BellSouth Reports Fourth Quarter Earnings -- 1.8 million Cingular
pro forma net customer additions -- 224,000 DSL net customer
additions -- 467,000 long distance net customer additions ATLANTA,
Jan. 25 /PRNewswire-FirstCall/ -- BellSouth Corporation (NYSE:BLS)
announced fourth quarter 2004 earnings per share (EPS): -- Reported
EPS from continuing operations was 27 cents compared to 45 cents in
fourth quarter 2003. -- Normalized EPS from continuing operations
was 35 cents compared to 46 cents in fourth quarter of 2003. --
Total reported EPS from continuing and discontinued operations was
80 cents compared to 43 cents in fourth quarter 2003. Reported
Results from Continuing Operations For the fourth quarter of 2004,
BellSouth's consolidated reported revenue from continuing
operations totaled $5.15 billion, an increase of 0.8 percent
compared to the same quarter in 2003. Income from continuing
operations was $496 million compared to $836 million in the same
quarter of the previous year. Reported EPS from continuing
operations for the quarter was 27 cents compared to 45 cents in the
fourth quarter of 2003. BellSouth's fourth quarter 2004 reported
income and EPS from continuing operations were negatively impacted
by restoration expenses due to hurricanes, severance-related
expenses and a previously announced change in the calculation of
the retiree medical benefit obligation. In addition, BellSouth's
earnings related to Cingular Wireless were affected by merger
integration costs from the acquisition of AT&T Wireless, high
gross customer additions and upgrades, lower service revenue,
accelerated depreciation and acquisition-related financing costs.
For the full year of 2004, BellSouth reported EPS from continuing
operations of $1.87 compared to $1.88 in 2003. Consolidated revenue
from continuing operations was $20.30 billion in 2004, flat
compared to 2003. Income from continuing operations was $3.44
billion in 2004 compared to $3.49 billion the previous year.
Normalized Results from Continuing Operations Normalized results
from continuing operations are adjusted for BellSouth's 40 percent
proportionate share of Cingular's revenues and expenses. Cingular
completed its acquisition of AT&T Wireless on Oct. 26, 2004.
Cingular's results for the quarter combine Cingular stand-alone
results for the first 25 days of the quarter and the operations of
the combined companies starting on Oct. 26, 2004. Prior period
results for 2003 and the first three quarters of 2004 have not been
restated. Normalized revenue was $7.92 billion for the fourth
quarter of 2004 compared to $6.63 billion for the fourth quarter in
2003. Normalized net income was $640 million compared to $846
million for the fourth quarter in 2003. Normalized EPS from
continuing operations of 35 cents in the fourth quarter excludes
the impact of hurricane- and severance-related expenses in the
wireline business (5 cents) and merger integration costs from
Cingular's acquisition of AT&T Wireless (3 cents). Fourth
quarter normalized EPS from continuing operations declined compared
to the third quarter of 2004. Communications Group results were
negatively impacted by a previously announced change in the
calculation of the retiree medical benefit obligation (3 cents) and
an annual FAS 112 adjustment (1 cent). In addition to
acquisition-related financing costs (2 cents), BellSouth's earnings
related to Cingular Wireless declined by approximately 7 cents due
primarily to seasonal decline in roaming revenue, high gross
customer additions, costs associated with incrementally higher
customer upgrades and increased depreciation expense driven by
adjustments to the expected useful life of TDMA equipment. For the
full year, normalized EPS was $1.83 in 2004 compared to $1.95 in
2003. Normalized revenue was $27.91 billion in 2004. Normalized net
income was $3.36 billion for 2004. Cash Flow and Capital Operating
free cash flow from continuing operations (defined as net cash
provided by operating activities less capital expenditures) totaled
$3.61 billion for 2004. Capital expenditures for continuing
operations for 2004 were $3.19 billion, including $60 million in
hurricane restoration capital, compared to $2.93 billion in 2003.
Communications Group In 2004, revenue growth from long distance and
DSL high-speed Internet service offset reduced revenue from access
line declines, holding Communications Group revenue flat at $18.45
billion, compared to 2003. In the fourth quarter, revenue increased
0.6 percent to $4.65 billion compared to the same quarter the
previous year. Operating margin for 2004 was 25.1 percent compared
to 26.3 percent in 2003. Operating margin for the fourth quarter
was 22.6 percent, impacted primarily by the previously announced
change in the calculation of the retiree medical benefit
obligation. During the fourth quarter of 2004, BellSouth added a
record 224,000 net DSL customers and ended the year at 2.1 million
customers. This momentum reflects the continued success of the
tiered service portfolio and was driven in part by the Company's
long-term, strategic move to offer additional incentives and new
pricing for FastAccess(R) DSL. Driven by DSL, network data revenue
for the fourth quarter was $1.16 billion, an increase of 6.5
percent compared to the same quarter of 2003. BellSouth added
467,000 mass-market long distance customers during the fourth
quarter of 2004, and now serves more than 6.1 million mass-market
long distance customers. These customers represent a 48 percent
penetration of BellSouth's mass-market base and spend an average of
approximately $17 per month on long distance with BellSouth. With
DIRECTV(R), BellSouth provides a competitively priced triple-play
package of voice, data and entertainment services. Through Dec. 31,
more than 200,000 customers have added DIRECTV(R) to their
communications services packages. As of Dec. 31, 2004, total access
lines were 21.4 million, down 4.1 percent compared to a year
earlier. UNE-P access lines resold by BellSouth competitors were
2.8 million at year-end 2004 compared to 2.4 million at year-end
2003. In the third and fourth quarters of 2004, UNE-P lines began a
declining trend and decreased a total of 165,000 over the second
half of 2004. Cingular Wireless Cingular Wireless, the nation's
largest wireless provider, added nearly 1.8 million customers in
the fourth quarter of 2004, on a pro forma basis, bringing its
nationwide customer base to more than 49 million customers.
Cingular's gross customer additions in the fourth quarter totaled
5.5 million on a pro forma basis, the best ever combined total for
the two companies. Pro forma churn was 2.6 percent in the fourth
quarter. In the fourth quarter, BellSouth's share of Cingular's
reported revenues was $2.83 billion. Reported average revenue per
user (ARPU) in the fourth quarter was $49.22. ARPU on a pro forma
basis was $49.67, down 4.7 percent versus pro forma results the in
the third quarter of 2004. The sequential decline is primarily
attributable to seasonal declines in roaming revenues. ARPU on a
pro forma basis was down 5.8 percent versus pro forma results for
the same period in 2003. Year-over-year ARPU was adversely impacted
by the transition of customers to GSM plans, Family Talk, and
non-cash deferrals of Rollover minutes. ARPU from data services
continued its strong growth, reaching $2.89 on a reported basis.
This growth was driven by the popularity of text messaging, mobile
e-mail, downloadable ringtones, games and photo messaging.
Cingular's normalized fourth quarter service margin from operating
income before depreciation and amortization was 23.2 percent. This
segment's normalized operating margin, which excludes integration
costs, was 1.0 percent. Fourth-quarter expenses and margins reflect
negative impacts from accelerated depreciation, higher operating
costs from high levels of gross customer additions, upgrade costs,
costs associated with the progress in customer conversions to new
Cingular GSM contracts, and a range of customer service
initiatives. Synergies from the merger will benefit Cingular's
financial results as the integration plans progress in 2005.
Cingular has reached several important milestones in the
integration process of AT&T Wireless operations and services.
In addition to this quarter's net adds, Cingular integrated
essentially all customer-facing operations by launch date and has
migrated over 1 million AT&T Wireless subscribers to new
Cingular postpaid plans. Advertising & Publishing In the fourth
quarter of 2004, Advertising & Publishing grew revenue by 1.1
percent year-over-year to $528 million. Operating margin for the
fourth quarter of 2004 was 45.3 percent compared to 46.0 percent in
the fourth quarter of 2003. Segment net income was $145 million
compared to $147 million in the fourth quarter of 2003. Full year
2004 revenue was $2.0 billion, a 1.5 percent decline compared to
2003, and full year operating margins were stable at 47.3 percent
compared to 47.5 percent in 2003. Discontinued Operations: Latin
America In March 2004, BellSouth signed a definitive agreement with
Telefonica Moviles, the wireless affiliate of Telefonica, S.A., to
sell BellSouth's interests in its 10 Latin American operations. As
of Jan. 11, 2005, BellSouth completed the sale of all 10
operations. The Company's financial statements, as of Dec. 31,
2004, reflect results for the Latin American segment in the line
item titled Discontinued Operations. For the fourth quarter,
BellSouth reported income from discontinued operations of 53 cents
per share compared to a loss of 3 cents per share in the fourth
quarter of 2003. Results for the fourth quarter of 2004 include an
after-tax gain of $915 million related to eight of the 10
properties that were closed prior to year-end. BellSouth will
report an after-tax gain of approximately $385 million to $405
million in the first quarter of 2005 related to the January closing
of the remaining two properties. Normalizing Items In the fourth
quarter of 2004, the difference between reported (GAAP) EPS from
continuing operations and normalized EPS is shown in the following
table: 4Q04 4Q03 GAAP Diluted EPS - Income from continuing
operations $0.27 $0.45 Hurricane-related expenses $0.04 Wireless
merger integration costs $0.03 Severance and lease termination
costs $0.01 $0.01 Normalized Diluted EPS - Income from continuing
operations $0.35 $0.46 Hurricane-related expenses -- Represents the
incremental labor and material costs incurred during the fourth
quarter related to service restoration and network repairs in the
wireline business due to Hurricanes Charley, Frances, Ivan and
Jeanne. Wireless merger integration costs -- Represents BellSouth's
40 percent share of tax-effected wireless merger integration costs
of $245 million incurred during the fourth quarter in connection
with the Cingular/AWE merger. Severance and lease termination costs
-- Represents the net severance- related costs recorded in the
fourth quarter associated with previously announced workforce
reductions and a provision related to surplus office space under
long-term leases. About BellSouth Corporation BellSouth Corporation
is a Fortune 100 communications company headquartered in Atlanta,
GA and a parent company of Cingular Wireless, the nation's largest
wireless voice and data provider. Backed by award winning customer
service, BellSouth offers the most comprehensive and innovative
package of voice and data services available in the market. Through
BellSouth Answers(R), residential and small business customers can
bundle their local and long distance service with dial up and high
speed DSL Internet access, satellite television and Cingular(R)
Wireless service. For businesses, BellSouth provides secure,
reliable local and long distance voice and data networking
solutions. BellSouth also offers online and directory advertising
through BellSouth(R) RealPages.com(R) and The Real Yellow Pages(R).
More information about BellSouth can be found at
http://www.bellsouth.com/ . Further information about BellSouth and
Cingular's fourth quarter earnings can be accessed at
http://www.bellsouth.com/investor . The press release, financial
statements and Investor News summarizing highlights of the quarter
are available on the BellSouth Investor Relations website starting
today at 8 a.m. Eastern Time (ET). BellSouth will host a conference
call with investors today at 10 a.m. (ET). Participating will be
BellSouth CFO Ron Dykes and Investor Relations Vice President Nancy
Davis. Dial-in information for the conference call is as follows:
Domestic: 888-370-1863 International: 706-634-1735 The conference
call will also be webcast live beginning at 10 a.m. (ET) on our
website at http://www.bellsouth.com/investor . The webcast will be
archived on our website beginning at approximately 1 p.m. (ET)
today. A replay of the call will be available beginning at
approximately 1 p.m. (ET) today, through Feb. 1, 2005, and can be
accessed by dialing: Domestic: 800-642-1687 -- Reservation number:
2940113 International: 706-645-9291 -- Reservation number: 2940113
In addition to historical information, this document may contain
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 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; (iv) unfavorable regulatory actions; and (v) 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. This document may also contain certain non-GAAP
financial measures. The most directly comparable GAAP financial
measures, and a full reconciliation of non-GAAP to GAAP financial
information, are attached hereto and provided on the Company's
investor relations website, http://www.bellsouth.com/investor .
BellSouth Corporation Consolidated Statements of Income - Reported
Basis (unaudited) (amounts in millions, except per share data) Note
to Readers: See Normalization Earnings Summary and Reconciliation
to GAAP results on pages 3 and 4 for a summary of unusual items
included in Reported Basis results. 4Q04 4Q03 Growth 3Q04 Growth
Operating Revenues Communications group $4,607 $4,576 0.7% $4,585
0.5% Advertising and publishing 524 518 1.2% 495 5.9% All other 15
13 15.4% 15 0.0% Total Operating Revenues 5,146 5,107 0.8% 5,095
1.0% Operating Expenses Cost of services and products 2,052 1,762
16.5% 1,881 9.1% Selling, general & administrative expenses
1,072 980 9.4% 905 18.5% Depreciation and amortization 916 950
-3.6% 908 0.9% Provision for restructuring and asset impairments 18
16 12.5% - N/M Total Operating Expenses 4,058 3,708 9.4% 3,694 9.9%
Operating Income 1,088 1,399 -22.2% 1,401 -22.3% Interest Expense
270 222 21.6% 220 22.7% Other Income (Expense), net (107) 108
-199.1% 136 -178.7% Income from Continuing Operations before Income
Taxes, Discontinued Operations and Cumulative Effect of Changes in
Accounting Principles 711 1,285 -44.7% 1,317 -46.0% Provision for
Income Taxes 215 449 -52.1% 465 -53.8% Income from Continuing
Operations before Discontinued Operations and Cumulative Effect of
Changes in Accounting Principles 496 836 -40.7% 852 -41.8% Income
(Loss) from Discontinued Operations, net of tax 975 (49) N/M* (53)
N/M Income Before Cumulative Effect of Changes in Accounting
Principles 1,471 787 86.9% 799 84.1% Cumulative Effect of Changes
in Accounting Principle - - N/M* - N/M Net Income 1,471 787 86.9%
799 84.1% Diluted: Weighted Average Common Shares Outstanding 1,836
1,845 -0.5% 1,835 0.1% Earnings Per Share: Income from Continuing
Operations $0.27 $0.45 -40.0% $0.46 -41.3% Income from Discontinued
Operations $0.53 ($0.03) N/M ($0.03) N/M Cumulative Effect of
Changes in Accounting Principles - - N/M - N/M Net Income $0.80
$0.43 86.0% $0.44 81.8% * - Not meaningful. Year-to-Date 2004 2003
Growth Operating Revenues Communications group $18,239 $18,255
-0.1% Advertising and publishing 2,005 2,033 -1.4% All other 56 53
5.7% Total Operating Revenues 20,300 20,341 -0.2% Operating
Expenses Cost of services and products 7,520 6,991 7.6% Selling,
general & administrative expenses 3,816 3,777 1.0% Depreciation
and amortization 3,636 3,811 -4.6% Provision for restructuring and
asset impairments 39 205 -81.0% Total Operating Expenses 15,011
14,784 1.5% Operating Income 5,289 5,557 -4.8% Interest Expense 916
947 -3.3% Other Income (Expense), net 883 814 8.5% Income from
Continuing Operations before Income Taxes, Discontinued Operations
and Cumulative Effect of Changes in Accounting Principles 5,256
5,424 -3.1% Provision for Income Taxes 1,819 1,936 -6.0% Income
from Continuing Operations before Discontinued Operations and
Cumulative Effect of Changes in Accounting Principles 3,437 3,488
-1.5% Income (Loss) from Discontinued Operations, net of tax 1,428
101 N/M Income Before Cumulative Effect of Changes in Accounting
Principles 4,865 3,589 35.6% Cumulative Effect of Changes in
Accounting Principle - 315 -100.0% Net Income 4,865 3,904 24.6%
Diluted: Weighted Average Common Shares Outstanding 1,836 1,852
-0.9% Earnings Per Share: Income from Continuing Operations $1.87
$1.88 -0.5% Income from Discontinued Operations $0.78 $0.05 N/M
Cumulative Effect of Changes in Accounting Principles - $0.17
-100.0% Net Income $2.65 $2.11 25.6% * - Not meaningful. Selected
Financial and Operating Data 4Q04 4Q03 Growth 3Q04 Growth Operating
income $1,088 $1,399 -22.2% $1,401 -22.3% Operating margin 21.1%
27.4% -630 bps 27.5% -640 bps Declared dividends per share $0.27
$0.25 8.0% $0.27 0.0% Capital expenditures $1,059 $948 11.7% $768
37.9% Common shares outstanding 1,831 1,830 0.1% 1,831 0.0% Book
value per share $12.66 $10.77 17.5% $11.94 6.0% Selected Financial
and Operating Data Year-to-Date 2004 2003 Growth Operating income
$5,289 $5,557 -4.8% Operating margin 26.1% 27.3% -120 bps Declared
dividends per share $1.06 $0.92 15.2% Capital expenditures $3,193
$2,926 9.1% BellSouth Corporation Consolidated Statements of Income
- Normalized Basis (unaudited) (amounts in millions, except per
share data) Note to Readers: Our reported results, as shown on page
1, are prepared in accordance with generally accepted accounting
principles (GAAP). The normalized results presented below exclude
the impact of certain non- recurring or non-operating items, the
details of which are provided on pages 3 and 4 of this release. In
addition, the normalized results reflect our 40% proportionate
share of Cingular's results, the presentation of which is not
allowed under GAAP. Normalized results exclude discontinued
operations from all periods. Certain reclassifications have been
made to prior periods to conform to the current presentation. 4Q04
4Q03 Growth 3Q04 Growth Operating Revenues Communications group
$4,543 $4,528 0.3% $4,533 0.2% Domestic wireless 2,833 1,565 81.0%
1,702 66.5% Advertising and publishing 524 518 1.2% 495 5.9% All
other 15 14 7.1% 16 -6.3% Total Operating Revenues 7,915 6,625
19.5% 6,746 17.3% Operating Expenses Cost of services and products
3,025 2,327 30.0% 2,445 23.7% Selling, general, &
administrative expenses 2,148 1,572 36.6% 1,510 42.3% Depreciation
and amortization 1,472 1,179 24.9% 1,137 29.5% Total Operating
Expenses 6,645 5,078 30.9% 5,092 30.5% Operating Income 1,270 1,547
-17.9% 1,654 -23.2% Interest Expense 368 281 31.0% 276 33.3% Other
Income (Expense), net 35 39 -10.3% 7 400.0% Income Before Income
Taxes 937 1,305 -28.2% 1,385 -32.3% Provision for Income Taxes 297
459 -35.3% 492 -39.6% Net Income $640 $846 -24.3% $893 -28.3%
Diluted: Weighted Average Common Shares Outstanding 1,836 1,845
-0.5% 1,835 0.1% Earnings Per Share $0.35 $0.46 -23.9% $0.49 -28.6%
Year-to-Date 2004 2003 Growth Operating Revenues Communications
group $18,074 $18,084 -0.1% Domestic wireless 7,774 6,193 25.5%
Advertising and publishing 2,005 2,033 -1.4% All other 57 54 5.6%
Total Operating Revenues 27,910 26,364 5.9% Operating Expenses Cost
of services and products 10,129 9,108 11.2% Selling, general, &
administrative expenses 6,641 5,928 12.0% Depreciation and
amortization 4,868 4,647 4.8% Total Operating Expenses 21,638
19,683 9.9% Operating Income 6,272 6,681 -6.1% Interest Expense
1,184 1,194 -0.8% Other Income (Expense), net 54 157 -65.6% Income
Before Income Taxes 5,142 5,644 -8.9% Provision for Income Taxes
1,783 2,028 -12.1% Net Income $3,359 $3,616 -7.1% Diluted: Weighted
Average Common Shares Outstanding 1,836 1,852 -0.9% Earnings Per
Share $1.83 $1.95 -6.2% Selected Financial and Operating Data 4Q04
4Q03 Growth 3Q04 Growth Operating income $1,270 $1,547 -17.9%
$1,654 -23.2% Operating margin 16.0% 23.4% -740 bps 24.5% -850 bps
Declared dividends per share $0.27 $0.25 8.0% $0.27 0.0% Capital
expenditures $1,059 $948 11.7% $768 37.9% Common shares outstanding
1,831 1,830 0.1% 1,831 0.0% Book value per share $12.66 $10.77
17.5% $11.94 6.0% Total employees 62,564 65,842 -5.0% 63,132 -0.9%
Selected Financial and Operating Data Year-to-Date 2004 2003 Growth
Operating income $6,272 $6,681 -6.1% Operating margin 22.5% 25.3%
-280 bps Declared dividends per share $1.06 $0.92 15.2% Capital
expenditures $3,193 $2,926 9.1% BellSouth Corporation Normalized
Earnings Summary and Reconciliation to Reported Results (amounts in
millions, except per share data) Fourth Quarter 2004 Discontinued
Continuing Operations Operations GAAP F (GAAP - F) Operating
Revenues $5,146 $- $5,146 Operating Expenses 4,058 - 4,058
Operating Income 1,088 - 1,088 Interest Expense 270 - 270 Other
Income (Expense), net (107) - (107) Income from Continuing
Operations before Income Taxes 711 - 711 Provision for Income Taxes
215 - 215 Income from Continuing Operations 496 - 496 Income (Loss)
from Discontinued Operations, net of tax 975 (975) - Net Income
$1,471 ($975) $496 Diluted Earnings Per Share $0.80 ($0.53) $0.27
Fourth Quarter 2004 Normalizing Items Severance/ Hurricane- Lease
Term. related Cingular Payments Expenses A D H Operating Revenues
$2,769 $- $- Operating Expenses 2,840 (29) (126) Operating Income
(71) 29 126 Interest Expense 98 - - Other Income (Expense), net 142
- - Income from Continuing Operations before Income Taxes (27) 29
126 Provision for Income Taxes (27) 11 49 Income from Continuing
Operations - 18 77 Income (Loss) from Discontinued Operations, net
of tax - - - Net Income $0 $18 $77 Diluted Earnings Per Share $0.00
$0.01 $0.04 Fourth Quarter 2004 Normalizing Items Merger
Integration I Normalized Operating Revenues $- $7,915 Operating
Expenses (98) 6,645 Operating Income 98 1,270 Interest Expense -
368 Other Income (Expense), net - 35 Income from Continuing
Operations before Income Taxes 98 937 Provision for Income Taxes 49
297 Income from Continuing Operations 49 640 Income (Loss) from
Discontinued Operations, net of tax - - Net Income $49 $640 Diluted
Earnings Per Share $0.03 $0.35 Year-to-Date 2004 Discontinued
Continuing Operations Operations GAAP F (GAAP - F) Operating
Revenues $20,300 $- $20,300 Operating Expenses 15,011 - 15,011
Operating Income 5,289 - 5,289 Interest Expense 916 - 916 Other
Income (Expense), net 883 - 883 Income from Continuing Operations
before Income Taxes 5,256 - 5,256 Provision for Income Taxes 1,819
- 1,819 Income from Continuing Operations 3,437 - 3,437 Income
(Loss) from Discontinued Operations, net of tax 1,428 (1,428) - Net
Income $4,865 ($1,428) $3,437 Diluted Earnings Per Share $2.65
($0.78) $1.87 Year-to-Date 2004 Normalizing Items Severance/ Lease
Term. Sale of Cingular Payments Sonofon A D E Operating Revenues
$7,560 $- $- Operating Expenses 6,950 (29) - Operating Income 610
29 - Interest Expense 268 - - Other Income (Expense), net (367) -
(462) Income from Continuing Operations before Income Taxes (25) 29
(462) Provision for Income Taxes (25) 11 (167) Income from
Continuing Operations - 18 (295) Income (Loss) from Discontinued
Operations, net of tax - - - Net Income $0 $18 ($295) Diluted
Earnings Per Share $0.00 $0.01 ($0.16) Year-to-Date 2004
Normalizing Items Hurricane- Merger SC related Integration / FV
Settlement Expenses Adj G H I Normalized Operating Revenues $50 $-
$- $27,910 Operating Expenses (3) (164) (127) 21,638 Operating
Income 53 164 127 6,272 Interest Expense - - - 1,184 Other Income
(Expense), net - - - 54 Income from Continuing Operations before
Income Taxes 53 164 127 5,142 Provision for Income Taxes 20 64 61
1,783 Income from Continuing Operations 33 100 66 3,359 Income
(Loss) from Discontinued Operations, net of tax - - - - Net Income
$33 $100 $66 $3,359 Diluted Earnings Per Share $0.02 $0.05 $0.04
$1.83 BellSouth Corporation Normalized Earnings Summary and
Reconciliation to Reported Results (amounts in millions, except per
share data) Fourth Quarter 2003 Normalizing Items Discontinued
Continuing Pension/ Operations Operations Cingular Severance GAAP F
(GAAP - F) A D Normalized Operating Revenues $5,107 $- $5,107
$1,518 $- $6,625 Operating Expenses 3,708 - 3,708 1,386 (16) 5,078
Operating Income 1,399 - 1,399 132 16 1,547 Interest Expense 222 -
222 59 - 281 Other Income (Expense), net 108 - 108 (69) - 39 Income
from Continuing Operations before Income Taxes 1,285 - 1,285 4 16
1,305 Provision for Income Taxes 449 - 449 4 6 459 Income from
Continuing Operations 836 - 836 - 10 846 Income (Loss) from
Disconti- nued Operations, net of tax (49) 49 - - - - Income Before
Cumulative Effect of Changes in Accounting Principles 787 49 836 -
10 846 Cumulative Effect of Changes in Accounting Principles - - -
- - - Net Income $787 $49 $836 $0 $10 $846 Diluted Earn- ings Per
Share * $0.43 $0.03 $0.45 $0.00 $0.01 $0.46 * Normalized earnings
per share for fourth quarter 2003 does not sum due to rounding.
Year-to-Date 2003 Discontinued Continuing Operations Operations
GAAP F (GAAP - F) Operating Revenues $20,341 $- $20,341 Operating
Expenses 14,784 - 14,784 Operating Income 5,557 - 5,557 Interest
Expense 947 - 947 Other Income (Expense), net 814 - 814 Income from
Continuing Operations before Income Taxes 5,424 - 5,424 Provision
for Income Taxes 1,936 - 1,936 Income from Continuing Operations
3,488 - 3,488 Income (Loss) from Discontinued Operations, net of
tax 101 (101) - Income Before Cumulative Effect of Changes in
Accounting Principles 3,589 (101) 3,488 Cumulative Effect of
Changes in Accounting Principles 315 - 315 Net Income $3,904 ($101)
$3,803 Diluted Earnings Per Share * $2.11 ($0.05) $2.05 *
Normalized earnings per share for year-to-date 2003 does not sum
due to rounding. Year-to-Date 2003 Normalizing Items A&P
Cingular Acctg.Change FAS143 A B C Operating Revenues $6,023 $- $-
Operating Expenses 5,108 - - Operating Income 915 - - Interest
Expense 247 - - Other Income (Expense), net (657) - - Income from
Continuing Operations before Income Taxes 11 - - Provision for
Income Taxes 11 - - Income from Continuing Operations - - - Income
(Loss) from Discontinued Operations, net of tax - - - Income Before
Cumulative Effect of Changes in Accounting Principles - - -
Cumulative Effect of Changes in Accounting Principles - 501 (816)
Net Income $0 $501 ($816) Diluted Earnings Per Share * $0.00 $0.27
($0.44) * Normalized earnings per share for year-to-date 2003 does
not sum due to rounding. Year-to-Date 2003 Normalizing Items
Pension/ Asset Severance Impairment D J Normalized Operating
Revenues $- $- $26,364 Operating Expenses (157) (52) 19,683
Operating Income 157 52 6,681 Interest Expense - - 1,194 Other
Income (Expense), net - - 157 Income from Continuing Operations
before Income Taxes 157 52 5,644 Provision for Income Taxes 61 20
2,028 Income from Continuing Operations 96 32 3,616 Income (Loss)
from Discontinued Operations, net of tax - - - Income Before
Cumulative Effect of Changes in Accounting Principles 96 32 3,616
Cumulative Effect of Changes in Accounting Principles - - - Net
Income $96 $32 $3,616 Diluted Earnings Per Share * $0.05 $0.02
$1.95 * Normalized earnings per share for year-to-date 2003 does
not sum due to rounding. BellSouth Corporation Notes to Normalized
Financial and Operating Data (pages 3 and 4) (amounts in millions,
except per share 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) Change in method of accounting related
to our directory publishing business from the issue basis method to
the deferral method -- The 2003 amount is a one-time charge to net
income of $501. (c) Adoption of Financial Accounting Standard No.
143 (FAS 143) -- Represents a one-time charge related to the
adoption of new accounting rules associated with obligations
related to the retirement of long-lived assets. The adjustment
resulted in a one-time increase to net income of $816. (d)
Pension/Severance Costs/Lease Termination Payments -- During 2003,
the number of employees who voluntarily separated and elected to
receive lump-sum retirement benefits exceeded thresholds that
require current recognition of deferred losses related to these
employees. These costs include $43 after-tax of severance related
costs. During 2004, the amount represents the net severance related
costs recorded in the fourth quarter associated with workforce
reductions and a provision related to surplus office space under
long-term leases. (e) Gain related to the sale of our operations in
Denmark. (f) Discontinued Operations - In March 2004, we announced
our intention to sell our Latin American properties. Accordingly,
the prior period results have been recast to reflect the Latin
American operations as Discontinued Operations and excluded from
normalized results. The year-to-date period in 2004 includes $336
in net income tax benefit representing the recognition of book over
tax basis differential in connection with the announced sale of
these properties. The third quarter 2004 results include an
after-tax charge of $190 related to the buyout of the other major
shareholder in Telcel, our Venezuelan operation and the settlement
of all outstanding claims with this shareholder. The fourth quarter
2004 results include an after-tax gain of $915 related to 8 of the
10 properties that were closed prior to year end. (g) SC Regulatory
Settlement - In April 2004, BellSouth entered into a settlement
agreement with the South Carolina Consumer Advocate with respect to
previously disclosed litigation (See 2003 10K for further
discussion). The settlement required among other things, that
BellSouth refund $50 to its South Carolina customers. The refund
was recognized in the first quarter 2004 as a reduction to revenue.
(h) Hurricane-related Expenses - Represents the incremental labor
and material costs incurred during the 3rd and 4th quarters related
to service restoration and network repairs in the wireline business
due to Hurricanes Charley, Frances, Ivan and Jeanne. (i) Wireless
merger integration planning costs and fair value adjustment-
Represents BellSouth's 40% share of tax-effected wireless merger
integration planning costs of $43 incurred during the 3rd quarter
and costs of $245 in the 4th quarter in connection with the
Cingular/AWE merger. Also includes a $31 fair value adjustment for
the announced sale of Cingular Interactive during the 3rd quarter.
(j) Asset Impairment -- The third quarter 2003 charge for asset
impairment represents the write-off of capitalized software related
to an abandoned systems project. BellSouth Corporation Consolidated
Balance Sheets (unaudited) (amounts in millions, except per share
data) December December Change September Change 31, 31, vs. 30, vs.
Prior Prior 2004 2003 Year 2004 Quarter Assets Current Assets: Cash
and cash equivalents $696 $4,556 ($3,860) $9,200 ($8,504) Accounts
receivable, net of allowance for uncollectibles of $317, $496, and
$331 2,559 2,870 (311) 2,546 13 Material and supplies 321 375 (54)
316 5 Other current assets 909 1,048 (139) 842 67 Assets of
discontinued operations 1,068 0 1,068 3,977 (2,909) Total Current
Assets 5,553 8,849 (3,296) 16,881 (11,328) Investment in and
Advances to Cingular Wireless 22,841 7,679 15,162 7,952 14,889
Property, Plant and Equipment, net 22,039 23,807 (1,768) 21,971 68
Other Assets 7,400 6,977 423 7,178 222 Goodwill 0 93 (93) 0 0
Intangible Assets, net 1,587 2,297 (710) 1,507 80 Total Assets
$59,420 $49,702 $9,718 $55,489 $3,931 Liabilities and Shareholders'
Equity Current Liabilities: Debt maturing within one year $5,475
$3,491 $1,984 $3,048 $2,427 Accounts payable 1,047 1,339 (292) 970
77 Other current liabilities 2,980 3,628 (648) 3,150 (170)
Liabilities of discontinued operations 830 0 830 2,674 (1,844)
Total Current Liabilities 10,332 8,458 1,874 9,842 490 Long-Term
Debt 15,108 11,489 3,619 13,142 1,966 Noncurrent Liabilities:
Deferred income taxes 6,347 5,349 998 6,314 33 Other noncurrent
liabilities 4,460 4,694 (234) 4,327 133 Total Noncurrent
Liabilities 10,807 10,043 764 10,641 166 Shareholders' Equity:
Common stock, $1 par value 2,020 2,020 0 2,020 0 Paid-in capital
7,840 7,729 111 7,790 50 Retained earnings 19,374 16,540 2,834
18,421 953 Accumulated other comprehensive income (157) (585) 428
(470) 313 Shares held in trust and treasury (5,904) (5,992) 88
(5,897) (7) Total Shareholders' Equity 23,173 19,712 3,461 21,864
1,309 Total Liabilities and Shareholders' Equity $59,420 $49,702
$9,718 $55,489 $3,931 BellSouth Corporation Consolidated Statements
of Cash Flows (unaudited) (amounts in millions, except per share
data) Year-To-Date 4Q04 4Q03 3Q04 2004 2003 Cash Flows from
Operating Activities: Income from Continuing Operations $496 $836
$852 $3,437 $3,488 Adjustments to income from continuing
operations: Depreciation and amortization 916 950 908 3,636 3,811
Provision for uncollectibles 99 125 90 384 523 Net losses
(earnings) of equity affiliates 190 (25) (73) (138) (452) Deferred
income taxes 196 (12) 137 936 788 Net (gains) losses on sale or
impairment of equity securities (5) - 6 4 7 Pension income (121)
(133) (121) (484) (534) Pension settlement (gains) losses - (40) -
- 47 Stock-based compensation expense 29 32 29 116 124 Asset
impairments - - - - 52 (Gain) loss on sale/disposal of operations -
- - (462) - Net change in: Accounts receivable and other current
assets (148) (89) (147) (419) (81) Accounts payable and other
current liabilities (504) (233) (88) (508) 55 Deferred charges and
other assets (21) 46 19 (79) 299 Other liabilities and deferred
credits 111 (143) 28 159 (276) Other reconciling items, net 75 14
51 219 32 Net cash provided by operating activities 1,313 1,328
1,691 6,801 7,883 Cash Flows from Investing Activities: Capital
expenditures (1,059) (948) (768) (3,193) (2,926) Investments in
debt and equity securities (129) (167) (87) (632) (194) Investments
in and advances to equity affiliates (14,445) - - (14,445) - Net
short term advances to Cingular (666) - - (666) - Proceeds from
sale of securities and operations 3,113 - 6 3,678 27 Proceeds from
repayment of loans and advances - - 20 129 1,899 Settlement of
derivatives on advances - - - (17) (352) Other investing
activities, net (4) (1) (8) (7) (12) Net cash provided by (used
for) investing activities (13,190) (1,116) (837)(15,153) (1,558)
Cash Flows from Financing Activities: Net borrowing (repayments) of
short-term debt 2,004 (8) 73 1,738 (431) Proceeds from long-term
debt 2,389 - 2,993 6,078 - Repayments of long-term debt (14) (13)
(524) (759) (1,849) Dividends paid (494) (425) (493) (1,901)
(1,608) Purchase of treasury shares (47) (536) - (146) (858) Other
financing activities, net 13 38 (3) 61 67 Net cash used for
financing activities 3,851 (944) 2,046 5,071 (4,679) Net
Increase/(Decrease) in Cash from Continuing Operations (8,026)
(732) 2,900 (3,281) 1,646 Net Increase/(Decrease) in Cash from
Discontinued Operations (478) 263 84 (579) 428 Net Increase
(Decrease) in Cash and Cash Equivalents (8,504) (469) 2,984 (3,860)
2,074 Cash and Cash Equivalents at Beginning of Period 9,200 5,025
6,216 4,556 2,482 Cash and Cash Equivalents at End of Period $696
$4,556 $9,200 $696 $4,556 BellSouth Corporation Results by Segment
(amounts in millions) (unaudited) Communications Group (1) 4Q04
4Q03 Growth 3Q04 Growth Operating Revenues Voice $3,166 $3,164 0.1%
$3,121 1.4% Data 1,165 1,094 6.5% 1,145 1.7% Other 316 360 -12.2%
361 -12.5% Total Operating Revenues 4,647 4,618 0.6% 4,627 0.4%
Operating Expenses Cost of services and products 1,850 1,698 9.0%
1,783 3.8% Selling, general, & administrative expenses 844 792
6.6% 729 15.8% Depreciation and amortization 904 941 -3.9% 898 0.7%
Total Operating Expenses 3,598 3,431 4.9% 3,410 5.5% Segment
Operating Income 1,049 1,187 -11.6% 1,217 -13.8% Interest Expense
93 90 3.3% 94 -1.1% Other Income (Expense), net 9 10 -10.0% 7 28.6%
Income Before Income Taxes 965 1,107 -12.8% 1,130 -14.6% Provision
for Income Taxes 341 393 -13.2% 416 -18.0% Segment Net Income (1)
$624 $714 -12.6% $714 -12.6% Year-To-Date 2004 2003 Growth
Operating Revenues Voice $12,609 $12,702 -0.7% Data 4,518 4,353
3.8% Other 1,325 1,393 -4.9% Total Operating Revenues 18,452 18,448
0.0% Operating Expenses Cost of services and products 7,108 6,755
5.2% Selling, general, & administrative expenses 3,123 3,079
1.4% Depreciation and amortization 3,593 3,771 -4.7% Total
Operating Expenses 13,824 13,605 1.6% Segment Operating Income
4,628 4,843 -4.4% Interest Expense 367 407 -9.8% Other Income
(Expense), net 29 38 -23.7% Income Before Income Taxes 4,290 4,474
-4.1% Provision for Income Taxes 1,563 1,645 -5.0% Segment Net
Income(1) $2,727 $2,829 -3.6% Selected Financial and Operating Data
4Q04 4Q03 Growth 3Q04 Growth (amounts in millions) Segment
operating income $1,049 $1,187 -11.6% $1,217 -13.8% Segment
operating margin 22.6% 25.7% -310 bps 26.3% -370 bps Long distance
revenues $533 $411 29.7% $524 1.7% Switched Access MOUs 16,459
18,983 -13.3% 17,128 -3.9% BSLD MOUs 5,864 3,920 49.6% 5,673 3.4%
Total Access minutes of use 22,323 22,903 -2.5% 22,801 -2.1%
Capital expenditures $969 $901 7.5% $724 33.8% (amounts in
thousands) Wholesale lines 2,958 2,682 10.3% 3,070 -3.6% DSL
customers 2,096 1,462 43.4% 1,872 12.0% LD customers 6,130 3,960
54.8% 5,663 8.2% Consumer ARPU (4) $57.32 $53.20 7.7% $56.80 0.9%
Year-To-Date 2004 2003 Growth (amounts in millions) Segment
operating income $4,628 $4,843 -4.4% Segment operating margin 25.1%
26.3% -120 bps Long distance revenues $1,976 $1,354 45.9% Switched
Access MOUs 70,061 82,102 -14.7% BSLD MOUs 21,109 10,039 110.3%
Total Access minutes of use 91,170 92,141 -1.1% Capital
expenditures $3,018 $2,824 6.9% BellSouth Corporation Results by
Segment (unaudited) Supplemental Operating Data (in thousands)
Communications Group - Network Access Lines In Service Reported (a)
4Q04 4Q03 Growth 3Q04 Growth Access lines Residence Retail Primary
11,771 12,466 -5.6% 11,816 -0.4% Additional 1,346 1,601 -15.9%
1,388 -3.0% Total Retail Residence 13,117 14,067 -6.8% 13,204 -0.7%
Wholesale Resale 116 177 -34.5% 114 1.8% UNE-P 1,972 1,696 16.3%
2,082 -5.3% Total Wholesale Residence 2,088 1,873 11.5% 2,196 -4.9%
Total Residence 15,205 15,940 -4.6% 15,400 -1.3% Business Retail
Total Retail Business 5,245 5,417 -3.2% 5,264 -0.4% Wholesale
Resale 58 73 -20.5% 61 -4.9% UNE-P 750 686 9.3% 752 -0.3% Total
Wholesale Business 808 759 6.5% 813 -0.6% Total Business 6,053
6,176 -2.0% 6,077 -0.4% Other Retail/Wholesale Lines Retail 36 97
-62.9% 38 -5.3% Wholesale 62 50 24.0% 61 1.6% Total Other
Retail/Wholesale Lines 98 147 -33.3% 99 -1.0% Total Access Lines in
Service 21,356 22,263 -4.1% 21,576 -1.0% ISDN line equivalents
Residence 9 13 -30.8% 10 -10.0% Business 1,459 1,453 0.4% 1,462
-0.2% Total ISDN Adjusted ALIS 22,824 23,729 -3.8% 23,048 -1.0%
Access Line Equivalents (b) Selected digital data services:
Unbundled Loops 273 344 -20.6% 326 -16.3% DS0 & ADSL 12,863
9,051 42.1% 11,493 11.9% DS1 7,695 7,179 7.2% 7,594 1.3% DS3 &
higher 32,746 31,577 3.7% 32,643 0.3% Total digital data lines in
service 53,577 48,151 11.3% 52,056 2.9% Total equivalent access
lines in service 76,401 71,880 6.3% 75,104 1.7% (a) Prior period
operating data are often revised at later dates to reflect updated
information. The above information reflects the latest data
available for the periods indicated. (b) Access line equivalents
represent a conversion of non-switched data circuits to a switched
access line basis and is presented for comparability purposes.
Equivalents are calculated by converting high-speed/high-capacity
circuits to the equivalent of a switched access line based on
transport capacity. While the revenues generated by access line
equivalents have a directional relationship with these counts,
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) 4Q04 4Q03
Growth 3Q04 Growth Operating Revenues Service revenues (2) $2,511
$1,414 77.6% $1,534 63.7% Equipment and other revenues 322 151
113.2% 168 91.7% Total Operating Revenues 2,833 1,565 81.0% 1,702
66.5% Operating Expenses Cost of services and products 1,166 607
92.1% 651 79.1% Selling, general, & administrative expenses
1,084 599 81.0% 609 78.0% Depreciation and amortization 556 228
143.9% 229 142.8% Total Operating Expenses 2,806 1,434 95.7% 1,489
88.4% Segment Operating Income 27 131 -79.4% 213 -87.3% Interest
Expense 121 82 47.6% 80 51.3% Other Income (Expense), net (35) (38)
7.9% (46) 23.9% Income Before Income Taxes (129) 11 N/M* 87 -248.3%
Provision for Income Taxes (56) (1) N/M 33 -269.7% Segment Net
Income (1) ($73) $12 N/M $54 -235.2% * - Not meaningful.
Year-To-Date 2004 2003 Growth Operating Revenues Service revenues
(2) $6,989 $5,689 22.9% Equipment and other revenues 785 504 55.8%
Total Operating Revenues 7,774 6,193 25.5% Operating Expenses Cost
of services and products 2,980 2,273 31.1% Selling, general, &
administrative expenses 2,826 2,170 30.2% Depreciation and
amortization 1,232 835 47.5% Total Operating Expenses 7,038 5,278
33.3% Segment Operating Income 736 915 -19.6% Interest Expense 360
343 5.0% Other Income (Expense), net (180) (152) -18.4% Income
Before Income Taxes 196 420 -53.3% Provision for Income Taxes 67
159 -57.9% Segment Net Income (1) $129 $261 -50.6% * - Not
meaningful. Selected Financial and Operating Data 4Q04 4Q03 Growth
3Q04 Growth (amounts in millions, except customer data in
thousands) Segment operating income $27 $131 -79.4% $213 -87.3%
Segment operating margin 1.0% 8.4% -740 bps 12.5% -1150 bps
Cellular/PCS Operating Metrics (100% Cingular): Total Customers
49,109 24,027 104.4% 25,672 91.3% Net Customer Additions 1,713 642
166.8% 657 160.7% Partitioned Customers and/or Adjustments 21,724 0
N/M (29) N/M Churn 2.6% 2.8% -20 bps 2.8% -20 bps Wireless Service
ARPU (3) $49.22 $49.03 0.4% $49.78 -1.1% Minutes Of Use Per
Subscriber 526 475 10.7% 537 -2.0% Licensed POPs (4) 290 236 22.9%
243 19.3% Penetration (4) 17.2% 10.8% 640 bps 11.4% 580 bps
Year-To-Date 2004 2003 Growth (amounts in millions, except customer
data in thousands) Segment operating income $736 $915 -19.6%
Segment operating margin 9.5% 14.8% -530 bps Cellular/PCS Operating
Metrics (100% Cingular): Total Customers 49,109 24,027 104.4% Net
Customer Additions 3,352 2,116 58.4% Partitioned Customers and/or
Adjustments 21,730 (14) N/M Churn 2.7% 2.7% 0 bps Wireless Service
ARPU (3) $49.30 $51.32 -3.9% Minutes Of Use Per Subscriber 520 446
16.6% Licensed POPs (4) 290 236 22.9% Penetration (4) 17.2% 10.8%
640 bps PROFORMA 4Q04 4Q03 Growth 3Q04 Growth Total Revenue (40%)
3,220 3,165 1.7% 3,281 -1.9% Net Adds (100%) 1,757 736 138.7% 808
117.5% ARPU $49.67 $52.71 -5.8% $52.13 -4.7% (a) The domestic
wireless segment is comprised of BellSouth's 40% share of the
reported results of Cingular Wireless. BellSouth Corporation
Results by Segment (amounts in millions) (unaudited) Advertising
& Publishing (1) 4Q04 4Q03 Growth 3Q04 Growth Operating
Revenues Advertising and publishing revenues 475 470 1.1% 471 0.8%
Commission revenues 53 52 1.9% 27 96.3% Total Operating Revenues
528 522 1.1% 498 6.0% Operating Expenses Cost of services 94 91
3.3% 89 5.6% Selling, general, & administrative expenses 188
184 2.2% 173 8.7% Depreciation and amortization 7 7 0.0% 7 0.0%
Total Operating Expenses 289 282 2.5% 269 7.4% Segment Operating
Income 239 240 -0.4% 229 4.4% Interest Expense 2 2 0.0% 2 0.0%
Other Income (Expense), net (1) 1 -200.0% - N/M* Income Before
Income Taxes 236 239 -1.3% 227 4.0% Provision for Income Taxes 91
92 -1.1% 86 5.8% Segment Net Income(1) $145 $147 -1.4% $141 2.8%
Segment operating income $239 $240 -0.4% $229 4.4% Segment
operating margin 45.3% 46.0% -70 bps 46.0% -70 bps * - Not
meaningful. Year-To-Date 2004 2003 Growth Operating Revenues
Advertising and publishing revenues 1,878 1,906 -1.5% Commission
revenues 141 144 -2.1% Total Operating Revenues 2,019 2,050 -1.5%
Operating Expenses Cost of services 353 345 2.3% Selling, general,
& administrative expenses 684 706 -3.1% Depreciation and
amortization 28 26 7.7% Total Operating Expenses 1,065 1,077 -1.1%
Segment Operating Income 954 973 -2.0% Interest Expense 8 7 14.3%
Other Income (Expense), net - 2 -100.0% Income Before Income Taxes
946 968 -2.3% Provision for Income Taxes 363 368 -1.4% Segment Net
Income(1) $583 $600 -2.8% Segment operating income $954 $973 -2.0%
Segment operating margin 47.3% 47.5% -20 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)
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. Average monthly revenue per customer is calculated by
dividing average monthly service revenue by average customers. (3)
Management uses average revenue per unit (ARPU) as an indicator of
operating performance of the business. Consumer ARPU -- is defined
as consumer revenues during the period divided by average primary
access lines during the period. Wireless Service ARPU --
Cellular/PCS is defined as Cellular/PCS service revenues during the
period divided by average Cellular/PCS subscribers during the
period. This metric is used to compare the recurring revenue
amounts being generated on our network to prior periods and
internal targets. We believe that each of these metrics provides
useful information concerning the performance of our initiatives to
attract and retain high value customers and the use of our network.
(4) Licensed POPs refers to the number of people residing in areas
where Cingular and its partners have licenses to provide cellular
or PCS service including areas where Cingular has not yet commenced
service. Penetration calculation for 4Q04 is based on licensed
"operational" POP's of 286 million. BellSouth Corporation Non-GAAP
Measures -- Reconciliation (amounts in millions) (unaudited)
Segment Net Income Reconciliation to GAAP Net Income Year-to-Date
4Q04 4Q03 3Q04 2004 2003 Communications group segment net income
$624 $714 $714 $2,727 $2,829 Domestic wireless group segment net
income (73) 12 54 129 261 Advertising and publishing group segment
net income 145 147 141 583 600 Corporate, eliminations and other
(56) (27) (16) (80) (74) Normalized net income 640 846 893 3,359
3,616 Add back Excluded non-recurring or non-operational items (a)
831 (59) (94) 1,506 288 Consolidated GAAP net income $1,471 $787
$799 $4,865 $3,904 Free Cash Flow Year-to-Date 4Q04 4Q03 3Q04 2004
2003 Net cash provided by operating activities $1,313 $1,328 $1,691
$6,801 $7,883 Less Capital Expenditures (1,059) (948) (768) (3,193)
(2,926) Operating Free Cash Flow $254 $380 $923 $3,608 $4,957 Net
Debt December 31, December 31, September 30, 2004 2003 2004 Total
Debt $20,583 $14,980 $16,190 Less Cash (696) (4,556) (9,200) Net
Debt $19,887 $10,424 $6,990 Communications Group Operating Income
before Depreciation and Amortization Year-to-Date 4Q04 4Q03 3Q04
2004 2003 Operating Revenues $4,647 $4,618 $4,627 $18,452 $18,448
Operating Income 1,049 1,187 1,217 4,628 4,843 Add back
Depreciation and amortization 904 941 898 3,593 3,771 Operating
Income before Depreciation and Amortization $1,953 $2,128 $2,115
$8,221 $8,614 Margin 42.0% 46.1% 45.7% 44.6% 46.7% Domestic
Wireless Operating Income before Depreciation and Amortization
Year-to-Date 4Q04 4Q03 3Q04 2004 2003 Service revenues $2,511
$1,414 $1,534 $6,989 $5,689 Equipment and other revenues 322 151
168 785 504 Operating revenues 2,833 1,565 1,702 7,774 6,193
Operating Income 27 131 213 736 915 Operating Margin (Operating
income divided by operating revenues) (c) 1.0% 8.4% 12.5% 9.5%
14.8% Add back Depreciation and amortization 556 228 229 1,232 835
Operating Income before Depreciation and Amortization $583 $359
$442 $1,968 $1,750 Margin (Operating Income before Depr & Amort
divided by service revenues) (c) 23.2% 25.4% 28.8% 28.2% 30.8%
Domestic Wireless Proforma Revenue 4Q04 4Q03 3Q04 Operating Revenue
$2,833 $1,565 $1,702 Add back Proforma Adjustments (b) 387 1,600
1,579 Total Operating Revenue (Proforma) $3,220 $3,165 $3,281
Domestic Wireless Proforma ARPU 4Q04 4Q03 3Q04 Service revenues
$2,511 $1,414 $1,534 Less Mobitex data revenues 14 23 22 Add back
Proforma Adjustments (b) 352 1,469 1,412 Service revenue used to
calculate Proforma ARPU $2,849 $2,860 $2,924 ARPU (Proforma) $49.67
$52.71 $52.13 (a) See pages 3 and 4 for detail of excluded items.
(b) These adjustments are consistent in nature with those set forth
in Cingular's Form 8-K/A dated November 29, 2004. (c) Margin
calculations for our domestic wireless segment represents 40% of
Cingular's margin calculations adjusted for the related normalized
items as presented on pages 3-4. Company News On-Call:
http://www.prnewswire.com/comp/095650.html DATASOURCE: BellSouth
Corporation CONTACT: Jeff Battcher, Media Relations of BellSouth
Corporation, +1-404-249-2793; or BellSouth Investor Relations,
+1-800-241-3419 Web site: http://www.bellsouth.com/
http://www.bellsouth.com/investor
Copyright
Bellsouth (NYSE:BLS)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Bellsouth (NYSE:BLS)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024