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: October 17, 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
<PAGE>
Item 5. Other Events
Attached as an exhibit hereto is a copy of the press release issued by Bell
Atlantic Corporation (the "Company") dated October 17, 1996 announcing 3rd
quarter earnings for 1996.
<PAGE>
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 October 17, 1996
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
(20) Press Release Dated October 17, 1996
<PAGE>
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: October 17, 1996
FOR IMMEDIATE RELEASE Contact:
October 17, 1996 David Stakun
215-963-6639
[email protected]
Bell Atlantic Third-Quarter Earnings Up 9 Percent
on Continued Strength in Core Businesses
PHILADELPHIA - Bell Atlantic Corporation (NYSE: BEL) announced today
that continued strength in core wireline and wireless business volumes produced
third-quarter 1996 net income of $483.3 million, an increase of 9.4 percent
compared with adjusted earnings of $441.9 million in the same period in 1995,
which excludes certain one-time items. Earnings per share were $1.10 for the
quarter, up 8.9 percent versus adjusted third-quarter 1995 results.
Operating revenues from the company's core businesses, including its
proportionate share of Bell Atlantic NYNEX Mobile revenues, grew 7.6 percent
compared with the third quarter of 1995. Quarterly results for 1996 included
significant start-up costs in the company's long-distance and Internet
businesses, costs associated with complying with the Telecommunications Act
of 1996, and revenue reductions from price promotions and product packaging
initiatives.
"Strong top-line growth at Bell Atlantic is producing solid earnings
performance even as we gear up for open markets and attractive new business
opportunities," said Bell Atlantic Chairman and Chief Executive Officer Raymond
W. Smith. "We remain on target to meet our key financial goals for 1996 as we
look ahead to completing our merger with NYNEX."
One-time items included in Bell Atlantic's third-quarter 1995 earnings
consisted of an after-tax gain of approximately $203 million, or $.46 per share,
from the sale of overlapping cellular properties in connection with the July 1,
1995, combination of Bell Atlantic Mobile and NYNEX Mobile Communications, and
non-recurring charges of about $40 million, or $.09 per share, associated with
certain business development ventures and contracts.
Network Highlights
In the third quarter, Bell Atlantic's Network revenues grew 5.2 percent
compared with the comparable period in 1995. Adjusted for 1995 access charge
reductions and competitive price cuts in the toll market, revenues grew close to
7 percent.
* Access lines in service on September 30, 1996, totaled approximately 20.4
million, up 3.7 percent over the last 12 months. The increase includes
12.9 percent year-over-year Centrex line growth in the business markets.
* Access minutes of use grew 8.5 percent compared with the third quarter of
1995.
* At September 30, Bell Atlantic had approximately 184,000 ISDN (integrated
services digital network) lines in service, 38 percent above the total a
year earlier.
"The Network business is producing solid operating income growth as we
continue to stimulate revenue growth and strengthen our competitive position by
stepping up marketing, new product development and corporate brand advertising,"
said Bell AtlanticVice Chairman James G. Cullen. "In the consumer market, we're
sustaining strong sales of additional lines and vertical services such as Caller
ID, Answer Call, Return Call and new service packages."
In the residential market:
* Continued growth in home computer use propelled gross sales of secondary
residential telephone lines to nearly 233,000 in the third quarter, more
than 60 percent above year-earlier levels. Gross sales for the first nine
months of 1996 are more than 25 percent higher than year-end 1995 totals.
* Third-quarter revenues from Answer Call and central-office-based services
such as Caller ID, Return Call and Call Waiting were up about 25 percent
compared with the 1995 period. Caller ID revenues grew about 75 percent as
subscribers reached 2.2 million, for a penetration rate of 17.1 percent,
compared with 10.5 percent a year ago. Revenues from Return Call, in
some markets now featuring a voice-recorded readout of the calling
party's number, jumped well over 50 percent from third-quarter 1995 levels.
In the business markets:
* Bell Atlantic's successful line of customized Centrex packages for small
businesses posted revenues of $41.5 million for the quarter, up nearly 65
percent compared with the third quarter of 1995.
* Among larger business customers, revenues from high-speed Fast-Packet data
services grew well over 100 percent from third-quarter 1995 levels.
Network operating expenses for the third quarter amounted to $2.5 billion,
5.4 percent higher than in the 1995 period. Adjusting for increased new
business start-up expenses for long-distance and Internet, expenses were up 4.5
percent, driven primarily by demand growth, increases in sales and marketing
activities, systems and software upgrades, and compliance with the Tele-
communications Act's competitive "checklist."
Bell Atlantic continued to improve network operating efficiency, as access
lines per network employee increased to 362 as of September 30, 1996, from 335
as of the same time a year earlier, an improvement of more than 8 percent.
Wireless Highlights
Equity income from Bell Atlantic's wireless investment portfolio of 85
million proportionate worldwide POPs (people in markets served) increased 53.6
percent compared with third-quarter 1995 results. Equity income of $98.3
million from Bell Atlantic NYNEX Mobile was 41.0 percent higher than third-
quarter 1995 levels.
"Domestically, our cellular business continues to produce strong results
even with the advent of new competition," said Bell Atlantic Vice Chairman
Lawrence T. Babbio, Jr. "Very shortly, PrimeCo, our PCS (personal communications
services) consortium, will be launching service in key markets across the
country. Internationally, the growth we're seeing in Italy has been spectacular.
In short, we continue to demonstrate that we have the talent to establish a
truly successful global enterprise."
For Bell Atlantic NYNEX Mobile:
* The number of subscribers surpassed four million in the quarter, as 232,000
new customers were added, reflecting an annual growth rate of more than 36
percent.
* Operating revenues grew approximately $160 million, or 32.1 percent, to
$657.3 million.
* Operating cash flow margin was 41 percent, with operating cash flow growth
of more than 26 percent.
Internationally:
* Omnitel Pronto Italia, Bell Atlantic's consortium operating the second
wireless license in Italy, achieved world-record subscriber growth in its
first 10 months of commercial operations, signing up more than 560,000
customers to its digital GSM (global system for mobile) service.
* EuroTel, Bell Atlantic's partnership currently serving more than 100,000
customers in the Czech Republic and Slovakia, has acquired 30,000 customers
since the inauguration of its digital GSM service in the Czech Republic.
"Our impressive third-quarter performance reinforces the solid foundation
for the new Bell Atlantic we will create with the NYNEX merger," Smith
concluded. "I'm confident our combined company will enjoy enhanced prospects
for success across all our businesses - in traditional markets as well as
exciting new ones such as consumer data services, long distance, Internet, and
video. We look forward to the shareowner vote on the merger in November, to
closing the deal early in 1997, and to building a truly world-class global
telecommunications company for the 21st century."
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 information are available on Bell Atlantic's media
relations World Wide Web site (http://www.ba.com), by gopher (gopher://ba.com).
To receive news releases via e-mail send a message to [email protected].
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited)
(In millions, except per-share amounts)
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Operating Revenues
Transport Services:
Local service $1,176.9 $1,118.6 $3,496.0 $3 ,305.2
Network access 886.9 856.2 2,632.6 2,549.5
Toll service 340.2 355.9 1,059.9 1,082.2
Ancillary Services:
Directory publishing 288.0 273.4 863.0 826.3
Other 156.8 142.3 436.8 414.9
Value-Added Services 411.0 353.0 ,169.3 1,010.6
------- ------- ------- ---------
Network Services Revenues 3,259.8 3,099.4 9,657.6 9,188.7
Wireless Services -- (a) - (a) - (a) 628.0
Other Services 38.0 161.7(b) 107.3 458.6 (b)
------- ------- ------- --------
Total Operating Revenues 3,297.8 3,261.1 9,764.9 10,275.3
Operating Expenses
Employee costs,
including benefits and taxes 1,018.9 1,034.6 2,983.1 3,129.5
Depreciation and amortization 649.1 642.5 1,916.8 1,991.9
Other 840.6 864.6 2,466.4 2,760.0
--------- ------- ------- --------
Total Operating Expenses 2,508.6 2,541.7(b) 7,366.3 7,881.4(b)
Operating Income 789.2 719.4 2,398.6 2,393.9
Equity in income of affiliates (a) 105.8 74.5 271.7 90.3
Other income (expense), net (9.9) 317.1 (14.3) 324.0
Interest expense 119.9 133.9 360.5 420.5
Income before provision for income taxes 765.2 977.1 2,295.5 2,387.7
Provision for income taxes 281.9 372.3 847. 921.3
Net Income $483.3 $604.8 $1,448.1 $1,466.4
Earnings Per Common Share $1.10 $1.38 $3.29 $3.35
Cash dividends declared per common share $.72 $.70 $2.16(c) $2.10
Weighted average number of common
and equivalent shares outstanding 439.1 438.5 439.6 437.9
(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 revenues and expenses from Bell Atlantic Business Systems Services,
sold in October 1995, as follows:
Three months ended Nine months ended
September 30, 1995 September 30, 1995
Operating Revenues - Other Services $127.9 $374.8
Operating Expenses 119.2 362.8
(c) Includes payment of $.005 per common share for redemption of rights granted
under the company s Shareholder Rights Plan.
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Per Share Analysis (unaudited)
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Earnings per Share, as reported $1.10 $1.38 $3.29 $3.35
Adjustments:
Gain on sale of conflicted cellular
properties -- (.46) -- (.46)
Non-recurring business development
charges -- .09 -- .09
Adjusted Earnings per Share $1.10 $1.01 $3.29 $2.98
Other Selected Data (unaudited)
September 30,
1996 1995
Return on Average Common Equity
Three months ended 27.1% 36.2%
Nine months ended 26.4% 30.5%
Total Assets (in millions) $23,908.9 $24,546.0
Total Employees 61,300 67,800 (d)
(d) Total Employees in 1995 includes 4,400 employees of Bell Atlantic Business
Systems Services, which was sold in October 1995.
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (unaudited)
(In millions)
Nine months ended September 30,
1996 1995
Cash Flows from Operating Activities
Net income $1,448.1 $1,466.4
Depreciation and amortization 1,916.8 1,991.9
Gain on sale of cellular properties, net of tax -- (203.0)
Equity in income of affiliates (271.7) (90.3)
Dividends received from affiliates 92.9 81.3
Other, net 1.4 (330.1)
Net Cash Provided by Operating Activities 3,187.5 2,916.2
Net Cash Used in Investing Activities (1,684.1) (1,952.5)
Net Cash Used in Financing Activities (1,761.4) (1,008.9)
Decrease in Cash and Cash Equivalents (258.0) (45.2)
Cash and Cash Equivalents, Beginning of Period 356.8 142.9
Cash and Cash Equivalents, End of Period $98.8 $97.7
BELL ATLANTIC NYNEX MOBILE CELLULAR OPERATIONS
(unaudited)
Three months ended September 30,
1996 1995 % change
Selected Operating Data
Controlled POPs (1) (000) 56,513 55,840 1.2
Owned POPs (2) (000) 54,461 53,511 1.8
Subscribers (000) 4,054 2,973 36.4
Penetration (3) 7.2% 5.3% 34.7
Churn 1.9% 1.7% 11.8
Revenues per subscriber per month (4) $60 $63 (4.4)
Acquisition cost per gross add (5) $233 $216 7.9
Cash expense per subscriber $36 $37 (2.7)
Selected Financial Data
(Dollars in millions)
Operating revenues (6) $657.3 $497.6 32.1
Less: Cost of equipment 91.5 69.1 32.4
Net revenues 565.8 428.5 32.0
Operating income 155.7 117.3 32.7
Pre-tax income (7) 144.2 111.3 29.6
Operating cash flow (8) 232.8 184.2 26.4
Operating cash flow margin 41% 43% (4.7)
Capital expenditures
excluding acquisitions 256.0 76.1 236.4
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 $56.9 million and $151.7 million for the three and nine
months ended 9/30/96, respectively and $48.3 million and $125.4 million for
the three and nine months ended 9/30/95, respectively.
(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.
