<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: January 27, 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 a press release issued by Bell Atlantic Corporation
on January 27, 1999 announcing earnings for the fourth quarter of 1998 and the
year ended December 31, 1998.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits.
99 Press Release, dated January 27, 1999, issued by Bell Atlantic
Corporation.
<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: January 28, 1999
<PAGE>
EXHIBIT 99
NEWS RELEASE [LOGO OF BELL ATLANTIC APPEARS HERE]
FOR IMMEDIATE RELEASE Contact:
Jan. 27, 1999 David Frail
212-395-7726
[email protected]
Strong Telecom and Wireless Volumes
Drive Double-Digit Bell Atlantic Earnings Growth
Adjusted EPS Up 11.3 Percent for Quarter, 11 Percent For Year
NEW YORK, N.Y. -- Bell Atlantic Corp. (NYSE: BEL) today announced its fourth
consecutive year of double-digit earnings growth, with 1998 adjusted earnings
per diluted share increasing 11 percent to $2.72 from $2.45 in 1997. Adjusted
net income available to common shareowners rose 11.6 percent to $4.3 billion.
Fourth quarter adjusted EPS increased to 69 cents, up 11.3 percent from 62
cents in fourth quarter 1997, with adjusted net income available to common
shareowners rising to $1.1 billion, up 11.8 percent from $970.9 million.
Adjustments and reported results are described below.
"Bell Atlantic had an excellent 1998," said Chairman and CEO Ivan
Seidenberg. "We extended our track record for double-digit earnings growth to a
fourth consecutive year even while integrating Bell Atlantic and NYNEX following
our merger. At the same time, we positioned ourselves to sustain this momentum
and even accelerate it by preparing to enter the richest new markets in
telecommunications."
"Our Telecom Group benefited from a full year of robust across-the-board
demand for voice and data services and invested for growth, both through long
distance entry and through
--more--
<PAGE>
Bell Atlantic Earnings Release, p. 2
new data facilities and services, including our new Infospeed DSL(SM) offering.
Our Wireless Group contributed nearly one-third of last year's earnings growth
and showed once again that it is one of the world's strongest portfolios of
domestic and international wireless assets.
"Our performance was significantly enhanced by the cost savings, capital
efficiencies and revenue gains we generated from the Bell Atlantic-NYNEX merger.
These synergies helped us make significant progress toward becoming the kind of
diversified, multi-service provider that will participate fully in the
phenomenal growth of communications markets worldwide. Our merger of equals with
GTE will be the most significant step in this transformation, and we're looking
forward to completing that transaction and getting to the next competitive
level."
Adjusted revenues increased 4.5 percent for the quarter, to $8.1 billion,
and 3.6 percent for the year, to $31.6 billion. Proportionate revenues from Bell
Atlantic's Telecom and Global Wireless businesses, which include Bell Atlantic's
share of revenues from unconsolidated wireless investments, rose 6.5 percent for
the quarter and 5.6 percent for the year. Adjusted expenses increased 3.5
percent for the quarter and 2.2 percent for the year.
Adjusted results exclude charges for special items. These totaled 4
cents per share in fourth quarter 1998 for merger transition costs and 2 cents
per share in fourth quarter 1997 for charges partially offset by certain
one-time gains. Charges in 1998 totaled 86 cents per share, primarily for
completion of a retirement incentive program, write-downs of certain
international investments, and merger transition charges. Charges in 1997
totaled 89 cents per share, largely for costs related to the Bell Atlantic-NYNEX
merger.
Reported fourth quarter net income available to common shareowners was
$1.0 billion, or 65 cents per share, compared to $940.0 million, or 60 cents per
share, in fourth quarter 1997. Reported 1998 net income available to common
shareowners was $2.9 billion, or $1.86 per share, compared to $2.5 billion, or
$1.56 per share, in 1997.
Telecom Highlights
With demand for communications services, particularly data and value-added
services, continuing at robust levels, Telecom Group revenue increased 3.5
percent over fourth quarter 1997. The number of access lines in service grew 4.3
percent to 41.6 million, which, combined with continued demand for data
circuits, increased the number of voice-grade equivalents (access
--more--
<PAGE>
Bell Atlantic Earnings Release, p. 3
lines plus data circuits) in service by 11.6 percent to 56.9 million. Access
minutes of use increased 5.9 percent in the quarter and 7.8 percent for the full
year.
More than two-thirds of Telecom revenue growth for both the quarter and the
year came from sales of data services. Data revenues, including those from
high-bandwidth packet-switched and special access services and Bell Atlantic's
network integration business, exceeded $2.3 billion for the year, 31 percent
over 1997 levels.
The demand for digital connectivity and value-added features continued to
grow in all markets. In the enterprise (large business) and general business
markets:
. The number of "DS0" circuits in service (digital, high-bandwidth and
packet-switched services as measured in 64-kilobit voice-grade equivalents)
increased more than 38 percent over year-end 1997, to 16.6 million.
. Bell Atlantic ended 1998 with almost 519,000 basic rate Integrated Services
Digital Network (ISDN) lines in service, up 19 percent from year-end 1997,
and the number of primary rate ISDN channels in service increased 75
percent to nearly 823,000.
In consumer markets:
. Bell Atlantic ended the year with more than 2 million lines equipped to
offer Infospeed DSL(SM), the company's high-bandwidth household service.
Bell Atlantic plans to equip more than 7.5 million lines for Infospeed by
the end of 1999 and approximately 14 million lines by the end of 2000.
. Vertical service revenues continued to grow as customers purchased new
packages combining Caller ID, Return Call, Call Waiting, Home Voice Mail
and other features. Caller ID revenues increased 42 percent in 1998, as the
number of subscribers increased to 6.3 million, and Home Voice Mail
revenues rose 16 percent.
In network services markets:
. At the end of 1998, Bell Atlantic was providing other carriers with
approximately 600,000 resold access lines and 70,000 unbundled loops.
. Special access revenues for the year increased 22 percent to $1.5 billion.
Adjusted 1998 network operating expenses totaled $20.6 billion, 2.1 percent
above 1997 levels, with cash expenses up 1.5 percent. Fourth quarter adjusted
operating expenses of $5.3 billion were 3.0 percent above fourth quarter 1997
levels, with cash expenses up 2.9 percent.
--more--
<PAGE>
Bell Atlantic Earnings Release, p. 4
Among the drivers of expense growth were interconnection payments to competitive
local exchange carriers, which increased by approximately $175 million in 1998
over 1997 levels.
Wireless Highlights
Continued strong performance drove Wireless Group financial results to new
levels in 1998. Solid fourth quarter gains by Bell Atlantic Mobile, PrimeCo
Personal Communications and one of the world's premier international wireless
portfolios enabled Wireless to set new marks for proportionate net subscribers,
revenues and operating income.
In line with Bell Atlantic's strategy to become a national and global
wireless business, international investments and PrimeCo Personal Communications
generated nearly 60 percent of the Group's revenue growth in 1998, and
international ventures contributed nearly half of the year's net subscriber
additions, approximately 1.1 million.
Proportionate subscribers increased more than 35 percent over fourth
quarter 1997 to 8.6 million. Proportionate net subscriber additions for the
quarter totaled 731,000, 41 percent more than the prior-year period. Net
customer additions for the year totaled almost 2.2 million, 35 percent more than
in 1997.
Total proportionate revenues increased 27.5 percent in the quarter, to a
record $1.3 billion, and totaled $4.6 billion for the year, 25 percent higher
than in 1997. Proportionate operating income for the quarter increased 20
percent to $195 million. Full-year operating income totaled $760 million, up
nearly 41 percent over 1997.
Bell Atlantic's domestic properties capped a year of sustained growth with
a strong fourth quarter. Bell Atlantic Mobile (BAM) added 302,000 customers in
the quarter -- 10,000 more than in fourth quarter 1997 -- and grew its
subscriber base to 6.2 million, 16 percent above year-end 1997. The introduction
of DigitalChoice SingleRate price plans in September helped BAM grow its digital
subscriber base to more than 950,000 by year-end. Approximately 40 percent of
BAM busy-hour calls were on its digital networks.
Demand for PCS service in the Midwest, Southeast and Southwest fueled
strong growth at PrimeCo Personal Communications, with fourth quarter subscriber
additions of 196,000 bringing PrimeCo's total subscriber base to 902,000, up 133
percent over year-end 1997.
--more--
<PAGE>
Bell Atlantic Earnings Release, p. 5
PrimeCo's year-end penetration rate of 2.2 percent of covered POPs was double
the year-end 1997 rate.
Other domestic highlights:
. BAM's total quarterly revenues were $923 million, 13 percent above
fourth quarter 1997. Total BAM revenues for the year were almost $3.5
billion, up 12 percent over 1997.
. BAM's continued focus on expense control reduced acquisition costs per
subscriber by 15 percent to $184, compared to $217 in the prior-year
period. Cash expense per subscriber for the quarter was $25.
. BAM operating cash flow for the quarter was $343 million, up 9 percent
over the prior-year period. Operating cash flow margin in the fourth
quarter was 43 percent and 45 percent for the year. Quarterly
operating income of $202 million brought the full-year total to $821
million. Dilution of total revenue per subscriber declined to 3.2
percent in the quarter, nearly a full percentage point lower than the
full-year figure of 4.3 percent.
. Total PrimeCo revenues for the quarter grew 98 percent over fourth
quarter 1997 to $154 million. Year-end revenues were $509 million,
compared to $208 million in 1997. Average monthly revenue per
subscriber was $53 in the quarter, and $57 for the year.
The Group's portfolio of international investments rode the strong
popularity of prepaid wireless services and the increasing adoption of wireless
as an alternative to landline service to produce a growing share of Global
Wireless revenue and operating cash flow.
International proportionate net subscriber additions for the quarter
totaled 336,000, almost double the prior-year period. International year-end
proportionate subscribers totaled approximately 2 million, up 144 percent over
1997.
International proportionate revenues for the quarter were $276 million,
almost double fourth quarter 1997, bringing the year-end total to $856 million,
$393 million more than 1997. Proportionate operating income in the quarter grew
to $41 million, $24 million over fourth quarter 1997. Quarterly operating cash
flow grew to $83 million, totaling $250 million for 1998, 180 percent over the
prior year.
Other international highlights:
. Omnitel Pronto Italia, Bell Atlantic's Italian wireless investment, added
more than a million customers in the quarter to pass the six-million
customer milestone. Omnitel is the third-largest GSM network wireless
operator in Europe.
--more--
<PAGE>
Bell Atlantic Earnings Release, p. 6
. Grupo Iusacell in Mexico ended the quarter with approximately 755,000
subscribers, an increase of 89 percent over year-end 1997. During the year
Iusacell adopted a number of Bell Atlantic Wireless Group strategies,
including new customer care and billing systems and a redesigned chain of
retail stores, to prepare for the arrival of new competition in Mexican
wireless markets in 1999.
. Stet Hellas, Bell Atlantic's wireless investment in Greece, added 108,000
net customers in the quarter, 130 percent higher than in fourth quarter
1997. The company ended 1998 with more than 688,000 subscribers, 76 percent
higher than 1997. In November, Stet Hellas announced that Germanos S.A.,
Greece's largest telecommunications and electronics retailer, will
distribute Stet Hellas' complete range of products and services throughout
its 100-store chain.
* * *
Bell Atlantic is at the forefront of the new communications and information
industry. With more than 42 million telephone access lines and 8.6 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.
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.
###
INTERNET USERS: Bell Atlantic news releases, executive speeches, news media
contacts and other useful information are available at Bell Atlantic's News
Center on the World Wide Web (http://www.ba.com). To receive news releases by
email, visit the News Center and register for personalized automatic delivery of
Bell Atlantic news releases.
--more--
<PAGE>
- -----------------------------------------------
Consolidated Statements of Income
- -----------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/98 12/31/97 % Change 12/31/98 12/31/97 % Change
- ---------------------------------------------------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,511.7 $ 3,339.4 5.2 $ 13,815.4 $ 13,113.2 5.4
Network access services 1,912.4 1,780.8 7.4 7,655.1 7,158.6 6.9
Long distance services 463.5 512.0 (9.5) 1,928.2 2,190.1 (12.0)
Ancillary services 486.6 482.7 .8 1,912.4 1,845.4 3.6
Directory and information services 672.2 648.6 3.6 2,371.7 2,298.0 3.2
Wireless services 1,000.5 888.8 12.6 3,780.3 3,328.5 13.6
Other services 30.2 43.4 (30.4) 102.8 260.1 (60.5)
------------------------ ---------------------------
Total Operating Revenues 8,077.1 7,695.7 5.0 31,565.9 30,193.9 4.5
------------------------ ---------------------------
Operating Expenses
Employee costs 2,053.4 2,090.3 (1.8) 9,265.8 9,047.2 2.4
Depreciation and amortization 1,544.1 1,405.3 9.9 5,870.2 5,864.4 .1
Taxes other than income 331.0 354.5 (6.6) 1,465.9 1,606.9 (8.8)
Other operating expenses 2,316.1 2,231.5 3.8 8,336.8 8,333.9
------------------------ ---------------------------
Total Operating Expenses 6,244.6 6,081.6 2.7 24,938.7 24,852.4 .3
------------------------ ---------------------------
Operating Income 1,832.5 1,614.1 13.5 6,627.2 5,341.5 24.1
Income (loss) from unconsolidated businesses 48.0 112.8 (57.4) (414.6) (124.1) NM
Other income and (expense), net 22.2 16.2 37.0 121.7 (3.3) NM
Interest expense 303.6 311.3 (2.5) 1,335.4 1,230.0 8.6
Provision for income taxes 537.9 491.8 9.4 2,008.1 1,529.2 31.3
------------------------ ---------------------------
Income from Continuing Operations 1,061.2 940.0 12.9 2,990.8 2,454.9 21.8
Extraordinary item
Early extinguishment of debt, net of tax (2.1) -- NM (25.5) -- NM
------------------------ ---------------------------
Net Income 1,059.1 940.0 12.7 2,965.3 2,454.9 20.8
Redemption of investee preferred stock -- (2.5) -- NM
Redemption of minority interest (29.8) -- NM (29.8) -- NM
------------------------ ---------------------------
Net Income Available to
Common Shareowners $ 1,029.3 $ 940.0 9.5 $ 2,933.0 $ 2,454.9 19.5
======================== ===========================
Basic Earnings per Share $ .66 $ .61 8.2 $ 1.89 $ 1.58 19.6
Weighted average number of common
shares outstanding (in millions) 1,553.0 1,552.9 1,553.0 1,551.8
Diluted Earnings per Share $ .65 $ .60 8.3 $ 1.86 $ 1.56 19.2
Weighted average number of common
shares-assuming dilution (in millions) 1,582.4 1,578.6 1,578.3 1,571.1
</TABLE>
Notes:
All prior period share and per share amounts have been adjusted to reflect a
2-for-1 stock split declared and paid in the second quarter of 1998
Basic Earnings per Share are based on the weighted-average number of shares
outstanding during the period
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
NM Not meaningful
<PAGE>
- -------------------------------------------------------
Earnings Reconciliations
- -------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
--------------------------------
3 Mos. Ended 12/31/98 3 Mos. Ended 12/31/97
Unaudited Net Income Diluted EPS Net Income Diluted EPS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Income Available to Common Shareowners $ 1,029.3 $ .65 $ 940.0 $ .60
Adjustments:
Transition costs 56.4 .04 46.7 .03
Special pension enhancements 38.4 .02
Other one-time items (54.2) (.03)
--------------------------------------------------------------
Adjusted Earnings $ 1,085.7 $ .69 $ 970.9 $ .62
==============================================================
Adjusted Growth 11.8% 11.3%
<CAPTION>
--------------------------------
12 Mos. Ended 12/31/98 12 Mos. Ended 12/31/97
Net Income Diluted EPS Net Income Diluted EPS
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Income Available to Common Shareowners $ 2,933.0 $ 1.86 $ 2,454.9 $ 1.56
Adjustments:
Merger-related costs
Direct costs 182.0 .11
Employee severance costs 139.5 .09
Transition costs 121.6 .08 59.7 .04
Special pension enhancement and contract-related 670.0 .42 324.5 .21
Special charges & other one-time items 566.8 .36 686.2 .44
--------------------------------------------------------------
Adjusted Earnings $ 4,291.4 $ 2.72 $ 3,846.8 $ 2.45
==============================================================
Adjusted Growth 11.6% 11.0%
</TABLE>
<PAGE>
- --------------------------------------------------------
Sector Summary
- --------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
----------------
Unaudited 3 Mos. Ended 3 Mos. Ended
12/31/98 12/31/97 % Change
------------------------------------------------
<S> <C> <C> <C>
Revenues
Telecom $ 7,069.1 $ 6,832.9 3.5
Global Wireless (1) 1,271.1 996.7 27.5
-------------------------------
Total $ 8,340.2 $ 7,829.6 6.5
===============================
<CAPTION>
----------------
3 Mos. Ended 3 Mos. Ended
12/31/98 12/31/97 % Change
------------------------------------------------
<S> <C> <C> <C>
Operating Income
Telecom $ 1,729.9 $ 1,651.0 4.8
Global Wireless (1) 195.1 162.1 20.4
-------------------------------
Total $ 1,925.0 $ 1,813.1 6.2
===============================
<CAPTION>
----------------
12 Mos. Ended 12 Mos. Ended
12/31/98 12/31/97 % Change
------------------------------------------------
<S> <C> <C> <C>
Revenues
Telecom $ 27,780.1 $ 26,971.9 3.0
Global Wireless (1) 4,574.2 3,658.3 25.0
-------------------------------
Total $ 32,354.3 $ 30,630.2 5.6
===============================
<CAPTION>
----------------
12 Mos. Ended 12 Mos. Ended
12/31/98 12/31/97 % Change
------------------------------------------------
<S> <C> <C> <C>
Operating Income
Telecom $ 7,141.1 $ 6,764.0 5.6
Global Wireless (1) 760.2 540.8 40.6
-------------------------------
Total $ 7,901.3 $ 7,304.8 8.2
===============================
</TABLE>
Footnote:
(1) Represents Bell Atlantic's proportionate share of ownership interests in
its Global Wireless (consolidated and unconsolidated) investments
Telecom sector results appear on page 10
Global Wireless sector results appear on pages 11 and 12
<PAGE>
- -------------------------------------------------------------------------------
Consolidated Adjusted Statements of Income - 4th Quarter (Adjusted Basis)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 12/31/98 3 Mos. Ended 12/31/97
Unaudited Reported Adjustments Adjusted Reported Adjustments Adjusted % Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,511.7 $ 3,511.7 $ 3,339.4 $ 3,339.4 5.2
Network access services 1,912.4 1,912.4 1,780.8 43.4 (5) 1,824.2 4.8
Long distance services 463.5 463.5 512.0 512.0 (9.5)
Ancillary services 486.6 486.6 482.7 (1.1)(6) 481.6 1.0
Directory and information services 672.2 672.2 648.6 648.6 3.6
Wireless services 1,000.5 1,000.5 888.8 888.8 12.6
Other services 30.2 30.2 43.4 (5.1)(6) 38.3 (21.1)
-----------------------------------------------------------------------------
Total Operating Revenues 8,077.1 8,077.1 7,695.7 37.2 7,732.9 4.5
-----------------------------------------------------------------------------
Operating Expenses
Employee costs 2,053.4 (6.6)(1) 2,046.8 2,090.3 (62.8)(7) 2,027.5 1.0
Depreciation and amortization 1,544.1 (38.8)(2) 1,505.3 1,405.3 1.9 (8) 1,407.2 7.0
Taxes other than income 331.0 331.0 354.5 (.4)(9) 354.1 (6.5)
Other operating expenses 2,316.1 (44.7)(3) 2,271.4 2,231.5 (76.3)(10) 2,155.2 5.4
-----------------------------------------------------------------------------
Total Operating Expenses 6,244.6 (90.1) 6,154.5 6,081.6 (137.6) 5,944.0 3.5
-----------------------------------------------------------------------------
Operating Income 1,832.5 90.1 1,922.6 1,614.1 174.8 1,788.9 7.5
Income from unconsolidated businesses 48.0 48.0 112.8 (100.9)(11) 11.9 NM
Other income and (expense), net 22.2 22.2 16.2 (3.9)(12) 12.3 80.5
Interest expense 303.6 303.6 311.3 (.4)(13) 310.9 (2.3)
Provision for income taxes 537.9 33.7 (4) 571.6 491.8 39.5 (14) 531.3 7.6
-----------------------------------------------------------------------------
Income from Continuing Operations 1,061.2 56.4 1,117.6 940.0 30.9 970.9 15.1
Extraordinary item
Early extinguishment of debt, net of tax (2.1) (2.1) - - NM
-----------------------------------------------------------------------------
Net Income 1,059.1 56.4 1,115.5 940.0 30.9 970.9 14.9
Redemption of minority interest (29.8) (29.8) - - NM
-----------------------------------------------------------------------------
Net Income Available to
Common Shareowners $ 1,029.3 $ 56.4 $ 1,085.7 $ 940.0 $ 30.9 $ 970.9 11.8
=============================================================================
Diluted Earnings per Share $ .65 $ .04 $ .69 $ .60 $ .02 $ .62 11.3
-----------------------------------------------------------------------------
Weighted average number of common
shares-assuming dilution (in millions) 1,582.4 1,582.4 1,578.6 1,578.6
</TABLE>
Footnotes:
1998
(1) Adjustment for merger transition costs
(2) Reclass adjustment related to international investments
(3) Adjustment for merger transition costs ($83.5), partially offset by reclass
adjustment related to international investments ($38.8)
(4) Tax effects of items (1) through (3) above
1997
(5) Adjustment related to other one-time items ($38.3) and transition issues
($5.1)
(6) Adjustment related to transition issues
(7) Adjustment for special pension enhancement ($60.0) and merger transition
costs ($2.8)
(8) Adjustment related to merger transition costs ($1.9)
(9) Adjustment for merger transition costs ($0.4)
(10) Adjustment for merger transition costs ($76.3)
(11) Adjustment for other one-time items ($100.7) and merger transition issues
($0.2)
(12) Adjustment for merger transition costs
(13) Adjustment for other one-time items
(14) Tax effects of items (5)-(13) above
<PAGE>
- -------------------------------------------------------------------------------
Consolidated Adjusted Statements of Income - Year-to-Date (Adjusted Basis)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
--------------------------------------------------
12 Mos. Ended 12/31/98
Unaudited Reported Adjustments Adjusted
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $ 13,815.4 $ 13,815.4
Network access services 7,655.1 7,655.1
Long distance services 1,928.2 1,928.2
Ancillary services 1,912.4 1,912.4
Directory and information services 2,371.7 2,371.7
Wireless services 3,780.3 3,780.3
Other services 102.8 102.8
--------------------------------------------------
Total Operating Revenues 31,565.9 31,565.9
--------------------------------------------------
Operating Expenses
Employee costs 9,265.8 (1,066.3)(1) 8,199.5
Depreciation and amortization 5,870.2 (38.8)(2) 5,831.4
Taxes other than income 1,465.9 1,465.9
Other operating expenses 8,336.8 (206.0)(3) 8,130.8
--------------------------------------------------
Total Operating Expenses 24,938.7 (1,311.1) 23,627.6
--------------------------------------------------
Operating Income 6,627.2 1,311.1 7,938.3
Income (loss) from unconsolidated businesses (414.6) 493.5 (4) 78.9
Other income and (expense), net 121.7 (45.4)(4) 76.3
Interest expense 1,335.4 (46.8)(4) 1,288.6
Provision for income taxes 2,008.1 447.6 (5) 2,455.7
--------------------------------------------------
Income from Continuing Operations 2,990.8 1,358.4 4,349.2
Extraordinary item
Early extinguishment of debt, net of tax (25.5) (25.5)
--------------------------------------------------
Net Income 2,965.3 1,358.4 4,323.7
Redemption of investee preferred stock (2.5) (2.5)
Redemption of minority interest (29.8) (29.8)
--------------------------------------------------
Net Income Available to
Common Shareowners $ 2,933.0 $ 1,358.4 $ 4,291.4
==================================================
Diluted Earnings per Share $ 1.86 $ .86 $ 2.72
--------------------------------------------------
Weighted average number of common
shares-assuming dilution (in millions) 1,578.3 1,578.3
<CAPTION>
12 Mos. Ended 12/31/97
Unaudited Reported Adjustments Adjusted % Change
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Revenues
Local services $ 13,113.2 $ 83.0 (6) $ 13,196.2 4.7
Network access services 7,158.6 179.5 (7) 7,338.1 4.3
Long distance services 2,190.1 2,190.1 (12.0)
Ancillary services 1,845.4 .6 (8) 1,846.0 3.6
Directory and information services 2,298.0 2,298.0 3.2
Wireless services 3,328.5 3,328.5 13.6
Other services 260.1 260.1 (60.5)
--------------------------------------------
Total Operating Revenues 30,193.9 263.1 30,457.0 3.6
--------------------------------------------
Operating Expenses
Employee costs 9,047.2 (804.7)(9) 8,242.5 (.5)
Depreciation and amortization 5,864.4 (299.8)(10) 5,564.6 4.8
Taxes other than income 1,606.9 (80.1)(11) 1,526.8 (4.0)
Other operating expenses 8,333.9 (537.9)(12) 7,796.0 4.3
--------------------------------------------
Total Operating Expenses 24,852.4 (1,722.5) 23,129.9 2.2
--------------------------------------------
Operating Income 5,341.5 1,985.6 7,327.1 8.3
Income (loss) from unconsolidated businesses (124.1) 78.8 (13) (45.3) NM
Other income and (expense), net (3.3) (5.1)(14) (8.4) NM
Interest expense 1,230.0 (13.4)(15) 1,216.6 5.9
Provision for income taxes 1,529.2 680.8 (16) 2,210.0 11.1
--------------------------------------------
Income from Continuing Operations 2,454.9 1,391.9 3,846.8 13.1
Extraordinary item
Early extinguishment of debt, net of tax - - NM
--------------------------------------------
Net Income 2,454.9 1,391.9 3,846.8 12.4
Redemption of investee preferred stock - - NM
Redemption of minority interest - - NM
--------------------------------------------
Net Income Available to
Common Shareowners $ 2,454.9 $ 1,391.9 $ 3,846.8 11.6
============================================
Diluted Earnings per Share $ 1.56 $ .89 $ 2.45 11.0
--------------------------------------------
Weighted average number of common
shares-assuming dilution (in millions) 1,571.1 1,571.1
</TABLE>
Footnotes:
1998
(1) Adjustment for special pension enhancement and contract-related ($1,051.5),
and merger transition costs ($14.8)
(2) Reclass adjustment related to international investments
(3) Adjustment for merger transition costs ($181.7), and other one-time items
($24.3)
(4) Adjustment for special charges and other one-time items
(5) Tax effects of items (1) through (4) above
1997
(6) Restated for reclass adjustment
(7) Adjustment related to special charges and other one-time items ($174.4) and
transition issues ($5.1)
(8) Adjustment for special charges and other one-time items ($1.7), partially
offset by transition issues ($1.1)
(9) Adjustment for merger-related costs ($279.9), special pension enhancement
($513.1) and special charges and other one-time items ($11.7)
(10) Adjustment related to special charges and other one-time items ($301.7),
partially offset by transition issues($1.9)
(11) Adjustment for merger-related costs ($25.0), special charges and other
one-time items ($54.7) and transition costs ($0.4)
(12) Adjustment for merger costs ($217.6), special charges and other one-time
items ($416.3), and an increase for a reclass adjustment ($96.0)
(13) Adjustment for special charges and other one-time items ($78.6) and
transition issues ($0.2)
(14) Adjustment for other one-time items ($1.2) and transition issues ($3.9)
(15) Restated for reclass adjustment ($13.0) and other one-time items ($0.4)
(16) Tax effects of items (6) - (15) above ($673.3), miscellaneous items ($28.1)
and a net benefit for tax-related issues ($35.6)
<PAGE>
- ----------------------------------------------------------------
Selected Financial and Operating Statistics
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/98 12/31/97 12/31/98 12/31/97
- ------------------------------------------------------------------------------------ ----------------------------------
<S> <C> <C> <C> <C>
Debt ratio-end of period 61.2% 60.5%
Return on average common equity-adjusted basis 31.4% 27.6% 31.5% 28.1%
Return on average assets-adjusted basis 8.0% 7.2% 7.9% 7.2%
Book value per common share $ 8.42 $ 8.24
Cash dividends declared per common share $ .385 $ .385 $ 1.54 $ 1.51
Common shares outstanding (in millions)
End of period 1,553.4 1,553.1
Capital expenditures
Telecom $ 1,660 $ 1,489 $ 6,444 $ 5,523
Domestic cellular 259 251 703 915
Other 106 15 299 200
----------------------------------- -----------------------------------
Total $ 2,025 $ 1,755 $ 7,446 $ 6,638
=================================== ===================================
Employees
Telecom 130,075 131,310
Other 10,364 9,779
-----------------------------------
Total 140,439 141,089
===================================
</TABLE>
Note:
All prior period share and per share amounts have been adjusted to reflect a
2-for-1 stock split declared and paid in the second quarter of 1998
<PAGE>
- ---------------------------------------------------------------
Consolidated Balance Sheets
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
Unaudited 12/31/98 12/31/97 $ Change
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 237.1 $ 322.8 $ (85.7)
Short-term investments 785.8 720.6 65.2
Accounts receivable, net 6,563.0 6,340.8 222.2
Inventories 566.0 550.3 15.7
Prepaid expenses 522.0 634.0 (112.0)
Other 406.0 432.3 (26.3)
----------------------------------------
Total current assets 9,079.9 9,000.8 79.1
----------------------------------------
Plant, property and equipment 83,064.1 77,437.2 5,626.9
Less accumulated depreciation 46,248.6 42,397.8 3,850.8
----------------------------------------
36,815.5 35,039.4 1,776.1
----------------------------------------
Investments in unconsolidated businesses 4,276.0 5,144.2 (868.2)
Other assets 4,972.5 4,779.7 192.8
----------------------------------------
Total Assets $ 55,143.9 $ 53,964.1 $ 1,179.8
========================================
Liabilities and Shareowners' Investment
Current liabilities
Debt maturing within one year $ 2,987.6 $ 6,342.8 $ (3,355.2)
Accounts payable and accrued liabilities 6,057.0 5,966.4 90.6
Other 1,438.7 1,355.0 83.7
----------------------------------------
Total current liabilities 10,483.3 13,664.2 (3,180.9)
----------------------------------------
Long-term debt 17,646.4 13,265.2 4,381.2
----------------------------------------
Employee benefit obligations 10,384.2 10,004.4 379.8
----------------------------------------
Deferred credits and other liabilities
Deferred income taxes 2,253.8 2,106.2 147.6
----------------------------------------
Unamortized investment tax credits 221.8 250.7 (28.9)
----------------------------------------
Other 550.9 772.6 (221.7)
----------------------------------------
Minority interest, including a portion subject to
redemption requirements 329.7 911.2 (581.5)
----------------------------------------
Preferred stock of subsidiary 200.5 200.5 -
----------------------------------------
Shareowners' investment
Common stock 157.6 157.6 -
Contributed capital 13,368.0 13,176.8 191.2
Reinvested earnings 1,370.8 1,261.6 109.2
Accumulated other comprehensive loss (714.2) (553.3) (160.9)
----------------------------------------
14,182.2 14,042.7 139.5
Less common stock in treasury, at cost 592.2 590.5 1.7
Less deferred compensation-employee stock ownership plans 516.7 663.1 (146.4)
----------------------------------------
Total shareowners' investment 13,073.3 12,789.1 284.2
----------------------------------------
Total Liabilities and Shareowners' Investment $ 55,143.9 $ 53,964.1 $ 1,179.8
========================================
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
Consolidated Statements of Cash Flows
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
---------------
12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/98 12/31/97 $ Change
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net Income $ 2,965.3 $ 2,454.9 $ 510.4
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 5,870.2 5,864.4 5.8
Extraordinary item, net of tax 25.5 - 25.5
Loss from unconsolidated businesses 414.6 124.1 290.5
Dividends received from unconsolidated businesses 169.4 192.1 (22.7)
Amortization of unearned lease income (120.2) (110.3) (9.9)
Deferred income taxes, net 264.2 236.9 27.3
Investment tax credits (28.9) (38.1) 9.2
Other items, net 303.2 88.2 215.0
Changes in certain assets and liabilities, net of effects
from acquisition/disposition of businesses 392.6 46.5 346.1
-------------------------------------------------
Net cash provided by operating activities 10,255.9 8,858.7 1,397.2
-------------------------------------------------
Cash Flows from Investing Activities
Net change in short-term investments (59.6) (416.7) 357.1
Additions to plant, property and equipment (7,446.5) (6,637.7) (808.8)
Proceeds from sale of plant, property and equipment 24.8 5.5 19.3
Investment in leased assets (269.0) (161.6) (107.4)
Proceeds from leasing activities 154.9 83.0 71.9
Acquisition of business, less cash acquired (61.9) (61.8) (.1)
Investment in notes receivable (7.2) - (7.2)
Proceeds from notes receivable 21.1 63.1 (42.0)
Investments in unconsolidated businesses, net (602.7) (833.0) 230.3
Proceeds from TCNZ share repurchase plan - 153.3 (153.3)
Proceeds from disposition of businesses 623.8 546.5 77.3
Other, net 41.3 (79.2) 120.5
-------------------------------------------------
Net cash used in investing activities (7,581.0) (7,338.6) (242.4)
-------------------------------------------------
Cash Flows from Financing Activities
Proceeds from borrowings 6,228.9 633.0 5,595.9
Principal repayments of borrowings and capital lease obligations (841.4) (901.4) 60.0
Early extinguishment of debt (775.0) - (775.0)
Net change in short-term borrowings with original maturities of three
months or less (3,912.9) 1,580.3 (5,493.2)
Dividends paid (2,379.5) (2,340.4) (39.1)
Proceeds from sale of common stock 559.0 710.7 (151.7)
Purchase of common stock for treasury (1,001.8) (919.8) (82.0)
Minority interest (676.3) (.1) (676.2)
Reduction in preferred stock of subsidiary - (10.0) 10.0
Net change in outstanding checks drawn on controlled disbursement accounts 38.4 (264.5) 302.9
Proceeds from sale of preferred stock of subsidiary - 65.5 (65.5)
-------------------------------------------------
Net cash used in financing activities (2,760.6) (1,446.7) (1,313.9)
-------------------------------------------------
Increase (decrease) in cash and cash equivalents (85.7) 73.4 (159.1)
Cash and cash equivalents, beginning of period 322.8 249.4 73.4
-------------------------------------------------
Cash and cash equivalents, end of period $ 237.1 $ 322.8 $ (85.7)
=================================================
</TABLE>
<PAGE>
- --------------------------------------------------------------------------
Telecom Sector - Financial Results (Adjusted Basis)
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/98 12/31/97 % Change 12/31/98 12/31/97 % Change
- ------------------------------------------------------------------------------------ ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,527.2 $ 3,354.3 5.2 $ 13,876.4 $ 13,250.5 4.7
Network access services 1,912.6 1,824.2 4.8 7,655.5 7,338.4 4.3
Long distance services 463.5 512.1 (9.5) 1,928.3 2,190.2 (12.0)
Ancillary services 493.5 493.7 - 1,948.1 1,894.8 2.8
Directory and information services 672.3 648.6 3.7 2,371.8 2,298.0 3.2
----------------------------- ------------------------------
Total Operating Revenues $ 7,069.1 $ 6,832.9 3.5 $ 27,780.1 $ 26,971.9 3.0
----------------------------- ------------------------------
Operating Expenses
Employee costs 1,880.9 1,864.0 .9 7,623.6 7,650.5 (.4)
Depreciation and amortization 1,343.2 1,297.3 3.5 5,231.8 5,028.9 4.0
Taxes other than income 329.6 333.0 (1.0) 1,404.4 1,435.5 (2.2)
Other operating expenses 1,785.5 1,687.6 5.8 6,379.2 6,093.0 4.7
----------------------------- ------------------------------
Total Operating Expenses $ 5,339.2 $ 5,181.9 3.0 $ 20,639.0 $ 20,207.9 2.1
----------------------------- ------------------------------
Operating Income $ 1,729.9 $ 1,651.0 4.8 $ 7,141.1 $ 6,764.0 5.6
Operating Income Margin 24.5% 24.2% 25.7% 25.1%
Operating Cash Flow $ 3,073.1 $ 2,948.3 4.2 $ 12,372.9 $ 11,792.9 4.9
Operating Cash Flow Margin 43.5% 43.1% 44.5% 43.7%
- ------------------------------------------------------------------------------------ -----------------------------------------
Operating Statistics
Switched access lines in service (in thousands) (1)
Residence 26,113 25,290 3.3
Business 14,997 14,111 6.3
Public 521 521 -
------------------------------
Total 41,631 39,922 4.3
==============================
Voice grade equivalents (in thousands) (2)
Business 30,817 25,724 19.8
Total 56,930 51,014 11.6
BRI ISDN lines (in thousands) (3) 519 436 19.0
Access minutes of use (in millions) 44,164 41,704 5.9 173,004 160,477 7.8
Employees per 10,000 access lines (4) 28.9 30.5 (5.2)
High Capacity and Digital Data
Data Revenue (in millions)
Wideband transport (5) 417.3 330.6 26.2 1,513.8 1,206.0 25.5
Fast packet and other (6) 137.8 93.3 47.7 501.9 318.7 57.5
Data solutions (7) 86.4 68.6 25.9 285.6 236.9 20.6
----------------------------- ------------------------------
Total Revenues* $ 641.5 $ 492.5 30.3 $ 2,301.3 $ 1,761.6 30.6
============================= ==============================
Data Volumes (in thousands)
DSO Equivalents (8) 16,625 12,019 38.3
------------------------------
PRI ISDN (9) 823 470 75.1
Frame Relay (9) 599 307 95.1
ATM Cell Relay (9) 465 111 318.9
</TABLE>
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. Each BRI line
consists of two 'B' channels that each operate at 64 kbps, and one 'D'
channel that serves as a signaling channel which directs the voice and 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 network integration 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.
<PAGE>
- -----------------------------------------------------------------------------
Global Wireless Sector - Proportionate Results
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except subscriber amounts)
3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/98 12/31/97 % Change 12/31/98 12/31/97 % Change
- ----------------------------------------------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Combined Global Wireless
Selected Financial Results
Revenues $ 1,271.1 $ 996.7 27.5 $ 4,574.2 $ 3,658.3 25.0
Operating income $ 195.1 $ 162.1 20.4 $ 760.2 $ 540.8 40.6
Operating cash flow (1) $ 406.1 $ 302.5 34.2 $ 1,499.4 $ 1,088.0 37.8
Selected Operating Data
Subscribers (000) 8,595 6,347 35.4 8,595 6,347 35.4
Subscriber net adds in period (000) 731 520 40.6 2,161 1,602 34.9
POPs (000) 180,477 175,674 2.7 180,477 175,674 2.7
- ----------------------------------------------------------------------------------- ------------------------------------------
Bell Atlantic Mobile (2)
Selected Financial Results
Revenues $ 923.4 $ 820.3 12.6 $ 3,481.3 $ 3,097.9 12.4
Operating income $ 201.7 $ 204.1 (1.2) $ 821.0 $ 739.5 11.0
Operating cash flow $ 342.9 $ 314.4 9.1 $ 1,349.8 $ 1,158.3 16.5
Selected Operating Data
Subscribers (000) 6,201 * 5,356 15.8 6,201 * 5,356 15.8
Subscriber net adds in period (000) 302 292 3.4 861 946 (9.0)
Controlled POPs (000) 57,190 56,987 .4 57,190 56,987 .4
- ----------------------------------------------------------------------------------- ------------------------------------------
PrimeCo Personal Communications (3)
Selected Financial Data
Revenues $ 71.5 $ 35.9 99.2 $ 236.6 $ 96.9 NM
Operating income $ (47.7) $ (58.7) 18.7 $ (200.8) $ (224.0) 10.4
Operating cash flow $ (20.1) $ (41.0) 51.0 $ (100.0) $ (159.4) 37.3
Selected Operating Data
Subscribers (000) 422 181 NM 422 181 NM
Subscriber net adds in period (000) 93 59 57.6 241 163 47.9
POPs (000) 28,487 28,487 - 28,487 28,487 -
- ----------------------------------------------------------------------------------- ------------------------------------------
International Wireless Operations (4)
Selected Financial Data
Revenues $ 276.2 $ 140.5 96.6 $ 856.3 $ 463.5 84.7
Operating income $ 41.1 $ 16.7 NM $ 140.0 $ 25.3 NM
Operating cash flow $ 83.3 $ 29.1 NM $ 249.6 $ 89.1 NM
Selected Operating Data
Subscribers (000) 1,972 810 NM 1,972 810 NM
Subscriber net adds in period (000) 336 169 98.8 1,059 493 NM
POPs (000) 94,800 90,200 5.1 94,800 90,200 5.1
</TABLE>
Footnotes:
(1) Operating cash flow equals operating income plus depreciation and
amortization
(2) Bell Atlantic Mobile results reflect consolidated results for all
controlled markets
(3) 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
* Excludes 14,880 subscribers in cellular property disposed of during the
period
NM Not meaningful
<PAGE>
- -----------------------------------------------------------------------------
Bell Atlantic Mobile Results
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except subscriber amounts)
3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/98 12/31/97 % Change 12/31/98 12/31/97 % Change
- --------------------------------------------------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bell Atlantic Mobile (1)
Selected Financial Results
Revenues $ 923.4 $ 820.3 12.6 $ 3,481.3 $ 3,097.9 12.4
Less: Incollect revenues 62.6 65.8 (4.9) 277.4 241.5 14.9
Less: Equipment revenues 65.5 39.9 64.2 182.9 134.9 35.6
----------------------------- -------------------------------
Service revenues $ 795.3 $ 714.6 11.3 $ 3,021.0 $ 2,721.5 11.0
----------------------------- -------------------------------
Operating income $ 201.7 $ 204.1 (1.2) $ 821.0 $ 739.5 11.0
Operating cash flow $ 342.9 $ 314.4 9.1 $ 1,349.8 $ 1,158.3 16.5
Operating cash flow margin (2) 43% 44% 45% 43%
Capital expenditures, excluding acquisitions 259.0 250.6 3.4 703.0 914.5 (23.1)
Selected Operating Data
Subscribers (000) 6,201 * 5,356 15.8 6,201 * 5,356 15.8
Penetration (3) 10.8% 9.4% 10.8% 9.4%
Subscriber net adds in period (000) 302 292 3.4 861 946 (9.0)
Controlled POPs (000) (4) 57,190 56,987 .4 57,190 56,987 .4
Owned POPs (000) (5) 55,306 55,101 .4 55,306 55,101 .4
Churn rate 1.99% 1.83% 1.85% 1.73%
Total revenue per subscriber $ 51.15 $ 52.85 (3.2) $ 50.84 $ 53.15 (4.3)
Service revenue per subscriber $ 44.06 $ 46.04 (4.3) $ 44.11 $ 46.69 (5.5)
Cash expense per subscriber $ 25.06 $ 25.78 (2.8) $ 24.40 $ 26.82 (9.0)
Acquisition cost per add (6) $ 184 $ 217 (15.2) $ 200 $ 222 (9.9)
</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
* Excludes 14,880 subscribers in cellular property disposed of during the
period
