SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 23, 1995
BELLSOUTH CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 1-8607 58-1533433
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
1155 Peachtree Street, N. E., Atlanta, Georgia 30309-3610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 249-2000
<PAGE>
Item 5. Other Events
BellSouth Corporation completed a string of record quarters in 1994
with the best fourth quarter in its history. Earnings for the year
as a whole also set a record.
Earnings per share (EPS) were $1.12 in the three months ended
December 31, 1994, compared with a loss of 56 cents per share in
the final quarter of 1993, which included a restructuring charge of
$1.40 per share.
Strength in its core telecommunications business, cellular
customers surpassing 2 million in the U.S., and expense control
efforts contributed to BellSouth's record results.
Revenues in the final three months of 1994 were $4.39 billion, a
record for any quarter and a 6.5 percent increase compared with the
fourth quarter a year earlier. For the year, record revenues of
$16.8 billion exceeded 1993 by $964 million, or 6.1 percent.
Excluding the effect of all unusual items in both years, EPS of
$4.13 in 1994 was a record, and was up 13.2 percent compared with
$3.65 in 1993. BellSouth's reported EPS of $4.35 in 1994 was also
a record. It compared with reported EPS in 1993 of $1.77, which
was after $1.88 in restructuring and other charges.
BellSouth Telecommunications (BST) made additional strides in
responding to competition in 1994. Workforce reductions in its
operations totaled more than 4,700 during the year, including those
associated with re-engineering and with BST's previously announced
restructuring.
BellSouth grew what was already the largest base of customer access
lines in the U.S. at one of the fastest rates in the industry in
1994. The 887,400 increase in the number of access lines surpassed
the company's seven-year-old record of 693,500 in 1987. BellSouth
served 20,220,000 access lines at the close of 1994, an annual
growth rate of 4.6 percent. The record fourth quarter reflected an
access line increase of 226,800, best ever for the final three
months of the year, and 27 percent higher than the increase of
178,800 in the fourth quarter of 1993.
BellSouth's cellular customer growth in the fourth quarter was
driven by a strong holiday selling season. U.S. cellular customers
increased to 2,155,800 at year end, up 38 percent from December 31,
1993. In its overseas cellular operations, customers increased 88
percent during the year, from 192,200 to 361,300. BellSouth began
providing service in its ninth international cellular market,
Israel, just before the new year.
Fourth quarter EPS in 1994 included a one-time gain of 8 cents
related to the sale of BellSouth's minority interest in an
international investment. Excluding that gain, and the effects of
<PAGE>
the restructuring charge and other unusual items in the fourth
quarter a year ago, BellSouth's fourth quarter EPS increased 6.1
percent, to $1.04 in 1994 from 98 cents in 1993.
Excluding the impact of the restructuring and other unusual charges
in 1993, operating expenses at BellSouth Telecommunications
increased only 0.7 percent for the year as a whole, and just 0.4
percent in the fourth quarter.
Annual net income in 1994 was $2.16 billion, compared with $880.1
million in 1993, which reflected the restructuring and other
unusual charges.
<PAGE>
BELLSOUTH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, Except Per Share Amounts)
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
1993 1994 1993 1994
(Unaudited)(Unaudited) (Unaudited)
Operating Revenues:
Network and Related
Services
Local service $1,664.4 $1,745.5 $6,577.3 $6,863.1
Interstate access 763.5 789.0 2,991.2 3,127.2
Intrastate access 226.1 221.2 881.9 908.3
Toll 308.7 291.1 1,219.5 1,190.1
Directory advertising
and publishing 426.5 450.6 1,515.4 1,556.0
Wireless communications 424.3 589.3 1,553.4 2,066.3
Other services 311.3 307.9 1,141.6 1,133.5
Total Operating
Revenues 4,124.8 4,394.6 15,880.3 16,844.5
Operating Expenses:
Cost of services
and products 1,461.6 1,536.8 5,865.1 6,043.2
Depreciation and
Amortization 834.7 845.5 3,162.2 3,258.7
Selling, general
and administrative 974.6 962.0 3,429.5 3,484.8
Restructuring charge 1,136.4 - 1,136.4 -
Total Operating
Expenses 4,407.3 3,344.3 13,593.2 12,786.7
Operating Income (Loss) (282.5) 1,050.3 2,287.1 4,057.8
Interest Expense 168.4 169.9 689.0 666.1
Other Income
(Expense), net (26.0) (13.9) 7.6 11.0
Income (Loss) Before Income
Taxes, Extraordinary Loss
and Cumulative Effect of
Change in Accounting
Principle (476.9) 866.5 1,605.7 3,402.7
Provision for Income Taxes (224.3) 308.0 571.6 1,242.9
Income (Loss) Before
Extraordinary Loss and
Cumulative Effect of Change
in Accounting Principle (252.6) 558.5 1,034.1 2,159.8
Extraordinary Loss on Early
Extinguishment of
Debt, net of tax (23.4) - (86.6) -
Cumulative Effect of Change
in Accounting Principle,
net of tax - - (67.4) -
Net Income (Loss) $ (276.0) $ 558.5 $ 880.1 $2,159.8
<PAGE>
Weighted Average Common
Shares Outstanding 496.5 496.7 496.1 496.6
Dividends Declared
Per Common Share $ .69 $ .69 $ 2.76 $ 2.76
Earnings Per Share:
Income (Loss) Before
Extraordinary Loss and
Cumulative Effect of
Change in Accounting
Principle, net of tax $ (.51) $ 1.12 $ 2.08 $ 4.35
Extraordinary Loss on
Early Extinguishment
of Debt, net of tax (.05) - (.17) -
Cumulative Effect of
Change in Accounting
Principle, net of tax - - (.14) -
Net Income (Loss) $ (.56) $ 1.12 $ 1.77 $ 4.35
<PAGE>
BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Millions)
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
1993 1994 1993 1994
(Unaudited) (Unaudited) (Unaudited)
Operating Revenues:
Network and Related
Services
Local service $1,664.4 $1,745.5 $6,577.3 $6,863.1
Interstate access 763.5 789.0 2,991.2 3,127.2
Intrastate access 226.1 221.2 881.9 908.3
Toll 308.7 291.1 1,219.5 1,190.1
Other 511.4 515.3 1,909.7 1,951.2
Total Operating
Revenues 3,474.1 3,562.1 13,579.6 14,039.9
Operating Expenses:
Cost of services
and products 1,260.0 1,284.1 5,169.4 5,235.2
Depreciation and
Amortization 764.6 760.7 2,902.6 2,953.6
Selling, general
and administrative 664.6 580.6 2,382.1 2,263.4
Restructuring charge 1,136.4 - 1,136.4 -
Total Operating
Expenses 3,825.6 2,625.4 11,590.5 10,452.2
Operating Income (Loss) (351.5) 936.7 1,989.1 3,587.7
Interest Expense 137.6 140.8 562.6 548.8
Other Income, net 8.1 5.2 21.4 18.3
Income (Loss) Before
Income Taxes, Extraordinary
Loss and Cumulative Effect
of Change in Accounting
Principle (481.0) 801.1 1,447.9 3,057.2
Provision for Income Taxes (228.2) 281.5 461.5 1,105.6
Income (Loss) Before
Extraordinary Loss and
Cumulative Effect of Change
in Accounting Principle (252.8) 519.6 986.4 1,951.6
Extraordinary Loss on Early
Extinguishment of Debt,
net of tax (23.4) - (86.6) -
Cumulative Effect of Change
in Accounting Principle,
net of tax - - (64.8) -
Net Income (Loss) $ (276.2) $ 519.6 $ 835.0 $1,951.6
<PAGE>
BELLSOUTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
December 31, December 31,
1993 1994
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 501.5 $ 606.5
Temporary cash investments 49.0 50.8
Accounts receivable, net of allowance
for uncollectibles of $149.6 and $154.1 2,985.2 3,126.6
Material and supplies 418.7 490.0
Other current assets 364.6 353.4
4,319.0 4,627.3
Investments and Advances 2,039.4 2,531.5
Property, Plant and Equipment, net 24,667.8 25,162.4
Deferred Charges and Other Assets 512.2 535.4
Intangible Assets, net 1,334.9 1,439.9
Total Assets $32,873.3 $34,296.5
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Debt maturing within one year $ 1,838.6 $ 2,018.7
Accounts payable 979.0 1,378.3
Other current liabilities 2,943.8 2,886.4
5,761.4 6,283.4
Long-Term Debt 7,380.7 7,435.1
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 3,465.3 3,546.4
Unamortized investment tax credits 515.9 443.3
Other liabilities and deferred credits 2,255.8 2,221.0
6,237.0 6,210.7
Shareholders' Equity:
Common stock, $1 par value 501.6 502.5
Paid-in capital 8,009.4 8,064.2
Retained earnings 5,919.3 6,721.1
Shares held in trust (292.6) (336.2)
Guarantee of ESOP debt (643.5) (584.3)
13,494.2 14,367.3
Total Liabilities & Shareholders' Equity $32,873.3 $34,296.5
<PAGE>
PRELIMINARY (UNAUDITED)
January 23, 1995
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
Three Months Ended Three Months Ended
December 31, 1993 December 31, 1994
Return to equity (7.9%) 15.7%
Return to average total capital (2.3%) 11.7%
Weighted average common shares
and equivalent shares
outstanding (millions) 496.5 496.7
Earnings (loss) per share $ (.56) $ 1.12
Dividend per share $ .69 $ .69
Property Additions (millions) $ 984.1 $ 968.9
At December 31,
1993 1994
Common shares outstanding (millions) 496.1 496.2
Debt ratio 40.2% 39.3%
Total Employees 95,084 92,121
<PAGE>
PRELIMINARY (UNAUDITED)
January 23, 1995
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
Twelve Months Ended Twelve Months Ended
December 31, 1993 December 31, 1994
Return to equity 6.3% 15.4%
Return to average total capital 6.1% 11.5%
Weighted average common shares
and equivalent shares
outstanding (millions) 496.1 496.6
Earnings per share $ 1.77 $ 4.35
Dividend per share $ 2.76 $ 2.76
Property Additions (millions) $ 3,595.4 $ 3,673.2
<PAGE>
PRELIMINARY (UNAUDITED)
January 23, 1995
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
Three Months Ended Three Months Ended
December 31, 1993 December 31, 1994
Property Additions (millions) $ 811.8 $ 677.3
Interest Charged Construction $ 5.0 $ 5.7
(millions)
Access Minutes of Use (millions):
Interstate 13,591.8 14,822.9
Intrastate 3,979.1 4,414.0
IntraLATA toll messages (millions) 374.5 387.6
At December 31,
1993 1994
Debt ratio 41.3% 41.0%
Telephone Employees (a) 77,958 73,764
Network access lines in service
(thousands) 19,333 20,220
(a) Beginning in 1994, telephone employees exclude those unrelated to telphone
operations; 1993 has been restated.
<PAGE>
PRELIMINARY (UNAUDITED)
January 23, 1995
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
Twelve Months Ended Twelve Months Ended
December 31, 1993 December 31, 1994
Property Additions (millions) $ 3,059.7 $ 3,108.9
Interest Charged Construction $ 23.7 $ 19.7
(millions)
Access Minutes of Use (millions):
Interstate 53,345.0 57,778.1
Intrastate 15,260.9 16,887.8
IntraLATA toll messages (millions) 1,511.4 1,558.6
<PAGE>
7. Exhibits
27 Financial Data Schedule
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BELLSOUTH CORPORATION
By: /s/Ronald M. Dykes
Ronald M. Dykes
Vice President, Comptroller and
Chief Financial Officer
January 31, 1995
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<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
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<RECEIVABLES> 3,091
<ALLOWANCES> 154
<INVENTORY> 490
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<TOTAL-ASSETS> 34,297
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<BONDS> 7,435
<COMMON> 503
0
0
<OTHER-SE> 13,865
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<CGS> 593
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<LOSS-PROVISION> 175
<INTEREST-EXPENSE> 666
<INCOME-PRETAX> 3,403
<INCOME-TAX> 1,243
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