<PAGE>
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EXHIBIT 99A
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
or
[_] Transition Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the transition period from Commission file number
_______ to _______ 1-8607
BellSouth Retirement Savings Plan
BellSouth Corporation
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
Table of Contents
<TABLE>
<CAPTION>
Item Page
---- ----
<S> <C>
1. Financial Statements
Report of Independent Accountants....................................... 2
Consent of Independent Accountants...................................... 3
Statement of Net Assets Available for Benefits, With Fund
Information as of December 31, 1999.................................... 4
Statement of Net Assets Available for Benefits, With Fund
Information as of December 31, 1998.................................... 6
Statement of Changes in Net Assets Available for Benefits, With Fund
Information for the Year ended December 31, 1999....................... 8
Statement of Changes in Net Assets Available for Benefits, With Fund
Information for the Year ended December 31, 1998....................... 10
Statement of Changes in Net Assets Available for Benefits, With Fund
Information for the Year ended December 31, 1997....................... 12
Notes to Financial Statements........................................... 14
2. Supplemental Schedule
H4(i)--Schedule of Assets Held for Investment Purposes.................. S-1
</TABLE>
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Plan Administrator of
the BellSouth Retirement Savings Plan:
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of the BellSouth Retirement Savings Plan (the "Plan") at December
31, 1999 and 1998, and the changes in net assets available for benefits for
each of the three years in the period ended December 31, 1999 in conformity
with accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets
Held for Investment Purposes is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The Fund Information in the statements of net assets
available for benefits and the statements of changes in net assets available
for benefits is presented for purposes of additional analysis rather than to
present the net assets available for benefits and changes in net assets
available for benefits of each fund. The supplemental schedule and Fund
Information have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
PricewaterhouseCoopers LLP
Atlanta, Georgia
June 26, 2000
2
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-38264) of BellSouth Corporation of our report
dated June 26, 2000 relating to the financial statements of the BellSouth
Retirement Savings Plan, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Atlanta, Georgia
June 26, 2000
3
<PAGE>
BELLSOUTH RETIRE
STATEMENT OF NET ASSETS AVAILABLE
December
(In Tho
<TABLE>
<CAPTION>
Vanguard
Index Fidelity
BellSouth Indexed Interest Trust Growth
Stock Stock Income Growth & Income Balanced
Fund Fund Fund Portfolio Portfolio Fund
ASSETS ---------- ---------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Share of Trust net as-
sets................... $2,043,032 $1,249,328 $942,806 $250,596 $191,653 $113,737
Investment in BellSouth
Retirement Savings
Employee Stock Owner-
ship Plan Trust:
Shares of BellSouth
common stock allocated
to participants....... -- -- -- -- -- --
Shares of BellSouth
common stock held for
future allocation..... -- -- -- -- -- --
Temporary cash invest-
ments................. -- -- -- -- -- --
---------- ---------- -------- -------- -------- --------
Total Investments..... 2,043,032 1,249,328 942,806 250,596 191,653 113,737
Contributions receiv-
able................... 1,965 1,414 673 583 498 195
Fund, BellSouth Savings
and Security Plan and
other transfers
receivable--net........ -- 424 -- 319 -- --
---------- ---------- -------- -------- -------- --------
Total Assets.......... 2,044,997 1,251,166 943,479 251,498 192,151 113,932
---------- ---------- -------- -------- -------- --------
LIABILITIES
Distributions payable... 703 603 100 33 21 27
Fund, BellSouth Savings
and Security Plan and
other transfers
payable--net........... 143 -- 702 -- 389 485
Notes payable........... -- -- -- -- -- --
---------- ---------- -------- -------- -------- --------
Total Liabilities..... 846 603 802 33 410 512
---------- ---------- -------- -------- -------- --------
Net Assets Available for
Benefits............... $2,044,151 $1,250,563 $942,677 $251,465 $191,741 $113,420
========== ========== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integ
4
<PAGE>
MENT SAVINGS PLAN
FOR BENEFITS, WITH FUND INFORMATION
31, 1999
usands)
<TABLE>
<CAPTION>
T. Rowe Personal DFA U.S. Employee Stock
Price DFA U.S. Choice DFA Large Cap Ownership Plan
Bond Mid-Cap 6-10 Value Retirement- International Value II Participant ----------------------
Fund Growth Portfolio II Account Value II Fund Fund Loans Other Allocated Unallocated Total
------- ------- ------------ ----------- ------------- --------- ----------- ------ ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$97,496 $78,505 $62,984 $41,515 $39,662 $28,003 $67,106 $1,677 $ -- $ -- $5,208,100
-- -- -- -- -- -- -- -- 1,288,767 -- 1,288,767
-- -- -- -- -- -- -- -- -- 643,593 643,593
-- -- -- -- -- -- -- -- 2,040 13,858 15,898
------- ------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
97,496 78,505 62,984 41,515 39,662 28,003 67,106 1,677 1,290,807 657,451 7,156,358
114 219 140 -- 84 85 -- -- -- -- 5,970
-- 144 343 2,311 486 277 247 -- -- -- 4,551
------- ------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
97,610 78,868 63,467 43,826 40,232 28,365 67,353 1,677 1,290,807 657,451 7,166,879
------- ------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
7 13 13 -- 2 4 -- -- 176 -- 1,702
11 -- -- -- -- -- -- 1,677 105 -- 3,512
-- -- -- -- -- -- -- -- -- 264,056 264,056
------- ------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
18 13 13 -- 2 4 -- 1,677 281 264,056 269,270
------- ------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
$97,592 $78,855 $63,454 $43,826 $40,230 $28,361 $67,353 $ -- $1,290,526 $393,395 $6,897,609
======= ======= ======= ======= ======= ======= ======= ====== ========== ======== ==========
</TABLE>
ral part of these financial statements.
5
<PAGE>
BELLSOUTH RETIRE
STATEMENT OF NET ASSETS AVAILABLE
December
(In Tho
<TABLE>
<CAPTION>
Vanguard
Index Fidelity
BellSouth Indexed Interest Trust Growth
Stock Stock Income Growth & Income Balanced
Fund Fund Fund Portfolio Portfolio Fund
ASSETS ---------- ---------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Share of Trust net
assets................. $2,206,688 $1,105,530 $950,384 $129,181 $179,926 $114,254
Investment in BellSouth
Retirement Savings
Employee Stock
Ownership Plan Trust:
Shares of BellSouth
common stock allocated
to participants....... -- -- -- -- -- --
Shares of BellSouth
common stock held for
future allocation..... -- -- -- -- -- --
Temporary cash
investments........... -- -- -- -- -- --
---------- ---------- -------- -------- -------- --------
Total Investments..... 2,206,688 1,105,530 950,384 129,181 179,926 114,254
Contributions
receivable............. 1,590 1,379 579 299 421 201
Fund, BellSouth Savings
and Security Plan and
other transfers
receivable--net........ 43,691 -- -- -- -- --
---------- ---------- -------- -------- -------- --------
Total Assets.......... 2,251,969 1,106,909 950,963 129,480 180,347 114,455
---------- ---------- -------- -------- -------- --------
LIABILITIES
Distributions payable... 543 151 178 23 36 23
Fund, BellSouth Savings
and Security Plan and
other transfers
payable--net........... -- 1,788 40,544 83 30 226
Notes payable........... -- -- -- -- -- --
---------- ---------- -------- -------- -------- --------
Total Liabilities..... 543 1,939 40,722 106 66 249
---------- ---------- -------- -------- -------- --------
Net Assets Available for
Benefits............... $2,251,426 $1,104,970 $910,241 $129,374 $180,281 $114,206
========== ========== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integ
6
<PAGE>
MENT SAVINGS PLAN
FOR BENEFITS, WITH FUND INFORMATION
31, 1998
usands)
<TABLE>
<CAPTION>
T. Rowe DFA U.S. Employee Stock
Price DFA U.S. DFA Large Cap Ownership Plan
Bond Mid-Cap 6-10 Value International Value II Participant ----------------------
Fund Growth Portfolio II Value II Fund Fund Loans Other Allocated Unallocated Total
-------- ------- ------------ ------------- --------- ----------- ------ ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$119,953 $57,098 $67,832 $32,723 $30,967 $59,503 $8,552 $ -- $ -- $5,062,591
-- -- -- -- -- -- -- 1,257,725 -- 1,257,725
-- -- -- -- -- -- -- -- 848,865 848,865
-- -- -- -- -- -- -- 4,962 13,726 18,688
-------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
119,953 57,098 67,832 32,723 30,967 59,503 8,552 1,262,687 862,591 7,187,869
124 155 165 70 82 -- -- -- -- 5,065
-- 27 234 100 -- 69 -- -- -- 44,121
-------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
120,077 57,280 68,231 32,893 31,049 59,572 8,552 1,262,687 862,591 7,237,055
-------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
7 2 4 5 3 26 7,171 110 -- 8,282
230 -- -- -- 315 -- 1,381 34 -- 44,631
-- -- -- -- -- -- -- -- 313,122 313,122
-------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
237 2 4 5 318 26 8,552 144 313,122 366,035
-------- ------- ------- ------- ------- ------- ------ ---------- -------- ----------
$119,840 $57,278 $68,227 $32,888 $30,731 $59,546 $ -- $1,262,543 $549,469 $6,871,020
======== ======= ======= ======= ======= ======= ====== ========== ======== ==========
</TABLE>
ral part of these financial statements.
7
<PAGE>
BELLSOUTH RETIRE
STATEMENT OF CHANGES
FOR BENEFITS, WITH
Year Ended Dec
(In Tho
<TABLE>
<CAPTION>
Vanguard
Index Fidelity T. Rowe
BellSouth Indexed Interest Trust Growth Price
Stock Stock Income Growth & Income Balanced Bond Mid-Cap
Fund Fund Fund Portfolio Portfolio Fund Fund Growth
---------- ---------- -------- --------- --------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Benefits,
December 31, 1998...... $2,251,426 $1,104,970 $910,241 $129,374 $180,281 $114,206 $119,840 $57,278
---------- ---------- -------- -------- -------- -------- -------- -------
Employee contributions.. 59,895 46,729 31,079 17,866 16,939 7,306 4,558 6,967
Transfer of partici-
pants' balances--net... (30,420) (52,577) 74,445 69,439 (14,643) (9,183) (18,483) 3,624
Supplemental contribu-
tions.................. -- -- -- -- -- -- -- --
Allocation of shares to
participants........... -- -- -- -- -- -- -- --
Transfer for loan repay-
ment................... -- -- -- -- -- -- -- --
---------- ---------- -------- -------- -------- -------- -------- -------
Total Contributions,
Allocations and
Transfers.............. 29,475 (5,848) 105,524 87,305 2,296 (1,877) (13,925) 10,591
Share of Trust invest-
ment
activities............. (88,643) 221,237 52,988 48,269 18,251 8,543 (2,110) 13,898
---------- ---------- -------- -------- -------- -------- -------- -------
Total Additions......... (59,168) 215,389 158,512 135,574 20,547 6,666 (16,035) 24,489
---------- ---------- -------- -------- -------- -------- -------- -------
Less: Distributions to
participants........... 148,107 69,796 126,076 13,483 9,087 7,452 6,213 2,912
Interest on notes
payable.............. -- -- -- -- -- -- -- --
---------- ---------- -------- -------- -------- -------- -------- -------
Net Assets Available for
Benefits,
December 31, 1999...... $2,044,151 $1,250,563 $942,677 $251,465 $191,741 $113,420 $ 97,592 $78,855
========== ========== ======== ======== ======== ======== ======== =======
</TABLE>
The accompanying notes are an integ
8
<PAGE>
MENT SAVINGS PLAN
IN NET ASSETS AVAILABLE
FUND INFORMATION
ember 31, 1999
usands)
<TABLE>
<CAPTION>
Personal DFA DFA U.S. Employee Stock
DFA U.S. Choice International Large Cap Ownership Plan
6-10 Value Retirement Value II Value II Participant -----------------------
Portfolio II Account Fund Fund Loans Other Allocated Unallocated Total
------------ ---------- ------------- --------- ----------- ----- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$68,227 $ -- $32,888 $30,731 $59,546 $ -- $1,262,543 $549,469 $6,871,020
------- ------- ------- ------- ------- ----- ---------- -------- ----------
5,617 -- 3,055 2,951 -- -- -- -- 202,962
(14,894) 42,305 (46) (4,761) 3,489 (119) (10,649) -- 37,527
-- -- -- -- -- -- -- 48,889 48,889
-- -- -- -- -- -- 130,890 (130,890) --
-- -- -- -- -- -- (15,134) 15,134 --
------- ------- ------- ------- ------- ----- ---------- -------- ----------
(9,277) 42,305 3,009 (1,810) 3,489 (119) 105,107 (66,867) 289,378
7,210 1,521 5,516 1,030 7,007 119 (36,417) (61,709) 196,710
------- ------- ------- ------- ------- ----- ---------- -------- ----------
(2,067) 43,826 8,525 (780) 10,496 -- 68,690 (128,576) 486,088
------- ------- ------- ------- ------- ----- ---------- -------- ----------
2,706 -- 1,183 1,590 2,689 -- 40,707 -- 432,001
-- -- -- -- -- -- -- 27,498 27,498
------- ------- ------- ------- ------- ----- ---------- -------- ----------
$63,454 $43,826 $40,230 $28,361 $67,353 $ -- $1,290,526 $393,395 $6,897,609
======= ======= ======= ======= ======= ===== ========== ======== ==========
</TABLE>
ral part of these financial statements.
9
<PAGE>
BELLSOUTH RETIRE
STATEMENT OF CHANGES
FOR BENEFITS, WITH
Year Ended Dec
(In Tho
<TABLE>
<CAPTION>
Vanguard
Index Fidelity
BellSouth Indexed Interest Trust Growth
Stock Stock Income Growth & Income Balanced
Fund Fund Fund Portfolio Portfolio Fund
---------- ---------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Benefits,
December 31, 1997...... $1,155,485 $1,040,696 $896,002 $ 46,552 $161,078 $105,313
---------- ---------- -------- -------- -------- --------
Employee contributions.. 38,881 49,196 31,162 8,531 15,368 7,731
Transfer of
participants'
balances--net.......... 195,300 (181,786) 17,034 49,022 (27,030) (10,731)
Supplemental
contributions.......... -- -- -- -- -- --
Allocation of shares to
participants........... -- -- -- -- -- --
Transfer for loan
repayment.............. -- -- -- -- -- --
---------- ---------- -------- -------- -------- --------
Total Contributions,
Allocations and
Transfers.............. 234,181 (132,590) 48,196 57,553 (11,662) (3,000)
Share of Trust
investment activities.. 951,469 267,172 56,477 29,180 42,185 20,798
---------- ---------- -------- -------- -------- --------
Total Additions......... 1,185,650 134,582 104,673 86,733 30,523 17,798
---------- ---------- -------- -------- -------- --------
Less: Distributions to
participants...... 89,709 70,308 90,434 3,911 11,320 8,905
Interest on notes
payable............ -- -- -- -- -- --
---------- ---------- -------- -------- -------- --------
Net Assets Available for
Benefits,
December 31, 1998...... $2,251,426 $1,104,970 $910,241 $129,374 $180,281 $114,206
========== ========== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integ
10
<PAGE>
MENT SAVINGS PLAN
IN NET ASSETS AVAILABLE
FUND INFORMATION
ember 31, 1998
usands)
<TABLE>
<CAPTION>
T. Rowe DFA U.S. Employee Stock
Price DFA U.S. 6- DFA Large Cap Ownership Plan
Bond Mid-Cap 10 Value International Value II Participant -----------------------
Fund Growth Portfolio II Value II Fund Fund Loans Other Allocated Unallocated Total
-------- ------- ------------ ------------- --------- ----------- ----- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$110,032 $41,001 $102,314 $31,817 $37,756 $60,917 $ -- $ 671,576 $ 227,922 $4,688,461
-------- ------- -------- ------- ------- ------- ----- ---------- --------- ----------
5,207 5,285 7,440 3,026 3,321 -- -- -- -- 175,148
4,693 3,946 (31,294) (4,852) (11,553) 35 (733) (11,693) -- (9,642)
-- -- -- -- -- -- -- -- 47,444 47,444
-- -- -- -- -- -- -- 116,832 (116,832) --
-- -- -- -- -- -- -- (12,910) 12,910 --
-------- ------- -------- ------- ------- ------- ----- ---------- --------- ----------
9,900 9,231 (23,854) (1,826) (8,232) 35 (733) 92,229 (56,478) 212,950
9,655 9,425 (5,649) 4,538 3,751 4,941 733 547,026 409,620 2,351,321
-------- ------- -------- ------- ------- ------- ----- ---------- --------- ----------
19,555 18,656 (29,503) 2,712 (4,481) 4,976 -- 639,255 353,142 2,564,271
-------- ------- -------- ------- ------- ------- ----- ---------- --------- ----------
9,747 2,379 4,584 1,641 2,544 6,347 -- 48,288 -- 350,117
-- -- -- -- -- -- -- -- 31,595 31,595
-------- ------- -------- ------- ------- ------- ----- ---------- --------- ----------
$119,840 $57,278 $ 68,227 $32,888 $30,731 $59,546 $ -- $1,262,543 $ 549,469 $6,871,020
======== ======= ======== ======= ======= ======= ===== ========== ========= ==========
</TABLE>
ral part of these financial statements.
11
<PAGE>
BELLSOUTH RETIRE
STATEMENT OF CHANGES
FOR BENEFITS, WITH
Year Ended Dec
(In Tho
<TABLE>
<CAPTION>
Vanguard
Index Fidelity
BellSouth Indexed Interest Trust Growth
Stock Stock Income Growth & Income Balanced Bond
Fund Fund Fund Portfolio Portfolio Fund Fund
---------- ---------- -------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available for
Benefits,
December 31, 1996...... $1,052,299 $ 761,227 $826,463 $ -- $ 56,617 $ 82,348 $119,638
---------- ---------- -------- ------- -------- -------- --------
Employee contributions.. 34,434 55,032 36,179 1,195 14,476 9,858 5,541
Transfer of
participants'
balances--net.......... (228,972) 39,775 82,261 44,262 67,796 3,014 (13,621)
Employing company
contributions.......... -- -- -- -- -- -- --
Supplemental
contributions.......... -- -- -- -- -- -- --
Allocation of shares to
participants........... -- -- -- -- -- -- --
Transfer for loan
repayment.............. -- -- -- -- -- -- --
---------- ---------- -------- ------- -------- -------- --------
Total Contributions,
Allocations and
Transfers.............. (194,538) 94,807 118,440 45,457 82,272 12,872 (8,080)
Share of Trust
investment activities.. 392,729 255,306 54,817 1,570 28,682 18,321 8,987
---------- ---------- -------- ------- -------- -------- --------
Total Additions......... 198,191 350,113 173,257 47,027 110,954 31,193 907
---------- ---------- -------- ------- -------- -------- --------
Less: Distributions to
participants...... 95,005 70,644 103,718 475 6,493 8,228 10,513
Interest on notes
payable............ -- -- -- -- -- -- --
---------- ---------- -------- ------- -------- -------- --------
Net Assets Available for
Benefits,
December 31, 1997...... $1,155,485 $1,040,696 $896,002 $46,552 $161,078 $105,313 $110,032
========== ========== ======== ======= ======== ======== ========
</TABLE>
The accompanying notes are an integ
12
<PAGE>
MENT SAVINGS PLAN
IN NET ASSETS AVAILABLE
FUND INFORMATION
ember 31, 1997
usands)
<TABLE>
<CAPTION>
T. Rowe DFA DFA U.S. American Employee Stock
Price DFA U.S. International Large Cap Century/Twentieth Ownership Plan
Mid-Cap 6-10 Value Value II Value II Berger Century Growth Participant ----------------------
Growth Portfolio II Fund Fund 100 Fund Investors Fund Loans Other Allocated Unallocated Total
-------- ------------ ------------- --------- -------- ----------------- ----------- ------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ -- $ 40,004 $28,022 $19,709 $ 39,805 $ 15,099 $58,275 $ 230 $455,081 $ 93,129 $3,647,946
------- -------- ------- ------- -------- -------- ------- ------- -------- -------- ----------
1,061 6,088 3,355 2,633 2,725 1,194 -- -- -- -- 173,771
39,161 42,050 2,685 10,590 (46,616) (19,486) 1,464 (1,106) (14,367) -- 8,890
-- -- -- -- -- -- -- -- 7,224 -- 7,224
-- -- -- -- -- -- -- -- -- 44,536 44,536
-- -- -- -- -- -- -- -- 71,595 (71,595) --
-- -- -- -- -- -- -- -- (11,878) 11,878 --
------- -------- ------- ------- -------- -------- ------- ------- -------- -------- ----------
40,222 48,138 6,040 13,223 (43,891) (18,292) 1,464 (1,106) 52,574 (15,181) 234,421
1,046 17,555 (503) 7,193 6,506 4,809 4,293 1,050 197,965 185,174 1,185,500
------- -------- ------- ------- -------- -------- ------- ------- -------- -------- ----------
41,268 65,693 5,537 20,416 (37,385) (13,483) 5,757 (56) 250,539 169,993 1,419,921
------- -------- ------- ------- -------- -------- ------- ------- -------- -------- ----------
267 3,383 1,742 2,369 2,420 1,616 3,115 174 34,044 -- 344,206
-- -- -- -- -- -- -- -- -- 35,200 35,200
------- -------- ------- ------- -------- -------- ------- ------- -------- -------- ----------
$41,001 $102,314 $31,817 $37,756 $ -- $ -- $60,917 $ -- $671,576 $227,922 $4,688,461
======= ======== ======= ======= ======== ======== ======= ======= ======== ======== ==========
</TABLE>
ral part of these financial statements.
13
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands, Except Per-Participant Amounts)
1. Plan Description
General
The following description of the BellSouth Retirement Savings Plan (the
Plan) provides only general information. For additional information,
participants should refer to the Plan Prospectus/Summary Plan Description, as
supplemented (SPD). A copy of the SPD can be obtained by calling the BellSouth
Participant Service Center at 1-800-995-1000. In addition, copies of the Plan,
trust agreement and other related documents which include details of the Plan
can be obtained by writing to: Secretary, BellSouth Savings Plan Committee,
Room 13C09, 1155 Peachtree Street, N.E., Atlanta, Georgia 30309-3610.
The Plan was established by BellSouth Corporation (BellSouth) to provide a
convenient way for management employees to save for their retirement on a
long-term basis and to acquire an ownership interest in BellSouth. The Plan
consists of two parts: one is a profit sharing plan which includes a qualified
cash or deferred arrangement and which is intended to qualify as such under
Sections 401(a), 401(k) and 401(m) and related sections of the Internal
Revenue Code of 1986, as amended (the Code); the second part is an employee
stock ownership plan (ESOP) which is designed as a stock bonus plan to invest
primarily in shares of BellSouth Common Stock and which is intended to qualify
under Sections 401(a), 401(m) and 4975(e)(7) and related sections of the Code.
All regular full-time and part-time employees of participating BellSouth
companies who are not covered by a collective bargaining agreement, have
attained the age of 18, and have completed at least one month of service are
eligible to participate. The Plan is subject to the Employee Retirement Income
Security Act of 1974, as amended.
Master Trust
For investment purposes, the assets of the Plan are held in the BellSouth
Master Savings Trust (the Master Savings Trust). The Master Savings Trust also
holds the assets of the BellSouth Savings and Security Plan (SSP).
Investment Options
At December 31, 1999, the Plan's assets were comprised of the following
investment vehicles: BellSouth Stock Fund, Indexed Stock Fund, Interest Income
Fund, Bond Fund, Balanced Fund, Personal Choice Retirement Account and the
following mutual funds: Fidelity Growth & Income Portfolio, Vanguard Index
Trust Growth Portfolio, DFA U.S. 6-10 Value Portfolio II, T. Rowe Price Mid-
Cap Growth, DFA U.S. Large Cap Value II Fund and DFA International Value II
Fund. All investments are valued on a daily basis.
The Personal Choice Retirement Account, or PCRA, was added as an investment
option in 1999. Unlike the other funds offered by the Plan, the PCRA is an
individual brokerage account in which participants act as their own investment
advisor and may choose from a broad range of investment options. The
investment options include no-load and load mutual funds, most stocks listed
on many U.S. securities exchanges, bonds and other fixed-income investments.
Participants who open a PCRA are also assessed additional fees and commissions
which are discussed in Note 4. At December 31, 1999 there were 431
participants invested in the PCRA.
Funds within the PCRA cannot be accessed directly for loans, withdrawals or
distributions. Participants who want a loan, withdrawal or distribution to
include amounts held in the PCRA must first transfer the desired amount from
the PCRA to another fund in the Plan for a minimum of one day.
During 1997, the T. Rowe Price Mid-Cap Growth and the Vanguard Index Trust
Growth Portfolio replaced the Berger 100 Fund and the American
Century/Twentieth Century Growth Investors Fund as investment options. All
participant balances in, and subsequent contributions to, the replaced funds
were reallocated according to participant direction or into the Interest
Income Fund in the absence of such direction.
14
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollars in Thousands, Except Per-Participant Amounts)
1. Plan Description--(continued)
Concentrations of Risk
At December 31, 1999 and 1998, the Plan's assets were significantly
concentrated in shares of BellSouth Common Stock, the value of which is
subject to fluctuations related to corporate, industry and economic factors.
The Plan's other investment options include a variety of stocks, bonds,
fixed income securities, mutual funds and other investment securities.
Investment securities subject participants to various risks, such as interest
rate, market and credit risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that changes
in the values of investment securities will occur in the near term and that
such changes could materially affect participants' account balances and the
amounts reported in the Statements of Net Assets Available for Benefits With
Fund Information.
Vesting
All participant and employing company contributions vest immediately.
Participant Loans (Whole Dollars)
Participants may borrow from their fund accounts a minimum of $1,000 up to
the lesser of $50,000 or 50 percent of their before-tax account balances as
defined by the Plan document and any amounts rolled over to the Plan from
other qualified plans. Loan balances are secured by the assets allocated to
the participant's accounts and bear interest at various rates which ranged
from 8.75% to 9.25% at December 31, 1999. Principal and interest are paid
ratably through periodic payroll deductions for active employees and by coupon
for nonactive employees. As discussed earlier, amounts held in a PCRA are not
directly available for loans.
Service Providers
As of May 1, 1999, State Street Bank & Trust Company serves as the Trustee
for the Master Savings Trust. During 1998, and in 1999 prior to May 1, Bankers
Trust Company served as the Trustee for the Master Savings Trust. Metropolitan
Life Insurance Company serves as the recordkeeper and service center provider
for the Plan. Charles Schwab & Co. Inc. provides brokerage services for the
PCRA.
2. Accounting Policies
The financial statements of the Plan have been prepared in accordance with
generally accepted accounting principles. Such financial statements include
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities and the amounts
of revenues and expenses. Actual results could differ from those estimates.
With respect to the Statements of Net Assets Available for Benefits with
Fund Information for the years presented, allocated share of Trust net assets
includes investments at fair value, accrued interest income, accrued
dividends, receivables for investments sold, payables for investments
purchased and accrued administrative expenses of the Master Savings Trust.
With respect to the Statements of Changes in Net Assets Available for
Benefits with Fund Information for the years presented, allocated share of
Trust investment activities includes the sum of realized gains, net of
realized losses, the net change in unrealized appreciation/(depreciation) on
the fair value of the investments, interest income, dividends, investment
manager fees and other administrative fees paid by the Master Savings Trust.
15
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollars in Thousands, Except Per-Participant Amounts)
2. Accounting Policies--(continued)
The values of investments in the Master Savings Trust are determined as
follows:
. Shares of BellSouth Common Stock and equity securities underlying the
Indexed Stock Fund are valued on the basis of the closing price per
share on December 31, 1999 and 1998 as reported on the New York Stock
Exchange or, if no sales were made on that date, at the closing price on
the next preceding day on which sales were made;
. The values of mutual funds, all of which are traded on a national
securities exchange, are based on published daily closing net asset
values as reported by the respective securities exchanges;
. Over-the-counter securities and government obligations are valued based
on the bid prices on December 31, 1999 and 1998 from published sources
where available and, if not available, from other sources considered
reliable; and
. Securities in the PCRA are valued by methods which are consistent with
the methods discussed above.
. Annuity contracts with insurance companies and synthetic contracts are
valued at principal plus reinvested interest.
Purchases and sales of securities are reflected as of the trade date.
Realized gains and losses on sales of investments are determined on the
basis of average cost.
Dividend income is recognized on the date the trust is entitled to the
benefit. Interest earned on investments is recognized on the accrual basis.
3. Contributions
Employee contributions to the Plan are recorded based on basic contributions
of up to 6% and, for those participants wishing to contribute additional
amounts, supplemental contributions of up to 9%, such that total contributions
may not exceed 15% of compensation. Contributions are designated by the
participants as before-tax or after-tax, subject to certain IRS limitations on
before-tax contributions.
As discussed in Section 3 of the Plan document, participants may also
rollover amounts into the Plan from other qualified plans.
The employing company makes matching contributions to the ESOP in respect of
each participant's authorized basic contributions. The rate of the employing
company matching contributions remains in effect for a twelve-month period
from April 1 through March 31. The employing company matches 100% of a
participant's first 2% of basic contributions. Basic contributions in excess
of 2% are matched at a rate that varies from company to company. The ranges of
matching rates for basic contributions in excess of 2% for the three years
ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ---------
<S> <C> <C> <C>
January-March................................... 25% - 100% 25% - 85% 25% - 75%
April-December.................................. 25% - 100% 25% - 100% 25% - 85%
</TABLE>
4. Plan Expenses
Each participant in the Plan is charged a flat annual fee for Plan
administrative expenses, including recordkeeping, trustee and other expenses
considered reasonable by the Plan administrator. The fee is divided on a pro
rata basis among each investment option of the participant. The per-
participant fee was $33.00 for 1999, $33.00 for 1998 and $30.00 for 1997.
Additional fees are charged to individual participants for various services
provided by the Plan's recordkeeper and the BellSouth Participant Service
Center.
16
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollars in Thousands, Except Per-Participant Amounts)
4. Plan Expenses--(continued)
Participants who open a PCRA are charged a $50 fee for the initial transfer
into the PCRA and are charged an additional monthly fee of $2.50 for each
month that the participant maintains a PCRA balance.
Investment manager fees are paid by the Master Savings Trust. Investment
manager fees, included in allocated share of Trust investment activities in
the Statements of Changes in Net Assets Available for Benefits with Fund
Information for the years presented, were as follows:
<TABLE>
<CAPTION>
For the Year Ended
December 31,
------------------
1999 1998 1997
------ ---- ------
<S> <C> <C> <C>
BellSouth Stock Fund......................................... $ 278 $-- $ --
Indexed Stock Fund........................................... 396 182 190
Interest Income Fund......................................... 417 363 426
Balanced Fund................................................ 133 106 114
Bond Fund.................................................... 161 331 367
------ ---- ------
$1,385 $982 $1,097
====== ==== ======
</TABLE>
The Master Savings Trust did not pay investment management fees for the
BellSouth Stock Fund during 1998 and 1997.
For the mutual funds, investment manager fees are not paid directly from the
Master Savings Trust. However, these investments are subject to mutual fund
management fees which reduce the overall return of the respective mutual fund.
These fees, expressed as percentages of fund assets, which were assessed
against the mutual funds by their respective managers, were as follows:
<TABLE>
<CAPTION>
For the Year
Ended
December 31,
----------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Vanguard Index Trust Growth Portfolio*........................ 0.12% 0.20% 0.20%
Fidelity Growth & Income Portfolio............................ 0.68% 0.71% 0.75%
T. Rowe Price Mid-Cap Growth*................................. 0.91% 0.91% 1.04%
DFA U.S. 6-10 Value Portfolio II.............................. 0.44% 0.45% 0.75%
DFA International Value II Fund............................... 0.50% 0.55% 0.75%
DFA U.S. Large Cap Value II Fund.............................. 0.37% 0.39% 0.75%
Berger 100 Fund*.............................................. -- -- 1.41%
American Century/Twentieth Century Growth Investors Fund*..... -- -- 1.00%
</TABLE>
--------
* During 1997, the T. Rowe Price Mid-Cap Growth and the Vanguard Index Trust
Growth Portfolio replaced the Berger 100 Fund and the American
Century/Twentieth Century Growth Investors Fund. For additional information,
see Note 1.
5. Tax Status
The Internal Revenue Service has determined and informed BellSouth by a
favorable determination letter dated April 14, 1998 that the Plan and related
Trust meet the requirements of Section 401(a) of the Code and are exempt from
federal income taxes under Section 501(a) of the Code.
The Plan has been amended subsequent to the determination letter referred to
above. BellSouth believes that the Plan, in its current form, will maintain
its tax exempt status. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
The federal income tax effects on participants with respect to the Plan are
described in the SPD.
17
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollars in Thousands, Except Per-Participant Amounts)
6. Termination Priorities
BellSouth intends to continue the Plan indefinitely but reserves the right
to terminate or amend it. In the event the Plan is terminated and if BellSouth
or its subsidiaries sponsor another defined contribution plan, the
participants may elect to have their account balances transferred to the other
plan. If BellSouth or its subsidiaries do not sponsor such a plan, the
participants would receive a lump-sum distribution of their account balances.
7. Interest in BellSouth Master Savings Trust
The assets of the Plan are held in the Master Savings Trust and are
commingled with the assets of the SSP. The assets of the Master Savings Trust
are allocated to the Plan based upon the total of each individual plan
participant's share of the Master Savings Trust's assets. The Plan's allocated
share of the total net assets of all funds in the Master Savings Trust was
65.57168% at December 31, 1999 and 64.52177% at December 31, 1998. The Plan's
allocated share of the net assets of each fund in the Master Savings Trust at
December 31, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
BellSouth Stock Fund..................................... 53.82512% 52.01435%
Indexed Stock Fund....................................... 85.80108% 85.68681%
Interest Income Fund..................................... 72.94221% 73.61537%
Vanguard Index Trust Growth Portfolio.................... 73.57265% 73.84212%
Fidelity Growth & Income Portfolio....................... 73.01791% 72.63523%
Balanced Fund............................................ 81.91873% 82.69798%
Bond Fund................................................ 92.69418% 93.03495%
T. Rowe Price Mid-Cap Growth............................. 79.40384% 80.18008%
DFA U.S. 6-10 Value Portfolio II......................... 84.92757% 83.44243%
Personal Choice Retirement Account....................... 100.0000% -- %
DFA International Value II Fund.......................... 87.58686% 87.97291%
DFA U.S. Large Cap Value II Fund......................... 75.17285% 74.56399%
Participant Loans........................................ 63.13932% 66.53608%
Other.................................................... 49.57092% 69.80486%
</TABLE>
The financial position of the Master Savings Trust at December 31, 1999 and
1998 was as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Assets:
Investments at value:
BellSouth Stock Fund:
Shares of BellSouth Common Stock#..................... $3,775,655 $4,203,286
Temporary cash investments............................ 16,370 129,190
Distributable shares ................................. 63 84
Indexed Stock Fund:
Equity Index Fund#.................................... 1,456,096 1,287,238
Temporary cash investments............................ -- 28
Interest Income Fund:
General account investment contracts.................. 93,672 111,043
Security backed investments........................... 1,096,133 1,086,643
Temporary cash investments............................ 96,209 92,759
Vanguard Index Trust Growth Portfolio:
Securities............................................ 340,612 174,581
Temporary cash investments............................ -- 4
Fidelity Growth & Income Portfolio:
Securities............................................ 262,475 247,529
Temporary cash investments............................ -- 6
</TABLE>
18
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollars in Thousands, Except Per-Participant Amounts)
7. Interest in BellSouth Master Savings Trust--(continued)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Balanced Fund:
Securities.......................................... 126,019 127,085
Temporary cash investments.......................... 12,975 11,050
Bond Fund:
Securities.......................................... 113,524 144,785
Temporary cash investments.......................... 1,786 2,555
T. Rowe Price Mid-Cap Growth:
Securities.......................................... 98,869 71,251
Temporary cash investments.......................... -- 1
DFA U.S. 6-10 Value Portfolio II:
Securities.......................................... 74,162 81,518
DFA International Value II Fund:
Securities.......................................... 45,283 36,986
Temporary cash investments.......................... -- 3
Personal Choice Retirement Account:
Securities.......................................... 43,594 --
DFA U.S. Large Cap Value II Fund:
Securities.......................................... 37,252 40,975
Participant Loans:
Loans to participants................................ 106,282 89,430
Contribution Account+:
Temporary cash investments........................... 42 155
Distribution Account+:
Securities........................................... -- 1,075
Temporary cash investments........................... 47 8,496
Expense Account+:
Temporary cash investments........................... 3,290 2,524
Dividends and interest income receivable.............. 7,787 2,206
Receivable for investments sold....................... 13,074 4,310
Other receivables..................................... 469 5,934
----------- -----------
7,821,740 7,962,730
Liabilities:
Payable for investments purchased..................... 23,378 115,408
Variation margin payable.............................. 224 892
Other payables........................................ -- 102
----------- -----------
Trust net assets (excluding ESOP Trusts).............. 7,798,138 7,846,328
Investment in ESOP Trusts:
Shares of BellSouth Common Stock allocated to partici-
pants#............................................... 2,350,638 2,333,414
Distributable shares.................................. 1 107
Shares of BellSouth Common Stock held for future allo-
cation#.............................................. 949,327 1,259,180
Temporary cash investments............................ 25,505 34,783
----------- -----------
Total investments..................................... 11,123,609 11,473,812
Liabilities:
Notes payable......................................... 391,429 467,018
----------- -----------
Trust net assets...................................... $10,732,180 $11,006,794
=========== ===========
Investments at cost................................... $ 7,276,780 $ 6,453,240
=========== ===========
</TABLE>
--------
# Represents an individual investment which is 5% or more of the Net Assets of
the Master Savings Trust.
+ These accounts are combined and presented as the as "Other" fund in the
accompanying financial statements.
Distributions from the BellSouth Stock Fund and the ESOP Trusts that are
payable in shares of BellSouth Common Stock are separated from the "Shares of
BellSouth Common Stock" and "Shares of BellSouth Common Stock allocated to
participants" lines and reflected as "Distributable Shares" instead.
19
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollars in Thousands, Except Per-Participant Amounts)
7. Interest in BellSouth Master Savings Trust--(continued)
Assets in the BellSouth Stock Fund, Bond Fund, Indexed Stock Fund, mutual
funds and some of the assets in the Balanced Fund are invested in securities
which fluctuate in market value, and the values of the units fluctuate daily.
Assets in the Interest Income Fund are invested in the following types of
financial vehicles:
. General Account Investment Contracts--These contracts are also referred
to as traditional investment contracts. An investment contract is termed
"general account" when the assets committed to the contract are
commingled with other general assets of the contract issuer. The
contract issuer promises to return the invested principal plus a stated
rate of interest upon maturity. The quality of the promise is a function
of the financial condition of the contract issuer.
. Security Backed Investments--These are generic terms which refer to
investment contracts other than "traditional" general account investment
contracts as defined above. These investments consist of a combination
of marketable securities, owned directly by the Plan or as units of a
separate account or trust owned by the Plan, and an investment contract
that provides liquidity for eligible employee benefits at book value.
Market value securities are investments in fixed income securities owned
by the Plan without a corresponding investment contract. Liquidation of
these securities to pay eligible benefit events is at market value.
- Group Trust Investment Contracts--Group Trust refers to the PRIMCO
Group Trust for Employees Benefit Plans. The PRIMCO Group Trust
contains a series of commingled investment funds, available only to
PRIMCO clients, constructed to provide a stable value portfolio with
the beneficial elements of various fixed income management
strategies. PRIMCO, as the investment manager of the Funds within
the PRIMCO Group Trust, has hired Bankers Trust Company to serve as
the Trustee. One form of a "synthetic" investment contract as
described below, the Plan's investment in any one of the various
PRIMCO Group Trust Funds is unitized and may be "wrapped" by an
independent financial institution through the issuance of an
investment contract.
- Separate Account Investment Contracts--An investment contract is
termed "separate account" when the assets committed to the contract
are segregated from the general assets of the contract issuer
through the use of a specifically identifiable separate account. The
separate account may be comprised of investments from one Plan or
Trust, or comprised of investments from multiple qualified
retirement Plans and Trusts. Though ownership of the assets held in
a separate account is retained by the contract issuer, the assets
are protected from liabilities arising from the contract issuers'
general operations. The investment performance of a separate account
investment contract may be a function of the investment performance
of the investments held in the separate account.
- Synthetic Investment Contract--The term "synthetic" investment
contract is used to describe a variety of investment contracts under
which a Plan retains ownership of the invested assets, or owns units
of an account or trust which holds the invested assets. To ensure
these invested assets may be accounted for at book value, a
"synthetic" investment contract, also referred to as a "wrap"
contract, is negotiated with an independent financial institution.
Under the terms of these investment contracts, the contract issuer
ensures the Plan's ability to pay eligible employee benefits at book
value. The investment performance of a synthetic investment contract
may be a function of the investment performance of the invested
assets.
20
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollars in Thousands, Except Per-Participant Amounts)
7. Interest in BellSouth Master Savings Trust--(continued)
The value of the Interest Income Fund reflected in these financial
statements is based upon the principal invested and the interest credited. The
fair value of the Interest Income Fund, by investment type, at December 31,
1999 and 1998 was as follows:
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
General account investment contracts............... $ 93,672 $ 111,043
Security backed investments:
Underlying assets................................. 1,093,149 1,084,936
Wrapper contracts................................. 2,984 1,707
---------- ----------
Total contracts.................................. $1,189,805 $1,197,686
========== ==========
</TABLE>
The contracts held by the Master Savings Trust in the Interest Income Fund
are considered fully benefit-responsive in accordance with AICPA Statement of
Position 94-4. The crediting interest rate was 6.12% at December 31, 1999 and
6.49% at December 31, 1998. The average yield was 6.23% in 1999 and 6.13% in
1998. Interest rates are reset on a semi-annual, quarterly or monthly basis to
move the current book value of these investments toward the projected future
market value over the life of the contract.
During 1990, the BellSouth Management Savings and Employee Stock Ownership
Plan Trust and the BellSouth Savings and Security ESOP Trust (the ESOP Trusts)
issued medium-term notes in the aggregate amount of $850 million to fund the
purchase of BellSouth Common Stock to be utilized at later dates to fulfill
match obligations. Shares purchased with such funds are released for
allocation to participant accounts based on a prescribed schedule coinciding
with payments on the ESOP notes.
Assets held in the Master Savings Trust are generally unavailable to service
the ESOP debt; however, the notes are guaranteed by and are subject to direct
recourse against BellSouth. BellSouth contributes to the ESOP Trusts an amount
necessary, net of ESOP dividends and interest, to service the ESOP notes. Such
contributions are classified as Supplemental Contributions in the accompanying
Statements of Changes in Net Assets Available for Benefits With Fund
Information. These contributions are subject to the claims of holders of debt
securities issued by the ESOP Trusts but are held at BellSouth and paid to the
ESOP Trusts twice yearly to fund, on a same day basis, required payments by
the ESOP Trusts on the notes. Such contributions would not remain in the ESOP
Trusts unless there was a default on the debt securities by the ESOP Trustee
after having received the required contributions from BellSouth. Therefore,
holders of the debt securities should not rely on the assets of the ESOP
Trusts in arriving at an investment decision with respect to the debt
securities.
In addition to Supplemental Contributions, BellSouth contributes amounts
necessary to purchase any additional shares required to meet the match
obligations after shares released by the ESOP Trusts have been used. Such
contributions are classified as Employing Company Contributions in the
accompanying Statements of Changes in Net Assets Available for Benefits With
Fund Information.
In lieu of receiving cash dividends earned on shares of BellSouth Common
Stock which have been allocated to participants from the ESOP Trusts,
participant accounts are credited with equivalent shares of BellSouth Common
Stock. Dividends on the related ESOP shares are transferred to the Unallocated
ESOP Fund and are applied towards the service of the ESOP notes. The transfer
of these earnings is classified as Transfer for Loan Repayment in the
accompanying Statements of Changes in Net Assets Available for Benefits With
Fund Information.
21
<PAGE>
BELLSOUTH RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollars in Thousands, Except Per-Participant Amounts)
7. Interest in BellSouth Master Savings Trust--(continued)
BellSouth made cash contributions to the ESOP Trusts in the amount of
$73,389 in 1999, $71,857 in 1998 and $68,393 in 1997 for the purpose of
servicing the guaranteed debt. BellSouth also made cash contributions in the
amount of $8,322 in 1998 and $21,675 in 1997 to purchase additional shares to
meet the match obligations.
A description of each debt issue is as follows:
BellSouth Management Savings and Employee Stock Ownership Plan Trust:
<TABLE>
<CAPTION>
Title Amount Interest Rate Due Date
----- -------- ------------- ------------
<S> <C> <C> <C>
Amortizing Medium-Term Notes, Series A...... $275,000 9.125% July 1, 2003
Amortizing Medium-Term Notes, Series A...... $275,000 9.19% July 1, 2003
--------
Total..................................... $550,000
========
</TABLE>
BellSouth Savings and Security ESOP Trust:
<TABLE>
<CAPTION>
Title Amount Interest Rate Due Date
----- -------- ------------- ------------
<S> <C> <C> <C>
Amortizing Medium-Term Notes, Series A...... $300,000 9.125% July 1, 2003
</TABLE>
Maturities of the ESOP Trusts' long-term debt outstanding at December 31,
1999 were as follows:
<TABLE>
<CAPTION>
2000 2001 2002 2003 Total
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Maturities........................... $84,470 $94,128 $104,648 $108,183 $391,429
======= ======= ======== ======== ========
</TABLE>
Investment activities of the Master Savings Trust are allocated to the Plan
based upon the total of each individual Plan participant's share of the Master
Savings Trust investment activities during the period ended December 31, 1999.
The Master Savings Trust investment activities for the years ended December
31, 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
For the Year Ended
December 31,
----------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Investment Activities:
Dividends on shares of BellSouth Common
Stock.................................... $ 119,742 $ 110,822 $ 117,861
Interest Income Fund income............... 71,112 78,395 77,381
Other interest............................ 66,375 46,717 38,778
Net change in unrealized
appreciation/(depreciation) on
investments.............................. (1,264,789) 2,617,133 689,077
Net realized gain on investments.......... 1,084,574 1,161,504 991,088
Investment manager fees................... (1,880) (1,198) (1,308)
Other fees................................ (2,999) (3,262) (2,960)
---------- ---------- ----------
Net investment activities.................. $ 72,135 $4,010,111 $1,909,917
========== ========== ==========
</TABLE>
22
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
EMPLOYER IDENTIFICATION NUMBER: 58-1533433
H4(i)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(In Thousands)
<TABLE>
<CAPTION>
December 31, 1999
-------------------------------
Number of
Shares or
Principal Carrying
Name of Issuer and Title of Issue Amount Cost Value
--------------------------------- --------- ---------- ----------
BELLSOUTH STOCK FUND
<S> <C> <C> <C>
Shares of BellSouth Common Stock*#--99.6%.......... 80,656 $2,948,395 $3,775,718
---------- ----------
Temporary Cash Investments--0.4%................... 16,370 $ 16,370 $ 16,370
---------- ----------
Total BellSouth Stock Fund--100.0%............... $2,964,765 $3,792,088
---------- ----------
INDEXED STOCK FUND
Bankers Trust Pyramid Equity Index Fund#--100.0%... 412 $ 906,100 $1,456,096
---------- ----------
Total Indexed Stock Fund--100.0%............... $ 906,100 $1,456,096
---------- ----------
INTEREST INCOME FUND+
General Account Investment Contracts--7.3%
Metropolitan Life Insurance Co., 6.58%, 08/06/01.. $ 15,385 $ 15,385 $ 15,302
New York Life Insurance Co., (5.62%-6.80%),
(07/22/00-12/17/01).............................. $ 25,450 $ 25,450 $ 25,314
SunAmerica Life Insurance Co., 9.32%-01/02/04..... $ 1,461 $ 1,461 $ 1,450
John Hancock Life Insurance (5.74%-6.35%),
(01/03/00-12/02/02).............................. $ 50,421 $ 50,421 $ 50,175
Monumental Life Insurance Co., 5.97%, 03/30/00.... $ 1,437 $ 1,437 $ 1,431
---------- ----------
$ 94,154 $ 93,672
---------- ----------
Group Trust Investment Contracts--29.0%
Continental Assurance Co., 5.44%, 02/01/06........ $ 42,788 $ 42,788 $ 42,596
Chase Manhattan Bank, 6.67%, 12/30/03............. $ 25,920 $ 25,920 $ 25,182
Bank of America NT & SA, 8.9%, 12/30/02........... $ 12,086 $ 12,086 $ 11,999
Bankers Trust, 6.1%, 12/30/02..................... $127,115 $ 127,115 $ 126,477
Continental Assurance, 5.78%, 06/30/04............ $ 56,581 $ 56,581 $ 56,312
Transamerica Life & Annuity, 6.31%, 06/30/04...... $ 27,232 $ 27,232 $ 27,091
CDC, 6.22%, 03/30/00.............................. $ 58,348 $ 58,348 $ 58,044
Chase Manhattan Bank, 6.52%, 12/01/09............. $ 25,317 $ 25,317 $ 25,778
---------- ----------
$ 375,387 $ 373,479
---------- ----------
Separate Account Investment Contracts--22.5%
Aetna Life Insurance Company, 6.51%, 12/30/02..... $ 53,916 $ 53,916 $ 53,628
Allstate Life Insurance Company, 5.48%, 07/01/02.. $ 75,389 $ 75,389 $ 75,049
John Hancock Life Insurance Company, 7.72%,
05/01/07......................................... $ 94,279 $ 94,279 $ 93,719
Massachusetts Mutual, 6.50%, 07/05/02............. $ 7,138 $ 7,138 $ 7,100
Massachusetts Mutual, 5.98%, 11/30/03............. $ 12,402 $ 12,402 $ 12,340
Metropolitan Life Insurance Co., 5.75%, 12/30/02.. $ 40,593 $ 40,593 $ 40,401
Prudential Insurance Company of America, 15.18%,
07/14/01......................................... $ 75 $ 75 $ 74
Prudential Insurance Company of America, 10.7%,
09/15/01......................................... $ 6,415 $ 6,415 $ 6,360
Prudential Insurance Company of America, 7.91%,
11/20/00......................................... $ 684 $ 684 $ 680
---------- ----------
$ 290,891 $ 289,351
---------- ----------
</TABLE>
S-1
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
EMPLOYER IDENTIFICATION NUMBER: 58-1533433
H4(i)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(Continued)
(In Thousands)
<TABLE>
<CAPTION>
December 31, 1999
--------------------------
Number of
Shares or
Principal Carrying
Name of Issuer and Title of Issue Amount Cost Value
--------------------------------- --------- ------- --------
<S> <C> <C> <C> <C>
Synthetic Investment Contracts--33.7%
Bank of America Natl. Trust & Savings,
5.67%, 11/27/06
<CAPTION>
Underlying Assets Market Value
----------------- ------------
<S> <C> <C> <C> <C>
Newcourt Equipment Trust............... $17,375
United States Treasury................. $14,843
United States Treasury................. $10,467
United States Treasury................. $10,260
United States Treasury................. $ 9,938
United States Treasury................. $ 8,980
United States Treasury................. $ 4,847
United States Treasury................. $ 4,076
MBNA Master Trust...................... $ 9,924
Residential Funding II................. $ 6,105
-------
$96,815 $97,739 $97,739 $97,468
-------
Monumental Life Insurance Co., 6.03%, 12/08/09
<CAPTION>
Underlying Assets Market Value
----------------- ------------
<S> <C> <C> <C> <C>
Household Affinity CC MT............... $16,030
Pinnacle CBO FSA....................... $13,585
Carondelel Health - MBIA............... $10,217
Premier Auto Master Trust.............. $ 9,851
Pacific Life CBO 98-1.................. $ 9,430
Province of Quebec..................... $ 8,427
Home Ownership Fund Corp 1............. $ 7,150
Home Ownership Fund Corp 2............. $ 4,781
Merill Lynch Huntoon Pg................ $ 3,734
GMAC Comm. Mort. Securities............ $ 2,585
ATT Capital Eq. Trust.................. $ 2,573
World Omni Auto Lease.................. $ 2,160
Ameresco............................... $ 1,471
-------
$91,994 $94,859 $94,859 $94,373
-------
Rabobank Nederland, (6.05%-7.72%),
(04/25/00-12/08/09)
<CAPTION>
Underlying Assets Market Value
----------------- ------------
<S> <C> <C> <C> <C>
Sears Credit Account MT................ $ 5,485
Neiman Marcus CC MT.................... $18,123
Fleetwood Financial.................... $ 2,566
Fannie Mae............................. $ 5,617
World Omni Auto Lease Trs.............. $ 3,875
GMAC - MBIA Wrapped.................... $ 7,542
First Union/LEH Broths................. $ 3,239
Chemical Bank Master Trust............. $ 5,000
World Omni Auto Lease Trs.............. $ 4,320
Fannie Mae............................. $ 6,725
Federal Home Loan Mortgage Co.......... $ 2,947
GOSA Mortgage Security Corp II......... $ 4,580
-------
$70,019 $70,197 $70,197 $69,793
-------
</TABLE>
S-2
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
EMPLOYER IDENTIFICATION NUMBER: 58-1533433
H4(i)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(Continued)
(In Thousands)
<TABLE>
<CAPTION>
December 31, 1999
-------------------------------
Number of
Shares or
Principal Carrying
Name of Issuer and Title of Issue Amount Cost Value
--------------------------------- --------- ---------- ----------
<S> <C> <C> <C> <C>
State Street Bank & Trust,
6.21%, 11/17/03
<CAPTION>
Underlying Assets Market Value
----------------- ------------
<S> <C> <C> <C> <C>
Nissan Auto Receivables........... $ 11,937
Honda Auto Lease Trust............ $ 9,990
Green Tree Financial.............. $ 9,963
EqiCredit HEQ Loan................ $ 9,928
Federal Home Loan Mortgage Co. ... $ 9,925
Union Acceptance Corp. ........... $ 9,908
Caterpillar Fin. Asset Trust...... $ 9,888
Green Tree Home Improv. Ln........ $ 7,325
Advanta Mortgage Loan............. $ 6,889
Green Tree Financial.............. $ 5,005
CIT RV Trust...................... $ 4,910
Green Tree Financial.............. $ 3,997
United States Treasury............ $ 1,020
--------
$100,685 $101,942 $ 101,942 $ 101,313
--------
Union Bank of Switzerland (7.64%-
8.3%), (06/15/00)
<CAPTION>
Underlying Assets Market Value
----------------- ------------
<S> <C> <C> <C> <C>
Advanta Credit Card Master Trust.. $ 20,076 $ 20,067 $ 20,067 $ 19,937
<CAPTION>
Market Value
------------
<S> <C> <C> <C> <C>
CDC Investment (6.20%-7.25%),
(05/31/00-12/12/02) $ 50,730 $ 50,730 $ 50,730 $ 50,419
---------- ----------
$ 435,534 $ 433,303
---------- ----------
Temporary Cash Investments--7.5% $ 96,209 $ 96,209 $ 96,209
---------- ----------
Total Interest Income Fund--100% $1,292,175 $1,286,014
---------- ----------
</TABLE>
S-3
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
EMPLOYER IDENTIFICATION NUMBER: 58-1533433
H4(i)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(Continued)
(In Thousands)
<TABLE>
<CAPTION>
December 31, 1999
---------------------------
Number of
Shares or
Principal Carrying
Name of Issuer and Title of Issue Amount Cost Value
--------------------------------- --------- -------- --------
BOND FUND
<S> <C> <C> <C>
U.S. Government Securities--13.3%
Federal Natl. Mtg. Assn., 5.125%, 02/13/04.......... $ 800 $ 756 $ 753
GNMA Pool, 6.375%, 05/20/22......................... $ 4,055 $ 4,151 $ 4,109
U.S. Treasury Notes, 3.625%, 07/15/02............... $ 3,145 $ 2,610 $ 3,113
U.S. Treasury Notes, 3.375%, 01/15/07............... $ 2,755 $ 2,158 $ 2,596
U.S. Treasury Notes, 3.625%, 01/15/08............... $ 1,974 $ 1,892 $ 1,880
U.S. Treasury Notes, 3.875%, 01/15/09............... $ 819 $ 798 $ 791
U.S. Treasury Bonds, 12.000%, 08/15/13.............. $ 1,600 $ 3,092 $ 2,136
-------- --------
$ 15,457 $ 15,378
-------- --------
Loans Secured By Mortgages--50.5%
Advanta Mtg. Ln. Tr., 6.810%, 05/25/14.............. $ 2,745 $ 2,745 $ 2,733
Citicorp Mtg. Secs. Inc., 6.500%, 11/25/27.......... $ 9,959 $ 10,009 $ 9,766
Green Tree Finl. Corp., 6.970%, 04/01/31............ $ 3,000 $ 3,000 $ 2,983
Federal Home Ln. Mtg., PC GTI, 7.000%, 02/15/27..... $12,187 $ 12,260 $ 10,854
Government Natl. Mtg. Assn., 6.000%, 09/20/28....... $ 5,393 $ 5,194 $ 4,358
Norwest Asset Secs. Corp., 6.750%, 05/25/28......... $ 8,000 $ 7,813 $ 7,022
Residential Fdg. Mtg. Secs., I, 7.000%, 04/25/27.... $ 6,285 $ 6,399 $ 6,197
Residential Fdg. Secs. I Inc., 7.000%, 11/25/27..... $ 5,000 $ 5,052 $ 4,664
Small Business Admin. Part., 7.540%, 08/10/09....... $ 5,000 $ 5,000 $ 5,000
U.S. Dept. Veteran Affairs, 6.000%, 05/15/25........ $ 5,000 $ 5,037 $ 4,620
-------- --------
$ 62,509 $ 58,197
-------- --------
Corporate Obligations--10.4%
Case Cr. Corp. 5.850%, 02/20/01..................... $ 2,100 $ 2,070 $ 2,063
Sanwa Finl. Aruba AEC 8.350%, 07/15/09.............. $ 2,000 $ 2,005 $ 2,007
Sumitome Bk. Intl. NV 8.500%, 06/15/09.............. $ 5,000 $ 5,096 $ 5,068
USA Waste Svcs. Inc. 6.125%, 07/15/01............... $ 3,000 $ 2,994 $ 2,855
-------- --------
$ 12,165 $ 11,993
-------- --------
Corporate Debt Preferred--24.2%
Associates Corp. North Amer. 5.750%, 11/01/03....... $ 5,000 $ 4,998 $ 4,769
Ford Motor Credit Company 7.750%, 11/15/02.......... $ 5,000 $ 5,317 $ 5,083
General Mtrs. Accept. Corp. 5.750%, 11/10/03........ $ 5,000 $ 4,981 $ 4,761
General Mtrs. Accept. Corp. 6.750%, 02/07/02........ $ 6,000 $ 6,134 $ 5,968
Philadelphia Elec. Co. 5.625%, 11/01/01............. $ 5,000 $ 4,938 $ 4,881
Philip Morris 7.250%, 01/15/03...................... $ 300 $ 311 $ 295
Transamerica Finl. Corp. Mtn. 6.000%, 12/14/01...... $ 2,200 $ 2,200 $ 2,199
-------- --------
$ 28,879 $ 27,956
-------- --------
Temporary Cash Investments--1.5%.................... 1,786 $ 1,786 $ 1,786
-------- --------
$ 1,786 $ 1,786
-------- --------
Total Bond Fund--100.0%............................ $120,796 $115,310
-------- --------
</TABLE>
S-4
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
EMPLOYER IDENTIFICATION NUMBER: 58-1533433
H4(i)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(Continued)
(In Thousands)
<TABLE>
<CAPTION>
December 31, 1999
-------------------------------
Number of
Shares or
Principal Carrying
Name of Issuer and Title of Issue Amount Cost Value
--------------------------------- --------- ---------- ----------
BALANCED FUND
<S> <C> <C> <C>
BT Equity Index Fund--54.3%................................. 21 $ 42,279 $ 75,464
---------- ----------
BT Pyramid Large Capitalization--34.9%...................... 22,325 $ 39,065 $ 48,530
---------- ----------
U.S. Treasury Bill, Exp. 03/16/00--0.8%..................... $1,060 $ 1,040 $ 1,040
---------- ----------
U.S. Treasury Bill, Exp. 05/11/00--0.7%..................... $1,010 $ 985 $ 985
---------- ----------
Temporary Cash Investments--9.3%............................ 12,975 $ 12,975 $ 12,975
---------- ----------
Total Balanced Fund--100.0%............................... $ 96,344 $ 138,994
---------- ----------
FIDELITY GROWTH & INCOME PORTFOLIO
Shares of Fidelity Secs. Growth & Income Com. Stk.--100.0%.. 5,566 $ 201,810 $ 262,475
---------- ----------
Total Fidelity Growth & Income Portfolio--100.0%.......... $ 201,810 $ 262,475
---------- ----------
VANGUARD INDEX TRUST GROWTH PORTFOLIO
Shares of Vanguard Index--100.0%............................ 8,636 $ 266,158 $ 340,612
---------- ----------
Total Vanguard Index Trust Growth Portfolio--100.0%....... $ 266,158 $ 340,612
---------- ----------
DFA U.S. 6-10 VALUE PORTFOLIO II
Shares of Dimensional Invt Grp Small Cap Val. Com. Stk.--
100.0%..................................................... 4,800 $ 76,050 $ 74,162
---------- ----------
Total DFA U.S. 6-10 Value Portfolio II--100.0%............ $ 76,050 $ 74,162
---------- ----------
T. ROWE PRICE MID-CAP GROWTH
Shares of T. Rowe Price Mid-Cap Growth--100.0%.............. 2,464 $ 78,206 $ 98,869
---------- ----------
Total T. Rowe Price Mid-Cap Growth--100.0%................ $ 78,206 $ 98,869
---------- ----------
DFA U.S. LARGE CAP VALUE II FUND
Shares of Dimensional Invt Grp Inc Lrge Cap Val. Com. Stk.--
100.0%..................................................... 2,255 $ 38,906 $ 37,252
---------- ----------
Total DFA U.S. Large Cap Value II Fund--100.0%............ $ 38,906 $ 37,252
---------- ----------
</TABLE>
S-5
<PAGE>
BELLSOUTH MASTER SAVINGS TRUST
EMPLOYER IDENTIFICATION NUMBER: 58-1533433
H4(i)--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(Continued)
(In Thousands)
<TABLE>
<CAPTION>
December 31, 1999
--------------------------------
Number of
Shares or
Principal Carrying
Name of Issuer and Title of Issue Amount Cost Value
--------------------------------- --------- ---------- -----------
DFA INTERNATIONAL VALUE II FUND
<S> <C> <C> <C>
Shares of Dimensional Invt Grp Intl Com. Stk.--
100.0%......................................... 3,538 $ 42,306 $ 45,283
---------- -----------
Total DFA International Value II Fund--100.0%. $ 42,306 $ 45,283
---------- -----------
PERSONAL CHOICE RETIREMENT ACCOUNT
Charles Schwab Self Managed Fund--100.0%........ 43,594 $ 43,594 $ 43,594
---------- -----------
Total Personal Choice Retirement Account...... $ 43,594 $ 43,594
---------- -----------
PARTICIPANT LOANS
Loans to Participants (8.75%--.25%)--100.0%..... $106,282 $ 106,282 $ 106,282
---------- -----------
Total Loan Fund--100.0%....................... $ 106,282 $ 106,282
---------- -----------
CONTRIBUTION ACCOUNT++
Temporary Cash Investments--100.0%.............. 42 $ 42 $ 42
---------- -----------
Total Contribution Acct.--100.0%.............. $ 42 $ 42
---------- -----------
DISTRIBUTION ACCOUNT++
Temporary Cash Investments--100.0%.............. 47 $ 47 $ 47
---------- -----------
Total Distribution Acct.--100.0%.............. $ 47 $ 47
---------- -----------
EXPENSE ACCOUNT++
Temporary Cash Investments--100.0%.............. 3,290 $ 3,290 $ 3,290
---------- -----------
Total Expense Acct.--100.0%................... $ 3,290 $ 3,290
---------- -----------
EMPLOYEE STOCK OWNERSHIP PLAN
Shares of BellSouth Common Stock*#--99.2%....... 70,493 $1,014,404 $ 3,299,966
---------- -----------
Temporary Cash Investments--0.8%................ 25,505 $ 25,505 $ 25,505
---------- -----------
Total Employee Stock Ownership Fund--100.0%... $1,039,909 $ 3,325,471
---------- -----------
TOTAL INVESTMENTS............................. $7,276,780 $11,125,881
========== ===========
</TABLE>
--------
NOTES
Percentages represent the percentage of the investments of each fund of the
Master Savings Trust.
* This investment is a security issued by a party-in-interest to the Plan.
# Represents an individual investment which is 5% or more of the Net Assets
of the Master Savings Trust.
+ The contracts with these insurance companies (interest rates indicated in
parentheses) guarantee the repayment of principal and the crediting of
interest resulting in a composite effective annual interest rate of 6.23%
for the year 1999. The timing of the remittance of participating employee
contributions and other participating employee-directed transactions may
cause the actual yield to vary from this rate. The composite interest rate
is subject to annual adjustment.
++ These accounts are combined and presented as the "Other" fund in the Plan's
Financial Statements.
S-6
