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: July 20, 1995
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 behalf by the
undersigned hereunto duly authorized.
BELL ATLANTIC CORPORATION
By: /s/ William O. Albertini
William O. Albertini
Vice President and Chief
Financial Officer
Date: Jul 20, 1995
Item 5. Other Events.
Attached as an exhibit hereto is a copy of a press release issued by Bell
Atlantic Corporation (the Company) dated July 20, 1995 announcing second
quarter earnings.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(20) Press Release dated July 20, 1995
EXHIBIT INDEX
Exhibit No. Description Page No.
(20) Press Release dated
July 20, 1995
FOR IMMEDIATE RELEASE: July 20, 1995 Contact:
David Stakun
(215) 963-6639
STRONG EARNINGS GROWTH CONTINUES AT BELL ATLANTIC
Philadelphia -- Supported by healthy volumes in network services and growing
profitability in cellular operations, second-quarter 1995 earnings at Bell
Atlantic Corporation (NYSE: BEL) grew 7.4 percent, to $1.02 per share from $.95
in the second quarter of 1994. Net income increased 7.7 percent, to $447.1
million from $415.4 million in the same period of 1994.
After adjusting for the favorable impact of changes in the exchange rate
of the peso on Bell Atlantic's ownership share of the estimated dollar
denominated debt of Grupo Iusacell, Mexico's largest independent cellular
provider, earnings per share for the second quarter of 1995 were $1.01, a 6.3
percent increase compared with the year-ago result. Adjusted net income for the
period was $441.9 million, up 6.4 percent.
Highlights of Bell Atlantic's second-quarter financial results, excluding
the effect of substantial 1994 downsizing of financial services and other
non-core businesses, were:
Operating income of $853.8 million, an increase of 7.6 percent over
second-quarter 1994 results;
Operating cash flow (EBITDA) growth of 7.2 percent;
And an increase in operating revenues of 5.6 percent.
We are squarely on track to achieve our key financial and operating objectives
for the year, said Raymond W. Smith, Bell Atlantic chairman and chief executive
officer. Effective cost controls and strong business volumes in our network
and wireless businesses are clearly evident in the results for the second
quarter. Particularly noteworthy is our strong showing in wireless, which bodes
very well for our newly launched joint venture, Bell AtlanticNYNEX Mobile.
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On July 1, Bell Atlantic Mobile and NYNEX Mobile Communications combined
their domestic cellular properties to form Bell Atlantic NYNEX Mobile. Headed
by President and Chief Executive Officer Dennis F. Strigl, formerly president
and CEO of Bell AtlanticMobile, the new company serves nearly 3 million
customers and covers a population (POPs)of 53 million in seven of the 20 largest
U.S. cellular markets.
Network Highlights
In Network, revenue increases resulted from solid growth in access lines
and minutes of use, intensified marketing and increased customer demand for new
services.
Operating revenues were $3.1 billion, up 3.3 percent from second-quarter 1994
results;
Operating expenses, including depreciation, were $2.3 billion, up 3.0 percent
from year-ago levels;
Cash operating expenses increased 1.6 percent from the second quarter of 1994,
to $1.7 billion;
Access minutes of use grew 8.6 percent compared with the same period a year
ago;
Access lines in service as of June 30, 1995, totaled 19.5 million, an increase
of 3.1 percent over the last 12 months. This increase includes Centrex growth
of 10.2 percent;
Second-quarter revenues from value-added services such as Caller ID and
messaging services grew nearly 12 percent compared with the same quarter last
year, excluding special items. An increase in promotional efforts contributed
to the addition of 250,000 Caller ID customers during the period, bringing
total subscribers to 1,140,000. Promotions for second residential telephone
lines and residential ISDN are expected to further stimulate revenues in the
second half of 1995;
ISDN lines in service at the end of the quarter numbered moe than 120,000, up
75 percent from year-ago levels.
Wireless Highlights
In its final quarter prior to combining with NYNEX Mobile, Bell Atlantic
Mobile continued to post strong customer and operating income growth.
162,900 subscribers were added in the second quarter of 1995, for a total of
1.96 million and an annualized growth rate of 55 percent;
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Total revenues increased 35 percent over the second quarter a year earlier,
adjusted for the May 1, 1994, restructuring of the NYSMSA partnership with
NYNEX (see Bell Atlantic Cellular Operations table attached.);
Similarly adjusted, operating income of $63.3 million represents an increase of
$30.9million over second-quarter 1994 levels.
Key Strategic Initiatives
In addition to the strong performance of our traditional core businesses,
we're very pleased with steps we've taken during the second quarter to position
Bell Atlantic to capture exciting growth opportunities in emerging markets,
Smith said.
In wireless, we advanced our effort to expand nationwide when PCS PrimeCo.,
the partnership between Bell Atlantic, NYNEX, AirTouch Communications and
US WEST, chose CDMA technology for deployment throughout its PCS
network. This technology provides the interoperability necessary to create a
truly seamless nationwide system.
In Network, we continue to gain valuable ground in the video and entertainment
business. We kicked off our market trial of interactive video services in
Fairfax County, Va., where customer sign-ups resulting from a direct mail
campaign are exceeding expectations. And we completed stage one of a two-stage
joint investment with NYNEX in CAI Wireless Systems, a wireless cable company
whose technology will afford us cost-effective, widespread early entry into the
video business.
On the national scene, along with our partners NYNEX and Pacific Telesis, we
launched our interactive television brand, TELE-TV, which is also the name of
our national, jointly held home entertainment company headed by Howard
Stringer, formerly of CBS.
And internationally, we are encouraged by the prospect of improving economic
conditions in Mexico. We're also pleased with the progress OmniTel is making
in the build-out of its wireless network in Italy, which is scheduled to be
operational in the fourth quarter of this year.
Bell Atlantic Corporation is at the forefront of the new communications,
entertainment and information industry. The Philadelphia-based company provides
a full array of local telecommunications services throughout the mid-Atlantic
region and is majority owner of one of the nation's largest cellular carriers.
Bell Atlantic is a partner in leading national alliances that will offer
wireless communications, as well as video and interactive programming. Bell
Atlantic also has substantial holdings and operations in international markets
and provides services for customer-based information technology.
INTERNET USERS: Bell Atlantic news releases, executive speeches, news
media contacts and other useful information are available on Bell Atlantic's
media relations World Wide Web site (http://www.ba.com), by gopher
(gopher://ba.com) or by ftp (ftp://ba/pub).
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BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited)
(In millions, except per-share amounts)
Three months ended Six months ended
June 30 June 30
1995* 1994 1995* 1994
Operating Revenues
Transport Services:
Local service $1,105.3 $1,081.9 $2,186.6 2,144.2
Network access 872.4 783.7 1,693.3 1,587.6
Toll service 359.3 401.8 726.3 813.1
Ancillary Services:
Directory advertising 276.7 269.0 552.4 536.6
Other 119.4 104.9 244.8 198.9
Value-Added Services 330.9 323.4 657.6 631.4
Wireless Services 336.5 259.1 628.0 495.8
Other Services 164. 0 206.2 325.2 442.0
Total Operating Revenues 3,564.5 3,430.0 7,014.2 6,849.6
Operating Expenses
Employee costs,
including benefits and taxes 1,060.7 1,028.8 2,094.9 2,076.7
Depreciation and amortization 681.7 649.1 1,349.4 1,297.7
Other 979.1 954.6 1,895.4 1,928.9
Total Operating Expenses 2,721.5 2,632.5 5,339.7 5,303.3
Operating Income 843.0 797.5 1,674.5 1,546.3
Equity in income of affiliates 22.5 17.1 15.8 39.0
Other income (expense), net 5.8 35.7 6.9 27.6
Interest expense 147.7 140.3 286.6 283.8
Income before provision for income
taxes and extraordinary item 723.6 710.0 1,410.6 1,329.1
Provision for income taxes 276.5 294.6 549.0 517.8
Income before extraordinary item 447.1 415.4 861.6 811.3
Extraordinary item:
Early extinguishment of debt, net of tax -- -- -- (6.7)
Net Income $447.1 $415.4 $861.6 $804.6
*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."
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BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited) -- continued
(In millions, except per-share amounts)
Three months ended Six months ended
June 30 June 30
1995* 1994 1995* 1994
Per Common Share Amounts
Income before extraordinary item $1.02 $.95 $1.97 $1.86
Extraordinary item -- -- -- (.02)
Net Income $1.02 $.95 $1.97 $1.84
Dividends declared per common share $.70 $.69 $1.40 $1.38
Weighted average number of common
and equivalent shares outstanding 437.7 437.1 437.6 437.2
Other Selected Data
June 30,
1995 1994
Return on Average Common Equity
Three months ended 28.4% 19.5%
Six months ended 27.5% 19.0%
Total Assets (millions) $24,819.9 $28,685.6
Total Employees 72,300 73,100
* 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.
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BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (unaudited)
(In millions)
Six months ended June 30,
1995 1994
Cash Flows from Operating Activities
Net income $861.6 $804.6
Depreciation and amortization 1,349.4 1,297.7
Extraordinary item -- 6.7
Other, net (373.3) (581.3)
Net Cash Provided by Operating Activities 1,837.7 1,527.7
Net Cash Used in Investing Activities (1,863.7) (128.6)
Net Cash Used in Financing Activities (55.4) (1,292.3)
Increase (Decrease) in Cash and Cash Equivalents (81.4) 106.8
Cash and Cash Equivalents, Beginning of Period 142.9 146.1
Cash and Cash Equivalents, End of Period $61.5 $252.9
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BELL ATLANTIC CELLULAR OPERATIONS
Selected Operating Statistics and Financial Data (unaudited)
(In thousands, except percentages and data per subscriber)
Three months ended June 30,
Normalized
1995 1994 % change % change
Selected Operating Data
Owned POPs(1) 35,677 34,841 2
Controlled MSA POPs(1) 32,779 32,519 1
Controlled RSA POPs(1) 4,278 3,652 17
Controlled Penetration(1)(2) 5.37% 3.59% 49
Controlled Subscribers(3) 1,991.2 1,300.3 53 55
Subscribers(4) 1,776.8 1,169.7 52
Churn 1.43% 1.48% (3)
Revenues per Subscriber
per Month(5) $65 $74 (12) (12)
Acquisition Cost per Gross Add(6) $226 $255 (11) (12)
Selected Financial Data
Revenue(7) $332,737 $255,663 30 35
Operating Income(8) $63,332 $34,560 83 96
Operating Cash Flow(9)(10) $102,604 $67,538 52 57
Operating Cash Flow Margin(11) 39.69% 33.44% 19 19
Explanation of Normalization Adjustments:
On May 1, 1994, the NYSMSA Partnership (the Partnership) between Bell
Atlantic Mobile and NYNEX Mobile was restructured to include both companies
reseller operations. Prior to restructuring, the Partnership provided wholesale
services only, and both companies separately provided reseller services
throughout the Partnership's operating territory. In the above table, 1994
data and statistics include Bell Atlantic's Northern New Jersey reseller
operations. Normalized 1994 data and statistics, indicated in the Normalized
Percent Change column in the above table and described in the footnotes below,
exclude Bell Atlantic Mobile's Northern New Jersey reseller operations. Bell
Atlantic owns a 36 percent interest in the partnership and reports results
below the line as equity income in unconsolidated subsidiaries.
Footnotes:
(1) 1995 and 1994 Controlled MSA POPs include approximately five million
Northern New Jersey POPs managed by Bell Atlantic Mobile pursuant to the
restructured NYSMSA partnership as described above.
(2) Controlled Penetration is calculated using controlled subscribers
(including those managed by Bell Atlantic pursuant to the restructured
NYSMSA partnership) divided by total controlled POPs.
(3) Controlled Subscribers for 1995 and 1994, included in the above table,
include all Northern New Jersey subscribers that are managed by Bell
Atlantic, but are part of the NYSMSA partnership as described above.
Excluding customers previously managed by NYNEX, the normalized 1995 and
1994 subscribers would have been 1,956.6 and 1,265.7, respectively.
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BELL ATLANTIC CELLULAR OPERATIONS
Footnotes (continued):
(4) Subscribers for 1995 and 1994 exclude all Northern New Jersey subscribers
that are managed by Bell Atlantic, but are part of the NYSMSA partnership
as described above. Penetration excluding the Northern New Jersey POPs
and subscribers is 5.56 percent and 3.75 percent for 1995 and 1994,
respectively.
(5) 1994 normalized revenue per subscriber is $74.
(6) Acquisition costs include commission expense and net margin on sale of
customer equipment 1994 normalized acquisition cost per gross add is $257.
(7) Revenue includes service revenues, incollect, outcollect, and equipment
revenue, but excludes paging revenue. 1994 normalized revenue is $246,656.
(8) 1994 normalized Operating Income is $32,369.
(9) Operating Cash Flow equals Operating Income plus depreciation and
amortization.
(10) 1994 normalized Operating Cash Flow is $65,359.
(11) Operating Cash Flow Margin uses revenues which consist primarily of
service revenues, outcollect revenue, and net margin on customer equipment
sales. 1994 normalized Operating Cash Flow Margin is 33.47 percent.
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