2nd Quarter Results

Bellsouth Corp
23 July 2003

For Immediate Release

July 23, 2003

For More Information Contact:

Jeff Battcher, Media Relations at 404-249-2793

BellSouth Investor Relations at 800-241-3419



                   BellSouth Reports Second Quarter Earnings

      • 2.8 million long distance customers
      • 2.1 million BellSouth AnswersSM packages
      • 540,000 Cingular Wireless net additional customers



ATLANTA - BellSouth Corporation (NYSE: BLS) reported earnings per share (EPS) of
51 cents in the second quarter of 2003. This compared to 14 cents per share in
the second quarter of 2002, which reflected special charges totaling 38 cents
per share for foreign currency transaction losses, pension/severance costs, and
losses on equity investments.

Consolidated revenues were $5.6 billion compared to $5.8 billion in the second
quarter of 2002. Consolidated operating expenses were $4.2 billion compared to
$4.6 billion in the same quarter of 2002. Net income was $951 million compared
to $263 million in the same quarter a year ago.

Operating free cash flow (defined as cash flow from operations less capital
expenditures) was $1.8 billion. In June BellSouth's Board of Directors declared
a 9.5 percent increase in the quarterly common stock dividend, payable August 1,
2003. Over the last five quarters, the company has increased dividends 21
percent. Capital expenditures in the second quarter of 2003 were $729 million
for a total of $1.4 billion year-to-date, a reduction of 32.9 percent compared
to $2.0 billion in the first half of 2002. BellSouth reduced total debt by $1.2
billion during the second quarter, and has cut total debt by $2.0 billion, or
11.4 percent, since the first of the year.

In accordance with Generally Accepted Accounting Principles (GAAP), consolidated
revenues and consolidated operating expenses do not include BellSouth's 40
percent share of Cingular Wireless. Normalized total operating revenues, which
include Cingular, were $7.1 billion, a decline of 2.0 percent versus the second
quarter of 2002. Normalized for special items, detailed below, net income was
$971 million, compared to $975 million in the same quarter a year ago.
Normalized EPS in the second quarter of 2003 was 52 cents, equal to normalized
EPS of 52 cents in the same quarter a year ago.



Communications Group

Long distance and DSL high-speed Internet service boosted Communications Group
results during the second quarter of 2003 with long distance customers totaling
2.8 million and DSL customers totaling 1.2 million. In addition, BellSouth
AnswersSM packages, which combine local, long distance, Internet services and
wireless all on one bill, increased to 2.1 million.

Throughout second quarter, packages fueled retention and reacquisition of
residential and small business customers. The April introduction of the newest
residential package, BellSouth Unlimited AnswersSM contributed to the
significant growth in package customers in the quarter. Unlimited Answers allows
customers to call anywhere in the United States anytime for a flat monthly fee.
BellSouth continued its success in retaining small and medium-sized businesses
by packaging voice and data services with term contracts.

Competing in long distance throughout its markets since the first of the year,
BellSouth added 856,000 net long distance customers in the second quarter and
now serves a total of 2.8 million customers. These customers included
approximately 19 percent of the company's residence and approximately 29 percent
of its mass-market, small business accounts.

BellSouth added 103,000 net DSL customers for a total of 1.2 million at
quarter-end. In July, the company announced BellSouth FastAccess(R) DSL Lite, a
tiered approach to broadband so that customers can choose the speed and price
point that matches their Internet use. With this approach, BellSouth reduced the
entry price point for a new segment of broadband users.

Communications Group results continued to be impacted by the lingering weak
economy, competition and technology substitution. Communications Group revenues
were $4.6 billion compared to $4.7 billion in the second quarter of 2002, a
decline of 1.8 percent. Residence and business access lines served by BellSouth
competitors under UNE-P (unbundled network elements-platform) increased 249,000
in the second quarter. Total data revenues of $1.1 billion were essentially even
with second quarter a year ago, and included retail data revenue growth of 11.5
percent, driven primarily by DSL. Total operating expenses were $3.4 billion,
level with the same quarter of the previous year.



Domestic Wireless / Cingular

In the second quarter, Cingular's cellular and PCS customer additions were
strong. Total net customer additions were 540,000 compared to net additions of
189,000 customers in the first three months of 2003. Channel sales of Cingular's
parent companies, BellSouth and SBC Communications, were significant
contributors to growth at the nation's No. 2 wireless company. Postpaid customer
net additions of 399,000 were particularly strong.

BellSouth's share of Cingular's revenues was $1.5 billion, a gain of $14 million
compared to the same quarter a year ago. BellSouth's share of Cingular operating
income was $303 million, 4.5 percent higher than the same quarter last year.
Driven by improved cost structure and lower churn of 2.5 percent, EBITDA margin
improved to 35.8 percent from 33.8 percent in second quarter 2002.

As of June 2003, Cingular's GSM / GPRS network covered approximately 66 percent
of potential customers, and the company is on target to achieve over 90 percent
coverage by the end of the year. In addition, Cingular announced the world's
first commercial deployment of wireless services using Enhanced Datarate for
Global Evolution (EDGE) technology in Indianapolis.



Latin America Group

On a consolidated basis, Latin America Group wireless customers increased
377,000 during the second quarter, continuing the trend of organic growth.
Year-over-year, customers increased by 1.1 million or 13.8 percent. BellSouth
and its partners serve a total of 11.4 million customers in 11 Central and South
American countries.

Consolidated Latin America revenues were $565 million in the second quarter of
2003, a decline of 5.5 percent compared to the same three months of the previous
year. Year-over-year, revenues continued to reflect the impacts of currency
devaluations, principally in Venezuela, where the local currency is down in
excess of 50 percent from early 2002 levels in relation to the U.S. dollar. For
the second quarter, Latin America Group net income was $41 million, generating
positive operating free cash flow.



Advertising & Publishing

Advertising & Publishing revenues were $525 million in the second quarter of
2003, a decrease of 7.9 percent compared to the same quarter a year ago
resulting in part from the soft economy and competition. Operating income of
$252 million was 2.0 percent greater than second quarter of 2002, primarily the
result of improvements in uncollectibles expense.



Special Items

In the second quarter of 2003, the difference between reported (GAAP) EPS of 51
cents and normalized EPS of 52 cents is the result of three special items:
Foreign currency transaction gains            4 cents         Gain
Sale of interest in BSE                       4 cents         Charge
Pension/severance costs                       1 cent          Charge
Total of special items                        1 cent          Charge

Foreign currency transaction gains - Primarily associated with the remeasurement
of U.S. dollar-denominated liabilities in Latin America.

Sale of interest in BSE - The previously announced sale of BellSouth's entire
interest in BSE, a wireless property in Northeastern Brazil, closed on May 8,
2003. The sale resulted in cash proceeds to BellSouth of $20 million.

Pension/severance costs - This charge represents the net severance related costs
recorded in the second quarter associated with workforce reductions, and pension
settlement losses associated with workforce reductions.



About BellSouth Corporation

BellSouth Corporation is a Fortune 100 communications services company
headquartered in Atlanta, Georgia, serving more than 44 million customers in the
United States and 14 other countries.

Consistently recognized for customer satisfaction, BellSouth provides a full
array of broadband data solutions to large, medium and small businesses. In the
residential market, BellSouth offers DSL high-speed Internet access, advanced
voice features and other services. BellSouth also offers long distance service
throughout its markets, serving both business and residential customers. The
company's BellSouth AnswersSM package combines local and long distance service
with an array of calling features; wireless data, voice and e-mail services; and
high-speed DSL or dial-up Internet service. BellSouth also provides online and
directory advertising services through BellSouth(R) RealPages.comSM and The Real
Yellow Pages(R).

BellSouth owns 40 percent of Cingular Wireless, the nation's second largest
wireless company, which provides innovative data and voice services.

Further information about BellSouth's second 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 will be BellSouth CFO Ron Dykes and Investor Relations Vice
President Nancy Davis. 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 July 30. The replay can be accessed by dialing:

Domestic: 800-642-1687 - Reservation number: 521870

International: 706-645-9291 - Reservation number: 521870

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 domestic or international markets where we operate or
have material investments which would affect demand for our services; (ii)
currency devaluations and continued economic weakness in certain international
markets in which we operate or have material investments; (iii) the intensity of
competitive activity and its resulting impact on pricing strategies and new
product offerings; (iv) higher than anticipated cash requirements for
investments, new business initiatives and acquisitions; (v) unfavorable
regulatory actions and (vi) 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 Web site, 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.
                                                                                            Year-to-Date
                                           2Q03     2Q02    Growth    1Q03    Growth         2003       2002    Growth
Operating Revenues
    Communications group                  $ 4,545  $ 4,631    -1.9%  $ 4,508     0.8%         $ 9,053  $ 9,276    -2.4%
    Latin America                             563      597    -5.7%      509    10.6%           1,072    1,253   -14.4%
    Advertising and publishing                520      538    -3.3%      494     5.3%           1,014      754    34.5%
    All other                                  14       14     0.0%       12    16.7%              26       31   -16.1%
         Total Operating Revenues           5,642    5,780    -2.4%    5,523     2.2%          11,165   11,314    -1.3%
Operating Expenses
    Cost of services and products           2,008    1,922     4.5%    1,933     3.9%           3,941    3,839     2.7%
    Selling, general & administrative       1,133    1,132     0.1%    1,052     7.7%           2,185    2,219    -1.5%
    expenses
    Depreciation and amortization           1,046    1,170   -10.6%    1,038     0.8%           2,084    2,331   -10.6%
    Provision for restructuring and            20      357     N/M*      121      N/M             141      357      N/M
    asset impairments
         Total Operating Expenses           4,207    4,581    -8.2%    4,144     1.5%           8,351    8,746    -4.5%
Operating Income                            1,435    1,199    19.7%    1,379     4.1%           2,814    2,568     9.6%
Interest Expense                              249      301   -17.3%      296   -15.9%             545      605    -9.9%
Other Income (Expense), net                   287    (240)      N/M      306      N/M             593      579      N/M
Income Before Taxes and Accounting          1,473      658   123.9%    1,389     6.0%           2,862    2,542    12.6%
Change
Provision for Income Taxes                    522      395    32.2%      474    10.1%             996    1,148   -13.2%
Income Before Cumulative Effect Change        951      263   261.6%      915     3.9%           1,866    1,394    33.9%
Cumulative Effect of Change in                  -        -      N/M      315      N/M             315  (1,285)      N/M
Accounting Principle
         Net Income                          $951     $263   261.6%   $1,230   -22.7%          $2,181     $109  1900.9%
Diluted:
    Weighted Average Common Shares          1,851    1,882    -1.6%    1,860    -0.5%           1,855    1,885    -1.6%
    Outstanding
    Earnings Per Share                      $0.51    $0.14   264.3%    $0.66   -22.7%           $1.18    $0.06  1866.7%
* - Not meaningful.
Selected Financial and Operating Data
EBITDA (4)                                 $2,481   $2,369     4.7%   $2,417     2.6%          $4,898   $4,899     0.0%
EBITDA margin (5)                           44.0%    41.0%  300 bps    43.8%   20 bps           43.9%    43.3%   60 bps
Declared dividends per share                $0.23    $0.20    15.0%    $0.21     9.5%           $0.44    $0.39    12.8%
Capital expenditures                         $729   $1,023   -28.7%     $631    15.5%          $1,360   $2,028   -32.9%
Common shares outstanding                   1,847    1,873    -1.4%    1,847     0.0%
Book value per share                       $10.32    $9.58     7.7%    $9.96     3.6%
Debt ratio                                  44.6%    50.1% -550 bps    47.4% -280 bps
Total employees                            75,779   84,617   -10.4%   76,797    -1.3%


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.
Certain reclassifications have been made to prior periods to conform to the current presentation.

                                             2Q03     2Q02     Growth     1Q03    Growth      2003      2002    Growth
Operating Revenues
    Communications group                    $ 4,504   $ 4,586     -1.8%   $ 4,469    0.8%     $ 8,973   $ 9,200   -2.5%
    Domestic wireless                         1,514     1,500      0.9%     1,436    5.4%       2,950     2,917    1.1%
    Latin America                               563       597     -5.7%       509   10.6%       1,072     1,253  -14.4%
    Advertising and publishing                  520       565     -8.0%       494    5.3%       1,014     1,071   -5.3%
    All other                                    14        13      7.7%        12   16.7%          26        30  -13.3%
         Total Operating Revenues             7,115     7,261     -2.0%     6,920    2.8%      14,035    14,471   -3.0%
Operating Expenses
    Cost of services and products             2,471     2,373      4.1%     2,364    4.5%       4,835     4,749    1.8%
    Selling, general, & administrative        1,637     1,680     -2.6%     1,537    6.5%       3,174     3,300   -3.8%
    expenses
    Depreciation and amortization             1,249     1,352     -7.6%     1,233    1.3%       2,482     2,693   -7.8%
         Total Operating Expenses             5,357     5,405     -0.9%     5,134    4.3%      10,491    10,742   -2.3%
Operating Income                              1,758     1,856     -5.3%     1,786   -1.6%       3,544     3,729   -5.0%
Interest Expense                                313       362    -13.5%       364  -14.0%         677       721   -6.1%
Other Income (Expense), net                      61        49      N/M*        39     N/M         100       128     N/M
Income Before Income Taxes                    1,506     1,543     -2.4%     1,461    3.1%       2,967     3,136   -5.4%
Provision for Income Taxes                      535       568     -5.8%       520    2.9%       1,055     1,123   -6.1%
         Net Income                            $971      $975     -0.4%      $941    3.2%      $1,912    $2,013   -5.0%
Diluted:
    Weighted Average Common Shares            1,851     1,882     -1.6%     1,860   -0.5%       1,855     1,885   -1.6%
    Outstanding
    Earnings Per Share                        $0.52     $0.52      0.0%     $0.51    2.0%       $1.03     $1.07   -3.7%
* - Not meaningful.
Selected Financial and Operating Data
EBITDA                                       $3,007    $3,208     -6.3%    $3,019   -0.4%      $6,026    $6,422   -6.2%
(4)
EBITDA margin (5)                             42.3%     44.2%  -190 bps     43.6%    -130       42.9%     44.4%    -150
                                                                                      bps                           bps
Dividends per share                           $0.23     $0.20     15.0%     $0.21    9.5%       $0.44     $0.39   12.8%
Capital expenditures                           $729    $1,023    -28.7%      $631   15.5%      $1,360    $2,028  -32.9%
Common shares outstanding                     1,847     1,873     -1.4%     1,847    0.0%
Book value per share                         $10.32     $9.58      7.7%     $9.96    3.6%
Debt ratio                                    44.6%     50.1%  -550 bps     47.4%    -280
                                                                                      bps
Total employees                              75,779    84,617    -10.4%    76,797   -1.3%


BellSouth
Corporation

Normalized Earnings Summary and
Reconciliation to Reported Results
(amounts in millions,
except per share data)

Second Quarter                      Normalizing
2003                                   Items
                                             FX    Pension/    Sale of
                                           Losses
                                  Cingular (Gains) Severance  Brazil NE
                           GAAP      A        F        J          K      Normalized
Operating                 $ 5,642  $ 1,473     $ -       $ -         $ -    $ 7,115
Revenues
Operating                   4,207    1,170       -      (20)           -      5,357
Expenses
Operating                   1,435      303       -        20           -      1,758
Income
Interest                      249       64       -         -           -        313
Expense
Other Income (Expense),       287    (235)    (66)         -          75         61
net
Income Before Taxes and     1,473        4    (66)        20          75      1,506
Accounting Change
Provision for Income          522        4     (1)         8           2        535
Taxes
Net Income Before             951        -    (65)        12          73        971
Cumulative Effect Change
Cumulative Effect of            -        -       -         -           -          -
Change in Accounting
Principle
Net Income                   $951       $0   ($65)       $12         $73       $971
Diluted Earnings Per        $0.51    $0.00 ($0.04)     $0.01       $0.04      $0.52
Share
EBITDA (4)                  2,481      506       -        20           -      3,007

Year-to-Date                        Normalizing
2003                                   Items
                                             FX       A&P                 Pension/   Sale of
                                           Losses
                                  Cingular (Gains)  Acctg.     FAS 143   Severance  Brazil NE
                                                    Change
                           GAAP      A        F        G          I          J          K      Normalized
Operating                 $11,165  $ 2,870     $ -       $ -         $ -        $ -        $ -   $ 14,035
Revenues                   
Operating                   8,351    2,281       -         -           -      (141)          -     10,491
Expenses
Operating                   2,814      589       -         -           -        141          -      3,544
Income
Interest                      545      132       -         -           -          -          -        677
Expense
Other Income (Expense),       593    (452)   (116)         -           -          -         75        100
net
Income Before Taxes and     2,862        5   (116)         -           -        141         75      2,967
Accounting Change
Provision for Income          996        5     (3)         -           -         55          2      1,055
Taxes
Net Income Before           1,866        -   (113)         -           -         86         73      1,912
Cumulative Effect Change
Cumulative Effect of          315        -       -       501       (816)          -          -          -
Change in Accounting
Principle
Net Income                  2,181       $0  ($113)      $501      ($816)        $86        $73     $1,912
Diluted Earnings Per        $1.18    $0.00 ($0.06)     $0.27     ($0.44)      $0.05      $0.04      $1.03
Share *
EBITDA (4)                  4,898      987       -         -           -        141          -      6,026

* Normalized earnings per share for year-to-date
2003 does not sum due to rounding.

Second Quarter                      Normalizing
2002                                   Items
                                           Losses  FX Losses     A&P      Pension/
                                             on
                                  Cingular Equity   (Gains)    Acctg.    Severance
                                           Invest.             Change
                           GAAP      A        C        F          G          J      Normalized
Operating                 $ 5,780  $ 1,455     $ -       $ -        $ 26        $ -    $ 7,261
Revenues
Operating                   4,581    1,167       -         -          14      (357)      5,405
Expenses
Operating                   1,199      288       -         -          12        357      1,856
Income
Interest                      301       61       -         -           -          -        362
Expense
Other Income (Expense),     (240)    (227)     158       358           -          -         49
net
Income Before Taxes and       658        -     158       358          12        357      1,543
Accounting Change
Provision for Income          395        -      34         3           4        132        568
Taxes
Net Income Before             263        -     124       355           8        225        975
Cumulative Effect Change
Cumulative Effect of            -        -       -         -           -          -          -
Change in Accounting
Principle
Net Income                    263       $0    $124      $355          $8       $225       $975
Diluted                     $0.14    $0.00   $0.07     $0.19       $0.00      $0.12      $0.52
Earnings Per
Share
EBITDA (4)                  2,369      470       -         -          12        357      3,208

Year-to-Date             Normalizing
2002                       Items
                                     Losses on   Brazil Loan  Unbilled  FX Losses     A&P            Pension/
                    Cingular   E-Plus   Equity   Impairments Rec. Adj.   (Gains)     Acctg.    FAS   Severance
                                        Invest.                                      Change    142
                 GAAP      A        B        C          D          E          F          G        H        J  Normalized
Operating    $ 11,314 $ 2,841     $ -       $ -         $ -      $ 163        $ -      $ 153    $ -       $ -   $ 14,471
Revenues       
Operating       8,746   2,287       -         -           -          -          -         66      -     (357)     10,742
Expenses
Operating       2,568     554       -         -           -        163          -         87      -       357      3,729
Income
Interest          605     116       -         -           -          -          -          -      -         -        721
Expense
Other 
Income 
(Expense),        579    (438) (1,339)       388         383          -        555          -      -        -        128
net
Income 
Before 
Taxes and       2,542        - (1,339)       388         383        163        555         87      -      357      3,136
Accounting 
Change
Provision 
for Income      1,148        -   (482)       114         120         62        (4)         33      -      132      1,123
Taxes
Net Income 
Before          1,394        -   (857)       274         263        101        559         54      -      225      2,013
Cumulative 
Effect 
Change
Cumulative 
Effect of      (1,285)        -       -         -           -          -          -          -  1,285       -          -
Change in 
Accounting
Principle
Net Income        109       $0  ($857)      $274        $263       $101       $559        $54 $1,285     $225     $2,013
Diluted 
Earnings Per    $0.06    $0.00 ($0.45)     $0.15       $0.14      $0.05      $0.30      $0.03  $0.68    $0.12      $1.07
Share *
EBITDA (4)      4,899      916       -         -           -        163          -         87      -      357      6,422

* Normalized earnings per share for year-to-date
2002 does not sum due to rounding.


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 proportional eliminations for amounts charged by other BellSouth companies to Cingular.
(b) 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.
(c) Losses on equity investments - Represents charges for the impairment of and open market sales of an equity
    investment in Qwest Communications. Second quarter 2002 and year-to-date 2002 also include $63 impairment related to
    an investment in Guatemala and $6 in losses for the liquidation of an investment in Crown Castle.
(d) 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.
(e) 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.
(f) Foreign currency transaction (gains) losses - Represents net transaction (gains) losses incurred by our Latin
    American operations related primarily to US Dollar denominated liabilities. These (gains) losses reflect the impact
    of the (strengthening) weakening of those operations' local currencies against the U.S. Dollar which requires
    recognition in the current period income statement.
(g) 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. The 2002 amounts reflect our recasting
    of prior year results to present the advertising and publishing segment on a comparable basis year-over-year.
(h) Adoption of Financial Accounting Standard No. 142 (FAS 142) - Represents a one-time charge related to the adoption
    of new accounting rules for goodwill. The non-cash charge reduced the value of goodwill on the company's balance
    sheet by approximately $1.3 billion.
(i) 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.
(j) Pension/Severance Costs - For the periods presented severance relates to accruals recorded to reflect workforce
    reductions in an effort to reduce operating costs. The accruals include cash severance, outplacement costs and
    payroll taxes. For 2003, these costs include $33 of severance related costs. During 2003, the number of employees
    who separated and elected to receive lump-sum retirement benefits exceeded thresholds that require current
    recognition of deferred losses related to these benefits.
(k) Loss on sale of Brazil NE.


BellSouth Corporation
Consolidated Balance Sheets (unaudited)
(amounts in millions, except per share data)
                                                         June 30, December 31,    Change vs.     March 31,   Change vs.
                                                             2003         2002      Prior Year       2003        Prior
                                                                                                                Quarter
Assets
Current Assets:
    Cash and cash equivalents                               $4,122       $2,482        $1,640       $2,442       $1,680
    Accounts receivable, net of allowance for                2,999        4,129       (1,130)        3,102        (103)
    uncollectibles of $492, $476, and $465
    Material and supplies                                      312          313           (1)          323         (11)
    Other current assets                                     1,029          938            91        1,213        (184)
         Total Current Assets                                8,462        7,862           600        7,080        1,382
Investments and Advances                                     8,283        9,741       (1,458)        9,941      (1,658)
Property, Plant and Equipment, net                          24,047       23,445           602       24,340        (293)
Deferred Charges and Other Assets                            5,757        5,726            31        5,690           67
Goodwill                                                       346          347           (1)          344            2
Intangible Assets, net                                       2,356        2,358           (2)        2,323           33
Total Assets                                               $49,251      $49,479        ($228)      $49,718       ($467)
Liabilities and Shareholders' Equity
Current Liabilities:
    Debt maturing within one year                           $3,694       $5,114      ($1,420)       $4,428       ($734)
    Accounts payable                                         1,344        1,572         (228)        1,458        (114)
    Other current liabilities                                3,421        2,897           524        3,134          287
         Total Current Liabilities                           8,459        9,583       (1,124)        9,020        (561)
Long-Term Debt                                              11,718       12,283         (565)       12,216        (498)
Noncurrent Liabilities:
    Deferred income taxes                                    5,109        4,452           657        4,882          227
    Other noncurrent liabilities                             4,908        5,255         (347)        5,207        (299)
         Total Noncurrent Liabilities                       10,017        9,707           310       10,089         (72)
Shareholders' Equity:
    Common stock, $1 par value                               2,020        2,020             0        2,020            0
    Paid-in capital                                          7,620        7,546            74        7,562           58
    Retained earnings                                       15,744       14,531         1,213       15,342          402
    Accumulated other comprehensive income                   (779)        (740)          (39)        (859)           80
    Shares held in trust and treasury                      (5,503)      (5,372)         (131)      (5,637)          134
    Guarantee of ESOP debt                                    (45)         (79)            34         (35)         (10)
         Total Shareholders' Equity                         19,057       17,906         1,151       18,393          664
Total Liabilities and Shareholders' Equity                 $49,251      $49,479        ($228)      $49,718       ($467)


BellSouth Corporation
Consolidated Statements of Cash Flows
(unaudited)
(amounts in millions, except per share data)
                                                                              Year-To-Date
                                                  2Q03     2Q02     1Q03          2003       2002
Cash Flows from Operating Activities:
Net income                                         $ 951    $ 263  $ 1,230         $ 2,181    $ 109
Adjustments to net income:
    Depreciation and amortization                  1,046    1,170    1,038           2,084    2,331
    Provision for uncollectibles                     138      261      168             306      420
    Net losses (earnings) of equity                (179)    (112)    (174)           (353)      125
    affiliates
    Minority interests in income of                   20        4      (8)              12     (77)
    subsidiaries
    Deferred income taxes                            229      180      459             688      777
    Net (gains) losses on sale or impairment           8      152        -               8      388
    of equity securities
    Pension income                                 (133)    (205)    (134)           (267)    (410)
    Pension settlement (gains) losses                 20        -       67              87        -
    Curtailment and termination benefits               -       60        -               -       60
    charges
    Stock-based compensation                          36       51       31              67       92
    Unbilled receivable adjustment                     -        -        -               -      163
    Foreign currency transaction (gains)            (99)      355     (45)           (144)      645
    losses
    Cumulative effect of change in                     -        -    (539)           (539)    1,285
    accounting principle
    (Gain) loss on sale/disposal of                   75        -        -              75  (1,335)
    operations
Net change in:
    Accounts receivable and other current            120    (114)    (121)             (1)       77
    assets
    Accounts payable and other current               197      194     (86)             111    (285)
    liabilities
    Deferred charges and other assets                 39     (65)       75             114     (44)
    Other liabilities and deferred credits            18       38     (57)            (39)        -
Other reconciling items, net                          32    (104)        4              36    (128)
Net cash provided by operating activities          2,518    2,128    1,908           4,426    4,193
Cash Flows from Investing Activities:
Capital expenditures                               (729)  (1,023)    (631)         (1,360)  (2,028)
Investments in and advances to equity                  -      (1)        -               -      (7)
affiliates
Proceeds from sale of securities and                  46      120       35              81    1,454
operations
Proceeds from repayment of loans and               1,899        -        -           1,899      426
advances
Settlement of derivatives on advances              (352)       85        -           (352)       85
Other investing activities, net                      (5)     (16)     (24)            (29)     (20)
Net cash provided by (used for) investing            859    (835)    (620)             239     (90)
activities
Cash Flows from Financing Activities:
Net borrowing (repayments) of short-term           (179)    (431)    (202)           (381)  (1,393)
debt
Proceeds from long-term debt                           -        4        1               1        8
Repayments of long-term debt                     (1,072)    (558)    (514)         (1,586)    (568)
Dividends paid                                     (388)    (356)    (371)           (759)    (713)
Purchase of treasury shares                         (67)    (189)    (255)           (322)    (189)
Other financing activities, net                        9       18       13              22        2
Net cash used for financing activities           (1,697)  (1,512)  (1,328)         (3,025)  (2,853)
Net Increase (Decrease) in Cash and Cash           1,680    (219)     (40)           1,640    1,250
Equivalents
Cash and Cash Equivalents at Beginning of          2,442    2,061    2,482           2,482      592
Period
Cash and Cash Equivalents at End of Period       $ 4,122  $ 1,842  $ 2,442         $ 4,122  $ 1,842


BellSouth Corporation
Results by Segment (amounts in
millions) (unaudited)
Communications Group (1)
                                                                                          Year-To-Date
                                          2Q03     2Q02    Growth     1Q03    Growth          2003       2002    Growth
Operating Revenues
    Voice                               $3,175   $3,132      1.4%   $3,131      1.4%          $6,306   $6,309      0.0%
    Data                                 1,064    1,067     -0.3%    1,090     -2.4%           2,154    2,159     -0.2%
    Other                                  347      472    -26.5%      355     -2.3%             702      885    -20.7%
          Total Operating Revenues       4,586    4,671     -1.8%    4,576      0.2%           9,162    9,353     -2.0%
Operating Expenses
    Cost of services and products        1,712    1,637      4.6%    1,625      5.4%           3,337    3,255      2.5%
    Selling, general, &                    768      748      2.7%      764      0.5%           1,532    1,474      3.9%
    administrative expenses
    Depreciation and amortization          944    1,042     -9.4%      937      0.7%           1,881    2,074     -9.3%
          Total Operating Expenses       3,424    3,427     -0.1%    3,326      2.9%           6,750    6,803     -0.8%
Segment Operating Income                 1,162    1,244     -6.6%    1,250     -7.0%           2,412    2,550     -5.4%
Interest Expense                           101      120    -15.8%      118    -14.4%             219      245    -10.6%
Other Income (Expense), net                 18      (3)      N/M*        3       N/M              21      (3)       N/M
Income Before Income Taxes               1,079    1,121     -3.7%    1,135     -4.9%           2,214    2,302     -3.8%
Provision for Income Taxes                 400      419     -4.5%      426     -6.1%             826      865     -4.5%
          Segment Net Income(1)           $679     $702     -3.3%     $709     -4.2%          $1,388   $1,437     -3.4%
* - Not meaningful.

Selected Financial and Operating Data

(amounts in millions)
Segment EBITDA (4)                      $2,106   $2,286     -7.9%   $2,187     -3.7%          $4,293   $4,624     -7.2%
Segment EBITDA margin (5)                45.9%    48.9%  -300 bps    47.8%  -190 bps           46.9%    49.4%  -250 bps
Data service revenues                   $1,064   $1,067     -0.3%   $1,090     -2.4%          $2,154   $2,159     -0.2%
Long distance revenues                    $309     $213     45.1%     $264     17.0%            $573     $418     37.1%
Access minutes of use                   23,053   25,073     -8.1%   22,795      1.1%          45,848   50,656     -9.5%
Capital expenditures                      $665     $918    -27.6%     $566     17.5%          $1,231   $1,840    -33.1%
IntraLata Toll Messages                     87       97    -10.3%       91     -4.4%             178      193     -7.8%
Wholesale Lines (thousands)              2,730    2,070     31.9%    2,549      7.1%
DSL customers (thousands)                1,225      803     52.6%    1,122      9.2%
LD customers (thousands)                 2,786      147       N/M    1,930     44.4%


BellSouth Corporation
Results by Segment (unaudited)
Supplemental Operating Data (in thousands)
Communications Group - Network Access Lines In Service(a)(b)

                                                 2Q03      2Q02     Growth    1Q03     Growth
Access lines (b)
    Residence
         Retail
              Primary                             12,852    13,676    -6.0%    13,132    -2.1%
              Additional                           1,758     2,101   -16.3%     1,849    -4.9%
              Total Retail                        14,610    15,777    -7.4%    14,981    -2.5%
              Residence
         Wholesale
              Resale                                 238       402   -40.8%       297   -19.9%
              UNE-P                                1,369       586   133.6%     1,155    18.5%
              Total Wholesale                      1,607       988    62.7%     1,452    10.7%
              Residence
    Total Residence                               16,217    16,765    -3.3%    16,433    -1.3%
    Business
         Retail
              Voice                                5,542     5,887    -5.9%     5,621    -1.4%
              ISDN                                 1,504     1,630    -7.7%     1,581    -4.9%
              Total Retail                         7,046     7,517    -6.3%     7,202    -2.2%
              Business
         Wholesale
              Resale                                  81       130   -37.7%        83    -2.4%
              UNE-P                                  640       532    20.3%       619     3.4%
              Total Wholesale                        721       662     8.9%       702     2.7%
              Business
    Total Business                                 7,767     8,179    -5.0%     7,904    -1.7%
    Other Retail / Wholesale                         166       194   -14.4%       174    -4.6%
    Lines
    Total Access Lines in Service                 24,150    25,138    -3.9%    24,511    -1.5%
Access Line Equivalents (c)
    Selected digital data
    services:
              Unbundled Loops                        359       398    -9.8%       367    -2.2%
              DS0 & ADSL                           7,646     5,142    48.7%     7,052     8.4%
              DS1                                  7,000     6,721     4.2%     6,936     0.9%
              DS3 & higher                        31,672    30,505     3.8%    32,294    -1.9%
    Total digital data lines in                   46,677    42,766     9.1%    46,649     0.1%
    service
Total equivalent access lines in                  70,827    67,904     4.3%    71,160    -0.5%
service
(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 (converted
    at 1.5:1), Primary Rate ISDN (converted at 24:1) 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
                                         2Q03      2Q02    Growth     1Q03    Growth         2003       2002    Growth
Operating Revenues
      Service revenues (3)                $1,412   $1,398      1.0%   $1,338      5.5%         $2,750   $2,724     1.0%
      Equipment and other revenues           102      102      0.0%       98      4.1%            200      193     3.6%
             Total Operating Revenues      1,514    1,500      0.9%    1,436      5.4%          2,950    2,917     1.1%
Operating Expenses
      Cost of services and products          501      478      4.8%      468      7.1%            969      929     4.3%
      Selling, general, & administrative     507      550     -7.8%      487      4.1%            994    1,070    -7.1%
      expenses
      Depreciation and amortization          203      182     11.5%      195      4.1%            398      362     9.9%
             Total Operating Expenses      1,211    1,210      0.1%    1,150      5.3%          2,361    2,361     0.0%
Segment Operating Income                     303      290      4.5%      286      5.9%            589      556     5.9%
Interest Expense                              92       88      4.5%       90      2.2%            182      178     2.2%
Other Income (Expense), net                  (39)     (43)      N/M*     (31)       N/M           (70)     (68)      N/M
Income Before Income Taxes                   172      159      8.2%      165      4.2%            337      310     8.7%
Provision for Income Taxes                    68       60     13.3%       64      6.3%            132      119    10.9%
             Segment Net Income(1)          $104      $99      5.1%     $101      3.0%           $205     $191     7.3%
* - Not meaningful.
Selected Financial and Operating Data
(amounts in millions, except customer
data in thousands)
Segment EBITDA (4)                          $506     $472      7.2%     $481      5.2%           $987     $918     7.5%
Segment EBITDA margin (5)(c)               35.8%    33.8%   200 bps    35.9%   -10 bps          35.9%    33.7%  220 bps
Cellular/PCS:
      Total Cellular/PCS Customers         9,056    8,873      2.1%    8,846      2.4%          9,056    8,873     2.1%
      Net Customer Additions - Cellular/     216      141     53.2%       76    184.2%            292      235    24.3%
      PCS
      Partitioned Customers and/or             6        0       N/M        0       N/M              6        0      N/M
      Adjustments
      Churn - Cellular/PCS                  2.5%     2.7%   -20 bps     2.6%   -10 bps           2.6%     2.8%  -20 bps
      Wireless Service ARPU - Cellular/   $51.80   $52.11     -0.6%   $50.04      3.5%         $50.93   $51.28    -0.7%
      PCS
      Wireless Subscriber ARPU - Cellular $48.87   $48.71      0.3%   $47.38      3.1%         $48.13   $48.04     0.2%
      /PCS
      Minutes Of Use Per Cellular/PCS        445      398     11.8%      405      9.9%            425      377    12.7%
      Subscriber
      Licensed POPs - Cellular/PCS (b)        94       88      6.8%       94      0.0%             94       88     6.8%
      Penetration - Cellular/PCS (b)        10.2%    11.2%  -100 bps    10.0%    20 bps          10.2%    11.2% -100 bps
Interactive:
      Total Cingular Interactive             315      315      0.0%      334     -5.7%            315      315     0.0%
      Customers
      Net Customer Additions - Cingular     (19)        9       N/M        7       N/M           (12)       21      N/M
      Interactive
(a)   The domestic wireless segment is comprised of BellSouth's 40% share of the
      reported results of Cingular Wireless.
(b)   POPs includes New York spectrum added in a swap with T-Mobile beginning 2Q01, Salt Lake City
      beginning 4Q01, and Salmon beginning 1Q03. The New York
      spectrum is included in the penetration calculation beginning 3Q02. The Salt Lake City and Salmon
      spectrum are not yet operational and are not factored into
      the penetration calculation.
(c)   Segment EBITDA margin denominator includes
      service revenues only.


BellSouth Corporation
Results by Segment (amounts in millions)
(unaudited)
Latin America Group (1)(2)
                                                                                          Year-To-Date
                                              2Q03     2Q02   Growth   1Q03    Growth         2003       2002    Growth
Operating Revenues
     Service revenues (3)                       $471     $501   -6.0%    $432     9.0%            $903   $1,063   -15.1%
     Equipment and other revenues                 94       78   20.5%      77    22.1%             171      172    -0.6%
     Advertising and publishing revenues           -       19 -100.0%       -     0.0%               -       22  -100.0%
         Total Operating Revenues                565      598   -5.5%     509    11.0%           1,074    1,257   -14.6%
Operating Expenses
     Cost of services and products               243      230    5.7%     258    -5.8%             501      496     1.0%
     Selling, general, & administrative          154      174  -11.5%     136    13.2%             290      390   -25.6%
     expenses
     Depreciation and amortization                93      118  -21.2%      90     3.3%             183      236   -22.5%
         Total Operating Expenses                490      522   -6.1%     484     1.2%             974    1,122   -13.2%
Segment Operating Income                          75       76   -1.3%      25   200.0%             100      135   -25.9%
Interest Expense                                  22       35  -37.1%      43   -48.8%              65       75   -13.3%
Other Income (Expense), net                      (7)     (14)    N/M*       4      N/M             (3)     (29)      N/M
Income Before Income Taxes                        46       27     N/M    (14)      N/M              32       31      N/M
Provision for Income Taxes                         5       15     N/M    (24)      N/M            (19)       16      N/M
         Segment Net Income(1)                   $41      $12     N/M     $10      N/M             $51      $15      N/M
* - Not meaningful.
Selected Financial and Operating Data
(amounts in millions, except customer data
in thousands)
Segment EBITDA (4)                              $168     $194  -13.4%    $115    46.1%            $283     $371   -23.7%
Segment EBITDA margin (5)                      29.7%    32.4%    -270   22.6%  710 bps           26.4%    29.5% -310 bps
                                                                  bps
Average monthly revenue per customer (3)         $18      $20  -10.0%     $17     5.9%             $18      $22   -18.2%
Customer net adds in period (excluding           377     (68) -654.4%     372     1.3%             749      255   193.7%
ownership changes) (a)
Customers (voice) (a)                          8,921    7,840   13.8%   8,544     4.4%           8,921    7,840    13.8%
POPs                                         160,600  162,100   -0.9% 160,600     0.0%         160,600  162,100    -0.9%
Penetration rate (6)                            5.6%     4.8%  80 bps    5.3%   30 bps            5.6%     4.8%   80 bps
(a)  The beginning balance of 3Q02 customers was adjusted to include 225 customers related to fixed wireless customers
     in Venezuela. 2Q02 Customer net adds would have been 63 higher, and year-to-date net adds for 2002 would have been
     143 higher. Annual growth in net adds would have been 88.2%. Growth in customers vs. 2Q02 would have been 10.6% had
     Venezuela's fixed wireless customers been included in 2Q02 data.


BellSouth Corporation
Worldwide Wireless
(unaudited)
Customers and POPs by
Country
                               Ownership
                               Percentage
                                 As of            Total                              Total POPs As
                                              Customers As                                of
                                                   of
  Country        Brand            2Q03         2Q03   2Q02  Growth  1Q03  Growth     2Q03    2Q02   Growth  1Q03 Growth
United          Cingular         40.0%     22,640 22,183   2.1% 22,114   2.4%    236,000 219,000   7.8% 235,000   0.4%
States          Wireless
Argentina       Movicom          65.0%      1,336  1,392  -4.0%  1,325   0.8%     37,400  37,500  -0.3%  37,400   0.0%
               BellSouth
Brazil - Sao      BCP            45.4%      1,699  1,723  -1.4%  1,664   2.1%     18,100  18,100   0.0%  18,100   0.0%
Paulo Reg.
Chile          BellSouth        100.0%      1,161  1,020  13.8%  1,062   9.3%     15,300  15,400  -0.6%  15,300   0.0%
Colombia       Celumovil         66.0%      1,684  1,308  28.7%  1,580   6.6%     40,300  43,000  -6.3%  40,300   0.0%
               BellSouth
Ecuador        BellSouth         89.4%        740    455  62.6%    631  17.3%     13,200  12,800   3.1%  13,200   0.0%
Guatemala      BellSouth         60.0%        214    145  47.6%    205   4.4%     13,000  11,700  11.1%  13,000   0.0%
Nicaragua      BellSouth         89.0%        247    179  38.0%    231   6.9%      2,900   2,900   0.0%   2,900   0.0%
Panama         BellSouth         43.7%        377    308  22.4%    359   5.0%      2,800   3,000  -6.7%   2,800   0.0%
Peru           BellSouth         97.4%        573    480  19.4%    574  -0.2%     27,500  26,100   5.4%  27,500   0.0%
Uruguay         Movicom          46.0%        141    151  -6.6%    142  -0.7%      2,100   2,100   0.0%   2,100   0.0%
               BellSouth
Venezuela        Telcel          78.2%      3,179  3,005   5.8%  3,142   1.2%     24,000  24,400  -1.6%  24,000   0.0%
(a)            BellSouth
Total Latin                                11,351 10,166  11.7% 10,915   4.0%    196,600 197,000  -0.2% 196,600   0.0%
America (a)
Denmark         Sonofon          46.5%      1,312  1,021  28.5%  1,248   5.1%      5,300   5,300   0.0%   5,300   0.0%
Israel          Cellcom          34.8%      2,551  2,351   8.5%  2,514   1.5%      6,100   6,100   0.0%   6,100   0.0%
Total Europe                                3,863  3,372  14.6%  3,762   2.7%     11,400  11,400   0.0%  11,400   0.0%
Total Worldwide Wireless                   37,854 35,721   6.0% 36,791   2.9%    444,000 427,400   3.9% 443,000   0.2%
(a)
         (a) The beginning balance of 3Q02 customers was adjusted to include 225 customers related to fixed wireless
             customers in Venezuela. Growth in customers vs. 2Q02 in Venezuela, Total Latin America and Total Worldwide
             Wireless would have been -1.6%, 9.2%, and 5.3%, respectively, had Venezuela's fixed wireless customers been
             included in 2Q02 data.


BellSouth Corporation
Results by Segment (amounts in
millions) (unaudited)
Advertising & Publishing (1)
                                                                                         Year-To-Date
                                       2Q03     2Q02     Growth     1Q03     Growth          2003       2002     Growth
Operating Revenues
    Advertising and publishing         480      526      -8.7%      481      -0.2%             961     1,019     -5.7%
    revenues
    Commission revenues                 45       44       2.3%       17     164.7%              62        61      1.6%
        Total Operating Revenues       525      570      -7.9%      498       5.4%           1,023     1,080     -5.3%
Operating Expenses
    Cost of services                    82       91      -9.9%       78       5.1%             160       182    -12.1%
    Selling, general, &                184      224     -17.9%      170       8.2%             354       394    -10.2%
    administrative expenses
    Depreciation and amortization        7        8     -12.5%        7       0.0%              14        14      0.0%
        Total Operating Expenses       273      323     -15.5%      255       7.1%             528       590    -10.5%
Segment Operating Income               252      247       2.0%      243       3.7%             495       490      1.0%
Interest Expense                         2        3     -33.3%        2       0.0%               4         6    -33.3%
Other Income (Expense), net              2        1       N/M*      (1)        N/M               1         1       N/M
Income Before Income Taxes             252      245       2.9%      240       5.0%             492       485      1.4%
Provision for Income Taxes              95       94       1.1%       91       4.4%             186       186      0.0%
        Segment Net Income(1)         $157     $151       4.0%     $149       5.4%            $306      $299      2.3%
Segment EBITDA (4)                    $259     $255       1.6%     $250       3.6%            $509      $504      1.0%
Segment EBITDA margin (5)             49.3%    44.7%    460 bps    50.2%    -90 bps           49.8%     46.7%   310 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) 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. Average monthly revenue per customer is calculated by dividing
    average monthly service revenue by average customers.
(4) EBITDA is defined as operating income plus depreciation and amortization. See Net Income reconciliation
    to EBITDA on page 15.
(5) EBITDA margin is calculated by dividing EBITDA by operating revenues, except when otherwise stated.
(6) Penetration rate is calculated by dividing customers by POPs (excludes POPs in markets where service has
    not been initiated).


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