GTE CORP
8-K, 1999-01-20
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
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                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT


     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


                        Date of Report: JANUARY 19, 1999
                        (Date of earliest event reported)




                                 GTE CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)




<TABLE>
<S>                                 <C>                          <C>       
           NEW YORK                         1-2755                           13-1678633
(STATE OR OTHER JURISDICTION OF     (COMMISSION FILE NUMBER)     (I.R.S. EMPLOYER IDENTIFICATION NO.)
        INCORPORATION)


   1255 Corporate Drive, SVC04C08, Irving, Texas                                75038
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                (ZIP CODE)
</TABLE>


         Registrant's telephone number, including area code 972-507-5000


       (Former name, former address and former fiscal year, if changed
                               since last report)


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                                 GTE CORPORATION

                                    FORM 8-K


Item 7.  Financial Statements and Exhibits


         (a) Financial Statements - None


         (b) Pro Forma Financial Information - None


         (c) Exhibits

             99.1    Press Release issued by GTE Corporation on January 19, 1999






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                                    SIGNATURE

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.


                                                   GTE Corporation
                                        ----------------------------------------
                                                     (Registrant)

Date: January 19, 1999                            /s/ Paul R. Shuell
      ------------------------          ----------------------------------------
                                                      Paul R. Shuell
                                               Vice President and Controller



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                                  EXHIBIT INDEX


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<CAPTION>
EXHIBIT
NUMBER         DESCRIPTION
- -------        -----------
<S>            <C>
 99.1          Press Release issued by GTE Corporation on January 19, 1999
</TABLE>


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                                                                    EXHIBIT 99.1



FROM: PETER W. THONIS, GTE, 972-507-5367; [email protected]

                                                         Jan. 19, 1999


                         GTE PROVIDES 1999 BUSINESS UPDATE

IRVING, Texas-- Reflecting the company's continuing commitment to achieve
profitable growth in a highly competitive environment, GTE Corp. today
reaffirmed its target of 13-15 percent earnings per share growth in 1999 and
beyond, outlined specific actions in support of this objective, and noted other
factors impacting its reporting of financial results.

     Highlights include:

o    An expected one-time, non-cash gain to GTE of approximately $300 million
     after tax in the first quarter of 1999, resulting from the merger of
     Canada's TELUS Corp. and BC TELECOM, in which GTE had a 51 percent stake.

o    Moderation of plans to expand GTE's national sales, service and marketing
     operation, and increased focus of the roll-out of the company's long
     distance activities within bundled telecom offerings. These actions,
     together with accelerating competition in GTE's wireline and wireless
     operations, will impact revenue growth reported from "continuing
     operations," which are expected to grow in the high single digits through
     1999, rather than the 10-12 percent previously estimated.

o    Cost-cutting initiatives, including programs to reduce expenses and
     decrease the number of contractors and employees, primarily through
     attrition and other voluntary efforts, in U.S. operations, which will save
     the company in excess of $600 million annually starting in early 1999.
     Details of these initiatives will be announced in the first quarter of 1999
     as plans are finalized. The company expects a one-time charge in the first
     quarter to recognize the cost-cutting initiatives. GTE said the gain from
     the BC TEL transaction in the quarter is expected to more than offset the
     charge from cost initiatives, resulting in a neutral to modestly positive
     impact on earnings.

                                                                          -more-

<PAGE>   2
GTE-2


         GTE Chairman and CEO Charles R. Lee said, "Our strategy consistently
has been to focus on profitable growth, not growth at any cost. As the industry
becomes increasingly competitive, we will continue to align our strategies and
costs with market realities to ensure we meet our most important financial
objective of enhancing shareholder value. However, while we are moderating
expansion in certain areas, we are continuing to invest in high-growth
opportunities, such as data, and in national service delivery capabilities.
These investments will help bolster our top line revenue growth longer term and
enhance our competitive positioning as well."

         GTE's decision to moderate the pace of its nationwide expansion is
based on a number of factors, including the high current cost of acquiring and
provisioning, on a resale basis, customers outside of GTE franchises; the
complexity of interconnection; the evolving regulatory environment; and the
belief that its out-of-franchise expenditures will be more cost-effective after
the merger with Bell Atlantic. The company plans in 1999 to expand its
competitive local exchange carrier (CLEC) operations to three additional states,
focusing more heavily on in-franchise opportunities, until regulatory pricing
rules affecting out-of-franchise initiatives are better defined. Additionally,
GTE will continue to invest in service and delivery platforms that will lower
future costs and which are essential to becoming a national, full-service
provider.

         In its fast-growing long distance business, GTE said it will take two
key steps to more appropriately match acquisition costs for long-distance
customers with the expected revenue stream: the company will increase its focus
on selling long distance as part of a bundled service package, and will use more
cost-efficient, direct sales channels. Because of these steps, GTE will be
growing its long-distance customer base in a more cost-effective manner.

         "We are confident in our ability to be a profitable growth company and
value generator for our shareholders," Mr. Lee said. "We have made pro-active
decisions to sacrifice short-term revenue growth for short- and long-term
earnings growth, even as we work to complete our merger with Bell Atlantic.
These actions, as well as our continued investments, will better position us for
the further acceleration in revenue and EPS growth that we have projected for
the combined company."

                                                                          -more-

<PAGE>   3
GTE-3


         With 1997 revenues of more than $23 billion, GTE is one of the world's
largest telecommunications companies and a leading provider of integrated
telecommunications services. In the United States, GTE provides local service in
28 states and wireless service in 17 states; nationwide long-distance and
internetworking services ranging from dial-up Internet access for residential
and small-business consumers to Web-based applications for Fortune 500
companies; as well as video service in selected markets.

         Outside the United States, the company serves more than 9 million
telecommunications customers. GTE is also a leader in government and defense
communications systems and equipment, directories and telecommunications-based
information services, and aircraft-passenger telecommunications.

                                      # # #

NOTE: The revenue objective outlined here from "Continuing Operations"
normalizes for the effects of actions GTE outlined today as well as those
announced previously, such as the repositioning and disposition of certain
non-strategic GTE properties. This guidance also reflects the de-consolidation
of BC TEL's revenues due to its merger with TELUS. In addition, GTE will
increase its ownership of CTI Holdings S.A., a wireless venture in Argentina,
resulting in the need to consolidate CTI's revenues into GTE's fourth quarter
financial results. The impact of this change is also reflected in the revenue
objective.

- --------------------------------------------------------------------------------

FORWARD LOOKING STATEMENTS:


This announcement contains forward-looking statements. For each of these
statements, GTE claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995. If
future events and actual performance differ materially from GTE's assumptions,
actual results could vary significantly from the performance projected in these
forward-looking statements.


                                                                          -more-

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GTE-4


The following important factors could affect the future results of GTE and the
combined company following GTE's proposed merger with Bell Atlantic, and could
cause these results to differ materially from those expressed in this
announcement; materially adverse changes in economic conditions; material
changes in available technology; the final resolution of certain federal, state
and local regulatory initiatives and proceedings pertaining to, among other
matters, the terms of interconnection, access charges, universal service,
unbundled network elements and resale rates; the effects of competition in GTE's
markets; the success of GTE's efforts in achieving year 2000 compliance; the
timing of, and regulatory and other conditions associated with, the completion
of the merger with Bell Atlantic; and the success of GTE's efforts to provide a
bundle of products and services through GTE's CLEC.

GTE's Report on Form 10-Q for the quarter ended September 30, 1998 discusses in
greater detail the important factors that could cause its actual results to
differ materially.


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