SECURITY 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: April 18, 1996
Exact Name of Regustrant
as specified in its charter: BELL ATLANTIC CORPORATION
Commission File Number: 1-8606
State of Incorporation: Delaware
IRS Employer Identification No: 23-2259884
Address of Principal
executive offices: 1717 Arch Street
Phladelphia, PA. 19103
Registrant's telephone number: (215) 963-6000
Former Name or former address,
if changed since last report: N/A
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Item 5. Other Events
Attached as an exhibit hereto is a copy of the press release
issued by Bell Atlantic Corporation (the "Company") dated April 18, 1996
announcing 1st quarter earnings for 1996.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
c) Exhibits
The exhibits identified below, on file with the SEC, are incorporated
herein by reference to exhibits hereto.
(20) Press Release dated April 18, 1996
EXHIBIT INDEX
Exhibit No. Description Page No.
(20) Press Release Dated April 18, 1996
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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 hereunto duly authorized.
BELL ATLANTIC CORPORATION
By /s/ William O. Albertini
Willaim O. Albertini
Executive Vice President and Chief Financial Officer
Date: April 18, 1996
FOR IMMEDIATE RELEASE Contact:
April 18, 1996 David Stakun
215-963-6639
[email protected]
Bell Atlantic First Quarter Net Up 13.5 Percent
Philadelphia -- Surging demand for network connectivity and value-added
communication services, plus continued strong growth in the
Boston-to-Washington, D.C., wireless market, drove first-quarter 1996 net income
at Bell Atlantic Corporation (NYSE: BEL) up 13.5 percent compared with 1995
results for the sameperiod, the company announced. Earnings per share grew 12.6
percent.
Reported net income for the quarter was $470.5 million, or $1.07 per
share,versus $414.5 million, or $.95 per share, a year earlier.
"Our network business is starting a new growth cycle," said Bell Atlantic
Chairman and Chief Executive Officer Raymond W. Smith. "The on-line
revolution is boosting access line gains, while the emergence of the high-value
consumer isdriving penetration of a wide range of value-added, call management
products. Our domestic wireless business continues to write new chapters in its
success story, which we're beginning to see repeated in our international
holdings."
Network Highlights
In the first quarter of 1996, strong business volumes contributed to
revenue growth of 5.7 percent in Bell Atlantic's core Network business.
. Access lines in service on March 31, 1996, topped 20.0 million, up 3.5
percent over the last 12 months. The increase includes Centrex line growth
of 9.9 percent.
. Access minutes of use were up 12.7 percent.
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"The strong revenue growth in Network reflects the renewed vigor of our
regional marketplace," said Vice Chairman James G. Cullen. "Aggressive
marketing and promotional efforts have enabled us to capitalize on the vertical
growth opportunities presented by high-value consumers and expanding needs in
the businessand government markets."
. First-quarter sales of secondary residential telephone lines totaled
205,000, driving penetration to approximately 13 percent from 10 percent a
year ago.
. Revenues from Answer Call and central-office-based services such as Caller
ID and Call Waiting grew more than 23 percent compared with first-quarter
results from 1995.
. At quarter's end, Bell Atlantic had nearly 155,000 ISDN (integrated services
digital network) lines in service, 45 percent higher than the total a year
ago. The company is undertaking several initiatives aimed at accelerating
growth in ISDN connections. In January, it announced a co-marketing
arrangement with Microsoft that allows Windows* users to obtain ISDN
information and service connections more quickly and easily. More recently,
Bell Atlantic announced plans to offer its own brand of Internet access
services; an agreement with Netscape to license that company's navigation
software; and significant price reductions for residential ISDN service.
. In the large-business market, first-quarter revenues from high-speed
Fast-Packet data services doubled.
. Driven by special promotions on feature-rich service packages, small-business
Centrex revenues climbed more than 35 percent over year-earlier results.
<PAGE>
First-quarter Network operating expenses - which included investments in new
billing systems, software upgrades and increased marketing expenses -- totaled
$2.4 billion, up 5.4 percent from 1995 results. Operating cash flow margin was
45.7 percent.
Bell Atlantic continued to achieve operating efficiency gains, as access
lines per network employee increased to 360 from 324 as of March 31, 1995, an
improvement of 11 percent.
"With the enactment of the Telecommunications Act of 1996 in February, I'm
confident Bell Atlantic can achieve even higher levels of Network growth," said
Cullen. "This year, we launched the world's first commercial video network; we
filed to provide long-distance service in several states outside of our region
as we work to meet regulatory requirements to provide in-region service in 1997;
we introduced our own line of comprehensive, easy-to-use, affordable Internet
services; and we'll be in the market with a highly differentiated video service
by next winter."
Wireless Highlights
Bell Atlantic's domestic wireless business posted strong revenue and
subscriber gains and continued to improve operating efficiency in the face of
increasing competition. (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.")
"Bell Atlantic NYNEX Mobile is an unqualified success -- an industry home
run," said Bell Atlantic Vice Chairman Lawrence T. Babbio, Jr. "It continues
to be a growth leader and the model of operating efficiency for all our wireless
investments."
The following highlights of Bell Atlantic NYNEX Mobile's first-quarter
performance contain comparative financial and operating statistics derived as if
the joint venture had existed in the first quarter of 1995.
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. Bell Atlantic NYNEX Mobile added 217,000 new subscribers, 36,000 more than
in the first quarter of 1995, for an annual growth rate of almost 42 percent,
among the highest in the wireless industry. Subscribers as of March 31, 1996,
totaled 3.58 million.
. Operating revenues grew $125 million, or nearly 30 percent, to $550 million.
. Operating cash flow margin was 41 percent, up from 29 percent in the first
quarter of 1995, resulting in a 79 percent increase in operating cash flow.
. In the first quarter, the number of TalkAlong(SM) subscribers nearly doubled,
increasing from 187,000 at the end of 1995 to 363,000 as of March 31, 1996.
"Customers continue to choose Bell Atlantic NYNEX Mobile, despite the
heightened competition we're seeing in the wireless business," said Babbio. "By
introducing easy-to-buy services such as TalkAlong and easy-to-use innovations
such as TalkDial voice-activated dialing, we're constantly enhancing the value
and utility of wireless for both business and consumer users."
On the international front:
. Just four months after launching commercial service, Omnitel Pronto Italia,
Bell Atlantic's consortium to operate the second wireless license in Italy,
has 123,000 customers and has been acquiring 40 percent of new subscribers in
the Italian GSM (Global Service for Mobile) market.
. EuroTel, Bell Atlantic's partnership currently serving about 65,000 wireless
customers in the Czech Republic and Slovakia, was awarded a second GSM
license to build a digital network in the Czech Republic when the market is
opened to competition this year.
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"Our goal has always been to achieve close relationships with our customers
and strong market positions everywhere we do business," said Smith. "Our
first-quarter accomplishments bode well for us as we enter an era of unfettered
competition andnew opportunities enabled by telecommunications reform
legislation. In my view, the picture has never been brighter."
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.
####
*Trademark of Microsoft Corp.
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).
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BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited)
(In millions, except per-share amounts)
Three months ended March 31,
1996(a) 1995
Operating Revenues
Transport Services:
Local service $1,139.7 $1,081.3
Network access 877.9 820.9
Toll service 369.6 367.0
Ancillary Services:
Directory publishing 286.2 276.0
Other 131.6 134.6
Value-Added Services 371.9 326.7
Network Services Revenue 3,176.9 3,006.5
Wireless Services -- (a) 291.5
Other Services 30.7 151.7 (b)
Total Operating Revenues 3,207.6 3,449.7
Operating Expenses
Employee costs, including benefits and taxes 982.4 1,034.2
Depreciation and amortization 628.9 667.7
Other 788.0 916.3
Total Operating Expenses 2,399.3 2,618.2 (b)
Operating Income 808.3 831.5
Equity in income (loss) of affiliates (a) 71.6 (6.7)
Other income (expense), net (2.3 1.1
Interest expense 120.8 138.9
Income before provision for income taxes 756.8 687.0
Provision for income taxes 286.3 272.5
Net Income $470.5 $414.5
Per Common Share Amounts
Net Income $1.07 $.95
Cash dividends declared per common share $.72 (c) $.70
Weighted average number of common
and equivalent shares outstanding 440.2 437.4
(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) Includes $123.8 million in revenues and $117.5 million in expenses from Bell
Atlantic Business Systems Services, sold in October 1995.
(c) Includes payment of $.005 per common share for redemption of rights under
the company's Shareholder Rights Plan.
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BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Other Selected Data (unaudited)
March 31,
1996 1995
Return on Average Common Equity
Three months ended 27.3% 26.6%
Total Assets (in millions) $23,808.6 $24,312.2
Total Employees 61,200 72,000 (d)
(d) Total Employees in 1995 includes employees of Bell Atlantic Mobile (3,500),
which was contributed to a partnership on July 1, 1995, and Bell Atlantic
Business Systems Services (4,200), which was sold in October 1995. These
employees are no longer included at March 31, 1996.
Condensed Consolidated Statements of Cash Flows (unaudited)
(In millions)
Three months ended March 31,
1996 1995
Cash Flows from Operating Activities
Net income $470.5 $414.5
Depreciation and amortization 628.9 667.7
Equity in (income) loss of affiliates (71.6) 6.7
Dividends received from affiliates 29.6 3.9
Other, net 112.6 (54.9)
Net Cash Provided by Operating Activities 1,170.0 1,037.9
Net Cash Used in Investing Activities (603.7) (952.9)
Net Cash Used in Financing Activities (866.3) (169.3)
(Decrease) in Cash and Cash Equivalents (300.0) (84.3)
Cash and Cash Equivalents,Beginning of the Period 356.8 142.9
Cash and Cash Equivalents, End of the Period $56.8 $58.6
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BELL ATLANTIC NYNEX MOBILE CELLULAR OPERATIONS PROFORMA
(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 March 31,
1996 1995 % change
Selected Operating Data
Controlled POPs (1) (000) 55,840 55,664 0.3
Owned POPs (2)(000) 53,788 53,335 0.3
Subscribers (000) 3,575 2,520 41.9
Penetration (3) 6.40% 4.53% 41.3
Churn 1.85% 1.89% (2.1)
Revenues per subscriber per month (4) $57 $62 (8.1)
Acquisition cost per gross add (5) $213 $215 (0.9)
Cash expense per subscriber $34 $43 (20.9)
Selected Financial Data
(Dollars in millions)
Operating revenues (6) $550.3 $424.5 29.6
Less: Cost of equipment 72.9 55.2 32.1
Net revenues 477.4 369.3 29.3
Operating income 116.9 47.3 147.1
Pre-tax income (7) 111.6 39.7 181.1
Operating cash flow (8) 194.4 108.6 79.0
Operating cash flow margin 41% 29% 41.4
Capital expenditures
excluding acquisitions 92.8 85.0 9.2
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 $41.0 million for the three-month period ended 3/31/96 and
$24.0 million for the three-month period ended 3/31/95.
(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.
