
========== ========== =========== ============ ===========
December 31, 1991 $2,874,304 $ 592,232 $ 766,517 $ 1,060 $ 2,701,079
========== ========== =========== ============ ===========
NOTES:
(1) Reference is made to Note 1 of Notes to Consolidated Financial
Statements with respect to depreciation policy: 1993 1992 1991
----------- ----------- -----------
Total as shown in Consolidated Statements of Income $ 583,066 $ 563,540 $ 591,287
General office allocations (705) (1,235) 220
Other -- (960) 725
----------- ----------- -----------
Total as shown above $ 582,361 $ 561,345 $ 592,232
=========== =========== ===========
(2) Represents: Retirements or sales credited to property, plant
and equipment (Schedule V) $ 227,740 $ 366,880 $ 766,993
Other (5,800) 5 (476)
----------- ----------- -----------
Total as shown above $ 221,940 $ 366,885 $ 766,517
=========== =========== ===========
(3) Represents: Salvage $ 13,969 $ 14,517 $ 12,720
Removal costs (17,095) (26,877) (12,341)
Other (5,405) 17,672 681
----------- ----------- -----------
Total as shown above $ (8,531) $ 5,312 $ 1,060
=========== =========== ===========
GTE CALIFORNIA INCORPORATED AND SUBSIDIARY
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
-------------- ------------- ---------------------- ------------ ------------
Additions
----------------------
Charged Deductions
Balance at Charged to Other from Balance at
Beginning to Accounts Reserves Close of
Description of Year Income (Note 1) (Note 2) Year
- ----------------------------------------------------------------------------------------------------------
Allowance for uncollectible accounts
for the year ended:
December 31, 1993 $ 20,752 $ 85,365 $ 21,209 $ 75,346 $ 51,980
======== ======== ======== ======== ========
December 31, 1992 $ 11,711 $ 83,779 $ 14,993 $ 89,731 $ 20,752
======== ======== ======== ======== ========
December 31, 1991 $ 7,946 $ 80,249 $ 15,770 $ 92,254 $ 11,711
======== ======== ======== ======== ========
NOTES:
(1) Recoveries of previously written-off amounts.
(2) Charges for purpose for which reserve was created.
Represents write-offs of receivable accounts.
GTE CALIFORNIA INCORPORATED AND SUBSIDIARY
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------
Column A Column B
--------------- ---------------------------------------------
Item Charged to Operating Expenses
- ------------------------------------------------------------------------------------------
1993 1992 1991
----------- ----------- -----------
Maintenance and repairs $ 479,847 $ 449,182 $ 477,754
=========== =========== ===========
Taxes, other than payroll and income taxes,
are as follows:
Real and personal property $ 59,848 $ 62,106 $ 63,133
Other 1,676 1,862 (3,760)
Portion of above taxes charged
to plant and other accounts (8,747) (8,880) (8,432)
----------- ----------- -----------
Total $ 52,777 $ 55,088 $ 50,941
=========== =========== ===========
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.
GTE CALIFORNIA INCORPORATED
--------------------------------------
(Registrant)
Date March 21, 1994 By LARRY J. SPARROW
------------------------- ---------------------------------------
LARRY J. SPARROW
Area President - West
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report is signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
LARRY J. SPARROW President and Director March 21, 1994
- ------------------------- (Principal Executive Officer)
LARRY J. SPARROW
GERALD K. DINSMORE Senior Vice President - Finance March 21, 1994
- ------------------------- and Planning and Director
GERALD K. DINSMORE (Principal Financial Officer)
WILLIAM M. EDWARDS, III Controller March 21, 1994
- ------------------------- (Principal Accounting Officer)
WILLIAM M. EDWARDS, III
RICHARD M. CAHILL Director March 21, 1994
- -------------------------
RICHARD M. CAHILL
CLARK MICHAEL CRAWFORD Director March 21, 1994
- -------------------------
CLARK MICHAEL CRAWFORD
MICHAEL B. ESSTMAN Director March 21, 1994
- -------------------------
MICHAEL B. ESSTMAN
KENT B. FOSTER Director March 21, 1994
- -------------------------
KENT B. FOSTER
THOMAS W. WHITE Director March 21, 1994
- -------------------------
THOMAS W. WHITE