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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 20, 1995
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
Item 5. Other Events
In the second quarter of 1995, BellSouth Corporation
reported a loss of $4.38 per share. Second quarter results
reflect an extraordinary charge of $5.47 per share related
to BellSouth's discontinuance of Statement of Financial
Accounting Standards No. 71. Reported results also reflect
an extraordinary charge of $.03 per share for early
extinguishment of debt.
Earnings per share (EPS) before extraordinary charges were
$1.12, an increase of 7.7 percent compared with the three
months ended June 30, 1994.
BellSouth also said, for the quarter;
Revenues were $4.39 billion, a 6.4 percent increase
compared with the second quarter of 1994;
Consolidated operating expenses increased 5.4 percent,
due primarily to sustained expansion in BellSouth's wireless
operations;
Income before extraordinary charges was $556.9 million,
up 7.8 percent vs. $516.5 million;
Net income was a loss of $2.18 billion, reflecting the
extraordinary charges, which totaled $2.73 billion.
BellSouth's targeted marketing initiatives have been
successful in generating demand for addition phone lines in
the home. People use second lines for fax machines,
computer modems, children's phones and work-at-home needs.
With nearly 1.2 million second residential lines now in
service, extra lines have accounted for four out of every 10
new access lines in homes since June 30, 1994.
The company said its overall increase of 176,300 access
lines was the highest for any April-May-June period in its
history, beating the second quarter record of 133,600 set
last year. The annual rate of access line growth was 4.8
percent in the second quarter, up from 4.2 percent in the
same quarter of 1994, and improving on the 4.6 percent pace
in the first quarter this year. BellSouth has more than
20,690,800 domestic access lines in service.
Growth in BellSouth's domestic and international cellular
businesses also continued during the second quarter.
BellSouth added 210,100 new worldwide cellular customers.
U.S. mobile phone customers increased 144,300 in the three-
month period, and totaled 2,464,300 at June 30, up 37
percent from a year earlier. International cellular
customers reached 481,000, an annual growth rate of 82
percent.
BELLSOUTH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Millions, Except Per Share Amounts)
For the Three For the Six
Months Months
Ended June 30, Ended June
30,
1995 1994 1995 1994
Operating Revenues:
Network and related services
Local service $1,793.4 $1,709.7 $3,561.7 $3,389.4
Interstate access 805.6 765.0 1,600.7 1,567.4
Intrastate access 227.0 230.4 453.1 460.5
Toll 265.7 300.4 546.6 600.6
Directory advertising and 389.0 396.3 742.2 741.1
publishing
Wireless communications 623.1 494.4 1,223.0 948.3
Other Services 286.5 231.7 561.7 544.9
Total Operating Revenues 4,390.3 4,127.9 8,689.0 8,252.2
Operating Expenses:
Cost of services and 1,484.8 1,492.3 2,987.9 2,984.6
products
Depreciation and 859.0 800.7 1,693.4 1,599.1
amortization
Selling, general and
administrative 950.1 833.3 1,816.0 1,654.7
Total Operating Expenses 3,293.9 3,126.3 6,497.3 6,238.4
Operating Income 1,096.4 1,001.6 2,191.7 2,013.8
Interest Expense 186.3 154.0 360.3 318.9
Other Income (Expense), net 9.0 (11.7) (1.7) 47.8
Income Before Income Taxes 919.1 835.9 1,829.7 1,742.7
Provision for Income Taxes 362.2 319.4 725.7 640.9
Income Before Extraordinary 556.9 516.5 1,104.0 1,101.8
Losses
Extraordinary Loss for
Discontinuance of
Statement of Financial (2,717.7) -- (2,717.7) --
Accounting
Standards No. 71, net of tax
Extraordinary Loss on Early
Extinguishment of Debt,
net of tax (15.8) -- (15.8) --
Net Income (Loss) $(2,176.6) $516.5 $(1,629.5) $1,101.8
BELLSOUTH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)
(In Millions, Except Per Share Amounts)
For the Three For the Six
Months Months
Ended June 30, Ended June
30,
1995 1994 1995 1994
Weighted Average Common
Shares Outstanding 496.9 496.6 496.7 496.6
Dividends Declared Per
Common Share $.69 $.69 $1.38 $1.38
Earnings Per Share:
Income Before Extraordinary
Losses $1.12 $1.04 $2.22 $ 2.22
Extraordinary Loss for
Discontinuance of
Statement of Financial (5.47) -- (5.47) --
Accounting Standards
No. 71, net of tax
Extraordinary Loss on Early
Extinguishment of Debt, (.03) -- (.03) --
net of tax
Earnings Per Share $(4.38) $1.04 $(3.28) $ 2.22
BELLSOUTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Millions, Except Per Share Amounts)
June 30, December 31,
1995 1994
ASSETS
Current Assets:
Cash and cash equivalents $511.3 $606.5
Temporary cash investments 84.9 50.8
Accounts receivable, net of allowance for 3,312.2 3,126.6
uncollectibles of $172.9 and $154.1
Material and supplies 425.7 490.0
Other current assets 512.1 453.9
4,846.2 4,727.8
Investments and Advances 2,682.7 2,531.5
Property, Plant and Equipment, net 20,448.7 25,162.4
Deferred Charges and Other Assets 397.2 535.4
Intangible Assets, net
1,483.4 1,439.9
Total Assets $29,858.2 $34,397.0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Debt maturing within one year $1,825.7 $2,018.7
Accounts payable 1,227.5 1,378.3
Other current liabilities 2,645.2 3,101.1
5,698.4 6,498.1
Long-Term Debt 7,917.3 7,435.1
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,875.8 3,646.9
Unamortized investment tax credits 394.6 443.3
Other liabilities and deferred credits 1,887.4 2,006.3
4,157.8 6,096.5
Shareholders' Equity:
Common stock, $1 par value 503.3 502.5
Paid-in capital 8,098.8 8,064.2
Retained earnings 4,411.7 6,721.1
Shares held in trust (374.5) (336.2)
Guarantee of ESOP debt (554.6) (584.3)
12,084.7 14,367.3
Total Liabilities and Shareholders' Equity $29,858.2 $34,397.0
PRELIMINARY (UNAUDITED)
July 20, 1995
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
Three Three
Months Ended Months Ended
June 30, 1995 June 30, 1994
Return to average common
equity (60.6%)(a) 14.8%
(annualized)
Return to average total
capital (33.0%)(b) 10.9%
(annualized)
Weighted average common 496.9 496.6
shares and equivalent
shares outstanding
(millions)
Earnings per share $(4.38)(c) $1.04
Dividends per share $.69 $.69
Property additions $952.7 $873.5
(millions)
At June 30,
1995 1994
Common shares outstanding 496.4 496.2
(millions)
Debt ratio 44.5% 39.9%
Total employees 90,784 94,140
(a) After adjusting net income and average common
equity for the impact of the extraordinary losses,
Return to average common equity was 15.0%.
(b) After adjusting net income and average total
capital for the impact of the extraordinary
losses, Return to average total capital was 11.3%.
(c) Excluding the extraordinary losses, Earnings per share were $1.12.
PRELIMINARY (UNAUDITED)
July 20, 1995
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
Six Six
Months Ended Months Ended
June 30, 1995 June 30, 1994
Return to average common
equity
(annualized) (22.6%)(a) 15.9%
Return to average total
capital
(annualized) (11.0%)(b) 11.7%
Weighted average common 496.7 496.6
shares and equivalent
shares outstanding
(millions)
Earnings per share $(3.28)(c) $2.22
Dividends per share $1.38 $1.38
Property additions $1,811.0 $1,612.9
(millions)
(a) After adjusting net income and average common equity for the
impact of the extraordinary losses, Return to average common
equity was 15.1%.
(b) After adjusting net income and average total capital for the
impact of the extraordinary losses, Return to average total
capital was 11.5%.
(c) Excluding the extraordinary losses, Earnings per share were
$2.22.
BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Millions)
For the Three For the
Months Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
Operating Revenues:
Network and related
services
Local service $1,793.4 $1,709.7 $3,561.7 $3,389.4
Interstate access 805.6 765.0 1,600.7 1,567.4
Intrastate access 227.0 230.4 453.1 460.5
Toll 265.7 300.4 546.6 600.6
Other 503.7 436.4 993.9 949.8
Total Operating 3,595.4 3,441.9 7,156.0 6,967.7
Revenues
Operating Expenses:
Cost of services and 1,270.4 1,293.9 2,557.7 2,609.6
products
Depreciation and 764.7 728.5 1,511.1 1,457.4
amortization
Selling, general and
administrative 580.2 539.2 1,116.2 1,101.1
Total Operating 2,615.3 2,561.6 5,185.0 5,168.1
Expenses
Operating Income 980.1 880.3 1,971.0 1,799.6
Interest Expense 149.9 126.3 290.3 261.8
Other Income, net 7.5 5.3 12.2 9.3
Income Before Income 837.7 759.3 1,692.9 1,547.1
Taxes
Provision for Income
Taxes 318.7 284.5 641.5 576.2
Income Before 519.0 474.8 1,051.4 970.9
Extraordinary Losses
Extraordinary Loss for
Discontinuance of
Statement of
Financial Accounting (2,717.7) -- (2,717.7) --
Standards
No. 71, net of tax
Extraordinary Loss on
Early (15.8) -- (15.8) --
Extinguishment of
Debt, net of tax
Net Income (Loss) $(2,214.5) $474.8 $(1,682.1) $970.9
PRELIMINARY (UNAUDITED)
July 20, 1995
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
Three Months Ended Three Months Ended
June 30, 1995 June 30, 1994
Property additions $ 807.4 $ 808.0
(millions)
Allowance for funds used $ 3.4 $ 4.8
during construction
(millions)
Access minutes of use
(millions):
Interstate 15,597.1 14,422.3
Intrastate 4,789.9 4,175.0
IntraLATA toll messages 352.0 397.2
(millions)
At June 30,
1995 1994
Debt ratio 48.0% 41.4%
Telephone employees 72,404 77,419
Network access lines in
service
(thousands) 20,690.8 19,746.3
PRELIMINARY (UNAUDITED)
July 20, 1995
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
Six Months Ended Six Months Ended
June 30, 1995 June 30, 1994
Property additions $ 1,501.5 $ 1,477.6
(millions)
Allowance for funds used $ 7.0 $ 8.8
during construction
(millions)
Access minutes of use
(millions):
Interstate 30,728.4 28,473.1
Intrastate 9,319.0 8,180.6
IntraLATA toll messages 722.0 783.8
(millions)
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, Chief Financial Officer
and Comptroller
July 31, 1995
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