SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM 11-K
-------------
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 1-8608
-------------
NYNEX Corporation Savings and Security Plan
(Non-Salaried Employees)
-------------
Bell Atlantic Corporation
1095 Avenue of the Americas, New York, New York 10036
<PAGE>
Item 1. Financial Statements and Exhibits.
(a) Financial Statements of the Plan* included herein:
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Plan Benefits
as of December 31, 1997 and 1996
Statements of Changes in Net Assets Available for Plan
Benefits for the years ended December 31, 1997 and
1996
Notes to Financial Statements
- ----------------
* This and certain other capitalized terms used but not defined herein shall
have their respective meanings as defined in the Plan Prospectus.
<PAGE>
Report of Independent Accountants
To the Employees' Benefit Committee
of Bell Atlantic Corporation:
We have audited the Statements of Net Assets Available for Plan Benefits of the
NYNEX Corporation Savings and Security Plan (Non-Salaried Employees) as of
December 31, 1997 and 1996, and the related Statements of Changes in Net Assets
Available for Plan Benefits for each of the two years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the NYNEX
Corporation Savings and Security Plan (Non-Salaried Employees) as of December
31, 1997 and 1996 and the changes in net assets available for plan benefits for
each of the two years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Fund Information in the Statements of
Net Assets Available for Plan Benefits as of December 31, 1997 and 1996 and the
Statements of Changes in Net Assets Available for Plan Benefits for each of the
two years in the period ended December 31, 1997 is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each Fund. The
Fund Information has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
COOPERS & LYBRAND L.L.P.
New York, New York
April 30, 1998
1
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Statement of Net Assets Available for Plan Benefits
December 31, 1997
(Dollars in Thousands)
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------------------------------
Bell
Atlantic Government Diversified Interest Active
Shares Telecommunications Obligations Equity Income Loan U.S. Equity
ASSETS: Fund Fund Fund Portfolio Fund Fund Fund
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at market
(see Notes 2 and 3):
Allocated Share of
Master Trust net assets $1,833,709 $ 170,080 $ 7,258 $ 301,422 $ 445,065 $ -- $ 61,164
Temporary cash investments -- -- -- 1,197 -- -- 243
Bell Atlantic Corporation
common shares -- -- -- -- -- -- --
----------- --------- --------- --------- --------- -------- --------
Total investments $1,833,709 170,080 7,258 302,619 445,065 -- 61,164
Receivables:
Employer's contribution 1,916 -- -- -- -- -- --
Participant's contribution 1,510 -- -- 1,437 1,024 -- 290
Loan repayments 955 -- -- 336 270 (1,737) 64
Loans to participants -- -- -- -- -- 131,181 --
Dividends and
interest receivable -- -- -- 12 -- -- 3
----------- --------- --------- --------- --------- ------- --------
Total receivables 4,381 -- -- 1,785 1,294 129,444 357
----------- --------- --------- --------- --------- ------- --------
Total assets 1,838,090 170,080 7,258 304,404 446,359 129,444 61,764
----------- --------- --------- --------- --------- ------- --------
Net Assets Available
for Plan Benefits
(Notes 1 and 2) $1,838,090 $ 170,080 $ 7,258 $ 304,404 $ 446,359 $129,444 $ 61,764
=========== ========= ========= ========= ========= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Fund Information
---------------------------------------------------------------------------
U.S.
U.S. Global International U.S. Bond
Balanced Balanced Equity Small Market
ASSETS: Fund Fund Fund Cap Fund Index Total
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investments at market
(see Notes 2 and 3):
Allocated Share of
Master Trust net assets $22,806 $ 21,152 $ 14,401 $ 41,428 $ 41 $ 2,918,526
Temporary cash investments 91 84 57 165 -- 1,837
Bell Atlantic Corporation
common shares -- -- -- -- -- --
-------- -------- -------- -------- -------- -----------
Total Investments 22,897 21,236 14,458 41,593 41 2,920,363
Receivables:
Employer's contribution -- -- -- -- -- 1,916
Participant's contribution 91 110 84 228 33 4,807
Loan repayments 17 22 17 49 7 0
Loans to participants 131,181
Dividends and
interest receivable 1 1 1 2 -- 20
-------- -------- -------- -------- -------- -----------
Total receivables 109 133 102 279 40 137,924
-------- -------- -------- -------- -------- -----------
Total assets 23,006 21,369 14,560 41,872 81 3,058,287
-------- -------- -------- -------- -------- -----------
Net Assets Available
for Plan Benefits
(Notes 1 and 2) $23,006 $ 21,369 $ 14,560 $ 41,872 $ 81 $ 3,058,287
======== ======== ======== ======== ======== ===========
</TABLE>
See notes to financial statements.
2
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Statement of Net Assets Available for Plan Benefits
December 31, 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
Fund Information
-----------------------------------------------------------------------------------------------
Bell
Atlantic Government Diversified Interest Active
Shares Telecommunications Obligations Equity Income Loan U.S. Equity
ASSETS: Fund Fund Fund Portfolio Fund Fund Fund
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at market
(see Notes 2 and 3):
Allocated Share of
Master Trust net assets $1,272,991 $ 136,574 $ 5,811 $ 164,600 $ 456,886 $ -- $ 28,220
Temporary cash investments -- -- -- 988 -- -- 170
Receivable for loans
to participants -- -- -- -- -- 108,864 --
----------- --------- --------- --------- --------- ------- --------
Total Investments 1,272,991 136,574 5,811 165,588 456,886 108,864 28,390
Dividends and
interest receivable -- -- -- 8 -- -- 1
----------- --------- --------- --------- --------- ------- --------
Net Assets Available
for Plan Benefits
(Notes 1 and 2) $1,272,991 $ 136,574 $ 5,811 $ 165,596 $ 456,886 $108,864 $ 28,391
=========== ========= ========= ========= ========= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Fund Information
---------------------------------------------------------------
U.S. Global International U.S.
Balanced Balanced Equity Small
ASSETS: Fund Fund Fund Cap Fund Total
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investments at market
(see Notes 2 and 3):
Allocated Share of
Master Trust net assets $12,968 $ 12,993 $ 11,164 $ 16,684 $ 2,118,891
Temporary cash investments 78 78 67 100 1,481
Receivable for loans
to participants -- -- -- -- 108,864
-------- -------- -------- -------- -----------
Total Investments 13,046 13,071 11,231 16,784 2,229,236
Dividends and
interest receivable 1 1 1 1 13
-------- -------- -------- -------- -----------
Net Assets Available
for Plan Benefits
(Notes 1 and 2) $13,047 $ 13,072 $ 11,232 $ 16,785 $ 2,229,249
======== ======== ======== ======== ===========
</TABLE>
See notes to financial statements.
3
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Statement of Changes in Net Assets Available for Plan Benefits
December 31, 1997
(Dollars in Thousands)
<TABLE>
<CAPTION>
Fund Information
---------------------------------------------------------------------------------------------
Bell
Atlantic Government Diversified Interest Active
Shares Telecommunications Obligations Equity Income Loan U.S. Equity
ASSETS: Fund Fund Fund Portfolio Fund Fund Fund
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Allotments, Contributions
and Transfers:
Employee allotments: $ 49,345 $ 4,407 $ 1,140 $ 39,965 $ 40,856 $ $ 8,343
Interfund transfers (38,579) (5,886) 237 62,411 (30,701) 2,494
Plan transfers-in 1,395 105 102 588 491 -- 93
Rollover contributions 154 55 13 419 193 -- 310
Employing company
contributions (Note 1) 64,199 -- -- -- -- -- --
Loans to participants (41,673) (1,275) (297) (10,065) (14,783) $ 72,442 (1,639)
Loan repayments 27,833 1,088 211 8,532 9,411 (51,862) 1,759
---------- --------- --------- --------- --------- ------- -------
Total allotments,
contributions and
transfers 62,674 (1,506) 1,406 101,850 5,467 20,580 11,360
Investment Income:
Allocated share of Master
Trust investment
activities (Note 3) 636,126 48,587 557 55,782 29,744 -- 25,182
---------- --------- --------- --------- --------- ------ --------
Total additions 698,800 47,081 1,963 157,632 35,211 20,580 36,542
---------- --------- --------- --------- --------- ------ --------
Deductions:
Administrative expenses 1,021 108 5 157 364 -- 161
Plan transfers-out 22,162 836 89 4,707 4,568 -- 689
Distributions to participants 110,518 12,631 422 13,960 40,806 -- 2,319
---------- --------- --------- --------- --------- ------ --------
Total deductions 133,701 13,575 516 18,824 45,738 -- 3,169
---------- --------- --------- --------- --------- ------ --------
Net (decrease) increase 565,099 33,506 1,447 138,808 (10,527) 20,580 33,373
Net assets available for
plan benefits:
Beginning of year-
January 1, 1997 1,272,991 136,574 5,811 165,596 456,886 108,864 28,391
---------- --------- --------- --------- --------- ------- --------
End of year - December 31, 1997
(Notes 1 and 2) $1,838,090 $ 170,080 $ 7,258 $ 304,404 $ 446,359 $129,444 $ 61,764
========== ========= ========== ========= ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------------
U.S.
U.S. Global International U.S. Bond
Balanced Balanced Equity Small Market
ASSETS: Fund Fund Fund Cap Fund Index Total
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Allotments, Contributions
and Transfers:
Employee allotments: $ 2,860 $ 3,703 $ 2,920 $ 5,527 $ 33 $ 159,099
Interfund transfers (1,542) (3,220) 313 14,433 40 --
Plan transfers-in 49 56 80 45 -- 3,004
Rollover contributions 82 77 45 109 -- 1,457
Employing company
contributions (Note 1) -- -- -- -- -- 64,199
Loans to participants (488) (640) (482) (1,100) -- --
Loan repayments 539 720 539 1,149 8 (73)
-------- -------- -------- -------- -------- -----------
Total allotments,
contributions and
transfers 1,500 696 3,415 20,163 81 227,686
Investment Income:
Allocated share of Master
Trust investment
activities (Note 3) 9,987 9,090 1,094 6,994 -- 823,143
-------- -------- -------- -------- -------- -----------
Total additions 11,487 9,786 4,509 27,157 81 1,050,829
-------- -------- -------- -------- -------- -----------
Deductions:
Administrative expenses 79 93 93 227 -- 2,308
Plan transfers-out 212 289 167 367 -- 34,086
Distributions to participants 1,237 1,107 921 1,476 -- 185,397
-------- -------- -------- -------- -------- -----------
Total deductions 1,528 1,489 1,181 2,070 -- 221,791
-------- -------- -------- -------- -------- -----------
Net (decrease) increase 9,959 8,297 3,328 25,087 81 829,038
Net assets available for
plan benefits:
Beginning of year-
January 1, 1997 13,047 13,072 11,232 16,785 -- 2,229,249
------- -------- -------- -------- -------- -----------
End of year - December 31, 1997
(Notes 1 and 2) $ 23,006 $ 21,369 $ 14,560 $ 41,872 $ 81 $ 3,058,287
======== ======== ======== ======== ======== ===========
</TABLE>
See notes to financial statements.
4
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Statement of Changes in Net Assets Available for Plan Benefits
December 31, 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
Fund Information
---------------------------------------------------------------------------------------------
NYNEX Government Diversified Interest Active
Shares Telecommunications Obligations Equity Income Loan U.S. Equity
ASSETS: Fund Fund Fund Portfolio Fund Fund Fund
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Allotments, Contributions
and Transfers
Employee allotments $53,371 $ 4,546 $ 1,081 $ 23,972 $ 46,937 $ -- $ 4,025
Interfund transfers 21,116 (32,667) (38) 32,497 (38,931) -- 9,186
Employing company
contributions (Note 1) 59,546 -- -- -- -- -- --
Loans to participants
net of transfers of
participants' balances (35,800) (862) (201) (5,762) (14,558) 59,409 (706)
Loan repayments 27,932 1,105 205 5,070 10,960 (47,932) 812
-------- -------- -------- -------- -------- ------- -------
Total allotments,
contributions and
transfers 126,165 (27,878) 1,047 55,777 4,408 11,477 13,317
Investment income:
Allocated share of Master
Trust investment
activities (Note 3) (129,676) 28,723 292 26,837 27,639 7,150 4,090
-------- -------- -------- -------- -------- ------- -------
Total additions (3,511) 845 1,339 82,614 32,047 18,627 17,407
-------- -------- -------- -------- -------- ------- -------
Deductions:
Administrative expenses 919 96 8 64 342 -- 48
Distributions to participants 77,649 9,530 323 5,057 35,622 -- 692
-------- -------- -------- -------- -------- ------- -------
Total deductions 78,568 9,626 331 5,121 35,964 -- 740
-------- -------- -------- -------- -------- ------- -------
Net (decrease) increase (82,079) (8,781) 1,008 77,493 (3,917) 18,627 16,667
Net assets available for
plan benefits:
Beginning of year-
January 1, 1996 1,355,070 145,355 4,803 88,103 460,803 90,237 11,724
---------- --------- -------- -------- -------- -------- -------
End of year - December 31,
1996 (Notes 1 and 2) $1,272,991 $ 136,574 $ 5,811 $165,596 $456,886 $108,864 $28,391
========== ========= ======== ======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
Fund Information
---------------------------------------------------------------
U.S. Global International U.S.
Balanced Balanced Equity Small
Fund Fund Fund Cap Fund Total
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions:
Allotments, Contributions
and Transfers:
Employee allotments $ 1,819 $ 2,124 $ 2,148 $ 3,220 $143,243
Interfund transfers 2,714 2,918 1,899 1,306 --
Employing company
contributions (Note 1) -- -- -- -- 59,546
Loans to participants
net of transfers of
participants' balances (267) (333) (334) (586) --
Loan repayments 353 433 421 641 --
-------- -------- -------- -------- -------
Total allotments,
contributions and
transfers 4,619 5,142 4,134 4,581 202,789
Investment income:
Allocated share of Master
Trust investment
activities (Note 3) 1,582 1,563 1,161 2,669 (27,970)
-------- -------- -------- -------- -------
Total additions 6,201 6,705 5,295 7,250 174,819
-------- -------- -------- -------- -------
Deductions:
Administrative expenses 29 32 37 99 1,674
Distributions to participants 443 479 359 507 130,661
-------- -------- -------- -------- -------
Total deductions 472 511 396 606 132,335
-------- -------- -------- -------- -------
Net (decrease) increase 5,729 6,194 4,899 6,644 42,484
Net assets available for
plan benefits:
Beginning of year-
January 1, 1996 7,318 6,878 6,333 10,141 2,186,765
------- ------- ------- ------- ----------
End of year - December 31,
1996 (Notes 1 and 2) $13,047 $13,072 $11,232 $16,785 $2,229,249
======= ======= ======= ======= ==========
</TABLE>
See notes to financial statements.
5
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements
(Dollars in Thousands)
1. Plan Description
The Plan* was established by NYNEX Corporation ("NYNEX") on January 1,
1984 to provide a convenient way for non-salaried employees to save on a
regular and long-term basis. In August 1997, NYNEX merged with Bell
Atlantic Corporation (the "merger") to form the new Bell Atlantic
Corporation ("Bell Atlantic"). However, the Plan continues to maintain its
former plan title. As of the date of the merger, the Plan's investments in
the NYNEX Shares Fund were converted into shares of Bell Atlantic common
stock within the Bell Atlantic Shares Fund. Participants are able to
invest in one or more combinations of the following funds (referred to
herein individually as a "Fund" and collectively as the "Funds"): Bell
Atlantic Shares Fund, Telecommunications Fund, Government Obligations
Fund, Diversified Equity Portfolio, Interest Income Fund, Active U.S.
Equity Fund, U.S. Balanced Fund, Global Balanced Fund, International
Equity Fund and U.S. Small Cap Fund.
Allotments and Contributions
An Eligible Employee may authorize a basic pre-tax or after-tax allotment
from 1% to 6% of such Eligible Employee's Compensation. A pre-tax or
after-tax supplementary allotment of not more than 10% of such Eligible
Employee's Compensation may be authorized by employees electing the
maximum 6% basic allotment. Employing Company matching contributions are
made based upon an amount equal to 66 2/3% of the Basic Allotment of each
Participating Employee. Such matching contributions are invested currently
only in the Bell Atlantic Shares Fund.
Contributions are subject to applicable rules set forth in the Internal
Revenue Code (the "Code") and the regulations thereunder.
Participating Employees are immediately vested in their contributions plus
actual earnings thereon. A Participating Employee shall be vested in
his/her accrued benefit derived from Employing Company contributions after
completing three years of service. Non-vested Employing Company
contributions which are forfeited are applied as a credit to reduce
subsequent contributions of the Employing Company. At December 31, 1997
and 1996, forfeited non-vested accounts were $110 and $43, respectively.
Termination Priorities
Although it has not expressed intent to do so, in the event that the Plan
is terminated by Bell Atlantic, subject to conditions set forth in the
Employee Retirement Income Security Act of 1974, as amended, the Plan
provides that the net assets shall be distributed to Participating
* This and certain other capitalized terms used but not defined herein shall
have their respective meanings as defined in the Plan Prospectus.
6
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
Employees in an amount equal to their respective vested interests in such
assets.
Fund Options
The Bell Atlantic Shares Fund invests primarily in the common stock of
Bell Atlantic.
The Telecommunications Fund's portfolio is comprised of investments in
twenty-eight North American telephone utility and telecommunications
companies each with a minimum market value of approximately $1 billion at
December 31, 1997. The Telecommunications Fund was open to new
contributions through December 31, 1997. As of January 1, 1998, the
Telecommunications Fund was closed to new contributions. Its allotments
and its earnings are reinvested in this Fund. The Fund is a market
weighted index fund and is managed by Bell Atlantic Asset Management
Company ("BAAMCO").
The Diversified Equity Portfolio invests in an equity index fund which is
managed by BAAMCO. This Fund is principally a portfolio of common stocks
that is structured and maintained with the objective of providing
investment results which approximate the overall performance of the common
stocks included in the Standard and Poors Composite Index of 500 stocks.
The Government Obligations Fund invests in a Bankers Trust Company pooled
Short Government Bond Index Fund. This Fund invests primarily in fixed
income securities of the United States Government or any agency thereof
with the objective of providing investment results which approximate the
overall performance of the securities included in the Lehman Brothers Inc.
1-3 year Government Index. The Fund is managed by Bankers Trust Company.
At the close of business on December 31, 1997, the Government Obligations
Fund ceased to exist. Participants who did not choose any other fund had
their balances transferred to the new U.S. Bond Market Index Fund (see
Note 12).
The Interest Income Fund invests primarily in a diversified portfolio of
guaranteed insurance contracts issued by insurance companies ("GICs").
Some of the assets of the Fund are also invested in pools of asset-backed
securities, corporate bonds, and obligations of the United States
Government and its agencies ("Synthetic Guaranteed Investment Contract").
As an integral part of the purchase of each pool of these investments, a
financial institution agrees to protect the pool, via a wrapper contract,
to the extent its market value and/or interest return fluctuates but not
in the event of a default of any security in the pool. The Plan is exposed
to credit risk in the event of nonperformance by the entities with whom
the contracts are placed. The Plan seeks to minimize credit risk by
diversifying among a group of GIC issuers and other financial institutions
which meet certain investment criteria established by BAAMCO. These
contracts guarantee (i) a fixed rate of interest for a fixed period of
time or (ii) a fixed rate of interest for a fixed or indefinite period of
time combined with the right to participate in income
7
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
earned above such fixed rate. Such interest is not guaranteed by any of
the Employing Companies. The Fund is managed by BAAMCO. (For further
discussion of this Fund see Note 2.)
In addition to the Diversified Equity Portfolio, each of the following
five Funds invests in the assets of the unitized investment advisor
account(s) of the NYNEX Master Trust ("Master Trust"), as designated by
BAAMCO.
The U.S. Balanced Fund invests in stocks and bonds of U.S. corporations in
a variety of industries. This Fund has invested approximately 60 percent
in stocks with most of the remainder in bonds. As of December 31, 1997,
BAAMCO had selected the following unitized investment advisor account(s)
of the Master Trust ("Master Trust pooled accounts") for the Fund: Barrow,
Hanley, Mewhinney & Strauss, Inc., Fidelity Management Trust Company,
Franklin Portfolio Associates, Inc., Gardner Lewis Asset Management, L.P.,
Miller, Anderson & Sherrerd, LLP, Palisade Capital Management, L.L.C.,
Standish Ayer & Wood, Inc., State Street Research and Management Company,
Trinity Investment Management Corporation, Western Asset Management
Company and Wilshire Associates Incorporated.
The Global Balanced Fund primarily invests in a diversified array of
international capital market stocks and bonds. The Fund has investments in
a variety of developed countries in Europe and the Pacific. The Fund has
invested approximately 65 percent in stocks with most of the remainder in
bonds. The portfolio holdings may include both large and small
capitalization stocks. As of December 31, 1997, BAAMCO had selected the
following Master Trust pooled accounts for the Fund: Barrow, Hanley,
Mewhinney & Strauss, Inc., Capital Guardian Trust Company, Fidelity
Management Trust Company, Franklin Portfolio Associates, Inc., Gardner
Lewis Asset Management, L.P., Miller, Anderson & Sherrerd, LLP, Morgan
Stanley International, Palisade Capital Management, L.L.C., Standish Ayer
& Wood, Inc., State Street Global Advisors, State Street Research and
Management Company, Trinity Investment Management Corporation, Western
Asset Management Company, Wilshire Associates Incorporated and WorldInvest
Limited.
The Active U.S. Equity Fund invests primarily in domestic common stocks.
As of December 31, 1997, BAAMCO had selected the following Master Trust
pooled accounts for the Fund: Barrow, Hanley, Mewhinney & Strauss, Inc.,
Fidelity Management Trust Company, Franklin Portfolio Associates, Inc.,
Gardner Lewis Asset Management, L.P., Miller, Anderson & Sherrerd, LLP,
Palisade Capital Management, L.L.C., Trinity Investment Management
Corporation and Wilshire Associates Incorporated.
8
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
The International Equity Fund invests in twenty international equity
markets of developed countries in Europe and the Pacific; it has
investments in many industries. The portfolio holdings may include both
large and small capitalization stocks. As of December 31, 1997, BAAMCO had
selected Capital Guardian Trust Company, Morgan Stanley International and
State Street Global Advisors as the Master Trust pooled accounts for the
Fund.
The U.S. Small Cap Fund invests in the domestic stocks of smaller-sized
companies, generally with market capitalization under $1 billion at the
time of purchase. As of December 31, 1997, BAAMCO had selected the
following Master Trust pooled accounts for the Fund: Columbus Circle
Investors, Gardner Lewis Asset Management, L.P., Investment Counselors of
Maryland, Inc., and the Boston Company Asset Management, Inc.
Pursuant to the Plan, loans were initially made available to certain
Participating Employees effective January 1, 1989. The amount that a
Participating Employee may borrow is limited by certain factors, including
the Employee's vested interest in the respective Employee's pre-tax
account. Generally, the amount can be no less than one thousand dollars
and no greater than fifty thousand dollars. An Employee may not have more
than two loans outstanding. Except under certain circumstances, the loans
provide for periodic repayments over a period not to exceed five years, at
an interest rate determined under the Plan. Effective September 1, 1993,
Participating Employees also may prepay the entire loan at any time, after
the first of the month following the loan's effective date. Loans are
collateralized by the Participating Employee's vested account and are
recorded in the Loan Fund. In the event of a default, all of the
Participating Employee's contributions to the Plan shall be suspended. In
addition, the Employees' Benefit Committee (the "Committee") shall cause
the amount of unpaid debt to be deducted from any interest in, or payment
or distribution from, the Employee's account, subject to certain
limitations. If the amount of such interest, payment or distribution is
not sufficient to repay the unpaid balance of said debt, the Committee may
exercise the Plan's right, if any, to any non-Plan assets and to the
extent a loan balance remains, take whatever collection action, including
suit, the Committee determines necessary.
All of the assets of the Plan are included in the Master Trust (see Note
2) for which Mellon Bank, N.A. was the trustee of all Master Trust Assets
and Wellspring Resources, LLC was the recordkeeper for the Plan.
For a complete description of the Plan, participants should refer to the
Plan Document.
9
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
2. Accounting Policies
Investments
The NYNEX Master Pension Trust was established on January 1, 1984, and
through December 31, 1994, it served as the vehicle for the investment of
the assets of two defined benefit pension plans of NYNEX, the NYNEX
Pension Plan and the NYNEX Management Pension Plan. Effective January 1,
1995, the NYNEX Master Pension Trust was renamed the NYNEX Master Trust
and amended to incorporate, in addition to the assets of such defined
benefit pension plans, the following: (1) as of January 1, 1995, certain
of the assets of the Plan and the NYNEX Corporation Savings Plan for
Salaried Employees (the "Salaried Plan") and (2) as of January 1, 1996,
all of the assets of the Plan and the Salaried Plan, except for assets of
the Employee Stock Ownership Plan-unallocated account which are included
in a separate account within the Master Trust.
Value of Investments Held In the Master Trust (see Note 3)
The Trustee values the investments in the Master Trust as follows:
Investments in securities traded on national and foreign securities
exchanges are valued by the Trustee at the last reported sale prices on
the last business day of the year or, if no sales were reported on that
date, at the last reported bid prices. Over-the-counter securities and
government obligations are valued at the bid prices or the average of the
bid and asked prices on the last business day of the year from published
sources where available or, if not available, from other sources
considered reliable, generally broker quotes.
The value of each contract with an insurance company or other financial
institution included in the Interest Income Fund is reported at contract
value in the Statements of Net Assets Available for Plan Benefits based
upon the principal then invested in by the Fund plus the interest then
accrued on such principal, which approximates the fair value. In
accordance with Statement of Position 94-4 "Reporting of Investment
Contracts Held by Health and Welfare Benefit Plans and Defined
Contribution Pension Plans" and in connection with fully
benefit-responsive investment contracts, the following information is
presented:
(i) The asset weighted crediting interest rate yielded a return of 6.4%
and 6.7% for the years ended December 31, 1997 and 1996.
(ii) The crediting interest rates ranged from 4.4% to 8.2% at December
31, 1997 and 1996.
10
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
(iii) The fair value, as determined either by discounting future cash
flows of the underlying investments, at December 31, 1997 and 1996,
respectively was $407,263 and $422,122.
Forward currency contracts are accounted for as contractual commitments on
a trade-date basis and are carried at fair value derived by the Trustee at
the exchange rate prevailing on the last business day of the year. Index
futures contracts are recorded as contractual commitments on a trade-date
basis and are carried at fair value based on the closing index futures
price prevailing on the last business day of the year. Both exchange rates
and index futures prices are readily available from published sources.
Temporary cash investments are stated at redemption value which
approximates fair value.
Purchases and Sales of Investments
Purchases and sales of investments are reflected as of the trade date.
Realized gains and losses on sales of investments are determined on the
basis of average cost.
Investment Income
Dividend income is recorded on the ex-dividend date. Interest earned on
investments is recorded on the accrual basis.
Net Appreciation (Depreciation) of Investments
The Statements of Changes in Net Assets Available for Plan Benefits
reflects the net appreciation (depreciation) in the fair value of the
Plan's investments, which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Distributions
Distributions elected to be withdrawn from the Plan by participants are
recorded when paid.
Plan Expenses
The Plan pays certain administrative fees out of Fund assets held in the
Master Trust and out of interest income earned from the Plan's
disbursement account, as held by the Trustee, in accordance with Plan
provisions and to the extent permitted by law. Any fees not paid by the
Plan are paid by Bell Atlantic.
Bell Atlantic's Use of Estimates
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires Bell Atlantic, as Plan
administrator, to make significant estimates and assumptions that affect
the reported amounts of net assets available for benefits at the date of
the financial statements and the changes in net assets available for plan
benefits
11
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
during the reporting period and, when applicable, the disclosure of
contingent assets and liabilities at the date of the financial statements.
Actual results could differ from those estimates.
Risks and Uncertainties
The Plan provides for various participant investment options in any
combination of funds which can invest in any combination of stocks, bonds,
fixed income securities, mutual funds, and other investment securities.
Investment securities are exposed to various risks, such as interest rate,
market, and credit risks. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in
the values of investment securities will occur in the near term and that
such changes could materially affect participants' account balances and
the amounts reported in the Statements of Net Assets Available for Plan
Benefits.
3. Investments
The following table reflects the investments that represent 5% or more of
the net assets in the Master Trust as of December 31, 1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Bell Atlantic Corporation common shares $2,761,266 $ --
NYNEX Corporation common shares $ -- $2,220,164
</TABLE>
Investment in Master Trust
All of the investment assets in the Master Trust are managed by BAAMCO or
external investment advisors. The assets in the Master Trust are either
(a) pooled between the defined benefit plans, the Salaried Plan and the
Plan ($11,845,864 and $8,407,361 at December 31, 1997 and 1996,
respectively, see below), or (b) net assets that are specific to the
defined benefit plans, or (c) net assets specific to the Salaried Plan and
the Plan. The total fair value of the Master Trust at December 31, 1997
and 1996 is $25,909,191 (of which net assets totaling $9,159,139 are
specific to the defined benefit pension plans, item (b) above, for which
separate financial statements are prepared) and $22,282,741, respectively.
Investments Held in Pooled Accounts:
The pooled investments are unitized, aggregated and reported by the Master
Trust with a carrying value of $11,845,864 and $8,107,361 at December 31,
1997 and 1996, respectively, and with investment earnings of $2,070,271
and $1,253,840 for the years ended December 31, 1997 and 1996
respectively. Given that the pooled accounts include interests of the
Plan, the Salaried Plan and the defined benefit plans, the totals in each
respective statement do not equal the carrying value or net investment
income of/from the Master Trust pooled accounts in this
12
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
Salaried Plan and the defined benefit plans, the totals in each respective
statement do not equal the carrying value or net investment income of/from
the Master Trust pooled accounts in this accompanying footnote.
The total investments held in the Master Trust pooled accounts at December
31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Fair Value (Note 2)
-------------------
Description 1997 1996
----------- ------------ ----------
<S> <C> <C>
Cash - non interest bearing $ -- $ 57
Receivables 721,643 512,740
Common Stock 9,313,917 6,342,696
Bell Atlantic Corporation common shares 101,036 --
NYNEX Corporation common shares -- 25,577
Preferred Stock 79,863 56,156
U.S. Government Securities 892,987 680,805
Corporate Debt - preferred and other 832,741 429,302
Real estate 278 65
Temporary cash investments 391,265 346,004
Other investments* 277,734 259,666
------------ ----------
12,611,464 8,653,068
Liabilities 765,600 545,707
------------ ----------
Total pooled net assets in the Master Trust $ 11,845,864 $8,107,361
============ ==========
</TABLE>
*Other investments include foreign investments, principally foreign government
debt.
The Plan's interests in the Master Trust pooled accounts carrying value
and investment income of the Master Trust pooled accounts are reported in
each respective Fund Option as the "Allocated share of Master Trust net
assets" in 1997 and 1996, respectively, in the Statement of Net Assets
Available for Plan Benefits and "Allocated share of Master Trust
investment activities" in the Statements of Changes in Net Assets
Available for Plan Benefits for the year ended December 31, 1997 and 1996,
respectively.
Investments in the Master Trust are allocated to the Plan's Fund Options
in accordance with their respective percentages of interest.
13
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
The proportionate interests of the Plan's Fund Options in the carrying
value of the Master Trust pooled accounts at December 31, 1997 and 1996
are as follows:
<TABLE>
<CAPTION>
Carrying Carrying
Value Value
1997 1997 1996 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Active U.S. Equity Fund $ 61,764 0.5214% $ 28,391 0.3502%
U.S. Balanced Fund 23,006 0.1942% 13,047 0.1609%
Global Balanced Fund 21,369 0.1804% 13,072 0.1612%
International Equity Fund 14,560 0.1229% 11,232 0.1385%
U.S. Small Cap Fund 41,872 0.3535% 16,785 0.2070%
Diversified Equity Portfolio 304,404 2.5697% 165,596 2.0425%
------- -------
Total $466,975 $ 248,123
======== =========
</TABLE>
Investments Held in Specific Accounts for the Plan and the Salaried Plan:
Effective January 1, 1996, all of the assets of the Plan and the Salaried
Plan were transferred into the Master Trust. As such, the net assets
specific to these plans are the Bell Atlantic Shares Fund,
Telecommunications Fund, Government Obligations Fund, Interest Income
Fund, Loan Fund and the Employee Stock Ownership Plan allocated account.
The investments held in the Master Trust specific accounts for the Plan
and the Salaried Plan at December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Fair Value (Note 2)
-------------------
Description 1997 1996
----------- ------------ ----------
<S> <C> <C>
Cash - non interest bearing $ -- $ 40
Receivables 231,946 226,323
Common Stock 307,288 272,663
Bell Atlantic Corporation common shares 2,660,230 --
NYNEX Corporation common shares -- 2,194,587
Temporary cash investments 599,054 120,880
Fixed income obligations - insurance contract 1,105,670 1,104,453
Fixed income corporate obligations 118,112 --
Other investments -- 121,035
--------- ---------
Total net assets in the specific accounts in the
Master Trust $5,022,300 $4,039,981
========== ==========
</TABLE>
14
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
Investments are allocated to the Plan's Fund Options in accordance with
their respective percentages of interest. The proportionate interests of
the Plan and the Salaried Plan in the carrying value of the Master Trust
specific accounts at December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Carrying Carrying
Value Value
Plan Plan Salaried Plan Salaried Plan
---------- ------- ------------- -------------
<S> <C> <C> <C> <C>
Bell Atlantic Shares Fund $1,838,090 69.4374% $ 809,030 30.5626%
Telecommunications Fund 170,080 47.7572% 186,055 52.2428%
Government Obligations Fund 7,258 6.1471% 110,813 93.8529%
Interest Income Fund 446,359 36.3382% 781,986 63.6618%
Loan Fund 129,444 60.0377% 86,162 39.9623%
Employee Stock Ownership Plan -- -- 461,438 100.0000%
---------- -----------
Total $2,591,231 $ 2,435,484
========== ===========
</TABLE>
Investment Income
Investment income and expenses are allocated to the Plan's Fund Options
daily in accordance with their respective daily percentages of interest in
the Master Trust's pooled accounts. Percentages of interest are based on
the daily ratio of units owned by each Plan's Fund Options to the total
units in the Master Trust pooled accounts. Investment income related to
investments held in specific accounts for the Plan and the Salaried Plan
is allocated to the Plan's Fund Options daily in accordance with each
Plan's respective percentage of interest. The allocated net investment
income to the Plan's Fund Options for the years ended December 31, 1997
and 1996 is as follows:
<TABLE>
<CAPTION>
Dividends
on Bell
Atlantic Other
Corporation Net income/ Net
common Other appreciation expenses- Investment
Interest shares Dividends (depreciation) net Income
-------- ------ --------- -------------- --- ------
December 31, 1997:
- ------------------
<S> <C> <C> <C> <C> <C> <C>
Bell Atlantic Shares Fund $ 5,111 $ 61,823 $ -- $ 569,192 $ -- $636,126
Telecommunications Fund 236 -- 3,806 44,545 -- 48,587
Government Obligations Fund 34 -- -- 523 -- 557
Diversified Equity Portfolio 1,623 -- 4,210 49,946 3 55,782
Interest Income Fund 29,744 -- -- -- -- 29,744
Loan Fund -- -- -- -- -- --
Active U.S. Equity Fund 328 -- 1,689 23,151 14 25,182
U.S. Balanced Fund 544 -- 653 8,780 10 9,987
Global Balanced Fund 461 -- 652 7,972 5 9,090
International Equity Fund 111 -- 283 713 (13) 1,094
U.S. Small Cap Fund 280 -- 177 6,537 -- 6,994
--------- ---------- ---------- ---------- --------- --------
Total $ 38,472 $ 61,823 $ 11,470 $ 711,359 $ 19 $823,143
========= ========== ========== ========== ========= ========
</TABLE>
15
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
<TABLE>
<CAPTION>
Dividends
on NYNEX Other
Corporation Net income/ Net
common Other appreciation expenses- Investment
Interest shares Dividends (depreciation) net Income
-------- ------ --------- -------------- --- ------
December 31, 1996:
- ------------------
<S> <C> <C> <C> <C> <C> <C>
NYNEX Shares Fund $ 38 $ 60,403 $ -- $ (190,117) $ -- $ (129,676)
Telecommunications Fund -- -- 4,342 24,381 -- 28,723
Government Obligations Fund -- -- -- 292 -- 292
Diversified Equity Portfolio 738 -- 2,262 23,843 (6) 26,837
Interest Income Fund 30,686 -- -- (3,047) -- 27,639
Loan Fund 7,150 -- -- -- -- 7,150
Active U.S. Equity Fund 11 -- 406 3,673 -- 4,090
U.S. Balanced Fund 248 -- 131 1,204 (1) 1,582
Global Balanced Fund 182 -- 141 1,243 (3) 1,563
International Equity Fund 14 -- 170 995 (18) 1,161
U.S. Small Cap Fund 56 -- 107 2,506 -- 2,669
---------- -------- --------- ------------ --------- ----------
Total $ 39,123 $ 60,403 $ 7,559 $ (135,027) $ (28) $ (27,970)
========== ======== ========= ============ ========= ==========
</TABLE>
4. Derivative Financial Instruments
Derivative financial instruments are used by the Master Trust's pooled
accounts primarily to rebalance fixed income/equity allocations, to
efficiently gain exposure to a specific underlying market, and to offset
the currency risk associated with foreign investments. Leveraging of the
Plan's assets and speculation are prohibited as stated in the Plan
documents. Offsetting currency positions are not permitted to exceed the
level of exposure in the Plan's foreign asset base. The derivatives most
commonly used by investment managers are highly-liquid, exchange-traded
equity and fixed income futures and over-the-counter foreign exchange
forward contracts.
Bell Atlantic's use of financial instruments for risk management purposes
is represented by notional amounts. These notional values represent solely
contractual amounts that serve as the basis or reference amounts upon
which contractually stipulated calculations are based. Therefore, these
amounts are intended to serve as general volume indicators only and do not
represent the potential gain or loss from market or credit risks.
Market risk arises from the potential for changes in the value of
financial instruments resulting from fluctuations in interest rates,
foreign exchange rates and prices of equity securities. Market risk is
also affected by changes in volatility and liquidity in the markets in
which these instruments are traded.
16
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
Equity price risk arises from the possibility that equity prices will
fluctuate, affecting the value of equity securities and derivative
financial instruments that derive their value from a stock index, a
particular stock or a defined basket of stocks.
The credit risk and amount of accounting loss of the Plan's forward
contracts is equal to any gains which have not yet settled as of the
Plan's year end. The credit exposure of the Plan's futures contracts is
equal to the posted margin plus any unsettled positive variation margin.
The amount of accounting loss at year end is equal to any variation margin
owed to the Plan.
All derivative activity relating to the Plan is within the Master Trust
pooled accounts. The Master Trust pooled accounts' derivative activity is
allocated to the Plan in accordance with the Plan's Fund Options'
respective percentages of interest (see Note 3). The following disclosures
regarding the notional values, fair values, average fair values and net
trading gains are reported per the Plan.
The notional values and fair values of the derivative activity used for
trading purposes held by the Plan at December 31, are as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
Domestic Equity Futures Contracts:
<S> <C> <C>
Notional Values $873 $392
Fair Values 881 395
Fixed Income Futures Contracts:
Notional Values 29 88
Fair Values 29 88
Forward Foreign Currency Payable Contracts:
Notional Values 180 179
Fair Values 172 175
Forward Foreign Currency Receivable Contracts:
Notional Values 180 180
Fair Values 179 178
</TABLE>
The average fair values of the derivative activity used for trading
purposes held by the Plan during the year ended December 31, are as
follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
Average Fair Values:
<S> <C> <C>
Domestic Equity Futures Contracts $627 $3,268
Fixed Income Futures Contracts 39 83
Forward Foreign Currency Payable Contracts 142 223
Forward Foreign Currency Receivable Contracts 147 222
</TABLE>
17
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
The Plan was allocated $4,366 and $567 in 1997 and 1996, respectively, of
net trading gains from futures contracts. Net trading gains allocated to
the Plan from foreign exchange contracts totalled $16 in 1997 and $43 in
1996.
5. Number and Value of Units
The interest of an employee in each Fund of the Plan, with the exception
of the Loan Fund, is represented by units as described in Section 8 of the
Plan. A Participant's unit value is determined daily by dividing each
Fund's adjusted net assets, as defined in the Plan, by the number of
outstanding units. The number and value of units at each month end, which
are all unaudited except at December 31, 1997 and 1996, carried to the
fourth decimal place, were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------------------------------------------------
1997 1996
----------------------------- -----------------------------
Number Value Number Value
of Units per Unit of Units per Unit
-------- -------- --------- --------
<S> <C> <C> <C> <C>
Bell Atlantic Shares Fund 185,487,680 $9.9095 -- $ --
NYNEX Shares Fund -- -- 194,616,319 6.5410
Telecommunications Fund 17,275,998 9.8449 19,295,394 7.0781
Government Obligations Fund 4,859,806 1.4935 4,217,893 1.3777
Diversified Equity Portfolio 102,711,664 2.9637 74,986,293 2.2084
Interest Income Fund 79,291,647 5.6293 86,793,347 5.2641
Active U.S. Equity Fund 27,790,092 2.2225 16,971,200 1.6729
U.S. Balanced Fund 12,508,651 1.8392 8,764,221 1.4888
Global Balanced Fund 11,933,035 1.7907 8,892,181 1.4699
International Equity Fund 10,800,729 1.3481 9,157,688 1.2265
U.S. Small Cap Fund 21,706,927 1.9290 10,879,083 1.5428
</TABLE>
18
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements
(Dollars in Thousands)
<TABLE>
<CAPTION>
Bell Atlantic Telecommunications Government
Shares Fund Fund Obligations Fund
------------------------------ ---------------------------- ----------------------------
Number Value Number Value Number Value
1997 of Units per Unit of Units per Unit of Units per Unit
- -------------- --------------- -------------- -------------- ------------ -------------- ------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
January 193,316,799 $6.9545 18,714,363 $7.2901 4,164,326 $1.3759
February 192,097,426 7.0713 18,407,189 7.5229 4,062,908 1.3790
March 192,865,736 6.2664 18,181,496 6.9398 4,023,289 1.3781
April 193,014,609 7.1842 17,874,194 7.1765 4,095,803 1.3896
May 190,825,332 7.4589 17,277,087 7.6233 4,139,338 1.3987
June 187,946,741 7.9935 16,930,658 7.8898 4,235,111 1.4086
July 188,811,321 7.7722 16,748,341 8.0654 4,053,334 1.4242
August 187,883,370 7.7915 16,494,262 7.6879 4,195,098 1.4250
September 186,808,660 8.6557 16,261,084 8.4170 4,585,337 1.4362
October 187,274,131 8.6773 16,203,583 8.5624 4,957,090 1.4470
November 185,889,564 9.6894 16,142,921 9.6166 5,514,959 1.4501
</TABLE>
<TABLE>
<CAPTION>
Diversified Equity Active U.S.
Portfolio Interest Income Fund Equity Fund
---------------------------- ---------------------------- ----------------------------
Number Value Number Value Number Value
1997 of Units per Unit of Units per Unit of Units per Unit
- -------------- --------------- ------------ -------------- ------------- -------------- -------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
January 78,663,415 $2.3329 86,051,338 $5.2895 18,806,995 $1.7467
February 82,996,436 2.3520 85,002,422 5.3166 20,273,441 1.7529
March 83,320,081 2.2605 84,615,269 5.3439 20,506,334 1.6712
April 84,282,138 2.3953 84,869,171 5.3707 20,888,639 1.7418
May 90,206,445 2.5407 84,827,311 5.3972 21,984,771 1.8541
June 94,491,104 2.6567 84,886,924 5.4263 23,392,556 1.9298
July 97,240,864 2.8634 82,567,725 5.4540 24,082,607 2.0819
August 100,343,425 2.7031 81,190,665 5.4810 25,429,395 2.0279
September 101,846,126 2.8510 80,668,448 5.5114 26,387,083 2.1507
October 101,524,966 2.7561 80,680,013 5.5394 26,967,249 2.0792
November 102,252,778 2.8827 81,042,297 5.5666 27,456,476 2.1464
</TABLE>
<TABLE>
<CAPTION>
Global Balanced International U.S. Small
U.S. Balanced Fund Fund Equity Fund Cap Fund
----------------------- ------------------------ ---------------------- ----------------------
Number Value Number Value Number Value Number Value
1997 of Units per Unit of Units per Unit of Units per Unit of Units per Unit
- ------------ --------- -------- --------- -------- --------- -------- ---------- --------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January 9,144,099 $1.5307 9,349,919 $1.5057 9,414,433 $1.2166 12,266,461 $1.5774
February 9,615,733 1.5374 9,772,820 1.5156 9,782,879 1.2421 13,779,862 1.5332
March 9,698,815 1.4819 9,993,805 1.4675 9,935,716 1.2491 13,772,808 1.4778
April 9,738,575 1.5308 10,310,847 1.5100 10,200,333 1.2549 14,061,993 1.4742
May 10,355,211 1.5976 10,792,330 1.5848 10,677,173 1.3350 14,457,598 1.6334
June 10,926,331 1.6432 11,248,999 1.6362 11,414,671 1.4041 15,362,521 1.7353
July 11,277,551 1.7454 11,418,735 1.7263 11,647,217 1.4357 15,913,572 1.8352
August 11,459,884 1.7134 11,744,129 1.6908 11,882,782 1.3556 17,354,715 1.8844
September 11,751,645 1.7888 12,034,613 1.7717 11,704,183 1.4351 20,007,273 2.0249
October 11,698,075 1.7569 11,984,727 1.7264 11,453,262 1.3504 20,659,375 1.9347
November 11,947,203 1.8008 11,910,617 1.7555 11,249,472 1.3249 21,652,255 1.9186
</TABLE>
19
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements
(Dollars in Thousands)
6. Federal Income Taxes
The Internal Revenue Service has determined and informed Bell Atlantic
(formerly NYNEX) by a letter dated September 25, 1995, that the Plan, as
submitted, is qualified and the Master Trust established under the Plan is
tax-exempt, under the appropriate sections of the Internal Revenue Code
(the "Code"). The Plan has been amended since receiving the determination
letter. However, the Plan administrator and the Plan's tax counsel believe
that the Plan is currently designed and being operated in compliance with
the applicable requirements of the Code. Therefore, they believe that the
Plan was qualified and the related Master Trust was tax-exempt as of the
date of the financial statements.
7. Related Party Transactions
BAAMCO, a wholly owned subsidiary of Bell Atlantic, is the investment
advisor for the Telecommunications Fund, Diversified Equity Portfolio and
the Interest Income Fund and therefore qualifies as a party-in-interest.
BAAMCO received no compensation from the Plan for the investment advisory
services rendered to the Plan.
8. Concentrations of Credit Risk
Financial instruments which potentially subject the Plan to concentrations
of credit risk consist principally of investment contracts with insurance
companies and other financial institutions.
The Plan places its investment contracts with high-credit quality
insurance companies and financial institutions in order to limit credit
exposure.
20
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
9. Reconciliation of Financial Statements in Form 11-K to Form 5500
The Department of Labor requires that amounts allocated to accounts of
persons who have elected to withdraw from the Plan but have not yet been
paid be reported as liabilities on the Plan's Form 5500. In accordance
with the relevant American Institute of Certified Public Accountants audit
and accounting guide, benefit amounts should not be accrued as liabilities
of the Plan. The following is a reconciliation of distributions to
participants and net assets available for Plan benefits in the financial
statements to the amounts reported in Form 5500.
<TABLE>
<CAPTION>
1997 1996
----- -----
<S> <C> <C>
Aggregate distributions to participants as presented in the
Statement of Changes in Net Assets Available for Plan Benefits $ 185,397 $ 130,661
Add: Current year benefits claims payable presented in the
Statement of Net Assets Available for Plan Benefits in Form
5500 (see Note 2) 2,644 2,031
Less: Prior year benefits claims payable presented in the
Statement of Net Assets Available for Plan Benefits in Form
5500 (see Note 2) 2,031 428
---------- ----------
Benefit payments and payments to provide benefits directly to
Participants and beneficiaries presented in the Statement of
Changes in Net Assets Available for Plan Benefits in Form 5500 $ 186,010 $ 132,264
========== ==========
Net assets available for Plan benefits presented in the Statement
of Net Assets Available for Plan Benefits $3,058,287 $2,229,249
Less: Benefits claims payable presented in the Statement of Net
Assets Available for Plan Benefits in Form 5500 (see Note 2) 2,644 2,031
---------- ----------
Net assets available for Plan benefits presented in the Statement
of Net Assets Available for Plan Benefits in Form 5500 $3,055,643 $2,227,218
========== ==========
</TABLE>
21
<PAGE>
NYNEX CORPORATION SAVINGS and SECURITY PLAN
(NON-SALARIED EMPLOYEES)
Notes to Financial Statements, Continued
(Dollars in Thousands)
10. Subsequent Events:
Change of Fund Options
Effective January 1, 1998, the Telecommunications Fund was no longer open
to new investments. Participants who did not elect a new investment
direction had their contributions automatically directed to the Passive
U.S. Equity Index Fund. Also effective January 1, 1998 transfers of
participant existing balances into the Telecommunications Fund were
prohibited. Dividends, including stock dividends of the Telecommunications
Fund, will be reinvested in the fund. Participants will be allowed to move
money out of the fund at any time.
Effective January 1, 1998, the Government Obligations Fund was no longer
offered as a fund selection. Any balances in the fund were automatically
transferred to the U.S. Bond Market Index Fund along with any investment
directions designated to the Government Obligations Fund. To accomplish
this automatic transfer, some of the Government Obligation Fund's assets
may be held in shorter maturity government instruments beginning in
December 1997.
Also beginning in 1998, three new fund options were offered to
participants:
o Government Money Market Fund, managed by Bankers Trust Company
o U.S. Bond Market Index Fund, managed by Barclays Global Investors, N.A.
o Passive International Equity Index Fund, managed by Barclays Global
Investors, N.A.
22
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Bell
Atlantic Corporate Employees' Benefits Committee has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
NYNEX Corporation Savings and Security Plan
(Non-Salaried Employees)
By: /s/ D.J. Sacco
-----------------------------------------
(D.J. Sacco, Chairman, Bell Atlantic
Corporate Employees' Benefits Committee)
Date: June 24, 1998
23
