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 23, 1996
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
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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 by the undersigned duly authorized.
BELL ATLANTIC CORPORATION
By: /s/ William O. Albertini
William O. Albertini
Vice President and Chief
Financial Officer
Date: January 23, 1996
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Item 5. Other Events.
Attached as an exhibit hereto is a copy of a press
release issued by Bell Atlantic Corporation (the "Company")
dated January 23, 1996 announcing annual earnings for 1995.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(20) Press Release dated January 23, 1996
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EXHIBIT INDEX
Exhibit No. Description Page No.
(20) Press Release dated
January 23, 1996
<PAGE>
FOR IMMEDIATE RELEASE Contact:
January 23, 1996 David Stakun
215-963-6639
[email protected]
Bell Atlantic Achieves Record Earnings Growth in 1995
Philadelphia -- Bell Atlantic Corporation (NYSE: BEL)
announced adjusted fourth-quarter net income of $395.4
million, up 25.6 percent over 1994 results for the same
period, excluding a 1995 debt refinancing charge of $3.5
million, or $.01 per share. Similarly adjusted, earnings per
share grew 25.0 percent, from $.72 in the fourth quarter of
1994 to $.90 in the quarter just ended.
The exceptionally strong fourth quarter capped a year of
record earnings growth, in which reported net income was $1.86
billion, or $4.24 per share, driven by record wireless
subscriber gains, increasing demand for network services, and
significant increases in operating efficiencies. Adjusting for
certain one-time items, 1995 net income rose 11.4 percent and
earnings per share, 11.2 percent over 1994 levels. These
increases include the negative financial impact in both years
of the decline in the exchange rate of the Mexican peso on the
company's interest in Grupo Iusacell.
"Results for 1995 demonstrate the tremendous vitality of
our business," said Chairman and Chief Executive Officer
Raymond W. Smith. "We achieved double-digit growth despite
sizable price reductions, despite foreign exchange losses,
despite the channeling of resources toward forming Bell
Atlantic NYNEX Mobile, and despite significant development
expenses in our new business ventures.
"Expanding volumes in the Network business and the
increasing contribution of wireless investments to our overall
profitability testify to the success of our strategies to
maximize performance in our core businesses as we prepare for
open markets and the accompanying new opportunities."
Bell Atlantic's reported 1995 results include an
after-tax gain of about $200 million, or $.46 per share, on
the sale of overlapping cellular properties in connection with
the July 1, 1995, combination of Bell Atlantic Mobile and
NYNEX Mobile Communications; non-recurring charges of
approximately $40 million, or $.09 per share, associated with
certain business development ventures and contracts; and a
debt refinancing charge of $3.5 million, or $.01 per share.
Excluding these one-time items, 1995 adjusted earnings were
$1.70 billion, or $3.88 per share.
For 1994, the company posted a loss of $754.8 million, or
$1.73 per share, which included non-cash charges of $2.28
billion, or $5.22 per share, relating to the discontinuation
of regulatory accounting practices, employee separation costs,
the disposition of non-core businesses and debt refinancing.
Excluding these one-time charges for comparison purposes,
adjusted 1994 earnings were $1.53 billion, or $3.49 per share.
Network Highlights
Bell Atlantic's Network businesses achieved revenue
growth of 2.9 percent in 1995, highlighted by 3.2 percent
growth in the fourth quarter.
"While price reductions in interstate access and
intrastate toll lowered reported revenue growth in 1995, our
aggressive marketing programs drove volumes sharply higher in
other key product and service areas," said Bell Atlantic Vice
Chairman James G. Cullen. "Looking ahead, competitive prices
will allow us to take full advantage of new market
opportunities with the anticipated passage of federal
telecommunications legislation."
. Access lines in service as of December 31, 1995, totaled
19,820,000, an increase of 3.4 percent over the last 12
months. This increase includes a gain of more than
234,000 second residential lines and Centrex growth of
10.5 percent.
. Access minutes of use increased nearly 8 percent for the
year, while access revenues were up nearly 5 percent.
. Total ISDN (integrated services digital network) lines in
service at year's end exceeded 145,000, increasing 48
percent in 1995.
"As the leader in ISDN deployment, we're addressing the
data connectivity needs of important high-usage customers,
including government, business, and consumers who telecommute,
access the Internet, and subscribe to on-line services," noted
Cullen. "We will expand our market presence in 1996 and
beyond with products and services that meet growing demands
for even higher bandwidth and better choices for on-line
access."
. Revenues from vertical services such as Caller ID, Answer
Call and Call Waiting increased 15.4 percent. Caller ID
penetration nearly doubled in 1995, reaching 12.1
percent, while Answer Call revenues increased almost 24
percent over 1994 levels.
. Network integration revenues, exceeding $140 million,
were about 67 percent higher than in 1994.
Driven by a 4.9 percent net reduction in work force in
1995, Network operating expenses totaling $9.3 billion were up
just 2.3 percent from year-ago results, adjusting for
extraordinary charges in 1994 as noted above. Cash operating
expenses were up only 1.8 percent, despite intensified
marketing efforts, development costs for long-distance and
video businesses, and outlays for strategic operating systems.
Access lines per network employee grew 9.9 percent during
1995, to 343 from 312.
Cash operating expenses per access line fell 2.4 percent,
to $320 from $328 in 1994.
Wireless Highlights
Bell Atlantic's domestic wireless investments contributed
more than half of the company's earnings growth for 1995.
(Since July 1, 1995, when Bell Atlantic's domestic cellular
properties were combined with those of NYNEX to form Bell
Atlantic NYNEX Mobile, returns to Bell Atlantic from the joint
venture -- along with those of the company's other wireless
holdings -- are reported as "Equity in Income of Affiliates.")
"Our new wireless joint venture achieved record
subscriber gains and improved profitability, even as
competition in our serving area intensified," said Bell
Atlantic Vice Chairman Lawrence T. Babbio, Jr. "These results
demonstrate that Bell Atlantic NYNEX Mobile has the marketing
and operating talent as well as the service quality needed to
capture future growth opportunities and meet untapped market
demand for wireless communication."
The following highlights of Bell Atlantic NYNEX Mobile's
1995 performance contain comparative financial and operating
statistics derived as if the joint venture had existed prior
to July 1, 1995.
A record one million cellular subscribers were added during
the year, approximately 383,000 in the fourth quarter alone,
representing the largest quarterly subscriber gain ever
reported by a domestic wireless communication company. Total
subscribers rose to 3.36 million at year-end, for an annual
growth rate of 43.4 percent, among the highest in the wireless
industry.
Operating cash flow margin was 40.1 percent, up from 28.8
percent in 1994, reflecting annual revenue growth of 30.4
percent and a reduction in acquisition cost per subscriber of
12.1 percent.
Operating cash flow increased 82.9 percent above 1994 levels.
One-third of the new customers added in the fourth quarter are
subscribers to TalkAlong(SM) cellular service, which was made
available in major retail outlets in time for the holiday
season. TalkAlong subscribership more than tripled in the
fourth quarter, reaching 187,000.
"With its unique combination of affordable price and
user-friendliness, TalkAlong positions us very well to compete
with emerging PCS carriers," Babbio said. "This breakthrough
product will continue to play a major role in making wireless
communications a mass-market phenomenon."
In other Bell Atlantic wireless investments:
The company's proportionate worldwide POPs (population in
markets where a carrier is licensed) grew to more than 85
million in 1995, including an increase of more than 13 million
with the awarding of PCS licenses in 11 major markets to PCS
PrimeCo, L.P., Bell Atlantic's alliance to build a national
wireless network.
The PCS PrimeCo alliance made history by connecting the
first wireless calls placed over a PCS network using
high-clarity, high-capacity code division multiple access
(CDMA) technology. In the third quarter, PCS PrimeCo agreed
to award contracts to AT&T Network Systems and Motorola to
provide network equipment using CDMA architecture.
Omnitel Pronto Italia, Bell Atlantic's consortium to
operate the second wireless license in the high-growth Italian
marketplace, launched commercial service in December and had
60,000 subscribers by year-end.
"I'm excited about Bell Atlantic's prospects going
forward," Smith concluded. "Our stake in the high-growth
wireless marketplace is one of the largest in the world, and
our network business is in an excellent position to capture
attractive new opportunities in long distance, video services
and the expanding market for data connectivity. I'm confident
that our portfolio of businesses will create lasting
shareowner value for many years to come."
<PAGE>
Bell Atlantic Corporation (NYSE: BEL) is at the forefront
of the new communications, entertainment and information
industry. In the mid-Atlantic region, the company is the
premier provider of local telecommunications and advanced
services. Globally, it is one of the largest investors in the
high-growth wireless communication marketplace. Bell Atlantic
also owns a substantial interest in Telecom Corporation of New
Zealand and is actively developing high-growth national and
international business opportunities in all phases of the
industry.
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.com/pub).
<PAGE>
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited)
(In millions, except per-share amounts)
Three months ended Year ended
December 31 December 31
1995(a) 1994(b) 1995(a) 1994(b)
OPERATING REVENUES
Transport Services:
Local service $1,106.0 $1,077.3 $4,411.2 $4,312.4
Network access 845.2 813.2 3,394.7 3,237.6
Toll service 352.9 365.9 1,435.1 1,555.5
Ancillary Services:
Directory publishing 281.4 275.9 1,107.7 1,084.2
Other 138.4 142.2 553.3 473.6
Value-Added Services 382.6 336.1 1,393.2 1,284.4
----- ----- ------- --------
Network Services Revenues 3,106.5 3,010.6 12,295.2 11,947.7
Wireless Services -- (a) 292.3 628.0(a)1,059.8
Other Services 47.7(c) 183.6(c) 506.3(c) 83.9(c)
------- ------- -------- --------
Total Operating Revenues 3,154.2 3,486.5 13,429.5 13,791.4
OPERATING EXPENSES
Employee costs, including
benefits and taxes 892.5 1,020.2 4,022.0 4,333.1
Depreciation and amort. 635.2 679.7 2,627.1 2,652.1
Other 934.2 1,119.3 3,694.2 4,001.6
------- ------- -------- --------
Total Operating Expenses 2,461.9 2,819.2 10,343.3 10,986.8
Operating Income 692.3 667.3 3,086.2 2,804.6
Equity in income (loss)
of affiliates (a) 62.2 (20.9) 152.5 41.1
Other income, net 7.7 16.1 331.7 23.2
Interest expense 140.5 144.7 561.0 582.1
Income before provision
for income taxes and
extraordinary items 621.7 517.8 3,009.4 2,286.8
Provision for income taxes 226.3 202.9 1,147.6 884.9
Income before
extraordinary items 395.4 314.9 1,861.8 1,401.9
Extraordinary items:
Discontinuation of regulatory accounting
principles, net of tax -- -- -- (2,150.0)
Early extinguishment of debt,
net of tax (3.5) -- (3.5) (6.7)
Total extraordinary items (3.5) -- (3.5) (2,156.7)
NET INCOME (loss) $391.9 $314.9 $1,858.3 $(754.8)
(a) On July 1, 1995, the company contributed its domestic cellular
business to a partnership and accounts for its share of the
partnership's results under the equity method.
(b) Effective August 1, 1994, the telephone subsidiaries discontinued
application of Statement of Financial Accounting Standards No. 71,
"Accounting for the Effects of Certain Types of Regulation."
(c) Includes the following revenues from Bell Atlantic Business Systems
Services, sold in October 1995:
Three months ended Dec. 31 Year ended Dec. 31
1995 1994 1995 1994
$27.2 $127.0 $402.0 $472.4
Other Services revenues also include Financial Services, which were
either fully or significantly divested in 1994.
<PAGE>
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited) -- continued
(In millions, except per-share amounts)
Three months ended Year ended
December 31 December 31
1995(a) 1994(b) 1995(a) 1994(b)
Per Common Share Amounts
Income before
extraordinary items $.90 $.72 $4.25 $3.21
Extraordinary items (.01) -- (.01) (4.94)
Net Income (loss) $.89 $.72 $4.24 $(1.73)
Cash dividends declared
per common share $.70 $.69 $2.80 $2.76
Weighted average number of common
and equivalent shares outstanding 439.8 437.2 438.3 437.2
Per Share Analysis (unaudited)
Earnings (Loss) Per Share,
as Reported $.89 $.72 $4.24 $(1.73)
Adjustments:
Gain on sale of conflicted
cellular properties -- -- (.46) --
Non-recurring business
development charges -- -- .09 --
Discontinuation of regulatory
accounting principles -- -- -- 4.92
Employee severance plan costs -- -- -- .23
Loss on disposition of
non-strategic assets -- -- -- .05
Early extinguishment of debt .01 -- .01 .02
Adjusted Earnings Per Share $.90 $.72 $3.88 $3.49
OTHER SELECTED DATA (unaudited)
December 31,
1995 1994
Return on Average Common Equity
Three months ended 23.2% 19.8%
Year ended 28.6% (9.8)%
Total Assets (in millions) $24,156.8 $24,271.8
Total Employees 61,800 72,300 (c)
(a) On July 1, 1995, the company contributed its domestic cellular
business to a partnership and accounts for its share of the
partnership's results under the equity method.
(b) Effective August 1, 1994, the telephone subsidiaries discontinued
application of Statement of Financial Accounting Standards No. 71,
"Accounting for the Effects of Certain Types of Regulation."
(c) Total Employees in 1994 includes employees of Bell Atlantic Mobile
(3,400), which was contributed to a partnership on July 1, 1995, and
Bell Atlantic Business Systems Services (4,100), which was sold in
October, 1995. These employees are no longer included at December
31, 1995.
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (unaudited)
(In millions)
Year ended December 31,
1995 1994
Cash Flows from Operating Activities
Net income (loss) $1,858.3 $(754.8)
Depreciation and amortization 2,627.1 2,652.1
Extraordinary items, net of tax 3.5 2,156.7
Gain on sale of conflicted cellular properties,
net of tax (200.1) --
Other, net (307.8 (290.7)
Net Cash Provided by Operating Activities 3,981.0 3,763.3
Net Cash Used in Investing Activities (2,090.8) (1,680.5)
Net Cash Used in Financing Activities (1,676.3) (2,086.0)
Increase (Decrease) in Cash
and Cash Equivalents 213.9 (3.2)
Cash and Cash Equivalents, Beginning of Year 142.9 146.1
Cash and Cash Equivalents, End of Year $356.8 $142.9
<PAGE>
BELL ATLANTIC NYNEX MOBILE CELLULAR OPERATIONS PRO FORMA
(unaudited)
The following unaudited pro-forma selected operating and financial data
give effect to the combination of Bell Atlantic Mobile and NYNEX Mobile
Communications prior to July 1, 1995, and have been adjusted for certain
intercompany transactions and the disposition of overlapping properties.
These pro-forma results are an approximate representation of Bell
Atlantic NYNEX Mobile (BANM) results as if the company had been in
existence prior to July 1, 1995.
Three months ended December 31,
1995 1994 % change
Selected Operating Data
Controlled POPs (1) (000) 55,840 55,431 0.7
Owned POPs (2)(000) 53,511 53,102 0.8
Subscribers (000) 3,356 2,340 43.4
Penetration (3) 6.01% 4.22% 42.4
Churn 1.77% 1.80% (1.3)
Revenues per subscriber per month (4) $61 $71 (13.3)
Acquisition cost per gross add (5) $202 $244 (17.3)
Cash expense per subscriber $36 $52 (30.9)
Selected Financial Data
(Dollars in millions)
Operating revenues (6) $537.2 $422.1 27.3
Less: Cost of equipment 87.5 75.3 16.2
Net revenues 449.7 $346.8 29.7
Operating income 132.0 27.3 383.4
Pre-tax income (7) 132.1 24.9 430.0
Operating cash flow (8) 198.9 84.8 134.5
Operating cash flow margin 44% 24% 80.8
Capital expenditures
excluding acquisitions 409.9 248.4 65.0
Year ended December 31,
1995 1994 % change
Selected Operating Data
Controlled POPs (1) (000) 55,840 55,431 0.7
Owned POPs (2)(000) 53,511 53,102 0.8
Subscribers (000) 3,356 2,340 43.4
Penetration (3) 6.01% 4.22% 42.4
Churn 1.75% 1.80% (3.1)
Revenues per subscriber per month (4) $63 $74 (14.8)
Acquisition cost per gross add (5) $213 $242 (12.1)
Cash expense per subscriber $38 $51 (24.9)
<PAGE>
BELL ATLANTIC NYNEX MOBILE CELLULAR OPERATIONS PRO FORMA
(unaudited,continued)
Year ended December 31,
1995 1994 % change
Selected Financial Data
(Dollars in millions)
Operating revenues (6) $1,928.4 $1,478.7 30.4
Less: Cost of equipment 271.2 217.7 24.5
Net revenues 1,657.2 1,261.0 31.4
Operating income 406.1 152.9 165.6
Pre-tax income (7) 379.6 125.4 202.7
Operating cash flow (8) 663.9 363.0 82.9
Operating cash flow margin 40% 29% 39.1
Capital expenditures
excluding acquisitions 707.6 559.2 26.5
Footnotes:
(1) Controlled POPs represent the total number of POPs for markets in
which BANM has operating control.
(2) Owned POPs represent BANM percentage ownership in all licensed
markets.
(3) Penetration is calculated by dividing subscribers by controlled
POPs.
(4) Revenue per subscriber is calculated using service revenues,
incollect roaming, outcollect roaming and equipment revenue.
Incollect roaming revenues were $38.3 million and $163.7 million,
respectively, for the three- and 12-month periods ended 12/31/95 and
$35.2 million and $147.7 million, respectively, for the three- and
12-month periods ended 12/31/94.
(5) Acquisition costs include commission expense and net margin on sale
of customer equipment.
(6) Operating revenues include service revenues, outcollect roaming,
and equipment revenues.
(7) Pre-tax income represents the income distribution to the two equity
partners, Bell Atlantic and NYNEX.
(8) Operating cash flow equals operating income plus depreciation and
amortization.
