RNS No 7280f
BELL ATLANTIC CORPORATION
22nd July 1997
Bell Atlantic Announces Robust Second Quarter Earnings
Adjusted Earnings per Share Up 11.4 Percent
PHILADELPHIA - Continuing the pace recorded in the first quarter of the year,
Bell Atlantic Corp, (NYSE: BEL) registered robust earnings in the second
quarter of 1997 on strong demand for communications services in the company's
core telephone and wireless businesses.
The company reported adjusted second quarter 1997 earnings per share of $1.17,
an increase of 11.4 percent over the second quarter of 1996, before a charge of
$.03 for a writedown of its investment in CAI Wireless Systems, Inc. Adjusted
net income for the second quarter of 1997 was $513.9 million, 10.8 percent
higher than the second quarter of 1996, before the charge of $15 million.
"The story for our second quarter performance is straightforward and simple,"
said Bell Atlantic Chairman and CEO Raymond W. Smith. "The beat goes on:
"In the face of increasing competition in our core businesses, revenues are
rising, expenses are in check and operating income is increasing at double-digit
rates. We are opening new channels to make it even easier for customers to do
business with us, our network operations continue to deliver solid service and
our wireless operations continue their success story.
"We again have demonstrated our ability to identify real opportunities and
marshal our resources to take best advantage of them. With the commitments we
have just made to the FCC, we anticipate that our merger with NYNEX soon will
clear the final hurdle at the Commission with no additional financial impact on
our new company. Now we can tackle the best opportunity of all: unifying,
providing service - including long distance - and winning in the best
communications marketplace in the world," Smith said.
"We have never been more confident in our ability to capitalize on the
tremendous opportunities open to us."
The corporation's 1997 second quarter revenues increased by 6.7 percent over the
year earlier period, and by 7.7 percent including its proportionate share of
domestic cellular revenues.
Network Highlights
Bell Atlantic's telephone business realized a strong, 5.6 percent revenue
increase in the second quarter of the year as demand generated continued growth
in access lines and value-added services, while the company maintained excellent
customer service levels.
"We have bolstered our already-strong customer service capabilities by adding
service consultants over the past year to provide faster access to our business
offices while increasing revenue through this channel," said Bell Atlantic Vice
Chairman James G. Cullen. "We believe this is proof that excellent customer
service will be a key differentiator for Bell Atlantic in the competitive
marketplace.
We extended that notion to the small business market, as well, by introducing
the Telephone Account Management channel in the second quarter to provide
personalized attention to our top small business accounts.
"In addition, we have signed up 185,000 customers through the first half of
1997 in our New Jersey and Pennsylvania toll calling plans, clearly
demonstrating the strength of the Bell Atlantic brand in countering
competition."
In the network business:
* Access lines in service totaled approximately 21 million on June
30, 1997, an increase of 4.0 percent over the same date in 1996.
The increase included 10.9 percent Centrex line growth year over
year.
* Access minutes of use grew 7.8 percent compared with the second
quarter last year.
* At the end of the second quarter, Bell Atlantic had more than
240,000 ISDN (Integrated Services Digital Network) lines in
service, more than 40 percent more than a year earlier.
In the residential market:
* Sales of secondary residential lines in the second quarter of 1997
continued at a strong Clip, increasing, by 228,600, a 7.6 percent
increase in sales above the year earlier period.
* In the second quarter, revenues from Home Voice Mail and central
office-based services such as Caller ID, Return Call and Call
Waiting were up approximately 20 percent compared with the 1996
period. Caller ID revenues grew 45.5 percent in the last quarter
over the year-earlier period. Revenues from Return Call, often
featuring a voice-recorded read-out of the calling party's number,
grew 37.1 percent from second quarter 1996 levels.
In the business markets:
* The company's popular customized Centrex packages for small
businesses added 247,000 lines in the quarter for 85 percent
growth year over year. Second quarter revenue was $56.3 million,
up 48,3 percent over the 1996 period.
* In the large business segment, revenues from high-speed Fast
Packet services grew about 90 percent from second quarter 1996
levels.
* Bell Atlantic Network Integration, Inc., delivered revenue growth
of more than 50 percent over the 1996 quarter, bringing the
unit's quarterly revenues to nearly $60 million.
Network operating expenses of $2.5 billion for the quarter were 2.7 percent
higher than in the 1996 quarter, including costs of meeting the requirements of
the Telecom Act checklist and increased marketing expenditures.
"Expense control is especially impressive in that we spent nearly $55 million in
the second quarter to redesign software, add capacity in our operating support
systems and improve our ordering systems to meet our obligations under the
Telecom Act and to accommodate competitive local carriers as we continue to open
our local networks," Cullen said. "All this helps pave the way for our entry
into the long distance market. We plan to start filing our applications in the
fourth quarter.
"Our core network business continued to advance last quarter on all essential
fronts: revenue generation, expense control, efficient delivery channels and
customer service," Cullen said. "Margins and capital productivity were higher
as we demonstrated that we can win in the marketplace and create value for our
shareowners."
Wireless Highlights
In the second quarter of 1997, Bell Atlantic's global wireless portfolio of 89
million POPs (people in markets served) saw new product introductions and
business expansion on all fronts.
"In the second quarter, we deployed CDMA (code division multiple access) digital
networks in all our domestic markets, enabling us to launch next-generation
wireless services well ahead of most new market entrants. We improved our
wireless results for market penetration, customer churn and cash flow margin,
despite downward pressure on service pricing and increased marketing expenses,"
said Bell Atlantic Vice Chairman Lawrence T. Babbio, Jr. "We've shown the rest
of the industry how to deliver a great value proposition: Real innovation at
great prices.
"PrimeCo, our PCS partnership, added about 81,000 new subscribers in the second
quarter - in addition to 77,000 in the first quarter of this year - for a total
of 195,000 subscribers since PrimeCo opened for business last October. We
continue with our aggressive network build plan to increase our PCS footprint
and handle the rapid growth in subscribers and call volumes.
"We also have a real turnaround story in Grupo Iusacell, S.A. de C.V., where we
consolidated our operational and management control in February. Since then,
we have launched a new consolidated brand strategy, enhanced network performance
and expanded retail distribution, and we are on target for meeting our 1997
subscriber growth objectives," Babbio said.
For Bell Atlantic NYNEX Mobile:
* The company had a 16 percent increase in operating revenues over the second
quarter of 1996 and operating cash flow improvement of 19.6 percent,
resulting in an operating cash flow margin of 45 percent.
* At the end of the second quarter of 1997, the company had 27.6 percent more
subscribers year over year, adding 241,000 new customers in the quarter for
a total of nearly 4.9 million.
* Penetration at the end of the 1997 quarter was 8.6 percent, up from 6.8
percent at the end of the year-earlier date, and churn decreased in the
quarter to 1.6 percent per month.
In other international wireless operations:
* Omnitel Pronto Italia, Bell Atlantic's consortium which provides wireless
service in Italy, continued to be one of the world's fastest growing mobile
operations, adding 341,000 new subscribers in the quarter for a total of 1.25
million. In the second quarter, Omnitel had continuing strong operating
results and, after less than 18 months of service, earned Europe's
prestigious 1997 Teleperformance Gold Award for excellence in customer care.
* EuroTel Praha, Bell Atlantic's wireless partnership in the Czech Republic,
added more than 200,000 customers on its GSM (global system for mobile)
network since the digital service was launched on July 7, 1996. The company
has 272,000 digital and analog service customers in total.
"There are five fundamentals for leadership in the wireless industry: a strong
value proposition, direct customer access, superior network quality, world-class
customer service and high-efficiency operations," Babbio said. "We are
successfully applying that formula in all our properties."
Bell Atlantic's combined wireless portfolio added some 325,000 proportionate
subscribers in the second quarter of 1997, bringing its total to 33.5 million,
an increase of 40 percent over the end of the second quarter of 1996.
Significantly, about one third of this growth came from international
operations.
Consolidated Statements of income
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 6/30/97 6/30/96 % Change
OPERATING REVENUES
Transport Services
Local service $ 1,256.9 $ 1,179.4 6.6
Network access
Interstate 758.2 713.6 6.2
Intrastate 150.3 154.2 (2.5)
Toll service 328.2 350.1 (6.3)
Ancillary Services
Director publishing 265.1 252.9 4.8
Other 186.8 157.4 18.7
Value-added Services 427.0 386.4 10.5
Other Services 68.2 29.6 -
---------------------------------------
Total Operating Revenues 3,440.7 3,223.6 6.7
---------------------------------------
OPERATING EXPENSES
Employee Costs 963.1 981.8 (1.9)
Depreciation and amortization 685.0 638.8 7.2
Other 893.8 850.6 5.1
---------------------------------------
Total Operating Expenses 2,541.9 2,471.2 2.9
---------------------------------------
OPERATING INCOME 898.8 752.4 19.5
Income from Unconsolidated Businesses 59.3 94.3 (37.1)
Other Income (Expense), Net (3.5) (2.1) -
Interest Expense 131.4 119.8 9.7
---------------------------------------
Income Before Income Taxes and
Cumulative Effect of Change in
Accounting Principle 823.2 724.8 13.6
Provision for Income Taxes 324.3 261.1 24.2
---------------------------------------
Income Before Cumulative Effect
of Change in Accounting
Principle 498.9 463.7 7.6
Cumulative Effect of Change in
Accounting Principle
Directory Publishing, net of tax - - -
---------------------------------------
Net Income $ 498.9 $ 463.7 7.6
---------------------------------------
Earnings per Share $ 1.14 $ 1.05 8.6
---------------------------------------
Weighted average common and equivalent
shares outstanding (in millions) 439.5 439.6
---------------------------------------
Footnotes
Certain 1996 revenue amounts have been reclassfied to conform with the 1997
presentation. In February 1997, the Company assumed control of the Board of
Directors and management of Grupo Iusacell, S.A. de C.V and changed its
accounting for this investment from the equity method to full consolidation.
Consolidated Statements of income
(Dollars in Millions, Except Per Share Amounts)
6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/97 6/30/96 % Change
OPERATING REVENUES
Transport Services
Local service $ 2,445.6 $ 2,319.3 5.5
Network access
Interstate 1,523.4 1,429.3 6.6
Intrastate 302.2 316.4 (4.5)
Toll selvice 664.1 719.7 (7.7)
Ancillary Services
Director publishing 570.6 551.4 3.5
Other 344.5 295.7 16.5
Value-added Services 862.0 758.3 13.7
Other Services 142.2 53.6 -
---------------------------------------
Total Operating Revenues 6,854.6 6,443.5 6.4
---------------------------------------
OPERATING EXPENSES
Employee Costs 1,917.6 1,964.2 (2.4)
Depreciation and amortization 1,356.4 1,267.7 7.0
Other 1,785.3 1,659.0 7.6
---------------------------------------
Total Operating Expenses 5,059.3 4,890.9 3.4
---------------------------------------
OPERATING INCOME 1,795.3 1,552.6 15.6
Income from Unconsolidated Businesses 106.9 165.9 (35.6)
Other Income (Expense), Net 20.6 (4.4) -
Interest Expense 268.9 240.6 11.8
---------------------------------------
Income Before Income Taxes and
Cumulative Effect of Change in
Accounting Principle 1,653.9 1,473.5 12.2
Provision for Income Taxes 639.4 545.1 17.3
---------------------------------------
Income Before Cumulative Effect
of Change in Accounting
Principle 1,014.5 928.4 9.3
Cumulative Effect of Change in
Accounting Principle
Directory Publishing, net of tax - 142.1 -
---------------------------------------
Net Income $ 1,014.5 $ 1,070.5 (5.2)
---------------------------------------
Earnings per Share $ 2.31 $ 2.43 (4.9)
---------------------------------------
Weighted average common and equivalent
shares outstanding (in millions) 439.7 439.9
---------------------------------------
Footnotes
Certain 1996 revenue amounts have been reclassfied to conform with the 1997
presentation.
In February 1997, the Company assumed control of the Board of Directors and
management of Grupo Iusacell, S.A. de C.V and changed its accounting for this
investment from the equity method to full consolidation.
Income from Unconsolidated Businesses
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
6/30/97 6/30/96 6/30/97 6/30/96
Wireless
Bell Atlantic
NYNEX Mobile $ 102.7 $ 91.7 $ 179.9 $ 169.1
Grupo Iusacell - 3.3 - (7.5)
Other (37.2) (15.3) (72.6) (29.8)
----------------------------------------------------------
Total Wireless 65.5 79.7 107.3 131.8
Other Investments (6.2) 14.6 (0.4) 34.1
----------------------------------------------------------
TOTAL $ 59.3 $ 94.3 $ 106.9 $ 165.9
----------------------------------------------------------
Earnings per Share Reconciliation
3 Mos. Ended 3 Mos. Ended
Unaudited 6/30/97 6/30/96 % Change
Reported Earnings per Share $ 1.14 $ 1.05
Adjustments:
Investment writedown .03
---------------------------------------
Adjusted Earnings per Share $ 1.17 $ 1.05 11.4
---------------------------------------
6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/97 6/30/96 % Change
Reported Earnings per Share $ 2.31 $ 2.43
Adjustments:
Investment writedown .03
Directory accounting change-
cumulative effect (.32)
---------------------------------------
Adjusted Earnings per Share $ 2.34 $ 2.11 10.9
---------------------------------------
1996 Quarterly Earnings per Share (Restated)
For purposes of comparison with 1997 results, adjusted earnings per share for
each of the four quarters of 1996 have been restated to include the effect of
the change in the method of accounting for directory publishing, effective
1/1/96.
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year
Unaudited 1996 1996 1996 1996 1996
Reported Earnings per
Share (restated) $ 1.38 $ 1.05 $ 1.06 $ .79 $ 4.28
Adjustments:
Directory accounting
change - cumulative
effect (.32) (.32)
Regulatory and other
issues .13 .13
Actuarial charges for
benefit plan amendment .06 .06
Loss on asset and
investment dispositions .12 .12
----------------------------------------------------------
Adjusted Earnings Per
Share $ 1.06 $ 1.05 $ 1.06 $ 1.09* $ 4.26*
----------------------------------------------------------
Footnote
* Does not add down due to rounding.
Selected Financial and Operating Statistics
(Dollars in Millions, Except Per Share Amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 6/30/97 6/30/96 % Change
Network Services Revenues
Network Operations (1) $ 3,265.5 $ 3,113.1 4.9
Network Related (2) 107.0 80.9 32.3
---------------------------------------
Total Network Services Revenues 3,372.5 3,194.0 5.6
Other Services 68.2 29.6 -
---------------------------------------
Total Operating Revenues $ 3,440.7 3,223.6 6.7
---------------------------------------
Return on Average Common Equity 25.5% 26.1%
Return on Average Common Equity (Adjusted)* 26.2% 26.1%
Return on Average Total Capital 13.5% 13.3%
Return on Average Total Capital (Adjusted)* 13.8% 13.3%
Cash Dividends Declared Per Common Share $ 0.74 $ 0.72
Common Shares Outstanding (millions)
Weighted average common and equivalent 439.5 439.6
Gross Plant Additions
Network Operations $ 691.2 $ 495.8 39.4
All Other 16.4 18.5 (11.4)
---------------------------------------
Total Gross Plant Additions $ 707.6 $ 514.3 37.6
---------------------------------------
6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/97 6/30/96 % Change
Network Services Revenues
Network Operations (1) $ 6,516.1 $ 6,242.5 4.4
Network Related (2) 196.3 147.4 33.2
---------------------------------------
Total Network Services Revenues 6,712.4 6,389.9 5.0
Other Services 142.2 53.6 -
---------------------------------------
Total Operating Revenues $ 6,854.6 6,443.5 6.4
---------------------------------------
Debt Ratio - at end of period 51.0% 52.6%
Book Value Per Common Share
- at end of period $ 17.74 $ 16.43
Return on Average Common Equity 26.2% 30.6%
Return on Average Common Equity (Adjusted)* 26.6% 26.5%
Return on Average Total Capital 13.7% 15.0%
Return on Average Total Capital (Adjusted)* 13.9% 13.4%
Composite Depreciation Rate 7.7% 7.7%
Cash Dividends Declared Per Common Share $ 1.48 $ 1.44 (3)
Common Shares Outstanding (millions)
Weighted average common and equivalent 439.7 439.9
End of period 437.5 437.8
Gross Plant Additions
Network Operations $ 1,287.0 $ 937.5 37.3
All Other 37.8 34.9 8.3
---------------------------------------
Total Gross Plant Additions $ 1,324.8 $ 972.4 36.2
---------------------------------------
Employees - end of period
Network Operations 58,418 56,162
Network Related 6,246 4,343
All Other 2,194 (4) 268
---------------------------------------
Total Employees 66,858 60,773
---------------------------------------
Footnotes
(1) Network Operations principally represents the consolidation of the seven
operating telephone companies, including intercompany eliminations.
(2) Network Related principally includes subsidiaries for network integration,
CPE distribution, inside wiring, long distance, and entertainment and
information services. Certain 1996 revenue amounts have been reclassified
to conform with the 1997 presentation.
(3) Includes payment of $.005 per common share for redemption of rights under
the Company's Shareholder Rights Plan.
(4) Includes 1,976 employees at Grupo Iusacell, which we began consolidating in
the first quarter of 1997
* Returns for the three and six month periods ended 6/30/97 have been
adjusted for the effects of charges associated with an investment writedown.
Returns for the six month period ended 6/30/96 have been adjusted for the
cumulative effect of the change in the method of accounting for directory
publishing.
Selected Financial Results and Operating Statistics
(Dollars in Millions, Except Per Access Line Amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 6/30/97 6/30/96* % Change
SELECTED FINANCIAL RESULTS
Transport Services
Local service $ 1,256.9 $ 1,179.4 6.6
Network access
Interstate 758.2 713.6 6.2
Intrastate 150.3 154.2 (2.5)
Toll service 328.2 350.1 (6.3)
Ancillary Services
Director publishing 259.4 249.5 4.0
Other 85.5 79.9 7.0
Value-added Services 427.0 386.4 10.5
---------------------------------------
Operating Revenues 3,265.5 3,113.1 4.9
---------------------------------------
Employee Costs 862.1 916.0 (5.9)
Depreciation and amortization 652.5 628.1 3.9
Other 762.0 712.1 7.0
---------------------------------------
Operating Expenses 2,276.6 2,256.2 0.9
---------------------------------------
Operating Income $ 988.9 $ 856.9 15.4
---------------------------------------
Operating Cash Flow (1) $ 1,641.4 $ 1,485.0 10.5
Operating Cash Flow Margin 50.3% 47.7%
Op. Rev. Per Access Line (annualized) $ 623 $ 617 1.0
Op. Exp. Per Access Line (annualized) $ 434 $ 447 (2.9)
Cash Exp. Per Access Line (annualized)(2) $ 310 $ 323 (4.0)
Gross Plant Additions $ 691.2 $ 495.8 39.4
Access Minutes of Use (in millions)
Interstate 17,395 16,276 6.9
Intrastate 4,929 4,439 11.0
---------------------------------------
Total Access Minutes of Use 22,324 20,715 7.8
---------------------------------------
Toll Messages (in millions)
Intrastate 845.2 828.8 2.0
Interstate 40.0 41.3 (3.1)
---------------------------------------
Total Toll Messages 885.2 870.1 1.7
---------------------------------------
6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/97 6/30/96* % Change
SELECTED FINANCIAL RESULTS
Transport Services
Local service $ 2,445.6 $ 2,319.1 5.5
Network access
Interstate 1,523.4 1,429.3 6.6
Intrastate 302.2 316.4 (4.5)
Toll service 664.1 719.7 (7.7)
Ancillary Services
Director publishing 560.1 544.4 2.9
Other 158.7 155.3 2.2
Value-added Services 862.0 758.3 13.7
---------------------------------------
Operating Revenues 6,516.1 6,242.5 4.4
---------------------------------------
Employee Costs 1,719.0 1,835.0 (6.3)
Depreciation and amortization 1,295.8 1,247.4 3.9
Other 1,524.7 1,428.5 6.7
---------------------------------------
Operating Expenses 4,539.5 4,510.9 0.6
---------------------------------------
Operating Income $ 1,976.6 $ 1,731.6 14.1
---------------------------------------
Operating Cash Flow (1) $ 3,272.4 $ 2,979.0 9.8
Operating Cash Flow Margin 50.3% 47.7%
Op. Rev. Per Access Line (annualized) $ 621 $ 619 0.3
Op. Exp. Per Access Line (annualized) $ 433 $ 447 (3.1)
Cash Exp. Per Access Line (annualized)(2) $ 309 $ 324 (4.6)
Employees Per 10,000 Access Lines (3) 27.4 27.4 -
Gross Plant Additions $ 1,287.0 $ 937.5 37.3
Gross Plant Investment-end of period $ 34,942.0 $ 33,167.6 5.3
Net Plant Investment-end of period $ 15,407.9 $ 15,181.9 1.5
Gross Plant Investment Per Access Line $ 1,666 $ 1,633 1.3
Net Plant Investment Per Access Line $ 735 $ 753 (2.4)
Composite Depreciation Rate 7.6% 7.7%
Operating Statistics
Access Lines in Service - end of period
(in thousands)
Residence 13,213 12,770 3.5
Business 7,481 7,123 5.0
Public 278 276 0.7
---------------------------------------
Total Access Lines in Service 20,972 20,169 4.0
---------------------------------------
Access Minutes of Use (in millions)
Interstate 34,103 32,404 5.2
Intrastate 9,543 9,012 5.9
---------------------------------------
Total Access Minutes of Use 43,646 41,416 5.4
---------------------------------------
Toll Messages (in millions)
Intrastate 1,668.1 1,683.1 (0.9)
Interstate 79.0 83.8 (5.7)
---------------------------------------
Total Toll Messages 1,747.1 1,766.9 (1.1)
---------------------------------------
Footnotes
* Restated for the effect of the change in the method of accounting for
directory publishing.
(1) Operating Cash Flow equals operating income plus depreciation and
amortization.
(2) Operating Cash Expense equals operating expenses less depreciation and
amortization.
(3) Calculation excludes Directory Services, certain Headquarters employees not
directly associated with telephone operations, and employees of BACCSI, our
competitive inside wiring subsidiary.
Condensed Consolidated Balance Sheets
(Dollars in Millions)
Unaudited 6/30/97 6/30/96* % Change
ASSETS
Current Assets
Cash and cash equivalents $ 103.9 $ 63.7 $ 40.2
Short-term investments 213.0 97.5 115.5
Other current assets 3,633.5 3,468.8 164.7
---------------------------------------
Total Current Assets 3,950.4 3,630.0 320.4
---------------------------------------
Plant, Property and Equipment 35,629.6 33,763.6 1,866.0
Less Accumulated Depreciation 19,702.6 18,139.1 1,563.5
---------------------------------------
Net Plant, Propety and Equipment 15,927.0 15,624.5 302.5
---------------------------------------
Investments in Unconsolidated Businesses 3,469.2 3,267.2 202.0
Other Assets 1,631.8 1,249.9 381.9
---------------------------------------
Total Assets $ 24,978.4 $ 23,771.6 $ 1,206.8
---------------------------------------
LIABILITIES AND SHAREOWNERS' INVESTMENT
Current Liabilities
Debt maturing within one year $ 2,273.8 $ 1,842.6 $ 431.2
Other current liabilities 3,252.6 2,951.6 301.0
---------------------------------------
Total Current Liabilities 5,526.4 4,794.2 732.2
---------------------------------------
Long-Term Debt 5,816.4 6,130.6 (314.2)
Employee Benefit Obligations 3,828.2 3,865.9 (37.7)
Deferred Credits and Other Liabilities 1,913.6 1,641.6 272.0
Preferred Stock of Subsidiary 135.0 145.0 (10.0)
Shareowners' Investment 7,758.8 7,194.3 564.5
---------------------------------------
Total Liabilities and Shareowners'
Investment $ 24,978.4 $ 23,771.6 $ 1,206.8
---------------------------------------
Footnote
* Restated for the effect of the change in the method of accounting for
directory publishing.
Condensed Consolidated Statements of Cash Flows
(Dollars in Millions)
6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/97 6/30/96 % Change
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 1,014.5 $ 1,070.5 $ (56.0)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,356.4 1,267.7 88.7
Cumulative effect of change in
accounting principle, net of tax - (142.1) 142.1
Income from unconsolidated businesses (106.9) (165.9) 59.0
Dividends received from
unconsolidated businesses 65.4 60.9 4.5
Other items, net 34.8 35.7 (0.9)
Changes in certain assets and
liabilities, net of effects from
acquisition/disposition of businesses (421.5) (242.6) (178.9)
---------------------------------------
Net cash provided by operating activities 1,942.7 1,884.2 58.5
---------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in short-term investments 62.7 (97.5) 160.2
Additions to plant, property and equipment (1,324.6) (972.6) (352.0)
Proceeds from sale of plant,
property and equipment 0.5 4.4 (3.9)
Investment in notes receivable and
preferred stock (17.9) (0.3) (17.6)
Proceeds from notes receivable 26.6 68.1 (41.5)
Acquisition of businesses, less cash acquired - (2.2) 2.2
Proceeds from Telecom Corp. of New Zealand
share repurchase plan 82.0 - 82.0
Investments in unconsolidated businesses, net (100.6) (122.4) 21.8
Proceeds from disposition of businesses 271.5 - 271.5
Other, net (52.3) 6.7 (59.0)
---------------------------------------
Net cash used in investing activities (1,052.1) (1,115.8) 63.7
---------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal repaymcncs of borrowings
and capital lease obligations (45.6) (137.0) 91.4
Net change in short-term borrowings
with original maturities of three
months or less (117.4) (230.5) 113.1
Dividends paid (639.1) (621.6) (17.55)
Purchase of common stock for treasury (158.6) (79.1) (79.5)
Proceeds from sale of treasury stock 107.0 56.8 50.2
Procceds from sale of common stock - 1.4 (1.4)
Reduction in preferred stock of subsidiary (10.0) - (10.0)
Net change in outstanding checks drawn
on controlled disbursement accounts (75.5) (51.5) (24.0)
---------------------------------------
Net cash used in financing activities (939.2) (1,061.5) 122.3
---------------------------------------
Decrease in Cash and Cash Equivalents (48.6) (293.1) 244.5
Cash and Cash Equivalents, Beginning of Year 152.5 356.8 204.3
---------------------------------------
Cash and Cash Equivalents, End of Period $ 103.9 $ 63.7 $ 40.2
---------------------------------------
Cellular Operations
3 Mos. Ended 3 Mos. Ended
Unaudited 6/30/97 6/30/96 % Change
SELECTED OPERATING DATA
Churn 1.6% 1.7%*
Revenue per Subscriber $ 54 $ 60* (10.0)
Acquisition Cost per Gross Add (5) $ 230 $ 204* 12.7
Cash Expense per Subscriber $ 30 $ 34* (11.8)
SELECTED FINANCIAL DATA (Dollars in Millions)
Operating Revenues (6) $714.2 $615.6* 16.0
Less: Cost of Equipment 84.0 66.8* 25.7
Net Revenues 630.2 548.8* 14.8
Operating Income 176.0 153.4 14.7
Pretax Income 167.5 139.7 19.9
Operating Cash Flow (7) 282.4 236.2 19.6
Operating Cash Flow Margin 45% 43%*
Capital Expenditures, excluding
aquisitions $260.2 $228.0* 14.1
6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/97 6/30/96 % Change
SELECTED OPERATING DATA
Controlled POPs (000) (1) 56,830 55,840 1.8
Owned POPs (000) (2) 54,944 53,788 2.1
Subscribers (000) 4,875 3,822 27.6
Penetration (3) 8.6% 6.8%
Churn 1.7% 1.7%*
Revenue per Subscriber (4) $ 53 $ 58* (8.6)
Acquisition Cost per Gross Add (5) $ 222 $ 209* 6.2
Cash Expense per Subscriber $ 31 $ 34* (8.8)
SELECTED FINANCIAL DATA (Dollars in Millions)
Operating Revenues (6) $ 1,371.2 $ 1,155.0* 18.7
Less: Cost of Equipment 158.9 127.7* 24.4
Net Revenues 1,212.3 1,027.4* 18.0
Operating Income 313.9 270.2 16.2
Pretax Income 293.9 251.3 17.0
Operating Cash Flow (7) 516.8 430.7 20.0
Operating Cash Flow Margin 43% 42%*
Capital Expenditures, excluding
aquisitions $ 504.5 $ 343.1* 47.0
Footnotes
(1) Controlled POPs represent the total number of POPs for markets in which
BANM has operating control.
(2) Owned POPs represent BANM percentage ownership in all licensed markets.
(3) Penetration is calculated by dividing subscribers by controlled POPs.
(4) Revenue per subscriber is calculated using service revenues, incollect
roaming, outcollect roaming, and equipment revenue. Incollect roaming
revenues were $57.3 million and $104.6 million for the three and six months
ended 6/30/97, respectively, and $54.7 million and $96.0 million for the
three and six months ended 6/30/96, respectively.
(5) Acquisition costs include commission expense and net margin on sale of
equipment.
(6) Operating Revenues include service revenues, outcollect roaming, and
equipment revenues.
(7) Operating Cash Flow equals Operating Income plus depreciation and
amortization.
* Revised from amount previously reported.
Bell Atlantic Wireless Portfolio - Proportionate Data
(Millions)
Percentage Owned Proportionate
Entity (as of 6/30/97) Ownership POPs POPs
Bell Atlantic NYNEX Mobile 62.4% 54.9 34.3
PrimeCo Personal Communications 25.0% 57.2 14.3
Grupo Iusacell 42.1% 62.5 26.3
Omnitel Pronto Italia 17.4% 58.0 10.1
EuroTel 24.5% 15.6 3.8
Telecom Corp. of New Zealand 24.9% 3.5 0.9
Total 255.7 89.7
Bell Atlantic had 3.5 million proportionate subscribers from its wireless
investments at 6/30/97, an increase of 40 percent from 6/30/96.
END
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