Cingular Wireless Reports Fourth-Quarter 2006 Results

ATLANTA, Jan. 24 /PRNewswire/ -- Cingular Wireless, which is now solely owned by AT&T Inc. , today reported net income of $782 million for the fourth quarter of 2006, which is a year-over-year increase of over 283 percent.

AT&T's wireless unit also turned in its best quarter ever in net subscriber additions; attained, for the second quarter in a row, year-over- year ARPU growth, including another robust increase in data ARPU; and achieved double-digit growth in service and total revenues.

"Our last quarter as a joint venture operating under the Cingular name was our best ever on a variety of fronts," said Stan Sigman, the company's president and CEO. "We achieved strong results by delivering on four strategic initiatives - build the best network, offer great products and services, create unmatched distribution, and improve customer service. Backed by the scale, scope, and capabilities of AT&T, we will continue to focus on these initiatives and offer our customers the flexibility and freedom of wireless services."

In the fourth quarter, the wireless unit reported 2.4 million net customer additions, its highest ever, driven by continued low churn and strong gross customer additions. This compares to 1.8 million in the year-ago quarter and to 1.4 million in the third quarter of 2006. In the fourth quarter, retail customers accounted for more than 1.6 million of total net adds, a company record.

ARPU increased by nearly one percent in the fourth quarter, which was the second quarter in a row of year-over-year overall ARPU increase. This was driven by continued strong growth in data ARPU, which increased by 53 percent in the fourth quarter.

The unit's normalized OIBDA margin* was 34.4 percent, which was an improvement of 340 basis points compared to normalized year-ago results and a sequential decline of 120 points. The sequential decline resulted from seasonally lower roaming revenues and higher marketing and advertising costs, as well as from increased customer acquisition costs associated with the record gross customer additions during the company's busiest selling period.

Postpaid churn was 1.5 percent, which compares to 1.9 percent in the year- ago quarter and is flat compared to the third quarter of 2006.

Overall monthly subscriber churn was 1.8 percent, which compares to 2.1 percent in the year-ago quarter and was flat compared to the third quarter of 2006.

Gross additions for the fourth quarter were a record-tying 5.5 million, which compares to 5.1 million in the year-ago quarter and to 4.6 million in the third quarter of 2006.

The wireless unit ended the fourth quarter of 2006 with 61.0 million cellular/PCS subscribers, tops among U.S. carriers, and a year-over-year increase of 6.8 million customers. In addition, Cingular's Business Markets Group signed more than 1,000 new and renewed high-end service contracts in the quarter.

During the fourth quarter of 2006, 99 percent of minutes were carried on Cingular's GSM/UMTS/HSDPA network and 96 percent of the company's subscriber base was GSM/UMTS/HSDPA-equipped.

AT&T's wireless unit 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 190 countries and data roaming in 120.

Fourth-quarter financial results

-- In the fourth quarter of 2006, Cingular's total revenues were $9.8 billion, up 10.2 percent over revenues for the year-ago quarter and up 2.1 percent compared to the third quarter of 2006. Service revenues, which exclude revenues from sales of handsets and accessories, were $8.8 billion, which is a year-over-year increase of 13.1 percent and a sequential improvement of 1.5 percent.

-- ARPU increased to $49.29. This compares to $48.86 in the year ago quarter and to $49.76 in the third quarter of 2006. Continued growth in data ARPU contributed to the year-over-year increase in overall ARPU.

-- Data ARPU increased to $7.19. This represents a year-over-year improvement of 53 percent and a sequential jump of 14 percent. Data ARPU 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 fourth quarter of 2006, the company had more than 32 million active data customers, and delivered nearly 180 million multi-media messages and more than 12 billion text messages.

-- Reported operating expenses were $8.4 billion, which included $115 million in OIBDA-affecting merger integration costs and $109 million non-cash merger integration costs, for a total of $224 million. Operating expenses also included $292 million in non-cash amortization of intangibles as part of the 2004 merger with AT&T Wireless.

-- Reported fourth-quarter operating income margin was 13.6 percent, up from 6.2 percent in the year-ago quarter. Normalized for merger-related costs, operating income margin was 18.9 percent, up from 14.4 percent in the fourth quarter of 2005.

-- Reported OIBDA margin was 33.1 percent. Normalized OIBDA margin* was 34.4 percent, which is an improvement of 340 basis points compared to normalized year-ago results and a sequential decline of 120 points.

-- Reported operating income was $1.3 billion, which compares to $549 million in the year-ago quarter and to $1.4 billion in the third quarter of 2006. Normalized operating income was $1.8 billion, which compares to $1.3 billion in the year-ago quarter and to $1.9 billion in the third quarter of 2006.

-- Reported net income was $782 million, which compares to $204 million in the year-ago quarter and to $847 million in the third quarter of 2006. Normalized net income was $1.2 billion, which compares to $811 million in the year-ago quarter and to $1.2 billion in the third quarter of 2006.

-- Capital expenditures in the fourth quarter were $2.2 billion. These were driven by, among other developments: the continued introduction of Cingular's powerful UMTS/HSDPA 3G technology, now in 165 cities, including 73 of the top 100 markets; ongoing, rapidly accelerating improvements in network coverage and quality; and merger integration activities.

Fourth-quarter highlights and initiatives

-- AT&T's wireless unit continued its aggressive deployment of its 3G UMTS/HSDPA network throughout the country, which offers mobile wireless broadband connections averaging 400-700 kilobits per second. Customers can use the 3G connections in 165 cities, including 73 of the top 100 markets, to access e-mail and information services or watch streaming video clips using Cingular Video.

-- Cingular introduced the BlackJack (TM), a robust, slim smart device that has the power and features that appeal to business customers and consumers alike. With the BlackJack, customers get rich entertainment features, powerful business applications, Windows Mobile (R) 5.0, and Cingular's 3G-enabled BroadbandConnect service. The product has already received rave reviews and wide acceptance by customers.

-- Continuing its leadership in wireless entertainment, Cingular introduced Cingular Music(TM), which is the most comprehensive music subscription service of its kind ever offered by a U.S. wireless carrier. It gives customers access to the largest collection of music content available on a wireless handset from such online retailers as Napster, Yahoo!, and XM Satellite Radio. Customers can enjoy their music on handsets such as the Cingular SYNC (TM) by Samsung, a sleek new 3G multimedia clamshell.

-- AT&T's wireless unit also announced an exclusive arrangement with MySpace.com, the world's leading lifestyle portal, which gives Cingular customers the ability to edit MySpace profiles, view and add friends, post photos and blogs, send and receive MySpace messages, and much more - all from their wireless phone.

-- Cingular continued to introduce innovative new products and services for business customers, including, an array of smartphones and PDAs. In just over a one-month period leading into the holiday shopping season, the wireless unit introduced, among other products, the Cingular 8525 Pocket PC, the first business-oriented handheld device in the U.S. to have international 3G capabilities; the BlackBerry(R) Pearl(TM), with Push-to-Talk talk capabilities; the HP iPAQ hw6920 series Mobile Messenger; the Palm(R) Treo(TM) 680; and the HP Compaq nc6400 Notebook PC, the first notebook in the U.S. to feature built-in global 3G capabilities.

-- The wireless unit also signed more than 1,000 new and renewed high-end service contracts during the fourth quarter of 2006. These included business and government accounts such as Chicago Public Schools, FujiFilm USA, Lawrence Livermore National Laboratory, Manpower, U.S. Department of Justice Criminal Justice Division, and the U.S. Food and Drug Administration.

-- As the fourth quarter was ending and the new year just beginning, Apple(R) and Cingular announced that Cingular will be Apple's exclusive U.S. carrier for Apple's revolutionary iPhone. As part of this multi-year relationship, Apple and Cingular are working together to provide innovative new features to mobile phone users, such as iPhone's pioneering and unique Visual Voicemail, a first on any mobile phone in the world.

Conference Call with Investment Community

Cingular will hold a conference call with the investment community beginning at 10:00 a.m. (Eastern) on January 24. Operational and financial results for the quarter will be discussed during the call.

The conference call will be webcast and archived on AT&T's website at http://www.att.com/investor.relations.

Cingular's fourth 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 January 24.

Dial-in information for the conference call is as follows: Domestic: 866-406-3487 International: 630-691-2771 Passcode: 16564767# Replay: 877-213-9653 (Domestic) Replay: 630-652-3041 (International) Passcode: 16564767# 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 AT&T

AT&T Inc. is a premier communications holding company in the United States and around the world, with operating subsidiaries providing services under the AT&T brand. AT&T is the recognized world leader in providing IP-based communications services to business and the U.S. leader in providing wireless, high speed Internet access, local and long distance voice, and directory publishing and advertising services. As part of its "three screen" integration strategy, AT&T is expanding video entertainment offerings to include such next-generation television services as AT&T U-verse(SM) TV. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.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; -- 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; -- impediments to continued 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 neither Cingular nor AT&T assumes any duty to update this information.

AT&T Mobility LLC (formerly Cingular Wireless LLC) Income Statement Amounts in millions (unaudited) Quarter Ended Year to Date 12/31/2006 12/31/2005 %Change 12/31/2006 12/31/2005 %Change Operating revenues: Service revenues $8,795 $7,779 13.1% $33,756 $30,638 10.2% Equipment sales 960 1,070 (10.3%) 3,750 3,795 (1.2%) Total operating revenues 9,755 8,849 10.2% 37,506 34,433 8.9% Operating expenses: Cost of services 2,465 2,417 2.0% 9,809 9,318 5.3% Cost of equipment sales 1,373 1,341 2.4% 5,247 5,069 3.5% Selling, general and administrative 3,008 2,812 7.0% 11,447 11,647 (1.7%) Depreciation and amortization 1,582 1,730 (8.6%) 6,436 6,575 (2.1%) Total operating expenses 8,428 8,300 1.5% 32,939 32,609 1.0% Operating income 1,327 549 141.7% 4,567 1,824 150.4% Interest expense 285 292 (2.4%) 1,186 1,260 (5.9%) Minority interest expense 39 7 457.1% 166 102 62.7% Equity in net income of affiliates - 1 (100.0%) - 5 (100.0%) Other, net 7 1 600.0% 27 64 (57.8%) Income before income tax provision 1,010 252 300.8% 3,242 531 510.5% Provision for income taxes 228 48 375.0% 719 198 263.1% Net income $782 $204 283.3% $2,523 $333 657.7%

Selected Financial and Operating Data for AT&T Mobility LLC (formerly Cingular Wireless LLC) - amounts in millions, except customer data in 000s

Quarter Ended Year to Date 12/31/2006 12/31/2005 %Change 12/31/2006 12/31/2005 %Change (Amounts in millions, except customer data in 000s) OIBDA (1) $2,909 $2,279 27.6% $11,003 $8,399 31.0% OIBDA margin (2) 33.1% 29.3% 380 BP 32.6% 27.4% 520 BP Total Cellular/ PCS Customers (3) 60,962 54,144 12.6% 60,962 54,144 12.6% Net Customer Additions - Cellular/PCS 2,357 1,820 29.5% 6,892 5,006 37.7% M&A Activity, Partitioned Customers and/or Other Adjs. (61) 32 (290.6%) (74) 6 (1333.3%) Churn - Cellular/ PCS (4) 1.8% 2.1% -30 BP 1.8% 2.2% -40 BP ARPU - Cellular/ PCS (5) $49.29 $48.86 0.9% $49.10 $49.65 (1.1%) Minutes Of Use Per Cellular/PCS Subscriber (6) 745 700 6.4% 736 680 8.2% Licensed POPs - Cellular/PCS (7) 296 294 0.7% 296 294 0.7% Penetration - Cellular/PCS (8) 21.6% 18.9% 270 BP 21.6% 18.9% 270 BP Capital Expenditures $2,188 $2,970 (26.3%) $7,039 $7,475 (5.8%) Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures - amounts in millions (unaudited) Quarter Ended Year to Date 12/31/2006 12/31/2005 %Change 12/31/2006 12/31/2005 %Change Net income $782 $204 283.3% $2,523 $333 657.7% Plus: Interest expense 285 292 (2.4%) 1,186 1,260 (5.9%) Plus: Minority interest expense 39 7 457.1% 166 102 62.7% Plus: Equity in net loss of affiliates - (1) (100.0%) - (5) (100.0%) Plus: Other, net (7) (1) 600.0% (27) (64) (57.8%) Plus: Provision for income taxes 228 48 375.0% 719 198 263.1% Operating income 1,327 549 141.7% 4,567 1,824 150.4% Plus: Depreciation and amortization 1,582 1,730 (8.6%) 6,436 6,575 (2.1%) OIBDA (1) $2,909 $2,279 27.6% $11,003 $8,399 31.0% 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, 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 loss of affiliates, (5) other, net, and (6) provision 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 4Q06 is based on licensed "operational" POP's of 282 million. AT&T Mobility LLC (formerly Cingular Wireless LLC) Reconciliation of Reported Results to Normalized Results (amounts in millions) Quarter Ended December 31, 2006 Normalized Items Integration AWE Amortization GAAP Costs (1) Expense (2) Normalized Operating revenues: Service revenues $8,795 $- $- $8,795 Equipment sales 960 - - 960 Total operating revenues 9,755 - - 9,755 Operating expenses: Cost of services 2,465 (79) - 2,386 Cost of equipment sales 1,373 - - 1,373 Selling, general and administrative 3,008 (36) - 2,972 Depreciation and amortization 1,582 (109) (292) 1,181 Total operating expenses 8,428 (224) (292) 7,912 Operating income 1,327 224 292 1,843 Interest expense 285 - - 285 Minority interest expense 39 - - 39 Equity in net income (loss) of affiliates - - - - Other income (expense), net 7 - - 7 Income before income tax provision 1,010 224 292 1,526 Provision for income taxes 228 36 48 312 Net income $782 $188 $244 $1,214 Year to Date - December 31, 2006 Normalized Items Integration AWE Amortization GAAP Costs (1) Expense (2) Normalized Operating revenues: Service revenues $33,756 $- $- $33,756 Equipment sales 3,750 - - 3,750 Total operating revenues 37,506 - - 37,506 Operating expenses: Cost of services 9,809 (229) - 9,580 Cost of equipment sales 5,247 - - 5,247 Selling, general and administrative 11,447 (123) - 11,324 Depreciation and amortization 6,436 (408) (1,301) 4,727 Total operating expenses 32,939 (760) (1,301) 30,878 Operating income 4,567 760 1,301 6,628 Interest expense 1,186 - - 1,186 Minority interest expense 166 - - 166 Equity in net income (loss) of affiliates - - - - Other income (expense), net 27 - - 27 Income before income tax provision 3,242 760 1,301 5,303 Provision for income taxes 719 125 215 1,059 Net income $2,523 $635 $1,086 $4,244 Notes to Normalized Financial Data Our normalized earnings have been adjusted for the following: (1) Integration costs and related tax effect resulting from the Cingular acquisition of AT&T Wireless and AT&T, Inc. merger with BellSouth. (2) Amortization expense associated with intangible assets recorded for the AT&T Wireless acquisition and the related tax effect. AT&T Mobility LLC (formerly Cingular Wireless LLC) Income Statement, NORMALIZED - amounts in millions (unaudited) Quarter Ended Year to Date 12/31/2006 12/31/2005 %Change 12/31/2006 12/31/2005 %Change Operating revenues: Service revenues $8,795 $7,779 13.1% $33,756 $30,638 10.2% Equipment sales 960 1,070 (10.3%) 3,750 3,795 (1.2%) Total operating revenues 9,755 8,849 10.2% 37,506 34,433 8.9% Operating expenses: Cost of services 2,386 2,326 2.6% 9,580 9,026 6.1% Cost of equipment sales 1,373 1,341 2.4% 5,247 5,069 3.5% Selling, general and administrative 2,972 2,773 7.2% 11,324 11,364 (0.4%) Depreciation and amortization 1,181 1,133 4.2% 4,727 4,445 6.3% Total operating expenses 7,912 7,573 4.5% 30,878 29,904 3.3% Operating income 1,843 1,276 44.4% 6,628 4,529 46.3% Interest expense 285 292 (2.4%) 1,186 1,260 (5.9%) Minority interest expense 39 7 457.1% 166 102 62.7% Equity in net income of affiliates - 1 (100.0%) - 5 (100.0%) Other, net 7 1 600.0% 27 64 (57.8%) Income before income tax provision 1,526 979 55.9% 5,303 3,236 63.9% Provision for income taxes 312 168 85.7% 1,059 643 64.7% Net income $1,214 $811 49.7% $4,244 $2,593 63.7%

Selected Financial and Operating Data for AT&T Mobility LLC (formerly Cingular Wireless LLC) - amounts in millions, except customer data in 000s

Quarter Ended Year to Date 12/31/2006 12/31/2005 %Change 12/31/2006 12/31/2005 %Change (Amounts in millions, except customer data in 000s) OIBDA - normalized (1) $3,024 $2,409 25.5% $11,355 $8,974 26.5% OIBDA margin - normalized (2) 34.4% 31.0% 340 BP 33.6% 29.3% 430 BP Total Cellular/ PCS Customers (3) ** 60,962 54,144 12.6% 60,962 54,144 12.6% Net Customer Additions - Cellular/PCS ** 2,357 1,820 29.5% 6,892 5,006 37.7% M&A Activity, Partitioned Customers and/or Other Adjs. ** (61) 32 (290.6%) (74) 6 (1333.3%) Churn - Cellular/ PCS (4) ** 1.8% 2.1% -30 BP 1.8% 2.2% -40 BP ARPU - Cellular/ PCS (5) ** $49.29 $48.86 0.9% $49.10 $49.65 (1.1%) Minutes Of Use Per Cellular/PCS Subscriber (6) ** 745 700 6.4% 736 680 8.2% Licensed POPs - Cellular/ PCS (7) ** 296 294 0.7% 296 294 0.7% Penetration - Cellular/ PCS (8) ** 21.6% 18.9% 270 BP 21.6% 18.9% 270 BP Capital Expenditures ** $2,188 $2,970 (26.3%) $7,039 $7,475 (5.8%) Reconciliations of Normalized Financial Measures to Normalized OIBDA and OIBDA Margin - amounts in millions (unaudited) Quarter Ended Year to Date 12/31/2006 12/31/2005 %Change 12/31/2006 12/31/2005 %Change Net income $1,214 $811 49.7% $4,244 $2,593 63.7% Plus: Interest expense 285 292 (2.4%) 1,186 1,260 (5.9%) Plus: Minority interest expense 39 7 457.1% 166 102 62.7% Plus: Equity in net loss of affiliates - (1) 100.0% - (5) 100.0% Plus: Other, net (7) (1) (600.0%) (27) (64) 57.8% Plus: Provision for income taxes - normalized 312 168 85.7% 1,059 643 64.7% Operating income - normalized 1,843 1,276 44.4% 6,628 4,529 46.3% Plus: Depreciation and amortization - normalized 1,181 1,133 4.2% 4,727 4,445 6.3% OIBDA - normalized (1) $3,024 $2,409 25.5% $11,355 $8,974 26.5% OIBDA margin (2) 33.1% 29.3% 380 BP 32.6% 27.4% 520 BP Plus: OIBDA margin, integration 1.3% 1.7% -40 BP 1.0% 1.9% -90 BP OIBDA margin - normalized 34.4% 31.0% 340 BP 33.6% 29.3% 430 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, 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 loss of affiliates, (5) other, net, and (6) provision 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 4Q06 is based on licensed "operational" POP's of 282 million. AT&T Mobility LLC (formerly Cingular Wireless LLC) Income Statement Amounts in millions (unaudited) Full Year 2003 3/31/2004 6/30/2004 9/30/2004 Operating revenues: Service revenues $14,317 $3,583 $3,833 $3,873 Equipment sales 1,260 384 354 419 Total operating revenues 15,577 3,967 4,187 4,292 Operating expenses: Cost of services 3,775 955 983 1,107 Cost of equipment sales 2,031 537 505 585 Selling, general and administrative 5,428 1,372 1,463 1,567 Depreciation and amortization 2,089 553 565 573 Total operating expenses 13,323 3,417 3,516 3,832 Operating income (loss) 2,254 550 671 460 Interest expense 856 198 199 200 Minority interest expense 101 27 41 20 Equity in net income (loss) of affiliates (333) (108) (95) (98) Other, net 41 4 1 - Income (loss) before income tax provision 1,005 221 337 142 Provision (benefit) for income taxes 28 6 (2) - Net income (loss) $977 $215 $339 $142 12/31/2004 3/31/2005 6/30/2005 9/30/2005 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 1,692 2,144 2,293 2,464 Cost of equipment sales 1,247 1,295 1,230 1,203 Selling, general and administrative 2,947 3,001 2,953 2,881 Depreciation and amortization 1,386 1,675 1,629 1,541 Total operating expenses 7,272 8,115 8,105 8,089 Operating income (loss) (153) 114 504 657 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, net 11 20 33 10 Income (loss) before income tax provision (557) (218) 171 326 Provision (benefit) for income taxes (62) 22 24 104 Net income (loss) $(495) $(240) $147 $222 12/31/2005 3/31/2006 6/30/2006 9/30/2006 12/31/2006 Operating revenues: Service revenues $7,779 $8,005 $8,295 $8,661 $8,795 Equipment sales 1,070 975 923 892 960 Total operating revenues 8,849 8,980 9,218 9,553 9,755 Operating expenses: Cost of services 2,417 2,320 2,497 2,527 2,465 Cost of equipment sales 1,341 1,327 1,349 1,198 1,373 Selling, general and administrative 2,812 2,846 2,757 2,836 3,008 Depreciation and amortization 1,730 1,680 1,598 1,576 1,582 Total operating expenses 8,300 8,173 8,201 8,137 8,428 Operating income (loss) 549 807 1,017 1,416 1,327 Interest expense 292 297 298 306 285 Minority interest expense 7 41 43 43 39 Equity in net income (loss) of affiliates 1 - - - - Other, net 1 9 6 5 7 Income (loss) before income tax provision 252 478 682 1,072 1,010 Provision (benefit) for income taxes 48 124 142 225 228 Net income (loss) $204 $354 $540 $847 $782

Selected Financial and Operating Data for AT&T Mobility LLC (formerly Cingular Wireless LLC) - amounts in millions, except customer data in 000s

2003 3/31/2004 6/30/2004 9/30/2004 OIBDA 1 $4,343 $1,103 $1,236 $1,033 OIBDA margin 2 30.5% 30.8% 32.2% 26.7% Integration, AT&T Wireless Intangibles Amortization,Hurricane Costs and BLS Merger Costs $- $- $- $43 OIBDA - normalized $4,343 $1,103 $1,236 $1,076 OIBDA margin - normalized 30.5% 30.8% 32.2% 27.8% Total Cellular/PCS Customers 3 24,027 24,618 25,044 25,672 Net Customer Additions - Cellular/PCS 2,116 554 428 657 M&A Activity, Partitioned Customers and/or Other Adjs. (14) 37 (2) (29) Churn - Cellular/PCS 4 2.7% 2.7% 2.7% 2.8% ARPU - Cellular/PCS 5 $51.67 $48.30 $50.75 $50.25 Minutes Of Use Per Cellular/PCS Subscriber 6 446 527 568 598 Licensed POPs - Cellular/PCS 7 236 240 243 243 Penetration - Cellular/PCS 8 10.8% 10.9% 11.1% 11.4% Total Cingular Interactive Customers 789 768 735 653 Net Customer Additions - Cingular Interactive (28) (21) (33) (82) Capital Expenditures $2,734 $334 $783 $634 12/31/2004 3/31/2005 6/30/2005 9/30/2005 OIBDA 1 $1,233 $1,789 $2,133 $2,198 OIBDA margin 2 19.5% 24.1% 27.6% 28.5% Integration, AT&T Wireless Intangibles Amortization,Hurricane Costs and BLS Merger Costs $643 $596 $649 $733 OIBDA - normalized $1,478 $1,894 $2,228 $2,443 OIBDA margin - normalized 23.4% 25.5% 28.9% 31.6% Total Cellular/PCS Customers 3 49,132 50,350 51,442 52,292 Net Customer Additions - Cellular/PCS 1,699 1,367 952 867 M&A Activity, Partitioned Customers and/or Other Adjs. 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 Minutes Of Use Per Cellular/PCS Subscriber 6 617 628 692 698 Licensed POPs - Cellular/PCS 7 291 293 294 294 Penetration - Cellular/PCS 8 17.2% 17.7% 18.0% 18.3% Total Cingular Interactive Customers NA NA NA NA Net Customer Additions - Cingular Interactive NA NA NA NA Capital Expenditures $1,698 $971 $2,188 $1,346 12/31/2005 3/31/2006 6/30/2006 9/30/2006 12/31/2006 OIBDA 1 $2,279 $2,487 $2,615 $2,992 $2,909 OIBDA margin 2 29.3% 31.1% 31.5% 34.5% 33.1% Integration, AT&T Wireless Intangibles Amortization, Hurricane Costs and BLS Merger Costs $727 $593 $499 $453 $516 OIBDA - normalized $2,409 $2,551 $2,701 $3,079 $3,024 OIBDA margin - normalized 31.0% 31.9% 32.6% 35.6% 34.4% Total Cellular/PCS Customers 3 54,144 55,810 57,308 58,666 60,962 Net Customer Additions - Cellular/PCS 1,820 1,679 1,498 1,358 2,357 M&A Activity, Partitioned Customers and/or Other Adjs. 32 (13) - - (61) Churn - Cellular/PCS 4 2.1% 1.9% 1.7% 1.8% 1.8% ARPU - Cellular/PCS 5 $48.86 $48.48 $48.84 $49.76 $49.29 Minutes Of Use Per Cellular/PCS Subscriber 6 700 698 741 755 745 Licensed POPs - Cellular/PCS 7 294 296 296 296 296 Penetration - Cellular/PCS 8 18.9% 19.8% 20.0% 20.8% 21.6% Total Cingular Interactive Customers NA NA NA NA NA Net Customer Additions - Cingular Interactive NA NA NA NA NA Capital Expenditures $2,970 $1,441 $1,582 $1,828 $2,188 Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures Amounts in millions (unaudited) 2003 3/31/2004 6/30/2004 9/30/2004 Net income (loss) $977 $215 $339 $142 Plus: Interest expense 856 198 199 200 Plus: Minority interest expense 101 27 41 20 Plus: Equity in net income (loss) of affiliates 333 108 95 98 Plus: Other, net (41) (4) (1) - Plus: Provision (benefit) for income taxes 28 6 (2) - Operating income (loss) 2,254 550 671 460 Plus: Depreciation and amortization 2,089 553 565 573 OIBDA 1 $4,343 $1,103 $1,236 $1,033 Plus: Integration costs (excluding depreciation and amortization) - - - 43 Plus: Hurricane costs (excluding depreciation and amortization) - - - - OIBDA - normalized 1 $4,343 $1,103 $1,236 $1,076 Service revenues 14,317 3,583 3,833 3,873 Less: Mobitex data revenues 220 58 59 54 Service revenues used to calculate ARPU $14,097 $3,525 $3,774 $3,819 12/31/2004 3/31/2005 6/30/2005 9/30/2005 Net income (loss) $(495) $(240) $147 $222 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 (benefit) for income taxes (62) 22 24 104 Operating income (loss) (153) 114 504 657 Plus: Depreciation and amortization 1,386 1,675 1,629 1,541 OIBDA 1 $1,233 $1,789 $2,133 $2,198 Plus: Integration costs (excluding depreciation and amortization) 245 105 95 149 Plus: Hurricane costs (excluding depreciation and amortization) - - - 96 OIBDA - normalized 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 12/31/2005 3/31/2006 6/30/2006 9/30/2006 12/31/2006 Net income (loss) $204 $354 $540 $847 $782 Plus: Interest expense 292 297 298 306 285 Plus: Minority interest expense 7 41 43 43 39 Plus: Equity in net income (loss) of affiliates (1) - - - - Plus: Other, net (1) (9) (6) (5) (7) Plus: Provision (benefit) for income taxes 48 124 142 225 228 Operating income (loss) 549 807 1,017 1,416 1,327 Plus: Depreciation and amortization 1,730 1,680 1,598 1,576 1,582 OIBDA 1 $2,279 $2,487 $2,615 $2,992 $2,909 Plus: Integration costs (excluding depreciation and amortization) 110 64 86 87 115 Plus: Hurricane costs (excluding depreciation and amortization) 20 - - - - OIBDA - normalized 1 $2,409 $2,551 $2,701 $3,079 $3,024 Service revenues 7,779 8,005 8,295 8,661 8,795 Less: Mobitex data revenues 17 14 11 7 7 Service revenues used to calculate ARPU $7,762 $7,991 $8,284 $8,654 $8,788 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 re 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. (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 4Q06 is based on licensed "operational" POP's of 282 million.

AT&T Mobility LLC (formerly 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) 12/31/2004 3/31/2005 6/30/2005 Operating revenues: Service revenues $6,313 $7,419 $7,719 Equipment sales 806 810 890 Total operating revenues 7,119 8,229 8,609 Operating expenses: Cost of services 1,685 2,141 2,274 Cost of equipment sales 1,244 1,295 1,230 Selling, general and administrative 2,712 2,899 2,877 Depreciation and amortization 988 1,184 1,075 Total operating expenses 6,629 7,519 7,456 Operating income 490 710 1,153 Interest expense 303 338 326 Minority interest expense (2) 16 41 Equity in net income (loss) of affiliates (114) 2 1 Other, net 11 20 33 Income before income tax provision 86 378 820 Provision for income taxes 39 120 131 Net income $47 $258 $689 Normalized 9/30/2005 12/31/2005 3/31/2006 Operating revenues: Service revenues $7,721 $7,779 $8,005 Equipment sales 1,025 1,070 975 Total operating revenues 8,746 8,849 8,980 Operating expenses: Cost of services 2,285 2,326 2,302 Cost of equipment sales 1,203 1,341 1,327 Selling, general and administrative 2,815 2,773 2,800 Depreciation and amortization 1,053 1,133 1,151 Total operating expenses 7,356 7,573 7,580 Operating income 1,390 1,276 1,400 Interest expense 304 292 297 Minority interest expense 38 7 41 Equity in net income (loss) of affiliates 1 1 - Other, net 10 1 9 Income before income tax provision 1,059 979 1,071 Provision for income taxes 224 168 222 Net income $835 $811 $849 6/30/2006 9/30/2006 12/31/2006 Operating revenues: Service revenues $8,295 $8,661 $8,795 Equipment sales 923 892 960 Total operating revenues 9,218 9,553 9,755 Operating expenses: Cost of services 2,430 2,462 2,386 Cost of equipment sales 1,349 1,198 1,373 Selling, general and administrative 2,738 2,814 2,972 Depreciation and amortization 1,185 1,210 1,181 Total operating expenses 7,702 7,684 7,912 Operating income 1,516 1,869 1,843 Interest expense 298 306 285 Minority interest expense 43 43 39 Equity in net income (loss) of affiliates - - - Other, net 6 5 7 Income before income tax provision 1,181 1,525 1,526 Provision for income taxes 225 300 312 Net income $956 $1,225 $1,214

Selected Financial and Operating Data for AT&T Mobility LLC (formerly Cingular Wireless LLC) - amounts in millions, except customer data in 000s

12/31/2004 3/31/2005 6/30/2005 OIBDA(1) (in millions) $1,478 $1,894 $2,228 OIBDA margin(2) 23.4% 25.5% 28.9% Total Cellular/PCS Customers(3) (000's) 49,132 50,350 51,442 Net Customer Additions - Cellular/PCS (000's) 1,699 1,367 952 M&A Activity, Partitioned Customers and/or Other Adjs. (000's) 21,761 (149) 140 Churn - Cellular/PCS(4) 2.6% 2.2% 2.2% ARPU - Cellular/PCS(5) $49.51 $49.60 $50.51 Normalized 9/30/2005 12/31/2005 3/31/2006 OIBDA(1) (in millions) $2,443 $2,409 $2,551 OIBDA margin(2) 31.6% 31.0% 31.9% Total Cellular/PCS Customers(3) (000's) 52,292 54,144 55,810 Net Customer Additions - Cellular/PCS (000's) 867 1,820 1,679 M&A Activity, Partitioned Customers and/or Other Adjs. (000's) (17) 32 (13) Churn - Cellular/PCS(4) 2.3% 2.1% 1.9% ARPU - Cellular/PCS(5) $49.65 $48.86 $48.48 6/30/2006 9/30/2006 12/31/2006 OIBDA(1) (in millions) $2,701 $3,079 $3,024 OIBDA margin(2) 32.6% 35.6% 34.4% Total Cellular/PCS Customers(3) (000's) 57,308 58,666 60,962 Net Customer Additions - Cellular/PCS (000's) 1,498 1,358 2,357 M&A Activity, Partitioned Customers and/or Other Adjs. (000's) - - (61) Churn - Cellular/PCS(4) 1.7% 1.8% 1.8% ARPU - Cellular/PCS(5) $48.84 $49.76 $49.29

Reconciliations of Normalized Financial Measures to Normalized OIBDA and Service Revenues - amounts in millions (unaudited)

12/31/2004 3/31/2005 6/30/2005 Net income $47 $258 $689 Plus: Interest expense 303 338 326 Plus: Minority interest expense (2) 16 41 Plus: Equity in net (income) loss of affiliates 114 (2) (1) Plus: Other, net (11) (20) (33) Plus: Provision for income taxes 39 120 131 Operating income 490 710 1,153 Plus: Depreciation and amortization 988 1,184 1,075 OIBDA(1) $1,478 $1,894 $2,228 Service revenues 6,313 7,419 7,719 Less: Mobitex data revenues 36 18 20 Service revenues used to calculate ARPU $6,277 $7,401 $7,699 Normalized 9/30/2005 12/31/2005 3/31/2006 Net income $835 $811 $849 Plus: Interest expense 304 292 297 Plus: Minority interest expense 38 7 41 Plus: Equity in net (income) loss of affiliates (1) (1) - Plus: Other, net (10) (1) (9) Plus: Provision for income taxes 224 168 222 Operating income 1,390 1,276 1,400 Plus: Depreciation and amortization 1,053 1,133 1,151 OIBDA(1) $2,443 $2,409 $2,551 Service revenues 7,721 7,779 8,005 Less: Mobitex data revenues 18 17 14 Service revenues used to calculate ARPU $7,703 $7,762 $7,991 6/30/2006 9/30/2006 12/31/2006 Net income $956 $1,225 $1,214 Plus: Interest expense 298 306 285 Plus: Minority interest expense 43 43 39 Plus: Equity in net (income) loss of affiliates - - - Plus: Other, net (6) (5) (7) Plus: Provision for income taxes 225 300 312 Operating income 1,516 1,869 1,843 Plus: Depreciation and amortization 1,185 1,210 1,181 OIBDA(1) $2,701 $3,079 $3,024 Service revenues 8,295 8,661 8,795 Less: Mobitex data revenues 11 7 7 Service revenues used to calculate ARPU $8,284 $8,654 $8,788 Notes: (1) OIBDA is defined as operating income before depreciation and amortization. OIBDA differs from operating income, as calculated in accordance with GAAP, in it excludes depreciation and amortization. It differs from net income, 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 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. AT&T Mobility LLC (formerly Cingular Wireless LLC) Income Statement, Prior Quarter Normalized Reconciliations - amounts in millions (unaudited) Three months ended 09/30/04 Three months ended 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 , 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 Three months ended 3/31/05 Three months ended 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 , 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 9/30/05 Three months ended 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 , 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 Three months ended 3/31/06 Three months ended 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 , 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 9/30/06 Three months ended 12/31/06 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $8,661 $- $8,661 $8,795 $- $8,795 Equipment sales 892 - 892 960 - 960 Total operating revenues 9,553 - 9,553 9,755 - 9,755 Operating expenses: Cost of services 2,527 (65) 2,462 2,465 (79) 2,386 Cost of equipment sales 1,198 - 1,198 1,373 - 1,373 Selling, general and administrative 2,836 (22) 2,814 3,008 (36) 2,972 Depreciation and amortization 1,576 (366) 1,210 1,582 (401) 1,181 Total operating expenses 8,137 (453) 7,684 8,428 (516) 7,912 Operating income 1,416 453 1,869 1,327 516 1,843 Interest expense 306 - 306 285 - 285 Minority interest expense 43 - 43 39 - 39 Equity in net income (loss) of affiliates - - - - - - Other , net 5 - 5 7 - 7 Income (loss) before income tax provision 1,072 453 1,525 1,010 516 1,526 Provision (benefit) for income taxes 225 75 300 228 84 312 Net income (loss) $847 $378 $1,225 $782 $432 $1,214 Nine months ended 09/30/04 Twelve months ended 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, 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 3/31/05 Six months ended 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, 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 Nine months ended 9/30/05 Twelve months ended 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, 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 3/31/06 Six months ended 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, 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 Nine months ended 9/30/06 Twelve months ended 12/31/06 Normal- Normal- Normal- Normal- GAAP ized ized GAAP ized ized Results Expenses Results Results Expenses Results Operating revenues: Service revenues $24,961 $- $24,961 $33,756 $- $33,756 Equipment sales 2,790 - 2,790 3,750 - 3,750 Total operating revenues 27,751 - 27,751 37,506 - 37,506 Operating expenses: Cost of services 7,344 (150) 7,194 9,809 (229) 9,580 Cost of equipment sales 3,874 - 3,874 5,247 - 5,247 Selling, general and administrative 8,439 (87) 8,352 11,447 (123) 11,324 Depreciation and amortization 4,854 (1,308) 3,546 6,436 (1,709) 4,727 Total operating expenses 24,511 (1,545) 22,966 32,939 (2,061) 30,878 Operating income 3,240 1,545 4,785 4,567 2,061 6,628 Interest expense 901 - 901 1,186 - 1,186 Minority interest expense 127 - 127 166 - 166 Equity in net income (loss) of affiliates - - - - - - Other, net 20 - 20 27 - 27 Income (loss) before income tax provision 2,232 1,545 3,777 3,242 2,061 5,303 Provision (benefit) for income taxes 491 256 747 719 340 1,059 Net income (loss) $1,741 $1,289 $3,030 $2,523 $1,721 $4,244 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, $314 in 3Q06, $292 in 4Q06. AT&T Mobility LLC (formerly Cingular Wireless LLC) Balance Sheet Amounts in millions (unaudited) 12/31/2006 12/31/2005 Incr(Decr) % + / - (unaudited) (audited) Assets Current assets: Cash and cash equivalents $512 $472 $40 8.5% Accounts receivable - net of allowance for doubtful accounts 4,087 3,622 465 12.8% Inventories 467 536 (69) (12.9%) Prepaid expenses and other current assets 1,922 1,419 503 35.4% Total current assets 6,988 6,049 939 15.5% Property, plant and equipment - net 19,687 21,745 (2,058) (9.5%) Intangible assets - net 69,510 50,773 18,737 36.9% Other assets 1,086 752 334 44.4% Total assets $97,271 $79,319 $17,952 22.6% Liabilities and members' capital Current liabilities: Debt maturing within one year $3,095 $2,036 $1,059 52.0% Accounts payable and accrued liabilities 7,014 7,972 (958) (12.0%) Total current liabilities 10,109 10,008 101 1.0% Long-term debt to affiliates 6,717 6,717 - 0.0% Long-term debt to external parties 11,790 12,623 (833) (6.6%) Total long-term debt 18,507 19,340 (833) (4.3%) Other noncurrent liabilities 7,210 4,450 2,760 62.0% Minority interests in consolidated entities 601 543 58 10.7% Members' capital 60,844 44,978 15,866 35.3% Total liabilities and members' capital $97,271 $79,319 $17,952 22.6%