4th Qrt & Finals - Part 2
GTE Corporation
27 January 2000
PART 2
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
In Millions, Except Per-Share Amounts)
Unaudited
Fourth Quarter
--------------------- Percent
CONSOLIDATED OPERATIONS 1999 1998 Change
Financial data (1)
------------------
Revenues and sales $ 6,741 $ 5,991 12.5
Operating income $ 1,725 $ 1,482 16.4
Depreciation and
amortization 1,011 873 15.8
--------------------------------
Operating cash flow $ 2,736 $ 2,355 16.2
================================
Operating cash flow
margin 40.6 % 39.3 % -
Capital expenditures $ 1,636 $ 1,598 2.4
Operating statistics (2)
------------------------
Per share data:
Dividends .47 .47 -
(1) Financial data is shown on an adjusted basis, as defined
in the Notes to Consolidated Adjusted Statements of Income.
(2) Operating statistics are shown on a reported basis.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions, Except Per-Share Amounts)
Unaudited
Twelve Months Ended
December 31,
------------------- Percent
CONSOLIDATED OPERATIONS 1999 1998 Change
Financial data (1)
------------------
Revenues and sales $ 25,336 $ 23,299 8.7
Operating income $ 6,220 $ 5,464 13.8
Depreciation and
amortization 3,757 3,589 4.7
-------------------------------
Operating cash flow $ 9,977 $ 9,053 10.2
===============================
Operating cash flow
margin 39.4 % 38.9 % -
Capital expenditures $ 4,940 $ 5,370 (8.0)
Operating statistics (2)
------------------------
Return on equity (3) 40.9 % 27.3 % -
Return on investment (3) 16.2 % 10.9 % -
Debt ratio 66.1 % 64.6 % -
Per share data:
Book value $ 11.19 $ 9.06 23.5
Dividends 1.88 1.88 -
Common shares outstanding at
end of period (thousands) 967,408 967,997 (.1)
(1) Financial data is shown on an adjusted basis, as defined
in the Notes to Consolidated Adjusted Statements of Income.
(2) Operating statistics are shown on a reported basis.
(3) Excluding special items and extraordinary charges, return
on equity would have been 35.6% and 34.7%, while return on
investment would have been 14.3% and 14.2% in 1999 and 1998,
respectively.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions, Except Operating Statistics)
Unaudited
Fourth Quarter
--------------- Percent
NATIONAL OPERATIONS 1999 1998 Change
Network Services
Financial data
---------------
Revenues and sales
Local services $ 1,514 $ 1,466 3.3
Network access services
Interstate 915 850 7.6
Intrastate 472 505 (6.5)
Toll services 156 197 (20.8)
Directory services and
other 1,055 931 13.3
----------------------------
Total revenues 4,112 3,949 4.1
Intersegment revenues (158) (92) -
----------------------------
Total external revenues $ 3,954 $ 3,857 2.5
============================
Operating income $ 1,630 $ 1,253 30.1
Depreciation and
amortization 646 614 5.2
----------------------------
Operating cash flow $ 2,276 $ 1,867 21.9
============================
Operating cash flow margin 55.4 % 47.3 % -
Operating income margin 39.6 % 31.7 % -
Capital expenditures $ 766 $ 854 (10.3)
Data revenues (included above) 335 274 22.3
Operating statistics
-----------------------
Access minutes of use (millions):
Interstate 13,740 13,190 4.2
Intrastate 10,007 8,829 13.3
---------------------------
Total access minutes of use 23,747 22,019 7.8
===========================
Toll minutes - intraLATA
(millions) 1,217 1,388 (12.3)
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions, Except Operating Statistics)
Unaudited
Twelve Months Ended
December 31,
-------------------- Percent
NATIONAL OPERATIONS 1999 1998 Change
Network Services
Financial data
---------------
Revenues and sales
Local services $ 5,976 $ 5,814 2.8
Network access services
Interstate 3,521 3,334 5.6
Intrastate 1,990 1,982 .4
Toll services 655 859 (23.7)
Directory services and
other 3,432 3,259 5.3
------------------------------
Total revenues 15,574 15,248 2.1
Intersegment revenues (473) (305) -
------------------------------
Total external revenues $ 15,101 $ 14,943 1.1
==============================
Operating income $ 5,701 $ 4,817 18.4
Special charges 113 171 -
Depreciation and
amortization 2,564 2,591 (1.0)
------------------------------
Operating cash flow $ 8,378 $ 7,579 10.5
==============================
Operating cash flow margin 53.8 % 49.7 % -
Operating income margin 37.3 % 32.7 % -
Capital expenditures $ 2,843 $ 3,362 (15.4)
Data revenues
(included above) 1,215 947 28.3
Operating statistics
Access minutes of use (millions):
Interstate 54,371 52,002 4.6
Intrastate 39,724 35,118 13.1
------------------------------
Total access minutes
of use 94,095 87,120 8.0
==============================
Toll minutes - intraLATA
(millions) 5,098 6,148 (17.1)
Access lines (thousands):
Switched
Residential 13,996 13,561 3.2
Business 6,065 5,661 7.1
------------------------------
Total switched 20,061 19,222 4.4
Special (1) 6,007 4,403 36.4
------------------------------
Total access lines 26,068 23,625 10.3
==============================
Resale lines (2) 398 146 -
ISDN lines: (3)
Basic rate 179 162 10.5
Primary rate 280 174 60.9
------------------------------
Total ISDN lines 459 336 36.6
==============================
(1) Special access lines for 1998 have been restated to be
consistent with 1999 reporting.
(2) Includes lines resold to GTE's CLEC of 253,000 in 1999
and 61,000 in 1998.
(3) Lines have been adjusted to reflect Voice Grade
Equivalents. VGEs used in the calculation are: one Basic Rate
ISDN = 2.25 lines and one Primary Rate ISDN = 24 lines in the
above table.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions, Except Operating Statistics)
Unaudited
Fourth Quarter
----------------- Percent
NATIONAL OPERATIONS
(continued) 1999 1998 Change
Wireless Products and Services(1)
Financial data
----------------
Revenues and sales
Service revenues $ 970 $ 681 42.4
Equipment sales and other 144 96 50.0
-----------------------------
Total revenues(2) $ 1,114 $ 777 43.4
=============================
Operating income $ 93 $ 138 (32.6)
Depreciation and
amortization(3) 173 107 61.7
-----------------------------
Operating cash flow $ 266 $ 245 8.6
=============================
Operating cash flow
margin(4) 28.4 % 34.3 % -
Capital expenditures $ 256 $ 186 37.6
Operating statistics(5)
-----------------------
Average revenue per user
per month $ 43 $ 48 (10.4)
Cash operating expense per
customer per month 25 31 (19.4)
(1) 1999 results include the acquisition of the Ameritech
wireless properties. Selected results for the fourth
quarter of 1999, excluding the acquisition of the Ameritech
wireless properties,are as follows:
Fourth Quarter Percent
1999 Change
-------------- -------
Operating cash flow margin 26.7% -
Capital expenditures $ 232 24.7
Average revenue per user
per month 47 (2.1)
Cash operating expense per customer
per month 27 (12.9)
(2) In addition to the acquisition of the Ameritech wireless
properties, 1999 revenues include cellular incollect
revenues. Growth in total revenues, normalized for these
items, would have been 11.0% for the fourth quarter.
(3) Includes goodwill amortization of $42 million for the
fourth quarter of 1999 related to the Ameritech wireless
properties acquisition.
(4) Cellular incollect revenues have been excluded from
operating cash flow margin calculations.
(5) Operating statistics, except for subscribers and adjusted
POPS, represent results of domestic cellular operations.
Cellular incollect revenues have been excluded from average
revenue per user per month. Cellular incollect costs have
been excluded from cash operating expense per customer per
month.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions, Except Operating Statistics)
Unaudited
Twelve Months Ended
December 31,
--------------------
Percent
NATIONAL OPERATIONS (continued) 1999 1998 Change
Wireless Products and Services(1)
Financial data
---------------
Revenues and sales
Service revenues $ 3,276 $ 2,687 21.9
Equipment sales and other 469 383 22.5
------------------------------
Total revenues(2) $ 3,745 $ 3,070 22.0
==============================
Operating income $ 537 $ 578 (7.1)
Special charges 24 91 -
Depreciation and
amortization(3) 515 435 18.4
------------------------------
Operating cash flow $ 1,076 $ 1,104 (2.5)
==============================
Operating cash flow
margin(4) 33.5 % 38.8 % -
Capital expenditures $ 549 $ 461 19.1
Operating statistics(5)
-----------------------
Average revenue per user
per month $ 46 $ 49 (6.1)
Cash operating expense per
customer per month 26 29 (10.3)
Wireless subscribers
(thousands) 7,146 4,817 48.3
Adjusted POPs (millions) 72.5 61.4 18.1
End of period penetration 11.6 % 9.7 % -
(1) 1999 results include the acquisition of the Ameritech
wireless properties. Selected results for 1999, excluding the
acquisition of the Ameritech wireless properties, are as
follows:
Year-to-date Percent
1999 Change
-------------- -------
Operating cash flow margin 33.3% -
Capital expenditures $ 525 13.9
Average revenue per user
per month 47 (4.1)
Cash operating expense per customer
per month 26 (10.3)
Wireless subscribers
(thousands) 5,414 12.4
Adjusted POPs (millions) 61.9 .8
End of period penetration 10.7% -
(2) In addition to the acquisition of the Ameritech wireless
properties, 1999 revenues include cellular incollect revenues.
Growth in total revenues, normalized for these items, would
have been 6.6% for the year-to-date period.
(3) Includes goodwill amortization of $42 million for 1999
related to the Ameritech wireless properties acquisition.
(4) Cellular incollect revenues have been excluded from
operating cash flow margin calculations.
(5) Operating statistics, except for subscribers and adjusted
POPS, represent results of domestic cellular operations.
Cellular incollect revenues have been excluded from average
revenue per user per month. Cellular incollect costs have
been excluded from cash operating expense per customer per
month.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
In Millions)
Unaudited
Fourth Quarter
----------------- Percent
NATIONAL OPERATIONS (continued) 1999 1998 Change
Internetworking (1)
Financial data
---------------
Revenues and sales $ 301 $ 165 82.4
Intersegment revenues (20) (10) -
-----------------------------
Total external revenues $ 281 $ 155 81.3
=============================
Operating loss $ (157) $ (96) (63.5)
Depreciation and
amortization 56 34 64.7
-----------------------------
Operating cash flow $ (101) $ (62) (62.9)
=============================
Capital expenditures $ 270 $ 248 8.9
Other National Operations (1)
Revenues and sales
Communications $ 431 $ 321 34.3
Technology and Systems (1) 40 38 5.3
Other, including
eliminations (2) 237 317 (25.2)
-----------------------------
Total revenues $ 708 $ 676 4.7
=============================
Total National Revenues (1) $ 6,235 $ 5,567 12.0
Total National Operating Income
(1)(3) $ 1,562 $ 1,344 16.2
(1) A component of Internetworking, BBN Technologies, has
been reclassified to Other National Operations. Related
fourth quarter revenues of $53 million and $54 million in 1999
and 1998, respectively, as well as other prior period amounts,
have been reclassified to conform to the 1999 presentation.
For comparative purposes, 1998 results for Technology and
Systems and Total National Operations are shown on an adjusted
basis. See Note (2) to Consolidated Adjusted Statements of
Income.
(2) Includes elimination of revenues representing
transactions between units included in GTE's National
Operations.
(3) Fourth quarter 1999 results exclude the net pretax gain
primarily related to the sale of GTE Information Systems, LLC.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions)
Unaudited
Twelve Months Ended
December 31,
------------------- Percent
NATIONAL OPERATIONS (continued) 1999 1998 Change
Internetworking (1)
Financial data
---------------
Revenues and sales $ 1,036 $ 579 78.9
Intersegment revenues (69) (36) -
-----------------------------
Total external revenues $ 967 $ 543 78.1
=============================
Operating loss $ (552) $ (485) (13.8)
Depreciation and
amortization 191 117 63.2
-----------------------------
Operating cash flow $ (361) $ (368) 1.9
=============================
Capital expenditures $ 746 $ 567 31.6
Other National Operations (1)
Revenues and sales
Communications $ 1,513 $ 1,063 42.3
Technology and Systems (1) 1,063 981 8.4
Other, including
eliminations (2) 685 885 (22.6)
-----------------------------
Total revenues $ 3,261 $ 2,929 11.3
=============================
Total National Revenues (1) $23,616 $21,826 8.2
Total National Operating Income
(1)(3) $ 5,559 $ 5,106 8.9
(1) A component of Internetworking, BBN Technologies, has
been reclassified to Other National Operations. Related year-
to-date revenues of $201 million and $205 million in 1999 and
1998, respectively, as well as other prior period amounts,
have been reclassified to conform to the 1999 presentation.
For comparative purposes, 1998 results for Technology and
Systems and Total National Operations are shown on an adjusted
basis. See Note (2) to Consolidated Adjusted Statements of
Income.
(2) Includes elimination of revenues representing
transactions between units included in GTE's National
Operations.
(3) Fourth quarter 1999 results exclude the net pretax gain
primarily related to the sale of GTE Information Systems, LLC.
Year-to-date results exclude this net gain, as well as the net
pretax gain of $705 million primarily related to the sale of
Government Systems that was partially offset by a special
charge related to the impairment of assets associated with new
product development recorded in the third quarter of 1999, and
the special charges of $179 million and $659 million recorded
during special charges of of 1999 and 1998, respectively.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions)
Unaudited
Fourth Quarter 1999
---------------------------------
INTERNATIONAL OPERATIONS Reported Adjustments Adjusted
Financial data
--------------
Revenues and sales
Local services $ 105 $ - $ 105
Toll services 73 - 73
Wireless services 131 - 131
Directory services
and other 224 - 224
---------------------------------
Total revenues $ 533 $ - $ 533
=================================
Operating income $ 122 $ - $ 122
Depreciation and
amortization 68 - 68
---------------------------------
Operating cash flow $ 190 $ - $ 190
=================================
Operating cash flow
margin 35.6 % - 35.6 %
Equity income $ 90 $ - $ 90
Net income 152 - 152
Capital expenditures 179 - 179
Proportionate revenues (1) 1,068 - 1,068
(1) Results shown with proportional adjustment for GTE's
ownership interest.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions)
Unaudited
Fourth Quarter 1998
---------------------------------
INTERNATIONAL OPERATIONS Reported Adjustments(1) Adjusted
Financial data
----------------
Revenues and sales
Local services $ 304 $ (232) $ 72
Toll services 221 (143) 78
Wireless services 195 (52) 143
Directory services and
other 229 (107) 122
---------------------------------
Total revenues $ 949 $ (534) $ 415
=================================
Operating income $ 236 $ (136) $ 100
Depreciation and
amortization 132 (73) 59
---------------------------------
Operating cash flow $ 368 $ (209) $ 159
=================================
Operating cash flow margin 38.8 % - 38.3 %
Equity income $ 42 $ 32 $ 74
Net income 133 - 133
Capital expenditures 201 (53) 148
Proportionate revenues (2) 779 - 779
(1) Represents adjustments to reflect the deconsolidation of
BC TELECOM, consistent with 1999 reporting. See Note (2) to
Consolidated Adjusted Statements of Income.
(2) Results shown with proportional adjustment for GTE's
ownership interest.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions)
Unaudited
Fourth Quarter Adjusted
----------------------- Adjusted
INTERNATIONAL OPERATIONS 1999 1998 % Change
Financial data
----------------
Revenues and sales
Local services $ 105 $ 72 45.8
Toll services 73 78 (6.4)
Wireless services 131 143 (8.4)
Directory services and
other 224 122 83.6
--------------------------------
Total revenues $ 533 $ 415 28.4
================================
Operating income $ 122 $ 100 22.0
Depreciation and
amortization 68 59 15.3
--------------------------------
Operating cash flow $ 190 $ 159 19.5
================================
Operating cash flow margin 35.6 % 38.3 % -
Equity income $ 90 $ 74 21.6
Net income 152 133 14.3
Capital expenditures 179 148 20.9
Proportionate revenues (1) 1,068 779 37.1
(1) Results shown with proportional adjustment for GTE's
ownership interest. GTE's ownership interest in CTI Holdings
was 58% in fourth quarter 1999 compared with 48.1% in fourth
quarter 1998. Also, GTE completed its purchase of a 40%
interest in the Puerto Rico Telephone Company in March 1999.
Normalizing for these changes in ownership interest, fourth
quarter 1999 proportionate revenue growth would have been
16.4%.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions, Except Operating Statistics)
Unaudited
Twelve Months
Ended December 31, 1999
------------------------------
INTERNATIONAL OPERATIONS
(continued) Reported Adjustments(1) Adjusted
Financial data
----------------
Revenues and sales
Local services $ 368 $ - $ 368
Toll services 291 - 291
Wireless services 548 - 548
Directory services
and other 647 - 647
-------------------------------
Total revenues $ 1,854 $ - $1,854
===============================
Operating income $ 910 $ (513) $ 397
Special items (513) 513 -
Depreciation and
amortization 245 - 245
-------------------------------
Operating cash flow $ 642 $ - $ 642
===============================
Operating cash flow margin 34.6 % - 34.6 %
Equity income $ 324 $ - $ 324
Net income (loss) 859 (308) 551
Capital expenditures 380 - 380
Proportionate revenues (2) 3,814 - 3,814
(1) Represents adjustments to exclude the gain of $513 million
pretax ($308 million after-tax) on the merger of BC TELECOM
and TELUS.
(2) Results shown with proportional adjustment for GTE's
ownership interest.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions, Except Operating Statistics)
Unaudited
Twelve Months
Ended December 31, 1998
--------------------------------
INTERNATIONAL OPERATIONS
(continued) Reported Adjustments(1) Adjusted
Financial data
----------------
Revenues and sales
Local services $1,219 $ (925) $ 294
Toll services 907 (595) 312
Wireless services 422 120 542
Directory services
and other 786 (382) 404
--------------------------------
Total revenues $3,334 $(1,782) $1,552
================================
Operating income $ 834 $ (539) $ 295
Special items 38 (38) -
Depreciation and
amortization 459 (229) 230
--------------------------------
Operating cash flow $1,331 $ (806) $ 525
================================
Operating cash flow
margin 39.9 % - 33.8 %
Equity income $ 110 $ 153 $ 263
Net income 103 338 441
Capital expenditures 657 (230) 427
Proportionate revenues (2) 2,917 - 2,917
(1) Represents adjustments to reflect the deconsolidation of
BC TELECOM and the consolidation of CTI, consistent with 1999
reporting. Also includes adjustments to exclude pretax
special charges of $38 million primarily related to the write-
off of impaired assets in Latin America and extraordinary
charges of $300 million after-tax, related to the
discontinuation of SFAS No. 71 by GTE's Canadian operations.
See Notes to Consolidated Adjusted Statements of Income.
(2) Results shown with proportional adjustment for GTE's
ownership interest.
GTE CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND OPERATING STATISTICS
(In Millions, Except Operating Statistics)
Unaudited
Adjusted Twelve
Months Ended December 31,
-------------------------
Adjusted
INTERNATIONAL OPERATIONS
(continued) 1999 1998 % Change
Financial data
----------------
Revenues and sales
Local services $ 368 $ 294 25.2
Toll services 291 312 (6.7)
Wireless services 548 542 1.1
Directory services and
other 647 404 60.1
---------------------------------
Total revenues $ 1,854 $ 1,552 19.5
=================================
Operating income $ 397 $ 295 34.6
Special items - - -
Depreciation and
amortization 245 230 6.5
---------------------------------
Operating cash flow $ 642 $ 525 22.3
=================================
Operating cash flow margin 34.6 % 33.8 % -
Equity income $ 324 $ 263 23.2
Net income 551 441 24.9
Capital expenditures 380 427 (11.0)
Proportionate revenues (1) 3,814 2,917 30.8
Operating statistics (thousands) (2)
-------------------------------------
December 31,
------------------- Percent
1999 1998 Change
------------------------------
Access lines at 100%:
Consolidated subsidiaries 1,027 997 3.0
Unconsolidated subsidiaries 8,247 5,124 60.9
------------------------------
Total 9,274 6,121 51.5
==============================
Proportionate access lines:
Consolidated subsidiaries 877 850 3.2
Unconsolidated subsidiaries 2,365 1,952 21.2
------------------------------
Total 3,242 2,802 15.7
==============================
Wireless customers at 100%:
Consolidated subsidiaries 1,093 723 51.2
Unconsolidated subsidiaries 5,634 2,027 177.9
------------------------------
Total 6,727 2,750 144.6
==============================
Proportionate wireless customers:
Consolidated subsidiaries 735 402 82.8
Unconsolidated subsidiaries 1,134 515 120.2
------------------------------
Total 1,869 917 103.8
==============================
Adjusted POPs (millions): (3)
Consolidated subsidiaries 24.3 15.0 62.0
Unconsolidated subsidiaries 10.5 8.4 25.0
------------------------------
Total 34.8 23.4 48.7
==============================
(1) Results shown with proportional adjustment for GTE's
ownership interest. GTE's ownership interest in CTI Holdings
was 58% during 1999 compared with 48.1% in the fourth quarter
of 1998. Also, GTE completed its purchase of a 40% interest in
the Puerto Rico Telephone Company in March 1999. Normalizing
for these changes in ownership interest, 1999 proportionate
revenue growth would have been 11.3%.
(2) Operating statistics reflect reclassifications for the
deconsolidation of BC TELECOM, consistent with 1999 reporting.
(3) Represents population covered times GTE's ownership
interest.
GTE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (1)
(In Millions)
Unaudited
December 31, December 31,
1999 1998
--------------------------
ASSETS
Current assets
Cash and cash equivalents $ 936 $ 467
Receivables, less allowances
of $551 and $395 5,058 4,785
Inventories and supplies 702 668
Net assets held for sale (2) 1,802 274
Other 945 587
--------------------------
Total current assets 9,443 6,781
--------------------------
Property, plant and equipment,
net (2) 23,233 24,866
Prepaid pension costs 6,073 4,927
Franchises, goodwill and other
intangibles 6,492 3,144
Investments in unconsolidated
companies 3,932 2,210
Other assets 1,659 1,687
--------------------------
Total assets $ 50,832 $ 43,615
==========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term obligations, including
current maturities $ 9,608 $ 4,148
Accounts payable and accrued
expenses 4,410 4,138
Taxes payable and other 2,317 2,069
--------------------------
Total current liabilities 16,335 10,355
--------------------------
Long-term debt 13,957 15,418
Employee benefit plans 4,418 4,404
Deferred income taxes 3,406 1,948
Minority interests in equity of
subsidiaries 1,266 1,984
Other liabilities 623 740
--------------------------
Total liabilities 40,005 34,849
--------------------------
Shareholders' equity
Common stock 50 50
Additional paid-in capital 8,680 7,884
Retained earnings 4,953 2,740
Accumulated other comprehensive
loss (376) (375)
Guaranteed ESOP obligations (453) (509)
Treasury stock (2,027) (1,024)
--------------------------
Total shareholders' equity 10,827 8,766
--------------------------
Total liabilities and shareholders'
equity $ 50,832 $ 43,615
==========================
(1) Results are shown on a reported basis.
At December 31, 1998, GTE had a 50.8% ownership interest in
BC TELECOM. On January 31, 1999, BC TELECOM and TELUS
Corporation merged to form a public company called TELUS.
GTE's ownership interest in the merged company, TELUS, is
26.7% and, as such, during the first quarter of 1999, GTE
changed the accounting for its investment from full
consolidation to the equity method. Certain decreases in
the assets and liabilities from December 31, 1998 are
primarily driven by the impacts of this transaction.
(2) At December 31, 1998 the amount reflects net assets held
for sale associated with GTE Government Systems and Airfone.
At December 31, 1998, the net book value of the approximately
1.6 million access lines was reflected in 'Property, plant
and equipment, net.' Based on the signing of definitive
agreements in 1999, the net book value of the access lines
has been reclassified to 'Net assets held for sale'. At
December 31, 1999 the amount reflects net assets
held for sale associated with GTE Airfone and the 1.6
million access lines.
GTE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (1)
(In Millions)
Unaudited
Twelve Months Ended December 31,
------------------------
1999 1998
------------------------
OPERATIONS
Income before extraordinary
charges $ 4,063 $ 2,492
Adjustments to reconcile income before
extraordinary charges to net cash from
operations:
Depreciation and amortization 3,757 3,820
Special items (1,116) 755
Employee retirement benefits (1,272) (728)
Deferred income taxes 1,217 471
Provision for uncollectible
accounts 597 470
Equity in income of unconsolidated
companies (432) (240)
Change in current assets and current
liabilities, excluding the effects of
acquisitions and dispositions (626) (1,053)
Other - net 131 (97)
------------------------
Net cash from operations 6,319 5,890
------------------------
INVESTING
Capital expenditures (4,940) (5,609)
Acquisitions and investments (3,813) (121)
Proceeds from sales of assets 1,201 209
Other - net (197) 13
------------------------
Net cash used in investing (7,749) (5,508)
------------------------
FINANCING
Common stock issued 851 447
Purchase of treasury stock (1,314) -
Long-term debt issued 4,637 3,934
Long-term debt and preferred
securities retired (1,931) (1,988)
Dividends paid (1,828) (1,807)
Increase (decrease) in short-term
obligations, excluding
current maturities 1,521 (978)
Other - net (37) (74)
------------------------
Net cash from (used in) financing 1,899 (466)
------------------------
Increase (decrease) in cash and cash
equivalents 469 (84)
Cash and cash equivalents:
Beginning of period 467 551
------------------------
End of period $ 936 $ 467
========================
(1) Results are shown on a reported basis.
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