<PAGE>   1
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                                 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: SEPTEMBER 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)


             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)

        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
October 31, 1999. The Company's common stock is 100% owned by GTE Corporation.



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<PAGE>   2
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

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


<TABLE>
<CAPTION>
                                              Three Months Ended        Nine Months Ended
                                                 September 30,            September 30,
                                             --------------------     ---------------------
                                               1999        1998         1999          1998
                                             --------    --------     --------     --------
                                                       (Dollars in Millions)
<S>                                          <C>         <C>         <C>          <C>
REVENUES AND SALES
     Local services                          $  182.3    $  181.1     $  553.7      $  545.1
     Network access services                    143.8       139.9        445.5         392.4
     Other services and sales                    86.7        86.3        254.7         248.7
                                             --------    --------     --------      --------

        Total revenues and sales                412.8       407.3      1,253.9       1,186.2
                                             --------    --------     --------      --------

OPERATING COSTS AND EXPENSES
     Cost of services and sales                 141.1       145.7        454.0         455.7
     Selling, general and administrative         54.2        64.8        207.1         191.7
     Depreciation and amortization               88.8        89.1        272.0         269.1
                                             --------    --------     --------      --------

        Total operating costs and expenses      284.1       299.6        933.1         916.5
                                             --------    --------     --------      --------

OPERATING INCOME                                128.7       107.7        320.8         269.7

OTHER (INCOME) EXPENSE
     Interest - net                              17.0        18.1         45.9          52.5
     Other - net                                   --          --           --          (0.1)
                                             --------    --------     --------      --------

INCOME BEFORE INCOME TAXES                      111.7        89.6        274.9         217.3
     Income taxes                                43.5        35.1        107.1          83.7
                                             --------    --------     --------      --------

INCOME BEFORE EXTRAORDINARY CHARGE               68.2        54.5        167.8         133.6
     Extraordinary charge                          --          --           --          (3.4)
                                             --------    --------     --------      --------

NET INCOME                                   $   68.2    $   54.5     $  167.8      $  130.2
                                             ========    ========     ========      ========
</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 SUBSIDIARY
               Condensed Consolidated Balance Sheets (Unaudited)

<TABLE>
<CAPTION>
                                                                     September 30,  December 31,
                                                                         1999           1998
                                                                     ------------   ------------
                                                                        (Dollars in Millions)
<S>                                                                  <C>             <C>
ASSETS
Current assets
    Cash and cash equivalents                                         $   80.8        $  113.5
    Receivables, less allowances of $34.3 million and $33.1 million      320.0           328.6
    Accounts receivable from affiliates                                   15.0            12.1
    Notes receivable from affiliates                                     928.6         1,218.1
    Inventories and supplies                                              21.5            21.6
    Prepayments and other                                                 10.3            27.3
                                                                      --------        --------

       Total current assets                                            1,376.2         1,721.2
                                                                      --------        --------


Property, plant and equipment, at cost                                 4,780.9         4,693.7
Accumulated depreciation                                              (2,840.4)       (2,709.3)
                                                                      --------        --------

       Total property, plant and equipment, net                        1,940.5         1,984.4
                                                                      --------        --------

Prepaid pension costs                                                    251.0           195.8
Other assets                                                              14.1            26.0
                                                                      --------        --------

Total assets                                                          $3,581.8        $3,927.4
                                                                      ========        ========
</TABLE>

The accompanying notes are an integral part of these statements.

                                      2
<PAGE>   4
                    GTE FLORIDA INCORPORATED AND SUBSIDIARY
         Condensed Consolidated Balance Sheets (Unaudited) - Continued

<TABLE>
<CAPTION>
                                                          September 30,   December 31,
                                                               1999          1998
                                                          -------------   ------------
                                                             (Dollars in Millions)
<S>                                                       <C>             <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
    Short-term obligations, including current maturities   $1,071.6          $1,396.5
    Notes payable to affiliates                                20.7             105.5
    Accounts payable                                           58.5              62.9
    Affiliate payables                                         76.4              99.5
    Taxes payable                                              63.7              12.9
    Dividends payable                                          58.1              28.1
    Other                                                     124.8             141.7
                                                           --------          --------

       Total current liabilities                            1,473.8           1,847.1
                                                           --------          --------


Long-term debt                                                889.6             889.4
Deferred income taxes                                         191.8             192.1
Employee benefit plans and other liabilities                  220.7             211.6
                                                           --------          --------

       Total liabilities                                    2,775.9           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                                 57.0              50.3
    Retained earnings                                         142.7             130.7
                                                           --------          --------

       Total shareholders' equity                             805.9             787.2
                                                           --------          --------

Total liabilities and shareholders' equity                 $3,581.8          $3,927.4
                                                           ========          ========
</TABLE>

The accompanying notes are an integral part of these statements.

                                       3
<PAGE>   5

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


<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                                    --------------------
                                                                                      1999        1998
                                                                                    -------      -------
                                                                                    (Dollars in Millions)
<S>                                                                                 <C>         <C>
OPERATIONS
    Income before extraordinary charge                                               $167.8      $133.6
    Adjustments to reconcile income before extraordinary charge to net cash from
       operations:
         Depreciation and amortization                                                272.0       269.1
         Provision for uncollectible accounts                                          29.2        29.5
         Changes in current assets and current liabilities                              2.8       180.3
         Deferred income taxes and other - net                                        (33.1)       (0.5)
                                                                                     ------      ------
       Net cash from operations                                                       438.7       612.0
                                                                                     ------      ------
INVESTING
    Capital expenditures                                                             (225.7)     (338.3)
    Other - net                                                                         0.4         0.1
                                                                                     ------      ------
       Net cash used in investing                                                    (225.3)     (338.2)
                                                                                     ------      ------
FINANCING
    Long-term debt issued                                                                --       297.0
    Long-term debt, including premiums paid on early retirement                          --      (128.5)
    Dividends paid                                                                   (125.8)     (147.7)
    Decrease in short-term obligations, excluding current maturities                 (324.9)     (359.0)
    Net change in affiliate notes                                                     204.6        80.1
    Other - net                                                                          --        (8.8)
                                                                                     ------      ------
       Net cash used in financing                                                    (246.1)     (266.9)
                                                                                     ------      ------

Increase (decrease) in cash and cash equivalents                                      (32.7)        6.9

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

    End of period                                                                    $ 80.8      $ 64.6
                                                                                     ======      ======
</TABLE>


The accompanying notes are an integral part of these statements.

                                       4
<PAGE>   6

                     GTE FLORIDA INCORPORATED AND SUBSIDIARY
           Consolidated Statement of Shareholders' Equity (Unaudited)


<TABLE>
<CAPTION>
                                                                   Additional
                                           Preferred     Common     Paid-In    Retained
                                             Stock        Stock     Capital    Earnings    Total
                                           ---------     ------    ----------  --------    ------
                                                            (Dollars in Millions)
<S>                                        <C>          <C>        <C>         <C>        <C>
Shareholders' equity, December 31, 1998      $ 21.2      $585.0      $ 50.3     $130.7     $787.2

Net income                                                                       167.8      167.8
Tax benefit of employee stock
   options exercised                                                    6.7                   6.7
Dividends declared                                                              (155.8)    (155.8)
                                             ------      ------      ------     ------     ------

Shareholders' equity, September 30, 1999     $ 21.2      $585.0      $ 57.0     $142.7     $805.9
                                             ======      ======      ======     ======     ======
</TABLE>


The accompanying notes are an integral part of these statements.


                                       5
<PAGE>   7

                     GTE FLORIDA INCORPORATED AND SUBSIDIARY
        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 third quarter and first
nine months of 1999, the Company capitalized $8.5 million and $18.4 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.

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.


                                       6

<PAGE>   8
                GTE FLORIDA INCORPORATED AND SUBSIDIARY
  Notes to Condensed Consolidated Financial Statements (Unaudited) - Continued

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

<TABLE>
<CAPTION>
                                         Three Months Ended          Nine Months Ended
                                            September 30,              September 30,
                                       ----------------------      ----------------------
                                         1999          1998          1999          1998
                                       --------      --------      --------      --------
                                                      (Dollars in Millions)
<S>                                    <C>           <C>           <C>           <C>
TELEPHONE OPERATIONS:
    Total external revenues            $  412.8      $  407.3      $1,253.9      $1,186.2
    Operating income                      129.6         108.8         329.1         272.0
    Depreciation and amortization          88.8          89.1         272.0         269.1
    Interest expense                       18.2          19.3          54.5          55.5
    Interest income                         0.3           0.1           0.3           0.7
    Capital expenditures                   59.4         120.9         225.7         338.3
    Total assets (a)                                                2,545.5       2,651.2

GTE FUNDING:
    Operating loss                     $   (0.9)     $   (1.1)     $   (8.3)     $   (2.3)
    Interest expense                       10.6          25.0          46.3          80.6
    Interest income                        11.5          26.1          54.6          82.9
    Total assets (a) (b)                                            1,043.2       1,655.8

       CONSOLIDATED REVENUES           $  412.8      $  407.3      $1,253.9      $1,186.2
       CONSOLIDATED OPERATING INCOME      128.7         107.7         320.8         269.7
       CONSOLIDATED ASSETS (a)                                      3,581.8       3,927.4
</TABLE>

(a) Represents balance sheets as of September 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 as of 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. 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. At annual meetings held in May 1999,
the shareholders of each company approved the merger.


                                       7
<PAGE>   9


                     GTE FLORIDA INCORPORATED AND SUBSIDIARY

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

RESULTS OF OPERATIONS

Net income for the three months ended September 30, 1999 increased $13.7
million, or 25%, compared to the same period in 1998, as a result of an increase
in revenues and sales and a decrease in operating expenses. Net income for the
nine months ended September 30, 1999 increased $37.6 million, or 29%, over the
prior year primarily due to an increase in network access services revenues,
partially offset by increased selling, general and administrative 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
                                 September 30,
                               -----------------              Percent
                                1999       1998     Increase  Change
                               ------     ------    --------  -------
<S>                            <C>        <C>       <C>       <C>
Local services                 $182.3     $181.1     $  1.2     1%
Network access services         143.8      139.9        3.9     3%
Other services and sales         86.7       86.3        0.4     --
                               ------     ------     ------

  Total revenues and sales     $412.8     $407.3     $  5.5     1%
                               ======     ======     ======
</TABLE>


<TABLE>
<CAPTION>
                                 Nine Months Ended
                                   September 30,
                               ---------------------                 Percent
                                 1999         1998       Increase    Change
                               --------     --------     --------    -------
<S>                            <C>          <C>          <C>         <C>
Local services                 $  553.7     $  545.1     $    8.6      2%
Network access services           445.5        392.4         53.1     14%
Other services and sales          254.7        248.7          6.0      2%
                               --------     --------     --------

  Total revenues and sales     $1,253.9     $1,186.2     $   67.7      6%
                               ========     ========     ========
</TABLE>

Local Services Revenues

Increases in local services revenues for the three and nine months ended
September 30, 1999 are primarily the result of a 3% increase in access lines
over the same periods in 1998, generating additional revenues of $1.8 million
and $9.1 million, respectively, from basic local services. Partially offsetting
the year-to-date increase was a decline in installation and other non-recurring
charges paid by customers of $1.5 million.

Network Access Services Revenues

Minutes of use increased 2% and 6%, generating additional revenues of $1.7
million and $12.9 million, respectively, for the three and nine months ended
September 30, 1999, compared to the same periods in 1998. Special access
revenues grew by $12.4 million and $29.1 million, respectively, as a result of
greater demand for increased bandwidth services by high-capacity users. End-user
surcharges increased $3.6 million and $10.0 million, respectively, primarily as
a result of implementation of the local number portability (LNP) surcharge (for
further information see "INTERSTATE REGULATORY DEVELOPMENTS - Number
Portability"). Additionally, year-to-date revenues increased $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 nine month increases are decreases of $10.1 million and $27.8
million, respectively, reflecting the impact of mandated interstate and
intrastate access price changes.


                                       8
<PAGE>   10
                     GTE FLORIDA INCORPORATED AND SUBSIDIARY

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

Other Services and Sales Revenues

Other services and sales revenues increased for the nine months ended September
30, 1999 primarily due to increases in nonregulated service revenues and
equipment sales of $15.1 million, and wireless products and services revenues of
$5.5 million. These increases are partially offset by a $12.8 million decline in
toll services revenues, reflecting the continuing impacts of intraLATA (local
access transport area) toll competition.


<TABLE>
<CAPTION>
OPERATING COSTS AND EXPENSES
(Dollars in Millions)                    Three Months Ended
                                           September 30,
                                         ------------------               Percent
                                          1999       1998     Decrease    Change
                                         ------     -------   --------    -------
<S>                                      <C>        <C>       <C>         <C>
Cost of services and sales               $141.1     $145.7     $ (4.6)      (3)%
Selling, general and administrative        54.2       64.8      (10.6)     (16)%
Depreciation and amortization              88.8       89.1       (0.3)      --
                                         ------     ------     ------

  Total operating costs and expenses     $284.1     $299.6     $(15.5)      (5)%
                                         ======     ======     ======
</TABLE>


<TABLE>
<CAPTION>
                                         Nine Months Ended
                                            September 30,
                                         -----------------     Increase   Percent
                                          1999       1998     (Decrease)  Change
                                         ------     ------    ---------   -------
<S>                                      <C>        <C>       <C>         <C>
Cost of services and sales               $454.0     $455.7     $ (1.7)     --
Selling, general and administrative       207.1      191.7       15.4      8%
Depreciation and amortization             272.0      269.1        2.9      1%
                                         ------     ------     ------

  Total operating costs and expenses     $933.1     $916.5     $ 16.6      2%
                                         ======     ======     ======
</TABLE>

Total operating costs and expenses decreased for the three months and increased
for the nine months ended September 30, 1999, respectively, compared to the same
periods in 1998. Contributing to the variances were cost decreases due to the
employee-reduction program initiated earlier this year and the resulting
settlement of pension obligations, which allowed the Company to immediately
recognize pension plan gains that have accumulated in excess of the employee
obligations. These favorable pension settlement gains were $32.9 million and
$37.9 million in the third quarter and first nine months of 1999, respectively.
The year-to-date cost reduction is partially offset by a one-time special charge
of $16.2 million associated with employee separation programs completed in the
first quarter of 1999. Also, offsetting the decreases in expenses were favorable
adjustments of certain employee benefits and other liabilities that were
recorded in 1998, which reduced 1998 expenses by $1.1 million and $11.4 million,
respectively. Access charges incurred to terminate intraLATA toll calls outside
the Company's territory increased $10.4 million in the second quarter of 1999,
further contributing to the increase in year-to-date costs. The decreases are
further offset by higher costs of $7.6 million and $10.6 million, respectively,
associated with increased telecommunications equipment sales volumes. Higher
depreciation charges associated with the investment in additional network
facilities resulting from increased demand for switched access lines contributed
$2.8 million to the increase in depreciation expense for the nine month period
ended September 30, 1999.


OTHER INCOME STATEMENT ITEMS

Interest-net decreased $1.1 million or 6% and $6.6 million or 13%, respectively,
for the three and nine months ended September 30, 1999, compared to the same
periods in 1998, primarily due to a decrease in interest expense resulting from
lower average short-term debt balances.


                                       9
<PAGE>   11
                     GTE FLORIDA INCORPORATED AND SUBSIDIARY

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


Income taxes increased $8.4 million or 24% for the three months and $23.4
million or 28% for the nine months ended September 30, 1999, compared to the
same periods in 1998. These increases are primarily due to corresponding
increases in pretax income.


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 $2.0 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.

During the first nine months of 1999 net cash from operations was $438.7 million
compared to $612.0 million for the same period in 1998. The decrease in net 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 nine months of 1999 were
$225.7 million compared to $338.3 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.

Net cash used in financing activities was $246.1 million during the first nine
months of 1999 compared to $266.9 million for the same period in 1998. This
included dividend payments of $125.8 million in the first nine months of 1999
compared to $147.7 million for the same period in 1998. Short-term financing,
including the net change in affiliate notes, decreased $120.3 million for the
first nine months of 1999 compared to $278.9 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 $125.0 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.


INTERSTATE REGULATORY DEVELOPMENTS

During the third 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 third 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


                                       10
<PAGE>   12


                     GTE FLORIDA INCORPORATED AND SUBSIDIARY

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

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 their 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
local exchange carriers (CLECs). This latter ruling has led to a proceeding
before the FCC concerning what elements had to be offered and under what
conditions.

In September 1999, the FCC voted on the matter and the order was issued on
November 5, 1999. The FCC reaffirmed that incumbents must provide unbundled
access to five of the original seven network elements. ILECs are no longer
required to provide unbundled operator services, including directory assistance.
In addition, in certain circumstances, local and tandem switching need not be
unbundled. The FCC also found that state commissions can require ILECs to
unbundle additional elements as long as they are consistent with the
requirements of the Telecommunications Act and the national policy framework
instituted in the FCC's order. Furthermore, the order precludes states from
removing network elements from the FCC's list of unbundling obligations.

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) its methodology for setting wholesale
discounts, (3) the "proxy rates" it set for interconnection, UNEs, and wholesale
discounts, (4) whether ILECs should be required to combine UNEs that are not
already combined, and (5) whether the FCC can require ILECs to provide "superior
quality" to competitors than what the ILEC provides to itself. Parties to this
action have filed briefs and participated in oral arguments on September 17,
1999. A court decision is expected during the first quarter of 2000.

Universal Service

GTE is active before both state and federal regulators advocating development
and implementation of measures that will meet the requirements of the universal
service provisions of the Telecommunications Act. 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. On October 22, 1999, the FCC adopted an order selecting the cost inputs
for the federal universal service cost model. Due to unforeseen delays, the FCC
has now moved the implementation date of the new universal service mechanism for
non-rural 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.

In July 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. The FCC filed a Motion For Stay of the Fifth Circuit's
mandate so that additional time could be granted to address the implementation
issues associated with changing its existing methods of assessment and carrier
recovery of universal service contributions. GTE and several other parties also
asked the Fifth Circuit for rehearing on several issues. However, in September
1999 the Fifth Circuit denied all motions for stay and/or rehearing, and
established November 1, 1999 as the effective date for the original decision.

On October 8, 1999, the FCC released two orders in response to the Fifth Circuit
decision. One order permits ILECs to continue to recover their universal service
contributions from access charges or to establish end-user charges. The second
order changed the contribution basis for school/library funding to eliminate
calculations based upon intrastate revenues.

On November 4, 1999, the FCC released an order dealing with implementation of
the new FCC federal high cost support mechanism for non-rural ILECs. The
effective date for the new federal universal service plan is January 1, 2000.
This plan will take contributions to the federal fund and distribute them to
states with higher than average costs. The role of state commissions is to
ensure reasonable comparability within the borders of a state. Federal high cost
support will be calculated by comparing the nationwide average cost with each
state's average cost per line, and providing federal support for only states
that exceed 135% of the nationwide average. To guard against rate shock, the FCC
also adopted a "hold


                                       11
<PAGE>   13


                     GTE FLORIDA INCORPORATED AND SUBSIDIARY

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

harmless" approach so that the amount of support provided to each non-rural
carrier under the new plan will not be less than the amount provided today.

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 factor
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 the Company's 1999 Annual Filing. The
total annual financial impact of the reduction was $113 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. 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. In September 1999, the FCC put the coalition's
proposal out for public comment.

In August 1999, the FCC released an order pertaining to access reform and
pricing flexibility. The order grants price cap LECs immediate flexibility under
certain circumstances to deaverage certain access services and permits the
introduction of new services on a streamlined basis, without prior FCC approval.

Advanced Telecommunications Services

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 March 1999, the FCC released an order adopting a number of new collocation
rules designed to make competitive entry easier and less costly. These rules
specify how ILECs will manage such items as alternate collocation arrangements,
security, space preparation cost 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). An order from the FCC on line sharing is expected in the fourth quarter
of 1999.

Number Portability

In December 1998, the FCC released an order establishing cost recovery rules for
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


                                       12
<PAGE>   14


                     GTE FLORIDA INCORPORATED AND SUBSIDIARY

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

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

ILECs 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 AT&T has appealed that decision. Arguments took
place November 1, 1999 before the Ninth Circuit Court.

In October 1999, GTE's Internetworking unit filed an antitrust lawsuit
contending that cable TV providers' refusal to provide ISPs with "open access"
to cable modem platforms is a violation of federal antitrust law. The lawsuit
filed in the U.S. District Court in Pittsburgh, names Tele-Communications, Inc.,
(now a unit of AT&T Corp.), Comcast Corp., and Excite@Home and seeks an
injunction to require open access and damages.

GTE's interconnection contracts with CLECs specify that parties compensate each
other for the exchange of local traffic, defined as traffic that is originated
by an end user of one party and terminating to the end user of the other party
within GTE's current local serving area. It is GTE's position that ISP traffic
does not satisfy the definition of local traffic, and that no compensation
should be paid to CLECs that switch this traffic to their ISP customers. In a
recent ruling, the FCC has clarified that ISP traffic is largely interstate,
does not "terminate" in GTE's local serving area, and based on an end-to-end
analysis of the call, is not local traffic. Consistent with this recent ruling,
GTE has been disputing and litigating bills from CLECs on these calls.


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 further 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 II, cost studies and prices will be filed. Hearings for Phase 1 are
scheduled in December 1999. The FPSC is also reviewing 1998 cost studies in
order to determine deaveraged UNE rates on an interim basis in order to comply
with the FCC's mandate to have UNEs deaveraged by May 2000.

In July 1999, the FPSC issued an order requiring the Company to pay Intermedia
Communications, Inc. (ICI) local reciprocal compensation for ISP traffic. The
financial statements of the Company already reflect the impact of this
requirement. GTE filed an action in August 1999 challenging the order in U.S.
District Court and also appealed to the Supreme Court of Florida. GTE also filed
a petition with the FPSC in September 1999 to clarify which rate element should
be used as the basis for paying compensation.

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.


                                       13
<PAGE>   15


                     GTE FLORIDA INCORPORATED AND SUBSIDIARY

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

OTHER DEVELOPMENTS

Proposed Merger with Bell Atlantic Corporation

On July 27, 1998, GTE and Bell Atlantic entered into a merger agreement
providing for the combination of the two companies. Under the terms of the
agreement, which was unanimously approved by the boards of directors of both
companies, GTE shareholders will receive 1.22 shares of Bell Atlantic stock for
each GTE share 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. 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. At annual meetings held in May 1999,
the shareholders of each company approved the merger.

Both companies are working diligently to complete the merger and are targeting
completion of the merger around the end of the first quarter of 2000. However,
Bell Atlantic and GTE must obtain the approval of a variety of state and federal
regulatory agencies and, given the inherent uncertainties of the regulatory
process, the closing of the merger may be delayed.


YEAR 2000 CONVERSION

State of Readiness

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. All other GTE business units are substantially complete in Year 2000
conversion and testing and are expected to be 100% complete by the end of
November 1999.

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

Cost to Address Year 2000 Issues

The estimated total multi-year cost of GTE's Year 2000 Program remains unchanged
and is not expected to exceed $400 million. Through September 30, 1999,
expenditures totaled $358 million. The current estimate for the cost of
remediation for the Company is approximately $20.0 million. Through September
30, 1999, expenditures totaled $13.8 million. Year 2000 remediation costs are
expensed in the year incurred. Approximately 68% of GTE's program effort
involves U.S. domestic operations. GTE's majority-owned subsidiaries have not
elected to replace or accelerate the planned replacement of any systems due to
the Year 2000 issue. 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 500 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 arise, the "most reasonably likely worse case scenario" would be any
disruptions resulting from


                                       14
<PAGE>   16


                     GTE FLORIDA INCORPORATED AND SUBSIDIARY

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

interoperability issues with other international carriers that have not
completed their Year 2000 efforts or other circumstances outside of GTE's
control.

Contingency Planning

GTE continues to enhance its normal business continuity planning to address
potential Year 2000 interruptions. GTE's disaster preparedness recovery plans
include procedures and activities for a "multi-regional" Year 2000 contingency,
if it occurs. GTE has established a corporate Year 2000 communications watch
center that is now operational. Located in Dallas, Texas, the watch center will
remain operational (as required) through March 1, 2000. The initial versions of
our contingency plans were completed during the second quarter of 1999. These
contingency plans will be kept current through the millennium rollover, and are
being tested (as appropriate). As of September 30, 1999, 79% of the contingency
plans have completed testing, and the remaining plans are expected to complete
testing by the end of November 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.


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


                                       15
<PAGE>   17


                     GTE FLORIDA INCORPORATED AND SUBSIDIARY

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

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 the Company's market risks since December
31, 1998.


                                       16
<PAGE>   18


PART II.  OTHER INFORMATION

                     GTE FLORIDA INCORPORATED AND SUBSIDIARY


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 third quarter of
          1999.




                                       17
<PAGE>   19


                                    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.


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


Date:   November 10, 1999                       /s/ Stephen L. Shore
       -------------------------        -------------------------------------
                                                    Stephen L. Shore
                                                    Controller
                                           (Principal Accounting Officer)




                                       18
<PAGE>   20


                                  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>