Bell Atlantic Adjusted Earnings Up 10 Percent For 1996

Bell Atlantic Adjusted Earnings Up 10 Percent For 1996

Strong Market Demand in Core Businesses Drives Record Results

January 21, 1997

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David Stakun 215-963-6639


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4th Quarter 1996 Earnings Results

Atlantic Corporation (NYSE: BEL) announced today
that continued strong growth in its core wireline and wireless
businesses produced record 1996 net income of $1.87 billion, 10 percent
above 1995 earnings of $1.70 billion, and fourth-quarter net income of
$424.4 million, up 7.3 percent from 1995 results of $395.4 million,
excluding certain one-time adjustments in the three- and 12-month
periods in both years. On the same basis, earnings per share were
$4.26 for the year, up 9.8 percent versus adjusted 1995 earnings per
share of $3.88, and fourth-quarter earnings per share grew 7.8 percent,
to $.97 from $.90.

On a reported basis, Bell Atlantic's 1996 net income was $1.88
billion, or $4.28 per share. These results include a non-cash gain
from the cumulative effect of a change in accounting principle of $142
million, or $0.32 per share, associated with the adoption of the
"point of publication" accounting method for the company's
publishing business. Adopted in the fourth quarter and retroactive to
January 1, 1996, this method recognizes revenues and expenses upon
publication rather than over the life of the directories.

Reported 1996 results also include one-time, mostly non-cash charges
in the fourth quarter that largely offset the gain from the directory
accounting change (1996 special adjustments and previously reported
one-time items in 1995 are quantified in the " HREF="/sites/default/files/imported/press-releases/bell-atlantic/1997/4qreslts.htm#psa">Per Share
table attached):

  • Reserves associated with regulatory and other issues;
  • Actuarially determined costs of a benefit plan amendment;
  • Certain asset and investment dispositions.

Including one-time items, reported earnings in the fourth quarter of
1996 were $345.6 million, or $.79 per share.

"We posted strong gains in our key communications markets in 1996
we prepare to complete our merger
with NYNEX
in 1997," said Bell
Atlantic Chairman and Chief Executive Officer HREF="http://www.ba.com/speeches/profiles/smith.html">Raymond W.
"Robust market demand for our communications products and services
produced record revenue growth and record earnings that will
strengthen our competitiveness in existing markets and support our
entry into significant new markets such as in-region long distance."

Earnings results for 1996 include significant start-up costs in the
company's long-distance and HREF="http://www.bellatlantic.net">Internet businesses, plus costs
with meeting the competitive "checklist" requirements for
long-distance market entry set forth in the Telecommunications Act of
1996. Operating revenues from the company's core businesses,
including its proportionate share of Bell
Atlantic NYNEX Mobile

revenues, grew 7.9 percent for the fourth quarter of 1996 and 7.5
percent for the year, despite reductions in access charges and
increased price discounting and product packaging initiatives in the
Network and wireless businesses.

Network Highlights

Bell Atlantic's adjusted Network revenues grew 5.3 percent in 1996
compared with 1995 and 6.0 percent in the fourth quarter.

"Network revenue growth in 1996 was driven by strong customer
increased marketing and promotion activity, and new product
introductions," said Bell Atlantic Vice Chairman HREF="http://www.ba.com/speeches/profiles/cullen.html">James G.
"The effects were evident across all our business segments, from
consumer to business to wholesale."

  • Access lines in service on December 31, 1996, totaled approximately
    20.6 million, up 3.8 percent over the last 12 months. The increase
    includes 12.9 percent year-over-year Centrex line growth in the
    business markets.
  • Access minutes of use grew 9.7 percent for the year.
  • Approximately 200,000 ISDN
    (integrated services digital network)

    lines were in service at December 31, 1996, up 39 percent from
    the year-ago total.

    In the residential market:

  • Sales of secondary residential telephone lines totaled 886,000,
    compared with 511,000 in 1995. Fourth-quarter sales increased
    about 29 percent above 1995 levels, reaching almost 236,000.
    Total HREF="http://www.bell-atl.com/consumer/addlines/index.htm">additional
    lines in service grew almost 24 percent during
    1996, to approximately 2.1 million.

  • Revenues from HREF="http://www.bell-atl.com/consumer/voicemail/">Home Voice Mail
    (formerly Answer Call) and
    central-office-based services such as HREF="http://www.bell-atl.com/consumer/callerid/">Caller ID, Return
    Call and
    Call Waiting
    were up more than 23 percent compared with 1995.
    Caller ID revenues nearly doubled as subscribers grew to about 2.3
    million. Revenues from Return Call, in some markets now featuring a
    voice-recorded readout of the calling party's number, jumped more
    than 40 percent, with a 50 percent increase in activations.

    In the business markets:

  • "Special access" revenues were up almost 27 percent in the
    quarter compared with the same period a year earlier, largely as
    a result of demand for high-speed private lines. Special access
    revenues for the full year increased more than 12 percent above
    1995 levels.

  • Spurred by growing demand for customized, feature-rich call
    management packages, HREF="http://www.bell-atl.com/BellAtlantic/showcase/voicedir/netsys/netsys.html">Centrex revenues from small-businesses
    customers grew nearly 63 percent compared with 1995.

  • Revenues from high-speed HREF="http://www.bell-atl.com/html/business/lb_html/fastpack.htm">Fast-Packet data services more than doubled
    their 1995 totals.

  • Securing several new, high-profile contracts, HREF="http://www.bani.com">Bell Atlantic
    Network Integration posted revenues of nearly $200 million, a 32
    percent increase from 1995.

"Our strong revenue performance results in large measure from Bell
Atlantic's brand marketing, product promotion and packaging
initiatives," Cullen said. "These efforts are key to unlocking
tremendous vertical growth potential in the Network business. In the
converging information, entertainment and communications industry, we
envision Bell Atlantic as the ultimate systems integrator for
consumers as well as businesses, providing a complete array of
advanced services, customized packages and easy-to-use, turn-key

Network operating expenses for the year amounted to $9.8 billion, 5.3
percent higher than in 1995. Contributing to this growth were
start-up expenses in businesses such as long distance and Internet,
costs associated with increased sales and marketing activities, and
the cost of compliance with the Telecommunications Act's competitive


Bell Atlantic's wireless investment portfolio of 89 million
proportionate worldwide POPs (people in markets served) produced
adjusted equity income of $262.8 million in 1996, more than 57 percent
higher than in 1995. At Bell Atlantic NYNEX Mobile, operating income
grew 42.1 percent, while operating cash flow was up 33.5 percent.

"Overall, this was a banner year for our wireless investments,"
Bell Atlantic Vice Chairman HREF="http://www.ba.com/speeches/profiles/babbio.html">Lawrence T.
Babbio, Jr. "Domestically,
our PCS (personal communication services) consortium ( HREF="http://www.primeco.com">PrimeCo Personal
Communications) executed the most successful wireless launch in
history -- 16 major cities just 16 months after acquiring the licenses
- while proving CDMA (code division multiple access) to be the
technology to beat for digital wireless communication. And Bell
Atlantic NYNEX Mobile made another strong contribution to our
corporate earnings, continuing to penetrate the consumer segment,
introducing product and pricing packages and maintaining robust growth
while meeting competitive challenges in key markets."

    For Bell Atlantic NYNEX Mobile:

  • Annual subscriber growth for 1996 was more than 31 percent as once
    again, more than one million customers were added, bringing total
    subscribers to just beyond the 4.4 million mark.

  • The company continued to expand its presence in the consumer market
    segment with PCS-like services such as HREF="http://www.banm.com/webtkalg.htm">TalkAlong -2>(SM) and HREF="http://www.banm.com/webez.htm">EZ-MAX
    (SM), which have attracted close
    to one million subscribers since
    their introduction.


  • Omnitel Pronto Italia, Bell Atlantic's consortium providing
    wireless service in Italy, signed up more than 700,000 customers to
    its digital GSM (global system for mobile) service in its first
    year, becoming one of the world's fastest-growing mobile
    operations. Bell Atlantic recently HREF="http://www.ba.com/nr/96/dec/omnibuy.htm">increased its ownership
    of Omnitel from 11.6 to 17.4 percent, adding another 3.4 million
    proportionate POPs to the company's wireless portfolio.

  • EuroTel Praha, Bell Atlantic's partnership serving the Czech
    Republic, introduced digital GSM service, nearly doubling the
    customer base in that country. EuroTel Bratislava, a similar
    partnership serving Slovakia, was awarded a GSM license and plans
    to launch digital service early in 1997.

  • And Bell Atlantic reached an agreement to HREF="http://www.ba.com/nr/96/nov/ba-iusa.htm">restructure its ownership
    of Grupo Iusacell, S.A. de C.V., under which it would take
    operational control to strengthen the company's position to capture
    growth opportunities in the Mexican cellular, long-distance and
    fixed wireless markets.

"Success in the wireless business is increasingly a marketing
Babbio said. "Going forward, the winning companies will be
differentiated by their focus on the customer and the strength of
their value propositions. For example, with today's announcement of
DigitalChoice (SM) CDMA service in
Washington, Baltimore, Pittsburgh
and Charlotte (N.C.), and the introduction of new packages of wireless
services for our customers in these markets, we continue to
demonstrate our commitment to innovation, quality, value and
leadership in the wireless industry."

Looking ahead to 1997, Smith said, "We're entering the new year with
significant momentum and strong customer relationships, both of which
will serve us well as we complete our merger with HREF="http://www.nynex.com">NYNEX and vigorously
pursue market opportunities in long distance and data connectivity,"
Smith said. "The upside potential for this industry is

Bell Atlantic Corporation (NYSE:
BEL) is at the forefront of the new
communications, entertainment and information industry. In the
mid-Atlantic region, the company is the premier provider of local
telecommunications and advanced services. Globally, it is one of the
largest investors in the high-growth wireless communication
marketplace. Bell Atlantic also owns a substantial interest in
Telecom Corporation of New Zealand and is actively developing
high-growth national and international business opportunities in all
phases of the industry.