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VERIZON COMMUNICATIONS INC Annual Report, Year Ended Dec 31, 1994

Filing Date
Filed March 30, 1995
Period End
December 31, 1994
Security
VZ
In the record · 2016–202610-K1110-Q328-K201

VZ filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 201 current reports (8-K) between 2016 and 2026.

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  2. Leadership change8-K · Dec ’21Dec ’21
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01—Abstract

Summary

Summary of the 10-K filed March 30, 1995. Cited figures are marked; the original filing is the authoritative source.

Bell Atlantic Corporation's 10-K for fiscal 1994 reports a net loss of $754.8 milliona, or $1.73 per share, compared with net income of $1,403.4 million, or $3.22 per share, in 1993.

The loss was driven by a noncash, after-tax extraordinary charge of $2,150.0 millionb, recorded when the telephone subsidiaries discontinued Statement of Financial Accounting Standards No. 71 (regulatory accounting) effective August 1, 1994. Income before extraordinary items and cumulative effects was $1,401.9 million, or $3.21 per share, versus $1,481.6 million in 1993. Operating revenues rose to $13,791.4 million from $13,145.6 million, while operating income was $2,804.6 million, roughly flat with $2,797.6 million the prior year.

The filing describes a company restructuring its workforce, with 400 employees separated in 1994 and about 5,200 more expected through 1997, and a $161.9 millionc pretax charge for separation benefits. Wireless services revenue grew to $1,059.8 million from $785.5 million, while the company sold most of its lease financing business (TriCon) for proceeds that included $1,323.8 million in investing cash flow. The company plans to combine its domestic cellular operations with NYNEX Corporation, with closing expected in mid-1995, and the telephone subsidiaries face growing competition and several state regulatory changes.

Shareowners' investment fell to $6,081.3 milliond from $8,224.4 million, and total assets declined to $24,271.8 million from $29,544.2 million, largely reflecting the regulatory accounting charge. The Form 10-K incorporates much of its MD&A and financial statements by reference to the 1994 Annual Report to shareowners, which is included as Exhibit 13. Cash dividends declared rose to $2.76 per share from $2.68, and operating cash flow was $3,752.6 million, compared with $4,154.8 million in 1993.

02—Key points

Key Highlights

  1. Net loss of $754.8 million ($1.73 per share) in 1994, versus net income of $1,403.4 million ($3.22 per share) in 1993, driven by a $2,150.0 million after-tax extraordinary charge from discontinuing SFAS No. 71 accounting.
  2. Operating revenues increased to $13,791.4 million from $13,145.6 million; operating income was $2,804.6 million versus $2,797.6 million.
  3. Wireless services revenue rose to $1,059.8 million from $785.5 million, with cellular customer base growth of 57.9% in 1994.
  4. Workforce reduction: approximately 400 employees separated in 1994, with about 5,200 more expected through 1997, and a $161.9 million pretax separation benefit charge in Q3 1994.
  5. Planned merger of domestic cellular operations with NYNEX Corporation (Bell Atlantic to own 62.35%), expected to close in mid-1995.
  6. Cash dividends declared were $2.76 per share in 1994, up from $2.68 in 1993; total assets were $24,271.8 million at year-end 1994 versus $29,544.2 million.
  7. Sold most of its lease financing business (TriCon) in 1994 for cash and notes, with a pretax gain of $42.0 million on the transaction.

03—Questions

Frequently Asked Questions

  1. Why did Bell Atlantic report a net loss in 1994?

    The loss resulted from a noncash, after-tax extraordinary charge of $2,150.0 million, or $4.94 per share, recorded when the telephone subsidiaries discontinued accounting under SFAS No. 71 effective August 1, 1994. The charge included a $3,463.0 million pretax increase in the depreciation reserve for plant and equipment, which the company attributed to inadequate depreciation levels and impairment analysis. Income before extraordinary items was $1,401.9 million, or $3.21 per share.

  2. How did the company's core operating performance compare with 1993?

    Operating revenues grew to $13,791.4 million from $13,145.6 million, led by wireless services ($1,059.8 million versus $785.5 million) and network access ($3,237.6 million versus $3,070.9 million). Operating income was nearly unchanged at $2,804.6 million compared with $2,797.6 million, as higher employee costs (including the $161.9 million separation charge) and depreciation offset revenue gains.

  3. What is the status of the planned NYNEX cellular joint venture?

    Bell Atlantic and NYNEX executed a Joint Venture Formation Agreement in June 1994 to combine their domestic cellular properties. Bell Atlantic will own 62.35% and NYNEX 37.65%, with equal control. The transaction is subject to regulatory approvals and other closing conditions and is expected to close in mid-1995. Afterward, the cellular operations will be accounted for under the equity method rather than consolidated in operating revenues.

  4. What competitive and regulatory pressures does the company face?

    The filing describes growing competition from alternative access providers, intraLATA toll competition in several states, and new local exchange entrants such as MFS-Intelenet and MCI Metro ATS. Toll service revenues declined $2.5 million in 1994, and the company expects competition to intensify in 1995. Various state plans, including alternative regulation in Pennsylvania, Delaware, New Jersey and Virginia, are in place or pending, and federal legislation could change line of business restrictions under the MFJ, though the filing states no definitive prediction can be made.

04—Continue

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