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: October 20, 1994
Exact name of registrant
as specified in its charter: BELL ATLANTIC CORPORATION
Commission File No.: 1-8606
State of Incorporation: Delaware
IRS Employer Identification No.: 23-2259884
Address of principal
executive offices: 1717 Arch Street
Philadelphia, Pennsylvania
Zip Code 19103
Registrant's telephone number,
including area code: (215) 963-6000
Former name or former address,
if changed since last report: N/A
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its by the undersigned
duly authorized.
BELL ATLANTIC CORPORATION
By: /s/ William O. Albertini
William O. Albertini
Vice President and Chief
Financial Officer
Date: October 20, 1994
Item 5. Other Events.
Attached as an exhibit hereto is a copy of a press release issued by
Bell Atlantic Corporation (the Company) dated October 19, 1994 announcing
third quarter earnings.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(20) Press Release dated October 19, 1994
EXHIBIT INDEX
Exhibit No. Description Page No.
(20) Press Release dated
October 19, 1994
Contact: Cynthia M. Ciangio
(215) 963-6306
For Release: Immediately
October 19, 1994
BELL ATLANTIC REPORTS STRONG THIRD-QUARTER 1994 RESULTS WITH
RECORD WIRELESS GROWTH
PHILADELPHIA, October 19, 1994 -- Bell Atlantic Corporation (NYSE: BEL)
today said that solid 1994 third-quarter results before previously
announced charges reflect strong demand in its network business and
record customer growth in its wireless operations.
The company reported a 1994 third-quarter loss of $4.29 per share,
including previously announced non-cash charges of $5.20 per share.
Earnings for the quarter, excluding these charges, were $.91 per share.
For purposes of comparability, reported earnings of $.87 per share for the
third quarter of 1993 should be reduced to $.86 per share to reflect $.03
per share for the effect in the current quarter of the company's recent
investments in Grupo Iusacell, S.A. de C.V., partially offset by an
extraordinary charge of $.02 per share for the early retirement of debt.
After adjustments in both years, earnings for the third quarter of 1994
were 5.8 percent higher than the same period in 1993 and year-to-date
earnings were 9.5 percent higher than the first nine months of 1993.
"The sound fundamentals of our core businesses give us confidence that,
excluding these special charges, we will meet our target for earnings
growth in 1994," said Bell Atlantic Chairman and Chief Executive Officer
Raymond W. Smith. "Our recently announced strategic initiatives are
major steps in an aggressive, multi-year campaign to respond to
competition in our traditional markets and to improve our position to
pursue opportunities in new high-growth markets to enhance shareowner
value."
These initiatives support plans to aggressively deploy new technology,
reduce costs while improving customer service levels, and adopt
accounting methodology appropriate for a competitive rather than a
regulated industry environment. These charges included: $4.92 per share
(or $2.15 billion) related to the discontinuance of accounting for the
effects of certain types of regulation and the revaluation of telephone
plant; $.23 per share (or $99.5 million) for costs associated with the
separation of employees who are entitled to benefits under existing
separation pay plans, including those who are part of a workforce
reduction of 5,600 employees over a three-year period; and $.05 per share
(or $22.3 million) related to the disposition of certain non-strategic
investments.
After comparability adjustments in both periods, net income was $397.4
million in the third quarter of 1994, an increase of 5.8 percent over the
third quarter of 1993. Total operating revenues for the third quarter of
1994 were $3.42 billion, an increase of 3.8 percent compared with $3.29
billion for the same period last year. Excluding the company's financial
services businesses which have been de-emphasized, revenues increased
by 6.0 percent.
The company's wireless business had its third consecutive quarter of
record growth, with the customer base increasing 57.5 percent over the
same date last year for a total of 1.45 million subscribers at September
30, 1994. Revenue in the wireless business increased 45.6 percent over
the third quarter of 1993.
"Our wireless business continues to show very strong results and
accelerated growth patterns," Smith said. "We have set an objective for
domestic customer growth of between 55 percent and 60 percent for the
calendar year, and we are confident that we can achieve this growth. In
August, we completed the final stage of our acquisition of a 42 percent
economic interest and 44 percent voting interest in Grupo Iusacell, S.A. de
C.V., Mexico's largest independent cellular company. This is further
demonstration of our plans to be a leading wireless carrier in the North
American marketplace."
Total operating expenses were $2.82 billion for the third quarter of 1994,
compared with $2.57 billion for the third quarter of 1993. Excluding the
charge in the third quarter of 1994 for costs associated with the
separation of employees, operating expenses increased by 3.6 percent, or
$94 million.
Total minutes of use increased by 9.0 percent over the third quarter of
1993. Access lines at the end of the quarter totalled 19.0 million, an
increase of 514,100 lines, or 2.8 percent, versus the end of the third
quarter of 1993. Business and Centrex access lines increased 3.6 percent
and 5.4 percent, respectively, over totals at the end of the third quarter of
1993.
Smith said that he sees significant opportunities in enhanced
entertainment and interactive multimedia on the horizon, and the company
continues to pursue these higher growth markets. "We have had a very
successful technical trial of our video-on-demand product and are
anticipating FCC approval for a market trial in northern Virginia. We're
continuing to pursue both national and global affiliations and partnerships
that will create the content, establish the standards, and develop the
operating platforms that will drive market acceptance of interactive
multimedia," Smith said. "We are seeking ways to extend our market reach
and range of expertise, as well as spread the development costs of the
new businesses, leveraging our existing strengths and putting us on a
higher growth curve in the future."
Bell Atlantic Corporation, based in Philadelphia, is the parent of
companies which provide a full array of local exchange
telecommunications services in New Jersey, Pennsylvania, Delaware,
Maryland, Virginia, West Virginia, and Washington, D.C. The corporation is
at the forefront of developing a variety of new products, including video,
entertainment, and information services.
Bell Atlantic also is the parent of one of the nation's largest cellular
carriers and has an ownership position in cellular properties
internationally, including a 42 percent economic interest in Grupo
Iusacell, S.A. de C.V., Mexico's largest independent cellular company. In
addition, Bell Atlantic owns an interest in Telecom Corporation of New
Zealand and is the parent of companies that provide business systems
services for customer-based information technology throughout the U.S.
and internationally.
###
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income (unaudited)
(In millions, except per-share amounts)
Three months ended Nine months ended
September 30 September 30
1994* 1993 1994* 1993**
Operating Revenues
Communications and Related
Services $3,374.6 $3,181.1 $9,966.0 $9,340.3
Financial, Real Estate,
and Other Services 40.7 108.5 216.6 332.7
Total operating revenues 3,415.3 3,289.6 10,182.6 9,673.0
Operating Expenses
Employee costs, including benefits
and taxes 1,236.2 1,036.6 3,312.9 3,008.6
Depreciation and
amortization 674.7 657.1 1,972.4 1,895.3
Other 913.4 875.2 2,760.0 2,578.7
Total operating expenses 2,824.3 2,568.9 8,045.3 7,482.6
Operating Income 591.0 720.7 2,137.3 2,190.4
Other income and expense,
net 2.5 25.2 69.1 59.0
Interest expense, excluding
Financial Services 153.6 151.4 437.4 470.8
Income before provision for income
taxes, extraordinary items, and
cumulative effect of changes in
accounting principles 439.9 594.5 1,769.0 1,778.6
Provision for income taxes 164.2 207.8 682.0 634.2
Income before extraordinary items and
cumulative effect of changes in
accounting principles 275.7 386.7 1,087.0 1,144.4
Extraordinary items:
Discontinuation of regulatory accounting
principles, net of tax (2,150.0) -- (2,150.0) --
Early extinguishment of debt,
net of tax -- (8.2) (6.7) (54.3)
Total extraordinary items (2,150.0) (8.2) (2,156.7) (54.3)
Cumulative effect of changes in
accounting principles:
Income taxes -- -- -- 65.2
Post-employment benefits,
net of tax -- -- -- (85.0)
Total cumulative effect of
changes in accounting
principles -- -- -- (19.8)
Net Income (Loss) $(1,874.3) $378.5 $(1,069.7 )$ 1,070.3
* Effective August 1, 1994, the company's telephone subsidiaries
discontinued application of Statement of Financial Accounting Standards
No. 71, "Accounting for the Effects of Certain Types of Regulation."
** Restated in the fourth quarter of 1993 to reflect the cumulative effect
of the adoption of Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Post-employment Benefits," effective January
1, 1993.
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income (unaudited) -- continued
(In millions, except per-share amounts)
Three months ended Nine months ended
September 30 September 30
1994* 1993 1994* 1993**
Per Common Share Amounts
Income before extraordinary items
and cumulative effect of changes in
accounting principles $.63 $.89 $2.49 $2.62
Extraordinary items (4.92) (.02) (4.94) (.12)
Cumulative effect of changes in
accounting principles -- -- -- (.04)
Net Income (Loss) $(4.29) $.87 $(2.45) $2.46
Dividends declared per
common share $.69 $.67 $2.07 $2.01
Weighted average number of
common and equivalent
shares outstandin 437.3 436.4 437.3 435.9
Other Selected Data
September 30
1994 1993
Return on Average Common Equity
Three months ended (10.1)% 18.6%
Nine months ended ( 8.3)% 18.0%
Total Assets (millions) $24,517.9 $28,776.3
Total Employees 72,900 73,200
* Effective August 1, 1994, the company's telephone subsidiaries
discontinued application of Statement of Financial Accounting Standards
No. 71, "Accounting for the Effects of Certain Types of Regulation."
** Restated in the fourth quarter of 1993 to reflect the cumulative
effect of the adoption of Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Post-employment Benefits," effective
January 1, 1993.
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (unaudited)
(In millions)
Nine Months Ended September 30,
1994 1993
Cash Flows from Operating Activities
Net income (loss) $(1,069.7) $1,070.3
Depreciation and amortization 1,972.4 1,895.3
Extraordinary items 2,156.7 54.3
Cumulative effect of changes in
accounting principles -- 19.8
Other, net (514.6) 5.8
Net Cash Provided by Operating
Activities 2,544.8 3,045.5
Net Cash Used in Investing
Activities (956.6) (1,433.0)
Net Cash Used in Financing
Activities (1,508.2) (1,637.4)
Increase (Decrease) in Cash and
Cash Equivalents 80.0 (24.9)
Cash and Cash Equivalents,
Beginning of Period 146.1 296.0
Cash and Cash Equivalents,
End of Period $ 226.1 $ 271.1
BELL ATLANTIC MOBILE
Selected Operating Statistics (unaudited)
(Reflects restructure of NYSMSA partnership on May 1, 1994)
(In thousands, except percentages and revenue per subscriber)
September 30
1994 1993 Percent Change
Total Owned POPs(1) 35,064 35,071 0.0
Controlled MSA POPs(1) 32,519 27,883 16.6
Controlled RSA POPs(1) 3,875 3,539 9.5
Controlled
Penetration(1)(3) 3.98% 2.64% 50.9
Total Subscribers(2) 1,449.7 892.7 62.4 [57.5% normalized]
Third-Quarter Cellular Operations
Revenue(4) $267,577 $201,005 33.1 [45.6% normalized]
Third-Quarter Cellular Operations Revenue
per Subscriber
per Month(4) $72 $78 (7.7) [(5.9%) normalized]
Uncollectibles for the quarter ended September 30, 1994, were less than 2
percent of total revenue, and average monthly churn for the quarter
remained below 2 percent of the total customer base.
(1) 1994 population data source is different from 1993 source. 1994
Controlled MSA POPs include approximately 5 million Northern New Jersey
POPs managed by Bell Atlantic Mobile pursuant to the restructured
NYSMSA partnership arrangement, effective May 1, 1994.
(2) 1994 includes subscribers managed by Bell Atlantic Mobile pursuant
to the restructured NYSMSA partnership arrangement. Some of these
customers were managed by NYNEX Mobile prior to 1994. 1993 includes
subscribers from Bell Atlantic Mobile's Northern New Jersey reseller
operation that, effective May 1, 1994, are part of the NYSMSA partnership.
Excluding 1994 customers previously managed by NYNEX, the normalized
growth rate would have been 57.5 percent.
(3) 1993 Controlled Penetration is calculated using controlled
subscribers over total controlled POPs.
(4) Includes Northern New Jersey reseller operation for three months in
1993. Normalized growth rates for revenue and revenue per subscriber
would have been 45.6 percent and -5.9 percent respectively.
