4th Quarter Earnings

Bellsouth Corp
25 January 2005



For Immediate Release
Jan. 25, 2004



BellSouth Reports Fourth Quarter Earnings

•        1.8 million Cingular pro forma net customer additions
•        224,000 DSL net customer additions
•        467,000 long distance net customer additions

ATLANTA - BellSouth Corporation (NYSE: BLS) announced fourth quarter 2004
earnings per share (EPS):


•        Reported EPS from continuing operations was 27 cents compared to 45
cents in fourth quarter 2003.

•        Normalized EPS from continuing operations was 35 cents compared to 46
cents in fourth quarter of 2003.

•        Total reported EPS from continuing and discontinued operations was 80
cents compared to 43 cents in fourth quarter 2003.



Reported Results from Continuing Operations

For the fourth quarter of 2004, BellSouth's consolidated reported revenue from
continuing operations totaled $5.15 billion, an increase of 0.8 percent compared
to the same quarter in 2003.  Income from continuing operations was $496 million
compared to $836 million in the same quarter of the previous year.  Reported EPS
from continuing operations for the quarter was 27 cents compared to 45 cents in
the fourth quarter of 2003.


BellSouth's fourth quarter 2004 reported income and EPS from continuing
operations were negatively impacted by restoration expenses due to hurricanes,
severance-related expenses and a previously announced change in the calculation
of the retiree medical benefit obligation.  In addition, BellSouth's earnings
related to Cingular Wireless were affected by merger integration costs from the
acquisition of AT&T Wireless, high gross customer additions and upgrades, lower
service revenue, accelerated depreciation and acquisition-related financing
costs.



For the full year of 2004, BellSouth reported EPS from continuing operations of
$1.87 compared to $1.88 in 2003.  Consolidated revenue from continuing
operations was $20.30 billion in 2004, flat compared to 2003.  Income from
continuing operations was $3.44 billion in 2004 compared to $3.49 billion the
previous year.





Normalized Results from Continuing Operations

Normalized results from continuing operations are adjusted for BellSouth's 40
percent proportionate share of Cingular's revenues and expenses.  Cingular
completed its acquisition of AT&T Wireless on Oct. 26, 2004.  Cingular's results
for the quarter combine Cingular stand-alone results for the first 25 days of
the quarter and the operations of the combined companies starting on Oct. 26,
2004.  Prior period results for 2003 and the first three quarters of 2004 have
not been restated.



Normalized revenue was $7.92 billion for the fourth quarter of 2004 compared to
$6.63 billion for the fourth quarter in 2003.  Normalized net income was $640
million compared to $846 million for the fourth quarter in 2003.  Normalized EPS
from continuing operations of 35 cents in the fourth quarter excludes the impact
of hurricane- and severance-related expenses in the wireline business (5 cents)
and merger integration costs from Cingular's acquisition of AT&T Wireless (3
cents).



Fourth quarter normalized EPS from continuing operations declined compared to
the third quarter of 2004.  Communications Group results were negatively
impacted by a previously announced change in the calculation of the retiree
medical benefit obligation (3 cents) and an annual FAS 112 adjustment (1 cent).
In addition to acquisition-related financing costs (2 cents), BellSouth's
earnings related to Cingular Wireless declined by approximately 7 cents due
primarily to seasonal decline in roaming revenue, high gross customer additions,
costs associated with incrementally higher customer upgrades and increased
depreciation expense driven by adjustments to the expected useful life of TDMA
equipment.



For the full year, normalized EPS was $1.83 in 2004 compared to $1.95 in 2003.
Normalized revenue was $27.91 billion in 2004.  Normalized net income was $3.36
billion for 2004.





Cash Flow and Capital

Operating free cash flow from continuing operations (defined as net cash
provided by operating activities less capital expenditures) totaled $3.61
billion for 2004.  Capital expenditures for continuing operations for 2004 were
$3.19 billion, including $60 million in hurricane restoration capital, compared
to $2.93 billion in 2003.





Communications Group

In 2004, revenue growth from long distance and DSL high-speed Internet service
offset reduced revenue from access line declines, holding Communications Group
revenue flat at $18.45 billion, compared to 2003.  In the fourth quarter,
revenue increased 0.6 percent to $4.65 billion compared to the same quarter the
previous year.  Operating margin for 2004 was 25.1 percent compared to 26.3
percent in 2003.  Operating margin for the fourth quarter was 22.6 percent,
impacted primarily by the previously announced change in the calculation of the
retiree medical benefit obligation.



During the fourth quarter of 2004, BellSouth added a record 224,000 net DSL
customers and ended the year at 2.1 million customers.  This momentum reflects
the continued success of the tiered service portfolio and was driven in part by
the Company's long-term, strategic move to offer additional incentives and new
pricing for FastAccess(R) DSL.  Driven by DSL, network data revenue for the
fourth quarter was $1.16 billion, an increase of 6.5 percent compared to the
same quarter of 2003.



BellSouth added 467,000 mass-market long distance customers during the fourth
quarter of 2004, and now serves more than 6.1 million mass-market long distance
customers.  These customers represent a 48 percent penetration of BellSouth's
mass-market base and spend an average of approximately $17 per month on long
distance with BellSouth.



With DIRECTV(R), BellSouth provides a competitively priced triple-play package
of voice, data and entertainment services.  Through Dec. 31, more than 200,000
customers have added DIRECTV(R) to their communications services packages.



As of Dec. 31, 2004, total access lines were 21.4 million, down 4.1 percent
compared to a year earlier.  UNE-P access lines resold by BellSouth competitors
were 2.8 million at year-end 2004 compared to 2.4 million at year-end 2003.  In
the third and fourth quarters of 2004, UNE-P lines began a declining trend and
decreased a total of 165,000 over the second half of 2004.





Cingular Wireless

Cingular Wireless, the nation's largest wireless provider, added nearly 1.8
million customers in the fourth quarter of 2004, on a pro forma basis, bringing
its nationwide customer base to more than 49 million customers.  Cingular's
gross customer additions in the fourth quarter totaled 5.5 million on a pro
forma basis, the best ever combined total for the two companies. Pro forma churn
was 2.6 percent in the fourth quarter.


In the fourth quarter, BellSouth's share of Cingular's reported revenues was
$2.83 billion.  Reported average revenue per user (ARPU) in the fourth quarter
was $49.22.  ARPU on a pro forma basis was $49.67, down 4.7 percent versus pro
forma results the in the third quarter of 2004.  The sequential decline is
primarily attributable to seasonal declines in roaming revenues.  ARPU on a pro
forma basis was down 5.8 percent versus pro forma results for the same period in
2003.  Year-over-year ARPU was adversely impacted by the transition of customers
to GSM plans, Family Talk, and non-cash deferrals of Rollover minutes.  ARPU
from data services continued its strong growth, reaching $2.89 on a reported
basis.  This growth was driven by the popularity of text messaging, mobile e-
mail, downloadable ringtones, games and photo messaging.

Cingular's normalized fourth quarter service margin from operating income before
depreciation and amortization was 23.2 percent.  This segment's normalized
operating margin, which excludes integration costs, was 1.0 percent.  Fourth-
quarter expenses and margins reflect negative impacts from accelerated
depreciation, higher operating costs from high levels of gross customer
additions, upgrade costs, costs associated with the progress in customer
conversions to new Cingular GSM contracts, and a range of customer service
initiatives.  Synergies from the merger will benefit Cingular's financial
results as the integration plans progress in 2005.



Cingular has reached several important milestones in the integration process of
AT&T Wireless operations and services.  In addition to this quarter's net adds,
Cingular integrated essentially all customer-facing operations by launch date
and has migrated over 1 million AT&T Wireless subscribers to new Cingular
postpaid plans.






Advertising & Publishing

In the fourth quarter of 2004, Advertising & Publishing grew revenue by 1.1
percent year-over-year to $528 million.  Operating margin for the fourth quarter
of 2004 was 45.3 percent compared to 46.0 percent in the fourth quarter of 2003.
  Segment net income was $145 million compared to $147 million in the fourth
quarter of 2003.  Full year 2004 revenue was $2.0 billion, a 1.5 percent decline
compared to 2003, and full year operating margins were stable at 47.3 percent
compared to 47.5 percent in 2003.





Discontinued Operations: Latin America

In March 2004, BellSouth signed a definitive agreement with Telefonica Moviles,
the wireless affiliate of Telefonica, S.A., to sell BellSouth's interests in its
10 Latin American operations.  As of Jan. 11, 2005, BellSouth completed the sale
of all 10 operations.



The Company's financial statements, as of Dec. 31, 2004, reflect results for the
Latin American segment in the line item titled Discontinued Operations.  For the
fourth quarter, BellSouth reported income from discontinued operations of 53
cents per share compared to a loss of 3 cents per share in the fourth quarter of
2003.  Results for the fourth quarter of 2004 include an after-tax gain of $915
million related to eight of the 10 properties that were closed prior to
year-end.  BellSouth will report an after-tax gain of approximately $385 million
to $405 million in the first quarter of 2005 related to the January closing of
the remaining two properties.





Normalizing Items

In the fourth quarter of 2004, the difference between reported (GAAP) EPS from
continuing operations and normalized EPS is shown in the following table:


                                                                   4Q04      4Q03
GAAP Diluted EPS - Income from continuing operations               $0.27    $0.45

Hurricane-related expenses                                         $0.04
Wireless merger integration costs                                  $0.03
Severance and lease termination costs                              $0.01    $0.01

Normalized Diluted EPS - Income from continuing operations         $0.35    $0.46



Hurricane-related expenses - Represents the incremental labor and material costs
incurred during the fourth quarter related to service restoration and network
repairs in the wireline business due to Hurricanes Charley, Frances, Ivan and
Jeanne.


Wireless merger integration costs - Represents BellSouth's 40 percent share of
tax-effected wireless merger integration costs of $245 million incurred during
the fourth quarter in connection with the Cingular/AWE merger.



Severance and lease termination costs - Represents the net severance-related
costs recorded in the fourth quarter associated with previously announced
workforce reductions and a provision related to surplus office space under
long-term leases.
About BellSouth Corporation


BellSouth Corporation is a Fortune 100 communications company headquartered in
Atlanta, GA and a parent company of Cingular Wireless, the nation's largest
wireless voice and data provider.



Backed by award winning customer service, BellSouth offers the most
comprehensive and innovative package of voice and data services available in the
market. Through BellSouth Answers(R), residential and small business customers
can bundle their local and long distance service with dial up and high speed DSL
Internet access, satellite television and Cingular(R) Wireless service. For
businesses, BellSouth provides secure, reliable local and long distance voice
and data networking solutions. BellSouth also offers online and directory
advertising through BellSouth(R) RealPages.com(R) and The Real Yellow Pages(R).



More information about BellSouth can be found at http://www.bellsouth.com.





Further information about BellSouth and Cingular's fourth quarter earnings can
be accessed at www.bellsouth.com/investor.  The press release, financial
statements and Investor News summarizing highlights of the quarter are available
on the BellSouth Investor Relations website starting today at 8 a.m. Eastern
Time (ET).



BellSouth will host a conference call with investors today at 10 a.m. (ET).
Participating will be BellSouth CFO Ron Dykes and Investor Relations Vice
President Nancy Davis.  Dial-in information for the conference call is as
follows:

Domestic:  888-370-1863

International:  706-634-1735



The conference call will also be webcast live beginning at 10 a.m. (ET) on our
website at www.bellsouth.com/investor.  The webcast will be archived on our
website beginning at approximately 1 p.m. (ET) today.



A replay of the call will be available beginning at approximately 1 p.m. (ET)
today, through Feb. 1, 2005, and can be accessed by dialing:

Domestic:  800-642-1687 - Reservation number:  2940113

International:  706-645-9291 - Reservation number:  2940113



In addition to historical information, this document may contain forward-looking
statements regarding events and financial trends. Factors that could affect
future results and could cause actual results to differ materially from those
expressed or implied in the forward-looking statements include: (i) a change in
economic conditions in markets where we operate or have material investments
which would affect demand for our services; (ii) the intensity of competitive
activity and its resulting impact on pricing strategies and new product
offerings; (iii) higher than anticipated cash requirements for investments, new
business initiatives and acquisitions; (iv) unfavorable regulatory actions; and
(v) those factors contained in the Company's periodic reports filed with the
SEC. The forward-looking information in this document is given as of this date
only, and BellSouth assumes no duty to update this information.

This document may also contain certain non-GAAP financial measures. The most
directly comparable GAAP financial measures, and a full reconciliation of
non-GAAP to GAAP financial information, are attached hereto and provided on the
Company's investor relations website, www.bellsouth.com/investor.

For More Information Contact:

Jeff Battcher, Media Relations at 404-249-2793

BellSouth Investor Relations at 800-241-3419


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