SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549


                                 FORM 10-Q
        (Mark One)

              |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2000

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to


                          Commission file number 1-8607


                              BELLSOUTH CORPORATION
             (Exact name of registrant as specified in its charter)


          Georgia                                      58-1533433
  (State of Incorporation)                          (I.R.S. Employer
                                                  Identification Number)


   1155 Peachtree Street, N. E.,                        30309-3610
          Atlanta, Georgia                              (Zip Code)
(Address of principal executive offices)

                   Registrant's telephone number 404 249-2000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No ___

At July 31, 2000, 1,874,100,602 common shares were outstanding.
<PAGE>


                                Table of Contents


Item                                                                    Page
                                                    Part I
1.      Financial Statements
             Consolidated Statements of Income                           3
             Consolidated Balance Sheets                                 4
             Consolidated Statements of Cash Flows                       5
             Consolidated Statements of Shareholders' Equity
                and Comprehensive Income                                 6
             Notes to Consolidated Financial Statements                  8

2.       Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                  16

3.       Qualitative and Quantitative Disclosures about Market Risk     28

                                                    Part II
4.       Submission of Matters to a Vote of Security Holders            30

6.       Exhibits and Reports on Form 8-K                               30
<PAGE>

-------------------------------------------------------------------------------
 PART I - FINANCIAL INFORMATION
-------------------------------------------------------------------------------

                          BELLSOUTH CORPORATION
                    CONSOLIDATED STATEMENTS OF INCOME
                               (Unaudited)
                 (In Millions, Except Per Share Amounts)
<TABLE>
<CAPTION>

                                   For the Three Months    For the Six Months
                                     Ended June 30,          Ended June 30,
                                   1999        2000        1999         2000

<S>                                 <C>         <C>          <C>         <C>
Operating revenues:
Wireline communications:
     Local service                  $ 2,712     $ 2,862      $ 5,366     $ 5,683
     Network access                   1,187       1,245        2,378       2,508
     Long distance                      153         131          303         266
     Other wireline                     255         357          535         642
        Total wireline
          communications              4,307       4,595        8,582       9,099
Domestic Wireless                       796         919        1,540       1,772
International operations                565         658        1,126       1,322
Advertising and publishing              407         471          750         835
Other                                    73         109          123         211
        Total operating
          revenues                    6,148       6,752       12,121      13,239

Operating expenses:
     Operational and support
      expenses                        3,359       3,565        6,612       7,133
     Depreciation and amortization    1,155       1,240        2,268       2,458
     Severance accrual                    -           -            -          78
     Provision for asset
      impairment                        320           -          320           -
        Total operating expenses      4,834       4,805        9,200       9,669

Operating income                      1,314       1,947        2,921       3,570

Interest expense                        245         332          471         638
Gain on sale of operations               16           -           16           -
Net earnings (losses) of equity
   affiliates                            57          22         (209)        153
Other income, net                       114          46          173         129

Income before income taxes            1,256       1,683        2,430       3,214
Provision for income taxes              470         619        1,029       1,149

        Net income                    $ 786     $ 1,064      $ 1,401     $ 2,065


Weighted-average common shares
 outstanding:
     Basic                            1,891       1,882        1,912       1,881
     Diluted                          1,909       1,900        1,930       1,899
Dividends declared per common
 share                               $ 0.19      $ 0.19       $ 0.38      $ 0.38
Earnings per share:
     Basic                           $ 0.42      $ 0.57       $ 0.73      $ 1.10
     Diluted                         $ 0.41      $ 0.56       $ 0.73      $ 1.09
</TABLE>





        The accompanying notes are an integral part of these consolidated
                             financial statements.

<PAGE>

                                BELLSOUTH CORPORATION
                             CONSOLIDATED BALANCE SHEETS
                       (In Millions, Except Per Share Amounts)
<TABLE>
<CAPTION>


                                                     December 31,      June 30,
                                                         1999            2000
                                                                     (Unaudited)
<S>                                                     <C>             <C>
ASSETS
Current assets:
     Cash and cash equivalents                          $ 1,287         $ 1,520
     Temporary cash investments                             105              27
     Accounts receivable, net of
         allowance for uncollectibles
         of $312 and $316                                 5,177           4,990
     Material and supplies                                  451             468
     Other current assets                                   367             590
         Total current assets                             7,387           7,595

Investments and advances                                  6,097           7,456

Property, plant and equipment                            61,009          63,269
Less:  accumulated depreciation                          36,378          37,972
     Property, plant and equipment, net                  24,631          25,297

Deferred charges and other assets                         1,564           1,717
Intangible assets, net                                    3,774           4,023

         Total assets                                  $ 43,453        $ 46,088

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Debt maturing within one year                      $ 7,653         $ 6,108
     Accounts payable                                     1,961           2,076
     Other current liabilities                            3,781           4,234
         Total current liablities                        13,395          12,418

Long-term debt                                            9,113          10,869

Noncurrent liabilities:
     Deferred income taxes                                2,705           2,963
     Unamortized investment tax credits                     126             106
     Other noncurrent liabilities                         3,299           3,230
         Total noncurrent liabilities                     6,130           6,299

Shareholders' equity:
     Common stock, $1 par value
        (4,400 shares authorized;
         1,883 and 1,881
         shares outstanding)                              2,020           2,020
     Paid-in capital                                      6,771           6,775
     Retained earnings                                   11,456          12,746
     Accumulated other comprehensive income                (358)             (5)
     Shares held in trust and treasury                   (4,798)         (4,832)
     Guarantee of ESOP debt                                (276)           (202)
         Total shareholders' equity                      14,815          16,502

         Total liabilities and shareholders' equity    $ 43,453        $ 46,088

</TABLE>


        The accompanying notes are an integral part of these consolidated
                              financial statements.
<PAGE>

                                     BELLSOUTH CORPORATION
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (Unaudited)
                                         (In Millions)

<TABLE>
<CAPTION>
                                                                           For the Six Months
                                                                              Ended June 30,
                                                                         1999              2000
<S>                                                                      <C>               <C>
Cash Flows from Operating Activities:
     Net income                                                       $ 1,401           $ 2,065
     Adjustments to net income:
        Depreciation and amortization                                   2,268             2,458
        Severance accrual                                                   -                78
        Gain on sale of operations                                        (16)                -
        Provision for asset impairment                                    320                 -
        Provision for uncollectibles                                      165               179
        Net losses (earnings) of equity affiliates                        209              (153)
        Dividends received from equity affiliates                          37                39
        Minority interests in income of subsidiaries                       20                22
        Deferred income taxes and investment tax credits                   (7)               98
     Net change in:
        Accounts receivable and other current assets                     (208)             (199)
        Accounts payable and other current liabilities                    332               641
        Deferred charges and other assets                                (279)             (337)
        Other liabilities and deferred credits                            (81)             (182)
     Other reconciling items, net                                         (68)               89

        Net cash provided by operating activities                       4,093             4,798

Cash Flows from Investing Activities:
     Capital expenditures                                              (2,885)           (3,268)
     Investments in and advances to equity affiliates                  (3,711)             (582)
     Purchases of licenses and other intangible assets                    (97)              (73)
     Proceeds from disposition of short-term investments                  133               247
     Purchases of short-term investments                                 (271)             (177)
     Proceeds from repayment of loans and advances                         50                14
     Other investing activities, net                                      129                44

        Net cash used for investing activities                         (6,652)           (3,795)

Cash Flows from Financing Activities:
     Net borrowings (repayments) of short-term debt                     4,049            (1,708)
     Proceeds from long-term debt                                           6             2,083
     Repayments of long-term debt                                        (193)             (335)
     Dividends paid                                                      (733)             (715)
     Purchase of treasury shares                                       (2,968)             (148)
     Other financing activities, net                                       11                53

        Net cash used for financing activities                            172              (770)

     Net (decrease) increase in cash and cash equivalents              (2,387)              233
     Cash and cash equivalents at beginning of period                   3,143             1,287
     Cash and cash equivalents at end of period                         $ 756           $ 1,520

</TABLE>

        The accompanying notes are an integral part of these consolidated
                              financial statements.
<PAGE>

                                       BELLSOUTH CORPORATION
                          CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                     AND COMPREHENSIVE INCOME
                                            (Unaudited)
                                           (In Millions)
<TABLE>
<CAPTION>


                                                                                   For the Six Months Ended June 30, 2000
                                         -----------------------------------------------------------------------------------------

                                         Number of Shares                                Amount
                                         ------------------    -------------------------------------------------------------------
<S>                                         <C>        <C>       <C>       <C>      <C>       <C>       <C>       <C>       <C>
                                                                                             Accum.
                                                   Shares                                    Other     Shares   Guaran-
                                                  Held in                                   Compre-    Held in  tee of
                                         Common   Trust and    Common    Paid-in  Retained  hensive   Trust and  ESOP
                                          Stock   Treasury      Stock    Capital  Earnings  Income     Treasury  Debt     Total
                                         -------- ---------    --------  -------- --------- --------  --------- -------- ---------
                                         -------- ---------    --------  -------- --------- --------  --------- -------- ---------
                                                    (a)                                                 (a)

Balance at December 31, 1999               2,020      (138)    $ 2,020   $ 6,771  $ 11,456   $ (358)  $ (4,798)  $ (276) $ 14,815

Net income                                                                           2,065                                  2,065
Other comprehensive income, net of tax:
    Foreign currency translation adjustment                                                      27                            27
    Net unrealized gains on securities                                                          335                           335
    Minimum pension liability adjustment                                                         (9)                           (9)
                                                                                                                         ---------
Total comprehensive income (b)                                                                                              2,418
Dividends declared                                                                    (715)                                  (715)
Share issuances for employee benefit plans               2                             (60)                114                 54
Purchase of treasury stock                              (3)                                               (148)              (148)
Tax benefit related to stock options                                           4                                                4
ESOP activities and related tax benefit                                                                              74        74
                                         -------- ---------    --------  -------- --------- --------  --------- -------- ---------

Balance at June 30, 2000                   2,020      (139)    $ 2,020   $ 6,775  $ 12,746     $ (5)  $ (4,832)  $ (202) $ 16,502
                                         ======== =========    ========  ======== ========= ========  ========= ======== =========

</TABLE>




(a)  Trust  and  treasury  shares  are  not  considered  to be  outstanding  for
     financial reporting purposes. As of June 30, 2000, there were approximately
     36  shares  held in  trust  and 103  shares  held in  treasury.

(b)  Total comprehensive income for second quarter 2000 was $1,104.

        The accompanying notes are an integral part of these consolidated
                              financial statements.
<PAGE>

                                      BELLSOUTH CORPORATION
                         CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                    AND COMPREHENSIVE INCOME
                                           (Unaudited)
                                          (In Millions)

<TABLE>
<CAPTION>

                                                                                    For the Six Months Ended June 30, 1999
                                         ----------------------------------------------------------------------------------------
                                         Number of Shares                               Amount
                                         -----------------    -------------------------------------------------------------------
<S>                                        <C>        <C>        <C>       <C>       <C>      <C>      <C>       <C>      <C>
                                                                                            Accum.
                                                  Shares                                    Other    Shares    Guaran-
                                                  Held in                                  Compre-  Held in    tee of
                                         Common   Trust and   Common    Paid-in  Retained  hensive  Trust and   ESOP
                                         Stock    Treasury     Stock    Capital  Earnings  Income   Treasury    Debt     Total
                                         -------  --------    --------  -------- --------- -------- ---------  -------  ---------
                                                    (a)                                               (a)

Balance at December 31, 1998              2,020       (70)    $ 2,020   $ 6,766   $ 9,479    $ (64) $ (1,752)  $ (339)  $ 16,110

Net income                                                                          1,401                                  1,401
Other comprehensive income, net of tax:
    Foreign currency translation adjustment                                                   (114)                         (114)
                                                                                                                        ---------
Total comprehensive income (b)                                                                                             1,287
Dividends declared                                                                   (720)                                  (720)
Share issuances for employee benefit plans              1                             (18)                33                  15
Purchase of treasury stock                            (66)                                            (2,965)             (2,965)
Purchase of stock by grantor trust                                                                        (3)                 (3)
ESOP activities and related tax benefit                                                 3                          33         36
                                         -------  --------    --------  -------- --------- -------- ---------  -------  ---------
Balance at June 30, 1999                  2,020      (135)    $ 2,020   $ 6,766  $ 10,145   $ (178) $ (4,687)  $ (306)  $ 13,760
                                         =======  ========    ========  ======== ========= ======== =========  =======  =========
</TABLE>

(a)  Trust  and  treasury  shares  are  not  considered  to be  outstanding  for
     financial reporting purposes. As of June 30, 1999, there were approximately
     36 shares held in trust and 100 shares held in treasury.

(b)  Total comprehensive income for second quarter 1999 was $830.



        The accompanying notes are an integral part of these consolidated
                              financial statements.
<PAGE>



                                  BELLSOUTH CORPORATION
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       (Unaudited)
                                  (Dollars In Millions)

Note A - Preparation of Interim Financial Statements

In this report,  BellSouth  Corporation and its  subsidiaries are referred to as
"we" or "BellSouth".

The accompanying  unaudited consolidated financial statements have been prepared
based upon  Securities and Exchange  Commission  (SEC) rules that permit reduced
disclosure for interim periods.  In our opinion,  these  statements  include all
adjustments  necessary  for a fair  presentation  of the  results of the interim
periods shown. All adjustments are of a normal recurring nature unless otherwise
disclosed.  Revenues,  expenses,  assets and  liabilities  can vary  during each
quarter  of the  year.  Therefore,  the  results  and  trends  in these  interim
financial  statements may not be the same as those for the full year. For a more
complete   discussion  of  our   significant   accounting   policies  and  other
information,  you should read this report in conjunction  with the  consolidated
financial  statements  included  in our  latest  annual  report on Form 10-K and
previous quarterly report on Form 10-Q.

Certain amounts within the prior year's  information  have been  reclassified to
conform to the current year's presentation.

Note B - Recent Accounting Pronouncements

Revenue Recognition
In December 1999, the SEC issued Staff Accounting  Bulletin Number 101, "Revenue
Recognition in Financial  Statements"  (SAB 101). SAB 101 requires that revenues
and costs of revenues  derived  from  services  rendered at the  beginning  of a
contract or business  relationship  be deferred and recognized  over the life of
the  related  contract  or  relationship.  In June 2000,  the SEC  deferred  the
required  adoption date of the  guidelines  in SAB 101 to the fourth  quarter of
2000.  We do not  expect the  adoption  of these  guidelines  to have a material
impact on our results of operations, financial position or cash flows.

Derivative Instruments and Hedging Activities
In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting for Derivative
Instruments and Hedging  Activities".  Among other provisions,  it requires that
entities  recognize  all  derivatives  as either  assets or  liabilities  in the
statement of financial  position and measure  those  instruments  at fair value.
Gains and losses resulting from changes in the fair values of those  derivatives
would be accounted  for  depending on the use of the  derivative  and whether it
qualifies for hedge accounting.  The effective date of this standard was delayed
via the issuance of SFAS No. 137,  "Accounting  for Derivative  Instruments  and
Hedging  Activities - Deferral of the Effective Date of FASB Statement No. 133 -
an amendment of FASB Statement  133". The effective date for SFAS No. 133 is now
for fiscal years  beginning  after June 15,  2000,  though  earlier  adoption is
encouraged  and  retroactive  application  is  prohibited.  This  means that the
standard  must be adopted by us no later than January 1, 2001.  We do not expect
the  adoption  of this  standard  will  have a  material  impact on  results  of
operations, financial position or cash flows.

Note C - Earnings Per Share

Basic  earnings per share is computed on the  weighted-average  number of common
shares  outstanding  during each period.  Diluted earnings per share is based on
the  weighted-average  number of common shares  outstanding plus net incremental
shares arising out of employee stock options and benefit plans. The following is
a  reconciliation  of the  weighted-average  share amounts (in millions) used in
calculating earnings per share:

                                         Second Quarter         Year-to-Date
                                         1999      2000        1999      2000
Basic common shares outstanding          1,891     1,882      1,912     1,881
Incremental shares from stock options       18        18         18        18
Diluted common shares outstanding        1,909     1,900      1,930     1,899

<PAGE>

                                   BELLSOUTH CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                        (Unaudited)
                                   (Dollars In Millions)

The earnings  amounts used for per-share  calculations are the same for both the
basic and diluted methods.

Note D - Workforce Reduction

In February  2000,  we announced  that we would reduce our domestic  general and
administrative staff by approximately 2,100 positions.  These reductions are the
result of the  streamlining of work processes in conjunction with our shift to a
more  simplified  management  structure.  As a result  of these  reductions,  we
recorded  a  one-time  charge  of $78,  or $48  after  tax,  for  severance  and
post-employment health benefits.

Note E - E-Plus Restructuring

In February  2000, we closed on a previously  announced  alliance with KPN Royal
Dutch  Telecom.  We  utilized  our right of first  refusal  that  enabled KPN to
acquire a 77.5  percent  interest  in E-Plus and  allows us the option  after 18
months of converting our 22.5 percent interest in E-Plus into either 200 million
shares of KPN or  shares  representing  at the time an  estimated  33.3  percent
ownership interest in KPN's wireless subsidiary.  We also have agreed to make up
to $3 billion of loans to KPN to be used for  further  wireless  investments  in
Europe and received non-detachable warrants to purchase approximately 90 million
additional shares of KPN.

As a result of this transaction, we recognized income of $143, or $68 after tax.
The gain relates to a settlement payment from the selling shareholder  regarding
a dispute  over the terms of the  E-Plus  shareholder  agreement  governing  the
provisions of the sale.

Note F - Asset Impairment Loss

In June 1999,  we executed a contract  with  Ericsson to replace  infrastructure
equipment,  including  switches,  base  stations  and  software,  in 14 wireless
markets in the  southeastern  United  States.  The new  equipment is intended to
improve  network  performance  and to lay the  foundation  for  migration of the
network to Third Generation  wireless (3G) and wireless Internet.  We expect the
conversion to be substantially completed by December 2000.

The  planned  disposals  of the  existing  infrastructure  equipment  require an
evaluation  of asset  impairment  in  accordance  with SFAS 121. As a result,  a
non-cash  charge of $320, or $187 after tax, was recorded in the second  quarter
of 1999 to write  these  assets  down to their  fair  market  value,  which  was
estimated by the expected  future cash flows of these assets through the date of
disposal.  We will continue to use the assets until the  conversion  process has
been completed and depreciate the remaining net book value over this period.

Note G - Devaluation of Brazilian Currency

In mid January 1999,  the  Brazilian  Government  changed its monetary  exchange
policy,  extinguishing  the exchange band through which it had managed the range
of the  fluctuation  of the Real in relation to the U.S.  Dollar,  allowing  the
market to freely  determine the exchange  rate. As a consequence of this change,
the Real devalued  significantly  in relation to the U.S.  Dollar in early 1999.
The devaluation and subsequent fluctuations in the exchange rate resulted in our
Brazilian wireless properties  recording net currency losses related to net U.S.
Dollar-denominated liabilities. Our share of the foreign currency losses for the
first quarter of 1999 was $280.

<PAGE>

                                   BELLSOUTH CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                        (Unaudited)
                                   (Dollars In Millions)

Note H - Segment Information

We have four reportable  operating segments:  (1) Wireline  communications;  (2)
Domestic  wireless;  (3)  International  operations;  and  (4)  Advertising  and
publishing.  We have  included the  operations of all other  businesses  falling
below the  reporting  threshold  in the "All other"  segment.  The  "Reconciling
items"  shown  below  include   Corporate   Headquarters   and  capital  funding
activities,   intercompany   eliminations  and  other  nonoperating  items.  The
following table provides information for each operating segment:
<TABLE>
<CAPTION>


                                   Second Quarter         %               Year-to-Date            %
                                  1999        2000      Change         1999         2000       Change
<S>                              <C>         <C>           <C>         <C>          <C>           <C>
Wireline communications
External revenues                $4,307      $4,595        6.7        $8,582       $9,099        6.0
Intersegment revenues               119          86      (27.7)          167          158       (5.4)
  Total revenues                 $4,426      $4,681        5.8        $8,749       $9,257        5.8
Operating income                 $1,390      $1,589       14.3        $2,803       $3,141       12.1
Segment net income               $  781      $  908       16.3        $1,582       $1,771       11.9

Domestic wireless
External revenues                  $796        $919       15.5        $1,540       $1,772       15.1
Intersegment revenues                 3           4       33.3             7            8       14.3
    Total revenues                 $799        $923       15.5        $1,547       $1,780       15.1
Operating income                   $102        $193       89.2        $  189       $  285       50.8
Net earnings (losses)
  of equity affiliates             $ 41        $ 48       17.1          $ 72         $ 80       11.1
Segment net income                 $ 71        $127       78.9          $131         $187       42.7

International operations
External revenues                  $565        $658       16.5        $1,126       $1,322       17.4
Intersegment revenues                --          10        N/M*           --           21        N/M
  Total revenues                   $565        $668       18.2        $1,126       $1,343       19.3
Operating income                   $ 70        $ 58      (17.1)       $  121         $ 56      (53.7)
Net earnings (losses)
  of equity affiliates             $ 21        $(29)       N/M         $  8         $(12)        N/M
Segment net income (loss)          $ 50        $(18)       N/M         $ 30         $ (4)        N/M

Advertising and publishing
External revenues                  $407        $471       15.7         $750         $835        11.3
Intersegment revenues                 3           6        N/M            6           11        83.3
  Total revenues                   $410        $477       16.3         $756         $846        11.9
Operating income                   $162        $199       22.8         $302         $344        13.9
Net earnings (losses)
  of equity affiliates             $ (4)       $  5        N/M         $(5)         $  4         N/M
Segment net income                 $ 98        $125       27.6         $182         $215        18.1

All other
External revenues                  $ 73        $109       49.3        $ 123         $ 211       71.5
Intersegment revenues                92         106       15.2          162           194       19.8
  Total revenues                   $165        $215       30.3        $ 285         $ 405       42.1
Operating loss                     $(68)       $(64)      (5.9)       $(152)        $(129)     (15.1)
Net earnings (losses)
  of equity affiliates            $ (1)       $ (1)         --        $  --         $ (1)        N/M
Segment net loss                  $(59)       $(53)      (10.2)       $(116)        $(99)      (14.7)

</TABLE>



*  Not Meaningful
<PAGE>


                                 BELLSOUTH CORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                      (Unaudited)
                                 (Dollars In Millions)

Note H - Segment Information (continued)
<TABLE>
<CAPTION>

                                Second Quarter           %                  Year-to-Date            %
                               1999        2000        Change            1999         2000       Change
<S>                             <C>         <C>          <C>              <C>          <C>          <C>
Reconciling items
External revenues              $  --       $  --          N/M            $  --        $  --         N/M
Intersegment revenues           (217)       (212)        (2.3)            (342)        (392)        14.6
  Total revenues               $(217)      $(212)        (2.3)           $(342)       $(392)        14.6
Operating income               $(342)      $ (28)         N/M            $(342)       $(127)       (62.9)
Net earnings (losses)
 of equity affiliates          $  --       $  (1)         N/M            $(284)       $  82         N/M
Segment net loss               $(155)      $ (25)         N/M            $(408)       $  (5)        N/M

Reconciliation to Consolidated Financial Information

Operating Revenues
Wireline communications        $4,426      $4,681          5.8           $8,749       $9,257         5.8
Domestic wireless                 799         923         15.5            1,547        1,780        15.1
International operations          565         668         18.2            1,126        1,343        19.3
Advertising and publishing        410         477         16.3              756          846        11.9
All other                         165         215         30.3              285          405        42.1
  Total segments                6,365       6,964          9.4           12,463       13,631         9.4
Reconciling items                (217)       (212)        (2.3)            (342)        (392)       14.6
Total consolidated             $6,148      $6,752          9.8          $12,121      $13,239         9.2

Net Income
Wireline communications          $781       $ 908         16.3           $1,582       $1,771        11.9
Domestic wireless                  71         127         78.9              131          187        42.7
International operations           50         (18)         N/M               30           (4)        N/M
Advertising and publishing         98         125         27.6              182          215        18.1
All other                         (59)        (53)       (10.2)             (116)        (99)      (14.7)
  Total segments                  941       1,089         15.7            1,809        2,070        14.4
Reconciling items                (155)        (25)         N/M             (408)          (5)        N/M
Total consolidated              $ 786     $ 1,064         35.4           $1,401       $2,065        47.4
</TABLE>


Note I - Investment Activity

Investment in Brazil
In May 2000, we completed  the purchase of a combination  of voting common stock
and American Depository Receipts representing  nonvoting preferred stock of Tele
Centro Oeste Celular Participacoes SA, a Brazilian company, for a total purchase
price of  approximately  $240.  Tele Centro Oeste provides  cellular  service in
central-west Brazil,  including Brasilia, as well as northern Brazil. The common
stock  portion of the  investment  represents  11.8% of the voting power of Tele
Centro Oeste.  The combined  investment in common and preferred stock represents
17.3% of the total  capital of Tele Centro Oeste.  This  investment is accounted
for under the cost  method,  subject  to the  guidelines  of  available-for-sale
securities under SFAS 115.

<PAGE>


                                BELLSOUTH CORPORATION
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                     (Unaudited)
                                (Dollars In Millions)

Note I - Investment Activity (continued)

Investment in Colombia

In June 2000, we acquired a 50.4% controlling equity interest in Celumovil S.A.,
a cellular  operator in the  Eastern and  Atlantic  regions in  Colombia,  for a
purchase  price of  approximately  $399,  funded by $299 of cash and a $100 note
payable due December  2000.  We have  commenced  cobranding  Celumovil  with the
BellSouth brand.  Celumovil/BellSouth  provides  wireless service in the Eastern
region of  Colombia,  which  includes  the  capital  city of Bogota,  and in the
Atlantic or coastal region.

In July 2000,  Celumovil/BellSouth acquired 100% of Cocelco, a wireless operator
that since 1994 has been serving the Western region of Colombia,  which includes
the cities of Medellin and Cali.  This  acquisition was funded by a $384 capital
contribution  and  a $30  shareholder  loan  from  BellSouth.  This  transaction
increased  BellSouth's  ownership  interest in Celumovil to 66.0%.  See note Q -
Subsequent Events.

Proposed Domestic Wireless Transaction
In April 2000, we announced plans to combine  substantially  all of our domestic
wireless  businesses with those of SBC  Communications  into a venture that will
comprise the nation's second largest wireless company. This venture,  which will
cover a total  population of 175 million people and serve more than 16.0 million
subscribers,  will be owned 40% by BellSouth and 60% by SBC  Communications  but
will be  jointly  controlled.  We  expect to  receive  the  required  regulatory
approvals and close the transaction by the end of 2000.

One of our domestic partners has sued to enjoin the contribution of our interest
in the PCS property in North and South Carolina to the venture. We do not expect
this action to delay the closing of the venture.


Note J - Marketable Securities

We have investments in marketable securities, primarily common stocks, which are
accounted for under the cost method.  These investments are comprised  primarily
of a 5% equity interest in Qwest and are classified as available-for-sale  under
SFAS 115.  Under SFAS 115,  available-for-sale  securities  are  required  to be
carried at their fair value,  with  unrealized  gains and losses,  net of income
taxes,  recorded  in  accumulated  other  comprehensive  income  (loss)  in  our
statement of changes in shareholders' equity and comprehensive  income. The fair
values of our  investments  in marketable  securities  are  determined  based on
market quotations.  The table below shows certain summarized information related
to these investments at June 30, 2000:

                                          Gross        Gross
                                        Unrealized    Unrealized
                              Cost         gains        losses      Fair Value

  Investment in Qwest         $3,500        $ 200         $ --        $ 3,700
  Other investments              458          167          (31)           594
      Total                   $3,958        $ 367         $(31)       $ 4,294

Note K - Sublease of Communications Towers

In June 1999, we signed a definitive  agreement with Crown Castle  International
Corporation for the sublease of all unused space on  approximately  1,850 of our
wireless  communications towers in exchange for $610 to be paid in a combination
of cash and Crown  common  stock.  As of June 30,  2000 we have  closed on 1,754
towers and received $577. Remaining towers covered by the agreement are expected
to be  subleased  throughout  the  remainder  of 2000.  We also  entered  into a
five-year, build-to-suit agreement with Crown covering up to 500 towers.

Under a similar  agreement,  Crown will  sublease  all  unused  space on 773 PCS
towers in exchange for $317 in cash.  As of June 30, 2000, we have closed on 706
towers and received $290. Remaining towers covered by the agreement are expected
to be subleased  throughout  the  remainder  of 2000.  In  connection  with this
agreement, we entered into an exclusive three-year, build-to-suit agreement.
<PAGE>


                              BELLSOUTH CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)
                              (Dollars In Millions)


Note L - Summary Financial Information for Equity Investees

The following table displays the summary combined  financial  information of our
equity method businesses. These amounts are shown on a 100-percent basis.

                          Second Quarter     %          Year-to-Date       %
                          1999     2000    Change      1999      2000    Change
Revenues                $1,250   $1,598     27.8     $2,459    $3,113    26.6
Operating income         $ 112    $ 173     54.5     $ 141     $  284     N/M
Net income (loss)        $  41    $  34    (17.1)    $(608)    $   72     N/M

Note M - Debt Issuance

In  February  2000 we issued $2  billion of  long-term  debt,  consisting  of $1
billion  of  Ten-year,  7 3/4%  Notes  and $1  billion  of  Thirty-year,  7 7/8%
Debentures.  We received  total  proceeds  of $1,974,  which were used to retire
commercial paper.

Note N - Contingencies

Following the  enactment of the  Telecommunications  Act of 1996,  our telephone
company  subsidiary,  BellSouth  Telecommunications,  Inc.  (BST),  and  various
competitive  local exchange  carriers  entered into  interconnection  agreements
providing for, among other things,  the payment of reciprocal  compensation  for
local calls  initiated by the customers of one carrier that are completed on the
network of the other carrier.  Numerous  competitive local carriers have claimed
entitlement from BST for compensation  associated with dial-up calls originating
on BST's network and connecting with Internet  service  providers  served by the
competitive local carriers'  networks.  BST has maintained that dial-up calls to
Internet   service   providers  are  not  local  calls  for  which   terminating
compensation is due under the interconnection agreements.

In February 1999, the FCC issued a decision that such traffic does not terminate
at the Internet service provider and, therefore, is interstate in nature, rather
than local.  The FCC stated,  however,  that it would not  interfere  with prior
state  commissions'  decisions  regarding  this  matter.  The  courts  and state
regulatory  commissions in BST's  operating  territory that have  considered the
matter have, in most cases,  ruled that BST is responsible for paying reciprocal
compensation  on  these  calls.  BST has  appealed  the  adverse  decisions  and
continues to believe  that it has a good legal basis for its position  that such
reciprocal compensation is not owed to the competitive local carriers. For those
cases where BST believes it is probable that it has incurred a liability, it has
recorded an estimate of the amount owed. At June 30, 2000, the exposure  related
to unrecorded amounts withheld from competitive local carriers was approximately
$310, including accrued interest.

In March 2000, the United States Court of Appeals for the D.C.  Circuit  vacated
and  remanded  the FCC  decision,  concluding  that  the FCC had not  adequately
explained its finding that Internet  service  provider  traffic was  interstate.
Based on  statements  made by the FCC  since  the  court's  decision,  we do not
believe  that this most recent  court  decision  adversely  affects the ultimate
outcome of pending state proceedings. Nonetheless, we have commenced discussions
with several  competitive local carriers  concerning  settlement of some claims,
and agreements have been reached in certain circumstances.
<PAGE>


                              BELLSOUTH CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)
                              (Dollars In Millions)

Note N - Contingencies (continued)

Other reciprocal compensation issues
In a related  matter,  a  competitive  local  carrier was  claiming  terminating
compensation  of  approximately  $165 for service  arrangements  that we did not
believe  involved  "traffic" under our  interconnection  agreements.  We filed a
complaint  with the state  regulatory  commission  asking that agency to declare
that we did not owe reciprocal  compensation  for these  arrangements.  In March
2000, the state commission ruled in our favor finding that  compensation was not
owed to the competitive local carrier. This matter is currently on appeal.

Note O - Tracking Stock

In March 2000, we filed with the SEC a preliminary proxy statement relating to a
special  shareholders'  meeting  to  approve  amendments  to  our  charter.  The
amendments  would  permit us to issue our common  stock in series,  of which our
Board of Directors  would  initially  designate  two: Latin America group stock,
intended to reflect the separate  performance of our Latin American  businesses,
and BLS group stock,  intended to reflect the separate performance of all of our
other businesses.  We have also filed a registration  statement for the offering
of shares of Latin  America  group  stock for sale to the public.  Both  filings
remain subject to further review by the SEC.

We plan to authorize a public offering of shares of Latin America group stock to
finance our  expansion in Latin  America.  At the time of a public  offering,  a
number of shares of Latin America group stock will be reserved for the BLS group
or for  issuance  to the  holders of BLS group  stock.  We expect  that we would
distribute, as a dividend to the holders of BLS group stock, the reserved shares
of Latin  America  group  stock  within  six to 12 months  following  the public
offering.

Our plans to create,  issue and distribute Latin America group stock are subject
to a number of  conditions,  including  completion  of the SEC  review  process,
shareholder approval, market conditions and other factors.


Note P - Satellite Leases

In May 2000, we signed a long-term satellite service agreement with GE Americom,
a GE  Capital  company.  As a result of this  agreement,  we are able to offer a
full-suite of digital home entertainment and interactive information services to
over 14 million households in our service territory. We plan to roll out service
in our top markets  within the next year and expand  throughout the southeast by
the first half of 2002.

Note Q - Subsequent Events

Through   a   purchase   on  the   Bogota   stock   exchange   in   July   2000,
Celumovil/BellSouth  acquired  100 percent of the shares of Cocelco,  a wireless
communication services provider in the western region of Colombia.

This acquisition was funded by a $384 capital contribution and a $30 shareholder
loan from BellSouth,  resulting in an increase in BellSouth's ownership interest
in Celumovil  to 66.0%.  The  transaction  creates the first  nationwide  mobile
cellular communications operator in Colombia.
<PAGE>


                              BELLSOUTH CORPORATION
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                 (Dollars in Millions, Except Per Share Amounts)

For a more complete  understanding of our industry,  the drivers of our business
and our  current  period  results,  you should read the  following  Management's
Discussion  and Analysis of Financial  Condition  and Results of  Operations  in
conjunction  with our latest annual  report on Form 10-K and previous  quarterly
report on Form 10-Q.

-------------------------------------------------------------------------------
Consolidated Results of Operations
-------------------------------------------------------------------------------

Key  financial  and  operating  data for second  quarter 2000 and 1999,  and the
respective  year-to-date  periods are as follows. All references to earnings per
share are on a diluted basis:
<TABLE>
<CAPTION>

                                             ----------------------- ------------ --- ------------------------- ------------
                                                 Second Quarter           %                 Year-to-Date
                                             ----------- -----------              --- ------------ ------------      %
                                                1999        2000       Change            1999         2000        Change
                                             ----------- ----------- ------------ --- ------------ ------------ ------------
<S>                                              <C>         <C>             <C>          <C>          <C>              <C>
Results of operations:
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Operating revenues                               $6,148      $6,752          9.8          $12,121      $13,239          9.2
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Operating expenses                                4,834       4,805        (0.6)            9,200        9,669          5.1
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Operating income                                  1,314       1,947         48.2            2,921        3,570         22.2
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Interest expense                                    245         332         35.5              471          638         35.5
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Net earnings (losses) of equity affiliates           57          22         N/M*            (209)          153          N/M
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Gain on sale of operations                           16          --          N/M               16           --          N/M
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Other income, net                                   114          46          N/M              173          129       (25.4)
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Provision for income taxes                          470         619         31.7            1,029        1,149         11.7
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
         Net income                               $ 786      $1,064         35.4          $ 1,401      $ 2,065         47.4
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------

-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
As Reported:
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
   Net income                                      $786      $1,064         35.4          $ 1,401      $ 2,065         47.4
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
   Earnings per share                             $ .41       $ .56         36.6            $ .73       $ 1.09         49.3
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Normalized:
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
   Net income                                      $973      $1,064          9.4          $ 1,868      $ 2,045          9.5
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
   Earnings per share                             $ .51       $ .56          9.8            $ .97       $ 1.08         11.3
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------

-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Cash flow data:
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Cash provided by operating activities             2,451       2,448           --           4,093        4,798         17.2
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Cash used for investing activities              (5,194)     (2,239)          N/M          (6,652)      (3,795)          N/M
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Cash provided by (used for) financing
activities                                        1,560         157          N/M              172        (770)          N/M
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------

-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Other:
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Effective tax rate                                37.4%       36.8%       -60bps            42.3%        35.8%      -650bps
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
Average debt balances:
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
   Short-term debt                               $5,848      $5,607        (4.1)           $5,025       $6,212         23.6
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
   Long-term debt                                $8,401     $11,029         31.3           $8,487      $10,469         23.4
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
     Total average debt balance                 $14,249     $16,636         16.8          $13,512      $16,681         23.4
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
EBITDA(1)                                        $2,789      $3,187         14.3          $ 5,509       $6,106         10.8
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
EBITDA margin(2)                                  45.4%       47.2%      +180bps            45.5%        46.1%       +60bps
-------------------------------------------- ----------- ----------- ------------ --- ------------ ------------ ------------
</TABLE>

(1)  EBITDA  represents  income  before  net  interest  expense,  income  taxes,
     depreciation and amortization,  provision for asset  impairment,  severance
     accrual,  net earnings (losses) of equity affiliates and other income, net.
     We present EBITDA because it is a widely accepted financial  indicator used
     by certain  investors and analysts to analyze and compare  companies on the
     basis of  operating  performance  and because we believe  that EBITDA is an
     additional meaningful measure of performance and liquidity. EBITDA does not
     represent cash flows for the period,  nor is it an alternative to operating
     income  (loss) as an  indicator of  operating  performance.  You should not
     consider it in  isolation or as a  substitute  for measures of  performance
     prepared in accordance with generally accepted accounting  principles.  The
     items excluded from the calculation of EBITDA are significant components in
     understanding and assessing our financial  performance.  Our computation of
     EBITDA  may  not be  comparable  to the  computation  of  similarly  titled
     measures of other companies.  EBITDA does not represent funds available for
     discretionary  uses.

(2)  EBITDA  margin is EBITDA  divided  by  operating revenues.


* Not Meaningful
<PAGE>

-------------------------------------------------------------------------------
Overview of consolidated results of operations
-------------------------------------------------------------------------------

On a  comparative  basis,  results  reflect  strong  revenue  growth in the core
wireline  business driven by digital and data services  revenues and significant
increases in our international  and domestic  wireless  customer bases.  Expense
growth was driven by volume increases at our international and domestic wireless
businesses  and  expenses  for   development   and  promotion  of  new  business
initiatives, including high-speed data and Internet service offerings.

There were no normalizing items for the second quarter 2000.

Normalized results for year-to-date 2000 exclude the impacts of:

 .    Income related to the restructuring of our ownership interest in the German
     wireless operator,  E-Plus, which increased net income by $68, or $0.04 per
     share. This gain is included in Net Earnings (Losses) of Equity Affiliates.
     See note E to our  consolidated  interim  financial  statements for further
     discussion of this matter; and

 .    Expense recorded as a result of our previously announced plan to reduce our
     domestic general and administrative staff, which reduced net income by $48,
     or $0.03  per  share.  See  note D to our  consolidated  interim  financial
     statements for further discussion of this matter.

Normalized  results  for  second  quarter  1999  exclude  the impact of an asset
impairment  loss, which reduced net income by $187, or $0.10 per share. See note
F to our consolidated  interim  financial  statements for further  discussion of
this matter.

In addition to the asset impairment during the second quarter,  the year-to-date
1999  normalized  results exclude the impact of the devaluation of the Brazilian
Real.  Our  share of the  foreign  currency  losses  in our  Brazilian  wireless
properties  reduced  net income by $280,  or $0.15 per share.  These  losses are
included  in Net  Earnings  (Losses)  of  Equity  Affiliates.  See note G to our
consolidated interim financial statements for further discussion of this matter.


Operating Revenues

Operating  revenues increased $604 during second quarter 2000 and $1,118 for the
year-to-date period. The increase reflects:

 .    growth in our  wireline  communications  operations  spurred  by demand for
     digital and data services and convenience features;

 .    growth from higher  access,  airtime and  equipment  sales in our  domestic
     wireless  operations  driven by a 16.0% expansion in the customer base from
     second quarter 1999 to second quarter 2000;

 .    higher revenues from our international  operations resulting from growth in
     the customer  bases of our current  operations,  which  customer bases grew
     72.7% from second quarter 1999 to second quarter 2000;

 .    the addition of new  international  directory  publishing  businesses since
     first  quarter  1999,  volume  growth and price  increases  in our domestic
     advertising  and  publishing  operations,  and  increases in revenues  from
     electronic media offerings; and

 .    growth in new lines of business.

Growth in wireline revenues was offset by the effects of rate impacts related to
access charge reform and  competition  in the long  distance  market.  Growth in
international  revenues  attributable to customer growth was partially offset by
changes in foreign  currency rates and decreases in average  monthly revenue per
customer  driven by penetration  into lower usage market  segments and a growing
percentage of customers  selecting  lower-volume  prepaid services.  The average
monthly  revenue per  international  wireless  customer  decreased 38.6% for the
quarter and 37.3% for the year-to-date period.


Operating Expenses

Total operating  expenses decreased $29 during second quarter 2000 and increased
$469 during the year-to-date  period.  Operating  expenses for year-to-date 2000
include a $78 severance accrual related to a previously announced plan to reduce
our domestic general and administrative  staff.  Second quarter and year-to-date
1999  expenses  included a $320 charge to write down  network  equipment  in the
domestic wireless  operations.  Excluding these items,  total operating expenses
increased $291 during second quarter and $711 year-to-date.

Operational  and  support  expenses  increased  $206 during the quarter and $521
year-to-date as a result of increased spending in the core wireline business for
customer service and network support functions,  volume-driven  increases at our
international and domestic wireless  businesses and expenses for development and
promotion of new business  initiatives,  including  high-speed data and Internet
service  offerings.  Operational  and  support  expenses  of  our  international
operations  were  favorably  impacted  by the  weakening  of foreign  currencies
against the U.S. Dollar.  Depreciation  and  amortization  increased $85 for the
quarter and $190 for the year-to-date  period primarily as a result of additions
of  property,   plant  and  equipment  to  support  expansion  of  our  wireline
communications and international wireless networks.

Interest expense

Higher interest  expense in 2000 is attributable to higher average debt balances
resulting  from  borrowings  associated  with the financing of our investment in
Qwest and increases in interest rates.

Gain on sale of operations

During  second  quarter  1999,  we  recognized  a gain of $16 from the sale of a
wireless property in Alabama.

Net earnings (losses) of equity affiliates

Earnings from our unconsolidated businesses decreased $35 in second quarter 2000
and increased $362 on a year-to-date  comparative  basis. The year-to-date  2000
period  results  include  $68 in  income  related  to the  restructuring  of our
ownership  interest  in  our  German  wireless  operations.  See  note  E to the
consolidated interim financial statements for further discussion of this matter.
The year-to-date 1999 period includes foreign exchange losses of $280 related to
our  Brazilian  properties.  See note G to the  consolidated  interim  financial
statements for further discussion of this matter.  Excluding the impact of these
items,  year-to-date 2000 earnings  increased $14 when compared to the same 1999
period.  These  results  are  addressed  in the  discussions  for  the  Domestic
wireless, International operations and All other segments.

Other income, net

Other income,  net includes  interest  income,  gains/losses  on  disposition of
assets, foreign currency gains/losses and miscellaneous nonoperating income. The
decrease  of $68 for the  quarter is  attributable  to lower  minority  interest
income  of $16  related  to our  less-than-100-percent  owned  subsidiaries  and
decreased other non-operational  income,  primarily gains from cellular property
exchanges. The decrease for the quarter also included increased foreign currency
losses  of  $16.  The  year-to-date  decrease  of $44 is  attributable  to a $15
decrease in interest income and decreased other non-operational income.

Provision for income taxes

The provision for income taxes increased $149 quarter-over-quarter and $120 on a
year-to-date  comparative  basis. Our effective tax rate decreased from 37.4% in
second  quarter  1999 to 36.8% in  second  quarter  2000.  The  decrease  in the
effective tax rate is due primarily to the  recognition  of tax  incentives  and
more favorable results from equity-method  investees,  which are recorded net of
tax benefits or expense.

For the year-to-date  period, the effective tax rate was 35.8% compared to 42.3%
in 1999.  Year-to-date 2000 results were favorably impacted by additional income
related to the restructuring of our ownership in our German wireless operations.
Year-to-date  1999 results were unfavorably  impacted by foreign currency losses
recorded at our unconsolidated  Brazilian businesses.  Excluding these and other
special items, our effective rate was 38.1% for the 1999 year-to-date period and
36.6% for the 2000 year-to-date  period.  The decrease in the effective rate for
the  year-to-date  period is due to the  recognition  of tax incentives and more
favorable results from equity-method investees.


-------------------------------------------------------------------------------
Results by Segment
-------------------------------------------------------------------------------

Our  reportable  segments  reflect  strategic  business units that offer similar
products and services  and/or serve similar  customers.  We have four reportable
operating segments:

 .        Wireline communications;
 .        Domestic wireless;
 .        International operations; and
 .        Advertising and publishing.

We have  included  the  operations  of all other  businesses  falling  below the
reporting  threshold in the "All other" segment.  We evaluate the performance of
each  business  unit  based  on net  income,  exclusive  of  charges  for use of
intellectual  property  rights and adjustments for special items that may arise.
Special  items  are  transactions  or  events  that  are  included  in  reported
consolidated  results  but  are  excluded  from  segment  results  due to  their
nonrecurring or nonoperational nature.

The  results of  businesses  in which we own  noncontrolling  interests  are not
included in our  reported  revenues  and  expenses  but are  included in the Net
earnings (losses) of equity affiliates line item.

Wireline Communications

Wireline  communications  includes local exchange,  network access and intraLATA
long  distance  services   provided  by  wireline   transport  to  business  and
residential customers in a nine-state region located in the southeastern U.S.
<TABLE>
<CAPTION>

-------------------------------------------- ------------------------ ----------- ----- ------------------------ -----------
                                                 Second Quarter           %                  Year-to-Date            %
                                             ------------------------                   ------------------------
                                                1999         2000       Change             1999        2000        Change
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
<S>                                               <C>         <C>            <C>            <C>          <C>            <C>
Results of Operations
Operating revenues:
   Local service                                  $2,712      $2,862         5.5            $5,366       $5,683         5.9
   Network access                                  1,187       1,245         4.9             2,378        2,508         5.5
   Long distance                                     153         131      (14.4)               303          266      (12.2)
   Other wireline                                    255         357        40.0               535          642        20.0
   Intersegment revenues                             119          86      (27.7)               167          158       (5.4)
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
       Total operating revenues                   $4,426      $4,681         5.8            $8,749       $9,257         5.8
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
Operating expenses                                $3,036      $3,092         1.8            $5,946       $6,116         2.9
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
Operating income                                  $1,390      $1,589        14.3            $2,803       $3,141        12.1
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
Segment net income                                 $ 781       $ 908        16.3            $1,582       $1,771        11.9
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------

-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
Key Indicators
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
Access line counts (000s):
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
   Switched access lines:
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
      Residential                                 16,782      17,189         2.4
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
      Business                                     7,316       7,198       (1.6)
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
      Other                                          272         260       (4.4)
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
   Total switched access lines                    24,370      24,647         1.1
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
    Access line equivalents (1)                   15,605      23,649        51.5
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
      Total equivalent access lines               39,975      48,296        20.8
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------

-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
Access minutes of use (millions)                  27,627      28,798         4.2            54,452       57,514         5.6
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
Long distance messages (millions)                    168         129      (23.2)               345          265      (23.2)
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
Digital and data services revenues                 $ 685        $869        26.9            $1,306       $1,680        28.6
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
Convenience feature revenues                       $ 477        $532        11.5             $ 921       $1,047        13.7
-------------------------------------------- ------------ ----------- ----------- ----- ----------- ------------ -----------
</TABLE>

(1) 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 data 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, growth rates cannot be compared on an equivalent
basis.

Operating Revenues

Local service
The increases in local service revenues of $150 for second quarter 2000 and $317
for the year-to-date  period are attributable to growth in switched access lines
and strong demand for digital and data services and convenience features.

We ended the second quarter with over 48 million total equivalent  access lines,
an increase of 20.8% since June 30, 1999.  Residential access lines rose 2.4% to
17,189,000, driven by economic growth in our nine-state region as well as demand
for  secondary  residence  lines  which  accounted  for  42.2% of the  growth in
residential access lines. We added 172,000 secondary  residence lines since June
30, 1999,  extending  the total to over 2.5 million lines and ending the current
period with a penetration rate of 17.1%.  Business access lines,  including both
switched  access  lines and data  circuits,  grew 34.6%,  propelled by expanding
demand  for our  digital  and data  services.  Switched  business  access  lines
decreased  1.6%  reflecting  continued  migration of new and  existing  business
customers to high-capacity data lines.

Revenues  from  optional  convenience  features such as Caller ID, Call Waiting,
Call Return and voicemail service increased $55, or 11.5%,  quarter-over-quarter
and $126, or 13.7%, on a year-to-date  comparative  basis.  These increases were
driven by growth in  convenience  feature usage  through our Complete  Choice(R)
Package, a one-price bundled offering of over 20 services.

Increased  penetration of extended local area calling plans also increased local
service  revenues by  approximately  $45 compared to second quarter 1999 and $94
compared to the first six months of 1999.

Network access
Network  access  revenues grew $58 in the second  quarter and $130 for the first
six months of 2000 when compared to the same 1999 periods, due largely to higher
demand. Access minutes of use rose 4.2% to 28,798 million in second quarter 2000
from 27,627 million in second quarter 1999. For the year-to-date period,  access
minutes of use grew 5.6% to 57,514  million in 2000 from 54,452 million in 1999.
Increases in switched access lines and  promotional  activities by long distance
carriers  continue to be the primary  drivers of the increase in minutes of use.
Year-to-date  2000  growth  in  minutes  was  also  positively  impacted  by the
additional day of activity resulting from the leap year.

The growth rate in total minutes of use  continues to be negatively  impacted by
the trend of business customers migrating from traditional  switched circuits to
higher  capacity data line offerings  which are  fixed-charge  based rather than
minute-of-use  based.  Revenues  from  these  dedicated  circuit  services  grew
approximately  $78  quarter-over-quarter  and $137 year-to-date on a comparative
basis as Internet service providers and high-capacity  users increased their use
of our  network.  The  growth  rate in  switched  minutes  of use has also  been
negatively  impacted by competition  from  competitive  local exchange  carriers
whose traffic completely bypasses our network.

Volume-related  growth was largely  offset by net rate  impacts  that  decreased
revenues by $68  compared  to second  quarter  1999 and by $133  compared to the
first six months of 1999.  These rate  reductions  are primarily  related to the
FCC's access reform and  productivity  factor  adjustments.  The reductions were
partially  offset by recoveries of local number  portability  costs in both 2000
periods.

Long distance
The $22 decrease for the quarter and $37  decrease for the  year-to-date  period
compared to the same 1999 periods are primarily attributable to a 23.2% decrease
in long distance message volumes.  For the year-to-date  period, the decrease in
revenues  attributable  to loss of message  volumes  was offset by a $30 revenue
reduction in 1999 for a regulatory  ruling  related to  compensation  we receive
from long distance carriers for  interconnection  to our public payphones.  Also
offsetting the decreases  were increased  revenues from the provision of digital
and data services of $4 for the quarter and $11 for the year-to-date period.

Competition  and  increased  penetration  of extended  local area calling  plans
continue to have an adverse  impact on the number of customers  who use our long
distance  service and ultimately  reduce our long distance  message  volumes and
revenues.  We believe that  competition  will  continue to adversely  impact our
customer base, and  ultimately  our long distance  message  volumes and revenues
until we are granted full long distance relief under the  Telecommunications Act
of 1996.

Other  wireline  and  intersegment  revenues
Other wireline and intersegment  revenues  increased 18.4%,  from $374 in second
quarter 1999 to $443 in second quarter 2000. For the year-to-date  period, these
revenues  increased 14.0%, from $702 in 1999 to $800 in 2000. Higher revenues of
$111 for the quarter and $178 for the year-to-date  period  resulting  primarily
from  resale  of  paging  products  and  services,  sales of  unbundled  network
elements, collocation of competing carriers' equipment in our facilities, demand
for our Internet access offering,  interconnection  charges to wireless carriers
and proceeds from  universal  service funds were offset by decreases in revenues
from sales of  customer  premises  equipment.  At June 30,  2000 we had  788,000
subscribers  to our  BellSouth  Internet  Service  (sm),  an  increase  of 39.4%
compared to the same 1999 period.  Decreases in intersegment revenues of $33 for
the quarter and $9 for the  year-to-date  period  primarily  represent  one-time
transactions with affiliates in the prior year.

Operating Expenses

Operational and support expenses
Operational and support expenses  increased $2, or 0.1%, for second quarter 2000
and  increased  $68, or 1.6%,  for the first six months of 2000 when compared to
the same 1999 periods. These increases were primarily attributable to reciprocal
compensation,  volume-related  increases in  interconnection  expense and higher
payments to FCC mandated universal access funds totaling $38 for the quarter and
$163 for the  year-to-date  period.  These  increases were offset by $38 for the
quarter and $61 for the year-to-date  period for lower pension and benefit costs
attributable to favorable  pension plan investment  returns.  The increases were
further offset by reductions of $18 for the quarter and $54 for the year-to-date
period in  contract  service  expense  and  volume-driven  costs  from  sales of
customer premises equipment and paging equipment.

Also contributing to the increase were expenses related to new data initiatives,
including high-speed Internet access and optical fiber-based broadband services,
and  promotional  expenses  related to expanding our Internet  customer base. We
have made high-speed Internet access available in 31 markets with an addressable
market of  approximately  9 million  access  lines,  and we plan to increase the
addressable  market to 11.5 million  access lines by the end of 2000. In January
2000, we began offering a self-install  kit for  high-speed  Internet  access in
seven cities and are planning to expand these  offerings to additional  areas in
the southeastern U.S. We are deploying optical fiber-based broadband products in
nearly all newly built  neighborhoods  and are also  retrofitting  some  200,000
existing homes in Atlanta and Miami.

Depreciation and amortization
Depreciation and amortization expense increased $54, or 6.4%, for second quarter
2000 and $102,  or 6.1%,  for the first six months of 2000 when  compared to the
same 1999 periods.  The increases are primarily  attributable to amortization of
capitalized internally developed software and depreciation resulting from higher
levels of net property, plant and equipment.








Domestic Wireless

Domestic wireless is comprised of cellular and personal  communications  service
(PCS) businesses principally within the southeastern U.S.
<TABLE>
<CAPTION>

-------------------------------------------------- ----------------------- ------------ ----- ----------------------- -----------
                                                       Second Quarter           %                  Year-to-Date           %
                                                   -----------------------                    -----------------------
                                                      1999        2000       Change              1999        2000       Change
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
<S>                                                     <C>         <C>           <C>             <C>         <C>           <C>
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
External revenues                                       $ 796       $ 919         15.5            $1,540      $1,772        15.1
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Intersegment revenues                                       3           4         33.3                 7           8        14.3
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
       Total operating revenues                         $ 799       $ 923         15.5            $1,547      $1,780        15.1
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Operating expenses                                      $ 697       $ 730          4.7            $1,358      $1,495        10.1
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Operating income                                        $ 102       $ 193         89.2             $ 189       $ 285        50.8
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Net earnings (losses) of equity affiliates               $ 41        $ 48         17.1              $ 72        $ 80        11.1
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Segment net income                                       $ 71       $ 127         78.9             $ 131       $ 187        42.7
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------

-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Customers (a)                                           4,724       5,482         16.0
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Average monthly revenue per customer (a)                 $ 51        $ 52          2.0              $ 51        $ 52         2.0
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
</TABLE>

(a) The amounts  shown are for our  consolidated  properties  and do not include
customer data for our unconsolidated properties.

Operating Revenues

Total operating revenues grew $124, or 15.5%,  quarter-over-quarter and $233, or
15.1%,  on a  year-to-date  basis when compared to the same 1999  periods.  This
growth is attributable  to higher  airtime,  access and equipment sales revenues
driven  by a 16.0%  increase  in the  customer  base.  Adjusted  for the sale of
Honolulu  Cellular  in August  1999,  the  customer  growth rate would have been
19.2%.  Customer  growth  since 1999 has been  driven by  advertising,  enhanced
volume pricing strategies such as one-rate plans, bundled minutes at lower rates
and prepaid calling plans and competitive  incentive programs such as discounted
wireless  handsets.  Average monthly usage by customers  increased during second
quarter 2000 and on a year-to-date  basis,  and, when combined with the increase
in total  customers,  drove  increases in total minutes of use.  Average monthly
revenue per customer  remained  relatively  flat,  due  primarily to declines in
per-minute rates in response to competition.  The declines in average per-minute
rates  occurred  as we  expanded  our product  offering  and further  penetrated
lower-usage  market  segments.  We expect rates to continue  decreasing  as more
customers opt for our one-rate plans and other bundled-minute packages.

We expect  competition  to continue to  intensify  and  pressure  pricing in our
markets.  We believe this will further stimulate  customer growth and demand and
continue to increase usage as the overall market is expanded.

Operating Expenses

Operational and support expenses
Operational and support expenses  increased $44, or 8.1%,  during second quarter
2000 and $128, or 12.0%, on a year-to-date  basis when compared to the same 1999
periods.  These increases are due to higher customer  acquisition costs,  higher
network  costs  associated  with network usage and costs related to new customer
promotions. Customer acquisition costs increased as a result of increases in net
customer  additions  of 91.8% for the  quarter  and  61.5% for the  year-to-date
period.  Network  usage and the related  expense  have  increased as a result of
customer and volume growth in established markets.

Depreciation and amortization
Depreciation  and  amortization  decreased  $11, or 7.1%,  to $144 during second
quarter 2000 and  increased $9, or 3.1%,  to $302  year-to-date  compared to the
same 1999 periods. Depreciation expense in 2000 has been favorably impacted by a
lower asset base,  resulting from our equipment  exchange  program  initiated in
June 1999.


Net Earnings (Losses) of Equity Affiliates

Compared to the same 1999 periods, second quarter 2000 and year-to-date 2000 net
earnings  (losses)  of  unconsolidated  domestic  wireless  businesses  remained
relatively  flat.  Higher earnings at our business in Los Angeles were offset by
decreases in earnings at other properties.

International Operations

International operations is comprised principally of our investments in cellular
and PCS  businesses  in ten  countries  in Latin  America as well as in Denmark,
Germany,  India and Israel.  Consolidated  operations  include our businesses in
Argentina,  Chile, Ecuador,  Nicaragua, Peru and Venezuela. All other businesses
are accounted for under the equity  method,  and  accordingly  their results are
reported as Net earnings (losses) of equity affiliates.

<TABLE>
<CAPTION>

-------------------------------------------------- ----------------------- ------------ ----- ----------------------- -----------
                                                       Second Quarter           %                  Year-to-Date           %
                                                   -----------------------                    -----------------------
                                                      1999        2000       Change              1999        2000       Change
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
<S>                                                     <C>         <C>           <C>             <C>         <C>           <C>
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
External revenues                                       $ 565       $ 658         16.5            $1,126      $1,322        17.4
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Intersegment revenues                                      --          10          N/M                --          21         N/M
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
       Total operating revenues                         $ 565       $ 668         18.2            $1,126      $1,343        19.3
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Operating expenses                                      $ 495       $ 610         23.2            $1,005      $1,287        28.1
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Operating income                                         $ 70        $ 58       (17.1)             $ 121        $ 56      (53.7)
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Net earnings (losses) of equity affiliates               $ 21      $ (29)          N/M              $  8       $(12)         N/M
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Segment net income (loss)                                $ 50      $ (18)          N/M              $ 30       $ (4)         N/M
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------

-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Customers (a)                                           3,233       5,584         72.7
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Average monthly revenue per customer (a)                 $ 57        $ 35       (38.6)              $ 59        $ 37      (37.3)
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
</TABLE>

(a) The amounts  shown are for our  consolidated  properties  and do not include
customer data for our unconsolidated properties.


Operating Revenues

The increase of $103 quarter-over-quarter and $217 year-to-date on a comparative
basis are  primarily  due to  substantial  growth in the  customer  bases of our
consolidated operations,  which collectively have increased 72.7% since June 30,
1999.  Partially  offsetting the impacts of customer growth is declining monthly
revenue per customer  that is driven by  continued  expansion  into  lower-usage
customer  segments  through  offerings  such as  prepaid  cellular  service  and
competitive  pressures  in  certain  countries.  We now offer  prepaid  cellular
products to all of the  countries we serve in Latin  America.  Revenues from our
operations  in  Nicaragua  that were  consolidated  for the first  time in first
quarter 2000  contributed  $12 to the increase in second quarter 2000 and $22 to
the increase for 2000 year-to-date.

A stronger U.S. Dollar against  foreign  currencies has had a negative impact on
reported revenues.  Absent changes in foreign currency exchange rates,  reported
revenues would have increased $184 for the quarter and $390 for the year-to-date
period.

Operating Expenses

Operational and support expenses
For the 2000 periods,  these  expenses  increased $95 compared to second quarter
1999 and $241  compared  to the first six months of 1999.  These  increases  are
primarily the result of operational and customer  acquisition  costs  associated
with growth in customer levels and expanded operations. Since June 30, 1999, our
existing operations have added almost 2.2 million customers in Argentina,  Chile
and Venezuela.  We have also added 200,000 customers through the acquisition and
development of businesses in Ecuador, Nicaragua and Peru.

Operational and support expenses  denominated in local currencies were favorably
impacted by the weakening of foreign currencies against the U.S. Dollar.  Absent
changes in foreign  currency  exchange rates,  reported  operational and support
expenses would have increased $142 for the quarter and $353 for the year-to-date
period.

Depreciation and amortization
Depreciation   expense   increased  $15   quarter-over-quarter   and  $34  on  a
year-to-date  comparative  basis primarily due to higher gross depreciable plant
resulting from the continued investment in our wireless network  infrastructure.
Amortization expense increased $5 quarter-over-quarter  and $7 on a year-to-date
comparative  basis as a result of growth in intangibles  related to our purchase
of additional ownership interests in several Latin American operations.

Net Earnings (Losses) of Equity Affiliates

Net earnings (losses) from our international  equity affiliates decreased $50 to
$(29) in second  quarter  2000 and $20 to $(12)  during  the first six months of
2000. The decline in our unconsolidated international businesses is due to lower
results from our  investments  in Brazil and Germany.  Both of these  businesses
experienced  significant increases in operational and customer acquisition costs
resulting from  substantial  growth in their customer  bases.  In addition,  the
impact of foreign currency  fluctuations in Brazil for second quarter 2000 was a
loss of $29 and year-to-date 2000 was a loss of $19.

Advertising and Publishing

Our advertising and publishing segment is comprised of companies in the U.S. and
Latin America that  publish,  print,  sell  advertising  in and perform  related
services  concerning  alphabetical  and  classified  telephone  directories  and
electronic product offerings.
<TABLE>
<CAPTION>

-------------------------------------------------- ----------------------- ------------ ----- ----------------------- -----------
                                                       Second Quarter           %                  Year-to-Date           %
                                                   -----------------------                    -----------------------
                                                      1999        2000       Change              1999        2000       Change
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
<S>                                                     <C>         <C>           <C>              <C>         <C>          <C>
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
External revenues                                       $ 407       $ 471         15.7             $ 750       $ 835        11.3
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Intersegment revenues                                       3           6          N/M                 6          11        83.3
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
       Total operating revenues                         $ 410       $ 477         16.3             $ 756       $ 846        11.9
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Operating expenses                                      $ 248       $ 278         12.1             $ 454       $ 502        10.6
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Operating income                                        $ 162       $ 199         22.8             $ 302       $ 344        13.9
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Net earnings (losses) of equity affiliates               $(4)         $ 5          N/M              $(5)         $ 4         N/M
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Segment net income                                       $ 98       $ 125         27.6             $ 182       $ 215        18.1
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
</TABLE>


Operating Results

External revenues increased $64 for second quarter 2000 and $85 for year-to-date
2000 when compared to the same 1999 periods.  These  increases are principally a
result of revenues  from our new  directory  publishing  operations  in Peru and
Brazil totaling $31 for second quarter and $45 for the year-to-date  period. The
growth is also attributable to volume growth and price increases in the domestic
operations,  offset by the effects of shifts in directory production  schedules.
Adjusted  for book  shifts,  external  revenues  for  this  segment  would  have
increased by approximately  15.9% for the quarter and 13.4% for the year-to-date
period.  Also  contributing are increases of $10 for the quarter and $20 for the
year-to-date period in the revenues from our electronic media offerings.

Operational and support  expenses  increased $28 for second quarter 2000 and $42
for  year-to-date  2000 when compared to the same 1999 periods.  These increases
are primarily due to our new operations in Peru and Brazil  totaling $33 for the
quarter and $56 for the year-to-date  period. Also contributing to the increases
are costs of $5 for the quarter and $11 for the year-to-date  period  associated
with growth in electronic media offerings.  These increases were offset by lower
costs of $10 for the quarter and $25 for the year-to-date period in the domestic
directory  businesses  due to  the  shift  in  directory  production  schedules.
Depreciation and amortization  increased by $2 for second quarter 2000 and $6 on
a  year-to-date  comparative  basis  due to  the  new  international  publishing
operations.

Net  earnings  (losses)  of  equity  affiliates  includes  the  results  of  our
investment in a Brazilian directory publisher.




All other
<TABLE>
<CAPTION>

-------------------------------------------------- ----------------------- ------------ ----- ----------------------- -----------
                                                       Second Quarter           %                  Year-to-Date           %
                                                   -----------------------                    -----------------------
                                                      1999        2000       Change              1999        2000       Change
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
<S>                                                      <C>        <C>           <C>               <C>         <C>         <C>
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
External revenues                                        $ 73       $ 109         49.3              $123        $211        71.5
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Intersegment revenues                                      92         106         15.2               162         194        19.8
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
       Total operating revenues                         $ 165       $ 215         30.3              $285        $405        42.1
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Operating expenses                                      $ 233       $ 279         19.7              $437        $534        22.2
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Operating loss                                          $(68)       $(64)         (5.9)           $(152)      $(129)      (15.1)
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Net earnings (losses) of equity affiliates               $(1)        $(1)           --              $ --       $ (1)         N/M
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
Segment net loss                                       $ (59)       $(53)        (10.2)           $(116)      $ (99)      (14.7)
-------------------------------------------------- ----------- ----------- ------------ ----- ----------- ----------- -----------
</TABLE>


Operating Results

External  revenues   increased  $36  for  second  quarter  2000  and  $88  on  a
year-to-date  comparative  basis,  primarily driven by growth in revenues of $19
for the quarter and $44 for the year from the resale of long  distance  services
in markets  outside of our wireline  region,  $8 for the quarter and $18 for the
year from  interactive  paging  services  and $7 for the quarter and $15 for the
year from wireless television offerings.

Operating expenses reflect increased spending associated with new product and/or
market  introductions in all of these  businesses.  Higher headcount  associated
with  customer  support  and  installation  functions  also  contributed  to the
increase in operational and support  expenses of $32 for the quarter and $73 for
the  year-to-date  period.  Depreciation and amortization has increased $14 on a
quarter-over-quarter  basis  and  $24 on a  year-to-date  basis  reflecting  our
continuing   investment  of  resources  associated  with  the  growth  of  these
businesses.


-------------------------------------------------------------------------------
Financial Condition
-------------------------------------------------------------------------------

Cash  flows from  operations  are our  primary  source of  funding  for  capital
requirements of existing  operations,  debt service and dividends.  We also have
ready access to capital  markets in the event  additional  funding is necessary.
While  current  liabilities  exceed  current  assets,  our  sources  of funds --
primarily from operations and, to the extent  necessary,  from readily available
external   financing   arrangements  --  are  sufficient  to  meet  all  current
obligations  on a timely  basis.  We believe that these sources of funds will be
sufficient to meet the needs of our business for the foreseeable future.

Net cash provided by (used for):
-------------------------------------------------------------------------------
                             1999          2000               Change
                         ------------------------------------------------------
Operating activities        $ 4,093       $4,798       $  705         17.2 %
Investing activities        $(6,652)      $(3,795)     $2,857          N/M
Financing activities          $ 172        $(770)      $ (942)         N/M

-------------------------------------------------------------------------------

Net cash provided by operating activities
The increase in cash from  operations  between 1999 and 2000 primarily  reflects
better working  capital  management and higher net income from operations due to
strong  revenue  growth.  Operating cash flows for 2000 also include $65 in cash
proceeds associated with the sublease of wireless communications towers to Crown
Castle International.

Net cash used in investing activities
During the first half of 2000, we invested $3.3 billion for capital expenditures
to support our wireline and wireless  networks,  to promote the  introduction of
new products and services and increase  operating  efficiency and  productivity.
Significant  investments are also being made to support deployment of high-speed
Internet access and optical fiber-based  broadband  products.  Included in these
expenditures for the first half of 2000 are approximately  $360 in costs related
to the purchase and development of internal-use software.

The year-to-date 2000 amount paid for investments and advances of $582 primarily
consists of $240 paid to acquire our  investment  in Tele Centro  Oeste and $299
paid for the acquisition of Celumovil.

Net cash used in financing activities
During first quarter 2000, we issued $2 billion of long-term  debt. The proceeds
of $1,974 from this issuance were used to retire commercial paper borrowings.

Our debt to total  capitalization  ratio was 50.6% at June 30, 2000  compared to
53.1% at  December  31,  1999.  The  decrease  is a  function  of  increases  in
shareholders'  equity, driven by income from operations and net unrealized gains
on securities.

At August 1, 2000,  we had shelf  registration  statements  on file with the SEC
under which $2.7 billion of debt securities could be publicly offered.

We repurchase  our common stock from time to time when we consider it attractive
to do so based on stock prices.  Reacquired  shares are held as treasury  shares
pending  reissuance in employee benefit plans,  dividend  reinvestment plans and
for other purposes.


Market Risk

For a complete  discussion of our market risks,  you should refer to the caption
"Market  Risk" in our 1999 Annual Report on Form 10-K.  Our primary  exposure to
market risks  relates to  unfavorable  movements  in interest  rates and foreign
currency  exchange rates.  We do not anticipate any  significant  changes in our
objectives and strategies with respect to managing such exposures.


-------------------------------------------------------------------------------
Operating Environment and Trends of the Business
-------------------------------------------------------------------------------

Regulatory Developments

Our future operating and financial  results will be substantially  influenced by
developments in a number of federal and state  regulatory  proceedings.  Adverse
results in these proceedings could materially affect our revenues,  expenses and
ability to compete effectively against other telecommunications carriers.

Our intrastate  prices are regulated  under price  regulation  plans provided by
statute or approved by state public service commissions.  Some plans are subject
to periodic  review and may require  renewal.  These  commissions  generally may
require  price  reductions  and  other  concessions  from  us as  conditions  to
approving these plans.

In North Carolina, we reached a joint stipulation with the North Carolina Public
Staff and AT&T regarding revisions to the price regulation plan, switched access
reductions,  ADSL deployment and service quality issues. In July 2000, the North
Carolina Utilities Commission approved much of the Joint Stipulation,  including
a one year extension of our price regulation plan, some reductions in intrastate
switched access charges,  enhanced ADSL deployment and voluntary  self-enforcing
penalties associated with service quality problems.

In  July  2000,  the  Florida  Public  Service  Commission  (FPSC)  commenced  a
proceeding to determine whether we violated certain FPSC rules regarding service
quality.  Hearings are currently scheduled for November 2000. Also in July 2000,
the FPSC  determined  that our  change  in 1999  from a late  charge  based on a
percentage  of the amounts  overdue to a flat rate fee plus an  interest  charge
violated the Florida  price  regulation  statute and voted that  certain  monies
should be refunded.  We are considering whether to protest the decision.

On  the  federal  level,  the  Federal   Communications   Commission  (FCC)  has
considerable authority to establish pricing,  interconnection and other policies
that had once been  considered  within the exclusive  jurisdiction  of the state
public service commissions.  We expect the FCC to accelerate the growth of local
service competition by aggressively utilizing such power.

We have been testing our operations  support  systems in Georgia and Florida and
expect to file our Georgia long distance  application with the FCC by the end of
2000.  We  do  not  know  if  the  FCC  will  require  further  changes  in  our
interconnection  and network  element  offerings and operations  support systems
before it will approve our petition.  These changes could result in  significant
additional  expenses.  During  December 1999,  the FCC approved Bell  Atlantic's
request to provide full long distance wireline service in New York state, making
it  the  first  Bell  System-affiliated  company  to  obtain  relief  under  the
Telecommunications  Act of 1996 in any  state.  In June 2000,  the FCC  approved
SBC's  long  distance   application  for  Texas,   making  it  the  second  Bell
System-affiliated company to obtain authority to offer long distance services.

In July 2000, the U.S.  Court of Appeals for the Eighth Circuit  vacated the FCC
methodology  for pricing  unbundled  network  elements and the  methodology  for
determining  wholesale  rates for retail  services.  The order also affirmed the
previous  decision of the Eighth  Circuit that  vacated FCC rules that  required
incumbent  carriers to combine  previously  uncombined  elements for  requesting
carriers.

With  respect to federal  access  charges,  FCC policies  strongly  favor access
reform,  whereby the  historical  subsidy for local service that is contained in
network  access  charges paid by long distance  carriers is  eliminated.  During
first quarter 2000, a coalition of local and long distance providers,  including
BellSouth,  Bell  Atlantic,  GTE,  SBC,  AT&T and  Sprint  submitted  a proposal
designed  to  result in lower  consumer  prices  for long  distance  service  by
reforming  the way in which  access  costs are  recovered.  The  proposal  was a
comprehensive  package that would adjust the FCC's price cap,  access charge and
universal  service rules for those price cap local exchange carriers electing to
adopt the proposal.  After  receiving  public comment on this proposal,  the FCC
approved most of the proposal in an order in May 2000.

Although one effect of the FCC's order will be to reduce access  charges paid to
BellSouth by other carriers, we will be able to increase subscriber line charges
paid by residential and single-line  business  customers each year through 2003.
Any  increases  which we request  after July 2001 are subject to a cost  review.
During June 2000, we filed tariff modifications implementing the proposal. These
modifications will result in interstate price decreases of approximately $270 on
an annual basis.

We are involved in numerous legal proceedings  associated with state and federal
regulatory  matters,  the  disposition  of which  could  materially  impact  our
operating  results  and  prospects.  See  note  N to  our  consolidated  interim
financial statements.


International Operations

Our reporting  currency is the U.S.  Dollar.  However,  most of our revenues are
generated in the  currencies of the countries in which we operate.  In addition,
many of our operations and equity investees hold U.S.  Dollar-denominated short-
and  long-term  debt.  The  currencies  of many Latin  American  countries  have
experienced substantial volatility and depreciation in the past. Declines in the
value of the local  currencies in which we are paid relative to the U.S.  Dollar
will cause  revenues in U.S.  Dollar  terms to decrease  and  dollar-denominated
liabilities to increase.  Where we consider it to be economically  feasible,  we
attempt to limit our exposure to exchange  rate  fluctuations  by using  foreign
currency  forward  exchange  contracts or similar  instruments  as a vehicle for
hedging; however, a substantial amount of our exposures are unhedged.

The impact of a devaluation or depreciating currency on an entity depends on the
residual  effect  on the local  economy  and the  ability  of an entity to raise
prices  and/or reduce  expenses.  Our ability to raise prices is limited in many
instances  by  government  regulation  of tariff  rates.  Due to our  constantly
changing currency exposure and the potential substantial  volatility of currency
exchange  rates,  we cannot predict the effect of exchange rate  fluctuations on
our business.

Economic,  social  and  political  conditions  in  Latin  America  are,  in some
countries,  unfavorable  and volatile,  which may impair our  operations.  These
conditions  could  make  it  difficult  for us to  continue  development  of our
business,  generate revenues or achieve or sustain profitability.  Historically,
recessions  and  volatility  have been  primarily  caused by:  mismanagement  of
monetary,   exchange  rate  and/or  fiscal  policies;   currency   devaluations;
significant  governmental  influence  over  many  aspects  of  local  economies;
political   and  economic   instability;   unexpected   changes  in   regulatory
requirements;  social  unrest or  violence;  slow or negative  economic  growth;
imposition of trade barriers; and wage and price controls.

Most or all of these  factors  have  occurred  at various  times in the last two
decades  in our core  Latin  American  markets.  We have no  control  over these
matters. Economic conditions in Latin America are generally less attractive than
those in the U.S.,  and poor  social,  political  and  economic  conditions  may
inhibit use of our services which may adversely impact our business.


New Accounting Pronouncements

Revenue Recognition
In December 1999, the SEC issued Staff Accounting  Bulletin Number 101, "Revenue
Recognition in Financial  Statements"  (SAB 101). SAB 101 requires that revenues
and costs of revenues  derived  from  services  rendered at the  beginning  of a
contract or business  relationship  be deferred and recognized  over the life of
the  related  contract  or  relationship.  In June 2000,  the SEC  deferred  the
required  adoption date of the  guidelines  in SAB 101 to the fourth  quarter of
2000.  We do not  expect the  adoption  of these  guidelines  to have a material
impact on our results of operations, financial position or cash flows.

Derivative Instruments and Hedging Activities
In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting for Derivative
Instruments and Hedging  Activities".  Among other provisions,  it requires that
entities  recognize  all  derivatives  as either  assets or  liabilities  in the
statement of financial  position and measure  those  instruments  at fair value.
Gains and losses resulting from changes in the fair values of those  derivatives
would be accounted  for  depending on the use of the  derivative  and whether it
qualifies for hedge accounting.  The effective date of this standard was delayed
via the issuance of SFAS No. 137,  "Accounting  for Derivative  Instruments  and
Hedging  Activities - Deferral of the Effective Date of FASB Statement No. 133 -
an amendment of FASB Statement  133". The effective date for SFAS No. 133 is now
for fiscal years  beginning  after June 15,  2000,  though  earlier  adoption is
encouraged  and  retroactive  application  is  prohibited.  This  means that the
standard  must be adopted by us no later than January 1, 2001.  We do not expect
that the  adoption of this  standard  will have a material  impact on results of
operations, financial position or cash flows.


Item 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

See the caption labeled "Market Risk" in Management's Discussion and Analysis of
Financial Condition and Results of Operations.


-------------------------------------------------------------------------------
Cautionary Language Concerning Forward-Looking Statements
-------------------------------------------------------------------------------

In addition to  historical  information,  management's  discussion  and analysis
contains  forward-looking  statements regarding events and financial trends that
may affect our future  operating  results,  financial  position  and cash flows.
These  statements are based on our  assumptions and estimates and are subject to
risks and  uncertainties.  For these statements,  we claim the protection of the
safe harbor for  forward-looking  statements  provided by the Private Securities
Litigation Reform Act of 1995.

Factors that could affect future operating results,  financial position and cash
flows and could cause actual results to differ  materially  from those expressed
in the forward-looking statements are:

 .    a change in economic conditions in domestic or international  markets where
     we operate or have material investments,  which would affect demand for our
     services;

 .    the intensity of competitive  activity and its resulting  impact on pricing
     strategies and new product offerings;

 .    protracted delay in our entry into the interLATA long distance market;

 .    higher than anticipated  start-up costs or significant up-front investments
     associated with new business initiatives;

 .    unanticipated higher capital spending from, or delays in, the deployment of
     new technologies; and

 .    unsatisfactory   results  in   regulatory   actions   including   terms  of
     interconnection and unbundled network elements and resale rates.

This  list  of  cautionary  statements  is  not  exhaustive.   These  and  other
developments  could  cause our actual  results to differ  materially  from those
forecast or implied in the forward-looking  statements. You are cautioned not to
place undue reliance on these forward-looking statements, which are current only
as of the date of this filing.  We have no obligation,  and we do not intend, to
publicly  release  the  results  of  any  revisions  to  these   forward-looking
statements to reflect events or circumstances after the date of this filing.



<PAGE>

-------------------------------------------------------------------------------
PART II -- OTHER INFORMATION
-------------------------------------------------------------------------------

Item 4. Submission of Matters to a Vote of Security Holders

We have published the information called for by this item in our "Second Quarter
2000 Report to  Shareholders"  which was distributed to shareholders on or about
May 1,  2000.  Shareholders  can  request  a copy  of  this  report  by  calling
Shareholder Services at 1-800-631-6001.


Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:

Exhibit
Number

4a   No  instrument  which  defines  the  rights  of  holders  of our  long- and
     intermediate-term  debt is filed herewith  pursuant to Regulation S-K, Item
     601(b)(4)(iii)(A).  Pursuant to this regulation, we agree to furnish a copy
     of any such instrument to the SEC upon request.

11   Computation of Earnings Per Common Share.

12   Computation of Ratio of Earnings to Fixed Charges.

27   Financial Data Schedule as of June 30, 2000.



(b) Reports on Form 8-K:

 Date of Event             Subject

 April 20, 2000            BellSouth 1Q00 Earnings Release

 April 10, 2000            Announcement of wireless joint venture with
                           SBC Communications.






<PAGE>


                                                         SIGNATURE


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                                       BELLSOUTH CORPORATION

                                                   By    /s/  Ronald M. Dykes
                                                              RONALD M. DYKES
                                                      Chief Financial Officer
                                                (Principal Accounting Officer)


August 14, 2000

<PAGE>

                                 EXHIBIT INDEX
     Exhibit
     Number

     11           Computation of Earnings Per Common Share.

     12           Computation of Ratio of Earnings to Fixed Charges.

     27           Financial Data Schedule as of June 30, 2000.