##### 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,
    2003                                                 
| |           
| | 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



|                                                            |                                                                                               |  |  |  |  |  |  | 
|----------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|TABLE OF CONTENTS                                          
|PART I                                                     
|                                                            | Item 1. Business                                                                             
|                                                            | Item 2. Properties                                                                           
|                                                            | Item 3. Legal Proceedings                                                                    
|                                                            | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II (Dollars in Millions)                              
|                                                            | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                
|                                                            | Item 6. Selected Financial Data                                                              
|                                                            | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                            | Item 7a. Quantitative and Qualitative Disclosure About Market Risk                           
|                                                            | Item 8. Financial Statements and Supplemental Data                                           
|PART II (Dollars in Millions)                              
|                                                            | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|                                                            | Item 9A. Controls and Procedures                                                             
|PART III                                                   
|Item 10. Directors and Executive Officers of the Registrant
|Item 11. Executive Compensation                            
|                                                            | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                                                            | Item 13. Certain Relationships and Related Transactions                                      
|                                                            | Item 14. Principal Accountant Fees and Services (Dollars in Millions)                        
|PART IV                                                    
|                                                            | Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                    
|SIGNATURES                                                 
|EX-10.56 SUBORDINATION AGREEMENT DATED 11-17-2003          
|EX-10.58 COMPENSATION ARRANGEMENT/RALPH DE LA VEGA         
|EX-10.59 TRANSITION AGREEMENT DATED 12-29-2003             
|EX-10.61 CINGULAR WIRELESS LONG TERM COMP PLAN             
|EX-10.62 BILLING AND COLLECTIONS SERVICES AGREEMEN         
|EX-10.63 WORK ORDER NO. 03027350                           
|EX-10.64 INVESTMENT AGREEMENT DATED 02-17-2004             
|EX-12 STATEMENT OF COMPUTATION                             
|EX-21 SUBSIDIARIES OF THE REGISTRANT                       
|EX-24 POWERS OF ATTORNEY                                   
|EX-31.1 SECTION 302 CERTIFICATION OF THE CEO               
|EX-31.2 SECTION 302 CERTIFICATION OF THE CFO               
|EX-32.1 SECTION 906 CERTIFICATION OF THE CEO               
|EX-32.2 SECTION 906 CERTIFICATION OF THE CFO               



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##### Table of Contents






TABLE OF CONTENTS

|           |  |                                                                                           |     |      |     | 
|---------- |  | ----------------------------------------------------------------------------------------- | --- | ---- | --- | 
|           |  |                                                                                           |     | Page
|           |  |                                                                                           |     |     
|PART I    
|Item 1.    |  | Business                                                                                  |     |      | 2   | 
|Item 2.    |  | Properties                                                                                |     |      | 31  | 
|Item 3.    |  | Legal Proceedings                                                                         |     |      | 32  | 
|Item 4.    |  | Submission of Matters to a Vote of Security
    Holders                                   |     |      | 32  | 
|PART II   
|Item 5.    |  | Market for Registrants Common Equity and
    Related Stockholder Matters                 |     |      | 33  | 
|Item 6.    |  | Selected Financial Data                                                                   |     |      | 33  | 
|Item 7.    |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations |     |      | 39  | 
|Item 7a.   |  | Quantitative and Qualitative Disclosure About
    Market Risk                             |     |      | 67  | 
|Item 8.    |  | Financial Statements and Supplemental Data                                                |     |      | 69  | 
|Item 9.    |  | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure  |     |      | 127 | 
|Item 9A.   |  | Controls and Procedures                                                                   |     |      | 127 | 
|PART III  
|Item 10.   |  | Directors and Executive Officers of the Registrant                                        |     |      | 128 | 
|Item 11.   |  | Executive Compensation                                                                    |     |      | 130 | 
|Item 12.   |  | Security Ownership of Certain Beneficial Owners
    and Management                        |     |      | 140 | 
|Item 13.   |  | Certain Relationships and Related Transactions                                            |     |      | 140 | 
|Item 14.   |  | Principal Accounting Fees and Services                                                    |     |      | 150 | 
|PART IV   
|Item 15.   |  | Exhibits, Financial Statement Schedules, and
    Reports on Form 8-K                      |     |      | 151 | 
|Signatures |  |                                                                                           | 158 |     

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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 are the second largest provider of wireless
voice and data communications services in the United States
(U.S.) in terms of customers. For the last two years, we
reported:



|  |                                                                                                                                                                                      
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | U.S. wireless cellular service and personal
    communication services, or PCS, customers totaling
    21.9 million at December 31, 2002 and
    24.0 million at December 31, 2003;
| 
| | revenues of $14.9 billion in 2002 and
    $15.5 billion in 2003; and                                                                                                                 
| 
| | net income of $1.2 billion in 2002 and
    $1.0 billion in 2003.                                                                                                                     

As one of the largest digital wireless network
operators in the United States, we have access to licenses,
either through owned licenses or licenses owned by joint
ventures and affiliates, to provide cellular or PCS wireless
communications services covering an aggregate of
236 million in population (POPs), or approximately 81% of
the U.S. population, including in 45 of the 50 largest
U.S. metropolitan areas. We directly provide cellular or
PCS services in 43 of the 50 largest U.S. metropolitan
areas. We served customers in 50 states, the District of
Columbia, Puerto Rico and the U.S. Virgin Islands as of
December 31, 2003. All of our networks utilize digital
technology; at December 31, 2003, 95% of our cellular and
PCS customers were using digital service, and over 99% of our
cellular and PCS minutes of use were digital in December 2003.

We provide a wide array of wireless services for
individual, business and governmental users. Our data services
are offered over our cellular/PCS networks and our separate
Mobitex network, which on a combined basis had approximately
5.5 million and 6.6 million active users of our data
services at December 31, 2002 and 2003, respectively.

On February 17, 2004, we entered into an
Agreement and Plan of Merger to acquire AT&T Wireless
Services, Inc. (AT&T Wireless) for an aggregate
consideration of approximately $41 billion cash. The
closing of the acquisition is expected to occur in late 2004 and
is subject to the affirmative vote of AT&T Wireless
shareholders, FCC, Hart Scott Rodino and other regulatory
approvals and other customary closing conditions.

On a pro forma basis, the combined company would
have had, at December 31, 2003, cellular and PCS spectrum
coverage in 49 of the top 50 U.S. markets and operations in
97 of the top 100 U.S. markets (excluding only Richmond,
Norfolk and Newport News, VA). Its licenses would encompass a
population of 264 million people, and its network and
operations would encompass a population of 225 million people.
Both companies currently operate the same technologies. We plan
that the combined company will provide service under the
Cingular brand name.

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 our members, SBC Communications Inc.
(SBC) and BellSouth Corporation (BellSouth), as the
operating company for their U.S. wireless communications
joint venture. In October 2000, SBC and BellSouth contributed
substantially all of their U.S. wireless businesses

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CINGULAR WIRELESS LLC





PART I




|        |         
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|Item 1. | Business

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 on Form 10-K, our quarterly reports on
Form 10-Q, 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 0.0000001% economic interest in us. Its
main purpose is to act as our manager and thereby control our
management and operations. Our officers are appointed by its
board of directors. We do not expect our management structure to
change materially as a result of our planned acquisition of
AT&T Wireless.

Our Business

We offer a comprehensive range of high-quality
wireless voice and data communications services in a variety of
pricing plans, including national and regional rate plans as
well as prepaid service plans. 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.
The marketing and distribution plans for our services are
further targeted to the specific geographic and demographic
characteristics of each of our markets.



| |               
| | --------------
| | Voice Services

Postpaid Service.Consumer 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 they utilize our network outside the coverage area of their
wireless service provider. We had approximately
19.8 million postpaid contract customers (excluding
reseller customers) at December 31, 2002 and
21.3 million on December 31, 2003. 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 complementary services for a monthly fee, such as
unlimited mobile-to-mobile calling, roadside assistance and
handset insurance.

Our primary marketing emphasis is enrolling
customers in postpaid service calling plans because such
customers generate higher revenue usage and result in a lower
customer churn rate than prepaid service customers. Accordingly,
a significant component of our strategy consists of developing
value-added plan

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features, ancillary services, unique devices and
promotions to attract and retain postpaid customers. In 2003, we
introduced an internally developed patent-pending
FastForwardSM device that is unique to Cingular. When
a Cingular handset is placed in the cradle, the
FastForwardSM device automatically forwards all
wireless calls to a designated wireline phone number and
simultaneously charges the handset battery providing customers
who are at a wireline location with the convenience of answering
calls to their wireless phones on any wireline phone in that
location. Our plans include options that allow off-peak hours to
begin at 7:00 p.m. We began to target family members
through our FamilyTalkSM promotions, which
contributed to a significant portion of our postpaid customer
growth, and we continue to promote a
RolloverSM minutes feature, which allows
our customers to carry over any unused anytime
minutes from month to month for up to one year. We believe that
these service offerings further enhance our brand message
Cingular Fits You BestSM by providing
customers with value-added services and the flexibility to
tailor those services to fit their specific calling needs.

Prepaid 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 pay in advance. As of December 31,
2003, prepaid users represented approximately 6% of our total
customers. We believe that 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 the usage, revenue
and retention of these customers. Our KICSM (Keep In
Contact) prepaid plan offers features such as long distance,
caller ID, call waiting, voicemail and off-network roaming, as
well as enhanced features like short messaging, downloadable
graphics and ringtones, games and information alerts. At the
same time, it retains the benefits of no contract, no credit
check, no monthly billing and enhanced ability to control
spending. 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 payment defaults.

Reseller Service.We
offer wholesale services to resellers, who purchase wireless
services from us for resale to their customers. As of
December 31, 2003 the number of customers served through
resellers represented approximately 5% of our total customers.

Equipment Sales.We
sell a wide variety of handsets, or phones, manufactured by
various suppliers for use with our service. We also sell
accessories, such as handset faceplates and carrying cases,
hands-free devices, batteries, battery chargers and other items.
Handsets and accessories are also sold to agents and other
third-party distributors for resale.



| |              
| | -------------
| | Data Services

General.Wireless
data is the fastest growing area of our business, although its
revenues are and for the foreseeable future are expected to be
only a small portion of our overall revenue base. 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.

We believe that we are the largest provider of
wireless data in the industry in terms of annual revenue. We had
approximately 6.6 million customers actively using our data
services at December 31, 2003,

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|Item 1. | Business

approximately 789,000 of which we served with
advanced applications over our separate Mobitex data network,
with the rest using services we offer over our cellular and PCS
networks.

Wireless Data Services Offered over our
Mobitex Data Network.We believe that
we are the largest provider of corporate messaging. We offer
value-added wireless data applications to businesses and
individuals who have a need for timely data communications to
maintain a competitive advantage or increase personal
productivity. We are a leader in providing wireless data
services for complex businesses such as transportation,
telecommunications, utilities and other businesses. Our Mobitex
data network covers over 90% of the U.S. metropolitan
population, and provides coverage in 99 of the 100 largest
metropolitan areas.

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. These
same businesses can also perform remote monitoring of devices as
well as temporary or permanent wireless point-of-sale
transaction processing.

We also provide individuals and mobile
professionals with the ability to access information from web
sites, conduct mobile commerce transactions (e.g., trade
stocks, check bank statements and buy products) and send and
receive Internet e-mail, all through a hand-held, wireless
device.

We sell our customers terminal equipment, such as
Blackberry hand-held pagers, and specialized devices for
use in field/sales force automation, delivery truck and fixed
location applications. In addition to collecting equipment fees,
we enter into customer contracts with flat or usage-based fees.

Wireless Data Services Offered through our
Cellular and PCS Networks.We
currently offer wireless e-mail services, short messaging and
other data services throughout our cellular and PCS networks. At
December 31, 2003, we had over 19 million customers
provisioned with wireless Internet and short messaging data
services as part of their wireless service. An example of these
services is XpressMailSM service, which allows
businesses to access their Microsoft Exchange Server or
Lotus Notes corporate e-mail and other desktop
applications in real time from Internet-enabled wireless phones
or from Blackberry handheld devices. We also offer
wireless Internet access for use on our digital cellular and PCS
networks through a variety of different devices including
wireless phones, personal computer (PC) cards, and personal
digital assistants (PDA).

Our wireless Internet service gives customers
access to timely, personalized information such as news,
weather, sports, stocks, directions, restaurant reviews, movie
show times, yellow and white pages directories, games and
graphics through their wireless handsets. We also offer a range
of messaging services to our customers including short messaging
and instant messaging with AOL, multi-media messaging and
mobile polling. In 2003, we have enabled our customers to
download many applications like games and ringtones directly
from their handsets using minimal keystrokes. By making the
download process convenient and user-friendly, we make data more
accessible to our customer base and hope to increase the
penetration of customers using data services as well as repeat
customers. Our goal is to provide an array of high quality,
productivity-enhancing wireless data services across our
cellular and PCS networks through the use of GPRS and EDGE
technologies (see definitions of GPRS and EDGE in the following
Our Network section), similar to and even more
robust than those we currently offer across our Mobitex data
network.

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CINGULAR WIRELESS LLC





PART I




|        |         
|------- | --------
|Item 1. | Business

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 also have 900 MHz licenses to provide data services over
the Mobitex data network. We obtained access to spectrum through
application lotteries, mergers, acquisitions, exchanges,
ventures, Federal Communications Commission (FCC) auctions and
uncontested application grants of cellular licenses.



| |         
| | --------
| | Coverage

We have access to cellular/PCS licenses in 45 of
the 50 largest U.S. metropolitan areas, covering an
aggregate of 236 million POPs, or approximately 81% of the
of U.S. population, and operate in 43 of the top 50 markets
across the country. In addition, we have signed numerous roaming
agreements to ensure our customers can receive wireless service
in virtually all areas in the United States where cellular/PCS
wireless service is available. Our cellular/PCS networks are
substantially constructed. Our Mobitex data network covers over
90% of the U.S. metropolitan POPs, including the 50 largest
U.S. metropolitan areas.

See  Regulatory
Environment  Factors Relating to Our Industry
for FCC network system build requirements.



| |           
| | ----------
| | 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 closer spacing of cells and towers
than in a cellular network to accommodate the different
characteristics of the PCS radio signals. However, PCS service
does not differ functionally to the user from digital cellular
service.

Cellular systems initially provided service
solely by means of analog transmissions, and, because of
differing digital standards, the FCC requires that cellular
radio licensees offer analog service until 2008. PCS systems
have been constructed using only digital technology and are not
required by the FCC to offer analog service.

Digital systems convert voice or data signals
into a stream of digits that is compressed before transmission,
thereby enabling a single radio channel to carry multiple
simultaneous transmissions. Our experience has shown that
digital technology offers many advantages over analog
technology, including substantially increased network capacity,
lower operating costs per unit, reduced susceptibility to fraud
and the opportunity to provide improved data transmissions.
Digital service also provides clear benefits to our customers,
including improved voice quality, extended battery life, greater
call security and lower per-minute costs. Digital service
enables enhanced features and services, such as interactive
messaging, facsimile, e-mail and wireless connections to
computer/data networks and the Internet. A majority of our
analog customers have migrated from analog to digital service.
During December 2003, digital usage accounted for over 99% of
our total usage based on minutes.

Because of the advantages of digital technology,
cellular operators have been adding digital communications
equipment to their systems for some time and are expected to
increase both the footprint and the

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CINGULAR WIRELESS LLC





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|        |         
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|Item 1. | Business

spectrum dedicated to digital service. We offer
analog and digital service in our cellular markets and digital
service in our PCS markets.

Third generation wireless communications
standards are being developed in response to the expected
consumer demand for high-speed data services. These technologies
will allow high-speed wireless packet-switched data services and
ultimately voice services using Internet protocol, thereby
providing customers with greater connectivity and communications
capabilities. Packet-switched technology allows for data to be
sent and received in bursts, instead of requiring continuous
transmission over the network for a duration of the
communication, thereby providing the user always on
connectivity. The introduction of packet-switched technology
allows for devices that support simultaneous voice and data
communications, e.g., receive voice calls while browsing
the Internet. In addition, billing can be based on the quantity
of data transmitted, not on the duration of the transmission.
These technologies will also allow more robust features for
voice communications and increased network capacity.

Currently the largest United States wireless
communications providers use the following principal
technologies:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Global System for Mobile Communications, or
    GSM used by
    us, AT&T Wireless and T-Mobile USA, Inc. (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 by far the worlds most dominant
    wireless technology. Hardware and software enhancements,
    referred to as General Packet Radio Service, or
    GPRS, and Enhanced Data Rates for GSM Evolution, or
    EDGE, allow high-speed data communications.
| 
| | Time Division Multiple Access, or
    TDMA used by
    us and AT&T Wireless in some markets pending full deployment
    of, and customer migration to, GSM/GPRS/EDGE.                                                                                                                                                                                                                                                                                                                                                                                
| 
| | Code Division Multiple Access, or
    CDMA used by
    Verizon Wireless and Sprint PCS. CDMA is a technology originally
    developed by the military, but adapted for commercial usage and
    licensed by Qualcomm Incorporated.                                                                                                                                                                                                                                                                                                                   
| 
| | integrated Digital Enhanced Network, or
    iDEN®
    used by 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, GSM allows for up to eight and iDEN allows up to six.
CDMA technology works by encoding individual conversations into
a series of digits and then spreading the transmission of the
sequence over available spectrum.

These technologies are not currently compatible
or interchangeable with each other and require separate types of
wireless phones and network infrastructure.

However, the GSM/ANSI-136 Interoperability Team,
or GAIT, has developed standards promoting the
ability to use one phone for both GSM and TDMA voice and data
service. We are selling GAIT phones in some markets to
facilitate the migration of customers from TDMA to GSM service.

Prior to 2002, our network consisted of both TDMA
(approximately 70%) and GSM (approximately 30%) technologies. In
October 2001 we announced a plan to overlay GSM/GPRS throughout
our TDMA network and upgrade our data network to EDGE, our
choice for third generation, or 3G, wireless
technology. EDGE, a faster version of GPRS technology, is
expected to provide our customers with greater connectivity and
communications capabilities, including faster speeds for
accessing the wireless

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Internet. The following reasons underlie our
decision to overlay GSM/GPRS/EDGE technology on our TDMA systems:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | GSM has up to three times the voice capacity of
    the TDMA network.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| 
| | We did not believe we could continue to offer
    competitive voice and data communications services over the long
    term unless we migrated from TDMA technology. TDMA was not a
    predominant global technology, and vendor support for this
    technology was less robust than for CDMA and GSM. With the
    decision of AT&T Wireless to overlay its TDMA network with,
    and gradually migrate its customer base to, GSM systems, the
    prospects for innovative research and development of TDMA
    systems seemed less likely than for CDMA and GSM systems.
| 
| | Since TDMA systems comprised a relatively small
    percentage of wireless systems, more substantial economies of
    scale can be realized by using hardware and software that are
    more prevalent than TDMA.                                                                                                                                                                                                                                                                                                                                                             
| 
| | TDMA technology, standing alone, would not
    support high-speed/capacity 3G, data systems.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| 
| | GSM technology is compatible with all global GSM
    systems, and if a wireless handset is capable of operating on
    international frequencies as well as domestic frequencies,
    international roaming is possible with the same handset.                                                                                                                                                                                                                                                                                                                                

While we continue to utilize TDMA in the markets
traditionally using this technology, we have substantially
completed adding GSM/GPRS/EDGE in those markets and expect to
complete this project in 2004.

We decided to overlay GSM/GPRS/EDGE instead of
CDMA or iDEN for the following reasons;



|  |                                                                                                                                                                                                                                                                       
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Since approximately 30% of our network already
    utilized GSM technology, it would have been substantially more
    expensive to construct CDMA or iDEN over our entire network than
    GSM/GPRS/EDGE over about two-thirds.                                       
| 
| | We believe we will be able to offer our customers
    a greater variety of handset models and communications services
    by migrating our business offerings to the predominant GSM
    standard.                                                                    
| 
| | Technically simpler handsets compared to CDMA
    (less processing is required), combined with royalties payable
    to Qualcomm for the use of CDMA technology equate to a slight
    inherent cost advantage of GSM over CDMA technology.                           
| 
| | Large commonality of handsets with the rest of
    the GSM community should result in enhanced development efforts
    and larger production runs, lowering costs further.                                                                                            
| 
| | While the primary advantage of the iDEN
    technology is its support of a push-to-talk service,
    we believe that such services can also be supported on GSM
    technology, and we expect such services to be available from GSM
    vendors in the near future.

The disadvantages of GSM/GPRS/EDGE versus CDMA
are:



|  |                                                                                                                                                                                                                                                
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Current CDMA systems offer greater voice
    capacities than GSM.                                                                                                                                                                              
| 
| | GSM/GPSR/EDGE offer higher data speeds than the
    currently available CDMA 1XRTT technology. Both GSM and
    CDMA will have technology evolution paths that will offer
    comparable higher speed throughputs and capacities in the future.

The predominant digital technologies, GSM and
CDMA, are dynamic and evolutionary technologies in that a
variety of technical enhancements are constantly being developed
and implemented to extend the

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capacity and performance capabilities of each.
Because the operation and performance of wireless communications
networks and handsets is functionally identical on all digital
technologies, we believe that 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.

Mobitex Technology.Our Mobitex data network operates over a 900 MHz network
and uses packet-switched technology. We are currently the only
U.S. operator of a Mobitex data network.



| |                  
| | -----------------
| | Spectrum Capacity

We currently own licenses for spectrum in the 850
MHz and 1900 MHz bands. 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 significantly. We
anticipate needing access to additional spectrum in selected
densely populated markets to meet expected demand for existing
services and throughout our network to provide full 3G services
beyond EDGE. Some of this additional spectrum requirement would
be met by the pending acquisition of 1900 MHz spectrum from
NextWave Telecom, Inc. (NextWave) and the pending acquisition of
AT&T Wireless. See also Item 7, Management Discussion
and Analysis of Financial Condition and Results of
Operations  Liquidity and Capital
Resources  Cash Requirements  Licenses
Acquisition.

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. 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.

From time to time, we exchange or purchase
licenses for spectrum and enter into joint ventures to share
networks. Joint ventures such as those described below allow us
to enter new markets more quickly and for substantially less
capital costs. See also Item 7, Managements
Discussion and Analysis of Financial Condition and Results of
Operations  Liquidity and Capital
Resources  Cash Requirements for further information
regarding such joint ventures.

Joint Ventures and Spectrum Exchanges /
Acquisitions



| |           
| | ----------
| | Salmon PCS

In 2000, we and Crowley Digital Wireless, LLC
(Crowley Digital) formed a joint venture, Salmon PCS LLC,
(Salmon) to acquire PCS licenses being auctioned by the FCC. We
do not control Salmon. Through the auction, Salmon obtained 45
licenses covering over 11 million POPs. Under the terms of
this venture, we act as manager of the PCS systems, subject to
Crowley Digitals oversight and control. The management
agreement has a term of eight years. In addition, pursuant to a
trademark license agreement, Salmon has elected to use our
trademarks in its business to offer Cingular-branded services.

Crowley Digital has the right to put its interest
in Salmon to us at a price in cash equal to its initial
investment plus a specified rate of return. The put right can
only be exercised at certain times, and we estimate that the
earliest exercise period will begin in February 2006 and the
latest exercise period will end in April 2008. We estimate that
the fair value of this put obligation was approximately
$126 million and $139 million as of December 31,
2002 and 2003, respectively. This obligation is included in
Other noncurrent liabilities in our consolidated
balance sheets.

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We entered into a credit agreement with Salmon
under which, until November 2006, we will provide through
secured loans, upon Salmons request, substantially all of
the capital Salmon will require to pay for the licenses,
construct its system and fund working capital requirements.
Loans are repayable no later than May 2008, with interest at a
rate of 9% per annum, or 14% per annum if Salmon terminates the
management agreement or trademark agreement.



| |                           
| | --------------------------
| | Transactions with T-Mobile

In May 2001, we and T-Mobile exchanged FCC
licenses covering approximately 36 million POPs each. We
received licenses covering 10 MHz of spectrum for the five
boroughs of New York City, all of Long Island as well as parts
of upstate New York, northeast Pennsylvania, St. Louis, Detroit,
Vermont, New Jersey and Connecticut. In exchange, we transferred
to T-Mobile licenses covering 10 MHz of spectrum out of the
30 MHz of spectrum that we had in the California and Nevada
markets. As a result of the exchange, we gained access to
spectrum covering over 20 million additional POPs in the
northeastern United States.

Subsequently, in November 2001, we and
T-Mobile formed a jointly-controlled venture, GSM Facilities,
LLC (GSMF), to allow the companies to share network
infrastructure in the California, Nevada and New York City
markets. Each of our respective existing networks in these
markets, which use GSM technology and cover approximately
56 million POPs, has been contributed to the venture. Both
companies have access to the ventures network
infrastructure, and pursuant to the terms of the ventures
commercial arrangements, are able to provide our respective
customers access to a weighted average spectrum depth of
39 MHz in these markets. We and T-Mobile buy network
services from the venture but each of us retained ownership and
control of our own licenses. Funding for capital investments and
cash operating expenses of the venture is generally made by us
and T-Mobile on a pro rata basis based on network traffic. We
also independently market our unique services to customers using
our own brand name and utilize our own sales, marketing, billing
and customer care operations. In July 2002, we began marketing
and providing service in the New York City market and T-Mobile
began providing service in California and Nevada through the
venture. Our participation in this venture gives our customers
access to more spectrum and is expected to result in more robust
networks and lower operating expenses and capital expenditures
than if we had constructed our own network.



| |                                     
| | ------------------------------------
| | Joint Venture with AT&T
    Wireless

In January 2002, we entered into an
agreement with AT&T Wireless to form a jointly-controlled
and equally-owned venture to construct a GSM voice network with
GPRS/EDGE data technologies along a number of major highways in
order to ensure availability of GSM/GPRS/EDGE service to our
customers, and reduce roaming expenses we pay to other carriers
when our customers travel on those highways. We and AT&T
Wireless will each buy services from the venture and provide
services under our own brand names. In March 2003, we and
AT&T Wireless contributed licenses and assets of equal
value. As of December 31, 2003, we had an investment in the
venture of $21 million.



| |                                     
| | ------------------------------------
| | Spectrum Swap with AT&T
    Wireless

In December 2002, we announced an agreement
to transfer to AT&T Wireless our wireless license and
operations in Kauai, Hawaii and wireless licenses in Alabama,
Idaho, Oklahoma, Mississippi and Washington. In return, we would
receive wireless licenses in Alabama, Arkansas, Georgia,
Kentucky, Louisiana, Mississippi, Tennessee and Texas. This swap
was completed in June 2003. As a result, our licensed
coverage area increased by approximately one million POPs.

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| |                   
| | ------------------
| | Other Transactions

In December 2003, we acquired three PCS licenses
in Florida from Sunshine PCS, for approximately $14 million.

In February 2004, we completed an exchange
transaction with Dobson Cellular Systems, Inc. We transferred
$22 million cash and wireless property in Michigan to
Dobson in exchange for wireless property in Maryland.

In February 2004, we acquired an operational
cellular system in Louisiana and other FCC licenses in
Louisiana, Arkansas and Texas from Unwired Telecom Corporation.
We expect the aggregate consideration for this transaction to be
approximately $28 million cash.



| |                     
| | --------------------
| | Pending Transactions

Acquisition of NextWave
licenses.In August 2003, we
executed an agreement with NextWave and certain of its
affiliates pursuant to which we would purchase FCC licenses for
wireless spectrum for $1.4 billion cash. This pending
acquisition is for 1900 MHz spectrum licenses in 34 markets
covering 83.4 million POPs with all but 3.4 million
POPs in existing Cingular licensed areas. The transaction is
subject to various closing conditions, some of which are outside
of the parties control. The transaction is expected to
close in the first half of 2004.

Acquisition of AT&T
Wireless.In February 2004, we
executed an agreement to acquire AT&T Wireless by means of a
merger for an aggregate consideration of approximately
$41 billion cash. SBC and BellSouth have agreed to provide
us all of the funds necessary to pay the merger consideration.
The closing of the acquisition is expected to occur in late 2004
and is subject to the affirmative vote of AT&T
Wireless shareholders, FCC, Hart Scott Rodino and other
regulatory approvals and other customary closing conditions. The
merger agreement provides that if the conditions to closing are
not satisfied by December 31, 2004, it will be terminated,
subject to extension to June 30, 2005 by either party if,
as of December 22, certain regulatory approvals have not
been obtained (in very limited circumstances it may be extended
another 60 days). If AT&T Wireless enters into or
consummates certain types of business combination transactions
within 15 months after a designated termination of the
merger agreement, AT&T Wireless would be obligated to pay to
BellSouth and SBC an aggregate fee of $1.4 billion.

The agreement provides that Cingular and AT&T
Wireless are required to use their best efforts to consummate
the merger as promptly as reasonably practicable, and BellSouth
and SBC are required to use reasonable best efforts to assist
Cingular in obtaining regulatory approval. However, none of us,
SBC nor Cingular will be required to take actions required by
regulators as a condition to approval of the merger, and we will
not be required to close the merger, if the aggregate adverse
impacts of required sales of customers or spectrum or any
conditions imposed on either BellSouth, SBC and/or Cingular
would exceed $8.25 billion. For purposes of calculating the
impacts regarding sales of customers or spectrum, the parties
have agreed that the adverse impact of (a) any required
divestitures of a market would be equal to the number of
customers in the market required to be divested multiplied by
$825 and (b) any required divestitures of spectrum only
would be equal to the amount of spectrum required to be divested
multiplied by $0.50 per MHz/POP. Any other adverse impacts
on BellSouth, SBC and/or Cingular would be calculated at the
time the conditions are imposed. Each of SBC and BellSouth has
agreed not to take any action reasonably likely to prevent the
closing of the merger.

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Competition

There is substantial and increasing competition
in all aspects of the wireless communications industry. We
expect this to continue even after our planned acquisition of
AT&T Wireless. We compete for customers based principally on
our call quality, service offerings, price, coverage area and
customer service.

Our competitors are principally the other
national providers of cellular, PCS and other wireless
communications services  Verizon Wireless, AT&T
Wireless (until the acquisition is consummated), Sprint PCS,
Nextel and T-Mobile, which together with us serve almost 80% of
the U.S. wireless customers. We also compete with smaller
companies, resellers and wireline telephone service providers.
Verizon Wireless ranks first among the six national carriers in
terms of number of customers served as of December 31, 2003
and first in 2003 revenues and profitability. We ranked second
among these carriers according to number of customers served.
Although AT&T Wireless had fewer customers, their 2003
revenues slightly exceeded ours.

Some of our competitors have greater financial,
technical, marketing, distribution and other resources than we
do. In addition, some of the other large providers have more
spectrum depth and extensive coverage areas than we do. Some of
the indirect retailers who sell our services also sell our
competitors services. Moreover, we may experience
significant competition from companies that provide similar
services using other communications technologies and services.
Some of these technologies and services are now operational and
others are being developed or may be developed in the future.

Consolidation, alliances and business ventures
may 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. We have numerous other competing wireless
providers in our markets. Consolidation may create larger,
better-capitalized competitors with substantial financial,
technical, marketing, distribution and other resources to
compete with our product and service offerings. Competitors with
more complete nationwide footprints may be able to offer
nationwide services and plans more economically due to economies
of scale and less dependence on roaming arrangements. In
addition, global combinations of wireless carriers 
such as the alliance between AT&T Wireless and NTT DoCoMo
Inc. of Japan, the joint venture between Sprint and Virgin
Group, Verizon Wireless, which is a joint venture between
Verizon and Vodafone plc, and mergers and acquisitions, such as
the acquisition of T-Mobile by Deutsche Telekom  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. In addition, infrastructure sharing ventures,
while facilitating our entry into new markets, also allow our
partners to compete with us in those markets.

Governmental policy at all levels favors robust
competition. For example, under current FCC rules, six or more
PCS licensees, two cellular licensees and one or more enhanced
specialized mobile radio, or ESMR, licensees may
operate in each geographic area. This structure has resulted in
the presence of multiple competitors in our markets and makes it
challenging for us to attract new customers and retain existing
ones. In addition, specialized mobile radio, or SMR,
dispatch system operators have constructed two-way ESMR digital
mobile communications systems on existing SMR frequencies in
many cities throughout the United States, including most of the
markets in which we operate. Wireless number portability rules
recently implemented by the FCC that enable customers to retain
their wireless local numbers when switching carriers further
increase competition.

Our ability to compete successfully will depend,
in part, on the quality of our network and marketing efforts and
on our ability to anticipate and respond to various competitive
factors affecting the industry.

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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
wireless/wireline service area overlap with SBC and BellSouth.
As a result of competition, we have in the past and may in the
future be required to:



|  |                                                                                                          
|- | ---------------------------------------------------------------------------------------------------------
| | reduce prices for our services and products;                                                             
| 
| | restructure our service packages to provide more
    services without increasing prices;                 
| 
| | further upgrade our network infrastructure and
    the handsets we offer;                                
| 
| | increase our advertising, promotional spending,
    commissions and other customer acquisition costs; and
| 
| | increase our spending to retain customers.                                                               

The primary advantages other carriers have over
us are spectrum depth and population coverage. We address this
by seeking additional licenses in areas where we are at a
spectrum disadvantage, via the following options:



|  |                                                                                                                                                                                                                                                                                                           
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | by participating in FCC auctions, such as the
    auction that ended in January 2001 that resulted in our
    acquiring access, through Salmon, to an additional
    45 licenses;                                                                                                                         
| 
| | by acquiring licenses from other carriers, either
    by direct purchases, as in Salt Lake City and the pending
    acquisition of licenses from NextWave, or by swaps for licenses,
    as in the New York metropolitan markets, in exchange for
    licenses for spectrum where we have excess capacity;
| 
| | by joint venturing with other carriers to pool
    spectrum or share network infrastructure, as in our AT&T
    Wireless and T-Mobile ventures;                                                                                                                                                           
| 
| | by leasing spectrum under the FCCs new
    spectrum leasing rules; and                                                                                                                                                                                                                                   
| 
| | by acquiring companies that possess strategic
    assets, such as the planned acquisition of AT&T Wireless.                                                                                                                                                                                               

In addition, because we are in the process of
overlaying our TDMA network with GSM/GPRS/EDGE technology and in
the process of transitioning our TDMA customers to that new
technology, we will operate at somewhat of a disadvantage to
other carriers (e.g., Verizon Wireless, Sprint PCS,
Nextel and T-Mobile) that utilize an established common
technology throughout their networks. We are meeting these
challenges by offering cellular and PCS phones that will operate
on both TDMA and GSM networks as well as the standard GSM-only
and TDMA-only handsets and negotiating roaming agreements to
allow our customers to use TDMA or GSM networks of other
carriers until our GSM network overlay is completed. At the end
of 2003, we had 93% of our POPs currently with cellular or PCS
service covered by GSM/GPRS and 20% covered by EDGE.

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

Our business strategies are to:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Expand our Customer Base
    Profitably.Recent surveys indicate
    that we have firmly established our brand, showing total brand
    awareness of approximately 95% as of December 31, 2003,
    similar to the brand recognition of competitors who have been in
    the marketplace with their brand substantially longer than we
    have. We believe that we can capitalize on this brand
    recognition and our extensive distribution capabilities to
    attract new customers, including those customers switching
    service from other wireless

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | carriers. We can offer new innovative product
    plans that provide both favorable economics and customer value
    such as our current rollover plans. We also benefit
    from having the largest wireless/wireline service area overlap
    in the United States as a result of our affiliation with SBC and
    BellSouth. We intend to further capitalize upon this strength
    and expand our distribution and bundled product offerings with
    SBC and BellSouth as well as explore future opportunities to
    integrate wireless/wireline services such as
    FastForwardTM. In October 2003, we introduced
    FastForwardTM, a patented cradle device that
    plugs into an electrical outlet and acts as charger but when
    cradled, calls to the wireless phone are forwarded
    to a designated wireline phone.                                                                                                                  
| 
| | Reduce Costs and Enhance Service by Leveraging
    Our Large Scale and National Scope.Since our formation, we have made progress in realizing cost
    savings, including lowering of equipment costs resulting from
    our combined purchasing power, integration of support and
    billing systems, reduction of roaming rates and consolidation of
    customer care facilities, headquarter offices and distribution
    centers. With major integration projects completed, we are
    positioned to realize the savings from these efforts while
    deploying better tools to serve our customers.                                                                                                                                                                                                                                                                                                                                                 
| 
| | Increase the Capacity, Speed and Functionality
    of our Cellular and PCS Networks by Deploying a Common Voice and
    Data Technology Throughout our
    Networks.We are currently completing
    a project of overlaying GSM/GPRS technology throughout our TDMA
    network to provide a uniform technology platform throughout our
    coverage area. At December 31, 2003, 93% of our POPs
    currently with cellular or PCS service had access to GSM voice
    and GPRS data technology, with the remaining coverage areas to
    be completed in 2004. In addition, we intend to upgrade our GPRS
    data capabilities to EDGE to significantly improve data speeds
    and spectral efficiency. As of the end of 2003, 20% of our POPs
    currently with cellular or PCS service had EDGE capabilities,
    with the remainder to be completed in 2004. This transition from
    GPRS to EDGE is primarily completed through software upgrades.
| 
| | Develop and Promote Advanced Wireless Data
    Applications Over Multiple Communications
    Devices.We currently provide advanced
    data services over our Mobitex and cellular/PCS networks,
    including interactive messaging and wireless Internet access.
    Our Mobitex data network services also include specialized
    business applications for transportation, telecommunications,
    banking, utilities and other businesses, including mobile field
    personnel management, remote monitoring, point of sale and other
    mobile commerce applications. The deployment of GPRS and EDGE
    throughout the cellular/PCS networks enables us to further
    expand data applications to our broad base of voice customers
    using handsets, personal computers and personal digital
    assistants.                                                                                                                                 
| 
| | Expand our Existing Network Footprint and
    Capacity Where Economical.We will
    opportunistically expand our network and services. Where
    economical, we will pursue acquisition of spectrum from private
    ownership, as such our planned acquisition of spectrum licenses
    from NextWave and our planned acquisition of AT&T Wireless,
    or through FCC auctions. We can also gain access through
    innovative means such as leasing or spectrum swaps. We also have
    the ability to expand our service through network sharing
    ventures, such as our GSMF venture with T-Mobile. See Our
    Network. We are also actively working with other carriers
    to facilitate a strong GSM/GPRS/EDGE footprint across the
    continental United States through economical roaming agreements.                                                                                                                                       

Marketing

We are focusing our marketing strategy on
promoting the Cingular brand, providing compelling products and
services, delivering high-quality service and customer care,
leveraging our extensive distribution

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network and cross-marketing with SBC and
BellSouth. With 24 million cellular and PCS customers at
December 31, 2003, we also have the opportunity to provide
value-added services to a large customer base.

Our advertising utilizes integrated, multi-media
tools, including television, radio, newspaper, outdoor, Internet
and point of sale. Our advertising objectives include:



|  |                                                                                                        
|- | -------------------------------------------------------------------------------------------------------
| | increasing new customer growth by attracting
    prospective customers to a Cingular sales channel, and
| 
| | aiding customer retention by reinforcing the
    value of an existing relationship with Cingular.      

In February 2003, we repositioned the brand with
Cingular Fits You BestSM, a campaign that
gives potential customers tangible reasons to choose Cingular.
In addition, we began co-branding with SBC and BellSouth in
their respective markets. These changes have led to dramatic
improvements in brand awareness and brand attributes. An example
is our rollover advertising that has had great
success in building awareness for our unique
rollover feature where unused anytime minutes
rollover from month to month for up to one year. It has also
resulted in building important brand attributes that consumers
consider when choosing a wireless carrier, such as trust and
fairness. 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 voice services based on three basic calling plan structures
offered throughout our service areas: Cingular
RegionSM and Cingular NationSM rate plans.
The plans differ in terms of the geographic areas that are
included as the local calling areas. The costs and terms of each
plan depend on the customers location and the plan
selected. We have targeted plans to specific customer segments:
Family Talk®, a shared minutes plan; KICSM (Keep
In Contact), our prepaid product for those preferring to pay as
they use, and a host of plans targeted to various segments of
the business-to-business market. In addition, our GSM/GPRS/EDGE
migration is nearly complete, making advanced features, products
and services available to customers around the country.

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.

Our strategy for data offerings is to leverage
the marketing and operational experience that we have gained as
a leader in wireless data services and match our customers
needs with our existing data products or with customized
solutions. We offer an entire suite of consumer data products
aimed at enhancing the customer experience, including internet
access, picture messaging through multimedia messaging services,
short messaging services, games, graphics, polyphonic ringtones
and supertones and instant messaging with AOLTM. We
also offer 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.

Sales and 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, 2003,
we had over 88,000 distribution points of presence.
These included approximately 1,700 company-owned stores and
kiosks, 8,000 authorized agent locations, more than 77,000
national retail points of distribution, including those
distributing prepaid services, and more than 1,500 direct
business-to-business salespeople. 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

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product offerings offer a combination of 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 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 2004, 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.

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, 2003, we had
approximately 39,400 employees. Approximately 22,000 of our
employees are represented by the Communications Workers of
America, with contracts expiring on various dates between
February 2004 and February 2007. Most of the 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 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 Communications Workers of America 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

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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
United States 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 United States,
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 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 metropolitan statistical
areas, or MSAs, or rural service areas, two in each
area. At present, no entity may hold overlapping cellular
licenses in the same rural service area without a waiver from
the FCC.

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 United

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States 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.

Mobitex Wireless Data Services.We have separate licenses for each of
the 900 MHz spectrum blocks that we use to provide most of
our business data services. In 2003, the FCC approved our
substantial service demonstration that we have met
the network system build requirements of these licenses. Like
other licenses, however, these are renewable every 10 years
and require showings of continued substantial
service and compliance with other license conditions, as
described above.

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, 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
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

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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 the possibility exists that entry
by a foreign carrier 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 United States 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.

There are additional spectrum bands that may be
suitable for our business, but this spectrum has not been
allocated and auctions of this spectrum are not imminent.

In early 2004, the FCCs new spectrum
leasing rules become effective. These 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 minimal involvement in leasing activities. For
these reasons, we view spectrum leasing as an attractive
alternative to license acquisition in areas where we are
spectrum constrained.

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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.

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 in
metropolitan markets. 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
requiring payments to the U.S. Treasury and 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 2003, we had
payment obligations into the federal universal service fund of
approximately $274 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.

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.

On November 24, 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 require wireless carriers to
offer number portability to their customers in the top
100 MSAs now and to all other customers no later than
May 24, 2004. These rules will likely increase competition,
costs and customer churn.

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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 gigahertz (GHz) Mobile Satellite Service or MSS for
fixed and mobile services. The FCC now proposes to combine 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. If adopted by the FCC, the
new PCS G Block could be licensed to other wireless
competitors. One plan would grant the PCS G block to
Nextel in return for it relinquishing certain of its spectrum in
the 700/800/900 MHz bands to alleviate public safety
interference concerns. Another plan would grant the spectrum in
specific locations to Multipoint Distribution Service licensees
who are being displaced by the FCC to make room for new Advanced
Wireless Service spectrum allocations in the 2 GHz band.
Other possible allocations, including the auctioning of that
paired spectrum, may be considered by the FCC in its decision
making process.

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 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.

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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 proposed 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 have become
increasingly aggressive in 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 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.

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 and increasing competition in all aspects
of the wireless communications industry. We expect this to
continue even after our planned acquisition of AT&T
Wireless. 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.

Our competitors are principally five other
national carriers doing business as Verizon Wireless, AT&T
Wireless (until the acquisition is consummated), Sprint PCS,
Nextel Communications and T-Mobile, respectively, and a large
number of regional providers of cellular, PCS and other wireless
communications services, resellers and wireline telephone
service providers. NextWave holds a substantial number of radio
spectrum licenses to provide PCS service, and it may sell the
licenses to our competitors, form ventures and/or construct
wireless data networks, which would increase competition for
wireless data customers.

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.

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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 may consolidate to
some extent in the next several years. 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 wireless data technologies, such as
Wi-Fi, are being developed and deployed by
competitors, which may make our wireless data offerings less
attractive.

If we do not successfully complete the
acquisition of AT&T Wireless, we will miss an opportunity to
achieve significant growth in the near
term.We agreed to acquire AT&T
Wireless for a number of reasons, including the following:



|  |                                                                                                                                                                 
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | AT&T Wireless fills in our spectrum and
    network footprints by covering areas where we do not have
    licenses or network infrastructure;                   
| 
| | AT&T Wireless adds depth to our spectrum
    position, 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,
    or ARPU, is higher than our customers ARPU;                                                                     
| 
| | 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 merger will reduce our incollect roaming
    costs that we incur because of our broader post-acquisition
    footprint.                                     

While we believe we have the ability to compete
vigorously in the marketplace now, we believe that we must grow,
either internally or through acquisition, to achieve our goal of
becoming the pre-eminent wireless carrier. Failure to consummate
the AT&T Wireless acquisition would place additional
challenges on us to reach this position through internal growth
or other acquisitions. This result would be exacerbated by the
combination of other of the major wireless competitors.

While there are risks in not closing the
acquisition of AT&T Wireless, the consummation of the
transaction poses significant challenges and
risks.As a result of our acquisition
agreement and efforts to close the transaction, our business
could suffer over the near term as a result of factors,
including:



|  |                                                                                                                                                                                                                                                                                                                                            
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | customer churn could increase if customers
    experience or anticipate service deterioration arising from
    delayed or ineffective merger integration;                                                                                                                                                                                  
| 
| | competition could increase as other carriers
    focus more on emphasizing and exaggerating potential service
    degradation;                                                                                                                                                                                                             
| 
| | required changes in the business to achieve
    regulatory approval for the acquisition could hinder our growth;
    and                                                                                                                                                                                                                   
| 
| | although we expect to achieve significant capital
    and operating cost synergies after the next several years, the
    implementation of integration efforts, transaction-related costs
    and possible continued deterioration of AT&T Wireless
    operating results will initially reduce our operating
    performance and margins.

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We will not control the operations of AT&T
Wireless prior to closing.Therefore,
we cannot implement policies to improve its operating
performance. If its management fails to execute its strategies
and policies to optimize the value of its business, we could
acquire a company with unsatisfactory performance and growth
prospects.

Delays in closing the acquisition of AT&T
Wireless would prevent us from owning it and implementing our
policies and integration initiatives.Such delays could make the integration efforts more challenging,
prolong the period before we begin realizing cost synergies from
the combination of the two companies, increase our operating
costs, increase customer churn, lower the value of the combined
companies and, depending on the severity of the delays, could
jeopardize the acquisition.

Factors that could delay the closing of the
acquisition include:



|  |                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | prolonged proceedings before the FCC pertaining
    to license transfers or before the U.S. Department of
    Justice pertaining to anti-trust clearance; and
| 
| | litigation challenging the acquisition agreement.                                                                                                            

Because we cannot control the policies,
strategies and operations of AT&T Wireless until the closing
of the transaction, we are unable to take action to address
previously disclosed problems at AT&T Wireless or otherwise
maximize the value of the business that we will acquire. If the
management of AT&T Wireless is not successful in meeting its
own operational challenges, its customer growth and financial
results could suffer and our ability to achieve cost reductions,
efficiently integrate the two businesses and restore customer
and financial growth after the closing could be significantly
jeopardized. Actual or perceived operational problems at
AT&T Wireless and adverse publicity about the timing of and
issues pertaining to the acquisition could result in increased
customer churn and decreased customer additions to both
businesses.

Two other national wireless competitors could
enter into an agreement to combine their operations, and if our
regulatory approval process is significantly extended,
circumstances could arise that could result in the FCC and the
U.S. Department of Justice approving that transaction
before reaching a decision with respect to ours. If that occurs,
there would be a heightened risk that those regulatory
authorities might disapprove our acquisition of AT&T
Wireless.

In order to obtain regulatory consents to
consummate the acquisition of AT&T Wireless, we and/or
AT&T Wireless may be required to make divestures of
assets or take other actions that would diminish the value of
the acquisition to us.In general, we
can terminate the merger agreement only for misrepresentations,
breaches and developments prior to the closing that are material
and adverse. We are excused from taking actions to satisfy
regulatory conditions only if the aggregate adverse effects on
us, SBC and BellSouth would be substantial.

There is no assurance we would be able to obtain
what we consider fair value for any required divestitures.
Consequently, we could be required to close the transaction and
acquire a substantially less valuable AT&T Wireless
than currently exits.

Furthermore, adverse effects on SBC and BellSouth
are included in the calculation of net adverse effects. As a
result, SBC and BellSouth could require us to terminate the
acquisition even if there is no devaluation of the acquisition
to us if they were required to take certain actions adverse to
their own interests as a condition of regulatory approval.

Acquisitions, including AT&T Wireless,
could be costly and time consuming to
integrate.One element of our strategy
is to expand the geographic coverage of our network, which we
could achieve by obtaining

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access to additional spectrum through acquiring
wireless carriers or forming joint ventures or alliances with
the existing businesses of other wireless providers. Integrating
existing operations that we could acquire into our own
operations may be difficult, time consuming and costly.

The challenges to integrate AT&T Wireless
into us include:



|  |                                                                                                                                                       
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | demonstrating to customers that the transaction
    will not result in adverse changes in client service standards
    or business focus;             
| 
| | integration and rationalization of separate
    analog, TDMA and GSM network systems;                                                                 
| 
| | consolidating and rationalizing corporate
    information technology (IT) and administrative infrastructures;                                         
| 
| | combining product offerings;                                                                                                                          
| 
| | coordinating sales and marketing efforts to
    communicate our capabilities effectively;                                                             
| 
| | preserving distribution, marketing or 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;                                                                  
| 
| | persuading employees that business cultures are
    compatible, maintaining employee morale and retaining key
    employees; and                      

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

Our initiatives to migrate customers to a new
technology could result in heightened customer churn and lower
profits.Our networks currently
utilize two distinct digital voice technologies  GSM
and TDMA. In order to adopt a single standard across our
networks, we are concluding the process of adding GSM technology
to all of our networks. GSM is the predominant global standard
and offers substantial cost efficiencies to us and our
customers. As we encourage customers to migrate from TDMA to GSM
service, they may perceive shortcomings in the coverage and
quality of GSM service, compared to TDMA service, which could
cause them to switch from our service to the offerings of a
competitor.

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 the foreseeable future as
customers migrate to GSM technology. Due to our decision to
overlay our TDMA network with GSM technology 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 services. In addition, 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 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.

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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.We expect to acquire
substantial spectrum from the pending NextWave license and
AT&T Wireless acquisitions in 2004. Over the long term,
however, we may need more licensed spectrum to support high
speed data and other advanced services, expand our geographic
reach, to meet an expected increasing volume of customer usage
and to increase our customer base. 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. There are no spectrum auctions scheduled in the
near future at which we could obtain needed spectrum, and there
can be no assurance that we will be able to obtain access to
additional spectrum from secondary market sources on acceptable
terms. Therefore, we cannot give assurance that we will be
successful in obtaining access to the additional spectrum needed
to expand our geographic coverage and meet the growing needs of
our business.

If our roaming partners do not complete their
GSM networks and remain viable operators, our ability to provide
national GSM coverage could be
jeopardized.As a result, our
customers might conclude that our service is less satisfactory
than that of a competitor with a more substantial national
footprint, and our growth, churn rate and profit margin might
suffer.

Even upon the completion of our GSM/GPRS overlay
project, we will have to rely on roaming agreements with other
GSM/GPRS service providers to provide national GSM/GPRS
coverage. We have negotiated agreements with these carriers to
provide roaming services in certain geographic areas at rates
substantially more favorable than TDMA network roaming rates.
Some of these carriers are still building their GSM/GPRS
networks. If those carriers are delayed or prevented from
completing their GSM/GPRS networks, or if they cease doing
business, our GSM/GPRS 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.

We are committing a substantial amount of
capital to upgrade our wireless voice networks to offer advanced
data services, but there can be no assurance that widespread
demand for these services will
develop.While demand for our advanced
data services is growing, it is currently a small portion of our
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 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.

Our choice for the next generation of
technology, EDGE, is a new technology and could quickly become
obsolete and/or not commercially accepted, which could result in
a delay in offering new services.New
high-speed 3G wireless services are now being offered by
wireless carriers in the United States. We expect that 3G
services will combine the attributes of faster speed, greater
data capability, better portability and greater functionality
than services provided over existing second-generation networks.
We have chosen EDGE as our 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

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technologies are widely accepted, we may miss the
opportunity to offer those services because of our technology
choice. There is a risk that EDGE could be inadequate or become
obsolete. In addition, EDGE could receive less active support
from equipment vendors and/or be less commercially accepted by
users, which could be detrimental to our competitive position,
financial condition and results of operations.

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. In addition, we have ventures
to share infrastructure and save us a large portion of the cost
of building and maintaining our own network in certain areas
where we own wireless licenses, such as in California, Nevada
and the New York metropolitan area. If we experience
disagreements with our partners, it could adversely affect our
ability to serve our customers in those areas and profitably
grow our business.

Our network sharing ventures may impede our
ability to compete effectively in the covered
territories.We share network
infrastructure in some areas, e.g., California, Nevada
and New York City, with joint venture partners. As a result,
both our customers and our partners customers use the same
network infrastructure in these areas. If the combined demand
for service through the joint ventures far exceeds the network
capacity, temporary degradation of service and loss of customers
may result until capacity is increased.

Our business expansion and network upgrade
will require substantial additional capital, and we cannot
assure you that we will be able to obtain funding at a
satisfactory cost.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 and making other capital investments. In
addition, we will be required to make distributions to SBC and
BellSouth under our limited liability company agreement to cover
their tax liabilities that may arise from their interests in us
to the extent that we generate taxable income, which will
deplete cash available for these projects.

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 debt or to
raise equity. Incurring substantial amounts of additional debt,
failing to improve our operating performance and perceived
uncertainties surrounding the acquisition, SBC and BellSouth
financing and our integration of AT&T Wireless and the
NextWave licenses could result in negative actions by the major
credit rating agencies, which could increase our cost of
borrowing. In addition, we may not be able to obtain debt or
equity funds on satisfactory terms from the capital markets,
from other sources or from SBC or BellSouth, neither of which
has any obligation to provide us additional funding, besides the
agreement to provide funding for the AT&T Wireless
acquisition. The failure to obtain financing could result in,
among other things:



|  |                                                                                                                                                                                                                                            
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | delay or abandonment of our business development
    and expansion or network upgrade plans; or                                                                                                                                            
| 
| | failure to meet regulatory network system build
    requirements or to continue to provide service in all or
    portions of some of our markets, any of which could result in
    slower business growth and loss of competitive position.

Failure of certain of our key suppliers to
deliver equipment and services could adversely affect our
ability to operate our business.We
depend upon various key suppliers to provide us with equipment
and services that we need to continue our network upgrade and
operate our business. Some of these suppliers have

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experienced financial and business difficulties,
and if these or any of our other suppliers fail to provide
equipment or service to us on a timely basis, we may be unable
to provide services to our customers in a competitive manner. If
we are unable to obtain the hardware and software we need to
construct licensed territories, our licenses may be at risk of
termination for failure to satisfy the requirements contained in
our FCC licenses regarding the construction of our networks.

We have an agreement with Research in Motion
Limited, or RIM, to purchase Blackberry
hand-held devices for use in our data communications business. A
trial court has held that, in litigation against RIM by various
patent holders, 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.

The potential impact of unionization and
organizing activities, which we expect to increase, could
adversely affect our costs and results of
operations.All of our businesses,
excluding ventures, are subject to various agreements with the
Communications Workers of America (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. We have major labor
agreements with the CWA covering approximately 8,000 employees
that expire in early 2004. At the expiration of the 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.

Factors Relating to Our Industry

We may be adversely affected by the
significant changes that we expect the wireless communications
industry to undergo.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 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.

Our industry will continue to be adversely
affected if the economic slowdown
persists.While the economies of the
United States and many other nations are improving, they
continue suffering from sluggish employment growth. There can be
no assurance that this will not continue to adversely affect the
industry.

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
regulating customer billing 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

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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.

The FCCs local number portability regulations did
not include specific rules governing the process, and the
wireless carriers have had to negotiate inter-carrier agreements
with each other addressing procedures for transferring numbers
when customers change carriers. Because the software and
automated processes are new and the procedures are
non-standardized throughout the industry there have been and may
continue to be delays or malfunctions in the process of
transferring numbers when customers change carriers. This may
continue to exacerbate churn and expenses and slow customer
growth. It has and could continue to reduce revenues, since
carriers are not allowed to condition number portability on
bringing delinquent accounts current.

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 the following reasons: call
quality, service offerings, price, coverage area and customer
service. A high rate of churn would adversely affect our results
of operations because of loss of 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.
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. Carriers are not
allowed to condition number portability on bringing delinquent
accounts current. 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.

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 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.

State and local legislation regarding wireless
phone use while driving may adversely affect
us.Many states and municipalities
have proposed, and several, including New York State, New Jersey
and the District of Columbia have enacted, legislation that
requires the use of a hands-free accessory while driving an
automobile, which may discourage use and could decrease our
revenues from customers who now use their phones when driving.
Such legislation, if adopted and enforced throughout the areas
we serve, may reduce, in the short term, sales, usage and
revenues. In addition, allegations that using wireless phones

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while driving may impair drivers attention
may lead to potential litigation relating to traffic accidents
and further governmental regulation, which could adversely
affect our results of operations.

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. In addition,
FCC rules require all wireless licensees to meet specified
network system build requirements, and failure to comply with
these and other requirements in a given license area could
result in termination or cancellation of our license for that
license area or the imposition of fines by the FCC. 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.

Equipment failure and disasters may adversely
affect our operations.A major
equipment failure or a disaster 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.The
supply of new telephone numbers in some areas of the United
States is near exhaustion due, in large part, to competitive
wireline carriers having obtained large blocks of numbers and
rapidly growing customer demand for additional numbers for
wireless handsets and pagers as well as for second voice lines,
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 in the limited liability company agreement 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 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

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voice and fixed wireless data services and to market and sell
wireless services in areas in which we, our subsidiaries or
Salmon are not providing services pursuant to FCC licenses. SBC
and BellSouth may also amend the agreement to provide that they
can 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 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 the U.S.
mobile wireless voice and data business. These restrictions
could limit our ability to grow our business through initiatives
such as expansion into international 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 four
directors: two elected by SBC and two 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.Conflicts of
interest may arise between us and SBC and BellSouth when we are
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 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.






|        |           
|------- | ----------
|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 United States. Most locations are generally leased to
provide maximum flexibility.

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Switching centers and data centers are frequently
owned due to their critical role in our operations and high
set-up and relocation costs.

As of December 31, 2003, we operated a
direct distribution channel comprised of approximately 1,700
company-operated stores and kiosks. We have one central handset
and accessory distribution center located in Memphis, Tennessee.
Network properties included 200 switches and 21,700 cell sites.

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






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

In September 2003, an Administrative Law Judge of
the California Public Utilities Commission issued a Presiding
Officers Decision that recommended a fine of approximately
$12 million, plus potentially significant restitution to
customers, against Cingular for alleged violations of
Californias consumer protection laws. Cingular has
appealed that Decision to the full Commission.

We are a party 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
patent infringement, agency and reseller relationships, unfair
competition, marketing, advertising, promotions, sales, billing
and collection practices and potential 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 believe that
these matters will not be material to our financial position,
results of operations 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 owns approximately 60% of our ownership
interests and BellSouth owns approximately 40% of our ownership
interests. Cingular Wireless Corporation, our manager, owns the
remaining 0.0000001% 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 and 2003, we made no distributions
in either year.

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 funds generated from our operations, less
forecasted cash needs for the upcoming fiscal year and
distributions made to the members for their tax payments. In all
years presented, we were not required to make any distributions
of excess cash to the members and do not anticipate being
required to make any such distributions in 2004.






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

The following selected financial data should
be read in conjunction with the Cingular Wireless LLC
consolidated financial statements and the notes thereto
contained herein in Item 8. Financial Statements and
Supplemental 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  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.

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PART II (Dollars
in Millions)




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

Selected Historical Financial
Information  Cingular Wireless LLC

The following table presents selected historical
consolidated financial and operating data of Cingular Wireless
LLC from the date of its formation, April 24, 2000. The
financial data presented in this table is derived from the
historical financial statements and related notes, which are
included in this document. 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;
there were no meaningful results of operations of Cingular
Wireless LLC prior to that date.

To be consistent with emerging industry
practices, the historical Cingular Wireless LLC consolidated
statements of income for all periods presented have been
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. See also
Operating Expenses  Cost of Services
below. Operating income and net income for all periods have been
unaffected.

|                                                                                         |  |                                                  |        |                         |  |      |        |      |  |   |        |   |  |   |        |  
|---------------------------------------------------------------------------------------- |  | ------------------------------------------------ | ------ | ----------------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                         |  | Period from                                      |        |                        
|                                                                                         |  | April 24, 2000                                   |        | Year Ended December 31,
|                                                                                         |  | to December 31,                                  |        |                        
|                                                                                         |  | 2000                                             |        | 2001                    |  | 2002 |        | 2003
|                                                                                         |  |                                                  |        |                         |  |      |        |     
|                                                                                         |  |                                                 
|                                                                                         |  | (Dollars in millions, except for operating data)
|Statements of Income Data                                                                |  |                                                  |        |                         |  |      |        |      |  |   |        |   |  |   |        |  
|Total operating revenues                                                                 |  | $                                                | 3,085  |                         |  | $    | 14,268 |      |  | $ | 14,903 |   |  | $ | 15,483 |  
|Total operating expenses(1)                                                              |  |                                                  | 2,704  |                         |  |      | 11,720 |      |  |   | 12,382 |   |  |   | 13,194 |  
|                                                                                         |  |                                                  |        |                         |  |      |        |      |  |   |        |   |  |   |        |  
|Operating income                                                                         |  |                                                  | 381    |                         |  |      | 2,548  |      |  |   | 2,521  |   |  |   | 2,289  |  
|Income before provision for income taxes and
    cumulative effect of accounting changes |  |                                                  | 128    |                         |  |      | 1,700  |      |  |   | 1,251  |   |  |   | 1,050  |  
|Net income(2)                                                                            |  |                                                  | 127    |                         |  |      | 1,692  |      |  |   | 1,207  |   |  |   | 1,022  |  
|Balance Sheet Data                                                                       |  |                                                  |        |                         |  |      |        |      |  |   |        |   |  |   |        |  
|Total assets                                                                             |  | $                                                | 17,981 |                         |  | $    | 22,530 |      |  | $ | 24,122 |   |  | $ | 25,526 |  
|Total long-term debt                                                                     |  |                                                  | 11,280 |                         |  |      | 12,466 |      |  |   | 12,546 |   |  |   | 12,592 |  
|Cash Flow Data                                                                           |  |                                                  |        |                         |  |      |        |      |  |   |        |   |  |   |        |  
|Net cash provided by operating activities                                                |  | $                                                | 1,062  |                         |  | $    | 3,665  |      |  | $ | 3,592  |   |  | $ | 3,686  |  
|Net cash used in investing activities                                                    |  |                                                  | (1,218 | )                       |  |      | (3,945 | )    |  |   | (3,585 | ) |  |   | (3,368 | )
|Net cash provided by financing activities                                                |  |                                                  | 282    |                         |  |      | 721    |      |  |   | 334    |   |  |   | (87    | )
|Capital expenditures(3)                                                                  |  |                                                  | 959    |                         |  |      | 3,156  |      |  |   | 3,085  |   |  |   | 2,734  |  
|Operating Data                                                                           |  |                                                  |        |                         |  |      |        |      |  |   |        |   |  |   |        |  
|Licensed cellular/PCS POPs (in millions) (end of
    period)(4)                          |  |                                                  | 189    |                         |  |      | 219    |      |  |   | 219    |   |  |   | 236    |  
|Total cellular/PCS customers (in millions) (end
    of period)(5)                        |  |                                                  | 18.6   |                         |  |      | 21.6   |      |  |   | 21.9   |   |  |   | 24.0   |  
|Net additions, cellular/PCS customers (in
    millions)                                  |  |                                                  | 0.7    |                         |  |      | 1.9    |      |  |   | 0.4    |   |  |   | 2.1    |  
|Cellular/PCS customer churn(6)                                                           |  |                                                  | 2.8    | %                       |  |      | 2.9    | %    |  |   | 2.8    | % |  |   | 2.7    | %
|Average cellular/PCS revenue per user (ARPU)(7)                                          |  | $                                                | 51.69  |                         |  | $    | 52.91  |      |  | $ | 52.14  |   |  | $ | 51.32  |  
|Ratio of earnings to fixed charges(8)                                                    |  |                                                  | 1.49   |                         |  |      | 2.73   |      |  |   | 2.12   |   |  |   | 2.00   |  

34



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)




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



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 4 to the Cingular Wireless
    LLC 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 5 to the Cingular
    Wireless LLC 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 served
    through reseller agreements. In 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.                                                                                                                                                                                                   
|   
|(7) | 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 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.
|   
|(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.                                                                                                                                                                                            

35



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)




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

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 year ended December 31, 1999 and 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.

The historical financial information includes the
results of operations and cash flows for the SBC Domestic
Wireless Group for all periods, retroactively restated to
reflect the mergers of SBC with the wireless businesses of
Pacific Telesis Group, Southern New England Telecommunications
Corporation and Ameritech Corporation (Ameritech) as poolings of
interests. 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 the historical financial information for
Cingular Wireless LLC as such amounts are immaterial.

|                                                                                                             |  |                                  |        |              |  |   |        |  
|------------------------------------------------------------------------------------------------------------ |  | -------------------------------- | ------ | ------------ |  | - | ------ | -
|                                                                                                             |  | Year Ended                       |        | Period Ended
|                                                                                                             |  | December 31,                     |        | October 2,  
|                                                                                                             |  | 1999                             |        | 2000        
|                                                                                                             |  |                                  |        |             
|                                                                                                             |  |                                 
|                                                                                                             |  | (Dollars in millions, except for
|                                                                                                             |  | operating data)                 
|Statements of Operations Data                                                                                |  |                                  |        |              |  |   |        |  
|Total operating revenues                                                                                     |  | $                                | 7,376  |              |  | $ | 6,100  |  
|Total operating expenses                                                                                     |  |                                  | 6,074  |              |  |   | 4,812  |  
|                                                                                                             |  |                                  |        |              |  |   |        |  
|Operating income                                                                                             |  |                                  | 1,302  |              |  |   | 1,288  |  
|Income before provision for income taxes,
    extraordinary gain and cumulative effect of accounting changes |  |                                  | 929    |              |  |   | 917    |  
|Net income(1)(2)(3)                                                                                          |  | $                                | 1,921  |              |  | $ | 586    |  
|Cash Flow Data                                                                                               |  |                                  |        |              |  |   |        |  
|Net cash provided by operating activities(4)                                                                 |  | $                                | 1,861  |              |  | $ | 620    |  
|Net cash provided by (used in) investing
    activities                                                      |  |                                  | 1,268  |              |  |   | (2,528 | )
|Net cash provided by (used in) financing
    activities                                                      |  |                                  | (3,083 | )            |  |   | 1,965  |  
|Capital expenditures                                                                                         |  |                                  | 988    |              |  |   | 704    |  
|Operating Data                                                                                               |  |                                  |        |              |  |   |        |  
|Total cellular/PCS customers (in millions) (end
    of period)(5)                                            |  |                                  | 11.2   |              |  |   | 13.2   |  
|Cellular/PCS customer churn(6)                                                                               |  |                                  | 2.4    | %            |  |   | 2.6    | %
|Average cellular/PCS revenue per user (ARPU)(7)                                                              |  | $                                | 50.37  |              |  | $ | 51.23  |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In October 1999, SBC completed the required
    disposition, as a condition of the Ameritech merger, of
    20 Midwestern cellular properties, including the competing
    cellular licenses in Chicago, Illinois, and St. Louis, Missouri
    and other markets. The SBC Domestic Wireless Group recorded an
    extraordinary gain of $1,379 on this sale, net of taxes of $960.
|   
|(2) | In September 2000, adjustments related to
    calculations of the 1999 gain on the required disposition of the
    20 Midwestern cellular properties following the Ameritech
    merger referred to in note (1) above resulted in an
    additional extraordinary gain of $36, net of taxes of $24.                                                                               

36



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##### Table of Contents



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PART II (Dollars
in Millions)




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



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The SBC Domestic Wireless Groups results in
    1999 include the effect of conforming the adoption date for
    postretirement accounting between SBC and Ameritech. This change
    was recorded in the third quarter of 1999, retroactive to
    January 1, 1999, as a cumulative effect of accounting
    change of $14, net of taxes.                                                                                                                                                      
|   
|(4) | 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).                                                                                                                                                                                                                                                                           
|   
|(5) | Cellular/PCS customers include customers served
    through reseller agreements.                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(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.                                                                                                                                                                                                                              
|   
|(7) | Average revenue per user (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
    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.

37



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)




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

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 year ended December 31, 1999 and the
period ended October 2, 2000 are derived from the audited
financial statements of the BellSouth Domestic Wireless 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    
|                                                                  |  | Year Ended                   |       | Ended     
|                                                                  |  | December 31,                 |       | October 2,
|                                                                  |  | 1999                         |       | 2000      
|                                                                  |  |                              |       |           
|                                                                  |  |                             
|                                                                  |  | (Dollars in millions, except
|                                                                  |  | for operating data)         
|Statements of Operations Data                                     |  |                              |       |            |  |   |        |  
|Total operating revenues                                          |  | $                            | 3,573 |            |  | $ | 3,102  |  
|Total operating expenses(1)                                       |  |                              | 3,680 |            |  |   | 2,723  |  
|                                                                  |  |                              |       |            |  |   |        |  
|Operating income                                                  |  |                              | (107  | )          |  |   | 379    |  
|Income (loss) before provision for income taxes                   |  |                              | (132  | )          |  |   | 194    |  
|Net income                                                        |  | $                            | (87   | )          |  | $ | 114    |  
|Cash Flow Data                                                    |  |                              |       |            |  |   |        |  
|Net cash provided by operating activities                         |  | $                            | 545   |            |  | $ | 826    |  
|Net cash used in investing activities                             |  |                              | (322  | )          |  |   | (1,347 | )
|Net cash provided by (used in) financing
    activities           |  |                              | (295  | )          |  |   | 553    |  
|Capital expenditures                                              |  |                              | 590   |            |  |   | 461    |  
|Other Operating Data                                              |  |                              |       |            |  |   |        |  
|Total cellular/PCS customers (in millions) (end
    of period)(2) |  |                              | 4.9   |            |  |   | 5.7    |  
|Cellular/PCS customer churn(3)                                    |  |                              | 2.9   | %          |  |   | 2.5    | %
|Average cellular/PCS revenue per user (ARPU)(4)                   |  | $                            | 58.08 |            |  | $ | 58.47  |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Total operating expenses include a provision for
    asset impairment in 1999. This provision represents non-cash
    charges associated with disposals of infrastructure equipment in
    14 wireless markets in the southeastern United States. This
    charge of $320 was recorded to adjust these assets to their fair
    market value, as required under SFAS 121, and was estimated by
    discounting the expected future cash flows of these assets
    through the date of disposal. This equipment was replaced with
    new equipment.
|   
|(2) | Cellular/PCS customers include customers served
    through reseller agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(3) | 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.                                                                                                                                                                                                                                                                                 

38



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)




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



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Average revenue per user (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
    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.






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

Overview



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

We earn revenues and generate our primary source
of cash through offering a comprehensive variety of high-quality
wireless voice and data communications services. 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. The
marketing and distribution plans for our services are further
targeted to the specific geographic and demographic
characteristics of each of our markets.

We serve approximately 24.8 million voice
and data customers, including customers served over our Mobitex
network, and are the second-largest provider of wireless voice
and data communications services in the United States, based on
the number of wireless customers. We have access to licenses to
provide cellular or PCS wireless communications services
covering an aggregate population of 236 million, or
approximately 81% of the U.S. population, including in 45
of the 50 largest U.S. metropolitan areas. We provide
cellular or PCS services in 43 of the 50 largest
U.S. metropolitan areas.

On February 17, 2004, we entered into an
Agreement and Plan of Merger providing for the acquisition by
our manager, Cingular Wireless Corporation, of AT&T Wireless
Services, Inc. (AT&T Wireless) for an aggregate
consideration of approximately $41,000 cash. The closing of the
acquisition is expected to occur in late 2004 and is subject to
the affirmative vote of AT&T Wireless shareholders,
FCC, Hart Scott Rodino and other regulatory approvals and other
customary closing conditions. On a pro forma basis, the combined
company would have had, at December 31, 2003, cellular and
PCS spectrum coverage in 49 of the top 50 U.S. markets and
operations in 97 of the top 100 U.S. markets (excluding
only Richmond, Norfolk and Newport News, VA). Its licenses would
encompass a population of 264 million people and its
network and operations would encompass a population of
225 million people. Both companies currently operate the
same technologies. We plan that the combined company will
provide service under the Cingular brand name.



| |                              
| | -----------------------------
| | Industry and Operating Trends

We compete for customers based principally on
price, service offerings, call quality, coverage area and
customer service. We face substantial and increasing competition
in all aspects of our business. Our competitors are principally
five national (Verizon Wireless, AT&T Wireless, Sprint PCS,
Nextel Communications and T-Mobile) and a large number of
regional providers of cellular, PCS and other wireless
communications services, resellers and wireline service
providers. 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, ARPU, operating income and
reputation within the wireless industry to evaluate our
performance.

39



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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

Overall, intense industry competition and market
saturation will likely cause the wireless industrys
customer growth rate to moderate in comparison with historical
growth rates. While the wireless telecommunications industry
does continue to grow, a high degree of competition exists among
the six national carriers, their affiliates and smaller regional
carriers. This competition and other factors, such as the
implementation of wireless local number portability, will
continue to put pressure upon 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 average revenue per user (ARPU) derived
from its customers. The effective management of customer churn
is also paramount in minimizing customer acquisition costs and
maintaining and improving margins.

At the beginning of 2003, we reorganized our
marketing and sales operations to more effectively address local
market needs. We also increased the emphasis on our affiliation
with our members, SBC Communications Inc. (SBC) and BellSouth
Corporation (BellSouth), and increased co-branding our services
with their offerings in areas where our wireless markets overlap
with their wireline markets, thereby increasing our sales
channels. As a result of these strategies, in combination with
the introduction of a more meaningful brand message,
Cingular Fits You BestSM, improved
execution at the market level and promotion of service offerings
such as Family Talk plans, we saw the number of our
customer additions increase. During 2003, our cellular/PCS net
customer additions were the highest since our formation and
represent a significant improvement over our 2002 performance.

Our margins in 2003 were lower than the prior
year as a result of a number of factors. We had increased
operating expenses that were driven by acquisition costs related
to higher cellular/PCS gross customer additions and extensive
customer retention and customer service initiatives in
anticipation of wireless local number portability. Also
negatively impacting our margins were increased network system
operating costs as a result of ongoing growth in customer usage
and incremental costs related to our current network system
upgrade. Additionally, as we continued to expand our network and
further complete our network system upgrade to add Global System
for Mobile Communication (GSM) technology in our Time Division
Multiple Access (TDMA) networks, depreciation expense increased
as a result of our ongoing capital spending and a reduction in
our TDMA asset lives. Partially offsetting these expense
increases were modest revenue growth, focused cost control
efforts and the positive impacts of prior and ongoing system and
process consolidations.

The impacts of competition and wireless service
penetration will continue to pressure revenue growth and
margins. We expect cost increases to continue due to higher
network system usage and redundant expenses related to operating
dual networks while migrating our customer base from TDMA to
GSM. We also expect higher depreciation expense due to our
ongoing capital spending. If we are successful in continuing to
grow our customer base, our acquisition costs will increase. We
also expect increased costs to maintain and support our existing
customer base, including customer care initiatives to improve
our level of service and support wireless local number
portability. We expect these and other cost increases to be
partially offset by ongoing efforts to reduce general and
administrative expenses as well as decreased roaming costs as a
result of lower negotiated roaming rates with other carriers.

We expect that our costs for 2004 will increase
as a result of the preparation to complete the acquisition of
AT&T Wireless and that the integration of and accounting for
the transaction will result in higher costs for the next several
years. Thereafter, we expect cost savings from the elimination
of redundant facilities, staff, functions, capital expenditures
and other resources.

40



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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

Wireless local number portability was implemented
on November 24, 2003 and, although we are seeing number
porting transactions that are significantly less than many
predicted, it is still early in the process of implementation.
We have already incurred costs related to the preparation for
and implementation of wireless local number portability, and we
expect customer retention costs, consisting primarily of handset
subsidies, selling costs and greater staffing of customer care
centers, to be higher during the year following the inception of
the new portability mandate. To the extent industry churn
remains higher than in the past, we would expect those costs to
continue at a significant level.

We face many challenges and opportunities in the
future and are focused on the following key initiatives:



|  |                                                                                                                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | successfully completing the merger with AT&T
    Wireless and integrating its business operations;                                                                                                                                                                        
| 
| | growing our customer base profitably by offering
    wireless voice and data products and rate plans that provide
    both customer value and favorable economics;                                                                                                        
| 
| | increasing the capacity, speed and functionality
    of our network through the completion of our GSM/General Packet
    Radio Service (GPRS)/Enhanced Data Rates for GSM Evolution
    (EDGE) network overlay and improving overall network coverage
    and performance;
| 
| | increasing wireless data penetration and usage
    through the development and promotion of advanced wireless data
    applications and interfaces;                                                                                                                       
| 
| | improving the Cingular customer experience and
    our reputation in the industry by focusing on all
    customer-impacting aspects of our business including network
    performance, sales, billing and customer service;                                               
| 
| | maintaining effective cost controls by
    continually evaluating the cost structure of our business and
    driving efficiencies through our large size and national scope;
    and                                                                                      
| 
| | continuing the expansion of our existing
    footprint and network capacity by obtaining access to additional
    spectrum, primarily through spectrum exchanges, purchases,
    spectrum leasing, mergers, acquisitions and joint ventures.                              



| |                   
| | ------------------
| | 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 revenue.

Service revenues, which we record when services
are provided, 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;
| 
| | 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, as a percent of
total service revenues, have not been material in any of the
periods presented. We expect that trend to continue, although
revenues from our wireless data services did increase nearly 60%
in 2003. We expect to see growth in wireless data services in
the upcoming year as a result of the increased availability and
usage of GPRS and EDGE 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.

To be consistent with emerging industry
practices, our consolidated statements of income for all periods
presented have been reclassified to reflect billings to our
customers for the Universal Service Fund (USF) and other
regulatory fees as service revenues and the costs related to
payments into the associated regulatory funds as cost of
services expenses. See also Operating Expenses 
Cost of Services below. Operating income and net income
for all periods have been unaffected.

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.



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

Our operating expenses include:



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

We must increasingly reduce expense growth in
order to protect profit margins. We believe that our industry
position enables us to negotiate roaming, long distance and
local network connection fees and handset and network
infrastructure purchase arrangements on favorable terms.

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. In addition, cost of services includes the
costs related to payments into the USF and other regulatory
funds. 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 as increased usage,
stimulated by national rate plans inclusion of free
roaming and long distance services, is more than offset by lower
negotiated roaming and long distance rates.

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 who
agree to one-year and two-year subscription contracts 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 increase network capacity and lower our
operating cost per minute. The trend in the cost of equipment
sales generally follows the trend in gross customer additions
but is also impacted by changes in the cost of handsets.
Overall, we have seen the cost of handsets decline; however, as
we complete our GSM/GPRS/EDGE network upgrade 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

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

purchasers of handsets in the United States,
we believe we will be able to purchase handsets at attractive
volume-discounted rates.

Selling, General and
Administrative.Selling, general and
administrative expenses include all operating costs and expenses
not included in the other operating cost and expense categories,
such as:



|  |                                                                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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; and
| 
| | other administrative costs such as accounting and
    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 and the
amortization of intangibles, such as customer lists and, prior
to 2002, FCC licenses and goodwill. 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
 Liquidity and Capital Resources below
for a discussion of our capital expenditures and other
investments.



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

Interest Expense.Interest expense includes interest costs related primarily to
our indebtedness and capital leases.

Minority Interest in Earnings of Consolidated
Entities.Minority interest reflects
the share of operating 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. The largest of these are as
follows:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In November 2000, we made an equity investment,
    and as of December 31, 2003 had a non-controlling equity
    interest, in Salmon PCS LLC, (Salmon). Because we do not control
    Salmon, through December 31, 2002, we accounted for this
    investment using the equity method and recorded profits or
    losses in our income statement as equity in net income
    (loss) of affiliates. However, in January 2003, we adopted
    the provisions of Financial Accounting Standards Board (FASB)
    Interpretation No. 46, Consolidation of Variable
    Interest Entities (FIN 46) and consolidated the
    financial position, results of operations and cash flows of
    Salmon, effective January 1, 2003. We did not restate any
    previously issued financial statements. The FASB revised
    FIN 46 in December 2003, which did not impact us. For
    additional information regarding Salmon, see also Note 5,
    Investments in and Advances to Equity Affiliates, in
    Item 8, Financial Statements and Supplemental
    Data  Historical Financial Statements 
    Cingular Wireless LLC.
| 
| | In November 2001, we formed a jointly-controlled
    infrastructure venture with T-Mobile, GSM Facilities, LLC
    (GSMF). In July 2002, we commenced commercial operations in New
    York City and T-Mobile commenced operations in California and
    Nevada. Because we do not independently control this venture, we
    account for this investment using the equity method. This
    venture is structured to generate operating losses approximating
    the amount of the depreciation on the assets that have been
    contributed to it and non-reimbursed interest expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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

We expect to record a significant equity in net
loss of affiliates over the next several years relating to our
GSMF infrastructure venture.



| |             
| | ------------
| | 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. We do not expect that our
income tax expense will be material in the near future.

Consolidated Results of Operations



| |                                                                                 
| | --------------------------------------------------------------------------------
| | 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    | %    
|                               |          |                       |        |         |       |            |        |       |       |  |       |     |       |  |        |      
|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  | 
|Net Additions (Losses)         |          |                       |        |         |       |            |        |       |       |  |       |     |       |  |        |      
|                               | Postpaid |                       |        | 827     |       |            |        | 1,526 |       |  |       | 699 |       |  |        | 84.7  |      
|                               | Prepaid  |                       |        | (22     | )     |            |        | 114   |       |  |       | 136 |       |  |        | 603.7 |      
|                               | Reseller |                       |        | (445    | )     |            |        | 476   |       |  |       | 921 |       |  |        | 207.3 |      
|                               |          |                       |        |         |       |            |        |       |       |  |       |     |       |  |        |      
|                               |          | Total Net Additions   |        |         | 360   |            |        |       | 2,116 |  |       |     | 1,756 |  |        |       | 488.0 | 
|Other Adjustments              |          |                       | (31    | )       |       |            | (14    | )     |       |  | 17    |     |       |  | 57.3   |      
|                               |          |                       |        |         |       |            |        |       |       |  |       |     |       |  |        |      
|End of Period                  |          |                       | 21,925 |         |       |            | 24,027 |       |       |  | 2,102 |     |       |  | 9.6    |      
|                               |          |                       |        |         |       |            |        |       |       |  |       |     |       |  |        |      
|Mobitex Data Network Customers |          |                       |        |         |       |            |        |       |       |  |       |     |       |  |        |      
|Beginning of Period            |          |                       | 733    |         |       |            | 817    |       |       |  | 84    |     |       |  | 11.5   |      
|Gross Additions                |          |                       | 416    |         |       |            | 328    |       |       |  | (88   | )   |       |  | (21.3  | )    
|Net Additions (Losses)         |          |                       | 84     |         |       |            | (28    | )     |       |  | (112  | )   |       |  | (133.7 | )    
|                               |          |                       |        |         |       |            |        |       |       |  |       |     |       |  |        |      
|End of Period                  |          |                       | 817    |         |       |            | 789    |       |       |  | (28   | )   |       |  | (3.5   | )%   
|                               |          |                       |        |         |       |            |        |       |       |  |       |     |       |  |        |      



---



|  |                                                               
|- | --------------------------------------------------------------
|* | The percentage change is based on the actual
    whole numbers

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

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

base represents 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 represents 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;                                                                                                                                             
| 
| | 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
    Family Talk 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 Inc. (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.

Approximately 95% of our customers are now using
our digital services, up from 92% at the end of the prior year.
Our networks have 100% digital coverage and over 99% of our
network traffic was digital at the end of 2003.

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
own Federal Communications Commission (FCC) licenses to provide
data services over a separate frequency band. Our network at
this band utilizes a different technology called
Mobitex. Although our Mobitex customer churn rate
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.

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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   |        | $ |       | %     
|                                                                                        |                                                            |                               |       |        |        |   |       |       
|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)                  |                               |       | 3,571  |        |   |       | 3,652  |        |   |      | 81   |      |   |        | 2.3   |      
|                                                                                        | Cost of equipment sales                                    |                               |       | 1,535  |        |   |       | 2,031  |        |   |      | 496  |      |   |        | 32.3  |      
|                                                                                        | Selling, general and administrative                        |                               |       | 5,426  |        |   |       | 5,422  |        |   |      | (4   | )    |   |        | (0.1  | )    
|                                                                                        | Depreciation and amortization                              |                               |       | 1,850  |        |   |       | 2,089  |        |   |      | 239  |      |   |        | 12.9  |      
|                                                                                        |                                                            |                               |       |        |        |   |       |        |        |   |      |      |      |   |        |      
|                                                                                        |                                                            | Total operating expenses      |       |        | 12,382 |   |       |        | 13,194 |   |      |      | 812  |   |        |       | 6.6   |  
|                                                                                        |                                                            |                               |       |        |        |   |       |        |        |   |      |      |      |   |        |      
|Operating income                                                                        |                                                            |                               | 2,521 |        |        |   | 2,289 |        |        |   | (232 | )    |      |   | (9.2   | )    
|                                                                                        |                                                            |                               |       |        |        |   |       |        |        |   |      |      |      |   |        |      
|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                           |                               |       | (265   | )      |   |       | (323   | )      |   |      | (58  | )    |   |        | 21.9  |      
|                                                                                        | Other, net                                                 |                               |       | 29     |        |   |       | 41     |        |   |      | 12   |      |   |        | 41.4  |      
|                                                                                        |                                                            |                               |       |        |        |   |       |        |        |   |      |      |      |   |        |      
|                                                                                        |                                                            | Total other income (expenses) |       |        | (1,270 | ) |       |        | (1,239 | ) |      |      | 31   |   |        |       | (2.4  | )
|                                                                                        |                                                            |                               |       |        |        |   |       |        |        |   |      |      |      |   |        |      
|Income before provision for income taxes and
    cumulative effect of accounting change |                                                            |                               | 1,251 |        |        |   | 1,050 |        |        |   | (201 | )    |      |   | (16.1  | )    
|Provision for income taxes                                                              |                                                            |                               | 12    |        |        |   | 28    |        |        |   | 16   |      |      |   | 133.3  |      
|                                                                                        |                                                            |                               |       |        |        |   |       |        |        |   |      |      |      |   |        |      
|Income before cumulative effect of accounting
    change                                |                                                            |                               | 1,239 |        |        |   | 1,022 |        |        |   | (217 | )    |      |   | (17.5  | )    
|Cumulative effect of accounting change, net of tax                                      |                                                            |                               | (32   | )      |        |   |      |        |        |   | 32   |      |      |   | (100.0 | )    
|                                                                                        |                                                            |                               |       |        |        |   |       |        |        |   |      |      |      |   |        |      
|                                                                                        | Net income                                                 |                               | $     | 1,207  |        |   | $     | 1,022  |        |   | $    | (185 | )    |   |        | (15.3 | )%   
|                                                                                        |                                                            |                               |       |        |        |   |       |        |        |   |      |      |      |   |        |      

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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
revenues 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 revenues was
driven by a larger average cellular/PCS customer base, robust
growth in data revenues and increased regulatory fee revenues.
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
as follows:

Service revenues.Service revenues, 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
revenues 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 revenues 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 revenues 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 Family Talk
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 revenues 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 revenues from local service revenues 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
Supplemental Data  Historical Financial
Statements  Cingular Wireless LLC.

Increases in data revenues also continue to
positively impact local service revenues. For the year ended
December 31, 2003, data revenues, while less than 4% of
total local service revenues, comprised over a third of the
increase in total local service revenues compared with the prior
year. In 2003, there was a 118% growth in cellular/PCS data
revenues compared with 2002. The increase in data revenues is
reflective of 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 revenues, both incollect and outcollect
revenues, declined for the year ended December 31, 2003
when compared with the prior year. Overall, reduced roaming
revenues were a function of lower negotiated roaming rates which
more than offset an increase in roaming minutes. Incollect
revenues also continued to be negatively impacted as a result of
roaming minutes being bundled with all-inclusive regional and
national rate plans.

47



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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

Long distance revenues, for the year ended
December 31, 2003, comprised only 1.2% of total service
revenues 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 revenues were more than offset by decreases
discussed below, thereby resulting in an overall ARPU reduction.
As noted above in the discussion of local service revenues,
increased sales of lower ARPU Family Talk 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
revenues, as previously noted.

Equipment sales.The
increase in equipment sales were 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 $215 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 is 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 that 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

48



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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

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 $2,608, an increase of $103, or
4.1%, compared with $2,505 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 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 $40, or
4.0%, 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 $266, 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  Depreciation and also Note 3,
Property, Plant and Equipment in Item 8,
Financial Statements and Supplemental 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.



| |                 
| | ----------------
| | 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 9, Financial Instruments in
Item 8, Financial Statements and Supplemental
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.

49



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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



| |                                 
| | --------------------------------
| | 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 $88, principally
related to higher depreciation expense associated with our
capital expenditures at the GSMF venture, offset by a reduction
of $29 as a result of the consolidation of Salmon. Salmon was
consolidated, effective January 1, 2003, as a result our
early adoption of FIN 46. See also Note 6,
Salmon in Item 8, Financial Statements and
Supplemental 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 Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets (SFAS 142),
effective January 1, 2002.



| |                                                                                 
| | --------------------------------------------------------------------------------
| | Year Ended December 31, 2002, Compared
    with the Year Ended December 31, 2001



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

In 2002, we experienced lower customer growth due
in part to a slowing economy and increased wireless penetration
and competition in the United States.

Cellular/PCS customers were 21.9 million at
December 31, 2002, an increase of 1.4% from the
21.6 million customers at December 31, 2001. Net
cellular/PCS customer additions in 2002 were 360,000, a decrease
of 1,561,000, or 81.3%, from the 1,921,000 net customer
additions in 2001. The decrease in net customer additions was
primarily a function of a 1.1 million, or 12.3%, reduction
in gross customer additions from 2001. The decrease in 2002 was
a result of intense industry competition, impacts of the
economic slowdown, and the continued decline in our analog,
prepaid and reseller customer bases. We lost approximately
266,000 reseller customers after WorldCom exited the reseller
business during the year, and an additional approximately
130,000 WorldCom customers became our direct customers. We
believe that a number of internal business initiatives also
contributed to our negative growth trends in 2002, including;



|  |                                                                                                                                                                        
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | centralization of the marketing and sales
    organizations, which reduced our effectiveness in responding to
    regional and local product and service opportunities;
| 
| | other merger-related changes, such as billing
    system integration and inventory and customer care
    consolidation, that may have impacted customers; and          
| 
| | a shift to sales plan initiatives designed to
    improve cash flow rather than overall market share.                                                                  

During the year ended December 31, 2002, our
postpaid customer base increased 928,000, or 4.9%, including the
approximately 130,000 former WorldCom reseller customers who
transferred to us after WorldCom exited the reseller business.
The prepaid and reseller customer bases decreased by 23,000, or
1.6%, and 577,000, or 45.1% respectively, during the year.

50



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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

For the year ended December 31, 2002, the
cellular/PCS churn rate was 2.8% compared with a 2.9% churn rate
for 2001. The lower churn in 2002 was reflective of our efforts
to acquire and maintain quality non-reseller postpaid customers.
This lower churn was partially offset by the continued
deterioration of our prepaid and reseller customer base,
primarily as a result of WorldComs exiting the reseller
business, which had a negative impact on churn in 2002.

We had approximately 5.5 million customers
using our data services at December 31, 2002. The number of
our Mobitex data network customers increased to approximately
817,000 at December 31, 2002, an 11.5% increase from
733,000 customers at year-end 2001. Net customer additions for
the year ended December 31, 2002 were 84,000, a decrease of
47.5% from the 160,000 net customer additions in the prior year.
Most of these customers are business customers, and the decline
in net additions was primarily due to the economic slowdown.



| |                                                                                       
| | --------------------------------------------------------------------------------------
| | Historical Consolidated
    Data  For the years ended December 31, 2001
    and 2002.

|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |       |       |  
|------------------------ | ---------------------------------------------------------- | --------------------------- | ------ | ------ | ------ | - | ------ | ------ | ------ |  | --- | ----- | ----- | - | ---- | ----- | ----- | -
|                         |                                                            |                             |        |        |        |  
|                         |                                                            | Year Ended                  |        |       
|                         |                                                            | December 31,                |        | Change
|                         |                                                            |                             |        |       
|                         |                                                            | 2001                        |        | 2002   |        | $ |        | %     
|                         |                                                            |                             |        |        |        |   |        |       
|Operating Revenues       |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|                         | Local service revenue  voice                              |                             |        | 10,780 |        |   |        | 11,814 |        |  |     | 1,034 |       |   |      | 9.6   | %    
|                         | Data revenue                                               |                             |        | 193    |        |   |        | 286    |        |  |     | 93    |       |   |      | 48.2  |      
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|                         |                                                            | Total local service revenue |        |        | 10,973 |   |        |        | 12,100 |  |     |       | 1,127 |   |      |       | 10.3  |  
|                         | Incollect roamer revenue                                   |                             |        | 884    |        |   |        | 776    |        |  |     | (108  | )     |   |      | (12.2 | )    
|                         | Long distance                                              |                             |        | 223    |        |   |        | 209    |        |  |     | (14   | )     |   |      | (6.3  | )    
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|                         |                                                            | Subscriber revenue          |        |        | 12,080 |   |        |        | 13,085 |  |     |       | 1,005 |   |      |       | 8.3   |  
|                         | Outcollect revenue                                         |                             |        | 940    |        |   |        | 701    |        |  |     | (239  | )     |   |      | (25.4 | )    
|                         | Other revenue                                              |                             |        | 209    |        |   |        | 136    |        |  |     | (73   | )     |   |      | (34.9 | )    
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|                         |                                                            | Other service revenue       |        |        | 1,149  |   |        |        | 837    |  |     |       | (312  | ) |      |       | (27.2 | )
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|                         | Wireless service revenue                                   |                             |        | 13,229 |        |   |        | 13,922 |        |  |     | 693   |       |   |      | 5.2   |      
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|                         | Equipment sales                                            |                             |        | 1,039  |        |   |        | 981    |        |  |     | (58   | )     |   |      | (5.6  | )    
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|Total operating revenues |                                                            |                             | 14,268 |        |        |   | 14,903 |        |        |  | 635 |       |       |   | 4.5  |      
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|Operating expenses       |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|                         | Cost of services (excluding depreciation)                  |                             |        | 2,912  |        |   |        | 3,571  |        |  |     | 659   |       |   |      | 22.6  |      
|                         | Cost of equipment sales                                    |                             |        | 1,652  |        |   |        | 1,535  |        |  |     | (117  | )     |   |      | (7.1  | )    
|                         | Selling, general and administrative                        |                             |        | 5,235  |        |   |        | 5,426  |        |  |     | 191   |       |   |      | 3.6   |      
|                         | Depreciation and amortization                              |                             |        | 1,921  |        |   |        | 1,850  |        |  |     | (71   | )     |   |      | (3.7  | )    
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|                         |                                                            | Total operating expenses    |        |        | 11,720 |   |        |        | 12,382 |  |     |       | 662   |   |      |       | 5.6   |  
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|Operating income         |                                                            |                             | 2,548  |        |        |   | 2,521  |        |        |  | (27 | )     |       |   | (1.1 | )    
|                         |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|Other income (expenses): |                                                            |                             |        |        |        |   |        |        |        |  |     |       |       |   |      |      
|                         | Interest expense                                           |                             |        | (822   | )      |   |        | (911   | )      |  |     | (89   | )     |   |      | 10.8  |      
|                         | Minority interest in earnings of consolidated
    entities |                             |        | (122   | )      |   |        | (123   | )      |  |     | (1    | )     |   |      | 0.8   |      

51



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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

|                                                                                        |                                  |                               |       |        |      |   |       |       |        |   |      |      |      |   |       |       |      | 
|--------------------------------------------------------------------------------------- | -------------------------------- | ----------------------------- | ----- | ------ | ---- | - | ----- | ----- | ------ | - | ---- | ---- | ---- | - | ----- | ----- | ---- | 
|                                                                                        |                                  |                               |       |        |      |  
|                                                                                        |                                  | Year Ended                    |       |       
|                                                                                        |                                  | December 31,                  |       | Change
|                                                                                        |                                  |                               |       |       
|                                                                                        |                                  | 2001                          |       | 2002   |      | $ |       | %    
|                                                                                        |                                  |                               |       |        |      |   |       |      
|                                                                                        | Equity in net loss of affiliates |                               |       | (68    | )    |   |       | (265  | )      |   |      | (197 | )    |   |       | 289.7 |     
|                                                                                        | Other, net                       |                               |       | 164    |      |   |       | 29    |        |   |      | (135 | )    |   |       | (82.3 | )   
|                                                                                        |                                  |                               |       |        |      |   |       |       |        |   |      |      |      |   |       |      
|                                                                                        |                                  | Total other income (expenses) |       |        | (848 | ) |       |       | (1,270 | ) |      |      | (422 | ) |       |       | 49.8 | 
|                                                                                        |                                  |                               |       |        |      |   |       |       |        |   |      |      |      |   |       |      
|Income before provision for income taxes and
    cumulative effect of accounting change |                                  |                               | 1,700 |        |      |   | 1,251 |       |        |   | (449 | )    |      |   | (26.4 | )    
|Provision for income taxes                                                              |                                  |                               | 8     |        |      |   | 12    |       |        |   | 4    |      |      |   | 50.0  |      
|                                                                                        |                                  |                               |       |        |      |   |       |       |        |   |      |      |      |   |       |      
|Income before cumulative effect of accounting
    change                                |                                  |                               | 1,692 |        |      |   | 1,239 |       |        |   | (453 | )    |      |   | (26.8 | )    
|Cumulative effect of accounting change, net of tax                                      |                                  |                               |      |        |      |   | (32   | )     |        |   | (32  | )    |      |   |      |      
|                                                                                        |                                  |                               |       |        |      |   |       |       |        |   |      |      |      |   |       |      
|                                                                                        | Net income                       |                               | $     | 1,692  |      |   | $     | 1,207 |        |   |      | (485 | )    |   |       | (28.7 | )%  
|                                                                                        |                                  |                               |       |        |      |   |       |       |        |   |      |      |      |   |       |      



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

Total operating revenues, consisting of service
revenues and equipment revenues, increased $635, or 4.5%, to
$14,903 for the year ended December 31, 2002, compared with
$14,268 for the prior year. An increase in 2002 service
revenues, as a result of a higher average number of customers,
was partially offset by reduced equipment revenues, primarily
attributable to reduced gross customer additions. Although total
operating revenues increased, the rate of increase declined
during 2002, reflecting slower customer growth and lower prices
for our services driven by increasing competition. The
components of the change in operating revenues are described
below.

Service Revenues.Service revenues are comprised of
local service, roaming, long distance and other revenues. For
the year ended December 31, 2002, service revenues were
$13,922, an increase of $693, or 5.2%, compared with $13,229 for
the prior year. Of the $693 increase, $203 can be attributed to
the contribution of a Puerto Rico wireless business from SBC in
September 2001.

Local service revenues for the year ended
December 31, 2002 were $12,100, an increase of $1,127, or
10.3%, compared with $10,973 for the prior year. The increase
was primarily driven by a 6.8% increase in the average number of
cellular/PCS customers versus 2001 and the continued migration
of our customers to all-inclusive rate plans that include
roaming and long distance at no additional charge. The increase
was also driven by a 26.2% increase in local minutes of use per
customer, driven by plans offering increasing numbers of minutes
of service for a flat, monthly fee. Additionally, $156 from the
provision of handset insurance through a new subsidiary and $181
due to the September 2001 contribution by SBC of the Puerto Rico
wireless business also contributed to the increase from the
prior year. Data service revenues, a component of local service
revenues, increased 48.2% in 2002, from $193 in 2001 to $286 in
2002.

The roaming component of total service revenues
includes revenues that we collect from our 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 our network,
referred to as outcollect roaming revenues.

Incollect revenues for the year ended
December 31, 2002 were $776, a decrease of $108, or 12.2%,
compared with $884 for the prior year. Incollect revenues
declined as more of our customers adopted regional and national
rate plans, which include free roaming in bundled minute plans.

52



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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

Outcollect revenues for the year ended
December 31, 2002 were $701, a decrease of $239, or 25.4%,
compared with $940 for the prior year. This decline was
primarily a function of reductions in roaming rates with major
roaming partners and the building out of other carriers
networks, which reduces the need of their customers to roam on
our network. The impact of our infrastructure venture, GSMF,
also contributed $26 to the decrease from 2001.

Long distance revenues for the year ended
December 31, 2002 comprised only approximately 1.5% of
total service revenues. These revenues declined as our customers
continued to migrate to all-inclusive rate plans that include
long distance service in the monthly access charge.

Other revenues for the year ended
December 31, 2002 were $136, a decrease of $73, or 34.9%
compared with $209 for the prior year. The decrease in 2002
includes a reduction of $23 in administrative and program
revenues related to the formation of a captive handset insurance
company in 2002. Other decreases from 2001 include a $17
reduction in management fees as a result of the contribution of
the Puerto Rico wireless business in September 2001 and a $13
decrease in local exchange carrier (LEC) reciprocal compensation
revenues as a result of our infrastructure joint venture, GSMF.

ARPU for cellular/PCS service declined by $0.77
to $52.14, or 1.5%, from $52.91 for the year ended
December 31, 2001. Our strategy of targeting, acquiring and
retaining non-reseller postpaid customers resulted in an
increase in customer revenues. This increase, however, was
offset by reductions in revenues from bundled services and
outcollect and other revenues, thereby reducing overall service
ARPU. The consolidation of Puerto Rico operating results in our
financial statements, beginning September 2001, also adversely
affected ARPU as a result of the heavy concentration of prepaid
customers in Puerto Rico. Of the $0.77 decline in ARPU, $0.18 of
the decline can be attributed to the dilutive ARPU impact of the
Puerto Rico consolidation.

Equipment sales.Equipment sales for the year ended
December 31, 2002 were $981, a decrease of $58, or 5.6%,
compared with $1,039 for the prior year. This decrease was
primarily the result of a 5.0% decline in non-reseller gross
additions from 2001.



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

Cost of services (exclusive of depreciation).Cost of services for the year ended
December 31, 2002 was $3,571, an increase of $659, or
22.6%, compared with $2,912 for the prior year. Cost increases
in 2002 were driven by a 36% increase in system minutes of use
and higher roaming and long distance costs. These increases were
a result of customer migration to digital rate plans that
include more minutes, free long distance calling and free
roaming. Increases in 2002 over the prior year also include $151
in impairment losses related to our long-lived assets utilized
in our Mobitex data network and certain TDMA network assets and
$93 related to the provision of handset insurance through the
new captive insurance subsidiary. See Critical Accounting
Policies and Estimates for further discussion of
impairment losses related to property, plant and equipment.
Although systems costs increased due to increased minutes of
use, efficiencies attributable to digital networks contributed
to decreasing per-minute costs.

Cost of equipment sales.Cost of equipment sales for the year
ended December 31, 2002 was $1,535, a decrease of $117, or 7.1%,
compared with $1,652 for the prior year. Consistent with the
trend in equipment revenues, this decrease was primarily the
result of a 5.0% decline in non-reseller gross additions
compared with 2001. This year over year cost decrease was also
driven by more favorable per-unit pricing in 2002 resulting from
our combined purchasing power as well as industry trends. These
decreases were offset to a limited degree by increased upgrade
equipment costs in 2002.

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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

Selling, general and administrative expenses.Selling, general and administrative
expenses for the year ended December 31, 2002 were $5,426,
an increase of $191, or 3.6%, compared with $5,235 for prior
year. The higher cost in 2002 was driven by increases of $135 in
costs related to maintaining and supporting our customer base,
$41 in administrative costs and $15 in selling expenses.

The $135 in cost increases for maintaining and
supporting our customer base included higher residuals and
upgrade commissions, customer retention costs and bad debt
expense. Bad debt expense increased by $70, with over half of
the increase attributable to WorldCom write-offs occurring in
2002. Within this same area of customer maintenance and support
expenses, the overall $135 cost increase included lower billing
and customer service expenses, reflecting cost reductions as a
result of billing system and call center consolidations.

The increase of $41 in other administrative costs
was primarily due to higher information technology (IT) and
development costs.

Selling expenses, which include sales, marketing,
advertising and commissions expenses, increased $15 from 2001.
Increases in 2002 include $41 in advertising and agent costs
associated with the launch of Cingular Wireless service in New
York City and $28 related to the reorganization of the sales
operation and related workforce reductions. Costs in 2001
included $70 related to the Cingular brand launch.

Depreciation and amortization.Depreciation and amortization for the
year ended December 31, 2002 were $1,850, a decrease of
$71, or 3.7%, compared with $1,921 for the prior year.
Depreciation expense increased $148 and was comprised primarily
of increased depreciation associated with new capital assets,
partially offset by a reduction in depreciation as a result of
the transfer of assets to our network infrastructure venture,
GSMF. Beginning in November 2001, the operating losses of GSMF,
which include depreciation, were reflected as a component of
equity in net loss of affiliates. For the year ended
December 31, 2002, amortization expense decreased by $219
compared with the prior year. This was primarily attributable to
the cessation of amortizing goodwill and wireless licenses as a
result of our January 1, 2002 adoption of SFAS No. 142.



| |                 
| | ----------------
| | Interest Expense

Interest expense for the year ended
December 31, 2002 was $911, an increase of $89, or 10.8%,
compared with $822 for the prior year. The increase in interest
expense primarily resulted from the issuance in December 2001 of
$2,000 in fixed-rate senior notes to refinance lower
interest-bearing commercial paper and fund capital expenditures
and working capital. The increased interest expense of $124
related to these fixed-rate senior notes was offset by a
reduction of $39 related to minimal use of commercial paper in
2002, compared to 2001.



| |                                          
| | -----------------------------------------
| | Equity in Net Loss of Affiliates,
    Net

Equity in net loss of affiliates for the year
ended December 31, 2002 was $265, an increase of $197,
compared with $68 for the prior year. The increase primarily
reflects additional equity losses of $209 associated with the
investment in our network infrastructure venture, GSMF, which
was formed in the fourth quarter of 2001. This increase was
partially offset by a $14 reduction in losses related to our
Salmon joint venture.



| |           
| | ----------
| | Other, Net

Other, net for the year ended December 31,
2002 was $29, a decrease of $135, compared with $164 for the
prior year. The decrease was primarily due to a $76 gain
associated with the distribution of assets to us

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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

at fair value following a partnership dissolution
in 2001, a reduction of $27 in interest income and gains from
partitioning transactions and a $19 decrease in interest income
on advances to Salmon.



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

Cumulative effect of change in accounting
principle, net of tax, was a loss of $32 during the year ended
December 31, 2002 and resulted from an impairment of
goodwill related to the Mobitex data business upon the adoption
of SFAS 142.

Liquidity and Capital Resources



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



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

|                                                        |  |              |        |        |  |   |        |   |  |   |      |   |  |  |        |  
|------------------------------------------------------- |  | ------------ | ------ | ------ |  | - | ------ | - |  | - | ---- | - |  |  | ------ | -
|                                                        |  |              |        |        |  |  
|                                                        |  | Year Ended   |        |       
|                                                        |  | December 31, |        | Change
|                                                        |  |              |        |       
|                                                        |  | 2002         |        | 2003   |  | $ |        | %
|                                                        |  |              |        |        |  |   |        |  
|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 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
were a decrease of $351 in capital expenditures and a decrease
of $50 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 expenditures 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 related to the 34
challenged licenses. Capital expenditures and cash contributed
to our venture with AT&T Wireless Services, Inc. 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
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

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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

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.

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



| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | Cash Flows for the Year Ended
    December 31, 2002, Compared with the Year Ended
    December 31, 2001

|                                                 |  |                     |        |        |  |   |        |   |  |   |      |   |  |  |       |   
|------------------------------------------------ |  | ------------------- | ------ | ------ |  | - | ------ | - |  | - | ---- | - |  |  | ----- | --
|                                                 |  |                     |        |        |  |  
|                                                 |  | Year Ended December |        |       
|                                                 |  | 31,                 |        | Change
|                                                 |  |                     |        |       
|                                                 |  | 2001                |        | 2002   |  | $ |        | %
|                                                 |  |                     |        |        |  |   |        |  
|Net cash provided by operating activities        |  | $                   | 3,665  |        |  | $ | 3,592  |   |  | $ | (73  | ) |  |  | (2.0  | )%
|Net cash used in investing activities            |  |                     | (3,945 | )      |  |   | (3,585 | ) |  |   | 360  |   |  |  | (9.1  | ) 
|Net cash provided by financing activities        |  |                     | 721    |        |  |   | 334    |   |  |   | (387 | ) |  |  | (53.7 | ) 
|                                                 |  |                     |        |        |  |   |        |   |  |   |      |   |  |  |       |   
|Net increase in cash and cash equivalents        |  |                     | 441    |        |  |   | 341    |   |  |   | (100 | ) |  |  | (22.7 | ) 
|Cash and cash equivalents at beginning of period |  |                     | 126    |        |  |   | 567    |   |  |   | 441  |   |  |  | 350.0 |   
|                                                 |  |                     |        |        |  |   |        |   |  |   |      |   |  |  |       |   
|Cash and cash equivalents at end of period       |  | $                   | 567    |        |  | $ | 908    |   |  | $ | 341  |   |  |  | 60.1  | % 
|                                                 |  |                     |        |        |  |   |        |   |  |   |      |   |  |  |       |   

Cash and cash equivalents for the year ended
December 31, 2002 was $908, an increase of $341, or 60.1%,
compared with $567 for the year ended December 31, 2001.

Net cash provided by operating
activities.Net cash generated by
operations for the year ended December 31, 2002, was
$3,592, a decrease of $73, or 2.0%, compared with $3,665 for the
year ended December 31, 2001. Cash generated from
operations was our primary source of funds in 2002 and 2001.

Net cash used in investing
activities.Net cash used in investing
activities for the year ended December 31, 2002, was
$3,585, a decrease of $360, or 9.1%, compared with $3,945 for
the year ended December 31, 2001.

Capital expenditures, representing the largest
component of cash used in investing activities, totaled $3,085
in 2002, a decrease of $71 from $3,156 in 2001.

The primary contributors to the overall decrease
in 2002 of net cash used in investing activities were a $283
decrease in acquisition activity, a $135 reduction in advances
and investments in equity affiliates and the $71 decrease in
capital expenditures. These decreases were offset by a $79
decrease in cash inflows in 2002 related to dispositions and a
$50 cash payment in 2002 for a contractor engineering deposit.

Advances and investments in equity affiliates of
$450 in 2002 decreased $135 from $585 in 2001. In 2002, an
increase of $641 for cash and funding of capital expenditures
contributed to our infrastructure venture, GSMF, was offset by a
$780 decrease related to our Salmon investment. In 2001, we made
advances and investments in Salmon of $384. In 2002, Salmon made
net advance repayments of $396, consisting of two repayments
totaling $421 partially offset by $25 in additional advances.
The $421 repayment by Salmon was as a result of the return to
Salmon, by the FCC, of license deposits related to
34 challenged licenses.

Cash needs for acquisitions of businesses and
licenses decreased by $283 in 2002 when compared with 2001.
Acquisitions of $289 in 2001 consisted primarily of net cash
payments of $146 for the remaining

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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

10% ownership stake in our Washington/Baltimore
property and $140 for the Salt Lake/Provo license acquisition.
In 2002, there was limited acquisition activity.

Net cash provided by financing activities.Net cash provided by financing
activities for the year ended December 31, 2002, was $334,
a decrease of $387, or 53.7%, compared with $721 for the year
ended December 31, 2001.

The primary component of the $334 in cash
provided by financing activities in 2002 was a $499 capital
contribution by our members, SBC and BellSouth. This was
partially offset in 2002 by $79 in net distributions to minority
interests, $59 in external debt repayments and a $27 commercial
paper repayment. The 2002 external debt repayment consisted
primarily of capital lease payments of $42 and a
$17 payment to retire bonds issued by our Puerto Rico
company.

The $721 in cash provided by financing activities
in 2001 consisted of net cash inflows of $1,973 related to the
issuance of $2,000 in senior notes in December 2001 and
$1,370 associated with the contribution of the Houston and
Puerto Rico properties in January 2001 and
September 2001, respectively. These cash inflows were
partially offset by cash outflows in 2001 for the payment of
$1,148 in affiliate debt, a net $672 repayment of borrowings
under our commercial paper program, contractual distributions of
$639 to SBC and BellSouth related to income tax obligations,
$126 in net distributions to minority interests, and other
external debt repayments of $37, primarily for capital leases.



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

Acquisition of AT&T
Wireless.In February 2004, we
agreed to acquire AT&T Wireless for an aggregate
consideration of approximately $41,000 cash. SBC and BellSouth
have agreed to provide us sufficient cash resources to fund the
transaction.

Network Upgrades and
Expansion.The operation, upgrade and
expansion of our networks will continue to require substantial
amounts of capital over the next several years. For the year
ended December 31, 2003, we spent $2,734 for our
GSM/GPRS/EDGE network upgrade plus other network and non-network
capital expenditures and $619 for equity contributions to our
network sharing ventures with T-Mobile and AT&T Wireless. We
anticipate that our 2004 capital investments for completing our
network upgrade and funding other ongoing capital expenditures
and equity investments will not differ materially from our 2003
investments. As our GSM overlay is substantially complete at
December 31, 2003, our primary focus in 2004 will be on
improving network quality, expanding our GSM/GPRS/EDGE coverage
and adding EDGE upgrades to our network. We anticipate only a
minimal amount of expenditures on TDMA equipment.

Our GSM/GPRS/EDGE network upgrade is currently on
schedule with 93% of our POPs currently with cellular or PCS
service covered by GSM/GPRS at the end of 2003. At the end of
the second quarter of 2003, we announced the worlds first
commercial deployment of EDGE technology in our Indianapolis
market. Subsequent to that launch, we launched EDGE in a number
of other markets. We have approximately 20% of our POPs
currently with cellular or PCS service covered at
December 31, 2003. We expect 100% coverage of our POPs with
GSM/GPRS/EDGE technology by the end of 2004.

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 carriers since beginning our overlay project. In 2003,
these include agreements with AT&T Wireless, T-Mobile and
Western Wireless Corporation. These agreements enable us to
efficiently and immediately expand our GSM/GPRS footprint
without incurring additional capital expenditures. By combining
our GSM/GPRS footprint with those of other carriers through
roaming agreements and joint ventures, GSM/GPRS was

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PART II (Dollars
in Millions)




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

available in areas that contained approximately
90 percent of the total U.S. population at the end of 2003
and we anticipate coverage in areas containing almost 95% of the
total U.S. population, where virtually all of our customer usage
is, by the end of 2004.

Licenses
Acquisition.In August 2003, we
executed an agreement with NextWave Telecom, Inc. (NextWave) and
certain of its affiliates pursuant to which we would purchase
FCC licenses for wireless spectrum in 34 markets for $1,400
cash. The transaction is subject to various closing conditions,
some of which are outside of the parties control. The
transaction is expected to close in the first half of 2004.

Investment in
Salmon.We and Crowley Digital
Wireless, LLC (Crowley Digital) formed Salmon to bid for PCS
licenses in an FCC auction that ended in January 2001.
Salmon was successful in acquiring 45 licenses covering
more than 11 million POPs. We have made secured loans to
Salmon, which it used to make full payment on the 45 licenses it
received from the FCC. See also Note 6, Salmon
in Item 8, Financial Statements and Supplemental
Data  Historical Financial Statements 
Cingular Wireless LLC. We estimate the costs to build
Salmons network system to be approximately $350 to $500,
of which $9 was expended in 2003 and $23 to date, and expect it
to be substantially completed by the end of 2006. In addition,
we estimate our costs to fund system operating expenses and
other operating losses to be approximately $200 to $300 through
2006. Approximately $29 has been incurred to fund system
operating expenses and other operating losses from inception
through December 31, 2003.

Investment in Venture with
T-Mobile.In November 2001, we
and T-Mobile formed a jointly-controlled infrastructure venture,
GSMF, to allow the companies to share network infrastructures in
the California, Nevada and New York City metropolitan area
markets. We and T-Mobile buy access to the ventures
network infrastructure but each of us has retained ownership and
control of our own FCC licenses. Although the networks we
contributed to the venture are constructed and operational, we
are required on a regular basis to invest additional capital to
modify and expand the network and to fund cash operating
expenses.

We and T-Mobile agreed to jointly fund capital
expenditures of GSMF. Contributions to GSMF are generally
determined by our proportionate share of the annual capital
expenditure requirements based on each partys incremental
growth in network usage, and such contributions are accounted
for as an increase to our investment. For the years ended
December 31, 2002 and 2003, we made net capital
contributions of cash and assets to GSMF of $707 and $612,
respectively. We had contractual commitments to contribute cash
of $225 to GSMF in both 2002 and 2003. The net capital
contribution amounts above include these cash contributions made
by us for the years ended December 31, 2002 and 2003,
respectively, in full satisfaction of our contractual
commitments.

Formation of Joint Venture with AT&T
Wireless.In January 2002, we
entered into an agreement with AT&T Wireless to form a
jointly-controlled and equally-owned venture to construct a GSM
voice network with GPRS/EDGE data technologies along a number of
major highways in the United States in order to ensure
availability of GSM/GPRS/EDGE service to our customers and
reduce incollect roaming expenses we pay to other carriers when
our customers use their wireless devices when they travel on
those highways. We and AT&T Wireless each buy services from
the venture and provide services under our own brand names. As
of December 31, 2003, we had an investment in the venture
of $21. In 2004, we expect to spend approximately $25 for
capital expenditures.

Purchase of California/Nevada Tower Leasehold
Interests.In February 2003, we
acquired leasehold interests in 545 communications towers in
California and Nevada from SpectraSite, Inc. (SpectraSite) for
$81 in cash. SpectraSite had previously acquired these leasehold
interests from an affiliate of SBC in 2000, and we leased a
portion of the tower space indirectly from SpectraSite.
GSMFs financial statements

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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

include $247 of capital lease obligations and
$208 of related leased assets. Subsequent to February 2003, the
payments on the leases were assigned from the affiliate of SBC
to a subsidiary of the company.

Contractual
Obligations.The following table
provides a summary of our contractual commitments as of
December 31, 2003.

|                               |  |       |        |                        |  |           |       |           |  |            |       |  |  |   |        |  |  |   |       | 
|------------------------------ |  | ----- | ------ | ---------------------- |  | --------- | ----- | --------- |  | ---------- | ----- |  |  | - | ------ |  |  | - | ----- | 
|                               |  |       |        |                       
|                               |  |       |        | Payments Due by Period
|                               |  |       |        |                       
|                               |  | Total |        | 2004                   |  | 2005-2006 |       | 2007-2008 |  | After 2008
|                               |  |       |        |                        |  |           |       |           |  |           
|Long Term Debt(1)              |  | $     | 16,323 |                        |  | $         | 765   |           |  | $          | 1,927 |  |  | $ | 10,758 |  |  | $ | 2,873 | 
|Capital Lease Obligations(2)   |  |       | 2,830  |                        |  |           | 130   |           |  |            | 180   |  |  |   | 185    |  |  |   | 2,335 | 
|Operating Leases(3)            |  |       | 2,363  |                        |  |           | 431   |           |  |            | 711   |  |  |   | 459    |  |  |   | 762   | 
|Purchase Obligations(4)        |  |       | 628    |                        |  |           | 371   |           |  |            | 156   |  |  |   | 73     |  |  |   | 28    | 
|Other Long-term Obligations(5) |  |       | 1,586  |                        |  |           | 1,400 |           |  |            | 186   |  |  |   | 0      |  |  |   | 0     | 
|                               |  |       |        |                        |  |           |       |           |  |            |       |  |  |   |        |  |  |   |       | 
|Total                          |  | $     | 23,730 |                        |  | $         | 3,097 |           |  | $          | 3,160 |  |  | $ | 11,475 |  |  | $ | 5,998 | 
|                               |  |       |        |                        |  |           |       |           |  |            |       |  |  |   |        |  |  |   |       | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Long-term debt payouts include interest of
    $4,581. The 3-5 years amount includes $9,678 of
    debt due to SBC and BellSouth with a maturity date of
    June 30, 2008. See Note 8 to the audited consolidated
    financial statements included in Item 8. We do not expect
    SBC and BellSouth to require any repayment if it would impair
    our debt ratings or impair our working capital or if we cannot
    advantageously raise debt or equity proceeds from external
    financing sources.
|   
|(2) | Capital lease obligations include executory costs
    and interest. See Note 8 to the Cingular Wireless LLC
    audited consolidated financial statements included in
    Item 8.                                                                                                                                                                                                                                                                                                                            
|   
|(3) | Operating lease payouts do not include payments
    due under renewals to the original lease term. See Note 16 to
    the audited Cingular Wireless LLC consolidated financial
    statements included in Item 8.                                                                                                                                                                                                                                                                                            
|   
|(4) | Purchase obligations exclude purchase orders
    entered into in the ordinary course of business for network
    equipment, handsets and other items.                                                                                                                                                                                                                                                                                                                                                        
|   
|(5) | Other Long-Term obligations include the purchase
    from NextWave of FCC licenses for wireless spectrum for $1,400
    cash in 2004 and the expected payout of the Crowley put option
    of $186 in 2006. See Note 6 to the Cingular Wireless LLC
    audited consolidated financial statements included in
    Item 8 for further discussion of the Crowley put option.                                                                                                                                   

We have vendor contracts for the acquisition and
installation of infrastructure for our GSM/GPRS/EDGE overlay.
Under these agreements, we have made good faith capital
expenditure commitments for 2004. However, since there is no
penalty for not achieving the contemplated levels of
expenditures under these vendor agreements, we are not
contractually obligated to spend these amounts and, therefore,
these amounts are not included in the table above.

As of December 31, 2003, our defined benefit
pension plans were fully funded. Therefore, we do not anticipate
any cash funding needs to meet minimum required funding
thresholds in 2004. We anticipate minimal funding in 2005 and
approximately $60  $90 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 15 to the Cingular Wireless LLC audited consolidated
financial statements included in Item 8.

Debt Service.As of
December 31, 2003, we had $12,687 of consolidated
indebtedness and capitalized lease obligations. This debt
includes $9,678 in unsecured, subordinated member loans from SBC
and BellSouth, $2,000 in unsecured senior notes and $955 in
capital lease obligations. We entered into $143 of capital lease
obligations for the year ended December 31, 2003, primarily
related to communication towers.

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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

Member loans are subordinated to our senior
notes, any other capital markets debt and any debt outstanding
under our bank credit facility. We may prepay the member loans
or refinance them with senior debt (other than with the proceeds
from our bank credit facility or senior loans from SBC or
BellSouth) at any time if we are not in default under our senior
debt.

As of July 1, 2003, we executed amended,
restated and consolidated subordinated promissory notes to
modify the terms of our member loans. These notes to SBC and
BellSouth reduced the fixed interest rate from 7.5% to 6.0% and
extended the maturity date to June 30, 2008. This change
will result in a reduction of interest expense of approximately
$145 per annum.

Off-Balance Sheet
Arrangements.At December 31,
2003, we were obligated to pay certain capital leases assigned
to the GSMF venture of $28. We have investments in
unconsolidated affiliates, principally our joint ventures with
T-Mobile and AT&T Wireless. As required by generally
accepted accounting principles (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 consolidated balance sheets and the results of
operations of the ventures are not included in our consolidated
statements of income, other than as equity in earnings of
unconsolidated affiliates.

Effective January 1, 2003, we began
consolidating the financial position, results of operations and
cash flows of Salmon due to our early adoption of FIN 46. For
prior periods presented, Salmon was accounted for using the
equity method of accounting.



| |                  
| | -----------------
| | Capital Resources

At December 31, 2003, we had a commercial
paper program and a $1,000 unsecured 364-day revolving bank
credit facility to support the commercial paper program.
Depending upon the corporate credit ratings assigned to us from
time to time by the various rating agencies, any amounts
outstanding under our revolving credit facility would bear
variable rate interest at a spread above LIBOR ranging from
0.24% to 1.30%. As a result of our current credit ratings,
interest would currently accrue on any borrowings under our
revolving credit facility at an average rate of LIBOR plus
28 basis points, assuming borrowings under the facility are
less than 33% of the $1,000 credit facility, or 38 basis
points, assuming higher borrowings. The credit facility contains
customary events of default and covenants, including a covenant
to maintain a specified leverage ratio, as therein defined, a
limitation on mergers and sale of all or substantially all of
our assets and a negative pledge. The credit agreement provides
that each lender will have the option to terminate its
commitment to make additional loans and declare all outstanding
amounts to be due and payable upon a change in control (as
defined) or upon the consummation of a merger or similar
transaction involving us or Cingular Wireless Corporation, our
manager, with any of the five other largest wireless carriers in
the United States, determined based on the number of customers
of such carrier as of June 30, 2003. Our acquisition of
AT&T Wireless would trigger this option. We plan to
renegotiate this provision with the banks prior to the closing
of the acquisition. We cannot provide assurance as to the
outcome of this initiative. We were in compliance with all
covenants under our credit facility at December 31, 2003,
and there are no other material covenants to which we are
subject under other agreements. Based on our current business
plans and projections, we believe we will have sufficient
operating cash flow to enable us to continue to comply with the
covenants in the credit facility and to not have to draw upon it.

On February 17, 2004, Standard &
Poors placed both our long-term and short-term ratings on
review for possible downgrade, while both Moodys Investor
Services and Fitch Ratings placed our long-term ratings on
review for possible downgrade. To the extent the credit rating
agencies downgrade our ratings, it may

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

be more difficult to access the commercial paper
market and our cost of borrowings from all sources may increase.

As of December 31, 2003, we had no
commercial paper or revolving credit facility debt outstanding.

Accounts Receivable Secured Borrowing.In December 2003, we established an
accounts receivable secured borrowing program that we can use to
obtain financing not to exceed $400, collateralized by customer
trade accounts receivable and related contract rights. The
program is a 364-day financing arrangement that is renewable
with the consent of the facility lenders. Under the program,
designated Cingular entities can sell their customer trade
accounts receivable and related contract rights on a
non-recourse, revolving basis to our special-purpose, wholly
owned, bankruptcy-remote subsidiary. The subsidiary has pledged
its interest in these receivables to, and may borrow against
these receivables from, asset-backed commercial paper conduit
lenders, whose obligations to issue commercial paper and lend
the proceeds to the subsidiary are backed by commitments from
commercial banks. Loans will be made to the subsidiary at
varying interest rates based on the ratings of our senior notes.
These rates would range from .275% to 1.25% over the borrowing
cost of the conduit lenders. As a result of our current credit
ratings, interest would currently accrue on any borrowings under
our accounts receivable secured borrowing at .275% over the
borrowing cost of the conduit lenders. We intend to use the
proceeds from this financing arrangement for general corporate
purposes, including for the acquisition of the spectrum licenses
from NextWave. This financing arrangement is subject to
customary secured borrowing covenants, does not have a
termination provision that is based on the credit ratings of
Cingulars senior unsecured long-term notes and will be
recorded as an on balance sheet transaction. We are currently in
compliance with the covenants and have no amounts outstanding
under this financing arrangement.

We expect to rely on cash provided by operations
to fund most of our ongoing operations, business development,
debt service and distributions to our members. To the extent
that additional cash is required from time to time for these
purposes or for acquisitions or other business expansion
initiatives, including the acquisition of NextWave spectrum
anticipated in the first half of 2004, we may utilize the
following sources of external funding: accounts receivable
secured borrowing, commercial paper, long-term debt, short-term
bank loans, equity investments and borrowings from SBC and
BellSouth and bank borrowings under our revolving credit
facility, which we do not expect to use as a normal source of
funding. Neither SBC nor BellSouth is generally obligated or
expected to provide additional financing to us, and there is no
assurance that any additional loans, if made, would be on a
subordinated basis. We believe that we can access the capital
markets to the extent necessary to meet our external financing
needs.

Current plans for the AT&T Wireless
acquisition contemplate that we will not be required to raise
cash or issue securities to fund the transaction. SBC and
BellSouth have agreed to fund, from their internal sources, and
potential asset sales, and, to the extent required, from third
party borrowing provide our manager with, the cash required for
the acquisition. However, because of uncertainties concerning
the specific financing plans for the acquisition, potential
changes to our capital structure, progress and success of
integrating AT&T Wireless with us, realization of capital
and cost synergies and other considerations, there can be no
assurance that our credit ratings will not be lowered and our
external financing ability adversely affected.

Critical Accounting Policies and
Estimates

The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States 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

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

circumstances. Actual results may differ from
those estimates under different assumptions or conditions. The
various policies that are important to the portrayal of our
financial condition and results of operations include:



| |                                               
| | ----------------------------------------------
| | Property, Plant &
    Equipment  Depreciation



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

The wireless communications industry is capital
intensive. Depreciation of operating assets constitutes a
substantial 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.



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

We depreciate our wireless communications
equipment using the straight-line method over estimated useful
lives. We periodically review changes in our technology and
industry conditions, 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 service lives of our
remaining TDMA network assets. Useful lives were shortened to
fully depreciate all such equipment by December 31, 2008.
While we will 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 is warranted based
on the projected transition of network traffic to GSM/GPRS/EDGE.
This change in estimate increased depreciation in 2003 by $91.
TDMA equipment acquired after January 1, 2003 will be
assigned estimated useful lives not to exceed six years.



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

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

We continue to review the useful lives of the
TDMA assets throughout the period of transition of customers to
GSM/GPRS/EDGE-capable equipment to determine whether further
changes are warranted. We believe useful lives of our TDMA
assets are appropriate as of December 31, 2003.



| |                                                                     
| | --------------------------------------------------------------------
| | Property, Plant &
    Equipment  Valuation of Long-Lived
    Assets



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

We review long-lived assets, consisting primarily
of property, plant and equipment, 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 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. 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.

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



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

In analyzing impairment, significant assumptions
used in determining the undiscounted cash flows of our property,
plant and equipment include:



|  |                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | identification of the asset group subject to the
    impairment;                                                                                                 
| 
| | cash flows attributed to the asset group;                                                                                                                        
| 
| | future cash flows of the asset group 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 our property, plant and equipment. In addition, an
estimated discount rate is used to incorporate the time value of
money and risk inherent in the future cash flows. We believe
that our estimates are consistent with assumptions that
marketplace participants would use in their estimates of fair
value.



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

The use of different estimates or assumptions
within our undiscounted cash flow model (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 our asset group, thereby requiring the
need to compare the carrying values of the asset group to its
fair value.

The use of different discount rates when
determining the fair value of our property, plant and equipment
would result in different values for our property, plant and
equipment, and impact any related impairment charges.

In the fiscal year ended December 31, 2002,
we recognized impairment charges associated with our Mobitex
data business and with certain TDMA network infrastructure
assets. No impairment charges were recognized in the fiscal year
ended December 31, 2003.



| |                         
| | ------------------------
| | 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 as of October
1st 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.



| |                           
| | --------------------------
| | 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.

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

In analyzing goodwill for potential impairment,
we use projections of future cash flows from our reporting unit
to determine whether its estimated 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 2003 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 or discount rates and
estimates of terminal values) when determining the fair value of
the reporting unit could result in different values and may
affect any related goodwill impairment charge.

For the 2003 goodwill impairment test performed
as of October 1, the fair value of our reporting unit was
significantly in excess of 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.
Impairment tests for indefinite-lived intangible assets,
consisting of FCC licenses, are required to be performed 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 estimate the fair value of our FCC licenses in the
aggregate, using a discounted cash flow model.



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

In accordance with EITF 02-7, Unit of
Accounting for Testing of Impairment of Indefinite-Lived
Intangible Assets, impairment tests for FCC licenses are
performed on an aggregate basis. We currently hold FCC licenses
in 56 markets where we do not currently provide service. The
majority of these licenses were granted to Salmon PCS in October
2001. As we plan to construct an operational network in these
licensed territories in the near future, 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
December 31, 2003 was $496.

We estimate the fair value of our FCC licenses
using a discounted cash flow model. This 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. These assumptions underlying these
    inputs are based upon a combination of historical results and
    trends, new industry developments and our business plans. 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 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 FCC licenses not included
in the aggregation is determined by obtaining recent 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

If any legal, regulatory, contractual,
competitive, economic, or other factors were to limit the useful
life of our indefinite-lived FCC licenses, we would be required
to test these intangible assets in accordance with SFAS 144.

The use of different estimates or assumptions
within our discounted cash flow model when determining the fair
value of our FCC licenses could result in different values for
our FCC licenses and may affect any related impairment charge.

For the 2003 FCC license impairment test
performed as of October 1, the fair value of the group of
aggregated licenses was significantly in excess of its carrying
value.

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.



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



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

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 allowances for 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.
Either of these situations may result in write-off patterns that
differ from our historical experience.



| |                                
| | -------------------------------
| | Service Revenues 
    Rollover



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

Certain customer rate plans include a rollover
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

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

from the date of purchase. We defer revenue based
on an estimate of the portion of minutes expected to be utilized
prior to expiration.



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

Historical customer usage patterns over the prior
six month period, which have been demonstrated to be 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
rollover minutes. We record an obligation for those rollover
minutes we estimate will be utilized based on a weighted-average
of the per minute airtime implicit in the price of our rollover
rate plans.

The balance of the rollover deferral was $31 and
$103 as of December 31, 2002 and 2003, respectively.



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

If there is a change in future calling behavior
of our customers or rollover rate plan pricing, our estimate of
the future obligation associated with rollover minutes to be
deferred would change.



---

We have discussed the development and selection
of these critical accounting policies with the Audit Committee
of the Board of Directors 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                               |  | 2001                    |     | 2002 |  | 2003
|                                              |  |                         |     |      |  |     
|Interconnect and long distance(1)(2)          |  | $                       | 385 |      |  | $    | 663 |  |  | $ | 815 | 
|Agent commissions and compensation(1)         |  |                         | 33  |      |  |      | 46  |  |  |   | 103 | 
|Transition services(1)                        |  |                         | 267 |      |  |      | 17  |  |  |   |    | 
|Other services(1)                             |  |                         | 44  |      |  |      | 68  |  |  |   | 77  | 
|Interest expense on debt due to affiliates(1) |  |                         | 735 |      |  |      | 726 |  |  |   | 653 | 



---



|    |                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These are charges from SBC and BellSouth, and
    their affiliates. See Note 8 to the Cingular Wireless LLC
    audited consolidated financial statements included in
    Item 8 for further discussion related to interest expense
    on debt due to affiliates.                                    
|   
|(2) | The increase in interconnect and long distance in
    2002 and 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.

For the year ended December 31, 2002, SBC
and BellSouth made cash capital contributions to us of $499 for
general corporate purposes.

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

Recent Accounting Pronouncements

See the section, New Accounting Standards, in
Note 1. Summary of Significant Accounting
Policies in Item 8, Financial Statements and
Supplemental Data  Historical Financial
Statements  Cingular Wireless LLC.






|         |                                                              
|-------- | -------------------------------------------------------------
|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 value 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 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, 2003, we had outstanding an
aggregate of $9,678 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. In addition, we currently
have outstanding $2,000 of unsecured senior notes with fixed
interest rates ranging from 5.625% to 7.125% and with maturity
dates between 2006 and 2031. As of December 31, 2003, 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, 2003 by $3 per annum. We
also have capital leases outstanding of $908 primarily with a
fixed interest rate of 8% and of $47 with fixed interest rates
ranging from 4.86% to 7.08%.

As of December 31, 2003, we had $64 of
floating rate borrowings. A change in interest rates of 100
basis points would change our interest expense on floating rate
debt balances as of December 31, 2003 by less than $1 per
annum.

We currently have no commercial paper outstanding
and we have not borrowed any amounts under our revolving credit
facility or accounts receivable secured borrowing facility.
However, we may have future interest rate risk associated with
the issuance of commercial paper or borrowings under our
revolving credit facility or accounts receivable secured
borrowing. Commercial paper and loans under the secured
borrowing facility are issued at a pre-determined spread to
LIBOR, depending on our credit ratings. See Item 7.
Managements Discussion and Analysis of Financial Condition
and Results of Operations  Liquidity and Capital
Resources.

The fair values of our foreign currency
derivatives are subject to fluctuations in foreign exchange
rates. We use forward foreign currency exchange contracts to
offset foreign exchange gains and losses on Japanese
Yen-denominated capital lease obligations. As of
December 31, 2003, the approximate fair value of these
foreign currency hedging instruments was a loss of $15. The
potential gain or loss in the fair value of such financial
instruments from a hypothetical 10% decrease or increase in the
Japanese Yen relative to the U.S. Dollar would be less than
$10 as of December 31, 2003, although this would be
primarily offset by the decrease or increase in the fair value
of the capital lease obligations. The fair value is based on
dealer quotes, considering current exchange rates. There is not
a cash flow impact or earnings risk associated with changes in
the fair value of the foreign currency hedging instruments and
the underlying capital lease obligations.

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



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 hypothetical future
foreign currency fluctuations. Future impacts of market risk
would be based on actual developments in the financial markets.
See Cautionary Language Concerning Forward-Looking
Statements following Part IV of this Annual Report.

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

|                                                                                                                                                                                                 |  |  |     | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  | --- | 
|Historical Financial Statements                                                                                                                                                                  |  |  |     | 
|Cingular Wireless LLC                                                                                                                                                                            |  |  |     | 
|Report of Independent Auditors                                                                                                                                                                   |  |  | 70  | 
|Consolidated Statements of Income for the years
    ended December 31, 2001, 2002, and 2003                                                                                                      |  |  | 71  | 
|Consolidated Balance Sheets as of
    December 31, 2002 and 2003                                                                                                                                 |  |  | 72  | 
|Consolidated Statements of Cash Flows for the
    years ended December 31, 2001, 2002, and 2003                                                                                                  |  |  | 73  | 
|Consolidated Statements of Changes in
    Members Capital for the years ended December 31,
    2001, 2002, and 2003                                                                             |  |  | 74  | 
|Notes to Consolidated Financial Statements                                                                                                                                                       |  |  | 75  | 
|GSM Facilities LLC                                                                                                                                                                               |  |  |     | 
|Report of Independent
    Auditors  Ernst & Young LLP                                                                                                                                           |  |  | 112 | 
|Report of Independent
    Auditors  PricewaterhouseCoopers LLP                                                                                                                                  |  |  | 113 | 
|Consolidated Statements of Operations for the
    period from November 1, 2001 (inception) through
    December 31, 2001 and for the years ended December 31,
    2002 and 2003                  |  |  | 114 | 
|Consolidated Balance Sheets as of
    December 31, 2002 and 2003                                                                                                                                 |  |  | 115 | 
|Consolidated Statements of Cash Flows for the
    period from November 1, 2001 (inception) through
    December 31, 2001 and for the years ended December 31,
    2002 and 2003                  |  |  | 116 | 
|Consolidated Statements of Changes in
    Members Capital for the period from November 1, 2001
    (inception) through December 31, 2001 and for the years
    ended December 31, 2002 and 2003 |  |  | 117 | 
|Notes to Consolidated Financial Statements                                                                                                                                                       |  |  | 118 | 
|Financial Statement Schedule                                                                                                                                                                     |  |  |     | 
|Cingular Wireless LLC                                                                                                                                                                            |  |  |     | 
|Schedule II  Valuation and
    Qualifying Accounts                                                                                                                                              |  |  | 126 | 

69



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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)




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

REPORT OF INDEPENDENT AUDITORS

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,
2002 and 2003 and the related consolidated statements of income,
changes in members capital, and cash flows for each of the
three years in the period ended December 31, 2003. Our
audits also included the financial statement schedule listed in
the Index at Item 15a(2). These financial statements and
schedule 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 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
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, the consolidated financial
statements referred to above present fairly, in all material
respects, the consolidated financial position of Cingular
Wireless LLC at December 31, 2002 and 2003, and the
consolidated results of its operations and its cash flows for
each of the three years in the period ended December 31,
2003, in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the related
financial statement 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 discussed in Note 4 to the financial
statements, in 2002 the Company adopted Statement of Financial
Accounting Standards No. 142, Goodwill and Other
Intangible Assets.

/s/ ERNST
& YOUNG LLP

Atlanta, Georgia

February 6, 2004, except for


Note 18, as to which


the date is February 17, 2004


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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,      
|                                                                                        |                                                                                                     |                              
|                                                                                        |                                                                                                     | 2001                          |        | 2002   |      | 2003
|                                                                                        |                                                                                                     |                               |        |        |      |     
|                                                                                        |                                                                                                     |                              
|                                                                                        |                                                                                                     | (Dollars in millions)        
|Operating revenues:                                                                     |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|                                                                                        | Service revenues                                                                                    |                               | $      | 13,229 |      |      | $      | 13,922 |        |   | $      | 14,223 |       
|                                                                                        | Equipment sales                                                                                     |                               |        | 1,039  |      |      |        | 981    |        |   |        | 1,260  |       
|                                                                                        |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|Total operating revenues                                                                |                                                                                                     |                               | 14,268 |        |      |      | 14,903 |        |        |   | 15,483 |       
|Operating expenses:                                                                     |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|                                                                                        | Cost of services (excluding depreciation of
    $1,291, $1,396 and $1,672, which is included below) |                               |        | 2,912  |      |      |        | 3,571  |        |   |        | 3,652  |       
|                                                                                        | Cost of equipment sales                                                                             |                               |        | 1,652  |      |      |        | 1,535  |        |   |        | 2,031  |       
|                                                                                        | Selling, general and administrative                                                                 |                               |        | 5,235  |      |      |        | 5,426  |        |   |        | 5,422  |       
|                                                                                        | Depreciation and amortization                                                                       |                               |        | 1,921  |      |      |        | 1,850  |        |   |        | 2,089  |       
|                                                                                        |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|Total operating expenses                                                                |                                                                                                     |                               | 11,720 |        |      |      | 12,382 |        |        |   | 13,194 |       
|                                                                                        |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|Operating income                                                                        |                                                                                                     |                               | 2,548  |        |      |      | 2,521  |        |        |   | 2,289  |       
|Other income (expenses):                                                                |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|                                                                                        | Interest expense                                                                                    |                               |        | (822   | )    |      |        | (911   | )      |   |        | (856   | )     
|                                                                                        | Minority interest in earnings of consolidated
    entities                                          |                               |        | (122   | )    |      |        | (123   | )      |   |        | (101   | )     
|                                                                                        | Equity in net loss of affiliates                                                                    |                               |        | (68    | )    |      |        | (265   | )      |   |        | (323   | )     
|                                                                                        | Other, net                                                                                          |                               |        | 164    |      |      |        | 29     |        |   |        | 41     |       
|                                                                                        |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|                                                                                        |                                                                                                     | Total other income (expenses) |        |        | (848 | )    |        |        | (1,270 | ) |        |        | (1,239 | )
|                                                                                        |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|Income before provision for income taxes and
    cumulative effect of accounting change |                                                                                                     |                               | 1,700  |        |      |      | 1,251  |        |        |   | 1,050  |       
|Provision for income taxes                                                              |                                                                                                     |                               | 8      |        |      |      | 12     |        |        |   | 28     |       
|                                                                                        |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|Income before cumulative effect of accounting
    change                                |                                                                                                     |                               | 1,692  |        |      |      | 1,239  |        |        |   | 1,022  |       
|Cumulative effect of accounting change, net of tax                                      |                                                                                                     |                               |       |        |      |      | (32    | )      |        |   |       |       
|                                                                                        |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       
|Net income                                                                              |                                                                                                     | $                             | 1,692  |        |      | $    | 1,207  |        |        | $ | 1,022  |       
|                                                                                        |                                                                                                     |                               |        |        |      |      |        |        |        |   |        |       

See accompanying notes.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)




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

CINGULAR WIRELESS LLC

CONSOLIDATED BALANCE SHEETS

|                                                 |                                                                                   |                       |        |       |   |   |        |       |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | --------------------- | ------ | ----- | - | - | ------ | ----- | -
|                                                 |                                                                                   |                      
|                                                 |                                                                                   | December 31,         
|                                                 |                                                                                   |                      
|                                                 |                                                                                   | 2002                  |        | 2003 
|                                                 |                                                                                   |                       |        |      
|                                                 |                                                                                   |                      
|                                                 |                                                                                   | (Dollars in millions)
|ASSETS                                          
|Current assets:                                  |                                                                                   |                       |        |       |   |   |        |      
|                                                 | Cash and cash equivalents                                                         |                       | $      | 908   |   |   | $      | 1,139 |  
|                                                 | Accounts receivable  net of allowance
    for doubtful accounts of $163 and $130 |                       |        | 1,520 |   |   |        | 1,592 |  
|                                                 | Inventories                                                                       |                       |        | 126   |   |   |        | 273   |  
|                                                 | Prepaid expenses and other current assets                                         |                       |        | 177   |   |   |        | 296   |  
|                                                 |                                                                                   |                       |        |       |   |   |        |      
|Total current assets                             |                                                                                   |                       | 2,731  |       |   |   | 3,300  |      
|Property, plant and equipment, net               |                                                                                   |                       | 10,146 |       |   |   | 10,939 |      
|FCC licenses, net                                |                                                                                   |                       | 7,387  |       |   |   | 7,769  |      
|Goodwill                                         |                                                                                   |                       | 844    |       |   |   | 849    |      
|Other intangible assets, net                     |                                                                                   |                       | 307    |       |   |   | 155    |      
|Investments in and advances to equity affiliates |                                                                                   |                       | 2,316  |       |   |   | 2,288  |      
|Other assets                                     |                                                                                   |                       | 391    |       |   |   | 226    |      
|                                                 |                                                                                   |                       |        |       |   |   |        |      
|Total assets                                     |                                                                                   | $                     | 24,122 |       |   | $ | 25,526 |      
|                                                 |                                                                                   |                       |        |       |   |   |        |      
|                                                
|LIABILITIES AND MEMBERS
    CAPITAL            
|Current liabilities:                             |                                                                                   |                       |        |       |   |   |        |      
|                                                 | Debt maturing within one year                                                     |                       | $      | 45    |   |   | $      | 95    |  
|                                                 | Accounts payable                                                                  |                       |        | 1,043 |   |   |        | 904   |  
|                                                 | Due to affiliates, net                                                            |                       |        | 45    |   |   |        | 54    |  
|                                                 | Advanced billing and customer deposits                                            |                       |        | 446   |   |   |        | 538   |  
|                                                 | Accrued liabilities                                                               |                       |        | 1,208 |   |   |        | 1,596 |  
|                                                 |                                                                                   |                       |        |       |   |   |        |      
|Total current liabilities                        |                                                                                   |                       | 2,787  |       |   |   | 3,187  |      
|Long-term debt:                                  |                                                                                   |                       |        |       |   |   |        |      
|                                                 | Debt due to affiliates                                                            |                       |        | 9,678 |   |   |        | 9,678 |  
|                                                 | Other long-term debt, net of discount                                             |                       |        | 2,868 |   |   |        | 2,914 |  
|                                                 |                                                                                   |                       |        |       |   |   |        |      
|Total long-term debt                             |                                                                                   |                       | 12,546 |       |   |   | 12,592 |      
|Other noncurrent liabilities                     |                                                                                   |                       | 681    |       |   |   | 604    |      
|                                                 |                                                                                   |                       |        |       |   |   |        |      
|Total liabilities                                |                                                                                   |                       | 16,014 |       |   |   | 16,383 |      
|Minority interests in consolidated entities      |                                                                                   |                       | 567    |       |   |   | 659    |      
|Members capital:                                |                                                                                   |                       |        |       |   |   |        |      
|                                                 | Members capital                                                                  |                       |        | 7,721 |   |   |        | 8,664 |  
|                                                 | Receivable for properties to be contributed                                       |                       |        | (178  | ) |   |        | (178  | )
|                                                 | Accumulated other comprehensive loss                                              |                       |        | (2    | ) |   |        | (2    | )
|                                                 |                                                                                   |                       |        |       |   |   |        |      
|Total members capital                           |                                                                                   |                       | 7,541  |       |   |   | 8,484  |      
|                                                 |                                                                                   |                       |        |       |   |   |        |      
|Total liabilities and members capital           |                                                                                   | $                     | 24,122 |       |   | $ | 25,526 |      
|                                                 |                                                                                   |                       |        |       |   |   |        |      

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,                       
|                                                                                      |                                                            |                                               
|                                                                                      |                                                            | 2001                                           |        | 2002  |      | 2003
|                                                                                      |                                                            |                                                |        |       |      |     
|                                                                                      |                                                            |                                               
|                                                                                      |                                                            | (Dollars in millions)                         
|Operating activities                                                                  |                                                            |                                                |        |       |      |      |        |       |      |   |        |      
|Net income                                                                            |                                                            | $                                              | 1,692  |       |      | $    | 1,207  |       |      | $ | 1,022  |      
|Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                            |                                                |        |       |      |      |        |       |      |   |        |      
|                                                                                      | Depreciation and amortization                              |                                                |        | 1,921 |      |      |        | 1,850 |      |   |        | 2,089 |     
|                                                                                      | Provision for doubtful accounts                            |                                                |        | 333   |      |      |        | 404   |      |   |        | 259   |     
|                                                                                      | Asset impairments                                          |                                                |        |      |      |      |        | 151   |      |   |        |      |     
|                                                                                      | Gain on disposition of businesses                          |                                                |        | (97   | )    |      |        | (8    | )    |   |        | (3    | )   
|                                                                                      | Minority interest in earnings of consolidated
    entities |                                                |        | 122   |      |      |        | 123   |      |   |        | 101   |     
|                                                                                      | Equity in net loss of affiliates                           |                                                |        | 68    |      |      |        | 265   |      |   |        | 323   |     
|                                                                                      | Cumulative effect of accounting change, net of tax         |                                                |        |      |      |      |        | 32    |      |   |        |      |     
|                                                                                      | Changes in operating assets and liabilities:               |                                                |        |       |      |      |        |       |      |   |        |       |     
|                                                                                      |                                                            | Accounts receivable                            |        |       | (541 | )    |        |       | (280 | ) |        |       | (331 | )
|                                                                                      |                                                            | Other current assets                           |        |       | 113  |      |        |       | 21   |   |        |       | (230 | )
|                                                                                      |                                                            | Accounts payable and other current liabilities |        |       | 90   |      |        |       | (420 | ) |        |       | 290  |  
|                                                                                      |                                                            | Pensions and post-employment benefits          |        |       | 6    |      |        |       | 91   |   |        |       | 55   |  
|                                                                                      | Other, net                                                 |                                                |        | (42   | )    |      |        | 156   |      |   |        | 111   |     
|                                                                                      |                                                            |                                                |        |       |      |      |        |       |      |   |        |      
|Net cash provided by operating activities                                             |                                                            |                                                | 3,665  |       |      |      | 3,592  |       |      |   | 3,686  |      
|Investing activities                                                                  |                                                            |                                                |        |       |      |      |        |       |      |   |        |      
|Construction and capital expenditures                                                 |                                                            |                                                | (3,156 | )     |      |      | (3,085 | )     |      |   | (2,734 | )    
|Investments in and advances to equity affiliates,
    net                             |                                                            |                                                | (585   | )     |      |      | (450   | )     |      |   | (616   | )    
|Dispositions of assets                                                                |                                                            |                                                | 85     |       |      |      | 6      |       |      |   | 7      |      
|Acquisitions of businesses and licenses, net of
    cash received                     |                                                            |                                                | (289   | )     |      |      | (6     | )     |      |   | (25    | )    
|Contractor engineering deposit                                                        |                                                            |                                                |       |       |      |      | (50    | )     |      |   |       |      
|                                                                                      |                                                            |                                                |        |       |      |      |        |       |      |   |        |      
|Net cash used in investing activities                                                 |                                                            |                                                | (3,945 | )     |      |      | (3,585 | )     |      |   | (3,368 | )    
|Financing activities                                                                  |                                                            |                                                |        |       |      |      |        |       |      |   |        |      
|Net repayment of debt due to affiliates                                               |                                                            |                                                | (1,148 | )     |      |      |       |       |      |   |       |      
|Proceeds from issuance of Senior Notes, net of
    issuance costs                     |                                                            |                                                | 1,973  |       |      |      |       |       |      |   |       |      
|Net repayment of commercial paper                                                     |                                                            |                                                | (672   | )     |      |      | (27    | )     |      |   |       |      
|Net repayment of long-term debt                                                       |                                                            |                                                | (37    | )     |      |      | (59    | )     |      |   | (64    | )    
|Distributions to members                                                              |                                                            |                                                | (639   | )     |      |      |       |       |      |   |       |      
|Net distributions to minority interests                                               |                                                            |                                                | (126   | )     |      |      | (79    | )     |      |   | (33    | )    
|Contributions from members                                                            |                                                            |                                                | 1,370  |       |      |      | 499    |       |      |   | 10     |      
|                                                                                      |                                                            |                                                |        |       |      |      |        |       |      |   |        |      
|Net cash provided by (used in) financing
    activities                               |                                                            |                                                | 721    |       |      |      | 334    |       |      |   | (87    | )    
|                                                                                      |                                                            |                                                |        |       |      |      |        |       |      |   |        |      
|Net increase in cash and cash equivalents                                             |                                                            |                                                | 441    |       |      |      | 341    |       |      |   | 231    |      
|Cash and cash equivalents at beginning of period                                      |                                                            |                                                | 126    |       |      |      | 567    |       |      |   | 908    |      
|                                                                                      |                                                            |                                                |        |       |      |      |        |       |      |   |        |      
|Cash and cash equivalents at end of period                                            |                                                            | $                                              | 567    |       |      | $    | 908    |       |      | $ | 1,139  |      
|                                                                                      |                                                            |                                                |        |       |      |      |        |       |      |   |        |      

See accompanying notes.

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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, 2000 |                                 | $                     | 2,265 |      
|                             | Net income                      |                       |       | 1,692 |  
|                             | Contributions from members      |                       |       | 2,534 |  
|                             | Distributions to members        |                       |       | (639  | )
|                             | Other comprehensive loss        |                       |       | (2    | )
|                             |                                 |                       |       |      
|Balance at December 31, 2001 |                                 |                       | 5,850 |      
|                             | Net income                      |                       |       | 1,207 |  
|                             | Contributions from members, net |                       |       | 484   |  
|                             |                                 |                       |       |      
|Balance at December 31, 2002 |                                 |                       | 7,541 |      
|                             | Net income                      |                       |       | 1,022 |  
|                             | Distributions to members, net   |                       |       | (79   | )
|                             |                                 |                       |       |      
|Balance at December 31, 2003 |                                 | $                     | 8,484 |      
|                             |                                 |                       |       |      

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

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

Years Ended December 31, 2001, 2002 and
2003


(Dollars in Millions)


1.     Summary of
Significant Accounting Policies



| |                      
| | ---------------------
| | Basis of Presentation

Cingular Wireless LLC (the Company) is a Delaware
limited liability company formed by SBC Communications Inc.
(SBC) and BellSouth Corporation (BellSouth) as the operating
company for their U.S. wireless joint venture. The parties
entered into an agreement to form the Company in April 2000,
subject to regulatory approvals. Cingular Wireless Corporation
acts as the Companys manager and controls the
Companys management and operations. The Company provides
Cingular-branded 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 36 states. In addition, the
Company provides enhanced and interactive data services over a
proprietary Mobitex network utilizing base stations
and satellite transmission facilities. All of the Companys
operations, which serve customers in 50 states, the District of
Columbia, Puerto Rico and the U.S. Virgin Islands, are
conducted through subsidiaries or ventures.

On October 2, 2000, SBC and BellSouth (the
members) and certain of their subsidiaries contributed
substantially all of their U.S. wireless assets in exchange
for approximately 60% and 40% economic interests, respectively,
in the Company, and the Company began doing business under the
Cingular brand name in January 2001. SBC and
BellSouth share joint voting control of the Companys
operations by virtue of their 50/50 ownership of, and the terms
of the stockholders agreement pertaining to, Cingular
Wireless Corporation. All assets and liabilities contributed to
the venture have been recorded at their historical basis of
accounting. The Company recorded estimated receivables for
wireless operations to be contributed to the Company after the
formation date.

As provided for in the Contribution and Formation
Agreement between the Company, SBC and BellSouth, additional
contributions of wireless operations and assets in certain
markets were made during 2001 (see Note 2). 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,
2003. 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, 2001, 2002 and 2003 were $28, $22
and $30, respectively. For the wireless businesses contributed
in 2001, the Company received management fees in 2001 of $22 for
services provided prior to the actual dates of contribution.
These consolidated financial statements include charges from SBC
and BellSouth for certain expenses pursuant to various
agreements (see Notes 11 and 15). 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
United States (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 we believe are reasonable

75



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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)


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, depreciation
and amortization, valuation of inventory, pensions and other
benefits, investments and asset impairment.



| |                            
| | ---------------------------
| | 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. 46, Consolidation of Variable Interest Entities
(FIN 46), 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.



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

The Company manages the business as one
reportable business segment, wireless communications services,
which also is a single operating segment. The Company operates
only domestically.



| |             
| | ------------
| | FCC Licenses

The Federal Communications Commission (FCC)
issues 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.



| |                    
| | -------------------
| | 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 contract customers is billed in advance 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 is recorded as
deferred revenues 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. These estimates are based
primarily upon historical minutes of use.

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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)


Certain rate plans include a rollover 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. Historical
subscriber usage patterns over the prior six month period, which
have been demonstrated to be consistent and which the Company
views to be reliable for purposes of gauging predictive
behavior, allow the Company to estimate the number of 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 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
rollover minutes. The balance of the rollover deferral as of
December 31, 2002 and 2003 was $31 and $103, respectively,
and has been included in Advanced billings and customer
deposits in the consolidated balance sheets.

Roaming 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 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 (see also
Reclassifications).

Equipment sales consist principally of revenues
from the sale of wireless mobile telephone 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 channel and accessories 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.

Effective July 1, 2003, the Company adopted
Emerging Issues Task Force (EITF) No. 00-21,
Accounting for Revenue Arrangements with Multiple
Deliverables (see also New Accounting Standards). The
Company is applying the provisions of this statement on a
prospective basis subsequent to that date.

The Company determined that the sale of wireless
services through our direct sales channel 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, 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

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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)


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
over the expected customer relationship period, which is
currently estimated to be three years. The Company determined
that the sale of wireless services through our indirect sales
channel (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 Securities and Exchange Commission (SEC) Staff
Accounting Bulletin Number 101 (SAB 101), Revenue
Recognition in Financial Statements and EITF No. 00-21.
SAB 101 was amended in December 2003 by Staff Accounting
Bulletin Number 104 (SAB 104). These deferred fees and
costs are amortized over the estimated customer relationship
period. The Company has recorded deferred revenues and deferred
expenses of equal amount in the consolidated balance sheets. As
of December 31, 2002 and 2003, SAB 101 deferred
revenues and expenses were $198 and $104, respectively.

Income
Taxes

Substantially all of the operating units
controlled and consolidated by the Company are either limited
liability companies or partnerships. Accordingly, in most tax
jurisdictions, income tax items flow through to the members or
partners who are taxed at their level pursuant to federal and
state income tax laws. The members or partners are responsible
for their tax liabilities resulting from income earned at the
member or partner level. However, the Company has corporate
subsidiaries and LLC subsidiaries that are income taxpayers in
some jurisdictions and will record income tax expense.

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. During 2001,
the Company made distributions to members of $47 related to 2000
tax liabilities and $592 related to 2001 tax liabilities. Since
the Company did not generate taxable income to the members in
2002 and 2003, the Company made no distributions for tax
liabilities in 2002 and 2003.

Additionally, the Company is required to
distribute to its members 50% of its excess cash, as
defined in the operating agreement, at the end of each fiscal
year. Excess cash consists of funds generated from the
Companys operations less forecasted cash needs for the
upcoming fiscal year and distributions made to the members for
their tax payments. In all years presented, the Company was not
required to make any distributions of excess cash to the members.

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 $202 and $74 have been
included in Accounts payable in the consolidated
balance sheets as of December 31, 2002 and 2003,
respectively.

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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)


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.

Inventories

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

Property,
Plant and Equipment

Property, plant and equipment is stated at cost
less accumulated depreciation and amortization. The cost of
additions and substantial improvements is capitalized. 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.
Effective January 1, 2001, the Company conformed the
estimated useful lives with those used by its predecessor
entities. These useful lives are applied to all assets purchased
after January 1, 2001. This change did not have a material
effect on the Companys results of operations. 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 operating results. 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.



| |                        
| | -----------------------
| | 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. These capitalized software costs are included in
Property, plant and equipment, net in the
consolidated balance sheets and are being amortized ratably over
a period not to exceed five years.



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

Intangible assets consist primarily of FCC
licenses, the excess of consideration paid over the fair value
of net assets acquired in purchase business combinations
(goodwill) and customer lists. In 2001, goodwill and FCC
licenses were amortized using the straight-line method over
40 years.

With the adoption of Statement of Financial
Accounting Standards (SFAS) No. 142, Goodwill and Other
Intangible Assets (SFAS 142), as of January 1,
2002, goodwill and other indefinite-lived intangible assets are
not amortized. The Company has determined that FCC licenses
should be treated as indefinite-lived

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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)


intangible assets (see Note 4). No
amortization was taken on goodwill and FCC licenses in 2002 and
2003, with the exception of FCC licenses used in the Mobitex
data business. Customer lists represent values placed on
customers of acquired businesses and have a finite life. The
Companys customer lists are amortized over a five-year
period primarily using the straight-line method.

The Company tests goodwill and 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 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 4 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. For assets the Company intends to hold for 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 carrying amount of the asset group. 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. See
Note 12 for discussion of impairment losses recognized in
2002.

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 3 and 12).



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

The Company holds equity interests in certain
entities (see Note 5). These investments are 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 periodically reviews its equity method investments
for impairment. These reviews are performed to determine whether
a decline in the fair value of an investment below its carrying
value is deemed to be other than temporary.

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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)




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

In connection with the issuance of Senior Notes
in December 2001 described in Note 8, the Company recorded
$20 of deferred costs for underwriting fees and other related
debt issuance costs. The net deferred financing costs were $19
and $17 at December 31, 2002 and 2003, respectively. These
deferred financing costs are included in Other
assets in the consolidated balance sheets and are
amortized over the related terms of the notes using the
straight-line method, which approximates the interest method.



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

Costs for advertising are expensed as incurred.
Total advertising expenses were $509, $549 and $643 for the
years ended December 31, 2001, 2002 and 2003, respectively.



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

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 depending on the use of the derivative instrument and
whether it qualifies for hedge accounting.

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.

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.



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

In January 2003, the FASB issued FIN 46.
This standard clarifies the application of Accounting Research
Bulletin No. 51, Consolidated Financial Statements,
to address the consolidation of certain entities in which equity
investors do not have the characteristics of a controlling
financial interest or do not have sufficient equity at risk for
the entity to finance its activities without additional
subordinated support from other parties. FIN 46 requires
existing unconsolidated variable interest entities to be
consolidated by their primary beneficiaries. For variable
interest entities for which an enterprise holds a variable
interest acquired before February 1, 2003, FIN 46 may
be applied by restating previously issued financial statements
or prospectively from the date of adoption. The Company adopted
this new pronouncement effective January 1, 2003 and
consolidated Salmon PCS LLC (Salmon). The Company did not
restate any previously issued financial statements. The FASB
revised FIN 46 in December 2003, which did not impact the
Company. See Note 6 for further discussion of the consolidation
of Salmon.

In November 2002, the EITF reached a consensus on
Issue No. 00-21. 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
should be allocated among the separate units of accounting based
on their relative fair

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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)


values. The consensus also supersedes certain
guidance set forth in SAB 101, which was amended in
December 2003 by SAB 104. The final consensus is applicable
to agreements entered into in quarters beginning after
June 15, 2003. The Company adopted this new pronouncement
effective July 1, 2003 and is applying the provisions of
this statement on a prospective basis subsequent to that date.
The impact to the Companys financial position, results of
operations, and cash flows would not have been materially
different had the Company adopted this new pronouncement on
January 1, 2001. The impact to the Companys ongoing
results of operations and cash flows as a result of adopting
this statement is not material.

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 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 the financial
statements.

Certain of our 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 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 is not material.

In June 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations(SFAS 143). 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. This statement is effective for financial
statements for fiscal years beginning after June 15, 2002.
The Company adopted this new pronouncement effective
January 1, 2003.

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
our asset retirement obligations include the following: a 50%
probability that our network infrastructure 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,

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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)


and credit-adjusted risk-free rates that
approximate the Companys 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. Accordingly,
the Company did not record asset retirement obligations for
network infrastructure assets given the insignificance of the
Companys estimated liability and related accretion and
depreciation expense. The Company will continue to evaluate on a
quarterly basis whether the estimated asset retirement
obligations and related financial statement amounts continue to
be immaterial in relation to the Companys individual
financial statement line items or its consolidated financial
statements taken as a whole.

In December 2003, the FASB revised SFAS
No. 132, Employers Disclosures about Pensions and
Other Postretirement Benefits(SFAS 132). This
statement revised employers disclosure about pension plans
and other postretirement benefit plans. It requires additional
disclosures to those in the original SFAS 132 about the
plan assets, benefit obligations, cash flows and net periodic
benefit cost of defined benefit plans and other defined
postretirement plans. This statement is effective for financial
statements with fiscal years ending after December 15, 2003
and quarters beginning after December 15, 2003 (see
Note 15). The Company adopted the statement in 2003.

Comprehensive
Income

Comprehensive income for the Company approximates
net income for all periods presented. There are no significant
components of other comprehensive income.

Reclassifications

Certain amounts have been reclassified in the
2001 and 2002 consolidated financial statements to conform to
the current year presentation.

The income statement for all periods presented
has been reclassified to reflect billings to our customers for
the USF and other regulatory fees as Service
revenues and the related payments into the associated
regulatory funds as Cost of services expenses.
Operating income and net income for all prior periods have been
unaffected. The amounts reclassified for 2001, 2002 and 2003
were $160, $176 and $337, respectively.

2.     Contributions,
Acquisitions, Disposition and License Exchange



| |              
| | -------------
| | Contributions

In September and December of 2002, SBC and
BellSouth made cash capital contributions to the Company
totaling $499 for general corporate purposes.

In September 2001, SBC contributed its
controlling 50% equity interest in Cellular Communications of
Puerto Rico. In May 2001, an SBC affiliate contributed a
minority interest in a Washington/Baltimore cellular operation.
In March 2001, SBC contributed its interest in the operations
and assets of a Michigan wireless business and certain assets of
an SBC affiliate. The aggregate net book value of these
contributions totaled $831.

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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)


In December 2000, BellSouth exercised its option
to redeem the 55.6% limited partnership interest of AT&T
Wireless Services, Inc. (AT&T Wireless) in AB Cellular by
distributing to AT&T Wireless the Los Angeles area cellular
business. Following this transaction, BellSouth held the
remaining assets of the AB Cellular partnership, which included
100% of the Houston area cellular market, 87.35% of the
Galveston area cellular market and $1,163 in cash. In January
2001, BellSouth contributed the operations and assets of the AB
Cellular partnership to the Company; the aggregate net book
value of the contribution was $1,727. The majority of the cash
contributed was used to pay the Companys debt due to
affiliates in accordance with terms of the Contribution and
Formation Agreement. The results of operations of these
contributed entities are included in the consolidated statements
of income as of their respective contribution dates.

As stipulated by the Contribution and Formation
Agreement, amounts may be due to/from SBC or BellSouth to
the extent that the carrying amounts of the net assets as of the
contribution date are more/less than the agreed upon amount
at formation. In 2001, the Company paid a net amount of $186,
plus accrued interest from the date of contribution, to the
members under these provisions.

Acquisitions

On August 4, 2003, the Company executed an
agreement with NextWave Telecom, Inc. (NextWave) and certain of
its affiliates pursuant to which the Company would purchase FCC
licenses for wireless spectrum in 34 markets from NextWave
and its affiliates for $1,400 in cash. In September 2003, the
U.S. Bankruptcy Court for the Southern District of New York
approved the sale. The transaction is subject to various closing
conditions, some of which are outside of the parties
control. The transaction is expected to close in the first half
of 2004.

In April 2002, the Company and an affiliate of
SBC completed a transaction with T-Mobile USA, Inc. (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 will continue. 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.

In May 2001, the Company purchased from SBC for
$151 a 10% minority interest in the Washington/Baltimore
wireless business. Concurrent with this purchase, SBC also
contributed a minority interest in the Washington/Baltimore
operations held by an SBC affiliate. As a result of the purchase
and contribution of minority interests from SBC, the Company
holds a 100% interest in the Washington/Baltimore wireless
business.

The minority interest acquisition was accounted
for under the purchase method of accounting. Prior to the
adoption of SFAS 142 on January 1, 2002, the purchase
price in excess of the proportionate interest in the underlying
fair value of identifiable net assets acquired was amortized
using the straight-line method over a 20-year period. The
acquisition of the minority interest did not have a significant
impact on 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)


consolidated results of operations for 2001, nor
would it had it occurred on October 2, 2000, the original
contribution date.

In November 2001, the Company acquired two 15-MHz
licenses in the Salt Lake City and Provo Basic Trading Areas
(BTAs) in Utah for $140 in cash.

Disposition

In March 2001, the Company and ALLTEL
Corporation agreed to dissolve a wireless partnership and
distributed the related partnership assets. The Company
recognized the partnership assets received at fair value and a
related gain of $76, which is included in Other, net
in the consolidated statement of income.

License
Exchange

In May 2001, the Company and T-Mobile
exchanged licenses covering approximately 36 million
people, referred to as POPs, each. The Company
received licenses covering 10-MHz of spectrum for the New York
major trading area (MTA) and for each of the St. Louis
and Detroit BTAs. In exchange, the Company transferred to
T-Mobile licenses covering 10-MHz out of the 30-MHz of spectrum
that it owned in the Los Angeles and San Francisco MTAs, which
include most of California and Nevada. This transaction was
accounted for as a like-kind exchange at historical cost.

3.     Property,
Plant and Equipment

Property, plant and equipment is summarized as
follows:

|                                                |  |              |       |              |  |      |        |   |  |   |        |  
|----------------------------------------------- |  | ------------ | ----- | ------------ |  | ---- | ------ | - |  | - | ------ | -
|                                                |  |              |       |             
|                                                |  |              |       | December 31,
|                                                |  | Estimated    |       |             
|                                                |  | Useful Lives |       | 2002         |  | 2003
|                                                |  |              |       |              |  |     
|                                                |  | (In years)   |       |              |  |     
|Land                                            |  |              |      |              |  | $    | 60     |   |  | $ | 55     |  
|Buildings and building improvements             |  |              | 10-25 |              |  |      | 3,118  |   |  |   | 3,426  |  
|Operating and other equipment                   |  |              | 5-10  |              |  |      | 12,097 |   |  |   | 14,797 |  
|Furniture and fixtures                          |  |              | 3-10  |              |  |      | 1,595  |   |  |   | 1,395  |  
|Construction in progress                        |  |              |      |              |  |      | 1,175  |   |  |   | 364    |  
|                                                |  |              |       |              |  |      |        |   |  |   |        |  
|                                                |  |              |       |              |  |      | 18,045 |   |  |   | 20,037 |  
|Less: accumulated depreciation and amortization |  |              |       |              |  |      | (7,899 | ) |  |   | (9,098 | )
|                                                |  |              |       |              |  |      |        |   |  |   |        |  
|Property, plant and equipment, net              |  |              |       |              |  | $    | 10,146 |   |  | $ | 10,939 |  
|                                                |  |              |       |              |  |      |        |   |  |   |        |  

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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)


Depreciation expense and 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,
|                                      |  |                        
|                                      |  | 2001                    |       | 2002 |  | 2003
|                                      |  |                         |       |      |  |     
|Depreciation expense                  |  | $                       | 1,514 |      |  | $    | 1,662 |  |  | $ | 1,927 | 
|Capitalized interest costs            |  |                         | 13    |      |  |      | 19    |  |  |   | 15    | 
|Capitalized network engineering costs |  |                         | 87    |      |  |      | 127   |  |  |   | 103   | 

The net book value of assets recorded under
capital leases was $740 and $928 at December 31, 2002 and
2003, 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, 2001, 2002 and 2003 were $389, $121 and
$143, respectively.

The Companys cellular/PCS networks are
currently equipped with digital transmission technologies known
as Time Division Multiple Access (TDMA) technology and Global
System for Mobile Communication (GSM) technology. The Company is
currently in the process of overlaying GSM equipment throughout
its TDMA markets to provide a common voice standard. At the same
time, the Company is adding high-speed technologies for data
services known as General Packet Radio Service (GPRS) and
Enhanced Data Rates for GSM Evolution (EDGE). The GSM network
overlay is substantially complete with 93% of the Companys
POPs currently with cellular or PCS service having access to GSM
service at December 31, 2003. While the Company will
continue to sell and market TDMA services for the foreseeable
future, the amount of the future 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-capable equipment, as well as other competitive and
technological factors. The TDMA network assets were generally
depreciated over an eight-year period. 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 GSM technology. Useful lives were shortened
to fully depreciate all TDMA equipment by December 31,
2008. TDMA equipment acquired after January 1, 2003 will
have useful lives not to exceed six years. Depreciation expense
increased by $91 for the year ended December 31, 2003 as a
result of the change in estimate.

During 2002, the Company provided a $50 security
deposit to a contract engineering vendor that is being utilized
to construct 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
is included in Other assets in the consolidated
balance sheets.



|   |                  
|-- | -----------------
|4. | 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

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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)


only a fixed time, generally ten 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 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 is
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 intangible
assets during the fourth quarter of 2002 and 2003. These annual
impairment tests, prepared as of October 1, resulted in no
impairment of the Companys goodwill or indefinite-lived
FCC licenses.

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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)


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 which will no longer be amortized:

|                                               |                                       |              |  |                   |  |                   |   |          |       |              |   |      |      |   |   |       |       |  |   |      |        |  
|---------------------------------------------- | ------------------------------------- | ------------ |  | ----------------- |  | ----------------- | - | -------- | ----- | ------------ | - | ---- | ---- | - | - | ----- | ----- |  | - | ---- | ------ | -
|                                               |                                       |              |  |                   |  |                  
|                                               |                                       |              |  | December 31, 2002 |  | December 31, 2003
|                                               |                                       |              |  |                   |  |                  
|                                               |                                       |              |  | Gross             |  |                   |   | Gross    |       |             
|                                               |                                       |              |  | Carrying          |  | Accumulated       |   | Carrying |       | Accumulated 
|                                               |                                       | Useful Lives |  | Amount            |  | Amortization      |   | Amount   |       | Amortization
|                                               |                                       |              |  |                   |  |                   |   |          |       |             
|Intangible assets subject to amortization:     |                                       |              |  |                   |  |                   |   |          |       |              |   |      |      |   |   |       |       |  |   |     
|                                               | FCC licenses used in Mobitex business |              |  | 4 years           |  |                   | $ | 28       |       |              | $ |     |      |   | $ | 28    |       |  | $ | (7   | )     
|                                               | Customer lists                        |              |  | 5 years           |  |                   |   | 1,070    |       |              |   | (771 | )    |   |   | 1,070 |       |  |   | (920 | )     
|                                               | Other                                 |              |  | 3-5 years         |  |                   |   | 145      |       |              |   | (137 | )    |   |   | 147   |       |  |   | (143 | )     
|                                               |                                       |              |  |                   |  |                   |   |          |       |              |   |      |      |   |   |       |       |  |   |     
|                                               |                                       | Total        |  |                   |  |                   |   | $        | 1,243 |              |   | $    | (908 | ) |   | $     | 1,245 |  |   | $    | (1,070 | )
|                                               |                                       |              |  |                   |  |                   |   |          |       |              |   |      |      |   |   |       |       |  |   |     
|Intangible assets not subject to amortization: |                                       |              |  |                   |  |                   |   |          |       |              |   |      |      |   |   |       |       |  |   |     
|                                               | FCC licenses                          |              |  |                   |  |                   | $ | 7,359    |       |              | $ |     |      |   | $ | 7,748 |       |  | $ |     |       
|                                               |                                       |              |  |                   |  |                   |   |          |       |              |   |      |      |   |   |       |       |  |   |     
|                                               | Goodwill                              |              |  |                   |  |                   |   | 844      |       |              |   |     |      |   |   | 849   |       |  |   |     |       
|                                               |                                       |              |  |                   |  |                   |   |          |       |              |   |      |      |   |   |       |       |  |   |     

The weighted average estimated useful lives of
intangible assets subject to amortization was 4.8 years for
the year ended December 31, 2003, with remaining useful
lives of approximately one year.

There was no significant change in the carrying
value of goodwill for the year ended December 31, 2003.

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 | 
|Estimated amortization expense for the years
    ending: |      |  |   |    
|                                                         | 2004 |  |   | 115 | 
|                                                         | 2005 |  |   | 49  | 
|                                                         | 2006 |  |   | 11  | 

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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 following table presents the Companys
2001 results, which are presented on a basis comparable to the
2002 and 2003 results, adjusted to exclude amortization expense
related to goodwill and indefinite-lived FCC licenses.

|                         |                                 |                         |       |      |  |      |       |   |  |   |       |   | 
|------------------------ | ------------------------------- | ----------------------- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | - | 
|                         |                                 |                        
|                         |                                 | Year Ended December 31,
|                         |                                 |                        
|                         |                                 | 2001                    |       | 2002 |  | 2003
|                         |                                 |                         |       |      |  |     
|Net income  as reported |                                 | $                       | 1,692 |      |  | $    | 1,207 |   |  | $ | 1,022 |  
|                         | Add back: Goodwill amortization |                         |       | 28   |  |      |       |  |  |   |       |  | 
|                         | Add back: License amortization  |                         |       | 202  |  |      |       |  |  |   |       |  | 
|                         |                                 |                         |       |      |  |      |       |   |  |   |       |  
|Net income  as adjusted |                                 | $                       | 1,922 |      |  | $    | 1,207 |   |  | $ | 1,022 |  
|                         |                                 |                         |       |      |  |      |       |   |  |   |       |  

In addition to the SFAS 142 intangible
assets noted above, the Company recorded in 2003 $1 of
intangible assets in connection with the recognition of an
additional minimum liability for its Supplemental Retirement
Plans as required by SFAS No. 87, Employers
Accounting for Pensions (see Note 15).



|   |                                                     
|-- | ----------------------------------------------------
|5. | Investments in and Advances to Equity
    Affiliates

Prior to January 1, 2003, Salmon was
accounted for as an equity method investment. See Note 6
for a discussion of the consolidation of Salmon. The Company has
other investments in affiliates which do not meet the criteria
for consolidation under FIN 46, nor for which the Company
has a controlling interest. These investments are accounted for
under the equity method of accounting. The most significant of
these investments is GSM Facilities, LLC (GSMF), a
jointly-controlled infrastructure venture with T-Mobile for
networks in the New York City metropolitan area, California and
Nevada.

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

|                                               |  |              |       |      |  |   |       | 
|---------------------------------------------- |  | ------------ | ----- | ---- |  | - | ----- | 
|                                               |  |             
|                                               |  | December 31,
|                                               |  |             
|                                               |  | 2002         |       | 2003
|                                               |  |              |       |     
|Investment in GSMF                             |  | $            | 1,966 |      |  | $ | 2,253 | 
|Investment in Salmon                           |  |              | 236   |      |  |   |      | 
|Advances to Salmon, including accrued interest |  |              | 101   |      |  |   |      | 
|Other                                          |  |              | 13    |      |  |   | 35    | 
|                                               |  |              |       |      |  |   |       | 
|                                               |  | $            | 2,316 |      |  | $ | 2,288 | 
|                                               |  |              |       |      |  |   |       | 

GSMF

In November 2001, the Company and T-Mobile (the
parties) formed GSMF and contributed portions of their existing
network infrastructures in the California, Nevada and New York
City metropolitan area markets. Management control of GSMF is
vested in a four-member management committee, to which each
company has the right to appoint two members. GSMF is not a
variable interest entity as defined by FIN 46 nor does the
Company have the unilateral ability to control any actions of
GSMF. As a result, the Companys interest in GSMF is
accounted for as an equity investment. At formation, the Company
contributed network assets to GSMF with a carrying value of
$1,119, including capital lease obligations of

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Item 8.     Financial
Statements and Supplemental Data

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Dollars in Millions)


$167. Both companies buy network services from
GSMF but retain ownership and control of their own licenses in
those markets. The Company and T-Mobile independently market
their services to customers using their respective brand names
and utilizing 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.

GSMF may be dissolved by its parties under a
number of circumstances. Dissolution may occur at any time as a
result of the unanimous decision by its parties; automatically
upon the bankruptcy of one of its parties; 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
parties, at the election of the party that is involved in the
acquisition transaction.

In the event of dissolution prior to May 1,
2005, for reasons other than mutual agreement or judicial
decree, the party causing the dissolution event would be
required to pay the other party $250. Additionally, if
dissolution occurs prior to November 1, 2004, T-Mobile may
elect to exchange certain spectrum licenses, or in lieu of such
exchange, make a cash payment. If dissolution occurs after
November 1, 2004, T-Mobile is required to exchange certain
spectrum with Cingular.

In the event of dissolution after May 1,
2005, with the exception of dissolution upon mutual agreement,
the party responsible for the dissolution event would be
required to pay the other party $250. Under all dissolution
circumstances after November 1, 2004, parties will have
obligations to exchange certain spectrum licenses.

Additionally, in the event of dissolution, all
outstanding capital settlements owed to the GSMF by the parties
would require payment, the New York City market network assets
would be distributed to T-Mobile, and the California/Nevada
market network assets would be distributed to Cingular.
Following these distributions, a determination would be made of
each partys capital account deficit or surplus, and a
settlement would be made between the parties.

The Company and T-Mobile agreed to jointly fund
capital expenditures of GSMF. Pursuant to the operating
agreements, the Company and T-Mobile procure services and
network equipment on behalf of GSMF in the respective markets.
Network equipment is sold to GSMF at prices which are mutually
agreed upon by the parties and which approximate fair value. The
Company defers any resulting profits and records them as part of
the Companys investments in and advances to equity
affiliates. The Company recognizes 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 are 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 are accounted for as an increase to the
Companys investment. During 2002 and 2003, the Company
made net capital contributions to GSMF of $707 and $612,
respectively. The Company had contractual commitments to
contribute cash of $225 to GSMF in both 2002 and 2003. The
contribution amounts above include $225 of cash contributions
made by the Company in 2002 and 2003 in satisfaction of the
Companys contractual commitments.

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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 incurs and charges to GSMF certain
network operating costs. The monthly operating expenses of GSMF,
including monthly cash payments made on tower capital lease
obligations, are 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 charge each other
for usage that is not in the same proportion as the
spectrum-based allocations. This usage charge is 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,
|                                         |  |                        
|                                         |  | 2001                    |    | 2002 |  | 2003
|                                         |  |                         |    |      |  |     
|Network operating costs charged to GSMF  |  | $                       | 33 |      |  | $    | 225 |  |  | $ | 320 | 
|Network services received based on usage |  |                         | 36 |      |  |      | 216 |  |  |   | 254 | 

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

|                                  |  |              |     |      |  |   |     |  
|--------------------------------- |  | ------------ | --- | ---- |  | - | --- | -
|                                  |  |             
|                                  |  | December 31,
|                                  |  |             
|Due (to) from for:                |  | 2002         |     | 2003
|                                  |  |              |     |     
|Settlement of Capital Obligations |  | $            | 28  |      |  | $ | (17 | )
|Settlement of Operating Expenses  |  |              | (13 | )    |  |   | 20  |  

GSMF is expected to incur net losses due to
depreciation and interest expense, which are not reimbursed by
the Company or T-Mobile. For the years ended December 31,
2001, 2002 and 2003, the Company recorded equity in the net loss
of GSMF of $32, $241, and $325, respectively. At
December 31, 2003, the Companys economic interest in
GSMF approximated 70%.

At December 31, 2003, the Company remains
obligated with respect to $28 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 17).

Summarized financial information with respect to
GSMF is as follows:

|                          |  |              |       |      |  |   |       | 
|------------------------- |  | ------------ | ----- | ---- |  | - | ----- | 
|                          |  |             
|                          |  | December 31,
|                          |  |             
|Balance Sheet Information |  | 2002         |       | 2003
|                          |  |              |       |     
|Current assets            |  | $            | 122   |      |  | $ | 9     | 
|Noncurrent assets         |  |              | 2,955 |      |  |   | 3,588 | 
|Current liabilities       |  |              | 122   |      |  |   | 9     | 
|Noncurrent liabilities    |  |              | 222   |      |  |   | 247   | 
|Net equity                |  |              | 2,733 |      |  |   | 3,341 | 

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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)


|                                            |  |                         |     |      |  |      |      |   |  |   |      |  
|------------------------------------------- |  | ----------------------- | --- | ---- |  | ---- | ---- | - |  | - | ---- | -
|                                            |  |                        
|                                            |  | Year Ended December 31,
|                                            |  |                        
|Income Statement Informations               |  | 2001(a)                 |     | 2002 |  | 2003
|                                            |  |                         |     |      |  |     
|Revenues                                    |  | $                       | 50  |      |  | $    | 325  |   |  | $ | 451  |  
|Costs and expenses (excluding depreciation) |  |                         | 49  |      |  |      | 315  |   |  |   | 438  |  
|Depreciation expense                        |  |                         | 41  |      |  |      | 324  |   |  |   | 454  |  
|Operating loss                              |  |                         | (40 | )    |  |      | (314 | ) |  |   | (441 | )
|Interest expense                            |  |                         | 2   |      |  |      | 17   |   |  |   | 19   |  
|Net loss                                    |  |                         | (42 | )    |  |      | (331 | ) |  |   | (465 | )



---



|    |                                                                        
|--- | -----------------------------------------------------------------------
|(a) | Period from November 1, 2001 (inception)
    through December 31, 2001.

6.     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. Salmon was also the successful bidder for 34 other
licenses reclaimed from carriers in bankruptcy and auctioned by
the FCC. In December 2002, following protracted bankruptcy court
proceedings the FCC released Salmon from its purchase obligation
and returned Salmons remaining down payment on the
34 licenses. In January 2003, after a protracted legal
challenge by Nextwave, the U.S. Supreme Court invalidated the
auction results related to the challenged licenses. The
FCCs grant of the 45 unchallenged licenses was not
affected by this decision.

The Company made secured loans to Salmon to fund
the purchase of the 45 licenses. Net advances and loans
made for the years ended December 31, 2001 and 2002 were
$240 and $25, respectively. In 2002, the FCC refunded to Salmon
the auction deposits pertaining to the 34 challenged licenses
referred to in the preceding paragraph and Salmon used these
proceeds to repay $421 in principal and interest to the Company.
The Company recognized interest income on the loan balances of
$41 and $22 for the years ended December 31, 2001 and 2002,
respectively.

Crowley Digital has the right to put its
approximate 20% 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 fair value of this
put obligation, estimated at $126 and $139 as of
December 31, 2002 and 2003, respectively, is 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 voting interest in Salmon had historically been
accounted for as an equity method investment through
December 31, 2002. For the years ended

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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)


December 31, 2001 and 2002, the Company
recorded equity losses of $43 and $29, respectively, 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 the accompanying consolidated financial statements.
The Company did not restate any previously issued financial
statements. The following pro forma information presents the
financial position of the Company as if Salmon had been
consolidated, effective January 1, 2002.

|                                                 |  |              |        |               |  |              |      |   |  |   |        | 
|------------------------------------------------ |  | ------------ | ------ | ------------- |  | ------------ | ---- | - |  | - | ------ | 
|                                                 |  |              |        | Impact of     |  | Consolidated
|Balance Sheet Information as of                  |  | Cingular     |        | Salmon        |  | with        
|December 31, 2002                                |  | Wireless LLC |        | Consolidation |  | Salmon      
|                                                 |  |              |        |               |  |             
|Current assets                                   |  | $            | 2,731  |               |  | $            | 1    |   |  | $ | 2,732  | 
|FCC licenses, net                                |  |              | 7,387  |               |  |              | 358  |   |  |   | 7,745  | 
|Investments in and advances to equity affiliates |  |              | 2,316  |               |  |              | (337 | ) |  |   | 1,979  | 
|Other long-term assets                           |  |              | 11,688 |               |  |              | 13   |   |  |   | 11,701 | 
|Liabilities                                      |  |              | 16,014 |               |  |              | 1    |   |  |   | 16,015 | 
|Minority interests in consolidated entities      |  |              | 567    |               |  |              | 34   |   |  |   | 601    | 
|Members capital                                 |  |              | 7,541  |               |  |              |     |   |  |   | 7,541  | 

The income statement and cash flow impacts of the
Salmon consolidation for the year ended December 31, 2002
would not have been material.

7.     Accrued
Liabilities

Accrued liabilities are summarized as follows:

|                                      |  |              |       |      |  |   |       | 
|------------------------------------- |  | ------------ | ----- | ---- |  | - | ----- | 
|                                      |  |             
|                                      |  | December 31,
|                                      |  |             
|                                      |  | 2002         |       | 2003
|                                      |  |              |       |     
|Accrued fixed asset purchases         |  | $            | 443   |      |  | $ | 498   | 
|Taxes, other than income              |  |              | 231   |      |  |   | 355   | 
|Payroll and other related liabilities |  |              | 169   |      |  |   | 256   | 
|Agent commissions                     |  |              | 158   |      |  |   | 170   | 
|Advertising                           |  |              | 38    |      |  |   | 88    | 
|Other                                 |  |              | 169   |      |  |   | 229   | 
|                                      |  |              |       |      |  |   |       | 
|Total accrued liabilities             |  | $            | 1,208 |      |  | $ | 1,596 | 
|                                      |  |              |       |      |  |   |       | 

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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)


8.     Debt



| |                                                           
| | ----------------------------------------------------------
| | Commercial Paper Program and Revolving
    Credit Facility

At December 31, 2002 and 2003, the Company
had a commercial paper program and an unsecured 364-day
revolving bank credit facility of $1,500 and $1,000,
respectively, to support the commercial paper program. The
credit facility gives the Company the option to convert any
revolving loans outstanding on the maturity date to one-year
term loans. JPMorgan Chase Bank serves as administrative agent
for the facility. The bank credit facility contains customary
events of default and covenants, including a covenant to
maintain a specified leverage ratio (as defined), a limitation
on mergers and sale of all or substantially all of the
Companys assets and a negative pledge. The Company is in
compliance with all such ratios and covenants under the bank
credit facility. The credit agreement provides that each lender
will have the option to terminate its commitment to make
additional loans and declare all outstanding amounts to be due
and payable upon a change in control (as defined) of the Company
or upon the consummation of a merger or similar transaction
involving the Company or Cingular Wireless Corporation, the
Companys manager, with any of the five other largest
wireless carriers in the United States, determined based on the
number of customers of such carriers as of June 30, 2003.
The current credit facility expires November 15, 2004. At
December 31, 2002 and 2003, the Company had no outstanding
borrowings under the commercial paper program or the credit
facility.



| |                                          
| | -----------------------------------------
| | Accounts Receivable Secured
    Borrowing

In December 2003, the Company established an
accounts receivable secured borrowing program that it can use to
obtain financing not to exceed $400, collateralized by customer
trade accounts receivable and related contract rights. The
program is a 364-day financing arrangement that is renewable
with the consent of the facility lenders. Under the program,
designated Company entities can sell their customer trade
accounts receivable and related contract rights on a
non-recourse, revolving basis to the Companys
special-purpose, wholly owned, bankruptcy-remote subsidiary.
This subsidiary has pledged its interest in these receivables
to, and may borrow against these receivables from, asset-backed
commercial paper conduit lenders, whose obligations to issue
commercial paper and lend the proceeds to the subsidiary are
backed up by commitments from commercial banks. Loans will be
made to the subsidiary at varying interest rates based on the
ratings of the Companys senior notes. The Company intends
to use the proceeds from this financing arrangement for general
corporate purposes, including the acquisition of the spectrum
licenses from NextWave. This financing arrangement is subject to
customary securitization covenants, does not have a termination
provision that is based on the credit ratings of the
Companys senior unsecured long-term notes and will be
recorded as an on-balance sheet transaction. As of
December 31, 2003, the Company was in compliance with the
covenants and had no amounts outstanding under this financing
arrangement.

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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)




| |               
| | --------------
| | Long-Term Debt

Long-term debt is summarized as follows:

|                                                                    |                                                                                                                   |              |        |      |  |   |        |     | 
|------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ------------ | ------ | ---- |  | - | ------ | --- | 
|                                                                    |                                                                                                                   |             
|                                                                    |                                                                                                                   | December 31,
|                                                                    |                                                                                                                   |             
|                                                                    |                                                                                                                   | 2002         |        | 2003
|                                                                    |                                                                                                                   |              |        |     
|Due to affiliates                                                   |                                                                                                                   | $            | 9,678  |      |  | $ | 9,678  |    
|Due to external parties:                                            |                                                                                                                   |              |        |      |  |   |        |    
|                                                                    | 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 | 
|                                                                    | Capital leases, 6.0% to 9.6%                                                                                      |              |        | 778  |  |   |        | 908 | 
|                                                                    | Capital leases, Japanese Yen and U.S. Dollar
    denominated, 4.55%  7.08% in 2002 and
    4.86%  7.08% in 2003 |              |        | 83   |  |   |        | 47  | 
|                                                                    | Other                                                                                                             |              |        | 64   |  |   |        | 64  | 
|                                                                    |                                                                                                                   |              |        |      |  |   |        |    
|Total long-term debt, including discount and
    current maturities |                                                                                                                   |              | 12,603 |      |  |   | 12,697 |    
|Unamortized discount on Senior Notes                                |                                                                                                                   |              | (12    | )    |  |   | (11    | )  
|Debt maturing within one year                                       |                                                                                                                   |              | (45    | )    |  |   | (95    | )  
|Interest rate swap fair value adjustment (see
    Note 9)           |                                                                                                                   |              |       |      |  |   | 1      |    
|                                                                    |                                                                                                                   |              |        |      |  |   |        |    
|Total long-term debt                                                |                                                                                                                   | $            | 12,546 |      |  | $ | 12,592 |    
|                                                                    |                                                                                                                   |              |        |      |  |   |        |    



| |                       
| | ----------------------
| | Debt due to Affiliates

The debt due to affiliates represents the net
amount of debt due to SBC and BellSouth. Interest accrues and is
payable monthly. Interest expense on the affiliate loans for the
years ended December 31, 2001, 2002 and 2003 was $735, $726
and $653, 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 affiliate loans at
any time, subject to the provisions described below, or further
extend their maturity to the extent required in connection with
the credit facility, if approved by SBC and BellSouth.

SBC and BellSouth have agreed to subordinate
their repayment rights applicable to the affiliate loans to the
repayment rights of the Companys senior debt. Senior debt
includes the Companys Senior Notes, commercial paper, any
debt outstanding under its bank credit facility, as well as bank
notes and other borrowings from external parties designated as
such and to which SBC and BellSouth have specifically agreed to
be subordinate. The payment of principal and interest on the
subordinated affiliate 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. The
payment of principal and interest on the subordinated affiliate
loans is also prohibited, with limited exceptions, during a
covenant or other non-

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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)


payment default under the credit facility (unless
waived by the banks), but may continue during a non-payment
default on the Senior Notes or other senior debt.



| |             
| | ------------
| | Senior Notes

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 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 provides 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. There
is no sinking fund or mandatory redemption applicable to the
Senior Notes. The Senior Notes are redeemable, in whole or in
part, at any time at a price equal to their principal amount
plus any accrued interest and any make-whole
premium, which is designed to compensate the investors for early
payment of their investment. The premium is the excess of
(i) the present value of all future scheduled principal and
interest payments of the Senior Notes to be redeemed, calculated
by discounting the aggregate amount of such payments by a
percentage factor related to the yield to maturity on U.S.
Treasury securities equal to the then remaining maturity of the
Senior Notes being prepaid, over (ii) the principal amount
of the Notes to be redeemed.



| |               
| | --------------
| | Capital Leases

The Company has entered into capital leases
primarily for the use of communications towers. See Note 17
for further discussions regarding these towers.

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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)




| |                             
| | ----------------------------
| | Maturities of Long-Term Debt

Maturities of long-term debt outstanding,
including capital lease obligations, at December 31, 2003
are summarized below:

|                            |                                     |      |        |                |  |       |       |       |  |   |        |       | 
|--------------------------- | ----------------------------------- | ---- | ------ | -------------- |  | ----- | ----- | ----- |  | - | ------ | ----- | 
|                            |                                     | Debt |        | Capital Leases |  | Total
|                            |                                     |      |        |                |  |      
|Maturities:                 |                                     |      |        |                |  |       |       |       |  |   |        |      
|                            | 2004                                |      | $      | 51             |  |       | $     | 130   |  |   | $      | 181   | 
|                            | 2005                                |      |        | 3              |  |       |       | 91    |  |   |        | 94    | 
|                            | 2006                                |      |        | 503            |  |       |       | 89    |  |   |        | 592   | 
|                            | 2007                                |      |        | 3              |  |       |       | 91    |  |   |        | 94    | 
|                            | 2008                                |      |        | 9,681          |  |       |       | 94    |  |   |        | 9,775 | 
|                            | Thereafter                          |      |        | 1,501          |  |       |       | 2,335 |  |   |        | 3,836 | 
|                            |                                     |      |        |                |  |       |       |       |  |   |        |      
|Total minimum payments      |                                     |      | 11,742 |                |  |       | 2,830 |       |  |   | 14,572 |      
|                            | Less capital lease imputed interest |      |        |               |  |       |       | 1,444 |  |   |        | 1,444 | 
|                            | Less capital lease executory costs  |      |        |               |  |       |       | 431   |  |   |        | 431   | 
|                            |                                     |      |        |                |  |       |       |       |  |   |        |      
|Total obligations           |                                     | $    | 11,742 |                |  | $     | 955   |       |  | $ | 12,697 |      
|                            | Less current portion                |      |        | 51             |  |       |       | 44    |  |   |        | 95    | 
|                            |                                     |      |        |                |  |       |       |       |  |   |        |      
|Total long-term obligations |                                     | $    | 11,691 |                |  | $     | 911   |       |  | $ | 12,602 |      
|                            |                                     |      |        |                |  |       |       |       |  |   |        |      



| |                             
| | ----------------------------
| | Fair Value of Long-Term Debt

At December 31, 2002 and 2003, the fair
value of the Senior Notes was $2,121 and $2,156, respectively,
based on their quoted market prices. The carrying value of the
long-term debt due to affiliates approximates fair value since
the Company may prepay the debt at any time, without penalty.



| |                       
| | ----------------------
| | Cash Paid for Interest

Cash paid for interest on debt for the years
ended December 31, 2001, 2002 and 2003 was $883, $905 and
$862, respectively. These amounts include cash paid for interest
on debt due to affiliates of $805, $726 and $665 for the years
ended December 31, 2001, 2002 and 2003, respectively.

9.     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.

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 principal amount. The Company uses interest rate
swaps to manage its interest rate exposure on its debt
obligations. Under the terms of the interest rate swap
contracts, the Company

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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)


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 year ended December 31, 2003, the effective interest rate
associated with this notional amount was 4.02%.

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 defined in SFAS
No. 133, Accounting for Derivative Instruments and
Hedging Activities (SFAS 133). Hedge ineffectiveness,
as determined in accordance with SFAS 133, had no impact on
results of operations for the year ended December 31, 2003.

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
was recorded as an increase to Long-term debt, with the related
value for the interest rate swaps non-current portion
recorded in Other assets. 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. The Company does not invest in derivative
instruments for trading purposes.

The Company maintains foreign exchange-forward
contracts to hedge exposures to foreign exchange risk associated
with Japanese Yen-denominated capital lease obligations. The
contracts generally require the Company to exchange U.S. dollars
for Japanese Yen at maturity at rates agreed to at the inception
of the contracts. The contracts, which have an aggregate
notional amount of $110 and $62, respectively, at
December 31, 2002 and 2003, expire at various dates through
2005. The notional amount of the foreign exchange-forward
contracts equals the future minimum lease payments required to
be paid in Japanese Yen. The contracts are designated as cash
flow hedges in accordance with SFAS No. 138, Accounting
for Certain Derivative Instruments and Certain Hedging
Instruments. The fair values of the foreign exchange-forward
contracts were losses of $35 and $15 at December 31, 2002
and 2003, respectively, and are included in Accrued
liabilities and Other noncurrent liabilities
depending on the timing of the future contract payments. The
impact to other comprehensive income for all years presented was
not material.

The Company could be at risk if the
counterparties to the foreign exchange-forward contracts do not
contractually comply. Should the counterparties not comply, the
ultimate impacts will be a function of the difference, if any,
in the cost of acquiring Japanese Yen at maturity versus the
contractually agreed upon price.

10.     Concentrations
of Risk

The Company relies on local and long-distance
telephone companies and other companies to provide certain
communications services. Although management believes
alternative telecommunications facilities 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 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.

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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)


As discussed in Note 5, the Company has
entered into a network infrastructure venture with T-Mobile to
share infrastructure and save on the cost of building and
maintaining its own network. If the Company experiences
disagreements with T-Mobile, it could adversely affect the
Companys ability to serve customers in certain geographic
markets.

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 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 all years presented.

Approximately 22,000, or 56%, of the
Companys employees are represented by the Communications
Workers of America, with contracts expiring on various dates
between February 2004 and February 2007. Approximately
20% of the Companys employees are covered by contracts
that will expire within one year of December 31, 2003. 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.

11.     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.

On October 2, 2000, the Company entered into
a transition services agreement with BellSouth and SBC, pursuant
to which BellSouth and SBC each provided transition services and
products for a limited period of time. The services provided by
both BellSouth and SBC included government and regulatory
affairs, finance, compensation and benefit accounting, human
resources, internal audit, risk management, technical support,
marketing, research and development, procurement, real estate,
legal, security and tax. The fees were determined based upon the
costs of providing the expected level of services. As of
December 31, 2001, the Company had terminated most of these
arrangements and assumed the services internally. These charges
are primarily included in Selling, general and
administrative in the consolidated statements of income.

The Company also 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 United States. 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

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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)


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,
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. These
charges 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                    |  | 2001                    |     | 2002 |  | 2003
|                                   |  |                         |     |      |  |     
|Transition services                |  | $                       | 267 |      |  | $    | 17  |  |  | $ |    | 
|Agent commissions and compensation |  |                         | 33  |      |  |      | 46  |  |  |   | 103 | 
|Interconnect and long distance     |  |                         | 385 |      |  |      | 663 |  |  |   | 815 | 
|Other services                     |  |                         | 44  |      |  |      | 68  |  |  |   | 77  | 

The Company had receivables from affiliates of
$97 and $81 and payables to affiliates of $142 and $135 at
December 31, 2002 and 2003, respectively, primarily with
SBC and BellSouth (see Note 5).



|    |                                
|--- | -------------------------------
|12. | 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 continues 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, have 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 value 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.

The Companys cellular/PCS networks utilize
two digital transmission technologies, TDMA and GSM.
Additionally, the TDMA technologies are deployed over two
different spectrum frequencies, 850 MHz (cellular) and
1900 MHz (PCS). As discussed in Note 3, the Company is
currently in the process of adding GSM equipment throughout its
TDMA markets to provide a common voice standard and to add
technologies for high-speed data services. In the fourth quarter
of 2002, the Company finalized market

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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)


specific execution strategies concurrent with the
development and approval of the 2003 capital budget. In general,
the Company believes it has adequate spectrum depth in its 850
MHz markets to operate both technologies.

In several smaller PCS markets, where the Company
has only 10 MHz of available spectrum, it does not have
adequate spectrum depth to concurrently provide wireless
services using both technologies. In these markets the Company
must retire the TDMA network assets in order to deploy GSM
technology. The TDMA technology 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 United States. 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. Additionally, the Company
shortened the remaining useful lives of the assets in these
markets effective January 1, 2003.



|    |                     
|--- | --------------------
|13. | 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 No. 112,
Employers Accounting for Postemployment Benefits.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 were not expected to exceed
$70. As of June 30, 2003, substantially all activities
associated with this reorganization had been completed.
Reorganization costs for the years ended December 31, 2002
and 2003 were $41 and $21, respectively. A historical summary of

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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)


total expected costs to be incurred and the
amounts incurred during the six months ended June 30, 2003
and cumulative through June 30, 2003 is presented in the
table below.

|                            |                                      |                |    |                |   |                  |    |   |  |   |    |    |  
|--------------------------- | ------------------------------------ | -------------- | -- | -------------- | - | ---------------- | -- | - |  | - | -- | -- | -
|                            |                                      | Original       |    | Costs Incurred |   |                 
|                            |                                      | Estimate of    |    | During Six     |   | Cumulative Costs
|                            |                                      | Costs Expected |    | Months Ended   |   | Incurred through
|                            |                                      | to be Incurred |    | June 30, 2003  |   | June 30, 2003   
|                            |                                      |                |    |                |   |                 
|Termination Benefits:       |                                      |                |    |                |   |                  |    |   |  |   |    |   
|                            | Severance and related costs          |                | $  | 31             |   |                  | $  | 1 |  |   | $  | 30 |  
|                            | Outplacement                         |                |    | 1              |   |                  |    | 2 |  |   |    | 2  |  
|                            | OPEB curtailment gain                |                |    | (1             | ) |                  |    |  |  |   |    | (1 | )
|Contract Termination Costs: |                                      |                |    |                |   |                  |    |   |  |   |    |   
|                            | Lease terminations                   |                |    | 14             |   |                  |    | 9 |  |   |    | 13 |  
|                            | Write-offs of leasehold improvements |                |    | 11             |   |                  |    | 5 |  |   |    | 9  |  
|Other Associated Costs:     |                                      |                |    |                |   |                  |    |   |  |   |    |   
|                            | Relocation and other                 |                |    | 14             |   |                  |    | 4 |  |   |    | 9  |  
|                            |                                      |                |    |                |   |                  |    |   |  |   |    |   
|Total                       |                                      | $              | 70 |                |   | $                | 21 |   |  | $ | 62 |   
|                            |                                      |                |    |                |   |                  |    |   |  |   |    |   

Costs incurred in 2002 and 2003 in connection
with this reorganization plan are principally reflected in
Selling, general and administrative expenses in the
consolidated statements of income.

At December 31, 2003, $9 remains unpaid and
is recorded in current liabilities in the consolidated balance
sheet.

14.     Income
Taxes

Substantially all of the operating units
controlled and consolidated by the Company are either
partnerships or limited liability entities that are disregarded
entities or taxed as partnerships under federal and state income
tax laws. Therefore, income tax items flow through to the
members or partners. However, the Company has corporate
subsidiaries and LLC subsidiaries that are income taxpayers in
some jurisdictions and will record income tax expense. Income
tax expense for the years ended December 31, 2001, 2002,
and 2003 was $8, $12 and $28, respectively.

The Company is required to make periodic
distributions to its members on a pro rata basis in accordance
with each members ownership interests in amounts
sufficient to permit members to pay the tax liabilities
resulting from allocations of income tax items from the Company
(see Note 2).

At December 31, 2002 and 2003, the reported
amounts of the Companys net assets exceeded their tax
bases by approximately $10,100 and $12,400, respectively. This
basis differential is principally attributable to the tax rules
used to determine depreciation and amortization of property,
plant and equipment and intangible assets.

At December 31, 2002 and 2003, deferred tax
liabilities of $180 and $190 are included in Other
noncurrent liabilities in the consolidated balance sheets.
Of these amounts, $169 and $177 are attributable

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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)


to the Puerto Rico wireless operations. These
Puerto Rico deferred tax liabilities principally relate to book
and tax basis differences on intangible assets.



|    |                  
|--- | -----------------
|15. | Employee Benefits

In conjunction with the contribution of their
U.S. wireless assets and operations to the Company, SBC and
BellSouth transferred their respective wireless employees and
related obligations and liabilities to one or more of their
wholly-owned subsidiaries, which were leasing companies. Under
employee leasing agreements, the leasing companies agreed to
lease all of their employees and any employees hired after
October 2, 2000 to the Company until the leasing companies
were contributed to the Company. During this period, the
employees were solely employed by the leasing companies and
participated in their respective member company employee benefit
plans. The leasing companies assumed from each of BellSouth and
SBC and their respective affiliates certain employment-related
obligations and liabilities relating to the member
companies compensation and benefit plans prior to their
contribution. For the year ended December 31, 2001, prior
to their contribution to the Company, the leasing companies
billed the Company $1,452 for payroll costs including payroll
taxes, benefits and relocation costs. In October and December
2001, the leasing companies were contributed to the Company.



| |                                          
| | -----------------------------------------
| | Pensions and Post-Retirement
    Benefits

Substantially all 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
leasing companies to the Company. In connection with this
contribution of the leasing companies to the Company, SBC and
BellSouth transferred pension assets from the qualified trusts
to the trusts established for the Companys 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 most 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.

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.

In January 2004, the FASB issued preliminary
guidance (FSP FAS 106-1) on how employers should
account for provisions of the recently enacted Medicare Act. The
Medicare Act allows employers who

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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)


sponsor a post-retirement health care plan that
provides a prescription drug benefit to receive a subsidy for
the cost of providing that drug benefit. The Company elected to
defer recognizing the effects of the Medicare Act in accounting
for its post-retirement benefit plans, therefore, the net
periodic post-retirement benefit cost and accumulated
post-retirement benefit obligation in the financial statements
and accompanying notes do not reflect the effects of the
Medicare Act. Specific authoritative guidance on the accounting
for the federal subsidy is pending and that guidance, when
issued, could require the Company to change previously reported
information.



| |                              
| | -----------------------------
| | 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, 2002 and 2003 are as follows:

|                                        |  |              |     |                 |  |      |     |      |  |   |    |   |  |   |     |  
|--------------------------------------- |  | ------------ | --- | --------------- |  | ---- | --- | ---- |  | - | -- | - |  | - | --- | -
|                                        |  |              |     |                
|                                        |  | Pension      |     | Post-Retirement
|                                        |  | December 31, |     | December 31,   
|                                        |  |              |     |                
|                                        |  | 2002         |     | 2003            |  | 2002 |     | 2003
|                                        |  |              |     |                 |  |      |     |     
|Change in Benefit Obligation            |  |              |     |                 |  |      |     |      |  |   |    |   |  |   |     |  
|Benefit obligation at beginning of year |  | $            | 345 |                 |  | $    | 413 |      |  | $ | 65 |   |  | $ | 84  |  
|Service cost                            |  |              | 62  |                 |  |      | 61  |      |  |   | 6  |   |  |   | 9   |  
|Interest cost                           |  |              | 24  |                 |  |      | 24  |      |  |   | 4  |   |  |   | 6   |  
|Amendments                              |  |              | 1   |                 |  |      | (1  | )    |  |   |   |   |  |   | (2  | )
|Actuarial loss                          |  |              | 1   |                 |  |      | 18  |      |  |   | 10 |   |  |   | 17  |  
|Curtailments                            |  |              |    |                 |  |      |    |      |  |   | (1 | ) |  |   |    |  
|Benefits paid                           |  |              | (20 | )               |  |      | (59 | )    |  |   |   |   |  |   |    |  
|                                        |  |              |     |                 |  |      |     |      |  |   |    |   |  |   |     |  
|Benefit obligation at end of year       |  | $            | 413 |                 |  | $    | 456 |      |  | $ | 84 |   |  | $ | 114 |  
|                                        |  |              |     |                 |  |      |     |      |  |   |    |   |  |   |     |  

|                                               |  |              |     |                 |  |      |     |      |  |   |   |  |  |   |   | 
|---------------------------------------------- |  | ------------ | --- | --------------- |  | ---- | --- | ---- |  | - | - |  |  | - | - | 
|                                               |  |              |     |                
|                                               |  | Pension      |     | Post-Retirement
|                                               |  | December 31, |     | December 31,   
|                                               |  |              |     |                
|                                               |  | 2002         |     | 2003            |  | 2002 |     | 2003
|                                               |  |              |     |                 |  |      |     |     
|Change in Plan Assets                          |  |              |     |                 |  |      |     |      |  |   |   |  |  |   |   | 
|Fair value of plan assets at beginning of year |  | $            | 508 |                 |  | $    | 450 |      |  | $ |  |  |  | $ |  | 
|Plan assets due from members                   |  |              | 6   |                 |  |      |    |      |  |   |  |  |  |   |  | 
|Actual return on plan assets                   |  |              | (44 | )               |  |      | 103 |      |  |   |  |  |  |   |  | 
|Employer contribution                          |  |              |    |                 |  |      | 16  |      |  |   |  |  |  |   |  | 
|Benefits paid                                  |  |              | (20 | )               |  |      | (59 | )    |  |   |  |  |  |   |  | 
|                                               |  |              |     |                 |  |      |     |      |  |   |   |  |  |   |   | 
|Fair value of plan assets at end of year       |  | $            | 450 |                 |  | $    | 510 |      |  | $ |  |  |  | $ |  | 
|                                               |  |              |     |                 |  |      |     |      |  |   |   |  |  |   |   | 

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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)


|                                                                        |  |              |     |                 |  |      |    |      |  |   |     |   |  |   |      |  
|----------------------------------------------------------------------- |  | ------------ | --- | --------------- |  | ---- | -- | ---- |  | - | --- | - |  | - | ---- | -
|                                                                        |  |              |     |                
|                                                                        |  | Pension      |     | Post-Retirement
|                                                                        |  | December 31, |     | December 31,   
|                                                                        |  |              |     |                
|                                                                        |  | 2002         |     | 2003            |  | 2002 |    | 2003
|                                                                        |  |              |     |                 |  |      |    |     
|Funded status                                                           |  | $            | 37  |                 |  | $    | 54 |      |  | $ | (84 | ) |  | $ | (114 | )
|Unrecognized transition asset                                           |  |              |    |                 |  |      |   |      |  |   | 1   |   |  |   |     |  
|Unrecognized prior service cost                                         |  |              | 20  |                 |  |      | 15 |      |  |   | 9   |   |  |   | 6    |  
|Unrecognized net actuarial loss                                         |  |              | 51  |                 |  |      | 3  |      |  |   | 14  |   |  |   | 31   |  
|                                                                        |  |              |     |                 |  |      |    |      |  |   |     |   |  |   |      |  
|Prepaid pension cost and accrued post-retirement
    benefit obligation |  | $            | 108 |                 |  | $    | 72 |      |  | $ | (60 | ) |  | $ | (77  | )
|                                                                        |  |              |     |                 |  |      |    |      |  |   |     |   |  |   |      |  

The accumulated benefit obligation for the
pension plans was $391 and $435 at December 31, 2002 and
2003, respectively.



| |                                            
| | -------------------------------------------
| | Components of Net Periodic Pension
    Cost

Net pension expense and post-retirement benefit
expense recognized subsequent to the contribution of the leasing
companies is composed of the following:

|                                             |  |         |   |                 |  |      |     |      |  |      |     |      |  |   |   |  |  |   |    |   |  |   |    | 
|-------------------------------------------- |  | ------- | - | --------------- |  | ---- | --- | ---- |  | ---- | --- | ---- |  | - | - |  |  | - | -- | - |  | - | -- | 
|                                             |  |         |   |                
|                                             |  | Pension |   | Post-Retirement
|                                             |  |         |   |                
|                                             |  | 2001    |   | 2002            |  | 2003 |     | 2001 |  | 2002 |     | 2003
|                                             |  |         |   |                 |  |      |     |      |  |      |     |     
|Service cost                                 |  | $       | 3 |                 |  | $    | 62  |      |  | $    | 61  |      |  | $ | 1 |  |  | $ | 6  |   |  | $ | 9  | 
|Interest cost                                |  |         | 2 |                 |  |      | 24  |      |  |      | 24  |      |  |   |  |  |  |   | 4  |   |  |   | 6  | 
|Expected return on plan assets               |  |         |  |                 |  |      | (27 | )    |  |      | (36 | )    |  |   |  |  |  |   |   |   |  |   |   | 
|Amortization of prior service cost           |  |         |  |                 |  |      | 3   |      |  |      | 3   |      |  |   |  |  |  |   | 2  |   |  |   | 1  | 
|Recognized actuarial gain                    |  |         |  |                 |  |      |    |      |  |      |    |      |  |   |  |  |  |   |   |   |  |   | 1  | 
|                                             |  |         |   |                 |  |      |     |      |  |      |     |      |  |   |   |  |  |   |    |   |  |   |    | 
|Net expense                                  |  | $       | 5 |                 |  | $    | 62  |      |  | $    | 52  |      |  | $ | 1 |  |  | $ | 12 |   |  | $ | 17 | 
|                                             |  |         |   |                 |  |      |     |      |  |      |     |      |  |   |   |  |  |   |    |   |  |   |    | 
|Curtailment and termination benefits         |  |         |   |                 |  |      |     |      |  |      |     |      |  |   |   |  |  |   | (1 | ) |  |   |   | 
|                                             |  |         |   |                 |  |      |     |      |  |      |     |      |  |   |   |  |  |   |    |   |  |   |    | 
|Adjusted net post-retirement benefit expense |  |         |   |                 |  |      |     |      |  |      |     |      |  |   |   |  |  | $ | 11 |   |  | $ | 17 | 
|                                             |  |         |   |                 |  |      |     |      |  |      |     |      |  |   |   |  |  |   |    |   |  |   |    | 



| |            
| | -----------
| | Assumptions

Significant weighted-average assumptions used in
developing pension and post-retirement benefit obligations at
December 31 include:

|                                        |  |         |      |            |  |      |      |      |  |  |      |   |  |  |      |  
|--------------------------------------- |  | ------- | ---- | ---------- |  | ---- | ---- | ---- |  |  | ---- | - |  |  | ---- | -
|                                        |  |         |      |            |  |     
|                                        |  |         |      | Post-     
|                                        |  | Pension |      | Retirement
|                                        |  |         |      |           
|                                        |  | 2002    |      | 2003       |  | 2002 |      | 2003
|                                        |  |         |      |            |  |      |      |     
|Discount rate                           |  |         | 6.75 | %          |  |      | 6.25 | %    |  |  | 6.75 | % |  |  | 6.25 | %
|Composite rate of compensation increase |  |         | 7.00 | %          |  |      | 6.00 | %    |  |  | 7.00 | % |  |  | 6.00 | %

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)


Significant weighted-average assumptions used to
determine net periodic pension and post-retirement cost for the
years ended December 31 include:

|                                         |  |         |      |                 |  |      |      |      |  |      |      |      |  |  |      |   |  |  |      |   |  |  |      |  
|---------------------------------------- |  | ------- | ---- | --------------- |  | ---- | ---- | ---- |  | ---- | ---- | ---- |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                         |  |         |      |                
|                                         |  | Pension |      | Post-Retirement
|                                         |  |         |      |                
|                                         |  | 2001    |      | 2002            |  | 2003 |      | 2001 |  | 2002 |      | 2003
|                                         |  |         |      |                 |  |      |      |      |  |      |      |     
|Discount rate                            |  |         | 7.75 | %               |  |      | 7.25 | %    |  |      | 6.75 | %    |  |  | 7.75 | % |  |  | 7.25 | % |  |  | 6.75 | %
|Expected long-term return on plan assets |  |         | 8.50 | %               |  |      | 8.50 | %    |  |      | 8.50 | %    |  |  |     |   |  |  |     |   |  |  |     |  
|Composite rate of compensation increase  |  |         | 7.00 | %               |  |      | 7.00 | %    |  |      | 6.00 | %    |  |  | 7.00 | % |  |  | 7.00 | % |  |  | 6.00 | %

The expected long-term rate of return on assets
was derived using data from investment managers and actuaries
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 that include, but are not limited to
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.

Assumed health care cost trend rates at
December 31 are as follows:

|                                                                                      |  |         |       |          |  |         |       |          |  |  |       |   |  |  |       |  
|------------------------------------------------------------------------------------- |  | ------- | ----- | -------- |  | ------- | ----- | -------- |  |  | ----- | - |  |  | ----- | -
|                                                                                      |  |         |       |         
|                                                                                      |  | 2002    |       | 2003    
|                                                                                      |  |         |       |         
|                                                                                      |  | 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 | %        |  |  | 10.00 | % |  |  | 11.00 | %
|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                                         |  |         | 2010  |          |  |         | 2010  |          |  |  | 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 |  | $               | 3  |                 |  | $ | (2  | )
|Effect on post-retirement benefit obligation                |  |                 | 21 |                 |  |   | (16 | )

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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)




| |            
| | -----------
| | Plan Assets

The Companys pension plans asset
allocations at December 31, by asset category are as
follows:

|               |                   |                |  |      |     |   |  |    |     |  
|-------------- | ----------------- | -------------- |  | ---- | --- | - |  | -- | --- | -
|               |                   |               
|               |                   | Plan Assets at
|               |                   | December 31,  
|               |                   |               
|               |                   | 2002           |  | 2003
|               |                   |                |  |     
|Asset Category |                   |                |  |      |     |   |  |   
|               | Equity securities |                |  | 55   | %   |   |  | 66 | %  
|               | Debt securities   |                |  | 30   |     |   |  | 28 |    
|               | Cash              |                |  | 15   |     |   |  | 1  |    
|               | Other             |                |  |     |     |   |  | 5  |    
|               |                   |                |  |      |     |   |  |   
|               |                   | 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 agreement and derivatives
are allowed if in compliance with 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.



| |              
| | -------------
| | Contributions

The Company does not expect to make any
contributions to its pension plans and its post-retirement
benefit plans in 2004.



| |                           
| | --------------------------
| | Defined Contribution Plans

The Company maintains several contributory
savings plans that cover substantially all employees. Effective
December 31, 2002, the plan covering bargained employees
was merged into the plan covering nonbargained employees.
Participation in the plans commenced November 1, 2001,
following the contribution of leasing companies to the Company.
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 and $46 in
2003.



| |                              
| | -----------------------------
| | Supplemental Retirement Plans

The Company has also assumed the liabilities
related to nonqualified, unfunded supplemental retirement plans
for senior executives previously employed by SBC affiliates.
Expenses related to these plans were less

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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)


than $2 in all years presented. Liabilities of $7
and $8 related to these plans, which include an additional
minimum pension liability of $2, have been included in
Other noncurrent liabilities in the consolidated
balance sheets at December 31, 2002 and 2003, respectively.
The consolidated balance sheet also includes $1 in Other
intangible assets, net at December 31, 2003 related
to these plans.



| |                           
| | --------------------------
| | Deferred Compensation Plan

The Company also 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 portion of liabilities related to this plan of $18 and
$22 has been included in Other noncurrent
liabilities in the consolidated balance sheets at
December 31, 2002 and 2003, respectively.



| |                            
| | ---------------------------
| | Long-Term Compensation Plan

The Cingular Wireless Long-Term Compensation Plan
(the Plan), as amended in the first quarter of 2003, provides
for grants of both performance units and stock appreciation
units to eligible participants. Such grants are ultimately
settled in cash. Performance units are tied to the achievement
of specified financial objectives related to revenue growth and
return on capital. The number of performance units granted under
the plan total approximately 1.2 million units in 2002 and
540,000 units in 2003, with units having a stated value of $50
(whole dollars). As of December 31, 2003, the Company has
approximately 1.5 million outstanding units. Performance
units granted at inception of the 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. 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
amended plan, which approximate 3.3 million in total, are
linked to the respective stock price performance of BellSouth
and SBC. As of December 31, 2003, the Company has
approximately 3.3 million outstanding units. 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. Such
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. The stock appreciation units expire
10 years from the grant date. Compensation cost is
recognized over the vesting period based upon increase in the
fair value of the stock appreciation units at the end of each
reporting period.

For the years ended December 31, 2002 and
2003, the Company recognized compensation expense of $20 and
$14, respectively, associated with the Plan.

108



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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)


16.     Commitments
and Contingencies



| |       
| | ------
| | Leases

The Company has entered into significant capital
leases primarily for the use of communications towers (see
Note 17). Capital lease obligations are included in
Note 8.

The Company has also entered into operating
leases for facilities and equipment used in operations. These
leases typically include renewal options and escalation clauses.
Rental expense under operating leases for the years ended
December 31, 2001, 2002 and 2003 was $370, $430 and $477,
respectively.

The following table summarizes the approximate
future minimum rentals under noncancelable operating leases in
effect at December 31, 2003:

|           |  |   |       | 
|---------- |  | - | ----- | 
|2004       |  | $ | 431   | 
|2005       |  |   | 386   | 
|2006       |  |   | 325   | 
|2007       |  |   | 257   | 
|2008       |  |   | 202   | 
|Thereafter |  |   | 762   | 
|           |  |   |       | 
|Total      |  | $ | 2,363 | 
|           |  |   |       | 



| |            
| | -----------
| | Commitments

The Company has unconditional purchase
commitments for advertising and marketing, computer equipment
and services, roaming, network equipment and related
maintenance, and software development and related maintenance.
These commitments totaled approximately $628 at
December 31, 2003.



| |       
| | ------
| | Claims

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. 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 results of operations, financial position or
cash flows.

17.     Communications
Towers

In June 1999, BellSouth subsidiaries leased to
Crown Castle International (Crown) all unused space on 2,623 of
their communications towers in exchange for $927 to be paid in a
combination of cash and Crown common stock. All cash proceeds
and the majority of stock proceeds resulting from this agreement
were retained by BellSouth. The subsidiaries were contributed to
the Company on October 2, 2000.

Under these transactions, Crown manages and
maintains the towers. The Company (as lessor) 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
has retained, outside of the leases, a portion of the towers for
use in

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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)


operating its wireless network and continues to
own the towers and related communications components including
switching equipment, shelters and communications facilities.
During 2001, 2002 and 2003, the Company paid $37, $51 and $36,
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.

In August 2000, Southwestern Bell Mobile Systems,
Inc., which was 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 May and
September 2002, the Company terminated its BTS agreements with
SpectraSite and Crown, respectively. Under the BTS agreement,
thirty-four 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, Inc. (SpectraSite) for
$81 in cash. SpectraSite had previously acquired these leasehold
interests from an affiliate of SBC in 2000, and the Company had
leased a portion of the tower space indirectly from SpectraSite.
The portion leased by the Company was accounted for as a capital
lease and used in its GSMF venture. Subsequent to February 2003,
the GSMF venture leases a portion of the space on these towers
directly from a subsidiary of the Company. As a result of the
transaction, lease rentals related to GSMFs capital lease
obligations of $197 are no longer owed to SBC or Spectrasite and
the amounts received from GSMF are retained by the Company.

In 2001, 2002 and 2003, the Company transferred
to the SBC affiliate 1,461, 33 and 94 towers, respectively,
having an aggregate net book value of $114. As of
December 31, 2003, 226 towers remain to be transferred by
the Company to the SBC affiliate. These transfers will occur
during 2004 upon the completion of legal requirements, including
receiving consents from certain limited partners. For towers not
yet transferred to the SBC affiliate, the Company pays monthly
monitoring and maintenance fees to the SBC affiliate. During
2001, 2002 and 2003, the Company paid $9, $8 and $11,
respectively, related to these fees.

18.     Subsequent
Event

On February 17, 2004, the Company entered
into an Agreement and Plan of Merger to acquire AT&T
Wireless for an aggregate consideration of approximately
$41,000. The closing of the acquisition is

110



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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)




| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | expected to occur in late 2004 and is subject to
    the affirmative vote of AT&T Wireless shareholders,
    FCC, Hart Scott Rodino and other regulatory approvals and other
    customary closing conditions. SBC and BellSouth have committed
    to provide funding for the purchase. Proportionate equity
    ownership and management control of Cingular will remain
    unchanged after the acquisition. The form and terms of any
    funding have yet to be determined. This transaction will be
    accounted for as a purchase in accordance with SFAS
    No. 141, Business Combinations.



|    |                                                  
|--- | -------------------------------------------------
|19. | Selected Quarterly Financial Data
    (Unaudited)

The table below sets forth summarized quarterly
financial data for the years ended December 31, 2002 and
2003.

|                                                                                        |  |         |       |         |  |         |       |         |  |   |       |     |  |   |       |       
|--------------------------------------------------------------------------------------- |  | ------- | ----- | ------- |  | ------- | ----- | ------- |  | - | ----- | --- |  | - | ----- | ------
|                                                                                        |  | First   |       | Second  |  | Third   |       | Fourth 
|2002                                                                                    |  | Quarter |       | Quarter |  | Quarter |       | Quarter
|                                                                                        |  |         |       |         |  |         |       |        
|Total operating revenues(a)                                                             |  | $       | 3,587 |         |  | $       | 3,791 |         |  | $ | 3,821 |     |  | $ | 3,704 |       
|Operating income                                                                        |  |         | 667   |         |  |         | 722   |         |  |   | 616   | (b) |  |   | 516   | (c)(d)
|Income before provision for income taxes and
    cumulative effect of accounting change |  |         | 372   |         |  |         | 399   |         |  |   | 296   |     |  |   | 184   |       
|Net income                                                                              |  |         | 338   |         |  |         | 395   |         |  |   | 293   |     |  |   | 181   |       

|                                                                                        |  |         |       |         |  |         |       |         |  |   |       |     |  |   |       |    
|--------------------------------------------------------------------------------------- |  | ------- | ----- | ------- |  | ------- | ----- | ------- |  | - | ----- | --- |  | - | ----- | ---
|                                                                                        |  | First   |       | Second  |  | Third   |       | Fourth 
|2003                                                                                    |  | Quarter |       | Quarter |  | Quarter |       | Quarter
|                                                                                        |  |         |       |         |  |         |       |        
|Total operating revenues(a)                                                             |  | $       | 3,638 |         |  | $       | 3,874 |         |  | $ | 4,059 |     |  | $ | 3,912 |    
|Operating income                                                                        |  |         | 716   | (e)     |  |         | 756   |         |  |   | 488   |     |  |   | 329   |    
|Income before provision for income taxes and
    cumulative effect of accounting change |  |         | 421   |         |  |         | 422   |         |  |   | 183   |     |  |   | 24    |    
|Net income                                                                              |  |         | 419   |         |  |         | 410   |         |  |   | 177   | (f) |  |   | 16    | (f)



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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, third and fourth quarters of 2002 were $44, $43,
    $42 and $47, respectively. The amounts reclassified for the
    first, second and third quarters of 2003 were $48, $88 and $105,
    respectively (see Note 1).                                                                                                                                                                                                                
|   
|(b) |  | Includes a reduction of $32 due to reorganization
    costs (see Note 13).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(c) |  | Includes a reduction of $151 due to non-cash
    impairment losses (see Note 12).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(d) |  | Includes a reduction of $9 due to reorganization
    costs (see Note 13).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(e) |  | Includes a reduction of $24 due to reorganization
    costs (see Note 13).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(f) |  | Net income in the third and fourth quarters of
    2003 was impacted by increased customer acquisition costs
    associated with the highest two quarters of gross customer
    additions since the inception of Cingular. Additionally, other
    cost increases impacting results included higher customer
    retention costs in preparation for wireless local number
    portability in the later part of 2003. Service 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.

111



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item 8.     Financial
Statements and Supplemental Data

REPORT OF INDEPENDENT AUDITORS

Members

GSM Facilities, LLC


We have audited the accompanying consolidated
balance sheet of GSM Facilities, LLC as of December 31,
2003, and the related consolidated statements of operations,
changes in members capital, and cash flows for the year
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 audit. 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 as of
December 31, 2003 and total revenues of $125.5 million
for the year 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 audit 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
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 audit and
the report of other auditors provide a reasonable basis for our
opinion.

In our opinion, based on our audit 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 the consolidated results of its operations and its
cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States.



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

Atlanta, Georgia

February 6, 2004, except for


Note 7, as to which


the date is February 17, 2004


112



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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item 8.     Financial
Statements and Supplemental Data

REPORT OF INDEPENDENT AUDITORS

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

In our opinion, the accompanying balance sheet
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, 2003, and the results of its operations and
its cash flows for the year ended December 31, 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 auditing standards generally
accepted in the United States of America, which 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.



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

Seattle, Washington

February 6, 2004


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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item 8.     Financial
Statements and Supplemental Data

GSM FACILITIES, LLC

CONSOLIDATED STATEMENTS OF
OPERATIONS

|                         |                               |                       |     |              |  |      |      |     |  |   |      |     | 
|------------------------ | ----------------------------- | --------------------- | --- | ------------ |  | ---- | ---- | --- |  | - | ---- | --- | 
|                         |                               |                       |     |             
|                         |                               | Period From           |     | Year Ended  
|                         |                               | November 1, 2001      |     | December 31,
|                         |                               | (Inception) through   |     |             
|                         |                               | December 31, 2001     |     | 2002         |  | 2003
|                         |                               |                       |     |              |  |     
|                         |                               | (Unaudited)           |     | (Unaudited)  |  |     
|                         |                               |                      
|                         |                               | (Dollars in millions)
|Revenues:                |                               |                       |     |              |  |      |      |     |  |   |      |    
|                         | Network service revenues      |                       | $   | 49           |  |      | $    | 310 |  |   | $    | 439 | 
|                         | Other revenues                |                       |     | 1            |  |      |      | 15  |  |   |      | 12  | 
|                         |                               |                       |     |              |  |      |      |     |  |   |      |    
|Total revenues           |                               |                       | 50  |              |  |      | 325  |     |  |   | 451  |    
|Operating expenses:      |                               |                       |     |              |  |      |      |     |  |   |      |    
|                         | Network services              |                       |     | 33           |  |      |      | 194 |  |   |      | 271 | 
|                         | Interconnection               |                       |     | 16           |  |      |      | 121 |  |   |      | 167 | 
|                         | Depreciation and amortization |                       |     | 41           |  |      |      | 324 |  |   |      | 454 | 
|                         |                               |                       |     |              |  |      |      |     |  |   |      |    
|Total operating expenses |                               |                       | 90  |              |  |      | 639  |     |  |   | 892  |    
|                         |                               |                       |     |              |  |      |      |     |  |   |      |    
|Operating loss           |                               |                       | (40 | )            |  |      | (314 | )   |  |   | (441 | )  
|Interest expense         |                               |                       | (2  | )            |  |      | (17  | )   |  |   | (19  | )  
|Other expense            |                               |                       |    |              |  |      |     |     |  |   | (5   | )  
|                         |                               |                       |     |              |  |      |      |     |  |   |      |    
|Total other expenses     |                               |                       | (2  | )            |  |      | (17  | )   |  |   | (24  | )  
|                         |                               |                       |     |              |  |      |      |     |  |   |      |    
|Net loss                 |                               | $                     | (42 | )            |  | $    | (331 | )   |  | $ | (465 | )  
|                         |                               |                       |     |              |  |      |      |     |  |   |      |    

See accompanying notes to consolidated financial
statements.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item 8.     Financial
Statements and Supplemental Data

GSM FACILITIES, LLC

CONSOLIDATED BALANCE SHEETS

|                                       |                              |                       |       |      |  |   |       |   | 
|-------------------------------------- | ---------------------------- | --------------------- | ----- | ---- |  | - | ----- | - | 
|                                       |                              |                      
|                                       |                              | December 31,         
|                                       |                              |                      
|                                       |                              | 2002                  |       | 2003
|                                       |                              |                       |       |     
|                                       |                              | (Unaudited)           |       |     
|                                       |                              |                      
|                                       |                              | (Dollars in millions)
|Assets                                 |                              |                       |       |      |  |   |       |  
|Current assets:                        |                              |                       |       |      |  |   |       |  
|                                       | Cash                         |                       | $     |     |  |   | $     |  | 
|                                       | Due from T-Mobile USA, Inc.  |                       |       | 122  |  |   |       | 9 | 
|                                       |                              |                       |       |      |  |   |       |  
|Total current assets                   |                              |                       | 122   |      |  |   | 9     |  
|Property, plant and equipment, net     |                              |                       | 2,955 |      |  |   | 3,588 |  
|                                       |                              |                       |       |      |  |   |       |  
|Total assets                           |                              | $                     | 3,077 |      |  | $ | 3,597 |  
|                                       |                              |                       |       |      |  |   |       |  
|Liabilities and members
    capital   |                              |                       |       |      |  |   |       |  
|Current liabilities:                   |                              |                       |       |      |  |   |       |  
|                                       | Due to Cingular Wireless LLC |                       | $     | 120  |  |   | $     | 3 | 
|                                       | Property tax payable         |                       |       | 2    |  |   |       | 6 | 
|                                       |                              |                       |       |      |  |   |       |  
|Total current liabilities              |                              |                       | 122   |      |  |   | 9     |  
|Capital lease obligations              |                              |                       | 222   |      |  |   | 247   |  
|                                       |                              |                       |       |      |  |   |       |  
|Total liabilities                      |                              |                       | 344   |      |  |   | 256   |  
|Total members capital                 |                              |                       | 2,733 |      |  |   | 3,341 |  
|                                       |                              |                       |       |      |  |   |       |  
|Total liabilities and members capital |                              | $                     | 3,077 |      |  | $ | 3,597 |  
|                                       |                              |                       |       |      |  |   |       |  

See accompanying notes to consolidated financial
statements.

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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item 8.     Financial
Statements and Supplemental Data

GSM FACILITIES, LLC

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |     |    |  
|------------------------------------------------------------------------------- | ------------------------------------------------- | ----------------------------- | ----- | ----------------------- | -- | ---- | ------ | --- | -- | - | ------ | --- | -- | -
|                                                                                |                                                   | Period from                   |       |                         |    |     
|                                                                                |                                                   | November 1, 2001              |       |                        
|                                                                                |                                                   | (inception) through           |       | Year Ended December 31,
|                                                                                |                                                   | December 31,                  |       |                        
|                                                                                |                                                   | 2001                          |       | 2002                    |    | 2003
|                                                                                |                                                   |                               |       |                         |    |     
|                                                                                |                                                   | (Unaudited)                   |       | (Unaudited)             |    |     
|                                                                                |                                                   |                              
|                                                                                |                                                   | (Dollars in millions)        
|Operating activities                                                            |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Net loss                                                                        |                                                   | $                             | (42   | )                       |    | $    | (331   | )   |    | $ | (465   | )  
|Adjustments to reconcile net loss to net cash
    used in operating activities: |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|                                                                                | Depreciation and amortization                     |                               |       | 41                      |    |      |        | 324 |    |   |        | 454 |   
|                                                                                | Loss on disposal of property, plant and equipment |                               |       |                        |    |      |        |    |    |   |        | 5   |   
|                                                                                | Interest accretion on capital lease obligations   |                               |       | 1                       |    |      |        | 6   |    |   |        | 6   |   
|                                                                                | Changes in operating assets and liabilities:      |                               |       |                         |    |      |        |     |    |   |        |     |   
|                                                                                |                                                   | Due from (to) affiliates, net |       |                         | 4  |      |        |     | (5 | ) |        |     | (4 | )
|                                                                                |                                                   | Property tax payable          |       |                         | (4 | )    |        |     |   |   |        |     | 4  |  
|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Net cash used in operating activities                                           |                                                   |                               |      |                         |    |      | (6     | )   |    |   |       |    
|Investing activities                                                            |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Purchases of property, plant and equipment                                      |                                                   |                               | (252  | )                       |    |      | (1,287 | )   |    |   | (1,114 | )  
|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Net cash used in investing activities                                           |                                                   |                               | (252  | )                       |    |      | (1,287 | )   |    |   | (1,114 | )  
|Financing activities                                                            |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Capital contributions                                                           |                                                   |                               | 252   |                         |    |      | 1,293  |     |    |   | 1,114  |    
|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Net cash provided by financing activities                                       |                                                   |                               | 252   |                         |    |      | 1,293  |     |    |   | 1,114  |    
|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Change in cash                                                                  |                                                   |                               |      |                         |    |      |       |     |    |   |       |    
|Cash at beginning of year                                                       |                                                   |                               |      |                         |    |      |       |     |    |   |       |    
|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Cash at end of year                                                             |                                                   | $                             |      |                         |    | $    |       |     |    | $ |       |    
|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Supplemental disclosure                                                         |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Interest paid                                                                   |                                                   | $                             | 2     |                         |    | $    | 11     |     |    | $ | 13     |    
|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Non-cash investing and financing
    activities                                 |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Capital lease additions                                                         |                                                   | $                             |      |                         |    | $    | 48     |     |    | $ | 19     |    
|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |    
|Initial contribution of net assets by members at
    inception                  |                                                   | $                             | 1,561 |                         |    | $    |       |     |    | $ |       |    
|                                                                                |                                                   |                               |       |                         |    |      |        |     |    |   |        |    

See accompanying notes to consolidated financial
statements.

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CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item 8.     Financial
Statements and Supplemental Data

GSM FACILITIES, LLC

CONSOLIDATED STATEMENTS OF CHANGES IN
MEMBERS CAPITAL

|                             |                       |                       |       |              |   |      |       |       |   |   |       |       |  
|---------------------------- | --------------------- | --------------------- | ----- | ------------ | - | ---- | ----- | ----- | - | - | ----- | ----- | -
|                             |                       |                       |       |             
|                             |                       | Period From           |       | Year Ended  
|                             |                       | November 1, 2001      |       | December 31,
|                             |                       | (inception) Through   |       |             
|                             |                       | December 31, 2001     |       | 2002         |   | 2003
|                             |                       |                       |       |              |   |     
|                             |                       | (Unaudited)           |       | (Unaudited)  |   |     
|                             |                       |                      
|                             |                       | (Dollars in millions)
|Balance, beginning of period |                       | $                     |      |              |   | $    | 1,771 |       |   | $ | 2,733 |      
|                             | Initial contributions |                       |       | 1,561        |   |      |       |      |   |   |       |      |  
|                             | Contributions, net    |                       |       | 252          |   |      |       | 1,293 |   |   |       | 1,073 |  
|                             | Net loss              |                       |       | (42          | ) |      |       | (331  | ) |   |       | (465  | )
|                             |                       |                       |       |              |   |      |       |       |   |   |       |      
|Balance, end of period       |                       | $                     | 1,771 |              |   | $    | 2,733 |       |   | $ | 3,341 |      
|                             |                       |                       |       |              |   |      |       |       |   |   |       |      

See accompanying notes to consolidated financial
statements.

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##### Table of Contents



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)


Period from November 1, 2001
(inception) through December 31, 2001

and Years Ended December 31, 2002 and
2003


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 (MTAs), 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. Both Cingular and
T-Mobile have agreed to fund the operations of the Company
during the next year.

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 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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##### Table of Contents



CINGULAR WIRELESS LLC





PART II (Dollars
in Millions)


Item 8.     Financial
Statements and Supplemental Data

GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Dollars in Millions)


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 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
Note 5). 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 from 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.



| |     
| | ----
| | 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 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 under 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
included 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 sell
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.

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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  (Continued)

(Dollars in Millions)


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. 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 the statement of operations.
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.



| |                        
| | -----------------------
| | New Accounting Standard

In June 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards
No. 143, Accounting for Asset Retirement
Obligations, (SFAS 143). This statement requires
entities 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 adopted this new pronouncement effective January 1,
2003.

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.
Accordingly, the Company did not record asset retirement
obligations for network infrastructure assets given the
insignificance of the Companys estimated liability and
related accretion and depreciation expense. The Company will
continue to evaluate whether the estimated asset retirement
obligations and related financial statement amounts continue to
be immaterial in relation to the Companys individual
financial statement line items or its consolidated financial
statements taken as a whole.



| |      
| | -----
| | 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 its 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.

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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  (Continued)

(Dollars in Millions)




| |                 
| | ----------------
| | 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 useful lives of
network assets. Actual results could differ from such estimates
under different assumptions or conditions.



| |                     
| | --------------------
| | Comprehensive Income

Comprehensive income 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 |       | 2002         |  | 2003
|                                    |  |              |       |              |  |     
|                                    |  | (in years)   |       | (Unaudited)  |  |     
|Buildings and building improvements |  |              | 10-25 |              |  | $    | 45    |   |  | $ | 64     |  
|Wireless communication systems      |  |              | 5-15  |              |  |      | 2,790 |   |  |   | 3,788  |  
|Site acquisition costs              |  |              | 20    |              |  |      | 304   |   |  |   | 371    |  
|Tower capital leases                |  |              | 13-32 |              |  |      | 210   |   |  |   | 229    |  
|Construction in progress            |  |              |      |              |  |      | 354   |   |  |   | 354    |  
|                                    |  |              |       |              |  |      |       |   |  |   |        |  
|                                    |  |              |       |              |  |      | 3,703 |   |  |   | 4,806  |  
|Less: accumulated depreciation      |  |              |       |              |  |      | (748  | ) |  |   | (1,218 | )
|                                    |  |              |       |              |  |      |       |   |  |   |        |  
|Property, plant and equipment, net  |  |              |       |              |  | $    | 2,955 |   |  | $ | 3,588  |  
|                                    |  |              |       |              |  |      |       |   |  |   |        |  

The net book value of assets recorded under
capital leases was $196 (unaudited) and $208 at
December 31, 2002 and 2003, 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
overhead costs incurred during the construction phase of the
Companys wireless networks for the years ended
December 31, 2002 and 2003 were $36 (unaudited) and $40,
respectively. Such amounts for the period ended
December 31, 2001 were not significant.

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, who 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

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PART II (Dollars
in Millions)


Item 8.     Financial
Statements and Supplemental Data

GSM FACILITIES, LLC

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(Dollars in Millions)


leasehold interests from SpectraSite in all of
the space on these 545 towers. For the years ended
December 31, 2002 and 2003, the Company reimbursed Cingular
for lease payments made on its behalf amounting to $11
(unaudited) and $13, 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, 2003 are summarized below:

|                            |  |   |      |  
|--------------------------- |  | - | ---- | -
|2004                        |  | $ | 16   |  
|2005                        |  |   | 17   |  
|2006                        |  |   | 18   |  
|2007                        |  |   | 19   |  
|2008                        |  |   | 19   |  
|Thereafter                  |  |   | 786  |  
|                            |  |   |      |  
|Total minimum payments      |  |   | 875  |  
|Less imputed interest       |  |   | (514 | )
|Less executory costs        |  |   | (114 | )
|                            |  |   |      |  
|Total long-term obligations |  | $ | 247  |  
|                            |  |   |      |  



| |                 
| | ----------------
| | 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. Rental expense under operating leases for the period
ended December 31, 2001 and the years ended
December 31, 2002 and 2003 were $12 (unaudited), $88
(unaudited) and $115, respectively. Included in the 2002 and
2003 amounts are $4 and $5, respectively, related to certain
network facilities leased from SBC. The following table
summarizes the approximate future minimum rentals under
noncancelable operating leases in effect at December 31,
2003:

|           |  |   |     | 
|---------- |  | - | --- | 
|2004       |  | $ | 108 | 
|2005       |  |   | 106 | 
|2006       |  |   | 99  | 
|2007       |  |   | 84  | 
|2008       |  |   | 72  | 
|Thereafter |  |   | 231 | 
|           |  |   |     | 
|Total      |  | $ | 700 | 
|           |  |   |     | 

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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  (Continued)

(Dollars in Millions)




| |           
| | ----------
| | 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 ownership interest of GSM
Facilities as of December 31, 2003 is approximately 70% for
Cingular and 30% 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.

In the event of dissolution prior to May 1,
2005, for reasons other than mutual agreement or judicial
decree, the member causing the dissolution event would be
required to pay the other member $250. Additionally, if
dissolution occurs prior to November 1, 2004, T-Mobile may
elect to exchange certain spectrum licenses, or in lieu of such
exchange, make a cash payment. If dissolution occurs after
November 1, 2004, T-Mobile is required to exchange certain
spectrum with Cingular.

In the event of dissolution after May 1,
2005, with the exception of dissolution upon mutual agreement,
the member responsible for the dissolution event would be
required to pay the other member $250. Under all dissolution
circumstances after November 1, 2004, members will have
obligations to exchange certain spectrum licenses.

Additionally, in the event of dissolution, all
outstanding capital settlements owed to the Company by the
members would require payment, the New York City Market network
assets would be distributed to T-Mobile, and the
California/Nevada Market network assets would be distributed to
Cingular. Following these distributions, a determination would
be made of each members capital account deficit or
surplus, and a settlement would be made between the members.

6.     Related Party
Transactions

The monthly operating expenses of the Company 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,

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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  (Continued)

(Dollars in Millions)


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. The
consolidated statements of operations include network service
revenues from the members as follows:

|                          |          |                  |    |              |  |      |     |     |  |   |     |     | 
|------------------------- | -------- | ---------------- | -- | ------------ |  | ---- | --- | --- |  | - | --- | --- | 
|                          |          | Period from      |    |              |  |     
|                          |          | November 1,      |    |             
|                          |          | 2001 (inception) |    | Year Ended  
|                          |          | through          |    | December 31,
|                          |          | December 31,     |    |             
|                          |          | 2001             |    | 2002         |  | 2003
|                          |          |                  |    |              |  |     
|                          |          | (Unaudited)      |    | (Unaudited)  |  |     
|Network service revenues: |          |                  |    |              |  |      |     |     |  |   |     |    
|                          | Cingular |                  | $  | 21           |  |      | $   | 141 |  |   | $   | 199 | 
|                          | T-Mobile |                  |    | 28           |  |      |     | 169 |  |   |     | 240 | 
|                          |          |                  |    |              |  |      |     |     |  |   |     |    
|                          |          | $                | 49 |              |  | $    | 310 |     |  | $ | 439 |    
|                          |          |                  |    |              |  |      |     |     |  |   |     |    

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 periods ended
December 31, 2001, 2002, and 2003 by Cingular to the
Company for network services and local interconnection charges
were $35 (unaudited), $216 (unaudited) and $305, 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 periods ended
December 31, 2001, 2002, and 2003 by T-Mobile to the
Company for network services and local interconnection charges
were $13 (unaudited), $83 (unaudited) and $121,
respectively, and are included in operating expenses in the
consolidated statements of operations.

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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  (Continued)

(Dollars in Millions)


At December 31, 2002 and 2003, the
consolidated balance sheets include the following amounts due
(to)/from the members:

|                                     |                               |              |      |      |   |   |    |     |  
|------------------------------------ | ----------------------------- | ------------ | ---- | ---- | - | - | -- | --- | -
|                                     |                               |             
|                                     |                               | December 31,
|                                     |                               |             
|                                     |                               | 2002         |      | 2003
|                                     |                               |              |      |     
|                                     |                               | (Unaudited)  |      |     
|Due (to)/from T-Mobile USA, Inc.:    |                               |              |      |      |   |   |    |    
|                                     | Capital settlements           |              | $    | 100  |   |   | $  | (17 | )
|                                     | Operating expense settlements |              |      | 22   |   |   |    | 26  |  
|                                     |                               |              |      |      |   |   |    |    
|                                     |                               | $            | 122  |      |   | $ | 9  |    
|                                     |                               |              |      |      |   |   |    |    
|Due (to)/from Cingular Wireless LLC: |                               |              |      |      |   |   |    |    
|                                     | Capital settlements           |              | $    | (100 | ) |   | $  | 17  |  
|                                     | Operating expense settlements |              |      | (20  | ) |   |    | (20 | )
|                                     |                               |              |      |      |   |   |    |    
|                                     |                               | $            | (120 | )    |   | $ | (3 | )  
|                                     |                               |              |      |      |   |   |    |    

The capital settlements presented in the table
above represent amounts due to/from the members for third and
fourth quarter settlements in 2002 and for the estimated fourth
quarter settlement in 2003.

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). The closing of
the acquisition is expected to occur in late 2004 and is subject
to the affirmative vote of AT&T Wireless shareholders,
Federal Communications Commission, Hart Scott Rodino and other
regulatory approvals, and other customary closing conditions.

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PART II (Dollars
in Millions)


Item
8.     Financial Statements and
Supplemental 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 2003   |  | $          | 163 |            |  |            | 259 |            |  |           | (24 | )(c) |  |  | (268)(b) |  |  | $ | 130 | 
|Year 2002   |  | $          | 131 |            |  |            | 404 |            |  |           |    |      |  |  | (372)(b) |  |  | $ | 163 | 
|Year 2001   |  | $          | 67  |            |  |            | 333 |            |  |           | 6   | (a)  |  |  | (275)(b) |  |  | $ | 131 | 



---



|    |                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes allowance balances received from
    contributions made by SBC and BellSouth of their Puerto Rico and
    Houston wireless operations.
|   
|(b) | Includes amounts written off as uncollectible,
    net of recoveries.                                                                          
|   
|(c) | Allowance for Affiliate Accounts Receivable
    included in Due to Affiliates, net, on the balance sheet at
    December 31, 2003.             

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PART II (Dollars
in Millions)







|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure

None






|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

(a) As of the end of the period covered by
this annual report, management concluded its evaluation of the
effectiveness of the design and operation of the Companys
disclosure controls and procedures. As of the end of the period,
our President and Chief Executive Officer and our Chief
Financial Officer concluded that we maintain disclosure controls
and procedures that are effective in providing reasonable
assurance that information required to be disclosed in our
reports under the Securities Exchange Act of 1934 (Exchange Act)
is recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms, and that
such information is accumulated and communicated to the
Companys management, including our President and Chief
Executive Officer and our Chief Financial Officer, as
appropriate, to allow timely decisions regarding required
disclosure. Management necessarily applied its judgment in
assessing the costs and benefits of such controls and
procedures, which, by their nature, can provide only reasonable
assurance regarding managements control objectives. We
also have investments in certain unconsolidated entities. As we
do not control or manage these entities, our disclosure controls
and procedures with respect to such entities are necessarily
more limited than those we maintain with respect to our
consolidated subsidiaries.

(b) 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.

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PART III









|         |                                                       
|-------- | ------------------------------------------------------
|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 February 24,
2004.

|                          |  |     |    |          |  |                                                                                                   
|------------------------- |  | --- | -- | -------- |  | --------------------------------------------------------------------------------------------------
|Name                      |  | Age |    | Position
|                          |  |     |    |         
|Ronald M. Dykes           |  |     | 56 |          |  | Class B Director (Member of Audit Committee)                                                      
|Richard A. Anderson       |  |     | 45 |          |  | Class B Director                                                                                  
|Randall L. Stephenson     |  |     | 43 |          |  | Chairman of the Board and Class B Director
    (Member of Audit Committee)                        
|Rayford Wilkins, Jr.      |  |     | 52 |          |  | Class B Director                                                                                  
|Stanley T. Sigman         |  |     | 56 |          |  | President and Chief Executive Officer                                                             
|Ralph de la Vega          |  |     | 52 |          |  | Chief Operating Officer                                                                           
|Richard G. Lindner        |  |     | 49 |          |  | Chief Financial Officer                                                                           
|F. Thaddeus Arroyo        |  |     | 40 |          |  | Chief Information Officer                                                                         
|Rickford D. Bradley       |  |     | 52 |          |  | Executive Vice President  Human
    Resources                                                    
|Joaquin R. Carbonell, III |  |     | 51 |          |  | Executive Vice President and General
    Counsel  Legal and Regulatory                           
|Gregory T. Hall           |  |     | 48 |          |  | Controller                                                                                        
|Carol L. Tacker           |  |     | 55 |          |  | 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
president  customer markets 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, 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.

Randall L. Stephenson, Chairman of the Board
and Class B Director, Cingular Wireless Corporation.
Randall Stephenson is senior executive vice president and chief
financial 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 Chairman of the Board in February
2003.

Rayford Wilkins, Jr., Class B Director,
Cingular Wireless Corporation. Rayford Wilkins is group
president  SBC marketing and sales and has served SBC
and its predecessors in various capacities since 1974. He was
selected 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
Expert.We have an audit committee
comprised of Messrs. Dykes and Stephenson. 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

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|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

of 2002 and the rules of the Securities and
Exchange Commission. Because of their affiliations with SBC and
BellSouth, 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 Cingular Wireless Corporation in October 2000
and resigned that position and became President and Chief
Executive Officer in November 2002. He has held high level
managerial positions with SBC or its subsidiaries for more than
the past five years. 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. Prior to that, he was BellSouths President of
Broadband and Internet Services. Mr. de la Vega held
numerous positions of increasing responsibility since beginning
with BellSouth in 1974.

Richard G. Lindner, Chief Financial
Officer. Richard Lindner came to Cingular from SBC Wireless,
where he served as senior vice president and chief operating
officer, responsible for the headquarter operations of
SBCs domestic wireless business until August 2000. Prior
to that 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. Mr. Lindner is
also a director of Sabre Holdings Corporation.

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 most
recently served as president of interconnection services. 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  Legal and
Regulatory. 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.

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|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

Gregory T. Hall, 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.

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
of our manager and us, or any arrangement or understanding
between any of these directors and executive officers and any
other person pursuant to which such director or officer was
selected. See 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

Executive Compensation

Other than Mr. Arroyo, the six executive
officers whose compensation is described in this section (the
named executive officers) came to the Company from
SBC or BellSouth. Effective December 31, 2003,
Mr. Feidler resigned as Chief Operating Officer to return
to BellSouth and Mr. de la Vega was elected to that office (see
related employment agreements under Agreements with
Management).

All of our named executive officers participate
in our benefit plans. In addition, the named executive officers
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 the Company.

Executive compensation is established by our
manager, Cingular Wireless Corporation, through action of its
board of directors. All of the directors of our manager are
executive officers of SBC or BellSouth. Neither we nor our
manager has a compensation committee, and there are no
interlocks between any executive officer of us or of our manager
and another company, one of whose executive officers serves on
our managers board of directors. 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.

Summary of Cash and Other
Compensation



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

As further described in the summary compensation
table below, the compensation structure for the named executive
officers consists of:



|  |                                                              
|- | -------------------------------------------------------------
| | salary;                                                      
| 
| | short-term performance-based incentives paid in
    cash; and

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PART III




Item 11.     Executive
Compensation




|  |                                                                                                                                                                                          
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | long-term compensation in the form of cash, stock
    appreciation units, stock options to purchase common stock of
    SBC or BellSouth and performance-based incentives, as applicable.

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. We have developed long-term incentive arrangements
in which our named executive officers participate. See
Long-Term Compensation Plans.

Annual Compensation.Salaries and bonuses listed in the
table below are the total annual salaries and bonuses for all
years, including:



|  |                                                                                                         
|- | --------------------------------------------------------------------------------------------------------
| | the salary and bonus paid to each named executive
    officer by the applicable predecessor company; and
| 
| | the salary and bonus paid to each named executive
    officer by us.                                    

Award values under short-term incentive plans are
based on the achievement of company financial goals and other
performance goals.

Long-Term Compensation.Long-term compensation awards in the
table below consist of the annual target grant of stock
appreciation units in 2003 by us for each named executive
officer and the annual target grant of stock options and
restricted stock pursuant to the applicable SBC or BellSouth
long-term incentive plan. Payout amounts reflected below were
paid from the respective predecessor company long-term incentive
plan.

Summary
Compensation Table

|                            |                           |                     |      |              |  |            |         |              |  |                        |           |              |  |         |         |              |  |   |           |           |     |  |         |         |  |   |         |         |  |   |            |         | 
|--------------------------- | ------------------------- | ------------------- | ---- | ------------ |  | ---------- | ------- | ------------ |  | ---------------------- | --------- | ------------ |  | ------- | ------- | ------------ |  | - | --------- | --------- | --- |  | ------- | ------- |  | - | ------- | ------- |  | - | ---------- | ------- | 
|                            |                           |                     |      |              |  |            |         |              |  |                        |           |             
|                            |                           |                     |      |              |  |            |         |              |  | Long-term Compensation |           |             
|                            |                           |                     |      |              |  |            |         |              |  |                        |           |             
|                            |                           |                     |      |              |  |            |         |              |  |                        |           |              |  |        
|                            |                           |                     |      | Awards       |  | Payouts    |         |             
|                            |                           | Annual Compensation |      |              |  |            |         |             
|                            |                           |                     |      |              |  | Securities |         |              |  |                       
|                            |                           |                     |      | Other Annual |  | Restricted |         | Underlying   |  | LTIP                   |           | All Other   
|                            |                           |                     |      | Salary       |  | Bonus      |         | Compensation |  | Stock                  |           | Options/SAUs |  | Payouts |         | Compensation
|Name and Principal Position |                           | Year                |      | ($)          |  | ($)(G)     |         | ($)(H)       |  | Awards ($)             |           | (#)          |  | ($)     |         | ($)         
|                            |                           |                     |      |              |  |            |         |              |  |                        |           |              |  |         |         |             
|Stanley T. Sigman(A)        |                           |                     | 2003 |              |  | $          | 900,000 |              |  | $                      | 1,876,000 |              |  | $       | 686,565 |              |  | $ | 0         |           |     |  | 322,889 |         |  | $ | 567,521 |         |  | $ | 130,608    |        
|                            | President/CEO             |                     |      | 2002         |  |            |         | 900,000      |  |                        |           | 1,081,000    |  |         |         | 179,483      |  |   |           | 5,000,000 | (I) |  |         | 301,743 |  |   |         | 239,076 |  |   |            | 180,968 | 
|                            |                           |                     |      | 2001         |  |            |         |             |  |                        |           |             |  |         |         |             |  |   |           |          |     |  |         |        |  |   |         |        |  |   |            |        | 
|Ralph de la Vega(B)         |                           |                     | 2003 |              |  |            | 410,319 |              |  |                        | 716,000   |              |  |         | 11,212  |              |  |   | 2,855,646 | (J)       |     |  | 122,624 |         |  |   | 0       |         |  |   | 36,211     |        
|                            | Chief Operating Officer   |                     |      | 2002         |  |            |         |             |  |                        |           |             |  |         |         |             |  |   |           |          |     |  |         |        |  |   |         |        |  |   |            |        | 
|                            |                           |                     |      | 2001         |  |            |         |             |  |                        |           |             |  |         |         |             |  |   |           |          |     |  |         |        |  |   |         |        |  |   |            |        | 
|Richard G. Lindner(C)       |                           |                     | 2003 |              |  |            | 383,635 |              |  |                        | 407,550   |              |  |         | 25,169  |              |  |   | 0         |           |     |  | 80,574  |         |  |   | 75,300  |         |  |   | 40,942     |        
|                            | Chief Financial Officer   |                     |      | 2002         |  |            |         | 370,327      |  |                        |           | 152,500      |  |         |         | 22,754       |  |   |           | 0         |     |  |         | 3,051   |  |   |         | 53,116  |  |   |            | 56,808  | 
|                            |                           |                     | 2001 |              |  |            | 366,267 |              |  |                        | 222,705   |              |  |         | 25,629  |              |  |   | 0         |           |     |  | 62,305  |         |  |   | 89,804  |         |  |   | 573,872    |        
|F. Thaddeus Arroyo(D)       |                           |                     | 2003 |              |  |            | 346,500 |              |  |                        | 332,250   |              |  |         | 7,590   |              |  |   | 0         |           |     |  | 47,542  |         |  |   | 0       |         |  |   | 10,368     |        
|                            | Chief Information Officer |                     |      | 2002         |  |            |         | 333,769      |  |                        |           | 303,800      |  |         |         | 109,051      |  |   |           | 0         |     |  |         | 0       |  |   |         | 0       |  |   |            | 12,701  | 
|                            |                           |                     | 2001 |              |  |            | 267,798 |              |  |                        | 398,500   |              |  |         | 74,302  |              |  |   | 0         |           |     |  | 65,000  |         |  |   | 0       |         |  |   | 62,771     |        
|Joaquin Carbonell(E)        |                           |                     | 2003 |              |  |            | 314,277 |              |  |                        | 286,000   |              |  |         | 74,927  |              |  |   | 0         |           |     |  | 50,413  |         |  |   | 0       |         |  |   | 129,845    | (K)    
|                            | Executive Vice President  |                     |      | 2002         |  |            |         | 292,277      |  |                        |           | 102,500      |  |         |         | 1,773        |  |   |           | 0         |     |  |         | 0       |  |   |         | 0       |  |   |            | 50,305  | 
|                            | and General Counsel       |                     |      | 2001         |  |            |         | 276,200      |  |                        |           | 148,200      |  |         |         | 13,607       |  |   |           | 0         |     |  |         | 37,100  |  |   |         | 122,752 |  |   |            | 39,600  | 
|Mark L. Feidler(F)          |                           |                     | 2003 |              |  |            | 555,654 |              |  |                        | 730,600   |              |  |         | 89,716  |              |  |   | 0         |           |     |  | 369,009 |         |  |   | 0       |         |  |   | 12,614,653 | (K)    
|                            | Chief Operating Officer   |                     |      | 2002         |  |            |         | 536,442      |  |                        |           | 1,071,750    |  |         |         | 6,221        |  |   |           | 0         |     |  |         | 0       |  |   |         | 0       |  |   |            | 99,255  | 
|                            |                           |                     |      | 2001         |  |            |         | 524,000      |  |                        |           | 391,300      |  |         |         | 15,074       |  |   |           | 0         |     |  |         | 160,700 |  |   |         | 215,040 |  |   |            | 80,800  | 



---



|    |  |                                                                                                                                                                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | For 2003, Mr. Sigmans Long-Term
    Incentive Plan payout was made by SBC under SBCs 1996
    Stock and Incentive Plan and is for the 2000-2002 performance
    period. Mr. Sigmans All Other
    Compensation for 2003 includes (a) benefits imputed
    with respect to premiums on SBC-owned life

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PART III




Item 11.     Executive
Compensation




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | insurance, as determined in accordance with IRS
guidelines, of $2,136; (b) the value of company-paid life
insurance premiums of $4,386; (c) above-market interest on
deferred compensation of $36,678; and (d) employer matching
contributions made to employee benefit plans of $87,408.
Mr. Sigman became President and CEO in November 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(B) |  | For 2003, Mr. de la Vegas All
    Other Compensation includes (a) above-market interest on
    BellSouth deferred compensation plans of $5,111;
    (b) employer matching contributions made to BellSouth
    employee benefit plans of $11,800; (c) benefits
    substantially equal to matching contributions that could not be
    provided under BellSouth employee savings plans because of
    limitations under the Internal Revenue Code of $10,522; and
    (d) value of life insurance premiums paid by BellSouth of
    $8,778. Mr. de la Vega became Chief Operating Officer in
    December 2003.                                                                                                                                                                                                                                                    
|   
|(C) |  | For 2003 Mr. Lindners Long-Term
    Incentive Plan payout was made by SBC under SBCs 1996
    Stock and Incentive Plan and is for the 2000-2002 performance
    period. Mr. Lindners All Other
    Compensation for 2003 includes (a) above-market
    interest on deferred compensation plans of $13,676; (b) the
    value of company-paid life insurance premiums of $1,003;
    (c) benefits imputed with respect to premiums on
    Cingular-owned life insurance as determined in accordance with
    IRS guidelines of $529; and (d) employer matching
    contributions made to employee benefit plans of $25,734.                                                                                                                                                                                                                                      
|   
|(D) |  | For 2003, Mr. Arroyos All Other
    Compensation includes (a) the value of company-paid
    life insurance premiums of $768 and (b) employer matching
    contributions made to certain employee benefit plans of $9,600.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(E) |  | For 2003, Mr. Carbonells All
    Other Compensation includes (a) above-market interest on
    deferred compensation plans of $15,224; (b) the value of
    company-paid life insurance premiums of $2,625;
    (c) employer matching contributions made to employee
    benefit plans of $20,005; and (d) benefits imputed with
    respect to a split dollar life insurance policy of $483.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(F) |  | For 2003, Mr. Feidlers All Other
    Compensation includes (a) above-market interest on
    deferred compensation plans of $22,705; (b) the value of
    company-paid life insurance premiums of $6,473;
    (c) employer matching contributions made to certain
    employee benefit plans of $39,715; (d) benefits imputed
    with respect to split dollar life insurance policies of $429;
    and (e) a payment of $12,447,297 for the approximate value
    Mr. Feidler would have received from the exercise of certain
    BellSouth options assuming a $60 exercise price, paid by
    BellSouth pursuant to his agreement with BellSouth.
    Mr. Feidler resigned from the Company, effective December
    31, 2003, to return to BellSouth.                                                                                                           
|   
|(G) |  | These amounts were earned under the Cingular
    Executive Short-Term Incentive Plan, except for Mr. de la
    Vegas 2003 amount which was earned under the comparable
    BellSouth executive short-term incentive plan. The amounts
    reported in 2003 and 2002 for Mr. Sigman include an
    incentive payment of $160,000 paid by us in connection with his
    employment agreement and $825,000 paid by SBC under their
    applicable short-term incentive plan, respectively. The amount
    reported in 2002 for Mr. Feidler includes $800,000 paid by
    BellSouth in connection with his transition agreement. The
    amounts reported for Mr. Arroyo include special bonuses of
    $42,000 ($150,000 less gross-ups paid on his 2002 bonus),
    $200,000, and $250,000 for 2003, 2002, and 2001 respectively, as
    part of his employment offer.
|   
|(H) |  | Includes, if applicable, (a) any tax
    gross-ups for the named executive officer and
    (b) payment of dividend equivalents on long-term
    performance shares. For Mr. Sigman, the 2003 amount
    includes perquisites in excess of reporting thresholds,
    including $29,971 for the personal use of corporate aircraft. No
    other named executive officer had perquisites and other personal
    benefits that, in the aggregate, exceeded reporting thresholds
    with respect to the applicable year.                                                                                                                                                                                                                                                                                                                                              

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Item 11.     Executive
Compensation




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(I) |  | This item includes the grant date value of
    restricted stock units granted to Mr. Sigman by us, in
    connection with his Cingular employment agreement, which will
    vest 100% on the third anniversary of the grant. At
    December 31, 2003, Mr. Sigman held 113,507 and 73,073
    equivalent share units of SBC and BellSouth restricted stock
    valued at $5,027,093 based on the closing price of $26.07 and
    $28.30 of SBC and BellSouth common stock, respectively, on
    December 31, 2003. These units are payable in cash based on
    the relative value of the underlying stock at vesting. Dividends
    are paid on all restricted share units at the same rate as the
    dividend rate received by all SBC and BellSouth shareholders,
    respectively.                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(J) |  | This item includes the grant date value of
    restricted stock awards granted to Mr. de la Vega by
    BellSouth, 50% of which will vest on December 31, 2004 and
    the remaining 50% of which will vest on December 31, 2005.
    At December 31, 2003, Mr. de la Vega held 49,234
    shares of BellSouth restricted stock valued at $1,393,322 based
    on the closing price of $28.30 of BellSouth common stock on
    December 31, 2003. Dividends are paid on all restricted
    shares at the same rate as the dividend rate received by all
    shareholders. In addition, Mr. de la Vega received grants
    of 92,873 restricted stock units valued at $2,500,000 pursuant
    to his compensation package with us in amounts giving effect to
    the weighted (at 60/40) average stock price of SBC and BellSouth
    common stock on December 31, 2003. These restricted units
    will vest in full on December 31, 2006, and are payable in
    cash based on the relative value of the underlying stock at
    vesting. Dividend equivalents will be paid quarterly at the same
    rate as the dividend rate received by all SBC and BellSouth
    shareholders, respectively.
|   
|(K) |  | In 2003, the Company terminated the split dollar
    life insurance arrangements previously maintained for
    Messrs. Feidler and Carbonell due to changes in the tax
    law. Under these arrangements, the Company had an interest in
    the policies cash values equal to the premiums paid by the
    Company. Upon termination of the arrangements, the Company
    recovered a portion of this interest from the policies
    cash surrender values. The Companys remaining interest in
    the policies was transferred to the executives so the policies
    would have sufficient value to continue to provide promised
    insurance coverage. The amounts reported for Messrs. Feidler and
    Carbonell include the amounts transferred by the Company in
    connection with these transactions of $98,034 and $91,508,
    respectively.                                                                                                                                                                                                                                                                                                                                        



| |                             
| | ----------------------------
| | Grants of Stock Options/SAUs

The following table contains information
concerning the grants of stock appreciation units and stock
options to the named executive officers during 2003. The Company
utilized the Black-Scholes option pricing model to develop the
theoretical values set forth under the Grant Date Present
Value column. The 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.

Stock appreciation units (SAUs) were
awarded under the Cingular Wireless 2003 Long Term Compensation
Plan to certain levels of management, including the named
executive officers. Each SAU enables the participant to receive
a cash payment at the exercise date equal to the increase in the
market value of an underlying share of BellSouth or SBC common
stock between the grant date and the exercise date. SAUs do not
provide for dividend payments. Participants will vest in 50% of
the SAUs in two years

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Item 11.     Executive
Compensation


from the date of grant. The remaining 50% will
vest in three years from date of grant. Each SAU has a term of
10 years from the grant date and any unexercised SAUs at
the end of the term are cancelled.

|                   |  |                   |         |                  |  |             |      |            |  |               |       |  |  |  |          |  |  |   |         |    
|------------------ |  | ----------------- | ------- | ---------------- |  | ----------- | ---- | ---------- |  | ------------- | ----- |  |  |  | -------- |  |  | - | ------- | ---
|                   |  |                   |         |                 
|                   |  | Individual Grants |         | Grant Date Value
|                   |  |                   |         |                 
|                   |  | Number of         |         | % of Total       |  |             |      |           
|                   |  | Securities        |         | Options/SAUs     |  |             |      |           
|                   |  | Underlying        |         | Granted to       |  | Exercise or |      |            |  | Grant Date   
|                   |  | Options/SAUs      |         | Employees in     |  | Base Price  |      | Expiration |  | Present Value
|Name               |  | Granted (#)       |         | Fiscal Year      |  | ($/Sh)      |      | Date       |  | ($)          
|                   |  |                   |         |                  |  |             |      |            |  |              
|Stanley T. Sigman  |  |                   | 156,642 | (A)              |  |             | 9.77 | %          |  | $             | 22.46 |  |  |  | 04/01/13 |  |  | $ | 718,987 | (F)
|                   |  |                   | 152,068 | (B)              |  |             | 9.26 |            |  |               | 21.38 |  |  |  | 04/01/13 |  |  |   | 512,469 | (G)
|                   |  |                   | 14,179  | (C)              |  |             | 0.10 | (K)        |  |               | 25.28 |  |  |  | 11/24/07 |  |  |   | 57,312  | (H)
|Ralph de la Vega   |  |                   | 118,500 | (D)              |  |             | 0.82 | (L)        |  |               | 21.75 |  |  |  | 03/03/13 |  |  |   | 490,021 | (I)
|                   |  |                   | 4,124   | (E)              |  |             | 0.03 | (L)        |  |               | 24.25 |  |  |  | 04/28/13 |  |  |   | 20,441  | (J)
|Richard G. Lindner |  |                   | 39,690  | (A)              |  |             | 2.47 |            |  |               | 22.46 |  |  |  | 04/01/13 |  |  |   | 182,177 | (F)
|                   |  |                   | 40,884  | (B)              |  |             | 2.49 |            |  |               | 21.38 |  |  |  | 04/01/13 |  |  |   | 137,779 | (G)
|F. Thaddeus Arroyo |  |                   | 23,419  | (A)              |  |             | 1.46 |            |  |               | 22.46 |  |  |  | 04/01/13 |  |  |   | 107,493 | (F)
|                   |  |                   | 24,123  | (B)              |  |             | 1.47 |            |  |               | 21.38 |  |  |  | 04/01/13 |  |  |   | 81,295  | (G)
|Joaquin Carbonell  |  |                   | 24,833  | (A)              |  |             | 1.55 |            |  |               | 22.46 |  |  |  | 04/01/13 |  |  |   | 113,983 | (F)
|                   |  |                   | 25,580  | (B)              |  |             | 1.56 |            |  |               | 21.38 |  |  |  | 04/01/13 |  |  |   | 86,205  | (G)
|Mark L. Feidler    |  |                   | 90,937  | (A)              |  |             | 5.67 |            |  |               | 22.46 |  |  |  | 04/01/13 |  |  |   | 417,401 | (F)
|                   |  |                   | 93,672  | (B)              |  |             | 5.70 |            |  |               | 21.38 |  |  |  | 04/01/13 |  |  |   | 315,675 | (G)



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | Stock appreciation units granted under the
    Cingular Wireless Long-Term Compensation Plan representing an
    underlying share of BellSouth common stock.                                                                                                                                                                                                                                                                                
|   
|(B) |  | Stock appreciation units granted under the
    Cingular Wireless Long-Term Compensation Plan representing an
    underlying share of SBC common stock.                                                                                                                                                                                                                                                                                      
|   
|(C) |  | Mr. Sigman received a stock option grant
    from SBC under a stock purchase plan where middle level and
    above managers received options based on the number of SBC
    shares they purchased while participating in the plan in 2002.
    Each option provides for the purchase of SBC common stock at a
    price equal to the fair market value of the stock on the date of
    the grant. These options are immediately exercisable.
|   
|(D) |  | Mr. de la Vega received a nonqualified stock
    option grant by BellSouth under the BellSouth Corporation Stock
    Plan to purchase shares of BellSouth common stock at a price
    equal to the fair market value of the stock on the date of the
    grant. These options become exercisable on 3/3/2006.                                                                                                                               
|   
|(E) |  | Mr. de la Vega was awarded incentive stock
    options from BellSouth based on the achievement of ownership of
    specified levels of BellSouth stock as established by the
    BellSouth Board of Directors. These options, which have exercise
    prices equal to the fair market value of the stock on the date
    of the grant, are exercisable six months from the date of grant.                                                   
|   
|(F) |  | This value was determined using a standard
    application of the Black-Scholes option pricing methodology
    using the following assumptions: volatility of 29%, dividend
    yield of 3.14% and a risk-free rate of return of 2.32%, based on
    SAUs being outstanding for a 5-year term.                                                                                                                                              
|   
|(G) |  | This value was determined using a standard
    application of the Black-Scholes option pricing methodology
    using the following assumptions: volatility of 24.90%, dividend
    yield of 4.38% and a risk-free rate of return of 2.81%, based on
    SAUs being outstanding for a 6-year term.                                                                                                                                           
|   
|(H) |  | This value was determined using a standard
    application of the Black-Scholes option pricing methodology
    using the following assumptions: volatility of 23.18%, dividend
    yield of 4.27% and a risk-free rate of return of 3.46%, based on
    options being outstanding for a 7-year term.                                                                                                                                        

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Item 11.     Executive
Compensation




|    |  |                                                                                                                                                                                                                                                                                                  
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(I) |  | This value was determined using a standard
    application of the Black-Scholes option pricing methodology
    using the following assumptions: volatility of 29%, dividend
    yield of 3.90% and a risk-free rate of return of 2.64%, based on
    options being outstanding for a 5-year term.
|   
|(J) |  | This value was determined using a standard
    application of the Black-Scholes option pricing methodology
    using the following assumptions: volatility 29%, dividend yield
    3.44% and a risk-free rate of return of 2.84%, based on options
    being outstanding for a 5-year term.      
|   
|(K) |  | Percentage is based on total options granted to
    SBC employees in 2003.                                                                                                                                                                                                                       
|   
|(L) |  | Percentages are based on total options granted to
    BellSouth employees in 2003.                                                                                                                                                                                                               



| |                                      
| | -------------------------------------
| | Option/SAU Exercises and
    Holdings

The following table provides information for the
named executive officers regarding exercises of SBC and
BellSouth options during 2003. Additionally, the table provides
the values of unexercised options held on December 31, 2003
that are based on the fair market value of the shares of common
stock of SBC and BellSouth.

Aggregated Option Exercises in 2003

and Fiscal Year-End Option Values


|                      |  |             |         |          |  |                       |           |                         |  |             |         |               |  |  |         |  |  |   |           |  |  |   |         | 
|--------------------- |  | ----------- | ------- | -------- |  | --------------------- | --------- | ----------------------- |  | ----------- | ------- | ------------- |  |  | ------- |  |  | - | --------- |  |  | - | ------- | 
|                      |  |             |         |          |  |                       |           |                         |  |            
|                      |  |             |         |          |  |                       |           | Value of Unexercised   
|                      |  |             |         |          |  | Number of Unexercised |           | In-the-Money Options at
|                      |  |             |         |          |  | Options at FY-End     |           | FY-End                 
|                      |  | Shares      |         | Value    |  |                       |           |                        
|                      |  | Acquired on |         | Realized |  | Exercisable           |           | Unexercisable           |  | Exercisable |         | Unexercisable
|Name                  |  | Exercise(#) |         | ($)      |  | (#)                   |           | (#)                     |  | ($)         |         | ($)          
|                      |  |             |         |          |  |                       |           |                         |  |             |         |              
|Stanley T. Sigman(A)  |  |             | 0       |          |  | $                     | 0         |                         |  |             | 927,219 |               |  |  | 0       |  |  | $ | 11,201    |  |  | $ | 0       | 
|Ralph de la Vega(B)   |  |             | 0       |          |  |                       | 0         |                         |  |             | 199,451 |               |  |  | 331,000 |  |  |   | 355,372   |  |  |   | 770,466 | 
|Richard G. Lindner(A) |  |             | 0       |          |  |                       | 0         |                         |  |             | 241,965 |               |  |  | 0       |  |  |   | 70,455    |  |  |   | 0       | 
|F. Thaddeus Arroyo(B) |  |             | 0       |          |  |                       | 0         |                         |  |             | 65,000  |               |  |  | 0       |  |  |   | 0         |  |  |   | 0       | 
|Joaquin Carbonell(B)  |  |             | 8,000   |          |  |                       | 87,398    |                         |  |             | 285,756 |               |  |  | 0       |  |  |   | 1,045,508 |  |  |   | 0       | 
|Mark L. Feidler(B)    |  |             | 158,600 |          |  |                       | 1,011,136 |                         |  |             | 160,700 |               |  |  | 184,400 |  |  |   | 0         |  |  |   | 424,120 | 



---



|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(A) | Value of Unexercised In-the-Money
    Options figures are based on the year end,
    December 31, 2003 SBC common stock price of $26.07.



|    |                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(B) | Value of Unexercised In-the-Money
    Options figures are based on the average of the high and
    low price of $28.20 of BellSouth common stock on
    December 31, 2003.

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PART III




Item 11.     Executive
Compensation


The following table provides information for the
named executive officers regarding the values of unexercised
SAUs held on December 31, 2003 that are based on the fair
market values of an underlying share of common stock of SBC and
BellSouth. No SAUs were exercised during 2003.

Aggregated SAU Exercises in 2003

and Fiscal Year-End Option Values


|                   |  |             |   |          |  |                       |   |                      |  |             |   |               |  |  |         |  |  |   |   |  |  |   |           | 
|------------------ |  | ----------- | - | -------- |  | --------------------- | - | -------------------- |  | ----------- | - | ------------- |  |  | ------- |  |  | - | - |  |  | - | --------- | 
|                   |  |             |   |          |  |                       |   |                      |  |            
|                   |  |             |   |          |  |                       |   | Value of Unexercised
|                   |  |             |   |          |  | Number of Unexercised |   | In-the-Money SAUs at
|                   |  |             |   |          |  | SAUs at FY-End        |   | FY-End (A)          
|                   |  | Units       |   | Value    |  |                       |   |                     
|                   |  | Acquired on |   | Realized |  | Exercisable           |   | Unexercisable        |  | Exercisable |   | Unexercisable
|Name               |  | Exercise(#) |   | ($)      |  | (#)                   |   | (#)                  |  | ($)         |   | ($)          
|                   |  |             |   |          |  |                       |   |                      |  |             |   |              
|Stanley T. Sigman  |  |             | 0 |          |  | $                     | 0 |                      |  |             | 0 |               |  |  | 308,710 |  |  | $ | 0 |  |  | $ | 1,627,988 | 
|Ralph de la Vega   |  |             | 0 |          |  |                       | 0 |                      |  |             | 0 |               |  |  | 0       |  |  |   | 0 |  |  |   | 0         | 
|Richard G. Lindner |  |             | 0 |          |  |                       | 0 |                      |  |             | 0 |               |  |  | 80,574  |  |  |   | 0 |  |  |   | 423,536   | 
|F. Thaddeus Arroyo |  |             | 0 |          |  |                       | 0 |                      |  |             | 0 |               |  |  | 47,542  |  |  |   | 0 |  |  |   | 249,904   | 
|Joaquin Carbonell  |  |             | 0 |          |  |                       | 0 |                      |  |             | 0 |               |  |  | 50,413  |  |  |   | 0 |  |  |   | 264,995   | 
|Mark L. Feidler    |  |             | 0 |          |  |                       | 0 |                      |  |             | 0 |               |  |  | 184,609 |  |  |   | 0 |  |  |   | 970,394   | 



---



|    |                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) | Value of Unexercised In-the-Money
    SAUs figures are based on the year end, December 31,
    2003 SBC and BellSouth common stock price of $26.07 and $28.30,
    respectively.



| |                             
| | ----------------------------
| | Long-Term Compensation Plans

The following table lists the performance units
granted in 2003 to the named executive officers under the 2003
Cingular Long-Term Compensation Plan (the LTIP
Plan). The LTIP Plan provides for incentive compensation
based upon the achievement of certain performance objectives
over performance periods that are two years or longer. For 2003,
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 2003-2005. The actual number of
performance units that can be earned at the end of the
performance period ranges from 0 percent to
200 percent of a participants performance unit award.

|                   |  |                  |        |                |  |  |           | 
|------------------ |  | ---------------- | ------ | -------------- |  |  | --------- | 
|                   |  |                  |        | Performance or
|                   |  |                  |        | Other Period  
|                   |  | Number of        |        | Until         
|                   |  | Shares, Units or |        | Maturation    
|Name               |  | Other Rights     |        | or Payout     
|                   |  |                  |        |               
|Stanley T. Sigman  |  |                  | 50,063 | (A)            |  |  | 2003-2005 | 
|Ralph de la Vega   |  |                  | 18,850 | (B)            |  |  | 2003-2005 | 
|Richard G. Lindner |  |                  | 13,050 | (A)            |  |  | 2003-2005 | 
|F. Thaddeus Arroyo |  |                  | 7,700  | (A)            |  |  | 2003-2005 | 
|Joaquin Carbonell  |  |                  | 8,165  | (A)            |  |  | 2003-2005 | 
|Mark L. Feidler    |  |                  | 29,900 | (A)            |  |  | 2003-2005 | 



---



|    |                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) | Performance units granted under the Cingular LTIP
    Plan. The actual number of performance units that can be earned
    ranges from 0 percent to 200 percent of the performance
    unit award.  
|   
|(B) | Represents an award of BellSouth performance
    shares made during 2003 under the BellSouth Corporation Stock
    Plan. The determination of the actual number of performance
    shares earned is

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Item 11.     Executive
Compensation




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | based on BellSouths annualized Total
    Shareholder Return (TSR) over a three-year
    performance period in comparison to the TSR of a peer group of
    telecommunications companies. The actual number of performance
    shares that can be earned ranges from 0 percent to
    150 percent of a participants performance share
    award. For each performance share earned, participants receive a
    cash payment equal to the average fair market value of a share
    of BellSouth stock for the last five trading days preceding, and
    the first five trading days following, the last day of the
    performance period. This cash payment is made in two equal
    installments: the first installment is paid after the end of the
    performance period, and the second installment is paid six
    months later. In addition, after the end of the performance
    period, participants receive a cash payment equal to the amount
    of cash dividends paid on one share of BellSouth stock during
    the performance period multiplied by the number of performance
    shares earned.

Effective January 1, 2004, the long-term
compensation plan was amended to provide for grants of
Restricted Stock Units (RSUs). RSUs result in a cash
payment to participants determined by the stock prices of common
stock of BellSouth and SBC on the valuation date determined
under the long-term compensation plan. The plan also provides
for cash dividend equivalent payments. To date, no RSUs have
been granted under this plan.



| |                                          
| | -----------------------------------------
| | Pension and Other Retirement
    Benefits

We adopted a non-contributory pension plan that
covers all employees not covered by a collective bargaining
agreement and a limited group of employees covered by such an
agreement, known as the Cingular Wireless Pension Plan.
Beginning November 1, 2001, participants, including the
named executive officers, are entitled to receive monthly
service credits of 5% of base pay and interest credits,
compounded monthly, determined by reference to 30-year
U.S. Treasury rates. The Cingular Wireless Pension Plan
provides for certain transition benefits which are intended to
transition current employees from the SBC or BellSouth benefit
levels to our ongoing benefit level over a period of five years
or less.

In addition to the Cingular Wireless Pension
Plan, each of the named executive officers participates in
certain non-qualified supplemental pension plans that provide
benefits in excess of amounts permitted in qualified benefit
plans by certain Internal Revenue Code provisions. For
Mr. Lindner, we adopted a supplemental retirement income
plan (Cingular Mirror SRIP) that mirrors the
substantive terms of the SBC Supplemental Retirement Income Plan
(SBC SRIP). The Cingular Mirror SRIP establishes a
target annual retirement benefit for certain officers, stated as
a percentage of their annual salaries and annual incentive
bonuses averaged over a specified period, offset by our pension
plan and any other Cingular nonqualified plan, if adopted. The
Cingular Mirror SRIP will provide benefits identical to those of
the SBC SRIP but with the accrual of benefits freezing on and as
of December 31, 2006. Mr. Sigman will not accrue
benefits under the Cingular Mirror SRIP so long as he is
accruing benefits under the SBC SRIP. Mr. Sigmans SBC
SRIP benefit will be reduced by the amount of any vested benefit
that he receives from our qualified pension plan. See
Agreements with Management  Agreement with
Stanley Sigman below. For Messrs. de la Vega,
Carbonell and Feidler, BellSouth will maintain existing accounts
and remain liable for accrued benefits under the BellSouth
Supplemental Executive Retirement Plan (SERP), along
with certain other senior managers transferred to Cingular.
BellSouth will continue to accrue benefits under the SERP to
eligible participants through December 31, 2006, or
indefinitely in the case of Mr. de la Vega per his
BellSouth agreement. The net SERP benefit payable from BellSouth
will equal the gross benefit amount determined by the SERP
formula, offset by Cingulars qualified pension plan and
social security, and further offset by any Cingular nonqualified
plan, if adopted. Mr. Arroyo was not a covered participant
under the BellSouth SERP.

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Item 11.     Executive
Compensation


The total estimated annual combined pension
amounts based on pay and completed years of service as of
December 31, 2003 payable beginning at the assumed
commencement age from qualified and non-qualified plans to
Messrs. Sigman, de la Vega, Lindner, Arroyo, Carbonell and
Feidler would be $1,445,517, $264,447, $216,667, $11,661,
$175,858 and $208,634, respectively. The assumed commencement
age is 65 for Messrs. Feidler, Arroyo and Carbonell, 61 for
Mr. de la Vega and 60 for Messrs. Sigman and Lindner.



| |                           
| | --------------------------
| | Agreements with Management

Stanley 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
    (established as $900,000 for 2003);                                                                                                                                                                                                                                                                                                                                                                                                       
| 
| | short-term award target of not less than
    $1,144,000 per year (established as $1,144,000 for 2003), which
    shall be paid subject to achievement of performance criteria;                                                                                                                                                                                                                                                                                                            
| 
| | long-term award target of not less than
    $5,000,000 per year (established as $5,000,000 for 2003), which
    shall be paid subject to achievement of performance criteria of
    the LTIP 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 Cingular 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 the Company;                                                                                                                                                                                                                                                                                                                                                                   
| 
| | enhanced pension benefits to be accrued under the
    SBC SRIP; and                                                                                                                                                                                                                                                                                                                                                                                                                       
| 
| | Georgia and federal income tax gross-ups on
    designated compensation payments.                                                                                                                                                                                                                                                                                                                                                                                                         

Mark Feidler.In
connection with his joining our company, Mr. Feidler and
BellSouth entered into an 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 a special
    bonus in the amount of $800,000 in respect of his performance
    for the transition period during which BellSouths wireless
    interests were being transferred to Cingular;                                                                                                                                                                                                                                                                                           
| 
| | the payment by BellSouth to him of $2,000,000 in
    the event of voluntary or involuntary termination of employment
    with Cingular on or prior to December 31, 2003 if BellSouth
    does not offer him a comparable position at BellSouth to which
    to return;                                                                                                                                                                                                                                                     
| 
| | vesting of executive benefits in the event of
    voluntary or involuntary termination of employment with Cingular
    or change of control of BellSouth or a substantial diminution of
    BellSouths interest in Cingular;                                                                                                                                                                                                                                                                                              
| 
| | the payment by BellSouth to him of an amount
    representing the approximate value he would have received if he
    exercised BellSouth options granted prior to June 9, 2000
    at a market price of $60 per share, less what value he actually
    received from exercising those options, in the event of a
    voluntary or involuntary termination of employment with
    Cingular, death or disability, change of control of BellSouth or
    a substantial diminution of BellSouths interest in
    Cingular; and

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Item 11.     Executive
Compensation



|  |                                                                                                                                                                                                                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the payment by BellSouth to him of an amount
    representing the prorated short-term bonus award, as applicable
    to him under a comparable Cingular short-term bonus plan, in the
    event of a voluntary or involuntary termination of employment
    with Cingular (we would not be required to pay him any amount
    under our plan).

Thaddeus Arroyo.In
connection with his joining our company, Mr. Arroyo and we
agreed to the compensation arrangement summarized below:



|  |                                                                                                                                                                                                                                                                                
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | short-term award target of $200,000 in 2001,
    which shall be paid subject to achievement of performance
    criteria;                                                                                                                                                       
| 
| | a grant of 65,000 BellSouth stock options
    effective March 1, 2001, granted at the fair market value
    on the date of grant;                                                                                                                                              
| 
| | four special bonus payments payable as follows:
    $250,000 at the time of hire, $200,000 on the first anniversary
    with the company, $150,000 on the second anniversary and
    $100,000 on the third anniversary;                                                        
| 
| | a special bonus payment of $74,000, offset by any
    bonus payment earned in 2000 and paid in 2001 by his previous
    employer; and                                                                                                                                          
| 
| | a separation payment of 1 times salary plus
    standard bonus payable if involuntarily terminated within
    36 months of date of hire, other than for cause, contingent
    upon executing a transition agreement containing non-compete and
    non-solicitation provisions.

In addition, in a separate 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 the Company 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, 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 Cingular results and payable at
    the normal bonus payment date, unless involuntarily terminated
    for cause.                                                                                                                                            

Ralph de la Vega.In
connection with his joining our company, Mr. de la Vega and
Cingular 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;                                                                                                                                                                                                                                                                                
| 
| | 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.

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Item 11.     Executive
Compensation

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 Cingular plus two
    times the standard bonus award for the year in which the
    termination occurs, if Cingular initiates termination other than
    for cause, or if Mr. de la Vega initiates termination from
    Cingular for good reason and BellSouth does not offer him a
    comparable position at BellSouth to which to return;
| 
| | continued participation in the BellSouth
    Supplemental Executive Retirement Plan (SERP). BellSouth will
    continue to accrue benefits under the SERP recognizing service
    and compensation attributable to the period of service with
    Cingular.                                                                                                                                                                                    






|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management

SBC and BellSouth own approximately 60% and 40%
ownership interests in us, and Cingular Wireless Corporation,
our manager, owns a 0.0000001% ownership 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 Cingular Wireless Corporation 
our manager. Their economic interests in us are represented by
units.

Our manager has two 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
| 
| | 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 series has been designated and 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

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|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
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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 our Company 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 two 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).

At present, the committee is composed of the
individuals who constitute our managers board of
directors. Deadlocks between the Class B directors of SBC
and those of BellSouth will be resolved by the chief executive
officers of SBC and BellSouth. Upon 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 domestic provision of mobile wireless voice
and data services that use radio frequencies licensed by the FCC
for the provision of cellular service, PCS service, wireless
data service, satellite services and related services.
Domestic means the 50 states of the United States,
the District of Columbia, the U.S. Virgin Islands and
Puerto Rico, but excludes other U.S. territories and
possessions. 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
network services, except where we and our subsidiaries would be
materially disadvantaged to do so. 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, together with any additional
service territories that may be acquired by either party, as
described below.

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|-------- | --------------------------------------------------
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In addition, SBC and BellSouth may not market or
sell mobile wireless products and/or services other than ours.
However, this 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 United States, 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.                                                                                                                                                                                                                                                                                            
| 
| | 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.

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|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

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 members 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.

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 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

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|-------- | --------------------------------------------------
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    Transactions

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.

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

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|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

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 Notes 16 and 17 to our
consolidated financial statements for more information on
communications tower transactions with SBC and BellSouth.

Stockholders Agreement

There are four Class B directors. 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.                                                                                                                                                                                            

Following 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.

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.

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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.

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

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    Transactions

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 $103 million for the year
ended December 31, 2003.

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 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

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|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

and a number of other services. Neither SBC nor
BellSouth is acting as a reseller nor had any revenues from
these agreements in 2003.

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 year ended December 31, 2003.

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

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|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

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
$815 million for the year ended December 31, 2003.

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, 2003, we recorded approximately $13
million in revenue from SNET DG under this agreement.

Subordinated Member Loans

A portion of our capital structure consists of
subordinated member loans payable to SBC and BellSouth in the
principal amounts of approximately $5.9 billion and
$3.8 billion, respectively. The loans have an interest rate
of 6% and a stated maturity of June 30, 2008.

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|         |                                                            
|-------- | -----------------------------------------------------------
|Item 14. | Principal Accountant Fees and Services(Dollars in Millions)

The following table sets forth the aggregate fees
rendered to us by Ernst & Young LLP for
professional services rendered for the fiscal years ended
December 31, 2002 and December 31, 2003.

|                      |  |              |     |      |  |   |     | 
|--------------------- |  | ------------ | --- | ---- |  | - | --- | 
|                      |  |             
|                      |  | Year Ended  
|                      |  | December 31,
|                      |  |             
|                      |  | 2002         |     | 2003
|                      |  |              |     |     
|Audit Fees(1)         |  | $            | 2.1 |      |  | $ | 2.8 | 
|Audit-Related Fees(2) |  |              | 0.3 |      |  |   | 0.3 | 
|Tax Fees(3)           |  |              | 0.5 |      |  |   | 0.4 | 
|All Other Fees(4)     |  |              | 1.3 |      |  |   | 0.4 | 
|                      |  |              |     |      |  |   |     | 
|Total Fees            |  | $            | 4.2 |      |  | $ | 3.9 | 
|                      |  |              |     |      |  |   |     | 



---



|    |                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Consists of fees rendered for professional
    services for the audit of our annual financial statements and
    review of financial statements included in our quarterly
    Form 10-Q or services that are normally provided by the
    accountant in connection with statutory and regulatory filings
    or engagements for those fiscal years.
|   
|(2) | Consists of fees rendered 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 rendered for tax compliance, tax
    advice, and tax planning. These services primarily include
    assistance regarding sales and use tax planning.                                                                                                                                                                              
|   
|(4) | Consists of fees rendered for products and
    services other than the services reported above. These services
    primarily include process and contract reviews.                                                                                                                                                                                 

Audit Committee Pre-Approval Policies and
Procedures.All services provided by
our independent auditors, Ernst & Young LLP, are
subject to pre-approval by our two-member audit committee. The
audit committee charter does provide the delegation of
pre-approval for certain particular services to either member of
the audit committee in the event that there is a need for such
approval prior to the next full audit committee meeting.
However, a full report of any such interim approvals must be
given at the next audit committee meeting.

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Item 15.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K

|                                                                                                                                                                                                |                                                                                                                                                                                                  |                                                     |  |     |     | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------- |  | --- | --- | 
|                                                                                                                                                                                                |                                                                                                                                                                                                  | Page(s)                                            
|                                                                                                                                                                                                |                                                                                                                                                                                                  | in This                                            
|                                                                                                                                                                                                |                                                                                                                                                                                                  | Form 10-K                                          
|                                                                                                                                                                                                |                                                                                                                                                                                                  |                                                    
|a. Documents filed as part of the report                                                                                                                                                        |                                                                                                                                                                                                  |                                                     |  |    
|(1) Financial Statements                                                                                                                                                                        |                                                                                                                                                                                                  |                                                     |  |    
|                                                                                                                                                                                                | Cingular Wireless LLC                                                                                                                                                                            |                                                     |  |     |    
|                                                                                                                                                                                                | Report of Independent Auditors                                                                                                                                                                   |                                                     |  | 70  |    
|                                                                                                                                                                                                | Consolidated Statements of Income for the years
    ended December 31, 2001, 2002, and 2003                                                                                                      |                                                     |  | 71  |    
|                                                                                                                                                                                                | Consolidated Balance Sheets as of
    December 31, 2002 and 2003                                                                                                                                 |                                                     |  | 72  |    
|                                                                                                                                                                                                | Consolidated Statements of Cash Flows for the
    years ended December 31, 2001, 2002, and 2003                                                                                                  |                                                     |  | 73  |    
|                                                                                                                                                                                                | Consolidated Statements of Changes in
    Members Capital for the years ended December 31,
    2001, 2002, and 2003                                                                             |                                                     |  | 74  |    
|                                                                                                                                                                                                | Notes to Consolidated Financial Statements                                                                                                                                                       |                                                     |  | 75  |    
|                                                                                                                                                                                                | GSM Facilities LLC                                                                                                                                                                               |                                                     |  |     |    
|                                                                                                                                                                                                | Report of Independent Auditors  Ernst
    & Young LLP                                                                                                                                           |                                                     |  | 112 |    
|                                                                                                                                                                                                | Report of Independent Auditors 
    PricewaterhouseCoopers LLP                                                                                                                                  |                                                     |  | 113 |    
|                                                                                                                                                                                                | Consolidated Statements of Operations for the
    period from November 1, 2001 (inception) through
    December 31, 2001 and for the years ended December 31,
    2002 and 2003                  |                                                     |  | 114 |    
|                                                                                                                                                                                                | Consolidated Balance Sheets as of
    December 31, 2002 and 2003                                                                                                                                 |                                                     |  | 115 |    
|                                                                                                                                                                                                | Consolidated Statements of Cash Flows for the
    period from November 1, 2001 (inception) through
    December 31, 2001 and for the years ended December 31,
    2002 and 2003                  |                                                     |  | 116 |    
|                                                                                                                                                                                                | Consolidated Statements of Changes in
    Members Capital for the period from November 1, 2001
    (inception) through December 31, 2001 and for the
    years ended December 31, 2002 and 2003 |                                                     |  | 117 |    
|                                                                                                                                                                                                | Notes to Consolidated Financial Statements                                                                                                                                                       |                                                     |  | 118 |    
|(2) Financial Statement Schedule as set
    forth under Item 8 of this Report                                                                                                                   |                                                                                                                                                                                                  |                                                     |  |    
|                                                                                                                                                                                                | Cingular Wireless LLC                                                                                                                                                                            |                                                     |  |     |    
|                                                                                                                                                                                                |                                                                                                                                                                                                  | Schedule II  Valuation and
    Qualifying Accounts |  |     | 126 | 
|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                                                                                                                                                                                                                                                      
|        | # |             |  | Management contract or compensatory plan or
    arrangement                                                                                                                                                                                                                    
|       
|        | 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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Item 15.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K


|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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)                                                                                                                                                                                                                                                                                                                                                             
|        | 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 the Registration Statement on
    Form S-4 filed May 31, 2002, Registration
    No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 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  | .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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 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)                                                                                                                                                                                                                                                                                                                                                                                           

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Item 15.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K


|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 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)                                                                                                                                                                                                                                                                                                                                                                                
|        | 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*        |  | 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)                                                                                                                                                                                                                                                                                                                                                                          
|        | 10 | .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)                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 10 | .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)                                                                                                                                                                                                                                                                                                                                                                        
|        | 10 | .15*        |  | 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 | .16*#       |  | Cingular Wireless Cash Deferral Plan
    (Exhibit 10.16 to Registration Statement on Form S-4
    filed January 24, 2002, Registration No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 10 | .17*#       |  | 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 | .18*#       |  | 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 | .19*#       |  | Agreement between Mark Feidler and BellSouth
    Corporation (Exhibit 10.19 to Registration Statement on
    Form S-4 filed January 24, 2002, Registration
    No. 333-81342)                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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PART IV




Item 15.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K


|        |    |             |  |                                                                                                                                                                                                                                           
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .20*#       |  | 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 | .21*#       |  | BellSouth Corporation Stock Plan, as amended on
    September 23, 1996 and November 24, 1996
    (Exhibit 10v of BellSouth Corporation Annual Report on
    Form 10-K for the year ended December 31, 1996)                               
|        | 10 | .22*#       |  | 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 | .22.1*#     |  | 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 | .23*#       |  | 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 | .30*#       |  | BellSouth Corporation Executive Long-Term
    Incentive Plan (Exhibit 10e of BellSouth Corporation Annual
    Report on Form 10-K for the year ended December 31,
    1991)                                                               
|        | 10 | .31*#       |  | 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 | .32*#       |  | 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)                          
|        | 10 | .33*#       |  | 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 | .34*#       |  | SBC Communications Inc. 1996 Stock and Incentive
    Plan (Exhibit 10-p of SBC Communications Inc. Annual Report
    on Form 10-K for the year ended December 31, 2001)                                                                   
|        | 10 | .35*#       |  | SBC Communications Inc. 2001 Incentive Plan
    (Exhibit 10-w of SBC Communications Inc. Annual Report on
    Form 10-K for the year ended December 31, 2001)                                                                             
|        | 10 | .36*#       |  | SBC Communications Inc. Stock Savings Plan, as
    amended through September 28, 2001(Exhibit 10-m of SBC
    Communications Inc. Annual Report on Form 10-K for the year
    ended December 31, 2001)                                    
|        | 10 | .38*#       |  | 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, 2000)                                                                       
|        | 10 | .39*        |  | SBC Communications Inc. Supplemental Retirement
    Income Plan (Exhibit 10-d of SBC Communications Inc. Annual
    Report on Form 10-K for the year ended December 31,
    2000)                                                         
|        | 10 | .40*#       |  | 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 | .41*#       |  | 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 | .42*#       |  | 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)                                           

154



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PART IV




Item 15.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K


|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                              
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .43*#       |  | 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 | .45*#       |  | 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 | .46*#       |  | 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 | .47*#       |  | 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 | .48*#       |  | Officer Communication Plan (Exhibit 10.48 to
    Annual Report on Form 10-K for the year ended
    December 31, 2002)                                                                                                                                                                                                                                                                        
|        | 10 | .49*        |  | Employment Agreement with Stanley T. Sigman
    (Exhibit 10.49 to Annual Report on Form 10-K for the
    year ended December 31, 2002)                                                                                                                                                                                                                                                       
|        | 10 | .51*        |  | Employment Agreement with Thaddeus Arroyo
    (Exhibit 10.51 to Annual Report on Form 10-K for the
    year ended December 31, 2002)                                                                                                                                                                                                                                                         
|        | 10 | .52*        |  | 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 | .53*        |  | 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)                                                                                                                                          
|        | 10 | .54*        |  | 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)                                                                               
|        | 10 | .55*        |  | 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 | .56         |  | Subordination Agreement among SBC Communications
    Inc., BellSouth Corporation, Cellular Credit Corporation and
    Cingular Wireless LLC dated November 17, 2003                                                                                                                                                                                                                          
|        | 10 | .57*#       |  | Agreement dated December 16, 2003, between
    BellSouth Corporation and Mark L. Feidler. (Exhibit 10kk of
    BellSouth Corporation Annual Report on Form 10-K for the
    year ended December 31, 2003)                                                                                                                                                                                    
|        | 10 | .58#        |  | Compensation arrangement with Ralph de la Vega                                                                                                                                                                                                                                                                                                                                               
|        | 10 | .59#        |  | Transition Agreement by and between BellSouth
    Corporation and Rafael de la Vega dated December 29, 2003                                                                                                                                                                                                                                                                                  
|        | 10 | .60*        |  | 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)
|        | 10 | .61#        |  | Cingular Wireless Long Term Compensation Plan
    amended and restated effective January 1, 2004                                                                                                                                                                                                                                                                                             

155



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PART IV




Item 15.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K


|        |    |             |  |                                                                                                                                                                                                                                                                                     
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .62         |  | Billing and Collections Services Operating
    Agreement by and among BellSouth Telecommunications, Inc. and
    Cingular Wireless LLC, effective September 1, 2003                                                                                                                 
|        | 10 | .63         |  | Work Order No. 03027350 Between Cingular
    Wireless LLC and SBC Services, Inc.                                                                                                                                                                                                    
|        | 10 | .64         |  | Investment Agreement, dated as of
    February 17, 2004, between BellSouth Corporation and SBC
    Communications 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(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*         |  | Amended and 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 | .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 the 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.



|   |                    
|-- | -------------------
|b. | Reports on Form 8-K



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | On October 21, 2003, we furnished a
    Form 8-K, reporting on Item 9, Regulation FD
    Disclosure, and Item 12. Results of Operations and
    Financial Condition, our financial results for the quarter ended
    September 30, 2003 and selected financial statements and
    operating data at and for the three and nine months ended
    September 30, 2003 for Cingular Wireless LLC and at and for
    the comparable date and period in 2002.

No other reports on
Form 8-K were filed during the fourth quarter of 2003.

c. We hereby file or furnish as part of this
Form 10-K the Exhibits listed in Item 15(a)(3) above



|   |                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------
|d. | The following financial statement schedule is
    filed herewith: Schedule II  Valuation and
    Qualifying Accounts

Schedules not listed above are omitted because
they are not required, or the required information is included
in our consolidated financial statements or notes thereto.

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PART IV




Item 15.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K


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 caused by delayed
    deliveries of infrastructure equipment and handsets, cost
    overruns, perceived service degradation as more spectrum is
    devoted to new technologies, customer dissatisfaction with new
    handsets that operate on multiple networks to accommodate our
    technology migration, equipment malfunctions and other factors;
| 
| | slow growth of our data services due to lack of
    popular applications, terminal equipment, advanced technology
    and other factors;                                                                                                                                                                                                                                                                                                        
| 
| | shortages and unavailability of spectrum for new
    services and geographic expansion;                                                                                                                                                                                                                                                                                                                                                         
| 
| | pervasive and prolonged adverse economic and
    employment conditions in the markets we serve;                                                                                                                                                                                                                                                                                                                                                 
| 
| | changes in available technology that make our
    existing technology obsolete or expensive to upgrade;                                                                                                                                                                                                                                                                                                                                         
| 
| | the final outcome of FCC proceedings, including
    rulemakings, and judicial review, if any, of such proceedings;                                                                                                                                                                                                                                                                                                                              
| 
| | impact of local number portability on our growth
    and churn rates, revenues and expenses;                                                                                                                                                                                                                                                                                                                                                    
| 
| | enactment of additional state and federal laws,
    regulations and requirements pertaining to our operations;                                                                                                                                                                                                                                                                                                                                  
| 
| | availability and cost of capital;                                                                                                                                                                                                                                                                                                                                                                                                               
| 
| | impact of any industry consolidation; and                                                                                                                                                                                                                                                                                                                                                                                                       
| 
| | the outcome of pending or threatened complaints
    and litigation.                                                                                                                                                                                                                                                                                                                                                                             

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PART IV







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/ RICHARD G. LINDNER

| |                              
| | -----------------------------
| |                              
| | Richard G. Lindner           
| | Chief Financial Officer      
| | (Principal Financial Officer)

Date: February 24, 2004

|                                                 |  |                                                                                                            |  |      
|------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------- |  | -----
|                                                 |  | Signature                                                                                                  |  | Title
|                                                 |  |                                                                                                            |  |      
|                                                
|/s/ STANLEY T. SIGMAN*Stanley T. Sigman*         |  | President and Chief Executive Officer
    (Principal Executive Officer)                                   
|                                                
|/s/ RICHARD G. LINDNER*Richard G. Lindner*       |  | Chief Financial Officer
    (Principal Financial Officer)                                                 
|                                                
|/s/ GREGORY T. HALL*Gregory T. Hall*             |  | 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/ 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/ RICHARD G. LINDNER*Richard G. Lindner
    (Individually and As Attorney-In-Fact)
    February 24, 2004 |  |      

158