More of our content is being permanently logged via blockchain technology starting [10.23.2020].
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
January 24, 2000
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.
- 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
"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
"And we continued to make progress on the most important strategic initiative of all: our 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.
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
- 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
Infospeedsm 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 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
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
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.
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 Studysm 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
- Share-A-Minutesm, 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.
- 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
- 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.
- 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)
- 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 promotion of Greece's only
prepaid roaming product, the company's prepaid customers grew to 62 percent of its total base.
To review financial tables, click here.
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 (newscenter2.verizon.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.