<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 22, 1999
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 an exhibit is the press release and financial tables issued by Bell
Atlantic Corporation on April 22, 1999 announcing earnings for the first quarter
of 1999 and contained in its Investor Relations Bulletin.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits.
99 Press Release and financial tables, dated April 22, 1999, issued by Bell
Atlantic Corporation and contained in its Investor Relations Bulletin.
<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/ Doreen A. Toben
----------------------------------
Doreen A. Toben
Vice President - Controller
Date: April 23, 1999
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
99 Press Release and financial tables, dated April 22, 1999,
issued by Bell Atlantic Corporation and contained in its
Investor Relations Bulletin.
<PAGE>
EXHIBIT 99
NEWS RELEASE [LOGO OF BELL ATLANTIC APPEARS HERE]
FOR IMMEDIATE RELEASE Contact:
April 22, 1999 David Frail
212 395-7726
[email protected]
Jim Crosson
212 395-2285
[email protected]
Bell Atlantic Posts Double-Digit
Earnings Growth in First Quarter 1999
Telecom, Data, Wireless Volumes
Drive 10.6% Adjusted EPS Increase
NEW YORK - Bell Atlantic (NYSE:BEL) today announced adjusted first quarter
earnings per diluted share of 73 cents, an increase of 10.6 percent over 66
cents per share in first quarter 1998. First-quarter adjusted net income
available to common shareowners rose 10.5 percent to $1.2 billion from $1.0
billion in first quarter 1998.
Consolidated revenues increased 4.1 percent to $8.0 billion compared to
first quarter 1998. Including Bell Atlantic's share of revenues from its
unconsolidated wireless investments, quarterly revenues rose 6.2 percent to
$8.3 billion.
Adjustments and reported results are described below.
"Our first quarter results are a solid start toward our 1999 goal of
delivering a fifth consecutive year of double-digit earnings growth while
continuing our aggressive investment in the new businesses that will transform
our growth profile," said Bell Atlantic Chairman and CEO Ivan Seidenberg.
"Demand for basic telephone services continues to be robust at the same
time that demand for data services, as well as value-added voice services, is
exploding. Data and data-
--more--
<PAGE>
Bell Atlantic News Release, page 2
related sales increased in all markets, and we sold more than 11 million new
value-added features through our `Save Like Wild' campaign -- some 2.5 million
more than in first quarter 1998. We also introduced several new services, such
as Business Link volume-discount calling packages for small businesses and
National 411 directory assistance. We'll look for the marketing momentum we
built in this quarter to carry over and strengthen top-line Domestic Telecom
growth throughout 1999.
"Our Global Wireless Group continues to soar. The economies of digital
wireless are transforming the industry, and Bell Atlantic Mobile's
SingleRate(sm) price plans are advancing Bell Atlantic as a national wireless
provider. In fact, customers worldwide are recognizing the superior quality and
value of the digital services provided not only by Bell Atlantic Mobile, but by
PrimeCo Personal Communications, Omnitel Pronto Italia and our other
international investments as well.
"At the same time, we are on track with our major strategic initiatives.
We're taking the final steps at the state level before we file our New York long
distance application with the Federal Communications Commission, and we look
forward to rounding out our product line with long distance.
"We have accelerated our rollout of ADSL (Asymmetric Digital Subscriber
Line) technology to pass some 8 million households throughout our region by the
end of this year and 16 million by the end of next year. Users of our ADSL
service, Infospeed DSL(sm) , are extremely enthusiastic about its speed and
convenience, and we will expand its availability throughout the New York and
Boston markets shortly. We're also looking forward to the summer, when America
Online will start packaging Infospeed as a premium upgrade for AOL members in
our region.
"And shareowners have begun voting on our merger with GTE. Bell Atlantic
and GTE are a great strategic fit, and our combination will create a global
player with assets, capabilities and products ready to meet the full range of
customer needs."
Reported results for the quarter reflect charges totaling one cent per
share for transition costs related to the Bell Atlantic-NYNEX merger. Reported
net income available to common shareowners was $1.1 billion, or 72 cents per
share, compared to reported first quarter 1998 net income available to common
shareowners of $891 million, or 56 cents per share. Reported
--more--
<PAGE>
Bell Atlantic New Release, page 3
results for first quarter 1998 reflect charges totaling 10 cents per share
related to merger integration and an enhanced pension offer.
In keeping with new Financial Accounting Standards Board requirements for
segment reporting, Bell Atlantic's financial statements now provide information
about each of its four operating segments: Domestic Telecom, Directory, Global
Wireless and Other Businesses. Highlights of the Domestic Telecom and Global
Wireless segments, and related adjusted and proportionate information, are
discussed below.
DOMESTIC TELECOM HIGHLIGHTS
Strong demand for communications services, particularly data and value-
added services, continued in the first quarter, with the number of access lines
in service growing 4.0 percent to 42.1 million, and the number of business
voice-grade equivalents (access lines plus data circuits) increasing 20.4
percent to 33.5 million. Total voice grade equivalents rose 12.2 percent to
nearly 60 million. Access minutes of use rose 7.0 percent.
Domestic Telecom revenue increased 2.8 percent over first quarter 1998,
with more than 75 percent of the growth coming from sales of data services.
Data revenues for the quarter, including those from high-bandwidth packet-
switched and special access services and Bell Atlantic's network integration
business, totaled $659 million, up nearly 27 percent from first quarter 1998.
The demand for digital connectivity continued to grow in all markets. In
the enterprise and general business markets:
. "DS0" circuits in service (digital, high-bandwidth and packet-switched
services as measured in 64-kilobit voice-grade equivalents) increased 35.1
percent in the first quarter compared to first quarter 1998.
. Bell Atlantic ended the quarter with 529,000 basic rate Integrated Services
Digital Network (ISDN) lines in service, up 14.3 percent from first quarter
1998, and the number of primary rate ISDN channels in service increased 58.7
percent to 884,000.
In consumer markets:
. Bell Atlantic continued its aggressive deployment of Infospeed DSL, the
company's new
--more--
<PAGE>
Bell Atlantic News Release, page 4
high-speed service for Internet access. Infospeed DSL is now available in the
Washington, D.C., Pittsburgh and Philadelphia metropolitan areas and the
Hudson River communities of New Jersey, and deployment has begun in the
Boston metropolitan area. A launch in New York City and expansion throughout
the Boston area as well as other present markets are planned for this spring.
. During the quarter, Bell Atlantic and America Online (AOL) announced a
strategic ADSL alliance. The multi-year agreement, the first of its kind in
the industry, represents the first major purchase of ADSL services, which AOL
will offer as a premium upgrade to its customers in Bell Atlantic territory.
. In February, Bell Atlantic.net was rated one of the fastest and most reliable
Internet access services in the country in a survey conducted by Inverse
Network Technology, a leading independent research service. Bell Atlantic
Internet Solutions reduced the price of its entry-level package of Bell
Atlantic.net and Infospeed DSL, making it more affordable.
. Demand for connectivity -- for home fax machines, telecommuting, phone lines
for children or the Internet -- drove the number of additional lines in
service up 16 percent over first quarter 1998, to approximately 5 million.
. Consumers took advantage of new packages combining Caller ID, Return Call,
Call Waiting, Home Voice Mail and other features during Bell Atlantic's "Save
Like Wild" promotions. The campaign resulted in more than 11 million value-
added features, with the full impact on revenues to be seen in future
quarters, since some promotions offered a month of free service.
. Caller ID revenues for the quarter increased more than 33 percent compared to
first quarter 1998, as the number of subscribers increased to 6.8 million,
for penetration of more than 25 percent. Home Voice Mail revenues rose 7.6
percent.
. Bell Atlantic's new National 411 Directory Assistance service proved to be an
immediate success, with more than two million callers using the service since
its February launch.
In network services markets:
. Special access revenues for the period rose 24 percent to $444 million for
the quarter.
. By the end of the first quarter, Bell Atlantic was providing other carriers
with approximately 725,000 resold access lines and 118,000 unbundled loops
and platforms.
Adjusted Domestic Telecom operating expenses for the quarter of $4.8 billion
increased less than one percent from first quarter 1998 levels, and cash
expenses were down one percent.
--more--
<PAGE>
Bell Atlantic News Release, page 5
GLOBAL WIRELESS HIGHLIGHTS
The Global Wireless Group's performance in the quarter was fueled by strong
subscriber growth in domestic and international markets. With 532,000
proportionate net additions, the group ended the quarter with 9.1 million
proportionate customers, 35.2 percent above first quarter 1998 levels.
International proportionate subscribers now exceed 2.2 million and comprise
nearly 25 percent of the total Global Wireless customer base.
Total proportionate revenues grew to $1.3 billion, 30.5 percent higher than
the prior-year period. Proportionate operating income increased 55 percent to
$186 million, with operating cash flow increasing more than 30.8 percent to $382
million.
Bell Atlantic Mobile's popular digital services, led by its SingleRate(sm)
price plans, produced another strong quarterly subscriber increase. BAM added
190,000 customers, 49.6 percent more than in first quarter 1998, and ended the
quarter with 6.4 million customers, an increase of 16.6 percent.
Domestic highlights:
. BAM's total revenue increased a strong 15.5 percent over first quarter 1998
to $908 million, with total revenue per subscriber of $48.
. Even while gross customer additions increased 40 percent over the prior-year
period, BAM increased operating cash flow by 8.3 percent and maintained
margins at 41 percent by continuing its control of acquisition costs and cash
expenses. As a result, operating income grew to $172 million.
. Digital subscribers, who comprised more than 21 percent of BAM's customer
base at the end of the quarter, now account for more than 50 percent of busy-
hour usage on the company's network.
. During the quarter, Bell Atlantic Mobile expanded its distribution agreement
with Radio Shack, adding 174 stores in the Philadelphia area to the retail
chain's 518 outlets in New England and New York already selling BAM services.
. PrimeCo Personal Communications passed the one million-subscriber milestone
in the quarter, less than two-and-a-half years after launching commercial
service, and ended the quarter with 1.1 million customers. The quarterly net
customer additions of 203,000 were the highest in PrimeCo history.
--more--
<PAGE>
Bell Atlantic News Release, page 6
. PrimeCo's penetration of covered POPs was 2.7 percent, nearly double the
first quarter 1998 results.
. Total PrimeCo revenues for the quarter grew nearly 80 percent over first
quarter 1998 to $188 million. Average monthly revenue per subscriber in the
quarter was $52, and operating cash flow for the quarter improved 40 percent
over first quarter 1998.
Bell Atlantic's international wireless investments ended the quarter with
2.2 million proportionate subscribers, more than double the number in first
quarter 1998. International proportionate net subscriber additions for the
quarter totaled 248,000, 17.5 percent higher than in the prior-year period.
International proportionate revenues for the quarter were $280 million, a
gain of 95.8 percent. Operating cash flow from international investments
increased 127.5 percent over first quarter 1998 to $91 million, with
proportionate operating income growing by $33 million to $51 million.
International highlights:
. Omnitel Pronto Italia, Bell Atlantic's Italian wireless investment, added
800,000 subscribers in the first quarter, reaching a total of 7 million, to
become Europe's second largest wireless carrier. Over the past 12 months
Omnitel has reduced its long distance rates by 75 percent, making the cost of
international calls on its networks competitive with local landline carriers.
. Grupo Iusacell in Mexico posted strong results, ending the quarter with more
than 840,000 subscribers, a 75 percent increase over first quarter 1998.
Grupo Iusacell will announce results later today.
. Stet Hellas, Bell Atlantic's wireless investment in Greece, added almost
109,000 net customers in the quarter, more than double the number added
during the same period last year. The company ended the quarter with almost
800,000 customers, nearly 80 percent higher than first quarter 1998.
* * *
Bell Atlantic is at the forefront of the new communications and information
industry. With more than 43 million telephone access lines and 9 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 23 countries.
--more--
<PAGE>
Bell Atlantic News Release, page 7
For further information on quarterly results, visit Bell Atlantic's
Newsroom or Investor Information Websites (www.ba.com and
www.bellatlantic.com/invest), or use Bell Atlantic's Fax on Demand service at
800-329-7310.
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>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- -------------------------------------------------
Consolidated Statements of Income - 1st Quarter
- -------------------------------------------------
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/99 3/31/98 % Change
------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $3,468 $3,332 4.1
Network access services 1,944 1,907 1.9
Long distance services 474 502 (5.6)
Ancillary services 507 495 2.4
Directory services 547 532 2.8
Wireless services 990 856 15.7
Other services 37 27 37.0
-----------------------
Total Operating Revenues 7,967 7,651 4.1
-----------------------
Operating Expenses
Employee costs 2,018 2,304 (12.4)
Depreciation and amortization 1,504 1,411 6.6
Other operating expenses 2,367 2,224 6.4
-----------------------
Total Operating Expenses 5,889 5,939 (.8)
-----------------------
Operating Income 2,078 1,712 21.4
Income from unconsolidated businesses 34 23 47.8
Other income and (expense), net 19 14 35.7
Interest expense 315 310 1.6
Provision for income taxes 674 529 27.4
-----------------------
Income from Continuing Operations 1,142 910 25.5
Extraordinary item
Early extinguishment of debt, net of tax - (17) -
-----------------------
Net Income 1,142 893 27.9
Redemption of investee preferred stock - (2) -
-----------------------
Net Income Available to
Common Shareowners $ 1,142 $ 891 28.2
=======================
Diluted Earnings per Share $ .72 $ .56 28.6
Weighted average number of common
shares-assuming dilution (in millions) 1,582 1,579
</TABLE>
Footnotes:
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.
Share and per share amounts for the 3 months ended March 31, 1998 have been
adjusted to reflect a 2-for-1 stock split declared and paid in the second
quarter of 1998.
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- -----------------------------
Earnings Reconciliations
- -----------------------------
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended
3/31/99 3/31/98
Unaudited Net Income Diluted EPS Net Income Diluted EPS
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Income Available
to Common Shareowners $ 1,142 $ .72 $ 891 $ .56
Adjustments:
Transition costs 10 .01 5 .01
Special pension enhancement - - 147 .09
--------------------------------------------------------------
Adjusted Earnings $ 1,152 $ .73 $ 1,043 $ .66
Adjusted Growth 10.5% 10.6%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- ------------------------------------------------------------
Consolidated Adjusted Statements of Income - 1st Quarter
- ------------------------------------------------------------
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3/31/99 3 Mos. Ended 3/31/98 % Change
Unaudited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Operating Revenues
Local services $3,468 $3,332 4.1
Network access services 1,944 1,907 1.9
Long distance services 474 502 (5.6)
Ancillary services 507 495 2.4
Directory services 547 532 2.8
Wireless services 990 856 15.7
Other services 37 27 37.0
---------------------------------------
Total Operating Revenues 7,967 7,651 4.1
---------------------------------------
Operating Expenses
Employee costs 2,016 (1) 2,061 (4) (2.2)
Depreciation and amortization 1,504 1,411 6.6
Other operating expenses 2,352 (2) 2,218 (5) 6.0
---------------------------------------
Total Operating Expenses 5,872 5,690 3.2
---------------------------------------
Operating Income 2,095 1,961 6.8
Income from unconsolidated businesses 34 23 47.8
Other income and (expense), net 19 14 35.7
Interest expense 315 310 1.6
Provision for income taxes 681 (3) 626 (6) 8.8
---------------------------------------
Income from Continuing Operations 1,152 1,062 8.5
Extraordinary item
Early extinguishment of debt, net of tax - (17) -
---------------------------------------
Net Income 1,152 1,045 10.2
Redemption of investee preferred stock - (2) -
---------------------------------------
Net Income Available to
Common Shareowners $1,152 $1,043 10.5
=======================================
Diluted Earnings per Share $.73 $.66 10.6
=======================================
Weighted average number of common
shares-assuming dilution (in millions) 1,582 1,579
Footnotes:
1999
(1) Excludes $2 million related to transition costs
(2) Excludes $15 million related to transition costs
(3) Excludes tax effects of items (1) and (2) above
1998
(4) Excludes $240 million related to special pension enhancement and $3 million for transition costs
(5) Excludes $6 million related to transition costs
(6) Excludes tax effects of items (4) and (5) above
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- ---------------------------------------------
Selected Financial and Operating Statistics
- ---------------------------------------------
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/99 3/31/98
- ----------------------------------------------------------------------------
<S> <C> <C>
Debt ratio-end of period 59.7% 61.2%
Return on average common equity-adjusted basis 34.0% 31.9%
Return on average assets-adjusted basis 8.3% 7.7%
Book value per common share $ 8.70 $ 8.27
Cash dividends declared per common share $ .385 $ .385
Common shares outstanding (in millions)
End of period 1,552 1,552
Capital expenditures
Domestic Telecom $ 1,444 $ 1,485
Domestic Cellular 241 103
Other 26 71
------------------------------
Total $ 1,711 $ 1,659
==============================
Employees
Domestic Telecom 126,591 126,951
Other 14,349 14,450
------------------------------
Total 140,940 141,401
==============================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- --------------------------------------------------------
Consolidated Balance Sheets
- --------------------------------------------------------
(Dollars in Millions)
Unaudited 3/31/99 12/31/98 $ Change
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 334 $ 237 $ 97
Short-term investments 573 786 (213)
Accounts receivable, net 6,535 6,560 (25)
Inventories 555 566 (11)
Prepaid expenses 628 522 106
Other 276 411 (135)
---------------------------------
Total current assets 8,901 9,082 (181)
---------------------------------
Plant, property and equipment 84,672 83,064 1,608
Less accumulated depreciation 47,381 46,248 1,133
---------------------------------
37,291 36,816 475
---------------------------------
Investments in unconsolidated businesses 3,699 4,276 (577)
Other assets 5,084 4,970 114
---------------------------------
Total Assets $54,975 $55,144 $ (169)
=================================
Liabilities and Shareowners' Investment
Current liabilities
Debt maturing within one year $ 2,286 $ 2,988 $ (702)
Accounts payable and accrued liabilities 6,233 6,105 128
Other 1,370 1,438 (68)
---------------------------------
Total current liabilities 9,889 10,531 (642)
---------------------------------
Long-term debt 17,707 17,646 61
---------------------------------
Employee benefit obligations 10,185 10,384 (199)
---------------------------------
Deferred credits and other liabilities
Deferred income taxes 2,431 2,254 177
Unamortized investment tax credits 216 222 (6)
Other 527 551 (24)
---------------------------------
3,174 3,027 147
---------------------------------
Minority interest, including a portion subject to
redemption requirements 320 330 (10)
---------------------------------
Preferred stock of subsidiary 201 201 -
---------------------------------
Shareowners' investment
Common stock 158 158 -
Contributed capital 13,402 13,368 34
Reinvested earnings 1,844 1,371 473
Accumulated other comprehensive loss (729) (714) (15)
---------------------------------
14,675 14,183 492
Less common stock in treasury, at cost 649 593 56
Less deferred compensation-employee stock ownership plans 527 565 (38)
---------------------------------
Total shareowners' investment 13,499 13,025 474
---------------------------------
Total Liabilities and Shareowners' Investment $54,975 $55,144 $ (169)
=================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- -----------------------------------------------------
Consolidated Statements of Cash Flows
- -----------------------------------------------------
(Dollars in Millions)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/99 3/31/98 $ Change
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net Income $ 1,142 $ 893 $ 249
Adjustments to reconcile net inome to net cash
provided by operating activities:
Depreciation and amortization 1,504 1,411 93
Extraordinary item, net of tax - 17 (17)
Loss from unconsolidated businesses (34) (23) (11)
Dividends received from unconsolidated businesses 29 54 (25)
Amortization of unearned lease income (37) (30) (7)
Deferred income taxes, net 219 56 163
Investment tax credits (6) (7) 1
Other items, net 33 60 (27)
Changes in certain assets and liabilities, net of effects
from acquisition/disposition of businesses (652) (228) (424)
--------------------------------------
Net cash provided by operating activities 2,198 2,203 (5)
--------------------------------------
Cash Flows from Investing Activities
Net change in short-term investments 213 (17) 230
Additions to plant, property and equipment (1,711) (1,659) (52)
Proceeds from sale of plant, property and equipment - - -
Investment in leased assets (24) (2) (22)
Proceeds from leasing activities 32 50 (18)
Acquisition of business, less cash acquired (2) - (2)
Proceeds from notes receivable 3 2 1
Investments in unconsolidated businesses, net (106) (128) 22
Proceeds from disposition of businesses 612 4 608
Other, net (49) 35 (84)
--------------------------------------
Net cash used in investing activities (1,032) (1,715) 683
--------------------------------------
Cash Flows from Financing Activities
Proceeds from borrowings - 2,642 (2,642)
Principal repayments of borrowings and capital lease obligations (27) (36) 9
Early extinguishment of debt - (200) 200
Net change in short-term borrowings with original maturities
of three months or less (980) (1,851) 871
Proceeds from financing of cellular assets 380 - 380
Dividends paid (598) (594) (4)
Proceeds from sale of common stock 151 325 (174)
Purchase of common stock for treasury (208) (605) 397
Net change in outstanding checks drawn on controlled
disbursement accounts 213 (88) 301
--------------------------------------
Net cash used in financing activities (1,069) (407) (662)
--------------------------------------
Increase (decrease) in cash and cash equivalents 97 81 16
Cash and cash equivalents, beginning of period 237 323 (86)
--------------------------------------
Cash and cash equivalents, end of period $ 334 $ 404 $ (70)
======================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- ----------------------------------------------------------------------
Domestic Telecom - Selected Financial Results Adjusted Basis
- ----------------------------------------------------------------------
(Dollars in Millions)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/99 3/31/98 % Change
--------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $3,488 $3,347 4.2
Network access services 1,944 1,907 1.9
Long distance services 474 502 (5.6)
Ancillary services 535 512 4.5
----------------------------
Total Operating Revenues $6,441 $6,268 2.8
----------------------------
Operating Expenses
Employee costs $1,806 $1,827 (1.1)
Depreciation and amortization 1,336 1,262 5.9
Other operating expenses 1,614 1,626 (0.7)
----------------------------
Total Operating Expenses $4,756 $4,715 0.9
----------------------------
Operating Income $1,685 $1,553 8.5
Operating Income Margin 26.2% 24.8%
Operating Cash Flow $3,021 $2,815 7.3
Operating Cash Flow Margin 46.9% 44.9%
</TABLE>
Footnotes:
The selected financial results for the segments noted above are presented on an
adjusted basis and exclude the effects of special items. This presentation is
not intended to follow GAAP prescribed segment reporting in all respects.
Disclosure of segment information will appear in the Company's SEC Form 10-Q
for the quarter ended March 31, 1999.
Intercompany and intersegment transactions have not been eliminated.
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- ---------------------------------------------------
Domestic Telecom - Operating Statistics
- ---------------------------------------------------
(Dollars in Millions)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/99 3/31/98 % Change
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Statistics
Switched access lines in service
(in thousands) (1)
Residence 26,429 25,580 3.3%
Business 15,192 14,412 5.4%
Public 512 520 (1.5%)
-------------------------------
Total 42,133 40,512 * 4.0%
-------------------------------
Voice grade equivalents
(in thousands) (2)
Residence 26,429 25,580 3.3%
Business 33,456 27,777 20.4%
-------------------------------
Total 59,885 53,357 * 12.2%
-------------------------------
BRI ISDN lines (in thousands) (3) 529 463 14.3%
Access minutes of use (in millions) 44,502 41,609 7.0%
Employees per 10,000 access lines (4) 28.7 30.1 (4.7%)
High Capacity and Digital Data
Data Revenue (in millions)
Wideband transport (5) $ 435 $ 346 25.7%
Fast packet and other (6) 157 112 40.2%
Data solutions (7) 67 63 6.3%
-------------------------------
Total Revenues $ 659 $ 521 * 26.5%
===============================
Data Volumes (in thousands)
DSO Equivalents (8) 17,369 12,854 * 35.1%
-------------------------------
PRI ISDN (9) 884 557 58.7%
Frame Relay (9) 736 352 109.1%
ATM Cell Relay (9) 522 142 267.6%
Footnotes:
(1) Switched access lines include ISDN. Basic Rate Interface (BRI) ISDN is
counted as one access line and Primary Rate Interface (PRI) is counted as
23 lines.
(2) Voice Grade Equivalents (VGEs) represent the combination of switched access
lines and DSO equivalents, adjusted to avoid double counting of primary
rate ISDN channels.
(3) Represents the number of Basic Rate Interface (BRI) lines counted as one
acces line. Each BRI line consists of two 'B' channels that each operate
at 64 kbps, and one 'D' channel that serves as a signaling channel
directing voice & data transmissions.
(4) Calculated based on employees of telephone operations only.
(5) Includes circuit-based digital dedicated transport services such as Digital
DSO, DS1, DS3 and Sonet-based services used to carry local and access
traffic, both voice and data.
(6) Includes fast packet data transport services such as Frame Relay, SMDS and
ATM. Also includes ISDN, ADSL and internet revenue.
(7) Revenues associated with our Data Solution - Retail business
(8) Includes digital DS0 and above circuits (e.g. Digital DS0, DS1, DS3),
including packet-based services, converted to a DSO or 64kbps signal, the
equivalent to one voice signal. DS1=24DSOs, DS3=672 DSOs, OC3=2,106 DSOs,
OC12=8,424 DSOs, OC48=33,696 DSOs
(9) Volumes expressed as DSO equivalents.
* Restated for amounts previously disclosed
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- -----------------------------------------------------------
Directory - Selected Financial Results Adjusted Basis
- -----------------------------------------------------------
(Dollars in Millions)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/99 3/31/98 % Change
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues $553 $534 3.6
Operating Expenses
Employee Costs $80 $87 (8.0)
Depreciation & amortization 9 8 12.5
Other operating expenses 190 181 5.0
------------------------
Total Operating Expenses $279 $276 1.1
------------------------
Operating Income $274 $258 6.2
Operating Income Margin 49.5% 48.3%
Operating Cash Flow $283 $266 6.4
Operating Cash Flow Margin 51.2% 49.8%
</TABLE>
Footnotes:
The selected financial results for the segments noted above are presented on an
adjusted basis and exclude the effects of special items. This presentation is
not intended to follow GAAP prescribed segment reporting in all respects.
Disclosure of segment information will appear in the Company's SEC Form 10-Q
for the quarter ended March 31, 1999.
Intercompany and intersegment transactions have not been eliminated.
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- ---------------------------------------------------
Global Wireless Sector - Proportionate Results
- ---------------------------------------------------
(Dollars in millions, except per share amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/99 3/31/98 % Change
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Combined Global Wireless
Selected Financial Results
Revenues $ 1,276 $ 978 30.5
Operating income $ 186 $ 120 55.0
Operating cash flow (1) $ 382 $ 292 30.8
Selected Operating Data
Subscribers (000) 9,116 6,741 35.2
Subscriber net adds in period (000) 532 394 35.0
POPs (000) 186,590 175,774 6.2
- ---------------------------------------------------------------------------
Bell Atlantic Mobile (2)
Selected Financial Results
Revenues $ 908 $ 786 15.5
Operating income $ 172 $ 167 3.0
Operating cash flow $ 313 $ 289 8.3
Selected Operating Data
Subscribers (000) 6,391 5,483 16.6
Subscriber net adds in period (000) 190 127 49.6
Controlled POPs (000) 57,356 56,987 0.6
- ---------------------------------------------------------------------------
PrimeCo Personal Communications (3)
Selected Financial Data
Revenues $ 88 $ 49 79.6
Operating income $ (37) $ (65) 43.1
Operating cash flow $ (22) $ (37) 40.5
Selected Operating Data
Subscribers (000) 506 237 113.5
Subscriber net adds in period (000) 94 56 67.9
POPs (000) 28,634 28,487 0.5
- ---------------------------------------------------------------------------
International Wireless Operation (4)
Selected Financial Data
Revenues $ 280 $ 143 95.8
Operating income $ 51 $ 18 183.3
Operating cash flow $ 91 $ 40 127.5
Selected Operating Data
Subscribers (000) 2,219 1,021 117.3
Subscriber net adds in period (000) 248 211 17.5
POPs (000) 100,600 90,300 11.4
</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) Represents 46.7% of total PrimeCo Personal Communications
(4) Represents Bell Atlantic's proportionate share of International wireless
investments including consolidated, equity method, and cost basis
investments
<PAGE>
<TABLE>
<CAPTION>
Bell Atlantic Corporation
- -------------------------------------------
Bell Atlantic Mobile Operating Results
- -------------------------------------------
(Dollars in millions, except per share amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 3/31/99 3/31/98 % Change
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bell Atlantic Mobile (1)
Selected Financial Results
Revenues $ 908 $ 786 15.5
Less: Incollect revenues $ 76 $ 62 22.6
Less: Equipment revenues $ 63 $ 35 80.0
----------------------------
Service revenues $ 769 $ 689 11.6
----------------------------
Operating income $ 172 $ 167 3.0
Operating cash flow $ 313 $ 289 8.3
Operating cash flow margin (2) 41% 42%
Capital expenditures, excluding acquisitions 241 103 134.0
Selected Operating Data
Subscribers (000) 6,391 5,483 16.6
Penetration (3) 11.1% 9.6%
Subscriber net adds in period (000) 190 127 49.6
Controlled POPs (000) (4) 57,356 56,987 0.6
Owned POPs (000) (5) 55,697 55,101 1.1
Churn rate 1.97% 1.83%
Total revenue per subscriber $ 48.03 $ 48.40 (0.8)
Service revenue per subscriber $ 40.69 $ 42.41 (4.1)
Cash expense per subscriber $ 24.14 $ 24.60 (1.9)
Acquisition cost per add (6) $ 208 $ 228 (8.8)
</TABLE>
Footnotes:
(1) Bell Atlantic Mobile results reflect consolidated results for all
controlled markets
(2) Operating cash flow margin is calculated by dividing operating cash flow
by service revenues
(3) Penetration is calculated by dividing subscribers by controlled POPs
(4) Controlled POPs represent the total number of POPs for which Bell
Atlantic Mobile has operating control
(5) Owned POPs represent Bell Atlantic Mobile percentage ownership in all
licensed markets
(6) Acquisition cost per add includes commissions and loss on handsets
Certain reclassifications have been made to prior results to conform to current
presentation
