-----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, P3vt8FHmT+FwM4krLQF4ILL/Wx8PERi/Gakn1wmQy0Gt6PtnUHXkWBOoZE/q41+g myZEXUPvZ2lom5WUFhC3TQ== 0000732713-97-000001.txt : 19970225 0000732713-97-000001.hdr.sgml : 19970225 ACCESSION NUMBER: 0000732713-97-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970123 ITEM INFORMATION: Other events FILED AS OF DATE: 19970206 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELLSOUTH CORP CENTRAL INDEX KEY: 0000732713 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 581533433 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08607 FILM NUMBER: 97518987 BUSINESS ADDRESS: STREET 1: 1155 PEACHTREE ST NE CITY: ATLANTA STATE: GA ZIP: 30367 BUSINESS PHONE: 4042492000 8-K 1 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 23, 1997 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.) 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 Fourth quarter earnings per share (EPS) were 64 cents in 1996, an increase of 12.3 percent compared with 57 cents in the same quarter a year earlier, before special charges totaling 73 cents. Including the special charges, in the fourth quarter of 1995 BellSouth reported a loss of 16 cents per share. In 1996, the company added 1,002,000 lines, a 4.7 percent annual growth rate, and ended the year with 22,135,000 domestic access lines. Business access lines grew 8.1 percent. New retail distribution channels and marketing promotions of phone lines for Internet access, work-at-home, fax machines and children's numbers spurred fourth quarter sales of 82,000 additional residential lines. Sales of BellSouth's calling features and convenience services, such as Caller ID, Call Waiting and MemoryCall(r) service voice messaging, continued to grow rapidly. With more than 29 million features currently activated, revenues from these services surpassed $1 billion for the first time in 1996. BellSouth's domestic and international wireless services grew by a combined 3,700 new customers every day during 1996. The company's U.S. cellular operations ended 1996 with 3,612,000 customers, growing by 279,000 in the fourth quarter and 765,000 for the year. In BellSouth's 11 international cellular markets, customers increased to 1,244,000 at December 31. BellSouth's fourth quarter revenues of $5.1 billion increased 6.0 percent compared with the same quarter of 1995. Net income in the quarter was $633 million, compared with a reported loss of $161 million in the fourth quarter a year earlier (after special charges totaling $725 million). In BellSouth's telephone operations, cash operating expenses were up 0.7 percent in the fourth quarter of 1996. BellSouth's total operating expenses increased 5.6 percent, excluding the special charge in the fourth quarter of 1995 related to work force reductions. When the paging operations sold by BellSouth in 1996 are excluded from 1995 results, quarterly revenues increased 8.1 percent, and total operating expenses increased 7.7 percent. BellSouth's annual revenues of $19.0 billion were up 6.5 percent compared with 1995. Excluding a first quarter gain of 35 cents per share on the paging sale, EPS in 1996 was $2.53, an increase of 12.9 percent compared with $2.24 in 1995, before special charges totaling $3.48 per share. Including the gain in 1996, EPS was $2.88, compared to 1995's reported loss of $1.24 per share after the special charges. Net income in 1996 was $2.9 billion, including the paging gain of $344 million. This compared with a reported loss of $1.2 billion in 1995 (after special charges totaling $3.5 billion). BellSouth believes that normalized earnings growth could be in the low double digits through 1997. This forward-looking statement is based on a number of assumptions including, but not limited to: (1) economic growth and demand for wireline and wireless communications services continues in BellSouth's service territories; (2) BellSouth Telecommunications, Inc. is successful in furthering its cost reduction efforts; (3) the effect of access reform initiatives now being considered by the FCC is reasonably revenue neutral and (4) local service competition does not have a significant adverse impact on revenues in 1997. Any developments significantly deviating from these assumptions could cause actual results to differ materially from those in the above forward-looking statement. PRELIMINARY January 23, 1997 BELLSOUTH CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In Millions, Except Per Share Amounts) For the Three Months Ended For the Year Ended December 31, December 31, 1996 1995 1996 1995 (unaudited)(unaudited)(unaudited) Operating Revenues: Network and related services Local service $ 2,070 $ 1,875 $ 8,082 $ 7,294 Interstate access 881 869 3,553 3,275 Intrastate access 185 201 812 884 Toll 194 242 794 1,009 Wireless communications 760 704 2,799 2,592 Directory advertising and publishing 642 569 1,742 1,677 Other services 318 305 1,258 1,155 Total Operating Revenues 5,050 4,765 19,040 17,886 Operating Expenses: Cost of services and products 1,589 1,654 6,072 6,184 Depreciation and amortization 959 887 3,719 3,455 Selling, general and administrative 1,295 1,099 4,470 3,873 Work force reduction charge -- 1,082 -- 1,082 Total Operating Expenses 3,843 4,722 14,261 14,594 Operating Income 1,207 43 4,779 3,292 Interest Expense 190 192 721 724 Gain on Sale of Paging Business -- -- 442 -- Other Income (Expense), net 24 (31) 108 20 Income (Loss) Before Income Taxes and Extraordinary Losses 1,041 (180) 4,608 2,588 Provision for Income Taxes 408 (81) 1,745 1,024 Income (Loss) Before Extraordinary Losses 633 (99) 2,863 1,564 Extraordinary Loss for Discontinuance of SFAS No. 71, net of tax -- -- -- (2,718) Extraordinary Loss on Early Extinguishment of Debt, net of tax -- (62) -- (78) Net Income (Loss) $ 633 $ (161) $ 2,863 $(1,232) PRELIMINARY January 23, 1997 BELLSOUTH CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Continued) (In Millions, Except Per Share Amounts) For the Three Months Ended For the Year Ended December 31, December 31, 1996 1995 1996 1995 (unaudited)(unaudited)(unaudited) Weighted Average Common Shares Outstanding 993 993 994 993 Dividends Declared Per Common Share $ .36 $ .36 $ 1.44 $ 1.41 Earnings (Loss) Per Share: Income (Loss) Before Extraordinary Losses $ .64 $ (.10) $ 2.88 $ 1.57 Extraordinary Loss for Discontinuance of SFAS No. 71, net of tax -- -- -- (2.73) Extraordinary Loss on Early Extinguishment of Debt, net of tax -- (.06) -- (.08) Earnings (Loss) Per Share $ .64 $ (.16) $ 2.88 $(1.24) PRELIMINARY January 23, 1997 BELLSOUTH CORPORATION CONSOLIDATED BALANCE SHEETS (In Millions, Except Per Share Amounts) December 31, 1996 December 31, ASSETS (Unaudited) 1995 Current Assets: Cash and cash equivalents $ 1,178 $ 1,711 Temporary cash investments 51 71 Accounts receivable, net of allowance for uncollectibles of $180 and $171 4,087 3,772 Material and supplies 451 430 Other current assets 531 521 6,298 6,505 Investments and Advances 2,430 2,418 Property, Plant and Equipment: Property, Plant and Equipment 50,059 46,869 Accumulated Depreciation 28,234 25,777 21,825 21,092 Intangible Assets, net 1,405 1,527 Deferred Charges and Other Assets 610 338 Total Assets $ 32,568 $ 31,880 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Debt maturing within one year $ 2,124 $ 2,951 Accounts payable 1,446 1,724 Other current liabilities 2,871 2,715 6,441 7,390 Long-Term Debt 8,116 7,924 Deferred Credits and Other Liabilities: Accumulated deferred income taxes 1,899 1,650 Unamortized investment tax credits 278 355 Other liabilities and deferred credits 2,585 2,736 4,762 4,741 Shareholders' Equity: Common stock, $1 par value 1,009 1,007 Paid-in capital 7,697 7,619 Retained earnings 5,541 4,099 Shares held in trust and treasury (532) (374) Guarantee of ESOP debt (466) (526) 13,249 11,825 Total Liabilities and Shareholders' Equity $ 32,568 $ 31,880 PRELIMINARY January 23, 1997 BELLSOUTH FINANCIAL HIGHLIGHTS SELECTED DATA (UNAUDITED) (Dollars in Millions, Except Per Share Amounts) Three Months Three Months Ended Ended December 31, December 31, 1996 1995 Earnings (Loss) per share $ .64 $ (.16)(a) Return to average common equity (annualized) 19.1% (5.3%) Return to average total capital(annualized) 13.4% (0.2%) Weighted average common shares outstanding (millions) 993 993 Dividends per share $ .36 $ .36 Property additions $1,162 $ 1,332 At December 31, 1996 1995 Common shares outstanding (millions) 991 994 Debt ratio 43.5% 46.7% Total employees 81,241 87,571 (a) Includes the impact of an after-tax charge for work force reductions of $663 ($.67 per share) and a debt refinancing charge of $62 ($.06 per share). PRELIMINARY January 23, 1997 BELLSOUTH FINANCIAL HIGHLIGHTS SELECTED DATA (UNAUDITED) (Dollars in Millions, Except Per Share Amounts) Year Ended Year Ended December 31, December 31, 1996 1995 Earnings (Loss) per share $ 2.88(a) $(1.24)(b) Return to average common equity 22.4% (9.2%) Return to average total capital 15.0% (2.7%) Weighted average common shares outstanding (millions) 994 993 Dividends per share $ 1.44 $ 1.41 Property additions $4,386 $4,092 (a) Includes an after-tax gain of $344 ($.35 per share) from sale of paging business. (b) Includes the impact of an extraordinary charge of $2,718 ($2.73 per share) related to discontinuance of SFAS No. 71, an after-tax charge for work force reductions of $663 ($.67 per share) and debt refinancing charges of $78 ($.08 per share). PRELIMINARY January 23, 1997 BELLSOUTH TELECOMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF INCOME (In Millions) For the Three Months Ended For the Year Ended December 31, December 31, 1996 1995 1996 1995 (unaudited)(unaudited)(unaudited) Operating Revenues: Local service $ 2,070 $ 1,875 $ 8,082 $ 7,294 Interstate access 881 869 3,553 3,275 Intrastate access 185 201 812 884 Toll 194 242 794 1,009 Other 386 592 1,535 2,078 Total Operating Revenues 3,716 3,779 14,776 14,540 Operating Expenses: Cost of services and products 1,279 1,374 5,133 5,268 Depreciation and amortization 828 779 3,255 3,065 Selling, general and administrative 760 651 2,681 2,344 Work force reduction charge -- 1,082 -- 1,082 Total Operating Expenses 2,867 3,886 11,069 11,759 Operating Income (Loss) 849 (107) 3,707 2,781 Interest Expense 142 148 552 573 Other Income, net 3 7 20 27 Income (Loss) Before Income Taxes and Extraordinary Losses 710 (248) 3,175 2,235 Provision for Income Taxes 251 (126) 1,170 818 Income (Loss) Before Extraordinary Losses 459 (122) 2,005 1,417 Extraordinary Loss for Discontinuance of SFAS No. 71, net of tax -- -- -- (2,718) Extraordinary Loss on Early Extinguishment of Debt, net of tax -- (62) -- (78) Net Income (Loss) $ 459 $ (184) $ 2,005 $(1,379) PRELIMINARY January 23, 1997 BELLSOUTH TELECOMMUNICATIONS FINANCIAL HIGHLIGHTS SELECTED DATA (UNAUDITED) Three Months Three Months Ended Ended December 31, December 31, 1996 1995 Property additions (millions) $ 790 $ 959 Access minutes of use (millions): Interstate 17,217 15,969 Intrastate 5,469 4,993 IntraLATA toll messages 231 323 (millions) Year Ended Year Ended December 31, December 31, 1996 1995 Property additions (millions) $3,232 $3,218 Access minutes of use (millions): Interstate 67,690 62,411 Intrastate 21,171 19,197 IntraLATA toll messages (millions) 1,023 1,374 At December 31, 1996 1995 Debt ratio 49.4% 51.9% Telephone employees 62,425 68,585 Network access lines in service (thousands) 22,135 21,133 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, Controller February 6, 1997 -----END PRIVACY-ENHANCED MESSAGE-----