##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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Form 10-K

|           |  |                                                                                                 
|---------- |  | ------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                 
|x          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31,
    2004                                                 
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                                 

Commission File Number 001-31673



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Cingular Wireless LLC

Formed under the laws of the State of
Delaware

I.R.S. Employer Identification Number
74-2955068


5565 Glenridge Connector, Atlanta, Georgia
30342

Telephone Number:
(404) 236-7895


Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.     Yes þ          No o

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any
amendment to this
Form 10-K.     þ

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act.) Yes o No
þ

The limited liability company ownership interests
of the registrant are not publicly traded. Therefore, there is
no aggregate market value for the registrants outstanding
equity that is readily determinable.



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TABLE OF CONTENTS

|                                                                            |  |                                                                                                        |     |      |     | 
|--------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------ | --- | ---- | --- | 
|                                                                            |  |                                                                                                        |     | Page
|                                                                            |  |                                                                                                        |     |     
|PART I                                                                     
|Item 1.                                                                     |  | Business                                                                                               |     |      | 2   | 
|Item 2.                                                                     |  | Properties                                                                                             |     |      | 34  | 
|Item 3.                                                                     |  | Legal Proceedings                                                                                      |     |      | 34  | 
|Item 4.                                                                     |  | Submission of Matters to a
    Vote of Security Holders                                                |     |      | 36  | 
|PART II                                                                    
|Item 5.                                                                     |  | Market for Registrants
    Common Equity and Related Stockholder Matters                              |     |      | 37  | 
|Item 6.                                                                     |  | Selected Financial Data                                                                                |     |      | 37  | 
|Item 7.                                                                     |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operations              |     |      | 44  | 
|Item 7A.                                                                    |  | Quantitative and Qualitative
    Disclosure About Market Risk                                          |     |      | 76  | 
|Item 8.                                                                     |  | Financial Statements and
    Supplementary Data                                                        |     |      | 78  | 
|Item 9.                                                                     |  | Changes in and Disagreements
    with Accountants on Accounting and Financial Disclosure               |     |      | 168 | 
|Item 9A.                                                                    |  | Controls and Procedures                                                                                |     |      | 168 | 
|Item 9B.                                                                    |  | Other Information                                                                                      |     |      | 169 | 
|PART III                                                                   
|Item 10.                                                                    |  | Directors and Executive
    Officers of the Registrant                                                 |     |      | 170 | 
|Item 11.                                                                    |  | Executive Compensation                                                                                 |     |      | 173 | 
|Item 12.                                                                    |  | Security Ownership of
    Certain Beneficial Owners and Management and Related Stockholder
    Matters |     |      | 181 | 
|Item 13.                                                                    |  | Certain Relationships and
    Related Transactions                                                     |     |      | 181 | 
|Item 14.                                                                    |  | Principal Accounting Fees
    and Services                                                             |     |      | 192 | 
|PART IV                                                                    
|Item 15.                                                                    |  | Exhibits and Financial
    Statement Schedules                                                         |     |      | 193 | 
|Signatures                                                                  |  |                                                                                                        | 203 |     
|EX-4.15 NOTICE OF ADDTIONAL SENIOR CAPITAL MARKETS DEBT                    
|EX-12 STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES      
|EX-21 SUBSIDIARIES OF THE REGISTRANT                                       
|EX-24 POWERS OF ATTORNEY                                                   
|EX-31.1 CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER             
|EX-31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER                           
|EX-32.1 CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER             
|EX-32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER                           
|EX-99.1.1 CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION



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##### Table of Contents



CINGULAR WIRELESS LLC








PART I




Item 1.     Business

Overview

Throughout this document, Cingular Wireless LLC
and its subsidiaries are referred to as we or
Cingular.

We provide a wide array of wireless services for
individual, business and governmental users. We are the largest
provider of wireless voice and data communications services in
the United States (U.S.) in terms of customers. We recently
reported:



|  |                                                                                                                                       
|- | --------------------------------------------------------------------------------------------------------------------------------------
| | U.S. wireless cellular service and personal
    communication services (PCS) customers totaling
    49.1 million at December 31, 2004;
| 
| | over 17 million active users of our data
    services at December 31, 2004;                                                           
| 
| | revenues of $19.4 billion in 2004; and                                                                                                
| 
| | net income of $201 million in 2004.                                                                                                   

We have access to licenses, either through owned
or leased licenses or licenses owned by joint ventures and
affiliates, to provide cellular or PCS wireless communications
services covering an aggregate of 290 million in population
(POPs) or approximately 98% of the U.S. population,
including all of the 100 largest U.S. metropolitan areas.

Our primary digital networks utilize Global
System for Mobile Communication (GSM) technology and Time
Division Multiple Access (TDMA) technology. As of
December 31, 2004, 65% of our subscriber base was
GSM-equipped and 79% of our total minutes were carried on our
GSM network. We also provide voice service on our analog
network, as mandated by the Federal Communications Commission
(FCC). We supplement our own networks with roaming agreements
that allow our subscribers to use other providers wireless
services in regions where we do not have network coverage. We
refer to the area covered by our network footprint
and roaming agreements as our coverage area. With these roaming
agreements, as of December 31, 2004, we were able to offer
our customers digital wireless services covering 95% of the
U.S. population.

We also offer multi-band devices that allow our
customers to access networks using both the cellular and PCS
frequencies across the U.S. as well as international
networks around the world. Through roaming agreements with
foreign carriers, we provide our customers equipped with
multi-band devices the largest global coverage of any
U.S. wireless carrier, with service available in over 170
countries. We plan to continue to expand our service and
coverage area and increase the capacity and quality of our
digital network through new network construction, acquisitions,
joint ventures, and roaming arrangements with other wireless
providers.

In October 2004, we consummated the acquisition
of AT&T Wireless Services, Inc. (AT&T Wireless) for an
aggregate consideration of approximately $41 billion in
cash. AT&T Wireless, which has been renamed New Cingular
Wireless Services, Inc. but will continue to be referred to
herein as AT&T Wireless, is now our direct wholly owned
subsidiary. Immediately following the acquisition of AT&T
Wireless, we repositioned the Cingular brand with RAISING THE
BARSM. Under that umbrella we also branded our
network as the ALLOVERSM network, utilizing the
slogan MORE BARS IN MORE PLACESSM. Along with the
integration of AT&T Wireless, our primary business
initiatives in 2005 include the creation of a Business Markets
Group, expansion of our voice and data network and the
deployment of high-speed Universal Mobile Telephone System
(UMTS) third-generation (3G) service.

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##### Table of Contents



CINGULAR WIRELESS LLC





PART I




Item 1.     Business


Organizational Structure



| |            
| | -----------
| | The Company

Cingular Wireless LLC is a Delaware limited
liability company and has its principal executive offices at
Glenridge Highlands Two, 5565 Glenridge Connector, Atlanta,
Georgia 30342 (telephone number 404-236-6000). We were formed in
April 2000 by SBC Communications Inc. (SBC) and BellSouth
Corporation (BellSouth), whose membership interests in us are
held by their wholly owned subsidiaries. In October 2000, SBC
and BellSouth contributed substantially all of their
U.S. wireless businesses to us in exchange for economic
ownership interests in us of approximately 60% and 40%,
respectively. We began doing business under the
Cingular brand name in January 2001.

Our Internet website is http://www.cingular.com.
(This web site address is an inactive textual reference included
for information only and is not intended to be an active link or
to incorporate any web site information into this document.) We
make available, free of charge, through our website our annual
report to the Securities and Exchange Commission (SEC) on
Form 10-K, our quarterly reports on Form 10-Q, our
current reports on Form 8-K and all amendments to those
reports as soon as reasonably practicable after such reports are
electronically filed with the SEC.

We have adopted a written code of conduct
applicable to all directors, officers and employees. In
addition, we have a separate Code of Ethics that is applicable
to our principal executive, financial and accounting officers,
or our Senior Financial Officers, responsive to
Section 406 of the Sarbanes-Oxley Act of 2002 and the rules
of the SEC. The Senior Financial Officer Code of Ethics is
available on our website. In the event that we make any
substantive changes in, or provide any material waivers from,
the provisions of this Code of Ethics, we intend to disclose
such events on our website.



| |                          
| | -------------------------
| | Management and Governance

SBC and BellSouth jointly control Cingular
Wireless Corporation, a holding company with no material assets
of its own other than a de minimiseconomic interest in
us. Its main purpose is to act as our manager and thereby
control our management and operations. We refer to Cingular
Wireless Corporation as our Manager. Our officers
are appointed by its board of directors.

Restatement of Financial Results

On February 18, 2005, our management and the
Audit Committee of the board of directors of our Manager
concluded that our financial statements for fiscal periods
ending December 31, 2000 through December 31, 2003 and
the first three interim periods of 2004 should be restated to
correct certain errors relating to accounting for operating
leases and that such previously filed financial statements
should no longer be relied upon. Ernst & Young LLP, our
independent registered public accounting firm, has advised us
that it concurs with our conclusion. While management believes
that the impact of this error is not material to any previously
issued financial statements, we determined that the cumulative
adjustment required to correct this error was too large to
record in 2004. We have included restated financial statements
for the years ending December 31, 2003 and 2002 and the
quarterly results for 2003 and the first three quarters of 2004
in Item 8, Financial Statements and Supplementary
Data in this Form 10-K. We have included restated
amounts for the periods ending December 31, 2001 and 2000
within Item 6, Selected Financial Data.

Our network infrastructure venture with T-Mobile
USA, Inc. (T-Mobile), GSM Facilities LLC (GSMF), accounted for
under the equity method, reached a similar conclusion with
respect to operating leases, requiring correction and
restatement of the ventures previously issued financial
statements for the years

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Item 1.     Business


ended December 31, 2003 and 2002. These
financial statements were included in our 2003 Form 10-K
and also should no longer be relied upon. Accordingly, we also
revised and restated our equity accounting for the venture. Due
to the significance of this joint venture to us, the GSMF
financial statements have been included in this document and
have been restated for the periods ending December 31, 2003
and 2002.

See Note 2 to the accompanying consolidated
financial statements in Item 8, Financial Statements
and Supplementary Data for additional information on the
restatement.

Our Business



| |         
| | --------
| | Overview

Voice Services.We
offer a comprehensive range of high-quality wireless voice
communications services in a variety of pricing plans, including
national and regional rate plans as well as prepaid service
plans. Our voice offerings are tailored to meet the
communications needs of targeted customer segments, including
youth, family, active professionals, local and regional
businesses and major national corporate accounts. The marketing
and distribution plans for our voice services are further
targeted to the specific geographic and demographic
characteristics of each of our markets.

Data Services.Wireless data continues to be a high growth area of our
business, with its revenue representing an increasing share of
our overall subscriber revenue. We are experiencing solid growth
from both consumer and enterprise wireless data solutions. We
are upgrading our network and coordinating with equipment
manufacturers and applications developers to take advantage of
continued growth in the demand for wireless data services. With
the acquisition of AT&T Wireless, we believe we are the
largest provider of wireless data in the U.S. wireless
industry based on annual data revenues for 2004.



| |                  
| | -----------------
| | Consumer Services

Postpaid Voice
Service.Consumer postpaid voice
service is generally offered on a contract basis for one or two
year periods. Under the terms of these contracts, service is
provided and billed on a monthly basis according to the
applicable pricing plan chosen. Our wireless services include
basic local wireless communications service, long distance
service and roaming services, which enable our customers to
utilize other carriers networks when they are
roaming outside our coverage area. We also bill
other carriers for providing roaming services to their customers
when their customers utilize our network. We had approximately
42.9 million postpaid contract customers (excluding
reseller customers) at December 31, 2004. In addition to
basic wireless voice telephony services, we offer many enhanced
features with many of our pricing plans. These features include
caller ID, call waiting, call forwarding, three-way calling, no
answer/busy transfer and voice mail. In some markets, we make
available additional services for a monthly fee, such as
unlimited Mobile-to-Mobile calling, discounted international
roaming and international long distance, expanded off peak
hours, roadside assistance and handset insurance.

Our primary marketing emphasis is enrolling
customers in postpaid service calling plans. Despite the
relatively higher cost of enrollment due to handset subsidies
and sales commission structure, such customers generate higher
revenue and have a lower churn rate than prepaid service
customers. Accordingly, a significant component of our strategy
consists of developing value-added plan features, ancillary
services, unique devices and promotions to attract and retain
postpaid customers. In 2004, we focused on simplifying and
enhancing our national and international calling plans. We
emphasized national calling plans without roaming or long
distance charges due to the simplicity and value of the plans.
We expanded mobile-to-mobile coverage areas to include
non-Cingular network areas in the calling plan area and, to take
advantage of Cingulars large calling community, we
included in many of our national plans the ability to call other
Cingular customers on their wireless phones for free. Thus, as
our coverage and

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Item 1.     Business


that of our GSM roaming partners expands, so does
the calling area of our customers, which further enhances our
brand messages RAISING THE BARSM, the
ALLOVERSM network and MORE BARS IN MORE
PLACESSM. FAMILYTALK®* plans, which add lines at
substantial discounts to high-priced accounts, continue to be
popular and to contribute a significant portion of our postpaid
customer growth. The ROLLOVER® rate plans, which allow our
customers to carry over any unused anytime minutes
from month to month for up to one year, continue to be offered
exclusively by Cingular. We enhanced our international GSM voice
roaming coverage to over 170 countries for subscribers with
compatible devices. Additionally, we introduced a new
international services feature package providing discounted
voice roaming to Western Europe and discounted international
long distance dialing from the U.S.

Prepaid Voice
Service.We offer prepaid service to
meet the demands of distinct consumer segments, such as the
youth market, families and small business customers, who prefer
to control usage or pay in advance. Our prepaid services are
marketed as GOPHONE® and KIC® (Keep in Contact)
branded service. As of December 31, 2004, retail prepaid
users represented approximately 7% of our total customers. We
believe our prepaid service offering benefits from being part of
a national brand, particularly with regard to distribution. Our
prepaid strategy focuses on increasing the profitability of this
customer segment through offering a wider array of services and
features to increase revenue and retention of these customers.
Our prepaid services offer customers many features available on
our postpaid plans, including unlimited nights and weekends,
long distance, caller ID, call waiting, voicemail and
off-network roaming, as well as enhanced features like text
messaging, downloadable graphics and ringtones, games and
information alerts. At the same time, the customer retains the
benefits of no credit check and enhanced ability to control
spending, and our KIC customers also have no contract or monthly
billing. In addition, we continue to focus on increasing the
distribution of our prepaid offering to include the Internet,
automated replenishment services and strategic retail partners
that will allow our prepaid service to truly be a product of
convenience.

Consistent with the industry, we experience
higher customer churn rates and lower revenue per customer with
prepaid customers than our postpaid customers; however, these
impacts are somewhat offset by the lower cost of acquiring new
prepaid customers, including lower handset subsidies, higher
revenue per minute earned and the absence of significant payment
defaults.

Data Services.We
currently offer a wide array of consumer data services, such as
wireless Internet browsing, wireless e-mail, text messaging,
instant messaging, multi-media messaging and downloadable
content and applications. We continue to focus on improving the
customer experience through the deployment of advanced data
capable devices; through constantly enhancing the user interface
on these devices; and by making the provisioning of data
services on these devices as seamless as possible. This approach
continues to drive solid growth in the consumer data business.

The downloading of premium content, applications
and wireless browsing are strong growth areas for us. Customers
can easily purchase the latest ringtones, games, graphics and
premium applications directly from their wireless devices. In
2004, we launched streaming video through a downloadable
application that resides on our subscribers compatible
handsets. With this application, a wireless subscriber can view
and hear content such as news, sports and entertainment.
Entertainment industry partnerships are yielding a wealth of
content and segmented promotional opportunities. The deployment
of next generation devices, the improved customer browsing and
download experience and the expanded variety of content and
applications contribute to revenue growth.





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* FAMILYTALK® is a registered service
mark of Delaware Valley Cellular Corporation.


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Item 1.     Business


Text messaging remains a core contributor to our
overall consumer data revenue stream. Messaging growth is
extending into new areas as our base of subscribers is steadily
adopting enhanced messaging services such as instant messaging
and picture messaging. Simple pricing and the ongoing deployment
of advanced data devices, with easy-to-use digital camera
technology and instant messaging services through AOL or Yahoo,
have driven this growth.

Equipment Sales.We
sell a wide variety of handsets and personal computer wireless
data cards manufactured by various suppliers for use with our
voice and data services. We also sell accessories, such as
carrying cases, hands-free devices, batteries, battery chargers
and other items, to consumers, and we sell handsets and
accessories to agents and other third-party distributors for
resale. We provide postpaid contract customers substantial
equipment subsidies to initiate or upgrade service.



| |                    
| | -------------------
| | Enterprise Services

Corporate Wireless
Solutions.At the core of our
business-to-business (B2B) activities is the Business Markets
Group. The Business Markets Group is a nationally focused B2B
organization that gives business customers access to sales and
support professionals in the areas of sales, customer care,
ordering, product and offer development and solutions deployment
that are focused on specialized needs.

With our acquisition of AT&T Wireless, we
expanded our enterprise service offerings and broadened our base
of enterprise customers. One of the strengths of AT&T
Wireless was its enterprise business, which focused on large
corporate customers and governmental agencies.

We provide business customers a comprehensive set
of corporate wireless management solutions. These solutions are
designed to meet the needs of small-to mid-size businesses,
large corporations and government agencies and provide
business-specific rate plans, volume and equipment discounts and
wireless management tools for ordering, activation, support,
billing and reporting. We also offer a program that allows an
enterprises eligible employees to set up their own
wireless services, and their usage applies towards a
corporations discounted volume.

Enterprise Voice
Service.Our business customers can
take advantage of consumer postpaid voice plans, as well as a
number of business-specific devices and features, and pooled and
flat rate plans. We were the industry pioneer in offering pooled
rate plans that allow enterprises to share minutes and megabytes
across their employee base to optimize total cost of ownership.
We are also working on a portfolio of converged
wireless/wireline solutions in collaboration with our parent
companies, SBC and BellSouth.

Enterprise Data
Services.We provide wireless access
to corporate business applications for our customers who have
mobile field personnel. Our wireless solutions allow sales
managers to access corporate e-mail when away from the office
and technicians to solve problems and access corporate databases
from the field. To deliver these services, we offer a wide range
of wireless data devices for business needs. We support all
major operating system platforms  BlackBerry®,
Windows Mobile®, Palm® and Symbian® and a wide
range of devices  data-enabled handsets, integrated
personal digital assistants (PDAs) (such as BlackBerry
handhelds), personal computer data cards and special purpose
devices.*

We believe we are the industry leader in
corporate wireless email and messaging services. These solutions
provide wireless access to a wide range of email applications
for businesses and individuals who have a need for timely data
communications to maintain a competitive advantage or increased
personal productivity. We have the largest base of BlackBerry
subscribers and the largest share of activations in the world.
For enterprises looking for a cost-effective, easy to set-up,
highly flexible, real-time email that supports multiple devices,
we offer Xpress MailSM service, which can be deployed
without purchasing or installing additional

* Trademarks used herein are marks of their
respective owners.

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PART I




Item 1.     Business


hardware or software. We also have sales,
marketing and product development alliances with Microsoft and
IBM to assist enterprises with wirelessly enabling existing
email and messaging infrastructure.

We are a leader in providing wireless data
services for a focused set of vertical industries, targeting
specific business processes where real-time wireless
connectivity creates the most business value. For example, we
work with top property and casualty insurance carriers in
wirelessly enabling claim management business processes, assist
the nations largest food and beverage manufacturers with
real-time enablement of direct-store delivery and help
wirelessly enable field service for leading telecommunications,
utility and high-tech companies. In 2004, we significantly
expanded our comprehensive portfolio of network-compatible
special purpose devices, certified software solutions and system
integrator alliances. This approach helps increase
speed-to-market, reduce implementation risk and drive solid
growth in wireless data sales.

Mobitex.In October
2004, we sold Cingular Interactive, L.P. (Cingular Interactive),
a data messaging business utilizing the proprietary
Mobitex packet switched network. We retained
Cingular Interactives direct e-mail customers, as well as
several other major accounts. We have continued to offer Mobitex
data products pursuant to a reseller agreement with the buyer of
the Mobitex network.

Reseller Service.We
offer wholesale services to resellers, who purchase wireless
services from us for resale to their customers. As of
December 31, 2004 the number of customers served through
resellers represented approximately 5% of our total customers.

Equipment Sales.We
sell a wide variety of handsets, integrated PDAs and wireless PC
card modems manufactured by various suppliers for use with our
service. We also provide our customers and resellers with
subscriber identity modules (SIM) cards that store unique
customer account information such as the customers phone
number and identify customers to the network. When an activated
SIM card is inserted into a compatible GSM device, the device is
recognized by the network and becomes enabled for service. This
technology allows our customers to swap devices at their
convenience simply by moving the SIM card from one device to
another. It also allows customers to activate special purpose
devices that they can buy directly from equipment manufacturers
in addition to those that are available directly from us. We
have tested a broad portfolio of these special purpose
devices  from rugged PDAs and laptops to fleet
management and telemetry solutions  for network
compatibility, creating a solid foundation for our customers to
run their applications.

Our Network



| |         
| | --------
| | Licenses

We have access to licenses to provide cellular
and PCS wireless services, both voice and data. We provide both
analog and digital cellular services over the 850 megahertz
(MHz) band and digital PCS services over the 1900 MHz band.
We obtained access to spectrum through application lotteries,
mergers, acquisitions, exchanges, joint ventures, FCC auctions
and uncontested application grants of cellular licenses.



| |           
| | ----------
| | Technology

Cellular/ PCS Technology.In the U.S. wireless
telecommunications industry, there are two principal frequency
bands currently licensed by the FCC for transmitting two-way
voice and data signals  the 850 MHz band and the
1900 MHz band. The services provided over these two
frequency bands are commonly referred to as cellular and PCS,
respectively. PCS infrastructure is characterized by shorter
transmission distances and the need for closer spacing of cells
and towers than in a cellular network to

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Item 1.     Business


accommodate the different characteristics of the
PCS radio signals. However, PCS service does not differ
functionally to the user from digital cellular service.

First generation cellular systems initially
provided service solely by means of analog transmissions, which
the FCC will not require cellular radio licensees to offer after
2008. PCS systems have been constructed using only digital
technology and are not required by the FCC to offer analog
service. We offer analog and digital services in our cellular
markets and digital service in our PCS markets. Less than 1% of
our total usage based on minutes remains on our analog network.



| |                             
| | ----------------------------
| | 2G Cellular/ PCS Technology:

Currently the five largest U.S. wireless
communications providers use the following principal
2nd generation (2G) digital technologies:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | GSM used
    by us and T-Mobile. GSM is a digital wireless technology
    originally developed by the European operator community and
    later adopted by operators around the world to become the
    worlds most dominant wireless technology serving more than
    one billion users and accounting for 72% of the worlds
    wireless market. Hardware and software enhancements, referred to
    as General Packet Radio Service (GPRS), and Enhanced Data Rates
    for GSM Evolution (EDGE), allow higher-speed data communications.
| 
| | TDMA used by us in some markets pending
    customer migration to GSM/ GPRS/ EDGE.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| 
| | Code Division Multiple Access
    (CDMA) used by Verizon
    Wireless  (Verizon Wireless) and Sprint
    PCS  (Sprint PCS). CDMA is a technology originally
    developed by the military but adapted for commercial usage.                                                                                                                                                                                                                                                                                                                 
| 
| | integrated Digital Enhanced Network
    (iDEN®)  used by
    Nextel Communications Inc. (Nextel).                                                                                                                                                                                                                                                                                                                                                                                                                                            

TDMA, iDEN and GSM technologies work by dividing
a single radio frequency into multiple time slots so it can
support multiple calls. TDMA allows for up to three calls per
frequency (30 kHz of spectrum), iDEN allows up to six, and GSM
allows for up to eight (200 kHz of spectrum). CDMA technology
works by encoding individual conversations all on the same
frequency using different codes. This is analogous to being in a
room where every pair of speakers is having a conversation but
in a different language, and each is able to understand or
de-code only the other person speaking the same
language as them. These technologies are not currently
compatible or interchangeable with each other and require
separate types of wireless phones and network infrastructure.

Prior to 2002, our network consisted of both TDMA
(approximately 70%) and GSM (approximately 30%) technologies. In
late 2001, we began to overlay GSM/ GPRS throughout our TDMA
network and upgrade our data network to EDGE. EDGE, which
delivers 2-3 times higher data rates than GPRS technology and is
a 3G alternative, provides our customers with greater
connectivity and communications capabilities, including faster
speeds for accessing the wireless Internet. The GSM overlay was
completed in early 2004 and, at December 31, 2004, more
than 65% of our subscriber base was GSM-equipped and 79% of our
minutes were being carried by our GSM network.

The operation and performance of todays
wireless communication networks and handsets is generally
functionally identical across all digital technologies, and we
believe that most wireless customers are generally unaware of or
unconcerned with the particular technology of their chosen
wireless carrier. Therefore, we believe that our chosen
technology path is fully capable of supporting our business
growth strategies in this competitive market. Nevertheless, to
continue to advance and potentially differentiate versus the
competition, Cingular is actively deploying a more advanced 3G
technology.

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| |                            
| | ---------------------------
| | 3G Cellular/ PCS Technology

Although many advances are still underway for
enhanced capacity, performance and features in all of the
deployed technologies, Cingular, through its acquisition of
AT&T Wireless, operates its 3G cellular/ PCS system using
the UMTS standard in six cities (Dallas, San Francisco,
Detroit, Seattle, Phoenix and San Diego). UMTS, like GSM,
is the dominant world standard that has been accepted and
deployed in Europe and Asia. In addition to providing higher
data speeds, UMTS also supports voice, obviating the need to
separately augment voice infrastructures as network usage grows.
Our currently deployed 3G UMTS systems allow user average data
download speeds between 220-300 kilobits per second (Kbps),
providing the capability for a variety of services such as
streaming audio, video and simultaneous voice and data
applications. Much like our EDGE system, UMTS allows for packet
data enabling always on connectivity, which is
useful for receiving email when it arrives, versus the need to
set aside time for an email download, and allowing billing based
on the amount of data transferred, rather than the amount of
time a given device is connected.

In January 2005, Cingular field tested a higher
speed downlink component of UMTS called High Speed
Downlink Packet Access (HSDPA), which we intend to offer
in all of our UMTS markets. Our successful field trial of the
first phase of HSDPA, which provides up to 3.6 megabits per
second (Mbps) peak speed, demonstrated that HSDPA is the fastest
wide-area wireless high speed data solution available for
consumer access in the U.S. In the next two years, HSDPA
will have average throughput in the 400-700 Kbps range and
theoretical speeds of 14 Mbps. Cingular has awarded UMTS/
HSDPA contracts to three infrastructure vendors, Lucent
Technologies, Inc. (Lucent), Telefonaktiebolaget LM Ericsson
(Ericsson) and Siemens AG (Siemens), as well as its key device
vendors. We plan to deploy HSDPA in 15 to 20 markets in 2005 and
to provide UMTS/ HSDPA in most major metropolitan areas by the
end of 2006.



| |                    
| | -------------------
| | Network Integration

The acquisition of AT&T Wireless provided
Cingular with significantly more cell sites covering its
footprint than any other operator in the U.S. To ensure
that the additional cell sites result in improved coverage for
our customers, we have activated home-on-home
roaming between the previous AT&T Wireless and
Cingular systems allowing former AT&T Wireless customers to
roam onto Cingular networks where they previously did not have
coverage and similarly for Cingular customers. We intend to
maintain this improved coverage and to continue network
construction to add a large number of new cell sites to further
bolster our coverage advantage.

We also have opportunities to reduce the ongoing
cost of the business in areas where the former Cingular and
AT&T Wireless had comparable coverage, such as where they
are co-located on the same cell site. In these situations, we
intend to choose the best cell sites, and de-commission the
other cell sites. This process will occur during integration,
when both networks are combined into one common network. We
expect to have over 40% of the networks integrated by the end of
2005 and to finalize network integration by the end of 2006.



| |                                   
| | ----------------------------------
| | Spectrum Capacity and
    Coverage

We currently own licenses for spectrum in the
850 MHz and 1900 MHz bands. We own or lease cellular
or PCS licenses, or otherwise have access through joint ventures
and affiliates to cellular or PCS licenses, in all 100 of the
largest U.S. metropolitan areas, covering an aggregate of
290 million POPs, or approximately 98% of the
U.S. population, and operate in all of the top 100 markets
across the country. In addition, we have signed numerous roaming
agreements to ensure our customers can receive wireless

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service in virtually all areas in the
U.S. where cellular or PCS service is available. Our
cellular and PCS networks are substantially completed.

As shown in the table below, as of
December 31, 2004, approximately 98% of the
U.S. population was covered by an average spectrum depth
owned by us of over 50 MHz.

|              |  |          |     |          |  |            |              |          |  |  |     |   |  |  |           | 
|------------- |  | -------- | --- | -------- |  | ---------- | ------------ | -------- |  |  | --- | - |  |  | --------- | 
|              |  |          |     | Total    |  | Licensed % |              |         
|              |  | Licensed |     | Licensed |  | of Total   |              | Average 
|MSAs/ RSAs(1) |  | Markets  |     | POPs(2)  |  | U.S. POPs  |              | Spectrum
|              |  |          |     |          |  |            |              |         
|Top 10        |  |          | 10  |          |  |            | 74 million   |          |  |  | 100 | % |  |  | 62.5  MHz | 
|Top 50        |  |          | 50  |          |  |            | 147  million |          |  |  | 100 | % |  |  | 57.7  MHz | 
|Top 100       |  |          | 100 |          |  |            | 181  million |          |  |  | 100 | % |  |  | 56.4  MHz | 
|Total (734)   |  |          | 705 |          |  |            | 290  million |          |  |  | 98  | % |  |  | 50.8  MHz | 



---



|    |                                                              
|--- | -------------------------------------------------------------
|(1) | MSA  metropolitan service area;
    RSA  rural service area
|   
|(2) | Based on total 2004 estimated U.S. POPs of
    295 million   

We expect that the demand for our wireless
services will grow over the next several years as the demand for
both traditional wireless voice services and wireless data and
Internet services increases. We anticipate needing access to
additional spectrum in selected densely populated markets to
meet demand for existing services and throughout our network to
provide UMTS/ HSDPA. Some of this additional spectrum
requirement was met by the acquisition of AT&T Wireless and
the purchase of 1900 MHz spectrum from NextWave Telecom,
Inc. (NextWave).

In order to acquire access to additional
spectrum, we may participate in future FCC auctions and exchange
spectrum with, and lease or purchase spectrum licenses from,
other wireless carriers. On February 15, 2005, the
FCCs most recent auction of wireless spectrum concluded.
We participated in Auction 58 as a non-controlling equity
interest holder in Edge Mobile, LLC (Edge). Edge was the
successful bidder for, and following the filing and review of
the standard applications, expects to be granted, 21 licenses.
Edges total high bids for the licenses in which we will
have an indirect economic interest amounted to
$181 million. We are obligated to fund $174 million of
that amount. In December 2004, we contributed $31 million
in equity to Edge, which will be used to pay for a portion of
the licenses. Upon and subject to grant of these licenses by the
FCC, Edge will hold 20 MHz of PCS spectrum in Pittsburgh
and 10 MHz in Dayton, Denver, Kansas City, Minneapolis,
Norfolk, Oklahoma City, Richmond and other areas, all of which
are markets where we currently operate. We may also obtain
additional spectrum capacity through mergers and acquisitions,
joint ventures and alliances. See Regulatory
Environment and Factors Relating to Our
Business  If we fail to obtain access to additional
spectrum, we may not be able to expand the geographic reach of
Cingular-branded services, increase our customer base in areas
we currently serve or meet the anticipated demand for new
services.

Acquisitions, Dispositions, Joint Ventures and
Spectrum Exchanges



| |                          
| | -------------------------
| | AT&T Wireless Acquisition

In October 2004, we acquired AT&T Wireless,
which served nearly 22 million subscribers as of the
acquisition date. AT&T Wireless also held equity interests
in U.S. and international communications ventures, corporations
and partnerships. The acquisition created the largest wireless
communications company in the U.S. in terms of number of
subscribers.

The aggregate consideration paid to AT&T
Wireless shareholders to complete the AT&T Wireless
acquisition was approximately $41 billion in cash. Under
the merger agreement, each common shareholder

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of AT&T Wireless received $15 in cash per
common share and the AT&T Wireless preferred shareholders
received the then applicable liquidation preference of their
preferred shares. We received $36,024 million in equity
funding from SBC and BellSouth, in proportion to their
respective economic interests in us, to finance the acquisition.
The remaining portion of the purchase price was funded with
AT&T Wireless cash on hand.

The acquisition was structured as a merger of a
wholly owned subsidiary of the Manager with and into AT&T
Wireless, following which AT&T Wireless became a direct
wholly owned subsidiary of the Manager, and as the surviving
entity, AT&T Wireless retained all its assets and
liabilities. Following the merger, the Manager sold all its
interests in AT&T Wireless to us, and AT&T Wireless then
became our direct wholly owned subsidiary. Subsequently, a
significant portion of the operations, including assets,
liabilities and subsidiary entities, were transferred from us
and AT&T Wireless to a new limited liability company owned
by us and AT&T Wireless, Cingular Wireless II, LLC
(CWII). We and CWII executed supplemental indentures to AT&T
Wirelesss two indentures under which its Senior Notes are
outstanding to become co-obligated for all obligations
thereunder, and AT&T Wireless and CWII executed supplemental
indentures to our indenture, under which our Senior Notes are
outstanding, to become co-obligated for all obligations
thereunder; as a result, CWII, AT&T Wireless and we are
co-obligated on all of our and AT&T Wireless Senior
Notes.

The acquisition was advantageous to us for a
number of reasons:



|  |                                                                                                                                                                                            
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | AT&T Wireless fills in our licensed spectrum
    and network footprints by covering areas where Cingular did not
    have licenses or network infrastructure;                              
| 
| | AT&T Wireless adds depth to our licensed
    spectrum position in existing markets, enhancing our ability to
    offer future high-speed data services and reduce capital
    expenditures;
| 
| | AT&T Wireless customer base, which has
    a stronger business customer component than ours, adds a
    complementary customer mix to our customer base;                                  
| 
| | AT&T Wireless average revenue per user
    (ARPU) had historically been higher than the ARPU of our
    customers;                                                                        
| 
| | AT&T Wireless gives us added size and scale
    to compete more effectively in the industry and to procure more
    significant cost economies from vendors; and                           
| 
| | the acquisition will reduce our incollect roaming
    costs because of the broader post-acquisition footprint.                                                                             



| |                                       
| | --------------------------------------
| | Exchange of Properties with
    Triton

In July 2004, AT&T Wireless and Triton PCS
Holdings, Inc. (Triton) signed an agreement to terminate their
stockholders agreement, which terminated a market
exclusivity arrangement between the parties. As of the close of
the AT&T Wireless acquisition, we had wireless operations in
markets where AT&T Wireless was prohibited from operating
under the exclusivity arrangement. In exchange for the
termination of the stockholders agreement, AT&T
Wireless surrendered to Triton its equity interest in Triton.
The transaction closed in October 2004, immediately following
the acquisition of AT&T Wireless. With the consummation of
this agreement, we are able to provide continuing service in
areas where Triton currently has operations.

In September 2004, we, AT&T Wireless and
Triton signed an agreement providing for the acquisition by us
of Tritons wireless properties in Virginia in exchange for
AT&T Wireless properties in North Carolina, Puerto Rico and
the U.S. Virgin Islands and $176 million in cash. The
transfer of network properties

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closed in December 2004. Spectrum licenses are
being leased to the transferees pending FCC approval for
transfer. We expect to exchange licenses in the second quarter
of 2005.



| |                                     
| | ------------------------------------
| | Acquisition of NextWave
    Licenses

In August 2003, we executed an agreement with
NextWave and certain of its affiliates for the purchase of FCC
licenses for wireless spectrum in 34 markets for
$1.4 billion in cash. The transaction closed in April 2004.
The funding for this transaction consisted of $900 million
in existing cash on hand and $500 million from commercial
paper, which was repaid prior to December 31, 2004.



| |                                           
| | ------------------------------------------
| | Investment in Cincinnati Bell
    Wireless

In August 2004, amended in February 2005, we and
Cincinnati Bell, Inc. (Cincinnati Bell) signed an agreement that
allows us the right to put to Cincinnati Bell, any time on or
after January 31, 2006, AT&T Wireless 19.9%
equity interest in Cincinnati Bells wireless subsidiary,
Cincinnati Bell Wireless, LLC (CBW), for $83 million. The
agreement also allows Cincinnati Bell the right to call the
equity, any time before January 31, 2006, for
$85 million plus interest. On and after January 31,
2006, Cincinnati Bell has the right to call the equity for
$83 million plus interest.

Additionally, we, AT&T Wireless and
Cincinnati Bell amended the CBW operating agreement to remove
the exclusivity arrangement applicable to AT&T Wireless,
which allows us to provide continuing service in areas where CBW
currently has operations. We and Cincinnati Bell also amended
certain provisions of the CBW operating agreement to eliminate
the right of AT&T Wireless to appoint any members of the
member committee and limit the circumstances in which AT&T
Wireless will retain approval rights over the actions of CBW. By
its terms, the amendment was effective immediately following the
acquisition of AT&T Wireless.



| |                              
| | -----------------------------
| | Sale of Mobitex Data Business

Pursuant to an agreement signed in September
2004, we sold Cingular Interactive, a data messaging business
utilizing the proprietary Mobitex packet switched
network, to newly formed affiliates of Cerberus Capital
Management, L.P. (Buyer) for $45 million. We retained
Cingular Interactives direct e-mail customers, as well as
several other major accounts. We will continue our involvement
in this data business as a reseller of the Buyers
services. We retained the FCC licenses of Cingular Interactive
and leased them to the Buyer prior to FCC approval. The sale
transaction closed in October 2004, and the license transfer
closed in December 2004.



| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Termination of GSM Facilities, LLC
    (GSMF) Network Infrastructure Joint Venture

In 2001, we and T-Mobile exchanged FCC licenses
for, and subsequently formed our GSMF joint venture to share
infrastructure covering the metropolitan New York market known
as the New York Basic Trading Area (BTA) and most of
California and parts of Nevada known as the Los Angeles and
San Francisco Major Trading Areas (MTAs). In May 2004, we
and T-Mobile entered into an agreement to dissolve GSMF, sell to
T-Mobile certain spectrum licenses and other assets and exchange
certain other spectrum licenses since we determined that the
AT&T Wireless acquisition would provide us with spectrum and
network infrastructure in areas missing from our original
footprint. The first phase of these transactions closed in
January 2005.

Pursuant to the agreement, in January 2005 we
sold our ownership of the California/ Nevada MTA network assets
to T-Mobile for approximately $2.5 billion in cash. In
connection with the dissolution, we were required to contribute
an additional $200 million to the venture to equalize
capital accounts. The

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ownership of the New York BTA network assets
returned to T-Mobile. We retained the right to utilize the
California/ Nevada and New York networks during a four-year
transition period and have guaranteed to purchase a minimum
number of minutes over this term with a minimum purchase price
of $1.2 billion. We and T-Mobile retained all of our
respective customers in each market. We also sold 10 MHz of
spectrum to T-Mobile in each of the San Francisco,
Sacramento and Las Vegas BTAs for $180 million.

As agreed to as part of the original joint
venture agreement, we and T-Mobile were each to receive 50% of
the spectrum used in the operation of the joint venture
following its dissolution. Spectrum licenses were not
contributed to the joint venture upon its formation in 2001 but
rather were subject to a separate agreement governing their use.
In connection with the dissolution, we and T-Mobile are
contractually required to exchange certain spectrum licenses. We
expect the spectrum licenses to be exchanged on January 1,
2007. We will receive 10 MHz of spectrum in the New York
BTA in addition to the 10 MHz of spectrum we made available
for use by GSMF and 2.5 MHz of spectrum in the
Las Vegas, Nevada BTA, and T-Mobile will receive 5 MHz
of spectrum in each of nine BTAs in California, the largest of
which is San Diego. T-Mobile also has the option to
purchase an additional 10 MHz of spectrum in the Los
Angeles and San Diego BTAs from us at the end of two years
under certain circumstances.



| |                                                            
| | -----------------------------------------------------------
| | Sale of Eurotel Bratislava a.s.
    (Bratislava) Investment

In December 2004, Atlantic West B.V. (AWBV), a
50/50 joint venture between us and Verizon Communications,
Inc. (Verizon), sold its 49% interest in Bratislava to Slovak
Telecom a.s. for total cash proceeds of $315 million. Our
share of proceeds from the sale totaled $158 million. AWBV
distributed $280 million of the proceeds upon completion of
the sale, of which $140 million was distributed to us. AWBV
holds the remaining $35 million in cash, along with
$662 million in cash from a prior sale, which will be
distributed equally to us and Verizon upon completion of a
repatriation plan which qualifies under the American Jobs
Creation Act of 2004. For further information regarding the
American Jobs Creation Act of 2004, see Note 16 to our
consolidated financial statements included in Item 8,
Financial Statements and Supplementary Data.



| |                   
| | ------------------
| | Other Divestitures

As a condition to receiving regulatory approval
to acquire AT&T Wireless, we were required to dispose of
certain AT&T Wireless properties. In February 2005, we sold
MetroPCS, Inc. (MetroPCS) 10 MHz of former AT&T
Wireless spectrum in each of Dallas, Texas and Detroit, Michigan
for $230 million and sold Cellco Partnership, d/b/a Verizon
Wireless, 10 MHz of former AT&T Wireless spectrum in
Knoxville, Tennessee for $20 million. We have an agreement
pending with Alltel Corporation (Alltel), subject to regulatory
approval, to sell certain former AT&T Wireless assets and
properties, including licenses, network assets and subscribers,
that we currently operate in several markets, the largest of
which is Oklahoma City, Oklahoma. We also agreed, subject to
regulatory approval, to sell Alltel 20 MHz of spectrum and
the network assets formerly held by AT&T Wireless in
Wichita, Kansas, which we were not required to divest.

In addition, we signed agreements, subject to
regulatory approval, to dispose of certain other former AT&T
Wireless properties and assets in four smaller transactions
involving the sale of various combinations of spectrum, network
assets and subscriber accounts in rural regions of Arkansas,
Mississippi, Missouri and Texas. The Mississippi transaction
closed in March 2005.

In December 2004, we entered into an agreement to
sell our indirect interest in IDEA Cellular Ltd. (IDEA), a
cellular telecommunications company in India, to a joint venture
between STT

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Communications Ltd. and TM International Sdn, a
wholly-owned subsidiary of Telekom Malaysia Berhd. Under the
agreement, we will receive the U.S. dollar equivalent of
Rupees 9,108,628,130 based upon the exchange rate two business
days before the transaction closes. The U.S. dollar
equivalent was approximately $210 million as of
December 31, 2004. The transaction is subject to approval
by several regulatory agencies in India as well as the lenders
of IDEA.

Competition

There is substantial and increasing competition
in all aspects of the wireless communications industry. We
expect this to continue as consolidation in the industry
continues. We compete for customers based principally on our
reputation, network quality, customer service, price and service
offerings.

Our competitors are principally the other
national providers of cellular, PCS and other wireless
communications services  Verizon Wireless, Sprint
PCS, Nextel and T-Mobile, which together with us serve over 90%
of the U.S. wireless customers. Our competitors also
include regional carriers, such as U.S. Cellular and
Alltel, niche carriers, such as MetroPCS and Cricket
Communications Inc. and resellers. Some of the indirect
retailers who sell our services also sell our competitors
services. We rank first among the five national carriers in
terms of customers served as of December 31, 2004, and
second in 2004 revenues. Verizon Wireless ranks second in terms
of customers served and first in terms of revenues for 2004.

Regulatory policies favor robust competition in
wireless markets. Wireless Local Number Portability (WLNP),
which was implemented by the FCC late in 2003, has also
increased the level of competition in the industry. WLNP allows
subscribers to switch carriers without having to change their
telephone numbers.

Consolidation, alliances and business ventures
increase competition. Consolidation and the formation of
alliances and business ventures within the wireless
communications industry have occurred and we expect that this
trend will continue. Consolidation may create larger,
better-capitalized competitors with substantial financial,
technical, marketing, distribution and other resources to
compete with our product and service offerings. In addition,
global combinations of wireless carriers  such as the
joint venture between Sprint PCS and Virgin Group Ltd., Verizon
Wireless, which is a joint venture between Verizon
Communications and Vodafone Group Plc, and mergers and
acquisitions, such as the acquisition of T-Mobile by Deutsche
Telekom AG and proposed mergers of Sprint Corporation and
Nextel, and Alltel and Western Wireless Corporation
(Western)  may give some domestic competitors better
access to international technologies, marketing expertise and
strategies and diversified sources of capital. Other large,
national wireless carriers have affiliations with a number of
smaller, regional wireless carriers that offer wireless services
under the same national brand, thereby expanding the national
carriers perceived national scope.

Our ability to compete successfully will depend,
in part, on the quality of our network, customer service and
sales and distribution channels, as well as our marketing
efforts and our ability to anticipate and respond to various
competitive factors affecting the industry. These factors
include the introduction of new services and technologies,
changes in consumer preferences, demographic trends, economic
conditions, pricing strategies of competitors and our ability to
take advantage of our relationship with SBC and BellSouth. As a
result of competition, we have in the past and may in the future
be required to:



|  |                                                                                       
|- | --------------------------------------------------------------------------------------
| | increase our spending to retain customers;                                            
| 
| | restructure our service packages to include more
    compelling products and services;
| 
| | further upgrade our network infrastructure and
    the handsets we offer; and         

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|  |                                                                                                      
|- | -----------------------------------------------------------------------------------------------------
| | increase our advertising, promotional spending,
    commissions and other customer acquisition costs.

Verizon Wireless and Sprint PCS are deploying 3G
data-only network technology using the standard known as
Evolution  Data Only (EV-DO), which will provide
theoretical communication speeds slightly higher than those of
UMTS, though slightly slower than HSDPA. Verizons
announced roll-out plans are to cover two-thirds of its POPs by
the end of 2005; Sprint plans to launch 3G service later in
2005; and T-Mobile has not yet announced a 3G deployment
schedule beyond EDGE. Nextels plans are subject to its
planned merger with Sprint. We believe that we are
well-positioned to offer competitive 3G services and that our
UMTS/ HSDPA technology is superior to EV-DO in terms of speed
and applicability to voice as well as data telephony.
Furthermore, because our need to invest in additional
infrastructure to increase the capacity of our voice network can
be accomplished by the addition of UMTS/ HSDPA equipment, we
believe we are better positioned with our choice for 3G
technology than users of EV-DO technology, who will still have
to invest in additional voice communications infrastructure to
increase the capacity of their voice networks.

See Factors Relating to Our
Business  Substantial competition in all aspects of
our business could continue to cause reduced pricing and have
adverse effects on our profit margins.

Business Strategies

We intend to be the pre-eminent wireless
communication company in the U.S. Our business strategies
to achieve that goal are to:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Build the Best
    Network.We believe that one of the
    most significant factors that customers consider when making
    decisions on wireless service is network quality. To that end,
    we plan to continually improve and expand our network. We are
    currently in the process of integrating the Cingular and
    AT&T Wireless networks under a plan that is designed to
    achieve network quality and coverage performance that exceed
    that of either of the former networks. We will accelerate the
    build out of the network to improve coverage in suburban and
    neighborhood areas and strengthen the in-building penetration in
    urban areas. We will significantly expand the capacity and
    coverage of our network in California and Nevada in order to
    facilitate the transition of customers that continue to be
    served by the network assets that we recently sold to T-Mobile
    as well as to accommodate future growth in those markets. In
    concert with the network integration work, we will deploy UMTS/
    HSDPA in major markets across the country. This technology will
    increase the capacity of our network to carry voice traffic and
    provide data speeds that exceed those of the commercial
    offerings provided by other competitive carriers today and will
    allow us to offer a host of new broadband data applications. We
    will also work with our rural roaming partners to improve and
    expand coverage outside of our footprint and assist them in
    providing consistent products and services to our customers that
    roam across their networks.
| 
| | Deliver Exceptional Customer
    Service.Another key focus area for us
    is delivering best-in-class customer care. We are implementing
    policies and procedures at every point of contact with our
    customers to improve the customer experience. We are deploying
    customer management and call routing technologies in our call
    centers to improve the accessibility and efficiency of our
    customer care representatives. We are equipping our customers
    with self-service tools to be able to access account information
    directly via their handsets, the Internet or integrated voice
    response systems. We continue to develop and implement
    initiatives that make it easier for customers to order or change
    products or features, upgrade or repair handsets and inquire
    about or pay their bills. Our acquisition of AT&T Wireless
    has given us not only the ability to choose and implement the
    best practices of the two constituent companies but also the
    challenge of efficiently integrating and rationalizing the
    facilities and systems used by the companies in providing
    customer care. One of the major contacts with customers is                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | through the billing process. A significant task
    in integrating AT&T Wireless operations into ours is
    integrating and streamlining the billing systems, which we
    anticipate will be complete by the end of 2006. These efforts
    will produce substantial operational efficiencies for us. We
    believe that by offering an exceptional customer experience to
    our customers, they will choose to remain with us and be
    instrumental in attracting new customers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| 
| | Create an Unmatched Distribution
    Network.The acquisition of AT&T
    Wireless has resulted in a significant increase in our number of
    distribution channels. We will rationalize both our direct and
    indirect distribution channels over the next few years. During
    this integration process, we will seek to create an optimized
    mix of direct and indirect sales channels that will balance the
    cost of customer acquisition with the ability to be in high
    traffic locations that drive higher sales volumes. Furthermore,
    we will expand sales locations opportunistically in areas that
    have higher growth prospects and scale back distribution in
    heavily penetrated areas. We will continue to drive our
    distribution capabilities deeper into emerging channels like our
    e-store and tele-sales operations. Our goal is to be a world
    class retailer and to meet our customers where they want to
    shop. By creating an unmatched distribution network, we believe
    that we will be able to attract an increasing number of new
    consumers.                                                                                                                                                                                                                                                                                                                                                                                   
| 
| | Offer Compelling Products and
    Services.We believe that it is
    increasingly important to create products and services that are
    attractive to customers across a broad spectrum of market
    segments. This includes developing compelling devices and
    features, as well as pricing plans, that are differentiated from
    our competitors. In many cases, we intend to transition
    customers of AT&T Wireless to Cingulars plans and
    handheld equipment. We will continue to pursue collaborative
    relationships with our handset vendors to develop and market
    devices that are equipped with the latest technology and
    functionality that consumers demand. A selection of these
    devices will be offered on an exclusive basis. Additionally, we
    will continue to improve and expand the ringtones, games and
    other content that our customers can access via their handsets.
    We will continue to offer pricing plans that offer a compelling
    value to consumers. Our ROLLOVER® rate plans are an example
    of how we provide a compelling value to customers by allowing
    them to keep their unused minutes for up to one year.
    Additionally, we will continue to develop products and services
    designed to appeal specifically to certain market segments like
    pre-paid hybrid plans, international calling plans, push-to-talk
    service and handsets and integrated business products with our
    parent companies.
| 
| | Drive Financial Results by Quickly and
    Efficiently Integrating AT&T Wireless into Cingular
    Wireless.We will increase our
    financial performance by quickly and efficiently integrating
    AT&T Wireless business and operations into ours. We
    expect to achieve significant cost savings by eliminating
    redundant resources and facilities and more effectively and
    efficiently utilizing the best business practices of both
    companies to drive customer growth and revenues. We saw customer
    growth and reduced churn, but also reduced ARPU and operating
    margins, during the fourth quarter of 2004. While the causes for
    this are not solely related to our acquisition of AT&T
    Wireless, we believe that there are opportunities to achieve
    revenue and cost synergies and continued customer growth and
    reduced churn through successful and timely integration efforts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Marketing

Our marketing strategy is focused on promoting
the Cingular brand. Key marketing communication messages will
also articulate and build on our business strategies of building
the best network, delivering great customer service, creating an
unmatched sales and distribution network and offering compelling
products and services. Additionally, we will communicate and
leverage, through cross-marketing, the strengths of our parents,
SBC and BellSouth.

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Our advertising utilizes multiple media forms,
including television, radio, newspaper, outdoor, Internet and
point of sale. Advertising objectives include:



|  |                                                                                                                                                           
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | Increasing new customer growth by attracting
    prospective customers to our sales channel best suited to the
    customers needs;                      
| 
| | Aiding customer retention by reinforcing the
    value of an existing relationship with Cingular;                                                         
| 
| | Increasing existing customer usage of additional
    services (cross-sell/up-sell opportunities) and added-value
    features; and                        
| 
| | Encouraging new and existing customers to combine
    (bundle) our wireless services with SBCs and
    BellSouths wireline, Internet and video services.

Immediately following the acquisition of AT&T
Wireless we repositioned the brand with RAISING THE
BARSM. Under that umbrella, we also branded our
network  the largest digital voice and data network
in America  as the ALLOVERSM network,
utilizing the slogan MORE BARS IN MORE PLACESSM. Both
elements dramatize our network and provide a compelling reason
for potential customers  including competitors
customers  to choose Cingular as their wireless
provider. Our initial research indicates that key brand
attributes and perceptions have been positively affected by the
communication. We will continue to leverage our brand identity
by presenting more compelling and market specific reasons to
choose Cingular.

Our marketing strategy is to aggressively sell
our national voice services through our Cingular Nation®
rate plans, while still providing regional plans for customers
who prefer them. The plans differ in terms of the geographic
areas that are included as the local calling areas, with Nation
plans offering unlimited free roaming and long-distance, as well
as unlimited mobile-to-mobile calling among our 49 million
customers. We offer FAMILYTALK® shared minute plans,
allowing customers to share their minutes while taking advantage
of the size of our customer base with free calling to all
Cingular subscribers. The costs and terms of each plan depend on
the customers location and the plan selected. We also
provide targeted plans for specific customer segments such as
prepaid service, marketed under the GOPHONE® and KIC®
brands. A host of plans targeted to various segments of the
business-to-business market are also available.

Our marketing plans also address the growing
communications needs of our existing customers, thereby
increasing customer retention. We target specific customer
segments with tailored services and offer them a range of
high-quality handsets and enhanced features, including wireless
data services, additional wireless phones, accessories and new
products. We also offer the convenience of many added-value
features, such as our *BAL# and *MIN# codes, which allow
customers to check their balances and minutes used without
having to call customer service. Many new handsets are also
being provisioned with this service built in to the phone.

Data services are becoming an increased focus of
our business. Instant messaging through AOL and Yahoo, Internet
access, text messaging/short messaging services, picture and
video messaging and gaming are all now integral parts of the
wireless industry. We are focused on this category as a
high-growth area with competitive and fair rates to support
customer needs. In addition, graphics, MP3/ Supertones and
polyphonic ringtones continue to show strong growth, as
customers look to customize their wireless devices. We serve
business customers with a robust line-up of business data
services from corporate messaging to customized wireless
application access. We market our business data offerings to
larger organizations, as well as small and medium-sized
businesses.

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Sales & Distribution

Our sales and distribution strategy seeks to
tailor the mix of direct, indirect and resale distribution
channels to match customer shopping preferences to increase
customer growth and satisfaction while reducing customer
acquisition and retention costs. As of December 31, 2004,
we had over 260,000 distribution points of presence.
These included approximately 2,600 company-owned stores and
kiosks, 16,000 authorized agent locations, more than 5,500
national retail points of presence and over 240,000 national
retail prepaid locations. In addition, we have access to the
distribution channels of SBC and BellSouth as both sales
channels and bundlers of our wireless services with their
wireline product offerings. SBCs Total
ConnectionsSM and BellSouth AnswersSM
product offerings combine local phone service and features, long
distance, Internet access and Cingular Wireless services, with
the customer receiving one consolidated bill. In addition to
these traditional channels, we will continue to utilize and
expand other channels, such as the Internet and telemarketing.

Customer Care and Satisfaction

The cost of adding new customers is one of the
most significant cost elements in the wireless industry.
Therefore, satisfying and retaining existing customers are
critical to reducing churn and improving the financial
performance of wireless operators. The goal of our customer
care, retention and satisfaction programs is to ensure customer
convenience and ease of use and to cultivate long-term
relationships with our customers. We offer our customers a full
range of options for making requests and inquiries to maximize
convenience. We also offer complete customer care during
extended business hours and emergency service after business
hours, as well as a number of other services designed to enhance
our relationship with our customers.

In 2005, we will continue to pursue opportunities
to enhance customer satisfaction. Our key initiatives include
continued expansion of our knowledge base tools, improved call
routing initiatives and deployment of a contact management tool.
We use a combination of internal and outsourced staffing for
customer care and will transition onto a common customer care
platform over time.

Environmental Matters

We are subject to various federal, state and
local environmental protection and health and safety laws and
regulations, and we incur costs to comply with those laws.
Environmental laws hold current or previous owners or operators
of businesses and real property potentially liable for
contamination on that property, even if they did not know of and
were not responsible for the contamination. Environmental laws
may also impose liability on any person who disposes or arranges
for the disposal of hazardous substances for contamination at
the disposal site, regardless of whether the disposal site is
owned or operated by such person. Although we do not currently
anticipate that the costs of complying with environmental laws,
including costs for remediating contaminated properties, if any,
will materially adversely affect us, we cannot ensure that we
will not incur material costs or liabilities in the future due
to the discovery of new facts or conditions, the occurrence of
new releases of hazardous materials or a change in environmental
laws.

Employees

As of December 31, 2004, we had
approximately 70,300 employees. Approximately 22,000 of our
employees are represented by the Communications Workers of
America (CWA), with contracts expiring on various dates until
February 2008. The contract that expired in February 2005,
covering approximately 5,500 employees, has been renegotiated
and is subject to ratification by such employees. Most of the

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contracts contain no-strike clauses. In most
areas of the country and with most job titles, we are
contractually required to maintain a position of neutrality and
to allow card-check procedures with respect to unionization, and
we will support the determination of our employees. In those
areas where our employees are unionized, we have in place
contracts that we believe provide us with the flexibility to run
our business in an increasingly competitive environment. We
consider our relationship with our employees and the CWA to be
very good.

Intellectual Property

We own the rights to the
Cingular® brand name. We rely on a combination
of copyright, patent, trademark, trade secret and other
intellectual property rights, together with confidentiality
and/or license agreements with our employees, customers and
others to protect our proprietary rights. Our trademarks cover
our brand name and icon and names of our service and product
offerings and have a duration of 10 years with renewal
provisions. We also license trademarks for various products and
services from either SBC or BellSouth for varying terms. For
more information on licenses granted by our member companies to
us and licenses we grant to them, see Item 13,
Certain Relationships and Related Transactions. Our
FCC licenses are discussed under Regulatory
Environment.

Regulatory Environment

The FCC regulates the licensing, construction,
operation, acquisition and transfer of wireless systems in the
U.S. pursuant to the Communications Act of 1934
(Communications Act) and its associated rules, regulations and
policies.

To obtain the authority to have the exclusive use
of radio frequency spectrum in an area within the U.S., wireless
communications systems must be licensed by the FCC to operate
the wireless network and wireless devices in assigned spectrum
segments and must comply with the rules and policies governing
the use of the spectrum as adopted by the FCC. These rules and
policies, among other things, (1) regulate our ability to
acquire and hold radio spectrum licenses or to lease spectrum,
(2) impose technical obligations on the operation of our
network, (3) impose requirements on the ways we provide
service to and communicate with our customers, (4) regulate
the interconnection of our network with the networks of other
carriers, (5) obligate us to permit resale of our services
by resellers, if we offer resale opportunities, and to serve
roaming customers of other wireless carriers and (6) impose
a variety of fees and charges on our business that are used to
finance numerous regulatory programs and a substantial part of
the FCCs budget.

Licenses are issued for only a fixed period of
time, typically 10 years. Consequently, we must
periodically seek renewal of those licenses. The FCC will award
a renewal expectancy to a wireless licensee that has provided
substantial service during its past license term and has
substantially complied with applicable FCC rules and policies
and the Communications Act. The FCC has routinely renewed
wireless licenses in the past. However, the Communications Act
provides that licenses may be revoked for cause and license
renewal applications denied if the FCC determines that a renewal
would not serve the public interest. Violations of FCC rules may
also result in monetary penalties or other sanctions. FCC rules
provide that applications competing with a license renewal
application may be considered in comparative hearings and
establish the qualifications for competing applications and the
standards to be applied in hearings.

Wireless systems are subject to Federal Aviation
Administration and FCC regulations governing the location,
lighting and construction of transmitter towers and antennas and
are subject to regulation under federal environmental laws and
the FCCs environmental regulations, including limits on
radio frequency

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radiation from wireless handsets and towers.
Zoning and land use regulations, including compliance with
historic preservation requirements, also apply to tower siting
and construction activities.

Two-way Voice and Data
Services.We hold geographic service
area licenses granted by the FCC to provide cellular and PCS
services. A cellular system operates on one of two 25 MHz
frequency blocks in the 850 MHz band that the FCC allocates
for cellular radio service. Cellular systems principally are
used for two-way mobile voice applications, although they may be
used for data applications and fixed wireless services as well.
Cellular licenses are issued for either MSA or RSAs, two in each
area.

A broadband PCS system operates under licenses
issued in the 1900 MHz band. PCS systems generally are used
for two-way voice applications, although they may carry two-way
data communications and fixed wireless services as well. For the
purpose of awarding PCS licenses, the FCC has divided the
U.S. into 51 large regions called major trading areas, or
MTAs, which are comprised of 493 smaller regions
called basic trading areas, or BTAs. The FCC awarded
two PCS licenses for each major trading area, known as the
A and B blocks, and four licenses
for each BTA known as the C, D,
E and F blocks. Thus, generally,
six PCS licenses are authorized in each area, together with two
cellular licenses. The two MTA licenses authorize the use of
30 MHz of PCS spectrum. One of the basic trading area
licenses is for 30 MHz of spectrum (the
C block), and the other three are for
10 MHz each. The FCC permits a licensee to split its
license and assign a portion, on either a geographic or
frequency basis or both, to another party or parties.

We must satisfy a range of FCC-specified coverage
requirements. For example, a cellular licensee was permitted
five years following the grant of its license to provide service
to its desired coverage area. The area it served with specified
minimum signal strength became its licensed service area.
Failure to provide that coverage to the boundaries of its
initially licensed service area resulted in reduction of the
relevant license area by the FCC. All 30 MHz PCS licensees
must construct facilities that offer coverage to one-third of
the population of the service area within five years of the
original license grants and to two-thirds of the population
within 10 years. All 15 MHz and 10 MHz PCS
licensees must construct facilities that offer coverage to
one-fourth of the population of the licensed area or make
a showing of substantial service in their license area
within five years of the original license grants. A licensee
that fails to meet the coverage requirements may be subject to
forfeiture of its license.

We use common carrier point-to-point microwave
facilities and dedicated facilities leased from communications
companies or other common carriers to connect our wireless cell
sites and to link them to the main switching office. The FCC
licenses point-to-point microwave facilities separately and they
are subject to regulation as to technical parameters and
service. Microwave licenses must also be renewed every
10 years.

Transfers and Assignments of Wireless
Licenses.The Communications Act and
the FCC rules require the FCCs prior approval of the
assignment or transfer of control of a license for a wireless
system. Before we can complete any such purchase or sale, we
must file appropriate applications with the FCC, and the public
is by law granted a period of time, typically 30 days for
major acquisitions, to oppose or comment on them. In addition,
the FCC has established transfer disclosure requirements that
require licensees who assign or transfer control of a license
acquired through an auction within the first three years of
their license terms to file associated sale contracts, option
agreements, management agreements or other documents disclosing
the total consideration that the licensee would receive in
return for the transfer or assignment of its license.
Non-controlling minority interests in an entity that holds an
FCC license generally may be bought or sold without FCC
approval. However, notification and expiration or earlier
termination of the applicable waiting period under
Section 7A of the Clayton Act by either the

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U.S. Federal Trade Commission or the
U.S. Department of Justice may be required, as well as
notification of state or local regulatory authorities having
competent jurisdiction, if we sell or acquire wireless systems.

Foreign Ownership.Under existing law, no more than 20% of an FCC licensees
capital stock may be owned, directly or indirectly, or voted by
non-U.S. citizens or their representatives, by a foreign
government or its representatives or by a foreign corporation.
If an FCC licensee is controlled by another entity, as is the
case with our ownership structure, up to 25% of that
entitys capital stock may be owned or voted by
non-U.S. citizens or their representatives, by a foreign
government or its representatives or by a foreign corporation.

Foreign ownership above the 25% level may be
allowed should the FCC find such higher levels not inconsistent
with the public interest. The FCC has ruled that higher levels
of foreign ownership, even up to 100%, are presumptively
consistent with the public interest with respect to investors
from certain nations, which are countries that are signatories
to the World Trade Organization Agreement on Basic
Telecommunications Services. However, the FCC, in adopting that
strong presumption, did note that the possibility exists that
entry by a foreign carrier into the U.S. telecommunications
market could be so detrimental as to require the imposition of
conditions on entry by such a carrier or even a denial of entry.
In addition, the FCC stated it would accord deference to
legitimate national security, law enforcement, foreign policy
and trade concerns raised by other federal agencies as part of
the FCCs analysis of whether to grant a particular
authorization. The FCC has done that in certain cases where the
U.S. Department of Justice and the U.S. Federal Bureau
of Investigation have raised concerns, requiring the carrier to
configure its network(s) to be capable of complying with lawful
U.S. process and to make available in the U.S. certain
call and customer data. Foreign ownership by entities from
countries other than World Trade Organization member countries
must meet a more stringent standard, and there is no assurance
that the FCC would find a grant of such an application to be in
the public interest. If our foreign ownership were to exceed the
permitted level (through foreign ownership of our owners, their
transfers of ownership in us or issuances of Class A common
stock by our manager), the FCC could revoke our FCC licenses,
although we could seek a declaratory ruling from the FCC
allowing the foreign ownership or take other actions to reduce
our foreign ownership percentage in order to avoid the loss of
our licenses. We have no knowledge of any present foreign
ownership that exceeds these limitations.

Spectrum Acquisitions and
Leasing.Two of the ways by which we
can attempt to meet our needs for additional spectrum are by
acquiring spectrum licenses held by others or by accessing new
spectrum being auctioned and licensed by the FCC. The
Communications Act requires the FCC to award new licenses for
commercial wireless services to applicants through a competitive
bidding process. Therefore, if we need additional spectrum, we
plan to acquire the spectrum, indirectly through joint
arrangements, or directly in an auction for any new licenses
that may become available or by purchasing existing licensed
facilities and incorporating them into our system, provided that
we are permitted to do so under FCC rules.

The FCC has announced that it will auction
spectrum in the 700 MHz band. There are numerous television
operators that currently occupy UHF television channels 52-69 in
this band. Although these stations have been awarded a second
channel to establish digital service, they also have the right
to continue operation on the current channel through at least
2006 and potentially longer if various conditions are not met.
Absent adoption of new federal legislation or rules that lead to
clearing of the 700 MHz band earlier than
current law requires, or the development of band-clearing
mechanisms by these operators for relocation, this spectrum
would be of limited use in the short-term for wireless services.

The FCCs spectrum leasing rules permit
license holders to lease the use of their spectrum to others and
provide that such holders can meet their network system build
requirements through the facilities construction and operating
activities of their lessees. The FCC has structured its rules
such that it has

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minimal involvement in leasing activities. The
FCC does limit the ability of a designated entity to lease
spectrum to a non-designated entity that has an equity position
in the designated entity, and it has stated that it intends to
scrutinize leasing activities by designated entities.
Nevertheless, we view spectrum leasing as an attractive
alternative to license acquisition in areas where we are
spectrum constrained.

See Our Network  Spectrum
Capacity and Coverage for information on results of
Auction 58.

Rates and Services.The FCC does not specify the rates we may charge for our
services nor does it require us to file tariffs for our
U.S. wireless operations. However, the Communications Act
states that an entity, such as us, that provides commercial
mobile radio services is a common carrier and is thus subject to
the requirements of the Communications Act that it not charge
unjust or unreasonable rates nor engage in unreasonable
discrimination. The FCC may invoke these provisions to regulate
the rates and related terms and conditions under which we
provide service. In addition, the Communications Act defines a
commercial mobile radio service provider as a common carrier,
which makes it subject to a number of other regulatory
requirements in its dealings with other carriers and customers.
The following requirements impose restrictions on our business
and increase our costs as well as the costs of other wireless
carriers.

Number Pooling.The
FCC has adopted rules regulating the use of telephone numbers by
wireless and other providers as part of an effort to achieve
more efficient number utilization. Wireless carriers were
required to participate in this number pooling,
beginning in November 2002.

Recent Regulatory
Developments.The FCC eliminated the
rules limiting the amount of spectrum a wireless carrier can own
in a market, effective January 1, 2003. As yet, it has not
replaced these spectrum limits with published rules or
guidelines setting forth how the FCC will review carriers
spectrum aggregations. The FCC also eliminated the prohibition
on ownership of both cellular licenses by a single-entity,
except it will review on a case-by-case basis applications for
authority to own both cellular licenses in a rural area. Certain
acquisitions of spectrum would remain subject to approval of the
U.S. Department of Justice.

The FCC has imposed rules requiring carriers to
provide emergency 911 services, including enhanced 911 services
that provide to local public safety dispatch agencies the
callers communications number and approximate location.
Providers are required to transmit the geographic coordinates of
the customers location within accuracy parameters set
forth by the FCC, either by means of network-based or
handset-based technologies. Providers may not demand cost
recovery as a condition of doing so, although they are permitted
to negotiate cost recovery if it is not mandated by the state or
local governments. Because of the delayed availability of vendor
equipment that could reasonably be relied upon to comply with
the FCCs location accuracy rules, we and other wireless
carriers negotiated settlement arrangements with the FCC that
modified compliance standards and deadlines.

The FCC has established federal universal service
requirements that affect commercial mobile radio service
operators. Under the FCCs rules, commercial mobile radio
service providers are potentially eligible to receive universal
service subsidies for the first time; however, they are also
required to contribute to the federal universal service fund and
may be required to contribute to state universal service funds.
Contributions into the federal fund are based on the interstate
and international revenues generated by the properties owned by
a commercial mobile radio service provider. For 2004, we had
payment obligations into the federal universal service fund of
approximately $415 million. Because the amount that we are
required to pay into the fund is based on revenues generated by
our properties, we anticipate that this amount should continue
to increase over time. We recover most of this expense from our
customers. Many states also are moving forward to develop state
universal service fund programs. A number of these state funds
require contributions, varying greatly from state to state, from
commercial mobile radio service providers. If these programs
expand they will impose a correspondingly growing expense on our
business.

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As mentioned, commercial mobile radio service
providers are now eligible to receive universal service
subsidies if federal and state conditions are met. We pursue
this funding in states where the corresponding regulatory
burdens do not exceed the benefits of the subsidies.

In November 2003, the FCCs rules on
wireless local number portability became operative, enabling
wireless customers to keep their wireless number when switching
to another carrier. These rules have increased competition,
costs and customer churn across the industry.

In October 2003, the Federal Trade
Commissions (FTC) National Do Not Call Registry
became operative. Consumers are allowed to register their
telephone numbers with the FTC which maintains the National Do
Not Call Registry. Once a telephone number is on the registry
for 30 days, commercial entities, including telemarketers,
are prohibited from placing unsolicited telemarketing calls to
the number unless they have an established business relationship
with a consumer at that number. The FCC has jurisdiction over
such telemarketing calls by common carriers. The FCC is
investigating approximately 1,000 complaints against AT&T
Wireless.

The FCC has adopted rules requiring wireless
providers to provide functions to facilitate electronic
surveillance by law enforcement officials pursuant to the
Communications Assistance for Law Enforcement Act of 1995. These
obligations are likely to result in significant costs to us for
the purchase, installation and maintenance of network software
and other equipment needed.

The Communications Act and the FCCs rules
grant various rights and impose various obligations on
commercial mobile radio service providers when they interconnect
with the facilities of local exchange carriers. Generally,
commercial mobile radio service providers are entitled to
reciprocal compensation in connection with the
termination of wireline-originated local traffic, in which they
are entitled to collect the same charges for terminating
wireline-to-wireless local traffic on their system similar to
the charges that the local exchange carriers levy for
terminating wireless-to-wireline local calls. Interconnection
agreements are typically negotiated by carriers, but in the
event of a dispute, state public utility commissions, courts and
the FCC all have a role in enforcing the interconnection
provisions of the Communications Act. Although we have
interconnection agreements in place with the major local
exchange carriers in virtually all of our service areas, those
agreements are subject to modification, expiration or
termination in accordance with their terms. Moreover, we are
negotiating and must continue to negotiate interconnection
agreements with a number of independent telephone companies in
our service areas. Until these agreements are concluded, we must
accrue for contractual liabilities associated with the resulting
unpaid invoices from those companies. Additionally, as we expand
our coverage footprint, we will be required to negotiate
interconnection arrangements with other wireline carriers.

The FCC has reallocated 30 MHz of spectrum
from the 2 GHz Mobile Satellite Service or MSS for fixed
and mobile services. The FCC has combined part of the
1990-2000 MHz portion of that spectrum, which is adjacent
to the upper limit of the base-to-mobile portion of the PCS C
Block, with part of the currently unlicensed PCS spectrum at
1910-1920 MHz, which is adjacent to the upper limit of the
mobile-to-base portion of the PCS C Block, to create
a new PCS G Block. The FCC plans to grant the PCS
G block (1910-1915 MHz paired with
1990-1995 MHz) to Nextel in return for it relinquishing
certain of its spectrum in the 700/800/900 MHz bands to
alleviate public safety interference concerns. The FCC has also
proposed the creation of a PCS H Block at
1915-1920 MHz paired with 1995-2000 MHz for new and
innovative licensed mobile services. This spectrum block likely
will be licensed to wireless service providers by auction in the
future once technical issues are resolved by the FCC.

The FCC has also decided to allow MSS licensees
in three separate MSS bands to add an ancillary terrestrial
component to their existing or proposed mobile satellite
offering. The FCC has conditioned the deployment of the
terrestrial offering such that it has to be integrated with the
satellite offering of a

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licensee. In addition, satellites must be
launched and operational before the terrestrial service can be
initiated. It is likely that the satellite proponents will ask
the FCC to minimize or eliminate these conditions which could
permit them to forego their satellite service in favor of
deploying a terrestrial network and offering service in direct
competition with our cellular and PCS services.

State Regulation and Local
Approvals.With the rapid growth and
penetration of wireless services has come a commensurate surge
of interest on the part of state legislatures and state public
utility commissions and local governmental authorities in
regulating our industry. This interest has taken the form of
efforts to regulate customer billing, termination of service
arrangements, advertising, filing of informational
tariffs, certification of operation, use of handsets when
driving, service quality, sales practices, and many other areas.
We anticipate that this trend will continue. It will require us
to devote legal and other resources to working with the states
to respond to their concerns while minimizing any new regulation
that could increase our costs of doing business.

While the Communications Act generally preempts
state and local governments from regulating entry of, or the
rates charged by, wireless carriers, it also permits a state to
petition the FCC to allow it to impose commercial mobile radio
service rate regulation when market conditions fail adequately
to protect customers and such service is a replacement for a
substantial portion of the telephone wireline exchange service
within a state. No state currently has such a petition on file.
In addition, the Communications Act does not expressly preempt
the states from regulating the terms and conditions
of wireless service.

Several states have invoked this terms and
conditions authority to impose or propose various consumer
protection regulations on the wireless industry.
Californias recently enacted rules are potentially quite
costly. States also may impose their own universal service
support requirements on wireless and other communications
carriers, similar to the requirements that have been established
by the FCC. At the local level, wireless facilities typically
are subject to zoning and land use regulation. Neither local nor
state governments may categorically prohibit the construction of
wireless facilities in any community or take actions, such as
indefinite moratoria, which have the effect of prohibiting
construction. Nonetheless, securing state and local government
approvals for new tower sites has been and is likely to continue
to be difficult, lengthy and costly.

In addition, state commissions continue their
efforts to conserve telephone numbering resources. These efforts
may impact wireless service providers disproportionately by
imposing additional costs or limiting access to numbering
resources. Examples of state conservation methods include number
pooling, number rationing and code sharing. In many non-top 100
markets, the supply of new numbers is inadequate to meet growing
customer demands, but states have been and continue to be
reluctant to deploy new area codes.

Further, states have become more active in
imposing new taxes on wireless carriers, such as gross receipts
taxes, and fees for items such as the use of public rights of
way. These taxes and fees are generally passed through to our
customers and result in higher costs to our customers.

Risk Factors



| |                                     
| | ------------------------------------
| | Factors Relating to Our
    Business

Substantial competition in all aspects of our
business could continue to cause reduced pricing and have
adverse effects on our profit margins.There is substantial competition in all aspects of the wireless
communications industry. Our competitors are principally the
four other national carriers doing business as Verizon Wireless,
Sprint PCS, Nextel and T-Mobile and a large number of regional
providers of cellular, PCS and other wireless communications
services, resellers and wireline telephone service providers. We

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expect robust competition to continue in the wake
of our acquisition of AT&T Wireless and the announced
mergers of Sprint and Nextel and Alltel and Western. In
acquiring AT&T Wireless, we became the largest wireless
carrier in terms of numbers of customers. We believe that there
will be competitive responses from other wireless service
providers in terms of additional mergers, joint ventures to
share or reduce costs and more robust competitive service and
product offerings at lower prices. Competition continues to
intensify as wireless carriers include more equipment discounts
and bundled services in their offerings, including more minutes
and free long distance and roaming services. This contributes to
downward pressure on revenue growth and profit margins, and we
expect this trend to continue.

FCC regulations and government policy in general
promote robust competition, and new rules or changes to existing
rules, such as rules providing for spectrum leasing and
requiring wireless local number portability for customers
changing wireless local carriers, could increase this trend and
result in higher churn and lower margins.

Many of our competitors have substantial
financial, technical, marketing, distribution and other
resources. As a response to the intensifying competition, the
need for cost reduction and the requirements for additional
radio spectrum, we believe that the industry will continue to
consolidate. This may produce larger and more formidable
competitors with greater financial ability to continue to reduce
prices to increase their customer base. As a result, our market
share and profit margins may decrease.

New communications technologies, such as
Wi-Fi and voice over Internet, are being developed
and deployed by competitors, which may affect our ability to
grow our wireless data and voice businesses.

ARPU from voice services has declined for
several years and may not stabilize.Our ARPU has weakened over the past several years, declining
from $52.91 to $49.30 over the past four years. This trend has
resulted from increased numbers of customers and decelerating
revenue growth caused primarily by:



|  |                                                                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | decreased roaming revenues due to lower
    negotiated roaming rates and broader coverage footprints, which
    obviate the need for roaming;                                          
| 
| | increased competition, which has reduced pricing
    generally; and                                                                                                                    
| 
| | expansion of subscriber bases to customers on
    lower price plans, such as prepaid, reseller plans and our
    FAMILYTALK® and similar plans targeting different market
    segments.

As none of these trends show signs of abating in
the near term, we believe that ARPU will continue to be under
pressure, notwithstanding increasing revenue from data services.

Integrating AT&T Wireless operations will
be costly and time consuming.The
challenges to integrate AT&T Wireless into our company
include:



|  |                                                                                                                                             
|- | --------------------------------------------------------------------------------------------------------------------------------------------
| | delivering a single, consistent and effective
    customer experience across all functions;                                                 
| 
| | demonstrating to customers that the transaction
    will result in positive changes in client service standards and
    business focus;     
| 
| | integration and rationalization of separate
    analog, TDMA and GSM network systems;                                                       
| 
| | consolidating and rationalizing corporate
    information technology and administrative infrastructures;                                    
| 
| | migrating AT&T Wireless customers to
    Cingulars product offerings and creating a strong Cingular
    brand identity with such customers;
| 
| | coordinating sales and customer service efforts
    to communicate our capabilities effectively;                                            

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|  |                                                                                                                                                       
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | reducing redundant facilities and resources;                                                                                                          
| 
| | preserving distribution, marketing and other
    important relationships and resolving potential conflicts that
    may arise;                        
| 
| | coordinating and rationalizing research and
    development activities to enhance introduction of new products
    and technologies with reduced cost;
| 
| | minimizing the diversion of management attention
    from ongoing business concerns; and                                                              
| 
| | maintaining employee morale and retaining key
    employees while downsizing our workforce.                                                           

If we do not successfully address these
integration challenges in a timely and cost-effective manner, we
may not realize the anticipated benefits or synergies of the
acquisition to the extent, or in the timeframe, anticipated. The
size and scale of the acquisition of AT&T Wireless increase
both the scope and consequences of ongoing integration risks.

If our wireless service offerings or customer
care service do not meet customer expectations, it could limit
our ability to retain or attract
customers.Customer acceptance of the
services we offer is and will continue to be affected by
technology-based differences and by the operational performance,
quality, reliability and coverage of our wireless networks.
Consumer demand could be impacted by differences in technology,
footprint and service areas, network quality, consumer
perceptions, customer care levels and rate plans. We may have
difficulty retaining customers if we are unable to meet our
customers expectations for network quality and coverage,
billing systems or customer care. An inability to address those
issues could limit our ability to expand our network capacity or
subscriber base and place us at a competitive disadvantage to
other wireless service providers in our markets. These issues
could affect our ability to attract new subscribers as well.

A high rate of customer churn would negatively
impact our business.Wireless
communications services providers, including us, experience
varying rates of customer churn. We believe that customers
change wireless providers for many reasons, including call
quality, service offerings, price, coverage area and customer
service. We expect to incur significant expenses to improve
customer retention and reduce churn by subsidizing product
upgrades and/or reducing pricing to match competitors
initiatives, upgrading our network and providing improved
customer service. There can be no assurance that these efforts
will be successful. A high rate of churn would adversely affect
our results of operations because we would lose revenue and
because the cost of adding a new customer, which generally
includes a commission expense and/or a handset subsidy, is a
significant factor in income and profitability for participants
in the wireless industry.

We believe industry-wide churn has increased
slightly with the implementation of wireless local number
portability. Carriers are not allowed to condition number
portability on bringing delinquent accounts current. Churn from
this new regulatory initiative could increase substantially over
time as service contracts expire and customers become more
familiar and comfortable with the processes involved in changing
carriers.

During the fourth quarter of 2003 and into 2004,
AT&T Wireless experienced difficulty transferring wireless
phone numbers on a timely basis in connection with the
implementation of wireless local number portability, and
disruptions to its GSM/ GPRS order entry, customer care and
collections processes in connection with implementing an upgrade
to its customer care support system. These difficulties damaged
its reputation and increased its churn. The lingering effects of
these issues could impede our growth and adversely affect our
churn. Since many of our gross customer additions came from
AT&T Wireless churn, our gross customer additions
could be negatively affected by our acquisition of this
subscriber source.

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As we dedicate more resources to new GSM voice
technology, our TDMA offerings could become less attractive,
resulting in a loss of customers and reduced
profitability.We expect to continue
operating our TDMA network for at least the next three years as
customers migrate to GSM technology. Due to our overlay of GSM
technology over our TDMA systems, and to encourage our customers
to migrate to GSM service, we expect not to upgrade our TDMA
network with the same robust features that we will provide on
our GSM networks. Furthermore, as we dedicate more spectrum to
GSM, our remaining TDMA customers may experience difficulties in
using our TDMA services. As we introduce and market GSM service,
we may price GSM products and services at more attractive levels
than TDMA products and services to encourage our customers to
migrate to our GSM service. Manufacturers are not expected to
produce innovative TDMA handsets with the same multiplicity of
features and attractiveness of design as handsets using other
technologies. All of these potential developments could drive
our TDMA customers to our competitors instead of to our GSM
offerings and thereby reduce our market share and profitability.

If we fail to obtain access to additional
spectrum, we may not be able to expand the geographic reach of
Cingular-branded services, increase our customer base in areas
we currently serve or meet the anticipated demand for new
services.Although our acquisition of
AT&T Wireless, our purchase of spectrum licenses from
NextWave and our teaming with other parties in FCC auctions have
generally provided us with access to sufficient spectrum to meet
anticipated levels of usage and provide 3G services in the
near term, we will need additional spectrum in certain markets.
If we cannot obtain access to new markets through auctions,
spectrum exchanges or leasing, acquisitions, joint ventures or
other means, it could impede our growth. In addition, an
inability to add spectrum in some of our existing markets could
adversely affect the quality of service if the demand for
wireless communications continues to increase at a rapid rate.

We are committing a substantial amount of
capital to upgrade our wireless voice networks to offer advanced
data services over a 3G network, but there can be no
assurance that widespread demand for these services will
develop.While demand for our advanced
data services is growing, revenues from such sources are
currently a small portion of our total revenues. Continued
growth in wireless data services is dependent on increased
development and availability of popular applications and
improved availability of handsets and other wireless devices
with features, functionality and pricing desired by customers.
EDGE is a new technology and a limited number of applications
and devices designed to operate on this technology are currently
available. If applications and devices are not developed and do
not become commercially accepted, our revenues and competitive
position would be materially and adversely affected. We cannot
give assurance that in the near future there will be widespread
demand for advanced wireless data services or that data revenues
will constitute a significant portion of our total revenues, nor
can we provide assurance that this demand will develop at a
level that will allow us to earn a reasonable return on our
investment.

We have also committed to build over the next
several years an advanced 3G network utilizing UMTS/HSDPA
technology. Customer demand for this service is unknown, and
demand for 3G services in Europe has generally been
disappointing and in Asia has varied significantly. As these
services are in their infancy in the U.S. and are being offered
in a highly competitive market, we cannot provide assurance that
these services can be priced at profitable levels. Significant
challenges also exist to develop and produce at reasonable cost
handsets that successfully address battery life, size and
functionality issues. Furthermore, our own experience
encouraging subscribers to migrate from TDMA to GSM service was
that substantial handset subsidies were required. If we are
unable to effectively promote and obtain reasonable penetration
of this service in our subscriber base at adequate pricing
levels, our ability to earn an acceptable rate of return on our
investment and protect our operating margins would be
jeopardized.

Our choice for the next generation of
technology, UMTS/HSDPA, is a new technology, which could become
obsolete and/or not commercially accepted, which could result in
a delay in offering new services.

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New high-speed 3G wireless services are now
being offered by wireless carriers in the U.S. that combine
the attributes of faster speed, greater data capability, better
portability and greater functionality than services provided
over existing networks. We have chosen UMTS/HSDPA as our
advanced 3G technology, but we believe that there will be
multiple, competing technological standards, several options
within each standard, vendor-proprietary variations and rapid
technological innovation. Other technologies could emerge as
preferred data networks for some services and, if those
technologies are widely accepted, we may miss the opportunity to
offer those services because of our technology choice. There is
a risk that UMTS/HSDPA could be inadequate or become obsolete as
4G technologies are developed.

We rely on roaming arrangements with other
carriers, which we may be unable to obtain or maintain in the
future.We may not continue to be able
to obtain or maintain roaming agreements with other wireless
providers on terms that are acceptable to us. Our customers
automatically can access another providers analog cellular
or digital system only if the other provider allows our
customers to roam on its network. We rely on agreements to
provide roaming capability to our customers in many areas
outside our service area and to improve coverage within our
network footprint. Some competitors may be able to obtain lower
roaming rates than we do because they have larger call volumes
or because of their affiliations with, or ownership of, wireless
providers, or may be able to reduce roaming charges by providing
service principally over their own network. In addition, the
quality of service that a wireless provider delivers during a
roaming call may be inferior to the quality of service we or our
affiliates provide, the price of a roaming call may not be
competitive with prices of other wireless providers for such a
call, or our customers may not be able to use some of the
advanced features, such as voicemail notification, that the
customers enjoy when making calls within our network. Finally,
we may not be able to continue to obtain roaming agreements for
our GSM/GPRS, EDGE, and other next-generation products and
services with pricing or coverage we desire.

Alltel is acquiring Western, which is one of our
significant GSM roaming partners. If the combined company
replaces Westerns GSM network with CDMA technology, which
Alltel uses, we would lose a valuable GSM roaming partner. In
such case, we would have to replace them or build our own GSM
network in the Western service area to provide service there.

In all markets where our roaming providers
operate, we are at risk because we do not control those
entities. As a result, we may not be able to compel them to
participate in our technology migration and enhancement
strategies or to expand their coverage areas. Our ability to
provide service on a nationwide level and to implement our
next-generation strategy could be adversely affected if these
providers are unable or unwilling to participate in the further
development of our digital network, or if they cease to provide
services comparable to those we offer on our networks. Some of
these carriers are still building their GSM/GPRS/EDGE networks,
primarily in rural areas. If those carriers are delayed or
prevented from completing their GSM/GPRS/EDGE networks, or if
they cease doing business, our customers might be unable to roam
on those networks when out of their home service areas, or they
may have to roam on carriers networks with which we have
less favorable roaming agreements. To the extent our roaming
providers that have developed GSM/GPRS do not deploy EDGE or
UMTS technology, our ability to expand our EDGE and UMTS service
area beyond our own network will be limited, which could
adversely affect demand for the service. If we lose the ability
to rely on roaming providers to provide service in an area, we
may be required to commit capital resources to the construction
of our own network in those areas rather than to the pursuit of
other business opportunities.

Our business expansion and network upgrade
will require substantial additional capital, and we are now
dependent on SBC and BellSouth to provide working capital and
long-term financing.We will require
substantial capital for acquisitions of systems, construction of
network infrastructure, concluding our technology migration and
upgrade plan, expanding our network capacity, investing in joint
venture affiliates

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and making other capital investments. As a result
of our acquisition of AT&T Wireless, our needs for working
capital and funds for debt repayment and long-term financing
have significantly increased.

The actual amount of capital required may vary
materially from our current estimates. Unforeseen delays, cost
overruns, regulatory changes, engineering and technological
changes, legal costs and judgments and other factors may also
require additional funds.

As a result of the cash needs described above, we
may need to incur significant amounts of additional financing.
SBC and BellSouth have committed to provide us with working
capital financing, and in light of that we have terminated our
commercial paper and bank financing arrangements. If SBC or
BellSouth are unable or unwilling to finance our operating and
capital needs on a timely basis, we would be unable to pursue
our business plan or meet our financial obligations, unless SBC
and BellSouth are willing to permit us to seek third party
financing.

Delay in completing our network expansion in
California and Nevada could result in substantially greater
operating expenses.Our agreement to
dissolve our GSMF venture with T-Mobile required us to sell to
them our California and Nevada network assets and allowed
T-Mobile to receive the New York network assets. We will be
required to expand the networks acquired in our AT&T
Wireless acquisition in those locations and, pending completion
of our expansion, we have the right to utilize the networks
transferred to T-Mobile for a four-year transition period. We
have committed to purchase at least $1.2 billion of minutes
over this term. In the event that our expansion is not completed
in a timely manner, our operating costs will substantially
increase.

Termination or impairment of our relationship
with a small number of key suppliers or vendors could adversely
affect our revenues and results of
operations.We have developed
relationships with a small number of key vendors, including
Nokia Mobile Phones, Inc., Sony Ericsson Mobile Communications,
Siemens, LG InfoComm U.S.A., Inc., Motorola, Inc., NEC
Corporation, and Samsung Electronics Co., Ltd. for our supply of
wireless handsets and devices; Nortel Networks, Inc., Ericsson,
Nokia Networks, Inc., Siemens and Lucent for our supply of
telecommunications infrastructure equipment; Convergys
Information Management Group and StarTek, Inc. for billing or
customer care services; Bechtel Corporation for build-out of our
networks; and Siebel Systems, Inc., Sun Microsystems, Inc. and
Cisco Systems, Inc. for information systems. We do not have
operational or financial control over our key suppliers and have
limited influence with respect to the manner in which these key
suppliers conduct their businesses. If these companies were
unable to honor, or otherwise failed to honor their obligations
to us, or terminated their relationship with us, we could
experience disruptions of our business and adverse effects on
our revenues and results of operations.

We have an agreement with Research in Motion
Limited (RIM), to purchase Blackberry® hand-held devices
for use in our data communications business. In litigation
against RIM by various patent holders, a court has held that
these devices infringe several patents. If we cannot obtain
these or comparable devices from RIM on a reasonable financial
basis, it could impair our profit margins and disrupt our
wireless data business.

Our lack of control over a large part of our
distribution network could hurt our ability to grow our customer
base.As of December 31, 2004, we
had over 260,000 distribution channels, of which only 2,600 were
our own stores or kiosks. We rely heavily upon independent
agents, national retailers and the distribution channels of SBC
and BellSouth to sell our products and services. Many of these
distributors also sell communications products and services of
other companies, and we cannot completely control the marketing
messages they use in their selling efforts or their preferences
to sell our products and services as opposed to those of our
competitors. As a result, our distribution channels may be
ineffective to a degree

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that we cannot directly address, which would hurt
our ability to generate new customer additions and maximize
revenues.

The potential impact of unionization and
organizing activities, which we expect will increase, could
adversely affect our costs and results of
operations.All of our businesses,
excluding joint ventures, are subject to various agreements with
the CWA. These agreements contain provisions requiring us to
maintain neutrality if the union conducts an organizing campaign
and requiring us to allow employees to vote to unionize by
presenting authorization cards rather than participating in a
more difficult secret ballot process conducted by the National
Labor Relations Board. In an effort to gain recognition in the
areas not already covered by a contract, union activity may
increase. We believe that no other national wireless provider
currently employs a unionized workforce to any significant
extent. At the expiration of the CWA agreements, a work stoppage
could prevent us from providing service to our customers in the
areas covered by the expired contracts and possibly result in
customer loss and a reduction in revenue.

Because some of our operations are conducted
through joint ventures with other companies, we cannot control
all aspects of our business, and disputes with our partners may
damage our reputation as a nationwide
brand.Despite our commitments to
provide substantial funds to joint venture affiliates, we do not
have control of their managements. If we experience
disagreements with our partners, it could adversely affect our
ability to serve some of our customers and profitably grow our
business.



| |                                     
| | ------------------------------------
| | Factors Relating to Our
    Industry

We may be adversely affected by the
significant changes expected in the wireless communications
industry.The wireless communications
industry is experiencing significant changes. These include
evolving industry standards, ongoing improvements in the
capacity and quality of digital technology, shorter development
cycles for new services, evolution to new 3G standards,
changes in end-user needs and preferences and high costs and
customer churn due to implementation of wireless local number
portability. Also, alternative technologies are developing for
the provision of services to customers that may provide wireless
communications services or alternative services superior to
those available from us. Accordingly, there can be no assurance
that technological changes will not materially adversely affect
us.

Industry growth will be affected by increased
market penetration.Currently, the
penetration rate in the wireless communications market is
approximately 62%. Although this market continues to grow,
increased penetration will have the effect of slowing customer
growth, and gross customer additions of any carrier will
increasingly have to be obtained from other carriers
churn. Currently, we believe that approximately 70% of our gross
additions were formerly customers of another wireless carrier.
If this condition continues, we expect competition to intensify
and our customer growth to be increasingly dependent on reducing
our churn rate.

Our operating results, including our profit or
loss, margins, and cash flow generation, may fluctuate on a
quarterly basis, and may not be representative of our results
for the full year.The wireless
industry, including our company, has experienced a trend of
generating a significantly higher number of customer additions
in the fourth quarter of each year as compared to the other
three fiscal quarters. A number of factors contribute to this
trend, including the increasing use of retail distribution,
which is dependent upon the year-end holiday shopping season,
the timing of new product and service announcements and
introductions, competitive pricing pressures and aggressive
marketing and promotions. Strong fourth quarter results for
customer additions may not continue for the wireless industry or
for us. The number of our customer additions in the fourth
quarter could decline for a variety of reasons, including our
inability to match or beat pricing plans offered by competitors,
failure to adequately promote our products, services and pricing
plans, failure to have an adequate supply or selection of
handsets or lower demand for wireless

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services. If in any year fourth quarter results
fail to significantly improve upon customer additions from the
years previous quarters, this could adversely impact the
growth of our subscriber base, which could limit revenue growth
in subsequent periods.

The revenues we generate from subscribers roaming
on our network, as well as the expenses we incur related to our
subscribers roaming on other carriers networks, fluctuate
on a quarterly basis, with increases typically occurring during
the summer months due to an increase in travel during these
periods. These fluctuations may result in higher or lower
roaming revenues and expenses in any given quarter, thereby
increasing or decreasing our profit or loss for that quarter.
Our capital expenditures vary due to the timing of network
expansion, network upgrades and market launches. The timing of
our capital expenditures will impact the cash flow we generate
in any given quarter and may not be representative of our cash
flow for the full year. Our churn levels may fluctuate from
quarter to quarter depending on the number of expiring contracts
or other factors. Our operating margins could fluctuate from
quarter to quarter, depending on marketing expenses, significant
fluctuations in the number of new subscribers and our customer
retention efforts.

Our operations are subject to substantial
government regulation, which could significantly increase our
costs and increase customer churn.Many aspects of our business are regulated to varying degrees by
the FCC and some state and local regulatory agencies. The
adoption or change of regulations could significantly increase
our costs and increase customer churn. For example, the FCC,
together with the Federal Aviation Administration, regulates
tower marking and lighting. In addition, the FCC and the states
are increasingly looking to the wireless industry to fund
various initiatives, including universal service programs, local
telephone number portability, services for the hearing-impaired
and emergency 911 networks. Furthermore, many states have
imposed significant taxes on the wireless industry and are
attempting to regulate consumer protection matters. We are also
subject to environmental protection and health and safety
regulation, including limits on radio frequency energy from
wireless handsets and towers. The failure to comply with any of
these regulations, even if hardware and software solutions are
not readily available from manufacturers and suppliers, can
result in significant penalties.

A number of our FCC licenses to provide
wireless services are subject to renewal and potential
revocation in the event that we violate applicable
laws.A number of our licenses are
subject to renewal, generally some each year, upon the
expiration of the 10-year period for which they are granted, and
we cannot assure you that the FCC will renew them. If any of our
licenses are forfeited or revoked, we would not be able to
provide service in that area unless we contract to resell
wireless services of another provider, utilize roaming
agreements or lease spectrum from other carriers.

Concern about alleged health risks relating to
radio frequency energy may harm our
prospects.A number of studies have
been conducted to examine the health effects of wireless phone
use, and some persons have construed some of the studies as
indicating that wireless phone use causes adverse health effects
or that wireless phones safety has not been established.
Some media reports have also suggested that radio frequency
energy from wireless handsets, accessories and cell sites may be
associated with various health problems, including cancer. In
addition, lawsuits have been filed against us and other
participants in the wireless industry alleging actual and
potential adverse health consequences as a result of wireless
phone usage. Some of these lawsuits allege other related claims,
including negligence, strict liability, conspiracy and the
misrepresentation of or failure to disclose these alleged health
risks. If consumers health concerns over radio frequency
energy increase, they may be discouraged from using wireless
handsets, and regulators may impose restrictions on the location
and operation of cell sites. These concerns could have an
adverse effect on the wireless communications industry and
expose wireless providers to further litigation, which, even if
not successful, can be costly to defend. Additional studies of
radio frequency energy are ongoing and new studies are
anticipated. Any negative findings in these studies could
increase the risks described

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above. In addition, an adverse outcome or
settlement in the existing and/or any further litigation against
us or any other provider of wireless services could have a
material adverse effect on our results of operations, financial
condition and/or prospects.

Equipment failure and disasters may adversely
affect our operations.A major
equipment failure or a natural disaster, terrorist act or other
breach of network or IT security that affects our wireless
telephone switching offices, microwave links, third-party owned
local and long distance networks on which we rely, our cell
sites or other equipment or the networks of other providers on
which our customers roam could have a material adverse effect on
our operations. While we have insurance coverage for some of
these events, our inability to operate our wireless system, even
for a limited time period, may result in a loss of customers or
impair our ability to attract new customers, which would have a
material adverse effect on our business, results of operations
and financial condition.

The restricted supply of new telephone numbers
could limit or delay our growth in California and some other
states.The supply of new telephone
numbers in some areas of the U.S. is near exhaustion due to
rapidly growing customer demand for additional numbers for
wireless handsets and pagers, as well as for Internet access and
private branch exchange systems or private telephone networks
used within enterprises. Many states have imposed restrictions
on carriers access to additional numbers, creating
shortages and delay in obtaining needed number resources. If we
are unable to obtain a sufficient supply of new telephone
numbers, our ability to increase our customer base would be
adversely affected.



| |                                                                
| | ---------------------------------------------------------------
| | Factors Relating to Our Arrangements with
    SBC and BellSouth

SBC and BellSouth may transfer their
controlling interests in us and cease to be subject to certain
obligations that benefit us, including exclusivity
provisions.Under our limited
liability company agreement and the stockholders agreement
among our manager, SBC and BellSouth, each of SBC and BellSouth
will cease to be subject to many of the restrictions imposed on
it that benefit and protect us, such as restrictions on
competition and acquisitions of other wireless businesses, once
its ownership interest falls below 10%. Although both SBC and
BellSouth are subject to a number of transfer restrictions, each
of them may, under the circumstances described in Item 13,
Certain Relationships and Related Transactions 
Our Limited Liability Company Agreement, sell its
interests in us and its common stock in our manager to third
parties, subject to a right of first refusal of the respective
other party, or spin-off or split-off its interests in us or its
stock in our manager to its shareholders. In addition, we may
lose any competitive advantage we currently gain from our agency
relationships and service bundling offerings with SBC and
BellSouth.

SBC and BellSouth may compete with us in the
areas of fixed wireless voice and data services and may resell
our services under their own brand names inside their service
territories after specified future
dates.SBC and BellSouth have agreed
in our limited liability company agreement to engage in the
provision of U.S. mobile wireless voice and data services
only through us and our subsidiaries, but the agreement is
subject to significant exceptions, including an exception that
permits them to market and sell fixed wireless voice and fixed
wireless data services and to market and sell wireless services
in areas in which we, our subsidiaries or joint venture
affiliates are not providing Cingular-branded services pursuant
to FCC licenses. SBC and BellSouth engage in other competitive
activities, such as Wi-Fi wireless data service. SBC
and BellSouth are permitted to resell our services under their
own brand names outside their service territories. In addition,
if BellSouth or SBC terminates its wireless agency agreement, it
may resell our wireless services in its respective service
territories.

The arrangements that we have with SBC and
BellSouth were established by SBC and BellSouth, and may not be
as advantageous as similar agreements negotiated with
unaffiliated third parties.We have
entered

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PART I




Item 1.     Business


into various agreements with SBC and BellSouth
and their respective affiliates that are material to the conduct
of our business, and we may enter into additional agreements
with them in the future. For example, we have entered into
agency agreements with SBC and BellSouth that include pricing
and other terms. Although we believe that these agreements, as a
whole, are as advantageous to us as those that could otherwise
be obtained, we have no independent verification that these
agreements are as advantageous as similar agreements negotiated
with unaffiliated third parties.

Under the terms of agreements with SBC and
BellSouth, the scope of our potential business is limited, which
could hurt the growth of our business.We have agreed with SBC and BellSouth that, without their
consent, we may not enter into any business other than U.S. and
limited foreign mobile wireless voice and data businesses. These
restrictions could limit our ability to grow our business
through initiatives such as expansion into additional markets
and acquisitions of wireless providers that are also engaged in
other businesses outside of our permitted activities. These
restrictions may also preclude us from pursuing other attractive
related or unrelated business opportunities.

SBC and BellSouth control all important
decisions affecting our governance and our operations and may
fail to agree on important matters.Under the terms of our limited liability company agreement, our
management is exclusively vested in our Manager. Both the board
of directors and the strategic review committee of our Manager
are comprised of six directors: three elected by SBC and three
elected by BellSouth. Substantially all important decisions of
our Manager must be approved by its strategic review committee.
It is possible that the committee may be deadlocked regarding
matters that are very important to us. Although deadlocks are to
be resolved by the chief executive officers of SBC and
BellSouth, if they cannot agree, inaction or disputes may
result, which could, among other things, result in us losing
important opportunities.

SBC and BellSouth may have conflicts of
interest with us and with each other.Conflicts of interest may arise between us and SBC and BellSouth
and with each other when faced with decisions that could have
different implications for us and SBC or BellSouth, including
technology decisions, financial budgets, repayment of member
loans from SBC and BellSouth, the payment of distributions by
us, business activities and other matters. They may also take
action that favors their businesses and the interests of their
shareholders over our wireless business and the interests of our
debt holders. Because SBC and BellSouth control us, conflicts of
interest could be resolved in a manner adverse to us or our debt
holders. Therefore, we may not always be able to use our
resources in the best interest of advancing our business. Any of
these types of conflicts could impede our relationship with our
members, their ability to manage us efficiently or our ability
to operate our business in the best interests of our security
holders.






|        |           
|------- | ----------
|Item 2. | Properties

We lease our corporate headquarters buildings in
Atlanta, Georgia. We also maintain administrative and sales
offices, customer care call centers, retail sales locations,
switching centers, cell tower sites and data centers throughout
the U.S. Most locations are generally leased to provide
maximum flexibility. Switching centers and data centers are
frequently owned due to their critical role in our operations
and high set-up and relocation costs.

We continue to maintain the leased office space
that had previously been the corporate headquarters of AT&T
Wireless in Redmond, Washington.

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PART I




|        |           
|------- | ----------
|Item 2. | Properties

Plant and equipment used to provide wireless
services consist of:



|  |                                                                                              
|- | ---------------------------------------------------------------------------------------------
| | switching, transmission and receiving equipment,                                             
| 
| | connecting lines (cables, wires, poles and other
    support structures, conduits, etc.),    
| 
| | land and buildings,                                                                          
| 
| | easements and                                                                                
| 
| | other miscellaneous properties (work equipment,
    furniture and plants under construction).

As of December 31, 2004, we operated a
direct distribution channel comprised of approximately
2,600 company-operated stores and kiosks. We have two
centrally operated handset and accessory distribution centers,
which are located in Memphis, Tennessee and Dallas, Texas.
Network properties included nearly 45,000 cell sites. This cell
site count excludes over 5,000 cell sites sold to T-Mobile
related to the sale of the California and Nevada Cingular
network on January 5, 2005.

We believe that our facilities are in good
operating condition and are currently suitable and adequate for
our business operations.






|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

NOTE:The claims
identified as AT&T Wireless claims were filed against
AT&T Wireless prior to the acquisition.

We and our subsidiaries, including AT&T
Wireless, are parties to various legal actions and regulatory
proceedings relating to matters that are incidental to the
conduct of our business. These involve disputes with and
inquiries by private parties and governmental entities over
alleged patent infringement, agency and reseller relationships,
alleged unfair competition, marketing (including unsolicited
marketing calls to persons on the FTCs National Do Not
Call Registry), advertising, promotions, sales, labor practices,
billing and collection practices and alleged health effects of
wireless phones. We are also subject to claims incidental to the
normal conduct of our business, including actions by customers,
vendors and employees and former employees.

We and various affiliated entities are subject to
state government inquiries over marketing practices in the
wireless industry and are defendants in a number of purported
class actions or representative actions brought on behalf of
subscribers throughout the country regarding common law and
statutory claims of misrepresentation, inadequate disclosure,
unfair trade practices or breach of contract related to our
advertising, promotions, sales, billing and collection
practices. These include claims relating to the alleged
practice, and alleged nondisclosure, of rounding up of partial
minutes of airtime usage to full minute increments, send-to-end
billing, charging early termination fees, post-cancellation
billing practices, billing for recovery costs associated with
regulatory programs, billing for roaming calls, locking of
handsets and other practices and charges, as well as the
adequacy of our wireless coverage and the quality of service.
The actions are in various stages of the investigation and
litigation processes. Plaintiffs in most of these putative class
actions and representative actions have not specified the
alleged damages they seek.

We and various affiliated entities are defendants
in a number of cases in various courts involving claims by
former agents and resellers who allege that we breached our
contracts with those agents and resellers, have tortiously
interfered with their contractual relationships with others by
terminating our relationships with them and have engaged in
unfair competition. Some of the complaints have further alleged
that we are a franchisor under applicable state franchise law
and have violated franchise laws in our relationship with

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PART I




|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

them. State franchise laws often provide for
treble damages for violations. We believe that we are not a
franchisor under state law in these cases.

In September 2004, the California Public
Utilities Commission voted to fine us $12 million and to
require us to pay restitution to customers for alleged
violations of Californias consumer protection laws. We are
appealing that decision.

We and AT&T Wireless are defendants in a
lawsuit brought by Freedom Wireless, Inc. alleging patent
infringement related to prepaid wireless service. The case is
pending in the U.S. District Court for the District of
Massachusetts, and the trial for this matter commenced in late
February 2005. The trial could last at least two months. The
plaintiff is expected to seek approximately $250 million in
monetary damages from us and AT&T Wireless, as well as
injunctive relief. Boston Communications Group, Inc. (BCGI),
whose prepaid technology platform we have used and whose
technology is alleged to infringe two patents held by Freedom
Wireless, has agreed to indemnify us and AT&T Wireless with
respect to the claims asserted in this litigation. Financial and
other information regarding BCGI can be obtained at
www.bcgi.net. (This web site address is an inactive
textual reference included for information only and is not
intended to be an active link or to incorporate any web site
information into this document.)

While more research needs to be conducted and is
being conducted on the subject, the research conducted to date
does not demonstrate that use of a wireless phone has any
adverse health effects, according to the U.S. Food and Drug
Administrations Center for Devices and Radiological Health
(the FDA). The FDA stated in July 2001: The available
scientific evidence does not show that any health problems are
associated with using wireless phones. There is no proof,
however, that wireless phones are absolutely safe. The FDA
shares regulatory responsibility for wireless phones with the
FCC. The FCC relies on the FDA and other health agencies for
safety questions about wireless phones. The FDA is party to the
Cooperative Research and Development Agreement with the Cellular
Telecommunications and Internet Association, of which we and
other wireless companies are members. Pursuant to this
agreement, the parties have agreed to support research regarding
wireless phone safety. We and various affiliated entities are
defendants in lawsuits alleging personal injuries, including
brain cancer, from wireless phone use. We and various affiliated
entities are also defendants in purported class actions that
allege adverse health effects caused by wireless phone use and
also allege fraudulent conduct, participation in conspiracies
and other wrongful conduct by wireless phone manufacturers,
service providers and others. Plaintiffs seek various forms of
relief, including compensatory and punitive damages, and/or
injunctive and equitable relief.

In a purported consumer class action against
AT&T Wireless filed in Texas pertaining to service quality,
the named plaintiffs at one time asserted claims for
compensatory and punitive damages totaling $100 million.
That case was dismissed and then reversed by the court of
appeals; AT&T Wireless motion for review in the Texas
Supreme Count was granted.

A series of class-action cases have been filed
against us and AT&T Wireless, as well as our major
competitors, alleging that we and the other defendants have
violated federal and state antitrust laws and/or committed
unfair or deceptive trade practices by allegedly restricting the
portability of wireless handsets between carriers.

Several class-action lawsuits have been filed
against AT&T Corp., certain executives of AT&T Corp. and
AT&T Wireless and a group of investment banking firms
asserting claims under the federal securities laws. The
complaints assert claims that AT&T Corp. made material
misstatements concerning earnings and financial condition, while
omitting other material information, allegedly to maximize
proceeds from the offering of AT&T Wireless Group tracking
stock in April 2000 and/or to avoid paying a cash guarantee in

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##### Table of Contents



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PART I




|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

connection with the MediaOne acquisition. The
plaintiffs have demanded damages in excess of $2.1 billion
related to the offering of AT&T Wireless Group tracking
stock. In connection with the split-off, certain provisions of
the Separation Agreement between AT&T Wireless and AT&T
Corp. may result in AT&T Wireless being allocated a
portion of the liabilities, if any, arising out of these actions
to the extent they relate to AT&T Wireless Group tracking
stock.

AT&T Wireless has been named as a defendant,
along with another wireless carrier and several wireless phone
manufacturers, in three class-action lawsuits alleging that
existing phone equipment does not meet FCC requirements for 911
emergency call processing. Damages have not been specified,
although plaintiffs are seeking injunctive and equitable relief.

AT&T Corp. has demanded arbitration of a
claim that AT&T Wireless has breached agreements that were
part of the split-off of AT&T Wireless from AT&T Corp.
by agreeing with us in the context of the acquisition that
certain stock options originally granted by AT&T Corp. and
later converted into options to purchase AT&T Wireless stock
would be cancelled upon consummation of the acquisition. Prior
to the closing of the acquisition, we waived the requirement
that these options be cancelled, and as a result, they were not
cancelled. AT&T Corp. asserts that AT&T Wireless is
obligated to pay compensation to option holders (even for those
options that are under water) and asserts a claim
for restitution from AT&T Wireless in the amount of
$201 million.

While complete assurance cannot be given as to
the outcome of any legal claims, we believe that any financial
impact from litigation or regulatory proceedings would not be
material to our business, financial position or cash flows.






|        |                                                        
|------- | -------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders

None

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PART II (Dollars in Millions)







|        |                                                                          
|------- | -------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity
    and Related Stockholder Matters

There is no established trading market for our
ownership interests. SBC indirectly owns approximately 60% of
our ownership interests and BellSouth indirectly owns
approximately 40% of our ownership interests. Cingular Wireless
Corporation, our manager, owns a de minimis ownership interest
in us.

We are required to make periodic distributions to
our members on a pro rata basis in accordance with each
members ownership interest in amounts sufficient to permit
members to pay the tax liabilities resulting from allocations of
income tax items from us. During 2001, we made distributions to
members of $47 related to 2000 tax liabilities and $592 related
to 2001 tax liabilities. Since we did not generate taxable
income to the members in 2002, 2003 and 2004, we made no
distributions in any of these years.

Additionally, we are required to distribute to
our members 50% of our excess cash, as defined in
our operating agreement, at the end of each fiscal year. Excess
cash consists of all funds generated from our business, less
forecasted cash needs for the upcoming fiscal year and
distributions made to the members for their tax payments.
Between 2002 and 2004, we were not required to make any
distributions of excess cash to the members.

Furthermore, under a revolving loan agreement
with SBC and BellSouth, free cash flow after repayment of the
revolving loans thereunder and subordinated shareholder loans
will be distributed to SBC and BellSouth. These distribution
provisions supercede the distribution provisions described above
to the extent they require a greater equity distribution.






|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

The following selected financial data should
be read in conjunction with our consolidated financial
statements and the notes thereto contained herein in
Item 8, Financial Statements and Supplementary
Data, the information contained herein in Item 7,
Managements Discussion and Analysis of Financial
Condition and Results of Operations and the information
contained herein in Item 1, Business  Risk
Factors  Factors Relating to our
Business,  Factors Relating to our Industry
and  Factors Relating to Our Arrangements with SBC
and BellSouth. Historical results are not necessarily
indicative of future results.

Selected Historical Financial
Information  Cingular Wireless LLC

The following table presents our selected
historical consolidated financial and operating data from the
date of our formation, April 24, 2000. The statements of
income, balance sheets and cash flow presented in this table are
derived from our audited historical consolidated financial
statements and related notes. Operating data was derived from
unaudited financial data. The results for the period
April 24, 2000 to December 31, 2000 presented below
include the contributed SBC and BellSouth Domestic Wireless
Groups wireless operations from October 2, 2000, the
contribution date; we had no meaningful results of operations
prior to that date.

During the course of preparing our 2004
consolidated financial statements, we determined that our method
of accounting for operating leases did not comply with the
requirements of Statement of Financial Accounting Standards
(SFAS) No. 13, Accounting for Leasesand
Financial Accounting Staff Board (FASB) Technical
Bulletin No. 85-3 Accounting for Operating Leases
with Scheduled Rent Increases. Historically, we have not
assumed the exercise of available renewal options in accounting
for operating leases. We reevaluated our accounting for
operating leases and the related useful lives for depreciating
leasehold improvements following publication of a letter issued
by the Office of the Chief Accountant of the SEC on
February 7, 2005. In light of our investment in each cell
site, including acquisition costs and leasehold improvements, we
have determined that the exercise of certain renewal options was
reasonably assured at the inception of the leases. Accordingly,
we have corrected our accounting to recognize rent expense, on a
straight-line basis, over the initial lease term and renewal
periods that are reasonably

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PART II (Dollars in Millions)




|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

assured, and to depreciate the associated
leasehold improvements and other related assets over the lesser
of their useful lives or their respective lease terms. The
restated selected financial data below for the years ending
December 31, 2000, 2001, 2002 and 2003 include the impact
of the restatements. In addition, our GSMF infrastructure
venture, accounted for under the equity method, reached a
similar conclusion with respect to operating leases, requiring
correction and restatement of its previously issued financial
statements for the years ended December 31, 2003 and 2002.
As a result, the selected financial data below for the years
ending December 31, 2002 and 2003 reflects the restated net
equity in losses of affiliates. See Note 2 to the
accompanying consolidated financial statements in Item 8,
Financial Statements and Supplementary Data for
additional information related to the restatements for the years
ending December 31, 2002 and 2003. See footnote 11
below for further information related to the restatements of the
years ending December 31, 2000 and 2001.

The 2004 data presented below is not necessarily
comparable to that for 2003 or any other prior period as a
result of the acquisition of AT&T Wireless, which closed in
October 2004. AT&T Wireless results subsequent to that
date have been included in our consolidated financial statements.

In 2003, to be consistent with industry
practices, historical consolidated statements of income for all
periods presented were reclassified to reflect billings to our
customers for the Universal Service Fund (USF) and other
regulatory fees as operating revenues and the costs related to
payments into the associated regulatory funds as operating
expenses. Operating income and net income for all periods were
unaffected.

|                                                                                        |  |                                                  |        |                         |  |            |        |            |  |      |        |   |  |   |        |   |  |   |         |  
|--------------------------------------------------------------------------------------- |  | ------------------------------------------------ | ------ | ----------------------- |  | ---------- | ------ | ---------- |  | ---- | ------ | - |  | - | ------ | - |  | - | ------- | -
|                                                                                        |  | Period from                                      |        |                        
|                                                                                        |  | April 24, 2000                                   |        | Year Ended December 31,
|                                                                                        |  | to December 31                                   |        |                        
|                                                                                        |  | 2000(11)                                         |        | 2001(11)                |  | 2002       |        | 2003       |  | 2004
|                                                                                        |  |                                                  |        |                         |  |            |        |            |  |     
|                                                                                        |  | (Restated)                                       |        | (Restated)              |  | (Restated) |        | (Restated) |  |     
|                                                                                        |  |                                                 
|                                                                                        |  | (Dollars in millions, except for operating data)
|Statements of Income Data                                                               |  |                                                  |        |                         |  |            |        |            |  |      |        |   |  |   |        |   |  |   |         |  
|Total operating revenues                                                                |  | $                                                | 3,085  |                         |  | $          | 14,268 |            |  | $    | 14,903 |   |  | $ | 15,483 |   |  | $ | 19,436  |  
|Total operating expenses(1)                                                             |  |                                                  | 2,709  |                         |  |            | 11,746 |            |  |      | 12,407 |   |  |   | 13,229 |   |  |   | 17,908  |  
|                                                                                        |  |                                                  |        |                         |  |            |        |            |  |      |        |   |  |   |        |   |  |   |         |  
|Operating income                                                                        |  |                                                  | 376    |                         |  |            | 2,522  |            |  |      | 2,496  |   |  |   | 2,254  |   |  |   | 1,528   |  
|Income before provision for income taxes and
    cumulative effect of accounting change |  |                                                  | 123    |                         |  |            | 1,674  |            |  |      | 1,217  |   |  |   | 1,005  |   |  |   | 143     |  
|Net income(2)                                                                           |  |                                                  | 122    |                         |  |            | 1,666  |            |  |      | 1,173  |   |  |   | 977    |   |  |   | 201     |  
|Balance Sheet Data(as of December 31)                                                   |  |                                                  |        |                         |  |            |        |            |  |      |        |   |  |   |        |   |  |   |         |  
|Total assets                                                                            |  | $                                                | 17,998 |                         |  | $          | 22,552 |            |  | $    | 24,136 |   |  | $ | 25,530 |   |  | $ | 82,238  |  
|Total long-term debt                                                                    |  |                                                  | 11,280 |                         |  |            | 12,466 |            |  |      | 12,546 |   |  |   | 12,592 |   |  |   | 23,857  |  
|Cash Flow Data                                                                          |  |                                                  |        |                         |  |            |        |            |  |      |        |   |  |   |        |   |  |   |         |  
|Net cash provided by operating activities                                               |  | $                                                | 1,062  |                         |  | $          | 3,665  |            |  | $    | 3,592  |   |  | $ | 3,686  |   |  | $ | 3,320   |  
|Net cash used in investing activities                                                   |  |                                                  | (1,218 | )                       |  |            | (3,945 | )          |  |      | (3,585 | ) |  |   | (3,368 | ) |  |   | (41,077 | )
|Net cash provided by (used in) financing
    activities                                 |  |                                                  | 282    |                         |  |            | 721    |            |  |      | 334    |   |  |   | (87    | ) |  |   | 36,970  |  
|Capital expenditures(3)                                                                 |  |                                                  | 959    |                         |  |            | 3,156  |            |  |      | 3,085  |   |  |   | 2,734  |   |  |   | 3,449   |  

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PART II (Dollars in Millions)




|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

|                                                                  |  |                                                  |       |                         |  |            |       |            |  |      |       |   |  |   |       |   |  |   |       |  
|----------------------------------------------------------------- |  | ------------------------------------------------ | ----- | ----------------------- |  | ---------- | ----- | ---------- |  | ---- | ----- | - |  | - | ----- | - |  | - | ----- | -
|                                                                  |  | Period from                                      |       |                        
|                                                                  |  | April 24, 2000                                   |       | Year Ended December 31,
|                                                                  |  | to December 31                                   |       |                        
|                                                                  |  | 2000(11)                                         |       | 2001(11)                |  | 2002       |       | 2003       |  | 2004
|                                                                  |  |                                                  |       |                         |  |            |       |            |  |     
|                                                                  |  | (Restated)                                       |       | (Restated)              |  | (Restated) |       | (Restated) |  |     
|                                                                  |  |                                                 
|                                                                  |  | (Dollars in millions, except for operating data)
|Operating Data                                                    |  |                                                  |       |                         |  |            |       |            |  |      |       |   |  |   |       |   |  |   |       |  
|Licensed cellular/PCS POPs (in millions) (end of
    period)(4)   |  |                                                  | 189   |                         |  |            | 219   |            |  |      | 219   |   |  |   | 236   |   |  |   | 290   |  
|Total cellular/PCS customers (in millions) (end
    of period)(5) |  |                                                  | 18.6  |                         |  |            | 21.6  |            |  |      | 21.9  |   |  |   | 24.0  |   |  |   | 49.1  |  
|Net additions, cellular/PCS customers (in
    millions)           |  |                                                  | 0.7   |                         |  |            | 1.9   |            |  |      | 0.4   |   |  |   | 2.1   |   |  |   | 3.4   |  
|Cellular/PCS customer churn(6)                                    |  |                                                  | 2.8   | %                       |  |            | 2.9   | %          |  |      | 2.8   | % |  |   | 2.7   | % |  |   | 2.7   | %
|Average cellular/PCS revenue per user (ARPU)(7)                   |  | $                                                | 51.69 |                         |  | $          | 52.91 |            |  | $    | 52.14 |   |  | $ | 51.32 |   |  | $ | 49.30 |  
|Ratio of earnings to fixed charges(8)                             |  |                                                  | 1.46  |                         |  |            | 2.69  |            |  |      | 2.08  |   |  |   | 1.95  |   |  |   | 1.11  |  
|OIBDA (in millions)(9)                                            |  | $                                                | 795   |                         |  | $          | 4,438 |            |  | $    | 4,345 |   |  | $ | 4,343 |   |  | $ | 4,605 |  
|OIBDA margin(10)                                                  |  |                                                  | 28.0  | %                       |  |            | 33.5  | %          |  |      | 31.2  | % |  |   | 30.5  | % |  |   | 26.4  | %



---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Subsequent to November 2001, depreciation expense
    related to the assets transferred to GSMF is classified as a
    component of equity in net loss of affiliates and is no longer
    included in operating expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (2) | For the year ended December 31, 2002, net
    income includes a cumulative effect of accounting change, net of
    tax, of $32 upon the adoption of Statement of Financial
    Accounting Standards No. 142, Goodwill and Other
    Intangible Assets. See Note 5 to our audited financial
    statements included in Item 8.                                                                                                                                                                                                                                                                                                                                     
|
| | (3) | Capital expenditures do not include capital
    expenditures and cash contributions related to our
    infrastructure venture, GSMF. See Note 6 to our audited
    financial statements included in Item 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (4) | Licensed POPs refers to the number of people
    residing in areas where we have licenses to provide cellular or
    PCS service.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (5) | Cellular/PCS customers include customers of other
    carriers served through reseller agreements. Effective 2001,
    cellular/PCS customers include customers associated with
    additional wireless businesses subsequently contributed by our
    members.                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (6) | 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. Beginning in the first quarter of 2005 we will adopt a
    new reseller churn calculation methodology that, for resellers,
    is based on net disconnects, See Consolidated Results of
    Operations, Year Ended December 31, 2004 Compared with the
    Year Ended December 31, 2003.                                                                                                     
|
| | (7) | ARPU is defined as cellular/PCS service revenues
    during the period divided by average number of cellular/PCS
    customers during the period. This metric is used to compare the
    recurring revenue amounts generated on our network to prior
    periods and internal targets. We believe that this metric
    provides useful information concerning the performance of our
    initiatives to attract and retain high value customers and the
    use of our network. For further discussion of ARPU and a
    reconciliation to its most comparable measure under generally
    accepted accounting principles (GAAP), see ARPU
    Discussion below.

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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (8) | Earnings consist of income before income taxes,
    extraordinary gain (loss), cumulative effect of accounting
    changes and fixed charges. Fixed charges include interest
    expense, capitalized interest and the portion of rent expense
    representing interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (9) | 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 in our Consolidated Statements
    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
    GAAP. Our calculation of OIBDA, as presented, may differ from
    similarly titled measures reported by other companies. For
    further discussion of OIBDA, including reasons we believe its
    presentation is useful, and a reconciliation to its most
    comparable measure under GAAP, see OIBDA Discussion
    below.



|     |                                                                                                                                                                                                                                                                                 
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | OIBDA margin is defined as OIBDA divided by
    service revenues.                                                                                                                                                                                                               
|    
|(11) | Fiscal periods ending December 31, 2001 and
    2000 have been restated for items discussed above. As a result
    of these restatements, our financial statements as of
    December 31, 2001 and 2000 and for the fiscal periods then
    ended have been adjusted as follows:

|                                                                                        |  |                       |        |             |  |               |       |    |  |   |        |  
|--------------------------------------------------------------------------------------- |  | --------------------- | ------ | ----------- |  | ------------- | ----- | -- |  | - | ------ | -
|                                                                                        |  | Year Ended            |        |             |  | Year Ended   
|                                                                                        |  | December 31,          |        |             |  | December 31, 
|                                                                                        |  | 2001                  |        |             |  | 2001         
|                                                                                        |  | (as reported)         |        | Adjustments |  | (as restated)
|                                                                                        |  |                       |        |             |  |              
|                                                                                        |  |                      
|                                                                                        |  | (Dollars in millions)
|Total operating expenses                                                                |  | $                     | 11,720 |             |  | $             | 26    |    |  | $ | 11,746 |  
|Operating income                                                                        |  | $                     | 2,548  |             |  | $             | (26   | )  |  | $ | 2,522  |  
|Income before provision for income taxes and
    cumulative effect of accounting change |  | $                     | 1,700  |             |  | $             | (26   | )  |  | $ | 1,674  |  
|Net income                                                                              |  | $                     | 1,692  |             |  | $             | (26   | )  |  | $ | 1,666  |  
|Total assets                                                                            |  | $                     | 22,530 |             |  | $             | 22    |    |  | $ | 22,552 |  
|Ratio of earnings to fixed charges                                                      |  |                       | 2.73   |             |  |               | (0.04 | )  |  |   | 2.69   |  
|OIBDA                                                                                   |  | $                     | 4,469  |             |  | $             | (31   | )  |  | $ | 4,438  |  
|OIBDA margin                                                                            |  |                       | 33.8   | %           |  |               | (0.3  | )% |  |   | 33.5   | %

|                                                                                        |  |                       |        |             |  |                |       |    |  |   |        |  
|--------------------------------------------------------------------------------------- |  | --------------------- | ------ | ----------- |  | -------------- | ----- | -- |  | - | ------ | -
|                                                                                        |  | Period from           |        |             |  | Period from   
|                                                                                        |  | April 24, 2000        |        |             |  | April 24, 2000
|                                                                                        |  | to                    |        |             |  | to            
|                                                                                        |  | December 31,          |        |             |  | December 31,  
|                                                                                        |  | 2000                  |        |             |  | 2000          
|                                                                                        |  | (as reported)         |        | Adjustments |  | (as restated) 
|                                                                                        |  |                       |        |             |  |               
|                                                                                        |  |                      
|                                                                                        |  | (Dollars in millions)
|Total operating expenses                                                                |  | $                     | 2,704  |             |  | $              | 5     |    |  | $ | 2,709  |  
|Operating income                                                                        |  | $                     | 381    |             |  | $              | (5    | )  |  | $ | 376    |  
|Income before provision for income taxes and
    cumulative effect of accounting change |  | $                     | 128    |             |  | $              | (5    | )  |  | $ | 123    |  
|Net income                                                                              |  | $                     | 127    |             |  | $              | (5    | )  |  | $ | 122    |  
|Total assets                                                                            |  | $                     | 17,981 |             |  | $              | 17    |    |  | $ | 17,998 |  
|Ratio of earnings to fixed charges                                                      |  |                       | 1.49   |             |  |                | (0.03 | )  |  |   | 1.46   |  
|OIBDA                                                                                   |  | $                     | 802    |             |  | $              | (7    | )  |  | $ | 795    |  
|OIBDA margin                                                                            |  |                       | 28.2   | %           |  |                | (0.2  | )% |  |   | 28.0   | %

40



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CINGULAR WIRELESS LLC





PART II (Dollars in Millions)




|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

OIBDA Discussion

OIBDA is defined as operating income (loss)
before depreciation and amortization. Although we have used
substantively similar measures in the past, which we called
EBITDA, we now use the term OIBDA to describe the
measure we use as it more clearly reflects the elements of the
measure. OIBDA margin is calculated as OIBDA divided by services
revenue. These are non-GAAP financial measures. They differ from
operating income (loss) and operating margin, as calculated in
accordance with GAAP, in that they exclude depreciation and
amortization. They differ from net income (loss), as calculated
in accordance with GAAP, in that they exclude, as presented in
our Consolidated Statements of Income: (i) depreciation and
amortization, (ii) interest expense, (iii) minority
interest expense, (iv) equity in net income (loss) of
affiliates, (v) other, net, and (vi) provision
(benefit) for income taxes. We believe these measures are
relevant and useful information to our investors as they are an
integral part of our internal management reporting and planning
processes and are important metrics our management uses to
evaluate the operating performance of our consolidated
operations. They are used by management as a measurement of our
success in acquiring, retaining and servicing customers because
we believe these measures reflect our ability to generate and
grow subscriber revenues while providing a high level of
customer service in a cost-effective manner. Management also
uses these measures as a method of comparing our performance
with that of many of our competitors. The components of OIBDA
include the key revenue and expense items for which our
operating managers are responsible and upon which we evaluate
their performance. Lastly, we use this measure for planning
purposes and in presentations to our board of directors, and we
use multiples of this current or projected measure in our
discounted cash flow models to determine the value of our
licensing costs and our overall enterprise valuation.

OIBDA excludes other, net, minority interest
expense and equity in net income (loss) of affiliates, as these
do not reflect the operating results of our subscriber base and
our national footprint that we utilize to obtain and service our
subscribers. Equity in net income (loss) of affiliates
represents our proportionate share of the net income (loss) of
affiliates in which we exercise significant influence, but do
not control. As we do not control these entities, our management
excludes these results when evaluating the performance of our
primary operations. Although excluded, equity in net income
(loss) of affiliates may include results that are material to
our overall net income (loss). OIBDA also excludes interest
expense and the provision (benefit) for income taxes. Excluding
these items eliminates the expenses associated with our
capitalization and tax structures. Finally, OIBDA excludes
depreciation and amortization, in order to eliminate the impact
of capital investments.

We believe OIBDA as a percentage of services
revenue to be a more relevant measure of our operating margin
than OIBDA as a percentage of total revenue. We generally
subsidize a portion of our handset sales, all of which are
recognized in the period in which we sell the handset. This
results in a disproportionate impact on our margin in that
period. Management views this equipment subsidy as a cost to
acquire or retain a subscriber, which is recovered through the
ongoing service revenue that is generated by the subscriber. We
also use service revenue to calculate margin to facilitate
comparison, both internally and externally with our competitors,
as they calculate their margins using service revenue as well.

There are material limitations to using these
non-GAAP financial measures, including the difficulty associated
with comparing these performance measures as we calculate them
to similar performance measures presented by other companies,
and the fact that these performance measures do not take into
account certain significant items, including depreciation and
amortization, interest, tax expense and equity in net income
(loss) of affiliates, that directly affect our net income or
loss. Management compensates for these limitations by carefully
analyzing how our competitors present performance measures that
are similar in nature to OIBDA as we present it, and considering
the economic effect of the excluded expense items independently
as well as in connection with its analysis of net income (loss)
as calculated in accordance

41



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CINGULAR WIRELESS LLC





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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

with GAAP. OIBDA and OIBDA margin should be
considered in addition to, but not as a substitute for, other
measures of financial performance reported in accordance with
accounting principles generally accepted in the U.S. OIBDA
and OIBDA margin, as we have defined them, may not be comparable
to similarly titled measures reported by other companies.

ARPU Discussion

ARPU is defined as cellular/ PCS service revenues
during the period divided by average cellular/ PCS customers
during the period. This metric is used to compare the recurring
revenue amounts generated on our cellular/PCS network to prior
periods and internal targets. We believe that this metric
provides useful information concerning the performance of our
ongoing initiatives to attract and retain high value customers
and the use of our network.

Reconciliation
of Non-GAAP Financial Measures to GAAP Financial
Measures.

|                                                                |                                            |                       |       |                         |   |            |        |            |   |      |        |       |   |   |        |       |   |   |        |       |  
|--------------------------------------------------------------- | ------------------------------------------ | --------------------- | ----- | ----------------------- | - | ---------- | ------ | ---------- | - | ---- | ------ | ----- | - | - | ------ | ----- | - | - | ------ | ----- | -
|                                                                |                                            |                       |       |                        
|                                                                |                                            | April 24, 2000        |       | Year Ended December 31,
|                                                                |                                            | to December 31        |       |                        
|                                                                |                                            | 2000                  |       | 2001                    |   | 2002       |        | 2003       |   | 2004
|                                                                |                                            |                       |       |                         |   |            |        |            |   |     
|                                                                |                                            | (Restated)            |       | (Restated)              |   | (Restated) |        | (Restated) |   |     
|                                                                |                                            |                      
|                                                                |                                            | (Dollars in millions)
|OIBDA                                                           |                                            |                       |       |                         |   |            |        |            |   |      |        |       |   |   |        |       |   |   |        |      
|Income (loss) before cumulative effect of
    accounting change |                                            | $                     | 122   |                         |   | $          | 1,666  |            |   | $    | 1,205  |       |   | $ | 977    |       |   | $ | 201    |      
|                                                                | Plus: Interest expense                     |                       |       | 231                     |   |            |        | 822        |   |      |        | 911   |   |   |        | 856   |   |   |        | 900   |  
|                                                                | Plus: Minority interest expense            |                       |       | 32                      |   |            |        | 122        |   |      |        | 123   |   |   |        | 101   |   |   |        | 86    |  
|                                                                | Plus: Equity in net loss of affiliates     |                       |       | (3                      | ) |            |        | 68         |   |      |        | 274   |   |   |        | 333   |   |   |        | 415   |  
|                                                                | Plus: Other, net                           |                       |       | (7                      | ) |            |        | (164       | ) |      |        | (29   | ) |   |        | (41   | ) |   |        | (16   | )
|                                                                | Plus: Provision (benefit) for income taxes |                       |       | 1                       |   |            |        | 8          |   |      |        | 12    |   |   |        | 28    |   |   |        | (58   | )
|Operating income (loss)                                         |                                            |                       | 376   |                         |   |            | 2,522  |            |   |      | 2,496  |       |   |   | 2,254  |       |   |   | 1,528  |      
|                                                                | Plus: Depreciation and amortization        |                       |       | 419                     |   |            |        | 1,916      |   |      |        | 1,849 |   |   |        | 2,089 |   |   |        | 3,077 |  
|OIBDA                                                           |                                            | $                     | 795   |                         |   | $          | 4,438  |            |   | $    | 4,345  |       |   | $ | 4,343  |       |   | $ | 4,605  |      
|ARPU                                                            |                                            |                       |       |                         |   |            |        |            |   |      |        |       |   |   |        |       |   |   |        |      
|Service revenues                                                |                                            | $                     | 2,844 |                         |   | $          | 13,229 |            |   | $    | 13,922 |       |   | $ | 14,223 |       |   | $ | 17,473 |      
|Less: Mobitex network service revenues                          |                                            |                       | 36    |                         |   |            | 185    |            |   |      | 189    |       |   |   | 220    |       |   |   | 209    |      
|Service revenue used to calculate ARPU                          |                                            | $                     | 2,808 |                         |   | $          | 13,044 |            |   | $    | 13,733 |       |   | $ | 14,003 |       |   | $ | 17,264 |      

Selected Historical Financial
Information  SBC Domestic Wireless Group

The following table presents selected historical
consolidated financial and operating data of the SBC Domestic
Wireless Group. The statements of operations and cash flow data
for the period ended October 2, 2000 are derived from the
audited financial statements of the SBC Domestic Wireless Group.
We derived the operating data from unaudited financial reports
of the SBC Domestic Wireless Group.

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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

The historical financial information includes the
results of operations and cash flows for the SBC Domestic
Wireless Group for the period ended October 2, 2000.
Historical financial information also includes the results of
operations and cash flows for acquisitions from their dates of
acquisition and includes the results of operations and cash
flows from various disposed assets until their dates of
disposition. The revenues and expenses presented below have not
been adjusted for the USF and other regulatory fees as
previously noted in our historical financial information as such
amounts are immaterial.

|                                                                                                             |  |                       |        |  
|------------------------------------------------------------------------------------------------------------ |  | --------------------- | ------ | -
|                                                                                                             |  | Period from          
|                                                                                                             |  | January 1, 2000      
|                                                                                                             |  | through              
|                                                                                                             |  | October 2, 2000      
|                                                                                                             |  |                      
|                                                                                                             |  | (Dollars in millions,
|                                                                                                             |  | except operating     
|                                                                                                             |  | data)                
|Statements of Operations Data                                                                                |  |                       |        |  
|Total operating revenues                                                                                     |  | $                     | 6,100  |  
|Total operating expenses                                                                                     |  |                       | 4,812  |  
|                                                                                                             |  |                       |        |  
|Operating income                                                                                             |  |                       | 1,288  |  
|Income before provision for income taxes,
    extraordinary gain and cumulative effect of accounting changes |  |                       | 917    |  
|Net income(1)                                                                                                |  | $                     | 586    |  
|Cash Flow Data                                                                                               |  |                       |        |  
|Net cash provided by operating activities(2)                                                                 |  | $                     | 620    |  
|Net cash used in investing activities                                                                        |  |                       | (2,528 | )
|Net cash provided by financing activities                                                                    |  |                       | 1,965  |  
|Capital expenditures                                                                                         |  |                       | 704    |  
|Operating Data                                                                                               |  |                       |        |  
|Total cellular/ PCS customers (in millions) (end
    of period)(3)                                           |  |                       | 13.2   |  
|Cellular/ PCS customer churn(4)                                                                              |  |                       | 2.6    | %



---



|    |                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In September 2000, adjustments related to
    calculations of a gain in 1999 on the required disposition of
    the 20 Midwestern cellular properties following the Ameritech
    merger resulted in an additional extraordinary gain of $36, net
    of taxes of $24.
|   
|(2) | Net cash provided by operating activities for the
    period ended October 2, 2000 reflects a tax payment of
    $1,102 associated with the sale of the 20 Midwestern cellular
    properties referenced in note (1).                                                 
|   
|(3) | Cellular/ PCS customers of other carriers 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. 

Selected Historical Financial
Information  BellSouth Domestic Wireless
Group

The following table presents summary historical
consolidated financial and operating data of the BellSouth
Domestic Wireless Group. The statements of operations and cash
flow data for the period ended October 2, 2000 are derived
from the audited financial statements of the BellSouth Domestic
Wireless

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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

Group. We derived the operating data from
unaudited financial reports of the BellSouth Domestic Wireless
Group.

The historical financial information for the
BellSouth Domestic Wireless Group includes the results of
operations and cash flows for various significant acquisitions
from their dates of acquisition and includes the results of
operations and cash flows from various disposed assets until
their dates of disposition. The revenues and expenses presented
below have not been adjusted for the USF and other regulatory
fees as previously noted in the historical financial information
for Cingular Wireless LLC as such amounts are immaterial.

|                                                                   |  |                  |        |  
|------------------------------------------------------------------ |  | ---------------- | ------ | -
|                                                                   |  | Period from     
|                                                                   |  | January 1, 2000 
|                                                                   |  | through         
|                                                                   |  | October 2, 2000 
|                                                                   |  |                 
|                                                                   |  | (Dollars in     
|                                                                   |  | millions, except
|                                                                   |  | operating data) 
|Statements of Operations Data                                      |  |                  |        |  
|Total operating revenues                                           |  | $                | 3,102  |  
|Total operating expenses                                           |  |                  | 2,723  |  
|                                                                   |  |                  |        |  
|Operating income                                                   |  |                  | 379    |  
|Income before provision for income taxes                           |  |                  | 194    |  
|Net income                                                         |  | $                | 114    |  
|Cash Flow Data                                                     |  |                  |        |  
|Net cash provided by operating activities                          |  | $                | 826    |  
|Net cash used in investing activities                              |  |                  | (1,347 | )
|Net cash provided by financing activities                          |  |                  | 553    |  
|Capital expenditures                                               |  |                  | 461    |  
|Other Operating Data                                               |  |                  |        |  
|Total cellular/ PCS customers (in millions) (end
    of period)(1) |  |                  | 5.7    |  
|Cellular/ PCS customer churn(2)                                    |  |                  | 2.5    | %



---



|    |                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Cellular/ PCS customers include customers of
    other carriers served through reseller agreements.                                                                                                                                                                  
|   
|(2) | 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.






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Overview



| |             
| | ------------
| | Our Business

We earn revenues and generate cash primarily by
offering a comprehensive variety of high-quality wireless voice
and data communications services and products. Our services are
available in a variety of postpaid pricing plans and prepaid
service arrangements. Our voice and data offerings are tailored
to meet the communications needs of targeted customer segments,
including youth, family, active professionals, local and
regional businesses and major national corporate accounts.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

At December 31, 2004, after our fourth
quarter 2004 acquisition of AT&T Wireless Services, Inc.
(AT&T Wireless) and exchange of properties with Triton PCS
Holdings, Inc. (Triton), we served 49.1 million voice and
data customers over our cellular and personal communications
services (PCS) networks and were the largest provider of
wireless voice and data communications services in the United
States (U.S.), based on the number of wireless customers. We had
access to Federal Communications Commission (FCC) licenses
to provide cellular or PCS wireless communications services
covering an aggregate population (POPs) of 290 million, or
approximately 98% of the U.S. population, including all of
the 100 largest U.S. metropolitan markets.

Although we are required to divest certain
wireless services and spectrum licenses in order to comply with
conditions imposed by the FCC and the U.S. Department of
Justice (DOJ) in connection with their approvals of the
AT&T Wireless acquisition, these divestitures are not
expected to materially affect our ability to provide services in
such markets or adversely affect our overall business or
financial prospects. See Note 20 to our consolidated
financial statements included in Item 8, Financial
Statements and Supplementary Data.



| |                          
| | -------------------------
| | AT&T Wireless Acquisition

On October 26, 2004, Cingular Wireless
Corporation (our Manager) acquired AT&T Wireless for an
aggregate consideration of approximately $41,000 in cash. On
October 27, 2004, our Manager sold to us all of its
interest in AT&T Wireless. At the acquisition date, AT&T
Wireless served nearly 22 million customers over its
cellular and PCS networks in the U.S. and the Caribbean.
AT&T Wireless also held equity interests in U.S. and
international communications ventures, corporations and
partnerships. For further information, see Note 3 to our
consolidated financial statements included in Item 8,
Financial Statements and Supplementary Data.

The addition of licensed and facilities-covered
spectrum as a result of the acquisition of AT&T Wireless
will enhance the breadth and spectrum depth of our footprint and
our ability to offer new services. We expect that it will also
enable improved customer satisfaction and retention as a result
of enhanced call clarity and reduced call interruptions. These
improvements are critical to our strategy of retaining customers
in light of industry trends that the wireless market is maturing
and as competitors seek to distinguish themselves through
attractive service offerings and quality customer service in
order to maintain operating margins. Our ability to achieve
these objectives is dependent on our ability to quickly and
efficiently integrate AT&T Wireless operations into
our own and realize anticipated cost savings.

We expect our operating performance initially to
be adversely affected as a result of our acquisition of AT&T
Wireless. In the third and fourth quarters of 2004, we incurred
$288 of integration costs and expect integration costs to
continue in 2005 as we begin to more fully integrate their
operations with ours. In addition, during the fourth quarter of
2004, we began recording significant non-cash amortization
expenses that will continue over the next few years as a result
of purchase accounting adjustments related to the acquisition.
For further information, see Note 5 to our consolidated
financial statements included in Item 8, Financial
Statements and Supplementary Data. Although we have begun
to realize cost savings and improvements in the operating
performance of our combined operations, the more significant
cost synergies will not occur until later in 2005 from the
elimination of redundant facilities, advertising costs, staff
functions, capital expenditures and other resources. We expect
these synergy savings to partially offset integration costs and
higher amortization expense in 2005 and then contribute to
higher operating margins, beginning during 2006.

Consistent with generally accepted accounting
principles (GAAP), the discussion of our results of operations
for the year ended December 31, 2004 includes the financial
results of AT&T Wireless for the

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

last 67 days of the period. The inclusion of
these results may render direct comparisons with the results for
prior periods less meaningful. Accordingly, the discussion below
addresses, where appropriate, trends we believe are significant,
separate and apart from the impact of the acquisition of
AT&T Wireless.

Restatement of Consolidated Financial
Statements

During the course of preparing our 2004
consolidated financial statements, we determined that our method
of accounting for operating leases did not comply with the
requirements of Statement of Financial Accounting Standards
(SFAS) No. 13, Accounting for Leasesand Financial
Accounting Staff Board (FASB) Technical
Bulletin No. 85-3, Accounting for Operating Leases
with Scheduled Rent Increases. Historically, we have not
assumed the exercise of available renewal options in accounting
for operating leases. We reevaluated our accounting for
operating leases and the related useful lives for depreciating
leasehold improvements following publication of a letter issued
by the Office of the Chief Accountant of the SEC on
February 7, 2005. In light of our investment in each cell
site, including acquisition costs and leasehold improvements, we
have determined that the exercise of certain renewal options was
reasonably assured at the inception of the leases. Accordingly,
we have corrected our accounting to recognize rent expense, on a
straight-line basis, over the initial lease term and renewal
periods that are reasonably assured, and to depreciate the
associated leasehold improvements and other related assets over
the lesser of their useful lives or their respective lease
terms. In addition, the Companys infrastructure venture
with T-Mobile USA, Inc. (T-Mobile), GSM Facilities, LLC (GSMF),
accounted for under the equity method, reached a similar
conclusion with respect to operating leases, requiring
correction and restatement of its previously issued financial
statements for the years ended December 31, 2003
and 2002.

This Managements Discussion and Analysis of
Financial Condition and Results of Operations on and for the
years ending December 31, 2003 and 2002 has been modified
and updated to reflect the effects of these restatements.

Industry and Operating Trends

We compete for customers based principally on our
reputation, network quality, customer service, price and service
offerings. We face substantial and increasing competition in all
aspects of our business. Our competitors are principally four
national (Verizon Wireless, Sprint PCS, Nextel Communications
and T-Mobile) and a large number of regional providers of
cellular, PCS and other wireless communications services, as
well as resellers. In addition, we may experience significant
competition from companies that provide similar services using
other current or future communications technologies and
services. Our management focuses on the key wireless industry
drivers of customer penetration, average revenue per user
(ARPU), operating income including OIBDA and reputation within
the wireless industry to evaluate our performance.

The wireless telecommunications industry is
continuing to grow and consolidate; however, a high degree of
competition exists among the current five national carriers,
their affiliates and the smaller regional carriers. This
competition and other factors, such as the implementation of
wireless local number portability, will continue to put pressure
on pricing, margins and customer churn (see Note 6 to
Selected Historical Financial Information 
Cingular Wireless LLC for a definition of customer churn)
as the carriers compete for potential customers. Future carrier
revenue growth is highly dependent upon the number of net
customer additions a carrier can achieve and the ARPU derived
from its customers. Our ARPU has weakened over the past several
years declining from $52.91 to $49.30 over the past four years.
This trend has resulted from increased numbers of customers and
decelerating revenue growth caused primarily by:



|  |                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------
| | decreased roaming revenues due to lower
    negotiated roaming rates and broader coverage footprints, which
    obviate the need for roaming;

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



|  |                                                                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | increased competition, which has reduced pricing
    generally; and                                                                                                                    
| 
| | expansion of subscriber bases to customers on
    lower price plans, such as prepaid, reseller plans and our
    FAMILYTALK® and similar plans targeting different market
    segments.

As none of these trends show signs of abating in
the near term, we believe that ARPU will continue to be under
pressure, notwithstanding increasing revenue from data services.
The effective management of customer churn is also paramount in
minimizing customer acquisition costs and maintaining and
improving margins.

Competition and the slowing rate of wireless
service penetration will continue to adversely impact revenue
growth and margins. We expect cost of services increases to
continue due to higher network system usage and, to a lesser
extent, redundant expenses related to operating multiple
networks as our customer base transitions from our Time Division
Multiple Access (TDMA) network to our Global System for
Mobile Communication (GSM) network and as we integrate
AT&T Wireless network and operations with ours. Our
operating margin in the fourth quarter of 2004 was unfavorably
impacted by certain on-going and expense increases related to
the AT&T Wireless acquisition. Operating expenses for the
fourth quarter included $245 in integration costs related to our
acquisition of AT&T Wireless as well as higher costs due to
the significant gross customer additions during the quarter and
handset upgrade and related costs associated with customer
migrations to new Cingular common service offerings. If we are
successful in continuing to increase our postpaid customer base,
our customer acquisition costs will increase. We also expect
increased costs to maintain and support our growing customer
base, including customer care initiatives to improve our level
of service to our combined customer base and retain existing
customers. We expect these and other cost increases to be
partially offset by ongoing efforts to reduce general and
administrative expenses and decreased roaming costs as a result
of lower negotiated roaming rates with other carriers and the
acquisition of AT&T Wireless, formerly our largest roaming
partner. In addition, we expect to see synergy savings related
to our AT&T Wireless acquisition offset integration costs
and other expense increases and begin to contribute to higher
margins during 2006.

Components of Our Operating Results



| |                   
| | ------------------
| | Operating Revenues

Service Revenues.Service revenues consist of revenues from the provision of
wireless voice and data services. For all the periods presented,
revenues from voice services accounted for more than 90% of our
consolidated voice and data service revenues. Service revenues,
which we record when services are provided and are net of
service credits and adjustments, include revenues from:



|  |                                                                                                                                                             
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | recurring monthly access charges;                                                                                                                           
| 
| | airtime usage, including prepaid service;                                                                                                                   
| 
| | long distance charges;                                                                                                                                      
| 
| | charges for optional features and services such
    as voice mail, unlimited mobile-to-mobile calling, roadside
    assistance, caller ID and data services;
| 
| | billings for Universal Services Fund
    (USF) and other regulatory program fees;                                                                           
| 
| | roaming charges we bill to our customers for
    their use of our and other carriers networks, which we
    refer to as incollect roaming revenues; and  
| 
| | roaming charges we bill to other wireless service
    providers whose customers use our network, which we refer to as
    outcollect roaming revenues.    

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Revenues from data services were slightly over 5%
of total service revenues for 2004 and have not been material in
any of the periods presented. We expect revenues from our
wireless data services to continue to exhibit significant
increases compared with the prior year periods but not to
comprise a material component of service revenues for the
foreseeable future. We expect growth in wireless data services
to be driven by the increased availability and/or usage of
higher-speed General Packet Radio Service (GPRS), Enhanced Data
Rates for GSM Evolution (EDGE) and Universal Mobile
Telecommunications System (UMTS) with High-Speed Downlink
Packet Access (HSDPA) technology across our network and the
introduction of new data applications for business and consumer
use, including access to e-mail, Internet content, mobile
commerce and location-based services.

As a result of the AT&T Wireless acquisition,
our consolidated outcollect roaming revenues will reflect a
reduction or elimination of intra-company revenues between the
now combined Cingular and former AT&T Wireless operations.
This elimination will significantly reduce the new combined
company outcollect roaming revenues when compared to the
combination of prior historical stand-alone results. There is
also a corresponding elimination of roaming expenses, a
component of cost of services, as described below.

Equipment Sales.Equipment sales include revenues from the sale of handsets and
accessories to new and existing customers and to agents and
other third-party distributors. The trend in equipment sales is
generally comparable to the trend in gross customer additions,
as well as being impacted by customers who upgrade their
handsets.



| |                   
| | ------------------
| | Operating Expenses

Our operating expenses include:



|  |                                                      
|- | -----------------------------------------------------
| | cost of services;                                    
| 
| | cost of equipment sales;                             
| 
| | selling, general and administrative
    expenses; and
| 
| | depreciation and amortization.                       

Cost of Services.Cost of services includes network costs related to voice and
data transmissions and includes the costs to monitor, maintain
and service our network and wireline facilities expense, as well
as costs related to payments into the USF and other regulatory
funds. We expect cost of services to continue to increase as a
result of higher network system costs associated with increased
customer usage. Cost of services also includes roaming charges
and long distance expense for services provided by other
telecommunications carriers. Overall, we expect these
third-party costs to continue to decrease. Roaming costs
continue to decline as increased usage stimulated by national
rate plans inclusion of free roaming is more than offset
by lower negotiated roaming rates. Additionally, as a result of
the AT&T Wireless acquisition, our consolidated roaming
expenses will reflect a reduction or elimination of
intra-company roaming costs between the now combined former
Cingular and AT&T Wireless properties. This elimination will
significantly reduce roaming expenses when compared to the
combination of prior historical stand-alone results. There is
also a corresponding elimination of outcollect roaming revenue,
a component of service revenues, as described above. We expect
reductions in roaming costs to be partially offset by higher
long distance costs as usage increases.

Cost of Equipment
Sales.Cost of equipment sales
includes the cost of handsets and accessories. Some of our third
party distributors purchase handsets and accessories from us,
nominally above cost. However, we generally sell handsets below
cost to customers who purchase through direct sales channels,
such as our company stores, as an inducement to customers to
agree to one-year and two-year subscription contracts,

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

to upgrade service or in connection with other
promotions. As a result, revenues from equipment sales are more
than offset by the related cost of equipment sales, resulting in
a net subsidy to customers. In addition, we have actively
focused on selling services to new customers and upgrading
existing customers to digital handsets and service, which
improves network efficiency and lowers our per minute operating
costs. The trend in the cost of equipment sales generally
follows the trend in gross customer additions and customer
upgrades, but is also impacted by changes in the cost of
handsets. As we continue to upgrade our network and introduce
new data offerings, we expect to see an increase in higher-cost,
feature-rich handsets for both new and existing customers. As
one of the largest purchasers of handsets in the U.S., we
believe we will be able to purchase handsets at attractive
volume-discounted rates.

Selling, General and
Administrative.Selling, general and
administrative expenses include:



|  |                                                                                                                                                                                      
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | sales and marketing costs, including the costs of
    advertising and promotions;                                                                                                    
| 
| | distribution expenses, including the costs to
    maintain retail locations and the commissions paid to our own
    sales force as well as agents and other third party distributors;
| 
| | provisions for uncollectible receivables; and                                                                                                                                        
| 
| | other administrative costs, such as finance,
    information technology, human resources, billing operations,
    customer service and other overhead costs.                         

Depreciation and
Amortization.Depreciation and
amortization expense includes non-cash expenses relating to the
depreciation of property, plant and equipment, amortization of
internal use software and amortization of identifiable
finite-lived intangibles, such as customer relationships.
Depreciation and amortization expense excludes depreciation
related to assets used in our joint ventures. See
 Equity in Net Income (Loss) of Affiliates,
Net below. Depreciation expense pertaining to assets used
in our business has been generally increasing as a result of our
capital expenditures and recognition of shorter TDMA asset
lives. We expect this expense to continue to increase in the
foreseeable future as we make substantial capital expenditures
to expand and upgrade our network and make other investments.
See  Cash Requirements below for a
discussion of our capital expenditures and other investments.
Additionally, amortization expense will increase in 2005 over
prior years as a result of the customer relationship and
AT&T trade name intangible assets recorded with our
acquisition of AT&T Wireless. This amortization expense will
decrease after 2005 as the AT&T trade name intangible asset
becomes fully amortized and the amortization related to the
customer relationship intangible asset decreases.



| |                        
| | -----------------------
| | Other Income (Expenses)

Interest Expense.Interest expense includes interest costs related primarily to
our indebtedness and capital leases, net of amounts capitalized.
Interest expense will increase over the levels recorded in 2004,
primarily due to the additional $9,500 of AT&T Wireless
Senior Notes we assumed with our acquisition of AT&T
Wireless. This increase will be partially offset by a reduction
in interest expense due to the amortization of a $2,045 purchase
accounting fair value premium associated with the assumed debt.

Minority Interest in Earnings of Consolidated
Entities.Minority interest reflects
the share of net income (loss) allocated to members or partners
in our consolidated entities.

Equity in Net Income (Loss) of Affiliates,
Net.We have non-controlling equity
investments in various entities. Effective January 2005, we
terminated a joint venture with T-Mobile, GSMF. For further
information regarding our equity investments, see also
Note 6, Investments in and Advances to Equity
Affiliates, to our consolidated financial statements
included in Item 8, Financial Statements and
Supplementary Data.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



| |             
| | ------------
| | Income Taxes

We are a limited liability company treated as a
partnership for income tax purposes and therefore generally do
not pay taxes on our income. Instead, income taxes are generally
the responsibility of our members. However, we have corporate
and LLC subsidiaries that are taxpayers in some jurisdictions
and will record income tax expense. With the acquisition of
AT&T Wireless as a corporate subsidiary, a larger portion of
our income will generate income tax expense on our financial
statements. For further information, see also Note 16,
Income Taxes, to our consolidated financial
statements included in Item 8, Financial Statements
and Supplementary Data.

Consolidated Results of Operations



| |                                                                                
| | -------------------------------------------------------------------------------
| | Year Ended December 31, 2004 Compared
    with the Year Ended December 31, 2003



| |              
| | -------------
| | Customer Base

|                       |          |                       |        |        |       |            |        |       |        |  |        |       |       |  |       |       |      |  
|---------------------- | -------- | --------------------- | ------ | ------ | ----- | ---------- | ------ | ----- | ------ |  | ------ | ----- | ----- |  | ----- | ----- | ---- | -
|                       |          |                       |        |        |       |           
|                       |          | Year Ended            |        |       
|                       |          | December 31,          |        | Change
|                       |          |                       |        |       
|Customers              |          | 2003                  |        | 2004   |       | Fav(Unfav) |        | %    
|                       |          |                       |        |        |       |            |        |      
|                       |          |                      
|                       |          | (In thousands)       
|Cellular/PCS Customers |          |                       |        |        |       |            |        |       |        |  |        |       |       |  |       |      
|Beginning of Period    |          |                       | 21,925 |        |       |            | 24,027 |       |        |  | 2,102  |       |       |  | 9.6   | %    
|Net Additions(Losses)  |          |                       |        |        |       |            |        |       |        |  |        |       |       |  |       |      
|                       | Postpaid |                       |        | 1,526  |       |            |        | 2,428 |        |  |        | 902   |       |  |       | 59.1  |     
|                       | Prepaid  |                       |        | 114    |       |            |        | 28    |        |  |        | (86   | )     |  |       | (75.4 | )   
|                       | Reseller |                       |        | 476    |       |            |        | 896   |        |  |        | 420   |       |  |       | 88.2  |     
|                       |          |                       |        |        |       |            |        |       |        |  |        |       |       |  |       |      
|                       |          | Total Net Additions   |        |        | 2,116 |            |        |       | 3,352  |  |        |       | 1,236 |  |       |       | 58.4 |  
|Other Adjustments      |          |                       | (14    | )      |       |            | 21,730 |       |        |  | 21,744 |       |       |  | NM    |      
|                       |          |                       |        |        |       |            |        |       |        |  |        |       |       |  |       |      
|End of Period          |          |                       | 24,027 |        |       |            | 49,109 |       |        |  | 25,082 |       |       |  | 104.4 |      
|                       |          |                       |        |        |       |            |        |       |        |  |        |       |       |  |       |      
|Gross Additions        |          |                       |        |        |       |            |        |       |        |  |        |       |       |  |       |      
|                       | Postpaid |                       |        | 7,161  |       |            |        | 9,287 |        |  |        | 2,126 |       |  |       | 29.7  |     
|                       | Prepaid  |                       |        | 1,343  |       |            |        | 1,721 |        |  |        | 378   |       |  |       | 28.1  |     
|                       | Reseller |                       |        | 881    |       |            |        | 1,658 |        |  |        | 777   |       |  |       | 88.2  |     
|                       |          |                       |        |        |       |            |        |       |        |  |        |       |       |  |       |      
|                       |          | Total Gross Additions |        |        | 9,385 |            |        |       | 12,666 |  |        |       | 3,281 |  |       |       | 35.0 | %
|                       |          |                       |        |        |       |            |        |       |        |  |        |       |       |  |       |      



---

NM  Not meaningful

We had 49.1 million cellular/ PCS customers
at December 31, 2004, representing a growth of
25.1 million in our cellular/ PCS customer base from a year
ago, primarily due to a nearly 22 million cellular/ PCS
customer base increase related to our acquisition of AT&T
Wireless in October 2004. Additionally, for the year ended
December 31, 2004, our cellular/ PCS customer net additions
were 3.4 million, up from 2.1 million a year ago, with
1.7 million of the current years cellular/ PCS
customer net additions occurring in the fourth quarter of the
year. This fourth quarter increase represents the highest
cellular/ PCS customer net additions total ever when compared
with the combined historical results of Cingular and AT&T
Wireless. The strong performance in cellular/ PCS customer net
additions during the fourth quarter was driven by the Cingular
brand re-launch, the offering of new common rate plans and the
larger distribution network of the newly combined Cingular/
AT&T Wireless subsequent to the acquisition. Also favorably
impacting customer net additions throughout 2004 were the
promotion and success of our new GSM service offerings and the
continued promotion of our FAMILYTALK® service offering, a
shared minutes plan that allows the addition of family members
to certain high-priced primary accounts for as

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

little as $9.99 per month, and our
ROLLOVER® rate plans, which allows our customers to carry
over any unused anytime minutes from month to month
for up to one year. Excluding the impact to the prepaid customer
base due to the AT&T Wireless acquisition, our prepaid
customer count was reduced from the prior year, in part due to
the successful promotion of our FAMILYTALK® plan, which
competes for customers at a similar price point but with
enhanced services. The increase in reseller customer net
additions compared with the prior year can be attributed to
continued growth by our primary reseller.

For the year ended December 31, 2004, our
monthly cellular/PCS churn rate was 2.7%, including the results
of AT&T Wireless since its acquisition. This 2.7% churn rate
was flat with Cingulars churn rate in the prior year as a
lower churn rate in our postpaid customer base was offset by
higher churn rates in our prepaid and reseller customer bases.
During the fourth quarter of 2004, we experienced a significant
improvement in our postpaid customer base churn rate compared
with prior periods as our customers responded positively to the
launch of the new Cingular, our broad network coverage and
attractive GSM service offerings. Also, during the fourth
quarter of 2004, conformity issues related to the calculation of
churn for Cingular and AT&T Wireless reduced churn
subsequent to the acquisition by 13 basis points. Beginning
in the first quarter of 2005, we will adopt a new reseller churn
calculation methodology that is consistent with our primary
competitor. We currently include gross reseller disconnects in
our churn calculation. In the future, we will base our churn
calculation on total net reseller disconnects. Because this new
methodology will result in a reduction of disconnects being used
in the calculation, our total reported churn and reseller churn
will be less than they would be under our previous methodology.
To date, we do not believe that wireless local number
portability has materially impacted our customer churn rate.



| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Historical Consolidated Data  For
    the years ended December 31, 2003 and 2004.

|                         |                               |                             |        |        |        |   |        |        |        |  |       |       |       |  |      |      |      | 
|------------------------ | ----------------------------- | --------------------------- | ------ | ------ | ------ | - | ------ | ------ | ------ |  | ----- | ----- | ----- |  | ---- | ---- | ---- | 
|                         |                               |                             |        |        |        |  
|                         |                               | Year Ended                  |        |       
|                         |                               | December 31,                |        | Change
|                         |                               |                             |        |       
|                         |                               | 2003                        |        | 2004   |        | $ |        | %     
|                         |                               |                             |        |        |        |   |        |       
|                         |                               | (Restated)                  |        |        |        |   |        |       
|Operating revenues       |                               |                             |        |        |        |   |        |        |        |  |       |       |       |  |      |     
|                         | Local service revenue  voice |                             | $      | 12,133 |        |   | $      | 14,839 |        |  |       | 2,706 |       |  |      | 22.3 | %   
|                         | Data revenue                  |                             |        | 454    |        |   |        | 892    |        |  |       | 438   |       |  |      | 96.5 |     
|                         |                               |                             |        |        |        |   |        |        |        |  |       |       |       |  |      |     
|                         |                               | Total local service revenue |        |        | 12,587 |   |        |        | 15,731 |  |       |       | 3,144 |  |      |      | 25.0 | 
|                         | Incollect roamer revenue      |                             |        | 757    |        |   |        | 764    |        |  |       | 7     |       |  |      | 0.9  |     
|                         | Long distance                 |                             |        | 171    |        |   |        | 229    |        |  |       | 58    |       |  |      | 33.9 |     
|                         |                               |                             |        |        |        |   |        |        |        |  |       |       |       |  |      |     
|                         |                               | Subscriber revenue          |        |        | 13,515 |   |        |        | 16,724 |  |       |       | 3,209 |  |      |      | 23.7 | 
|                         | Outcollect revenue            |                             |        | 586    |        |   |        | 585    |        |  |       | (1    | )     |  |      | (0.2 | )   
|                         | Other revenue                 |                             |        | 122    |        |   |        | 164    |        |  |       | 42    |       |  |      | 34.4 |     
|                         |                               |                             |        |        |        |   |        |        |        |  |       |       |       |  |      |     
|                         |                               | Other service revenue       |        |        | 708    |   |        |        | 749    |  |       |       | 41    |  |      |      | 5.8  | 
|                         |                               |                             |        |        |        |   |        |        |        |  |       |       |       |  |      |     
|                         | Wireless service revenue      |                             |        | 14,223 |        |   |        | 17,473 |        |  |       | 3,250 |       |  |      | 22.9 |     
|                         | Equipment sales               |                             |        | 1,260  |        |   |        | 1,963  |        |  |       | 703   |       |  |      | 55.8 |     
|                         |                               |                             |        |        |        |   |        |        |        |  |       |       |       |  |      |     
|Total operating revenues |                               |                             | 15,483 |        |        |   | 19,436 |        |        |  | 3,953 |       |       |  | 25.5 |     
|                         |                               |                             |        |        |        |   |        |        |        |  |       |       |       |  |      |     

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

|                                                       |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |       |      | 
|------------------------------------------------------ | ---------------------------------------------------------- | ----------------------------- | ----- | ------ | ------ | - | ----- | ----- | ------ | - | ---- | ----- | ----- | - | ------ | ----- | ---- | 
|                                                       |                                                            |                               |       |        |        |  
|                                                       |                                                            | Year Ended                    |       |       
|                                                       |                                                            | December 31,                  |       | Change
|                                                       |                                                            |                               |       |       
|                                                       |                                                            | 2003                          |       | 2004   |        | $ |       | %    
|                                                       |                                                            |                               |       |        |        |   |       |      
|                                                       |                                                            | (Restated)                    |       |        |        |   |       |      
|Operating expenses                                     |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |      
|                                                       | Cost of services (excluding depreciation)                  |                               |       | 3,681  |        |   |       | 4,608 |        |   |      | 927   |       |   |        | 25.2  |     
|                                                       | Cost of equipment sales                                    |                               |       | 2,031  |        |   |       | 2,874 |        |   |      | 843   |       |   |        | 41.5  |     
|                                                       | Selling, general and administrative                        |                               |       | 5,428  |        |   |       | 7,349 |        |   |      | 1,921 |       |   |        | 35.4  |     
|                                                       | Depreciation and amortization                              |                               |       | 2,089  |        |   |       | 3,077 |        |   |      | 988   |       |   |        | 47.3  |     
|                                                       |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |      
|                                                       |                                                            | Total operating expenses      |       |        | 13,229 |   |       |       | 17,908 |   |      |       | 4,679 |   |        |       | 35.4 | 
|                                                       |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |      
|Operating income                                       |                                                            |                               | 2,254 |        |        |   | 1,528 |       |        |   | (726 | )     |       |   | (32.2  | )    
|                                                       |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |      
|Other income (expenses):                               |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |      
|                                                       | Interest expense                                           |                               |       | (856   | )      |   |       | (900  | )      |   |      | (44   | )     |   |        | 5.1   |     
|                                                       | Minority interest in earnings of consolidated
    entities |                               |       | (101   | )      |   |       | (86   | )      |   |      | 15    |       |   |        | (14.9 | )   
|                                                       | Equity in net loss of affiliates                           |                               |       | (333   | )      |   |       | (415  | )      |   |      | (82   | )     |   |        | 24.6  |     
|                                                       | Other, net                                                 |                               |       | 41     |        |   |       | 16    |        |   |      | (25   | )     |   |        | (61.0 | )   
|                                                       |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |      
|                                                       |                                                            | Total other income (expenses) |       |        | (1,249 | ) |       |       | (1,385 | ) |      |       | (136  | ) |        |       | 10.9 | 
|                                                       |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |      
|Income before provision (benefit) for income
    taxes |                                                            |                               | 1,005 |        |        |   | 143   |       |        |   | (862 | )     |       |   | (85.8  | )    
|Provision (benefit) for income taxes                   |                                                            |                               | 28    |        |        |   | (58   | )     |        |   | (86  | )     |       |   | (307.1 | )    
|                                                       |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |      
|                                                       | Net income                                                 |                               | $     | 977    |        |   | $     | 201   |        |   |      | (776  | )     |   |        | (79.4 | )%  
|                                                       |                                                            |                               |       |        |        |   |       |       |        |   |      |       |       |   |        |      



| |                   
| | ------------------
| | Operating Revenues

Total operating revenues, consisting of service
revenue and equipment sales, increased $3,953, or 25.5%, to
$19,436 for the year ended December 31, 2004, compared with
$15,483 for the prior year. The primary driver behind the year
over year increases in almost every component of total operating
revenues was our acquisition of AT&T Wireless in late
October 2004 and inclusion of their operating results since the
acquisition. Excluding the impact of the AT&T Wireless
acquisition, total operating revenues continued to be favorably
impacted by growth in service revenues as a result of a higher
average cellular/ PCS customer base and the continued growth in
data revenues. These increases were partially offset by lower
outcollect roaming revenue. Equipment sales contributed $703 to
the increase in total operating revenues, driven both by strong
customer growth and handset upgrade activity. The components of
the changes in operating revenues are described as follows:

Service revenue.Service revenue, comprised of local voice and data services,
roaming, long distance and other revenue, increased $3,250, or
22.9%, compared with the prior year.

The local service component of total service
revenue includes recurring monthly access charges, airtime
usage, including prepaid service, and charges for optional
features and services, such as voice mail, mobile-to-mobile
calling, roadside assistance, caller ID, handset insurance and
data services. It also includes billings to our customers for
USF and other regulatory fees.

The primary driver of the $3,144, or 25.0%,
increase in local service revenue for year ended
December 31, 2004 was the inclusion of the former AT&T
Wireless operating results as a result of our acquisition in
late October 2004. Excluding this impact, increases in local
service revenue resulted from the higher average customer base
and increases in revenues from USF and other regulatory program
fee billings.

Strong growth in data revenue of $438, or 96.5%,
including the impact of the AT&T Wireless acquisition,
continues to favorably impact local service revenue, driven
primarily by increased data service penetration

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

and use of text messaging and other data services
by our cellular/ PCS customers. For the year ended
December 31, 2004, data revenue included $686 from our
cellular/ PCS business and $206 from our Mobitex business, which
we sold during the fourth quarter of 2004. For the year ended
December 31, 2003, data revenue from our Mobitex business
was $218.

Incollect and outcollect roaming revenues were
essentially flat when compared with the corresponding amounts
from the prior year. Roaming revenues continue to be unfavorably
impacted by the bundling of free roaming minutes
with all-inclusive regional and national rate plans and lower
negotiated rates with our roaming partners. Prior to our
acquisition, AT&T Wireless was our largest national roaming
partner. Effective with the acquisition, our consolidated
outcollect revenue reflects elimination of roaming revenue
between the former Cingular and AT&T Wireless properties,
along with a corresponding elimination of incollect roaming
costs. Although net income neutral, this elimination will
significantly reduce our outcollect revenue when compared to the
combination of prior historical stand-alone results.

Long distance revenue comprised only 1.3% of
total service revenue. The $58, or 33.9%, increase in long
distance revenue compared with 2003 was primarily related to the
incremental impact of the additional long distance revenue
contributed as a result of the AT&T Wireless acquisition.
Higher international long distance revenue in 2004 also
contributed, to a lesser extent, to the overall increase
compared with the prior year.

Cellular/ PCS ARPU for the year ended
December 31, 2004 was $49.30, a decrease of $2.02, or 3.9%,
compared with $51.32 for the year ended December 31, 2003.
Although the contribution of a higher-ARPU AT&T Wireless
customer base subsequent to the acquisition had a slightly
positive impact on our overall 2004 ARPU when compared with
2003, the main drivers of the changes in ARPU were consistent
with prior periods. Continued increases in customer usage and
increased data revenue and regulatory fee revenue were more than
offset by the impact of a larger embedded customer base of
postpaid customers on lower priced FAMILYTALK® rate plans
and on all-inclusive rate plans that include more
free minutes, thereby reducing overages and other
chargeable airtime. Also exerting downward pressure on ARPU
compared with the prior year is a change in the mix of our
cellular/ PCS customer base to a higher percentage of lower ARPU
reseller customers and decreases in roaming revenue, largely as
a result of our acquisition of AT&T Wireless. As former
AT&T Wireless customers continue to migrate to our popular
ROLLOVER® rate plans, we expect to see higher revenue
deferrals related to unused minutes, which will have an
unfavorable impact on our reported ARPU. This effect may be
partially offset by the addition of higher-ARPU AT&T
Wireless subscribers to our customer base.

Equipment sales.For
the year ended December 31, 2004, equipment sales increased
$703, or 55.8%, primarily driven by overall higher handset
sales, including the impact of a significant increase in
customer gross additions due to the acquisition of AT&T
Wireless. Customer migrations to Cingular rate plans as a result
of the acquisition also increased handset upgrade revenue.



| |                   
| | ------------------
| | Operating Expenses

Cost of services (exclusive of
depreciation).Total cost of services,
excluding depreciation, increased $927, or 25.2%, to $4,608 for
the year ended December 31, 2004, compared with $3,681 for
the prior year. The cost of services increase for the year ended
December 31, 2004 compared with the prior year was due to
increases in local network system costs of $897 and in third
party system costs (i.e.,roaming and long distance
costs) of $30. Over half of the increase in local network system
costs can be attributed to the incremental costs related to the
acquired AT&T Wireless network. Excluding this impact, the
overall drivers of increased local network costs are primarily
related to increased network system usage and associated network
system expansion costs. Increased local network system costs in
2004 versus the prior

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

year attributable to historical pre-acquisition
Cingular activities included $74 for increased costs billed to
our customers related to payments into the USF and certain other
regulatory funds, a $31 charge related to a fair value
adjustment of our Mobitex business during the third quarter of
2004 and higher costs related to our handset insurance program
due to increased claims. For the year ended December 31,
2004, excluding the overall expense increase due to the AT&T
Wireless acquisition, third party network system costs were
lower as continued decreases in incollect roaming costs were
only partially offset by higher long distance costs. Lower
incollect roaming costs were a result of lower negotiated
roaming rates with our roaming partners, which more than offset
increased volumes of roaming minutes. Also, subsequent to the
AT&T Wireless acquisition, Cingulars consolidated
incollect expenses reflect elimination of incollect roaming
costs between the former Cingular and AT&T Wireless
properties along with a corresponding elimination of outcollect
revenue. Although net income neutral, this elimination will
significantly reduce our incollect roaming expenses when
compared to the combination of prior historical stand-alone
results.

The increase in long distance costs of $113, or
33.4%, when compared to the comparable period in the prior year,
was primarily volume driven, impacted by the inclusion of
free long distance in many of our regional and
national rate plan offerings, which resulted in increases in
customer long distance calls. In addition, approximately
one-third of the increase in long distance costs versus 2003 was
related to the incremental long distance expenses incurred as a
result of the AT&T Wireless acquisition.

Cost of equipment
sales.For the year ended
December 31, 2004, the cost of equipment sales increased
$843, or 41.5%, and, consistent with equipment sales revenue,
was primarily driven by overall higher handset sales, including
the impact of a significant increase in customer gross additions
and customer migrations to Cingular rate plans due to the
acquisition of AT&T Wireless.

Selling, general and administrative
expenses.Selling, general and
administrative expenses for the year ended December 31,
2004 increased $1,921, or 35.4%, when compared with the prior
year, primarily due to the incremental expense impact resulting
from the addition of the AT&T Wireless selling,
general and administrative expenses during the fourth quarter of
2004. In addition, selling, general and administrative expenses
in 2004 also included $277 in integration and planning expenses
associated with the AT&T Wireless acquisition, as well as
other cost increases associated with increased customer gross
additions and other customer service and support initiatives.
The components of the changes in selling, general and
administrative expenses are as described below:

Selling expenses, which include sales, marketing,
advertising and commission expenses, increased $873, or 33.5%,
for the year ended December 31, 2004, compared with the
prior year. This increase was driven primarily by the addition
of the incremental AT&T Wireless selling expenses subsequent
to acquisition. In addition, selling expenses included $149 in
integration and planning expenses, primarily related to sales
and advertising associated with the new combined company
re-branding and support of our common customer service
experience initiative subsequent to the acquisition. Higher
sales, advertising and promotion costs and commissions expenses
were also a function of the increased customer gross additions
in 2004.

Costs for maintaining and supporting our customer
base increased $741, or nearly 40%, for the year ended
December 31, 2004, compared with the prior year. Again,
this increase was primarily driven by the addition of the
AT&T Wireless expenses subsequent to the acquisition, and
also included $34 in integration and planning expenses,
primarily due to increased customer service and other expenses
to support customer migration, transition and communication
issues as a result of the acquisition. In addition to these
acquisition-related increases, costs for maintaining and
supporting our customer base were also impacted by higher bad
debt expense, increased customer service expenses to support
on-going customer retention and other service improvement
initiatives and higher commission expenses associated with
handset upgrades. Bad debt expense increased primarily due to
higher customer net write-offs as a result

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

of prior relaxed credit policies in selected
areas, which we have subsequently changed, as well as residual
impacts related to the implementation of wireless local number
portability in late 2003. Additionally, 2003 included a
$26 net recovery of prior WorldCom Inc. (WorldCom)
write-offs. Upgrade commission expenses were impacted by over
one million AT&T Wireless customer migrations to new
Cingular rate plans as a result of the acquisition.

Other administrative costs increased $307, or
32.0%, for the year ended December 31, 2004, compared with
the prior year, and included, in addition to the incremental
expenses of AT&T Wireless, $94 in integration and planning
costs primarily related to acquisition project management costs
and information technology and development costs to support
customer service, sales and billing systems integrations.

Depreciation and
amortization.For the year ended
December 31, 2004, depreciation expense increased by $635,
or 33.0%, compared with the prior year, and included an
incremental $325 related to assets acquired from AT&T
Wireless. Other increases in depreciation expense were primarily
due to on-going capital spending, including our GSM/ GPRS/ EDGE
network overlay, in addition to increased depreciation on TDMA
assets in 2004 as a result of a further review of estimated
service lives. See Critical Accounting Policies and
Estimates  Long-Lived Assets  Depreciation
and Amortization and also Note 4, Property,
Plant and Equipment in Item 8, Financial
Statements and Supplementary Data. For the year ended
December 31, 2004, amortization expense increased by $353,
or 217.9%, and included an incremental $399 in amortization
expense as a result of the AT&T Wireless acquisition,
primarily related to amortization of the customer relationship
intangible asset acquired. This increase was partially offset by
certain historical Cingular finite-lived intangible assets
becoming fully amortized during 2004.



| |                        
| | -----------------------
| | Other Income (Expenses)

Interest expense.For the year ended December 31, 2004, interest expense
increased $44, or 5.1%, compared to the prior year and included
an incremental $97 in interest expense as a result of the
AT&T Wireless acquisition, primarily related to $9,500
principal amount of AT&T Wireless Senior Notes, partially
offset by a reduction in interest expense due to the
amortization of the purchase price valuation premium associated
with the acquired AT&T Wireless debt. Cingular had a
$53 net decrease in interest expense that included a $70
reduction in interest expense to our members, SBC Communications
Inc.(SBC) and BellSouth Corporation (BellSouth), as a result of
an interest rate decrease from 7.5% to 6%, effective July 2003.
See also Item 7A, Quantitative and Qualitative
Disclosures about Market Risk.

Minority interest in earnings of consolidated
entities.For the year ended
December 31, 2004, compared with the prior year, the
minority interest expense decrease of $15, or 14.9%, was
primarily a function of lower partnership net income versus the
prior year.

Equity in net loss of
affiliates.For the year ended
December 31, 2004, the increase from the prior year in
equity in net loss of affiliates of $82, or 24.6%, was primarily
due to increased losses related to our GSMF venture, principally
due to higher depreciation expense incurred by the joint venture.

Other, net.For the
year ended December 31, 2004, the $25, or 61.0%, reduction
in Other, net from the prior year is primarily due to the impact
of a one-time $23 gain recognized in 2003.



| |                                     
| | ------------------------------------
| | Provision (Benefit) for Income Taxes

Provision (benefit) for income
taxes.For the year ended
December 31, 2004, the benefit for income taxes was $58
versus a provision for income taxes of $28 for the year ended
December 31, 2003. We are not a taxable entity for federal
income tax purposes. Federal taxable income or loss is included
in our respective members federal income tax returns. Our
provision (benefit) for income taxes includes federal and state
income taxes for our corporate subsidiaries, as well as for
certain states which impose income

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

taxes upon non-corporate legal entities. Our
acquisition of AT&T Wireless resulted in a significant
increase in our pre-tax income (loss) from our corporate
subsidiaries. AT&T Wireless retained its corporation status;
however, after the acquisition, AT&T Wireless contributed
the majority of its assets and liabilities to CWII, which it
owns jointly with us. Forty-three percent of the income (loss)
from CWII is allocated to AT&T Wireless and is subject to
federal and state income taxes. The remaining 57% of the income
(loss) from CWII is allocated to us and is included in our
respective members income tax returns. The benefit for
income taxes during 2004 resulted from a pre-tax loss related to
our corporate subsidiaries during the year. See Note 16,
Income Taxes in Item 8, Financial
Statements and Supplementary Data for further information
on our provision (benefit) for income taxes, as well as
information related to the repatriation of foreign earnings
resulting from the American Jobs Creation Act of 2004.



| |                                                                                
| | -------------------------------------------------------------------------------
| | Year Ended December 31, 2003 Compared
    with the Year Ended December 31, 2002



| |              
| | -------------
| | Customer Base

|                               |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |       |       | 
|------------------------------ | -------- | --------------------- | ------ | ------ | ----- | ---------- | ------ | ----- | ----- |  | ----- | --- | ----- |  | ------ | ----- | ----- | 
|                               |          |                       |        |        |       |           
|                               |          | Year Ended            |        |       
|                               |          | December 31,          |        | Change
|                               |          |                       |        |       
|Customers                      |          | 2002                  |        | 2003   |       | Fav(Unfav) |        | %    
|                               |          |                       |        |        |       |            |        |      
|                               |          |                       |        |        |       |           
|                               |          | (In thousands)        |        |        |       |           
|Cellular/ PCS Customers        |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|Beginning of Period            |          |                       | 21,596 |        |       |            | 21,925 |       |       |  | 329   |     |       |  | 1.5    | %    
|Net Additions (Losses)         |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|                               | Postpaid |                       |        | 827    |       |            |        | 1,526 |       |  |       | 699 |       |  |        | 84.5  |      
|                               | Prepaid  |                       |        | (22    | )     |            |        | 114   |       |  |       | 136 |       |  |        | 618.2 |      
|                               | Reseller |                       |        | (445   | )     |            |        | 476   |       |  |       | 921 |       |  |        | 207.0 |      
|                               |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|                               |          | Total Net Additions   |        |        | 360   |            |        |       | 2,116 |  |       |     | 1,756 |  |        |       | 487.8 | 
|Other Adjustments              |          |                       | (31    | )      |       |            | (14    | )     |       |  | 17    |     |       |  | 54.8   |      
|                               |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|End of Period                  |          |                       | 21,925 |        |       |            | 24,027 |       |       |  | 2,102 |     |       |  | 9.6    |      
|                               |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|Gross Additions                |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|                               | Postpaid |                       |        | 6,162  |       |            |        | 7,161 |       |  |       | 999 |       |  |        | 16.2  |      
|                               | Prepaid  |                       |        | 1,313  |       |            |        | 1,343 |       |  |       | 30  |       |  |        | 2.3   |      
|                               | Reseller |                       |        | 351    |       |            |        | 881   |       |  |       | 530 |       |  |        | 151.0 |      
|                               |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|                               |          | Total Gross Additions |        |        | 7,826 |            |        |       | 9,385 |  |       |     | 1,559 |  |        |       | 19.9  | 
|                               |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|Mobitex Data Network Customers |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|Beginning of Period            |          |                       | 733    |        |       |            | 817    |       |       |  | 84    |     |       |  | 11.5   |      
|Gross Additions                |          |                       | 416    |        |       |            | 328    |       |       |  | (88   | )   |       |  | (21.2  | )    
|Net Additions (Losses)         |          |                       | 84     |        |       |            | (28    | )     |       |  | (112  | )   |       |  | (133.3 | )    
|                               |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      
|End of Period                  |          |                       | 817    |        |       |            | 789    |       |       |  | (28   | )   |       |  | (3.4   | )%   
|                               |          |                       |        |        |       |            |        |       |       |  |       |     |       |  |        |      

We had over 24 million cellular/ PCS
customers at the end of 2003, representing a growth of
2.1 million cellular/ PCS customers from the prior
year-end. The 2.1 million increase in our cellular/ PCS
customer base during 2003, at that time represented the highest
annual increase since our formation. In addition, the number of
cellular/ PCS postpaid gross and net customer additions for the
year, 7.2 million and 1.5 million, respectively, also
represented, at that time, our highest annual growth in these
customer segments. We believe the significant improvement in
customer growth, when compared with the prior year, resulted
from the following business initiatives implemented in late 2002
and early 2003:



|  |                                                                                                         
|- | --------------------------------------------------------------------------------------------------------
| | reorganization of our marketing and sales
    operations to more effectively address local market needs;
| 
| | introduction of a more meaningful brand
    message  CINGULAR FITS YOU BESTSM;                         

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PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



|  |                                                                                                                                                                                                                                   
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | increased emphasis on our affiliation with our
    parent companies and co-branding and more effectively utilizing
    their sales channels in those areas where our wireless markets
    overlap with their wireline markets; and
| 
| | more effective marketing execution such as the
    FAMILYTALK® rate plan offer introduced in the third quarter
    of 2003.                                                                                                       

Prepaid and reseller customer growth also
improved significantly over the prior year. Prepaid customer
growth in 2003 was positively impacted by our KIC® (Keep in
Contact) prepaid plan launched in the fourth quarter of 2002. We
also had a 68% growth in our reseller customer base during the
year. The increase in reseller customers compared with the prior
year can be attributed both to aggressive growth by our primary
reseller during 2003 and to a loss of approximately 371,000
WorldCom reseller customers in 2002, most of which occurred when
WorldCom made the decision to exit the wireless reseller
business in the second half of 2002.

For the year ended December 31, 2003, the
cellular/ PCS churn rate was 2.7%, a slight improvement from the
2.8% churn rate for the prior year. Churn rates in 2003 were
positively impacted by lower churn rates in our prepaid and
reseller customer bases, while our postpaid customer base churn
rate remained essentially unchanged.

In addition to our cellular and PCS licenses, we
owned FCC licenses to provide data services over a separate
frequency band. Our network at this band utilized a different
technology called Mobitex. Although our Mobitex
customer churn rate in 2003 only increased modestly compared
with 2002, gross customer additions were negatively impacted due
to the availability of new competitive data products over our
and other cellular/ PCS networks. Additionally, our Mobitex
customer churn rate was unfavorably impacted in 2003 as a result
of the deactivation of over 40,000 customers by one of our
resellers. We sold our Mobitex business in the fourth quarter of
2004.

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CINGULAR WIRELESS LLC





PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Historical Consolidated Data  For
    the years ended December 31, 2002 and 2003.

|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |       |       |      |  
|--------------------------------------------------------------------------------------- | ---------------------------------------------------------- | --------------------------- | ----------------------------- | ---------- | ------ | ------ | ------ | ------ | ------ | ------ | ---- | ---- | ---- | -- | ------ | ----- | ----- | ---- | -
|                                                                                        |                                                            |                             |                               |           
|                                                                                        |                                                            | Year Ended December 31,     |                               | Change    
|                                                                                        |                                                            |                             |                               |           
|                                                                                        |                                                            | 2002                        |                               | 2003       |        | $      |        | %     
|                                                                                        |                                                            |                             |                               |            |        |        |        |       
|                                                                                        |                                                            | (Restated)                  |                               | (Restated) |        |        |        |       
|Operating revenues                                                                      |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        | Local service revenue  voice                              |                             | $                             | 11,814     |        |        | $      | 12,133 |        |        |      | 319  |      |    |        | 2.7   | %    
|                                                                                        | Data revenue                                               |                             |                               | 286        |        |        |        | 454    |        |        |      | 168  |      |    |        | 58.7  |      
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        |                                                            | Total local service revenue |                               |            | 12,100 |        |        |        | 12,587 |        |      |      | 487  |    |        |       | 4.0   |     
|                                                                                        | Incollect roamer revenue                                   |                             |                               | 776        |        |        |        | 757    |        |        |      | (19  | )    |    |        | (2.4  | )    
|                                                                                        | Long distance                                              |                             |                               | 209        |        |        |        | 171    |        |        |      | (38  | )    |    |        | (18.2 | )    
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        |                                                            | Subscriber revenue          |                               |            | 13,085 |        |        |        | 13,515 |        |      |      | 430  |    |        |       | 3.3   |     
|                                                                                        | Outcollect revenue                                         |                             |                               | 701        |        |        |        | 586    |        |        |      | (115 | )    |    |        | (16.4 | )    
|                                                                                        | Other revenue                                              |                             |                               | 136        |        |        |        | 122    |        |        |      | (14  | )    |    |        | (10.3 | )    
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        |                                                            | Other service revenue       |                               |            | 837    |        |        |        | 708    |        |      |      | (129 | )  |        |       | (15.4 | )   
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        | Wireless service revenue                                   |                             |                               | 13,922     |        |        |        | 14,223 |        |        |      | 301  |      |    |        | 2.2   |      
|                                                                                        | Equipment sales                                            |                             |                               | 981        |        |        |        | 1,260  |        |        |      | 279  |      |    |        | 28.4  |      
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|Total operating revenues                                                                |                                                            |                             | 14,903                        |            |        |        | 15,483 |        |        |        | 580  |      |      |    | 3.9    |      
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|Operating expenses                                                                      |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        | Cost of services (excluding depreciation)                  |                             |                               | 3,594      |        |        |        | 3,681  |        |        |      | 87   |      |    |        | 2.4   |      
|                                                                                        | Cost of equipment sales                                    |                             |                               | 1,535      |        |        |        | 2,031  |        |        |      | 496  |      |    |        | 32.3  |      
|                                                                                        | Selling, general and administrative                        |                             |                               | 5,429      |        |        |        | 5,428  |        |        |      | (1   | )    |    |        |      |      
|                                                                                        | Depreciation and amortization                              |                             |                               | 1,849      |        |        |        | 2,089  |        |        |      | 240  |      |    |        | 13.0  |      
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        |                                                            | Total operating expenses    |                               |            | 12,407 |        |        |        | 13,229 |        |      |      | 822  |    |        |       | 6.6   |     
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|Operating income                                                                        |                                                            |                             | 2,496                         |            |        |        | 2,254  |        |        |        | (242 | )    |      |    | (9.7   | )    
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|Other income (expenses):                                                                |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        | Interest expense                                           |                             |                               | (911       | )      |        |        | (856   | )      |        |      | 55   |      |    |        | (6.0  | )    
|                                                                                        | Minority interest in earnings of consolidated
    entities |                             |                               | (123       | )      |        |        | (101   | )      |        |      | 22   |      |    |        | (17.9 | )    
|                                                                                        | Equity in net loss of affiliates                           |                             |                               | (274       | )      |        |        | (333   | )      |        |      | (59  | )    |    |        | 21.5  |      
|                                                                                        | Other, net                                                 |                             |                               | 29         |        |        |        | 41     |        |        |      | 12   |      |    |        | 41.4  |      
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        |                                                            |                             | Total other income (expenses) |            |        | (1,279 | )      |        |        | (1,249 | )    |      |      | 30 |        |       |       | (2.3 | )
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|Income before provision for income taxes and
    cumulative effect of accounting change |                                                            |                             | 1,217                         |            |        |        | 1,005  |        |        |        | (212 | )    |      |    | (17.4  | )    
|Provision for income taxes                                                              |                                                            |                             | 12                            |            |        |        | 28     |        |        |        | 16   |      |      |    | 133.3  |      
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|Income before cumulative effect of accounting
    change                                |                                                            |                             | 1,205                         |            |        |        | 977    |        |        |        | (228 | )    |      |    | (18.9  | )    
|Cumulative effect of accounting change, net of tax                                      |                                                            |                             | (32                           | )          |        |        |       |        |        |        | 32   |      |      |    | (100.0 | )    
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      
|                                                                                        | Net income                                                 |                             | $                             | 1,173      |        |        | $      | 977    |        |        |      | (196 | )    |    |        | (16.7 | )%   
|                                                                                        |                                                            |                             |                               |            |        |        |        |        |        |        |      |      |      |    |        |      

58



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CINGULAR WIRELESS LLC





PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



| |                   
| | ------------------
| | Operating Revenues

Total operating revenues, consisting of service
revenue and equipment sales, increased $580, or 3.9%, to $15,483
for the year ended December 31, 2003, compared with $14,903
for the prior year. The growth in service revenue was driven by
a larger average cellular/ PCS customer base, robust growth in
data revenue and increased regulatory fee revenue. Strong
customer growth and a significant increase in handset upgrade
activity in 2003 also contributed to increased equipment sales.
These increases were offset by lower roaming revenues. The
components of the change in operating revenues are described
below.

Service revenue.Service revenue, comprised of local service, roaming, long
distance and other revenues, increased $301, or 2.2%, compared
with the prior year.

The local service component of total service
revenue includes recurring monthly access charges, airtime
usage, including prepaid service, and charges for optional
features and services, such as voice mail, mobile-to-mobile
calling, roadside assistance, caller ID, handset insurance and
data services. It also includes billings to our customers for
the USF and other regulatory fees.

Key drivers impacting the 2003 increase in local
service revenue include a 3.6% increase in the average number of
cellular/ PCS customers, a 14.4% increase in local minutes of
use per customer and a continuing shift toward all-inclusive
rate plans that include roaming and long distance at no
additional charge. In addition, local service revenue related to
billings to our customers for the USF and other regulatory fees
increased $161 over the prior year. However, we experienced an
equivalent increase in Cost of services expenses for the
associated costs into the appropriate regulatory funds. See also
Operating Expenses  Cost of services
below. Notwithstanding the positive revenue impact of the
increase in average cellular/ PCS customers, we saw a decrease
in our cellular/ PCS ARPU. This decrease was driven by the
popularity and growth of our lower-ARPU FAMILYTALK® rate
plans and a 1.6% shift in the cellular/ PCS customer base mix as
of December 31, 2003, when compared with the prior year
end, from higher-ARPU postpaid customers to lower-ARPU prepaid
and reseller customers. Other factors negatively impacting local
service revenue include increased revenue deferrals associated
with our popular ROLLOVER® rate plans and the impact of the
July 1, 2003 adoption of Emerging Issues Task Force
(EITF) 00-21, Accounting for Revenue Arrangements with
Multiple Deliverables. This adoption resulted in a
reclassification of $35 in direct sales channel activation
revenue from local service revenue to equipment sales for the
year ended December 31, 2003. See also Note 1,
Summary of Significant Accounting Policies, in
Item 8, Financial Statements and Supplementary
Data  Historical Financial Statements 
Cingular Wireless LLC.

Increases in data revenue also positively
impacted local service revenue. For the year ended
December 31, 2003, data revenue, while less than 4% of
total local service revenue, comprised over a third of the
increase in total local service revenue compared with the prior
year. In 2003, there was a 118% growth in cellular/ PCS data
revenue compared with 2002. The increase in data revenue
reflected increased data service penetration and usage of SMS
short messaging and other data services with our cellular/ PCS
customers, as well as increased revenue per customer in our
Mobitex data business.

Roaming revenue, both incollect and outcollect
revenue, declined for the year ended December 31, 2003 when
compared with the prior year. Overall, reduced roaming revenue
was a function of lower negotiated roaming rates, which more
than offset an increase in roaming minutes. Incollect revenue
also was negatively impacted as a result of roaming minutes
being bundled with all-inclusive regional and national rate
plans.

59



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PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Long distance revenue for the year ended
December 31, 2003 comprised only 1.2% of total service
revenue and declined from the prior year, primarily as a
function of the inclusion of free long distance
minutes in many of our regional and national rate plans.

Cellular/ PCS ARPU for the year ended
December 31, 2003 was $51.32, a decrease of $0.82, or 1.6%,
compared with $52.14 for the year ended December 31, 2002.
Increases in ARPU related to higher customer usage and increased
regulatory fee revenue were more than offset by decreases
discussed below, thereby resulting in an overall ARPU reduction.
As noted above in the discussion of local service revenue,
increased sales of lower-ARPU FAMILYTALK® plans in the
second half of the year, in combination with a higher percentage
of lower-ARPU reseller and prepaid customers in our 2003
customer base, negatively impacted our overall ARPU when
compared with the prior year. Additionally, the impact of
increased revenue deferrals associated with our ROLLOVER®
rate plans plus the impact of the adoption of EITF 00-21
also had a negative impact on ARPU. Other unfavorable impacts
include on-going competitive pricing pressures and the
reductions in roaming and long distance revenue, as previously
noted.

Equipment sales.The
increase in equipment sales was principally a result of higher
unit sales reflecting a nearly 13.8% increase in cellular/ PCS
postpaid and prepaid gross customer additions and a significant
increase in the sale of upgrade handsets to our existing
customers compared with the prior year. The increased unit sales
for upgrades was a function of both our GSM network conversions
and our focused efforts to retain high value customers and to
increase the number of our customers under contract prior to the
implementation of wireless local number portability in late
November 2003. As mentioned earlier in the discussion on local
service revenues, for the year ended December 31, 2003,
equipment sales also increased $35 due to the impact of the
adoption of EITF 00-21.



| |                   
| | ------------------
| | Operating Expenses

Cost of services (exclusive of
depreciation).The cost of services
increase for the year ended December 31, 2003 compared with
the prior year was due to an increase in local system costs of
$221, partially offset by a $134 decrease in third party system
costs (i.e,roaming and long distance costs). Local
system cost increases were driven by a 19.1% growth in system
minutes of use, system expansion and the increased costs of
redundant TDMA and GSM networks required during the current GSM
system overlay. Local system costs were also impacted by a $161
increase over the prior year in costs related to payments into
the USF and other regulatory funds. As previously noted in the
discussion on service revenues, revenues were also increased by
an equivalent amount. The effect of this $161 increase in local
system costs in 2003 was almost entirely offset by $151 in
impairment losses recorded in the prior year related to
long-lived assets utilized in our Mobitex data network and
certain TDMA network assets. The primary contributor to lower
third party system costs was a $132 decrease in incollect
roaming costs compared with the prior year. This reduction was a
result of lower negotiated roaming rates plus cost reductions
associated with the Mobile Telecommunications Sourcing Act,
which more than offset increased volumes.

Cost of equipment
sales.Consistent with the prior
discussion related to equipment sales, for the year ended
December 31, 2003, the increase in cost of equipment sales
was driven primarily by higher unit sales associated with the
large increase in non-reseller gross customer additions and
upgrade unit sales. Upgrade costs increased over 55% for the
year, driven not only by higher unit sales but also by higher
per unit handset costs due to a shift to more advanced handsets,
such as the dual mode TDMA/ GSM handsets in use during our GSM
system conversion and newly introduced feature-rich GSM-only
handsets.

Selling, general and administrative
expenses.Selling, general and
administrative expenses for the year ended December 31,
2003 were flat when compared with the prior year as increases in
selling expenses

60



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CINGULAR WIRELESS LLC





PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

were offset by decreases in costs related to
maintaining and supporting our customer base and other
administrative costs.

Selling expenses, which include sales, marketing,
advertising and commission expenses for the year ended
December 31, 2003 were $2,609, an increase of $103, or
4.1%, compared with $2,506 for the prior year. This increase was
driven primarily by higher commission expenses and advertising
costs, partially offset by lower sales expenses. Higher
commission expenses were consistent with the 13.8% increase in
total cellular/ PCS postpaid and prepaid gross additions,
compared with the prior year. Higher advertising costs were
driven by increased costs in the latter part of the year related
to wireless local number portability implementation and the
promotion of our Fast Forward product offering. The
decrease in sales costs was principally due to reduced
employee-related costs as a result of our sales operation
reorganization in 2002.

Costs for maintaining and supporting our customer
base decreased $67, or 3.5%, for the year ended
December 31, 2003, compared with the prior year. This cost
decrease was principally due to lower bad debt and billing
expenses offset by increased residuals and upgrade commission
expenses related to our existing customer base. Lower bad debt
expense of $145 was primarily due to an overall improvement in
customer account agings and collections results and the net
impact of WorldCom bad debt write-offs of $39 in 2002 and a $20
WorldCom bad debt expense recovery in August 2003. Lower billing
expenses reflect cost reductions in the current year as a result
of system conversions and related consolidations in 2002. The
increase in upgrade commissions was consistent with the increase
in upgrade activity, as previously discussed.

Other administrative costs decreased $37, or
3.7%, for the year ended December 31, 2003, compared with
the prior year. Cost decreases include lower compensation and
benefits expenses and lower information technology and
development expenses. These decreases were partially offset by
higher legal settlement costs.

Depreciation and
amortization.For the year ended
December 31, 2003, depreciation expense increased by $267,
compared with the prior year, primarily due to on-going capital
spending, including our GSM overlay, in addition to increased
depreciation on TDMA assets in 2003 as a result of a review of
estimated service lives. See Critical Accounting Policies
and Estimates  Long-Lived Assets 
Depreciation and Amortization and also Note 4,
Property, Plant and Equipment in Item 8,
Financial Statements and Supplementary Data 
Historical Financial Statements   Cingular Wireless
LLC. For the year ended December 31, 2003,
amortization expense decreased by $27, primarily as a result of
certain finite-lived intangible assets becoming fully amortized
during the prior year.



| |                        
| | -----------------------
| | Other Income (Expenses)

Interest Expense.For the year ended December 31, 2003, interest expense on
the debt to our members, SBC and BellSouth, was lower by $73
when compared with the prior year. This decrease was the result
of a reduction in the fixed interest rate from 7.5% to 6.0%,
effective July 1, 2003. This $73 decrease was offset
primarily by a reduction in capitalized interest and an increase
in interest expense on higher capital lease obligations in 2003.
For the year ended December 31, 2003, the impact of the
interest rate swaps was minimal. See also Note 10,
Financial Instruments in Item 8,
Financial Statements and Supplementary Data 
Historical Financial Statements  Cingular Wireless
LLC.

Minority Interest in Earnings of Consolidated
Entities.For the year ended
December 31, 2003, the $22 decrease was due to lower
overall net income of our consolidated entities compared with
2002, including a $10 minority interest impact related to a $22
partnership legal settlement in the first quarter of 2003.

61



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CINGULAR WIRELESS LLC





PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Equity in Net Loss of
Affiliates.For the year ended
December 31, 2003, the increase from the prior year in
equity in net loss of affiliates was primarily due to an
increased loss of $89, principally related to higher
depreciation expense associated with capital contributions to
the GSMF venture, offset by a reduction of $29 as a result of
the consolidation of Salmon PCS LLC (Salmon). Salmon was
consolidated, effective January 1, 2003, as a result our
early adoption of FIN 46. See also Note 7,
Variable Interest Entities in Item 8,
Financial Statements and Supplementary Data 
Historical Financial Statements   Cingular Wireless
LLC.

Other, Net.For the
year ended December 31, 2003, the $12 increase in Other,
net from the prior year includes a $9 increase in interest
income on marketable securities. A one-time $23 gain in 2003 was
offset by a decrease of $23 in interest income from Salmon as a
result of its consolidation in 2003.



| |                                           
| | ------------------------------------------
| | Cumulative Effect of Accounting
    Change

The cumulative effect of a change in accounting
principle during the year ended December 31, 2002 was a
loss of $32, net of tax, and resulted from an impairment of
goodwill related to the Mobitex data business upon the adoption
of SFAS No. 142, Goodwill and Other Intangible
Assets(SFAS 142), effective January 1, 2002.

Liquidity and Capital Resources



| |                   
| | ------------------
| | Cash Flow Analysis



| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | Cash Flows for the Year Ended
    December 31, 2004, Compared with the Year Ended
    December 31, 2003

|                                                         |  |                         |        |        |  |   |         |   |  |   |         |   |  |  |        |   
|-------------------------------------------------------- |  | ----------------------- | ------ | ------ |  | - | ------- | - |  | - | ------- | - |  |  | ------ | --
|                                                         |  |                         |        |       
|                                                         |  | Year Ended December 31, |        | Change
|                                                         |  |                         |        |       
|                                                         |  | 2003                    |        | 2004   |  | $ |         | %
|                                                         |  |                         |        |        |  |   |         |  
|                                                         |  | (Restated)              |        |        |  |   |         |  
|Net cash provided by operating activities                |  | $                       | 3,686  |        |  | $ | 3,320   |   |  | $ | (366    | ) |  |  | (9.9   | )%
|Net cash used in investing activities                    |  |                         | (3,368 | )      |  |   | (41,077 | ) |  |   | (37,709 | ) |  |  | NM     |   
|Net cash provided by (used in) financing
    activities  |  |                         | (87    | )      |  |   | 36,970  |   |  |   | 37,057  |   |  |  | NM     |   
|                                                         |  |                         |        |        |  |   |         |   |  |   |         |   |  |  |        |   
|Net increase (decrease) in cash and cash
    equivalents |  |                         | 231    |        |  |   | (787    | ) |  |   | (1,018  | ) |  |  | (440.7 | )%
|Cash and cash equivalents at beginning of period         |  |                         | 908    |        |  |   | 1,139   |   |  |   | 231     |   |  |  | 25.4   | % 
|                                                         |  |                         |        |        |  |   |         |   |  |   |         |   |  |  |        |   
|Cash and cash equivalents at end of period               |  | $                       | 1,139  |        |  | $ | 352     |   |  | $ | (787    | ) |  |  | (69.1  | )%



---

NM  Not Meaningful

Net cash provided by operating
activities.The overall decrease in
net cash provided by operating activities was primarily due to
working capital changes, driven mostly by greater vendor
payments by us in the year ended December 31, 2004 versus
the year ended December 31, 2003. Cash generated from
operations was our primary source of operating funds in 2004 and
2003.

Net cash used in investing
activities.The primary contributors
to the overall increase in net cash used in investing activities
were the following acquisitions of business and licenses during
2004:



|  |                                                                     
|- | --------------------------------------------------------------------
| | AT&T Wireless for $35,543, net of cash on
    hand at AT&T Wireless;
| 
| | Spectrum licenses from NextWave for $1,400;                         
| 
| | Triton Virginia properties, including cash
    payment of $176; and 

62



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CINGULAR WIRELESS LLC





PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



|  |                                                                                                                                          
|- | -----------------------------------------------------------------------------------------------------------------------------------------
| | Wireless operations in Maryland and Louisiana and
    spectrum licenses in Maryland, Texas, Arkansas, Louisiana and
    Missouri for $49.

Additionally, capital expenditures during 2004
increased from 2003 amounts, and we purchased held-to-maturity
investments totaling $219, primarily related to the redemption
of the TeleCorp Wireless notes we assumed in conjunction with
our acquisition of AT&T Wireless. Capital expenditures
increased $715 primarily due to the $611 additional capital
expenditures of AT&T Wireless from the date of acquisition.
Partially offsetting the increases in cash used in investing
activities were net decreases in cash activity associated with
investments in and advances to equity affiliates. Capital
expenditures and cash contributions to equity affiliates
decreased $196 from the prior year primarily as a result of a
$180 decrease in capital and cash contributions to our GSMF
venture. Additionally, contributions to our venture with
AT&T Wireless, prior to our acquisition, decreased $16. Also
offsetting the increase in cash used in investing activities was
cash received from the disposition of assets, which increased
$181 from 2003. The dispositions in 2004 primarily included cash
receipts of $140 from the sale of our indirect interest in
Eurotel Bratislava a.s. and $45 from the sale of our
Mobitex business, Cingular Interactive.

Net cash provided by financing
activities.The primary contributor to
the overall increase in net cash provided by financing
activities was the receipt of $36,024 in contributions from
members related to our AT&T Wireless acquisition. In
addition, we received net funding from our members of $1,667
under our revolving credit agreement. These increases were
partially offset, when compared with 2003, by higher net
repayments of external debt of $466, higher net distributions to
minority interest of $108 and the repayment of $50 in member
loans in 2004. The net repayment of external debt in 2004 was
$530 and included repayments of $429 related to debt assumed in
our AT&T Wireless acquisition, $49 of Cingular Interactive
debt and $59 in capital lease payments.

We expect to have significant cash needs over the
next several years, as described below in Cash
Requirements.



| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | Cash Flows for the Year Ended
    December 31, 2003, Compared with the Year Ended
    December 31, 2002

|                                                        |  |              |        |            |  |   |        |   |  |   |      |   |  |  |        |  
|------------------------------------------------------- |  | ------------ | ------ | ---------- |  | - | ------ | - |  | - | ---- | - |  |  | ------ | -
|                                                        |  |              |        |            |  |  
|                                                        |  | Year Ended   |        |           
|                                                        |  | December 31, |        | Change    
|                                                        |  |              |        |           
|                                                        |  | 2002         |        | 2003       |  | $ |        | %
|                                                        |  |              |        |            |  |   |        |  
|                                                        |  | (Restated)   |        | (Restated) |  |   |        |  
|Net cash provided by operating activities               |  | $            | 3,592  |            |  | $ | 3,686  |   |  | $ | 94   |   |  |  | 2.6    | %
|Net cash used in investing activities                   |  |              | (3,585 | )          |  |   | (3,368 | ) |  |   | 217  |   |  |  | (6.1   | )
|Net cash provided by (used in) financing
    activities |  |              | 334    |            |  |   | (87    | ) |  |   | (421 | ) |  |  | (126.0 | )
|                                                        |  |              |        |            |  |   |        |   |  |   |      |   |  |  |        |  
|Net increase in cash and cash equivalents               |  |              | 341    |            |  |   | 231    |   |  |   | (110 | ) |  |  | (32.3  | )
|Cash and cash equivalents at beginning of period        |  |              | 567    |            |  |   | 908    |   |  |   | 341  |   |  |  | 60.1   |  
|                                                        |  |              |        |            |  |   |        |   |  |   |      |   |  |  |        |  
|Cash and cash equivalents at end of period              |  | $            | 908    |            |  | $ | 1,139  |   |  | $ | 231  |   |  |  | 25.4   | %
|                                                        |  |              |        |            |  |   |        |   |  |   |      |   |  |  |        |  

Net cash provided by operating
activities.The overall increase in
net cash provided by operating activities of $94, or 2.6%, was
primarily due to working capital changes, driven mostly by lower
vendor payments by us in the year ended December 31, 2003
versus the year ended December 31, 2002. Working capital
was negatively impacted in 2003 by an increase in handset
inventory as a result of higher gross customer additions, our
GSM conversion and preparatory initiatives for local wireless
number portability. Cash generated from operations was our
primary source of funds in 2003 and 2002.

Net cash used in investing
activities.The primary contributors
to the overall decrease in net cash used in investing activities
of $217, or 6.1%, were a decrease of $351 in capital
expenditures and a decrease of $50

63



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CINGULAR WIRELESS LLC





PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

due to a contractor engineering deposit in the
prior year. These decreases were offset by a $166 increase in
investments in and advances to equity affiliates and a $19
increase in license acquisitions.

The increase in investments in and advances to
equity affiliates for the year ended December 31, 2003
primarily reflects a $248 decrease in capital and cash
contributions to our GSMF venture as compared to 2002, offset by
net advance repayments of $396 in 2002 from Salmon as a result
of the return by the FCC of deposits relating to an FCC auction.
Capital expenditures and cash contributed to a network
infrastructure venture with AT&T Wireless totaled $18 for
the year ended December 31, 2003. There were no
contributions to this venture for the year ended
December 31, 2002.

Cash needs for acquisitions of licenses increased
by $19 in 2003, when compared with 2002. Acquisitions in 2003
consisted primarily of cash payments of $25 for spectrum in
Kansas, Texas, Arizona and Florida. In 2002, there was limited
acquisition activity of $6.

Net cash provided by (used in) financing
activities.The primary contributor to
the overall increase of net cash used in financing activities of
$421, or 126.0%, was a $489 decrease in contributions received
from our members, SBC and BellSouth, for the year ended
December 31, 2003, compared to year ended December 31,
2002. This was partially offset by a $46 decrease in net
distributions to minority interests, principally due to the
return of cash to fund GSM overlay construction in partnership
markets, and a $27 decrease in commercial paper repayments.
There was no commercial paper activity for the year ended
December 31, 2003. There was also an increase of $4 in
external debt repayments for the year ended December 31,
2003. The $4 increase is primarily attributable to an increase
of $21 for capital lease payments, offset by a $17 payment made
in 2002 to retire bonds issued by our Puerto Rico subsidiary.



| |                     
| | --------------------
| | Sources of Liquidity

Effective August 1, 2004, we entered into a
revolving credit agreement with SBC and BellSouth for them to
provide unsubordinated short-term financing on a pro rata basis
at an interest rate of LIBOR plus 0.05% for our ordinary course
operations based on our budget and forecast cash needs. The
agreement provides that in the event that we have available cash
(as defined) on any business day, such amount shall first be
applied to the repayment of the revolving loans, and any
remaining excess shall then be loaned to SBC and BellSouth, pro
rata, and ultimately applied on the first day of the subsequent
month to the repayment of the subordinated member loans from SBC
and BellSouth if we do not then require a cash advance under the
agreement. The initial term of the agreement expires in July
2005. The agreement provides that SBC and BellSouth may extend
its term and we expect them to do so for the foreseeable future.
Our members have investment grade credit ratings and we believe
they are able to meet the respective obligations under the
agreement. As a result of the commitment of SBC and BellSouth to
provide liquidity, we terminated our accounts receivable secured
borrowing program. During 2004, upon full repayment of
outstanding commercial paper, we terminated both our commercial
paper program and revolving bank credit facility. In October
2004, we repaid $50 of our member loans under this agreement. As
of December 31, 2004, the members had advanced $1,667 to us
under the agreement to fund operations, of which $899 was repaid
through February 2005. On March 4, 2005, our obligations
under this facility aggregated $1,064.

As of December 31, 2004, we had cash and
cash equivalents totaling $352. We expect to fund our capital
requirements for at least the next 12 months by using
existing cash balances; cash generated from operations; proceeds
from the sale of assets we are required to divest by the FCC and
the DOJ in connection with our acquisition of AT&T Wireless
and from the sale and distribution of non-strategic equity
investments; and, if necessary, drawing under our revolving
credit agreement with SBC and BellSouth.

64



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



| |                  
| | -----------------
| | Cash Requirements

Our operating capital requirements during 2005
will be driven primarily by capital expenditures associated with
our network and integration activities associated with our
acquisition of AT&T Wireless, installation of UMTS/ HSDPA 3G
technology in a number of markets, interest payments and costs
associated with acquiring and retaining new and existing
subscribers. Additional capital requirements will include
additional spectrum purchases to meet expected demand for
existing services. We do not anticipate significant cash
requirements for income tax payments during 2005 related to our
corporate subsidiaries due to existing, unutilized tax net
operating losses (NOLs).

Network Upgrades, Integration and
Expansion.The upgrade, integration
and expansion of the Cingular and AT&T Wireless networks and
the networks we acquired from Triton will require substantial
amounts of capital over the next several years. Management is
currently analyzing the condition of the acquired networks and
other capital expenditure needs and integration requirements.
For the year ended December 31, 2004, including the
incremental capital spending related to AT&T Wireless
subsequent to our acquisition, we spent $3,449 for our GSM/
GPRS/ EDGE network upgrade plus other network and non-network
capital expenditures. In addition, for the year ended
December 31, 2004, we spent $423 for equity contributions
to our network sharing ventures with T-Mobile and AT&T
Wireless prior to the acquisition.

We expect our capital expenditures in 2005 to be
in the $6,800 to $7,200 range, including our recently announced
plans to deploy 3G UMTS/HSDPA network technology over the next
two years in a number of urban and suburban markets concurrent
with our AT&T Wireless network integration.

To complement our current GSM/GPRS/EDGE network
overlay, broaden our nationwide coverage and lower our roaming
costs, we have negotiated numerous roaming agreements with GSM/
GPRS/ EDGE carriers since beginning our network overlay project.
These agreements enabled us to efficiently and immediately
expand our GSM/GPRS/EDGE footprint without incurring additional
capital expenditures.

Integration of AT&T
Wireless.Management plans to exit
certain activities of AT&T Wireless, including disposing of
redundant facilities, interests in certain non-strategic foreign
operations and domestic wireless assets required to be divested
by the FCC and the U.S. Department of Justice in connection
with the acquisition, and to integrate the AT&T Wireless
businesses with ours. These plans affect many areas of the
combined company, including sales and marketing, network,
information technology, customer care, supply chain and general
and administrative functions. In the third and fourth quarters
of 2004, we incurred $288 of integration and planning costs,
which are included primarily in selling, general and
administrative expenses in our consolidated statement of income.
We expect to incur significant costs over the next several years
associated with dispositions and integration activities.
Management is in the process of developing these plans and
expects to finalize them by the second quarter of 2005.

Also, we have entered into a contract to modify
the brand license agreement between AT&T Corp. (AT&T)
and AT&T Wireless to provide us with certain rights to the
AT&T brand for wireless services during a six-month
transition period following the acquisition, which ends in April
2005. As part of this contract, we committed to continue
purchasing network services from AT&T through
December 31, 2005.

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CINGULAR WIRELESS LLC





PART II (Dollars in Millions)




|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Contractual
Obligations.The following table
provides a summary of our contractual obligations as of
December 31, 2004.

|                               |  |       |        |                        |  |           |       |           |  |            |       |  |  |   |        |  |  |   |        | 
|------------------------------ |  | ----- | ------ | ---------------------- |  | --------- | ----- | --------- |  | ---------- | ----- |  |  | - | ------ |  |  | - | ------ | 
|                               |  |       |        |                       
|                               |  |       |        | Payments Due by Period
|                               |  |       |        |                       
|                               |  | Total |        | 2005                   |  | 2006-2007 |       | 2008-2009 |  | After 2009
|                               |  |       |        |                        |  |           |       |           |  |           
|Long Term Debt(1)              |  | $     | 33,888 |                        |  | $         | 1,977 |           |  | $          | 4,986 |  |  | $ | 11,363 |  |  | $ | 15,562 | 
|Capital Lease Obligations(2)   |  |       | 2,920  |                        |  |           | 82    |           |  |            | 168   |  |  |   | 185    |  |  |   | 2,485  | 
|Operating Leases(3)            |  |       | 8,103  |                        |  |           | 1,251 |           |  |            | 1,993 |  |  |   | 1,348  |  |  |   | 3,511  | 
|Dedicated Leased Lines(4)      |  |       | 572    |                        |  |           | 225   |           |  |            | 279   |  |  |   | 68     |  |  |   |       | 
|Purchase Obligations(5)        |  |       | 2,526  |                        |  |           | 1,414 |           |  |            | 1,014 |  |  |   | 77     |  |  |   | 21     | 
|Other Long-term Obligations(6) |  |       | 646    |                        |  |           | 86    |           |  |            | 248   |  |  |   | 268    |  |  |   | 44     | 
|                               |  |       |        |                        |  |           |       |           |  |            |       |  |  |   |        |  |  |   |        | 
|Total                          |  | $     | 48,655 |                        |  | $         | 5,035 |           |  | $          | 8,688 |  |  | $ | 13,309 |  |  | $ | 21,623 | 
|                               |  |       |        |                        |  |           |       |           |  |            |       |  |  |   |        |  |  |   |        | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Total long-term debt payments include interest of
    $12,498 and current portions of long-term debt totaling $474 at
    December 31, 2004. The 2008-2009 amount includes $9,628 of
    member loans due to SBC and BellSouth with a stated maturity
    date of June 30, 2008. See Note 9 to the audited
    consolidated financial statements included in Item 8,
    Financial Statements and Supplementary Data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(2) | Capital lease obligations include executory costs
    and imputed interest. See Note 9 to our audited
    consolidated financial statements included in Item 8,
    Financial Statements and Supplementary Data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(3) | Amounts include payments over reasonably assured
    renewals. See Note 18 to our consolidated financial
    statements included in Item 8, Financial Statements
    and Supplementary Data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(4) | Represents our commitments with our primary local
    exchange carriers for dedicated leased lines and includes $258
    of commitments to SBC, BellSouth and their affiliates. See
    Note 18 to our consolidated financial statements included
    in Item 8, Financial Statements and Supplementary
    Data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(5) | Purchase obligations include commitments for
    advertising and marketing, computer equipment and services,
    roaming, telecommunications services, network equipment and
    related maintenance and software development and related
    maintenance. Purchase obligations also include our commitment of
    $1,200 to purchase a minimum number of minutes from T-Mobile as
    a result of the termination of our GSMF joint venture. See
    Note 20 to our audited consolidated financial statements
    included in Item 8, Financial Statements and
    Supplementary Data. Additionally, purchase obligations
    include $142 of purchase commitments to SBC and BellSouth for
    telecommunications and other services as of December 31,
    2004. See Note 12 to our audited consolidated financial
    statements included in Item 8, Financial Statements
    and Supplementary Data. Purchase obligations do not
    include purchase orders, which we enter into in the ordinary
    course of business for network equipment, handsets, materials,
    supplies, and other items. During 2005, we expect our capital
    spending to be between $6,800 and $7,200.
|   
|(6) | Other Long-Term obligations include the payout of
    a put option of $145 in 2007 and the payout of a put option of
    $225 in 2008. See Note 7 to our audited consolidated
    financial statements included in Item 8, Financial
    Statements and Supplementary Data for further discussion
    of these put options. Other Long-Term obligations also include
    $276 of commitments due to Crown Castle International for
    monitoring and maintenance services related to our
    communications towers. See Note 19 to our audited
    consolidated financial statements included in Item 8,
    Financial Statements and Supplementary Data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

As of December 31, 2004, our defined benefit
pension plans were fully funded. We anticipate minimal cash
funding needs to meet the minimum required funding threshold in
2005. We anticipate approximately $50  $80 of funding
each year beginning in 2006. These amounts are not included in
the table above. We do not fund our post-retirement benefit
plans. See Note 17 to our consolidated financial statements
included in Item 8, Financial Statements and
Supplementary Data.

On February 15, 2005, the FCCs most
recent auction of wireless spectrum concluded. We participated
in Auction 58 as a non-controlling equity interest holder in
Edge Mobile, LLC (Edge). Edge was the successful bidder for, and
following the filing and review of the standard applications,
expects to be granted, 21 licenses. Edges total high bids
for the licenses in which we will have an indirect economic
interest amounted to $181. We are obligated to fund $174 of that
amount, which is not included in the table above. In December
2004, we contributed $31 in equity to Edge, which will be used
to pay for a portion of the licenses. We will contribute equity
and make advances to Edge in March 2005 to cover our remaining
obligation.

Debt Service.As of
December 31, 2004, we had $24,058 of consolidated
indebtedness and capitalized lease obligations, excluding
unamortized premiums/discounts and interest rate swap fair value
adjustments, but including the acquired AT&T Wireless debt
obligations. This debt includes $2,000 in unsecured Senior Notes
of Cingular Wireless LLC, $9,700 in unsecured Senior and Senior
Subordinated Notes of AT&T Wireless and TeleCorp Wireless,
Inc. (TeleCorp), $9,628 in unsecured, subordinated member loans
from SBC and BellSouth, $1,667 under our revolving credit
agreement with SBC and BellSouth, $1,011 in capital lease
obligations (excluding executory costs and imputed interest) and
$52 in other debt. Additional capital lease obligations for the
year ended December 31, 2004 were $94.

As a result of our acquisition in October 2004 of
AT&T Wireless, we assumed $9,906 in Senior Notes and Senior
Subordinated Notes, including Senior Notes of AT&T Wireless
totaling $9,500 and Senior Subordinated Notes of TeleCorp
totaling $200 and of Tritel PCS Inc. (Tritel) totaling $206 in
aggregate principal amount. Included in the Senior Notes of
AT&T Wireless are $6,500 principal amount of unsecured and
unsubordinated Senior Notes issued under a March 2001 private
placement, with $1,000 maturing on March 1, 2006; $3,000
maturing on March 1, 2011; and $2,500 maturing on
March 1, 2031. Fixed interest rates range from 7.35% to
8.75% per annum, payable semi-annually. Also included in
the Senior Notes are $3,000 of unsecured and unsubordinated
Senior Notes issued through an April 2002 registered public
offering by AT&T Wireless with $250 maturing on
April 18, 2005; $750 maturing on May 1, 2007; and
$2,000 maturing on May 1, 2012. Fixed interest rates range
from 6.875% to 8.125% per annum, payable semi-annually. The
Senior Notes of AT&T Wireless include customary covenants
for issuers like us.

As of July 1, 2003, we executed amended and
restated subordinated promissory notes to modify the terms of
our member loans. The amendments reduced the fixed interest rate
from 7.5% to 6.0% and extended the maturity date to
June 30, 2008. This change resulted in a reduction of
interest expense of approximately $145 per annum. We may
prepay the member loans at any time, generally, and are
obligated to prepay the member loans to the extent of excess
cash (as defined) pursuant to our revolving credit agreement.

SBC and BellSouth have agreed to subordinate
their repayment rights applicable to the member loans to the
repayment rights of our senior debt. Senior debt includes our
Senior Notes, including Senior Notes of AT&T Wireless, and
other borrowings from external parties designated as senior debt
to which SBC and BellSouth have specifically agreed to be
subordinate. The payment of principal and interest on the
subordinated member loans by us is prohibited in the event of
bankruptcy or an event of default in the

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

payment or prepayment of any principal of or
interest on any senior debt, or in the event of an acceleration
of the subordinated debt upon its default, until the senior debt
has been repaid in full.

Concurrently with our acquisition of AT&T
Wireless, we irrevocably deposited with the TeleCorp trustee
U.S. Treasury securities equal to the redemption price of
the TeleCorp Notes, along with interest due prior to the
Notes redemption date. In compliance with the indenture,
all of the U.S. Treasury securities mature prior to the
redemption date of the TeleCorp Notes. The trustee has been
notified that the TeleCorp Notes are being called for redemption
in July 2005; as such, these Notes are reflected within
Debt maturing within one year on the consolidated
balance sheet at December 31, 2004. In accordance with SFAS
No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities, the
TeleCorp Notes and corresponding assets placed in trust remain
on our consolidated balance sheet as of December 31, 2004
as we have not met the criteria required to derecognize the
liability.

We also irrevocably deposited with the Tritel
trustee U.S. Treasury securities, which upon maturity were
sufficient to fund the redemption of the Tritel Notes, along
with amounts of interest due prior to the Notes redemption
dates. In November 2004, the Tritel Notes were redeemed by the
trustee pursuant to the exercise of the make-whole call option
on the acquisition date.

Off-Balance Sheet
Arrangements.At December 31,
2004, we were obligated to pay certain capital leases assigned
to the GSMF venture of $31. We have investments in
unconsolidated affiliates, principally our joint venture with
T-Mobile. As required by GAAP, we have accounted for our joint
venture activity using the equity method of accounting. As a
result, the assets and liabilities of these ventures are not
included on our accompanying consolidated balance sheets and the
results of operations of the ventures are not included in our
accompanying consolidated statements of income, other than as
equity in earnings of unconsolidated affiliates. This venture
has been terminated, and its concluding operations are not
expected to have a material effect on our financial statements.
See Termination of GSMF Network Infrastructure Joint
Venture in Item 1, Our Business for
further discussion of this transaction.

Critical Accounting Policies and
Estimates

The preparation of financial statements in
conformity with accounting principles generally accepted in the
U.S. requires management to make estimates and assumptions
that affect the amounts reflected in the consolidated financial
statements and accompanying notes. We base our estimates on
historical experience, where applicable, and other assumptions
that we believe are reasonable under the circumstances. Actual
results may differ from those estimates under different
assumptions or conditions. There are certain critical estimates
that we believe require significant judgment when preparing our
financial statements. We consider an accounting estimate to be
critical if: 1) it requires us to make assumptions because
information was not available at the time or it included matters
that were highly uncertain at the time we were making our
estimate and 2) changes in the estimate or different
estimates that we could have selected may have had a material
impact on our financial condition or results of operations. The
various policies that are important to the portrayal of our
financial condition and results of operations include:



| |                                                                         
| | ------------------------------------------------------------------------
| | Business Combinations  Fair
    Value Estimates and Restructuring Costs



| |                                  
| | ---------------------------------
| | Nature of Critical Estimate Items

Fair Value
Estimates.We apply the accounting
requirements of SFAS No. 141, Business Combinations(SFAS 141) to the acquisitions of other businesses.
SFAS 141 requires that we record the net assets of acquired
businesses at fair value, and we must make estimates and
assumptions to determine the fair value

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

of these acquired assets and liabilities. We have
hired third party valuation specialists to assist us with these
fair value estimates.

Restructuring Costs.Additionally, we make estimates related to restructuring costs
associated with business acquisitions. Restructuring costs in a
business acquisition include primarily severance costs, costs
related to rationalizing our network and vacating targeted
retail and administrative facilities. For severance costs and
other exit activities related to employees and operations
acquired in a business combination, we apply the accounting
requirements of EITF Issue No. 95-3, Recognition of
Liabilities in Connection with a Purchase Business Combination(EITF 95-3). These costs are recorded as additional
consideration of a business combination. For severance costs
related to employees employed by Cingular by means outside of a
business combination and other costs related to exit or disposal
activities for obligations existing at the company other than by
means of a business combination, we apply the accounting
requirement of SFAS No. 112, Employers
Accounting for Postemployment Benefits  an Amendment
of FASB Statements Nos. 5 and 43(SFAS 112) and
SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities(SFAS 146). The costs
recorded under the provisions of SFAS 112 and SFAS 146
are generally recorded as charges to our operating results.



| |                           
| | --------------------------
| | Assumptions/ Approach Used

Fair Value
Estimates.We utilize a variety of
assumptions to estimate fair value of acquired assets and
assumed liabilities, including market data, estimated future
cash flows, growth rates, current replacement cost for similar
capacity for certain fixed assets, market rate assumptions for
contractual obligations and settlement plans for contingencies
and liabilities. The most significant assumptions within our
cash flow models are the discount rate and the growth rate. We
apply significant judgment in determining the fair values of
acquired assets and liabilities, including those acquired in our
acquisition of AT&T Wireless, notably property, plant and
equipment, licenses, customer relationship intangibles,
investments in and advances to equity affiliates, long-term
debt, deferred income taxes and goodwill. The valuations of
certain AT&T Wireless assets and liabilities as of
December 31, 2004 are based on preliminary valuations and
are subject to adjustment as additional information is obtained.

Restructuring Costs.We utilize a variety of assumptions for recording restructuring
costs, including numbers of employees to be terminated,
pre-severance employee attrition rates and average employee
compensation for involuntary termination benefits. For exit
costs related to vacating targeted retail and administrative
facilities, we make assumptions for future lease expense and
sub-lease income and timing for vacated space, discount rates
and contract termination charges to be incurred. Management
plans to dispose of certain operations and assets of AT&T
Wireless and to integrate the acquired businesses with ours.
These integration plans, which include selling international and
some domestic businesses and spectrum licenses, will affect many
areas of our operations, including sales and marketing, network,
information technology, customer care, supply chain and finance.
In connection therewith, we expect to incur significant costs
over the next several years associated with exiting activities
of AT&T Wireless and integrating the businesses. Management
is in the process of developing these plans and expects to
complete them in the first and second quarters of 2005.



| |                                     
| | ------------------------------------
| | Effect if Different Assumptions Used

Fair Value
Estimates.Changes to the assumptions
we used to estimate fair value could impact the recorded amounts
for acquired assets and liabilities, including but not limited
to property, plant and equipment, licenses, customer
relationship intangibles, investments in and advances to equity
affiliates, long-term debt, deferred income taxes and goodwill.
Significant changes to these balances could have a material
impact to our future reported results. Lower or higher fair
values assigned to property, plant, and

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

equipment and customer relationship intangibles
could result in lower or higher amounts of depreciation and
amortization recorded. Lower or higher fair values assigned to
debt could result in higher or lower interest expense, net of
premium amortization.

Restructuring Costs.Changes to estimates recorded under the provisions of EITF 95-3
will generally be reflected as an adjustment to the business
combination purchase price and will likely impact the amount of
goodwill recorded. Changes to estimates recorded under the
provisions of SFAS 112 and SFAS 146 will impact
current operating results as changes to those estimates occur.



| |                                                      
| | -----------------------------------------------------
| | Long-Lived Assets  Depreciation
    and Amortization



| |                                  
| | ---------------------------------
| | Nature of Critical Estimate Items

Depreciation  The wireless
communications industry is capital intensive. Depreciation of
operating assets constitutes a significant operating cost for
us. The cost of our property, plant and equipment, principally
wireless communications equipment, is charged to depreciation
expense over estimated useful lives.

Amortization  We have finite-lived
intangible assets, principally consisting of customer
relationship intangible assets as a result of acquisitions of
other businesses. The costs represent fair values placed on
customers of acquired businesses. The majority of our customer
relationship intangible assets resulted from our acquisition of
AT&T Wireless in the fourth quarter of 2004. The costs
related to finite-lived intangible assets are charged to
amortization expense over estimated useful lives.



| |                           
| | --------------------------
| | Assumptions/ Approach Used

Depreciation  We depreciate our
wireless communications equipment using the straight-line method
over estimated useful lives. Leasehold improvements, including
cell site acquisition and other site construction improvements,
are depreciated over the shorter of their estimated useful lives
or lease terms that are reasonably assured. We periodically
review changes in our technology and industry conditions,
migration patterns of our subscribers, asset retirement activity
and salvage values to determine adjustments to estimated
remaining useful lives and depreciation rates. Effective
January 1, 2003, we implemented the results of a review of
the estimated useful lives of our remaining TDMA network assets.
Useful lives were shortened to fully depreciate all such
equipment by December 31, 2008. While we continue to sell
and market TDMA services for the foreseeable future, the amount
of future projected cash flows to be derived from the TDMA
network assets is highly dependent upon the rate of transition
of existing customers using TDMA equipment to GSM/ GPRS/
EDGE-capable equipment, as well as other competitive and
technological factors. We determined that a reduction in the
useful lives of these assets was warranted based on the
projected transition of network traffic from TDMA to GSM/ GPRS/
EDGE. This change in estimate increased depreciation in 2003 by
$91. TDMA equipment acquired after January 1, 2003 was
assigned estimated useful lives not to exceed six years.

Due to the accelerated migration of traffic to
GSM/ GPRS/ EDGE experienced in 2004, we again evaluated the
estimated useful lives of our TDMA equipment. This review was
completed in the fourth quarter of 2004 and, effective
October 1, 2004, useful lives were further shortened to
fully depreciate all TDMA equipment by December 31, 2007.
This change in estimate increased depreciation expense in the
fourth quarter of 2004 by $61 and is estimated to increase 2005
depreciation expense by approximately $246.

Amortization  The majority of our
customer relationship intangible assets are amortized over a
five-year period using the sum-of-the years digit method.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



| |                                     
| | ------------------------------------
| | Effect if Different Assumptions Used

Actual economic lives may differ from estimated
useful lives. Periodic reviews could result in a change in our
depreciable and amortizable lives and therefore our depreciation
and amortization expense in future periods.

Depreciation  We continue to review
the useful lives of the TDMA assets throughout the period of
transition of customers to GSM/ GPRS/ EDGE and UMTS equipment to
determine whether further changes are warranted. Additional
changes to shorten depreciable lives may be necessary. We
believe useful lives of our TDMA assets are appropriate as of
December 31, 2004.

Amortization  The majority of our
customer relationship intangible assets resulted from our
acquisition of AT&T Wireless and are being amortized over an
estimated useful life of five years. If we had assumed a useful
life of four years, our amortization expense for the
67 days post-acquisition would have been $82 greater than
the amortization expense we recorded within our 2004 results. If
we had assumed a useful life of six years, our amortization
expense for the 67 days post-acquisition would have been
$55 less than the amortization expense we recorded within our
2004 results.



| |                                   
| | ----------------------------------
| | Valuation of Long-Lived
    Assets



| |                                 
| | --------------------------------
| | Nature of Critical Estimate Item

We review finite-lived long-lived assets,
principally consisting of property, plant and equipment and
customer relationship intangible assets, for impairment based on
the requirements of SFAS No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets(SFAS 144). This impairment review is performed
whenever events or changes in circumstances indicate that the
carrying amount of an asset group may not be recoverable. For
assets we intend to hold and use, if the total of the expected
future undiscounted cash flows from the asset group is less than
the carrying amount of the asset group, a loss is recognized for
the difference between the fair value and the carrying value of
the asset group. The asset group to be held and used represents
the lowest level for which identifiable cash flows are largely
independent of the cash flows of other groups of assets and
liabilities. We have determined that the lowest level for which
cash flows are largely independent of the cash flows of other
groups is the consolidated company level. For assets we plan to
dispose of, a loss is recognized if the carrying amount of the
assets in the disposal group is more than fair value, net of the
costs of disposal.



| |                           
| | --------------------------
| | Assumptions/ Approach Used

In analyzing finite-lived long-lived assets for
potential impairment, significant assumptions used in
determining the undiscounted cash flows of the asset group
include:



|  |                                                                                                                                                                                                               
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | cash flows attributed to the asset group;                                                                                                                                                                     
| 
| | future cash flows of the asset group, including
    estimates of terminal values, which incorporate our views of
    growth rates for the related business and anticipated future
    economic conditions; and
| 
| | period of time over which the assets will be held
    and used.                                                                                                                                               

Similar assumptions are used to determine the
fair value of the asset group when using a discounted cash flow
model. In addition, an estimated discount rate is used to
incorporate the time value of money and risk inherent in the
future cash flows, as well as estimates for any costs of
disposal or salvage values. We believe that our estimates are
consistent with assumptions that marketplace participants would
use in their estimates of fair value.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



| |                                     
| | ------------------------------------
| | Effect if Different Assumptions Used

The use of different estimates or assumptions
within our undiscounted cash flow models (e.g.,growth
rates, future economic conditions, estimates of terminal values)
could result in undiscounted cash flows that are lower than the
current carrying value of an asset group, thereby requiring the
need to compare the carrying value of the asset group to its
fair value.

The use of different discount rates when
determining the fair value of the asset group could result in
different fair values, and impact any related impairment
charges. A different method of determining fair value, other
than a discounted cash flow model, could result in a lower or
higher fair value for the asset group.

In the fiscal year ended December 31, 2004,
we recognized an impairment charge associated with our Mobitex
data business, which was sold in October 2004.



| |                         
| | ------------------------
| | Goodwill 
    Valuation



| |                                 
| | --------------------------------
| | Nature of Critical Estimate Item

We review goodwill for impairment based on the
requirements of SFAS No. 142, Goodwill and Other
Intangible Assets(SFAS 142). In accordance with
SFAS 142, goodwill is tested for impairment at the
reporting unit level on an annual basis or on an interim basis
if an event occurs or circumstances change that would reduce the
fair value of a reporting unit below its carrying value. These
events or circumstances would include a significant change in
the business climate, legal factors, operating performance
indicators, competition, sale or disposition of a significant
portion of the business or other factors. We perform our annual
goodwill impairment test as of each October 1st.



| |                           
| | --------------------------
| | Assumptions/ Approach Used

In accordance with SFAS 142, we are required
to test goodwill at the reporting unit level as defined by
reference to our operating segment determined under
SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information. We have one reporting
unit, wireless communications services, for which we test
goodwill for impairment. The goodwill impairment test requires
us to estimate the fair value of our overall business enterprise.

In analyzing goodwill for potential impairment,
we use projections of future cash flows from our reporting unit
to determine whether the reporting units estimated fair
value exceeds its carrying value. These projections of cash
flows are based on our views of growth rates and anticipated
future economic conditions and the appropriate discount rates
relative to risk and estimates of residual values. We believe
that our estimates are consistent with assumptions that
marketplace participants would use in their estimates of fair
value.

We were not required during 2004 to test goodwill
for impairment at an interim date.



| |                                     
| | ------------------------------------
| | Effect if Different Assumptions Used

The use of different estimates or assumptions
within our discounted cash flow model (e.g.,growth
rates, future economic conditions, discount rates and estimates
of terminal values) when determining the fair value of our one
reporting unit could result in different values and may affect
any related goodwill impairment charge. Additionally, a change
in our reporting unit structure would result in the requirement
to test goodwill for impairment at multiple reporting units.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

For the annual goodwill impairment test performed
as of October 1, 2004, we had no impairment of our
consolidated goodwill balance. A ten percent change in the
estimated fair value of our reporting unit as of October 1
would not have impacted the results of our goodwill impairment
test.

As a result of the acquisition of AT&T
Wireless in October 2004, our goodwill balance increased to
$21,637 as of December 31, 2004. Goodwill resulting from
our acquisition of AT&T Wireless was assigned to our one
reporting unit. We will test goodwill for impairment during the
fourth quarter of 2005 unless events occur or circumstances
change that would reduce the fair value of our one reporting
unit below its carrying value.



| |                                                                   
| | ------------------------------------------------------------------
| | FCC Licenses  Valuation of
    Indefinite-Lived Intangible Assets



| |                                 
| | --------------------------------
| | Nature of Critical Estimate Item

We review indefinite-lived intangible assets for
impairment based on the requirements of SFAS 142. In
accordance with SFAS 142, indefinite-lived intangible
assets, consisting of FCC licenses, are tested for impairment on
an annual basis or on an interim basis if an event occurs or
circumstances change that would indicate the asset might be
impaired. We perform our annual FCC license impairment test as
of each October 1st. The impairment test requires us to
estimate the fair value of our licensing costs. We estimate the
fair values of the majority of our FCC licenses in the
aggregate, using a discounted cash flow model. We evaluate the
fair values of a limited number of nonstrategic licenses
separately, primarily using comparative market transaction data.
We were not required during 2004 to test FCC licenses for
impairment at an interim date.



| |                           
| | --------------------------
| | Assumptions/ Approach Used

In accordance with EITF 02-7, Unit of
Accounting for Testing of Impairment of Indefinite-Lived
Intangible Assets,impairment tests for the majority of our
FCC licenses are performed on an aggregate basis. As of
October 1, 2004, our 2004 annual FCC license impairment
testing date, we had interests in FCC licenses in markets where
we do not currently provide service. The majority of these
licenses were granted to Salmon in October 2001. As we plan to
construct an operational network in the majority of these
licensed territories in the near future, a majority of these
licenses are included in the aggregate test based on their
strategic importance to our future business plans. The carrying
value of licenses in markets where we do not currently provide
service at October 1, 2004 was approximately $500.

We estimate the fair value of our aggregated FCC
licenses using a discounted cash flow model. The approach used
in determining the fair value of the FCC licenses includes the
following assumptions:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | start-up model assumption with FCC licenses as
    the only asset owned by us;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| 
| | cash flow assumptions incorporated in regard to
    investment in a network, the development of distribution
    channels and customer base and other critical inputs for making
    the business operational. The assumptions underlying these
    inputs are based upon a combination of our historical results
    and trends, our business plans and market participant data; as
    these inputs are included in determining free cash flows of the
    business, the present value of the free cash flows of the
    business, after investment in the network, customers, etc. is
    attributable to the FCC licenses.
| 
| | weighted average cost of capital for a start-up
    asset; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| 
| | long-term rate of growth for our business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

We believe that our estimates are consistent with
assumptions that marketplace participants would use in their
estimates of fair value. We corroborate our determination of
fair value of the FCC licenses, using the discounted cash flow
approach described above, with other market-based valuation
metrics.

The fair value of any nonstrategic FCC licenses
not included in the aggregate license impairment test is
determined by obtaining market data on recent FCC license
transactions, if available, and deriving estimates of fair value
for each license based on certain characteristics of the license
and the related market, including geographic location, market
size, megahertz frequency and population density.



| |                                     
| | ------------------------------------
| | Effect if Different Assumptions Used

The use of different estimates or assumptions
within our discounted cash flow model when determining the fair
value of our FCC licenses or using a methodology other than a
discounted cash flow model assuming a start-up asset could
result in different values for our FCC licenses and may affect
any related impairment charge. The most significant assumptions
within our discounted cash flow model are the discount rate and
the growth rate. Additionally, a change in managements
future business plans or disposition of one or more FCC licenses
could result in the requirement to test certain FCC licenses for
impairment on an individual basis rather than on an aggregate
basis. If any legal, regulatory, contractual, competitive,
economic or other factors were to limit the useful lives of our
indefinite-lived FCC licenses, we would be required to test
these intangible assets for impairment in accordance with
SFAS 144 and amortize the intangible asset over its
remaining useful life.

Actual market prices for our nonstrategic FCC
licenses could differ from those derived in our analysis
resulting in different values for our nonstrategic licensing
costs and any related impairment charges.

For the 2004 license impairment test performed as
of October 1, the fair value of the group of aggregated FCC
licenses was significantly in excess of its carrying value. A
ten percent change in the estimated fair value of the aggregated
FCC licenses would not have impacted the results of our 2004
annual license impairment test.

Subsequent to our annual FCC license impairment
review, we acquired AT&T Wireless. As a result of the
acquisition of AT&T Wireless, our FCC license balance
increased to $24,748 as of December 31, 2004. We will test
FCC licenses for impairment during the fourth quarter of 2005
unless an event occurs or circumstances change that would
indicate the asset might be impaired.



| |                                                          
| | ---------------------------------------------------------
| | Accounts Receivable  Allowance
    for Doubtful Accounts



| |                                  
| | ---------------------------------
| | Nature of Critical Estimate Items

We maintain allowances for doubtful accounts for
estimated losses resulting from the failure of our customers to
make required payments.



| |                           
| | --------------------------
| | Assumptions/ Approach Used

We base our estimates primarily on our historical
write-off experience, net of recoveries, and the aging of
accounts receivable balances. Our collection policies and
procedures vary by credit class and prior payment history of
customers.



| |                                     
| | ------------------------------------
| | Effect if Different Assumptions Used

Management believes that the allowance for
doubtful accounts is adequate to cover estimated losses in
customer accounts receivable balances under current conditions.
However, changes to the allowance for

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

doubtful accounts may be necessary in the event
that the financial condition of our customers improves or
deteriorates. Additionally, changes may be necessary if we
adjust our credit standards for new customers or change our
collection practices. Either of these situations may result in
write-off patterns that differ from our historical experience. A
ten percent change in our allowance for doubtful accounts at
December 31, 2004 would have resulted in a $32 pre-tax
impact to our reported results.



| |                                                                     
| | --------------------------------------------------------------------
| | Service Revenues 
    Rollover®Rate Plans
    and Unbilled Revenues



| |                                 
| | --------------------------------
| | Nature of Critical Estimate Item

ROLLOVER® Rate Plans  Certain
customer rate plans include a feature whereby unused anytime
minutes do not expire each month but rather are available, under
certain conditions, for future use for a period not to exceed
one year from the date of purchase. We defer revenue based on an
estimate of the portion of minutes expected to be utilized prior
to expiration.

Unbilled Revenues  The majority of our
postpaid customers acquired through our acquisition of AT&T
Wireless are billed in arrears. For those customers, our billing
cycle cut-off times require us to estimate service revenues
earned but not yet billed at the end of each month.



| |                           
| | --------------------------
| | Assumptions/ Approach Used

ROLLOVER® Rate Plans  Historical
customer usage patterns, which have been consistent and which we
view to be reliable for purposes of gauging predictive behavior,
allow us to estimate the number of minutes expected to be
utilized, as well as those which are likely to expire or be
forfeited. No deferral of revenue is recorded for the minutes
that are expected to expire or be forfeited, as no future
performance is expected to be required by us, nor is there any
obligation to refund or redeem for value expired minutes. We
record an obligation for those minutes we estimate will be
utilized based on a weighted-average of the per minute airtime
rate implicit in the price of our ROLLOVER® rate plans.

During the second quarter of 2004, we modified
our estimate for calculating the deferral to incorporate more
refined customer data and usage patterns, which in our view,
more accurately reflects the estimate of the future utilization
of those minutes based on historical trends. This change in
estimate resulted in a $63 decrease in the deferral recorded as
of December 31, 2004, as compared to the deferral that
would have been recorded prior to making the change.

The balance of the deferral was $103 and $146 as
of December 31, 2003 and 2004, respectively.

Unbilled Revenues  We estimate our
unbilled services revenue by reviewing historical minutes of use
processed, adjusted for differences in the types and number of
days customer promotions, seasonality factors and customer
levels.



| |                                     
| | ------------------------------------
| | Effect if Different Assumptions Used

ROLLOVER® Rate Plans  If our
assumptions regarding expected usage of ROLLOVER® minutes
changes or ROLLOVER® rate plan pricing changes, our
estimate of the future obligation associated with minutes to be
deferred could differ, resulting in an increase or decrease to
our deferred and service revenues.

Unbilled Revenues  Actual services
revenue could be greater or lower than amounts estimated due to
customer levels and their usage differing from our adjusted
historical experience. Any adjustments will be made in the
following quarter for the differences between the actual
services revenue billed and the previously accrued amounts.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations



---

We have discussed the development and selection
of these critical accounting policies with the Audit Committee
of the Board of Directors of our Manager, and the Audit
Committee has reviewed the disclosure of these critical
accounting policies in this Managements Discussion and
Analysis of Financial Condition and Results of Operations.

Related Party Transactions

We incurred the following related party charges:

|                                   |  |                         |     |      |  |      |     |  |  |   |     | 
|---------------------------------- |  | ----------------------- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|                                   |  |                        
|                                   |  | Year Ended December 31,
|                                   |  |                        
|Type of Service(1)                 |  | 2002                    |     | 2003 |  | 2004
|                                   |  |                         |     |      |  |     
|Agent commissions and compensation |  | $                       | 46  |      |  | $    | 103 |  |  | $ | 67  | 
|Interconnect and long distance(2)  |  |                         | 663 |      |  |      | 815 |  |  |   | 927 | 
|Other services                     |  |                         | 85  |      |  |      | 77  |  |  |   | 97  | 



---



|    |                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represent charges from SBC, BellSouth and their
    affiliates. See Note 9 to our audited consolidated
    financial statements included in Item 8, Financial
    Statements and Supplementary Data for further discussion
    related to interest expense on debt due to members.              
|   
|(2) | The increase in interconnect and long distance
    charges in 2003 resulted primarily from redundant expenses
    related to operating dual networks while transitioning our
    network from TDMA to GSM and the selection of SBC and BellSouth
    as preferred long distance service providers.

Additionally, we have purchase commitments to
SBC, BellSouth and their affiliates of $258 for dedicated lease
lines used to provide interconnection services and $142 for
telecommunications and other services at December 31, 2004.
See Note 12 to our audited consolidated financial
statements included in Item 8, Financial Statements
and Supplementary Data.

We had receivables from affiliates of $81 and
$247 and payables to affiliates of $135 and $109 at
December 31, 2003 and 2004, respectively, primarily with
SBC, BellSouth and GSMF. See Notes 6 and 12 to our audited
consolidated financial statements included in Item 8,
Financial Statements and Supplementary Data for
further discussion of affiliate receivables and payables.

For the year ended December 31, 2002, SBC
and BellSouth made cash contributions to us of $499 for general
corporate purposes. In October 2004, SBC and BellSouth
contributed $36,024 to finance the acquisition of AT&T
Wireless. See Note 3 to our audited consolidated financial
statements included in Item 8, Financial Statements
and Supplementary Data for further discussion of the
AT&T Wireless acquisition.

Recent Accounting Pronouncements

See the section, New Accounting Standards, in
Note 1, Summary of Significant Accounting
Policies in Item 8, Financial Statements and
Supplementary Data.






|         |                                                              
|-------- | -------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosure
    About Market Risk

The majority of our financial instruments are
medium- and long-term fixed rate notes and member loans.
Fluctuations in market interest rates can lead to significant
fluctuations in the fair values of these fixed rate instruments.
In addition, we are exposed to market risks, primarily from
changes in interest rates and to a lesser degree from foreign
currency exchange rates. To manage exposure to these
fluctuations, manage

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|         |                                                              
|-------- | -------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosure
    About Market Risk

capital costs, control financial risks and
maintain financial flexibility over the long term, we engage
from time to time in hedging transactions that have been
authorized by the board of directors of our manager. We do not
anticipate any significant changes in our objectives and
strategies with respect to managing such exposures. We do not
use derivatives for trading purposes, to generate income or to
engage in speculative activity.

At December 31, 2004, we had outstanding an
aggregate of $9,628 in unsecured, subordinated member loans from
SBC and BellSouth with a fixed interest rate of 6.0% and a
stated maturity of June 30, 2008. We also had outstanding
$11,700 principal amount of unsecured notes with fixed interest
rates ranging from 5.625% to 10.625% and with maturity dates
between 2005 and 2031. As of December 31, 2004, we had $250
of fixed-to-floating interest rate swaps related to our
five-year unsecured Senior Notes. A change in interest rates of
100 basis points would change our interest expense as a
result of the swaps as of December 31, 2004 by $3 per
annum. We also have capital leases outstanding of $1,007 with
fixed interest rates ranging from 6.0% to 9.6% and of $4 with a
fixed interest rate of 5.56%.

As of December 31, 2004, we had $1,689 of
floating rate borrowings, which includes $1,667 outstanding
under our revolving credit agreement with SBC and BellSouth
carrying an interest rate of LIBOR plus 0.05%. A change in
interest rates of 100 basis points would change our
interest expense on floating rate debt balances as of
December 31, 2004 by $17 per annum. Through February
2005, we repaid $899 of the outstanding borrowings.

In December 2004, we signed a definitive
agreement to sell our indirect interest in IDEA, a cellular
telecommunications company in India, to a joint venture between
STT Communications Ltd. and TM International Sdn, a wholly owned
subsidiary of Telekom Malaysia Berhd. We will, upon closing of
the transaction, receive the U.S. dollar equivalent of
Rupees 9,108,628,130 based upon the exchange rate two business
days before the transaction closes. The U.S. dollar
equivalent was approximately $210 as of December 31, 2004.
We recorded a pretax unrealized currency translation adjustment
of $10 within other comprehensive income (loss) at
December 31, 2004 for the increase in the U.S. dollar
equivalent which occurred between the AT&T Wireless
acquisition date and December 31, 2004. The transaction is
subject to, among other things, approval by several regulatory
agencies in India as well as the lenders of IDEA Cellular Ltd.

The risk management discussion above, related to
our market risks, contains forward-looking statements and
represents, among other things, an estimate of possible changes
in fair value that would occur assuming changes in interest
rates. Future impacts of market risk would be based on actual
developments in the financial markets. See Cautionary Language
Concerning Forward-Looking Statements immediately following
Part IV of this Annual Report.

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|        |                                               
|------- | ----------------------------------------------
|Item 8. | Financial Statements and Supplemental
    Data

|                                                                              |                                                                                                                                            |                                                     |  |     |     | 
|----------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------- |  | --- | --- | 
|a. Documents filed as part of the report                                      |                                                                                                                                            |                                                     |  |    
|(1) Financial Statements                                                      |                                                                                                                                            |                                                     |  |    
|                                                                              | Cingular Wireless LLC                                                                                                                      |                                                     |  |     |    
|                                                                              | Report of Independent Registered
    Public Accounting Firm  Ernst & Young LLP                                                            |                                                     |  | 81  |    
|                                                                              | Report of Independent Registered
    Public Accounting Firm  PricewaterhouseCoopers LLP                                                   |                                                     |  | 82  |    
|                                                                              | Consolidated Balance Sheets as of
    December 31, 2003 (restated) and 2004                                                                |                                                     |  | 83  |    
|                                                                              | Consolidated Statements of Income for
    the years ended December 31, 2002 (restated), 2003
    (restated), and 2004                      |                                                     |  | 84  |    
|                                                                              | Consolidated Statements of Changes in
    Members Capital for the years ended December 31, 2002
    (restated), 2003 (restated), and 2004 |                                                     |  | 85  |    
|                                                                              | Consolidated Statements of
    Comprehensive Income for the years ended December 31, 2002
    (restated), 2003 (restated), and 2004        |                                                     |  | 86  |    
|                                                                              | Consolidated Statements of Cash Flows
    for the years ended December 31, 2002 (restated), 2003
    (restated), and 2004                  |                                                     |  | 87  |    
|                                                                              | Notes to Consolidated Financial
    Statements                                                                                             |                                                     |  | 88  |    
|                                                                              | GSM Facilities LLC                                                                                                                         |                                                     |  |     |    
|                                                                              | Report of Independent Auditors 
    Ernst & Young LLP                                                                                     |                                                     |  | 153 |    
|                                                                              | Report of Independent Registered
    Public Accounting Firm  PricewaterhouseCoopers LLP                                                   |                                                     |  | 154 |    
|                                                                              | Consolidated Balance Sheets as of
    December 31, 2003 (restated), and 2004                                                               |                                                     |  | 155 |    
|                                                                              | Consolidated Statements of Operations
    for the years ended December 31, 2002 (restated), 2003
    (restated), and 2004                  |                                                     |  | 156 |    
|                                                                              | Consolidated Statements of Changes in
    Members Capital for the years ended December 31, 2002
    (restated), 2003 (restated), and 2004 |                                                     |  | 157 |    
|                                                                              | Consolidated Statements of Cash Flows
    for the years ended December 31, 2002 (restated), 2003
    (restated), and 2004                  |                                                     |  | 158 |    
|                                                                              | Notes to Consolidated Financial
    Statements                                                                                             |                                                     |  | 159 |    
|(2) Financial Statement Schedule as set
    forth under Item 8 of this Report |                                                                                                                                            |                                                     |  |    
|                                                                              | Cingular Wireless LLC                                                                                                                      |                                                     |  |     |    
|                                                                              |                                                                                                                                            | Schedule II  Valuation and
    Qualifying Accounts |  |     | 168 | 

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PART II (Dollars
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|        |                                               
|------- | ----------------------------------------------
|Item 8. | Financial Statements and Supplemental
    Data

CONSOLIDATED FINANCIAL STATEMENTS

CINGULAR WIRELESS LLC


Years Ended December 31, 2002 (restated),
2003 (restated) and 2004


with Report of Independent Registered Public
Accounting Firm


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|        |                                               
|------- | ----------------------------------------------
|Item 8. | Financial Statements and Supplemental
    Data

CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2002 (Restated),
2003 (Restated) and 2004

|                                                                                         |  |  |    | 
|---------------------------------------------------------------------------------------- |  |  | -- | 
|Contents                                                                                 |  |  |    | 
|Report of Independent Registered Public
    Accounting Firm  Ernst & Young LLP          |  |  | 81 | 
|Report of Independent Registered Public
    Accounting Firm  PricewaterhouseCoopers LLP |  |  | 82 | 
|Audited Consolidated Financial Statements                                                |  |  |    | 
|Consolidated Balance Sheets                                                              |  |  | 83 | 
|Consolidated Statements of Income                                                        |  |  | 84 | 
|Consolidated Statements of Changes in
    Members Capital                               |  |  | 85 | 
|Consolidated Statements of Comprehensive Income                                          |  |  | 86 | 
|Consolidated Statements of Cash Flows                                                    |  |  | 87 | 
|Notes to Consolidated Financial Statements                                               |  |  | 88 | 

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|        |                                               
|------- | ----------------------------------------------
|Item 8. | Financial Statements and Supplemental
    Data

REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

Board of Directors and Shareowners

Cingular Wireless Corporation, Manager of


Cingular Wireless
LLC


We have audited the accompanying consolidated
balance sheets of Cingular Wireless LLC as of December 31,
2003 and 2004 and the related consolidated statements of income,
changes in members capital, comprehensive income and cash
flows for each of the three years in the period ended
December 31, 2004. Our audits also included the financial
statement schedule listed in the Index at Item 15a(2).
These financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits. The
financial statements of Omnipoint Facilities Network II,
LLC (Omnipoint), a wholly owned subsidiary of GSM Facilities,
LLC (an equity investee in which the Company has an approximate
60% interest at December 31, 2004), have been audited by
other auditors whose report has been furnished to us; insofar as
our opinion on the consolidated financial statements relates to
the 2003 and 2004 amounts included for Omnipoint, it is based
solely on their report. In the consolidated financial
statements, the Companys indirect investment in Omnipoint
is stated at $770 million and $880 million,
respectively, at December 31, 2003 and 2004, and the
Companys equity in net losses of Omnipoint is stated at
$100 million and $135 million, for the years then
ended.

We conducted our audits in accordance with
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, based on our audits and the
report of other auditors, the consolidated financial statements
referred to above present fairly, in all material respects, the
consolidated financial position of Cingular Wireless LLC and
subsidiaries at December 31, 2003 and 2004, and the
consolidated results of their operations and their cash flows
for each of the three years in the period ended
December 31, 2004, in conformity with U.S. generally
accepted accounting principles. Also, in our opinion, the
related financial schedule when considered in relation to the
basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.

As described in Note 5 to the consolidated
financial statements, in 2002 the Company adopted Statement of
Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets.

As described in Note 2 to the consolidated
financial statements, the accompanying consolidated balance
sheet as of December 31, 2003 and the related consolidated
statements of income, changes in members capital,
comprehensive income and cash flows for each of the years ended
December 31, 2002 and 2003 have been restated.



| |                      
| | ---------------------
| | /s/ ERNST & YOUNG LLP

Atlanta, Georgia

March 4, 2005


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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Members and Board of Directors of GSM
Facilities, LLC:

In our opinion, the accompanying balance sheets
and the related statements of operations, of members
equity and of cash flows (not presented separately herein)
present fairly, in all material respects, the financial position
of Omnipoint Facilities Network II, LLC (the Company) at
December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years ended
December 31, 2004 and 2003 in conformity with accounting
principles generally accepted in the United States of America.
These financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

As described in Notes 1 and 5, the
Companys transactions are substantially with related
parties, who are the Companys member owners. Additionally,
as described in Note 1, the Company relies on its member
owners for funding requirements.

As described in notes 1 and 6, the
Companys assets were contributed to T-Mobile USA, Inc.
(T-Mobile) on January 5th, 2005, as part of an
agreement between T-Mobile and Cingular Wireless LLC to unwind
the operations of their joint venture, GSM Facilities, LLC.

As discussed in Note 2, the consolidated
financial statements for the years ended December 31, 2003
and 2002 have been restated.



| |                               
| | ------------------------------
| | /s/ PRICEWATERHOUSECOOPERS LLP

Seattle, Washington

March 3, 2005


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Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

CONSOLIDATED BALANCE SHEETS

|                                                 |                                                                                   |                       |        |       |   |   |        |        |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | --------------------- | ------ | ----- | - | - | ------ | ------ | -
|                                                 |                                                                                   |                      
|                                                 |                                                                                   | December 31,         
|                                                 |                                                                                   |                      
|                                                 |                                                                                   | 2003                  |        | 2004 
|                                                 |                                                                                   |                       |        |      
|                                                 |                                                                                   |                      
|                                                 |                                                                                   | (Dollars in millions)
|                                                 |                                                                                   | (Restated)            |        |      
|ASSETS                                          
|Current assets:                                  |                                                                                   |                       |        |       |   |   |        |       
|                                                 | Cash and cash equivalents                                                         |                       | $      | 1,139 |   |   | $      | 352    |  
|                                                 | Accounts receivable  net of allowance
    for doubtful accounts of $130 and $317 |                       |        | 1,592 |   |   |        | 3,448  |  
|                                                 | Due from affiliates, net                                                          |                       |        |      |   |   |        | 138    |  
|                                                 | Inventories                                                                       |                       |        | 273   |   |   |        | 690    |  
|                                                 | Prepaid assets                                                                    |                       |        | 186   |   |   |        | 346    |  
|                                                 | Other current assets                                                              |                       |        | 110   |   |   |        | 596    |  
|                                                 |                                                                                   |                       |        |       |   |   |        |       
|Total current assets                             |                                                                                   |                       | 3,300  |       |   |   | 5,570  |       
|Property, plant and equipment, net               |                                                                                   |                       | 10,962 |       |   |   | 21,958 |       
|Licenses, net                                    |                                                                                   |                       | 7,769  |       |   |   | 24,762 |       
|Goodwill                                         |                                                                                   |                       | 849    |       |   |   | 21,637 |       
|Customer relationship intangibles, net           |                                                                                   |                       | 150    |       |   |   | 4,698  |       
|Other intangible assets, net                     |                                                                                   |                       | 5      |       |   |   | 241    |       
|Investments in and advances to equity affiliates |                                                                                   |                       | 2,269  |       |   |   | 2,676  |       
|Other assets                                     |                                                                                   |                       | 226    |       |   |   | 696    |       
|                                                 |                                                                                   |                       |        |       |   |   |        |       
|Total assets                                     |                                                                                   | $                     | 25,530 |       |   | $ | 82,238 |       
|                                                 |                                                                                   |                       |        |       |   |   |        |       
|LIABILITIES AND MEMBERS
    CAPITAL            
|Current liabilities:                             |                                                                                   |                       |        |       |   |   |        |       
|                                                 | Debt maturing within one year                                                     |                       | $      | 95    |   |   | $      | 2,158  |  
|                                                 | Accounts payable                                                                  |                       |        | 904   |   |   |        | 1,383  |  
|                                                 | Due to affiliates, net                                                            |                       |        | 54    |   |   |        |       |  
|                                                 | Advanced billing and customer deposits                                            |                       |        | 538   |   |   |        | 728    |  
|                                                 | Accrued liabilities                                                               |                       |        | 1,619 |   |   |        | 3,714  |  
|                                                 |                                                                                   |                       |        |       |   |   |        |       
|Total current liabilities                        |                                                                                   |                       | 3,210  |       |   |   | 7,983  |       
|Long-term debt:                                  |                                                                                   |                       |        |       |   |   |        |       
|                                                 | Debt due to members                                                               |                       |        | 9,678 |   |   |        | 9,628  |  
|                                                 | Other long-term debt, net of premium                                              |                       |        | 2,914 |   |   |        | 14,229 |  
|                                                 |                                                                                   |                       |        |       |   |   |        |       
|Total long-term debt                             |                                                                                   |                       | 12,592 |       |   |   | 23,857 |       
|Deferred tax liabilities, net                    |                                                                                   |                       | 190    |       |   |   | 3,997  |       
|Other noncurrent liabilities                     |                                                                                   |                       | 546    |       |   |   | 1,256  |       
|                                                 |                                                                                   |                       |        |       |   |   |        |       
|Total liabilities                                |                                                                                   |                       | 16,538 |       |   |   | 37,093 |       
|Commitments and contingencies (see Note 18)      |                                                                                   |                       |        |       |   |   |        |       
|Minority interests in consolidated entities      |                                                                                   |                       | 659    |       |   |   | 609    |       
|Members capital:                                |                                                                                   |                       |        |       |   |   |        |       
|                                                 | Members capital                                                                  |                       |        | 8,513 |   |   |        | 44,714 |  
|                                                 | Receivable for properties to be contributed                                       |                       |        | (178  | ) |   |        | (178   | )
|                                                 | Accumulated other comprehensive loss, net of taxes                                |                       |        | (2    | ) |   |        |       |  
|                                                 |                                                                                   |                       |        |       |   |   |        |       
|Total members capital                           |                                                                                   |                       | 8,333  |       |   |   | 44,536 |       
|                                                 |                                                                                   |                       |        |       |   |   |        |       
|Total liabilities and members capital           |                                                                                   | $                     | 25,530 |       |   | $ | 82,238 |       
|                                                 |                                                                                   |                       |        |       |   |   |        |       

See accompanying notes.

83



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

CONSOLIDATED STATEMENTS OF INCOME

|                                                                                        |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |        |  
|--------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | ----------------------- | ------ | ---------- | - | ---- | ------ | ------ | - | - | ------ | ------ | -
|                                                                                        |                                                                                                     |                        
|                                                                                        |                                                                                                     | Year Ended December 31,
|                                                                                        |                                                                                                     |                        
|                                                                                        |                                                                                                     | 2002                    |        | 2003       |   | 2004
|                                                                                        |                                                                                                     |                         |        |            |   |     
|                                                                                        |                                                                                                     |                        
|                                                                                        |                                                                                                     | (Dollars in millions)  
|                                                                                        |                                                                                                     | (Restated)              |        | (Restated) |   |     
|Operating revenues:                                                                     |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|                                                                                        | Service revenues                                                                                    |                         | $      | 13,922     |   |      | $      | 14,223 |   |   | $      | 17,473 |  
|                                                                                        | Equipment sales                                                                                     |                         |        | 981        |   |      |        | 1,260  |   |   |        | 1,963  |  
|                                                                                        |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|Total operating revenues                                                                |                                                                                                     |                         | 14,903 |            |   |      | 15,483 |        |   |   | 19,436 |       
|Operating expenses:                                                                     |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|                                                                                        | Cost of services (excluding depreciation of
    $1,393, $1,670 and $2,259, which is included below) |                         |        | 3,594      |   |      |        | 3,681  |   |   |        | 4,608  |  
|                                                                                        | Cost of equipment sales                                                                             |                         |        | 1,535      |   |      |        | 2,031  |   |   |        | 2,874  |  
|                                                                                        | Selling, general and administrative                                                                 |                         |        | 5,429      |   |      |        | 5,428  |   |   |        | 7,349  |  
|                                                                                        | Depreciation and amortization                                                                       |                         |        | 1,849      |   |      |        | 2,089  |   |   |        | 3,077  |  
|                                                                                        |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|Total operating expenses                                                                |                                                                                                     |                         | 12,407 |            |   |      | 13,229 |        |   |   | 17,908 |       
|                                                                                        |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|Operating income                                                                        |                                                                                                     |                         | 2,496  |            |   |      | 2,254  |        |   |   | 1,528  |       
|Other income (expenses):                                                                |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|                                                                                        | Interest expense                                                                                    |                         |        | (911       | ) |      |        | (856   | ) |   |        | (900   | )
|                                                                                        | Minority interest in earnings of consolidated
    entities                                          |                         |        | (123       | ) |      |        | (101   | ) |   |        | (86    | )
|                                                                                        | Equity in net loss of affiliates                                                                    |                         |        | (274       | ) |      |        | (333   | ) |   |        | (415   | )
|                                                                                        | Other, net                                                                                          |                         |        | 29         |   |      |        | 41     |   |   |        | 16     |  
|                                                                                        |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|Total other income (expenses)                                                           |                                                                                                     |                         | (1,279 | )          |   |      | (1,249 | )      |   |   | (1,385 | )     
|                                                                                        |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|Income before provision for income taxes and
    cumulative effect of accounting change |                                                                                                     |                         | 1,217  |            |   |      | 1,005  |        |   |   | 143    |       
|Provision (benefit) for income taxes                                                    |                                                                                                     |                         | 12     |            |   |      | 28     |        |   |   | (58    | )     
|                                                                                        |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|Income before cumulative effect of accounting
    change                                |                                                                                                     |                         | 1,205  |            |   |      | 977    |        |   |   | 201    |       
|Cumulative effect of accounting change, net of tax                                      |                                                                                                     |                         | (32    | )          |   |      |       |        |   |   |       |       
|                                                                                        |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       
|Net income                                                                              |                                                                                                     | $                       | 1,173  |            |   | $    | 977    |        |   | $ | 201    |       
|                                                                                        |                                                                                                     |                         |        |            |   |      |        |        |   |   |        |       

See accompanying notes.

84



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

CONSOLIDATED STATEMENTS OF CHANGES IN
MEMBERS CAPITAL

|                                                         |                                                                              |                       |        |        |  
|-------------------------------------------------------- | ---------------------------------------------------------------------------- | --------------------- | ------ | ------ | -
|                                                         |                                                                              | (Dollars in millions)
|Balance at December 31, 2001, as originally
    reported |                                                                              | $                     | 5,850  |       
|                                                         | Effect of restatement on periods ending on or
    prior to December 31, 2001 |                       |        | (72    | )
|                                                         |                                                                              |                       |        |       
|Balance at December 31, 2001, as restated                |                                                                              |                       | 5,778  |       
|                                                         | Net income, as restated                                                      |                       |        | 1,173  |  
|                                                         | Contributions from members                                                   |                       |        | 484    |  
|                                                         |                                                                              |                       |        |       
|Balance at December 31, 2002, as restated                |                                                                              |                       | 7,435  |       
|                                                         | Net income, as restated                                                      |                       |        | 977    |  
|                                                         | Distributions to members, net                                                |                       |        | (79    | )
|                                                         |                                                                              |                       |        |       
|Balance at December 31, 2003, as restated                |                                                                              |                       | 8,333  |       
|                                                         | Net income                                                                   |                       |        | 201    |  
|                                                         | Contributions from members, net                                              |                       |        | 36,000 |  
|                                                         | Other, net                                                                   |                       |        | 2      |  
|                                                         |                                                                              |                       |        |       
|Balance at December 31, 2004                             |                                                                              | $                     | 44,536 |       
|                                                         |                                                                              |                       |        |       

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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME

|                           |                                    |                                                                       |                                                                   |            |    |      |     |  |   |   |     |  |    |   | 
|-------------------------- | ---------------------------------- | --------------------------------------------------------------------- | ----------------------------------------------------------------- | ---------- | -- | ---- | --- |  | - | - | --- |  | -- | - | 
|                           |                                    |                                                                      
|                           |                                    | Year Ended December 31,                                              
|                           |                                    |                                                                      
|                           |                                    | 2002                                                                  |                                                                   | 2003       |    | 2004
|                           |                                    |                                                                       |                                                                   |            |    |     
|                           |                                    | (Restated)                                                            |                                                                   | (Restated) |    |     
|                           |                                    |                                                                       |                                                                   |            |    |     
|                           |                                    |                                                                      
|                           |                                    | (Dollars in millions)                                                
|Comprehensive Income       |                                    |                                                                       |                                                                   |            |    |      |     |  |   |   |     | 
|Net income                 |                                    | $                                                                     | 1,173                                                             |            |    | $    | 977 |  |   | $ | 201 | 
|                           | Other comprehensive income (loss): |                                                                       |                                                                   |            |    |      |     |  |   |   |     |  |   
|                           |                                    | Minimum pension liability adjustment, net of
    taxes of $1 in 2004  |                                                                   |            | (1 | )    |     |  |  |   |     |  | (4 | )
|                           |                                    | Net foreign currency translation adjustment, net
    of taxes of ($4) |                                                                   |            |   |      |     |  |  |   |     |  | 6  |  
|                           |                                    | Net unrealized gain (loss) on securities:                             |                                                                   |            |    |      |     |  |   |   |     |  |    |  
|                           |                                    |                                                                       | Reclassification adjustment for losses included
    in net income |            |    | 1    |     |  |   |  |     |  |    |  | 
|                           |                                    |                                                                       |                                                                   |            |    |      |     |  |   |   |     | 
|Total comprehensive income |                                    | $                                                                     | 1,173                                                             |            |    | $    | 977 |  |   | $ | 203 | 
|                           |                                    |                                                                       |                                                                   |            |    |      |     |  |   |   |     | 

See accompanying notes.

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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                      |                                                            |                                                |        |            |      |      |        |       |      |   |         |       |      |  
|------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ---------------------------------------------- | ------ | ---------- | ---- | ---- | ------ | ----- | ---- | - | ------- | ----- | ---- | -
|                                                                                      |                                                            |                                               
|                                                                                      |                                                            | Year Ended December 31,                       
|                                                                                      |                                                            |                                               
|                                                                                      |                                                            | 2002                                           |        | 2003       |      | 2004
|                                                                                      |                                                            |                                                |        |            |      |     
|                                                                                      |                                                            |                                               
|                                                                                      |                                                            | (Dollars in millions)                         
|                                                                                      |                                                            | (Restated)                                     |        | (Restated) |      |     
|Operating activities                                                                  |                                                            |                                                |        |            |      |      |        |       |      |   |         |      
|Net income                                                                            |                                                            | $                                              | 1,173  |            |      | $    | 977    |       |      | $ | 201     |      
|Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                            |                                                |        |            |      |      |        |       |      |   |         |      
|                                                                                      | Depreciation and amortization                              |                                                |        | 1,849      |      |      |        | 2,089 |      |   |         | 3,077 |     
|                                                                                      | Provision for doubtful accounts                            |                                                |        | 404        |      |      |        | 259   |      |   |         | 423   |     
|                                                                                      | Asset impairments                                          |                                                |        | 151        |      |      |        |      |      |   |         | 4     |     
|                                                                                      | Minority interest in earnings of consolidated
    entities |                                                |        | 123        |      |      |        | 101   |      |   |         | 86    |     
|                                                                                      | Equity in net loss of affiliates                           |                                                |        | 274        |      |      |        | 333   |      |   |         | 415   |     
|                                                                                      | Cumulative effect of accounting change, net of tax         |                                                |        | 32         |      |      |        |      |      |   |         |      |     
|                                                                                      | Amortization of debt discount (premium), net               |                                                |        | 1          |      |      |        | 1     |      |   |         | (43   | )   
|                                                                                      | Deferred income taxes                                      |                                                |        | (3         | )    |      |        | (1    | )    |   |         | (74   | )   
|                                                                                      | Changes in operating assets and liabilities:               |                                                |        |            |      |      |        |       |      |   |         |       |     
|                                                                                      |                                                            | Accounts receivable                            |        |            | (280 | )    |        |       | (331 | ) |         |       | (336 | )
|                                                                                      |                                                            | Inventories                                    |        |            | 63   |      |        |       | (147 | ) |         |       | (189 | )
|                                                                                      |                                                            | Other current assets                           |        |            | (42  | )    |        |       | (83  | ) |         |       | (18  | )
|                                                                                      |                                                            | Accounts payable and other current liabilities |        |            | (411 | )    |        |       | 278  |   |         |       | (512 | )
|                                                                                      |                                                            | Pensions and post-employment benefits          |        |            | 91   |      |        |       | 55   |   |         |       | 88   |  
|                                                                                      | Other, net                                                 |                                                |        | 167        |      |      |        | 155   |      |   |         | 198   |     
|                                                                                      |                                                            |                                                |        |            |      |      |        |       |      |   |         |      
|Net cash provided by operating activities                                             |                                                            |                                                | 3,592  |            |      |      | 3,686  |       |      |   | 3,320   |      
|Investing activities                                                                  |                                                            |                                                |        |            |      |      |        |       |      |   |         |      
|Construction and capital expenditures                                                 |                                                            |                                                | (3,085 | )          |      |      | (2,734 | )     |      |   | (3,449  | )    
|Investments in and advances to equity affiliates,
    net                             |                                                            |                                                | (450   | )          |      |      | (616   | )     |      |   | (422    | )    
|Dispositions of assets                                                                |                                                            |                                                | 6      |            |      |      | 7      |       |      |   | 188     |      
|Acquisition of AT&T Wireless, net of cash
    received                                |                                                            |                                                |       |            |      |      |       |       |      |   | (35,543 | )    
|Acquisitions of other businesses and licenses,
    net of cash received               |                                                            |                                                | (6     | )          |      |      | (25    | )     |      |   | (1,632  | )    
|Contractor engineering deposit                                                        |                                                            |                                                | (50    | )          |      |      |       |       |      |   |        |      
|Purchases of held-to-maturity investments                                             |                                                            |                                                |       |            |      |      |       |       |      |   | (219    | )    
|                                                                                      |                                                            |                                                |        |            |      |      |        |       |      |   |         |      
|Net cash used in investing activities                                                 |                                                            |                                                | (3,585 | )          |      |      | (3,368 | )     |      |   | (41,077 | )    
|Financing activities                                                                  |                                                            |                                                |        |            |      |      |        |       |      |   |         |      
|Net borrowings under revolving credit agreement                                       |                                                            |                                                |       |            |      |      |       |       |      |   | 1,667   |      
|Net repayment of commercial paper                                                     |                                                            |                                                | (27    | )          |      |      |       |       |      |   |        |      
|Net repayment of long-term debt                                                       |                                                            |                                                | (59    | )          |      |      | (64    | )     |      |   | (530    | )    
|Repayment of long-term debt due to members                                            |                                                            |                                                |       |            |      |      |       |       |      |   | (50     | )    
|Net distributions to minority interests                                               |                                                            |                                                | (79    | )          |      |      | (33    | )     |      |   | (141    | )    
|Contributions from members                                                            |                                                            |                                                | 499    |            |      |      | 10     |       |      |   | 36,024  |      
|                                                                                      |                                                            |                                                |        |            |      |      |        |       |      |   |         |      
|Net cash provided by (used in) financing
    activities                               |                                                            |                                                | 334    |            |      |      | (87    | )     |      |   | 36,970  |      
|                                                                                      |                                                            |                                                |        |            |      |      |        |       |      |   |         |      
|Net increase (decrease) in cash and cash
    equivalents                              |                                                            |                                                | 341    |            |      |      | 231    |       |      |   | (787    | )    
|Cash and cash equivalents at beginning of period                                      |                                                            |                                                | 567    |            |      |      | 908    |       |      |   | 1,139   |      
|                                                                                      |                                                            |                                                |        |            |      |      |        |       |      |   |         |      
|Cash and cash equivalents at end of period                                            |                                                            | $                                              | 908    |            |      | $    | 1,139  |       |      | $ | 352     |      
|                                                                                      |                                                            |                                                |        |            |      |      |        |       |      |   |         |      

See accompanying notes.

87



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##### Table of Contents



CINGULAR WIRELESS LLC




PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2003, and
2004


(Dollars in Millions)




|   |                                               
|-- | ----------------------------------------------
|1. | Summary of Significant Accounting
    Policies



| |                                         
| | ----------------------------------------
| | Background and Basis of
    Presentation

Cingular Wireless LLC (the Company) is a Delaware
limited liability company formed in 2000 by SBC Communications
Inc. (SBC) and BellSouth Corporation (BellSouth) as the
operating company for their U.S. wireless joint venture.
SBC and BellSouth, through their wholly owned subsidiaries,
respectively, own approximate 60% and 40% economic interests in
the Company. Cingular Wireless Corporation (the Manager), which
is directed equally by SBC and BellSouth, acts as the
Companys manager and controls the Companys
management and operations. The Company provides wireless voice
and data communications services, including local, long-distance
and roaming services using both cellular and personal
communications services (PCS), and equipment to customers in
44 states, including service to all 100 of the largest
U.S. metropolitan areas. All of the Companys
operations, which primarily serve customers in the U.S., are
conducted through subsidiaries or joint ventures. Through
roaming arrangements with other carriers, the Company provides
its customers service in regions where it does not have network
coverage and is thus able to serve customers in virtually the
entire U.S. and over 170 foreign countries.

In October 2004, the Company acquired AT&T
Wireless Services, Inc. (AT&T Wireless) for an aggregate
consideration of approximately $41,000 in cash. AT&T
Wireless, which has been renamed New Cingular Wireless Services,
Inc. but will continue to be referred to herein as AT&T
Wireless, is now a direct wholly owned subsidiary of the
Company. The assets and operations of AT&T Wireless are
being integrated with those of the Company, and the business is
conducted under the Cingular brand name. See
Note 3 for further discussion of the acquisition.

As provided for in the original Contribution and
Formation Agreement between the Company, SBC and BellSouth,
contributions of wireless operations and assets in certain
markets were made during 2000 and 2001. The contribution by SBC
of wireless operations and assets in the Arkansas markets, or an
equivalent amount in cash if such assets are not contributed,
was still pending as of December 31, 2004. The Company has
recorded amounts to be contributed as Receivable for
properties to be contributed in the consolidated balance
sheets. Until such time as the contribution is made, the Company
continues to manage the properties for a fee. Fees received for
managing the Arkansas markets for the years ended
December 31, 2002, 2003 and 2004 were $22, $30 and $40,
respectively.

These consolidated financial statements include
charges from SBC and BellSouth for certain expenses pursuant to
various agreements (see Notes 12 and 17). These expenses
are considered to be a reasonable reflection of the value of
services provided or the benefits received by the Company.



| |                 
| | ----------------
| | Use of Estimates

The preparation of financial statements in
conformity with accounting principles generally accepted in the
U.S. (GAAP) requires management to make estimates and
assumptions that affect the amounts reflected in the
consolidated financial statements and accompanying notes. The
Company bases its estimates on historical experience, where
applicable, and other assumptions that management believes are
reasonable under the circumstances. Actual results could differ
from those estimates under different assumptions or conditions.
Estimates are used when accounting for certain items such as
revenue, allowance for doubtful accounts, useful lives of
property, plant and equipment and amortization periods for
intangible assets, asset

88



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


impairments, inventory reserves, legal and tax
contingencies, employee compensation programs, evaluation of
minimum lease term for operating leases, fair values of
investments and intangible assets, asset impairment charges and
deferred income taxes, including income tax valuation
allowances. Additionally, estimates are used when recording the
fair values of assets acquired and liabilities assumed in a
purchase business combination.



| |                            
| | ---------------------------
| | Principles of Consolidation

The consolidated financial statements include the
accounts of the Company, variable interest entities in which the
Company is the primary beneficiary as defined by Financial
Accounting Standards Board (FASB) Interpretation
No. 46R, Consolidation of Variable Interest Entities, an
interpretation of ARB No. 51(FIN 46R), and voting
interest entities in which the Company exercises control. Other
parties interests in consolidated entities are reported as
minority interests. All significant intercompany transactions
are eliminated in the consolidation process.

The equity method is used to account for
investments that are not consolidated but in which the Company
exercises significant influence. Investments in which the
Company does not have the ability to exercise significant
influence are accounted for under the cost method.



| |         
| | --------
| | Segments

The Company manages the business as one
reportable business segment, wireless communications services,
which also is a single operating segment. The Company operates
primarily in the U.S.



| |                    
| | -------------------
| | Revenue Recognition

The Company earns service revenues by providing
access to its wireless network (access revenue) and for usage of
its wireless system (airtime revenue). Access revenue from
postpaid customers is billed either in advance or arrears and
recognized ratably over the service period. Airtime revenue,
including roaming revenue and long-distance revenue, is billed
in arrears based on minutes of use and is recognized when the
service is rendered. Prepaid airtime sold to customers and
revenue collected from pay-in-advance customers is recorded as
deferred revenue prior to the commencement of services, and
revenue is recognized when airtime is used or expires. Access
and airtime services provided are billed throughout the month
according to the bill cycle in which a particular subscriber is
placed. As a result of bill cycle cut-off times, the Company is
required to make estimates for service revenues earned but not
yet billed at the end of each month, and for advanced billings.
These estimates are based primarily upon historical minutes of
use.

The Companys ROLLOVER® rate plans
include a feature whereby unused anytime minutes do not expire
each month but rather are available, under certain conditions,
for future use for a period not to exceed one year from the date
of purchase. The Company defers revenue based on an estimate of
the portion of unused minutes expected to be utilized prior to
expiration. Historical subscriber usage patterns, which have
been consistent and which the Company views to be reliable for
purposes of gauging predictive behavior, allow the Company to
estimate the number of unused minutes to be utilized, as well as
those which are likely to expire or be forfeited. No deferral of
revenue is recorded for the minutes that are expected to

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


expire or be forfeited, as no future performance
is expected to be required by the Company, nor is there any
obligation to refund or redeem for value expired minutes. During
the second quarter of 2004, the Company modified its estimate
for calculating the deferral to incorporate more refined
customer data and usage patterns, which in the Companys
view more accurately reflects the estimate of future utilization
of those minutes based on historical trends. This change in
estimate resulted in a $63 decrease in the deferral recorded as
of December 31, 2004, and a corresponding increase to
services revenue, as compared to the deferral that would have
been recorded prior to making the change. The balance of the
deferral as of December 31, 2003 and 2004 was $103 and
$146, respectively, and has been included in Advanced
billings and customer deposits in the consolidated balance
sheets.

Service revenues include revenues from Company
customers who roam outside their selected home coverage area,
referred to as incollect roaming revenues, and
revenues from other wireless carriers for roaming by their
customers on the Companys network, referred to as
outcollect roaming revenues.

The Company offers enhanced services including
caller ID, call waiting, call forwarding, three-way calling, no
answer/busy transfer, text messaging and voice mail. Generally,
these enhanced features generate additional service revenues
through monthly subscription fees or increased wireless usage
through utilization of the features. Other optional services,
such as mobile-to-mobile calling, roadside assistance and
handset insurance, may also be provided for a monthly fee. These
enhanced features and optional services may be bundled with
package rate plans or sold separately. Revenues for enhanced
services and optional features are recognized as earned. Service
revenues also include billings to our customers for Universal
Service Fund (USF) and other regulatory fees.

Equipment sales consist principally of revenues
from the sale of wireless handsets and accessories to new and
existing customers and to agents and other third-party
distributors. The revenue and related expenses associated with
the sale of wireless handsets and accessories through our
indirect sales channels are recognized when the products are
delivered and accepted by the agent or third-party distributor,
as this is considered to be a separate earnings process from the
sale of wireless services and probability of collection is
likely. Shipping and handling costs for wireless handsets sold
to agents and other third-party distributors are classified as
costs of equipment sales.

Effective July 1, 2003, the Company adopted
Emerging Issues Task Force (EITF) No. 00-21,
Accounting for Revenue Arrangements with Multiple
Deliverables, which is being applied on a prospective basis.
The consensus addresses how to account for arrangements that may
involve the delivery or performance of multiple products,
services and/or rights to use assets. Revenue arrangements with
multiple deliverables are required to be divided into separate
units of accounting if the deliverables in the arrangement meet
certain criteria. Arrangement consideration must be allocated
among the separate units of accounting based on their relative
fair values. The consensus also supersedes certain guidance set
forth in Securities and Exchange Commission (SEC) Staff
Accounting Bulletin Number 101, Revenue Recognition in
Financial Statements (SAB 101). SAB 101 was amended in
December 2003 by Staff Accounting Bulletin Number 104
(SAB 104).

The Company determined that the sale of wireless
services through its direct sales channels with an accompanying
handset constitutes a revenue arrangement with multiple
deliverables. Upon adoption of EITF No. 00-21, the Company
began dividing these arrangements into separate units of
accounting,

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


including the wireless service and handset.
Arrangement consideration received for the handset is recognized
as equipment sales when the handset is delivered and accepted by
the subscriber. Arrangement consideration received for the
wireless service is recognized as service revenues when earned.
As the non-refundable, up-front activation fee charged to the
subscriber does not meet the criteria as a separate unit of
accounting, the Company allocates the additional arrangement
consideration received from the activation fee to the handset
(the delivered item) to the extent that the aggregate handset
and activation fee proceeds do not exceed the fair value of the
handset. Any activation fees not allocated to the handset would
be deferred upon activation and recognized as service revenue on
a straight-line basis over the expected customer relationship
period. The Company determined that the sale of wireless
services through its indirect sales channels (agents) does
not constitute a revenue arrangement with multiple deliverables.
For indirect channel sales, the Company continues to defer
non-refundable, up-front activation fees and associated costs to
the extent of the related revenues in accordance with
SAB 104. These deferred fees and costs are amortized on a
straight line basis over the estimated customer relationship
period, which is currently estimated to be three years. The
Company has recorded deferred revenues and deferred expenses of
equal amounts in the consolidated balance sheets. As of
December 31, 2003 and 2004, SAB 104 deferred revenues
and expenses were $104 and $124, respectively.



| |             
| | ------------
| | Income Taxes

The Company is not a taxable entity for federal
income tax purposes. Federal taxable income or loss is included
in our respective members federal income tax returns. The
Companys provision (benefit) for income taxes includes
federal and state income taxes for our corporate subsidiaries,
as well as for certain states which impose income taxes upon
non-corporate legal entities. The acquisition of AT&T
Wireless resulted in a significant increase in our pre-tax
income (loss) from our corporate subsidiaries. AT&T Wireless
retained its corporation status; however, after the acquisition,
AT&T Wireless transferred the majority of its assets and
liabilities to Cingular Wireless II, LLC (CW II),
which it owns jointly with the Company. In exchange for the
assets and liabilities transferred to CW II, AT&T
Wireless received a 43% ownership interest in CW II, from
which any income (loss) is allocated accordingly and is subject
to federal and state income taxes. The remaining 57% of the
income (loss) from CW II is allocated to the Company and
flows through to the members or partners who are taxed at their
level pursuant to federal and state income tax laws.

The Company recognizes deferred tax assets and
liabilities based on differences between the financial reporting
and tax bases of assets and liabilities, applying enacted
statutory rates in effect for the year in which the differences
are expected to reverse. Pursuant to the provisions of Statement
of Financial Accounting Standards (SFAS) No. 109,
Accounting For Income Taxes, the Company provides
valuation allowances for deferred tax assets for which it does
not consider realization of such assets to be more likely than
not. See Note 16 for further information.



| |                       
| | ----------------------
| | Required Distributions

The Company is required to make periodic
distributions to its members on a pro rata basis in accordance
with each members ownership interest in amounts sufficient
to permit members to pay the tax liabilities resulting from
allocations of income tax items from the Company. Since the
Company did not generate

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


taxable income in 2002, 2003 or 2004, the Company
made no distributions for tax liabilities in 2002, 2003 or 2004.



| |                          
| | -------------------------
| | Cash and Cash Equivalents

Cash and cash equivalents include all highly
liquid investments with original maturities of three months or
less. Outstanding checks and drafts of $74 and $169 have been
included in Accounts payable in the consolidated
balance sheets as of December 31, 2003 and 2004,
respectively.



| |                       
| | ----------------------
| | Short-Term Investments

Short-term investments primarily include
investments with original maturities of generally more than
three months and less than one year. The Companys
short-term investments primarily related to assets placed in
trust for the redemption of certain debt acquired in the
AT&T Wireless acquisition (see Note 9) and for employee
benefit obligations (see Note 17). These investments, which
are classified as held-to-maturity and totaled $233 as of
December 31, 2004, are carried at cost, which approximates
fair value, and are included in Other current assets
in the consolidated balance sheets.



| |                    
| | -------------------
| | Accounts Receivable

Accounts receivable consist principally of trade
accounts receivable from customers and are generally unsecured
and due within 30 days. Credit losses relating to these
receivables consistently have been within managements
expectations. Expected credit losses are recorded as an
allowance for doubtful accounts in the consolidated balance
sheets. Estimates of expected credit losses are based primarily
on historical write-off experience, net of recoveries, and on
the aging of the accounts receivable balances. The collection
policies and procedures of the Company vary by credit class and
prior payment history of customers. Provisions for uncollectible
receivables are included in selling, general and administrative
expenses.



| |            
| | -----------
| | Inventories

Inventories consist principally of wireless
handsets and accessories and are valued at the lower of cost or
market value. Market value is determined using replacement cost.
The Company maintains inventory valuation reserves for
obsolescence and slow moving inventory. These reserves are
determined based on analysis of inventory agings.



| |                              
| | -----------------------------
| | Property, Plant and Equipment

Property, plant and equipment are stated at cost
less accumulated depreciation and amortization. The cost of
additions and substantial improvements is capitalized. Interest
expense and network engineering costs incurred during the
construction phase of the Companys wireless network are
capitalized as part of property, plant and equipment until the
projects are completed and the assets are placed into service.
The cost of maintenance and repairs is charged to operating
expenses. Property, plant and equipment are depreciated using
the straight-line method over their estimated useful lives.
Leasehold improvements, including cell site acquisition and
other site construction improvements, are depreciated over the
shorter of their estimated useful lives or lease terms that are
reasonably assured. Depreciation lives may be

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


accelerated due to changes in technology, the
rate of migration of the Companys subscriber base from its
Time Division Multiple Access (TDMA) network to its Global
System for Mobile Communication (GSM) network or other
industry conditions. Upon sale or retirement of an asset, the
related costs and accumulated depreciation are removed from the
accounts and any gain or loss is recognized and included in
Cost of services.



| |                        
| | -----------------------
| | Software Capitalization

The Company capitalizes certain costs incurred in
connection with developing or obtaining internal use software in
accordance with American Institute of Certified Public
Accountants Statement of Position 98-1, Accounting for
the Costs of Computer Software Developed or Obtained for
Internal Use. Capitalized costs include direct development
costs associated with internal use software, including internal
direct labor costs and external costs of materials and services.
These capitalized software costs are included in Property,
plant and equipment, net in the consolidated balance
sheets and are being amortized on a straight-line basis over a
period not to exceed five years. Costs incurred during the
preliminary project stage, as well as maintenance and training
costs, are expensed as incurred.



| |                  
| | -----------------
| | Intangible Assets

Intangible assets consist primarily of customer
relationships, FCC spectrum licenses and the excess of
consideration paid over the fair value of net assets acquired in
purchase business combinations (goodwill). Additionally, in
conjunction with the Companys acquisition of AT&T
Wireless in October 2004, the Company established intangible
assets associated with trade names, trade marks and lease
contracts.

Customer relationships represent values placed on
customers of acquired businesses and have a finite life. The
majority of the Companys customer relationship intangible
assets are amortized over a five-year period using the
sum-of-the-years digits method.

Goodwill and other indefinite-lived intangible
assets are not amortized in accordance with
SFAS No. 142, Goodwill and Other Intangible Assets(SFAS 142). The Company has determined that its FCC
spectrum licenses, except for those used in the Mobitex data
business, which it sold in the fourth quarter of 2004 (see
Note 3), and those held by foreign subsidiaries, should be
treated as indefinite-lived intangible assets (see Note 5).
The FCC issues spectrum licenses that authorize wireless
carriers to provide service in specific geographic service
areas. The FCC grants licenses for terms of up to ten years. In
1993, the FCC adopted specific standards to apply to wireless
renewals, concluding it will award a license renewal to a
licensee that meets certain standards of past performance.
Historically, the FCC has granted license renewals routinely.
The licenses held by the Company expire at various dates. The
Company believes that it will be able to meet all requirements
necessary to secure renewal of its wireless licenses.

Finite-lived licenses, which included those
formerly used in the Mobitex data business and those held by
foreign subsidiaries, are amortized using the straight-line
method over their estimated useful lives. Licenses held by
foreign subsidiaries are not subject to FCC jurisdiction.

The Company tests goodwill and other
indefinite-lived intangible assets for impairment on an annual
basis. Additionally, goodwill will be tested for impairment
between annual tests if an event occurs or circumstances change
that would more likely than not reduce the Companys fair
value below its carrying

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


value. Indefinite-lived intangible assets will be
tested between annual tests if events or changes in
circumstances indicate that the asset might be impaired. These
events or circumstances would include a significant change in
the business climate, legal factors, operating performance
indicators, competition, sale or disposition of a significant
portion of the business or other factors. See Note 5 for
discussion of the goodwill and indefinite-lived intangible asset
impairment tests.



| |                                   
| | ----------------------------------
| | Valuation of Long-lived
    Assets

Long-lived assets, including property, plant and
equipment and intangible assets with finite lives, are reviewed
for impairment in accordance with SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets(SFAS 144), whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. It is reasonably possible that these assets could
become impaired as a result of technological or other industry
changes. In analyzing potential impairment, the Company uses
projections of future cash flows from the asset group. These
projections are based on the Companys views of forecasted
growth rates, anticipated future economic conditions,
appropriate discount rates relative to risk and estimates of
residual values. If the total of the expected future
undiscounted cash flows from the asset group the Company intends
to hold and use is less than the carrying amount of the asset
group, a loss is recognized for the difference between the fair
value and carrying amount of the asset group. The asset group to
be held and used represents the lowest level for which
identifiable cash flows are largely independent of the cash
flows of other groups of assets and liabilities. The Company has
determined the lowest level for which cash flows are largely
independent of the cash flows of other groups is the
consolidated company level. For assets the Company intends to
dispose of, a loss is recognized if the carrying amount of the
assets in the disposal group is more than fair value, net of the
costs of disposal. The Company principally uses the discounted
cash flow method to estimate the fair value of its long-lived
assets. The discount rate applied to the undiscounted cash flows
is consistent with the Companys weighted-average cost of
capital.

The Company periodically evaluates the useful
lives of its wireless network equipment and other equipment and
finite-lived intangible assets based on technological and other
industry changes to determine whether events or changes in
circumstances warrant revisions to the useful lives (see
Notes 4 and 13).



| |                         
| | ------------------------
| | Valuation of Investments

The Company holds equity interests in certain
entities (see Note 6). These investments are primarily
accounted for under the equity method of accounting. In
accordance with Accounting Principles Board (APB) Opinion
No. 18, The Equity Method of Accounting for Investments
in Common Stock, the Company reviews its equity method
investments for impairment. These reviews are performed to
determine whether any decline in the fair value of an investment
below its carrying value is deemed to be other than temporary,
in which case an impairment charge would be recorded.



| |                         
| | ------------------------
| | Deferred Financing Costs

Debt financing costs are capitalized and
amortized over the terms of the underlying obligation using the
straight-line method, which approximates the effective interest
method. The net deferred financing costs

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


were $17 and $24 at December 31, 2003 and
2004, respectively. These deferred financing costs are included
in Other assets in the consolidated balance sheets.



| |                             
| | ----------------------------
| | Asset Retirement Obligations

The Company adopted SFAS No. 143,
Accounting for Asset Retirement
Obligations(SFAS 143) effective January 1, 2003.
This statement requires the Company to record the fair value of
a liability for an asset retirement obligation in the period in
which it is incurred and capitalize that amount as part of the
book value of the long-lived asset. Over time, the liability is
accreted to its present value each period, and the capitalized
cost is depreciated over the estimated useful life of the
related asset. Upon settlement of the liability, the Company
either settles the obligation for its recorded amount or incurs
a gain or loss.

The Company has certain legal obligations related
to network infrastructure, principally tower assets, which fall
within the scope of SFAS 143. These legal obligations
include obligations to remediate leased land on which the
Companys network infrastructure assets are located. The
significant assumptions used in estimating the Companys
asset retirement obligations include the following: a 25% to 80%
probability, depending upon the type of operating lease, that
the Companys assets with asset retirement obligations will
be remediated at the lessors directive; expected
settlement dates that coincide with lease expiration dates plus
estimates of lease extensions; remediation costs that are
indicative of what third party vendors would charge the Company
to remediate the sites; expected inflation rates that are
consistent with historical inflation rates; and credit-adjusted
risk-free rates that approximate the Companys incremental
borrowing rates.



| |                  
| | -----------------
| | Advertising Costs

Costs for advertising are expensed as incurred.
Total advertising expenses were $549, $643 and $973 for the
years ended December 31, 2002, 2003 and 2004, respectively.
Advertising expenses for 2004 include integration costs
associated with public relations activities and media coverage
to promote the combined company (see Note 14).



| |                 
| | ----------------
| | Operating Leases

The Company accounts for its operating leases in
accordance with SFAS No. 13, Accounting for Leasesand FASB Technical Bulletin No. 85-3,
Accounting for Operating Leases with Scheduled Rent
Increases. Rent expense is recorded on a straight-line basis
over the initial lease term and those renewal periods that are
reasonably assured. The difference between rent expense and rent
paid is recorded as deferred rent and is included in
Accrued liabilities and Other noncurrent
liabilities in the consolidated balance sheets.



| |                                     
| | ------------------------------------
| | Derivative Financial
    Instruments

In accordance with SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities,(SFAS 133), the Company recognizes all derivatives as
either assets or liabilities in the consolidated balance sheets
and measures those instruments at fair value. Gains and losses
resulting from changes in the fair values of those derivative
instruments will be recorded to earnings or other comprehensive
income (loss) depending on the use of the derivative instrument
and whether it qualifies for hedge accounting.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


The Company also assesses, both at the inception
of the hedge and on an on-going basis, whether the derivatives
that are used in hedging transactions are effective. Should it
be determined that a derivative is not effective as a hedge, the
Company would discontinue the hedge accounting prospectively.

The Company formally documents all relationships
between hedging instruments and hedged items, as well as its
risk management objectives and strategies for undertaking
various hedge transactions.

In April 2003, the FASB issued
SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities(SFAS 149). This statement amends and clarifies
accounting for derivative instruments and for hedging activities
under SFAS 133. The adoption of this statement on
July 1, 2003 did not have a material impact on the
Companys results of operations, financial position and
cash flows.



| |           
| | ----------
| | Guarantees

In November 2002, the FASB issued Interpretation
No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others  an Interpretation of FASB
Statements No. 5, 57, and 107 and Rescission of FASB
Interpretation No. 34(FIN 45), which provides
additional accounting guidance and disclosure requirements for
most guarantees, including indemnifications. It requires that at
the time a company issues a guarantee, the company must
recognize an initial liability for the fair value of the
obligations it assumes under that guarantee if that amount is
reasonably estimable, and must disclose that information in its
interim and annual financial statements. The provisions for
initial recognition and measurement of the liability are to be
applied on a prospective basis to guarantees issued or modified
on or after January 1, 2003.



| |                         
| | ------------------------
| | New Accounting Standards

In May 2003, the FASB issued
SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity(SFAS 150). This statement establishes standards for
how an issuer classifies and measures financial instruments with
characteristics of both liabilities and equity. SFAS 150
requires that instruments that are redeemable upon liquidation
or termination of an issuing subsidiary that has a limited life
are considered mandatorily redeemable shares in the financial
statements of the parent. Accordingly, those non-controlling
interests are required to be classified as liabilities and
recorded at settlement value by SFAS 150. This statement
was effective beginning July 1, 2003. As a result of
concerns over implementation and measurement issues, on
November 7, 2003, FASB Staff Position (FSP) FAS 150-3
was issued deferring indefinitely the effective date for the
measurement provisions of paragraphs 9 and 10 of
SFAS 150, as they apply to mandatorily redeemable
non-controlling interests (e.g., minority interests) of
limited-life entities that are consolidated in financial
statements.

Certain of the Companys consolidated
entities with minority partners have finite lives. While there
are no provisions in the entity charter agreements that require
liquidation upon expiration of the entities stated lives,
the guidance in SFAS 150 still requires the minority
interest to be recorded on the balance sheet at settlement value
as if the minority interest will be liquidated at that time. The
impact on the Companys results of operations, financial
position and cash flows would not be material.

In September 2004, the EITF reached a consensus
on Issue No. 04-01, Accounting for Pre-existing
Contractual Relationships between the Parties to a Purchase
Business Combination(EITF 04-01). The

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


consensus requires companies to evaluate
pre-existing contractual relationships between two parties to a
business combination to determine whether settlement of the
pre-existing contractual relationship has occurred. Settlements
of a pre-existing contractual relationship should be accounted
for separately from the business combination. EITF 04-01 is
effective for business combinations consummated for reporting
periods beginning after October 2004 and is required to be
adopted in the first quarter of 2005. The Company adopted this
new pronouncement effective January 1, 2005. The impact to
the Companys ongoing results of operations and cash flows
as a result of adopting this new statement is not material.

In December 2004, the FASB issued
SFAS No. 153, Exchanges of Nonmonetary
Assets  An Amendment of APB Opinion No. 29,
Accounting for Nonmonetary Transactions(SFAS 153).
SFAS 153 eliminates the exception from fair value
measurement for nonmonetary exchanges of similar productive
assets in paragraph 21(b) of APB Opinion No. 29,
Accounting for Nonmonetary Transactions,and replaces it
with an exception for exchanges that do not have commercial
substance. SFAS 153 specifies that a nonmonetary exchange
has commercial substance if the future cash flows of the entity
are expected to change significantly as a result of the
exchange. SFAS 153 is effective for the fiscal periods
beginning after June 15, 2005 and is required to be adopted
by the Company in the third quarter of 2005. The Company is
currently evaluating the effect that the adoption of
SFAS 153 will have on its consolidated results of
operations and financial condition but does not expect it to
have a material impact.

Reclassifications

Certain amounts have been reclassified in the
2002 and 2003 consolidated financial statements to conform to
the current year presentation.

2.     Restatements

On February 18, 2005, Company management and
the Audit Committee of the board of directors of the Manager
concluded that the Companys financial statements for
fiscal periods ending December 31, 2000 through
December 31, 2003 and the first three interim periods of
2004 should be restated to correct certain errors relating to
accounting for operating leases. While management believes that
the impact of this error is not material to any previously
issued financial statements, it determined that the cumulative
adjustment required to correct this error was too large to
record in 2004.

The Company has operating leases, principally for
cell sites, that have escalating rentals during the initial
lease term and during succeeding optional renewal periods.
During the course of preparing its 2004 consolidated financial
statements, the Company determined that its method of accounting
for operating leases did not comply with the requirements of
SFAS No. 13, Accounting for Leases and FASB
Technical Bulletin No. 85-3, Accounting for
Operating Leases with Scheduled Rent Increases.
Historically, the Company has not assumed the exercise of
available renewal options in its accounting for operating
leases. The Company reevaluated its accounting for operating
leases and the related useful lives for depreciating leasehold
improvements following publication of a letter issued by the
Office of the Chief Accountant of the U.S. Securities and
Exchange Commission on February 7, 2005. In light of the
Companys investment in each cell site, including
acquisition costs and leasehold improvements, the Company has
determined that the exercise of certain renewal options was
reasonably assured at the inception of the leases. Accordingly,
the Company has corrected its accounting to recognize rent
expense, on a straight-line basis,

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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


over the initial lease term and renewal periods
that are reasonably assured, and to depreciate the associated
leasehold improvements and other related assets over the lesser
of their useful lives or their respective lease terms. These
restated financial statements reflect these corrections.

The Companys network infrastructure venture
with T-Mobile USA, Inc. (T-Mobile), GSM Facilities LLC (GSMF),
accounted for under the equity method, reached a similar
conclusion with respect to operating leases, requiring
correction and restatement of its previously issued financial
statements for the years ended December 31, 2003 and 2002.
Accordingly, the Company also revised and restated its equity
accounting for the venture.

The impact of these restatements to the
Companys statements of income for the years ended
December 31, 2002 and December 31, 2003 was a decrease
to Net income of $34 and $45, respectively, as well as a
decrease to Members capital of $72 as of December 31,
2001. The impact associated with correcting the Companys
accounting for operating leases was an increase to lease expense
of $23 and $3, reflected in Costs of services and Selling,
general and administrative expenses, respectively, for the year
ended December 31, 2002 and of $29 and $6, respectively,
for the year ended December 31, 2003. The impact associated
with correcting the accounting for the operating leases and
useful lives of the Companys GSMF joint venture was an
increase in Equity in net loss of affiliates of $9 and $10,
respectively, for the same periods. The above correction also
had a de minimusimpact on Depreciation and amortization
to adjust for the lives used to depreciate certain leasehold
improvements. The restatements also impacted Property, plant and
equipment, net; Investments in and advances to equity
affiliates; Accrued liabilities; Other noncurrent liabilities;
and Members capital on the consolidated balance sheet as
of December 31, 2003.

98



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


The following schedules reconcile the amounts as
originally reported in the Companys consolidated balance
sheet as of December 31, 2003 and the consolidated
statements of income, comprehensive income, changes in
members capital and cash flows for the years ended
December 31, 2002 and 2003:

Consolidated Balance Sheet

|                                                 |                                                                          |                         |        |             |  |            |     |    |  |   |        |       | 
|------------------------------------------------ | ------------------------------------------------------------------------ | ----------------------- | ------ | ----------- |  | ---------- | --- | -- |  | - | ------ | ----- | 
|                                                 |                                                                          |                        
|                                                 |                                                                          | As of December 31, 2003
|                                                 |                                                                          |                        
|                                                 |                                                                          | (Reported)              |        | Adjustments |  | (Restated)
|                                                 |                                                                          |                         |        |             |  |           
|                                                 |                                                                          |                        
|                                                 |                                                                          | (Dollars in millions)  
|ASSETS                                          
|Current assets:                                  |                                                                          |                         |        |             |  |            |     |    |  |   |        |      
|                                                 | Cash and cash equivalents                                                |                         | $      | 1,139       |  |            |     |   |  |   | $      | 1,139 | 
|                                                 | Accounts receivable  net of allowance
    for doubtful accounts of $130 |                         |        | 1,592       |  |            |     |   |  |   |        | 1,592 | 
|                                                 | Inventories                                                              |                         |        | 273         |  |            |     |   |  |   |        | 273   | 
|                                                 | Prepaid assets                                                           |                         |        | 186         |  |            |     |   |  |   |        | 186   | 
|                                                 | Other current assets                                                     |                         |        | 110         |  |            |     |   |  |   |        | 110   | 
|                                                 |                                                                          |                         |        |             |  |            |     |    |  |   |        |      
|Total current assets                             |                                                                          |                         | 3,300  |             |  |            |    |    |  |   | 3,300  |      
|Property, plant and equipment, net               |                                                                          |                         | 10,939 |             |  |            | 23  |    |  |   | 10,962 |      
|Licenses, net                                    |                                                                          |                         | 7,769  |             |  |            |    |    |  |   | 7,769  |      
|Goodwill                                         |                                                                          |                         | 849    |             |  |            |    |    |  |   | 849    |      
|Customer relationship intangibles, net           |                                                                          |                         | 150    |             |  |            |    |    |  |   | 150    |      
|Other intangible assets, net                     |                                                                          |                         | 5      |             |  |            |    |    |  |   | 5      |      
|Investments in and advances to equity affiliates |                                                                          |                         | 2,288  |             |  |            | (19 | )  |  |   | 2,269  |      
|Other assets                                     |                                                                          |                         | 226    |             |  |            |    |    |  |   | 226    |      
|                                                 |                                                                          |                         |        |             |  |            |     |    |  |   |        |      
|Total assets                                     |                                                                          | $                       | 25,526 |             |  |            | 4   |    |  | $ | 25,530 |      
|                                                 |                                                                          |                         |        |             |  |            |     |    |  |   |        |      
|LIABILITIES AND MEMBERS
    CAPITAL            
|Current liabilities:                             |                                                                          |                         |        |             |  |            |     |    |  |   |        |      
|                                                 | Debt maturing within one year                                            |                         | $      | 95          |  |            |     |   |  |   | $      | 95    | 
|                                                 | Accounts payable                                                         |                         |        | 904         |  |            |     |   |  |   |        | 904   | 
|                                                 | Due to affiliates, net                                                   |                         |        | 54          |  |            |     |   |  |   |        | 54    | 
|                                                 | Advanced billing and customer deposits                                   |                         |        | 538         |  |            |     |   |  |   |        | 538   | 
|                                                 | Accrued liabilities                                                      |                         |        | 1,596       |  |            |     | 23 |  |   |        | 1,619 | 
|                                                 |                                                                          |                         |        |             |  |            |     |    |  |   |        |      
|Total current liabilities                        |                                                                          |                         | 3,187  |             |  |            | 23  |    |  |   | 3,210  |      

99



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                                            |                                                              |                         |        |             |   |            |      |      |   |   |        |       |  
|------------------------------------------- | ------------------------------------------------------------ | ----------------------- | ------ | ----------- | - | ---------- | ---- | ---- | - | - | ------ | ----- | -
|                                            |                                                              |                        
|                                            |                                                              | As of December 31, 2003
|                                            |                                                              |                        
|                                            |                                                              | (Reported)              |        | Adjustments |   | (Restated)
|                                            |                                                              |                         |        |             |   |           
|                                            |                                                              |                        
|                                            |                                                              | (Dollars in millions)  
|Long-term debt:                             |                                                              |                         |        |             |   |            |      |      |   |   |        |      
|                                            | Debt due to members                                          |                         |        | 9,678       |   |            |      |     |   |   |        | 9,678 |  
|                                            | Other long-term debt, net of premium                         |                         |        | 2,914       |   |            |      |     |   |   |        | 2,914 |  
|                                            |                                                              |                         |        |             |   |            |      |      |   |   |        |      
|Total long-term debt                        |                                                              |                         | 12,592 |             |   |            |     |      |   |   | 12,592 |      
|Deferred tax liabilities, net               |                                                              |                         | 190    |             |   |            |     |      |   |   | 190    |      
|Other noncurrent liabilities                |                                                              |                         | 414    |             |   |            | 132  |      |   |   | 546    |      
|                                            |                                                              |                         |        |             |   |            |      |      |   |   |        |      
|Total liabilities                           |                                                              |                         | 16,383 |             |   |            | 155  |      |   |   | 16,538 |      
|Minority interests in consolidated entities |                                                              |                         | 659    |             |   |            |     |      |   |   | 659    |      
|Members capital:                           |                                                              |                         |        |             |   |            |      |      |   |   |        |      
|                                            | Members capital                                             |                         |        | 8,664       |   |            |      | (151 | ) |   |        | 8,513 |  
|                                            | Receivable for properties to be contributed                  |                         |        | (178        | ) |            |      |     |   |   |        | (178  | )
|                                            | Accumulated other comprehensive loss, net of
    taxes of $0 |                         |        | (2          | ) |            |      |     |   |   |        | (2    | )
|                                            |                                                              |                         |        |             |   |            |      |      |   |   |        |      
|Total members capital                      |                                                              |                         | 8,484  |             |   |            | (151 | )    |   |   | 8,333  |      
|                                            |                                                              |                         |        |             |   |            |      |      |   |   |        |      
|Total liabilities and members capital      |                                                              | $                       | 25,526 |             |   |            | 4    |      |   | $ | 25,530 |      
|                                            |                                                              |                         |        |             |   |            |      |      |   |   |        |      

Consolidated Statements of Income

|                         |                                     |                              |        |                              |  |            |     |            |   |             |        |            |  |  |        |        |  |  |     |    |  |  |        |        | 
|------------------------ | ----------------------------------- | ---------------------------- | ------ | ---------------------------- |  | ---------- | --- | ---------- | - | ----------- | ------ | ---------- |  |  | ------ | ------ |  |  | --- | -- |  |  | ------ | ------ | 
|                         |                                     |                              |        |                             
|                         |                                     | Year Ended December 31, 2002 |        | Year Ended December 31, 2003
|                         |                                     |                              |        |                             
|                         |                                     | (Reported)                   |        | Adjustments                  |  | (Restated) |     | (Reported) |   | Adjustments |        | (Restated)
|                         |                                     |                              |        |                              |  |            |     |            |   |             |        |           
|                         |                                     |                             
|                         |                                     | (Dollars in millions)       
|Operating revenues:      |                                     |                              |        |                              |  |            |     |            |   |             |        |            |  |  |        |        |  |  |     |    |  |  |        |       
|                         | Service revenues                    |                              | $      | 13,922                       |  |            | $   |           |   |             | $      | 13,922     |  |  | $      | 14,223 |  |  | $   |   |  |  | $      | 14,223 | 
|                         | Equipment sales                     |                              |        | 981                          |  |            |     |           |   |             |        | 981        |  |  |        | 1,260  |  |  |     |   |  |  |        | 1,260  | 
|Total operating revenues |                                     |                              | 14,903 |                              |  |            |    |            |   |             | 14,903 |            |  |  | 15,483 |        |  |  |    |    |  |  | 15,483 |       
|Operating expenses:      |                                     |                              |        |                              |  |            |     |            |   |             |        |            |  |  |        |        |  |  |     |    |  |  |        |       
|                         | Cost of services                    |                              |        | 3,571                        |  |            |     | 23         |   |             |        | 3,594      |  |  |        | 3,652  |  |  |     | 29 |  |  |        | 3,681  | 
|                         | Cost of equipment sales             |                              |        | 1,535                        |  |            |     |           |   |             |        | 1,535      |  |  |        | 2,031  |  |  |     |   |  |  |        | 2,031  | 
|                         | Selling, general and administrative |                              |        | 5,426                        |  |            |     | 3          |   |             |        | 5,429      |  |  |        | 5,422  |  |  |     | 6  |  |  |        | 5,428  | 
|                         | Depreciation and amortization       |                              |        | 1,850                        |  |            |     | (1         | ) |             |        | 1,849      |  |  |        | 2,089  |  |  |     |   |  |  |        | 2,089  | 
|Total operating expenses |                                     |                              | 12,382 |                              |  |            | 25  |            |   |             | 12,407 |            |  |  | 13,194 |        |  |  | 35  |    |  |  | 13,229 |       
|Operating income         |                                     |                              | 2,521  |                              |  |            | (25 | )          |   |             | 2,496  |            |  |  | 2,289  |        |  |  | (35 | )  |  |  | 2,254  |       

100



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                                                                                        |                                                            |                              |       |                              |   |            |     |            |   |             |       |            |   |   |       |        |   |   |     |     |   |   |       |        |  
|--------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ---------------------------- | ----- | ---------------------------- | - | ---------- | --- | ---------- | - | ----------- | ----- | ---------- | - | - | ----- | ------ | - | - | --- | --- | - | - | ----- | ------ | -
|                                                                                        |                                                            |                              |       |                             
|                                                                                        |                                                            | Year Ended December 31, 2002 |       | Year Ended December 31, 2003
|                                                                                        |                                                            |                              |       |                             
|                                                                                        |                                                            | (Reported)                   |       | Adjustments                  |   | (Restated) |     | (Reported) |   | Adjustments |       | (Restated)
|                                                                                        |                                                            |                              |       |                              |   |            |     |            |   |             |       |           
|                                                                                        |                                                            |                             
|                                                                                        |                                                            | (Dollars in millions)       
|Other income (expenses):                                                                |                                                            |                              |       |                              |   |            |     |            |   |             |       |            |   |   |       |        |   |   |     |     |   |   |       |       
|                                                                                        | Interest expense                                           |                              |       | (911                         | ) |            |     |           |   |             |       | (911       | ) |   |       | (856   | ) |   |     |    |   |   |       | (856   | )
|                                                                                        | Minority interest in earnings of consolidated
    entities |                              |       | (123                         | ) |            |     |           |   |             |       | (123       | ) |   |       | (101   | ) |   |     |    |   |   |       | (101   | )
|                                                                                        | Equity in net loss of affiliates                           |                              |       | (265                         | ) |            |     | (9         | ) |             |       | (274       | ) |   |       | (323   | ) |   |     | (10 | ) |   |       | (333   | )
|                                                                                        | Other, net                                                 |                              |       | 29                           |   |            |     |           |   |             |       | 29         |   |   |       | 41     |   |   |     |    |   |   |       | 41     |  
|                                                                                        | Total other income (expenses)                              |                              |       | (1,270                       | ) |            |     | (9         | ) |             |       | (1,279     | ) |   |       | (1,239 | ) |   |     | (10 | ) |   |       | (1,249 | )
|Income before provision for income taxes and
    cumulative effect of accounting change |                                                            |                              | 1,251 |                              |   |            | (34 | )          |   |             | 1,217 |            |   |   | 1,050 |        |   |   | (45 | )   |   |   | 1,005 |       
|Provision for income taxes                                                              |                                                            |                              | 12    |                              |   |            |    |            |   |             | 12    |            |   |   | 28    |        |   |   |    |     |   |   | 28    |       
|Income before cumulative effect of accounting
    change                                |                                                            |                              | 1,239 |                              |   |            | (34 | )          |   |             | 1,205 |            |   |   | 1,022 |        |   |   | (45 | )   |   |   | 977   |       
|Cumulative effect of accounting change, net of tax                                      |                                                            |                              | (32   | )                            |   |            |    |            |   |             | (32   | )          |   |   |      |        |   |   |    |     |   |   |      |       
|Net income                                                                              |                                                            | $                            | 1,207 |                              |   | $          | (34 | )          |   | $           | 1,173 |            |   | $ | 1,022 |        |   | $ | (45 | )   |   | $ | 977   |       

Consolidated Statements of Comprehensive
Income

|                           |                                   |                                                  |                                                                   |                              |    |            |     |            |   |             |       |            |    |   |       |  |   |   |     |   |   |   |     |  |   |   | 
|-------------------------- | --------------------------------- | ------------------------------------------------ | ----------------------------------------------------------------- | ---------------------------- | -- | ---------- | --- | ---------- | - | ----------- | ----- | ---------- | -- | - | ----- |  | - | - | --- | - | - | - | --- |  | - | - | 
|                           |                                   |                                                  |                                                                   |                             
|                           |                                   | Year Ended December 31, 2002                     |                                                                   | Year Ended December 31, 2003
|                           |                                   |                                                  |                                                                   |                             
|                           |                                   | (Reported)                                       |                                                                   | Adjustments                  |    | (Restated) |     | (Reported) |   | Adjustments |       | (Restated)
|                           |                                   |                                                  |                                                                   |                              |    |            |     |            |   |             |       |           
|                           |                                   |                                                 
|                           |                                   | (Dollars in millions)                           
|Comprehensive Income       |                                   |                                                  |                                                                   |                              |    |            |     |            |   |             |       |            |    |   |       |  |   |   |     |   |   |   |     | 
|Net income                 |                                   | $                                                | 1,207                                                             |                              |    | $          | (34 | )          |   | $           | 1,173 |            |    | $ | 1,022 |  |   | $ | (45 | ) |   | $ | 977 | 
|                           | Other comprehensive income (loss) |                                                  |                                                                   |                              |    |            |     |            |   |             |       |            |    |   |       |  |   |   |     |   |   |   |     |  |  
|                           |                                   | Minimum pension liability adjustment, net of tax |                                                                   |                              | (1 | )          |     |            |  |             |       |            | (1 | ) |       |  |  |   |     |   |  |   |     |  |  |  
|                           |                                   | Net unrealized gain (loss) on securities:        |                                                                   |                              |    |            |     |            |   |             |       |            |    |   |       |  |   |   |     |   |   |   |     |  |   |  
|                           |                                   |                                                  | Reclassification adjustment for losses included
    in net income |                              |    | 1          |     |            |   |            |       |            |    | 1 |       |  |   |  |     |   |   |  |     |  |   |  | 
|                           |                                   |                                                  |                                                                   |                              |    |            |     |            |   |             |       |            |    |   |       |  |   |   |     |   |   |   |     | 
|Total comprehensive income |                                   | $                                                | 1,207                                                             |                              |    | $          | (34 | )          |   | $           | 1,173 |            |    | $ | 1,022 |  |   | $ | (45 | ) |   | $ | 977 | 
|                           |                                   |                                                  |                                                                   |                              |    |            |     |            |   |             |       |            |    |   |       |  |   |   |     |   |   |   |     | 

101



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Consolidated Statements of Cash
Flows

|                                                                                      |                                                            |                                                |        |                              |      |            |     |            |   |             |        |            |      |   |        |       |      |   |     |    |     |   |        |       |      |  
|------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ---------------------------------------------- | ------ | ---------------------------- | ---- | ---------- | --- | ---------- | - | ----------- | ------ | ---------- | ---- | - | ------ | ----- | ---- | - | --- | -- | --- | - | ------ | ----- | ---- | -
|                                                                                      |                                                            |                                                |        |                             
|                                                                                      |                                                            | Year Ended December 31, 2002                   |        | Year Ended December 31, 2003
|                                                                                      |                                                            |                                                |        |                             
|                                                                                      |                                                            | (Reported)                                     |        | Adjustments                  |      | (Restated) |     | (Reported) |   | Adjustments |        | (Restated)
|                                                                                      |                                                            |                                                |        |                              |      |            |     |            |   |             |        |           
|                                                                                      |                                                            |                                               
|                                                                                      |                                                            | (Dollars in millions)                         
|Operating activities                                                                  |                                                            |                                                |        |                              |      |            |     |            |   |             |        |            |      |   |        |       |      |   |     |    |     |   |        |      
|Net income                                                                            |                                                            | $                                              | 1,207  |                              |      | $          | (34 | )          |   | $           | 1,173  |            |      | $ | 1,022  |       |      | $ | (45 | )  |     | $ | 977    |      
|Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                            |                                                |        |                              |      |            |     |            |   |             |        |            |      |   |        |       |      |   |     |    |     |   |        |      
|                                                                                      | Depreciation and amortization                              |                                                |        | 1,850                        |      |            |     | (1         | ) |             |        | 1,849      |      |   |        | 2,089 |      |   |     |   |     |   |        | 2,089 |     
|                                                                                      | Provision for doubtful accounts                            |                                                |        | 404                          |      |            |     |           |   |             |        | 404        |      |   |        | 259   |      |   |     |   |     |   |        | 259   |     
|                                                                                      | Asset impairments                                          |                                                |        | 151                          |      |            |     |           |   |             |        | 151        |      |   |        |      |      |   |     |   |     |   |        |      |     
|                                                                                      | Minority interest in earnings of consolidated
    entities |                                                |        | 123                          |      |            |     |           |   |             |        | 123        |      |   |        | 101   |      |   |     |   |     |   |        | 101   |     
|                                                                                      | Equity in net loss of affiliates                           |                                                |        | 265                          |      |            |     | 9          |   |             |        | 274        |      |   |        | 323   |      |   |     | 10 |     |   |        | 333   |     
|                                                                                      | Cumulative effect of accounting change, net of tax         |                                                |        | 32                           |      |            |     |           |   |             |        | 32         |      |   |        |      |      |   |     |   |     |   |        |      |     
|                                                                                      | Amortization of debt discount, net                         |                                                |        | 1                            |      |            |     |           |   |             |        | 1          |      |   |        | 1     |      |   |     |   |     |   |        | 1     |     
|                                                                                      | Deferred income taxes                                      |                                                |        | (3                           | )    |            |     |           |   |             |        | (3         | )    |   |        | (1    | )    |   |     |   |     |   |        | (1    | )   
|                                                                                      | Changes in operating assets and liabilities:               |                                                |        |                              |      |            |     |            |   |             |        |            |      |   |        |       |      |   |     |    |     |   |        |       |     
|                                                                                      |                                                            | Accounts receivable                            |        |                              | (280 | )          |     |            |  |             |        |            | (280 | ) |        |       | (331 | ) |     |    |    |   |        |       | (331 | )
|                                                                                      |                                                            | Inventories                                    |        |                              | 63   |            |     |            |  |             |        |            | 63   |   |        |       | (147 | ) |     |    |    |   |        |       | (147 | )
|                                                                                      |                                                            | Other current assets                           |        |                              | (42  | )          |     |            |  |             |        |            | (42  | ) |        |       | (83  | ) |     |    |    |   |        |       | (83  | )
|                                                                                      |                                                            | Accounts payable and other current liabilities |        |                              | (420 | )          |     |            | 9 |             |        |            | (411 | ) |        |       | 290  |   |     |    | (12 | ) |        |       | 278  |  
|                                                                                      |                                                            | Pensions and post-employment benefits          |        |                              | 91   |            |     |            |  |             |        |            | 91   |   |        |       | 55   |   |     |    |    |   |        |       | 55   |  
|                                                                                      | Other, net                                                 |                                                |        | 150                          |      |            |     | 17         |   |             |        | 167        |      |   |        | 108   |      |   |     | 47 |     |   |        | 155   |     
|                                                                                      |                                                            |                                                |        |                              |      |            |     |            |   |             |        |            |      |   |        |       |      |   |     |    |     |   |        |      
|Net cash provided by operating activities                                             |                                                            |                                                | 3,592  |                              |      |            |    |            |   |             | 3,592  |            |      |   | 3,686  |       |      |   |    |    |     |   | 3,686  |      
|Investing activities                                                                  |                                                            |                                                |        |                              |      |            |     |            |   |             |        |            |      |   |        |       |      |   |     |    |     |   |        |      
|Construction and capital expenditures                                                 |                                                            |                                                | (3,085 | )                            |      |            |    |            |   |             | (3,085 | )          |      |   | (2,734 | )     |      |   |    |    |     |   | (2,734 | )    
|Investments in and advances to equity affiliates,
    net                             |                                                            |                                                | (450   | )                            |      |            |    |            |   |             | (450   | )          |      |   | (616   | )     |      |   |    |    |     |   | (616   | )    
|Disposition of assets                                                                 |                                                            |                                                | 6      |                              |      |            |    |            |   |             | 6      |            |      |   | 7      |       |      |   |    |    |     |   | 7      |      

102



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                                                                  |  |                              |        |                              |  |            |   |            |  |             |        |            |  |   |        |   |  |   |   |  |  |   |        |  
|----------------------------------------------------------------- |  | ---------------------------- | ------ | ---------------------------- |  | ---------- | - | ---------- |  | ----------- | ------ | ---------- |  | - | ------ | - |  | - | - |  |  | - | ------ | -
|                                                                  |  |                              |        |                             
|                                                                  |  | Year Ended December 31, 2002 |        | Year Ended December 31, 2003
|                                                                  |  |                              |        |                             
|                                                                  |  | (Reported)                   |        | Adjustments                  |  | (Restated) |   | (Reported) |  | Adjustments |        | (Restated)
|                                                                  |  |                              |        |                              |  |            |   |            |  |             |        |           
|                                                                  |  |                             
|                                                                  |  | (Dollars in millions)       
|Acquisitions of businesses and licenses, net of
    cash received |  |                              | (6     | )                            |  |            |  |            |  |             | (6     | )          |  |   | (25    | ) |  |   |  |  |  |   | (25    | )
|Contractor engineering deposit                                    |  |                              | (50    | )                            |  |            |  |            |  |             | (50    | )          |  |   |       |   |  |   |  |  |  |   |       |  
|                                                                  |  |                              |        |                              |  |            |   |            |  |             |        |            |  |   |        |   |  |   |   |  |  |   |        |  
|Net cash used in investing activities                             |  |                              | (3,585 | )                            |  |            |  |            |  |             | (3,585 | )          |  |   | (3,368 | ) |  |   |  |  |  |   | (3,368 | )
|Financing activities                                              |  |                              |        |                              |  |            |   |            |  |             |        |            |  |   |        |   |  |   |   |  |  |   |        |  
|Net repayment of commercial paper                                 |  |                              | (27    | )                            |  |            |  |            |  |             | (27    | )          |  |   |       |   |  |   |  |  |  |   |       |  
|Net repayment of long-term debt                                   |  |                              | (59    | )                            |  |            |  |            |  |             | (59    | )          |  |   | (64    | ) |  |   |  |  |  |   | (64    | )
|Net distributions to minority interests                           |  |                              | (79    | )                            |  |            |  |            |  |             | (79    | )          |  |   | (33    | ) |  |   |  |  |  |   | (33    | )
|Contributions from members                                        |  |                              | 499    |                              |  |            |  |            |  |             | 499    |            |  |   | 10     |   |  |   |  |  |  |   | 10     |  
|                                                                  |  |                              |        |                              |  |            |   |            |  |             |        |            |  |   |        |   |  |   |   |  |  |   |        |  
|Net cash provided by (used in) financing
    activities           |  |                              | 334    |                              |  |            |  |            |  |             | 334    |            |  |   | (87    | ) |  |   |  |  |  |   | (87    | )
|                                                                  |  |                              |        |                              |  |            |   |            |  |             |        |            |  |   |        |   |  |   |   |  |  |   |        |  
|Net increase in cash and cash equivalents                         |  |                              | 341    |                              |  |            |  |            |  |             | 341    |            |  |   | 231    |   |  |   |  |  |  |   | 231    |  
|Cash and cash equivalents at beginning of period                  |  |                              | 567    |                              |  |            |  |            |  |             | 567    |            |  |   | 908    |   |  |   |  |  |  |   | 908    |  
|                                                                  |  |                              |        |                              |  |            |   |            |  |             |        |            |  |   |        |   |  |   |   |  |  |   |        |  
|Cash and cash equivalents at end of period                        |  | $                            | 908    |                              |  | $          |  |            |  | $           | 908    |            |  | $ | 1,139  |   |  | $ |  |  |  | $ | 1,139  |  
|                                                                  |  |                              |        |                              |  |            |   |            |  |             |        |            |  |   |        |   |  |   |   |  |  |   |        |  

The restated consolidated statements of income by
quarter for 2003 and 2004 are presented below:

|                         |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |       | 
|------------------------ | ----------------------------------- | --------------------- | ----- | ---------- |  | ---------- | ----- | ---------- |  |  | ----- | ----- |  |  | ----- | ----- | 
|                         |                                     | First                 |       | Second     |  | Third      |       | Fourth    
|                         |                                     | Quarter               |       | Quarter    |  | Quarter    |       | Quarter   
|                         |                                     |                       |       |            |  |            |       |           
|                         |                                     | (Restated)            |       | (Restated) |  | (Restated) |       | (Restated)
|                         |                                     |                      
|                         |                                     | (Dollars in millions)
|2003 (Unaudited)         |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|Operating revenues:      |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|                         | Service revenues                    |                       | $     | 3,394      |  |            | $     | 3,619      |  |  | $     | 3,676 |  |  | $     | 3,534 | 
|                         | Equipment sales                     |                       |       | 244        |  |            |       | 255        |  |  |       | 383   |  |  |       | 378   | 
|Total operating revenues |                                     |                       | 3,638 |            |  |            | 3,874 |            |  |  | 4,059 |       |  |  | 3,912 |      
|Operating expenses:      |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|                         | Cost of services                    |                       |       | 829        |  |            |       | 897        |  |  |       | 1,010 |  |  |       | 945   | 
|                         | Cost of equipment sales             |                       |       | 396        |  |            |       | 451        |  |  |       | 606   |  |  |       | 578   | 
|                         | Selling, general and administrative |                       |       | 1,218      |  |            |       | 1,271      |  |  |       | 1,442 |  |  |       | 1,497 | 
|                         | Depreciation and amortization       |                       |       | 488        |  |            |       | 508        |  |  |       | 521   |  |  |       | 572   | 
|                         |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|Total operating expenses |                                     |                       | 2,931 |            |  |            | 3,127 |            |  |  | 3,579 |       |  |  | 3,592 |      
|                         |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|Operating income         |                                     |                       | 707   |            |  |            | 747   |            |  |  | 480   |       |  |  | 320   |      

103



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |      |  
|---------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | --------------------- | ---- | ---------- | - | ---------- | ---- | ---------- | - | - | ---- | ---- | - | - | ---- | ---- | -
|                                                                                               |                                                            | First                 |      | Second     |   | Third      |      | Fourth    
|                                                                                               |                                                            | Quarter               |      | Quarter    |   | Quarter    |      | Quarter   
|                                                                                               |                                                            |                       |      |            |   |            |      |           
|                                                                                               |                                                            | (Restated)            |      | (Restated) |   | (Restated) |      | (Restated)
|                                                                                               |                                                            |                      
|                                                                                               |                                                            | (Dollars in millions)
|Other income (expenses):                                                                       |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     
|                                                                                               | Interest expense                                           |                       |      | (225       | ) |            |      | (230       | ) |   |      | (197 | ) |   |      | (204 | )
|                                                                                               | Minority interest in earnings of consolidated
    entities |                       |      | (24        | ) |            |      | (35        | ) |   |      | (25  | ) |   |      | (17  | )
|                                                                                               | Equity in net loss of affiliates                           |                       |      | (74        | ) |            |      | (78        | ) |   |      | (90  | ) |   |      | (91  | )
|                                                                                               | Other, net                                                 |                       |      | 26         |   |            |      | 7          |   |   |      | 4    |   |   |      | 4    |  
|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     
|Total other income (expenses)                                                                  |                                                            |                       | (297 | )          |   |            | (336 | )          |   |   | (308 | )    |   |   | (308 | )   
|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     
|Income (loss) before provision for income taxes
    and cumulative effect of accounting change |                                                            |                       | 410  |            |   |            | 411  |            |   |   | 172  |      |   |   | 12   |     
|Provision (benefit) for income taxes                                                           |                                                            |                       | 2    |            |   |            | 12   |            |   |   | 6    |      |   |   | 8    |     
|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     
|Net income (loss)                                                                              |                                                            | $                     | 408  |            |   | $          | 399  |            |   | $ | 166  |      |   | $ | 4    |     
|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     

The previously reported consolidated statements
of income by quarter for 2003 are:

|                         |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |       | 
|------------------------ | ----------------------------------- | --------------------- | ----- | ---------- |  | ---------- | ----- | ---------- |  |  | ----- | ----- |  |  | ----- | ----- | 
|                         |                                     | First                 |       | Second     |  | Third      |       | Fourth    
|                         |                                     | Quarter               |       | Quarter    |  | Quarter    |       | Quarter   
|                         |                                     |                       |       |            |  |            |       |           
|                         |                                     | (Reported)            |       | (Reported) |  | (Reported) |       | (Reported)
|                         |                                     |                      
|                         |                                     | (Dollars in millions)
|2003 (Unaudited)         |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|Operating revenues:      |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|                         | Service revenues                    |                       | $     | 3,394      |  |            | $     | 3,619      |  |  | $     | 3,676 |  |  | $     | 3,534 | 
|                         | Equipment sales                     |                       |       | 244        |  |            |       | 255        |  |  |       | 383   |  |  |       | 378   | 
|Total operating revenues |                                     |                       | 3,638 |            |  |            | 3,874 |            |  |  | 4,059 |       |  |  | 3,912 |      
|Operating expenses:      |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|                         | Cost of services                    |                       |       | 821        |  |            |       | 890        |  |  |       | 1,003 |  |  |       | 938   | 
|                         | Cost of equipment sales             |                       |       | 396        |  |            |       | 451        |  |  |       | 606   |  |  |       | 578   | 
|                         | Selling, general and administrative |                       |       | 1,217      |  |            |       | 1,269      |  |  |       | 1,441 |  |  |       | 1,495 | 
|                         | Depreciation and amortization       |                       |       | 488        |  |            |       | 508        |  |  |       | 521   |  |  |       | 572   | 
|                         |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|Total operating expenses |                                     |                       | 2,922 |            |  |            | 3,118 |            |  |  | 3,571 |       |  |  | 3,583 |      
|                         |                                     |                       |       |            |  |            |       |            |  |  |       |       |  |  |       |      
|Operating income         |                                     |                       | 716   |            |  |            | 756   |            |  |  | 488   |       |  |  | 329   |      

104



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |      |  
|---------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | --------------------- | ---- | ---------- | - | ---------- | ---- | ---------- | - | - | ---- | ---- | - | - | ---- | ---- | -
|                                                                                               |                                                            | First                 |      | Second     |   | Third      |      | Fourth    
|                                                                                               |                                                            | Quarter               |      | Quarter    |   | Quarter    |      | Quarter   
|                                                                                               |                                                            |                       |      |            |   |            |      |           
|                                                                                               |                                                            | (Reported)            |      | (Reported) |   | (Reported) |      | (Reported)
|                                                                                               |                                                            |                      
|                                                                                               |                                                            | (Dollars in millions)
|Other income (expenses):                                                                       |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     
|                                                                                               | Interest expense                                           |                       |      | (225       | ) |            |      | (230       | ) |   |      | (197 | ) |   |      | (204 | )
|                                                                                               | Minority interest in earnings of consolidated
    entities |                       |      | (24        | ) |            |      | (35        | ) |   |      | (25  | ) |   |      | (17  | )
|                                                                                               | Equity in net loss of affiliates                           |                       |      | (72        | ) |            |      | (76        | ) |   |      | (87  | ) |   |      | (88  | )
|                                                                                               | Other, net                                                 |                       |      | 26         |   |            |      | 7          |   |   |      | 4    |   |   |      | 4    |  
|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     
|Total other income (expenses)                                                                  |                                                            |                       | (295 | )          |   |            | (334 | )          |   |   | (305 | )    |   |   | (305 | )   
|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     
|Income (loss) before provision for income
    taxes and cumulative effect of accounting change |                                                            |                       | 421  |            |   |            | 422  |            |   |   | 183  |      |   |   | 24   |     
|Provision (benefit) for income taxes                                                           |                                                            |                       | 2    |            |   |            | 12   |            |   |   | 6    |      |   |   | 8    |     
|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     
|Net income (loss)                                                                              |                                                            | $                     | 419  |            |   | $          | 410  |            |   | $ | 177  |      |   | $ | 16   |     
|                                                                                               |                                                            |                       |      |            |   |            |      |            |   |   |      |      |   |   |      |     

The effect of the restatement adjustments
(unaudited) on the Companys previously issued 2003
quarterly income statements are presented as follows:

|                                  |                                     |         |     |         |   |         |     |         |   |   |     |    |   |   |    |    |  
|--------------------------------- | ----------------------------------- | ------- | --- | ------- | - | ------- | --- | ------- | - | - | --- | -- | - | - | -- | -- | -
|                                  |                                     | First   |     | Second  |   | Third   |     | Fourth 
|                                  |                                     | Quarter |     | Quarter |   | Quarter |     | Quarter
|                                  |                                     |         |     |         |   |         |     |        
|Net income as originally reported |                                     | $       | 419 |         |   | $       | 410 |         |   | $ | 177 |    |   | $ | 16 |   
|Restatement adjustments:          |                                     |         |     |         |   |         |     |         |   |   |     |    |   |   |    |   
|                                  | Cost of services                    |         |     | 8       |   |         |     | 7       |   |   |     | 7  |   |   |    | 7  |  
|                                  | Selling, general and administrative |         |     | 1       |   |         |     | 2       |   |   |     | 1  |   |   |    | 2  |  
|                                  | Equity in net loss of affiliates    |         |     | (2      | ) |         |     | (2      | ) |   |     | (3 | ) |   |    | (3 | )
|                                  |                                     |         |     |         |   |         |     |         |   |   |     |    |   |   |    |   
|Net income as restated            |                                     | $       | 408 |         |   | $       | 399 |         |   | $ | 166 |    |   | $ | 4  |   
|                                  |                                     |         |     |         |   |         |     |         |   |   |     |    |   |   |    |   

The impacts of these restatements to the
Companys statements of income for the quarters ended
March 31, 2003, June 30, 2003, September 30, 2003
and December 31, 2003 were decreases to Net income of $11,
$11, $11 and $12, respectively. The impact associated with
correcting the Companys accounting for operating leases on
network facilities was as an increase to rent expense, reflected
in Cost of services; for operating leases on retail and
administrative facilities, such increases in rent expense are
reflected in Selling, general and administrative expenses. The
correction also had a de minimusimpact on Depreciation
and amortization to adjust for the lives used to depreciate
certain leasehold improvements. The impact associated with
correcting the accounting for the operating leases and useful
lives of the Companys GSMF joint venture was an increase
in Equity in net loss of affiliates.

105



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |       |  
|---------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | --------------------- | ----- | ---------- | - | ---------- | ----- | ----- | - | - | ----- | ----- | -
|                                                                                               |                                                            | First                 |       | Second     |   | Third     
|                                                                                               |                                                            | Quarter               |       | Quarter    |   | Quarter   
|                                                                                               |                                                            |                       |       |            |   |           
|                                                                                               |                                                            | (Restated)            |       | (Restated) |   | (Restated)
|                                                                                               |                                                            |                      
|                                                                                               |                                                            | (Dollars in millions)
|2004 (Unaudited)                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Operating revenues:                                                                            |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|                                                                                               | Service revenues                                           |                       | $     | 3,558      |   |            | $     | 3,801 |   |   | $     | 3,838 |  
|                                                                                               | Equipment sales                                            |                       |       | 384        |   |            |       | 354   |   |   |       | 419   |  
|Total operating revenues                                                                       |                                                            |                       | 3,942 |            |   |            | 4,155 |       |   |   | 4,257 |      
|Operating expenses:                                                                            |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|                                                                                               | Cost of services                                           |                       |       | 930        |   |            |       | 951   |   |   |       | 1,072 |  
|                                                                                               | Cost of equipment sales                                    |                       |       | 537        |   |            |       | 505   |   |   |       | 585   |  
|                                                                                               | Selling, general and administrative                        |                       |       | 1,372      |   |            |       | 1,463 |   |   |       | 1,567 |  
|                                                                                               | Depreciation and amortization                              |                       |       | 553        |   |            |       | 565   |   |   |       | 573   |  
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Total operating expenses                                                                       |                                                            |                       | 3,392 |            |   |            | 3,484 |       |   |   | 3,797 |      
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Operating income                                                                               |                                                            |                       | 550   |            |   |            | 671   |       |   |   | 460   |      
|Other income (expenses):                                                                       |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|                                                                                               | Interest expense                                           |                       |       | (198       | ) |            |       | (199  | ) |   |       | (200  | )
|                                                                                               | Minority interest in earnings of consolidated
    entities |                       |       | (27        | ) |            |       | (41   | ) |   |       | (20   | )
|                                                                                               | Equity in net loss of affiliates                           |                       |       | (108       | ) |            |       | (95   | ) |   |       | (98   | )
|                                                                                               | Other, net                                                 |                       |       | 4          |   |            |       | 1     |   |   |       |      |  
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Total other income (expenses)                                                                  |                                                            |                       | (329  | )          |   |            | (334  | )     |   |   | (318  | )    
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Income (loss) before provision for income taxes
    and cumulative effect of accounting change |                                                            |                       | 221   |            |   |            | 337   |       |   |   | 142   |      
|Provision (benefit) for income taxes                                                           |                                                            |                       | 6     |            |   |            | (2    | )     |   |   |      |      
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Net income (loss)                                                                              |                                                            | $                     | 215   |            |   | $          | 339   |       |   | $ | 142   |      
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      

106



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


The previously reported consolidated statements
of income by quarter for 2004 are presented below:

|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |       |  
|---------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | --------------------- | ----- | ---------- | - | ---------- | ----- | ----- | - | - | ----- | ----- | -
|                                                                                               |                                                            | First                 |       | Second     |   | Third     
|                                                                                               |                                                            | Quarter               |       | Quarter    |   | Quarter   
|                                                                                               |                                                            |                       |       |            |   |           
|                                                                                               |                                                            | (Reported)            |       | (Reported) |   | (Reported)
|                                                                                               |                                                            |                      
|                                                                                               |                                                            | (Dollars in millions)
|2004 (Unaudited)                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Operating revenues:                                                                            |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|                                                                                               | Service revenues                                           |                       | $     | 3,558      |   |            | $     | 3,801 |   |   | $     | 3,838 |  
|                                                                                               | Equipment sales                                            |                       |       | 384        |   |            |       | 354   |   |   |       | 419   |  
|Total operating revenues                                                                       |                                                            |                       | 3,942 |            |   |            | 4,155 |       |   |   | 4,257 |      
|Operating expenses:                                                                            |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|                                                                                               | Cost of services                                           |                       |       | 922        |   |            |       | 943   |   |   |       | 1,072 |  
|                                                                                               | Cost of equipment sales                                    |                       |       | 537        |   |            |       | 505   |   |   |       | 585   |  
|                                                                                               | Selling, general and administrative                        |                       |       | 1,372      |   |            |       | 1,462 |   |   |       | 1,567 |  
|                                                                                               | Depreciation and amortization                              |                       |       | 552        |   |            |       | 565   |   |   |       | 572   |  
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Total operating expenses                                                                       |                                                            |                       | 3,383 |            |   |            | 3,475 |       |   |   | 3,796 |      
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Operating income                                                                               |                                                            |                       | 559   |            |   |            | 680   |       |   |   | 461   |      
|Other income (expenses):                                                                       |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|                                                                                               | Interest expense                                           |                       |       | (198       | ) |            |       | (199  | ) |   |       | (200  | )
|                                                                                               | Minority interest in earnings of consolidated
    entities |                       |       | (27        | ) |            |       | (41   | ) |   |       | (20   | )
|                                                                                               | Equity in net loss of affiliates                           |                       |       | (105       | ) |            |       | (92   | ) |   |       | (96   | )
|                                                                                               | Other, net                                                 |                       |       | 4          |   |            |       | 1     |   |   |       |      |  
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Total other income (expenses)                                                                  |                                                            |                       | (326  | )          |   |            | (331  | )     |   |   | (316  | )    
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Income (loss) before provision for income
    taxes and cumulative effect of accounting change |                                                            |                       | 233   |            |   |            | 349   |       |   |   | 145   |      
|Provision (benefit) for income taxes                                                           |                                                            |                       | 6     |            |   |            | (2    | )     |   |   |      |      
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      
|Net income (loss)                                                                              |                                                            | $                     | 227   |            |   | $          | 351   |       |   | $ | 145   |      
|                                                                                               |                                                            |                       |       |            |   |            |       |       |   |   |       |      

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


The effect of the restatement adjustments
(unaudited) on the Companys previously issued 2004
quarterly income statements are presented as follows:

|                                  |                                     |         |     |         |   |         |     |    |   |   |     |    |  
|--------------------------------- | ----------------------------------- | ------- | --- | ------- | - | ------- | --- | -- | - | - | --- | -- | -
|                                  |                                     | First   |     | Second  |   | Third  
|                                  |                                     | Quarter |     | Quarter |   | Quarter
|                                  |                                     |         |     |         |   |        
|Net income as originally reported |                                     | $       | 227 |         |   | $       | 351 |    |   | $ | 145 |   
|Restatement adjustments:          |                                     |         |     |         |   |         |     |    |   |   |     |   
|                                  | Cost of services                    |         |     | 8       |   |         |     | 8  |   |   |     |   |  
|                                  | Selling, general and administrative |         |     |        |   |         |     | 1  |   |   |     |   |  
|                                  | Depreciation and amortization       |         |     | 1       |   |         |     |   |   |   |     | 1  |  
|                                  | Equity in net loss of affiliates    |         |     | (3      | ) |         |     | (3 | ) |   |     | (2 | )
|                                  |                                     |         |     |         |   |         |     |    |   |   |     |   
|Net income as restated            |                                     | $       | 215 |         |   | $       | 339 |    |   | $ | 142 |   
|                                  |                                     |         |     |         |   |         |     |    |   |   |     |   

The impacts of these restatements to the
Companys statements of income for the quarters ended
March 31, 2004, June 30, 2004, and September 30,
2004 were decreases to Net income of $12, $12, and $3,
respectively. The impact associated with correcting the
Companys accounting for operating leases on network
facilities was as an increase to rent expense, reflected in Cost
of services; for operating leases on retail and administrative
facilities, such increases in rent expense are reflected in
Selling, general and administrative expenses. The correction
also had a de minimus impact on Depreciation and
amortization to adjust for the lives used to depreciate certain
leasehold improvements. The impact associated with correcting
the accounting for the operating leases and useful lives of the
Companys GSMF joint venture was an increase in Equity in
net loss of affiliates.



|   |                              
|-- | -----------------------------
|3. | Acquisitions and Dispositions

During 2004, 2003 and 2002, the Company completed
certain transactions as part of its overall strategy to expand
its wireless footprint and divest itself of nonstrategic assets,
as well as divestitures required by regulatory agencies.

Acquisitions



| |              
| | -------------
| | AT&T Wireless

In October 2004, the Company acquired AT&T
Wireless in a transaction accounted for under the purchase
method under SFAS No. 141, Business Combinations(SFAS 141). AT&T Wireless was a provider of
wireless voice and data services and products primarily in the
U.S. and served nearly 22 million subscribers as of the
acquisition date. AT&T Wireless also held equity interests
in U.S. and international communications ventures, corporations
and partnerships. The acquisition created the largest wireless
communications company in the U.S., based upon the number of
subscribers.

The aggregate consideration paid to AT&T
Wireless shareholders to complete the AT&T Wireless
acquisition was approximately $41,000 in cash. Under the merger
agreement, each common shareholder of AT&T Wireless received
$15 (whole dollars) in cash per common share and the AT&T
Wireless preferred shareholders received the then applicable
liquidation preference of their preferred shares. In addition,
the Company incurred $42 of direct costs for legal, financial
advisory and other services related to the

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Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


transaction, which costs were capitalized as part
of the purchase price. The Company received $36,024 in equity
funding from SBC and BellSouth to finance the acquisition in
proportion to their respective economic interests. The remaining
portion of the purchase price was funded with AT&T Wireless
cash on hand. The results of AT&T Wireless operations
have been included in the Companys consolidated financial
statements since the acquisition date.

The acquisition was structured as a merger of a
wholly-owned subsidiary of the Manager with and into AT&T
Wireless, following which AT&T Wireless became a direct
wholly-owned subsidiary of the Manager, and as the surviving
entity, AT&T Wireless retained all its assets and
liabilities. Following the merger, the Manager sold all its
interests in AT&T Wireless to the Company, and AT&T
Wireless then became its direct wholly-owned subsidiary.
Subsequently, a significant portion of the operations, including
assets, liabilities and subsidiary entities, were transferred
from the Company and AT&T Wireless to CW II. The
Company and CW II executed supplemental indentures to
AT&T Wirelesss two indentures under which its Senior
Notes are outstanding to become co-obligated for all obligations
thereunder, and AT&T Wireless and CW II executed
supplemental indentures to the Companys indenture under
which the Companys Senior Notes are outstanding to become
co-obligated for all obligations thereunder. As a result,
CW II, AT&T Wireless and the Company are co-obligated
on all of the Companys and AT&T Wireless Senior
Notes.

The Company paid a premium (i.e.,
goodwill) over the fair value of the net tangible and identified
intangible assets acquired for a number of reasons, including
but not limited to the following:



|  |                                                                                                                                                                                                                
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | AT&T Wireless fills in the Companys
    licensed spectrum and network footprints by covering areas where
    it did not have licenses or network infrastructure;                                              
| 
| | AT&T Wireless adds depth to the
    Companys licensed spectrum position in existing markets,
    enhancing the Companys ability to offer future high-speed
    data services and reduce capital expenditures;
| 
| | AT&T Wireless customer base, which has
    a stronger business customer component than that of the Company,
    adds a complementary customer mix to the Companys customer
    base;                         
| 
| | AT&T Wireless average revenue per user,
    or ARPU, had historically been higher than the ARPU
    of the Companys customers;                                                                             
| 
| | AT&T Wireless gives the Company added size
    and scale to compete more effectively in the industry and to
    procure more significant cost economies from vendors; and                                      
| 
| | the acquisition will reduce the Companys
    incollect roaming costs because of the broader post-acquisition
    footprint.                                                                                   



| |                             
| | ----------------------------
| | Allocation of Purchase Price

The application of purchase accounting under
SFAS 141 requires that the total purchase price be
allocated to the fair value of assets acquired and liabilities
assumed based on their fair values at the acquisition date. The
allocation process requires an analysis of acquired contracts,
customer relationships, contractual commitments and legal
contingencies to identify and record the fair value of all
assets acquired and liabilities assumed. In valuing acquired
assets and assumed liabilities, fair values are based on, but
are not

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


limited to: future expected cash flows; current
replacement cost for similar capacity for certain fixed assets;
market rate assumptions for contractual obligations; settlement
plans for litigation and contingencies; and appropriate discount
rates and growth rates.

The approach to the estimation of the fair values
of the AT&T Wireless intangible assets involved the
following steps:



|  |                                                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------
| | Preparation of discounted cash flow analyses;                                                                                           
| 
| | Deduction of the fair values of tangible assets;                                                                                        
| 
| | Determination of the fair value of identified
    significant intangible assets;                                                        
| 
| | Allocation of the excess purchase price over the
    fair value of the identifiable assets and liabilities acquired
    to goodwill; and
| 
| | Reconciliation of the individual assets
    returns with the weighted average cost of capital.                                         

Under the purchase method of accounting, the
assets and liabilities of AT&T Wireless were recorded at
their respective fair values as of the date of acquisition. The
Company is in the process of obtaining third-party valuations of
property, plant and equipment, intangible assets, debt and
certain other liabilities. Given the size of the AT&T
Wireless transaction and proximity to year end, the values of
certain assets and liabilities are based on preliminary
valuations and are subject to adjustment as additional
information is obtained. Such additional information includes,
but may not be limited to, the following: valuations and
physical counts of property, plant and equipment, disposition of
acquired inventory, plans relative to the disposition of certain
assets acquired, exit from certain contractual arrangements and
the involuntary termination of employees. Changes to the
valuation of property, plant and equipment may result in
adjustments to the fair value of certain identifiable intangible
assets acquired. When finalized, adjustments to goodwill may
result. The following table summarizes the preliminary estimated
fair values of the assets acquired and liabilities assumed and
related deferred income taxes as of the respective acquisition
date.

|                 |                                               |                       |   |        |        | 
|---------------- | --------------------------------------------- | --------------------- | - | ------ | ------ | 
|                 |                                               | AT&T                 
|                 |                                               | Wireless             
|                 |                                               |                      
|Assets acquired: |                                               |                       |   |       
|                 | Current assets                                |                       | $ | 8,457  | (1)   
|                 | Property, plant and equipment                 |                       |   | 10,314 |       
|                 | Intangible assets not subject to amortization |                       |   |        |       
|                 |  Licenses                                    |                       |   | 15,540 |       
|                 | Intangible assets subject to amortization     |                       |   |        |       
|                 |  Customer relationships                      |                       |   | 5,010  |       
|                 |  Other intangible assets                     |                       |   | 312    |       
|                 | Investments in unconsolidated subsidiaries    |                       |   | 898    |       
|                 | Other assets                                  |                       |   | 447    |       
|                 | Goodwill                                      |                       |   | 20,468 |       
|                 |                                               |                       |   |       
|                 |                                               | Total assets acquired |   |        | 61,446 | 

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Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                     |                                                                      |                           |        |        |        | 
|-------------------- | -------------------------------------------------------------------- | ------------------------- | ------ | ------ | ------ | 
|                     |                                                                      | AT&T                     
|                     |                                                                      | Wireless                 
|                     |                                                                      |                          
|Liabilities assumed: |                                                                      |                           |        |       
|                     | Current liabilities, excluding current portion of
    long-term debt |                           |        | 3,261  |       
|                     | Long-term debt                                                       |                           |        | 12,172 |       
|                     | Deferred income taxes                                                |                           |        | 3,938  |       
|                     | Other non-current liabilities                                        |                           |        | 811    |       
|                     |                                                                      |                           |        |       
|                     |                                                                      | Total liabilities assumed |        |        | 20,182 | 
|Net assets acquired  |                                                                      | $                         | 41,264 |       
|                     |                                                                      |                           |        |       



---



|    |                                                             
|--- | ------------------------------------------------------------
|(1) | Includes $5,240 of cash used to finance the
    acquisition.

Goodwill resulting from the acquisition of
AT&T Wireless was assigned to the Companys one
reportable business segment. Goodwill includes a portion of
value for assembled workforce which is not separately classified
from goodwill in accordance with SFAS 141. None of the
non-goodwill intangible assets are tax deductible; therefore,
deferred tax liabilities were recorded on all intangible assets
except goodwill. The deferred tax liabilities related to
finite-lived intangible assets will be reflected as a tax
benefit in the consolidated statements of income in proportion
to and over the amortization period of the related intangible
assets.

Substantially all of the licenses acquired have
an indefinite life, and accordingly, are not subject to
amortization. The majority of customer relationship intangible
assets are being amortized over a weighted-average period of
five years using the sum-of-the-years digits method. This
method best reflects the estimated pattern in which the economic
benefits will be consumed. Other intangible assets and other
noncurrent liabilities include lease and sublease contracts,
which are amortized over the remaining terms of the underlying
leases and have a weighted-average amortization period of
seven years. Other intangibles also includes the right to
use the AT&T brand trade name, which is amortized over a six
month period, and represents the use period under the Brand
License Agreement with AT&T Corp., as amended. Trademarks
are amortized over their expected remaining economic lives,
ranging from five to six years, and have a weighted-average
amortization period of 5.6 years. See Note 5 for
disclosure of expected amortization expense related to
intangible assets.

The Company has not identified any material
pre-acquisition contingencies where the related asset, liability
or impairment is probable and the amount of the asset, liability
or impairment can be reasonably estimated. Prior to the end of
the purchase price allocation period, if information becomes
available which would indicate it is probable that such events
had occurred and the amounts can be reasonably estimated, such
items will be included in the purchase price allocation.



| |                           
| | --------------------------
| | Triton Wireless Properties

In September 2004, the Company and AT&T
Wireless and Triton PCS Holdings, Inc. (Triton) signed an
agreement providing for the acquisition by the Company of
Tritons wireless properties in Virginia (the
Virginia properties) in exchange for certain of
AT&T Wireless properties in North Carolina, Puerto

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PART II (Dollars
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Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Rico and the U.S. Virgin Islands (the
NC/ PR properties). In addition, the Company agreed
to pay Triton $176 in cash. The exchange of network properties
closed on December 1, 2004 and is accounted for as a
purchase in accordance with SFAS 141. The FCC licenses were
retained by the respective parties pending FCC approval for the
transfer. Prior to FCC approval, each party will lease the
retained FCC licenses to the other party. The results of the
Virginia properties have been included in, and the results of
the exchanged properties have been excluded from, the
Companys consolidated financial statements since the
closing date. Upon completion of this transaction, the Company
operates in all of the 100 largest markets in the U.S. The
exchange of the FCC spectrum licenses will be effected following
FCC approval, which the Company expects in the second quarter of
2005.

Under the purchase method of accounting, the
assets and liabilities of the Virginia properties were recorded
at their respective fair values as of the date of acquisition.
The value of certain assets and liabilities of the Virginia
properties are also based on preliminary valuations and are
subject to adjustment. The following table summarizes the
estimated fair values of the assets and liabilities exchanged as
of the acquisition date.

|                                |                                                                        |                                      |     |            |     |          |      |      |      |   |     |      |     |  
|------------------------------- | ---------------------------------------------------------------------- | ------------------------------------ | --- | ---------- | --- | -------- | ---- | ---- | ---- | - | --- | ---- | --- | -
|                                |                                                                        | Virginia                             |     | NC/PR      |     | Combined
|                                |                                                                        | Properties                           |     | Properties |     | Totals  
|                                |                                                                        |                                      |     |            |     |         
|Assets acquired (disposed):     |                                                                        |                                      |     |            |     |          |      |      |      |   |     |     
|                                | Current assets                                                         |                                      | $   | 32         |     |          | $    | (62  | )    |   | $   | (30  | )  
|                                | Property, plant and equipment                                          |                                      |     | 147        |     |          |      | (285 | )    |   |     | (138 | )  
|                                | Intangible assets subject to
    amortization  Customer relationships |                                      |     | 48         |     |          |      | (68  | )    |   |     | (20  | )  
|                                | Goodwill                                                               |                                      |     | 438        |     |          |      | (117 | )    |   |     | 321  |    
|                                |                                                                        |                                      |     |            |     |          |      |      |      |   |     |     
|                                |                                                                        | Total assets acquired (disposed)     |     |            | 665 |          |      |      | (532 | ) |     |      | 133 |  
|Liabilities assumed (disposed): |                                                                        |                                      |     |            |     |          |      |      |      |   |     |     
|                                | Current liabilities                                                    |                                      |     | 13         |     |          |      | 4    |      |   |     | 17   |    
|                                | Noncurrent liabilities                                                 |                                      |     |           |     |          |      | (60  | )    |   |     | (60  | )  
|                                |                                                                        |                                      |     |            |     |          |      |      |      |   |     |     
|                                |                                                                        | Total liabilities assumed (disposed) |     |            | 13  |          |      |      | (56  | ) |     |      | (43 | )
|                                |                                                                        |                                      |     |            |     |          |      |      |      |   |     |     
|Net assets acquired (disposed)  |                                                                        | $                                    | 652 |            |     | $        | (476 | )    |      | $ | 176 |     
|                                |                                                                        |                                      |     |            |     |          |      |      |      |   |     |     

In addition to the wireless property exchange,
AT&T Wireless and Triton, through wholly-owned subsidiaries,
signed an agreement in July 2004 to terminate their
stockholders agreement which would terminate a market
exclusivity arrangement between the parties. As of the close of
the AT&T Wireless acquisition, the Company had wireless
operations in markets where AT&T Wireless was prohibited
from operating under the exclusivity arrangement. In exchange
for the termination of the stockholders agreement,
AT&T Wireless agreed to surrender to Triton its equity
interest in Triton valued at $194. This transaction closed on
October 26, 2004, immediately following the acquisition of
AT&T Wireless. With the consummation of this agreement, the
Company is able to provide on its network continuing service in
areas where Triton currently has operations. The Company
recognized no gain or loss on the transaction.

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PART II (Dollars
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Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Pro Forma
Financial Information

The following unaudited pro forma consolidated
results of operations of the Company for the years ended
December 31, 2003 and 2004 assume that the acquisitions of
AT&T Wireless and the Virginia properties were completed as
of January 1 in each fiscal year shown below:

|                                         |  |              |        |      |  |   |        | 
|---------------------------------------- |  | ------------ | ------ | ---- |  | - | ------ | 
|                                         |  |             
|                                         |  | Year Ended  
|                                         |  | December 31,
|                                         |  |             
|                                         |  | 2003         |        | 2004
|                                         |  |              |        |     
|                                         |  |             
|                                         |  | (Unaudited) 
|Revenues                                 |  | $            | 31,238 |      |  | $ | 32,179 | 
|Income before provision for income taxes |  |              | 1,626  |      |  |   | 232    | 
|Net income                               |  |              | 1,353  |      |  |   | 193    | 

The pro forma amounts represent the historical
operating results of AT&T Wireless and the Virginia
properties with appropriate adjustments that give effect to
depreciation and amortization, interest expense, income taxes,
and the elimination of intercompany roaming activity between the
Company, AT&T Wireless and the Virginia properties. The
effects of other non-acquisition related items discussed in
Notes 14 and 20 are included in the pro forma amounts
presented above. The pro forma amounts are not necessarily
indicative of the operating results that would have occurred if
the acquisitions and related transactions had been completed at
the beginning of the applicable periods presented. In addition,
the pro forma amounts are not necessarily indicative of
operating results in future periods, in which the Company might
realize revenue enhancements and cost savings.

Acquisition
of NextWave Licenses

In August 2003, the Company executed an agreement
with NextWave Telecom, Inc. and certain of its affiliates for
the purchase of FCC licenses for wireless spectrum in
34 markets for $1,400 in cash. The transaction closed in
April 2004, and the Company recorded this cost as additional
licenses in the consolidated balance sheet. The funding for this
transaction consisted of $900 in existing cash on hand and $500
from commercial paper, which was repaid prior to
December 31, 2004.

Puerto Rico
Joint Venture

In April 2002, the Company and an affiliate of
SBC completed a transaction with T-Mobile in which T-Mobile
contributed assets for a 6% equity interest in the
Companys Puerto Rico wireless communications operations.
No gain or loss was recognized on this transaction. This
transaction resulted in a decrease in the Companys
ownership interest in the Puerto Rico business from 50% to 47%.
Due to the fact that all existing control provisions have been
retained by the Company, consolidation of the financial
statements of the Puerto Rico business continues. On each of the
fifth, seventh and tenth anniversaries of this transaction,
T-Mobile and the Company have fair market value put and call
options, respectively, related to T-Mobiles 6% equity
interest.

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Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Dispositions

Investment in
Cincinnati Bell Wireless

In August 2004, the Company and Cincinnati Bell
Inc. (Cincinnati Bell) signed an agreement, amended in February
2005, that allows the Company the right to put to Cincinnati
Bell, any time on or after January 31, 2006, AT&T
Wireless 19.9% equity interest in Cincinnati Bells
wireless subsidiary, Cincinnati Bell Wireless LLC (CBW), for
$83. The agreement also allows Cincinnati Bell the right to call
the equity any time before January 31, 2006, for $85 plus
interest. On and after January 31, 2006, Cincinnati Bell
has the right to call the equity for $83 plus interest.

Additionally, the Company, AT&T Wireless and
Cincinnati Bell amended the CBW operating agreement to remove
the exclusivity arrangement applicable to AT&T Wireless,
which allows the Company to provide continuing service over its
network following the closing of the Companys acquisition
of AT&T Wireless in areas where CBW currently has
operations. By its terms, this amendment was effective on
October 26, 2004, immediately following the Companys
acquisition of AT&T Wireless.

Upon consummation of the AT&T Wireless
acquisition, the Company and Cincinnati Bell also amended
certain provisions of the CBW operating agreement to eliminate
the right of the Company to appoint any members of the member
committee and limit the circumstances in which the Company will
retain approval rights over the actions of CBW. As a result, the
Company accounts for its investment in CBW under the cost
method. This investment, which has a carrying amount of $81 at
December 31, 2004, is included in Other assets
in the consolidated balance sheets.

Mobitex Data
Business

Pursuant to an agreement signed in September
2004, the Company sold Cingular Interactive, L.P. (Cingular
Interactive), a data messaging business utilizing the
proprietary Mobitex packet switched network, to
newly formed affiliates of Cerberus Capital Management, L.P.
(Buyer) for $45. The Company retained Cingular
Interactives direct e-mail customers, as well as several
other major accounts. The Company will continue its involvement
in this data business based upon Mobitex technology
as a reseller of the Buyers services. The FCC licenses of
Cingular Interactive were retained by the Company and leased to
the Buyer pending FCC approval for the transfer. The sale
transaction closed in October 2004 and the license transfer
closed in December 2004.

In connection with its agreement to sell Cingular
Interactive, the Company evaluated the Cingular Interactive
long-lived asset carrying values, including property, plant and
equipment and FCC licenses, for recoverability. Based on the
results of the recoverability test, the Company adjusted the
carrying values of the Cingular Interactive long-lived assets to
their fair value in September 2004, resulting in a loss of $31.
Fair value was determined using the agreed upon sale price for
the Cingular Interactive assets, less costs to sell. The
write-down of the long-lived assets is included in Cost of
services in the consolidated statements of income and
Other, net in the consolidated statements of cash
flows. The loss recognized on sale of Cingular Interactive in
October 2004 was not significant.

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Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


4.     Property,
Plant and Equipment

Property, plant and equipment is summarized as
follows:

|                                               |  |              |       |              |  |      |        |   |  |   |         |  
|---------------------------------------------- |  | ------------ | ----- | ------------ |  | ---- | ------ | - |  | - | ------- | -
|                                               |  |              |       |             
|                                               |  |              |       | December 31,
|                                               |  | Estimated    |       |             
|                                               |  | Useful Lives |       | 2003         |  | 2004
|                                               |  |              |       |              |  |     
|                                               |  | (In years)   |       | (Restated)   |  |     
|Land                                           |  |              |      |              |  | $    | 55     |   |  | $ | 95      |  
|Buildings and building improvements            |  |              | 10-25 |              |  |      | 3,426  |   |  |   | 6,182   |  
|Operating and other equipment                  |  |              | 2-15  |              |  |      | 15,844 |   |  |   | 25,388  |  
|Furniture and fixtures                         |  |              | 3-10  |              |  |      | 348    |   |  |   | 450     |  
|Construction in progress                       |  |              |      |              |  |      | 364    |   |  |   | 810     |  
|                                               |  |              |       |              |  |      |        |   |  |   |         |  
|                                               |  |              |       |              |  |      | 20,037 |   |  |   | 32,925  |  
|Less accumulated depreciation and amortization |  |              |       |              |  |      | (9,075 | ) |  |   | (10,967 | )
|                                               |  |              |       |              |  |      |        |   |  |   |         |  
|Property, plant and equipment, net             |  |              |       |              |  | $    | 10,962 |   |  | $ | 21,958  |  
|                                               |  |              |       |              |  |      |        |   |  |   |         |  

Depreciation expense, capitalized interest and
network engineering costs incurred during the construction phase
of the Companys wireless network are summarized as follows:

|                                      |  |                         |       |      |  |      |       |  |  |   |       | 
|------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|                                      |  |                        
|                                      |  | Year Ended December 31,
|                                      |  |                        
|                                      |  | 2002                    |       | 2003 |  | 2004
|                                      |  |                         |       |      |  |     
|                                      |  | (Restated)              |       |      |  |     
|Depreciation expense                  |  | $                       | 1,661 |      |  | $    | 1,927 |  |  | $ | 2,562 | 
|Capitalized interest costs            |  |                         | 27    |      |  |      | 15    |  |  |   | 16    | 
|Capitalized network engineering costs |  |                         | 127   |      |  |      | 103   |  |  |   | 134   | 

The net book value of assets recorded under
capital leases was $928 and $916 at December 31, 2003 and
2004, respectively. These capital leases principally relate to
communications towers and other operating equipment.
Amortization of assets recorded under capital leases is included
in depreciation expense. Capital lease additions for the years
ended December 31, 2002, 2003 and 2004 were $121, $143 and
$94, respectively.

The Companys cellular/PCS networks are
currently equipped with GSM and TDMA digital transmission
technologies. In the second quarter of 2004, the Company
completed a two-year overlay of GSM equipment throughout its
TDMA markets to provide a common voice standard. As a part of
this project, the Company added high-speed technologies for data
services known as General Packet Radio Service (GPRS) and
Enhanced Data Rates for GSM Evolution (EDGE). Effective
January 1, 2003, the Company implemented the results of a
review of the estimated service lives of its remaining TDMA
network assets. The Company determined that a reduction in the
useful lives of TDMA assets was warranted based on the projected
transition of network traffic to its GSM network. Useful lives
were shortened to fully depreciate all TDMA equipment by
December 31, 2008. Depreciation expense increased by $91
for the year ended December 31, 2003 as a result of the
change in estimate.

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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Due to the accelerated migration of traffic to
its GSM network experienced in 2004, the Company again evaluated
the estimated useful lives of its TDMA equipment. This review
was completed in the fourth quarter and, effective
October 1, 2004, useful lives were further shortened to
fully depreciate all TDMA equipment by December 31, 2007.
This change in estimate increased depreciation expense in the
fourth quarter of 2004 by $61 and is estimated to increase 2005
depreciation expense by approximately $246. The Company will
continue to monitor the rate of transition of its existing
customers and acquired AT&T Wireless customers to GSM, and,
therefore, additional changes to shorten depreciable lives may
be necessary. The finalization of certain AT&T Wireless
integration plans in the first and second quarters of 2005 may
also result in the need to shorten estimated useful lives of
network and other property, plant and equipment.

During 2002, the Company provided a $50 security
deposit to a contract engineering vendor that is being utilized
to perform construction work on the Companys network. The
security deposit bears interest at LIBOR plus 10 basis
points and is collateralized by a bank letter of credit. The
security deposit, which was returned to the Company in January
2005, is included in Other assets in the
consolidated balance sheets as of December 31, 2004.



|   |                  
|-- | -----------------
|5. | Intangible Assets

Effective January 1, 2002, the Company
adopted SFAS 142. In conjunction with this adoption, the
Company reassessed the useful lives of previously recognized
intangible assets. A significant portion of its intangible
assets are FCC licenses that provide the Company with the
exclusive right to utilize certain radio frequency spectrum to
provide wireless communications services. While FCC licenses are
issued for only a fixed time, generally 10 years, such
licenses are subject to renewal by the FCC. Renewals of FCC
licenses have occurred routinely and at nominal cost. Moreover,
the Company has determined that there are currently no legal,
regulatory, contractual, competitive, economic or other factors
that limit the useful lives of its FCC licenses. As a result,
the FCC licenses are treated as an indefinite-lived intangible
asset under the provisions of SFAS 142 and are not
amortized but rather are tested for impairment annually or when
events and circumstances warrant. The Company continues to
reevaluate the useful life determination for FCC licenses each
reporting period to determine whether events and circumstances
continue to support an indefinite useful life.

The Company completed the transition impairment
test of its indefinite-lived intangible assets as of
January 1, 2002 and determined that no impairment existed.
In accordance with EITF 02-7, Unit of Accounting for
Testing Impairment of Indefinite-Lived Intangible Assets,this impairment test was performed on an aggregate basis,
consistent with the Companys management of the business on
a national scope. The Company utilized a fair value approach,
incorporating discounted cash flows, to complete the test. This
approach determines the fair value of the FCC licenses and,
accordingly, incorporates cash flow assumptions regarding the
investment in a network, the development of distribution
channels and other inputs for making the business operational.
As these inputs are included in determining free cash flows of
the business, the present value of the free cash flows is
attributable to the licenses. The discount rate applied to the
cash flows is consistent with the Companys
weighted-average cost of capital.

The Company completed the transition impairment
test of goodwill as of January 1, 2002 using a two-step
process. The first step screens for potential impairment, while
the second step measures the amount of the impairment, if any.
In the first quarter of 2002, the Company completed the first
step of the goodwill impairment transition tests as of
January 1, 2002 for its reporting units. For goodwill
related to the

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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Companys cellular/ PCS business, the first
step indicated no impairment in value. For goodwill related to
the Mobitex data business, the first step indicated an
impairment in value. To measure any impairment, in the second
quarter of 2002, the Company completed the second step of the
goodwill impairment transition test for the Mobitex data
business using a discounted cash flow approach. Based on the
results of this test, the Company recognized an impairment of
the entire goodwill balance related to its Mobitex data
business, with a carrying value of $32, and reflected the
impairment as a cumulative effect of a change in accounting
principle in the first quarter of 2002. The Company believes
that the decline in the fair value of its Mobitex business was
due to the development of new wireless data technologies.

Using methodologies consistent with those applied
for its transitional impairment tests performed as of
January 1, 2002, the Company completed its annual
impairment tests for goodwill and indefinite-lived FCC licenses
during the fourth quarters of 2002, 2003 and 2004. These annual
impairment tests, prepared as of October 1, resulted in no
impairment of the Companys goodwill or indefinite-lived
FCC licenses. The annual impairment test conducted in 2004 did
not include the goodwill and indefinite-lived FCC licenses that
were recorded as a result of the Companys acquisition of
AT&T Wireless on October  26, 2004 (see
Note 3).

Summarized below are the carrying values for the
major classes of intangible assets that will continue to be
amortized under SFAS 142, as well as the carrying values of
those intangible assets deemed to have indefinite lives:

|                                               |                                       |            |  |                   |  |                   |       |          |  |              |        |      |   |   |       |        |  |   |      |      |  
|---------------------------------------------- | ------------------------------------- | ---------- |  | ----------------- |  | ----------------- | ----- | -------- |  | ------------ | ------ | ---- | - | - | ----- | ------ |  | - | ---- | ---- | -
|                                               |                                       |            |  |                   |  |                  
|                                               |                                       |            |  | December 31, 2003 |  | December 31, 2004
|                                               |                                       |            |  |                   |  |                  
|                                               |                                       | Estimated  |  | Gross             |  |                   |       | Gross    |  |             
|                                               |                                       | Useful     |  | Carrying          |  | Accumulated       |       | Carrying |  | Accumulated 
|                                               |                                       | Lives      |  | Amount            |  | Amortization      |       | Amount   |  | Amortization
|                                               |                                       |            |  |                   |  |                   |       |          |  |             
|                                               |                                       | (In years) |  |                   |  |                   |       |          |  |             
|Intangible assets subject to amortization:     |                                       |            |  |                   |  |                   |       |          |  |              |        |      |   |   |       |        |  |   |      |     
|                                               | FCC licenses used in Mobitex business |            |  | 4                 |  |                   | $     | 28       |  |              | $      | (7   | ) |   | $     |       |  |   | $    |     |  
|                                               | Foreign licenses                      |            |  | 9-18              |  |                   |       |         |  |              |        |     |   |   |       | 14     |  |   |      |     |  
|                                               | Customer relationships                |            |  | 5                 |  |                   |       | 1,070    |  |              |        | (920 | ) |   |       | 5,273  |  |   |      | (575 | )
|                                               | Other                                 |            |  | 1-10              |  |                   |       | 147      |  |              |        | (143 | ) |   |       | 312    |  |   |      | (73  | )
|                                               |                                       |            |  |                   |  |                   |       |          |  |              |        |      |   |   |       |        |  |   |      |     
|Total                                          |                                       |            |  |                   |  | $                 | 1,245 |          |  | $            | (1,070 | )    |   | $ | 5,599 |        |  | $ | (648 | )   
|                                               |                                       |            |  |                   |  |                   |       |          |  |              |        |      |   |   |       |        |  |   |      |     
|Intangible assets not subject to amortization: |                                       |            |  |                   |  |                   |       |          |  |              |        |      |   |   |       |        |  |   |      |     
|                                               | FCC licenses                          |            |  |                   |  |                   | $     | 7,748    |  |              | $      |     |   |   | $     | 24,748 |  |   | $    |     |  
|                                               |                                       |            |  |                   |  |                   |       |          |  |              |        |      |   |   |       |        |  |   |      |     
|                                               | Goodwill                              |            |  |                   |  |                   | $     | 849      |  |              | $      |     |   |   | $     | 21,637 |  |   | $    |     |  
|                                               |                                       |            |  |                   |  |                   |       |          |  |              |        |      |   |   |       |        |  |   |      |     

The weighted average estimated useful lives of
intangible assets subject to amortization was 5.0 years for
the year ended December 31, 2004, with remaining useful
lives of approximately 4.8 years.

117



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


The changes in the carrying value of goodwill for
the year ended December 31, 2004 are as follows; changes in
goodwill for the year ended December 31, 2003 are
immaterial.

|                           |                      |   |        |        |  
|-------------------------- | -------------------- | - | ------ | ------ | -
|Balance, December 31, 2003 |                      | $ | 849    |       
|                           | Goodwill acquired    |   |        | 20,906 |  
|                           | Goodwill disposed of |   |        | (118   | )
|Balance, December 31, 2004 |                      | $ | 21,637 |       

The following table presents current and
estimated amortization expense for each of the following periods:

|                                                        |                     |  |   |       | 
|------------------------------------------------------- | ------------------- |  | - | ----- | 
|Aggregate amortization expense for the year ended:      |                     |  |   |      
|                                                        | 2002                |  | $ | 188   | 
|                                                        | 2003                |  |   | 162   | 
|                                                        | 2004                |  |   | 515   | 
|Estimated amortization expense for the year
    ending: |                     |  |   |      
|                                                        | 2005                |  |   | 1,763 | 
|                                                        | 2006                |  |   | 1,322 | 
|                                                        | 2007                |  |   | 960   | 
|                                                        | 2008                |  |   | 606   | 
|                                                        | 2009 and thereafter |  |   | 300   | 

In addition to the SFAS 142 intangible
assets noted above, the Company recorded $1 of intangible assets
in each of 2003 and 2004 in connection with the recognition of
an additional minimum liability for its bargained pension plan
and/or other unqualified benefit plans as required by
SFAS No. 87, Employers Accounting for
Pensions, (SFAS 87) (see Note 17).



|   |                                                     
|-- | ----------------------------------------------------
|6. | Investments in and Advances to Equity
    Affiliates

The Company has investments in affiliates and has
made advances to entities that provide the Company access to
additional U.S. and international wireless markets. The Company
does not have a controlling interest in these investments, nor
do these investments meet the criteria for consolidation under
FIN 46R. Substantially all of these investments are
accounted for under the equity method of accounting. The most
significant of these investments was GSMF, a jointly controlled
network infrastructure venture with T-Mobile for networks in the
New York City metropolitan area, California and Nevada.

At December 31, 2004, the Companys
investments in equity method unconsolidated subsidiaries also
included investments obtained in the Companys purchase of
AT&T Wireless (see Note 3). At December 31, 2003,
the carrying value of the Companys investments accounted
for under the equity method was less than the Companys
share of the underlying reported net assets by $86; at
December 31, 2004, the carrying value exceeded the
Companys share of the underlying reported net assets by
$56. The Company received cash distributions from its equity
method unconsolidated subsidiaries of $142 for the year ended
December 31, 2004, primarily from Atlantic West B.V. as a
result of the sale of its interest in Eurotel Bratislava a.s.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Investments in and advances to equity affiliates
consist of the following:

|                                               |  |                 |       |      |  |   |       | 
|---------------------------------------------- |  | --------------- | ----- | ---- |  | - | ----- | 
|                                               |  |                
|                                               |  | At December 31:
|                                               |  |                
|                                               |  | 2003            |       | 2004
|                                               |  |                 |       |     
|                                               |  | (Restated)      |       |     
|Investment in GSMF                             |  | $               | 2,234 |      |  | $ | 2,108 | 
|Investment in Atlantic West B.V. (Netherlands) |  |                 |      |      |  |   | 349   | 
|Investment in IDEA Cellular Ltd. (India)       |  |                 |      |      |  |   | 210   | 
|Other                                          |  |                 | 35    |      |  |   | 9     | 
|                                               |  |                 |       |      |  |   |       | 
|                                               |  | $               | 2,269 |      |  | $ | 2,676 | 
|                                               |  |                 |       |      |  |   |       | 

GSMF

In November 2001, the Company and T-Mobile formed
GSMF and contributed to it portions of their existing network
infrastructures in the California, Nevada and New York City
metropolitan area markets. Management control of GSMF was vested
in a four-member management committee, to which each company had
the right to appoint two members. GSMF was not a variable
interest entity as defined by FIN 46R nor did the Company
have the unilateral ability to control any actions of GSMF. As a
result, the Companys interest in GSMF was accounted for as
an equity method investment. Both companies bought network
services from GSMF but retained ownership and control of their
own licenses in those markets. The Company and T-Mobile
independently marketed their services to customers using their
respective brand names and utilized their own sales, marketing,
billing and customer care operations. In July 2002, the Company
began marketing its commercial service in the New York City
market and T-Mobile began service in California and Nevada.

On May 25, 2004, the Company and T-Mobile
announced their intent to terminate the network infrastructure
joint venture, with the Company selling the California and
Nevada network and certain licenses to T-Mobile. The transaction
closed on January 5, 2005. See Note 20 for additional
information.

The Company and T-Mobile jointly funded capital
expenditures of GSMF. Pursuant to the operating agreements, the
Company and T-Mobile procured services and network equipment on
behalf of GSMF in the respective markets. Network equipment was
contributed to GSMF at prices which were mutually agreed upon by
the parties and which approximated fair value. The Company
deferred any resulting profits and recorded them as part of the
Companys investments in and advances to equity affiliates.
The Company recognized the intercompany profit over the
estimated useful lives of the related assets as a reduction of
equity in net loss of affiliates.

Capital contributions to GSMF were generally
determined by the Companys proportionate share of the
annual capital expenditure requirements based on each
partys incremental growth in network usage, and such
contributions were accounted for as an increase to the
Companys investment. During 2002, 2003 and 2004, the
Company made net capital contributions to GSMF of $707, $612 and
$290, respectively.

The Company had contractual commitments to
contribute cash of $225 to GSMF in each of 2002 and 2003. The
2002 and 2003 capital contribution amounts above include $225 of
cash contributions made in

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


each year by the Company in satisfaction of the
Companys contractual commitments. Upon dissolution of the
joint venture, a portion of this contribution was distributed to
T-Mobile (see Note 20).

The Company incurred and charged to GSMF certain
network operating costs. The monthly operating expenses of GSMF,
including monthly cash payments made on tower capital lease
obligations, were then charged back to the Company and T-Mobile
based upon each partys proportionate share of licensed
spectrum in each market. Through a separate reciprocal home
roaming agreement, the Company and T-Mobile charged each other
for usage that was not in the same proportion as the
spectrum-based allocations. This usage charge was primarily
based upon the Companys and T-Mobiles share of the
total minutes of use on the respective networks. These charges
for network services are included in Cost of
services in the consolidated statements of income. These
transactions are summarized as follows:

|                                         |  |                         |     |      |  |      |     |  |  |   |     | 
|---------------------------------------- |  | ----------------------- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|                                         |  |                        
|                                         |  | Year Ended December 31,
|                                         |  |                        
|                                         |  | 2002                    |     | 2003 |  | 2004
|                                         |  |                         |     |      |  |     
|Network operating costs charged to GSMF  |  | $                       | 225 |      |  | $    | 320 |  |  | $ | 385 | 
|Network services received based on usage |  |                         | 216 |      |  |      | 254 |  |  |   | 253 | 

At December 31, 2003 and 2004, the Due
(to) from affiliates, net caption in the consolidated
balance sheets included the following amounts related to
transactions between the Company and GSMF:

|                   |                                   |              |   |      |   |  |   |     | 
|------------------ | --------------------------------- | ------------ | - | ---- | - |  | - | --- | 
|                   |                                   |             
|                   |                                   | At          
|                   |                                   | December 31,
|                   |                                   |             
|                   |                                   | 2003         |   | 2004
|                   |                                   |              |   |     
|Due (to)/from for: |                                   |              |   |      |   |  |   |    
|                   | Settlement of Capital Obligations |              | $ | (17  | ) |  | $ | 125 | 
|                   | Settlement of Operating Expenses  |              |   | 20   |   |  |   | 13  | 

GSMF incurred net losses due to depreciation,
deferred rent and interest expense, which are not reimbursed by
the Company or T-Mobile. For the years ended December 31,
2002, 2003 and 2004, the Company recorded equity in the net loss
of GSMF of $250 (restated), $335 (restated) and $416,
respectively. At December 31, 2004, the Companys
economic interest in GSMF approximated 60%.

At December 31, 2004, the Company remained
obligated with respect to $31 of capital lease obligations
included in the non-current liabilities caption of GSMFs
summarized balance sheet information below. These capital lease
obligations relate to tower space leased from an affiliate of
SBC (see Note 19).

120



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Summarized financial information with respect to
GSMF is as follows:

|                              |  |              |       |      |  |   |       | 
|----------------------------- |  | ------------ | ----- | ---- |  | - | ----- | 
|                              |  |             
|                              |  | December 31,
|                              |  |             
|                              |  | 2003         |       | 2004
|                              |  |              |       |     
|                              |  | (Restated)   |       |     
|Balance Sheet Information:    |  |              |       |      |  |   |       | 
|Current assets                |  | $            | 9     |      |  | $ | 139   | 
|Property, plant and equipment |  |              | 3,588 |      |  |   | 4,133 | 
|Current liabilities           |  |              | 9     |      |  |   | 139   | 
|Noncurrent liabilities        |  |              | 273   |      |  |   | 330   | 
|Members capital              |  |              | 3,315 |      |  |   | 3,803 | 

|                                            |  |                         |      |            |  |      |      |   |  |   |      |  
|------------------------------------------- |  | ----------------------- | ---- | ---------- |  | ---- | ---- | - |  | - | ---- | -
|                                            |  |                        
|                                            |  | Year Ended December 31,
|                                            |  |                        
|                                            |  | 2002                    |      | 2003       |  | 2004
|                                            |  |                         |      |            |  |     
|                                            |  | (Restated)              |      | (Restated) |  |     
|Income Statement Information:               |  |                         |      |            |  |      |      |   |  |   |      |  
|Revenues                                    |  | $                       | 325  |            |  | $    | 451  |   |  | $ | 554  |  
|Costs and expenses (excluding depreciation) |  |                         | 327  |            |  |      | 452  |   |  |   | 578  |  
|Depreciation expense                        |  |                         | 324  |            |  |      | 454  |   |  |   | 589  |  
|Operating loss                              |  |                         | (326 | )          |  |      | (455 | ) |  |   | (613 | )
|Interest expense                            |  |                         | 17   |            |  |      | 19   |   |  |   | 20   |  
|Other expense                               |  |                         |     |            |  |      | 5    |   |  |   | 18   |  
|Net loss                                    |  |                         | (343 | )          |  |      | (479 | ) |  |   | (651 | )

Current assets are comprised primarily of amounts
due from T-Mobile. Current liabilities are comprised primarily
of amounts due to the Company. Noncurrent liabilities are
comprised primarily of capital lease obligations.



| |                   
| | ------------------
| | Atlantic West B.V.

Atlantic West B.V. (AWBV) is a 50/50 joint
venture between the Company and Verizon Communications, Inc.
(Verizon). AWBV owned a 49% interest in Eurotel Bratislava a.s.
(Bratislava), a wireless operating entity in Slovakia prior to
its sale in December 2004. In December 2004, AWBV sold its
interest in Bratislava to Slovak Telecom a.s. for total cash
proceeds of $315. The Companys share of proceeds from the
sale totaled $158. AWBV distributed $280 of the proceeds upon
completion of the sale, of which $140 was distributed to the
Company. AWBV holds the remaining $35 in cash, along with $662
in cash from a prior sale, which will be distributed equally to
the Company and Verizon upon completion of a repatriation plan
which qualifies under the American Jobs Creation Act of 2004
(see Note 16). The Company recognized no gain or loss on
the sale transaction as the assumed fair value of the
investment, in conjunction with its purchase of AT&T
Wireless, equaled the transaction sale proceeds.

121



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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)




| |                   
| | ------------------
| | IDEA Cellular Ltd.

In December 2004, the Company signed an agreement
to sell its indirect 32.9% interest in IDEA Cellular Ltd.
(IDEA), a cellular telecommunications company in India, to a
joint venture between STT Communications Ltd. and TM
International Sdn, a wholly-owned subsidiary of Telekom Malaysia
Berhd. The Company will, upon closing of the transaction,
receive the U.S. dollar equivalent of Rupees 9,108,628,130
based upon the exchange rate two business days before the
transaction closes. The U.S. dollar equivalent was
approximately $210 as of December 31, 2004. The Company
recorded a pretax currency translation adjustment of $10 within
other comprehensive income (loss) at December 31, 2004 for
the increase in the U.S. dollar equivalent which occurred
between the Companys acquisition of AT&T Wireless and
December 31, 2004. The transaction is subject to, among
other things, approval by several regulatory agencies in India
as well as the lenders of IDEA Cellular Ltd.

See Note 3 for a discussion of the equity
interest in Triton, which the Company received in conjunction
with its acquisition of AT&T Wireless and which was
subsequently surrendered to Triton.



|   |                           
|-- | --------------------------
|7. | Variable Interest Entities

The Company has variable interests in several
entities for which it is deemed to be the primary beneficiary.
These variable interests typically consist of a combination of
any or all of voting equity interests, nonvoting equity
interests, loans and put options that provide the other owners
the right to require the Company to purchase their ownership
interest if and when certain events occur. These entities were
formed to acquire licenses that were restricted by FCC rule to
businesses with limited assets and revenues, and to provide a
means through which disqualified large businesses, such as the
Company or AT&T Wireless, could invest in these licenses. To
date, the activities of these entities have consisted primarily
of acquiring licenses through acquisitions and FCC auctions and
network construction.



| |       
| | ------
| | Salmon

In November 2000, the Company and Crowley Digital
Wireless, LLC (Crowley Digital) entered into an agreement,
pursuant to which Salmon was formed to bid as a very small
business for certain 1900 MHz band PCS licenses
auctioned by the FCC. The auction ended in January 2001. Salmon
was the successful bidder for, and at the conclusion of the
auction proceedings was granted, 45 licenses, for which Salmon
paid $241.

The Company made secured loans to Salmon to fund
the purchase of the 45 licenses. Net advances and loans made for
the year ended December 31, 2002 were $25. In 2002, the FCC
refunded to Salmon the auction deposits pertaining to 34
additional licenses for which it was the highest bidder but the
award of which was later invalidated by a decision of the
U.S. Supreme Court. Salmon used these proceeds to repay
$421 in principal and interest to the Company. The Company
recognized interest income on the loan balance of $22 for the
year ended December 31, 2002.

Crowley Digital has the right to put its
approximate 20% economic interest in Salmon to the Company at a
cash price equal to Crowley Digitals initial investment
plus a specified rate of return. The put right can be exercised
at certain times, and the Company estimates that the earliest
exercise period will begin in February 2006 and the latest
exercise period will end in April 2008. The Companys
maximum liability for

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


the purchase of Crowley Digitals interest
in Salmon under this put right is $225. The fair values of this
put obligation, estimated at $139 and $155 as of
December 31, 2003 and 2004, respectively, are included in
Other noncurrent liabilities in the consolidated
balance sheets.

Management control of Salmon is vested in Crowley
Digital under the terms of Salmons limited liability
company agreement as Crowley Digital appoints three of the five
members of Salmons management committee. The Company does
not have the unilateral ability to control any actions by
Salmon. As a result, the Companys approximate 80%
non-controlling economic interest in Salmon had historically
been accounted for as an equity method investment through
December 31, 2002. For the year ended December 31,
2002, the Company recorded equity losses of $29 associated with
its investment in Salmon.

As described in Note 1, the Company adopted
the provisions of FIN 46, effective January 1, 2003.
The Company determined that Salmon meets the definition of a
variable interest entity and that the Company is the primary
beneficiary of the Salmon variable interests. Accordingly, the
Company consolidated the financial position, results of
operations and cash flows of Salmon, effective January 1,
2003. Consolidation of Salmon in the Companys financial
statements is solely for purposes of complying with FIN 46
and does not reflect any change in voting control over Salmon.
The Company initially measured the assets, liabilities and
noncontrolling interests of Salmon at their carrying amounts.
The equity interest of Crowley Digital is included in
Minority interests in consolidated entities in the
accompanying consolidated balance sheets. The Company did not
restate any previously issued financial statements. The income
statement and cash flow impacts of the Salmon consolidation for
the year ended December 31, 2002 would not have been
material.



| |                                             
| | --------------------------------------------
| | AT&T Wireless Variable Interest
    Entities

As a result of the AT&T Wireless acquisition,
the Companys consolidated financial statements include
other variable interest entities, similar to Salmon, for which
the Company is deemed to be the primary beneficiary. The
Companys maximum liability related to these entities as of
December 31, 2004 was approximately $145, which represents
the gross payment under the put options that provide the other
owners the right to require the Company to purchase their
ownership interests under certain circumstances. Also, through
its acquisition of AT&T Wireless, the Company acquired a
variable interest and was deemed to be the primary beneficiary
in an entity engaged in leasing activities (see Note 9).

The Company has no significant variable interests
for which it is not deemed to be the primary beneficiary.

123



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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)




|   |                    
|-- | -------------------
|8. | Accrued Liabilities

Accrued liabilities are summarized as follows:

|                                      |  |              |       |      |  |   |       | 
|------------------------------------- |  | ------------ | ----- | ---- |  | - | ----- | 
|                                      |  |             
|                                      |  | December 31,
|                                      |  |             
|                                      |  | 2003         |       | 2004
|                                      |  |              |       |     
|                                      |  | (Restated)   |       |     
|Accrued fixed asset purchases         |  | $            | 498   |      |  | $ | 822   | 
|Taxes, other than income              |  |              | 355   |      |  |   | 387   | 
|Payroll and other related liabilities |  |              | 256   |      |  |   | 697   | 
|Agent commissions                     |  |              | 170   |      |  |   | 329   | 
|Advertising                           |  |              | 88    |      |  |   | 231   | 
|Accrued interest                      |  |              | 6     |      |  |   | 232   | 
|Other                                 |  |              | 246   |      |  |   | 1,016 | 
|                                      |  |              |       |      |  |   |       | 
|Total accrued liabilities             |  | $            | 1,619 |      |  | $ | 3,714 | 
|                                      |  |              |       |      |  |   |       | 



|   |     
|-- | ----
|9. | Debt



| |                              
| | -----------------------------
| | Debt Maturing Within One Year



| |                           
| | --------------------------
| | Revolving Credit Agreement

Effective August 1, 2004, the Company
entered into a revolving credit agreement with SBC and BellSouth
for them to provide unsubordinated short-term financing on a pro
rata basis at an interest rate of LIBOR plus .05% for the
Companys ordinary course operations based upon the
Companys budget and forecasted cash needs. The agreement
provides that in the event that the Company has available cash
(as defined) on any business day, such amount shall first be
applied to the repayment of the revolving loans, and any
remaining excess then shall be loaned to SBC and BellSouth, pro
rata, and ultimately applied on the first day of the subsequent
month to the repayment of the Subordinated Notes from SBC and
BellSouth (member loans; see Debt Due to Members
below) if the Company does not then require a cash advance under
the agreement. In addition, the agreement provides that free
cash flow (as defined) after repayment of the revolving loans
and the member loans will be distributed to SBC and BellSouth.
For the quarter ended September 30, 2004, the Company had
advances to members of $50 under this agreement, which were used
to repay a portion of the Companys subordinated member
loans in October 2004. As of December 31, 2004, the members
had advanced $1,667 to the Company under the agreement to fund
operations, of which $899 was repaid through February 2005. The
initial term of the agreement expires in July 2005. The
agreement provides that SBC and BellSouth may extend its term,
and the Company expects them to do so for the foreseeable
future. The weighted average annual interest rate under this
agreement for the period August 1, 2004 through
December 31, 2004 was 2.3%. At December 31, 2004, the
rate was 2.4%.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)




| |                                                                
| | ---------------------------------------------------------------
| | Commercial Paper Program and Revolving Bank
    Credit Facility

At December 31, 2003, the Company had a
commercial paper program and an unsecured 364-day revolving bank
credit facility of $1,000 to support its commercial paper
program. At December 31, 2003, the Company had no
outstanding borrowings under the commercial paper program or the
credit facility and was in compliance with all covenants under
the credit facility. During 2004, the Company borrowed, and
subsequently repaid, $500 under the commercial paper program to
fund the purchase of NextWave licenses (see Note 3).
Following the execution of the revolving credit agreement with
SBC and BellSouth and the full repayment of outstanding
commercial paper, the Company terminated both its commercial
paper program and revolving bank credit facility.



| |                                          
| | -----------------------------------------
| | Accounts Receivable Secured
    Borrowing

In December 2003, the Company established an
accounts receivable secured borrowing program that it could use
to obtain financing not to exceed $400, collateralized by
customer trade accounts receivable and related contract rights.
As of December 31, 2003, the Company was in compliance with
the covenants and had no amounts outstanding under this
financing arrangement. The Company never utilized this facility,
and, effective June 29, 2004, the Company terminated its
accounts receivable secured borrowing program.



| |               
| | --------------
| | Long-term Debt

Long-term debt is summarized as follows:

|                                                                   |                                        |              |       |      |  |   |       |       | 
|------------------------------------------------------------------ | -------------------------------------- | ------------ | ----- | ---- |  | - | ----- | ----- | 
|                                                                   |                                        |             
|                                                                   |                                        | December 31,
|                                                                   |                                        |             
|                                                                   |                                        | 2003         |       | 2004
|                                                                   |                                        |              |       |     
|Due to members  Subordinated Notes                                |                                        | $            | 9,678 |      |  | $ | 9,628 |      
|Due to external parties  Cingular
    Wireless LLC, maker:        |                                        |              |       |      |  |   |       |      
|                                                                   | 5.625% Senior Notes, due December 2006 |              |       | 500  |  |   |       | 500   | 
|                                                                   | 6.5% Senior Notes, due December 2011   |              |       | 750  |  |   |       | 750   | 
|                                                                   | 7.125% Senior Notes, due December 2031 |              |       | 750  |  |   |       | 750   | 
|Due to external parties  AT&T
    Wireless Services, Inc., maker: |                                        |              |       |      |  |   |       |      
|                                                                   | 6.875% Senior Notes, due April 2005    |              |       |     |  |   |       | 250   | 
|                                                                   | 7.35% Senior Notes, due March 2006     |              |       |     |  |   |       | 1,000 | 
|                                                                   | 7.5% Senior Notes, due May 2007        |              |       |     |  |   |       | 750   | 
|                                                                   | 7.875% Senior Notes, due March 2011    |              |       |     |  |   |       | 3,000 | 
|                                                                   | 8.125% Senior Notes, due May 2012      |              |       |     |  |   |       | 2,000 | 
|                                                                   | 8.75% Senior Notes, due March 2031     |              |       |     |  |   |       | 2,500 | 

125



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                                                                                      |                                                                                                       |              |        |      |  |   |        |       | 
|------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | ------------ | ------ | ---- |  | - | ------ | ----- | 
|                                                                                      |                                                                                                       |             
|                                                                                      |                                                                                                       | December 31,
|                                                                                      |                                                                                                       |             
|                                                                                      |                                                                                                       | 2003         |        | 2004
|                                                                                      |                                                                                                       |              |        |     
|Due to external parties  TeleCorp
    Wireless, Inc., maker:                         |                                                                                                       |              |        |      |  |   |        |      
|                                                                                      | 10.625% Senior Subordinated Notes, due July
    2010                                                  |              |        |     |  |   |        | 200   | 
|                                                                                      | Capital leases, 6.0% to 9.6%                                                                          |              |        | 908  |  |   |        | 1,007 | 
|                                                                                      | Capital leases, Japanese Yen and U.S. Dollar
    denominated, 4.86%  7.08% in 2003 and 5.56% in 2004 |              |        | 47   |  |   |        | 4     | 
|                                                                                      | Other                                                                                                 |              |        | 64   |  |   |        | 52    | 
|                                                                                      |                                                                                                       |              |        |      |  |   |        |      
|Total long-term debt, including current maturities                                    |                                                                                                       |              | 12,697 |      |  |   | 22,391 |      
|Unamortized premium (discount) on Senior
    Notes and Senior Subordinated Notes, net |                                                                                                       |              | (11    | )    |  |   | 1,963  |      
|Unamortized discount on other Notes                                                   |                                                                                                       |              |       |      |  |   | (3     | )    
|Current maturities of long-term debt                                                  |                                                                                                       |              | (95    | )    |  |   | (491   | )    
|Interest rate swap fair value adjustment (see
    Note 10)                            |                                                                                                       |              | 1      |      |  |   | (3     | )    
|                                                                                      |                                                                                                       |              |        |      |  |   |        |      
|Total long-term debt                                                                  |                                                                                                       | $            | 12,592 |      |  | $ | 23,857 |      
|                                                                                      |                                                                                                       |              |        |      |  |   |        |      



| |                    
| | -------------------
| | Debt Due to Members

The long-term debt due to members represents
loans due to SBC and BellSouth. Interest accrues and is payable
monthly. Interest expense on the member loans and the revolving
credit agreement for the years ended December 31, 2002,
2003 and 2004 was $726, $653 and $586, respectively. As of
July 1, 2003, the Company executed amended, restated and
consolidated subordinated promissory notes to modify the terms
of the Companys member loans. The amendment reduced the
fixed interest rate from 7.5% to 6.0% and extended the maturity
date to June 30, 2008. The Company may, however, prepay the
member loans at any time, subject to the provisions described
below, and is obligated to prepay the member loans to the extent
of excess cash from operations (as defined). See Revolving
Credit Agreement above.

SBC and BellSouth have agreed to subordinate
their repayment rights applicable to the member loans to the
repayment rights of the Companys senior debt. Senior debt
includes the Companys Senior Notes, including Senior Notes
of AT&T Wireless and other borrowings from external parties
designated as senior debt to which SBC and BellSouth have
specifically agreed to be subordinate. The payment of principal
and interest on the subordinated member loans by the Company is
prohibited in the event of bankruptcy or an event of default in
the payment or prepayment of any principal of or interest on any
senior debt, or in the event of an acceleration of the
subordinated debt upon its default, until the senior debt has
been repaid in full.



| |                                          
| | -----------------------------------------
| | Senior Notes of Cingular Wireless
    LLC

In December 2001, the Company completed the
private placement of $2,000 of Senior Notes under
Regulation D of the Securities Act of 1933. The Senior
Notes are unsecured obligations and rank equally with all other
unsecured and unsubordinated indebtedness. In 2002, the Company
filed with the SEC a registration statement on Form S-4
pertaining to the exchange of the private placement Senior Notes
for

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Senior Notes that are registered under the
securities laws in identical principal amounts and with
substantially identical terms. Interest on the Senior Notes is
payable in arrears semi-annually on June 15 and December 15.

The Senior Notes are governed by an indenture
with J.P. Morgan Trust Company, N.A., which acts as
trustee. The indenture contains a negative pledge
provision that the Company will not subject its property or
assets to any mortgage or other encumbrance unless the Senior
Notes are secured equally and ratably with other indebtedness
that is secured by that property or assets, unless secured
debt would not exceed 15% of consolidated net
tangible assets (as such terms are defined in the
indenture). There is no sinking fund or mandatory redemption
applicable to the Senior Notes. The Senior Notes are redeemable,
in whole or in part, at the Companys option, at any time
at a price equal to their principal amount plus any accrued
interest and premium. CW II and AT&T Wireless became
co-obligated on the Companys Senior Notes following the
Companys acquisition of AT&T Wireless (see
Note 3).



| |                              
| | -----------------------------
| | Senior Notes of AT&T Wireless

Following the Companys acquisition of
AT&T Wireless in October 2004 (see Note 3), the
Company, along with CW II, became co-obligated on $9,500 of
Senior Notes of AT&T Wireless (see further discussion below
and in Note 3). Included in the Senior Notes of AT&T
Wireless are $6,500 of unsecured and unsubordinated Senior Notes
issued under a March 2001 private placement, with $1,000
maturing on March 1, 2006; $3,000 maturing on March 1,
2011; and $2,500 maturing on March 1, 2031. Fixed interest
rates range from 7.35% to 8.75% per annum, payable
semi-annually. Also included in the Senior Notes are $3,000 of
unsecured and unsubordinated Senior Notes issued through an
April 2002 registered public offering by AT&T Wireless, with
$250 maturing on April 18, 2005; $750 maturing on
May 1, 2007; and $2,000 maturing on May 1, 2012. Fixed
interest rates range from 6.875% to 8.125% per annum,
payable semi-annually.

The $9,500 of Senior Notes of AT&T Wireless
are governed under two separate indentures with U.S. Bank N.A.,
successor to the Bank of New York, as trustee. The Senior Notes
are unsecured unsubordinated obligations, ranking equally in
right with all other unsecured and unsubordinated obligations of
the Company. The Senior Notes are redeemable, as a whole or in
part, at the Companys option, at any time or from time to
time, at a price equal to their principal amount plus any
accrued interest and premium similar to that applicable to the
Companys Senior Notes. The Senior Notes are not subject to
any sinking fund requirements. With respect to both indentures,
covenants limit activity related to sale and leaseback
transactions (as defined) under certain circumstances and
contain a negative pledge provision similar to that
applicable to the Companys Senior Notes.



| |                                                                           
| | --------------------------------------------------------------------------
| | TeleCorp Wireless, Inc. and Tritel PCS, Inc.
    Senior Subordinated Notes

In conjunction with AT&T Wireless
acquisition of TeleCorp PCS, Inc. (TeleCorp PCS) in February
2002, AT&T Wireless assumed the debt of TeleCorp PCS
subsidiaries, TeleCorp Wireless, Inc. (TeleCorp) and Tritel PCS,
Inc. (Tritel). At the time of the Companys acquisition of
AT&T Wireless, principal amounts outstanding associated with
the senior subordinated notes of TeleCorp and Tritel were $200
of TeleCorps 10.625% Senior Subordinated Notes due
July 2010 and $206 of Tritels 10.375% Senior

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Subordinated Notes due January 2011. Neither the
Company nor CW II became co-obligated on the TeleCorp and
Tritel Senior Subordinated Notes.

Concurrently with the Companys acquisition
of AT&T Wireless, the Company irrevocably deposited with the
TeleCorp trustee U.S. Treasury securities which upon
maturity will be sufficient to fund the redemption of the
principal amount and related premium of the TeleCorp Notes,
along with interest due prior to the Notes redemption date
(see Note 1). In compliance with the indenture, all of the
U.S. Treasury securities mature prior to the redemption
date of the TeleCorp Notes.

The trustee has been notified that the TeleCorp
Notes are being called for redemption in July 2005; as such, the
outstanding principal and related premium of these Notes is
reflected within Debt maturing within one year on
the consolidated balance sheets at December 31, 2004. In
accordance with SFAS No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities, the TeleCorp Notes and corresponding assets
placed in trust remain on the Companys consolidated
balance sheets as of December 31, 2004 as the Company has
not met the criteria required to derecognize the liability.

The Company also irrevocably deposited with the
Tritel trustee U.S. Treasury securities which upon maturity
were sufficient to fund the redemption of the principal amounts
and related premium of the Tritel Notes, along with amounts of
interest due prior to the Notes redemption dates. In
November 2004, the Tritel Notes were redeemed by the trustee
pursuant to the exercise of the option on the acquisition date.



| |                     
| | --------------------
| | Other Long-term Debt

Also in conjunction with its acquisition of
AT&T Wireless, the Company assumed $132 in bank debt and $63
of debt held by a variable interest entity engaged in leasing
activities. The debts were repaid in December 2004.



| |                              
| | -----------------------------
| | Fair Values of Long-term Debt

At December 31, 2003 and 2004, the fair
values of the Senior Notes and Senior Subordinated Notes were
$2,156 and $13,879, respectively, based on their quoted market
prices. The carrying value of the long-term debt due to members
approximates fair value since the Company may prepay the debt at
any time, as described above, without penalty.

The above Senior Notes and Senior Subordinated
Notes assumed in the Companys acquisition of AT&T
Wireless were recorded at fair value on the acquisition date in
accordance with the purchase accounting requirements of
SFAS 141. The premium recorded at the acquisition date
totaled $2,045, of which $1,973 remains outstanding as of
December 31, 2004. The premium is being amortized under the
effective interest method which reflects market interest rates
on the date of the acquisition. Amortization of the premium is
recorded in the Companys financial statements as a
reduction to interest expense. For the year ended
December 31, 2004, this amortization totaled $44, which
resulted in an effective annual interest rate of 4.7% for the
acquired Senior Notes and Senior Subordinated Notes.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)




| |               
| | --------------
| | Capital Leases

The Company has entered into capital leases
primarily for the use of communications towers. See Note 19
for further discussions regarding these towers.



| |                             
| | ----------------------------
| | Maturities of Long-Term Debt

Maturities of long-term debt outstanding,
including capital lease obligations, at December 31, 2004
are summarized below:

|                            |                                     |      |        |                |  |       |       |       |  |   |        |        | 
|--------------------------- | ----------------------------------- | ---- | ------ | -------------- |  | ----- | ----- | ----- |  | - | ------ | ------ | 
|                            |                                     | Debt |        | Capital Leases |  | Total
|                            |                                     |      |        |                |  |      
|Maturities:                 |                                     |      |        |                |  |       |       |       |  |   |        |       
|                            | 2005                                |      | $      | 474            |  |       | $     | 82    |  |   | $      | 556    | 
|                            | 2006                                |      |        | 1,515          |  |       |       | 82    |  |   |        | 1,597  | 
|                            | 2007                                |      |        | 760            |  |       |       | 86    |  |   |        | 846    | 
|                            | 2008                                |      |        | 9,633          |  |       |       | 90    |  |   |        | 9,723  | 
|                            | 2009                                |      |        | 3              |  |       |       | 95    |  |   |        | 98     | 
|                            | Thereafter                          |      |        | 9,005          |  |       |       | 2,485 |  |   |        | 11,490 | 
|                            |                                     |      |        |                |  |       |       |       |  |   |        |       
|Total minimum payments      |                                     | $    | 21,390 |                |  | $     | 2,920 |       |  | $ | 24,310 |       
|                            | Less capital lease imputed interest |      |        |               |  |       |       | 1,468 |  |   |        | 1,468  | 
|                            | Less capital lease executory costs  |      |        |               |  |       |       | 441   |  |   |        | 441    | 
|                            |                                     |      |        |                |  |       |       |       |  |   |        |       
|Total obligations           |                                     | $    | 21,390 |                |  | $     | 1,011 |       |  | $ | 22,401 |       
|Less current portion        |                                     |      | 474    |                |  |       | 6     |       |  |   | 480    |       
|                            |                                     |      |        |                |  |       |       |       |  |   |        |       
|Total long-term obligations |                                     | $    | 20,916 |                |  | $     | 1,005 |       |  | $ | 21,921 |       
|                            |                                     |      |        |                |  |       |       |       |  |   |        |       



| |                       
| | ----------------------
| | Cash Paid for Interest

Cash paid for interest on debt for the years
ended December 31, 2002, 2003 and 2004 was $905, $862 and
$892, respectively. These amounts include cash paid for interest
on member loans and the revolving credit agreement with the
members of $726, $665 and $582 for the years ended
December 31, 2002, 2003 and 2004, respectively.



|    |                      
|--- | ---------------------
|10. | Financial Instruments

The carrying amounts of cash and cash
equivalents, accounts receivable, accounts payable, advanced
billing and customer deposits and other current liabilities are
reasonable estimates of their fair value due to the short-term
nature of these instruments.

The Company uses interest rate swaps to manage
its interest rate exposure on its debt obligations. The Company
does not invest in derivative instruments for trading purposes.
In March 2003, the Company entered into two interest rate swap
contracts with banks to convert a portion of the fixed rate
exposure on its five-year Senior Notes due December 15,
2006 to variable rates without an exchange of the underlying

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


principal amount. Under the terms of the interest
rate swap contracts, the Company receives interest at a fixed
rate of 5.625% and pays interest at a variable rate equal to the
six-month LIBOR plus a specified margin, based on an aggregate
notional amount of $250. The six-month LIBOR rate on each
semi-annual reset date determines the variable portion of the
interest rate swaps. For the years ended December 31, 2003
and 2004, the effective interest rate associated with this
notional amount was 4.02% and 4.58%, respectively.

The Company has designated the swaps as fair
value hedges of its fixed rate debt. The terms of the interest
rate swap contracts and hedged items are such that effectiveness
can be measured using the short-cut method as defined in
SFAS 133. Hedge ineffectiveness, as determined in
accordance with SFAS 133, had no impact on results of
operations for the years ended December 31, 2003 and 2004.

In accordance with SFAS 133, the Company
recorded a fair value adjustment to the portion of its fixed
rate long-term debt that is hedged. This fair value adjustment
is recorded as an increase or decrease to long-term debt, with
the related value for the interest rate swaps non-current
portion recorded in Other assets or Other
noncurrent liabilities in the consolidated balance sheets.
Interest rate differentials associated with these interest rate
swaps are recorded as an adjustment to a current asset or
liability, with the offset to interest expense over the life of
the interest rate swaps.



|    |                       
|--- | ----------------------
|11. | Concentrations of Risk

The Company relies on local and long-distance
telephone companies and other companies to provide certain
communications services. Additionally, the Company relies on one
vendor to provide billing services for the postpaid subscribers
acquired in conjunction with the Companys acquisition of
AT&T Wireless (see Note 3). Although management
believes alternative vendors could be found in a timely manner,
any disruption of these services could potentially have an
adverse impact on operating results.

The Company relies on roaming agreements with
other wireless carriers to permit the Companys customers
to use their GSM/ GPRS/ EDGE and TDMA networks in areas not
covered by the Companys networks. If these providers
decide not to continue those agreements due to a change in
ownership or other circumstance, this could cause a loss of
service in certain areas and possible loss of customers.

Although the Company attempts to maintain
multiple vendors to the extent practicable, its handset
inventory and network infrastructure equipment, which are
important components of its operations, are currently acquired
from only a few sources. If the suppliers are unable to meet the
Companys needs as it continues to build out and upgrade
its network infrastructure and sell service and handsets, delays
and increased costs in the expansion of the Companys
network infrastructure or losses of potential customers could
result, which would adversely affect operating results.

Financial instruments that could potentially
subject the Company to credit risks consist principally of trade
accounts receivable. Concentrations of credit risk with respect
to these receivables are limited due to the composition of the
customer base, which includes a large number of individuals and
businesses. No customer accounted for more than 10% of
consolidated revenues in any year presented.

Approximately 22,000, or 31%, of the
Companys employees are represented by the Communications
Workers of America (CWA), with contracts expiring on various
dates between February 2005 and

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


February 2008. Approximately 5,700 of the
Companys employees are covered by contracts that expired
in February 2005. On March 2, 2005, the Company and the CWA
announced that they reached a tentative agreement on a labor
contract that covers bargained-for employees in 37 states.
The agreement is subject to ratification by union members. Most
of the contracts contain no-strike clauses. In most areas of the
country and with most job titles, the Company is contractually
required to maintain a position of neutrality and to allow
card-check balloting with respect to unionization and support
the determination of its employees.



|    |                           
|--- | --------------------------
|12. | Related Party Transactions

In addition to the affiliate transactions
described elsewhere in these financial statements, other
significant transactions with related parties are summarized in
the succeeding paragraphs.

In connection with the formation of Cingular, the
Company entered into wireless agency agreements with
subsidiaries of SBC and BellSouth. Such subsidiaries and any of
their affiliates that make an election to do so may act as
authorized agents exclusively on the Companys behalf for
the sale of its wireless services to customers in SBCs and
BellSouths respective incumbent service territories. The
Company is free to contract with other agents, including
retailers and other distributors, for the sale of its wireless
services in these territories and elsewhere throughout the
U.S. In addition to the unilateral rights of SBC and
BellSouth and their affiliates to terminate and to the
Companys right to terminate in certain events, each
wireless agency agreement terminates upon breach, mutual
agreement of the parties or on December 31, 2050. Agent
commissions and compensation charges are included in
Selling, general and administrative in the
consolidated statements of income.

The Company incurred local interconnect and long
distance charges from SBC and BellSouth and their affiliates
related to the provision of wireless services to its
subscribers, which are included in Cost of services
in the consolidated statements of income.

The Company incurred telecommunication and other
charges from SBC and BellSouth and their affiliates in
connection with its internal business operations, which are
primarily included in Selling, general and
administrative in the consolidated statements of income.

Related party charges incurred by the Company are
summarized as follows:

|                                     |  |                         |     |      |  |      |     |  |  |   |     | 
|------------------------------------ |  | ----------------------- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|                                     |  |                        
|                                     |  | Year Ended December 31,
|                                     |  |                        
|Type of Service:                     |  | 2002                    |     | 2003 |  | 2004
|                                     |  |                         |     |      |  |     
|Agent commissions and compensation   |  | $                       | 46  |      |  | $    | 103 |  |  | $ | 67  | 
|Interconnect and long distance       |  |                         | 663 |      |  |      | 815 |  |  |   | 927 | 
|Telecommunications and other charges |  |                         | 85  |      |  |      | 77  |  |  |   | 97  | 

Additionally, the Company has purchase
commitments to SBC, BellSouth and their affiliates of $258 for
dedicated leased lines used to provide interconnection services
and $142 for telecommunications and other services (see
Note 18).

The Company had receivables from affiliates of
$81 and $247 and payables to affiliates of $135 and $109 at
December 31, 2003 and 2004, respectively, primarily with
SBC, BellSouth and GSMF (see Note 6).

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)




|    |                                
|--- | -------------------------------
|13. | Impairment of Long-lived Assets

During the fourth quarter of 2002, the Company
evaluated the recoverability of the long-lived assets, including
property, plant, and equipment and FCC licenses, of its Mobitex
data business. While the business continued to generate positive
operating cash flows, the timing of the Companys migration
to data services over its cellular/PCS networks, as well as
other competitive and technological factors, decreased the cash
flows that the Company expected to generate from continuing to
operate the Mobitex data network. In the fourth quarter of 2002,
the Company determined that the estimated future undiscounted
cash flows were less than the carrying value of the Mobitex data
business long-lived assets. Accordingly, the Company adjusted
the carrying values of the Mobitex data business long-lived
assets to their estimated fair value, resulting in a non-cash
impairment loss of $104. Fair value was determined using a
discounted cash flow approach. The impairment loss is included
in Cost of services in the consolidated statement of
income. The impairment loss was comprised of $71 of property,
plant and equipment and $33 of FCC licenses. In conjunction with
the impairment test, the Company reviewed the remaining useful
lives of the Mobitex data business long-lived assets and
determined the lives to be appropriate. During the fourth
quarter of 2003, the Company evaluated the recoverability of the
long-lived assets of its Mobitex data business and determined no
additional impairment existed. In connection with its agreement
to sell its Mobitex data business, the Company adjusted the
carrying values of the long-lived assets to their fair value in
the third quarter of 2004, resulting in a loss of $31 (see
Note 3).

The Companys cellular/PCS networks utilize
two digital transmission technologies, TDMA and GSM. The TDMA
technologies are deployed over two different spectrum
frequencies, 850 MHz (cellular) and 1900 MHz
(PCS). As discussed in Note 4, in 2002 the Company began
adding GSM equipment throughout its TDMA markets, to provide a
common transmission standard, and adding technologies for
high-speed data services. In the fourth quarter of 2002, the
Company finalized market specific execution strategies
concurrent with the development and approval of its 2003 capital
budget. In several smaller PCS markets, where the Company has
only 10 MHz of available spectrum, it did not have adequate
spectrum depth to concurrently provide wireless services using
both technologies. In these markets, the Company retired the
TDMA network assets in order to deploy GSM technology. The TDMA
network assets used in 1900 MHz markets are frequency
specific and cannot be redeployed for use in the Companys
other 850 MHz markets. Due to the anticipated near-term
removal of these assets from service during the period ranging
from the third quarter of 2003 to the fourth quarter of 2004,
the Company performed an impairment test as required by
SFAS 144 to determine whether the future cash flows of
these markets were sufficient to recover the carrying value of
the related TDMA assets as of December 31, 2002. In the
fourth quarter of 2002, the Company recognized a non-cash
impairment charge of $47 related to its 1900 MHz TDMA
assets in ten markets located in the southeastern and
southwestern U.S. The impairment loss was measured as the
difference between the carrying value of these assets at
December 31, 2002 and their fair value. Fair value was
determined using a discounted cash flow approach. The impairment
loss is included in Cost of services in the
consolidated statement of income.



|    |                                                     
|--- | ----------------------------------------------------
|14. | Acquisition-Related, Integration and Other
    Costs

Management plans to exit certain activities of
AT&T Wireless, including disposing of redundant facilities,
interests in certain foreign operations and domestic wireless
assets required to be divested by the FCC and

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


the U.S. Department of Justice in connection
with the acquisition (see Note 20), and to integrate the
acquired business (see Note 3) with the Company. These
plans affect many areas of the combined company, including sales
and marketing, network, information technology, customer care,
supply chain and general and administrative functions. In
connection therewith, the Company expects to incur significant
costs over the next several years associated with such
dispositions and integration activities. Management is in the
process of developing these plans and expects to complete them
in the first and second quarters of 2005. The Company expects
that the finalization of certain integration plans will result
in adjustments to the purchase price allocation for the acquired
assets and assumed liabilities of AT&T Wireless and may also
result in the need to shorten the useful lives of certain
network and other property, plant and equipment.

In the third and fourth quarters of 2004, the
Company incurred $288 of integration costs, including $101 of
costs to market the combined company, $75 of costs to prepare
systems for the launch of the common customer interfacing
systems and processes, $39 of costs to convert the branding of
AT&T Wireless stores and agent locations to the Cingular
brand, $17 related to employee retention and involuntary
terminations and $56 of other integration planning and execution
costs. These costs are primarily included in Selling,
general and administrative expenses in the consolidated
statements of income.

Employee termination benefits incurred in 2004
were $4 and include involuntary severance payments and related
benefits for certain former Cingular employees who have been
identified to be displaced in the first quarter of 2005.
Employee termination benefits to be paid were recorded in
accordance with SFAS No. 112, Employers
Accounting for Postemployment Benefits(SFAS 112).
Additional liabilities for termination benefits to be provided
to former Cingular employees are expected to be recognized under
SFAS 112 when such costs are probable and estimable.
Additional liabilities for termination benefits to be provided
to former AT&T Wireless employees are expected to be
recognized under EITF Issue No. 95-3, Recognition of
Liabilities in Connection with a Purchase Business Combination(EITF 95-3), as liabilities assumed in the purchase business
combination.



|    |                     
|--- | --------------------
|15. | Reorganization Costs

In August 2002, the Company announced plans
to reorganize its sales operations and to reduce its workforce
in these and other functional areas of the business. It was
expected that approximately 2,500 to 3,000 positions (employees,
contractors and temporary personnel) would be eliminated, with
more than one-third occurring through the elimination of
temporary positions and normal attrition. Substantially all
employees affected received notification in September 2002.
Approximately 1,600 employees were terminated under this
reorganization plan. Employee severance costs were accounted for
in accordance with SFAS 112. For other costs of the
reorganization, the Company adopted SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal
Activities, in 2002 and accounts for the costs of the
reorganization when the liability is incurred. The costs
associated with the reorganization, principally severance, lease
termination and relocation, were not expected to exceed $70.
Substantially all activities associated with this reorganization
were complete as of June 30, 2003. Reorganization costs for
the years ended December 31, 2002 and 2003 were $41 and
$21, respectively, and are principally reflected in
Selling, general and administrative expenses in the
consolidated statements of income.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)




|    |             
|--- | ------------
|16. | Income Taxes

The Company is not a taxable entity for federal
income tax purposes. Federal taxable income or loss is included
in the respective members federal income tax return. The
majority of states follow this treatment. Certain states,
however, impose taxes at the Company level and such taxes are
the responsibility of the Company and are included in the
Companys income tax provision (benefit). The consolidated
financial statements also include income tax provisions
(benefits) for federal and state income taxes for all
corporate subsidiaries of the Company.

Following the Companys acquisition of
AT&T Wireless and related restructuring, AT&T Wireless
became a direct wholly-owned subsidiary of the Company. The
Company and AT&T Wireless transferred significant portions
of their respective assets and liabilities to CW II.
Earnings or losses from CW II flow to its owners in
accordance with their respective ownership interests. The
structure retains AT&T Wireless as a tax-paying corporation
that is a 43% owner of CW II. The Company owns the
remaining 57% of CW II. The Company and CW II are
generally both considered partnerships for federal and state
income tax purposes. For partnerships, income tax items
generally flow through to their members and are taxed at the
member level pursuant to federal and state income tax laws.

Deferred income taxes are recorded using enacted
tax law and rates for the years in which the taxes are expected
to be paid or refunds received. Deferred income taxes are
provided for items when there is a temporary difference in
recording such items for financial reporting and income tax
reporting. A majority of these deferred taxes were recorded
through the required application of the purchase method of
accounting for the Companys acquisition of AT&T
Wireless. As part of purchase accounting, a significant portion
of the assets and liabilities acquired were recorded by the
Company at fair value (see Note 3). The difference between
the fair values recorded for these acquired assets (other than
goodwill) and liabilities and the tax basis of those assets and
liabilities determined the deferred income taxes that have been
recorded in the Companys financial statements.
Additionally, the Company assumed significant tax net operating
losses (NOLs) with its acquisition of AT&T Wireless.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


The provision (benefit) for income taxes consists
of the following:

|                                     |                 |              |    |      |   |      |    |    |   |   |     |     |  
|------------------------------------ | --------------- | ------------ | -- | ---- | - | ---- | -- | -- | - | - | --- | --- | -
|                                     |                 |             
|                                     |                 | Year Ended  
|                                     |                 | December 31,
|                                     |                 |             
|                                     |                 | 2002         |    | 2003 |   | 2004
|                                     |                 |              |    |      |   |     
|Current:                             |                 |              |    |      |   |      |    |    |   |   |     |    
|                                     | Federal         |              | $  | 10   |   |      | $  | 26 |   |   | $   | 14  |  
|                                     | State and local |              |    | 5    |   |      |    | 3  |   |   |     | 2   |  
|                                     | International   |              |    |     |   |      |    |   |   |   |     |    |  
|                                     |                 |              |    |      |   |      |    |    |   |   |     |    
|                                     |                 |              | 15 |      |   |      | 29 |    |   |   | 16  |    
|Deferred:                            |                 |              |    |      |   |      |    |    |   |   |     |    
|                                     | Federal         |              |    | (5   | ) |      |    | (3 | ) |   |     | (67 | )
|                                     | State and local |              |    | 2    |   |      |    | 2  |   |   |     | (7  | )
|                                     | International   |              |    |     |   |      |    |   |   |   |     |    |  
|                                     |                 |              |    |      |   |      |    |    |   |   |     |    
|                                     |                 | $            | (3 | )    |   | $    | (1 | )  |   | $ | (74 | )  
|                                    
|Provision (benefit) for income taxes |                 | $            | 12 |      |   | $    | 28 |    |   | $ | (58 | )  
|                                     |                 |              |    |      |   |      |    |    |   |   |     |    

A reconciliation of the income tax provision
(benefit) computed at the statutory tax rate to the
Companys effective tax rate is as follows:

|                                                            |  |                         |      |      |  |      |      |   |  |   |        |   
|----------------------------------------------------------- |  | ----------------------- | ---- | ---- |  | ---- | ---- | - |  | - | ------ | --
|                                                            |  |                        
|                                                            |  | Year Ended December 31,
|                                                            |  |                        
|                                                            |  | 2002                    |      | 2003 |  | 2004
|                                                            |  |                         |      |      |  |     
|Federal statutory rate                                      |  |                         | 35   | %    |  |      | 35   | % |  |   | 35     | % 
|Income tax provision (benefit) at statutory rate            |  | $                       | 426  |      |  | $    | 352  |   |  | $ | 50     |   
|State income taxes, net of federal U.S. tax
    benefit     |  |                         | 49   |      |  |      | 40   |   |  |   | 6      |   
|LLC income not subject to federal or state income
    taxes |  |                         | (463 | )    |  |      | (364 | ) |  |   | (114   | ) 
|Provision (benefit) for income taxes                        |  | $                       | 12   |      |  | $    | 28   |   |  | $ | (58    | ) 
|Effective income tax rate                                   |  |                         | 0.99 | %    |  |      | 2.79 | % |  |   | (40.56 | )%

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Deferred taxes arise because of differences
between the book and tax bases of certain assets and
liabilities. The significant components of the Companys
deferred tax assets and (liabilities) are as follows:

|                                              |                                                                |                                         |     |      |   |   |       |       |       |  
|--------------------------------------------- | -------------------------------------------------------------- | --------------------------------------- | --- | ---- | - | - | ----- | ----- | ----- | -
|                                              |                                                                |                                        
|                                              |                                                                | December 31,                           
|                                              |                                                                |                                        
|                                              |                                                                | 2003                                    |     | 2004
|                                              |                                                                |                                         |     |     
|Current deferred tax assets:                  |                                                                |                                         |     |      |   |   |       |      
|                                              | Other                                                          |                                         | $   |     |   |   | $     | 2     |      
|                                              |                                                                |                                         |     |      |   |   |       |      
|Total current deferred tax assets             |                                                                |                                         |    |      |   |   | 2     |      
|Noncurrent deferred tax assets:               |                                                                |                                         |     |      |   |   |       |      
|                                              | Noncurrent deferred income tax assets:                         |                                         |     |      |   |   |       |       |      
|                                              |                                                                | Net operating loss/credit carryforwards |     |      |  |   |       |       | 3,078 |  
|                                              |                                                                | Valuation allowances                    |     |      |  |   |       |       | (147  | )
|                                              |                                                                |                                         |     |      |   |   |       |      
|Total net noncurrent deferred tax assets      |                                                                |                                         |    |      |   |   | 2,931 |      
|Noncurrent deferred tax liabilities:          |                                                                |                                         |     |      |   |   |       |      
|                                              | Investment in Cingular Wireless II                             |                                         |     |     |   |   |       | 6,655 |      
|                                              | FCC licenses and goodwill                                      |                                         |     | 178  |   |   |       | 216   |      
|                                              | Investments in and advances to unconsolidated
    subsidiaries |                                         |     |     |   |   |       | 41    |      
|Other                                         |                                                                |                                         | 12  |      |   |   | 16    |      
|                                              |                                                                |                                         |     |      |   |   |       |      
|Total noncurrent deferred tax liabilities     |                                                                |                                         | 190 |      |   |   | 6,928 |      
|Total noncurrent net deferred tax liabilities |                                                                | $                                       | 190 |      |   | $ | 3,997 |      
|                                              |                                                                |                                         |     |      |   |   |       |      

The Company, through AT&T Wireless, has
federal and state NOL carryforwards of approximately $7,555 and
$9,341, respectively, which expire at various dates principally
from December 31, 2007 through December 31, 2024. At
December 31, 2004, the related tax effected NOLs for
federal and state income tax purposes were $2,644 and $394, net
of federal tax impacts, respectively. In addition, the Company
had tax effected NOLs of $10 related to its Puerto Rico
operations. The Company also has federal tax credit
carryforwards of $26 which expire between 2007 and 2024, and $4,
which are not subject to expiration. Internal Revenue Code
Section 382 places certain limitations on the annual amount
of NOL carryforwards that can be utilized if certain changes to
a companys ownership occur. The Company believes that its
purchase of AT&T Wireless was a change in ownership pursuant
to Section 382 of the Code, and that the NOL carryforwards
of AT&T Wireless are limited but more likely than not will
be used in future periods. As of December 31, 2004, the
Company had valuation allowances of $130 for NOLs and $17 for
tax credits which were more likely than not to expire unused.
The majority of the Companys deferred tax asset valuation
allowance would be applied to reduce goodwill in the event that
the tax benefits for the items are recognized.

On December 21, 2004, the FASB issued FSP
FAS 109-2, Accounting and Disclosure Guidance for the
Foreign Earnings Repatriation Provision within the American Jobs
Creation Act of 2004(the Act), to provide accounting and
disclosure guidance for the repatriation provision of the Act.
The Act creates a temporary incentive for U.S. corporations
to repatriate accumulated income earned abroad by providing an
85 percent dividends received deduction for certain
dividends from controlled foreign corporations that are
repatriated in either an enterprises last tax year that
began before the enactment date of October 22, 2004

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


or the first tax year that begins during the
one-year period beginning on the date of enactment. The
deduction is subject to a number of limitations and, as of
December 31, 2004, uncertainty remained as to how to
interpret numerous provisions in the Act. As of
December 31, 2004, the Company had deferred tax liabilities
of $108 related to undistributed foreign earnings totaling $350.
Based on the Companys analysis of the Act, although not
yet finalized, it is reasonably possible that under the
repatriation provision of the Act the Company may repatriate
some amount of earnings estimated to be between $300 to $350.
The related tax effects of such repatriation cannot reasonably
be estimated at this time. The effects of the repatriation on
deferred tax liabilities would result in adjustments to the
purchase price allocations that were recorded in connection with
the Companys acquisition of AT&T Wireless. We expect
the Company to be in a position to finalize its assessment
during the second quarter of 2005. Until this evaluation is
completed, the Company presumes that repatriation of those
foreign earnings will occur and has accordingly recognized a
deferred tax liability for the full amount of current and prior
years unremitted earnings without giving effect to the
repatriation provision of the Act.

At December 31, 2003 and 2004, the
Companys net assets at entities that are not taxpayers
exceed their tax bases by approximately $12,900 and $14,000,
respectively. For the year ended December 31, 2003, this
basis difference is principally attributable to the tax rules
used to determine depreciation and amortization of property,
plant and equipment and intangible assets. For the year ended
December 31, 2004, this basis difference principally
relates to the Companys investment in CW II.

Cash paid for income taxes for the years ended
December 31, 2002, 2003 and 2004 was $14, $23 and $22,
respectively.



|    |                  
|--- | -----------------
|17. | Employee Benefits



| |                                          
| | -----------------------------------------
| | Pensions and Post-Retirement
    Benefits

Approximately 43,000 of the Companys
employees are covered by one of two noncontributory qualified
pension plans. Participation in the Companys plans
commenced November 1, 2001, following the initial
contribution of employees and related obligations and
liabilities by SBC and BellSouth to the Company. In connection
with this contribution, SBC and BellSouth transferred pension
assets from the qualified trusts to the trusts established for
the Companys pension plans. Current employees of the
Company who were formerly employed by AT&T Wireless do not
participate in the pension plans.

Nonbargained and some bargained employees
participate in a cash balance plan, under which they can elect
to receive their pensions in a lump sum. The pension benefit
formula for many bargained employees is based on a flat dollar
amount per year of service according to job classification, and
these benefits are typically paid as an annuity.

The projected benefit obligation of the
Companys pension plans is the actuarial present value of
all benefits attributed by the pension benefit formula to
previously rendered employee service. It is measured based on
assumptions concerning future interest rates, employee
compensation levels, retirement date and mortality. Actual
experience may differ from the actuarial assumptions, and the
benefit obligation will be affected. The Company uses a
December 31 measurement date for its plans.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Nonbargained employees and their covered
dependents who meet certain eligibility requirements will be
provided access to post-retirement medical and dental benefits
at no cost to the Company. For bargained employees and a closed
group of nonbargained transitional employees, the Company
provides certain retiree medical, dental and life insurance
benefits under various plans and accrues actuarially determined
post-retirement benefit costs as active employees earn these
benefits. These post-retirement plans are not funded. Current
employees formerly employed by AT&T Wireless do not
participate in the Companys post-retirement benefit plans.

In accordance with FASB Staff Position
No. FAS 106-2, the Medicare Prescription Drug,
Improvement and Modernization Act of 2003 (Medicare
Modernization Act) has been reflected effective January 1,
2004. Due to expected future receipt of subsidies available
under the Act for plans that are determined to be actuarially
equivalent, the plans combined Accumulated Postretirement
Benefit Obligation was reduced by approximately $8 as of
January 1, 2004 and the combined 2004 Net Periodic Benefit
Cost was reduced by approximately $2.



| |                              
| | -----------------------------
| | Obligations and Funded Status

The pension plan and post-retirement benefit plan
funded status and amounts recognized in the consolidated balance
sheets at December 31, 2003 and 2004 are as follows:

|                                  |                                         |              |     |              |   |      |     |      |   |   |     |    |   |   |     |     |  
|--------------------------------- | --------------------------------------- | ------------ | --- | ------------ | - | ---- | --- | ---- | - | - | --- | -- | - | - | --- | --- | -
|                                  |                                         |              |     |              |   |     
|                                  |                                         |              |     | Post-       
|                                  |                                         | Pension      |     | Retirement  
|                                  |                                         | December 31, |     | December 31,
|                                  |                                         |              |     |             
|                                  |                                         | 2003         |     | 2004         |   | 2003 |     | 2004
|                                  |                                         |              |     |              |   |      |     |     
|Change in Benefit Obligation:     |                                         |              |     |              |   |      |     |      |   |   |     |    |   |   |     |    
|                                  | Benefit obligation at beginning of year |              | $   | 413          |   |      | $   | 456  |   |   | $   | 84 |   |   | $   | 114 |  
|                                  | Service cost                            |              |     | 61           |   |      |     | 65   |   |   |     | 9  |   |   |     | 10  |  
|                                  | Interest cost                           |              |     | 24           |   |      |     | 26   |   |   |     | 6  |   |   |     | 6   |  
|                                  | Amendments                              |              |     | (1           | ) |      |     | 2    |   |   |     | (2 | ) |   |     | (12 | )
|                                  | Impact of Medicare Modernization Act    |              |     |             |   |      |     |     |   |   |     |   |   |   |     | (8  | )
|                                  | Actuarial loss                          |              |     | 18           |   |      |     | 18   |   |   |     | 17 |   |   |     | 7   |  
|                                  | Benefits paid                           |              |     | (59          | ) |      |     | (31  | ) |   |     |   |   |   |     |    |  
|                                  |                                         |              |     |              |   |      |     |      |   |   |     |    |   |   |     |    
|Benefit obligation at end of year |                                         | $            | 456 |              |   | $    | 536 |      |   | $ | 114 |    |   | $ | 117 |    
|                                  |                                         |              |     |              |   |      |     |      |   |   |     |    |   |   |     |    

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                                         |                                                |              |     |              |   |      |     |      |   |   |   |   |  |   |   |   | 
|---------------------------------------- | ---------------------------------------------- | ------------ | --- | ------------ | - | ---- | --- | ---- | - | - | - | - |  | - | - | - | 
|                                         |                                                |              |     |              |   |     
|                                         |                                                |              |     | Post-       
|                                         |                                                | Pension      |     | Retirement  
|                                         |                                                | December 31, |     | December 31,
|                                         |                                                |              |     |             
|                                         |                                                | 2003         |     | 2004         |   | 2003 |     | 2004
|                                         |                                                |              |     |              |   |      |     |     
|Change in Plan Assets:                   |                                                |              |     |              |   |      |     |      |   |   |   |   |  |   |   |  
|                                         | Fair value of plan assets at beginning of year |              | $   | 450          |   |      | $   | 510  |   |   | $ |  |  |   | $ |  | 
|                                         | Actual return on plan assets                   |              |     | 103          |   |      |     | 47   |   |   |   |  |  |   |   |  | 
|                                         | Employer contribution                          |              |     | 16           |   |      |     |     |   |   |   |  |  |   |   |  | 
|                                         | Benefits paid                                  |              |     | (59          | ) |      |     | (31  | ) |   |   |  |  |   |   |  | 
|                                         |                                                |              |     |              |   |      |     |      |   |   |   |   |  |   |   |  
|Fair value of plan assets at end of year |                                                | $            | 510 |              |   | $    | 526 |      |   | $ |  |   |  | $ |  |  
|                                         |                                                |              |     |              |   |      |     |      |   |   |   |   |  |   |   |  

|                                                                        |  |              |    |                 |  |      |     |      |  |   |      |   |  |   |      |  
|----------------------------------------------------------------------- |  | ------------ | -- | --------------- |  | ---- | --- | ---- |  | - | ---- | - |  | - | ---- | -
|                                                                        |  |              |    |                
|                                                                        |  | Pension      |    | Post-Retirement
|                                                                        |  | December 31, |    | December 31,   
|                                                                        |  |              |    |                
|                                                                        |  | 2003         |    | 2004            |  | 2003 |     | 2004
|                                                                        |  |              |    |                 |  |      |     |     
|Funded status                                                           |  | $            | 54 |                 |  | $    | (10 | )    |  | $ | (114 | ) |  | $ | (117 | )
|Unrecognized prior service cost                                         |  |              | 15 |                 |  |      | 14  |      |  |   | 6    |   |  |   | (7   | )
|Unrecognized net actuarial loss                                         |  |              | 3  |                 |  |      | 12  |      |  |   | 31   |   |  |   | 29   |  
|                                                                        |  |              |    |                 |  |      |     |      |  |   |      |   |  |   |      |  
|Prepaid pension cost and accrued post-retirement
    benefit obligation |  | $            | 72 |                 |  | $    | 16  |      |  | $ | (77  | ) |  | $ | (95  | )
|                                                                        |  |              |    |                 |  |      |     |      |  |   |      |   |  |   |      |  

The accumulated benefit obligation for the
pension plans was $435 and $511 at December 31, 2003 and
2004, respectively. As of December 31, 2004, the bargained
pension plan had an accumulated benefit obligation that exceeded
the fair value of plan assets, and an additional minimum
liability of $6 was recorded in accordance with the provisions
of paragraphs 36 and 37 of SFAS No. 87,
Employers Accounting for Pensions(SFAS 87). Additional information for this plan is as
follows:

|                                                                         |  |              |    |      |  |   |    | 
|------------------------------------------------------------------------ |  | ------------ | -- | ---- |  | - | -- | 
|                                                                         |  |             
|                                                                         |  | December 31,
|                                                                         |  |             
|                                                                         |  | 2003         |    | 2004
|                                                                         |  |              |    |     
|Projected benefit obligation                                             |  | $            | 18 |      |  | $ | 26 | 
|Accumulated benefit obligation                                           |  |              | 16 |      |  |   | 22 | 
|Fair value of plan assets                                                |  |              | 16 |      |  |   | 17 | 
|Increase in minimum liability included in other
    comprehensive income |  |              |   |      |  |   | 4  | 

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)




| |                                            
| | -------------------------------------------
| | Components of Net Periodic Pension
    Cost

Net pension expense and post-retirement benefit
expense recognized is comprised of the following:

|                                             |  |         |     |                 |  |      |     |      |  |      |     |      |  |   |    |   |  |   |    |  |  |   |    | 
|-------------------------------------------- |  | ------- | --- | --------------- |  | ---- | --- | ---- |  | ---- | --- | ---- |  | - | -- | - |  | - | -- |  |  | - | -- | 
|                                             |  |         |     |                
|                                             |  | Pension |     | Post-Retirement
|                                             |  |         |     |                
|                                             |  | 2002    |     | 2003            |  | 2004 |     | 2002 |  | 2003 |     | 2004
|                                             |  |         |     |                 |  |      |     |      |  |      |     |     
|Service cost                                 |  | $       | 62  |                 |  | $    | 61  |      |  | $    | 65  |      |  | $ | 6  |   |  | $ | 9  |  |  | $ | 10 | 
|Interest cost                                |  |         | 24  |                 |  |      | 24  |      |  |      | 26  |      |  |   | 4  |   |  |   | 6  |  |  |   | 6  | 
|Expected return on plan assets               |  |         | (27 | )               |  |      | (36 | )    |  |      | (38 | )    |  |   |   |   |  |   |   |  |  |   |   | 
|Amortization of prior service cost           |  |         | 3   |                 |  |      | 3   |      |  |      | 3   |      |  |   | 2  |   |  |   | 1  |  |  |   | 1  | 
|Recognized actuarial gain                    |  |         |    |                 |  |      |    |      |  |      |    |      |  |   |   |   |  |   | 1  |  |  |   | 1  | 
|                                             |  |         |     |                 |  |      |     |      |  |      |     |      |  |   |    |   |  |   |    |  |  |   |    | 
|Net expense                                  |  | $       | 62  |                 |  | $    | 52  |      |  | $    | 56  |      |  | $ | 12 |   |  | $ | 17 |  |  | $ | 18 | 
|                                             |  |         |     |                 |  |      |     |      |  |      |     |      |  |   |    |   |  |   |    |  |  |   |    | 
|Curtailment and termination benefits         |  |         |     |                 |  |      |     |      |  |      |     |      |  |   | (1 | ) |  |   |   |  |  |   |   | 
|                                             |  |         |     |                 |  |      |     |      |  |      |     |      |  |   |    |   |  |   |    |  |  |   |    | 
|Adjusted net post-retirement benefit expense |  |         |     |                 |  |      |     |      |  |      |     |      |  | $ | 11 |   |  | $ | 17 |  |  | $ | 18 | 
|                                             |  |         |     |                 |  |      |     |      |  |      |     |      |  |   |    |   |  |   |    |  |  |   |    | 



| |            
| | -----------
| | Assumptions

Significant weighted-average assumptions used in
developing pension and post-retirement benefit obligations at
December 31 include:

|                                        |  |         |      |            |  |      |      |      |  |  |      |   |  |  |      |  
|--------------------------------------- |  | ------- | ---- | ---------- |  | ---- | ---- | ---- |  |  | ---- | - |  |  | ---- | -
|                                        |  |         |      |            |  |     
|                                        |  |         |      | Post-     
|                                        |  | Pension |      | Retirement
|                                        |  |         |      |           
|                                        |  | 2003    |      | 2004       |  | 2003 |      | 2004
|                                        |  |         |      |            |  |      |      |     
|Discount rate                           |  |         | 6.25 | %          |  |      | 5.75 | %    |  |  | 6.25 | % |  |  | 5.75 | %
|Composite rate of compensation increase |  |         | 6.00 | %          |  |      | 6.00 | %    |  |  | 6.00 | % |  |  | 6.00 | %

Significant weighted-average assumptions used to
determine net periodic pension and post-retirement cost for the
years ended December 31 include:

|                                         |  |         |      |                 |  |      |      |      |  |      |      |      |  |  |      |   |  |  |      |   |  |  |      |  
|---------------------------------------- |  | ------- | ---- | --------------- |  | ---- | ---- | ---- |  | ---- | ---- | ---- |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                         |  |         |      |                
|                                         |  | Pension |      | Post-Retirement
|                                         |  |         |      |                
|                                         |  | 2002    |      | 2003            |  | 2004 |      | 2002 |  | 2003 |      | 2004
|                                         |  |         |      |                 |  |      |      |      |  |      |      |     
|Discount rate                            |  |         | 7.25 | %               |  |      | 6.75 | %    |  |      | 6.25 | %    |  |  | 7.25 | % |  |  | 6.75 | % |  |  | 6.25 | %
|Expected long-term return on plan assets |  |         | 8.50 | %               |  |      | 8.50 | %    |  |      | 8.50 | %    |  |  |     |   |  |  |     |   |  |  |     |  
|Composite rate of compensation increase  |  |         | 7.00 | %               |  |      | 6.00 | %    |  |      | 6.00 | %    |  |  | 7.00 | % |  |  | 6.00 | % |  |  | 6.00 | %

The expected long-term rate of return on assets
was derived using data from investment managers and reflects the
average rate of earnings expected on the funds invested, or to
be invested, to provide for the benefits included in the
projected benefit obligations. The Company considers many
factors, which include current market information on long-term
returns (e.g., long-term bond rates) and current and
target asset allocations between asset categories. The target
asset allocation is determined based on consultations with
external investment advisors.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Assumed health care cost trend rates at
December 31 are as follows:

|                                                                                      |  |         |       |          |  |         |       |          |  |  |      |   |  |  |       |  
|------------------------------------------------------------------------------------- |  | ------- | ----- | -------- |  | ------- | ----- | -------- |  |  | ---- | - |  |  | ----- | -
|                                                                                      |  |         |       |         
|                                                                                      |  | 2003    |       | 2004    
|                                                                                      |  |         |       |         
|                                                                                      |  | Pre-Age |       | Post-Age |  | Pre-Age |       | Post-Age
|                                                                                      |  | 65      |       | 65       |  | 65      |       | 65      
|                                                                                      |  |         |       |          |  |         |       |         
|Health care cost trend rate assumed for next year                                     |  |         | 10.00 | %        |  |         | 11.00 | %        |  |  | 9.25 | % |  |  | 10.00 | %
|Rate to which the cost trend rate is assumed to
    decline (the ultimate trend rate) |  |         | 5.00  | %        |  |         | 5.00  | %        |  |  | 5.00 | % |  |  | 5.00  | %
|Year the rate reaches the ultimate trend rate                                         |  |         | 2011  |          |  |         | 2011  |          |  |  | 2011 |   |  |  | 2011  |  

The assumed dental cost trend rate is 5.0% in
2004 and future years. A one percentage-point change in the
assumed health care cost trend rate would have the following
effects:

|                                                            |  |                 |    |                 |  |   |     |  
|----------------------------------------------------------- |  | --------------- | -- | --------------- |  | - | --- | -
|                                                            |  | One Percentage- |    | One Percentage-
|                                                            |  | Point Increase  |    | Point Decrease 
|                                                            |  |                 |    |                
|Effect on total of service and interest cost
    components |  | $               | 4  |                 |  | $ | (3  | )
|Effect on post-retirement benefit obligation                |  |                 | 20 |                 |  |   | (16 | )

Plan
Assets

The Companys pension plans asset
allocations at December 31, by asset category are as
follows:

|               |                   |                |  |      |     |   |  |    |     |  
|-------------- | ----------------- | -------------- |  | ---- | --- | - |  | -- | --- | -
|               |                   |               
|               |                   | Plan Assets at
|               |                   | December 31,  
|               |                   |               
|               |                   | 2003           |  | 2004
|               |                   |                |  |     
|Asset Category |                   |                |  |      |     |   |  |   
|               | Equity securities |                |  | 66   | %   |   |  | 62 | %  
|               | Debt securities   |                |  | 28   |     |   |  | 28 |    
|               | Cash              |                |  | 1    |     |   |  |   |    
|               | Other             |                |  | 5    |     |   |  | 10 |    
|               |                   |                |  |      |     |   |  |   
|               |                   | Total          |  |      | 100 | % |  |    | 100 | %
|               |                   |                |  |      |     |   |  |   

The investment goal of the plans is to ensure the
availability of funds for the liabilities as they become due and
to meet the objectives with a prudent risk profile,
diversification and diligent management in accordance with
applicable statutory and regulatory constraints. Target
allocations for the pension plans are 35% large cap equity
(range of 30  40%), 10% small/mid cap equity (range
of 5  15%), 15% international equity (range of
10  20%), 30% domestic fixed income (range of
25  30%), 10% alternative investments
(range 5  15%) and 0% cash (0  2%)
range. The alternative investment allocation is comprised of
absolute return strategies. Absolute return strategies are
designed to return cash plus a premium regardless of market
direction and are included in the portfolio for diversification
purposes. Prohibited investments are outlined in each individual
managers agreement, and derivatives are allowed if in
compliance with the Companys internal derivative policy.
Derivatives may be used as a substitute for physical investing
or to manage duration and currency risk. Performance is reviewed
on a monthly basis.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


Contributions

The Company does not expect to make any
contributions to its pension plans and its post-retirement
benefit plans in 2005.

Estimated Future
Benefit Payments

The following benefit payments, which reflect
expected future service, as appropriate, are expected to be
paid. Post-retirement benefit payments shown reflect estimated
payment amounts before the Medicare subsidy. The Medicare
subsidy for all years shown below totals less than $2 in
aggregate.

|          |  |          |     |            |  |   |    | 
|--------- |  | -------- | --- | ---------- |  | - | -- | 
|          |  |          |     | Post-     
|          |  | Pension  |     | retirement
|          |  | Benefits |     | Benefits  
|          |  |          |     |           
|2005      |  | $        | 86  |            |  | $ | 1  | 
|2006      |  |          | 45  |            |  |   | 1  | 
|2007      |  |          | 49  |            |  |   | 2  | 
|2008      |  |          | 52  |            |  |   | 2  | 
|2009      |  |          | 54  |            |  |   | 3  | 
|2010-2014 |  |          | 308 |            |  |   | 26 | 

Defined
Contribution Plans

The Company maintains several contributory
savings plans which cover substantially all employees. Effective
December 31, 2002, the plan covering bargained employees
was merged into the plan covering nonbargained employees.
Contributions made by the Company and the related costs are
determined as a percentage of covered employees eligible
contributions to the plans and totaled $56 in 2002, $46 in 2003
and $46 in 2004.

Current employees who were formerly employed by
AT&T Wireless will continue to participate in a legacy
savings plan until January 1, 2006. The plan matches a
percentage of employee contributions up to certain limits and
provides a fixed contribution percentage. The Company may also
provide discretionary or profit-sharing contributions.
Contributions under the plan totaled $13 from the acquisition
date of October 26, 2004 through December 31, 2004.

Stock Based
Compensation Plans

AT&T Wireless sponsored the 2001 Long Term
Incentive Plan, which provided for stock options, restricted
stock and performance shares. All of these awards vested and
accelerated upon the Companys acquisition of AT&T
Wireless and were settled in cash.

Supplemental
Retirement Plans

The Company also assumed the liabilities related
to nonqualified, unfunded supplemental retirement plans for
senior executives previously employed by SBC affiliates that
were contributed to the Company. Expenses related to these plans
were less than $2 in all years presented. Liabilities of $8 and
$8 related to

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


these plans, which include an additional minimum
pension liability of $2 and $3, have been included in
Other noncurrent liabilities in the consolidated
balance sheets at December 31, 2003 and 2004, respectively.
The consolidated balance sheets also include $1 in Other
intangible assets, net at December 31, 2003 and 2004
related to these plans.



| |                           
| | --------------------------
| | Deferred Compensation Plan

The Company provides certain management employees
with a nonqualified, unfunded deferred compensation plan. The
plan allows eligible participants to defer some of their
compensation on a pre-tax basis and receive a market-based
interest rate of return. In addition, the plan provides for a
stated matching contribution by the Company based on a
percentage of the compensation deferred. Deferred compensation
expenses for all years presented was not significant. The
long-term portions of liabilities related to this plan of $22
and $30 have been included in Other noncurrent
liabilities in the consolidated balance sheets at
December 31, 2003 and 2004, respectively.

Certain management employees who previously were
employees of AT&T Wireless are participants in a
nonqualified, unfunded deferred compensation plan, which allows
participants to defer a portion of their compensation on a
pre-tax basis, with earnings calculated based on valuation funds
selected by the participants. In addition, the plan provides for
contributions by the Company to participants whose matching and
profit sharing contributions to the qualified 401(k) plan were
capped by operation of the limitations imposed by tax laws. The
liability of the deferred compensation plan totaled $61 as of
December 31, 2004, of which $24 and $37 have been
classified as Accrued liabilities and Other
noncurrent liabilities, respectively, in the consolidated
balance sheets.

The liabilities associated with the AT&T
Wireless deferred compensation plan, along with other benefit
obligations, have been funded and are held in a grantor trust,
subject to the claims of the Companys creditors in the
event of the Companys insolvency. Upon the acquisition of
AT&T Wireless by the Company, the trust became irrevocable,
and the Company was required to contribute an amount to the
grantor trust equal to the present value of the total amount
owed to participants in the deferred compensation plan and other
benefit obligations. As of December 31, 2004, the grantor
trust held $110 in assets, of which $83 was invested in cash
equivalents and short term investments. The remaining $27
represented the cash surrender value of Company owned life
insurance policies. The assets held by the grantor trust were
included in Other assets in the consolidated balance
sheets as of December 31, 2004 (see Note 1).



| |                            
| | ---------------------------
| | Long-Term Compensation Plan

The Cingular Wireless Long-Term Compensation
Plan, as amended (the Plan), provides for incentive compensation
to eligible participants over periods that are two years or
longer in the form of performance units, stock appreciation
units and restricted stock units. Awards granted in any
particular year may be comprised of any combination of award
type provided for under the Plan, as approved by the plan
administrator. All awards are ultimately settled in cash. Grants
are made in April of the award year.

Performance units are tied to the achievement of
specified financial objectives over a three-year performance
period. The units have a stated value of $50 (whole dollars).
Performance units granted at

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


inception of a three-year performance period are
payable in the first quarter following the performance period,
with payouts ranging from 0% to 200% of the stated value of the
performance units for years prior to 2004 and 0% to 150% for
2004 grants. The number of performance units granted under the
Plan total approximately 1.2 million units in 2002 and
540,000 units in 2003. During the year ended
December 31, 2004, the Company granted approximately
732,000 performance units. As of December 31, 2004, the
Company has approximately 2.0 million outstanding
performance units. Expense is accrued ratably throughout the
performance period based upon managements estimate of the
compensation that will ultimately be earned under the Plan. As
performance is monitored against the financial objectives that
have been established throughout the respective three-year
performance periods, management may revise its estimate of the
compensation that will ultimately be earned under the Plan and
adjust its accrual accordingly.

Stock appreciation units granted under the Plan,
which approximate 3.3 million in total, are indexed to an
underlying share of BellSouth or SBC common stock. Each stock
appreciation unit has a grant price equal to the closing price
of BellSouth or SBC stock, as the case may be, based on the
closing New York Stock Exchange price on the grant date. Stock
appreciation units were granted to eligible employees on
April 1, 2003, 50% of which vest two years after the grant
date and the remaining 50% of which vest three years following
the grant date. As of December 31, 2004, the Company had
approximately 2.8 million outstanding stock appreciation
units. The units expire 10 years from the grant date.
Compensation cost is recognized over the period such units
remain outstanding based upon the change in the fair value of
the stock appreciation units at the end of each reporting period.

Restricted stock units granted under the Plan are
indexed to an underlying share of BellSouth or SBC common stock.
The value of the restricted stock units granted in 2004 will be
paid in cash to holders in March 2007 based on the average of
the closing stock prices of BellSouth and SBC common stock for
the last ten trading days of February 2007. Dividend equivalents
will be paid annually at the same rate as the dividend received
by all SBC and BellSouth shareholders, respectively. During the
year ended December 31, 2004, the Company granted
approximately 339,000 BellSouth restricted stock units and
378,000 SBC restricted stock units with an aggregate value on
the grant date of approximately $19. As of December 31,
2004, the Company had approximately 669,000 outstanding
restricted stock units. The value of the restricted stock units,
adjusted for changes in the value of the underlying BellSouth
and SBC common stock, is recognized as compensation expense over
the three year vesting period.

For the years ended December 31, 2003 and
2004, the Company recognized compensation expense of $14 and
$26, respectively, associated with the Plan. Former AT&T
Wireless employees who remain in the employment of the Company
and meet certain eligibility requirements will participate in
the Plan beginning in 2005.



|    |                              
|--- | -----------------------------
|18. | Commitments and Contingencies



| |       
| | ------
| | Leases

The Company entered into significant capital
leases primarily for the use of communications towers (see
Note 19). Capital lease obligations are included in
Note 9.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


The Company also entered into operating leases
for facilities and equipment used in operations. These leases
typically include renewal options and escalation clauses. In
general, ground and collocation leases have five or ten year
initial terms with three to five renewal terms of five years.
Rental expense under operating leases for the years ended
December 31, 2002, 2003 and 2004 was $456, $512 and $699,
respectively.

The following table summarizes the approximate
future minimum rentals under noncancelable operating leases,
including renewals that are reasonably assured, in effect at
December 31, 2004:

|                |  |   |       | 
|--------------- |  | - | ----- | 
|At December 31, |  |   |       | 
|2005            |  | $ | 1,251 | 
|2006            |  |   | 1,094 | 
|2007            |  |   | 899   | 
|2008            |  |   | 729   | 
|2009            |  |   | 619   | 
|Thereafter      |  |   | 3,511 | 
|                |  |   |       | 
|Total           |  | $ | 8,103 | 
|                |  |   |       | 



| |            
| | -----------
| | Commitments

The Company has unconditional purchase
commitments for advertising and marketing, computer equipment
and services, roaming, long distance services, network equipment
and related maintenance, and software development and related
maintenance. These commitments totaled approximately $1,326 at
December 31, 2004. Included in this amount are commitments
of $142 to SBC, BellSouth and their affiliates for
telecommunications and other services. Also included are
commitments to AT&T Corp. (AT&T) which were assumed by
the Company in conjunction with its acquisition of AT&T
Wireless, as well as network-related commitments associated with
the brand license agreement. In August 2004, the Company,
AT&T Wireless and AT&T entered into a definitive
agreement to modify the brand license agreement between AT&T
Wireless and AT&T to provide the Company with certain
licensee rights to the AT&T brand for wireless services
during a six-month transition period following the acquisition.
As part of this agreement, the Company committed to purchase
$100 in network services from AT&T through December 31,
2005, of which $33 remained outstanding as of December 31,
2004.

The Company has commitments with local exchange
carriers for dedicated leased lines. The original terms of these
commitments vary from month-to-month up to five years. The
Companys related commitment to its primary carriers as of
December 31, 2004, was approximately $572, with payments
due in each of the five succeeding fiscal years as follows: $225
in 2005, $171 in 2006, $108 in 2007, $60 in 2008 and $8 in 2009.
Included in these amounts are commitments of $258 to SBC,
BellSouth and their affiliates.

The Company has commitments to Crown Castle
International for monitoring and maintenance services related to
its communication towers (see Note 19). The Companys
commitment at December 31, 2004 was approximately $276,
with payments due in each of the five succeeding fiscal years
and thereafter as follows: $86 in 2005, $61 in 2006, $42 in
2007, $27 in 2008, $16 in 2009 and $44 thereafter.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


As discussed in Note 7, the Company has
interests in several variable interest entities which were
formed to acquire licenses that were restricted by the FCC to
businesses with limited assets and revenues. Two of these
variable interest entities, including Salmon and Alaska Native
Wireless, LLC (ANW), include terms within their venture
agreements, such that the other owners may elect to require the
Company to purchase their interests at specified time periods.
The other owner of Salmon, Crowley Digital, has the right to put
its approximate 20% economic interest in Salmon to the Company
at a cash price equal to Crowley Digitals initial
investment plus a specified rate of return. The put right can be
exercised at certain times, and the Company estimates that the
earliest exercise period will begin in February 2006 and the
latest exercise period will end in April 2008. The
Companys maximum liability for the purchase of Crowley
Digitals interest in Salmon under this put right is $225,
of which $155 was reflected in Other noncurrent
liabilities as of December 31, 2004. In accordance
with the terms of the ANW venture agreement, in March 2007, the
other owners of ANW may elect to require the Company to purchase
their interests in ANW for $145, of which $118 was reflected
within Other noncurrent liabilities as of
December 31, 2004. Under certain circumstances, this right
may be exercised earlier, in which case the amount payable would
be reduced by 5 percent per annum.

In connection with the termination of the
Companys GSMF network infrastructure joint venture with
T-Mobile (see Note 20), the Company has a $1,200 commitment
to purchase a minimum number of minutes from T-Mobile. This
commitment became effective in January 2005.

In November 2004, the Company and Edge Mobile
Wireless, LLC entered into a definitive agreement, pursuant to
which Edge Mobile, LLC (Edge) was formed to bid as an
entrepreneur for certain 1900 MHz band PCS
licenses auctioned by the FCC. The auction ended in February
2005. Edge was the successful bidder for, and, following the
filing and review of the standard applications, expects to be
granted 21 licenses. Edges total high bids for the
licenses in which the Company will have an indirect economic
interest amounted to $181, of which the Company is obligated to
fund $174. In December 2004, the Company contributed $31 in
equity to Edge, which will be used to pay for a portion of the
licenses. The Company will contribute equity and make advances
to Edge in March 2005 to cover its remaining obligation.



| |              
| | -------------
| | Contingencies

The Company and AT&T Wireless are defendants
in a lawsuit brought by Freedom Wireless Inc. alleging patent
infringement related to prepaid wireless service. The case is
pending in the U.S. District Court for the District of
Massachusetts, and the trial for this matter commenced in late
February 2005. It is expected that the trial could last at least
two months. The plaintiff is expected to seek approximately $250
in monetary damages from the Company and AT&T Wireless, as
well as injunctive relief. Boston Communications Group, Inc.
(BCGI), whose prepaid technology platform the Company has used
and whose technology is alleged to infringe two patents held by
Freedom Wireless, has agreed to indemnify the Company and
AT&T Wireless with respect to the claims asserted in this
litigation. Financial and other information regarding BCGI can
be obtained at www.bcgi.net. (This website address is an
inactive textual reference included for information only and is
not intended to be an active link to or incorporate any website
information into this document.)

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PART II (Dollars
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Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


The Company is subject to claims arising in the
ordinary course of business involving allegations of personal
injury, breach of contract, anti-competitive conduct, employment
law issues, regulatory matters and other actions. To the extent
that management believes that a loss arising from litigation or
regulatory proceedings is probable and can reasonably be
estimated, an amount is accrued on the financial statements for
the estimated loss. As additional information becomes available,
the potential liability related to the matter is reassessed and
the accruals are revised, if necessary. While complete assurance
cannot be given as to the outcome of any legal claims, the
Company believes that any financial impact would not be material
to its business, financial position or cash flows.



|    |                      
|--- | ---------------------
|19. | Communications Towers

In June 1999, as part of an agreement with Crown
Castle International (Crown), BellSouth subsidiaries leased to
Crown all unused space on 2,623 of their communications towers.
These subsidiaries were contributed to the Company on
October 2, 2000. Under these transactions, Crown assumed
all obligations for property taxes, insurance and maintenance
for the towers and agreed to reimburse the Company for ground
lease rentals. The Company has retained, outside of the leases,
a portion of the towers for use in operating its wireless
network and continues to own the towers and related
communications components, including switching equipment,
shelters and communications facilities. The Company entered into
a monitoring and maintenance agreement with Crown for these
towers. During 2002, 2003 and 2004, the Company paid $51, $50
and $60, respectively, to Crown for its monitoring and
maintenance services. Monitoring and maintenance fees are
escalated by 5% on the anniversary of each site commencement
date. The Company has the right to withdraw from the monitoring
and maintenance agreement for any tower on the tenth anniversary
of the transaction date and on each five-year anniversary
thereafter.

In August 2000, Southwestern Bell Mobile Systems,
Inc., which SBC transferred to the Company on October 2,
2000, agreed to transfer approximately 3,900 of its
communications towers (later reduced to 3,306), including those
owned by consolidated partnerships, to another SBC affiliate, in
connection with an agreement whereby the SBC affiliate would
lease its rights to use and lease space on the towers to
SpectraSite Inc. (SpectraSite, formerly SpectraSite Holdings,
Inc.). Under the arrangement, SpectraSite then subleases back to
the SBC affiliate space on the towers the Company uses. The SBC
affiliate further subleases that space to the Company or its
affiliates. The annual rent is escalated by 5% as of December 14
of every year. The term of the sublease is unique to each tower
and ranges from 13 to 32 years. The Company (as lessee) has
the right to withdraw from any lease on the tenth anniversary of
the lease date and on each five-year anniversary thereafter. The
Company accounts for its subleases of the tower space from the
SBC affiliate as capital leases.

As part of the Crown and SpectraSite agreements,
the Company had entered into build-to-suit (BTS) agreements
that provided for the development and construction of towers on
BTS sites and the performance of other services. In 2002, the
Company terminated its BTS agreements with SpectraSite and
Crown. Under the BTS agreement, 34 towers were completed and
became capital leases with SpectraSite. Certain other towers
under construction and other work-in-progress were transferred
to the Company during the transition period.

In February 2003, a subsidiary of the Company
acquired leasehold interests in 545 communication towers in
California and Nevada from SpectraSite for $81 in cash.
SpectraSite had previously acquired these

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


leasehold interests from an affiliate of SBC in
2000, and the Company had leased a portion of the tower space
indirectly from SpectraSite. Subsequent to February 2003, the
GSMF venture leased a portion of the space on these towers
directly from a subsidiary of the Company. In connection with
the dissolution of GSMF and the sale to T-Mobile of the
California/ Nevada network assets and certain spectrum, the
leasehold interests of the Company and GSMF in these 545
communications towers in California and Nevada were transferred
to T-Mobile (see Note 20).

In 2002, 2003 and 2004, the Company transferred
to the SBC affiliate 33, 94 and 187 towers, respectively.
Through December 31, 2004, a total of 3,265 towers having
an aggregate net book value of $190, have been transferred.



|    |                  
|--- | -----------------
|20. | Subsequent Events



| |                                                             
| | ------------------------------------------------------------
| | Termination of GSMF Network Infrastructure
    Joint Venture

In May 2004, the Company and T-Mobile entered
into an agreement, subject to regulatory and other customary
closing conditions and the closing of the acquisition of
AT&T Wireless, to dissolve GSMF, sell to T-Mobile certain
spectrum licenses and other assets and exchange certain other
spectrum licenses. The first stage of these transactions closed
in January 2005.

Pursuant to the agreement, the Company sold its
ownership of the California/ Nevada Major Trading Area
(MTA) network assets to T-Mobile for approximately $2,500
in cash. The proceeds from the sale will be used to fund capital
expenditures through June 2005 in order to receive favorable tax
treatment. In connection with the dissolution, the Company was
required to contribute an additional $200 to the venture to
equalize the capital accounts. The ownership of the New York
Basic Trading Area (BTA) network assets returned to
T-Mobile. The Company retained the right to utilize the
California/ Nevada and New York networks during a four year
transition period and has guaranteed to purchase a minimum
number of minutes over this term with a minimum purchase of
$1,200. The Company and T-Mobile retained all of their
respective customers in each market. The Company also sold
10 MHz of spectrum to T-Mobile in each of the
San Francisco, Sacramento and Las Vegas BTAs for $180.

As agreed to as part of the original joint
venture agreement, the Company and T-Mobile were each to receive
50% of the spectrum used in the operation of the joint venture
following its dissolution. Spectrum licenses were not
contributed to the joint venture upon its formation in 2001 but
rather were subject to a separate agreement governing their use.
In connection with the dissolution, the Company and T-Mobile are
contractually required to exchange certain spectrum licenses.
The Company expects the spectrum licenses to be exchanged on
January 1, 2007. The Company will receive 10 MHz of
spectrum in New York BTA in addition to the 10MHz of spectrum
the Company made available for use by GSMF and 2.5 MHz of
spectrum in the Las Vegas BTA, and T-Mobile will receive
5 MHz of spectrum in each of nine BTAs in California, the
largest of which is San Diego. T-Mobile also has the option
to purchase an additional 10 MHz of spectrum in the Los
Angeles and San Diego BTAs from the Company at the end of
two years, under certain circumstances.

The Company expects to recognize a gain on these
transactions, principally due to the value of the New York
spectrum to be received in connection with the consummation of
these transactions. The Company expects to recognize a gain upon
the completion of the spectrum exchange in 2007.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)




| |                   
| | ------------------
| | Other Divestitures

In November 2004, in response to the
Companys agreement with the U.S. Department of
Justice and the FCC to divest certain assets and spectrum in
certain markets as a condition to receiving regulatory approval
to acquire AT&T Wireless, the Company entered into a number
of disposition agreements. An agreement with Alltel Corporation
(Alltel) involves the sale by the Company of certain former
AT&T Wireless assets and properties, including licenses,
network assets, and subscribers that the Company currently
operates in several markets, the largest of which is Oklahoma
City, Oklahoma. As part of this agreement, the Company also
agreed to sell 20 MHz of spectrum and the network assets
formerly held by AT&T Wireless in Wichita, Kansas, which it
was not required to divest. The Company also entered into a
disposition agreement with MetroPCS to sell 10 MHz of
former AT&T Wireless spectrum in each of Dallas, Texas and
Detroit, Michigan for $230. The Company entered into a
disposition agreement with Cellco Partnership (d/b/a Verizon
Wireless) to sell 10 MHz of former AT&T Wireless
spectrum in Knoxville, Tennessee for $20. Finally, the Company
has entered into other disposition agreements pertaining to
certain other former AT&T Wireless properties and assets in
four smaller transactions involving the sale of various
combinations of spectrum, network assets and accounts in
specific rural regions of Arkansas, Mississippi, Missouri and
Texas.

In February and March 2005, the Company closed
its transactions with MetroPCS and Verizon Wireless and one of
the four smaller transactions described above. The closings of
the remaining divestiture transactions are contingent upon
regulatory approval. The transaction with Alltel is expected to
close by the second quarter of 2005. The Company does not
anticipate recognizing any material gain or loss on these
divestiture transactions as the Companys assumed fair
value of the net assets in conjunction with its purchase of
AT&T Wireless equaled the sales proceeds from the respective
transactions.



|    |                                                  
|--- | -------------------------------------------------
|21. | Selected Quarterly Financial Data
    (Unaudited)

The unaudited quarterly results presented below
for 2003 and the first three quarters of 2004 have been restated
to reflect the correction of the Companys method of
accounting for its operating leases. See Note 2 for further
discussion of the restatement.

|                                                                                               |  |         |       |         |  |         |       |         |  |   |       |     |  |   |       |    
|---------------------------------------------------------------------------------------------- |  | ------- | ----- | ------- |  | ------- | ----- | ------- |  | - | ----- | --- |  | - | ----- | ---
|                                                                                               |  | First   |       | Second  |  | Third   |       | Fourth 
|2003                                                                                           |  | Quarter |       | Quarter |  | Quarter |       | Quarter
|                                                                                               |  |         |       |         |  |         |       |        
|Total operating revenues(a)                                                                    |  | $       | 3,638 |         |  | $       | 3,874 |         |  | $ | 4,059 |     |  | $ | 3,912 | (c)
|Operating income                                                                               |  |         | 707   | (b)     |  |         | 747   |         |  |   | 480   |     |  |   | 320   |    
|Income (loss) before provision for income taxes
    and cumulative effect of accounting change |  |         | 410   |         |  |         | 411   |         |  |   | 172   |     |  |   | 12    |    
|Net income (loss)                                                                              |  |         | 408   |         |  |         | 399   |         |  |   | 166   | (d) |  |   | 4     | (d)

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS  (Continued)

(Dollars in Millions)


|                                                                                               |  |         |       |         |  |         |       |            |  |   |       |     |  |   |       |     
|---------------------------------------------------------------------------------------------- |  | ------- | ----- | ------- |  | ------- | ----- | ---------- |  | - | ----- | --- |  | - | ----- | ----
|                                                                                               |  | First   |       | Second  |  | Third   |       | Fourth    
|2004                                                                                           |  | Quarter |       | Quarter |  | Quarter |       | Quarter(e)
|                                                                                               |  |         |       |         |  |         |       |           
|Total operating revenues                                                                       |  | $       | 3,942 |         |  | $       | 4,155 |            |  | $ | 4,257 |     |  | $ | 7,082 |     
|Operating income (loss)                                                                        |  |         | 550   |         |  |         | 671   |            |  |   | 460   | (f) |  |   | (153  | )(g)
|Income (loss) before provision for income taxes
    and cumulative effect of accounting change |  |         | 221   |         |  |         | 337   |            |  |   | 142   | (f) |  |   | (557  | )(g)
|Net income (loss)                                                                              |  |         | 215   |         |  |         | 339   |            |  |   | 142   | (f) |  |   | (495  | )(g)



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Includes a reclassification to reflect billings
    to our customers for the USF and other regulatory fees as
    Operating revenues. The amounts reclassified for the
    first, second, and third quarters of 2003 were $48, $88 and
    $105, respectively.                                                                                                                           
|   
|(b) |  | Includes a reduction of $24 due to reorganization
    (see Note 15).                                                                                                                                                                                                                                                                                                                       
|   
|(c) |  | Operating revenues in the fourth quarter of 2003
    were $142 lower than the third quarter, due primarily to reduced
    roaming revenues as a result of lower negotiated rates and
    expected seasonality.                                                                                                                                                                             
|   
|(d) |  | Net income in the third and fourth quarters of
    2003 was impacted by increased customer acquisition costs
    associated with the two consecutive quarters of strong gross
    customer additions. Additionally, other cost increases impacting
    results included higher customer retention costs in preparation
    for wireless local number portability in the later part of 2003.
|   
|(e) |  | On October 26, 2004, the Company completed
    its acquisition of AT&T Wireless. Operating results for 2004
    for AT&T Wireless have been included in the consolidated
    financial statements subsequent to that date.                                                                                                                                                                 
|   
|(f) |  | Includes a reduction of $43 for integration
    planning costs and $31 loss on the writedown of the carrying
    value of the Companys Mobitex business.                                                                                                                                                                                                                                  
|   
|(g) |  | Fourth quarter 2004 operating results were
    impacted by an increase in customer acquisition costs associated
    with the highest gross and net customer additions in the
    Companys history, purchase accounting adjustments and
    related amortization (see Notes 3 and 5) and $245 of
    acquisition-related and integration costs (see Note 14).                              

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PART II (Dollars
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Item
8.     Financial Statements and
Supplemental Data

CONSOLIDATED FINANCIAL STATEMENTS

GSM FACILITIES, LLC


Years ended December 31, 2002 (restated),
2003 (restated) and 2004


with Report of Independent Auditors and Report
of Independent Registered Public Accounting Firm


for the years ended December 31, 2003 and
2004


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PART II (Dollars
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Item
8.     Financial Statements and
Supplemental Data

GSM Facilities, LLC

Consolidated Financial Statements

Years ended December 31, 2002 (Restated),
2003 (Restated) and 2004


Contents

|                                                                                         |  |  |     | 
|---------------------------------------------------------------------------------------- |  |  | --- | 
|Report of Independent Auditors  Ernst
    & Young LLP                                   |  |  | 153 | 
|Report of Independent Registered Public
    Accounting Firm  PricewaterhouseCoopers LLP |  |  | 154 | 
|Consolidated Financial Statements                                                        |  |  |     | 
|Consolidated Balance Sheets                                                              |  |  | 155 | 
|Consolidated Statements of Operations                                                    |  |  | 156 | 
|Consolidated Statements of Changes in
    Members Capital                               |  |  | 157 | 
|Consolidated Statements of Cash Flows                                                    |  |  | 158 | 
|Notes to Consolidated Financial Statements                                               |  |  | 159 | 

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Item
8.     Financial Statements and
Supplemental Data

REPORT OF INDEPENDENT AUDITORS

Members

GSM Facilities, LLC


We have audited the accompanying consolidated
balance sheets of GSM Facilities, LLC as of December 31,
2003 and 2004, and the related consolidated statements of
operations, changes in members capital, and cash flows for
the years then ended. These financial statements are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial
statements of Omnipoint Facilities Network II, LLC, a
wholly-owned subsidiary, which statements reflect total assets
of $1.1 billion and $1.4 billion as of
December 31, 2003 and 2004, respectively, and total
revenues of $125.5 million and $165.6 million for the
years then ended. Those statements were audited by other
auditors whose report has been furnished to us, and our opinion,
insofar as it relates to the amounts included for Omnipoint
Facilities Network II, LLC, is based solely on the report
of the other auditors.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Companys internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management and evaluating the
overall financial statement presentation. We believe that our
audits and the report of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audits and the
report of other auditors, the financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of GSM Facilities, LLC at December 31,
2003 and 2004, and the consolidated results of its operations
and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States.

As described in Note 2 to the financial
statements, the accompanying consolidated balance sheet as of
December 31, 2003 and the related consolidated statements
of operations, changes in members capital, and cash flows
for each of the years ended December 31, 2002 and 2003 have
been restated.



| |                      
| | ---------------------
| | /s/ ERNST & YOUNG LLP

Atlanta, Georgia

March 4, 2005


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Item
8.     Financial Statements and
Supplemental Data

REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Members and Board of Directors of GSM
Facilities, LLC:

In our opinion, the accompanying balance sheets
and the related statements of operations, of members
equity and of cash flows (not presented separately herein)
present fairly, in all material respects, the financial position
of Omnipoint Facilities Network II, LLC (the Company) at
December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years ended
December 31, 2004 and 2003 in conformity with accounting
principles generally accepted in the United States of America.
These financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

As described in Notes 1 and 5, the
Companys transactions are substantially with related
parties, who are the Companys member owners. Additionally,
as described in Note 1, the Company relies on its member
owners for funding requirements.

As described in notes 1 and 6, the
Companys assets were contributed to T-Mobile USA, Inc.
(T-Mobile) on January 5th, 2005, as part of an
agreement between T-Mobile and Cingular Wireless LLC to unwind
the operations of their joint venture, GSM Facilities, LLC.

As discussed in Note 2, the consolidated
financial statements for the years ended December 31, 2003
and 2002 have been restated.



| |                               
| | ------------------------------
| | /s/ PRICEWATERHOUSECOOPERS LLP

Seattle, Washington

March 3, 2005


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PART II (Dollars
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Item
8.     Financial Statements and
Supplemental Data

GSM FACILITIES, LLC

CONSOLIDATED BALANCE SHEETS

|                                       |                              |                       |       |      |  |   |       |     | 
|-------------------------------------- | ---------------------------- | --------------------- | ----- | ---- |  | - | ----- | --- | 
|                                       |                              |                      
|                                       |                              | December 31,         
|                                       |                              |                      
|                                       |                              | 2003                  |       | 2004
|                                       |                              |                       |       |     
|                                       |                              | (Restated)            |       |     
|                                       |                              |                      
|                                       |                              | (Dollars in millions)
|Assets                                 |                              |                       |       |      |  |   |       |    
|Current assets:                        |                              |                       |       |      |  |   |       |    
|                                       | Cash                         |                       | $     |     |  |   | $     |    | 
|                                       | Due from T-Mobile USA, Inc.  |                       |       | 9    |  |   |       | 139 | 
|                                       |                              |                       |       |      |  |   |       |    
|Total current assets                   |                              |                       | 9     |      |  |   | 139   |    
|Property, plant and equipment, net     |                              |                       | 3,588 |      |  |   | 4,133 |    
|                                       |                              |                       |       |      |  |   |       |    
|Total assets                           |                              | $                     | 3,597 |      |  | $ | 4,272 |    
|                                       |                              |                       |       |      |  |   |       |    
|Liabilities and members
    capital   |                              |                       |       |      |  |   |       |    
|Current liabilities:                   |                              |                       |       |      |  |   |       |    
|                                       | Due to Cingular Wireless LLC |                       | $     | 3    |  |   | $     | 138 | 
|                                       | Property taxes payable       |                       |       | 6    |  |   |       | 1   | 
|                                       |                              |                       |       |      |  |   |       |    
|Total current liabilities              |                              |                       | 9     |      |  |   | 139   |    
|Capital lease obligations              |                              |                       | 247   |      |  |   | 253   |    
|Deferred rent                          |                              |                       | 26    |      |  |   | 77    |    
|                                       |                              |                       |       |      |  |   |       |    
|Total liabilities                      |                              |                       | 282   |      |  |   | 469   |    
|Members capital                       |                              |                       | 3,315 |      |  |   | 3,803 |    
|                                       |                              |                       |       |      |  |   |       |    
|Total liabilities and members capital |                              | $                     | 3,597 |      |  | $ | 4,272 |    
|                                       |                              |                       |       |      |  |   |       |    

See accompanying notes.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

GSM FACILITIES, LLC

CONSOLIDATED STATEMENTS OF
OPERATIONS

|                         |                               |                         |      |            |  |      |      |     |  |   |       |     | 
|------------------------ | ----------------------------- | ----------------------- | ---- | ---------- |  | ---- | ---- | --- |  | - | ----- | --- | 
|                         |                               |                        
|                         |                               | Year Ended December 31,
|                         |                               |                        
|                         |                               | 2002                    |      | 2003       |  | 2004
|                         |                               |                         |      |            |  |     
|                         |                               | (Restated)              |      | (Restated) |  |     
|                         |                               | (Unaudited)             |      |            |  |     
|                         |                               |                        
|                         |                               | (Dollars in millions)  
|Revenues:                |                               |                         |      |            |  |      |      |     |  |   |       |    
|                         | Network service revenues      |                         | $    | 310        |  |      | $    | 439 |  |   | $     | 541 | 
|                         | Other revenues                |                         |      | 15         |  |      |      | 12  |  |   |       | 13  | 
|                         |                               |                         |      |            |  |      |      |     |  |   |       |    
|Total revenues           |                               |                         | 325  |            |  |      | 451  |     |  |   | 554   |    
|Operating expenses:      |                               |                         |      |            |  |      |      |     |  |   |       |    
|                         | Network services              |                         |      | 206        |  |      |      | 285 |  |   |       | 381 | 
|                         | Interconnection               |                         |      | 121        |  |      |      | 167 |  |   |       | 197 | 
|                         | Depreciation and amortization |                         |      | 324        |  |      |      | 454 |  |   |       | 589 | 
|                         |                               |                         |      |            |  |      |      |     |  |   |       |    
|Total operating expenses |                               |                         | 651  |            |  |      | 906  |     |  |   | 1,167 |    
|                         |                               |                         |      |            |  |      |      |     |  |   |       |    
|Operating loss           |                               |                         | (326 | )          |  |      | (455 | )   |  |   | (613  | )  
|Interest expense         |                               |                         | (17  | )          |  |      | (19  | )   |  |   | (20   | )  
|Other expense            |                               |                         |     |            |  |      | (5   | )   |  |   | (18   | )  
|                         |                               |                         |      |            |  |      |      |     |  |   |       |    
|Total other expenses     |                               |                         | (17  | )          |  |      | (24  | )   |  |   | (38   | )  
|                         |                               |                         |      |            |  |      |      |     |  |   |       |    
|Net loss                 |                               | $                       | (343 | )          |  | $    | (479 | )   |  | $ | (651  | )  
|                         |                               |                         |      |            |  |      |      |     |  |   |       |    

See accompanying notes.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

GSM FACILITIES, LLC

CONSOLIDATED STATEMENTS OF CHANGES IN
MEMBERS CAPITAL

|                                                         |                                          |                         |       |            |   |      |       |       |   |   |       |       |  
|-------------------------------------------------------- | ---------------------------------------- | ----------------------- | ----- | ---------- | - | ---- | ----- | ----- | - | - | ----- | ----- | -
|                                                         |                                          |                        
|                                                         |                                          | Year Ended December 31,
|                                                         |                                          |                        
|                                                         |                                          | 2002                    |       | 2003       |   | 2004
|                                                         |                                          |                         |       |            |   |     
|                                                         |                                          | (Restated)              |       | (Restated) |   |     
|                                                         |                                          | (Unaudited)             |       |            |   |     
|                                                         |                                          |                        
|                                                         |                                          | (Dollars in millions)  
|Balance at beginning of year, as originally
    reported |                                          | $                       | 1,771 |            |   |      |      |       |   |   |      |      
|Balance at beginning of year, as restated                |                                          |                         |      |            |   | $    | 2,721 |       |   | $ | 3,315 |      
|                                                         | Adjustment to initial contributions      |                         |       |           |   |      |       | (41   | ) |   |       | (2    | )
|                                                         | Contributions, net                       |                         |       | 1,293      |   |      |       | 1,114 |   |   |       | 1,141 |  
|                                                         | Net loss (as restated for 2002 and 2003) |                         |       | (343       | ) |      |       | (479  | ) |   |       | (651  | )
|                                                         |                                          |                         |       |            |   |      |       |       |   |   |       |      
|Balance at end of year, as restated                      |                                          | $                       | 2,721 |            |   | $    | 3,315 |       |   | $ | 3,803 |      
|                                                         |                                          |                         |       |            |   |      |       |       |   |   |       |      

See accompanying notes.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

GSM FACILITIES, LLC

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                |  |                         |       |            |  |      |       |   |  |   |       |  
|------------------------------------------------------------------------------- |  | ----------------------- | ----- | ---------- |  | ---- | ----- | - |  | - | ----- | -
|                                                                                |  |                        
|                                                                                |  | Year Ended December 31,
|                                                                                |  |                        
|                                                                                |  | 2002                    |       | 2003       |  | 2004
|                                                                                |  |                         |       |            |  |     
|                                                                                |  | (Restated)              |       | (Restated) |  |     
|                                                                                |  | (Unaudited)             |       |            |  |     
|                                                                                |  |                        
|                                                                                |  | (Dollars in millions)  
|Operating activities                                                            |  |                         |       |            |  |      |       |   |  |   |       |  
|Net loss                                                                        |  | $                       | (343  | )          |  | $    | (479  | ) |  | $ | (651  | )
|Adjustments to reconcile net loss to net cash
    used in operating activities: |  |                         |       |            |  |      |       |   |  |   |       |  
|Depreciation and amortization                                                   |  |                         | 324   |            |  |      | 454   |   |  |   | 589   |  
|Loss on disposal of property, plant and equipment                               |  |                         |      |            |  |      | 5     |   |  |   | 18    |  
|Interest accretion on capital lease obligations                                 |  |                         | 6     |            |  |      | 6     |   |  |   | 6     |  
|Deferred rent                                                                   |  |                         | 12    |            |  |      | 14    |   |  |   | 38    |  
|Changes in operating assets and liabilities:                                    |  |                         |       |            |  |      |       |   |  |   |       |  
|Due from (to) affiliates, net                                                   |  |                         | (5    | )          |  |      | (4    | ) |  |   | 5     |  
|Property taxes payable                                                          |  |                         |      |            |  |      | 4     |   |  |   | (5    | )
|                                                                                |  |                         |       |            |  |      |       |   |  |   |       |  
|Net cash used in operating activities                                           |  |                         | (6    | )          |  |      |      |   |  |   |      |  
|Investing activities                                                            |  |                         |       |            |  |      |       |   |  |   |       |  
|Net cash used in investing activities                                           |  |                         |      |            |  |      |      |   |  |   |      |  
|Financing activities                                                            |  |                         |       |            |  |      |       |   |  |   |       |  
|Capital contributions                                                           |  |                         | 6     |            |  |      |      |   |  |   |      |  
|                                                                                |  |                         |       |            |  |      |       |   |  |   |       |  
|Net cash provided by financing activities                                       |  |                         | 6     |            |  |      |      |   |  |   |      |  
|                                                                                |  |                         |       |            |  |      |       |   |  |   |       |  
|Change in cash                                                                  |  |                         |      |            |  |      |      |   |  |   |      |  
|Cash at beginning of year                                                       |  |                         |      |            |  |      |      |   |  |   |      |  
|                                                                                |  |                         |       |            |  |      |       |   |  |   |       |  
|Cash at end of year                                                             |  | $                       |      |            |  | $    |      |   |  | $ |      |  
|                                                                                |  |                         |       |            |  |      |       |   |  |   |       |  
|Supplemental disclosure                                                         |  |                         |       |            |  |      |       |   |  |   |       |  
|Interest paid for capital lease obligations                                     |  | $                       | 11    |            |  | $    | 13    |   |  | $ | 14    |  
|                                                                                |  |                         |       |            |  |      |       |   |  |   |       |  
|Non-cash investing and financing
    activities                                 |  |                         |       |            |  |      |       |   |  |   |       |  
|Capital contributions of property, plant and
    equipment                      |  | $                       | 1,287 |            |  | $    | 1,114 |   |  | $ | 1,141 |  
|                                                                                |  |                         |       |            |  |      |       |   |  |   |       |  
|Capital lease additions                                                         |  | $                       | 48    |            |  | $    | 19    |   |  | $ |      |  
|                                                                                |  |                         |       |            |  |      |       |   |  |   |       |  

See accompanying notes.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(Dollars in Millions)


Years ended December 31, 2002, 2003 and
2004



|   |             
|-- | ------------
|1. | Organization

GSM Facilities, LLC (GSM Facilities
or the Company), a Delaware limited liability
company, is a jointly controlled venture of Cingular Wireless
LLC (Cingular) and T-Mobile USA, Inc.
(T-Mobile) (collectively the members).
GSM Facilities was formed in November 2001 (inception date) and
serves as a holding company for Pacific Bell Wireless LLC
(PBW) and Omnipoint Facilities Network II, LLC
(OFN). The Company allows Cingular and T-Mobile to
share network infrastructures in the Los Angeles and
San Francisco Major Trading Areas (MTAs), which
cover most of California and parts of Nevada (California/
Nevada Market) and the New York Basic Trading Area
(BTA) (New York City Market). Both
Cingular and T-Mobile have access to the Companys network
infrastructure, and pursuant to the terms of the Companys
commercial arrangements, are able to provide their respective
customers access to the network. In July 2002, Cingular began
marketing its commercial service in the New York City Market and
T-Mobile began service in the California/ Nevada Market. The
Companys network operations are managed by Cingular and
T-Mobile through PBW and OFN, respectively, and each member
funds their daily cash operating needs (see further discussion
in Note 6).

PBW and OFN are economically dependent on
Cingular and T-Mobile, respectively, since neither PBW nor OFN
have access to funding and do not separately own spectrum
licenses which are essential to their businesses. Accordingly,
the Company is economically dependent upon Cingular and T-Mobile
to provide funding for the operating expenses and capital
expenditures of the Company and access to spectrum licenses for
the Companys network operations. See Note 7 regarding
the unwind of GSM Facilities in January 2005.

The Company sells only network services to
Cingular and T-Mobile. Amounts charged to each member are based
on monthly operating expenses and are allocated to each member
based on spectrum ownership (see Note 6). Although the
networks of the Company are constructed and operational,
Cingular and T-Mobile are required on a regular basis to
contribute additional capital to GSM Facilities to modify and
expand the networks.

Management control of the Company is vested in a
four-person management committee (the Management
Committee), to which each member has the right to appoint
two persons (the managers). The Management Committee
has complete and exclusive discretion and authority in the
management and control of the business and affairs of the
Company. A decision by the Management Committee is made by the
unanimous vote of the managers. The operating agreement provides
for certain actions or decisions by the Management Committee.
These include, but are not limited to, approval of the annual
operating and capital budget, amendments to the documents
concerning formation or dissolution of the Company, and entering
into any agreements or amendments that provide for payments by
or to the Company in excess of $5 that is not an arms length
transaction or in the ordinary course of business. Neither
Cingular nor T-Mobile has the unilateral ability to control the
Company or its actions.

Net assets contributed at formation by Cingular
and T-Mobile were valued at their historical costs and had
carrying values of approximately $1,119 and $442, respectively.
No spectrum licenses were contributed

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

to GSM Facilities at the time of, or subsequent
to, formation. The capital interests of Cingular and T-Mobile at
the time of formation were approximately 70% and 30%,
respectively. See Note 5 for further discussion of
members capital. The Company is expected to incur non-cash
losses due to depreciation, deferred rent and interest expense,
which are not reimbursed by the members.

The members liability is limited as set
forth in the Limited Liability Company Agreement (LLC
Agreement) of GSM Facilities and other applicable law. The
Company shall continue in existence in perpetuity or until the
Company is dissolved in accordance with the LLC Agreement (see
Notes 5 and 7). Additionally, the LLC Agreement sets forth
the basis for capital contributions, allocations and
distributions to the members including the allocations of
profits and losses, special allocations for tax purposes and
distributions of cash flows to the members.



|   |                                               
|-- | ----------------------------------------------
|2. | Summary of Significant Accounting
    Policies

Consolidation
and Basis of Presentation

The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries.
Significant intercompany accounts and transactions have been
eliminated in consolidation.

The consolidated financial statements have been
prepared on a going concern basis and do not give effect to the
dissolution transaction described in Note 7.

Reclassifications

Certain amounts have been reclassified in the
2002 and 2003 consolidated financial statements to conform to
the current year presentation.

Restatement

The Company has operating leases, principally for
cell sites, that have escalating rentals during the initial
lease term and during succeeding optional renewal periods.
During the course of preparing the 2004 consolidated financial
statements, the Company determined that its method of accounting
for operating leases did not comply with the requirements of
Statement of Financial Accounting Standards
(SFAS) No. 13, Accounting for Operating Leases(SFAS 13), and Financial Accounting Standards Board
Technical Bulletin No. 85-3, Accounting for
Operating Leases with Scheduled Rent Increases(FTB 85-3).
Historically, the Company has not assumed the exercise of
available renewal options. The Company reevaluated its
accounting for operating leases following publication of a
letter issued by the Office of the Chief Accountant of the
U.S. Securities and Exchange Commission on February 7,
2005. In light of the Companys investment in each cell
site, including acquisition costs and leasehold improvements,
the Company has determined that the exercise of certain renewal
options was reasonably assured at the inception of the lease.
Accordingly, the Company has corrected its accounting to
recognize rent expense, on a straight-line basis, over the lease
term and renewal periods that are reasonably assured. The
restated financial statements reflect these corrections.

The impact of these restatements to the
Companys statements of operations for the years ended
December 31, 2002 and 2003 was an increase to net loss of
$12 (unaudited) and $14, respectively, as well as a decrease to
members capital and increase in deferred rent of $26 as of
December 31, 2003. The impact associated with correcting
the Companys accounting for operating leases was an
increase to Network services of $12 (unaudited) and
$14, respectively, for the years ended December 31, 2002
and December 31, 2003.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

The following tables summarize the impact of
these restatements on our financial statements as of and for the
fiscal years ended December 31, 2002 and 2003:

|                   |                       |                       |  |             |  |  |  |       | 
|------------------ | --------------------- | --------------------- |  | ----------- |  |  |  | ----- | 
|                   |                       | As Reported           |  | As Restated
|                   |                       |                       |  |            
|                   |                       |                      
|                   |                       | (Dollars in millions)
|Balance Sheet      |                       |                       |  |             |  |  |  |      
|December 31, 2003: |                       |                       |  |             |  |  |  |      
|                   | Deferred rent         |                       |  |            |  |  |  | 26    | 
|                   | Total members equity |                       |  | 3,341       |  |  |  | 3,315 | 

|                         |                          |                       |   |             |   |  |   |      |  
|------------------------ | ------------------------ | --------------------- | - | ----------- | - |  | - | ---- | -
|                         |                          | As Reported           |   | As Restated
|                         |                          |                       |   |            
|                         |                          |                      
|                         |                          | (Dollars in millions)
|Statements of Operations |                          |                       |   |             |   |  |   |     
|December 31, 2002:       |                          |                       |   |             |   |  |   |     
|                         | Network service costs    |                       | $ | 194         |   |  | $ | 206  |  
|                         | Total operating expenses |                       |   | 639         |   |  |   | 651  |  
|                         | Net loss                 |                       |   | (331        | ) |  |   | (343 | )
|December 31, 2003:       |                          |                       |   |             |   |  |   |     
|                         | Network service costs    |                       |   | 271         |   |  |   | 285  |  
|                         | Total operating expenses |                       |   | 892         |   |  |   | 906  |  
|                         | Net loss                 |                       |   | (465        | ) |  |   | (479 | )

|                         |                                                                                 |                       |   |             |   |  |   |      |    | 
|------------------------ | ------------------------------------------------------------------------------- | --------------------- | - | ----------- | - |  | - | ---- | -- | 
|                         |                                                                                 | As Reported           |   | As Restated
|                         |                                                                                 |                       |   |            
|                         |                                                                                 |                      
|                         |                                                                                 | (Dollars in millions)
|Statements of Cash Flows |                                                                                 |                       |   |             |   |  |   |     
|December 31, 2002:       |                                                                                 |                       |   |             |   |  |   |     
|                         | Net loss                                                                        |                       | $ | (331        | ) |  | $ | (343 | ) 
|                         | Adjustments to reconcile net loss to net cash
    used in operating activities: |                       |   |             |   |  |   |      |   
|                         |                                                                                 | Deferred rent         |   |             |  |  |   |      | 12 | 
|December 31, 2003:       |                                                                                 |                       |   |             |   |  |   |     
|                         | Net loss                                                                        |                       |   | (465        | ) |  |   | (479 | ) 
|                         | Adjustments to reconcile net loss to net cash
    used in operating activities: |                       |   |             |   |  |   |      |   
|                         |                                                                                 | Deferred rent         |   |             |  |  |   |      | 14 | 

Cash

The members support the cash operating needs of
the Company.

Revenue
Recognition

The Company earns network service revenues by
providing the members access to its network infrastructure.
Network service revenues are based on monthly operating expenses
and are recognized monthly when earned and charged to the
members. The amount charged to each member of GSM

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

Facilities is allocated based on each
members respective ownership of the licensed spectrum in
each market. Reimbursable monthly operating expenses are
recorded as network service and interconnection expenses and
include professional services consisting primarily of salaries
and wages, site related, facility related and interconnection
costs. Reimbursable costs also include payments made on the
capital lease obligations.

Other revenues primarily consist of revenue
earned from the local telephone company for land line calls
terminated on the Companys wireless switches, and are
recognized when calls are terminated. These revenues are treated
as a reduction to the reimbursable monthly operating expenses
described above.

Property,
Plant and Equipment

Property contributed at formation of the Company
was recorded at the net book value of the member who contributed
the property. Subsequent to the formation date, the members
contribute property to the Company at prices that are mutually
agreed upon by the members and which approximate fair value.
Furthermore, these prices are subject to adjustment from time to
time, by unanimous agreement of the members, to reflect general
changes in price levels.

The Company periodically evaluates the useful
lives of its wireless communication systems based on
technological and other industry changes to determine whether
events or changes in circumstances could warrant revisions to
useful lives or result in the impairment of long-lived assets.

Assets are depreciated using the straight-line
method over their estimated useful lives. Leasehold
improvements, including site acquisition and other cell site
construction improvements, are depreciated over the shorter of
their estimated useful lives or the term of the related ground
or collocation lease. Network engineering costs incurred on the
Companys behalf by the members during the construction
phase of the Companys wireless network are capitalized as
part of property and equipment.

Asset
Retirement Obligations

The Company adopted SFAS No. 143,
Accounting for Asset Retirement Obligations
(SFAS 143) effective January 1, 2003. This statement
requires the Company to record the fair value of a liability for
an asset retirement obligation in the period in which it is
incurred and capitalize that amount as part of the book value of
the long-lived asset. Over time, the liability is accreted to
its present value each period, and the capitalized cost is
depreciated over the useful life of the related asset. Upon
settlement of the liability, the Company either settles the
obligation for its recorded amount or incurs a gain or loss.

The Company has certain legal obligations related
to network infrastructure, principally tower assets, which fall
within the scope of SFAS 143. These legal obligations
include obligations to remediate leased land on which the
Companys network infrastructure assets are located. The
significant assumptions used in estimating the Companys
asset retirement obligations include the following: a
probability that each of the Companys network
infrastructure assets will be remediated at the lessors
directive, expected settlement dates that coincide with lease
expiration dates plus estimates of lease extensions, remediation
costs that are indicative of what third party vendors would
charge the Company to remediate the sites, expected inflation
rates that are consistent with historical inflation rates, and
credit-adjusted risk-free rates that approximate the
members incremental borrowing rates.

The adoption of SFAS 143 did not have a
material impact on the Companys individual financial
statement line items or its consolidated financial statements
taken as a whole.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

Operating
Leases

The Company accounts for its operating leases in
accordance with SFAS 13 and FTB 85-3. Rent expense is
recorded on a straight-line basis over the initial lease term
and those renewal periods that are reasonably assured. The
difference between rent expense and rent paid is recorded as
Deferred rent in the consolidated balance sheets.

Taxes

The Company is a limited liability company.
Accordingly, income tax items flow through to its members who
would be subject to tax at their level pursuant to federal and
state income tax laws. The members are responsible for their tax
liabilities resulting from income earned at the member level.
The Company is not subject to income taxes at the limited
liability company level. The Companys obligations for
property taxes are accrued in the Property tax
payable line item on the consolidated balance sheets.

Use of
Estimates

The preparation of the accompanying financial
statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities,
revenues and expenses and the disclosure of contingencies at the
date of the financial statements. The Company bases its
estimates on historical experience, where applicable, and other
assumptions the Company believes are reasonable under the
circumstances. Significant estimates include the determination
of useful lives of network assets, evaluation of the minimum
lease term as defined in SFAS 13 for operating leases, and
accrued receivables and payables from members for operating
expense and capital settlements. Actual results could differ
from such estimates under different assumptions or conditions.

Comprehensive
Loss

Comprehensive loss for the Company is the same as
net loss for all periods presented.



|   |                              
|-- | -----------------------------
|3. | Property, Plant and Equipment

Property, plant and equipment is summarized as
follows:

|                                    |  |              |               |              |  |      |        |   |  |   |        |  
|----------------------------------- |  | ------------ | ------------- | ------------ |  | ---- | ------ | - |  | - | ------ | -
|                                    |  |              |               |             
|                                    |  |              |               | December 31,
|                                    |  | Estimated    |               |             
|                                    |  | Useful Lives |               | 2003         |  | 2004
|                                    |  |              |               |              |  |     
|                                    |  | (in years)   |               |              |  |     
|Buildings and building improvements |  |              | 10-25         |              |  | $    | 64     |   |  | $ | 83     |  
|Wireless communication systems      |  |              | 3-15          |              |  |      | 3,788  |   |  |   | 4,795  |  
|Site acquisition costs              |  |              | Lease term-20 |              |  |      | 371    |   |  |   | 451    |  
|Tower capital leases                |  |              | 13-32         |              |  |      | 229    |   |  |   | 229    |  
|Construction in progress            |  |              |              |              |  |      | 354    |   |  |   | 268    |  
|                                    |  |              |               |              |  |      |        |   |  |   |        |  
|                                    |  |              |               |              |  |      | 4,806  |   |  |   | 5,826  |  
|Less accumulated depreciation       |  |              |               |              |  |      | (1,218 | ) |  |   | (1,693 | )
|                                    |  |              |               |              |  |      |        |   |  |   |        |  
|Property, plant and equipment, net  |  |              |               |              |  | $    | 3,588  |   |  | $ | 4,133  |  
|                                    |  |              |               |              |  |      |        |   |  |   |        |  

The net book value of assets recorded under
capital leases was $208 and $200 at December 31, 2003 and
2004, respectively. The capital leases relate to communication
towers (see Note 4). Amortization of assets recorded under
capital leases is included in depreciation expense. Capitalized
network engineering and

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

overhead costs incurred during the construction
phase of the Companys wireless networks for the years
ended December 31, 2002, 2003 and 2004 were $36
(unaudited), $40 and $32, respectively



|   |                              
|-- | -----------------------------
|4. | Commitments and Contingencies

Capital
Leases

PBW, which was contributed to the Company in
November 2001, has certain leases related to approximately 640
communications towers that are accounted for as capital leases.
Under the terms of these agreements, these towers are leased
directly from an affiliate of SBC Communications Inc.
(SBC), 60% owner of Cingular, which in turn had
leased the rights to certain space on 545 of these towers from
SpectraSite, Inc. (SpectraSite). In February 2003, a
subsidiary of Cingular acquired leasehold interests from
SpectraSite in all of the space on these 545 towers. For the
years ended December 31, 2002, 2003 and 2004, the Company
reimbursed Cingular for lease payments made on its behalf
amounting to $11 (unaudited), $13 and $14, respectively.
The Company charges its members for the amounts of the monthly
lease payments in accordance with the methodology for monthly
operating expenses as discussed in Note 6.

The annual rent is escalated by 5% as of
December 14 of every year. The term of the lease is unique
to each tower and ranges from 13 to 32 years. The Company
(as lessee) has the right to withdraw from any lease on the
tenth anniversary of the lease date and on each five-year
anniversary thereafter.

Minimum lease payments under capital lease
obligations at December 31, 2004 are summarized below:

|                            |  |   |      |  
|--------------------------- |  | - | ---- | -
|2005                        |  | $ | 17   |  
|2006                        |  |   | 18   |  
|2007                        |  |   | 19   |  
|2008                        |  |   | 20   |  
|2009                        |  |   | 20   |  
|Thereafter                  |  |   | 765  |  
|                            |  |   |      |  
|Total minimum payments      |  |   | 859  |  
|Less imputed interest       |  |   | (494 | )
|Less executory costs        |  |   | (112 | )
|                            |  |   |      |  
|Total long-term obligations |  | $ | 253  |  
|                            |  |   |      |  

Operating Leases

The Company has also entered into operating
leases for ground, facilities and equipment used in operations.
These leases typically include renewal options and escalation
clauses. In general, lease terms include a five or ten year
initial term with three to five renewal periods with five year
terms. Rental expense under operating leases for the years ended
December 31, 2002, 2003 and 2004 were $100 (unaudited
and restated), $129 (restated) and $184, respectively. Included
in the 2002, 2003 and 2004 amounts are $4, $5 and $8
respectively, related to certain network facilities leased from
SBC. The

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PART II (Dollars
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Item
8.     Financial Statements and
Supplemental Data

following table summarizes the approximate future
minimum rentals, including renewal terms that are reasonably
assured, under noncancelable operating leases in effect at
December 31, 2004:

|           |  |   |       | 
|---------- |  | - | ----- | 
|2005       |  | $ | 146   | 
|2006       |  |   | 149   | 
|2007       |  |   | 151   | 
|2008       |  |   | 153   | 
|2009       |  |   | 156   | 
|Thereafter |  |   | 1,793 | 
|           |  |   |       | 
|Total      |  | $ | 2,548 | 
|           |  |   |       | 



| |           
| | ----------
| | Litigation

The Company is not currently a party to any
pending litigation, which, if decided adversely to the Company,
would have a material adverse effect on the business, financial
condition, results of operations or cash flows of the Company.



|   |                 
|-- | ----------------
|5. | Members Capital

Cingular and T-Mobile agreed to jointly fund
capital expenditures of GSM Facilities. Contributions to GSM
Facilities are generally determined by the proportionate share
of the annual capital expenditure requirements based on each
members incremental growth of network usage. Such
contributions are accounted for as an increase to the
members capital of GSM Facilities. The LLC Agreement also
provides for periodic capital settlements that can either
increase or decrease each members capital account. In
addition to the periodic capital settlements, Cingular made
additional contributions of $225 to GSM Facilities in both 2002
and 2003 on behalf of T-Mobile as required under the terms of
the LLC Agreement. No member is entitled to withdraw any part of
its capital contributions without unanimous approval by the
Management Committee. The total economic ownership interest of
GSM Facilities as of December 31, 2004 is approximately 60%
for Cingular and 40% for T-Mobile.

GSM Facilities may be dissolved by its members
under a number of circumstances. Dissolution may occur at any
time as a result of the unanimous decision by its members;
automatically upon the bankruptcy of one of its members; upon
the occurrence of certain material breaches of the venture
agreements; upon a decree of judicial dissolution; or in the
event of an acquisition transaction (as defined) involving one
of the members, at the election of the member that is a party to
the acquisition transaction. See Note 7.



|   |                           
|-- | --------------------------
|6. | Related Party Transactions

The monthly operating expenses of the Company,
excluding deferred rent, are charged to Cingular and T-Mobile
based on each members proportionate share of the licensed
spectrum in each market. During all periods presented, Cingular
and T-Mobile held weighted-average spectrum of 53% and 47%,
respectively, in the California/ Nevada Market, and 25% and 75%,
respectively, in the New York City Market. Through a separate
reciprocal home roaming agreement, Cingular and T-Mobile charge
each other for usage that is not in the same proportion as the
spectrum-based allocations.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental Data

The consolidated statements of operations include
network service revenues from the members as follows:

|                          |  |                         |     |      |  |      |     |  |  |   |     | 
|------------------------- |  | ----------------------- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|                          |  |                        
|                          |  | Year Ended December 31,
|                          |  |                        
|                          |  | 2002                    |     | 2003 |  | 2004
|                          |  |                         |     |      |  |     
|                          |  | (Unaudited)             |     |      |  |     
|Network service revenues: |  |                         |     |      |  |      |     |  |  |   |     | 
|Cingular                  |  | $                       | 141 |      |  | $    | 199 |  |  | $ | 241 | 
|T-Mobile                  |  |                         | 169 |      |  |      | 240 |  |  |   | 300 | 
|                          |  |                         |     |      |  |      |     |  |  |   |     | 
|                          |  | $                       | 310 |      |  | $    | 439 |  |  | $ | 541 | 
|                          |  |                         |     |      |  |      |     |  |  |   |     | 

Concurrent with its formation, GSM Facilities
entered into operating agreements with Cingular and T-Mobile for
them to manage and maintain the network assets of the
California/ Nevada Market and the New York City Market,
respectively. The Company purchases all services from the
members and has no direct employees. Direct operating costs
incurred by the members on behalf of the Company include
salaries and wages, site related, facility related and
interconnection costs.

Pursuant to the terms of the operating
agreements, services provided during the years ended
December 31, 2002, 2003 and 2004 by Cingular to the Company
for network services and local interconnection charges were $229
(unaudited and restated), $313 (restated) and $397,
respectively, and are included in operating expenses in the
consolidated statements of operations. Pursuant to the terms of
the operating agreements, services provided during the years
ended December 31, 2002, 2003 and 2004 by T-Mobile to the
Company for network services and local interconnection charges
were $98 (unaudited and restated), $139 (restated) and $181,
respectively, and are included in operating expenses in the
consolidated statements of operations.

At December 31, 2003 and 2004, the
consolidated balance sheets include the following amounts due
(to)/from the members:

|                                     |                                    |              |    |      |   |   |      |      |  
|------------------------------------ | ---------------------------------- | ------------ | -- | ---- | - | - | ---- | ---- | -
|                                     |                                    |             
|                                     |                                    | December 31,
|                                     |                                    |             
|                                     |                                    | 2003         |    | 2004
|                                     |                                    |              |    |     
|Due (to)/from T-Mobile USA, Inc.:    |                                    |              |    |      |   |   |      |     
|                                     | Capital settlements                |              | $  | (17  | ) |   | $    | 125  |  
|                                     | Operating expense settlements, net |              |    | 26   |   |   |      | 14   |  
|                                     |                                    |              |    |      |   |   |      |     
|                                     |                                    | $            | 9  |      |   | $ | 139  |     
|                                     |                                    |              |    |      |   |   |      |     
|Due (to)/from Cingular Wireless LLC: |                                    |              |    |      |   |   |      |     
|                                     | Capital settlements                |              | $  | 17   |   |   | $    | (125 | )
|                                     | Operating expense settlements, net |              |    | (20  | ) |   |      | (13  | )
|                                     |                                    |              |    |      |   |   |      |     
|                                     |                                    | $            | (3 | )    |   | $ | (138 | )   
|                                     |                                    |              |    |      |   |   |      |     

The capital settlements presented in the table
above represent amounts due to/from the members for the
estimated fourth quarter settlement in 2003 and 2004. The final
capital settlement for fourth quarter of 2004 is expected to be
paid by April 5, 2005 when the actual amount of such
settlement is determined and agreed to by the members. As the
Company has been dissolved as of January 5, 2005 (see
Note 7), the final settlement will be paid directly between
the members.



|   |                 
|-- | ----------------
|7. | Subsequent Event

On February 17, 2004, Cingular entered into
an Agreement and Plan of Merger to acquire AT&T Wireless
Services, Inc. (AT&T Wireless). In May 2004, the
members unanimously agreed, subject to regulatory and other
customary closing conditions and the closing of the acquisition
of AT&T Wireless, to dissolve

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Item
8.     Financial Statements and
Supplemental Data

GSM Facilities, distribute the related network
assets and exchange certain spectrum. The closing of
Cingulars acquisition of AT&T Wireless occurred on
October 26, 2004. The closing of the dissolution of GSM
Facilities, and certain of the other transactions described
below, occurred on January 5, 2005.

In dissolution, the New York City Market network
assets were distributed to T-Mobile, and the California/ Nevada
Market network assets were distributed to Cingular. The net book
value of the New York City Market and California/ Nevada Market
network assets at December 31, 2004 were $1,375 and $2,758,
respectively. All capital lease obligations related to
California/ Nevada Market network assets were also distributed
to Cingular. Following these distributions, a determination was
made of each members capital account deficit or surplus,
and a settlement made between the members. On January 5,
2005, Cingular paid $200 in settlement of its capital account
deficit. All outstanding capital settlements are expected to be
settled between the members by April 5, 2005 (see
Note 6).

In dissolution, each member was to receive 50% of
the spectrum used in the operation of GSM Facilities. As
discussed in Note 1, spectrum licenses were not contributed
to GSM Facilities upon its formation in 2001 but rather were
subject to a separate agreement governing their use. In
connection with the dissolution, the members are contractually
required to exchange certain spectrum. The Company expects the
spectrum licenses to be exchanged on January 1, 2007.
Cingular will receive 10 MHz of spectrum in the New York
City Market and 2.5 MHz of spectrum in the Las Vegas,
Nevada BTA from T-Mobile and T-Mobile will receive 5 MHz of
spectrum from Cingular in each of nine BTAs in California/
Nevada Market, the largest of which is San Diego.

Immediately following the dissolution of GSM
Facilities, Cingular sold its ownership of the California/Nevada
Market network assets to T-Mobile for approximately $2,500 in
cash. Cingular retains the right to utilize the
California/Nevada Market and New York City Market networks
during a four year transition period and has guaranteed to
purchase a minimum number of minutes over this term amounting to
$1,200. The members retain all their respective customers in
each market. Cingular also sold 10 MHz of spectrum to
T-Mobile in each of the San Francisco, Sacramento and Las
Vegas BTAs for $180. T-Mobile has the option to purchase an
additional 10 MHz of spectrum in the Los Angeles and
San Diego BTAs from Cingular at the end of two years, under
certain circumstances.

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|        |                                                
|------- | -----------------------------------------------
|Item 8. | Financial Statements and Supplementary
    Data

Schedule II  Valuation and Qualifying
Accounts

Allowance for Doubtful Accounts


|            |  |            |     |            |  |            |     |            |  |           |     |      |  |  |      |         |  |   |     | 
|----------- |  | ---------- | --- | ---------- |  | ---------- | --- | ---------- |  | --------- | --- | ---- |  |  | ---- | ------- |  | - | --- | 
|Col. A      |  | Col. B     |     | Col. C     |  | Col. C     |     | Col. D     |  | Col. E   
|            |  |            |     |            |  |            |     |            |  |          
|            |  | Balance at |     | Charged to |  | Charged to |     |            |  | Balance  
|            |  | Beginning  |     | Costs and  |  | Other      |     |            |  | at End   
|Description |  | of Period  |     | Expenses   |  | Accounts   |     | Deductions |  | of Period
|            |  |            |     |            |  |            |     |            |  |          
|Year 2004   |  | $          | 130 |            |  |            | 423 |            |  |           | (66 | )(a) |  |  | (170 | )(b)(c) |  | $ | 317 | 
|Year 2003   |  | $          | 163 |            |  |            | 259 |            |  |           | (24 | )(a) |  |  | (268 | )(b)    |  | $ | 130 | 
|Year 2002   |  | $          | 131 |            |  |            | 404 |            |  |           |    |      |  |  | (372 | )(b)    |  | $ | 163 | 



---



|    |                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Allowance for affiliate accounts receivable
    included in Due to affiliates, net, on the balance sheets at
    December 31, 2003 and 2004.
|   
|(b) | Includes amounts written off as uncollectible,
    net of recoveries.                                                                       
|   
|(c) | Includes accounts receivable allowance of $225
    recorded in the AT&T Wireless acquisition.                                               






|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure

None.






|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

(a) We maintain disclosure controls and
procedures that are designed to ensure that information required
to be disclosed by us in the reports filed under the Securities
Exchange Act of 1934, as amended (Exchange Act) is recorded,
processed, summarized and reported within the time periods
specified in the SECs rules and forms. As of
December 31, 2004, management, including our Chief
Executive Officer and Chief Financial Officer, completed its
evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures. On February 18,
2005, our management and the Audit Committee of the board of
directors of our Manager concluded that our financial statements
for fiscal periods ending December 31, 2000 through
December 31, 2003 and the first three interim periods of
2004 should be restated to correct certain errors relating to
accounting for operating leases and that such previously filed
financial statements should no longer be relied upon.
Ernst & Young LLP, our independent registered public
accounting firm, has advised us that it concurs with our
conclusion. While management believes that the impact of this
error is not material to any previously issued financial
statements, we determined that the cumulative adjustment
required to correct this error was too large to record in 2004.

Our method of accounting for operating leases did
not comply with the requirements of SFAS No. 13,
Accounting for Leasesand FASB Technical
Bulletin No. 85-3, Accounting for Operating Leases
with Scheduled Rent Increases. Historically, we have not
assumed the exercise of available renewal options in accounting
for operating leases. We reevaluated our accounting for
operating leases and the related useful lives for depreciating
leasehold improvements following publication of a letter issued
by the Office of the Chief Accountant of the SEC on
February 7, 2005. In light of our investment in each cell
site, including acquisition costs and leasehold improvements, we
have determined that the exercise of certain renewal options was
reasonably assured at the inception of the leases. Accordingly,
we have corrected our accounting to recognize rent expense, on a
straight-line basis, over the initial lease term and renewal
periods that are reasonably assured.

Based on the Public Company Accounting Oversight
Boards Auditing Standard No. 2, An Audit of
Internal Control Over Financial Reporting Performed in
Conjunction With an Audit of Financial

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|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Statements,restatement of financial statements in prior filings with the
SEC is a strong indicator of the existence of a material
weakness in the design or operation of internal control
over financial reporting. Although we are not an
accelerated filer within the meaning of the rules
implementing Section 404 of the Sarbanes-Oxley Act of 2002
and therefore are not required to include in this report
managements assessment of the effectiveness of our
internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) as of
December 31, 2004, management has concluded that, because
we were required to restate our financial statements as a result
of the lease accounting error described above, a material
weakness existed in our internal control over financial
reporting as of the date of this report and, to this extent, our
disclosure controls and procedures were not effective.

In connection with correcting our methodology of
accounting for operating leases, we have instituted the
following procedures to remediate this material weakness:



|  |                                                                                                                    
|- | -------------------------------------------------------------------------------------------------------------------
| | complete an annual review of the lease terms to
    verify appropriate number of reasonably assured
    renewals;
| 
| | enhance systematic controls around the
    calculation of deferred rent liability; and                             
| 
| | review new and/or modified lease arrangements to
    ensure appropriate accounting under GAAP.                     

(b) Except as set forth above, during the
evaluation referred to in Item 9A(a) above, we have
identified no change in our internal control over financial
reporting that occurred during our last fiscal quarter that has
materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.




Item 9B.     Other
Information

None.

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|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

Directors and Executive Officers

The following table presents information
regarding persons who serve as directors of our manager and
executive officers of us and our Manager as of March 7,
2005.

|                          |  |     |    |          |  |                                                                                                   
|------------------------- |  | --- | -- | -------- |  | --------------------------------------------------------------------------------------------------
|Name                      |  | Age |    | Position
|                          |  |     |    |         
|Richard A. Anderson       |  |     | 46 |          |  | Class B Director                                                                                  
|Ronald M. Dykes           |  |     | 58 |          |  | Chairman of the Board and Class B Director
    (Member of Audit Committee)                        
|Mark L. Feidler           |  |     | 49 |          |  | Class B Director (Member of Nominating and
    Compensation Committee)                            
|Richard G. Lindner        |  |     | 50 |          |  | Class B Director (Member of Audit Committee)                                                      
|Randall L. Stephenson     |  |     | 44 |          |  | Class B Director (Member of Nominating and
    Compensation Committee)                            
|Rayford Wilkins, Jr.      |  |     | 53 |          |  | Class B Director                                                                                  
|Stanley T. Sigman         |  |     | 58 |          |  | President and Chief Executive Officer                                                             
|Ralph de la Vega          |  |     | 53 |          |  | Chief Operating Officer                                                                           
|Peter A. Ritcher          |  |     | 44 |          |  | Chief Financial Officer                                                                           
|F. Thaddeus Arroyo        |  |     | 41 |          |  | Chief Information Officer                                                                         
|Rickford D. Bradley       |  |     | 53 |          |  | Executive Vice President  Human
    Resources                                                    
|Joaquin R. Carbonell, III |  |     | 52 |          |  | Executive Vice President and General Counsel                                                      
|Sean P. Foley             |  |     | 46 |          |  | Executive Vice President  Treasury and
    Corporate Development                                 
|William W. Hague          |  |     | 49 |          |  | Executive Vice President  International                                                          
|Gregory T. Hall           |  |     | 49 |          |  | Vice President and Controller                                                                     
|Paul R. Roth              |  |     | 46 |          |  | Executive Vice President  External
    Affairs and Public Relations                              
|Carol L. Tacker           |  |     | 56 |          |  | Vice President and Assistant General Counsel,
    Corporate Secretary and Chief Compliance Officer



| |          
| | ---------
| | Directors

Richard A. Anderson, Class B Director,
Cingular Wireless Corporation. Richard Anderson is vice
chairman  planning and administration of BellSouth
and has served in various positions with BellSouth since 1981.
He was elected to the board of directors of Cingular Wireless
Corporation in February 2003. Mr. Anderson is also a
director of Adtran, Inc.

Ronald M. Dykes, Chairman of the Boardand
Class B Director, Cingular Wireless Corporation.
Ronald Dykes is chief financial officer of BellSouth and has
served in various positions with BellSouth since 1971. He was
elected to the board of directors of Cingular Wireless
Corporation in October 2000. Mr. Dykes is also a director
of St. Josephs Hospital Atlanta.

Mark L. Feidler, Class B Director,
Cingular Wireless Corporation. Mark Feidler is chief
operating officer for BellSouth Corporation and has served in
various positions with BellSouth and Cingular since 1991. From
2001 through 2003, he served as the chief operating officer of
Cingular. He was elected to the board

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|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

of directors of Cingular Wireless Corporation in
June 2004. Mr. Feidler is also a director of the Schenck
School, Great Schools Atlanta and the Center for Puppetry Arts.

Richard G. Lindner, Class B Director,
Cingular Wireless Corporation. Richard Lindner is the senior
executive vice president and chief financial officer of SBC, and
has served as chief financial officer of Cingular, and as senior
vice president and chief operating officer of SBC Wireless.
Prior to October 1999, he served as president and chief
executive officer of Southwestern Bell Wireless, where he was in
charge of all wireless operations in five states.
Mr. Lindner held a variety of senior management positions
since joining SBC in 1986, including vice president and chief
financial officer for Southwestern Bell Telephone Company in
1996. He was elected to the board of directors of Cingular
Wireless Corporation in June 2004. Mr. Lindner is also a
director of Sabre Holdings Corporation.

Randall L. Stephenson, Class B Director,
Cingular Wireless Corporation. Randall Stephenson is chief
operating officer of SBC and has served SBC in high level
managerial positions for more than the past five years. He was
elected to the board of directors of Cingular Wireless
Corporation in July 2001 and served as its Chairman of the Board
from February 2003 to June 2004.

Rayford Wilkins, Jr., Class B
Director, Cingular Wireless Corporation. Rayford Wilkins is
group president  International, Yellow Pages and
Sterling Commerce and has served SBC and its predecessors in
various capacities since 1974. He was elected to the board of
directors of Cingular Wireless Corporation in November 2002. He
also serves on the board of directors of H&R Block, Inc.

Audit Committee Financial
Experts.We have an audit committee
comprised of Messrs. Dykes and Lindner. The board of
directors of Cingular Wireless Corporation, our Manager, has
determined that both audit committee members qualify as audit
committee financial experts under the Sarbanes-Oxley Act of 2002
and the rules of the Securities and Exchange Commission. Because
of their affiliations with BellSouth and SBC, respectively, they
are not independent of management.



| |                   
| | ------------------
| | Executive Officers

Executive officers are elected by the board of
directors of our manager and serve until their successors have
been duly elected and qualified or until their resignation or
removal. Our executive officers also constitute the executive
officers of our Manager, each holding the same office with both
entities.

Stanley T. Sigman, President and Chief
Executive Officer. Stanley Sigman was elected to the board
of directors of our Manager in October 2000 and resigned that
position and became our President and Chief Executive Officer in
November 2002. Previously, he had served as group president and
chief operating officer of SBC from April 2001 until November
2002. Prior to that, he was president and chief executive
officer of Southwestern Bell Telephone Company and served as
group president of SBC National Operations since 1999.

Ralph de la Vega, Chief Operating Officer.
Ralph de la Vega came to Cingular from BellSouth, where he most
recently served as President  BellSouth Latin America
from 2002 to 2003. Prior to that, he was BellSouths
President of Broadband and Internet Services from 2000 to 2001.
Mr. de la Vega came to BellSouth in 1974.

Peter A. Ritcher, Chief Financial Officer.
Peter Ritcher came to Cingular from SBC Communications, Inc.,
where he was vice president-corporate finance, responsible for
all financial planning and wireline financial operations from
November 2001 to May 2004. Previously from September 2000 to
November 2001, he served as vice president and controller with
responsibility for all financial reporting, accounting policy,
financial operations, regulatory finance and credit and
collections for SBC. He joined SBC Communications Inc. in 1987
and has served in numerous financial positions with it and its
subsidiaries.

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|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

F. Thaddeus Arroyo, Chief Information
Officer. Thaddeus Arroyo came to Cingular from Sabre
Corporation, where he served as senior vice president of product
marketing and development since June 2000. He also served as
senior vice president of information technology services in
1999, vice president of global outsourcing from 1997 to 1999,
vice president of strategic infrastructure and in a number of
other positions for Sabre from 1992 to 1997. Prior to joining
Sabre, Mr. Arroyo worked in Southwestern Bells
information technology organization.

Rickford D. Bradley, Executive Vice
President  Human Resources. Rickford Bradley came
to Cingular from SBC Telecommunications, Inc., where he served
as president of interconnection services from 1999 to 2001. He
has held a variety of senior and executive positions in sales,
network services and corporate development. He also served as
president of public communications in 1999 for SBC. Prior to
SBCs merger with Pacific Telesis in 1997, Mr. Bradley
served as vice president and general manager of operator
services at Pacific Bell.

Joaquin R. Carbonell III, Executive Vice
President and General Counsel. Joaquin Carbonell came to
Cingular from BellSouth Enterprises, Inc., where he served as
vice president and group counsel and was responsible for the
legal operations of wireless services since 1997. Prior to that,
he held positions as president of BellSouth International for
Latin America from 1992 to 1994 and then as president of
BellSouth Europe from 1994 to 1997, overseeing operations in
those regions. He joined BellSouth in 1980 as an attorney with
the Southern Bell Telephone & Telegraph Company.

Sean P. Foley, Executive Vice
President  Treasury/Corporate Development. Sean
Foley came to Cingular in 2000 from U S WEST, where he
was senior vice president  treasurer from 1998 to
2000. In that role he was responsible for all financing
activities, as well as asset strategy.

William W. Hague, Executive Vice
President  International. William Hague came to
Cingular in 2004 from AT&T Wireless, where he served as
executive vice president for international roaming and strategy
since 2002. He has also served as executive vice president for
corporate strategy and acquisitions from 1995 to 2002, where he
was responsible for all that companys merger and
acquisition work, joint ventures and roaming arrangements.
Mr. Hague came to AT&T Wireless from McCaw
Communications in 1995.

Gregory T. Hall, Vice President and
Controller. Gregory Hall came to Cingular from SBC Wireless,
Inc., where he served as vice president and chief financial
officer from October 1999 until the formation of Cingular. He
joined SBC in 1984 and has served in numerous financial and
corporate development positions with it and its subsidiaries.

Paul R. Roth, Executive Vice
President  External Affairs and Public Relations.
Paul Roth came to Cingular in 2004 from SBC Communications,
Inc., where he was president of SBCs Midwest consumer
business since December 2002, responsible for all consumer
markets sales and service. Previously, from March 2001 to
November 2001, he served as president and chief executive
officer of Prodigy Communications Corporation. Mr. Roth has
held a variety of sales and marketing positions since joining
Southwestern Bell Wireless in 1986.

Carol L. Tacker, Vice President and Assistant
General Counsel, Corporate Secretary and Chief Compliance
Officer. Carol Tacker came to Cingular from SBC Wireless
where she served as vice president  general counsel
since 1996. Prior to that, Ms. Tacker served in several
positions of increasing responsibility, including general
attorney of Southwestern Bell Yellow Pages and general attorney
of Southwestern Bell Mobile Systems. Ms. Tacker joined SBC
in 1984 as an attorney with Southwestern Bell Telephone Company.

There are no family relationships among any of
the above-named directors of our Manager or executive officers
or any arrangement or understanding between any of these
directors and executive officers and any

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|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

other person pursuant to which any such director
or officer was selected. See Item 13, Certain
Relationships and Related Transactions 
Stockholders Agreement for more information
regarding the agreement between the stockholders of our Manager
with respect to the election of the directors of our Manager.






|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

General

Other than Mr. Arroyo, the executive
officers whose compensation is described in this
section (the named executive officers) came to us from SBC
or BellSouth. All of our named executive officers, except for
Mr. Ritcher as described below, participate in our benefit
plans. In addition, the named executive officers, other than
Mr. Arroyo, have and will continue to have interests in
selected compensation and benefit plans of SBC or BellSouth in
which they participated prior to the time they became our
employees or in connection with joining us. As such, all
executive compensation paid by us, SBC or BellSouth to our named
executive officers is included beginning the year they become
officers of our company. Mr. Sigman became President and
CEO in November 2002. Mr. de la Vega became Chief Operating
Officer in December 2003. Messrs. Arroyo and Carbonell
became named executive officers prior to 2002.

In May 2004, Mr. Ritcher was elected, and
since then has served exclusively, as our Chief Financial
Officer; however, he remains an employee of SBC.
Mr. Ritchers compensation will be determined and paid
by SBC, giving consideration to advice and consultation from us,
and he will continue to be eligible for participation in all
employee benefit plans, policies, programs and arrangements of
which SBC is a participating employer. In lieu of the SBC
short-term and long-term compensation plan awards, SBC will pay
short-term and long-term compensation amounts consistent with
what we provide to similarly situated employees. We will
reimburse SBC for all internal and external costs and expenses
incurred by SBC that are associated with the provision of
services by Mr. Ritcher to or on behalf of us, including
(i) all compensation costs, except for long-term
compensation grants prior to May 16, 2004; (ii) all
associated taxes; (iii) all benefit plan expenses;
(iv) all business expenses incurred; (v) all
relocation costs and expenses; and (vi) all internal and
external expenses incurred by SBC for related administration of
this arrangement.

Nominating and Compensation Committee,
Committee Interlocks and Insider Participation

Executive compensation is established by our
Manager through action of its board of directors. All of the
directors of our Manager are executive officers of SBC or
BellSouth. In 2004, the board of directors established the
Nominating and Compensation Committee, with one member from each
of SBC and BellSouth. None of the directors of our Manager is
compensated by us or our Manager, nor do any of them have any
material financial or business transactions or relationships
with, or any indebtedness to, us or our Manager. During 2004,
none of our executive officers served on the compensation
committee (or equivalent), or the board of directors, of another
entity whose executive officer(s) served on our Board of
Directors or our Nominating and Compensation Committee.

Components of Compensation

There are three primary components of the
compensation structure for the senior management team: salary; a
short-term incentive award paid in cash; and a long-term
incentive award. The values of the short-term and long-term
incentive awards depend largely on the degree of success in
attaining company performance objectives.

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|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

Salary.Our
executive salary structure is intended to be competitive with
the external market. We evaluate this structure by comparing it
to a group of similar sized companies in wireless
communications, telecommunications and other general industries.
The salaries earned by the named executives for 2004 are shown
in the Salary column of the Summary Compensation
Table.

Short-Term Incentive
Award.The executive group is eligible
to receive annual cash payments under the Cingular Executive
Short-Term Incentive Plan. For 2004, the awards were based upon
performance as measured against pre-established performance
objectives, as well as individual contributions to the success
of the business. Awards can range from zero to a pre-established
maximum performance percentage times a target amount. The
short-term incentive payments awarded to each of the named
executive officers for 2004 are shown under the
Bonus column of the Summary Compensation Table.

Long-Term Incentive
Award.We provide long-term incentives
under the Cingular Long-Term Compensation Plan. These long-term
incentives may include performance units, stock appreciation
units and restricted stock units payable in cash and/or options
to purchase common stock of SBC or BellSouth. SBC and BellSouth
have stated that they do not intend to grant stock options or
awards to our officers or employees in the future and that our
officers and employees will no longer participate in their
long-term incentive plans, except to the extent of future
payments for past performance periods and grants. Long-term
compensation awards for 2004, as described in the table below
consisted of the grant date value of SBC restricted stock units
and BellSouth restricted stock units awarded by us to each named
executive officer, which are valued using the respective closing
stock prices on April 1, 2004. Additionally, a targeted
number of performance units were granted to each named executive
officer in 2004. See Long-Term Compensation Plans
for additional details. Payout amounts reflected in the
LTIP Payouts column of the Summary Compensation
Table were paid from the respective predecessor companies
long-term incentive plans.

Summary
Compensation Table

|                            |                           |                     |      |              |  |            |         |              |  |                        |           |              |  |         |         |              |  |   |           |           |  |  |       |         |  |   |         |         |  |   |         |         | 
|--------------------------- | ------------------------- | ------------------- | ---- | ------------ |  | ---------- | ------- | ------------ |  | ---------------------- | --------- | ------------ |  | ------- | ------- | ------------ |  | - | --------- | --------- |  |  | ----- | ------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                            |                           |                     |      |              |  |            |         |              |  |                        |           |             
|                            |                           |                     |      |              |  |            |         |              |  | Long-term Compensation |           |             
|                            |                           |                     |      |              |  |            |         |              |  |                        |           |             
|                            |                           |                     |      |              |  |            |         |              |  |                        |           |              |  |        
|                            |                           |                     |      | Awards       |  | Payouts    |         |             
|                            |                           | Annual Compensation |      |              |  |            |         |             
|                            |                           |                     |      | Restricted   |  | Securities |         |              |  |                       
|                            |                           |                     |      | Other Annual |  | Stock      |         | Underlying   |  | LTIP                   |           | All Other   
|                            |                           |                     |      | Salary       |  | Bonus(A)   |         | Compensation |  | Award(s)               |           | Options/SAUs |  | Payouts |         | Compensation
|Name and Principal Position |                           | Year                |      | ($)          |  | ($)        |         | (B)($)       |  | (C)($)                 |           | (#)          |  | ($)     |         | (D)($)      
|                            |                           |                     |      |              |  |            |         |              |  |                        |           |              |  |         |         |             
|Stanley T. Sigman           |                           |                     | 2004 |              |  | $          | 967,692 |              |  | $                      | 1,323,750 |              |  | $       | 760,001 |              |  | $ | 1,704,581 |           |  |  |      |         |  | $ | 863,528 |         |  | $ | 195,997 |        
|                            | President/CEO             |                     |      | 2003         |  |            |         | 900,000      |  |                        |           | 1,876,000    |  |         |         | 686,565      |  |   |           |          |  |  |       | 322,889 |  |   |         | 567,521 |  |   |         | 130,608 | 
|                            |                           |                     |      | 2002         |  |            |         | 900,000      |  |                        |           | 1,081,000    |  |         |         | 179,483      |  |   |           | 5,000,000 |  |  |       | 301,743 |  |   |         | 239,076 |  |   |         | 180,968 | 
|Ralph de la Vega            |                           |                     | 2004 |              |  |            | 495,192 |              |  |                        | 750,000   |              |  |         | 14,983  |              |  |   | 767,076   |           |  |  |      |         |  |   |        |         |  |   | 61,707  |        
|                            | Chief Operating Officer   |                     |      | 2003         |  |            |         | 410,319      |  |                        |           | 716,000      |  |         |         | 11,212       |  |   |           | 2,855,646 |  |  |       | 122,624 |  |   |         |        |  |   |         | 36,211  | 
|Peter A. Ritcher(E)         |                           |                     | 2004 |              |  |            | 347,507 |              |  |                        | 363,105   |              |  |         | 45,980  |              |  |   | 129,559   |           |  |  | 6,414 |         |  |   | 69,412  |         |  |   | 91,194  |        
|                            | Chief Financial Officer   |                     |      |              |  |            |         |              |  |                        |           |              |  |         |         |              |  |   |           |           |  |  |       |         |  |   |         |         |  |   |         |         | 
|F. Thaddeus Arroyo          |                           |                     | 2004 |              |  |            | 363,692 |              |  |                        | 454,900   |              |  |         | 8,819   |              |  |   | 254,632   |           |  |  |      |         |  |   |        |         |  |   | 6,150   |        
|                            | Chief Information Officer |                     |      | 2003         |  |            |         | 346,500      |  |                        |           | 332,250      |  |         |         | 7,590        |  |   |           |          |  |  |       | 47,542  |  |   |         |        |  |   |         | 10,368  | 
|                            |                           |                     | 2002 |              |  |            | 333,769 |              |  |                        | 303,800   |              |  |         | 109,051 |              |  |   |          |           |  |  |      |         |  |   |        |         |  |   | 12,701  |        
|Joaquin R. Carbonell III    |                           |                     | 2004 |              |  |            | 341,977 |              |  |                        | 343,500   |              |  |         | 7,064   |              |  |   | 270,012   |           |  |  |      |         |  |   |        |         |  |   | 52,521  |        
|                            | Executive Vice President  |                     |      | 2003         |  |            |         | 314,277      |  |                        |           | 286,000      |  |         |         | 74,927       |  |   |           |          |  |  |       | 50,413  |  |   |         |        |  |   |         | 129,845 | 
|                            | and General Counsel       |                     |      | 2002         |  |            |         | 292,277      |  |                        |           | 102,500      |  |         |         | 1,773        |  |   |           |          |  |  |       |        |  |   |         |        |  |   |         | 50,305  | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) | The 2004 amounts were earned under the Cingular
    Executive Short-Term Incentive Plan. Mr. Ritchers
    amount also includes $89,925 earned under the comparable SBC
    plan prior to becoming our Chief Financial Officer. The amounts
    reported in all years for Mr. Sigman include an incentive
    payment of $160,000 paid by us in connection with his employment
    agreement and

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|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | $825,000 paid by SBC in 2002 under their
    applicable short-term incentive plan. Mr. de la Vegas
    2003 amount was earned under the comparable BellSouth executive
    short-term incentive plan. The amounts reported for
    Mr. Arroyo include special bonuses of $100,000, $42,000
    ($150,000 less gross-ups paid on his 2002 bonus) and $200,000
    for 2004, 2003 and 2002, respectively, as part of his employment
    agreement.



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(B) |  | The amount reported for Mr. Sigman for 2004
    includes $410,160 for tax reimbursements, $73,556 for payment of
    dividend equivalents on long-term performance shares and
    $276,285 for perquisites, including $246,989 for the personal
    use of corporate aircraft. We require that Mr. Sigman use
    the company aircraft for all travel. The 2004 amount disclosed
    for personal use of corporate aircraft is based on the
    incremental cost to us of such use. No other named executive
    officer had perquisites and other personal benefits that, in the
    aggregate, exceeded reporting thresholds with respect to the
    applicable year. The amount reported for Mr. Ritcher for
    2004 includes $12,844 for tax reimbursements and $33,136 for
    payment of dividend equivalents on long-term performance shares.
    The amounts shown for Messrs. de la Vega, Arroyo and
    Carbonell represent tax reimbursements.
|   
|(C) |  | This item shows the grant date value of SBC
    restricted stock units and BellSouth restricted stock units
    awarded by us to each named executive officer. These restricted
    stock units will vest in full on March 1, 2007 and will be
    payable in cash based on the relative value of the referenced
    stock based on the average of the closing stock prices for the
    last 10 trading days of February 2007. At December 31,
    2004, the aggregate numbers and values of all unvested
    restricted stock units held by each named executive officer were
    as follows:                                                                                                                                                                                                                                                                                                                                                            

|                         |  |           |         |           |  |              |         |  |  |   |           | 
|------------------------ |  | --------- | ------- | --------- |  | ------------ | ------- |  |  | - | --------- | 
|                         |  | Number of |         | Number of |  | Value at    
|                         |  | SBC       |         | BellSouth |  | December 31,
|                         |  | Units     |         | Units     |  | 2004        
|                         |  |           |         |           |  |             
|Stanley T. Sigman        |  |           | 147,983 |           |  |              | 103,987 |  |  | $ | 6,703,321 | 
|Ralph de la Vega         |  |           | 73,051  |           |  |              | 83,866  |  |  | $ | 4,213,160 | 
|Peter A. Ritcher         |  |           | 2,620   |           |  |              | 2,350   |  |  | $ | 132,824   | 
|F. Thaddeus Arroyo       |  |           | 5,150   |           |  |              | 4,618   |  |  | $ | 261,050   | 
|Joaquin R. Carbonell III |  |           | 5,461   |           |  |              | 4,897   |  |  | $ | 276,818   | 



---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | These values are based on the closing prices of
    $25.77 and $27.79 of SBC and BellSouth common stock,
    respectively, on December 31, 2004. Dividend equivalents
    will be paid annually at the same rates as the dividend rate
    received by all SBC and BellSouth shareholders, respectively.
    The number of units held by Mr. de la Vega includes
    34,618 shares of BellSouth restricted stock awarded to him
    by BellSouth prior to becoming our Chief Operating Officer.



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(D) |  | Included in this category for 2004 are amounts
    for Messrs. Sigman, de la Vega, Ritcher, Arroyo and
    Carbonell for: (a) above-market interest on voluntary
    salary deferrals under nonqualified deferred compensation plans
    of $60,742, $11,771, $377, $0 and $19,223, respectively;
    (b) employer matching contributions made to certain
    employee benefit plans of $132,459, $49,936, $16,196, $6,150 and
    $30,720, respectively, and (c) life insurance premiums paid
    by the Company of $2,796, $0, $829, $0 and $2,578, respectively.
    The 2004 amount reported for Mr. Ritcher also includes a
    relocation payment of $73,792.
|   
|(E) |  | All amounts paid by SBC, as described in
     General.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



| |                        
| | -----------------------
| | Grants of Stock Options

The following table contains information
concerning the grants of stock options to Mr. Ritcher by
SBC during 2004. No other named executive officers were granted
options in 2004. SBC utilized the Black-

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|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

Scholes option pricing model to develop the
theoretical values set forth under the Grant Date Present
Value column. The named executive officer realizes value
from the stock appreciation units and stock options only to the
extent that the price of the underlying stock on the date the
officer exercises the options exceeds the price of the stock on
the grant date. Consequently, there is no assurance the value
realized by an officer will be at or near the value estimated
below.

Option Grants in 2004

|                 |  |                   |       |                |  |             |      |            |  |         |       |  |  |  |           |  |  |   |        |    
|---------------- |  | ----------------- | ----- | -------------- |  | ----------- | ---- | ---------- |  | ------- | ----- |  |  |  | --------- |  |  | - | ------ | ---
|                 |  |                   |       |               
|                 |  | Individual Grants |       |               
|                 |  |                   |       |               
|                 |  | Number of         |       |                |  |            
|                 |  | Securities        |       | % of Total     |  |             |      |           
|                 |  | Underlying        |       | Options        |  |             |      | Grant Date
|                 |  | Options           |       | Granted to     |  | Exercise or |      |            |  | Present
|                 |  | Granted           |       | Employees in   |  | Base Price  |      | Expiration |  | Value  
|Name             |  | (#)               |       | Fiscal Year(A) |  | ($/Share)   |      | Date       |  | ($)    
|                 |  |                   |       |                |  |             |      |            |  |        
|Peter A. Ritcher |  |                   | 4,381 | (B)            |  |             | 0.12 | %          |  | $       | 26.46 |  |  |  | 1/31/2014 |  |  | $ | 19,167 | (C)
|                 |  |                   | 2,033 | (D)            |  |             | 0.06 | %          |  |         | 23.74 |  |  |  | 5/30/2014 |  |  |   | 7,634  | (E)



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | Percentage is based on total options granted to
    SBC employees in 2004.                                                                                                                                                                                                                                                                                                                                    
|   
|(B) |  | Nonqualified stock options were granted to
    Mr. Ritcher prior to his election as our Chief Financial
    Officer. These options, which have an exercise price equal to
    the fair market value of SBC common stock on the date of grant,
    vest over a three-year period, with one-third of the options
    vesting on each anniversary date of the grant.                                             
|   
|(C) |  | This value was determined using a standard
    application of the Black-Scholes option pricing methodology
    using the following assumptions: volatility of 23.91%, expected
    annual dividend yield of 4.72% and a risk-free rate of return of
    3.92%, based on the options being outstanding for a 7-year term                                                                                       
|   
|(D) |  | Nonqualified stock options were granted to
    Mr. Ritcher under a stock purchase plan where middle level
    and above managers received options based on the number of SBC
    shares they purchased. These options, which have an exercise
    price equal to the fair market value of SBC common stock on the
    date of grant, vest immediately and are exercisable one year
    from the date of grant.
|   
|(E) |  | This value was determined using a standard
    application of the Black-Scholes option pricing methodology
    using the following assumptions: volatility of 23.66%, expected
    annual dividend yield of 5.27% and a risk-free rate of return of
    4.50%, based on the options being outstanding for a 7-year term.                                                                                      



| |                                       
| | --------------------------------------
| | Option/ SAU Exercises and
    Holdings

The following table provides information for the
named executive officers regarding exercises of SBC and
BellSouth options during 2004. Additionally, the table provides
the values of unexercised options and stock

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|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

appreciation units (SAUs) held on
December 31, 2004 that are based on the fair market value
of the shares of common stock of SBC and BellSouth. No SAUs were
exercised during 2004.

Aggregated Option/ SAU Exercises in
2004

and Fiscal Year End Option/ SAU
Values


|                         |  |              |         |          |  |                                 |         |                           |  |                |         |                  |  |  |         |  |  |   |         |  |  |   |           | 
|------------------------ |  | ------------ | ------- | -------- |  | ------------------------------- | ------- | ------------------------- |  | -------------- | ------- | ---------------- |  |  | ------- |  |  | - | ------- |  |  | - | --------- | 
|                         |  |              |         |          |  |                                 |         |                          
|                         |  |              |         |          |  | Number of Securities Underlying |         | Value of Unexercised     
|                         |  |              |         |          |  | Unexercised Options/SAUs at     |         | In-the-Money Options/SAUs
|                         |  | Shares       |         | Value    |  | Fiscal Year-End (#)             |         | at FY-End ($)(A)         
|                         |  | Acquired on  |         | Realized |  |                                 |         |                          
|Name                     |  | Exercise (#) |         | ($)      |  | Exercisable(B)                  |         | Unexercisable(C)          |  | Exercisable(B) |         | Unexercisable(C)
|                         |  |              |         |          |  |                                 |         |                           |  |                |         |                 
|Stanley T. Sigman        |  |              |        |          |  | $                               |        |                           |  |                | 967,219 |                  |  |  | 308,710 |  |  | $ | 6,948   |  |  | $ | 1,519,711 | 
|Ralph de la Vega         |  |              | 10,000  |          |  |                                 | 130,602 |                           |  |                | 241,851 |                  |  |  | 278,600 |  |  |   | 209,711 |  |  |   | 729,368   | 
|Peter A. Ritcher         |  |              | 10,640  |          |  |                                 | 46,966  |                           |  |                | 98,484  |                  |  |  | 29,291  |  |  |   | 27,268  |  |  |   | 24,394    | 
|F. Thaddeus Arroyo       |  |              |        |          |  |                                 |        |                           |  |                | 65,000  |                  |  |  | 47,542  |  |  |   |        |  |  |   | 233,299   | 
|Joaquin R. Carbonell III |  |              | 110,400 |          |  |                                 | 851,625 |                           |  |                | 175,356 |                  |  |  | 50,413  |  |  |   | 110,774 |  |  |   | 247,388   | 



---



|    |  |                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | Value of Unexercised In-the-Money
    Options figures are based on the year-end
    December 31, 2004, SBC common stock price of $25.77 and the
    average of the high and low price of $27.90 of BellSouth common
    stock on December 31, 2004.
|   
|(B) |  | Represents SBC or BellSouth stock options.                                                                                                                                                                                                           
|   
|(C) |  | Represents SBC or BellSouth stock appreciation
    units to be settled in cash, except for amounts related to
    Mssrs. de la Vega and Ritcher, which represent unexercised
    BellSouth and SBC stock options, respectively.                      



| |                             
| | ----------------------------
| | Long-Term Compensation Plans

The following table lists the performance units
granted in 2004 to the named executive officers under the 2004
Cingular Long-Term Compensation Plan (the LTCP Plan). The LTCP
Plan provides for incentive compensation based upon the
achievement of certain performance objectives over performance
periods that are two years or longer. For 2004, a targeted
number of performance units, valued at $50 each, were granted to
certain employees, including the named executive officers. The
determination of the actual award earned is based on the
achievement of certain company objectives regarding revenue
growth and return on capital during the three-year performance
period from 2004-2006. The actual number of performance units
that can be earned at the end of the performance period ranges
from 0 percent to 150 percent of a participants
performance unit award.

Long-Term Incentive Plans  Awards
in Last Fiscal Year

|                         |  |               |        |               |  |                                   |           |        |  |         |   |  |  |   |           |  |  |   |           | 
|------------------------ |  | ------------- | ------ | ------------- |  | --------------------------------- | --------- | ------ |  | ------- | - |  |  | - | --------- |  |  | - | --------- | 
|                         |  |               |        | Performance   |  |                                  
|                         |  | Number of     |        | or Other      |  | Estimated Future Payouts         
|                         |  | Shares, Units |        | Period Until  |  | Under Non-Stock Price-Based Plans
|                         |  | or Other      |        | Maturation or |  |                                  
|Name                     |  | Rights        |        | Payout        |  | Threshold                         |           | Target |  | Maximum
|                         |  |               |        |               |  |                                   |           |        |  |        
|Stanley T. Sigman        |  |               | 66,600 |               |  |                                   | 2004-2006 |        |  | $       |  |  |  | $ | 3,330,000 |  |  | $ | 4,995,000 | 
|Ralph de la Vega         |  |               | 29,970 |               |  |                                   | 2004-2006 |        |  |         |  |  |  |   | 1,498,500 |  |  |   | 2,247,750 | 
|Peter A. Ritcher(A)      |  |               | 5,062  |               |  |                                   | 2004-2006 |        |  |         |  |  |  |   | 253,100   |  |  |   | 379,650   | 
|F. Thaddeus Arroyo       |  |               | 9,949  |               |  |                                   | 2004-2006 |        |  |         |  |  |  |   | 497,450   |  |  |   | 746,175   | 
|Joaquin R. Carbonell III |  |               | 10,550 |               |  |                                   | 2004-2006 |        |  |         |  |  |  |   | 527,500   |  |  |   | 791,250   | 

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|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) | Represents the equivalent number and value of
    performance units awarded to Mr. Ritcher, to be paid by
    SBC, pursuant to his compensation arrangement described
    previously in  General. During 2004,
    Mr. Ritcher was also granted 19,084 performance shares by
    SBC. Each performance share is equivalent in value to one share
    of SBC common stock. At the end of the three-year performance
    period, a percentage of the performance shares earned is
    converted 50% into cash and 50% into SBC common stock. The
    number of performance shares earned is dependent upon the
    achievement of a performance objective based on return on
    invested capital. Each level of achievement of a performance
    objective is assigned a payout percentage ranging from
    0 percent to 150 percent with higher percentages
    reflecting greater performance achievement. Achievement of the
    target objective results in a 100% payout percentage.



| |                                          
| | -----------------------------------------
| | Pension and Other Retirement
    Benefits

We sponsor noncontributory pension plans that
cover almost all of our employees. The largest of these plans is
the Cingular Wireless Pension Plan, which covers the named
executive officers, except for Mr. Ritcher, and other
employees. Participants in the Cingular Wireless Pension Plan
are generally entitled to receive the greater of two pension
benefits: the Cash Balance Benefit or a grandfather benefit
based on prior plan formulae. The grandfather benefit for former
SBC employees was frozen as of May 31, 2002. The
grandfather benefit for former BellSouth employees will be
frozen effective December 31, 2005. A participants
Cash Balance Benefit is equal to the balance in the
participants cash balance account, which is made up of
(a) an opening account balance as of contribution to us at
our formation; and (b) monthly transition credits resulting
from their respective cash balance conversions ending on
May 31, 2002 for former SBC employees and December 31,
2006 for former BellSouth employees; (c) subsequent monthly
basic benefit credits equal to 5% of the participants
compensation (generally, base pay, commissions and group
incentive awards, but not individual awards); and
(d) monthly interest credits on the participants cash
balance account. The interest rate for cash balance credits is
equal to the published average annual yield for the 30-year
Treasury Bond, reset quarterly as of the middle of the preceding
quarter. All benefits under the Cingular Wireless Pension Plan
are subject to Internal Revenue Code limitations on pay used to
calculate pensions.

Certain executives are also eligible for
nonqualified pension benefits from us, SBC or BellSouth. These
nonqualified benefits are generally offset by benefits earned
under each of the qualified pension plans. The nonqualified
pension plans applicable for the named executives are described
below:

SBC offers nonqualified pension plans for
officers, including Messrs. Sigman and Ritcher, and certain
senior managers, which are neither funded by nor a part of any
other qualified pension plan of SBC. As a result of changes in
the tax laws, the original plan, known as the Supplemental
Retirement Income Plan (SBC SRIP) was frozen effective
December 31, 2004; future benefits are earned under the
2005 Supplemental Employee Retirement Plan (SBC SERP). Separate
distribution elections (annuity or lump sum) are made by the
participants for benefits accrued before 2005 (under the SBC
SRIP) and for benefits accrued on and after 2005 (under the SBC
SERP). Elections for the portion of the pension that accrues on
and after 2005, however, must be made when the officer first
participates in the Plan. Under the nonqualified pension plans,
a target annual retirement benefit is established for officers
and certain senior managers, stated as a percentage of their
annual salaries and annual incentive bonuses averaged over a
36-month period out of their final 120-month period of service.
The percentage is increased by .715% for each year of actual
service in excess of, or decreased by 1.43% for each year of
actual service below, 30 years of service. Benefits are not
offset by Social Security benefits.

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|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

BellSouth offers a nonqualified pension plan,
known as the BellSouth Supplemental Executive Retirement Plan
(BLS SERP), for officers, including Messrs. de la Vega and
Carbonell and certain senior managers, which is neither funded
by nor a part of any other qualified pension plan of BellSouth.
The plan benefit is based on years of service and is stated as a
percentage of compensation averaged over a five-year period
preceding retirement. Service accrual rates are based on years
of service as follows: 2% per year up to 20 years;
1.5% per year from 20 to 30 years; and, 1% for years
in excess of 30. Benefits under the BLS SERP formula are payable
annually for life. Benefits are offset by a Social Security
Primary Insurance Benefit payable at age 65.

The table below shows the estimated annual
pension annuity benefits payable from the combined qualified and
nonqualified pension plans based on years of service and average
annual compensation:

Pension Plan Table

($000)


|             |       |      |  |                  |                     |    |  |    |       |    |  |    |       |    |  |    |       |  |  |   |       |  |  |   |       |  |  |   |       |  |  |   |       | 
|------------ | ----- | ---- |  | ---------------- | ------------------- | -- |  | -- | ----- | -- |  | -- | ----- | -- |  | -- | ----- |  |  | - | ----- |  |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|             |       |      |  |                 
|             |       |      |  | Years of Service
|Covered      |       |      |  |                 
|Compensation |       | Plan |  | 10               |                     | 15 |  | 20 |       | 25 |  | 30 |       | 35 |  | 40
|             |       |      |  |                  |                     |    |  |    |       |    |  |    |       |    |  |   
|$            | 500   |      |  |                  | BLS SERP            |    |  | $  | 78    |    |  | $  | 128   |    |  | $  | 178   |  |  | $ | 216   |  |  | $ | 253   |  |  | $ | 278   |  |  | $ | 303   | 
|             |       |      |  |                  | SBC SERP/SRIP (55%) |    |  |    | 132   |    |  |    | 168   |    |  |    | 204   |  |  |   | 239   |  |  |   | 275   |  |  |   | 293   |  |  |   | 311   | 
|             |       |      |  |                  | SBC SERP/SRIP (65%) |    |  |    | 182   |    |  |    | 218   |    |  |    | 254   |  |  |   | 289   |  |  |   | 325   |  |  |   | 343   |  |  |   | 361   | 
|             | 750   |      |  |                  | BLS SERP            |    |  |    | 128   |    |  |    | 203   |    |  |    | 278   |  |  |   | 334   |  |  |   | 391   |  |  |   | 428   |  |  |   | 466   | 
|             |       |      |  |                  | SBC SERP/SRIP (55%) |    |  |    | 198   |    |  |    | 252   |    |  |    | 305   |  |  |   | 359   |  |  |   | 413   |  |  |   | 439   |  |  |   | 466   | 
|             |       |      |  |                  | SBC SERP/SRIP (65%) |    |  |    | 273   |    |  |    | 327   |    |  |    | 380   |  |  |   | 434   |  |  |   | 488   |  |  |   | 514   |  |  |   | 541   | 
|             | 1,000 |      |  |                  | BLS SERP            |    |  |    | 178   |    |  |    | 278   |    |  |    | 378   |  |  |   | 453   |  |  |   | 528   |  |  |   | 578   |  |  |   | 628   | 
|             |       |      |  |                  | SBC SERP/SRIP (55%) |    |  |    | 264   |    |  |    | 336   |    |  |    | 407   |  |  |   | 479   |  |  |   | 550   |  |  |   | 586   |  |  |   | 622   | 
|             |       |      |  |                  | SBC SERP/SRIP (65%) |    |  |    | 364   |    |  |    | 436   |    |  |    | 507   |  |  |   | 579   |  |  |   | 650   |  |  |   | 686   |  |  |   | 722   | 
|             | 1,250 |      |  |                  | BLS SERP            |    |  |    | 228   |    |  |    | 353   |    |  |    | 478   |  |  |   | 572   |  |  |   | 666   |  |  |   | 728   |  |  |   | 791   | 
|             |       |      |  |                  | SBC SERP/SRIP (55%) |    |  |    | 330   |    |  |    | 419   |    |  |    | 509   |  |  |   | 598   |  |  |   | 688   |  |  |   | 732   |  |  |   | 777   | 
|             |       |      |  |                  | SBC SERP/SRIP (65%) |    |  |    | 455   |    |  |    | 544   |    |  |    | 634   |  |  |   | 723   |  |  |   | 813   |  |  |   | 857   |  |  |   | 902   | 
|             | 1,500 |      |  |                  | BLS SERP            |    |  |    | 278   |    |  |    | 428   |    |  |    | 578   |  |  |   | 691   |  |  |   | 803   |  |  |   | 878   |  |  |   | 953   | 
|             |       |      |  |                  | SBC SERP/SRIP (55%) |    |  |    | 396   |    |  |    | 503   |    |  |    | 611   |  |  |   | 718   |  |  |   | 825   |  |  |   | 879   |  |  |   | 932   | 
|             |       |      |  |                  | SBC SERP/SRIP (65%) |    |  |    | 546   |    |  |    | 653   |    |  |    | 761   |  |  |   | 868   |  |  |   | 975   |  |  |   | 1,029 |  |  |   | 1,082 | 
|             | 1,750 |      |  |                  | BLS SERP            |    |  |    | 328   |    |  |    | 503   |    |  |    | 678   |  |  |   | 809   |  |  |   | 941   |  |  |   | 1,028 |  |  |   | 1,116 | 
|             |       |      |  |                  | SBC SERP/SRIP (55%) |    |  |    | 462   |    |  |    | 587   |    |  |    | 712   |  |  |   | 837   |  |  |   | 963   |  |  |   | 1,025 |  |  |   | 1,088 | 
|             |       |      |  |                  | SBC SERP/SRIP (65%) |    |  |    | 637   |    |  |    | 762   |    |  |    | 887   |  |  |   | 1,012 |  |  |   | 1,138 |  |  |   | 1,200 |  |  |   | 1,263 | 
|             | 2,000 |      |  |                  | BLS SERP            |    |  |    | 378   |    |  |    | 578   |    |  |    | 778   |  |  |   | 928   |  |  |   | 1,078 |  |  |   | 1,178 |  |  |   | 1,278 | 
|             |       |      |  |                  | SBC SERP/SRIP (55%) |    |  |    | 528   |    |  |    | 671   |    |  |    | 814   |  |  |   | 957   |  |  |   | 1,100 |  |  |   | 1,172 |  |  |   | 1,243 | 
|             |       |      |  |                  | SBC SERP/SRIP (65%) |    |  |    | 728   |    |  |    | 871   |    |  |    | 1,014 |  |  |   | 1,157 |  |  |   | 1,300 |  |  |   | 1,372 |  |  |   | 1,443 | 
|             | 2,500 |      |  |                  | BLS SERP            |    |  |    | 478   |    |  |    | 728   |    |  |    | 978   |  |  |   | 1,166 |  |  |   | 1,353 |  |  |   | 1,478 |  |  |   | 1,603 | 
|             |       |      |  |                  | SBC SERP/SRIP (55%) |    |  |    | 660   |    |  |    | 839   |    |  |    | 1,018 |  |  |   | 1,196 |  |  |   | 1,375 |  |  |   | 1,464 |  |  |   | 1,554 | 
|             |       |      |  |                  | SBC SERP/SRIP (65%) |    |  |    | 910   |    |  |    | 1,089 |    |  |    | 1,268 |  |  |   | 1,446 |  |  |   | 1,625 |  |  |   | 1,714 |  |  |   | 1,804 | 
|             | 3,000 |      |  |                  | BLS SERP            |    |  |    | 578   |    |  |    | 878   |    |  |    | 1,178 |  |  |   | 1,403 |  |  |   | 1,628 |  |  |   | 1,778 |  |  |   | 1,928 | 
|             |       |      |  |                  | SBC SERP/SRIP (55%) |    |  |    | 792   |    |  |    | 1,007 |    |  |    | 1,221 |  |  |   | 1,436 |  |  |   | 1,650 |  |  |   | 1,757 |  |  |   | 1,865 | 
|             |       |      |  |                  | SBC SERP/SRIP (65%) |    |  |    | 1,092 |    |  |    | 1,307 |    |  |    | 1,521 |  |  |   | 1,736 |  |  |   | 1,950 |  |  |   | 2,057 |  |  |   | 2,165 | 

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|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

The table below presents the following
information for each named executive officer: applicable SERP/
SRIP; average annual compensation as of December 31, 2004
based on the terms of the applicable SERP/ SRIP; and completed
years of service as of December 31, 2004. Since the covered
compensation is based on the provisions of the applicable
nonqualified plan, the amount below will differ from the salary
and bonus amounts set forth in the Summary Compensation Table.

|                         |  |      |                            |              |  |          |         |  |  |  |    | 
|------------------------ |  | ---- | -------------------------- | ------------ |  | -------- | ------- |  |  |  | -- | 
|                         |  |      |                            | Covered      |  |         
|                         |  |      |                            | Compensation |  | Years of
|Name                     |  | Plan |                            | ($000)       |  | Service 
|                         |  |      |                            |              |  |         
|Stanley T. Sigman        |  |      | SBC SERP/SRIP (65% target) |              |  | $        | 2,259.3 |  |  |  | 39 | 
|Ralph de la Vega         |  |      | BLS SERP                   |              |  |          | 680.2   |  |  |  | 30 | 
|F. Thaddeus Arroyo       |  |      | N/A                        |              |  |          | 205.0   |  |  |  | 3  | 
|Peter A. Ritcher         |  |      | SBC SERP/SRIP (55% target) |              |  |          | 519.0   |  |  |  | 17 | 
|Joaquin R. Carbonell III |  |      | BLS SERP                   |              |  |          | 489.0   |  |  |  | 24 | 

Mr. Arroyo is not a participant in a
nonqualified pension plan. Based on three years of service as of
December 31, 2004, Mr. Arroyos annual pension
benefit, based on a retirement date of December 31, 2004,
commencing at age 65 from the Cingular Wireless Pension
Plan, is $14,646.



| |                           
| | --------------------------
| | Agreements with Management

Stanley T. Sigman.In connection with his election as President and Chief Executive
Officer of the Company, Mr. Sigman and Cingular agreed to
the compensation arrangement summarized below:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | base pay of not less than $900,000 per year;                                                                                                                                                                                                                                                                                                                                                                                                                                        
| 
| | short-term award target of not less than
    $1,144,000 per year, which shall be paid subject to
    achievement of performance criteria;                                                                                                                                                                                                                                                                                                                                           
| 
| | long-term award target of not less than
    $5,000,000 per year, which shall be paid subject to
    achievement of performance criteria of the LTCP Plan;                                                                                                                                                                                                                                                                                                                           
| 
| | a retention benefit valued on date of grant at
    $5,000,000 and payable in cash, unless terminated for cause or
    by retirement or resignation, at the end of three years (subject
    to accelerated vesting in the case of death, permanent
    disability or termination by us other than for cause), in an
    amount giving effect to the weighted (at 60/40) stock price
    performance of, and dividends on, SBC and BellSouth common stock
    over the vesting period;
| 
| | annual incentive cash payments on
    November 24, 2002, 2003 and 2004 of $160,000 if then
    employed by us;                                                                                                                                                                                                                                                                                                                                                                      
| 
| | enhanced pension benefits to be accrued under the
    SBC SRIP; and                                                                                                                                                                                                                                                                                                                                                                                                                 
| 
| | Georgia and federal income tax gross-ups on
    designated compensation payments.                                                                                                                                                                                                                                                                                                                                                                                                   

Thaddeus Arroyo.Pursuant to a retention and separation payment agreement, we
have agreed to pay Mr. Arroyo:



|  |                                                                                                                                                                                                                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a one-time retention payment of $400,000 if
    Mr. Arroyo remains employed with us with a satisfactory
    performance rating through September 2006 (with a pro-rated
    amount payable if his employment terminates prior to September
    2006 due to death, permanent disability or involuntary
    termination, other than for cause);
| 
| | a separation payment of one times salary plus
    standard bonus, payable if involuntarily terminated, other than
    for cause; and                                                                                                                                                                                                         
| 
| | payment of a pro-rated bonus for the year of
    termination based upon actual company results and payable at the
    normal bonus payment date, unless involuntarily terminated for
    cause.                                                                                                                                              

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|Item 11. | Executive Compensation

In February 2005, Mr. Arroyo entered into a
separate retention agreement with us, whereby we agreed to pay
Mr. Arroyo $150,000 if he remains employed with us with a
satisfactory performance rating through September 2007 (with a
pro-rated amount payable if his employment terminates prior to
September 2007 due to death, permanent disability or involuntary
termination, other than for cause).

Ralph de la Vega.In
connection with his joining our company, Mr. de la Vega and
we agreed to the compensation package summarized below:



|  |                                                                                                                                                                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2004 base pay of $500,000;                                                                                                                                                                                                                                                                                                
| 
| | 2004 short-term award target of $500,000;                                                                                                                                                                                                                                                                                 
| 
| | 2004 long-term award target of $2,250,000; and                                                                                                                                                                                                                                                                            
| 
| | a retention benefit valued on the date of grant
    at $2,500,000 in the form of restricted stock units which shall
    vest 100% on December 31, 2006, giving effect to the
    weighted (at 60/40) average stock price performance of, and
    dividends on, SBC and BellSouth common stock over the vesting
    period.

In addition, Mr. de la Vega and BellSouth
entered into a transition agreement providing certain retention
incentives and making modifications to certain benefits to which
he was entitled as a BellSouth executive officer. The agreement
provides for:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the payment by BellSouth to him of two times base
    pay in effect on the date of termination from us plus two times
    the standard bonus award for the year in which the termination
    occurs, if we initiate termination other than for cause, or if
    Mr. de la Vega initiates termination from us for good
    reason and BellSouth does not offer him a comparable position at
    BellSouth to which to return; and
| 
| | continued participation in the
    BellSouth SERP. BellSouth will continue to accrue benefits
    under the SERP recognizing service and compensation
    attributable to the period of service with us.                                                                                                                                                                                                                        



|         |                                                                                                       
|-------- | ------------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder
    Matters

SBC and BellSouth, through their respective
wholly-owned subsidiaries, own approximately 60% and 40%
ownership interests in us, and Cingular Wireless Corporation,
our Manager, owns a de minimisownership interest in us.
Our directors and officers do not own any interest in us.



|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

We have provided below a summary of the
significant agreements that we have executed with SBC or
BellSouth, or one of their respective subsidiaries, or that
relate to our formation. These descriptions are not complete and
only summarize the material terms of the agreements.

Our Limited Liability Company
Agreement

Our limited liability company agreement governs
our management and operations. Its parties are certain SBC and
BellSouth entities and our Manager. Their economic interests in
us are represented by units.

Our Manager has two authorized classes of common
stock:



|  |                                                                                                                                                                                                                                                                                                                          
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Class A common stock, par value
    $0.01 per share, which entitles the holder to one vote per
    share and generally has voting rights identical to those of
    holders of Class B common stock, except for the low-vote
    structure and the differences in the right to vote for directors
    described below; and

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|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions



|  |                                                                                                                                
|- | -------------------------------------------------------------------------------------------------------------------------------
| | Class B common stock, par value
    $0.01 per share, which entitles its holder to ten votes for
    each underlying unit in us.

Of the two outstanding shares of Class B
common stock, one share is held by SBC and the other share is
held by BellSouth. Our Manager also has six billion shares of
Class A common stock authorized, none of which are
currently outstanding. In addition, our Manager has one billion
authorized shares of preferred stock, issuable in one or more
series. However, no shares are currently outstanding.

Our structure gives SBC and BellSouth equal
control of our management and ownership interests of
approximately 60% and 40%, respectively. It also gives us
the flexibility to raise equity in the capital markets. If we
wish to raise new equity, our Manager would need to obtain the
consent of its strategic review committee, then sell shares of
its Class A common stock and contribute the net proceeds to
us in return for units. Our parents may only sell their equity
interests as described in  Transfers of
LLC Units and Common Stock below.

Our Management.Our
management is vested in Cingular Wireless Corporation, whose
powers are established by the terms of its amended and restated
certificate of incorporation, which we refer to as the
Managers charter. As our Manager, that
corporation has control over all of our affairs and
decision-making. The same persons are officers of both us and
our Manager, but our Manager has no employees of its own.
Operational and administrative decisions and the day-to-day
management of our affairs are accomplished at Cingular and at
the various operating entities that we own. Substantially all
important decisions must be approved by the Managers
strategic review committee, which is currently comprised of all
of its Class B directors. At all times, as long as any
shares of Class B common stock remain outstanding, the
Class B common stockholders will be entitled to control the
Managers board of directors, even if only one of SBC or
BellSouth holds Class B common stock. Substantially all
important decisions made by our Manager are subject to the
affirmative vote of at least two-thirds of the strategic review
committee of its board of directors. These decisions include
approval of a business plan, appointment of executive officers,
capital calls, declaration of dividends, purchases of new
technology, public stock offerings, changes to the
Managers certificate of incorporation and by-laws and many
others. SBC and BellSouth each may elect three members to the
board of directors so long as each remains a holder of
Class B common stock of the Manager and holds 10% or more
of the sum of:



| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | (1) the total number of our units
    outstanding (excluding units owned by our Manager); and                    
|
| | (2) shares of our Managers
    Class A and Class B common stock outstanding
    (excluding any treasury shares).

Deadlocks between the Class B directors of
SBC and those of BellSouth will be resolved by the chief
executive officers of SBC and BellSouth. In the event of an
underwritten public offering of shares of Class A common
stock, our Managers board will appoint one Class A
director as an additional member of the strategic review
committee. SBC and BellSouth have agreed in a stockholders
agreement to vote their Class B common stock in favor of
any matter approved by the strategic review committee.

Scope of our
Business.The limited liability
company agreement and our Managers charter generally limit
our business to the provision in the 50 U.S. states, the
District of Columbia, the U.S. Virgin Islands, the
Commonwealth of Puerto Rico and 13 Caribbean countries of mobile
wireless voice and data services that use licensed radio
frequencies for the provision of cellular service, PCS service,
wireless data service, satellite services and related services.
In Puerto Rico and the U.S. Virgin Islands, we may also
conduct paging services.

Network Preferences.When we or our subsidiaries require network services of wireline
carriers to provide service in the incumbent service territories
of SBC and BellSouth, we and our subsidiaries must use their

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|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

network services, except where we and our
subsidiaries would be materially disadvantaged to do so and then
must use such network services to the maximum extent possible
without being disadvantaged. For purposes of the limited
liability company agreement, the incumbent service territory of
SBC consists of the states of California, Nevada, Connecticut,
Texas, Missouri, Arkansas, Oklahoma, Kansas, Illinois, Indiana,
Ohio, Michigan and Wisconsin, and the incumbent service
territory of BellSouth consists of the states of Georgia,
Florida, South Carolina, North Carolina, Alabama, Mississippi,
Kentucky, Louisiana and Tennessee.

In addition, SBC and BellSouth may not market or
sell mobile wireless products and/or services other than ours.
However, this prohibition does not prevent them from:



|  |                                                                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | continuing to market and sell wireless services
    other than ours to customers who were joint billing customers as
    of October 2, 2000;                                                                 
| 
| | allowing our competitors to bundle and sell
    SBCs and BellSouths products and services together
    with such competitors wireless services;                                                           
| 
| | marketing and selling fixed wireless voice and
    data products other than ours; and                                                                                                                        
| 
| | marketing and selling wireless services other
    than ours in geographic areas designated by the FCC, which
    include the entire U.S., except for PCS service offered in the
    Gulf of Mexico, in which:



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | neither we nor our subsidiaries provide wireless
    services pursuant to FCC licenses; or
|
| |  | Salmon PCS does not provide wireless services
    pursuant to FCC licenses.               

Competition.SBC and
BellSouth are generally not permitted to compete with us
regarding mobile wireless products and/or services, as described
under the exclusivity provisions above. However, SBC
and BellSouth may compete with each other and us to the extent
described above and with respect to resale and packaging of
wireless services. SBC and BellSouth may also act as our agents,
and may resell our services, as described below under
 Wireless Agency Agreements and
 Resale Agreements.

Volume Discounts.We
must use reasonable best efforts to offer to SBC and BellSouth
any vendor volume discounts available to us, and SBC and
BellSouth must use reasonable best efforts to offer to us or to
our subsidiaries or Salmon, any vendor or volume discounts
available to them.

Change of Control.If a company with a mobile wireless business acquires control of
SBC or BellSouth and a regulatory conflict results, that company
must dispose of any resulting overlapping properties, which may
include its interest in us, and we would have no obligation to
make a disposition of any of our properties or to take any other
action to eliminate any resulting overlaps or regulatory
conflicts. A change of control, (as defined), of SBC or
BellSouth would occur if any person becomes the beneficial owner
of voting securities of that company resulting in the acquiring
person having the power to cast at least 50% of the votes for
the election of directors of that company.

Divestiture of Wireless
Business.In general, SBC, BellSouth
and their subsidiaries must divest any domestic mobile wireless
businesses they own, other than wireless interests that, because
of insubstantial economic or passive management interests, are
considered de minimis.

Divestitures would be carried out as follows:



|  |                                                                                                                                                                                                                      
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | if SBC or BellSouth owns and controls a mobile
    wireless business and has the power to control its disposition,
    it would be required to offer the wireless business to us before
    selling to a third party.

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | if SBC or BellSouth owns a mobile wireless
    business but cannot offer it to us because it cannot control its
    disposition, it would be required to dispose of the wireless
    business or reduce its ownership and/or management interest
    therein, such that the wireless business becomes a de
    minimis interest.                                                                                                                                                                                 
| 
| | if the ownership of the mobile wireless business
    requires a disposition of licenses under applicable law that
    would be material to SBC or BellSouth, then that company may,
    but is not required to, sell the wireless business to us but may
    instead transfer all of its units and our Managers
    Class A common stock through a spin-off or split-off or
    sale to third parties in accordance with the procedures
    described under Transfers of LLC Units and Common
    Stock below.

Distributions.Except as described below, distributions by us require the
consent of all of our members and no member is entitled to
withdraw any portion of its capital account without the consent
of the other members. We will make periodic distributions to our
members on a pro rata basis in an amount equal to the greatest
of each members taxes (calculated using the highest
corporate marginal tax rate as if we were a corporation for
U.S. federal, state and local income tax purposes) as a
result of our operations due for the fiscal quarter for which
estimated income tax payments are due, divided by the
members percentage interests in us. In addition, we will
distribute to our members at the end of a fiscal year, on a pro
rata basis in accordance with each members percentage
interest in us, an amount equal to the excess of the greater of:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                      
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 50% of our excess cash; and                                                                                                                                                                                                                                                                                                                                                                                        
| 
| | the greatest of each members taxes
    (calculated using the highest corporate marginal tax rate as if
    we were a corporation for U.S. federal, state and local
    income tax purposes) resulting from allocations of tax items
    from us for the preceding fiscal year, divided by the
    members percentage interest in us over the amount of tax
    distributions made with respect to that fiscal year.

Excess cash means, with respect to
any fiscal year, the excess, if any, of:

(A) the sum of (x) the amount of all
cash received by us (including any amounts allocated to our
subsidiaries) during such fiscal year and (y) any cash and
cash equivalents held by us at the start of such fiscal year,
over

(B) the sum of (x) all cash amounts
paid or payable (without duplication) in such fiscal year
incurred by us (including any amounts allocated to our
subsidiaries) and (y) the net amount of cash needs for us
set forth in our budget for the following fiscal year.

The amount of the tax distributions to be made
regarding the federal estimated income tax payment on September
15 of a year will be adjusted for the amount by which the total
of the quarterly tax distributions for the prior fiscal year was
less than or exceeded the amount that would have been
distributed had our members taxes been calculated using
our final results for the prior fiscal year, as opposed to using
estimates.

Our Manager intends to reinvest any funds
distributed in excess of those it needs to pay taxes. The
limited liability company agreement does not provide a mechanism
for additional capital contributions by our Manager, other than
capital calls for pro rata contributions by all of our members.
Accordingly, a reinvestment of distributions that our Manager
receives from us in exchange for an increased interest in us
will require the approval of all of our members, in addition to
the approval of our Managers strategic review committee.
See Member Loans below.

Exchange of LLC Units and Transfer and
Conversion of Shares of Class B Common
Stock.Each of our members may
exchange any or all of its units for our Managers
Class A common stock on a one-for-one

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basis. Our Manager is required to acquire a
number of our units corresponding to any shares of Class A
common stock it issues.

If either SBC or BellSouth wishes to transfer its
shares of our Managers Class B common stock, except
for permitted transfers described under
 Transfers of LLC Units and Common Stock
below, it is required to convert those shares of Class B
common stock into shares of our Managers Class A
common stock. Shares of Class B common stock may be
converted into shares of Class A common stock at any time.
If either SBC or BellSouth reduces its total ownership to less
than 10% of the total outstanding shares, that party
must convert its remaining shares of Class B common stock
into Class A common stock, and it loses its Class B
directors on our Managers board and strategic review
committee. Because of the economic equivalence with units, the
limited liability company agreement bases several of its
provisions on the concept of total outstanding
shares, which means the sum of the total number of shares
of our Managers Class A and Class B common stock
issued and outstanding and the total number of our units
outstanding, excluding units owned by our Manager.

Transfers of LLC Units and Common
Stock.The limited liability company
agreement generally prohibits transfers of units or common stock
of our Manager (collectively referred to as
securities), except transfers with the consent of
each member owning more than 10% of the total outstanding
shares. However, there are several exceptions to this general
rule for transfers by SBC and BellSouth, including:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | transfers of our Managers Class A
    common stock in a broad public offering of Class A common
    stock underwritten on a firm commitment basis, including
    transfers in any offering;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| 
| | each member may transfer our Managers
    Class A common stock or the stock of a company that owns
    units or the stock of a company that owns Class A common
    stock in our Manager in up to two spin-offs or split- offs. A
    spin-off would be a wide, SEC-registered
    distribution of units or Class A common stock of our
    Manager or of all of the equity securities of a subsidiary of a
    member that owns units or Class A common stock of our
    Manager to all of the common stockholders of a series or class
    of the member or its ultimate parent. In a
    split-off, each such common stockholder would be
    offered the right to exchange common stock of our members or
    their ultimate parent entities for our Managers
    Class A common stock or the stock of a subsidiary of the
    member that owns units or our Managers Class A common
    stock, which exchange offer would also be widely distributed and
    registered with the SEC. Spin-offs and split- offs can involve
    the sale of all or a portion of a members
    interest; and
| 
| | a sale of all, but not less than all, of a
    members units and any of our Managers common stock
    to third parties, subject to, among other things, a right of
    first refusal and a requirement that the third-party or its
    ultimate parent become a party to the limited liability company
    agreement and the stockholders agreement in the place of
    the selling party. Upon any transfer of all of SBCs or
    BellSouths units, the transferring member will have no
    continuing rights or obligations under the limited liability
    company agreement, but will remain bound by the terms of any
    ancillary operating agreements it entered into in accordance
    with the terms of those agreements.                                                                                                                                                                                                                                                                                                                                                               

Withdrawal of a
Member.A member automatically ceases
to be a member of us when it no longer owns any units.

Preemptive Rights.If our Manager issues shares of its Class A common stock
solely for cash, except for issuances in a public offering
underwritten on a firm commitment basis or pursuant to the
exercise of options granted under employee benefit plans, each
member has the right to purchase from us a number of units such
that its percentage ownership in us will not be reduced.

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Incentive Plans.If
our Manager issues any Class A common stock pursuant to any
employee benefit plan of our Manager, we will issue one unit to
our Manager for each share issued by it and we will receive the
net proceeds for the shares that were received by our Manager.

Tower Transactions.We lease or pay a monthly fee for the maintenance of the tower
or the use of the tower space on which many of our antennas are
located, including the antennas, microwave dishes and other
wireless equipment, together with the land surrounding the
tower, instead of owning or controlling the tower. Before
contributing their wireless properties to us, SBC and BellSouth
each entered into separate transactions with different tower
management companies to lease on a long-term basis many of their
communications towers and related assets to SpectraSite Inc.
(formerly SpectraSite Holdings, Inc.) in the case of SBC, and
Crown Castle International, in the case of BellSouth. In
connection with these transactions, SBC and BellSouth entered
into master leases to sublease portions of their towers in
exchange for a monthly rental or site maintenance payment and/or
reserved antenna space on the towers. Crown Castle is generally
required to build, manage, maintain and remarket, including to
competitors, the remaining space on future towers on which our
antennas will be located. With respect to the towers to be built
in the markets where SpectraSite is managing sites, we plan to
hire different tower companies to perform these functions. See
Note 19 to our consolidated financial statements for more
information on communications tower transactions with SBC and
BellSouth.

Stockholders Agreement

There are six Class B directors of the
Manager. Under a stockholders agreement, each of SBC and
BellSouth has agreed to vote shares beneficially owned by it for:



|  |                                                                                                                                                                                                                                                                                                                                                            
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the election of the Class B directors
    nominated by each of SBC and BellSouth, for so long as each such
    party is then entitled to have its nominees elected as
    Class B directors;                                                                                                                                                               
| 
| | following any such issuance of Class A
    common stock of our Manager, the election of one independent
    director to our Managers board of directors selected by
    SBC and the election of one independent director selected by
    BellSouth, for so long as each such party is then entitled to
    have its nominees elected as Class B directors;
| 
| | the removal of any Class B director as
    determined by the stockholder who nominated that director;                                                                                                                                                                                                                                                      
| 
| | the appointment of a new Class B director
    upon any vacancy of a Class B directorship on the board or
    any committee of our Managers board, as determined by the
    stockholder who nominated the Class B director whose
    departure caused the vacancy; and                                                                                     
| 
| | approval of any matter submitted to the
    stockholders of our Manager that has been previously approved by
    the strategic review committee of our Manager.                                                                                                                                                                                            

In the event of the issuance of Class A
common stock of our Manager, each of SBC and BellSouth shall be
entitled to nominate one person to serve as an independent
director. If there is an initial public offering of Class A
common stock, Class A stockholders will be entitled to
elect three independent directors. SBC, BellSouth and our
Manager have agreed that one of the independent directors shall
be nominated by SBC and one by BellSouth. Within 12 months
following the closing of such offering, a third independent
director will be nominated by our Managers board of
directors. Our Manager, which is also a party to the agreement,
has agreed that it will use its best efforts to cause the
holders of Class A common stock to vote in favor of the
nomination as independent directors on the board of the nominees
of SBC and BellSouth. In addition, SBC and BellSouth have agreed
that the chairman of our Managers board shall, for so long
as SBC and BellSouth together hold at least 50% of the total
voting power, other than for the election of directors, be
elected from among the Class B directors nominated by SBC
and BellSouth.

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The agreement contains transfer restrictions with
respect to the transfer of a stockholders Class A and
Class B common stock substantially similar to those set
forth above under  Our Limited Liability
Company Agreement  Transfers of LLC Units and Common
Stock. Conversions of Class B common stock into
Class A common stock are not considered transfers. In the
event of a transfer, the stockholders have agreed that the party
to whom the shares are transferred will become a party to the
stockholders agreement. In addition, no stockholder may
transfer any of its Class B common stock unless it
transfers all of the shares it holds to the same person.

Marketing, New Products and Services, Marks
and Intellectual Property

As specified in more detail under separate
agreements that are described below, our limited liability
company agreement sets out the following principles:



|  |                                                                                                                                                                                                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | we have primary responsibility for marketing our
    products and services;                                                                                                                                                                                                             
| 
| | SBC and BellSouth may market our products and
    services as agents and resellers, as further specified in the
    agency and resale agreements that are described below;                                                                                                              
| 
| | with respect to intellectual property other than
    the SBC and BellSouth marks, consisting of patents, trade
    secrets, copyrights, technology and know-how, we have entered
    into intellectual property agreements with SBC and BellSouth and
    certain of their subsidiaries;
| 
| | we may create new products and services and
    associated intellectual property rights; and                                                                                                                                                                                            
| 
| | we have agreed that we may in our sole discretion
    grant each of SBC and BellSouth licenses in the intellectual
    property that we are developing or that we acquire after
    October 2, 2000.                                                                                    

Intellectual Property

With respect to intellectual property consisting
of patents, trademarks, trade secrets, copyrights, technology
and know-how, we have entered into intellectual property
agreements with SBC and BellSouth and certain of their
subsidiaries, as described in more detail below. Moreover, we
may create new products and services and we will own the
associated intellectual property rights.

Intellectual Property License
Agreements.We have granted SBC and
BellSouth perpetual, royalty-free, non-exclusive licenses to use
certain technology, the ownership of which was transferred by
BellSouth and SBC to us at the contribution closing, and to sell
any products that are covered by that technology and certain
other rights necessary for our parents to utilize the technology
they transferred to us in order to continue their business
without interruption. Similarly, SBC and BellSouth have each
granted us a perpetual, royalty-free, non-exclusive license to
certain copyrights, technology and know-how, which were not
transferred to us at the contribution closing but are used in
the operation of our business, as well as patents and patent
applications.

Trademark License
Agreements.SBC and BellSouth have
granted us royalty-free, non-exclusive licenses to use their
respective trademarks as part of Cingulars tag line in
advertising our products and services.

Intellectual Property Licensing Support
Agreement.We have entered into a
Master Agreement with BellSouth in which we will assist each
other in licensing our respective intellectual property and
technology to third parties. Each transaction will comprise a
separate agreement under this Master Agreement and will include
an allocation of monetary consideration received from such
transactions.

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Wireless Agency Agreements

Under our wireless agency agreements with
subsidiaries of SBC and BellSouth, such subsidiaries and any of
their affiliates that make an election to do so act as
authorized agents exclusively on our behalf for the sale of
wireless services to customers in SBCs and
BellSouths respective incumbent service territories. We
are free to contract with other agents for wireless services in
both of our parents incumbent service territories,
including retailers and other distributors. All customers
contracted through SBC and BellSouth agents are our own
customers, except where the agents sell packages, in which case
a customer is a customer of one of the agents for all portions
of the package other than our wireless services. All affiliates
of SBC and BellSouth may act as agents for us and, when electing
to act as agents, will be bound by one of the wireless agency
agreements. Each agent has agreed that it will not, directly or
indirectly, offer or promote wireless services of our
competitors in the agents service territory; however,
services typically referred to as reflex paging,
which is a two-way messaging service that adds a response
channel to traditional pager devices, is not considered a
competing service for these purposes. See Factors Relating
to Our Arrangements with SBC and BellSouth for further
information on wireless data services.

Each agent may elect to cease acting solely as
our agent and begin to act as a reseller under a resale
agreement, as described below. The election has to be made for
all package customers, but does not affect an agents right
to act as our agent in selling wireless services that are not
included in a package. Package customers are those customers
that buy combinations of wireless services and other
communications services offered by our parents. In addition, the
agent has a corresponding right to choose to cease acting as
agent with respect to national accounts.

Each agent has a unilateral right of termination.
We may terminate the agreement with respect to any type of
wireless service in the event of a change in the law relating to
that type of wireless service that materially and adversely
impacts our ability to conduct our business in an agents
service territory. We may also terminate with respect to a
specific wireless service if we do not get regulatory approval
to sell that service in an agents service territory. Each
wireless agency agreement also terminates upon breach, mutual
agreement of the parties or on December 31, 2050. Once the
agreement terminates, a former agent still has the rights under
the resale agreement described below and may sell within its
service territory wireless services that are not part of a
package. In addition, in the event an agent terminates the
agreement because we are in breach, the former agent would have
the right to offer competing service purchased from third
parties as an agent or reseller for those third parties. Upon
termination, we may offer any communications services of the
types that were previously exclusively offered through our
parents, network services or other services bought from one of
the agents or from third parties.

The wireless agency agreements provide that the
agents receive a commission from us for each new customer
enrolled by the agent in its service territory, which varies
depending on the average three-month churn rate. Where we,
instead of the agents, provide handsets and other equipment, we
only pay a commission. In addition, the fees may be different
where we participate in the sales process. Furthermore, we pay
residual compensation supplementing the commissions equal to a
percentage rate multiplied by monthly charges to the customer
from accessing and using our network, but only where a customer
has completed a minimum of 180 days of service. Pursuant to
the agency agreements, we paid $67 million for the year
ended December 31, 2004.

Resale Agreements

We agreed to sell to SBC and BellSouth and their
affiliates, as resellers, both existing and future wireless
services and features providing access to our wireless systems
or any wireless services to which we have access under roaming
agreements. The resellers will resell those services to their
customers, both

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separately and packaged with other communications
services. The reseller may sell any new service offerings that
we develop both in its own service territories and outside of
that service territory. We are not required to provide any
customer service or billing services to the resellers
users.

Generally, the resellers may only sell our
wireless services outside their own service territory. However,
if the reseller terminates its wireless agency agreement, as
described above under Wireless Agency Agreements, it
may resell our wireless services in its respective service
territories. Each agreement terminates on October 2, 2050
or upon mutual agreement of the parties.

Under the resale agreements, we charge the
resellers a fixed monthly charge per wireless customer. In
addition, the resellers also pay charges based on usage of our
network and separate charges for roaming and a number of other
services. Neither SBC nor BellSouth is acting as a reseller nor
had any revenues from these agreements in 2004.

Contribution and Formation Agreement

We entered into an amended and restated
contribution and formation agreement with SBC and BellSouth
dated as of April 4, 2000, governing the contributions that
were made to us on October 2, 2000 and some other
contributions that were scheduled to be made later.

We, our subsidiaries and other affiliates and our
and their directors, officers, employees, shareholders and
agents may seek indemnification for breaches of representations
and warranties made by SBC or BellSouth in the contribution
agreement, subject to certain thresholds and deductibles. The
indemnification is subject to the following limitations:



|  |                                                                                                                                                                                                                                                                                                                                                                                             
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | any indemnifiable losses are subject to a minimum
    threshold of $2 million for individual losses, and only the
    amount in excess of that amount will be deemed a loss;                                                                                                                                                                                                                
| 
| | any breaches that relate to matters set forth on
    the respective partys disclosure schedule shall not be
    deemed a loss until the amount of loss exceeds $4 million;                                                                                                                                                                                                                 
| 
| | a party will not be liable for an indemnifiable
    loss until the total amount of the losses exceeds
    $250 million. For the purpose of calculating this
    deductible, our losses and those of SBC and BellSouth may not be
    counted twice for the same breach. A party is only liable for
    the amount of an indemnifiable loss in excess of the
    $250 million deductible; and
| 
| | the maximum that SBC or BellSouth must pay for
    indemnifiable losses is $3 billion. Breaches of the
    representations on capitalization, subsidiaries, financial
    statements, taxes, brokers and finders and after-acquired
    properties are not subject to this limitation.                                                                                                      

Each partys representations generally
expired on April 2, 2002, except those representations
relating to:



|  |                                                                                                                                                                                                                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | tax matters, which survive until the expiration
    of the applicable statute of limitations;                                                                                                                                                                                                                               
| 
| | environmental matters, which survived until
    October 2, 2003; and                                                                                                                                                                                                                                                        
| 
| | organization, good standing and qualification;
    capitalization; subsidiaries; corporate authority and approval;
    brokers and finders; after acquired properties; and
    BellSouths representations relating to the value of
    certain credits granted to BellSouth by Ericsson, which have no
    expiration date.

There were no significant payments under this
agreement during the years ended December 31, 2003 and 2004.

As provided for in the Contribution and Formation
Agreement between us, SBC and BellSouth, additional
contributions of wireless operations and assets in certain
markets were made during 2001. The contribution

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by SBC of wireless operations and assets in the
Arkansas markets, or an equivalent amount in cash if such assets
are not contributed, was still pending as of December 31,
2004. Until such time as the contribution is made, we continue
to manage the properties for a fee. Fees received for managing
the Arkansas markets for the year ended December 31, 2004
were $40 million.

Registration Rights Agreements

Our Manager has granted registration rights to
SBC and BellSouth through which they may require our Manager to
register under the Securities Act shares of its Class A
common stock issued or issuable to them. These registration
rights expire one year after a holder ceases to hold at least
10% of the total outstanding shares.

Under the registration rights agreement, our
Manager is required to use its best reasonable efforts to
register any of the shares of its common stock for sale in
accordance with the intended method of disposition, subject to
customary deferral rights. Each of SBC and BellSouth will have
the right to demand two registrations in any calendar year, but
no demand may be made unless the shares to be registered
(1) constitute at least 1% of our Managers
Class A common stock outstanding, or (2) have a market
value on the demand date of at least $250 million. In
addition, SBC and BellSouth have the right to include their
shares in other registrations of our Managers equity
securities other than an initial public offering and offerings
on Form S-4 or S-8 and other than in connection with rights
offerings or dividend reinvestment plans, subject to customary
cutback provisions. However, SBC and BellSouth are cut back only
after all other holders, including holders exercising their own
demand rights, are cut back. SBC and BellSouth may also
piggyback on the demand registration of another holder, but will
be subject to the cutback provisions applicable to demand
registrations, pursuant to which the securities to be registered
by the demand holders will be considered first, then the
securities to be registered by our Manager and last, the
securities of the holder piggybacking on the demand registration.

Once our Manager is eligible to file a shelf
registration statement on Form S-3, it is required to file
a shelf registration statement if so requested by SBC or
BellSouth and to use its reasonable best efforts to have it
declared effective and to keep it effective until the earlier of
the date on which the registering holder no longer holds any of
our common stock or the date on which its common stock may be
sold under Rule 144(k). As long as our Manager has a shelf
registration statement outstanding, it is not required to file
additional demand registration statements, provided that the
number of securities to be registered can be sold under the
shelf.

In addition, the agreement provides that our
Manager is required to pay all registration expenses, including
all filing fees and our fees and expenses, other than
underwriting discounts and commissions and any transfer taxes
incurred by the holders. Customary indemnification and
contribution provisions would be applicable to any registered
sale.

Interconnection and Long Distance
Agreements

We are also a party to local interconnect and
long distance agreements with subsidiaries of SBC and BellSouth.
Pursuant to these agreements, we incurred expenses of
$927 million for the year ended December 31, 2004.
Additionally, we purchase telecommunications and other related
services from SBC and BellSouth. We incurred expenses of
$97 million for these services for the year ended
December 31, 2004. We had purchase commitments to SBC,
BellSouth and their affiliates of $258 million for
dedicated leased lines used to provide interconnection services
and $142 million for telecommunications and other services
as of December 31, 2004.

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|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

SNET Diversified Group Name Delivery Service
Agreement

We and SNET Diversified Group (SNET DG), an
affiliate of SBC, entered into an agreement in October 2001 to
provide Calling Name Delivery (CNAM) service and to receive
a share of the fees generated by the provision of this service.
CNAM service allows Local Exchange Carrier (LEC) customers
with caller ID to view the name of a Cingular customer calling
an LEC customer. LECs pay a fee to SNET DG each time a customer
uses this service, which SNET DG will share with us on a
percentage basis, beginning at 50% of revenues, and increasing
to a maximum of 65%, with the addition of customers and/or
additional markets adding CNAM service. For the year ended
December 31, 2004, we recorded approximately
$14 million in revenue from SNET DG under this agreement.

Member Loans

A portion of our capital structure consists of
subordinated member loans payable to SBC and BellSouth in the
principal amounts of approximately $5.8 billion and
$3.8 billion, respectively. The loans have an interest rate
of 6% and a stated maturity of June 30, 2008.

Effective August 1, 2004, we entered into a
revolving credit agreement with SBC and BellSouth for them to
provide unsubordinated short-term financing on a pro rata basis
at an interest rate of LIBOR plus 0.05% for our ordinary course
operations. The agreement provides that in the event that we
have available cash (as defined) on any business day, such
amount shall first be applied to the repayment of the revolving
loans, and any remaining excess then shall be loaned to SBC and
BellSouth, pro rata, and applied to the repayment of the
subordinated member loans from SBC and BellSouth, pro rata, if
we do not then require a cash advance under the agreement. In
addition, the agreement provides that free cash flow after
repayment of the revolving loans and the subordinated
shareholder loans will be distributed to SBC and BellSouth.
These distribution provisions supersede the distribution
provisions in the limited liability company agreement to the
extent they require a greater equity distribution. During 2004,
we repaid $50 million of our subordinated member loans
pursuant to this facility. At December 31, 2004, we had
$1,667 million outstanding under this agreement, of which
$899 million was repaid through February 2005. The initial
term of the agreement expires in July 2005. The agreement
provides that SBC and BellSouth may extend its term for
successive periods, and we expect them to do so for the
foreseeable future.

Equity Contribution

In connection with our acquisition of AT&T
Wireless, we entered into an Investment and Reorganization
Agreement with SBC, BellSouth and some of their subsidiaries
whereby they provided to us approximately $36 billion in
equity funding, pro rata in proportion to their respective
economic interests in us, to finance a portion of the purchase
price, as described in Item 1, Business 
Acquisitions, Dispositions, Joint Ventures and Spectrum
Exchanges  AT&T Wireless Acquisition.

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|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal Accounting Fees and
    Services

The following table sets forth the aggregate fees
billed to us by Ernst & Young LLP for professional
services rendered for the fiscal years ended December 31,
2003 and 2004. All services were specifically approved by our
Audit Committee.

|                      |  |              |     |      |  |   |     | 
|--------------------- |  | ------------ | --- | ---- |  | - | --- | 
|                      |  |             
|                      |  | Year Ended  
|                      |  | December 31,
|                      |  |             
|                      |  | 2003         |     | 2004
|                      |  |              |     |     
|                      |  |             
|                      |  | (Dollars in 
|                      |  | Millions)   
|Audit Fees(1)         |  | $            | 2.8 |      |  | $ | 7.0 | 
|Audit-Related Fees(2) |  |              | 0.3 |      |  |   | 1.0 | 
|Tax Fees(3)           |  |              | 0.4 |      |  |   | 0.0 | 
|All Other Fees(4)     |  |              | 0.4 |      |  |   | 0.0 | 
|                      |  |              |     |      |  |   |     | 
|Total Fees            |  | $            | 3.9 |      |  | $ | 8.0 | 
|                      |  |              |     |      |  |   |     | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Consists of fees billed for professional services
    for the audit of our annual financial statements and review of
    financial statements included in our SEC reports or services
    that are normally provided by the independent registered public
    accountant in connection with statutory and regulatory filings
    or engagements for those fiscal years.
|   
|(2) | Consists of fees billed for assurance and related
    services that are reasonably related to the performance of the
    audit or review of our financial statements and are not reported
    under Audit Fees. These services primarily include
    pension and benefit plan audits.                                                                                
|   
|(3) | Consists of fees billed for tax compliance, tax
    advice, and tax planning. These services primarily include
    assistance regarding sales and use tax planning.                                                                                                                                                                                                    
|   
|(4) | Consists of fees for products and services other
    than the services reported above. These services primarily
    include process and contract reviews.                                                                                                                                                                                                              

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PART IV




|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

|                                                                                                                                                                                                |                                                                                                                                            |                                                     |  |     |     | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------- |  | --- | --- | 
|                                                                                                                                                                                                |                                                                                                                                            | Page(s)                                            
|                                                                                                                                                                                                |                                                                                                                                            | in This                                            
|                                                                                                                                                                                                |                                                                                                                                            | Form 10-K                                          
|                                                                                                                                                                                                |                                                                                                                                            |                                                    
|a. Documents filed as part of the report                                                                                                                                                        |                                                                                                                                            |                                                     |  |    
|(1) Financial Statements                                                                                                                                                                        |                                                                                                                                            |                                                     |  |    
|                                                                                                                                                                                                | Cingular Wireless LLC                                                                                                                      |                                                     |  |     |    
|                                                                                                                                                                                                | Report of Independent Registered Public
    Accounting Firm  Ernst & Young LLP                                                            |                                                     |  | 81  |    
|                                                                                                                                                                                                | Report of Independent Registered Public
    Accounting Firm  PricewaterhouseCoopers LLP                                                   |                                                     |  | 82  |    
|                                                                                                                                                                                                | Consolidated Balance Sheets as of
    December 31, 2003 (restated) and 2004                                                                |                                                     |  | 83  |    
|                                                                                                                                                                                                | Consolidated Statements of Income for the years
    ended December 31, 2002 (restated), 2003 (restated), and
    2004                      |                                                     |  | 84  |    
|                                                                                                                                                                                                | Consolidated Statements of Changes in
    Members Capital for the years ended December 31, 2002
    (restated), 2003 (restated), and 2004 |                                                     |  | 85  |    
|                                                                                                                                                                                                | Consolidated Statements of Comprehensive Income
    for the years ended December 31, 2002 (restated), 2003
    (restated), and 2004        |                                                     |  | 86  |    
|                                                                                                                                                                                                | Consolidated Statements of Cash Flows for the
    years ended December 31, 2002 (restated), 2003 (restated),
    and 2004                  |                                                     |  | 87  |    
|                                                                                                                                                                                                | Notes to Consolidated Financial Statements                                                                                                 |                                                     |  | 88  |    
|                                                                                                                                                                                                | GSM Facilities LLC                                                                                                                         |                                                     |  |     |    
|                                                                                                                                                                                                | Report of Independent Auditors 
    Ernst & Young LLP                                                                                     |                                                     |  | 153 |    
|                                                                                                                                                                                                | Report of Independent Registered Public
    Accounting Firm  PricewaterhouseCoopers LLP                                                   |                                                     |  | 154 |    
|                                                                                                                                                                                                | Consolidated Balance Sheets as of
    December 31, 2003 (restated) and 2004                                                                |                                                     |  | 155 |    
|                                                                                                                                                                                                | Consolidated Statements of Operations for the
    years ended December 31, 2002 (restated), 2003 (restated),
    and 2004                  |                                                     |  | 156 |    
|                                                                                                                                                                                                | Consolidated Statements of Changes in
    Members Capital for the years ended December 31, 2002
    (restated), 2003 (restated), and 2004 |                                                     |  | 157 |    
|                                                                                                                                                                                                | Consolidated Statements of Cash Flows for the
    years ended December 31, 2002 (restated), 2003 (restated),
    and 2004                  |                                                     |  | 158 |    
|                                                                                                                                                                                                | Notes to Consolidated Financial Statements                                                                                                 |                                                     |  | 159 |    
|(2) Financial Statement Schedule as set forth
    under Item 8 of this Report                                                                                                                   |                                                                                                                                            |                                                     |  |    
|                                                                                                                                                                                                | Cingular Wireless LLC                                                                                                                      |                                                     |  |     |    
|                                                                                                                                                                                                |                                                                                                                                            | Schedule II  Valuation and
    Qualifying Accounts |  |     | 168 | 
|All other financial statements and schedules not
    listed are omitted because they are not required, or the
    required information is included in the consolidated financial
    statements |                                                                                                                                            |                                                     |  |    
|(3) Exhibits. The following exhibits are
    either provided with this Form 10-K or are incorporated by
    reference                                                                           |                                                                                                                                            |                                                     |  |    

|        |   |             |  |                                                                                                                                                                                                                                                                                
|------- | - | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | * |             |  | Incorporated by reference                                                                                                                                                                                                                                                      
|       
|        | 2 | .1*         |  | Amended and Restated Contribution and Formation
    Agreement among SBC Communications, Inc., BellSouth Corporation
    and Alloy LLC, dated as of April 4, 2000 (Exhibit 2.1
    to Registration Statement on Form S-4 filed
    January 24, 2002, Registration No. 333-81342)

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PART IV




|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------- | - | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 2 | .1.1*       |  | Second Amendment to Amended and Restated
    Contribution and Formation Agreement among SBC Communications,
    Inc., BellSouth Corporation and Cingular Wireless
    (Exhibit 2.1.1 to Annual Report on Form 10-K for the
    year ended December 31, 2002)                                                                                                                                                                                                                                                                                                                                                             
|        | 2 | .2*         |  | Purchase Agreement, dated August 4, 2003, by
    and between NextWave Telecom Inc., NextWave Personal
    Communications Inc., NextWave Partners Inc., NextWave Power
    Partners Inc. and Cingular Wireless LLC (Exhibit 10.54 to
    Quarterly Report on Form 10-Q for the quarter ended
    June 30, 2003)                                                                                                                                                                                                                                                                                                           
|        | 2 | .3*         |  | Interest Purchase Agreement by and among T-Mobile
    USA, Inc., Omnipoint Communications, Inc., Cingular Wireless LLC
    and SBC Wireless LLC dated as of May 24, 2004. (Portions
    omitted pursuant to a request for confidential treatment)
    (Exhibit 10.66 to Quarterly Report on Form 10-Q for
    the quarter ended September 30, 2004)                                                                                                                                                                                                                                                                      
|        | 2 | .4*         |  | Agreement and Plan of Merger, dated as of
    February 17, 2004, by and among AT&T Wireless Services,
    Inc., Cingular Wireless Corporation, Cingular Wireless LLC and
    Links I Corporation, and solely for the purposes of certain
    sections of the Merger Agreement, SBC Communications Inc. and
    BellSouth Corporation (Exhibit 99.1 to Form 8-K/ A
    dated February 18, 2004)                                                                                                                                                                                                                           
|        | 3 | .1*         |  | Certificate of Formation of the Company, dated
    April 19, 2000, as amended by Certificate of Merger, dated
    November 1, 2000, Certificate of Merger, Dated
    February 21, 2001, and Certificate of Amendment, dated
    March 1, 2001 (Exhibit 3.1 to Registration Statement
    on Form S-4 filed January 24, 2002, Registration
    No. 333-81342)                                                                                                                                                                                                                                                             
|        | 3 | .2*         |  | Limited Liability Company Agreement of Alloy LLC
    by and among SBC Communications Inc., SBC Alloy Holdings, Inc.,
    BellSouth Corporation, BellSouth Mobile Data, Inc., BSCC of
    Houston, Inc., ACCC of Los Angeles, Inc., BellSouth Cellular
    Corp., RAM Broadcasting Corporation and Alloy Management Corp.,
    dated as of October 2, 2000, as amended by Amendment
    No. 1, dated January 1, 2001, Amendment No. 2,
    dated April 3, 2001 and Amendment No. 3, dated
    April 3, 2001 (Exhibit 3.2 to Registration Statement
    on Form S-4 filed January 24, 2002, Registration
    No. 333-81342)
|        | 3 | .2.1*       |  | Amendment No. 4 to Limited Liability Company
    Agreement dated December 31, 2001 (Exhibit 3.3 to
    Amendment No. 1 to Registration Statement on Form S-4
    filed May 31, 2002, Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 3 | .2.2*       |  | Amendment No. 5 to Limited Liability Company
    Agreement of Cingular Wireless LLC by and among SBC
    Communications Inc., SBC Alloy Holdings, Inc., SBC Long
    Distance, Inc., BellSouth Corporation, BLS Cingular Holdings,
    LLC, BellSouth Mobile Data, Inc. and Cingular Wireless
    Corporation, dated as of October 27, 2004.
    (Exhibit 99.11 to Form 8-K dated October 28, 2004)                                                                                                                                                                                                                      
|        | 4 | .1*         |  | Indenture between the Company and Bank One
    Trust Company, N.A., as Trustee, dated as of
    December 12, 2001 (Exhibit 4.1 to Registration
    Statement on Form S-4 filed January 24, 2002,
    Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                         
|        | 4 | .1.1*       |  | First Supplemental Indenture between the Company
    and Bank One Trust Company, N.A., as Trustee, dated
    December 31, 2002. (Exhibit 4.1.1 to Annual Report on
    Form 10-K for the year ended December 31, 2002)                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 4 | .1.2*       |  | Second Supplemental Indenture by and among
    Cingular Wireless LLC, Cingular Wireless II, LLC and
    J.P. Morgan Trust Company, National Association (as
    successor Trustee), dated as of October 27, 2004
    (Exhibit 99.10 to Form 8-K dated October 28, 2004)                                                                                                                                                                                                                                                                                                                                                  
|        | 4 | .1.3*       |  | Third Supplemental Indenture by and among
    Cingular Wireless LLC, Cingular Wireless II LLC, New
    Cingular Wireless, Inc. and J.P. Morgan Trust Company
    dated as of March 4, 2005 (Exhibit 4.1.3 to Form 8-A/A
    dated March 4, 2005)                                                                                                                                                                                                                                                                                                                                                                         

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PART IV




|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | - | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 4 | .2*         |  | $500,000,000 5.625% Senior Notes Due
    December 15, 2006 (Exhibit 4.2 to Annual Report on
    Form 10-K for the year ended December 31, 2002)                                                                                                                                                                                                                                                                         
|        | 4 | .3*         |  | $750,000,000 6.5% Senior Notes Due
    December 15, 2011 (Exhibit 4.3 to Annual Report on
    Form 10-K for the year ended December 31, 2002)                                                                                                                                                                                                                                                                           
|        | 4 | .4*         |  | $750,000,000 7.125% Senior Notes Due
    December 15, 2031 (Exhibit 4.4 to Annual Report on
    Form 10-K for the year ended December 31, 2002)                                                                                                                                                                                                                                                                         
|        | 4 | .5*         |  | Indenture between AT&T Wireless Services,
    Inc. and U.S. Bank National Association (as successor
    Trustee), dated as of March 6, 2001 (Exhibit 4.5 to
    AT&T Wireless Services, Inc.s Registration Statement
    on Form S-1/A (Commission file No. 333-59174), filed
    June 11, 2001)                                                                                                                       
|        | 4 | .5.1*       |  | First Supplemental Indenture between AT&T
    Wireless Services, Inc. and U.S. Bank National Association,
    dated as of September 1, 2004, to the Indenture between
    AT&T Wireless Services, Inc. and U.S. Bank National
    Association (as successor Trustee), dated as of March 6,
    2001. (Exhibit 99.07 to Form 8-K dated
    October 28, 2004)                                                             
|        | 4 | .5.2*       |  | Second Supplemental Indenture by and among
    Cingular Wireless LLC, Cingular Wireless II, Inc., AT&T
    Wireless Services, Inc. and U.S. Bank National Association,
    dated as of October 26, 2004, to the Indenture between
    AT&T Wireless Services, Inc. and U.S. Bank National
    Association (as successor Trustee), dated as of March 6,
    2001. (Exhibit 99.04 to Form 8-K dated
    October 28, 2004) 
|        | 4 | .6*         |  | Indenture between AT&T Wireless Services,
    Inc. and U.S. Bank National Association (as successor
    Trustee), dated as of April 11, 2002 (Exhibit 4.3 to
    AT&T Wireless Services, Inc.s Form 10-Q for the
    quarterly period ended March 31, 2002)                                                                                                                                                            
|        | 4 | .6.1*       |  | First Supplemental Indenture between AT&T
    Wireless Services, Inc. and U.S. Bank National Association,
    dated as of September 1, 2004, to the Indenture between
    AT&T Wireless Services, Inc. and U.S. Bank National
    Association (as successor Trustee), dated as of April 11,
    2002. (Exhibit 99.09 to Form 8-K dated
    October 28, 2004)                                                            
|        | 4 | .6.2*       |  | Second Supplemental Indenture by and among
    Cingular Wireless LLC, Cingular Wireless II, Inc., AT&T
    Wireless Services, Inc. and U.S. Bank National Association,
    dated as of October 26, 2004, to the Indenture between
    AT&T Wireless Services, Inc. and U.S. Bank National
    Association (as successor Trustee), dated as of April 11,
    2002. (Exhibit 99.05 to Form 8-K dated
    October 28, 2004)
|        | 4 | .7*         |  | Form of 7.350% Exchange Note due 2006
    (Exhibit 4.4 to Registration Statement on Form S-4
    (Registration No. 333-67068), filed August 8, 2001)                                                                                                                                                                                                                                                                    
|        | 4 | .8*         |  | Form of 7.875% Exchange Note due 2011
    (Exhibit 4.5 to Registration Statement on Form S-4
    (Registration No. 333-67068), filed August 8, 2001)                                                                                                                                                                                                                                                                    
|        | 4 | .9*         |  | Form of 8.750% Exchange Note due 2031
    (Exhibit 4.6 to Registration Statement on Form S-4
    (Registration No. 333-67068), filed August 8, 2001)                                                                                                                                                                                                                                                                    
|        | 4 | .10*        |  | Form of 6.875% Senior Notes due 2005
    (Exhibit 4.4 to AT&T Wireless Services, Inc.s
    Form 10-Q for the quarterly period ended March 31,
    2002)                                                                                                                                                                                                                                                                
|        | 4 | .11*        |  | Form of 7.5% Senior Notes due 2005
    (Exhibit 4.5 to AT&T Wireless Services, Inc.s
    Form 10-Q for the quarterly period ended March 31,
    2002)                                                                                                                                                                                                                                                                  
|        | 4 | .12*        |  | Form of 8.125% Senior Notes due 2012
    (Exhibit 4.6 to AT&T Wireless Services, Inc.s
    Form 10-Q for the quarterly period ended March 31,
    2002)                                                                                                                                                                                                                                                                
|        | 4 | .13*        |  | Capital Markets Debt Subordination Agreement,
    dated as of November 21, 2000, among SBC Communications
    Inc., BellSouth Corporation and any Subsidiary Lender
    (Exhibit 10.13 to Annual Report on Form 10-K for the
    year ended December 31, 2002)                                                                                                                                                          

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PART IV




|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 4  | .14*        |  | Subordinated Notes of SBC and BellSouth
    (Exhibit 10.14 to Amendment No. 1 to the Registration
    Statement on Form S-4 filed May 31, 2002, Registration
    No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 4  | .14.1*      |  | Amended, Restated and Consolidated Subordinated
    Promissory Notes of the Company to SBC, BellSouth and Cellular
    Credit Corporation dated July 1, 2003 (Exhibit 10.14.1
    of Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2003)                                                                                                                                                                                                                                                                                                                                                                        
|        | 4  | .15         |  | Notice of Additional Senior Capital Markets Debt
    pertaining to the Senior Notes of AT&T Wireless, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 10 | .1*         |  | Wireless Agency Agreement between Alloy LLC and
    BellSouth Telecommunications Inc., dated October 2, 2000
    (Exhibit 10.1 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10 | .2*         |  | Wireless Agency Agreement between Alloy LLC and
    SBC Operations, Inc., dated October 2, 2000
    (Exhibit 10.2 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 10 | .3*         |  | Resale Agreement between Alloy LLC and BellSouth
    Telecommunications, Inc., dated October 2, 2000
    (Exhibit 10.3 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 10 | .4*         |  | Resale Agreement between Alloy LLC and SBC
    Communications Inc., dated October 2, 2000
    (Exhibit 10.4 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 10 | .5*         |  | Intellectual Property License Agreement between
    Alloy LLC and BellSouth Corporation, dated October 2, 2000
    (Exhibit 10.5 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10 | .6*         |  | Intellectual Property Agreement between Cingular
    Wireless LLC and BellSouth Intellectual Property Marketing
    Corporation, dated October 17, 2001 (Exhibit 10.6 to
    Registration Statement on Form S-4 filed January 24,
    2002, Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                 
|        | 10 | .7*         |  | Intellectual Property License Agreement between
    Alloy LLC and SBC Communications Inc., dated October 2,
    2000 (Exhibit 10.7 to Registration Statement on
    Form S-4 filed January 24, 2002, Registration
    No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 10 | .8*         |  | Intellectual Property License Agreement between
    BellSouth Corporation and Alloy LLC, dated October 2, 2000
    (Exhibit 10.8 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10 | .9*         |  | Intellectual Property License Agreement between
    SBC Communications Inc. and Alloy LLC, dated October 2,
    2000 (Exhibit 10.9 to Registration Statement on
    Form S-4 filed January 24, 2002, Registration
    No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 10 | .10*        |  | Authorized Sales Representative Agreement by and
    among SBC Communications Inc., Southwestern Bell Telephone
    Company, Pacific Bell Telephone Company, Ameritech Illinois,
    Ameritech Indiana, Ameritech Michigan, Ameritech Ohio, Ameritech
    Wisconsin, Nevada Bell Telephone, Southern New England Telephone
    Company and Alloy LLC, dated October 2, 2000, completed
    pursuant to the Wireline Agency Signature Agreement between SBC
    Communications Inc. and Alloy LLC, dated October 2, 2000
    (Exhibit 10.10 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)
|        | 10 | .11*        |  | Marketing Representative Agreement between
    BellSouth Telecommunications, Inc. and BellSouth Cellular Corp.,
    dated July 17, 1998 (Exhibit 10.11 to Registration
    Statement on Form S-4 filed January 24, 2002,
    Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                

196



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PART IV




|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

|        |    |             |  |                                                                                                                                                                                                                                                                                                                     
|------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .12*        |  | Assignment and Assumption Agreement between
    BellSouth Cellular Corp. and Alloy LLC (Exhibit 10.12 to
    Registration Statement on Form S-4 filed January 24,
    2002, Registration No. 333-81342)                                                                                                             
|        | 10 | .13*        |  | Agreement to Sublease, dated August 25,
    2000, by and among SBC Wireless, Inc., for itself and on behalf
    of the Sublessor Entities, SpectraSite Holdings Inc. and
    Southern SpectraSite Towers, Inc. (Exhibit 10.1 of
    SpectraSite Holdings Inc. Current Report on Form 8-K, dated
    August 25, 2000)
|        | 10 | .14*        |  | Cingular Wireless Cash Deferral Plan
    (Exhibit 10.16 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)                                                                                                                                                               
|        | 10 | .15*        |  | Cingular Wireless Pension Plan
    (Exhibit 10.17 to Amendment No. 1 to the Registration
    Statement on Form S-4 filed April 25, 2002,
    Registration No. 333-81342)                                                                                                                                            
|        | 10 | .16*        |  | Cingular Wireless Savings Plan
    (Exhibit 10.18 to Amendment No. 1 to the Registration
    Statement on Form S-4 filed April 25, 2002,
    Registration No. 333-81342)                                                                                                                                            
|        | 10 | .17*        |  | The Amended and Restated BellSouth Corporation
    Stock Plan effective April 24, 1995, as amended
    (Exhibit 10v-1 of BellSouth Corporation Annual Report on
    Form 10-K for the year ended December 31, 2000)                                                                                                 
|        | 10 | .18*        |  | BellSouth Corporation Trust Under Executive
    Benefit Plan(s), as amended April 28, 1995
    (Exhibit 10u-1 of BellSouth Corporation Quarterly Report on
    Form 10-Q for the quarter ended June 30, 1995)                                                                                                       
|        | 10 | .18.1*      |  | Amendment, dated May 23, 1996, to the
    BellSouth Corporation Trust Under Executive Benefit Plan(s)
    (Exhibit 10s-1 of BellSouth Corporation Quarterly Report on
    Form 10-Q for the quarter ended June 30, 1996)                                                                                            
|        | 10 | .18.2*      |  | Second Amendment dated July 8, 2002 to the
    BellSouth Corporation Trust Under Executive Benefit Plan(s)
    (Exhibit 10r-2 to BellSouth Corporations
    Form 10-Q for the quarter ended September 30, 2002,
    File No. 1-8607)                                                                               
|        | 10 | .18.3*      |  | First Amendment dated November 1, 2003 to
    the BellSouth Corporation Trust Under Executive Benefit
    Plan(s) (Exhibit 10r-3 to BellSouth Corporations
    Form 10-K for the year ended December 31, 2003, File
    No. 1-8607)                                                                                
|        | 10 | .18.4*      |  | Second Amendment dated December 17, 2003 to
    the BellSouth Corporation Trust Under Executive Benefit
    Plan(s) (Exhibit 10r-4 to BellSouth Corporations
    Form 10-K for the year ended December 31, 2003, File
    No. 1-8607)                                                                              
|        | 10 | .18.5*      |  | Third Amendment dated March 15, 2004 to the
    BellSouth Corporation Trust Under Executive Benefit Plan(s)
    (Exhibit 10r-5 to BellSouth Corporations
    Form 10-Q for the quarter ended March 31, 2004, File
    No. 1-8607)                                                                                  
|        | 10 | .19*        |  | BellSouth Retirement Savings Plan, as amended and
    restated effective July 1, 2001 (Exhibit 10-w of
    BellSouth Corporation Annual Report on Form 10-K for the
    year ended December 31, 2001)                                                                                                               
|        | 10 | .19.1*      |  | First Amendment dated December 18, 2001 to
    the BellSouth Retirement Savings Plan (Exhibit 10w-1 to
    BellSouth Corporations Form 10-K for the year ended
    December 31, 2001, File 1-8607)                                                                                                                 
|        | 10 | .20*        |  | BellSouth Corporation Executive Incentive Award
    Deferral Plan, as amended and restated effective
    September 23, 1996 (Exhibit 10g of BellSouth
    Corporation Annual Report on Form 10-K for the year ended
    December 31, 1996)                                                                          
|        | 10 | .21*        |  | BellSouth Corporation Supplemental Executive
    Retirement Plan, as amended on March 23, 1998
    (Exhibit 10i of BellSouth Corporation Quarterly Report on
    Form 10-Q for the quarter ended March 31, 1998)                                                                                                    

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|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

|        |    |             |  |                                                                                                                                                                                                                                                    
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .22*        |  | BellSouth Corporation Nonqualified Deferred
    Compensation Plan, as amended and restated effective
    November 25, 1996 (Exhibit 10h of BellSouth
    Corporation Annual Report on Form 10-K for the year ended
    December 31, 1996)          
|        | 10 | .23*        |  | SBC Communications Inc. 1996 Stock and Incentive
    Plan (Exhibit 10-o of SBC Communications Inc. Annual Report
    on Form 10-K for the year ended December 31, 2002)                                                                            
|        | 10 | .24*        |  | SBC Communications Inc. 2001 Incentive Plan
    (Exhibit 10-u of SBC Communications Inc. Annual Report on
    Form 10-K for the year ended December 31, 2002)                                                                                      
|        | 10 | .25*        |  | SBC Communications Inc. Stock Savings Plan, as
    amended through September 28, 2001 (Exhibit 10-l of
    SBC Communications Inc. Annual Report on Form 10-K for the
    year ended December 31, 2002)                                            
|        | 10 | .26*        |  | SBC Communications Inc. Short-Term Incentive Plan
    (Exhibit 10-a of SBC Communications Inc. Annual Report on
    Form 10-K for the year ended December 31, 2002)                                                                                
|        | 10 | .27*        |  | SBC Communications Inc. Supplemental Retirement
    Income Plan (Exhibit 10-c of SBC Communications Inc. Annual
    Report on Form 10-K for the year ended December 31,
    2004)                                                                  
|        | 10 | .28*        |  | SBC Communications Inc. 1992 Stock Option Plan,
    as amended through June 19, 2001 (Exhibit 10-n of SBC
    Communications Inc. Annual Report on Form 10-K for the year
    ended December 31, 2001)                                             
|        | 10 | .29*        |  | Pacific Telesis Group 1994 Stock Incentive Plan
    (Attachment A of Pacific Telesis Groups Definitive
    Proxy Statement, dated March 11, 1994, and amended
    March 14 and March 25, 1994)                                                    
|        | 10 | .29.1*      |  | Resolutions amending the Plan, effective
    January 1, 1995. (Attachment A to Pacific Telesis
    Groups 1995 Proxy Statement, filed March 13, 1995)                                                                                             
|        | 10 | .30*        |  | Cingular Wireless SBC Transition Executive
    Benefit Plan (Exhibit 10.42 to Amendment No. 1 to the
    Registration Statement on Form S-4 filed May 31, 2002,
    Registration No. 333-81342)                                                    
|        | 10 | .31*        |  | Cingular Wireless Long-Term Incentive Plan
    (Exhibit 10.43 to Amendment No. 1 to the Registration
    Statement on Form S-4 filed May 31, 2002, Registration
    No. 333-81342)                                                                 
|        | 10 | .32*        |  | Cingular Wireless Executive Short Term Incentive
    Award Plan (Exhibit 10.45 to Amendment No. 1 to the
    Registration Statement on Form S-4 filed May 31, 2002,
    Registration No. 333-81342)                                                
|        | 10 | .33*        |  | Cingular Wireless BLS Transition Executive
    Benefit Plan (Exhibit 10.46 to Amendment No. 1 to the
    Registration Statement on Form S-4 filed May 31, 2002,
    Registration No. 333-81342)                                                    
|        | 10 | .34*        |  | Cingular Wireless Executive Financial Services
    Plan (Exhibit 10.47 to Amendment No. 1 to the
    Registration Statement on Form S-4 filed May 31, 2002,
    Registration No. 333-81342)                                                        
|        | 10 | .35*        |  | Officer Communication Plan (Exhibit 10.48 to
    Annual Report on Form 10-K for the year ended
    December 31, 2002)                                                                                                                              
|        | 10 | .36*        |  | Employment Agreement with Stanley T. Sigman
    (Exhibit 10.49 to Annual Report on Form 10-K for the
    year ended December 31, 2002)                                                                                                             
|        | 10 | .37*        |  | Supplemental Retention Agreement with Thaddeus
    Arroyo (Exhibit 99.1 to Form 8-K dated
    February 18, 2005)                                                                                                                                   
|        | 10 | .38*        |  | Cingular Wireless Long Term Compensation Plan
    amended and restated effective January 1, 2003
    (Exhibit 10.52 to Quarterly Report on Form 10-Q for
    the quarter ended March 31, 2003)                                                     
|        | 10 | .39*        |  | Licensing Support Agreement between BellSouth
    Intellectual Property Marketing Corporation and Cingular
    Wireless, LLC, effective April 21, 2003 (Exhibit 10.53
    to Quarterly Report on Form 10-Q for the quarter ended
    June 30, 2003)

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|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .40*        |  | Stockholders Agreement by and among SBC
    Communications Inc., BellSouth Corporation and Alloy Management
    Corp. dated October 2, 2000 (Exhibit 10.55 to
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2003)                                                                                                                                                                                                                                               
|        | 10 | .41*        |  | Subordination Agreement among SBC Communications
    Inc., BellSouth Corporation, Cellular Credit Corporation and
    Cingular Wireless LLC dated November 17, 2003
    (Exhibit 10.56 to Annual Report on Form 10-K for the
    year ended December 31, 2003)                                                                                                                                                                                                                               
|        | 10 | .42*        |  | Compensation arrangement with Ralph de la Vega
    (Exhibit 10.58 to Annual Report on Form 10-K for the
    year ended December 31, 2003)                                                                                                                                                                                                                                                                                                                                                    
|        | 10 | .43*        |  | Transition Agreement by and between BellSouth
    Corporation and Ralph de la Vega dated December 29, 2003
    (Exhibit 10.59 to Annual Report on Form 10-K for the
    year ended December 31, 2003)                                                                                                                                                                                                                                                                                        
|        | 10 | .44*        |  | Cingular Wireless Long Term Compensation Plan
    amended and restated effective January 1, 2004
    (Exhibit 10.61 to Annual Report on Form 10-K for the
    year ended December 31, 2003)                                                                                                                                                                                                                                                                                                  
|        | 10 | .45*        |  | Billing and Collections Services Operating
    Agreement by and among BellSouth Telecommunications, Inc. and
    Cingular Wireless LLC, effective September 1, 2003
    (Exhibit 10.62 to Annual Report on Form 10-K for the
    year ended December 31, 2003)                                                                                                                                                                                                                               
|        | 10 | .46*        |  | Work Order No. 03027350 Between Cingular
    Wireless LLC and SBC Services, Inc. (Exhibit 10.63 to
    Annual Report on Form 10-K for the year ended
    December 31, 2003)                                                                                                                                                                                                                                                                                                                  
|        | 10 | .47*        |  | Investment Agreement, dated as of
    February 17, 2004, between BellSouth Corporation and SBC
    Communications Inc. (Exhibit 10.64 to Annual Report on
    Form 10-K for the year ended December 31, 2003)                                                                                                                                                                                                                                                                                
|        | 10 | .47.1*      |  | Investment and Reorganization Agreement dated
    October 25, 2004, by and among BellSouth Corporation, SBC
    Communications Inc., Cingular Wireless Corporation, Cingular
    Wireless LLC, Links I Corporation, Cingular Wireless II,
    Inc., BLS Cingular Holdings, LLC, SBC Alloy Holdings, Inc.,
    BellSouth Enterprises, Inc., BellSouth Mobile Systems, Inc.,
    BellSouth Mobile Data, Inc. and SBC Long Distance, Inc.
    (Exhibit 99.01 to Form 8-K dated October 28, 2004)
|        | 10 | .48*        |  | Revolving Credit Agreement by and among BellSouth
    Corporation, SBC Communications, Inc. and Cingular Wireless LLC
    dated as of August 1, 2004. (Exhibit 10.65 to
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2004)                                                                                                                                                                                                                                      
|        | 10 | .49*        |  | Separation and Distribution Agreement by and
    between AT&T Corp. and AT&T Wireless Services, Inc.,
    dated as of June 4, 2001 (Exhibit 10.1 to Registration
    Statement on Form S-1/A (Registration No. 333-59174),
    filed June 21, 2001)                                                                                                                                                                                                                                          
|        | 10 | .50*        |  | Amended and Restated Tax Sharing Agreement by and
    between AT&T Corp. and AT&T Wireless Services, Inc.,
    dated as of June 4, 2001 (Exhibit 10.2 to Registration
    Statement on Form S-1/A (Registration No. 333-59174),
    filed June 21, 2001)                                                                                                                                                                                                                                     
|        | 10 | .51*        |  | Cingular Wireless Long-Term Compensation Plan as
    amended and restated on February 11, 2005
    (Exhibit 99.1 to Form 8-K dated February 17, 2005)                                                                                                                                                                                                                                                                                                                                        
|        | 10 | .52*        |  | Revised Performance Matrices for the
    2003  2005 and 2004  2006 Performance
    Periods under the Cingular Wireless Long-Term Compensation Plan
    (Exhibit 99.2 to Form 8-K dated February 17, 2005)                                                                                                                                                                                                                                                                                  
|        | 10 | .53*        |  | Methodology for determining grants under the Plan
    and certain performance targets and matrices for the
    2005  2007 performance period (Exhibit 99.3 to
    Form 8-K dated February 17, 2005)                                                                                                                                                                                                                                                                                         

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|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

|        |    |             |  |                                                                                                                                                                                                                                                                         
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .54*        |  | Methodology for determining special grants of
    performance stock units under the Plan and certain performance
    targets and matrices for the 2005  2007 performance
    period (Exhibit 99.4 to Form 8-K dated
    February 17, 2005)                             
|        | 10 | .55*        |  | SBC Communications Inc. Salary and Incentive
    Award Deferral Plan. (Exhibit 10-g to SBC Communications
    Inc. Form 10-K for 2002)                                                                                                                                  
|        | 10 | .56*        |  | SBC Communications Inc. Supplemental Life
    Insurance Plan. (Exhibit 10-b to SBC Communications, Inc.
    Form 10-K for 2002)                                                                                                                                         
|        | 10 | .57*        |  | SBC Communications Inc. Executive Health Plan,
    formerly the Supplemental Health Plan (Exhibit 10-h to SBC
    Communications Inc. Form 10-K for 2004)                                                                                                               
|        | 10 | .58*        |  | SBC Communications Inc. Senior Management
    Deferred Compensation Plan (effective for Units of Participation
    Having a Unit Start Date Prior to January 1, 1988).
    (Exhibit 10-d to SBC Communications Inc. Form 10-K for
    2002)                             
|        | 10 | .59*        |  | SBC Communications Inc. Cash Deferral Plan
    (Exhibit 10-gg to SBC Communications Inc. Form 10-K
    for 2004)                                                                                                                                                        
|        | 10 | .60*        |  | SBC Communications Inc. Stock Purchase and
    Deferral Plan (Exhibit 10-ff to SBC Communications Inc.
    Form 10-K for 2004)                                                                                                                                          
|        | 10 | .61*        |  | SBC Communications Inc. 2005 Supplemental
    Employee Retirement Plan (Exhibit 10-jj to SBC
    Communications Inc. Form 10-K for 2004)                                                                                                                                
|        | 12 |             |  | Statement of Computation of Ratios of Earnings to
    Fixed Charges                                                                                                                                                                                                     
|        | 21 |             |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                          
|        | 24 |             |  | Powers of Attorney                                                                                                                                                                                                                                                      
|        | 31 | .1          |  | Certification of President and Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002                                                                                                                                                
|        | 31 | .2          |  | Certification of Chief Financial Officer pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                  
|        | 32 | .1(1)       |  | Certification of President and Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002, 18 U.S.C. Section 1350                                                                                                                        
|        | 32 | .2(1)       |  | Certification of Chief Financial Officer pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002,
    18 U.S.C. Section 1350                                                                                                                                      
|        | 99 | .1*         |  | Restated Certificate of Incorporation of Cingular
    Wireless Corporation, dated October 2, 2000, as amended on
    October 23, 2000 and April 16, 2001 (Exhibit 99.4
    to Registration Statement on Form S-4 filed
    January 24, 2002, Registration No. 333-81342)
|        | 99 | .1.1        |  | Certificate of Amendment of Restated Certificate
    of Incorporation of Cingular Wireless Corporation dated
    July 22, 2004                                                                                                                                          

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|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

|        |    |             |  |                                                                                                                                                                                                                                                                  
|------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 99 | .1.2*       |  | Certificate of Amendment of Restated Certificate
    of Incorporation of Cingular Wireless Corporation dated
    October 27, 2004 (Exhibit 99.1.1 to Quarterly Report
    on Form 10-Q for the quarter ended September 30, 2004)                                 
|        | 99 | .2*         |  | Amended and Restated Bylaws of Cingular Wireless
    Corporation, dated October 2, 2000, as amended on
    January 19, 2001 and November 28, 2001
    (Exhibit 99.5 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)
|        | 99 | .2.1*       |  | Amendment to Bylaws dated April 30, 2002
    (Exhibit 99.6 to Amendment No. 1 to Registration
    Statement on Form S-4 filed May 31, 2002, Registration
    No. 333-81342)                                                                                      



---



|    |                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | This exhibit is hereby furnished to the SEC as an
    accompanying document and is not to be deemed filed
    for purposes of Section 18 of the Securities Exchange Act
    of 1934 or otherwise subject to the liabilities of that Section,
    nor shall it be deemed incorporated by reference into any filing
    under the Securities Act of 1933.

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|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits and Financial Statement
    Schedules

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING
STATEMENTS

In addition to historical information, this
document contains forward-looking statements regarding events,
financial trends, critical accounting policies, off-balance
sheet arrangements, contractual obligations and estimates that
may affect our future operating results, financial position and
cash flows. These statements are based on assumptions and
estimates and are subject to risks and uncertainties.

There are possible developments that could cause
our actual results to differ materially from those forecasted or
implied by our forward-looking statements. You are cautioned not
to place undue reliance on these forward-looking statements,
which are current only as of the date of this filing. We
disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise.

While the below list of cautionary statements is
not exhaustive, some factors, in addition to those contained
throughout this document, that could affect future operating
results, financial position and cash flows and could cause
actual results to differ materially from those expressed or
implied in the forward-looking statements are:



|  |                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the pervasive and intensifying competition in all
    markets where we operate;                                                                                           
| 
| | failure to quickly realize capital and expense
    synergies from the acquisition of AT&T Wireless as a result
    of technical, logistical, regulatory and other factors;
| 
| | problems associated with the transition of our
    network to higher speed technologies;                                                                                  
| 
| | slow growth of our data services due to a lack of
    popular applications, terminal equipment, advanced technology
    and other factors;                                
| 
| | sluggish economic and employment conditions in
    the markets we serve;                                                                                                  
| 
| | 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 our operations;                                                            
| 
| | the outcome of pending or threatened complaints
    and litigation; and                                                                                                   
| 
| | additional risks and uncertainties not presently
    known to us or that we currently deem immaterial.                                                                    

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SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.



| |                      
| | ---------------------
| | CINGULAR WIRELESS LLC

| |     |                               
| | --- | ------------------------------
| | By: | CINGULAR WIRELESS CORPORATION,

| |           
| | ----------
| | as Manager



| |     |                     
| | --- | --------------------
| | By: | /s/ PETER A. RITCHER

| |                              
| | -----------------------------
| |                              
| | Peter A. Ritcher             
| | Chief Financial Officer      
| | (Principal Financial Officer)

Date: March 7, 2005

|                                                |  |                                                                                                   |  | 
|----------------------------------------------- |  | ------------------------------------------------------------------------------------------------- |  | 
|                                               
|/s/ STANLEY T. SIGMAN*Stanley T. Sigman         |  | President and Chief Executive Officer
    (Principal Executive Officer)                          
|                                               
|/s/ PETER A. RITCHER*Peter A. Ritcher           |  | Chief Financial Officer
    (Principal Financial Officer)                                        
|                                               
|/s/ GREGORY T. HALL*Gregory T. Hall             |  | Vice President and Controller
    (Principal Accounting Officer)                                 
|                                               
|/s/ RICHARD A. ANDERSON*Richard A. Anderson     |  | Class B Director                                                                                 
|                                               
|/s/ RONALD M. DYKES*Ronald M. Dykes             |  | Class B Director                                                                                 
|                                               
|/s/ MARK L. FEIDLER*Mark L. Feidler             |  | Class B Director                                                                                 
|                                               
|/s/ RICHARD G. LINDNER*Richard G. Lindner       |  | Class B Director                                                                                 
|                                               
|/s/ RANDALL L. STEPHENSON*Randall L. Stephenson |  | Chairman of the Board and
    Class B Director                                                   
|                                               
|/s/ RAYFORD WILKINS, JR.*Rayford Wilkins, Jr.   |  | Class B Director                                                                                 
|                                               
|*By:                                            |  | /s/ PETER A. RITCHERPeter A. Ritcher
    (Individually and As Attorney-In-Fact)
    March 7, 2005 |  | 

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|        |    |             |  |                                                                                                                                                 
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 4  | .15         |  | Notice of Additional Senior Capital Markets Debt
    pertaining to the Senior Notes of AT&T Wireless, Inc.                                      
|        | 12 |             |  | Statement of Computation of Ratios of Earnings to
    Fixed Charges                                                                             
|        | 21 |             |  | Subsidiaries of the Registrant                                                                                                                  
|        | 24 |             |  | Powers of Attorney                                                                                                                              
|        | 31 | .1          |  | Certification of President and Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002                        
|        | 31 | .2          |  | Certification of Chief Financial Officer pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002                                          
|        | 32 | .1          |  | Certification of President and Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002, 18 U.S.C. Section 1350
|        | 32 | .2          |  | Certification of Chief Financial Officer pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002,
    18 U.S.C. Section 1350              
|        | 99 | .1.1        |  | Certificate of Amendment of Restated Certificate
    of Incorporation of Cingular Wireless Corporation dated
    July 22, 2004                  

204