Edgar Filing: BELLSOUTH CORP

FILED PURSUANT TO RULE 424(B)(2)
REGISTRATION NO. 333-67084
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 23, 2001)
$2,750,000,000

BELLSOUTH CORPORATION
$1,000,000,000 5% NOTES DUE 2006
$1,000,000,000 6% NOTES DUE 2011
$750,000,000 6 7/8% NOTES DUE 2031

The 2006 Notes will mature on October 15, 2006, the 2011 Notes will mature
on October 15, 2011 and the 2031 Notes will mature on October 15, 2031. Interest
on the Notes is payable semiannually on April 15 and October 15, beginning April
15, 2002. BellSouth may redeem some or all of the Notes at any time at the
redemption price described under the heading "Description of Notes--Optional
Redemption and Ability to Purchase" on page S-10 of this prospectus supplement.
There is no sinking fund.

Application has been made to list the Notes on the Luxembourg Stock
Exchange.

PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNTS BELLSOUTH
-------------- ------------ ------------

Per 2006 Note...................................... 99.775% 0.350% 99.425%
Total............................................ $997,750,000 $3,500,000 $994,250,000
Per 2011 Note...................................... 99.698% 0.450% 99.248%
Total............................................ $996,980,000 $4,500,000 $992,480,000
Per 2031 Note...................................... 99.350% 0.875% 98.475%
Total............................................ $745,125,000 $6,562,500 $738,562,500

Interest on the Notes will accrue from October 25, 2001 to the date of
delivery.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMIS-SION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The Underwriters expect to deliver the Notes, in book-entry form only, to
purchasers through The Depository Trust Company, Clearstream, Luxembourg or the
Euroclear System, as the case may be, on or about October 25, 2001.
Joint Bookrunners
MORGAN STANLEY SALOMON SMITH BARNEY
------------------

LEHMAN BROTHERS
------------------
ABN AMRO INCORPORATED JPMORGAN
GUZMAN & COMPANY
JACKSON SECURITIES INCORPORATED
THE WILLIAMS CAPITAL GROUP, L.P.
October 22, 2001

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS
PROSPECTUS SUPPLEMENT.

BELLSOUTH ACCEPTS RESPONSIBILITY FOR THE INFORMATION CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. THE LUXEMBOURG STOCK
EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF THIS DOCUMENT, MAKES NO
REPRESENTATION AS TO ITS ACCURACY OR COMPLETENESS AND EXPRESSLY DISCLAIMS ANY
LIABILITY WHATSOEVER FOR ANY LOSS NO MATTER HOW ARISING FROM OR IN RELIANCE UPON
THE WHOLE OR ANY PART OF THE CONTENTS OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS.

WE CANNOT GUARANTEE THAT LISTING WILL BE OBTAINED ON THE LUXEMBOURG STOCK
EXCHANGE AS OF THE SETTLEMENT DATE OR AT ANY TIME THEREAFTER, AND SETTLEMENT OF
THE NOTES IS NOT CONDITIONED ON OBTAINING THIS LISTING. INQUIRIES REGARDING OUR
LISTING STATUS ON THE LUXEMBOURG STOCK EXCHANGE SHOULD BE DIRECTED TO OUR
LUXEMBOURG LISTING AGENT, BANQUE INTERNATIONALE A LUXEMBOURG, S.A., 69, ROUTE
D'ESCH, L-2953 LUXEMBOURG.

OFFERS AND SALES OF THE NOTES ARE SUBJECT TO RESTRICTIONS IN THE UNITED
KINGDOM. THE DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT AND PROSPECTUS AND THE
OFFERING OF THE NOTES IN CERTAIN OTHER JURISDICTIONS MAY ALSO BE RESTRICTED BY
LAW. THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN
OFFER OF, OR AN INVITATION ON BELLSOUTH'S BEHALF OR ON BEHALF OF THE
UNDERWRITERS OR ANY OF THEM TO SUBSCRIBE TO OR PURCHASE, ANY OF THE NOTES. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS MAY NOT BE USED FOR OR IN
CONNECTION WITH AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. PLEASE REFER TO THE SECTION
ENTITLED "UNDERWRITING."

ALL REFERENCES IN THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS TO
"UNITED STATES DOLLARS," "U.S. DOLLARS," "DOLLARS," "U.S. $," OR "$" ARE TO THE
CURRENCY OF THE UNITED STATES OF AMERICA.

S-2

TABLE OF CONTENTS

PAGE
----

PROSPECTUS SUPPLEMENT
Special Note Regarding Forward-Looking Statements........... S-4
BellSouth Corporation....................................... S-5
Recent Developments......................................... S-5
Ratio of Earnings to Fixed Charges.......................... S-6
Directors................................................... S-6
Use of Proceeds............................................. S-6
Capitalization.............................................. S-7
Selected Financial Data..................................... S-8
Description of Notes........................................ S-10
United States Federal Taxation.............................. S-19
Underwriting................................................ S-22
Legal Matters............................................... S-24
Independent Accountants..................................... S-24
Where You Can Find More Information......................... S-24
Listing and General Information............................. S-25

PROSPECTUS
Where You Can Find More Information......................... 2
BellSouth Corporation....................................... 3
Ratio of Earnings to Fixed Charges.......................... 3
Use of Proceeds............................................. 3
Description of Securities................................... 4
Plan of Distribution........................................ 7
Legal Opinions.............................................. 7
Independent Accountants..................................... 8

S-3

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this prospectus supplement, the
accompanying prospectus and the documents incorporated by reference contain
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.

There are possible developments that 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 the
document containing such statements. We disclaim any intention or obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

While the below list of cautionary statements is not exhaustive, some
factors that could affect our future operating results, financial position or
cash flows or 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;

-- significant deterioration in foreign currencies relative to the U.S.
Dollar in foreign countries in which we operate;

-- changes in U.S. or foreign laws or regulations, or in their
interpretations, which could result in the loss, or reduction in
value, of our licenses, concessions or markets, or in an increase in
competition, compliance costs or capital expenditures;

-- a decrease in the growth rate of demand for the services which we
offer;

-- 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;

-- the outcome of pending litigation;

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

-- the impact of terrorist attacks on our business; and

-- the impact and the success of the wireless joint venture with SBC
Communications, known as Cingular Wireless, including marketing and
product development efforts and financial capacity.

S-4

BELLSOUTH CORPORATION

BellSouth was incorporated in 1983 under the laws of the State of Georgia
and has its principal executive offices at 1155 Peachtree Street, N.E., Atlanta,
Georgia 30309-3610 (telephone number 404-249-2000).

BellSouth is a holding company, whose principal subsidiary, BellSouth
Telecommunications, Inc., is the predominant wireline communications services
provider to substantial portions of the population of Alabama, Florida, Georgia,
Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee.

We conduct our domestic wireless operations through our 40 percent
ownership interest in Cingular Wireless, a joint venture in which BellSouth and
SBC Communications Inc. share control. Our Latin American subsidiaries and joint
ventures provide wireless communications as well as Internet service and
advertising and publishing in 11 countries in Latin America. Other BellSouth
subsidiaries provide domestic advertising and publishing services, including
printing and selling advertising and telephone directories, both paper and
electronic. We also have investments in wireless communications operations in
four countries outside Latin America.

RECENT DEVELOPMENTS

On October 18, 2001, we announced normalized earnings per share ("EPS") for
the third quarter of 2001 of 56 cents, before the impact of special items.
Normalized EPS included a 3-cent reduction related to foreign currency losses.
Without that impact, normalized EPS would have been 59 cents. Normalized EPS in
the third quarter of 2000 was 55 cents.

On a reported basis, EPS in the third quarter of 2001 was zero. Reported
results were affected by a number of special items. BellSouth recorded a charge
of 54 cents per share resulting from the impairment of certain strategic
investments in publicly traded and private equity securities--principally our
investment in Qwest Communications International. As required under generally
accepted accounting principles, we regularly monitor and evaluate the realizable
value of our investments. In addition, we sold approximately 4.5 million shares
of Qwest during the quarter, resulting in a loss of three cents per share.
During the quarter, we closed on the sale of our 24.5 percent interest in
Skycell, a wireless carrier in India, resulting in a gain of one cent per share.

We also announced that we will record an after-tax charge of $170 million
to $200 million, or 9 to 10 cents per share, during the fourth quarter to
reflect restructuring actions and related asset impairments. These actions are
being taken to reduce operating costs in response to a slowing economy and
increased competition. Targeted reductions will be largely focused on staff
support functions, resulting in the elimination of approximately 3,000
positions.

S-5

RATIO OF EARNINGS TO FIXED CHARGES

For the nine months ended September 30, 2001, our ratio of earnings to
fixed charges was 3.64 as compared to 5.37 for the nine months ended September
30, 2000. For the purpose of calculating the ratio of earnings to fixed charges,
earnings consists of:

-- Income from continuing operations before deduction for taxes and
interest;

-- A portion of rental expense representative of the interest factor;

-- Equity in losses from less-than-50% owned investments; and

-- Excess of earnings over distributions of less-than-50% owned
investments.

For the purpose of calculating the ratio of earnings to fixed charges,
fixed charges consists of:

-- Interest; and

-- A portion of rental expense representative of the interest factor.

DIRECTORS

NAME POSITION
------------------------------------- ------------------------------------------------------------

F. Duane Ackerman.................... Chairman, President and Chief Executive Officer
Reuben V. Anderson................... Partner, Phelps Dunbar
James H. Blanchard................... Chairman and Chief Executive Officer, Synovus Financial
Corp.
J. Hyatt Brown....................... Chairman, President and Chief Executive Officer, Brown &
Brown, Inc.
Armando M. Codina.................... Chairman and Chief Executive Officer, Codina Group Inc.
Kathleen F. Feldstein................ President, Economics Studies, Inc.
James P. Kelly....................... Chairman and Chief Executive Officer, United Parcel Service,
Inc.
Joseph M. Magliochetti............... Chairman, President and Chief Executive Officer, Dana
Corporation
John G. Medlin....................... Chairman Emeritus, Wachovia Corporation
Leo F. Mullin........................ Chairman and Chief Executive Officer, Delta Air Lines, Inc.
Eugene F. Murphy..................... Retired Vice Chairman and Executive Officer, General
Electric Company
Robin B. Smith....................... Chairman and Chief Executive Officer, Publishers Clearing
House
William S. Stavropoulos.............. Chairman, The Dow Chemical Company

USE OF PROCEEDS

The net proceeds to BellSouth from the Notes offering will be approximately
$2,725,292,500, before deducting expenses. These proceeds will be used to repay
commercial paper. As of September 30, 2001, BellSouth had outstanding
approximately $5.0 billion in commercial paper, bearing interest at annual rates
ranging from 2.4% to 3.9%. Pending such use, a portion of such funds may be
invested in short-term securities. BellSouth has used the commercial paper to
repay indebtedness and for working capital, capital expenditures and other
purposes.

S-6

CAPITALIZATION

The following table sets forth the consolidated capitalization of BellSouth
as of September 30, 2001.

SEPTEMBER 30,
2001
-------------
(DOLLARS IN
MILLIONS)
(UNAUDITED)

Debt maturing within one year............................... $ 6,961
-------
Long-term debt (including discount and premium):
Debentures................................................ $ 7,542
Notes and other long-term debt............................ 5,563
-------
Total Long-term debt................................... $13,105
Shareholders' Equity:
Common Stock and other(1)................................. $ 3,336
Retained earnings......................................... 14,704
-------
Total Shareholders' Equity............................. $18,040
-------
Total Capitalization.............................. $38,106

------------
(1) Our authorized capital stock consists of 8,650,000,000 shares of common
stock, par value $1.00 per share, of which 1,876,830,786 shares were issued
and outstanding on September 30, 2001 and 100,000,000 shares of first
preferred stock, par value $1.00 per share, of which no shares were issued
and outstanding on September 30, 2001.

Except as described in this prospectus supplement, the accompanying
prospectus or in the documents incorporated by reference in the prospectus,
there has been no material change in BellSouth's consolidated capitalization
since September 30, 2001.

S-7

SELECTED FINANCIAL DATA

We derived the information presented below from BellSouth's audited and
unaudited financial statements for the periods presented. The information is
only a summary and you should read it together with the financial information
incorporated by reference in this prospectus.

SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------- ------------------
1998(1) 1999(2) 2000(3) 2000(4) 2001(5)
------- ------- ------- ------- -------
(DOLLARS IN MILLIONS)

INCOME STATEMENT DATA:
Operating revenues....................... $23,123 $25,224 $26,151 $13,141(6) $11,904(6)
Operating expenses....................... 17,219 18,787 19,267 9,571(6) 8,753(6)
Operating income......................... 5,904 6,437 6,884 3,570 3,151
Interest expense......................... 837 1,030 1,328 638 694
Net earnings (losses) of equity
affiliates............................. 92 (169) 690 153 190
Gain (loss) on sale of operations........ 335 55 (14) -- --
Other income, net........................ 257 195 366 129 164
Income before income taxes............... 5,751 5,488 6,598 3,214 2,811
Provision for income taxes............... 2,224 2,040 2,378 1,149 1,040
Net income............................... 3,527 3,448 4,220 2,065 1,771

AT DECEMBER 31, AT JUNE 30,
----------------------------- ------------------
1998 1999 2000 2000 2001
------- ------- ------- ------- -------

BALANCE SHEET DATA:
Cash and cash equivalents................ $ 3,143 $ 1,287 $ 1,061 $ 1,520 $ 658
Total assets............................. $39,410 $43,453 $50,925 $46,088 $50,965
Long-term debt........................... $ 8,715 $ 9,113 $12,463 $10,869 $13,043
Shareholders' equity..................... $16,110 $14,815 $16,912 $16,502 $17,880
OTHER:
Debt ratio at end of period.............. 43.0% 53.1% 54.2% 50.6% 51.6%
Ratio of earnings to fixed charges....... 7.09x 5.98x 5.09x 5.45x 4.66x

------------
(1) The 1998 period presented included a pretax gain of $155 million ($96
million after tax) associated with additional proceeds received in 1998 on
the 1997 sale of ITT World Directories, Inc. and a pretax gain of $180
million ($110 million after tax) associated with the sale of BellSouth New
Zealand. The 1998 period also included pretax income of $102 million ($62
million after tax) as a result of the payment contingent interest and
prepayment penalties associated with an advance to an affiliate.

(2) The 1999 period presented included: foreign currency losses of $308 million
related to the devaluation of the Brazilian Real; losses of $320 million
($187 million after tax) due to an asset impairment; the recognition of
foreign investment tax credits generated in prior years which increased net
income $95 million; and a gain of $39 million ($23 million after tax) on the
sale of Honolulu Cellular.

(3) The results of the year ended December 31, 2000 included: income of $143
million ($68 million after tax) related to the restructuring of our
ownership interest in German wireless operator E-Plus; expense of $78
million ($48 million after tax) recorded as a result of an announced general
and administrative staff reduction plan; pretax income of $479 million ($292
million after tax) generated from the dissolution of the AB Cellular
partnership, pension settlement gains which increased pretax income by $362
million ($223 million after tax); expense of $498 million ($323 million
after tax) resulting from the restructuring of our wireless video
entertainment business; and expense of $203 million ($125 million after tax)
associated with the termination of a contract.

(4) The results of the six months ended June 30, 2000 included: income of $143
million ($68 million after tax) related to the restructuring of our
ownership interest in German wireless operator E-Plus and expense of $78
million ($48 million after tax) recorded as a result of an announced general
and administrative staff reduction plan.

(footnotes continue on next page)

S-8

(5) The results for the six months ended June 30, 2001 included: expense of $143
million ($88 million after tax) to adjust an accrual for reciprocal
compensation; a loss of $50 million ($32 million after tax) from the sale of
shares of Qwest Communications International common stock; and expense of
$72 million ($47 million after tax) for changes in postretirement medical
benefits.

(6) The decrease in consolidated revenues and expenses between the six months
ended June 30, 2000 and the six months ended June 30, 2001 is attributable
to BellSouth's contribution of its previously consolidated domestic wireless
businesses to the new Cingular joint venture.

S-9

DESCRIPTION OF NOTES

As used herein, the term "2006 Notes" refers to the 5% Notes due 2006, the
term "2011 Notes" refers to the 6% Notes due 2011 and the term "2031 Notes"
refers to the 6 7/8% Notes due 2031.

The 2006 Notes, the 2011 Notes and the 2031 Notes will be issued as
separate series of debt securities under an indenture, dated as of August 15,
2001, between BellSouth Corporation and SunTrust Bank, as trustee (the
"Trustee"). The provisions of the indenture are more fully described under
"Description of Securities" in the accompanying prospectus. Capitalized terms
not otherwise defined in this section have the meanings given to them in the
accompanying prospectus and the indenture. As of the date of this prospectus
supplement, no debt securities have been previously issued under the indenture.

GENERAL

The Notes will have the following terms:

PRINCIPAL INTEREST
AMOUNT RATE MATURITY DATE
---------------- ------------- -----------------

2006 Notes........................... $1,000,000,000 5.000% October 15, 2006
2011 Notes........................... $1,000,000,000 6.000% October 15, 2011
2031 Notes........................... $ 750,000,000 6.875% October 15, 2031

In each case, interest will accrue from October 25, 2001, or from the most
recent interest payment date to which interest has been paid or duly provided
for. Interest will be payable semiannually on April 15 and October 15 of each
year, commencing April 15, 2002, to the persons in whose names the Notes are
registered at the close of business on April 1 or October 1, as the case may be,
next preceding such interest payment date. Interest will be calculated on the
basis of a 360-day year of twelve 30-day months.

The Notes will not have the benefit of a sinking fund.

We may reopen any series of Notes for additional issuances at any time.

RANKING

The Notes will be senior unsecured obligations of BellSouth and will rank
equally with all other senior unsecured and unsubordinated indebtedness of
BellSouth.

The Notes will be effectively subordinated to any secured indebtedness of
BellSouth, to the extent of the value of the assets securing such indebtedness.
The indenture permits BellSouth to encumber its assets provided that we likewise
secure our outstanding securities, including the Notes and any other of our
obligations which may be entitled to the benefit of a similar covenant. See
"Description of Securities--Lien on Assets" in the accompanying prospectus.
BellSouth's assets consist principally of the stock of and advances to its
subsidiaries. Almost all the operating assets of BellSouth and its consolidated
subsidiaries are owned by such subsidiaries and BellSouth relies primarily on
interest and dividends from such subsidiaries to meet its obligations for
payment of principal and interest on its outstanding debt obligations, including
guarantees, and corporate expenses. The Notes will be structurally subordinated
to all obligations, including trade payables, of subsidiaries of BellSouth.

OPTIONAL REDEMPTION AND ABILITY TO PURCHASE

The Notes will be redeemable, as a whole or in part, at the option of
BellSouth, at any time or from time to time, on at least 30 days', but not more
than 60 days', prior notice mailed to the registered address of each holder of
Notes. The redemption prices will be equal to the greater of (1) 100% of the
principal amount of the Notes to be redeemed or (2) the sum of the present
values of the Remaining Scheduled

S-10

Payments (as defined below) discounted, on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months), at a rate equal to the sum of
the Treasury Rate (as defined below) and:

-- 15 basis points for the 2006 Notes

-- 20 basis points for the 2011 Notes

-- 25 basis points for the 2031 Notes

In the case of each of clauses (1) and (2), accrued interest will be payable to
the redemption date.

"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity (computed as of the
second business day immediately preceding such redemption date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.

"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the 2006 Notes, the 2011 Notes or the 2031 Notes, as the
case may be, to be redeemed that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of such
Notes.

"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by BellSouth.

"Comparable Treasury Price" means, with respect to any redemption date, (1)
the average of the Reference Treasury Dealer Quotations for such redemption date
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations or (2) if the Trustee obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such quotations.

"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m., New York
City time, on the third business day preceding such redemption date.

"Reference Treasury Dealer" means each of Morgan Stanley & Co. Incorporated
and Salomon Smith Barney Inc. and their respective successors and three other
primary U.S. Government securities dealers (each a "Primary Treasury Dealer")
selected by BellSouth. If any of the foregoing shall cease to be a Primary
Treasury Dealer, BellSouth shall substitute another nationally recognized
investment banking firm that is a Primary Treasury Dealer.

"Remaining Scheduled Payments" means, with respect to each Note to be
redeemed, the remaining scheduled payments of principal of and interest on such
Note that would be due after the related redemption date but for such
redemption. If such redemption date is not an interest payment date with respect
to such Note, the amount of the next succeeding scheduled interest payment on
such Note will be reduced by the amount of interest accrued on such Note to such
redemption date.

On and after the redemption date, interest will cease to accrue on the
Notes or any portion of the Notes called for redemption (unless BellSouth
defaults in the payment of the redemption price and accrued interest). On or
before the redemption date, BellSouth will deposit with a paying agent (or the
Trustee) money sufficient to pay the redemption price of and accrued interest on
the Notes to be redeemed on such date. If less than all of the Notes of any
series are to be redeemed, the Notes to be redeemed shall be selected by the
Trustee by such method as the Trustee shall deem fair and appropriate.

For so long as the Notes are listed on the Luxembourg Stock Exchange and
the rules of the Luxembourg Stock Exchange so require, notice of redemption
shall be given by publication in a leading newspaper having general circulation
in Luxembourg (which is expected to be the Luxemburger Wort). If

S-11

in the opinion of the Trustee or the Luxembourg Paying and Transfer Agent (as
defined below) publication in such manner is not practicable, notices will be
deemed duly given if published in such other leading daily newspaper(s) with
general circulation in Western Europe as the Trustee or the Paying Agent may
approve.

The repayment price of any Note redeemed at maturity will equal the
principal amount of the Note.

The terms of the Notes do not prevent BellSouth from purchasing Notes on
the open market.

GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES

Investors in the global securities representing any of the Notes (the
"Global Notes") may hold a beneficial interest in such Global Notes through The
Depository Trust Company ("DTC"), Clearstream Banking, societe anonyme
("Clearstream") or the Euroclear System ("Euroclear") or through participants.
The Notes may be traded as home market instruments in both the European and U.S.
domestic markets. Initial settlement and all secondary trades will settle as set
forth below.

Clearstream has advised that it is incorporated under the laws of the Grand
Duchy of Luxembourg as a professional depositary. Clearstream holds securities
for its participating organizations ("Clearstream Participants"). Clearstream
facilitates the clearance and settlement of securities transactions between
Clearstream Participants through electronic book-entry changes in accounts of
Clearstream Participants, eliminating the need for physical movement of
certificates. Clearstream provides to Clearstream Participants, among other
things, services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. As a
professional depositary, Clearstream is subject to regulation by the Luxembourg
Commission for the Supervision of the Financial Sector (CSSF). Clearstream
Participants are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. Indirect access to Clearstream is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Clearstream
Participant, either directly or indirectly.

Distributions, to the extent received by the U.S. Depositary (as defined
below) for Clearstream, with respect to the Notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream Participants in
accordance with its rules and procedures.

Euroclear has advised that it was created in 1968 to hold securities for
its participants ("Euroclear Participants") and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment, eliminating the need for physical movement of
certificates and eliminating any risk from lack of simultaneous transfers of
securities and cash. Euroclear provides various other services, including
securities lending and borrowing and interfaces with domestic markets in several
countries. Euroclear is operated by Euroclear Bank S.A./N.V. (the "Euroclear
Operator"), under contract with Euroclear Clearance Systems S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator not the
Cooperative. The Cooperative establishes policy for Euroclear on behalf of
Euroclear Participants. Euroclear Participants include banks (including central
banks), securities brokers and dealers and other professional financial
intermediaries and may include the underwriters. Indirect access to Euroclear is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.

The Euroclear Operator has advised us that it is licensed by the Belgian
Banking and Finance Commission to carry out banking activities on a global
basis. As a Belgian bank, it is regulated and examined by the Belgian Banking
Commission.

Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and

S-12

Conditions govern transfers of securities and cash within Euroclear, withdrawals
of securities and cash from Euroclear, and receipts of payments with respect to
securities in Euroclear. All securities in Euroclear are held on a fungible
basis without attribution of specific certificates to specific securities
clearance accounts. The Euroclear Operator acts under the Terms and Conditions
only on behalf of Euroclear Participants and has no record of or relationship
with persons holding through Euroclear Participants.

Distributions, to the extent received by the U.S. Depositary for Euroclear,
with respect to Notes held beneficially through Euroclear will be credited to
the cash accounts of Euroclear Participants in accordance with the Terms and
Conditions.

In the event definitive Notes are issued, we will appoint a paying agent
and transfer agent in Luxembourg (the "Luxembourg Paying and Transfer Agent").
Holders of definitive Notes will be able to receive payments and effect
transfers at the offices of the Luxembourg Paying and Transfer Agent.

Individual certificates in respect of Notes will not be issued in exchange
for the Global Notes, except in very limited circumstances. If DTC notifies us
that it is unwilling or unable to continue as a clearing system in connection
with a Global Note or DTC ceases to be a clearing agency registered under the
Securities Exchange Act, and in each case we do not appoint a successor clearing
system within 90 days after receiving such notice from Euroclear, Clearstream or
DTC or on becoming aware that DTC is no longer so registered, we will issue or
cause to be issued individual certificates in registered form on registration of
transfer of or in exchange for book-entry interests in the Notes represented by
such Global Note upon delivery of such Global Note for cancellation.

Title to book-entry interests in the Notes will pass by book-entry
registration of the transfer within the records of Euroclear, Clearstream or
DTC, as the case may be, in accordance with their respective procedures.
Book-entry interests in the Notes may be transferred within Euroclear and within
Clearstream and between Euroclear and Clearstream in accordance with procedures
established for these purposes by Euroclear and Clearstream. Book-entry
interests in the Notes may be transferred within DTC in accordance with
procedures established for this purpose by DTC. Transfers of book-entry
interests in the Notes between Euroclear and Clearstream and DTC may be effected
in accordance with procedures established for this purpose by Euroclear,
Clearstream and DTC.

INITIAL SETTLEMENT

All Global Notes will be registered in the name of Cede & Co. as nominee of
DTC. Investors' interests in the Global Notes will be represented through
financial institutions acting on their behalf as direct and indirect
participants in DTC. As a result, Clearstream and Euroclear will hold positions
on behalf of their participants through their respective depositaries (each, a
"U.S. Depositary"), Citibank, N.A. ("Citibank") and The Chase Manhattan Bank
("Chase"), which in turn will hold such positions in accounts as participants of
DTC.

Notes held through DTC will be settled in immediately available funds.
Investor securities custody accounts will be credited with their holdings
against payment on the settlement date. Notes held through Clearstream or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Notes will be credited to the securities
custody accounts on the settlement date against payment.

SECONDARY MARKET TRADING

Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.

Trading between DTC Participants. Secondary market trading between DTC
participants will be settled in immediately available funds.

S-13

Trading between Clearstream and/or Euroclear Participants. Secondary
market trading between Clearstream participants and/or Euroclear participants
will be settled using the procedures applicable to conventional eurobonds.

Trading between DTC Seller and Clearstream or Euroclear Purchaser. When
beneficial interests in the Global Notes are to be transferred from the account
of a DTC participant to the account of a Clearstream participant or a Euroclear
participant, the purchaser will send instructions to Clearstream or Euroclear
through a participant at least one business day prior to settlement. Clearstream
or Euroclear will instruct Citibank or Chase, as the case may be, to receive a
beneficial interest in the Global Notes against payment. Unless otherwise set
forth in this prospectus supplement, payment will include interest accrued on
the beneficial interest in the Global Notes so transferred from and including
the last interest payment date to and excluding the settlement date, on the
basis on which interest is calculated on the Notes. For transactions settling on
the 31st of the month, payment will include interest accrued to and excluding
the first day of the following month. Payment will then be made by Citibank or
Chase to the DTC participant's account against delivery of the beneficial
interest in the Global Notes. After settlement has been completed, the
beneficial interest in the Global Notes will be credited to the respective
clearing system and by the clearing system, in accordance with its usual
procedures, to the Clearstream or Euroclear participant's account. The
securities credit will appear the next day (European time) and the cash debit
will be back-valued to, and interest on the beneficial interest in the Global
Notes will accrue from, the value date (which would be the preceding day when
settlement occurred in New York). If settlement is not completed on the intended
value date (that is, the trade fails), the Clearstream or Euroclear cash debit
will be valued instead as of the actual settlement date.

Clearstream participants and Euroclear participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to preposition
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Clearstream or Euroclear. Under
this approach, they may take on credit exposure to Clearstream or Euroclear
until the beneficial interests in the Global Notes are credited to their
accounts one day later.

As an alternative, if Clearstream or Euroclear has extended a line of
credit to them, participants can elect not to preposition funds and allow that
credit line to be drawn upon to finance settlement. Under this procedure,
Clearstream participants or Euroclear participants purchasing a beneficial
interest in the Global Notes would incur overdraft charges for one day, assuming
they cleared the overdraft when the beneficial interests in the Global Notes
were credited to their accounts. However, interest on the beneficial interests
in the Global Notes would accrue from the value date. Therefore, in many cases
the investment income on the Global Notes earned during that one-day period may
substantially reduce or offset the amount of such overdraft charges, although
this result will depend on each participant's particular cost of funds.

Since the settlement is taking place during New York business hours, DTC
participants can employ their usual procedures for sending a beneficial interest
in the Global Notes to Citibank or Chase for the benefit of Clearstream
participants or Euroclear participants. The sale proceeds will be available to
the DTC seller on the settlement date. Thus, to the DTC participant a
cross-market transaction will settle no differently than a trade between two DTC
participants.

Trading between Clearstream or Euroclear Seller and DTC Purchaser. Due to
time zone differences in their favor, Clearstream and Euroclear participants may
employ their customary procedures in transactions in which a beneficial interest
in the Global Notes is to be transferred by the respective clearing system,
through Citibank or Chase, to a DTC participant. The seller will send
instructions to Clearstream or Euroclear through a participant at least one
business day prior to settlement. In these cases, Clearstream or Euroclear will
instruct Citibank or Chase, as appropriate, to deliver the beneficial interest
in the Global Notes to the DTC participant's account against payment. Payment
will include interest accrued on the beneficial interest in the Global Notes
from and including the last coupon payment date to and excluding the settlement
date on the basis on which interest is calculated on the Global Notes. For
transactions settling on the 31st of the month, payment will include interest
accrued to and excluding

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the first day of the following month. The payment will then be reflected in the
account of the Clearstream or Euroclear participant the following day, and
receipt of the cash proceeds in the Clearstream or Euroclear participant's
account would be back-valued to the value date (which would be the preceding
day, when settlement occurred in New York). Should the Clearstream or Euroclear
participant have a line of credit with its respective clearing system and elect
to be in debit in anticipation of receipt of the sale proceeds in its account,
the back-valuation will extinguish any overdraft charges incurred over that
one-day period. If settlement is not completed on the intended value date (that
is, the trade fails), receipt of the cash proceeds in the Clearstream or
Euroclear participant's account would instead be valued as of the actual
settlement date.

Finally, day traders that use Clearstream or Euroclear and that purchase
beneficial interests in the Global Notes from DTC participants for credit to
Clearstream participants or Euroclear participants should note that these trades
would automatically fail on the sale side unless affirmative action is taken. At
least three techniques should be readily available to eliminate this potential
problem:

(1) borrowing through Clearstream or Euroclear for one day (until the
purchase side of the day trade is reflected in their Clearstream or
Euroclear accounts) in accordance with the clearing system's customary
procedures;

(2) borrowing beneficial interests in the Global Notes in the United
States from a DTC participant no later than one day prior to settlement,
which would give beneficial interests in the Global Notes sufficient time
to be reflected in the appropriate Clearstream or Euroclear account in
order to settle the sale side of the trade; or

(3) staggering the value dates for the buy and sell sides of the
trade so that the value date for the purchase from the DTC participant is
at least one day prior to the value date for the sale to the Clearstream
participant or Euroclear participant.

Although the DTC, Clearstream, and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of beneficial interests in the
Global Notes among participants of the DTC, Clearstream, and Euroclear, they are
under no obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.

PAYMENT OF ADDITIONAL AMOUNTS

We will pay to any non-United States Holder (as defined below) such
additional amounts as may be necessary in order that every net payment in
respect of the principal, premium, if any, or interest, on such Note, after
deduction or withholding by BellSouth or any paying agent for or on account of
any present or future tax, assessment or governmental charge imposed upon or as
a result of such payment by the United States or any political subdivision or
taxing authority thereof or therein, will not be less than the amount provided
for in such Note to be then due and payable before any such deduction or
withholding for or on account of any such tax, assessment or governmental
charge. The foregoing obligation to pay such additional amounts shall not apply
to:

(a) any tax, assessment or other governmental charge which would not have
been so imposed but for:

-- the existence of any present or former connection between the holder
(or a fiduciary, settlor, beneficiary, member or shareholder of, or
holder of a power over, such holder, if such holder is an estate,
trust, partnership or corporation) and the United States, including,
without limitation, the holder (or such fiduciary, settlor,
beneficiary, member, shareholder of, or holder of a power) being or
having been a citizen or resident or treated as a resident thereof or
being or having been engaged in a trade or business therein or being
or having been present therein or having or having had a permanent
establishment therein or

S-15

-- the holder's present or former status as a personal holding company
or foreign personal holding company or controlled foreign corporation
for United States federal income tax purposes or corporation which
accumulates earnings to avoid United States federal income tax;

(b) any tax, assessment or other governmental charge which would not have
been so imposed but for the presentation by the holder of such Note for payment
on a date more than 10 days after the date on which such payment becomes due and
payable or the date on which payment thereof is duly provided for, whichever
occurs later;

(c) any estate, inheritance, gift, sales, transfer, personal property or
excise tax or any similar tax, assessment or governmental charge;

(d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments in respect of principal of, premium,
if any, or interest on any Note;

(e) any tax, assessment or other governmental charge imposed on interest
received by a holder or beneficial owner of a Note who actually or
constructively owns 10% or more of the total combined voting power of all
classes of stock of BellSouth entitled to vote within the meaning of Section
871(h)(3) of the United States Internal Revenue Code of 1986, as amended;

(f) any tax, assessment or other governmental charge imposed as a result
of the failure to comply with:

-- certification, information, documentation, reporting or other similar
requirements concerning the nationality, residence, identity or
connection with the United States of the holder or beneficial owner
of the Note, if such compliance is required by statute, or by
regulation of the United States Treasury Department, as a
precondition to relief or exemption from such tax, assessment or
other governmental charge (including backup withholding) or

-- any other certification, information, documentation, reporting or
other similar requirements under United States income tax laws or
regulations that would establish entitlement to otherwise applicable
relief or exemption from such tax, assessment or other governmental
charge;

(g) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of the principal of, premium, if
any, or interest, if any, on any Note, if such payment can be made without such
withholding by at least one other paying agent;

(h) any tax, assessment or other governmental charge required to be
withheld on a payment to an individual pursuant to any European Union Directive
on taxation of savings implementing the conclusions of the ECOFIN (European
Union's Economic and Finance Ministers) Council meeting of 26-27 November 2000
or any law implementing or complying with, or introduced in order to conform to,
such Directive; or

(i) any combination of items (a), (b), (c), (d), (e), (f), (g) and (h);

nor will such additional amounts be paid to any holder who is a fiduciary or
partnership or other than the sole beneficial owner of the Note to the extent a
settlor or beneficiary with respect to such fiduciary or a member of such
partnership or a beneficial owner of the Note would not have been entitled to
payment of such additional amounts had such beneficiary, settlor, member or
beneficial owner been the holder of the Note.

The Notes are subject in all cases to any tax, fiscal or other law or
regulation or administrative or judicial interpretation applicable thereto.
Except as specifically provided under this heading "--Payment of Additional
Amounts" and under the heading "--Redemption for Tax Reasons", BellSouth shall
not be required to make any payment with respect to any tax, assessment or
governmental charge imposed by any government or a political subdivision or
taxing authority thereof or therein.

As used under this heading "--Payment of Additional Amounts" and under the
headings "--Redemption for Tax Reasons" and "United States Federal Taxation--Tax
Consequences to Non-

S-16

United States Holders" the term "United States" means the United States of
America (including the States and the District of Columbia) and its territories,
its possessions and other areas subject to its jurisdiction. "United States
Holder" has the meaning set forth in "United States Federal Taxation--Tax
Consequences to United States Holders" and "non-United States Holder" has the
meaning set forth in "United States Federal Taxation--Tax Consequences to
Non-United States Holders" below.

REDEMPTION FOR TAX REASONS

If, as a result of:

-- any change in or amendment to the laws (including any regulations or
rulings promulgated thereunder) of the United States or any political
subdivision thereof or therein affecting taxation, which becomes
effective after the date of this prospectus supplement or which
proposal is made after such date,

-- any change in the official application or interpretation of such
laws, including any official proposal for such a change in the
application or interpretation of such laws, which change is announced
or becomes effective after the date of this prospectus supplement or
which proposal is made after such date,

-- any action taken by any taxing authority of the United States which
action is taken or becomes generally known after the date of this
prospectus supplement, or any commencement of a proceeding in a court
of competent jurisdiction in the United States after such date,
whether or not such action was taken or such proceeding was brought
with respect to BellSouth,

there is, in such case, in the written opinion of independent legal counsel of
recognized standing to BellSouth, a material increase in the probability that
BellSouth has or may become obligated to pay additional amounts (as described
above under "--Payment of Additional Amounts"), and BellSouth, in its business
judgment, determines that such obligation cannot be avoided by the use of
reasonable measures available to it, not including assignment of the Notes, the
Notes may be redeemed, as a whole but not in part, at BellSouth's option at any
time thereafter, upon notice to the Trustee and the holders of the Notes in
accordance with the provisions of the indenture at a redemption price equal to
100% of the principal amount of the Notes to be redeemed together with accrued
interest thereon to the date fixed for redemption.

NOTICES

Notices to holders of the Notes will be sent by mail to the registered
holders and will be published, whether the notes are in global or definitive
form, and so long as the notes are listed on the Luxembourg Stock Exchange, in a
daily newspaper of general circulation in Luxembourg. It is expected that
publication will be made in Luxembourg in the Luxemburger Wort. Any such notice
shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication. In
addition, so long as the Notes are listed on the Luxembourg Stock Exchange, any
appointment of or change in the Luxembourg Paying and Transfer Agent will be
published in Luxembourg in the manner set forth above.

So long as the Notes are represented by the Global Notes and held on behalf
of a clearing system, notices to holders of the Notes may be given by delivery
of the notice to that clearing system for communication to beneficial holders of
the Notes.

REPLACEMENT NOTES

In case of mutilation, destruction, loss or theft of any definitive Note,
application for replacement is to be made at the office of the Trustee. Any such
definitive Note shall be replaced by such Trustee in compliance with such
procedures, and on such terms as to evidence and indemnity, as BellSouth and the
Trustee may require and subject to applicable laws and regulations of the
Luxembourg Stock Exchange.

S-17

All costs incurred in connection with the replacement of any definitive Note
shall be borne by the holder of the Note. Mutilated or defaced definitive Notes
must be surrendered before new ones will be issued.

GOVERNING LAW

The indenture and the Notes will be governed by the laws of the State of
New York.

S-18

UNITED STATES FEDERAL TAXATION

The following discussion is the opinion of Davis Polk & Wardwell, special
tax counsel. It describes the material United States federal income tax
consequences of ownership and disposition of the Notes. This discussion only
applies to:

-- Notes purchased by those initial holders who purchase Notes at the
"issue price" (as defined below); and

-- Notes held as capital assets.

This discussion does not describe all of the tax consequences that may be
relevant to a holder in light of his particular circumstances or to holders
subject to special rules, such as:

-- certain financial institutions;

-- insurance companies;

-- dealers in securities or foreign currencies;

-- persons holding Notes as part of a hedge;

-- United States Holders whose functional currency is not the U.S.
dollar;

-- non-United States persons owning, actually or constructively, 10% or
more of the total combined voting power of all classes of stock of
BellSouth; or controlled foreign corporations related, directly or
indirectly, to BellSouth through stock ownership;

-- holders for whom interest on the Notes is effectively connected with
a trade or business they conduct in the United States; or

-- individual non-United States Holders who are present in the United
States for more than 183 days during any taxable year.

This summary is based on the Internal Revenue Code of 1986, as amended to
the date hereof, administrative pronouncements, judicial decisions and final,
temporary and proposed Treasury Regulations, changes to any of which subsequent
to the date of this Prospectus may affect the tax consequences described herein.
Persons considering the purchase of Notes should consult their tax advisors with
regard to the application of the United States federal income tax laws to their
particular situations as well as any tax consequences arising under the laws of
any state, local or foreign taxing jurisdiction.

The "issue price" of a Note will equal the first price to the public (not
including bond houses, brokers or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers) at which a
substantial amount of the Notes is sold for money.

TAX CONSEQUENCES TO UNITED STATES HOLDERS

As used herein, the term "United States Holder" means a beneficial owner of
a Note that is for United States federal income tax purposes:

-- a citizen or resident of the United States;

-- a corporation, or other entity taxable as a corporation, created or
organized in or under the laws of the United States or of any
political subdivision thereof; or

-- an estate or trust the income of which is subject to United States
federal income taxation regardless of its source.

The term "United States Holder" also includes certain former citizens and
residents of the United States.

S-19

If a partnership holds Notes, the tax treatment of a partner will generally
depend on the status of the partner and upon the activities of the partnership.
Partners of partnerships holding Notes should consult their tax advisors.

Payments of Interest. Interest paid on a Note will be taxable to a United
States Holder as ordinary interest income at the time it accrues or is received
in accordance with the Holder's method of accounting for federal income tax
purposes.

Sale, Exchange or Retirement of the Notes. Upon the sale, exchange or
retirement of a Note, a United States Holder will recognize taxable gain or loss
equal to the difference between the amount realized on the sale, exchange or
retirement and the Holder's adjusted tax basis in the Note. For these purposes,
the amount realized does not include any amount attributable to accrued interest
on the Note. Amounts attributable to accrued interest are treated as interest as
described under "Payments of Interest" above.

Gain or loss realized on the sale, exchange or retirement of a Note
generally will be capital gain or loss and will be long-term capital gain or
loss if at the time of sale, exchange or retirement the Note has been held for
more than one year. Prospective investors should consult their tax advisors
regarding the treatment of capital gains (which may be taxed at lower rates than
ordinary income for taxpayers who are individuals, trusts or estates) and losses
(the deductibility of which is subject to limitations).

Backup Withholding and Information Reporting. Information returns may be
filed with the Internal Revenue Service in connection with payments on the Notes
and the proceeds from a sale or other disposition of the Notes. You may be
subject to United States backup withholding tax on these payments if you fail to
provide your taxpayer identification number to the paying agent and comply with
certain certification procedures or otherwise establish an exemption from backup
withholding. The amount of any backup withholding from a payment to you will be
allowed as a credit against your United States federal income tax liability and
may entitle you to a refund, provided that the required information is furnished
to the Internal Revenue Service.

TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

As used herein, the term "non-United States Holder" means a beneficial
owner of a Note that is, for United States federal income tax purposes:

-- a nonresident alien individual;

-- a foreign corporation; or

-- a nonresident alien fiduciary of a foreign estate or trust.

Income and Withholding Tax. Subject to the discussion below concerning
backup withholding:

-- payments of principal and interest on the Notes by BellSouth or any
paying agent to any non-United States Holder will not be subject to
United States federal withholding tax, provided that, in the case of
interest, the beneficial owner certifies (generally on an IRS Form
W-8BEN) to the person otherwise required to withhold United States
federal income tax from such interest, under penalties of perjury,
that it is not a United States person; and

-- a non-United States Holder will not be subject to United States
federal income tax on gain realized on the sale, exchange or other
disposition of a Note.

Backup Withholding and Information Reporting. Information returns may be
filed with the United States Internal Revenue Service in connection with
payments on the Notes and the proceeds from a sale or other disposition of the
Notes. You may be subject to United States backup withholding tax on these

S-20

payments unless you comply with certification procedures to establish that you
are not a United States person. The certification procedures required to claim
the exemption from withholding tax on interest described above will satisfy the
certification requirements necessary to avoid the backup withholding tax as
well. The amount of any backup withholding from a payment to you will be allowed
as a credit against your United States federal income tax liability and may
entitle you to a refund, provided that the required information is furnished to
the Internal Revenue Service.

The United States federal income tax discussion set forth above is included
for general information only and may not be applicable depending upon a holder's
particular situation. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF THE NOTES,
INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS
AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.

S-21

UNDERWRITING

Subject to the terms and conditions set forth in an underwriting agreement
dated as of October 22, 2001 (the "Underwriting Agreement") among BellSouth and
Morgan Stanley & Co. Incorporated and Salomon Smith Barney Inc. on behalf of
themselves and the others named in the table below (the "Underwriters"),
BellSouth has agreed to sell to each of the Underwriters, and each of the
Underwriters has severally agreed to purchase, the principal amount of the Notes
set forth opposite its name below.

PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF
UNDERWRITER 2006 NOTES 2011 NOTES 2031 NOTES
----------------------------------- ------------------- ------------------- -------------------

Morgan Stanley & Co.
Incorporated..................... $ 340,000,000 $ 340,000,000 $255,000,000
Salomon Smith Barney Inc. ......... 340,000,000 340,000,000 255,000,000
Lehman Brothers Inc. .............. 150,000,000 150,000,000 112,500,000
ABN AMRO Incorporated.............. 70,000,000 70,000,000 52,500,000
J.P. Morgan Securities Inc. ....... 70,000,000 70,000,000 52,500,000
Guzman & Company................... 10,000,000 10,000,000 7,500,000
Jackson Securities Incorporated.... 10,000,000 10,000,000 7,500,000
The Williams Capital Group,
L.P. ............................ 10,000,000 10,000,000 7,500,000
-------------- -------------- ------------
Total..................... $1,000,000,000 $1,000,000,000 $750,000,000
============== ============== ============

The following table shows the underwriting discounts and commissions to be
paid to the Underwriters by BellSouth in connection with the offering (expressed
as a percentage of the principal amount of the Notes):

UNDERWRITING DISCOUNTS
----------------------

Per 2006 Note............................................... 0.350%
Per 2011 Note............................................... 0.450%
Per 2031 Note............................................... 0.875%

BellSouth has been advised by the Underwriters that they propose initially
to offer the Notes to the public at the public offering prices set forth on the
cover page of this prospectus supplement, and to certain dealers at such price
less a concession not in excess of:

-- 0.2% of the principal amount in the case of the 2006 Notes

-- 0.3% of the principal amount in the case of the 2011 Notes

-- 0.5% of the principal amount in the case of the 2031 Notes

The Underwriters may allow, and such dealers may reallow, a concession to
certain other dealers not in excess of:

-- 0.125% of the principal amount in the case of the 2006 Notes

-- 0.250% of the principal amount in the case of the 2011 Notes

-- 0.250% of the principal amount in the case of the 2031 Notes

After the initial public offering, the public offering prices and such
concessions may be changed from time to time. In addition to underwriting
discounts, BellSouth estimates it will have expenses of approximately $600,000
in connection with the offering of the Notes.

The Notes are a new issue of securities with no established trading market.
Application has been made for listing of the Notes on the Luxembourg Stock
Exchange. BellSouth cannot guarantee that the application to the Luxembourg
Stock Exchange will be approved, and settlement of the Notes is not conditioned
on obtaining this listing. BellSouth has been advised by the Underwriters that
they intend to make a market in the Notes, but the Underwriters are not
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
the Notes.

S-22

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all the Notes if any are purchased.

In connection with the offering, certain Underwriters and their respective
affiliates may engage in transactions that stabilize, maintain or otherwise
affect the market price of the Notes. Such transactions may include
stabilization transactions effected in accordance with Rule 104 of Regulation M,
pursuant to which such persons may bid for or purchase Notes for the purpose of
stabilizing their market price. The Underwriters also may create a short
position for the account of the Underwriters by selling more Notes in connection
with the offering than they are committed to purchase from BellSouth, and in
such case may purchase Notes in the open market following completion of this
offering to cover such short position. Any of the transactions described in this
paragraph may result in the maintenance of the price of the Notes at a level
above that which might otherwise prevail in the open market. None of the
transactions described in this paragraph are required, and, if they are
undertaken, they may be discontinued at any time.

The Notes are offered for sale in those jurisdictions in the United States
and Europe where it is legal to make such offers.

Each Underwriter has represented and agreed that (a) it has not offered or
sold and, before the expiration of the period of six months from the closing
date for the Notes, will not offer or sell any Notes to persons in the United
Kingdom, except to those persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986, with respect to anything done by it in relation to the Notes
in, from or otherwise involving the United Kingdom, and (c) it has only issued
or passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Notes to a person who is of a
kind described in Article 11(3) of the Financial Services Act 1986 (Investments
Advertisements) (Exemptions) Order 1996, as amended, or is a person to whom such
documents may otherwise be issued or passed on.

Each Underwriter has represented and agreed that it has not offered or
sold, and will not offer or sell, directly or indirectly, any of the Notes in or
to residents of Japan or to any persons for reoffering or resale, directly or
indirectly in Japan or to any resident of Japan, except pursuant to an exemption
from the registration requirements of the Securities and Exchange Law available
thereunder and in compliance with the other relevant laws and regulations of
Japan.

Each Underwriter has represented and agreed that it (i) has not offered or
sold, and will not offer or sell, the Notes by means of any document to persons
in Hong Kong other than persons whose ordinary business is to buy or sell shares
or debentures, whether as principal or agent, or in circumstances which do not
constitute an offer to the public within the meaning of the Hong Kong Companies
Ordinance (Chapter 32 of the Laws of Hong Kong) and (ii) has not issued, and
will not issue, any invitation or advertisement relating to the Notes in Hong
Kong (except if permitted to do so under the securities laws of Hong Kong) other
than with respect to Notes which are intended to be disposed of to persons
outside Hong Kong or only to persons whose business involves the acquisition,
disposal or holding of securities whether as principal or agent.

Purchasers of the Notes may be required to pay stamp taxes and other
charges in accordance with the laws and practices of the country of purchase in
addition to the issue price set forth on the cover page hereof.

Certain of the Underwriters or their affiliates have provided banking and
other financial services to BellSouth or its affiliates from time to time for
which they have received customary fees and expenses. Certain of the
Underwriters or their affiliates will in the future continue to provide banking
and other financial services to BellSouth or its affiliates for which they will
receive customary compensation.

S-23

The Underwriting Agreement provides that BellSouth will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the Underwriters may be
required to make in respect of any of these liabilities.

LEGAL MATTERS

Stacey K. Geer, Chief Securities Counsel of BellSouth, is rendering an
opinion regarding the legality of the securities.

On behalf of the Underwriters, Davis Polk & Wardwell is rendering an
opinion regarding certain legal matters in connection with the offering of the
securities.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, independent accountants, has audited the
consolidated financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 2000. That Form 10-K is incorporated by reference in
this prospectus, to the extent and for the periods indicated in
PricewaterhouseCoopers LLP's report relating to such consolidated financial
statements, which is also incorporated by reference. We have incorporated by
reference BellSouth's consolidated financial statements in reliance upon the
report of PricewaterhouseCoopers LLP given on the authority of said firm as
experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

BellSouth is subject to the informational requirements of the Securities
Exchange Act of 1934 and files reports and other information with the SEC. You
may read and copy these reports at the public reference facilities of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on
the operation of the public reference room by calling the SEC at (800) 732-0330.
In addition, the SEC maintains an Internet site that contains reports and other
information regarding BellSouth (http://www.sec.gov).

We have registered these securities with the SEC (No. 333-67084) under the
Securities Act of 1933. This prospectus does not contain all of the information
set forth in the registration statement. You may obtain copies of the
registration statement, including exhibits, as discussed in the first paragraph.

The SEC allows us to "incorporate by reference" into this prospectus
required information on file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
that information. We have filed the following documents with the SEC (File No.
1-8607) and those documents are incorporated by reference into this prospectus:

(1) Annual Report on Form 10-K for the year ended December 31, 2000;

(2) Quarterly Reports on Form 10-Q for the quarters ended March 31 and
June 30, 2001; and

(3) Current Reports on Form 8-K dated January 22, March 22, March 26,
April 19, May 17, June 1, July 10, July 23, and October 18, 2001.

All documents that we file under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus and prior to the termination of
the offering of any series of debt securities will be incorporated by reference
in this prospectus and will be a part of it from the date of filing of such
documents.

YOU MAY OBTAIN COPIES OF THE ABOVE DOCUMENTS UPON REQUEST WITHOUT CHARGE
FROM THE OFFICE OF THE CONTROLLER OF BELLSOUTH, 1155 PEACHTREE STREET, N.E.,
15G03, ATLANTA, GEORGIA 30309-3610 (TELEPHONE NUMBER 404-249-4238).

S-24

This prospectus supplement and accompanying prospectus, together with
copies of the documents incorporated by reference, will be available free of
charge at the office of Banque Internationale a Luxembourg S.A., 69, route
d'Esch, L-2953 Luxembourg.

LISTING AND GENERAL INFORMATION

Application has been made to list the Notes on the Luxembourg Stock
Exchange. In connection with the listing application, the Articles of
Incorporation and the Bylaws of BellSouth and a legal notice relating to the
issuance of the Notes have been deposited before listing with Greffier en Chef
du Tribunal d'Arrondissement de et a Luxembourg, where copies of such documents
may be obtained upon request. So long as any of the Notes are outstanding,
copies of the above documents, together with this prospectus supplement, the
accompanying prospectus, the indenture and BellSouth's current Annual and
Quarterly Reports, as well as all future Annual Reports and Quarterly Reports,
will be made available for inspection at the main office of Banque
Internationale a Luxembourg in Luxembourg. BellSouth's Annual Report on Form
10-K for the year ended December 31, 2000 contains a list of all of its
subsidiaries. BellSouth does not publish any non-consolidated financial
statements. Banque Internationale a Luxembourg will act as intermediary in
Luxembourg between BellSouth and the holders of the Notes so long as the Notes
remain in global form. In addition, copies of these Annual Reports and Quarterly
Reports may be obtained free of charge at such office.

Other than as disclosed or contemplated in this prospectus supplement or
the accompanying prospectus or in the documents incorporated by reference in
these documents, there has been no material adverse change in the financial
position of BellSouth since the date of the last audited financial statements.

Other than as described or contemplated in this prospectus supplement,
neither BellSouth nor any of its subsidiaries is involved in litigation,
arbitration, or administrative proceedings relating to claims or amounts that
are material in the context of the issue of the Notes.

Resolutions relating to the issue and sale of the Notes were adopted by the
Board of Directors of BellSouth on April 23, 2001 and November 27, 2000.

The Notes have been accepted for clearance through the facilities of DTC,
Euroclear and Clearstream, Luxembourg.

The 2006 Notes have been assigned Euroclear and Clearstream Common Code No.
013806551, International Security Identification Number (ISIN) US079860AC66 and
CUSIP No. 079860AC6. The 2011 Notes have been assigned Euroclear and Clearstream
Common Code No. 013803714, International Security Identification Number (ISIN)
US079860AB83 and CUSIP No. 079860AB8. The 2031 Notes have been assigned
Euroclear and Clearstream Common Code No. 013806594, International Security
Identification Number (ISIN) US079860AD40 and CUSIP No. 079860AD4.

S-25

PRINCIPAL OFFICE OF THE ISSUER

BELLSOUTH CORPORATION
1155 Peachtree Street, NE
Atlanta, Georgia 30309

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

TRUSTEE & PRINCIPAL PAYING AGENT

SUNTRUST BANK
25 Park Place
24th Floor
Atlanta, Georgia 30303

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

LUXEMBOURG LISTING AGENT, PAYING AGENT & TRANSFER AGENT

BANQUE INTERNATIONALE A LUXEMBOURG, S.A.
69, route d'Esch
L-2953 Luxembourg

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

LEGAL ADVISORS

To BellSouth as to To the Underwriters as to
matters of United States Law matters of United States Law
STACEY K. GEER DAVIS POLK & WARDWELL
Chief Securities Counsel 450 Lexington Avenue
BellSouth Corporation New York, New York 10017
1155 Peachtree Street, NE
Suite 1800
Atlanta, Georgia 30309-3610

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

AUDITORS

To BellSouth
PRICEWATERHOUSECOOPERS LLP
1155 Peachtree Street, NE
Suite 1100
Atlanta, Georgia 30309

$5,000,000,000

BELLSOUTH CORPORATION

DEBT SECURITIES

BellSouth may periodically offer these securities. The supplements to this
prospectus will describe the specific terms of these securities. You should read
this prospectus and any supplements carefully before you invest.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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

THE DATE OF THIS PROSPECTUS IS AUGUST 23, 2001.

ABOUT THIS PROSPECTUS

YOU MAY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS BUT SHOULD NOT
ASSUME THE INFORMATION IS ACCURATE AFTER THE DATE OF THIS PROSPECTUS, EVEN IF IT
IS DELIVERED SUBSEQUENTLY FOR ANY PURPOSE. NEITHER WE NOR ANY UNDERWRITER HAS
AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL AND IT IS
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.

This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may,
from time to time, sell the securities described in this prospectus in one or
more offerings up to a total dollar amount of $5,000,000,000.

This prospectus provides you with a general description of the debt
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. A prospectus supplement may also add, update or change
information contained in this prospectus.

TABLE OF CONTENTS

Where You Can Find More Information......................... 2
BellSouth Corporation....................................... 3
Ratio of Earnings to Fixed Charges.......................... 3
Use of Proceeds............................................. 3
Description of Securities................................... 4
Plan of Distribution........................................ 7
Legal Opinions.............................................. 7
Independent Accountants..................................... 8

WHERE YOU CAN FIND MORE INFORMATION

(1) Annual Report on Form 10-K for the year ended December 31, 2000;

(2) Quarterly Reports on Form 10-Q for the quarters ended March 31 and
June 30, 2001; and

(3) Current Reports on Form 8-K dated January 22, March 22, March 26,
April 19, May 17, June 1, July 10, and July 23, 2001.

incorporated by reference in this prospectus and will be a part of it from the
date of filing of such documents.

BELLSOUTH CORPORATION

BellSouth is a holding company, whose principal subsidiary, BellSouth
Telecommunications, Inc. ("BST"), is the predominant wireline communications
services provider to substantial portions of the population of Alabama, Florida,
Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and
Tennessee.

RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth the unaudited historical ratios of earnings
to fixed charges of BellSouth and its subsidiaries.

SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
--------------- --------------------------------
2001 2000 2000 1999 1998 1997 1996
---- ------ ---- ---- ---- ---- ----

4.66 5.45 5.09 5.98 7.09 7.17 6.55

For the purpose of calculating the ratio of earnings to fixed charges,
earnings consists of :

- Income from continuing operations before deduction for taxes and
interest;

- Portion of rental expense representative of the interest factor;

- Equity in losses from less-than-50% owned investments; and

- Excess of earnings over distributions of less-than-50% owned
investments.

For the purpose of calculating the ratio of earnings to fixed charges,
fixed charges consists of:

- Interest; and

- Portion of rental expense representative of the interest factor.

USE OF PROCEEDS

Unless otherwise specified in the prospectus supplement, we will use the
proceeds from the sale of debt securities for the following purposes:

- To provide funds to repay our long- and short-term debt, if any;

- To provide the funds we need to diversify our activities;

- To provide funds for our subsidiaries; and

- To provide funds for our general corporate purposes.

We will describe the specific use of proceeds from the sale of debt
securities in the prospectus supplement. We may raise funds through the sale of
debt securities in the United States, European and overseas markets.

DESCRIPTION OF SECURITIES

The following description sets forth certain general terms and provisions
of the securities and the form of indenture. You may obtain a copy of the
indenture as described in "Where You Can Find More Information" on page 2.
Particular sections of the indenture are cited parenthetically.

GENERAL

The securities will be issued under an indenture between BellSouth and the
trustee named therein. We have executed indentures dated as of August 15, 2001
with each of The Bank of New York and SunTrust Bank, as trustee and we expect to
execute substantially identical indentures with additional trustees. The
prospectus supplement for each offering of securities will name the trustee for
that offering and will describe the specific terms of the debt securities
offered through that prospectus supplement. BellSouth and certain of its
affiliates maintain banking relationships in the ordinary course of business
with the trustees and certain of their affiliates.

The indenture does not limit the amount of securities that may be issued,
and securities may be issued as authorized from time to time by our Board of
Directors, by a company order signed by two of our officers or by a supplemental
indenture. All of the securities of a series do not need to be issued at the
same time and, unless the prospectus supplement provides otherwise, a series may
be reopened for additional issuances of securities of such series. The
securities will be unsecured general obligations and will rank equally with our
other outstanding debt.

GLOBAL SECURITIES

Form and Exchange

We will normally issue the securities in book-entry only form, which means
that they will be represented by one or more permanent global certificates
registered in the name of The Depository Trust Company, New York, New York
("DTC"), or its nominee. We will refer to this form here and in the prospectus
supplement as "book-entry only."

Alternatively, we may issue the securities in certificated form registered
in the name of the holder. Under these circumstances, holders may receive
certificates representing the securities. Securities in certificated form will
be issued only in increments of $1,000 and multiples of $1,000 and will be
exchangeable without charge except for reimbursement of taxes or other
governmental charges, if any. We will refer to this form as "certificated."

If we issue original issue discount ("OID") securities, we will describe
the special United States federal income tax and other considerations of a
purchase of such securities in the prospectus supplement.

OID securities are issued at a substantial discount below their principal
amount because they pay no interest or pay interest that is below market rates
at the time of issuance.

Book-Entry Only Procedures

The following discussion pertains to securities that are issued in
book-entry only form.

We would issue one or more global securities to DTC or its nominee. DTC
would keep a computerized record of its participants (for example, your broker)
whose clients have purchased the

securities. The participant would then keep a record of its clients who
purchased the securities. A global security is not transferable, except that
DTC, its nominees and their successors may transfer an entire global security to
one another.

Under book-entry only, we would not issue certificates to individual
holders of the securities. Beneficial interests in global securities will be
shown on, and transfers of global securities will be made only through, records
maintained by DTC and its participants.

DTC has provided us with the following information. DTC is:

- a limited-purpose trust company organized under the New York Banking
Law;

- a "banking organization" within the meaning of the New York Banking
Law;

- a member of the United States Federal Reserve System;

- a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and

- a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934.

DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among participants of securities transactions, such
as transfers and pledges, in deposited securities through computerized records
for participants' accounts. This eliminates the need to exchange certificates.
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations.

DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
participant. The rules that apply to DTC and its participants are on file with
the SEC.

DTC is owned by a number of its participants and by the New York Stock
Exchange, Inc., The American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.

We will wire principal and interest payments to DTC's nominee. We and the
trustee will treat DTC's nominee as the owner of the global securities for all
purposes. Accordingly, neither we nor the trustee will have any responsibility
or liability to pay amounts due on the securities, or to furnish any
information, directly to owners of beneficial interests in the global
securities.

It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit participants' accounts on the payment date according to
their respective holdings of beneficial interests in the global securities as
shown on DTC's records as of the record date for such payment. In addition, it
is DTC's current practice to assign any consenting or voting rights to
participants, whose accounts are credited with securities on a record date, by
using an omnibus proxy. Payments by participants to owners of beneficial
interests in the global securities, and voting by participants, will be governed
by the customary practices between the participants and owners of beneficial
interest, as is the case with securities held for the account of customers
registered in "street name." However, these payments will be the responsibility
of the participants and not of DTC, the trustee or us.

Securities represented by a global security would be exchangeable for
securities represented by certificates with the same terms in authorized
denominations only if:

- DTC notifies us that it is unwilling or unable to continue as depository
or if DTC ceases to be a clearing agency registered under applicable law
and we do not appoint a successor depository within 90 days; or

- we instruct the trustee that the securities will not be represented by a
global security; or

- an event of default has occurred and is continuing.

LIEN ON ASSETS

The indenture does not restrict us from encumbering our assets. However, if
we encumber our assets, we will likewise secure outstanding securities, and any
other of our obligations, which may be entitled to the benefit of a similar
covenant. This covenant does not apply to purchase-money liens, to deposits or
pledges under workers' compensation, unemployment insurance or other laws or to
secure judicial or other statutory obligations. Our affiliates may mortgage,
pledge or subject their property or assets to any lien without restriction.
(Section 4.02)

SUCCESSOR ENTITIES

We may not consolidate with or merge into, or transfer or lease our
property and assets substantially as an entirety to, another entity unless the
successor entity is a United States corporation which assumes all our
obligations under the securities and the indenture. In addition, we cannot enter
into any of these transactions if immediately after the transaction a default or
event of default would occur under the indenture. If these conditions are
satisfied, except in the case of a lease, all of our obligations under the
indenture and the securities will terminate. (Section 5.01)

EVENTS OF DEFAULT

The following would be events of default under the indenture regarding a
series of securities:

- default in the payment of interest on any security of such series for 90
days;

- default in the payment of the principal of any security of such series;

- failure by us to comply with any of our other agreements relating to the
securities of such series for more than 90 days after receiving notice of
such default from the trustee or the holders of 25% in principal amount
of the outstanding securities of that series; and

- certain events of bankruptcy or insolvency relating to us.

A payment default regarding one series would not create a cross-default
with regard to any other series of securities issued under that indenture.
(Section 6.01) If an event of default occurs and is continuing regarding the
securities of any series, the trustee or the holders of at least 25% in
principal amount of all of the outstanding securities of that series may declare
the principal (or, if the securities of that series are OID securities, such
portion of the principal amount as may be specified in the terms of that series)
of, and any accrued interest on, all the securities of that series to be due and
payable. Securities of all other series would be unaffected. Upon declaration,
such principal (or, in the case of OID securities, such specified amount) and
interest would become due and payable immediately. (Section 6.02)

Securityholders may not enforce the indenture or the securities, except as
provided in the indenture. (Section 6.06) The trustee may require indemnity
before it enforces the indenture or the securities (Section 7.01(e)) Subject to
certain limitations, holders of a majority in principal amount of the securities
of each series affected may direct the trustee in its exercise of any trust
power regarding securities of that series. (Section 6.05) The trustee may
withhold from securityholders notice of any continuing default (except a default
in payment of principal or interest) if it determines that withholding notice is
in their interest. (Section 7.05)

AMENDMENT AND WAIVER

Subject to certain exceptions, we may amend or supplement the indenture and
the securities by agreement between us and the trustee with the consent of the
holders of a majority in principal amount of the outstanding securities of each
affected series. Also, we may be excused from complying with an obligation under
the indenture with the consent of the holders of a majority in principal amount
of

outstanding securities of each affected series. However, without the consent of
each securityholder affected, an amendment or waiver may not:

- reduce the amount of securities whose holders must consent to an
amendment or waiver;

- reduce the rate of, or change the time for payment of, interest on any
security;

- reduce the principal of, or change the fixed maturity of, any security;

- waive a default in the payment of principal of or interest on any
security;

- make any security payable in money other than that stated in the
security; or

- impair the right to institute suit for the enforcement of any payment on
or with respect to any securities.

We and the trustee may agree to amend or supplement the indenture without
the consent of any securityholder:

- to cure any ambiguity, defect or inconsistency in the indenture or in the
securities of any series;

- to provide for the issuance of, and establish the form, terms and
conditions of, a series of securities or to establish the form of any
certifications required to be furnished pursuant to the terms of the
indenture or any series of securities;

- to secure the securities under the circumstances described under "Lien on
Assets" on page 5;

- to provide for the assumption of all of our obligations under the
securities and the indenture in connection with a merger, consolidation
or transfer or lease of our property and assets substantially as an
entirety as provided for in the indenture;

- to provide for uncertificated securities in addition to or in place of
certificated securities;

- to add to rights of securityholders or surrender any right or power
conferred on us; or

- to make any change that does not adversely affect the rights of any
securityholder. (Section 9.01)

PLAN OF DISTRIBUTION

We may sell the securities directly to purchasers, through agents, through
dealers, through underwriters or through a combination of those methods.

The securities may be distributed from time to time in one or more
transactions at a fixed price or prices, which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices.

In connection with the sale of securities, underwriters or agents may
receive discounts, concessions or commissions from us or from purchasers for
whom they may act as agents. Underwriters may sell securities to or through
dealers, and such dealers may receive discounts, concessions or commissions from
the underwriters or from purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the distribution of
securities may all have the status of underwriters under the Securities Act of
1933. The prospectus supplement will identify any underwriter or agent and
describe any compensation paid by us.

We may agree to indemnify underwriters and other persons against certain
civil liabilities, including liabilities under the Securities Act of 1933.

LEGAL OPINIONS

Stacey K. Geer, Chief Securities Counsel of BellSouth, is rendering an
opinion regarding the legality of the securities.

On behalf of dealers, underwriters or agents, Davis Polk & Wardwell is
rendering an opinion regarding certain legal matters in connection with the
offering of the securities.

INDEPENDENT ACCOUNTANTS