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: July 21, 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
BellSouth Corporation reported that growth in the company's
network services and wireless businesses, coupled with continued
cost containment, boosted second quarter earnings per share (EPS)
37 percent, to $1.04 from a reported 76 cents a year earlier.
Expenses in BellSouth's core telephone operations were essentially
flat, even though access line growth set a second quarter record.
The quarter was the first time in the company's history
that second quarter earnings topped $1.00 per share, and was
BellSouth's fourth quarter in a row of strong operating results.
Last year, the company reported second quarter EPS of 76 cents.
This included a one-time charge for debt refinancing of 11 cents.
Excluding the one-time charge in 1993, second quarter EPS on an
operating basis increased 20 percent in 1994.
Net income was $516.5 million in the second quarter of
1994, compared with $377.7 million in the same quarter of 1993
($433.1 million before the one-time debt refinancing charge).
Revenues of $4.13 billion were up 5.7 percent compared with the
second quarter a year earlier. Quarterly operating expenses
increased just 2.5 percent overall, and were essentially flat at
BellSouth Telecommunications.
BellSouth had solid growth in volumes in the second
quarter, including an increase of 133,600 access lines, best ever
for the April-May-June period, and 78 percent higher than the
74,900 increase in the second quarter of 1993. This means the
company grew the largest base of customer access lines in the
country at an annual rate of 4.2 percent, fueled by a healthy
Southeastern economy and marketing of second residential telephone
lines. Total long distance access minutes were up 8.1 percent
compared with the second quarter of 1993. A year ago, this key
volume measure increased 6.6 percent.
During the second quarter, BellSouth Telecommunications
sold its one millionth MemoryCall(R) service voice mailbox, and
sales of this value-priced telephone answering feature are at a
record pace.
BellSouth's cellular businesses continued their healthy
growth around the world, exceeding the 2 million total customer
milestone, based on BellSouth's ownership percentages. U.S.
cellular customers increased to 1,803,800 in the year since June
30, 1993, up 513,200, or 40 percent. Domestic cellular's
contribution of $68.2 million to net income was 78 percent higher
than in the second quarter of 1993.
In overseas markets, BellSouth's cellular customers
increased to 264,600 in the second quarter of 1994, 128 percent
more than a year ago. The second quarter of 1994 also saw
BellSouth's Optus consortium in Australia continue to win a
significant share of the long distance market through consumer
balloting.
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BELLSOUTH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Millions, Except Per Share Amounts)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1994 1993 1994 1993
Operating Revenues:
Network and Related Services
Local service $1,709.7 $1,624.6 $3,389.4 $3,243.0
Interstate access 765.0 718.5 1,567.4 1,467.9
Intrastate access 230.4 217.7 460.5 433.2
Toll 300.4 300.0 600.6 605.1
Directory advertising
and publishing 396.3 394.4 741.1 724.3
Wireless communications 494.4 379.0 948.3 731.6
Other services 231.7 272.7 544.9 535.5
Total Operating Revenues 4,127.9 3,906.9 8,252.2 7,740.6
Operating Expenses:
Cost of services and products 1,492.3 1,467.5 2,984.6 2,958.3
Depreciation and amortization 800.7 770.9 1,599.1 1,538.5
Selling, general
and administrative 833.3 812.1 1,654.7 1,583.3
Total Operating Expenses 3,126.3 3,050.5 6,238.4 6,080.1
Operating Income 1,001.6 856.4 2,013.8 1,660.5
Interest Expense 154.0 180.8 318.9 360.8
Other Income (Expense), net (11.7) 16.8 47.8 25.7
Income before Income Taxes,
Extraordinary Loss and
Cumulative Effect of Change
in Accounting Principle 835.9 692.4 1,742.7 1,325.4
Provision for Income Taxes 319.4 259.3 640.9 481.1
Income Before Extraordinary
Loss and Cumulative Effect
of Change in Accounting
Principle 516.5 433.1 1,101.8 844.3
Extraordinary Loss on Early
Extinguishment of Debt,
net of tax - (55.4) - (55.4)
Cumulative Effect of Change
in Accounting Principle,
net of tax - - - (67.4)
Net Income $ 516.5 $ 377.7 $1,101.8 $ 721.5
Weighted Average Common
Shares Outstanding 496.6 496.1 496.6 495.8
Dividends Declared
Per Common Share $ .69 $ .69 $ 1.38 $ 1.38
Earnings Per Share:
Income Before Extraordinary
Loss and Cumulative Effect of
Change in Accounting Principle $ 1.04 $ .87 $ 2.22 $ 1.70
Extraordinary Loss on Early
Extinguishment of Debt,
net of tax - (.11) - (.11)
Cumulative Effect of Change
in Accounting Principle,
net of tax - - - (.14)
Net Income $ 1.04 $ .76 $ 2.22 $ 1.45
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BELLSOUTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
June 30, December 31,
1994 1993
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 777.6 $ 501.5
Temporary cash investments 38.7 49.0
Accounts receivable, net of allowance for
uncollectibles of $145.2 and $149.6 2,837.2 2,985.2
Material and supplies 389.1 418.7
Other current assets 357.1 364.6
4,399.7 4,319.0
Investments and Advances 2,427.6 2,039.4
Property, Plant and Equipment, net 24,747.6 24,667.8
Deferred Charges and Other Assets 569.4 512.2
Intangible Assets, net 1,319.0 1,334.9
Total Assets $33,463.3 $32,873.3
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Debt maturing within one year $ 1,902.5 $ 1,838.6
Accounts payable 1,115.7 979.0
Other current liabilities 2,626.2 2,943.8
5,644.4 5,761.4
Long-Term Debt 7,488.5 7,380.7
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 3,479.6 3,465.3
Unamortized investment tax credits 481.0 515.9
Other liabilities and deferred credits 2,442.4 2,255.8
6,403.0 6,237.0
Shareholders' Equity:
Common stock, $1 par value 502.5 501.6
Paid-in capital 8,028.9 8,009.4
Retained earnings 6,342.3 5,919.3
Shares held in trust (336.2) (292.6)
Guarantee of ESOP debt (610.1) (643.5)
13,927.4 13,494.2
Total Liabilities and Shareholders' Equity $33,463.3 $32,873.3
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PRELIMINARY (UNAUDITED)
July 21, 1994
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
Three Months Ended Three Months Ended
June 30, 1994 June 30, 1993
Return to equity 14.8% 10.6%
Return to average total capital 10.9% 8.9%
Weighted average common shares
and equivalent shares
outstanding (millions) 496.6 496.1
Earnings per share $ 1.04 $ .76
Dividend per share $ .69 $ .69
Property Additions (millions) $ 873.5 $ 907.0
At June 30,
1994 1993
Common shares outstanding (millions) 496.2 495.8
Debt ratio 39.9% 39.4%
Total Employees 94,140 97,823
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PRELIMINARY (UNAUDITED)
July 21, 1994
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
Six Months Ended Six Months Ended
June 30, 1994 June 30, 1993
Return to equity 15.9% 10.2%
Return to average total capital 11.7% 8.6%
Weighted average common shares
and equivalent shares
outstanding (millions) 496.6 495.8
Earnings per share $ 2.22 $ 1.45
Dividend per share $ 1.38 $ 1.38
Property Additions (millions) $ 1,612.9 $ 1,702.2
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BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
(In Millions)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1994 1993 1994 1993
Operating Revenues:
Local service $1,709.7 $1,624.6 $3,389.4 $3,243.0
Interstate access 765.0 718.5 1,567.4 1,467.9
Intrastate access 230.4 217.7 460.5 433.2
Toll 300.4 300.0 600.6 605.1
Other 436.4 460.2 949.8 908.8
Total Operating Revenues 3,441.9 3,321.0 6,967.7 6,658.0
Operating Expenses:
Cost of services
and products 1,293.9 1,283.6 2,609.6 2,623.0
Depreciation and amortization 728.5 709.1 1,457.4 1,415.6
Selling, general
and administrative 539.2 559.3 1,101.1 1,109.9
Total Operating Expenses 2,561.6 2,552.0 5,168.1 5,148.5
Operating Income 880.3 769.0 1,799.6 1,509.5
Interest Expense 126.3 149.4 261.8 296.9
Other Income (Expense), net 5.3 6.4 9.3 3.6
Income Before Income Taxes,
Extraordinary Loss and
Cumulative Effect of Change
in Accounting Principle 759.3 626.0 1,547.1 1,216.2
Provision for Income Taxes 284.5 215.7 576.2 418.0
Income Before Extraordinary
Loss and Cumulative Effect
of Change in Accounting
Principle 474.8 410.3 970.9 798.2
Extraordinary Loss on Early
Extinguishment of Debt,
net of tax - (55.4) - (55.4)
Cumulative Effect of Change
in Accounting Principle,
net of tax - - - (64.8)
Net Income $ 474.8 $ 354.9 $ 970.9 $ 678.0
Retained Earnings:
At beginning of period $3,289.0 $3,905.8 $3,180.0 $3,967.0
Add: Net Income 474.8 354.9 970.9 678.0
Deduct: Dividends declared 437.7 407.0 824.8 791.3
At end of period $3,326.1 $3,853.7 $3,326.1 $3,853.7
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PRELIMINARY (UNAUDITED)
July 21, 1994
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
Three Months Ended Three Months Ended
June 30, 1994 June 30, 1993
Property Additions (millions) $ 808.0 $ 807.1
Interest Charged Construction $ 4.8 $ 6.8
(millions)
Access Minutes of Use (millions):
Interstate 14,422.3 13,404.5
Intrastate 4,175.0 3,798.8
IntraLATA toll messages (millions) 397.2 388.9
At June 30,
1994 1993
Debt ratio 41.4% 40.0%
Telephone Employees 80,111 83,155
Network access lines in service
(thousands) 19,746 18,957
<PAGE>
PRELIMINARY (UNAUDITED)
July 21, 1994
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
Six Months Ended Six Months Ended
June 30, 1994 June 30, 1993
Property Additions (millions) $ 1,477.6 $ 1,489.5
Interest Charged Construction $ 8.8 $ 12.2
(millions)
Access Minutes of Use (millions):
Interstate 28,473.1 26,421.4
Intrastate 8,180.6 7,394.8
IntraLATA toll messages (millions) 783.8 756.2
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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
August 1, 1994
