<PAGE>
UNITED STATES
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: October 20, 1999
(Date of earliest event reported)
BELL ATLANTIC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8606 23-2259884
(State or other jurisdiction (Commission file number) (I.R.S. employer
of incorporation) identification no.)
1095 Avenue of the Americas
New York, New York 10036
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (212) 395-2121
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
------------
Attached as an exhibit is the press release and financial tables issued by Bell
Atlantic Corporation on October 20, 1999 announcing earnings for the third
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 October 20, 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: October 21, 1999
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
99 Press Release and financial tables, dated October 20, 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: Contacts:
October 20, 1999 Dave Frail
212-395-7726
[email protected]
Jim Crosson
212-395-2285
[email protected]
Bell Atlantic Grows Adjusted EPS 10.1%
In Third Quarter
Passes Milestones for Long Distance Entry,
Creates National Wireless Footprint
and Expands Data Capabilities
NEW YORK - Bell Atlantic (NYSE: BEL) announced today that third quarter 1999
adjusted earnings per share (EPS) of 76 cents rose 10.1 percent over 69 cents in
the third quarter of 1998, with adjusted net income for the quarter increasing
10 percent to $1.2 billion. During the quarter the company also successfully
executed several key strategic actions.
"This was a watershed quarter for Bell Atlantic," said Bell Atlantic Chairman
and CEO Ivan Seidenberg.
"Not only did we meet our financial and operational targets for the quarter,
but we also made major strides in transforming our company into one of the
world's leading communications enterprises.
"We filed with federal regulators for permission to offer long distance
service in New York, and just yesterday received the endorsement of the chairman
of the New York Public Service Commission. We also reached agreement with
Vodafone AirTouch to
--more--
<PAGE>
combine our U.S. wireless properties, accelerated our broadband deployment
plans, and, with our investment in Metromedia Fiber Network, strengthened our
ability to meet our existing large business customers' demand for broadband
services throughout the U.S. and in several international locations as well.
"All of these moves will enhance the strengths of the national-scale, full-
service powerhouse we are creating through our merger with GTE. We continued to
make progress on the merger during the quarter, and we continue to aim to
complete it in the first quarter of next year. The combined Bell Atlantic-GTE
will have the assets and capabilities to deliver more bandwidth - wireline or
wireless - and a broader range of services to more customers than anyone in the
communications industry."
Adjusted EPS for the first nine months of 1999 increased 10.3 percent, to
$2.24 from $2.03 in the first nine months of 1998. Adjusted nine-month net
income available to common shareholders rose 10.5 percent to $3.5 billion from
$3.2 billion in the first nine months of 1998.
Consolidated third-quarter revenues grew to $8.3 billion, 5.0 percent higher
than in the year-ago quarter, which continued the trend of improving revenue
growth since the beginning of the year. Proportionate revenues, which include
the company's share of revenues from its unconsolidated wireless investments,
rose 6.3 percent for the quarter. Nine-month consolidated and proportionate
revenues rose 4.6 and 6.2 percent respectively.
The company also continued to lead the industry in expense control, as its
adjusted consolidated expenses rose 4.3 percent for the quarter. These results
were achieved despite incurring some $40 million in expenses for service
restoration efforts following Hurricane Floyd, one of the worst natural
disasters ever to strike Bell Atlantic markets.
Quarterly EPS figures have been adjusted by two cents per share in third
quarter 1999 for costs related to Bell Atlantic-NYNEX merger integration, and by
70 cents per share in third quarter 1998 for charges primarily related to
completion of a retirement incentive program, write-downs of certain
international investments, and merger integration. Reported EPS for third
quarter 1999 was 74 cents per share compared to a loss of one cent per share in
third quarter 1998. Reported net income available to common
<PAGE>
shareowners for the quarter was $1.2 billion compared to a reported net loss of
$8 million in third quarter 1998.
Nine-month EPS figures have been adjusted for special items totaling four
cents per share in 1999 and 82 cents per share in 1998, with reported nine-month
1999 EPS of $2.20 increasing 81.8 percent compared to $1.21 in the first nine
months of 1998. Reported net income available to common shareowners for the
nine-month period was $3.5 billion in 1999 compared to $1.9 billion in 1998.
Highlights of the Domestic Telecom and Global Wireless segments, with related
adjusted and proportionate information, are discussed below.
Domestic Telecom Highlights
With strong growth in data services continuing to complement sustained
volumes for basic services, Domestic Telecom revenues increased 2.9 percent over
third quarter 1998, to $6.6 billion.
"Bell Atlantic took the necessary steps in the quarter to meet the rising
demand for bandwidth from customers in all of our markets," Seidenberg said.
"Besides doubling our targets for the most aggressive deployment of DSL
technology in the country, we expanded our product set to include high-speed
data services such as managed private networks, and we extended our reach
through our agreement with Metromedia Fiber Network."
Approximately 80 percent of Telecom revenue growth came from sales of data
services, with digital data revenues for the quarter, including those from high-
bandwidth, packet-switched and special access services and Bell Atlantic's
network integration business, increasing 24.8 percent over third quarter 1998 to
$749 million.
In the enterprise and general business markets:
. The number of data circuits, or "DSO equivalents" in service (digital, high-
bandwidth and packet-switched services as measured in 64-kilobit voice-grade
equivalents) increased 42.2 percent over third quarter 1998.
. Bell Atlantic reached a strategic agreement with Metromedia Fiber Network
(MFN) to invest approximately $1.7 billion in the company and acquire $550
<PAGE>
million of capacity on its fiber optic infrastructure. The agreement will
accelerate MFN's infrastructure build-out and speed the deployment of Bell
Atlantic's data services. MFN is a provider of dedicated fiber optic networks
in major U.S. and certain international metropolitan markets, and the
transaction gives Bell Atlantic access to more than 7,000 planned route miles
in metropolitan markets in the U.S. and Europe.
. Bell Atlantic's Data Solutions Group (DSG) increased revenues 25.3 percent
over the prior-year period and continued to expand its portfolio of services.
To enhance its ability to design, install and maintain complex data networks,
DSG agreed to acquire a leading network integrator, Metro/Metropolitan
Technologies. DSG also expanded the reach of its local Frame Relay services
through an agreement with Intermedia Communications, and won a unique
contract to provide a complete set of Internet solutions to Information-
Highway.com, an Internet service provider (ISP) based in British Columbia,
Canada.
. Bell Atlantic ended the quarter with 577,000 basic rate Integrated Services
Digital Network (ISDN) lines in service, up 14.9 percent from third quarter
1998, and the number of primary rate ISDN channels in service increased 50.6
percent to nearly 1.1 million.
In the consumer market:
. In July, Bell Atlantic accelerated deployment of its Infospeed(sm) DSL
service in major metropolitan areas in the Eastern United States, with a
target of making 17 million customer lines DSL-capable by the end of this
year. The company has equipped nearly half of the central offices necessary
to meet that goal. The company and 3Com also reached a landmark retail
agreement to offer consumers one-stop shopping for DSL service - "Broadband
In a Box" --in CompUSA, Staples and other retail outlets.
. By the end of the quarter, Bell Atlantic had increased the number of its
agreements with Internet Service Providers (ISPs) to package Bell Atlantic's
Infospeed DSL service with their Internet access services to 65.
. The number of additional lines, many of which are used for Internet access
and home fax machines, grew approximately 15 percent over third quarter 1998.
Growth in volumes for basic services continued at a steady pace, and
reflected continued acceleration in demand for data connections. The number of
access lines in service increased 3.4 percent to 42.7 million, and the number of
voice-grade equivalents
<PAGE>
(access lines plus data circuits) rose 13.6 percent in the quarter to 62.8
million. Business VGEs grew 23 percent to 36.1 million. Access minutes of use
rose 4.2 percent.
Bell Atlantic also continued to see solid growth in demand from consumers
for value-added services. New combinations and price plans helped increase
sales of packages of value-added services by nearly 76 percent over third
quarter of 1998, with the number of packages in service increasing to more than
1.7 million. Caller ID revenues for the quarter increased 31 percent compared
to third quarter 1998, as the number of subscribers increased to 7.4 million,
with penetration approaching 28 percent. Home Voice Mail revenues rose 9.6
percent.
In the network services market, special access revenues for the period rose
24.8 percent to $493.1 million. By the end of the third quarter, Bell Atlantic
was providing approximately 1.1 million access lines on a wholesale basis to
other local exchange service providers.
Adjusted quarterly operating expenses for Domestic Telecom of $5.0 billion
increased only 2.4 percent over third quarter 1998 despite the impact of
Hurricane Floyd, payments to competitive local exchange carriers (CLECs) and
continued investment in long distance and data capabilities. Cash expenses
increased only 1.2 percent.
Global Wireless Highlights
Global Wireless Group continued its industry-leading performance in the
face of worldwide competition.
"The businesses that make up our Global Wireless Group are among the
strongest in the U.S. and the world," Seidenberg said. "Not only did they move
well past the 10 million mark for subscribers during the quarter, their
disciplined approach to cost management enabled them to increase their
contribution to Bell Atlantic's earnings growth. In fact, at a time when
wireless companies are seeing margins erode, Bell Atlantic Mobile increased its
margins quarter-to-quarter. We will be well positioned to benefit fully from
the full national scale and scope we will gain from our combination with
Vodafone AirTouch and our merger with GTE."
<PAGE>
The number of proportionate subscribers in the quarter rose to 10.6
million, up 33.9 percent over third quarter 1998. Proportionate net customer
additions in the quarter totaled 608,000, approximately 59,000 more than in
third quarter 1998.
The Group's total proportionate revenues increased 26.3 percent to $1.5
billion. Proportionate operating income reached $337 million, an increase of
39.8 percent over third quarter 1998, with proportionate operating cash flow
increasing 31.1 percent to $552 million.
Bell Atlantic Mobile (BAM) added 267,000 net new subscribers in the
quarter, nearly 30 percent more than in third quarter 1998. BAM ended the
quarter with 6.9 million customers, up 16.2 percent from third quarter 1998.
Domestic highlights:
. Bell Atlantic and Vodafone AirTouch plc announced during the quarter a
definitive agreement to combine their U.S wireless assets into a new wireless
business with a national footprint, a single brand and a common digital
technology. Including GTE's wireless assets, the new business will serve
approximately 20 million wireless and 3.5 million paging customers throughout
the U.S. Its wireless footprint will cover more than 90 percent of the U.S.
population and 49 of the top 50 U.S. wireless markets.
. BAM total revenue reached nearly $1.1 billion in the quarter, an increase of
18.4 percent over third quarter 1998. Total revenue per subscriber increased
2.3 percent, to $53. BAM's cost controls contributed to operating cash flow
margins of 47 percent, among the best in the industry.
. Nearly one-third of BAM's customers now subscribe to digital services, and
they account for two-thirds of busy-hour usage on the company's network. Some
70 percent of digital subscribers added during the quarter were new BAM
customers.
. The J.D. Power and Associates 1999 U.S. Wireless Customer Satisfaction
Study(sm) ranked BAM highest in overall customer satisfaction in the Boston
market for the fourth year in a row and in the New York market for the second
year in a row. The study cited BAM's superior call quality and customer
service as the main reasons for its high ratings.
. During the quarter, PrimeCo Personal Communications grew its customer base to
1.3 million, 78 percent above third quarter 1998 levels, and launched service
in Ocala, Florida and Corpus Christi and Rio Grande Valley, Texas. PrimeCo
also enhanced its
<PAGE>
rate plans by lowering PrimeTravel(sm) roaming rates and
bundling long-distance services.
. Total PrimeCo revenues for the quarter grew 60 percent over third quarter
1998, to $209 million, with average monthly revenue per subscriber of $50.
PrimeCo also reported its first positive quarterly operating cash flow,
increasing it $60 million over third quarter 1998.
Bell Atlantic's international wireless portfolio ended the quarter with 3.1
million proportionate subscribers, up 89.1 percent over third quarter 1998.
Proportionate net subscriber additions at the international investments totaled
318,000 for the quarter, 9.3 percent higher than in the prior-year period.
International proportionate revenues for the quarter rose 47.0 percent to
$369 million. Proportionate operating income from international wireless
investments increased 98.0 percent over third quarter 1998 to $97 million, with
proportionate operating cash flow growing 87.1 percent to $131 million.
International highlights:
. Omnitel Pronto Italia will release results tomorrow. Based on recent
performance, the company is expected to reach nine million customers early in
the fourth quarter. During the third quarter, the company launched Omnitel
2000, the world's first wireless Web portal that gives any wireless, wired,
or Web user the option of using the portal's voice recognition platform to
navigate the Internet.
. Grupo Iusacell in Mexico passed the one-million-subscriber milestone, as its
customer base grew 80 percent over the prior-year period. EBITDA climbed 50
percent over third quarter 1998, with EBITDA margins increasing from 30 to 36
percent. Iusacell implemented digital service in all of its cell sites,
rolled out a single cellular billing platform, and launched flat-rate pricing
through its One Single Rate plan.
. STET Hellas in Greece also ended the period with more than one million
subscribers, adding nearly 107,000 in the quarter. The company's networks
withstood recent earthquakes in Greece, processing calls even as volumes
peaked at 2,300 percent above normal levels.
. EuroTel Praha, Bell Atlantic's Czech operation, closed out the quarter with
858,000 customers.
* * *
<PAGE>
Bell Atlantic is at the forefront of the new communications and information
industry. With more than 43 million telephone access lines and more than 10
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.
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. The following important factors could affect future
results and could cause those results to differ materially from those expressed
in the forward-looking statements: materially adverse changes in economic
conditions in the markets served by us or by companies in which we have
substantial investments; material changes in available technology; the final
outcome of federal, state, and local regulatory initiatives and proceedings,
including arbitration proceedings, and judicial review of those initiatives and
proceedings, pertaining to, among other matters, the terms of interconnection,
access charges, universal service, and unbundled network element and resale
rates; the extent, timing, success, and overall effects of competition from
others in the local telephone and toll service markets; the timing and
profitability of our entry into the in-region long distance market; the success
and expense of our remediation efforts and those of our suppliers, customers,
joint ventures, noncontrolled investments, and interconnecting carriers in
achieving Year 2000 compliance; the timing of, and regulatory or other
conditions associated with, the completion of the merger with GTE and our
ability to combine operations and obtain revenue enhancements and cost savings
following the merger; and the timing of, and regulatory or other conditions
associated with, the completion of the wireless transaction with Vodafone
AirTouch, and the ability of the new wireless enterprise to combine operations
and obtain revenue enhancements and cost savings.
###
<PAGE>
BELL ATLANTIC CORPORATION
- --------------------------------------------------
Consolidated Statements of Income - Reported Basis
- --------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
3 Mos. Ended 3 Mos. Ended 9 Mos. Ended 9 Mos. Ended
Unaudited 9/30/99 9/30/98 % Change 9/30/99 9/30/98 % Change
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,623 $ 3,510 3.2 $ 10,684 $ 10,304 3.7
Network access services 1,973 1,893 4.2 5,905 5,742 2.8
Long distance services 455 489 (7.0) 1,370 1,465 (6.5)
Ancillary services 539 530 1.7 1,559 1,507 3.5
Directory services 500 485 3.1 1,666 1,618 3.0
Wireless services 1,182 980 20.6 3,292 2,780 18.4
Other services 32 23 39.1 90 73 23.3
--------------------------------------------------------------------------------------
Total Operating Revenues 8,304 7,910 5.0 24,566 23,489 4.6
--------------------------------------------------------------------------------------
Operating Expenses
Employee costs 2,083 2,792 (25.4) 6,152 7,212 (14.7)
Depreciation and amortization 1,557 1,470 5.9 4,602 4,326 6.4
Other operating expenses 2,546 2,518 1.1 7,469 7,156 4.4
--------------------------------------------------------------------------------------
Total Operating Expenses 6,186 6,780 (8.8) 18,223 18,694 (2.5)
--------------------------------------------------------------------------------------
Operating Income 2,118 1,130 87.4 6,343 4,795 32.3
Income (loss) from
unconsolidated businesses 53 (459) (111.5) 124 (462) (126.8)
Other income and (expense), net 12 43 (72.1) 35 99 (64.6)
Interest expense 309 359 (13.9) 939 1,032 (9.0)
Provision for income taxes 700 362 93.4 2,074 1,470 41.1
--------------------------------------------------------------------------------------
Income (Loss) from
Continuing Operations 1,174 (7) - 3,489 1,930 80.8
Extraordinary item
Early extinguishment of debt,
net of tax - (1) - (6) (24) (75.0)
--------------------------------------------------------------------------------------
Net Income (Loss) 1,174 (8) 3,483 1,906 82.7
Redemption of investee
preferred stock - - - (2)
--------------------------------------------------------------------------------------
Net Income (Loss) Available to
Common Shareowners $ 1,174 $ (8) - $ 3,483 $ 1,904 82.9
======================================================================================
Diluted Earnings (Loss) per Share $ .74 $ (.01) - $ 2.20 $ 1.2 81.8
Weighted average number of
common shares-assuming
dilution (in millions) 1,585 1,553 1,583 1,577
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.
</TABLE>
1
<PAGE>
BELL ATLANTIC CORPORATION
- -------------------------
Earnings Reconciliations
- -------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
3 Mos. Ended 9/30/99 3 Mos. Ended 9/30/98
Unaudited Net Income Diluted EPS Net Income Diluted EPS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported Earnings (Loss) $ 1,174 $ .74 $ (8) $ (.01)
Adjustments:
Transition costs 27 .02 31 .02
Special pension enhancement - - 502 .32
Special charges - - 567 .36
-------------------------------------------------------------------------
Adjusted Earnings $ 1,201 $ .76 $ 1,092 $ .69
=========================================================================
Adjusted Growth 10.0% 10.1%
9 Mos. Ended 9/30/99 9 Mos. Ended 9/30/98
Unaudited Net Income Diluted EPS Net Income Diluted EPS
- ---------------------------------------------------------------------------------------------------------
Reported Earnings $ 3,483 $ 2.20 $ 1,904 $ 1.21
Adjustments:
Transition costs 59 .04 65 .04
Special pension enhancement - - 670 .42
Special charges - - 567 .36
-------------------------------------------------------------------------
Adjusted Earnings $ 3,542 $ 2.24 $ 3,206 $ 2.03
=========================================================================
Adjusted Growth 10.5% 10.3%
</TABLE>
2
<PAGE>
BELL ATLANTIC CORPORATION
- -----------------------------------------------------------------
Consolidated Statements of Income - Adjusted Basis - 3rd Quarter
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
3 Months Ended 3 Months Ended
Unaudited 9/30/99 9/30/98 % Change
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $ 3,623 $ 3,510 3.2
Network access services 1,973 1,893 4.2
Long distance services 455 489 (7.0)
Ancillary services 539 530 1.7
Directory services 500 485 3.1
Wireless services 1,182 980 20.6
Other services 32 23 39.1
------------------------------------------
Total Operating Revenues 8,304 7,910 5.0
------------------------------------------
Operating Expenses
Employee costs 2,065 /1/ 2,012 /4/ 2.6
Depreciation and amortization 1,557 1,470 5.9
Other operating expenses 2,519 /2/ 2,406 /5/ 4.7
------------------------------------------
Total Operating Expenses 6,141 5,888 4.3
------------------------------------------
Operating Income 2,163 2,022 7.0
Income from unconsolidated businesses 53 34 /6/ 55.9
Other income and (expense), net 12 (2)/6/ -
Interest expense 309 312 /6/ (1.0)
Provision for income taxes 718 /3/ 649 /7/ 10.6
------------------------------------------
Income from Continuing Operations 1,201 1,093 9.9
Extraordinary item
Early extinguishment of debt, net of tax - (1) -
------------------------------------------
Net Income 1,201 1,092 10.0
Redemption of investee preferred stock - - -
------------------------------------------
Net Income Available to
Common Shareowners $ 1,201 $ 1,092 10.0
==========================================
Diluted Earnings per Share $ .76 $ .69 10.1
Weighted average number of common
common shares-assuming dilution (in millions) 1,585 1,574
</TABLE>
Footnotes:
3rd Quarter 99
(1) Excludes $18 million related to transition costs
(2) Excludes $27 million related to transition costs
(3) Excludes tax effects of items (1) and (2) above
3rd Quarter 98
(4) Excludes $777 million related to special pension enhancement and
contracts and $3 million related to transition costs
(5) Excludes $49 million related to transition costs, $39 million related to
international investments and $24 million related to video & other
(6) Excludes $485 million related to international investments and $10
million related to video & other
(7) Excludes tax effects of items (4), (5) and (6) above
3
<PAGE>
BELL ATLANTIC CORPORATION
- --------------------------------------------------------
Consolidated Statements of Income - Adjusted Basis - YTD
- --------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
9 Months Ended 9 Months Ended
Unaudited 9/30/99 9/30/98 % Change
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $ 10,684 $ 10,304 3.7
Network access services 5,905 5,742 2.8
Long distance services 1,370 1,465 (6.5)
Ancillary services 1,559 1,507 3.5
Directory services 1,666 1,618 3.0
Wireless services 3,292 2,780 18.4
Other services 90 73 23.3
---------------------------------------------
Total Operating Revenues 24,566 23,489 4.6
---------------------------------------------
Operating Expenses
Employee costs 6,120/1/ 6,152/4/ (.5)
Depreciation and amortization 4,602 4,326 6.4
Other operating expenses 7,404/2/ 6,995/5/ 5.8
---------------------------------------------
Total Operating Expenses 18,126 17,473 3.7
---------------------------------------------
Operating Income 6,440 6,016 7.0
Income from unconsolidated businesses 124 31/6/ -
Other income and (expense), net 35 54/6/ (35.2)
Interest expense 939 985/6/ (4.7)
Provision for income taxes 2,112/3/ 1,884/7/ 12.1
---------------------------------------------
Income from Continuing Operations 3,548 3,232 9.8
Extraordinary item
Early extinguishment of debt, net of tax (6) (24) (75.0)
---------------------------------------------
Net Income 3,542 3,208 10.4
Redemption of investee preferred stock - (2) -
---------------------------------------------
Net Income Available to
Common Shareowners $ 3,542 $ 3,206 10.5
=============================================
Diluted Earnings per Share $ 2.24 $ 2.03 10.3
Weighted average number of common
common shares-assuming dilution (in millions) 1,583 1,577
</TABLE>
Footnotes:
9 Mos. '99 YTD
(1) Excludes $32 million related to transition costs
(2) Excludes $65 million related to transition costs
(3) Excludes tax effects of (1) and (2) above
9 Mos. '98 YTD
(4) Excludes $1,052 million related to special pension enhancement and
contracts and $8 million related to transition costs
(5) Excludes $98 million related to transition costs, $39 million related to
international investments and $24 million related to video & other
(6) Excludes $485 million related to international investments and $10 million
related to video & other
(7) Excludes tax effects of items (4), (5) and (6) above
4
<PAGE>
BELL ATLANTIC CORPORATION
- -------------------------------------------
Selected Financial and Operating Statistics
- -------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Unaudited 9/30/99 9/30/98 9/30/99 9/30/98
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt ratio-end of period 57.2% 61.5% 57.2% 61.5%
Return on average common equity-adjusted basis 31.3% 31.7% 32.8% 31.8%
Return on average assets-adjusted basis 8.2% 7.9% 8.4% 7.8%
Book value per common share $ 9.99 $ 8.12 $ 9.99 $ 8.12
Cash dividends declared per common share $ .385 $ .385 $ 1.155 $ 1.155
Common shares outstanding (in millions)
End of period 1,553 1,552 1,553 1,552
Capital expenditures
Domestic Telecom $ 1,894 $ 1,685 $ 4,968 $ 4,766
Domestic Cellular 252 178 705 443
Other 30 74 143 212
-------------------------------------------------------------------
Total $ 2,176 $ 1,937 $ 5,816 $ 5,421
===================================================================
Employees
Domestic Telecom 128,039 124,971 128,039 124,971
Other 14,777 14,779 14,777 14,779
-------------------------------------------------------------------
Total 142,816 139,750 142,816 139,750
===================================================================
</TABLE>
5
<PAGE>
BELL ATLANTIC CORPORATION
- ---------------------------
Consolidated Balance Sheets
- ---------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
Unaudited 9/30/1999 12/31/1998 $ Change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 264 $ 237 $ 27
Short-term investments 35 786 (751)
Accounts receivable, net 6,929 6,560 369
Inventories 624 566 58
Prepaid expenses 710 522 188
Other 335 411 (76)
---------------------------------------------------------------------------
Total current assets 8,897 9,082 (185)
---------------------------------------------------------------------------
Plant, property and equipment 87,739 83,064 4,675
Less accumulated depreciation 49,380 46,248 3,132
---------------------------------------------------------------------------
38,359 36,816 1,543
---------------------------------------------------------------------------
Investments in unconsolidated businesses 5,919 4,276 1,643
Other assets 5,847 4,970 877
---------------------------------------------------------------------------
Total Assets $ 59,022 $ 55,144 $ 3,878
===========================================================================
Liabilities and Shareowners' Investment
Current liabilities
Debt maturing within one year $ 3,286 $ 2,988 $ 298
Accounts payable and accrued liabilities 6,550 6,105 445
Other 1,533 1,438 95
---------------------------------------------------------------------------
Total current liabilities 11,369 10,531 838
---------------------------------------------------------------------------
Long-term debt 17,463 17,646 (183)
---------------------------------------------------------------------------
Employee benefit obligations 9,661 10,384 (723)
---------------------------------------------------------------------------
Deferred credits and other liabilities
Deferred income taxes 3,469 2,254 1,215
Unamortized investment tax credits 203 222 (19)
Other 697 551 146
---------------------------------------------------------------------------
4,369 3,027 1,342
---------------------------------------------------------------------------
Minority interest, including a portion subject to
redemption requirements 450 330 120
---------------------------------------------------------------------------
Preferred stock of subsidiary 201 201 -
---------------------------------------------------------------------------
Shareowners' investment
Common stock 158 158 -
Contributed capital 13,533 13,368 165
Reinvested earnings 2,757 1,371 1,386
Accumulated other comprehensive income (loss) 174 (714) 888
---------------------------------------------------------------------------
16,622 14,183 2,439
Less common stock in treasury, at cost 632 593 39
Less deferred compensation -
employee stock ownership plans 481 565 (84)
---------------------------------------------------------------------------
Total shareowners' investment 15,509 13,025 2,484
---------------------------------------------------------------------------
Total Liabilities and Shareowners' Investment $ 59,022 $ 55,144 $ 3,878
===========================================================================
</TABLE>
6
<PAGE>
BELL ATLANTIC CORPORATION
- -----------------------------------------------
Condensed Consolidated Statements of Cash Flows
- -----------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
9 Months Ended 9 Months Ended
Unaudited 9/30/99 9/30/98 $ Change
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Income $ 3,483 $ 1,906 $ 1,577
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,602 4,326 276
Extraordinary items, net of tax 6 24 (18)
(Income)/loss from unconsolidated businesses (124) 462 (586)
Dividends received from unconsolidated businesses 84 129 (45)
Amortization of unearned lease income (110) (87) (23)
Deferred income taxes, net 632 (19) 651
Investment tax credits (19) (22) 3
Other items, net 122 232 (110)
Changes in certain assets and liabilities, net of
effects from acquisition/disposition of businesses (1,271) 399 (1,670)
-------------------------------------------------
Net cash provided by operating activities 7,405 7,350 55
-------------------------------------------------
Cash Flows From Investing Activities
Net change in short-term investments 742 560 182
Additions to plant, property, and equipment (5,816) (5,421) (395)
Investments in unconsolidated businesses, net (872) (529) (343)
Proceeds from disposition of businesses 612 21 591
Other investing activities, net (128) (39) (89)
-------------------------------------------------
Net cash used in investing activities (5,462) (5,408) (54)
-------------------------------------------------
Cash Flows From Financing Activities
Proceeds from borrowings 278 6,105 (5,827)
Principal repayments of borrowings and capital lease obligations (716) (506) (210)
Early extinguishment of debt (257) (650) 393
Net change in short-term borrowings with
original maturities of three months or less 456 (4,562) 5,018
Proceeds from financing of cellular assets 380 - 380
Dividends paid (1,801) (1,784) (17)
Proceeds from sale of common stock 283 424 (141)
Purchase of common stock for treasury (633) (784) 151
Other financing activities, net 94 113 (19)
-------------------------------------------------
Net cash used in financing activities (1,916) (1,644) (272)
-------------------------------------------------
Increase in cash and cash equivalents 27 298 (271)
Cash and cash equivalents, beginning of period 237 323 (86)
-------------------------------------------------
Cash and cash equivalents, end of period $ 264 $ 621 $ (357)
=================================================
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
BELL ATLANTIC CORPORATION
- ----------------------------------------------
Domestic Telecom -- Selected Financial Results
- ----------------------------------------------
(Dollars in Millions)
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Unaudited 9/30/99 9/30/98 % Change 9/30/99 9/30/98 % Change
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,648 $ 3,527 3.4 $ 10,752 $ 10,353 3.9
Network access services 1,973 1,893 4.2 5,905 5,743 2.8
Long distance services 455 489 (7.0) 1,370 1,465 (6.5)
Ancillary services 567 549 3.3 1,630 1,556 4.8
-------------------------------------------------------------------------------------
Total Operating Revenues 6,643 6,458 2.9 19,657 19,117 2.8
-------------------------------------------------------------------------------------
Operating Expenses
Employee costs 1,846 1,806 2.2 5,441 5,491 (0.9)
Depreciation and amortization 1,388 1,313 5.7 4,087 3,862 5.8
Other operating expenses 1,792 1,788 0.2 5,152 5,150 -
-------------------------------------------------------------------------------------
Total Operating Expenses 5,026 4,907 2.4 14,680 14,503 1.2
-------------------------------------------------------------------------------------
Operating Income $ 1,617 $ 1,551 4.3 $ 4,977 $ 4,614 7.9
Operating Income Margin 24.3% 24.0% 25.3% 24.1%
Operating Cash Flow $ 3,005 $ 2,864 4.9 $ 9,064 $ 8,476 6.9
Operating Cash Flow Margin 45.2% 44.3% 46.1% 44.3%
BELL ATLANTIC CORPORATION
- ---------------------------------------
Directory -- Selected Financial Results
- ---------------------------------------
(Dollars in Millions)
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Unaudited 9/30/99 9/30/98 % Change 9/30/99 9/30/98 % Change
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues $ 501 $ 486 3.1 $ 1,669 $ 1,622 2.9
Operating Expenses
Employee costs 78 82 (4.9) 237 251 (5.6)
Depreciation and amortization 8 9 (11.1) 27 26 3.8
Other operating expenses 160 164 (2.4) 542 548 (1.1)
-------------------------------------------------------------------------------------
Total Operating Expenses 246 255 (3.5) 806 825 (2.3)
-------------------------------------------------------------------------------------
Operating Income $ 255 $ 231 10.4 $ 863 $ 797 8.3
Operating Income Margin 50.9% 47.5% 51.7% 49.1%
Operating Cash Flow $ 263 $ 240 9.6 $ 890 $ 823 8.1
Operating Cash Flow Margin 52.5% 49.4% 53.3% 50.7%
</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 September 30, 1999.
Intercompany and intersegment transactions have not been eliminated.
8
<PAGE>
BELL ATLANTIC CORPORATION
- ---------------------------------------
Domestic Telecom - Operating Statistics
- ---------------------------------------
<TABLE>
<CAPTION>
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Unaudited 9/30/99 9/30/98 % Change 9/30/99 9/30/98 % Change
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Statistics
Switched access lines in service (000)(1)
Residence 26,738 25,946 3.1 26,738 25,946 3.1
Business 15,484 14,848 4.3 15,484 14,848 4.3
Public 517 522 (1.0) 517 522 (1.0)
---------------------------------------------------------------------------------------
Total 42,739 41,316 * 3.4 42,739 41,316 * 3.4
---------------------------------------------------------------------------------------
Voice grade equivalents (000) (2)
Residence 26,738 25,946 3.1 26,738 25,946 3.1
Business 36,053 29,322 23.0 36,053 29,322 23.0
---------------------------------------------------------------------------------------
Total 62,791 55,268 13.6 62,791 55,268 13.6
---------------------------------------------------------------------------------------
BRI ISDN lines (000) (3) 577 502 14.9 577 502 14.9
Access minutes of use (M) 45,737 43,883 4.2 135,595 128,841 5.2
Employees per 10,000 access lines (4) 28.6 29.0 (1.4) 28.6 29.0 (1.4)
High Capacity and Digital Data
Data Revenue ($ in millions)
Wideband transport (5) $ 472 $ 382 23.6 $ 1,350 $ 1,092 23.6
Fast packet and other (6) 183 143 28.0 508 377 34.7
Data solutions (7) 94 75 25.3 240 199 20.6
---------------------------------------------------------------------------------------
Total Revenues $ 749 $ 600 24.8 $ 2,098 $ 1,668 25.8
=======================================================================================
Data Volumes (000)
DSO Equivalents (8) 21,608 15,192 42.2 21,608 15,192 42.2
---------------------------------------------------------------------------------------
PRI ISDN (9) 1,086 721 50.6 1,086 721 50.6
Frame Relay (9) 841 509 65.2 841 509 65.2
ATM Cell Relay (9) 776 404 92.1 776 404 92.1
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 & 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=24 DSOs, DS3=672 DSOs, OC3=2,106 DSOs, OC12=8,424 DSOs, OC48=33,696 DSOs
(9) Volumes expressed as DSO equivalents
*Restated from amounts previously disclosed
</TABLE>
9
<PAGE>
BELL ATLANTIC CORPORATION
- ---------------------------------------
Global Wireless - Proportionate Results
- ---------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except subscriber amounts)
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Unaudited 9/30/99 9/30/98 % Change 9/30/99 9/30/98 % Change
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Combined Global Wireless
Selected Financial Results
Revenues $ 1,535 $ 1,215 26.3 $ 4,238 $ 3,305 28.2
Operating income $ 337 $ 241 39.8 $ 779 $ 565 37.9
Operating cash flow (1) $ 552 $ 421 31.1 $ 1,403 $ 1,094 28.2
Selected Operating Data
Subscribers (000) 10,551 7,878 33.9 10,551 7,878 33.9
Subscriber net adds in period (000) 608 549 10.7 1,710 1,429 19.7
POPs (000) 183,783 180,497 1.8 183,783 180,497 1.8
- ------------------------------------------------------------------------------------------------------------------------------
Bell Atlantic Mobile (2)
Selected Financial Results
Revenues $ 1,069 $ 903 18.4 $ 3,003 $ 2,558 17.4
Operating income $ 262 $ 234 12.0 $ 650 $ 619 5.0
Operating cash flow $ 412 $ 370 11.4 $ 1,090 $ 1,007 8.2
Selected Operating Data
Subscribers (000) 6,873 5,914 16.2 6,873 5,914 16.2
Subscriber net adds in period (000) 267 207 29.0 671 558 20.3
Controlled POPs (000) 57,849 57,190 1.2 57,849 57,190 1.2
- ------------------------------------------------------------------------------------------------------------------------------
PrimeCo Personal Communications (3)
Selected Financial Data
Revenues $ 97 $ 61 59.0 $ 284 $ 166 71.1
Operating income $ (22) $ (42) 47.6 $ (91) $ (153) 40.5
Operating cash flow $ 9 $ (19) 147.4 $ (17) $ (80) 78.8
Selected Operating Data
Subscribers (000) 587 329 78.4 587 329 78.4
Subscriber net adds in period (000) 23 51 (54.9) 174 149 16.8
POPs (000) 28,634 28,487 0.5 28,634 28,487 0.5
- ------------------------------------------------------------------------------------------------------------------------------
International Wireless Operations (4)
Selected Financial Data
Revenues $ 369 $ 251 47.0 $ 951 $ 581 63.7
Operating income $ 97 $ 49 98.0 $ 220 $ 99 122.2
Operating cash flow $ 131 $ 70 87.1 $ 330 $ 167 97.6
Selected Operating Data
Subscribers (000) 3,091 1,635 89.1 3,091 1,635 89.1
Subscriber net adds in period (000) 318 291 9.3 865 722 19.8
POPs (000) 97,300 94,820 2.6 97,300 94,820 2.6
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
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 September 30, 1999.
Intercompany and intersegment transactions have not been eliminated.
</TABLE>
10
<PAGE>
BELL ATLANTIC CORPORATION
- ----------------------------------------
Bell Atlantic Mobile - Operating Results
- ----------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except subscriber amounts)
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Unaudited 9/30/99 9/30/98 % Change 9/30/99 9/30/98 % Change
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bell Atlantic Mobile (1)
Selected Financial Results
Revenues $ 1,069 $ 903 18.4 $ 3,003 $ 2,558 17.4
Less: Incollect revenues $ 99 $ 81 22.2 $ 255 $ 214 19.2
Less: Equipment revenues $ 87 $ 40 117.5 $ 233 $ 118 97.5
---------------------------------------------------------------------------------
Service revenues $ 883 $ 782 12.9 $ 2,515 $ 2,226 13.0
---------------------------------------------------------------------------------
Operating income $ 262 $ 234 12.0 $ 650 $ 619 5.0
Operating cash flow $ 412 $ 370 11.4 $ 1,090 $ 1,007 8.2
Operating cash flow margin (2) 47% 47% 43% 45%
Capital expenditures, $ 252 $ 178 41.6 $ 705 $ 443 59.1
excluding acquisitions
Selected Operating Data
Subscribers (000) 6,873 5,914 16.2 6,873 5,914 16.2
Penetration (3) 11.9% 10.3% 11.9% 10.3%
Subscriber net adds in period (000) (4) 267 207 29.0 671 558 20.3
Controlled POPs (000) (5) 57,849 57,190 1.2 57,849 57,190 1.2
Owned POPs (000) (6) 55,952 55,306 1.2 55,952 55,306 1.2
Churn rate 1.93% 1.82% 1.91% 1.80%
Total revenue per subscriber $ 52.93 $ 51.76 2.3 $ 51.27 $ 50.72 1.1
Service revenue per subscriber $ 43.72 $ 44.82 (2.5) $ 42.93 $ 44.13 (2.7)
Cash expense per subscriber $ 23.32 $ 23.61 (1.2) $ 24.33 $ 24.17 0.7
Acquisition cost per add (7) $ 172 $ 203 (15.3) $ 184 $ 206 (10.7)
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) Third quarter and year to date subscriber net additions include acquired subscribers of 33 and 17 for 1999 and 1998,
respectively
(5) Controlled POPs represent the total number of POPs for which Bell Atlantic Mobile has operating control
(6) Owned POPs represent Bell Atlantic Mobile percentage ownership in all licensed markets
(7) Acquisition cost per add includes commissions and loss on handsets.
Third quarter 1999 excludes the favorable effect of a one-time year-to-date adjustment.
Certain reclassifications have been made to prior results to conform to current presentation
</TABLE>
11
