FOR MORE INFORMATION FOR IMMEDIATE RELEASE
Pattie Kushner (404-249-2365) July 20, 2000
BellSouth Second Quarter EPS Increases 9.8%
Continued Strong Business Performance
in Data/Internet/E>Commerce, Wireless, International
ATLANTA - BellSouth Corporation (NYSE: BLS) reported second quarter earnings per
share (EPS) of 56 cents, an increase of 9.8 percent compared to 51 cents before
a special item in the second quarter of 1999.
Consolidated revenues were a quarterly record $6.8 billion and up 9.8 percent
over the same period in 1999. Growth continued to be driven by BellSouth's
rapidly evolving mix of data, wireless and international revenues.
"We continue to execute our strategies by giving our customers the high-tech
communications that are essential in the Internet economy," said Duane Ackerman,
chairman and chief executive officer. "Businesses require high-performing
networks to run their innovative applications. Consumers want BellSouth to
package digital TV and all of today's powerful services for them. We're putting
it all together for customers in all these fast-growing markets."
Data, Internet, E>Commerce
High-speed data services and e>commerce applications for business customers, as
well as Web hosting and Internet access, were the major factors driving
BellSouth data revenues of $869 million in the second quarter, a 26.9 percent
gain. In June alone, the company rolled out six new data products for larger
businesses. At the end of the quarter, BellSouth had 74,000 customers for DSL
and other high-speed access products and a total of 788,000 Internet service
subscribers. Equivalent access lines, which include broadband data services as
well as traditional switched lines, grew at a record annual rate of 20.8
percent.
<PAGE>
Domestic Wireless
Proportionate revenues of $877 million grew 17.4 percent compared to $747
million in the second quarter of 1999 (normalized for the sale of Honolulu
Cellular last August). At June 30, 2000 BellSouth served 5.9 million mobile
phone customers in the U.S. (proportionate basis). This is an annual growth rate
of 17.6 percent (normalized for Honolulu), up from 15.4 percent growth in the
first quarter of 2000. In May, BellSouth broke new ground in the wireless
industry when it introduced "Rollover Minutes," an innovative concept that
allows customers in special plans to keep unused minutes from month-to-month. In
addition, the company's digital one-rate plans and other value-priced packages
are driving increased usage and revenues. Average revenue per subscriber of $54
in the second quarter of 2000 increased 5.9 percent compared to $51 in the same
three months a year ago.
International
BellSouth added 790,000 international wireless customers in the second quarter
(proportionate basis), including a recent acquisition that expanded BellSouth's
operations in Brazil, driving an annual growth rate of 70.6 percent. Second
quarter proportionate revenues climbed 17.6 percent, to $834 million in 2000
from $709 million in the same quarter of the previous year. With operations
concentrated in Latin America and Europe, BellSouth's businesses now cover a
total population overseas of more than 303 million and serve 16.2 million total
wireless customers (7.6 million on a proportionate basis). In May and June,
BellSouth announced two related transactions that will give its newest Latin
American company, Celumovil, the first national cellular footprint in Colombia.
Calling Features and Packages
Calling feature revenues were $532 million in the second quarter of 2000, an
11.5 percent increase compared to $477 million in the same three months of 1999.
The BellSouth(r) Complete Choice(r) Plan family of services is now used by
nearly three in 10 residential customers. Complete Choice packages basic service
with any or all of some two dozen calling features such as Caller ID and Call
Waiting Deluxe. Caller ID now is activated on more than 7.5 million BellSouth
residential lines. Newer products such as Privacy Director also contributed to
the second quarter gains.
<PAGE>
Additional Financial Highlights
BellSouth's consolidated revenues of $6.8 billion in the second quarter of 2000
increased 9.8 percent. The second quarter of the previous year included a
non-cash charge of $320 million related to the impairment of wireless assets.
Not including this special item, consolidated expenses of $4.8 billion in the
second quarter of 2000 increased 6.4 percent and net income of $1.1 billion
increased 9.4 percent. Net income in the three months ended June 30, 1999 was
$973 million before the special item, and $786 million as reported (41 cents per
share).
BellSouth is a $26 billion communications services company. It provides
telecommunications services, Internet, data and e>commerce applications,
wireless communications, cable and digital TV, and online and directory
advertising to more than 40 million customers in 18 countries worldwide.
Access BellSouth's computer viewable and downloadable earnings commentary and
financial statements at www.bellsouth.com/investor.
<PAGE>
BellSouth Corporation
Consolidated Statements of Income (unaudited)
(amounts in millions, except per share data)
Quarter Ended
6/30/00 6/30/99 % Change
Operating Revenues
Wireline communications
Local service $2,862 $2,712 5.5%
Network access 1,245 1,187 4.9%
Long distance 131 153 (14.4%)
Other wireline 357 255 40.0%
Total wireline communications 4,595 4,307 6.7%
Domestic wireless 919 796 15.5%
International operations 658 565 16.5%
Advertising and publishing 471 407 15.7%
Other 109 73 49.3%
Total Operating Revenues 6,752 6,148 9.8%
Operating Expenses
Operational and support expenses 3,565 3,359 6.1%
Depreciation and amortization 1,240 1,155 7.4%
Severance accrual - - N/M
Loss on asset impairment - 320 N/M
Total Operating Expenses 4,805 4,834 (0.6%)
Operating Income 1,947 1,314 48.2%
Interest Expense 332 245 35.5%
Other Income (Expense), net 68 187 N/M
Income Before Income Taxes 1,683 1,256 34.0%
Provision for Income Taxes 619 470 31.7%
Net Income $1,064 $786 35.4%
Diluted:
Weighted Average Common
Shares Outstanding 1,900 1,909 (0.5%)
Earnings Per Share $0.56 $0.41 36.6%
Six Months Ended
6/30/00 6/30/99 % Change
Operating Revenues
Wireline communications
Local service $5,683 $5,366 5.9%
Network access 2,508 2,378 5.5%
Long distance 266 303 (12.2%)
Other wireline 642 535 20.0%
Total wireline communications 9,099 8,582 6.0%
Domestic wireless 1,772 1,540 15.1%
International operations 1,322 1,126 17.4%
Advertising and publishing 835 750 11.3%
Other 211 123 71.5%
Total Operating Revenues 13,239 12,121 9.2%
Operating Expenses
Operational and support expenses 7,133 6,612 7.9%
Depreciation and amortization 2,458 2,268 8.4%
Severance accrual 78 - N/M
Loss on asset impairment - 320 N/M
Total Operating Expenses 9,669 9,200 5.1%
Operating Income 3,570 2,921 22.2%
Interest Expense 638 471 35.5%
Other Income (Expense), net 282 (20) N/M
Income Before Income Taxes 3,214 2,430 32.3%
Provision for Income Taxes 1,149 1,029 11.7%
Net Income $2,065 $1,401 47.4%
Diluted:
Weighted Average Common
Shares Outstanding 1,899 1,930 (1.6%)
Earnings Per Share $1.09 $0.73 49.3%
Selected Financial and Operating Data
Quarter Ended
6/30/00 6/30/99 % Change
EBITDA $3,187 $2,789 14.3%
EBITDA margin 47.2% 45.4% +180bps
Return on average equity (annualized) 26.2% 22.5% +370bps
Return on average total capital (annualized) 16.5% 13.9% +260bps
Digital and data revenues $869 $685 26.9%
Dividends per share $0.19 $0.19 0.0%
Capital expenditures $1,705 $1,498 13.8%
Six Months Ended
6/30/00 6/30/99 % Change
EBITDA $6,106 $5,509 10.8%
EBITDA margin 46.1% 45.5% +60bps
Return on average equity (annualized) 26.3% 19.1% +720bps
Return on average total capital (annualized) 16.2% 12.6% +360bps
Digital and data revenues $1,680 $1,306 28.6%
Dividends per share $0.38 $0.38 0.0%
Capital expenditures $3,268 $2,885 13.3%
As of
6/30/00 6/30/99 % Change
Common shares outstanding 1,879 1,885 (0.3%)
Book value per share $8.78 $7.40 18.6%
Debt ratio 50.6% 53.8% -320bps
Total employees 99,027 94,998 4.2%
<PAGE>
BellSouth Corporation
Normalized Earnings Summary (unaudited)
(amounts in millions, except per share data)
Quarter Ended
6/30/00 6/30/99 % Change
Reported Net Income $1,064 $786 35.4%
Gain on E-Plus restructuring (a) - - -
Severance accrual (b) - - -
Loss on asset impairment (c) - 187 N/M
Foreign currency loss(d) - - -
Normalized Net Income $1,064 $973 9.4%
Reported Diluted Earnings Per Share $0.56 $0.41 36.6%
Gain on E-Plus restructuring (a) - - -
Severance accrual (b) - - -
Loss on asset impairment (c) - 0.10 N/M
Foreign currency loss(d) - - -
Normalized Diluted Earnings Per Share (e) $0.56 $0.51 9.8%
Normalized return on
average equity (annualized) 26.2% 27.8% -160bps
Normalized return on
average total capital (annualized) 16.5% 16.5% -
Six Months Ended
6/30/00 6/30/99 % Change
Reported Net Income $2,065 $1,401 47.4%
Gain on E-Plus restructuring (a) (68) - N/M
Severance accrual (b) 48 N/M
Loss on asset impairment (c) - 187 N/M
Foreign currency loss(d) - 280 N/M
Normalized Net Income $2,045 $1,868 9.5%
Reported Diluted Earnings Per Share $1.09 $0.73 49.3%
Gain on E-Plus restructuring (a) (0.04) - N/M
Severance accrual (b) 0.03 N/M
Loss on asset impairment (c) - 0.10 N/M
Foreign currency loss(d) - 0.15 N/M
Normalized Diluted Earnings Per Share (e) $1.08 $0.97 11.3%
Normalized return on
average equity (annualized) 26.0% 25.5% +50bps
Normalized return on
average total capital (annualized) 16.0% 15.9% +10bps
(a) Represents income related to the restructuring of our ownership interest in
German wireless operator E-Plus.
(b) Represents expense recorded as a result of our previously announced plan to
reduce our domestic workforce.
(c) Represents the after-tax loss recorded in second quarter 1999 associated
with the write-down of equipment that is being replaced as we continue to
upgrade our U.S. wireless network.
(d) 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.
(e) 1999 year-to-date normalized diluted earnings per share do not sum due to
rounding.
<PAGE>
BellSouth Corporation
Consolidated Balance Sheets (unaudited)
(amounts in millions, except per share data)
June 30, December 31,
2000 1999
Assets
Current Assets:
Cash and cash equivalents $1,520 $1,287
Temporary cash investments 27 105
Accounts receivable--net
of allowance for uncollectibles
of $316 and $312 5,014 5,177
Material and supplies 468 451
Other current assets 590 367
Total Current Assets 7,619 7,387
Investments and Advances 7,456 6,097
Property, Plant and Equipment, net 25,297 24,631
Deferred Charges and Other Assets 1,717 1,564
Intangible Assets, net 4,023 3,774
Total Assets $46,112 $43,453
Liabilities and Shareholders' Equity
Current Liabilities:
Debt maturing within one year $6,108 $7,653
Accounts payable 2,100 1,961
Other current liabilities 4,234 3,781
Total Current Liabilities 12,442 13,395
Long-Term Debt 10,869 9,113
Noncurrent Liabilities:
Deferred income taxes 2,963 2,705
Unamortized investment tax credits 106 126
Other noncurrent liabilities 3,230 3,299
Total Noncurrent Liabilities 6,299 6,130
Shareholders' Equity:
Common stock, $1 par value 2,020 2,020
Paid-in capital 6,775 6,771
Retained earnings 12,746 11,456
Accumulated other comprehensive income (5) (358)
Shares held in trust and treasury (4,832) (4,798)
Guarantee of ESOP debt (202) (276)
Total Shareholders' Equity 16,502 14,815
Total Liabilities and Shareholders' Equity $46,112 $43,453
================================================================================
BellSouth Corporation
Consolidated Statements of Income (amounts in millions) (unaudited)
Wireline Communications
Quarter Ended
6/30/00 6/30/99 % Change
Operating Revenues
Local service $2,862 $2,712 5.5%
Network access 1,245 1,187 4.9%
Long distance 131 153 (14.4%)
Other wireline 443 374 18.4%
Total Operating Revenues 4,681 4,426 5.8%
Operating Expenses
Operational and support expenses 2,188 2,186 0.1%
Depreciation and amortization 904 850 6.4%
Total Operating Expenses 3,092 3,036 1.8%
Operating Income 1,589 1,390 14.3%
Interest Expense 176 133 32.3%
Other Income, net 4 - N/M
Income Before Income Taxes 1,417 1,257 12.7%
Provision for Income Taxes 509 476 6.9%
Segment Net Income(1) $908 $781 16.3%
Six Months Ended
6/30/00 6/30/99 % Change
Operating Revenues
Local service $5,683 $5,366 5.9%
Network access 2,508 2,378 5.5%
Long distance 266 303 (12.2%)
Other wireline 800 702 14.0%
Total Operating Revenues 9,257 8,749 5.8%
Operating Expenses
Operational and support expenses 4,331 4,263 1.6%
Depreciation and amortization 1,785 1,683 6.1%
Total Operating Expenses 6,116 5,946 2.9%
Operating Income 3,141 2,803 12.1%
Interest Expense 338 268 26.1%
Other Income, net 10 1 N/M
Income Before Income Taxes 2,813 2,536 10.9%
Provision for Income Taxes 1,042 954 9.2%
Segment Net Income(1) $1,771 $1,582 11.9%
Selected Financial and Operating Data
Quarter Ended
6/30/00 6/30/99 % Change
(amounts in millions)
EBITDA $2,493 $2,240 11.3%
EBITDA margin 53.3% 50.6% +270bps
Convenience feature revenues $532 $477 11.5%
Access minutes of use 28,798 27,627 4.2%
Long distance messages 129 168 (23.2%)
Capital expenditures $1,248 $1,166 7.0%
Six Months Ended
6/30/00 6/30/99 % Change
(amounts in millions)
EBITDA $4,926 $4,486 9.8%
EBITDA margin 53.2% 51.3% +190bps
Convenience feature revenues $1,047 $921 13.7%
Access minutes of use 57,514 54,452 5.6%
Long distance messages 265 345 (23.2%)
Capital expenditures $2,425 $2,255 7.5%
As of
6/30/00 6/30/99 % Change
Debt ratio 53.2% 48.5% +470bps
Equivalent access lines
in service (thousands):
Switched access lines 24,647 24,370 1.1%
Access line equivalents 23,649 15,605 51.5%
Total equivalent access lines
in service 48,296 39,975 20.8%
Telephone employees 65,590 64,727 1.3%
<PAGE>
BellSouth Corporation
Supplemental Operating Data (in thousands)
Wireline Communications - Network Access Lines In Service(a)
As of
6/30/00 6/30/99 % Change
Switched access lines
Residence 17,189 16,782 2.4%
Business 7,198 7,316 (1.6%)
Other 260 272 (4.4%)
Total switched access
lines in service 24,647 24,370 1.1%
Access line equivalents(b)
Selected digital data services:
Basic rate ISDN 231 202 14.4%
Primary rate ISDN 1,049 714 46.9%
DS0 1,030 517 99.2%
DS1 5,009 3,911 28.1%
DS3 & higher 16,330 10,261 59.1%
Total digital data
lines in service 23,649 15,605 51.5%
Total equivalent access
lines in service 48,296 39,975 20.8%
(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 represent a conversion of non-switched data
circuits to a switched access line basis and is presented for comparability
purposes. Equivalents are calculated by converting high-speed/high-capacity
circuits to the equivalent of a switched access line based on transport
capacity. While the revenues generated by access line equivalents have a
directional relationship with these counts, growth rates cannot be compared
on an equivalent basis.
<PAGE>
BellSouth Corporation
Consolidated Statements of Income (amounts in millions) (unaudited)
Domestic Wireless(2)
Quarter Ended
6/30/00 6/30/99 % Change
Operating revenues $923 $799 15.5%
Segment net income(1) $127 $71 78.9%
Total assets $5,978 $6,452 (7.3%)
Six Months Ended
6/30/00 6/30/99 % Change
Operating revenues $1,780 $1,547 15.1%
Segment net income(1) $187 $131 42.7%
Proportionate Basis(3) - Selected Financial and Operating Data
Quarter Ended
6/30/00 6/30/99 % Change
(amounts in millions,
except customer data in thousands)
Wireless revenues, net(4) $877 $761 15.2%
Net income(5) $127 $69 84.1%
Operating cash flow(7) $378 $296 27.7%
Operating cash flow margin(8) 43.1% 38.9% +420bps
Customer net adds in period
(excluding ownership changes) 280 146 91.8%
Average monthly revenue per customer(9) $54 $51 5.9%
Six Months Ended
6/30/00 6/30/99 % Change
(amounts in millions,
except customer data in thousands)
Wireless revenues, net(4) $1,669 $1,462 14.2%
Net income(5) $187 $132 41.7%
Operating cash flow(7) $668 $565 18.2%
Operating cash flow margin(8) 40.0% 38.6% +140bps
Customer net adds in period
(excluding ownership changes) 570 353 61.5%
Average monthly revenue per customer(9) $53 $50 6.0%
As of
6/30/00 6/30/99 % Change
Customers 5,913 5,155 14.7%
POPs 59,394 57,256 3.7%
Penetration rate(10) 10.2% 9.3% +90bps
Property, plant and equipment, gross $4,845 $4,484 8.1%
Normalized Financial and Operating Data
During the third quarter of 1999, we sold our Honolulu Cellular Operations. In
the following table, we have restated the prior period financial and operating
data to reflect these changes and provide more meaningful comparative
information for existing operations.
Quarter Ended
6/30/00 6/30/99 % Change
(amounts in millions,
except customer data in thousands)
Wireless revenues, net(4) $877 $747 17.4%
Customers 5,913 5,029 17.6%
POPs 59,394 56,384 5.3%
Penetration rate(10) 10.2% 9.2% +100bps
Six Months Ended
6/30/00 6/30/99 % Change
(amounts in millions,
except customer data in thousands)
Wireless revenues, net(4) $1,669 $1,435 16.3%
<PAGE>
BellSouth Corporation
Consolidated Statements of Income (amounts in millions) (unaudited)
International Operations(2)
Quarter Ended
6/30/00 6/30/99 % Change
Operating revenues $668 $565 18.2%
Segment net income (loss)(1) ($18) $50 N/M
Total assets $5,756 $4,389 31.1%
Six Months Ended
6/30/00 6/30/99 % Change
Operating revenues $1,343 $1,126 19.3%
Segment net income (loss)(1) ($4) $30 N/M
Proportionate Basis(3) - Selected Financial and Operating Data
Quarter Ended
6/30/00 6/30/99 % Change
(amounts in millions,
except customer data in thousands)
Wireless revenues, net(4) $834 $709 17.6%
Net income (5) ($5) $54 N/M
Operating cash flow(7) $249 $215 15.8%
Operating cash flow margin(8) 29.9% 30.3% -40bps
Customer net adds in period
(excluding ownership changes) 622 424 46.7%
Average monthly revenue per customer(9) $35 $51 (31.4%)
Six Months Ended
6/30/00 6/30/99 % Change
(amounts in millions,
except customer data in thousands)
Wireless revenues, net(4) $1,678 $1,414 18.7%
Net income (5) $16 $46 (65.2%)
Operating cash flow(7) $441 $388 13.7%
Operating cash flow margin(8) 26.3% 27.4% -110bps
Customer net adds in period
(excluding ownership changes) 1,609 998 61.2%
Average monthly revenue per customer(9) $37 $53 (30.2%)
As of
6/30/00 6/30/99 % Change
Wireless:
Customers 7,634 4,475 70.6%
POPs 153,635 127,407 20.6%
Penetration rate(10) 5.2% 4.5% +70bps
Property, plant and equipment, gross $3,939 $3,260 20.8%
<PAGE>
BellSouth Corporation
Supplemental Operating Data - International Customers and POPs by Country
(Proportionate Basis(3) in thousands)
Customers As of
Country Brand 6/30/00 6/30/99 % Change
Argentina Movicom 911 652 39.7%
Interior 9 - N/M
Brazil BCP (Sao Paulo) 647 437 48.1%
BCP (Northeast) 342 103 232.0%
TCO (6) 168 - N/M
Chile BellSouth (Santiago) 426 262 62.6%
BellSouth (Interior) 56 - N/M
Ecuador BellSouth 179 132 35.6%
Nicaragua BellSouth 53 23 130.4%
Panama BSC de Panama 69 34 102.9%
Peru Tele2000 (Lima) 316 192 64.6%
Tele2000 (Interior) 21 - N/M
Uruguay Movicom 64 42 52.4%
Venezuela Telcel 2,406 1,221 97.1%
Guatemala Guatemala - - -
Subtotal Latin America 5,667 3,098 82.9%
Denmark Sonofon 320 393 (18.6%)
Germany e-plus 1,080 568 90.1%
India SkyCell 7 4 75.0%
Israel Cellcom 560 412 35.9%
Subtotal Europe and Asia/Pacific 1,967 1,377 42.8%
Total International 7,634 4,475 70.6%
POPs As of
Country Brand 6/30/00 6/30/99 % Change
Argentina Movicom 8,710 8,775 (0.7%)
Interior 14,560 14,690 (0.9%)
Brazil BCP (Sao Paulo) 8,049 8,049 -
BCP (Northeast) 12,452 12,452 -
TCO (6) 4,733 - N/M
Chile BellSouth (Santiago) 7,500 7,400 1.4%
BellSouth (Interior) 7,600 - N/M
Ecuador BellSouth 11,086 10,996 0.8%
Nicaragua BellSouth 2,581 2,581 -
Panama BSC de Panama 1,223 1,135 7.8%
Peru Tele2000 (Lima) 7,069 5,188 36.3%
Tele2000 (Interior) 17,334 12,600 37.6%
Uruguay Movicom 966 966 -
Venezuela Telcel 18,132 18,132 -
Guatemala Guatemala 7,140 - N/M
Subtotal Latin America 129,135 102,964 25.4%
Denmark Sonofon 2,465 2,465 -
Germany e-plus 18,568 18,545 0.1%
India SkyCell 1,348 1,348 -
Israel Cellcom 2,119 2,085 1.6%
Subtotal Europe and Asia/Pacific 24,500 24,443 0.2%
Total International 153,635 127,407 20.6%
<PAGE>
BellSouth Corporation
Consolidated Statements of Income (amounts in millions) (unaudited)
Advertising and Publishing
Quarter Ended
6/30/00 6/30/99 % Change
Operating revenues $477 $410 16.3%
Segment net income(1) $125 $98 27.6%
Total assets $1,579 $1,310 20.5%
Six Months Ended
6/30/00 6/30/99 % Change
Operating revenues $846 $756 11.9%
Segment net income(1) $215 $182 18.1%
Selected Financial and Operating Data
Quarter Ended
6/30/00 6/30/99 % Change
EBITDA $208 $169 23.1%
EBITDA margin 43.6% 41.2% +240bps
Six Months Ended
6/30/00 6/30/99 % Change
EBITDA $363 $315 15.2%
EBITDA margin 42.9% 41.7% +120bps
Other
Quarter Ended
6/30/00 6/30/99 % Change
Operating revenues $209 $165 26.7%
Segment net loss(1) ($54) ($59) 8.5%
Total assets $1,486 $1,333 11.5%
Six Months Ended
6/30/00 6/30/99 % Change
Operating revenues $399 $285 40.0%
Segment net loss(1) ($93) ($116) 19.8%
<PAGE>
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) TCO represents a new investment acquired in May, 2000. This investment is
accounted for under the cost method; therefore, it has no impact on
operating results.
(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).
