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- Highest-ever net income of $847 million, a year-over-year increase of over 280 percent ATLANTA, Oct. 19 /PRNewswire/ -- Cingular Wireless LLC, which is a joint venture of AT&T Inc. (NYSE:T) and BellSouth Corporation (NYSE:BLS), today reported record-setting net income of $847 million for the third quarter, which is a year-over-year increase of over 280 percent. The company also achieved a year-over-year increase in ARPU, normalized OIBDA margins that were the best since 2001, and the completion of its GSM network integration. "Cingular turned in a great third quarter on a variety of fronts. Solid execution drove a significant increase in net income, growth in ARPU, and strong margin performance," said Stan Sigman, Cingular's president and chief executive officer. "Cingular's strong financial and operational performance positions us well as wireless capabilities and our customers' demand for new wireless voice, data, and video services continue to increase," Sigman said. "Our work is not yet done in bringing even better results, services, and capabilities to our customers." Cingular's normalized OIBDA margin* was 35.6 percent in the third quarter, which is an improvement of 400 basis points compared to normalized year-ago results and a sequential improvement of 300 basis points. For the quarter, the nation's largest wireless provider reported postpaid churn of 1.5 percent, equal to the company's best-ever results. This is a year-over-year improvement of 50 basis points and flat compared to the second quarter of 2006. Overall monthly subscriber churn was 1.8 percent, which represents a year- over-year improvement of 50 basis points and a sequential increase of 10 basis points. The sequential increase resulted from normal seasonality patterns, the sunsetting of AT&T Wireless' prepaid plans, and from certain actions the company took to recover increased costs associated with serving the rapidly diminishing base of its TDMA customers. Cingular's net additions were driven by lower churn and strong gross customer additions. The company reported 1.4 million net adds. Cingular's performance in net adds compares to 867,000 in the year-ago quarter and to 1.5 million in the second quarter of 2006. Some 928,000 of the 1.4 million net adds were postpaid customers, marking the company's third consecutive quarter of postpaid net adds nearly at or above the 900,000 level. In addition, retail customers represented 87 percent of net adds in the third quarter, which compares to 74 percent in the year-ago quarter and to 75 percent in the second quarter of 2006. Reseller customer net additions were 174,000, which is down from 228,000 in the year-ago quarter and from 380,000 in the second quarter of 2006. Gross additions were 4.6 million, which compares to 4.4 million in the year-ago third quarter and to 4.4 million in the second quarter of 2006. Cingular ended the third quarter of 2006 with 58.7 million cellular/PCS subscribers, tops among U.S. carriers and a year-over-year increase of 6.4 million. Data ARPU was $6.32, up 46 percent over the year-ago third quarter and up 10 percent sequentially. In addition, the company's Business Markets Group signed more than 1,000 new and renewed high-end service contracts in the quarter. During the third quarter of 2006, 99 percent of minutes were carried on Cingular's GSM/UMTS/HSDPA network and 94 percent of the company's subscriber base was GSM/UMTS/HSDPA-equipped. Cingular operates the nation's largest digital voice and data network. GSM is the world's most widely used wireless technology. Through roaming alliances with other GSM-based providers around the world, Cingular provides the largest global presence of any U.S. wireless carrier, with voice coverage in nearly 190 countries and data roaming in 115. Financial Results - In the third quarter of 2006, Cingular's total revenues were $9.6 billion, up 9.2 percent over revenues for the year-ago quarter and 3.6 percent compared to the second quarter of 2006. Service revenues, which exclude revenues from sales of handsets and accessories, were $8.7 billion, which is a year-over-year increase of 12.2 percent and a sequential improvement of 4.4 percent. - ARPU increased to $49.76. This compares to $49.65 in the year-ago quarter and to $48.84 in the second quarter of 2006. Continued growth in data ARPU contributed to this increase in overall ARPU. - ARPU from data services continued to grow robustly, increasing by 46 percent to $6.32 year-over-year and 10 percent sequentially. This growth was spurred by the increasing popularity of downloadable games, ringtones, mobile instant messaging, mobile email, photo messaging, and media bundles. In addition, text messaging continued to grow. In the third quarter of 2006, Cingular had 28 million active data customers, and delivered 138 million multi-media messages and 10 billion text messages. - Reported operating expenses were $8.1 billion, which included $87 million in OIBDA-affecting merger integration costs and $52 million non-cash merger integration costs, for a total of $139 million. Operating expenses also included $314 million in non-cash amortization of intangibles as part of the merger with AT&T Wireless. - Reported OIBDA margin was 34.5 percent. Normalized OIBDA margin of 35.6 percent was the highest margin the company has posted since 2001. This is an improvement of 400 basis points compared to the year-ago quarter and 300 basis points compared to the second quarter of 2006. - Reported operating income was $1.4 billion, which compares to $657 million in the year-ago quarter and to $1.0 billion in the second quarter of 2006. Normalized operating income was $1.9 billion, which compares to $1.4 billion in the year-ago quarter and to $1.5 billion in the second quarter of 2006. - Reported net income was $847 million, which compares to $222 million in the year-ago quarter and to $540 million in the second quarter of 2006. Normalized net income was $1.2 billion, which compares to $835 million in the year-ago quarter and to $956 million in the second quarter of 2006. - Capital expenditures were $1.8 billion. These were driven by, among other developments: continued progress in merger integration; ongoing, rapidly accelerating improvements in network coverage and quality; and the continued introduction of Cingular's powerful UMTS/HSDPA 3G technology in markets around the country. Third-quarter highlights and initiatives - Cingular completed its GSM network integration, which began shortly after the company's merger with AT&T Wireless in October of 2004. With access to 45,000 cell sites around the country, customers are experiencing dramatically improved coverage and call quality, including the fewest dropped calls. - The company continues its aggressive deployment of 3G UMTS/HSDPA network throughout the country. The 3G service, which offers mobile wireless broadband connections averaging 400-700 kilobits per second, is available in 115 cities (with populations of 100 thousand or more) in and around 52 major markets in 28 states and the District of Columbia. Customers can use the 3G connections to access e-mail and information services or watch streaming video clips using Cingular Video. - Cingular launched the LG CU500, a feature-packed device based on HSDPA technology, allowing customers to realize the full potential and benefits of Cingular's high-speed 3G network. The CU500 easily addresses customers' voice, data, messaging and music needs. - In its continuing effort to raise the bar in mobile music, Cingular introduced its third phone with iTunes -- the MOTORAZR v3i. The MOTORAZR v3i is the latest addition to the award-winning RAZR family of products, offering Cingular customers the ultimate in design and entertainment. To date, Cingular remains the first and only U.S. carrier to offer phones with iTunes. - Cingular continued to introduce innovative new products and services for business customers. Three new 3G-capable business devices were launched during the quarter: the Lenovo ThinkPad T60 and Panasonic(R) Toughbook(R) CF-29 notebooks, both of which have Cingular's UMTS/HSDPA- based BroadbandConnect service built-in; and the Sierra Wireless AirCard(R) 875 LaptopConnect Card, the first commercially available HSDPA 3.6 Mbps network card in the Americas. - The company also introduced the two powerful new handheld devices priced at under $150: the Nokia E62, designed specifically for e-mail, and the Cingular 3125 Smartphone, which blends powerful business and entertainment capabilities in a flip-phone design. Cingular also strengthened its leadership position in wireless e-mail with the introduction of BlackBerry(R) Connect(TM) on the Palm(R) Treo(TM) 650 and Good(TM) Mobile Messaging for IBM Lotus(R) Notes(R). - Cingular also signed more than 1,000 new and renewed high-end service contracts during the third quarter of 2006. These included business and government accounts such as Assurant, Banta Corporation, Brooke Corporation, BusRadio, Commonwealth of Kentucky, J.R. Simplot Company, Nokia, St. Paul Travelers, Southwest Airlines, Southwest Freight Lines, STERIS Corporation, Unilever, the U.S. Army/U.S. Air Force, U.S. Marine Corps Recruiting Command, VHA Inc., Valspar Corporation, Weyerhaeuser, and XOJET. Conference Call with Investment Community Cingular will hold a conference call with the investment community beginning at 10 a.m. ET today. During the call, we will discuss our operational and financial results and prospects. The conference call will be Webcast and archived on Cingular's Website at http://www.cingular.com/investor for 30 days, as well as on the websites of AT&T Inc. and BellSouth Corporation. Cingular's third quarter 2006 news release and downloadable financial statements will be available on the http://www.cingular.com/ website beginning at 8:00 a.m. (Eastern) on October 19. Dial-in information for the conference call is as follows: Domestic: 866-406-3487 International: 630-691-2771 Passcode: 15787059# Replay: 877-213-9653 (Domestic) Replay: 630-652-3041 (International) Passcode: 15787059# Replays will be available for five days. *OIBDA margin is operating income (loss) before depreciation and amortization, divided by total service revenues. OIBDA margins and comparative calculations mentioned in the news release reflect normalization for merger- related integration costs. About Cingular Wireless Cingular Wireless is the largest wireless carrier in the United States, serving 58.7 million customers. Cingular, a joint venture of AT&T Inc. (NYSE:T) and BellSouth Corporation (NYSE:BLS), has the largest digital voice and data network in the nation -- the ALLOVER(TM) network -- and the largest mobile-to-mobile community of any national wireless carrier. Cingular is a leader in third generation wireless technology. Its 3G network is the first widely available service in the world to use HSDPA (High Speed Downlink Packet Access) technology. Cingular is the only U.S. wireless carrier to offer Rollover(r), the wireless plan that lets customers keep their unused monthly minutes. Details of the company are available at http://www.cingular.com/. Get Cingular Wireless press releases emailed to you automatically. Sign up at http://cingular.mediaroom.com/. FORWARD-LOOKING INFORMATION In addition to historical information, this document and the conference call referred to above may contain forward-looking statements regarding events and financial trends. Factors that could affect future results and could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: -- the pervasive and intensifying competition in all markets where Cingular operates; -- failure to quickly realize capital and expense synergies from the acquisition of AT&T Wireless as a result of technical, logistical, regulatory and other factors; -- delays or inability of vendors to deliver hardware, software, handsets or network equipment, including failure to deliver such equipment free of claims, including patent claims, of other parties; -- problems associated with the transition of Cingular's network to higher-speed technologies; -- slow growth of Cingular's data services due to lack of popular applications, terminal equipment, advanced technology and other factors; -- sluggish economic and employment conditions in the markets Cingular serves; -- the final outcome of FCC proceedings, including rulemakings, and judicial review, if any, of such proceedings; -- enactment of additional state and federal laws, regulations and requirements pertaining to Cingular's operations; and -- the outcome of pending or threatened complaints and litigation. Such forward-looking information is given as of this date only, and Cingular assumes no duty to update this information. Cingular Wireless LLC Income Statement - amounts in millions (unaudited) Quarter Ended Year to Date 09/30/ 09/30/ % Change 09/30/ 09/30/ % Change 2006 2005 2006 2005 Operating revenues: Service revenues $8,661 $7,721 12.2% $24,961 $22,859 9.2% Equipment sales 892 1,025 (13.0%) 2,790 2,725 2.4% Total operating revenues 9,553 8,746 9.2% 27,751 25,584 8.5% Operating expenses: Cost of services 2,527 2,464 2.6% 7,344 6,901 6.4% Cost of equipment sales 1,198 1,203 (0.4%) 3,874 3,728 3.9% Selling, general and administrative 2,836 2,881 (1.6%) 8,439 8,835 (4.5%) Depreciation and amortization 1,576 1,541 2.3% 4,854 4,845 0.2% Total operating expenses 8,137 8,089 0.6% 24,511 24,309 0.8% Operating income (loss) 1,416 657 115.5% 3,240 1,275 154.1% Interest expense 306 304 0.7% 901 968 (6.9%) Minority interest expense 43 38 13.2% 127 95 33.7% Equity in net income (loss) of affiliates - 1 (100.0%) - 4 (100.0%) Other income (expense), net 5 10 (50.0%) 20 63 (68.3%) Income (loss) before income tax provision 1,072 326 228.8% 2,232 279 700.0% Provision (benefit) for income taxes 225 104 116.3% 491 150 227.3% Net income (loss) $847 $222 281.5% $1,741 $129 NM Selected Financial and Operating Data for Cingular Wireless - amounts in millions, except customer data in 000s Quarter Ended Year to Date 09/30/ 09/30/ % Change 09/30/ 09/30/ % Change 2006 2005 2006 2005 (Amounts in millions, except customer data in 000s) OIBDA (1) $2,992 $2,198 36.1% $8,094 $6,120 32.3% OIBDA margin (2) 34.5% 28.5% 600 BP 32.4% 26.8% 560 BP Total Cellular/PCS Customers (3) 58,666 52,292 12.2% 58,666 52,292 12.2% Net Customer Additions - Cellular/PCS 1,358 867 56.6% 4,535 3,186 42.3% M&A Activity, Partitioned Customers and/or Other Adjs. - (17) (100.0%) (13) (26) (50.0%) Churn - Cellular/PCS (4) 1.8% 2.3% -50 BP 1.8% 2.2% -40 BP ARPU - Cellular/PCS (5) $49.76 $49.65 0.2% $49.04 $49.92 (1.8%) Minutes Of Use Per Cellular/PCS Subscriber (6) 755 698 8.2% 732 673 8.8% Licensed POPs - Cellular/PCS (7) 296 294 0.7% 296 294 0.7% Penetration - Cellular/PCS (8) 20.8% 18.3% 250 BP 20.8% 18.3% 250 BP Capital Expenditures $1,828 $1,346 35.8% $4,851 $4,505 7.7% Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures - amounts in millions (unaudited) Quarter Ended Year to Date 09/30/ 09/30/ % Change 09/30/ 09/30/ % Change 2006 2005 2006 2005 Net income (loss) $847 $222 281.5% $1,741 $129 NM Plus: Interest expense 306 304 0.7% 901 968 (6.9%) Plus: Minority interest expense 43 38 13.2% 127 95 33.7% Plus: Equity in net loss of affiliates - (1) (100.0%) - (4) (100.0%) Plus: Other, net (5) (10) (50.0%) (20) (63) (68.3%) Plus: Provision (benefit) for income taxes 225 104 116.3% 491 150 227.3% Operating income (loss) 1,416 657 115.5% 3,240 1,275 154.1% Plus: Depreciation and amortization 1,576 1,541 2.3% 4,854 4,845 0.2% OIBDA (1) $2,992 $2,198 36.1% $8,094 $6,120 32.3% NM - Not Meaningful Notes: (1) OIBDA is defined as operating income (loss) before depreciation and amortization. OIBDA differs from operating income (loss), as calculated in accordance with GAAP, in that it excludes depreciation and amortization. It differs from net income (loss), as calculated in accordance with GAAP, in that it excludes, as presented on our Consolidated Statement of Income: (1) depreciation and amortization, (2) interest expense, (3) minority interest expense, (4) equity in net income (loss) of affiliates, (5) other, net, and (6) provision (benefit) for income taxes. OIBDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. OIBDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with generally accepted accounting principles. Our calculation of OIBDA, as presented, may differ from similarly titled measures reported by other companies. (2) OIBDA margin is defined as OIBDA divided by service revenues. (3) Cellular/PCS customers include customers served through reseller agreements. (4) Cellular/PCS churn is calculated by dividing the aggregate number of cellular/PCS customers who cancel service during each month in a period by the total number of cellular/PCS customers at the beginning of each month in that period. (5) ARPU is defined as cellular/PCS service revenues during the period divided by average cellular/PCS customers during the period. (6) Total Minutes of Use Per Cellular/PCS Subscriber (MOUs) excludes SMS activity but includes Local Minutes of Use and Outcollect Minutes of Use in the numerator. (7) Licensed POPs refers to the number of people residing in areas where we and our partners have licenses to provide cellular or PCS service, including areas where we have not yet commenced service. (8) Penetration calculation for 3Q06 is based on licensed "operational" POP's of 282 million. Cingular Wireless LLC Reconciliation of Reported Results to Normalized Results (amounts in millions) Quarter Ended September 30, 2006 Normalized Items Integration AWE Amortization GAAP Costs (1) Expense (2) Normalized Operating revenues: Service revenues $8,661 $- $- $8,661 Equipment sales 892 - - 892 Total operating revenues 9,553 - - 9,553 Operating expenses: Cost of services 2,527 (65) - 2,462 Cost of equipment sales 1,198 - - 1,198 Selling, general and administrative 2,836 (22) - 2,814 Depreciation and amortization 1,576 (52) (314) 1,210 Total operating expenses 8,137 (139) (314) 7,684 Operating income (loss) 1,416 139 314 1,869 Interest expense 306 - - 306 Minority interest expense 43 - - 43 Equity in net income (loss) of affiliates - - - - Other income (expense), net 5 - - 5 Income (loss) before income tax provision 1,072 139 314 1,525 Provision (benefit) for income taxes 225 23 52 300 Net income (loss) $847 $116 $262 $1,225 Year to Date - September 30, 2006 Normalized Items Integration AWE Amortization GAAP Costs (1) Expense (2) Normalized Operating revenues: Service revenues $24,961 $- $- $24,961 Equipment sales 2,790 - - 2,790 Total operating revenues 27,751 - - 27,751 Operating expenses: Cost of services 7,344 (150) - 7,194 Cost of equipment sales 3,874 - - 3,874 Selling, general and administrative 8,439 (87) - 8,352 Depreciation and amortization 4,854 (299) (1,009) 3,546 Total operating expenses 24,511 (536) (1,009) 22,966 Operating income (loss) 3,240 536 1,009 4,785 Interest expense 901 - - 901 Minority interest expense 127 - - 127 Equity in net income (loss) of affiliates - - - - Other income (expense), net 20 - - 20 Income (loss) before income tax provision 2,232 536 1,009 3,777 Provision (benefit) for income taxes 491 89 167 747 Net income (loss) $1,741 $447 $842 $3,030 Notes to Normalized Financial Data Our normalized earnings have been adjusted for the following: (1) Integration costs resulting from the Cingular acquisition of AT&T Wireless and the related tax effect. (2) Amortization expense associated with intangible assets recorded for the AT&T Wireless acquisition and the related tax effect. Cingular Wireless LLC Income Statement, NORMALIZED - amounts in millions (unaudited) Quarter Ended Year to Date 09/30/ 09/30/ % Change 09/30/ 09/30/ % Change 2006 2005 2006 2005 Operating revenues: Service revenues $8,661 $7,721 12.2% $24,961 $22,859 9.2% Equipment sales 892 1,025 (13.0%) 2,790 2,725 2.4% Total operating revenues 9,553 8,746 9.2% 27,751 25,584 8.5% Operating expenses: Cost of services 2,462 2,285 7.7% 7,194 6,700 7.4% Cost of equipment sales 1,198 1,203 (0.4%) 3,874 3,728 3.9% Selling, general and administrative 2,814 2,815 0.0% 8,352 8,591 (2.8%) Depreciation and amortization 1,210 1,053 14.9% 3,546 3,312 7.1% Total operating expenses 7,684 7,356 4.5% 22,966 22,331 2.8% Operating income (loss) 1,869 1,390 34.5% 4,785 3,253 47.1% Interest expense 306 304 0.7% 901 968 (6.9%) Minority interest expense 43 38 13.2% 127 95 33.7% Equity in net income (loss) of affiliates - 1 (100.0%) - 4 (100.0%) Other income (expense), net 5 10 (50.0%) 20 63 (68.3%) Income (loss) before income tax provision 1,525 1,059 44.0% 3,777 2,257 67.3% Provision (benefit) for income taxes 300 224 33.9% 747 475 57.3% Net income (loss) $1,225 $835 46.7% $3,030 $1,782 70.0% Selected Financial and Operating Data for Cingular Wireless - amounts in millions, except customer data in 000s Quarter Ended Year to Date 09/30/ 09/30/ % Change 09/30/ 09/30/ % Change 2006 2005 2006 2005 (Amounts in millions, except customer data in 000s) OIBDA - normalized (1) $3,079 $2,443 26.0% $8,331 $6,565 26.9% OIBDA margin - normalized (2) 35.6% 31.6% 400 BP 33.4% 28.7% 470 BP Total Cellular/PCS Customers (3) ** 58,666 52,292 12.2% 58,666 52,292 12.2% Net Customer Additions - Cellular/PCS ** 1,358 867 56.6% 4,535 3,186 42.3% M&A Activity, Partitioned Customers and/or Other Adjs. ** - (17) (100.0%) (13) (26) (50.0%) Churn - Cellular/PCS (4) ** 1.8% 2.3% -50 BP 1.8% 2.2% -40 BP ARPU - Cellular/PCS (5) ** $49.76 $49.65 0.2% $49.04 $49.92 (1.8%) Minutes Of Use Per Cellular/PCS Subscriber (6) ** 755 698 8.2% 732 673 8.8% Licensed POPs - Cellular/PCS (7) ** 296 294 0.7% 296 294 0.7% Penetration - Cellular/PCS (8) ** 20.8% 18.3% 250 BP 20.8% 18.3% 250 BP Capital Expenditures ** $1,828 $1,346 35.8% $4,851 $4,505 7.7% Reconciliations of Normalized Financial Measures to Normalized OIBDA and OIBDA Margin - amounts in millions (unaudited) Quarter Ended Year To Date 09/30/ 09/30/ % Change 09/30/ 09/30/ % Change 2006 2005 2006 2005 Net income (loss) $1,225 $835 46.7% $3,030 $1,782 70.0% Plus: Interest expense 306 304 0.7% 901 968 (6.9%) Plus: Minority interest expense 43 38 13.2% 127 95 33.7% Plus: Equity in net loss of affiliates - (1) 100.0% - (4) 100.0% Plus: Other, net (5) (10) 50.0% (20) (63) 68.3% Plus: Provision (benefit) for income taxes - normalized 300 224 33.9% 747 475 57.3% Operating income (loss) - normalized 1,869 1,390 34.5% 4,785 3,253 47.1% Plus: Depreciation and amortization - normalized 1,210 1,053 14.9% 3,546 3,312 7.1% OIBDA - normalized (1) $3,079 $2,443 26.0% $8,331 $6,565 26.9% OIBDA margin (2) 34.5% 28.5% 600 BP 32.4% 26.8% 560 BP Plus: OIBDA margin, integration 1.1% 3.1% -200 BP 1.0% 1.9% -90 BP OIBDA margin - normalized 35.6% 31.6% 400 BP 33.4% 28.7% 470 BP NM - Not Meaningful ** Denotes metrics and calculations in this chart that are not impacted by the 1Q06 and YTD 2006 normalization of merger integration costs and AT&T Wireless intangibles amortization expenses. Notes: (1) OIBDA is defined as operating income (loss) before depreciation and amortization. OIBDA differs from operating income (loss), as calculated in accordance with GAAP, in that it excludes depreciation and amortization. It differs from net income (loss), as calculated in accordance with GAAP, in that it excludes, as presented on our Consolidated Statement of Income: (1) depreciation and amortization, (2) interest expense, (3) minority interest expense, (4) equity in net income (loss) of affiliates, (5) other, net, and (6) provision (benefit) for income taxes. OIBDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. OIBDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with generally accepted accounting principles. Our calculation of OIBDA, as presented, may differ from similarly titled measures reported by other companies. (2) OIBDA margin is defined as OIBDA divided by service revenues. (3) Cellular/PCS customers include customers served through reseller agreements. (4) Cellular/PCS churn is calculated by dividing the aggregate number of cellular/PCS customers who cancel service during each month in a period by the total number of cellular/PCS customers at the beginning of each month in that period. (5) ARPU is defined as cellular/PCS service revenues during the period divided by average cellular/PCS customers during the period. (6) Total Minutes of Use Per Cellular/PCS Subscriber (MOUs) excludes SMS activity but includes Local Minutes of Use and Outcollect Minutes of Use in the numerator. (7) Licensed POPs refers to the number of people residing in areas where we and our partners have licenses to provide cellular or PCS service, including areas where we have not yet commenced service. (8) Penetration calculation for 3Q06 is based on licensed "operational" POP's of 282 million. Cingular Wireless LLC Income Statement - amounts in millions (unaudited) Full Year 03/31/ 06/30/ 09/30/ 12/31/ 2003 2004 2004 2004 2004 Operating revenues: Service revenues $14,317 $3,583 $3,833 $3,873 $6,313 Equipment sales 1,260 384 354 419 806 Total operating revenues 15,577 3,967 4,187 4,292 7,119 Operating expenses: Cost of services 3,775 955 983 1,107 1,692 Cost of equipment sales 2,031 537 505 585 1,247 Selling, general and administrative 5,428 1,372 1,463 1,567 2,947 Depreciation and amortization 2,089 553 565 573 1,386 Total operating expenses 13,323 3,417 3,516 3,832 7,272 Operating income (loss) 2,254 550 671 460 (153) Interest expense 856 198 199 200 303 Minority interest expense 101 27 41 20 (2) Equity in net income (loss) of affiliates (333) (108) (95) (98) (114) Other income (expense), net 41 4 1 - 11 Income (loss) before income tax provision 1,005 221 337 142 (557) Provision (benefit) for income taxes 28 6 (2) - (62) Net income (loss) $977 $215 $339 $142 $(495) 03/31/ 06/30/ 09/30/ 12/31/ 2005 2005 2005 2005 Operating revenues: Service revenues $7,419 $7,719 $7,721 $7,779 Equipment sales 810 890 1,025 1,070 Total operating revenues 8,229 8,609 8,746 8,849 Operating expenses: Cost of services 2,144 2,293 2,464 2,417 Cost of equipment sales 1,295 1,230 1,203 1,341 Selling, general and administrative 3,001 2,953 2,881 2,812 Depreciation and amortization 1,675 1,629 1,541 1,730 Total operating expenses 8,115 8,105 8,089 8,300 Operating income (loss) 114 504 657 549 Interest expense 338 326 304 292 Minority interest expense 16 41 38 7 Equity in net income (loss) of affiliates 2 1 1 1 Other income (expense), net 20 33 10 1 Income (loss) before income tax provision (218) 171 326 252 Provision (benefit) for income taxes 22 24 104 48 Net income (loss) $(240) $147 $222 $204 03/31/2006 06/30/2006 09/30/2006 Operating revenues: Service revenues $8,005 $8,295 $8,661 Equipment sales 975 923 892 Total operating revenues 8,980 9,218 9,553 Operating expenses: Cost of services 2,320 2,497 2,527 Cost of equipment sales 1,327 1,349 1,198 Selling, general and administrative 2,846 2,757 2,836 Depreciation and amortization 1,680 1,598 1,576 Total operating expenses 8,173 8,201 8,137 Operating income (loss) 807 1,017 1,416 Interest expense 297 298 306 Minority interest expense 41 43 43 Equity in net income (loss) of affiliates - - - Other income (expense), net 9 6 5 Income (loss) before income tax provision 478 682 1,072 Provision (benefit) for income taxes 124 142 225 Net income (loss) $354 $540 $847 Selected Financial and Operating Data for Cingular Wireless - amounts in millions, except customer data in 000s 03/31/ 06/30/ 09/30/ 12/31/ 2003 2004 2004 2004 2004 OIBDA (1) $4,343 $1,103 $1,236 $1,033 $1,233 OIBDA margin (2) 30.5% 30.8% 32.2% 26.7% 19.5% Integration, AT&T Wireless Intangibles Amortization and Hurricane Costs $- $- $- $43 $643 OIBDA - normalized $4,343 $1,103 $1,236 $1,076 $1,478 OIBDA margin - normalized 30.5% 30.8% 32.2% 27.8% 23.4% Total Cellular/PCS Customers (3) 24,027 24,618 25,044 25,672 49,132 Net Customer Additions - Cellular/PCS 2,116 554 428 657 1,699 M&A Activity, Partitioned Customers and/or Other Adjs. (14) 37 (2) (29) 21,761 Churn - Cellular/PCS (4) 2.7% 2.7% 2.7% 2.8% 2.6% ARPU - Cellular/PCS (5) $51.67 $48.30 $50.75 $50.25 $49.51 Minutes Of Use Per Cellular/PCS Subscriber (6) 446 527 568 598 617 Licensed POPs - Cellular/PCS (7) 236 240 243 243 291 Penetration - Cellular/PCS (8) 10.8% 10.9% 11.1% 11.4% 17.2% Total Cingular Interactive Customers 789 768 735 653 NA Net Customer Additions - Cingular Interactive (28) (21) (33) (82) NA Capital Expenditures $2,734 $334 $783 $634 $1,698 03/31/ 06/30/ 09/30/ 12/31/ 2005 2005 2005 2005 OIBDA (1) $1,789 $2,133 $2,198 $2,279 OIBDA margin (2) 24.1% 27.6% 28.5% 29.3% Integration, AT&T Wireless Intangibles Amortization and Hurricane Costs $596 $649 $733 $727 OIBDA - normalized $1,894 $2,228 $2,443 $2,409 OIBDA margin - normalized 25.5% 28.9% 31.6% 31.0% Total Cellular/PCS Customers (3) 50,350 51,442 52,292 54,144 Net Customer Additions - Cellular/PCS 1,367 952 867 1,820 M&A Activity, Partitioned Customers and/or Other Adjs. (149) 140 (17) 32 Churn - Cellular/PCS (4) 2.2% 2.2% 2.3% 2.1% ARPU - Cellular/PCS (5) $49.60 $50.51 $49.65 $48.86 Minutes Of Use Per Cellular/PCS Subscriber (6) 628 692 698 700 Licensed POPs - Cellular/PCS (7) 293 294 294 294 Penetration - Cellular/PCS (8) 17.7% 18.0% 18.3% 18.9% Total Cingular Interactive Customers NA NA NA NA Net Customer Additions - Cingular Interactive NA NA NA NA Capital Expenditures $971 $2,188 $1,346 $2,970 03/31/2006 06/30/2006 09/30/2006 OIBDA (1) $2,487 $2,615 $2,992 OIBDA margin (2) 31.1% 31.5% 34.5% Integration, AT&T Wireless Intangibles Amortization and Hurricane Costs $593 $499 $453 OIBDA - normalized $2,551 $2,701 $3,079 OIBDA margin - normalized 31.9% 32.6% 35.6% Total Cellular/PCS Customers (3) 55,810 57,308 58,666 Net Customer Additions - Cellular/PCS 1,679 1,498 1,358 M&A Activity, Partitioned Customers and/or Other Adjs. (13) - - Churn - Cellular/PCS (4) 1.9% 1.7% 1.8% ARPU - Cellular/PCS (5) $48.48 $48.84 $49.76 Minutes Of Use Per Cellular/PCS Subscriber (6) 698 741 755 Licensed POPs - Cellular/PCS (7) 296 296 296 Penetration - Cellular/PCS (8) 19.8% 20.0% 20.8% Total Cingular Interactive Customers NA NA NA Net Customer Additions - Cingular Interactive NA NA NA Capital Expenditures $1,441 $1,582 $1,828 Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures - amounts in millions (unaudited) 03/31/ 06/30/ 09/30/ 12/31/ 2003 2004 2004 2004 2004 Net income (loss) $977 $215 $339 $142 $(495) Plus: Interest expense 856 198 199 200 303 Plus: Minority interest expense 101 27 41 20 (2) Plus: Equity in net loss of affiliates 333 108 95 98 114 Plus: Other, net (41) (4) (1) - (11) Plus: Provision (benefit) for income taxes 28 6 (2) - (62) Operating income (loss) 2,254 550 671 460 (153) Plus: Depreciation and amortization 2,089 553 565 573 1,386 OIBDA (1) $4,343 $1,103 $1,236 $1,033 $1,233 Plus: Integration costs (excluding depreciation and amortization) - - - 43 245 Plus: Hurricane costs (excluding depreciation and amortization) - - - - - OIBDA - normalized (1) $4,343 $1,103 $1,236 $1,076 $1,478 Service revenues 14,317 3,583 3,833 3,873 6,313 Less: Mobitex data revenues 220 58 59 54 36 Service revenues used to calculate ARPU $14,097 $3,525 $3,774 $3,819 $6,277 03/31/ 06/30/ 09/30/ 12/31/ 2005 2005 2005 2005 Net income (loss) $(240) $147 $222 $204 Plus: Interest expense 338 326 304 292 Plus: Minority interest expense 16 41 38 7 Plus: Equity in net loss of affiliates (2) (1) (1) (1) Plus: Other, net (20) (33) (10) (1) Plus: Provision (benefit) for income taxes 22 24 104 48 Operating income (loss) 114 504 657 549 Plus: Depreciation and amortization 1,675 1,629 1,541 1,730 OIBDA (1) $1,789 $2,133 $2,198 $2,279 Plus: Integration costs (excluding depreciation and amortization) 105 95 149 110 Plus: Hurricane costs (excluding depreciation and amortization) - - 96 20 OIBDA - normalized (1) $1,894 $2,228 $2,443 $2,409 Service revenues 7,419 7,719 7,721 7,779 Less: Mobitex data revenues 18 20 18 17 Service revenues used to calculate ARPU $7,401 $7,699 $7,703 $7,762 03/31/2006 06/30/2006 09/30/2006 Net income (loss) $354 $540 $847 Plus: Interest expense 297 298 306 Plus: Minority interest expense 41 43 43 Plus: Equity in net loss of affiliates - - - Plus: Other, net (9) (6) (5) Plus: Provision (benefit) for income taxes 124 142 225 Operating income (loss) 807 1,017 1,416 Plus: Depreciation and amortization 1,680 1,598 1,576 OIBDA (1) $2,487 $2,615 $2,992 Plus: Integration costs (excluding depreciation and amortization) 64 86 87 Plus: Hurricane costs (excluding depreciation and amortization) - - - OIBDA - normalized (1) $2,551 $2,701 $3,079 Service revenues 8,005 8,295 8,661 Less: Mobitex data revenues 14 11 7 Service revenues used to calculate ARPU $7,991 $8,284 $8,654 In 2003, to be consistent with industry practices, historical consolidated statements of income for all periods presented were reclassified to reflect billings to our customers for the Universal Service Fund (USF) and other regulatory fees as operating revenues and the costs related to payments into the associated regulatory funds as operating expenses. Similar reclassifications have also been made to 2003 and 2004 historical results for certain gross receipts taxes and other fees which are billed to our customers. Operating income and net income for all periods were unaffected. Notes: (1) OIBDA is defined as operating income (loss) before depreciation and amortization. OIBDA differs from operating income (loss), as calculated in accordance with GAAP, in that it excludes depreciation and amortization. It differs from net income (loss), as calculated in accordance with GAAP, in that it excludes, as presented on our Consolidated Statement of Income: (1) depreciation and amortization, (2) interest expense, (3) minority interest expense, (4) equity in net income (loss) of affiliates, (5) other, net, and (6) provision (benefit) for income taxes. OIBDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. OIBDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with generally accepted accounting principles. Our calculation of OIBDA, as presented, may differ from similarly titled measures reported by other companies. (2) OIBDA margin is defined as OIBDA divided by service revenues. (3) Cellular/PCS customers include customers served through reseller agreements. (4) Cellular/PCS churn is calculated by dividing the aggregate number of cellular/PCS customers who cancel service during each month in a period by the total number of cellular/PCS customers at the beginning of each month in that period. (5) ARPU is defined as cellular/PCS service revenues during the period divided by average cellular/PCS customers during the period. (6) Prior to 1Q05, the numerator includes Local Minutes of Use but excludes Outcollect Minutes of Use. (7) Licensed POPs refers to the number of people residing in areas where we and our partners have licenses to provide cellular or PCS service, including areas where we have not yet commenced service. Licensed POPs have been restated in periods 4Q04 through 2Q05 due to a reconciliation of respective licenses. (8) Penetration calculation for 3Q06 is based on licensed "operational" POP's of 282 million. Cingular Wireless LLC Income Statement, Normalized - amounts in millions (unaudited) The normalized financial data presented below exclude the impact of: 1) integration costs that are cash outlays, or specified non-cash charges, directly related to the acquisition of AT&T Wireless; 2) amortization of intangibles associated with the AT&T Wireless acquisition; and 3) costs related to impact of Hurricanes Katrina and Rita in the third and fourth quarters of 2005. Integration costs would not have been incurred if not for the acquisition, as they support the utilization and/or disposal of the acquired assets. Integration costs are separately identifiable from business as usual outlays. Costs recognized in connection with certain rationalization plans approved by management have also been included beginning in the second quarter of 2005. Examples of merger integration costs impacting expenses include (but are not limited to) the following: * Network rationalization (write-offs and accelerated depreciation related to certain "overlap" network assets) * Sales distribution optimization (lease terminations, leasehold improvement write-offs/accelerated depreciation) * Workforce rationalization (severance, relocation, retention) * IT System/Application rationalization (system/platform consolidation, contract termination fees, third party support) * Real Estate space rationalization (lease terminations, leasehold improvements write-offs and accelerated depreciation, contract termination fees) Normalized 12/31/ 03/31/ 06/30/ 09/30/ 2004 2005 2005 2005 Operating revenues: Service revenues $6,313 $7,419 $7,719 $7,721 Equipment sales 806 810 890 1,025 Total operating revenues 7,119 8,229 8,609 8,746 Operating expenses: Cost of services 1,685 2,141 2,274 2,285 Cost of equipment sales 1,244 1,295 1,230 1,203 Selling, general and administrative 2,712 2,899 2,877 2,815 Depreciation and amortization 988 1,184 1,075 1,053 Total operating expenses 6,629 7,519 7,456 7,356 Operating income 490 710 1,153 1,390 Interest expense 303 338 326 304 Minority interest expense (2) 16 41 38 Equity in net income (loss) of affiliates (114) 2 1 1 Other income (expense), net 11 20 33 10 Income before income tax provision 86 378 820 1,059 Provision for income taxes 39 120 131 224 Net income $47 $258 $689 $835 Normalized 12/31/ 03/31/ 06/30/ 09/30/ 2005 2006 2006 2006 Operating revenues: Service revenues $7,779 $8,005 $8,295 $8,661 Equipment sales 1,070 975 923 892 Total operating revenues 8,849 8,980 9,218 9,553 Operating expenses: Cost of services 2,326 2,302 2,430 2,462 Cost of equipment sales 1,341 1,327 1,349 1,198 Selling, general and administrative 2,773 2,800 2,738 2,814 Depreciation and amortization 1,133 1,151 1,185 1,210 Total operating expenses 7,573 7,580 7,702 7,684 Operating income 1,276 1,400 1,516 1,869 Interest expense 292 297 298 306 Minority interest expense 7 41 43 43 Equity in net income (loss) of affiliates 1 - - - Other income (expense), net 1 9 6 5 Income before income tax provision 979 1,071 1,181 1,525 Provision for income taxes 168 222 225 300 Net income $811 $849 $956 $1,225 Selected Financial and Operating Data for Cingular Wireless - amounts in millions, except customer data in 000s Normalized 12/31/ 03/31/ 06/30/ 09/30/ 2004 2005 2005 2005 OIBDA (1) (in millions) $1,478 $1,894 $2,228 $2,443 OIBDA margin (2) 23.4% 25.5% 28.9% 31.6% Total Cellular/PCS Customers (3) (000's) 49,132 50,350 51,442 52,292 Net Customer Additions - Cellular/PCS (000's) 1,699 1,367 952 867 M&A Activity, Partitioned Customers and/or Other Adjs. (000's) 21,761 (149) 140 (17) Churn - Cellular/PCS (4) 2.6% 2.2% 2.2% 2.3% ARPU - Cellular/PCS (5) $49.51 $49.60 $50.51 $49.65 Normalized 12/31/ 03/31/ 06/30/ 09/30/ 2005 2006 2006 2006 OIBDA (1) (in millions) $2,409 $2,551 $2,701 $3,079 OIBDA margin (2) 31.0% 31.9% 32.6% 35.6% Total Cellular/PCS Customers (3) (000's) 54,144 55,810 57,308 58,666 Net Customer Additions - Cellular/PCS (000's) 1,820 1,679 1,498 1,358 M&A Activity, Partitioned Customers and/or Other Adjs. (000's) 32 (13) - - Churn - Cellular/PCS (4) 2.1% 1.9% 1.7% 1.8% ARPU - Cellular/PCS (5) $48.86 $48.48 $48.84 $49.76 Reconciliations of Normalized Financial Measures to Normalized OIBDA and Service Revenues - amounts in millions (unaudited) Normalized 12/31/ 03/31/ 06/30/ 09/30/ 2004 2005 2005 2005 Net income $47 $258 $689 $835 Plus: Interest expense 303 338 326 304 Plus: Minority interest expense (2) 16 41 38 Plus: Equity in net (income) loss of affiliates 114 (2) (1) (1) Plus: Other, net (11) (20) (33) (10) Plus: Provision for income taxes 39 120 131 224 Operating income 490 710 1,153 1,390 Plus: Depreciation and amortization 988 1,184 1,075 1,053 OIBDA (1) $1,478 $1,894 $2,228 $2,443 Service revenues 6,313 7,419 7,719 7,721 Less: Mobitex data revenues 36 18 20 18 Service revenues used to calculate ARPU $6,277 $7,401 $7,699 $7,703 Normalized 12/31/ 03/31/ 06/30/ 09/30/ 2005 2006 2006 2006 Net income $811 $849 $956 $1,225 Plus: Interest expense 292 297 298 306 Plus: Minority interest expense 7 41 43 43 Plus: Equity in net (income) loss of affiliates (1) - - - Plus: Other, net (1) (9) (6) (5) Plus: Provision for income taxes 168 222 225 300 Operating income 1,276 1,400 1,516 1,869 Plus: Depreciation and amortization 1,133 1,151 1,185 1,210 OIBDA (1) $2,409 $2,551 $2,701 $3,079 Service revenues 7,779 8,005 8,295 8,661 Less: Mobitex data revenues 17 14 11 7 Service revenues used to calculate ARPU $7,762 $7,991 $8,284 $8,654 Notes: (1) OIBDA is defined as operating income (loss) before depreciation and amortization. OIBDA differs from operating income (loss), as calculated in accordance with GAAP, in it excludes depreciation and amortization. It differs from net income (loss), as calculated in accordance with GAAP, in that it excludes, as presented on our Consolidated Statement of Income: (1) depreciation and amortization, (2) interest expense, (3) minority interest expense, (4) equity in net income (loss) of affiliates, (5) other, net, and (6) provision (benefit) for income taxes. OIBDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. OIBDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with generally accepted accounting principles. Our calculation of OIBDA, as presented, may differ from similarly titled measures reported by other companies. (2) OIBDA margin is defined as OIBDA divided by service revenues. (3) Cellular/PCS customers include customers served through reseller agreements. (4) Cellular/PCS customer churn is calculated by dividing the aggregate number of cellular/PCS customers who cancel service during each month in a period by the total number of cellular/PCS customers at the beginning of each month in that period. (5) ARPU is defined as cellular/PCS service revenues during the period divided by average cellular/PCS customers during the period. Cingular Wireless LLC Income Statement, Prior Quarter Normalized Reconciliations - amounts in millions (unaudited) Three months ended Three months ended 09/30/04 12/31/04 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $3,873 $- $3,873 $6,313 $- $6,313 Equipment sales 419 - 419 806 - 806 Total operating revenues 4,292 - 4,292 7,119 - 7,119 Operating expenses: Cost of services 1,107 (1) 1,106 1,692 (7) 1,685 Cost of equipment sales 585 - 585 1,247 (3) 1,244 Selling, general and administrative 1,567 (42) 1,525 2,947 (235) 2,712 Depreciation and amortization 573 - 573 1,386 (398) 988 Total operating expenses 3,832 (43) 3,789 7,272 (643) 6,629 Operating income 460 43 503 (153) 643 490 Interest expense 200 - 200 303 - 303 Minority interest expense 20 - 20 (2) - (2) Equity in net income (loss) of affiliates (98) - (98) (114) - (114) Other income (expense), net - - - 11 - 11 Income (loss) before income tax provision 142 43 185 (557) 643 86 Provision (benefit) for income taxes - - - (62) 101 39 Net income (loss) $142 $43 $185 $(495) $542 $47 Nine months ended Twelve months ended 09/30/04 12/31/04 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $11,289 $- $11,289 $17,602 $- $17,602 Equipment sales 1,157 - 1,157 1,963 - 1,963 Total operating revenues 12,446 - 12,446 19,565 - 19,565 Operating expenses: Cost of services 3,045 (1) 3,044 4,737 (8) 4,729 Cost of equipment sales 1,627 - 1,627 2,874 (3) 2,871 Selling, general and administrative 4,402 (42) 4,360 7,349 (277) 7,072 Depreciation and amortization 1,691 - 1,691 3,077 (398) 2,679 Total operating expenses 10,765 (43) 10,722 18,037 (686) 17,351 Operating income 1,681 43 1,724 1,528 686 2,214 Interest expense 597 - 597 900 - 900 Minority interest expense 88 - 88 86 - 86 Equity in net income (loss) of affiliates (301) - (301) (415) - (415) Other income (expense), net 5 - 5 16 - 16 Income (loss) before income tax provision 700 43 743 143 686 829 Provision (benefit) for income taxes 4 - 4 (58) 101 43 Net income (loss) $696 $43 $739 $201 $585 $786 Three months ended Three months ended 3/31/05 6/30/05 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $7,419 $- $7,419 $7,719 $- $7,719 Equipment sales 810 - 810 890 - 890 Total operating revenues 8,229 - 8,229 8,609 - 8,609 Operating expenses: Cost of services 2,144 (3) 2,141 2,293 (19) 2,274 Cost of equipment sales 1,295 - 1,295 1,230 - 1,230 Selling, general and administrative 3,001 (102) 2,899 2,953 (76) 2,877 Depreciation and amortization 1,675 (491) 1,184 1,629 (554) 1,075 Total operating expenses 8,115 (596) 7,519 8,105 (649) 7,456 Operating income 114 596 710 504 649 1,153 Interest expense 338 - 338 326 - 326 Minority interest expense 16 - 16 41 - 41 Equity in net income (loss) of affiliates 2 - 2 1 - 1 Other income (expense), net 20 - 20 33 - 33 Income (loss) before income tax provision (218) 596 378 171 649 820 Provision (benefit) for income taxes 22 98 120 24 107 131 Net income (loss) $(240) $498 $258 $147 $542 $689 Three months ended Six months ended 3/31/05 6/30/05 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $7,419 $- $7,419 $15,138 $- $15,138 Equipment sales 810 - 810 1,700 - 1,700 Total operating revenues 8,229 - 8,229 16,838 - 16,838 Operating expenses: Cost of services 2,144 (3) 2,141 4,437 (22) 4,415 Cost of equipment sales 1,295 - 1,295 2,525 - 2,525 Selling, general and administrative 3,001 (102) 2,899 5,954 (178) 5,776 Depreciation and amortization 1,675 (491) 1,184 3,304 (1,045) 2,259 Total operating expenses 8,115 (596) 7,519 16,220 (1,245) 14,975 Operating income 114 596 710 618 1,245 1,863 Interest expense 338 - 338 664 - 664 Minority interest expense 16 - 16 57 - 57 Equity in net income (loss) of affiliates 2 - 2 3 - 3 Other income (expense), net 20 - 20 53 - 53 Income (loss) before income tax provision (218) 596 378 (47) 1,245 1,198 Provision (benefit) for income taxes 22 98 120 46 205 251 Net income (loss) $(240) $498 $258 $(93) $1,040 $947 Three months ended Three months ended 9/30/05 12/31/05 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $7,721 $- $7,721 $7,779 $- $7,779 Equipment sales 1,025 - 1,025 1,070 - 1,070 Total operating revenues 8,746 - 8,746 8,849 - 8,849 Operating expenses: Cost of services 2,464 (179) 2,285 2,417 (91) 2,326 Cost of equipment sales 1,203 - 1,203 1,341 - 1,341 Selling, general and administrative 2,881 (66) 2,815 2,812 (39) 2,773 Depreciation and amortization 1,541 (488) 1,053 1,730 (597) 1,133 Total operating expenses 8,089 (733) 7,356 8,300 (727) 7,573 Operating income 657 733 1,390 549 727 1,276 Interest expense 304 - 304 292 - 292 Minority interest expense 38 - 38 7 - 7 Equity in net income (loss) of affiliates 1 - 1 1 - 1 Other income (expense), net 10 - 10 1 - 1 Income (loss) before income tax provision 326 733 1,059 252 727 979 Provision (benefit) for income taxes 104 120 224 48 120 168 Net income (loss) $222 $613 $835 $204 $607 $811 Nine months ended Twelve months ended 9/30/05 12/31/05 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $22,859 $- $22,859 $30,638 $- $30,638 Equipment sales 2,725 - 2,725 3,795 - 3,795 Total operating revenues 25,584 - 25,584 34,433 - 34,433 Operating expenses: Cost of services 6,901 (201) 6,700 9,318 (292) 9,026 Cost of equipment sales 3,728 - 3,728 5,069 - 5,069 Selling, general and administrative 8,835 (244) 8,591 11,647 (283) 11,364 Depreciation and amortization 4,845 (1,533) 3,312 6,575 (2,130) 4,445 Total operating expenses 24,309 (1,978) 22,331 32,609 (2,705) 29,904 Operating income 1,275 1,978 3,253 1,824 2,705 4,529 Interest expense 968 - 968 1,260 - 1,260 Minority interest expense 95 - 95 102 - 102 Equity in net income (loss) of affiliates 4 - 4 5 - 5 Other income (expense), net 63 - 63 64 - 64 Income (loss) before income tax provision 279 1,978 2,257 531 2,705 3,236 Provision (benefit) for income taxes 150 325 475 198 445 643 Net income (loss) $129 $1,653 $1,782 $333 $2,260 $2,593 Three months ended Three months ended 3/31/06 6/30/06 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $8,005 $- $8,005 $8,295 $- $8,295 Equipment sales 975 - 975 923 - 923 Total operating revenues 8,980 - 8,980 9,218 - 9,218 Operating expenses: Cost of services 2,320 (18) 2,302 2,497 (67) 2,430 Cost of equipment sales 1,327 - 1,327 1,349 - 1,349 Selling, general and administrative 2,846 (46) 2,800 2,757 (19) 2,738 Depreciation and amortization 1,680 (529) 1,151 1,598 (413) 1,185 Total operating expenses 8,173 (593) 7,580 8,201 (499) 7,702 Operating income 807 593 1,400 1,017 499 1,516 Interest expense 297 - 297 298 - 298 Minority interest expense 41 - 41 43 - 43 Equity in net income (loss) of affiliates - - - - - - Other income (expense), net 9 - 9 6 - 6 Income (loss) before income tax provision 478 593 1,071 682 499 1,181 Provision (benefit) for income taxes 124 98 222 142 83 225 Net income (loss) $354 $495 $849 $540 $416 $956 Three months ended Six months ended 3/31/06 6/30/06 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $8,005 $- $8,005 $16,300 $- $16,300 Equipment sales 975 - 975 1,898 - 1,898 Total operating revenues 8,980 - 8,980 18,198 - 18,198 Operating expenses: Cost of services 2,320 (18) 2,302 4,817 (85) 4,732 Cost of equipment sales 1,327 - 1,327 2,676 - 2,676 Selling, general and administrative 2,846 (46) 2,800 5,603 (65) 5,538 Depreciation and amortization 1,680 (529) 1,151 3,278 (942) 2,336 Total operating expenses 8,173 (593) 7,580 16,374 (1,092) 15,282 Operating income 807 593 1,400 1,824 1,092 2,916 Interest expense 297 - 297 595 - 595 Minority interest expense 41 - 41 84 - 84 Equity in net income (loss) of affiliates - - - - - - Other income (expense), net 9 - 9 15 - 15 Income (loss) before income tax provision 478 593 1,071 1,160 1,092 2,252 Provision (benefit) for income taxes 124 98 222 266 181 447 Net income (loss) $354 $495 $849 $894 $911 $1,805 No integration costs were incurred prior to the third quarter of 2004. Quarterly amortization expense (in millions) associated with intangible assets recorded for the AT&T Wireless acquisition is as follows: $398 in 4Q04, $491 in 1Q05, $445 in 2Q05, $396 in 3Q05, $381 in 4Q05, $359 in 1Q06, $336 in 2Q06. Cingular Wireless LLC Balance Sheet - amounts in millions (unaudited) 09/30/ 12/31/ Incr % + / - 2006 2005 (Decr) (audited) Assets Current assets: Cash and cash equivalents $491 $472 $19 4.0% Accounts receivable - net of allowance for doubtful accounts 3,751 3,622 129 3.6% Inventories 583 536 47 8.8% Prepaid expenses and other current assets 1,968 1,419 549 38.7% Total current assets 6,793 6,049 744 12.3% Property, plant and equipment - net 22,696 21,745 951 4.4% Intangible assets - net 49,401 50,773 (1,372) (2.7%) Other assets 1,330 752 578 76.9% Total assets $80,220 $79,319 $901 1.1% Liabilities and members' capital Current liabilities: Debt maturing within one year $2,829 $2,036 $793 38.9% Accounts payable and accrued liabilities 6,642 7,972 (1,330) (16.7%) Total current liabilities 9,471 10,008 (537) (5.4%) Long-term debt to affiliates 6,717 6,717 - 0.0% Long-term debt to external parties 11,876 12,623 (747) (5.9%) Total long-term debt 18,593 19,340 (747) (3.9%) Other noncurrent liabilities 4,893 4,450 443 10.0% Minority interests in consolidated entities 618 543 75 13.8% Members' capital 46,645 44,978 1,667 3.7% Total liabilities and members' capital $80,220 $79,319 $901 1.1% DATASOURCE: Cingular Wireless CONTACT: Media, Mark Siegel, +1-404-236-6312, or , or Clay Owen, +1-404-236-6153, or , or Investor Relations, Kent Evans, +1-404-236-6203, or , all of Cingular Wireless Web site: http://www.cingular.com/ http://www.cingular.com/investor http://cingular.mediaroom.com/

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