<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM 11-K
-------------
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the years ended December 31, 1998 and 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 1-8606
-------------
Bell Atlantic Savings and Security Plan for
Associates of Bell Atlantic North
-------------
Bell Atlantic Corporation
1095 Avenue of the Americas, New York, New York 10036
[LOGO]
<PAGE>
BELL ATLANTIC SAVINGS and SECURITY PLAN
for ASSOCIATES OF BELL ATLANTIC NORTH
As of December 31, 1998 and 1997
TABLE OF CONTENTS
<TABLE>
<S> <C>
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Plan* Benefits as of
December 31, 1998 and 1997 2-3
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 1998 and 1997 4-5
Notes to Financial Statements 6-23
Signature Page 24
</TABLE>
- ----------
* This and certain other capitalized terms used but not defined herein shall
have their respective meanings as defined in the Plan Prospectus.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Corporate Employees' Benefits
Committee of Bell Atlantic Corporation:
We have audited the accompanying Statement of Net Assets Available for Plan
Benefits of the Bell Atlantic Savings and Security Plan for Associates of Bell
Atlantic North (the "Plan") as of December 31, 1998, and the related Statement
of Changes in Net Assets Available for Plan Benefits for the year then ended.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of the Plan as of December 31, 1997 were
audited by other auditors, whose report dated April 30, 1998, expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Bell
Atlantic Savings and Security Plan for Associates of Bell Atlantic North as of
December 31, 1998, and the changes in its net assets available for plan benefits
for the year then ended, in conformity with generally accepted accounting
principles.
/s/ Mitchell & Titus, LLP
New York, New York
June 11, 1999
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF BELL ATLANTIC NORTH
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FUND INFORMATION
--------------------------------------------------------------------------------------------
BELL PASSIVE US
ATLANTIC EQUITY ACTIVE U.S. U.S.
SHARES TELECOMMUNICATIONS INDEX INCOME LOAN EQUITY BALANCED
FUND FUND FUND FUND FUND FUND FUND
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments at market
(see Notes 2 and 3):
Allocated Share of Master
Trust net assets $2,167,098 $ 226,834 $ 386,580 $ 440,716 $ -- $ 69,281 $ 29,275
Temporary cash investments -- -- 89 -- -- 16 7
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total investments 2,167,098 226,834 386,669 440,716 -- 69,297 29,282
Receivables:
Participants' contributions 2,682 -- 855 569 -- 195 76
Loan repayments 646 -- 191 145 (1,101) 38 13
Loans to participants -- -- -- -- 153,037 -- --
Interfund 6,895 (3) (191) (5,989) -- 21 (114)
Dividends and interest
receivable -- -- 1 -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total receivables 10,223 (3) 856 (5,275) 151,936 254 (25)
Net assets available for
plan benefits (Notes 1
and 2) $2,177,321 $ 226,831 $ 387,525 $ 435,441 $ 151,936 $ 69,551 $ 29,257
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
FUND INFORMATION
--------------------------------------------------------------------------------------------
ACTIVE GOVERNMENT PASSIVE
GLOBAL INTERNATIONAL U.S. SMALL U.S. BOND MONEY INTERNATIONAL
BALANCED EQUITY CAPITALIZATION MARKET INDEX MARKET EQUITY INDEX
FUND FUND FUND FUND FUND FUND TOTAL
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments at market
(see Notes 2 and 3):
Allocated Share of Master
Trust net assets $ 22,909 $ 13,478 $ 39,887 $ 20,337 $ 7,403 $ 6,049 $3,429,847
Temporary cash investments 5 3 9 -- -- -- 129
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total investments 22,914 13,481 39,896 20,337 7,403 6,049 3,429,976
Receivables:
Participants' contributions 64 46 126 62 22 40 4,737
Loan repayments 12 9 24 12 3 8 --
Loans to participants -- -- -- -- -- -- 153,037
Interfund (37) (44) 431 (672) (446) 149 --
Dividends and interest
receivable -- -- -- -- -- -- 1
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total receivables 39 11 581 (598) (421) 197 157,775
Net assets available for
plan benefits (Notes 1
and 2) $ 22,953 $ 13,492 $ 40,477 $ 19,739 $ 6,982 $ 6,246 $3,587,751
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF BELL ATLANTIC NORTH
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------------------------------
BELL DIVERSIFIED ACTIVE
ATLANTIC TELE- EQUITY INTEREST U.S. U.S.
SHARES COMMUNICATIONS PORTFOLIO INCOME LOAN EQUITY BALANCED
FUND FUND FUND FUND FUND FUND FUND
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments at market
(see Notes 2 and 3):
Allocated Share of Master
Trust net assets $1,833,709 $ 170,080 $ 301,422 $ 445,065 $ -- $ 61,164 $ 22,806
Temporary cash investments -- -- 1,197 -- -- 243 91
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total investments 1,833,709 170,080 302,619 445,065 -- 61,407 22,897
---------- ---------- ---------- ---------- ---------- ---------- ----------
Receivables:
Employer's contribution 1,916 -- -- -- -- -- --
Participants' contribution 1,510 -- 1,437 1,024 -- 290 91
Loan repayments 955 -- 336 270 (1,737) 64 17
Loans to participants -- -- -- -- 131,181 -- --
Dividends and interest
receivable -- -- 12 -- -- 3 1
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total receivables 4,381 -- 1,785 1,294 129,444 357 109
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total assets 1,838,090 170,080 304,404 446,359 129,444 61,764 23,006
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net assets available for
plan benefits
(Notes 1 and 2) $1,838,090 $ 170,080 $ 304,404 $ 446,359 $ 129,444 $ 61,764 $ 23,006
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
FUND INFORMATION
--------------------------------------------------------------------------------
U.S.
U.S. BOND
GLOBAL SMALL MARKET GOVERNMENT INTERNATIONAL
BALANCED CAP INDEX OBLIGATIONS EQUITY
FUND FUND FUND FUND FUND TOTAL
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investments at market
(see Notes 2 and 3):
Allocated Share of Master
Trust net assets $ 21,152 $ 41,428 $ 41 $ 7,258 $ 14,401 $2,918,526
Temporary cash investments 84 165 -- -- 57 1,837
---------- ---------- ---------- ---------- ---------- ----------
Total investments 21,236 41,593 41 7,258 14,458 2,920,363
---------- ---------- ---------- ---------- ---------- ----------
Receivables:
Employer's contribution -- -- -- -- -- 1,916
Participants' contribution 110 228 33 -- 84 4,807
Loan repayments 22 49 7 -- 17 --
Loans to participants -- -- -- -- -- 131,181
Dividends and interest
receivable 1 2 -- -- 1 20
---------- ---------- ---------- ---------- ---------- ----------
Total receivables 133 279 40 -- 102 137,924
---------- ---------- ---------- ---------- ---------- ----------
Total assets 21,369 41,872 81 7,258 14,560 3,058,287
---------- ---------- ---------- ---------- ---------- ----------
Net assets available for
plan benefits
(Notes 1 and 2) $ 21,369 $ 41,872 $ 81 $ 7,258 $ 14,560 $3,058,287
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
See notes to financial statements
-3-
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF BELL ATLANTIC NORTH
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------------------------------------
BELL PASSIVE US
ATLANTIC EQUITY ACTIVE U.S.
SHARES TELECOMMUNICATIONS INDEX INCOME LOAN U.S. EQUITY BALANCED
FUND FUND FUND FUND FUND FUND FUND
----------- ----------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Allotments,
contributions
and transfers:
Employee allotments $ 65,722 $ (8) $ 47,807 $ 32,276 $ -- $ 11,988 $ 3,803
Interfund transfers 36,526 (8,182) (15,675) (18,160) -- (6,538) 1,588
Plan transfers-in -- -- 95 -- -- 51 39
Rollover contributions 552 -- 297 155 -- 211 100
Employing company
contributions (Note 1) 66,254 -- -- -- -- -- --
Loans to participants (42,155) (1,895) (14,328) (14,743) 80,429 (2,687) (750)
Loan repayments 37,966 -- 7,538 6,598 (57,937) 2,039 400
----------- ----------- ---------- ---------- ---------- ---------- -----------
Total allotments,
contributions, and
transfers 164,865 (10,085) 25,734 6,126 22,492 5,064 5,180
Investment income:
Dividends/Interest 62,732 7,762 -- -- -- -- --
Allocated share of
Master Trust
investment activities
(Note 3) 292,977 73,137 83,819 25,873 -- 8,239 3,647
----------- ----------- ---------- ---------- ---------- ---------- -----------
Total additions 520,574 70,814 109,553 31,999 22,492 13,303 8,827
----------- ----------- ---------- ---------- ---------- ---------- -----------
Deductions:
Administrative expenses 269 49 42 207 -- 127 26
Plan transfers-out 13,843 577 1,850 2,240 -- 413 200
Distributions to
participants 167,231 13,437 24,540 40,470 -- 4,976 2,350
----------- ----------- ---------- ---------- ---------- ---------- -----------
Total deductions 181,343 14,063 26,432 42,917 -- 5,516 2,576
----------- ----------- ---------- ---------- ---------- ---------- -----------
Net increase (decrease) 339,231 56,751 83,121 (10,918) 22,492 7,787 6,251
Net assets available
for plan benefits:
Beginning of year 1,838,090 170,080 304,404 446,359 129,444 61,764 23,006
----------- ----------- ---------- ---------- ---------- ---------- -----------
End of year
(Notes 1 and 2) $ 2,177,321 $ 226,831 $ 387,525 $ 435,441 $ 151,936 $ 69,551 $ 29,257
----------- ----------- ---------- ---------- ---------- ---------- -----------
----------- ----------- ---------- ---------- ---------- ---------- -----------
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------------------------------------
ACTIVE GOVERNMENT PASSIVE
GLOBAL INTERNATIONAL U.S. SMALL U.S. BOND MONEY INTERNATIONAL
BALANCED EQUITY CAPITALIZATION MARKET INDEX MARKET EQUITY INDEX
FUND FUND FUND FUND FUND FUND TOTAL
----------- ----------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Allotments,
contributions
and transfers:
Employee allotments $ 3,823 $ 2,802 $ 8,412 $ 1,951 $ 569 $ 698 $ 179,843
Interfund transfers (2,806) (2,959) (6,942) 10,832 7,237 5,079 --
Plan transfers-in 34 11 59 4 14 33 340
Rollover contributions 51 27 60 85 296 23 1,857
Employing company
contributions (Note 1) -- -- -- -- -- -- 66,254
Loans to participants (875) (591) (1,669) (505) (114) (117) --
Loan repayments 578 596 1,466 466 104 186 --
----------- ----------- ---------- ---------- ---------- ---------- -----------
Total allotments,
contributions, and
transfers 805 (114) 1,386 12,833 8,106 5,902 248,294
Investment income:
Dividends/Interest -- -- -- -- -- -- 70,494
Allocated share of
Master Trust
investment activities
(Note 3) 2,710 130 262 571 156 485 492,006
----------- ----------- ---------- ---------- ---------- ---------- -----------
Total additions 3,515 16 1,648 13,404 8,262 6,387 810,794
----------- ----------- ---------- ---------- ---------- ---------- -----------
Deductions:
Administrative expenses 49 34 98 2 3 52 958
Plan transfers-out 153 132 230 74 46 19 19,777
Distributions to
participants 1,729 918 2,715 928 1,231 70 260,595
----------- ----------- ---------- ---------- ---------- ---------- -----------
Total deductions 1,931 1,084 3,043 1,004 1,280 141 281,330
----------- ----------- ---------- ---------- ---------- ---------- -----------
Net increase (decrease) 1,584 (1,068) (1,395) 12,400 6,982 6,246 529,464
Net assets available
for plan benefits:
Beginning of year 21,369 14,560 41,872 7,339 -- -- 3,058,287
----------- ----------- ---------- ---------- ---------- ---------- -----------
End of year
(Notes 1 and 2) $ 22,953 $ 13,492 $ 40,477 $ 19,739 $ 6,982 $ 6,246 $ 3,587,751
----------- ----------- ---------- ---------- ---------- ---------- -----------
----------- ----------- ---------- ---------- ---------- ---------- -----------
</TABLE>
-4-
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF BELL ATLANTIC NORTH
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FUND INFORMATION
---------------------------------------------------------------------------------------------------
BELL DIVERSIFIED ACTIVE
ATLANTIC TELE- EQUITY INTEREST U.S. U.S.
SHARES COMMUNICATIONS PORTFOLIO INCOME LOAN EQUITY BALANCED
FUND FUND FUND FUND FUND FUND FUND
---------- ----------- ---------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Allotments, contributions
and transfers:
Employee allotments $ 49,345 $ 4,407 $ 39,965 $ 40,856 $ -- $ 8,343 $ 2,860
Interfund transfers (38,579) (5,886) 62,411 (30,701) -- 2,494 (1,542)
Plan transfers-in 1,395 105 588 491 -- 93 49
Rollover contributions 154 55 419 193 -- 310 82
Employing company
contributions (Note 1) 64,199 -- -- -- -- -- --
Loans to participants (41,673) (1,275) (10,065) (14,783) 72,442 (1,639) (488)
Loan repayments 27,833 1,088 8,532 9,411 (51,862) 1,759 539
---------- ----------- ---------- ---------- ---------- --------- ---------
Total allotments,
contributions and
transfers 62,674 (1,506) 101,850 5,467 20,580 11,360 1,500
Investment Income:
Allocated share of Master
Trust Investment
activities (Note 3) 636,126 48,587 55,782 29,744 -- 25,182 9,987
---------- ----------- ---------- ---------- ---------- --------- ---------
Total additions 698,800 47,081 157,632 35,211 20,580 36,542 11,487
---------- ----------- ---------- ---------- ---------- --------- ---------
Deductions
Administrative expenses 1,021 108 157 364 -- 161 79
Plan transfers-out 22,162 836 4,707 4,568 -- 689 212
Distributions to
participants 110,518 12,631 13,960 40,806 -- 2,319 1,237
---------- ----------- ---------- ---------- ---------- --------- ---------
Total deductions 133,701 13,575 18,824 45,738 -- 3,169 1,528
---------- ----------- ---------- ---------- ---------- --------- ---------
Net increase
(decrease) 565,099 33,506 138,808 (10,527) 20,580 33,373 9,959
Net assets available for
plan benefits:
Beginning of year -
January 1, 1997 1,272,991 136,574 165,596 456,886 108,864 28,391 13,047
---------- ----------- ---------- ---------- ---------- --------- ---------
End of year -
December 31, 1997
(Notes 1 and 2) $1,838,090 $ 170,080 $ 304,404 $ 446,359 $ 129,444 $ 61,764 $ 23,006
---------- ----------- ---------- ---------- ---------- --------- ---------
---------- ----------- ---------- ---------- ---------- --------- ---------
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------------------------
U.S.
U.S. BOND
GLOBAL INTERNATIONAL SMALL MARKET GOVERNMENT
BALANCED EQUITY CAP INDEX OBLIGATIONS
FUND FUND FUND FUND FUND TOTAL
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Allotments, contributions
and transfers:
Employee allotments $ 3,703 $ 2,920 $ 5,527 $ 33 $ 1,140 $ 159,099
Interfund transfers (3,220) 313 14,433 40 237 --
Plan transfers-in 56 80 45 -- 102 3,004
Rollover contributions 77 45 109 -- 13 1,457
Employing company
contributions (Note 1) -- -- -- -- -- 64,199
Loans to participants (640) (482) (1,100) -- (297) --
Loan repayments 720 539 1,149 8 211 (73)
----------- ----------- ----------- ----------- ----------- -----------
Total allotments,
contributions and
transfers 696 3,415 20,163 81 1,406 227,686
Investment Income:
Allocated share of Master
Trust Investment
activities (Note 3) 9,090 1,094 6,994 -- 557 823,143
----------- ----------- ----------- ----------- ----------- -----------
Total additions 9,786 4,509 27,157 81 1,963 1,050,829
----------- ----------- ----------- ----------- ----------- -----------
Deductions
Administrative expenses 93 93 227 -- 5 2,308
Plan transfers-out 289 167 367 -- 89 34,086
Distributions to
participants 1,107 921 1,476 -- 422 185,397
----------- ----------- ----------- ----------- ----------- -----------
Total deductions 1,489 1,181 2,070 -- 516 221,791
----------- ----------- ----------- ----------- ----------- -----------
Net increase
(decrease) 8,297 3,328 25,087 81 1,447 829,038
Net assets available for
plan benefits:
Beginning of year -
January 1, 1997 13,072 11,232 16,785 -- 5,811 2,229,249
----------- ----------- ----------- ----------- ----------- -----------
End of year -
December 31, 1997
(Notes 1 and 2) $ 21,369 $ 14,560 $ 41,872 $ 81 $ 7,258 $ 3,058,287
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
See notes to financial statements.
-5-
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
1. PLAN DESCRIPTION
The following description of the Bell Atlantic Savings and Security Plan
for Associates of Bell Atlantic North (the "NSSP") provides only general
information on the NSSP's provisions as of December 31, 1998. Participants
should refer to the Benefits Handbook, NSSP plan document and prospectus
for a more complete description of the NSSP's provisions.
The NSSP* was established by NYNEX Corporation on January 1, 1984 to
provide a convenient way for non-salaried employees to save on a regular
and long-term basis. In August 1997, Bell Atlantic Corporation merged with
NYNEX Corporation (the "Merger") to form the new Bell Atlantic Corporation
("Bell Atlantic"). Effective January 1, 1998, Bell Atlantic became the NSSP
plan sponsor. The NSSP is a defined contribution plan covering all regular
non-salaried employees of the pre-merger NYNEX Corporation and its
participating subsidiaries. Employees are eligible to make tax-deferred or
after-tax contributions to the NSSP, and to receive matching employer
contributions, upon completion of enrollment in the plan as soon as
practicable following the date of hire.
ALLOTMENTS AND CONTRIBUTIONS
Eligible employees may authorize basic contributions of 1% to 6% of salary,
as defined, and supplementary contributions up to an additional 10% of
salary. For employees of Bell Atlantic and most of its participating
subsidiaries, Bell Atlantic makes employer matching contributions in an
amount equal to 66 2/3% of basic contributions. Such matching contributions
are invested currently only in the Bell Atlantic Shares Fund. Contributions
are subject to applicable rules set forth in the Internal Revenue Code (the
"Code") and the regulations thereunder.
The NSSP provides for 100% vesting of employer matching contributions upon
attaining three years of service. A terminated employee's unvested employer
matching contributions are forfeited and offset against the participating
companies' obligation to make subsequent contributions to the NSSP.
Forfeitures were $195 and $110 in 1998 and 1997, respectively.
- --------
* Certain other capitalized terms used but not defined herein shall have
their respective meanings as defined in the NSSP Prospectus.
6
<PAGE>
BELL ATLANTIC SAVINGS and SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
LOANS
The NSSP includes an employee loan provision authorizing participants to
borrow an amount from their vested account balances in the NSSP. Loans are
generally repaid by payroll deductions. The term of repayment for loans
generally will not be less than six months nor more than fifteen years.
Each new loan will bear interest at a rate based upon the prime for loans
up to sixty months and prime plus one for loans sixty-one months to one
hundred eighty months as published in The Wall Street Journal.
TERMINATION PRIORITIES
Although it has not expressed any intent to do so, Bell Atlantic has the
right under the NSSP to discontinue all employer matching contributions at
any time and to terminate the NSSP subject to the provisions of the
Employee Retirement Income Security Act ("ERISA") of 1974, as amended. In
the event of plan termination, participants would become 100% vested in
their accounts.
FUND OPTIONS
Participants are able to invest in one or more combinations of the
following funds (referred to herein individually as a "Fund" and
collectively as the "Funds"): Bell Atlantic Shares Fund, Telecommunications
Fund, U.S. Bond Market Index Fund, Passive U.S. Equity Index Fund,
Government Money Market Fund, Income Fund, Passive International Equity
Index Fund, U.S. Balanced Fund, Global Balanced Fund, Active U.S. Equity
Fund, Active International Equity Fund and U.S. Small Capitalization Fund.
Beginning in 1998, these three fund options were newly offered by the NSSP:
- Government Money Market Fund
- U.S. Bond Market Index Fund
- Passive International Equity Index Fund
The Bell Atlantic Shares Fund invests primarily in the common stock of Bell
Atlantic. As of the date of the Merger, the NSSP's investments in the NYNEX
Shares Fund were converted into shares of Bell Atlantic common stock within
the Bell Atlantic Shares Fund.
The Telecommunications Fund's portfolio is comprised of investments in
twenty-five North American telephone utility and telecommunications
companies each with a minimum market value of approximately $1 billion at
December 31, 1998 and 1997. Effective January 1, 1998, the
Telecommunications Fund was no longer open to new investments. Participants
who did not elect a new investment direction had their current
contributions automatically directed to the Passive U.S. Equity Index Fund.
Also effective January 1, 1998, transfers of participant existing balances
into the Telecommunications Fund were prohibited. Dividends, including
stock dividends of the Telecommunications Fund, will be reinvested in the
Fund.
7
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
Participants will be allowed to move money out of the Fund at any time. The
Fund is a market weighted index fund and is managed by Bell Atlantic Asset
Management Company ("BAAMCO").
Effective January 1, 1998, the Government Obligations Fund was no longer
offered as a Fund selection. All balances in the Fund were automatically
transferred to the U.S. Bond Market Index Fund along with any current
investment directions designated to the Government Obligations Fund. To
accomplish this automatic transfer, some of the Government Obligations
Fund's assets were held in shorter maturity government instruments
beginning in December 1997. The U.S. Bond Market Index Fund includes all
U.S. Treasury, government-sponsored, mortgaged-backed, asset-backed and
investment-grade corporate bonds, with at least one year maturity and at
least $100 million outstanding. The Fund may use interest rate futures and
various other kinds of derivatives to adjust portfolio duration or as
interest rate hedges. The Fund is managed by Barclays Global Investors,
N.A.
On January 1, 1998 the Diversified Equity Portfolio was renamed the Passive
U.S. Equity Index Fund. The Passive U.S Equity Index Fund invests in an
equity index fund which is managed by BAAMCO. This Fund is principally a
portfolio of common stocks and is structured and maintained with the
objective of providing investment results which approximate the overall
performance of the common stocks included in the Standard and Poors
Composite Index of 500 stocks.
On January 1, 1998 the Government Money Market Fund was newly offered to
NSSP participants. The Government Money Market Fund invests in securities
of the U.S. government or its agencies, obligations guaranteed or insured
by the U.S. government and repurchase agreements that use these securities
as collateral. The average maturity of the securities in the Fund generally
will be thirty to sixty days, but may vary from one to ninety days. The
Fund may use interest rate futures for cash management purposes or to
adjust the average duration of the portfolio. The Fund is managed by
Bankers Trust Company.
On January 1, 1998 the Interest Income Fund was renamed the Income Fund.
The Income Fund, invests primarily in a diversified portfolio of guaranteed
investment contracts ("GICs") issued by insurance companies. Some of the
assets of the Fund are also invested in pools of asset-backed securities,
corporate bonds, and obligations of the United States Government and its
agencies ("Synthetic Investment Contract"). As an integral part of the
purchase of each pool of these investments, a financial institution, via a
wrapper contract, agrees to pay at book value for qualified distributions
(e.g. participant withdrawals) and at maturity of the contract, based on
the agreed upon interest rate for the relevant time period but not in the
event of a default of any security in the pool. The NSSP is exposed to
credit risk in the event of nonperformance by the entities for which the
contracts are placed. The NSSP seeks to minimize credit risk by
diversifying among a group of GIC issuers and other financial
8
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
institutions which meet certain investment criteria established by BAAMCO.
These contracts guarantee (i) a fixed rate of interest for a fixed period
of time or (ii) a fixed rate of interest for an indefinite period of time.
Such interest is not guaranteed by any of the Employing Companies. The Fund
is managed by BAAMCO. (For further discussion of this Fund see Note 2).
On January 1, 1998 the Passive International Equity Index Fund was newly
offered to NSSP participants. The Passive International Equity Index Fund
has investments that mirror the MSCI-EAFE-GDP, which is an index
established by Morgan Stanley Dean Witter, comprised of approximately 1,000
companies from twenty of the largest countries outside of the United
States, including Japan, Germany and the United Kingdom. The weighting of
each country in the index is based upon its GDP, which is a measure of
domestic economic output. The Fund is managed by Barclays Global Investors,
N.A.
In addition to the Passive U.S. Equity Index Fund, each of the following
five Funds invest in the assets of unitized investment advisor account(s)
of the Bell Atlantic Master Trust ("Master Trust"), as designated by
BAAMCO: U.S. Balanced Fund, Global Balanced Fund, Active U.S. Equity Fund,
Active International Equity Fund, and the U.S. Small Capitalization Fund.
The U.S. Balanced Fund invests primarily in domestic stocks and bonds. The
fixed income portion of the Fund may invest a small portion of its assets
in issues of international agencies, foreign governments, their agencies
and foreign corporations. The Fund targets approximately 60% in stocks and
40% in bonds. As of December 31, 1998, BAAMCO had selected the following
unitized investment advisor account(s) of the Master Trust ("Master Trust
pooled accounts") for the Fund: Barrow, Hanley, Mewhinney & Strauss, Inc.,
Equinox Capital Management, LLC, Fidelity Management Trust Company,
Franklin Portfolio Associates, Inc., Gardner Lewis Asset Management, L.P.,
Goldman Sachs Asset Management Co., Independence Investment Associates,
Inc., Miller Anderson & Sherrerd, LLP, Palisade Capital Management, L.L.C.,
Provident Investment Counsel, State Street Research and Management Company,
Transamerica Investment Services, Trinity Investment Management
Corporation, and Wilshire Associates Inc.
The Global Balanced Fund invests in the world's capital markets, primarily
in equity and fixed income instruments. The Fund is diversified and has
representation in a variety of countries, from those of the most mature and
developed nations to those still in their developmental stages (generally
referred to as emerging market countries). The Fund may invest in large or
small capitalization stocks. The Global Balanced Fund typically targets 75%
of its investments for the domestic market and 25% for the foreign market,
and approximately 70% in stocks and 30% in bonds. Emerging markets
investments are targeted at 4% of the total Fund. As of December 31, 1998,
BAAMCO had selected the following
9
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
Master Trust pooled accounts for the Fund: Barrow, Hanley, Mewhinney &
Strauss, Inc., Capital Guardian Trust Company, Equinox Capital Management,
LLC, Fidelity Management Trust Company, Franklin Portfolio Associates,
Inc., Gardner Lewis Asset Management, L.P., Goldman Sachs Asset Management
Co., Independence Investment Associates, Inc., Miller Anderson & Sherrerd,
LLP, Morgan Stanley Asset Management, Morgan Stanley International,
Northern Cross Investments, Ltd., Palisade Capital Management, L.L.C.,
Provident Investment Counsel, Rogge Global Partners, PLC, State Street
Global Advisors, State Street Research and Management Company, Transamerica
Investment Services, Trinity Investment Management Corporation, and
Wilshire Associates Inc.
The Active U.S. Equity Fund invests primarily in domestic common stocks. As
of December 31, 1998, BAAMCO had selected the following Master Trust pooled
accounts for the Fund: Barrow, Hanley, Mewhinney & Strauss, Inc., Equinox
Capital Management, LLC, Fidelity Management Trust Company, Franklin
Portfolio Associates, Inc., Gardner Lewis Asset Management, L.P., Goldman
Sachs Asset Management Co., Independence Investment Associates, Inc.,
Miller Anderson & Sherrerd, LLP, Palisade Capital Management, L.L.C.,
Provident Investment Counsel, Transamerica Investment Services, Trinity
Investment Management Corporation, and Wilshire Associates Inc.
On January 1, 1998, the International Equity Fund was renamed the Active
International Equity Fund. The Active International Equity Fund invests in
international equity markets throughout the world, generally excluding the
United States. It is well-diversified and has representation in a variety
of economies, from those of the most mature and developed nations to those
still in their developmental stages (generally referred to as emerging
market countries). The Fund may invest in large or small capitalization
stocks. It targets 80% of its investments for developed countries such as
Japan, Germany and the United Kingdom and 20% for emerging markets such as
Brazil, Mexico and Taiwan. As of December 31, 1998, BAAMCO had selected
Capital Guardian Trust Company, Morgan Stanley Asset Management, Morgan
Stanley International, Northern Cross Investments, Ltd., and State Street
Global Advisors as the Master Trust pooled accounts for the Fund.
The U.S. Small Capitalization Fund invests primarily in the stocks of
smaller-sized domestic companies, generally with a market capitalization
that is in the smallest 15% of publicly traded stocks. As of December 31,
1998, BAAMCO had selected the following as the Master Trust pooled accounts
for the Fund: Columbus Circle Investors, Gardner Lewis Asset Management,
L.P., Investment Counselors of Maryland, Inc., The Boston Company Asset
Management, Inc., Provident Investment Counsel, and Wilshire Associates
Inc.
All the assets of the NSSP are included in the Bell Atlantic Master Trust
(See Note 2) for which Mellon Bank, N.A., is the trustee.
10
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
Wellspring Resources, LLC was the recordkeeper for the NSSP through
June 30, 1998. As of July 1, 1998, the Kwasha Group of
PriceWaterhouseCoopers L.L.P. became the recordkeeper for the NSSP.
2. ACCOUNTING POLICIES
INVESTMENTS
Effective January 1, 1998, the NYNEX Master Trust was renamed the Bell
Atlantic Master Trust (the "Master Trust"). All of the assets of the NSSP
are included in the Master Trust.
VALUE OF INVESTMENTS
The Trustee values the investments in the Master Trust as follows:
Investments in securities traded on national and foreign securities
exchanges are valued by the Trustee at the last reported sale prices on the
last business day of the year or, if no sales were reported on that date,
at the last reported bid prices. Over-the-counter securities and government
obligations are valued at the bid prices or the average of the bid and
asked prices on the last business day of the year from published sources
where available or, if not available, from other sources considered
reliable, generally broker quotes.
The value of each contract with an insurance company or other financial
institution included in the Income Fund is reported at contract value in
the Statements of Net Assets Available for Plan Benefits based upon the
principal then invested in by the Fund plus the interest then accrued on
such principal, which approximates the fair value. In accordance with
Statement of Position 94-4 "Reporting of Investment Contracts held by
Health and Welfare Benefit Plans and Defined Contribution Pension Plans"
and in connection with the fully benefit-responsive investment contracts,
the following information is presented:
i. The asset weighted crediting interest rate yielded a return of 6.3%
and 6.4% for the years ended December 31, 1998 and 1997, respectively.
ii. The crediting interest rates ranged from 4.2% to 8.2% at December 31,
1998 and 1997.
iii. The fair value, as determined by discounting future cash flows of the
underlying investments, at December 31, 1998 and 1997, was
approximately $376,460 and $407,263, respectively.
Forward currency contracts are accounted for as contractual commitments on
a trade date basis and are carried at fair value derived by the Trustee at
the exchange rate prevailing on the last business day of the year. Index
futures contracts are recorded as contractual commitments on a trade-date
basis and are carried at fair value based on the closing index
11
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
futures price prevailing on the last business day of the year. Both
exchange rates and index futures prices are readily available from
published sources.
Temporary cash investments are stated at redemption value which
approximates fair value.
PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments are reflected as of the trade date.
Realized gains and losses on sales of investments are determined on the
basis of average cost.
INVESTMENT INCOME
Dividend income is recorded on the ex-dividend date. Interest earned on
investments is recorded on the accrual basis.
NET APPRECIATION (DEPRECIATION) OF INVESTMENTS
The Statements of Changes in Net Assets Available for Plan Benefits
reflects the net appreciation (depreciation) in the fair value of the
NSSP's investments, which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
DISTRIBUTIONS
Distributions elected to be withdrawn from the NSSP by participants are
recorded when paid.
PLAN EXPENSES
The NSSP pays certain administrative expenses out of assets held in the
Master Trust and out of interest income earned from the NSSP's disbursement
account, as held by the Trustee, in accordance with NSSP provisions and to
the extent permitted by law. Any expenses not paid by the NSSP are paid by
Bell Atlantic.
BELL ATLANTIC'S USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the NSSP's trust asset
administrator, to make significant estimates and assumptions that affect
the reported amounts of net assets available for plan benefits at the date
of the financial statements and the changes in net assets available for
plan benefits during the reporting period and, when applicable, disclosures
of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
12
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
RISKS AND UNCERTAINTIES
The NSSP provides for various participant investment options in any
combination of funds which can invest in any combination of stocks, bonds,
fixed income securities, mutual funds, and other investment securities.
Investment securities are exposed to various risks, such as interest rate,
market, and credit risks. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in
the values of investment securities will occur in the near term and that
such changes could materially affect participants' account balances and the
amounts reported in the Statements of Net Assets Available for Plan
Benefits.
3. INVESTMENTS
INVESTMENT IN MASTER TRUST
All of the investment assets in the Master Trust are managed by BAAMCO or
external investment advisors. The assets in the Master Trust are either (a)
pooled between the defined benefit plans and the defined contribution plans
or (b) net assets that are specific to the defined benefit plans, or (c)
net assets specific to the defined contribution plans. The total fair value
of the Master Trust at December 31, 1998 was approximately $51.2 billion
(of which net assets totalling approximately $17.5 billion are specific to
the defined benefit plans, item (b) above, for which separate financial
statements are prepared) and approximately $26 billion at December 31,
1997.
INVESTMENTS HELD IN POOLED ACCOUNTS
The pooled investments are unitized, aggregated and reported by the Master
Trust with a carrying value of $22.7 billion and $11.8 billion at December
31, 1998 and 1997, respectively, and with investment earnings of $2.2
billion and $2.1 billion for the years ended December 31, 1998 and 1997,
respectively. Given that the pooled accounts include interests of the
defined contribution plans and the defined benefit plans, the totals in
each respective statement do not equal the carrying value or net investment
income of/from the Master Trust pooled accounts in this footnote.
13
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
The total investments held in the Master Trust pooled accounts at
December 31, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
Fair Value (Note 2)
--------------------------
Description 1998 1997
----------- ----------- -----------
<S> <C> <C>
Cash - non interest bearing $ 7,587 $ -
Receivables 1,300,045 721,643
Common Stock 18,625,854 9,313,917
Bell Atlantic Corporation common shares 70,998 101,036
Preferred Stock 115,874 79,863
U.S. Government Securities 1,097,450 892,987
Corporate Debt - preferred and other 1,489,671 832,741
Real estate 166 278
Temporary cash investments 619,688 391,265
Other investments* 708,470 277,734
----------- -----------
24,035,803 12,611,464
Liabilities 1,307,975 765,600
----------- -----------
Total pooled net assets in the Master Trust $22,727,828 $11,845,864
----------- -----------
----------- -----------
</TABLE>
- ----------
* Other investments include foreign investments, principally foreign
government debt.
The NSSP's interests in the Master Trust pooled accounts carrying value and
investment income of the Master Trust pooled accounts are reported in each
respective Fund option as the "Allocated share of Master Trust net assets"
as of December 31, 1998 and 1997, in the Statement of Net Assets Available
for Plan Benefits and "Allocated share of Master Trust investment
activities" in the Statements of Changes in Net Assets Available for Plan
Benefits for the years ended December 31, 1998 and 1997.
Investments in the Master Trust are allocated to the NSSP's Fund options in
accordance with their respective percentages of interest. The proportionate
interests of the NSSP's Fund Options in the carrying value of the Master
Trust pooled accounts at December 31, 1998 and 1997 were as follows:
14
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Carrying Carrying
Value Value
1998 1998 1997 1997
-------- ------ -------- ------
<S> <C> <C> <C> <C>
Active U.S. Equity Fund $ 69,551 0.3060% $ 61,764 0.5214%
U.S. Balanced Fund 29,257 0.1287% 23,006 0.1942%
Global Balanced Fund 22,953 0.1010% 21,369 0.1804%
Active International Equity 13,492 0.0594% 14,560 0.1229%
Fund
U.S. Small Capitalization Fund 40,477 0.1781% 41,872 0.3535%
Passive U.S. Equity Index Fund 387,525 1.7051% 304,404 2.5697%
-------- ------ -------- ------
Total $563,255 $466,975
-------- --------
-------- --------
</TABLE>
INVESTMENTS HELD IN SPECIFIC ACCOUNTS
Effective January 1, 1998, the assets of all Bell Atlantic's defined
contribution plans were included in the Master Trust. The net assets
specific to these plans are the Bell Atlantic Shares Fund,
Telecommunications Fund, Government Money Market Fund, Income Fund, Loan
Fund, the ESOP allocated account, Passive International Equity Index Fund,
and the U.S. Bond Market Index Fund.
The investments held in the Master Trust specific accounts for the defined
contribution plans at December 31, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
FAIR VALUE (NOTE 2)
DESCRIPTION 1998 1997
- ----------- ----------- -----------
<S> <C> <C>
Receivables $ 410,006 $ 231,946
Common Stock 609,620 307,288
Bell Atlantic Corporation common shares 8,324,047 2,660,230
Temporary cash investments 139,788 599,054
Fixed income obligations - insurance contracts 1,973,019 1,105,670
Fixed income corporate obligations 239,031 118,112
----------- -----------
11,695,511 5,022,300
Liabilities 642,498 --
----------- -----------
Total net assets in the specific
accounts in the Master Trust $11,053,013 $ 5,022,300
----------- -----------
----------- -----------
</TABLE>
15
<PAGE>
BELL ATLANTIC SAVINGS and SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
Investments in the Master Trust are allocated to the NSSP's Fund options in
accordance with their respective percentages of interest. The proportionate
interest of the NSSP, the Bell Atlantic Savings Plan for Salaried Employees
(the "BASP") and the Bell Atlantic Savings and Security Plan for Associates
of Bell Atlantic South (the "BASSP") in the carrying value of the Master
Trust specific accounts at December 31, 1998 was as follows:
<TABLE>
<CAPTION>
Carrying Carrying Carrying
Value Value Value
NSSP Plan % BASP Plan % BASSP Plan %
------------ ------ ------------ ------ ------------ ------
<S> <C> <C> <C> <C> <C> <C>
Bell Atlantic Shares Fund $ 2,177,321 40.72 $ 2,039,193 38.14 $ 1,130,164 21.14
Telecommunications Fund 226,831 47.24 253,335 52.76 -- --
Government Money Market Fund 6,982 3.91 155,902 87.30 15,695 8.79
Passive International Equity Index 6,246 4.75 102,392 77.80 22,965 17.45
Fund
Income Fund 435,441 22.10 1,268,983 64.40 265,943 13.50
Loan Fund 151,936 43.11 148,922 42.25 51,597 14.64
Employee Stock Ownership Plan -- -- 1,527,926 72.68 574,279 27.32
U.S. Bond Market Index Fund 19,739 8.11 211,022 86.67 12,712 5.22
Bell Atlantic Employer Stock
Ownership Plan (PAYSOP) -- -- 81,892 33.09 165,595 66.91
------------ ------------ ------------
Total $ 3,024,496 $ 5,789,567 $ 2,238,950
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
The following table reflects the investments that represent 5% or more of
the net assets in the Master Trust as of December 31, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Bell Atlantic Corporation common shares $8,324,047 $2,761,266
</TABLE>
INVESTMENT INCOME
Investment income and expenses are allocated to the NSSP's Fund options
daily in accordance with their respective daily percentages of interest in
the Master Trust's pooled accounts. Percentages of interest are based on
the daily ratio of units owned by each plan's Fund options to the total
units in the Master Trust pooled accounts. Investment income related to
investments held in specific accounts for the defined contribution plans is
allocated to each plan's Fund options daily in accordance with each plan's
respective percentage of interest.
16
<PAGE>
BELL ATLANTIC SAVINGS and SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
The allocated net investment income to the NSSP's Fund options for the
years ended December 31, 1998 and 1997 was as follows:
<TABLE>
<CAPTION>
DIVIDENDS ON
BELL ATLANTIC OTHER
CORPORATION NET INCOME/ NET
COMMON OTHER APPRECIATION EXPENSES INVESTMENT
INTEREST SHARES DIVIDENDS (DEPRECIATION) NET INCOME
--------- ------------- --------- -------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1998:
Bell Atlantic Shares Fund $ 408 $ 62,732 $ -- $ 229,837 $ -- $ 292,977
Telecommunications Fund 55 -- 3,690 69,397 (5) 73,137
Government Money Market Fund 158 -- -- (2) -- 156
Passive U.S. Equity Index Fund 647 -- 4,882 78,283 7 83,819
Passive International Equity
Index Fund 2 -- -- 483 -- 485
Income Fund 26,237 -- -- (364) -- 25,873
U.S. Bond Market Index Fund 8 -- -- 563 -- 571
Active U.S. Equity Fund 65 -- 1,129 7,045 -- 8,239
U.S. Balanced Fund 576 -- 263 2,808 -- 3,647
Global Balanced Fund 379 -- 273 2,065 (7) 2,710
Active International Equity Fund 31 -- 312 (185) (28) 130
U.S. Small Capitalization Fund 115 -- 312 (166) 1 262
--------- --------- --------- --------- --------- ---------
Total $ 28,681 $ 62,732 $ 10,861 $ 389,764 $ (32) $ 492,006
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
December 31, 1997:
Bell Atlantic Shares Fund $ 5,111 $ 61,823 $ -- $ 569,192 $ -- $ 636,126
Telecommunications Fund 236 -- 3,806 44,545 -- 48,587
Government Obligations Fund 34 -- -- 523 -- 557
Diversified Equity Portfolio 1,623 -- 4,210 49,946 3 55,782
Interest Income Fund 29,744 -- -- -- -- 29,744
Active U.S. Equity Fund 328 -- 1,689 23,151 14 25,182
U.S. Balanced Fund 544 -- 653 8,780 10 9,987
Global Balanced Fund 461 -- 652 7,972 5 9,090
International Equity Fund 111 -- 283 713 (13) 1,094
U.S. Small Cap Fund 280 -- 177 6,537 -- 6,994
--------- --------- --------- --------- --------- ---------
Total $ 38,472 $ 61,823 $ 11,470 $ 711,359 $ 19 $ 823,143
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
17
<PAGE>
BELL ATLANTIC SAVINGS and SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
4. DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are used in the Master Trust's pooled
accounts primarily to rebalance fixed income/equity allocations, to
efficiently gain exposure to a specific underlying market, and to offset
the currency risk associated with foreign investments. Leveraging of the
NSSP's assets and speculation are prohibited as stated in the NSSP plan
documents. Offsetting currency positions are not permitted to exceed the
level of exposure in the NSSP's foreign asset base. The derivatives most
commonly used by investment managers are highly-liquid, exchange-traded
equity and fixed income futures and over-the-counter foreign exchange
forward contracts.
Bell Atlantic's use of financial instruments for risk management purposes
is represented by notional amounts. These notional values represent solely
contractual amounts that serve as the basis or reference amounts upon which
contractually stipulated calculations are based. Therefore, these amounts
are intended to serve as general volume indicators only and do not
represent the potential gain or loss from market or credit risks.
Market risk arises from the potential for changes in the value of financial
instruments resulting from fluctuations in interest rates, foreign exchange
rates and prices of equity securities. Market risk is also affected by
changes in volatility and liquidity in the markets in which these
instruments are traded.
Equity price risk arises from the possibility that equity prices will
fluctuate, affecting the value of equity securities and derivative
financial instruments that derive their value from a stock index, a
particular stock or a defined basket of stocks.
The credit risk and amount of accounting loss of the NSSP's forward
contracts is equal to any gains which have not been settled as of the
NSSP's year end. The credit risk of the NSSP's futures contracts is equal
to the posted margin plus any unsettled positive variation margin. The
amount of accounting loss at year end is equal to any variation margin owed
to the NSSP.
All derivative activity relating to the NSSP is within the Master Trust
pooled accounts. The Master Trust pooled accounts' derivative activity is
allocated to the NSSP in accordance with the NSSP's Fund options'
respective percentages of interest (see Note 3). The following disclosures
regarding the notional values, fair values, average fair values and net
trading gains are reported for the NSSP.
18
<PAGE>
BELL ATLANTIC SAVINGS and SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
The notional values and fair values of the derivative activity used for
trading purposes held by the NSSP at December 31, were as follows:
<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Domestic Equity Futures Contracts:
Notional values $2,817 $ 873
Fair values 2,973 881
Fixed Income Futures Contracts:
Notional values -- 29
Fair values -- 29
Forward Foreign Currency Payable Contracts:
Notional values 147 180
Fair values 152 172
Forward Foreign Currency Receivable Contracts:
Notional values 147 180
Fair values 151 179
</TABLE>
The average fair values of the derivative activity used for trading
purposes held by the NSSP during the years ended December 31, were as
follows:
<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Average Fair Values:
Domestic Equity Futures Contracts $2,067 $ 627
Fixed Income Futures Contracts -- 39
Forward Foreign Currency Payable Contracts 198 142
Forward Foreign Currency Receivable Contracts 199 147
</TABLE>
The NSSP was allocated net trading gains from futures contracts of $805 and
$4,366 in 1998 and 1997, respectively. Net trading (losses)/gains allocated
to the NSSP from foreign exchange contracts totalled $16,521 and $16 in
1998 and 1997, respectively.
5. NUMBER AND VALUE OF UNITS
The interest of an employee in each Fund of the NSSP, with the
exception of the Loan Fund, is represented by units as described in
Section 8 of the NSSP plan document. In the first six months of 1998, a
participant's unit value is determined daily by dividing each Fund's
adjusted net assets, as defined in the NSSP, by the number of
outstanding units. Effective July 1, 1998, unit values reflect a Fund's
gross asset value, but the unit value is not calculated to be net of
expenses chargeable to the Fund. Effective July 1, 1998, therefore, the
19
<PAGE>
BELL ATLANTIC SAVINGS and SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
disbursement of plan expenses from the Master Trust results in a
commensurate reduction in the number of units each participant holds in
his/her account.
The number and value of units at December 31, 1998 and 1997, carried to the
fourth decimal place, were as follows:
<TABLE>
<CAPTION>
1998
-----------------------------
NUMBER VALUE
OF UNITS PER UNIT
----------- -------------
<S> <C> <C>
Bell Atlantic Shares Fund 128,123,680 $ 16.9939
Government Money Market Fund 661,149 10.5604
Telecommunications Fund 8,161,884 27.7915
Passive International Equity Index Fund 500,665 12.4754
Passive U.S. Equity Index Fund 13,388,600 28.9444
U.S. Bond Market Index Fund 1,818,877 10.8523
Income Fund 36,112,807 12.0578
Active U.S. Equity Fund 2,749,377 25.2970
U.S. Balanced Fund 1,382,199 21.1670
Global Balanced Fund 1,124,442 20.4128
Active International Equity Fund 970,159 13.9070
U.S. Small Capitalization Fund 2,025,683 19.9819
<CAPTION>
1997
----------------------------
NUMBER VALUE
OF UNITS PER UNIT
----------- ------------
<S> <C> <C>
Bell Atlantic Shares Fund 185,487,680 $ 9.9095
Telecommunications Fund 17,275,998 9.8449
Government Obligations Fund 4,859,806 1.4935
Diversified Equity Portfolio 102,711,664 2.9637
Interest Income Fund 79,921,647 5.6293
Active U.S. Equity Fund 27,790,092 2.2225
U.S. Balanced Fund 12,508,651 1.8392
Global Balanced Fund 11,933,035 1.7907
International Equity Fund 10,800,729 1.3481
U.S. Small Cap Fund 21,706,927 1.9290
</TABLE>
20
<PAGE>
BELL ATLANTIC SAVINGS AND SECURITY PLAN
FOR ASSOCIATES OF BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
The number and value of units at each month end, which are unaudited, carried to
the fourth decimal place, were as follows:
<TABLE>
<CAPTION>
Bell Atlantic Shares Telecommunications Government Money Market Passive US Equity Fund
Fund Fund Fund
----------------------- ---------------------- ---------------------------------------------------
1998 Number of Value per Number of Value per Number of Value per Number of Value per
Units Unit Units Unit Units Unit Units Unit
- ------------ -----------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January 185,229,529 $ 14.5203 16,977,695 $ 19.3796 770,718 10.0420 103,131,701 $ 22.7984
February 185,747,124 14.0786 16,806,269 19.5841 826,571 10.0876 104,880,952 24.4428
March 185,547,666 16.0701 16,563,716 21.7450 912,197 10.1371 105,128,907 25.6766
April 186,439,897 14.7930 16,413,965 20.7986 983,219 10.1824 105,658,395 25.9397
May 188,246,190 14.4830 16,235,731 20.6102 894,756 10.2263 103,600,441 25.4915
June 188,131,822 14.4218 16,111,570 20.8766 1,254,402 10.2756 102,754,437 26.5039
July 131,051,021 14.4636 8,590,225 21.6795 173,976 10.3245 13,436,339 26.2392
August 130,211,251 14.0618 8,479,053 19.3386 309,116 10.3764 13,293,905 22.4414
September 129,179,841 15.4288 8,395,826 21.4354 444,913 10.4130 13,147,690 23.8416
October 127,765,984 17.0391 8,281,334 22.2886 734,586 10.4562 12,998,954 25.7863
November 127,530,543 17.8352 8,211,863 24.2832 712,934 10.5137 13,292,864 27.3340
</TABLE>
<TABLE>
<CAPTION>
U.S. Bond Market Index Income Fund Passive International Active U.S. Equity Fund
Fund Equity Fund
--------- --------- ---------- --------- --------- --------- ---------- ----------
Number of Value per Number of Value per Number of Value per Number of Value per
1998 Units Unit Units Unit Units Unit Units Unit
--------- --------- ---------- --------- --------- --------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January 5,565,661 $ 10.1280 79,094,304 $ 11.4030 461,191 10.4489 28,984,409 $ 22.0117
February 5,238,432 10.0948 76,421,168 11.4588 641,289 11.1234 30,531,732 23.6403
March 5,287,493 10.1301 75,752,466 11.5171 944,599 11.5717 31,406,573 24.8632
April 5,491,171 10.1799 73,904,730 11.5735 1,033,180 11.7343 32,016,484 24.9457
May 5,590,590 10.2740 72,856,967 11.6324 1,060,010 11.9268 31,581,766 24.3490
June 5,917,696 10.3638 72,319,360 11.6915 1,033,863 12.0044 31,608,873 24.8561
July 852,008 10.3866 35,300,105 11.7525 115,403 12.1440 3,169,448 24.0303
August 948,876 10.5643 35,439,687 11.8138 125,779 10.5998 3,128,992 20.1161
September 1,352,010 10.8213 36,022,435 11.8747 228,184 10.2894 3,058,508 21.3394
October 1,940,970 10.7564 36,953,286 11.9361 248,692 11.4226 2,926,241 22.8298
November 1,758,029 10.8002 36,487,412 11.9961 362,716 12.0283 2,824,611 24.0525
</TABLE>
<TABLE>
<CAPTION>
Active International U.S. Small
U.S. Balanced Fund Global Balanced Fund Equity Fund Capitalization Fund
---------------------- ---------------------- ---------------------- ------------------------
Number of Value per Number of Value per Number of Value per Number of Value per
1998 Units Unit Units Unit Units Unit Units Unit
- ---------- ---------- --------- ---------- --------- ---------- --------- ---------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January 13,189,331 $ 18.5684 12,050,371 $ 18.1248 10,690,750 13.7503 21,603,758 $ 19.4234
February 14,231,902 19.4193 12,175,381 19.0509 10,570,960 14.6056 22,149,093 21.0161
March 14,550,706 20.0747 12,203,850 19.7518 10,448,027 15.3316 22,433,637 21.8415
April 14,828,402 20.1461 12,356,622 19.8897 10,581,551 15.6692 22,726,911 22.3219
May 14,571,233 19.9665 12,246,140 19.6209 10,542,396 15.2099 22,465,285 21.1615
June 14,385,062 20.3110 12,224,188 19.8152 10,446,079 14.8515 22,410,826 21.3178
July 1,450,726 19.9115 1,221,370 19.5002 1,042,623 14.9344 2,202,958 19.6289
August 1,404,155 18.1021 1,194,883 17.4188 1,016,558 12.5228 2,143,416 15.7307
September 1,376,447 18.9704 1,173,472 18.0950 1,013,628 12.2756 2,128,232 16.6310
October 1,385,335 19.7653 1,142,421 19.0585 1,004,370 13.3365 2,164,139 17.4633
November 1,379,384 20.4791 1,130,542 19.8065 996,461 13.8731 2,154,650 18.6830
</TABLE>
21
<PAGE>
BELL ATLANTIC SAVINGS and SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
6. TAX DETERMINATION
On September 25, 1995, the Internal Revenue Service issued a ruling that
the NSSP meets the requirements of Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code") and is exempt from Federal income
taxes under the appropriate sections of the Code. The NSSP has been amended
since receiving the determination letter. However, the NSSP's administrator
and the NSSP's tax counsel believe that the NSSP is designed and is
currently being operated in compliance with the applicable requirements of
the Code.
7. RELATED PARTY TRANSACTIONS
BAAMCO, a wholly owned subsidiary of Bell Atlantic, is the investment
advisor for the Telecommunications Fund, Passive U.S. Equity Index Fund,
and Income Fund and therefore qualifies as a party-in-interest. BAAMCO
received no compensation from the NSSP for the investment advisory services
rendered.
8. CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject the NSSP to concentrations
of credit risk consist principally of investment contracts with insurance
companies and other financial institutions.
The NSSP places its investment contracts with high-credit quality insurance
companies and financial institutions in order to limit credit exposure. The
NSSP regularly monitors the financial stability of the financial
institutions and insurance companies.
9. PLAN AMENDMENTS
Effective July 1, 1998, the NSSP was amended for conforming changes in
certain administrative rules.
Effective January 1, 1998, the NSSP was amended to offer new investment
funds, and, to close the Telecommunications Fund (See Note 1).
On April 1, 1997, the NSSP was amended to provide that certain employees
who are NSSP participants and who are involuntarily terminated in
connection with the merger of NYNEX Corporation and Bell Atlantic
Corporation would be fully vested in their accrued benefit derived from
Employing Company contributions.
22
<PAGE>
BELL ATLANTIC SAVINGS and SECURITY PLAN FOR ASSOCIATES OF
BELL ATLANTIC NORTH
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
10. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The Department of Labor requires that amounts allocated to accounts of
persons who have elected to withdraw from the NSSP but have not yet been
paid be reported as liabilities on the plan's Form 5500. In accordance with
the relevant American Institute of Certified Public Accountants audit and
accounting guide, benefit amounts should not be accrued as liabilities of
the plan. The following is a reconciliation of distributions to
participants and net assets available for plan benefits in the financial
statements to the amounts reported in Form 5500.
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Aggregate distributions to participants as presented in the
Statement of Changes in Net Assets Available for Plan Benefits $ 260,595 $ 185,397
Add: Current year benefits claims payable presented in the
Statement of Net Assets Available for Plan Benefits in Form
5500 (see Note 2) 1,258 2,644
Less: Prior year benefits claims payable presented in the
Statement of Net Assets Available for Plan Benefits in Form
5500 (see Note 2) 2,644 2,031
---------- ----------
Benefit payments and payments to provide benefits directly to
Participants and beneficiaries presented in the Statement of
Changes in Net Assets Available for Plan Benefits in Form 5500 $ 259,209 $ 186,010
---------- ----------
---------- ----------
Net assets available for Plan benefits presented in the Statement
of Net Assets Available for Plan Benefits $3,587,751 $3,058,287
Less: Benefits claims payable presented in the Statement of Net
Assets Available for Plan Benefits in Form 5500 (see Note 2) 1,258 2,644
---------- ----------
Net assets available for Plan benefits presented in the Statement
of Net Assets Available for Plan Benefits in Form 5500 $3,586,493 $3,055,643
---------- ----------
---------- ----------
</TABLE>
23
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Bell
Atlantic Corporate Employees' Benefits Committee has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
Bell Atlantic Savings and Security Plan
for Associates of Bell Atlantic North
By: /s/ D.J. Sacco
-------------------------------------
D. J. Sacco
(Chairman, Bell Atlantic Corporate Employees'
Benefit Committee)
Date: June 30, 1999
24
