SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 20, 1994
BELLSOUTH CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 1-8607 58-1533433
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
1155 Peachtree Street, N. E., Atlanta, Georgia 30309-3610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 249-2000
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Item 5. Other Events
Boosted by continued strong customer growth in its core network
services and wireless businesses, BellSouth Corporation reported
the best third quarter in its history. Earnings per share (EPS) of
$1.01 increased from a reported 88 cents in the same quarter of
1993, marking the third time in a row BellSouth has had record EPS
for a calendar quarter.
Last year's third quarter EPS reflected unusual charges totaling 9
cents per share for the nine-month impact of the higher corporate
income tax rate and debt refinancing. Excluding the unusual
charges, third quarter 1993 EPS on an operating basis was 97 cents.
Net income was $499.5 million in the third quarter of 1994,
compared with $434.6 million in the same quarter of 1993 ($484.5
million before the unusual charges). Revenues of $4.20 billion
were up 4.6 percent compared with the third quarter a year earlier.
Quarterly operating expenses increased 3.2 percent.
Buoyed by a solid regional economy and strong demand from consumers
for second telephone lines, BellSouth's access line growth
continued its brisk 1994 pace in the third quarter. The largest
base of customer access lines in the country grew to 19,993,200,
increasing by a third quarter record of 246,800. This is an annual
growth rate of 4.4 percent. So far in 1994, BellSouth has
connected nearly 5,000 net new customers per business day to its
wireline telecommunications network.
BellSouth's cellular business also continued its remarkable growth,
both in the U.S. and abroad. Based on BellSouth's ownership
percentages, U.S. cellular customers increased to 1,929,800, up
546,100, or 39 percent, since last September 30. Domestic net
income was $61.3 million.
In overseas markets, BellSouth's cellular customers increased to
309,100, 113 percent more than a year earlier. The third quarter
of 1994 also saw the company's first wholly owned long distance
operation, BellSouth Chile, inaugurate domestic and international
service in that country. Already in the fourth quarter the company
has announced a memorandum of understanding with China Unicom that
would make BellSouth one of the major and earliest partners in
building cellular, wireless and long distance networks in the
world's largest country.
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BELLSOUTH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Millions, Except Per Share Amounts)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1994 1993 1994 1993
Operating Revenues:
Network and related services
Local service $1,728.2 $1,669.9 $ 5,117.6 $ 4,912.9
Interstate access 770.8 759.8 2,338.2 2,227.7
Intrastate access 226.6 222.6 687.1 655.8
Toll 298.4 305.7 899.0 910.8
Directory advertising
and publishing 364.3 364.6 1,105.4 1,088.9
Wireless communications 528.7 397.5 1,477.0 1,129.1
Other services 280.7 294.8 825.6 830.3
Total Operating Revenues 4,197.7 4,014.9 12,449.9 11,755.5
Operating Expenses:
Cost of services and products 1,521.8 1,445.2 4,506.4 4,403.5
Depreciation and amortization 814.1 789.0 2,413.2 2,327.5
Selling, general
and administrative 868.1 871.6 2,522.8 2,454.9
Total Operating Expenses 3,204.0 3,105.8 9,442.4 9,185.9
Operating Income 993.7 909.1 3,007.5 2,569.6
Interest Expense 177.3 159.8 496.2 520.6
Other Income (Expense), net (22.9) 7.9 24.9 33.6
Income before Income Taxes,
Extraordinary Loss and
Cumulative Effect of Change
in Accounting Principle 793.5 757.2 2,536.2 2,082.6
Provision for Income Taxes 294.0 314.8 934.9 795.9
Income Before Extraordinary
Loss and Cumulative Effect
of Change in Accounting
Principle 499.5 442.4 1,601.3 1,286.7
Extraordinary Loss on Early
Extinguishment of Debt,
net of tax - (7.8) - (63.2)
Cumulative Effect of Change
in Accounting Principle,
net of tax - - - (67.4)
Net Income $ 499.5 $ 434.6 $ 1,601.3 $1,156.1
Weighted Average Common
Shares Outstanding 496.7 496.3 496.6 495.9
Dividends Declared
Per Common Share $ .69 $ .69 $ 2.07 $ 2.07
Earnings Per Share:
Income Before Extraordinary
Loss and Cumulative Effect of
Change in Accounting Principle $ 1.01 $ .89 $ 3.22 $ 2.59
Extraordinary Loss on Early
Extinguishment of Debt,
net of tax - (.01) - (.12)
Cumulative Effect of Change
in Accounting Principle,
net of tax - - - (.14)
Net Income $ 1.01 $ .88 $ 3.22 $ 2.33
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BELLSOUTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
September 30, December 31,
1994 1993
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 680.3 $ 501.5
Temporary cash investments 69.3 49.0
Accounts receivable, net of allowance for
uncollectibles of $153.2 and $149.6 2,936.1 2,985.2
Material and supplies 445.8 418.7
Other current assets 335.6 364.6
4,467.1 4,319.0
Investments and Advances 2,511.6 2,039.4
Property, Plant and Equipment, net 25,030.6 24,667.8
Deferred Charges and Other Assets 522.4 512.2
Intangible Assets, net 1,420.0 1,334.9
Total Assets $33,951.7 $32,873.3
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Debt maturing within one year $ 1,916.7 $ 1,838.6
Accounts payable 1,287.5 979.0
Other current liabilities 2,675.9 2,943.8
5,880.1 5,761.4
Long-Term Debt 7,466.4 7,380.7
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 3,457.3 3,465.3
Unamortized investment tax credits 463.5 515.9
Other liabilities and deferred credits 2,551.1 2,255.8
6,471.9 6,237.0
Shareholders' Equity:
Common stock, $1 par value 502.5 501.6
Paid-in capital 8,053.9 8,009.4
Retained earnings 6,502.2 5,919.3
Shares held in trust (336.2) (292.6)
Guarantee of ESOP debt (589.1) (643.5)
14,133.3 13,494.2
Total Liabilities and Shareholders' Equity $33,951.7 $32,873.3
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PRELIMINARY (UNAUDITED)
October 20, 1994
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
Three Months Ended Three Months Ended
September 30, 1994 September 30, 1993
Return to equity 14.1% 12.3%
Return to average total capital 10.7% 9.6%
Weighted average common shares
and equivalent shares
outstanding (millions) 496.7 496.3
Earnings per share $ 1.01 $ .88
Dividend per share $ .69 $ .69
Property Additions (millions) $1,091.4 $ 909.1
At September 30,
1994 1993
Common shares outstanding (millions) 496.2 496.0
Debt ratio 39.5% 39.2%
Total Employees 94,307 96,830
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PRELIMINARY (UNAUDITED)
October 20, 1994
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
Nine Months Ended Nine Months Ended
September 30, 1994 September 30, 1993
Return to equity 15.3% 11.0%
Return to average total capital 11.4% 9.0%
Weighted average common shares
and equivalent shares
outstanding (millions) 496.6 495.9
Earnings per share $ 3.22 $ 2.33
Dividend per share $ 2.07 $ 2.07
Property Additions (millions) $2,704.3 $ 2,611.3
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BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
(In Millions)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1994 1993 1994 1993
Operating Revenues:
Local service $1,728.2 $1,669.9 $5,117.6 $4,912.9
Interstate access 770.8 759.8 2,338.2 2,227.7
Intrastate access 226.6 222.6 687.1 655.8
Toll 298.4 305.7 899.0 910.8
Other 486.1 489.5 1,435.9 1,398.3
Total Operating Revenues 3,510.1 3,447.5 10,477.8 10,105.5
Operating Expenses:
Cost of services
and products 1,341.5 1,286.4 3,951.1 3,909.4
Depreciation and amortization 735.5 722.4 2,192.9 2,138.0
Selling, general
and administrative 581.7 607.6 1,682.8 1,717.5
Total Operating Expenses 2,658.7 2,616.4 7,826.8 7,764.9
Operating Income 851.4 831.1 2,651.0 2,340.6
Interest Expense 146.2 128.1 408.0 425.0
Other Income (Expense), net 3.8 9.7 13.1 13.3
Income Before Income Taxes,
Extraordinary Loss and
Cumulative Effect of Change
in Accounting Principle 709.0 712.7 2,256.1 1,928.9
Provision for Income Taxes 247.9 271.7 824.1 689.7
Income Before Extraordinary
Loss and Cumulative Effect
of Change in Accounting
Principle 461.1 441.0 1,432.0 1,239.2
Extraordinary Loss on Early
Extinguishment of Debt,
net of tax _ (7.8) - (63.2)
Cumulative Effect of Change
in Accounting Principle,
net of tax - - - (64.8)
Net Income $ 461.1 $ 433.2 $1,432.0 $1,111.2
Retained Earnings:
At beginning of period $3,326.1 $3,853.7 $3,180.0 $3,967.0
Net Income 461.1 433.2 1,432.0 1,111.2
Dividends declared (365.8) (366.9) (1,190.6) (1,158.2)
Other adjustments - (9.7) - (9.7)
At end of period $3,421.4 $3,910.3 $3,421.4 $3,910.3
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PRELIMINARY (UNAUDITED)
October 20, 1994
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
Three Months Ended Three Months Ended
September 30, 1994 September 30, 1993
Property Additions (millions) $ 954.0 $ 758.4
Interest Charged Construction $ 5.2 $ 6.5
(millions)
Access Minutes of Use (millions):
Interstate 14,482.1 13,331.8
Intrastate 4,293.2 3,887.0
IntraLATA toll messages (millions) 387.2 380.7
At September 30,
1994 1993
Debt ratio 41.1% 39.6%
Telephone Employees 79,566 82,717
Network access lines in service
(thousands) 19,993 19,154
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PRELIMINARY (UNAUDITED)
October 20, 1994
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
Nine Months Ended Nine Months Ended
September 30, 1994 September 30, 1993
Property Additions (millions) $ 2,431.6 $ 2,247.9
Interest Charged Construction $ 14.0 $ 18.7
(millions)
Access Minutes of Use (millions):
Interstate 42,955.2 39,753.2
Intrastate 12,473.8 11,281.8
IntraLATA toll messages (millions) 1,171.0 1,136.9
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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.
BELLSOUTH CORPORATION
By: /s/Ronald M. Dykes
Ronald M. Dykes
Vice President and Comptroller
October 31, 1994
