<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 333-78563
Prospectus Supplement to Prospectus dated May 21, 1999
$1,400,000,000
GTE Corporation [LOGO]
Floating Rate Debentures Due 2000
Maturity Ranking
. The floating rate debentures will . The floating rate debentures are
mature on June 12, 2000. unsecured and rank equally with all
of our other senior unsecured debt.
Interest
. The floating rate debentures will The Company
bear interest at three-month LIBOR . Our principal executive offices are
plus .035% and will be reset located at 1255 Corporate Drive,
quarterly. Interest on the floating SVC04C08, Irving, Texas 75038. Our
rate debentures is payable on telephone number is (972) 507-5000.
September 13, 1999, December 13,
1999, March 13, 2000 and at Listing
maturity. . We do not intend to list the
floating rate debentures on any
. Interest on the floating rate securities exchange.
debentures will accrue from June
11, 1999.
Redemption
. We cannot redeem the floating rate
debentures prior to maturity.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the floating rate debentures or
determined that this prospectus supplement or the attached prospectus is
accurate or complete. Any representation to the contrary is a criminal
offense.
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. Chase Securities Inc., the . The floating rate debentures will
underwriter, has agreed to purchase be delivered to the underwriter in
the floating rate debentures from book-entry only form through the
us at 100% of their principal book-entry delivery system of The
amount, resulting in proceeds to us Depository Trust Company on or
before expenses of $1,400,000,000. about June 11, 1999.
. The underwriter proposes to offer . The underwriter will purchase the
the floating rate debentures to floating rate debentures from us on
investors from time to time for a firm commitment basis and offer
sale in negotiated transactions at them to you, subject to certain
prices based upon prevailing market conditions.
prices at the time of sale.
Chase Securities Inc.
-----------------------------------------------------
The date of this prospectus supplement is June 8, 1999.
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We are offering to sell the floating rate debentures only in places where sales
are permitted.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
Prospectus Supplement
<S> <C>
About this Prospectus Supplement.. S-3
Description of the Floating Rate
Debentures....................... S-3
Underwriting...................... S-5
Page
----
Prospectus
About this Prospectus.............. 2
Where You Can Find More
Information....................... 2
Recent Developments................ 3
The Company........................ 3
Use of Proceeds.................... 4
Consolidated Ratios of Earnings to
Fixed Charges..................... 4
Description of the Debt Securities. 4
Experts............................ 8
Legal Matters...................... 9
Plan of Distribution............... 9
</TABLE>
S-2
<PAGE>
ABOUT THIS PROSPECTUS SUPPLEMENT
You should read this prospectus supplement along with the prospectus that
follows carefully before you invest. Both documents contain important
information you should consider when making your investment decision. This
prospectus supplement contains information about the floating rate debentures
and the prospectus contains information about our debt securities generally.
This prospectus supplement may add, update or change information in the
prospectus. You should rely only on the information provided or incorporated by
reference in this prospectus supplement and the prospectus. The information in
this prospectus supplement is accurate as of June 8, 1999. We have not
authorized anyone else to provide you with different information.
DESCRIPTION OF THE FLOATING RATE DEBENTURES
Principal Amount, Maturity and Interest
We are issuing $1,400,000,000 of our floating rate debentures which will mature
on June 12, 2000. The floating rate debentures will bear interest at three-
month LIBOR plus .035%.
We will pay interest quarterly in arrears on September 13, 1999, December 13,
1999, and March 13, 2000, each an interest payment date, and on the maturity
date. If any of the quarterly interest payment dates listed above falls on a
day that is not a business day we will postpone the interest payment date to
the next succeeding business day unless that business day is in the next
succeeding calendar month, in which case the interest payment date will be the
immediately preceding business day. Interest on the floating rate debentures
will be computed on the basis of a 360 day year for the actual number of days
elapsed.
Interest on the floating rate debentures will accrue from, and including, June
11, 1999, to, and excluding, the first interest payment date and then from, and
including, the immediately preceding interest payment date to which interest
has been paid or duly provided for to, but excluding, the next interest payment
date or the maturity date, as the case may be. We will refer to each of these
periods as an "interest period." The amount of accrued interest that we will
pay for any interest period can be calculated by multiplying the face amount of
the floating rate debentures by an accrued interest factor. This accrued
interest factor is computed by adding the interest factor calculated for each
day from June 11, 1999, or from the last date we paid interest to you, to the
date for which accrued interest is being calculated. The interest factor for
each day is computed by dividing the interest rate applicable to that day by
360.
If the maturity date of the floating rate debentures falls on a day that is not
a business day, we will pay principal and interest on the next succeeding
business day, but we will consider that payment as being made on the date that
the payment was due to you. Accordingly no interest will accrue on the payment
for the period from and after the maturity date to the date we make the payment
to you on the next succeeding business day.
The interest payable by us on a floating rate debenture on any interest payment
date, subject to certain exceptions, will be paid to the person in whose name
the floating rate debenture is registered at the close of business on the
fifteenth calendar day, whether or not a business day, immediately preceding
the interest payment date. However, interest that we pay on the maturity date,
will be payable to the person to whom the principal will be payable.
When we use the term "business day" we mean any day except a Saturday, a Sunday
or a legal holiday in The City of New York on which banking institutions are
authorized or required by law, regulation or executive order to close;
provided, that the day is also a London business day. "London business day"
means any day on which dealings in United States dollars are transacted in the
London interbank market.
The interest rate on the floating rate debentures will be calculated by the
calculation agent appointed by us and will be equal to LIBOR plus .035%, except
that the interest rate in
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effect for the period from June 11, 1999 to September 13, 1999, the initial
interest reset date, will be established by us as the rate for deposits in
United States dollars having a maturity of three months commencing on June 11,
1999 that appears on Telerate Page 3750 as of 11:00 A.M., London time, on June
9, 1999, plus .035%. The calculation agent will reset the interest rate on each
interest payment date, each of which we will refer to as an "interest reset
date." The second London business day preceding an interest reset date will be
the "interest determination date" for that interest reset date. The interest
rate in effect on each day that is not an interest reset date will be the
interest rate determined as of the interest determination date pertaining to
the immediately preceding interest reset date. The interest rate in effect on
any day that is an interest reset date will be the interest rate determined as
of the interest determination date pertaining to that interest reset date,
except that the interest rate in effect for the period from and including June
11, 1999 to the initial interest reset date will be the initial interest rate.
"LIBOR" will be determined by the calculation agent in accordance with the
following provisions:
(i) With respect to any interest determination date, LIBOR will be the rate for
deposits in United States dollars having a maturity of three months commencing
on the first day of the applicable interest period that appears on Telerate
Page 3750 as of 11:00 A.M., London time, on that interest determination date.
If no rate appears, LIBOR, in respect to that interest determination date, will
be determined in accordance with the provisions described in (ii) below.
(ii) With respect to an interest determination date on which no rate appears on
Telerate Page 3750, as specified in (i) above, the calculation agent will
request the principal London offices of each of four major reference banks in
the London interbank market, as selected by the calculation agent, to provide
the calculation agent with its offered quotation for deposits in United States
dollars for the period of three months, commencing on the first day of the
applicable interest period, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on that interest determination date and
in a principal amount that is representative for a single transaction in United
States dollars in that market at that time. If at least two quotations are
provided, then LIBOR on that interest determination date will be the arithmetic
mean of those quotations. If fewer than two quotations are provided, then LIBOR
on the interest determination date will be the arithmetic mean of the rates
quoted at approximately 11:00 A.M., in The City of New York, on the interest
determination date by three major banks in The City of New York selected by the
calculation agent for loans in United States dollars to leading European banks,
having a three-month maturity and in a principal amount that is representative
for a single transaction in United States dollars in that market at that time;
provided, however, that if the banks selected by the calculation agent are not
providing quotations in the manner described by this sentence, LIBOR determined
as of that interest determination date will be LIBOR in effect on that interest
determination date.
"Telerate Page 3750" means the display designated as "Page 3750" on Bridge
Telerate, Inc., or any successor service, for the purpose of displaying the
London interbank rates of major banks for United States dollars.
Form
The floating rate debentures will be issued in book-entry only form.
Redemption
We cannot redeem the floating rate debentures before they mature.
Additional Information
See "Description of the Debt Securities" in the accompanying prospectus for
additional important information about the floating rate debentures. That
information includes:
. additional information about the terms of the floating rate debentures;
. general information about the indenture and the trustee;
. a description of certain restrictions; and
. a description of events of default under the indenture.
S-4
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UNDERWRITING
Chase Securities Inc., the underwriter, has agreed to purchase all of the
floating rate debentures from us according to the terms of our purchase
agreement.
If all of the conditions under the purchase agreement have been met, the
underwriter will purchase all of the floating rate debentures.
We will also pay our issuing expenses estimated at $471,000. We filed a form of
the purchase agreement with the Securities and Exchange Commission as an
exhibit to our registration statement covering the floating rate debentures.
The underwriter has advised us that it proposes to offer the floating rate
debentures to the public from time to time in negotiated transactions at prices
based upon prevailing market prices at the time of sale. In connection with the
sale of any floating rate debentures, the underwriter may be considered to have
received compensation from us equal to the difference between the amount
received by the underwriter in that sale and the price at which the underwriter
purchased the floating rate debentures from us. In addition, the underwriter
may sell the floating rate debentures to or through certain dealers, and those
dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the underwriter or from any purchasers of the
floating rate debentures for whom it may act as agent (which may be in excess
of customary compensation).
The floating rate debentures are an issue of securities with no established
trading market and will not be listed on any national securities exchange. The
underwriter has advised us that it intends to make a market in the floating
rate debentures, but it is not obligated to do so. The underwriter may
discontinue any market making in the floating rate debentures at any time in
its sole discretion. No assurance can be given as to the liquidity of any
trading market for the floating rate debentures.
In connection with the offering of the floating rate debentures, the
underwriter may engage in overallotment and short covering transactions in
accordance with Regulation M under the Securities Exchange Act of 1934.
Overallotment involves sales in excess of the offering size, which creates a
short position for the underwriter. Short covering transactions involve
purchases of the floating rate debentures in the open market after the
distribution has been completed in order to cover short positions. Short
covering transactions may cause the price of the floating rate debentures to be
higher than it would otherwise be in the absence of those transactions. If the
underwriter engages in short covering transactions, it may discontinue them at
any time.
We have agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments which the underwriter may be required to make in respect of any of
those liabilities.
Chase Securities Inc. or its affiliates have provided commercial or investment
banking services to us and certain of our affiliates, and may provide these
services in the future.
S-5
<PAGE>
PROSPECTUS
$3,000,000,000
GTE Corporation [LOGO]
DEBT SECURITIES
--------------------------------------------------
GTE Corporation intends to offer at one or more times debt securities with a
total offering price not to exceed $3,000,000,000. We will provide the specific
terms of these securities in supplements to this prospectus. You should read
this prospectus and the supplements carefully before you invest.
--------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
May 21, 1999
<PAGE>
TABLE OF CONTENTS
About this Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Recent Developments........................................................ 3
The Company................................................................ 3
Use of Proceeds............................................................ 4
Consolidated Ratios of Earnings to Fixed Charges........................... 4
Description of the Debt Securities......................................... 4
Experts.................................................................... 8
Legal Matters.............................................................. 9
Plan of Distribution....................................................... 9
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, we may, from time to time, sell the debt securities
described in this prospectus in one or more offerings with a total offering
price not to exceed $3,000,000,000. This prospectus provides you with a general
description of the debt securities. Each time we sell debt securities, we will
provide a prospectus supplement (and a pricing supplement, if any) that will
contain specific information about the terms of that offering. The prospectus
supplement or pricing supplement may also add, update or change information in
this prospectus. The information in this prospectus is accurate as of May 21,
1999. Please carefully read both this prospectus, any prospectus supplement and
any pricing supplement together with additional information described under the
heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. Our SEC filings are also available to the public
over the Internet at the SEC's web site at http://www.sec.gov. We also maintain
a web site at http://www.gte.com. Our common stock is listed on the New York,
Chicago and Pacific Stock Exchanges. We have also issued other securities which
are listed on the New York Stock Exchange. Our SEC filings are also available
at those exchanges.
Once our merger with Bell Atlantic Corporation described under "Recent
Developments" is completed, our common stock will no longer be listed on any of
these exchanges. Under the rules of the SEC, we may discontinue filing reports
or other information with the SEC if each class of our debt securities is owned
of record by less than three hundred persons and no class of our securities is
listed on a stock exchange. Provided that these two circumstances occur, we
could discontinue filing information with the SEC after we file an Annual
Report on Form 10-K for the year in which our most recent series of debt
securities is issued.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information.
Information on our web site is not incorporated by reference into this
prospectus. We incorporate by reference the following documents and any future
filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we or any underwriters sell all of the
debt securities:
. Annual Report on Form 10-K for the year ended December 31, 1998;
. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
. Current Reports on Form 8-K filed on January 20, January 26, April 5, April
28 and May 10, 1999; and
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. Joint Proxy Statement and Prospectus of GTE Corporation and Bell Atlantic
Corporation filed on April 14, 1999.
You may request a copy of these filings at no cost, by writing or calling us at
the following address:
Assistant Secretary
GTE Corporation
1255 Corporate Drive
Mail Code: SVC04A34
Irving, Texas 75038
(972) 507-5243
You should rely only on the information incorporated by reference or provided
in this prospectus or any supplement. We have not authorized anyone else to
provide you with different information.
RECENT DEVELOPMENTS
On July 28, 1998, we announced our intentions to combine in a merger of equals
with Bell Atlantic Corporation. We are working diligently to complete the
merger by the end of 1999. However, we must obtain the approval of a variety of
state and federal regulatory agencies and, accordingly, the merger may close in
the first half of 2000. Immediately after the merger, we will be a wholly-owned
subsidiary of the combined company. More information about the merger is
contained in our Joint Proxy Statement and Prospectus with Bell Atlantic filed
on April 14, 1999, which is incorporated by reference in this prospectus.
Immediately after the merger, we will continue to be the sole obligor of our
debt securities. Our merger agreement with Bell Atlantic does not provide for,
or otherwise require, Bell Atlantic to assume or become a guarantor of any of
our debt securities, including the debt securities offered by this prospectus.
The Bell Atlantic financial information and the pro forma combined condensed
financial information included or incorporated by reference in the Joint Proxy
Statement and Prospectus, which is incorporated by reference in this
prospectus, are for informational purposes only.
The indenture for our debt securities contains no covenants or other
protections which would prevent us from transferring any of our assets, unless
we were to transfer all or substantially all of our assets. While it is
possible that transfers of assets between GTE and Bell Atlantic or other
affiliated entities may take place after the merger, whether those transfers
will occur and the nature, timing and extent of those transfers cannot be
determined at this time.
On April 5, 1999, we announced an agreement to buy cellular properties from
Ameritech Corporation for $3,270,000,000. The properties, located in Chicago,
St. Louis and central Illinois, currently serve approximately 1.7 million
subscribers. We will have a 93% equity interest in these properties and
Georgetown Partners, a private investment firm, will hold the remaining 7%.
These properties will provide us with more than 11 million additional potential
wireless customers. When we refer to "potential wireless customers," we mean
the number of people living in the relevant area served by our wireless
operations, adjusted to reflect our ownership interests in these wireless
operations. Under the terms of the definitive agreement, we expect to finalize
the acquisition when Ameritech and SBC Corporation complete their merger later
in 1999.
THE COMPANY
We are one of the largest publicly-held telecommunications companies in the
world. Our domestic and international operations serve approximately 33 million
access lines through subsidiaries in the United States, Canada and the
Dominican Republic and through affiliates in Canada, Puerto Rico and Venezuela.
We are a leading mobile-cellular operator in the United States, where we serve
approximately 4.9 million wireless customers, and have the opportunity to serve
approximately 61.9 million potential wireless customers. Outside the fifty
states, we operate mobile-cellular networks serving approximately 3.2 million
customers with the opportunity to serve approximately 26.4 million potential
wireless customers through subsidiaries in Canada, Argentina and the Dominican
Republic and affiliates in Puerto Rico, Canada, Venezuela and Taiwan.
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Beginning in 1996, we became the first among our peers to offer "one-stop
shopping" for local, long-distance and Internet access services. We are also a
leader in directories and telecommunication-based information services and
systems.
Our principal executive offices are located at 1255 Corporate Drive, SVC04C08,
Irving, Texas 75038, telephone (972) 507-5000.
USE OF PROCEEDS
We will use the net proceeds from the sale of the debt securities:
. to buy cellular properties in Chicago, St. Louis and central Illinois from
Ameritech Corporation;
. to repay short-term borrowings;
. to invest in and advance to our subsidiaries to finance their operations; and
. for general corporate purposes.
At March 31, 1999, our short-term borrowings (not including current maturities
or short-term obligations expected to be refinanced on a long-term basis) were
approximately $3,707,293,000 with an average annual interest rate of 4.958%.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for the periods indicated
are as follows:
<TABLE>
<CAPTION>
Three Months Years Ended December 31,
Ended ------------------------
<S> <C> <C> <C> <C> <C>
March 31, 1999 1998 1997 1996 1995 1994
- -------------- ---- ---- ---- ---- ----
4.76 3.49 3.98 4.27 4.00 4.18
</TABLE>
For these ratios, "earnings" have been calculated by adding income taxes and
fixed charges to income before extraordinary charges, and "fixed charges"
include interest expense, preferred stock dividends of subsidiaries, the
additional income requirement to cover preferred dividends of subsidiaries, and
the portion of rent expense representing interest. We added amounts applicable
to entities that are at least 50%-owned to both earnings and fixed charges, and
we deducted amounts applicable to minority interests from both earnings and
fixed charges.
Our ratio for the three months ended March 31, 1999 includes special items that
resulted in a pre-tax gain of $321,000,000 and our ratio for the year ended
December 31, 1998 includes a pre-tax special charge of $755,000,000. Excluding
those items and charge, these ratios would have been 3.92 and 3.96,
respectively. The 1999 special items related to a gain associated with the
merger of BC TELECOM Inc. and TELUS Corporation, partially offset by charges
associated with voluntary and involuntary employee separation programs
completed in early April 1999. The 1998 special charge related to actions taken
in 1998 to sell or exit various business activities and reduce costs through
employee reductions and related actions.
DESCRIPTION OF THE DEBT SECURITIES
General
We will issue the debt securities under an indenture between us and the
trustee, The Bank of New York, dated as of December 1, 1996, as supplemented
and amended. We have summarized selected provisions of the indenture below.
This is a summary and is not complete. It does not describe all exceptions and
qualifications contained in the indenture or the debt securities. You should
read the indenture and the form of the debt securities we filed as exhibits to
the registration statement for the debt securities for provisions that may be
important to you. In the summary below, we have included references to article
and section numbers of the indenture so that you can easily locate these
provisions.
The debt securities will be unsecured and will rank equally with all our senior
unsecured debt. The debt securities may be issued up to the
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principal amount that may be authorized by us. The indenture does not limit the
amount of debt securities that may be issued and each series of debt securities
may differ as to its terms. (SECTION 2.01)
A board resolution or officers' certificate may designate the specific terms
relating to any new series of debt securities. (ARTICLE TWO) These terms will
be described in a prospectus supplement (and a pricing supplement, if any) and
will include the following:
. title of the series;
. total principal amount of the series;
. maturity date or dates;
. interest rate and interest payment dates;
. any redemption dates, prices, obligations and restrictions; and
. any other terms of the series.
Form and Exchange
The debt securities will normally be denominated in United States dollars in
which case we will pay principal, interest and any premium in United States
dollars. We may, however, denominate any series of debt securities in another
currency or composite currency. Payments of principal, interest and any premium
would then be in that currency or composite currency and not United States
dollars. We will also normally issue the debt securities in book-entry only
form, which means that they will be represented by one or more permanent global
certificates registered in the name of The Depository Trust Company, New York,
New York, which we refer to as "DTC," or its nominee. We will refer to this
form here and in the prospectus supplement as "book-entry only."
Alternatively, we may issue the debt securities in certificated form registered
in the name of the debt security holder. Under these circumstances, holders may
receive certificates representing the debt securities. Debt securities in
certificated form will be issued only in increments of $1,000 and will be
exchangeable without charge except for reimbursement of taxes, if any. We will
refer to this form in the prospectus supplement as "certificated." (ARTICLE
TWO)
Original Issue Discount
We may issue any series of debt securities as "original issue discount
securities." They will state on their face that they are original issue
discount securities. Generally, if this type of debt security is required to be
paid before its stated maturity date, less than the face amount will be paid to
you. The prospectus supplement or any pricing supplement will describe United
States Federal income tax considerations and other special considerations that
may apply to any original issue discount securities we issue.
Redemption Provisions, Sinking Fund and Defeasance
We may redeem some or all of the debt securities at our option subject to the
conditions stated in the prospectus supplement or any pricing supplement
relating to that series of debt securities. (ARTICLE THREE) If a series of debt
securities is subject to a sinking fund, the prospectus supplement or pricing
supplement will describe those terms.
The indenture permits us to discharge or "defease" certain of our obligations
on any series of debt securities at any time. We may defease by depositing with
the trustee sufficient cash or government securities to pay all sums due on the
debt securities of the series. (ARTICLE ELEVEN)
Book-Entry Procedures
The following discussion pertains to debt securities that are issued in book-
entry only form.
One or more global securities would be issued to DTC or its nominee. DTC would
keep a computerized record of its participants (for example, your broker) whose
clients have purchased the securities. The participant would
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then keep a record of its clients who purchased the securities. A global
security may not be transferred, except that DTC, its nominees, and their
successors may transfer a global security as a whole to one another.
Under book-entry only, we will not issue certificates to individual holders of
the debt securities. Beneficial interests in global securities will be shown
on, and transfers of global securities will be made only through, records
maintained by DTC and its participants.
DTC has provided us with the following information: DTC is a limited-purpose
trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
United States Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under Section 17A of the Securities Exchange Act of 1934. DTC holds
securities that its participants deposit with DTC. DTC also facilitates the
settlement among direct participants of securities transactions, such as
transfers and pledges, in deposited securities through computerized records for
direct participant's accounts. This eliminates the need to exchange
certificates. Direct participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
DTC's book-entry system is also used by other organizations such as securities
brokers and dealers, banks and trust companies that work through a direct
participant. The rules that apply to DTC and its participants are on file with
the SEC.
DTC is owned by a number of its direct participants and by the New York Stock
Exchange, Inc., The American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.
We will wire principal and interest payments to DTC's nominee. We and the
trustee will treat DTC's nominee as the owner of the global securities for all
purposes. Accordingly, we and the trustee will have no direct responsibility or
liability to pay amounts due on the securities to owners of beneficial
interests in the global securities.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit direct participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global securities
as shown on DTC's records. In addition, it is DTC's current practice to assign
any consenting or voting rights to direct participants whose accounts are
credited with securities on a record date, by using an omnibus proxy. Payments
by participants to owners of beneficial interests in the global securities, and
voting by participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with securities
held for the account of customers registered in "street name." However,
payments will be the responsibility of the participants and not of DTC, the
trustee, or us.
Debt securities represented by a global security would be exchangeable for debt
security certificates with the same terms in authorized denominations only if:
. DTC notifies us that it is unwilling or unable to continue as depository or
if DTC ceases to be a clearing agency registered under applicable law and a
successor depository is not appointed by us within 90 days; or
. we deliver to the trustee an order that the global security shall be
exchangeable.
The following Year 2000 disclosure has also been provided to us by DTC: DTC
management is aware that some computer applications, systems, and the like for
processing data that are dependent upon calendar dates, including dates before,
on, and after January 1, 2000, may encounter "Year 2000 problems." DTC has
informed its participants and other members of the financial community that it
has developed and is implementing a program so that its systems, as the same
relate to the timely
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payment of distributions (including principal and income payments) to
securityholders, book-entry deliveries, and settlement of trades within DTC,
continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
DTC's plan includes a testing phase, which is expected to be completed within
appropriate time frames.
However, DTC's ability to perform properly its services is also dependent upon
other parties, including but not limited to issuers and their agents, as well
as third party vendors from whom DTC licenses software and hardware, and third
party vendors on whom DTC relies for information or the provision of services,
including telecommunication and electrical utility service providers, among
others. DTC has informed its participants and other members of the financial
community that it is contacting (and will continue to contact) third party
vendors from whom DTC acquires services to: (i) impress upon them the
importance of such services being Year 2000 compliant; and (ii) determine the
extent of their efforts for Year 2000 remediation (and, as appropriate,
testing) of their services. In addition, DTC is in the process of developing
such contingency plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to its participants and other members of the financial community for
informational purposes only and is not intended to serve as a representation,
warranty, or contract modification of any kind.
Restrictions
The debt securities will not be secured. However, if we at any time incur other
debt or obligations secured by a mortgage or pledge on any of our property, the
indenture requires us to secure the debt securities equally with the other debt
or obligations for as long as they remain secured. Exceptions to this
requirement include the following:
. purchase money mortgages or conditional sales agreements on property acquired
after December 1, 1996, or pre-existing mortgages;
. certain deposits or pledges to secure the performance of bids, tenders,
contracts or leases or in connection with worker's compensation and similar
matters;
. mechanics' and similar liens in the ordinary course of business; and
. when we own debt of our subsidiaries, we can permit other creditors of these
subsidiaries to be repaid before we are repaid. (SECTION 4.05)
We may issue or assume an unlimited amount of debt under the indenture. As a
result, the indenture does not prevent us from significantly increasing our
unsecured debt levels, which may negatively affect the resale value of the debt
securities. (SECTION 2.01)
Changes to the Indenture
The indenture may be changed with the consent of holders owning more than 50%
in principal amount of the outstanding debt securities of each series affected
by the change. However, we may not change your principal or interest payment
terms, or the percentage required to change other terms of the indenture,
without your consent, as well as the consent of others similarly affected.
(SECTION 9.02)
We may enter into supplemental indentures for other specified purposes
including the creation of any new series of debt securities, without the
consent of any holder of debt securities. (SECTIONS 2.01, 9.01 and 10.01)
Consolidation, Merger or Sale
We cannot merge with another company or sell or transfer all or substantially
all of our property to another company unless:
. we are the continuing corporation; or
. the successor corporation expressly assumes:
--payment of principal, interest and any premium on the debt securities; and
--performance and observance of all covenants and conditions in the
Indenture.
(SECTIONS 10.01 and 10.02)
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Events of Default
"Event of default" means with respect to any series of debt securities any of
the following:
. failure to pay interest on that series of debt securities for 30 business
days after payment is due;
. failure to pay principal or any premium on that series of debt securities
when due;
. failure to perform any other covenant relating to that series of debt
securities for 90 days after we are given written notice; or
. certain events in bankruptcy, insolvency or reorganization.
An event of default for a particular series of debt securities does not
necessarily impact any other series of debt securities issued under the
Indenture. (SECTION 6.01)
If an event of default for any series of debt securities occurs and continues,
the trustee or the holders of at least 25% of the principal amount of the debt
securities of the series may declare the entire principal of all the debt
securities of that series (or for any original issue discount series, the
required amount which may be less than the principal) to be due and payable
immediately. If this happens, subject to certain conditions, the holders of a
majority of the principal amount of the debt securities of that series can
rescind the declaration if we have deposited with the trustee a sum sufficient
to pay all matured installments of interest, principal and any premium.
(SECTION 6.01)
The holders of more than 50% of the principal amount of any series of the debt
securities may, on behalf of the holders of all the debt securities of that
series, control any proceedings resulting from an event of default or waive any
past default except a default in the payment of principal, interest or any
premium. (SECTION 6.06) We are required to file an annual certificate with the
trustee stating whether we are in compliance with all the conditions and
covenants under the indenture. (SECTION 5.03)
Concerning the Trustee
Within 90 days after a default occurs, the trustee must notify the holders of
the debt securities of the series of all defaults known to the trustee if we
have not remedied them (default is defined for this purpose to include the
events of default specified above absent any grace periods or notice). The
trustee may withhold notice to the holders of such debt securities of any
default (except in the payment of principal, interest or any premium) if it in
good faith considers such withholding in the interest of the holders. (SECTION
6.07)
Prior to an event of default, the trustee is required to perform only the
specific duties stated in the indenture and, after an event of default, must
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. (SECTION 7.01) The trustee is not required
to take any action permitted by the indenture at the request of any holders of
debt securities, unless such holders protect the trustee against costs,
expenses and liabilities. (SECTION 7.02) The trustee is not required to spend
its own funds or become financially liable when performing its duties if it
reasonably believes that it will not be adequately protected financially.
(SECTION 7.01)
We have a deposit account and a normal commercial banking relationship with the
trustee. The trustee also serves as trustee on other indentures under which we
have unsecured debt securities outstanding. If a default occurred on any debt
securities and/or any of those other outstanding unsecured debt securities, The
Bank of New York may be required to resign as trustee for the debt securities
within 90 days of default unless the default were cured, duly waived or
otherwise eliminated.
EXPERTS
The consolidated financial statements included in GTE Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998, incorporated in this
prospectus and in the
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registration statement by reference, have been audited by Arthur Andersen LLP,
independent public accountants, as set forth in their report thereon dated
January 28, 1999, and are incorporated herein by reference in reliance upon the
authority of said firm as experts in giving said reports.
The consolidated financial statements and consolidated financial statement
schedule incorporated in this prospectus and in the registration statement by
reference to the Joint Proxy Statement and Prospectus of GTE and Bell Atlantic
Corporation have been so incorporated in reliance on the report (which contains
an explanatory paragraph stating that, in 1996, Bell Atlantic changed its
method of accounting for directory publishing revenues and expenses) of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
such firm as experts in auditing and accounting.
LEGAL MATTERS
William P. Barr, Esq., our Executive Vice President-Government & Regulatory
Advocacy, General Counsel, or his successor, will issue an opinion about the
validity of the debt securities for us. Milbank, Tweed, Hadley & McCloy LLP of
New York, New York will issue an opinion for the agents or underwriters. As of
February 26, 1999, Mr. Barr was the beneficial owner of 209,700 shares of our
common stock, including shares which may be acquired within 60 days pursuant to
the exercise of stock options.
PLAN OF DISTRIBUTION
We may sell any series of debt securities:
. through underwriters or dealers;
. through agents; or
. directly to one or more purchasers.
A prospectus supplement or pricing supplement will include:
. the names of any underwriters, dealers or agents;
. the purchase price of the debt securities;
. our proceeds from such sale;
. any underwriting discounts or agency fees and other underwriters' or agents'
compensation; and
. any initial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers.
If underwriters are used in the sale, they will buy the debt securities for
their own account. The underwriters may then resell the debt securities in one
or more transactions, at any time or times, at a fixed public offering price or
at varying prices.
We will only offer the debt securities in states where the offer is permitted
by law.
If there is a default by one or more of the underwriters affecting 10% or less
of the total principal amount of debt securities offered, the non-defaulting
underwriters must purchase the debt securities agreed to be purchased by the
defaulting underwriters. If the default affects more than 10% of the total
principal amount of the debt securities, we may, at our option, sell less than
all the debt securities offered.
Underwriters and agents that participate in the distribution of the debt
securities may be underwriters as defined in the Securities Act of 1933. Any
discounts or commissions that we pay them and any profit they receive from the
resale of the debt securities by them may be treated as underwriting discounts
and commissions under the Securities Act of 1933. We may have agreements with
underwriters, dealers and agents to indemnify them against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribute with respect to payments which they may be required to make.
Underwriters and agents may be our customers or may engage in transactions with
us or perform services for us in the ordinary course of business.
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GTE Corporation [LOGO]
