SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 24, 2000
BELLSOUTH CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 1-8607 58-1533433
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
Room 15G03, 1155 Peachtree Street, N. E., Atlanta, Georgia 30309-3610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(404) 249-2000
<PAGE>
Item 5. Other Events
Fourth Quarter 1999 Earnings
On January 24, 2000, BellSouth announced earnings for the fourth quarter
of 1999. See Exhibit 99 for a complete copy of the related press
release.
Earnings Guidance
For 2000, we are targeting EPS growth in the 10%-12% range.
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Cautionary Language Concerning Forward-Looking Statements
- --------------------------------------------------------------------------
Statements that do not address historical performance are based on our
assumptions and estimates and are subject to risks and uncertainties. For these
statements, we claim the protection of the safe harbor for forward-looking
statements provided by the Private Securities Litigation Reform Act of 1995.
Factors that could affect future operating results and financial position and
could cause actual results to differ materially from those expressed in the
forward-looking statements are:
o a change in economic conditions in domestic or international markets where
we operate or have material investments which would affect demand for our
services;
o the intensity of competitive activity and its resulting impact on pricing
strategies and new product offerings;
o further delay in our entry into the interLATA long distance market;
o higher than anticipated start-up costs or significant up-front investments
associated with new business initiatives;
o unanticipated higher capital spending from the deployment of new
technologies; and
o unsatisfactory results in regulatory actions including access reform,
universal service, terms of interconnection and unbundled network elements
and resale rates.
This list of cautionary statements is not exhaustive. These and other
developments could cause our actual results to differ materially from those
forecast or implied in the forward-looking statements. You are cautioned not to
place undue reliance on these forward-looking statements, which are current only
as of the date of this filing. We have no obligation to publicly release the
results of any revisions to these forward-looking statements to reflect events
or circumstances after the date of this filing.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No.
99 Press Release - Fourth Quarter 2000 Earnings
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
BELLSOUTH CORPORATION
By: /s/ W. Patrick Shannon
W. Patrick Shannon
Vice President and Controller
January 24, 2000
FOR MORE INFORMATION FOR IMMEDIATE RELEASE
Jeff Battcher (404-713-0274) January 24, 2000
Pattie Kushner (404-249-2365)
BellSouth EPS Grows 26.2% in Fourth Quarter
Internet, data, wireless, international fuel $25 billion annual revenues;
1999 EPS up 22% before special items
ATLANTA - BellSouth Corporation (NYSE: BLS) reported earnings per share (EPS) of
53 cents (before one-time gains) in the fourth quarter of 1999, a gain of 26.2
percent compared to 42 cents in the final quarter of 1998. For the year,
normalized EPS improved 22 percent to $2.00, and BellSouth's annual revenues
exceeded $25 billion for the first time.
Continued strong performance in the company's primary growth areas drove results
for the quarter and year. In the U.S., customer demand remained brisk for
BellSouth Internet, data, wireless and calling feature services. In the
company's growing number of international markets, wireless customers increased
70.3 percent in 1999.
"The fourth quarter was important to BellSouth investors because of the
continued strength of our current operations," said Duane Ackerman, chairman and
chief executive officer. "In addition, the new European alliance we formed in
December with KPN Royal Dutch Telecom captures at least $8.9 billion in value
and gives us options for the future in our fastest growing business segments,
wireless and data."
Internet, E-Commerce, Data
BellSouth's array of Internet and E-commerce products and services helped
generate digital and data revenues of $760 million in the fourth quarter of
1999, a 30.1 percent increase compared to $584 million in the same quarter a
year ago. For 1999 as a whole, data revenues surged 33.1 percent to $2.8 billion
from $2.1 billion in 1998. Access line equivalents, which include broadband
services as well as traditional switched lines, grew at an annual rate of nearly
16 percent. The company's Internet service, BellSouth.net, grew more than 82
percent in 1999 and now has nearly 700,000 consumer and business customers.
<PAGE>
Domestic Wireless
Domestic cellular and PCS revenue of $836 million in the fourth quarter of 1999
grew 18.6 percent compared to $705 million in the same quarter of 1998. U.S.
wireless customers increased 661,000 in 1999 as a whole (based on the company's
ownership percentages), including a fourth quarter increase of 202,000 driven by
another busy holiday season. Customer growth for the year was 14.1 percent
(adjusted for sale of Honolulu Cellular in the third quarter of 1999).
International
BellSouth's international strategy continued to boost growth. Based on the
company's ownership percentages, BellSouth's international wireless customer
base grew by 2.4 million in 1999, or 70.3 percent. On a proportionate basis,
fourth quarter international wireless revenues climbed 18.0 percent, to $781
million in 1999 from $662 million in the same quarter of the previous year
(adjusted for the sale of New Zealand operations in the fourth quarter of 1998).
Worldwide, BellSouth now serves a total of nearly 19 million wireless customers
(11.2 million on a proportionate basis).
Calling Features
Calling features such as Caller ID Deluxe and the new BellSouth(r) Privacy
Director(SM) service continued to boost performance in three ways - as monthly
subscriptions, on a per use basis, and as part of value packages such as
BellSouth(r) Solutions and the BellSouth(r) Complete Choice(r) Plan. Calling
feature revenues were $500 million in the fourth quarter of 1999, compared to
$439 million in the same three months of 1998. For the year, revenues improved
16.8 percent to $1.9 billion. BellSouth Solutions, the company's newest package,
was introduced in August 1999 for residential and small business customers. It
gives customers Internet access, wireless, paging and local phone service with
up to 20 calling features -- all on one bill, with one number to call for
service.
Fourth Quarter
BellSouth's fourth quarter revenues were a record $6.7 billion in 1999, a gain
of 8.3 percent compared to $6.2 billion a year earlier. Net income of $1.1
billion included a foreign currency gain of $47 million, or 2 cents per share.
Normalized net income of $1.0 billion increased 21.1 percent compared to the
fourth quarter of 1998, when net income was $831 million (before one-time gains
totaling $172 million).
<PAGE>
Full Year 1999
For the year, BellSouth posted record revenues of $25.2 billion, an increase of
9.1 percent compared to 1998. Excluding special items in both years, 1999
normalized EPS of $2.00 compared to $1.64 in 1998. Reported EPS was $1.80 in
1999, compared to $1.78 in the previous year. As disclosed in the fourth
quarter, 1999 EPS reflects a second quarter non-cash charge of 10 cents related
to the revised reporting of an asset swap. Net income excluding special items
was $3.8 billion in 1999, compared to $3.3 billion in 1998. Reported net income
in 1999 was $3.4 billion versus $3.5 billion in 1998.
BellSouth is a $25 billion communications services company. It provides
telecommunications, wireless communications, cable and digital TV, directory
advertising and publishing, and Internet and data services to more than 37
million customers in 20 countries worldwide.
NOTE: For more information about BellSouth Corporation, visit the BellSouth Web
page at http://www.bellsouth.com/
<PAGE>
BellSouth Corporation
Consolidated Statements of Income (unaudited)
(amounts in millions, except per share data)
Quarter Ended
12/31/99 12/31/98 % Change
Operating Revenues
Wireline communications
Local service $2,774 $2,575 7.7%
Network access 1,183 1,174 0.8%
Long distance 147 181 (18.8%)
Other wireline 353 271 30.3%
Total wireline
communications 4,457 4,201 6.1%
Domestic wireless 836 705 18.6%
International operations 588 545 7.9%
Advertising and publishing 720 680 5.9%
Other 80 37 N/M
Total Operating Revenues 6,681 6,168 8.3%
Operating Expenses
Operational and support
expenses 3,643 3,486 4.5%
Depreciation and amortization 1,196 1,129 5.9%
Provision for asset impairment - - N/M
Total Operating Expenses 4,839 4,615 4.9%
Operating Income 1,842 1,553 18.6%
Interest Expense 293 226 29.6%
Other Income (Expense), net 73 310 N/M
Income Before Income Taxes 1,622 1,637 (0.9%)
Provision for Income Taxes 569 634 (10.3%)
Net Income $1,053 $1,003 5.0%
Diluted:
Weighted Average Common
Shares Outstanding 1,901 1,972 (3.6%)
Earnings Per Share $0.55 $0.51 7.8%
Year Ended
12/31/99 12/31/98 % Change
Operating Revenues
Wireline communications
Local service $10,887 $10,033 8.5%
Network access 4,761 4,632 2.8%
Long distance 608 713 (14.7%)
Other wireline 1,198 1,023 17.1%
Total wireline
communications 17,454 16,401 6.4%
Domestic wireless 3,191 2,723 17.2%
International operations 2,289 1,995 14.7%
Advertising and publishing 2,010 1,891 6.3%
Other 280 113 N/M
Total Operating Revenues 25,224 23,123 9.1%
Operating Expenses
Operational and support
expenses 13,796 12,862 7.3%
Depreciation and amortization 4,671 4,357 7.2%
Provision for asset impairment 320 - N/M
Total Operating Expenses 18,787 17,219 9.1%
Operating Income 6,437 5,904 9.0%
Interest Expense 1,030 837 23.1%
Other Income (Expense), net 81 684 N/M
Income Before Income Taxes 5,488 5,751 (4.6%)
Provision for Income Taxes 2,040 2,224 (8.3%)
Net Income $3,448 $3,527 (2.2%)
Diluted:
Weighted Average Common
Shares Outstanding 1,916 1,984 (3.4%)
Earnings Per Share $1.80 $1.78 1.1%
Selected Financial and Operating Data
Quarter Ended
12/31/99 12/31/98 % Change
EBITDA (a) $3,038 $2,682 13.3%
EBITDA margin 45.5% 43.5% +200bps
Return on average
equity (annualized) 30.0% 25.1% + 490bps
Return on average total
capital (annualized) 17.1% 16.3% +80bps
Dividends per share $0.19 $0.19 0.0%
Capital expenditures $1,717 $1,468 17.0%
Year Ended
12/31/99 12/31/98 % Change
EBITDA (a) $11,428 $10,261 11.4%
EBITDA margin 45.3% 44.4% +90bps
Return on average
equity (annualized) 24.0% 22.3% +170bps
Return on average total
capital (annualized) 14.7% 15.1% -40bps
Dividends per share $0.76 $0.73 4.1%
Capital expenditures $6,173 $5,212 18.4%
As of
12/31/99 12/31/98 % Change
Common shares outstanding 1,883 1,950 (3.4%)
Book value per share $7.86 $8.26 (4.8%)
Debt ratio 53.1% 43.0% +1,010bps
Total employees 96,162 88,450 8.7%
(a) Year-to-date 1999 excludes a $320 million non-cash charge for asset
impairment recorded in second quarter 1999.
<PAGE>
BellSouth Corporation
Normalized Earnings Summary (unaudited)
($ in millions, except per share data)
Quarter Ended
12/31/99 12/31/98 % Change
Reported Net Income $1,053 $1,003 5.0%
Foreign currency (gain) loss(a) (47) - -
Loss on asset impairment(b) - - -
Recognition of foreign
investment tax credits(c) - - -
Gain on sale of Honolulu
Cellular - - -
Gain on sale of BellSouth
New Zealand - (110) -
Income from Prime loan
settlement (d) - (62) -
Gain on sale of ITT World
Directories(e) - - -
Normalized Net Income $1,006 $831 21.1%
Reported Diluted Earnings Per Share $0.55 $0.51 7.8%
Foreign currency (gain) loss(a) (0.02) - -
Loss on asset impairment(b) - - -
Recognition of foreign
investment tax credits(c) - - -
Gain on sale of Honolulu
Cellular - - -
Gain on sale of BellSouth
New Zealand - (0.06) -
Income from Prime loan
settlement (d) - (0.03) -
Gain on sale of ITT World
Directories(e) - - -
Normalized Diluted Earnings Per Share $0.53 $0.42 26.2%
Normalized return on average
equity (annualized) 28.7% 20.8% +790bps
Normalized return on average
total capital (annualized) 16.5% 13.9% +260bps
Year Ended
12/31/99 12/31/98 % Change
Reported Net Income $3,448 $3,527 (2.2%)
Foreign currency (gain) loss(a) 308 - -
Loss on asset impairment(b) 187 - -
Recognition of foreign
investment tax credits(c) (95) - -
Gain on sale of Honolulu
Cellular (23) - -
Gain on sale of BellSouth
New Zealand - (110) -
Income from Prime loan
settlement (d) - (62) -
Gain on sale of ITT World
Directories(e) - (96) -
Normalized Net Income $3,825 $3,259 17.4%
Reported Diluted Earnings Per Share $1.80 $1.78 1.1%
Foreign currency (gain) loss(a) 0.16 - -
Loss on asset impairment(b) 0.10 - -
Recognition of foreign
investment tax credits(c) (0.05) - -
Gain on sale of Honolulu
Cellular (0.01) - -
Gain on sale of BellSouth
New Zealand - (0.06) -
Income from Prime loan
settlement (d) - (0.03) -
Gain on sale of ITT World
Directories(e) - (0.05) -
Normalized Diluted Earnings Per Share $2.00 $1.64 22.0%
Normalized return on average
equity (annualized) 26.7% 20.6% +610bps
Normalized return on average
total capital (annualized) 16.0% 14.1% +190bps
(a) Represents foreign currency gains and losses recorded by our equity
investees in Brazil. These gains and losses are primarily due to
fluctuations in the Brazilian Real to U.S. dollar exchange rate and the
resulting mark-to-market adjustment of the investees' US dollar-denominated
debt.
(b) 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.
(c) Represents foreign investment tax credits generated in prior years.
(d) Represents the contingent interest and prepayment penalties associated with
the repayment of the Prime Loan during fourth quarter 1998.
(e) Represents the after-tax gain associated with additional proceeds received
in first quarter 1998 on the July 1997 sale of ITT World Directories,
included in Other Income (Expense), net.
Software Capitalization
The new accounting rules on capitalization of internal software costs were
adopted in first quarter 1999. The following table adjusts our 1999 normalized
operating results for the impact of adoption:
Quarter Ended
12/31/99 12/31/98 % Change
Operational and support expenses $3,742 $3,486 7.3%
Depreciation and amortization 1,166 1,129 3.3%
Total Operating Expenses $4,908 $4,615 6.3%
Adjusted:
Net Income $961 $831 15.6%
Earnings Per Share $.51 $.42 21.4%
Year Ended
12/31/99 12/31/98 % Change
Operational and support expenses $14,327 $12,862 11.4%
Depreciation and amortization 4,592 4,357 5.4%
Total Operating Expenses $18,919 $17,219 9.9%
Adjusted:
Net Income $3,540 $3,259 8.6%
Earnings Per Share $1.85 $1.64 12.8%
<PAGE>
BellSouth Corporation
Consolidated Balance Sheets (unaudited)
(amounts in millions, except per share data)
December 31, December 31,
1999 1998
Assets
Current Assets:
Cash and cash equivalents $1,069 $3,003
Temporary cash investments 323 184
Accounts receivable--net of
allowance for uncollectibles
of $312 and $251 5,177 4,629
Material and supplies 451 431
Other current assets 367 459
Total Current Assets 7,387 8,706
Investments and Advances 6,062 2,861
Property, Plant and Equipment 61,009 57,974
Less: accumulated depreciation 36,378 34,034
Property, Plant and Equipment, net 24,631 23,940
Deferred Charges and Other Assets 1,564 1,028
Intangible Assets, net 3,774 2,875
Total Assets $43,418 $39,410
Liabilities and Shareholders' Equity
Current Liabilities:
Debt maturing within one year $7,995 $3,454
Accounts payable 1,961 2,219
Other current liabilities 3,781 3,477
Total Current Liabilities 13,737 9,150
Long-Term Debt 8,771 8,715
Noncurrent Liabilities:
Deferred income taxes 2,691 2,512
Unamortized investment tax credits 126 167
Other noncurrent liabilities 3,299 2,756
Total Noncurrent Liabilities 6,116 5,435
Shareholders' Equity:
Common stock, $1 par value 2,020 2,020
Paid-in capital 6,771 6,766
Retained earnings 11,456 9,479
Accumulated other comprehensive income (379) (64)
Shares held in trust and treasury (4,798) (1,752)
Guarantee of ESOP debt (276) (339)
Total Shareholders' Equity 14,794 16,110
Total Liabilities and Shareholders' Equity $43,418 $39,410
<PAGE>
BellSouth Corporation
Consolidated Statements of Income ($ in millions) (unaudited)
Wireline Communications
Quarter Ended
12/31/99 12/31/98 % Change
Operating Revenues
Local service $2,774 $2,575 7.7%
Network access 1,183 1,174 0.8%
Long distance 147 181 (18.8%)
Other wireline 438 341 28.4%
Total Operating Revenues 4,542 4,271 6.3%
Operating Expenses
Operational and support expenses 2,113 2,092 1.0%
Depreciation and amortization 842 854 (1.4%)
Total Operating Expenses 2,955 2,946 0.3%
Operating Income 1,587 1,325 19.8%
Interest Expense 150 142 5.6%
Other Income, net - 1 N/M
Income Before Income Taxes 1,437 1,184 21.4%
Provision for Income Taxes 521 427 22.0%
Segment Net Income(1) $916 $757 21.0%
Year Ended
12/31/99 12/31/98 % Change
Operating Revenues
Local service $10,887 $10,033 8.5%
Network access 4,761 4,632 2.8%
Long distance 608 713 (14.7%)
Other wireline 1,516 1,244 21.9%
Total Operating Revenues 17,772 16,622 6.9%
Operating Expenses
Operational and support expenses 8,551 8,387 2.0%
Depreciation and amortization 3,393 3,363 0.9%
Total Operating Expenses 11,944 11,750 1.7%
Operating Income 5,828 4,872 19.6%
Interest Expense 560 551 1.6%
Other Income, net 18 3 N/M
Income Before Income Taxes 5,286 4,324 22.2%
Provision for Income Taxes 1,971 1,573 25.3%
Segment Net Income(1) $3,315 $2,751 20.5%
Selected Financial and Operating Data
Quarter Ended
12/31/99 12/31/98 % Change
(amounts in millions)
EBITDA $2,429 $2,179 11.5%
EBITDA margin 53.5% 51.0% +250bps
Convenience feature revenues $500 $439 13.9%
Access minutes of use 27,778 26,613 4.4%
Long distance messages 139 183 (24.0%)
Capital expenditures $1,170 $919 27.3%
Year Ended
12/31/99 12/31/98 % Change
(amounts in millions)
EBITDA $9,221 $8,235 12.0%
EBITDA margin 51.9% 49.5% +240bps
Convenience feature revenues $1,911 $1,636 16.8%
Access minutes of use 110,088 104,373 5.5%
Long distance messages 644 784 (17.9%)
Capital expenditures $4,638 $3,512 32.1%
As of
12/31/99 12/31/98 % Change
Debt ratio 51.6% 47.8% +380bps
Equivalent access lines in
service (thousands):
Switched access lines 24,477 24,025 1.9%
Access line equivalents 20,375 14,744 38.2%
Total equivalent access
lines in service 44,852 38,769 15.7%
Telephone employees 64,160 60,561 5.9%
<PAGE>
BellSouth Corporation
Supplemental Operating Data (in thousands)
Wireline Communications Network Access Lines In Service(a)
As of
12/31/99 12/31/98 % Change
Switched access lines
Residence 16,958 16,457 3.0%
Business 7,254 7,294 (0.5%)
Other 265 274 (3.3%)
Total switched access lines in service 24,477 24,025 1.9%
Access line equivalents(b)(c)
Selected digital data services:
Basic rate ISDN 221 178 24.2%
Primary rate ISDN 867 526 64.8%
DS0 706 445 58.7%
DS1 4,463 3,455 29.2%
DS3 & higher 14,118 10,140 39.2%
Total digital data lines in service 20,375 14,744 38.2%
Total equivalent access lines in service 44,852 38,769 15.7%
(a) Prior period operating data are often revised at later dates to reflect
updated information. The above information reflects the latest data
available for the periods indicated.
(b) Access line equivalents are derived by converting high capacity data lines
to the estimated capacity of one switched access line. The conversion
factors used are as follows: Basic rate ISDN=2.5 DS0s, ADSL=6 DS0s, Primary
rate ISDN=24 DS0s, DS1=24 DS0s, DS3=672 DS0s, OC3=2,016 DS0s, OC12=8,064
DS0s, OC24=16,128 DS0s and OC48=32,256 DS0s. Basic rate ISDN lines are
included in our switched access line count as equaling one line.
(c) Revenues associated with digital data lines are derived from the sale of
specific high-bandwidth products provisioned over transmission lines with
DS0 or greater capacity. While access line equivalent counts have a
directional relationship with digital and data revenues, growth rates
cannot be compared on an equivalent basis.
<PAGE>
BellSouth Corporation
Consolidated Statements of Income ($ in millions) (unaudited)
Domestic Wireless(2)
Quarter Ended Year Ended
12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
Operating revenues $837 $707 18.4% $3,204 $2,730 17.4%
Segment net income(1) $48 $61 (21.3%) $234 $283 (17.3%)
Total assets $6,097 $6,540 (6.8%)
Proportionate Basis(3) Selected Financial and Operating Data
Quarter Ended
12/31/99 12/31/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $782 $713 9.7%
Net income(5) $48 $49 (2.0%)
Operating cash flow(7) $286 $265 7.9%
Operating cash flow margin(8) 36.6% 37.2% -60bps
Customer net adds in period
(excluding ownership changes) 198 258 (23.3%)
Average monthly revenue per
customer(9) $53 $52 1.9%
Year Ended
12/31/99 12/31/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $2,999 $2,717 10.4%
Net income(5) $235 $278 (15.5%)
Operating cash flow(7) $1,147 $1,109 3.4%
Operating cash flow margin(8) 38.2% 40.8% -260bps
Customer net adds in period
(excluding ownership changes) 679 754 (9.9%)
Average monthly revenue per
customer(9) $51 $52 (1.9%)
As of
12/31/99 12/31/98 % Change
Customers 5,337 4,796 11.3%
POPs 58,662 58,122 0.9%
Penetration rate(10) 9.4% 9.2% +20bps
Property, plant and
equipment, gross $4,588 $4,929 (6.9%)
Normalized Financial and Operating Data
During the fourth quarter of 1998, we reorganized our Los Angeles and
Houston/Galveston cellular partnerships with AT&T. 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
12/31/99 12/31/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $782 $675 15.9%
Customers 5,337 4,676 14.1%
POPs 58,662 57,242 2.5%
Penetration rate(10) 9.4% 9.2% +20bps
Year Ended
12/31/99 12/31/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $2,961 $2,568 15.3%
<PAGE>
BellSouth Corporation
Consolidated Statements of Income ($ in millions) (unaudited)
International Operations(2)
Quarter Ended
12/31/99 12/31/98 % Change
Operating revenues $589 $545 8.1%
Segment net income
(loss)(1)(6) ($43) ($40) 7.5%
Total assets $4,869 $4,449 9.4%
Year Ended
12/31/99 12/31/98 % Change
Operating revenues $2,291 $1,995 14.8%
Segment net income
(loss)(1)(6) ($4) ($62) N/M
Proportionate Basis(3) Selected Financial and Operating Data
Quarter Ended
12/31/99 12/31/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $781 $668 16.9%
Net income (5)(6) ($16) ($24) (33.3%)
Operating cash flow(7) $186 $174 6.9%
Operating cash flow margin(8) 23.8% 26.0% -220bps
Customer net adds in period
(excluding ownership changes) 630 483 30.4%
Average monthly revenue per
customer(9) $42 $65 (35.4%)
Year Ended
12/31/99 12/31/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $2,944 $2,187 34.6%
Net income (5)(6) $54 $7 N/M
Operating cash flow(7) $779 $570 36.7%
Operating cash flow margin(8) 26.5% 26.1% +40bps
Customer net adds in period
(excluding ownership changes) 2,312 1,394 65.9%
Average monthly revenue per
customer(9) $48 $65 (26.2%)
As of
12/31/99 12/31/98 % Change
Wireless:
Customers 5,856 3,439 70.3%
POPs 146,895 108,313 35.6%
Penetration rate(10) 4.7% 3.5% +120bps
Property, plant and
equipment, gross $3,579 $3,013 18.8%
Normalized Financial and Operating Data
During 1998, we sold our interest in BellSouth New Zealand. In the following
table, we have excluded this operation from the prior period financial and
operating data to provide more meaningful comparative information for existing
operations.
Quarter Ended
12/31/99 12/31/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $781 $662 18.0%
Customers 5,856 3,439 70.3%
POPs 146,895 108,313 35.6%
Penetration rate(10) 4.7% 3.5% +120bps
Year Ended
12/31/99 12/31/98 % Change
(amounts in millions, except
customer data in thousands)
Wireless revenues, net(4) $2,944 $2,119 38.9%
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BellSouth Corporation
Supplemental Operating Data - International Customers and POPs by Country
(Proportionate Basis(3) in thousands)
Customers As of
Country Brand 12/31/99 12/31/98 % Change
Argentina Movicom 761 575 32.3%
Interior - - -
Brazil BCP (Sao Paulo) 574 292 96.6%
BCP (Northeast) 206 58 N/M
Chile BellSouth (Santiago) 339 192 76.6%
Chile BellSouth (Interior) 13 - N/M
Ecuador BellSouth 166 103 61.2%
Nicaragua BellSouth 34 15 126.7%
Panama BSC de Panama 53 22 140.9%
Peru Tele2000 (Lima) 286 140 104.3%
Tele2000 (Interior) 7 - -
Uruguay Movicom 53 24 120.8%
Venezuela Telcel 1,734 913 89.9%
Guatemala Guatemala - - N/M
Subtotal Latin America 4,226 2,334 81.1%
Denmark Sonofon 379 333 13.8%
Germany e-plus 767 404 89.9%
India SkyCell 5 4 -
Israel Cellcom 479 364 31.6%
Subtotal Europe and Asia/Pacific 1,630 1,105 47.5%
Total International 5,856 3,439 70.3%
POPs As of
Country Brand 12/31/99 12/31/98 % Change
Argentina Movicom 8,775 8,515 3.1%
Interior 14,690 - N/M
Brazil BCP (Sao Paulo) 8,049 8,004 0.6%
BCP (Northeast) 12,451 12,451 -
Chile BellSouth (Santiago) 7,400 7,400 -
Chile BellSouth (Interior) 7,400 - N/M
Ecuador BellSouth 10,996 10,906 0.8%
Nicaragua BellSouth 2,581 2,581 -
Panama BSC de Panama 1,180 1,135 -
Peru Tele2000 (Lima) 6,776 4,133 63.9%
Tele2000 (Interior) 16,456 10,037 64.0%
Uruguay Movicom 966 966 -
Venezuela Telcel 18,132 17,742 2.2%
Guatemala Guatemala 6,600 - N/M
Subtotal Latin America 122,452 83,870 46.0%
Denmark Sonofon 2,465 2,465 -
Germany e-plus 18,545 18,545 -
India SkyCell 1,348 1,348 -
Israel Cellcom 2,085 2,085 -
Subtotal Europe and Asia/Pacific 24,443 24,443 -
Total International 146,895 108,313 35.6%
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BellSouth Corporation
Consolidated Statements of Income ($ in millions) (unaudited)
Advertising and Publishing
Quarter Ended Year Ended
12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
Operating revenues $730 $680 7.4% $2,028 $1,891 7.2%
Segment net income(1) $214 $199 7.5% $556 $530 4.9%
Total assets $1,662 $1,288 29.0%
Selected Financial and Operating Data
Quarter Ended Year Ended
12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
EBITDA $348 $329 5.8% $932 $874 6.6%
EBITDA margin 47.7% 48.4% -70bps 46.0% 46.2% -20bps
Other
Quarter Ended Year Ended
12/31/99 12/31/98 % Change 12/31/99 12/31/98 % Change
Operating revenues $187 $99 88.9% $651 $340 91.5%
Segment net loss(1) ($60) ($89) 32.6% ($215) ($210) (2.4%)
Total assets $1,380 $1,273 8.4%
<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) International operations' fourth quarter and year-to-date 1999 segment net
income (loss) and proportionate basis net income (loss) excludes $47
million in gains and $308 million in losses, respectively, related to
fluctuations in the Brazilian Real to U.S. dollar exchange rate. The
results for the 1999 year-to-date period also exclude $95 million related
to the recognition of foreign investment tax credits.
(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).
