<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: July 21, 1999
Exact name of registrant
as specified in its charter: BELL ATLANTIC CORPORATION
Commission File Number: 1-8606
State of Incorporation: Delaware
I.R.S. Employer Identification No.: 23-2259884
Address of principal
executive offices: 1095 Avenue of the Americas
New York, New York
Zip Code 10036
Registrant's telephone number,
including area code: (212) 395-2121
Former name or former address,
if changed since last report: Not applicable
<PAGE>
Item 5. Other Events
------------
Attached as an exhibit is the press release and financial tables issued by Bell
Atlantic Corporation on July 21, 1999 announcing earnings for the second 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 July 21, 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: July 22, 1999
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
99 Press Release and financial tables, dated July 21, 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:
July 21, 1999 Dave Frail
212-395-7726
[email protected]
Jim Crosson
212-395-2285
[email protected]
Bell Atlantic Announces Double-Digit Earnings Growth
For Second Quarter 1999
Wireless, Data Growth Drives 10.3% Increase in Adjusted EPS
NEW YORK -- Strong growth in data and wireless services and sustained
demand for basic telecommunications combined to increase Bell Atlantic's (NYSE:
BEL) adjusted second-quarter earnings per diluted share (EPS) to 75 cents, up
10.3 percent from 68 cents in second quarter 1998. Second-quarter net income
available to common shareowners increased 11 percent to $1.2 billion from second
quarter 1998 net income of $1.1 billion.
For the first half of 1999, adjusted EPS rose to $1.48, an increase of
10.4 percent over $1.34 in the first half of 1998. Adjusted net income available
to common shareholders rose to $2.3 billion, 10.7 percent higher than $2.1
billion in the first half of 1998.
Consolidated second-quarter revenues grew 4.6 percent compared to the
year-ago quarter, to $8.3 billion. Absent a one-time rebate in Massachusetts,
consolidated revenue growth would have been 4.9 percent. Proportionate revenues,
which include the company's share of revenues from its unconsolidated wireless
investments, rose 6.3 percent for the quarter. Consolidated and proportionate
first-half revenues rose 4.4 and 6.2 percent respectively.
Adjustments and reported results are described below.
--more--
<PAGE>
Bell Atlantic News Release, Page 2
"After the first half of 1999, we are exactly where we expected to be
- -- on plan and ahead of the curve, proving our ability to compete in the
industry's most attractive markets," said Bell Atlantic Chairman and CEO Ivan
Seidenberg.
"Our results reflect the accelerating transformation of our revenue
growth profile, with increasing contributions from data and wireless services,
as well as our industry-leading success in controlling costs and improving
productivity. We are speeding up our drive into the high-growth markets of the
future at the same time we continue to experience solid demand for basic
services.
"We are making solid progress in deploying a wide range of high-speed
data services for all of our customers. Our Digital Subscriber Line rollout
continues, and Infospeed DSL is now available to the general business market as
well as to consumers. And during the quarter, we launched virtual private
network, call center and other enterprise services and further strengthened our
abilities to deliver end-to-end managed data solutions to large businesses.
"Once again, our Global Wireless Group delivered world-class results in
extraordinarily competitive markets, contributing substantially to our revenue
and earnings growth. Global Wireless is one of the world's premier portfolios,
with national and global scope, and industry-leading customer care and network
reliability.
"We also entered the final phases of New York State's review of our
long distance application and made a great deal of headway in proceedings in
Massachusetts, Pennsylvania and New Jersey. We're eager to move these
discussions to Washington, get approvals and start combining long distance
service with all the other services and innovations we now deliver to our
customers.
"During the quarter, our proposed merger with GTE also picked up
momentum as we completed our shareowner votes, the Department of Justice's
review and numerous state proceedings. We're confident we will pass muster at
the Federal Communications Commission and the remaining states -- on both long
distance and the merger -- and form one of the top-tier communications companies
for the next century."
--more--
<PAGE>
Bell Atlantic News Release, page 3
Quarterly EPS figures have been adjusted by one cent per share in
second quarter 1999 for charges related to Bell Atlantic-NYNEX merger
integration, and by three cents per share in second quarter 1998 for charges
related to merger integration and an enhanced pension offer. Reported EPS of 74
cents increased 13.8 percent over 65 cents per share in second quarter 1998.
Reported net income available to common shareowners for the quarter was $1.2
billion, 14.3 percent higher than second quarter 1998 reported net income of
$1.0 billion.
Six-month reported EPS figures have been adjusted for special items
totaling two cents per share in 1999 and 13 cents per share in 1998. Reported
six-month 1999 EPS of $1.46 grew 20.7 percent compared to $1.21 in first-half
1998. Reported net income available to common shareowners of $2.3 billion rose
20.8 percent over $1.9 billion in the prior-year period.
Highlights of the Domestic Telecom and Global Wireless segments, and
related adjusted and proportionate information, are discussed below.
Domestic Telecom Highlights
Domestic Telecom revenues increased 2.8 percent over second quarter
1998, with the growth rate reduced by accounting for a one-time rebate to
Massachusetts customers following a favorable regulatory decision on reciprocal
compensation. Excluding the rebate, which is approximately $21 million, Telecom
revenues grew 3.2 percent. More than three-quarters 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 26.3 percent over
second quarter 1998 to $691 million.
Growth in volumes for basic services reflected Bell Atlantic's
aggressive marketing activities. The number of access lines in service increased
3.8 percent to 42.4 million, and the number of voice-grade equivalents (access
lines plus data circuits) rose 12.9 percent in the quarter to 60.6 million.
Business VGEs grew 21.7 percent to 34 million. Access minutes of use rose 4.6
percent.
<PAGE>
Bell Atlantic News Release, page 4
The demand for digital connectivity and data services continued to grow
in all markets. In the enterprise and general business markets:
. Data circuits, or "DSO equivalents" in service (digital, high-bandwidth and
packet-switched services as measured in 64-kilobit voice-grade equivalents)
increased 41 percent in the second quarter over second quarter 1998.
. Bell Atlantic's Data Solutions Group (DSG) increased revenues 31.1 percent
over the prior-year period and continued to expand its portfolio of
services to meet the full range of enterprise customers' needs. During the
quarter, DSG introduced Virtual Private Network Services and agreed to
acquire Customer Management Automation, a leading provider of integrated
call center solutions. DSG also expanded its Internet access services to
offer high-speed connections through frame relay, private line or
Asynchronous Transfer Mode (ATM).
. Bell Atlantic has introduced Infospeed DSL PLUS to small businesses for
always-on, high-speed Internet access at affordable prices for as low as
$64.95 a month. Small businesses can choose one of three DSL speeds
packaged with BellAtlantic.net Internet access.
. Bell Atlantic ended the quarter with 560,000 basic rate Integrated Services
Digital Network (ISDN) lines in service, up 14.1 percent from second
quarter 1998, and the number of primary rate ISDN channels in service
increased 51.1 percent to approximately 982,000.
In the consumer market:
. Bell Atlantic expanded availability of Infospeed DSL service to consumers
in the New York and Boston metropolitan areas. The service is also
available in the Washington, D.C., Pittsburgh and Philadelphia metropolitan
areas and parts of northern and southern New Jersey. In addition, the
number of additional lines, many of which are used for Internet access and
home fax machines, grew 16 percent over second quarter 1998.
. By the end of the quarter, Bell Atlantic had signed agreements with more
than 40 Internet Service Providers (ISPs), including America Online,
Prodigy, Splitrock and Flashcom, to enable their customers to access the
Internet using Bell Atlantic's Infospeed DSL service.
. New combinations and price plans helped increase sales of packages of
vertical services by approximately 60 percent, with the number of packages
in service increasing to more than 1.6 million. Caller ID revenues for the
quarter increased 23.9 percent compared to second quarter 1998, as the
number of subscribers increased to 7.2 million, with penetration exceeding
27 percent. Home Voice Mail revenues rose 8.7 percent.
--more--
<PAGE>
Bell Atlantic News Release, Page 5
. Use of Bell Atlantic's National 411 service grew rapidly in the second
quarter, with the number of callers asking for national listings
approaching one million a week.
In the network services market:
. Special access revenues for the period rose 23.6 percent to $456 million
for the quarter.
. By the end of the second quarter, Bell Atlantic was providing approximately
1.1 million access lines on a wholesale basis to other local exchange
providers. Bell Atlantic also signed agreements with two wholesalers for
two of the largest resale orders yet placed, which will total 425,000 lines
over the next five years.
Adjusted quarterly operating expenses for Domestic Telecom of $4.9
billion were nearly flat compared to second quarter 1998, with cash expenses
decreasing by 1.6 percent despite higher payments to competitive local exchange
carriers (CLECs) and continued investment in long distance and data
capabilities.
Global Wireless Highlights
Strong domestic and international performance produced further gains in
Bell Atlantic's Global Wireless Group's results. Proportionate subscribers
increased 36.2 percent over second quarter 1998 to 9.9 million, as proportionate
net customer additions in the quarter totaled 570,000. The international
portfolio contributed more than half of the Group's year-over-year subscriber
growth.
Total proportionate revenues for the group increased 28.3 percent to
$1.4 billion. Proportionate operating income reached $256 million, with
proportionate operating cash flow increasing 23.1 percent in the quarter to $469
million
Global Wireless added a total of 271,000 domestic subscribers in the
quarter, with Bell Atlantic Mobile (BAM) adding 214,000 new net subscribers. BAM
ended the quarter with 6.6 million customers, up 15.8 percent.
Domestic highlights:
<PAGE>
Bell Atlantic News Release, page 6
. BAM total revenue exceeded $1.0 billion in the quarter, an increase of 18.1
percent over second quarter 1998. Total revenue per subscriber increased to
$53, up 1.6 percent.
. Digital subscribers now comprise 27 percent of BAM's customer base and
account for nearly 60 percent of busy-hour usage on the company's network.
In May, the company announced plans to keep pace with its rapid growth by
expanding its extensive customer service operation with a new call center
in South Carolina.
. To capture the explosive market opportunity presented by the Internet, BAM
introduced new flat-rate pricing of $39.95 per month for wireless Internet
access. BAM also became the first wireless provider to offer accessories to
online shoppers nationwide, whether or not they are BAM subscribers.
. PrimeCo Personal Communications passed the three percent mark in
penetration of covered POPs during the quarter. Total PrimeCo subscribers
now exceed 1.2 million, more than double second quarter 1998 levels.
PrimeCo also recently launched service in the Florida Keys and Corpus
Christi, Texas, with additional market launches scheduled for the remainder
of 1999.
. Total PrimeCo revenues for the quarter grew nearly 78 percent over second
quarter 1998 to $213 million. Average monthly revenue per subscriber in the
quarter was $53, and operating cash flow for the quarter improved 85
percent over second quarter 1998.
Bell Atlantic's international wireless portfolio ended the quarter with
2.8 million proportionate subscribers, more than double the number in second
quarter 1998. Proportionate net subscriber additions at the international
investments totaled 299,000 for the quarter, 35.9 percent higher than net
additions in the prior-year period.
International proportionate revenues for the quarter rose 61.5 percent
to $302 million. Operating income from international investments increased 125
percent over second quarter 1998 to $72 million, with proportionate operating
cash flow growing 89.5 percent to $108 million.
International highlights:
. Omnitel Pronto Italia, Europe's second largest wireless provider, added
more than 900,000 subscribers in the second quarter, pushing its subscriber
base to more than 7.8 million. In June, Omnitel received a national
fixed-line license that it will use to meet the needs of corporate
customers. The company also introduced Omnitel 2000, the world's first
wireless Web portal that gives any wireless, wireline, or Web user the
option of using a voice recognition platform for navigation. In June, Bell
Atlantic increased its ownership of Omnitel to 23.1 percent.
--more--
<PAGE>
Bell Atlantic News Release, page 7
. The number of Grupo Iusacell subscribers in Mexico grew to 951,000, 73
percent higher than in the prior-year period. The company also more than
doubled long distance revenues over the same period last year and
introduced Calling Party Pays in May. Iusacell's digital customer base grew
106 percent this quarter, and three of its four regions have now converted
nearly all of their networks to offer digital services.
. STET Hellas added almost 131,000 net customers in the quarter, and ended
the period with more than 928,000 subscribers. STET Hellas was recently
honored with a Teleperformance Gold Award for excellence in customer care,
and now offers subscribers the ability to pay phone bills and recharge
prepaid cards through the Bank of Greece's hundreds of automatic teller
machines.
* * *
Bell Atlantic is at the forefront of the new communications and
information industry. With more than 43 million telephone access lines and
nearly 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. Discussion of factors that may affect future results is
contained in our recent filings with the Securities and Exchange Commission.
###
<PAGE>
<TABLE>
<CAPTION>
BELL ATLANTIC CORPORATION
- ----------------------------------------------------------
Consolidated Statements of Income - Reported Basis
- ----------------------------------------------------------
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended % 6 Mos. Ended 6 Mos. Ended %
Unaudited 6/30/99 6/30/98 Change 6/30/99 6/30/98 Change
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,593 $ 3,462 3.8 $ 7,061 $ 6,794 3.9
Network access services 1,988 1,942 2.4 3,932 3,849 2.2
Long distance services 441 474 (7.0) 915 976 (6.3)
Ancillary services 513 482 6.4 1,020 977 4.4
Directory services 619 601 3.0 1,166 1,133 2.9
Wireless services 1,120 944 18.6 2,110 1,800 17.2
Other services 21 23 (8.7) 58 50 16.0
----------------------------------------------------------------------------------
Total Operating Revenues 8,295 7,928 4.6 16,262 15,579 4.4
----------------------------------------------------------------------------------
Operating Expenses
Employee costs 2,051 2,116 (3.1) 4,069 4,420 (7.9)
Depreciation and amortization 1,541 1,445 6.6 3,045 2,856 6.6
Other operating expenses 2,556 2,414 5.9 4,923 4,638 6.1
----------------------------------------------------------------------------------
Total Operating Expenses 6,148 5,975 2.9 12,037 11,914 1.0
----------------------------------------------------------------------------------
Operating Income 2,147 1,953 9.9 4,225 3,665 15.3
Income (loss) from unconsolidated businesses 37 (26) - 71 (3) -
Other income and (expense), net 4 42 (90.5) 23 56 (58.9)
Interest expense 315 363 (13.2) 630 673 (6.4)
Provision for income taxes 700 579 20.9 1,374 1,108 24.0
----------------------------------------------------------------------------------
Income from Continuing Operations 1,173 1,027 14.2 2,315 1,937 19.5
Extraordinary item
Early extinguishment of debt, net of tax (6) (6) - (6) (23) (73.9)
----------------------------------------------------------------------------------
Net Income 1,167 1,021 14.3 2,309 1,914 20.6
Redemption of investee preferred stock - - - - (2) -
----------------------------------------------------------------------------------
Net Income Available to
Common Shareowners $ 1,167 $ 1,021 14.3 $ 2,309 $ 1,912 20.8
==================================================================================
Diluted Earnings per Share - Net Income $ .74 $ .65 13.8 $ 1.46 $ 1.21 20.7
Weighted average number of common
shares-assuming dilution (in millions) 1,581 1,578 1,582 1,578
</TABLE>
Footnotes:
Diluted Earnings per Share include the dilutive effect of shares issuable under
our stock-based compensation plans, which represent the only potential dilutive
common shares.
<TABLE>
<CAPTION>
- ----------------------------
Earnings Reconciliations
- ----------------------------
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended Diluted 3 Mos. Ended Diluted
Unaudited 6/30/99 EPS 6/30/98 EPS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported Earnings $ 1,167 $ .74 $ 1,021 $ .65
Adjustments:
Transition costs 22 .01 29 .02
Special pension enhancement - - 21 .01
------------------------------------------------------------
Adjusted Earnings $ 1,189 $ .75 $ 1,071 $ .68
Adjusted Growth 11.0% 10.3%
------------------------------------------------------------
<CAPTION>
6 Mos. Ended Diluted 6 Mos. Ended Diluted
6/30/99 EPS 6/30/98 EPS
------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported Earnings $ 2,309 $ 1.46 $ 1,912 $ 1.21
Adjustments:
Transition costs 32 .02 34 .02
Special pension enhancement - - 168 .11
------------------------------------------------------------
Adjusted Earnings $ 2,341 $ 1.48 $ 2,114 $ 1.34
Adjusted Growth 10.7% 10.4%
------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BELL ATLANTIC CORPORATION
- ------------------------------------------------------
Consolidated Statements of Income - Adjusted Basis
- ------------------------------------------------------
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended %
Unaudited 6/30/99 6/30/98 Change
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $ 3,593 $ 3,462 3.8
Network access services 1,988 1,942 2.4
Long distance services 441 474 (7.0)
Ancillary services 513 482 6.4
Directory services 619 601 3.0
Wireless services 1,120 944 18.6
Other services 21 23 (8.7)
----------------------------------------------
Total Operating Revenues 8,295 7,928 4.6
----------------------------------------------
Operating Expenses
Employee costs 2,039 (1) 2,079 (4) (1.9)
Depreciation and amortization 1,541 1,445 6.6
Other operating expenses 2,533 (2) 2,371 (5) 6.8
----------------------------------------------
Total Operating Expenses 6,113 5,895 3.7
----------------------------------------------
Operating Income 2,182 2,033 7.3
Income (loss) from unconsolidated businesses 37 (26) -
Other income and (expense), net 4 42 (90.5)
Interest expense 315 363 (13.2)
Provision for income taxes 713 (3) 609 (6) 17.1
----------------------------------------------
Income from Continuing Operations 1,195 1,077 11.0
Extraordinary item
Early extinguishment of debt, net of tax (6) (6) -
----------------------------------------------
Net Income 1,189 1,071 11.0
Redemption of investee preferred stock - - -
----------------------------------------------
Net Income Available to
Common Shareowners $ 1,189 $ 1,071 11.0
==============================================
Diluted Earnings per Share - Net Income $ .75 $ .68 10.3
Weighted average number of common
shares-assuming dilution (in millions) 1,581 1,578
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
6 Mos. Ended 6 Mos. Ended %
Unaudited 6/30/99 6/30/98 Change
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $ 7,061 $ 6,794 3.9
Network access services 3,932 3,849 2.2
Long distance services 915 976 (6.3)
Ancillary services 1,020 977 4.4
Directory services 1,166 1,133 2.9
Wireless services 2,110 1,800 17.2
Other services 58 50 16.0
-------------------------------------------------
Total Operating Revenues 16,262 15,579 4.4
-------------------------------------------------
Operating Expenses
Employee costs 4,055 (7) 4,140 (10) (2.1)
Depreciation and amortization 3,045 2,856 6.6
Other operating expenses 4,885 (8) 4,589 (11) 6.5
-------------------------------------------------
Total Operating Expenses 11,985 11,585 3.5
-------------------------------------------------
Operating Income 4,277 3,994 7.1
Income (loss) from unconsolidated businesses 71 (3) -
Other income and (expense), net 23 56 (58.9)
Interest expense 630 673 (6.4)
Provision for income taxes 1,394 (9) 1,235 (12) 12.9
-------------------------------------------------
Income from Continuing Operations 2,347 2,139 9.7
Extraordinary item
Early extinguishment of debt, net of tax (6) (23) (73.9)
-------------------------------------------------
Net Income 2,341 2,116 10.6
Redemption of investee preferred stock - (2) -
-------------------------------------------------
Net Income Available to
Common Shareowners $ 2,341 $ 2,114 10.7
=================================================
Diluted Earnings per Share - Net Income $ 1.48 $ 1.34 10.4
Weighted average number of common
shares-assuming dilution (in millions) 1,582 1,578
</TABLE>
Footnotes:
2Q '99
(1) Excludes $12 million related to transition costs
(2) Excludes $23 million related to transition costs
(3) Excludes tax effects of items in (1) and (2) above
2Q '98
(4) Excludes $34 million related to special pension enhancement and $3 million
related to transition costs
(5) Excludes $43 million related to transition costs
(6) Excludes tax effects of items (4) and (5) above
6 Mos. '99 YTD
(7) Excludes $14 million related to transition costs
(8) Excludes $38 million related to transition costs
(9) Excludes tax effects of items (7) and (8) above
6 Mos. '98 YTD
(10) Excludes $275 million related to special pension enhancement and $5 million
related to transition costs
(11) Excludes $49 million related to transition costs
(12) Excludes tax effects of items (10) and (11) above
<PAGE>
- ---------------------------------------------------------
BELL ATLANTIC CORPORATION
Selected Financial and Operating Statistics
- ---------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/99 6/30/98 6/30/99 6/30/98
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt ratio-end of period 58.4% 60.1%
Return on average common equity-adjusted basis 33.4% 32.0% 33.8% 31.9%
Return on average assets-adjusted basis 8.5% 7.9% 8.4% 7.8%
Book value per common share $ 9.61 $ 8.48
Cash dividends declared per common share $ .385 $ .385 $ .77 $ .77
Common shares outstanding (in millions)
End of period 1,553 1,553
Capital expenditures
Domestic Telecom $ 1,630 $ 1,596 $ 3,074 $ 3,081
Domestic Cellular 212 162 453 265
Other 87 67 113 138
-------------------------------------------------------------------------
Total $ 1,929 $ 1,825 $ 3,640 $ 3,484
=========================================================================
Employees
Domestic Telecom 128,397 127,853
Other 14,435 14,683
------------------------------------
Total 142,832 142,536
====================================
</TABLE>
<PAGE>
- -------------------------------
BELL ATLANTIC CORPORATION
Consolidated Balance Sheets
- -------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
Unaudited 6/30/99 12/31/98 $ Change
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 232 $ 237 $ (5)
Short-term investments 280 786 (506)
Accounts receivable, net 6,722 6,560 162
Inventories 584 566 18
Prepaid expenses 658 522 136
Other 262 411 (149)
----------------------------------------------------
Total current assets 8,738 9,082 (344)
----------------------------------------------------
Plant, property and equipment 85,943 83,064 2,879
Less accumulated depreciation 48,157 46,248 1,909
----------------------------------------------------
37,786 36,816 970
----------------------------------------------------
Investments in unconsolidated businesses 5,929 4,276 1,653
Other assets 5,420 4,970 450
----------------------------------------------------
Total Assets $ 57,873 $ 55,144 $ 2,729
====================================================
Liabilities and Shareowners' Investment
Current liabilities
Debt maturing within one year $ 3,558 $ 2,988 $ 570
Accounts payable and accrued liabilities 5,955 6,105 (150)
Other 1,479 1,438 41
----------------------------------------------------
Total current liabilities 10,992 10,531 461
----------------------------------------------------
Long-term debt 17,381 17,646 (265)
----------------------------------------------------
Employee benefit obligations 9,962 10,384 (422)
----------------------------------------------------
Deferred credits and other liabilities
Deferred income taxes 3,234 2,254 980
Unamortized investment tax credits 210 222 (12)
Other 623 551 72
----------------------------------------------------
4,067 3,027 1,040
----------------------------------------------------
Minority interest, including a portion subject to
redemption requirements 338 330 8
----------------------------------------------------
Preferred stock of subsidiary 201 201 -
----------------------------------------------------
Shareowners' investment
Common stock 158 158 -
Contributed capital 13,444 13,368 76
Reinvested earnings 2,294 1,371 923
Accumulated other comprehensive income (loss) 160 (714) 874
----------------------------------------------------
16,056 14,183 1,873
Less common stock in treasury, at cost 631 593 38
Less deferred compensation-employee stock ownership plans 493 565 (72)
----------------------------------------------------
Total shareowners' investment 14,932 13,025 1,907
----------------------------------------------------
Total Liabilities and Shareowners' Investment $ 57,873 $ 55,144 $ 2,729
====================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BELL ATLANTIC CORPORATION
- -----------------------------------------------------
Condensed Consolidated Statements of Cash Flows
- -----------------------------------------------------
(Dollars in Millions)
YTD YTD
Unaudited 6/30/99 6/30/98 $ Change
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows From Operating Activities :
Net Income $ 2,309 $ 1,914 $ 395
Adjustments To Reconcile Net Income To Net
Cash Provided by Operating Activities :
Depreciation and Amortization 3,045 2,856 189
Extraordinary Items, Net of Tax 6 23 (17)
(Income)/Loss from Unconsolidated Businesses (71) 3 (74)
Dividends Received From Unconsolidated Businesses 56 88 (32)
Amortization of Unearned Lease Income (72) (57) (15)
Deferred Income Taxes, Net 469 118 351
Investment Tax Credits (12) (14) 2
Other Items, Net 8 101 (93)
Changes in Certain Assets and Liabilities Net of
Effects From Acquisition/Disposition of Businesses (1,042) (159) (883)
------------------------------------------------------
Net Cash Provided by Operating Activities 4,696 4,873 (177)
------------------------------------------------------
Cash Flows From Investing Activities
Net Change in Short-Term Investments 497 300 197
Additions to Plant, Property, and Equipment (3,640) (3,484) (156)
Investments in Unconsolidated Businesses, net (825) (414) (411)
Proceeds From Disposition of Businesses 612 5 607
Other investing activities, net (151) 27 (178)
------------------------------------------------------
Net Cash Used In Investing Activities (3,507) (3,566) 59
------------------------------------------------------
Cash Flows From Financing Activities
Proceeds From Borrowings 199 2,990 (2,791)
Principal Repayments of Borrowings and Capital Lease Obligations (161) (209) 48
Early Extinguishment of Debt (257) (590) 333
Net Change in Short-Term Borrowings with
Original Maturities of Three Months or Less 139 (2,032) 2,171
Proceeds from Financing of Cellular Assets 380 - 380
Dividends Paid (1,201) (1,188) (13)
Proceeds From Sale of Common Stock 180 375 (195)
Purchase of Common Stock For Treasury (398) (655) 257
Other financing activities, net (75) (18) (57)
------------------------------------------------------
Net Cash Used In Financing Activities (1,194) (1,327) 133
------------------------------------------------------
Decrease In Cash and Cash Equivalents (5) (20) 15
Cash and Cash Equivalents, Beginning of Period 237 323 (86)
------------------------------------------------------
Cash and Cash Equivalents, End of Period $ 232 $ 303 $ (71)
======================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BELL ATLANTIC CORPORATION
- ---------------------------------------------------
Domestic Telecom - Selected Financial Results
- ---------------------------------------------------
(Dollars in Millions)
3 Mos. Ended 3 Mos. Ended % 6 Mos. Ended 6 Mos. Ended %
Unaudited 6/30/99 6/30/98 Change 6/30/99 6/30/98 Change
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,616 $ 3,479 3.9 $ 7,104 $ 6,826 4.1
Network access services 1,988 1,943 2.3 3,932 3,850 2.1
Long distance services 441 474 (7.0) 915 976 (6.3)
Ancillary services 528 495 6.7 1,063 1,007 5.6
----------------------------------------------------------------------------------------------
Total Operating Revenues $ 6,573 $ 6,391 2.8 $ 13,014 $ 12,659 2.8
----------------------------------------------------------------------------------------------
Operating Expenses
Employee costs $ 1,789 $ 1,858 (3.7) $ 3,595 $ 3,685 (2.4)
Depreciation and amortization 1,363 1,287 5.9 2,699 2,549 5.9
Other operating expenses 1,746 1,736 .6 3,360 3,362 (0.1)
----------------------------------------------------------------------------------------------
Total Operating Expenses $ 4,898 $ 4,881 .3 $ 9,654 $ 9,596 .6
----------------------------------------------------------------------------------------------
Operating Income $ 1,675 $ 1,510 10.9 $ 3,360 $ 3,063 9.7
Operating Income Margin 25.5% 23.6% 25.8% 24.2%
Operating Cash Flow $ 3,038 $ 2,797 8.6 $ 6,059 $ 5,612 8.0
Operating Cash Flow Margin 46.2% 43.8% 46.6% 44.3%
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------
Directory - Selected Financial Results
- -----------------------------------------
(Dollars in Millions)
3 Mos. Ended 3 Mos. Ended % 6 Mos. Ended 6 Mos. Ended %
Unaudited 6/30/99 6/30/98 Change 6/30/99 6/30/98 Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues $ 615 $ 602 2.2 $ 1,168 $ 1,136 2.8
Operating Expenses
Employee costs $ 79 $ 82 (3.7) $ 159 $ 169 (5.9)
Depreciation and amortization 10 9 11.1 19 17 11.8
Other operating expenses 192 203 (5.4) 382 384 (.5)
---------------------------------------------------------------------------------------------
Total Operating Expenses $ 281 $ 294 (4.4) $ 560 $ 570 (1.8)
---------------------------------------------------------------------------------------------
Operating Income $ 334 $ 308 8.4 $ 608 $ 566 7.4
Operating Income Margin 54.3% 51.2% 52.1% 49.8%
Operating Cash Flow $ 344 $ 317 8.5 $ 627 $ 583 7.5
Operating Cash Flow Margin 55.9% 52.7% 53.7% 51.3%
</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 June 30, 1999.
Intercompany and intersegment transactions have not been eliminated.
<PAGE>
- ---------------------------------------------
BELL ATLANTIC CORPORATION
Domestic Telecom - Operating Statistics
- ---------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
3 Mos. Ended 3 Mos. Ended %
Unaudited 6/30/99 6/30/98 Change
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Statistics
Switched access lines in service
(in thousands) (1)
Residence
Business
Public
Total
Voice grade equivalents
(in thousands) (2)
Residence
Business
Total
BRI ISDN lines (in thousands) (3)
Access minutes of use (in millions) 45,357 43,349 4.6
Employees per 10,000 access lines (4)
High Capacity and Digital Data
Data Revenue (in millions)
Wideband transport (5) $ 443 $ 364 21.7
Fast packet and other (6) 168 122 37.7
Data solutions (7) 80 61 31.1
--------------------------------------------
Total Revenues $ 691 $ 547 26.3
============================================
Data Volumes (in thousands)
DSO Equivalents (8)
PRI ISDN (9)
Frame Relay (9)
ATM Cell Relay (9)
<CAPTION>
(Dollars in Millions)
6 Mos. Ended 6 Mos. Ended %
Unaudited 6/30/99 6/30/98 Change
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Statistics
Switched access lines in service
(in thousands) (1)
Residence 26,575 25,723 3.3
Business 15,319 14,622 4.8
Public 519 523 (.8)
----------------------------------------------
Total 42,413 40,868 3.8
----------------------------------------------
Voice grade equivalents
(in thousands) (2)
Residence 26,575 25,723 3.3
Business 34,036 27,965 21.7
----------------------------------------------
Total 60,611 53,688 12.9
----------------------------------------------
BRI ISDN lines (in thousands) (3) 560 481 16.4
Access minutes of use (in millions) 89,859 84,957 5.8
Employees per 10,000 access lines (4) 29.0 30.0 (3.3)
High Capacity and Digital Data
Data Revenue (in millions)
Wideband transport (5) $ 878 $ 713 23.1
Fast packet and other (6) 325 231 40.7
Data solutions (7) 147 124 18.5
----------------------------------------------
Total Revenues $ 1,350 $ 1,068 26.4
==============================================
Data Volumes (in thousands)
DSO Equivalents (8) 19,708 13,982 41.0
PRI ISDN (9) 982 650 51.1
Frame Relay (9) 750 423 77.3
ATM Cell Relay (9) 618 263 135.0
</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 counted as one
access line. Each BRI line consists of two 'B' channels that each operate
at 64 kbps, and one 'D' channel that serves as a signaling channel
directing voice & data transmissions.
(4) Calculated based on employees of telephone operations only.
(5) Includes circuit-based digital dedicated transport services such as Digital
DSO, DS1, DS3 and Sonet-based services used to carry local and access
traffic, both voice and data.
(6) Includes fast packet data transport services such as Frame Relay, SMDS and
ATM. Also includes ISDN, ADSL and internet revenue.
(7) Revenues associated with our Data Solution - Retail business
(8) Includes digital DS0 and above circuits (e.g. Digital DS0, DS1, DS3),
including packet-based services, converted to a DSO or 64kbps signal, the
equivalent to one voice signal. DS1=24DSOs, DS3=672 DSOs, OC3=2,106 DSOs,
OC12=8,424 DSOs, OC48=33,696 DSOs
(9) Volumes expressed as DSO equivalents.
<PAGE>
- -------------------------------------------
BELL ATLANTIC CORPORATION
Global Wireless - Proportionate Results
- -------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except subscriber amounts)
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/99 6/30/98 % Change 6/30/99 6/30/98 % Change
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Combined Global Wireless
Selected Financial Results
Revenues $ 1,427 $ 1,112 28.3 $ 2,703 $ 2,090 29.3
Operating income $ 256 $ 203 26.1 $ 442 $ 323 36.8
Operating cash flow (1) $ 469 $ 381 23.1 $ 851 $ 673 26.4
Selected Operating Data
Subscribers (000) 9,942 7,298 36.2 9,942 7,298 36.2
Subscriber net adds in period (000) 570 486 17.3 1,102 880 25.2
POPs (000) 188,490 177,074 6.4 188,490 177,074 6.4
- ------------------------------------------------------------------------------------------------------------------------------------
Bell Atlantic Mobile (2)
Selected Financial Results
Revenues $ 1,026 $ 869 18.1 $ 1,934 $ 1,655 16.9
Operating income $ 216 $ 217 (.5) $ 388 $ 384 1.0
Operating cash flow $ 365 $ 348 4.9 $ 678 $ 637 6.4
Selected Operating Data
Subscribers (000) 6,606 5,707 15.8 6,606 5,707 15.8
Subscriber net adds in period (000) 214 224 (4.5) 404 351 15.1
Controlled POPs (000) 57,356 56,987 .6 57,356 56,987 .6
- ------------------------------------------------------------------------------------------------------------------------------------
PrimeCo Personal Communications (3)
Selected Financial Data
Revenues $ 99 $ 56 76.8 $ 187 $ 105 78.1
Operating income $ (32) $ (46) 30.4 $ (69) $ (111) 37.8
Operating cash flow $ (4) $ (24) 83.3 $ (26) $ (61) 57.4
Selected Operating Data
Subscribers (000) 563 279 101.8 563 279 101.8
Subscriber net adds in period (000) 57 42 35.7 151 98 54.1
POPs (000) 28,634 28,487 .5 28,634 28,487 .5
- ------------------------------------------------------------------------------------------------------------------------------------
International Wireless Operations (4)
Selected Financial Data
Revenues $ 302 $ 187 61.5 $ 582 $ 330 76.4
Operating income $ 72 $ 32 125.0 $ 123 $ 50 146.0
Operating cash flow $ 108 $ 57 89.5 $ 199 $ 97 105.2
Selected Operating Data
Subscribers (000) 2,773 1,312 111.4 2,773 1,312 111.4
Subscriber net adds in period (000) 299 220 35.9 547 431 26.9
POPs (000) 102,500 91,600 11.9 102,500 91,600 11.9
</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
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 June 30, 1999.
Intercompany and intersegment transactions have not been eliminated.
<PAGE>
<TABLE>
<CAPTION>
BELL ATLANTIC CORPORATION
- -------------------------------------------
Bell Atlantic Mobile Operating Results
- -------------------------------------------
(Dollars in Millions, except subscriber amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 6/30/99 6/30/98 % Change
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bell Atlantic Mobile (1)
Selected Financial Results
Revenues $ 1,026 $ 869 18.1
Less: Incollect revenues $ 80 $ 71 12.7
Less: Equipment revenues $ 83 $ 43 93.0
---------------------------------
Service revenues $ 863 $ 755 14.3
---------------------------------
Operating income $ 216 $ 217 (.5)
Operating cash flow $ 365 $ 348 4.9
Operating cash flow margin (2) 42% 46%
Capital expenditures, excluding acquisitions 212 162 30.9
Selected Operating Data
Subscribers (000) 6,606 5,707 15.8
Penetration (3) 11.5% 10.0%
Subscriber net adds in period (000) 214 224 (4.5)
Controlled POPs (000) (4) 57,356 56,987 .6
Owned POPs (000) (5) 55,710 55,101 1.1
Churn rate 1.82% 1.75%
Total revenue per subscriber $ 52.70 $ 51.89 1.6
Service revenue per subscriber $ 44.30 $ 45.09 (1.8)
Cash expense per subscriber $ 25.57 $ 24.32 5.1
Acquisition cost per add (6) $ 196 $ 193 1.6
<CAPTION>
(Dollars in Millions, except subscriber amounts)
6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/99 6/30/98 % Change
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bell Atlantic Mobile (1)
Selected Financial Results
Revenues $ 1,934 $ 1,655 16.9
Less: Incollect revenues $ 156 $ 133 17.3
Less: Equipment revenues $ 146 $ 78 87.2
----------------------------------
Service revenues $ 1,632 $ 1,444 13.0
----------------------------------
Operating income $ 388 $ 384 1.0
Operating cash flow $ 678 $ 637 6.4
Operating cash flow margin (2) 42% 44%
Capital expenditures, excluding acquisitions 453 265 70.9
Selected Operating Data
Subscribers (000) 6,606 5,707 15.8
Penetration (3) 11.5% 10.0%
Subscriber net adds in period (000) 404 351 15.1
Controlled POPs (000) (4) 57,356 56,987 .6
Owned POPs (000) (5) 55,710 55,101 1.1
Churn rate 1.89% 1.79%
Total revenue per subscriber $ 50.40 $ 50.17 .5
Service revenue per subscriber $ 42.52 $ 43.77 (2.9)
Cash expense per subscriber $ 24.86 $ 24.46 1.6
Acquisition cost per add (6) $ 202 $ 209 (3.3)
</TABLE>
Footnotes:
(1) Bell Atlantic Mobile results reflect consolidated results for all
controlled markets
(2) Operating cash flow margin is calculated by dividing operating cash flow by
service revenues
(3) Penetration is calculated by dividing subscribers by controlled POPs
(4) Controlled POPs represent the total number of POPs for which Bell Atlantic
Mobile has operating control
(5) Owned POPs represent Bell Atlantic Mobile percentage ownership in all
licensed markets
(6) Acquisition cost per add includes commissions and loss on handsets
Certain reclassifications have been made to prior results to conform to current
presentation
