732713--2/28/2006--BELLSOUTH

related topics

{capital, credit, financial}

{product, market, service}

{property, intellectual, protect}

{operation, natural, condition}

{cost, operation, labor}

{cost, contract, operation}

{acquisition, growth, future}

{financial, litigation, operation}

{personnel, key, retain}

{regulation, change, law}

Our ability to maintain leading technological capabilities is uncertain. Maintaining our networks requires significant capital expenditures and our inability or failure to maintain our networks would have a material impact on our market share and ability to generate revenue. We provide services to our customers over access lines, and if we lose access lines, our business and results of operations may be adversely affected. The regulatory regime under which we operate could change to our detriment. We may not be successful in our efforts to maintain a reduced cost structure, and the actions that we take in order to reduce our costs could have long-term adverse effects on our business. Third parties may claim that we are infringing their intellectual property, and we could suffer significant litigation or licensing expenses or be prevented from selling products. Third parties may infringe our intellectual property, and we may expend significant resources enforcing our rights or suffer competitive injury. We could incur significant costs as a result of a number of pending putative class action lawsuits, and additional significant litigation may be filed against us in the future. Our business will suffer if we are not able to retain and hire key personnel. Our wireline business operates primarily in the Southeast, which is likely to continue to experience severe hurricanes and tropical storms. Uncertainty in the US securities markets and adverse medical cost trends could cause our pension and postretirement costs to increase. A downgrade of our debt rating could increase our borrowing costs. If we fail to extend or renegotiate our collective bargaining agreements with our labor unions when they expire, or if our unionized employees were to engage in a strike or other work stoppage, our business and operating results could be materially harmed. Terrorist attacks and other acts of violence or war may affect the financial markets and our business, financial condition, results of operations and cash flows. Cingular Wireless could fail to achieve, in the amounts and within the timeframe expected, the capital and expense synergies and other benefits expected from its acquisition of AT T Wireless. Cingular Wireless faces substantial competition in all aspects of its business as competition continues to increase in the wireless communications industry.

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732713--2/28/2006--BELLSOUTH_CORP