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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 (Date of earliest event reported): February 15, 2000
BELL ATLANTIC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8606 23-2259884
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1095 Avenue of the Americas
New York, New York 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 395-2121
Not applicable
(Former name or former address, if changed since last report)
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Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits.
99 Unaudited pro forma combined condensed financial statements for Bell
Atlantic Corporation and GTE Corporation for the nine-month period
ended September 30, 1999.
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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: February 15, 2000
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EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
99 Unaudited pro forma combined condensed financial statements for Bell
Atlantic Corporation and GTE Corporation for the nine-month period
ended September 30, 1999.
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EXHIBIT 99
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The unaudited pro forma financial statements that follow are for GTE
Corporation (GTE) and Bell Atlantic Corporation (Bell Atlantic) for the nine-
month period ended September 30, 1999 in connection with the proposed merger of
GTE and Bell Atlantic. You may find unaudited pro forma statements of income for
the years ended December 31, 1998, 1997 and 1996 and an unaudited pro forma
balance sheet at December 31, 1998 in the GTE and Bell Atlantic joint proxy
statement and prospectus filed with the Securities and Exchange Commission and
dated April 13, 1999. Bell Atlantic has supplied all information contained in
this Report on Form 8-K relating to Bell Atlantic and GTE has supplied all
information relating to GTE.
The following unaudited pro forma combined condensed financial statements
are presented assuming that the merger of GTE and Bell Atlantic will be
accounted for as a pooling of interests. Under this method of accounting, the
companies are treated as if they had always been combined for accounting and
financial reporting purposes. These unaudited pro forma financial statements
have been prepared from, and should be read in conjunction with, the historical
consolidated financial statements and accompanying notes of GTE and Bell
Atlantic, which are included in the companies' Annual Reports on Form 10-K for
the year ended December 31, 1998 and quarterly reports on Form 10-Q for the
quarterly periods ended March 31, 1999, June 30, 1999, and September 30, 1999.
The unaudited pro forma financial information is presented for illustration
purposes only and is not necessarily indicative of the operating results or
financial position that would have occurred if the merger had been completed at
the dates indicated. The information does not necessarily indicate the future
operating results or financial position of the combined company.
We prepared the following unaudited pro forma financial data by adding or
combining the historical amounts of each company and adjusting the combined
amounts for significant differences in accounting methods used by each company.
These adjustments are described in the accompanying notes to the financial
statements. We prepared the unaudited pro forma combined balance sheet by
combining the balance sheets of GTE and Bell Atlantic at September 30, 1999,
giving effect to the merger as if it had occurred on September 30, 1999. The
unaudited pro forma combined condensed statement of income gives effect to the
merger as if it had occurred at the beginning of the earliest period presented.
The terms of the merger specify that each share of GTE common stock will be
converted into the right to receive 1.22 shares of combined company common
stock. This exchange ratio was used in computing certain of the pro forma
adjustments and in computing share and per share amounts in the accompanying
unaudited pro forma financial information.
Cautionary Statement Concerning Forward-Looking Statements
This pro forma financial information contains forward-looking statements.
These statements are based on our estimates and assumptions and are subject to
risks and uncertainties. Forward-looking statements include the information
concerning our possible or assumed future results of operations. Forward-looking
statements also include those preceded or followed by the words "anticipates,"
"believes," "estimates," "hopes" or similar expressions. For those statements,
we claim the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
The following important factors could affect future results and could cause
those results to differ materially from those expressed in the forward-looking
statements:
. materially adverse changes in economic conditions in the markets served by
us or by companies in which we have substantial investments;
. material changes in available technology;
. the final outcome of federal, state, and local regulatory initiatives and
proceedings, including arbitration proceedings, and judicial review of
those initiatives and proceedings, pertaining to, among other matters, the
terms of interconnection, access charges, universal service, and unbundled
network element and resale rates;
. the extent, timing, success, and overall effects of competition from others
in the local telephone and toll service markets;
. the timing and profitability of our entry into the in-region long distance
market;
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. the timing of, and regulatory or other conditions associated with, the
completion of the merger with GTE and our ability to combine operations and
obtain revenue enhancements and cost savings following the merger; and
. the timing of, and regulatory or other conditions associated with, the
completion of the wireless transaction with Vodafone AirTouch, and the
ability of the new wireless enterprise to combine operations and obtain
revenue enhancements and cost savings.
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COMBINED COMPANY
PRO FORMA COMBINED CONDENSED BALANCE SHEET
September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Historical Historical Pro Forma Pro Forma
(Dollars in Millions) Bell Atlantic GTE Adjustments Combined
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Current assets
Cash and temporary cash investments $ 299 $ 3,572 $ $ 3,871
Receivables, net 6,929 4,753 11,682
Net assets held for sale --- 1,752 1,752
Other current assets 1,669 1,449 (205) (3b)
65 (3e) 2,978
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8,897 11,526 (140) 20,283
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Plant, property and equipment, net 38,359 22,220 (175) (3d) 60,404
Investments in unconsolidated businesses 5,919 3,880 9,799
Other assets 5,847 10,639 16,486
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Total assets $59,022 $48,265 $ (315) $106,972
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Liabilities and Shareowners' Investment
Current liabilities
Debt maturing within one year $ 3,286 $ 7,105 $ $ 10,391
Accounts payable and accrued liabilities 6,550 5,622 12,172
Other current liabilities 1,533 935 170 (3b) 2,638
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11,369 13,662 170 25,201
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Long-term debt 17,463 14,278 31,741
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Employee benefit obligations 9,661 4,317 13,978
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Deferred credits and other liabilities 5,020 5,085 (67) (3e) 10,038
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Shareowners' investment
Common stock (2,767,321,285 shares) 158 50 69 (3a) 277
Contributed capital 13,533 8,624 (1,385) (3a) 20,772
Reinvested earnings 2,757 4,399 (310) (3b)
(108) (3d) 6,738
Accumulated other comprehensive income (loss) 174 (367) (193)
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16,622 12,706 (1,734) 27,594
Less common stock in treasury, at cost 632 1,316 (1,316) (3a) 632
Less deferred compensation - employee
stock ownership plans 481 467 948
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Total shareowners' investment 15,509 10,923 (418) 26,014
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Total liabilities and shareowners' investment $59,022 $48,265 $ (315) $106,972
================================================================
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
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COMBINED COMPANY
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
For the Nine Months ended September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Historical Historical Pro Forma Pro Forma
(Dollars in Millions, Except Per Share Amounts) Bell Atlantic GTE Adjustments Combined
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating revenues $24,566 $18,595 $43,161
Operating expenses 18,223 13,074 $(27) (3d) 31,270
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Operating income 6,343 5,521 27 11,891
Income from unconsolidated businesses 124 311 435
Other income and (expense), net 35 (49) (14)
Interest expense 939 973 1,912
Provision for income taxes 2,074 1,754 10 (3e) 3,838
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Income from continuing operations $ 3,489 $ 3,056 $ 17 $ 6,562
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Basic Earnings Per Common Share
Income from continuing operations per common share $ 2.25 $ 3.14 $ 2.39
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Weighted-average shares outstanding (in millions) 1,553 973 214 (3c) 2,740
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Diluted Earnings Per Common Share
Income from continuing operations per common share $ 2.21 $ 3.12 $ 2.36
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Weighted-average shares - diluted (in millions) 1,583 980 215 (3c) 2,778
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</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
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Notes to Unaudited Pro Forma Combined Condensed Financial Statements
Note 1 - Reclassifications
Reclassifications have been made to the historical financial statements to
conform to the presentation expected to be used by the combined company.
Note 2 - Exchange Ratio
The terms of the merger agreement specify that each outstanding share of GTE
common stock will be converted into 1.22 shares of combined company common
stock. This exchange ratio was used in computing share and per share amounts in
the accompanying pro forma financial information.
Note 3 - Pro Forma Adjustments
(a) A pro forma adjustment has been made to reflect the issuance of 1,191
million shares of combined company common stock in exchange for all
outstanding shares of GTE common stock as per the exchange ratio stated in
Note 2, above. The adjustment also reflects the cancellation of shares of
GTE treasury stock, but does not reflect the impact of fractional shares.
(b) A pro forma adjustment has been made to reflect direct incremental merger-
related costs. Amounts anticipated to be incurred (approximately $170
million) have been shown as an increase to "Other current liabilities."
Amounts incurred through September 30, 1999 by GTE and Bell Atlantic
(approximately $205 million) have been shown as a reduction to "Other
current assets." The after-tax cost of this anticipated charge
(approximately $310 million) has been reflected as a reduction in
"Reinvested earnings." See "Unaudited Pro Forma Combined Condensed
Financial Statements" for more information related to merger-related costs.
(c) Pro forma adjustments have been made to the number of weighted average
shares outstanding used in the calculation of basic and diluted earnings
per share. The number of weighted average shares outstanding reflects the
conversion of shares and share equivalents of GTE common stock into
combined company common stock in accordance with the merger agreement.
(d) Pro forma adjustments have been made to conform GTE's accounting policies
for certain computer software costs to Bell Atlantic's policies.
(e) Pro forma adjustments have been made for the estimated tax effects of the
adjustments discussed in (b) and (d) above.
(f) There are no significant intercompany transactions between GTE and Bell
Atlantic.
