11-K 1 a11-k.txt FORM 11K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------- FORM 11-K ------------- (Mark One) (X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the years ended December 31, 1999 and 1998 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 1-8606 ------------- Bell Atlantic Savings Plan for Salaried Employees ------------- Bell Atlantic Corporation 1095 Avenue of the Americas, New York, New York 10036 BELL ATLANTIC SAVINGS PLAN For SALARIED EMPLOYEES As of December 31, 1999 and 1998 TABLE OF CONTENTS Independent Auditors' Report 1 Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 1999 and 1998 2-3 Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 1999 and 1998 4-5 Notes to Financial Statements 6-23 Signature page 24
INDEPENDENT AUDITORS' REPORT To the Corporate Employees' Benefits Committee of Bell Atlantic Corporation: We have audited the accompanying Statements of Net Assets Available for Benefits of the Bell Atlantic Savings Plan for Salaried Employees (the "Plan") as of December 31, 1999 and 1998, and the related Statements of Changes in Net Assets Available for Benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Bell Atlantic Savings Plan for Salaried Employees as of December 31, 1999 and 1998, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. /s/ Mitchell & Titus, LLP New York, New York June 9, 2000 BELL ATLANTIC SAVINGS PLAN for SALARIED EMPLOYEES Statement of Net Assets Available for Benefits December 31, 1999 (Dollars in Thousands)
FUND INFORMATION ----------------------------------------------------------------------- BELL GOVERNMENT PASSIVE U.S. ATLANTIC MONEY EQUITY SHARES TELECOMMUNICATIONS MARKET INDEX FUND FUND FUND FUND --------------- ---------------------- ------------- ----------------- ASSETS: Investments at market (see Notes 2 and 3): Allocated Share of Master Trust net assets $ 2,755,367 $ 297,567 $ 147,874 $ 2,179,046 Temporary cash investments - - - 4,246 Bell Atlantic Corporation common shares - - - - --------------- ---------------------- ------------- ----------------- Total investments 2,755,367 297,567 147,874 2,183,292 Receivables: Participants' contributions 264 - 22 201 Loan repayments 30 - 3 21 Loans to participants - - - - Dividends and interest receivable - - - 17 --------------- ---------------------- ------------- ----------------- Total receivables 294 - 25 239 --------------- ---------------------- ------------- ----------------- Total assets 2,755,661 297,567 147,899 2,183,531 --------------- ---------------------- ------------- ----------------- LIABILITIES: Commitments (Note 2) - - - - Notes payable (Note 6) - - - - --------------- ---------------------- ------------- ----------------- Total liabilities - - - - --------------- ---------------------- ------------- ----------------- Net assets available for benefits (Notes 1 and 2) $ 2,755,661 $ 297,567 $ 147,899 $ 2,183,531 =============== ====================== ============= ================= FUND INFORMATION --------------------------------------------------------------- EMPLOYEE STOCK OWNERSHIP PLAN INCOME LOAN ---------------------------- FUND FUND ALLOCATED UNALLOCATED ---------------- ------------- ------------ -------------- ASSETS: Investments at market (see Notes 2 and 3): Allocated Share of Master Trust net assets $ 1,180,504 $ - $ 1,279,189 $ - Temporary cash investments - - - - Bell Atlantic Corporation common shares - - - 872,077 ---------------- ------------- --------------- ------------- Total investments 1,180,504 - 1,279,189 872,077 Receivables: Participants' contributions 38 - 392 - Loan repayments 9 - - - Loans to participants - 161,631 - - Dividends and interest receivable - - - - ---------------- ------------- --------------- ------------- Total receivables 47 161,631 392 - ---------------- ------------- --------------- ------------- Total assets 1,180,551 161,631 1,279,581 872,077 ---------------- ------------- --------------- ------------- LIABILITIES: Commitments (Note 2) - - - 13,397 Notes payable (Note 6) - - - 506,085 ---------------- ------------- --------------- ------------- Total liabilities - - - 519,482 ---------------- ------------- --------------- ------------- Net assets available for benefits (Notes 1 and 2) $ 1,180,551 $ 161,631 $ 1,279,581 $ 352,595 ================ ============= =============== ============= FUND INFORMATION ----------------------------------------------------------- PASSIVE INTERNATIONAL ACTIVE U.S. U.S. PAYSOP EQUITY INDEX EQUITY BALANCED FUND FUND FUND FUND ----------- -------------- -------------- ------------ ASSETS: Investments at market (see Notes 2 and 3): Allocated Share of Master Trust net assets $ 83,502 $ 138,290 $ 144,299 $ 90,080 Temporary cash investments - - 281 175 Bell Atlantic Corporation common shares - - - - ----------- -------------- -------------- ------------ Total investments 83,502 138,290 144,580 90,255 Receivables: Participants' contributions - 36 50 26 Loan repayments - 4 2 1 Loans to participants - - - - Dividends and interest receivable - - 1 1 ----------- -------------- -------------- ------------ Total receivables - 40 53 28 ----------- -------------- -------------- ------------ Total assets 83,502 138,330 144,633 90,283 ----------- -------------- -------------- ------------ LIABILITIES: Commitments (Note 2) - - - - Notes payable (Note 6) - - - - ----------- -------------- -------------- ------------ Total liabilities - - - - ----------- -------------- -------------- ------------ Net assets available for benefits (Notes 1 and 2) $ 83,502 $ 138,330 $ 144,633 $ 90,283 =========== ============== ============== ============ FUND INFORMATION ------------------------------------------------------------------------------ ACTIVE U.S. BOND GLOBAL INTERNATIONAL U.S. SMALL MARKET BALANCED EQUITY CAPITALIZATION INDEX FUND FUND FUND FUND TOTAL ------------- --------------- ------------- -------------- --------------- ASSETS: Investments at market (see Notes 2 and 3): Allocated Share of Master Trust net assets $ 59,629 $ 145,403 $ 132,552 $ 148,587 $ 8,781,889 Temporary cash investments 116 283 258 - 5,359 Bell Atlantic Corporation common shares - - - - 872,077 ------------- --------------- ------------- -------------- --------------- Total investments 59,745 145,686 132,810 148,587 9,659,325 Receivables: Participants' contributions 14 27 33 22 1,125 Loan repayments 1 2 1 2 76 Loans to participants - - - - 161,631 Dividends and interest receivable 1 1 1 - 22 ------------- --------------- ------------- -------------- --------------- Total receivables 16 30 35 24 162,854 ------------- --------------- ------------- -------------- --------------- Total assets 59,761 145,716 132,845 148,611 9,822,179 ------------- --------------- ------------- -------------- --------------- LIABILITIES: Commitments (Note 2) - - - - 13,397 Notes payable (Note 6) - - - - 506,085 ------------- --------------- ------------- -------------- --------------- Total liabilities - - - - 519,482 ------------- --------------- ------------- -------------- --------------- Net assets available for benefits (Notes 1 and 2) $ 59,761 $ 145,716 $ 132,845 $ 148,611 $ 9,302,697 ============= =============== ============= ============== ===============
See notes to financial statements. 2 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1998 (DOLLARS IN THOUSANDS)
FUND INFORMATION ---------------------------------------------------------------- BELL GOVERNMENT PASSIVE U.S. ATLANTIC MONEY EQUITY SHARES TELECOMMUNICATIONS MARKET INDEX FUND FUND FUND FUND ------------- --------------------- ------------ ------------ ASSETS: Investments at market (see Notes 2 and 3): Allocated Share of Master Trust net assets $ 2,035,601 $ 253,335 $ 117,154 $ 1,946,428 Temporary cash investments - - - 1,696 Bell Atlantic Corporation common shares - - - - ------------- --------------------- ------------ ------------ Total investments 2,035,601 253,335 117,154 1,948,124 Receivables: Participants' contributions 215 - 10 284 Loan repayments 82 - 2 84 Transfers from NTD Plan 3,295 - 38,736 9,446 Loans to participants - - - - Dividends and interest receivable - - - 7 ------------- --------------------- ------------ ------------ Total receivables 3,592 - 38,748 9,821 ------------- --------------------- ------------ ------------ Total assets 2,039,193 253,335 155,902 1,957,945 ------------- --------------------- ------------ ------------ LIABILITIES: Notes payable (Note 6) - - - - ------------- --------------------- ------------ ------------ Total liabilities - - - - ------------- --------------------- ------------ ------------ Net assets available for benefits (Notes 1 and 2) $ 2,039,193 $ 253,335 $ 155,902 $ 1,957,945 ============= ===================== ============ ============ FUND INFORMATION ------------------------------------------------------- EMPLOYEE STOCK OWNERSHIP PLAN INCOME LOAN ------------------------ FUND FUND ALLOCATED UNALLOCATED ------------ ----------- ------------------------- ASSETS: Investments at market (see Notes 2 and 3): Allocated Share of Master Trust net assets $ 1,267,064 $ - $ 1,213,140 $ - Temporary cash investments - - - - Bell Atlantic Corporation common shares - - - 869,303 ------------ ----------- -------------- ------------ Total investments 1,267,064 - 1,213,140 869,303 Receivables: Participants' contributions 60 - - - Loan repayments 18 (232) - - Transfers from NTD Plan 1,841 - - - Loans to participants - 149,154 - - Dividends and interest receivable - - - - ------------ ----------- -------------- ------------ Total receivables 1,919 148,922 - - ------------ ----------- -------------- ------------ Total assets 1,268,983 148,922 1,213,140 869,303 ------------ ----------- -------------- ------------ LIABILITIES: Notes payable (Note 6) - - - 554,517 ------------ ----------- -------------- ------------ Total liabilities - - - 554,517 ------------ ----------- -------------- ------------ Net assets available for benefits (Notes 1 and 2) $ 1,268,983 $ 148,922 $ 1,213,140 $ 314,786 ============ =========== ============== ============ FUND INFORMATION ----------------------------------------------------- PASSIVE INTERNATIONAL ACTIVE U.S. U.S. PAYSOP EQUITY INDEX EQUITY BALANCED FUND FUND FUND FUND ------------- ------------ ------------ ----------- ASSETS: Investments at market (see Notes 2 and 3): Allocated Share of Master Trust net assets $ 81,892 $ 100,594 $ 143,284 $ 97,366 Temporary cash investments - - 125 85 Bell Atlantic Corporation common shares - - - - ------------- ------------ ------------ ----------- Total investments 81,892 100,594 143,409 97,451 Receivables: Participants' contributions - 17 47 22 Loan repayments - 4 12 5 Transfers from NTD Plan - 1,777 5,181 6,124 Loans to participants - - - - Dividends and interest receivable - - 1 - ------------- ------------ ------------ ----------- Total receivables - 1,798 5,241 6,151 ------------- ------------ ------------ ----------- Total assets 81,892 102,392 148,650 103,602 ------------- ------------ ------------ ----------- LIABILITIES: Notes payable (Note 6) - - - - ------------- ------------ ------------ ----------- Total liabilities - - - - ------------- ------------ ------------ ----------- Net assets available for benefits (Notes 1 and 2) $ 81,892 $ 102,392 $ 148,650 $ 103,602 ============= ============ ============ =========== FUND INFORMATION -------------------------------------------------------------------- ACTIVE U.S. BOND GLOBAL INTERNATIONAL U.S. SMALL MARKET BALANCED EQUITY CAPITALIZATION INDEX FUND FUND FUND FUND TOTAL ------------- ------------ ----------- ------------ ------------ ASSETS: Investments at market (see Notes 2 and 3): Allocated Share of Master Trust net assets $ 57,949 $ 42,077 $ 101,430 $ 206,298 $ 7,663,612 Temporary cash investments 51 37 88 - 2,082 Bell Atlantic Corporation common shares - - - - 869,303 ------------- ------------- ------------- ------------- ------------ Total investments 58,000 42,114 101,518 206,298 8,534,997 Receivables: Participants' contributions 17 16 36 23 747 Loan repayments 5 4 9 7 - Transfers from NTD Plan 1,809 1,479 4,650 4,694 79,032 Loans to participants - - - - 149,154 Dividends and interest receivable - - 1 - 9 ------------- ------------- ------------- ------------- ------------ Total receivables 1,831 1,499 4,696 4,724 228,942 ------------- ------------- ------------- ------------- ------------ Total assets 59,831 43,613 106,214 211,022 8,763,939 ------------- ------------- ------------- ------------- ------------ LIABILITIES: Notes payable (Note 6) - - - - 554,517 ------------- ------------- ------------- ------------- ------------ Total liabilities - - - - 554,517 ------------- ------------- ------------- ------------- ------------ Net assets available for benefits (Notes 1 and 2) $ 59,831 $ 43,613 $ 106,214 $ 211,022 $ 8,209,422 ============= ============= ============= ============= ============
See notes to financial statements. 3 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1999 (DOLLARS IN THOUSANDS)
FUND INFORMATION ------------------------------------------------------------------- BELL GOVERNMENT PASSIVE U.S. ATLANTIC MONEY EQUITY SHARES TELECOMMUNICATIONS MARKET INDEX FUND FUND FUND FUND -------------- ------------------- ------------- --------------- Additions: Allotments, Contributions and Transfers: Employee allotments $ 67,770 $ - $ 4,398 $ 74,577 Interfund transfers 391,435 (4,640) (28,034) (106,544) Plan transfers-in 26,368 996 333 5,924 Plan transfer in from NTD - - 6,493 - Rollover contributions 670 (45) 506 856 Employing company contributions (Note 1) 1,845 - 29,419 54 Loans to participants (30,270) (902) (2,515) (21,062) Transfer for loan repayments 27,075 - 1,249 20,713 -------------- ------------------- ------------- --------------- Total allotments, contributions, and transfers 484,893 (4,591) 11,849 (25,482) Investment income: Dividends/Interest 61,915 - - - Allocated share of Master Trust investment activities (Note 3) 340,827 65,029 7,907 394,856 -------------- ----------------- ------------- --------------- Total additions (subtractions) 887,635 60,438 19,756 369,374 -------------- ------------------- ------------- --------------- Deductions: Administrative expenses 1,781 210 195 1,477 Distributions to participants 164,053 15,888 27,441 140,023 Plan transfers-out 5,333 108 123 2,288 Interest on notes payable - - - - ------------ ----------------- ----------- ------------- Total deductions 171,167 16,206 27,759 143,788 ------------ ----------------- ----------- ------------- Net increase (decrease) 716,468 44,232 (8,003) 225,586 Net assets available for benefits: Beginning of year 2,039,193 253,335 155,902 1,957,945 -------------- ------------------- ------------- --------------- End of year (Notes 1 and 2) $ 2,755,661 $ 297,567 $ 147,899 $ 2,183,531 ============== =================== ============= =============== FUND INFORMATION -------------------------------------------------------------- EMPLOYEE STOCK OWNERSHIP PLAN INCOME LOAN ---------------------------- FUND FUND ALLOCATED UNALLOCATED -------------- ------------- ------------ --------------- Additions: Allotments, Contributions and Transfers: Employee allotments $ 23,742 $ - $ - $ - Interfund transfers (77,898) - (141,091) - Plan transfers-in 4,331 - 4,986 - Plan transfer in from NTD - - - - Rollover contributions 308 - - - Employing company contributions (Note 1) 15 - 110,287 (7,247) Loans to participants (9,404) 74,335 (925) - Transfer for loan repayments 8,022 (68,736) 629 - - -------------- ------------- -------------- -------------- Total allotments, contributions, and transfers (50,884) 5,599 (26,114) (7,247) Investment income: Dividends/Interest - 7,110 33,660 22,189 Allocated share of Master Trust investment activities (Note 3) 74,628 - 173,607 64,061 -------------- ------------- -------------- -------------- Total additions (subtractions) 23,744 12,709 181,153 79,003 -------------- ------------- -------------- -------------- Deductions: Administrative expenses 1,655 - 1,896 - Distributions to participants 108,629 - 112,752 - Plan transfers-out 1,892 - 64 - Interest on notes payable - - - 41,194 -------------- ------------- -------------- -------------- Total deductions 112,176 - 114,712 41,194 -------------- ------------- -------------- -------------- Net increase (decrease) (88,432) 12,709 66,441 37,809 Net assets available for benefits: Beginning of year 1,268,983 148,922 1,213,140 314,786 -------------- ------------- -------------- -------------- End of year (Notes 1 and 2) $ 1,180,551 $ 161,631 $ 1,279,581 $ 352,595 ============== ============= ============== ============== FUND INFORMATION --------------------------------------------------------------------- PASSIVE INTERNATIONAL ACTIVE U.S. GLOBAL PAYSOP EQUITY INDEX U.S. EQUITY BALANCED BALANCED FUND FUND FUND FUND FUND --------- -------------- ------------ ------------- ----------- Additions: Allotments, Contributions and Transfers: Employee allotments $ - $ 8,326 $ 10,522 $ 5,751 $ 3,424 Interfund transfers 2,280 4,051 (21,338) (17,921) (7,541) Plan transfers-in 1,053 587 600 355 121 Plan transfer in from NTD - - - - - Rollover contributions - 33 508 330 86 Employing company contributions (Note 1) 3 14 5 3 1 Loans to participants - (1,379) (2,171) (1,060) (668) Transfer for loan repayments - 1,749 2,535 1,141 885 --------- -------------- ------------ ------------- ----------- Total allotments, contributions, and transfers 3,336 13,381 (9,339) (11,401) (3,692) Investment income: Dividends/Interest 2,251 - - - - Allocated share of Master Trust investment activities (Note 3) 13,960 31,880 17,817 6,870 8,170 --------- -------------- ------------ ------------- ----------- Total additions (subtractions) 19,547 45,261 8,478 (4,531) 4,478 --------- -------------- ------------ ------------- ----------- Deductions: Administrative expenses 65 229 566 386 277 Distributions to participants 17,698 8,994 11,589 8,145 4,186 Plan transfers-out 174 100 340 257 85 Interest on notes payable - - - - - --------- -------------- ------------ ------------- ----------- Total deductions 17,937 9,323 12,495 8,788 4,548 --------- -------------- ------------ ------------- ----------- Net increase (decrease) 1,610 35,938 (4,017) (13,319) (70) Net assets available for benefits: Beginning of year 81,892 102,392 148,650 103,602 59,831 --------- -------------- ------------ ------------- ----------- End of year (Notes 1 and 2) $ 83,502 $ 138,330 $ 144,633 $ 90,283 $ 59,761 ========= ============== ============ ============= =========== FUND INFORMATION ---------------------------------------------------------------- ACTIVE U.S. BOND INTERNATIONAL U.S. SMALL MARKET EQUITY CAPITALIZATION INDEX FUND FUND FUND TOTAL ---------------- -------------- ------------- ---------------- Additions: Allotments, Contributions and Transfers: Employee allotments $ 5,044 $ 7,347 $ 5,944 $ 216,845 Interfund transfers 65,294 (5,754) (52,299) - Plan transfers-in 353 376 384 46,767 Plan transfer in from NTD - - - 6,493 Rollover contributions 114 184 68 3,618 Employing company contributions (Note 1) 1 3 7 134,410 Loans to participants (1,172) (1,262) (1,545) - Transfer for loan repayments 1,559 1,662 1,517 - ---------------- -------------- ------------- ---------------- Total allotments, contributions, and transfers 71,193 2,556 (45,924) 408,133 Investment income: Dividends/Interest - - - 127,125 Allocated share of Master Trust investment activities (Note 3) 36,039 31,797 (1,822) 1,265,626 ---------------- -------------- ------------- ---------------- Total additions (subtractions) 107,232 34,353 (47,746) 1,800,884 ---------------- -------------- ------------- ---------------- Deductions: Administrative expenses 493 778 269 10,277 Distributions to participants 4,537 6,796 14,180 644,911 Plan transfers-out 99 148 216 11,227 Interest on notes payable - - - 41,194 ---------------- -------------- ------------- ---------------- Total deductions 5,129 7,722 14,665 707,609 ---------------- -------------- ------------- ---------------- Net increase (decrease) 102,103 26,631 (62,411) 1,093,275 Net assets available for benefits: Beginning of year 43,613 106,214 211,022 8,209,422 ---------------- -------------- ------------- ---------------- End of year (Notes 1 and 2) $ 145,716 $ 132,845 $ 148,611 $ 9,302,697 ================ ============== ============= ================
See notes to financial statements. 4 BELL ATLANTIC SAVINGS PLAN for SALARIED EMPLOYEES Statement of Changes in Net Assets Available for Benefits For the year ended December 31, 1998 (Dollars in Thousands)
FUND INFORMATION ----------------------------------------------------------------------------------------- BELL GOVERNMENT PASSIVE U.S. ATLANTIC MONEY EQUITY SHARES TELECOMMUNICATIONS MARKET INDEX INCOME LOAN FUND FUND FUND FUND FUND FUND ------------ ---------------------- ------------- ------------ ----------- ---------- Additions: Allotments, Contributions and Transfers: Employee allotments $ 27,364 $ - $ 3,691 $ 48,773 $ 18,988 $ - Interfund transfers (62,959) (1,256) 25,511 (76,107) 46,586 - Plan transfers-in 17,483 298 38,794 2,588 2,990 - Plan transfer in from Nynex 850,536 199,638 8,882 1,195,147 736,892 83,009 Tranfer in from PAYSOP (Note 1) - - - - - - Rollover contributions 396 - 147 569 141 - Employing company contributions (Note 1) 448 - 28 - - - Loans to participants (16,381) (464) (867) (18,480) (8,175) 49,951 Transfer for loan repayments 11,262 - 961 9,404 5,669 (32,923) ------------ ---------------------- ------------- ------------ ----------- ---------- Total allotments, contributions, and transfers 828,149 198,216 77,147 1,161,894 803,091 100,037 Investment income: Dividends/Interest 57,100 - - - - - Allocated share of Master Trust investment activities (Note 3) 257,061 61,540 4,874 274,469 53,094 - ------------ ---------------------- ------------- ------------ ----------- ---------- Total additions 1,142,310 259,756 82,021 1,436,363 856,185 100,037 ------------ ---------------------- ------------- ------------ ----------- ---------- Deductions: Administrative expenses 948 107 108 685 821 - Distributions to participants 71,962 6,314 17,523 94,725 88,906 - Plan transfers-out - - 43 891 708 - Interest on notes payable - - - - - - ---------- -------------------- ----------- ---------- --------- --------- Total deductions 72,910 6,421 17,674 96,301 90,435 - ---------- -------------------- ----------- ---------- --------- --------- Net increase 1,069,400 253,335 64,347 1,340,062 765,750 100,037 Net assets available for benefits: Beginning of year 969,793 - 91,555 617,883 503,233 48,885 ------------ ---------------------- ------------- ------------ ----------- ---------- ------------ ---------------------- ------------- ------------ ----------- ---------- End of year (Notes 1 and 2) $ 2,039,193 $ 253,335 $ 155,902 $ 1,957,945 $ 1,268,983 $ 148,922 ============ ====================== ============= ============ =========== ========== Fund Information ----------------------------------------------------------------------------- Employee Stock Passive Ownership Plan International Active U.S. ------------------------ PAYSOP Equity Index U.S. Equity Balanced Allocated Unallocated Fund Fund Fund Fund --------- ------------- ---------- ------------- ----------- ---------- Additions: Allotments, Contributions and Transfers: Employee allotments $ - $ - $ - $ 3,515 $ 6,236 $ 3,135 Interfund transfers (5,989) - - (12,507) 18,337 27,211 Plan transfers-in 798 - 310 2,055 265 190 Plan transfer in from Nynex 479,898 133,958 - 3,815 125,162 67,391 Tranfer in from PAYSOP (Note 1) - - 78,227 - - - Rollover contributions - - - 19 228 69 Employing company contributions (Note 1) 45,824 91,117 - - - - Loans to participants (652) - - (697) (1,270) (518) Transfer for loan repayments 228 - - 639 1,472 608 --------- ------------ ----------- ---------- ---------- --------- Total allotments, contributions, and transfers 520,107 225,075 78,537 (3,161) 150,430 98,086 Investment income: Dividends/Interest 24,602 25,894 2,758 - - - Allocated share of Master Trust investment activities (Note 3) 172,501 108,814 10,856 19,157 4,336 12,211 --------- ------------ ----------- ---------- ---------- --------- Total additions 717,210 359,783 92,151 15,996 154,766 110,297 --------- ------------ ----------- ---------- ---------- --------- Deductions: Administrative expenses 278 37 10 226 240 129 Distributions to participants 49,088 85,587 10,197 3,769 5,758 6,493 Plan transfers-out 212 - 52 41 118 73 Interest on notes payable - 53,197 - - - - --------- ------------ ----------- ---------- ---------- --------- Total deductions 49,578 138,821 10,259 4,036 6,116 6,695 --------- ------------ ----------- ---------- ---------- --------- Net increase 667,632 220,962 81,892 11,960 148,650 103,602 Net assets available for benefits: Beginning of year 545,508 93,824 - 90,432 - - --------- ------------ ----------- ---------- ---------- --------- End of year (Notes 1 and 2) $ 1,213,140 $ 314,786 $ 81,892 $ 102,392 $ 148,650 $ 103,602 =========== ============= ============ =========== =========== ========== Fund Information --------------------------------------------------------------------- Active U.S. Bond Global International U.S. Small Market Balanced Equity Capitalization Index Fund Fund Fund Fund Total ---------- ------------ ----------- --------- ------------ Additions: Allotments, Contributions and Transfers: Employee allotments $ 1,529 $ 1,476 $ 4,602 $ 2,794 $ 122,103 Interfund transfers (6,096) (6,261) 19,276 34,254 - Plan transfers-in 1,898 1,523 138 4,813 74,143 Plan transfer in from Nynex 55,793 42,889 92,436 115,782 4,191,228 Tranfer in from PAYSOP (Note 1) - - - - 78,227 Rollover contributions 29 42 92 27 1,759 Employing company contributions (Note 1) - - - - 137,417 Loans to participants (304) (329) (808) (1,006) - Transfer for loan repayments 397 397 1,059 827 - -------- -------------- ------------- ----------- ------------ Total allotments, contributions, and transfers 53,246 39,737 116,795 157,491 4,604,877 Investment income: Dividends/Interest - - - - 110,354 Allocated share of Master Trust investment activities (Note 3) 8,436 5,720 (6,135) 9,898 996,832 -------- -------------- ------------- ----------- ------------ Total additions 61,682 45,457 110,660 167,389 5,712,063 -------- -------------- ------------- ----------- ------------ Deductions: Administrative expenses 101 100 221 58 4,069 Distributions to participants 1,704 1,714 4,100 8,501 456,341 Plan transfers-out 46 30 125 20 2,359 Interest on notes payable - - - - 53,197 -------- ------------ ----------- --------- ---------- Total deductions 1,851 1,844 4,446 8,579 515,966 Net increase $ 59,831 43,613 106,214 158,810 5,196,097 Net assets available for benefits: Beginning of year - - - 52,212 3,013,325 -------- ------------ ----------- --------- ---------- End of year (Notes 1 and 2) $ 59,831 $ 43,613 $ 106,214 $ 211,022 $ 8,209,422 ======== ============= ============ ========== ===========
See notes to financial statements. 5 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) 1. DESCRIPTION The following description of the Bell Atlantic Savings Plan for Salaried Employees (the "BASP") provides only general information on the BASP's provisions as of December 31, 1999 and 1998. Participants should refer to the Benefits Handbook, BASP plan document and prospectus for a more complete description of BASP's provisions. The BASP* was established by Bell Atlantic Corporation on January 1, 1984 to provide a convenient way for salaried employees to save on a regular and long-term basis. The BASP is a defined contribution plan covering all regular full-time and part-time salaried employees of Bell Atlantic and its participating subsidiaries. Employees are eligible to make tax-deferred or after-tax contributions to the BASP and to receive matching employer contributions, upon completion of enrollment in the BASP as soon as practicable following the date of hire. The BASP is also characterized as an employee stock ownership plan ("ESOP"). MERGER OF THE PLAN In August 1997, Bell Atlantic Corporation merged with NYNEX Corporation (the "Merger") to form the new Bell Atlantic Corporation ("Bell Atlantic"). From the time of the Merger to June 30, 1998 the Bell Atlantic Savings Plan for Bell Atlantic North Salaried Employees ("Former North Plan") and the BASP continued as separate plans with different investment funds. Beginning January 1, 1998 the plans, though remaining separate, offered the same investment funds (See below for a description of the funds). On July 1, 1998 the Former North Plan was merged into the BASP. The assignment of a new unit value was assigned to some of the new plan's investment funds. The assignment of the new unit values did not change the value of the participant's contribution in each fund or the value of the participant's total savings plan account. ALLOTMENTS AND CONTRIBUTIONS Eligible employees may authorize basic contributions of 1% to 6% (and in some participating subsidiaries up to 8%) of salary, as defined, and supplementary contributions up to an additional 10% of salary. For employees of Bell Atlantic and most of its participating subsidiaries, Bell Atlantic makes employer matching contributions in an amount equal to 83 1/3% of basic contributions. Certain participating subsidiaries make employer matching contributions ranging from 50% to 100% of basic contributions. Certain participating subsidiaries also make annual discretionary employer contributions which are based, in part, on the individual subsidiary's financial performance or other business results. Contributions are subject to applicable rules set forth in the Internal Revenue Code (the "Code") and the regulations thereunder. Employer matching contributions are invested only in the Bell Atlantic ---------- * Certain other capitalized terms used but not defined herein shall have their respective meanings as defined in the BASP Prospectus. 6 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) Shares Fund until employees reach age fifty at which point the participant may begin to diversify the matching contributions. In early December 1998 the Bell Atlantic Board of Directors approved a Career Level Contribution. This special company paid contribution for certain eligible employees is in the form of a three year annual contribution to the BASP, beginning the first quarter of 1999. The Career Level Contribution is automatically invested in the Government Money Market Fund. Participants are allowed to transfer the amount to any other Fund Options if desired. The BASP provides for 100% vesting of employer matching contributions upon attaining three years of service. A terminated employee's unvested employer matching contributions are forfeited and offset against the participating companies' obligation to make subsequent contributions to the BASP. Forfeitures were $2,043 and $901 in 1999 and 1998, respectively. LOANS The BASP includes an employee loan provision authorizing participants to borrow an amount from their vested account balances in the BASP. Loans are generally repaid by payroll deductions. The term of repayment for loans generally will not be less than six months nor more than fifteen years. Each new loan will bear interest at a rate based upon the prime rate for loans up to sixty months and the prime plus one for loans from sixty-one to one hundred eighty months as published in The Wall Street Journal. TERMINATION PRIORITIES Although it has not expressed any intent to do so, Bell Atlantic has the right under the BASP to discontinue all employer matching contributions at any time and to terminate the BASP subject to the provisions of ERISA. In the event of the BASP termination, participants would become 100% vested in their accounts. FUND OPTIONS Participants are able to invest in one or more combinations of the following funds (referred to herein individually as a "Fund" and collectively as the "Funds"): Bell Atlantic Shares Fund, Telecommunications Fund, U.S. Bond Market Index Fund, Passive U.S. Equity Index Fund, Government Money Market Fund, Income Fund, Passive International Equity Index Fund, U.S. Balanced Fund, Global Balanced Fund, Active U.S. Equity Fund, Active International Equity Fund and the U.S. Small Capitalization Fund. The ESOP and Bell Atlantic Employee Stock Ownership Plan (the "PAYSOP") component of the BASP is described below. The Bell Atlantic Shares Fund invests primarily in the common stock of Bell Atlantic. The Former North Plan's NYNEX Shares Fund investments were converted to Bell Atlantic shares as of the date of the Merger. The Former North Plan's Bell Atlantic Shares Fund was combined with the BASP Bell Atlantic Shares Fund on July 1, 1998. 7 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) The Former North Plan's Telecommunications Fund portfolio is comprised of investments in twenty-four North American telephone utility and telecommunications companies each with a minimum market value of approximately $1 billion at the time of their inclusion in the portfolio. Effective January 1, 1998, the Telecommunications Fund was no longer open to new investments. Participants who did not elect a new investment direction had their contributions automatically directed to the Passive U.S. Equity Index Fund. Also effective January 1, 1998, transfers of participant existing balances into the Telecommunications Fund were prohibited. Dividends, including stock dividends of the Telecommunications Fund, will be reinvested in the Fund. Participants will be allowed to move money out of the Fund at any time. On July 1, 1998 the Fund became part of the BASP as a result of the Merger with the Former North Plan. The Fund is a market weighted index fund and is managed by Bell Atlantic Asset Management Company ("BAAMCO"). Effective January 1, 1998, the Former North Plan's Government Obligations Fund was no longer offered as a Fund selection. Any balances in the Fund were automatically transferred to the U.S. Bond Market Index Fund along with any investment directions designated to the Government Obligations Fund. To accomplish this automatic transfer, some of the Government Obligations Fund's assets were held in shorter maturity government instruments beginning in December 1997. The U.S. Bond Market Index Fund includes all U.S. Treasury, government-sponsored, mortgaged-backed, asset-backed and investment-grade corporate bonds, with at least one year maturity and at least $100 million outstanding. The Fund may use interest rate futures and various other kinds of derivatives to adjust portfolio duration or as interest rate hedges. The Fund is managed by Barclays Global Investors, N.A. On January 1, 1998 the Former North Plan's Diversified Equity Portfolio was renamed the Passive U.S. Equity Index Fund and became the successor fund to the BASP's U.S. Equity Index Fund. Any assets in the U.S. Equity Index Fund not designated for transfer to another Fund by BASP participants by December 31, 1997 were automatically transferred to the Passive U.S. Equity Index Fund. Effective January 1, 1998 the U.S. Equity Index Fund ceased to exist. The Passive U.S Equity Index Fund invests in an equity index fund which is managed by BAAMCO. This Fund is principally a portfolio of common stocks and is structured and maintained with the objective of providing investment results which approximate the overall performance of the common stocks included in the Standard and Poors Composite Index of 500 stocks. The Government Money Market Fund invests in securities of the U.S. government or its agencies, obligations guaranteed or insured by the U.S. government and repurchase agreements that use these securities as collateral. The average maturity of the securities in the Fund generally will be thirty to sixty days, but may vary from one to ninety days. The Fund 8 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) may use interest rate futures for cash management purposes or to adjust the average duration of the portfolio. The Fund is managed by Deutsche Asset Management. On January 1, 1998 the Former North Plan's Interest Income Fund was renamed the Income Fund. Any assets in the BASP's Short-Term Fixed Income Fund not designated for transfer to another fund by BASP participants by December 31, 1997 were automatically transferred to the Income Fund. Effective January 1, 1998 the Short-Term Fixed Income Fund ceased to exist. The Income Fund invests primarily in a diversified portfolio of guaranteed investment contracts ("GICs") issued by insurance companies. Some of the assets of the Fund are also invested in pools of asset-backed securities, corporate bonds, and obligations of the U.S. government and its agencies ("Synthetic Investment Contract"). As an integral part of the purchase of each pool of these investments, a financial institution, via a wrapper contract, agrees to pay at book value for qualified distributions (e.g. participant withdrawals) and at maturity of the contract, based on the agreed upon interest rate for the relevant time period but not in the event of a default of any security in the pool. The BASP is exposed to credit risk in the event of nonperformance by the entities for which the contracts are placed. The BASP seeks to minimize credit risk by diversifying among a group of GIC issuers and other financial institutions which meet certain investment criteria established by BAAMCO. These contracts guarantee (i) a fixed rate of interest for a fixed period of time or (ii) a fixed rate of interest for an indefinite period of time. Such interest is not guaranteed by any of the Employing Companies. The Fund is managed by BAAMCO. (For further discussion of this Fund see Note 2). On January 1, 1998 the BASP's International Equity Index Fund was renamed the Passive International Equity Index Fund. The Passive International Equity Index Fund has investments that mirror the MSCI-EAFE-GDP, which is an index established by Morgan Stanley Dean Witter, comprised of approximately 1,000 companies from twenty of the largest countries outside of the United States, including Japan, Germany and the United Kingdom. The weighting of each country in the index is based upon its GDP, which is a measure of domestic economic output. The Fund is managed by Barclays Global Investors, N.A. In addition to the Passive U.S. Equity Index Fund, each of the following five Funds invest in the assets of unitized investment advisor account(s) of the Bell Atlantic Master Trust ("Master Trust"), as designated by BAAMCO: U.S. Balanced Fund, Global Balanced Fund, Active U.S. Equity Fund, Active International Equity Fund, and the U.S. Small Capitalization Fund. On January 1, 1998 the Former North Plan's U.S. Balanced Fund became available to participants in the BASP. The U.S. Balanced Fund invests primarily in domestic stocks and bonds. The fixed income portion of the Fund may invest a small portion of its assets in issues of international agencies, foreign governments, their agencies and foreign corporations. The 9 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) Fund targets approximately 60% in stocks and 40% in bonds. As of December 31, 1999, BAAMCO had selected the following unitized investment advisor account(s) of the Master Trust ("Master Trust pooled accounts") for the Fund: Barrow, Hanley, Mewhinney & Strauss, Inc., Fidelity Management Trust Company, Franklin Portfolio Associates, LLC, Gardner Lewis Asset Management, L.P., Goldman Sachs Asset Management Co., Independence Investment Associates, Inc., Miller Anderson & Sherrerd, LLP, Palisade Capital Management, LLC, Provident Investment Counsel, Inc., State Street Research and Management Company, Transamerica Investment Management, LLC and Wilshire Associates, Inc. On January 1, 1998 the Former North Plan's Global Balanced Fund became available to participants in the BASP. The Global Balanced Fund invests in the world's capital markets, primarily in equity and fixed income instruments. The Fund is diversified and has representation in a variety of countries, from those of the most mature and developed nations to those still in their developmental stages (generally referred to as emerging market countries). The Fund may invest in large or small capitalization stocks. The Global Balanced Fund typically targets 75% of its investments for the domestic market and 25% for the foreign market, and approximately 70% in stocks and 30% in bonds. Emerging markets investments are targeted at 4% of the total Fund. As of December 31, 1999, BAAMCO had selected the following Master Trust pooled accounts for the Fund: Barrow, Hanley, Mewhinney & Strauss, Inc., Capital Guardian Trust Company, Fidelity Management Trust Company, Franklin Portfolio Associates, LLC, Gardner Lewis Asset Management, L.P., Goldman Sachs Asset Management Co., Independence Investment Associates, Inc., Miller Anderson & Sherrerd, LLP, Morgan Stanley Dean Witter Investment Management, Inc., Northern Cross Investments, Ltd., Palisade Capital Management, LLC, Provident Investment Counsel, Inc., Rogge Global Partners, PLC, State Street Global Advisors, State Street Research and Management Company, Transamerica Investment Management, LLC, and Wilshire Associates, Inc. On January 1, 1998 the Former North Plan's Active U.S. Equity Fund became available to participants in the BASP. The Active U.S. Equity Fund invests primarily in domestic common stocks. As of December 31, 1999, BAAMCO had selected the following Master Trust pooled accounts for the Fund: Barrow, Hanley, Mewhinney & Strauss, Inc., Fidelity Management Trust Company, Franklin Portfolio Associates, LLC, Gardner Lewis Asset Management, L.P., Goldman Sachs Asset Management Co., Independence Investment Associates, Inc., Miller Anderson & Sherrerd, LLP, Palisade Capital Management, LLC, Provident Investment Counsel, Inc., Transamerica Investment Management, LLC, and Wilshire Associates, Inc. On January 1, 1998, the Former North Plan's Active International Equity Fund became available to participants in the BASP. The Active International Equity Fund invests in international equity markets throughout the world, generally excluding the United States. It is 10 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) well diversified and has representation in a variety of economies, from those of the most mature and developed nations to those still in their developmental stages (generally referred to as emerging market countries). The Fund may invest in large or small capitalization stocks. It targets 80% of its investments for developed countries such as Japan, Germany and the United Kingdom and 20% for emerging markets such as Brazil, Mexico and Taiwan. As of December 31, 1999, BAAMCO had selected Capital Guardian Trust Company, Morgan Stanley Dean Witter Investment Management, Inc., Northern Cross Investments, Ltd., and State Street Global Advisors as the Master Trust pooled accounts for the Fund. On January 1, 1998, the Former North Plan's U.S. Small Capitalization Fund became available to participants in the BASP. The U.S. Small Capitalization Fund invests primarily in the stocks of smaller-sized domestic companies, generally with a market capitalization that is in the smallest 15% of publicly traded stocks. As of December 31, 1999, BAAMCO had selected the following as the Master Trust pooled accounts for the Fund: Columbus Circle Investors, Gardner Lewis Asset Management, L.P., Investment Counselors of Maryland, Inc., The Boston Company Asset Management, Inc., Provident Investment Counsel, Inc., and Wilshire Associates, Inc. The Leveraged ESOP ("LESOP") is a leveraged Fund that invests primarily in Bell Atlantic shares. The LESOP component of the BASP, initially funded in 1989, is a stock bonus plan intended to qualify under Sections 401(a)(4) and 4975(e)(7) of the Code. It is used to match the employee's Basic Pre-Tax Allotments and Post-Tax Allotments. Depending on the value of Bell Atlantic shares from time to time, the LESOP may fund more or less than all of the required employer matching contributions in a given calendar year. As a result of a continuing series of additional LESOP refinancings (See Note 6), the LESOP is likely to continue to generate most of the shares required for employer matching contributions but not more than the amount required for those contributions. In the event of a shortfall, Bell Atlantic and its participating subsidiaries make additional employer matching contributions to the BASP. Any surplus is allocated in equal amounts to the BASP accounts of participants who, as of the last day of the year, are active employees of Bell Atlantic and its participating subsidiaries, and have account balances under the BASP. The employee may not withdraw or transfer funds out of the LESOP Fund except for hardship withdrawals and except for those participants over age 50 with more than one year of participation in the BASP. On July 1, 1998, the BASP's LESOP Fund and the Former North Plan's LESOP Fund were combined. Two Unreleased Shares and Loan Note Accounts (the "Unallocated Account") which are part of the LESOP Fund consist of Bell Atlantic shares that were acquired with the proceeds of two acquisition loans and have not yet been released and allocated to participating employees. (See Note 6). 11 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) The PAYSOP was established by Bell Atlantic on January 1, 1984 as an ERISA plan. The assets in the PAYSOP consists of Employing Company contributions of Bell Atlantic Corporation common shares and earnings thereon. As a result of PAYSOP amendments necessitated by the Tax Reform Act of 1986, there have been no Employing Company contributions to the PAYSOP since the 1986 plan year. Effective January 1, 1998, the PAYSOP was merged into the BASP and the Bell Atlantic Savings and Security for Associates of Bell Atlantic South (the "BASSP"). The assets of the PAYSOP were transferred to the Bell Atlantic Master Trust on January 1, 1998 and accordingly allocated to the BASP based on the participating employees' balances in the PAYSOP as of December 31, 1997. All the assets of the BASP are included in the Bell Atlantic Master Trust (See Note 2) for which Mellon Bank, N.A., is the trustee. Metropolitan Life Insurance Company (previously operating as Bankers Trust Company) was the recordkeeper for the BASP through June 30, 1998. As of July 1, 1998, the Kwasha Group of PricewaterhouseCoopers, LLP, became the recordkeeper for the merged BASP. 2. ACCOUNTING POLICIES INVESTMENTS As of January 1, 1998, the assets of Bell Atlantic's defined benefit plans and defined contribution plans were transferred to the NYNEX Master Trust. Effective January 1, 1998, the NYNEX Master Trust was renamed the Bell Atlantic Master Trust (the "Master Trust"). VALUE OF INVESTMENTS The Trustee values the investments in the Master Trust as follows: Investments in securities traded on national and foreign securities exchanges are valued by the Trustee at the last reported sale prices on the last business day of the year or, if no sales were reported on that date, at the last reported bid prices. Over-the-counter securities and government obligations are valued at the bid prices or the average of the bid and asked prices on the last business day of the year from published sources where available or, if not available, from other sources considered reliable, generally broker quotes. The value of each contract with an insurance company or other financial institution included in the Income Fund is reported at contract value in the Statements of Net Assets Available for Plan Benefits based upon the principal then invested in by the Fund plus the interest then accrued on such principal, which approximates the fair value. In accordance with Statement of Position 94-4 "Reporting of Investment Contracts held by Health and Welfare Benefit Plans 12 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) and Defined Contribution Pension Plans" and in connection with the fully benefit-responsive investment contracts, the following information is presented: i. The asset weighted crediting interest rate yielded a return of 6.1% and 6.3% for the years ended December 31, 1999 and 1998, respectively. ii. The crediting interest rates ranged from 5.06% to 14.4% at December 31, 1999 and 4.2% to 8.3% at December 31, 1998. iii. The fair value, as determined by discounting future cash flows of the underlying BASP investments, at December 31, 1999 and 1998, was approximately $1,072,497 and $1,134,165, respectively. Forward currency contracts are accounted for as contractual commitments on a trade date basis and are carried at fair value derived by the Trustee at the exchange rate prevailing on the last business day of the year. Index futures contracts are recorded as contractual commitments on a trade-date basis and are carried at fair value based on the closing index futures price prevailing on the last business day of the year. Both exchange rates and index futures prices are readily available from published sources. Temporary cash investments are stated at redemption value which approximates fair value. COMMITMENTS Commitments represents the value of the ESOP shares to be allocated to participants accounts once the scheduled corresponding loan payment is made. PURCHASES AND SALES OF INVESTMENTS Purchases and sales of investments are reflected as of the trade date. Realized gains and losses on sales of investments are determined on the basis of average cost. INVESTMENT INCOME Dividend income is recorded on the ex-dividend date. Interest earned on investments is recorded on the accrual basis. NET APPRECIATION (DEPRECIATION) OF INVESTMENTS The Statements of Changes in Net Assets Available for Benefits reflects the net appreciation (depreciation) in the fair value of the BASP's investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. DISTRIBUTIONS Distributions elected to be withdrawn from the BASP by participants are recorded when paid. 13 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) PLAN EXPENSES The BASP pays certain administrative expenses out of assets held in the Master Trust and out of interest income earned from the BASP's disbursement account, as held by the Trustee, in accordance with BASP provisions and to the extent permitted by law. Any expenses not paid by the BASP are paid by Bell Atlantic. BELL ATLANTIC'S USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires the BASP's trust asset administrator, to make significant estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. RISKS AND UNCERTAINTIES The BASP provides for various participant investment options in any combination of funds which can invest in any combination of stocks, bonds, fixed income securities, mutual funds, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the Statements of Net Assets Available for Benefits. 3. INVESTMENTS INVESTMENT IN MASTER TRUST All of the investment assets in the Master Trust are managed by BAAMCO or external investment advisors. The assets in the Master Trust are either (a) pooled between the defined benefit plans and the defined contribution plans or (b) net assets that are specific to the defined benefit plans, or (c) net assets specific to the defined contribution plans. The total fair value of the Master Trust at December 31, 1999 and 1998 was approximately $56.6 billion (of which net assets totaling approximately $21.4 billion are specific to the defined benefit plans, item (b) above, for which separate financial statements are prepared) and approximately $51.2 billion, respectively. 14 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) INVESTMENTS HELD IN POOLED ACCOUNTS The pooled investments are unitized, aggregated and reported by the Master Trust with a carrying value of $22.7 billion at December 31, 1999 and 1998, and with investment earnings of $3.9 billion and $2.2 billion for the years ended December 31, 1999 and 1998, respectively. Given that the pooled accounts include interests of the defined contribution plans and the defined benefit plans, the totals in each of the following statements do not equal the carrying value or net investment income of/from the Master Trust pooled accounts in this footnote. The total investments held in the Master Trust pooled accounts at December 31, were as follows:
Description Fair Value (Note 2) ----------- --------------------------------------- 1999 1998 ------------------ ----------------- Cash - non interest bearing $ - $ 7,587 Receivables 691,568 1,300,045 Common Stock 21,107,790 18,625,854 Bell Atlantic Corporation common shares 91,530 70,998 Preferred Stock 76,783 115,874 U.S. Government Securities 99,119 1,097,450 Corporate Debt - preferred and other 228,401 1,489,671 Real estate - 166 Temporary cash investments 586,308 619,688 Other investments* 485,553 708,470 ------------------ ----------------- 23,367,052 24,035,803 Liabilities 650,607 1,307,975 ------------------ ----------------- Total pooled net assets in the Master Trust $ 22,716,445 $ 22,727,828 ================== =================
*Other investments include foreign investments, principally foreign government debt. The BASP's interests in the Master Trust pooled accounts carrying value and investment income of the Master Trust pooled accounts are reported in each respective Fund option as the "Allocated share of Master Trust Net Assets" in the Statements of Net Assets Available 15 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) for Benefits and "Allocated share of Master Trust investment activities" in the Statements of Changes in Net Assets Available for Benefits. Investments in the Master Trust are allocated to the BASP's Fund options in accordance with their respective percentages of interest. The proportionate interests of the BASP's Fund options in the carrying value of the Master Trust pooled accounts at December 31, were as follows:
CARRYING CARRYING VALUE VALUE 1999 1999 1998 1998 --------------- ----------- ---------------- --------------- Active U.S. Equity Fund $ 144,633 0.6367% $ 148,650 0.6540% U.S. Balanced Fund 90,283 0.3974% 103,602 0.4558% Global Balanced Fund 59,761 0.2631% 59,831 0.2632% Active International Equity Fund 145,716 0.6415% 43,613 0.1919% U.S. Small Capitalization Fund 132,845 0.5848% 106,214 0.4673% Passive U.S. Equity Index Fund 2,183,531 9.6121% 1,957,945 8.6147% --------------- ---------------- Total $ 2,756,769 $ 2,419,855 =============== ================
INVESTMENTS HELD IN SPECIFIC ACCOUNTS Effective January 1, 1998, the assets of all Bell Atlantic's defined contribution plans were included in the Master Trust. The net assets specific to these plans are the Bell Atlantic Shares Fund, Telecommunications Fund, Government Money Market Fund, Income Fund, Loan Fund, the ESOP allocated account, the ESOP unallocated account, PAYSOP Fund, Passive International Equity Index Fund, and the U.S. Bond Market Index Fund. The investments held in the Master Trust specific accounts for the defined contribution plans at December 31, were as follows:
DESCRIPTION FAIR VALUE (NOTE 2) ----------- ---------------------------------------- 1999 1998 ------------------- ---------------- Receivables $ 401,820 $ 410,006 Common Stock 741,499 609,620 Bell Atlantic Corporation common shares 9,787,824 8,324,047 Temporary cash investments 174,224 139,788 Fixed income obligations - insurance contracts 1,826,236 1,973,019 Fixed income corporate obligations 168,522 239,031 ------------------- -------------- 13,100,125 11,695,511 Liabilities 578,356 642,498 ------------------- -------------- Total net assets in the specific accounts in the Master Trust $ 12,521,769 $ 11,053,013 =================== ===================
16 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) Investments in the Master Trust are allocated to the BASP's Fund options in accordance with their respective percentages of interest. The proportionate interest of the BASP, Bell Atlantic Savings and Security Plan for Associates of Bell Atlantic South (the "BASSP") and the Bell Atlantic Savings and Security Plan for Associates of Bell Atlantic North (the "NSSP") in the carrying value of the Master Trust specific accounts at December 31, 1999 were as follows:
CARRYING CARRYING CARRYING VALUE VALUE VALUE BASP PLAN % BASSP PLAN % NSSP PLAN % -------------- ---------- -------------- --------- -------------- --------- Bell Atlantic Shares Fund $ 2,755,661 40% $ 1,411,573 21% $ 2,670,119 39% Telecommunications Fund 297,567 53% -- -- 264,650 47% Government Money Market Fund 147,899 85% 19,400 11% 6,955 4% Passive International Equity Index Fund 138,330 77% 26,437 15% 14,556 8% Income Fund 1,180,551 65% 245,693 13% 400,046 22% Loan Fund 161,631 40% 82,001 22% 153,844 38% ESOP 1,632,176 76% 503,322 24% -- -- U.S. Bond Market Index Fund 148,611 88% 9,864 6% 10,072 6% PAYSOP 83,502 35% 157,309 65% -- -- -------------- -------------- -------------- Total $ 6,545,928 $ 2,455,599 $ 3,520,242 ============== ============== ==============
The following table reflects the investments that represent 5% or more of the net assets in the Master Trust as of December 31:
1999 1998 ------------- ----------- Bell Atlantic Corporation common shares $9,787,824 $8,324,047
INVESTMENT INCOME Investment income and expenses are allocated to the BASP's Fund options daily in accordance with their respective daily percentages of interest in the Master Trust's pooled accounts. Percentages of interest are based on the daily ratio of units owned by each plan's Fund options to the total units in the Master Trust pooled accounts. Investment income related to investments held in specific accounts for the defined contribution plans is allocated to each plan's Fund options daily in accordance with each plan's respective percentage of interest. 17 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) The allocated net investment income to the BASP's Fund options for the years ended December 31, 1999 and 1998 was as follows:
DIVIDENDS ON BELL ATLANTIC OTHER CORPORATION NET INCOME/ NET COMMON OTHER APPRECIATION EXPENSES INVESTMENT INTEREST SHARES DIVIDENDS (DEPRECIATION) NET INCOME --------------------------------------------------------------------------------- DECEMBER 31, 1999: ------------------ Bell Atlantic Shares Fund $ 1,984 $ - $ - $ 338,843 $ - $ 340,827 Telecommunications Fund 165 - 3,836 61,046 (18) 65,029 Government Money Market Fund 7,907 - - - - 7,907 Passive U.S. Equity Index Fund 5,033 - 23,889 365,964 (30) 394,856 Passive International Equity Index Fund 99 - - 31,781 - 31,880 Income Fund 74,575 - - 53 - 74,628 Employee Stock Ownership Plan: Allocated - - - 173,604 3 173,607 Unallocated - - - 64,061 - 64,061 U.S. Bond Market Index Fund 78 - - (1,900) - (1,822) Active U.S. Equity Fund 84 - 1,909 15,825 (1) 17,817 U.S. Balanced Fund 2,221 - 822 3,828 (1) 6,870 Global Balanced Fund 903 - 598 6,688 (19) 8,170 Active International Equity Fund 70 - 959 35,103 (93) 36,039 U.S. Small Capitalization Fund 208 - 864 30,725 - 31,797 PAYSOP 22 - 2,251 11,687 - 13,960 --------- -------------- ---------- -------------- ---------- --------------- Total $ 93,349 $ - $ 35,128 $ 1,137,308 $ (159) $ 1,265,626 ========= ============== ========== ============== ========== ===============
DIVIDENDS ON BELL ATLANTIC OTHER CORPORATION NET INCOME/ NET COMMON OTHER APPRECIATION EXPENSES INVESTMENT INTEREST SHARES DIVIDENDS (DEPRECIATION) NET INCOME --------------------------------------------------------------------------------- DECEMBER 31, 1998: ------------------ Bell Atlantic Shares Fund $ 755 $ 56,345 $ - $ 199,961 $ - $ 257,061 Telecommunications Fund 28 - 2,010 59,508 (6) 61,540 Government Money Market Fund 4,874 - - - - 4,874 Passive U.S. Equity Index Fund 2,692 - 17,066 254,664 47 274,469 Passive International Equity Index Fund 103 - - 19,054 - 19,157 Income Fund 53,094 - - - - 53,094 Employee Stock Ownership Plan: Allocated 53 16,644 - 155,804 - 172,501 Unallocated 1 - 25,894 82,919 - 108,814 U.S. Bond Market Index Fund 78 - - 9,820 - 9,898 Active U.S. Equity Fund 82 - 1,436 2,818 - 4,336 U.S. Balanced Fund 1,291 - 578 10,342 - 12,211 Global Balanced Fund 556 - 372 7,515 (7) 8,436 Active International Equity Fund 49 - 458 5,248 (35) 5,720 U.S. Small Capitalization Fund 162 - 521 (6,821) 3 (6,135) PAYSOP 49 - 2,709 8,098 - 10,856 --------- -------------- ---------- -------------- ---------- --------------- Total $ 63,867 $ 72,989 $ 51,044 $ 808,930 $ 2 $ 996,832 ========= ============== ========== ============== ========== ===============
18 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) 4. DERIVATIVE FINANCIAL INSTRUMENTS Derivative financial instruments are used in the Master Trust's pooled accounts primarily to rebalance fixed income/equity allocations, to efficiently gain exposure to a specific underlying market, and to offset the currency risk associated with foreign investments. Leveraging of the BASP's assets and speculation are prohibited as stated in the BASP plan documents. Offsetting currency positions are not permitted to exceed the level of exposure in the BASP's foreign asset base. The derivatives most commonly used by investment managers are highly liquid, exchange-traded equity and fixed income futures and over-the-counter foreign exchange forward contracts. Bell Atlantic's use of financial instruments for risk management purposes is represented by notional amounts. These notional values represent solely contractual amounts that serve as the basis or reference amounts upon which contractually stipulated calculations are based. Therefore, these amounts are intended to serve as general volume indicators only and do not represent the potential gain or loss from market or credit risks. Market risk arises from the potential for changes in the value of financial instruments resulting from fluctuations in interest rates, foreign exchange rates and prices of equity securities. Market risk is also affected by changes in volatility and liquidity in the markets in which these instruments are traded. Equity price risk arises from the possibility that equity prices will fluctuate, affecting the value of equity securities and derivative financial instruments that derive their value from a stock index, a particular stock or a defined basket of stocks. The credit risk and amount of accounting loss of the BASP's forward contracts is equal to any gains which have not been settled as of the BASP's year end. The credit risk of the BASP's futures contracts is equal to the posted margin plus any unsettled positive variation margin. The amount of accounting loss at year end is equal to any variation margin owed to the BASP. All derivative activity relating to the BASP is within the Master Trust pooled accounts. The Master Trust pooled accounts' derivative activity is allocated to the BASP in accordance with the BASP's Fund options' respective percentages of interest (see Note 3). The following disclosures regarding the notional values, fair values, average fair values and net trading gains are reported for the BASP. 19 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) The notional values and fair values of the derivative activity used for trading purposes held by the BASP at December 31, were as follows:
1999 1998 ----------- ------------ Domestic Equity Futures Contracts: Notional values $ 18,167 $ 14,235 Fair values 18,699 15,021 Forward Foreign Currency Payable Contracts: Notional values 410 354 Fair values 414 366 Forward Foreign Currency Receivable Contracts: Notional values 410 354 Fair values 397 364
The average fair values of the derivative activity used for trading purposes held by the BASP during the years ended December 31, were as follows:
1999 1998 ----------- ------------ Average Fair Values: Domestic Equity Futures Contracts $ 48,626 $ 10,444 Forward Foreign Currency Payable Contracts 432 481 Forward Foreign Currency Receivable Contracts 422 483
The BASP was allocated $3,573 and $4,069 in 1999 and 1998, respectively, of net trading losses from futures contracts. Net trading losses allocated to the BASP from foreign exchange contracts totaled $3,034 and $16,521 in 1999 and 1998. 5. TAX DETERMINATION On December 8, 1997, the Internal Revenue Service issued a ruling that the BASP meets the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code") and is exempt from Federal income taxes under Section 501(a) of the Code and that the ESOP portion of the BASP qualifies as an employee stock ownership plan within the meaning of Section 4975(e)(7) of the Code. The BASP has been amended since receiving the determination letter. However, the BASP's administrator and the BASP's tax counsel believe that the BASP is designed and is currently being operated in compliance with the applicable requirements of the Code. 20 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) 6. INDEBTEDNESS The BASP has two LESOP loans as a result of the merger of the Former North Plan into the BASP on July 1, 1998. BASP LEVERAGED ESOP NOTES PAYABLE The LESOP notes payable originally bore an 8.17% interest rate subject to adjustment due to changes in the Federal income tax rate or changes in the Federal law regarding the alternative minimum tax. Portions of the LESOP notes were refinanced. In 1996, $16.7M was refinanced at 7.40%. In 1997, $20M was refinanced at 6.88%; and in 1998, $33M at 5.5%. In January 1999, $18M was refinanced at 4.64%, and in July 1999, $22M at 6.12%. Interest and principal payments are guaranteed by Bell Atlantic and are due on January 1 and July 1 of each year; principal payments began July 1, 1990. The following table displays the principal maturities under the notes with the final payment due July 1, 2005.
2000 $ 41,626 2001 17,295 2002 18,352 2003 19,475 2004 20,667 Thereafter 21,935 ------------- $ 139,350 =============
The fair value of the LESOP notes payable is based on quoted market prices for the same or similar instruments. As of December 31, 1999 and 1998, the notes payable carrying amount was $139,350 and $187,792, and the estimated fair value was $120,563 and $163,595, respectively. FORMER NORTH PLAN ESOP NOTES PAYABLE The LESOP notes payable bears a 9.778% interest rate. The interest and principal payments are due on February 1 of each year. Interest payments began September 1, 1990 and principal payments began June 1, 1991. The following table displays maturities under the notes with final payment due February 1, 2015:
2000 $ 17,949 2001 18,926 2002 19,854 2003 20,742 2004 21,601 Thereafter 267,663 ------------- $ 366,735 =============
21 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) The $17,949 due on February 1, 2000, was prepaid by the Master Trust in 1999. The fair value of the LESOP notes payable is based on quoted market prices for the same or similar instruments. As of December 31, the carrying amount and the estimated fair value of the notes payable were:
1999 1999 1998 1998 Carrying Fair Carrying Fair Amount Value Amount Value ---------- ------------- -------------- --------------- BASP $366,735 $231,557 $383,647 $239,298
7. RELATED PARTY TRANSACTIONS BAAMCO, a wholly owned subsidiary of Bell Atlantic, is the investment advisor for the Telecommunications Fund, Passive U.S. Equity Index Fund, and Income Fund and therefore qualifies as a party-in-interest. BAAMCO received no compensation from the BASP for the investment advisory services rendered to the BASP. 8. CONCENTRATIONS OF CREDIT RISK Financial instruments that potentially subject the BASP to concentrations of credit risk consist principally of investment contracts with insurance companies and other financial institutions. The BASP places its investment contracts with high-credit quality insurance companies and financial institutions in order to limit credit exposure. The BASP regularly monitors the financial stability of the financial institutions and insurance companies. 9. PLAN AMENDMENTS Effective December 1, 1999, the BASP was amended to allow certain inactive participants to elect a direct Rollover into the BASP of any or all of a lump sum or partial lump sum distribution from any cash balance plan maintained by any Bell Atlantic Company. Effective July 1, 1998, the BASP was amended for conforming changes in certain administrative rules. Effective after the close of business on June 30, 1998, the BASP was amended to allow the merger of the Former North Plan and trust with and into the plan and trust for BASP. 22 BELL ATLANTIC SAVINGS PLAN FOR SALARIED EMPLOYEES NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN THOUSANDS) Effective January 1, 1998, the BASP was amended to merge the portion of the PAYSOP which contains accounts for salaried employees into the BASP. Effective January 1, 1998 the BASP was amended to offer new investment funds (See Note 1) 10. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The Department of Labor requires that amounts allocated to accounts of persons who have elected to withdraw from the BASP but have not yet been paid be reported as liabilities on the plan's 5500. In accordance with the relevant American Institute of Certified Public Accountants audit and accounting guide, benefits should not be accrued as liabilities of the plan. The following is a reconciliation of net assets available for benefits per the financial statements to the amounts reported in Form 5500:
1999 1998 -------------- --------------- Net assets available for benefits presented in the Statement of Net Assets Available for Benefits $9,302,697 $8,209,422 Less: Benefit claims payable presented in the Statement of Net Assets Available for Benefits in Form 5500 4,002 3,049 -------------- --------------- Net assets available for benefits presented in Statement of Net Assets Available for Benefits in Form 5500 $9,298,695 $8,206,373 ============== ===============
The following is a reconciliation of benefits paid to participants per the financial statements to the amounts reported in Form 5500:
1999 1998 -------------- --------------- Aggregate distributions to participants as presented in the Statement of changes in Net Assets Available for Benefits $ 644,911 $ 456,341 Add: Current year benefits claims payable presented in the Statement of Net Assets Available for Benefits in Form 5500 4,002 3,049 Less: Prior year benefits claims payable presented in the Statement of Net Assets Available for Benefits in Form 5500 3,049 2,565 -------------- --------------- Benefit payments and payments to provide benefits directly to participants and beneficiaries presented in the Statement of Changes in Net Assets Available for Benefits in Form 5500 $ 645,864 $ 456,825 ============== ===============
23 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Bell Atlantic Corporate Employees' Benefits Committee has duly caused this annual report to be signed by the undersigned thereunto duly authorized. Bell Atlantic Savings Plan for Salaried Employees By: /s/ Thomas J. Edwards ------------------------------------- Thomas J. Edwards (Acting Chairman, Bell Atlantic Corporate Employees' Benefit Committee) Date: June 19, 2000 24