BellSouth Fourth Qtr Earnings
Bellsouth Corp
22 January 2002
News Release
FOR MORE INFORMATION FOR IMMEDIATE RELEASE
Jeff Battcher (404-713-0274) January 22, 2002
Mary Beth Conklin (404-249-3167)
BellSouth Reports Fourth Quarter Earnings
• Data revenues grow 25 percent, exceed $1 billion every quarter
• DSL customers reach 620,500, increase 189% for year
• Broadband coverage reaches 70% of households
ATLANTA - Driven by growth in data and broadband services, BellSouth Corporation
(NYSE: BLS) reported normalized earnings per share (EPS) of 63 cents in the
fourth quarter of 2001, before special items and foreign currency effects.
Normalized EPS in the fourth quarter of 2000 was 59 cents, before foreign
currency impacts of minus 2 cents.
On a reported basis, EPS in the fourth quarter of 2001 was 42 cents, reflecting
charges of 12 cents for previously announced restructuring actions and 9 cents
for the further impairment of an equity investment in Qwest Communications
International. In addition, reported results included foreign currency effects
that reduced EPS by 1 cent.
For the year, normalized EPS was $2.34 in 2001, compared to $2.24 in 2000.
Reported EPS was $1.36 in the latest year, compared to $2.23 in 2000. The
foreign exchange impact in 2001 totaled 12 cents per share, compared to 4 cents
per share in the previous year. Including Cingular Wireless, revenues were a
record $29.6 billion in 2001, up 7.8 percent for the year. Normalized net
income was $4.42 billion in 2001, compared to $4.24 billion a year earlier.
Reported net income in 2001 was $2.57 billion, compared to $4.22 billion in the
previous year.
Data and Broadband
Data revenues were $1.2 billion in the three months ended December 31, 2001,
capping a year in which BellSouth's data revenues grew rapidly and exceeded $1
billion each quarter. Data revenues increased at an annual rate of 24.9 percent
in the final quarter of 2001, and represented 15.8 percent of the company's
total revenues. For the full year, data revenues were $4.5 billion.
BellSouth finished 2001 with 620,500 retail and wholesale customers for its DSL
high-speed Internet access service, posting an annual growth rate of 189
percent. For the year, BellSouth had DSL revenues of $254 million, a nearly
four-fold increase compared to $52 million in 2000. The company also announced
January 3 that broadband is now available to almost 70 percent of the households
BellSouth serves.
In addition to broadband's gains in the consumer and small business
marketplaces, BellSouth's data revenue growth continues to be fueled by
high-speed, high-capacity services for medium and large businesses, as well as
wholesale customers. These services include new optical networking products
such as Gigabit Ethernet, and the addition of data storage capabilities, known
as Storage-Enabled Network, to BellSouth's comprehensive e-platform. Both were
introduced during the fourth quarter.
Domestic Wireless / Cingular
BellSouth's domestic wireless revenues in the fourth quarter of 2001 were $1.5
billion, representing the company's 40 percent share of Cingular Wireless, the
second largest wireless company in the U.S. This is a gain of 18.8 percent
compared to the same quarter a year ago, when Cingular was formed. In the
fourth quarter, Cingular added 325,000 customers, and ended the year with 21.6
million, an annual growth rate of 9.7 percent. Cingular continues to focus on
profitable growth, and leads the wireless industry in operating income.
BellSouth's share of Cingular operating income was $221 million in the fourth
quarter of 2001, 46.4 percent higher than the same three months a year ago.
During the fourth quarter, Cingular announced a major technology transformation
investment, beginning with a network overlay that puts its customers on a clear
path to the wireless data and voice services of the future, known as 3G, for
Third Generation. Cingular also forged an innovative infrastructure joint
venture with VoiceStream that will allow Cingular to compete in New York City
much more quickly and cost-effectively than building its own network from
scratch.
Latin America Group
Consolidated Latin America revenues, including advertising and publishing, were
$683 million in the fourth quarter. Earnings before interest, taxes,
depreciation and amortization, or EBITDA, increased 57.7 percent in the fourth
quarter, to $265 million, and was up 35.1 percent for the year. EBITDA margin
improved by 17.4 percentage points, to 38.5 percent, compared to the fourth
quarter of 2000. On a proportionate basis, BellSouth had 7.4 million customers
in Latin America at the end of the year, an annual growth rate of 10.9 percent.
BellSouth and its wireless partners cover a total population of 224 million in
11 Central and South American countries.
Additional Quarterly Highlights
Adjusted to include BellSouth's 40 percent share of Cingular, total revenues of
$7.6 billion increased 4.5 percent compared to the fourth quarter of 2000.
Normalized net income in the fourth quarter of the latest year was $1.19
billion, a gain of 6.6 percent compared to $1.12 billion in the same quarter of
2000. Fourth quarter reported net income was $792 million in 2001 and $1.12
billion in 2000.
2002 Guidance
BellSouth's guidance for certain key financial and business metrics in 2002
remains as follows:
Normalized earnings per share 7% to 9% growth*
Total operating revenue (including Cingular) 5% to 7% growth
Data revenue 22% to 25% growth
Capital expenditures (excluding Cingular) $5.3 to $5.5 billion
DSL high-speed Internet customers 1.1 million at 12/31/02
*Includes effect of required accounting change under FAS 141 and 142. Excludes
foreign currency gains or losses.
About BellSouth Corporation
BellSouth Corporation is a Fortune 100 communications services company
headquartered in Atlanta, GA, serving more than 45 million customers in the
United States and 15 other countries.
Consistently recognized for customer satisfaction, BellSouth provides a full
array of broadband data and e-commerce solutions to business customers,
including Web hosting and other Internet services. In the residential market,
BellSouth offers DSL high-speed Internet access, advanced voice features and
other services. BellSouth also provides online and directory advertising
services, including BellSouth(R) Real PagesSM.com.
BellSouth owns 40 percent of Cingular Wireless, the nation's second largest
wireless company, which provides innovative wireless data and voice services.
Further information about BellSouth's fourth quarter earnings can be accessed at
www.bellsouth.com/investor. The press release, financial statements and BLS
Investor News summarizing highlights of the quarter are available on the
BellSouth Investor Relations Web site starting today at 8 a.m. Eastern Time.
BellSouth will host a conference call with investors today at 10 a.m. Eastern
Time. Participating on the call will be BellSouth CFO Ron Dykes and Investor
Relations Vice President Nancy Humphries. Dial-in information for the
conference call is:
Domestic: 888-370-1863
International: 706-634-1735
A replay of the call will be available beginning at approximately 1 p.m. Eastern
Time today, through January 29. The replay can be accessed by dialing:
Domestic: 800-642-1687 - Reservation number: 2790514
International: 706-645-9291 - Reservation number: 2790514
In addition to historical information, this document contains forward-looking
statements regarding events and financial trends. Factors that could affect
future results and could cause actual results to differ materially from those
expressed or implied in the forward-looking statements include: (i) a change in
economic conditions in domestic or international markets where we operate or
have material investments which would affect demand for our services; (ii) the
intensity of competitive activity and its resulting impact on pricing strategies
and new product offerings; (iii) higher than anticipated cash requirements for
investments, new business initiatives and acquisitions and (iv) those factors
contained in the Company's periodic reports filed with the SEC. The
forward-looking information in this document is given as of this date only, and
BellSouth assumes no duty to update this information.
BellSouth Corporation
Consolidated Statements of Income - Normalized Basis (unaudited)
(amounts in millions, except per share data)
Note to Readers: Our reported results have been significantly impacted by several events, including the formation of
Cingular Wireless and other one-time items. To assist in your understanding of our results, we have prepared the
following normalized information, including the notes on page 3 which discuss the impacts of these events. See page 4
for our reported results.
Year-to-Date
4Q01 4Q00 Growth 2001 2000 Growth
Operating Revenues
Communications group $ 4,757 $ 4,557 4.4% $ 18,824 $ 18,117 3.9%
Domestic wireless 1,454 1,224 18.8% 5,643 4,257 32.6%
Latin America 683 782 -12.7% 2,910 2,906 0.1%
Domestic advertising and 710 713 -0.4% 2,073 2,042 1.5%
publishing
All other 33 35 -5.7% 139 128 8.6%
Total 7,637 7,311 4.5% 29,589 27,450 7.8%
Operating
Revenues
Operating Expenses
Operational and support 4,126 4,068 1.4% 16,085 14,863 8.2%
expenses
Depreciation and 1,439 1,345 7.0% 5,544 5,104 8.6%
amortization
Total 5,565 5,413 2.8% 21,629 19,967 8.3%
Operating
Expenses
Operating Income 2,072 1,898 9.2% 7,960 7,483 6.4%
Interest Expense 372 409 -9.0% 1,547 1,391 11.2%
Other Income (Expense), net 67 207 N/M* 347 488 N/M
Income Before Income Taxes 1,767 1,696 4.2% 6,760 6,580 2.7%
Provision for Income Taxes 573 576 -0.5% 2,345 2,343 0.1%
Net Income $1,194 $1,120 6.6% $4,415 $4,237 4.2%
Diluted:
Weighted Average Common 1,888 1,884 0.2% 1,887 1,891 -0.2%
Shares Outstanding
Earnings Per Share $0.63 $0.59 6.8% $2.34 $2.24 4.5%
* - Not meaningful.
Selected Financial and Operating Data
EBITDA (5) $3,511 $3,243 8.3% $13,504 $12,587 7.3%
EBITDA margin (6) 46.0% 44.4% 160 bps 45.6% 45.9% -30 bps
Return on average equity (annualized) 26.2% 26.6% -40 bps 24.7% 26.1% -140 bps
Return on average total capital (annualized) 15.1% 15.9% -80 bps 14.8% 15.9% -110 bps
Digital and data revenues $1,207 $966 24.9% $4,472 $3,540 26.3%
Dividends per share $0.19 $0.19 -- $0.76 $0.76 --
Capital expenditures $1,273 $2,055 -38.1% $5,997 $6,995 -14.3%
Common shares outstanding 1,878 1,872 0.3%
Book value per share $9.93 $9.03 10.0%
Debt ratio 52.0% 54.2% -220 bps
Total employees (7) 87,875 103,918 -15.4%
BellSouth Corporation
Normalized Earnings Summary (unaudited)
(amounts in millions, except per share data)
Year-to-Date
4Q01 4Q00 Growth 2001 2000 Growth
Reported Net Income $792 $1,119 -29.2% $2,570 $4,220 -39.1%
Loss on restructurings 227 345 227 393
and asset impairments
(a)
Loss on writedown of 162 - 1,179 -
investments (b)
Gain on sale of - - (19) -
Skycell
Adjustment to ISP - - 88 -
Accrual (c)
Postretirement benefit - - 47 -
expense (d)
Loss on sale of Qwest - - 84 -
common stock (e)
Losses (gains) from (7) - 9 -
wireless video
business (f)
Losses (gains) from - (223) - (223)
pension settlements
(g)
Gain on partner - (292) - (292)
redemption (h)
Contract termination - 125 - 125
payment (i)
Gain on E-Plus - - - (68)
restructuring (j)
Foreign currency 20 46 230 82
losses (k)
Normalized Net Income $1,194 $1,120 6.6% $4,415 $4,237 4.2%
Reported Diluted Earnings Per Share $0.42 $0.59 -28.8% $1.36 $2.23 -39.0%
Loss on restructurings 0.12 0.18 0.12 0.21
and asset impairments
(a)
Loss on writedown of 0.09 - 0.62 -
investments (b)
Gain on sale of - - (0.01) -
Skycell
Adjustment to ISP - - 0.05 -
Accrual (c)
Postretirement benefit - - 0.02 -
expense (d)
Loss on sale of Qwest - - 0.04 -
common stock (e)
Losses (gains) from - - - -
wireless video
business (f)
Losses (gains) from - (0.12) - (0.12)
pension settlements
(g)
Gain on partner - (0.15) - (0.15)
redemption (h)
Contract termination - 0.07 - 0.07
payment (i)
Gain on E-Plus - - - (0.04)
restructuring (j)
Foreign currency 0.01 0.02 0.12 0.04
losses (k)
Normalized Diluted Earnings Per Share * $0.63 $0.59 6.8% $2.34 $2.24 4.5%
* Normalized earnings per share may not sum due to rounding.
BellSouth Corporation
Notes to Normalized Financial and Operating Data
Our normalized earnings have been adjusted for the following:
(a) Loss on restructurings and asset impairments - Represents
restructuring related costs and related asset impairments for
actions taken to reduce operating costs. For 2001, these costs
include $158 of severance related costs and $69 for asset
impairments, primarily software . For 2000, these costs
include $345 associated with the restructuring of our domestic
wireless entertainment business and $48 for the reduction of
our domestic general and administrative staff.
(b) Loss on writedown of investments - Represents the loss
incurred to recognize other-than-temporary declines in the
market values of several investments accounted for under the
cost method.
(c) Adjustment to ISP Accrual - Represents the loss incurred for
prior claims from competitive local exchange carriers
regarding reciprocal compensation for ISP traffic.
(d) Postretirement benefit expense - The amount shown represents
expense for changes in postretirement medical benefit
obligations.
(e) Loss on sale of Qwest common stock - Represents the loss
incurred from the sale of a portion of our investment in Qwest
common stock.
(f) Losses (gains) from Wireless Video Business - Represents the
current period losses (gains) being incurred related to the
exit of the wireless video entertainment business.
(g) Gains from Pension Settlements- During 2000, the number of
employees who voluntarily separated and elected to receive
lump-sum retirement benefits exceeded thresholds that
require current recognition of deferred gains related to
these employees.
(h) Gain on Partner Redemption - We redeemed AT&T's interest
in the AB Cellular partnership through the distribution of
the Los Angeles Cellular wireless property. As required by
accounting rules, AB Cellular adjusted the carrying value
of the LA Cellular assets to fair value immediately prior
to the distribution. The amount shown represents our share
of the gain recognized by AB Cellular as a result of that
adjustment.
(i) Contract termination payment - BellSouth settled
litigation with a distributor of residential telephone
equipment and paid $200 million to the distributor for the
termination of their existing agreement.
(j) Gain on E-Plus Restructuring - Represents income related
to the restructuring of our ownership interest in German
wireless operator E-Plus.
(k) Foreign currency losses - Represents net transaction losses
incurred by our international operations related to US Dollar
denominated liabilities. These losses reflect the impact of
the weakening of those operations' local currencies against
the U.S. Dollar which requires recognition in the current
period income statement.
In addition to the items discussed above, our consolidated normalized statements of income have been adjusted for
the following:
(l) Gross versus net presentation - Communications group revenues
have been adjusted to present all revenues from sales of
customer premises equipment on an agency-fee basis (net of
associated direct costs). This adjustment is made to present
these revenues on a basis comparable to amounts earned under a
new vendor contract entered into during first quarter 2001.
Revenues have been adjusted to reflect a change in
reporting of gross receipts taxes in Florida. Beginning in
the fourth quarter of 2001, we are required to account for
the tax collected from customers as a pass-through billing
(I.e. net presentation). Both of these adjustments are
neutral to EBITDA as they reduce revenue and expense by an
equal amount.
(m) The periods presented have been adjusted to include our
proportional share of Cingular Wireless' operating results,
net of eliminations for amounts charged between Cingular and
other BellSouth companies.
(n) Cingular presents its revenues and expenses from roamer
activity on a gross basis. We have conformed our domestic
wireless revenues and operational and support expenses for the
2000 periods to present roamer revenues and roamer costs on a
consistent basis.
BellSouth Corporation
Consolidated Statements of Income - Reported Basis (unaudited)
(amounts in millions, except per share data)
Year-to-Date
4Q01 4Q00 Growth 2001 2000 Growth
Operating Revenues
Communications group $ 4,785 $ 4,630 3.3% $ 18,984 $ 18,309 3.7%
Domestic wireless - - - 2,766 -100.0%
Latin America 683 782 -12.7% 2,910 2,906 0.1%
Domestic advertising and 710 713 -0.4% 2,073 2,042 1.5%
publishing
All other 35 35 0.0% 163 128 27.3%
Total 6,213 6,160 0.9% 24,130 26,151 -7.7%
Operating
Revenues
Operating Expenses
Operational and support 3,118 3,079 1.3% 12,649 13,726 -7.8%
expenses
Depreciation and 1,244 1,176 5.8% 4,782 4,935 -3.1%
amortization
Provision for restructuring 358 528 N/M* 358 606 N/M
and asset impairments
Total 4,720 4,783 -1.3% 17,789 19,267 -7.7%
Operating
Expenses
Operating Income 1,493 1,377 8.4% 6,341 6,884 -7.9%
Interest Expense 317 346 -8.4% 1,315 1,328 -1.0%
Other Income (Expense), net (27) 729 N/M (1,009) 1,042 N/M
Income Before Income Taxes 1,149 1,760 -34.7% 4,017 6,598 -39.1%
Provision for Income Taxes 357 641 -44.3% 1,447 2,378 -39.2%
Net Income $792 $1,119 -29.2% $2,570 $4,220 -39.1%
Diluted:
Weighted Average Common 1,888 1,884 0.2% 1,887 1,891 -0.2%
Shares Outstanding
Earnings Per Share $0.42 $0.59 -28.8% $1.36 $2.23 -39.0%
* - Not meaningful.
Selected Financial and Operating Data
EBITDA (5) $3,095 $3,081 0.5% $11,481 $12,425 -7.6%
EBITDA margin (6) 49.8% 50.0% -20 bps 47.6% 47.5% 10 bps
Return on average equity (annualized) 17.4% 26.6% -920 bps 14.4% 26.0% -1160 bps
Return on average total capital (annualized) 11.0% 17.4% -640 bps 9.9% 16.3% -640 bps
BellSouth Corporation
Consolidated Balance Sheets (unaudited)
(amounts in millions, except per share data)
December 31, December 31,
2001
2000
Assets
Current Assets:
Cash and cash equivalents $592 $1,061
Accounts receivable, net of allowance for 5,206 5,157
uncollectibles of $476 and $377
Material and supplies 382 379
Other current assets 675 809
Total Current Assets 6,855 7,406
Investments and Advances 10,620 11,010
Property, Plant and Equipment, net 24,943 24,157
Deferred Charges and Other Assets 5,122 4,180
Intangible Assets, net 4,506 4,172
Total Assets $52,046 $50,925
Liabilities and Shareholders' Equity
Current Liabilities:
Debt maturing within one year $4,611 $7,569
Accounts payable 1,656 2,233
Other current liabilities 3,301 3,468
Total Current Liabilities 9,568 13,270
Long-Term Debt 15,599 12,463
Noncurrent Liabilities:
Deferred income taxes 3,206 3,580
Other noncurrent liabilities 5,076 4,700
Total Noncurrent Liabilities 8,282 8,280
Shareholders' Equity:
Common stock, $1 par value 2,020 2,020
Paid-in capital 6,875 6,740
Retained earnings 15,132 14,074
Accumulated other comprehensive income (294) (488)
Shares held in trust and treasury (4,996) (5,222)
Guarantee of ESOP debt (140) (212)
Total Shareholders' Equity 18,597 16,912
Total Liabilities and Shareholders' Equity $52,046 $50,925
BellSouth Corporation
Results by Segment (amounts in millions) (unaudited)
Communications Group (1)
Year-to-Date
4Q01 4Q00 Growth 2001 2000 Growth
Operating Revenues
Local service $2,969 $2,896 2.5% $11,810 $11,468 3.0%
Network access 1,258 1,178 6.8% 4,969 4,769 4.2%
Long distance 209 159 31.4% 747 675 10.7%
Other 387 382 1.3% 1,545 1,543 0.1%
Total 4,823 4,615 4.5% 19,071 18,455 3.3%
Operating
Revenues
Operating Expenses
Operational and support 2,309 2,208 4.6% 9,260 8,683 6.6%
expenses
Depreciation and 1,042 973 7.1% 4,045 3,786 6.8%
amortization
Total 3,351 3,181 5.3% 13,305 12,469 6.7%
Operating
Expenses
Operating Income 1,472 1,434 2.6% 5,766 5,986 -3.7%
Interest Expense 125 180 -30.6% 597 699 -14.6%
Other Income, net 5 23 N/M* 31 31 N/M
Income Before Income Taxes 1,352 1,277 5.9% 5,200 5,318 -2.2%
Provision for Income Taxes 488 461 5.9% 1,896 1,962 -3.4%
Segment Net $864 $816 5.9% $3,304 $3,356 -1.5%
Income(1)
* - Not meaningful.
Selected Financial and Operating Data
(amounts in millions)
EBITDA (5) $2,514 $2,407 4.4% $9,811 $9,772 0.4%
EBITDA margin (6) 52.1% 52.2% -10 bps 51.4% 53.0% -160 bps
Calling feature revenues $569 $547 4.0% $2,281 $2,145 6.3%
Access minutes of use 26,768 28,431 -5.8% 110,106 115,217 -4.4%
Toll messages 99 114 -13.2% 430 504 -14.7%
Capital expenditures $1,093 $1,638 -33.3% $5,125 $5,440 -5.8%
Equivalent access lines in service
(thousands):
Access lines 25,422 25,908 -1.9%
Access line equivalents 40,207 27,892 44.2%
Total equivalent access lines in service 65,629 53,800 22.0%
Wholesale Lines 1,737 1,308 32.8%
Internet customers (thousands) 1,239 956 29.6%
DSL customers (thousands) 621 215 188.8%
BellSouth Corporation
Results by Segment (unaudited)
Supplemental Operating Data (in thousands)
Communications Group - Network Access Lines In Service(a)
4Q01 4Q00 Growth
Access lines (b)
Residence 16,773 17,135 -2.1%
Business 8,440 8,525 -1.0%
Other 209 248 -15.7%
Total access 25,422 25,908 -1.9%
lines in service
Access line equivalents(c)
Selected digital data
services:
DS0 & ADSL 4,471 1,950 129.3%
DS1 6,643 5,673 17.1%
DS3 & higher 29,093 20,269 43.5%
Total digital 40,207 27,892 44.2%
data lines in
service
Total equivalent access lines in service 65,629 53,800 22.0%
(a) Prior period operating data are often revised at later dates to reflect updated information.
The above information reflects the latest data available for the periods indicated.
(b) Access line counts include amounts for switched access lines, Basic Rate ISDN, Primary Rate
ISDN and UNE Combos.
(c) Access line equivalents represent a conversion of non-switched data circuits to a switched
access line basis and is presented for comparability purposes. Equivalents are calculated by
converting high-speed/high-capacity circuits to the equivalent of a switched access line
based on transport capacity. While the revenues generated by access line equivalents have a
directional relationship with these counts, revenue growth rates cannot be compared to line
growth rates on an equivalent basis.
BellSouth Corporation
Results by Segment (amounts in millions) (unaudited)
Domestic Wireless Segment (1)(a)
Year-to-Date
4Q01 4Q00 Growth 2001 2000 Growth
Operating Revenues
Service revenues (4) $1,345 $1,112 21.0% $5,227 $3,944 32.5%
Equipment and other revenues 109 112 -2.7% 416 337 23.4%
Total 1,454 1,224 18.8% 5,643 4,281 31.8%
Operating
Revenues
Operating Expenses
Operational and support 1,035 903 14.6% 3,856 3,129 23.2%
expenses
Depreciation and amortization 198 170 16.5% 767 642 19.5%
Total 1,233 1,073 14.9% 4,623 3,771 22.6%
Operating
Expenses
Operating Income 221 151 46.4% 1,020 510 100.0%
Interest Expense 84 94 -10.6% 328 177 N/M
Other Income (Expense), net (24) 12 N/M (16) 129 N/M
Income Before Income Taxes 113 69 63.8% 676 462 46.3%
Provision for Income Taxes 33 17 94.1% 251 165 52.1%
Segment Net $80 $52 53.8% $425 $297 43.1%
Income(1)
* - Not meaningful.
Selected Financial and Operating Data (b)
(amounts in millions, except customer data in
thousands)
EBITDA (5) $419 $321 30.5% $1,787 $1,152 55.1%
EBITDA margin (6)(c) 31.2% 28.9% 230 bps 34.2% 29.2% 500 bps
Average monthly revenue per customer (8)(d) $52 $53 -1.9% $52 $57 -8.8%
Customer net adds in period:
Cellular and PCS 127 367 -65.4% 766 1,191 -35.7%
Data (Cingular Interactive) 15 44 -65.9% 65 282 -77.0%
Customers:
Cellular and PCS 8,638 8,337 3.6%
Data (Cingular Interactive) 293 229 27.9%
POPs 87,600 82,170 6.6%
Penetration rate (10) 10.9% 10.1% 80 bps
(a) The 2000 periods are comprised of BellSouth's wireless voice and wireless data operations. The
2001 periods are comprised of BellSouth's 40% share of the reported results of Cingular Wireless.
(b) Customer data for the 2001 periods, including POPs, penetration rate and average monthly revenue
per customer, is comprised of BellSouth's 40% share of the managed results of Cingular Wireless.
(c) EBITDA margin denominator includes service revenues only.
(d) Average monthly revenue per customer excludes Cingular Interactive (formerly BellSouth Wireless
Data).
BellSouth Corporation
Results by Segment (amounts in millions) (unaudited)
Latin America Group (1)(2)
Year-to-Date
4Q01 4Q00 Growth 2001 2000 Growth
Operating Revenues
Service revenues (4) $568 $624 -9.0% $2,430 $2,386 1.8%
Equipment and other revenues 92 130 -29.2% 419 445 -5.8%
Advertising and publishing 28 41 -31.7% 86 135 -36.3%
revenues
Total 688 795 -13.5% 2,935 2,966 -1.0%
Operating
Revenues
Operating Expenses
Operational and support 423 627 -32.5% 2,050 2,311 -11.3%
expenses
Depreciation and 158 182 -13.2% 605 605 0.0%
amortization
Total 581 809 -28.2% 2,655 2,916 -9.0%
Operating
Expenses
Operating Income 107 (14) N/M* 280 50 N/M*
Interest Expense 49 67 -26.9% 215 178 20.8%
Other Income (Expense), net (28) 7 N/M (52) (40) N/M
Income Before Income Taxes 30 (74) N/M 13 (168) N/M
Provision for Income Taxes 13 (2) N/M 63 (16) N/M
Segment Net $17 ($72) N/M ($50) ($152) N/M
Income(1)
* - Not meaningful.
Selected Financial and Operating Data
(amounts in millions, except customer data
in thousands)
EBITDA (5) $265 $168 57.7% $885 $655 35.1%
EBITDA margin (6) 38.5% 21.1% 1740 bps 30.2% 22.1% 810 bps
Average monthly revenue per customer (9) $24 $30 -20.0% $25 $34 -26.5%
Customer net adds in period (excluding (507) 401 -226.4% 516 2,081 -75.2%
ownership changes)
Customers (voice) 7,585 7,069 7.3%
POPs 162,100 156,200 3.8%
Penetration rate (10) 4.7% 4.5% 20 bps
BellSouth Corporation
Proportionate Basis(3) - Selected Financial and Operating Data
(Amounts in millions, except customer data in thousands)
Latin America Group (1)(2)
Year-to-Date
4Q01 4Q00 Growth 2001 2000 Growth
Operating revenues $624 $741 -15.8% $2,694 $2,827 -4.7%
EBITDA(5) $218 $170 28.2% $797 $646 23.4%
EBITDA margin(6) 34.9% 22.9% 1200 bps 29.6% 22.9% 670 bps
Average monthly revenue per customer (9) $23 $30 -23.3% $25 $34 -26.5%
Customer net adds in period (excluding (363) 336 -208.0% 707 1,964 -64.0%
ownership changes)
Customers (voice) 7,393 6,665 10.9%
POPs 156,719 151,852 3.2%
Penetration rate (10) 4.7% 4.4% 30 bps
BellSouth Corporation
Worldwide Wireless (unaudited)
Customers and POPs by Country
(Proportionate Basis(3) in thousands)
Customers As of POPs As of
Country Brand 4Q01 4Q00 Growth 4Q01 4Q00 Growth
United States Cingular 8,638 8,337 3.6% 87,600 82,170 6.6%
Wireless
Argentina Movicom 1,033 1,045 -1.1% 24,375 23,270 --
BellSouth
Brazil (a) Various (b) 1,253 1,047 19.7% 20,750 20,500 1.2%
Chile BellSouth 860 691 24.5% 15,400 15,100 --
Colombia BellSouth 743 567 31.0% 28,375 27,451 --
Ecuador BellSouth 307 201 52.7% 11,443 11,086 --
Guatemala BellSouth 45 8 N/M (c) 7,020 7,140 --
Nicaragua BellSouth 139 80 73.8% 2,581 2,581 --
Panama BellSouth 128 90 42.2% 1,311 1,223 --
Peru BellSouth 394 350 12.6% 25,428 24,403 4.2%
Uruguay Movicom 63 58 8.6% 966 966 --
BellSouth
Venezuela Telcel BellSouth 2,428 2,528 -4.0% 19,070 18,132 --
Total Latin America 7,393 6,665 10.9% 156,719 151,852 3.2%
Denmark Sonofon 450 377 19.4% 2,465 2,465 --
Germany e-plus 1,684 1,366 23.3% 18,568 18,568 --
India SkyCell (d) - 9 N/M - 1,348 N/M
Israel Cellcom 779 645 20.8% 2,119 2,119 --
2,913 2,397 21.5% 23,152 24,500 --
Total Worldwide Wireless 18,944 17,399 8.9% 267,471 258,522 3.5%
(a) - Customer counts for Brazil have
been restated to exclude customers of
TCO. The majority of the TCO investment
was sold in December 2001.
(b) - BCP in Sao Paulo and Northeast
regions.
(c) - Not meaningful.
(d) - Sold in third quarter 2001.
BellSouth Corporation
Results by Segment (amounts in millions) (unaudited)
Domestic Advertising & Publishing (1)
Year-to-Date
4Q01 4Q00 Growth 2001 2000 Growth
Total Operating Revenues $ 715 $ 720 -0.7% $ 2,091 $ 2,066 1.2%
Operating Expenses
Operational and support 346 325 6.5% 1,023 997 2.6%
expenses
Depreciation and amortization 8 6 33.3% 28 28 0.0%
Total 354 331 6.9% 1,051 1,025 2.5%
Operating
Expenses
Operating Income 361 389 -7.2% 1,040 1,041 -0.1%
Interest Expense 3 4 -25.0% 16 14 14.3%
Other Income, net (2) 1 N/M* 3 2 N/M
Income Before Income Taxes 356 386 -7.8% 1,027 1,029 -0.2%
Provision for Income Taxes 137 150 -8.7% 394 394 0.0%
Segment Net $219 $236 -7.2% $633 $635 -0.3%
Income(1)
EBITDA (5) $369 $395 -6.6% $1,068 $1,069 -0.1%
EBITDA margin (6) 51.6% 54.9% -330 bps 51.1% 51.7% -60 bps
* - Not meaningful.
BellSouth Corporation
Notes
(1) Segment net income (loss) is based on normalized results which exclude certain one-time transactions and
certain corporate intercompany billings. Intersegment revenues are not eliminated for purposes of
management reporting.
(2) Results for the Latin America segment are reported one month in arrears.
(3) Proportionate basis financial and operating data reflect our ownership interest in the total operating
results for each of our wireless properties, both domestic and international, whether or not consolidated
for financial statement presentation purposes.
(4) Wireless service revenues includes activation fees, access, airtime, roaming, long distance and value added
services. Roaming revenues are included on a gross basis for the Domestic Wireless segment and on a net
basis for the Latin America segment.
(5) EBITDA is defined as operating revenues less operational and support expenses.
(6) EBITDA margin is calculated by dividing EBITDA by operating revenues.
(7) The decrease in employees reflects the transfer of employees from our former domestic wireless operations
to Cingular. Those employees totaled 11,767 at 12/31/2000.
(8) For the Domestic Wireless segment, average monthly revenue per customer is calculated by dividing average
monthly revenue by average customers. Average monthly revenue includes activation fees, access, airtime,
roaming (gross), long distance and value added services.
(9) For the Latin America segment, average monthly revenue per customer is calculated by dividing average
monthly revenue by average customers. Average monthly revenue includes activation fees, access, airtime,
roaming (net), long distance and value added services.
(10) Penetration rate is calculated by dividing customers by POPs (excludes POPs in markets where service has
not been initiated).
This information is provided by RNS
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