2Q03 2Q02 Growth 1Q03 Growth
 
 Operating Revenues
 Communications group $4,545 $4,631 -1.9% $4,508 0.8%
 Latin America 563 597 -5.7% 509 10.6%
 Advertising and publishing 520 538 -3.3% 494 5.3%
 All other 14 14 0.0% 12 16.7%
 Total Operating Revenues 5,642 5,780 -2.4% 5,523 2.2%
 
 Operating Expenses
 Cost of services and products 2,008 1,922 4.5% 1,933 3.9%
 Selling, general &
 administrative expenses 1,133 1,132 0.1% 1,052 7.7%
 Depreciation and amortization 1,046 1,170 -10.6% 1,038 0.8%
 Provision for restructuring and
 asset impairments 20 357 N/M* 121 N/M
 Total Operating Expenses 4,207 4,581 -8.2% 4,144 1.5%
 Operating Income 1,435 1,199 19.7% 1,379 4.1%
 Interest Expense 249 301 -17.3% 296 -15.9%
 Other Income (Expense), net 287 (240) N/M 306 N/M
 Income Before Taxes and
 Accounting Change 1,473 658 123.9% 1,389 6.0%
 Provision for Income Taxes 522 395 32.2% 474 10.1%
 Income Before Cumulative Effect
 Change 951 263 261.6% 915 3.9%
 Cumulative Effect of Change in
 Accounting Principle --- --- N/M 315 N/M
 Net Income $951 $263 261.6% $1,230 -22.7%
 
 Diluted:
 Weighted Average Common Shares
 Outstanding 1,851 1,882 -1.6% 1,860 -0.5%
 Earnings Per Share $0.51 $0.14 264.3% $0.66 -22.7%
 
 * - Not meaningful.
 
 Selected Financial and Operating Data
 
 
 EBITDA (4) $2,481 $2,369 4.7% $2,417  2.6%
 EBITDA margin (5) 44.0% 41.0% 300 bps 43.8% 20 bps
 
 Declared dividends per share $0.23 $0.20 15.0% $0.21 9.5%
 Capital expenditures $729 $1,023 -28.7% $631 15.5%
 
 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 -280
  bps 47.4% bps
 Total employees 75,779 84,617 -10.4% 76,797 -1.3%
 
 
 Year-to-Date
 2003 2002 Growth
 
 
 Operating Revenues
 Communications group $9,053 $9,276 -2.4%
 Latin America 1,072 1,253 -14.4%
 Advertising and publishing 1,014 754 34.5%
 All other 26 31 -16.1%
 Total Operating Revenues 11,165 11,314 -1.3%
 
 Operating Expenses
 Cost of services and products 3,941 3,839 2.7%
 Selling, general & administrative
 expenses 2,185 2,219 -1.5%
 Depreciation and amortization 2,084 2,331 -10.6%
 Provision for restructuring and
  asset impairments 141 357 N/M
 Total Operating Expenses 8,351 8,746 -4.5%
 Operating Income 2,814 2,568 9.6%
 Interest Expense  545 605 -9.9%
 Other Income (Expense), net 593 579 N/M
 Income Before Taxes and Accounting
 Change 2,862 2,542 12.6%
 Provision for Income Taxes 996 1,148 -13.2%
 Income Before Cumulative Effect
 Change 1,866 1,394 33.9%
 Cumulative Effect of Change in
 Accounting Principle 315 (1,285) N/M
 Net Income $2,181 $109 1900.9%
 
 Diluted:
 Weighted Average Common Shares
 Outstanding 1,855 1,885 -1.6%
 Earnings Per Share $1.18 $0.06 1866.7%
 
 * - Not meaningful.
 
 Selected Financial and Operating Data
 
 
 EBITDA (4) $4,898 $4,899 0.0%
 EBITDA margin (5) 43.9%  43.3% 60 bps
 
 Declared dividends per share $0.44 $0.39 12.8%
 Capital expenditures $1,360 $2,028 -32.9%
 
 
 
 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
 
 Operating Revenues
 Communications group $4,504 $4,586 -1.8% $4,469 0.8%
 Domestic wireless 1,514 1,500 0.9% 1,436 5.4%
 Latin America 563  597 -5.7% 509 10.6%
 Advertising and publishing 520 565 -8.0% 494 5.3%
 All other 14 13 7.7% 12 16.7%
 Total Operating Revenues 7,115 7,261 -2.0% 6,920  2.8%
 
 Operating Expenses
 Cost of services and products 2,471 2,373 4.1% 2,364 4.5%
 Selling, general, &
 administrative expenses 1,637 1,680 -2.6% 1,537 6.5%
 Depreciation and amortization 1,249 1,352 -7.6% 1,233 1.3%
 Total Operating Expenses 5,357 5,405 -0.9% 5,134 4.3%
 Operating Income 1,758 1,856 -5.3% 1,786 -1.6%
 Interest Expense 313 362 -13.5%  364 -14.0%
 Other Income (Expense), net 61 49 N/M* 39 N/M
 Income Before Income Taxes 1,506 1,543 -2.4% 1,461 3.1%
 Provision for Income Taxes 535 568 -5.8% 520 2.9%
  Net Income $971 $975 -0.4% $941 3.2%
 
 Diluted:
 Weighted Average Common Shares
 Outstanding 1,851 1,882 -1.6% 1,860 -0.5%
 Earnings Per Share $0.52 $0.52  0.0% $0.51 2.0%
 
 * - Not meaningful.
 
 Selected Financial and Operating Data
 
 
 EBITDA (4) $3,007 $3,208 -6.3% $3,019 -0.4%
 EBITDA margin (5) 42.3% 44.2% -190 bps 43.6% bps -130
 
 Dividends per share $0.23 $0.20 15.0% $0.21 9.5%
 Capital expenditures $729 $1,023 -28.7% $631 15.5%
 
 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%
 
 
  Year-to-Date
 2003 2002 Growth
 
 Operating Revenues
 Communications group $8,973 $9,200 -2.5%
 Domestic wireless 2,950  2,917 1.1%
 Latin America 1,072 1,253 -14.4%
 Advertising and publishing 1,014 1,071 -5.3%
 All other 26 30 -13.3%
  Total Operating Revenues 14,035 14,471 -3.0%
 
 Operating Expenses
 Cost of services and products 4,835 4,749 1.8%
 Selling, general, & administrative
 expenses  3,174 3,300 -3.8%
 Depreciation and amortization 2,482 2,693 -7.8%
 Total Operating Expenses 10,491 10,742 -2.3%
 Operating Income 3,544  3,729 -5.0%
 Interest Expense 677 721 -6.1%
 Other Income (Expense), net 100 128 N/M
 Income Before Income Taxes 2,967 3,136 -5.4%
  Provision for Income Taxes 1,055 1,123 -6.1%
 Net Income $1,912 $2,013 -5.0%
 
 Diluted:
 Weighted Average Common Shares
 Outstanding 1,855 1,885 -1.6%
 Earnings Per Share $1.03 $1.07 -3.7%
 
 * - Not meaningful.
 
 Selected Financial and Operating Data
 
 
 EBITDA (4) $6,026 $6,422 -6.2%
  EBITDA margin (5) 42.9% 44.4% -150 bps
 
 Dividends per share $0.44 $0.39 12.8%
 Capital expenditures $1,360 $2,028 -32.9%
 
 
 
 BellSouth Corporation
 Normalized Earnings Summary and Reconciliation to Reported Results
 (amounts in millions, except per share data)
 
 
 
 Second Quarter 2003 Normalizing Items
 
 FX  Sale of
 Losses Pension/ Brazil
 Cingular (Gains) Severance NE
 GAAP A F J K Normalized
 
 Operating Revenues  $5,642 $1,473 $--- $--- $--- $7,115
 Operating Expenses 4,207 1,170 --- (20) --- 5,357
 Operating Income 1,435 303 --- 20 --- 1,758
 Interest Expense 249 64 --- --- --- 313
 Other Income (Expense), net 287 (235) (66) --- 75 61
 Income Before Taxes and
 Accounting Change 1,473 4 (66) 20 75 1,506
 Provision for Income Taxes 522 4  (1) 8 2 535
 Net Income Before
 Cumulative Effect Change 951 --- (65) 12 73 971
 Cumulative Effect of Change
 in Accounting Principle --- --- --- --- --- ---
 Net Income $951 $0 ($65) $12 $73 $971
 
 Diluted Earnings Per Share $0.51 $0.00 ($0.04) $0.01 $0.04 $0.52
 
 EBITDA (4) 2,481 506 --- 20 --- 3,007
 
 
 
 Year-to-Date 2003  Normalizing Items
 
 FX A&P
 Losses Acctg.
 Cingular (Gains) Change
 GAAP A F G
 
 Operating Revenues $11,165 $2,870 $--- $---
 Operating Expenses 8,351 2,281 --- ---
 Operating Income 2,814 589 --- ---
 Interest Expense 545 132 --- ---
 Other Income (Expense), net 593 (452) (116) ---
 Income Before Taxes and Accounting
  Change 2,862 5 (116) ---
 Provision for Income Taxes 996 5 (3) ---
 Net Income Before Cumulative Effect
 Change 1,866 ---  (113) ---
 Cumulative Effect of Change in
 Accounting Principle 315 --- --- 501
 Net Income 2,181 $0 ($113) $501
 
 Diluted Earnings Per Share * $1.18 $0.00 ($0.06) $0.27
 
 EBITDA (4) 4,898 987 --- ---
 
 
 Year-to-Date 2003 Normalizing Items
 
 Sale of
  Pension/ Brazil
 FAS 143 Severance NE
 I J K Normalized
 
 Operating Revenues $--- $--- $--- $14,035
 Operating Expenses --- (141) --- 10,491
 Operating Income --- 141 --- 3,544
 Interest Expense --- --- --- 677
 Other Income (Expense), net --- --- 75 100
 Income Before Taxes and Accounting
 Change --- 141 75 2,967
 Provision for Income Taxes --- 55  2 1,055
 Net Income Before Cumulative Effect
 Change --- 86 73 1,912
 Cumulative Effect of Change in
 Accounting Principle (816) --- --- ---
  Net Income ($816) $86 $73 $1,912
 
 Diluted Earnings Per Share * ($0.44) $0.05 $0.04 $1.03
 
 EBITDA (4) --- 141 --- 6,026
 
 * Normalized earnings per share for year-to-date 2003 does not sum due to
 rounding.
 
 
 
 Second Quarter 2002 Normalizing Items
 Losses on FX A&P
 Equity Losses Acctg. Pension/
 Cingular Invest. (Gains) Change Severance
 GAAP A C F G J Normalized
 
 Operating Revenues $5,780 $1,455 $--- $--- $26 $--- $7,261
 Operating Expenses 4,581 1,167 --- --- 14 (357) 5,405
 Operating Income 1,199 288 --- --- 12 357 1,856
 Interest Expense 301 61 --- --- --- --- 362
 Other Income
 (Expense), net  (240) (227) 158 358 --- --- 49
 Income Before Taxes
 and Accounting Change 658 --- 158 358 12 357 1,543
 Provision for Income
 Taxes 395 --- 34 3 4 132 568
 Net Income Before
 Cumulative Effect
 Change 263 --- 124 355 8 225 975
 Cumulative Effect of
 Change in Accounting
 Principle --- --- --- --- --- --- ---
  Net Income 263 $0 $124 $355 $8 $225 $975
 
 Diluted Earnings Per
 Share $0.14 $0.00 $0.07 $0.19 $0.00 $0.12 $0.52
 
 EBITDA (4) 2,369 470 --- --- 12 357 3,208
 
 
 
 Year-to-Date 2002 Normalizing Items
 
 Losses on
 Equity
  Cingular E-Plus Invest.
 GAAP A B C
 
 Operating Revenues $11,314 $2,841 $--- $---
 Operating Expenses 8,746 2,287 --- ---
 Operating Income 2,568 554 --- ---
 Interest Expense 605 116 --- ---
 Other Income (Expense), net 579 (438) (1,339) 388
 Income Before Taxes and Accounting
 Change 2,542 --- (1,339) 388
 Provision for Income Taxes 1,148 --- (482) 114
 Net Income Before Cumulative Effect
 Change  1,394 --- (857) 274
 Cumulative Effect of Change in
 Accounting Principle (1,285)
 Net Income 109 $0 ($857) $274
 
 Diluted Earnings Per Share *  $0.06 $0.00 ($0.45) $0.15
 
 EBITDA (4) 4,899 916
 
 
 
 Year-to-Date 2002 Normalizing Items
 A&P
  Brazil Loan Unbilled FX Losses Acctg.
 Impairments Rec. Adj. (Gains) Change
 D E F G
 
 Operating Revenues  $--- $163 $--- $153
 Operating Expenses --- 66
 Operating Income --- 163 --- 87
 Interest Expense --- --- --- ---
 Other Income (Expense), net 383 --- 555 ---
 Income Before Taxes and Accounting
 Change 383 163 555 87
 Provision for Income Taxes  120 62 (4) 33
 Net Income Before Cumulative Effect
 Change 263 101 559 54
 Cumulative Effect of Change in
 Accounting Principle --- ---  --- ---
 Net Income $263 $101 $559 $54
 
 Diluted Earnings Per Share * $0.14 $0.05 $0.30 $0.03
 
 EBITDA (4) --- 163 --- 87
 
 
 Year-to-Date 2002 Normalizing Items
 
 Pension/
 FAS 142 Severance
 H  J Normalized
 
 Operating Revenues $--- $--- $14,471
 Operating Expenses --- (357) 10,742
 Operating Income --- 357 3,729
 Interest Expense --- --- 721
 Other Income (Expense), net 128
 Income Before Taxes and Accounting
 Change --- 357 3,136
 Provision for Income Taxes --- 132 1,123
 Net Income Before Cumulative Effect
 Change --- 225 2,013
 Cumulative Effect of Change in
 Accounting Principle 1,285 --- ---
 Net Income $1,285 $225 $2,013
 
 Diluted Earnings Per Share * $0.68 $0.12 $1.07
 
 EBITDA (4)  --- 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)
 Change  Change
 vs. vs.
 June 30, Dec. 31, Prior March 31, Prior
 2003 2002 Year 2003 Quarter
 Assets
 Current Assets:
 Cash and cash equivalents $4,122 $2,482 $1,640 $2,442 $1,680
 Accounts receivable, net of
 allowance for
 uncollectibles of $492
 $476, and $465 2,999 4,129 (1,130) 3,102 (103)
 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
 affiliates (179) (112) (174) (353) 125
 Minority interests in income of
 subsidiaries 20 4 (8) 12 (77)
 Deferred income taxes 229 180 459 688 777
 Net (gains) losses on sale or
 impairment of equity
 securities 8  152 --- 8 388
 Pension income (133) (205) (134) (267) (410)
 Pension settlement (gains)
 losses 20 --- 67 87 ---
 Curtailment and termination
  benefits charges --- 60 --- --- 60
 Stock-based compensation 36 51 31 67 92
 Unbilled receivable adjustment --- --- --- --- 163
 Foreign currency transaction
 (gains) losses (99) 355 (45) (144) 645
 Cumulative effect of change in
 accounting principle --- --- (539) (539) 1,285
 (Gain) loss on sale/disposal of
 operations 75 --- --- 75 (1,335)
 Net change in:
 Accounts receivable and other
 current assets 120 (114) (121) (1) 77
 Accounts payable and other
  current liabilities 197 194 (86) 111 (285)
 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 affiliates --- (1) --- --- (7)
 Proceeds from sale of securities
 and operations 46 120 35 81 1,454
 Proceeds from repayment of loans
 and advances 1,899 --- --- 1,899 426
 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 activities 859 (835) (620) 239 (90)
 
  Cash Flows from Financing
 Activities:
 Net borrowing (repayments) of
 short-term debt (179) (431) (202) (381) (1,393)
 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 Equivalents 1,680 (219) (40) 1,640 1,250
 Cash and Cash Equivalents at
 Beginning of Period 2,442 2,061 2,482 2,482 592
 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)
 
 2Q03 2Q02 Growth 1Q03 Growth
 
 Operating Revenues
 Voice $3,175 $3,132  1.4% $3,131 1.4%
 Data 1,064 1,067 -0.3% 1,090 -2.4%
 Other 347 472 -26.5% 355 -2.3%
 Total Operating Revenues 4,586 4,671 -1.8% 4,576 0.2%
 Operating Expenses
 Cost of services and products 1,712 1,637 4.6% 1,625 5.4%
 Selling, general, &
 administrative expenses 768 748 2.7% 764 0.5%
 Depreciation and amortization 944 1,042 -9.4% 937 0.7%
 Total Operating Expenses 3,424 3,427 -0.1% 3,326 2.9%
 Segment Operating Income 1,162 1,244 -6.6% 1,250 -7.0%
 Interest Expense 101 120 -15.8% 118 -14.4%
 Other Income (Expense), net 18 (3) N/M* 3 N/M
 Income Before Income Taxes 1,079 1,121 -3.7% 1,135 -4.9%
 Provision for Income Taxes 400 419 -4.5% 426 -6.1%
 Segment Net Income(1) $679 $702 -3.3% $709 -4.2%
 * - Not meaningful.
 
 
 Selected Financial and Operating Data
 
 (amounts in millions)
 Segment EBITDA (4) $2,106 $2,286 -7.9% $2,187 -3.7%
 Segment EBITDA margin (5) 45.9% 48.9% -300 bps 47.8% -190 bps
 Data service revenues $1,064 $1,067 -0.3% $1,090 -2.4%
 Long distance revenues $309 $213 45.1% $264 17.0%
 Access minutes of use 23,053 25,073 -8.1% 22,795 1.1%
 Capital expenditures $665 $918 -27.6% $566 17.5%
 IntraLata Toll Messages 87 97 -10.3% 91 -4.4%
 
 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%
 
 
 
 Year-To-Date
 2003 2002 Growth
 
 Operating Revenues
 Voice $6,306 $6,309 0.0%
 Data 2,154 2,159 -0.2%
 Other 702 885 -20.7%
 Total Operating Revenues 9,162 9,353 -2.0%
 Operating Expenses
 Cost of services and products 3,337 3,255 2.5%
 Selling, general, & administrative
 expenses 1,532 1,474 3.9%
 Depreciation and amortization 1,881 2,074 -9.3%
 Total Operating Expenses 6,750  6,803 -0.8%
 Segment Operating Income 2,412 2,550 -5.4%
 Interest Expense 219 245 -10.6%
 Other Income (Expense), net 21 (3) N/M
 Income Before Income Taxes 2,214 2,302 -3.8%
 Provision for Income Taxes 826 865 -4.5%
 Segment Net Income(1) $1,388 $1,437 -3.4%
 * - Not meaningful.
 
 
 Selected Financial and Operating Data
 
 (amounts in millions)
 Segment EBITDA (4) $4,293 $4,624 -7.2%
 Segment EBITDA margin (5) 46.9% 49.4% -250 bps
 Data service revenues $2,154 $2,159 -0.2%
 Long distance revenues $573 $418 37.1%
 Access minutes of use 45,848 50,656 -9.5%
 Capital expenditures $1,231 $1,840 -33.1%
 IntraLata Toll Messages 178 193 -7.8%
 
 
 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 Residence 14,610 15,777 -7.4% 14,981 -2.5%
 Wholesale
 Resale 238 402 -40.8% 297 -19.9%
  UNE-P 1,369 586 133.6% 1,155 18.5%
 Total Wholesale
 Residence 1,607 988 62.7% 1,452 10.7%
 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 Business 7,046 7,517 -6.3% 7,202  -2.2%
 Wholesale
 Resale 81 130 -37.7% 83 -2.4%
 UNE-P 640 532 20.3% 619 3.4%
 Total Wholesale Business 721 662 8.9% 702  2.7%
 Total Business 7,767 8,179 -5.0% 7,904 -1.7%
 
 Other Retail / Wholesale Lines 166 194 -14.4% 174 -4.6%
 
 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
 service 46,677 42,766 9.1% 46,649 0.1%
 
 Total equivalent access lines in
 service 70,827 67,904 4.3% 71,160 -0.5%
 
 (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)
 
 
 2Q03 2Q02 Growth 1Q03 Growth
 
 Operating Revenues
 Service revenues (3) $1,412 $1,398 1.0% $1,338 5.5%
 Equipment and other revenues 102 102 0.0% 98 4.1%
 Total Operating Revenues 1,514 1,500 0.9% 1,436 5.4%
 Operating Expenses
  Cost of services and products 501 478 4.8% 468 7.1%
 Selling, general, &
 administrative expenses 507 550 -7.8% 487 4.1%
 Depreciation and amortization 203 182 11.5% 195 4.1%
  Total Operating Expenses 1,211 1,210 0.1% 1,150 5.3%
 Segment Operating Income 303 290 4.5% 286 5.9%
 Interest Expense 92 88 4.5% 90 2.2%
 Other Income (Expense), net (39) (43) N/M* (31) N/M
 Income Before Income Taxes 172 159 8.2% 165 4.2%
 Provision for Income Taxes 68 60 13.3% 64 6.3%
 Segment Net Income(1) $104 $99 5.1% $101 3.0%
 
 * - 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%
 Segment EBITDA margin (5)(c) 35.8% 33.8% 200 bps 35.9% -10 bps
 Cellular/PCS:
 Total Cellular/PCS Customers 9,056 8,873 2.1% 8,846 2.4%
 Net Customer Additions -
 Cellular/PCS 216 141 53.2% 76 184.2%
 Partitioned Customers and/or
 Adjustments 6 0 N/M 0 N/M
 Churn - Cellular/PCS 2.5% 2.7% -20 bps 2.6% -10 bps
 Wireless Service ARPU -
  Cellular/PCS $51.80 $52.11 -0.6% $50.04 3.5%
 Wireless Subscriber ARPU -
 Cellular/PCS $48.87 $48.71 0.3% $47.38 3.1%
 Minutes Of Use Per Cellular/PCS
 Subscriber  445 398 11.8% 405 9.9%
 Licensed POPs - Cellular/PCS (b) 94 88 6.8% 94 0.0%
 Penetration - Cellular/PCS (b) 10.2% 11.2% -100 bps 10.0% 20 bps
 Interactive:
 Total Cingular Interactive
  Customers 315 315 0.0% 334 -5.7%
 Net Customer Additions -
 Cingular Interactive (19) 9 N/M 7 N/M
 
 
 
 Year-To-Date
  2003 2002 Growth
 
 Operating Revenues
 Service revenues (3) $2,750 $2,724 1.0%
 Equipment and other revenues 200 193 3.6%
  Total Operating Revenues 2,950 2,917 1.1%
 Operating Expenses
 Cost of services and products 969 929 4.3%
 Selling, general, & administrative
 expenses  994 1,070 -7.1%
 Depreciation and amortization 398 362 9.9%
 Total Operating Expenses 2,361 2,361 0.0%
 Segment Operating Income 589 556  5.9%
 Interest Expense 182 178 2.2%
 Other Income (Expense), net (70) (68) N/M
 Income Before Income Taxes 337 310 8.7%
 Provision for Income Taxes 132 119 10.9%
 Segment Net Income(1) $205 $191 7.3%
 
 * - Not meaningful.
 
 Selected Financial and Operating Data
 
 (amounts in millions, except customer
 data in thousands)
 Segment EBITDA (4) $987 $918 7.5%
 Segment EBITDA margin (5)(c) 35.9% 33.7% 220 bps
 Cellular/PCS:
 Total Cellular/PCS Customers 9,056 8,873 2.1%
 Net Customer Additions -
 Cellular/PCS 292 235 24.3%
 Partitioned Customers and/or
 Adjustments 6 0 N/M
 Churn - Cellular/PCS 2.6% 2.8% -20 bps
 Wireless Service ARPU -
 Cellular/PCS $50.93 $51.28 -0.7%
 Wireless Subscriber ARPU -
 Cellular/PCS  $48.13 $48.04 0.2%
 Minutes Of Use Per Cellular/PCS
 Subscriber 425 377 12.7%
 Licensed POPs - Cellular/PCS (b) 94 88 6.8%
 Penetration - Cellular/PCS (b) 10.2% 11.2% -100 bps
 Interactive:
 Total Cingular Interactive
 Customers 315 315 0.0%
 Net Customer Additions - Cingular
 Interactive  (12) 21 N/M
 
 (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)
 
  2Q03 2Q02 Growth 1Q03 Growth
 
 Operating Revenues
 Service revenues (3) $471 $501 -6.0% $432 9.0%
 Equipment and other
 revenues 94 78 20.5% 77 22.1%
 Advertising and publishing
 revenues --- 19 -100.0% --- 0.0%
 Total Operating Revenues 565 598 -5.5% 509 11.0%
 Operating Expenses
 Cost of services and
 products 243 230 5.7% 258 -5.8%
 Selling, general, &
 administrative expenses 154 174 -11.5% 136 13.2%
 Depreciation and
 amortization 93 118 -21.2% 90 3.3%
 Total Operating Expenses 490 522 -6.1% 484 1.2%
 Segment Operating Income 75 76 -1.3% 25 200.0%
 Interest Expense 22 35 -37.1% 43 -48.8%
  Other Income (Expense), net (7) (14) N/M* 4 N/M
 Income Before Income Taxes 46 27 N/M (14) N/M
 Provision for Income Taxes 5 15 N/M (24) N/M
 Segment Net Income(1) $41 $12 N/M $10 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%
 Segment EBITDA margin (5) 29.7% 32.4% -270 bps 22.6% 710 bps
 
 
 Average monthly revenue per
 customer (3) $18 $20 -10.0% $17 5.9%
 Customer net adds in period
 (excluding ownership
  changes) (a) 377 (68) N/M 372 1.3%
 
 
 Customers (voice) (a) 8,921 7,840 13.8% 8,544 4.4%
 POPs 160,600 162,100 -0.9% 160,600 0.0%
 Penetration rate (6)  5.6% 4.8% 80 bps 5.3% 30 bps
 
 
 Year-To-Date
 2003 2002 Growth
 
 Operating Revenues
 Service revenues (3)  $903 $1,063 -15.1%
 Equipment and other revenues 171 172 -0.6%
 Advertising and publishing
 revenues --- 22 -100.0%
 Total Operating Revenues 1,074 1,257 -14.6%
 Operating Expenses
 Cost of services and products 501 496 1.0%
 Selling, general, &
 administrative expenses 290 390  -25.6%
 Depreciation and amortization 183 236 -22.5%
 Total Operating Expenses 974 1,122 -13.2%
 Segment Operating Income 100 135 -25.9%
 Interest Expense 65 75 -13.3%
 Other Income (Expense), net (3) (29) N/M
 Income Before Income Taxes 32 31 N/M
 Provision for Income Taxes  (19) 16 N/M
 Segment Net Income(1) $51 $15 N/M
 * - Not meaningful.
 
 
 Selected Financial and Operating Data
 
 (amounts in millions, except
 customer data in thousands)
 Segment EBITDA (4) $283 $371 -23.7%
 Segment EBITDA margin (5) 26.4% 29.5% -310 bps
 
 
 Average monthly revenue per customer
 (3) $18 $22 -18.2%
 Customer net adds in period
 (excluding ownership changes) (a) 749 255 193.7%
 
 
 Customers (voice) (a) 8,921 7,840 13.8%
 POPs 160,600 162,100  -0.9%
 Penetration rate (6) 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 Customers As of
 Country Brand 2Q03 2Q03 2Q02 Growth
 
 United States Cingular Wireless 40.0% 22,640 22,183 2.1%
 
 
 Argentina Movicom BellSouth 65.0% 1,336 1,392 -4.0%
 Brazil - Sao
 Paulo Region BCP 45.4% 1,699 1,723 -1.4%
 Chile BellSouth 100.0% 1,161 1,020 13.8%
 Colombia Celumovil BellSouth 66.0% 1,684 1,308 28.7%
 Ecuador BellSouth 89.4% 740 455 62.6%
 Guatemala BellSouth 60.0% 214 145 47.6%
 Nicaragua BellSouth 89.0% 247 179 38.0%
 Panama BellSouth 43.7% 377 308 22.4%
 Peru BellSouth 97.4% 573 480 19.4%
 Uruguay Movicom BellSouth 46.0% 141 151 -6.6%
 Venezuela (a) Telcel BellSouth 78.2% 3,179 3,005 5.8%
 
 
 Total Latin America (a) 11,351 10,166 11.7%
 
 
 Denmark Sonofon 46.5% 1,312 1,021 28.5%
 Israel  Cellcom 34.8% 2,551 2,351 8.5%
 
 Total Europe 3,863 3,372 14.6%
 
 Total Worldwide Wireless (a) 37,854 35,721 6.0%
 
 
  Total Customers As of
 Country Brand 1Q03 Growth
 
 United States Cingular Wireless 22,114 2.4%
 
 
 Argentina Movicom BellSouth 1,325 0.8%
 Brazil - Sao
 Paulo Region BCP 1,664 2.1%
 Chile BellSouth 1,062 9.3%
 Colombia Celumovil BellSouth 1,580 6.6%
  Ecuador BellSouth 631 17.3%
 Guatemala BellSouth 205 4.4%
 Nicaragua BellSouth 231 6.9%
 Panama BellSouth 359 5.0%
 Peru BellSouth 574 -0.2%
 Uruguay Movicom BellSouth 142 -0.7%
 Venezuela (a) Telcel BellSouth  3,142 1.2%
 
 
 Total Latin America (a) 10,915 4.0%
 
 
 Denmark Sonofon 1,248 5.1%
 Israel Cellcom 2,514 1.5%
 
 Total Europe 3,762 2.7%
 
 Total Worldwide Wireless (a) 36,791 2.9%
 
 
 Total POPs As of
 Country Brand 2Q03 2Q02 Growth
 
 United States Cingular Wireless 236,000 219,000 7.8%
 
 
 Argentina Movicom BellSouth 37,400 37,500 -0.3%
 Brazil - Sao
 Paulo Region BCP  18,100 18,100 0.0%
 Chile BellSouth 15,300 15,400 -0.6%
 Colombia Celumovil BellSouth 40,300 43,000 -6.3%
 Ecuador BellSouth 13,200  12,800 3.1%
 Guatemala BellSouth 13,000 11,700 11.1%
 Nicaragua BellSouth 2,900 2,900 0.0%
 Panama BellSouth 2,800 3,000 -6.7%
 Peru BellSouth 27,500 26,100 5.4%
 Uruguay Movicom BellSouth 2,100 2,100 0.0%
 Venezuela (a) Telcel BellSouth 24,000 24,400 -1.6%
 
 
 Total Latin America (a) 196,600 197,000 -0.2%
 
 
 Denmark Sonofon 5,300 5,300 0.0%
 Israel Cellcom 6,100 6,100 0.0%
 
 Total Europe 11,400 11,400 0.0%
 
 Total Worldwide Wireless (a) 444,000 427,400 3.9%
 
 
 Total POPs As of
 Country Brand 1Q03 Growth
 
 United States Cingular Wireless 235,000 0.4%
 
 
 Argentina Movicom BellSouth 37,400 0.0%
 Brazil - Sao
 Paulo Region BCP 18,100 0.0%
 Chile BellSouth 15,300 0.0%
 Colombia Celumovil BellSouth 40,300 0.0%
 Ecuador BellSouth 13,200 0.0%
 Guatemala BellSouth 13,000 0.0%
 Nicaragua BellSouth 2,900 0.0%
 Panama BellSouth 2,800 0.0%
 Peru BellSouth 27,500 0.0%
 Uruguay Movicom BellSouth 2,100 0.0%
 Venezuela (a) Telcel BellSouth 24,000 0.0%
 
 
 Total Latin America (a) 196,600 0.0%
 
 
 Denmark Sonofon 5,300 0.0%
 Israel Cellcom 6,100 0.0%
 
 Total Europe 11,400 0.0%
 
 Total Worldwide Wireless (a) 443,000 0.2%
 
 
 (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)
 
 2Q03 2Q02 Growth 1Q03 Growth
 
 Operating Revenues
 Advertising and publishing
 revenues 480 526 -8.7% 481 -0.2%
 Commission revenues 45 44 2.3% 17 164.7%
 Total Operating Revenues 525 570 -7.9% 498 5.4%
 Operating Expenses
 Cost of services 82 91 -9.9% 78 5.1%
 Selling, general, & administrative
 expenses 184 224 -17.9% 170 8.2%
 Depreciation and amortization 7 8 -12.5% 7  0.0%
 Total Operating Expenses 273 323 -15.5% 255 7.1%
 Segment Operating Income 252 247 2.0% 243 3.7%
 Interest Expense 2 3 -33.3% 2 0.0%
 Other Income (Expense), net 2 1 N/M* (1) N/M
 Income Before Income Taxes 252 245 2.9% 240 5.0%
 Provision for Income Taxes 95 94 1.1% 91 4.4%
 Segment Net Income(1) $157 $151 4.0% $149 5.4%
 
 Segment EBITDA (4) $259 $255 1.6% $250 3.6%
 Segment EBITDA margin (5) 49.3% 44.7% 460 bps 50.2% -90 bps
 
 * - Not meaningful.
 
 
  Year-To-Date
 2003 2002 Growth
 
 Operating Revenues
 Advertising and publishing
 revenues 961 1,019 -5.7%
  Commission revenues 62 61 1.6%
 Total Operating Revenues 1,023 1,080 -5.3%
 Operating Expenses
 Cost of services 160 182 -12.1%
  Selling, general, & administrative
 expenses 354 394 -10.2%
 Depreciation and amortization 14 14 0.0%
 Total Operating Expenses 528 590  -10.5%
 Segment Operating Income 495 490 1.0%
 Interest Expense 4 6 -33.3%
 Other Income (Expense), net 1 1 N/M
 Income Before Income Taxes 492 485 1.4%
 Provision for Income Taxes 186 186 0.0%
 Segment Net Income(1) $306 $299 2.3%
 
 Segment EBITDA (4)  $509 $504 1.0%
 Segment EBITDA margin (5) 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).
 
 
 
 BellSouth Corporation
 Non-GAAP Measures - Reconciliation
 (amounts in millions) (unaudited)
 
  EBITDA
 Consolidated Year-to-Date
 Net Income Reconciliation to
 EBITDA 2Q03 2Q02 1Q03 2003 2002
 Net Income $951 $263 $1,230 $2,181 $109
 Add Interest Expense 249 301 296 545 605
 Less Other Income, net (287) --- (306) (593) (579)
 Add Other Expense, net --- 240 --- ---  ---
 Add Provision for Income
 Taxes 522 395 474 996 1,148
 Add Depreciation and
 Amortization 1,046 1,170 1,038 2,084 2,331
 Less Cumulative Effect of
  Change in Accounting
 Principle --- --- (315) (315) 1,285
 EBITDA (4) $2,481 $2,369 $2,417 $4,898 $4,899
 
 
 Communications Group (1) Year-to-Date
 Segment Net Income
 Reconciliation to EBITDA 2Q03 2Q02 1Q03 2003 2002
 Segment Net Income $679 $702 $709 $1,388 $1,437
 Add Interest Expense 101 120 118  219 245
 Less Other Income, net (18) --- (3) (21) ---
 Add Other Expense, net --- 3 --- --- 3
 Add Provision for Income
 Taxes 400 419  426 826 865
 Add Depreciation and
 Amortization 944 1,042 937 1,881 2,074
 Segment EBITDA (4) $2,106 $2,286 $2,187 $4,293 $4,624
 
 
 Domestic Wireless Segment (1)(a)  Year-to-Date
 Segment Net Income
 Reconciliation to EBITDA 2Q03 2Q02 1Q03 2003 2002
 Segment Net Income $104 $99 $101 $205 $191
 Add Interest Expense 92  88 90 182 178
 Less Other Income, net --- --- --- --- ---
 Add Other Expense, net 39 43 31 70 68
 Add Provision for Income
 Taxes  68 60 64 132 119
 Add Depreciation and
 Amortization 203 182 195 398 362
 Segment EBITDA (4) $506 $472 $481 $987 $918
 
 
 Latin America Group (1)(2)  Year-to-Date
 Segment Net Income
 Reconciliation to EBITDA 2Q03 2Q02 1Q03 2003 2002
 Segment Net Income $41 $12 $10 $51 $15
 Add Interest Expense  22 35 43 65 75
 Less Other Income, net --- --- (4) --- ---
 Add Other Expense, net 7 14 --- 3 29
 Add Provision for Income
 Taxes  5 15 (24) (19) 16
 Add Depreciation and
 Amortization 93 118 90 183 236
 Segment EBITDA (4) $168 $194 $115 $283 $371
 
 
 Advertising and Publishing (1) Year-to-Date
 Segment Net Income
 Reconciliation to EBITDA 2Q03 2Q02 1Q03 2003 2002
 Segment Net Income $157 $151 $149 $306 $299
 Add Interest Expense 2 3 2 4 6
 Less Other Income, net (2) (1) --- (1) (1)
 Add Other Expense, net --- --- 1 --- ---
 Add Provision for Income
  Taxes 95 94 91 186 186
 Add Depreciation and
 Amortization 7 8 7 14 14
 Segment EBITDA (4) $259 $255 $250 $509 $504
 
 
 Free Cash Flow Year-to-Date
 2Q03 2Q02 1Q03 2003 2002
 Consolidated GAAP Cash Flow $1,680 $(219) $(40) $1,640 $1,250
 Add back financing activities
 uses 1,697 1,512 1,328 3,025 2,853
 Add back (deduct) investing
 activity used (provided by) (859) 835 620 (239) 90
 Less Capital Expenditures (729) (1,023) (631) (1,360) (2,028)
 Operating Free Cash Flow $1,789 $1,105 $1,277 $3,066 $2,165
 Add back proceeds from sale
 of securities and operations 46 120 35 81 1,454
 Add back proceeds from
 repayment of loans and
 advances 1,899 --- --- 1,899 426
 Add back settlement of
 derivatives on advances (352) 85 --- (352) 85
 Operating Free Cash Flow plus
 Asset Sales and Loan
 Repayments $3,382 $1,310 $1,312 $4,694 $4,130
 
 
 Net Debt
 June 30, Dec. 31, March 31,
 2003 2002 2003
 Consolidated GAAP Long-Term
 Debt $11,718 $12,283 $12,216
 Add Consolidated GAAP Debt
 maturing within one year 3,694 5,114 4,428
 Less Consolidated GAAP Cash (4,122) (2,482) (2,442)
 Net Debt $11,290 $14,915 $14,202
 
 (a) The domestic wireless segment is comprised of BellSouth's 40% share
 of the reported results of Cingular Wireless.