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):
July 21, 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
<PAGE>
Item 5. Other Events
Second Quarter 1999 Earnings
- ---------------------------
On July 21, 1999, BellSouth announced earnings for the second quarter of
1999. See Exhibit 99a for a complete copy of the related press release.
Earnings guidance
- ---------------------------------
BellSouth expects EPS growth in the 19%-21% range in 1999, including the
change in accounting for software, estimated at $225 - $250 million. This also
excludes the impact of the 1Q99 currency devaluation in Brazil. Consolidated
total operating revenue growth is targeted in the high-single to low-double
digit range, while consolidated total operating expenses are targeted in the
mid-to-high single digit range for 1999. These targets include the impact of the
change in accounting for software - of which BellSouth has recorded $0.08
year-to-date, putting us about two-thirds of the way towards our expectation of
a $0.12 to $0.13 boost in 1999. For 2000, BellSouth expects EPS growth from
operations - excluding the impact of the change in accounting for software - in
the 13%-15% range.
- --------------------------------------------------------------------------
Cautionary Language Concerning Forward-Looking Statements
- --------------------------------------------------------------------------
Statements that do not address historical performance are based on our
assumptions and estimates and are subject to risks and uncertainties. For these
statements, we claim the protection of the safe harbor for forward-looking
statements provided by the Private Securities Litigation Reform Act of 1995.
Factors that could affect future operating results and financial position and
could cause actual results to differ materially from those expressed in the
forward-looking statements are:
* a change in economic conditions in domestic or international markets where
we operate or have material investments which would affect demand for our
services;
* the intensity of competitive activity and its resulting impact on pricing
strategies and new product offerings;
* further delay in our entry into the interLATA long distance market;
* higher than anticipated start-up costs or significant up-front investments
associated with new business initiatives;
* unanticipated higher capital spending from the deployment of new
technologies;
* unsatisfactory results in regulatory actions including access reform,
universal service, terms of interconnection and unbundled network elements
and resale rates; and
* failure to satisfactorily identify and complete Year 2000 software and
hardware revisions by us and entities with which we do business.
These cautionary statements should not be construed as exhaustive. These and
other developments could cause our actual results to differ materially from
those forecast or implied in the aforementioned forward-looking statements. You
are cautioned not to place undue reliance on these forward-looking statements,
which are current only as of the date of this filing. We have no obligation to
publicly release the results of any revisions to these forward-looking
statements to reflect events or circumstances after the date of this filing.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
BELLSOUTH CORPORATION
By: /s/ W. Patrick Shannon
W. Patrick Shannon
Vice President and Controller
July 21, 1999
FOR IMMEDIATE RELEASE
July 21, 1999
FOR MORE INFORMATION
Tim Klein (404-249-4135)
Jeff Battcher (404-713-0274)
BellSouth EPS Grows More Than 24% in 2nd Quarter
Customer gains fuel growth in data/Internet, wireless, international;
Convenience features rack up $466 million in revenue
ATLANTA - BellSouth Corporation (NYSE: BLS) reported second quarter
earnings per share (EPS) of 51 cents, a 24.4 percent increase compared to 41
cents in the second quarter of 1998. EPS in the most recent quarter included a
5-cent benefit from a change in accounting for internal-use software. With
customer gains fueling higher volumes in its three major growth areas -
data/Internet, domestic wireless and international wireless -- consolidated
revenues grew 8.5 percent to $6.1 billion.
"We continue to move swiftly and execute decisively in the fastest-growing
areas of the exploding telecommunications marketplace - data, Internet, wireless
and international," said Duane Ackerman, BellSouth chairman and chief executive
officer. "BellSouth's earnings are growing because we're marketing the total
communications solutions our customers need."
BellSouth's digital and data services revenues increased to $615 million in
the second quarter of 1999. This is a 32.3 percent increase compared to $465
million in the same three months a year earlier. Growth was driven by access
line equivalents, which include traditional switched lines as well as
high-capacity circuits for super-fast digital and data services such as
PathLink(r), BellSouth's primary rate ISDN product. BellSouth.net(r) Internet
service surpassed 565,000 customers -- an annual growth rate of 125 percent.
BellSouth Interactive PagingSM service also contributed to the growth in data
revenues.
Domestic wireless revenues of $796 million grew 18.5 percent on a
consolidated basis, compared to $672 million in the second quarter of the
previous year. Boosted by the popularity of BellSouth's attractive pricing
plans, the number of U.S. wireless customers grew 17.8 percent, reaching 5.2
million on a proportionate basis at June 30, 1999. Customers using digital
technology now account for more than half the minutes on BellSouth's wireless
network.
BellSouth's rapidly growing international operations generated
proportionate revenues of $709 million in the second quarter, compared to $451
million in the same three months of 1998. This 57 percent increase was driven by
continued high growth in Latin America. BellSouth's operations in Argentina
passed the million-customer milestone during the second quarter. In Venezuela,
customer growth in the past year has exceeded 127 percent, including the effect
of BellSouth's increased ownership percentage. BellSouth's international
wireless customer base, on a proportionate basis, grew by a total of 2.2 million
compared to the year earlier, or 93 percent, and now stands at 4.5 million.
Sales of BellSouth's popular Complete Choice(r) Plans, which package basic
local residential service with the customer's own unlimited menu selection of
more than 20 convenience features, passed the four million milestone in the
second quarter. In addition, continued growth in sales of individual convenience
features such as Call Return, Three-way Calling and MemoryCall(r) service voice
messaging again boosted BellSouth's performance. Revenues from all convenience
features were $466 million in the second quarter of 1999, up 19.5 percent from
the same three months of 1998. Four out of 10 residential customers now use
Caller ID or Caller ID Deluxe, which together are growing 23 percent per year in
the consumer marketplace.
Total operating expenses of $4.5 billion, a 6.4-percent increase compared
to the second quarter of 1998, reflected the growth in volumes and customers, as
well as BellSouth's previously announced plans to accelerate spending on data
initiatives and marketing. Including $95 million related to the change in
software accounting, net income in the second quarter of 1999 was $980 million,
compared to $818 million in the second quarter of 1998.
BellSouth is a $24 billion communications services company. It provides
telecommunications, wireless communications, cable and digital TV, advertising
and publishing, and Internet and data services to more than 35 million customers
in 19 countries worldwide.
NOTE: For more information about BellSouth Corporation, visit the BellSouth Web
page at http://www.bellsouth.com/
<PAGE>
BellSouth Corporation
Consolidated Statements of Income (unaudited)
(amounts in millions, except per share data)
Quarter Ended
6/30/99 6/30/98 % Change
Operating Revenues
Wireline communications
Local service $2,712 $2,502 8.4%
Network access 1,187 1,160 2.3%
Long distance 153 177 (13.6%)
Other wireline 255 249 2.4%
Total wireline
communications 4,307 4,088 5.4%
Domestic wireless 796 672 18.5%
International operations 565 484 16.7%
Advertising and publishing 407 394 3.3%
Other 73 26 N/M
Total Operating Revenues 6,148 5,664 8.5%
Operating Expenses
Operational and support expenses 3,359 3,156 6.4%
Depreciation and amortization 1,143 1,074 6.4%
Total Operating Expenses 4,502 4,230 6.4%
Operating Income 1,646 1,434 14.8%
Interest Expense 245 203 20.7%
Other Income (Expense), net 172 118 N/M
Income Before Income Taxes 1,573 1,349 16.6%
Provision for Income Taxes 593 531 11.7%
Net Income $980 $818 19.8%
Weighted Average Common Shares Outstanding:
Basic 1,891 1,978 (4.4%)
Diluted 1,909 1,990 (4.1%)
Earnings Per Share:
Basic $0.52 $0.41 26.8%
Diluted $0.51 $0.41 24.4%
Six Months Ended
6/30/99 6/30/98 % Change
Operating Revenues
Wireline communications
Local service $5,366 $4,916 9.2%
Network access 2,378 2,311 2.9%
Long distance 303 352 (13.9%)
Other wireline 535 485 10.3%
Total wireline
communications 8,582 8,064 6.4%
Domestic wireless 1,540 1,316 17.0%
International operations 1,126 936 20.3%
Advertising and publishing 750 730 2.7%
Other 123 44 N/M
Total Operating Revenues 12,121 11,090 9.3%
Operating Expenses
Operational and support expenses 6,612 6,085 8.7%
Depreciation and amortization 2,256 2,117 6.6%
Total Operating Expenses 8,868 8,202 8.1%
Operating Income 3,253 2,888 12.6%
Interest Expense 471 393 19.8%
Other Income (Expense), net (35) 301 N/M
Income Before Income Taxes 2,747 2,796 (1.8%)
Provision for Income Taxes 1,152 1,086 6.1%
Net Income $1,595 $1,710 (6.7%)
Weighted Average Common Shares
Outstanding:
Basic 1,912 1,980 (3.4%)
Diluted 1,930 1,992 (3.1%)
Earnings Per Share:
Basic $0.83 $0.86 (3.5%)
Diluted $0.83 $0.86 (3.5%)
Selected Financial and Operating Data
Quarter Ended
6/30/99 6/30/98 % Change
EBITDA $2,789 $2,508 11.2%
EBITDA margin 45.4% 44.3% +110bps
Return on average equity
(annualized) 27.9% 20.2% +770bps
Return on average total
capital (annualized) 16.6% 14.0% +260bps
Dividends per share $0.19 $0.18 5.6%
Capital expenditures $1,498 $1,254 19.5%
Six Months Ended
6/30/99 6/30/98 % Change
EBITDA $5,509 $5,005 10.1%
EBITDA margin 45.5% 45.1% +40bps
Return on average equity
(annualized) 21.8% 21.6% +20bps
Return on average total
capital (annualized) 13.9% 14.7% -80bps
Dividends per share $0.38 $0.36 5.6%
Capital expenditures $2,885 $2,480 16.3%
As of
6/30/99 6/30/98 % Change
Common shares outstanding 1,885 1,971 (4.4%)
Book value per share $7.40 $8.04 (8.0%)
Debt ratio 53.5% 42.2% +1130bps
Total employees 94,998 86,188 10.2%
<PAGE>
BellSouth Corporation
Normalized Earnings Summary (unaudited)
($ in millions, except per share data)
Quarter Ended
6/30/99 6/30/98 % Change
Reported Net Income $980 $818 19.8%
Foreign currency loss(a) - - -
Gain on sale of ITT World
Directories(b) - - -
Normalized Net Income $980 $818 19.8%
Reported Diluted Earnings Per Share $0.51 $0.41 24.4%
Foreign currency loss(a) - - -
Gain on sale of ITT World
Directories(b) - - -
Normalized Diluted Earnings Per Share(c) $0.51 $0.41 24.4%
Normalized return on average equity
(annualized) 27.9% 20.2% +770bps
Normalized return on average total
capital (annualized) 16.6% 14.0% +260bps
Six Months Ended
6/30/99 6/30/98 % Change
Reported Net Income $1,595 $1,710 (6.7%)
Foreign currency loss(a) 280 - N/M
Gain on sale of ITT World
Directories(b) - (96) N/M
Normalized Net Income $1,875 $1,614 16.2%
Reported Diluted Earnings Per Share $0.83 $0.86 (3.5%)
Foreign currency loss(a) 0.15 - N/M
Gain on sale of ITT World
Directories(b) - (0.05) N/M
Normalized Diluted Earnings Per Share(c) $0.97 $0.81 19.8%
Normalized return on average equity
(annualized) 25.6% 20.4% +520bps
Normalized return on average total
capital (annualized) 15.9% 14.0% +190bps
(a)Represents our share of foreign currency losses recorded during
first quarter 1999 as a result of the devaluation of the Brazilian
Real during January 1999.
(b)Represents the after-tax gain associated with additional proceeds
received in first quarter 1998 on the July 1997 sale of ITT World
Directories, included in Other Income (Expense), net.
(c)1999 year-to-date normalized diluted earnings per share do not sum
due to rounding.
Software Capitalization
The new accounting rules on capitalization of internal software costs
were adopted in first quarter 1999. The following table adjusts our
1999 normalized operating results for the impact of adoption:
Quarter Ended
6/30/99 6/30/98 % Change
Operational and support expenses $3,527 $3,156 11.8%
Depreciation and amortization $1,127 $1,074 4.9%
Adjusted:
Net Income $885 $818 8.2%
Earnings Per Share $.46 $.41 12.2%
Six Months Ended
6/30/99 6/30/98 % Change
Operational and support expenses $6,894 $6,085 13.3%
Depreciation and amortization $2,234 $2,117 5.5%
Adjusted:
Net Income $1,715 $1,614 6.3%
Earnings Per Share $.89 $.81 9.9%
<PAGE>
BellSouth Corporation
Consolidated Balance Sheets (unaudited)
(amounts in millions, except per share data)
June 30, December 31,
1999 1998
Assets
Current Assets:
Cash and cash equivalents $573 $3,003
Temporary cash investments 345 184
Accounts receivable-net of
allowance for uncollectibles
of $284 and $251 4,583 4,629
Material and supplies 476 431
Other current assets 497 459
Total Current Assets 6,474 8,706
Investments and Advances 6,267 2,861
Property, Plant and Equipment 59,925 57,974
Less: accumulated depreciation 35,609 34,034
Property, Plant and Equipment, net 24,316 23,940
Deferred Charges and Other Assets 1,176 1,028
Intangible Assets, net 3,283 2,875
Total Assets $41,516 $39,410
Liabilties and Shareholders' Equity
Current Liabilities:
Debt maturing within one year $7,693 $3,454
Accounts payable 2,030 2,219
Other current liabilities 3,916 3,477
Total Current Liabilities 13,639 9,150
Long-Term Debt 8,391 8,715
Noncurrent Liabilities
Deferred income taxes 2,662 2,512
Unamortized investment tax credits 147 167
Other noncurrent liabilities 2,723 2,756
Total Noncurrent Liabilities 5,532 5,435
Shareholders' Equity:
Common stock, $1 par value 2,020 2,020
Paid-in capital 6,766 6,766
Retained earnings 10,339 9,479
Accumulated other comprehensive income (178) (64)
Shares held in trust and treasury (4,687) (1,752)
Guarantee of ESOP debt (306) (339)
Total Shareholders' Equity 13,954 16,110
Total Liabilities and Shareholders' Equity $41,516 $39,410
<PAGE>
BellSouth Corporation
Consolidated Statements of Income ($ in millions) (unaudited)
Wireline Communications
Quarter Ended
6/30/99 6/30/98 % Change
Operating Revenues
Local service $2,712 $2,502 8.4%
Network access 1,187 1,160 2.3%
Long distance 153 177 (13.6%)
Other wireline 374 297 25.9%
Total Operating Revenues 4,426 4,136 7.0%
Operating Expenses
Operational and support expenses 2,186 2,121 3.1%
Depreciation and amortization 850 836 1.7%
Total Operating Expenses 3,036 2,957 2.7%
Operating Income 1,390 1,179 17.9%
Interest Expense 133 144 (7.6%)
Other Income, net - 2 N/M
Income Before Income Taxes 1,257 1,037 21.2%
Provision for Income Taxes 476 393 21.1%
Segment Net Income(1) $781 $644 21.3%
Six Months Ended
6/30/99 6/30/98 % Change
Operating Revenues
Local service $5,366 $4,916 9.2%
Network access 2,378 2,311 2.9%
Long distance 303 352 (13.9%)
Other wireline 702 577 21.7%
Total Operating Revenues 8,749 8,156 7.3%
Operating Expenses
Operational and support expenses 4,263 4,092 4.2%
Depreciation and amortization 1,683 1,662 1.3%
Total Operating Expenses 5,946 5,754 3.3%
Operating Income 2,803 2,402 16.7%
Interest Expense 268 277 (3.2%)
Other Income, net 1 4 N/M
Income Before Income Taxes 2,536 2,129 19.1%
Provision for Income Taxes 954 802 19.0%
Segment Net Income(1) $1,582 $1,327 19.2%
Selected Financial and Operating Data
Quarter Ended
6/30/99 6/30/98 % Change
(amounts in millions)
EBITDA $2,240 $2,015 11.2%
EBITDA margin 50.6% 48.7% +190bps
Convenience feature revenues $466 $390 19.5%
Access minutes of use 27,627 26,240 5.3%
Long distance messages 168 201 (16.4%)
Capital expenditures $1,166 $880 32.5%
Six Months Ended
6/30/99 6/30/98 % Change
(amounts in millions)
EBITDA $4,486 $4,064 10.4%
EBITDA margin 51.3% 49.8% +150bps
Convenience feature revenues $900 $747 20.5%
Access minutes of use 54,452 51,322 6.1%
Long distance messages 345 402 (14.2%)
Capital expenditures $2,255 $1,723 30.9%
As of
6/30/99 6/30/98 % Change
Debt ratio 48.5% 48.6% -10bps
Equivalent access lines in
service (thousands):
Switched access lines 24,370 23,660 3.0%
Access line equivalents 16,925 12,346 37.1%
Total equivalent access
lines in service 41,295 36,006 14.7%
Telephone employees 64,727 59,700 8.4%
Telephone employees per
10,000 switched access lines 26.6 25.2 5.6%
<PAGE>
BellSouth Corporation
Supplemental Operating Data (in thousands)
Wireline Communications - Network Access Lines In Service(a)
As of
6/30/99 6/30/98 % Change
Switched access lines
Residence 16,782 16,182 3.7%
Business 7,316 7,204 1.6%
Other 272 274 (0.7%)
Total switched access
lines in service 24,370 23,660 3.0%
Access line equivalents(b)(c)
Selected digital data
services:
Basic rate ISDN 202 157 28.7%
Primary rate ISDN 714 401 78.1%
DS0 489 421 16.2%
DS1 3,901 3,030 28.7%
DS3 & higher 11,619 8,337 39.4%
Total digital data lines
in service 16,925 12,346 37.1%
Total equivalent access lines
in service 41,295 36,006 14.7%
(a) Prior period operating data are often revised at later dates to
reflect updated information. The above information reflects the
latest data available for the periods indicated.
(b) Access line equivalents are derived by converting high capacity
data lines to the estimated capacity of one switched access line.
The conversion factors used are as follows: Basic rate ISDN=2.5
DS0s, Primary rate ISDN=24 DS0s, DS1=24 DS0s, DS3=672 DS0s,
OC3=2,016 DS0s, OC12=8,064 DS0s, OC24=16,128 DS0s and OC48=32,256
DS0s. Basic rate ISDN lines are included in our switched access
line count as equaling one line.
(c) Revenues associated with digital data lines are derived from the
sale of specific high-bandwidth products provisioned over
transmission lines with DS0 or greater capacity. While access
line equivalent counts have a directional relationship with
digital and data revenues, growth rates cannot be compared on an
equivalent basis.
<PAGE>
BellSouth Corporation
Consolidated Statements of Income ($ in millions) (unaudited)
Domestic Wireless(2)
Quarter Ended
6/30/99 6/30/98 % Change
Operating revenues $799 $674 18.5%
Segment net income(1) $78 $74 5.4%
Total assets $6,452 $5,879 9.7%
Six Months Ended
6/30/99 6/30/98 % Change
Operating revenues $1,547 $1,320 17.2%
Segment net income(1) $138 $143 (3.5%)
Proportionate Basis(3) - Selected Financial and Operating Data
Quarter Ended
6/30/99 6/30/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $761 $662 15.0%
Net income(5) $78 $79 (1.3%)
Operating cash flow(7) $296 $279 6.1%
Operating cash flow margin(8) 38.9% 42.1% -320bps
Customer net adds in period
(excluding ownership changes) 186 195 (4.6%)
Average monthly revenue per
customer(9) $51 $51 -
Six Months Ended
6/30/99 6/30/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $1,462 $1,312 11.4%
Net income(5) $141 $149 (5.4%)
Operating cash flow(7) $565 $546 3.5%
Operating cash flow margin(8) 38.6% 41.6% -300bps
Customer net adds in period
(excluding ownership changes) 399 325 22.8%
Average monthly revenue per
customer(9) $50 $52 (3.8%)
As of
6/30/99 6/30/98 % Change
Customers 5,155 4,529 13.8%
POPs 57,256 60,311 (5.1%)
Penetration rate(10) 9.3% 9.3% -
Property, plant and
equipment, gross $4,789 $4,505 6.3%
Normalized Financial and Operating Data
During the fourth quarter of 1998, we reorganized our Los Angeles and
Houston/Galveston cellular partnerships with AT&T. In the following
table, we have restated the prior period financial and operating data
to reflect this reorganization and provide more meaningful comparative
information for existing operations.
Quarter Ended
6/30/99 6/30/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $761 $638 19.3%
Customers 5,155 4,376 17.8%
POPs 57,256 58,033 (1.3%)
Penetration rate(10) 9.3% 9.4% -10bps
Six Months Ended
6/30/99 6/30/98 % Change
(amounts in millions)
Wireless revenues, net(4) $1,462 $1,262 15.8%
<PAGE>
BellSouth Corporation
Consolidated Statements of Income ($ in millions) (unaudited)
International Operations(2)
Quarter Ended
6/30/99 6/30/98 % Change
Operating revenues $565 $484 16.7%
Segment net income (loss)(1)(6) $50 ($22) N/M
Total assets $4,389 $4,715 (6.9%)
Six Months Ended
6/30/99 6/30/98 % Change
Operating revenues $1,126 $936 20.3%
Segment net income (loss)(1)(6) $30 ($27) N/M
Proportionate Basis(3) - Selected Financial and Operating Data
Quarter Ended
6/30/99 6/30/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $709 $472 50.2%
Net income (loss) (5)(6) $54 ($6) N/M
Operating cash flow(7) $215 $123 74.8%
Operating cash flow margin(8) 30.3% 26.1% +420bps
Customer net adds in period
(excluding ownership changes) 424 291 45.7%
Average monthly revenue per
customer(9) $51 $64 (20.3%)
Six Months Ended
6/30/99 6/30/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $1,414 $899 57.3%
Net income (loss) (5)(6) $46 $11 N/M
Operating cash flow(7) $388 $226 71.7%
Operating cash flow margin(8) 27.4% 25.1% +230bps
Customer net adds in period
(excluding ownership changes) 998 508 96.5%
Average monthly revenue per
customer(9) $53 $65 (18.5%)
As of
6/30/99 6/30/98 % Change
Wireless:
Customers 4,475 2,390 87.2%
POPs 127,407 100,766 26.4%
Penetration rate(10) 4.5% 3.0% +150bps
Property, plant and equipment,
gross $3,260 $2,335 39.6%
Normalized Financial and Operating Data
During 1998, we sold our interest in BellSouth New Zealand. In the
following table, we have excluded this operation from the prior period
financial and operating data to provide more meaningful comparative
information for existing operations.
Quarter Ended
6/30/99 6/30/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $709 $451 57.2%
Customers 4,475 2,317 93.1%
POPs 127,407 98,361 29.5%
Penetration rate(10) 4.5% 3.0% +150bps
Six Months Ended
6/30/99 6/30/98 % Change
(amounts in millions)
Wireless revenues, net(4) $1,414 $857 65.0%
<PAGE>
BellSouth Corporation
Supplemental Operating Data - International Customers
and POPs by Country
(Proportionate Basis(3) in thousands)
Customers
As of
Country Brand 6/30/99 6/30/98 % Change
Argentina Movicom 652 461 41.4%
Interior - - -
Brazil BCP (Sao Paulo) 437 59 N/M
BCP (Northeast) 103 - N/M
Chile BellSouth (Santiago) 262 151 73.5%
Ecuador BellSouth 132 53 149.1%
Nicaragua BellSouth 23 10 130.0%
Panama BSC de Panama 34 13 161.5%
Peru Tele2000 (Lima) 192 103 86.4%
Tele2000 (Interior) - - -
Uruguay Movicom 42 20 110.0%
Venezuela Telcel 1,221 537 127.4%
Subtotal Latin America 3,098 1,407 120.2%
Denmark Sonofon 393 273 44.0%
Germany e-plus 568 308 84.4%
India SkyCell 4 5 (20.0%)
Israel Cellcom 412 324 27.2%
New Zealand BellSouth - 73 N/M
Subtotal Europe
and Asia/Pacific 1,377 983 40.1%
Total International 4,475 2,390 87.2%
POPs
As of
Country Brand 6/30/99 6/30/98 % Change
Argentina Movicom 8,775 8,515 3.1%
Interior 14,690 - N/M
Brazil BCP (Sao Paulo) 8,049 7,374 9.2%
BCP (Northeast) 12,452 11,305 10.1%
Chile BellSouth (Santiago) 7,400 7,400 -
Ecuador BellSouth 10,996 7,462 47.4%
Nicaragua BellSouth 2,581 2,581 -
Panama BSC de Panama 1,135 1,135 -
Peru Tele2000 (Lima) 5,188 4,133 25.5%
Tele2000 (Interior) 12,600 10,037 25.5%
Uruguay Movicom 966 966 -
Venezuela Telcel 18,132 13,010 39.4%
Subtotal Latin America 102,964 73,918 39.3%
Denmark Sonofon 2,465 2,465 -
Germany e-plus 18,545 18,545 -
India SkyCell 1,348 1,348 -
Israel Cellcom 2,085 2,085 -
New Zealand BellSouth - 2,405 N/M
Subtotal Europe
and Asia/Pacific 24,443 26,848 (9.0%)
Total International 127,407 100,766 26.4%
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BellSouth Corporation
Consolidated Statements of Income ($ in millions) (unaudited)
Advertising and Publishing
Quarter Ended
6/30/99 6/30/98 % Change
Operating revenues $410 $392 4.6%
Segment net income(1) $98 $102 (3.9%)
Total assets $1,310 $1,117 17.3%
Six Months Ended
6/30/99 6/30/98 % Change
Operating revenues $756 $730 3.6%
Segment net income(1) $182 $188 (3.2%)
Selected Financial and Operating Data
Quarter Ended
6/30/99 6/30/98 % Change
EBITDA $169 $163 3.7%
EBITDA margin 41.2% 41.6% -40bps
Six Months Ended
6/30/99 6/30/98 % Change
EBITDA $315 $306 2.9%
EBITDA margin 41.7% 41.9% -20bps
Other
Quarter Ended
6/30/99 6/30/98 % Change
External revenues $73 $26 180.8%
Intersegment revenues $92 $53 73.6%
Total operating revenues $165 $79 108.9%
Segment net loss(1) ($59) ($31) (90.3%)
Total assets $1,333 $1,301 (2.5%)
Six Months Ended
6/30/99 6/30/98 % Change
External revenues $123 $44 179.5%
Intersegment revenues $162 $107 51.4%
Total operating revenues $285 $151 88.7%
Segment net loss(1) ($116) ($71) (63.4%)
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BellSouth Corporation
Notes
(1) Segment net income (loss) is based on normalized results which
exclude certain one-time transactions and certain corporate
intercompany billings. Intersegment revenues are not eliminated
for purposes of management reporting.
(2) Domestic wireless and international operations financial and
operating data are reported one month in arrears, except for
domestic wireless customers and POPs which are presented as of
quarter end.
(3) Proportionate basis financial and operating data reflect our
ownership interest in the total operating results for each of our
wireless properties, both domestic and international, whether or
not consolidated for financial statement presentation purposes.
Proportionate basis customers and POPs represent end of period
customers and estimated market population, respectively,
multiplied by our ownership interest in a licensee operating in
that market.
(4) Wireless revenues, net includes activation fees, access, airtime,
roaming (net), long distance, equipment sales, value added
services and other revenue. Proportionate domestic wireless
revenues have been adjusted to include the cost of equipment sold
to customers.
(5) Net income (loss) represents our proportionate interest in the
net income (loss) of the respective operations and does not
include gains (losses) from the sale of properties or development
expenses for markets prior to service initiation.
(6) International operations' year-to-date 1999 segment net income
(loss) and proportionate basis net income (loss) exclude $280
million in foreign exchange losses associated with the
devaluation of the Brazilian Real.
(7) Operating cash flow is defined as operating income plus
depreciation and amortization. While it represents our
proportionate interest in the operating entities' operating cash
flows, it does not necessarily represent cash available to us.
(8) Operating cash flow margin is calculated by dividing operating
cash flow by wireless revenues, net.
(9) Average monthly revenue per customer is calculated by dividing
average monthly revenue by average proportionate basis customers.
Average monthly revenue includes activation fees, access,
airtime, roaming (net), long distance and value added services.
(10) Penetration rate is calculated by dividing proportionate basis
customers by proportionate basis POPs (excludes POPs in markets
where service has not been initiated).
