Unaudited Pro Forma Condensed Financial Statements
BellSouth Corporation
The unaudited pro forma condensed financial statements and notes thereto are
presented for purposes of displaying the effect of the wireless joint venture on
the financial statements of BellSouth assuming the joint venture had been
consummated on the dates indicated and for the periods presented. The unaudited
pro forma condensed balance sheets reflect the historical balance sheets of
BellSouth and its domestic wireless operations at June 30, 2000 and December 31,
1999. The unaudited pro forma condensed statements of income reflect the
historical operating results of BellSouth and its domestic wireless operations
for the six months ended June 30, 2000 and the years ended December 31, 1999.
The unaudited pro forma condensed statements of income assume that BellSouth's
40% equity in net income from the joint venture would be materially the same as
its historical earnings from its domestic wireless operations.
The unaudited pro forma condensed financial statements are not necessarily
indicative of the results of operations or financial position that actually
would have occurred had the joint venture been consummated on the dates
indicated or that may be obtained in the future. The information set forth in
the unaudited pro forma condensed financial statements should be read in
conjunction with the historical consolidated financial statements and notes
thereto and other information included in (a) BellSouth's 1999 Annual Report on
Form 10-K and (b) BellSouth's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2000.
<PAGE>
<TABLE>
<CAPTION>
BellSouth Corporation
Unaudited Pro Forma Condensed Statement of Income
For the Six Months Ended June 30, 2000
<S> <C> <C> <C>
Historical Pro Forma BellSouth
BellSouth Adjustments Pro Forma
------------ ------------- ------------
(in millions, except per share data)
Total operating revenues $ 13,239 $ (1,881) $ 11,358
Total operating expenses 9,669 (1,576) 8,093
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Operating Income 3,570 (305) 3,265
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Interest Expense 638 (53) 585
Net earnings (losses) of
equity affiliates 153 101 2b 254
Other income (expense) - net 129 151 280
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Income Before Income Taxes 3,214 - 3,214
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Income taxes 1,149 - 1,149
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Net Income $ 2,065 $ - $ 2,065
===========================================================================
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Weighted-average
common shares outstanding:
Basic 1,881 - 1,881
Diluted 1,899 - 1,899
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Earnings Per Share:
Basic $ 1.10 - $ 1.10
Diluted $ 1.09 - $ 1.09
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Dividends declared per common share $ 0.19 - $ 0.19
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<FN>
The accompanying notes are an integral part of these unaudited pro forma
condensed financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BellSouth Corporation
Unaudited Pro Forma Condensed Statement of Income
For the Year Ended December 31, 1999
<S> <C> <C> <C>
Historical Pro Forma BellSouth
BellSouth Adjustments Pro Forma
------------ ------------- ------------
(in millions, except per share data)
Total operating revenues $ 25,224 $ (3,134) $ 22,090
Total operating expenses 18,787 (3,261) 15,526
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Operating Income 6,437 127 6,564
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Interest Expense 1,030 (91) 939
Net earnings (losses) of
equity affiliates (169) (297) 2b (466)
Other income (expense) - net 195 79 274
Gain on sale of operations 55 - 55
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Income Before Income Taxes 5,488 - 5,488
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Income taxes 2,040 - 2,040
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Net Income $ 3,448 $ - $ 3,448
===========================================================================
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Weighted-average
common shares outstanding:
Basic 1,898 - 1,898
Diluted 1,916 - 1,916
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Earnings Per Share:
Basic $ 1.82 - $ 1.82
Diluted $ 1.80 - $ 1.80
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Dividends declared per common share $ 0.76 - $ 0.76
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<FN>
The accompanying notes are an integral part of these unaudited pro forma
condensed financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BellSouth Corporation
Unaudited Pro Forma Condensed Balance Sheet
As of June 30, 2000
<S> <C> <C> <C>
Historical Pro Forma BellSouth
BellSouth Adjustments Pro Forma
------------ -------------- -----------
(in millions)
Assets
Current Assets
Cash and cash equivalents $ 1,547 $ (43) $ 1,504
Accounts receivable - net 4,990 (475) 4,515
Other current assets 1,058 919 2d 1,977
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Total current assets 7,595 401 7,996
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Property, Plant and Equipment - Net 25,297 (2,532) 22,765
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Intangible Assets - Net 4,023 (2,088) 1,935
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Investments and advances 7,456 2,018 2c,2d 9,474
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Other Assets 1,717 (56) 1,661
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Total Assets $ 46,088 $ (2,257) $ 43,831
===========================================================================
Liabilities and Shareholders' Equity
Current Liabilities
Debt maturing within one year $ 6,108 $ (3) $ 6,105
Other current liabilities 6,310 (848) 5,462
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Total current liabilities 12,418 (851) 11,567
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Long-Term Debt 10,869 (401) 10,468
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Other noncurrent liabilities 6,299 (1,005) 5,294
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Shareholders' Equity 16,502 - 16,502
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Total Liabilities and
Shareholders' Equity $ 46,088 $ (2,257) $ 43,831
===========================================================================
<FN>
The accompanying notes are an integral part of these unaudited pro forma
condensed financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BellSouth Corporation
Unaudited Pro Forma Condensed Balance Sheet
As of December 31, 1999
<S> <C> <C> <C>
Historical Pro Forma BellSouth
BellSouth Adjustments Pro Forma
------------ -------------- -----------
(in millions)
Assets
Current Assets
Cash and cash equivalents $ 1,392 $ (11) $ 1,381
Accounts receivable - net 5,177 (431) 4,746
Other current assets 818 467 2d 1,285
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Total current assets 7,387 25 7,412
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Property, Plant and Equipment - Net 24,631 (2,358) 22,273
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Intangible Assets - Net 3,774 (1,558) 2,216
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Investments and advances 6,097 1,646 2c,2d 7,743
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Other Assets 1,564 (19) 1,545
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Total Assets $ 43,453 $ (2,264) $ 41,189
===========================================================================
Liabilities and Shareholders' Equity
Current Liabilities
Debt maturing within one year $ 7,653 $ (3) $ 7,650
Other current liabilities 5,742 (714) 5,028
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Total current liabilities 13,395 (717) 12,678
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Long-Term Debt 9,113 (401) 8,712
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Other noncurrent liabilities 6,130 (1,146) 4,984
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Shareholders' Equity 14,815 - 14,815
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Total Liabilities and
Shareholders' Equity $ 43,453 $ (2,264) $ 41,189
===========================================================================
<FN>
The accompanying notes are an integral part of these unaudited pro forma
condensed financial statements.
</FN>
</TABLE>
<PAGE>
BellSouth Corporation
Notes To Unaudited Pro Forma Condensed Financial Statements
Note 1 - Basis of Presentation
The accompanying unaudited pro forma condensed financial statements include the
historical consolidated financial statements of BellSouth Corporation
(BellSouth) and are intended to reflect the impact on BellSouth's historical
financial statements resulting from BellSouth's contribution of certain domestic
wireless operations to a new wireless joint venture with SBC Communications
(SBC). In April 2000, BellSouth and SBC announced an agreement to combine their
domestic wireless operations. Ownership in the new company will be 40% for
BellSouth and 60% for SBC with control shared equally. BellSouth expects to
account for its interest under the equity method of accounting. BellSouth
expects that the basis of its investment will be approximately the same as the
book value of the operations which were contributed to the joint venture. The
new wireless company will be managed independently with a four-seat board of
directors (two seats from each company).
The accompanying unaudited pro forma condensed financial statements reflect the
joint venture as if it had been in effect on January 1, 2000, and 1999. The
unaudited pro forma condensed statements of income assume that BellSouth's 40%
equity in net income from the joint venture would be materially the same as the
historical earnings from the wireless operations which were contributed to the
joint venture. The unaudited pro forma condensed financial statements are not
necessarily indicative of the results of operations or financial position that
actually would have occurred had the joint venture been consummated on the dates
indicated or that may be obtained in the future. The results for the interim
period are not necessarily indicative of results for the full year. The
information set forth in the unaudited pro forma condensed financial statements
should be read in conjunction with the historical consolidated financial
statements and notes thereto and other information included in (a) BellSouth's
1999 Annual Report on Form 10-K, and (b) BellSouth's Quarterly Report on Form
10-Q for the quarter ended June 30, 2000.
Note 2 - Pro Forma Adjustments
a. The pro forma adjustments for total revenues, expenses, and other
income include amounts representing charges between the BellSouth
parent and the wireless operations being contributed to the joint
venture. Such amounts were eliminated in BellSouth's historical
consolidated financial statements.
b. Net earnings (losses) of equity affiliates - the net income earned
from the joint venture is assumed to be the same as the historical
pre-tax earnings from the operations which BellSouth contributed to
the joint venture.
c. Investments and advances - BellSouth's investment in the joint venture
is assumed to be the same as BellSouth's historical domestic wireless
assets.
d. Other current assets/Investments and advances - The intercompany
borrowings that BellSouth's domestic wireless operations owe to the
BellSouth parent company will become a receivable from the joint
venture.
