UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~Form~~FORM 10-Q

(Mark One)
þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended June 30, 2004
		For the quarterly period ended March 31, 2006
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~~ file number 001-31673

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~~6000

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 whether the registrant is a large accelerated filer, an accelerated filer, ~~(as~~or ~~defined~~a innon-accelerated filer. See definition of “accelerated filer and large accelerated filers” in Rule 12b-2 of the Exchange Act.~~) Yes o No þ~~

Large accelerated filer o Accelerated filer o Non-accelerated filer þ

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

TABLE OF CONTENTS

		Page
PART I: FINANCIAL INFORMATION
Item 1.	Financial Statements		1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		2724
Item 4.	Controls and Procedures		2825
PART II: OTHER INFORMATION
Item 1.	Legal Proceedings		2926
Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities		29
Item 1A.	Risk Factors		26
Item 3.	Defaults upon Senior Securities		29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 4.	Submission of Matters to a Vote of Security Holders		29
Item 3.	Defaults upon Senior Securities		26
Item 5.	Other Information		29
Item 4.	Submission of Matters to a Vote of Security Holders		26
Item 6.	Exhibits and Reports on Form 8-K		30
Item 5.	Other Information		26
Signature			32
Item 6.	Exhibits		26
EX-10.65 Revolving Credit Agreement
Signature			28
EX-10.66 Interest Purchase Agreement
EX-31.1 CERTIFICATION OF PRESIDENT AND CEO
EX-31.1 302 Certification of CEO
EX-31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER
EX-31.2 302 Certification of CFO
EX-32.1 CERTIFICATION OF PRESIDENT AND CEO
EX-32.1 906 Certification of CEO
EX-32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER
EX-32.2 906 Certification of CFO

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)


Item 1.	Financial Statements (Unaudited)

CONSOLIDATED STATEMENTS OF ~~INCOME~~OPERATIONS

			Three Months Ended						Six Months Ended
			Three Months
			June 30,						June 30,
			Ended
			2003			2004			2003			2004
			March 31,
Operating revenues:
			2005			2006
	Service revenues		$	3,619		$	3,801		$	7,013		$	7,359
Operating revenues:
	Equipment sales			255			354			499			738
	Service revenues		$	7,419		$	8,005
Total operating revenues				3,874			4,155			7,512			8,097
	Equipment sales			810			975
Operating expenses:
		Total operating revenues		8,229			8,980
	Cost of services (excluding depreciation, included below, of $406 and $458, and $795 and $900, respectively)			890			943			1,711			1,865
Operating expenses:
	Cost of equipment sales			451			505			847			1,042
	Cost of services (excluding depreciation, included below, of $1,080 and $1,145, respectively)			2,144			2,320
	Selling, general and administrative			1,269			1,462			2,486			2,834
	Cost of equipment sales			1,295			1,327
	Depreciation and amortization			508			565			996			1,117
	Selling, general and administrative			3,001			2,846
Total operating expenses				3,118			3,475			6,040			6,858
	Depreciation and amortization			1,675			1,680
Operating income				756			680			1,472			1,239
		Total operating expenses		8,115			8,173
Other income (expenses):
Operating income				114			807
	Interest expense			(230	)		(199	)		(455	)		(397	)
Other income (expenses):
	Minority interest in earnings of consolidated entities			(35	)		(41	)		(59	)		(68	)
	Interest expense			(338	)		(297	)
	Equity in net loss of affiliates			(76	)		(92	)		(148	)		(197	)
	Minority interest in earnings of consolidated entities			(16	)		(41	)
	Other, net			7			1			33			5
	Equity in net income of affiliates			2			—
		Total other income (expenses)		(334	)		(331	)		(629	)		(657	)
	Other, net			20			9
Income before provision (benefit) for income taxes				422			349			843			582
		Total other income (expenses)		(332	)		(329	)
Provision (benefit) for income taxes				12			(2	)		14			4
Income (loss) before provision for income taxes				(218	)		478
Net income			$	410		$	351		$	829		$	578
Provision for income taxes				22			124
Net income (loss)			$	(240	)	$	354

See accompanying notes.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in in Millions) — (Continued)

Item 1. Financial Statements (Unaudited)

CONSOLIDATED BALANCE SHEETS

			~~December 31,~~	December 31,			~~June 30,~~	March 31,
			2003				2004
				2005				2006
			~~(Audited)~~	(Audited)
ASSETS
Current assets:
	Cash and cash equivalents		$	~~1,139~~$	472		$	~~101~~$	218
	Accounts receivable — net of allowance for doubtful accounts of $130 and $129			1,592				1,711
	Accounts receivable, net of allowance for doubtful accounts of $286 and $256				3,622				3,707
	Due from affiliates, net			—				134
	Inventories				536				668
	Inventories			273				209
	Prepaid assets				320				495
	Prepaid expenses and other current assets			296				290
	Current deferred tax assets				767				980
Total current assets				3,300				2,445
	Other current assets				332				345
Property, plant and equipment, net				10,939				11,019
		Total current assets			6,049				6,413
FCC licenses, net				7,769				9,204
Property, plant and equipment, net					21,745				21,817
Goodwill				849				849
Licenses, net					25,242				25,243
Other intangible assets, net				155				87
Goodwill					22,359				22,355
Investments in and advances to equity affiliates				2,288				2,232
Customer relationship intangibles, net					2,998				2,641
Other assets				226				217
Other intangible assets, net					174				166
Total assets			$	25,526			$	26,053
Other assets					752				709
LIABILITIES AND MEMBERS’ CAPITAL
		Total assets		$	79,319			$	79,344
Current liabilities:
LIABILITIES AND MEMBERS’ CAPITAL
	Debt maturing within one year		$	95			$	325
Current liabilities:
	Accounts payable			904				689
	Debt maturing within one year			$	2,036			$	2,193
	Due to affiliates, net			54				—
	Accounts payable				1,920				1,530
	Advanced billing and customer deposits			538				601
	Due to affiliates, net				54				37
	Accrued liabilities			1,596				1,474
	Advanced billing and customer deposits				946				998
Total current liabilities				3,187				3,089
	Accrued liabilities				5,052				4,698
Long-term debt:
		Total current liabilities			10,008				9,456
	Debt due to affiliates			9,678				9,678
Long-term debt:
	Other long-term debt, net of discount			2,914				2,913
	Debt due to members				6,717				6,717
Total long-term debt				12,592				12,591
	Other long-term debt, net of premium				12,623				12,589
Other noncurrent liabilities				604				650
		Total long-term debt			19,340				19,306
Total liabilities				16,383				16,330
Deferred tax liabilities, net					3,086				3,404
Minority interests in consolidated entities				659				660
Other noncurrent liabilities					1,364				1,272
Members’ capital:
		Total liabilities			33,798				33,438
	Members’ capital			8,664				9,242
Commitments and contingencies
	Receivable for properties to be contributed			(178	)			(178	)
Minority interests in consolidated entities					543				574
	Accumulated other comprehensive loss			(2	)			(1	)
Members’ capital:
Total members’ capital				8,484				9,063
	Members’ capital				44,988				45,342
Total liabilities and members’ capital			$	25,526			$	26,053
	Accumulated other comprehensive loss, net of taxes				(10	)			(10	)
		Total members’ capital			44,978				45,332
		Total liabilities and members’ capital		$	79,319			$	79,344

See accompanying notes.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in in Millions) — (Continued)

Item 1. Financial Statements (Unaudited)

CONSOLIDATED STATEMENTS OF CASH FLOW ~~FLOWS~~

				Six Months Ended
					Three Months
				June 30,
					Ended
				2003				2004
					March 31,
Operating activities
					2005				2006
Net income				$	829			$	578
Operating activities
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)					$	(240	)		$	354
	Depreciation and amortization				996				1,117
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Provision for doubtful accounts				110				167
	Depreciation and amortization					1,675				1,680
	Gain on disposition of businesses				(3	)			—
	Provision for doubtful accounts					118				73
	Minority interest in earnings of consolidated entities				59	16			68	41
	Equity in net loss of affiliates				148				197
	Equity in net income of affiliates					(2	)			—
	Changes in operating assets and liabilities:
	Amortization of debt discount (premium), net					(60	)			(52	)
		Accounts receivable			(152	)			(286	)
	Deferred income taxes					14				104
		Other current assets			(107	)			55
	Changes in operating assets and liabilities:
		Accounts payable and other current liabilities			(265	)			(275	)
		Accounts receivable				110				(157	)
		Pensions and post-employment benefits			39				43
		Inventories				205				(132	)
	Other, net				29				38
		Other current assets				28				(222	)
		Net cash provided by operating activities			1,683				1,702
		Accounts payable and other current liabilities				(565	)			(810	)
Investing activities
		Pensions and post-employment benefits				19				47
Construction and capital expenditures					(995	)			(1,117	)
	Other, net					1				5
Investments in and advances to equity affiliates, net					(161	)			(338	)
		Net cash provided by operating activities				1,319				931
Dispositions of assets					5				4
Investing activities
Acquisitions of businesses and licenses, net of cash received					(11	)			(1,449	)
Construction and capital expenditures						(971	)			(1,441	)
		Net cash used in investing activities			(1,162	)			(2,900	)
Receipts from (investments in) equity affiliates, net						(199	)			6
Financing activities
Proceeds from dispositions of assets						2,949				103
Net borrowings of commercial paper					—				300
Deposits for license purchase						(143	)			—
Net repayment of long-term debt					(31	)			(77	)
Investment in qualified trust designated for future capital expenditures						(2,145	)			—
Contributions from members					10				—
Other						50				(3	)
Net distributions to minority interests					(12	)			(63	)
			Net cash used in investing activities			(459	)			(1,335	)
		Net cash (used in) provided by financing activities			(33	)			160
Financing activities
Net increase (decrease) in cash and cash equivalents					488				(1,038	)
Net (repayments) borrowings under revolving credit agreement						(993	)			1,165
Cash and cash equivalents at beginning of period					908				1,139
Repayment of long-term debt and capital lease obligations						(6	)			(1,003	)
Cash and cash equivalents at end of period				$	1,396			$	101
Net distributions to minority interests						(4	)			(12	)
			Net cash (used in) provided by financing activities			(1,003	)			150
Net decrease in cash and cash equivalents						(143	)			(254	)
Cash and cash equivalents at beginning of period						352				472
Cash and cash equivalents at end of period					$	209			$	218

See accompanying notes.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in in Millions) — (Continued)

Item 1. Financial Statements (Unaudited)

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL &

Balance at December 31, 2003		$	8,484
	Net income		578
	Other comprehensive income		1
Balance at June 30, 2004		$	9,063

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ CAPITAL


Three Months Ended March 31, 2006:
Balance at December 31, 2005		$	44,978
	Net income		354

Balance at March 31, 2006		$	45,332

Three Months Ended March 31, 2005:
Balance at December 31, 2004		$	44,536
	Net loss		(240	)
	Other, net		(2	)

Balance at March 31, 2005		$	44,294

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


		Three Months
		Ended
		March 31,

Comprehensive Income:		2005			2006

Net income (loss)		$	(240	)	$	354
Other comprehensive loss:
	Foreign currency translation adjustment, net of taxes of ($3)		(4	)		—

Total comprehensive income (loss)		$	(244	)	$	354

See accompanying notes.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)


Item 1.	Financial Statements (Unaudited)

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.	Summary of Significant Accounting Policies


	*Basis of Presentation*

Cingular Wireless LLC (the Company) is a Delaware ~~limited~~ limited liability company formed in 2000 by SBC Communications Inc. (SBC) * and BellSouth Corporation (BellSouth) as the ~~operating~~ operating company for their U.S. wireless joint venture. ~~The~~AT&T and ~~parties~~BellSouth, ~~entered~~through ~~into~~their anwholly-owned ~~agreement~~subsidiaries, respectively, toown ~~form~~approximate ~~the~~60% ~~Company~~and in40% ~~April 2000,~~economic ~~subject~~interests toin the ~~regulatory approvals~~Company. Cingular Wireless Corporation (the Manager), which is directed equally by AT&T and BellSouth, 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), frequencies licensed by the Federal Communications Commission (FCC), and equipment to customers in 36 46 states~~. In addition~~, ~~the Company~~including ~~provides~~service ~~enhanced~~to ~~and~~all ~~interactive~~100 ~~data~~of ~~services over a~~the ~~proprietary~~largest ~~“Mobitex”~~U.S. metropolitan ~~network utilizing base stations and satellite transmission facilities~~areas. All of the Company’s operations, which primarily serve customers in 50the ~~states~~U.S., ~~the~~are conducted ~~District~~through ofsubsidiaries or joint ventures. Through ~~Columbia~~roaming arrangements with other carriers, ~~Puerto~~the ~~Rico~~Company provides its customers service in regions where it does not have network coverage and is thus able to serve customers in virtually the entire U.S. ~~Virgin~~and ~~Islands,~~over ~~are~~180 ~~conducted through~~foreign ~~subsidiaries or ventures~~countries.

OnIn October 2, ~~2000~~2004, ~~SBC and BellSouth (~~the ~~members)~~ ~~and~~Company ~~certain~~acquired ofAT&T ~~their subsidiaries contributed to the~~Wireless ~~Company~~Services, ~~substantially~~Inc. ~~all~~(AT&T ofWireless) ~~their~~for ~~U.S.~~aggregate ~~wireless assets in~~consideration ~~exchange~~of ~~for~~ approximately ~~60% and 40% economic interests~~$41, ~~respectively,~~000 in ~~the~~cash. ~~Company~~AT&T Wireless, ~~and~~which ~~the Company began doing~~has ~~business~~been ~~under~~renamed ~~the~~New “Cingular” ~~brand~~Wireless ~~name~~Services, ~~in January 2001~~Inc., ~~SBC~~will ~~and~~continue to ~~BellSouth~~be ~~share~~referred ~~joint~~to ~~voting~~herein ~~control~~as ofAT&T ~~the Company’s~~Wireless ~~operations~~and byis ~~virtue~~now ~~of their 50/50 ownership of,~~a ~~and~~direct ~~the~~wholly-owned ~~terms~~subsidiary of the ~~stockholders’~~Company. ~~agreement~~The ~~pertaining~~operations ~~to,~~of ~~Cingular~~AT&T Wireless ~~Corporation.~~are ~~All~~integrated ~~assets~~with ~~and~~those ~~liabilities contributed~~of to the ~~venture have been recorded at their historical basis of accounting. The~~ Company, ~~recorded estimated~~and ~~receivables~~the ~~for~~business ~~wireless~~is ~~operations~~conducted tounder ~~be contributed to~~ the ~~Company~~ ~~after~~“Cingular” ~~the formation date~~brand name.

The consolidated financial statements have been ~~prepared~~ prepared pursuant to the rules and regulations of the Securities ~~and~~ and Exchange Commission (SEC) that permit reduced ~~disclosure~~ disclosure for interim periods. Management believes ~~that~~ the ~~consolidated~~ consolidated financial statements include all adjustments (consisting only of normal recurring accruals) necessary to present fairly the results for the interim periods shown. The results for the interim periods are not necessarily indicative of results for the full year. These interim financial statements should be read in conjunction with the consolidated financial statements of the Company and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2003~~2005.

~~Asset~~Income ~~Retirement Obligations~~Taxes

InThe June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations (SFAS 143). This statement requires the Company tois ~~record~~not ~~the fair value of~~ a ~~liability~~taxable entity for anfederal ~~asset retirement~~income ~~obligation in the period in which it is incurred and~~tax ~~capitalize that amount as part of the book value of the long-lived asset~~purposes. ~~Over time~~Rather, ~~the~~federal ~~liability~~taxable isincome ~~accreted~~or toloss ~~its present value each period, and the capitalized cost~~ is ~~depreciated~~ ~~over~~included in the ~~useful~~Company’s ~~life~~respective ofmembers’ ~~the~~federal ~~related~~income ~~asset~~tax returns. ~~Upon settlement of the liability~~However, the Company’s ~~either~~provision ~~settles the obligation~~ for ~~its~~income ~~recorded amount or incurs a gain or loss.~~taxes ~~This~~includes ~~statement~~federal isand ~~effective~~state ~~for~~income ~~financial~~taxes ~~statements~~ for ~~fiscal years~~certain ~~beginning~~of ~~after June 15, 2002. The Company adopted~~its ~~this new pronouncement effective January 1, 2003.~~corporate

~~The~~* On ~~Company~~November 18, ~~has~~2005, ~~certain~~SBC ~~legal~~acquired ~~obligations~~through ~~related~~merger toAT&T ~~network~~Corp. ~~infrastructure,~~and ~~principally~~changed ~~tower~~the ~~assets~~name of the surviving entity to AT&T Inc. When used herein, ~~which~~“AT&T” ~~fall~~will refer ~~within~~to the ~~scope~~surviving ofentity ~~SFAS~~and, ~~143~~prior to November 18, 2005, to SBC. ~~These~~AT&T ~~legal~~Corp. ~~obligations~~will ~~include~~be referred to as “Old ~~conditional~~AT&T” ~~obligations~~prior to ~~remediate~~November 18, ~~leased~~2005. ~~land~~In onMarch ~~which~~2006, AT&T and BellSouth agreed to merge. The transaction has been approved by the Board of Directors of each company. It is ~~Company’s~~subject ~~network~~to ~~infrastructure~~approval ~~assets~~by ~~are~~the ~~located~~shareholders of each of AT&T and BellSouth, review by the U.S. Department of Justice (DOJ), approval by the Federal Communications Commission (FCC) and other regulatory authorities and satisfaction of other conditions.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)


Item 1.	Financial Statements (Unaudited)

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~The~~subsidiaries, ~~significant~~as ~~assumptions~~well ~~used~~as infor ~~estimating the~~certain ~~Company’s~~states ~~asset~~which ~~retirement~~impose ~~obligations include the~~income ~~following:~~taxes aupon ~~50%~~non-corporate ~~probability~~legal ~~that~~entities. After the ~~Company’s network~~acquisition, ~~infrastructure~~AT&T ~~assets~~Wireless ~~with~~contributed ~~asset~~the ~~retirement~~majority ~~obligations~~of ~~will~~its beassets and ~~remediated~~liabilities atto ~~the~~Cingular ~~lessor’s~~Wireless II, ~~directive~~LLC (CW II), ~~expected~~which ~~settlement~~it ~~dates~~owns ~~that~~jointly ~~coincide~~ with ~~lease~~Cingular ~~expiration~~Wireless ~~dates~~LLC. ~~plus~~In ~~estimates of~~exchange ~~lease~~for ~~extensions,~~the assets ~~remediation~~and ~~costs~~liabilities ~~that~~contributed ~~are~~to ~~indicative~~CW II, ofAT&T ~~what~~Wireless ~~third~~received ~~party~~a ~~vendors~~43% ~~would~~ownership ~~charge~~interest ~~the~~in ~~Company~~CW II, ~~to remediate~~from ~~the~~which ~~sites,~~any ~~expected~~income ~~inflation~~(loss) ~~rates~~is ~~that~~allocated ~~are~~and ~~consistent~~is ~~with historical~~subject ~~inflation~~to ~~rates~~ federal and ~~credit-adjusted~~state ~~risk-free~~income ~~rates that~~taxes. ~~approximate~~The ~~the~~remaining ~~Company’s~~income ~~incremental~~(loss) ~~borrowing~~from ~~rates.~~CW II ~~The~~is ~~adoption~~allocated ofto ~~SFAS~~the ~~143~~Company ~~did~~and ~~not~~flows ~~have~~through ato ~~material~~the ~~impact~~members ~~on the~~who ~~Company’s~~are ~~individual~~taxed ~~financial~~at ~~statement~~their ~~line~~level ~~items~~pursuant orto ~~its consolidated~~federal ~~financial~~and ~~statements~~state ~~taken~~income tax ~~as a whole~~laws.

~~Comprehensive~~ The ~~Income~~Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities, applying enacted statutory rates. The Company provides valuation allowances for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

~~Comprehensive~~The ~~income~~Company’s effective tax rate for the ~~Company~~three ~~approximates~~months ended ~~net~~March 31, ~~income~~2006 ~~for~~was ~~all~~25.9%. ~~periods~~This ~~presented.~~rate ~~There~~varies ~~are~~from nothe expected ~~significant~~federal statutory rate of 35% primarily as a result of ~~components~~the exclusion from the Company’s income tax provision of operating ~~other~~results ~~comprehensive~~which are wholly allocated to its respective members’ federal income tax returns. The income tax provision for the three months ended March 31, 2006 also includes provisions for income taxes in certain state and local jurisdictions.

~~Reclassifications~~ The Company incurred income tax expense in the quarter ended March 31, 2005 despite a pre-tax loss as a result of the exclusion from the Company’s income tax provision of operating losses which are wholly allocated to its respective members’ federal income tax returns. Income was generated at certain taxable subsidiaries during the first quarter of 2005. The income tax provision for the three months ended March 31, 2005 also includes income tax expense related to state income tax law changes and the establishment of valuation allowances.

The income statement for the three and six months ended June 30, 2003 has been reclassified to reflect billings to the Company’s customers for the Universal Service Fund (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 the three and six months ended June 30, 2003 were $88 and $136, respectively.


2.	Intangible Assets

Summarized below are the carrying values for the major classes ~~of intangible assets that are amortized under SFAS~~ ~~No. 142, Goodwill and Other Intangible Assets (SFAS 142), as well as the carrying values~~ of ~~those~~ intangible assets ~~that are not amortized.~~:

							~~(Audited)~~	(Audited)
							December 31, 2003							June 30, 2004
								December 31, 2005							March 31, 2006
							~~Gross~~	Gross						~~Gross~~	Gross
							~~Carrying~~	Carrying		~~Accumulated~~	Accumulated			~~Carrying~~	Carrying		~~Accumulated~~	Accumulated
				~~Useful Lives~~	Useful Lives		~~Amount~~	Amount		~~Amortization~~	Amortization			~~Amount~~	Amount		~~Amortization~~	Amortization
Intangible assets subject to amortization:
	FCC licenses used in Mobitex business				4 years		$	28		$	(7	)		$	28		$	(10	)
	Customer relationship intangibles					5 years		$	5,316		$	(2,318	)		$	5,003		$	(2,362	)
	Customer lists				5 years			1,070			(920	)			1,068			(985	)
	Other intangibles					1-18 years			306			(134	)			301			(137	)
	Other				3-5 years			147			(143	)			147			(144	)
			Total					$	5,622		$	(2,452	)		$	5,304		$	(2,499	)
		Total					$	1,245		$	(1,070	)		$	1,243		$	(1,139	)
Intangible assets not subject to amortization:
Intangible assets not subject to amortization:
		FCC (U.S.) licenses						$	25,242		$	—			$	25,243		$	—
	FCC licenses						$	7,748		$	—			$	9,186		$	—
		Goodwill						$	22,359		$	—			$	22,355		$	—
	Goodwill							849			—				849			—

InThe ~~addition~~changes toin the ~~SFAS 142~~carrying ~~intangible assets~~value ~~noted~~of ~~above,~~goodwill for the ~~Company recorded $1 in 2003 of~~quarter ~~intangible~~ended ~~assets~~March 31, in2006, ~~connection~~which ~~with~~totaled ~~the~~$6, ~~recognition~~are ~~of an~~largely ~~additional~~attributable ~~minimum~~to ~~liability~~adjustments ~~for~~to ~~its~~purchase ~~Supplemental~~price ~~Retirement~~allocation of ~~Plans,~~AT&T asWireless ~~required~~assets byand ~~SFAS No. 87, Employers’~~liabilities ~~Accounting for Pensions.~~

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)


Item 1.	Financial Statements (Unaudited)

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Aggregate amortization expense:
	For the six months ended June 30, 2004		$	79
	For the three months ended March 31, 2006		$	365
Estimated amortization expense:
	For the remainder of 2004		$	37
	For the remainder of 2006		$	950
	For the years ending December 31,
	For the years ending December 31, 2007			955
		2005		51
		2008		603
		2006		13
		2009		237
		2007		2
		2010 and thereafter		60
		2008		1
			$	2,805
			$	104

3. For ~~Investments~~the inthree ~~and~~months ~~Advances~~ended toMarch 31, ~~Equity~~2005, ~~Affiliates~~amortization expense was $506.

~~The~~In ~~Company~~addition ~~has~~to ~~investments~~the inintangible ~~affiliates~~assets ~~which do~~noted ~~not~~above, ~~meet~~ the ~~criteria~~Company had ~~for~~$2 ~~consolidation~~of ~~under~~intangible ~~FASB Interpretation~~assets ~~No.~~at December 4631, ~~Consolidation~~2005 ~~of Variable~~and ~~Interest Entities (FIN~~March ~~46)~~31, ~~nor~~2006 ~~for~~in ~~which~~connection with the ~~Company has~~recognition aof ~~controlling~~an additional ~~interest.~~minimum ~~These~~liability ~~investments are accounted~~ for ~~under~~ ~~the~~its ~~equity~~bargained ~~method~~pension ~~of accounting. The most significant of~~plan ~~these~~and/or ~~investments~~other isunqualified ~~GSM~~benefit ~~Facilities,~~plans ~~LLC~~as ~~(GSMF),~~required aby ~~jointly-controlled infrastructure venture with T-Mobile USA, Inc~~SFAS No. 87, ~~(T-Mobile)~~Employers’ ~~for~~Accounting ~~networks in the New York City metropolitan~~for ~~area~~Pensions, ~~California and Nevada~~(SFAS 87).

~~Investments~~3. inSalmon ~~and~~PCS ~~advances to equity affiliates consist of the following:~~ LLC

	(Audited)
	December 31,		June 30,
	2003		2004
Investment in GSMF	$	2,253	$	2,195
Other		35		37
	$	2,288	$	2,232

In November 2000, the Company and Crowley Digital Wireless, LLC (Crowley Digital) entered into an agreement, pursuant to which Salmon PCS LLC (Salmon) was formed to bid as a “very small business” for certain 1900 MHz band PCS licenses auctioned by the FCC. The Company granted Crowley Digital the right to put its approximate 20% economic interest in Salmon to the Company at a cash price equal to Crowley Digital’s initial investment plus a specified rate of return. The Company’s maximum liability for the purchase of Crowley Digital’s interest in Salmon under this put right is $225. The fair values of this put obligation, estimated at $172 and $176 as of December 31, 2005 and March 31, 2006, respectively, are included in “Accrued liabilities” in the consolidated balance sheets for the respective periods. Crowley Digital has exercised its put right pursuant to which the Company expects to pay approximately $186 should the put close in October 2006, as the Company anticipates.

~~GSMF~~4. Debt

~~The~~Revolving ~~Company~~Credit and T-Mobile 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 that are mutually agreed upon by the parties and that 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. Agreement

~~Capital~~Under ~~contributions~~a torevolving ~~GSMF~~credit ~~are~~agreement, ~~generally determined~~AT&T byand BellSouth provide the Company’s ~~proportionate~~unsubordinated ~~share~~short-term financing on a pro rata basis at an interest rate of LIBOR plus 0.05% for the ~~annual~~Company’s ~~capital~~ordinary ~~expenditure~~course ~~requirements~~operations based onupon ~~each~~the ~~party~~Company’s ~~incremental~~budget ~~growth~~and inforecasted ~~network~~cash ~~usage,~~needs. ~~and~~The ~~such~~revolving ~~contributions~~credit ~~are~~agreement ~~accounted~~provides ~~for~~that asin anthe ~~increase~~event tothat the Company’s ~~investment.~~has available ~~For~~cash ~~the~~(as ~~three~~defined) ~~months~~on ~~ended June 30~~any business day, ~~2003~~such ~~and~~amount shall ~~2004,~~first be applied to the ~~Company~~repayment ~~made~~of ~~net~~the ~~capital~~revolving loans, ~~contributions~~and any remaining excess shall then be applied to ~~GSMF~~the repayment of ~~$101~~the Subordinated Notes (member loans) from AT&T and BellSouth ~~$44,~~at ~~respectively.~~month ~~For~~end if the ~~six~~Company does not then require a ~~months~~cash ~~ended~~advance ~~June~~under the agreement. As of December 3031, ~~2003~~ 2005 and ~~2004~~March 31, 2006, the Company ~~made~~had ~~net~~an outstanding balance ~~capital~~of $511 and $1,676, respectively, under the revolving credit agreement.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)


Item 1.	Financial Statements (Unaudited)

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~contributions~~Debt ~~to GSMF of $102 and $138, respectively. The Company had a contractual commitment to contribute cash of $225 to GSMF in 2003, which was made by the Company in the second half of 2003.~~ Repayment

The Company ~~incurs~~repaid ~~and charges to GSMF certain network operating costs. The monthly operating expenses of GSMF~~$1, ~~including~~000 ~~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~~7.35% ~~Through a separate reciprocal home roaming agreement, the Company and~~ AT&T~~-Mobile~~ ~~charge~~Wireless ~~each other~~Services, ~~for usage that is not in the same proportion as the spectrum-based allocations~~Inc. ~~This~~unsecured ~~usage charge is primarily based upon the Company’s~~ and ~~T-Mobile’s~~unsubordinated ~~share~~Senior ofNotes ~~the total minutes of use~~ on the ~~respective networks. These charges for~~maturity ~~network~~date, ~~services~~March 1, ~~are included in “Cost of services” in the consolidated statements of income~~2006. ~~These transactions are~~ ~~summarized as follows:~~

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2003		2004		2003		2004
Network operating costs charged to GSMF	$	77	$	89	$	156	$	180
Network services received based on usage		62		49		121		121


5.	Related Party Transactions

~~GSMF~~These ~~incurs~~consolidated ~~net~~financial ~~losses~~statements ~~due~~include tocharges ~~depreciation and~~from ~~interest expense, which are not reimbursed by the Company or~~ AT&T~~-Mobile.~~ ~~For the three months ended June 30, 2003~~ and ~~2004,~~ ~~the~~BellSouth ~~Company~~for ~~recorded~~certain ~~equity~~expenses inpursuant ~~the~~to ~~net loss of GSMF of $77~~various ~~and $90, respectively~~agreements. ~~For the six months ended June 30,~~ ~~2003 and 2004, the Company recorded equity in the net loss of GSMF of $149 and $196, respectively. At June 30, 2004, the Company’s economic interest in GSMF approximated 70%.~~

~~Summarized~~In addition to the affiliate transactions described elsewhere in these consolidated financial ~~information~~statements, other significant transactions with ~~respect~~the ~~to GSMF~~Company’s ismembers are as follows:

	Three Months						~~Six Months~~
	Ended						~~Ended~~
	June 30,						June 30,
	March 31,
Income Statement Information	2003			2004			2003			2004
Type of Services(1)	2005			2006
Revenues	$	112		$	134		$	216		$	262
Agent commissions and compensation	$	20		$	14
Costs and expenses (excluding depreciation)		109			130			211			262
Interconnect and long distance		282			464
Depreciation expense		105			144			205			284
Telecommunications and other services		57			107
Operating loss		(102	)		(140	)		(200	)		(284	)
Interest expense		4			5			9			10
Net loss		(106	)		(145	)		(209	)		(294	)

In(1) ~~May~~See ~~2004,~~Note 11 to the Company’s ~~and~~audited ~~T-Mobile~~consolidated ~~agreed~~financial ~~to end~~statements ~~their~~included ~~GSMF~~in ~~network~~Item ~~infrastructure~~8 ~~joint~~in ~~venture contingent upon~~ the ~~closing of the~~ Company’s ~~acquisition~~Annual ofReport ~~AT&T Wireless~~on ~~Services,~~Form ~~Inc.~~10-K ~~(AT&T~~for ~~Wireless).~~the ~~See~~year ~~Note~~ended 6December 31, 2005 for a further ~~details~~description of ~~the agreement~~services.

The Company had receivables from affiliates of $156 and $160 and payables to affiliates of $210 and $197 at December 31, 2005 and March 31, 2006, respectively.


6.	Acquisition-Related and Integration Costs

The Company is executing plans to exit certain activities and dispose of certain assets of AT&T Wireless to fully integrate the acquired operations with those of the Company. These plans affect many areas of the combined company, including sales and marketing, network, information technology, customer care, supply chain and general and administrative functions. In connection therewith, the Company expects to continue to incur significant costs over the next several quarters associated with such integration activities. Plans affecting the Company’s integration of retail stores, administrative space and the network have been completed and approved by management, resulting in adjustments to the purchase price allocation for the acquired assets and assumed liabilities of AT&T Wireless and the need to shorten the useful lives of certain network and other property, plant and equipment.


	*Network Integration Plan — Phase I*

In June 2005, the Company finalized a portion of its plan to integrate certain acquired network assets of AT&T Wireless. The plan primarily addressed certain TDMA network equipment in locations where the Company and AT&T Wireless had overlapping TDMA network assets and AT&T Wireless’ UMTS (Universal Mobile Telephone Service) assets. The plan included decommissioning TDMA assets (approximately 85% former AT&T Wireless assets and 15% legacy Cingular assets) and replacing former AT&T Wireless UMTS assets by the end of 2005.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)


Item 1.	Financial Statements (Unaudited)

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

4 The Company also determined to decommission and replace certain vendor-specific Cingular network assets in three markets as part of its overall network integration efforts, resulting in a net increase of $257 in depreciation expense for 2005, including $35 for the three months ended March 31, 2005. ~~Related~~The ~~Party~~net ~~Transactions~~increase for the three months ended March 31, 2006 was $15.

InNetwork ~~addition~~Integration toPlan ~~the~~— ~~affiliate~~Phase transactions with equity investees described elsewhere in these consolidated financial statements, other significant transactions with related parties, principally the Company’s members, are as follows: II

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
Type of Service(1)	2003		2004		2003		2004
Agent commissions and compensation	$	37	$	19	$	52	$	36
Interconnect and long distance		195		218		381		425
Other services		19		24		39		49
Interest expense on debt due to affiliates(2)		181		145		360		290

In October 2005, the Company approved the second and final phase of its network integration plan. This plan complemented the activities undertaken in June 2005 to eliminate redundant network facilities that arose upon the purchase of AT&T Wireless. In connection with the second phase of the network integration plan, the Company is integrating its GSM (Global System for Mobile Communication) networks, decommissioning redundant cell sites and core network elements and swapping vendor equipment in various markets to have like equipment in each operating market. The plan is anticipated to result in decommissioning approximately 7,600 cell sites, of which approximately 5,700 were acquired from AT&T Wireless. Certain legacy Cingular assets that will be decommissioned as a result of the second phase of the network integration plan were depreciated on an accelerated basis beginning in the fourth quarter of 2005. For the three months ended March 31, 2006, the related incremental depreciation associated with those legacy assets amounted to $75. The Company has currently executed approximately 50% of the activities associated with its network integration plans and expects to be substantially completed by December 31, 2006. During the first quarter of 2006, the Company recorded immaterial expenses related to revised integration estimates.

(1)	See Note 11 to the Company’s audited consolidated financial statements included in Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 for a further description of services.
(2)	See Note 8 to the Company’s audited consolidated financial statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 for further discussion related to interest expense on debt due to affiliates.


	*Retail Stores and Administrative Space Integration Plans*

The Company ~~had~~also ~~receivables~~finalized ~~from~~plans ~~affiliates~~to ~~of $81~~integrate ~~and~~the ~~$295~~retail stores and ~~payables~~administrative tospace ~~affiliates~~requirements offor ~~$135~~the sales/distribution and ~~$161~~corporate ~~at December 31,~~real ~~2003~~estate ~~and~~functions in June ~~30,~~ ~~2004,~~2005. ~~respectively,~~Legacy ~~primarily~~Cingular ~~with~~assets ~~SBC,~~affected ~~BellSouth~~by ~~and~~the ~~GSMF~~integration ~~(see~~plans ~~also~~are depreciated ~~Note~~on 3)an accelerated basis through their estimated remaining lives. The impact on depreciation expense is not material. As of March 31, 2006, these plans are substantially completed.

5.Exit ~~Employee~~Costs ~~Benefits~~Recorded Under Integration Plans

~~Long~~ In addition to the revaluation of assets, the Company incurred and recorded certain costs and accruals associated with the integration plans in accordance with the requirements of Emerging Issues Task Force Issue No. 95-~~Term~~3, ~~Compensation~~Recognition of ~~Plan~~Liabilities in Connection with a Purchase Business Combination (EITF 95-3), Statement of Financial Accounting Standards No. 146, Accounting for Costs Associated with Exit or Disposal Activities (SFAS 146), and SFAS No. 112, Employers’ Accounting for Postemployment Benefits (SFAS 112).

The ~~Cingular~~costs ~~Wireless~~presented ~~Long-Term~~in ~~Compensation Plan (~~the ~~Plan),~~table asbelow ~~amended,~~were ~~provides~~recorded ~~for~~under EITF 95-3 ~~incentive compensation~~ to ~~eligible~~ ~~participants~~exit ~~over~~certain ~~periods~~AT&T ~~that~~Wireless ~~are~~activities ~~two~~and resulted ~~years~~in oradjustments ~~longer in~~to the ~~form~~purchase ofprice ~~performance~~allocation ~~units,~~for assets ~~stock~~acquired ~~appreciation units~~ and ~~restricted~~ ~~stock~~liabilities ~~units.~~assumed ~~Awards granted~~ in ~~any~~the ~~particular~~acquisition ~~year~~of ~~may~~AT&T beWireless. ~~comprised~~The ofmajority ~~any combination~~ of ~~award~~the ~~type~~costs ~~provided~~recognized ~~for~~related ~~under~~to ~~the~~termination ~~Plan~~fees asassociated ~~approved~~with byleases, ~~the~~equipment ~~plan administrator. All awards~~removal ~~are~~costs, ~~ultimately~~other ~~settled~~contractual inarrangements ~~cash.~~and ~~Grants~~employee ~~are~~termination benefits ~~made~~related into ~~April~~former ofAT&T ~~the award~~Wireless ~~year~~employees.

~~Performance~~Similar ~~units~~integration ~~are~~costs ~~tied~~incurred torelated the achievement of specified financial objectives over a three-year performance period. The units have a stated value of $50 (whole dollars). Performance units granted at inception of a three-year performance period are payable in the first quarter following the performance period, with payouts ranging from 0% to ~~200%~~legacy ofCingular ~~the~~activities ~~stated~~were ~~value~~recorded ~~of the performance units for years prior to 2004 and 0% to 150% for 2004 grants. The number of performance units granted~~ under ~~the~~SFAS 146 ~~Plan total approximately 1.2 million units in 2002~~ and ~~540,000 units in 2003. During the six months ended June~~SFAS ~~30, 2004, the Company granted approximately~~112 ~~729,000~~as ~~performance~~“Cost ~~units. As~~ of ~~June 30,~~services” ~~2004,~~and the Company has approximately 2.1 million outstanding performance units. Expense is accrued ratably throughout the performance period based upon management’s estimate of the compensation that will ultimately be earned under the Plan. As performance is monitored against the financial objectives that have been established throughout the respective three-year performance periods“Selling, ~~management~~general ~~may revise its estimate of the compensation~~and ~~that~~administrative” ~~will~~in ~~ultimately be earned under~~ the ~~Plan~~consolidated ~~and adjust its~~statements ~~accrual accordingly.~~

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)


Item 1.	Financial Statements (Unaudited)

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Stock appreciation units granted under the Plan, which approximate 3.3 million in total, are indexed to an underlying share~~ of ~~BellSouth or SBC common stock~~income. ~~Each~~Under stock appreciation unit has a grant price equal to the closing price of BellSouth or SBC stock, as the case may be, based on the closing New York Stock Exchange price on the grant date. Stock appreciation units were granted to eligible employees on AprilSFAS 1146, ~~2003,~~expenses ~~50%~~are ofrecognized ~~which vest two years after the grant~~when ~~date~~those ~~and~~costs ~~the~~have ~~remaining~~been ~~50% of which vest three years following the grant date. As of June 30~~incurred, ~~2004,~~while ~~the~~expenses ~~Company~~are ~~had~~recognized ~~approximately~~under ~~3.0~~SFAS ~~million~~112 ~~outstanding~~when ~~stock~~such ~~appreciation units.~~costs ~~The~~are ~~units~~probable ~~expire~~and ~~10 years from the grant date~~estimable. ~~Compensation~~See ~~cost is recognized over~~ the ~~vesting~~SFAS 146 ~~period~~table ~~based upon~~below ~~the~~for ~~increase~~respective inbalances ~~the fair value of the stock appreciation~~and ~~units at the end of each reporting period~~activity.

~~Restricted~~In ~~stock~~connection ~~units~~with ~~granted under~~ the ~~Plan~~integration ~~are indexed to an underlying share~~ of ~~BellSouth~~AT&T orWireless, ~~SBC common stock. The value of~~ the ~~restricted stock units will be paid in cash to~~ ~~holders~~Company inidentified ~~March~~approximately ~~2007~~2,400 ~~based~~legacy onCingular ~~the average of the closing stock~~employees ~~prices of BellSouth~~ and ~~SBC~~2,200 ~~common~~former ~~stock~~AT&T ~~for~~Wireless ~~the~~employees ~~last~~to ~~ten trading days of February 2007. Dividend equivalents will~~ be ~~paid~~terminated ~~annually~~during at2005 ~~the same rate as the dividend received by all SBC~~ and ~~BellSouth~~2006 ~~shareholders,~~of ~~respectively.~~which ~~During~~approximately ~~the six months ended June 30~~2,100 ~~2004, the Company granted approximately 342,000 BellSouth restricted stock units~~ and ~~381~~1,~~000~~800 ~~SBC restricted stock units with an aggregate value on the grant date~~ of ~~approximately $19. As of June 30, 2004, the Company had~~ ~~approximately~~these ~~700~~employees,~~000~~ ~~outstanding restricted stock units. The value of the restricted stock units~~respectively, ~~adjusted~~left ~~for~~their ~~changes~~positions inas ~~the value~~ of ~~the underlying BellSouth and SBC common stock~~ March 31, ~~is recognized as compensation expense over the three year vesting period~~2006.

The ~~impact~~following oftable ~~these~~displays ~~units~~the current period activity and balances recorded under EITF 95-3, which are reflected in “Accrued liabilities” in the consolidated balance sheets. Due to ~~results~~ongoing monitoring of the integration plan, the ~~operations~~Company ~~was~~recorded ~~not~~additional ~~material~~accruals for extended lease notification periods and accrual reductions related to the ongoing ~~three~~contract termination progress. The impact of increases to the accrual and ~~six~~adjustments ~~months~~decreasing ~~ended~~the accruals in the ~~June 30,~~table ~~2003~~below are reflected as expense in the current period Consolidated Statement of Operations and ~~2004~~goodwill in the Consolidated Balance Sheet, respectively.

6. Other Business Matters


	December 31,										March 31,
EITF 95-3 Summary	2005		Accruals		Payments			Adjustments			2006

Lease terminations	$	262	$	21	$	(8	)	$	(17	)	$	258
Severance		15		—		(4	)		—			11
Equipment removal costs		185		—		(10	)		—			175
Other		3		—		—			—			3

Total	$	465	$	21	$	(22	)	$	(17	)	$	447

~~AT&T~~ A ~~Wireless~~summary ~~Acquisition~~of total expected costs to be incurred under SFAS 146 for the integration plans, and the amounts incurred through and for the three months ended March 31, 2006, is presented in the table below. The estimate of costs expected to be incurred and current period costs reflect a $7 reduction due to the impact of contract termination negotiations.

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 in cash. The closing of the acquisition is expected to occur in the fourth quarter of 2004 and is subject to Federal Communications Commission (FCC) and Hart-Scott-Rodino approvals and customary closing conditions. In May 2004, AT&T Wireless shareholders approved the transaction. SBC and BellSouth have committed to provide equity funding for the purchase. Proportionate equity ownership and management control of Cingular will remain unchanged after the acquisition. This transaction will be accounted for as a purchase in accordance with SFAS No. 141, Business Combinations.


	Estimate of Expenses		Cumulative Expenses		Expenses		Cumulative Expenses
	Expected to be		Incurred through		Incurred		Incurred through
Summary of SFAS 146 Costs	Incurred		December 31, 2005		During 2006		March 31, 2006

Contract termination costs:
Lease terminations	$	131	$	36	$	12	$	48
Agent terminations		10		—		4		4
Other contract terminations		6		—		—		—
Equipment removal costs		126		15		3		18
Other		4		3		2		5

Total	$	277	$	54	$	21	$	75

Acquisition of NextWave Licenses

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

Termination of GSMF Network Infrastructure Joint Venture

In May 2004, the Company and T-Mobile entered into an agreement, subject to regulatory and other customary closing conditions and the closing of the Company’s acquisition of AT&T Wireless, to dissolve

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)


Item 1.	Financial Statements (Unaudited)

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~GSMF~~The ~~and~~following ~~distribute~~table ~~the~~displays ~~related network assets. Under~~ the ~~terms~~SFAS 146 ofactivity ~~the agreement, the Company will sell its~~and ~~ownership~~balances of the ~~California/Nevada~~restructuring ~~network~~liabilities ~~assets~~associated towith ~~T-Mobile~~the ~~for~~integration ~~$2,300~~plans ~~in cash,~~ which isare ~~net~~reflected ofin ~~cash payments required by~~“Accrued ~~the~~liabilities” ~~dissolution.~~on ~~The ownership of~~ the ~~New~~consolidated ~~York~~balance ~~City network assets will return to T-Mobile~~sheet. ~~The transaction is expected to~~Activity ~~close~~under noSFAS 112 ~~later~~for ~~than~~ the ~~first~~three ~~quarter~~months ofended ~~2005. The Company will~~March 31, ~~retain~~2006 ~~the~~was ~~right to utilize the California/Nevada and New York City networks during a four year transition period and will guarantee to purchase a minimum number of minutes over this term~~immaterial. ~~The Company and T-Mobile will retain all respective~~ ~~customers in each market.~~

In connection with the dissolution of the venture, the Company and T-Mobile will exchange spectrum at a future date. As agreed to as part of the original joint venture agreement, the Company will receive 10 megahertz (MHz) of spectrum in New York City and T-Mobile will receive 5 MHz of spectrum in nine basic trading areas (BTAs) in California and Nevada, the largest of which is San Diego. The Company also agreed to sell 10 MHz of spectrum to T-Mobile in each of the San Francisco, Sacramento and Las Vegas BTAs for $180. T-Mobile will also have the option to purchase an additional 10 MHz of spectrum in the Los Angeles and San Diego BTAs from the Company within two years, under certain circumstances.


	SFAS 146

Balance at December 31, 2005	$	37
Additions		21
Payments		(6	)

Balance at March 31, 2006	$	52

~~The Company has not yet determined the amount of the gain from these transactions~~7. ~~The~~Commitments ~~determination of the amount of the gain is subject to valuation of the spectrum received in the spectrum exchange~~ and determination of the carrying amount of the Company’s investment in GSMF at the date of closing. The closing of the transactions is contingent upon the closing of the Company’s acquisition of AT&T Wireless. Contingencies

~~7. Subsequent Events~~Commitments

~~Triton~~ The ~~PCS~~Company ~~Agreement~~has unconditional purchase commitments for advertising and marketing, computer equipment and services, roaming, long distance services, network equipment and related maintenance and software development and related maintenance. These commitments totaled approximately $1,403 at March 31, 2006. Included in this amount are commitments aggregating $109 to AT&T, BellSouth and their affiliates for telecommunications and other services.

In ~~July~~connection ~~2004,~~with the termination of the Company,’s ~~AT&T~~GSMF network ~~Wireless~~infrastructure joint venture with T-Mobile, ~~and~~the Company ~~Triton~~made ~~PCS~~a ~~signed~~$1,200 commitment to purchase a ~~non-binding~~minimum ~~letter~~number of ~~intent~~minutes from ~~providing~~T-Mobile ~~for~~over a ~~the~~four-year ~~acquisition~~transition byperiod. ~~the~~This ~~Company~~commitment became effective in January 2005, and approximately $409 of ~~wireless~~the ~~properties~~purchase incommitment ~~Virginia~~remained inoutstanding ~~exchange~~as ~~for~~of ~~AT&T~~March 31, ~~Wireless~~2006. ~~properties~~The Company believes that the rates reflected in ~~North~~this purchase commitment ~~Carolina~~are ~~and~~indicative ~~Puerto~~of ~~Rico.~~market Inrates ~~addition,~~based upon the ~~Company~~volume ~~would~~of ~~pay~~the ~~Triton~~commitment ~~PCS~~and ~~$175~~the inlength ~~cash~~of the transition period.

~~Additionally,~~See ~~AT&T~~Note 15 ~~Wireless and Triton PCS have agreed~~ to ~~terminate~~the ~~their stockholders~~Company’s ~~agreement,~~audited consolidated ~~which~~financial ~~includes~~statements ~~termination~~included ofin anItem 8 ~~exclusivity arrangement~~ in ~~return~~ ~~for~~ the ~~surrender of AT&T Wireless~~ Company’s ~~equity~~Annual inReport on ~~Triton~~Form 10-K ~~PCS.~~for ~~With this agreement,~~ the ~~Company will be able to~~ ~~provide~~year ~~continuing~~ended ~~service~~December 31, ~~after~~2005 ~~the~~for ~~closing~~a offurther ~~the Company’s~~description ~~acquisition~~ of ~~AT&T Wireless, in areas where~~ ~~Triton~~these ~~PCS currently has operations~~commitments.

~~The closings of these transactions would be contingent upon closing of the Company’s acquisition of AT&T Wireless.~~ Contingencies

~~Cincinnati~~ In ~~Bell~~a ~~Agreement~~jury trial, Freedom Wireless, Inc. (Freedom) was awarded damages jointly against the Company and Boston Communications Group, Inc. (BCGI) in the aggregate amount, including prejudgment interest, of approximately $165 for alleged past infringement of two patents allegedly owned by Freedom and used by BCGI to provide to the Company and other carriers a prepaid wireless telephone service technology platform. The court also enjoined the Company’s continued use of the BCGI platform, but the U.S. Court of Appeals for the Federal Circuit issued a stay of the injunction, and the Company and BCGI are appealing the entire case. BCGI has agreed to indemnify the Company with respect to the claims asserted in this litigation and has escrowed $41 for that purpose. However, if BCGI were to commence a bankruptcy proceeding, which is possible, the $41 may not be available to cover any of the Company’s liability. As a result of this arrangement and based upon the Company’s anticipated prospects on appeal, the Company does not believe the ultimate disposition of this case will have a material impact on its operations, cash flows or financial position beyond the $20 accrued in its consolidated financial statements.

In August 2004, the Company and Cincinnati Bell signed a definitive agreement which will allow the Company the right to put to Cincinnati Bell, any time after September 30, 2005, AT&T Wireless’ 19.9% equity in Cincinnati Bell’s wireless subsidiary, Cincinnati Bell Wireless, for $83. The definitive agreement will also allow Cincinnati Bell the right to call the equity, any time between the close of the Company’s acquisition of AT&T Wireless and September 30, 2005, for $85 plus interest. After September 30, 2005, Cincinnati Bell has the right to call the equity for $83 plus interest.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)


Item 1.	Financial Statements (Unaudited)

CINGULAR WIRELESS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Additionally,~~Several class-action lawsuits have been filed against Old AT&T asserting claims under the ~~Company,~~federal securities laws. The complaints assert claims that Old AT&T ~~Wireless~~made material misstatements concerning earnings and financial condition, while ~~Cincinnati~~omitting ~~Bell~~other ~~agreed~~material information, allegedly to ~~amend~~maximize proceeds from the ~~Cincinnati~~offering ~~Bell~~of AT&T Wireless Group tracking ~~Operating~~stock ~~Agreement~~in April 2000 and/or to ~~remove~~avoid ~~the~~paying ~~exclusivity~~a ~~arrangement~~cash guarantee in ~~applicable~~connection towith its MediaOne acquisition. In April 2006, the plaintiffs and AT&T ~~Wireless,~~reached ~~which~~a ~~will~~tentative ~~allow~~settlement of this case for $150. In connection with the ~~Company~~split-off toof AT&T ~~provide~~Wireless ~~continuing~~from ~~service~~Old AT&T, ~~after~~the Separation Agreement between AT&T Wireless and Old AT&T provides for the ~~closing~~allocation to AT&T Wireless of ~~the~~70% of any liabilities arising out of ~~Company~~these actions. Management’s ~~acquisition~~estimation of the potential loss from this and other preacquisition liabilities from AT&T Wireless, was previously recorded in ~~areas~~the ~~where~~purchase price ~~Cincinnati~~allocation ~~Bell~~to AT&T Wireless’ ~~currently~~assets ~~has~~acquired ~~operations~~and liabilities assumed. The settlement, if approved by the court, will not result in the accrual of any additional liabilities by the Company.

The ~~closing~~Company is subject to claims arising in the ordinary course of ~~this~~business ~~transaction~~involving ~~would~~allegations of personal injury, breach of contract, anti-competitive conduct, employment law issues, regulatory matters and other actions. To the extent that management believes that a loss arising from litigation or regulatory proceedings is probable and can reasonably be ~~contingent~~estimated, ~~upon~~an ~~closing~~amount ofis accrued on the ~~Company’s~~financial ~~acquisition~~statements offor ~~AT&T~~the ~~Wireless~~estimated loss. As additional information becomes available, the potential liability related to the matter is reassessed and the accruals are revised, if necessary. While complete assurance cannot be given as to the outcome of any legal claims, the Company believes that any financial impact would not be material to its business, financial position or cash flows.

Revolving Credit Agreement

Effective August 1, 2004, the Company entered into a revolving credit agreement with SBC and BellSouth for them to provide short-term financing on a pro rata basis at an interest rate of LIBOR plus .05% for the Company’s ordinary course operations. The initial term of the agreement expires in July 2005.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

The following should be read in conjunction with ~~the~~ the December 31, ~~2003~~2005 Cingular Wireless LLC audited consolidated financial statements and accompanying notes, related information and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the ~~year~~ year ended December 31, ~~2003 and with our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004~~2005.

~~Overview~~Introduction

~~Our~~ This ~~Business~~management’s discussion and analysis of financial condition and results of operations is intended to provide investors with an understanding of our past performance, financial condition and prospects. The following will be addressed:

We• ~~earn~~Overview ~~revenues~~of ~~and~~Business ~~generate~~• ~~cash~~Industry ~~primarily through~~and ~~offering~~Operating aTrends ~~comprehensive~~• ~~variety~~Selected ofFinancial ~~high-quality wireless voice~~ and ~~data~~Operating ~~communications~~Data ~~services~~• ~~and~~Consolidated ~~products. Our~~Results ~~services are available in a variety~~ of ~~postpaid~~Operations ~~pricing plans~~• ~~and~~Liquidity ~~prepaid service arrangements. Our voice~~ and ~~data offerings~~Capital ~~are~~Resources ~~tailored~~• toCritical ~~meet~~Accounting ~~the~~Policies ~~communications needs of targeted customer segments, including youth, family, active professionals, local~~ and ~~regional~~Estimates ~~businesses~~• ~~and~~Related ~~major~~Party ~~national corporate accounts.~~ Transactions

WeOverview ~~serve approximately 25.8 million voice and data customers, including customers served over our cellular, PCS and Mobitex networks, 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 Federal Communications Commission (FCC) licenses to provide cellular or PCS wireless communications services covering an aggregate population (POPs) of 243 million, or approximately 83% 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. We have entered into a definitive agreement to acquire AT&T Wireless Services, Inc. (AT&T Wireless) and a non-binding letter of intent to swap wireless properties with Triton PCS, which would expand our coverage to all of the 100 largest U.S. metropolitan markets and give us access to licenses covering POPs of over 260 million. See Notes 6 and 7 to our consolidated financial statements included in Item 1, Financial Statements. Business

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

At March 31, 2006, we served 55.8 million voice and data subscribers over our cellular and PCS networks and were the largest provider of wireless voice and data communications services in the U.S., based on both the number of wireless subscribers and revenues. We had access to FCC licenses to provide cellular or PCS wireless communications services covering 296 million POPs, or approximately 99% of the U.S. population, including all of the 100 largest U.S. metropolitan markets.


	*Industry and Operating Trends*

We compete for customers based principally on ~~price,~~ ~~service~~our ~~offerings~~reputation, network ~~call~~ quality, ~~coverage~~customer ~~area~~service, price and ~~customer~~ service. offerings. We face substantial and increasing competition in all aspects of our business. Our competitors are principally ~~five~~ ~~national~~three 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~~as ~~and~~well ~~wireline~~as ~~service providers~~resellers. In addition, we may experience significant competition from companies that provide similar services using other current or future communications technologies and services. ~~Our~~Competition ~~management~~and ~~focuses on~~ the ~~key wireless industry~~ ~~drivers~~high rate of ~~customer~~wireless service penetration, ~~average~~may ~~revenue~~continue ~~per user~~to ~~(ARPU),~~adversely ~~operating~~impact ~~income~~gross ~~and~~additions, ~~reputation~~revenue ~~within~~growth, ~~the~~expenses ~~wireless~~and ~~industry to evaluate our performance~~margins.

~~The~~Our ~~wireless~~management ~~telecommunications~~focuses ~~industry~~on ~~is continuing~~key towireless ~~grow; however, a high degree of competition exists~~industry ~~among~~drivers — ~~the~~subscriber ~~six national carriers~~penetration, ~~their~~average ~~affiliates~~revenue ~~and the~~per ~~smaller~~user ~~regional carriers. This competition and other factors~~(ARPU), ~~such~~ asoperating ~~the implementation of wireless local number portability~~income, ~~will~~ ~~continue~~OIBDA ~~to put pressure upon pricing, margins and customer churn~~ (~~see~~defined ~~Note 4 to “Selected Financial and Operating Data” for a definition of customer churn)~~ as ~~the carriers~~operating ~~compete~~income ~~for~~before ~~potential~~depreciation ~~customers. Future carrier revenue growth is highly dependent upon the number of net customer additions a carrier can achieve~~ and ~~the~~amortization) ~~ARPU derived from its customers. The effective management of customer churn is also paramount in minimizing customer acquisition costs~~ and ~~maintaining and~~reputation ~~improving~~within ~~margins.~~the ~~Improved~~wireless ~~marketing~~industry — ~~and~~to ~~sales~~evaluate ~~execution and promotion of service offerings such as FamilyTalk®, a shared minutes plan, and~~ our ~~“RolloverSM”~~ ~~minutes feature, which allows our customers to carry over any~~performance. ~~unused “anytime” minutes~~

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

from month to month for up to one year, have contributed to our continued strong growth in customer gross additions. During the second quarter of 2004, our cellular/PCS customer gross additions totaled over 2.4 million, marking our fourth consecutive quarter with cellular/PCS customer gross additions at or above 2.4 million. A continued emphasis on our affiliation with our members, SBC Communications Inc. (SBC) and BellSouth Corporation (BellSouth), through co-branding of our services with their offerings in areas where our wireless markets overlap with their wireline markets, has also increased our sales channels and the number of customer gross additions contributed by our member companies’ sales channels since early last year.


•	Subscriber Penetration — The wireless telecommunications industry is continuing to grow. A high degree of competition exists among the current four national carriers, their affiliates and the smaller regional carriers. This competition and other factors will continue to put pressure on pricing, margins and subscriber churn as the carriers compete for customers. Future carrier revenue growth is highly dependent upon the number of net subscriber additions a carrier can achieve and the ARPU derived from its subscribers. For the three months ended March 31, 2006, net subscriber additions increased 22.8% on a year-over-year basis.

•	ARPU — The quarterly ARPU continued to decline slightly on a year-over-year basis as we were successful in attracting new customers by offering plans that;

~~Although~~• ~~our~~add ~~operating~~incremental ~~margin~~revenue ~~(i.e.,~~but ~~operating income~~at ~~divided~~a ~~by operating revenues) in the second quarter of 2004 was~~ lower rate than inour ~~the~~primary ~~second~~plans, ~~quarter~~such ofas ~~2003~~FAMILYTALK(R), itprepaid ~~improved over~~plans ~~the last three quarters due to continued improvement in revenue growth~~ and/or ~~operational~~plans ~~efficiencies.~~offered ~~Also,~~through ~~the~~reseller ~~last~~arrangements; ~~two quarters~~• ofallow ~~2003~~customers ~~included costs related~~ to ~~extensive~~carry ~~customer retention~~over ~~and~~unused ~~customer~~minutes ~~service initiatives in anticipation of wireless local number portability, effective November 2003, and incremental costs related~~ to ~~our~~succeeding ~~Global~~months ~~System for Mobile Communication~~ (~~GSM~~ROLLOVER(R)~~/General~~ ~~Packet~~plans), ~~Radio~~which ~~Service (GPRS) network~~reduces ~~system~~overage ~~overlay.~~revenues; In• ~~June~~include ofno ~~this~~roaming ~~year,~~or ~~we reached~~long ~~final~~distance ~~completion~~charges; ofand ~~the~~• ~~GSM/GPRS~~allow ~~network~~our ~~overlay,~~customers ~~six months~~to ~~ahead~~call ofeach ~~our~~other ~~original~~for ~~schedule~~free.

~~Competition~~These ~~and~~plans ~~slowing~~effectively ~~wireless~~position ~~service penetration~~Cingular ~~will continue~~ to ~~adversely~~compete ~~impact~~for ~~revenue~~customers ~~growth~~ and ~~margins.~~ Weadd ~~expect~~incremental ~~cost of services increases to continue due to higher network system usage and~~revenue, tothough athey ~~lesser~~may ~~extent,~~negatively ~~redundant expenses~~affect ~~related~~ARPU. toOur ~~operating~~ARPU ~~dual~~is ~~networks~~also asadversely ~~our~~affected ~~customer~~by ~~base transitions~~the ~~from~~general ~~our~~competitive ~~Time~~environment ~~Division~~and ~~Multiple~~increasing ~~Access~~wireless ~~(TDMA) network~~penetration, towhich ~~our~~puts ~~GSM~~pressure ~~network.~~on Wethe ~~also~~prices ~~expect~~we ~~higher~~can ~~depreciation expense due to our ongoing capital spending~~charge. IfIn addition, we ~~are successful~~added ina ~~accelerating~~disproportionately ~~the~~higher ~~growth~~percentage of ~~our~~lower-ARPU ~~customer~~prepaid ~~base,~~and ~~our customer~~reseller ~~acquisition~~subscribers ~~costs~~than ~~will~~postpaid ~~increase.~~subscribers Weduring ~~also~~the ~~expect increased~~fourth ~~costs~~quarter toof ~~maintain~~2005 and ~~support~~first ~~our~~quarter ~~growing~~of ~~customer base~~2006. Therefore, ~~including~~ARPU ~~customer~~will ~~care~~continue ~~initiatives~~ to ~~improve~~be ~~our~~under ~~level of service, retain existing customers and support wireless local number portability~~pressure. WeThese ~~expect~~pressures ~~these~~are ~~and~~offset ~~other~~in ~~cost~~part ~~increases~~by ~~to be~~incremental ~~partially~~revenue ~~offset~~drivers byrelated ~~ongoing efforts~~ to ~~reduce~~data ~~general~~products, ~~and administrative~~such ~~expenses~~ as ~~well~~ringtones asand ~~decreased roaming costs as a result of lower negotiated roaming rates with other carriers~~messaging.

We• ~~expect~~Operating ~~that~~Income ~~our~~— ~~costs~~Our operating results for the ~~remainder~~three ~~of 2004~~months ~~will~~ended ~~increase~~March 31, in2006 ~~part~~were assignificantly ahigher ~~result~~than of the ~~preparation~~comparable ~~to complete~~period ~~the~~in ~~acquisition,~~2005 ~~and~~as ~~integrate~~our ~~the~~operating ~~operations,~~expenses ~~of AT&T~~remained ~~Wireless~~essentially ~~and~~flat ~~that~~while ~~the~~our ~~integration~~revenues ofrose ~~and~~over ~~accounting~~9%. ~~for the~~• ~~transaction~~OIBDA ~~will~~— ~~result~~Our inOIBDA ~~continuing~~margin ~~higher~~continued ~~costs~~to ~~for~~strengthen ~~the next~~as ~~few~~our ~~years,~~merger ~~principally~~integration ~~due~~initiatives toprogressed ~~non-cash~~and ~~amortization~~was ~~expense associated~~higher ~~with~~in ~~intangible~~the ~~assets.~~three ~~Assuming~~months ~~this~~ended ~~transaction~~March ~~is completed~~31, 2006 than in the ~~fourth~~corresponding ~~quarter~~prior ofyear ~~2004,~~period. we• ~~expect~~Reputation ~~merger synergy~~— ~~cost~~We ~~savings~~continue to ~~begin~~strive into ~~2005,~~be ~~resulting from~~ the ~~elimination~~ ofmost ~~redundant~~highly ~~facilities,~~regarded ~~advertising~~wireless ~~costs,~~company ~~staff, functions,~~in ~~capital~~the ~~expenditures~~industry ~~and~~with ~~other~~a ~~resources.~~driving Wefocus ~~expect these~~on ~~synergy~~best ~~savings~~of toclass ~~partially~~sales ~~offset~~and ~~merger~~service. ~~integration costs~~We inprimarily ~~the~~use ~~first~~subscriber ~~two~~churn ~~years~~to ~~and~~evaluate ~~then~~our ~~contribute~~reputation towithin ~~higher operating~~the ~~margins,~~wireless ~~beginning during 2007~~industry.

AsWe weexpect ~~face~~cost ~~the~~of ~~many~~services ~~challenges~~to increase due to higher network system usage and ~~opportunities~~higher costs as we integrate AT&T inWireless’ ~~the~~network ~~future~~and operations, as discussed below. Also, we will continue to incur redundant expenses related to operating multiple networks as our subscriber base transitions from our TDMA and analog networks to our GSM network. If we are successful ~~focused~~in onincreasing the ~~following~~growth ~~key~~rate of gross subscriber additions, our subscriber acquisition costs will also increase because of sales commissions and handset subsidies. We also expect increased costs to maintain and support our growing subscriber base and for customer care initiatives: to improve our level of service to our combined subscriber base and to retain existing subscribers. We expect to incur higher depreciation costs as a result of the enhancement of the network coverage in our footprint and installation of high-speed 3G UMTS/ HSDPA technology in our network infrastructure, together with the accelerated depreciation of our TDMA network.

• successfully completing the merger with AT&T Wireless as soon as possible and quickly integrating its business operations with ours; • 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 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;

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

•Integration ~~improving the Cingular customer experience and our reputation in the industry by focusing on all customer-impacting aspects~~ of ~~our~~AT&T business including network performance, sales, billing and customer service; and • maintaining effective cost controls by continually evaluating the cost structure of our business and driving efficiencies through our large size and national scope.Wireless

We acquired AT&T Wireless in late 2004, and are in the process of disposing of certain of its acquired assets, including redundant and sub-optimal network facilities, sales locations, and administrative space, and integrating its assets and operations, including sales and marketing, network, information technology, customer care, supply chain and general and administrative functions. In connection therewith, we expect to continue to incur significant costs over the next several quarters associated with such dispositions and integration activities. We expect to substantially complete activities associated with our network integration plans by December 31, 2006. We have begun to realize cost savings and improvements in the operating performance of our combined operations. We expect these savings to partially offset integration costs as well as higher depreciation and amortization expense and contribute to higher operating margins during 2006.

For the three months ended March 31, 2006, our operating income was negatively impacted by $234 of integration costs, which were primarily reflected in our Consolidated Statements of Operations within “Depreciation and amortization” expenses and “Selling, general and administrative” expenses. Integration costs impacting “Depreciation and amortization” expenses primarily included accelerated depreciation of $170. Integration costs impacting “Selling, general and administrative” of $46 and “Cost of services” of $18 were primarily comprised of: sales and distribution related expenses, as we continued efforts to integrate our sales processes and rationalize our distribution channels; administrative real estate consolidation; and, network and systems integration costs. Lastly, for the three months ended March 31, 2006, our operating income was negatively impacted by approximately $359 of non-cash amortization expenses related to amortizable intangible assets that were recorded with the acquisition.

Selected Financial and Operating Data

	Three Months Ended	~~Three Months Ended~~							~~Six Months Ended~~
		June 30,							June 30,
	March 31,
		2003				2004			2003			2004
	2005				2006
Construction and capital expenditures(1)		$	668			$	783		$	995		$	1,117
Construction and capital expenditures	$	971			$	1,441
Licensed cellular/PCS POPs (in millions) (end of period)(2)			236				243			236			243
Licensed cellular/ PCS POPs (in millions) (end of period)(1)		293				296
Total cellular/PCS customers (in millions) (end of period)(3)			22.6				25.0			22.6			25.0
Total cellular/ PCS subscribers (in millions) (end of period)(2)		50.4				55.8
Net additions, cellular/PCS customers (in millions)			0.5				0.4			0.7			1.0
Net additions, cellular/ PCS subscribers (in millions)		1.4				1.7
Cellular/PCS customer churn(4)			2.5	%			2.7	%		2.6	%		2.7	%
Cellular/ PCS subscriber churn(3)		2.2	%			1.9	%
Average cellular/PCS revenue per user (ARPU)(5)		$	53.12			$	50.32		$	51.95		$	49.15
Average cellular/ PCS revenue per user (ARPU)(4) (Actual dollars)	$	49.60			$	48.48
OIBDA(5)	$	1,789			$	2,487
OIBDA margin(6)		24.1	%			31.1	%

(1)	~~Capital~~Licensed ~~expenditures~~POPs dorefers ~~not include capital expenditures and cash contributions related~~ to ~~our~~the ~~infrastructure~~number ~~venture,~~of ~~GSM~~people ~~Facilities,~~residing ~~LLC (GSMF). See also Note 3, Investments~~ in ~~and~~areas ~~Advances~~where towe ~~Equity~~have ~~Affiliates,~~licenses to ~~our~~provide ~~consolidated~~cellular ~~financial~~or ~~statements~~PCS ~~included in Item 1, Financial Statements~~service.
(2)	~~Licensed~~Cellular/ ~~POPs~~PCS ~~refers~~subscribers toinclude ~~the~~subscribers ~~number~~ of ~~people~~other ~~residing~~carriers inserved ~~areas~~through ~~where~~reseller ~~we have licenses to provide cellular or PCS service~~agreements.
(3)	Cellular/ PCS ~~customers~~subscriber ~~include~~churn ~~customers~~is ~~served~~calculated ~~through~~by ~~reseller~~dividing ~~agreements~~the aggregate number of cellular/ PCS subscribers who cancel service during each month in a period by the total number of cellular/ PCS subscribers at the beginning of each month in that period.
(4)	~~Cellular~~ARPU is defined as cellular/ PCS ~~customer~~service ~~churn~~revenues isduring ~~calculated~~the byperiod ~~dividing~~divided ~~the~~by ~~aggregate~~average number of cellular/ PCS ~~customers~~subscribers ~~who~~during ~~cancel~~the ~~service~~period. ~~during~~For ~~each~~discussion ~~month~~of inARPU and a ~~period~~reconciliation byto ~~the~~its ~~total~~most ~~number~~comparable ofmeasure ~~cellular/PCS~~under ~~customers~~U.S. atgenerally ~~the~~accepted ~~beginning~~accounting ofprinciples ~~each~~(GAAP), ~~month~~see in“ARPU ~~that~~Discussion” ~~period~~below.
(5)	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.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

Consolidated Results of Operations


(5)	OIBDA is defined as operating income before depreciation and amortization. For discussion of OIBDA, including reasons we believe its presentation is useful and a reconciliation to its most comparable measure under GAAP, see “OIBDA Discussion” below.

(6)	OIBDA margin is defined as OIBDA divided by service revenues.

~~Three~~ OIBDA Discussion. OIBDA is defined as operating income before depreciation and ~~Six~~amortization. ~~Months~~OIBDA ~~Ended~~margin ~~June~~is 30calculated as OIBDA divided by services revenue. These are non-GAAP financial measures. They differ from operating income and operating margin, ~~2004~~as calculated in accordance with GAAP, ~~Compared~~in that they exclude depreciation and amortization. They differ from net income, as calculated in accordance with GAAP, in that they exclude, as presented in our Consolidated Statements of Income: (i) depreciation and amortization, (ii) interest expense, (iii) minority interest in earnings of consolidated entities, (iv) equity in net income of affiliates, (v) other, net, and (vi) provision for income taxes. We believe these measures are relevant and useful information to our investors as they are an integral part of our internal management reporting and planning processes and are important metrics that our management uses to evaluate the operating ~~Three~~performance of our consolidated operations. They are used by management as a measurement of our success in acquiring, retaining and ~~Six~~servicing ~~Months~~subscribers ~~Ended~~because ~~June~~we 30believe these measures reflect our ability to generate and grow subscriber revenues while providing a high level of customer service in a cost-effective manner. Management also uses these measures as a method of comparing our performance with that of many of our competitors. The components of OIBDA include the key revenue and expense items for which our operating managers are responsible and upon which we evaluate their performance. Lastly, ~~2003~~we use this measure for planning purposes and in presentations to our board of directors, and we use multiples of this current or projected measure in our discounted cash flow models to determine the value of our licensing costs and our overall enterprise valuation.

~~Customer~~ OIBDA ~~Base~~does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. OIBDA excludes other, net, minority interest in earnings of consolidated entities and equity in net income of affiliates, as these do not reflect the operating results of our subscriber base and our national footprint that we utilize to obtain and service our customers. Equity in net income of affiliates represents our proportionate share of the net income of affiliates in which we exercise significant influence, but do not control. As we do not control these entities, our management excludes these results when evaluating the performance of our primary operations. OIBDA also excludes interest expense and the provision for income taxes. Excluding these items eliminates the expenses associated with our capitalization and tax structures. Finally, OIBDA excludes depreciation and amortization, in order to eliminate the impact of capital investments.

			Three Months												Six Months
			Ended June 30,						Change						Ended June 30,						Change
Customers			2003			2004			Fav(Unfav)			%			2003			2004			Fav(Unfav)			%
			(In thousands)
Cellular/PCS Customers
Beginning of Period				22,114			24,618			2,504			11.3%			21,925			24,027			2,102			9.6	%
Net Additions (Losses)
	Postpaid			399			380			(19	)		(4.8	)		350			676			326			93.1
	Prepaid			30			(46	)		(76	)		(253.3	)		170			6			(164	)		(96.5	)
	Reseller			111			94			(17	)		(15.3	)		209			300			91			43.5
		Total Net Additions		540			428			(112	)		(20.7	)		729			982			253			34.7
Other Adjustments				(14	)		(2	)		12			85.7			(14	)		35			49			350.0
End of Period				22,640			25,044			2,404			10.6			22,640			25,044			2,404			10.6
Gross Additions
	Postpaid			1,670			1,898			228			13.7			3,027			3,678			651			21.5
	Prepaid			326			292			(34	)		(10.4	)		707			673			(34	)		(4.8	)
	Reseller			221			252			31			14.0			379			589			210			55.4
		Total Gross Additions		2,217			2,442			225			10.1			4,113			4,940			827			20.1
Mobitex Data Network Customers
Beginning of Period				835			768			(67	)		(8.0	)		817			789			(28	)		(3.4	)
Net Additions (Losses)				(47	)		(33	)		14			29.8			(29	)		(54	)		(25	)		(86.2	)
End of Period				788			735			(53	)		(6.7	)		788			735			(53	)		(6.7	)
Gross Additions				91			40			(51	)		(56.0	)%		187			97			(90	)		(48.1	)%

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

WeThere ~~had~~are ~~over~~material ~~25 million~~limitations ~~cellular/PCS customers~~to atusing ~~June 30,~~these ~~2004,~~non-GAAP ~~representing a growth of~~financial 2measures.~~4 million,~~ orOIBDA ~~10.6%,~~and inOIBDA ~~our cellular/PCS customer base from a year ago. For the three months ended June 30~~margin, ~~2004, cellular/PCS~~as ~~customer~~we ~~gross~~have ~~additions~~defined ~~were a little over 10% higher than the same prior year period and were driven by double-digit growth in our postpaid and reseller customer segments~~them, ~~partially offset by reduced prepaid customer gross~~may ~~additions.~~not ~~The increase in postpaid customer gross additions can~~ be ~~attributed~~comparable to ~~the~~similarly ~~success~~titled ofmeasures ~~new~~reported ~~GSM~~by ~~service offerings and~~other ~~the continued promotion of our FamilyTalk® service offerings~~companies. ~~We had 428~~Furthermore,~~000~~ ~~net customer additions for~~ the ~~three months~~fact ~~ended~~that ~~June 30, 2004 with nearly 90% of~~ these ~~being postpaid.~~performance ~~Additionally, 9% of our postpaid customer gross~~measures ~~additions~~do ~~for~~not ~~the~~take ~~current~~into ~~year~~account ~~three~~certain ~~month~~significant ~~period~~items, ~~were through~~including ~~our~~depreciation ~~member companies’ sales channels as a result of our emphasis on co-branding~~ and ~~marketing~~amortization, ofinterest ~~our~~expense, ~~services~~tax ~~with~~expense ~~them.~~and ~~The~~equity ~~increase~~ in ~~reseller~~net ~~customers~~income ~~compared~~of ~~with~~affiliates, ~~the corresponding~~that ~~prior~~directly ~~year~~affect ~~period can be attributed to aggressive growth by~~ our ~~primary reseller~~net income. ~~Growth~~Management incompensates ~~our~~for ~~prepaid~~these ~~customer segment~~limitations ~~was reduced from the same prior year period, in part due~~by tocarefully ~~special~~analyzing ~~promotion~~how of our ~~FamilyTalk®~~competitors ~~plan,~~present ~~which~~performance ~~competes~~measures ~~for~~that ~~customers~~are ~~at a~~ similar ~~price point. However, we expect to see improvement~~ in ~~this~~nature ~~area due~~ to ~~the~~OIBDA ~~recent introduction~~as ~~of GSM prepaid services in May of this year.~~we

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

~~Approximately~~present ~~96%~~it, ofand ~~our~~considering ~~customers~~the ~~are~~economic ~~now~~effect ~~using~~of the excluded ~~our~~expense ~~digital~~items ~~services,~~independently anas ~~increase~~well ~~from~~as ~~94%~~in atconnection ~~June 30,~~with its ~~2003.~~analysis ~~Our~~of ~~networks~~net ~~have~~income ~~100%~~as ~~digital~~calculated ~~coverage~~in accordance with GAAP. OIBDA and ~~over~~OIBDA ~~99%~~margin ~~of our~~should ~~network~~be ~~traffic~~considered ~~was~~in ~~digital~~addition atto, ~~June 30~~but not as a substitute for, ~~2004~~other measures of financial performance reported in accordance with GAAP.

~~For~~ARPU ~~the~~Discussion. ~~three~~ARPU ~~months~~is ~~ended~~defined ~~June 30,~~as ~~2004, the~~ cellular/ PCS ~~churn~~service revenues ~~rate~~during ~~was~~the ~~2.7%,~~period updivided ~~from~~by aaverage ~~2.5%~~cellular/ ~~churn rate~~PCS insubscribers during the ~~corresponding prior year~~ period. This ~~higher~~metric ~~overall cellular/PCS~~is ~~churn~~used ~~rate~~to ~~was~~ compare the ~~result~~recurring ofrevenue ~~higher~~amounts ~~churn~~generated ~~rates~~on ~~in both~~ our ~~postpaid~~cellular/ ~~and prepaid customer bases, although our~~PCS ~~reseller~~network ~~customer~~to ~~churn~~prior ~~was~~periods ~~lower~~and ~~than~~internal ~~in the corresponding period last year~~targets. ~~For~~Our ~~the six months ended June 30, 2004~~ARPU ~~compared~~calculation ~~with~~excludes ~~the~~Mobitex ~~same~~data ~~prior~~revenues ~~year~~from ~~period,~~ a ~~slight~~business ~~increase~~we sold in ~~the~~ ~~overall~~late ~~cellular/PCS~~2004 ~~churn~~and ~~rate~~thereby ~~from~~makes ~~2.6%~~our tometric ~~2.7%~~more ~~was~~comparable ~~primarily~~with ~~due~~other towireless ~~higher prepaid customer churn. To date~~carriers, which we ~~do not~~ believe ~~that~~makes ~~wireless~~it ~~local number portability has~~more ~~materially~~useful ~~impacted~~to ~~our customer churn rate~~investors.

~~Our~~Reconciliation ~~Mobitex customer base at June 30, 2004 was nearly 7% lower than at the same point in the prior year. Although customer churn was lower than in the prior year, the availability~~ of ~~new~~GAAP ~~competitive~~Financial ~~data~~Measures ~~products over our and other carriers’ cellular/PCS networks continues~~ to ~~negatively impact~~Non-GAAP ~~growth~~Financial ~~and resulted in 56% fewer customer gross additions for the three months ended June 30, 2004 when compared to the same prior year period~~Measures.

Historical Consolidated Data — For the three and six months ended June 30, 2003 and June 30, 2004


		Three Months
		Ended March 31,

		2005			2006

Net income (loss)		$	(240	)	$	354
	Plus: Interest expense		338			297
	Plus: Minority interest in earnings of consolidated entities		16			41
	Plus: Equity in net income of affiliates		(2	)		—
	Plus: Other, net		(20	)		(9	)
	Plus: Provision for income taxes		22			124

Operating income			114			807
	Plus: Depreciation and amortization		1,675			1,680

OIBDA		$	1,789		$	2,487

Service revenues		$	7,419		$	8,005
Less: Mobitex data revenues			18			14

Service revenues used to calculate ARPU		$	7,401		$	7,991

			Three Months							Six Months
			Ended June 30,				Change			Ended June 30,				Change
			2003		2004		%			2003		2004		%
Operating revenues
	Local service revenue — voice		$	3,081	$	3,249		5.5	%	$	5,995	$	6,328		5.6	%
	Data revenue			104		166		59.6			209		303		45.0
		Total local service revenue		3,185		3,415		7.2			6,204		6,631		6.9
	Incollect roamer revenue			194		172		(11.3	)		351		327		(6.8	)
	Long distance			42		47		11.9			83		89		7.2
		Subscriber revenue		3,421		3,634		6.2			6,638		7,047		6.2
	Outcollect revenue			164		133		(18.9	)		305		247		(19.0	)
	Other revenue			34		34		—			70		65		(7.1	)
		Other service revenue		198		167		(15.7	)		375		312		(16.8	)
	Wireless service revenue			3,619		3,801		5.0			7,013		7,359		4.9
	Equipment sales			255		354		38.8			499		738		47.9
Total operating revenues				3,874		4,155		7.3			7,512		8,097		7.8

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

			Three Months									Six Months
			Ended June 30,						Change			Ended June 30,						Change
			2003			2004			%			2003			2004			%
Operating expenses
	Cost of services (excluding depreciation)			890			943			6.0			1,711			1,865			9.0
	Cost of equipment sales			451			505			12.0			847			1,042			23.0
	Selling, general and administrative			1,269			1,462			15.2			2,486			2,834			14.0
	Depreciation and amortization			508			565			11.2			996			1,117			12.1
		Total operating expenses		3,118			3,475			11.4			6,040			6,858			13.5
Operating income				756			680			(10.1	)		1,472			1,239			(15.8	)
Other income (expenses):
	Interest expense			(230	)		(199	)		(13.5	)		(455	)		(397	)		(12.7	)
	Minority interest in earnings of consolidated entities			(35	)		(41	)		17.1			(59	)		(68	)		15.3
	Equity in net loss of affiliates			(76	)		(92	)		21.1			(148	)		(197	)		33.1
	Other, net			7			1			(85.7	)		33			5			(84.8	)
		Total other income (expenses)		(334	)		(331	)		(0.9	)		(629	)		(657	)		4.5
Income before provision (benefit) for income taxes				422			349			(17.3	)		843			582			(31.0	)
Provision (benefit) for income taxes				12			(2	)		(116.7	)		14			4			(71.4	)
		Net income	$	410		$	351			(14.4	)%	$	829		$	578			(30.3	)%

Consolidated Results of Operations

~~Operating~~Three ~~Revenues~~Months Ended March 31, 2005 Compared with the Three Months Ended March 31, 2006

~~Total~~Subscriber operating revenues, consisting of service revenues and equipment sales, increased $281, or 7.3%, to $4,155 for the three months ended June 30, 2004, compared with the corresponding prior year period. Nearly two-thirds of the $281 increase in total operating revenues was the result of a 5.0% growth in service revenues. The increase in service revenues was impacted primarily by a larger average cellular/PCS customer base, continued growth in data revenues and increased regulatory fee revenues. These increases were partially offset by lower roaming revenues. Equipment sales contributed $99, or 38.8%, of the increase in total operating revenues, driven primarily by higher per unit revenues and higher customer gross additions compared to the prior year. The components of the change in operating revenues are described as follows: Base

Service revenues. Service revenues, comprised of local voice and data services, roaming, long distance and other revenues, increased $182, or 5.0%, for the three months ended June 30, 2004 compared with the same prior year period. This increase was consistent with the year-to-date increase of 4.9% compared with the corresponding prior year period.


			Three Months
			Ended March 31,						Change

			2005			2006			Fav(Unfav)			%

			(In thousands)
Beginning of Period				49,132			54,144			5,012			10.2	%
Net Additions (Losses)
	Postpaid			1,063			900			(163	)		-15.3	%
	Prepaid			(87	)		147			234			NM
	Reseller			391			632			241			61.6	%

		Total Net Additions		1,367			1,679			312			22.8	%
Other Adjustments				(149	)		(13	)		136			-91.3	%

End of Period				50,350			55,810			5,460			10.8	%

Gross Additions
	Postpaid			3,539			3,132			(407	)		-11.5	%
	Prepaid			740			953			213			28.8	%
	Reseller			393			652			259			65.9	%

		Total Gross Additions		4,672			4,737			65			1.4	%

~~The~~NM — ~~local~~Not ~~service component of total service~~Meaningful 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 Universal Service Fund (USF) and other regulatory fees.

~~Key~~We ~~drivers~~had of55.8 million ~~the~~cellular/ ~~increase~~PCS insubscribers ~~local service~~at ~~revenues~~March 31, ~~for~~2006. ~~both~~We ~~the~~added ~~three~~approximately ~~and six months ended June~~1.7 ~~30,~~million ~~2004~~subscribers, ~~include~~net aof ~~nearly~~disconnections, ~~11.0%~~to ~~increase~~our insubscriber base during the ~~average~~three ~~number~~months ~~of cellular/PCS~~ended ~~customers~~March 31, ~~the~~2006, ~~impact~~up offrom 1.4 million ~~which~~additions ~~was~~in ~~lessened~~the ~~due~~corresponding toprior year ~~lower~~period, ~~average~~and ~~revenue~~our ~~per~~gross ~~customer.~~subscriber ~~For~~additions for the three months ~~ended~~ ~~June~~ended March 3031, ~~2004,~~2006 ~~local~~totaled ~~service~~over ~~revenues~~4.7 million. ~~related to regulatory~~The ~~fees~~slight ~~increased~~increase ~~$41~~in ~~over~~total ~~the~~gross ~~same~~subscriber ~~prior~~additions ~~year~~was primarily ~~period~~driven ~~and~~by ~~included an~~new ~~increase~~prepaid ofofferings ~~$11~~launched in ~~billings~~mid ~~to our postpaid customers for the~~2005 ~~USF~~ and ~~certain~~strong ~~other~~reseller ~~regulatory~~additions.

For the three months ended March 31, 2006, our monthly cellular/ PCS churn rate was 1.9%, down from 2.2% in the prior year. Postpaid churn for the three months ended March 31, 2006 was 1.6%, down from 1.9% in the corresponding prior year period. The decline in our churn was driven by a 7.5% reduction in disconnections, which we believe is attributed to better network quality and coverage, a more positive overall customer experience, more attractive rate plans, exclusive devices and free mobile-to-mobile calling to over 55.8 million Cingular subscribers.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

~~fees,~~Historical ~~the~~Consolidated ~~payment~~Data of— ~~which~~For ~~is reflected in “Cost of services”. To a lesser extent, unfavorable impacts to local service revenues include increased revenue deferrals associated with our “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 $16 in direct sales channel activation revenues from local service revenues to equipment sales for the three months ended ~~June 30~~March 31, ~~2004~~2005 and ~~$33 for the six months ended June 30, 2004~~2006.

Increases in data revenues also favorably impacted local service revenues. For the three and six months ended June 30, 2004, 59.6% and 45.0% increases, respectively, over the prior year same periods were driven by increased data service penetration and usage of text messaging and other data services by our cellular/PCS customers, as well as increased revenue per customer in our Mobitex data business. For the three months ended June 30, 2004, data revenues related to our cellular/PCS customers increased over 110% compared with the same prior year period.


			Three Months
			Ended March 31,						Change

			2005			2006			$			%

Operating revenues
	Local service revenue — voice		$	6,179		$	6,518		$	339			5.5	%
	Data revenue			570			873			303			53.2

		Total local service revenue		6,749			7,391			642			9.5
	Incollect roamer revenue			303			264			(39	)		(12.9	)
	Long distance			114			126			12			10.5

		Subscriber revenue		7,166			7,781			615			8.6
	Outcollect revenue			164			171			7			4.3
	Other revenue			89			53			(36	)		(40.4	)

		Other service revenue		253			224			(29	)		(11.5	)

	Service revenue			7,419			8,005			586			7.9
	Equipment sales			810			975			165			20.4

Total operating revenues				8,229			8,980			751			9.1

Operating expenses
	Cost of services (excluding depreciation)			2,144			2,320			176			8.2
	Cost of equipment sales			1,295			1,327			32			2.5
	Selling, general and administrative			3,001			2,846			(155	)		(5.2	)
	Depreciation and amortization			1,675			1,680			5			0.3

		Total operating expenses		8,115			8,173			58			0.7

Operating income				114			807			693			607.9

Other income (expenses):
	Interest expense			(338	)		(297	)		41			(12.1	)
	Minority interest in earnings of consolidated entities			(16	)		(41	)		(25	)		156.3
	Equity in net income of affiliates			2			—			(2	)		(100.0	)
	Other, net			20			9			(11	)		(55.0	)

		Total other income (expenses)		(332	)		(329	)		3			(0.9	)

Income (loss) before provision for income taxes				(218	)		478			696			NM
Provision for income taxes				22			124			102			NM

	Net income (loss)		$	(240	)	$	354		$	594			NM	%

~~Roaming revenues, both incollect and outcollect revenues, declined for both the three and six months ended June~~NM ~~30,~~— ~~2004~~Not ~~when compared with the corresponding prior~~Meaningful year periods. Overall, reduced roaming revenues were primarily a function of lower negotiated roaming rates, including those with our largest national roaming partner. For both the three and six month periods, increases in incollect volumes were more than offset by the impact of roaming minutes being bundled with all-inclusive regional and national rate plans. For the six months ended June 30, 2004, the reduction in outcollect revenues was also volume driven as other wireless carriers continue to construct and/or better utilize their own networks.

~~Long~~Operating distance revenues, although higher for the three and six months ended June 30, 2004, continued to comprise only 1.2% of total service revenues, consistent with the same prior year periods. Higher international long distance revenues in 2004 contributed to the increases in long distance revenues for the three and six month periods. Revenues

~~Cellular/PCS~~Total ~~ARPU~~operating ~~for~~revenues ~~the~~increased ~~three months ended June 30, 2004 was~~ $~~50.32~~751, ~~a decrease of $2.80,~~ or 59.31%, ~~compared~~ ~~with~~to $~~53.12~~8,980 for ~~the~~ three months ended ~~June~~March 3031, ~~2003.~~ ~~The~~2006 ~~six month period ended June 30, 2004 also experienced a $2.80 decrease and a similar percentage decline~~ when compared towith the corresponding prior year period. ~~Increases in~~The ARPU related to higher customer usage and increased data and regulatory fee revenues were more than offset by the impact of a larger embedded customer base of postpaid customers on lower ARPU FamilyTalk® rate plans and a 1.9.1% ~~shift~~growth ~~in the~~resulted ~~cellular/PCS~~primarily ~~customer~~from ~~base to lower ARPU reseller customers. The impact of increased revenue deferrals associated with our “rollover” rate plans and~~ the ~~impact of the adoption~~increase ~~of EITF 00-21 also had a negative impact on ARPU. Other unfavorable impacts include ARPU reductions related to roaming revenues and other on-going competitive pricing pressures.~~

Equipment sales. For the three months ended June 30, 2004, the 38.8% increase in equipment sales was primarily driven by higher equipment selling prices but was also impacted by a 9.7% increase in cellular/PCS postpaid and prepaid customer gross additions, offset partially by a decrease in the sale of upgrade handsets to our existing customers. For the three months ended June 30, 2004, equipment sales also increased $16 due to the reclassification from local service revenues associated with the adoption of EITF 00-21. For the six months ended June 30, 2004, the increase in equipment sales was both volume and sales price driven, reflecting a 16.5% increase in cellular/PCS postpaid and prepaid customer gross additions, increased upgrade handset sales and customer movement toward higher functionality handsets.

Operating Expenses

Cost of services (exclusive of depreciation). The $53, or 6.0%, increase in cost of services for the three months ended June 30, 2004 compared with the corresponding prior year period was due to an increase in

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

~~local network system costs of $77, partially offset by a $24 decrease~~ in ~~third~~subscribers ~~party~~during ~~network~~this ~~system costs (i.e., roaming~~ and ~~long distance costs). For~~ the previous three ~~and~~ ~~six months ended June 30, 2004, local network system cost increases of 14~~quarters.~~0% and 18.0%, respectively, compared with~~ ~~the~~Equipment ~~same~~sales ~~prior~~contributed ~~year~~$165 ~~periods, were primarily driven by an approximate 30% growth in system minutes~~ of ~~use and associated network system expansion costs. Local network systems costs for~~ the ~~current~~increase ~~three month period were, however, favorably impacted by a $27 decrease~~ in ~~property tax expense. For the three and six~~total ~~months~~operating ~~ended~~revenues ~~June 30,~~when 2004, local network system costs were negatively impacted by increases of $11 and $61, respectively, over the same prior year periods, for costs billed to our customers related to payments into the USF and certain other regulatory funds. For the three months ended June 30, 2004, the primary contributor to lower third party network system costs was a $40 decrease in incollect roaming costs compared with the ~~same~~corresponding prior year period~~, partially offset by a $19 increase in long distance costs~~. ~~For~~The ~~the~~components ~~six months ended June 30, 2004, the same dynamic can be seen. A reduction in incollect roaming costs was a result~~ of lower negotiated roaming rates, including those with our largest national roaming partner, that more than offset increased volumes. An increase in long distance costs was primarily volume driven and a function of the ~~inclusion~~change ~~of “free long distance”~~ in ~~many~~service ofrevenues ~~our~~are ~~regional~~described ~~and~~as ~~national rate plan offerings.~~follows:

~~Cost~~Service ofrevenue. ~~equipment~~Service ~~sales~~revenue increased $586, or 7.9%, ~~For~~for the three months ended ~~June~~ March 3031, ~~2004,~~2006 over the corresponding ~~increase~~prior inyear ~~cost~~period. ofThis ~~equipment~~increase ~~sales~~ was primarily due ~~both~~to ~~price~~the ~~and~~increases ~~volume~~in ~~driven.~~local ~~Higher~~service ~~handset~~voice ~~sales~~and ~~were~~data revenues, ~~associated~~partially ~~with~~offset ~~the~~by ~~9.7%~~decreases ~~increase~~to inincollect ~~cellular/PCS~~roamer ~~postpaid~~ and other ~~prepaid~~revenues. ~~customer~~The ~~gross~~local ~~additions~~service-voice ~~over~~component ~~the~~of ~~same~~total ~~prior year period~~service ~~and~~revenues ~~per~~includes ~~handset~~recurring ~~costs~~monthly ~~were~~access ~~impacted~~charges, ~~by customer movement toward~~airtime ~~higher~~usage, ~~functionality~~including ~~handsets~~prepaid asservice, aand ~~result~~charges offor ~~our GSM network~~optional ~~overlay.~~features ~~For~~and ~~the~~services, ~~six~~such ~~months~~as ~~ended~~voice ~~June 30~~mail, mobile-to-mobile calling, ~~2004~~roadside assistance, ~~upgrade~~caller ~~costs increased~~ID 10and handset insurance.5% Local ~~compared~~service-voice ~~with~~revenues ~~the~~also ~~same~~include ~~prior~~billings ~~year~~to ~~period,~~our ~~primarily~~customers ~~due~~for tothe anUSF ~~increase~~and inother ~~upgrade~~regulatory ~~activity~~fees and taxes.

~~Selling,~~The ~~general~~key ~~and~~driver ~~administrative~~of ~~expenses. Selling,~~the ~~general~~increase ~~and~~in ~~administrative expenses~~local service-voice revenues for the three months ended ~~June~~March 3031, ~~2004~~2006 ~~increased~~was an increase 15of 10.25%, ~~when~~in ~~compared~~the ~~with~~average ~~the~~number ~~corresponding~~of cellular/ PCS subscribers over the prior year period,. The increase in local service voice ~~with~~revenues ~~increases~~due to increased subscribers was partially offset by a 2.3% decline in ~~selling~~our ~~expenses~~ARPU, ~~costs~~which ~~related~~is primarily attributable to ~~maintaining~~an ~~and~~increased ~~supporting~~percentage ~~our~~of ~~customer~~reseller subscribers in our subscriber base ~~and~~versus ~~other~~the ~~administrative~~prior ~~costs~~year, which generate lower revenues than our postpaid subscribers, as well as an increase in the number of our subscribers on plans allowing free mobile-to-mobile minutes. Data revenues, which increased by $303 over the corresponding prior year period, partially offset the decline in ARPU, driven by greater data service penetration and usage of SMS messaging and other data services by our cellular/ PCS subscribers.

~~Selling~~Incollect ~~expenses,~~roaming ~~which~~revenues ~~include~~decreased ~~sales,~~when ~~marketing, advertising and commission expenses, increased $86, or 13.8%, for the three months ended June 30, 2004,~~ compared with the ~~same~~amounts from the corresponding prior year period. ~~This increase was driven primarily by higher commission expenses~~ and ~~advertising~~continue ~~and promotion costs.~~to ~~Higher~~be ~~commission~~unfavorably ~~expenses~~impacted ~~were driven~~ by the ~~increase~~bundling inof ~~total~~“free” ~~cellular/PCS~~roaming ~~postpaid~~minutes ~~and prepaid customer gross additions compared~~ with ~~the prior year as well as a shift in the mix of indirect (non~~all-~~company~~inclusive ~~sales~~regional ~~channel) customer activations to include a greater number of higher-cost postpaid~~ and national ~~retail~~ ~~activations. For the six months ended June 30, 2004,~~rate ~~a $176, or 15~~plans.~~0%, increase in selling expenses was also driven~~ ~~primarily by higher commissions and advertising costs but also was impacted by higher costs principally related to increased sales staff headcount and associated employee-related costs.~~

~~Costs~~Long ~~for~~distance ~~maintaining~~revenues ~~and supporting our customer base increased $85, or 20.6%,~~ for the three months ended ~~June~~ March 3031, 2006 ~~2004,~~increased ~~and~~ $~~173,~~12 orfrom ~~20.8%, for~~ the ~~six~~corresponding ~~months ended June 30, 2004, when compared with the same~~ prior year ~~periods.~~ ~~Increased costs for the current three month~~ period ~~were principally~~ due ~~to higher bad debt, customer service expenses~~ ~~and~~primarily ~~other costs~~ to ~~maintain~~an ~~our~~increase ~~existing customer base. Bad debt expense, although higher than~~ in ~~2003~~domestic ~~and~~long ~~reflective~~distance ~~of higher net write-offs, represented only approximately 2% of total operating~~ revenues ~~for both the three and six month periods in 2004~~. ~~For the three and six months ended June 30, 2004,~~ customer service expenses increased $38 and $67, respectively, primarily driven by increased headcount and employee-related expenses to support our customer retention and other customer service improvement initiatives. Other cost increases to maintain our existing customer base included additional costs related to our dedicated customer retention center, which opened in the latter part of 2003. Year-to-date compared with 2003, an increase in residuals and upgrade commissions

Equipment Sales. These sales are comprised of product, accessory and upgrade revenues. Equipment sales increased $165, or 20.4%, to $975 for the three months ended March 31, 2006 compared to $810 for the corresponding prior year period. This increase is primarily driven by higher priced handsets, including exclusive devices, despite lower postpaid gross additions and upgrade volumes compared to the prior year.


	*Operating Expenses*

Cost of services (exclusive of depreciation). Total cost of services, excluding depreciation, increased $176, or 8.2%, to $2,320 for the three months ended March 31, 2006, compared with $2,144 for the corresponding prior year period. The increase resulted from equal increases for the local systems cost and third-party network system cost components.

The local systems costs component of cost of services resulted primarily from gross increases in interconnection fees associated with a 22.8% growth in system minutes of use; higher facilities related costs resulting from an increase in cell sites; an increase in local network system costs of $40 primarily related to increased system usage and associated expansion costs, and including $15 in integration costs. These gross increases were offset by decreases of $21 for reseller services expenses and $37 from USF fees. The reseller services expense decrease resulted from a 43% decrease in minutes of use on the T-Mobile network, while a decreased contribution rate partially contributed to the USF decrease.

The third-party network system costs component of cost of services includes incollect roaming and long distance costs. The $88 increase resulted from increases of $48 and $40, respectively for incollect roaming

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

~~was~~and ~~driven~~long ~~primarily~~distance. byBoth anincreases ~~increase~~were indriven ~~handset~~by higher minutes ~~upgrade~~of ~~activity~~use ~~and~~resulting ~~higher~~from ~~commission~~the ~~incentives~~increased ~~related~~number toof ~~our~~average ~~GSM~~subscribers, ~~network~~partially ~~overlay~~offset by rate reductions from AT&T and BellSouth.

~~Other~~Cost ~~administrative~~of ~~costs~~equipment ~~increased $22, or 9~~sales.~~4%,~~ ~~for~~For the three months ended ~~June~~ March 3031, ~~2004~~2006, ~~compared with~~ the ~~same~~$32 ~~prior~~increase ~~year~~in ~~period,~~cost ~~but~~of ~~were~~equipment ~~essentially~~sales resulted ~~flat~~primarily onfrom ~~a year-to-date~~the ~~basis.~~net ~~The~~product ~~unfavorable~~cost ~~variance~~increase ~~for~~of $27 from the ~~current three~~corresponding ~~month~~prior year period. ~~includes~~This a $1327 ~~sales~~increase, ~~and~~net of ~~use~~freight, ~~tax~~vendor ~~increase~~credits and ~~increased~~ ~~legal~~other ~~and~~product ~~professional~~cost ~~services including consulting~~savings, ~~fees~~resulted ~~related~~primarily tofrom ~~the~~a ~~proposed AT&T Wireless merger~~13.3% ~~The unfavorable~~increase ~~variance~~in ~~for~~ the ~~current~~average ~~three~~cost ~~month period was~~per ~~offset~~unit onsold, adriven ~~year-to-date basis~~ by ~~a favorable variance that was primarily a function of~~ higher-end ~~expenses~~handsets, inincluding ~~2003 which included~~exclusive ~~$19~~devices, indespite ~~leasehold~~a ~~termination~~lower ~~costs~~volume ~~associated~~of ~~with~~postpaid ~~our~~gross ~~2002 workforce~~additions ~~reorganization and $22 in legal settlement costs~~as ~~partially~~compared ~~offset~~to ~~by higher information technology costs in~~ the ~~current~~ prior year.

~~Depreciation~~Selling, general and ~~amortization~~administrative expenses. Selling, ~~For~~general ~~the~~and ~~three~~administrative ~~and~~expenses ~~six~~(SG&A) for the three months ended ~~June~~ March 3031, ~~2004~~2006 decreased $155, ~~the~~or ~~increases~~5.2%, when compared with the corresponding prior year ~~periods~~period. ~~were~~For ~~primarily~~the ~~due~~three months toended ~~higher~~March 31, 2005 and 2006, SG&A included ~~depreciation~~$102 ~~expenses~~and ~~related~~$46, torespectively, ~~on-going~~of ~~capital~~integration ~~spending~~costs, primarily ~~including~~related ~~our~~to ~~GSM~~employee ~~network~~termination ~~overlay.~~benefits ~~Intangibles~~for ~~amortization~~former Cingular ~~expense~~employees, ~~remained~~systems ~~essentially~~integration ~~flat~~costs, ~~when~~sales ~~compared~~distribution rationalization, toand ~~the~~administrative ~~same prior~~real ~~year~~estate ~~periods~~consolidation.

Selling expenses, which include sales, marketing, advertising and commission expenses, for the three months ended March 31, 2006 decreased $32, or 2.5%, when compared with the corresponding prior year period, primarily attributable to a $29 decrease in integration costs.

Costs for maintaining and supporting our subscriber base for the three months ended March 31, 2006 decreased $73, or 6.2%, when compared with the corresponding prior year period. Excluding integration costs, the decrease was $59, or 5.1%. This decrease was primarily due to a decrease in bad debt expense of $45, primarily resulting from improved collections, which resulted in lower net account write-offs, and from a decrease in customer service costs of $46 due to reduced outsourced professional services at certain call centers.

Other administrative costs for the three months ended March 31, 2006 decreased $50, or 8.9%, when compared with the corresponding prior year period. Excluding integration costs, the decrease was $37, or 7.3%, which primarily resulted from reduced headcount.

Depreciation and amortization. Depreciation and amortization expense for the three months ended March 31, 2006 was essentially flat with the prior year period. Increases of $146 in depreciation are largely attributable to increased network investment and shortening of the estimated useful lives of our legacy TDMA and acquired AT&T Wireless assets, substantially offset by reductions to depreciation expense associated with the revaluation of acquired AT&T Wireless assets pursuant to the network rationalization plans approved in 2005. Intangibles amortization expense for the three months ended March 31, 2006 totaled $365 representing a decrease of $141 when compared with the corresponding prior year period, primarily due to declining amortization of the customer relationship intangible assets recorded with the AT&T Wireless acquisition. The decrease also resulted from other intangible assets that became fully amortized in 2005.


	*Other Income (Expenses)*

Interest ~~expense~~Expense. For the three months ended ~~June~~March 3031, ~~2004~~2006, interest expense ontotaled ~~the~~$297 ~~debt to our members,~~and ~~SBC~~represented ~~and~~a ~~BellSouth,~~decrease ~~was~~of ~~lower by~~ $3641 when compared with the ~~same~~ corresponding prior year period. ~~This~~The decrease ~~was~~mainly ~~the result of a reduction~~resulted ~~in the fixed interest rate on the debt to our members~~ from ~~7.5% to 6.0% effective July 1, 2003. For~~ the ~~six~~repayment ~~months~~of ~~ended June 30~~$2,911 2004, $70 in lower interest expense related to this same interest rate reduction was partially offset by a reduction in capitalized interest and an increase in interest expense on higher capital lease obligations in 2004. The impact of ~~the~~member ~~interest~~loans ~~rate~~during ~~swaps was immaterial~~2005. ~~See also Item 3,~~ ~~Quantitative and Qualitative Disclosures about Market Risk.~~

Minority interest in earnings of consolidated entities. For the three months ended ~~June~~ March 3031, ~~2004~~2006, ~~compared with the corresponding prior year period, the~~ minority interest ~~expense~~in ~~increase~~earnings of ~~$6 was a function of higher net income of our~~ consolidated entities ~~in the~~totaled ~~current~~$41 ~~year period. For the six months ended June 30,~~and ~~2004,~~represented ~~the~~an $9 increase ~~is primarily due to lower expenses~~ of $~~10 in~~25 ~~2003~~over ~~related to a partnership legal settlement that benefited~~ the corresponding prior year period. ~~Otherwise,~~The ~~the~~increase ~~overall~~primarily ~~impact~~resulted ~~due~~from ~~to the~~increased partnership net income ~~of our consolidated entities~~ in the ~~current year-to-date~~three ~~period~~months ~~was~~ended ~~comparable to that of 2003~~March 31, 2006.

Equity in net loss of affiliates. For the three and six month periods ended June 30, 2004, the increase from the comparable prior year periods in equity in net loss of affiliates was primarily due to an increased loss related to our GSMF venture, principally due to higher depreciation expense.

Other, net. For the three months ended June 30, 2004, the $6 decrease in Other, net from the corresponding prior year period was due to $3 in lower interest income from marketable securities and the inclusion in the prior year period of a $3 gain on the disposition of a business. The reduction of $28 for the six months ended June 30, 2004 includes the impact of a one-time $23 gain that benefited the comparable six month period in 2003.

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

Equity in net income of affiliates. For the three months ended March 31, 2006, equity in net income of affiliates decreased $2 over the corresponding prior year period due to an equity investment sale in 2005.

Other, net. For the three months ended March 31, 2006, other, net totaled $9 and represented a decrease of $11 when compared with the corresponding prior year period. The decrease resulted from higher interest income earned in the three months ended March 31, 2005, primarily attributable to cash proceeds received from the sale of certain network assets to T-Mobile in January 2005.


	*Provision for Income Taxes*

Provision for income taxes. For the three months ended March 31, 2006, the provision for income taxes was $124, representing an increase of $102, as compared with the corresponding prior year period. The higher provision for income taxes resulted from higher taxable income versus the prior year period.

Liquidity and Capital Resources


	*Cash Flow Analysis*

Cash Flows for the ~~Six~~Three Months Ended ~~June~~March 3031, ~~2004,~~2005 Compared with the ~~Six~~Three Months Ended ~~June~~March 3031, ~~2003~~2006

	Six Months Ended
	Three Months Ended
	June 30,						Change
	March 31,						Change
	2003			2004			$			%
	2005			2006			$			%
Net cash provided by operating activities	$	1,~~683~~319		$	~~1,702~~931		$	19(388	)		1-29.14	%
Net cash used in investing activities		(~~1,162~~459	)		(21,~~900~~335	)		(~~1,738~~876	)		~~149~~190.68	%
Net cash (used in) provided by financing activities		(331,003	)		~~160~~150			~~193~~1,153			~~(584.8~~NM	)
Net increase (decrease) in cash and cash equivalents		488			(1,038	)		(1,526	)		(312.7	)
Net decrease in cash and cash equivalents		(143	)		(254	)		(111	)		77.6	%
Cash and cash equivalents at beginning of period		~~908~~352			~~1,139~~472			~~231~~120			2534.41	%
Cash and cash equivalents at end of period	$	~~1,396~~209		$	~~101~~218		$	~~(1,295~~9	)		~~(92~~4.83	)%

~~Net cash provided by operating activities. Cash generated from operations was our primary source of funds in 2003 and 2004 and remained essentially flat when comparing the six months ended June~~NM ~~30,~~— ~~2003~~Not ~~and 2004.~~Meaningful

Net cash ~~used~~provided inby ~~investing~~ operating activities. ~~The~~For ~~primary~~the ~~contributors~~three tomonths ~~the~~ended ~~overall~~March 31, ~~increase of $1~~2006,~~738~~ ~~in net~~ cash ~~used~~provided inby ~~investing~~operating activities ~~were~~was an$931, ~~increase~~a decrease of $~~177~~388 infrom ~~investments~~the inthree ~~and~~months ~~advances~~ended toMarch 31, ~~equity~~2005. ~~affiliates,~~Although we experienced a $~~1,438~~ 698 increase in ~~acquisition activity~~operating income, excluding depreciation and amortization, athis ~~$122~~was ~~increase~~offset inby ~~capital~~decreases ~~expenditures.~~of ~~Capital~~cash generated ~~expenditures~~from ofworking ~~$995~~capital. inThis working capital decrease was primarily attributable to the ~~six~~following ~~months~~increases ~~ended~~in ~~June 30,~~uses ~~2003~~of ~~included~~cash associated with accounts receivable ($81267); ofinventories ($337); ~~leasehold~~other ~~interests~~current inassets ~~545~~($250); ~~communication~~and ~~towers~~accounts payable and other current liabilities ($245) when comparing activity in ~~California~~the three ~~and~~months ~~Nevada~~ended ~~acquired~~March 31, ~~from~~2006 ~~SpectraSite~~versus ~~Inc~~the prior corresponding period.

~~The~~Net cash used in investing activities. For the three months ended March 31, 2006, cash used in investing activities was $1,335, an increase of $~~177~~876 infrom ~~investments~~the corresponding inprior ~~and~~year period. This increase was primarily the ~~advances~~result toof ~~equity~~increased ~~affiliates~~capital ~~for~~expenditures that exceeded the ~~six~~prior year period by $470. In addition, the three months ended ~~June~~March 3031, ~~2004~~2005 ~~reflects~~included ~~primarily~~proceeds anfrom ~~increase~~certain one-time transactions that were not present in the three months ending ~~contributions~~March 31, to2006. These one-time transactions included $2,482 of proceeds from the sale of our ~~GSMF~~California ~~venture~~and Nevada network assets to ~~fund~~T-Mobile ~~capital~~in January ~~expenditures~~2005; $262 of proceeds from the sale of wireless properties, including those that we were required to divest; and $180 from the sale of spectrum to T-Mobile. These proceeds were primarily offset by the investment of the net proceeds of $2,145 from the sale of our network assets to T-Mobile as designated

Cash needs for acquisitions of businesses and licenses increased by $1,438 for the six months ended June 30, 2004 when compared with the same prior year period. Acquisitions in the six months ended June 30, 2004 consisted of $1,400 for the purchase of spectrum licenses from NextWave Telecom, Inc. (NextWave) and $49 for wireless operations in Maryland and Louisiana and spectrum licenses in Maryland, Texas, Arkansas, Louisiana and Missouri. In the six months ended June 30, 2003, acquisitions of $11 consisted of the purchase of spectrum licenses from AT&T Wireless.

Net cash (used in) provided by financing activities. The primary contributor to the overall increase of $193 in net cash provided by financing activities was a $300 net increase in commercial paper. During the three months ended June 30, 2004, we issued $550 in commercial paper and subsequently repaid $250. Commercial paper was primarily utilized to acquire the NextWave licenses. This increase in cash was partially offset by a $51 increase in net distributions to minority interests and a $49 increase in principal payments on external notes, as compared to the six months ended June 30, 2003.

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 in cash. SBC and BellSouth have committed to provide equity funding for the purchase.

Network Upgrades and Expansion. The upgrade and expansion of our networks will continue to require substantial amounts of capital over the next several years. For the six months ended June 30, 2004, we

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

~~spent~~funds ~~$1,117~~ for ~~our GSM/GPRS/EDGE network upgrade plus other network and non-network~~ capital expenditures~~. In~~; ~~addition, for~~ the ~~six~~$200 ~~months~~payment ~~ended June 30, 2004,~~ we were ~~spent~~required ~~$338~~to ~~for~~make ~~equity contributions~~ to ~~our~~GSMF ~~network~~prior ~~sharing ventures~~to ~~with~~its ~~T-Mobile~~dissolution; ~~USA, Inc. (T-Mobile)~~ and ~~AT&T~~$143 of ~~Wireless.~~deposits Wemade ~~anticipate that our 2004 capital investments~~ for ~~completing~~ ~~our~~license ~~network~~acquisitions ~~upgrade~~during ~~and funding other ongoing capital expenditures and equity investments will be in~~ the ~~$3,000~~three ~~range,~~months ~~down~~ended ~~slightly from 2003 spending. As our GSM overlay was substantially complete at December~~March 31, ~~2003, our primary focus in 2004 will be on improving network quality, expanding our GSM/GPRS/EDGE coverage and completing EDGE upgrades to our network~~2005. ~~We anticipate only a minimal amount of expenditures on~~ ~~TDMA equipment.~~

InNet ~~June~~cash ~~2004,~~(used ~~our~~in) ~~GSM/GPRS~~provided ~~network~~by ~~upgrade~~financing ~~was~~activities. For ~~fully~~the ~~completed~~three months ended March 31, ~~six~~2006, ~~months~~cash ~~ahead~~provided ofby financing ~~our~~activities ~~original~~totaled ~~schedule,~~$150 as compared with ~~100%~~ the use of $1,003 ~~our~~for ~~“covered”~~the ~~POPs~~three ~~(i.e.~~months ended March 31, ~~those~~2005. ~~areas~~For the ~~currently~~three ~~with~~months ~~Cingular~~ended ~~cellular~~March 31, or2006, ~~PCS~~we ~~service)~~made ~~having~~net ~~access~~draws of to$1,165 under our ~~GSM/GPRS~~revolving ~~technology~~credit agreement. AtThis ~~June 30,~~increase ~~2004~~in cash was offset by our $1,000 ~~approximately two-thirds~~repayment of ~~our~~the ~~covered~~7.35% ~~POPs~~AT&T Wireless ~~had~~Services, ~~access~~Inc. tounsecured ~~our~~and ~~EDGE~~unsubordinated ~~technology~~Senior ~~with~~Notes anon ~~expectation~~the ofmaturity ~~100%~~date, ~~EDGE~~March 1, ~~coverage~~2006. byFor the ~~end~~three months ended March 31, 2005, the primary use of ~~2004.~~cash was the $993 of repayments to our members under our revolving credit agreement.

ToSources ~~complement~~of 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 network overlay project. These agreements enable us to efficiently and immediately expand our GSM/GPRS footprint without incurring additional capital expenditures. Liquidity

~~Licenses Acquisition.~~Under Ina ~~August~~revolving ~~2003~~credit agreement, weAT&T and BellSouth ~~executed~~provide anunsubordinated ~~agreement~~short-term ~~with~~financing ~~NextWave~~on ~~and~~a ~~certain~~pro ofrata ~~its~~basis ~~affiliates~~at ~~pursuant~~an tointerest ~~which~~rate weof ~~would~~LIBOR ~~purchase~~plus ~~FCC~~0.05% ~~licenses~~ for ~~1900~~ ~~megahertz~~our ~~(MHz)~~ordinary ~~PCS~~course operations ~~wireless~~based ~~spectrum~~upon inour 34budget ~~markets~~and ~~for $1,400~~forecasted in cash needs. The revolving ~~spectrum~~credit ~~licenses~~agreement ~~cover~~provides ~~83.4 million POPs,~~that ~~with~~in ~~all~~the ~~but~~event ~~3.4 million~~that ~~POPs~~we have inavailable ~~our~~cash ~~existing licensed~~(as ~~areas.~~defined) ~~This~~on ~~additional~~any ~~spectrum~~business ~~improves~~day, ~~our spectrum~~such ~~depth~~amount inshall ~~many~~first ofbe ~~our~~applied ~~existing~~to ~~markets,~~the ~~which~~repayment ~~increases~~of ~~our~~the ~~voice~~revolving loans, and ~~data~~any ~~capacity.~~remaining ~~The~~excess ~~spectrum~~then isshall ~~comprised~~be ofapplied 20to ~~MHz~~the repayment inof the ~~Tampa,~~ ~~Florida~~Subordinated Notes (member loans) from AT&T and ElBellSouth ~~Paso,~~at ~~Texas~~month ~~markets~~end ~~and~~if 10we ~~MHz~~do innot ~~the~~then require a cash ~~other~~advance 32under ~~markets~~the agreement. ~~The~~For ~~transaction~~the ~~closed~~three inmonths ~~April~~ended March 31, ~~2004~~2006, ~~with funding~~we ~~consisting~~made net draws of $~~900~~1,165. inIn ~~existing~~addition, at ~~cash~~March 31, on2006, ~~hand~~we ~~and~~had $~~500~~1,676 outstanding under the ~~from~~revolving ~~commercial~~credit ~~paper~~agreement.

~~Investment~~As inof ~~Venture~~March 31, ~~with T-Mobile. In November 2001~~2006, we ~~and T-Mobile~~had ~~formed~~cash ~~a jointly-controlled infrastructure venture, GSMF, to allow the companies to share network infrastructures in the California, Nevada~~ and ~~New~~cash ~~York City metropolitan area~~equivalents ~~markets~~totaling $218. We ~~and~~expect ~~T-Mobile buy access~~ to ~~the~~fund ~~venture’s network~~our ~~infrastructure~~remaining ~~but each of us has retained ownership and~~capital ~~control~~requirements offor ~~our~~at ~~own~~least ~~FCC~~the ~~licenses.~~next ~~Although~~12 months ~~the~~by ~~networks we~~using ~~contributed~~existing tocash ~~the~~balances, ~~venture~~cash ~~are~~generated ~~constructed~~from ~~and~~operations ~~operational~~and, weif ~~are~~necessary, ~~required~~draws onunder aour ~~regular~~revolving ~~basis~~credit toagreement ~~invest additional capital to~~with ~~modify~~AT&T and ~~expand the network and to fund cash operating expenses~~BellSouth.

WeCash and T-Mobile 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 in our investment. We and T-Mobile have agreed to dissolve GSMF. See “Other Business Matters — Termination of GSMF Network Infrastructure Joint Venture” below. Requirements

~~Investment~~Our inoperating ~~Venture~~cash ~~with~~requirements ~~AT&T Wireless.~~during In2006 ~~January~~will ~~2002,~~be ~~we entered~~driven ~~into~~primarily anby ~~agreement~~capital ~~with~~expenditures ~~AT&T~~associated ~~Wireless~~with toour ~~form a~~network ~~jointly-controlled~~enhancement and ~~equally-owned~~integration ~~venture~~activities, tointerest ~~construct~~payments ~~a GSM~~and ~~voice~~costs ~~network~~associated with ~~GPRS/EDGE~~acquiring ~~data~~and ~~technologies~~retaining ~~along~~new aand ~~number of~~existing ~~major~~subscribers. ~~highways~~During in2006, ~~the~~we ~~United~~expect ~~States in order~~ to ~~ensure availability~~make oftax ~~GSM/GPRS/EDGE~~distributions ~~service~~ to our ~~customers~~members ~~and reduce~~in ~~incollect~~amounts ~~roaming~~sufficient ~~expenses~~to wepermit ~~pay~~members to ~~other~~pay ~~carriers when~~the ~~our~~tax ~~customers~~liabilities ~~use~~resulting ~~their wireless devices when they travel on those highways. We and AT&T Wireless each buy services~~ from ~~the~~ ~~venture~~allocations ~~and provide services under our own brand names. As~~ of ~~June 30,~~income ~~2004,~~tax ~~we had an investment in the venture of~~items ~~$22.~~from ~~In 2004, we do not expect capital expenditures to be material~~us.

Network Upgrades, Integration and Expansion. The upgrade, integration and expansion of our GSM/GPRS/EDGE networks, the continued installation of UMTS/ HSDPA technology in a number of markets and the construction and upgrade of network facilities in California and Nevada following the sale of facilities to T-Mobile upon the termination of our GSMF network infrastructure joint venture will require substantial amounts of capital over the next several quarters. For the three months ended March 31, 2006, we spent $1,441 for network and non-network capital expenditures. We expect our capital expenditures in 2006 to be in the $7,000 to $7,500 range.

Spectrum Auction. The FCC has scheduled an auction of 90MHz of spectrum in the 1700 and 2100 MHz frequency bands to begin in June 2006. Our cash requirements may increase if we participate in the auction and are successful in our bidding.

Integration of AT&T Wireless. For the three months ended March 31, 2006, we incurred $64 of integration costs, which are included primarily in “Selling, general and administrative” expenses and “Cost of services” expenses in our consolidated income statements. We expect to continue to incur significant costs associated with integration activities.

Contractual Obligations. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations” in our Annual Report on Form 10-K for the year ended

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(Unaudited)~~

~~Contractual Obligations.~~December 31, ~~Please~~2005 ~~see “Management’s Discussion~~ and ~~Analysis~~Note 7 ofwithin ~~Financial~~Item 1. ~~Condition~~Financial ~~and~~Statements ~~Results~~ of ~~Operations —~~this ~~Contractual Obligations” in our Annual~~ Report ~~on Form 10-K~~ for ~~the year ended December 31, 2003 for~~ a description of our contractual obligations.

Debt Service. As of ~~June~~ March 3031, ~~2004~~2006, we had $1219,~~916~~ 833 of consolidated indebtedness and capitalized lease obligations, excluding unamortized premiums/discounts and interest rate swap fair value adjustments but including the acquired AT&T Wireless debt obligations. This debt includes: $92,~~678~~000 in unsecured Senior Notes of Cingular Wireless LLC; $8,250 in unsecured Senior and Senior Subordinated Notes of AT&T Wireless; $6,717 in unsecured, subordinated member loans from AT&T ~~SBC~~ and BellSouth; $1,156 in capital lease obligations (excluding executory costs and imputed interest); and $~~2,000~~34 in other ~~unsecured~~debt. ~~senior~~As ~~notes~~of March 31, 2006, we had $~~932~~1,676 in outstanding ~~capital~~borrowings ~~lease~~under the revolving credit agreement. ~~obligations~~During the first quarter of 2006, ~~and~~we repaid $~~300~~1,000 inof ~~commercial~~7.35% AT&T ~~paper~~Wireless Services, Inc. unsecured and unsubordinated Senior Notes on the maturity date, March 1, 2006. Additional capital lease obligations for the three months ending March 31, 2006 were $11. See “Management’s Discussion and ~~six~~Analysis ~~months~~of ~~ended~~Financial Condition and Results of ~~June~~Operations ~~30,~~— ~~2004,~~Contractual ~~respectively,~~Obligations” ~~were~~in ~~not~~our Annual ~~material.~~Report on Form 10-K for the year ended December 31, 2005 for our debt service requirements.

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 June 30, 2004, we were obligated to pay certain capital leases assigned to the GSMF venture of $30. 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.

Capital Resources

At June 30, 2004, we had a commercial paper program and a $1,000 unsecured 364-day revolving bank credit facility to support the commercial paper program. As of June 30, 2004, we had $300 of commercial paper outstanding. We had no revolving credit facility debt outstanding. Effective August 1, 2004, we entered into a revolving credit agreement with SBC and BellSouth for them to provide short-term financing on a pro rata basis at an interest rate of LIBOR plus .05% for our ordinary course operations. On August 4, 2004, our short-term obligations under this facility aggregated $35. Effective August 5, 2004, we reduced the size of our revolving bank credit facility to $50, which is the amount of commercial paper currently outstanding, and upon the repayment of the outstanding commercial paper, we intend to terminate our commercial paper program and terminate our revolving bank credit facility. In December 2003, we established an accounts receivable secured borrowing program. Effective June 29, 2004, we terminated this borrowing program.

We expect to rely primarily on cash provided by operations and borrowings from SBC and BellSouth to fund our ongoing operations, business development and debt service. SBC and BellSouth have committed to provide equity funding for the AT&T Wireless acquisition and therefore we will not be required to raise cash or issue securities to fund the transaction.

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 circumstances. Actual results may differ from those estimates under different assumptions or conditions. There have not been any material changes in Critical Accounting Policies and Estimates from those reported in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2005.

Related Party Transactions

See Related Party Transactions in Note 5 to our consolidated financial statements included in Item 1, “Financial Statements”.

Off-Balance Sheet Arrangements

As of March 31, 2006, we had no material off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The majority of our financial instruments are medium- and long-term fixed rate notes and member loans. Fluctuations in market interest rates can lead to significant fluctuations in the fair values of these fixed rate instruments. In addition, we are exposed to market risks, primarily from changes in interest rates. 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 March 31, 2006, we had outstanding an aggregate of $6,717 in unsecured, subordinated member loans from AT&T and BellSouth with a fixed interest rate of 6.0% and a stated maturity of June 30, 2008. In addition, as of March 31, 2006, we had outstanding $10,250 of unsecured senior notes with fixed interest

CINGULAR WIRELESS LLC

PART I — FINANCIAL INFORMATION (Dollars in Millions)

Item 2 3. Quantitative ~~Management’s Discussion~~ and ~~Analysis~~Qualitative Disclosures ofAbout ~~Financial Condition and Results of Operations~~ Market Risk — (~~Unaudited~~Continued)

inrates ~~the~~ranging ~~consolidated~~from ~~financial~~5.625% ~~statements~~to ~~and accompanying notes~~8.75% Wewith ~~base~~maturity ~~our~~dates ~~estimates on historical~~between ~~experience,~~2006 ~~where~~and ~~applicable~~2031. ~~and~~As ~~other~~of ~~assumptions~~March 31, ~~that~~2006, we ~~believe~~ ~~are~~had ~~reasonable~~$250 ~~under the circumstances. Actual results~~of ~~may~~fixed-to-floating interest ~~differ~~rate ~~from~~swaps ~~those~~related ~~estimates~~to ~~under~~our ~~different~~five-year ~~assumptions~~unsecured orsenior ~~conditions~~notes. ~~There~~A ~~have~~change ~~not~~in ~~been~~interest ~~any~~rates ~~material~~of ~~changes~~100 basis inpoints ~~Critical~~would ~~Accounting~~change ~~Policies~~our ~~and~~interest ~~Estimates~~expense ~~from~~as ~~those~~a ~~reported~~result ~~in Part II,~~of ~~Item 7 —~~the ~~Management’s Discussion~~swaps ~~and~~as ~~Analysis~~ of March 31, ~~Financial~~2006 ~~Condition~~by ~~and~~approximately ~~Results of Operations~~$3 —per ~~Critical~~annum. ~~Accounting~~We ~~Policies and~~also ~~Estimates~~have incapital ~~our~~leases ~~Annual~~outstanding ~~Report~~of on$1,156 ~~Form 10-K~~with ~~for~~fixed ~~the year~~interest ~~ended~~rates ~~December 31,~~ranging ~~2003~~from 5.72% to 9.6%.

WeAs ~~record~~of aMarch 31, ~~revenue~~2006, ~~deferral~~we ~~for~~had ~~the~~$1,694 ~~estimated portion~~ of ~~unused~~floating ~~rollover minutes that are expected to be~~rate ~~utilized prior to expiration~~borrowings. ~~During~~These ~~the~~borrowings ~~second~~primarily ~~quarter~~include ~~of 2004,~~amounts weoutstanding ~~modified~~under our ~~estimate~~revolving ~~for~~credit ~~calculating~~agreement ~~the~~with ~~rollover deferral~~AT&T ~~to incorporate more refined customer data~~ and ~~usage patterns~~BellSouth, which incarry ~~our~~an ~~view,~~interest ~~more~~rate ~~accurately reflects the estimate~~ of ~~the future~~LIBOR ~~utilization~~plus ~~of those minutes based on historical trends~~0.05%. ~~This~~A change in ~~estimate~~interest ~~resulted~~rates inof a100 basis ~~$15~~points ~~decrease in the rollover deferral recorded in the quarter, as compared to the deferral that~~ would ~~have been recorded prior to making the~~ change. our ~~The~~interest ~~rollover~~expense ~~deferral~~on ~~balance~~floating ~~was~~rate ~~$136~~debt ~~and~~balances ~~$103~~as atof ~~June~~March 3031, ~~2004~~2006 ~~and~~by ~~December~~approximately $17 ~~31,~~per ~~2003, respectively~~annum.

~~Related~~The ~~Party~~risk ~~Transactions~~management discussion above, related to our market risks, contains forward-looking statements and represents, among other things, an estimate of possible changes in fair value that would occur assuming changes in interest rates. Future impacts of market risk would be based on actual developments in the financial markets. See Cautionary Language Concerning Forward-Looking Statements immediately following Part II, Item 6 of this Quarterly Report.

~~See the section Related Party Transactions in Note~~Item 4. Controls toand ~~our~~Procedures ~~consolidated financial statements included in~~ ~~Item 1, Financial Statements.~~

~~Recent~~(a) We ~~Accounting~~maintain ~~Pronouncements~~disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports filed under the Securities Exchange Act of 1934, as amended (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

~~See~~As ~~Note~~of March 131, to2006, management, including our ~~audited~~President and ~~consolidated~~Chief Executive Officer and Chief Financial Officer, ~~financial~~completed ~~statements~~its ~~included~~evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President and Chief Executive Officer and our Chief Financial Officer concluded that we maintain disclosure controls and procedures that are effective in ~~Item 8~~providing reasonable assurance that information required to be disclosed in our ~~Annual~~reports under the Exchange Act is recorded, processed, ~~Report~~summarized onand ~~Form 10-K~~reported ~~for~~within the ~~year~~time ~~ended~~periods ~~December 31~~specified in the SEC’s rules and forms, and that such information is ~~2003~~accumulated and communicated to 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.

~~Change~~(b) During the evaluation referred to in ~~Officers~~Item 4 (a) above, ~~and~~we ~~Directors~~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.

Change in Chief Financial Officer

Peter A. Ritcher, previously Vice President of Corporate Finance for SBC, became our new Chief Financial Officer, effective May 10, 2004. Mr. Ritcher replaces Richard G. Lindner who was appointed as the Chief Financial Officer of SBC.

Change in Board of Directors

In the second quarter of 2004, our members appointed Richard G. Lindner and Mark L. Feidler to the Board of Directors of Cingular Wireless Corporation, our manager. Mr. Lindner, who previously served as our Chief Financial Officer, currently serves as Chief Financial Officer of SBC. He also replaces Randall Stephenson as a member of the Audit Committee. Mr. Feidler, who previously served as our Chief Operating Officer, currently serves as Chief Staff Officer of BellSouth.

Other Business Matters

Termination of GSMF Network Infrastructure Joint Venture

In May 2004, we and T-Mobile entered into an agreement, subject to regulatory and other customary closing conditions and the closing of our acquisition of AT&T Wireless, to dissolve GSMF and distribute the related network assets. Under the terms of the agreement, we will sell our ownership of the California/Nevada network assets to T-Mobile for $2,300 in cash, which is net of cash payments required by the dissolution. The ownership of the New York City network assets will return to T-Mobile. The transaction is expected to close no later than the first quarter of 2005. We will retain the right to utilize

CINGULAR WIRELESS LLC

PART I II — ~~FINANCIAL~~OTHER INFORMATION ~~(Dollars in Millions)~~

Item 21. ~~Management’s~~Legal ~~Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)~~Proceedings

~~the~~See ~~California/Nevada~~Contingencies ~~and~~in ~~New~~Note ~~York~~7 ~~City~~to our consolidated financial ~~networks~~statements ~~during~~included ain ~~four~~Item 1, ~~year~~Financial ~~transition~~Statements ~~period~~of ~~and~~this Report ~~will~~for ~~guarantee~~information on legal proceedings. Except as noted, tothere ~~purchase~~are ano ~~minimum~~material ~~number~~changes in the status of ~~minutes~~our ~~over~~legal proceedings ~~this~~from ~~term.~~those Wedescribed ~~and T-Mobile~~in ~~will~~our ~~retain~~Annual ~~all~~Report ~~respective~~on Form 10-K ~~customers~~for inthe year ~~each~~ended ~~market~~December 31, 2005.

In connection with the dissolution of the venture, we and T-Mobile will exchange spectrum at a future date. As agreed to as part of the original joint venture agreement, we will receive 10 MHz of spectrum in NewItem ~~York City and T-Mobile will receive 5 MHz of spectrum in nine basic trading areas (BTAs) in California and Nevada, the largest of which is San Diego~~1A. Risk ~~We also agreed to sell 10 MHz of spectrum to~~Factors T-Mobile in each of the San Francisco, Sacramento and Las Vegas BTAs for $180. T-Mobile will also have the option to purchase an additional 10 MHz of spectrum in the Los Angeles and San Diego BTAs from us within two years, under certain circumstances.

WeSee ~~have~~“Risk ~~not~~Factors” ~~yet~~in ~~determined the amount of the gain~~Part I — ~~from these transactions~~Item 1A. ~~The~~in ~~determination~~our ofAnnual ~~the~~Report ~~amount~~on Form 10-K offor the ~~gain~~year isended ~~subject~~December 31, to2005 ~~valuation~~for ofinformation ~~the~~on ~~spectrum received in the~~risk ~~spectrum~~factors. ~~exchange~~There ~~and~~are ~~determination~~no ofmaterial ~~the~~changes ~~carrying amount of our investment~~ in ~~GSMF at~~ the ~~date~~status of ~~closing.~~our ~~The~~risk factors ~~closing~~from ~~of the~~those ~~transactions~~described isin ~~contingent~~our ~~upon~~Annual ~~the~~Report ~~closing~~on Form 10-K offor ~~our~~the ~~acquisition~~year ofended ~~AT&T~~December 31, ~~Wireless~~2005.

~~Bargaining~~Item ~~Agreement~~2. ~~Status~~Unregistered Sales of Equity Securities and Use of Proceeds

~~In June 2004, we entered into an agreement with the Communications Workers of America District 6 to replace a contract that expired in February 2004~~None. ~~The new ratified~~ ~~contract expires February 2008.~~

~~Triton~~Item ~~PCS~~3. ~~Agreement~~Defaults upon Senior Securities

In July 2004, we, AT&T Wireless, and Triton PCS signed a non-binding letter of intent providing for the acquisition by us of wireless properties in Virginia in exchange for AT&T Wireless properties in North Carolina and Puerto RicoNone. ~~In addition, we would pay Triton PCS $175 in cash.~~

~~Additionally,~~Item ~~AT&T~~4. ~~Wireless~~Submission ~~and Triton PCS have agreed to terminate their stockholders’ agreement, which includes termination~~ of anMatters ~~exclusivity arrangement in return for the surrender of AT&T Wireless’ equity in Triton PCS. With this agreement, we will be able~~ to ~~provide continuing~~a ~~service,~~Vote ~~after the closing~~ of ~~our~~Security ~~acquisition of AT&T Wireless, in areas where Triton PCS currently has operations.~~ Holders

~~The closings of these transactions would be contingent upon closing of our acquisition of AT&T Wireless~~None.

~~Cincinnati~~Item ~~Bell~~5. ~~Agreement~~Other Information

~~In August 2004, we and Cincinnati Bell signed a definitive agreement which will allow us the right to put to Cincinnati Bell, any time after September 30, 2005, AT&T Wireless’ 19~~None.~~9% equity in Cincinnati Bell’s~~ wireless subsidiary, Cincinnati Bell Wireless, for $83. The definitive agreement will also allow Cincinnati Bell the right to call the equity, any time between the close of our acquisition of AT&T Wireless and September 30, 2005, for $85 plus interest. After September 30, 2005, Cincinnati Bell has the right to call the equity for $83 plus interest.

~~Additionally~~Item we, AT&T Wireless and Cincinnati Bell agreed to amend the Cincinnati Bell Wireless Operating Agreement to remove the exclusivity arrangement applicable to AT&T Wireless, which will allow us to provide continuing service, after the closing of our acquisition of AT&T Wireless, in areas where Cincinnati Bell Wireless currently has operations6. Exhibits

~~The closing of this transaction would be~~(a) Exhibits ~~contingent upon closing of our acquisition of AT&T Wireless.~~


Number			Title

	31	.1	Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1*	Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
	32	.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.


*	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.

CINGULAR WIRELESS LLC

PART I II — ~~FINANCIAL~~OTHER INFORMATION ~~(Dollars in Millions)~~

~~Item~~ CAUTIONARY 3.LANGUAGE ~~Quantitative~~CONCERNING ~~and~~FORWARD-LOOKING ~~Qualitative Disclosures About Market Risk~~STATEMENTS

~~For~~In aaddition ~~complete~~to ~~discussion~~historical ofinformation, ~~our~~this ~~market~~document ~~risks,~~contains ~~you~~forward-looking ~~should~~statements ~~refer~~regarding ~~to Item 7a~~events, ~~Quantitative~~financial ~~and Qualitative~~trends, ~~Disclosure~~critical ~~About~~accounting ~~Market~~policies, ~~Risk~~contractual inobligations ~~our Annual Report on~~and ~~Form 10-K~~estimates ~~for~~that ~~the~~may ~~year~~affect ~~ended~~our ~~December 31,~~future ~~2003.~~operating ~~Our primary exposure to market risks~~ results ~~from changes in~~, ~~interest~~financial ~~rates~~position and tocash ~~a lesser degree from foreign currency exchange rates~~flows. WeThese dostatements ~~not~~are ~~anticipate~~based ~~any significant changes in~~on ~~our~~assumptions ~~objectives~~ and ~~strategies~~estimates ~~with~~and ~~respect~~are subject to ~~managing~~risks ~~such~~and ~~exposures~~uncertainties.

AtThere ~~June 30,~~are ~~2004,~~possible wedevelopments ~~had~~that ~~outstanding~~could ~~an aggregate~~cause ofour ~~$9,678~~actual results into ~~unsecured,~~differ ~~subordinated~~materially ~~member loans~~ from ~~SBC~~ ~~and~~those ~~BellSouth~~forecasted ~~with~~or aimplied ~~fixed interest rate of 6.0% and a~~by ~~stated~~our ~~maturity~~forward-looking ~~of June 30, 2008~~statements. InYou ~~addition,~~are wecautioned ~~currently have~~not ~~outstanding $2,000 of unsecured senior notes with fixed interest rates ranging from 5.625%~~ to ~~7.125% and with maturity~~place ~~dates~~undue ~~between~~reliance ~~2006~~on ~~and~~these ~~2031.~~forward-looking ~~As of June 30~~statements, ~~2004,~~which ~~we had $250 of~~are ~~fixed-to-floating~~current ~~interest~~only ~~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~~ asdate of ~~June~~this ~~30, 2004 by $3 per annum~~filing. We ~~also~~disclaim ~~have capital~~any ~~leases~~intention ~~outstanding~~or ofobligation ~~$911~~to ~~with~~update ~~fixed~~or ~~interest~~revise ~~rates~~any ~~ranging~~forward-looking ~~from~~statements, ~~6.0%~~whether toas ~~9.6%~~a ~~and~~result of ~~$21~~new ~~with~~information, ~~fixed interest rates ranging~~future ~~from~~events ~~5.56%~~or ~~to 5~~otherwise.~~93%.~~

AsWhile the below list of ~~June 30~~cautionary statements is not exhaustive, some ~~2004~~factors, wein ~~had~~addition ~~$320~~to ofthose ~~floating rate~~contained ~~borrowings.~~throughout Athis document, ~~change~~that incould ~~interest~~affect ~~rates~~future ofoperating ~~100~~results, ~~basis points~~financial ~~would~~position ~~change~~and ~~our~~cash ~~interest~~flows ~~expense~~and oncould ~~floating~~cause ~~rate~~actual ~~debt~~results ~~balances~~to differ asmaterially offrom ~~June 30,~~those ~~2004~~expressed byor ~~less~~implied ~~than~~in $4the forward-looking ~~per~~statements ~~annum.~~are:

~~The~~• ~~fair~~the ~~values~~pervasive ofand ~~our~~intensifying ~~foreign~~competition ~~currency derivatives~~in ~~are~~all ~~subject~~markets towhere ~~fluctuations~~we inoperate; ~~foreign~~• ~~exchange rates.~~failure Weto ~~use~~quickly ~~forward~~realize ~~foreign~~capital ~~currency~~expense ~~exchange~~and ~~contracts~~operational ~~to offset~~synergies ~~foreign~~from ~~exchange~~the ~~gains~~acquisition ~~and~~of ~~losses~~AT&T onWireless ~~Japanese Yen-denominated~~as ~~capital~~a ~~lease~~result ~~obligations. As~~ of ~~June 30~~mechanical, ~~2004~~ technical, ~~the~~logistical, ~~approximate~~regulatory ~~fair~~and ~~value~~other offactors; ~~these~~• ~~foreign~~delays ~~currency hedging~~or ~~instruments~~inability ~~was~~of avendors ~~loss~~to ofdeliver ~~$7.~~hardware, ~~The~~software, ~~potential~~handsets ~~gain~~ or ~~loss in~~network ~~the~~equipment, ~~fair~~including ~~value~~failure ofto deliver such ~~financial~~equipment ~~instruments~~free ~~from~~of ~~a hypothetical~~claims, ~~10%~~including ~~decrease~~patent orclaims, ~~increase~~of inother parties; • problems associated with the ~~Japanese~~transition ~~Yen relative~~of our network to ~~the~~higher ~~U.S.~~speed ~~Dollar~~technologies; ~~would~~• beslow ~~less~~growth ~~than~~of $5our asdata services due to a lack of ~~June 30~~ popular applications, ~~2004~~terminal equipment, ~~although~~advanced ~~this~~technology ~~would~~and beother ~~primarily~~factors; ~~offset~~• ~~by the~~sluggish ~~decrease~~economic orand ~~increase~~employment conditions in the ~~fair~~markets ~~value~~we ofserve; • the ~~capital~~final ~~lease obligations.~~outcome ~~The~~of ~~fair~~FCC ~~value~~proceedings, isincluding ~~based~~rulemakings onand ~~dealer~~judicial ~~quotes~~review, ~~considering~~ ~~current~~if ~~exchange~~any, ~~rates.~~of ~~There~~such isproceedings; ~~not~~• aenactment ~~cash~~of ~~flow impact~~additional orstate ~~earnings~~and ~~risk~~federal ~~associated~~laws, ~~with~~regulations ~~changes~~and inrequirements ~~the~~pertaining ~~fair value~~to ofour ~~the~~operations; ~~foreign~~and ~~currency~~• ~~hedging~~the ~~instruments~~outcome ~~and~~of ~~the underlying~~pending ~~capital~~or ~~lease~~threatened ~~obligations~~complaints and litigation.

27 ~~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 immediately following Part II, Item 6 of this Quarterly Report.

27 Table of Contents

~~Table~~ CINGULAR ofWIRELESS ~~Contents~~LLC

~~CINGULAR~~PART II — ~~WIRELESS~~OTHER ~~LLC~~INFORMATION

~~PART I — FINANCIAL INFORMATION~~SIGNATURE ~~(Dollars in Millions)~~

~~Item~~ Pursuant 4.to ~~Controls~~the ~~and~~requirements ~~Procedures~~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.

~~(a) As~~Cingular ofWireless the end of the period covered by this quarterly 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 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. LLC

~~(b) During~~By: ~~the~~Cingular ~~evaluation~~Wireless ~~referred to in Item 4(a) above~~Corporation, 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.

28 as Manager

~~Table~~By: of/s/ ~~Contents~~Peter A. Ritcher

~~CINGULAR~~Peter ~~WIRELESS~~A. ~~LLC~~ Ritcher Chief Financial Officer (Principal Financial Officer)

~~PART~~Date: IIMay —3, ~~OTHER~~2006 ~~INFORMATION~~

~~Item 1. Legal Proceedings~~28

InTable 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. That recommendation is under review by the full Commission and is likely to be addressed before the end of this year. Cingular opposes the Presiding Officer’s decision. Contents

WeCINGULAR ~~are~~WIRELESS ~~a party to various legal actions and~~LLC regulatory proceedings relating to matters that are incidental to the conduct of our business. These involve disputes with and inquiries by private parties and governmental entities over alleged patent infringement, agency and reseller relationships, alleged unfair competition, marketing, advertising, promotions, sales, labor practices, billing and collection practices and alleged health effects of wireless phones. We are also subject to claims incidental to the normal conduct of our business, including actions by customers, vendors and employees and former employees. We believe that these matters will not be material to our financial position, results of operations or cash flows.

~~Item~~ PART II — 2.OTHER ~~Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities~~INFORMATION

~~None.~~Exhibit Index

~~Item~~ (Exhibits Physically 3.Filed ~~Defaults upon Senior Securities~~Herewith)

None.


Number		Title

	31.1	Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
	32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

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

None.

Item 5. Other Information

None.

CINGULAR WIRELESS LLC

PART II — OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

Number			Title
	10	.65	Revolving Credit Agreement by and among BellSouth Corporation, SBC Communications, Inc. and Cingular Wireless LLC dated as of August 1, 2004.
	10	.66	Interest Purchase Agreement by and among T-Mobile USA, Inc., Omnipoint Communications, Inc., Cingular Wireless LLC and SBC Wireless LLC dated as of May 24, 2004. (Portions omitted pursuant to a request for confidential treatment)
	31	.1	Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1*	Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
	32	.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

* 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

•	On April 20, 2004, 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 March 31, 2004 and selected financial statement and operating data at and for the quarter ended March 31, 2004 for Cingular Wireless LLC and at and for the comparable date and period in 2003.
•	On May 26, 2004, we filed a Form 8-K, reporting on Item 5, Other Events, announcing an agreement with T-Mobile USA to end our network infrastructure venture.

No other reports on Form 8-K were furnished or filed during the three months ended June 30, 2004.

CINGULAR WIRELESS LLC

PART II — OTHER INFORMATION

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; • delay in closing, failure to quickly realize capital and expense synergies from, and possible dispositions associated with, the acquisition of AT&T Wireless as a result of technical, logistical, regulatory, business and other factors; • problems associated with the transition of our network to higher speed technologies; • slow growth of our data services due to lack of popular applications, terminal equipment, advanced technology and other factors; • sluggish economic and employment conditions in the markets we serve; • the final outcome of FCC proceedings, including rulemakings, and judicial review, if any, of such proceedings; • enactment and impact of state and federal laws, regulations and requirements pertaining to our operations; and • the outcome of pending or threatened complaints and litigation.

CINGULAR WIRELESS LLC

PART II — OTHER INFORMATION

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CINGULAR WIRELESS LLC

By: CINGULAR WIRELESS CORPORATION,

as Manager

By: /s/ PETER A. RITCHER

Peter A. Ritcher Chief Financial Officer (Principal Financial Officer)

Date: August 5, 2004

CINGULAR WIRELESS LLC

EXHIBIT INDEX

Exhibit
Number			Title
	10	.65	Revolving Credit Agreement by and among BellSouth Corporation, SBC Communications, Inc. and Cingular Wireless LLC dated as of August 1, 2004.
	10	.66	Interest Purchase Agreement by and among T-Mobile USA, Inc., Omnipoint Communications, Inc., Cingular Wireless LLC and SBC Wireless LLC dated as of May 24, 2004. (Portions omitted pursuant to a request for confidential treatment)
	31	.1	Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1*	Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
	32	.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

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