<PAGE>

                                  UNITED STATES
                       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 March 31, 2002

                                       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 2-36292


                               VERIZON SOUTH INC.

      A Virginia Corporation   I.R.S. Employer Identification No. 56-0656680


        1095 Avenue of the Americas, Room 3868, New York, New York 10036


                         Telephone Number (212) 395-2121

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



THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH REDUCED DISCLOSURE
FORMAT PURSUANT TO GENERAL INSTRUCTION H(2).

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
                                      ---  ---

<PAGE>
                               Verizon South Inc.

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                         CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                                                      Three Months Ended March 31,
                                                                             --------------------------------------------
(Dollars in Millions) (Unaudited)                                                        2002                 2001
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                    <C>
OPERATING REVENUES
    (including $18.9 and $17.9 from affiliates)                                        $394.5               $415.1
                                                                             --------------------------------------------
OPERATING EXPENSES
Operations and support (including $47.7 and $37.3 to affiliates)                        158.8                159.4
Depreciation and amortization                                                            49.8                 75.4
                                                                             --------------------------------------------
                                                                                        208.6                234.8
                                                                             --------------------------------------------
OPERATING INCOME                                                                        185.9                180.3

OTHER INCOME AND (EXPENSE), NET
    (including $1.4 and $(1.0) from affiliates)                                           1.4                 (1.0)

INTEREST EXPENSE
    (including $.1 and $1.2 to affiliate)                                                19.5                 14.7
                                                                             --------------------------------------------

INCOME BEFORE PROVISION FOR INCOME TAXES                                                167.8                164.6

PROVISION FOR INCOME TAXES                                                               66.0                 65.3
                                                                             --------------------------------------------
NET INCOME                                                                             $101.8               $ 99.3
                                                                             ============================================
</TABLE>


                  See Notes to Condensed Financial Statements.

                                       1

<PAGE>
                               Verizon South Inc.

                            CONDENSED BALANCE SHEETS

                                     ASSETS
                                     ------
<TABLE>
<CAPTION>
(Dollars in Millions)                                                                   March 31, 2002      December 31, 2001
-----------------------------------------------------------------------------------------------------------------------------
                                                                                           (Unaudited)
<S>                                                                                     <C>                 <C>
CURRENT ASSETS
Cash                                                                                          $     .1           $      .1
Short-term investments                                                                            25.5                37.8
Note receivable from affiliate                                                                   276.4               274.6
Accounts receivable:
    Trade and other, net of allowances for uncollectibles of $29.0 and $29.1                     239.1               247.2
    Affiliates                                                                                    48.4                22.5
Material and supplies                                                                             13.0                 9.7
Prepaid expenses                                                                                   9.0                18.7
Net assets held for sale                                                                         727.8               703.8
Other                                                                                             32.2                32.1
                                                                                  -------------------------------------------
                                                                                               1,371.5             1,346.5
                                                                                  -------------------------------------------

PLANT, PROPERTY AND EQUIPMENT                                                                  3,183.0             3,147.6
Less accumulated depreciation                                                                  1,914.0             1,883.1
                                                                                  -------------------------------------------
                                                                                               1,269.0             1,264.5
                                                                                  -------------------------------------------

PREPAID PENSION ASSET                                                                            398.7               389.6
                                                                                  -------------------------------------------

OTHER ASSETS                                                                                      55.4                56.4
                                                                                  -------------------------------------------

TOTAL ASSETS                                                                                  $3,094.6           $ 3,057.0
                                                                                  ===========================================
</TABLE>


                  See Notes to Condensed Financial Statements.

                                       2

<PAGE>
                               Verizon South Inc.

                            CONDENSED BALANCE SHEETS

                     LIABILITIES AND SHAREOWNER'S INVESTMENT
                     ---------------------------------------
<TABLE>
<CAPTION>
(Dollars in Millions)                                                                   March 31, 2002    December 31, 2001
-----------------------------------------------------------------------------------------------------------------------------
                                                                                           (Unaudited)
<S>                                                                                     <C>               <C>
CURRENT LIABILITIES
Debt maturing within one year                                                                   $152.4              $152.4
Accounts payable and accrued liabilities:
    Affiliates                                                                                    96.1                61.5
    Other                                                                                        139.9               194.2
Other liabilities                                                                                359.7               357.4
                                                                                  -------------------------------------------
                                                                                                 748.1               765.5
                                                                                  -------------------------------------------

LONG-TERM DEBT                                                                                   913.4               913.3
                                                                                  -------------------------------------------

EMPLOYEE BENEFIT OBLIGATIONS                                                                     200.9               202.0
                                                                                  -------------------------------------------

DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes                                                                            278.7               259.4
Unamortized investment tax credits                                                                  .1                  .2
Other                                                                                             65.9                65.1
                                                                                  -------------------------------------------
                                                                                                 344.7               324.7
                                                                                  -------------------------------------------

SHAREOWNER'S INVESTMENT
Common stock  - $25 par value per share                                                          525.0               525.0
  Authorized shares:   25,000,000
  Outstanding shares:  21,000,000
Contributed capital                                                                               74.0                71.8
Reinvested earnings                                                                              288.5               254.7
                                                                                  -------------------------------------------
                                                                                                 887.5               851.5
                                                                                  -------------------------------------------
TOTAL LIABILITIES AND SHAREOWNER'S INVESTMENT                                                $ 3,094.6           $ 3,057.0
                                                                                  ===========================================
</TABLE>

                  See Notes to Condensed Financial Statements.

                                       3

<PAGE>
                               Verizon South Inc.

                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                             Three Months Ended March 31,
                                                                                   -------------------------------------------
(Dollars in Millions) (Unaudited)                                                               2002                 2001
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>                    <C>
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES                                           $135.4              $  (3.2)
                                                                                   -------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Net change in short-term investments                                                            12.3                  2.8
Capital expenditures                                                                           (78.0)               (86.6)
Change in note receivable from affiliate                                                        (1.8)                 ---
Investment in unconsolidated business                                                           (2.1)                 ---
Other, net                                                                                        .1                  4.5
                                                                                   -------------------------------------------
Net cash used in investing activities                                                          (69.5)               (79.3)
                                                                                   -------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Principal repayments of borrowings and capital lease obligations                                 ---                (12.4)
Change in note payable to affiliate                                                              ---                134.3
Dividends paid                                                                                 (68.0)               (65.0)
Capital contribution from parent                                                                 2.1                  ---
                                                                                   -------------------------------------------
Net cash provided by/(used in) financing activities                                            (65.9)                56.9
                                                                                   -------------------------------------------

NET CHANGE IN CASH                                                                               ---                (25.6)

CASH, BEGINNING OF PERIOD                                                                         .1                 25.6
                                                                                   -------------------------------------------
CASH, END OF PERIOD                                                                           $   .1              $   ---
                                                                                   ===========================================
</TABLE>
                  See Notes to Condensed Financial Statements.

                                       4

<PAGE>
                               Verizon South Inc.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

1.    Basis of Presentation

      Verizon South Inc. is a wholly owned subsidiary of GTE Corporation (GTE),
which is a wholly owned subsidiary of Verizon Communications Inc. (Verizon
Communications). The accompanying unaudited condensed financial statements have
been prepared based upon Securities and Exchange Commission rules that permit
reduced disclosure for interim periods. These financial statements reflect all
adjustments that are necessary for a fair presentation of results of operations
and financial position for the interim periods shown including normal recurring
accruals. The results for the interim periods are not necessarily indicative of
results for the full year. The balance sheet at December 31, 2001 has been
derived from the audited financial statements at that date but does not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. For a more complete discussion of
significant accounting policies and certain other information, you should refer
to the financial statements included in our 2001 Annual Report on Form 10-K.

      We have reclassified certain amounts from prior year's data to conform to
the 2002 presentation.

2.    Adoption of New Accounting Standards

      Goodwill and Other Intangible Assets

      Effective January 1, 2002, we adopted Statement of Financial Accounting
Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142
no longer permits the amortization of goodwill and indefinite-lived intangible
assets. Instead, these assets must be reviewed annually (or more frequently
under prescribed conditions) for impairment in accordance with this statement.
This impairment test uses a fair value approach rather than the undiscounted
cash flows approach previously required by SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The goodwill impairment test under SFAS No. 142 requires a two-step approach,
which is performed at the reporting unit level, as defined in SFAS No. 142. Step
one identifies potential impairments by comparing the fair value of the
reporting unit to its carrying amount. Step two, which is only performed if
there is a potential impairment, compares the carrying amount of the reporting
unit's goodwill to its implied value, as defined in SFAS No. 142. If the
carrying amount of the reporting unit's goodwill exceeds the implied fair value
of that goodwill, an impairment loss is recognized for an amount equal to that
excess. Intangible assets that do not have indefinite lives are amortized over
their useful lives and reviewed for impairment in accordance with SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." The adoption
of SFAS No. 142 did not impact our results of operations or financial position
because we had no goodwill or other intangible assets at December 31, 2001 and
2000.

     Impairment or Disposal of Long-Lived Assets

     Effective January 1, 2002, we adopted SFAS No. 144. This standard
supersedes SFAS No. 121 and the provisions of APB Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," with regard to reporting the effects of a disposal of a segment
of a business. SFAS No. 144 establishes a single accounting model for assets to
be disposed of by sale and addresses several SFAS No. 121 implementation issues.
The adoption of SFAS No. 144 did not have a material effect on our results of
operations or financial position.

3.    Recent Accounting Pronouncement

      Asset Retirement Obligations

      In June 2001, the Financial Accounting Standards Board issued SFAS No.
143, "Accounting for Asset Retirement Obligations." This standard provides the
accounting for the cost of legal obligations associated with the retirement of
long-lived assets. SFAS No. 143 requires that companies recognize the fair value
of a liability for asset retirement obligations in the period in which the
obligations are incurred and capitalize that amount as a part of the book value
of the long-lived asset. That cost is then depreciated over the remaining life
of the underlying long-lived asset. We are required to adopt SFAS No. 143
effective January 1, 2003. We are currently evaluating the impact this new
standard will have on our future results of operations or financial position.

4.    Dividend

      On May 1, 2002, we declared and paid a dividend from Reinvested Earnings
in the amount of $72.0 million to GTE.

                                       5

<PAGE>
                               Verizon South Inc.

5.    Net Assets Held For Sale

      During the fourth quarter of 2001, Verizon South Inc. and Contel of the
South, Inc. agreed to sell all 305,000 of their access lines in Alabama to
CenturyTel of Alabama, LLC (CenturyTel) for $1 billion. Verizon South Inc. owns
and operates approximately 175,000 of these switched access lines. The Alabama
Public Service Commission approved the sale in December 2001. The U.S.
Department of Justice (DOJ) completed its review in February 2002 and took no
action. The sale must also be approved by the Federal Communications Commission
(FCC). We expect to close the sale and transfer our operations to CenturyTel
late in the second quarter of 2002.

      Also in the fourth quarter of 2001, Verizon South Inc. agreed to sell
approximately 600,000 access lines in Kentucky to Kentucky ALLTEL, Inc. (ALLTEL)
for $1.9 billion. Verizon South Inc. owns and operates all of these access
lines. The sale was approved by the Kentucky Public Service Commission in
February 2002 and remains subject to approval by the FCC. The DOJ completed its
review in February 2002 and took no action. We expect to close the sale and
transfer our operations to ALLTEL during the third quarter of 2002.

      The net assets pertaining to these access lines, principally plant,
property and equipment of $727.8 million at March 31, 2002 and $703.8 million at
December 31, 2001, are classified in our balance sheets as "Net assets held for
sale." We intend to continue to operate all of these assets until sold. Given
the decision to sell, no depreciation was recorded for these assets during the
second half of 2001 and the first quarter of 2002 in accordance with SFAS No.
144. Accordingly, depreciation expense was lower by $26.8 million in the three
months ended March 31, 2002.

      These two access line agreements represent approximately 37% of the
switched access lines that we had in service at March 31, 2002, and contributed
approximately 37% to operating revenues for both the year ended December 31,
2001 and the three months ended March 31, 2002.

6.    Shareowner's Investment

                                                 Contributed     Reinvested
(Dollars in Millions)             Common Stock       Capital       Earnings
--------------------------------------------------------------------------------
Balance at December 31, 2001            $525.0         $71.8         $254.7
Net income                                                            101.8
Dividend declared to GTE                                              (68.0)
Capital contribution from GTE                            2.1
Other                                                     .1
                                 -----------------------------------------------
Balance at March 31, 2002               $525.0         $74.0         $288.5
                                 ===============================================

      Net income and comprehensive income were the same for the three months
ended March 31, 2002 and 2001.

7.    Commitments and Contingencies

      Various legal actions and regulatory proceedings are pending to which we
are a party and claims which, if asserted, may lead to other legal actions. We
have established reserves for specific liabilities in connection with regulatory
and legal matters that we currently deem to be probable and estimable. We do not
expect that the ultimate resolution of pending regulatory and legal matters in
future periods will have a material effect on our financial condition, but it
could have a material effect on our results of operations.

       Several regulatory matters may require us to refund a portion of the
revenues collected in the current and prior periods. The outcome of each pending
matter, as well as the time frame within which each matter will be resolved, is
not presently determinable.

       Regulatory conditions to the Bell Atlantic - GTE merger include certain
commitments to, among other things, promote competition and the widespread
deployment of advanced services, while helping to ensure that consumers continue
to receive high-quality, low cost telephone services. In some cases, there are
significant penalties associated with not meeting these commitments. The cost of
satisfying these commitments could have a significant impact on net income in
future periods.

                                      6

<PAGE>

                               Verizon South Inc.

8.    Investment in Verizon Ventures III Inc.

       In December 2000, we transferred certain advanced data assets to an
affiliated company, Verizon Ventures III Inc. (Ventures III) in exchange for
common stock of Ventures III. This transfer was done to satisfy a condition of
the FCC's approval of the Bell Atlantic - GTE merger, which required the
provision of advanced data services through a separate affiliate. Throughout
2000 and 2001, we continued to invest in Ventures III through the transfer of
additional assets. As result of the transfers, we acquired an ownership interest
in Ventures III, which we accounted for under the equity method of accounting.

       In September 2001, the FCC issued an order eliminating this merger
condition. Following the FCC order, we made necessary filings with our state
regulatory commissions for approval of the transfer of these assets back to us.
During the fourth quarter of 2001, Ventures III transferred assets to us in the
jurisdictions of Kentucky, Virginia and South Carolina. Ventures III transferred
advanced data assets back to us with an aggregate net book value of $2.4 million
in Alabama and North Carolina on January 1, 2002. In consideration of the
transfer of these assets, we have surrendered our common stock in Ventures III
and remitted certain cash compensation.

       In connection with this reintegration, we received a capital contribution
from our parent of $2.1 million in the first quarter of 2002. This equity was
immediately contributed to Ventures III. No gain or loss was recognized as a
result of the reintegration of the assets to us. This reintegration did not have
a material effect on our results of operations or financial condition.

9.    Employee Severance Costs

      In connection with the Bell Atlantic - GTE merger on June 30, 2000, we
incurred charges associated with employee severance of $25.7 million. These
costs, as recorded under SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," represent the benefit costs for the separation of management
employees who are entitled to benefits under pre-existing separation plans, as
well as an accrual of ongoing SFAS No. 112 obligations for GTE employees. During
the forth quarter of 2001, we recorded a special charge of $3.5 million, as
recorded under SFAS No. 112, for the voluntary and involuntary separation of
employees. The remaining severance liability under these programs as of March
31, 2002 is $12.0 million.

                                       7

<PAGE>

                               Verizon South Inc.

Item 2.  Management's Discussion and Analysis of Results of Operations
         (Abbreviated pursuant to General Instruction H(2).)

      This discussion should be read in conjunction with the Condensed Financial
Statements and Condensed Notes to Financial Statements.

RESULTS OF OPERATIONS
---------------------

      We reported net income of $101.8 million for the three month period ended
March 31, 2002, compared to net income of $99.3 million for the same period in
2001.

Verizon Ventures III

      During 2000 and 2001, pursuant to one of the Federal Communications
Commission's (FCC) requirements for the Bell Atlantic - GTE merger, we
transferred our advanced data assets to Verizon Ventures III Inc. (Ventures III)
in exchange for an ownership interest in Ventures III, which we accounted for
under the equity method of accounting. In September 2001, the FCC issued an
order eliminating this merger condition. In the fourth quarter of 2001 and the
first quarter of 2002, after required state regulatory approvals were obtained,
these assets were transferred back to us and we surrendered our ownership in
Ventures III. (See Note 8 to the Condensed Financial Statements.)

      This reintegration principally affected our comparison of Network access
services revenues, Operations and support expenses, Other income and (expense),
net, and the Provision for income taxes, as described below.

OPERATING REVENUES
------------------
(Dollars in Millions)

                                               Three Months Ended March 31,
                                        ----------------------------------------
                                                   2002                2001
--------------------------------------------------------------------------------
Local services                                   $193.7              $249.9
Network access services                           166.7               125.3
Long distance services                              6.6                 8.5
Other services                                     27.5                31.4
                                        ----------------------------------------
Total                                            $394.5              $415.1
                                        ========================================

      We recognize service revenues based upon usage of our local exchange
network and facilities and contract fees. We recognize product and other service
revenues when the products are delivered and accepted by the customers and when
services are provided in accordance with contract terms.

LOCAL SERVICES

      2002 - 2001                                              (Decrease)
-------------------------------------------------------------------------------
      Three Months                                        $(56.2)      (22.5)%
-------------------------------------------------------------------------------


      Local service revenues are earned from the provision of local exchange,
local private line, wire maintenance, voice messaging and value-added services.
Value-added services are a family of services that expand the utilization of the
network, including products such as Caller ID, Call Waiting and Return Call. The
provision of local exchange services not only includes retail revenues, but also
includes local wholesale revenues from unbundled network elements (UNEs),
interconnection revenues from competitive local exchange carriers (CLECs),
certain data transport revenues and wireless interconnection revenues.

      Local service revenues were affected by the settlement of a state
regulatory matter in the state of Virginia. This settlement resulted in refunds
to customers from both local service revenues and network access revenues in the
first quarter of 2001. The effect of these refunds was entirely offset by the
reversal of an accrual in 2001 which was recorded in local service revenues.
Price reductions and the effects of the economic slowdown and competition, as
reflected by a decline in our

                                       8

<PAGE>
                               Verizon South Inc.

switched access lines in service of 1.0% from March 31, 2001, also contributed
to the decrease in local service revenues. Technology substitution has also
affected local service revenue growth, as indicated by lower demand for
residential access lines.

NETWORK ACCESS SERVICES

      2002 - 2001                                               Increase
-------------------------------------------------------------------------------
      Three Months                                         $41.4        33.0%
-------------------------------------------------------------------------------

      Network access service revenues are earned from end-user subscribers and
from long distance and other competing carriers who use our local exchange
facilities to provide usage services to their customers. Switched access
revenues are derived from fixed and usage-based charges paid by carriers for
access to our local network. Special access revenues originate from carriers and
end-users that buy dedicated local exchange capacity to support their private
networks. End-user access revenues are earned from our customers and from
resellers who purchase dial-tone services.

      The increase in network access service revenues in the first three months
of 2002 was primarily due to the effect of the settlement of a regulatory matter
in the state of Virginia in the first quarter of 2001. This settlement resulted
in refunds to customers which was entirely offset by the reversal of an accrual
recorded in local service revenues in 2001, as described above. In addition,
higher customer demand for special access services, particularly for
high-capacity, high-speed digital services, and the impact of the reintegration
of Ventures III also contributed to the revenue increase, but to a lesser
extent.

      These increases were partially offset by the effect of mandated price
reductions on interstate and intrastate access services and other regulatory
decisions. The impact of the slowing economy also affected network access
service revenues in 2002.

LONG DISTANCE SERVICES

      2002 - 2001                                             (Decrease)
-------------------------------------------------------------------------------
      Three Months                                         $(1.9)      (22.4)%
-------------------------------------------------------------------------------

      Long distance revenues are earned primarily from calls made to points
outside a customer's local calling area, but within our service area (intraLATA
toll). IntraLATA toll calls originate and terminate within the same LATA, but
generally cover a greater distance than a local call. These services are
regulated by state regulatory commissions except where they cross state lines.
Other long distance services that we provide include 800 services and Wide Area
Telephone Service (WATS). We also earn revenue from private line and operator
services associated with long distance calls.

      Long distance service revenues declined in 2002 primarily due to the
effects of competition, technology substitution and the slowing economy.
Mandated price reductions on some long distance services also contributed to the
decline in long distance revenues, but to a lesser extent.

OTHER SERVICES

      2002 - 2001                                             (Decrease)
-------------------------------------------------------------------------------
      Three Months                                         $(3.9)      (12.4)%
-------------------------------------------------------------------------------

      Our other services include such services as billing and collections for
long distance carriers and affiliates, facilities rentals to affiliates and
nonaffiliates, public (pay) telephone and customer premises equipment (CPE).
Other service revenues also include fees paid by customers for non-publication
of telephone numbers and multiple white page listing, fees paid by an affiliate
for usage of our directory listings and fees paid by an affiliate for the
provision of sales agent services.

      Other service revenues decreased in the first three months of 2002
primarily due to lower revenue from CPE sales. This decrease was partially
offset by an increase in sales and services to affiliates.

                                       9

<PAGE>
                               Verizon South Inc.

OPERATING EXPENSES
------------------
(Dollars in Millions)


OPERATIONS AND SUPPORT

      2002 - 2001                                              (Decrease)
-------------------------------------------------------------------------------
      Three Months                                        $(.6)          (.4)%
-------------------------------------------------------------------------------

      Operations and support expenses consist of employee costs and other
operating expenses. Employee costs consist of salaries, wages and other employee
compensation, employee benefits and payroll taxes. Other operating expenses
consist of contract services including centralized services expenses allocated
from affiliates, rent, network software costs, operating taxes other than
income, the provision for uncollectible accounts receivable, reciprocal
compensation, and other costs.

      The decrease in operations and support expenses was primarily attributable
to lower employee costs principally associated with declining workforce levels,
as well as lower overtime for repair and maintenance activity mainly as a result
of reduced volumes at our dispatch and call centers. Higher interconnection and
related costs associated with reciprocal compensation arrangements with
competitive local exchange and other carriers to terminate calls on their
network, higher centralized services expenses allocated to us by Verizon
Services and the reintegration of Ventures III substantially offset the decline
in operations and support expenses for the three months ended March 31, 2002.

DEPRECIATION AND AMORTIZATION

      2002 - 2001                                             (Decrease)
-------------------------------------------------------------------------------
      Three Months                                        $(25.6)      (34.0)%
-------------------------------------------------------------------------------

      Depreciation expense is principally based on the composite group remaining
life method and straight-line composite rates. This method provides for the
recognition of the cost of the remaining net investment in telephone plant, less
anticipated net salvage value, over the remaining asset lives. This method
requires the periodic revision of depreciation rates.

      Depreciation and amortization expense decreased in the first three months
of 2002 primarily due to our decision to dispose of certain properties and, as a
consequence, we no longer depreciate these assets in accordance with SFAS No.
144. (See Note 5 to the Condensed Financial Statements.)

OTHER RESULTS
-------------
(Dollars in Millions)


OTHER INCOME AND (EXPENSE), NET

      2002 - 2001                                               Increase
-------------------------------------------------------------------------------
      Three Months                                          $2.4       240%
-------------------------------------------------------------------------------

      Other income and (expense), net includes equity income (losses), interest
income and other nonoperating income and expense items.

      The increase in other income and (expense), net, was primarily
attributable to an increase in interest income on a note receivable with an
affiliate and the effect of equity losses recognized in 2001 from our investment
in Ventures III.

                                       10

<PAGE>
                               Verizon South Inc.

INTEREST EXPENSE

      2002 - 2001                                               Increase
-------------------------------------------------------------------------------
      Three Months                                          $4.8        32.7%
-------------------------------------------------------------------------------

      Interest expense includes costs associated with borrowing and capital
leases, net of capitalized interest costs. We capitalize interest associated
with the acquisition or construction of plant assets. Capitalized interest is
reported as a cost of plant and a reduction in interest expense.

      Interest expense increased in the first three months of 2002, over the
same period in 2001, primarily due to the effect of refinancing short-term debt
from an affiliate with long-term debt at a higher interest rate.

EFFECTIVE INCOME TAX RATES

      Three Months Ended March 31,
-------------------------------------------------------------------------------
      2002                                                      39.3%
-------------------------------------------------------------------------------
      2001                                                      39.7%
-------------------------------------------------------------------------------

      The effective income tax rate is the provision for income taxes as a
percentage of income before provision for income taxes. Our effective income tax
rate was lower for the three months ended March 31, 2002, compared to the same
period in 2001, due to the effect of equity losses associated with our
investment in Ventures III, which were recorded in 2001, for which we did not
recognize income tax benefits and by a decrease in non-recurring income tax
expense.

OTHER MATTERS
-------------

Recent Accounting Pronouncement

      Asset Retirement Obligations

      In June 2001, the Financial Accounting Standards Board issued SFAS No.
143, "Accounting for Asset Retirement Obligations." This standard provides the
accounting for the cost of legal obligations associated with the retirement of
long-lived assets. SFAS No. 143 requires that companies recognize the fair value
of a liability for asset retirement obligations in the period in which the
obligations are incurred and capitalize that amount as a part of the book value
of the long-lived asset. That cost is then depreciated over the remaining life
of the underlying long-lived asset. We are required to adopt SFAS No. 143
effective January 1, 2003. We are currently evaluating the impact this new
standard will have on our future results of operations or financial position.

Compensation for Internet Traffic

      We continue to incur expenditures related to reciprocal compensation
arrangements with competitive local exchange carriers and other carriers to
terminate calls on their network.

      On April 27, 2001, the FCC released an order addressing intercarrier
compensation for dial-up connections for Internet-bound traffic. The FCC found
that Internet-bound traffic is interstate and subject to the FCC's jurisdiction.
Moreover, the FCC again found that Internet-bound traffic is not subject to
reciprocal compensation under Section 251(b)(5) of the 1996 Act. Instead, the
FCC established federal rates per minute for this traffic that decline from
$0.0015 to $0.0007 over a three-year period. The FCC order also sets caps on the
total minutes of this traffic that may be subject to any intercarrier
compensation and requires that incumbent local exchange carriers must offer to
pay reciprocal compensation for local traffic at the same rate as they are
required to pay on Internet-bound traffic. On May 3, 2002 the U.S. Court of
Appeals for the D.C. Circuit remanded the April 27, 2001 FCC order for further
proceedings. It did not vacate the interim pricing rules established in that
order and they remain in effect.

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<PAGE>

                               Verizon South Inc.

                           PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

          There were no proceedings reportable under this Item.

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits:

               Exhibit
               Number
               -------

                 12     Computation of Ratio of Earnings to Fixed Charges.

          (b) There were no Current Reports on Form 8-K filed during the
quarter ended March 31, 2002.

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<PAGE>

                               Verizon South Inc.

                                   SIGNATURES

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.

                                        Verizon South Inc.




Date:  May 15, 2002                     By  /s/ Edwin F. Hall
                                           --------------------------------
                                                Edwin F. Hall
                                                Controller

        UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF MAY 8, 2002.

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