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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,
D.C. 20549





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FORM 10-Q



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|(Mark one) |  |                                                                                                                                       |  | 
|---------- |  | ------------------------------------------------------------------------------------------------------------------------------------- |  | 
|          
|x          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 |  | 
|          
|           |  | 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 1-6964





VERIZON VIRGINIA INC.





|A Virginia Corporation |  | I.R.S. Employer Identification No. 54-0167060
|---------------------- |  | ---------------------------------------------





600 East Main Street, Richmond, Virginia 23219



Telephone Number (804) 225-6300





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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 REDUCED
DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTION H(2).



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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes ̈No  x



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TABLE OF CONTENTS



|               |  |                                                                               |  | Page
|-------------- |  | ----------------------------------------------------------------------------- |  | ----
|              
|PART I         |  | Financial Information                                                         |  |     
|              
|Item 1.        |  | Financial Statements                                                          |  |     
|              
|               |  | Condensed Statements of Income Three Months Ended March 31, 2003 and 2002     |  | 1   
|              
|               |  | Condensed Balance Sheets March 31, 2003 and December 31, 2002                 |  | 2   
|              
|               |  | Condensed Statements of Cash Flows Three Months Ended March 31, 2003 and 2002 |  | 4   
|              
|               |  | Notes to Condensed Financial Statements                                       |  | 5   
|              
|Item 2.        |  | Managements Discussion and Analysis of Results of Operations                 |  | 9   
|              
|Item 4.        |  | Controls and Procedures                                                       |  | 16  
|              
|PART II        |  | Other Information                                                             |  |     
|              
|Item 6.        |  | Exhibits and Reports on Form 8-K                                              |  | 17  
|              
|Signatures     |  | 18                                                                           
|              
|Certifications |  | 19                                                                           
|              
|Exhibit Index  |  | 21                                                                           







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PART I  FINANCIAL
INFORMATION



|Item 1. |  | Financial Statements
|------- |  | --------------------





CONDENSED STATEMENTS OF INCOME



|                                                                                                 |  | Three Months Ended March 31, |      
|------------------------------------------------------------------------------------------------ |  | ---------------------------- | -----
|(Dollars in Millions) (Unaudited)                                                                |  | 2003                         |      
|                                                                                                
|Operating Revenues (including $33.0 and $27.0 from affiliates)                                   |  | $                            | 563.4
|                                                                                                 |  |                              |      
|                                                                                                
|Operating Expenses (including $130.9 and $120.1 to affiliates)                                   |  |                              |      
|Cost of services and sales (exclusive of items shown below)                                      |  |                              | 155.3
|Selling, general and administrative expense                                                      |  |                              | 127.1
|Depreciation and amortization                                                                    |  |                              | 135.9
|                                                                                                 |  |                              |      
|Total Operating Expenses                                                                         |  |                              | 418.3
|                                                                                                 |  |                              |      
|                                                                                                
|Operating Income                                                                                 |  |                              | 145.1
|                                                                                                
|Other income and (expense), net (including $(23.0) and $.1 from
affiliates)                      |  |                              | (22.6
|                                                                                                
|Interest expense (including $2.1 and $3.7 to affiliate)                                          |  |                              | 15.6 
|                                                                                                 |  |                              |      
|                                                                                                
|Income before provision for income taxes and cumulative effect of change in accounting
principle |  |                              | 106.9
|                                                                                                
|Provision for income taxes                                                                       |  |                              | 50.2 
|                                                                                                 |  |                              |      
|                                                                                                
|Income Before Cumulative Effect of Change in Accounting Principle                                |  |                              | 56.7 
|                                                                                                
|Cumulative effect of change in accounting principle, net of tax                                  |  |                              | 87.1 
|                                                                                                 |  |                              |      
|                                                                                                
|Net Income                                                                                       |  | $                            | 143.8
|                                                                                                 |  |                              |      



See Notes
to Condensed Financial Statements.



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CONDENSED BALANCE SHEETS



ASSETS



|(Dollars in Millions)                                                      |  | March 31, 2003 |         | December 31, 2002
|-------------------------------------------------------------------------- |  | -------------- | ------- | -----------------
|                                                                          
|                                                                           |  | (Unaudited)    |         |                  
|                                                                          
|Current assets                                                             |  |                |         |                  
|Short-term investments                                                     |  | $              | 43.7    |                  
|Note receivable from affiliate                                             |  |                | 223.6   |                  
|Accounts receivable:                                                       |  |                |         |                  
|Trade and other, net of allowances for uncollectibles of $158.9 and
$150.0 |  |                | 435.7   |                  
|Affiliates                                                                 |  |                | 62.4    |                  
|Material and supplies                                                      |  |                | 7.8     |                  
|Prepaid expenses                                                           |  |                | 19.4    |                  
|Deferred income taxes                                                      |  |                | 61.4    |                  
|Other                                                                      |  |                | 60.0    |                  
|                                                                           |  |                |         |                  
|                                                                           |  |                | 914.0   |                  
|                                                                           |  |                |         |                  
|Plant, property and equipment                                              |  |                | 8,198.1 |                  
|Less accumulated depreciation                                              |  |                | 4,906.5 |                  
|                                                                           |  |                |         |                  
|                                                                           |  |                | 3,291.6 |                  
|                                                                           |  |                |         |                  
|                                                                          
|Intangible assets, net                                                     |  |                | 69.5    |                  
|                                                                           |  |                |         |                  
|                                                                          
|Prepaid pension asset                                                      |  |                | 279.0   |                  
|                                                                           |  |                |         |                  
|                                                                          
|Other assets                                                               |  |                | 148.8   |                  
|                                                                           |  |                |         |                  
|                                                                          
|Total assets                                                               |  | $              | 4,702.9 |                  
|                                                                           |  |                |         |                  



See Notes
to Condensed Financial Statements.



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CONDENSED BALANCE SHEETS



LIABILITIES AND SHAREOWNERS INVESTMENT



|(Dollars in Millions)                         |  | March 31, 2003 |         |   | December 31, 2002
|--------------------------------------------- |  | -------------- | ------- | - | -----------------
|                                             
|                                              |  | (Unaudited)    |         |   |                  
|                                             
|Current liabilities                           |  |                |         |   |                  
|Debt maturing within one year:                |  |                |         |   |                  
|Note payable to affiliate                     |  | $              |        |   |                  
|Other                                         |  |                | 1.7     |   |                  
|Accounts payable and accrued liabilities:     |  |                |         |   |                  
|Affiliates                                    |  |                | 93.9    |   |                  
|Other                                         |  |                | 333.6   |   |                  
|Other current liabilities                     |  |                | 137.3   |   |                  
|                                              |  |                |         |   |                  
|                                              |  |                | 566.5   |   |                  
|                                              |  |                |         |   |                  
|                                             
|Long-term debt                                |  |                | 1,607.5 |   |                  
|                                              |  |                |         |   |                  
|                                             
|Employee benefit obligations                  |  |                | 331.1   |   |                  
|                                              |  |                |         |   |                  
|                                             
|Deferred credits and other liabilities        |  |                |         |   |                  
|Deferred income taxes                         |  |                | 475.2   |   |                  
|Unamortized investment tax credits            |  |                | 9.4     |   |                  
|Other                                         |  |                | 114.2   |   |                  
|                                              |  |                |         |   |                  
|                                              |  |                | 598.8   |   |                  
|                                              |  |                |         |   |                  
|                                             
|Shareowners investment                       |  |                |         |   |                  
|Common stock  one share, without par value   |  |                | 873.7   |   |                  
|Capital surplus                               |  |                | 97.5    |   |                  
|Reinvested earnings                           |  |                | 632.5   |   |                  
|Accumulated other comprehensive loss          |  |                | (4.7    | ) |                  
|                                              |  |                |         |   |                  
|                                              |  |                | 1,599.0 |   |                  
|                                              |  |                |         |   |                  
|                                             
|Total liabilities and shareowners investment |  | $              | 4,702.9 |   |                  
|                                              |  |                |         |   |                  



See Notes
to Condensed Financial Statements.





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CONDENSED STATEMENTS OF CASH FLOWS



|                                                                              |  | Three MonthsEnded March 31, |       
|----------------------------------------------------------------------------- |  | --------------------------- | ------
|(Dollars in Millions) (Unaudited)                                             |  | 2003                        |       
|                                                                             
|Net Cash Provided by Operating Activities                                     |  | $                           | 199.0 
|                                                                              |  |                             |       
|                                                                             
|Cash Flows from Investing Activities                                          |  |                             |       
|Capital expenditures (including capitalized network and non-network
software) |  |                             | (55.4 
|Net change in short-term investments                                          |  |                             | 21.2  
|Change in note receivable from affiliate                                      |  |                             | (223.6
|Investment in unconsolidated business                                         |  |                             | (25.4 
|Other, net                                                                    |  |                             | .2    
|                                                                              |  |                             |       
|Net cash used in investing activities                                         |  |                             | (283.0
|                                                                              |  |                             |       
|                                                                             
|Cash Flows from Financing Activities                                          |  |                             |       
|Proceeds from borrowings                                                      |  |                             | 989.0 
|Early extinguishment of debt                                                  |  |                             | (65.0 
|Principal repayments of borrowings and capital lease obligations              |  |                             | (.4   
|Change in note payable to affiliate                                           |  |                             | (780.0
|Dividends paid                                                                |  |                             | (76.0 
|Capital contribution from parent                                              |  |                             | 25.4  
|Net change in outstanding checks drawn on controlled disbursement
accounts    |  |                             | (9.0  
|                                                                              |  |                             |       
|Net cash provided by/(used in) financing activities                           |  |                             | 84.0  
|                                                                              |  |                             |       
|                                                                             
|Net change in cash                                                            |  |                             |      
|                                                                             
|Cash, beginning of period                                                     |  |                             |      
|                                                                              |  |                             |       
|                                                                             
|Cash, end of period                                                           |  | $                           |      
|                                                                              |  |                             |       



See Notes
to Condensed Financial Statements.





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NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)





1.    Basis of Presentation



Verizon Virginia Inc. is a wholly owned subsidiary of Verizon Communications Inc. (Verizon). The accompanying unaudited condensed financial statements have been prepared based upon Securities and Exchange Commission (SEC) rules that
permit reduced disclosure for interim periods. These financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial position for the interim periods shown including normal recurring
accruals. The results for the interim periods are not necessarily indicative of results for the full year. The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles for complete financial statements. For a more complete discussion of significant accounting policies and certain other information, you should refer to the financial
statements included in our 2002 Annual Report on Form 10-K.



We
have reclassified certain amounts from prior years data to conform to the 2003 presentation.





2.    Adoption of New Accounting Standards



Stock-Based Compensation



We participate in employee compensation plans sponsored by Verizon with
awards of Verizon common stock. Prior to 2003, Verizon accounted for stock-based employee compensation under Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, and
followed the disclosure-only provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation. In accordance with APB Opinion No. 25, no stock-based employee compensation expense for our
fixed stock option plans is reflected in our 2002 net income as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant.



Effective January 1, 2003, Verizon adopted the fair value recognition
provisions of SFAS No. 123, using the prospective method (as permitted under SFAS No. 148, Accounting for Stock-Based CompensationTransition and Disclosure) to all new awards granted, modified or settled after January 1, 2003.
Under the prospective method, employee compensation expense in the first year will be recognized for new awards granted, modified, or settled. The options generally vest over a term of three years, therefore the expense related to stock-based
employee compensation included in the determination of net income for the first quarter of 2003 is less than what would have been recorded if the fair value method was also applied to previously issued awards. The following table illustrates the
effect on net income if the fair value method had been applied to all outstanding and unvested options in each period:



|                                                                                                                                                     |  | Three Months Ended March 31, |      
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | -----
|(Dollars in Millions)                                                                                                                                |  | 2003                         |      
|                                                                                                                                                    
|Net income, as reported                                                                                                                              |  | $                            | 143.8
|Add: Stock option-related employee compensation expense included in reported net income,
net of related tax effects                                  |  |                              |     
|Deduct: Total stock option-related employee compensation expense determined under fair
value based method for all awards, net of related tax effects |  |                              |     
|                                                                                                                                                     |  |                              |      
|Pro forma net income                                                                                                                                 |  | $                            | 143.8
|                                                                                                                                                     |  |                              |      



After-tax compensation
expense for other stock-based compensation included in net income as reported for the three months ended March 31, 2003 and 2002 was not material.



Asset Retirement Obligations



Effective January 1, 2003, we adopted SFAS No. 143, Accounting for Asset Retirement Obligations. This standard provides the accounting for the
cost of legal obligations associated with the retirement of long-lived assets. SFAS No. 143 requires that companies recognize the fair value of a liability for asset retirement obligations in the period in which the obligations are incurred and
capitalize that amount as part of the book value of the long-lived asset. We have determined that we do not have a material legal obligation to remove long-lived assets as described by this statement. However, prior to the adoption of SFAS No. 143,
we included estimated removal costs in our group depreciation models. These costs have increased depreciation



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expense and accumulated
depreciation for future removal costs for existing assets. These removal costs were recorded as a reduction to accumulated depreciation when the assets were retired and removal costs were incurred.



For some assets, such as telephone poles, the removal costs exceeded salvage
value. Under the provisions of SFAS No. 143, we are required to exclude costs of removal from our depreciation rates for assets for which the removal costs exceed salvage. Accordingly, in connection with the initial adoption of this standard on
January 1, 2003, we have reversed accrued costs of removal in excess of salvage from our accumulated depreciation accounts for these assets. The adjustment was recorded as a cumulative effect of an accounting change, resulting in the recognition of
a gain of $142.6 million ($87.1 million after-tax). Effective January 1, 2003, we began expensing costs of removal in excess of salvage for these assets as incurred. The ongoing impact of this change in accounting resulted in a decrease in
depreciation expense and an increase in cost of services and sales, which was not material to our total operating results for the three month period ended March 31, 2003.



Debt Extinguishment



In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of
FASB Statement No. 13, and Technical Corrections. SFAS No. 145, among other things, eliminates the requirement that all gains and losses on the extinguishment of debt must be classified as extraordinary items on the income statement, thereby
permitting the classification of such gains and losses as extraordinary items only if they meet the criteria of APB Opinion No. 30, Reporting the Results of Operations  Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions. We adopted this provision of SFAS No. 145 effective January 1, 2003 and, upon adoption, reclassified the losses on the early extinguishment of debt and related tax
benefits that were previously reported in our statements of income as extraordinary items to Other expense and Provision for income taxes.





3.    Note Receivable from Affiliate



The Financial Services agreement between Verizon Network Funding Corp. (VNFC)
and us allows VNFC to collect funds on our behalf. These funds are assigned a variable interest rate and demand note basis, therefore, the carrying value of the note receivable approximates its fair market value. As of March 31, 2003, we had a note
receivable from VNFC for $223.6 million. We did not have a note receivable balance with VNFC as of December 31, 2002.





4.    Dividend



On May 1, 2003, we declared and paid a dividend in the amount of $105.0
million to our parent, Verizon.





5.    Debt



On March 6, 2003, we redeemed the entire outstanding principal amount of our $65.0 million 55/8% debentures, due March 1, 2007. There was no material impact to our results of operations due to this redemption.



On March 14, 2003, we issued $1,000.0 million in 4.625% debentures due on March 15, 2013. The proceeds from this sale of $989.0 million, net of discounts
and related costs (including a payment related to a hedge on the interest rate for the anticipated financing), were used for general corporate purposes.





6.    Shareowners Investment



|(Dollars in Millions)                               |  | Common Stock |       | Capital Surplus |   | Reinvested Earnings |  |   | Accumulated Other Comprehensive Loss |  
|--------------------------------------------------- |  | ------------ | ----- | --------------- | - | ------------------- |  | - | ------------------------------------ | -
|                                                   
|Balance at December 31, 2002                        |  | $            | 873.7 |                 | $ | 72.1                |  | $ | 564.7                                |  
|Net income                                          |  |              |       |                 |   |                     |  |   | 143.8                                |  
|Dividend declared                                   |  |              |       |                 |   |                     |  |   | (76.0                                | )
|Capital contribution from parent                    |  |              |       |                 |   | 25.4                |  |   |                                      |  
|Unrealized derivatives loss on cash flow hedge, net |  |              |       |                 |   |                     |  |   |                                      |  
|                                                    |  |              |       |                 |   |                     |  |   |                                      |  
|Balance at March 31, 2003                           |  | $            | 873.7 |                 | $ | 97.5                |  | $ | 632.5                                |  
|                                                    |  |              |       |                 |   |                     |  |   |                                      |  



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7.    Comprehensive Income



Comprehensive income consists of net income and other gains and losses affecting shareowners investment that, under generally accepted accounting principles, are excluded from net income.



The components of comprehensive income are as follows:



|                                                                |  | Three months ended March 31,
|--------------------------------------------------------------- |  | ----------------------------
|(Dollars in Millions)                                           |  | 2003                        
|                                                               
|Net income                                                      |  | $                           
|Other comprehensive income (loss):                              |  |                             
|Unrealized derivatives loss and amortization of cash flow hedge |  |                             
|                                                                |  |                             
|Total comprehensive income                                      |  | $                           
|                                                                |  |                             



Accumulated other
comprehensive loss is comprised of the following:



|(Dollars in Millions)                                               |  | March 31, 2003 |      |   | December 31, 2002
|------------------------------------------------------------------- |  | -------------- | ---- | - | -----------------
|                                                                   
|Unrealized derivatives loss on cash flow hedge, net of amortization |  | $              | (4.7 | ) |                  
|                                                                    |  |                |      |   |                  
|Accumulated other comprehensive loss                                |  | $              | (4.7 | ) |                  
|                                                                    |  |                |      |   |                  



In March 2003, we
entered into a treasury lock agreement with Verizon Global Funding Corp., an affiliate, in anticipation of the issuance of fixed-rated debt. This transaction, which met the requirements of a cash flow hedge under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, mitigated the interest rate risk associated with the subsequent issuance, on March 14, 2003, of $1,000.0 million in 4.625% debentures due on March 15, 2013 (see Note 5). The loss on the settlement
of the treasury lock transaction was recorded as an accumulated other comprehensive loss and, beginning in March 2003, is being amortized to interest expense over the 10-year term of the related debt.





8.    Investment in Verizon Ventures III Inc.



In December 2000, we transferred certain advanced data assets to an affiliated company, Verizon Ventures III Inc. (Ventures III) in exchange for common stock of Ventures III. This transfer was done to satisfy a condition of
the Federal Communications Commissions (FCC) approval of the Bell Atlantic  GTE merger, which required the provision of advanced data services through a separate affiliate. Throughout 2000 and 2001, we continued to invest in
Ventures III through the transfer of additional assets. As a result of the transfers, we acquired an ownership interest in Ventures III, which we accounted for under the equity method of accounting.



In September 2001, the FCC issued an order eliminating this merger condition.
Following the FCC order, we made necessary filings with our state regulatory commission for approval of the transfer of these assets back to us. During the fourth quarter of 2001, after required state regulatory approvals were obtained, Ventures III
transferred a portion of these assets to us with an aggregate net book value of $18.4 million. Ventures III currently expects to complete the remaining asset transfers in 2003. In consideration of the transfer of these assets, we have or will
surrender our common stock in Ventures III and remit cash compensation.



In connection with the reintegration, we received a capital contribution from our parent of $25.4 million in the first quarter of 2003. This equity was immediately contributed to Ventures III. No gain or loss was recognized as a
result of the reintegration of the advanced data assets to us. We do not expect that the reintegration will have a material effect on our total results of operations or financial condition.





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9.    Employee Severance Costs



We maintain ongoing severance plans for both management and associate employees, which provide benefits to employees that are terminated. The costs for these plans are accounted for under SFAS No. 112, Employers
Accounting for Postemployment Benefits. We accrue for severance benefits based on the terms of our severance plan over the estimated service periods of the employees. The accruals are also based on the historical run-rate of actual severances
and expectations for future severances. From time to time, because Verizons severance programs are implemented across its subsidiaries, Verizon must redistribute the amount of severance liability based on actual experience at the companies.



In the fourth quarter of 2001, it was determined that our
severance liability was not sufficient as a result of new downsizing plans and we recorded a special charge of $28.5 million. In the second quarter of 2002, again, it was determined that the severance liability was not sufficient because of further
downsizing plans and we recorded a special charge of $11.5 million. As of March 31, 2003, approximately 750 employees have been separated under the 2001 and 2002 severance programs. As of March 31, 2003, our severance liability was $36.9 million,
which includes future payments to employees previously separated under the 2001 and 2002 severance programs. During the first quarter of 2003, the companys severance liability was increased by $15.0 million for the redistribution of severance
liabilities across Verizons subsidiaries and decreased by $4.7 million principally for payments. Severance costs are included in selling, general and administrative expense in our statements of income.





10.    Intangible Assets



Our intangible assets consist of non-network software which we amortize over periods of 3 to 7 years. At March 31, 2003 and December 31, 2002, the gross carrying amount of these assets was $122.8 million and $120.9 million and the
related accumulated amortization was $53.3 million and $48.1 million, respectively. Amortization expense was $5.2 million and $4.9 million for the three months ended March 31, 2003 and 2002, respectively. Amortization expense is estimated to be
$15.4 million for the remainder of 2003, $19.2 million in 2004, $14.1 million in 2005, $10.9 million in 2006, and $6.2 million in 2007.





11.    Commitments and Contingencies



Various legal actions and regulatory proceedings are pending to which we are
a party and claims which, if asserted, may lead to other legal actions. We have established reserves for specific liabilities in connection with regulatory and legal matters that we currently deem to be probable and estimable. We do not expect that
the ultimate resolution of pending regulatory and legal matters in future periods will have a material effect on our financial condition, but it could have a material effect on our results of operations.



From time to time, state regulatory decisions require us to assure customers
that we will provide a level of service performance that falls within prescribed parameters. There are penalties associated with failing to meet those service parameters and we, from time to time, pay such penalties. We do not expect these penalties
to have a material effect on our financial condition, but they could have a material effect on our results of operations.





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|Item 2. |  | Managements Discussion and Analysis of Results of Operations
|------- |  | -------------------------------------------------------------

| |  | (Abbreviated pursuant to General Instruction H(2).)
| |  | ---------------------------------------------------



This discussion should be read in conjunction with the Condensed Financial Statements and Condensed Notes to Financial
Statements.





RESULTS OF OPERATIONS



We
reported net income of $143.8 million for the three month period ended March 31, 2003, compared to net income of $100.7 million for the same period in 2002. Our reported results included the following special item:





Cumulative Effect of Change in Accounting Principle



Effective January 1, 2003, we adopted Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. This standard provides the accounting for the cost of legal obligations
associated with the retirement of long-lived assets. SFAS No. 143 requires that companies recognize the fair value of a liability for asset retirement obligations in the period in which the obligations are incurred and capitalize that amount as part
of the book value of the long-lived asset. We have determined that we do not have a material legal obligation to remove long-lived assets as described by this statement. However, prior to the adoption of SFAS No. 143, we included estimated removal
costs in our group depreciation models. These costs have increased depreciation expense and accumulated depreciation for future removal costs for existing assets. These removal costs were recorded as a reduction to accumulated depreciation when the
assets were retired and removal costs were incurred.



For some
assets, such as telephone poles, the removal costs exceeded salvage value. Under the provisions of SFAS No. 143, we are required to exclude costs of removal from our depreciation rates for assets for which the removal costs exceed salvage.
Accordingly, in connection with the initial adoption of this standard on January 1, 2003, we have reversed accrued costs of removal in excess of salvage from our accumulated depreciation accounts for these assets. The adjustment was recorded as a
cumulative effect of an accounting change, resulting in the recognition of a gain of $142.6 million ($87.1 million after-tax). Effective January 1, 2003, we began expensing costs of removal in excess of salvage for these assets as incurred. The
ongoing impact of this change in accounting resulted in a decrease in depreciation expense and an increase in cost of services and sales, which was not material to our total operating results for the three month period ended March 31, 2003.



Income before the cumulative effect of the change in accounting
principle, decreased by $44.0 million, or 43.7% in the first quarter of 2003, compared to the first quarter of 2002, as a result of the pre-tax impact of operating revenues, operating expenses and other results as described in the following
sections.





OPERATING REVENUES

(Dollars in Millions)



|                        |  | Three Months Ended March 31,
|----------------------- |  | ----------------------------
|                        |  | 2003                        
|                       
|Local services          |  | $                           
|Network access services |  |                             
|Long distance services  |  |                             
|Other services          |  |                             
|                        |  |                             
|Total                   |  | $                           
|                        |  |                             





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LOCAL SERVICES



|2003-2002    |  | (Decrease) |      
|------------ |  | ---------- | -----
|            
|Three Months |  | $          | (17.4



Local service revenues
are earned from the provision of local exchange, local private line, wire maintenance, voice messaging and value-added services. Value-added services are a family of services that expand the utilization of the network, including products such as
Caller ID, Call Waiting and Return Call. The provision of local exchange services not only includes retail revenues, but also includes local wholesale revenues from unbundled network elements (UNEs), interconnection revenues from competitive local
exchange carriers (CLECs), certain data transport revenues and wireless interconnection revenues.



Local service revenues declined in the first three months of 2003 primarily due to lower demand and usage of our basic local wireline services. The effects of technology substitution from wireless
services and the lagging economy largely drove the decline in local service revenue growth, as reflected by a decline in switched access lines in service of 5.0% from a year ago. Regulatory pricing rules for UNEs are shifting the mix of access lines
from retail to wholesale resulting in more competition for local exchange services. These decreases were partially offset by the effect of higher billings to CLECs for the purchase of UNEs and for interconnection of their network with our network.
In addition, increased sales of packaged wireline services as a result of expanded new products and pricing plans further offset the decrease in local service revenue growth.





NETWORK ACCESS SERVICES



|2003-2002    |  | (Decrease) |     
|------------ |  | ---------- | ----
|            
|Three Months |  | $          | (4.1



Network access service
revenues are earned from end-user subscribers and from long distance and other competing carriers who use our local exchange facilities to provide usage services to their customers. Switched access revenues are derived from fixed and usage-based
charges paid by carriers for access to our local network. Special access revenues originate from carriers and end-users that buy dedicated local exchange capacity to support their private networks. End-user access revenues are earned from our
customers and from resellers who purchase dial-tone services, including digital subscriber lines (DSL).



The decrease in network access revenues in the first three months of 2003 was mainly attributable to declining switched minutes of use (MOUs). Switched MOUs declined by 12.2% from March 31, 2002,
reflecting the impact of the soft economy and wireless substitution.





LONG DISTANCE SERVICES



|2003-2002    |  | Increase |   
|------------ |  | -------- | --
|            
|Three Months |  | $        | .3



Long distance revenues
are earned primarily from calls made to points outside a customers local calling area, but within our service area (intraLATA toll). IntraLATA toll calls originate and terminate within the same LATA, but generally cover a greater distance than
a local call. These services are regulated by the Virginia State Corporate Commission except where they cross state lines. Other long distance services that we provide include 800 services and Wide Area Telephone Service (WATS). We also earn revenue
from private line and operator services associated with long distance calls.



The growth in long distance service revenues in the first three months of 2003 was principally due to increased sales of packaged wireline services as a result of expanded new products and pricing plans, resulting in customer
win-backs.



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OTHER SERVICES



|2003-2002    |  | (Decrease) |     
|------------ |  | ---------- | ----
|            
|Three Months |  | $          | (5.9



Our other services
include such services as billing and collections for long distance carriers and affiliates, facilities rentals to affiliates and nonaffiliates, public (pay) telephone, customer premises equipment (CPE) and sales of materials and supplies to
affiliates. Other service revenues also include fees paid by customers for nonpublication of telephone numbers and multiple white page listings and fees paid by an affiliate for usage of our directory listings.



Other service revenues decreased in the first three months of 2003 primarily
due to lower facilities rental revenues from affiliates and a decline in public telephone revenues as more customers substituted wireless communications for pay telephone services.





OPERATING EXPENSES

(Dollars in Millions)





COST OF SERVICES AND SALES



|2003-2002    |  | (Decrease) |     
|------------ |  | ---------- | ----
|            
|Three Months |  | $          | (3.8



Cost of services and
sales includes the following costs directly attributable to a service or product: salaries and wages, benefits, materials and supplies, contracted services, network access and transport costs, customer provisioning costs, computer systems support
and cost of products sold. Aggregate customer care costs, which include billing and service provisioning, are allocated between cost of services and sales and selling, general and administrative expense.



The decrease in cost of services and sales was primarily due to lower access
and transport costs. As part of our ongoing review of local interconnection expense charged by CLECs, we determined that selected charges from CLECs, previously recorded as expense but not paid, were no longer required and, accordingly, we adjusted
our first quarter 2003 operating expenses. In addition, effective in 2003, we recognize as local interconnection expense no more than the amount payable under the April 27, 2001 Federal Communications Commission (FCC) order addressing intercarrier
compensation for dial-up connections for Internet-bound traffic. Services and sales cost decreases in the first quarter of 2003 were also due, in part, to our disciplined expense controls, including reduced spending for contracted services and
materials and supplies, and the effect of work force reductions over the past year.



These cost decreases were substantially offset by lower net pension and other post-retirement benefit income. The company participates in Verizon Communications Inc.s (Verizon) defined pension plan and postretirement
healthcare and life insurance plans. As of December 31, 2002, Verizon changed key employee benefit plan assumptions in response to current conditions in the securities markets and medical and prescription drug costs trends. The expected rate of
return on pension plan assets has been changed from 9.25% in 2002 to 8.50% in 2003 and the expected rate of return on other postretirement benefit plan assets has been changed from 9.10% in 2002 to 8.50% in 2003. The discount rate assumption has
been lowered from 7.25% in 2002 to 6.75% in 2003 and the medical cost trend rate assumption has been increased from 10.00% in 2002 to 11.00% in 2003. For the three month period ended March 31, 2003, the company recorded pension income, net of
postretirement benefit expenses (after consideration of capitalized costs) of $7.8 million, compared to $19.8 million for the same period in 2002.



See Other Matters  Compensation for Internet Traffic for additional information on FCC rulemakings and other court decisions addressing
intercarrier compensation for dial-up connections for Internet-bound traffic.



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SELLING, GENERAL AND ADMINISTRATIVE EXPENSE



|2003-2002    |  | Increase
|------------ |  | --------
|            
|Three Months |  | $       



Selling, general and
administrative expense (SG&A) includes salaries and wages and benefits not directly attributable to a service or product, bad debt charges, taxes other than income, advertising and sales commission costs, customer billing, call center and
information technology costs, professional service fees, and rent for administrative space. Aggregate customer care costs, which include billing and service provisioning, are allocated between cost of services and sales and selling, general and
administrative expense.



The increase in SG&A expense was
primarily driven by higher general and administrative costs allocated from affiliates. This increase was partially offset by lower bad debt expense as a result of improved collections, customer deposit requirements and lower accounts receivable.





DEPRECIATION AND AMORTIZATION



|2003-2002    |  | (Decrease)
|------------ |  | ----------
|            
|Three Months |  | $         



Depreciation and
amortization expense decreased principally due to the effect of lower rates of depreciation, as well as the favorable impact of adopting SFAS No. 143, effective January 1, 2003. Under SFAS No. 143, we began expensing the costs of removal in excess
of salvage for outside plant assets as incurred. Previously, we had included costs of removal for these assets in our depreciation rates. These decreases were partially offset by growth in depreciable telephone plant.





OTHER RESULTS

(Dollars in Millions)





OTHER INCOME AND (EXPENSE), NET



|2003-2002           |  | (Decrease)
|------------------- |  | ----------
|                   
|Three Months        |  | $         
|                    |  |           
|nm  Not meaningful |  |           



Other income and
(expense), net includes equity income (losses), interest income, gains and losses on early extinguishments of debt and other nonoperating income and expense items. We have an investment in Verizon Ventures III Inc. (Ventures III), which we account
for under the equity method. (See Note 8 to the condensed financial statements.)



The decrease in other income and (expense), net was primarily attributable to the effect of equity losses recognized in the first three months of 2003, from our investment in Ventures III.



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INTEREST EXPENSE



|2003-2002    |  | (Decrease)
|------------ |  | ----------
|            
|Three Months |  | $         



Interest expense
includes costs associated with borrowing and capital leases, net of capitalized interest costs. We capitalize interest associated with the acquisition or construction of plant assets. Capitalized interest is reported as a cost of plant and a
reduction in interest expense.



Interest expense decreased in the
first three months of 2003, over the same period in 2002, primarily as a result of lower interest rates and lower average levels of short-term debt with an affiliate. In addition, lower levels of long-term debt contributed to the decrease in
interest expense in the first three months of 2003.





EFFECTIVE INCOME TAX RATES



|Three Months Ended March 31, |  |      
|---------------------------- |  | -----
|                            
|2003                         |  | 47.0%
|2002                         |  | 39.0%



The effective income tax
rate is the provision for income taxes as a percentage of income before provision for income taxes and cumulative effect of change in accounting principle. Our effective income tax rate was higher for the three months ended March 31, 2003, compared
to the same period in 2002, primarily due to the effect of equity losses associated with our investment in Ventures III, which were recorded in the first quarter of 2003, for which we do not recognize income tax benefits.





OTHER MATTERS



FCC Regulation
and Interstate Rates



We are subject to the jurisdiction of
the FCC with respect to interstate services and related matters. In 2002, the FCC continued to implement reforms to the interstate access charge system and to implement the universal service and other requirements of the
Telecommunications Act of 1996 (the 1996 Act).





Access Charges and Universal Service



On May 31, 2000, the FCC adopted the Coalition for Affordable Local and Long Distance Services (CALLS) plan as a comprehensive five-year plan for
regulation of interstate access charges. The CALLS plan has three main components. First, it establishes a portable interstate access universal service support of $650 million for the industry. This explicit support replaces implicit support
embedded in interstate access charges. Second, the plan simplifies the patchwork of common line charges into one subscriber line charge (SLC) and provides for de-averaging of the SLC by zones and class of customers in a manner that will not
undermine comparable and affordable universal service. Third, the plan sets into place a mechanism to transition to a set target of $0.0055 per minute for switched access services. Once that target rate is reached, local exchange carriers are no
longer required to make further annual price cap reductions to their switched access prices. The annual reductions leading to the target rate, as well as annual reductions for the subset of special access services that remain subject to price cap
regulation was set at 6.5% per year.



On September 10, 2001, the
U.S. Court of Appeals for the Fifth Circuit ruled on an appeal of the FCC order adopting the plan. The court upheld the FCC on several challenges to the order, but remanded two aspects of the decision back to the FCC on the grounds that they lacked
sufficient justification. The court remanded back to the FCC for further consideration its decision setting the annual reduction factor at 6.5% minus an inflation factor and the size of the new universal service fund at $650 million. The entire plan
(including these elements) will continue in effect pending the FCCs further consideration of its justification of these components. As a result of tariff adjustments which became effective in July 2002, we reached the $0.0055 benchmark.



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The FCC has adopted rules
for special access services that provide for pricing flexibility and ultimately the removal of services from price regulation when prescribed competitive thresholds are met. In order to use these rules, carriers must forego the ability to take
advantage of provisions in the current rules that provide relief in the event earnings fall below prescribed thresholds. Verizon has been authorized to remove special access and dedicated transport services from price caps in 37 Metropolitan
Statistical Areas (MSAs) in the former Bell Atlantic territory and in 19 additional MSAs in the former GTE territory. In addition, the FCC has found that in 22 MSAs Verizon has met the stricter standards to remove special access connections to
end-user customers from price caps.



In November 1999, the FCC
adopted a new mechanism for providing universal service support to high cost areas served by large local telephone companies. This funding mechanism provides additional support for local telephone services in several states served by Verizons
telephone operations. This system has been supplemented by the new FCC access charge plan described above. On July 31, 2001, the U.S. Court of Appeals for the Tenth Circuit reversed and remanded to the FCC for further proceedings. The court
concluded that the FCC had failed to adequately explain some aspects of its decision and had failed to address any need for a state universal service mechanism. The current universal service mechanism remains in place pending the outcome of any FCC
review as a result of these appeals. The FCC also has proceedings underway to evaluate possible changes to its current rules for assessing contributions to the universal service fund. Any change in the current assessment mechanism could result in a
change in the contribution that local telephone companies must make and that would have to be collected from customers.





Unbundling of Network Elements



In November 1999, the FCC announced its decision setting forth new unbundling
requirements, eliminating elements that it had previously required to be unbundled, limiting the obligation to provide others and adding new elements.



In addition to the unbundling requirements released in November 1999, the FCC released an order in a separate proceeding in December 1999, requiring
incumbent local exchange companies also to unbundle and provide to competitors the higher frequency portion of their local loop. This provides competitors with the ability to provision data services on top of incumbent carriers voice services.



On May 24, 2002, the U.S. Court of Appeals for the D.C. Circuit
released an order that overturned the most recent FCC decision establishing which network elements were required to be unbundled. In particular, the court found that the FCC did not adequately consider the limitations of the necessary and
impair standards of the 1996 Act when it chose national rules for unbundling and that it failed to consider the relevance of competition from other types of service providers, including cable and satellite. The court also vacated a separate
order that had authorized an unbundling requirement for line sharing where a competing carrier purchases only a portion of the copper connection to the end-user in order to provide high-speed broadband services using DSL technology. The
U.S. Supreme Court subsequently declined to review that decision.



On October 25, 2002, the U.S. Court of Appeals for the D.C. Circuit released an order upholding the FCCs decisions that established interim limits on the availability of combinations of UNEs known as enhanced extended links or
EELs. EELs consist of unbundled loops and transport elements. The FCC decisions limited access to EELs to carriers that would use them to provide a significant amount of local traffic, and not just use them as substitutes for special
access services.



Prior to the issuance of these orders from the
U.S. Court of Appeals for the D.C. Circuit, the FCC had already begun a review of the scope of its unbundling requirement through a rulemaking referred to as the triennial review of UNEs. This rulemaking reopened the question of what network
elements must be made available on an unbundled basis under the 1996 Act, and will address the impact of the order by the U.S. Court of Appeals for the D.C. Circuit overturning its previous rules, as well as other pending issues relating to
unbundled elements, including the question of whether competing carriers may substitute combinations of unbundled loops and transport for already competitive special access services. On February 20, 2003, the FCC announced a decision in its
triennial review, but the order has not yet been released.





Compensation for Internet Traffic



On April 27, 2001, the FCC released an order addressing intercarrier compensation for dial-up connections for Internet-bound traffic. The FCC found that
Internet-bound traffic is interstate and subject to the FCCs jurisdiction. Moreover, the FCC again found that Internet-bound traffic is not subject to reciprocal compensation under Section 251(b)(5) of the 1996 Act. Instead, the FCC
established federal rates per minute for this traffic that decline from $0.0015 to $0.0007 over a three-year period. The



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FCC order also sets caps
on the total minutes of this traffic that may be subject to any intercarrier compensation and requires that incumbent local exchange carriers must offer to both bill and pay reciprocal compensation for local traffic at the same rate as they are
required to pay on Internet-bound traffic. On May 3, 2002, the U.S. Court of Appeals for the D.C. Circuit rejected part of the FCCs rationale for its April 27, 2001 order, but declined to vacate the order while it is on remand.



Several parties requested rehearing, asking the court to vacate the underlying
order. Those requests were denied in a series of orders released on September 24, 2002 and September 25, 2002. The U.S. Supreme Court has declined to review that denial. In the meantime, pending further action by the FCC, the FCCs underlying
order remains in effect.





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|Item 4. |  | Controls and Procedures
|------- |  | -----------------------



| | (a) |  | Evaluation of Disclosure Controls and Procedures.
| | --- |  | -------------------------------------------------



Our chief executive officer and chief financial officer have evaluated the effectiveness of the registrants disclosure controls and
procedures (as defined in Rules 13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934), as of a date within 90 days of the filing date of this quarterly report (Evaluation Date), that ensure that information relating to the registrant which
is required to be disclosed in this report is recorded, processed, summarized and reported, within required time periods. They have concluded that as of the Evaluation Date, the registrants disclosure controls and procedures were adequate and
effective to ensure that material information relating to the registrant and its consolidated subsidiaries would be made known to them by others within those entities, particularly during the period in which this quarterly report was being prepared.



| | (b) |  | Changes in Internal Controls.
| | --- |  | -----------------------------



There were no significant changes in the registrants internal controls or in other factors that could significantly affect these
controls subsequent to the Evaluation Date, nor were there any significant deficiencies or material weaknesses in these controls requiring corrective actions.



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PART II  OTHER
INFORMATION



|Item 6. |  | Exhibits and Reports on Form 8-K
|------- |  | --------------------------------



|(a) |  | Exhibits:                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                  
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------
|   
|    |  | Exhibit Number                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                  
|   
|    |  | 12                                                                                                                                                                                                                                                                                                                                                                                         |  | Computation of Ratio of Earnings to Fixed Charges.                               
|   
|    |  | 99                                                                                                                                                                                                                                                                                                                                                                                         |  | Officer Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|   
|(b) |  | Reports on Form 8-K:                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | A Current Report on Form 8-K was filed on March 10, 2003, containing certain financial information for the
year ended December 31, 2002.  A Current Report on Form 8-K was
furnished on March 19, 2003, containing certification statements to the Securities and Exchange Commission, signed by the Chairman of the Board and Chief Executive Officer and by the Chief Financial Officer.



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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.







|                   |  | Verizon Virginia Inc.
|------------------ |  | ---------------------
|                  
|Date: May 13, 2003 |  | By                   
|                   |  |                      
|                   |  |                      
|                   |  |                      





UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF MAY 7, 2003.



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CERTIFICATIONS



I, Lawrence T. Babbio,
Jr., certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Verizon Virginia Inc.;
| | -- |  | ----------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The registrants other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







|Date: May 13, 2003 |  | /s/    LAWRENCE T. BABBIO, JR.
|------------------ |  | ------------------------------
|                   |  | Lawrence T. Babbio, Jr.       
|                   |  | Chairman of the Board and     
|                   |  | Chief Executive Officer       



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CERTIFICATIONS



I, Lawrence R. Whitman, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Verizon Virginia Inc.;
| | -- |  | ----------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The registrants other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







|Date: May 13, 2003 |  | /s/    LAWRENCE R. WHITMAN
|------------------ |  | --------------------------
|                   |  | Lawrence R. Whitman       
|                   |  | Chief Financial Officer   



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EXHIBIT INDEX



|Exhibit Number |  |                                                                                  
|-------------- |  | ---------------------------------------------------------------------------------
|              
|12             |  | Computation of Ratio of Earnings to Fixed Charges.                               
|              
|99             |  | Officer Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



21