Bell Atlantic Corp. said yesterday that it would take a one-time charge of $1.55 billion to comply with a new accounting standard, resulting in a loss of about $95 million last year.
"We are taking this opportunity to put this past obligation behind us and avoid its impact on future financial results," Bell Atlantic Vice President and Chief Financial Officer William O. Albertini said.
Bell Atlantic, the parent company of Chesapeake & Potomac Telephone Co., is one of a growing number of companies that has posted its liabilities from retiree health and life insurance benefits as required under the new Financial Accounting Standard (FAS) No. 106.
The rule requires companies to start deducting from their net incomes the cost of promised retirement benefits for current and retired employees. Currently, many companies charge against profits only as they pay out the benefits.
Without the one-time charge, which amounts to a loss of 15 cents a share, Bell Atlantic would have posted a profit of about $1.45 billion for 1991, or $3.65 per share, said Mike Balhoff, a telecommunications analyst with Baltimore-based Legg Mason Wood Walker Inc.
Mr. Balhoff said the charge had been anticipated and would therefore have no discernible impact on Bell Atlantic's stock price or long-term financial health.
Wall Street seemed to agree. Bell Atlantic's stock closed yesterday unchanged at $47.25.
The charge is retroactive to Jan. 1, 1991. Bell Atlantic said it plans to restate its results for the first three quarters of 1991 as a result of the charge.
FAS 106 doesn't take effect until 1993, but many companies have chosen to adopt the new standard sooner rather than later.
For instance, Chrysler Corp. said it would record a charge of between $4 billion and $6 billion, General Motors Corp. will take a $16 billion to $24 billion charge, and AT&T will have a $7.5 billion charge.