<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
----------------
FORM 10-K/A
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
----------------
BELLSOUTH CORPORATION
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for
the year ended December 31, 1994 as set forth in the pages attached hereto:
Item 14a.(3) Exhibits:
99a Financial Statements for BellSouth Management Savings and Employee Stock
Ownership Plan for the year ended December 31, 1994.
99b Financial Statements for BellSouth Savings and Security Plan for the year
ended December 31, 1994.
99c Financial Statements for BellSouth Enterprises Retirement Savings Plan for
the year ended December 31, 1994.
----------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
BellSouth Corporation
/s/ Ronald M. Dykes
BY: _________________________________
Ronald M. Dykes
Vice President, Comptroller and
Chief Financial Officer
June 22, 1995
<PAGE>
(3) Exhibits: (As filed with Form 10-K as of 12/31/94, unless otherwise
noted).
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
3a Articles of Incorporation of BellSouth Corporation. (Exhibit 3a to
Form 10-K for the year ended December 31, 1990, File No. 1-8607).
3b Bylaws of BellSouth Corporation. (Exhibit 3b to Form 10-Q for the
quarter ended September 30, 1994, File No. 1-8607).
4 BellSouth Corporation Shareholder Rights Agreement. (Exhibit 4-b to
Form 8-K. Date of report November 27, 1989).
4a No instrument which defines the rights of holders of long and
intermediate term debt of BellSouth Corporation is filed herewith
pursuant to Regulation S-K, Item 601(b)(4)(iii)(A). Pursuant to this
regulation, BellSouth Corporation hereby agrees to furnish a copy of
any such instrument to the SEC upon request.
10a BellSouth Corporation Executive Short Term Incentive Plan. (Exhibit
10d to Form 10-K for the year ended December 31, 1991, File No. 1-
8607).
10b BellSouth Corporation Executive Long Term Incentive Plan. (Exhibit 10e
to Form 10-K for the year ended December 31, 1991, File No. 1-8607).
10c BellSouth Corporation Executive Long Term Disability and Survivor
Protection Plan. (Exhibit 10dd to Form 10-K for the year ended
December 31, 1985, File No. 1-8607).
10c-1 Amendment dated January 1, 1994 to the BellSouth Corporation Executive
Long Term Disability and Survivor Protection Plan. (Exhibit 10c-1 to
Form 10-K for the year ended December 31, 1993, File No. 1-8607).
10d BellSouth Corporation Executive Transfer Plan. (Exhibit 10ee to
Registration Statement No. 2-87846).
10e BellSouth Corporation Death Benefit Program. (Exhibit 10ff to Form 10-
K for the year ended December 31, 1989, File No. 1-8607).
10f BellSouth Corporation Plan For Non-Employee Directors' Travel Accident
Insurance. (Exhibit 10ii to Registration Statement No. 2-87846).
10g BellSouth Corporation Executive Incentive Award Deferral Plan.
(Exhibit 10k to Form 10-K for the year ended December 31, 1992, File
No. 1-8607).
10h BellSouth Corporation Stock Option Plan. (Exhibit 10l to Form 10-K for
the year ended December 31, 1991, File No. 1-8607).
10i BellSouth Corporation Nonqualified Deferred Compensation Plan as
amended and restated on November 28, 1994.
10j BellSouth Corporation Supplemental Executive Retirement Plan as
amended and restated on November 28, 1994.
10k BellSouth Management Savings and Employee Stock Ownership Plan as
amended and restated effective as of January 1, 1994.
10l BellSouth Corporation Directors Retirement Plan. (Exhibit 10qq to Form
10-K for the year ended December 31, 1986, File No. 1-8607).
10m BellSouth Corporation Financial Counseling Plan. (Exhibit 10r to Form
10-K for the year ended December 31, 1992, File No. 1-8607).
10n BellSouth Corporation Deferred Compensation Plan for Non-Employee
Directors. (Exhibit 10gg to Registration Statement No. 2-87846).
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
10o BellSouth Corporation Executive Life Insurance Plan. (Exhibit 10v to
Form 10-K for the year ended December 31, 1992, File No. 1-8607).
10p BellSouth Corporation Stock Option Plan for Non-Employee Directors.
(Exhibit 10z to Form 10-K for the year ended December 31, 1991, File
No. 1-8607).
10q BellSouth Corporation Executive Shareholder Return Cash Plan. (Exhibit
10x to Form 10-K for the year ended December 31, 1992, File No. 1-
8607).
10r Form of Executive Officer Succession and Retirement Agreement.
10s BellSouth Non-Employee Directors Charitable Contribution Program.
(Exhibit 10z to Form 10-K for the year ended December 31, 1992, File
No. 1-8607).
10t BellSouth Personal Retirement Account Pension Plan. (Exhibit 10aa to
Form 10-Q for the quarter ended June 30, 1993, File No. 1-8607).
10t-1 Amendment dated August 9, 1993 to the BellSouth Personal Retirement
Account Pension Plan. (Exhibit 10aa-1 to Form 10-Q for the quarter
ended September 30, 1993, File No. 1-8607).
10t-2 Amendments dated October 15, 1993 and November 12, 1993 to the
BellSouth Personal Retirement Account Pension Plan. (Exhibit 10t-2 to
Form 10-K for the year ended December 31, 1993, File No. 1-8607).
10t-3 Amendment dated April 22, 1994 to the BellSouth Personal Retirement
Account Pension Plan. (Exhibit 10t-3 to Form 10-Q for the quarter
ended June 30, 1994, File No. 1-8607).
10t-4 Amendment dated December 5, 1994 to the BellSouth Personal Retirement
Account Pension Plan.
10u BellSouth Corporation Trust Under Executive Benefit Plan(s). (Exhibit
10bb to Form 10-Q for the quarter ended June 30, 1993, File No. 1-
8607).
10v BellSouth Telecommunications, Inc. Trust Under Executive Benefit
Plan(s). (Exhibit 10cc to Form 10-Q for the quarter ended June 30,
1993, File No. 1-8607).
10w BellSouth Corporation Trust Under Board of Directors Benefit Plan(s).
(Exhibit 10dd to Form 10-Q for the quarter ended September 30, 1993,
File No. 1-8607).
10x BellSouth Telecommunications, Inc. Trust Under Board of Directors
Benefit Plan(s). (Exhibit 10ee to Form 10-Q for the quarter ended
September 30, 1993, File No. 1-8607).
10y BellSouth Enterprises, Inc. Trust Under Executive Benefit Plan(s).
(Exhibit 10y to Form 10-K for the year ended December 31, 1993, File
No. 1-8607).
10z BellSouth Corporation Financial Services Plan. (Exhibit 10z to Form
10-Q for the quarter ended March 31, 1994, File No. 1-8607).
10aa BellSouth Corporation Nonqualified Deferred Income Plan. (Exhibit 10aa
to Form 10-Q for the quarter ended September 30, 1994, File No. 1-
8607).
11 Computation of Earnings Per Share.
12 Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiaries of BellSouth.
24 Powers of Attorney.
27 Restated Financial Data Schedule.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
99a* Annual report on Form 11-K for BellSouth Management Savings and
Employee Stock Ownership Plan for the fiscal year ended December 31,
1994 (to be filed as an amendment hereto within 180 days of the end of
the period covered by this report).
99b* Annual report on Form 11-K for BellSouth Savings and Security ESOP
Plan for the fiscal year ended December 31, 1994 (to be filed as an
amendment hereto within 180 days of the end of the period covered by
this report).
99c* Annual report on Form 11-K for BellSouth Enterprises Retirement
Savings Plan for the fiscal year ended December 31, 1994 (to be filed
as an amendment hereto within 180 days of the end of the period
covered by this report).
</TABLE>
- --------
*Filed herewith.
4
<PAGE>
EXHIBIT 99A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994
or
[_] Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the transition period Commission file number
from ________ to ________ 1-8607
BellSouth Management Savings and
Employee Stock Ownership Plan
BELLSOUTH CORPORATION
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Management Savings Plan Committee of the
BellSouth Management Savings and Employee Stock Ownership Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the BellSouth Management Savings and Employee Stock Ownership Plan
as of December 31, 1994 and 1993, and the related statements of changes in net
assets available for plan benefits for each of the three years in the period
ended December 31, 1994. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1994 and 1993, and the changes in net assets available for
plan benefits for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department for Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statement of net assets available for plan
benefits and the statement of changes in net assets available for plan benefits
is presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedule and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 16, 1995
1
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of BellSouth Corporation on Form S-8 (File Nos. 33-30773 and 33-38264) of our
report dated June 16, 1995, on our audits of the financial statements of the
BellSouth Management Savings and Employee Stock Ownership Plan as of December
31, 1994 and 1993, and for each of the three years in the period ended December
31, 1994, and the accompanying financial statement schedule as of December 31,
1994, which report is included in this Annual Report on Form 11-K.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 16, 1995
2
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN BALANCED FUND ---------------------
FUND FUND FUND FUND FUND FUND WINDOW ALLOCATED UNALLOCATED TOTAL
ASSETS --------- -------- -------- -------- ------- -------- ------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Allocated share of
trust net assets....... $718,034 $122,218 $348,747 $696,152 $35,199 $29,292 $30,310 $ -- $ -- $1,979,952
Investment in BellSouth
Management Savings and
Employee Stock
Ownership Plan Trust:
BellSouth shares of
common stock allocated
to participants....... -- -- -- -- -- -- -- 231,371 -- 231,371
BellSouth shares of
common stock held for
future allocation..... -- -- -- -- -- -- -- -- 398,081 398,081
Temporary cash
investments........... -- -- -- -- -- -- -- 4,040 14,548 18,588
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total Investments.... 718,034 122,218 348,747 696,152 35,199 29,292 30,310 235,411 412,629 2,627,992
Allotments and
contributions
receivable............. 4,458 1,082 5,640 41,691 -- 1,668 -- 3,772 -- 58,311
Fund, BellSouth Savings
and Security Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
receivable--net........ 62,482 -- -- -- -- -- 1,351 -- -- 63,833
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total Assets......... 784,974 123,300 354,387 737,843 35,199 30,960 31,661 239,183 412,629 2,750,136
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
LIABILITIES
Distributions payable.. 9,473 1,927 5,412 13,089 1,445 784 60 5,858 -- 38,048
Fund, BellSouth Savings
and Security Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
payable--net........... -- 10,993 12,068 31,470 4,896 3,865 -- -- -- 63,292
Notes payable.......... -- -- -- -- -- -- -- -- 456,651 456,651
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total liabilities.... 9,473 12,920 17,480 44,559 6,341 4,649 60 5,858 456,651 557,991
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Net Assets Available
for Plan Benefits...... $775,501 $110,380 $336,907 $693,284 $28,858 $26,311 $31,601 $233,325 $(44,022) $2,192,145
======== ======== ======== ======== ======= ======= ======= ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN ---------------------
FUND FUND FUND FUND FUND ALLOCATED UNALLOCATED TOTAL
--------- -------- -------- -------- ------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Allocated share of trust
net assets.............. $726,002 $138,650 $333,144 $648,004 $29,737 $ -- $ -- $1,875,537
Investment in BellSouth
Management Savings and
Employee Stock Ownership
Plan Trust:
BellSouth shares of
common stock allocated
to participants........ -- -- -- -- -- 198,452 -- 198,452
BellSouth shares of
common stock held for
future allocation...... -- -- -- -- -- -- 468,610 468,610
Temporary cash invest-
ments.................. -- -- -- -- -- 546 14,461 15,007
-------- -------- -------- -------- ------- -------- ------- ----------
Total Investments..... 726,002 138,650 333,144 648,004 29,737 198,998 483,071 2,557,606
Allotments and contribu-
tions receivable........ 1 918 631 6,045 -- 3,019 -- 10,614
Fund, BellSouth Savings
and Security Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers re-
ceivable--net........... 1,371 -- 1,200 -- 2,061 -- -- 4,632
-------- -------- -------- -------- ------- -------- ------- ----------
Total Assets.......... 727,374 139,568 334,975 654,049 31,798 202,017 483,071 2,572,852
-------- -------- -------- -------- ------- -------- ------- ----------
LIABILITIES
Distributions payable... 3,807 1,536 2,062 4,245 1,914 411 -- 13,975
Fund, BellSouth Savings
and Security Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers pay-
able--net............... -- 696 -- 3,698 -- -- -- 4,394
Notes payable........... -- -- -- -- -- -- 481,347 481,347
-------- -------- -------- -------- ------- -------- ------- ----------
Total Liabilities..... 3,807 2,232 2,062 7,943 1,914 411 481,347 499,716
-------- -------- -------- -------- ------- -------- ------- ----------
Net Assets Available for
Plan Benefits........... $723,567 $137,336 $332,913 $646,106 $29,884 $201,606 $ 1,724 $2,073,136
======== ======== ======== ======== ======= ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN BALANCED FUND ----------------------
FUND FUND FUND FUND FUND FUND WINDOW ALLOCATED UNALLOCATED TOTAL
--------- -------- -------- -------- ------- -------- ------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available
for Plan Benefits,
December 31, 1993...... $723,567 $137,336 $332,913 $646,106 $29,884 $ -- $ -- $201,606 $ 1,724 $2,073,136
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Employee Contributions. 39,344 11,494 38,628 97,395 1,882 6,905 -- -- -- 195,648
Transfer of
participants'
balances--net.......... 61,315 (30,649) (22,786) (49,799) (2,677) 21,482 31,661 -- -- 8,547
Employing company
contributions.......... -- -- -- -- -- -- -- 13,771 -- 13,771
Supplemental
contributions.......... -- -- -- -- -- -- -- -- 39,652 39,652
Allocation of shares to
participants........... -- -- -- -- -- -- -- 42,016 (42,016) --
Transfer of loan
repayment.............. -- -- -- -- -- -- -- (6,709) 6,709 --
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total Allotments,
Contributions,
Allocations and
Transfers.............. 100,659 (19,155) 15,842 47,596 (795) 28,387 31,661 49,078 4,345 257,618
Allocated share of
Trust investment
activities............. (11,466) 145 5,189 44,085 1,445 (311) -- (6,452) (6,650) 25,985
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total Additions........ 89,193 (19,010) 21,031 91,681 650 28,076 31,661 42,626 (2,305) 283,603
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Less: Distributions to
Participants........... 37,259 7,946 17,037 44,503 1,676 1,765 60 10,907 -- 121,153
Interest on Notes
Payable.............. -- -- -- -- -- -- -- -- 43,441 43,441
-------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Net Assets Available
for Plan Benefits,
December 31, 1994..... $775,501 $110,380 $336,907 $693,284 $28,858 $26,311 $31,601 $233,325 $(44,022) $2,192,145
======== ======== ======== ======== ======= ======= ======= ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN ----------------------
FUND FUND FUND FUND FUND ALLOCATED UNALLOCATED TOTAL
--------- -------- -------- -------- ------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December
31, 1992................ $666,877 $114,932 $268,898 $567,272 $27,123 $136,946 $(36,396) $1,745,652
-------- -------- -------- -------- ------- -------- -------- ----------
Employee contributions.. 27,507 8,287 27,371 37,632 -- -- -- 100,797
Transfer of
participants'
balances--net........... (61,543) 7,474 19,708 28,065 924 -- -- (5,372)
Employing company
contributions........... -- -- -- -- -- 5,381 -- 5,381
Supplemental
contributions........... -- -- -- -- -- -- 37,772 37,772
Allocation of shares to
participants............ -- -- -- -- -- 40,272 (40,272) --
Transfer for loan
repayment............... -- -- -- -- -- (4,745) 4,745 --
-------- -------- -------- -------- ------- -------- -------- ----------
Total Allotments,
Contributions,
Allocations and
Transfers............... (34,036) 15,761 47,079 65,697 924 40,908 2,245 138,578
Allocated share of Trust
investment activities... 119,522 13,136 29,135 42,376 2,218 25,912 81,312 313,611
-------- -------- -------- -------- ------- -------- -------- ----------
Total Additions......... 85,486 28,897 76,214 108,073 3,142 66,820 83,557 452,189
-------- -------- -------- -------- ------- -------- -------- ----------
Less: Distributions to
Participants............ 28,796 6,493 12,199 29,239 381 2,160 -- 79,268
Interest on Notes
Payable............... -- -- -- -- -- -- 45,437 45,437
-------- -------- -------- -------- ------- -------- -------- ----------
Net Assets Available
for Plan Benefits,
December 31, 1993...... $723,567 $137,336 $332,913 $646,106 $29,884 $201,606 $ 1,724 $2,073,136
======== ======== ======== ======== ======= ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1992
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN ----------------------
FUND FUND FUND FUND FUND ALLOCATED UNALLOCATED TOTAL
--------- -------- -------- -------- ------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December
31, 1991................ $732,582 $111,812 $219,393 $536,695 $24,138 $ 93,662 $(14,464) $1,703,818
-------- -------- -------- -------- ------- -------- -------- ----------
Employee contributions.. 24,917 6,443 22,830 37,026 -- -- -- 91,216
Transfer of
participants'
balances--net........... (80,364) (3,484) 21,876 (13,444) 2,988 -- -- (72,428)
Employing company
contributions........... -- -- -- -- -- 8,532 -- 8,532
Supplemental
contributions........... -- -- -- -- -- -- 35,140 35,140
Allocation of shares to
participants............ -- -- -- -- -- 33,823 (33,823) --
Transfer for loan
repayment............... -- -- -- -- -- (3,045) 3,045 --
-------- -------- -------- -------- ------- -------- -------- ----------
Total Allotments,
Contributions,
Allocations and
Transfers............... (55,447) 2,959 44,706 23,582 2,988 39,310 4,362 62,460
Allocated share of Trust
investment activities... 36,938 8,484 19,177 40,064 -- 6,485 20,794 131,942
-------- -------- -------- -------- ------- -------- -------- ----------
Total Additions......... (18,509) 11,443 63,883 63,646 2,988 45,795 25,156 194,402
-------- -------- -------- -------- ------- -------- -------- ----------
Less: Distributions to
Participants............ 47,196 8,323 14,378 33,069 3 2,511 -- 105,480
Interest on Notes
Payable............... -- -- -- -- -- -- 47,088 47,088
-------- -------- -------- -------- ------- -------- -------- ----------
Net Assets Available
for Plan Benefits,
December 31, 1992...... $666,877 $114,932 $268,898 $567,272 $27,123 $136,946 $(36,396) $1,745,652
======== ======== ======== ======== ======= ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
1. PLAN DESCRIPTION (WHOLE DOLLARS)--
The BellSouth Management Savings and Employee Stock Ownership Plan (the
"Plan") was established by BellSouth Corporation ("BellSouth") to provide a
convenient way for management employees to save for their retirement on a long-
term basis and to acquire an ownership interest in BellSouth. The assets of the
Plan are held in the BellSouth Master Savings Trust (the "Master Savings
Trust") and are commingled with the assets of the BellSouth Enterprises
Retirement Savings Plan and the assets of the BellSouth Savings and Security
Plan for investment purposes.
Highlights of the Plan are described in the Prospectus/Summary Plan
Description, as supplemented ("SPD"), which is available to all participants. A
copy of the SPD can be obtained by calling the BellSouth Participant Service
Center at 1-800-995-1000 or 1-615-333-9000 via company telephone. In addition,
copies of the Plan, trust agreement and other related documents which include
details of the Plan can be obtained by writing to: Secretary, BellSouth Savings
Plan Committee, Room 7B09, 1155 Peachtree Street, N.E., Atlanta, Georgia 30309-
3610.
The following are changes that were adopted effective January 1, 1994 unless
otherwise noted:
Participants can direct their investment to a newly established fund called
the Balanced Fund. The structure of the Balanced Fund is designed to allocate
assets between stocks, bonds and cash, and to facilitate altering the mix as
necessary when market conditions change. The objective is to achieve higher
returns by exposing the fund's assets to that mix of stocks, bonds and cash
assets that the manager believes is the optimum. The Fund is actively managed
by First Quadrant Corporation. The equity portion is invested in the Bankers
Trust BT PYRAMID Equity Index Fund, which tracks the S&P 500 index; the bond
portion is invested in the Bankers Trust BT PYRAMID Broad Market Fixed Income
Fund, which tracks the Lehman Brothers Aggregate Bond Index; and the cash is
invested in the Bankers Trust BT PYRAMID Directed Short Term Investment Fund
("STIF").
Effective July 15, 1994, participants can transfer money already in their
savings plan funds to any of five mutual funds, collectively referred to as the
Mutual Fund Window (the "Window"). Participants can transfer up to 100 percent
of their existing investment in the Interest Income Fund and up to 80 percent
of their then existing investment in all other funds. Funds in the Window are
valued and may be traded on a daily basis. See footnote 8 for financial results
related to the individual funds included in the Window.
On January 1, 1994, the unit values of each core fund (BellSouth Stock Fund,
Bond Fund, Indexed Stock Fund and Interest Income Fund) of the Plan were
reunitized or restated. Each fund was given a "new start" beginning with a unit
value of 1.000000. At the same time, the number of units credited to the
participants' accounts was increased, so that the number of units owned equaled
the dollar amount invested as of January 1, 1994.
The annual administrative fee per participant decreased from $27 to $22 in
1994. This fee will pay for up to four fund transfers, four changes in how
participant contributions are invested, and four changes in the amount saved
from each paycheck. More than four changes in any category will cost an extra
$2 per transaction. In addition, a $6 charge will be applied for transactions
made through a service representative if these transactions can be made through
the automated voice response system ("VRS"). Participants will not be charged
for using a service representative to help with transactions that cannot be
handled through VRS.
Participants can transfer balances between the Bond Fund and the Interest
Income Fund. Previously, this type of transfer was restricted. Participants
cannot transfer from and into the same fund at the same time.
Participants who have retired or left the company and have elected to leave
money in the Plan, can make two (2) withdrawals per year. There is no charge
for the first withdrawal. But to cover administrative
8
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
1. PLAN DESCRIPTION (CONTINUED)--
costs, a $25 processing fee will be charged for the second withdrawal. In
addition, these participants can get the money that remains in their accounts
in two new ways; annual installments for 10 years or a series of payouts for
the rest of their lives.
The following are changes that will affect plan participants during 1995:
Effective April 1, 1995 participants will be allowed to have two outstanding
loans from the Plan. Previously only one outstanding loan at a time was
available. In addition, the maximum amount available for a loan will include
any amounts rolled over to the Plan from another qualified plan. The amount
available for any loan will be the lesser of (1) 50% of the total pre-tax
account balance and rollover amounts or (2) $50,000 reduced by the highest
outstanding loan balance during the last twelve months. The loan payoff period
will remain two to five years. However, the entire loan balance may be prepaid
once the loan has been outstanding for one year. A $5 annual maintenance fee
will be charged for loans initiated on or after April 1, 1995. The maintenance
fee is in addition to the loan initiation fee of $50.
The annual administrative fee per participant will be $22 in 1995. This
represents no change in the fee amount from 1994. This fee will pay for up to
four fund transfers, four changes in how participant contributions are
invested, and four changes in the amount saved from each paycheck. More than
four changes in any category will cost an extra $2 per transaction. In
addition, a $6 charge will be applied for transactions made through a service
representative if these transactions can be made through the automated voice
response system ("VRS"). Participants will not be charged for using a service
representative to help with transactions that cannot be handled through VRS. If
a participant has one or more investments in the Mutual Fund Window there is a
$1.50 per month maintenance charge and a $2.00 fee per transaction within the
Window.
Bankers Trust Company is the Trustee for the Master Savings Trust. Bankers
Trust Company is also the recordkeeper and service center provider for the
Plan.
2. ACCOUNTING POLICIES
With respect to the Statement of Changes in Net Assets Available for Plan
Benefits for the years presented, Allocated Share of Trust Investment
Activities includes net appreciation/(depreciation) in fair value of
investments which represents the sum of realized gains, net of realized losses
and the net change in unrealized appreciation/(depreciation) on the
investments.
The values of investments in the Master Savings Trust are determined as
follows:
Shares of BellSouth common stock and other securities listed on a
national stock exchange are valued on the basis of the closing price per
share on December 31, 1994 and December 31, 1993, as reported on the New
York Stock Exchange composite tape or, if no sales were made on that date,
at the closing price on the next preceding day on which sales were made;
Over-the-counter securities and government obligations are valued based
on the bid prices on December 31, 1994 and 1993 from published sources
where available and, if not available, from other sources considered
reliable; and
Contracts with insurance companies are valued at principal plus
reinvested interest.
Purchases and sales of securities are reflected as of the trade date.
Realized gains and losses on sales of investments are determined on the basis
of average cost.
Dividend income is recognized on the ex-dividend date. Interest earned on
investments is recognized on the accrual basis.
9
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
3. UNITS OF THE PLAN (WHOLE DOLLARS)--
Participants in the Plan can invest their contributions among five core
funds; BellSouth Stock Fund, Indexed Stock Fund, Interest Income Fund, Bond
Fund and, since January 1, 1994, the Balanced Fund. The interest of a
participant in each type of investment of the Plan is represented by units as
described in Section 8 of the Plan. The units of each fund of the Plan were
reunitized or restated on January 1, 1994 except for the Balanced Fund which
was a new investment option at that date. Each fund was given a "new start"
beginning with a unit value of 1.000000. At the same date the number of units
credited to the participants' accounts was increased, so that the number of
units owned equaled the dollar amount invested.
The number and value of units as of December 31, 1994 and December 31, 1993
were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
------------------------------ ------------------------------
TYPE OF INVESTMENT NUMBER OF UNITS VALUE PER UNIT NUMBER OF UNITS VALUE PER UNIT
- ------------------ --------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
BellSouth Stock Fund.... 791,400,762 $ .9799 155,295,081 $ 4.6593
Indexed Stock Fund...... 332,768,905 1.0124 32,633,345 10.2016
Bond Fund............... 110,115,539 1.0024 14,712,673 9.3345
Interest Income Fund.... 648,234,601 1.0694 155,537,000 4.1540
Balanced Fund........... 27,118,692 .9702 -- --
</TABLE>
The number and value of units by month for each fund during 1994 were as
follows:
<TABLE>
<CAPTION>
BELLSOUTH STOCK INDEXED STOCK INTEREST INCOME
FUND BOND FUND FUND FUND BALANCED FUND
-------------------- -------------------- -------------------- -------------------- -------------------
NUMBER VALUE NUMBER VALUE NUMBER VALUE NUMBER VALUE NUMBER VALUE
1994 OF UNITS PER UNIT OF UNITS PER UNIT OF UNITS PER UNIT OF UNITS PER UNIT OF UNITS PER UNIT
---- ----------- -------- ----------- -------- ----------- -------- ----------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January......... 713,231,681 1.071509 135,111,348 1.008528 332,876,351 1.034370 642,504,323 1.005724 16,518,735 1.000000
February........ 737,778,930 0.972221 133,260,736 0.998263 336,191,471 1.005956 627,898,126 1.010953 21,655,776 0.978002
March........... 733,994,844 1.008379 131,352,866 0.989702 341,901,801 0.962187 626,979,028 1.016712 26,301,840 0.948562
April........... 712,189,326 1.072665 129,367,239 0.985668 349,902,952 0.974330 645,488,712 1.022342 30,035,436 0.952515
May............. 716,441,553 1.048315 127,041,773 0.986050 352,403,879 0.990322 641,967,060 1.028084 31,098,438 0.958619
June............ 712,703,637 1.087768 125,201,671 0.987210 355,524,052 0.966494 649,946,436 1.033919 31,121,101 0.944350
July............ 705,256,471 1.113038 122,769,611 1.001992 350,015,167 0.998387 658,407,279 1.039865 31,536,962 0.971879
August.......... 725,905,544 1.058125 120,333,789 1.002567 342,107,967 1.039168 642,887,901 1.045723 29,191,613 0.987774
September....... 749,326,710 0.995574 116,913,192 0.994575 338,091,061 1.013367 627,562,412 1.051353 28,307,704 0.964800
October......... 785,168,396 0.965154 112,974,261 0.995124 331,892,334 1.035219 610,253,965 1.057387 26,364,371 0.973546
November........ 792,919,289 0.942376 111,448,746 0.994898 330,549,351 0.997434 608,775,538 1.063316 26,556,497 0.957276
December........ 791,400,762 0.979909 110,115,539 1.002406 332,768,905 1.012435 648,234,601 1.069494 27,118,692 0.970189
</TABLE>
The net asset values by month, beginning July 1994, of each fund included in
the Mutual Fund Window were as follows:
<TABLE>
<CAPTION>
DFA DFA U.S. DFA U.S. 20TH CENTURY
BERGER INTERNATIONAL LARGE CAP SMALL CAP GROWTH
1994 100 FUND VALUE II FUND VALUE II FUND VALUE II FUND INVESTORS FUND
---- -------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
July......... $14.85 $10.00 $10.00 $10.00 $21.78
August....... $15.79 $10.01 $10.16 $10.30 $22.77
September.... $15.96 $9.66 $9.86 $10.26 $22.13
October...... $16.46 $10.06 $10.04 $10.11 $22.99
November..... $15.80 $9.47 $9.48 $9.65 $21.74
December..... $15.69 $9.52 $9.57 $9.73 $18.74
</TABLE>
10
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
3. UNITS OF THE PLAN (CONTINUED)--
At December 31, 1994, the number of participants currently contributing to
the Plan by investment direction as described in Section 7 of the Plan was as
follows:
<TABLE>
<CAPTION>
NO.
FUND DESCRIPTION PARTICIPANTS
---------------- ------------
<S> <C>
Entirely in BellSouth Stock Fund............................... 4,118
Entirely in Bond Fund.......................................... 351
Entirely in Indexed Stock Fund................................. 2,443
Entirely in Interest Income Fund............................... 3,830
Entirely in Balanced Fund...................................... 199
Equally in BellSouth Stock Fund and Bond Fund.................. 313
Equally in BellSouth Stock Fund and Indexed Stock Fund......... 1,171
Equally in BellSouth Stock Fund and Interest Income Fund....... 1,519
Equally in Bond Fund and Indexed Stock Fund.................... 530
Equally in Indexed Stock Fund and Interest Income Fund......... 1,017
Equally in Indexed Stock Fund and Balanced Fund................ 111
Equally in BellSouth Stock Fund, Bond Fund and Indexed Stock
Fund.......................................................... 164
Equally in BellSouth Stock Fund, Indexed Stock Fund and
Interest Income Fund.......................................... 316
Various Fund combinations*..................................... 2,649
------
Total Participants........................................... 18,731
======
</TABLE>
- --------
* Includes all other investment directions having less than 100 participants.
Participants cannot make contributions directly to the Mutual Fund Window.
Mutual Fund Window investments are made via transfer from contributions made to
the five core funds. See footnote 1 for additional information.
Since all employing company contributions are made to the ESOP, all employees
currently contributing to the Plan are participants in the ESOP.
4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated February 26, 1988, that the Plan and related trust meet the
requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and is exempt from Federal Income Taxes under Section 501(a) of
the Code. The Plan has been amended since receiving the determination letter.
On March 17, 1995, the Plan was submitted to the Internal Revenue Service for a
favorable determination letter with respect to the effect of the amendment on
the continued qualification of the Plan. However, the Plan administrator and
the Plan's tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the Code.
For information on the Federal income tax effects on the employee with
respect to the Plan, participants should refer to the Plan Prospectus.
5. CONTRIBUTIONS
Employee contributions to the Plan are accrued based upon authorized before-
tax or after-tax basic contributions of up to 6% and before-tax or after-tax
supplemental contributions of not more than 9% of compensation for employees
electing the maximum 6% basic contribution. No more than 12% may be contributed
on a before-tax basis. Total before-tax and after-tax contributions may not
exceed 15% of compensation.
11
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
5. CONTRIBUTIONS (CONTINUED)--
The employing company makes contributions in respect of the first 6% of each
participant's compensation contributed. From January 1994 through March 1994,
employing company matching contributions were accrued based on an amount equal
to 64% of the authorized basic contribution of each participating employee.
From April 1994 through December 1994 the matching contribution was 81%. The
rate of the employing company matching contribution remains in effect for a
twelve month period from April 1 through March 31. Employing company matching
contributions will immediately vest when they are made.
Beginning January 1, 1992, certain BellSouth Enterprises, Inc. employees'
contributions, previously invested in the Plan, began to be invested in the
BellSouth Enterprises Retirement Savings Plan. During 1992, assets totaling
$75,544.7, attributable to those participants, were transferred to the
BellSouth Enterprises Retirement Savings Plan based on current investment
directions. ESOP amounts for these participants were not transferred because
the BellSouth Enterprises Retirement Savings Plan does not have an ESOP
feature. These transfers are included in the 1992 Statement of Changes in Net
Assets under transfers of participants' balances. Effective January 1, 1994,
contributions previously made to the BellSouth Enterprises Retirement Savings
Plan by certain employees of BellSouth Enterprises headquarters began to be
invested in the Plan.
6. TERMINATION PRIORITIES
BellSouth intends to continue the Plan indefinitely but reserves the right to
terminate or amend it. In the event the Plan is terminated, subject to
conditions set forth in the Employee Retirement Income Security Act of 1974, as
amended, participants will receive written notification of plan termination at
least 30 days in advance. The participant may then elect to leave all units in
his/her account until they leave the Company or take a lump sum distribution of
the value of his/her units.
7. PLAN EXPENSES
Investment manager fees are paid by the Master Savings Trust. Investment
manager fees included in allocated share of Trust investment activities in the
1994 Statement of Changes in Net Assets were $286.4, $100.1, $316.7 and $23.9
for the Bond Fund, Indexed Stock Fund, Interest Income Fund and Balanced Fund,
respectively.
Prior to January 1, 1993 expenses that related primarily to the costs of
administering the Plan were paid by the employing companies. Since January 1,
1993, the majority of the administrative expenses of the Plan have been charged
to Plan participants (see Note 1).
12
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
8. MUTUAL FUND WINDOW
The Mutual Fund Window's net assets available for plan benefits are comprised
of the following funds at December 31, 1994:
<TABLE>
<CAPTION>
DFA DFA DFA 20TH CENTURY MUTUAL FUND
BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS WINDOW
FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL
---------- ------------- -------------- -------------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Allocated share of trust
net assets............. $14,155 $6,443 $1,080 $5,087 $3,545 $30,310
Investment in BellSouth
Management Savings and
Employee Stock
Ownership Plan Trust:
BellSouth shares of
common stock allocated
to participants....... -- -- -- -- -- --
BellSouth shares of
common stock held for
future allocation..... -- -- -- -- -- --
Temporary cash
investments........... -- -- -- -- -- --
------- ------ ------ ------ ------ -------
Total Investments..... 14,155 6,443 1,080 5,087 3,545 30,310
Allotments and
contributions
receivable............. -- -- -- -- -- --
Fund, BellSouth Savings
and Security Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
receivable--net........ 565 245 73 265 203 1,351
------- ------ ------ ------ ------ -------
Total Assets.......... 14,720 6,688 1,153 5,352 3,748 31,661
------- ------ ------ ------ ------ -------
LIABILITIES
Distributions payable... 1 1 -- 58 -- 60
Fund, BellSouth Savings
and Security Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
payable--net........... -- -- -- -- -- --
Notes payable........... -- -- -- -- -- --
------- ------ ------ ------ ------ -------
Total liabilities..... 1 1 -- 58 -- 60
------- ------ ------ ------ ------ -------
Net Assets Available for
Plan Benefits.......... $14,719 $6,687 $1,153 $5,294 $3,748 $31,601
======= ====== ====== ====== ====== =======
</TABLE>
13
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
8. MUTUAL FUND WINDOW (CONTINUED)--
The Mutual Fund Window's changes in assets available for plan benefits are
comprised of the following funds for the year ended December 31, 1994:
<TABLE>
<CAPTION>
DFA DFA DFA 20TH CENTURY MUTUAL FUND
BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS WINDOW
FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL
---------- ------------- -------------- -------------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December
31, 1993............... $ -- $ -- $ -- $ -- $ -- $ --
------- ------ ------ ------ ------ -------
Employee Contributions.. -- -- -- -- -- --
Transfer of
participants'
balances--net.......... 14,720 6,688 1,153 5,352 3,748 31,661
Employing company
contributions.......... -- -- -- -- -- --
Supplemental
contributions.......... -- -- -- -- -- --
Allocation of shares to
participants........... -- -- -- -- -- --
Transfer of loan
repayment.............. -- -- -- -- -- --
------- ------ ------ ------ ------ -------
Total Allotments,
Contributions,
Allocations and
Transfers.............. 14,720 6,688 1,153 5,352 3,748 31,661
Allocated share of Trust
investment activities.. -- -- -- -- -- --
------- ------ ------ ------ ------ -------
Total Additions......... 14,720 6,688 1,153 5,352 3,748 31,661
------- ------ ------ ------ ------ -------
Less: Distributions to
Participants......... 1 1 -- 58 -- 60
Interest on Notes
Payable............ -- -- -- -- -- --
------- ------ ------ ------ ------ -------
Net Assets Available
for Plan Benefits,
December 31, 1994..... $14,719 $6,687 $1,153 $5,294 $3,748 $31,601
======= ====== ====== ====== ====== =======
</TABLE>
14
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST
The assets of the Plan are held in the Master Savings Trust effective May 1,
1989 and are commingled with the assets of the BellSouth Enterprises Retirement
Savings Plan and the assets of the BellSouth Savings and Security Plan. The
assets of the BellSouth Employee Stock Ownership Plan ("PAYSOP") are held in a
sub-trust of the Master Savings Trust. This sub-trust is not included in the
following Master Savings Trust information.
The Plan's allocated share of the total net assets of all funds in the Master
Savings Trust at December 31, 1994 and 1993 was 61.3942% and 61.1867%,
respectively. The Plan's allocated share of the net assets of each fund in the
Master Savings Trust at December 31, 1994 and 1993 was as follows:
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
BellSouth Stock Fund..................................... 50.03626% 50.47424%
Indexed Stock Fund....................................... 79.29553% 79.01304%
Bond Fund................................................ 86.30406% 87.27245%
Interest Income Fund..................................... 64.15525% 63.78105%
Loan Fund................................................ 73.91030% 82.23771%
Balanced Fund............................................ 81.63515% --
Mutual Fund Window....................................... 75.88309% --
</TABLE>
15
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
The financial position of the Master Savings Trust at December 31, 1994 and
1993 was as follows:
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Assets: Investment at value:
BellSouth Stock Fund:
BellSouth common shares................................ $1,396,036 $1,417,269
Temporary cash investments............................. 44,436 20,006
Bond Fund:
Securities............................................. 136,669 155,211
Temporary cash investments............................. 2,282 797
Indexed Stock Fund:
Equity Index Fund...................................... 426,228 419,305
Temporary cash investments............................. 13,684 2,379
Interest Income Fund:
Contracts.............................................. 1,047,899 982,482
Temporary cash investments............................. 37,529 27,934
Loan Fund:
Loans to participants.................................. 47,581 36,066
Temporary cash investments............................. 37 13
Balanced Fund:
Securities............................................. 20,094 --
Temporary cash investments............................. 15,760 --
Mutual Fund Window:
Berger 100 Fund........................................ 18,745 --
DFA International Value II Fund........................ 8,225 --
DFA US Large Cap Value II Fund......................... 1,419 --
DFA US Small Cap Value II Fund......................... 6,490 --
20th Century Growth Investors Fund..................... 4,839 --
Temporary cash investments............................. 227 --
Distributable shares.................................... 3,916 1,234
Dividends and interest income receivable................ 3,716 2,930
Receivable for investments sold......................... 42,196 --
Loan repayment receivable............................... 487 --
Variation margin receivable............................. 41 --
---------- ----------
$3,278,536 $3,065,626
Liabilities:
Payable for investments purchased...................... 52,824 724
Variation margin payable............................... 20 --
---------- ----------
Allocation share of trust net assets (excluding ESOP
Trusts)................................................. 3,225,692 3,064,902
Investment in ESOP Trusts:
BellSouth shares of common stock allocated to partici-
pants.................................................. 415,616 352,067
Distributable shares.................................... 732 86
BellSouth common shares held for future allocation...... 597,525 708,842
Temporary cash investments.............................. 37,074 28,823
---------- ----------
Total investments........................................ 4,276,639 4,154,720
Liabilities:
Notes payable........................................... 693,900 734,598
---------- ----------
Trust net assets...................................... $3,582,739 $3,420,122
========== ==========
Investments at cost...................................... $3,809,323 $3,492,070
========== ==========
</TABLE>
Distributions payable in shares at year end are reclassed from BellSouth
common shares and ESOP--BellSouth common shares held for future allocation to
the respective "Distributable Shares" line.
See Item 27a, BellSouth Master Savings Trust Schedule of Assets Held for
Investment purposes.
16
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
Assets in the BellSouth Stock Fund, Bond Fund and Indexed Stock Fund are
invested in securities which fluctuate in market value, and the values of the
units fluctuate as of the end of each month.
Assets in the Interest Income Fund are invested in a number of investment
contracts with diversified groups of high quality financial institutions. The
value of the Interest Income Fund is based upon the principal invested and the
interest credited, and the value of the units should increase as of the end of
each month. Some of these contracts are unsecured, general obligations of such
companies. Their security is subject to the ability of the insurance companies
or other financial institutions to repay their debts generally as they come
due. Other contracts are backed specifically by high quality, fixed income
assets. Therefore, many of the new investment contracts have the underlying
assets held in a separate account of an insurance company or in a trust fund.
These assets are protected from the general creditors of the contract issuer.
In three separate transactions during 1990, the BellSouth Management Savings
and Employee Stock Ownership Trust and the BellSouth Savings and Security ESOP
Trust (the "ESOP Trusts") issued medium-term notes in the amount of $550
million and $300 million, respectively, to fund the ESOP. Assets held in each
investment fund of the Plan, other than the assets held by the ESOP Trusts
described below, are unavailable to service the ESOP debt.
Assets held by the ESOP Trusts are generally unavailable to satisfy claims of
holders of debt securities issued by the ESOP Trusts to finance the acquisition
of common stock for the benefit of ESOP participants. The debt securities are
guaranteed by and are subject to direct recourse against BellSouth. BellSouth
contributes to the Trusts an amount necessary, net of ESOP dividends and
interest, to service the ESOP loan payments and to purchase any additional
shares required to meet the match obligation. Such contributions are subject to
the claims of such holders but are held at BellSouth and paid to the ESOP Trust
twice yearly to fund, on a same day basis, required payments by the ESOP Trusts
on the notes. Such contributions would not remain in the Plan Trusts unless
there were a default on the debt securities by the ESOP Trustee after having
received the required contributions from BellSouth. Therefore, holders of the
debt securities should not rely on the assets of the ESOP Trusts in arriving at
an investment decision with respect to the debt securities. For the year ended
December 31, 1994, BellSouth made cash contributions to the ESOP Trusts in the
amount of $63,017 for the purpose of servicing the guaranteed debt and cash
contributions in the amount of $36,789 to purchase additional shares to meet
the match obligations and expects to make similar contributions during the life
of the Plan.
A description of each debt issue is as follows:
BellSouth Management Savings and Employee Stock Ownership Trust:
<TABLE>
<CAPTION>
TITLE AMOUNT INTEREST RATE DUE DATE
----- -------- ------------- ------------
<S> <C> <C> <C>
Amortizing Medium-Term Notes, Series A...... $275,000 9.125% July 1, 2003
Amortizing Medium-Term Notes, Series A...... $275,000 9.19% July 1, 2003
--------
Total..................................... $550,000
BellSouth Savings and Security ESOP Trust:
<CAPTION>
TITLE AMOUNT INTEREST RATE DUE DATE
----- -------- ------------- ------------
<S> <C> <C> <C>
Amortizing Medium-Term Notes, Series A...... $300,000 9.125% July 1, 2003
</TABLE>
Maturities of the ESOP Trusts' long-term debt outstanding at December 31,
1994 are as follows:
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 THEREAFTER TOTAL
------- ------- ------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Maturities......... $46,589 $52,977 $59,898 $67,418 $75,589 $391,429 $693,900
======= ======= ======= ======= ======= ======== ========
</TABLE>
17
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
Investment activities of the Master Savings Trust are allocated to the Plan
based upon the total of each individual plan participant's share of the Master
Savings Trust investment activities during the period ended December 31, 1994.
The Master Savings Trust investment activities for the fiscal year ended
December 31, 1994, 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
--------- -------- --------
<S> <C> <C> <C>
Investment Activities:
Dividends on BellSouth Corporation common
shares........................................ $ 119,486 $118,094 $116,747
Other dividends................................ -- -- 5
Interest Income Fund income.................... 69,048 65,950 60,515
Other interest................................. 12,748 11,917 8,987
Net change in unrealized
appreciation/(depreciation) on investments.... (185,677) 292,122 (20,744)
Net realized gain on investments............... 14,693 31,658 33,416
Investment Manager Fees........................ (980) (973) (1,144)
--------- -------- --------
Net investment activities....................... $ 29,318 $518,768 $197,782
========= ======== ========
</TABLE>
18
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
BELLSOUTH STOCK FUND
<S> <C> <C> <C>
SHARES OF BELLSOUTH COMMON STOCK*--96.9%... 25,865,162 $1,038,790 $1,399,952
---------- ----------
TEMPORARY CASH INVESTMENTS--3.1%........... 25,985,797 43,954 44,436
---------- ----------
Total BellSouth Stock Fund--100%......... $1,082,744 $1,444,388
---------- ----------
BOND FUND
U.S. GOVERNMENT TREASURY NOTES--38.4%
U.S. Treasury Notes, 7.750%, 03/31/96..... $ 9,000 $ 9,686 $ 9,031
U.S. Treasury Notes, 7.625%, 05/31/96..... $ 7,500 8,162 7,513
U.S. Treasury Notes, 7.875%, 06/30/96..... $ 2,000 2,012 2,009
U.S. Treasury Notes, 5.875%, 02/15/04..... $ 10,300 9,232 8,982
U.S. Treasury Notes, 7.250%, 05/15/04..... $ 7,700 7,587 7,394
U.S. Treasury Notes, 9.250%, 01/15/96..... $ 8,000 9,037 8,153
U.S. Treasury Notes, 8.000%, 10/15/96..... $ 4,700 4,867 4,725
U.S. Treasury Notes, 8.500%, 11/15/95..... $ 5,500 5,990 5,561
---------- ----------
$ 56,573 $ 53,368
---------- ----------
U.S. GOVERNMENT TREASURY BONDS--25.4%
U.S. Treasury Bonds, 11.625%, 11/15/04.... $ 5,400 $ 7,188 $ 6,764
U.S. Treasury Bonds, 9.375%, 02/15/06..... $ 12,450 13,973 13,808
U.S. Treasury Bonds, 7.250%, 05/15/16..... $ 12,950 12,319 11,975
U.S. Treasury Bonds, 8.125%, 08/15/19..... $ 2,700 3,100 2,736
---------- ----------
$ 36,580 $ 35,283
---------- ----------
DOMESTIC CORPORATE OBLIGATIONS--34.6%
Cleveland Elec. Illum. Co.
9.100%, 07/22/96......................... $ 400 $ 430 $ 397
Cleveland Elec. Illum. Co.
9.450%, 12/01/97......................... $ 1,000 1,091 986
Cleveland Elec. Illum. Co.
8.700%, 06/03/96......................... $ 4,600 4,798 4,551
Commonwealth Edison Co.
9.010%, 08/01/96......................... $ 1,000 1,056 1,006
Commonwealth Edison Co.
8.920%, 08/15/96......................... $ 1,000 1,005 1,004
Commonwealth Edison Co.
5.500%, 07/15/95......................... $ 2,000 1,993 1,982
Eastern Edison Co.
9.250%, 12/01/95......................... $ 2,000 2,218 2,022
Houston Inds. Inc.
7.250%, 12/01/96......................... $ 1,500 1,500 1,471
Illinois Pwr. Co.
9.250%, 12/16/96......................... $ 2,000 2,085 2,033
</TABLE>
S-1
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
BOND FUND--(CONTINUED)
Pacificorp Secd.
8.690%, 07/16/96......................... $ 2,000 $ 2,000 $ 2,019
Pennsylvania Elec. Co. Secd.
7.450%, 10/28/96......................... $ 1,000 1,000 991
Texas Utils. Elec. Co.
10.625%, 09/01/20........................ $ 300 341 328
Virginia Elec. & Pwr. Co.
8.200%, 08/15/96......................... $ 1,000 1,037 1,004
Amax Inc.
9.875%, 06/13/01......................... $ 2,550 2,670 2,677
Commonwealth Edison Co.
9.050%, 08/01/96......................... $ 1,000 1,080 1,006
International Business Machs. Corp.
9.000%, 05/01/98......................... $ 1,500 1,608 1,509
Long Island Ltg. Co.
8.750%, 05/01/96......................... $ 3,450 3,521 3,462
McDermott Inc.
10.250%, 06/01/95........................ $ 3,000 3,241 3,033
USX-Marathon Group Inc.
8.875%, 09/15/97......................... $ 1,000 998 1,003
United Illum. Co.
7.250%, 10/02/95......................... $ 1,550 1,588 1,545
Caterpillar Finl. Svcs. Corp.
7.140%, 03/13/95......................... $ 1,000 1,023 1,001
Caterpillar Finl. Svcs. Corp.
7.140%, 04/10/95......................... $ 2,100 2,126 2,102
Chrysler Finl. Corp.
6.000%, 04/15/96......................... $ 2,000 2,058 1,953
Ford Motor Credit Co.
8.625%, 04/15/96......................... $ 2,500 2,744 2,518
General Mtr. Accep. Corp.
7.250%, 02/15/96......................... $ 2,500 2,623 2,482
General Mtr. Accep. Corp.
6.300%, 02/02/96......................... $ 700 720 688
General Mtr. Accep. Corp.
8.250%, 08/01/96......................... $ 3,250 3,245 3,241
---------- ----------
$ 49,799 $ 48,014
---------- ----------
POOLED CORPORATE OBLIGATIONS--0.0%......... 2,462 $ 4 $ 4
---------- ----------
TEMPORARY CASH INVESTMENTS--1.6%........... 1,334,539 $ 2,273 $ 2,282
---------- ----------
Total Bond Fund--100.0%.................. $ 145,229 $ 138,951
---------- ----------
</TABLE>
S-2
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
INDEXED STOCK FUND
BANKERS TRUST PYRAMID CASH PLUS FUND--3.1%. 8,002,595 $ 13,607 $ 13,684
---------- ----------
BANKERS TRUST PYRAMID EQUITY INDEX FUND*--
96.9%..................................... 425,188 $ 315,877 $ 426,227
---------- ----------
MISCELLANEOUS TOTAL--0%.................... 33 $ 1 $ 0
---------- ----------
Total Corporate Obligations--0.0%........ 583 $ 1 $ 1
---------- ----------
Total Indexed Stock Fund--100.0%......... $ 329,486 $ 439,912
---------- ----------
INTEREST INCOME FUND
ANNUITY CONTRACTS WITH INSURANCE
COMPANIES--96.5%:+
Aetna Life Insurance Company
(7.49%-9.81%)............................ $ 91,895 $ 91,895 $ 91,895
Allstate Life Insurance Company
(5.75%).................................. $ 10,857 10,857 10,857
BT Basic
(6.21%).................................. $ 102,923 102,923 102,923
CDC Investment Management Corp.
(4.906%-7.61%)........................... $ 65,140 65,140 65,140
Canada Life
(9.58%).................................. $ 5,214 5,214 5,214
Commonwealth Life Insurance Co.
(7.67%-9.37%)............................ $ 17,225 17,225 17,225
Connecticut General Life Insurance Co.
(8.28%-8.85%)............................ $ 21,763 21,763 21,763
Hartford Life
(7.22%-8.71%)............................ $ 34,731 34,731 34,731
John Hancock Mutual Life
(7.13%).................................. $ 88,735 88,735 88,735
Massachusetts Mutual
(9.37%-9.70%)............................ $ 74,089 74,089 74,089
Metropolitan Life Insurance Com.
(5.79%-8.75%)............................ $ 104,444 104,444 104,444
Mutual Benefit Life Insurance Co.
(12.75%)................................. $ 3,251 3,251 3,251
New York Life Insurance Co.
(5.39%-8.97%)............................ $ 77,904 77,904 77,904
Pacific Mutual Life
(9.39%).................................. $ 30,027 30,027 30,027
Peoples Security Life Insurance Co.
(5.03%-8.21%)............................ $ 95,165 95,165 95,165
Provident National
(5.13%-8.53%)............................ $ 118,172 118,172 118,172
</TABLE>
S-3
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
INTEREST INCOME FUND--(CONTINUED)
<S> <C> <C> <C>
Prudential Insurance Company of America
(8.93%-9.35%)............................ $ 45,933 $ 45,933 $ 45,933
State Mutual Life
(8.86%).................................. $ 10,650 10,650 10,650
Sun Life Association, Canada
(5.78%-5.79%)............................ $ 21,472 21,472 21,472
Union Bank of Switzerland
(5.00%-7.38%)............................ $ 28,309 28,309 28,309
---------- ----------
$1,047,899 $1,047,899
---------- ----------
TEMPORARY CASH INVESTMENTS--3.5%........... $ 21,945 $ 37,441 $ 37,525
---------- ----------
CORPORATE OBLIGATIONS--0%.................. 2,462 $ 3 $ 4
---------- ----------
INTEREST INCOME FUND--100%................. $1,072,306 $1,085,343 $1,085,428
---------- ----------
LOAN FUND
LOANS TO PARTICIPANTS--99.9%............... $ 47,581 $ 47,581 $ 47,581
---------- ----------
TEMPORARY CASH INVESTMENTS--0.1%........... $ 37 $ 37 $ 37
---------- ----------
Total Loan Fund.......................... $ 47,618 $ 47,618
---------- ----------
BALANCED FUND
TEMPORARY CASH INVESTMENTS--10%............ 1,844,439 $ 3,133 $ 3,154
---------- ----------
U.S. Treasury Bill, Exp. 1/12/95--........ $ 440 $ 427 $ 427
---------- ----------
CORPORATE OBLIGATIONS--90%................. 8,147,921 $ 12,366 $ 12,179
---------- ----------
BT Equity Index Fund...................... 20,045 $ 19,864 $ 20,094
---------- ----------
OTHER INVESTMENTS--0%......................
S&P 500 Futures, March 1995............... 12,500 $ 0 $ 0
U.S. Treasury Bond Futures, March 1995.... 6,300,000 $ 0 $ 0
---------- ----------
Total Balanced Fund...................... $ 35,790 $ 35,854
---------- ----------
EMPLOYEE STOCK OWNERSHIP PLAN
SHARES OF BELLSOUTH COMMON STOCK*--96.5%... 18,760,577 $1,005,328 $1,013,873
---------- ----------
TEMPORARY CASH INVESTMENTS--3.5%........... 21,678,874 $ 36,788 $ 37,074
---------- ----------
Total Employee Stock Ownership Fund...... $1,042,116 $1,050,947
---------- ----------
MUTUAL FUND WINDOW
MUTUAL FUNDS--99.4%
Berger 100 Fund........................... 1,194,698 $ 18,488 $ 18,745
DFA International Value II Fund........... 863,944 $ 8,538 $ 8,225
DFA U.S. Large Cap Value II Fund.......... 148,252 $ 1,470 $ 1,419
DFA U.S. Small Cap Value II Fund.......... 667,035 $ 6,722 $ 6,490
20th Century Growth Investors Fund........ 258,182 $ 5,552 $ 4,839
---------- ----------
Total Equity Mutual Funds................ $ 40,770 $ 39,718
---------- ----------
</TABLE>
S-4
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
-----------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- --------- ---------- ----------
<S> <C> <C> <C>
MUTUAL FUND WINDOW--(CONTINUED)
TEMPORARY CASH INVESTMENTS--0.6%
BT Pyramid Cash Plus Fund......................... 933 $ 2 $ 2
Cash in Transit................................... $ 224 $ 224 $ 224
Schwab Retirement Money Fund...................... $ 1 $ 1 $ 1
---------- ----------
Total Temporary Cash Investments................. $ 227 $ 227
---------- ----------
Total Mutual Fund Window........................ $ 40,997 $ 39,945
---------- ----------
TOTAL INVESTMENTS................................... $3,809,323 $4,283,043
========== ==========
</TABLE>
- --------
NOTES
Percentages represent the percentage of the investments of each fund of the
Master Savings Trust.
* Investment represents 5% or more of the Net Assets of the Master Savings
Trust.
+ The contracts with these insurance companies (interest rates indicated in
parentheses) guarantee the repayment of principal and the crediting of
interest resulting in a composite effective annual interest rate of 6.95%
for the year 1994. The timing of the remittance of participating employee
contributions and other participating employee-directed transactions may
cause the actual yield to vary from this rate. The composite interest rate
is subject to annual adjustment.
S-5
<PAGE>
EXHIBIT 99B
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994
or
[_] Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act
of 1934
For the transition Commission file number
period from __ to ___ 1-8607
BellSouth Savings and
Security Plan
BELLSOUTH CORPORATION
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Management Savings Plan Committee of the
BellSouth Savings and Security Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the BellSouth Savings and Security Plan as of December 31, 1994 and
1993, and the related statements of changes in net assets available for plan
benefits for each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1994 and 1993, and the changes in net assets available for
plan benefits for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department for Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statement of net assets available for plan
benefits and the statement of changes in net assets available for plan benefits
is presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedule and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 16, 1995
1
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of BellSouth Corporation on Form S-8 (File Nos. 33-30772 and 33-38265) of our
report dated June 16, 1995, on our audits of the financial statements of the
BellSouth Savings and Security Plan as of December 31, 1994 and 1993, and for
each of the three years in the period ended December 31, 1994, and the
accompanying financial statement schedule as of December 31, 1994, which report
is included in this Annual Report on Form 11-K.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 16, 1995
2
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN BALANCED FUND ---------------------
FUND FUND FUND FUND FUND FUND WINDOW ALLOCATED UNALLOCATED TOTAL
ASSETS --------- ------ ------- -------- ------ -------- ------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Allocated share of trust
net assets.............. $641,742 $5,690 $33,632 $319,795 $6,590 $4,495 $4,864 $ -- $ -- $1,016,808
Investment in BellSouth
Savings and Security
Employee Stock Ownership
Plan Trust:
BellSouth shares of
common stock allocated
to participants........ -- -- -- -- -- -- -- 184,245 -- 184,245
BellSouth shares of
common stock held for
future allocation...... -- -- -- -- -- -- -- -- 201,809 201,809
Temporary cash
investments............ -- -- -- -- -- -- -- 11,858 6,627 18,485
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
Total Investments..... 641,742 5,690 33,632 319,795 6,590 4,495 4,864 196,103 208,436 1,421,347
Allotments and
contributions
receivable.............. 1,053 -- 74 698 -- 4 -- 3,873 -- 5,702
Fund, BellSouth
Management Savings and
Employee Stock Ownership
Plan, BellSouth
Enterprises Retirement
Savings Plan and other
transfers receivable--
net..................... 6,887 -- -- -- -- -- 359 -- -- 7,246
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
Total Assets.......... 649,682 5,690 33,706 320,493 6,590 4,499 5,223 199,976 208,436 1,434,295
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
LIABILITIES
Distributions payable... 3,527 50 116 2,165 -- 105 5 453 -- 6,421
Fund, BellSouth
Management Savings and
Employee Stock Ownership
Plan, BellSouth
Enterprises Retirement
Savings Plan and other
transfers payable--net.. -- 527 1,345 4,681 655 419 -- 32 -- 7,659
Notes payable........... -- -- -- -- -- -- -- -- 237,249 237,249
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
Total liabilities..... 3,527 577 1,461 6,846 655 524 5 485 237,249 251,329
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
Net Assets Available for
Plan Benefits........... $646,155 $5,113 $32,245 $313,647 $5,935 $3,975 $5,218 $199,491 $(28,813) $1,182,966
======== ====== ======= ======== ====== ====== ====== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN ---------------------
FUND FUND FUND FUND FUND ALLOCATED UNALLOCATED TOTAL
--------- ------ ------- -------- ------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Allocated share of trust
net assets.............. $647,395 $5,095 $28,947 $293,422 $3,941 $ -- $ -- $978,800
Investment in BellSouth
Savings and Security Em-
ployee Stock Ownership
Plan Trust:
BellSouth shares of
common stock allocated
to participants........ -- -- -- -- -- 153,615 -- 153,615
BellSouth shares of
common stock held for
future allocation...... -- -- -- -- -- -- 240,318 240,318
Temporary cash invest-
ments.................. -- -- -- -- -- 6,000 7,817 13,817
-------- ------ ------- -------- ------ -------- ------- ----------
Total Investments..... 647,395 5,095 28,947 293,422 3,941 159,615 248,135 1,386,550
Allotments and contribu-
tions receivable........ 170 15 37 167 -- 2,902 -- 3,291
Fund, BellSouth Manage-
ment Savings and Em-
ployee Stock Ownership
Plan, BellSouth Enter-
prises Retirement Sav-
ings Plan and other
transfers receivable--
net..................... 246 -- 158 -- 482 -- -- 886
-------- ------ ------- -------- ------ -------- ------- ----------
Total Assets.......... 647,811 5,110 29,142 293,589 4,423 162,517 248,135 1,390,727
-------- ------ ------- -------- ------ -------- ------- ----------
LIABILITIES
Distributions payable... 3,867 7 120 2,199 175 281 -- 6,649
Fund, BellSouth Manage-
ment Savings and Em-
ployee Stock Ownership
Plan, BellSouth Enter-
prises Retirement Sav-
ings Plan and other
transfers payable--net.. -- 6 -- 662 -- 14 -- 682
Notes payable........... -- -- -- -- -- -- 253,252 253,252
-------- ------ ------- -------- ------ -------- ------- ----------
Total Liabilities..... 3,867 13 120 2,861 175 295 253,252 260,583
-------- ------ ------- -------- ------ -------- ------- ----------
Net Assets Available for
Plan Benefits........... $643,944 $5,097 $29,022 $290,728 $4,248 $162,222 $(5,117) $1,130,144
======== ====== ======= ======== ====== ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN BALANCED FUND ----------------------
FUND FUND FUND FUND FUND FUND WINDOW ALLOCATED UNALLOCATED TOTAL
--------- ------ ------- -------- ------ -------- ------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December
31, 1993................ $643,944 $5,097 $29,022 $290,728 $4,248 $ -- $ -- $162,222 $ (5,117) $1,130,144
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
Employee Contributions.. 36,310 1,480 6,692 32,308 -- 1,201 -- -- -- 77,991
Transfer of
participants' balances--
net..................... 7,566 (1,155) (2,759) (11,440) 1,515 2,884 5,223 -- -- 1,834
Employing company
contributions........... -- -- -- -- -- -- -- 25,178 -- 25,178
Supplemental
contributions........... -- -- -- -- -- -- -- -- 23,364 23,364
Allocation of shares to
participants............ -- -- -- -- -- -- -- 24,402 (24,402) --
Transfer for loan
repayment............... -- -- -- -- -- -- -- (3,041) 3,041 --
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
Total Allotments,
Contributions,
Allocations and
Transfers............... 43,876 325 3,933 20,868 1,515 4,085 5,223 46,539 2,003 128,367
Allocated share of Trust
investment activities... (13,460) 3 452 19,869 172 (35) -- (6,708) (2,938) (2,645)
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
Total Additions......... 30,416 328 4,385 40,737 1,687 4,050 5,223 39,831 (935) 125,722
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
Less: Distributions to
Participants............ 28,205 312 1,162 17,818 -- 75 5 2,562 -- 50,139
Interest on Notes
Payable............... -- -- -- -- -- -- -- -- 22,761 22,761
-------- ------ ------- -------- ------ ------ ------ -------- -------- ----------
Net Assets Available
for Plan Benefits,
December 31, 1994...... $646,155 $5,113 $32,245 $313,647 $5,935 $3,975 $5,218 $199,491 $(28,813) $1,182,966
======== ====== ======= ======== ====== ====== ====== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN ----------------------
FUND FUND FUND FUND FUND ALLOCATED UNALLOCATED TOTAL
--------- ------ ------- -------- ------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December
31, 1992................ $546,539 $2,189 $18,422 $256,826 $1,145 $106,470 $(26,236) $ 905,355
-------- ------ ------- -------- ------ -------- -------- ----------
Employee contributions.. 32,620 1,245 5,998 33,218 -- -- -- 73,081
Transfer of
participants'
balances--net........... (6,932) 1,568 3,401 (989) 3,206 -- -- 254
Employing company
contributions........... -- -- -- -- -- 17,112 -- 17,112
Supplemental
Contributions........... -- -- -- -- -- -- 23,138 23,138
Allocation of Shares to
Participants............ -- -- -- -- -- 23,280 (23,280) --
Transfer for loan
repayment............... -- -- -- -- -- (3,086) 3,086 --
-------- ------ ------- -------- ------ -------- -------- ----------
Total Allotments,
Contributions,
Allocations and
Transfers............... 25,688 2,813 9,399 32,229 3,206 37,306 2,944 113,585
Allocated share of Trust
investment activities... 99,292 317 2,258 18,807 96 19,992 42,282 183,044
-------- ------ ------- -------- ------ -------- -------- ----------
Total Additions......... 124,980 3,130 11,657 51,036 3,302 57,298 45,226 296,629
-------- ------ ------- -------- ------ -------- -------- ----------
Less: Distributions to
Participants............ 27,575 222 1,057 17,134 199 1,546 -- 47,733
Interest on Notes
Payable............... -- -- -- -- -- -- 24,107 24,107
-------- ------ ------- -------- ------ -------- -------- ----------
Net Assets Available
for Plan Benefits,
December 31, 1993...... $643,944 $5,097 $29,022 $290,728 $4,248 $162,222 $ (5,117) $1,130,144
======== ====== ======= ======== ====== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1992
(IN THOUSANDS)
<TABLE>
<CAPTION>
EMPLOYEE STOCK
BELLSOUTH INDEXED INTEREST OWNERSHIP PLAN
STOCK BOND STOCK INCOME LOAN ----------------------
FUND FUND FUND FUND FUND ALLOCATED UNALLOCATED TOTAL
--------- ------ ------- -------- ------ --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December
31, 1991................ $534,213 $ 925 $ 7,671 $227,300 $ -0- $ 65,775 $(16,358) $819,526
-------- ------ ------- -------- ------ -------- -------- --------
Employee contributions.. 32,035 516 3,704 32,697 -- -- -- 68,952
Transfers of
participants'
balances--net........... (8,265) 710 6,554 (927) 1,145 -- -- (783)
Employing company
contributions........... -- -- -- -- -- 18,811 -- 18,811
Supplemental
Contributions........... -- -- -- -- -- -- 22,668 22,668
Allocation of Shares to
Participants............ -- -- -- -- -- 20,215 (20,215) --
Transfer for loan
repayment............... -- -- -- -- -- (2,080) 2,080 --
-------- ------ ------- -------- ------ -------- -------- --------
Total Allotments,
Contributions,
Allocations and
Transfers.............. 23,770 1,226 10,258 31,770 1,145 36,946 4,533 109,648
Allocated share of Trust
investment activities... 23,682 139 1,325 18,250 -- 4,743 10,901 59,040
-------- ------ ------- -------- ------ -------- -------- --------
Total Additions........ 47,452 1,365 11,583 50,020 1,145 41,689 15,434 168,688
-------- ------ ------- -------- ------ -------- -------- --------
Less: Distributions to
Participants............ 35,126 101 832 20,494 -- 994 -- 57,547
Interest on Notes
Payable............... -- -- -- -- -- -- 25,312 25,312
-------- ------ ------- -------- ------ -------- -------- --------
Net Assets Available for
Plan Benefits, December
31, 1992................ $546,539 $2,189 $18,422 $256,826 $1,145 $106,470 $(26,236) $905,355
======== ====== ======= ======== ====== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
1. PLAN DESCRIPTION (WHOLE DOLLARS)--
The BellSouth Savings and Security Plan (the "Plan") was established by
BellSouth Corporation ("BellSouth") to provide a convenient way for non-
salaried employees to save for their retirement on a long-term basis and to
acquire an ownership interest in BellSouth. The assets of the Plan are held in
the BellSouth Master Savings Trust (the "Master Savings Trust") and are
commingled with the assets of the BellSouth Enterprises Retirement Savings Plan
and the assets of the BellSouth Management Savings and Employee Stock Ownership
Plan for investment purposes.
Highlights of the Plan are described in the Prospectus/Summary Plan
Description, as supplemented ("SPD"), which is available to all participants. A
copy of the SPD can be obtained by calling the BellSouth Participant Service
Center at 1-800-995-1000 or 1-615-333-9000 via company telephone. In addition,
copies of the Plan, trust agreement and other related documents which include
details of the Plan can be obtained by writing to: Secretary, BellSouth Savings
Plan Committee, Room 7B09, 1155 Peachtree Street, N.E., Atlanta, Georgia 30309-
3610.
The following are changes that were adopted effective January 1, 1994 unless
otherwise noted:
Participants can direct their investment to a newly established fund called
the Balanced Fund. The structure of the Balanced Fund is designed to allocate
assets between stocks, bonds and cash, and to facilitate altering the mix as
necessary when market conditions change. The objective is to achieve higher
returns by exposing the fund's assets to that mix of stocks, bonds and cash
assets that the manager believes is the optimum. The Fund is actively managed
by First Quadrant Corporation. The equity portion is invested in the Bankers
Trust BT PYRAMID Equity Index Fund, which tracks the S&P 500 index; the bond
portion is invested in the Bankers Trust BT PYRAMID Broad Market Fixed Income
Fund, which tracks the Lehman Brothers Aggregate Bond Index; and the cash is
invested in the Bankers Trust BT PYRAMID Directed Short Term Investment Fund
("STIF").
Effective July 15, 1994, participants can transfer money already in their
savings plan funds to any of five mutual funds, collectively referred to as the
Mutual Fund Window (the "Window"). Participants can transfer up to 100 percent
of their existing investment in the Interest Income Fund and up to 80 percent
of their then existing investment in all other funds. Funds in the Window are
valued and may be traded on a daily basis. See footnote 8 for financial results
related to the individual funds included in the Window.
On January 1, 1994, the unit values of each core fund (BellSouth Stock Fund,
Bond Fund, Indexed Stock Fund and Interest Income Fund) of the Plan were
reunitized or restated. Each fund was given a "new start" beginning with a unit
value of 1.000000. At the same time, the number of units credited to the
participants' accounts was increased, so that the number of units owned equaled
the dollar amount invested as of January 1, 1994.
The annual administrative fee per participant decreased from $27 to $22 in
1994. This fee will pay for up to four fund transfers, four changes in how
participant contributions are invested, and four changes in the amount saved
from each paycheck. More than four changes in any category will cost an extra
$2 per transaction. In addition, a $6 charge will be applied for transactions
made through a service representative if these transactions can be made through
the automated voice response system ("VRS"). Participants will not be charged
for using a service representative to help with transactions that cannot be
handled through VRS.
Participants can transfer balances between the Bond Fund and the Interest
Income Fund. Previously, this type of transfer was restricted. Participants
cannot transfer from and into the same fund at the same time.
Participants who have retired or left the company and have elected to leave
money in the Plan, can make two (2) withdrawals per year. There is no charge
for the first withdrawal. But to cover administrative costs, a $25 processing
fee will be charged for the second withdrawal. In addition, these participants
can get
8
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
1. PLAN DESCRIPTION (CONTINUED)--
the money that remains in their accounts in two new ways; annual installments
for 10 years or a series of payouts for the rest of their lives.
The following are changes that will affect plan participants during 1995:
Effective April 1, 1995 participants will be allowed to have two outstanding
loans from the Plan. Previously only one outstanding loan at a time was
available. In addition, the maximum amount available for a loan will include
any amounts rolled over to the Plan from another qualified plan. The amount
available for any loan will be the lesser of (1) 50% of the total pre-tax
account balance and rollover amounts or (2) $50,000 reduced by the highest
outstanding loan balance during the last twelve months. The loan payoff period
will remain two to five years. However, the entire loan balance may be prepaid
once the loan has been outstanding for one year. A $5 annual maintenance fee
will be charged for loans initiated on or after April 1, 1995. The maintenance
fee is in addition to the loan initiation fee of $50.
The annual administrative fee per participant will be $22 in 1995. This
represents no change in the fee amount from 1994. This fee will pay for up to
four fund transfers, four changes in how participant contributions are
invested, and four changes in the amount saved from each paycheck. More than
four changes in any category will cost an extra $2 per transaction. In
addition, a $6 charge will be applied for transactions made through a service
representative if these transactions can be made through the automated voice
response system ("VRS"). Participants will not be charged for using a service
representative to help with transactions that cannot be handled through VRS. If
a participant has one or more investments in the Mutual Fund Window there is a
$1.50 per month maintenance charge and a $2.00 fee per transaction within the
Window.
Bankers Trust Company is the Trustee for the Master Savings Trust. Bankers
Trust Company is also the recordkeeper and service center provider for the
Plan.
2. ACCOUNTING POLICIES
With respect to the Statement of Changes in Net Assets Available for Plan
Benefits for the years presented, Allocated Share of Trust Investment
Activities includes net appreciation/(depreciation) in fair value of
investments which represents the sum of realized gains, net of realized losses
and the net change in unrealized appreciation/(depreciation) on the
investments.
The values of investments in the Master Savings Trust are determined as
follows:
Shares of BellSouth common stock and other securities listed on a
national stock exchange are valued on the basis of the closing price per
share on December 31, 1994 and December 31, 1993, as reported on the New
York Stock Exchange composite tape or, if no sales were made on that date,
at the closing price on the next preceding day on which sales were made;
Over-the-counter securities and government obligations are valued based
on the bid prices on December 31, 1994 and 1993 from published sources
where available and, if not available, from other sources considered
reliable; and
Contracts with insurance companies are valued at principal plus
reinvested interest.
Purchases and sales of securities are reflected as of the trade date.
Realized gains and losses on sales of investments are determined on the basis
of average cost.
Dividend income is recognized on the ex-dividend date. Interest earned on
investments is recognized on the accrual basis.
9
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
3. UNITS OF THE PLAN (WHOLE DOLLARS)--
Participants in the Plan can invest their contributions among five core
funds; BellSouth Stock Fund, Indexed Stock Fund, Interest Income Fund, Bond
Fund and, since January 1, 1994, the Balanced Fund. The interest of a
participant in each type of investment of the Plan is represented by units as
described in Section 8 of the Plan. The units of each fund of the Plan were
reunitized or restated on January 1, 1994 except for the Balanced Fund which
was a new investment option at that date. Each fund was given a "new start"
beginning with a unit value of 1.000000. At the same date the number of units
credited to the participants' accounts was increased, so that the number of
units owned equaled the dollar amount invested.
The number and value of units as of December 31, 1994 and December 31, 1993
were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
------------------------------ ------------------------------
TYPE OF INVESTMENT NUMBER OF UNITS VALUE PER UNIT NUMBER OF UNITS VALUE PER UNIT
- ------------------ --------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
BellSouth Stock Fund.... 659,403,300 $ .9799 133,697,554 $4.8164
Indexed Stock Fund...... 31,849,462 1.0124 3,296,146 1.5462
Bond Fund............... 5,100,850 1.0024 18,562,444 1.5635
Interest Income Fund.... 293,266,649 1.0694 66,538,889 4.3693
Balanced Fund........... 4,097,176 .9702 -- --
</TABLE>
The number and value of units by month for each fund during 1994 were as
follows:
<TABLE>
<CAPTION>
BELLSOUTH STOCK INDEXED STOCK INTEREST INCOME
FUND BOND FUND FUND FUND BALANCED FUND
-------------------- ------------------ ------------------- -------------------- ------------------
NUMBER VALUE NUMBER VALUE NUMBER VALUE NUMBER VALUE NUMBER VALUE
1994 OF UNITS PER UNIT OF UNITS PER UNIT OF UNITS PER UNIT OF UNITS PER UNIT OF UNITS PER UNIT
---- ----------- -------- --------- -------- ---------- -------- ----------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January............ 642,112,071 1.071509 5,315,934 1.008528 29,345,047 1.034370 290,671,212 1.005724 1,860,005 1.000000
February........... 644,752,052 0.972221 5,354,604 0.998263 29,787,508 1.005956 288,918,601 1.010953 2,580,715 0.978002
March.............. 644,883,716 1.008379 5,485,512 0.989702 30,764,363 0.962187 288,305,187 1.016712 3,416,607 0.948562
April.............. 643,721,449 1.072665 5,673,900 0.985668 31,794,093 0.974330 291,486,624 1.022342 3,897,349 0.952515
May................ 644,361,950 1.048315 5,665,891 0.986050 32,108,002 0.990322 291,822,471 1.028084 4,090,687 0.958619
June............... 644,465,498 1.087768 5,583,195 0.987210 32,448,948 0.966494 293,482,944 1.033919 4,121,797 0.944350
July............... 644,666,020 1.113038 5,434,105 1.001992 32,165,434 0.998387 295,139,670 1.039865 4,205,027 0.971879
August............. 647,719,404 1.058125 5,303,545 1.002567 31,470,554 1.039168 293,667,491 1.045723 4,191,583 0.987774
September.......... 651,955,247 0.995574 5,230,500 0.994575 31,111,984 1.013367 291,774,865 1.051353 4,194,140 0.964800
October............ 657,393,070 0.965154 5,062,806 0.995124 31,275,122 1.035219 290,970,931 1.057387 4,061,777 0.973546
November........... 658,870,448 0.942376 5,082,634 0.994898 31,495,382 0.997434 291,698,740 1.063316 4,061,770 0.957276
December........... 659,403,300 0.979909 5,100,850 1.002406 31,849,462 1.012435 293,266,649 1.069494 4,097,176 0.970189
</TABLE>
The net asset values by month, beginning July 1994, of each fund included in
the Mutual Fund Window were as follows:
<TABLE>
<CAPTION>
DFA DFA U.S. DFA U.S. 20TH CENTURY
BERGER INTERNATIONAL LARGE CAP SMALL CAP GROWTH
1994 100 FUND VALUE II FUND VALUE II FUND VALUE II FUND INVESTORS FUND
---- -------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
July......... $14.85 $10.00 $10.00 $10.00 $21.78
August....... $15.79 $10.01 $10.16 $10.30 $22.77
September.... $15.96 $9.66 $9.86 $10.26 $22.13
October...... $16.46 $10.06 $10.04 $10.11 $22.99
November..... $15.80 $9.47 $9.48 $9.65 $21.74
December..... $15.69 $9.52 $9.57 $9.73 $18.74
</TABLE>
10
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
3. UNITS OF THE PLAN (CONTINUED)--
At December 31, 1994, the number of participants currently contributing to
the Plan by investment direction as described in Section 7 of the Plan was as
follows:
<TABLE>
<CAPTION>
NO.
FUND DESCRIPTION PARTICIPANTS
---------------- ------------
<S> <C>
Entirely in BellSouth Stock Fund............................... 15,579
Entirely in Bond Fund.......................................... 119
Entirely in Indexed Stock Fund................................. 1,369
Entirely in Interest Income Fund............................... 15,655
Entirely in Balanced Fund...................................... 291
Equally in BellSouth Stock Fund and Bond Fund.................. 296
Equally in BellSouth Stock Fund and Indexed Stock Fund......... 1,221
Equally in BellSouth Stock Fund and Interest Income Fund....... 8,438
Equally in BellSouth Stock Fund and Balanced Fund.............. 149
Equally in Bond Fund and Indexed Stock Fund.................... 201
Equally in Indexed Stock Fund and Interest Income Fund......... 573
Equally in Bond Fund, Indexed Stock Fund and Interest Income
Fund.......................................................... 119
Equally in BellSouth Stock Fund, Bond Fund and Indexed Stock
Fund.......................................................... 196
Equally in BellSouth Stock Fund, Indexed Stock Fund and
Interest Income Fund.......................................... 296
Equally in BellSouth Stock Fund, Bond Fund, Indexed Stock Fund
and Interest Income Fund...................................... 310
Various Fund combinations*..................................... 616
------
Total Participants........................................... 45,428
======
</TABLE>
- --------
* Includes all other investment directions having less than 100 participants.
Participants cannot make contributions directly to the Mutual Fund Window.
Mutual Fund Window investments are made via transfer from contributions made to
the five core funds. See footnote 1 for additional information.
Since all employing company contributions are made to the ESOP, all employees
currently contributing to the Plan are participants in the ESOP.
4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated July 12, 1989, that the Plan and related trust meet the
requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and is exempt from Federal Income Taxes under Section 501(a) of
the Code. The Plan has been amended since receiving the determination letter.
On March 17, 1995, the Plan was submitted to the Internal Revenue Service for a
favorable determination letter with respect to the effect of the amendment on
the continued qualification of the Plan. However, the Plan administrator and
the Plan's tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the Code.
For information on the Federal income tax effects on the employee with
respect to the Plan, participants should refer to the Plan Prospectus.
5. CONTRIBUTIONS
Employing company contributions reflect reductions for forfeited
contributions as described in the Plan document.
11
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
5. CONTRIBUTIONS (CONTINUED)--
Employee contributions to the Plan are accrued based upon authorized basic
and supplemental contributions. The maximum basic contribution rate was $50 a
week during 1994. No more than 12% of compensation may be contributed on a
before-tax basis. Total before-tax and after-tax contributions may not exceed
15% of compensation.
The employing company makes contributions in respect of the first 6% of each
participant's compensation contributed. From January 1994 through March 1994,
employing company matching contributions were accrued based on an amount equal
to 59% of the authorized basic contribution of each participating employee.
From April 1994 through December 1994, the matching contribution was 71% for
employees of BellSouth Advertising and Publishing Corporation and 76% for
employees of all other participating companies. The rate of the employing
company matching contribution remains in effect for a twelve month period from
April 1 through March 31. Employing company matching contributions will vest
upon a participant's completion of three years service. One year of vesting
service is earned upon a participants' completion of 1,000 work hours during
any year.
Beginning January 1, 1992, certain BellSouth Enterprises, Inc. employees'
contributions, previously invested in the Plan, began to be invested in the
BellSouth Enterprises Retirement Savings Plan. During 1992, assets totaling
$75,544.7, attributable to those participants, were transferred to the
BellSouth Enterprises Retirement Savings Plan based on current investment
directions. ESOP amounts for these participants were not transferred because
the BellSouth Enterprises Retirement Savings Plan does not have an ESOP
feature. These transfers are included in the 1992 Statement of Changes in Net
Assets under transfers of participants' balances. Effective January 1, 1994,
contributions previously made to the BellSouth Enterprises Retirement Savings
Plan by certain employees of BellSouth Enterprises headquarters began to be
invested in the Plan.
6. TERMINATION PRIORITIES
BellSouth intends to continue the Plan indefinitely but reserves the right to
terminate or amend it. In the event the Plan is terminated, subject to
conditions set forth in the Employee Retirement Income Security Act of 1974, as
amended, participants will receive written notification of plan termination at
least 30 days in advance. The participant may then elect to leave all units in
his/her account until they leave the Company or take a lump sum distribution of
the value of his/her units.
7. PLAN EXPENSES
Investment manager fees are paid by the Master Savings Trust. Investment
manager fees included in allocated share of Trust investment activities in the
1994 Statement of Changes in Net Assets were $12.6, $9.3, $144.6 and $3.4 for
the Bond Fund, Indexed Stock Fund, Interest Income Fund and Balanced Fund,
respectively.
Prior to January 1, 1993 expenses that related primarily to the costs of
administering the Plan were paid by the employing companies. Since January 1,
1993, the majority of the administrative expenses of the Plan have been charged
to Plan participants (see Note 1).
12
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
8. MUTUAL FUND WINDOW
The Mutual Fund Window's net assets available for plan benefits are comprised
of the following funds at December 31, 1994:
<TABLE>
<CAPTION>
DFA DFA DFA 20TH CENTURY MUTUAL FUND
BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS WINDOW
FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL
---------- ------------- -------------- -------------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Allocated share of trust
net assets............. $2,876 $560 $208 $394 $826 $4,864
Investment in BellSouth
Savings and Security
Employee Stock
Ownership Plan Trust:
BellSouth shares of
common stock allocated
to participants....... -- -- -- -- -- --
BellSouth shares of
common stock held for
future allocation..... -- -- -- -- -- --
Temporary cash
investments........... -- -- -- -- -- --
------ ---- ---- ---- ---- ------
Total Investments..... 2,876 560 208 394 826 4,864
Allotments and
contributions
receivable............. -- -- -- -- -- --
Fund, BellSouth
Management Savings and
Employee Stock
Ownership Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
receivable--net........ 134 22 16 68 119 359
------ ---- ---- ---- ---- ------
Total Assets.......... 3,010 582 224 462 945 5,223
------ ---- ---- ---- ---- ------
LIABILITIES
Distributions payable... 1 -- -- 4 -- 5
Fund, BellSouth
Management Savings and
Employee Stock
Ownership Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
payable--net........... -- -- -- -- -- --
Notes payable........... -- -- -- -- -- --
------ ---- ---- ---- ---- ------
Total liabilities..... 1 -- -- 4 -- 5
------ ---- ---- ---- ---- ------
Net Assets Available for
Plan Benefits.......... $3,009 $582 $224 $458 $945 $5,218
====== ==== ==== ==== ==== ======
</TABLE>
13
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
8. MUTUAL FUND WINDOW (CONTINUED)--
The Mutual Fund Window's changes in net assets available for plan benefits
are comprised of the following funds for the year ended December 31, 1994:
<TABLE>
<CAPTION>
DFA DFA DFA 20TH CENTURY MUTUAL FUND
BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS WINDOW
FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL
---------- ------------- -------------- -------------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December
31, 1993............... $ -- $-- $-- $-- $-- $ --
------ ---- ---- ---- ---- ------
Employee Contributions.. -- -- -- -- -- --
Transfer of
participants'
balances--net.......... 3,010 582 224 462 945 5,223
Employing company
contributions.......... -- -- -- -- -- --
Supplemental
contributions.......... -- -- -- -- -- --
Allocation of shares to
participants........... -- -- -- -- -- --
Transfer of loan
repayment.............. -- -- -- -- -- --
------ ---- ---- ---- ---- ------
Total Allotments,
Contributions,
Allocations and
Transfers.............. 3,010 582 224 462 945 5,223
Allocated share of Trust
investment activities.. -- -- -- -- -- --
------ ---- ---- ---- ---- ------
Total Additions......... 3,010 582 224 462 945 5,223
------ ---- ---- ---- ---- ------
Less: Distributions to
Participants........... 1 -- -- 4 -- 5
Interest on Notes
Payable.............. -- -- -- -- -- --
------ ---- ---- ---- ---- ------
Net Assets Available
for Plan Benefits,
December 31, 1994..... $3,009 $582 $224 $458 $945 $5,218
====== ==== ==== ==== ==== ======
</TABLE>
14
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST
The assets of the Plan are held in the Master Savings Trust effective May 1,
1989 and are commingled with the assets of the BellSouth Enterprises Retirement
Savings Plan and the assets of the BellSouth Management Savings and Employee
Stock Ownership Plan. The assets of the BellSouth Employee Stock Ownership Plan
("PAYSOP") are held in a sub-trust of the Master Savings Trust. This sub-trust
is not included in the following Master Savings Trust information.
The Plan's allocated share of the total net assets of all funds in the Master
Savings Trust at December 31, 1994 and 1993 was 31.5478% and 31.9427%,
respectively. The Plan's allocated share of the net assets of each fund in the
Master Savings Trust at December 31, 1994 and 1993 was as follows:
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
BellSouth Stock Fund..................................... 44.74181% 45.01869%
Indexed Stock Fund....................................... 7.65149% 6.86764%
Bond Fund................................................ 4.02274% 3.20848%
Interest Income Fund..................................... 29.49415% 29.14667%
Loan Fund................................................ 13.89768% 11.10671%
Balanced Fund............................................ 12.53545% --
Mutual Fund Window....................................... 12.17727% --
</TABLE>
15
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
The financial position of the Master Savings Trust at December 31, 1994 and
1993 was as follows:
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Assets: Investment at value:
BellSouth Stock Fund:
BellSouth common shares................................ $1,396,036 $1,417,269
Temporary cash investments............................. 44,436 20,006
Bond Fund:
Securities............................................. 136,669 155,211
Temporary cash investments............................. 2,282 797
Indexed Stock Fund:
Equity Index Fund...................................... 426,228 419,305
Temporary cash investments............................. 13,684 2,379
Interest Income Fund:
Contracts.............................................. 1,047,899 982,482
Temporary cash investments............................. 37,529 27,934
Loan Fund:
Loans to participants.................................. 47,581 36,066
Temporary cash investments............................. 37 13
Balanced Fund:
Securities............................................. 20,094 --
Temporary cash investments............................. 15,760 --
Mutual Fund Window:
Berger 100 Fund........................................ 18,745 --
DFA International Value II Fund........................ 8,225 --
DFA US Large Cap Value II Fund......................... 1,419 --
DFA US Small Cap Value II Fund......................... 6,490 --
20th Century Growth Investors Fund..................... 4,839 --
Temporary cash investments............................. 227 --
Distributable shares.................................... 3,916 1,234
Dividends and interest income receivable................ 3,716 2,930
Receivable for investments sold......................... 42,196 --
Loan repayment receivable............................... 487 --
Variation margin receivable............................. 41 --
---------- ----------
$3,278,536 $3,065,626
Liabilities:
Payable for investments purchased...................... 52,824 724
Variation margin payable............................... 20 --
---------- ----------
Allocation share of trust net assets (excluding ESOP
Trusts)................................................. 3,225,692 3,064,902
Investment in ESOP Trusts:
BellSouth shares of common stock allocated to partici-
pants.................................................. 415,616 352,067
Distributable shares.................................... 732 86
BellSouth common shares held for future allocation...... 597,525 708,842
Temporary cash investments.............................. 37,074 28,823
---------- ----------
Total investments........................................ 4,276,639 4,154,720
Liabilities:
Notes payable........................................... 693,900 734,598
---------- ----------
Trust net assets...................................... $3,582,739 $3,420,122
========== ==========
Investments at cost...................................... $3,809,323 $3,492,070
========== ==========
</TABLE>
Distributions payable in shares at year end are reclassed from BellSouth
common shares and ESOP--BellSouth common shares held for future allocation to
the respective "Distributable Shares" line.
See Item 27a, BellSouth Master Savings Trust Schedule of Assets Held for
Investment purposes.
16
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
Assets in the BellSouth Stock Fund, Bond Fund and Indexed Stock Fund are
invested in securities which fluctuate in market value, and the values of the
units fluctuate as of the end of each month.
Assets in the Interest Income Fund are invested in a number of investment
contracts with diversified groups of high quality financial institutions. The
value of the Interest Income Fund is based upon the principal invested and the
interest credited, and the value of the units should increase as of the end of
each month. Some of these contracts are unsecured, general obligations of such
companies. Their security is subject to the ability of the insurance companies
or other financial institutions to repay their debts generally as they come
due. Other contracts are backed specifically by high quality, fixed income
assets. Therefore, many of the new investment contracts have the underlying
assets held in a separate account of an insurance company or in a trust fund.
These assets are protected from the general creditors of the contract issuer.
In three separate transactions during 1990, the BellSouth Management Savings
and Employee Stock Ownership Trust and the BellSouth Savings and Security ESOP
Trust (the "ESOP Trusts") issued medium-term notes in the amount of $550
million and $300 million, respectively, to fund the ESOP. Assets held in each
investment fund of the Plan, other than the assets held by the ESOP Trusts
described below, are unavailable to service the ESOP debt.
Assets held by the ESOP Trusts are generally unavailable to satisfy claims of
holders of debt securities issued by the ESOP Trusts to finance the acquisition
of common stock for the benefit of ESOP participants. The debt securities are
guaranteed by and are subject to direct recourse against BellSouth. BellSouth
contributes to the Trusts an amount necessary, net of ESOP dividends and
interest, to service the ESOP loan payments and to purchase any additional
shares required to meet the match obligation. Such contributions are subject to
the claims of such holders but are held at BellSouth and paid to the ESOP Trust
twice yearly to fund, on a same day basis, required payments by the ESOP Trusts
on the notes. Such contributions would not remain in the Plan Trusts unless
there were a default on the debt securities by the ESOP Trustee after having
received the required contributions from BellSouth. Therefore, holders of the
debt securities should not rely on the assets of the ESOP Trusts in arriving at
an investment decision with respect to the debt securities. For the year ended
December 31, 1994, BellSouth made cash contributions to the ESOP Trusts in the
amount of $63,017 for the purpose of servicing the guaranteed debt and cash
contributions in the amount of $36,789 to purchase additional shares to meet
the match obligations and expects to make similar contributions during the life
of the Plan.
A description of each debt issue is as follows:
BellSouth Management Savings and Employee Stock Ownership Trust:
<TABLE>
<CAPTION>
TITLE AMOUNT INTEREST RATE DUE DATE
----- -------- ------------- ------------
<S> <C> <C> <C>
Amortizing Medium-Term Notes, Series A...... $275,000 9.125% July 1, 2003
Amortizing Medium-Term Notes, Series A...... $275,000 9.19% July 1, 2003
--------
Total..................................... $550,000
BellSouth Savings and Security ESOP Trust:
<CAPTION>
TITLE AMOUNT INTEREST RATE DUE DATE
----- -------- ------------- ------------
<S> <C> <C> <C>
Amortizing Medium-Term Notes, Series A...... $300,000 9.125% July 1, 2003
</TABLE>
17
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONCLUDED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
Maturities of the ESOP Trusts' long-term debt outstanding at December 31,
1994 are as follows:
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 THEREAFTER TOTAL
------- ------- ------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Maturities......... $46,589 $52,977 $59,898 $67,418 $75,589 $391,429 $693,900
======= ======= ======= ======= ======= ======== ========
</TABLE>
Investment activities of the Master Savings Trust are allocated to the Plan
based upon the total of each individual plan participant's share of the Master
Savings Trust investment activities during the period ended December 31, 1994.
The Master Savings Trust investment activities for the fiscal year ended
December 31, 1994, 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
--------- -------- --------
<S> <C> <C> <C>
Investment Activities:
Dividends on BellSouth Corporation common
shares........................................ $ 119,486 $118,094 $116,747
Other dividends................................ -- -- 5
Interest Income Fund income.................... 69,048 65,950 60,515
Other interest................................. 12,748 11,917 8,987
Net change in unrealized
appreciation/(depreciation) on investments.... (185,677) 292,122 (20,744)
Net realized gain on investments............... 14,693 31,658 33,416
Investment Manager Fees........................ (980) (973) (1,144)
--------- -------- --------
Net investment activities....................... $ 29,318 $518,768 $197,782
========= ======== ========
</TABLE>
18
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
BELLSOUTH STOCK FUND
<S> <C> <C> <C>
SHARES OF BELLSOUTH COMMON STOCK*--96.9%... 25,865,162 $1,038,790 $1,399,952
---------- ----------
TEMPORARY CASH INVESTMENTS--3.1%........... 25,985,797 43,954 44,436
---------- ----------
Total BellSouth Stock Fund--100%......... $1,082,744 $1,444,388
---------- ----------
BOND FUND
U.S. GOVERNMENT TREASURY NOTES--38.4%
U.S. Treasury Notes, 7.750%, 03/31/96..... $ 9,000 $ 9,686 $ 9,031
U.S. Treasury Notes, 7.625%, 05/31/96..... $ 7,500 8,162 7,513
U.S. Treasury Notes, 7.875%, 06/30/96..... $ 2,000 2,012 2,009
U.S. Treasury Notes, 5.875%, 02/15/04..... $ 10,300 9,232 8,982
U.S. Treasury Notes, 7.250%, 05/15/04..... $ 7,700 7,587 7,394
U.S. Treasury Notes, 9.250%, 01/15/96..... $ 8,000 9,037 8,153
U.S. Treasury Notes, 8.000%, 10/15/96..... $ 4,700 4,867 4,725
U.S. Treasury Notes, 8.500%, 11/15/95..... $ 5,500 5,990 5,561
---------- ----------
$ 56,573 $ 53,368
---------- ----------
U.S. GOVERNMENT TREASURY BONDS--25.4%
U.S. Treasury Bonds, 11.625%, 11/15/04.... $ 5,400 $ 7,188 $ 6,764
U.S. Treasury Bonds, 9.375%, 02/15/06..... $ 12,450 13,973 13,808
U.S. Treasury Bonds, 7.250%, 05/15/16..... $ 12,950 12,319 11,975
U.S. Treasury Bonds, 8.125%, 08/15/19..... $ 2,700 3,100 2,736
---------- ----------
$ 36,580 $ 35,283
---------- ----------
DOMESTIC CORPORATE OBLIGATIONS--34.6%
Cleveland Elec. Illum. Co.
9.100%, 07/22/96......................... $ 400 $ 430 $ 397
Cleveland Elec. Illum. Co.
9.450%, 12/01/97......................... $ 1,000 1,091 986
Cleveland Elec. Illum. Co.
8.700%, 06/03/96......................... $ 4,600 4,798 4,551
Commonwealth Edison Co.
9.010%, 08/01/96......................... $ 1,000 1,056 1,006
Commonwealth Edison Co.
8.920%, 08/15/96......................... $ 1,000 1,005 1,004
Commonwealth Edison Co.
5.500%, 07/15/95......................... $ 2,000 1,993 1,982
Eastern Edison Co.
9.250%, 12/01/95......................... $ 2,000 2,218 2,022
Houston Inds. Inc.
7.250%, 12/01/96......................... $ 1,500 1,500 1,471
Illinois Pwr. Co.
9.250%, 12/16/96......................... $ 2,000 2,085 2,033
</TABLE>
S-1
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
BOND FUND--(CONTINUED)
<S> <C> <C> <C>
Pacificorp Secd.
8.690%, 07/16/96......................... $ 2,000 $ 2,000 $ 2,019
Pennsylvania Elec. Co. Secd.
7.450%, 10/28/96......................... $ 1,000 1,000 991
Texas Utils. Elec. Co.
10.625%, 09/01/20........................ $ 300 341 328
Virginia Elec. & Pwr. Co.
8.200%, 08/15/96......................... $ 1,000 1,037 1,004
Amax Inc.
9.875%, 06/13/01......................... $ 2,550 2,670 2,677
Commonwealth Edison Co.
9.050%, 08/01/96......................... $ 1,000 1,080 1,006
International Business Machs. Corp.
9.000%, 05/01/98......................... $ 1,500 1,608 1,509
Long Island Ltg. Co.
8.750%, 05/01/96......................... $ 3,450 3,521 3,462
McDermott Inc.
10.250%, 06/01/95........................ $ 3,000 3,241 3,033
USX-Marathon Group Inc.
8.875%, 09/15/97......................... $ 1,000 998 1,003
United Illum. Co.
7.250%, 10/02/95......................... $ 1,550 1,588 1,545
Caterpillar Finl. Svcs. Corp.
7.140%, 03/13/95......................... $ 1,000 1,023 1,001
Caterpillar Finl. Svcs. Corp.
7.140%, 04/10/95......................... $ 2,100 2,126 2,102
Chrysler Finl. Corp.
6.000%, 04/15/96......................... $ 2,000 2,058 1,953
Ford Motor Credit Co.
8.625%, 04/15/96......................... $ 2,500 2,744 2,518
General Mtr. Accep. Corp.
7.250%, 02/15/96......................... $ 2,500 2,623 2,482
General Mtr. Accep. Corp.
6.300%, 02/02/96......................... $ 700 720 688
General Mtr. Accep. Corp.
8.250%, 08/01/96......................... $ 3,250 3,245 3,241
---------- ----------
$ 49,799 $ 48,014
---------- ----------
POOLED CORPORATE OBLIGATIONS--0.0%......... 2,462 $ 4 $ 4
---------- ----------
TEMPORARY CASH INVESTMENTS--1.6%........... 1,334,539 $ 2,273 $ 2,282
---------- ----------
Total Bond Fund--100.0%.................. $ 145,229 $ 138,951
---------- ----------
</TABLE>
S-2
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
INDEXED STOCK FUND
<S> <C> <C> <C>
BANKERS TRUST PYRAMID CASH PLUS FUND--3.1%. 8,002,595 $ 13,607 $ 13,684
---------- ----------
BANKERS TRUST PYRAMID EQUITY INDEX FUND*--
96.9%..................................... 425,188 $ 315,877 $ 426,227
---------- ----------
MISCELLANEOUS TOTAL--0%.................... 33 $ 1 $ 0
---------- ----------
Total Corporate Obligations--0.0%........ 583 $ 1 $ 1
---------- ----------
Total Indexed Stock Fund--100.0%......... $ 329,486 $ 439,912
---------- ----------
INTEREST INCOME FUND
ANNUITY CONTRACTS WITH INSURANCE
COMPANIES--96.5%:+
Aetna Life Insurance Company
(7.49%-9.81%)............................ $ 91,895 $ 91,895 $ 91,895
Allstate Life Insurance Company
(5.75%).................................. $ 10,857 10,857 10,857
BT Basic
(6.21%).................................. $ 102,923 102,923 102,923
CDC Investment Management Corp.
(4.906%-7.61%)........................... $ 65,140 65,140 65,140
Canada Life
(9.58%).................................. $ 5,214 5,214 5,214
Commonwealth Life Insurance Co.
(7.67%-9.37%)............................ $ 17,225 17,225 17,225
Connecticut General Life Insurance Co.
(8.28%-8.85%)............................ $ 21,763 21,763 21,763
Hartford Life
(7.22%-8.71%)............................ $ 34,731 34,731 34,731
John Hancock Mutual Life
(7.13%).................................. $ 88,735 88,735 88,735
Massachusetts Mutual
(9.37%-9.70%)............................ $ 74,089 74,089 74,089
Metropolitan Life Insurance Com.
(5.79%-8.75%)............................ $ 104,444 104,444 104,444
Mutual Benefit Life Insurance Co.
(12.75%)................................. $ 3,251 3,251 3,251
New York Life Insurance Co.
(5.39%-8.97%)............................ $ 77,904 77,904 77,904
Pacific Mutual Life
(9.39%).................................. $ 30,027 30,027 30,027
Peoples Security Life Insurance Co.
(5.03%-8.21%)............................ $ 95,165 95,165 95,165
Provident National
(5.13%-8.53%)............................ $ 118,172 118,172 118,172
</TABLE>
S-3
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
INTEREST INCOME FUND--(CONTINUED)
<S> <C> <C> <C>
Prudential Insurance Company of America
(8.93%-9.35%)............................ $ 45,933 $ 45,933 $ 45,933
State Mutual Life
(8.86%).................................. $ 10,650 10,650 10,650
Sun Life Association, Canada
(5.78%-5.79%)............................ $ 21,472 21,472 21,472
Union Bank of Switzerland
(5.00%-7.38%)............................ $ 28,309 28,309 28,309
---------- ----------
$1,047,899 $1,047,899
---------- ----------
TEMPORARY CASH INVESTMENTS--3.5%........... $ 21,945 $ 37,441 $ 37,525
---------- ----------
CORPORATE OBLIGATIONS--0%.................. 2,462 $ 3 $ 4
---------- ----------
INTEREST INCOME FUND--100%................. $1,072,306 $1,085,343 $1,085,428
---------- ----------
LOAN FUND
LOANS TO PARTICIPANTS--99.9%............... $ 47,581 $ 47,581 $ 47,581
---------- ----------
TEMPORARY CASH INVESTMENTS--0.1%........... $ 37 $ 37 $ 37
---------- ----------
Total Loan Fund.......................... $ 47,618 $ 47,618
---------- ----------
BALANCED FUND
TEMPORARY CASH INVESTMENTS--10%............ 1,844,439 $ 3,133 $ 3,154
---------- ----------
U.S. Treasury Bill, Exp. 1/12/95--........ $ 440 $ 427 $ 427
---------- ----------
CORPORATE OBLIGATIONS--90%................. 8,147,921 $ 12,366 $ 12,179
---------- ----------
BT Equity Index Fund...................... 20,045 $ 19,864 $ 20,094
---------- ----------
OTHER INVESTMENTS--0%......................
S&P 500 Futures, March 1995............... 12,500 $ 0 $ 0
U.S. Treasury Bond Futures, March 1995.... 6,300,000 $ 0 $ 0
---------- ----------
Total Balanced Fund...................... $ 35,790 $ 35,854
---------- ----------
EMPLOYEE STOCK OWNERSHIP PLAN
SHARES OF BELLSOUTH COMMON STOCK*--96.5%... 18,760,577 $1,005,328 $1,013,873
---------- ----------
TEMPORARY CASH INVESTMENTS--3.5%........... 21,678,874 $ 36,788 $ 37,074
---------- ----------
Total Employee Stock Ownership Fund...... $1,042,116 $1,050,947
---------- ----------
MUTUAL FUND WINDOW
MUTUAL FUNDS--99.4%
Berger 100 Fund........................... 1,194,698 $ 18,488 $ 18,745
DFA International Value II Fund........... 863,944 $ 8,538 $ 8,225
DFA U.S. Large Cap Value II Fund.......... 148,252 $ 1,470 $ 1,419
DFA U.S. Small Cap Value II Fund.......... 667,035 $ 6,722 $ 6,490
20th Century Growth Investors Fund........ 258,182 $ 5,552 $ 4,839
---------- ----------
Total Equity Mutual Funds................ $ 40,770 $ 39,718
---------- ----------
</TABLE>
S-4
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
-------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER D TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- --------- ---------- ----------
MUTUAL FUND WINDOW--(CONTINUED)
<S> <C> <C> <C>
TEMPORARY CASH INVESTMENTS--0.6%
BT Pyramid Cash Plus Fund......................... 933 $ 2 $ 2
Cash in Transit................................... $224 $ 224 $ 224
Schwab Retirement Money Fund...................... $ 1 $ 1 $ 1
---------- ----------
Total Temporary Cash Investments................. $ 227 $ 227
---------- ----------
Total Mutual Fund Window........................ $ 40,997 $ 39,945
---------- ----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS....................................... $3,809,323 $4,283,043
========== ==========
</TABLE>
- --------
NOTES
Percentages represent the percentage of the investments of each fund of the
Master Savings Trust.
* Investment represents 5% or more of the Net Assets of the Master Savings
Trust.
+ The contracts with these insurance companies (interest rates indicated in
parentheses) guarantee the repayment of principal and the crediting of
interest resulting in a composite effective annual interest rate of 6.95% for
the year 1994. The timing of the remittance of participating employee
contributions and other participating employee-directed transactions may
cause the actual yield to vary from this rate. The composite interest rate is
subject to annual adjustment.
S-5
<PAGE>
EXHIBIT 99C
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994
or
[_] Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act
of 1934
For the transition Commission file number
period from __ to ___ 1-8607
BellSouth Enterprises Retirement Savings Plan
BELLSOUTH CORPORATION
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Management Savings Plan Committee of the
BellSouth Enterprises Retirement Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the BellSouth Enterprises Retirement Savings Plan as of December
31, 1994 and 1993, and the related statements of changes in net assets
available for plan benefits for each of the three years in the period ended
December 31, 1994. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1994 and 1993, and the changes in net assets available for
plan benefits for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department for Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statement of net assets available for plan
benefits and the statement of changes in net assets available for plan benefits
is presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedule and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 16, 1995
1
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of BellSouth Corporation on Form S-8 (File No. 33-26518) of our report dated
June 16, 1995, on our audits of the financial statements of the BellSouth
Enterprises Retirement Savings Plan as of December 31, 1994 and 1993, and for
each of the three years in the period ended December 31, 1994, and the
accompanying financial statement schedule as of December 31, 1994, which report
is included in this Annual Report on Form 11-K.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 16, 1995
2
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
BELLSOUTH INDEXED INTEREST MUTUAL
STOCK BOND STOCK INCOME LOAN BALANCED FUND
FUND FUND FUND FUND FUND FUND WINDOW TOTAL
ASSETS --------- ------- ------- -------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Allocated share of trust
net assets.............. $74,904 $13,695 $57,402 $68,899 $5,810 $2,091 $4,769 $227,570
Allotments and
contributions
receivable.............. 837 6 419 53 -- -- -- 1,315
Fund, BellSouth Savings
and Security Plan,
BellSouth Management
Savings and Employee
Stock Ownership Plan and
other transfers
receivable--net......... 7,100 -- -- -- -- -- 343 7,443
------- ------- ------- ------- ------ ------ ------ --------
Total Assets.......... 82,841 13,701 57,821 68,952 5,810 2,091 5,112 236,328
------- ------- ------- ------- ------ ------ ------ --------
LIABILITIES
Distributions payable... 575 141 375 634 -- 127 55 1,907
Fund, BellSouth Savings
and Security Plan,
BellSouth Management
Savings and Employee
Stock Ownership Plan and
other transfers
payable--net............ -- 347 2,694 3,901 731 354 -- 8,027
------- ------- ------- ------- ------ ------ ------ --------
Total Liabilities..... 575 488 3,069 4,535 731 481 55 9,934
------- ------- ------- ------- ------ ------ ------ --------
Net Assets Available for
Plan Benefits........... $82,266 $13,213 $54,752 $64,417 $5,079 $1,610 $5,057 $226,394
======= ======= ======= ======= ====== ====== ====== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
BELLSOUTH INDEXED INTEREST
STOCK BOND STOCK INCOME LOAN
FUND FUND FUND FUND FUND TOTAL
--------- ------- ------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Allocated share of trust
net assets.............. $64,813 $15,121 $59,532 $68,714 $2,388 $210,568
Allotments and contribu-
tions receivable........ 1,595 230 906 358 -- 3,089
Fund, BellSouth
Management Savings and
Employee Stock Ownership
Plan, BellSouth Savings
and Security Plan and
other transfers
receivable--net......... -- -- -- -- 2,895 2,895
------- ------- ------- ------- ------ --------
Total Assets.......... 66,408 15,351 60,438 69,072 5,283 216,552
------- ------- ------- ------- ------ --------
LIABILITIES
Distributions payable... 474 48 218 1,334 403 2,477
Fund, BellSouth
Management Savings and
Employee Stock Ownership
Plan, BellSouth Savings
and
Security Plan and other
transfers payable--net.. 246 101 64 212 -- 623
------- ------- ------- ------- ------ --------
Total Liabilities..... 720 149 282 1,546 403 3,100
------- ------- ------- ------- ------ --------
Net Assets Available for
Plan Benefits........... $65,688 $15,202 $60,156 $67,526 $4,880 $213,452
======= ======= ======= ======= ====== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
BELLSOUTH INDEXED INTEREST MUTUAL
STOCK BOND STOCK INCOME LOAN BALANCED FUND
FUND FUND FUND FUND FUND FUND WINDOW TOTAL
--------- ------- ------- -------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December
31, 1993................ $65,688 $15,202 $60,156 $67,526 $4,880 $ -- $ -- $213,452
------- ------- ------- ------- ------ ------ ------ --------
Employee contributions.. 6,688 1,557 7,535 4,956 -- 592 -- 21,328
Employing company
contributions........... 10,916 46 173 96 -- 11 -- 11,242
Transfer of
participants' balances--
net..................... 5,619 (2,259) (9,620) (9,224) (39) 1,252 5,112 (9,159)
------- ------- ------- ------- ------ ------ ------ --------
Total Allotments,
Contributions and
Transfers............... 23,223 (656) (1,912) (4,172) (39) 1,855 5,112 23,411
Allocated share of Trust
investment activities... (1,950) (1) 819 4,493 260 (33) -- 3,588
------- ------- ------- ------- ------ ------ ------ --------
Total Additions......... 21,273 (657) (1,093) 321 221 1,822 5,112 26,999
------- ------- ------- ------- ------ ------ ------ --------
Less: Distributions to
Participants............ 4,695 1,332 4,311 3,430 22 212 55 14,057
------- ------- ------- ------- ------ ------ ------ --------
Net Assets Available
for Plan Benefits,
December 31, 1994...... $82,266 $13,213 $54,752 $64,417 $5,079 $1,610 $5,057 $226,394
======= ======= ======= ======= ====== ====== ====== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
BELLSOUTH INDEXED INTEREST
STOCK BOND STOCK INCOME LOAN
FUND FUND FUND FUND FUND TOTAL
--------- ------- ------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December 31,
1992........................ $45,391 $ 5,891 $21,513 $41,229 $2,346 $116,370
------- ------- ------- ------- ------ --------
Employee contributions...... 5,969 1,780 7,892 4,748 -- 20,389
Employing company
contributions............... 9,856 79 349 210 -- 10,494
Transfer of participants'
balances--net............... (1,049) 6,692 28,376 20,585 2,532 57,136
------- ------- ------- ------- ------ --------
Allotments, Contributions
and Transfers............... 14,776 8,551 36,617 25,543 2,532 88,019
Allocated share of Trust
investment activities....... 8,621 1,350 4,996 4,433 347 19,747
------- ------- ------- ------- ------ --------
Total Additions............. 23,397 9,901 41,613 29,976 2,879 107,766
------- ------- ------- ------- ------ --------
Less: Distributions to
participants................ 3,100 590 2,970 3,679 345 10,684
------- ------- ------- ------- ------ --------
Net Assets Available for
Plan Benefits, December 31,
1993....................... $65,688 $15,202 $60,156 $67,526 $4,880 $213,452
======= ======= ======= ======= ====== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1992
(IN THOUSANDS)
<TABLE>
<CAPTION>
BELLSOUTH INDEXED INTEREST
STOCK BOND STOCK INCOME LOAN
FUND FUND FUND FUND FUND TOTAL
--------- ------ ------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December 31,
1991........................ $ 4,077 $ -- $ 1,950 $ 6,046 $ 93 $ 12,166
------- ------ ------- ------- ------ --------
Employee contributions...... 4,037 1,071 4,198 3,770 -- 13,076
Employing company
contributions............... 6,381 78 307 275 -- 7,041
Transfer of participants'
balances--net............... 30,739 4,661 14,665 29,983 2,245 82,293
------- ------ ------- ------- ------ --------
Allotments, Contributions
and Transfers............... 41,157 5,810 19,170 34,028 2,245 102,410
Allocated share of Trust
investment activities....... 2,218 391 1,428 2,763 -- 6,800
------- ------ ------- ------- ------ --------
Total Additions............. 43,375 6,201 20,598 36,791 2,245 109,210
------- ------ ------- ------- ------ --------
Less: Distributions to
Participants................ 2,061 310 1,035 1,608 (8) 5,006
------- ------ ------- ------- ------ --------
Net Assets Available for
Plan Benefits, December 31,
1992....................... $45,391 $5,891 $21,513 $41,229 $2,346 $116,370
======= ====== ======= ======= ====== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
1. PLAN DESCRIPTION (WHOLE DOLLARS)--
The BellSouth Enterprises Retirement Savings Plan (the "Plan") was
established by BellSouth Corporation ("BellSouth") and BellSouth Enterprises,
Inc. ("BellSouth Enterprises") to provide a convenient way for employees of
certain subsidiaries to save for their retirement on a long-term basis and to
acquire an ownership interest in BellSouth. Eligible subsidiaries may adopt the
Plan by execution of an Adoption Agreement, with the consent of BellSouth. The
assets of the Plan are held in the BellSouth Master Savings Trust (the "Master
Savings Trust") and are commingled with the assets of the BellSouth Management
Savings and Employee Stock Ownership Plan and the assets of the BellSouth
Savings and Security Plan for investment purposes.
Highlights of the Plan are described in the Prospectus/Summary Plan
Description, as supplemented ("SPD"), which is available to all participants. A
copy of the SPD can be obtained by calling the BellSouth Participant Service
Center at 1-800-995-1000 or 1-615-333-9000 via company telephone. In addition,
copies of the Plan, trust agreement and other related documents which include
details of the Plan can be obtained by writing to: Secretary, BellSouth Savings
Plan Committee, Room 7B09, 1155 Peachtree Street, N.E., Atlanta, Georgia 30309-
3610.
The following are changes that were adopted effective January 1, 1994 unless
otherwise noted:
Participants can direct their investment to a newly established fund called
the Balanced Fund. The structure of the Balanced Fund is designed to allocate
assets between stocks, bonds and cash, and to facilitate altering the mix as
necessary when market conditions change. The objective is to achieve higher
returns by exposing the fund's assets to that mix of stocks, bonds and cash
assets that the manager believes is the optimum. The Fund is actively managed
by First Quadrant Corporation. The equity portion is invested in the Bankers
Trust BT PYRAMID Equity Index Fund, which tracks the S&P 500 index; the bond
portion is invested in the Bankers Trust BT PYRAMID Broad Market Fixed Income
Fund, which tracks the Lehman Brothers Aggregate Bond Index; and the cash is
invested in the Bankers Trust BT PYRAMID Directed Short Term Investment Fund
("STIF").
Effective July 15, 1994, participants can transfer money already in their
savings plan funds to any of five mutual funds, collectively referred to as the
Mutual Fund Window (the "Window"). Participants can transfer up to 100 percent
of their existing investment in the Interest Income Fund and up to 80 percent
of their then existing investment in all other funds. Funds in the Window are
valued and may be traded on a daily basis. See footnote 8 for financial results
related to the individual funds included in the Window.
On January 1, 1994, the unit values of each core fund (BellSouth Stock Fund,
Bond Fund, Indexed Stock Fund and Interest Income Fund) of the Plan were
reunitized or restated. Each fund was given a "new start" beginning with a unit
value of 1.000000. At the same time, the number of units credited to the
participants' accounts was increased, so that the number of units owned equaled
the dollar amount invested as of January 1, 1994.
The Plan does not provide for an employing company matching contribution on
the participants' after-tax contributions (see footnote 5). Once the
participant reaches the before-tax contribution limit, he/she does not receive
any additional matching contributions. Therefore, the Plan was amended to
provide that, in this event, the participants' before-tax contributions will be
prorated over the year to ensure that the participant receives the employing
company contribution based upon the maximum before-tax contribution allowable
under the Plan.
8
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
1. PLAN DESCRIPTION (CONTINUED)--
The annual administrative fee per participant decreased from $27 to $22 in
1994. This fee will pay for up to four fund transfers, four changes in how
participant contributions are invested, and four changes in the amount saved
from each paycheck. More than four changes in any category will cost an extra
$2 per transaction. In addition, a $6 charge will be applied for transactions
made through a service representative if these transactions can be made through
the automated voice response system ("VRS"). Participants will not be charged
for using a service representative to help with transactions that cannot be
handled through VRS.
Participants can transfer balances between the Bond Fund and the Interest
Income Fund. Previously, this type of transfer was restricted. Participants
cannot transfer from and into the same fund at the same time.
Participants who have retired or left the company and have elected to leave
money in the Plan, can make two (2) withdrawals per year. There is no charge
for the first withdrawal. But to cover administrative costs, a $25 processing
fee will be charged for the second withdrawal. In addition, these participants
can get the money that remains in their accounts in two new ways; annual
installments for 10 years or a series of payouts for the rest of their lives.
The following are changes that will affect plan participants during 1995:
Effective April 1, 1995 participants will be allowed to have two outstanding
loans from the Plan. Previously only one outstanding loan at a time was
available. In addition, the maximum amount available for a loan will include
any amounts rolled over to the Plan from another qualified plan. The amount
available for any loan will be the lesser of (1) 50% of the total pre-tax
account balance and rollover amounts or (2) $50,000 reduced by the highest
outstanding loan balance during the last twelve months. The loan payoff period
will remain two to five years. However, the entire loan balance may be prepaid
once the loan has been outstanding for one year. A $5 annual maintenance fee
will be charged for loans initiated on or after April 1, 1995. The maintenance
fee is in addition to the loan initiation fee of $50.
The annual administrative fee per participant will be $22 in 1995. This
represents no change in the fee amount from 1994. This fee will pay for up to
four fund transfers, four changes in how participant contributions are
invested, and four changes in the amount saved from each paycheck. More than
four changes in any category will cost an extra $2 per transaction. In
addition, a $6 charge will be applied for transactions made through a service
representative if these transactions can be made through the automated voice
response system ("VRS"). Participants will not be charged for using a service
representative to help with transactions that cannot be handled through VRS. If
a participant has one or more investments in the Mutual Fund Window there is a
$1.50 per month maintenance charge and a $2.00 fee per transaction within the
Window.
Bankers Trust Company is the Trustee for the Master Savings Trust. Bankers
Trust Company is also the recordkeeper and service center provider for the
Plan.
2. ACCOUNTING POLICIES
With respect to the Statement of Changes in Net Assets Available for Plan
Benefits for the years presented, Allocated Share of Trust Investment
Activities includes net appreciation/(depreciation) in fair value of
investments which represents the sum of realized gains, net of realized losses
and the net change in unrealized appreciation/(depreciation) on the
investments.
The values of investments in the Master Savings Trust are determined as
follows:
Shares of BellSouth common stock and other securities listed on a
national stock exchange are valued on the basis of the closing price per
share on December 31, 1994 and December 31, 1993, as reported on the New
York Stock Exchange composite tape or, if no sales were made on that date,
at the closing price on the next preceding day on which sales were made;
9
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
2. ACCOUNTING POLICIES (CONTINUED)--
Over-the-counter securities and government obligations are valued based
on the bid prices on December 31, 1994 and 1993 from published sources
where available and, if not available, from other sources considered
reliable; and
Contracts with insurance companies are valued at principal plus
reinvested interest.
Purchases and sales of securities are reflected as of the trade date.
Realized gains and losses on sales of investments are determined on the basis
of average cost.
Dividend income is recognized on the ex-dividend date. Interest earned on
investments is recognized on the accrual basis.
3. UNITS OF THE PLAN (WHOLE DOLLARS)--
Participants in the Plan can invest their contributions among five core
funds; BellSouth Stock Fund, Indexed Stock Fund, Interest Income Fund, Bond
Fund and, since January 1, 1994, the Balanced Fund. The interest of a
participant in each type of investment of the Plan is represented by units as
described in Section 8 of the Plan. The units of each fund of the Plan were
reunitized or restated on January 1, 1994 except for the Balanced Fund which
was a new investment option at that date. Each fund was given a "new start"
beginning with a unit value of 1.000000. At the same date the number of units
credited to the participants' accounts was increased, so that the number of
units owned equaled the dollar amount invested.
The number and value of units as of December 31, 1994 and December 31, 1993
were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
------------------------------ ------------------------------
TYPE OF INVESTMENT NUMBER OF UNITS VALUE PER UNIT NUMBER OF UNITS VALUE PER UNIT
- ------------------ --------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
BellSouth Stock Fund.... 83,809,730 $ .9799 45,096,537 $1.4466
Indexed Stock Fund...... 54,080,046 1.0124 12,477,680 1.2111
Bond Fund............... 13,181,347 1.0024 35,049,334 1.7073
Interest Income Fund.... 60,231,228 1.0694 47,006,184 1.4354
Balanced Fund........... 1,659,372 .9702 -- --
</TABLE>
The number and value of units by month for each fund during 1994 were as
follows:
<TABLE>
<CAPTION>
BELLSOUTH STOCK INDEXED STOCK INTEREST INCOME
FUND BOND FUND FUND FUND BALANCED FUND
------------------- ------------------- ------------------- ------------------- ------------------
NUMBER VALUE NUMBER VALUE NUMBER VALUE NUMBER VALUE NUMBER VALUE
1994 OF UNITS PER UNIT OF UNITS PER UNIT OF UNITS PER UNIT OF UNITS PER UNIT OF UNITS PER UNIT
---- ---------- -------- ---------- -------- ---------- -------- ---------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January............. 66,034,084 1.071509 15,047,417 1.008528 59,555,159 1.034370 66,765,430 1.005724 1,278,412 1.000000
February............ 69,797,323 0.972221 14,983,329 0.998263 58,973,571 1.005956 66,261,066 1.010953 1,550,127 0.978002
March............... 70,281,187 1.008379 14,519,570 0.989702 59,406,036 0.962187 66,976,623 1.016712 2,075,527 0.948562
April............... 69,450,529 1.072665 14,287,197 0.985668 59,906,561 0.974330 67,332,106 1.022342 2,184,236 0.952515
May................. 70,267,142 1.048315 13,955,096 0.986050 59,836,428 0.990322 67,647,244 1.028084 2,350,146 0.958619
June................ 70,976,968 1.087768 13,590,249 0.987210 59,714,644 0.966494 67,798,162 1.033919 2,052,976 0.944350
July................ 72,755,707 1.113038 13,686,271 1.001992 58,740,277 0.998387 68,138,569 1.039865 2,100,459 0.971879
August.............. 74,981,850 1.058125 13,679,190 1.002567 57,671,965 1.039168 67,098,081 1.045723 1,977,848 0.987774
September........... 78,990,784 0.995574 13,655,913 0.994575 56,882,914 1.013367 64,980,312 1.051353 1,924,425 0.964800
October............. 81,274,173 0.965154 13,146,615 0.995124 53,970,280 1.035219 60,719,533 1.057387 1,669,999 0.973546
November............ 83,067,650 0.942376 13,180,829 0.994898 53,864,216 0.997434 60,319,554 1.063316 1,681,653 0.957276
December............ 83,809,730 0.979909 13,181,347 1.002406 54,080,046 1.012435 60,231,228 1.069494 1,659,372 0.970189
</TABLE>
10
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
3. UNITS OF THE PLAN (CONTINUED)--
The net asset values by month, beginning July 1994, of each fund included in
the Mutual Fund Window were as follows:
<TABLE>
<CAPTION>
DFA DFA U.S. DFA U.S. 20TH CENTURY
BERGER INTERNATIONAL LARGE CAP SMALL CAP GROWTH
1994 100 FUND VALUE II FUND VALUE II FUND VALUE II FUND INVESTORS FUND
---- -------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
July......... $14.85 $10.00 $10.00 $10.00 $21.78
August....... $15.79 $10.01 $10.16 $10.30 $22.77
September.... $15.96 $9.66 $9.86 $10.26 $22.13
October...... $16.46 $10.06 $10.04 $10.11 $22.99
November..... $15.80 $9.47 $9.48 $9.65 $21.74
December..... $15.69 $9.52 $9.57 $9.73 $18.74
</TABLE>
At December 31, 1994, the number of participants currently contributing to
the Plan by investment direction as described in Section 7 of the Plan was as
follows:
<TABLE>
<CAPTION>
NO.
FUND DESCRIPTION PARTICIPANTS
---------------- ------------
<S> <C>
Entirely in BellSouth Stock Fund............................... 1,159
Entirely in Indexed Stock Fund................................. 670
Entirely in Interest Income Fund............................... 489
Equally in BellSouth Stock Fund and Bond Fund.................. 141
Equally in BellSouth Stock Fund and Indexed Stock Fund......... 528
Equally in BellSouth Stock Fund and Interest Income Fund....... 400
Equally in Bond Fund and Indexed Stock Fund.................... 133
Equally in Indexed Stock Fund and Interest Income Fund......... 312
Equally in BellSouth Stock Fund, Indexed Stock Fund and
Interest Income Fund.......................................... 142
Various Fund combinations*..................................... 1,884
-----
Total Participants........................................... 5,858
=====
</TABLE>
- --------
* Includes all other investment directions having less than 100 participants.
Participants cannot make contributions directly to the Mutual Fund Window.
Mutual Fund Window investments are made via transfer from contributions made to
the five core funds. See footnote 1 for additional information.
4. TAX STATUS
On March 17, 1995, the Plan, which has been amended and restated, was
submitted to the Internal Revenue Service for an initial favorable
determination letter, that the Plan and related trust meet the requirements of
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
and is exempt from Federal Income Taxes under Section 501(a) of the Code.
However, the Plan administrator and the Plan's tax counsel believe that the
Plan is designed and is currently being operated in compliance with the
applicable requirements of the Code.
For information on the Federal income tax effects on the employee with
respect to the Plan, participants should refer to the Plan Prospectus.
5. CONTRIBUTIONS
Participant contributions to the Plan are accrued based upon authorized
before-tax basic and supplemental and after-tax contributions. An eligible
employee may authorize a before-tax basic maximum contribution of 6% of
compensation. A before-tax supplemental contribution of not more than 6% of
11
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
5. CONTRIBUTIONS (CONTINUED)--
compensation may be authorized by participants electing the maximum 6% before-
tax basic contribution. No more than 15% may be contributed on an after-tax
basis. Total before-tax and after-tax contributions may not exceed 15% of
compensation.
The employing company makes contributions in respect of the first 6% of each
participant's before-tax compensation contributed. For the year ending December
31, 1994, employing company contributions were accrued based on amounts equal
to 100% of the first 2% of participants' compensation contributed and on
amounts equal to 25% of the next 4% of participants' compensation contributed
for employees of Mobile Communications Corporation of America, BellSouth
Advanced Networks, Inc., RAM Mobile Data USA Limited Partnership, RAM
Communications Consultants, Inc., RAM/BSE Communications LP and Stevens
Graphics, Inc.
L.M. Berry and Company, Sunlink Corporation, Intelligent Media Ventures,
Inc., BellSouth Resources, Inc. and BellSouth Asia-Pacific Enterprises, Inc.
accrued their employing company contributions based on 50% of the next 4% of
participants' compensation contributed. BellSouth Cellular Corporation accrued
its 1994 employing company contributions based on 50% and 70% of the next 4% of
participants' compensation contributed for January 1 through March 31, and
April 1 through December 31, respectively.
BellSouth Advertising and Publishing Corporation accrued its 1994 employing
company contributions based on 50%, 65% and 70% of the next 4% of participants'
compensation contributed for January 1 through March 31, April 1 through June
30, and July 1 through December 31, respectively. All other 1994 employing
companies' contributions for their employees were equal to 50% and 70% of the
next 4% of participants' compensation contributed for January 1 through June
30, and July 1 through December 31, respectively. Employing company
contributions were allocated entirely to the BellSouth Stock Fund. Employing
company contributions reflect reductions for forfeited contributions as
described in the Plan document.
Profit sharing contributions in the amount of $141.1, $903.0 and $955.0 were
made by employing companies to eligible participants for the years ended
December 31, 1994, 1993 and 1992, respectively.
Company contributions to the Plan will vest upon a participant's completion
of 3 years of vesting service. One year of vesting service is earned upon a
participant's completion of 1,000 work hours during any year.
Effective January 1, 1992, contributions totaling $75,782.9 previously made
to the BellSouth Management Savings and Employee Stock Ownership Plan and the
BellSouth Savings and Security Plan by certain employees of BellSouth
Enterprises (other than nonmanagement employees of BellSouth Advertising and
Publishing Company) were transferred to the Plan. Employing Company
Contributions made to the ESOP for these participants prior to January 1, 1992
were not transferred but are held either in the BellSouth Management Savings
and Employee Stock Ownership Plan or the BellSouth Savings and Security Plan.
These Employing Company Contributions were not transferred because the Plan
does not include an ESOP feature. Effective January 1, 1994, contributions
previously made to the Plan by certain employees of BellSouth Enterprises
headquarters were transferred to the BellSouth Management Savings and Employee
Stock Ownership Plan and the BellSouth Savings and Security Plan.
6. TERMINATION PRIORITIES
BellSouth intends to continue the Plan indefinitely but reserves the right to
terminate or amend it. In the event the Plan is terminated, subject to
conditions set forth in the Employee Retirement Income Security Act of 1974, as
amended, participants will receive written notification of plan termination at
least 30 days in advance. The Plan provides that the net assets will be
distributed to participating employees in an amount equal to their respective
interests in such assets.
12
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
7. PLAN EXPENSES
Investment manager fees are paid by the Master Savings Trust. Investment
manager fees included in allocated share of Trust investment activities in the
1994 Statement of Changes in Net Assets were $31.9, $16.9, $32.5 and $1.8 for
the Bond Fund, Indexed Stock Fund, Interest Income Fund and Balanced Fund,
respectively.
Prior to January 1, 1993 expenses that related primarily to the costs of
administering the Plan were paid by the participating companies. Since January
1, 1993, the majority of the administrative expenses of the Plan have been
charged to Plan participants (see Note 1).
8. MUTUAL FUND WINDOW
The Mutual Fund Window's net assets available for plan benefits are comprised
of the following funds at December 31, 1994:
<TABLE>
<CAPTION>
DFA DFA 20TH CENTURY
DFA U.S. LARGE U.S. SMALL GROWTH MUTUAL
BERGER 100 INTERNATIONAL CAP VALUE CAPVALUE INVESTORS FUND
FUND VALUE II FUND II FUND II FUND FUND WINDOW
---------- ------------- ---------- ---------- ------------ ------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Allocated share of trust
net assets............. $1,764 $1,257 $153 $1,113 $482 $4,769
Allotments and
contributions
receivable............. -- -- -- -- -- --
Fund, BellSouth Savings
and Security Plan,
BellSouth Management
Savings and Employee
Stock Ownership Plan
and other transfers
receivable--net........ 91 112 -- 105 35 343
------ ------ ---- ------ ---- ------
Total Assets........ 1,855 1,369 153 1,218 517 5,112
------ ------ ---- ------ ---- ------
LIABILITIES
Distributions payable... 28 3 -- 16 8 55
Fund, BellSouth Savings
and Security Plan,
BellSouth Management
Savings and Employee
Stock Ownership Plan
and other transfers
payable--net........... -- -- -- -- -- --
------ ------ ---- ------ ---- ------
Total liabilities....... 28 3 -- 16 8 55
------ ------ ---- ------ ---- ------
Net Assets Available for
Plan Benefits $1,827 $1,366 $153 $1,202 $509 $5,057
====== ====== ==== ====== ==== ======
</TABLE>
13
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
8. MUTUAL FUND WINDOW (CONTINUED)--
The Mutual Fund Window's changes in net assets available for plan benefits
are comprised of the following funds for the year ended December 31, 1994:
<TABLE>
<CAPTION>
DFA DFA DFA 20TH CENTURY MUTUAL FUND
BERGER INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS WINDOW
100 FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL
--------- ------------- -------------- -------------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Plan Benefits, December
31, 1993............... $ -- $ -- $-- $ -- $-- $ --
------ ------ ---- ------ ---- ------
Employee Contributions.. -- -- -- -- -- --
Employing company
contributions.......... -- -- -- -- -- --
Transfer of participant
balances--net.......... 1,855 1,369 153 1,218 517 5,112
------ ------ ---- ------ ---- ------
Total Allotments,
Contributions,
Allocations and
Transfers.............. 1,855 1,369 153 1,218 517 5,112
Allocated share of Trust
investment activities.. -- -- -- -- -- --
------ ------ ---- ------ ---- ------
Total Additions......... 1,855 1,369 153 1,218 517 5,112
Less: Distributions to
Participants........ 28 3 -- 16 8 55
------ ------ ---- ------ ---- ------
Net Assets Available for
Plan Benefits, December
31, 1994............... $1,827 $1,366 $153 $1,202 $509 $5,057
====== ====== ==== ====== ==== ======
</TABLE>
14
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST
The assets of the Plan are held in the Master Savings Trust effective May 1,
1989 and are commingled with the assets of the BellSouth Management Savings and
Employee Stock Ownership Plan and the assets of the BellSouth Savings and
Security Plan. The assets of the BellSouth Employee Stock Ownership Plan
("PAYSOP") are held in a sub-trust of the Master Savings Trust. This sub-trust
is not included in the following Master Savings Trust information.
The Plan's allocated share of the total net assets of all funds in the Master
Savings Trust at December 31, 1994 and 1993 was 7.0580% and 6.8706%,
respectively. The Plan's allocated share of the net assets of each fund in the
Master Savings Trust at December 31, 1994 and 1993 was as follows:
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
BellSouth Stock Fund..................................... 5.22193% 4.50707%
Indexed Stock Fund....................................... 13.05298% 9.51907%
Bond Fund................................................ 9.67320% 14.11932%
Interest Income Fund..................................... 6.35060% 6.76312%
Loan Fund................................................ 12.19202% 6.65558%
Balanced Fund............................................ 5.82940% --
Mutual Fund Window....................................... 11.93964% --
</TABLE>
15
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
The financial position of the Master Savings Trust at December 31, 1994 and
1993 was as follows:
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Assets: Investment at value:
BellSouth Stock Fund:
BellSouth common shares................................ $1,396,036 $1,417,269
Temporary cash investments............................. 44,436 20,006
Bond Fund:
Securities............................................. 136,669 155,211
Temporary cash investments............................. 2,282 797
Indexed Stock Fund:
Equity Index Fund...................................... 426,228 419,305
Temporary cash investments............................. 13,684 2,379
Interest Income Fund:
Contracts.............................................. 1,047,899 982,482
Temporary cash investments............................. 37,529 27,934
Loan Fund:
Loans to participants.................................. 47,581 36,066
Temporary cash investments............................. 37 13
Balanced Fund:
Securities............................................. 20,094 --
Temporary cash investments............................. 15,760 --
Mutual Fund Window:
Berger 100 Fund........................................ 18,745 --
DFA International Value II Fund........................ 8,225 --
DFA US Large Cap Value II Fund......................... 1,419 --
DFA US Small Cap Value II Fund......................... 6,490 --
20th Century Growth Investors Fund..................... 4,839 --
Temporary cash investments............................. 227 --
Distributable shares.................................... 3,916 1,234
Dividends and interest income receivable................ 3,716 2,930
Receivable for investments sold......................... 42,196 --
Loan repayment receivable............................... 487 --
Variation margin receivable............................. 41 --
---------- ----------
$3,278,536 $3,065,626
Liabilities:
Payable for investments purchased...................... 52,824 724
Variation margin payable............................... 20 --
---------- ----------
Allocation share of trust net assets (excluding ESOP
Trusts)................................................. 3,225,692 3,064,902
Investment in ESOP Trusts:
BellSouth shares of common stock allocated to partici-
pants.................................................. 415,616 352,067
Distributable shares.................................... 732 86
BellSouth common shares held for future allocation...... 597,525 708,842
Temporary cash investments.............................. 37,074 28,823
---------- ----------
Total investments........................................ 4,276,639 4,154,720
Liabilities:
Notes payable........................................... 693,900 734,598
---------- ----------
Trust net assets...................................... $3,582,739 $3,420,122
========== ==========
Investments at cost...................................... $3,809,323 $3,492,070
========== ==========
</TABLE>
Distributions payable in shares at year end are reclassed from BellSouth
common shares and ESOP--BellSouth common shares held for future allocation to
the respective "Distributable Shares" line.
See Item 27a, BellSouth Master Savings Trust Schedule of Assets Held for
Investment purposes.
16
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
Assets in the BellSouth Stock Fund, Bond Fund and Indexed Stock Fund are
invested in securities which fluctuate in market value, and the values of the
units fluctuate as of the end of each month.
Assets in the Interest Income Fund are invested in a number of investment
contracts with diversified groups of high quality financial institutions. The
value of the Interest Income Fund is based upon the principal invested and the
interest credited, and the value of the units should increase as of the end of
each month. Some of these contracts are unsecured, general obligations of such
companies. Their security is subject to the ability of the insurance companies
or other financial institutions to repay their debts generally as they come
due. Other contracts are backed specifically by high quality, fixed income
assets. Therefore, many of the new investment contracts have the underlying
assets held in a separate account of an insurance company or in a trust fund.
These assets are protected from the general creditors of the contract issuer.
In three separate transactions during 1990, the BellSouth Management Savings
and Employee Stock Ownership Trust and the BellSouth Savings and Security ESOP
Trust (the "ESOP Trusts") issued medium-term notes in the amount of $550
million and $300 million, respectively, to fund the ESOP. Assets held in each
investment fund of the Plan, other than the assets held by the ESOP Trusts
described below, are unavailable to service the ESOP debt.
Assets held by the ESOP Trusts are generally unavailable to satisfy claims of
holders of debt securities issued by the ESOP Trusts to finance the acquisition
of common stock for the benefit of ESOP participants. The debt securities are
guaranteed by and are subject to direct recourse against BellSouth. BellSouth
contributes to the Trusts an amount necessary, net of ESOP dividends and
interest, to service the ESOP loan payments and to purchase any additional
shares required to meet the match obligation. Such contributions are subject to
the claims of such holders but are held at BellSouth and paid to the ESOP Trust
twice yearly to fund, on a same day basis, required payments by the ESOP Trusts
on the notes. Such contributions would not remain in the Plan Trusts unless
there were a default on the debt securities by the ESOP Trustee after having
received the required contributions from BellSouth. Therefore, holders of the
debt securities should not rely on the assets of the ESOP Trusts in arriving at
an investment decision with respect to the debt securities. For the year ended
December 31, 1994, BellSouth made cash contributions to the ESOP Trusts in the
amount of $63,017 for the purpose of servicing the guaranteed debt and cash
contributions in the amount of $36,789 to purchase additional shares to meet
the match obligations and expects to make similar contributions during the life
of the Plan.
A description of each debt issue is as follows:
BellSouth Management Savings and Employee Stock Ownership Trust:
<TABLE>
<CAPTION>
TITLE AMOUNT INTEREST RATE DUE DATE
----- -------- ------------- ------------
<S> <C> <C> <C>
Amortizing Medium-Term Notes, Series A...... $275,000 9.125% July 1, 2003
Amortizing Medium-Term Notes, Series A...... $275,000 9.19% July 1, 2003
--------
Total..................................... $550,000
BellSouth Savings and Security ESOP Trust:
<CAPTION>
TITLE AMOUNT INTEREST RATE DUE DATE
----- -------- ------------- ------------
<S> <C> <C> <C>
Amortizing Medium-Term Notes, Series A...... $300,000 9.125% July 1, 2003
</TABLE>
Maturities of the ESOP Trusts' long-term debt outstanding at December 31,
1994 are as follows:
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 THEREAFTER TOTAL
------- ------- ------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Maturities......... $46,589 $52,977 $59,898 $67,418 $75,589 $391,429 $693,900
======= ======= ======= ======= ======= ======== ========
</TABLE>
17
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
Investment activities of the Master Savings Trust are allocated to the Plan
based upon the total of each individual plan participant's share of the Master
Savings Trust investment activities during the period ended December 31, 1994.
The Master Savings Trust investment activities for the fiscal year ended
December 31, 1994, 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
--------- -------- --------
<S> <C> <C> <C>
Investment Activities:
Dividends on BellSouth Corporation common
shares........................................ $ 119,486 $118,094 $116,747
Other dividends................................ -- -- 5
Interest Income Fund income.................... 69,048 65,950 60,515
Other interest................................. 12,748 11,917 8,987
Net change in unrealized
appreciation/(depreciation) on investments.... (185,677) 292,122 (20,744)
Net realized gain on investments............... 14,693 31,658 33,416
Investment Manager Fees........................ (980) (973) (1,144)
--------- -------- --------
Net investment activities....................... $ 29,318 $518,768 $197,782
========= ======== ========
</TABLE>
18
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
BELLSOUTH STOCK FUND
<S> <C> <C> <C>
SHARES OF BELLSOUTH COMMON STOCK*--96.9%... 25,865,162 $1,038,790 $1,399,952
---------- ----------
TEMPORARY CASH INVESTMENTS--3.1%........... 25,985,797 43,954 44,436
---------- ----------
Total BellSouth Stock Fund--100%......... $1,082,744 $1,444,388
---------- ----------
BOND FUND
U.S. GOVERNMENT TREASURY NOTES--38.4%
U.S. Treasury Notes, 7.750%, 03/31/96..... $ 9,000 $ 9,686 $ 9,031
U.S. Treasury Notes, 7.625%, 05/31/96..... $ 7,500 8,162 7,513
U.S. Treasury Notes, 7.875%, 06/30/96..... $ 2,000 2,012 2,009
U.S. Treasury Notes, 5.875%, 02/15/04..... $ 10,300 9,232 8,982
U.S. Treasury Notes, 7.250%, 05/15/04..... $ 7,700 7,587 7,394
U.S. Treasury Notes, 9.250%, 01/15/96..... $ 8,000 9,037 8,153
U.S. Treasury Notes, 8.000%, 10/15/96..... $ 4,700 4,867 4,725
U.S. Treasury Notes, 8.500%, 11/15/95..... $ 5,500 5,990 5,561
---------- ----------
$ 56,573 $ 53,368
---------- ----------
U.S. GOVERNMENT TREASURY BONDS--25.4%
U.S. Treasury Bonds, 11.625%, 11/15/04.... $ 5,400 $ 7,188 $ 6,764
U.S. Treasury Bonds, 9.375%, 02/15/06..... $ 12,450 13,973 13,808
U.S. Treasury Bonds, 7.250%, 05/15/16..... $ 12,950 12,319 11,975
U.S. Treasury Bonds, 8.125%, 08/15/19..... $ 2,700 3,100 2,736
---------- ----------
$ 36,580 $ 35,283
---------- ----------
DOMESTIC CORPORATE OBLIGATIONS--34.6%
Cleveland Elec. Illum. Co.
9.100%, 07/22/96......................... $ 400 $ 430 $ 397
Cleveland Elec. Illum. Co.
9.450%, 12/01/97......................... $ 1,000 1,091 986
Cleveland Elec. Illum. Co.
8.700%, 06/03/96......................... $ 4,600 4,798 4,551
Commonwealth Edison Co.
9.010%, 08/01/96......................... $ 1,000 1,056 1,006
Commonwealth Edison Co.
8.920%, 08/15/96......................... $ 1,000 1,005 1,004
Commonwealth Edison Co.
5.500%, 07/15/95......................... $ 2,000 1,993 1,982
Eastern Edison Co.
9.250%, 12/01/95......................... $ 2,000 2,218 2,022
Houston Inds. Inc.
7.250%, 12/01/96......................... $ 1,500 1,500 1,471
Illinois Pwr. Co.
9.250%, 12/16/96......................... $ 2,000 2,085 2,033
</TABLE>
S-1
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
BOND FUND--(CONTINUED)
<S> <C> <C> <C>
Pacificorp Secd.
8.690%, 07/16/96......................... $ 2,000 $ 2,000 $ 2,019
Pennsylvania Elec. Co. Secd.
7.450%, 10/28/96......................... $ 1,000 1,000 991
Texas Utils. Elec. Co.
10.625%, 09/01/20........................ $ 300 341 328
Virginia Elec. & Pwr. Co.
8.200%, 08/15/96......................... $ 1,000 1,037 1,004
Amax Inc.
9.875%, 06/13/01......................... $ 2,550 2,670 2,677
Commonwealth Edison Co.
9.050%, 08/01/96......................... $ 1,000 1,080 1,006
International Business Machs. Corp.
9.000%, 05/01/98......................... $ 1,500 1,608 1,509
Long Island Ltg. Co.
8.750%, 05/01/96......................... $ 3,450 3,521 3,462
McDermott Inc.
10.250%, 06/01/95........................ $ 3,000 3,241 3,033
USX-Marathon Group Inc.
8.875%, 09/15/97......................... $ 1,000 998 1,003
United Illum. Co.
7.250%, 10/02/95......................... $ 1,550 1,588 1,545
Caterpillar Finl. Svcs. Corp.
7.140%, 03/13/95......................... $ 1,000 1,023 1,001
Caterpillar Finl. Svcs. Corp.
7.140%, 04/10/95......................... $ 2,100 2,126 2,102
Chrysler Finl. Corp.
6.000%, 04/15/96......................... $ 2,000 2,058 1,953
Ford Motor Credit Co.
8.625%, 04/15/96......................... $ 2,500 2,744 2,518
General Mtr. Accep. Corp.
7.250%, 02/15/96......................... $ 2,500 2,623 2,482
General Mtr. Accep. Corp.
6.300%, 02/02/96......................... $ 700 720 688
General Mtr. Accep. Corp.
8.250%, 08/01/96......................... $ 3,250 3,245 3,241
---------- ----------
$ 49,799 $ 48,014
---------- ----------
POOLED CORPORATE OBLIGATIONS--0.0%......... 2,462 $ 4 $ 4
---------- ----------
TEMPORARY CASH INVESTMENTS--1.6%........... 1,334,539 $ 2,273 $ 2,282
---------- ----------
Total Bond Fund--100.0%.................. $ 145,229 $ 138,951
---------- ----------
</TABLE>
S-2
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
INDEXED STOCK FUND
<S> <C> <C> <C>
BANKERS TRUST PYRAMID CASH PLUS FUND--3.1%. 8,002,595 $ 13,607 $ 13,684
---------- ----------
BANKERS TRUST PYRAMID EQUITY INDEX FUND*--
96.9%..................................... 425,188 $ 315,877 $ 426,227
---------- ----------
MISCELLANEOUS TOTAL--0%.................... 33 $ 1 $ 0
---------- ----------
Total Corporate Obligations--0.0%........ 583 $ 1 $ 1
---------- ----------
Total Indexed Stock Fund--100.0%......... $ 329,486 $ 439,912
---------- ----------
INTEREST INCOME FUND
ANNUITY CONTRACTS WITH INSURANCE
COMPANIES--96.5%:+
Aetna Life Insurance Company
(7.49%-9.81%)............................ $ 91,895 $ 91,895 $ 91,895
Allstate Life Insurance Company
(5.75%).................................. $ 10,857 10,857 10,857
BT Basic
(6.21%).................................. $ 102,923 102,923 102,923
CDC Investment Management Corp.
(4.906%-7.61%)........................... $ 65,140 65,140 65,140
Canada Life
(9.58%).................................. $ 5,214 5,214 5,214
Commonwealth Life Insurance Co.
(7.67%-9.37%)............................ $ 17,225 17,225 17,225
Connecticut General Life Insurance Co.
(8.28%-8.85%)............................ $ 21,763 21,763 21,763
Hartford Life
(7.22%-8.71%)............................ $ 34,731 34,731 34,731
John Hancock Mutual Life
(7.13%).................................. $ 88,735 88,735 88,735
Massachusetts Mutual
(9.37%-9.70%)............................ $ 74,089 74,089 74,089
Metropolitan Life Insurance Com.
(5.79%-8.75%)............................ $ 104,444 104,444 104,444
Mutual Benefit Life Insurance Co.
(12.75%)................................. $ 3,251 3,251 3,251
New York Life Insurance Co.
(5.39%-8.97%)............................ $ 77,904 77,904 77,904
Pacific Mutual Life
(9.39%).................................. $ 30,027 30,027 30,027
Peoples Security Life Insurance Co.
(5.03%-8.21%)............................ $ 95,165 95,165 95,165
Provident National
(5.13%-8.53%)............................ $ 118,172 118,172 118,172
</TABLE>
S-3
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
INTEREST INCOME FUND--(CONTINUED)
<S> <C> <C> <C>
Prudential Insurance Company of America
(8.93%-9.35%)............................ $ 45,933 $ 45,933 $ 45,933
State Mutual Life
(8.86%).................................. $ 10,650 10,650 10,650
Sun Life Association, Canada
(5.78%-5.79%)............................ $ 21,472 21,472 21,472
Union Bank of Switzerland
(5.00%-7.38%)............................ $ 28,309 28,309 28,309
---------- ----------
$1,047,899 $1,047,899
---------- ----------
TEMPORARY CASH INVESTMENTS--3.5%........... $ 21,945 $ 37,441 $ 37,525
---------- ----------
CORPORATE OBLIGATIONS--0%.................. 2,462 $ 3 $ 4
---------- ----------
INTEREST INCOME FUND--100%................. $1,072,306 $1,085,343 $1,085,428
---------- ----------
LOAN FUND
LOANS TO PARTICIPANTS--99.9%............... $ 47,581 $ 47,581 $ 47,581
---------- ----------
TEMPORARY CASH INVESTMENTS--0.1%........... $ 37 $ 37 $ 37
---------- ----------
Total Loan Fund.......................... $ 47,618 $ 47,618
---------- ----------
BALANCED FUND
TEMPORARY CASH INVESTMENTS--10%............ 1,844,439 $ 3,133 $ 3,154
---------- ----------
U.S. Treasury Bill, Exp. 1/12/95--........ $ 440 $ 427 $ 427
---------- ----------
CORPORATE OBLIGATIONS--90%................. 8,147,921 $ 12,366 $ 12,179
---------- ----------
BT Equity Index Fund...................... 20,045 $ 19,864 $ 20,094
---------- ----------
OTHER INVESTMENTS--0%......................
S&P 500 Futures, March 1995............... 12,500 $ 0 $ 0
U.S. Treasury Bond Futures, March 1995.... 6,300,000 $ 0 $ 0
---------- ----------
Total Balanced Fund...................... $ 35,790 $ 35,854
---------- ----------
EMPLOYEE STOCK OWNERSHIP PLAN
SHARES OF BELLSOUTH COMMON STOCK*--96.5%... 18,760,577 $1,005,328 $1,013,873
---------- ----------
TEMPORARY CASH INVESTMENTS--3.5%........... 21,678,874 $ 36,788 $ 37,074
---------- ----------
Total Employee Stock Ownership Fund...... $1,042,116 $1,050,947
---------- ----------
MUTUAL FUND WINDOW
MUTUAL FUNDS--99.4%
Berger 100 Fund........................... 1,194,698 $ 18,488 $ 18,745
DFA International Value II Fund........... 863,944 $ 8,538 $ 8,225
DFA U.S. Large Cap Value II Fund.......... 148,252 $ 1,470 $ 1,419
DFA U.S. Small Cap Value II Fund.......... 667,035 $ 6,722 $ 6,490
20th Century Growth Investors Fund........ 258,182 $ 5,552 $ 4,839
---------- ----------
Total Equity Mutual Funds................ $ 40,770 $ 39,718
---------- ----------
</TABLE>
S-4
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- --------- ------- --------
MUTUAL FUND WINDOW--(CONTINUED
<S> <C> <C> <C>
TEMPORARY CASH INVESTMENTS--0.6%
BT Pyramid Cash Plus Fund......................... 933 $ 2 $ 2
Cash in Transit................................... $224 $ 224 $ 224
Schwab Retirement Money Fund...................... $ 1 $ 1 $ 1
------- -------
Total Temporary Cash Investments................. $ 227 $ 227
------- -------
Total Mutual Fund Window........................ $40,997 $39,945
------- -------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS................................... $3,809,323 $4,283,043
========== ==========
</TABLE>
- --------
NOTES
Percentages represent the percentage of the investments of each fund of the
Master Savings Trust.
* Investment represents 5% or more of the Net Assets of the Master Savings
Trust.
+ The contracts with these insurance companies (interest rates indicated in
parentheses) guarantee the repayment of principal and the crediting of
interest resulting in a composite effective annual interest rate of 6.95% for
the year 1994. The timing of the remittance of participating employee
contributions and other participating employee-directed transactions may
cause the actual yield to vary from this rate. The composite interest rate is
subject to annual adjustment.
S-5
