2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-1049
BellSouth Telecommunications, Inc.
(Exact name of registrant as specified in its charter)
Georgia 58-0436120
(State of Incorporation) (I.R.S. Employer
Identification Number)
675 West Peachtree Street, N. E., Atlanta, Georgia 30375
(Address of principal executive offices) (Zip Code)
Registrant's telephone number 404 529-8611
THE REGISTRANT, A WHOLLY-OWNED SUBSIDIARY OF BELLSOUTH CORPORATION,
MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH REDUCED
DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTION H(2).
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No ___
Table of Contents
Item
Page
Part I
1. Financial Statements 3
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Selected Operating Data 8
2. Management's Discussion and Analysis of
Results of Operations 10
Results of Operations 10
Volumes of Business 10
Operating Revenues 11
Operating Expenses 13
Other Income Statement Items 14
Regulatory and Competitive Environment 14
Regulation 14
Competition and Business Developments 15
Other Matters 16
Affiliated Transactions 16
Part II
6. Exhibits and Reports on Form 8-K 16
PART I -- FINANCIAL INFORMATION
BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
(In Millions)
For the Three Months
Ended March 31,
1996 1995
Operating Revenues:
Local service $ 1,930 $ 1,769
Interstate access 909 795
Intrastate access 218 226
Toll 207 281
Other 391 490
Total Operating Revenues 3,655 3,561
Operating Expenses:
Cost of services and
products 1,260 1,288
Depreciation and
amortization 798 746
Selling, general and
administrative 604 536
Total Operating Expenses 2,662 2,570
Operating Income 993 991
Interest Expense 139 140
Other Income, net 11 5
Income Before Income Taxes 865 856
Provision for Income Taxes 326 323
Net Income $ 539 $ 533
Retained Earnings:
At beginning of period $ 555 $ 3,521
Add: Net Income 539 533
Deduct: Dividends declared (382) (400)
At end of period $ 712 $ 3,654
The accompanying notes are an integral part of these financial statements.
BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(In Millions)
March 31, December 31,
1996 1995
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $ 31 $ 1,084
Accounts receivable, net of allowance for
uncollectibles of $91 and $94 2,809 2,941
Material and supplies 382 347
Other current assets 255 281
3,477 4,653
Investments In and Advances to Affiliates 276 279
Property, Plant and Equipment:
Property, Plant and Equipment 44,083 43,521
Accumulated Depreciation 25,410 24,777
18,673 18,744
Deferred Charges and Other Assets 364 257
Total Assets $ 22,790 $ 23,933
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Debt maturing within one year $ 1,191 $ 2,265
Accounts payable 989 1,332
Other current liabilities 2,204 1,934
4,384 5,531
Long-Term Debt 6,792 6,853
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,035 1,000
Unamortized investment tax credits 336 355
Other liabilities and deferred credits 2,138 2,227
3,509 3,582
Shareholder's Equity:
Common stock, one share, no par value 7,393 7,412
Retained earnings 712 555
8,105 7,967
Total Liabilities and Shareholder's Equity $ 22,790 $ 23,933
The accompanying notes are an integral part of these financial statements.
BELLSOUTH TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions)
For the Three Months
Ended March 31,
1996 1995
Cash Flows from Operating Activities:
Net income $ 539 $ 533
Adjustments to net income:
Depreciation 798 746
Provision for losses on bad debts 32 29
Deferred income taxes and unamortized investment tax
credits (14) (26)
Net change in accounts receivable and other current
assets 112 129
Net change in accounts payable and other current
liabilities (238) (211)
Net change in deferred charges and other assets (105) (15)
Net change in other liabilities and deferred credits 17 79
Other reconciling items, net (61) 8
Net cash provided by operating activities 1,080 1,272
Cash Flows from Investing Activities:
Capital expenditures (713) (675)
Other investing activities, net 5 1
Net cash used for investing activities (708) (674)
Cash Flows from Financing Activities:
Proceeds from short-term borrowings 3,917 2,990
Repayment of short-term borrowings (4,524) (3,163)
Repayment of long-term debt (485) --
Advances from parent and affiliates 172 168
Repayment of advances from parent and affiliates (166) (169)
Dividends paid to parent (319) (400)
Other financing activities, net (20) (5)
Net cash used for financing activities (1,425) (579)
Net Increase (Decrease) in Cash and Cash Equivalents (1,053) 19
Cash and Cash Equivalents at Beginning of Period 1,084 94
Cash and Cash Equivalents at End of Period $ 31 $ 113
The accompanying notes are an integral part of these financial statements.
BELLSOUTH TELECOMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Millions)
(Unaudited)
Note A -- Preparation of Interim Financial Statements
The consolidated financial statements of BellSouth
Telecommunications, Inc. (BellSouth Telecommunications) have been
prepared in accordance with the rules and regulations of the
Securities and Exchange Commission (SEC). Certain amounts have
been reclassified from previous presentations. These consolidated
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. In
the opinion of BellSouth Telecommunications, these statements
include all adjustments necessary for a fair presentation of the
results of all interim periods reported herein. All adjustments
are of a normal recurring nature unless otherwise disclosed.
Certain information and footnote disclosures prepared in accordance
with generally accepted accounting principles have been either
condensed or omitted pursuant to SEC rules and regulations.
However, BellSouth Telecommunications believes that the disclosures
made are adequate for a fair presentation of results of operations,
financial position and cash flows. These consolidated financial
statements should be read in conjunction with the consolidated
financial statements and accompanying notes included in BellSouth
Telecommunications' latest annual report on Form 10-K. BellSouth
Telecommunications is a wholly-owned subsidiary of BellSouth
Corporation (BellSouth).
Effective June 30, 1995, BellSouth Telecommunications
discontinued application of Statement of Financial Accounting
Standards (SFAS) No. 71, "Accounting for the Effects of Certain
Types of Regulation."
Note B -- Supplemental Cash Flow Information
The following supplemental information is presented in accordance
with the provisions of SFAS No. 95, "Statement of Cash Flows."
For the Three Months
Ended March 31,
1996 1995
Cash Paid For:
Income taxes $ 23 $ 28
Interest $ 116 $ 167
BELLSOUTH TELECOMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In Millions)
(Unaudited)
Note C -- Transactions with Affiliates
Through 1995, BellSouth Telecommunications had a contractual
agreement with BellSouth Advertising & Publishing Corporation
(BAPCO), an affiliated company, wherein BAPCO published certain
telephone directories and in return paid publication fees to
BellSouth Telecommunications for publishing rights and other
services. Effective January 1, 1996, BellSouth Telecommunications
and BAPCO established a new contract based on fees for services
rendered between the companies. The new contract eliminated
publication fees received by BellSouth Telecommunications. Such
fees were $164 in first quarter 1995.
BELLSOUTH TELECOMMUNICATIONS, INC.
SELECTED OPERATING DATA
(Unaudited)
Percent Change
1996 vs. 1995 vs.
1996 1995 1994
Network Access Lines in Service at March 31 (Thousands)(a):
By Type:
Residence 14,865 3.5% 3.4%
Business 6,370 7.9 7.7
Other 257 0.8 0.6
Total Access Lines 21,492 4.8 4.6
By State:
Florida 5,702 5.1 4.9
Georgia 3,624 6.2 5.8
Tennessee 2,473 4.6 4.5
Louisiana 2,136 3.6 3.7
North Carolina 2,134 5.2 5.4
Alabama 1,818 4.0 3.5
South Carolina 1,313 4.0 3.8
Mississippi 1,177 3.6 3.7
Kentucky 1,115 3.7 3.2
Total Access Lines 21,492 4.8 4.6
For the Three Percent Change for
Months Ended the Periods Ended
March 31, 1996 vs. 1995 vs.
1996 1995 1994
Access Minutes of Use (Millions)(a)(b):
Interstate 16,660 10.1% 7.7%
Intrastate 5,118 13.0 13.1
Total Minutes of Use 21,778 10.8 8.9
Toll Messages (Millions)(a) 281 (24.1) (4.3)
(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) Minutes of Use are classified as either interstate or
intrastate based on the percentage interstate usage factor. This
factor is updated periodically.
BELLSOUTH TELECOMMUNICATIONS, INC.
SELECTED OPERATING DATA (Continued)
(Unaudited)
For the Three
Months Ended
March 31,
1996
Ratio of Earnings to Fixed Charges (c) 6.3
(c) For the purpose of this ratio: (i) earnings have been
calculated by adding income before income taxes, gross interest
expense and such portion of rental expense representative of the
interest factor on such rentals; (ii) fixed charges are comprised
of gross interest expense and such portion of rental expense
representative of the interest factor on such rentals.
At At
March 31, December 31,
1996 1995
Debt Ratio (d) 49.5% 51.9%
(d) This ratio is calculated by dividing the sum of debt maturing
within one year and long-term debt, net of unamortized debt
issuance costs, by the sum of shareholder's equity, debt maturing
within one year and long-term debt, net of unamortized debt
issuance costs. The debt ratio at December 31, 1995 excludes $485
in long-term debentures called in December and redeemed in January,
1996.
BELLSOUTH TELECOMMUNICATIONS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS
(Dollars in Millions)
Management's Discussion and Analysis of Results of Operations
(MD&A) should be read in conjunction with MD&A in BellSouth
Telecommunications, Inc.'s (BellSouth Telecommunications)
latest annual report on Form 10-K.
BellSouth Telecommunications is a wholly-owned subsidiary of
BellSouth Corporation (BellSouth). BellSouth Telecommunications
serves, in the aggregate, approximately two-thirds of the
population and one-half of the territory within Alabama, Florida,
Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South
Carolina and Tennessee. BellSouth Telecommunications primarily
provides local exchange service and toll communications services
within geographic areas, called Local Access and Transport Areas
(LATAs), and provides network access services to enable interLATA
communications using the long-distance facilities of interexchange
carriers. Through subsidiaries, other telecommunications services
and products are provided primarily within the nine-state BellSouth
Telecommunications region.
Approximately 89% and 86% of BellSouth Telecommunications' Total
Operating Revenues for the three-month periods ended March 31, 1996
and 1995, respectively, were from wireline services. Charges for
local, access and toll services for the three months ended March
31, 1996 accounted for approximately 59%, 35% and 6%, respectively,
of the wireline revenues discussed above. The remainder of
BellSouth Telecommunications' Total Operating Revenues was derived
principally from sales and maintenance of customer premises
equipment and other nonregulated services.
RESULTS OF OPERATIONS
For the Three
Months Ended
March 31,
1996 1995
Net Income $539 $533
For the three-month period ended March 31, 1996, Net Income
increased by $6 (1.1%). The increase resulted primarily from
continued strong growth in key business volumes and expense savings
attributable to employee reductions under restructuring and work
force reduction plans. The increase was substantially offset by
the elimination of publication fee revenue (see "Other Matters --
Affiliated Transactions").
Volumes of Business
The total number of access lines in service since March 31, 1995
increased by approximately 977,000 (4.8%) to 21,492,000, compared
to a 4.6% rate of increase for the same prior year period.
Business and residence access lines increased by 7.9% and 3.5%,
respectively, compared to growth rates of 7.7% and 3.4% in 1995.
The number of second residence lines, included in total residence
lines, increased by 252,000 (22.9%) to 1,353,000 and accounted for
approximately 49.7% and 25.8% of the overall increase in residence
access lines and total access lines, respectively, since March 31,
1995. Such second residence lines are generally used for home
office purposes, access to on-line computer services and children's
phones. The growth in all categories of access lines was primarily
attributable to continued economic improvement in the Southeast,
including increased business activity in Georgia in preparation for
the Olympics, and successful marketing programs.
Access minutes of use represent the volume of traffic carried by
interexchange carriers between LATAs, both interstate and
intrastate, using BellSouth Telecommunications' local facilities.
Total access minutes of use increased by 2,118 million (10.8%)for
the three-month period ended March 31, 1996 compared to an increase
of 8.9% for the same period last year. The increase in access
minutes of use was primarily attributable to access line growth,
promotions by the interexchange carriers and intraLATA toll
competition, which has the effect of increasing access minutes of
use while reducing toll messages carried over BellSouth
Telecommunications' facilities. The growth rate in total minutes
of use continues to be negatively impacted by competition and the
migration of interexchange carriers to categories of service (e.g.,
special access) that have a fixed charge as opposed to a volume-
driven charge and to high capacity services.
Toll messages are comprised of Message Telecommunications Service
and Wide Area Telecommunications Service. For the three-month
period ended March 31, 1996, toll messages decreased by 89 million
(24.1%) compared to a decrease of 4.3% for the corresponding period
in 1995. The decrease in 1996 was primarily attributable to the
expansion of local area calling plans (LACPs) in Florida, Georgia
and North Carolina and also to increased competition from
interexchange carriers in the intraLATA toll market. While the
respective impacts of such factors cannot be precisely quantified,
BellSouth Telecommunications estimates that about 70% of the
decline in toll messages was attributable to expanded LACPs and
about 30% was due to increased competition.
The expanded LACPs discussed above and future implementation of
other such plans in BellSouth Telecommunications' service region,
coupled with competition in the intraLATA toll market, will
adversely impact future toll message volumes. LACPs and the
effects of competition result in the transfer of calls from toll to
local service and access categories, respectively, but the
corresponding revenues are not generally shifted at commensurate
rates.
Operating Revenues
Total Operating Revenues increased $94 (2.6%) for the three-month
period ended March 31, 1996 when compared to the corresponding 1995
period. The components of Total Operating Revenues were as
follows:
For the Three
Months Ended
March 31,
1996 1995
Local Service $1,930 $1,769
Interstate Access 909 795
Intrastate Access 218 226
Toll 207 281
Other Services 391 490
Total Operating Revenues $3,655 $3,561
Local Service revenues increased $161 (9.1%)for the three-month
period ended March 31, 1996 as compared to the same 1995 period.
The increase was due primarily to 4.8% growth in access lines in
service since March 31, 1995. Also contributing was an increase of
$31 due to higher customer demand for Touchstar and Custom Calling
services, and the effect of expanded LACPs.
Interstate Access revenues increased $114 (14.3%) for the three-
month period ended March 31, 1996 as compared to the same prior
year period. The increase was attributable primarily to growth in
minutes of use of 10.1% and rate activity, the net effect of which
increased revenues by $38.
Intrastate Access revenues decreased $8 (3.5%) for the three-month
period ended March 31, 1996 when compared to the corresponding 1995
period. The decrease was due primarily to rate reductions of $32
compared with first quarter 1995, partially offset by increases
attributable to growth in minutes of use of 13.0%.
Toll revenues decreased $74 (26.3%) for the three-month period
ended March 31, 1996 when compared to the same prior year period.
The decrease was primarily attributable to net rate reductions
compared with first quarter 1995 of approximately $57 and a decline
in toll messages of 24.1%. Such factors reflect the expansion of
LACPs and increased competition.
Other Services revenues are principally comprised of revenues from
customer premises equipment (CPE) sales and maintenance services,
billing and collection services, cellular interconnect services,
publishing fees (1995 only) and other nonregulated services
(primarily inside wire services). Other Services revenues
decreased $99 (20.2%) for the three-month period ended March 31,
1996 when compared to the corresponding 1995 period.
The decrease was primarily due to the elimination of directory
publishing fees, which were $164 in first quarter 1995 (see "Other
Matters -- Affiliated Transactions). The decrease was partially
offset by incremental rate impacts related to potential sharing
under certain state regulatory plans.
Operating Expenses
Total Operating Expenses increased $92 (3.6%) for the three-month
period ended March 31, 1996 compared to the same period in 1995.
The components of Total Operating Expenses were as follows:
For the Three
Months Ended
March 31,
1996 1995
Depreciation and Amortization $ 798 $ 746
Other Operating Expenses:
Cost of Services and
Products 1,260 1,288
Selling, General and
Administrative 604 536
1,864 1,824
Total Operating Expenses $ 2,662 $ 2,570
Depreciation and Amortization increased $52 (7.0%) for the three-
month period ended March 31, 1996 compared to the same period in
1995. The increase was due primarily to higher levels of property,
plant and equipment since March 31, 1995 resulting from continued
growth in the customer base and continued modernization of the
network, and shorter asset lives for property, plant and equipment
subsequent to the discontinuance of SFAS No. 71.
Other Operating Expenses are comprised of Cost of Services and
Products and Selling, General and Administrative. Cost of Services
and Products includes employee and employee-related expenses
associated with network repair and maintenance, material and
supplies expense, cost of tangible goods sold and other expenses
associated with providing services. Selling, General and
Administrative includes expenses related to sales activities such
as salaries, commissions, benefits, travel, marketing and
advertising expenses and administrative expenses.
Other Operating Expenses increased $40 (2.2%) for the three-month
period ended March 31, 1996 when compared to the corresponding 1995
period. The increase for the period was due principally to higher
business volumes and initiatives to effectively position the
business for increased competition, partially offset by a decrease
of approximately $66 for labor costs in the core wireline business,
including expenses for employee benefits. The decrease in such
labor costs reflects employee reductions of approximately 6,100
since March 31, 1995 attributable to previously-disclosed
restructuring and work force reduction plans, partially offset by
annual compensation increases for management and represented
employees.
Other Income Statement Items
The other income statement components were as follows:
For the Three
Months Ended
March 31,
1996 1995
Interest Expense $139 $140
Other Income, net 11 5
Provision for Income Taxes 326 323
Interest Expense was essentially unchanged for the three-month
period ended March 31, 1996 compared to the same period last year
reflecting lower average interest rates on long-term borrowings due
to refinancings during 1995, substantially offset by higher average
debt levels.
Provision for Income Taxes increased $3 (0.9%) for the three-month
period ended March 31, 1996 over the comparable 1995 period.
BellSouth Telecommunications' effective tax rates were 37.7% and
37.8% for the three months ended March 31, 1996 and 1995,
respectively.
REGULATORY AND COMPETITIVE ENVIRONMENT
Regulation
Price regulation plans have been approved or authorized by the
requisite legislative or regulatory bodies in all states in the
BellSouth Telecommunications service area. At the federal level,
BellSouth Telecommunications continues to operate under an interim
price regulation plan established by the Federal Communications
Commission (FCC) in 1995. Recent significant developments with
respect to price regulation and other related issues are discussed
below.
Louisiana. Effective April 1, 1996, the Louisiana Public Service
Commission approved a price regulation plan that will remain in
effect for a six-year term, subject to review. Under the
provisions of the price regulation plan, rates for basic services,
which include the provision of local exchange services, are capped
for five years, after which an inflation-based formula may be used
to change prices. After five years, no individual basic service
rate can be increased by more than 10% in any twelve-month period.
Prices for interconnection services are capped for three years,
after which no individual service can be increased more than 10% in
any twelve-month period. For non-basic services, price increases
may not exceed 20% in any twelve-month period. In addition, the
commission approved local competition rules effective March 15,
1996.
In connection with the approval of price regulation, the Louisiana
Commission concluded its review of BellSouth Telecommunications'
earnings by requiring an aggregate $70 rate reduction, to be
implemented ratably over a three-year period beginning April 1,
1996, and an immediate $9 refund to existing customers.
North Carolina. In May 1996, the North Carolina Utilities
Commission modified a price regulation plan previously submitted by
BellSouth Telecommunications. The modified plan, which is
currently under review by the company, will become effective
June 3, 1996, subject to BellSouth Telecommunications' acceptance
of such modifications by May 20, 1996.
Under the terms of the modified plan, prices for residence basic
local exchange services are capped for three years, after which any
price increases are limited subject to an inflation-based formula.
For business basic local exchange, interconnection and certain non-
basic services, any increases in current prices are also subject to
inflation-based formulas. Prices for toll switched access services
are capped at current prices, after giving effect to specified
rates reductions ordered in conjunction with approval of the price
regulation plan. Such rate reductions, including the toll
switched access component and elimination of charges for touchtone
service by the first anniversary of the plan, will total
approximately $60 over the next three years.
Tennessee. In order to implement BellSouth Telecommunications'
price regulation plan, the Tennessee Public Service Commission had
required a $56 rate reduction on an annual basis, which BellSouth
Telecommunications appealed to the Tennessee Court of Appeals (the
Court). In its rulings, the Court has stayed implementation of
both the rate reduction and price regulation plan pending further
consideration of the issues. A decision is expected later in 1996.
Competition and Business Developments
Among its provisions, the Telecommunications Act of 1996 (the 1996
Act) preempts state legislative and regulatory barriers to
competition for local telephone service, subject only to
competitively neutral requirements to assure quality service
consistent with public safety, convenience and consumer welfare.
In order to comply with the requirements of the 1996 Act, all
states in BellSouth Telecommunications' service area have
proceedings and other activities in progress to consider rules and
regulations necessary to implement open competition for local
service. A number of carriers have been approved or filed
applications to provide local service in many of the areas in which
BellSouth Telecommunications provides service. In April 1996,
BellSouth Telecommunications received approval from the Florida
Public Service Commission to provide competing local service in
other carriers' service areas. Initially, BellSouth
Telecommunications plans to serve business customers in parts of
the Orlando market not currently served by BellSouth
Telecommunications.
As permitted by the 1996 Act, in March, BellSouth began joint
marketing cellular and wireline services in Macon, Georgia through
BellSouth Telecommunications' sales offices. BellSouth expects to
extend joint marketing of such services throughout its service
region by the end of 1996.
BellSouth plans to begin offering interLATA wireline service within
its nine-state territory as soon as possible after completion of
FCC and state regulatory proceedings, expected to be concluded in
late 1996 or early 1997; however, it is uncertain when BellSouth
will be authorized to initiate such interLATA wireline service.
OTHER MATTERS
Affiliated Transactions
Through 1995, BellSouth Telecommunications had a contractual
agreement with BellSouth Advertising & Publishing Corporation
(BAPCO), an affiliated company, wherein BAPCO published certain
telephone directories and in return paid publication fees to
BellSouth Telecommunications for publishing rights and other
services. For the first quarter ended March 31, 1995 and the year
ended December 31, 1995, these fees, included in Other Operating
Revenue, were $164 and $721, respectively.
In response to changes in the telecommunications environment,
including passage of the 1996 Act, and to enhance competitive
flexibility, BellSouth Telecommunications and BAPCO established a
new contract, based on fees for services rendered between the
companies, effective January 1, 1996. The new contract is expected
to generate fees of about $75 for BellSouth Telecommunications in
1996, resulting in projected BellSouth Telecommunications' 1996
revenues of about $625 less than they would have been under the old
contract.
Because BellSouth Telecommunications and BAPCO are wholly-owned
subsidiaries, BellSouth's consolidated financial results are not
affected by this change.
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit
Number
4 No instrument which defines the rights of holders of long and
intermediate term debt of BellSouth Telecommunications, Inc.
is filed herewith pursuant to Regulation S-K, Item
601(b)(4)(iii)(A). Pursuant to this regulation, BellSouth
Telecommunications, Inc. hereby agrees to furnish a copy of
any such instrument to the SEC upon request.
12 Computation of Ratio of Earnings to Fixed Charges.
27 Financial Data Schedule.
(b) Reports on Form 8-K:
None.
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 TELECOMMUNICATIONS, INC.
By /s/ Patrick H. Casey
PATRICK H. CASEY
Vice President and Comptroller
(Principal Financial and
Accounting Officer)
May 13, 1996
EXHIBIT INDEX
Exhibit
Number
12 Computation of Ratio of Earnings to Fixed Charges.
27 Financial Data Schedule.
EXHIBIT 12
BellSouth Telecommunications Inc.
Computation Of Earnings To Fixed Charges
(Dollars In Millions)
For the Three
Months Ended
March 31,
1996
1. Earnings
(a) Income from continuing operations
before deductions for taxes and interest $1,004
(b) Portion of rental expense
representative of interest factor 17
TOTAL $1,021
2. Fixed Charges
(a) Interest $144
(b) Portion of rental expense
representative of interest factor 17
TOTAL $161
Ratio (1 divided by 2) 6.3
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 31
<SECURITIES> 219
<RECEIVABLES> 2,900
<ALLOWANCES> 91
<INVENTORY> 382
<CURRENT-ASSETS> 3,477
<PP&E> 44,083
<DEPRECIATION> 25,410
<TOTAL-ASSETS> 22,790
<CURRENT-LIABILITIES> 4,384
<BONDS> 6,792
0
0
<COMMON> 7,393
<OTHER-SE> 712
<TOTAL-LIABILITY-AND-EQUITY> 22,790
<SALES> 45
<TOTAL-REVENUES> 3,655
<CGS> 56
<TOTAL-COSTS> 2,058
<OTHER-EXPENSES> 604
<LOSS-PROVISION> 32
<INTEREST-EXPENSE> 139
<INCOME-PRETAX> 865
<INCOME-TAX> 326
<INCOME-CONTINUING> 539
<DISCONTINUED> 0
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