1st Quarter Results
Bellsouth Corp
19 April 2002
FOR MORE INFORMATION FOR IMMEDIATE RELEASE
Jeff Battcher (404-713-0274) April 19, 2002
BellSouth Reports First Quarter Earnings
• 108,000 Broadband DSL customers added in first quarter 2002
• Data revenues exceed $1 billion, grow nearly 15 percent
ATLANTA - BellSouth Corporation (NYSE: BLS) reported earnings per share (EPS) of
61 cents in the first quarter of 2002, compared to 47 cents in the first quarter
of 2001. Normalized for special items (see below), EPS in the first quarter of
2002 was 54 cents, equal to normalized EPS of 54 cents in the same quarter a
year ago.
Free cash flow (defined as cash flow from operations less capital expenditures)
totaled $1.06 billion in the first quarter of 2002. The E-Plus disposition and
resulting KPN stock sale (see Special Items below) produced an additional $1
billion in the quarter. Since the end of 2001, the company has reduced its debt
by over $1 billion, or 5.2 percent.
BellSouth continues to experience the direct impacts of weak economic conditions
in both North American and Latin American markets. Slowing demand for services
has been exacerbated by business failures, including those in the
telecommunications industry. As a result of IXC (Inter Exchange Carrier) and
CLEC (Competitive Local Exchange Carrier) business failures, first quarter
earnings were negatively impacted by 2 cents per share. In the midst of such
conditions, BellSouth remains focused on delivering high quality products and
services to its nearly 45 million customers worldwide.
"Our highest attention is being paid to serving our customers," said BellSouth
Chairman and Chief Executive Officer F. Duane Ackerman. "Our service levels are
at all-time highs and our retention rate for small business customers is
improving. We expect to begin adding long distance to our offers in the second
quarter of 2002 and anticipate offering long distance service in all of our
markets by year end."
Data and Broadband
Boosted by continued growth in Broadband DSL Internet access for residential
customers, Communications Group data service revenues were $1.12 billion in the
first quarter of 2002, resulting in a year-over-year growth rate of nearly 15
percent. Communications Group data service revenues in the first quarter a year
ago were $975 million. Sales of wholesale data transport services to other
communications providers, including long distance companies and CLECs, were
weak, growing at approximately 7 percent during the quarter. In contrast, all
other data service revenues grew at a rate of 23 percent.
BellSouth added 108,000 Broadband DSL customers in the first three months of
2002, and had 729,000 retail and wholesale DSL customers at March 31, an annual
growth rate of 141 percent.
Domestic Wireless / Cingular
BellSouth's domestic wireless revenues in the first quarter of 2002 were $1.4
billion, representing the company's 40 percent share of Cingular Wireless. This
is a gain of 8.2 percent compared to the same quarter a year ago. BellSouth's
share of Cingular operating income was $266 million in the quarter, 29.8 percent
higher than the same three months a year ago. First quarter EBITDA margin
(earnings before interest, taxes, depreciation and amortization) expanded 160
basis points to 33.6 percent, year over year.
Cingular added 533,000 net digital postpaid contract customers in the first
three months of 2002, and ended the quarter with 21.8 million total customers,
an annual growth rate of 6.3 percent.
In March, Cingular announced it will continue to roll out its high-speed
wireless data service in major markets during 2002, including the nation's
number one market, New York. Last Wednesday, Cingular launched the new service,
known as GPRS, in California. GPRS (for General Packet Radio Service) gives
customers a better wireless Internet experience, with "always-on" access to
faster Web browsing, e-mail and instant messaging. By the end of this year,
half of Cingular's customers will have access to GPRS, giving them a high-speed
wireless data connection that stays open even while they're talking.
Latin America Group
Consolidated Latin America revenues declined 15.1 percent to $656 million in the
first quarter, reflecting previously disclosed impacts of currency devaluation
and deteriorating economic conditions, principally in Argentina and Venezuela.
Despite these challenges, EBITDA increased 19.1 percent to $181 million. On a
proportionate basis, BellSouth now serves 7.7 million customers in Latin
America, an annual growth rate of 5.9 percent, adding 310,000 customers in the
first quarter of 2002. BellSouth and its wireless partners cover a total
population of 224 million in 11 Central and South American countries.
Additional Quarterly Highlights
Reported net income in the three months ended March 31, 2002 was $1.16 billion,
compared to $891 million in the first quarter of 2001. Normalized net income in
the first quarter of 2002 was $1.02 billion, essentially equal to the same
quarter of 2001.
Consolidated revenues, which do not include Cingular, were $5.53 billion in the
first quarter of 2002, compared to $5.92 billion in the same three months a year
earlier. Consolidated total operating expenses declined 4.4 percent. Adjusted
to include BellSouth's 40 percent share of Cingular, total revenues of $7.08
billion were lower by 1.1 percent compared to the first quarter of 2001.
Excluding the impact of currency devaluations in Argentina and Venezuela,
year-over-year revenue growth would have been approximately 1 percent.
Special Items
In the first quarter of 2002, the difference between reported EPS of 61 cents
and normalized EPS of 54 cents is the result of five special items:
E-Plus Disposition and KPN Stock Sale 45 cents Gain
Qwest Stock Sale and Impairment 8 cents Charge
Foreign Exchange Impacts (debt related) 11 cents Charge
Brazil Loan Impairment 14 cents Charge
A&P Unbilled Receivable Adjustment 5 cents Charge
E-Plus Disposition and KPN Stock Sale - On March 14, 2002, BellSouth closed an
agreement with Dutch telecommunications provider Royal KPN that restructured the
relationship between the two companies. BellSouth exchanged its 22.51 percent
stake in German mobile phone operator E-Plus for 234.7 million shares of KPN,
which BellSouth sold March 19.
Qwest Stock Sale and Impairment - BellSouth recognized charges for the further
impairment of an equity investment in Qwest Communications International, as
well as for losses on open market sales of Qwest common stock.
Foreign Exchange Impacts (debt related) - Reported EPS in the first quarter of
2002 included foreign currency losses of 11 cents per share related to the
impact of currency devaluations in Argentina and Venezuela on U.S.
dollar-denominated debt. Foreign currency losses in the first quarter of the
previous year were 2 cents per share.
Brazil Loan Impairment - This charge to earnings represents the recognition of
an impairment on shareholder loans to BellSouth's Brazilian equity investments,
as well as the recognition of a guarantee on a portion of those operations'
debt. BellSouth is currently in negotiations with its partners and banks
regarding the funding requirements for these operations. The outcome of these
negotiations cannot be predicted, nor can there be any assurance an agreement
will be reached.
Advertising & Publishing Unbilled Receivable Adjustment - During the first
quarter of 2002, BellSouth determined that the unbilled receivable balance at
its advertising and publishing subsidiary was overstated. To adjust the
balance, BellSouth recorded a charge to operations of $163 million.
2002 Guidance
As a result of continued economic weakness and resulting sector demand, the
following updates to company guidance are provided for full-year 2002:
Total operating revenue growth (including Cingular) Approximately 1 percent
Normalized earnings per share* $2.36 to $2.43
Capital expenditures (excluding Cingular) $4.2 to $4.4 billion
Data revenue growth Mid-teens
DSL high-speed Internet customers at 12/31 1.1 million
*Includes effect of required accounting change under FAS 142. Excludes foreign
currency gains or losses related to debt.
About BellSouth Corporation
BellSouth Corporation is a Fortune 100 communications services company
headquartered in Atlanta, GA, serving nearly 45 million customers in the United
States and 14 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 first 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 April 26. The replay can be accessed by dialing:
Domestic: 800-642-1687 - Reservation number: 3446019
International: 706-645-9291 - Reservation number: 3446019
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.
1Q02 1Q01 Growth
Operating Revenues
Communications group $ 4,614 $ 4,612 0.0%
Domestic wireless 1,417 1,310 8.2%
Latin America 656 773 -15.1%
Domestic advertising and publishing 379 434 -12.7%
All other 17 34 -50.0%
Total Operating Revenues 7,083 7,163 -1.1%
Operating Expenses
Operational and support expenses 3,905 3,940 -0.9%
Depreciation and amortization 1,341 1,337 0.3%
Total Operating Expenses 5,246 5,277 -0.6%
Operating Income 1,837 1,886 -2.6%
Interest Expense 359 420 -14.5%
Other Income (Expense), net 78 113 N/M*
Income Before Income Taxes 1,556 1,579 -1.5%
Provision for Income Taxes 540 561 -3.7%
Net Income $1,016 $1,018 -0.2%
Diluted:
Weighted Average Common Shares Outstanding 1,888 1,886 0.1%
Earnings Per Share $0.54 $0.54 0.0%
* - Not meaningful.
Selected Financial and Operating Data
EBITDA (5) $3,178 $3,223 -1.4%
EBITDA margin (6) 44.9% 45.0% -10 bps
Dividends per share $0.19 $0.19 --
Capital expenditures $1,005 $1,690 -40.5%
Common shares outstanding 1,879 1,873 0.3%
Book value per share $10.19 $9.29 9.7%
Debt ratio 49.8% 52.6% -280 bps
Total employees (7) 85,742 107,155 -20.0%
BellSouth Corporation
Normalized Earnings Summary and Reconciliation to Reported Results
(amounts in millions, except per share data)
First Quarter 2002 Normalizing Items
GAAP A C D E F G Normalized
Operating Revenues $ 5,534 $ 1,386 $ - $ - $ - $ 163 $ - $ 7,083
Operating Expenses 4,126 1,120 - - - - - 5,246
Operating Income 1,408 266 - - - 163 - 1,837
Interest Expense 304 55 - - - - - 359
Other Income (Expense), net 818 (211) (1,339) 230 383 - 197 78
Income Before Income Taxes 1,922 - (1,339) 230 383 163 197 1,556
Provision for Income Taxes 767 - (482) 80 120 62 (7) 540
Net Income $1,155 $0 ($857) $150 $263 $101 $204 $1,016
Diluted Earnings Per Share $0.61 $0.00 ($0.45) $0.08 $0.14 $0.05 $0.11 $0.54
First Quarter 2001 Normalizing Items
GAAP A B D G H I Normalized
Operating Revenues $ 5,919 $ 1,284 $ (28) $ - $ - $ - $ (12) $ 7,163
Operating Expenses 4,318 1,080 (28) - - (73) (20) 5,277
Operating Income 1,601 204 - - - 73 8 1,886
Interest Expense 360 60 - - - - - 420
Other Income (Expense), net 166 (144) - 50 41 - - 113
Income Before Income Taxes 1,407 - - 50 41 73 8 1,579
Provision for Income Taxes 516 - - 18 (2) 26 3 561
Net Income $891 $0 $0 $32 $43 $47 $5 $1,018
Diluted Earnings Per Share $0.47 $0.00 $0.00 $0.02 $0.02 $0.02 $0.00 $0.54
BellSouth Corporation
Notes to Normalized Financial and Operating Data
Our normalized earnings have been adjusted for the following:
(a) The periods presented have been adjusted to include our 40%
proportional share of Cingular Wireless' operating results, net
of eliminations for amounts charged by other BellSouth companies
to Cingular.
(b) Gross versus net presentation - Communications group revenues for
first quarter 2001 have been reduced by $13 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 for the same period have
been reduced by $15 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.
(c) Gain on E-Plus conversion and sale of KPN stock - In March 2002,
we exchanged our 22.5% investment in E-Plus, a German wireless
carrier, for 234.7 million shares of KPN Royal. As a result of
this exchange, we recorded a pretax gain of $1,335 to recognize
the difference between the fair value of the KPN shares
obtained and our investment balance in E-Plus. In addition, we
subsequently sold the KPN shares for cash proceeds of $1,076 and
recognized a pretax loss of $27.The amount shown also includes
income of $20 generated from the settlement of forward contracts
associated with advances to E-Plus. These advances were
restructured in conjunction with the ownership exchange.
(d) Qwest stock sale and impairment - Represents charges for the
further impairment of an equity investment in Qwest
Communications as well as for losses on sales of Qwest common
stock. Total shares sold were 18.5 million in first quarter 2002
and 22.2 million in first quarter 2001.
(e) Brazil loan impairments - Represents recognition of an impairment
on shareholder loans to our Brazilian equity investments, as well
as the recognition of a guarantee on a portion of those
operations' debt.
(f) A&P unbilled receivable adjustment - During first quarter 2002,
BellSouth determined that the unbilled receivable balance at its
advertising and publishing subsidiary was overstated. As a
result, BellSouth recorded a reduction to advertising and
publishing revenues.
(g) 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.
(h) Postretirement benefit expense - The amount shown represents
expense for changes in postretirement medical benefit
obligations.
(i) Losses (gains) from Wireless Video Business - Represents losses
incurred in 2001 related to the exit of the wireless video
entertainment business.
BellSouth Corporation
Consolidated Statements of Income - Reported Basis (unaudited)
(amounts in millions, except per share data)
1Q02 1Q01 Growth
Operating Revenues
Communications group $ 4,645 $ 4,665 -0.4%
Latin America 656 773 -15.1%
Domestic advertising and publishing 216 434 -50.2%
All other 17 47 -63.8%
Total Operating Revenues 5,534 5,919 -6.5%
Operating Expenses
Operational and support expenses 2,965 3,161 -6.2%
Depreciation and amortization 1,161 1,157 0.3%
Total Operating Expenses 4,126 4,318 -4.4%
Operating Income 1,408 1,601 -12.1%
Interest Expense 304 360 -15.6%
Other Income (Expense), net 818 166 N/M
Income Before Income Taxes 1,922 1,407 36.6%
Provision for Income Taxes 767 516 48.6%
Net Income $1,155 $891 29.6%
Diluted:
Weighted Average Common Shares Outstanding 1,888 1,886 0.1%
Earnings Per Share $0.61 $0.47 29.8%
* - Not meaningful.
Selected Financial and Operating Data
EBITDA (5) $2,569 $2,758 -6.9%
EBITDA margin (6) 46.4% 46.6% -20 bps
Return on average equity (annualized) 24.7% 20.7% 400 bps
Return on average total capital (annualized) 14.9% 14.5% 40 bps
BellSouth Corporation
Consolidated Balance Sheets (unaudited)
(amounts in millions, except per share data)
March 31, December 31,
2002 2001
Assets
Current Assets:
Cash and cash equivalents $2,061 $592
Accounts receivable, net of allowance for uncollectibles 4,667 5,206
of $416 and $476
Material and supplies 341 382
Other current assets 713 675
Total Current Assets 7,782 6,855
Investments and Advances 9,717 10,620
Property, Plant and Equipment, net 24,496 24,943
Deferred Charges and Other Assets 5,296 5,122
Goodwill, net 1,672 1,672
Other Intangible Assets, net 2,702 2,834
Total Assets $51,665 $52,046
Liabilities and Shareholders' Equity
Current Liabilities:
Debt maturing within one year $4,998 $5,111
Accounts payable 1,439 1,656
Other current liabilities 3,246 3,301
Total Current Liabilities 9,683 10,068
Long-Term Debt 14,078 15,014
Noncurrent Liabilities:
Deferred income taxes 3,884 3,206
Other noncurrent liabilities 4,878 5,161
Total Noncurrent Liabilities 8,762 8,367
Shareholders' Equity:
Common stock, $1 par value 2,020 2,020
Paid-in capital 6,875 6,875
Retained earnings 15,895 15,137
Accumulated other comprehensive income (618) (294)
Shares held in trust and treasury (4,928) (4,996)
Guarantee of ESOP debt (102) (145)
Total Shareholders' Equity 19,142 18,597
Total Liabilities and Shareholders' Equity $51,665 $52,046
BellSouth Corporation
Consolidated Statements of Cash Flows (unaudited)
(amounts in millions)
1Q02 1Q01
Cash Flows from Operating Activities:
Net income $ 1,155 $ 891
Adjustments to net income:
Depreciation and amortization 1,161 1,157
Net losses on sale or impairment of equity 236 50
securities
Provision for uncollectibles 156 106
Postretirement benefit curtailment charge - 72
related to Cingular
Brazil loan impairments 383 -
A&P unbilled receivable adjustment 163 -
Net losses (earnings) of equity affiliates (165) (84)
Dividends received from equity affiliates - 29
Minority interests in income of subsidiaries (81) (15)
Deferred income taxes 611 16
(Gain) loss on sale/disposal of operations (1,318) -
Net change in:
Accounts receivable and other current assets 194 (210)
Accounts payable and other current (479) (107)
liabilities
Deferred charges and other assets (185) (279)
Other liabilities and deferred credits (38) (29)
Other reconciling items, net 272 76
Net cash provided by operating activities 2,065 1,673
Cash Flows from Investing Activities:
Capital expenditures (1,005) (1,690)
Investments in and advances to equity affiliates (6) (115)
Purchase of wireless license - (10)
Proceeds from sale of equity securities 1,334 1,000
Purchases of short-term investments - 107
Proceeds from disposition of short-term investments - (76)
Proceeds from repayment of loans and advances 426 5
Investment in debt securities - (176)
Other investing activities, net (4) 15
Net cash used for investing activities 745 (940)
Cash Flows from Financing Activities:
Net borrowing (repayments) of short-term debt (962) (986)
Proceeds from long-term debt 4 744
Repayments of long-term debt (10) (517)
Dividends paid (357) (351)
Other financing activities, net (16) 28
Net cash used for financing activities (1,341) (1,082)
Net Decrease in Cash and Cash Equivalents 1,469 (349)
Cash and Cash Equivalents at Beginning of Period 592 1,061
Cash and Cash Equivalents at End of Period $ 2,061 $ 712
BellSouth Corporation
Results by Segment (amounts in millions) (unaudited)
Communications Group (1)
1Q02 1Q01 Growth
Operating Revenues
Local service $2,941 $2,898 1.5%
Network access 1,205 1,235 -2.4%
Long distance 205 171 19.9%
Other 331 367 -9.8%
Total Operating Revenues 4,682 4,671 0.2%
Operating Expenses
Operational and support expenses 2,304 2,185 5.4%
Depreciation and amortization 1,015 976 4.0%
Total Operating Expenses 3,319 3,161 5.0%
Operating Income 1,363 1,510 -9.7%
Interest Expense 125 168 -25.6%
Other Income, net - 12 N/M*
Income Before Income Taxes 1,238 1,354 -8.6%
Provision for Income Taxes 468 499 -6.2%
Segment Net Income(1) $770 $855 -9.9%
* - Not meaningful.
Selected Financial and Operating Data
(amounts in millions)
EBITDA (5) $2,378 $2,486 -4.3%
EBITDA margin (6) 50.8% 53.2% -240 bps
Data service revenues $1,117 $975 14.6%
Calling feature revenues $592 $563 5.2%
Access minutes of use 25,583 28,430 -10.0%
Toll messages 96 111 -13.5%
Capital expenditures $922 $1,477 -37.6%
Equivalent access lines in service (thousands):
Access lines 25,425 25,898 -1.8%
Access line equivalents 41,398 31,227 32.6%
Total equivalent access lines in service 66,823 57,125 17.0%
Wholesale Lines 1,921 1,408 36.4%
DSL customers (thousands) 729 303 140.6%
BellSouth Corporation
Results by Segment (unaudited)
Supplemental Operating Data (in thousands)
Communications Group - Network Access Lines In Service(a)
1Q02 1Q01 Growth
Access lines (b)
Residence 16,608 17,192 -3.4%
Business 8,616 8,464 1.8%
Other 201 242 -16.9%
Total access lines in service 25,425 25,898 -1.8%
Access line equivalents(c)
Selected digital data services:
DS0 & ADSL 5,121 2,513 103.8%
DS1 6,635 5,985 10.9%
DS3 & higher 29,642 22,729 30.4%
Total digital data lines in service 41,398 31,227 32.6%
Total equivalent access lines in service 66,823 57,125 17.0%
(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)
1Q02 1Q01 Growth
Operating Revenues
Service revenues (4) $1,326 $1,205 10.0%
Equipment and other revenues 91 105 -13.3%
Total Operating Revenues 1,417 1,310 8.2%
Operating Expenses
Operational and support expenses 971 925 5.0%
Depreciation and amortization 180 180 0.0%
Total Operating Expenses 1,151 1,105 4.2%
Operating Income 266 205 29.8%
Interest Expense 90 82 9.8%
Other Income (Expense), net (25) 20 N/M
Income Before Income Taxes 151 143 5.6%
Provision for Income Taxes 59 55 7.3%
Segment Net Income(1) $92 $88 4.5%
* - Not meaningful.
Selected Financial and Operating Data
(amounts in millions, except customer data in thousands)
EBITDA (5) $446 $385 15.8%
EBITDA margin (6)(c) 33.6% 32.0% 160 bps
Average monthly revenue per customer (8)(d) $50 $50 0.0%
Customer net adds in period:
Cellular and PCS 94 342 -72.5%
Data (Cingular Interactive) 13 34 -61.8%
Customers:
Cellular and PCS 8,732 8,214 6.3%
Data (Cingular Interactive) 306 263 16.3%
POPs 87,600 76,800 14.1%
Penetration rate (10) 11.1% 10.7% 40 bps
(a) The domestic wireless segment is comprised of
BellSouth's 40% share of the reported results of
Cingular Wireless.
(b) Customer data for 2001 period, 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.
BellSouth Corporation
Results by Segment (amounts in millions) (unaudited)
Latin America Group (1)(2)
1Q02 1Q01 Growth
Operating Revenues
Service revenues (4) $546 $642 -15.0%
Equipment and other revenues 110 139 -20.9%
Advertising and publishing revenues 3 1 200.0%
Total Operating 659 782 -15.7%
Revenues
Operating Expenses
Operational and support expenses 478 630 -24.1%
Depreciation and amortization 118 154 -23.4%
Total Operating 596 784 -24.0%
Expenses
Operating Income 63 (2) N/M*
Interest Expense 42 60 -30.0%
Other Income (Expense), net (15) 1 N/M
Income Before Income Taxes 6 (61) N/M
Provision for Income Taxes 2 2 N/M
Segment Net Income(1) $4 ($63) N/M
* - Not meaningful.
Selected Financial and Operating Data
(amounts in millions, except customer data in thousands)
EBITDA (5) $181 $152 19.1%
EBITDA margin (6) 27.5% 19.4% 810 bps
Average monthly revenue per customer (9) $23 $28 -17.9%
Customer net adds in period (excluding ownership changes) 323 715 -54.8%
Customers (voice) 7,908 7,784 1.6%
POPs 162,100 156,200 3.8%
Penetration rate (10) 4.9% 5.0% -10 bps
BellSouth Corporation
Proportionate Basis(3) - Selected Financial and Operating Data
(Amounts in millions, except customer data in thousands)
Latin America Group (1)(2)
1Q02 1Q01 Growth
Operating revenues $620 $712 -12.9%
EBITDA(5) $178 $154 15.6%
EBITDA margin(6) 28.7% 21.6% 710 bps
Average monthly revenue per customer (9) $23 $28 -17.9%
Customer net adds in period (excluding ownership changes) 310 613 -49.4%
Customers (voice) 7,705 7,278 5.9%
POPs 156,752 151,852 3.2%
Penetration rate (10) 4.9% 4.8% 10 bps
BellSouth Corporation
Worldwide Wireless (unaudited)
Customers and POPs by Country
(Proportionate Basis(3) in thousands)
Customers As of POPs As of
Country Brand 1Q02 1Q01 Growth 1Q02 1Q01 Growth
United States Cingular 8,732 8,214 6.3% 87,600 76,800 14.1%
Wireless
Argentina Movicom 981 1,094 -10.3% 24,375 23,270 4.7%
BellSouth
Brazil BCP 1,249 1,097 13.9% 20,783 20,500 1.4%
Chile BellSouth 939 757 24.0% 15,400 15,100 2.0%
Colombia BellSouth 810 738 9.8% 28,375 27,451 3.4%
Ecuador BellSouth 368 217 69.6% 11,443 11,086 3.2%
Guatemala BellSouth 67 17 N/M (a) 7,020 7,140 -1.7%
Nicaragua BellSouth 153 116 31.9% 2,581 2,581 --
Panama BellSouth 133 98 35.7% 1,311 1,223 7.2%
Peru BellSouth 429 369 16.3% 25,428 24,403 4.2%
Uruguay Movicom 68 62 9.7% 966 966 --
BellSouth
Venezuela Telcel BellSouth 2,508 2,713 -7.6% 19,070 18,132 5.2%
Total Latin America 7,705 7,278 5.9% 156,752 151,852 3.2%
Denmark Sonofon 464 408 13.7% 2,465 2,465 --
Israel Cellcom 796 687 15.9% 2,119 2,119 --
1,260 1,095 15.1% 4,584 4,584 --
Total Worldwide Wireless 17,697 16,587 6.7% 248,936 233,236 6.7%
(a) - Not meaningful.
BellSouth Corporation
Results by Segment (amounts in millions) (unaudited)
Domestic Advertising & Publishing (1)
1Q02 1Q01 Growth
Total Operating Revenues $ 383 $ 437 -12.4%
Operating Expenses
Operational and support expenses 205 204 0.5%
Depreciation and amortization 6 7 -14.3%
Total Operating Expenses 211 211 0.0%
Operating Income 172 226 -23.9%
Interest Expense 3 8 -62.5%
Other Income, net - 4 N/M*
Income Before Income Taxes 169 222 -23.9%
Provision for Income Taxes 65 85 -23.5%
Segment Net Income(1) $104 $137 -24.1%
EBITDA (5) $178 $233 -23.6%
EBITDA margin (6) 46.5% 53.3% -680 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 as well as the effect of workforce reduction
measures announced during 2001.
(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
The company news service from the London Stock Exchange
Friday, 10th January 2025
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