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):
January 25, 1999
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.)
Room 15G03, 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
Fourth Quarter 1998 Earnings
On January 25, 1999, BellSouth announced earnings for the fourth quarter
of 1998. See Exhibit 99 for a complete copy of the related press
release.
1999 Earnings Growth
BellSouth believes that normalized earnings growth will be
from 12 percent to 14 percent for 1999. In addition, an
anticipated change in accounting for software is expected to add
approximately 7 percent to earnings growth during 1999. This
range of EPS growth (19 percent to 21 percent) excludes the
impact of currency devaluations in Brazil. 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) domestic continued economic growth and demand
for BellSouth's services; (2) monetary, regulatory and political
stability where BellSouth conducts its international operations;
(3) the reasonable accuracy of BellSouth's expectations of the
impact on its international operations of weakening currencies
in Latin America as compared to the U.S. dollar; (4) the
reasonable accuracy of BellSouth's expectations of costs and
recoveries with respect to access reform, universal service and
interconnection; (5) 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 (6) 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 - Fourth 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
January 25, 1999
BellSouth EPS Grows 16.7% in Fourth Quarter
Data and digital services revenues surge to $1.9 billion in
1998;
EPS up 16.3% for year before special items
ATLANTA - BellSouth Corporation (NYSE: BLS) reported a
16.7 percent increase in diluted earnings per share (EPS)
for the fourth quarter of 1998, excluding one-time gains.
For the full year, EPS improved 16.3 percent, excluding
special items, and BellSouth stock provided a total return
to investors of 80.9 percent.
Fourth quarter EPS was a record 42 cents in 1998, excluding
gains totaling 9 cents from the previously reported sale of
cellular operations in New Zealand ($110 million after tax,
or 6 cents per share) and income from a loan settlement ($62
million, 3 cents). Normalized EPS in the fourth quarter of
1997 was 36 cents. (All per share amounts reflect
BellSouth's 2-for-1 stock split in December 1998.)
"The investments we're making and the way we're executing
our growth strategies continue to pay off," said Duane
Ackerman, chairman and chief executive officer. "In 1998,
we invested a record $7 billion in our businesses, and we
continue to generate powerful revenue growth from sources
such as data, wireless, Internet, enhanced calling features
and digital television."
BellSouth's data and digital services revenues increased to
$528 million in the fourth quarter of 1998, a 33 percent
increase compared to $398 million in the same three months a
year earlier. For business and industrial customers,
BellSouth provides high-speed connection services, network
management solutions and Internet applications. In the
consumer market, the company's BellSouth.net(SM) Internet
service is one of the fastest growing in the country. For
1998 as a whole, data and digital services revenues surged
41 percent to $1.9 billion.
Unit volume growth was strong. Access line equivalents,
which include data and digital services products as well as
traditional switched lines, grew at an annual rate of 14.7
percent.
BellSouth installed 128,000 access lines for residential
customers during the final three months of 1998, including a
fourth quarter record 95,000 additional lines. Nearly one
out of every six BellSouth residential customers has an
additional line that is used for Internet access, fax
machines, work-at-home needs and an extra voice line.
BellSouth's performance continued to benefit from growth in
convenience features such as Caller ID Deluxe, Call Return
and MemoryCall(r) service voice messaging. Including monthly
subscriptions and Per Use activations, revenues from these
and other convenience products were $423 million in the
fourth quarter of 1998. This was up 20 percent from the
same three months of 1997. Caller ID Deluxe grew 32 percent
and now is used by 5.9 million customers. Call Waiting
Deluxe grew 156 percent, to more than 2.3 million in
service. MemoryCall mailboxes exceeded 2.5 million for the
first time, growing 14 percent.
BellSouth added 752,000 U.S. wireless customers in 1998
(based on the company's ownership percentages), including
255,000 during a successful holiday selling season in the
fourth quarter. Customer growth for the year was 18.6
percent, adjusted for the fourth quarter restructuring of
BellSouth's cellular partnerships in Los Angeles and
Houston. Domestic cellular and PCS revenue of $707 million
in the fourth quarter of 1998 grew 7.0 percent compared to
$661 million in the same quarter of 1997.
International wireless customers also made a significant
contribution to BellSouth's growth. Based on the company's
ownership percentages, BellSouth's international wireless
customer base grew by 1.6 million, or 88.5 percent, compared
to the fourth quarter of 1997, adjusted for the New Zealand
sale. International wireless revenues climbed 71 percent in
the fourth quarter on a proportionate basis, to $661 million
in 1998 from $386 million in 1997. Worldwide, BellSouth now
serves more than 8.2 million wireless customers.
BellSouth's fourth quarter revenues were a record $6.2
billion in 1998, compared to $5.6 billion a year earlier.
Net income was $831 million before one-time gains, which
totaled $172 million. This was an increase of 16.2 percent
compared to the fourth quarter of 1997, when net income was
$715 million before special items totaling $14 million.
For the year, BellSouth posted record revenues of $23.1
billion in 1998, an increase of 12.5 percent compared to
1997. Excluding special items in both years, EPS in 1998
was $1.64, compared to $1.41 in 1997. Including the special
items, reported EPS was $1.78 in 1998, compared to $1.64 in
the previous year. Net income excluding special items was
$3.3 billion in 1998, compared to $2.8 billion in 1997.
Reported net income in 1998 was $3.5 billion versus $3.3
billion in 1997.
BellSouth is a $23 billion communications services company.
It provides telecommunications, wireless communications,
cable and digital TV, directory advertising and publishing,
and Internet and data services to nearly 34 million
customers in 19 countries worldwide.
NOTE: For more information about BellSouth Corporation,
visit the BellSouth Web page at http://www.bellsouth.com/
PRELIMINARY
January 25, 1999
BELLSOUTH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, Except Per Share Amounts)
(Unaudited)
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
1998 1997 1998 1997
Operating Revenues:
Network and related
services:
Local service $ 2,412 $ 2,184 $ 9,399 $ 8,499
Interstate access 972 912 3,821 3,673
Intrastate access 202 209 811 810
Toll 181 185 713 734
Wireless communications 1,269 1,046 4,792 3,555
Directory advertising
and publishing 703 707 1,989 1,934
Other services 429 357 1,598 1,356
Total Operating Revenues 6,168 5,600 23,123 20,561
Operating Expenses:
Cost of services and
products 1,825 1,730 7,080 6,254
Depreciation and
amortization 1,129 1,025 4,357 3,964
Selling, general and
administrative 1,661 1,392 5,782 4,967
Total Operating Expenses 4,615 4,147 17,219 15,185
Operating Income 1,553 1,453 5,904 5,376
Interest Expense 226 196 837 761
Gain on Sale of
Operations 180 -- 335 787
Other Income
(Expense), net 130 (27) 349 19
Income Before Income
Taxes and Extraordinary
Loss 1,637 1,230 5,751 5,421
Provision for Income
Taxes 634 492 2,224 2,151
Income Before
Extraordinary Loss 1,003 738 3,527 3,270
Extraordinary Loss on
Early Extinguishment of
Debt, net of tax -- (9) -- (9)
Net Income $ 1,003 $ 729 $ 3,527 $ 3,261
PRELIMINARY
January 25, 1999
BELLSOUTH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, Except Per Share Amounts)
(Unaudited)
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
1998 1997 1998 1997
Weighted-Average Common
Shares Outstanding:
Basic 1,954 1,983 1,970 1,984
Diluted 1,972 1,991 1,984 1,989
Dividends Declared Per
Common Share $ .19 $ .18 $ .73 $ .72
Earnings Per Share:
Basic $ .51 $ .37 $ 1.79 $ 1.64(a)
Diluted $ .51 $ .37 $ 1.78 $ 1.64
(a) Basic earnings per share before extraordinary loss on early
extinguishment of debt was $.37 and $1.65 for the three and twelve
months ended December 31, 1997. Diluted earnings per share was not
affected by the extraordinary loss.
PRELIMINARY
January 25, 1999
BELLSOUTH CORPORATION
EARNINGS SUMMARY
(Unaudited)
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
1998 1997 1998 1997
Net Income
Reported Net Income $1,003 $ 729 $3,527 $3,261
Gain on Sale of New Zealand(a) (110) -- (110) --
Gain from Additional Proceeds on
Sale of ITT World Directories(b) -- -- (96) --
Income from Prime Loan
Settlement(c) (62) -- (62) --
Gain on Sale of Optus
Communications(d) -- -- -- (352)
Gain on Sale of ITT
World Directories(d) -- -- -- (128)
Gain on Sale of Bellcore(d) -- (23) -- (23)
South Carolina Regulatory
Settlement(e) -- -- -- 47
Extraordinary Loss on Early
Extinguishment of Debt(f) -- 9 -- 9
Adjusted Net Income $ 831 $ 715 $3,259 $2,814
Diluted Earnings Per Share
Reported Earnings Per Share $ .51 $ .37 $ 1.78 $ 1.64
Gain on Sale of New Zealand(a) (.06) -- (.06) --
Gain from Additional Proceeds on
Sale of ITT World Directories(b) -- -- (.05) --
Income from Prime Loan
Settlement(c) (.03) -- (.03) --
Gain on Sale of Optus
Communications(d) -- -- -- (.18)
Gain on Sale of ITT World
Directories(d) -- -- -- (.06)
Gain on Sale of Bellcore(d) -- (.01) -- (.01)
South Carolina Regulatory
Settlement(e) -- -- -- .02
Adjusted Earnings Per Share $ .42 $ .36 $ 1.64 $ 1.41
(a) Represents the after-tax gain on the sale of New Zealand. The
pretax gain on the sale was $180.
(b) 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.
(c) Represents contingent interest and prepayment penalties
associated with the repayment of the Prime Loan. These proceeds
increased pretax income by $102.
(d) Represents the after-tax gains on the sales of Optus
Communications, ITT World Directories and Bellcore, respectively. The
pretax gains on the sales were $578, $209 and $38, respectively.
(e) Represents the after-tax effect of a regulatory settlement in
South Carolina which occurred in second quarter 1997.
(f) Represents losses incurred in connection with the early
redemption of certain debt issues in fourth quarter 1997.
PRELIMINARY
January 25, 1999
BELLSOUTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Per Share Amounts)
December 31, December 31,
1998 1997
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 3,003 $ 2,570
Temporary cash investments 184 17
Accounts receivable, net of
allowance for uncollectibles
of $251 and $246 4,629 4,750
Material and supplies 431 393
Other current assets 459 387
Total Current Assets 8,706 8,117
Investments and Advances 2,861 2,675
Property, Plant and Equipment:
Property, plant and equipment 57,974 53,828
Accumulated depreciation 34,034 30,967
Property, plant and
equipment, net 23,940 22,861
Deferred Charges and Other
Assets 1,028 702
Intangible Assets, net 2,875 1,946
Total Assets $ 39,410 $ 36,301
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Debt maturing within one year $ 3,466 $ 3,706
Accounts payable 2,179 1,825
Other current liabilities 3,477 3,252
Total Current Liabilities 9,122 8,783
Long-Term Debt 8,743 7,348
Deferred Credits and Other
Liabilities:
Accumulated deferred income
taxes 2,512 2,023
Unamortized investment tax
credits 167 213
Other liabilities and
deferred credits 2,756 2,769
Total Deferred Credits and
Other Liabilities 5,435 5,005
Shareholders' Equity:
Common stock, $1 par value 2,020 1,010
Paid-in capital 6,766 7,714
Retained earnings 9,479 7,382
Accumulated other
comprehensive income (64) 36
Shares held in trust and
treasury (1,752) (575)
Guarantee of ESOP debt (339) (402)
Total Shareholders' Equity 16,110 15,165
Total Liabilities and
Shareholders' Equity $ 39,410 $ 36,301
PRELIMINARY
January 25, 1999
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
(Unaudited)
Three Months Three Months
Ended Ended
December 31, December 31,
1998 1997
Earnings per share:
Basic $ .51 (a) $ .37 (b)
Diluted $ .51 (a) $ .37 (b)
Return on average common
equity (annualized) 25.1% (c) 19.3% (c)
Return on average total
capital(annualized) 16.3% (c) 13.9% (c)
Weighted-average common shares
outstanding (millions)
Basic 1,954 1,983
Diluted 1,972 1,991
Dividends per share $ .19 $ .18
Property additions (millions) $ 1,383 $ 1,473
At December 31,
1998 1997
Common shares outstanding 1,950 1,984
(millions)
Debt ratio 43.0% 42.1%
Total employees 88,450 81,000
(a) Includes an after-tax gain of $110 ($.06 per share) from the sale
of New Zealand and additional income of $62 ($.03 per share) from the
settlement of the Prime Loan.
(b) Includes an after-tax gain of $23 ($.01 per share) from the sale
of Bellcore and an extraordinary loss on early extinguishment of debt
of $9.
(c) After adjusting net income for the impact of the items discussed
in notes (a) and (b), Return on average common equity was 20.8% and
19.0% for 1998 and 1997, respectively, and Return on average total
capital was 13.9% and 13.7% for 1998 and 1997, respectively.
PRELIMINARY
January 25, 1999
BELLSOUTH FINANCIAL HIGHLIGHTS
SELECTED DATA
(Unaudited)
Twelve Months Twelve Months
Ended Ended
December 31, December 31,
1998 1997
Earnings per share:
Basic $ 1.79 (a) $ 1.64 (c)
Diluted $ 1.78 (a) $ 1.64 (c)
Return on average common
equity 22.3% (b) 22.8% (d)
Return on average total
capital 15.1% (b) 15.8% (d)
Weighted-average common shares
outstanding (millions)
Basic 1,970 1,984
Diluted 1,984 1,989
Dividends per share $ .73 $ .72
Property additions (millions) $5,003 $ 4,737
(a) Includes, on an after-tax basis, $110 ($.06 per share), $62 ($.03
per share) and $96 ($.05 per share) related to the gain on sale of New
Zealand, additional income from settlement of the Prime Loan and
additional proceeds from the sale of ITT World Directories,
respectively.
(b) After adjusting net income for the impact of the items discussed
in note (a), Return on average common equity was 20.6% and Return on
average total capital was 14.1%.
(c) Includes after-tax gains of $352 ($.18 per share), $128 ($.06 per
share) and $23 ($.01 per share) from the sales of Optus
Communications, ITT World Directories and Bellcore, respectively. Also
includes an extraordinary loss on early extinguishment of debt of $9
and an after-tax charge of $47 ($.02 per share) related to a
regulatory settlement in South Carolina.
(d) After adjusting net income for the impact of the items discussed
in note (c), Return on average common equity was 19.7% and Return on
average total capital was 14.0%.
PRELIMINARY
January 25, 1999
BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Millions)
(Unaudited)
For the For the
Three Months Twelve Months
Ended Ended
December 31, December 31,
1998 1997 1998 1997
Operating Revenues:
Local service $ 2,412 $ 2,184 $ 9,399 $ 8,499
Interstate access 972 912 3,821 3,673
Intrastate access 202 209 811 810
Toll 181 185 713 734
Other 504 424 1,878 1,630
Total Operating Revenues 4,271 3,914 16,622 15,346
Operating Expenses:
Cost of services and
products 1,338 1,303 5,510 5,119
Depreciation and
amortization 854 850 3,363 3,332
Selling, general and
administrative 754 692 2,940 2,707
Total Operating Expenses 2,946 2,845 11,813 11,158
Operating Income 1,325 1,069 4,809 4,188
Interest Expense 142 133 551 534
Other Income, net 1 37 3 41
Income Before Income
Taxes and Extraordinary
Loss 1,184 973 4,261 3,695
Provision for Income
Taxes 427 350 1,551 1,372
Income Before
Extraordinary Loss 757 623 2,710 2,323
Extraordinary Loss on
Early Extinguishment of
Debt, net of tax -- (9) -- (9)
Net Income $ 757 $ 614 $ 2,710 $ 2,314
(a) The results of BellSouth Telecommunications have been adjusted
for the effect of certain intercompany billings which are not
considered for management purposes.
PRELIMINARY
January 25, 1999
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
(Unaudited)
Three Months Three Months
Ended Ended
December 31, December 31,
1998 1997
Property additions (millions) $ 945 $ 890
Access minutes of use 26,613 24,921
(millions)
IntraLATA toll messages 183 208
(millions)
At December 31,
1998 1997
Debt ratio 47.8% 48.3%
Telephone employees 60,561 57,619
Network access lines in
service (thousands):
Switched Access Lines 24,025 23,201
Access Line Equivalents(a)
Selected Digital Data
Services:
Basic Rate ISDN(b) 178 143
Primary Rate ISDN 526 288
DS0 697 644
DS1 4,343 3,400
DS3 7,418 4,743
Total Equivalent Access Lines 37,187 32,419
(a) Access line equivalent conversion factors are based on the
estimated capacity of one 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
Telecommunications' switched access line count as equaling one line.
The amounts shown are the estimated incremental equivalent access
lines resulting from these lines.
PRELIMINARY
January 25, 1999
BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS
SELECTED DATA
(Unaudited)
Twelve Months Twelve Months
Ended Ended
December 31, December 31,
1998 1997
Property additions (millions) $3,498 $3,429
Access minutes of use 104,373 97,106
(millions)
IntraLATA toll messages 784 894
(millions)
PRELIMINARY
January 25, 1999
BELLSOUTH CORPORATION
CELLULAR OPERATING INFORMATION (UNAUDITED) (7)
($ IN THOUSANDS, EXCEPT Fourth Fourth
PER CUSTOMER Quarter Quarter
INFORMATION) NOTES 1998 1997 % Change
DOMESTIC OPERATIONS
Cellular Revenues, (1),(4) $685,441 $647,227 5.9%
net
Operating Expenses (1) 394,926 342,507 15.3%
Depreciation Expense (1) 120,297 106,772 12.7%
Amortization of
Intangibles (1) 19,660 19,251 2.1%
(including
goodwill)
Total Operating (1) 534,883 468,530 14.2%
Expenses
Operating Income (1) 150,558 178,697 -15.7%
Other Expenses (1) 74,129 76,429 -3.0%
(includes
interest
and taxes)
Net Income (1) $76,429 $102,268 -25.3%
Operating Cash (1),(6) $290,515 $304,720 -4.7%
Flow
Cash Operating (1),(6) 42.38% 47.08% -10.0%
Margin
DOMESTIC CELLULAR DATA
Population Served: (11),(13)
Control Basis (2) 35,751,000 35,382,000 1.0%
Equity Basis (3) 38,383,000 37,957,000 1.1%
Customers Served:
Control Basis (2),(8), 4,575,000 3,927,000 16.5%
(13)
Equity Basis (3),(8), 4,585,000 3,956,000 15.9%
(13)
Average Monthly (5) $44 $50 -12.0%
Service Revenue
per Customer
Penetration Rate (3) 11.9% 10.4% 14.4%
Property, Plant (1) $4,055,000 $3,615,000 12.2%
and Equipment
PRELIMINARY
January 25, 1999
BELLSOUTH CORPORATION
CELLULAR OPERATING INFORMATION (UNAUDITED) (7)
($ IN THOUSANDS, Fourth Fourth
EXCEPT PER CUSTOMER Quarter Quarter
INFORMATION) NOTES 1998 1997 % Change
DOMESTIC PCS DATA
Population Served: (11)
Control Basis (2) 25,096,000 25,096,000 N/A
Equity Basis (3) 20,432,000 20,432,000 N/A
Customers Served:
Control Basis (2) 326,000 141,000 131.2%
Equity Basis (3) 211,000 88,000 139.8%
SELECTED INTERNATIONAL OPERATING DATA (9),(10)
Cellular Revenues (1) $661,195 $386,242 71.2%
Population Served:
Control Basis (2) 84,400,000 65,300,000 29.2%
Equity Basis (3),(12) 108,313,000 86,538,000 25.2%
Cellular Customers Served:
Control Basis (2) 2,666,000 1,669,000 59.7%
Equity Basis (3),(12) 3,439,000 1,824,000 88.5%
Penetration Rate (3),(10) 3.50% 2.68% 30.6%
SELECTED LATIN AMERICA INFORMATION (10)
Cellular Revenues (1) $ 488,264 $260,210 87.6%
Net Earnings from (1) (28,478) (3,059) N/A
Operations
Operating Cash (1),(6) 145,657 62,482 133.1%
Flow
Cash Operating (1),(6) 29.83% 24.01% 24.2%
Margin
Population Served:
Control Basis (2) 84,400,000 65,300,000 29.2%
Equity Basis (3),(12) 83,870,000 62,386,000 34.4%
Customers Served:
Control Basis (2) 2,666,000 1,669,000 59.7%
Equity Basis (3),(12) 2,334,000 1,074,000 117.3%
Average Monthly (5) $69 $82 -15.9%
Service Revenue
per Customer
Penetration Rate (3),(10) 3.16% 2.45% 29.0%
PRELIMINARY
January 25, 1999
BELLSOUTH CORPORATION
CELLULAR OPERATING INFORMATION (UNAUDITED) (7)
($ IN THOUSANDS,
EXCEPT PER CUSTOMER Year-to-Date Year-to-Date
INFORMATION) NOTES 1998 1997 % Change
DOMESTIC OPERATIONS
Cellular Revenues, (1),(4) $2,632,932 $2,520,101 4.5%
net
Operating Expenses (1) 1,445,289 1,363,373 6.0%
Depreciation Expense (1) 452,358 387,142 16.8%
Amortization of (1) 79,109 74,370 6.4%
Intangibles
(including
goodwill)
Total Operating (1) 1,976,756 1,824,885 8.3%
Expenses
Operating (1) 656,176 695,216 -5.6%
Income
Other Expenses (1) 287,206 301,583 -4.8%
(includes
interest
and taxes)
Net Income (1) $368,970 $393,633 -6.3%
Operating Cash (1),(6) $1,187,643 $1,156,728 2.7%
Flow
Cash Operating (1),(6) 45.11% 45.90% -1.7%
Margin
DOMESTIC CELLULAR DATA
Average Monthly (5) $45 $51 -11.8%
Service Revenue
per Customer
SELECTED INTERNATIONAL OPERATING DATA (9),(10)
Cellular Revenues (1) $2,118,799 $1,268,242 67.1%
SELECTED LATIN AMERICA INFORMATION (10)
Cellular Revenues (1) $1,515,445 $794,221 90.8%
Net Earnings from (1) (10,112) 31,085 N/A
Operations
Operating Cash (1),(6) 468,448 223,321 109.8%
Flow
Cash Operating (1),(6) 30.91% 28.12% 9.9%
Margin
Average Monthly (5) $70 $82 -14.6%
Service Revenue
per Customer
PRELIMINARY
January 25, 1999
BellSouth Corporation
Schedule of International Customers and POPS by Country (000's)
Fourth Quarter 1998
------------------------------------------
Customers POPS
-------------------- --------------------
Country Company Equity Control Equity Control
-------- --------- --------- -------- -------- --------
Argentina CRM 575 884 8,515 13,100
Chile BellSouth 192 192 7,400 7,400
Chile
Ecuador BellSouth 103 115 10,906 12,200
Ecuador
Nicaragua BellSouth 15 17 2,581 2,900
Nicaragua
Panama BSC Panama 22 - 1,135 -
Peru Tele 2000 140 238 4,133 7,000
Interior - - 10,037 17,000
Uruguay Abiatar 24 52 966 2,100
Venezuela Telcel 913 1,168 17,742 22,700
Brazil Region 10- 58 - 12,451 -
Northeast
Region 1- 292 - 8,004 -
Sao Paulo
------ ------ ------- ------
Subtotal Latin America 2,334 2,666 83,870 84,400
------ ------ ------- ------
Denmark DMT 333 - 2,465 -
Germany E-Plus 404 - 18,545 -
Israel Cellcom 364 - 2,085 -
India SkyCell 4 - 1,348 -
------ ------ ------- ------
Subtotal other 1,105 - 24,443 -
------ ------ ------- ------
Total International 3,439 2,666 108,313 84,400
====== ====== ======= ======
PRELIMINARY
January 25, 1999
BellSouth Corporation
Schedule of International Customers and POPS by Country (000's)
Fourth Quarter 1997
------------------------------------------
Customers POPS
-------------------- --------------------
Country Company Equity Control Equity Control
-------- --------- --------- -------- -------- --------
Argentina CRM 409 629 8,515 13,100
Chile BellSouth 140 140 7,200 7,200
Chile
Ecuador BellSouth 34 55 7,157 11,700
Ecuador
Nicaragua BellSouth 6 7 2,401 2,700
Nicaragua
Panama BSC Panama 7 - 1,093 -
Peru Tele 2000 60 102 4,133 7,000
Interior - - - -
Uruguay Abiatar 18 39 782 1,700
Venezuela Telcel 400 697 12,552 21,900
Brazil Region 10- - - 11,178 -
Northeast
Region 1- - - 7,375 -
Sao Paulo
------ ------ ------ ------
Subtotal Latin America 1,074 1,669 62,386 65,300
------ ------ ------ ------
Denmark DMT 255 - 2,418 -
Germany E-Plus 203 - 18,388 -
Israel Cellcom 287 - 1,998 -
India SkyCell 5 - 1,348 -
------ ------ ------ ------
Subtotal other 750 - 24,152 -
------ ------ ------ ------
Total International 1,824 1,669 86,538 65,300
====== ====== ====== ======
PRELIMINARY
January 25, 1999
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 Operations does not include PCS. Finally, the results of
Domestic Operations have been adjusted for the effect of certain
intercompany billings which are not considered for management
purposes.
(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 November 30, 1998 and 1997. The domestic customer
numbers presented are as of December 31, 1998 and 1997 and
international customer numbers are as of November 30, 1998 and 1997.
(8) As information, domestic cellular customers served on a control
basis for the periods ended November 30, 1998 and 1997 were 4,456,000
and 3,849,000, respectively. On an equity basis, domestic cellular
customers served for the same periods were 4,480,000 and 3,868,000,
respectively.
(9) BellSouth sold its investment in Optus during the third quarter
1997 and its investment in New Zealand during the fourth quarter 1998.
Previously reported data for 1997 and 1998 has been restated to
exclude these investments.
(10) For fourth quarter 1998, no financial or customer information
related to the acquired license in Peru Interior is included as
operations have not commenced, and the penetration rate calculation
excludes this population amount. The fourth quarter 1997 penetration
rate calculation excludes population served in Brazil, as operations
had not yet commenced.
(11) Coverage areas for certain BellSouth Domestic Cellular and PCS
licenses overlap each other. If these categories were combined for
reporting purposes, fourth quarter 1998 total population served would
be reduced by 506,000 (control basis) and 693,000 (equity basis) for
the overlap.
(12) Includes 247,000 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 75% over fourth quarter
1997. Excluding these ownership changes, equity basis population
served increased by 16% and 22% for International and Latin America,
respectively, over fourth quarter 1997.
(13) During fourth quarter 1998, BellSouth reorganized its Los Angeles
and Houston Cellular investments. Previously reported subscriber and
population data for 1997 has been restated to reflect the new
ownership percentages.
