<PAGE>   1
===============================================================================

                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                   FORM 10-Q


          [X] Quarterly Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

                 For the quarterly period ended: JUNE 30, 1999

                                       or

          [ ] Transition Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

               For the transition period from _______ to _______


                         Commission File Number 1-3090


                            GTE FLORIDA INCORPORATED
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


<TABLE>
<S>                                                  <C>
                   FLORIDA                                        59-0397520
       (STATE OR OTHER JURISDICTION OF              (I.R.S. EMPLOYER IDENTIFICATION NO.)
        INCORPORATION OR ORGANIZATION)

1255 Corporate Drive, SVC04C08, Irving, Texas                       75038
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                       (ZIP CODE)
</TABLE>

        Registrant's telephone number, including area code 972-507-5000



             (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                                            YES  [X]    NO  [ ]

The Company had 23,400,000 shares of $25 par value common stock outstanding at
July 31, 1999. The Company's common stock is 100% owned by GTE Corporation.


===============================================================================


<PAGE>   2




PART I.  FINANCIAL INFORMATION


Item 1.  Financial Statements


                   GTE FLORIDA INCORPORATED AND SUBSIDIARIES
            Condensed Consolidated Statements of Income (Unaudited)


<TABLE>
<CAPTION>
                                                     Three Months Ended                Six Months Ended
                                                          June 30,                         June 30,
                                                 --------------------------       --------------------------
                                                    1999            1998             1999            1998
                                                 ----------      ----------       ----------      ----------
                                                                     (Dollars in Millions)
<S>                                              <C>             <C>              <C>             <C>
 REVENUES AND SALES
      Local services                             $    186.3      $    183.2       $    371.3      $    364.1
      Network access services                         151.9           134.5            301.7           252.5
      Other services and sales                        106.0            99.6            168.0           162.3
                                                 ----------      ----------       ----------      ----------

         Total revenues and sales                     444.2           417.3            841.0           778.9
                                                 ----------      ----------       ----------      ----------

 OPERATING COSTS AND EXPENSES
      Cost of services and sales                      161.6           160.3            312.9           310.0
      Selling, general and administrative              77.2            62.3            152.8           126.9
      Depreciation and amortization                    87.6            84.2            183.3           180.0
                                                 ----------      ----------       ----------      ----------

         Total operating costs and expenses           326.4           306.8            649.0           616.9
                                                 ----------      ----------       ----------      ----------

 OPERATING INCOME                                     117.8           110.5            192.0           162.0

 OTHER (INCOME) EXPENSE
      Interest - net                                   12.1            17.1             28.8            34.4
      Other - net                                        --            (0.1)              --            (0.1)
                                                 ----------      ----------       ----------      ----------

 INCOME BEFORE INCOME TAXES                           105.7            93.5            163.2           127.7
      Income taxes                                     41.2            35.6             63.6            48.5
                                                 ----------      ----------       ----------      ----------

 INCOME BEFORE EXTRAORDINARY CHARGE                    64.5            57.9             99.6            79.2
      Extraordinary charge                               --              --               --            (3.4)
                                                 ----------      ----------       ----------      ----------

 NET INCOME                                      $     64.5      $     57.9       $     99.6      $     75.8
                                                 ==========      ==========       ==========      ==========
</TABLE>


Per share data is omitted since the Company's common stock is 100% owned by GTE
Corporation.

The accompanying notes are an integral part of these statements.


                                       1
<PAGE>   3

                   GTE FLORIDA INCORPORATED AND SUBSIDIARIES
               Condensed Consolidated Balance Sheets (Unaudited)


<TABLE>
<CAPTION>
                                                                           June 30,        December 31,
                                                                             1999              1998
                                                                          ----------       ------------
                                                                             (Dollars in Millions)

<S>                                                                       <C>              <C>
 ASSETS
 Current assets
     Cash and cash equivalents                                            $    107.6       $    113.5
     Receivables, less allowances of $29.3 million and $33.1 million           320.8            328.6
     Accounts receivable from affiliates                                        21.4             12.1
     Notes receivable from affiliates                                          790.3          1,218.1
     Inventories and supplies                                                   25.7             21.6
     Prepaid insurance and other                                                 5.5             27.3
                                                                          ----------       ----------

        Total current assets                                                 1,271.3          1,721.2
                                                                          ----------       ----------


 Property, plant and equipment, at cost                                      4,772.4          4,693.7
 Accumulated depreciation                                                   (2,803.6)        (2,709.3)
                                                                          ----------       ----------

        Total property, plant and equipment, net                             1,968.8          1,984.4
                                                                          ----------       ----------



 Prepaid pension costs                                                         209.9            195.8
 Other assets                                                                   17.3             26.0
                                                                          ----------       ----------

 Total assets                                                             $  3,467.3       $  3,927.4
                                                                          ==========       ==========
</TABLE>


The accompanying notes are an integral part of these statements.


                                       2
<PAGE>   4



                   GTE FLORIDA INCORPORATED AND SUBSIDIARIES
         Condensed Consolidated Balance Sheets (Unaudited) - Continued


<TABLE>
<CAPTION>
                                                                 June 30,        December 31,
                                                                   1999              1998
                                                               ------------      ------------
                                                                    (Dollars in Millions)

<S>                                                            <C>               <C>
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities
     Short-term obligations, including current maturities      $      937.6      $    1,396.5
     Notes payable to affiliate                                       108.7             105.5
     Accounts payable                                                  45.9              62.9
     Affiliate payables                                                79.8              99.5
     Taxes payable                                                     29.8              12.9
     Dividends payable                                                 55.1              28.1
     Other                                                            124.5             141.7
                                                               ------------      ------------

        Total current liabilities                                   1,381.4           1,847.1
                                                               ------------      ------------


 Long-term debt                                                       889.4             889.4
 Deferred income taxes                                                191.1             192.1
 Employee benefit plans and other liabilities                         216.1             211.6
                                                               ------------      ------------

        Total liabilities                                           2,678.0           3,140.2
                                                               ------------      ------------


 Shareholders' equity
     Preferred stock                                                   21.2              21.2
     Common stock (23,400,000 shares issued)                          585.0             585.0
     Additional paid-in capital                                        50.3              50.3
     Retained earnings                                                132.8             130.7
                                                               ------------      ------------

        Total shareholders' equity                                    789.3             787.2
                                                               ------------      ------------

 Total liabilities and shareholders' equity                    $    3,467.3      $    3,927.4
                                                               ============      ============
</TABLE>


The accompanying notes are an integral part of these statements.


                                       3
<PAGE>   5



                   GTE FLORIDA INCORPORATED AND SUBSIDIARIES
          Condensed Consolidated Statements of Cash Flows (Unaudited)


<TABLE>
<CAPTION>
                                                                                       Six Months Ended
                                                                                           June 30,
                                                                                  ---------------------------
                                                                                     1999             1998
                                                                                  ----------       ----------
                                                                                     (Dollars in Millions)
<S>                                                                               <C>              <C>
 OPERATIONS
     Income before extraordinary charge                                           $     99.6       $     79.2
     Adjustments to reconcile income before extraordinary charge to net cash
       from operations:
          Depreciation and amortization                                                183.3            180.0
          Provision for uncollectible accounts                                          15.0             18.4
          Changes in current assets and current liabilities                            (45.4)           261.1
          Deferred income taxes and other - net                                          6.0             19.5
                                                                                  ----------       ----------

        Net cash from operations                                                       258.5            558.2
                                                                                  ----------       ----------

 INVESTING
     Capital expenditures                                                             (166.3)          (217.4)
     Other - net                                                                         0.3               --
                                                                                  ----------       ----------

        Net cash used in investing                                                    (166.0)          (217.4)
                                                                                  ----------       ----------

 FINANCING
     Long-term debt issued                                                                --            297.1
     Long-term debt, including premiums paid on early retirement                          --           (128.5)
     Dividends                                                                         (70.5)           (93.7)
     Decrease in short-term obligations, excluding current maturities                 (458.9)          (280.4)
     Net change in affiliate notes                                                     431.0           (114.6)
     Other - net                                                                          --             (8.8)
                                                                                  ----------       ----------

        Net cash used in financing                                                     (98.4)          (328.9)
                                                                                  ----------       ----------

 Increase (decrease) in cash and cash equivalents                                       (5.9)            11.9

 Cash and cash equivalents:
     Beginning of period                                                               113.5             57.7
                                                                                  ----------       ----------

     End of period                                                                $    107.6       $     69.6
                                                                                  ==========       ==========
</TABLE>


The accompanying notes are an integral part of these statements.


                                       4
<PAGE>   6

                   GTE FLORIDA INCORPORATED AND SUBSIDIARIES
        Notes to Condensed Consolidated Financial Statements (Unaudited)


NOTE 1.  BASIS OF PRESENTATION

GTE Florida Incorporated (the Company) is incorporated under the laws of the
State of Florida and is a subsidiary of GTE Corporation (GTE).

The unaudited condensed consolidated financial statements included herein have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. However, in the opinion of management
of the Company, the condensed consolidated financial statements include all
adjustments, which consist only of normal recurring accruals, necessary to
present fairly the financial information for such periods. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's 1998 Annual Report on Form 10-K.

Reclassifications of prior year data have been made, where appropriate, to
conform to the 1999 presentation.

NOTE 2.  CAPITALIZED SOFTWARE

Effective January 1, 1999, the Company adopted Statement of Position (SOP)
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." As a result of adopting SOP 98-1, in the second quarter and
first half of 1999 the Company capitalized $5.8 million and $9.9 million,
respectively, of software expenditures, which would have previously been
expensed.

NOTE 3.  SPECIAL CHARGE

In 1999, GTE continued the review of its operations and cost structure to
ensure they were consistent with its growth objectives. In connection with this
ongoing review, GTE initiated employee separation programs that resulted in a
one-time charge for GTE during the first quarter of 1999. The charge pertaining
to the Company totaled $16.2 million and is reflected as "Selling, general and
administrative" costs and expenses in the condensed consolidated statements of
income. The components of the charge include separation programs and related
benefits such as outplacement and benefit continuation costs. These programs
were completed during the first quarter of 1999.

NOTE 4.  RECENT ACCOUNTING PRONOUNCEMENT

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. The Company is
currently assessing the impact of adopting SFAS No. 133, as amended, which is
effective January 1, 2001.

NOTE 5.  SEGMENT REPORTING

The Company has two reportable segments, Telephone Operations and GTE Funding
Incorporated (GTE Funding). The Telephone Operations segment primarily provides
wireline communication services to local markets. GTE Funding, a wholly-owned
subsidiary of the Company, provides short-term financing and investment
vehicles and cash management services for the Company and six other of GTE's
domestic telephone operating subsidiaries, each of which is contractually
obligated to repay all amounts borrowed from GTE Funding.


                                       5
<PAGE>   7


                   GTE FLORIDA INCORPORATED AND SUBSIDIARIES
  Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

GTE Funding has no reportable revenue or net income. Its interest expense is
approximately equal to the interest income received on affiliate notes between
GTE Funding and the various domestic telephone operating subsidiaries.

The following table represents segment income statement results for the three
and six months ended June 30, 1999 and 1998, and balance sheet results as of
June 30, 1999 and December 31, 1998:

<TABLE>
<CAPTION>
                                                Three Months Ended,                Six Months Ended,
                                                     June 30,                          June 30,
                                           ---------------------------       ---------------------------
                                              1999             1998             1999             1998
                                           ----------       ----------       ----------       ----------
                                                               (Dollars in Millions)
<S>                                        <C>              <C>              <C>              <C>
 TELEPHONE OPERATIONS:
     Total external revenues               $    444.2       $    417.3       $    841.0       $    778.9
     Operating income                           123.6            111.2            199.5            163.1
     Depreciation and amortization               87.6             84.2            183.3            180.0
     Interest expense                            17.8             14.0             36.3             32.4
     Interest income                               --              2.5               --              3.1
     Capital expenditures                        72.2            115.7            166.3            217.4
     Total assets (a)                                                           2,579.3          2,651.2

 GTE FUNDING:
     Operating loss                        $     (5.7)      $     (0.7)      $     (7.4)      $     (1.2)
     Interest expense                            10.0             36.1             35.7             55.6
     Interest income                             15.8             36.8             43.2             56.8
     Total assets (a) (b)                                                       1,123.4          1,655.8

        CONSOLIDATED REVENUES              $    444.2       $    417.3       $    841.0       $    778.9
        CONSOLIDATED OPERATING INCOME           117.8            110.5            192.0            162.0
        CONSOLIDATED ASSETS (a)                                                 3,467.3          3,927.4
</TABLE>

(a) Represents balance sheets as of June 30, 1999 and December 31, 1998.
(b) Assets consist primarily of cash and notes receivable from affiliates.


NOTE 6.  PROPOSED MERGER WITH BELL ATLANTIC CORPORATION

Bell Atlantic and GTE have announced a proposed merger of equals under a
definitive merger agreement dated July 27, 1998. Under the terms of the
agreement, GTE shareholders will receive 1.22 shares of Bell Atlantic common
stock for each share of GTE common stock that they own.

The merger is expected to qualify as a pooling of interests, which means that
for accounting and financial reporting purposes the companies will be treated
as if they had always been combined. At annual meetings held in May 1999, the
shareholder's of each company approved the merger. The completion of the merger
is subject to a number of conditions, including certain regulatory approvals
and receipt of opinions that the merger will be tax-free.

Both companies are working diligently to complete the merger at the earliest
practicable date. However, Bell Atlantic and GTE must obtain the approval of a
variety of state and federal regulatory agencies and, accordingly, the merger
may close in the first half of 2000.


                                       6
<PAGE>   8

                   GTE FLORIDA INCORPORATED AND SUBSIDIARIES

Item 2.       Management's Discussion and Analysis of Financial Condition
                           And Results of Operations

RESULTS OF OPERATIONS

Net income for the three months ended June 30, 1999 increased $6.6 million, or
11%, as a result of an increase in revenues and sales, partially offset by an
increase in operating expenses. Net income for the six months ended June 30,
1999 increased $23.8 million, or 31%, over the prior year primarily due to an
increase in network access services revenues, partially offset by increased
operating expenses. In the first quarter of 1998, the Company recorded an
extraordinary after-tax charge of $3.4 million (net of tax benefits of $2.1
million) related to the early retirement of debt.


<TABLE>
<CAPTION>

REVENUES AND SALES
(Dollars in Millions)                   Three Months Ended
                                              June 30,
                                     --------------------------                        Percent
                                        1999            1998          Increase         Change
                                     ----------      ----------      ----------      ----------
<S>                                  <C>             <C>             <C>             <C>
     Local services                  $    186.3      $    183.2      $      3.1               2%
     Network access services              151.9           134.5            17.4              13%
     Other services and sales             106.0            99.6             6.4               6%
                                     ----------      ----------      ----------

       Total revenues and sales      $    444.2      $    417.3      $     26.9               6%
                                     ==========      ==========      ==========


                                          Six Months Ended
                                               June 30,
                                     --------------------------                        Percent
                                        1999            1998          Increase         Change
                                     ----------      ----------      ----------      ----------
     Local services                  $    371.3      $    364.1      $      7.2               2%
     Network access services              301.7           252.5            49.2              19%
     Other services and sales             168.0           162.3             5.7               4%
                                     ----------      ----------      ----------

       Total revenues and sales      $    841.0      $    778.9      $     62.1               8%
                                     ==========      ==========      ==========
</TABLE>


Local Services Revenues

Increases in local services revenues for the three and six months ended June 30,
1999 are primarily the result of a 4% increase in access lines over the same
periods of 1998 generating additional revenues of $4.5 and $10.5 million,
respectively, from basic local services, CentraNet(R) services, Integrated
Services Digital Network and Digital Channel Services. Partially offsetting
these increases were declines in installation and other non-recurring charges
for the second quarter of 1999 and year-to-date compared to the same periods in
1998.

Network Access Services Revenues

The increases in network access services revenues for the second quarter of 1999
and year-to-date were primarily caused by increases in minutes of use of 10% and
8%, respectively, over the prior year periods, generating revenues of $12.0
million and $18.8 million, respectively. Special access revenues grew by $7.7
million and $16.7 million for the three and six months ended June 30, 1999,
respectively, as a result of greater demand for increased bandwidth services by
high capacity users. End user surcharges increased $4.6 million and $5.6 million
for the second quarter of 1999 and year-to-date, respectively, as a result of
implementation of the local number portability surcharge (see "Interstate
Regulatory Developments - Number Portability"). The six month variance also
includes


                                       7
<PAGE>   9



                    GTE FLORIDA INCORPORATED AND SUBSIDIARIES

           Management's Discussion and Analysis of Financial Condition
                      And Results of Operations - Continued

an increase of $29.2 million resulting from the sharing provisions of the
Federal Communications Commission's (FCC) 1997 price cap recorded in the first
quarter of 1998. Partially offsetting the three and six month increases are
decreases of $8.4 million and $16.8 million, respectively, reflecting the impact
of mandated interstate and intrastate access price changes.

Other Services and Sales Revenues

Other services and sales revenues increased for both the three and six months
ended June 30, 1999 primarily due to increases in nonregulated service revenues
and equipment sales of $4.9 million and $8.7 million, respectively, and wireless
products and services revenues of $2.5 million and $3.2 million, respectively.
Additionally, E911 revenues increased $1.8 million for both periods. These
increases are partially offset by a $4.5 million and $8.7 million decline in
toll services revenues for the three and six months ended June 30, 1999,
respectively, reflecting the continuing impacts of intraLATA toll competition.

<TABLE>
<CAPTION>
OPERATING COSTS AND EXPENSES
(Dollars in Millions)                                     Three Months Ended
                                                               June 30,
                                                    -----------------------------                       Percent
                                                         1999             1998         Increase         Change
                                                    ------------     ------------    -----------     -------------
<S>                                                 <C>              <C>             <C>             <C>
    Cost of services and sales                      $      161.6     $      160.3    $       1.3             1%
    Selling, general and administrative                     77.2             62.3           14.9            24%
    Depreciation and amortization                           87.6             84.2            3.4             4%
                                                    ------------     ------------    -----------

      Total operating costs and expenses            $      326.4     $      306.8    $      19.6             6%
                                                    ============     ============    ===========
</TABLE>

<TABLE>
<CAPTION>
                                                           Six Months Ended
                                                               June 30,
                                                    -----------------------------                       Percent
                                                         1999             1998          Increase        Change
                                                    ------------     ------------    -----------     -------------
<S>                                                 <C>              <C>             <C>             <C>
    Cost of services and sales                      $      312.9     $      310.0    $       2.9             1%
    Selling, general and administrative                    152.8            126.9           25.9            20%
    Depreciation and amortization                          183.3            180.0            3.3             2%
                                                    ------------     ------------    -----------

      Total operating costs and expenses            $      649.0     $      616.9    $      32.1             5%
                                                    ============     ============    ===========
</TABLE>

Total operating costs and expenses increased for the three and six months ended
June 30, 1999, compared to the same periods in 1998 primarily due to higher
costs of $10.4 million for both the second quarter of 1999 and year-to-date for
access charges incurred to terminate intraLATA toll calls outside the Company's
territory. The expense increase was also due to a favorable adjustment of $10.3
million for certain employee benefits and other liabilities that were recorded
in the second quarter of 1998. In addition, a one-time special charge of $16.2
million associated with employee separation programs completed in the first
quarter of 1999 contributed to the year-to-date increase. Partially offsetting
these expenses were reduced software right-to-use (RTU) fees associated with the
Company's network switching equipment of $10.5 million and $14.6 million for the
three and six month periods, respectively. This includes a reduction in RTU
costs of $5.8 million and $9.9 million, respectively, for the three and six
months due to the capitalization of software costs in 1999 as a result of the
adoption of SOP 98-1, "Accounting for Costs of Computer Software Developed or
Obtained for Internal Use," in addition to a reduction in overall 1999 RTU fees
of $4.7 million for both the three and six months ended June 30, 1999.
Depreciation increased $3.4 million and $3.3 million for the three and six
months ended June 30, 1999, respectively, due to the amortization of previously



                                       8
<PAGE>   10



                    GTE FLORIDA INCORPORATED AND SUBSIDIARIES

           Management's Discussion and Analysis of Financial Condition
                      And Results of Operations - Continued


capitalized software associated with the implementation of new administrative
systems within the Company, as well as additional investment in network
facilities resulting from increased demand for switched access lines.


OTHER INCOME STATEMENT ITEMS

Interest-net decreased $5.0 million or 29% and $5.6 million or 16%,
respectively, for the three and six months ended June 30, 1999, primarily due to
a decrease in interest expense resulting from lower average short-term debt
levels.

Income taxes increased 16% or $5.6 million for the three months and 31% or $15.1
million for the six months ended June 30, 1999, compared to the same periods in
1998. These increases are primarily due to corresponding increases in pretax
income and other tax adjustments.


CAPITAL RESOURCES AND LIQUIDITY

Management believes that the Company has adequate internal and external
resources available to meet ongoing operating requirements for construction of
new plant, modernization of facilities and payment of dividends. The Company
generally funds its construction program from operations, although external
financing is available. Short-term financing can be obtained through borrowings
from GTE or GTE Funding, a wholly-owned subsidiary of the Company. The Company
participates with other affiliates in a $1.5 billion, 364-day syndicated
revolving line of credit and has access to an additional $1.0 billion in
short-term liquidity through GTE and GTE Funding's committed bilateral revolving
lines of credit. The Company also has an existing shelf registration statement
for an additional $300.0 million of debentures.

The Company's primary source of funds during the first six months of 1999 was
cash from operations of $258.5 million compared to $558.2 million for the same
period in 1998. The decrease in cash from operations primarily reflects an
increase in the Company's working capital requirements partially offset by an
increase in results of operations.

The Company's capital expenditures during the first six months of 1999 were
$166.3 million compared to $217.4 million for the same period in 1998. The
majority of new investment is being made to meet the demands of growth and
modernize facilities which are required to support new products and enhanced
services. The overall anticipated capital expenditures for 1999 are expected to
be less than capital expenditures during 1998.

Cash used in financing activities was $98.4 million during the first six months
of 1999 compared to $328.9 million for the same period in 1998. This included
dividend payments of $70.5 million in the first six months of 1999 compared to
$93.7 million for the same period in 1998. Short-term financing, including the
net change in affiliate notes decreased $27.9 million for the first six months
of 1999 compared to $395.0 million for the same period in 1998. In 1998, the
Company paid $5.5 million pretax ($3.4 million after-tax) in premiums on the
retirement of $125.1 million of long-term debt redeemed prior to stated
maturity. The Company issued $300.0 million of 6.86% Series E debentures in
February 1998 and recognized an interest rate hedge loss of approximately $8.8
million on the settlement of forward contracts related to that debt issuance.
The loss is being amortized over the life of the associated debt.



                                       9
<PAGE>   11



                    GTE FLORIDA INCORPORATED AND SUBSIDIARIES

           Management's Discussion and Analysis of Financial Condition
                      And Results of Operations - Continued


INTERSTATE REGULATORY DEVELOPMENTS

During the second quarter of 1999, regulatory and legislative activity at both
the state and federal levels continued to be a direct result of the
Telecommunications Act of 1996 (Telecommunications Act). Along with promoting
competition in all segments of the telecommunications industry, the
Telecommunications Act was intended to preserve and advance universal service.

GTE continued in the second quarter of 1999, to meet the wholesale requirements
of new competitors. To date, GTE has signed interconnection agreements with
other carriers, providing them the capability to purchase individual unbundled
network elements (UNEs), resell retail services and interconnect
facilities-based networks. Several of these interconnection agreements were the
result of the arbitration process established by the Telecommunications Act,
and incorporated prices or terms and conditions based upon the Federal
Communications Commission (FCC) rules that were subsequently overturned by the
Eighth Circuit Court (Eighth Circuit) in July 1997. GTE challenged a number of
such agreements in federal district courts during 1997.

GTE's position in these challenges was supported by the Eighth Circuit's July
1997 decision stating that the FCC had overstepped its authority in several
areas concerning implementation of the interconnection provisions of the
Telecommunications Act. In January 1999, the U.S. Supreme Court (Supreme Court)
reversed in part and affirmed in part the Eighth Circuit's decisions. The
Supreme Court reversed the Eighth Circuit's determination that the FCC had no
jurisdiction over pricing. As a result, the pricing rules established by the
FCC are now subject to review on the merits by the Eighth Circuit. On the other
hand, the Supreme Court vacated the FCC rule setting forth the UNEs that
incumbent local exchange carriers (ILECs) are required to provide to
competitive LECs (CLECs). This latter ruling has led to a proceeding before the
FCC concerning what elements will have to be offered under what conditions.
Pending the final rulemaking by the FCC on the provisions of UNEs, GTE is
continuing to provide individual UNEs on a non-combined basis set forth in
existing interconnection agreements even though it is not legally obligated to
do so.

In June 1999, the Eighth Circuit established a schedule for addressing the
issues it did not decide in 1998. The major issues are (1) the FCC's cost
methodology used to set prices, (2) it's methodology for setting wholesale
discounts, and (3) the "proxy rates" it set for interconnection, UNEs and
wholesale discounts. Supplemental opening briefs from petitioners and
supporting intervenors were filed July 16, 1999 and the opening brief of the
FCC and its supporting intervenors is due August 16, 1999. Reply briefs are due
August 31, 1999. Oral argument is scheduled for September 1999.

UNIVERSAL SERVICE

GTE is active before both state and federal regulators advocating rapid
development and implementation of measures that will meet the requirements of
Section 254 of the Telecommunications Act that covers the Federal Universal
Service Program. Specifically, GTE urges regulators to identify and remove all
hidden subsidies and to provide an explicit replacement mechanism.

In October 1998, the FCC issued an order selecting a cost model for universal
service and planned to select cost inputs in the second quarter of 1999. Due to
unforeseen delays, the FCC has now moved the implementation date of the new
universal service mechanism for nonrural carriers to January 2000. As a result,
many state regulators are awaiting FCC action so they can design their
universal service programs to be complementary with the FCC program. On July
30, 1999, the United States Court of Appeals for the Fifth Circuit (Fifth
Circuit) affirmed in part, reversed in part, and remanded in part the FCC's
universal service regime. Specifically, the Fifth Circuit upheld the agency's
decisions regarding: 1) several aspects of the high-cost support program,
including implementation timing, separate treatment of rural carriers, the
definition of service areas and use of the forward-looking costs to determine
support; 2) no mandatory unbundling of supported services; 3) inclusion of
commercial mobile radio service providers as universal service fund
contributors; and 4) aspects of the schools and libraries program, including
support for Internet access and internal connections and payments to
non-telecommunications carriers. The Fifth Circuit reversed: 1) the assessment
of contributions for schools and libraries fund based, in part, on intrastate
revenues; 2) the rule prohibiting local telephone service providers from
disconnecting low-income subscribers for non-payment of long distance charges;
3) the decision to assess high-cost fund contributions on primarily
international carriers despite marginal interstate revenues; 4) the requirement
that ILECs recover their contributions from access charges; and 5) the blanket
prohibition on additional state eligibility requirements for carriers receiving
high cost support. GTE is considering its options.



                                       10
<PAGE>   12



                    GTE FLORIDA INCORPORATED AND SUBSIDIARIES

           Management's Discussion and Analysis of Financial Condition
                      And Results of Operations - Continued

PRICE CAP

In May 1999, the U.S. Court of Appeals for the District of Columbia (Court)
released a decision regarding the FCC's choice of a 6.5% price cap productivity
factor in a 1997 order. The Court found the FCC's choice of a 6.0% base and a
0.5% Consumer Productivity Dividend to be inadequately supported. The Court
remanded the matter back to the FCC for further action and established an April
2000 date by which the FCC must complete its deliberations. The Court also
stayed application of its order, allowing the status quo use of the 6.5%
productivity factor pending conclusion of the FCC's further review.

INTERSTATE ACCESS REVISION

Effective July 1999, access charges were further reduced using a 6.5%
productivity factor in compliance with FCC requirements to reflect the impacts
of access charge reform and in making GTE's 1999 Annual Filing. The total annual
financial impact of the reduction was $12.9 million. Similar filings during 1997
and 1998 had already resulted in price reductions.

In July 1999, GTE, along with a coalition of local exchange and long distance
companies, submitted a proposal for interstate access charge and universal
service reform to the FCC. It is likely that the FCC will put the coalition's
proposal out for public comment in August 1999. The proposal would accelerate
the shift in access revenue recovery from per-minute to flat-rated charges, set
a schedule for elimination of the price cap productivity factor, and provide
more explicit support for universal service.

On August 4, 1999, the FCC announced adoption of an Order that grants price cap
LECs the ability to introduce new services without regulatory delay. The Order
also offers the promise of progressively greater flexibility in setting the
prices for interstate special access services as competition develops, gradually
replacing regulation with competition as the primary means of setting prices.
Although the text of the Order is not yet available, based upon the FCC press
release, the FCC has taken a reasonable step towards lessening regulation of
interstate special access. It appears the FCC has established a framework that
will allow ILECs the ability to use some of the same pricing mechanisms offered
by CLECs for special access services. The press release indicates the FCC has
begun a new rulemaking proceeding that is likely to lead to additional pricing
flexibility for interstate switched access services.

ADVANCED TELECOMMUNICATIONS SERVICES

Section 706 of the Telecommunications Act required the FCC to "encourage the
deployment on a reasonable and timely basis of advanced telecommunications
capability to all Americans." Further, the FCC was required to conduct a
proceeding aimed at determining the availability of advanced telecommunications,
and to take action to remove barriers to infrastructure investment and to
promote competition.

In an Order and Notice of Proposed Rulemaking (NPRM) released in August 1998,
the FCC ruled that advanced services offered by an incumbent LEC are subject
to the unbundling and resale requirements of the Telecommunications Act. In the
NPRM, the FCC sought comment on extensive, new separate affiliate rules under
which an incumbent LEC's affiliate could offer advanced services free from the
unbundling and resale obligations of the Telecommunications Act. In addition,
the NPRM sought comment on a number of issues regarding collocation, local
loops, unbundling and resale obligations for network facilities needed for
advanced services.

In March 1999, the FCC released an Order stemming from the August 1998 NPRM. In
the Order the FCC adopted a number of new collocation rules designed to make
competitive entry easier and less costly. These rules specify how incumbent LECs
will manage such items as alternate collocation arrangements, security, space
preparation cost



                                       11
<PAGE>   13


                    GTE FLORIDA INCORPORATED AND SUBSIDIARIES

           Management's Discussion and Analysis of Financial Condition
                      And Results of Operations - Continued

allocation, provisioning intervals, and space exhaustion. GTE has appealed this
order to federal court. The FCC also released a Further Notice of Proposed
Rulemaking (FNPRM) seeking comment on spectrum compatibility issues and line
sharing. Line sharing is a concept wherein two or more service providers are
allowed to use the same local loop (e.g., voice and xDSL). GTE will vigorously
oppose line sharing.

The FCC has yet to release an order addressing separate affiliates, local loops,
unbundling and resale.

NUMBER PORTABILITY

In December 1998, the FCC released a Memorandum Opinion and Order establishing
cost recovery rules for local number portability (LNP) that permitted the
recovery of carrier-specific costs directly related to the provision of
long-term LNP via a federally tariffed end-user monthly charge. GTE subsequently
filed an LNP tariff with the FCC, and in March 1999 instituted an end-user
number portability fee. This charge is levied on all business and residence
customers because all customers benefit from the competitive environment created
by LNP capability. In June 1999, GTE's tariffed LNP charge was reviewed and
accepted by the FCC at $0.36 per access line.

INTERNET SERVICE TRAFFIC

Incumbent LECs are required to provide open access to all Internet service
providers (ISPs), while cable television operators are not. Several major cable
television operators providing Internet access through cable modem facilities
are only offering their affiliated ISPs to consumers. Cable television operators
that do allow customers to select non-affiliated ISPs often require the customer
to also pay for their affiliated ISP's service (i.e., to pay twice for the same
service).

GTE has been active in encouraging municipalities engaged in reviewing cable
television mergers or franchise renewals to require cable modem open access as a
condition for approval. The city of Portland, Oregon was first to adopt such a
requirement and a subsequent federal court challenge by AT&T was denied. AT&T
has appealed that decision and arguments will take place in October 1999. The
FCC announced that it will file a brief to express its concern over the effect
that the actions of local franchising authorities could have on the FCC's
hands-off approach to the broadband market, and specifically address the
importance of a national policy.

In July 1999, Broward County, Florida also adopted an ordinance requiring cable
television franchisees to provide ISPs "nondiscriminatory equal access" to their
cable modem platforms. AT&T subsequently announced that it would appeal that
decision as well. Also, in July 1999, Comcast Cablevision and Advanced Cable
Communications filed a lawsuit claiming Broward County violated the
Communications Act by inserting unlawful requirements into the franchise
agreement.


INTRASTATE REGULATORY DEVELOPMENTS

In May 1999, the Florida Public Service Commission (FPSC) opened a generic
proceeding in two phases to address costs and prices for UNEs. In Phase I, the
FPSC will set its UNE policies, including which elements to deaverage, the
appropriate basis for deaveraging and which UNEs should be combined. The FPSC
will also determine guidelines and requirements for UNE cost studies. In Phase
2, cost studies and prices will be filed. Hearings for Phase 1 are scheduled in
December 1999 and the staff report will be issued in February 2000.

In July 1999, the FPSC adopted a requirement for the Company to begin paying
Intermedia Communications, Inc. (ICI) local reciprocal compensation for ISP
traffic. The Company is considering its options. The financial statements of the
Company already reflect the impact of this requirement.



                                       12
<PAGE>   14


                    GTE FLORIDA INCORPORATED AND SUBSIDIARIES

           Management's Discussion and Analysis of Financial Condition
                      And Results of Operations - Continued


At the conclusion of the 1999 legislative session, the Florida Legislature
passed a bill that extended for one year (until January 2001) the state's
interim universal service mechanism and carrier-of-last-resort obligations. This
bill did not extend the price cap for the Company, allowing annual rate
increases for basic services by the rate of inflation (GDP-PI) less 1%. The
Florida Legislature adjourned the 1999 regular session without acting on any new
universal service reform legislation.


OTHER DEVELOPMENTS

Proposed GTE/Bell Atlantic Merger

Bell Atlantic and GTE have announced a proposed merger of equals under a
definitive merger agreement dated July 27, 1998. Under the terms of the
agreement, GTE shareholders will receive 1.22 shares of Bell Atlantic common
stock for each share of GTE common stock that they own.

The merger is expected to qualify as a pooling of interests, which means that
for accounting and financial reporting purposes the companies will be treated as
if they had always been combined. At annual meetings held in May 1999, the
shareholders of each company approved the merger. The completion of the merger
is subject to a number of conditions, including certain regulatory approvals and
receipt of opinions that the merger will be tax-free.

Both companies are working diligently to complete the merger at the earliest
practicable date. However, Bell Atlantic and GTE must obtain the approval of a
variety of state and federal regulatory agencies and, accordingly, the merger
may close in the first half of 2000.


YEAR 2000 CONVERSION

State of Readiness

As of June 30, 1999, GTE has completed Year 2000 remediation, conducted system
testing and returned to production the essential systems that support its
domestic telecommunications businesses. GTE's portion of the public switched
telephone network (PSTN) in the United States has been upgraded for Year 2000,
and all of GTE's access lines are now operating using Year 2000 compliant
central office switches and network elements.

GTE expects its Internet businesses to be Year 2000 compliant in the third
quarter of 1999. Also in the third quarter, GTE's domestic wireless company, all
international affiliate companies, and all remaining domestic companies will
have completed the Year 2000 compliance of their systems.

GTE's remaining effort consists of quality assurance and validation of our Year
2000 efforts across our businesses; assuring forward compliance of our systems
and services; planning for reasonably foreseeable contingencies associated with
the millennium rollover; and staffing our corporate Year 2000 communications
watch center through March 1, 2000.

Independent verification and validation is the final step in GTE's Year 2000
process. This quality assurance process is expected to be substantially complete
in the third quarter of 1999. However, GTE will continue its periodic reviews
conducted by internal audit into 2000. Program status will also continue to be
reported each quarter to the Company's external auditors.



                                       13
<PAGE>   15

                    GTE FLORIDA INCORPORATED AND SUBSIDIARIES

           Management's Discussion and Analysis of Financial Condition
                      And Results of Operations - Continued


Cost to Address Year 2000 Issues

With the incorporation of the TELUS Year 2000 program, the estimated total
multi-year cost of GTE's Year 2000 Program is not expected to exceed $400
million. Through June 30, 1999, expenditures totaled $320 million. The current
estimate for the cost of remediation for the Company is approximately $20.0
million. Through June 30, 1999, expenditures totaled $13.0 million. Year 2000
remediation costs are expensed in the year incurred. Approximately 67% of GTE's
program effort involves U.S. domestic operations. GTE has not elected to replace
or accelerate the planned replacement of any systems due to the Year 2000 issue.
As a result of completions in June 1999, GTE has begun to reduce the staff
assigned to the Year 2000 program. From a program peak of over 1,200 full-time
equivalent workers, we are currently staffed with an estimated 700 to 800
full-time equivalent workers (both company employees and contractors) worldwide.

Risks of Year 2000 Issues

With the completion of conversion and system testing, GTE believes that the risk
of multiple, simultaneous Year 2000 disruptions affecting GTE's ability to
provide basic services has been substantially eliminated. While isolated system
issues may exist, the "most reasonably likely worse case scenario" would be any
disruptions resulting from interoperability issues with other international
carriers that have not completed their Year 2000 efforts.

Contingency Planning

GTE continues to enhance its normal business continuity planning to address
potential Year 2000 interruptions. GTE's disaster preparedness recovery teams
have included procedures and activities for a "multi-regional" Year 2000
contingency, if it occurs. GTE has established a corporate Year 2000
communications watch center to be operational in Dallas, Texas from September 8,
1999 through March 1, 2000. The initial versions of these plans were completed
during the second quarter of 1999. These plans will be kept current through the
millennium rollover, and are expected to be tested (as appropriate) by the end
of September 1999. GTE's Year 2000 contingency plans include business continuity
planning; disaster recovery/emergency preparedness; millennium rollover
planning; post millennium degradation tracking; a network and information
technology freeze period; employee availability and logistics backup planning;
"follow-the-sun" time-zone impact analysis; and coordination with other
(non-PSTN) telecommunications providers.


RECENT ACCOUNTING PRONOUNCEMENT

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. The statement requires
entities that use derivative instruments to measure these instruments at fair
value and record them as assets or liabilities on the balance sheet. It also
requires entities to reflect the gains or losses associated with changes in the
fair value of these derivatives, either in earnings or as a separate component
of comprehensive income, depending on the nature of the underlying contract or
transaction. The Company is currently assessing the impact of adopting SFAS No.
133, as amended, which is effective January 1, 2001.



                                       14
<PAGE>   16


                    GTE FLORIDA INCORPORATED AND SUBSIDIARIES

           Management's Discussion and Analysis of Financial Condition
                      And Results of Operations - Continued

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

In this Management's Discussion and Analysis, the Company has made
forward-looking statements. These statements are based on the Company's
estimates and assumptions and are subject to certain risks and uncertainties.
Forward-looking statements include the information concerning possible or
assumed future results of operations of the Company, as well as those statements
preceded or followed by the words "anticipates," "believes," "estimates,"
"expects," "hopes," "targets" or similar expressions. For each of these
statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.

The future results of the Company could be affected by subsequent events and
could differ materially from those expressed in the forward-looking statements.
If future events and actual performance differ from the Company's assumptions,
the actual results could vary significantly from the performance projected in
the forward-looking statements.

The following important factors could affect the future results of the Company
and could cause those results to differ materially from those expressed in the
forward-looking statements: (1) materially adverse changes in economic
conditions in the markets served by the Company; (2) material changes in
available technology; (3) the final resolution of federal, state and local
regulatory initiatives and proceedings, including arbitration proceedings, and
judicial review of those initiatives and proceedings, pertaining to, among other
matters, the terms of interconnection, access charges, universal service,
unbundled network elements and resale rates; (4) the extent, timing, success and
overall effects of competition from others in the local telephone and intraLATA
toll service markets; and (5) the success and expense of our remediation efforts
and those of our suppliers, customers and all interconnecting carriers in
achieving Year 2000 compliance.


Item 3.   Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in GTE's market risks since December 31,
1998.


                                       15
<PAGE>   17



PART II.  OTHER INFORMATION

                    GTE FLORIDA INCORPORATED AND SUBSIDIARIES


Item 6.  Exhibits and Reports on Form 8-K.

      (a) Exhibits required by Item 601 of Regulation S-K.

               12     Statement re: Calculation of the Consolidated Ratio of
                      Earnings to Fixed Charges

               27     Financial Data Schedule

      (b) The Company filed no reports on Form 8-K during the second quarter of
1999.



                                       16
<PAGE>   18








                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

<TABLE>
<S>                                                        <C>

                                                                       GTE Florida Incorporated
                                                           --------------------------------------------------
                                                                             (Registrant)

Date:            August 12, 1999                                         /s/ Stephen L. Shore
          ------------------------------                   --------------------------------------------------
                                                                             Stephen L. Shore
                                                                              Controller
                                                                    (Principal Accounting Officer)
</TABLE>




<PAGE>   19



                                 EXHIBIT INDEX

<TABLE>
<CAPTION>

     Exhibit
     Number                                                   Description
-------------------        -----------------------------------------------------------------------------------------
<S>                        <C>
        12                 Statement re: Calculation of the Consolidated Ratio of Earnings to Fixed Charges

        27                 Financial Data Schedule

</TABLE>