Bell Atlantic Initiatives to Result in $1.1 Billion In After-Tax Charges
Pension Offer and Productivity Gains To Result in Permanent Force Reductions
October 13, 1998
NEW YORK -- Bell Atlantic (NYSE:BEL) said today that it will take
charges in the third quarter totaling approximately $1.1 billion after taxes,
or $.70 per diluted share, related to the costs of completing an enhanced
pension offer, a revaluation of several international assets, and other items.
The charges are mainly non-cash in nature.
Frederic V. Salerno, Bell Atlantic senior executive vice president and
CFO, said, "We remain confident we will meet our targets for adjusted
earnings growth in 1998."
Charges of approximately $500 million, or $.32 per share, will be recorded
primarily for the completion of a retirement incentive program begun at
NYNEX in 1994 and extended through the end of next year as part of
recent union contract settlements.
Of 13,800 eligible union-represented employees, approximately 5,200
workers accepted the offer and will voluntarily leave the company in
stages over the next 14 months. As a result of productivity gains, the
company anticipates that less than half of the workers who take advantage
of the program will be replaced.
Lawrence T. Babbio, Jr., Bell Atlantic president and CEO - Network, said,
"Combining the best practices of Bell Atlantic and NYNEX is allowing us
to handle increasing business volumes with greater efficiency and higher
quality. We're confident that we will see continued productivity
improvements, which will give us a great deal of flexibility in meeting our
financial goals and funding start-up costs for our new businesses in 1999."
Charges totaling approximately $545 million, or $.35 per share, will be
taken primarily for write-downs in the value of TelecomAsia, Bell
Atlantic's wireline investment in Thailand, and Excelcomindo, its wireless
investment in Indonesia.
"We have concluded that the currency devaluations and severe economic
conditions in Asia will have an impact on the book value of our Thai and
Indonesian holdings," Salerno said. "As a result, we are making the
accounting adjustments we are announcing today.
"We remain committed to both investments, which we have always
viewed as long-term opportunities."
Bell Atlantic accounts for the TelecomAsia and Excelcomindo
investments under the cost method. The company has limited exposure to
Asian and other emerging markets.
Approximately $55 million in charges, or $.03 per share, are primarily for
transition costs related to the Bell Atlantic-NYNEX merger and a write-off
of video equipment that has been superseded by Bell Atlantic's digital
video offering in partnership with DirecTV and USSB, and its planned
next-generation broadband network.
Bell Atlantic will announce its third-quarter results on Oct. 21.
Bell Atlantic is at the forefront of the new communications and
information industry. With more than 41 million telephone access lines
and more than seven 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.
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. Discussion of factors that may
affect future results is contained in our recent filings with the Securities
and Exchange Commission.