<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: January 24, 2000
(Date of earliest event reported)
BELL ATLANTIC CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-8606 23-2259884
(State or other jurisdiction of incorporation) (Commission file number) (I.R.S. employer identification no.)
</TABLE>
1095 Avenue of the Americas
New York, New York 10036
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (212) 395-2121
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
------------
Attached as an exhibit is the press release and financial tables issued by Bell
Atlantic Corporation on January 24, 2000 announcing earnings for the fourth
quarter of 1999 and the year ended December 31, 1999 and contained in its
Investor Relations Bulletin.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits.
99 Press Release and financial tables, dated January 24, 2000, 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: January 25, 2000
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
99 Press Release and financial tables, dated January 24, 2000, issued by
Bell Atlantic Corporation and contained in its Investor Relations
Bulletin.
<PAGE>
EXHIBIT 99
NEWS RELEASE [LOGO OF BELL ATLANTIC]
FOR IMMEDIATE RELEASE Contact:
January 24, 2000 Dave Frail
212-395-7726
[email protected]
----------------------------
Jim Crosson
212-395-2285
[email protected]
--------------------------------
Bell Atlantic Announces Fifth Consecutive Year
Of Double-Digit Earnings Growth;
Fourth Quarter Revenues Rise 6.6% on Strong Sales
Adjusted EPS Increases 11.6% for Quarter, 10.7% for Year
NEW YORK - Bell Atlantic Corp. (NYSE: BEL) announced today that fourth
quarter adjusted earnings per diluted share (EPS) increased 11.6 percent, to 77
cents from 69 cents in fourth quarter 1998, as the company completed its fifth
consecutive year of double-digit earnings growth. Adjusted EPS for 1999 rose
10.7 percent to $3.01, from $2.72 in 1998.
Fourth quarter adjusted net income available to common shareowners
increased 12.3 percent, to $1.2 billion from $1.1 billion in 1998, with 1999
adjusted net income available to common shareowners rising 10.9 percent, to $4.8
billion from $4.3 billion in 1998.
"Our fourth quarter results, with the best revenue growth of the year in
our core telecom business and industry-leading wireless performance, are an
indication that the strategies we've put in place -- to focus on high-growth
markets, build high-efficiency networks that help us grow vertically and
diversify our revenue streams - are starting to pay off at the operational
level," said Bell Atlantic Chairman and CEO Ivan Seidenberg.
Highlights include:
<PAGE>
Bell Atlantic Earnings Release, p. 2
. Quarterly revenue growth of 6.6 percent, to $8.6 billion, and annual revenues
totaling $33.2 billion, up 5.1 percent.
. Strong fourth quarter Bell Atlantic Mobile growth, with 815,000 net customer
additions, 363,000 through sales and 452,000 through the Frontier Cellular
acquisition, and 23.1 percent revenue growth.
. Best-ever quarterly International Wireless growth, with 533,000 proportionate
net customer additions.
. Data revenue growth in the quarter of 26.2 percent, to nearly $800 million,
and 25.5 percent for the year, to $2.9 billion.
. A robust wholesale business, with 1.4 million resold lines and 200,000
unbundled loops in service at the end of the year.
. Adjusted expense increases of only 3.1 percent for the quarter and 3.6
percent for the year, including aggressive funding of growth investments.
. Operating margin expansion to 26.2 percent for the year -- 110 basis points
above 1998 -- through cost controls, network efficiencies and $750 million in
Bell Atlantic-NYNEX merger synergies.
"Not only did we deliver on our financial targets, we had an outstanding
year strategically," Seidenberg said.
"In December we finally won approval to offer long distance, and three
weeks after opening for business in New York, I can report that customer
response is even better than we expected. We're also making regulatory progress
throughout our region, and our goal is to file in several more states this year.
"The other side of the LD coin is the thriving business we're building for
network services. We believe that competition expands markets, and we've opened
our network because it creates opportunities for us, not just in long distance,
but as a wholesale provider as well. We're retaining a substantial amount of New
York's consumer traffic on our high-efficiency network, and we're very excited
about this growing line of business.
"We expanded our data capabilities with network upgrades, targeted
acquisitions and alliances, and especially our investment in Metromedia Fiber
Network, which will enable us to deliver broadband services end-to-end to 50
cities throughout the country.
"Our Wireless Group's results make us eager to complete our transaction
with Vodafone AirTouch and, with GTE, create a national wireless competitor with
unparalleled coverage, customers and capacity. We're moving quickly, and we're
confident we will be in a position to launch the new company this spring.
"And we continued to make progress on the most important strategic
initiative of all: our
<PAGE>
Bell Atlantic Earnings Release, p. 3
merger with GTE. The state approval process is nearly complete, our discussions
with the FCC continue, and we aim for Bell Atlantic and GTE to be one company
around the end of the first quarter.
"We're looking forward to this year," Seidenberg said, "when our long
distance, DSL and national wireless businesses get up to full speed, and we
complete the transformation of Bell Atlantic and GTE into the nation's leading
communications company, with the most complete set of assets serving the best
markets in the industry."
Proportionate revenues, which include Bell Atlantic's share of revenues
from unconsolidated wireless investments, rose 7.5 percent for the quarter and
6.6 percent for the year.
Reported results include charges in each period for special items. Charges
in fourth quarter 1998 totaled 4 cents a share for Bell Atlantic-NYNEX merger
transition costs. Charges in fourth quarter 1999 were $67 million, or 4 cents
per share, for Bell Atlantic-NYNEX merger transition costs and a non-cash,
after-tax charge of $432 million, or 27 cents per share, which is a non-
operating "mark-to-market" accounting adjustment related to the company's $3.2
billion in notes exchangeable into shares of Cable & Wireless Communications plc
(CWC). The CWC notes may be exchanged beginning in July 2002.
This non-cash charge reflects the difference between the market price of
the underlying CWC shares at the end of the fourth quarter and the exchange
price. Generally Accepted Accounting Principles require that this difference be
recorded as an increase in the company's liability for the notes and a charge to
income. The company will make such an accounting adjustment in future quarters,
recording either a gain or loss, to reflect any difference between the CWC
market price and the exchange price at the end of the quarter (no adjustment is
required if the market price is below the exchange price).
Charges in 1999 totaled 35 cents per share, for the mark-to-market
adjustment and merger transition charges. Charges in 1998 totaled 86 cents per
share, primarily for completion of a retirement incentive program, write-downs
of certain international investments, and merger transition charges.
Reported fourth quarter 1999 net income available to common shareowners was
$719 million, or 45 cents per share, compared to $1.0 billion, or 65 cents per
share, in fourth quarter 1998. Reported 1999 net income available to common
shareowners was $4.2 billion, or $2.65 per share, compared to $2.9 billion, or
$1.86 per share, in 1998.
<PAGE>
Bell Atlantic Earnings Release, p. 4
Domestic Telecom Highlights
Healthy demand for core communications services and robust demand for new
data services enabled the Domestic Telecom Group to grow revenues 3.5 percent
over fourth quarter 1998, and 3.0 percent for the year. The number of voice-
grade equivalents (access lines plus data circuits) in service grew 13.2 percent
to 64.5 million, with access lines in service growing 3.1 percent to 43 million.
Access minutes of use increased 4.2 percent in the quarter and 5.0 percent for
the full year.
Nearly 80 percent of Domestic Telecom revenue growth for the quarter and
the year came from sales of data services. Data revenues, including those from
high-bandwidth packet-switched and special access services and Bell Atlantic's
network integration business, reached almost $2.9 billion for the year, 25.5
percent over 1998 levels.
The demand for digital connectivity and value-added features continued to
grow in all markets. In the enterprise (large business) and general business
markets:
. The number of "DS0" circuits in service (digital, high-bandwidth and packet-
switched services as measured in 64-kilobit voice-grade equivalents)
increased 39.6 percent over year-end 1998, to 23.2 million.
. Bell Atlantic's Data Solutions Group revenues increased 38.4 percent over
fourth quarter 1998, to almost $119 million.
. The company continued to expand its product offerings to help large business
customers manage their complex data networks, and introduced Managed Frame
Access Service, which delivers frame relay services with Bell Atlantic-
managed advanced routing.
In consumer markets:
. By the end of the year, Bell Atlantic had equipped wire centers serving
nearly 7 million qualified households for Infospeed(sm) DSL, the company's
high-bandwidth Internet access service, and began marketing the service to
4.3 million of them. The company aims to have 10 million households qualified
by the end of first quarter, approximately half of all households in its
service territory. Bell Atlantic ended the year with approximately 30,000
Infospeed DSL subscribers.
. Vertical service revenues continued to grow as customers purchased new
packages combining Caller ID, Return Call, Call Waiting, Home Voice Mail and
other features. Consumer Caller ID revenues increased 26.5 percent in 1999,
as the number of subscribers increased to 7.5 million, and Home Voice Mail
revenues rose 9.8 percent. The company also
<PAGE>
Bell Atlantic Earnings Release, p. 5
expanded its portfolio of value-added services to include Talking Call
Waiting and Internet Call Manager.
In network services markets:
. At the end of 1999, Bell Atlantic was providing other carriers with
approximately 1.4 million resold access lines and 200,000 unbundled loops.
. Special access revenues for the year increased 26.3 percent to $1.9 billion.
Domestic Telecom's adjusted fourth quarter operating expenses of $5.1
billion were 1.1 percent above fourth quarter 1998 levels, with cash expenses
decreasing 0.8 percent. For the year, operating expenses totaled $19.8 billion,
1.2 percent above 1998 levels, with cash expenses decreasing one-half of one
percent. The Group produced these results while absorbing costs for long
distance entry, construction of a regional long distance network, Y2K
compliance, and interconnection payments to competitive local exchange carriers.
Wireless Group Highlights
Bell Atlantic's Wireless Group enjoyed one of its strongest fourth quarters
ever, with record subscriber growth for Bell Atlantic Mobile (BAM) and record
growth in new customers in the Group's International Wireless portfolio.
The Wireless Group ended the year with 12 million global proportionate
wireless subscribers, up 39.1 percent over year-end 1998. The figure includes
452,000 added through BAM's acquisition of Frontier Cellular properties in
upstate New York in December. Proportionate net customer additions in the
quarter totaled 954,000 (excluding the Frontier customers), 30.5 percent more
than in fourth quarter 1998, with BAM totaling 363,000 net additions, 20.2
percent more than in the prior-year period. The Group's proportionate net
customer additions for the year totaled 2.7 million, 23.4 percent more than in
1998.
Total proportionate wireless revenues increased 27.5 percent in the quarter
to $1.6 billion, and totaled $5.9 billion for the year, 28 percent higher than
1998. Proportionate operating income reached $293 million in the fourth quarter,
an increase of 50.3 percent over fourth quarter 1998, with proportionate
operating cash flow increasing 32 percent to $536 million. Full-year operating
income totaled $1.1 billion, up 41.2 percent over 1998, with full-year
operating cash flow increasing 29.3 percent to $1.9 billion.
<PAGE>
Bell Atlantic Earnings Release, p. 6
During the quarter, Bell Atlantic, GTE and Vodafone AirTouch continued to
move ahead with the creation of the nation's premier wireless business, as the
U.S. Department of Justice cleared the wireless combination subject to a consent
decree providing for the resolution of overlapping wireless properties. Bell
Atlantic and Vodafone AirTouch also have increased to 100 percent their
ownership of the partnerships operating PrimeCo Personal Communications LP's
Texas markets -- Dallas/Fort Worth, San Antonio and Houston -- by acquiring TXU
Communications' 20 percent interest. PrimeCo will become part of its partners'
national wireless venture.
Other domestic highlights:
. Bell Atlantic Mobile closed out the quarter with 7.7 million customers, up 24
percent from 1998. Quarterly revenues grew 23.1 percent over fourth quarter
1998, to $1.1 billion. For the year, BAM revenues year grew 18.9 percent to
$4.1 billion.
. Underscoring the quality of its network performance and overall customer
service, BAM won numerous service awards during the year, including the
highest customer rating in the Yankee Group 1999 Mobile User Survey; the
highest ranking from the J.D. Power and Associates 1999 U.S. Wireless
Customer Satisfaction Study(sm) in New York and Boston; first place for
customer satisfaction in the 1999 Solomon-Wolff Associates annual customer
research survey and Wireless Week's Overall Excellence Award for 1999.
. The primary force behind BAM's strong 1999 growth was the company's popular
digital wireless services. More than 70 percent of all new retail customers
and nearly 40 percent of BAM's total base now subscribe to CDMA digital
services, generating 72 percent of the company's busy-hour network usage. BAM
continued its aggressive rollout of new digital voice and data service
offerings, including:
. Web Access service, featuring Web-enabled digital wireless phones that
allow customers to surf the Web.
. Share-A-Minute(sm), which allows families and small businesses to share
monthly access and local airtime minutes among multiple phones -- all on
one bill.
. "Call Me" service, an option freeing wireless customers from paying for
incoming calls received in their local service area.
. On Jan. 18, BAM and GTE Wireless announced they have been selected by General
Motors to establish a nationwide wireless network that will support expansion
of its OnStar in-vehicle services to include personal calling and Internet
access. OnStar estimates that more than four million vehicles will be
equipped with access to its communications services in the next three years.
<PAGE>
Bell Atlantic Earnings Release, p. 7
. At PrimeCo Personal Communications, total revenues for the quarter grew 49.6
percent over fourth quarter 1998, to $230 million, with average monthly
revenue per subscriber of $49. Full-year revenues were $841 million, compared
to $509 million in 1998. Average monthly revenue per subscriber for the year
was $51.
. During the quarter, PrimeCo grew its customer base to 1.4 million, 53.2
percent over year-end 1998. PrimeCo ended the year with a 3.3 percent
penetration rate of covered POPs.
Bell Atlantic's international wireless portfolio ended 1999 with 3.6
million proportionate subscribers, up 83.7 percent over year-end 1998.
International proportionate net subscriber additions of 533,000, 58.6 percent
more than in fourth quarter 1998, represented more than half of Bell Atlantic's
total wireless customer growth. Net international customer growth for the year
was 1.4 million, 32.1 percent higher than in 1998.
Proportionate international revenues for the quarter were $378 million, 37
percent higher than fourth quarter 1998, bringing the full-year total to $1.3
billion, $472 million more than 1998. Proportionate operating income doubled
over fourth quarter 1998, to $82 million, with proportionate operating cash flow
growing 62.7 percent to $135 million. For the year, proportionate operating
income was $302 million, with proportionate operating cash flow of $465 million.
International highlights:
. Omnitel Pronto Italia added a record 4.2 million customers in 1999, driving
its total to more than 10.4 million, a 68 percent increase over the prior
year. On New Year's Day, OPI's network successfully processed 100 million
voice and 18 million SMS calls.
. EuroTel Praha added 120,000 customers in December, a new monthly subscriber
growth record for the Czech Republic, closing out the year with 1.1 million
subscribers. During the fourth quarter the company launched the country's
first Internet access service using WAP (Wireless Application Protocol)
technology.
. Grupo Iusacell ended 1999 with more than 1.3 million customers, an increase
of 77 percent over 1998. Digital subscribers now total more than 16 percent
of Iusacell's customer base. The company recently placed a US$350 million
bond offering to help fund capital expenditures, expand digital capacity and
increase coverage.
. STET Hellas grew its customer base 71.8 percent over the previous year and
ended 1999 with 1.2 million customers. Net subscriber additions for 1999
increased 66 percent, including 148,000 in the fourth quarter. Through the
introduction of new pricing plans and aggressive
<PAGE>
Bell Atlantic Earnings Release, p. 8
promotion of Greece's only prepaid roaming product, the company's prepaid
customers grew to 62 percent of its total base.
***
Bell Atlantic is at the forefront of the new communications and information
industry. With nearly 44 million telephone access lines and 12 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.
INTERNET USERS: Further information on quarterly results is available at Bell
Atlantic's News Center or Investor Information sites on the World Wide Web
(www.ba.com and www.bellatlantic.com/invest) or through Fax on Demand at 800-
---------------------------
329-7310. To receive news releases by email, visit the News Center and register
for personalized automatic delivery of Bell Atlantic news releases.
NOTE: This press release contains statements about expected future events and
financial results that are forward-looking and subject to risks and
uncertainties. For those statements, we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. The following important factors could affect future results
and could cause those results to differ materially from those expressed in the
forward-looking statements: materially adverse changes in economic conditions in
the markets served by us or by companies in which we have substantial
investments; material changes in available technology; the final outcome of
federal, state, and local regulatory initiatives and proceedings, including
arbitration proceedings, and judicial review of those initiatives and
proceedings, pertaining to, among other matters, the terms of interconnection,
access charges, universal service, and unbundled network element and resale
rates; the extent, timing, success, and overall effects of competition from
others in the local telephone and toll service markets; the timing and
profitability of our entry into the in-region long distance market; the timing
of, and regulatory or other conditions associated with, the completion of the
merger with GTE and our ability to combine operations and obtain revenue
enhancements and cost savings following the merger; and the timing of, and
regulatory or other conditions associated with, the completion of the wireless
transaction with Vodafone AirTouch, and the ability of the new wireless
enterprise to combine operations and obtain revenue enhancements and cost
savings.
<PAGE>
BELL ATLANTIC CORPORATION
- --------------------------------------------------
Consolidated Statements of Income - Reported Basis
- --------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
- ----------------------------------------------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,567 $ 3,512 1.6 $ 14,251 $ 13,816 3.1
Network access services 2,019 1,913 5.5 7,924 7,655 3.5
Long distance services 446 463 (3.7) 1,816 1,928 (5.8)
Ancillary services 613 519 18.1 2,172 2,026 7.2
Directory services 665 640 3.9 2,331 2,258 3.2
Wireless services 1,252 1,000 25.2 4,544 3,780 20.2
Other services 46 30 53.3 136 103 32.0
-------------------------------- --------------------------------
Total Operating Revenues 8,608 8,077 6.6 33,174 31,566 5.1
-------------------------------- --------------------------------
Operating Expenses
Employee costs 2,089 2,054 1.7 8,241 9,266 (11.1)
Depreciation and amortization 1,619 1,544 4.9 6,221 5,870 6.0
Other operating expenses 2,748 2,647 3.8 10,217 9,803 4.2
-------------------------------- --------------------------------
Total Operating Expenses 6,456 6,245 3.4 24,679 24,939 (1.0)
-------------------------------- --------------------------------
Operating Income 2,152 1,832 17.5 8,495 6,627 28.2
Income (loss) from
unconsolidated businesses 19 47 (59.6) 143 (415) (134.5)
Other income and (expense), net 19 23 (17.4) 54 122 (55.7)
Interest expense 324 303 6.9 1,263 1,335 (5.4)
Mark-to-market adjustment
for exchangeable notes (664) - - (664) - -
Provision for income taxes 483 538 (10.2) 2,557 2,008 27.3
-------------------------------- --------------------------------
Income from
Continuing Operations 719 1,061 (32.2) 4,208 2,991 40.7
Extraordinary item
Early extinguishment of debt,
net of tax - (2) - (6) (26) (76.9)
-------------------------------- --------------------------------
Net Income 719 1,059 (32.1) 4,202 2,965 41.7
Redemption of minority
interest - (30) - - (30) -
Redemption of investee
preferred stock - - - - (2) -
-------------------------------- --------------------------------
Net Income Available to
Common Shareowners $ 719 $ 1,029 (30.1) $ 4,202 $ 2,933 43.3
================================ ================================
Diluted Earnings per Share $ .45 $ .65 (30.8) $ 2.65 $ 1.86 42.4
Weighted average number of
common shares-assuming
dilution (in millions) 1,584 1,582 1,583 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.
1
<PAGE>
BELL ATLANTIC CORPORATION
- -------------------------
Earnings Reconciliations
- -------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
3 Mos. Ended 12/31/99 3 Mos. Ended 12/31/98
Net Income Net Income
Available to Common Available to Common
Unaudited Shareowners Diluted EPS Shareowners Diluted EPS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported Earnings $ 719 $ .45 $ 1,029 $ .65
Adjustments:
Transition costs 67 .04 56 .04
Mark-to-market adjustment
for exchangeable notes (1) 432 .27
--------------------------------------------------------------------------
Adjusted Earnings $ 1,218 $ .77 $ 1,085 $ .69
==========================================================================
Adjusted Growth 12.3% 11.6%
</TABLE>
<TABLE>
<CAPTION>
12 Mos. Ended 12/31/99 12 Mos. Ended 12/31/98
Net Income Net Income
Available to Common Available to Common
Unaudited Shareowners Diluted EPS Shareowners Diluted EPS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported Earnings $ 4,202 $ 2.65 $ 2,933 $ 1.86
Adjustments:
Transition costs 126 .08 121 .08
Mark-to-market adjustment
for exchangeable notes (1) 432 .27
Special pension enhancement 670 .42
Special charges 567 .36
--------------------------------------------------------------------------
Adjusted Earnings $ 4,760 $ 3.01 $ 4,291 $ 2.72
==========================================================================
Adjusted Growth 10.9% 10.7%
</TABLE>
Note: Total columns for Diluted EPS in 1999 do not add due to rounding in EPS
calculations
(1) This non-cash charge reflects the difference between the market price of
the underlying Cable & Wireless Communications, Plc (CWC) shares at the end
of the fourth quarter and the exchange price. Generally Accepted Accounting
Principles require that this difference be recorded as an increase in the
company's liability for the notes and a charge to income. The company will
make such an accounting adjustment in future quarters, recording either a
gain or loss, to reflect any difference between the CWC market price and
the exchange price at the end of the quarter (no adjustment is required if
the market price is below the exchange price).
2
<PAGE>
BELL ATLANTIC CORPORATION
- ----------------------------------------------------------------
Consolidated Statements of Income - Adjusted Basis - 4th Quarter
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
3 Months Ended 3 Months Ended
Unaudited 12/31/99 12/31/98 % Change
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $ 3,567 $ 3,512 1.6
Network access services 2,019 1,913 5.5
Long distance services 446 463 (3.7)
Ancillary services 613 519 18.1
Directory services 665 640 3.9
Wireless services 1,252 1,000 25.2
Other services 46 30 53.3
---------------------------------------
Total Operating Revenues 8,608 8,077 6.6
---------------------------------------
Operating Expenses
Employee costs 2,063 (1) 2,048 (4) .7
Depreciation and amortization 1,619 1,504 (5) 7.6
Other operating expenses 2,666 (2) 2,603 (6) 2.4
---------------------------------------
Total Operating Expenses 6,348 6,155 3.1
---------------------------------------
Operating Income 2,260 1,922 17.6
Income from unconsolidated businesses 19 47 (59.6)
Other income and (expense), net 19 23 (17.4)
Interest expense 324 303 6.9
Provision for income taxes 756 (3) 572 (7) 32.2
---------------------------------------
Income from Continuing Operations 1,218 1,117 9.0
Extraordinary item
Early extinguishment of debt, net of tax - (2) -
---------------------------------------
Net Income 1,218 1,115 9.2
Redemption of minority interest - (30) -
---------------------------------------
Net Income Available to
Common Shareowners $ 1,218 $ 1,085 12.3
=======================================
Diluted Earnings per Share $ .77 $ .69 11.6
Weighted average number of common
common shares-assuming dilution (in millions) 1,584 1,582
</TABLE>
Footnotes:
4th Quarter 99
(1) Excludes $26 million related to transition costs
(2) Excludes $82 million related to transition costs
(3) Excludes tax effects of (1) and (2) above
Note: Excludes mark-to-market adjustment for exchangeable notes
4th Quarter 98
(4) Excludes $6 million related to transition costs
(5) Excludes $40 million reclass adjustment related to international
investments
(6) Excludes $84 million related to transition costs partially offset by a $40
million reclass adjustment related to international investments
(7) Excludes tax effects of items (4), (5) and (6) above
3
<PAGE>
BELL ATLANTIC CORPORATION
- --------------------------------------------------------------
Consolidated Statements of Income - Adjusted Basis - Full Year
- --------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
12 Months Ended 12 Months Ended
Unaudited 12/31/99 12/31/98 % Change
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local services $ 14,251 $ 13,816 3.1
Network access services 7,924 7,655 3.5
Long distance services 1,816 1,928 (5.8)
Ancillary services 2,172 2,026 7.2
Directory services 2,331 2,258 3.2
Wireless services 4,544 3,780 20.2
Other services 136 103 32.0
---------------------------------------
Total Operating Revenues 33,174 31,566 5.1
---------------------------------------
Operating Expenses
Employee costs 8,183 (1) 8,200 (4) (.2)
Depreciation and amortization 6,221 5,830 (5) 6.7
Other operating expenses 10,070 (2) 9,598 (6) 4.9
---------------------------------------
Total Operating Expenses 24,474 23,628 3.6
---------------------------------------
Operating Income 8,700 7,938 9.6
Income from unconsolidated businesses 143 78 (7) 83.3
Other income and (expense), net 54 77 (8) (29.9)
Interest expense 1,263 1,288 (9) (1.9)
Provision for income taxes 2,868 (3) 2,456 (10) 16.8
---------------------------------------
Income from Continuing Operations 4,766 4,349 9.6
Extraordinary item
Early extinguishment of debt, net of tax (6) (26) (76.9)
---------------------------------------
Net Income 4,760 4,323 10.1
Redemption of minority interest - (30) -
Redemption of investee preferred stock - (2) -
---------------------------------------
Net Income Available to
Common Shareowners $ 4,760 $ 4,291 10.9
=======================================
Diluted Earnings per Share $ 3.01 $ 2.72 10.7
Weighted average number of common
common shares-assuming dilution (in millions) 1,583 1,578
</TABLE>
Footnotes:
1999
(1) Excludes $58 million related to transition costs
(2) Excludes $147 million related to transition costs
(3) Excludes tax effects of (1) and (2) above
Note: Excludes mark-to-market adjustment for exchangeable notes
1998
(4) Excludes $1,052 million related to special pension enhancement and
contracts and $14 million related to transition costs
(5) Excludes $40 million reclass adjustment related to international
investments
(6) Excludes $182 million related to transition costs and $23 million related
to special charges
(7) Excludes $485 million related to international investments and $8 million
related to special charges
(8) Excludes $45 million related to special charges
(9) Excludes $47 million related to special charges
(10) Excludes tax effects of (4) - (9) above
4
<PAGE>
BELL ATLANTIC CORPORATION
- -------------------------------------------
Selected Financial and Operating Statistics
- -------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except per share amounts)
3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Unaudited 12/31/99 12/31/98 12/31/99 12/31/98
- -------------------------------------------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Debt ratio-end of period 60.1% 61.2% 60.1% 61.2%
Return on average common equity-adjusted basis 30.9% 31.4% 32.3% 31.5%
Return on average assets-adjusted basis 8.0% 8.0% 8.3% 7.9%
Book value per common share $ 10.23 $ 8.42 $ 10.23 $ 8.42
Cash dividends declared per common share $ .385 $ .385 $ 1.54 $ 1.54
Common shares outstanding (in millions)
End of period 1,553 1,553 1,553 1,553
Capital expenditures
Domestic Telecom $ 2,530 $ 1,643 $ 7,498 $ 6,409
Domestic Cellular 248 259 953 702
Other 81 123 224 335
----------------------------------- ---------------------------------
Total $ 2,859 $ 2,025 $ 8,675 $ 7,446
=================================== =================================
Employees
Domestic Telecom 129,283 125,692 129,283 125,692
Other 16,133 14,747 16,133 14,747
----------------------------------- ---------------------------------
Total 145,416 140,439 145,416 140,439
=================================== =================================
</TABLE>
5
<PAGE>
BELL ATLANTIC CORPORATION
- ---------------------------
Consolidated Balance Sheets
- ---------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
Unaudited 12/31/99 12/31/98 $ Change
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 1,097 $ 237 $ 860
Short-term investments 839 786 53
Accounts receivable, net 7,025 6,560 465
Inventories 664 566 98
Prepaid expenses 673 522 151
Other 298 411 (113)
-----------------------------------------------------------
Total current assets 10,596 9,082 1,514
-----------------------------------------------------------
Plant, property and equipment 89,238 83,064 6,174
Less accumulated depreciation 49,939 46,248 3,691
-----------------------------------------------------------
39,299 36,816 2,483
-----------------------------------------------------------
Investments in unconsolidated businesses 6,275 4,276 1,999
Other assets 6,444 4,970 1,474
-----------------------------------------------------------
Total Assets $ 62,614 $ 55,144 $ 7,470
===========================================================
Liabilities and Shareowners' Investment
Current liabilities
Debt maturing within one year $ 5,455 $ 2,988 $ 2,467
Accounts payable and accrued liabilities 6,465 6,105 360
Other 1,547 1,438 109
-----------------------------------------------------------
Total current liabilities 13,467 10,531 2,936
-----------------------------------------------------------
Long-term debt 18,463 (1) 17,646 817
-----------------------------------------------------------
Employee benefit obligations 9,326 10,384 (1,058)
-----------------------------------------------------------
Deferred credits and other liabilities
Deferred income taxes 3,892 2,254 1,638
Unamortized investment tax credits 197 222 (25)
Other 730 551 179
-----------------------------------------------------------
4,819 3,027 1,792
-----------------------------------------------------------
Minority interest, including a portion subject to
redemption requirements 458 330 128
-----------------------------------------------------------
Preferred stock of subsidiary 201 201 -
-----------------------------------------------------------
Shareowners' investment
Common stock 158 158 -
Contributed capital 13,550 13,368 182
Reinvested earnings 2,806 1,371 1,435
Accumulated other comprehensive income (loss) 450 (714) 1,164
-----------------------------------------------------------
16,964 14,183 2,781
Less common stock in treasury, at cost 640 593 47
Less deferred compensation -
employee stock ownership plans 444 565 (121)
-----------------------------------------------------------
Total shareowners' investment 15,880 13,025 2,855
-----------------------------------------------------------
Total Liabilities and Shareowners' Investment $ 62,614 $ 55,144 $ 7,470
===========================================================
</TABLE>
(1) Includes mark-to-market adjustment for exchangeable notes
6
<PAGE>
BELL ATLANTIC CORPORATION
- -----------------------------------------------
Condensed Consolidated Statements of Cash Flows
- -----------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
12 Months Ended 12 Months Ended
Unaudited 12/31/99 12/31/98 $ Change
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Income $ 4,202 $ 2,965 $ 1,237
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,221 5,870 351
Deferred income taxes, net 928 264 664
Mark-to-market adjustment for
exchangeable notes 664 --- 664
(Income)/loss from unconsolidated businesses (143) 415 (558)
Dividends received from unconsolidated businesses 116 170 (54)
Amortization of unearned lease income (151) (120) (31)
Investment tax credits (25) (29) 4
Extraordinary items, net of tax 6 26 (20)
Other items, net 169 227 (58)
Changes in certain assets and liabilities, net of
effects from acquisition/disposition of businesses (1,331) 283 (1,614)
----------------------------------------------------
Net cash provided by operating activities 10,656 10,071 585
----------------------------------------------------
Cash Flows From Investing Activities
Net change in short-term investments (60) (60) -
Capital expenditures (8,675) (7,446) (1,229)
Proceeds from sale of plant, property and equipment 211 12 199
Investments in unconsolidated businesses, net (901) (603) (298)
Proceeds from disposition of businesses 612 637 (25)
Acquisition of businesses, less cash acquired (505) (62) (443)
Other investing activities, net (311) (163) (148)
----------------------------------------------------
Net cash used in investing activities (9,629) (7,685) (1,944)
----------------------------------------------------
Cash Flows From Financing Activities
Proceeds from borrowings 662 6,328 (5,666)
Principal repayments of borrowings and capital lease obligations (942) (651) (291)
Early extinguishment of debt (257) (790) 533
Net change in short-term borrowings with
original maturities of three months or less 2,645 (4,038) 6,683
Proceeds from financing of cellular assets 380 --- 380
Dividends paid (2,399) (2,379) (20)
Proceeds from sale of common stock 314 559 (245)
Purchase of common stock for treasury (723) (1,002) 279
Other financing activities, net 153 (499) 652
----------------------------------------------------
Net cash used in financing activities (167) (2,472) 2,305
----------------------------------------------------
Increase (decrease) in cash and cash equivalents 860 (86) 946
Cash and cash equivalents, beginning of period 237 323 (86)
----------------------------------------------------
Cash and cash equivalents, end of period $ 1,097 $ 237 $ 860
====================================================
</TABLE>
7
<PAGE>
BELL ATLANTIC CORPORATION
- ---------------------------------------------
Domestic Telecom - Selected Financial Results
- ---------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Unaudited 12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
- ---------------------------------------------------------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Local services $ 3,594 $ 3,529 1.8 $ 14,346 $ 13,882 3.3
Network access services 2,019 1,913 5.5 7,924 7,656 3.5
Long distance services 446 464 (3.9) 1,816 1,929 (5.9)
Ancillary services 606 534 13.5 2,236 2,090 7.0
-------------------------------- ----------------------------------
Total Operating Revenues 6,665 6,440 3.5 26,322 25,557 3.0
-------------------------------- ----------------------------------
Operating Expenses
Employee costs 1,834 1,807 1.5 7,275 7,298 (0.3)
Depreciation and amortization 1,418 1,333 6.4 5,505 5,195 6.0
Other operating expenses 1,842 1,897 (2.9) 6,994 7,047 (0.8)
-------------------------------- ----------------------------------
Total Operating Expenses 5,094 5,037 1.1 19,774 19,540 1.2
-------------------------------- ----------------------------------
Operating Income $ 1,571 $ 1,403 12.0 $ 6,548 $ 6,017 8.8
Operating Income Margin 23.6% 21.8% 24.9% 23.5%
Operating Cash Flow $ 2,989 $ 2,736 9.2 $ 12,053 $ 11,212 7.5
Operating Cash Flow Margin 44.8% 42.5% 45.8% 43.9%
</TABLE>
- --------------------------------------------------------------------------------
BELL ATLANTIC CORPORATION
Directory - Selected Financial Results
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)
3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Unaudited 12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
- ---------------------------------------------------------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues $ 669 $ 642 4.2 $ 2,338 $ 2,264 3.3
Operating Expenses
Employee costs 77 75 2.7 314 326 (3.7)
Depreciation and amortization 9 11 (18.2) 36 37 (2.7)
Other operating expenses 215 229 (6.1) 757 777 (2.6)
-------------------------------- ----------------------------------
Total Operating Expenses 301 315 (4.4) 1,107 1,140 (2.9)
-------------------------------- ----------------------------------
Operating Income $ 368 $ 327 12.5 $ 1,231 $ 1,124 9.5
Operating Income Margin 55.0% 50.9% 52.7% 49.6%
Operating Cash Flow $ 377 $ 338 11.5 $ 1,267 $ 1,161 9.1
Operating Cash Flow Margin 56.4% 52.6% 54.2% 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 1999 Annual
Report
Intercompany and intersegment transactions have not been eliminated.
8
<PAGE>
BELL ATLANTIC CORPORATION
- ---------------------------------------
Domestic Telecom - Operating Statistics
- ---------------------------------------
<TABLE>
<CAPTION>
3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Unaudited 12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
- -------------------------------------------------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Statistics
Switched access lines in service (000) (1)
Residence 26,883 26,137 2.9 26,883 26,137 2.9
Business 15,574 15,006 3.8 15,574 15,006 3.8
Public 514 521 (1.3) 514 521 (1.3)
----------------------------------------------------------------------------------------
Total 42,971 41,664 * 3.1 42,971 41,664 * 3.1
----------------------------------------------------------------------------------------
Voice grade equivalents (000) (2)
Residence 26,883 26,137 2.9 26,883 26,137 2.9
Business 37,614 30,828 22.0 37,614 30,828 22.0
----------------------------------------------------------------------------------------
Total 64,497 56,965 * 13.2 64,497 56,965 * 13.2
----------------------------------------------------------------------------------------
BRI ISDN lines (000) (3) 588 525 * 12.0 588 525 * 12.0
Access minutes of use (M) 46,009 44,164 4.2 181,604 173,004 5.0
Employees per 10,000 access lines (4) 28.8 28.9 (0.3) 28.8 28.9 (0.3)
High Capacity and Digital Data
Data Revenue ($ in millions)
Wideband transport (5) $ 486 $ 401 21.2 $ 1,813 $ 1,481 22.4
Fast packet and other (6) 194 146 32.9 702 523 34.2
Data solutions (7) 119 86 38.4 358 286 25.2
----------------------------------------------------------------------------------------
Total Revenues $ 799 $ 633 * 26.2 $ 2,873 $ 2,290 * 25.5
Data Volumes (000)
DSO Equivalents (8) 23,214 16,625 39.6 23,214 16,625 39.6
----------------------------------------------------------------------------------------
PRI ISDN (9) 1,174 823 42.6 1,174 823 42.6
Frame Relay (9) 911 599 52.1 911 599 52.1
ATM Cell Relay (9) 940 465 102.2 940 465 102.2
</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 & data
(6) Includes fast packet data transport services such as Frame Relay, SMDS and
ATM. Also includes ISDN, ADSL and internet revenue
(7) Revenues associated with our Data Solution - Retail business
(8) Includes digital DS0 and above circuits (e.g. Digital DS0, DS1, DS3),
including packet-based services, converted to a DSO or 64kbps signal, the
equivalent to one voice signal. DS1=24 DSOs, DS3=672 DSOs, OC3=2,106 DSOs,
OC12=8,424 DSOs, OC48=33,696 DSOs
(9) Volumes expressed as DSO equivalents
* Restated from amounts previously disclosed
9
<PAGE>
BELL ATLANTIC CORPORATION
- ---------------------------------------
Global Wireless - Proportionate Results
- ---------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except subscriber amounts)
3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Unaudited 12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
- ------------------------------------------------------------------------------------ ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Combined Global Wireless
Selected Financial Results
Revenues $ 1,621 $ 1,271 27.5 $ 5,859 $ 4,576 28.0
Operating income $ 293 $ 195 50.3 $ 1,072 $ 759 41.2
Operating cash flow (1) $ 536 $ 406 32.0 $ 1,939 $ 1,500 29.3
Selected Operating Data
Subscribers (000) 11,956 8,595 39.1 11,956 8,595 39.1
Subscriber net adds in period (000) 954 731 30.5 2,665 2,160 23.4
POPs (000) 188,792 180,477 4.6 188,792 180,477 4.6
- ------------------------------------------------------------------------------------ ----------------------------------------------
Bell Atlantic Mobile (2)
Selected Financial Results
Revenues $ 1,136 923 23.1 $ 4,139 3,481 18.9
Operating income $ 250 202 23.8 $ 900 820 9.8
Operating cash flow $ 408 343 19.0 $ 1,498 1,350 11.0
Selected Operating Data
Subscribers (000) 7,688 6,201 24.0 7,688 6,201 24.0
Subscriber net adds in period (000) 363 302 20.2 1,035 860 20.3
Controlled POPs (000) 62,958 57,190 10.1 62,958 57,190 10.1
- ------------------------------------------------------------------------------------ ----------------------------------------------
PrimeCo Personal Communications (3)
Selected Financial Data
Revenues $ 107 72 48.6 $ 391 238 64.3
Operating income $ (39) (48) 18.8 $ (130) (201) 35.3
Operating cash flow $ (7) (20) 65.0 $ (24) (100) 76.0
Selected Operating Data
Subscribers (000) 645 422 52.8 645 422 52.8
Subscriber net adds in period (000) 58 93 (37.6) 232 242 (4.1)
POPs (000) 28,634 28,487 0.5 28,634 28,487 0.5
- ------------------------------------------------------------------------------------ ----------------------------------------------
International Wireless Operations (4)
Selected Financial Data
Revenues $ 378 276 37.0 $ 1,329 857 55.1
Operating income $ 82 41 100.0 $ 302 140 115.7
Operating cash flow $ 135 83 62.7 $ 465 250 86.0
Selected Operating Data
Subscribers (000) 3,623 1,972 83.7 3,623 1,972 83.7
Subscriber net adds in period (000) 533 336 58.6 1,398 1,058 32.1
POPs (000) 97,200 94,800 2.5 97,200 94,800 2.5
- ------------------------------------------------------------------------------------ ----------------------------------------------
</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 47% 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 1999 Annual
Report
Intercompany and intersegment transactions have not been eliminated
10
<PAGE>
BELL ATLANTIC CORPORATION
- ----------------------------------------
Bell Atlantic Mobile - Operating Results
- ----------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions, except subscriber amounts)
3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Unaudited 12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
- ------------------------------------------------------------------------------------ ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bell Atlantic Mobile (1)
Selected Financial Results
Revenues $ 1,136 923 23.1 $ 4,139 3,481 18.9
Less: Incollect revenues $ 85 63 34.9 $ 340 277 22.7
Less: Equipment revenues $ 103 65 58.5 $ 336 183 83.6
----------------------------- ------------------------------
Service revenues $ 948 $ 795 19.2 $ 3,463 $ 3,021 14.6
----------------------------- ------------------------------
Operating income $ 250 202 23.8 $ 900 820 9.8
Operating cash flow (2) $ 408 343 19.0 $ 1,498 1,350 11.0
Operating cash flow margin (3) 43% 43% 43% 45%
Capital expenditures, $ 248 259 (4.2) $ 953 702 35.8
excluding acquisitions
Selected Operating Data
Subscribers (000) (4) 7,688 6,201 24.0 7,688 6,201 24.0
Penetration (5) 12.2% 10.8% 12.2% 10.8%
Subscriber net adds in period (000) 363 302 20.2 1,035 860 20.3
Controlled POPs (000) (6) 62,958 57,190 10.1 62,958 57,190 10.1
Owned POPs (000) (7) 58,392 55,306 5.6 58,392 55,306 5.6
Churn rate 1.99% 1.99% 1.93% 1.85%
Total revenue per subscriber $ 52.91 51.15 3.4 $ 51.71 50.84 1.7
Service revenue per subscriber $ 44.17 44.06 0.2 $ 43.27 44.11 (1.9)
Cash expense per subscriber $ 25.17 25.06 0.4 $ 24.56 24.40 0.7
Acquisition cost per add (8) $ 145 177 (18.1) $ 172 196 (12.2)
</TABLE>
Footnotes:
(1) Bell Atlantic Mobile results reflect consolidated results for all
controlled markets
(2) Operating cash flow equals operating income plus depreciation and
amortization (EBITDA).
(3) Operating cash flow margin is calculated by dividing operating cash flow by
service revenues.
(4) Fourth quarter and year to date subscribers include 452 acquired
subscribers in connection with the Frontier Cellular transaction.
(5) Penetration is calculated by dividing subscribers by controlled POPs.
Total penetration at December 31, 1999 was 12.5% when normalized for the
Frontier Cellular transaction
(6) Controlled POPs represent the total number of POPs for which Bell Atlantic
Mobile has operating control.
(7) Owned POPs represent Bell Atlantic Mobile percentage ownership in all
licensed markets.
(8) Acquisition cost per add includes commissions and loss on handsets
Certain reclassifications have been made to prior results to conform to current
presentation
11
