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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 17, 1997
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 is a copy of a press release issued by Bell Atlantic
Corporation dated April 17, 1997 announcing 1st Quarter earnings for 1997.
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Item 7. Financial Statements and Exhibits.
c) The following exhibits are incorporated by reference into this report.
20 Press Release Dated April 17, 1997
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EXHIBIT INDEX
Exhibit No. Description
(20) Press Release Dated April 17, 1997
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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 17, 1997
FOR IMMEDIATE RELEASE CONTACT:
Thursday, April 17, 1997 Jay Grossman
215-963-6521
[email protected]
Bell Atlantic Reports First Quarter Net Income Up 11.0 Percent
Company Shows Continued Strong Revenue Growth in Core Businesses
PHILADELPHIA -- Continued strong business volumes in its telephone
and cellular businesses fueled robust operating and earnings growth for
Bell Atlantic Corporation (NYSE:BEL) in the first quarter. The company
reported first-quarter net income of $515.6 million, an increase of 11.0
percent over the first quarter of 1996. Earnings per share were $1.17 in
the 1997 quarter, 10.4 percent higher than the $1.06 in the year-earlier
period.
"Demand for our services, including data connectivity, wireless and
value-added services, continues to drive excellent bottom line
performance," said Chairman and Chief Executive Officer Raymond W.
Smith. "With solid fundamentals, we are poised for a terrific year in
1997."
Smith also noted that the company has been able to absorb significant
start-up costs for new ventures, such as the PrimeCo personal
communications services (PCS) partnership and international wireless
activities. The chief factors were continued cost control measures and the
strong performance of Bell Atlantic's core business units, driven by
revenue growth of 7.6 percent, including Bell Atlantic's proportionate
share of domestic cellular revenues.
Network Highlights
Bell Atlantic's network business registered operating income growth of
12.9 percent, including the costs of complying with the 1996 Telecom
Act and new business entry costs.
"In the first quarter of this year, we had solid telephone network
revenue growth of 4.5 percent driven by strong demand for basic services
and successful stimulation of vertical services," said Bell Atlantic Vice
Chairman James G. Cullen. "We continue to position our business for
increased competition through aggressive product roll-outs such as Key
Connection, a packaged toll offering, and through new distribution
channels, including the opening this summer of our first center for Bell
Atlantic Plus, our one-stop shop for all telecommunications needs, which
we announced last month."
In the network business:
Access lines in service totaled approximately 20.8 million, up 3.9 percent
over the last 12 months. The increase includes 12.9 percent
year-over-year Centrex line growth.
Access minutes of use grew 3.0 percent compared with the unusually
strong first quarter of 1996. Adjusted for the effects of last year's storms
and leap year, access minutes of use were up approximately 8.0 percent.
At the end of the first quarter of 1997, Bell Atlantic had nearly 225,000
ISDN (Integrated Services Digital Network) lines in service, about 45
percent above the total a year earlier.
In the residential market:
Sales of secondary residential telephone lines, propelled by continued
growth in the use of home computers and other communications devices,
climbed to a record 245,000 in the first quarter of 1997, more than 19.7
percent above year-earlier levels and on track to meet the company's 1997
target of one million additional lines sold.
First quarter revenues from Home Voice Mail and central-office-based
services such as Caller-ID, Return Call and Call Waiting were up about
20 percent compared with the 1996 period. Caller ID revenues grew 60.7
percent as the in-service base rose 55.5 percent. Revenues from Return
Call , which in some markets now features a voice-recorded readout of
the calling party's number, jumped over 19.1 percent from first quarter
1996 levels.
In the business markets:
Bell Atlantic's successful line of customized Centrex packages for small
businesses posted revenues of $53.4 million for the quarter, up nearly
60.0 percent over the first quarter of 1996.
Among large business customers, revenues from high-speed Fast Packet
services grew well over 100 percent from the first quarter levels last year.
Bell Atlantic Network Integration contributed revenues of $43.2 million,
an increase of 17.8 percent over the first quarter of 1996.
"With the continuing customer demand for service enhancements and
our preparation for packaging our services for high-value customers, we
are well positioned to remain the provider of choice," Cullen said. "We
will meet our customers' needs in an easy, reasonably priced and
satisfying manner. That class of customer care will be the key to winning
their on-going loyalty."
Network operating expenses for the quarter were approximately $2.4
billion, 1.6 percent higher than in 1996, primarily due to increased
marketing costs, costs of complying with the Telecom Act checklist, and
start-up expenses for the Internet and long distance businesses, offset by
reductions in certain employee costs.
Wireless Highlights
Bell Atlantic's global wireless portfolio of more than 89 million POPs
(people in markets served) continued to post fast growth in its customer
base and revenues in the first quarter of the year.
For Bell Atlantic NYNEX Mobile:
The company posted a 23.1 percent gain in net revenues over the first
quarter of 1996, an operating income increase of 18.0 percent, and an
operating cash flow improvement of 20.6 percent.
At the end of the first quarter, the company had 29.6 percent more
customers than in the year-earlier period. The company added 224,000
new customers in the first quarter of 1997 - a record for first quarter net
customers added - bringing its total to 4.6 million.
Penetration rose to 8.15 percent, a 27.3 percent increase over
1996.
"First quarter 1997 was another successful period for our wireless
businesses," said Bell Atlantic Vice Chairman Lawrence T. Babbio, Jr.
"Domestically, we brought CDMA (code division multiple access) digital
technology to all but one of our major Bell Atlantic NYNEX Mobile
markets, and by the end of the second quarter our network will be digital
in all markets. We successfully anticipated and prepared for new
competitors in these markets, and maintained our momentum. We had an
excellent operating cash flow margin of 40 percent in BANM,
demonstrating our ability to manage growth and profitability.
"Further, our PrimeCo partnership added a total of 77,000 customers
during the quarter, bringing the venture's subscriber rolls to 114,000.
With PrimeCo established as a recognized and respected brand, we look
forward to further successes in the marketplace.
"We also are consolidating the results of our Grupo Iusacell, S.A. de
C.V., investment for the first time following our assumption of
operational control of the business in February. We already are seeing
renewed growth in cellular customers and expect that business to achieve
customer growth targets of 30 percent or better for 1997."
In other international events:
Omnitel Pronto Italia, Bell Atlantic's consortium providing wireless
service in Italy, added over 200,000 new customers in the first quarter to
total some 913,000 customers in one of the world's fastest growing
mobile operations.
EuroTel Praha, Bell Atlantic's wireless partnership serving the Czech
Republic, added approximately 140,000 customers since July 1996 on its
new digital, GSM (global system for mobile) network. Including its
analog customers, the company has a total of approximately 200,000
customers.
EuroTel Bratislava, Bell Atlantic's wireless investment in the Slovak
Republic, began GSM service in February, only three months after
receiving its license from the government.
The combined wireless portfolio added approximately 200,000
proportionate subscribers in the first quarter for a total of 3.1 million
subscribers, an increase of 40.9 percent over a year ago.
"In the wireless world, Bell Atlantic has differentiated itself as the
digital choice for a growing customer base in a competitive marketplace,"
Babbio said. "We are successfully engaging the new competitors in their
own game, and we are maintaining impressive growth into the future."
Anticipating a landmark year for the company, Smith said, "We are
heading toward the closing of our merger with NYNEX with great
momentum. The new Bell Atlantic will capitalize on the continued
strength in our core businesses, directed by a strong management team
and serving a customer base hungry for new choices and a company like
ours, which knows how to meet their demands."
Bell Atlantic Corp. (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.
####
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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,
1997 1996 (a)
Operating Revenues
Transport Services:
Local service $1,188.7 $1,139.7
Network access 917.1 877.9
Toll service 335.9 369.6
Ancillary Services:
Directory publishing 305.5 298.5
Other 157.7 138.3
Value-Added Services 435.0 371.9
Network Services Revenues 3,339.9 3,195.9
Other Services 74.0 24.0
Total Operating Revenues 3,413.9 3,219.9
Operating Expenses
Employee costs,
including benefits and taxes 954.5 982.4
Depreciation and amortization 671.4 628.9
Other 891.5 808.4
Total Operating Expenses 2,517.4 2,419.7
Operating Income 896.5 800.2
Income from unconsolidated businesses 47.6 71.6
Other income (expense), net 24.1 (2.3)
Interest expense 137.5 120.8
Income before provision for income
taxes and cumulative effect of change
in accounting principle 830.7 748.7
Provision for income taxes 315.1 284.0
Income before cumulative effect of change
in accounting principle 515.6 464.7
Cumulative effect of change in accounting
principle:
Directory publishing, net of tax -- 142.1
Net Income $515.6 $606.8
(a) Restated to reflect the adoption of a change in the method of
accounting for directory publishing revenues and expenses, effective
January 1, 1996.
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited) --
continued
(In millions, except per-share amounts)
Three months ended
March 31,
1997 1996
Per common share amounts
Income before cumulative effect of
change in accounting principle $1.17 $1.06
Cumulative effect of change in accounting
principle -- .32
Net Income $1.17 $1.38
Cash dividends declared per common share $.74 $.72(b)
Weighted average number of common
and equivalent shares outstanding 439.9 440.2
Other Selected Data (unaudited)
Three months ended
March 31,
1997 1996
Return on average common equity 27.0% 26.9%
Total assets (in millions) $25,216.2 $ 23,835.6
Total employees 65,900 61,200
(b) Includes payment of $.005 per common share for redemption of
rights granted under the company's Shareholder Rights
Plan.
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (unaudited)
(In millions)
Three Months ended March 31,
1997 1996
Cash Flows from Operating Activities
Net income $515.6 $606.8
Depreciation and amortization 671.4 628.9
Cumulative effect of change in accounting
principle, net of tax -- (142.1)
Income from unconsolidated businesses (47.6) (71.6)
Dividends received from unconsolidated businesses 31.7 29.6
Other, net 11.7 118.4
Net Cash Provided by Operating Activities 1,182.8 1,170.0
Net Cash Used in Investing Activities (752.5) (603.7)
Net Cash Used in Financing Activities (438.0) (866.3)
Decrease in Cash and Cash Equivalents (7.7) (300.0)
Cash and Cash Equivalents, Beginning of Period 152.5 356.8
Cash and Cash Equivalents, End of Period $144.8 $56.8
BELL ATLANTIC NYNEX MOBILE CELLULAR OPERATIONS
(unaudited)
Three months ended March 31,
1997 1996 % change
Selected Operating Data
Controlled POPs (1) (000) 56,830 55,840 1.8
Owned POPs (2) (000) 55,021 53,788 2.3
Subscribers (000) 4,634 3,575 29.6
Penetration (3) 8.2% 6.4%
Churn 1.8% 1.8%
Revenues per subscriber per month (4) $53 $57 (6.4)
Acquisition cost per gross add (5) $215 $217 (0.9)
Cash expense per subscriber $33 $34 (5.1)
Selected Financial Data
(Dollars in millions)
Operating revenues (6) $675.9 $550.3 22.8
Less: Cost of equipment 88.3 72.9 21.1
Net revenues 587.6 477.4 23.1
Operating income 138.0 116.9 18.0
Pre-tax income 126.5 111.6 13.4
Operating cash flow (7) 234.4 194.4 20.6
Operating cash flow margin 40% 41% (2.4)
Capital expenditures
excluding acquisitions 231.2 92.8 --
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 $47.3 million for the three month period ended 3/31/97 and
$41.0 million for the three month period ended 3/31/96.
(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) Operating cash flow equals operating income plus depreciation and
amortization.
