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 (Date of earliest event reported):
October 20, 1998
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
Third Quarter 1998 Earnings
On October 20, 1998, BellSouth announced earnings for the third quarter
of 1998. See Exhibit 99 for a complete copy of the related press
release.
1998-1999 Earnings Growth
BellSouth believes that normalized earnings growth will be in the
mid-teens through 1998 and from 12 percent to 14 percent for 1999.
Statements that do not address historical performance are "forward-
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and are based on a number of assumptions,
including but not limited to: (1) continued economic growth and demand for
BellSouth's services; (2) continued monetary, regulatory and political
stability where BellSouth conducts its international operations;
(3) the reasonable accuracy of BellSouth's expectations of costs and
recoveries with respect to access reform, universal service and
interconnection; (4) the reasonable accuracy of BellSouth's estimate
of regulatory authorization to provide wireline long distance services
and the impact of competition in its markets; and (5) satisfactory
identification and completion of Year 2000 software and hardware revisions
by BellSouth and entities with which it does business. Any developments
significantly deviating from these assumptions could cause actual
results to differ materially from those forecast or implied in the
aforementioned forward-looking statements.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No.
99 Press Release - Third Quarter 1998 Earnings
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/ W. Patrick Shannon
W. Patrick Shannon
Vice President and Controller
October 20, 1998
Earnings Release
October 20, 1998
FOR MORE INFORMATION FOR IMMEDIATE RELEASE
Tim Klein (404-249-4135) October 20, 1998
Al Schweitzer (404-249-2832)
BellSouth Reports 15.5% Increase in Third Quarter EPS
Wireless customers worldwide increase more than 2 million;
Data and digital services revenues leap 36% to $463 million
ATLANTA - BellSouth Corporation (NYSE: BLS) reported a
15.5 percent increase in third quarter normalized diluted
earnings per share (EPS), as growth continued in data and
digital services, additional lines, calling features and
wireless operations in the U.S. and worldwide.
EPS in the three months ended September 30, 1998 was 82
cents, compared to 71 cents in the third quarter of 1997
(excluding one-time gains totaling 48 cents.) Record
quarterly revenues were $5.9 billion, including certain
domestic and international wireless operations that were
consolidated in 1998.
"The third quarter proved once again that BellSouth's growth
has momentum," said Duane Ackerman, chairman and chief
executive officer. "We're giving our customers the fast,
reliable services they need in today's Internet and data
world. In wireline and wireless, we're giving them advanced
features and great packages of services. Our customer focus
gives us a solid foundation for continued earnings growth in
the future."
BellSouth markets an array of innovative, customized digital
and data services to business customers, who increasingly
are deploying powerful high-speed connection, networking and
Internet solutions. BellSouth's data and digital services
revenues increased to $463 million in the third quarter of
1998, a 36 percent increase compared to $340 million in the
same three months a year earlier.
BellSouth grew residential access lines at an annual rate of
4.2 percent, including a record third quarter increase of
94,000 additional lines. Customers are using additional
lines for Internet access such as BellSouth.net(SM) service,
children's phones, fax machines, telecommuting and work-at-
home tools. About one out of every seven BellSouth
residential lines is an additional line. In total, access
line equivalents, which include traditional switched lines
as well as data and digital services products, grew 13.4
percent.
Convenience features continued to boost BellSouth's
performance. Revenues from services such as Caller ID
Deluxe, Call Return and MemoryCall(r) service voice messaging
were $421 million in the third quarter of 1998, up nearly 20
percent from the same three months of 1997. Caller ID
Deluxe features grew 33 percent and now are used by nearly
5.6 million customers. Call Waiting Deluxe in service
nearly tripled, to more than 2.1 million.
BellSouth's international operations also made a major
contribution. The company's extensive wireless operations in
Latin America gained more momentum from Brazil. In less
than five months, BellSouth and its partners have added
524,000 customers.
In total, BellSouth's worldwide wireless customer base grew
more than 2 million compared to the third quarter of 1997.
Based on the company's ownership percentages, overseas
customers increased 1.4 million, or 86 percent, including a
minor impact from the purchase of larger ownership stakes in
several Latin American markets. In its domestic cellular
and PCS markets, BellSouth added 656,000 customers, for 16.2
percent annual growth. BellSouth now serves more than 7.7
million wireless customers worldwide.
Net income in the third quarter of 1998 was $814 million, an
increase of 15.5 percent compared to the same quarter a year
ago, when net income was $705 million before one-time gains.
One-time gains related to the sale of BellSouth's
investments in Optus Communications and ITT World
Directories and totaled $480 million after tax.
Reported revenues and expenses in 1998 include certain
domestic and international wireless operations that were not
consolidated in 1997. If these operations had been
consolidated last year, revenue growth in the third quarter
of 1998 would have been 9.8 percent, and expenses would have
increased 9.5 percent.
BellSouth is a $22 billion communications services company.
It provides telecommunications, wireless communications,
cable and digital TV, directory advertising and publishing,
and Internet and data services to nearly 33 million
customers in 20 countries worldwide.
NOTE: For more information about BellSouth Corporation,
visit the BellSouth Web page at: http://www.bellsouth.com.
BellSouth news releases dating back one year are available
by fax at no charge by calling 1-800-758-5804, Ext. 095650.
PRELIMINARY
October 20, 1998
BELLSOUTH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, Except Per Share Amounts)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1998 1997 1998 1997
Operating Revenues:
Network and related
services:
Local service $ 2,380 $ 2,143 $ 6,987 $ 6,315
Interstate access 944 916 2,849 2,761
Intrastate access 203 197 609 601
Toll 180 189 532 549
Wireless communications 1,234 929 3,523 2,509
Directory advertising
and publishing 505 466 1,286 1,227
Other services 419 353 1,169 999
Total Operating Revenues 5,865 5,193 16,955 14,961
Operating Expenses:
Cost of services and
products 1,845 1,566 5,255 4,524
Depreciation and
amortization 1,111 1,002 3,228 2,939
Selling, general and
administrative 1,446 1,279 4,121 3,575
Total Operating Expenses 4,402 3,847 12,604 11,038
Operating Income 1,463 1,346 4,351 3,923
Interest Expense 218 195 611 565
Gain on Sale of
Operations -- 787 155 787
Other Income, net 73 20 219 46
Income Before Income
Taxes 1,318 1,958 4,114 4,191
Provision for Income
Taxes 504 773 1,590 1,659
Net Income $ 814 $ 1,185 $ 2,524 $ 2,532
Weighted-Average Common
Shares Outstanding:
Basic 983 992 988 992
Diluted 989 995 994 994
Dividends Declared Per
Common Share $ .36 $ .36 $ 1.08 $ 1.08
Earnings Per Share:
Basic $ .83 $ 1.19 $ 2.55 $ 2.55
Diluted $ .82 $ 1.19 $ 2.54 $ 2.55
PRELIMINARY
October 20, 1998
BELLSOUTH CORPORATION
EARNINGS SUMMARY
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
1998 1997 1998 1997
Net Income
Reported Net Income $ 814 $1,185 $2,524 $2,532
Gain from Additional Proceeds on
Sale of ITT World Directories(a) -- -- (96) --
Gain on Sale of Optus
Communications(b) -- (352) -- (352)
Gain on Sale of ITT
World Directories(c) -- (128) -- (128)
South Carolina Regulatory
Settlement(d) -- -- -- 47
Adjusted Net Income $ 814 $ 705 $2,428 $2,099
Diluted Earnings Per Share
Reported Earnings Per Share $ .82 $ 1.19 $ 2.54 $ 2.55
Gain from Additional Proceeds on
Sale of ITT World Directories(a) -- -- (.10) --
Gain on Sale of Optus
Communications(b) -- (.35) -- (.35)
Gain on Sale of ITT World
Directories(c) -- (.13) -- (.13)
South Carolina Regulatory
Settlement(d) -- -- -- .05
Adjusted Earnings Per Share(e) $ .82 $ .71 $ 2.44 $ 2.11
(a) Represents the after-tax gain associated with
additional proceeds received in first quarter 1998 on the
July 1997 sale of ITT World Directories. The pretax gain
related to the proceeds was $155.
(b) Represents the after-tax gain on the sale of Optus
Communications. The pretax gain on the sale was $578.
(c) Represents the after-tax gain on the sale of ITT World
Directories. The pretax gain on the sale was $209.
(d) Represents the after-tax effect of a regulatory
settlement in South Carolina which occurred in second
quarter 1997.
(e) Earnings Per Share for the nine months ended September
30, 1997 does not sum due to rounding.
PRELIMINARY
October 20, 1998
BELLSOUTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Per Share Amounts)
September 30, December 31,
1998 1997
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 2,389 $ 2,570
Temporary cash investments 211 17
Accounts receivable, net of
allowance for uncollectibles
of $264 and $246 4,413 4,750
Material and supplies 430 393
Other current assets 775 387
Total Current Assets 8,218 8,117
Investments and Advances 2,531 2,675
Property, Plant and Equipment:
Property, plant and equipment 57,061 53,828
Accumulated depreciation 33,426 30,967
Property, plant and
equipment, net 23,635 22,861
Deferred Charges and Other
Assets 1,013 702
Intangible Assets, net 2,960 1,946
Total Assets $ 38,357 $ 36,301
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Debt maturing within one year $ 3,371 $ 3,706
Accounts payable 1,733 1,825
Other current liabilities 3,985 3,252
Total Current Liabilities 9,089 8,783
Long-Term Debt 8,532 7,348
Deferred Credits and Other
Liabilities:
Accumulated deferred income
taxes 1,855 2,023
Unamortized investment tax
credits 179 213
Other liabilities and
deferred credits 2,803 2,769
Total Deferred Credits and
Other Liabilities 4,837 5,005
Shareholders' Equity:
Common stock, $1 par value 1,010 1,010
Paid-in capital 7,777 7,714
Retained earnings 8,848 7,382
Accumulated other
comprehensive income (2) 36
Shares held in trust and
treasury (1,396) (575)
Guarantee of ESOP debt (338) (402)
Total Shareholders' Equity 15,899 15,165
Total Liabilities and
Shareholders' Equity $ 38,357 $ 36,301
PRELIMINARY
October 20, 1998
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
(Unaudited)
Three Months Three Months
Ended Ended
September 30, September 30,
1998 1997
Earnings per share:
Basic $ .83 $ 1.19 (a)
Diluted $ .82 $ 1.19 (a)
Return on average common
equity (annualized) 19.6% 32.3% (b)
Return on average total
capital(annualized) 13.9% 21.6% (c)
Weighted-average common shares
outstanding (millions)
Basic 983 992
Diluted 989 995
Dividends per share $ .36 $ .36
Property additions (millions) $ 1,218 $ 1,250
At September 30,
1998 1997
Common shares outstanding
(millions) 979 992
Debt ratio 42.7% 40.7%
Total employees 86,628 82,298
(a) Includes after-tax gains of $352 ($.35 per share) and
$128 ($.13 per share) from sale of Optus Communications and
ITT World Directories, respectively.
(b) After adjusting net income for the impact of the gains
on sales of Optus Communications and ITT World Directories,
Return on average common equity was 19.2%.
(c) After adjusting net income for the impact of the gains
on sales of Optus Communications and ITT World Directories,
Return on average total capital was 13.9%.
PRELIMINARY
October 20, 1998
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
(Unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
Earnings per share:
Basic $ 2.55 (a) $ 2.55 (d)
Diluted $ 2.54 (a) $ 2.55 (d)
Return on average common
equity (annualized) 20.9% (b) 24.0% (e)
Return on average total
capital(annualized) 14.4% (c) 16.5% (f)
Weighted-average common shares
outstanding (millions)
Basic 988 992
Diluted 994 994
Dividends per share $ 1.08 $ 1.08
Property additions (millions) $ 3,619 $ 3,265
(a) Includes an after-tax gain of $96 ($.10 per share)
related to additional proceeds from the sale of ITT World
Directories.
(b) After adjusting net income for the gain from additional
proceeds on ITT World Directories, Return on average common
equity was 20.1%.
(c) After adjusting net income for the gain from additional
proceeds on ITT World Directories, Return on average total
capital was 13.9%.
(d) Includes after-tax gains of $352 ($.35 per share) and
$128 ($.13 per share) from sales of Optus Communications and
ITT World Directories, respectively, and an after-tax charge
of $47 ($.05 per share) related to a regulatory settlement
in South Carolina.
(e) After adjusting net income for the gains on sales of
Optus Communications and ITT World Directories and the
impact of the South Carolina regulatory settlement, Return
on average common equity was 19.9%.
(f) After adjusting net income for the gains on sales of
Optus Communications and ITT World Directories and the
impact of the South Carolina regulatory settlement, Return
on average total capital was 14.1%.
PRELIMINARY
October 20, 1998
BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Millions)
(Unaudited)
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Operating Revenues:
Local service $ 2,380 $ 2,143 $ 6,987 $ 6,315
Interstate access 944 916 2,849 2,761
Intrastate access 203 197 609 601
Toll 180 189 532 549
Other 488 428 1,374 1,206
Total Operating Revenues 4,195 3,873 12,351 11,432
Operating Expenses:
Cost of services and
products 1,455 1,319 4,172 3,816
Depreciation and
amortization 847 837 2,509 2,482
Selling, general and
administrative 811 731 2,186 2,015
Total Operating Expenses 3,113 2,887 8,867 8,313
Operating Income 1,082 986 3,484 3,119
Interest Expense 132 133 409 401
Other Income
(Expense), net (2) 3 2 4
Income Before Income
Taxes 948 856 3,077 2,722
Provision for Income
Taxes 322 320 1,124 1,022
Net Income $ 626 $ 536 $ 1,953 $ 1,700
PRELIMINARY
October 20, 1998
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
(Unaudited)
Three Months Three Months
Ended Ended
September 30, September 30,
1998 1997
Property additions (millions) $ 855 $ 963
Access minutes of use
(millions):
Interstate 19,728 18,524
Intrastate 6,710 5,964
IntraLATA toll messages 199 224
(millions)
At September 30,
1998 1997
Debt ratio 47.3% 47.5%
Telephone employees 60,087 61,455
Network access lines in
service (thousands):
Switched Access Lines 23,869 22,968
Access Line Equivalents(a)
Selected Digital Data
Services:
Basic Rate ISDN(b) 175 130
Primary Rate ISDN 458 225
DS0 681 644
DS1 4,090 3,206
DS3 6,646 4,488
Total Equivalent Access Lines 35,919 31,661
(a) Access line equivalent conversion factors are based on
the estimated capacity of 1 switched access line. The
conversion factors used are as follows:
Basic Rate ISDN (b) 2.5/1
Primary Rate ISDN 24/1
DS0 1/1
DS1 24/1
DS3 672/1
(b) Basic Rate ISDN lines are included in BellSouth
Telecommunication's switched access line count as equaling 1
line. The amounts shown are the estimated incremental
equivalent access lines resulting from these lines.
PRELIMINARY
October 20, 1998
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
(Unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
Property additions (millions) $2,553 $2,539
Access minutes of use
(millions):
Interstate 58,530 54,797
Intrastate 19,230 17,389
IntraLATA toll messages 601 686
(millions)
PRELIMINARY
October 20, 1998
BELLSOUTH CORPORATION
CELLULAR OPERATING INFORMATION (UNAUDITED) (7)
($ IN THOUSANDS, EXCEPT Third Third
PER CUSTOMER Quarter Quarter
INFORMATION NOTES 1998 1997 % Change
DOMESTIC OPERATIONS
Cellular Revenues, (1),(4) $669,356 $658,989 1.6%
net
Operating Expenses (1) 355,648 318,048 11.8%
Depreciation Expense (1) 114,812 98,471 16.6%
Amortization of
Intangibles (1) 19,843 18,281 8.5%
(including
goodwill)
Total Operating (1) 490,303 434,800 12.8%
Expenses
Operating Income (1) 179,053 224,189 -20.1%
Other Expenses (1) 77,969 91,090 -14.4%
(includes interest
and taxes)
Net Income (1) $101,084 $133,099 -24.1%
Operating Cash Flow (1),(6) $313,708 $340,941 -8.0%
Cash Operating (1),(6) 46.87% 51.74% -9.4%
Margin
DOMESTIC CELLULAR DATA
Population Served: (11)
Control Basis (2) 50,517,000 52,196,000 -3.2%
Equity Basis (3) 40,648,000 41,021,000 -.9%
Customers Served:
Control Basis (2),(8) 5,399,000 4,860,000 11.1%
Equity Basis (3),(8) 4,542,000 3,967,000 14.5%
Average Monthly (5) $45 $51 -11.8%
Service Revenue
per Customer
Penetration Rate (3) 11.17% 9.67% 15.5%
Property, Plant (1) $3,920,000 $3,539,000 10.8%
and Equipment
PRELIMINARY
October 20, 1998
BELLSOUTH CORPORATION
CELLULAR OPERATING INFORMATION (UNAUDITED) (7)
($ IN THOUSANDS, EXCEPT Third Third
PER CUSTOMER Quarter Quarter
INFORMATION) NOTES 1998 1997 % Change
DOMESTIC PCS DATA
Population Served: (11)
Control Basis (2) 25,096,000 24,032,000 4.4%
Equity Basis (3) 20,432,000 19,428,000 5.2%
Customers Served:
Control Basis (2) 249,000 126,000 97.6%
Equity Basis (3) 158,000 77,000 105.2%
SELECTED INTERNATIONAL OPERATING DATA (9),(10)
Cellular Revenues (1) $618,888 $357,328 73.2%
Population Served:
Control Basis (2) 88,100,000 68,900,000 27.9%
Equity Basis (3),(12) 108,942,000 88,014,000 23.8%
Cellular Customers Served:
Control Basis (2) 2,430,000 1,497,000 62.3%
Equity Basis (3),(12) 3,014,000 1,624,000 85.6%
Penetration Rate (3),(10) 3.05% 2.34% 30.3%
SELECTED LATIN AMERICA INFORMATION (10)
Cellular Revenues (1) $441,913 $206,488 114.0%
Net Earnings from (1) $(3,826) $5,724 --
Operations
Operating Cash Flow (1),(6) $139,087 $53,160 161.6%
Cash Operating (1),(6) 31.47% 25.74% 22.3%
Margin
Population Served:
Control Basis (2) 84,400,000 65,300,000 29.2%
Equity Basis (3),(12) 82,094,000 61,522,000 33.4%
Customers Served:
Control Basis (2) 2,305,000 1,420,000 62.3%
Equity Basis (3),(12) 1,923,000 884,000 117.5%
Average Monthly
Service Revenue per (5) $69 $80 -13.8%
Customer
Penetration Rate (3),(10) 2.67% 2.06% 29.6%
PRELIMINARY
October 20, 1998
BELLSOUTH CORPORATION
CELLULAR OPERATING INFORMATION (UNAUDITED) (7)
($ IN THOUSANDS, EXCEPT
PER CUSTOMER Year-to-Date Year-to-Date
INFORMATION) NOTES 1998 1997 % Change
DOMESTIC OPERATIONS
Cellular Revenues, (1),(4) $1,947,491 $1,872,874 4.0%
net
Operating Expenses (1) 1,050,363 1,020,866 2.9%
Depreciation Expense (1) 332,061 280,370 18.4%
Amortization of (1) 59,449 55,119 7.9%
Intangibles
(including
goodwill)
Total Operating (1) 1,441,873 1,356,355 6.3%
Expenses
Operating Income (1) 505,618 516,519 -2.1%
Other Expenses (1) 213,077 225,154 -5.4%
(includes interest
and taxes)
Net Income (1) $292,541 $291,365 .4%
Operating Cash Flow (1),(6) $897,128 $852,008 5.3%
Cash Operating (1),(6) 46.07% 45.49% 1.3%
Margin
DOMESTIC CELLULAR DATA
Average Monthly
Service Revenue (5) $46 $52 -11.5%
per Customer
SELECTED INTERNATIONAL OPERATING DATA (9),(10)
Cellular Revenues (1) $1,519,530 $941,434 61.4%
SELECTED LATIN AMERICA INFORMATION (10)
Cellular Revenues (1) $1,027,181 $534,011 92.4%
Net Earnings from (1) $18,366 $34,144 -46.2%
Operations
Operating Cash Flow (1),(6) $322,791 $160,845 100.7%
Cash Operating (1),(6) 31.42% 30.12% 4.3%
Margin
Average Monthly (5) $71 $82 -13.4%
Service Revenue per
Customer
PRELIMINARY
October 20, 1998
BellSouth Corporation
Schedule of International Customers and POPS by Country (000's)
Third Quarter 1998
------------------------------------------
Customers POPS
-------------------- --------------------
Country Company Equity Control Equity Control
-------- --------- --------- -------- -------- --------
Argentina CRM 519 798 8,515 13,100
Chile BellSouth 164 164 7,400 7,400
Chile
Ecuador BellSouth 94 105 10,906 12,200
Ecuador
Nicaragua BellSouth 12 13 2,581 2,900
Nicaragua
Panama BSC Panama 18 - 1,135 -
Peru Tele 2000 125 212 4,133 7,000
Interior - - 10,037 17,000
Uruguay Abiatar 21 46 966 2,100
Venezuela Telcel 755 967 17,742 22,700
Brazil Region 1- 194 - 7,374 -
Sao Paulo
Region 10 21 - 11,305 -
------ ------ ------- ------
Subtotal Latin America 1,923 2,305 82,094 84,400
------ ------ ------- ------
Denmark DMT 308 - 2,465 -
Germany E-Plus 356 - 18,545 -
Israel Cellcom 341 - 2,085 -
India SkyCell 5 - 1,348 -
New Zealand BSNZ 81 125 2,405 3,700
------ ------ ------- ------
Subtotal other 1,091 125 26,848 3,700
------ ------ ------- ------
Total International 3,014 2,430 108,942 88,100
====== ====== ======= ======
PRELIMINARY
October 20, 1998
BellSouth Corporation
Schedule of International Customers and POPS by Country (000's)
Third Quarter 1997
------------------------------------------
Customers POPS
-------------------- --------------------
Country Company Equity Control Equity Control
-------- --------- --------- -------- -------- --------
Argentina CRM 301 501 7,863 13,100
Chile BellSouth 128 128 7,200 7,200
Chile
Ecuador BellSouth 25 41 7,157 11,700
Ecuador
Nicaragua BellSouth 5 6 2,400 2,700
Nicaragua
Panama BSC Panama 5 - 1,093 -
Peru Tele 2000 49 84 4,109 7,000
Interior - - - -
Uruguay Abiatar 13 36 595 1,700
Venezuela Telcel 358 624 12,553 21,900
Brazil Region 1- - - 7,374 -
Sao Paulo
Region 10 - - 11,178 -
------ ------ ------ ------
Subtotal Latin America 884 1,420 61,522 65,300
------ ------ ------ ------
Denmark DMT 260 - 2,418 -
Germany E-Plus 164 - 18,388 -
Israel Cellcom 261 - 1,998 -
India SkyCell 5 - 1,348 -
New Zealand BSNZ 50 77 2,340 3,600
------ ------ ------ ------
Subtotal other 740 77 26,492 3,600
------ ------ ------ ------
Total International 1,624 1,497 88,014 68,900
====== ====== ====== ======
PRELIMINARY
October 20, 1998
NOTES
(1) The presentation of selected income statement and
balance sheet information is based on BellSouth's ownership
percentage for all domestic and international cellular
subsidiaries and affiliates, whether or not consolidated for
financial statement presentation purposes. Gains/losses
from the sale of properties and other unusual items are not
included in net income. Financial information for Domestic
Cellular Operations does not include PCS.
(2) Includes 100% of population/customers served in markets
where BellSouth has operating control and/or BellSouth
ownership exceeds 50%; excludes population/customers served
for markets where BellSouth does not have operating control
and ownership is less than 50%.
(3) Includes population/customers served based on
BellSouth's ownership percentage in all markets served.
(4) Included in revenues is equipment revenue net of cost.
(5) Includes local service revenue, which consists of
charges for cellular air-time service, long distance, and
access billed by a carrier for services in its market.
Excluded are roaming charges, toll charges, taxes on service
revenues, equipment sales, installation and repair revenues.
(6) Operating cash flow represents operating income before
depreciation and amortization.
(7) The income statement and balance sheet information are
for the periods ended August 31, 1998 and 1997. The
domestic customer numbers presented above are as of
September 30, 1998 and 1997 and international customer
numbers are as of August 31, 1998 and 1997.
(8) As information, domestic cellular customers served on a
control basis for the periods ended August 31, 1998 and 1997
were 5,348,000 and 4,846,000, respectively. On an equity
basis, domestic cellular customers served for the same
periods were 4,503,000 and 3,924,000, respectively.
(9) BellSouth sold its investment in Optus during the third
quarter of 1997. Previously reported data for 1997 has been
restated to exclude Optus.
(10)For third quarter 1998, no financial or customer
information related to the newly acquired license in Peru
Interior is included, and the penetration rate calculation
excludes this population amount.
(11)Coverage areas for certain BellSouth Domestic Cellular
and PCS licenses overlap each other. If these categories
were combined for reporting purposes, third quarter 1998
total population served would be reduced by 642,000
(control basis) and 830,000 (equity basis) for the overlap.
(12)Includes 251,000 net customer additions resulting from
increased ownership percentages in several existing Latin
American markets. Excluding these customer additions,
equity basis customers served for International and Latin
America increased by 70.1% and 89.1%, respectively, over
third quarter 1997. Excluding these ownership changes,
equity basis population served increased by 13.5% and 18.7%
for International and Latin America, respectively, over
third quarter 1997.
