<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, 1995 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, 1995.
99b Financial Statements for BellSouth Savings and Security Plan for the year
ended December 31, 1995.
99c Financial Statements for BellSouth Enterprises Retirement Savings Plan for
the year ended December 31, 1995.
----------------
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
Executive Vice President, Chief
Financial Officer and
Comptroller
June 24, 1996
<PAGE>
(3) Exhibits: (As filed with Form 10-K as of 12/31/95, 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).
3a-1 Articles of Amendment to Articles of Incorporation of BellSouth
Corporation. (Exhibit 3a-1 to Form 10-Q for the quarter ended
September 30, 1995, 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 Nonqualified Deferred Compensation Plan as
amended and restated on November 28, 1994. (Exhibit 10i to Form 10-K
for the year ended December 31, 1994, File No. 1-8607).
10i BellSouth Corporation Supplemental Executive Retirement Plan as
amended on May 18, 1995. (Exhibit 10j-1 to Form 10-Q for the quarter
ended June 30, 1995, File No. 1-8607).
10j BellSouth Management Savings and Employee Stock Ownership Plan as
amended and restated effective as of January 1, 1994. (Exhibit 10k to
Form 10-K for the year ended December 31, 1994, File No. 1-8607).
10j-1 Amendment dated December 15, 1995 to the BellSouth Management Savings
and Employee Stock Ownership Plan.
10k BellSouth Corporation Directors Retirement Plan. (Exhibit 10qq to Form
10-K for the year ended December 31, 1986, File No. 1-8607).
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
10l BellSouth Corporation Financial Counseling Plan. (Exhibit 10r to Form
10-K for the year ended December 31, 1992, File No. 1-8607).
10l-1 Amendment dated November 3, 1995 to the BellSouth Corporation
Executive Financial Counseling Plan.
10m BellSouth Corporation Deferred Compensation Plan for Non-Employee
Directors. (Exhibit 10gg to Registration Statement No. 2-87846).
10n BellSouth Corporation Executive Life Insurance Plan. (Exhibit 10v to
Form 10-K for the year ended December 31, 1992, File No. 1-8607).
10o 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).
10p Form of Executive Officer Succession and Retirement Agreement.
(Exhibit 10r to Form 10-K for the year ended December 31, 1994, File
No. 1-8607).
10q BellSouth Non-Employee Directors Charitable Contribution Program.
(Exhibit 10z to Form 10-K for the year ended December 31, 1992, File
No. 1-8607).
10r BellSouth Personal Retirement Account Pension Plan. (Exhibit 10aa to
Form 10-Q for the quarter ended June 30, 1993, File No. 1-8607).
10r-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).
10r-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).
10r-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).
10r-4 Amendment dated March 3, 1995 to the BellSouth Personal Retirement
Account Pension Plan. (Exhibit 10t-5 to Form 10-Q for the quarter
ended June 30, 1995, File No. 1-8607).
10r-5 Amendment dated September 21, 1995 to the BellSouth Personal
Retirement Account Pension Plan.
10r-6 Amendment dated October 12, 1993 to the BellSouth Personal Retirement
Account Pension Plan. (Exhibit 10t-6 to Form 10-Q for the quarter
ended September 30, 1995, File No. 1-8607).
10r-7 Amendment dated November 9, 1995 to the BellSouth Personal Retirement
Account Pension Plan. (Exhibit 10t-7 to Form 10-Q for the quarter
ended September 30, 1995, File No. 1-8607).
10s BellSouth Corporation Trust Under Executive Benefit Plan(s) as amended
April 28, 1995. (Exhibit 10u-1 to Form 10-Q for the quarter ended June
30, 1995, File No. 1-8607).
10t BellSouth Telecommunications, Inc. Trust Under Executive Benefit
Plan(s) as amended April 28, 1995. (Exhibit 10v-1 to Form 10-Q for the
quarter ended June 30, 1995, File No. 1-8607).
10u BellSouth Corporation Trust Under Board of Directors Benefit Plan(s)
as amended April 28, 1995. (Exhibit 10w-1 to Form 10-Q for the quarter
ended June 30, 1995, File No. 1-8607).
10v BellSouth Telecommunications, Inc. Trust Under Board of Directors
Benefit Plan(s) as amended April 28, 1995. (Exhibit 10x-1 to Form 10-Q
for the quarter ended June 30, 1995, File No. 1-8607).
10w BellSouth Corporation Stock Plan. (Exhibit 10bb to Form 10-Q for the
quarter ended June 30, 1995, File No. 1-8607).
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
11 Computation of Earnings Per Share.
12 Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiaries of BellSouth.
24 Powers of Attorney.
27 Financial Data Schedule.
99a* Annual report on Form 11-K for BellSouth Management Savings and
Employee Stock Ownership Plan for the fiscal year ended December 31,
1995.
99b* Annual report on Form 11-K for BellSouth Savings and Security ESOP
Plan for the fiscal year ended December 31, 1995.
99c* Annual report on Form 11-K for BellSouth Enterprises Retirement
Savings Plan for the fiscal year ended December 31, 1995.
</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, 1995
or
[_] Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the transition period from Commission file number
_____________ 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, 1995 and 1994, 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, 1995. 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, 1995 and 1994, and the changes in net assets available
for plan benefits for each of the three years in the period ended December 31,
1995, 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 of 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 24, 1996
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 17, 1996, on our audits of the financial statements of the
BellSouth Management Savings and Employee Stock Ownership Plan as of December
31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, and the accompanying financial statement schedule as of
December 31, 1995, which report is included in this Annual Report on Form 11-
K.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 24, 1996
2
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995
(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...... $1,076,665 $122,336 $491,410 $785,907 $42,354 $50,980 $65,518 $ -- $ -- $2,635,170
Investment in
BellSouth Management
Savings and Employee
Stock Ownership Plan
Trust:
BellSouth shares of
common stock
allocated to
participants......... -- -- -- -- -- -- -- 421,433 -- 421,433
BellSouth shares of
common stock held for
future allocation.... -- -- -- -- -- -- -- -- 579,176 579,176
Temporary cash in-
vestments............ -- -- -- -- -- -- -- 12,029 10,221 22,250
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total Investments... 1,076,665 122,336 491,410 785,907 42,354 50,980 65,518 433,462 589,397 3,658,029
Allotments and contri-
butions receivable.... -- -- -- -- 752 139 -- 4,738 -- 5,629
Fund, BellSouth
Savings and Security
Plan, BellSouth
Enterprises Retirement
Savings Plan and other
transfers receivable--
net................... 16,648 3,327 3,489 -- -- 1,931 2,998 -- -- 28,393
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total Assets........ 1,093,313 125,663 494,899 785,907 43,106 53,050 68,516 438,200 589,397 3,692,051
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
LIABILITIES
Distributions payable. 17,041 1,627 4,234 11,672 268 290 2 3,301 -- 38,435
Fund, BellSouth
Savings and Security
Plan, BellSouth
Enterprises Retirement
Savings Plan and other
transfers payable--
net................... -- -- -- 19,475 1,551 -- -- 103 -- 21,129
Notes payable......... -- -- -- -- -- -- -- -- 427,844 427,844
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total liabilities... 17,041 1,627 4,234 31,147 1,819 290 2 3,404 427,844 487,408
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Net Assets Available
for Plan Benefits..... $1,076,272 $124,036 $490,665 $754,760 $41,287 $52,760 $68,514 $434,796 $161,553 $3,204,643
========== ======== ======== ======== ======= ======= ======= ======== ======== ==========
</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, 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 Owner-
ship 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 invest-
ments................. -- -- -- -- -- -- -- 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 contri-
butions 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.
4
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1995
(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, 1994..... $ 775,501 $110,380 $336,907 $693,284 $28,858 $26,311 $31,601 $233,325 $(44,022) $2,192,145
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Employee Contribu-
tions................. 35,329 7,175 33,282 44,854 752 4,683 -- -- -- 126,075
Transfer of partici-
pants' balances--net.. (107,464) (1,145) 21,487 37,729 9,000 15,265 28,348 -- -- 3,220
Employing company con-
tributions............ -- -- -- -- -- -- -- 7,217 -- 7,217
Supplemental contribu-
tions................. -- -- -- -- -- -- -- -- 41,313 41,313
Allocation of shares
to participants....... -- -- -- -- -- -- -- 49,927 (49,927) --
Transfer of loan re-
payment............... -- -- -- -- -- -- -- (8,701) 8,701 --
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total Allotments,
Contributions,
Allocations and
Transfers............. (72,135) 6,030 54,769 82,583 9,752 19,948 28,348 48,443 87 177,825
Allocated share of
Trust investment ac-
tivities.............. 439,651 16,168 127,372 51,877 2,763 8,794 8,567 165,489 246,577 1,067,258
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Total Additions....... 367,516 22,198 182,141 134,460 12,515 28,742 36,915 213,932 246,664 1,245,083
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Less: Distributions to
Participants.......... 66,745 8,542 28,383 72,984 86 2,293 2 12,461 -- 191,496
Interest on Notes
Payable............. -- -- -- -- -- -- -- -- 41,089 41,089
---------- -------- -------- -------- ------- ------- ------- -------- -------- ----------
Net Assets Available
for Plan Benefits,
December 31, 1995.... $1,076,272 $124,036 $490,665 $754,760 $41,287 $52,760 $68,514 $434,796 $161,553 $3,204,643
========== ======== ======== ======== ======= ======= ======= ======== ======== ==========
</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, 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 partici-
pants' balances--net... 61,315 (30,649) (22,786) (49,799) (2,677) 21,482 31,661 -- -- 8,547
Employing company con-
tributions............. -- -- -- -- -- -- -- 13,771 -- 13,771
Supplemental contribu-
tions.................. -- -- -- -- -- -- -- -- 39,652 39,652
Allocation of shares to
participants........... -- -- -- -- -- -- -- 42,016 (42,016) --
Transfer of loan repay-
ment................... -- -- -- -- -- -- -- (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 activ-
ities.................. (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.
6
<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 partici-
pants' balances--net.... (61,543) 7,474 19,708 28,065 924 -- -- (5,372)
Employing company con-
tributions.............. -- -- -- -- -- 5,381 -- 5,381
Supplemental contribu-
tions................... -- -- -- -- -- -- 37,772 37,772
Allocation of shares to
participants............ -- -- -- -- -- 40,272 (40,272) --
Transfer for loan repay-
ment.................... -- -- -- -- -- (4,745) 4,745 --
-------- -------- -------- -------- ------- -------- -------- ----------
Total Allotments, Con-
tributions, 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, De-
cember 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.
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 13C09, 1155 Peachtree Street, N.E., Atlanta,
Georgia 30309-3610.
The following changes were adopted during 1995:
Effective January 1, 1995, in the event that BellSouth Shares transferred to
the Employee Stock Ownership Plan (ESOP) exceed the amount required to satisfy
allocation and matching requirements, such excess will be allocated as of the
last day of the Plan year to eligible employees in accordance with the
provisions detailed in the Plan amendment.
Effective April 1, 1995, participants are 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 is 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 remains two
to five years. However, the entire loan balance can 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 is $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 percent contributed 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 are not 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 (the
Window) there is a $1.50 per month maintenance charge and a $2.00 fee per
transaction within the Window.
The following changes will affect Plan participants during 1996:
Effective January 1, 1996, participants will be allowed to defer a larger
percent of their compensation through contributions to the Plan. Participants
may contribute up to 15% of their eligible compensation to the Plan on a
before-tax basis. The former before-tax limit was 12%.
Effective April 1, 1996, the BellSouth Management Savings and Employee Stock
Ownership Plan and the BellSouth Enterprises Retirement Savings Plan will be
merged into a single plan called the BellSouth Retirement Savings Plan (BRSP).
Some of the highlights of the BRSP are as follows:
. Employees will be eligible to participate in the BRSP upon attaining age
21 with six months of employment service.
. Participants' company matching contributions will continue to be
immediately vested.
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)--
Effective July 1, 1996, investments in the newly formed BRSP will be valued
on a daily basis. Prior to that date investments were valued on a monthly
basis. In connection with daily valuation, investments in mutual funds will no
longer be required to be made through the Window. Beginning July 1, 1996,
participants will be allowed to make direct contributions into the offered
mutual funds, which will be considered core funds.
Effective July 1, 1996, participants will have a new investment option to
which they can direct their contributions. The Fidelity Growth and Income Fund
is an active large capitalization growth and income stock mutual fund. The
funds investment objective is to seek high total return through a combination
of current income and capital appreciation. The fund expects to invest the
majority of its assets in domestic and foreign equity securities.
The annual administrative fee per participant will be $2.20 per month for
the first six months of 1996 and $2.26 for the last six months of 1996
totaling $26.76 for calendar year 1996. This represents an increase of $4.76
over the 1995 annual fee of $22. This fee will pay for up to four fund
transfers, four changes in how participant contributions are invested and four
changes in the percent contributed from each paycheck. More than four changes
in any of the above categories 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 VRS.
From January 1, 1996 through June 30, 1996, if a participant has one or more
investments in the Window there is a $1.50 per month maintenance charge and a
$2.00 fee per transaction within the Window. Beginning July 1, 1996, there
will no longer be a fee associated with mutual fund investments, although, a
$2 charge will be applied for changes that exceed four, as discussed above.
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
The financial statements of the Plan have been prepared in accordance with
generally accepted accounting principles. Such financial statements include
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities and the amounts
of revenues and expenses. Actual results could differ from those estimates.
Certain amounts in prior period financial statements have been reclassified to
conform to the current year's presentation.
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, 1995 and December 31, 1994, 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, 1995 and 1994 from published sources
where available and, if not available, from other sources considered
reliable; and
9
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
2. ACCOUNTING POLICIES (CONTINUED)--
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, Bond Fund, Indexed Stock Fund, Interest Income
Fund and 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, 1995 and December 31, 1994
were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
------------------------------ ------------------------------
TYPE OF INVESTMENT NUMBER OF UNITS VALUE PER UNIT NUMBER OF UNITS VALUE PER UNIT
- ------------------ --------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
BellSouth Stock Fund.... 661,474,161 $1.6271 791,400,762 $ .9799
Bond Fund............... 107,741,096 1.1512 110,115,539 1.0024
Indexed Stock Fund...... 352,903,599 1.3904 332,768,905 1.0124
Interest Income Fund.... 660,738,338 1.1423 648,234,601 1.0694
Balanced Fund........... 42,037,289 1.2551 27,118,692 .9702
</TABLE>
The number and value of units by month for each fund during 1995 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
1995 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......... 745,514,867 1.078408 109,482,555 1.019665 332,230,098 1.038989 688,674,241 1.075578 26,562,460 0.992864
February........ 735,923,856 1.072154 109,883,103 1.038670 332,323,927 1.079856 695,831,714 1.081083 26,368,489 1.023949
March........... 714,120,177 1.083396 108,227,104 1.044917 330,816,723 1.111654 712,097,056 1.087167 26,573,137 1.045981
April........... 687,990,270 1.125450 108,242,996 1.056714 330,261,984 1.144244 732,536,618 1.093103 27,175,489 1.072089
May............. 677,550,584 1.125799 108,695,369 1.088812 331,059,436 1.189697 734,688,130 1.099243 28,082,104 1.110182
June............ 660,623,891 1.169254 109,038,914 1.096482 334,650,475 1.216581 738,264,536 1.105314 30,479,299 1.128489
July............ 635,312,548 1.260906 109,216,560 1.096421 340,705,188 1.256071 751,744,751 1.111459 32,926,464 1.155206
August.......... 628,852,273 1.279478 109,575,941 1.106190 343,124,457 1.259916 746,766,708 1.117538 35,664,162 1.162737
September....... 650,513,393 1.360702 107,574,598 1.114523 344,284,035 1.310526 715,184,680 1.123514 36,655,646 1.192495
October......... 651,725,098 1.434636 107,575,968 1.127017 347,157,232 1.306407 699,376,099 1.129887 37,740,876 1.197048
November........ 658,871,536 1.456638 107,232,588 1.139079 350,212,225 1.364372 679,979,941 1.135932 40,261,305 1.235949
December........ 661,474,161 1.627080 107,741,096 1.151248 352,903,599 1.390365 660,738,338 1.142298 42,037,289 1.255084
</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)--
The net asset values by month for 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
1995 100 FUND VALUE II FUND VALUE II FUND VALUE II FUND INVESTORS FUND
---- -------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
January...... $15.25 $ 9.14 $ 9.77 $ 9.83 $18.41
February..... $15.58 $ 9.12 $10.31 $10.17 $19.04
March........ $15.94 $ 9.65 $10.46 $10.29 $19.86
April........ $16.20 $ 9.95 $10.83 $10.65 $20.61
May.......... $16.39 $ 9.89 $11.38 $10.94 $21.26
June......... $17.23 $ 9.78 $11.62 $11.37 $22.26
July......... $18.08 $10.33 $12.12 $11.98 $23.39
August....... $18.43 $ 9.97 $12.47 $12.36 $23.84
September.... $18.89 $10.03 $12.89 $12.50 $24.61
October...... $18.28 $ 9.83 $12.36 $11.89 $23.88
November..... $18.70 $ 9.95 $12.72 $12.13 $23.64
December..... $18.10 $10.42 $12.77 $12.29 $19.39
</TABLE>
At December 31, 1995, 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............................... 3,657
Entirely in Bond Fund.......................................... 245
Entirely in Indexed Stock Fund................................. 2,387
Entirely in Interest Income Fund............................... 2,970
Entirely in Balanced Fund...................................... 184
Equally in BellSouth Stock Fund and Bond Fund.................. 250
Equally in BellSouth Stock Fund and Indexed Stock Fund......... 1,217
Equally in BellSouth Stock Fund and Interest Income Fund....... 1,169
Equally in Bond Fund and Indexed Stock Fund.................... 388
Equally in Indexed Stock Fund and Interest Income Fund......... 788
Equally in Indexed Stock Fund and Balanced Fund................ 202
Equally in BellSouth Stock Fund, Bond Fund and Indexed Stock
Fund.......................................................... 132
Equally in BellSouth Stock Fund, Indexed Stock Fund and
Interest Income Fund.......................................... 236
Various Fund combinations*..................................... 3,195
------
Total Participants........................................... 17,020
======
</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.
Since all employing company contributions are made to the ESOP, all
employees currently contributing to the Plan are participants in the ESOP.
11
<PAGE>
BELLSOUTH MANAGEMENT SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated January 11, 1996, 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.
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
For the year ending December 31, 1995, employee contributions to the Plan
were 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% could be contributed on a before-tax basis.
Total before-tax and after-tax contributions could not exceed 15% of
compensation. Effective January 1, 1996, participants may contribute up to 15%
of their eligible compensation to the plan on a before-tax basis.
The employing company makes contributions in respect of each participant's
authorized basic contribution. The rate of the employing company matching
contribution remains in effect for a twelve month period from April 1 through
March 31. From January 1995 through March 1995, employing company matching
contributions were accrued based on an amount equal to 81% of the authorized
basic contribution of each participating employee. From April 1995 through
December 1995 the matching contribution was 74%. Employing company matching
contributions immediately vest when they are made.
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. Effective April 1,
1996, the BellSouth Enterprises Retirement Savings Plan will be merged with
the Plan to create the BRSP. Therefore, all contributions to the former plans
will be included in the BRSP.
6. TERMINATION PRIORITIES
BellSouth intends to continue the Plan indefinitely but reserves the right
to terminate or amend it. As previously disclosed, the Plan will be merged
with the BellSouth Enterprises Retirement Savings Plan into a single plan
called the BellSouth Retirement Savings Plan. This merger does not constitute
a termination of the Plan. 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
1995 Statement of Changes in Net Assets were $274.9, $107.0, $336.5 and $37.1
for the Bond Fund, Indexed Stock Fund, Interest Income Fund and Balanced Fund,
respectively.
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, 1995:
<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............. $25,281 $13,031 $5,958 $11,858 $9,390 $65,518
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..... 25,281 13,031 5,958 11,858 9,390 65,518
Allotments and contribu-
tions receivable....... -- -- -- -- -- --
Fund, BellSouth Savings
and Security Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
receivable--net........ 568 822 310 718 580 2,998
------- ------- ------ ------- ------ -------
Total Assets.......... 25,849 13,853 6,268 12,576 9,970 68,516
------- ------- ------ ------- ------ -------
LIABILITIES
Distributions payable... -- 2 -- -- -- 2
Fund, BellSouth Savings
and Security Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
payable--net........... -- -- -- -- -- --
Notes payable........... -- -- -- -- -- --
------- ------- ------ ------- ------ -------
Total liabilities..... -- 2 -- -- -- 2
------- ------- ------ ------- ------ -------
Net Assets Available for
Plan Benefits.......... $25,849 $13,851 $6,268 $12,576 $9,970 $68,514
======= ======= ====== ======= ====== =======
</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 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 contribu-
tions 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>
14
<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, 1995:
<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, 1994............... $14,719 $ 6,687 $1,153 $ 5,294 $3,748 $31,601
------- ------- ------ ------- ------ -------
Employee Contributions.. -- -- -- -- -- --
Transfer of partici-
pants' balances--net... 7,232 6,059 4,371 5,324 5,362 28,348
Employing company
contributions.......... -- -- -- -- -- --
Supplemental contribu-
tions.................. -- -- -- -- -- --
Allocation of shares to
participants........... -- -- -- -- -- --
Transfer of loan repay-
ment................... -- -- -- -- -- --
------- ------- ------ ------- ------ -------
Total Allotments, Con-
tributions, Allocations
and Transfers.......... 7,232 6,059 4,371 5,324 5,362 28,348
Allocated share of Trust
investment activities.. 3,898 1,107 744 1,958 860 8,567
------- ------- ------ ------- ------ -------
Total Additions......... 11,130 7,166 5,115 7,282 6,222 36,915
------- ------- ------ ------- ------ -------
Less: Distributions to
Participants........ -- 2 -- -- -- 2
Interest on Notes
Payable............ -- -- -- -- -- --
------- ------- ------ ------- ------ -------
Net Assets Available
for Plan Benefits,
December 31, 1995..... $25,849 $13,851 $6,268 $12,576 $9,970 $68,514
======= ======= ====== ======= ====== =======
</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)
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 partici-
pants' balances--net... 14,720 6,688 1,153 5,352 3,748 31,661
Employing company
contributions.......... -- -- -- -- -- --
Supplemental contribu-
tions.................. -- -- -- -- -- --
Allocation of shares to
participants........... -- -- -- -- -- --
Transfer of loan repay-
ment................... -- -- -- -- -- --
------- ------ ------ ------ ------ -------
Total Allotments, Con-
tributions, 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>
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
The assets of the Plan are held in 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. 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, 1995 and 1994 was 59.3661% and 61.3942%,
respectively. The Plan's allocated share of the net assets of each fund in the
Master Savings Trust at December 31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
BellSouth Stock Fund..................................... 47.80304% 50.03626%
Bond Fund................................................ 84.69528% 86.30406%
Indexed Stock Fund....................................... 77.59665% 79.29553%
Interest Income Fund..................................... 65.65475% 64.15525%
Loan Fund................................................ 71.20703% 73.91030%
Balanced Fund............................................ 79.25020% 81.63515%
Mutual Fund Window....................................... 74.44680% 75.88309%
</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)--
The financial position of the Master Savings Trust at December 31, 1995 and
1994 was as follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Assets: Investment at value:
BellSouth Stock Fund:
BellSouth common shares................................ $2,216,148 $1,396,036
Temporary cash investments............................. 33,313 44,436
Bond Fund:
Securities............................................. 139,775 136,669
Temporary cash investments............................. 2,302 2,282
Indexed Stock Fund:
Equity Index Fund...................................... 630,335 426,228
Temporary cash investments............................. 3,035 13,684
Interest Income Fund:
Contracts.............................................. 1,182,614 1,047,899
Temporary cash investments............................. 14,514 37,529
Loan Fund:
Loans to participants.................................. 59,432 47,581
Temporary cash investments............................. 39 37
Balanced Fund:
Securities............................................. 36,043 20,094
Temporary cash investments............................. 28,185 15,760
Mutual Fund Window:
Berger 100 Fund........................................ 34,304 18,745
DFA International Value II Fund........................ 16,020 8,225
DFA U.S. Large Cap Value II Fund....................... 7,801 1,419
DFA U.S. Small Cap Value II Fund....................... 15,151 6,490
20th Century Growth Investors Fund..................... 12,920 4,839
Temporary cash investments............................. 1,800 227
Distributable shares.................................... 3,004 3,916
Dividends and interest income receivable................ 2,516 3,716
Receivable for investments sold......................... 4,752 42,196
Loan repayment receivable............................... -- 487
Variation margin receivable............................. 33 41
---------- ----------
$4,444,036 $3,278,536
Liabilities:
Payable for investments purchased...................... 4,741 52,824
Variation margin payable............................... -- 20
Administrative fees payable............................ 648 1,362
---------- ----------
Allocated share of trust net assets (excluding ESOP
Trusts)................................................. 4,438,647 3,224,330
Investment in ESOP Trusts:
BellSouth shares of common stock allocated to partici-
pants.................................................. 773,185 415,616
Distributable shares.................................... 845 732
BellSouth common shares held for future allocation...... 871,871 597,525
Temporary cash investments.............................. 65,498 37,074
---------- ----------
Total investments........................................ 6,150,046 4,275,277
Liabilities:
Payable for investments purchased....................... 19,031 --
Notes payable........................................... 647,311 693,900
---------- ----------
Trust net assets...................................... $5,483,704 $3,581,377
========== ==========
Investments at cost...................................... $4,091,362 $3,809,323
========== ==========
</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.
18
<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.
The contracts held by the Trust in the Interest Income Fund are considered
fully benefit-responsive in accordance with AICPA Statement of Position 94-4.
A fully benefit-responsive investment contract provides a liquidity guarantee
by a financially responsible third party of principal and previously accrued
interest for liquidations, transfers, loans or hardship withdrawals initiated
by plan participants exercising their rights to withdraw, borrow or transfer
funds under the terms of the ongoing plan. The fair value of these investment
contracts as of December 31, 1995 was $1,202,906.
The crediting interest rate at December 31, 1995 and 1994, was 6.75% and
6.92%, respectively. The average yield as of December 31, 1995 and 1994, was
6.82% and 6.95%, respectively. Interest rates are reset on a quarterly,
monthly or semi-annual basis, whereby, such rates are reset to move the
current book value of these investments toward the projected future market
value over the life of the contract.
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,
1995, BellSouth made cash contributions to the ESOP Trusts in the amount of
$46,589 for the purpose of servicing the guaranteed debt and cash
contributions in the amount of $11,979 to purchase additional shares to meet
the match obligations and expects to make similar contributions during the
life of the Plan.
19
<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)--
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,
1995 are as follows:
<TABLE>
<CAPTION>
1996 1997 1998 1999 2000 THEREAFTER TOTAL
------- ------- ------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Maturities......... $52,977 $59,898 $67,418 $75,589 $84,470 $306,959 $647,311
======= ======= ======= ======= ======= ======== ========
</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, 1995.
The Master Savings Trust investment activities for the fiscal year ended
December 31, 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- --------
<S> <C> <C> <C>
Investment Activities:
Dividends on BellSouth Corporation common
shares...................................... $ 123,588 $ 119,486 $118,094
Interest Income Fund income.................. 77,893 69,048 65,950
Other interest............................... 18,523 12,748 11,917
Net change in unrealized
appreciation/(depreciation) on investments.. 1,581,522 (185,677) 292,122
Net realized gain on investments............. 62,815 14,693 31,658
Investment Manager Fees...................... (1,017) (980) (973)
---------- --------- --------
Net investment activities..................... $1,863,324 $ 29,318 $518,768
========== ========= ========
</TABLE>
20
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------------------
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*--98.5%........ 51,015 $1,074,057 $2,219,152
---------- ----------
TEMPORARY CASH INVESTMENTS--1.5%................ 18,374 33,127 33,313
---------- ----------
Total BellSouth Stock Fund--100%.............. $1,107,184 $2,252,465
---------- ----------
BOND FUND
U.S. GOVERNMENT TREASURY NOTES--41.0%
U.S. Treasury Notes, 7.625%, 05/31/96.......... $ 3,500 $ 3,809 $ 3,532
U.S. Treasury Notes, 7.875%, 06/30/96.......... $ 2,000 2,012 2,025
U.S. Treasury Notes, 7.250%, 08/31/96.......... $ 6,750 6,835 6,832
U.S. Treasury Notes, 6.750%, 05/31/97.......... $ 2,500 2,545 2,552
U.S. Treasury Notes, 7.375%, 11/15/97.......... $ 9,525 9,861 9,885
U.S. Treasury Notes, 7.250%, 11/30/96.......... $ 13,750 14,061 13,984
U.S. Treasury Notes, 7.500%, 12/31/96.......... $ 6,450 6,592 6,591
U.S. Treasury Notes, 8.875%, 11/15/97.......... $ 2,500 2,654 2,661
U.S. Treasury Notes, 8.875%, 11/15/98.......... $ 2,200 2,397 2,409
U.S. Treasury Notes, 8.000%, 10/15/96.......... $ 2,700 2,796 2,756
U.S. Treasury Notes, 8.000%, 01/15/97.......... $ 725 743 745
U.S. Treasury Notes, 8.500%, 04/15/97.......... $ 4,050 4,215 4,213
---------- ----------
$ 58,520 $ 58,185
---------- ----------
U.S. GOVERNMENT TREASURY BONDS--28.7%
U.S. Treasury Bonds, 11.625%, 11/15/04......... $ 5,400 $ 7,188 $ 7,641
U.S. Treasury Bonds, 9.375%, 02/15/06.......... $ 11,000 12,334 14,137
U.S. Treasury Bonds, 7.250%, 05/15/16.......... $ 11,450 10,893 13,074
U.S. Treasury Bonds, 7.500%, 11/15/06.......... $ 1,000 1,053 1,173
U.S. Treasury Bonds, 8.125%, 08/15/19.......... $ 3,750 4,223 4,715
---------- ----------
$ 35,691 $ 40,740
---------- ----------
FEDERAL AGENCY OBLIGATIONS--2.0%
Federal Natl. Mtg. Assn., 6.06%, 10/02/97...... $ 1,450 $ 1,452 $ 1,457
Federal Home Ln, Bks., 5.860%, 10/24/96........ $ 1,425 1,424 1,423
---------- ----------
$ 2,876 $ 2,880
---------- ----------
DOMESTIC CORPORATE OBLIGATIONS--26.7%
Cleveland Elec. Illum. Co.
9.100%, 07/22/96.............................. $ 400 $ 430 $ 404
Cleveland Elec. Illum. Co.
9.450%, 12/01/97.............................. $ 1,000 1,091 1,037
Cleveland Elec. Illum. Co.
8.700%, 06/03/96.............................. $ 4,600 4,798 4,625
</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, 1995
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- --------- ---------- ---------
BOND-FUND--(CONTINUED)
DOMESTIC CORPORATE OBLIGATIONS--26.7%--(CONTINUED)
<S> <C> <C> <C>
Commonwealth Edison Co.
9.010%, 08/01/96......................... $ 1,000 $ 1,056 $ 1,014
Commonwealth Edison Co.
8.920%, 08/15/96......................... $ 1,000 1,005 1,015
Houston Inds. Inc.
7.250%, 12/01/96......................... $ 1,500 1,500 1,519
Illinois Pwr. Co.
9.250%, 12/16/96......................... $ 2,000 2,085 2,063
Pacificorp Secd.
8.690%, 07/16/96......................... $ 2,000 2,000 2,030
Pennsylvania Elec. Co. Secd.
7.450%, 10/28/96......................... $ 1,000 1,000 1,015
Virginia Elec. & Pwr. Co.
8.200%, 08/15/96......................... $ 1,000 1,037 1,015
AMR Corp Del.
7.470%, 01/28/97......................... $ 1,000 1,014 1,013
Commonwealth Edison Co.
9.050%, 08/01/96......................... $ 1,000 1,080 1,014
Long Island Ltg. Co.
8.750%, 05/01/96......................... $ 3,450 3,521 3,492
Salomon Inc.
7.300%, 06/11/96......................... $ 2,600 2,604 2,613
USX-Marathon Group Inc.
8.875%, 09/15/97......................... $ 1,000 998 1,048
Cigna Corp.
8.000%, 09/01/96......................... $ 1,000 1,001 1,013
Chrysler Finl. Corp.
6.000%, 04/15/96......................... $ 2,000 2,058 2,001
Chrysler Finl. Corp.
8.125%, 12/15/96......................... $ 1,000 1,024 1,023
Ford Motor Credit Co.
8.625%, 04/15/96......................... $ 2,500 2,744 2,519
General Mtr. Accep. Corp.
7.250%, 02/15/96......................... $ 2,500 2,623 2,504
General Mtr. Accep. Corp.
6.300%, 02/02/96......................... $ 700 720 700
General Mtr. Accep. Corp.
8.250%, 08/01/96......................... $ 3,250 3,245 3,293
---------- ----------
$ 38,634 $ 37,970
---------- ----------
TEMPORARY CASH INVESTMENTS--1.6%........... $ 1,270 $ 2,299 $ 2,302
---------- ----------
Total Bond Fund--100.0%.................. $ 138,020 $ 142,077
---------- ----------
</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, 1995
--------------------------------
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--0.5%... 1,674 $ 3,033 $ 3,034
---------- ----------
BANKERS TRUST PYRAMID EQUITY INDEX FUND*--
99.5%....................................... 456 $ 362,410 $ 630,335
---------- ----------
Total Indexed Stock Fund--100.0%......... $ 365,443 $ 633,369
---------- ----------
INTEREST INCOME FUND
ANNUITY CONTRACTS WITH INSURANCE COMPANIES--
98.8%+
Aetna Life Insurance Company
(7.49%-9.81%).............................. $ 83,772 $ 83,773 $ 83,773
Allstate Life Insurance Company
(5.74%).................................... $ 11,481 11,481 11,481
BT Basic
(6.21%).................................... $ 104,834 104,834 104,834
CDC Investment Management Corp.
(4.906%-7.61%)............................. $ 79,835 79,835 79,835
Commonwealth Life Insurance Co.
(9.37%).................................... $ 1,146 1,146 1,146
Hartford Life
(8.70%).................................... $ 14,863 14,863 14,863
John Hancock Mutual Life
(7.13%-7.71%).............................. $ 122,980 122,980 122,980
Massachusetts Mutual
(9.70%).................................... $ 59,596 59,596 59,596
Metropolitan Life Insurance Co.
(5.79%-8.75%).............................. $ 109,884 109,884 109,884
Mutual Benefit Life Insurance Co.
(3.50%-5.10%).............................. $ 3,334 3,334 3,334
New York Life Insurance Co.
(5.39%-8.45%).............................. $ 65,351 65,351 65,351
Pacific Mutual Life
(9.39%).................................... $ 32,847 32,847 32,847
Peoples Security Life Insurance Co.
(5.03%-8.57%).............................. $ 118,848 118,848 118,848
</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, 1995
-------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- --------- ---------- ----------
INTEREST INCOME FUND--(CONTINUED)
<S> <C> <C> <C>
Provident National
(5.13%-8.53%)............................. $137,453 $ 137,453 $ 137,453
Prudential Insurance Company of America
(8.10%-9.35%)............................. $ 25,017 25,017 25,017
Rabobank Nederland
(6.17%-7.62%)............................. $ 61,103 61,103 61,103
State Mutual Life
(8.86%)................................... $ 10,645 10,645 10,645
Sun Life Association, Canada
(5.78%-5.79%)............................. $ 22,714 22,714 22,714
TransAmerican Life & Annuity
(7.54%)................................... $ 62,314 62,314 62,314
Union Bank of Switzerland
(7.28%-8.29%)............................. $ 54,596 54,596 54,596
---------- ----------
$1,182,614 $1,182,614
---------- ----------
TEMPORARY CASH INVESTMENTS--1.2%............ $ 14,514 $ 14,514 $ 14,514
---------- ----------
Total Interest Income Fund--100%.......... $1,197,128 $1,197,128
---------- ----------
LOAN FUND
LOANS TO PARTICIPANTS--99.9%................ $ 59,432 $ 59,432 $ 59,432
---------- ----------
TEMPORARY CASH INVESTMENTS--0.1%............ $ 39 $ 39 $ 39
---------- ----------
Total Loan Fund--100.0%................... $ 59,471 $ 59,471
---------- ----------
BALANCED FUND
TEMPORARY CASH INVESTMENTS--43.9%........... $ 15,546 $ 27,636 $ 28,186
---------- ----------
U.S. TREASURY BILL, EXP. 01/11/96--0.8%..... $ 560 $ 532 $ 532
---------- ----------
CORPORATE OBLIGATIONS--18.7%................ $ 6,771 $ 10,360 $ 11,978
---------- ----------
BT EQUITY INDEX FUND--36.6%................. $ 17 $ 17,193 $ 23,532
---------- ----------
Total Balanced Fund--100.0%............... $ 55,721 $ 64,228
---------- ----------
EMPLOYEE STOCK OWNERSHIP PLAN
SHARES OF BELLSOUTH COMMON STOCK*--96.2%.... 37,837 $1,021,227 $1,645,900
---------- ----------
TEMPORARY CASH INVESTMENTS--3.8%............ 36,125 $ 63,559 $ 65,498
---------- ----------
Total Employee Stock Ownership Fund--
100.0%................................... $1,084,786 $1,711,398
---------- ----------
</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, 1995
-------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- --------- ---------- ----------
MUTUAL FUND WINDOW
<S> <C> <C> <C>
MUTUAL FUNDS--98.0%
Berger 100 Fund............................. 1,895 $ 31,458 $ 34,304
DFA International Value II Fund............. 1,537 $ 15,240 $ 16,020
DFA U.S. Large Cap Value II Fund............ 611 $ 7,197 $ 7,801
DFA U.S. Small Cap Value II Fund............ 1,233 $ 13,402 $ 15,151
20th Century Growth Investors Fund.......... 666 $ 14,513 $ 12,920
---------- ----------
Total Equity Mutual Funds.................. $ 81,810 $ 86,196
---------- ----------
TEMPORARY CASH INVESTMENTS--2.0%
BT Pyramid Cash Plus Fund................... 79 $ 142 $ 143
Cash in Transit............................. 1,455 $ 1,455 $ 1,455
Schwab Retirement Money Fund................ 202 $ 202 $ 202
---------- ----------
$ 1,799 $ 1,800
---------- ----------
Total Mutual Fund Window--100.0%.......... $ 83,609 $ 87,996
---------- ----------
TOTAL INVESTMENTS.......................... $4,091,362 $6,148,132
========== ==========
</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 6.82%
for the year 1995. 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, 1995
or
[_]
Transition Report Pursuant to Section 15(d) of theSecurities Exchange Act
of 1934
For the transition period from Commission file number
_____________ 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, 1995
and 1994, 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,
1995. 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, 1995 and 1994, and the changes in net assets available
for plan benefits for each of the three years in the period ended December 31,
1995, 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 of 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 24, 1996
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 17, 1996, on our audits of the financial statements of the
BellSouth Savings and Security Plan as of December 31, 1995 and 1994, and for
each of the three years in the period ended December 31, 1995, and the
accompanying financial statement schedule as of December 31, 1995, which
report is included in this Annual Report on Form 11-K.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 24, 1996
2
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995
(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....... $1,042,539 $6,674 $54,968 $332,900 $9,619 $7,846 $12,079 $ -- $ -- $1,466,625
Investment in BellSouth
Savings and Security
Employee Stock
Ownership Plan Trust:
BellSouth shares of
common stock allocated
to participants....... -- -- -- -- -- -- -- 328,519 -- 328,519
BellSouth shares of
common stock held for
future allocation .... -- -- -- -- -- -- -- -- 293,103 293,103
Temporary cash
investments........... -- -- -- -- -- -- -- 38,046 5,201 43,247
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
Total Investments.... 1,042,539 6,674 54,968 332,900 9,619 7,846 12,079 366,565 298,304 2,131,494
Allotments and
contributions
receivable............. 6,621 121 1,521 4,408 155 279 -- 3,427 -- 16,532
Fund, BellSouth
Management Savings and
Employee Stock
Ownership Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
receivable--net........ 7,249 -- 340 -- 237 249 469 -- -- 8,544
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
Total Assets......... 1,056,409 6,795 56,829 337,308 10,011 8,374 12,548 369,992 298,304 2,156,570
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
LIABILITIES
Distributions payable.. 5,120 56 187 2,672 43 14 25 1,186 -- 9,303
Fund, BellSouth
Management Savings and
Employee Stock
Ownership Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
payable--net........... -- 9 -- 5,347 -- -- -- 85 -- 5,441
Notes payable.......... -- -- -- -- -- -- -- -- 219,467 219,467
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
Total liabilities.... 5,120 65 187 8,019 43 14 25 1,271 219,467 234,211
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
Net Assets Available
for Plan Benefits...... $1,051,289 $6,730 $56,642 $329,289 $9,968 $8,360 $12,523 $368,721 $ 78,837 $1,922,359
========== ====== ======= ======== ====== ====== ======= ======== ======== ==========
</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, 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.
4
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1995
(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, 1994................ $ 646,155 $5,113 $32,245 $313,647 $5,935 $3,975 $ 5,218 $199,491 $(28,813) $1,182,966
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
Employee Contributions.. 37,421 1,235 7,008 31,484 155 1,243 -- -- -- 78,546
Transfer of
participants' balances--
net..................... (3,835) (55) 6,132 (13,087) 3,555 1,900 5,884 -- -- 494
Employing company
contributions........... -- -- -- -- -- -- -- 23,397 -- 23,397
Supplemental
contributions........... -- -- -- -- -- -- -- -- 24,861 24,861
Allocation of shares to
participants............ -- -- -- -- -- -- -- 26,904 (26,904) --
Transfer for loan
repayment............... -- -- -- -- -- -- -- (5,381) 5,381 --
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
Total Allotments,
Contributions,
Allocations and
Transfers............... 33,586 1,180 13,140 18,397 3,710 3,143 5,884 44,920 3,338 127,298
Allocated share of Trust
investment activities... 414,437 799 13,156 21,737 508 1,354 1,444 132,087 125,572 711,094
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
Total Additions......... 448,023 1,979 26,296 40,134 4,218 4,497 7,328 177,007 128,910 838,392
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
Less: Distributions to
Participants............ 42,889 362 1,899 24,492 185 112 23 7,777 -- 77,739
Interest on Notes
Payable............... -- -- -- -- -- -- -- -- 21,260 21,260
---------- ------ ------- -------- ------ ------ ------- -------- -------- ----------
Net Assets Available
for Plan Benefits,
December 31, 1995 $1,051,289 $6,730 $56,642 $329,289 $9,968 $8,360 $12,523 $368,721 $ 78,837 $1,922,359
========== ====== ======= ======== ====== ====== ======= ======== ======== ==========
</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, 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.
6
<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.
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 13C09, 1155 Peachtree Street, N.E., Atlanta,
Georgia 30309-3610.
The following changes were adopted during 1995:
Effective April 1, 1995, participants are 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 is 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 can 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 is $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 percent contributed 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 are not 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 (the
Window) there is a $1.50 per month maintenance charge and a $2.00 fee per
transaction within the Window.
The following changes will affect Plan participants during 1996:
Effective January 1, 1996, participants will be allowed to defer a larger
percent of their compensation through contributions to the Plan. Participants
may contribute up to 15% of their eligible compensation to the Plan on a
before-tax basis. The former before-tax unit was 12%. Additionally, a new
basic contribution band will be added for participants whose weekly rate of
pay is $1,000 or more. Participants at this pay level will be allowed to
contribute up to $55 on a weekly basis and receive company matching
contributions.
The annual administrative fee per participant will be $2.20 per month for
the first six months of 1996 and $2.26 for the last six months of 1996
totaling $26.76 for calendar year 1996. This represents an increase of $4.76
over the 1995 annual fee of $22. This fee will pay for up to four fund
transfers, four changes in how participant contributions are invested and four
changes in the percent contributed from each paycheck. More than four changes
in any of the above categories will cost an extra $2 per transaction. In
addition, a $6 charge will be
8
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
1. PLAN DESCRIPTION (WHOLE DOLLARS) (CONTINUED)--
applied for transactions made through a service representative if these
transactions can be made through the automated VRS. From January 1, 1996
through June 30, 1996, if a participant has one or more investments in the
Window there is a $1.50 per month maintenance charge and a $2.00 fee per
transaction within the Window. Beginning July 1, 1996, there will no longer be
a fee associated with mutual fund investments, although, a $2 charge will be
applied for changes that exceed four, as discussed above.
Effective July 1, 1996, participants will have a new investment option to
which they can direct their contributions. The Fidelity Growth and Income Fund
is an active, large capitalization growth and income stock mutual fund. The
fund's investment objective is to seek high total return through a combination
of current income and capital appreciation. The fund expects to invest the
majority of its assets in domestic and foreign equity securities.
Effective July 1, 1996, investments held by the Plan will be valued on a
daily basis. Prior to that date investments were valued on a monthly basis. In
connection with daily valuation, investments in mutual funds will no longer be
required to be made through the Window. Beginning July 1, 1996, participants
will be allowed to make direct contributions into the offered mutual funds,
which will be considered core funds.
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--
The financial statements of the Plan have been prepared in accordance with
generally accepted accounting principles. Such financial statements include
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities and the amounts
of revenues and expenses. Actual results could differ from those estimates.
Certain amounts in prior period financial statements have been reclassified to
conform to the current year's presentation.
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, 1995 and December 31, 1994, 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, 1995 and 1994 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.
9
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
2. ACCOUNTING POLICIES (CONTINUED)--
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, Bond Fund, Indexed Stock Fund, Interest Income
Fund and 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, 1995 and December 31, 1994
were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
------------------------------ ------------------------------
TYPE OF INVESTMENT NUMBER OF UNITS VALUE PER UNIT NUMBER OF UNITS VALUE PER UNIT
- ------------------ --------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
BellSouth Stock Fund.... 646,120,050 $1.6271 659,403,300 $ .9799
Bond Fund............... 5,846,822 1.1512 5,100,850 1.0024
Indexed Stock Fund...... 40,738,848 1.3904 31,849,462 1.0124
Interest Income Fund.... 288,269,045 1.1423 293,266,649 1.0694
Balanced Fund........... 6,661,087 1.2551 4,097,176 .9702
</TABLE>
The number and value of units by month for each fund during 1995 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
1995 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............ 655,066,354 1.078408 5,157,177 1.019665 31,909,291 1.038989 297,740,629 1.075578 4,065,989 0.992864
February........... 653,811,956 1.072154 5,244,189 1.038670 32,172,397 1.079856 300,216,521 1.081083 4,050,376 1.023949
March.............. 647,835,799 1.083396 5,298,889 1.044917 32,201,747 1.111654 304,049,185 1.087167 4,041,544 1.045981
April.............. 644,220,512 1.125450 5,390,400 1.056714 32,716,050 1.144244 307,659,631 1.093103 4,129,404 1.072089
May................ 640,739,933 1.125799 5,460,262 1.088812 33,644,633 1.189697 308,368,500 1.099243 4,300,824 1.110182
June............... 636,415,050 1.169254 5,515,360 1.096482 34,705,478 1.216581 308,690,807 1.105314 4,599,746 1.128489
July............... 630,271,824 1.260906 5,752,006 1.096421 36,497,857 1.256071 313,121,366 1.111459 4,949,634 1.155206
August............. 628,427,216 1.279478 5,812,044 1.106190 37,935,275 1.259916 311,948,599 1.117538 5,507,012 1.162737
September.......... 636,934,215 1.360702 5,650,150 1.114523 38,176,151 1.310526 302,469,853 1.123514 5,883,313 1.192495
October............ 638,453,484 1.434636 5,720,847 1.127017 39,257,866 1.306407 298,642,098 1.129887 6,121,067 1.197048
November........... 642,414,467 1.456638 5,803,789 1.139079 40,132,281 1.364372 292,386,985 1.135932 6,414,298 1.235949
December........... 646,120,050 1.627080 5,846,822 1.151248 40,738,848 1.390365 288,269,045 1.142298 6,661,087 1.255084
</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 (WHOLE DOLLARS) (CONTINUED)--
The net asset values by month for 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
1995 100 FUND VALUE II FUND VALUE II FUND VALUE II FUND INVESTORS FUND
---- -------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
January...... $15.25 $9.14 $9.77 $9.83 $18.41
February..... $15.58 $9.12 $10.31 $10.17 $19.04
March........ $15.94 $9.65 $10.46 $10.29 $19.86
April........ $16.20 $9.95 $10.83 $10.65 $20.61
May.......... $16.39 $9.89 $11.38 $10.94 $21.26
June......... $17.23 $9.78 $11.62 $11.37 $22.26
July......... $18.08 $10.33 $12.12 $11.98 $23.39
August....... $18.43 $9.97 $12.47 $12.36 $23.84
September.... $18.89 $10.03 $12.89 $12.50 $24.61
October...... $18.28 $9.83 $12.36 $11.89 $23.88
November..... $18.70 $9.95 $12.72 $12.13 $23.64
December..... $18.10 $10.42 $12.77 $12.29 $19.39
</TABLE>
At December 31, 1995, 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............................... 15,506
Entirely in Indexed Stock Fund................................. 1,495
Entirely in Interest Income Fund............................... 13,435
Entirely in Balanced Fund...................................... 272
Equally in BellSouth Stock Fund and Bond Fund.................. 242
Equally in BellSouth Stock Fund and Indexed Stock Fund......... 1,697
Equally in BellSouth Stock Fund and Interest Income Fund....... 7,553
Equally in BellSouth Stock Fund and Balanced Fund.............. 191
Equally in Bond Fund and Indexed Stock Fund.................... 164
Equally in Indexed Stock Fund and Interest Income Fund......... 504
Equally in Indexed Stock Fund and Balanced Fund................ 201
Equally in Bond Fund, Indexed Stock Fund and Interest Income
Fund.......................................................... 104
Equally in BellSouth Stock Fund, Bond Fund and Indexed Stock
Fund.......................................................... 171
Equally in BellSouth Stock Fund, Indexed Stock Fund and
Interest Income Fund.......................................... 334
Equally in BellSouth Stock Fund, Indexed Stock Fund and
Balanced Fund................................................. 198
Equally in BellSouth Stock Fund, Bond Fund, Indexed Stock Fund
and Interest Income Fund...................................... 273
Various Fund combinations*..................................... 645
------
Total Participants........................................... 42,985
======
</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.
Since all employing company contributions are made to the ESOP, all
employees currently contributing to the Plan are participants in the ESOP.
11
<PAGE>
BELLSOUTH SAVINGS AND SECURITY PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated November 22, 1995, 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.
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.
Employee contributions to the Plan are accrued based upon authorized basic
and supplemental contributions. The maximum basic contribution rate was $50 a
week during 1995. Effective January 1, 1996 the maximum basic contribution
rate will be increased to $55 per week. No more than 12% of compensation could
be contributed on a before-tax basis. Effective January 1, 1996, participants
may contribute up to 15% of their eligible compensation to the Plan 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 each participant's
authorized basic contribution. The rate of the employing company matching
contribution remains in effect for a twelve month period from April 1 through
March 31. From January 1995 through March 1995, employing company matching
contributions were accrued based on an amount equal to 71% of the authorized
basic contribution of each participating employee of BellSouth Advertising and
Publishing Corporation and 76% for employees of all other participating
companies. From April 1995 through December 1995, the matching contribution
was 69%. 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.
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
1995 Statement of Changes in Net Assets were $14.1, $11.3, $141.5 and $5.7 for
the Bond Fund, Indexed Stock Fund, Interest Income Fund and Balanced Fund,
respectively.
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, 1995:
<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............. $6,013 $857 $1,462 $1,235 $2,512 $12,079
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..... 6,013 857 1,462 1,235 2,512 12,079
Allotments and
contributions
receivable............. -- -- -- -- -- --
Fund, BellSouth
Management Savings and
Employee Stock
Ownership Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
receivable--net........ 8 115 79 86 181 469
------ ---- ------ ------ ------ -------
Total Assets.......... 6,021 972 1,541 1,321 2,693 12,548
------ ---- ------ ------ ------ -------
LIABILITIES
Distributions payable... 18 4 -- -- 3 25
Fund, BellSouth
Management Savings and
Employee Stock
Ownership Plan,
BellSouth Enterprises
Retirement Savings Plan
and other transfers
payable--net........... -- -- -- -- -- --
Notes payable........... -- -- -- -- -- --
------ ---- ------ ------ ------ -------
Total liabilities..... 18 4 -- -- 3 25
------ ---- ------ ------ ------ -------
Net Assets Available for
Plan Benefits.......... $6,003 $968 $1,541 $1,321 $2,690 $12,523
====== ==== ====== ====== ====== =======
</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 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>
14
<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, 1995:
<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, 1994............... $3,009 $582 $ 224 $ 458 $ 945 $ 5,218
------ ---- ------ ------ ------ -------
Employee Contributions.. -- -- -- -- -- --
Transfer of
participants'
balances--net.......... 2,185 308 1,156 697 1,538 5,884
Employing company
contributions.......... -- -- -- -- -- --
Supplemental
contributions.......... -- -- -- -- -- --
Allocation of shares to
participants........... -- -- -- -- -- --
Transfer of loan
repayment.............. -- -- -- -- -- --
------ ---- ------ ------ ------ -------
Total Allotments,
Contributions,
Allocations and
Transfers.............. 2,185 308 1,156 697 1,538 5,884
Allocated share of Trust
investment activities.. 826 81 161 166 210 1,444
------ ---- ------ ------ ------ -------
Total Additions......... 3,011 389 1,317 863 1,748 7,328
------ ---- ------ ------ ------ -------
Less: Distributions to
Participants........... 17 3 -- -- 3 23
Interest on Notes
Payable.............. -- -- -- -- -- --
------ ---- ------ ------ ------ -------
Net Assets Available
for Plan Benefits,
December 31, 1995..... $6,003 $968 $1,541 $1,321 $2,690 $12,523
====== ==== ====== ====== ====== =======
</TABLE>
15
<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>
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
The assets of the Plan are held in 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. 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, 1995 and 1994 was 33.0476% and 31.5478%,
respectively. The Plan's allocated share of the net assets of each fund in the
Master Savings Trust at December 31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
BellSouth Stock Fund..................................... 46.29514% 44.74181%
Bond Fund................................................ 4.62267% 4.02274%
Indexed Stock Fund....................................... 8.68148% 7.65149%
Interest Income Fund..................................... 27.82033% 29.49415%
Loan Fund................................................ 16.21847% 13.89768%
Balanced Fund............................................ 12.20172% 12.53545%
Mutual Fund Window....................................... 13.72490% 12.17727%
</TABLE>
17
<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, 1995 and
1994 was as follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Assets: Investment at value:
BellSouth Stock Fund:
BellSouth common shares................................ $2,216,148 $1,396,036
Temporary cash investments............................. 33,313 44,436
Bond Fund:
Securities............................................. 139,775 136,669
Temporary cash investments............................. 2,302 2,282
Indexed Stock Fund:
Equity Index Fund...................................... 630,335 426,228
Temporary cash investments............................. 3,035 13,684
Interest Income Fund:
Contracts.............................................. 1,182,614 1,047,899
Temporary cash investments............................. 14,514 37,529
Loan Fund:
Loans to participants.................................. 59,432 47,581
Temporary cash investments............................. 39 37
Balanced Fund:
Securities............................................. 36,043 20,094
Temporary cash investments............................. 28,185 15,760
Mutual Fund Window:
Berger 100 Fund........................................ 34,304 18,745
DFA International Value II Fund........................ 16,020 8,225
DFA U.S. Large Cap Value II Fund....................... 7,801 1,419
DFA U.S. Small Cap Value II Fund....................... 15,151 6,490
20th Century Growth Investors Fund..................... 12,920 4,839
Temporary cash investments............................. 1,800 227
Distributable shares.................................... 3,004 3,916
Dividends and interest income receivable................ 2,516 3,716
Receivable for investments sold......................... 4,752 42,196
Loan repayment receivable............................... -- 487
Variation margin receivable............................. 33 41
---------- ----------
$4,444,036 $3,278,536
Liabilities:
Payable for investments purchased...................... 4,741 52,824
Variation margin payable............................... -- 20
Administrative fees payable............................ 648 1,362
---------- ----------
Allocated share of trust net assets (excluding ESOP
Trusts)................................................. 4,438,647 3,224,330
Investment in ESOP Trusts:
BellSouth shares of common stock allocated to partici-
pants.................................................. 773,185 415,616
Distributable shares.................................... 845 732
BellSouth common shares held for future allocation...... 871,871 597,525
Temporary cash investments.............................. 65,498 37,074
---------- ----------
Total investments........................................ 6,150,046 4,275,277
Liabilities:
Payable for investments purchased....................... 19,031 --
Notes payable........................................... 647,311 693,900
---------- ----------
Trust net assets...................................... $5,483,704 $3,581,377
========== ==========
Investments at cost...................................... $4,091,362 $3,809,323
========== ==========
</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.
18
<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.
The contracts held by the Trust in the Interest Income Fund are considered
fully benefit-responsive in accordance with AICPA Statement of Position 94-4.
A fully benefit-responsive investment contract provides a liquidity guarantee
by a financially responsible third party of principal and previously accrued
interest for liquidations, transfers, loans or hardship withdrawals initiated
by plan participants exercising their rights to withdraw, borrow or transfer
funds under the terms of the ongoing plan. The fair value of these investment
contracts as of December 31, 1995 was $1,202,906.
The crediting interest rate at December 31, 1995 and 1994, was 6.75% and
6.92%, respectively. The average yield as of December 31, 1995 and 1994, was
6.82% and 6.95%, respectively. Interest rates are reset on a quarterly,
monthly or semi-annual basis, whereby, such rates are reset to move the
current book value of these investments toward the projected future market
value over the life of the contract.
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,
1995, BellSouth made cash contributions to the ESOP Trusts in the amount of
$46,589 for the purpose of servicing the guaranteed debt and cash
contributions in the amount of $11,979 to purchase additional shares to meet
the match obligations and expects to make similar contributions during the
life of the Plan.
19
<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)--
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,
1995 are as follows:
<TABLE>
<CAPTION>
1996 1997 1998 1999 2000 THEREAFTER TOTAL
------- ------- ------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Maturities......... $52,977 $59,898 $67,418 $75,589 $84,470 $306,959 $647,311
======= ======= ======= ======= ======= ======== ========
</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, 1995.
The Master Savings Trust investment activities for the fiscal year ended
December 31, 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- --------
<S> <C> <C> <C>
Investment Activities:
Dividends on BellSouth Corporation common
shares...................................... $ 123,588 $ 119,486 $118,094
Interest Income Fund income.................. 77,893 69,048 65,950
Other interest............................... 18,523 12,748 11,917
Net change in unrealized
appreciation/(depreciation) on investments.. 1,581,522 (185,677) 292,122
Net realized gain on investments............. 62,815 14,693 31,658
Investment Manager Fees...................... (1,017) (980) (973)
---------- --------- --------
Net investment activities..................... $1,863,324 $ 29,318 $518,768
========== ========= ========
</TABLE>
20
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------------------
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*--98.5%........ 51,015 $1,074,057 $2,219,152
---------- ----------
TEMPORARY CASH INVESTMENTS--1.5%................ 18,374 33,127 33,313
---------- ----------
Total BellSouth Stock Fund--100%.............. $1,107,184 $2,252,465
---------- ----------
BOND FUND
U.S. GOVERNMENT TREASURY NOTES--41.0%
U.S. Treasury Notes, 7.625%, 05/31/96.......... $ 3,500 $ 3,809 $ 3,532
U.S. Treasury Notes, 7.875%, 06/30/96.......... $ 2,000 2,012 2,025
U.S. Treasury Notes, 7.250%, 08/31/96.......... $ 6,750 6,835 6,832
U.S. Treasury Notes, 6.750%, 05/31/97.......... $ 2,500 2,545 2,552
U.S. Treasury Notes, 7.375%, 11/15/97.......... $ 9,525 9,861 9,885
U.S. Treasury Notes, 7.250%, 11/30/96.......... $ 13,750 14,061 13,984
U.S. Treasury Notes, 7.500%, 12/31/96.......... $ 6,450 6,592 6,591
U.S. Treasury Notes, 8.875%, 11/15/97.......... $ 2,500 2,654 2,661
U.S. Treasury Notes, 8.875%, 11/15/98.......... $ 2,200 2,397 2,409
U.S. Treasury Notes, 8.000%, 10/15/96.......... $ 2,700 2,796 2,756
U.S. Treasury Notes, 8.000%, 01/15/97.......... $ 725 743 745
U.S. Treasury Notes, 8.500%, 04/15/97.......... $ 4,050 4,215 4,213
---------- ----------
$ 58,520 $ 58,185
---------- ----------
U.S. GOVERNMENT TREASURY BONDS--28.7%
U.S. Treasury Bonds, 11.625%, 11/15/04......... $ 5,400 $ 7,188 $ 7,641
U.S. Treasury Bonds, 9.375%, 02/15/06.......... $ 11,000 12,334 14,137
U.S. Treasury Bonds, 7.250%, 05/15/16.......... $ 11,450 10,893 13,074
U.S. Treasury Bonds, 7.500%, 11/15/06.......... $ 1,000 1,053 1,173
U.S. Treasury Bonds, 8.125%, 08/15/19.......... $ 3,750 4,223 4,715
---------- ----------
$ 35,691 $ 40,740
---------- ----------
FEDERAL AGENCY OBLIGATIONS--2.0%
Federal Natl. Mtg. Assn., 6.06%, 10/02/97...... $ 1,450 $ 1,452 $ 1,457
Federal Home Ln, Bks., 5.860%, 10/24/96........ $ 1,425 1,424 1,423
---------- ----------
$ 2,876 $ 2,880
---------- ----------
DOMESTIC CORPORATE OBLIGATIONS--26.7%
Cleveland Elec. Illum. Co.
9.100%, 07/22/96.............................. $ 400 $ 430 $ 404
Cleveland Elec. Illum. Co.
9.450%, 12/01/97.............................. $ 1,000 1,091 1,037
Cleveland Elec. Illum. Co.
8.700%, 06/03/96.............................. $ 4,600 4,798 4,625
</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, 1995
-----------------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ------------- ---------- ------------
BOND-FUND--(CONTINUED)
DOMESTIC CORPORATE OBLIGATIONS--26.7%--(CONTINUED)
<S> <C> <C> <C>
Commonwealth Edison Co.
9.010%, 08/01/96............................... $ 1,000 $ 1,056 $ 1,014
Commonwealth Edison Co.
8.920%, 08/15/96............................... $ 1,000 1,005 1,015
Houston Inds. Inc.
7.250%, 12/01/96............................... $ 1,500 1,500 1,519
Illinois Pwr. Co.
9.250%, 12/16/96............................... $ 2,000 2,085 2,063
Pacificorp Secd.
8.690%, 07/16/96............................... $ 2,000 2,000 2,030
Pennsylvania Elec. Co. Secd.
7.450%, 10/28/96............................... $ 1,000 1,000 1,015
Virginia Elec. & Pwr. Co.
8.200%, 08/15/96............................... $ 1,000 1,037 1,015
AMR Corp Del.-
7.470%, 01/28/97............................... $ 1,000 1,014 1,013
Commonwealth Edison Co.
9.050%, 08/01/96............................... $ 1,000 1,080 1,014
Long Island Ltg. Co.
8.750%, 05/01/96............................... $ 3,450 3,521 3,492
Salomon Inc.
7.300%, 06/11/96............................... $ 2,600 2,604 2,613
USX-Marathon Group Inc.
8.875%, 09/15/97............................... $ 1,000 998 1,048
Cigna Corp.
8.000%, 09/01/96............................... $ 1,000 1,001 1,013
Chrysler Finl. Corp.
6.000%, 04/15/96............................... $ 2,000 2,058 2,001
Chrysler Finl. Corp.
8.125%, 12/15/96............................... $ 1,000 1,024 1,023
Ford Motor Credit Co.
8.625%, 04/15/96............................... $ 2,500 2,744 2,519
General Mtr. Accep. Corp.
7.250%, 02/15/96............................... $ 2,500 2,623 2,504
General Mtr. Accep. Corp.
6.300%, 02/02/96............................... $ 700 720 700
General Mtr. Accep. Corp.
8.250%, 08/01/96............................... $ 3,250 3,245 3,293
---------- ----------
$ 38,634 $ 37,970
---------- ----------
TEMPORARY CASH INVESTMENTS--1.6%................. $ 1,270 $ 2,299 $ 2,302
---------- ----------
Total Bond Fund--100.0%........................ $ 138,020 $ 142,077
---------- ----------
</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, 1995
-----------------------------------------
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--0.5%.................. 1,674 $ 3,033 $ 3,034
---------- ----------
BANKERS TRUST PYRAMID EQUITY INDEX FUND*--99.5%............. 456 $ 362,410 $ 630,335
---------- ----------
Total Indexed Stock Fund--100.0%........................ $ 365,443 $ 633,369
---------- ----------
INTEREST INCOME FUND
ANNUITY CONTRACTS WITH INSURANCE COMPANIES--98.8%+
Aetna Life Insurance Company
(7.49%-9.81%)............................................. $ 83,772 $ 83,773 $ 83,773
Allstate Life Insurance Company
(5.74%)................................................... $ 11,481 11,481 11,481
BT Basic
(6.21%)................................................... $ 104,834 104,834 104,834
CDC Investment Management Corp.
(4.906%-7.61%)............................................ $ 79,835 79,835 79,835
Commonwealth Life Insurance Co.
(9.37%)................................................... $ 1,146 1,146 1,146
Hartford Life
(8.70%)................................................... $ 14,863 14,863 14,863
John Hancock Mutual Life
(7.13%-7.71%)............................................. $ 122,980 122,980 122,980
Massachusetts Mutual
(9.70%)................................................... $ 59,596 59,596 59,596
Metropolitan Life Insurance Co.
(5.79%-8.75%)............................................. $ 109,884 109,884 109,884
Mutual Benefit Life Insurance Co.
(3.50%-5.10%)............................................. $ 3,334 3,334 3,334
New York Life Insurance Co.
(5.39%-8.45%)............................................. $ 65,351 65,351 65,351
Pacific Mutual Life
(9.39%)................................................... $ 32,847 32,847 32,847
Peoples Security Life Insurance Co.
(5.03%-8.57%)............................................. $ 118,848 118,848 118,848
Provident National
(5.13%-8.53%)............................................. $ 137,453 $ 137,453 $ 137,453
Prudential Insurance Company of America
(8.10%-9.35%)............................................. $ 25,017 25,017 25,017
Rabobank Nederland
(6.17%-7.62%)............................................. $ 61,103 61,103 61,103
State Mutual Life
(8.86%)................................................... $ 10,645 10,645 10,645
</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, 1995
-------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- --------- ---------- ----------
INTEREST INCOME FUND--(CONTINUED)
<S> <C> <C> <C>
Sun Life Association, Canada
(5.78%-5.79%).................................. $22,714 22,714 22,714
TransAmerican Life & Annuity
(7.54%)........................................ $62,314 62,314 62,314
Union Bank of Switzerland
(7.28%-8.29%).................................. $54,596 54,596 54,596
---------- ----------
$1,182,614 $1,182,614
---------- ----------
TEMPORARY CASH INVESTMENTS--1.2%................. $14,514 $ 14,514 $ 14,514
---------- ----------
Total Interest Income Fund--100%............... $1,197,128 $1,197,128
---------- ----------
LOAN FUND
LOANS TO PARTICIPANTS--99.9%..................... $59,432 $ 59,432 $ 59,432
---------- ----------
TEMPORARY CASH INVESTMENTS--0.1%................. $ 39 $ 39 $ 39
---------- ----------
Total Loan Fund--100.0%........................ $ 59,471 $ 59,471
---------- ----------
BALANCED FUND
TEMPORARY CASH INVESTMENTS--43.9%................ $15,546 $ 27,636 $ 28,186
---------- ----------
U.S. TREASURY BILL, EXP. 01/11/96--0.8%.......... $ 560 $ 532 $ 532
---------- ----------
CORPORATE OBLIGATIONS--18.7%..................... $ 6,771 $ 10,360 $ 11,978
---------- ----------
BT EQUITY INDEX FUND--36.6%...................... $ 17 $ 17,193 $ 23,532
---------- ----------
Total Balanced Fund--100.0%.................... $ 55,721 $ 64,228
---------- ----------
EMPLOYEE STOCK OWNERSHIP PLAN
SHARES OF BELLSOUTH COMMON STOCK*--96.2%......... 37,837 $1,021,227 $1,645,900
---------- ----------
TEMPORARY CASH INVESTMENTS--3.8%................. 36,125 $ 63,559 $ 65,498
---------- ----------
Total Employee Stock Ownership Fund--100.0%.... $1,084,786 $1,711,398
---------- ----------
MUTUAL FUND WINDOW
MUTUAL FUNDS--98.0%
Berger 100 Fund................................. 1,895 $ 31,458 $ 34,304
DFA International Value II Fund................. 1,537 $ 15,240 $ 16,020
DFA U.S. Large Cap Value II Fund................ 611 $ 7,197 $ 7,801
DFA U.S. Small Cap Value II Fund................ 1,233 $ 13,402 $ 15,151
20th Century Growth Investors Fund.............. 666 $ 14,513 $ 12,920
---------- ----------
Total Equity Mutual Funds...................... $ 81,810 $ 86,196
---------- ----------
</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, 1995
-------------------------------
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--2.0%
BT Pyramid Cash Plus Fund........................ 79 $ 142 $ 143
Cash in Transit.................................. 1,455 $ 1,455 $ 1,455
Schwab Retirement Money Fund..................... 202 $ 202 $ 202
---------- ----------
$ 1,799 $ 1,800
---------- ----------
Total Mutual Fund Window--100.0%............... $ 83,609 $ 87,996
---------- ----------
TOTAL INVESTMENTS............................... $4,091,362 $6,148,132
========== ==========
</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 6.82%
for the year 1995. 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, 1995
or
[_] Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the transition Commission file
period from __ to ___ number 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, 1995 and 1994, 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, 1995. 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, 1995 and 1994, and the changes in net assets available
for plan benefits for each of the three years in the period ended December 31,
1995, 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 of 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 24, 1996
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 17, 1996, on our audits of the financial statements of the BellSouth
Enterprises Retirement Savings Plan as of December 31, 1995 and 1994, and for
each of the three years in the period ended December 31, 1995, and the
accompanying financial statement schedule as of December 31, 1995, which
report is included in this Annual Report on Form 11-K.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 24, 1996
2
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995
(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.............. $132,966 $15,432 $86,917 $78,145 $7,484 $5,498 $10,410 $336,852
Allotments and
contributions
receivable.............. 4,102 -- -- -- 168 -- -- 4,270
Fund, BellSouth Savings
and Security Plan,
BellSouth Management
Savings and Employee
Stock Ownership Plan and
other transfers
receivable--net......... 192 -- -- -- -- -- 386 578
-------- ------- ------- ------- ------ ------ ------- --------
Total Assets.......... 137,260 15,432 86,917 78,145 7,652 5,498 10,796 341,700
-------- ------- ------- ------- ------ ------ ------- --------
LIABILITIES
Distributions payable... 833 771 3,359 3,078 48 41 20 8,150
Fund, BellSouth Savings
and Security Plan,
BellSouth Management
Savings and Employee
Stock Ownership Plan and
other transfers
payable--net............ -- 55 696 2,948 42 1,159 -- 4,900
-------- ------- ------- ------- ------ ------ ------- --------
Total Liabilities..... 833 826 4,055 6,026 90 1,200 20 13,050
-------- ------- ------- ------- ------ ------ ------- --------
Net Assets Available for
Plan Benefits........... $136,427 $14,606 $82,862 $72,119 $7,562 $4,298 $10,776 $328,650
======== ======= ======= ======= ====== ====== ======= ========
</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, 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.
4
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED DECEMBER 31, 1995
(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, 1994................ $ 82,266 $13,213 $54,752 $64,417 $5,079 $1,610 $ 5,057 $226,394
-------- ------- ------- ------- ------ ------ ------- --------
Employee contributions.. 8,090 2,300 11,179 6,451 168 755 -- 28,943
Employing company
contributions........... 11,473 8 66 41 -- 7 -- 11,595
Transfer of
participants' balances--
net..................... (11,783) (973) 3,555 4,102 2,341 1,467 4,530 3,239
-------- ------- ------- ------- ------ ------ ------- --------
Total Allotments,
Contributions and
Transfers............... 7,780 1,335 14,800 10,594 2,509 2,229 4,530 43,777
Allocated share of Trust
investment activities... 52,830 1,920 21,230 4,742 457 607 1,192 82,978
-------- ------- ------- ------- ------ ------ ------- --------
Total Additions......... 60,610 3,255 36,030 15,336 2,966 2,836 5,722 126,755
-------- ------- ------- ------- ------ ------ ------- --------
Less: Distributions to
Participants............ 6,449 1,862 7,920 7,634 483 148 3 24,499
-------- ------- ------- ------- ------ ------ ------- --------
Net Assets Available
for Plan Benefits,
December 31, 1995...... $136,427 $14,606 $82,862 $72,119 $7,562 $4,298 $10,776 $328,650
======== ======= ======= ======= ====== ====== ======= ========
</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, 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.
6
<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.
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. 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 13C09, 1155
Peachtree Street, N.E., Atlanta, Georgia 30309-3610.
The following changes were adopted during 1995:
Effective April 1, 1995, participants are 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 is 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 remains two
to five years. However, the entire loan balance can 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 is $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 percent contributed 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 are not 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 (the
Window), there is a $1.50 per month maintenance charge and a $2.00 fee per
transaction within the Window.
The following changes will affect Plan participants during 1996:
Effective January 1, 1996, participants will be allowed to defer a larger
percent of their compensation through contributions to the Plan. Participants
may contribute up to 15% of their eligible compensation to the Plan on a
before-tax basis. The former before-tax limit was 12%.
Effective April 1, 1996, the BellSouth Management Savings and Employee Stock
Ownership Plan and the BellSouth Enterprises Retirement Savings Plan will be
merged into a single plan called the BellSouth Retirement Savings Plan (BRSP).
Some of the highlights of the BRSP are as follows:
. Employees will be eligible to participate in the BRSP upon attaining age
21 with six months of employment service.
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)--
. Participants' company matching contributions will be immediately vested.
. The majority of former RSP companies' matching contributions will be made
in the form of BellSouth stock invested in a Leveraged Employee Stock
Ownership Plan (LESOP), a part of the newly formed BRSP. Prior to the
formation of the BRSP, company matching contributions were in the form of
BellSouth stock invested in the RSP BellSouth Stock Fund.
. Participants will be eligible to receive a Company match on 6% of their
before-tax and after-tax contributions.
Effective July 1, 1996, investments in the newly formed BRSP will be valued
on a daily basis. Prior to that date investments were valued on a monthly
basis. In connection with daily valuation, investments in mutual funds will no
longer be required to be made through the Window. Beginning July 1, 1996,
participants will be allowed to make direct contributions into the offered
mutual funds which will be considered core funds.
Effective July 1, 1996, participants will have a new investment option to
which they can direct their contributions. The Fidelity Growth and Income Fund
is an active, large capitalization growth and income stock mutual fund. The
fund's investment objective is to seek high total return through a combination
of current income and capital appreciation. The fund expects to invest the
majority of its assets in domestic and foreign equity securities.
The annual administrative fee per participant will be $2.20 per month for
the first six months of 1996 and $2.26 for the last six months of 1996
totaling $26.76 for the calendar year 1996. This represents an increase of
$4.76 over the 1995 annual fee of $22. This fee will pay for up to four fund
transfers, four changes in how participant contributions are invested and four
changes in the percent contributed from each paycheck. More than four changes
in any of the above categories 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 VRS.
From January 1, 1996 through June 30, 1996, if a participant has one or more
investments in the Window there is a $1.50 per month maintenance charge and a
$2.00 fee per transaction within the Window. Beginning July 1, 1996, there
will no longer be a fee associated with mutual fund investments, although, a
$2 charge will be applied for changes that exceed four, as discussed above.
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
The financial statements of the Plan have been prepared in accordance with
generally accepted accounting principles. Such financial statements include
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities and the amounts
of revenues and expenses. Actual results could differ from those estimates.
Certain amounts in prior period financial statements have been reclassified to
conform to the current year's presentation.
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.
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)--
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, 1995 and December 31, 1994, 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, 1995 and 1994 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, Bond Fund, Indexed Stock Fund, Interest Income
Fund and 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, 1995 and December 31, 1994
were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
------------------------------ ------------------------------
TYPE OF INVESTMENT NUMBER OF UNITS VALUE PER UNIT NUMBER OF UNITS VALUE PER UNIT
- ------------------ --------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
BellSouth Stock Fund.... 83,847,428 $1.6271 83,809,730 $ .9799
Bond Fund............... 12,687,483 1.1512 13,181,347 1.0024
Indexed Stock Fund...... 59,597,856 1.3904 54,080,046 1.0124
Interest Income Fund.... 63,135,202 1.1423 60,231,228 1.0694
Balanced Fund........... 3,424,459 1.2551 1,659,372 .9702
</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 number and value of units by month for each fund during 1995 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
1995 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............. 80,698,141 1.078408 12,949,536 1.019665 53,851,650 1.038989 63,632,311 1.075578 1,577,300 0.992864
February............ 81,321,704 1.072154 12,954,506 1.038670 54,213,168 1.079856 64,258,703 1.081083 1,599,231 1.023949
March............... 81,005,213 1.083396 12,796,271 1.044917 55,095,297 1.111654 65,608,068 1.087167 1,794,842 1.045981
April............... 80,087,345 1.125450 12,856,932 1.056714 55,292,607 1.144244 67,439,747 1.093103 1,868,189 1.072089
May................. 80,443,402 1.125799 12,743,688 1.088812 55,660,102 1.189697 67,619,310 1.099243 2,049,763 1.110182
June................ 79,937,143 1.169254 12,962,587 1.096482 56,776,423 1.216581 68,435,198 1.105314 2,113,736 1.128489
July................ 79,135,594 1.260906 12,867,439 1.096421 57,630,973 1.256071 69,050,277 1.111459 2,312,551 1.155206
August.............. 79,681,808 1.279478 12,843,143 1.106190 57,770,318 1.259916 68,997,312 1.117538 2,434,554 1.162737
September........... 81,366,022 1.360702 12,781,508 1.114523 58,269,232 1.310526 66,650,671 1.123514 2,777,053 1.192495
October............. 82,224,730 1.434636 12,701,914 1.127017 58,311,330 1.306407 65,362,304 1.129887 2,904,692 1.197048
November............ 82,945,715 1.456638 12,699,982 1.139079 58,633,149 1.364372 64,414,703 1.135932 2,961,692 1.235949
December............ 83,847,428 1.627080 12,687,483 1.151248 59,597,856 1.390365 63,135,202 1.142298 3,424,459 1.255084
</TABLE>
The net asset values by month for 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
1995 100 FUND VALUE II FUND VALUE II FUND VALUE II FUND INVESTORS FUND
---- -------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
January...... $15.25 $ 9.14 $ 9.77 $ 9.83 $18.41
February..... $15.58 $ 9.12 $10.31 $10.17 $19.04
March........ $15.94 $ 9.65 $10.46 $10.29 $19.86
April........ $16.20 $ 9.95 $10.83 $10.65 $20.61
May.......... $16.39 $ 9.89 $11.38 $10.94 $21.26
June......... $17.23 $ 9.78 $11.62 $11.37 $22.26
July......... $18.08 $10.33 $12.12 $11.98 $23.39
August....... $18.43 $ 9.97 $12.47 $12.36 $23.84
September.... $18.89 $10.03 $12.89 $12.50 $24.61
October...... $18.28 $ 9.83 $12.36 $11.89 $23.88
November..... $18.70 $ 9.95 $12.72 $12.13 $23.64
December..... $18.10 $10.42 $12.77 $12.29 $19.39
</TABLE>
11
<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)--
At December 31, 1995, 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............................... 1,213
Entirely in Indexed Stock Fund................................. 682
Entirely in Interest Income Fund............................... 537
Equally in BellSouth Stock Fund and Bond Fund.................. 118
Equally in BellSouth Stock Fund and Indexed Stock Fund......... 541
Equally in BellSouth Stock Fund and Interest Income Fund....... 361
Equally in Bond Fund and Indexed Stock Fund.................... 113
Equally in Indexed Stock Fund and Interest Income Fund......... 283
Equally in BellSouth Stock Fund, Indexed Stock Fund and
Interest Income Fund.......................................... 118
Various Fund combinations*..................................... 2,351
-----
Total Participants........................................... 6,317
=====
</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.
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
compensation may be authorized by participants electing the maximum 6% before-
tax basic contribution. No more than 15% could be contributed on an after-tax
basis. Total before-tax and after-tax contributions may not exceed 15% of
compensation. Effective January 1, 1996, participants may contribute up to 15%
of the eligible compensation to the plan on a before-tax basis.
The employing company makes contributions in respect of the first 6% of each
participant's before-tax contribution. For the year ending December 31, 1995,
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%
12
<PAGE>
BELLSOUTH ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED)
5. CONTRIBUTIONS (CONTINUED)--
of the next 4% of participants' compensation contributed for employees of
Mobile Communications Corporation of America, BellSouth Network Solutions,
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, BellSouth Mobile Data, Inc., BellSouth
International, Inc., BellSouth Information Systems, Inc., American Cellular
Communications Corporation, BellSouth Wireless, Inc., BellSouth Cellular
National Marketing, Inc. and BellSouth Personal Communications, Inc. accrued
their 1995 employing company contributions based on 70% of the next 4% of
participants' compensation contributed for the calendar year ending December
31, 1995.
BellSouth Advertising and Publishing Corporation accrued its 1995 employing
company contributions based on 70% and 38% of the next 4% of participants'
compensation contributed for January 1 through March 31 and April 1 through
December 31, respectively.
Through 1995, 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. Beginning in 1996,
the Company match will be made in BellSouth stock but this stock will be
invested in a LESOP as required under the provisions of the BRSP.
Profit sharing contributions in the amount of $2,083.0, $141.1 and $903.0
were made by employing companies to eligible participants for the years ended
December 31, 1995, 1994 and 1993, respectively.
Currently, company contributions to the Plan 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 April 1, 1996, company matching contributions will immediately vest
in accordance with the provisions of the BRSP. Existing Plan company matching
accounts of employees on April 1 will also become fully vested on such date.
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. Effective April 1, 1996, the Plan will be
merged with the BellSouth Management Savings and Employee Stock Ownership Plan
to create the BRSP. Therefore, all contributions to the former plans will be
included in the BRSP.
6. TERMINATION PRIORITIES
BellSouth intends to continue the Plan indefinitely but reserves the right
to terminate or amend it. As previously disclosed, the Plan will be merged
with the BellSouth Management Savings and Employee Stock Ownership Plan into a
single plan called the BellSouth Retirement Savings Plan. This merger does not
constitute a termination of the Plan. 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.
13
<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
1995 Statement of Changes in Net Assets were $33.3, $18.6, $33.4 and $3.1 for
the Bond Fund, Indexed Stock Fund, Interest Income Fund and Balanced Fund,
respectively.
8. MUTUAL FUND WINDOW
The Mutual Fund Window's net assets available for plan benefits are
comprised of the following funds at December 31, 1995:
<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............. $3,891 $2,316 $589 $2,214 $1,400 $10,410
Allotments and
contributions
receivable............. -- -- -- -- -- --
Fund, BellSouth Savings
and Security Plan,
BellSouth Management
Savings and Employee
Stock Ownership Plan
and other transfers
receivable--net........ 100 136 11 101 38 386
------ ------ ---- ------ ------ -------
Total Assets........ 3,991 2,452 600 2,315 1,438 10,796
------ ------ ---- ------ ------ -------
LIABILITIES
Distributions payable... 9 6 -- 5 -- 20
Fund, BellSouth Savings
and Security Plan,
BellSouth Management
Savings and Employee
Stock Ownership Plan
and other transfers
payable--net........... -- -- -- -- -- --
------ ------ ---- ------ ------ -------
Total liabilities....... 9 6 -- 5 -- 20
------ ------ ---- ------ ------ -------
Net Assets Available for
Plan Benefits.......... $3,982 $2,446 $600 $2,310 $1,438 $10,776
====== ====== ==== ====== ====== =======
</TABLE>
14
<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 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>
15
<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, 1995:
<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, 1994............... $1,827 $1,366 $153 $1,202 $ 509 $ 5,057
------ ------ ---- ------ ------ -------
Employee Contributions.. -- -- -- -- -- --
Employing company
contributions.......... -- -- -- -- -- --
Transfer of participant
balances--net.......... 1,691 898 378 757 806 4,530
------ ------ ---- ------ ------ -------
Total Allotments,
Contributions,
Allocations and
Transfers.............. 1,691 898 378 757 806 4,530
Allocated share of Trust
investment activities.. 464 185 69 351 123 1,192
------ ------ ---- ------ ------ -------
Total Additions......... 2,155 1,083 447 1,108 929 5,722
Less: Distributions to
Participants........ -- 3 -- -- -- 3
------ ------ ---- ------ ------ -------
Net Assets Available for
Plan Benefits, December
31, 1995............... $3,982 $2,446 $600 $2,310 $1,438 $10,776
====== ====== ==== ====== ====== =======
</TABLE>
16
<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>
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
The assets of the Plan are held in 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. 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, 1995 and 1994 was 7.5864% and 7.0580%,
respectively. The Plan's allocated share of the net assets of each fund in the
Master Savings Trust at December 31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
BellSouth Stock Fund..................................... 5.90182% 5.22193%
Bond Fund................................................ 10.68205% 9.67320%
Indexed Stock Fund....................................... 13.72187% 13.05298%
Interest Income Fund..................................... 6.524915% 6.35060%
Loan Fund................................................ 12.57449% 12.19202%
Balanced Fund............................................ 8.54808% 5.82940%
Mutual Fund Window....................................... 11.82830% 11.93964%
</TABLE>
18
<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, 1995 and
1994 was as follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Assets: Investment at value:
BellSouth Stock Fund:
BellSouth common shares................................ $2,216,148 $1,396,036
Temporary cash investments............................. 33,313 44,436
Bond Fund:
Securities............................................. 139,775 136,669
Temporary cash investments............................. 2,302 2,282
Indexed Stock Fund:
Equity Index Fund...................................... 630,335 426,228
Temporary cash investments............................. 3,035 13,684
Interest Income Fund:
Contracts.............................................. 1,182,614 1,047,899
Temporary cash investments............................. 14,514 37,529
Loan Fund:
Loans to participants.................................. 59,432 47,581
Temporary cash investments............................. 39 37
Balanced Fund:
Securities............................................. 36,043 20,094
Temporary cash investments............................. 28,185 15,760
Mutual Fund Window:
Berger 100 Fund........................................ 34,304 18,745
DFA International Value II Fund........................ 16,020 8,225
DFA U.S. Large Cap Value II Fund....................... 7,801 1,419
DFA U.S. Small Cap Value II Fund....................... 15,151 6,490
20th Century Growth Investors Fund..................... 12,920 4,839
Temporary cash investments............................. 1,800 227
Distributable shares.................................... 3,004 3,916
Dividends and interest income receivable................ 2,516 3,716
Receivable for investments sold......................... 4,752 42,196
Loan repayment receivable............................... -- 487
Variation margin receivable............................. 33 41
---------- ----------
$4,444,036 $3,278,536
Liabilities:
Payable for investments purchased...................... 4,741 52,824
Variation margin payable............................... -- 20
Administrative fees payable............................ 648 1,362
---------- ----------
Allocated share of trust net assets (excluding ESOP
Trusts)................................................. 4,438,647 3,224,330
Investment in ESOP Trusts:
BellSouth shares of common stock allocated to partici-
pants.................................................. 773,185 415,616
Distributable shares.................................... 845 732
BellSouth common shares held for future allocation...... 871,871 597,525
Temporary cash investments.............................. 65,498 37,074
---------- ----------
Total investments........................................ 6,150,046 4,275,277
Liabilities:
Payable for investments purchased....................... 19,031 --
Notes payable........................................... 647,311 693,900
---------- ----------
Trust net assets...................................... $5,483,704 $3,581,377
========== ==========
Investments at cost...................................... $4,091,362 $3,809,323
========== ==========
</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.
19
<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.
The contracts held by the Trust in the Interest Income Fund are considered
fully benefit-responsive in accordance with AICPA Statement of Position 94-4.
A fully benefit-responsive investment contract provides a liquidity guarantee
by a financially responsible third party of principal and previously accrued
interest for liquidations, transfers, loans or hardship withdrawals initiated
by plan participants exercising their rights to withdraw, borrow or transfer
funds under the terms of the ongoing plan. The fair value of these investment
contracts as of December 31, 1995 was $1,202,906.
The crediting interest rate at December 31, 1995 and 1994, was 6.75% and
6.92%, respectively. The average yield as of December 31, 1995 and 1994, was
6.82% and 6.95%, respectively. Interest rates are reset on a quarterly,
monthly or semi-annual basis, whereby, such rates are reset to move the
current book value of these investments toward the projected future market
value over the life of the contract.
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,
1995, BellSouth made cash contributions to the ESOP Trusts in the amount of
$46,589 for the purpose of servicing the guaranteed debt and cash
contributions in the amount of $11,979 to purchase additional shares to meet
the match obligations and expects to make similar contributions during the
life of the Plan.
20
<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)--
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,
1995 are as follows:
<TABLE>
<CAPTION>
1996 1997 1998 1999 2000 THEREAFTER TOTAL
------- ------- ------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Maturities......... $52,977 $59,898 $67,418 $75,589 $84,470 $306,959 $647,311
======= ======= ======= ======= ======= ======== ========
</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, 1995.
The Master Savings Trust investment activities for the fiscal year ended
December 31, 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- --------
<S> <C> <C> <C>
Investment Activities:
Dividends on BellSouth Corporation common
shares...................................... $ 123,588 $ 119,486 $118,094
Interest Income Fund income.................. 77,893 69,048 65,950
Other interest............................... 18,523 12,748 11,917
Net change in unrealized
appreciation/(depreciation) on investments.. 1,581,522 (185,677) 292,122
Net realized gain on investments............. 62,815 14,693 31,658
Investment Manager Fees...................... (1,017) (980) (973)
---------- --------- --------
Net investment activities..................... $1,863,324 $ 29,318 $518,768
========== ========= ========
</TABLE>
21
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------------------
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*--98.5%........ 51,015 $1,074,057 $2,219,152
---------- ----------
TEMPORARY CASH INVESTMENTS--1.5%................ 18,374 33,127 33,313
---------- ----------
Total BellSouth Stock Fund--100%.............. $1,107,184 $2,252,465
---------- ----------
BOND FUND
U.S. GOVERNMENT TREASURY NOTES--41.0%
U.S. Treasury Notes, 7.625%, 05/31/96.......... $ 3,500 $ 3,809 $ 3,532
U.S. Treasury Notes, 7.875%, 06/30/96.......... $ 2,000 2,012 2,025
U.S. Treasury Notes, 7.250%, 08/31/96.......... $ 6,750 6,835 6,832
U.S. Treasury Notes, 6.750%, 05/31/97.......... $ 2,500 2,545 2,552
U.S. Treasury Notes, 7.375%, 11/15/97.......... $ 9,525 9,861 9,885
U.S. Treasury Notes, 7.250%, 11/30/96.......... $ 13,750 14,061 13,984
U.S. Treasury Notes, 7.500%, 12/31/96.......... $ 6,450 6,592 6,591
U.S. Treasury Notes, 8.875%, 11/15/97.......... $ 2,500 2,654 2,661
U.S. Treasury Notes, 8.875%, 11/15/98.......... $ 2,200 2,397 2,409
U.S. Treasury Notes, 8.000%, 10/15/96.......... $ 2,700 2,796 2,756
U.S. Treasury Notes, 8.000%, 01/15/97.......... $ 725 743 745
U.S. Treasury Notes, 8.500%, 04/15/97.......... $ 4,050 4,215 4,213
---------- ----------
$ 58,520 $ 58,185
---------- ----------
U.S. GOVERNMENT TREASURY BONDS--28.7%
U.S. Treasury Bonds, 11.625%, 11/15/04......... $ 5,400 $ 7,188 $ 7,641
U.S. Treasury Bonds, 9.375%, 02/15/06.......... $ 11,000 12,334 14,137
U.S. Treasury Bonds, 7.250%, 05/15/16.......... $ 11,450 10,893 13,074
U.S. Treasury Bonds, 7.500%, 11/15/06.......... $ 1,000 1,053 1,173
U.S. Treasury Bonds, 8.125%, 08/15/19.......... $ 3,750 4,223 4,715
---------- ----------
$ 35,691 $ 40,740
---------- ----------
FEDERAL AGENCY OBLIGATIONS--2.0%
Federal Natl. Mtg. Assn., 6.06%, 10/02/97...... $ 1,450 $ 1,452 $ 1,457
Federal Home Ln, Bks., 5.860%, 10/24/96........ $ 1,425 1,424 1,423
---------- ----------
$ 2,876 $ 2,880
---------- ----------
DOMESTIC CORPORATE OBLIGATIONS--26.7%
Cleveland Elec. Illum. Co.
9.100%, 07/22/96.............................. $ 400 $ 430 $ 404
Cleveland Elec. Illum. Co.
9.450%, 12/01/97.............................. $ 1,000 1,091 1,037
Cleveland Elec. Illum. Co.
8.700%, 06/03/96.............................. $ 4,600 4,798 4,625
</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, 1995
--------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- ---------- ---------- ----------
BOND-FUND--(CONTINUED)
DOMESTIC CORPORATE OBLIGATIONS--26.7%--(CONTINUED)
<S> <C> <C> <C>
Commonwealth Edison Co.
9.010%, 08/01/96........................................... $ 1,000 $ 1,056 $ 1,014
Commonwealth Edison Co.
8.920%, 08/15/96........................................... $ 1,000 1,005 1,015
Houston Inds. Inc.
7.250%, 12/01/96........................................... $ 1,500 1,500 1,519
Illinois Pwr. Co.
9.250%, 12/16/96........................................... $ 2,000 2,085 2,063
Pacificorp Secd.
8.690%, 07/16/96........................................... $ 2,000 2,000 2,030
Pennsylvania Elec. Co. Secd.
7.450%, 10/28/96........................................... $ 1,000 1,000 1,015
Virginia Elec. & Pwr. Co.
8.200%, 08/15/96........................................... $ 1,000 1,037 1,015
AMR Corp Del.-
7.470%, 01/28/97........................................... $ 1,000 1,014 1,013
Commonwealth Edison Co.
9.050%, 08/01/96........................................... $ 1,000 1,080 1,014
Long Island Ltg. Co.
8.750%, 05/01/96........................................... $ 3,450 3,521 3,492
Salomon Inc.
7.300%, 06/11/96........................................... $ 2,600 2,604 2,613
USX-Marathon Group Inc.
8.875%, 09/15/97........................................... $ 1,000 998 1,048
Cigna Corp.
8.000%, 09/01/96........................................... $ 1,000 1,001 1,013
Chrysler Finl. Corp.
6.000%, 04/15/96........................................... $ 2,000 2,058 2,001
Chrysler Finl. Corp.
8.125%, 12/15/96........................................... $ 1,000 1,024 1,023
Ford Motor Credit Co.
8.625%, 04/15/96........................................... $ 2,500 2,744 2,519
General Mtr. Accep. Corp.
7.250%, 02/15/96........................................... $ 2,500 2,623 2,504
General Mtr. Accep. Corp.
6.300%, 02/02/96........................................... $ 700 720 700
General Mtr. Accep. Corp.
8.250%, 08/01/96........................................... $ 3,250 3,245 3,293
---------- ----------
$ 38,634 $ 37,970
---------- ----------
TEMPORARY CASH INVESTMENTS--1.6%............................. $ 1,270 $ 2,299 $ 2,302
---------- ----------
Total Bond Fund--100.0%.................................... $ 138,020 $ 142,077
---------- ----------
</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, 1995
--------------------------------
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--0.5%.................................. 1,674 $ 3,033 $ 3,034
---------- ----------
BANKERS TRUST PYRAMID EQUITY INDEX FUND*--
99.5%...................................................................... 456 $ 362,410 $ 630,335
---------- ----------
Total Indexed Stock Fund--100.0%........................................ $ 365,443 $ 633,369
---------- ----------
INTEREST INCOME FUND
ANNUITY CONTRACTS WITH INSURANCE COMPANIES--
98.8%+
Aetna Life Insurance Company
(7.49%-9.81%)............................................................. $ 83,772 $ 83,773 $ 83,773
Allstate Life Insurance Company
(5.74%)................................................................... $ 11,481 11,481 11,481
BT Basic
(6.21%)................................................................... $ 104,834 104,834 104,834
CDC Investment Management Corp.
(4.906%-7.61%)............................................................ $ 79,835 79,835 79,835
Commonwealth Life Insurance Co.
(9.37%)................................................................... $ 1,146 1,146 1,146
Hartford Life
(8.70%)................................................................... $ 14,863 14,863 14,863
John Hancock Mutual Life
(7.13%-7.71%)............................................................. $ 122,980 122,980 122,980
Massachusetts Mutual
(9.70%)................................................................... $ 59,596 59,596 59,596
Metropolitan Life Insurance Co.
(5.79%-8.75%)............................................................. $ 109,884 109,884 109,884
Mutual Benefit Life Insurance Co.
(3.50%-5.10%)............................................................. $ 3,334 3,334 3,334
New York Life Insurance Co.
(5.39%-8.45%)............................................................. $ 65,351 65,351 65,351
Pacific Mutual Life
(9.39%)................................................................... $ 32,847 32,847 32,847
Peoples Security Life Insurance Co.
(5.03%-8.57%)............................................................. $ 118,848 118,848 118,848
Provident National
(5.13%-8.53%)............................................................. $ 137,453 137,453 137,453
Prudential Insurance Company of America
(8.10%-9.35%)............................................................. $ 25,017 25,017 25,017
Rabobank Nederland
(6.17%-7.62%)............................................................. $ 61,103 61,103 61,103
State Mutual Life
(8.86%)................................................................... $ 10,645 10,645 10,645
</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, 1995
-------------------------------
NUMBER OF
SHARES OR
PRINCIPAL CARRYING
NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE
--------------------------------- --------- ---------- ----------
INTEREST INCOME FUND--(CONTINUED)
<S> <C> <C> <C>
Sun Life Association, Canada
(5.78%-5.79%)............................................................... $22,714 $ 22,714 $ 22,714
TransAmerican Life & Annuity
(7.54%)..................................................................... $62,314 62,314 62,314
Union Bank of Switzerland
(7.28%-8.29%)............................................................... $54,596 54,596 54,596
---------- ----------
$1,182,614 $1,182,614
---------- ----------
TEMPORARY CASH INVESTMENTS--1.2%.............................................. $14,514 $ 14,514 $ 14,514
---------- ----------
Total Interest Income Fund--100%............................................ $1,197,128 $1,197,128
---------- ----------
LOAN FUND
LOANS TO PARTICIPANTS--99.9%.................................................. $59,432 $ 59,432 $ 59,432
---------- ----------
TEMPORARY CASH INVESTMENTS--0.1%.............................................. $ 39 $ 39 $ 39
---------- ----------
Total Loan Fund--100.0%..................................................... $ 59,471 $ 59,471
---------- ----------
BALANCED FUND
TEMPORARY CASH INVESTMENTS--43.9%............................................. $15,546 $ 27,636 $ 28,186
---------- ----------
U.S. TREASURY BILL, EXP. 01/11/96--0.8%....................................... $ 560 $ 532 $ 532
---------- ----------
CORPORATE OBLIGATIONS--18.7%.................................................. $ 6,771 $ 10,360 $ 11,978
---------- ----------
BT EQUITY INDEX FUND--36.6%................................................... $ 17 $ 17,193 $ 23,532
---------- ----------
Total Balanced Fund--100.0%................................................. $ 55,721 $ 64,228
---------- ----------
EMPLOYEE STOCK OWNERSHIP PLAN
SHARES OF BELLSOUTH COMMON STOCK*--96.2%...................................... 37,837 $1,021,227 $1,645,900
---------- ----------
TEMPORARY CASH INVESTMENTS--3.8%.............................................. 36,125 $ 63,559 $ 65,498
---------- ----------
Total Employee Stock Ownership Fund--100.0%................................. $1,084,786 $1,711,398
---------- ----------
MUTUAL FUND WINDOW
MUTUAL FUNDS--98.0%
Berger 100 Fund.............................................................. 1,895 $ 31,458 $ 34,304
DFA International Value II Fund.............................................. 1,537 $ 15,240 $ 16,020
DFA U.S. Large Cap Value II Fund............................................. 611 $ 7,197 $ 7,801
DFA U.S. Small Cap Value II Fund............................................. 1,233 $ 13,402 $ 15,151
20th Century Growth Investors Fund........................................... 666 $ 14,513 $ 12,920
---------- ----------
Total Equity Mutual Funds................................................... $ 81,810 $ 86,196
---------- ----------
</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, 1995
-------------------------------
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--2.0%
BT Pyramid Cash Plus Fund.................................................. 79 $ 142 $ 143
Cash in Transit............................................................ 1,455 $ 1,455 $ 1,455
Schwab Retirement Money Fund............................................... 202 $ 202 $ 202
---------- ----------
$ 1,799 $ 1,800
---------- ----------
Total Mutual Fund Window--100.0%......................................... $ 83,609 $ 87,996
---------- ----------
TOTAL INVESTMENTS......................................................... $4,091,362 $6,148,132
========== ==========
</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 6.82%
for the year 1995. 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
