-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q85M099qvLYM/J2+l7hl90tmiL7KpsEZN77hZy8cqJUyWDq/c4tVeSmtb182G4wk xYEXO6Mcd1WnuaRtp35IeA== /in/edgar/work/0000732713-00-000023/0000732713-00-000023.txt : 20001020 0000732713-00-000023.hdr.sgml : 20001020 ACCESSION NUMBER: 0000732713-00-000023 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001019 ITEM INFORMATION: FILED AS OF DATE: 20001019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELLSOUTH CORP CENTRAL INDEX KEY: 0000732713 STANDARD INDUSTRIAL CLASSIFICATION: [4813 ] IRS NUMBER: 581533433 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08607 FILM NUMBER: 742526 BUSINESS ADDRESS: STREET 1: 1155 PEACHTREE ST NE STREET 2: ROOM 15G03 CITY: ATLANTA STATE: GA ZIP: 30309-3610 BUSINESS PHONE: 4042492000 8-K 1 0001.txt 3Q00 EARNINGS RELEASE 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): October 19, 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 Item 5. Other Events Third Quarter 2000 Earnings On October 19, 2000, BellSouth announced earnings for the third quarter of 2000. See Exhibit 99 for a complete copy of the related press release. Earnings Guidance BellSouth is targeting EPS growth in the 10% - 12% range for 2000 and 13% - 15% for 2001. For 2000, total operating revenue growth of 8 -10% and total operating expense growth of 7% - 9% are estimated. Telco revenue growth is targeted in the 5-7% range and telco expense in the 4.5%-6.5% range. Data revenues are estimated to grow near 30%. DSL customers are projected to be at 200K at year-end 2000, and internet customers are projected to be around 1 million. Capital expenditures are targeted to be in the $6.0 -- $6.5 billion range for 2000, excluding capitalized software of around $500 million. For 2001, capex is estimated in the range of $5.5 -- $6.0 billion, including capitalized software. - ------------------------------------------------------------------------------ Cautionary Language Concerning Forward-Looking Statements - ------------------------------------------------------------------------------ In addition to historical information, this document contains forward-looking statements regarding events and financial trends that may affect our future operating results, financial position and cash flows. These statements 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, financial position and cash flows 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 a decrease in the growth rate of demand for the services which we offer; o the intensity of competitive activity and its resulting impact on pricing strategies and product offerings; o protracted 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, or delays in, the deployment of new technologies; and o unsatisfactory results in regulatory actions including access reform, universal service, terms of interconnection, 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, and we do not intend, 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 - Third Quarter 2000 Earnings 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 October 19, 2000 EX-99 2 0002.txt EARNINGS RELEASE FOR MORE INFORMATION FOR IMMEDIATE RELEASE Pattie Kushner (404-249-2365) October 19, 2000 Jeff Battcher (404-713-0274) BellSouth Third Quarter EPS Increases 10% Domestic and International Wireless Continue Strong Performance; DSL Customer Base Grows More Than 80 Percent During Quarter ATLANTA - BellSouth Corporation (NYSE: BLS) reported third quarter earnings per share (EPS) of 55 cents, including a two-cent reduction related to its newly acquired wireless properties in Colombia. Third quarter EPS increased 10 percent compared to 50 cents before special items in the third quarter of 1999. Consolidated revenues were $6.9 billion, a gain of 7.5 percent compared to the same period of the previous year. Strong growth in data revenues represented more than 40 percent of consolidated revenue growth, highlighting BellSouth's continuing shift not only to digital broadband services and e-commerce applications for business customers but also to wireless and international. In addition, BellSouth's DSL customer base increased more than 80 percent during the third quarter. "We're leveraging our existing network assets to create a sophisticated new platform for data, Internet services and e-business," said Duane Ackerman, chairman and chief executive officer. "In telecom's other high growth area, the debut of Cingular Wireless, the new company we formed with SBC Communications to deliver national wireless data and voice services, opens up lots of new markets and unlocks significant value for our investors." DSL, Data, Internet, E>Commerce At the end of September, BellSouth had 134,000 customers for DSL and other high-speed access products, compared to 74,000 at the end of June, a quarterly gain of 81.1 percent. With this acceleration in customer growth, BellSouth is confident it will have 200,000 high-speed customers by year end 2000. Equivalent access lines, which include broadband data services as well as traditional switched lines, grew at a record annual rate of 25.3 percent in the three months ended September 30, 2000. Total data revenues in the third quarter were $894 million, an increase of 28 percent compared to the same quarter of 1999. During the quarter BellSouth opened new E-Business Centers in Atlanta and Miami to provide Web hosting services. Domestic Wireless Proportionate revenues of $890 million grew 19.5 percent compared to $745 million in the third quarter of 1999 (normalized for the sale of Honolulu Cellular in August 1999). At the end of the third quarter, BellSouth served nearly 6.2 million mobile phone customers in the U.S. (proportionate basis), an accelerating annual growth rate of 19.8 percent, up from 17.6 percent customer growth in the second quarter and 15.4 percent in the first. Special plans such as BellSouth's unique "Rollover Minutes" program and digital one-rate options helped drive increased usage and revenues. Average revenue per subscriber of $53 in the third quarter of 2000 increased 3.9 percent compared to $51 in the same three months a year ago. International Including newly acquired operations in Colombia, BellSouth added more than a million international wireless customers in the third quarter, driving an annual growth rate of 69.3 percent and bringing the number of customers to more than 8.7 million on a proportionate basis. Third quarter proportionate revenues climbed 16.8 percent, to $875 million in 2000 from $749 million in the same quarter of the previous year. During the third quarter, BellSouth completed acquisitions that make it 66 percent owner of the first national wireless company in Colombia, and early in the fourth quarter, launched wireless service in Guatemala, the 11th market served by BellSouth in Central and South America. Calling Features and Packages Calling feature revenues were $550 million in the third quarter of 2000, a 12 percent increase compared to $491 million in the same three months of 1999. The BellSouth(R) Complete Choice(R) Plan family of services passed the 5 million customer milestone during the quarter, and is now used by nearly 30 percent of residential customers. Complete Choice packages basic service with any or all of some two dozen calling features such as Caller ID and Call Waiting Deluxe. In addition, BellSouth has sold 8.2 million Caller ID lines to residential and business customers. BellSouth Corporation is a $26 billion Fortune 100 integrated communications services company. Headquartered in Atlanta, BellSouth has operations in the U.S. and 16 other countries and serves more than 41 million customers worldwide. BellSouth provides integrated data, voice and video services to meet the communications needs of business, residential and wholesale customers. For six years in a row, BellSouth has achieved the highest score in its category in the American Customer Satisfaction Index co-sponsored by the American Society for Quality. About Cingular Wireless (a joint venture with SBC Communications) Through Cingular Wireless, the nation's second largest wireless company, BellSouth provides innovative wireless data and voice services. Cingular Wireless serves 19 million subscribers and reaches 190 million potential customers with the most robust set of services in the wireless industry, including interactive messaging, attractive national rate plans and packages of communications services. Further information about BellSouth's third quarter earnings release can be accessed at the company's Investor Relations Web site at www.bellsouth.com/investor. The press release, earnings commentary summarizing highlights of the quarter (both text and audio), and financial statements will be available on the Web site starting today at 8 a.m. EDT. In addition, the audio of the earnings commentary can be accessed by calling the BellSouth Investor Newsline at 770-662-0779, beginning today at 8 a.m. EDT and continuing through Monday, October 23, 2000. In addition to historical information, this document contains forward-looking statements regarding events and financial trends. Factors that could affect future results and could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: (i) a change in economic conditions in domestic or international markets where we operate or have material investments which would affect demand for our services; (ii) the intensity of competitive activity and its resulting impact on pricing strategies and new product offerings; and (iii) higher than anticipated cash requirements for investments, new business initiatives and acquisitions. The forward-looking information in this document is given as of this date only, and BellSouth assumes no duty to update this information. BellSouth Corporation Consolidated Statements of Income (unaudited) (amounts in millions, except per share data) Quarter Ended 9/30/00 9/30/99 % Change Operating Revenues Wireline communications Local service $2,857 $2,747 4.0% Network access 1,198 1,200 (0.2%) Long distance 133 158 (15.8%) Other wireline 370 310 19.4% Total wireline communications 4,558 4,415 3.2% Domestic wireless 942 815 15.6% International operations 709 575 23.3% Advertising and publishing 587 540 8.7% Other 107 77 39.0% Total Operating Revenues 6,903 6,422 7.5% Operating Expenses Operational and support expenses 3,665 3,541 3.5% Depreciation and amortization 1,301 1,207 7.8% Severance accrual - - N/M Loss on asset impairment - - N/M Total Operating Expenses 4,966 4,748 4.6% Operating Income 1,937 1,674 15.7% Interest Expense 344 266 29.3% Other Income (Expense), net 31 28 10.7% Income Before Income Taxes 1,624 1,436 13.1% Provision for Income Taxes 588 442 33.0% Net Income $1,036 $994 4.2% Diluted: Weighted Average Common Shares Outstanding 1,885 1,904 (1.0%) Earnings Per Share $0.55 $0.52 5.8% Nine Months Ended 9/30/00 9/30/99 % Change Operating Revenues Wireline communications Local service $8,540 $8,113 5.3% Network access 3,706 3,578 3.6% Long distance 399 461 (13.4%) Other wireline 1,012 845 19.8% Total wireline communications 13,657 12,997 5.1% Domestic wireless 2,714 2,355 15.2% International operations 2,031 1,701 19.4% Advertising and publishing 1,422 1,290 10.2% Other 318 200 59.0% Total Operating Revenues 20,142 18,543 8.6% Operating Expenses Operational and support expenses 10,798 10,153 6.4% Depreciation and amortization 3,759 3,475 8.2% Severance accrual 78 - N/M Loss on asset impairment - 320 N/M Total Operating Expenses 14,635 13,948 4.9% Operating Income 5,507 4,595 19.8% Interest Expense 982 737 33.2% Other Income (Expense), net 313 8 N/M Income Before Income Taxes 4,838 3,866 25.1% Provision for Income Taxes 1,737 1,471 18.1% Net Income $3,101 $2,395 29.5% Diluted: Weighted Average Common Shares Outstanding 1,894 1,921 (1.4%) Earnings Per Share $1.64 $1.25 31.2% Selected Financial and Operating Data Quarter Ended 9/30/00 9/30/99 % Change EBITDA $3,238 $2,881 12.4% EBITDA margin 46.9% 44.9% +200bps Return on average equity (annualized) 25.0% 28.2% -320bps Return on average total capital (annualized) 15.5% 16.1% -60bps Digital and data revenues $894 $698 28.1% Dividends per share $0.19 $0.19 0.0% Capital expenditures $1,837 $1,570 17.0% Nine Months Ended 9/30/00 9/30/99 % Change EBITDA $9,344 $8,390 11.4% EBITDA margin 46.4% 45.2% +120bps Return on average equity (annualized) 25.8% 22.1% +370bps Return on average total capital (annualized) 15.9% 13.8% +210bps Digital and data revenues $2,574 $2,005 28.4% Dividends per share $0.57 $0.57 0.0% Capital expenditures $5,105 $4,456 14.6% As of 9/30/00 9/30/99 % Change Common shares outstanding 1,866 1,884 (1.0%) Book value per share $8.84 $7.15 23.6% Debt ratio 54.6% 54.4% +20bps Total employees 102,191 95,773 6.7% BellSouth Corporation Normalized Earnings Summary (unaudited) (amounts in millions, except per share data) Quarter Ended 9/30/00 9/30/99 % Change Reported Net Income $1,036 $994 4.2% Gain on E-Plus restructuring (a) - - - Severance accrual (b) - - - Loss on asset impairment (c) - - N/M Recognition of foreign investment tax credits (d) - (95) N/M Gain on Sale of Honolulu Cellular - (23) N/M Foreign currency loss (e) - 75 N/M Normalized Net Income $1,036 $951 8.9% Reported Diluted Earnings Per Share $0.55 $0.52 5.8% Gain on E-Plus restructuring (a) - - - Severance accrual (b) - - - Loss on asset impairment (c) - - N/M Recognition of foreign investment tax credits (d) - (0.05) N/M Gain on Sale of Honolulu Cellular - (0.01) N/M Foreign currency loss (e) - 0.04 N/M Normalized Diluted Earnings Per Share $0.55 $0.50 10.0% Normalized return on average equity (annualized) 25.0% 27.0% -200bps Normalized return on average total capital (annualized) 15.5% 15.6% -10bps Nine Months Ended 9/30/00 9/30/99 % Change Reported Net Income $3,101 $2,395 29.5% Gain on E-Plus restructuring (a) (68) - N/M Severance accrual (b) 48 - N/M Loss on asset impairment (c) - 187 N/M Recognition of foreign investment tax credits (d) - (95) N/M Gain on Sale of Honolulu Cellular - (23) N/M Foreign currency loss (e) - 355 N/M Normalized Net Income $3,081 $2,819 9.3% Reported Diluted Earnings Per Share $1.64 $1.25 31.2% Gain on E-Plus restructuring (a) (0.04) - N/M Severance accrual (b) 0.03 - N/M Loss on asset impairment (c) - 0.10 N/M Recognition of foreign investment tax credits (d) - (0.05) N/M Gain on Sale of Honolulu Cellular - (0.01) N/M Foreign currency loss (e) - 0.18 N/M Normalized Diluted Earnings Per Share $1.63 $1.47 10.9% Normalized return on average equity (annualized) 25.7% 26.0% -30bps Normalized return on average total capital (annualized) 15.8% 15.8% N/M (a) Represents income related to the restructuring of our ownership interest in German wireless operator E-Plus. (b) Represents expense recorded as a result of our previously announced plan to reduce our domestic workforce. (c) Represents the after-tax loss recorded in second quarter 1999 associated with the write-down of equipment that is being replaced as we continue to upgrade our U.S. wireless network. (d) Represents foreign tax credits generated in prior years. (e) Represents our share of foreign currency losses recorded during first and third quarters 1999 as a result of the devaluation of the Brazilian Real during January 1999. BellSouth Corporation Consolidated Balance Sheets (unaudited) (amounts in millions, except per share data) September 30, December 31, 2000 1999 Assets Current Assets: Cash and cash equivalents $1,456 $1,287 Temporary cash investments 36 105 Accounts receivable--net of allowance for uncollectibles of $389 and $312 5,268 5,177 Material and supplies 511 451 Other current assets 968 367 Total Current Assets 8,239 7,387 Investments and Advances 7,002 6,097 Property, Plant and Equipment, net 25,887 24,631 Deferred Charges and Other Assets 1,853 1,564 Intangible Assets, net 6,578 3,774 Total Assets $49,559 $43,453 Liabilities and Shareholders' Equity Current Liabilities: Debt maturing within one year $8,887 $7,653 Accounts payable 2,021 1,961 Other current liabilities 4,473 3,781 Total Current Liabilities 15,381 13,395 Long-Term Debt 11,036 9,113 Noncurrent Liabilities: Deferred income taxes 3,424 2,705 Unamortized investment tax credits 96 126 Other noncurrent liabilities 3,123 3,299 Total Noncurrent Liabilities 6,643 6,130 Shareholders' Equity: Common stock, $1 par value 2,020 2,020 Paid-in capital 6,775 6,771 Retained earnings 13,421 11,456 Accumulated other comprehensive income (58) (358) Shares held in trust and treasury (5,452) (4,798) Guarantee of ESOP debt (207) (276) Total Shareholders' Equity 16,499 14,815 Total Liabilities and Shareholders' Equity $49,559 $43,453 BellSouth Corporation Consolidated Statements of Income (amounts in millions) (unaudited) Wireline Communications Quarter Ended 9/30/00 9/30/99 % Change Operating Revenues Local service $2,857 $2,747 4.0% Network access 1,198 1,200 (0.2%) Long distance 133 158 (15.8%) Other wireline 457 376 21.5% Total Operating Revenues 4,645 4,481 3.7% Operating Expenses Operational and support expenses 2,157 2,175 (0.8%) Depreciation and amortization 924 868 6.5% Total Operating Expenses 3,081 3,043 1.2% Operating Income 1,564 1,438 8.8% Interest Expense 180 142 26.8% Other Income, net 5 17 N/M Income Before Income Taxes 1,389 1,313 5.8% Provision for Income Taxes 519 496 4.6% Segment Net Income(1) $870 $817 6.5% Nine Months Ended 9/30/00 9/30/99 % Change Operating Revenues Local service $8,540 $8,113 5.3% Network access 3,706 3,578 3.6% Long distance 399 461 (13.4%) Other wireline 1,257 1,078 16.6% Total Operating Revenues 13,902 13,230 5.1% Operating Expenses Operational and support expenses 6,488 6,438 0.8% Depreciation and amortization 2,709 2,551 6.2% Total Operating Expenses 9,197 8,989 2.3% Operating Income 4,705 4,241 10.9% Interest Expense 518 410 26.3% Other Income, net 15 18 (16.7%) Income Before Income Taxes 4,202 3,849 9.2% Provision for Income Taxes 1,561 1,450 7.7% Segment Net Income(1) $2,641 $2,399 10.1% Selected Financial and Operating Data Quarter Ended 9/30/00 9/30/99 % Change (amounts in millions) EBITDA $2,488 $2,306 7.9% EBITDA margin 53.6% 51.5% +210bps Calling feature revenues $550 $491 12.0% Access minutes of use 28,551 27,858 2.5% Long distance messages 125 160 (21.9%) Capital expenditures $1,281 $1,213 5.6% Nine Months Ended 9/30/00 9/30/99 % Change (amounts in millions) EBITDA $7,414 $6,792 9.2% EBITDA margin 53.3% 51.3% +200bps Calling feature revenues $1,597 $1,412 13.1% Access minutes of use 86,065 82,310 4.6% Long distance messages 390 505 (22.8%) Capital expenditures $3,706 $3,468 6.9% As of 9/30/00 9/30/99 % Change Debt ratio 54.0% 49.2% +480bps Equivalent access lines in service (thousands): Switched access lines 24,648 24,440 0.9% Access line equivalents 26,679 16,539 61.3% Total equivalent access lines in service 51,327 40,979 25.3% Telephone employees 65,951 64,987 1.5% BellSouth Corporation Supplemental Operating Data (in thousands) Wireline Communications - Network Access Lines In Service(a) As of 9/30/00 9/30/99 % Change Switched access lines Residence 17,228 16,889 2.0% Business 7,165 7,282 (1.6%) Other 255 269 (5.2%) Total switched access lines in service 24,648 24,440 0.9% Access line equivalents(b) Selected digital data services: Basic rate ISDN 232 214 8.4% Primary rate ISDN 1,122 785 42.9% DS0 1,422 588 141.8% DS1 5,298 4,180 26.7% DS3 & higher 18,605 10,772 72.7% Total digital data lines in service 26,679 16,539 61.3% Total equivalent access lines in service 51,327 40,979 25.3% (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) Access line equivalents represent a conversion of non-switched data circuits to a switched access line basis and is presented for comparability purposes. Equivalents are calculated by converting high-speed/high-capacity circuits to the equivalent of a switched access line based on transport capacity. While the revenues generated by access line equivalents have a directional relationship with these counts, growth rates cannot be compared on an equivalent basis. BellSouth Corporation Consolidated Statements of Income (amounts in millions) (unaudited) Domestic Wireless(2) Quarter Ended Nine Months Ended 9/30/00 9/30/99 % Change 9/30/00 9/30/99 % Change Operating revenues $948 $820 15.6% $2,728 $2,367 15.3% Segment net income(1) $118 $55 114.5% $305 $186 64.0% Total assets $6,875 $5,761 19.3% Proportionate Basis(3) - Selected Financial and Operating Data Quarter Ended 9/30/00 9/30/99 % Change (amounts in millions, except customer data in thousands) Wireless revenues, net(4) $890 $755 17.9% Net income(5) $118 $55 114.5% Operating cash flow(7) $364 $296 23.0% Operating cash flow margin(8) 40.9% 39.2% +170bps Customer net adds in period (excluding ownership changes) 239 106 125.5% Average monthly revenue per customer(9) $53 $51 3.9% Nine Months Ended 9/30/00 9/30/99 % Change (amounts in millions, except customer data in thousands) Wireless revenues, net(4) $2,559 $2,217 15.4% Net income(5) $305 $187 63.1% Operating cash flow(7) $1,032 $861 19.9% Operating cash flow margin(8) 40.3% 38.8% +150bps Customer net adds in period (excluding ownership changes) 809 459 76.3% Average monthly revenue per customer(9) $53 $51 3.9% As of 9/30/00 9/30/99 % Change Customers 6,151 5,135 19.8% POPs 59,427 58,402 1.8% Penetration rate(10) 10.6% 9.0% +160bps Property, plant and equipment, gross $4,924 $4,439 10.9% Normalized Financial and Operating Data During the third quarter of 1999, we sold our Honolulu Cellular Operations. In the following table, we have restated the prior period financial data to reflect these changes and provide more meaningful comparative information for existing operations. Quarter Ended Nine Months Ended 9/30/00 9/30/99 % Change 9/30/00 9/30/99 % Change (amounts in millions) Wireless revenues, net(4) $890 $745 19.5% $2,559 $2,179 17.4% BellSouth Corporation Consolidated Statements of Income (amounts in millions) (unaudited) International Operations(2) Quarter Ended 9/30/00 9/30/99 % Change Operating revenues $720 $576 25.0% Segment net income (loss)(1) ($68) $9 N/M Total assets $7,487 $4,734 58.2% Nine Months Ended 9/30/00 9/30/99 % Change Operating revenues $2,063 $1,702 21.2% Segment net income (loss)(1) ($72) $39 N/M Proportionate Basis(3) - Selected Financial and Operating Data Quarter Ended 9/30/00 9/30/99 % Change (amounts in millions, except customer data in thousands) Wireless revenues, net(4) $875 $749 16.8% Net income (5) ($49) $24 N/M Operating cash flow(7) $240 $205 17.1% Operating cash flow margin(8) 27.4% 27.4% N/M Customer net adds in period (excluding ownership changes) 634 684 (7.3%) Average monthly revenue per customer(9) $32 $46 (30.4%) Nine Months Ended 9/30/00 9/30/99 % Change (amounts in millions, except customer data in thousands) Wireless revenues, net(4) $2,553 $2,163 18.0% Net income (5) ($33) $70 N/M Operating cash flow(7) $681 $593 14.8% Operating cash flow margin(8) 26.7% 27.4% -70bps Customer net adds in period (excluding ownership changes) 2,243 1,682 33.4% Average monthly revenue per customer(9) $34 $51 (33.3%) As of 9/30/00 9/30/99 % Change Wireless: Customers 8,743 5,163 69.3% POPs 181,085 135,131 34.0% Penetration rate(10) 5.0% 4.8% +20bps Property, plant and equipment, gross $4,249 $3,374 25.9% BellSouth Corporation Supplemental Operating Data - International Customers and POPs by Country (Proportionate Basis(3) in thousands) Customers As of Country Brand 9/30/00 9/30/99 % Change Argentina Movicom BellSouth 962 702 37.0% Movicom BellSouth (Interior) 43 - N/M Brazil BCP (Sao Paulo) 684 510 34.1% BCP (Northeast) 354 146 142.5% TCO (6) 212 - N/M Chile BellSouth (Santiago) 502 306 64.1% BellSouth (Interior) 100 4 N/M Colombia Celumovil BellSouth 490 - N/M Ecuador BellSouth 186 149 24.8% Nicaragua BellSouth 67 28 139.3% Panama BellSouth 81 42 92.9% Peru BellSouth (Lima) 316 214 47.7% BellSouth (Interior) 41 - N/M Uruguay Movicom BellSouth 60 48 25.0% Venezuela Telcel BellSouth 2,443 1,513 61.5% Guatemala BellSouth - - - Subtotal Latin America 6,541 3,662 78.6% Denmark Sonofon 357 389 (8.2%) Germany e-plus 1,231 661 86.2% India SkyCell 8 5 60.0% Israel Cellcom 606 446 35.9% Subtotal Europe and Asia/Pacific 2,202 1,501 46.7% Total International 8,743 5,163 69.3% POPs As of Country Brand 9/30/00 9/30/99 % Change Argentina Movicom BellSouth 8,710 8,775 (0.7%) Movicom BellSouth (Interior) 14,560 14,690 (0.9%) Brazil BCP (Sao Paulo) 8,049 8,049 - BCP (Northeast) 12,451 12,451 - TCO (6) 4,733 - N/M Chile BellSouth (Santiago) 7,500 7,400 1.4% BellSouth (Interior) 7,600 7,400 2.7% Colombia Celumovil BellSouth 27,451 - N/M Ecuador BellSouth 11,086 10,996 0.8% Nicaragua BellSouth 2,581 2,581 - Panama BellSouth 1,223 1,135 7.8% Peru BellSouth (Lima) 7,069 5,283 33.8% BellSouth (Interior) 17,334 12,830 35.1% Uruguay Movicom BellSouth 966 966 - Venezuela Telcel BellSouth 18,132 18,132 - Guatemala BellSouth 7,140 - N/M Subtotal Latin America 156,585 110,688 41.5% Denmark Sonofon 2,465 2,465 - Germany e-plus 18,568 18,545 0.1% India SkyCell 1,348 1,348 - Israel Cellcom 2,119 2,085 1.6% Subtotal Europe and Asia/Pacific 24,500 24,443 0.2% Total International 181,085 135,131 34.0% BellSouth Corporation Consolidated Statements of Income (amounts in millions) (unaudited) Advertising and Publishing Quarter Ended Nine Months Ended 9/30/00 9/30/99 % Change 9/30/00 9/30/99 % Change Operating revenues $593 $542 9.4% $1,439 $1,298 10.9% Segment net income(1) $181 $160 13.1% $396 $342 15.8% Total assets $1,656 $1,438 15.2% Selected Financial and Operating Data Quarter Ended Nine Months Ended 9/30/00 9/30/99 % Change 9/30/00 9/30/99 % Change EBITDA $307 $269 14.1% $670 $584 14.7% EBITDA margin 51.8% 49.6% +220bps 46.6% 45.0% +160bps Other Quarter Ended Nine Months Ended 9/30/00 9/30/99 % Change 9/30/00 9/30/99 % Change Operating revenues $222 $179 24.0% $627 $464 35.1% Segment net loss(1) ($45) ($39) (15.4%) ($144) ($155) 7.1% Total assets $1,495 $1,231 21.4% BellSouth Corporation Notes (1) Segment net income (loss) is based on normalized results which exclude certain one-time transactions and certain corporate intercompany billings. Intersegment revenues are not eliminated for purposes of management reporting. (2) Domestic wireless and international operations financial and operating data are reported one month in arrears, except for domestic wireless customers and POPs which are presented as of quarter end. (3) Proportionate basis financial and operating data reflect our ownership interest in the total operating results for each of our wireless properties, both domestic and international, whether or not consolidated for financial statement presentation purposes. Proportionate basis customers and POPs represent end of period customers and estimated market population, respectively, multiplied by our ownership interest in a licensee operating in that market. (4) Wireless revenues, net includes activation fees, access, airtime, roaming (net), long distance, equipment sales, value added services and other revenue. Proportionate domestic wireless revenues have been adjusted to include the cost of equipment sold to customers. (5) Net income (loss) represents our proportionate interest in the net income (loss) of the respective operations and does not include gains (losses) from the sale of properties or development expenses for markets prior to service initiation. (6) TCO represents a new investment acquired in May, 2000. This investment is accounted for under the cost method; therefore, it has no impact on operating results. (7) Operating cash flow is defined as operating income plus depreciation and amortization. While it represents our proportionate interest in the operating entities' operating cash flows, it does not necessarily represent cash available to us. (8) Operating cash flow margin is calculated by dividing operating cash flow by wireless revenues, net. (9) Average monthly revenue per customer is calculated by dividing average monthly revenue by average proportionate basis customers. Average monthly revenue includes activation fees, access, airtime, roaming (net), long distance and value added services. (10) Penetration rate is calculated by dividing proportionate basis customers by proportionate basis POPs (excludes POPs in markets where service has not been initiated). -----END PRIVACY-ENHANCED MESSAGE-----