<PAGE>
SECURITIES 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 23, 1998
Exact name of registrant
as specified in its charter: BELL ATLANTIC CORPORATION
Commission File Number: 1-8606
State of Incorporation: Delaware
I.R.S. Employer Identification No.: 23-2259884
Address of principal
executive offices: 1095 Avenue of the Americas
New York, New York
Zip Code 10036
Registrant's telephone number,
including area code: (212) 395-2121
Former name or former address,
if changed since last report: Not applicable
<PAGE>
Item 5. Other Events
------------
Attached as exhibits are (i) a press release issued by Bell Atlantic Corporation
on April 23, 1998 announcing earnings for the first quarter of 1998, and (ii)
additional financial information released by Bell Atlantic Corporation on April
23, 1998.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits.
99.1 Press Release, dated April 23, 1998, issued by Bell Atlantic
Corporation.
99.2 Additional financial information released by Bell Atlantic Corporation
on April 23, 1998.
<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/ Mel Meskin
----------------------------------
Mel Meskin
Vice President - Comptroller
Date: April 24, 1998
<PAGE>
EXHIBIT 99.1
NEWS RELEASE [LOGO OF BELL ATLANTIC APPEARS HERE]
FOR IMMEDIATE RELEASE Contact:
April 23, 1998 David Frail
212-395-7726
[email protected]
Bell Atlantic Starts 1998 With Solid First Quarter
Adjusted Net Income Rises 10.7% On Strong Business Volumes,
Global Wireless Group Registers 33% Subscriber Growth
NEW YORK -- Bell Atlantic (NYSE:BEL) today announced adjusted first quarter
earnings per share of $1.32, 10.0 percent higher than first quarter 1997 EPS of
$1.20. All EPS figures are on a diluted basis. Adjusted net income rose 10.7
percent to $1.0 billion from $941.8 million in the first quarter of 1997.
First quarter 1998 adjusted EPS excludes $.19 per share for charges
related to merger integration and an enhanced pension offer. Reported EPS for
the quarter was $1.13 compared to $.89 in first quarter 1997. Reported net
income was $890.9 million compared to $698.2 million in first quarter 1997.
Total proportionate revenues, which include Bell Atlantic's share of
its unconsolidated wireless and international wireline businesses, increased 6.0
percent. Telecom Group revenues increased 2.4 percent, Global Wireless revenues
increased 21.1 percent and International Telecom revenues increased 57.2
percent.
"We delivered strong operating results across all three key units of
our business in a period of change and transition to a less regulated and
faster-growing communications marketplace," said Bell Atlantic Chairman and CEO
Raymond W. Smith.
<PAGE>
Bell Atlantic News Release, page 2
"Our Telecom Group results reflected the impacts of approximately $150
million in mandated price reductions during the quarter and $35-$40 million in
costs related to this winter's severe ice storms, as well as competitive effects
and the startup costs of creating platforms and capabilities for new services,
particularly in long distance and data markets.
"The performance of our Global Wireless unit was exemplary. Our
domestic cellular and PCS businesses demonstrated how to thrive in fully
competitive markets - with discipline and value to customers - and our
international wireless investments broke the one million-customer mark and
continued their growth in revenues and profitability. Global Wireless has come
into its own as a source of sustainable growth for the corporation.
"Our International Telecom group continues to strengthen its portfolio,
with key contributions in the quarter from Telecom Corporation of New Zealand
and Cable & Wireless Communications. By merging NYNEX CableComms, a primarily
consumer-oriented operation, into CWC, we have taken a significant ownership
position in a full-service provider with expanded reach and growth prospects in
an attractive market.
"At Bell Atlantic," Smith said, "we are forging the kind of corporation
required to grow and succeed in the new communications industry: a market leader
with diversified sources of earnings growth, strong and steady across-the-board
operating performance, and the readiness to move into new opportunities."
Ivan Seidenberg, Bell Atlantic vice chairman, president and COO, said,
"We will continue this transformation through the rest of this year as we drive
up our top-line growth, mine our merger synergies, develop new platforms and
capabilities, and continue to break through on policy issues.
"Our increased scale and scope has already produced significant capital
savings - more than $150 million on an annual basis -- in contracts for data
networking equipment. To capture revenue synergies, we used best practices to
design and execute what is turning out to be a very successful sales campaign
for value-added services, and we should begin to see the top-line benefits
starting next quarter. We also are on track to
--more--
<PAGE>
Bell Atlantic News Release, page 3
transform our cost structure and meet our 1998 target of $450 million in expense
savings.
"Our recently announced Data Solutions Group will enable us to organize
our data assets and capabilities and become a compelling choice for fully
integrated local, national and global solutions for business customers.
"And as for long distance, we have broken the regulatory logjam. The
recent endorsement by the chairman of the New York State Public Service
Commission should go a long way toward persuading the FCC that our application
to offer long distance in New York should be approved.
"Not only will approval begin to open up the $20 billion market in our
region, it will be a catalyst for growth across the board - we finally will be
allowed to offer one-stop shopping for toll and long distance like our
competitors, which will strengthen our ability to retain customers and win new
ones. Long distance also will give us the ability to better serve high-end
customers, become a full-service data provider, and serve the high percentage of
international traffic to and from our region.
"I'm confident that we'll stay on course and meet both our financial
and our strategic targets, and come through 1998 ready to turn our "first-mile"
local assets -- the best in the business, in the world's best marketplace --
into national and global opportunities."
Domestic Telecommunications Highlights
Telecom Group revenues grew 2.4 percent compared to first quarter 1997,
as continued strong business volumes helped offset the effects of mandated rate
reductions.
Strong demand growth was reflected in the following:
. Domestic access lines in service grew 4.3 percent over first quarter
1997, to approximately 40.4 million. As of this quarter, and for prior
periods, Bell Atlantic includes Primary Rate ISDN (Integrated Services
Digital Network) channels in its access line totals to recognize the
growing transition from lines to bandwidth.
. Bell Atlantic ended the quarter with more than 450,000 basic-rate ISDN
lines in service, up 29.7 percent from first quarter 1997, and more
than 550,000 Primary Rate ISDN channels in service, more than double
the first quarter 1997 total.
. Access minutes of use grew 8.5 percent.
<PAGE>
Bell Atlantic News Release, page 4
In the residential market:
. Revenues from value-added call management services such as Caller ID,
Call Waiting and Home Voice Mail rose 14.1 percent over the same period
last year. The number of Caller ID subscribers rose to 5.5 million,
with revenues increasing 43.0 percent.
In business markets:
. The number of Centrex lines increased 8.8 percent year-over-year to 4.6
million.
. The number of "DS0" circuits in service (digital, high-bandwidth and
packet-switched services as measured in 64-kilobit voice-grade
equivalents) increased more than 43 percent over first quarter 1997.
. Revenues from high-bandwidth switched and special access services rose
28.1 percent over first quarter 1997 levels and approached $500
million.
. The Data Solutions Group's network integration line of business, known
as BANI, had an exceptionally strong first quarter, growing revenues 47
percent.
In wholesale markets:
. Bell Atlantic ended the quarter providing approximately 300,000 resold
access lines and nearly 50,000 unbundled loops to other carriers. The
majority of wholesale sales took place in New York, where Bell
Atlantic-New York received the endorsement of the chairman of the
Public Service Commission of conditions for the PSC's endorsement of
the company's entry into long distance.
Adjusted network operating expenses for the quarter totaled $5.0
billion, 2.6 percent higher than in 1997. Expenses included costs incurred to
restore network facilities and service after January's severe ice storms in the
Northeast, as well as costs for compliance with the Telecommunications Act
'checklist,' including local number portability, and investments in growth
opportunities.
Global Wireless Highlights
Global Wireless ended the quarter with a total of 6.7 million
proportionate customers, an increase of nearly 1.7 million, or 33 percent, over
the first quarter of 1997. Proportionate international subscribers passed the
million-customer milestone in the
--more--
<PAGE>
Bell Atlantic News Release, page 5
quarter, with the number increasing by 638,000, or 167 percent, over first
quarter 1997. Net international customer additions in the quarter of 211,000
were triple the number in the prior-year period.
Total proportionate revenues grew to $977 million, 21.1 percent higher
than first quarter 1997, with international ventures and PrimeCo Personal
Communications, Bell Atlantic's domestic PCS partnership, contributing more than
50 percent of that growth. Proportionate operating income for the portfolio
continued to improve, increasing 68 percent compared to first quarter 1997.
In domestic markets, Bell Atlantic Mobile's focus on profitable growth
in the face of intensifying competition paid off in subscriber growth of more
than 18 percent and revenue growth of nearly 12 percent. BAM's aggressive
redefinition of digital pricing in March, which quickly began to shift customers
from analog to digital networks, helped fuel this growth. At the same time, BAM
improved its cash flow margin by five percentage points over the same period
last year, to 42 percent, resulting in a 19 percent increase in operating
income.
PrimeCo Personal Communications added more than 121,000 customers, 56
percent more additions than in first quarter 1997, and passed the half-million
mark during the quarter.
Domestic highlights include:
. BAM ended the quarter with 5.5 million customers, with net customer
additions of 127,000 in highly competitive markets. Churn improved
slightly on a larger customer base, to 1.83 percent from 1.84 percent
in first quarter 1997.
. BAM added 96,000 digital customers in the quarter, more than half of
whom signed up after the new digital pricing was introduced on March 1.
BAM now has more than 250,000 digital subscribers, or 4.7 percent of
its total.
. BAM expanded margin and improved profitability by decreasing cash
expense per subscriber nearly 15 percent, to $24.60, while revenue per
subscriber decreased 6.6 percent, to $48.40. BAM total revenue grew
more than $80 million from the year-ago period.
<PAGE>
Bell Atlantic News Release, page 6
. Proportionate PrimeCo revenues for the quarter grew to $49 million,
more than quadruple the revenues of first quarter 1997, with average
monthly revenue per subscriber of $60.
. PrimeCo's network now covers over 36 million POPs and 28 cities, with
penetration now 1.4 percent of covered POPs.
International highlights include:
. Omnitel Pronto Italia, Bell Atlantic's Italian wireless consortium,
continued its rapid subscriber growth, exceeding the 3 million customer
mark in March. Bell Atlantic announced in April that it will increase
its stake in Omnitel from 17.4 to 19.7 percent.
. Grupo Iusacell in Mexico increased subscribers more than 90 percent
over the year-ago period. During the first quarter, Iusacell also began
deployment of the first next-generation digital CDMA service in Latin
America.
. EuroTel Bratislava, Bell Atlantic's wireless investment in the Slovak
Republic, had a record quarter for additions, increasing its subscriber
base more than 64 percent over first quarter 1997 to nearly 150,000.
. EuroTel Praha in the Czech Republic also had a robust quarter, with net
additions of more than 37,000, bringing the number of customers to
392,000, 91 percent more than in first quarter 1997.
. STET Hellas in Greece continued its rapid growth, increasing
subscribers 85 percent from the same period a year ago.
International Telecommunications Highlights
Bell Atlantic's International Telecommunications portfolio of overseas
wireline investments ended the period with more than 900,000 access lines in
service on a proportionate basis, and showed proportionate revenue growth of
57.2 percent. International Telecom made a substantial contribution to equity
income growth in the quarter.
Bell Atlantic benefited from the restructuring of its U.K. investment
with the formation in April 1997 of Cable & Wireless Communications (CWC) from
Mercury Communications and three cable television companies, including NYNEX
CableComms.
--more--
<PAGE>
Bell Atlantic News Release, page 7
Bell Atlantic owns 18.5 percent of CWC. Since April 1997, CWC has made
significant progress toward integrating operations and driving strong revenue
and subscriber growth in all lines of business, and has seen its London stock
price hit an all-time high. CWC will announce results on May 11 for its fiscal
year ending March 31, 1998.
Telecom Corporation of New Zealand (TCNZ) enjoyed solid growth in
volumes and earnings for the nine months ended Dec. 31, 1997. During the first
quarter, Bell Atlantic completed the sale of $2.4 billion in medium-term notes
exchangeable for TCNZ shares. Bell Atlantic used the proceeds to pay down
short-term debt while retaining its 24.95 percent ownership of TCNZ. TCNZ will
announce results on May 19 (EST) for its fiscal year ending March 31, 1998.
Bell Atlantic - formed through the merger of Bell Atlantic and NYNEX -
is at the forefront of the new communications and information industry. With
more than 41 million telephone access lines and 6.7 million wireless customers
worldwide, Bell Atlantic companies are premier providers of advanced wireline
voice and data services, market leaders in wireless services and the world's
largest publishers of directory information. Bell Atlantic companies are also
among the world's largest investors in high-growth global communications
markets, with operations and investments in 22 countries.
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.
NOTE: This press release contains statements about expected future
events and financial results that are forward-looking and subject to risks and
uncertainties. For those statements, we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. Discussion of factors that may affect future results is
contained in our recent filings with the Securities and Exchange Commission.
###
<PAGE>
Bell Atlantic Corporation 8
- ---------------------------------------
Consolidated Statements of Income
- ---------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/98 3/31/97 % Change
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $ 3,331.6 $ 3,110.3 7.1
Network access services 1,906.5 1,858.8 2.6
Long distance services 501.9 570.0 (11.9)
Ancillary services 469.7 455.7 3.1
Directory and information services 557.7 530.9 5.0
Wireless services 856.4 774.1 10.6
Other services 27.3 116.7 (76.6)
......................................
Total Operating Revenues 7,651.1 7,416.5 3.2
......................................
Operating Expenses
Employee costs 2,304.4 2,470.1 (6.7)
Depreciation and amortization 1,410.5 1,371.3 2.9
Taxes other than income 371.9 395.0 (5.8)
Other operating expenses 1,852.3 1,721.6 7.6
......................................
Total Operating Expenses 5,939.1 5,958.0 (.3)
......................................
Operating Income 1,712.0 1,458.5 17.4
Income (loss) from unconsolidated businesses 22.8 (34.7) --
Other income and (expense), net 13.8 9.6 43.8
Interest expense 310.0 329.5 (5.9)
Provision for income taxes 529.0 405.7 30.4
......................................
Income from Continuing Operations 909.6 698.2 30.3
Extraordinary item
Early extinguishment of debt, net of tax (16.2) -- --
......................................
Net income 893.4 698.2 28.0
Redemption of investee preferred stock (2.5) -- --
......................................
Net Income Available to
Common Shareowners $ 890.9 $ 698.2 27.6
======================================
Basic Earnings per Share $ 1.15 $ .90 27.8
Weighted average number of common
shares outstanding (in millions) 776.5 775.8
Diluted Earnings per Share $ 1.13 $ .89 27.0
Weighted average of common
shares-assuming dilution (in millions) 789.3 782.6
</TABLE>
Note:
Basic earnings per share are based on the weighted-average number of shares
outstanding during the year.
Diluted earnings per share include the dilutive effect of shares issuable under
our stock-based compensation plans, which represent the only potential dilutive
common shares.
For purposes of computing earnings per share amounts, net income available to
common shareowners has been reduced by the amount of the premium paid on the
redemption of preferred stock by an equity investee.
<PAGE>
Bell Atlantic Corporation 9
- -----------------------------
Proportionate Revenues
- -----------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
--------------
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/98 3/31/97 % Change
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues
Telecom 6,791.1 6,632.7 2.4
Global Wireless (1) 976.7 806.7 21.1
International Telecom (1) 350.6 223.0 57.2
.............................
Total 8,118.4 7,662.4 6.0
.............................
</TABLE>
Footnote:
(1) Represents Bell Atlantic's proportionate share of ownership interests in
its global wireless (consolidated and unconsolidated) and international
telecom investments.
Telecom sector is fully detailed on p.8, global wireless is detailed on
p.9.
================================================================================
- -------------------------------------------------------
Earnings Reconciliation
- -------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
---------------------------
3 Mos. Ended 3/31/98 3 Mos. Ended 3/31/97
Unaudited Net Income Diluted EPS Net Income Diluted EPS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Income Available to Common Shareowners $ 890.9 $ 1.13 $ 698.2 $ .89
Adjustments:
Merger related transition costs 5.2 .01 - -
Special pension enhancement 146.8 .18 243.6 .31
...........................................................
Adjusted Earnings $ 1,042.9 $ 1.32 $ 941.8 $ 1.20
===========================================================
Adjusted Growth 10.7% 10.0%
</TABLE>
<PAGE>
Bell Atlantic Corporation 10
- ------------------------------------------------------------------
Consolidated Adjusted Statements of Income - First Quarter
- ------------------------------------------------------------------
(Dollars in Millions, Except Per Share Amounts)
<TABLE>
<CAPTION>
3 Mos. Ended 3/31/98 3 Mos. Ended 3/31/97
Unaudited Reported Adjustments Adjusted Reported Adjustments Adjusted % Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,331.6 $ 3,331.6 $ 3,110.3 $ 83.0 (4) $ 3,193.3 4.3
Network access services 1,906.5 1,906.5 1,858.8 1,858.8 2.6
Long distance services 501.9 501.9 570.0 570.0 (11.9)
Ancillary services 469.7 469.7 455.7 455.7 3.1
Directory and information services 557.7 557.7 530.9 530.9 5.0
Wireless services 856.4 856.4 774.1 (18.7)(5) 755.4 13.4
Other services 27.3 27.3 116.7 116.7 (76.6)
..........................................................................
Total Operating Revenues 7,651.1 7,651.1 7,416.5 64.3 7,480.8 2.3
..........................................................................
Operating Expenses
Employee costs 2,304.4 (243.1)(1) 2,061.3 2,470.1 (386.8)(6) 2,083.3 (1.1)
Depreciation and amortization 1,410.5 1,410.5 1,371.3 1,371.3 2.9
Taxes other than income 371.9 371.9 395.0 395.0 (5.8)
Other operating expenses 1,852.3 (5.6)(2) 1,846.7 1,721.6 77.3(7) 1,798.9 2.7
..........................................................................
Total Operating Expenses 5,939.1 (248.7) 5,690.4 5,958.0 (309.5) 5,648.5 .7
..........................................................................
Operating Income 1,712.0 248.7 1,960.7 1,458.5 373.8 1,832.3 7.0
Income (loss) from unconsolidated businesses 22.8 22.8 (34.7) (34.7) -
Other income and (expense), net 13.8 13.8 9.6 9.6 43.8
Interest expense 310.0 310.0 329.5 (13.0)(8) 316.5 (2.1)
Provision for income taxes 529.0 96.7 (3) 625.7 405.7 143.2 (9) 548.9 14.0
..........................................................................
Income from Continuing Operations 909.6 152.0 1,061.6 698.2 243.6 941.8 12.7
Extraordinary item
Early extinguishment of debt, net of tax (16.2) (16.2) - - - -
..........................................................................
Net Income 893.4 152.0 1,045.4 698.2 243.6 941.8 11.0
Redemption of investee preferred stock (2.5) (2.5) - - -
..........................................................................
Net Income Available to
Common Shareowners $ 890.9 $ 152.0 $ 1,042.9 $ 698.2 $ 243.6 $ 941.8 10.7
==========================================================================
Diluted Earnings per Share $ 1.13 $ .19 $ 1.32 $ .89 $ .31 $ 1.20 10.0
--------------------------------------------------------------------------
Weighted average number of common
shares-assuming dilution (in millions) 789.3 789.3 782.6 782.6
</TABLE>
Footnotes:
1998
(1) Adjustment for special pension enhancement ($240.3) and transition costs
($2.8)
(2) Adjustment for transition costs
(3) Tax effects of items (1) and (2) above
1997
(4) Restated for reclass adjustment ($83.0)
(5) Adjustment related to an accounting reclass for BAM promotions ($18.7)
(6) Adjustment for special pension enhancement ($386.8)
(7) Restated for reclass adjustment ($96.0) and accounting reclass for BAM
promotions ($18.7)
(8) Restated for reclass adjustment ($13.0)
(9) Tax effects of items (4) - (8) above
<PAGE>
Bell Atlantic Corporation 11
- -------------------------------------------------
Selected Financial and Operating Statistics
- -------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
-----------------
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/98 3/31/97
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Debt ratio-end of period 61.2% 59.4%
Return on average common equity-adjusted basis 31.9% 28.5%
Return on average assets-adjusted basis 7.7% 7.0%
Book value per common share $ 16.54 $ 16.75
Cash dividends declared per common share $ .77 $ .74
Common shares outstanding (in millions)
End of period 776.2 775.9
Capital expenditures
Telecom $ 1,488 $ 1,102
Domestic cellular 103 240
Other 68 106
..................................
Total $ 1,659 $ 1,448
Employees
Telecom 131,577 128,796
Other 9,824 12,577
..................................
Total 141,401 141,373
</TABLE>
<PAGE>
Bell Atlantic Corporation 12
- ------------------------------------------------------------------
Telecom Sector - Adjusted Financial Results
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
----------------
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/98 3/31/97 % Change
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $ 3,345.6 $ 3,207.5 4.3
Network access services 1,906.5 1,859.0 2.6
Long distance services 501.9 570.3 (12.0)
Ancillary services 479.4 464.8 3.1
Directory and information services 557.7 531.1 5.0
..............................
Total Operating Revenues $ 6,791.1 $ 6,632.7 2.4
..............................
Operating Expenses
Employee costs 1,914.1 1,926.3 (.6)
Depreciation and amortization 1,270.4 1,230.0 3.3
Taxes other than income 348.9 373.0 (6.5)
Other operating expenses 1,446.8 1,324.7 9.2
..............................
Total Operating Expenses $ 4,980.2 $ 4,854.0 2.6
..............................
Operating Income $ 1,810.9 $ 1,778.7 1.8
Operating Income Margin 26.7% 26.8%
Operating Cash Flow $ 3,081.3 $ 3,008.7 2.4
Operating Cash Flow Margin 45.4% 45.4%
- -------------------------------------------------------------------------------------------------
Operating Statistics
Access lines in service (in millions)
Residence 25,606 24,757 3.4
Business 14,298 13,488 6.0
Public 520 521 (.2)
..............................
Total 40,424 38,766 4.3
..............................
ISDN (BRI lines) (000) 459 354 29.7
High Capacity and Digital Data Svcs (000) (1)
Total DSO Equivalents 16,205 11,315 43.2
PRI DSO Equivalents 578 272 112.5
Access minutes of use (in millions) 41,609 38,333 8.5
Employees per 10,000 access lines (2) 30.1 30.9 (2.6)
</TABLE>
Footnote:
(1) Includes all DSO and above circuits (Digital DSO, DS1, DS3, PRI, Frame
Relay, OCnC) and does not include Bell Atlantic Official Company Service or
Network Facilities. DSO equivalents defined as a factor of 64kbs
transmission rate.
(2) Calculated based on employees of telephone operations only
<PAGE>
Bell Atlantic Corporation 13
- ---------------------------------------------------------------------
Global Wireless Sector - Quarterly Proportionate Results
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
----------------
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/98 3/31/97 % Change
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Combined Global Wireless
Selected Financial Results
Revenues $ 976.7 $ 806.7 21.1
Operating income $ 120.5 $ 71.7 68.1
Operating cash flow (1) $ 292.3 $ 194.6 50.2
Selected Operating Data
Subscribers (000) 6,741 5,071 32.9
Subscriber net adds in period (000) 394 326 20.9
POPs (000) 175,774 174,617 .7
- -------------------------------------------------------------------------------------------
Bell Atlantic Mobile (2)
Selected Financial Results
Revenues $ 785.6 $ 703.8 11.6
Less: Incollect revenues 62.1 47.3 31.3
Less: Equipment revenues 35.2 30.5 15.4
..............................
Service revenues $ 688.3 $ 626.0 10.0
..............................
Operating income $ 167.5 $ 140.7 19.0
Operating cash flow $ 289.0 $ 234.4 23.3
Operating cash flow margin (3) 42% 37%
Capital expenditures, excluding acquisitions 103.5 239.9 (56.9)
Selected Operating Data
Subscribers (000) 5,483 4,634 18.3
Penetration (4) 9.6% 8.2%
Subscriber net adds in period (000) 127 224 (43.3)
Controlled POPs (000) (5) 56,987 56,830 .3
Owned POPs (000) (6) 55,101 55,021 .1
Churn rate 1.83% $ 1.84%
Total revenue per subscriber $ 48.40 $ 51.81 (6.6)
Service revenue per subscriber $ 42.41 $ 46.08 (8.0)
Cash expense per subscriber $ 24.60 $ 28.83 (14.7)
Acquisition cost per add (7) $ 230 $ 210 9.5
- -------------------------------------------------------------------------------------------
PrimeCo Personal Communications (8)
Selected Financial Data
Revenues $ 48.5 $ 11.8 -
Operating income $ (64.9) $ (58.6) (10.8)
Operating cash flow $ (36.6) $ (42.7) 14.3
Selected Operating Data
Subscribers (000) 237 54 -
Subscriber net adds in period (000) 56 36 55.6
POPs (000) 28,487 28,487 -
- -------------------------------------------------------------------------------------------
International Wireless Operations (9)
Selected Financial Data
Revenues $ 142.6 $ 91.1 56.5
Operating income $ 17.9 $ (10.4) -
Operating cash flow $ 39.9 $ 2.9 -
Selected Operating Data
Subscribers (000) 1,021 383 -
Subscriber net adds in period (000) 211 66 -
POPs (000) 90,300 89,300 1.1
</TABLE>
Footnotes:
(1) Operating cash flow equals operating income plus depreciation and
amortization
(2) Bell Atlantic Mobile results reflect consolidated results for all
controlled markets
(3) Operating cash flow margin is calculated by dividing operating cash flow by
service revenues
(4) Penetration is calculated by dividing subscribers by controlled POPs
(5) Controlled POPs represent the total number of POPs for which Bell Atlantic
Mobile has operating control
(6) Owned POPs represent Bell Atlantic Mobile percentage ownership in all
licensed markets
(7) Acquisition cost per add includes commissions and loss on handsets
(8) Proportionate results representing 46.7% of total PrimeCo Personal
Communications
(9) Represents Bell Atlantic's proportionate share of International wireless
investments including consolidated, equity method, and cost basis
investments
<PAGE>
EXHIBIT 99.2
Bell Atlantic Corporation 1
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Consolidated Balance Sheets
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<TABLE>
<CAPTION>
(Dollars in Millions)
--------------
Unaudited 3/31/98 3/31/97 $ Change 12/31/97 $ Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 403.9 $ 257.7 $ 146.2 $ 322.8 $ 81.1
Short-term investments 746.1 350.9 395.2 720.6 25.5
Accounts receivable, net 6,277.6 5,994.8 282.8 6,340.8 (63.2)
Inventories 544.5 500.9 43.6 550.3 (5.8)
Prepaid expenses 773.2 817.2 (44.0) 634.0 139.2
Other 500.7 620.9 (120.2) 432.3 68.4
...................................................................
Total current assets 9,246.0 8,542.4 703.6 9,000.8 245.2
...................................................................
Plant, property and equipment 78,654.7 77,049.2 1,605.5 77,437.2 1,217.5
Less accumulated depreciation 43,308.2 40,581.5 2,726.7 42,397.8 910.4
...................................................................
35,346.5 36,467.7 (1,121.2) 35,039.4 307.1
Investments in unconsolidated businesses 5,106.7 4,528.8 577.9 5,144.2 (37.5)
Other assets 4,615.1 4,300.0 315.1 4,779.7 (164.6)
...................................................................
Total Assets $ 54,314.3 $ 53,838.9 $ 475.4 $ 53,964.1 $ 350.2
===================================================================
Liabilities and Shareowners' Investment
Current liabilities
Debt maturing within one year $ 4,551.8 $ 5,518.8 $ (967.0) $ 6,342.8 $ (1,791.0)
Accounts payable and accrued liabilities 5,628.0 5,293.8 334.2 5,966.4 (338.4)
Other 1,300.3 1,505.1 (204.8) 1,355.0 (54.7)
...................................................................
Total current liabilities 11,480.1 12,317.7 (837.6) 13,664.2 (2,184.1)
...................................................................
Long-term debt 15,678.9 13,500.4 2,178.5 13,265.2 2,413.7
Employee benefit obligations 10,042.7 9,911.0 131.7 10,004.4 38.3
Deferred credits and other liabilities
Deferred income taxes 2,145.3 1,817.2 328.1 2,106.2 39.1
Unamortized investment tax credits 243.5 278.1 (34.6) 250.7 (7.2)
Other 767.0 774.8 (7.8) 772.6 (5.6)
Minority interest, including a portion subject to
redemption requirements 918.6 2,099.6 (1,181.0) 911.2 7.4
Preferred stock of subsidiary 200.5 145.0 55.5 200.5 -
Shareowners' investment
Common stock 78.8 78.7 0.1 78.8 -
Contributed capital 13,349.6 13,283.5 66.1 13,255.6 94.0
Reinvested earnings 1,325.5 1,388.9 (63.4) 1,261.6 63.9
Accumulated other comprehensive loss (648.7) (423.0) (225.7) (553.3) (95.4)
...................................................................
14,105.2 14,328.1 (222.9) 14,042.7 62.5
Less common stock in treasury, at cost 637.5 592.2 45.3 590.5 47.0
Less deferred compensation-employee stock ownership plans 630.0 740.8 (110.8) 663.1 (33.1)
...................................................................
Total shareowners' investment 12,837.7 12,995.1 (157.4) 12,789.1 48.6
...................................................................
Total Liabilities and Shareowners' Investment $ 54,314.3 $ 53,838.9 $ 475.4 $ 53,964.1 $ 350.2
===================================================================
</TABLE>
<PAGE>
Bell Atlantic Corporation 2
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Consolidated Statements of Cash Flows
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<TABLE>
<CAPTION>
(Dollars in Millions)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/98 3/31/97 $ Change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net Income $ 893.4 $ 698.2 $ 195.2
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,410.5 1,371.3 39.2
Extraordinary item, net of tax 16.2 - 16.2
(Income)/loss from unconsolidated businesses (22.8) 34.7 (57.5)
Dividends received from unconsolidated businesses 53.8 49.2 4.6
Amortization of unearned lease income (29.5) (25.8) (3.7)
Deferred income taxes, net 55.7 (15.3) 71.0
Investment tax credits (7.2) (10.6) 3.4
Other items, net 60.2 126.5 (66.3)
Changes in certain assets and liabilities, net of effects
from acquisition/disposition of businesses (227.5) (264.7) 37.2
....................................................
Net cash provided by operating activities 2,202.8 1,963.5 239.3
....................................................
Cash Flows from Investing Activities
Net change in short-term investments (17.3) (37.6) 20.3
Additions to plant, property and equipment (1,659.3) (1,448.2) (211.1)
Proceeds from sale of plant, property and equipment .2 .5 (.3)
Investment in leased assets (1.5) (9.4) 7.9
Proceeds from leasing activities 49.8 32.1 17.7
Investment in notes receivable - (9.6) 9.6
Proceeds from notes receivable 2.2 4.0 (1.8)
Investments in unconsolidated businesses, net (128.3) (165.4) 37.1
Proceeds from Telecom Corp NZ share repurchase plan - 21.9 (21.9)
Proceeds from disposition of businesses 3.8 - 3.8
Other, net 35.2 (82.2) 117.4
....................................................
Net cash used in investing activities (1,715.2) (1,693.9) (21.3)
....................................................
Cash Flows from Financing Activities
Proceeds from borrowings 2,642.4 69.9 2,572.5
Principal repayments of borrowings and capital lease obligations (36.1) (85.5) 49.4
Early extinguishment of debt (200.0) - (200.0)
Net change in short-term borrowings with original maturities of three months
or less (1,850.7) 718.6 (2,569.3)
Dividends paid (593.8) (574.9) (18.9)
Proceeds from sale of common stock 324.6 126.9 197.7
Purchase of common stock for treasury (605.0) (166.1) (438.9)
Minority interest - (18.9) 18.9
Net change in outstanding checks drawn on controlled disbursement accounts (87.9) (331.3) 243.4
....................................................
Net cash used in financing activities (406.5) (261.3) (145.2)
....................................................
Increase in cash and cash equivalents 81.1 8.3 72.8
Cash and cash equivalents, beginning of period 322.8 249.4 73.4
....................................................
Cash and cash equivalents, end of period $ 403.9 $ 257.7 $ 146.2
====================================================
</TABLE>
