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9
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: April 18, 1996
BELLSOUTH CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 1-8607 58-1533433
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
1155 Peachtree Street, N. E., Atlanta, Georgia 30309-3610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code(404) 249-2000
Item 5. Other Events
With marketing programs driving a 4.8% increase in access lines, and
growth in cellular continuing worldwide, BellSouth Corporation
reported earnings per share (EPS) of 98 cents in the first quarter
of 1996.
Net income, including a $344 million gain ($.35 per share) on the
previously-announced sale of its paging business, was $970 million.
Excluding the paging sale, net income increased 14.4 percent
compared with the same three months a year ago, and EPS went up 14.5
percent. (Per share results reflect a 2-for-1 stock split effective
in fourth quarter 1995.)
Other highlights of BellSouth's first quarter:
o The company added more than 100,000 access lines per month.
The first quarter increase of 359,000 was more than the year-old
record of 295,000 set in the same quarter of 1995;
o Business access lines increased at an annual rate of 7.9
percent;
o Consumer promotions drove an increase of 82,000 additional
residential lines, which were up 22.9 percent from the same quarter
a year ago;
o BellSouth's domestic cellular customers topped 3 million;
o International cellular customers grew more than 100 percent;
o BellSouth further increased market penetration of its
vertical services. MemoryCallr service voice mailboxes increased at
an annual rate of 23 percent. Caller ID features jumped 106
percent. Total vertical services revenue increased 21 percent to
more than $220 million.
BellSouth's total revenues of $4.5 billion in the three months ended
March 31, 1996 increased 5.6 percent compared with the first quarter
of 1995. Total operating expenses increased 4.8 percent, while cash
operating expenses in BellSouth's telephone operations were up 2.2
percent. When last year's paging results are excluded, quarterly
revenues were up 7.7 percent, and total cash operating expenses
increased 6.4 percent.
BellSouth markets additional lines to customers who want convenient
access to the Internet, telecommuting options, home office phones,
in-home fax machines and children's numbers. Overall, BellSouth's
total access lines grew at an annual rate of 4.8 percent, compared
with 4.6 percent in the first quarter of 1995.
Domestic mobile phone customers totaled 3,046,000 at March 31, up 31
percent from a year earlier. International customers reached
855,000, more than doubling in the past year.
Based on BellSouth's first quarter earnings, which show strength
across all facets of its business, BellSouth now believes that
normalized earnings growth could be in the low double digits for
1996. The ability of BellSouth to achieve the results forecast in
such forward-looking statement is conditional on the materialization
of a number of assumptions, including, without limitation: (1)
strong economic growth and demand for wireline and wireless
communications services continues in BellSouth's service
territories; (2) BellSouth Telecommunications, Inc. is successful in
furthering its cost reduction efforts; (3) any slowdown in the
economy in the Atlanta metropolitan area following the Summer
Olympics is brief, with recovery and growth resuming in the fourth
quarter of 1996; and (4) substantial local service competition in
BellSouth's service territories does not emerge during the remainder
of 1996.
PRELIMINARY
April 18, 1996
BELLSOUTH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, Except Per Share Amounts)
(Unaudited)
For the Three
Months Ended
March 31,
1996 1995
Operating Revenues:
Network and related
services
Local service $ 1,930 $ 1,769
Interstate access 909 795
Intrastate access 218 226
Toll 207 281
Wireless communications 625 600
Directory advertising
and publishing 318 353
Other services 334 275
Total Operating Revenues 4,541 4,299
Operating Expenses:
Cost of services and
products 1,468 1,503
Depreciation and
amortization 903 835
Selling, general and
administrative 987 866
Total Operating Expenses 3,358 3,204
Operating Income 1,183 1,095
Interest Expense 180 174
Gain on Sale of Paging
Business 442 --
Other Income (Expense),
net 36 (11)
Income Before Income
Taxes 1,481 910
Provision for Income
Taxes 511 363
Net Income $ 970 $ 547
Weighted Average Common
Shares Outstanding 994 993
Dividends Declared Per
Common Share $ .36 $ .345
Earnings Per Share $ .98 $ .55
PRELIMINARY
April 18, 1996
BELLSOUTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Per Share Amounts)
March 31, December 31,
1996 1995
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 988 $ 1,711
Temporary cash investments 57 71
Accounts receivable, net of
allowance for uncollectibles
of $161 and $171 3,629 3,772
Material and supplies 450 430
Other current assets 472 521
5,596 6,505
Investments and Advances 2,529 2,418
Property, Plant and Equipment:
Property, Plant and Equipment 47,389 46,869
Accumulated Depreciation 26,359 25,777
21,030 21,092
Intangible Assets, net 1,304 1,527
Deferred Charges and Other
Assets 410 338
Total Assets $ 30,869 $ 31,880
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Debt maturing within one year $ 1,588 $ 2,951
Accounts payable 1,239 1,724
Other current liabilities 2,909 2,715
5,736 7,390
Long-Term Debt 7,904 7,924
Deferred Credits and Other
Liabilities:
Accumulated deferred income
taxes 1,698 1,650
Unamortized investment tax
credits 336 355
Other liabilities and
deferred credits 2,699 2,736
4,733 4,741
Shareholders' Equity:
Common stock, $1 par value 1,008 1,007
Paid-in capital 7,646 7,619
Retained earnings 4,713 4,099
Shares held in trust (374) (374)
Guarantee of ESOP debt (497) (526)
12,496 11,825
Total Liabilities and
Shareholders' Equity $ 30,869 $ 31,880
PRELIMINARY
April 18, 1996
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, March 31,
1996 1995
Weighted average common shares
outstanding (millions) 994 993
Earnings per share $ .98(a) $ .55
Dividends per share $ .36 $ .345
Return to average common
equity (annualized) 31.6% 15.1%
Return to average total
capital(annualized) 19.4% 11.4%
Property additions (millions) $ 902 $ 858
At March 31,
1996 1995
Common shares outstanding
(millions) 994 993
Debt ratio 43.0% 38.6%
Total employees 85,905 91,660
(a) Includes after-tax gain of $.35 per share from sale of
paging business.
PRELIMINARY
April 18, 1996
BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Millions)
(Unaudited)
For the Three
Months Ended
March 31,
1996 1995
Operating Revenues:
Network and related
services
Local service $ 1,930 $ 1,769
Interstate access 909 795
Intrastate access 218 226
Toll 207 281
Other 391 490
Total Operating Revenues 3,655 3,561
Operating Expenses:
Cost of services and
products 1,260 1,288
Depreciation and
amortization 798 746
Selling, general and
administrative 604 536
Total Operating Expenses 2,662 2,570
Operating Income 993 991
Interest Expense 139 140
Other Income, net 11 5
Income Before Income
Taxes 865 856
Provision for Income
Taxes 326 323
Net Income $ 539 $ 533
PRELIMINARY
April 18, 1996
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, March 31,
1996 1995
Property additions (millions) $ 738 $ 694
Access minutes of use
(millions):
Interstate 16,660 15,131
Intrastate 5,118 4,529
IntraLATA toll messages 281 370
(millions)
At March 31,
1996 1995
Debt ratio 49.5% 40.2%
Telephone employees 68,425 73,564
Network access lines in
service (thousands) 21,492 20,515
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BELLSOUTH CORPORATION
By: /s/RONALD M. DYKES
Ronald M. Dykes
Executive Vice President, Chief Financial Officer
and Comptroller
April 26, 1996
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