Your description suggests some of the phone numbers have been input into the Excel workbook with the hyphens, whilst others have not. Consequently, you have a mix of numeric and non-numeric data. That, in turn causes the mailmerge to read the non-numeric data as formulae (i.e. the second part of the phone # gets subtracted from the first part). The solution is to remove all the hyphens in Excel.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]

I've already used a formula then pasted just the values to remove all hyphens from the phone numbers, as previously stated, all the cells show the correct data in 1234567890 format.... it just doesn't merge correctly.