-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, YHhWB+LnmWO+whSCXQIkDWxxK27dK+uhqx2MSScqnj/5yIpwAk0MbxIP+0ljQ8wI b3wyRdmnreRTdOW/TgMgjQ== 0000732712-95-000004.txt : 19950607 0000732712-95-000004.hdr.sgml : 19950607 ACCESSION NUMBER: 0000732712-95-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950125 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELL ATLANTIC CORP CENTRAL INDEX KEY: 0000732712 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 232259884 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08606 FILM NUMBER: 95502710 BUSINESS ADDRESS: STREET 1: 1717 ARCH ST 47W CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2159636000 MAIL ADDRESS: STREET 2: 1717 ARCH ST 47TH FL CITY: PHILADELPHIA STATE: PA ZIP: 19103 8-K 1 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 23, 1995 Exact name of registrant as specified in its charter: BELL ATLANTIC CORPORATION Commission File No.: 1-8606 State of Incorporation: Delaware IRS Employer Identification No.: 23-2259884 Address of principal executive offices: 1717 Arch Street Philadelphia, Pennsylvania Zip Code 19103 Registrant's telephone number, including area code: (215) 963-6000 Former name or former address, if changed since last report: N/A SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its by the undersigned duly authorized. BELL ATLANTIC CORPORATION By: /s/ William O. Albertini William O. Albertini Vice President and Chief Financial Officer Date: January 23, 1995 Item 5. Other Events. Attached as an exhibit hereto is a copy of a press release issued by Bell Atlantic Corporation (the Company) dated January 23, 1995 announcing Fourth quarter and full year 1994 earnings. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (20) Press Release dated January 23, 1995 EXHIBIT INDEX Exhibit No. Description Page No. (20) Press Release dated January 23, 1995 EX-20 2 NEWS RELEASE BELL ATLANTIC Contact: Cynthia M. Ciangio (215) 963-6306 For Release: Immediately January 23, 1995 STRONG NETWORK AND WIRELESS REVENUES SPUR BELL ATLANTIC 1994 RESULTS Fourth Quarter Operating Income Increased Nearly 10 Percent PHILADELPHIA, January 23, 1995 -- Bell Atlantic Corporation (NYSE: BEL) today announced solid 1994 operating results reflecting continued strong demand in its network business and record customer growth in its wireless operations. While the company reported a loss for 1994 of $1.73 per share, 1994 earnings excluding special charges amounted to $3.53 per share. These charges included: non-cash items totalling $5.20 per share taken in the third quarter for the discontinuance of regulatory accounting and the revaluation of telephone plant, a work force reduction of 5,600 network employees, and the exiting of certain non-strategic investments; an extraordinary charge of $.02 per share for the early extinguishment of debt taken in the first quarter; and a $.04 per share charge taken in the fourth quarter due to the devaluation of the peso. On a comparable basis, this represents a 9 percent increase in earnings per share over 1993 (see sidebar). Excluding these charges, net income for 1994 was $1.5 billion, representing a 9.7 percent increase over 1993 on a comparable basis. "We achieved our financial and operating objectives for the year," said Bell Atlantic Chairman and Chief Executive Officer Raymond W. Smith. "We also took a number of strategic actions to enhance long-term shareowner value and to support our intention to be a leader in communications, information, and entertainment." For the fourth quarter of 1994, operating income increased by 9.9 percent compared with the fourth quarter of 1993. Earnings were $.72 per share, or $314.9 million, which included a charge of $.04 per share, or approximately $19 million, primarily consisting of the company's estimated proportionate share of the impact of the Mexican peso devaluation on the dollar-denominated debt of Grupo Iusacell, Mexico's largest independent cellular provider. Despite the sharp decline in the peso, Bell Atlantic continues to believe that its 42 percent economic interest in Iusacell represents a significant long-term opportunity. Earnings in the fourth quarter of 1993 were $.76 per share, or $333.1 million. After adjusting both periods for comparability, earnings per share for the fourth quarter of 1994 increased by 5.6 percent over the same period last year. Total operating revenues in 1994 were $13.8 billion, compared with $13.1 billion in 1993, an increase of nearly 5 percent. Excluding the company's financial services businesses, which were substantially disposed of in 1994, revenues from continuing operations increased by 6.5 percent. Network revenues increased by 4.3 percent, including continued strong growth in value-added services such as Answer Call and Caller ID. Total access minutes of use for 1994 increased by 8.9 percent over 1993. Access lines at the end of 1994 totaled 19.2 million, an increase of 522,700 lines, or 2.8 percent, compared with the end of 1993. Business and Centrex access lines increased 3.3 percent and 6.5 percent, respectively, over totals at the end of 1993. Bell Atlantic's total operating expenses in 1994 were $11.0 billion compared with $10.3 billion in 1993. Excluding a previously announced charge in 1994 for costs associated with the separation of employees, operating expenses increased by 4.6 percent, or $476.9 million. Revenues in the company's cellular operations increased 43.5 percent, driven by record customer growth of 602,000 subscribers, or 57.9 percent, in 1994. Cellular customers totalled approximately 1.64 million at the end of 1994. "In our network services business, we made a difficult but necessary decision to reduce our work force by 5,600 by the end of 1997. As a result of our decision to discontinue using regulatory accounting principles, we revalued a significant portion of assets in recognition of the increasingly competitive environment in our industry. Our aggressive pricing on highly competitive services and increased product development for new market opportunities, such as video services, position us for continued network revenue growth in the future. "To further expand our presence in the high-growth wireless market, we signed an agreement to merge our domestic cellular operations with those of NYNEX," Smith said. "We expect this merger to be completed in mid-1995. Bell Atlantic and NYNEX also formed partnerships with U S WEST and AirTouch to bid jointly in the FCC's auctions for personal communications services and to develop a national branding and marketing strategy and service standards for their wireless businesses, moves which add significant scope and scale to our operations and position us for national leadership in the provision of wireless services. "Another significant milestone was achieved in 1994 when we formed two new companies with NYNEX and Pacific Telesis to expedite our entry into the video services market and reduce business risks. A newly formed media company will develop, acquire, license, and package entertainment and information services, and a technology and integration company will provide the systems necessary to deliver these services. "In addition, we achieved progressive state regulatory relief in Pennsylvania and Virginia, and an extension of incentive regulation in West Virginia. Recently, the FCC approved our 214 application for a market trial of video-on-demand in northern Virginia. "1994 was an extraordinary year for Bell Atlantic, and one of which we are well proud. We will continue to capitalize on the opportunities and challenges of this dynamic industry to increase shareowner value over the long-term. We believe that we are positioned for record earnings in 1995," Smith said. Bell Atlantic Corporation, based in Philadelphia, is the parent of companies which provide a full array of local exchange telecommunications services in New Jersey, Pennsylvania, Delaware, Maryland, Virginia, West Virginia, and Washington, D.C. The corporation is at the forefront of developing a variety of new products, including video, entertainment, and information services. Bell Atlantic also is the parent of one of the nation's largest cellular carriers and has an ownership position in cellular properties internationally, including a 42 percent economic interest in Grupo Iusacell, S.A. de C.V., Mexico's largest independent cellular company. In addition, Bell Atlantic owns an interest in Telecom Corporation of New Zealand and is the parent of companies that provide business systems services for customer-based information technology throughout the U.S. and internationally. ### SIDEBAR Bell Atlantic Corporation Earnings Analysis (on a per-share basis) Three Months Ended Year Ended December 31 December 31 1994 1993 Change 1994 1993 Change Reported Earnings $.72 $.76 ($1.73) $3.22 Adjustments: Early Extinguishment of Debt -- .01 .02 .13 Strategic Initiatives Asset Revaluation -- -- 4.56 -- Elimination of Net Regulatory Assets -- -- .36 -- Employee Separation Pay Plan Costs -- -- .23 -- Disposition of Non-Strategic Invest- ments -- -- .05 -- Sub-Total -- -- 5.20 -- Impact of Devaluation of Peso .04 -- .04 -- Change in Accounting for Income Taxes (FAS 109) -- -- -- (.15) Change in Accounting for Post-Employment Benefits (FAS 112) -- -- -- .18 Total Adjust- ments .04 .01 5.2 .16 Sub-Total of Adjusted Earnings $.76 $.77 (1.3)% $3.53 $3.38 4.4% Comparability Adjustment: Other Net Effects of Investment in Grupo Iusacell -- (.05) -- (.14) Adjusted Earnings $.76 $.72 5.6% $3.53 $3.24 9.0% BELL ATLANTIC CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited) (In millions, except per-share amounts) Three months ended Year ended December 31 December 31 1994* 1993 1994* 1993 Operating Revenues Transport Services Local services $ 1,077.3 $1,060.0 $4,312.4 $4,187.4 Network access 813.2 763.5 3,237.6 3,070.9 Toll service 365.9 393.4 1,555.5 1,558.0 Ancillary Services Directory advertising 275.5 265.7 1,082.0 1,049.0 Other 128.9 87.7 441.9 363.3 Value-Added Services 336.1 308.7 1,284.4 1,193.6 Wireless 292.3 226.6 1,059.8 785.5 Other Services 197.3 250.5 817.8 937.9 Total Operating Revenues 3,486.5 3,356.1 13,791.4 13,145.6 Operating Expenses Employee costs, including benefits and taxes 1,020.2 1,019.0 4,333.1 4,027.6 Depreciation and amortization 679.7 649.8 2,652.1 2,545.1 Other 1,119.3 1,080.1 4,001.6 3,775.3 Total operating expenses 2,819.2 2,748.9 10,986.8 10,348.0 Operating Income 667.3 607.2 2,804.6 2,797.6 Equity in income (loss) of affiliates (20.9) 22.1 41.1 48.3 Other income and expense, net 16.1 7.0 23.2 39.8 Interest expense 144.7 141.3 582.1 612.1 Income before provision for income taxes, extraordinary items, and cumulative effect of changes in accounting principles 517.8 495.0 2,286.8 2,273.6 Provision for income taxes 202.9 157.8 884.9 792.0 Income before extraordinary items and cumulative effect of changes in accounting principles 314.9 337.2 1,401.9 1,481.6 Extraordinary items: Discontinuation of regulatory accounting principles, net of tax -- -- (2,150.0) -- Early extinguishment of debt, net of tax -- (4.1) (6.7) (58.4) Total extraordinary items -- (4.1) (2,156.7) (58.4) Cumulative effect of changes in accounting principles: Income taxes -- -- -- 65.2 Post-employment benefits, net of tax -- -- -- (85.0) Total cumulative effect of changes in accounting principles -- -- -- (19.8) Net Income (Loss) $314.9 $333.1 $(754.8) $1,403.4 * Effective 8/1/94, the company's telephone subsidiaries discontinued application of Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation." BELL ATLANTIC CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited) - continued (In millions, except per-share amounts) Three months ended Year ended December 31 December 31 1994* 1993 1994* 1993 Per Common Share Amounts Income before extraordinary items and cumulative effect of changes in accounting principles $.72 $.77 $ 3.21 $3.39 Extraordinary items -- (.01) (4.94) (.13) Cumulative effect of changes in accounting principles -- -- -- (.04) Net Income (Loss) $.72 $.76 $(1.73) $3.22 Dividends declared per common share $.69 $.67 $2.76 $2.68 Weighted average number of common and equivalent shares outstanding 437.2 437.5 437.2 436.3 Other Selected Data December 31 1994 1993 Return on Average Common Equity Three months ended 19.8% 16.0% Year ended ( 9.8)% 17.3% Total Assets (millions) $24,271.8 $29,544.2 Total Employees 72,300 73,600 * Effective August 1, 1994, the company's telephone subsidiaries discontinued application of Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation." BELL ATLANTIC CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited) (In millions) Year Ended December 31, 1994 1993 Cash Flows from Operating Activities Net income (loss) $(754.8) $1,403.4 Depreciation and amortization 2,652.1 2,545.1 Extraordinary items 2,156.7 58.4 Cumulative effect of changes in accounting principles -- 19.8 Other, net (301.4) 128.1 Net Cash Provided by Operating Activities 3,752.6 4,154.8 Net Cash Used in Investing Activities (1,669.8) (2,953.5) Net Cash Used in Financing Activities (2,086.0) (1,351.2) Decrease in Cash and Cash Equivalents (3.2) (149.9) Cash and Cash Equivalents, Beginning of Year 146.1 296.0 Cash and Cash Equivalents, End of Year $142.9 $146.1 BELL ATLANTIC CELLULAR OPERATIONS Selected Operating Statistics and Financial Data (unaudited) (In thousands, except percentages and data per subscriber) Three months ended December 31 1994 1993 % Change Selected Operating Statistics Total Owned Pops(1) 35,064 35,238 (.05) Controlled MSA Pops(1) 32,519 27,883 16.6 Controlled RSA Pops(1) 3,875 3,706 4.6 Controlled Penetration(1)(2) 4.63% 3.05% 51.8 Total Subscribers(3) 1,684.4 1,039.1 62.1 ( 57.9% normalized) Churn 1.57% 1.64% (4.3) Rev. per Subscriber per Month(4) $ 70 $ 7 (9.1) (- 9.9% normalized) Acquisition Cost per Gross Add(5) $268 $23 13.6 ( 12.1% normalized) Selected Financial Data Revenue(6) $288,373 $223,197 29.2 ( 40.8% normalized) Operating Income(7) $12,165 $ (4,638) -- (521.0% normalized) Operating Cash Flow(8)(9) $ 48,414 $ 24,185 100.2 ( 57.6% normalized) Operating Cash Flow Margin(8)(10) 23.34% 13.93% 67.6 (20.1% normalized) Uncollectibles for quarter ended December 31, 1994, were less than 2% of total revenue. On May 1, 1994, the NYSMSA partnership restructured to include the Bell Atlantic Mobile Northern New Jersey reseller operations. Quarterly data and statistics include Northern New Jersey reseller operations for three months in 1993. Normalized growth rates exclude the Bell Atlantic Mobile Northern New Jersey reseller operations for the three months. (1)1994 population data source is different than 1993 source. 1994 Controlled MSA POPs includes approximately 5 million Northern New Jersey POPs managed by Bell Atlantic Mobile pursuant to the restructured NYSMSA partnership arrangement. (2)1993 Controlled Penetration is calculated using controlled subscribers over total controlled POPs. (3)1994 includes subscribers managed by Bell Atlantic Mobile pursuant to the restructured NYSMSA partnership arrangement. Some of these customers were managed by NYNEX Mobile prior to 1994. 1993 includes subscribers from Bell Atlantic Mobile's Northern New Jersey reseller operations that, effective May 1, 1994, are part of the NYSMSA partnership. Excluding customers previously managed by NYNEX, the normalized 1994 subscribers and growth rate would have been 1,641.1 and 57.9%, respectively. (4)1993 normalized Revenue per Subscriber rounds to $77, resulting in a - -9.9% growth rate. (5)Acquisition costs include commission expense and margin on sale of CPE. 1993 normalized Acquisition Cost per Gross Add is $239, resulting in a 12.1% growth rate. (6)Revenue includes service revenues, incollect, outcollect, and equipment revenue, but excludes paging revenue. 1993 normalized Revenue is $204,777, resulting in a 40.8% growth rate. (7)1993 normalized Operating Income is $1,959, resulting in a 521% growth rate. (8)Operating Cash Flow equals Operating Income plus depreciation and amortization. Operating Cash Flow Margin uses revenues which consist primarily of service revenues, outcollect revenue, and net margin on equipment. (9)1993 normalized Operating Cash Flow is $30,723, resulting in a 57.6% growth rate. (10)1993 normalized Operating Cash Flow Margin is 19.43%, resulting in a 20.1% growth rate. BELL ATLANTIC CELLULAR OPERATIONS Selected Operating Statistics and Financial Data (unaudited) (In thousands, except percentages and data per subscriber) Year ended December 31 1994 1993 % Change Selected Operating Statistics Total Owned Pops(1) 35,064 35,238 (.05) Controlled MSA Pops(1) 32,519 27,883 16.6 Controlled RSA Pops(1) 3,875 3,706 4.6 Controlled Penetration(1)(2) 4.63% 3.05% 51.8 Total Subscribers(3) 1,684.4 1,039 .1 62.1 ( 57.9% normalized) Churn 1.51% 1.65% (8.5) Rev. per Subscriber per Month(4) $71 $ 77 (7.8) (- 6.7% normalized) Acquisition Cost per Gross Add(5)$255 $240 6.3 ( 4.1% normalized) Selected Financial Data Revenue(6) $ 1,044,855 $ 773,448 35.1 ( 43.5% normalized) Operating Income( 7) $ 112,191 $ 43,892 155.6 (103.4% normalized) Operating Cash Flow(8)(9) $ 246,955 $ 149,825 64.8 ( 54.5% normalized) Operating Cash Flow Margin(8)(10) 30.79% 24.43% 26.0 ( 10.7% normalized) Uncollectibles for year ended December 31, 1994, were less than 2% of total revenue. On May 1, 1994, the NYSMSA partnership restructured to include the Bell Atlantic Mobile Northern New Jersey reseller operation. 1994 and 1993 year to date data and statistics include Northern New Jersey reseller operations for four months and twelve months, respectively. Normalized growth rates exclude the Bell Atlantic Mobile Northern New Jersey reseller operations for the four months in 1994 and the twelve months in 1993. (1)1994 population data source is different than 1993 source. 1994 Controlled MSA POPs include approximately 5 million Northern New Jersey POPs managed by Bell Atlantic Mobile pursuant to the restructured NYSMSA partnership arrangement. (2)1993 Controlled Penetration is calculated using controlled subscribers over total controlled POPs. (3)1994 includes subscribers managed by Bell Atlantic Mobile pursuant to the restructured NYSMSA partnership arrangement. Some of these customers were managed by NYNEX Mobile prior to 1994. 1993 includes subscribers from Bell Atlantic Mobile's Northern New Jersey reseller operations that, effective May 1, 1994, are part of the NYSMSA partnership. Excluding customers previously managed by NYNEX, the normalized 1994 subscribers and growth rate would have been 1,641.1 and 57.9%, respectively. (4)1994 and 1993 normalized Revenue per Subscriber is $70 and $75, respectively, resulting in a -6.7% growth rate. (5)Acquisition costs include commission expense and margin on sale of CPE. 1994 and 1993 normalized Acquisition Cost per Gross Add is $256 and $246, respectively, resulting in a 4.1% growth rate. (6)Revenue includes service revenues, incollect, outcollect, and equipment revenue, but excludes paging revenue. 1994 and 1993 normalized Revenue is $1,014,860 and $707,331, respectively, resulting in a 43.5% growth rate. (7)1994 and 1993 normalized Operating Income is $119,029 and $58,519, respectively, resulting in a 103.4% growth rate. (8)Operating Cash Flow equals Operating Income plus depreciation and amortization. Operating Cash Flow Margin uses revenues which consist primarily of service revenues, outcollect revenue, and net margin on equipment. (9)1994 and 1993 normalized Operating Cash Flow is $253,663 and $164,151, respectively, resulting in a 54.5% growth rate. (10)1994 and 1993 normalized Operating Cash Flow Margin is 32.61% and 29.45%, respectively, resulting in a 10.7% growth rate. ### -----END PRIVACY-ENHANCED MESSAGE-----