<PAGE>
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: Janaury 21, 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
<PAGE>
Item 5. Other Events
Attached as an exhibit is a copy of a press release issued by Bell
Atlantic Corporation dated January 21, 1996 announcing 1996 earnings.
Also attached as a separate exhibit is a copy of the Condensed
Consolidated Statement of Operations (unaudited) for the three months
ended March 31, 1996, June 30, 1996 and September 30, 1996 containing
results restated to reflect the adoption of a change in the method of
accounting for directory publishing income, effective January 1, 1996.
<PAGE>
Item 7. Financial Statements and Exhibits.
c) The following exhibits are incorporated by reference into this report.
20 Press Release Dated January 21, 1997
99 Condensed Consolidated Statements of Operations for the three months
ended March 31, 1996, June 30, 1996 and September 30, 1996, restated
to reflect the adoption of change in the method of accounting for
directory publishing income, effective January 1, 1996.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
(20) Press Release Dated January 21, 1997
(99) Condensed Consolidated Statement of Operations
<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: January 21, 1997
FOR IMMEDIATE RELEASE Contact:
January 21, 1997 David Stakun
215-963-6639
[email protected]
Bell Atlantic Adjusted Earnings Up 10 Percent for 1996
Strong Market Demand in Core Businesses Drives Record Results
PHILADELPHIA - Bell Atlantic Corporation (NYSE: BEL) announced today that
continued strong growth in its core wireline and wireless businesses produced
record 1996 net income of $1.87 billion, 10 percent above 1995 earnings of $1.70
billion, and fourth-quarter net income of $424.4 million, up 7.3 percent from
1995 results of $395.4 million, excluding certain one-time adjustments in the
three- and 12-month periods in both years. On the same basis, earnings per
share were $4.26 for the year, up 9.8 percent versus adjusted 1995 earnings per
share of $3.88, and fourth-quarter earnings per share grew 7.8 percent, to $.97
from $.90.
On a reported basis, Bell Atlantic's 1996 net income was $1.88 billion, or
$4.28 per share. These results include a non-cash gain from the cumulative
effect of a change in accounting principle of $142 million, or $0.32 per share,
associated with the adoption of the "point of publication" accounting method
for the company's directory publishing business. Adopted in the fourth quarter
and retroactive to January 1, 1996, this method recognizes revenues and expenses
upon publication rather than over the life of the directories.
Reported 1996 results also include one-time, mostly non-cash charges in the
fourth quarter that largely offset the gain from the directory accounting change
(1996 special adjustments and previously reported one-time items in 1995 are
quantified in the "Per Share Analysis" table attached):
- Reserves associated with regulatory and other issues;
- Actuarially determined costs of a benefit plan amendment;
- Certain asset and investment dispositions.
Including one-time items, reported earnings in the fourth quarter of 1996
were $345.6 million, or $.79 per share.
"We posted strong gains in our key communications markets in 1996 as we
prepare to complete our merger with NYNEX in 1997," said Bell Atlantic Chairman
and Chief Executive Officer Raymond W. Smith. "Robust market demand for our
communications products and services has produced record revenue growth and
record earnings that will strengthen our competitiveness in existing markets
and support our entry into significant new markets such as in-region long
distance."
Earnings results for 1996 include significant start-up costs in the
company's long-distance and Internet businesses, plus costs associated with
meeting the competitive "checklist" requirements for long-distance market
entry set forth in the Telecommunications Act of 1996. Operating revenues from
the company's core businesses, including its proportionate share of Bell
Atlantic NYNEX Mobile revenues, grew 7.9 percent for the fourth quarter of 1996
and 7.5 percent for the year, despite reductions in access charges and increased
price discounting and product packaging initiatives in the Network and wireless
businesses.
Network Highlights
Bell Atlantic's adjusted Network revenues grew 5.3 percent in 1996 compared
with 1995 and 6.0 percent in the fourth quarter.
"Network revenue growth in 1996 was driven by strong customer demand,
increased marketing and promotion activity, and new product introductions," said
Bell Atlantic Vice Chairman James G. Cullen. "The effects were evident across
all our business segments, from consumer to business to wholesale."
Access lines in service on December 31, 1996, totaled approximately 20.6
million, up 3.8 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 9.7 percent for the year.
Approximately 200,000 ISDN (integrated services digital network) lines were in
service at December 31, 1996, up 39 percent from the year-ago total.
In the residential market:
Sales of secondary residential telephone lines totaled 886,000, compared with
511,000 in 1995. Fourth-quarter sales increased about 29 percent above 1995
levels, reaching almost 236,000. Total additional lines in service grew
almost 24 percent during 1996, to approximately 2.1 million.
Revenues from Home Voice Mail (formerly Answer Call) and central-office-based
services such as Caller ID, Return Call and Call Waiting were up more than 23
percent compared with 1995. Caller ID revenues nearly doubled as subscribers
grew to about 2.3 million. Revenues from Return Call, in some markets now
featuring a voice-recorded readout of the calling party's number, jumped more
than 40 percent, with a 50 percent increase in activations.
In the business markets:
"Special access" revenues were up almost 27 percent in the fourth quarter
compared with the same period a year earlier, largely as a result of demand
for high-speed private lines. Special access revenues for the full year
increased more than 12 percent above 1995 levels.
Spurred by growing demand for customized, feature-rich call management
packages, Centrex revenues from small-businesses customers grew nearly 63
percent compared with 1995.
Revenues from high-speed Fast-Packet data services more than doubled their
1995 totals.
Securing several new, high-profile contracts, Bell Atlantic Network
Integration posted revenues of nearly $200 million, a 32 percent increase
from 1995.
"Our strong revenue performance results in large measure from Bell Atlantic's
brand marketing, product promotion and packaging initiatives," Cullen said.
"These efforts are key to unlocking the tremendous vertical growth potential in
the Network business. In the converging information, entertainment and
communications industry, we envision Bell Atlantic as theultimate systems
integrator for consumers as well as businesses, providing a complete array of
advanced services, customized packages and easy-to-use, turn-key solutions."
Network operating expenses for the year amounted to $9.8 billion, 5.3 percent
higher than in 1995. Contributing to this growth were start-up expenses in
businesses such as long distance and Internet, costs associated with increased
sales and marketing activities, and the cost of compliance with the Tele-
communications Act's competitive "checklist."
Wireless Highlights
Bell Atlantic's wireless investment portfolio of 89 million proportionate
worldwide POPs (people in markets served) produced adjusted equity income of
$262.8 million in 1996, more than 57 percent higher than in 1995. At Bell
Atlantic NYNEX Mobile, operating income grew 42.1 percent, while operating cash
flow was up 33.5 percent.
"Overall, this was a banner year for our wireless investments," said Bell
Atlantic Vice Chairman Lawrence T. Babbio, Jr. "Domestically, our PCS (personal
communication services) consortium (PrimeCo Personal Communications) executed
the most successful wireless launch in history -- 16 major cities just 16 months
after acquiring the licenses - while proving CDMA (code division multiple
access) to be the technology to beat for digital wireless communication.
And Bell Atlantic NYNEX Mobile made another strong contribution to our corporate
earnings, continuing to penetrate the consumer segment, introducing product and
pricing packages and maintaining robust growth while meeting competitive
challenges in key markets."
For Bell Atlantic NYNEX Mobile:
Annual subscriber growth for 1996 was more than 31 percent as once again,
more than one million customers were added, bringing total subscribers to
just beyond the 4.4 million mark.
The company continued to expand its presence in the consumer market segment
with PCS-like services such as TalkAlong (SM) and EZ-MAX (SM), which have
attracted close to one million subscribers since their introduction.
Internationally:
Omnitel Pronto Italia, Bell Atlantic's consortium providing wireless service
in Italy, signed up more than 700,000 customers to its digital GSM (global
system for mobile) service in its first year, becoming one of the world's
fastest-growing mobile operations. Bell Atlantic recently increased its
ownership share of Omnitel from 11.6 to 17.4 percent, adding another 3.4
million proportionate POPs to the company's wireless portfolio.
EuroTel Praha, Bell Atlantic's partnership serving the Czech Republic,
introduced digital GSM service, nearly doubling the customer base in that
country. EuroTel Bratislava, a similar partnership serving Slovakia, was
awarded a GSM license and plans to launch digital service early in 1997.
And Bell Atlantic reached an agreement to restructure its ownership of Grupo
Iusacell, S.A. de C.V., under which it would take operational control to
strengthen the company's position to capture growth opportunities in the
Mexican cellular, long-distance and fixed wireless markets.
"Success in the wireless business is increasingly a marketing game," Babbio
said. "Going forward, the winning companies will be differentiated by their
focus on the customer and the strength of their value propositions. For
example, with today's announcement of DigitalChoice (SM) CDMA service in
Washington, Baltimore, Pittsburgh and Charlotte (N.C.), and the introduction
of new packages of wireless services for our customers in these markets, we
continue to demonstrate our commitment to innovation, quality, value and
eadership in the wireless industry."
Looking ahead to 1997, Smith said, "We're entering the new year with
significant momentum and strong customer relationships, both of which will
serve us well as we complete our merger with NYNEX and vigorously pursue market
opportunities in long distance and data connectivity," Smith said. "The upside
potential for this industry is tremendous."
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 at Bell Atlantic's News
Center on the World Wide Web (http://www.ba.com). To receive news releases by
e-mail, visit the News Center and register for personalized automatic delivery
of Bell Atlantic news releases.
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BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited)
(In millions, except per-share amounts)
Three months ended December 31 Year ended December 31
1996 1995 1996 1995
Operating Revenues
Transport Services:
Local service $1,174.7 $1,106.0 $4,670.7 $4,411.2
Network access 824.2 845.2 3,456.8 3,394.7
Toll service 328.9 352.9 1,388.8 1,435.1
Ancillary Services:
Directory publishing 414.3 281.4 1,222.5 1,107.7
Other 164.4 38.4 601.2 553.3
Value-Added Services 430.2 382.6 1,599.5 1,393.2
------------------------------------------
Network Services Revenues 3,336.7 3,106.5 12,939.5 12,295.2
Wireless Services -- (a) -- (a) -- (a) 628.0 (a)
Other Services 34.6 47.7 (b) 141.9 506.3 (b)
------------------------------------------
Total Operating Revenues 3,371.3 3,154.2 13,081.4 13,429.5
Operating Expenses
Employee costs,
including benefits and taxes 938.5 892.5 3,921.6 4,022.0
Depreciation and amortization 677.8 635.2 2,594.6 2,627.1
Other 1,130.9 934.2 3,628. 3,694.2
------------------------------------------
Total Operating Expenses 2,747.2 2,461.9 (b) 10,144.8 10,343.3 (b)
Operating Income 624.1 692.3 2,936.6 3,086.2
Equity in income of affiliates (a) 56.2 62.2 327.9 152.5
Other income (expense), net (21.7 ) 7.7 (36.0) 331.7
Interest expense 117.4 140.5 477.9 561.0
Income before provision for income
taxes, extraordinary item, and
cumulative effect of change in
accounting principle 541.2 621.7 2,750.6 3,009.4
Provision for income taxes 195.6 226.3 1,011.2 1,147.6
Income before extraordinary item
and cumulative effect of change
in accounting principle 345.6 395.4 1,739.4 1,861.8
Extraordinary item:
Early extinguishment of debt,
net of tax -- (3.5) -- (3.5)
Cumulative effect of change in accounting
principle:
Directory publishing income,
net of tax -- -- 142.1 --
Net Income $345.6 $391.9 $1,881.5 $1,858.3
(a) On July 1, 1995, the company contributed its domestic cellular business to a
partnership and now 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 Dec. 31 Year ended Dec. 31
1995 1995
Operating Revenues - Other Services $27.2 $402.0
Operating Expenses 29.5 392.3
<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
1996 1995 1996 1995
Per common share amounts
Income before extraordinary item
and cumulative effect of change
in accounting principle $.79 $.90 $3.96 $4.25
Extraordinary item -- (.01) -- (.01)
Cumulative effect of change in
accounting principle -- -- .32 --
Net Income $.79 $.89 $4.28 $4.24
Cash dividends declared
per common share $.72 $.70 $2.88(c) $2.80
Weighted average number of common
and equivalent shares outstanding 439.4 439.8 439.6 438.3
Per Share Analysis (unaudited)
Earnings per share, as reported $.79 $.89 $4.28 $4.24
Adjustments:
Directory accounting change
- cumulative effect -- -- (.32) --
Directory accounting change
- current year (.13) -- (.01) --
Regulatory and other issues .13 -- .13 --
Actuarially determined costs
of a benefit plan amendment .06 -- .06 --
Loss on asset and investment
dispositions .12 -- .12 --
Gain on sale of cellular properties -- -- -- (.46)
Charges for business development
ventures and contracts -- -- -- .09
Early extinguishment of debt -- .01 -- .01
Adjusted earnings per share $.97 $.90 $4.26 $3.88
Other Selected Data (unaudited)
December 31,
1996 1995
----------------------
Return on average common equity
Three months ended 18.5% 23.2%
Year ended 25.7% 28.6%
Total assets (in millions) $24,856.2 $24,156.8
Total employees 62,600 61,800
(c) Includes payment of $.005 per common share for redemption of rights granted
under the company's Shareholder Rights Plan.
<PAGE>
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (unaudited)
(In millions)
Year ended December 31,
1996 1995
Cash Flows from Operating Activities
Net income $1,881.5 $1,858.3
Depreciation and amortization 2,594.6 2,627.1
Extraordinary item, net of tax -- 3.5
Cumulative effect of change in
accounting principle, net of tax (142.1) --
Gain on sale of cellular properties,
net of tax -- (200.1)
Equity in income of affiliates (327.9) (152.5)
Dividends received from affiliates 125.5 146.0
Other, net 283.9 (301.3)
Net Cash Provided by Operating Activities 4,415.5 3,981.0
Net Cash Used in Investing Activities (3,144.0) (2,090.8)
Net Cash Used in Financing Activities (1,475.8) (1,676.3)
Increase (Decrease) in Cash and Cash Equivalents (204.3) 213.9
Cash and Cash Equivalents, Beginning of Year 356.8 142.9
Cash and Cash Equivalents, End of Year $152.5 $356.8
<PAGE>
BELL ATLANTIC NYNEX MOBILE CELLULAR OPERATIONS (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. The
pro-forma results for the year ended December 31, 1995, 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,
1996 1995 % change
-------------------------------------------------------------------------
Selected Operating Data
Controlled POPs (1) (000) 56,830 55,840 1.8
Owned POPs (2) (000) 55,021 53,621 2.6
Subscribers (000) 4,410 3,356 31.4
Penetration (3) 7.76% 6.01% 29.1
Churn 1.86% 1.77% 5.1
Revenues per subscriber per month (4) $58 $61 (4.9)
Acquisition cost per gross add (5) $229 $202 13.4
Cash expense per subscriber $36 $36 0.0
Selected Financial Data
(Dollars in millions)
Operating revenues (6) $674.1 $537.2 25.5
Less: Cost of equipment 102.9 87.5 17.6
Net revenues 571.2 $449.7 27.0
Operating income 151.0 132.0 14.4
Pre-tax income (7) 139.7 132.1 5.8
Operating cash flow (8) 223.1 198.9 12.2
Operating cash flow margin 39% 44% (11.4)
Capital expenditures
excluding acquisitions 317.9 409.9 (22.4)
Year ended December 31,
1996 1995 (pro forma) % change
--------------------------------------------------------------------------
Selected Operating Data
Controlled POPs (1) (000) 56,830 55,840 1.8
Owned POPs (2)(000) 55,021 53,621 2.6
Subscribers (000) 4,410 3,356 31.4
Penetration (3) 7.76% 6.01% 29.1
Churn 1.77% 1.75% 1.1
Revenues per subscriber per month (4) $59 $63 (6.3)
Acquisition cost per gross add (5) $223 $212 5.2
Cash expense per subscriber $35 $39 (10.3)
<PAGE>
BELL ATLANTIC NYNEX MOBILE CELLULAR OPERATIONS (unaudited, continued)
Year ended December 31,
1996 1995 (pro forma) % change
Selected Financial Data
(Dollars in millions)
Operating revenues (6) $2,513.3 $1,945.9 29.2
Less: Cost of equipment 348.4 271.2 28.5
Net revenues 2,164.9 1,674.7 29.3
Operating income 576.9 406.0 42.1
Pre-tax income (7) 535.2 379.8 40.9
Operating cash flow (8) 886.5 663.9 33.5
Operating cash flow margin 41% 40% 2.5
Capital expenditures
excluding acquisitions 870.4 707.6 23.0
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, outcollect roaming and equipment revenue. Incollect roaming
revenues were $52.2 million and $203.9 million, respectively, for the
three- and 12-month periods ended 12/31/96 and $38.3 million and $146.2
million, respectively, for the three- and 12-month periods ended 12/31/95.
(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.
<PAGE>
BELL ATLANTIC CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (unaudited)*
(Dollars in Millions, Except Per Share Amounts)
Three months ended
-------------------------------------------
Mar. 31, 1996 June 30, 1996 Sept. 30, 1996
------------- ------------- -------------
Operating Revenues............... $ 3,219.9 $ 3,223.6 $ 3,266.6
Operating Expenses
Employee costs,
including benefits and taxes... 982.4 981.8 1,018.9
Depreciation and amortization.. 628.9 638.8 649.1
Other.......................... 808.4 850.6 838.7
------- ------- -------
2,419.7 2,471.2 2,506.7
------- ------- -------
Operating Income................. 800.2 752.4 759.9
Equity in Income of Affiliates... 71.6 94.3 105.8
Other Income (Expense), Net...... (2.3) (2.1) (9.9)
Interest Expense................. 120.8 119.8 119.9
------ ------ -------
Income Before Provision for Income
Taxes and Cumulative Effect of
Change in Accounting Principle.. 748.7 724.8 735.9
Provision for Income Taxes....... 284.0 261.1 270.5
------ ------ ------
Income Before Cumulative Effect
of Change in Accounting Principle 464.7 463.7 465.4
Cumulative Effect of Change in
Accounting Principle
Directory publishing income,
net of tax.................... 142.1 - -
------ ------ ------
Net Income....................... $ 606.8 $ 463.7 $ 465.4
======= ======= =======
Per Common Share:
Income Before Cumulative Effect of
Change in Accounting Principle. $ 1.06 $ 1.05 $ 1.06
Cumulative Effect of Change in
Accounting Principle........... .32 -- --
----- ---- ----
Net Income....................... $ 1.38 $ 1.05 $ 1.06
====== ====== ======
Weighted Average Number of Common
Shares and Equivalent Shares
Outstanding (in millions)...... 440.2 439.6 439.1
====== ====== ======
*Restated to reflect the adoption of a change in the method of accounting for
directory publishing income, effective Janaury 1, 1996.
