LONG-TERM DEBT INTEREST RATES NEW ISSUES VS. AVERAGE RATE GTE Telephone Operations

COMPARISON OF PRE-TAX
INTEREST COVERAGE
Telephone and Electric Utilities
1967-1976

1967 '68 '69 '70 '71 '72 73 74 75 76

(est.)

Source: AT&T, Moody's Investors Service, Inc., U.S.I.T.A.

CHART 10

1967 '68 '69 70 71 72 73 74 75 76

Source: Standard and Poor's Analysts Handbook

CHART 11

TAX LAWS FAVOR HIGH GROWTH, LOW DIVIDEND INVESTMENTS
OVER LOW GROWTH, HIGH DIVIDEND INVESTMENTS

* Assumes a 30% tax bracket, and therefore a 15% capital gain tax
** Assumes reinvestment of appreciation and after tax dividends

CHART 12