-----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, PVA+trMinphYgWT2kHHlvuVc2t2leMhlWqoWQYbfZbkxtpmXu13MkajOpAYQn0k/ CNvOMI/mi+ayVp130Gx0Qg== 0000950109-97-004826.txt : 19970701 0000950109-97-004826.hdr.sgml : 19970701 ACCESSION NUMBER: 0000950109-97-004826 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 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: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08607 FILM NUMBER: 97633455 BUSINESS ADDRESS: STREET 1: 1155 PEACHTREE ST NE CITY: ATLANTA STATE: GA ZIP: 30367 BUSINESS PHONE: 4042492000 10-K/A 1 FORM 10-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C., 20549 ---------------- FORM 10-K/A AMENDMENT TO APPLICATION OR REPORT FILED PURSUANT TO SECTION 12, 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------------- BELLSOUTH CORPORATION AMENDMENT NO. 1 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report on Form 10-K for the year ended December 31, 1996 as set forth in the pages attached hereto: Item 14a(3) Exhibits: 99a Financial Statements for BellSouth Retirement Savings Plan for the year ended December 31, 1996. 99b Financial Statements for BellSouth Savings and Security Plan for the year ended December 31, 1996. ---------------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. BellSouth Corporation /s/ W. Patrick Shannon By: _________________________________ W.Patrick Shannon Vice President and Controller June 27, 1997 (3) Exhibits: (As filed with Form 10-K as of 12/31/96, unless otherwise noted).
EXHIBIT NUMBER ------- 3a Articles of Incorporation of BellSouth Corporation. (Exhibit 3a to Form 10-K for the year ended December 31, 1990, File No. 1-8607). 3a-1 Articles of Amendment to Articles of Incorporation of BellSouth Corporation. (Exhibit 3a-1 to Form 10-Q for the quarter ended September 30, 1995, File No. 1- 8607). 3b Bylaws of BellSouth Corporation. (Exhibit 3b to Form 10-Q for the quarter ended September 30, 1994, File No. 1-8607). 4 BellSouth Corporation Shareholder Rights Agreement. (Exhibit 4-b to Form 8-K. Date of report November 27, 1989). 4a No instrument which defines the rights of holders of long and intermediate term debt of BellSouth Corporation is filed herewith pursuant to Regulation S-K, Item 601(b)(4)(iii)(A). Pursuant to this regulation, BellSouth Corporation hereby agrees to furnish a copy of any such instrument to the SEC upon request. 10a BellSouth Corporation Officer Short Term Incentive Award Plan. (Exhibit 10y to Form 10-Q for the quarter ended September 30, 1996, File No. 1-8607). 10b BellSouth Corporation Executive Long Term Incentive Plan. (Exhibit 10e to Form 10-K for the year ended December 31, 1991, File No. 1-8607). 10c BellSouth Corporation Executive Long Term Disability and Survivor Protection Plan as amended and restated effective January 1, 1994. (Exhibit 10c-1 to Form 10-K for the year ended December 31, 1993, File No. 1-8607). 10d BellSouth Corporation Executive Transfer Plan. (Exhibit 10ee to Registration Statement No. 2-87846). 10e BellSouth Corporation Death Benefit Program. (Exhibit 10ff to Form 10- K for the year ended December 31, 1989, File No. 1-8607). 10f BellSouth Corporation Plan For Non-Employee Directors' Travel Accident Insurance. (Exhibit 10ii to Registration Statement No. 2-87846). 10g BellSouth Corporation Executive Incentive Award Deferral Plan as amended and restated effective September 23, 1996. 10h BellSouth Corporation Nonqualified Deferred Compensation Plan as amended and restated effective November 25, 1996. 10i BellSouth Corporation Supplemental Executive Retirement Plan as amended on May 18, 1995. (Exhibit 10j-1 to Form 10-Q for the quarter ended June 30, 1995, File No. 1-8607). 10j BellSouth Corporation Directors Retirement Plan. (Exhibit 10qq to Form 10-K for the year ended December 31, 1986, File No. 1-8607). 10k BellSouth Corporation Financial Counseling Plan. (Exhibit 10r to Form 10-K for the year ended December 31, 1992, File No. 1-8607).
2
EXHIBIT NUMBER ------- 10k-1 Amendment dated November 3, 1995 to the BellSouth Corporation Financial Counseling Plan for Executives. (Exhibit 10l-1 to Form 10-K for the year ended December 31, 1995, File No. 1-8607). 10l BellSouth Corporation Deferred Compensation Plan for Non-Employee Directors. (Exhibit 10gg to Registration Statement No. 2-87846). 10m BellSouth Corporation Executive Life Insurance Plan. (Exhibit 10v to Form 10-K for the year ended December 31, 1992, File No. 1-8607). 10n BellSouth Corporation Non-Employee Directors' Stock Option Plan. (Exhibit 10z to Form 10-Q for the quarter ended September 30, 1996, File No. 1-8607). 10o Form of Executive Officer Successor and Retirement Agreement. (Exhibit 10aa to Form 10-Q for the quarter ended September 30, 1996, File No. 1-8607). 10p BellSouth Non-Employee Directors Charitable Contribution Program. (Exhibit 10z to Form 10-K for the year ended December 31, 1992, File No. 1-8607). 10q BellSouth Personal Retirement Account Pension Plan, as amended and restated effective July 1, 1996. (Exhibit 10r to Form 10-Q for the quarter ended September 30, 1996, File No. 1-8607). 10r BellSouth Corporation Trust Under Executive Benefit Plan(s) as amended April 28, 1995. (Exhibit 10u-1 to Form 10-Q for the quarter ended June 30, 1995, File No. 1-8607). 10r-1 Amendment dated May 23, 1996 to the BellSouth Corporation Trust Under Executive Benefit Plan(s). (Exhibit 10s-1 to Form 10-Q for the quarter ended June 30, 1996, File No. 1-8607). 10s BellSouth Telecommunications, Inc. Trust Under Executive Benefit Plan(s) as amended April 28, 1995. (Exhibit 10v-1 to Form 10-Q for the quarter ended June 30, 1995, File No. 1-8607). 10s-1 Amendment dated May 23, 1996 to the BellSouth Telecommunications, Inc. Trust Under Executive Benefit Plan(s). (Exhibit 10t-1 to Form 10-Q for the quarter ended June 30, 1996, File No. 1-8607). 10t BellSouth Corporation Trust Under Board of Directors Benefit Plan(s) as amended April 28, 1995. (Exhibit 10w-1 to Form 10-Q for the quarter ended June 30, 1995, File No. 1-8607). 10t-1 Amendment dated May 23, 1996 to the BellSouth Corporation Trust Under Board Directors Benefit Plan(s). (Exhibit 10u-1 to Form 10-Q for the quarter ended June 30, 1996, File No. 1-8607). 10u BellSouth Telecommunications, Inc. Trust Under Board of Directors Benefit Plan(s) as amended April 28, 1995. (Exhibit 10x-1 to Form 10-Q for the quarter ended June 30, 1995, File No. 1-8607). 10u-1 Amendment dated May 23, 1996 to the BellSouth Telecommunications, Inc. Trust Under Board of Directors Benefit Plan(s). (Exhibit 10v-1 to Form 10-Q for the quarter ended June 30, 1996, File No. 1-8607). 10v BellSouth Corporation Stock Plan as amended on September 23, 1996 and November 24, 1996. 10w BellSouth Retirement Savings Plan as amended and restated effective July 1, 1996. (Exhibit 10x to Form 10-Q for the quarter ended September 30, 1996, File No. 1-8607). 10x BellSouth Corporation Officer Estate Enhancement Plan and Agreement. 10y BellSouth Change in Control Executive Severance Agreements. 11 Computation of Earnings Per Share.
3
EXHIBIT NUMBER ------- 12 Computation of Ratio of Earnings to Fixed Charges. 21 Subsidiaries of BellSouth. 24 Powers of Attorney. 27 Financial Data Schedule. 99a* Annual report on Form 11-K for BellSouth Retirement Savings Plan for the fiscal year ended December 31, 1996. 99b* Annual report on Form 11-K for BellSouth Savings and Security Plan for the fiscal year ended December 31, 1996.
- -------- *Filed herewith. 4 EX-99.B 2 BELLSOUTH RETIREMENT SAVINGS PLAN - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 11-K [X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1996 or [_] Transition Report Pursuant to Section 15(d) of theSecurities Exchange Act of 1934 For the transition period from Commission file number _______ to ________ 1-8607 BellSouth Retirement Savings Plan BELLSOUTH CORPORATION 1155 Peachtree Street, N.E. Atlanta, Georgia 30309-3610 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- BELLSOUTH RETIREMENT SAVINGS PLAN TABLE OF CONTENTS
ITEM PAGE - ---- ---- 1.Financial Statements Report of Independent Accountants....................................... 2 Consent of Independent Accountants...................................... 3 Statement of Net Assets Available for Plan Benefits With Fund Information as of December 31, 1996.................................... 4 Statement of Net Assets Available for Plan Benefits With Fund Information as of December 31, 1995.................................... 5 Statement of Changes in Net Assets Available for Plan Benefits With Fund Information for the Year ended December 31, 1996....................... 6 Statement of Changes in Net Assets Available for Plan Benefits With Fund Information for the Year ended December 31, 1995....................... 7 Statement of Changes in Net Assets Available for Plan Benefits With Fund Information for the Year ended December 31, 1994....................... 8 Notes to Financial Statements........................................... 9 2.Supplemental Schedules Item 27a--Schedule of Assets Held for Investment Purposes............... S-1
1 REPORT OF INDEPENDENT ACCOUNTANTS Management Savings Plan Committee of the BellSouth Retirement Savings Plan: We have audited the accompanying statements of net assets available for plan benefits with fund information of the BellSouth Retirement Savings Plan, formerly the BellSouth Management Savings and Employee Stock Ownership Plan, as of December 31, 1996 and 1995, and the related statements of changes in net assets available for plan benefits with fund information for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for plan benefits for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets Held for Investment Purposes is presented for the purpose of additional analysis and is not a required part of the basic financial statements. The fund information in the statements of net assets available for plan benefits and the statements of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedule and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Coopers & Lybrand L.L.P. Atlanta, Georgia June 25, 1997 2 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of BellSouth Corporation on Form S-8 (File Nos. 33-30773, 33-38264 and 33- 26518) of our report dated June 25, 1997, on our audits of the financial statements of the BellSouth Retirement Savings Plan, formerly the BellSouth Management Savings and Employee Stock Ownership Plan, as of December 31, 1996 and 1995, and for each of the three years in the period ended December 31, 1996, and the accompanying financial statement schedule as of December 31, 1996, which report is included in this Annual Report on Form 11-K. Coopers & Lybrand L.L.P. Atlanta, Georgia June 25, 1997 3 BELLSOUTH RETIREMENT SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION DECEMBER 31, 1996 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED FUND LOAN --------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND OTHER ALLOCATED UNALLOCATED TOTAL ASSETS ---------- -------- -------- -------- -------- ----------- ------- ------ --------- ----------- ---------- Allocated share of trust net assets.. $1,073,729 $119,943 $758,978 $806,543 $81,953 $198,155 $59,228 $6,485 $ -- $ -- $3,105,014 Investment in BellSouth Retire- ment Savings Em- ployee Stock Own- ership Plan Trust: Shares of BellSouth common stock allocated to participants.. -- -- -- -- -- -- -- -- 449,992 -- 449,992 Shares of BellSouth common stock held for future allocation....... -- -- -- -- -- -- -- -- -- 472,927 472,927 Temporary cash investments...... -- -- -- -- -- -- -- -- 2,688 14,779 17,467 ---------- -------- -------- -------- ------- -------- ------- ------ -------- -------- ---------- Total Invest- ments........... 1,073,729 119,943 758,978 806,543 81,953 198,155 59,228 6,485 452,680 487,706 4,045,400 Contributions re- ceivable.......... 1,153 177 1,674 900 221 389 -- -- 1,907 -- 6,421 Fund, BellSouth Savings and Security Plan and other transfers receivable--net... -- -- 1,502 19,960 194 1,149 216 -- 743 -- 23,764 ---------- -------- -------- -------- ------- -------- ------- ------ -------- -------- ---------- Total Assets.... 1,074,882 120,120 762,154 827,403 82,368 199,693 59,444 6,485 455,330 487,706 4,075,585 ---------- -------- -------- -------- ------- -------- ------- ------ -------- -------- ---------- LIABILITIES Distributions pay- able.............. 1,042 151 927 940 20 10 1,169 6,298 249 -- 10,806 Fund, BellSouth Savings and Security Plan and other transfers payable--net...... 21,541 331 -- -- -- 384 -- -- -- -- 22,256 Notes payable..... -- -- -- -- -- -- -- -- -- 394,577 394,577 ---------- -------- -------- -------- ------- -------- ------- ------ -------- -------- ---------- Total Liabili- ties............ 22,583 482 927 940 20 394 1,169 6,298 249 394,577 427,639 ---------- -------- -------- -------- ------- -------- ------- ------ -------- -------- ---------- Net Assets Available for Plan Benefits.......... $1,052,299 $119,638 $761,227 $826,463 $82,348 $199,299 $58,275 $187 $455,081 $ 93,129 $3,647,946 ========== ======== ======== ======== ======= ======== ======= ====== ======== ======== ==========
The accompanying notes are an integral part of these financial statements. 4 BELLSOUTH RETIREMENT SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION DECEMBER 31, 1995 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED FUND LOAN --------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND ALLOCATED UNALLOCATED TOTAL ASSETS ---------- -------- -------- -------- -------- ----------- ------- --------- ----------- ---------- Allocated share of trust net assets.. $1,076,665 $122,336 $491,410 $785,907 $50,980 $65,518 $42,354 $ -- $ -- $2,635,170 Investment in BellSouth Manage- ment Savings and Employee Stock Ownership Plan Trust: Shares of BellSouth common stock allocated to participants.. -- -- -- -- -- -- -- 421,433 -- 421,433 Shares of BellSouth common stock held for future allocation....... -- -- -- -- -- -- -- -- 579,176 579,176 Temporary cash investments...... -- -- -- -- -- -- -- 12,029 10,221 22,250 ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Total Invest- ments........... 1,076,665 122,336 491,410 785,907 50,980 65,518 42,354 433,462 589,397 3,658,029 Contributions re- ceivable.......... -- -- -- -- 139 -- 752 4,738 -- 5,629 Fund, BellSouth Savings and Security Plan, BellSouth Enterprises Retirement Savings Plan and other transfers receivable--net... 16,648 3,327 3,489 -- 1,931 2,998 -- -- -- 28,393 ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Total Assets.... 1,093,313 125,663 494,899 785,907 53,050 68,516 43,106 438,200 589,397 3,692,051 ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- LIABILITIES Distributions pay- able.............. 17,041 1,627 4,234 11,672 290 2 268 3,301 -- 38,435 Fund, BellSouth Savings and Security Plan, BellSouth Enterprises Retirement Savings Plan and other transfers payable--net...... -- -- -- 19,475 -- -- 1,551 103 -- 21,129 Notes payable..... -- -- -- -- -- -- -- -- 427,844 427,844 ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Total Liabilities..... 17,041 1,627 4,234 31,147 290 2 1,819 3,404 427,844 487,408 ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Net Assets Available for Plan Benefits.......... $1,076,272 $124,036 $490,665 $754,760 $52,760 $68,514 $41,287 $434,796 $161,553 $3,204,643 ========== ======== ======== ======== ======= ======= ======= ======== ======== ==========
The accompanying notes are an integral part of these financial statements. 5 BELLSOUTH RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED FUND LOAN ---------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND OTHER ALLOCATED UNALLOCATED TOTAL ---------- -------- -------- -------- -------- ----------- ------- ----- --------- ----------- ---------- Net Assets Available for Plan Benefits, December 31, 1995. $1,076,272 $124,036 $490,665 $754,760 $52,760 $ 68,514 $41,287 $-- $434,796 $161,553 $3,204,643 ---------- -------- -------- -------- ------- -------- ------- ---- -------- -------- ---------- Employee Contribu- tions............. 46,536 8,141 56,662 48,145 12,487 9,690 -- -- -- -- 181,661 Transfer-in of merged plan as- sets--net......... 117,707 13,409 89,075 67,608 6,984 12,218 7,561 -- -- -- 314,562 Transfer of par- ticipants' bal- ances--net........ (91,381) (20,774) 33,011 (19,131) 6,627 92,883 8,807 -- -- -- 10,042 Employing company contributions..... -- -- -- -- -- -- -- -- 6,518 -- 6,518 Supplemental con- tributions........ -- -- -- -- -- -- -- -- -- 42,299 42,299 Allocation of shares to partici- pants............. -- -- -- -- -- -- -- -- 58,923 (58,923) -- Transfer of loan repayment......... -- -- -- -- -- -- -- -- (10,405) 10,405 -- ---------- -------- -------- -------- ------- -------- ------- ---- -------- -------- ---------- Total Contributions, Allocations and Transfers......... 72,862 776 178,748 96,622 26,098 114,791 16,368 -- 55,036 (6,219) 555,082 Allocated share of Trust investment activities........ (17,652) 4,826 133,869 48,774 9,048 20,094 2,284 187 (9,681) (23,852) 167,897 ---------- -------- -------- -------- ------- -------- ------- ---- -------- -------- ---------- Total Additions... 55,210 5,602 312,617 145,396 35,146 134,885 18,652 187 45,355 (30,071) 722,979 ---------- -------- -------- -------- ------- -------- ------- ---- -------- -------- ---------- Less: Distributions to Participants...... 79,183 10,000 42,055 73,693 5,558 4,100 1,664 -- 25,070 -- 241,323 Interest on Notes Payable... -- -- -- -- -- -- -- -- -- 38,353 38,353 ---------- -------- -------- -------- ------- -------- ------- ---- -------- -------- ---------- Net Assets Available for Plan Benefits, December 31, 1996. $1,052,299 $119,638 $761,227 $826,463 $82,348 $199,299 $58,275 $187 $455,081 $ 93,129 $3,647,946 ========== ======== ======== ======== ======= ======== ======= ==== ======== ======== ==========
The accompanying notes are an integral part of these financial statements. 6 BELLSOUTH RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLEFOR PLAN BENEFITS WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1995 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED FUND LOAN ---------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND ALLOCATED UNALLOCATED TOTAL ---------- -------- -------- -------- -------- ----------- ------- --------- ----------- ---------- Net Assets Available for Plan Benefits, December 31, 1994. $ 775,501 $110,380 $336,907 $693,284 $26,311 $31,601 $28,858 $233,325 $(44,022) $2,192,145 ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Employee Contribu- tions............. 35,329 7,175 33,282 44,854 4,683 -- 752 -- -- 126,075 Transfer of par- ticipants' bal- ances--net........ (107,464) (1,145) 21,487 37,729 15,265 28,348 9,000 -- -- 3,220 Employing company contributions..... -- -- -- -- -- -- -- 7,217 -- 7,217 Supplemental con- tributions........ -- -- -- -- -- -- -- -- 41,313 41,313 Allocation of shares to partici- pants............. -- -- -- -- -- -- -- 49,927 (49,927) -- Transfer of loan repayment......... -- -- -- -- -- -- -- (8,701) 8,701 -- ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Total Contributions, Allocations and Transfers......... (72,135) 6,030 54,769 82,583 19,948 28,348 9,752 48,443 87 177,825 Allocated share of Trust investment activities........ 439,651 16,168 127,372 51,877 8,794 8,567 2,763 165,489 246,577 1,067,258 ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Total Additions... 367,516 22,198 182,141 134,460 28,742 36,915 12,515 213,932 246,664 1,245,083 ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Less: Distributions to Participants...... 66,745 8,542 28,383 72,984 2,293 2 86 12,461 -- 191,496 Interest on Notes Payable... -- -- -- -- -- -- -- -- 41,089 41,089 ---------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Net Assets Avail- able for Plan Ben- efits, December 31, 1995. $1,076,272 $124,036 $490,665 $754,760 $52,760 $68,514 $41,287 $434,796 $161,553 $3,204,643 ========== ======== ======== ======== ======= ======= ======= ======== ======== ==========
The accompanying notes are an integral part of these financial statements. 7 BELLSOUTH RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLEFOR PLAN BENEFITS WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1994 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED FUND LOAN ---------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND ALLOCATED UNALLOCATED TOTAL --------- -------- -------- -------- -------- ----------- ------- --------- ----------- ---------- Net Assets Available for Plan Benefits, December 31, 1993.. $723,567 $137,336 $332,913 $646,106 $ -- $ -- $29,884 $201,606 $ 1,724 $2,073,136 -------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Employee Contribu- tions.............. 39,344 11,494 38,628 97,395 6,905 -- 1,882 -- -- 195,648 Transfer of partic- ipants' balances-- net................ 61,315 (30,649) (22,786) (49,799) 21,482 31,661 (2,677) -- -- 8,547 Employing company contributions...... -- -- -- -- -- -- -- 13,771 -- 13,771 Supplemental con- tributions......... -- -- -- -- -- -- -- -- 39,652 39,652 Allocation of shares to partici- pants.............. -- -- -- -- -- -- -- 42,016 (42,016) -- Transfer of loan repayment.......... -- -- -- -- -- -- -- (6,709) 6,709 -- -------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Total Contributions, Allocations and Transfers.......... 100,659 (19,155) 15,842 47,596 28,387 31,661 (795) 49,078 4,345 257,618 Allocated share of Trust investment activities......... (11,466) 145 5,189 44,085 (311) -- 1,445 (6,452) (6,650) 25,985 -------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Total Additions.... 89,193 (19,010) 21,031 91,681 28,076 31,661 650 42,626 (2,305) 283,603 -------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Less: Distributions to Participants.... 37,259 7,946 17,037 44,503 1,765 60 1,676 10,907 -- 121,153 Interest on Notes Payable.......... -- -- -- -- -- -- -- -- 43,441 43,441 -------- -------- -------- -------- ------- ------- ------- -------- -------- ---------- Net Assets Available for Plan Benefits, December 31, 1994.. $775,501 $110,380 $336,907 $693,284 $26,311 $31,601 $28,858 $233,325 $(44,022) $2,192,145 ======== ======== ======== ======== ======= ======= ======= ======== ======== ==========
The accompanying notes are an integral part of these financial statements. 8 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 1. PLAN DESCRIPTION (WHOLE DOLLARS) GENERAL The following description of the BellSouth Retirement Savings Plan (the Plan), formerly the BellSouth Management Savings and Employee Stock Ownership Plan, provides only general information. For additional information, participants should refer to the Plan Prospectus/Summary Plan Description, as supplemented (SPD). A copy of the SPD can be obtained by calling the BellSouth Participant Service Center at 1-800-995-1000 or 1-615-333-9000 via company telephone. In addition, copies of the Plan agreement and other related documents which include details of the Plan can be obtained by writing to: Secretary, BellSouth Savings Plan Committee, Room 13C09, 1155 Peachtree Street, N.E., Atlanta, Georgia 30309-3610. The Plan was established by BellSouth Corporation (BellSouth) to provide a convenient way for employees to save for their retirement on a long-term basis and to acquire an ownership interest in BellSouth. The Plan consists of two parts: one is a profit sharing plan which includes a qualified cash or deferred arrangement and which is intended to qualify as such under sections 401(a), 401(k) and 401(m) and related sections of the Internal Revenue Code of 1986, as amended (the Code); the second part is an employee stock ownership plan (ESOP) which is designed as a stock bonus plan to invest primarily in shares of BellSouth common stock and which is intended to qualify under sections 401(a), 401(m) and 4975(e)(7) and related sections of the Code. The Plan covers all full- and part-time employees of participating BellSouth companies who are not covered by a collective bargaining agreement, have attained the age of 21, and have completed at least six months of service. The Plan is subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA). PLAN MERGER, AMENDMENT AND RESTATEMENT Prior to April 1, 1996, the Plan operated as the BellSouth Management Savings and Employee Stock Ownership Plan. Effective April 1, 1996, the Plan was renamed; at the same time, another Company plan, the BellSouth Enterprises Retirement Savings Plan (RSP), was merged with and into the Plan. Participants of the former RSP became participants in the Plan on April 1, 1996. These participants were credited with beginning account balances in the Plan which equalled their March 31, 1996 ending account balances within the RSP. As a result, both participant account and investment activity which occurred within the RSP prior to April 1, 1996 are excluded from the accompanying financial statements. Effective July 1, 1996, the Plan document was amended and restated. Significant changes included a change in investment valuation methods (see below) and changes to various service functions provided by Bankers Trust Company, the Plan's service provider. MASTER TRUST For investment purposes, the assets of the Plan are held in the BellSouth Master Savings Trust (the Master Savings Trust). In addition, the Master Savings Trust also holds all assets of the BellSouth Savings and Security Plan (SSP). Prior to its merger with the Plan, assets of the RSP were also held by the Master Savings Trust. At December 31, 1996, the Plan's assets were comprised of the following investment vehicles: BellSouth Stock Fund, Bond Fund, Indexed Stock Fund, Interest Income Fund, Balanced Fund and Mutual Fund Investments which include the Berger 100 Fund, DFA International Value II Fund, DFA U.S. Large Cap Value II Fund, DFA U.S. Small Cap Value II Fund, American Century/Twentieth Century Growth Investors Fund, and Fidelity Growth and Income Portfolio. At December 31, 1996 and 1995, the Plan's assets are significantly concentrated in shares of BellSouth common stock which is subject to industry and economic fluctuations. Effective July 8, 1996, all investments are valued on a daily basis. Prior to this date, all Plan investment funds other than the mutual fund investments were valued on a monthly basis. Since they were added as investment options, the mutual fund investments have been valued on a daily basis. 9 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 1. PLAN DESCRIPTION (CONTINUED)-- Prior to July 8, 1996, the assets of the Berger 100 Fund, American Century/Twentieth Century Growth Investors Fund, and the three DFA Funds were contained within a Mutual Fund Window account. In conjunction with the conversion of investment valuation to a daily basis, these mutual funds were established as separate investment funds. For further discussion, see Note 3. Also, on July 8, 1996, the Fidelity Growth and Income Portfolio was added as a new investment option. VESTING Participants are 100% vested immediately in all contributions. PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to the lesser of $50,000 or 50 percent of their before-tax account balance as defined by the Plan document and any amounts rolled over to the Plan from another qualified plan. Loan balances are secured by the balance in the participant's account and bear interest at various rates which ranged from 7.0% to 12.5% at December 31, 1996. Principal and interest is paid ratably through periodic payroll deductions. SERVICE PROVIDER Bankers Trust Company is the Trustee for the Master Savings Trust. Bankers Trust Company also serves as the recordkeeper and service center provider for the Plan. 2. ACCOUNTING POLICIES The financial statements of the Plan have been prepared in accordance with generally accepted accounting principles under the accrual method of accounting. Such financial statements include estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the amounts of revenues and expenses. Actual results could differ from those estimates. Certain amounts in prior period financial statements have been reclassified to conform to the current year's presentation. With respect to the statements of changes in net assets available for plan benefits for the years presented, allocated share of Trust investment activities includes the sum of realized gains, net of realized losses, the net change in unrealized appreciation/(depreciation) on the fair value of the investments, interest income, dividends, and investment manager fees paid by the Master Savings Trust. The values of investments in the Master Savings Trust are determined as follows: . Shares of BellSouth common stock and other securities listed on a national stock exchange are valued on the basis of the closing price per share on December 31, 1996 and December 31, 1995, as reported on the New York Stock Exchange composite tape or, if no sales were made on that date, at the closing price on the next preceding day on which sales were made; . Over-the-counter securities and government obligations are valued based on the bid prices on December 31, 1996 and 1995 from published sources where available and, if not available, from other sources considered reliable; and . Contracts with insurance companies are valued at principal plus reinvested interest. Purchases and sales of securities are reflected as of the trade date. Realized gains and losses on sales of investments are determined on the basis of average cost. Dividend income is recognized on the ex-dividend date. Interest earned on investments is recognized on the accrual basis. 10 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 3. MUTUAL FUND INVESTMENTS MUTUAL FUND WINDOW During 1994, the Berger 100 Fund, the American Century/Twentieth Century Growth Investors Fund, and the three DFA mutual funds were established as investment options. Amounts could only be directed to these mutual fund investments through transfers from the other core funds. Liquidation of these mutual funds as a result of changing investment elections, transfers or participant withdrawals could occur on any day. However, the five core funds in the Plan (BellSouth Stock Fund, Bond Fund, Indexed Stock Fund, Interest Income Fund, and Balanced Fund) were still valued on a monthly basis. As a result, a "Mutual Fund Window" or MFW was established. The MFW consisted of the five mutual funds and a temporary holding account into which any funds, generated as a result of mutual fund liquidations during a month, would be placed and held until the end of the month. At the end of the month, transfers out of the MFW would be effected with the five core funds, valued and recorded according to the month-end unit value of the core fund(s). As discussed in Note 1, on July 8, 1996 the Plan converted to a daily valuation basis for all of its investment options. This allowed transactions between the mutual funds and the five core funds to be effected and recorded on the same day at any time during the month. As a result, subsequent to that date, the MFW was eliminated and separate investment accounts for each mutual fund were maintained. With the elimination of the MFW, participants were allowed to make contributions directly to the mutual fund investments. Assets held in the MFW and subsequently in these individual fund accounts are collectively included in "Mutual Fund Investments" in the accompanying financial statements of the Plan. Also, on July 8, 1996, the Fidelity Growth and Income Portfolio was added as a new investment option. Net assets available for plan benefits by fund for Mutual Fund Investments at December 31, 1996 are as follows:
AMERICAN CENTURY/ TWENTIETH CENTURY FIDELITY DFA DFA DFA GROWTH GROWTH & MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP INVESTORS INCOME INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND PORTFOLIO OTHER TOTAL ---------- ------------- -------------- -------------- --------- --------- ----- ----------- ASSETS Allocated share of trust net assets............. $39,771 $27,939 $19,502 $39,643 $15,054 $55,838 $408 $198,155 Contributions receivable............. 55 48 24 76 22 164 -- 389 Fund, BellSouth Savings and Security Plan and other transfers receivable--net........ -- 35 183 287 29 615 -- 1,149 ------- ------- ------- ------- ------- ------- ---- -------- Total Assets.......... 39,826 28,022 19,709 40,006 15,105 56,617 408 199,693 ------- ------- ------- ------- ------- ------- ---- -------- LIABILITIES Distributions payable... -- -- -- 2 6 -- 2 10 Fund, BellSouth Savings and Security Plan and other transfers payable--net........... 21 -- -- -- -- -- 363 384 ------- ------- ------- ------- ------- ------- ---- -------- Total Liabilities..... 21 -- -- 2 6 -- 365 394 ------- ------- ------- ------- ------- ------- ---- -------- Net Assets Available for Plan Benefits.......... $39,805 $28,022 $19,709 $40,004 $15,099 $56,617 $ 43 $199,299 ======= ======= ======= ======= ======= ======= ==== ========
11 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 3. MUTUAL FUND INVESTMENTS (CONTINUED)-- Net assets available for plan benefits by fund for Mutual Fund Investments at December 31, 1995 are as follows:
AMERICAN CENTURY/ DFA DFA DFA TWENTIETH CENTURY MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL ---------- ------------- -------------- -------------- ----------------- ----------- ASSETS Allocated share of trust net assets............. $25,281 $13,031 $5,958 $11,858 $9,390 $65,518 Contributions receiv- able................... -- -- -- -- -- -- Fund, BellSouth Savings and Security Plan, BellSouth Enterprises Retirement Savings Plan and other transfers receivable--net........ 568 822 310 718 580 2,998 ------- ------- ------ ------- ------ ------- Total Assets.......... 25,849 13,853 6,268 12,576 9,970 68,516 ------- ------- ------ ------- ------ ------- LIABILITIES Distributions payable... -- 2 -- -- -- 2 Fund, BellSouth Savings and Security Plan, BellSouth Enterprises Retirement Savings Plan and other transfers payable--net........... -- -- -- -- -- -- ------- ------- ------ ------- ------ ------- Total Liabilities..... -- 2 -- -- -- 2 ------- ------- ------ ------- ------ ------- Net Assets Available for Plan Benefits.......... $25,849 $13,851 $6,268 $12,576 $9,970 $68,514 ======= ======= ====== ======= ====== =======
12 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 3. MUTUAL FUND INVESTMENTS (CONTINUED)-- Changes in net assets available for plan benefits by fund for Mutual Fund Investments for the year ended December 31, 1996 are as follows:
AMERICAN CENTURY/ FIDELITY DFA DFA DFA TWENTIETH CENTURY GROWTH & MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS INCOME INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND PORTFOLIO OTHER TOTAL ---------- ------------- -------------- -------------- ----------------- --------- ----- ----------- Net Assets Avail- able for Plan Ben- efits, December 31, 1995.......... $25,849 $13,851 $ 6,268 $12,576 $ 9,970 $ -- $-- $ 68,514 ------- ------- ------- ------- ------- ------- ---- -------- Employee Contribu- tions............. 1,483 1,235 812 1,486 722 3,952 9,690 Transfer-in of merged plan as- sets--net......... 4,544 2,839 616 2,796 1,423 -- -- 12,218 Transfer of partic- ipants' balances-- net............... 4,004 8,797 9,349 18,305 1,923 50,569 (64) 92,883 ------- ------- ------- ------- ------- ------- ---- -------- Total Contribu- tions, Allocations and Transfers..... 10,031 12,871 10,777 22,587 4,068 54,521 (64) 114,791 Allocated share of Trust investment activities........ 5,170 1,760 2,966 5,395 1,544 3,140 119 20,094 ------- ------- ------- ------- ------- ------- ---- -------- Total Additions.... 15,201 14,631 13,743 27,982 5,612 57,661 55 134,885 ------- ------- ------- ------- ------- ------- ---- -------- Less: Distributions to Participants... 1,245 460 302 554 483 1,044 12 4,100 ------- ------- ------- ------- ------- ------- ---- -------- Net Assets Available for Plan Benefits, December 31, 1996.......... $39,805 $28,022 $19,709 $40,004 $15,099 $56,617 $ 43 $199,299 ======= ======= ======= ======= ======= ======= ==== ========
13 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 3. MUTUAL FUND INVESTMENTS (CONTINUED)-- Changes in net assets available for plan benefits by fund for Mutual Fund Investments for the year ended December 31, 1995 are as follows:
AMERICAN CENTURY/ DFA DFA DFA TWENTIETH CENTURY MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL ---------- ------------- -------------- -------------- ----------------- ----------- Net Assets Available for Plan Benefits, December 31, 1994............... $14,719 $ 6,687 $1,153 $ 5,294 $3,748 $31,601 ------- ------- ------ ------- ------ ------- Employee Contributions.. -- -- -- -- -- -- Transfer of partici- pants' balances--net... 7,232 6,059 4,371 5,324 5,362 28,348 ------- ------- ------ ------- ------ ------- Total Contributions, Al- locations and Trans- fers................... 7,232 6,059 4,371 5,324 5,362 28,348 Allocated share of Trust investment activities.. 3,898 1,107 744 1,958 860 8,567 ------- ------- ------ ------- ------ ------- Total Additions......... 11,130 7,166 5,115 7,282 6,222 36,915 ------- ------- ------ ------- ------ ------- Less: Distributions to Participants........ -- 2 -- -- -- 2 ------- ------- ------ ------- ------ ------- Net Assets Available for Plan Benefits, December 31, 1995............... $25,849 $13,851 $6,268 $12,576 $9,970 $68,514 ======= ======= ====== ======= ====== =======
Changes in net assets available for plan benefits by fund for Mutual Fund Investments for the year ended December 31, 1994 are as follows:
AMERICAN CENTURY/ DFA DFA DFA TWENTIETH CENTURY MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL ---------- ------------- -------------- -------------- ----------------- ----------- Net Assets Available for Plan Benefits, December 31, 1993............... $ -- $ -- $ -- $ -- $ -- $ -- ------- ------ ------ ------ ------ ------- Employee Contributions.. -- -- -- -- -- -- Transfer of partici- pants' balances--net... 14,720 6,688 1,153 5,352 3,748 31,661 ------- ------ ------ ------ ------ ------- Total Contributions, Al- locations and Trans- fers................... 14,720 6,688 1,153 5,352 3,748 31,661 Allocated share of Trust investment activities.. -- -- -- -- -- -- ------- ------ ------ ------ ------ ------- Total Additions......... 14,720 6,688 1,153 5,352 3,748 31,661 ------- ------ ------ ------ ------ ------- Less: Distributions to Participants........ 1 1 -- 58 -- 60 ------- ------ ------ ------ ------ ------- Net Assets Available for Plan Benefits, December 31, 1994............... $14,719 $6,687 $1,153 $5,294 $3,748 $31,601 ======= ====== ====== ====== ====== =======
14 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 4. UNITS OF THE PLAN (WHOLE DOLLARS) Participants in the Plan can direct their contributions among 11 investment options as described in Note 1. The interest of a participant in each type of investment of the Plan is represented by units as described in Section 8 of the Plan document. The units of the BellSouth Stock Fund, Bond Fund, Indexed Stock Fund and Interest Income Fund were reunitized or restated on January 1, 1994. Each fund was given a "new start" beginning with a unit value of $1.0000. At the same date the number of units credited to the participants' accounts was increased, so that the number of units owned equaled the dollar amount invested. In addition, the Balanced Fund was added as an investment option on January 1, 1994 and given a unit value of $1.0000. Prior to July 8, 1996, participant accounts and the related unit values for investments other than mutual funds were valued on a monthly basis. As previously discussed in Notes 1 and 3, the plan converted to a daily unit valuation method for all participant accounts and investments on July 8, 1996. The number and value of units for investments other than the Mutual Fund Investments as of December 31, 1996 and December 31, 1995 were as follows:
DECEMBER 31, 1996 DECEMBER 31, 1995 ------------------------------ ------------------------------ TYPE OF INVESTMENT NUMBER OF UNITS VALUE PER UNIT NUMBER OF UNITS VALUE PER UNIT - ------------------ --------------- -------------- --------------- -------------- BellSouth Stock Fund.... 669,121,965 $1.5659 661,474,161 $1.6271 Bond Fund............... 99,790,033 1.1971 107,741,096 1.1512 Indexed Stock Fund...... 443,980,017 1.7112 352,903,599 1.3904 Interest Income Fund.... 678,111,231 1.2177 660,738,338 1.1423 Balanced Fund........... 57,850,389 1.4196 42,037,289 1.2551
15 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 4. UNITS OF THE PLAN (WHOLE DOLLARS) (CONTINUED)-- The number and value of units by month for each investment other than the Mutual Fund Investments during 1996 were as follows:
BELLSOUTH STOCK FUND BOND FUND -------------------- -------------------- NUMBER OF VALUE NUMBER OF VALUE 1996 UNITS PER UNIT UNITS PER UNIT ---- ----------- -------- ----------- -------- January............................... 665,653,239 1.6174 107,953,839 1.1573 February.............................. 671,161,822 1.5060 108,192,830 1.1439 March................................. 680,479,654 1.3989 105,111,499 1.1379 April................................. 760,387,352 1.5232 115,755,811 1.1339 May................................... 752,146,176 1.5472 114,386,330 1.1332 June.................................. 742,400,560 1.6146 113,200,430 1.1451 July.................................. 731,588,536 1.5779 110,765,583 1.1493 August................................ 740,243,270 1.3972 108,930,213 1.1477 September............................. 744,564,078 1.4257 105,521,947 1.1655 October............................... 715,985,481 1.5821 102,665,516 1.1887 November.............................. 694,121,202 1.5679 100,977,990 1.2067 December.............................. 669,121,965 1.5659 99,790,033 1.1971
INDEXED STOCK FUND INTEREST INCOME FUND -------------------- -------------------- NUMBER OF VALUE NUMBER OF VALUE 1996 UNITS PER UNIT UNITS PER UNIT ---- ----------- -------- ----------- -------- January............................... 357,648,575 1.4386 629,379,197 1.1485 February.............................. 363,434,554 1.4515 612,331,846 1.1544 March................................. 363,420,406 1.4657 586,959,864 1.1608 April................................. 431,141,498 1.4875 649,293,046 1.1670 May................................... 435,160,949 1.5247 645,983,277 1.1733 June.................................. 436,939,613 1.5308 648,104,415 1.1795 July.................................. 434,722,870 1.4644 655,393,190 1.1857 August................................ 439,799,850 1.4945 644,122,735 1.1919 September............................. 439,214,819 1.5790 638,079,612 1.1985 October............................... 438,021,173 1.6231 651,744,299 1.2049 November.............................. 445,080,413 1.7461 659,271,798 1.2109 December.............................. 443,980,017 1.7112 678,111,231 1.2177 BALANCED FUND -------------------- NUMBER OF VALUE 1996 UNITS PER UNIT ---- ----------- -------- January............................... 46,160,739 1.2850 February.............................. 48,660,789 1.2756 March................................. 51,073,194 1.2764 April................................. 57,229,648 1.2791 May................................... 57,180,802 1.2917 June.................................. 56,949,644 1.3049 July.................................. 56,325,144 1.2784 August................................ 58,487,305 1.2897 September............................. 57,178,476 1.3382 October............................... 57,032,853 1.3729 November.............................. 57,104,593 1.4392 December.............................. 57,850,389 1.4196
The values of mutual fund investments, all of which are traded on a national securities exchange, are based on published daily closing net asset values as reported by the respective securities exchange. 16 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 4. UNITS OF THE PLAN (CONTINUED)-- At December 31, 1996, the number of participants currently contributing to the Plan by investment direction as described in Section 7 of the Plan document was as follows:
NO. FUND DESCRIPTION PARTICIPANTS ---------------- ------------ Entirely in BellSouth Stock Fund............................... 4,013 Entirely in Bond Fund.......................................... 192 Entirely in Indexed Stock Fund................................. 3,023 Entirely in Interest Income Fund............................... 2,448 Entirely in Balanced Fund...................................... 190 Entirely in Fidelity Growth and Income Portfolio............... 124 Eighty percent in BellSouth Stock Fund, Twenty percent in In- dexed Stock Fund.............................................. 107 Seventy percent in BellSouth Stock Fund, Thirty percent in In- dexed Stock Fund.............................................. 101 Sixty percent in BellSouth Stock Fund, Forty percent in Indexed Stock Fund.................................................... 119 Forty percent in BellSouth Stock Fund, Sixty percent in Indexed Stock Fund.................................................... 100 Thirty percent in BellSouth Stock Fund, Seventy percent in In- dexed Stock Fund.............................................. 139 Twenty percent in BellSouth Stock Fund, Eighty percent in In- dexed Stock Fund.............................................. 111 Equally in BellSouth Stock Fund and Bond Fund.................. 237 Equally in BellSouth Stock Fund and Indexed Stock Fund......... 1,541 Equally in BellSouth Stock Fund and Interest Income Fund....... 1,058 Equally in BellSouth Stock Fund and Balanced Fund.............. 103 Equally in Bond Fund and Indexed Stock Fund.................... 298 Equally in Indexed Stock Fund and Interest Income Fund......... 724 Equally in Indexed Stock Fund and Balanced Fund................ 347 Equally in Indexed Stock Fund and Fidelity Growth and Income Portfolio..................................................... 157 Equally in BellSouth Stock Fund, Bond Fund and Indexed Stock Fund.......................................................... 106 Equally in BellSouth Stock Fund, Indexed Stock Fund and Interest Income Fund.......................................... 215 Various Fund combinations*..................................... 6,922 ------ Total Participants........................................... 22,375 ======
- -------- * Includes all other investment directions having less than 100 participants. All employing company contributions are made either to the ESOP or, for certain Plan participants who were formerly participants in the RSP, to the BellSouth Stock Fund. As such, all employees currently contributing to the Plan are participants in either the ESOP or the BellSouth Stock Fund. For more information, refer to Schedule A of the Plan Document. 5. CONTRIBUTIONS For the year ended December 31, 1996, employee contributions to the Plan were recorded based upon authorized before-tax or after-tax basic contributions of up to 6% and before-tax or after-tax supplemental contributions of not more than 9% of compensation for employees electing the maximum 6% basic contribution. Total before-tax and after-tax contributions could not exceed 15% of compensation. Before January 1, 1996, the total of before-tax basic and supplemental contributions could not exceed 12% of compensation. As discussed in Section 3 of the Plan document, participants may also rollover amounts into the Plan from other qualified plans. The employing company makes contributions to the ESOP or the BellSouth Stock Fund as appropriate in respect of each participant's authorized basic contribution. The rate of the employing company matching contribution remains in effect for a twelve month period from April 1 through March 31. Employing company matching contribution rates for the three years ended December 31, 1996 were as follows:
1996 1995 1994 ---- ---- ---- January-March.............................................. 74% 81% 64% April-December............................................. 80% 74% 81%
17 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 6. PLAN EXPENSES Each participant of the Plan is charged a flat annual fee for Plan administrative expenses, including recordkeeping, trustee, and other expenses considered reasonable by the Plan administrator. The fee is divided on a pro rata basis among each investment option of the participant. The per- participant fee for 1996, 1995 and 1994 was $26.40, $22.00 and $22.00, respectively. Additional fees are also charged to individual participants for various services provided by the Plan's recordkeeper and the BellSouth Participant Service Center. Investment manager fees are paid by the Master Savings Trust. Investment manager fees, included in allocated share of Trust investment activities in the statements of changes in net assets available for plan benefits for the years presented, were as follows:
1996 1995 1994 ---- ---- ---- Bond Fund........................................................ $367 $275 $286 Indexed Stock Fund............................................... 138 107 100 Interest Income Fund............................................. 346 337 317 Balanced Fund.................................................... 71 37 24 ---- ---- ---- $922 $756 $727 ==== ==== ====
For the Mutual Fund Investments, investment manager fees are not paid directly from the Master Savings Trust. However, these investments are subject to "expense ratios" which reduce the overall return of the respective mutual fund. Expense ratios, expressed in percentage terms, which were assessed against the Mutual Fund Investments by their respective managers during 1996 were as follows:
FOR THE YEAR ENDED DECEMBER 31, 1996 ---------- Berger 100 Fund...................................................... 1.42% DFA International Value II Fund...................................... 0.86% DFA U.S. Large Cap Value II Fund..................................... 0.82% DFA U.S. Small Cap Value II Fund..................................... 0.85% American Century/Twentieth Century Growth Investors Fund............. 1.00% Fidelity Growth & Income Portfolio................................... 0.74%
For the three years ended December 31, 1996, no fees were paid to investment managers for management of the BellSouth Stock Fund. 7. TAX STATUS The Internal Revenue Service has determined and informed the Company by letter dated January 11, 1996, that the Plan and related trust meet the requirements of Section 401(a) of the Code and are exempt from federal income taxes under Section 501(a) of the Code. As discussed in Note 1, the Plan document was amended and restated in July of 1996. BellSouth is currently in the process of requesting a new determination letter and believes that the Plan, in its current form, will maintain its tax exempt status. Therefore, no provision for income taxes has been included in the Plan's financial statements. For information on the federal income tax effects on the employee with respect to the Plan, participants should refer to the SPD. 18 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 8. TERMINATION PRIORITIES BellSouth intends to continue the Plan indefinitely but reserves the right to terminate or amend it. In the event the Plan is terminated, subject to conditions set forth in ERISA, participants will receive written notification of plan termination at least 30 days in advance. The participant may then elect to leave all units in his/her account until they leave the Company or take a lump sum distribution of the value of his/her units. 9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST The assets of the Plan are held in the Master Savings Trust. At December 31, 1996, the assets of the Plan are commingled with the assets of the BellSouth Savings and Security Plan. Prior to April 1, 1996, the Plan's assets were also commingled with the assets of the RSP, which was merged with and into the Plan on April 1, 1996. The assets of the BellSouth Employee Stock Ownership Plan (PAYSOP) are held in a sub-trust of the Master Savings Trust. This sub-trust is not included in the following Master Savings Trust information. The Plan's allocated share of the total net assets of all funds in the Master Savings Trust at December 31, 1996 and 1995 was 67.7572% and 59.3661%, respectively. The Plan's allocated share of the net assets of each fund in the Master Savings Trust at December 31, 1996 and 1995 were as follows:
1996 1995 --------- --------- BellSouth Stock Fund.................................... 53.08833% 47.80304% Bond Fund............................................... 94.49191% 84.69528% Indexed Stock Fund...................................... 88.12704% 77.59665% Interest Income Fund.................................... 71.05430% 65.65475% Balanced Fund........................................... 84.53626% 79.25020% Berger 100 Fund......................................... 72.14168% 71.62076% DFA International Value II Fund......................... 89.86031% 80.31166% DFA U.S. Large Cap Value II Fund........................ 77.72083% 73.87562% DFA U.S. Small Cap Value II Fund........................ 84.49196% 77.37780% American Century/Twentieth Century Growth Investors Fund................................................... 72.15016% 71.27286% Fidelity Growth & Income Portfolio...................... 74.72260% -- Loan Fund............................................... 76.47949% 71.20703% Other................................................... 76.66749% --
19 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)-- The financial position of the Master Savings Trust at December 31, 1996 and 1995 was as follows:
1996 1995 ---- ---- Assets: Investment at value: BellSouth Stock Fund: Shares of BellSouth common stock...................... $2,009,039 $2,216,148 Temporary cash investments............................ 490 33,313 Bond Fund: Securities............................................ 121,647 139,775 Temporary cash investments............................ 4,223 2,302 Indexed Stock Fund: Equity Index Fund..................................... 862,465 630,335 Temporary cash investments............................ 86 3,035 Interest Income Fund: Contracts............................................. 1,088,329 1,182,614 Temporary cash investments............................ 46,790 14,514 Balanced Fund: Securities............................................ 86,837 36,043 Temporary cash investments............................ 10,116 28,185 Berger 100 Fund*: Securities............................................ 55,121 34,304 Temporary cash investments............................ 8 -- DFA International Value II Fund*: Securities............................................ 31,884 16,020 DFA U.S. Large Cap Value II Fund*: Securities............................................ 26,424 7,801 DFA U.S. Small Cap Value II Fund*: Securities............................................ 48,291 15,151 Temporary cash investments............................ 2 -- American Century/Twentieth Century Growth Investors Fund*: Securities............................................ 20,883 12,920 Fidelity Growth & Income Portfolio Securities............................................ 75,746 -- Temporary cash investments............................ 2 -- Mutual Fund Window: Temporary cash investments............................ 856 1,800 Loan Fund: Loans to participants................................. 73,981 59,432 Temporary cash investments............................ 141 39 Contribution Account+ Temporary cash investments............................ 123 -- Distribution Account+ Temporary cash investments............................ 6,831 -- Expense Account+ Temporary cash investments............................ 1,505 -- Distributable shares................................... 397 3,004 Dividends and interest income receivable............... 2,346 2,516 Receivable for investments sold........................ 14,806 4,752 Variation margin receivable............................ 18 33 ---------- ---------- $4,589,387 $4,444,036 Liabilities: Payable for investments purchased...................... 7,182 4,741 Variation margin payable............................... 95 -- Administrative fees payable............................ 1,040 648 ---------- ---------- Trust net assets (excluding ESOP Trusts)............... 4,581,070 4,438,647
20 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
1996 1995 ---- ---- Investment in ESOP Trusts: Shares of BellSouth common stock allocated to participants. 835,717 773,185 Distributable shares....... 37 845 Shares of BellSouth common stock held for fu- ture alloca- tion......... 707,649 871,871 Temporary cash investments.. 30,035 65,498 ---------- ---------- Total invest- ments........ 6,154,508 6,150,046 Liabilities: Payable for investments purchased.... -- 19,031 Notes payable. 594,334 647,311 ---------- ---------- Trust net as- sets......... $5,560,174 $5,483,704 ========== ========== Investments at cost......... $4,329,557 $4,091,362 ========== ==========
- -------- * Prior to 1996, this fund was included within the Mutual Fund Window. + These accounts are included as "Other" in the accompanying financial statements. Distributions payable in shares at year end are reclassed from BellSouth common stock and ESOP--BellSouth common stock held for future allocation to the respective "Distributable Shares" line. See Item 27a, BellSouth Master Savings Trust Schedule of Assets Held for Investment Purposes. Assets in the BellSouth Stock Fund, Bond Fund, Indexed Stock Fund, Mutual Fund Investments and some of the assets in the Balanced Fund are invested in securities which fluctuate in market value, and the values of the units fluctuate daily. Assets in the Interest Income Fund are invested in a number of investment contracts with diversified groups of high quality financial institutions. The value of the Interest Income Fund is based upon the principal invested and the interest credited, and the value of the units should increase as of the end of each day. Some of these contracts are unsecured, general obligations of such companies. Their security is subject to the ability of the insurance companies or other financial institutions to repay their debts generally as they come due. Other contracts are backed specifically by high quality, fixed income assets. Therefore, many of the new investment contracts have the underlying assets held in a separate account of an insurance company or in a trust fund. These assets are protected from the general creditors of the contract issuer. The contracts held by the Trust in the Interest Income Fund are considered fully benefit-responsive in accordance with AICPA Statement of Position 94-4. A fully benefit-responsive investment contract provides a liquidity guarantee by a financially responsible third party of principal and previously accrued interest for liquidations, transfers, loans or hardship withdrawals initiated by plan participants exercising their rights to withdraw, borrow or transfer funds under the terms of the ongoing plan. The fair value of these investment contracts as of December 31, 1996 and 1995 was $1,098,227 and $1,202,906, respectively. The crediting interest rate at December 31, 1996 and 1995, was 6.57% and 6.75%, respectively. The average yield for the years ended December 31, 1996 and 1995, was 6.52% and 6.82%, respectively. Interest rates are reset on a semi-annual, quarterly or monthly basis, whereby, such rates are reset to move the current book value of these investments toward the projected future market value over the life of the contract. In three separate transactions during 1990, the BellSouth Management Savings and Employee Stock Ownership Plan Trust and the BellSouth Savings and Security ESOP Trust (the "ESOP Trusts") issued medium-term notes in the amounts of $550 million and $300 million, respectively, to fund the ESOP. Assets held in each investment fund of the Plan, other than the assets held by the ESOP Trusts described below, are unavailable to service the ESOP debt. 21 BELLSOUTH RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)-- Assets held by the ESOP Trusts are generally unavailable to satisfy claims of holders of debt securities issued by the ESOP Trusts to finance the acquisition of shares of BellSouth common stock for the benefit of ESOP participants. The debt securities are guaranteed by and are subject to direct recourse against BellSouth. BellSouth contributes to the Trusts an amount necessary, net of ESOP dividends and interest, to service the ESOP loan payments and to purchase any additional shares required to meet the match obligation. Such contributions are subject to the claims of such holders but are held at BellSouth and paid to the ESOP Trust twice yearly to fund, on a same day basis, required payments by the ESOP Trusts on the notes. Such contributions would not remain in the Plan Trusts unless there were a default on the debt securities by the ESOP Trustee after having received the required contributions from BellSouth. Therefore, holders of the debt securities should not rely on the assets of the ESOP Trusts in arriving at an investment decision with respect to the debt securities. For the years ended December 31, 1996 and 1995, BellSouth made cash contributions to the ESOP Trusts in the amount of $67,621 and $66,174 for the purpose of servicing the guaranteed debt, and cash contributions in the amount of $23,539 and $34,832 to purchase additional shares to meet the match obligations. A description of each debt issue is as follows: BellSouth Retirement Savings Employee Stock Ownership Plan Trust:
TITLE AMOUNT INTEREST RATE DUE DATE ----- -------- ------------- ------------ Amortizing Medium-Term Notes, Series A...... $275,000 9.125% July 1, 2003 Amortizing Medium-Term Notes, Series A...... $275,000 9.19% July 1, 2003 -------- Total..................................... $550,000
BellSouth Savings and Security Employee Stock Ownership Plan Trust:
TITLE AMOUNT INTEREST RATE DUE DATE ----- -------- ------------- ------------ Amortizing Medium-Term Notes, Series A...... $300,000 9.125% July 1, 2003
Maturities of the ESOP Trusts' long-term debt outstanding at December 31, 1996 are as follows:
1997 1998 1999 2000 2001 THEREAFTER TOTAL ------- ------- ------- ------- ------- ---------- -------- Maturities......... $59,898 $67,418 $75,589 $84,470 $94,128 $212,831 $594,334 ======= ======= ======= ======= ======= ======== ========
Investment activities of the Master Savings Trust are allocated to the Plan based upon the total of each individual plan participant's share of the Master Savings Trust investment activities during the period ended December 31, 1996. The Master Savings Trust investment activities for the years ended December 31, 1996, 1995 and 1994 were as follows:
1996 1995 1994 --------- ---------- --------- Investment Activities: Dividends on shares of BellSouth Corporation common stock............................... $ 129,554 $ 123,588 $ 119,486 Interest Income Fund income................. 69,519 77,893 69,048 Other interest.............................. 25,723 18,523 12,748 Net change in unrealized appreciation/(depreciation) on investments. (240,693) 1,581,522 (185,677) Net realized gain on investments............ 153,494 62,815 14,693 Investment Manager Fees..................... (1,143) (1,017) (980) --------- ---------- --------- Net investment activities.................... $ 136,454 $1,863,324 $ 29,318 ========= ========== =========
22 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (IN THOUSANDS)
DECEMBER 31, 1996 ------------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- ---------- ---------- BELLSOUTH STOCK FUND SHARES OF BELLSOUTH COMMON STOCK*#--99.9%........ 49,616 $1,125,305 $2,009,436 ---------- ---------- TEMPORARY CASH INVESTMENTS--0.1%................. 256 $ 488 $ 490 ---------- ---------- Total BellSouth Stock Fund--100%............... $1,125,793 $2,009,926 ---------- ---------- BOND FUND U.S. GOVERNMENT TREASURY NOTES--56.9% U.S. Treasury Notes, 7.875%, 04/15/98........... $ 2,250 $ 2,326 $ 2,309 U.S. Treasury Notes, 8.250%, 07/15/98........... $ 475 $ 493 $ 492 U.S. Treasury Notes, 6.875%, 07/31/99........... $ 8,350 $ 8,489 $ 8,520 U.S. Treasury Notes, 7.750%, 12/31/99........... $ 950 $ 995 $ 994 U.S. Treasury Notes, 7.125%, 02/29/00........... $ 6,575 $ 7,007 $ 6,769 U.S. Treasury Notes, 6.875%, 03/31/00........... $ 7,850 $ 8,300 $ 8,027 U.S. Treasury Notes, 6.250%, 05/31/00........... $ 7,425 $ 7,684 $ 7,455 U.S. Treasury Notes, 6.125%, 07/31/00........... $ 8,400 $ 8,707 $ 8,400 U.S. Treasury Notes, 6.500%, 08/15/05........... $ 8,150 $ 7,939 $ 8,202 U.S. Treasury Notes, 8.875%, 11/15/98........... $ 2,250 $ 2,414 $ 2,367 U.S. Treasury Notes, 8.500%, 02/15/00........... $ 4,275 $ 4,770 $ 4,566 U.S. Treasury Notes, 8.875%, 05/15/00........... $ 2,550 $ 2,899 $ 2,763 U.S. Treasury Notes, 8.750%, 08/15/00........... $ 4,000 $ 4,558 $ 4,335 U.S. Treasury Notes, 5.750%, 12/31/98........... $ 6,375 $ 6,371 $ 6,360 ---------- ---------- $ 72,952 $ 71,559 ---------- ---------- U.S. GOVERNMENT TREASURY BONDS--18.4% U.S. Treasury Bonds, 11.625%, 11/15/04.......... $ 600 $ 799 $ 792 U.S. Treasury Bonds, 9.375%, 02/15/06.......... $ 11,000 $ 12,334 $ 13,238 U.S. Treasury Bonds, 7.250%, 05/15/16.......... $ 7,800 $ 7,420 $ 8,236 U.S. Treasury Bonds, 7.500%, 11/15/16.......... $ 825 $ 869 $ 893 ---------- ---------- $ 21,422 $ 23,159 ---------- ---------- FEDERAL AGENCY OBLIGATIONS--14.2% Federal Natl. Mtg. Assn., 5.375%, 01/13/98...... $ 1,500 $ 1,500 $ 1,492 Federal Home Ln. Bks., 6.06%, 10/02/97.......... $ 580 $ 581 $ 580 Federal Natl. Mtg. Assn., 5.92%, 04/03/98....... $ 1,400 $ 1,400 $ 1,399 Federal Natl. Mtg. Assn., 5.890%, 11/13/98...... $ 2,500 $ 2,500 $ 2,495 Government Natl. Mtg. Assn., 6.5%, 12/15/23..... $ 2,581 $ 2,418 $ 2,477 Government Natl. Mtg. Assn., 6.5%, 10/15/23..... $ 2,776 $ 2,606 $ 2,664 Government Natl. Mtg. Assn., 6.5%, 11/15/23..... $ 1,435 $ 1,329 $ 1,377 Government Natl. Mtg. Assn., 6.5%, 2/15/24...... $ 2,680 $ 2,500 $ 2,572 Government Natl. Mtg. Assn., 6.5%, 07/15/24..... $ 2,824 $ 2,688 $ 2,775 ---------- ---------- $ 17,522 $ 17,831 ---------- ----------
S-1 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED) (IN THOUSANDS)
DECEMBER 31, 1996 --------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- -------- -------- DOMESTIC CORPORATE OBLIGATIONS--7.2% Cleveland Elec. Illum. Co. 9.450%, 12/01/97..................................... $ 1,000 $ 1,091 $ 1,026 Philadelphia Elec. Co. 5.375%, 08/15/98..................................... $ 1,300 $ 1,287 $ 1,284 Virginia Elec. & Pwr Co. 6.350%, 06/08/98..................................... $ 1,000 $ 1,004 $ 1,005 AMR Corp Del. 7.470%, 01/28/97..................................... $ 1,000 $ 1,014 $ 1,001 Ryder SYS Inc. 7.50%, 04/29/98...................................... $ 177 $ 180 $ 179 USX-Marathon Group Inc. 8.875%, 09/15/98..................................... $ 1,000 $ 998 $ 1,018 USX Corp 6.375% 07/15/98...................................... $ 350 $ 352 $ 349 General Mtrs. Accept. Corp. 6.900% 02/19/98...................................... $ 3,200 $ 3,233 $ 3,236 -------- -------- $ 9,159 $ 9,098 -------- -------- TEMPORARY CASH INVESTMENTS--3.3%....................... 2,208 $ 4,215 $ 4,223 -------- -------- Total Bond Fund--100.0%.............................. $125,270 $125,870 -------- -------- INDEXED STOCK FUND BANKERS TRUST PYRAMID EQUITY INDEX FUND*--99.9%........ 507 $466,088 $862,465 -------- -------- TEMPORARY CASH INVESTMENTS--0.1%....................... 45 $ 86 $ 86 -------- -------- Total Indexed Stock Fund--100.0%................... $466,174 $862,551 -------- -------- INTEREST INCOME FUND ANNUITY CONTRACTS WITH INSURANCE COMPANIES--95.9%+ Aetna Life Insurance Company (7.49%-9.81%)........................................ $ 73,201 $ 73,201 $ 73,201 Allstate Life Insurance Company (5.74%).............................................. $ 25,228 $ 25,228 $ 25,228 BT Basic (6.21%).............................................. $104,830 $104,830 $104,830 CDC Investment Management Corp. (4.906%-7.61%)....................................... $ 76,622 $ 76,622 $ 76,622 Commonwealth Life Insurance Co. (9.37%).............................................. $ 1,213 $ 1,213 $ 1,213 Hartford Life (8.70%).............................................. $ 8,078 $ 8,078 $ 8,078 Jackson National Life (5.8%)............................................... $ 15,050 $ 15,050 $ 15,050 John Hancock Mutual Life (7.13%-7.71%)........................................ $146,797 $146,797 $146,797
S-2 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED) (IN THOUSANDS)
DECEMBER 31, 1996 ------------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- ---------- ---------- MBL Life Assurance Corp. (3.5%-5.1%).................................... $ 3,470 $ 3,470 $ 3,470 Massachusetts Mutual (9.70%)........................................ $ 55,350 $ 55,350 $ 55,350 Metropolitan Life Insurance Co. (5.79%-8.75%).................................. $ 97,029 $ 97,029 $ 97,029 New York Life Insurance Co. (5.39%-8.45%).................................. $ 34,158 $ 34,158 $ 34,158 Provident Life & Accident (6.38%)........................................ $110,372 $ 110,372 $ 110,372 Peoples Security Life Insurance Co. (5.03%-8.57%).................................. $100,243 $ 100,243 $ 100,243 Provident National (5.13%-8.53%).................................. $ 3,922 $ 3,922 $ 3,922 Prudential Insurance Company of America (8.10%-9.35%).................................. $ 16,597 $ 16,597 $ 16,597 Rabobank Nederland (6.17%-7.62%).................................. $ 75,258 $ 75,258 $ 75,258 Sun Life Association, Canada (5.78%-5.79%).................................. $ 24,028 $ 24,028 $ 24,028 TransAmerican Life & Annuity (7.54%)........................................ $ 66,424 $ 66,424 $ 66,424 Union Bank of Switzerland (7.28%-8.29%).................................. $ 50,459 $ 50,459 $ 50,459 ---------- ---------- $1,088,329 $1,088,329 ---------- ---------- TEMPORARY CASH INVESTMENTS--4.1%................. $ 46,790 $ 46,790 $ 46,790 ---------- ---------- Total Interest Income Fund--100.0%............. $1,135,119 $1,135,119 ---------- ---------- LOAN FUND LOANS TO PARTICIPANTS (7%-12.5%)--99.8%.......... $ 73,981 $ 73,981 $ 73,981 ---------- ---------- TEMPORARY CASH INVESTMENTS--.2%.................. $ 141 $ 141 $ 141 ---------- ---------- Total Loan Fund--100.0%........................ $ 74,122 $ 74,122 ---------- ---------- BALANCED FUND TEMPORARY CASH INVESTMENTS--10.4%................ 5,292 $ 9,994 $ 10,116 ---------- ---------- U.S. TREASURY BILL, EXP. 01/09/97--1.2%.......... $ 1,190 $ 1,137 $ 1,137 ---------- ---------- BT PYRAMID BROAD MARKET BOND FUND--35.6%......... 18,820 $ 31,335 $ 34,510 ---------- ---------- BT EQUITY INDEX FUND--52.8%...................... 30,115 $ 37,595 $ 51,190 ---------- ---------- Total Balanced Fund--100.0%.................... $ 80,061 $ 96,953 ---------- ----------
S-3 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED) (IN THOUSANDS)
DECEMBER 31, 1996 ------------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- ---------- ---------- BERGER 100 FUND SHARES OF BERGER 100--99.9%...................... 3,091 $ 54,258 $ 55,121 ---------- ---------- TEMPORARY CASH INVESTMENTS--0.1%................. 4 $ 8 $ 8 ---------- ---------- Total Berger 100 Fund--100.0%.................. $ 54,266 $ 55,129 ---------- ---------- DFA U.S. SMALL CAP VALUE II FUND SHARES OF DIMENSIONAL FUND ADVISORS U.S. SMALL CAP VALUE II--99.9%............................. 3,290 $ 41,716 $ 48,291 ---------- ---------- TEMPORARY CASH INVESTMENTS--0.1%................. 1 $ 2 $ 2 ---------- ---------- Total DFA U.S. Small Cap Value II Fund--100.0%. $ 41,718 $ 48,293 ---------- ---------- DFA INTERNATIONAL VALUE II FUND SHARES OF DIMENSIONAL FUND ADVISORS INTERNATIONAL VALUE II--100.0%................................ 2,906 $ 30,386 $ 31,884 ---------- ---------- Total DFA International Value II Fund--100.0%.. $ 30,386 $ 31,884 ---------- ---------- DFA U.S. LARGE CAP VALUE II FUND SHARES OF DIMENSIONAL FUND ADVISORS U.S. LARGE CAP VALUE II--100.0%............................ 1,782 $ 23,336 $ 26,424 ---------- ---------- Total DFA U.S. Large Cap Value II Fund--100.0%. $ 23,336 $ 26,424 ---------- ---------- AMERICAN CENTURY/TWENTIETH CENTURY GROWTH INVESTORS FUND SHARES OF AMERICAN CENTURY/TWENTIETH CENTURY GROWTH INVESTORS FUND--100.0%................... 954 $ 20,554 $ 20,883 ---------- ---------- Total American Century/Twentieth Century Growth Investors Fund--100.0%........................ $ 20,554 $ 20,883 ---------- ---------- FIDELITY GROWTH & INCOME PORTFOLIO SHARES OF FIDELITY GROWTH AND INCOME PORTFOLIO-- 99.9%........................................... 2,465 $ 73,089 $ 75,746 ---------- ---------- TEMPORARY CASH INVESTMENTS--0.1%................. 1 $ 2 $ 2 ---------- ---------- Total Fidelity Growth & Income Portfolio-- 100.0%........................................ $ 73,091 $ 75,748 ---------- ---------- CONTRIBUTION ACCOUNT++ TEMPORARY CASH INVESTMENTS--100.0%............... 64 $ 123 $ 123 ---------- ---------- Total Contribution Acct.--100.0%............... $ 123 $ 123 ---------- ---------- DISTRIBUTION ACCOUNT++ TEMPORARY CASH INVESTMENTS--100.0%............... 3,573 $ 6,824 $ 6,831 ---------- ---------- Total Distribution Acct.--100.0%............... $ 6,824 $ 6,831 ---------- ---------- EXPENSE ACCOUNT FUND++ TEMPORARY CASH INVESTMENTS--100.0%............... 787 $ 1,487 $ 1,505 ---------- ---------- Total Expense Acct.--100.0%.................... $ 1,487 $ 1,505 ---------- ----------
S-4 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED) (IN THOUSANDS)
DECEMBER 31, 1996 ----------------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- ---------- ---------- EMPLOYEE STOCK OWNERSHIP PLAN SHARES OF BELLSOUTH COMMON STOCK*#--97.2%.... 38,109 $1,040,775 $1,543,403 ---------- ---------- Temporary Cash Investments--2.8%............. 7,711 $ 29,639 $ 30,035 ---------- ---------- Total Employee Stock Ownership Fund-- 100.0%.................................... $1,070,414 $1,573,438 ---------- ---------- MUTUAL FUND WINDOW TEMPORARY CASH INVESTMENTS--100.0% BT Pyramid Cash Plus Fund................... 371 $ 693 $ 710 Cash in Transit............................. $139 $ 139 $ 139 Schwab Retirement Money Fund................ $ 7 $ 7 $ 7 ---------- ---------- Total Mutual Fund Window--100.0%........... $ 839 $ 856 ---------- ---------- TOTAL INVESTMENTS.......................... $4,329,577 $6,145,655 ========== ==========
- -------- NOTES Percentages represent the percentage of the investments of each fund of the Master Savings Trust. * This investment is a security issued by a party-in-interest to the Plan. # Investment represents 5% or more of the Net Assets of the Master Savings Trust. + The contracts with these insurance companies (interest rates indicated in parentheses) guarantee the repayment of principal and the crediting of interest resulting in a composite effective annual interest rate of 6.52% for the year 1996. The timing of the remittance of participating employee contributions and other participating employee-directed transactions may cause the actual yield to vary from this rate. The composite interest rate is subject to annual adjustment. ++These accounts are included as "other" in the Plan's Financial Statements. S-5 EX-99.A 3 BELLSOUTH SAVINGS AND SECURITY PLAN - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 11-K [X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1996 or [_] Transition Report Pursuant to Section 15(d) of theSecurities Exchange Act of 1934 For the transition Commission file number period from __ to ___ 1-8607 BellSouth Savings and Security Plan BELLSOUTH CORPORATION 1155 Peachtree Street, N.E. Atlanta, Georgia 30309-3610 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- BELLSOUTH SAVINGS AND SECURITY PLAN TABLE OF CONTENTS
ITEM PAGE ---- ---- 1. Financial Statements.............................................. 2 Report of Independent Accountants................................. 2 Consent of Independent Accountants................................ 3 Statement of Net Assets Available for Plan Benefits With Fund Information as of December 31, 1996.............................. 4 Statement of Net Assets Available for Plan Benefits With Fund Information as of December 31, 1995.............................. 5 Statement of Changes in Net Assets Available for Plan Benefits With Fund Information for the Year ended December 31, 1996................. 6 Statement of Changes in Net Assets Available for Plan Benefits With Fund Information for the Year ended December 31, 1995................. 7 Statement of Changes in Net Assets Available for Plan Benefits With Fund Information for the Year ended December 31, 1994................. 8 Notes to Financial Statements..................................... 9 2. Supplemental Schedules Item 27a--Schedule of Assets Held for Investment Purposes......... S-1
1 REPORT OF INDEPENDENT ACCOUNTANTS Management Savings Plan Committee of the BellSouth Savings and Security Plan: We have audited the accompanying statements of net assets available for plan benefits with fund information of the BellSouth Savings and Security Plan as of December 31, 1996 and 1995, and the related statements of changes in net assets available for plan benefits with fund information for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 1996 and 1995, and the changes in net assets available for plan benefits for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets Held for Investment Purposes is presented for the purpose of additional analysis and is not a required part of the basic financial statements. The fund information in the statements of net assets available for plan benefits and the statements of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedule and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Coopers & Lybrand L.L.P. Atlanta, Georgia June 25, 1997 2 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of BellSouth Corporation on Form S-8 (File Nos. 33-30772 and 33-38265) of our report dated June 25, 1997, on our audits of the financial statements of the BellSouth Savings and Security Plan as of December 31, 1996 and 1995, and for each of the three years in the period ended December 31, 1996, and the accompanying financial statement schedule as of December 31, 1996, which report is included in this Annual Report on Form 11-K. Coopers & Lybrand L.L.P. Atlanta, Georgia June 25, 1997 3 BELLSOUTH SAVINGS AND SECURITY PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION DECEMBER 31, 1996 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED MUTUAL FUND LOAN --------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND OTHER ALLOCATED UNALLOCATED TOTAL ASSETS --------- ------ -------- -------- -------- ----------- ------- ------ --------- ----------- ---------- Allocated share of trust net assets.. $948,885 $6,997 $102,271 $328,749 $15,011 $54,263 $17,906 $1,974 $ -- $ -- $1,476,056 Investment in BellSouth Savings and Security Employee Stock Ownership Plan Trust: Shares of BellSouth common stock allocated to participants.. -- -- -- -- -- -- -- -- 385,762 -- 385,762 Shares of BellSouth common stock held for future allocation ...... -- -- -- -- -- -- -- -- -- 234,722 234,722 Temporary cash investments...... -- -- -- -- -- -- -- -- 4,513 8,055 12,568 -------- ------ -------- -------- ------- ------- ------- ------ -------- -------- ---------- Total Investments..... 948,885 6,997 102,271 328,749 15,011 54,263 17,906 1,974 390,275 242,777 2,109,108 Contributions receivable........ 1,537 35 425 1,300 76 154 1,694 -- 5,221 Fund, BellSouth Retirement Savings Plan and other transfers receivable--net... -- -- 448 1,530 1 984 27 -- 125 -- 3,115 -------- ------ -------- -------- ------- ------- ------- ------ -------- -------- ---------- Total Assets.... 950,422 7,032 103,144 331,579 15,088 55,401 17,933 1,974 392,094 242,777 2,117,444 -------- ------ -------- -------- ------- ------- ------- ------ -------- -------- ---------- LIABILITIES Distributions payable........... 1,288 19 -- 190 3 25 200 1,879 119 -- 3,723 Fund, BellSouth Retirement Savings Plan and other transfers payable--net...... 2,798 35 -- -- -- -- -- -- -- -- 2,833 Notes payable..... -- -- -- -- -- -- -- -- -- 199,757 199,757 -------- ------ -------- -------- ------- ------- ------- ------ -------- -------- ---------- Total Liabilities..... 4,086 54 -- 190 3 25 200 1,879 119 199,757 206,313 -------- ------ -------- -------- ------- ------- ------- ------ -------- -------- ---------- Net Assets Available for Plan Benefits.......... $946,336 $6,978 $103,144 $331,389 $15,085 $55,376 $17,733 $ 95 $391,975 $ 43,020 $1,911,131 ======== ====== ======== ======== ======= ======= ======= ====== ======== ======== ==========
The accompanying notes are an integral part of these financial statements. 4 BELLSOUTH SAVINGS AND SECURITY PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION DECEMBER 31, 1995 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED FUND LOAN --------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND ALLOCATED UNALLOCATED TOTAL ASSETS ---------- ------ ------- -------- -------- ----------- ------ --------- ----------- ---------- Allocated share of trust net assets...... $1,042,539 $6,674 $54,968 $332,900 $7,846 $12,079 $9,619 $ -- $ -- $1,466,625 Investment in BellSouth Savings and Security Employee Stock Ownership Plan Trust: Shares of BellSouth common stock allocated to participants......... -- -- -- -- -- -- -- 328,519 -- 328,519 Shares of BellSouth common stock held for future allocation ... -- -- -- -- -- -- -- -- 293,103 293,103 Temporary cash investments.......... -- -- -- -- -- -- -- 38,046 5,201 43,247 ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- Total Investments... 1,042,539 6,674 54,968 332,900 7,846 12,079 9,619 366,565 298,304 2,131,494 Contributions receivable............ 6,621 121 1,521 4,408 279 -- 155 3,427 -- 16,532 Fund, BellSouth Management Savings and Employee Stock Ownership Plan, BellSouth Enterprises Retirement Savings Plan and other transfers receivable-- net................... 7,249 -- 340 -- 249 469 237 -- -- 8,544 ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- Total Assets........ 1,056,409 6,795 56,829 337,308 8,374 12,548 10,011 369,992 298,304 2,156,570 ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- LIABILITIES Distributions payable. 5,120 56 187 2,672 14 25 43 1,186 -- 9,303 Fund, BellSouth Management Savings and Employee Stock Ownership Plan, BellSouth Enterprises Retirement Savings Plan and other transfers payable-- net................... -- 9 -- 5,347 -- -- -- 85 -- 5,441 Notes payable......... -- -- -- -- -- -- -- -- 219,467 219,467 ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- Total Liabilities... 5,120 65 187 8,019 14 25 43 1,271 219,467 234,211 ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- Net Assets Available for Plan Benefits..... $1,051,289 $6,730 $56,642 $329,289 $8,360 $12,523 $9,968 $368,721 $ 78,837 $1,922,359 ========== ====== ======= ======== ====== ======= ====== ======== ======== ==========
The accompanying notes are an integral part of these financial statements. 5 BELLSOUTH SAVINGS AND SECURITY PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED MUTUAL FUND LOAN ---------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND OTHER ALLOCATED UNALLOCATED TOTAL ---------- ------ -------- -------- -------- ----------- ------- ----- --------- ----------- ---------- Net Assets Available for Plan Benefits, December 31, 1995. $1,051,289 $6,730 $ 56,642 $329,289 $ 8,360 $12,523 $ 9,968 $-- $368,721 $78,837 $1,922,359 ---------- ------ -------- -------- ------- ------- ------- ---- -------- ------- ---------- Employee Contributions..... 43,544 1,206 10,683 28,475 2,262 1,162 -- -- -- -- 87,332 Transfer of participants' balances--net..... (54,318) (773) 24,124 (18,290) 3,560 37,448 7,423 -- -- -- (826) Employing company contributions..... -- -- -- -- -- -- -- -- 17,906 -- 17,906 Supplemental contributions..... -- -- -- -- -- -- -- -- -- 25,322 25,322 Allocation of shares to participants...... -- -- -- -- -- -- -- -- 33,075 (33,075) -- Transfer of loan repayment......... -- -- -- -- -- -- -- -- (4,693) 4,693 -- ---------- ------ -------- -------- ------- ------- ------- ---- -------- ------- ---------- Total Contributions, Allocations and Transfers......... (10,774) 433 34,807 10,185 5,822 38,610 7,423 -- 46,288 (3,060) 129,734 Allocated share of Trust investment activities........ (37,102) 254 15,610 20,060 1,467 4,693 612 95 (11,084) (13,164) (18,559) ---------- ------ -------- -------- ------- ------- ------- ---- -------- ------- ---------- Total Additions... (47,876) 687 50,417 30,245 7,289 43,303 8,035 95 35,204 (16,224) 111,175 ---------- ------ -------- -------- ------- ------- ------- ---- -------- ------- ---------- Less: Distributions to Participants...... 57,077 439 3,915 28,145 564 450 270 -- 11,950 -- 102,810 Interest on Notes Payable... -- -- -- -- -- -- -- -- -- 19,593 19,593 ---------- ------ -------- -------- ------- ------- ------- ---- -------- ------- ---------- Net Assets Available for Plan Benefits, December 31, 1996. $ 946,336 $6,978 $103,144 $331,389 $15,085 $55,376 $17,733 $ 95 $391,975 $43,020 $1,911,131 ========== ====== ======== ======== ======= ======= ======= ==== ======== ======= ==========
The accompanying notes are an integral part of these financial statements. 6 BELLSOUTH SAVINGS AND SECURITY PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLEFOR PLAN BENEFITS WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1995 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED FUND LOAN ---------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND ALLOCATED UNALLOCATED TOTAL ---------- ------ ------- -------- -------- ----------- ------ --------- ----------- ---------- Net Assets Available for Plan Benefits, December 31, 1994..... $ 646,155 $5,113 $32,245 $313,647 $3,975 $ 5,218 $5,935 $199,491 $(28,813) $1,182,966 ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- Employee Contributions......... 37,421 1,235 7,008 31,484 1,243 -- 155 -- -- 78,546 Transfer of participants' balances--net......... (3,835) (55) 6,132 (13,087) 1,900 5,884 3,555 -- -- 494 Employing company contributions......... -- -- -- -- -- -- -- 23,397 -- 23,397 Supplemental contributions......... -- -- -- -- -- -- -- -- 24,861 24,861 Allocation of shares to participants....... -- -- -- -- -- -- -- 26,904 (26,904) -- Transfer for loan repayment............. -- -- -- -- -- -- -- (5,381) 5,381 -- ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- Total Contributions, Allocations and Transfers............. 33,586 1,180 13,140 18,397 3,143 5,884 3,710 44,920 3,338 127,298 Allocated share of Trust investment activities............ 414,437 799 13,156 21,737 1,354 1,444 508 132,087 125,572 711,094 ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- Total Additions....... 448,023 1,979 26,296 40,134 4,497 7,328 4,218 177,007 128,910 838,392 ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- Less: Distributions to Participants.......... 42,889 362 1,899 24,492 112 23 185 7,777 -- 77,739 Interest on Notes Payable............. -- -- -- -- -- -- -- -- 21,260 21,260 ---------- ------ ------- -------- ------ ------- ------ -------- -------- ---------- Net Assets Available for Plan Benefits, December 31, 1995..... $1,051,289 $6,730 $56,642 $329,289 $8,360 $12,523 $9,968 $368,721 $ 78,837 $1,922,359 ========== ====== ======= ======== ====== ======= ====== ======== ======== ==========
The accompanying notes are an integral part of these financial statements. 7 BELLSOUTH SAVINGS AND SECURITY PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLEFOR PLAN BENEFITS WITH FUND INFORMATION YEAR ENDED DECEMBER 31, 1994 (IN THOUSANDS)
EMPLOYEE STOCK BELLSOUTH INDEXED INTEREST MUTUAL OWNERSHIP PLAN STOCK BOND STOCK INCOME BALANCED FUND LOAN ---------------------- FUND FUND FUND FUND FUND INVESTMENTS FUND ALLOCATED UNALLOCATED TOTAL --------- ------ ------- -------- -------- ----------- ------ --------- ----------- ---------- Net Assets Available for Plan Benefits, December 31, 1993..... $643,944 $5,097 $29,022 $290,728 $ -- $ -- $4,248 $162,222 $ (5,117) $1,130,144 -------- ------ ------- -------- ------ ------ ------ -------- -------- ---------- Employee Contributions......... 36,310 1,480 6,692 32,308 1,201 -- -- -- -- 77,991 Transfer of participants' balances--net......... 7,566 (1,155) (2,759) (11,440) 2,884 5,223 1,515 -- -- 1,834 Employing company contributions......... -- -- -- -- -- -- -- 25,178 -- 25,178 Supplemental contributions......... -- -- -- -- -- -- -- -- 23,364 23,364 Allocation of shares to participants....... -- -- -- -- -- -- -- 24,402 (24,402) -- Transfer for loan repayment............. -- -- -- -- -- -- -- (3,041) 3,041 -- -------- ------ ------- -------- ------ ------ ------ -------- -------- ---------- Total Contributions, Allocations and Transfers............. 43,876 325 3,933 20,868 4,085 5,223 1,515 46,539 2,003 128,367 Allocated share of Trust investment activities............ (13,460) 3 452 19,869 (35) -- 172 (6,708) (2,938) (2,645) -------- ------ ------- -------- ------ ------ ------ -------- -------- ---------- Total Additions....... 30,416 328 4,385 40,737 4,050 5,223 1,687 39,831 (935) 125,722 -------- ------ ------- -------- ------ ------ ------ -------- -------- ---------- Less: Distributions to Participants.......... 28,205 312 1,162 17,818 75 5 -- 2,562 -- 50,139 Interest on Notes Payable............. -- -- -- -- -- -- -- -- 22,761 22,761 -------- ------ ------- -------- ------ ------ ------ -------- -------- ---------- Net Assets Available for Plan Benefits, December 31, 1994..... $646,155 $5,113 $32,245 $313,647 $3,975 $5,218 $5,935 $199,491 $(28,813) $1,182,966 ======== ====== ======= ======== ====== ====== ====== ======== ======== ==========
The accompanying notes are an integral part of these financial statements. 8 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 1. PLAN DESCRIPTION (WHOLE DOLLARS) GENERAL The following description of the BellSouth Savings and Security Plan (the Plan) provides only general information. For additional information, participants should refer to the Plan Prospectus/Summary Plan Description, as supplemented (SPD). A copy of the SPD can be obtained by calling the BellSouth Participant Service Center at 1-800-995-1000 or 1-615-333-9000 via company telephone. In addition, copies of the Plan agreement and other related documents which include details of the Plan can be obtained by writing to: Secretary, BellSouth Savings Plan Committee, Room 13C09, 1155 Peachtree Street, N.E., Atlanta, Georgia 30309-3610. The Plan was established by BellSouth Corporation (BellSouth) to provide a convenient way for non-salaried employees to save for their retirement on a long-term basis and to acquire an ownership interest in BellSouth. The Plan consists of two parts: one is a profit sharing plan which includes a qualified cash or deferred arrangement and which is intended to qualify as such under sections 401(a), 401(k) and 401(m) and related sections of the Internal Revenue Code of 1986, as amended (the Code); the second part is an employee stock ownership plan (ESOP) which is designed as a stock bonus plan to invest primarily in shares of BellSouth common stock and which is intended to qualify under Sections 401(a), 401(m) and 4975(e)(7) and related sections of the Code. The Plan covers all non-management employees who are active, regular full-time or part-time employees of a BellSouth company participating in the Plan. The Plan is subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA). PLAN AMENDMENT AND RESTATEMENT Effective July 1, 1996, the Plan document was amended and restated. Significant changes included a change in investment valuation methods (see below) and changes to various service functions provided by Bankers Trust Company, the Plan's service provider. MASTER TRUST For investment purposes, the assets of the Plan are held in the BellSouth Master Savings Trust (the Master Savings Trust). In addition, the Master Savings Trust also holds all assets of the BellSouth Retirement Savings Plan (formerly the BellSouth Management Savings and Employee Stock Ownership Plan and the BellSouth Enterprises Retirement Savings Plan). At December 31, 1996, the Plan's assets were comprised of the following investment vehicles: BellSouth Stock Fund, Bond Fund, Indexed Stock Fund, Interest Income Fund, Balanced Fund and Mutual Fund Investments which include the Berger 100 Fund, DFA International Value II Fund, DFA U.S. Large Cap Value II Fund, DFA U.S. Small Cap Value II Fund, American Century/Twentieth Century Growth Investors Fund, and Fidelity Growth and Income Portfolio. At December 31, 1996 and 1995, the Plan's assets are significantly concentrated in shares of BellSouth common stock which is subject to industry and economic fluctuations. Effective July 8, 1996, all investments are valued on a daily basis. Prior to this date, all Plan investment funds other than the mutual fund investments were valued on a monthly basis. Since they were added as investment options, the mutual fund investments have been valued on a daily basis. Prior to July 8, 1996, the assets of the Berger 100 Fund, American Century/Twentieth Century Growth Investors Fund, and the three DFA Funds were contained within a Mutual Fund Window account. In conjunction with the conversion of investment valuation to a daily basis, these mutual funds were established as separate investment funds. For further discussion, see Note 3. Also, on July 8, 1996, the Fidelity Growth and Income Portfolio was added as a new investment option. 9 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 1. PLAN DESCRIPTION (CONTINUED)-- VESTING Participant contributions vest immediately. Employing company matching contributions vest upon a participant's completion of three years service. One year of vesting service is earned upon a participant's completion of 1,000 work hours during any year. PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to the lesser of $50,000 or 50 percent of their before-tax account balance as defined by the Plan document and any amounts rolled over to the Plan from another qualified plan. Loan balances are secured by the balance in the participant's account and bear interest at various rates which ranged from 7.0% to 12.05% at December 31, 1996. Principal and interest is paid ratably through periodic payroll deductions. SERVICE PROVIDER Bankers Trust Company is the Trustee for the Master Savings Trust. Bankers Trust Company also serves as the recordkeeper and service center provider for the Plan. 2. ACCOUNTING POLICIES The financial statements of the Plan have been prepared in accordance with generally accepted accounting principles under the accrual method of accounting. Such financial statements include estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the amounts of revenues and expenses. Actual results could differ from those estimates. Certain amounts in prior period financial statements have been reclassified to conform to the current year's presentation. With respect to the statements of changes in net assets available for plan benefits for the years presented, allocated share of Trust investment activities includes the sum of realized gains, net of realized losses, the net change in unrealized appreciation/(depreciation) on the fair value of the investments, interest income, dividends, and investment manager fees paid by the Master Savings Trust. The values of investments in the Master Savings Trust are determined as follows: . Shares of BellSouth common stock and other securities listed on a national stock exchange are valued on the basis of the closing price per share on December 31, 1996 and December 31, 1995, as reported on the New York Stock Exchange composite tape or, if no sales were made on that date, at the closing price on the next preceding day on which sales were made; . Over-the-counter securities and government obligations are valued based on the bid prices on December 31, 1996 and 1995 from published sources where available and, if not available, from other sources considered reliable; and . Contracts with insurance companies are valued at principal plus reinvested interest. Purchases and sales of securities are reflected as of the trade date. Realized gains and losses on sales of investments are determined on the basis of average cost. Dividend income is recognized on the ex-dividend date. Interest earned on investments is recognized on the accrual basis. 10 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 3. MUTUAL FUND INVESTMENTS MUTUAL FUND WINDOW During 1994, the Berger 100 fund, the American Century/Twentieth Century Growth Investors Fund, and the three DFA mutual funds were established as investment options. Amounts could only be directed to these mutual fund investments through transfers from the other core funds. Liquidation of these mutual funds as a result of changing investment elections, transfers or participant withdrawals could occur on any day. However, the five core funds in the Plan (BellSouth Stock Fund, Bond Fund, Indexed Stock Fund, Interest Income Fund, and Balanced Fund), were still valued on a monthly basis. As a result a "Mutual Fund Window" or MFW was established. The MFW consisted of the five mutual funds and a temporary holding account into which any funds, generated as the result of mutual fund liquidations during a month, would be placed and held until the end of the month. At the end of the month, transfers out of the MFW would be effected with the five core funds, valued and recorded according to the month-end unit value of the core fund(s). As discussed in Note 1, on July 8, 1996 the Plan converted to a daily valuation basis for all of its investment options. This allowed transactions between the mutual funds and the five core funds to be effected and recorded on the same day at any time during the month. As a result, subsequent to that date, the MFW was eliminated and separate investment accounts for each mutual fund were maintained. With the elimination of the MFW, participants were allowed to make contributions directly to the mutual fund investments. Assets held in the MFW and subsequently in these individual fund accounts are collectively included in "Mutual Fund Investments" in the accompanying financial statements of the Plan. Also, on July 8, 1996, the Fidelity Growth and Income Portfolio was added as a new investment option. Net assets available for plan benefits by fund for Mutual Fund Investments at December 31, 1996 are as follows:
AMERICAN CENTURY/ TWENTIETH CENTURY FIDELITY DFA DFA DFA GROWTH GROWTH & MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP INVESTORS INCOME INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND PORTFOLIO OTHER TOTAL ---------- ------------- -------------- -------------- --------- --------- ----- ----------- ASSETS Allocated share of trust net assets...... $13,498 $3,122 $5,916 $7,120 $5,761 $18,808 $38 $54,263 Contributions receivable............ 30 8 10 21 10 75 -- 154 Fund, BellSouth Retirement Savings Plan and other transfers receivable-- net................... 104 100 38 220 9 497 16 984 ------- ------ ------ ------ ------ ------- --- ------- Total Assets......... 13,632 3,230 5,964 7,361 5,780 19,380 54 55,401 ------- ------ ------ ------ ------ ------- --- ------- LIABILITIES Distributions payable.. -- -- -- -- -- 3 22 25 Fund, BellSouth Retirement Savings Plan and other transfers payable-- net................... -- -- -- -- -- -- -- -- ------- ------ ------ ------ ------ ------- --- ------- Total Liabilities.... -- -- -- -- -- 3 22 25 ------- ------ ------ ------ ------ ------- --- ------- Net Assets Available for Plan Benefits..... $13,632 $3,230 $5,964 $7,361 $5,780 $19,377 $32 $55,376 ======= ====== ====== ====== ====== ======= === =======
11 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 3. MUTUAL FUND INVESTMENTS (CONTINUED)-- Net assets available for plan benefits by fund for Mutual Fund Investments at December 31, 1995 are as follows:
AMERICAN CENTURY/ DFA DFA DFA TWENTIETH CENTURY MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL ---------- ------------- -------------- -------------- ----------------- ----------- ASSETS Allocated share of trust net assets............. $6,013 $857 $1,462 $1,235 $2,512 $12,079 Contributions receivable............. -- -- -- -- -- -- Fund, BellSouth Management Savings and Employee Stock Ownership Plan, BellSouth Enterprises Retirement Savings Plan and other transfers receivable--net........ 8 115 79 86 181 469 ------ ---- ------ ------ ------ ------- Total Assets.......... 6,021 972 1,541 1,321 2,693 12,548 ------ ---- ------ ------ ------ ------- LIABILITIES Distributions payable... 18 4 -- -- 3 25 Fund, BellSouth Management Savings and Employee Stock Ownership Plan, BellSouth Enterprises Retirement Savings Plan and other transfers payable--net........... -- -- -- -- -- -- ------ ---- ------ ------ ------ ------- Total Liabilities..... 18 4 -- -- 3 25 ------ ---- ------ ------ ------ ------- Net Assets Available for Plan Benefits.......... $6,003 $968 $1,541 $1,321 $2,690 $12,523 ====== ==== ====== ====== ====== =======
12 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 3. MUTUAL FUND INVESTMENTS (CONTINUED)-- Changes in net assets available for plan benefits by fund for Mutual Fund Investments for the year ended December 31, 1996 are as follows:
AMERICAN CENTURY/ FIDELITY DFA DFA DFA TWENTIETH CENTURY GROWTH & MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS INCOME INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND PORTFOLIO OTHER TOTAL ---------- ------------- -------------- -------------- ----------------- --------- ----- ----------- Net Assets Available for Plan Benefits, December 31, 1995.......... $ 6,003 $ 968 $1,541 $1,321 $2,690 $ -- -- $12,523 ------- ------ ------ ------ ------ ------- --- ------- Employee Contributions..... 267 59 78 139 69 550 -- 1,162 Transfer of participants' balances--net..... 6,014 2,056 3,822 4,918 2,629 17,970 39 37,448 ------- ------ ------ ------ ------ ------- --- ------- Total Contributions, Allocations and Transfers......... 6,281 2,115 3,900 5,057 2,698 18,520 39 38,610 Allocated share of Trust investment activities........ 1,455 154 577 1,043 438 1,008 18 4,693 ------- ------ ------ ------ ------ ------- --- ------- Total Additions.... 7,736 2,269 4,477 6,100 3,136 19,528 57 43,303 ------- ------ ------ ------ ------ ------- --- ------- Less: Distributions to Participants... 107 7 54 60 46 151 25 450 ------- ------ ------ ------ ------ ------- --- ------- Net Assets Available for Plan Benefits, December 31, 1996.......... $13,632 $3,230 $5,964 $7,361 $5,780 $19,377 $32 $55,376 ======= ====== ====== ====== ====== ======= === =======
13 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 3. MUTUAL FUND INVESTMENTS (CONTINUED)-- Changes in net assets available for plan benefits by fund for Mutual Fund Investments for the year ended December 31, 1995 are as follows:
AMERICAN CENTURY/ DFA DFA DFA TWENTIETH CENTURY MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL ---------- ------------- -------------- -------------- ----------------- ----------- Net Assets Available for Plan Benefits, December 31, 1994............... $3,009 $582 $ 224 $ 458 $ 945 $ 5,218 ------ ---- ------ ------ ------ ------- Employee Contributions.. -- -- -- -- -- -- Transfer of participants' balances--net.......... 2,185 308 1,156 697 1,538 5,884 ------ ---- ------ ------ ------ ------- Total Contributions, Allocations and Transfers.............. 2,185 308 1,156 697 1,538 5,884 Allocated share of Trust investment activities.. 826 81 161 166 210 1,444 ------ ---- ------ ------ ------ ------- Total Additions......... 3,011 389 1,317 863 1,748 7,328 ------ ---- ------ ------ ------ ------- Less: Distributions to Participants........... 17 3 -- -- 3 23 ------ ---- ------ ------ ------ ------- Net Assets Available for Plan Benefits, December 31, 1995............... $6,003 $968 $1,541 $1,321 $2,690 $12,523 ====== ==== ====== ====== ====== =======
Changes in net assets available for plan benefits by fund for Mutual Fund Investments for the year ended December 31, 1994 are as follows:
AMERICAN CENTURY/ DFA DFA DFA TWENTIETH CENTURY MUTUAL FUND BERGER 100 INTERNATIONAL U.S. LARGE CAP U.S. SMALL CAP GROWTH INVESTORS INVESTMENTS FUND VALUE II FUND VALUE II FUND VALUE II FUND FUND TOTAL ---------- ------------- -------------- -------------- ----------------- ----------- Net Assets Available for Plan Benefits, December 31, 1993............... $ -- $-- $-- $-- $-- $ -- ------ ---- ---- ---- ---- ------ Employee Contributions.. -- -- -- -- -- -- Transfer of participants' balances--net.......... 3,010 582 224 462 945 5,223 ------ ---- ---- ---- ---- ------ Total Contributions, Allocations and Transfers.............. 3,010 582 224 462 945 5,223 Allocated share of Trust investment activities.. -- -- -- -- -- -- ------ ---- ---- ---- ---- ------ Total Additions......... 3,010 582 224 462 945 5,223 ------ ---- ---- ---- ---- ------ Less: Distributions to Participants........... 1 -- -- 4 -- 5 ------ ---- ---- ---- ---- ------ Net Assets Available for Plan Benefits, December 31, 1994............... $3,009 $582 $224 $458 $945 $5,218 ====== ==== ==== ==== ==== ======
14 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 4. UNITS OF THE PLAN (WHOLE DOLLARS) Participants in the Plan can direct their contributions among 11 investment options as described in Note 1. The interest of a participant in each type of investment of the Plan is represented by units as described in Section 8 of the Plan document. The units of the BellSouth Stock Fund, Bond Fund, Indexed Stock Fund and Interest Income Fund were reunitized or restated on January 1, 1994. Each fund was given a "new start" beginning with a unit value of $1.0000. At the same date the number of units credited to the participants' accounts was increased, so that the number of units owned equaled the dollar amount invested. In addition, the Balanced Fund was added as an investment option on January 1, 1994 and given a unit value of $1.0000. Prior to July 8, 1996, participant accounts and the related unit values for investments other than mutual funds were valued on a monthly basis. As previously discussed in Notes 1 and 3, the plan converted to a daily unit valuation method for all participant accounts and investments on July 8, 1996. The number and value of units for investments other than the Mutual Fund Investments as of December 31, 1996 and December 31, 1995 were as follows:
DECEMBER 31, 1996 DECEMBER 31, 1995 ------------------------------ ------------------------------ TYPE OF INVESTMENT NUMBER OF UNITS VALUE PER UNIT NUMBER OF UNITS VALUE PER UNIT - ------------------ --------------- -------------- --------------- -------------- BellSouth Stock Fund.... 601,614,144 $1.5659 646,120,050 $1.6271 Bond Fund............... 5,801,441 1.1971 5,846,822 1.1512 Indexed Stock Fund...... 60,033,796 1.7112 40,738,848 1.3904 Interest Income Fund.... 271,398,023 1.2177 288,269,045 1.1423 Balanced Fund........... 10,572,766 1.4196 6,661,087 1.2551
The number and value of units by month for each investment other than the Mutual Fund Investments during 1996 were as follows:
BELLSOUTH STOCK FUND BOND FUND -------------------- ------------------ NUMBER OF VALUE NUMBER OF VALUE 1996 UNITS PER UNIT UNITS PER UNIT - ---- ----------- -------- --------- -------- January................................. 644,828,044 1.6174 6,034,304 1.1573 February................................ 645,429,859 1.5060 6,120,183 1.1439 March................................... 645,754,539 1.3989 6,204,398 1.1379 April................................... 642,722,356 1.5232 6,154,031 1.1339 May..................................... 640,904,021 1.5472 6,216,925 1.1332 June.................................... 637,846,178 1.6146 6,022,158 1.1451 July.................................... 634,139,303 1.5779 5,963,964 1.1493 August.................................. 633,546,921 1.3972 5,910,632 1.1477 September............................... 633,862,773 1.4257 5,874,914 1.1655 October................................. 623,886,659 1.5821 5,737,559 1.1887 November................................ 612,526,643 1.5679 5,803,695 1.2067 December................................ 601,614,144 1.5659 5,801,441 1.1971
15 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 4. UNITS OF THE PLAN (WHOLE DOLLARS) (CONTINUED)--
INDEXED STOCK FUND INTEREST INCOME FUND ------------------- -------------------- NUMBER OF VALUE NUMBER OF VALUE 1996 UNITS PER UNIT UNITS PER UNIT - ---- ---------- -------- ----------- -------- January................................ 42,450,664 1.4386 282,116,228 1.1485 February............................... 44,049,807 1.4515 276,952,846 1.1544 March.................................. 46,015,904 1.4657 272,301,842 1.1608 April.................................. 47,725,581 1.4875 271,455,669 1.1670 May.................................... 48,706,022 1.5247 269,997,938 1.1733 June................................... 49,403,169 1.5308 268,890,143 1.1795 July................................... 49,116,915 1.4644 267,796,382 1.1857 August................................. 51,089,206 1.4945 267,819,724 1.1919 September.............................. 52,197,287 1.5790 265,462,423 1.1985 October................................ 53,101,942 1.6231 266,309,608 1.2049 November............................... 57,692,942 1.7461 267,648,814 1.2109 December............................... 60,033,796 1.7112 271,398,023 1.2177 BALANCED FUND ------------------- NUMBER OF VALUE 1996 UNITS PER UNIT - ---- ---------- -------- January................................ 7,403,935 1.2850 February............................... 7,703,945 1.2756 March.................................. 8,437,117 1.2764 April.................................. 8,909,598 1.2791 May.................................... 9,015,683 1.2917 June................................... 9,017,900 1.3049 July................................... 9,050,471 1.2784 August................................. 9,242,232 1.2897 September.............................. 9,414,832 1.3382 October................................ 9,685,966 1.3729 November............................... 10,128,566 1.4392 December............................... 10,572,766 1.4196
The values of mutual fund investments, all of which are traded on a national securities exchange, are based on published daily closing net asset values as reported by the respective securities exchange. 16 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 4. UNITS OF THE PLAN (CONTINUED)-- At December 31, 1996, the number of participants currently contributing to the Plan by investment direction as described in Section 7 of the Plan document was as follows:
NO. FUND DESCRIPTION PARTICIPANTS ---------------- ------------ Entirely in BellSouth Stock Fund............................... 13,810 Entirely in Indexed Stock Fund................................. 1,940 Entirely in Interest Income Fund............................... 10,787 Entirely in Balanced Fund...................................... 243 Entirely in Fidelity Growth and Income Fund.................... 176 Equally in BellSouth Stock Fund and Bond Fund.................. 187 Equally in BellSouth Stock Fund and Indexed Stock Fund......... 1,917 Equally in BellSouth Stock Fund and Interest Income Fund....... 6,095 Equally in BellSouth Stock Fund and Balanced Fund.............. 190 Equally in Bond Fund and Indexed Stock Fund.................... 118 Equally in Indexed Stock Fund and Interest Income Fund......... 468 Equally in Indexed Stock Fund and Balanced Fund................ 314 Equally in Indexed Stock Fund and Fidelity Growth and Income Fund.......................................................... 232 Equally in BellSouth Stock Fund, Bond Fund and Indexed Stock Fund.......................................................... 145 Equally in BellSouth Stock Fund, Indexed Stock Fund and Interest Income Fund.......................................... 342 Equally in BellSouth Stock Fund, Indexed Stock Fund and Balanced Fund................................................. 291 Equally in BellSouth Stock Fund, Bond Fund, Indexed Stock Fund and Interest Income Fund.......................................... 216 Various Fund combinations*..................................... 2,232 ------ Total Participants........................................... 39,703 ======
- -------- * Includes all other investment directions having less than 100 participants. Since all employing company contributions are made to the ESOP, all employees currently contributing to the Plan are participants in the ESOP. 5. CONTRIBUTIONS Employee contributions to the Plan are recorded based upon authorized basic and supplemental contributions. The maximum basic contribution rate was $55 and $50 for 1996 and 1995, respectively. Participants may contribute up to 15% (12% prior to January 1, 1996) of their eligible compensation to the Plan on a before-tax basis. Total before-tax and after-tax contributions may not exceed 15% of compensation. As discussed in Section 3 of the Plan document, participants may also rollover amounts into the Plan from other qualified plans. The employing company makes contributions to the ESOP in respect of each participant's authorized basic contribution. Employing company matching contributions will vest upon a participant's completion of three years service. One year of vesting service is earned upon a participant's completion of 1,000 work hours during any year. The rate of the employing company matching contribution remains in effect for a twelve month period from April 1 through March 31. Employing company matching contribution rates for the three years ended December 31, 1996 were as follows:
1996 1995 1994 ---- ---- ---- January-March............................................. 69% 76%* 59% April-December............................................ 76% 69% 76%*
- -------- * 71% for participating employees of BellSouth Advertising and Publishing Corporation. 17 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 6. PLAN EXPENSES Each participant of the Plan is charged a flat annual fee for Plan administrative expenses, including record keeping, trustee, and other expenses considered reasonable by the Plan administrator. The fee is divided on a pro rata basis among each investment option of the participant. The per- participant fee for 1996, 1995 and 1994 was $26.40, $22.00 and $22.00, respectively. Additional fees are also charged to individual participants for various services provided by the Plan's recordkeeper and the BellSouth Participant Service Center. Investment manager fees are paid by the Master Savings Trust. Investment manager fees included in allocated share of Trust investment activities in the statements of changes in net assets available for plan benefits for the years presented, were as follows:
1996 1995 1994 ---- ---- ---- Bond Fund........................................................ $ 21 $ 14 $ 13 Indexed Stock Fund............................................... 16 11 9 Interest Income Fund............................................. 146 142 145 Balanced Fund.................................................... 12 6 3 ---- ---- ---- $195 $173 $170 ==== ==== ====
For the Mutual Fund Investments, investment manager fees are not paid directly from the Master Savings Trust. However, these investments are subject to "expense ratios" which reduce the overall return of the respective mutual fund. Expense ratios, expressed in percentage terms, which were assessed against mutual fund investments by their respective managers during 1996 were as follows:
FOR THE YEAR ENDED DECEMBER 31, 1996 ----------------- Berger 100 Fund............................................... 1.42% DFA International Value II Fund............................... 0.86% DFA U.S. Large Cap Value II Fund.............................. 0.82% DFA U.S. Small Cap Value II Fund.............................. 0.85% American Century/Twentieth Century Growth Investors Fund...... 1.00% Fidelity Growth & Income Portfolio............................ 0.74%
For the three years ended December 31, 1996, no fees were paid to investment managers for management of the BellSouth Stock Fund. 7. TAX STATUS The Internal Revenue Service has determined and informed the Company by letter dated November 22, 1995, that the Plan and related trust meet the requirements of Section 401(a) of the Code, and are exempt from federal income taxes under Section 501(a) of the Code. As discussed in Note 1, the Plan document was amended and restated in July of 1996. BellSouth is currently in the process of requesting a new determination letter and believes that the Plan, in its current form, will maintain its tax exempt status. Therefore, no provision for income taxes has been included in the Plan's financial statements. 18 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 7. TAX STATUS (CONTINUED) For information on the federal income tax effects on the employee with respect to the Plan, participants should refer to the SPD. 8. TERMINATION PRIORITIES BellSouth intends to continue the Plan indefinitely but reserves the right to terminate or amend it. In the event the Plan is terminated, subject to conditions set forth in ERISA, participants will receive written notification of plan termination at least 30 days in advance. In the event of Plan termination, participants will become 100 percent vested in their accounts. The participant may then elect to leave all units in his/her account until they leave the Company or take a lump sum distribution of the value of his/her units. 9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST The assets of the Plan are held in the Master Savings Trust and are commingled with the assets of the BellSouth Retirement Savings Plan. Prior to April 1, 1996, the Plan's assets were also commingled with the assets of the BellSouth Enterprises Retirement Savings Plan, which was merged with and into the BellSouth Retirement Savings Plan on April 1, 1996. The assets of the BellSouth Employee Stock Ownership Plan (PAYSOP) are held in a sub-trust of the Master Savings Trust. This sub-trust is not included in the following Master Savings Trust information. The Plan's allocated share of the total net assets of all funds in the Master Savings Trust at December 31, 1996 and 1995 was 32.2428% and 33.0476%, respectively. The Plan's allocated share of the net assets of each fund in the Master Savings Trust at December 31, 1996 and 1995 were as follows:
1996 1995 --------- --------- BellSouth Stock Fund.................................... 46.91167% 46.29514% Bond Fund............................................... 5.50809% 4.62267% Indexed Stock Fund...................................... 11.87296% 8.68148% Interest Income Fund.................................... 28.94570% 27.82033% Balanced Fund........................................... 15.46374% 12.20172% Berger 100 Fund......................................... 27.85832% 17.12916% DFA International Value II Fund......................... 10.13969% 5.26158% DFA U.S. Large Cap Value II Fund........................ 22.27917% 18.72441% DFA U.S. Small Cap Value II Fund........................ 15.50804% 8.04448% American Century/Twentieth Century Growth Investors Fund................................................... 27.84984% 18.40317% Fidelity Growth & Income Portfolio...................... 25.27740% -- Loan Fund............................................... 23.52051% 16.21847% Other................................................... 23.33251% --
19 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)-- The financial position of the Master Savings Trust at December 31, 1996 and 1995 was as follows:
1996 1995 ---- ---- Assets: Investment at value: BellSouth Stock Fund: Shares of BellSouth common stock...................... $2,009,039 $2,216,148 Temporary cash investments............................ 490 33,313 Bond Fund: Securities............................................ 121,647 139,775 Temporary cash investments............................ 4,223 2,302 Indexed Stock Fund: Equity Index Fund..................................... 862,465 630,335 Temporary cash investments............................ 86 3,035 Interest Income Fund: Contracts............................................. 1,088,329 1,182,614 Temporary cash investments............................ 46,790 14,514 Balanced Fund: Securities............................................ 86,837 36,043 Temporary cash investments............................ 10,116 28,185 Berger 100 Fund*: Securities............................................ 55,121 34,304 Temporary cash investments............................ 8 -- DFA International Value II Fund*: Securities............................................ 31,884 16,020 DFA U.S. Large Cap Value II Fund*: Securities............................................ 26,424 7,801 DFA U.S. Small Cap Value II Fund*: Securities............................................ 48,291 15,151 Temporary cash investments............................ 2 -- American Century/Twentieth Century Growth Investors Fund*: Securities............................................ 20,883 12,920 Fidelity Growth & Income Portfolio Securities............................................ 75,746 -- Temporary cash investments............................ 2 -- Mutual Fund Window: Temporary cash investments............................ 856 1,800 Loan Fund: Loans to participants................................. 73,981 59,432 Temporary cash investments............................ 141 39 Contribution Account+ Temporary cash investments............................ 123 -- Distribution Account+ Temporary cash investments............................ 6,831 -- Expense Account+ Temporary cash investments............................ 1,505 -- Distributable shares................................... 397 3,004 Dividends and interest income receivable............... 2,346 2,516 Receivable for investments sold........................ 14,806 4,752 Variation margin receivable............................ 18 33 ---------- ---------- $4,589,387 $4,444,036 Liabilities: Payable for investments purchased...................... 7,182 4,741 Variation margin payable............................... 95 -- Administrative fees payable............................ 1,040 648 ---------- ---------- Trust net assets (excluding ESOP Trusts)............... 4,581,070 4,438,647
20 BELLSOUTH SAVINGS AND SECURITY PLAN NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT UNIT VALUES AND AS NOTED) 9. INTEREST IN BELLSOUTH MASTER SAVINGS TRUST (CONTINUED)--
1996 1995 ---- ---- Investment in ESOP Trusts: Shares of BellSouth common stock allocated to partici- pants....................... 835,717 773,185 Distributable shares......... 37 845 Shares of BellSouth common stock held for future allo- cation...................... 707,649 871,871 Temporary cash investments... 30,035 65,498 ---------- ---------- Total investments............ 6,154,508 6,150,046 Liabilities: Payable for investments pur- chased...................... -- 19,031 Notes payable................ 594,334 647,311 ---------- ---------- Trust net assets............. $5,560,174 $5,483,704 ========== ========== Investments at cost.......... $4,329,557 $4,091,362 ========== ==========
- -------- *Prior to 1996, this fund was included within the Mutual Fund Window. + These accounts are included as "Other" in the accompanying financial statements. Distributions payable in shares at year end are reclassed from BellSouth common stock and ESOP--BellSouth common stock held for future allocation to the respective "Distributable Shares" line. See Item 27a, BellSouth Master Savings Trust Schedule of Assets Held for Investment Purposes. Assets in the BellSouth Stock Fund, Bond Fund, Indexed Stock Fund, Mutual Fund Investments and some of the assets in the Balanced Fund are invested in securities which fluctuate in market value, and the values of the units fluctuate daily. Assets in the Interest Income Fund are invested in a number of investment contracts with diversified groups of high quality financial institutions. The value of the Interest Income Fund is based upon the principal invested and the interest credited, and the value of the units should increase as of the end of each day. Some of these contracts are unsecured, general obligations of such companies. Their security is subject to the ability of the insurance companies or other financial institutions to repay their debts generally as they come due. Other contracts are backed specifically by high quality, fixed income assets. Therefore, many of the new investment contracts have the underlying assets held in a separate account of an insurance company or in a trust fund. These assets are protected from the general creditors of the contract issuer. The contracts held by the Trust in the Interest Income Fund are considered fully benefit-responsive in accordance with AICPA Statement of Position 94-4. A fully benefit-responsive investment contract provides a liquidity guarantee by a financially responsible third party of principal and previously accrued interest for liquidations, transfers, loans or hardship withdrawals initiated by plan participants exercising their rights to withdraw, borrow or transfer funds under the terms of the ongoing plan. The fair value of these investment contracts as of December 31, 1996 and 1995 was $1,098,227 and $1,202,906, respectively. The crediting interest rate at December 31, 1996 and 1995, was 6.57% and 6.75%, respectively. The average yield for the years ended December 31, 1996 and 1995, was 6.52% and 6.82%, respectively. Interest rates are reset on a semi-annual, quarterly, or monthly basis, whereby, such rates are reset to move the current book value of these investments toward the projected future market value over the life of the contract. In three separate transactions during 1990, the BellSouth Management Savings and Employee Stock Ownership Plan Trust and the BellSouth Savings and Security ESOP Trust (the "ESOP Trusts") issued medium-term notes in the amounts of $550 million and $300 million, respectively, to fund the ESOP. Assets held in each investment fund of the Plan, other than the assets held by the ESOP Trusts described below, are unavailable to service the ESOP debt. Assets held by the ESOP Trusts are generally unavailable to satisfy claims of holders of debt securities issued by the ESOP Trusts to finance the acquisition of shares of BellSouth common stock for the benefit of ESOP participants. The debt securities are guaranteed by and are subject to direct recourse against BellSouth. 21 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (IN THOUSANDS)
DECEMBER 31, 1996 ------------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- ---------- ---------- BELLSOUTH STOCK FUND SHARES OF BELLSOUTH COMMON STOCK*#--99.9%........ 49,616 $1,125,305 $2,009,436 ---------- ---------- TEMPORARY CASH INVESTMENTS--0.1%................. 256 $ 488 $ 490 ---------- ---------- Total BellSouth Stock Fund--100%............... $1,125,793 $2,009,926 ---------- ---------- BOND FUND U.S. GOVERNMENT TREASURY NOTES--56.9% U.S. Treasury Notes, 7.875%, 04/15/98........... $ 2,250 $ 2,326 $ 2,309 U.S. Treasury Notes, 8.250%, 07/15/98........... $ 475 $ 493 $ 492 U.S. Treasury Notes, 6.875%, 07/31/99........... $ 8,350 $ 8,489 $ 8,520 U.S. Treasury Notes, 7.750%, 12/31/99........... $ 950 $ 995 $ 994 U.S. Treasury Notes, 7.125%, 02/29/00........... $ 6,575 $ 7,007 $ 6,769 U.S. Treasury Notes, 6.875%, 03/31/00........... $ 7,850 $ 8,300 $ 8,027 U.S. Treasury Notes, 6.250%, 05/31/00........... $ 7,425 $ 7,684 $ 7,455 U.S. Treasury Notes, 6.125%, 07/31/00........... $ 8,400 $ 8,707 $ 8,400 U.S. Treasury Notes, 6.500%, 08/15/05........... $ 8,150 $ 7,939 $ 8,202 U.S. Treasury Notes, 8.875%, 11/15/98........... $ 2,250 $ 2,414 $ 2,367 U.S. Treasury Notes, 8.500%, 02/15/00........... $ 4,275 $ 4,770 $ 4,566 U.S. Treasury Notes, 8.875%, 05/15/00........... $ 2,550 $ 2,899 $ 2,763 U.S. Treasury Notes, 8.750%, 08/15/00........... $ 4,000 $ 4,558 $ 4,335 U.S. Treasury Notes, 5.750%, 12/31/98........... $ 6,375 $ 6,371 $ 6,360 ---------- ---------- $ 72,952 $ 71,559 ---------- ---------- U.S. GOVERNMENT TREASURY BONDS--18.4% U.S. Treasury Bonds, 11.625%, 11/15/04.......... $ 600 $ 799 $ 792 U.S. Treasury Bonds, 9.375%, 02/15/06.......... $ 11,000 $ 12,334 $ 13,238 U.S. Treasury Bonds, 7.250%, 05/15/16.......... $ 7,800 $ 7,420 $ 8,236 U.S. Treasury Bonds, 7.500%, 11/15/16.......... $ 825 $ 869 $ 893 ---------- ---------- $ 21,422 $ 23,159 ---------- ---------- FEDERAL AGENCY OBLIGATIONS--14.2% Federal Natl. Mtg. Assn., 5.375%, 01/13/98...... $ 1,500 $ 1,500 $ 1,492 Federal Home Ln. Bks., 6.06%, 10/02/97.......... $ 580 $ 581 $ 580 Federal Natl. Mtg. Assn., 5.92%, 04/03/98....... $ 1,400 $ 1,400 $ 1,399 Federal Natl. Mtg. Assn., 5.890%, 11/13/98...... $ 2,500 $ 2,500 $ 2,495 Government Natl. Mtg. Assn., 6.5%, 12/15/23..... $ 2,581 $ 2,418 $ 2,477 Government Natl. Mtg. Assn., 6.5%, 10/15/23..... $ 2,776 $ 2,606 $ 2,664 Government Natl. Mtg. Assn., 6.5%, 11/15/23..... $ 1,435 $ 1,329 $ 1,377 Government Natl. Mtg. Assn., 6.5%, 2/15/24...... $ 2,680 $ 2,500 $ 2,572 Government Natl. Mtg. Assn., 6.5%, 07/15/24..... $ 2,824 $ 2,688 $ 2,775 ---------- ---------- $ 17,522 $ 17,831 ---------- ----------
S-1 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED) (IN THOUSANDS)
DECEMBER 31, 1996 --------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- -------- -------- DOMESTIC CORPORATE OBLIGATIONS--7.2% Cleveland Elec. Illum. Co. 9.450%, 12/01/97..................................... $ 1,000 $ 1,091 $ 1,026 Philadelphia Elec. Co. 5.375%, 08/15/98..................................... $ 1,300 $ 1,287 $ 1,284 Virginia Elec. & Pwr. Co. 6.350%, 06/08/98..................................... $ 1,000 $ 1,004 $ 1,005 AMR Corp Del. 7.470%, 01/28/97..................................... $ 1,000 $ 1,014 $ 1,001 Ryder SYS Inc. 7.50%, 04/29/98...................................... $ 177 $ 180 $ 179 USX-Marathon Group Inc. 8.875%, 09/15/98..................................... $ 1,000 $ 998 $ 1,018 USX Corp 6.375% 07/15/98...................................... $ 350 $ 352 $ 349 General Mtrs. Accept. Corp. 6.900% 02/19/98...................................... $ 3,200 $ 3,233 $ 3,236 -------- -------- $ 9,159 $ 9,098 -------- -------- TEMPORARY CASH INVESTMENTS--3.3%....................... 2,208 $ 4,215 $ 4,223 -------- -------- Total Bond Fund--100.0%.............................. $125,270 $125,870 -------- -------- INDEXED STOCK FUND BANKERS TRUST PYRAMID EQUITY INDEX FUND*--99.9%........ 507 $466,088 $862,465 -------- -------- TEMPORARY CASH INVESTMENTS*--0.1%...................... 45 $ 86 $ 86 -------- -------- Total Indexed Stock Fund--100.0%................... $466,174 $862,551 -------- -------- INTEREST INCOME FUND ANNUITY CONTRACTS WITH INSURANCE COMPANIES--95.9%+ Aetna Life Insurance Company (7.49%-9.81%)........................................ $ 73,201 $ 73,201 $ 73,201 Allstate Life Insurance Company (5.74%).............................................. $ 25,228 $ 25,228 $ 25,228 BT Basic (6.21%).............................................. $104,830 $104,830 $104,830 CDC Investment Management Corp. (4.906%-7.61%)....................................... $ 76,622 $ 76,622 $ 76,622 Commonwealth Life Insurance Co. (9.37%).............................................. $ 1,213 $ 1,213 $ 1,213 Hartford Life (8.70%).............................................. $ 8,078 $ 8,078 $ 8,078 Jackson National Life (5.8%)............................................... $ 15,050 $ 15,050 $ 15,050 John Hancock Mutual Life (7.13%-7.71%)........................................ $146,797 $146,797 $146,797
S-2 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED) (IN THOUSANDS)
DECEMBER 31, 1996 ------------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- ---------- ---------- MBL Life Assurance Corp. (3.5%-5.1%).................................... $ 3,470 $ 3,470 $ 3,470 Massachusetts Mutual (9.70%)........................................ $ 55,350 $ 55,350 $ 55,350 Metropolitan Life Insurance Co. (5.79%-8.75%).................................. $ 97,029 $ 97,029 $ 97,029 New York Life Insurance Co. (5.39%-8.45%).................................. $ 34,158 $ 34,158 $ 34,158 Provident Life & Accident (6.38%)........................................ $110,372 $ 110,372 $ 110,372 Peoples Security Life Insurance Co. (5.03%-8.57%).................................. $100,243 $ 100,243 $ 100,243 Provident National (5.13%-8.53%).................................. $ 3,922 $ 3,922 $ 3,922 Prudential Insurance Company of America (8.10%-9.35%).................................. $ 16,597 $ 16,597 $ 16,597 Rabobank Nederland (6.17%-7.62%).................................. $ 75,258 $ 75,258 $ 75,258 Sun Life Association, Canada (5.78%-5.79%).................................. $ 24,028 $ 24,028 $ 24,028 TransAmerican Life & Annuity (7.54%)........................................ $ 66,424 $ 66,424 $ 66,424 Union Bank of Switzerland (7.28%-8.29%).................................. $ 50,459 $ 50,459 $ 50,459 ---------- ---------- $1,088,329 $1,088,329 ---------- ---------- TEMPORARY CASH INVESTMENTS--4.1%................. $ 46,790 $ 46,790 $ 46,790 ---------- ---------- Total Interest Income Fund--100.0%............. $1,135,119 $1,135,119 ---------- ---------- LOAN FUND LOANS TO PARTICIPANTS (7%-12.5%)--99.8%.......... $ 73,981 $ 73,981 $ 73,981 ---------- ---------- TEMPORARY CASH INVESTMENTS--.2%.................. $ 141 $ 141 $ 141 ---------- ---------- Total Loan Fund--100.0%........................ $ 74,122 $ 74,122 ---------- ---------- BALANCED FUND TEMPORARY CASH INVESTMENTS--10.4%................ 5,292 $ 9,994 $ 10,116 ---------- ---------- U.S. TREASURY BILL, EXP. 01/09/97--1.2%.......... $ 1,190 $ 1,137 $ 1,137 ---------- ---------- BT PYRAMID BROAD MARKET BOND FUND--35.6%......... 18,820 $ 31,335 $ 34,510 ---------- ---------- BT EQUITY INDEX FUND--52.8%...................... 30,115 $ 37,595 $ 51,190 ---------- ---------- Total Balanced Fund--100.0%.................... $ 80,061 $ 96,953 ---------- ----------
S-3 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED) (IN THOUSANDS)
DECEMBER 31, 1996 ------------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- ---------- ---------- BERGER 100 FUND SHARES OF BERGER 100--99.9%...................... 3,091 $ 54,258 $ 55,121 ---------- ---------- TEMPORARY CASH INVESTMENTS--0.1%................. 4 $ 8 $ 8 ---------- ---------- Total Berger 100 Fund--100.0%.................. $ 54,266 $ 55,129 ---------- ---------- DFA U.S. SMALL CAP VALUE II FUND SHARES OF DIMENSIONAL FUND ADVISORS U.S. SMALL CAP VALUE II--99.9%............................. 3,290 $ 41,716 $ 48,291 ---------- ---------- TEMPORARY CASH INVESTMENTS--0.1%................. 1 $ 2 $ 2 ---------- ---------- Total DFA U.S. Small Cap Value II Fund--100.0%. $ 41,718 $ 48,293 ---------- ---------- DFA INTERNATIONAL VALUE II FUND SHARES OF DIMENSIONAL FUND ADVISORS INTERNATIONAL VALUE II--100.0%................................ 2,906 $ 30,386 $ 31,884 ---------- ---------- Total DFA International Value II Fund--100.0%.. $ 30,386 $ 31,884 ---------- ---------- DFA U.S. LARGE CAP VALUE II FUND SHARES OF DIMENSIONAL FUND ADVISORS U.S. LARGE CAP VALUE II--100.0%............................ 1,782 $ 23,336 $ 26,424 ---------- ---------- Total DFA U.S. Large Cap Value II Fund--100.0%. $ 23,336 $ 26,424 ---------- ---------- AMERICAN CENTURY/TWENTIETH CENTURY GROWTH INVESTORS FUND SHARES OF AMERICAN CENTURY/TWENTIETH CENTURY GROWTH INVESTORS FUND--100.0%................... 954 $ 20,554 $ 20,883 ---------- ---------- Total American Century/Twentieth Century Growth Investors Fund--100.0%........................ $ 20,554 $ 20,883 ---------- ---------- FIDELITY GROWTH & INCOME PORTFOLIO SHARES OF FIDELITY GROWTH AND INCOME PORTFOLIO-- 99.9%........................................... 2,465 $ 73,089 $ 75,746 ---------- ---------- TEMPORARY CASH INVESTMENTS--0.1%................. 1 $ 2 $ 2 ---------- ---------- Total Fidelity Growth & Income Portfolio-- 100.0%........................................ $ 73,091 $ 75,748 ---------- ---------- CONTRIBUTION ACCOUNT++ TEMPORARY CASH INVESTMENTS--100.0%............... 64 $ 123 $ 123 ---------- ---------- Total Contribution Acct.--100.0%............... $ 123 $ 123 ---------- ---------- DISTRIBUTION ACCOUNT++ TEMPORARY CASH INVESTMENTS--100.0%............... 3,573 $ 6,824 $ 6,831 ---------- ---------- Total Distribution Acct.--100.0%............... $ 6,824 $ 6,831 ---------- ---------- EXPENSE ACCOUNT FUND++ TEMPORARY CASH INVESTMENTS--100.0%............... 787 $ 1,487 $ 1,505 ---------- ---------- Total Expense Acct.--100.0%.................... $ 1,487 $ 1,505 ---------- ----------
S-4 BELLSOUTH MASTER SAVINGS TRUST EMPLOYER IDENTIFICATION NUMBER: 58-1533433 ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES--(CONTINUED) (IN THOUSANDS)
DECEMBER 31, 1996 ------------------------------- NUMBER OF SHARES OR PRINCIPAL CARRYING NAME OF ISSUER AND TITLE OF ISSUE AMOUNT COST VALUE --------------------------------- --------- ---------- ---------- EMPLOYEE STOCK OWNERSHIP PLAN SHARES OF BELLSOUTH COMMON STOCK*#--97.2%........ 38,109 $1,040,775 $1,543,403 ---------- ---------- Temporary Cash Investments--2.8%................. 7,711 $ 29,639 $ 30,035 ---------- ---------- Total Employee Stock Ownership Fund--100.0%.... $1,070,414 $1,573,438 ---------- ---------- MUTUAL FUND WINDOW TEMPORARY CASH INVESTMENTS--100.0% BT Pyramid Cash Plus Fund....................... 371 $ 693 $ 710 Cash in Transit................................. $ 139 $ 139 $ 139 Schwab Retirement Money Fund.................... $ 7 $ 7 $ 7 ---------- ---------- Total Mutual Fund Window--100.0%............... $ 839 $ 856 ---------- ---------- TOTAL INVESTMENTS.............................. $4,329,577 $6,145,655 ========== ==========
- -------- NOTES Percentages represent the percentage of the investments of each fund of the Master Savings Trust. * This investment is a security issued by a party-in-interest to the Plan. # Investment represents 5% or more of the Net Assets of the Master Savings Trust. + The contracts with these insurance companies (interest rates indicated in parentheses) guarantee the repayment of principal and the crediting of interest resulting in a composite effective annual interest rate of 6.52% for the year 1996. The timing of the remittance of participating employee contributions and other participating employee-directed transactions may cause the actual yield to vary from this rate. The composite interest rate is subject to annual adjustment. ++These accounts are included as "other" in the Plan's Financial Statements. S-5 -----END PRIVACY-ENHANCED MESSAGE-----