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: July 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 July 18, 1996
announcing 2nd quarter earnings for 1996.
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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 July 18, 1996
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EXHIBIT INDEX
Exhibit No. Description Page No.
(20) Press Release Dated July 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: July 18, 1996
FOR IMMEDIATE RELEASE Contact:
July 18, 1996 David Stakun
215-963-6639
[email protected]
BELL ATLANTIC ANNOUNCES RECORD EARNINGS
Philadelphia -- Propelled by strong business volumes across its core wireline
and wireless communication businesses, Bell Atlantic Corporation (NYSE: BEL)
announced record* net income of $494.3 million for the second quarter of 1996,
10.6 percent higher than in the same period in 1995. Earnings per share grew
9.8 percent, to $1.12 from $1.02.
Revenues from the company s core businesses, including its proportionate share
of Bell Atlantic NYNEX Mobile revenues, grew nearly 7 percent compared with the
second quarter of 1995. Results for the quarter included significant start-up
costs in the company s long-distance, video and Internet businesses as well
as costs associated with compliance with the Telecommunications Act of 1996.
We re in excellent shape to meet our key financial goals for the year, said
Bell Atlantic Chairman and Chief Executive Officer Raymond W. Smith. Our core
business is producing solid bottom-line growth while we build long-term
capabilities for continued growth in a fully competitive environment.
*Excludes third-quarter 1995 gain from the sale of certain cellular properties
NETWORK HIGHLIGHTS
Despite significant price reductions taken to fortify the company's
competitive position in the switched access market, Bell Atlantic's core
Network revenues were 4.5 percent higher in the second quarter compared with
the same period in 1995.
Access lines in service on June 30, 1996, totaled 20.1 million, up 3.5
percent over the last 12 months. The increase includes 11.2 percent
Centrex line growth in the business markets.
Access minutes of use grew 9.2 percent.
At June 30, Bell Atlantic had approximately 170,000 ISDN (integrated
services digital network) lines in service, 40 percent higher than a year
ago.
Due to strong volumes and robust demand for value-added services, we re on
track to achieve our goal of 5 percent Network revenue growth for the year,
said Bell Atlantic Vice Chairman James G. Cullen. With our aggressive
marketing of additional lines, Answer Call, CallerID and new service packages
such as Call Manager, we re already achieving 5 percent growth in the consumer
market. Our launch of new products such as Easy VoiceSM, our filings to
significantly reduce residential ISDN rates, and our soon-to-be-introduced
consumer Internet access services, all promise to help build on that momentum.
Fueled by continued_growth in home computer use and increasing family
communication needs, sales of secondary residential telephone lines totaled
more than 212,000 for the second quarter, driving penetration to 14.2
percent, up from 10.3 percent a year ago.
Revenues from Answer Call and central-office-based services such as Caller
ID and Call Waiting grew almost 25 percent compared with second-quarter
1995 results. Caller ID registered its highest quarterly growth ever, with
revenues more than doubling year-earlier levels. By the end of the period,
Caller ID subscribers exceeded 2 million, with penetration at 16.5 percent,
up from 8.8 percent a year ago.
Since its introduction in June, 1996, Easy Voice voice-activated dialing
has averaged 1,000 new customers per day.
In the business markets, Bell Atlantic s leadership in network integration
and Fast-Packet services is expanding our presence among our larger customers,
Cullen said, while our innovative service packaging is redefining how the needs
of small businesses are addressed.
Bell Atlantic s successful line of feature-rich service packages that allow
small businesses to custom-design their communication systems posted
revenues of $39.7 million for the quarter, up more than 100 percent above
year-ago levels.
Among Bell Atlantic's large customers, revenues from high-speed Fast-Packet
data services were up about 150 percent.
As a member of the Pinnacle Alliance global partnership, Bell Atlantic
Network Integration was awarded a seven-year, $250 million contract to
support J.P. Morgan's distributed computing systems -- local area networks,
desktop computers and servers.
Second-quarter revenues from Directory Services grew 4.3 percent compared
with 1995 results as Bell Atlantic continues expanding its presence in the
electronic publishing arena with products such as InfoTravelTM.
Bell Atlantic reported Network operating expenses for the second quarter
totaling $2.4 billion, 4.5 percent higher than in the 1995 period. Adjusting for
increased new-business start-up expenses for long-distance, Internet and video,
expenses increased 3.8 percent. Growth in expenses also reflected high
business volumes and increased outlays for marketing, systems and software
upgrades, and compliance with the Telecommunications Act's competitive
checklist.
Bell Atlantic continued to achieve operating efficiency gains, as access
lines per network employee increased to 365 from 327 as of June 30, 1995,
an improvement of 11.6 percent.
Cash expenses per access line were $321, up less than one percent from
year-ago levels. That increase is attributable primarily to higher volumes
and weather-related effects.
WIRELESS HIGHLIGHTS
Equity income from Bell Atlantic s wireless investment portfolio of 85
million worldwide POPs (people in markets served) increased nearly 26 percent
compared with second-quarter 1995 results. Included was a nearly 30 percent
increase in income from Bell Atlantic NYNEX Mobile. Also reflected were costs
related to development activities in the company's domestic PCS (personal
communications services) partnership, the acquisition of customers by its
wireless consortium in Italy, and the launch of digital GSM (global service for
mobile) by its partnership in the Czech Republic. Largely offsetting these
costs were reduced amortization expenses associated with Bell Atlantic's
investment in Grupo Iusacell, S.A. de C.V. in Mexico.
Wireless has become one of the premier growth engines in the communication
industry, said Bell Atlantic Vice Chairman Lawrence T. Babbio, Jr. And in many
ways we re still revving it up. Our domestic cellular business is posting some
of the highest growth numbers in the industry, with plenty of headroom for more
growth. Later this year, PrimeCo Personal Communications will launch service in
its major markets. And in Italy, Omnitel s growth rate is off the charts.
The following second-quarter highlights of Bell Atlantic NYNEX Mobile,
which began operations on July 1, 1995, contain comparative financial and
operating statistics derived as if the joint venture had existed in the second
quarter of 1995.
Bell Atlantic NYNEX Mobile added 247,000 new subscribers, 23,000 more than
In the second quarter of 1995, representing annual subscriber growth of
more than 39 percent. Subscribers as of June 30, 1996, totaled 3.8 million.
Operating revenues grew $145.1 million, or 29.8 percent, to $631.6 million.
Operating cash flow margin was 43 percent, up from 40 percent in the second
quarter of 1995, resulting in a 37 percent increase in operating cash flow.
Internationally:
Since launching commercial service in December, 1995, Omnitel Pronto
Italia, Bell Atlantic's consortium operating the second wireless license
in Italy, has acquired more than 300,000 subscribers to its GSM service.
On July 1, 1996, EuroTel, Bell Atlantic s partnership currently serving
about 72,000 customers in the Czech Republic and Slovakia, launched the
first digital GSM service in the Czech Republic.
Results from the second quarter give Bell Atlantic added momentum as we
approach a new era of open markets, full competition and unprecedented
opportunity, Smith concluded. Our network business is in a growth renaissance,
our wireless growth is pacing the industry and significant new businesses will
soon be hitting their stride. We have a very exciting future ahead.
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 June 30, Six months ended June 30,
1996(a) 1995 1996(a) 1995
Operating Revenues
Transport Services:
Local service $1,179.4 $1,105.3 $2,319.1 $2,186.6
Network access 867.8 872.4 1,745.7 1,693.3
Toll service 350.1 359.3 719.7 726.3
Ancillary Services:
Directory publishing 288.8 276.9 575.0 552.9
Other 148.4 138.0 280.0 272.6
Value-Added Services 386.4 330.9 758.3 657.6
------- ------- -------- --------
Network Services Revenues 3,220.9 3,082.8 6,397.8 6,089.3
Wireless Services -- (a) 336.5 -- (a) 628.0
Other Services 38.6 145.2 (b) 69.3 296.9 (b)
------- ------- ------- -------
Total Operating Revenues 3,259.5 3,564.5 6,467.1 7,014.2
Operating Expenses
Employee costs,
including benefits and taxes 981.8 1,060.7 1,964.2 2,094.9
Depreciation and amortization 638.8 681.7 1,267.7 1,349.4
Other 837.8 979.1 1,625.8 1,895.4
------- -------- -------- -------
Total Operating Expenses 2,458.4 2,721.5 (b) 4,857.7 5,339.7 (b)
Operating Income 801.1 843.0 1,609.4 1,674.5
Equity in income of affiliates 94.3 22.5 165.9 15.8 (a)
Other income (expense), net (2.1) 5.8 (4.4) 6.9
Interest expense 119.8 147.7 240.6 286.6
Income before provision
for income taxes 773.5 723.6 1,530.3 1,410.6
Provision for income taxes 279.2 276.5 565.5 549.0
Net Income $494.3 $447.1 $964.8 $861.6
Earnings Per Common Share $1.12 $1.02 $2.19 $1.97
Cash dividends declared
per common share $.72 $.70 $1.44(c) $1.40
Weighted average number of common
and equivalent shares outstanding 439.6 437.7 439.9 437.6
(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 Six months ended
June 30, 1995 June 30,1995
Operating Revenues - Other Services $123.1 $246.9
Operating Expenses 126.1 243.6
(c) Includes payment of $.005 per common share for redemption of rights granted
under the company's Shareholder Rights Plan.
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BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Other Selected Data (unaudited)
June 30,
1996 1995
Return on Average Common Equity
Three months ended 27.8% 28.4%
Six months ended 27.5% 27.5%
Total Assets (in millions) $23,795.7 $24,819.9
Total Employees 60,800 72,300 (d)
(d) Total Employees in 1995 includes employees of Bell Atlantic Mobile (3,800),
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 June 30, 1996.
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Condensed Consolidated Statements of Cash Flows (unaudited)
(In millions)
Six months ended June 30,
1996 1995
Cash Flows from Operating Activities
Net income $964.8 $861.6
Depreciation and amortization 1,267.7 1,349.4
Equity in income of affiliates (165.9) (15.8)
Dividends received from affiliates 60.9 5.8
Other, net (243.3) (355.5)
Net Cash Provided by Operating Activities 1,884.2 1,845.5
Net Cash Used in Investing Activities (1,115.8) (1,871.5)
Net Cash Used in Financing Activities (1,061.5) (55.4)
Decrease in Cash and Cash Equivalents (293.1) (81.4)
Cash and Cash Equivalents, Beginning of Period 356.8 142.9
Cash and Cash Equivalents, End of Period $63.7 $61.5
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 June 30,
1996 1995 % change
- -----------------------------------------------------------------------
Selected Operating Data
Controlled POPs (1) (000) 55,840 55,840 0.0
Owned POPs (2) (000) 53,788 53,511 0.5
Subscribers (000) 3,822 2,744 39.3
Penetration (3) 6.84% 4.91% 39.2
Churn 1.77% 1.61% 9.9
Revenues per subscriber per month (4) $62 $67 (7.5)
Acquisition cost per gross add (5) $201 $223 (9.9)
Cash expense per subscriber $36 $40 (10.0)
Selected Financial Data
(Dollars in millions)
Operating revenues (6) $631.6 $486.5 29.8
Less: Cost of equipment 81.1 59.4 36.5
Net revenues 550.5 427.1 28.9
Operating income 153.4 109.4 40.2
Pre-tax income (7) 139.7 96.6 44.6
Operating cash flow (8) 236.2 172.2 37.2
Operating cash flow margin 43% 40% 7.5
Capital expenditures
excluding acquisitions 203.6 136.6 49.0
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, outcollectroaming and equipment revenue. Incollect roaming
revenues were $53.9 million for the three-month period ended 6/30/96 and
$40.1 million for the three-month period ended 6/30/95.
(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.
