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<PAGE>
BELLSOUTH
2000 ANNUAL MEETING
April 24, 2000
SPEECH BY DUANE ACKERMAN, CHAIRMAN AND CEO
Good morning, ladies and gentlemen. I'm Duane Ackerman, Chairman of the Board
and Chief Executive Officer of BellSouth.
The video you just saw is a great way to kick off BellSouth's 16th Annual
Shareholders Meeting.
The video introduces you to BellSouth's new branding and advertising campaign,
and I think you'll agree, there's a lot of energy there.
I'll come back to the campaign later in the meeting and tell you more about
what's going on at your company.
Consistent with that energy, we are conducting a live webcast of this meeting.
The webcast will be available on our investor website at
WWW.BellSouth.Com/Investor
You'll find this URL on the pen in your chair .
It gives me great pleasure to welcome all of the attendees to this meeting...
those of you joining us via the Internet and the audience here at Cobb Galleria
Centre in Atlanta, Georgia.
Atlanta is the home base for BellSouth's worldwide operations.
The printed program, which was placed in your chair is also available on the web
site.
It outlines today's agenda and the procedures that we will follow.
I would like to take a minute to review the agenda.
Following the introduction of the BellSouth Board of Directors and some of
BellSouth's senior management team, I will ask Carl Swearingen, BellSouth
Corporate Secretary, to give his Report.
After calling the meeting to order, we will begin the governance portion of the
meeting.
At that time,each of the proposals will be presented.
A brief discussion period will follow the presentation of each proposal, and you
will be given an opportunity to vote.
I will end this business portion of our meeting by closing the polls.
Then I would like to take a few minutes to update you on the progress of your
company since last year's meeting.
We've made several announcements over the past few months that present exciting
opportunities for BellSouth... and I would like to share my thoughts with you on
those opportunities.
Following my presentation,there will be time for you to ask questions you
may have about BellSouth. I will announce the preliminary voting results
when they become available before the end of the meeting.
Now, let me present the members of BellSouth's Board of Directors.
I'll ask them to stand and remain standing. Please hold your applause until
everyone has been introduced.
BellSouth has a classified board with staggered three-year terms.
Directors whose terms expire in the year 2001 are:
James H. Blanchard, Chairman of the Board and Chief Executive Officer, Synovus
Financial Corporation, a bank holding company in Georgia and one of the largest
credit card processors in the nation;
Armando M. Codina, Chairman of the Board and Chief Executive Officer, Codina
Group Incorporated, a real estate development company in Miami;
Leo F. Mullin,
Chairman and Chief Executive Officer,
Delta Air Lines.
Directors with terms that expire in 2002 are:
Reuben V. Anderson, Partner at the law firm of Phelps Dunbar in Jackson,
Mississippi and former Justice of the Supreme Court of Mississippi;
Kathleen F. Feldstein, President, Economics Studies, Incorporated,
a private economics consulting firm in Boston, Massachusetts;
John G. Medlin, Jr., Chairman Emeritus of the Board of Wachovia Corporation, one
of the Southeast's principal banks;
and, myself.
I am now pleased to present the nominees for election at this meeting to a term
expiring in 2003. They are:
J. Hyatt Brown,
Chairman of the Board, President and Chief Executive Officer,
Brown & Brown, Incorporated, an insurance services company in Daytona Beach;
Eugene F. Murphy,
Retired Vice Chairman of the Board and Executive Officer, General Electric
Company, the diversified services, technology and manufacturing company;
Robin B. Smith,
Chairman of the Board and Chief Executive Officer, Publishers Clearing House,
one of the nation's largest magazine subscription companies;
William S. Stavropoulos, President and Chief Executive Officer, The Dow Chemical
Company, one of the largest chemical manufacturing companies in the country.
James P. Kelly,
Chairman of the Board and Chief Executive Officer, United Parcel Service
Incorporated, a global express carrier and package distribution logistics
company. Jim had to be out of the country and regrets that he could not be with
us today.
Also, nominated for election at this meeting to a term expiring in 2001:
Joseph M. Magliochetti, Chairman of the Board and Chief Executive Officer, Dana
Corporation, a supplier of motor vehicles and parts.
At this time, I would like to recognize three of your directors who are retiring
today, Phyllis Burke Davis, Retired Senior Vice President of Avon Products, C.
Dixon Spangler, Chairman of the Board of C.D. Spangler Construction Company, and
J. Tylee Wilson, Retired Chairman of the Board and Chief Executive Officer, RJR
Nabisco.
Each has served as a director of BellSouth for over 12 years and has contributed
significantly to BellSouth's continuing success during that period of time. We
will certainly miss their presence and their guidance.
Phyllis, Dick and Tylee, I would like to thank each of you on behalf of
BellSouth's shareholders for a job well done.
Please join me in a round of applause for all of the directors presented here.
We have a special guest in our audience today, John Clendenin, the retired
Chairman and Chief Executive Officer of BellSouth. John, it's a pleasure to have
you here with us today. Please stand and be recognized.
I would also like to recognize another special guest, Jimmy Smith.
Jimmy is the Vice President of the Communications Workers of America, District
3, which covers the nine southeastern states served by BellSouth.
All of us work together for the benefit of our shareholders, the customers we
serve, and our employees.
Jimmy, would you like to make a few remarks?
Thank you, Jimmy.
Before we begin the business part of today's meeting,
I would also like to introduce some of the senior members of BellSouth's
management team. I'll ask them to stand as I call their names. Please hold your
applause until everyone has been introduced.
The officers are:
Gary Forsee,
Chief Staff Officer
Jere Drummond,
Vice Chairman, External Affairs
Ron Dykes,
Chief Financial Officer
Charles Morgan,
General Counsel
Fran Dramis,
Chief Information and Ecommerce Officer
Carl Swearingen,
Senior Vice President, Corporate Compliance and Corporate Secretary
Nancy Humphries,
Vice President,
Investor Relations
Ike Harris,
Vice President,
Finance
Margaret Greene, Executive Vice President, Regulatory and External Affairs
Dick Sibbernsen,
Vice President,
Human Resources,
and
Buddy Miller,
President,
BellSouth International.
These individuals represent some of the finest leaders in the telecommunications
industry, and I am very proud to work with them. Please join me in a round of
applause.
Ackerman:
Carl Swearingen will now make the Secretary's report.
Swearingen: Thank you, Mr. Ackerman. I present proof by affidavit that the
notice of the meeting has been duly given, and that a proxy statement has been
mailed to every shareholder of record of common shares as of March 6, 2000.
I also report that the inspector of elections -- Frank Obara (Oh-bear-uh) of the
Corporation Trust Company -- has signed the oath of office. He has filed a
certificate with me stating that a quorum of the holders of stock of the company
is present in person, or is represented by proxy at this meeting.
Ackerman: Thank you, Carl. Ladies and Gentlemen... Fellow Shareholders of
BellSouth, I declare the 2000 Annual Meeting of BellSouth Shareholders
officially convened.
I will now begin the business portion of the agenda.
There are some important items of business to be presented this morning. In
addition to the two Directors' proposals, we have one shareholder proposal.
A short discussion period will follow the presentation of each proposal.
If you would like to ask a question about the business matters to be voted upon,
or make comments about the business part of this meeting, please go to one of
the microphones in the aisle.
We have people in place who will assist you.
Please give the attendant your name and city so that they can introduce you.
I ask that you limit your remarks to no more than two minutes so that everyone
who wishes to speak may do so.
Please remember that only shareholders and proxy holders may address the
meeting, and comments at this time should relate to the business matters being
considered.
Hold any general questions regarding BellSouth's plans, strategies or operations
for the general discussion period scheduled for later in the meeting.
If you have questions on personal issues not directly related to the business
matters, please see the staff at the employee or shareholder information tables
immediately after the meeting.
The tables are located outside the doors to your right.
We also have BellSouth products and services representatives in the lobby to
address your questions.
This portion of the meeting is to address only the business matters that we are
voting on.
Now if you have already voted, your shares will be voted according to your
directions and it will not be necessary for you to fill out a ballot at this
meeting.
If you have not voted,
or if you wish to change your earlier vote, you will need to use the ballot
provided at your seat.
Please be sure to fill out the section of the ballot that gives us information
about you, including your shareholder account number or your social security
number.
Ushers will collect your ballots after we complete the business matters section
of this meeting.
The polls are now open.
Our first item of business is the election of Directors.
As I mentioned earlier, we have a classified board and will be voting for six
nominees for election this morning.
You met them a few moments ago. But, as a reminder, they are:
* J. Hyatt Brown
* James P. Kelly
* Joseph M. Magliochetti
* Eugene F. Murphy
* Robin B. Smith
* William S. Stavropoulos
Is there any discussion regarding these nominees?
Hearing none, we will turn to the next item on our agenda.
In our second proposal, the Board of Directors is recommending ratification of
the selection of PricewaterhouseCoopers as the Company's independent auditors
for the coming year.
I would like to introduce T.J. Mangold, engagement partner with
PricewaterhouseCoopers. T.J., would you please stand. T.J. is here to answer any
questions you may want to direct to PricewaterhouseCoopers.
Are there any questions for him at this time?
Thank you, T.J.
The shareholder proposal to be voted on this year was submitted by
Mr. Richard Dee of New York City.
Mr. Dee has told us that he or his representative will present his proposal.
Is Mr. Dee or his representative in the audience?
Ackerman:
Thank you Mr. Dee.
The process for the selection of directors for a company's board is different
from political elections that involve two or more parties with dissimilar local
or national agendas.
The BellSouth Board of Directors views the present nominating process to be the
most practical means of ensuring that individuals with appropriate
qualifications continue to serve on the BellSouth Board.
For these reasons, which are discussed in more detail in the proxy statement,
the board strongly recommends a vote "Against" this proposal.
Is there any discussion?
Let us proceed with the vote on the proposals that have just been presented.
I will now ask the ushers to collect your ballots.
As I mentioned earlier, there is no need to cast a ballot here today unless you
wish to change your vote, or if you are voting today for the first time. Please
hand your ballot to one of the ushers.
If you submit a ballot this morning, your vote will be tallied in the final
count, and the results will be reported on our web site as soon as they are
available. They will also be reported in your August shareholder newsletter.
I'm going to pause here for about three minutes to allow the ushers time to
collect your ballots.
While we are waiting for the ballots to be collected, I'm going to show you some
of the television advertising we're using as part of the comprehensive new
branding campaign that is strengthening BellSouth's position in the electronic
commerce and Internet marketplaces.
I hope you enjoyed these spots from our new advertising campaign and the energy
they exude.
Has everyone turned in his or her ballot?
I now declare the polls closed.
With that, we come to the part of the annual meeting that I look forward to the
most.
That is the opportunity to tell you about BellSouth's business.
Ladies and gentlemen, the communications industry continues to experience
dramatic change in both technology and structure.
BellSouth is also experiencing some bold, dramatic change and, as you may have
observed several of these activities have occured very close together over the
last several months.
* For example...
we are creating a new, powerful joint venture with SBC Communications in the
wireless world.
* We have repositioned our assets in Europe, strengthing our strategic position
there, as well as enabling the market to have a better view of those assets for
purposes of valuation.
* And we have announced our intention to create a tracking stock for our Latin
American businesses.
We need to reflect on some of these changes for a few moments because of the
importance these transactions have to you as an investor.
As a result of these activities- combined with operating performance- I am even
more optimistic about BellSouth's future, and I want to tell you why.
Let's start with our new nationwide wireless company.
Earlier this month, we made a major announcement with SBC.
We're combining our domestic wireless businesses to create the second largest
wireless company in the country.
BellSouth and SBC will share joint and equal control of the new company.
BellSouth's economic stake will be 40 percent.
This new company will be larger than Sprint PCS, and larger than AT&T
Wireless... and, frankly, it will have much higher profit margins.
You know, size is important... and profitability even more so. But... in a
competitive marketplace where people expect anytime/anywhere communications...
coverage is critical.
This map gives you an idea of the impressive scale and scope of this initiative.
It shows that the new company covers 19 of the nation's top 20 markets, and 40
of the top 50 cellular markets.
For wireless data,
the joint venture covers a full 93 percent of the urban business population...
serving 492 cities.
We'll offer customers a variety of services...
wireless Internet access interactive messaging...
attractive national rate plans...
and packages,
including wireline services such as high-speed DSL.
Let me give you a snapshot of what this new company will look like on Day One.
It will cover a total population of 175 million.
It will serve more than 16 million customers.
It will have more than $10 billion in revenues.
It will have double-digit growth in customers and revenues.
It will have industry-leading margins. It will have leadership in market share.
And there's a lot more about this deal that makes BellSouth and SBC a great
wireless competitor.
Our existing cellular footprints fit together nicely - there's not a lot of
overlap.
We'll have unparalleled distribution capabilities, with more than 15,000 points
of customer contact.
We use consistent technologies, so meshing the networks will not be a problem.
We both have management teams that are focused on financial results and customer
service.
BellSouth and SBC have reputations for quality that come from the most important
source... and that's our customers. Both companies are repeated recipients of
the J.D. Power Award for wireless service in several of the markets that we
serve.
On our own, BellSouth has captured its 10th J.D. Power award.
The overriding goal of the BellSouth/SBC combination is to continue...
and to accelerate growth in a fast-expanding industry.
We further believe that wireless communications is at the dawn of a new era in
the United States, driven by the Internet and data services.
Analysts project explosive nationwide growth in wireless data -- from 3 million
customers today, to 36 million in 2003.
Experts say that within a few years, 7 out of 10 of us will be using wireless
phones, interactive pagers, personal digital assistants and numerous other
handheld devices that have yet to hit the market.
The most innovative wireless applications the marketplace has to offer are
already running on the BellSouth Intelligent Wireless Network today.
This totally digital network boasts more than 300,000 customers, including 160
of the Fortune 1000 companies.
For example, in addition to the RIM e-mail pager and the Palm VII, America
Online will soon be delivering the wireless version of its flagship Instant
Messenger product via this network.
We're also partnering with Sun Microsystems to stimulate wireless applications
based on the popular Java programming language.
In a nutshell, our joint venture will lead the wireless data revolution.
We're looking beyond voice... to remote monitoring and transactions - really, to
any wireless application that eliminates barriers between critical information
and mobile customers.
In summary, we are creating the second largest wireless company in the United
States.
We are combining two great wireless companies with excellent track records and
commitments to profitable growth.
And...we have created this powerful new force...in one of the industry's premier
growth areas... without diluting your investment as a BellSouth shareholder.
Now, let me turn your attention from North America to another vital arena in the
global marketplace... and that's Europe.
One of the other big changes at your company since our last annual meeting is
how we strengthened BellSouth's strategic position in Europe.
We accomplished this with the alliance that we formed late last year with KPN
Royal Dutch Telecom.
Together with KPN... BellSouth purchased the German wireless company E-Plus...
in effect, turning our initial investment of about $150 million into a
multi-billion dollar asset.
Germany is a very strong base for potential further opportunities in Europe.
We've been in that country since 1993 when we acquired an interest in E-Plus.
Germany is the largest economy in the European Union.
It has a population of 82 million but... wireless penetration is only 23
percent, compared to 33 percent in the rest of Europe.
E-Plus...with 3.4 million total customers at the end of 1999...grew 90 percent
last year.
The deal that we negotiated with KPN gives us a number of important new options
for the future.
We leveraged our right of first refusal...to purchase the E-Plus shares of our
two partners... and...in the process, we struck a creative arrangement with KPN.
We turned our
22.5 percent minority stake in E-Plus into shared control of this fast-growing
company.
Not only that, we acquired options -- and could acquire additional warrants --
that would convert into a major equity stake in KPN or... in KPN Mobile.
KPN Mobile is a holding company for all of KPN's wireless investments.
It's expected to go public sometime this year.
The SBC and KPN deals are two major reasons that I'm so optimistic about the
future of the company that you own.
But not everything has changed.
We continue to invest billions of dollars every year... to strengthen the
Internet... data... and broadband capabilities of our domestic
telecommunications network.
And these investments continue to pay off.
In 1999, data revenues surged 33 percent to $2.8 billion.
Calling feature revenues increased 17 percent to $1.9 billion. And... We're off
to a very good start this year, as well. You may have seen the first quarter
results we announced last Thursday.
Normalized earnings per share increased 13 percent
Data revenues grew 31 percent... and we added nearly 1.3 million wireless
customers worldwide in just three months.
Another thing that hasn't changed - except perhaps to get even better - is the
dedication and skills of our people.
The contributions of our employees continue to go far beyond the award-winning
service they provide to our customers.
Because BellSouth people care about what they do...
and where they live.
They are always helping other people...
whether it's their customers on the job... or their neighbors on their own time.
Our employees have a true spirit of service.
That spirit makes this company a part of the fabric of the communities we serve.
Communities are marketplaces, too.
I believe our employees' heritage... of giving back to the community... gives
BellSouth a competitive advantage in the marketplace... Few companies can match.
I also want to inform you that on March 29th, BellSouth filed with the
Securities and Exchange Commission, or SEC,... a proxy statement relating to a
special shareholders' meeting.
We will be calling a special meeting for shareholders... to approve our plan to
create a series of common stock to track the performance of our Latin American
businesses.
The proxy statement will be mailed to you later this spring.
It will contain details about the terms of the tracking stock... BellSouth's
Latin American businesses... and the expected benefits of the tracking stock
structure.
I urge you to carefully review the proxy statement because it will contain
important information.
Because of the proposed Initial Public Offering of the Latin American tracking
stock... we are in a "quiet period" until the SEC clears our filings.
You can view our preliminary filing on the BellSouth Web site...
or on the SEC's Web site, WWW.SEC.gov
Before we get to your questions... I want to comment about our stock price.
I was pleased with BellSouth's financial and operating performance in 1999.
Normalized earnings per share grew 22 percent.
This is a significant acceleration compared to 16.3 percent growth in 1998.
In fact, over the last six years... our compound earnings growth has
significantly outstripped both our peer group and the S&P 500. I must tell you,
however... that after our stock price went up 77 percent in 1998... I was
disappointed that our sustained improvement in fundamental performance was not
reflected in our stock price during most of 1999.
Earnings driven valuations may have temporarily taken a back seat at the stock
exchanges... but that's no reason to change the way we manage your company.
Operationally... BellSouth is committed to serving our customers... And
strategically... We are committed to positioning BellSouth to win in today's
communications markets.
We will continue to execute... both in strategy and in operations... as good
stewards of your investment.
Be it Old Economy, or New Economy... or some combination of both... We continue
to believe that sustained earnings growth will drive stock price over time.
The initiatives that I have shared with you today are designed to generate that
earnings growth... and to capture the value that comes from owning a business
that is focused on strategy and execution.
I thank you for your support, and I thank you for your investment in BellSouth.
We're glad you're here today. Now... It's your turn...
At this time I would be happy to take any questions you have about the business
of BellSouth.
I ask that you restrict your comments to the business, or to issues of interest
to the general shareholder body here today.
If you have a question pertaining to a personal issue or company policy, we'll
be happy to talk with you individually after the meeting adjourns.
Please direct those questions to the staff located at the employee and
shareholder relations' tables outside the doors to your right.
Again, in order to assure that everyone who wishes to ask a question has an
opportunity to do so, I ask that you limit your comments to two minutes.
Please go to one of the microphones if you have a question and an attendant will
assist you there.
I see that we now have the preliminary results of the voting.
I am pleased to report that the nominees for election to the board have been
elected by a substantial margin.
PricewaterhouseCoopers has been ratified as our independent auditors for 2000.
With respect to the shareholder proposal, it has been defeated by a significant
margin.
As I mentioned earlier... the final voting results will be reported as soon
as they are available on our investor web site... and in the Second Quarter
Shareholder Newsletter, which you will receive in August.
Are there any further matters for discussion?
Hearing none,
is there a motion that we adjourn this meeting?
Is there a second?
We have a motion and a second.
All those in favor, say aye... all those opposed, say nay...
The ayes have it.
Let me say how much we appreciate your active interest in BellSouth and thank
you for coming to your annual meeting today.
The 2000 Annual Meeting of Shareholders of BellSouth Corporation now stands
adjourned.
