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%
