EX-99 2 exh99eightk3q102405.txt EXH. 99.1 - AT&T CORP. PRESS RELEASE - 10/21/05 News Release -------------------------------------------------------------------------------- FOR RELEASE FRIDAY, OCTOBER 21, 2005 AT&T Announces Third-Quarter 2005 Earnings o Third-quarter earnings per diluted share of $0.64 o Consolidated revenue of $6.6 billion o Operating income of $955 million o Third-quarter cash from operating activities of $1.4 billion o Increased full-year 2005 revenue and operating margin guidance BEDMINSTER, N.J. -- AT&T (NYSE: T) today reported net income of $520 million, or earnings per diluted share of $0.64, for the third quarter of 2005. This result includes a previously announced pretax charge of $92 million, or $0.06 per diluted share, related to the company's aircraft lease investments. AT&T's current-quarter net income compares to a net loss of $7.1 billion, or a loss per share of $8.99, in the third quarter of 2004, which included a pretax asset impairment charge of $11.4 billion, or $8.86 per share, and pretax restructuring and other charges of $1.1 billion, or $0.84 per share. Third quarter of 2004 also included a pretax charge of $46 million, or $0.04 per share, related to the company's aircraft lease investments. "AT&T's solid third quarter results demonstrate the successful execution of our strategies across both our consumer and business portfolios," said AT&T Chairman and Chief Executive Officer David W. Dorman. "We've expanded our margins in the consumer and small business markets as we wind down these businesses, and our enterprise portfolio has benefited from significant cost structure improvement, revenue and volume growth in IP and enhanced services and share expansion in other product lines." AT&T reported third-quarter 2005 consolidated revenue of $6.6 billion, which includes $5.1 billion from AT&T Business and $1.5 billion from AT&T Consumer. Consolidated revenue declined 13.3 percent versus the third quarter of 2004, primarily due to continued declines in long distance (LD) voice and data revenue. The company reported consolidated operating income of $1.0 billion in the third quarter of 2005, for a margin of 14.4 percent. This compares to a consolidated operating loss of $11.3 billion in the prior-year third quarter. Excluding asset impairment and net restructuring and other charges of $12.5 billion, operating income in the third quarter of 2004 was $1.1 billion, for an operating margin of 15.0 percent. The company noted that ongoing efforts to reduce costs and improve productivity have helped reduce the rate of operating income decline, notwithstanding the ongoing revenue declines. PAGE> AT&T UNIT HIGHLIGHTS AT&T Business o Revenue was $5.1 billion, a decline of 9.5 percent from the prior-year third quarter, primarily driven by ongoing pricing pressure in traditional voice and data services and volume weakness in data services. Continued year-over-year growth in IP&E services favorably impacted revenue. o Long distance voice revenue decreased 12.7 percent from the prior-year third quarter. Ongoing pricing pressure led to revenue declines, despite an approximate 10 percent increase in volumes, as growth in wholesale more than offset the decline in retail volumes. o Data revenue declined 11.1 percent from the prior-year third quarter as a result of continued pricing pressure and lower volumes, including the impact of technology migration. Data revenue was also negatively impacted by approximately 1.5 percentage points due to higher customer disconnects of prepaid network capacity in the prior year third quarter. o Local voice revenue declined 19.7 percent from the prior-year third quarter, reflecting lower payphone-related revenue as a result of the sale of the company's National Public Markets business. The decline also reflects the company's ongoing strategy of selectively approaching the small business market, placing a greater focus on profitability than overall market share. o IP&E-services revenue increased 7.3 percent over the prior-year third quarter, led by growth in next-generation networking services such as Enhanced Virtual Private Network (E-VPN) and IP-enabled frame relay services, partially offset by declines in mature products such as Managed Internet Access and Virtual Private Networks. o Operating income totaled $513 million for the third quarter of 2005, yielding an operating margin of 10.0 percent. This compares to an operating loss of $11.1 billion in the prior-year third quarter. Excluding asset impairment and net restructuring and other charges of $11.9 billion, operating income in the third quarter of 2004 was $764 million, for an operating margin of 13.5 percent. The decline in operating income in the third quarter of 2005 reflects decreased long distance voice and data services revenue, partially offset by a reduction in operating expenses due to cost controls. o Capital expenditures were $344 million as AT&T Business continues to upgrade its network and integrate its systems to further rationalize the company's cost structure, improve the customer experience and support growth in next-generation products and services. o During the quarter, a number of sizable customer wins and contract extensions were signed with such leading companies as Wal-Mart, Northrop Grumman Corporation, Sony Electronics, Enterprise Rent-A-Car and Panasonic, among many others. o In addition to numerous other industry accolades received during the quarter, AT&T received the Frost & Sullivan Award for "Product Line Strategy" in managed telecom services, recognizing the company's comprehensive suite of managed services for enterprise customers. Additionally, AT&T received the Frost & Sullivan Award for "Ethernet Market Leadership." AT&T Consumer o Revenue was $1.5 billion, a decline of 24.3 percent versus the prior-year third quarter, largely driven by a decline in standalone long distance revenue due to volume declines associated with competitive customer losses and the continued impact of wireless and Internet substitution, partially offset by targeted price increases. In addition, the revenue decline was impacted by decreased bundled revenue. o Operating income totaled $541 million, yielding an operating margin of 36.1 percent. This compares to operating income of $281 million in the prior-year third quarter. Excluding asset impairment and net restructuring and other charges of $188 million, operating income in the third quarter of 2004 was $469 million, for an operating margin of 23.7 percent. o The year-over-year increase in operating income and margin reflects a substantial decrease in operating expenses, primarily attributable to the strategic decision to discontinue marketing to residential local and standalone long distance customers. OTHER CONSOLIDATED FINANCIAL HIGHLIGHTS o Given the trends experienced throughout the first three quarters of 2005, AT&T now expects consolidated revenue for the full year to be at or above $26.5 billion, approximately $500 million above the high-end of the revenue guidance range set at the beginning of the year. The company also expects its consolidated operating margin percentage for 2005, excluding restructuring and merger-related transaction costs, to be in the low teens, outpacing prior expectations. o The following items were included in the third quarter results: o a previously mentioned pretax charge of $92 million, or $0.06 per diluted share, in the third quarter of 2005 and a pretax charge of $46 million, of $0.04 per diluted share, in the third quarter of 2004, related to the company's investment in aircraft leveraged leases; o transaction costs of $20 million, or $0.02 per diluted share, in the third quarter of 2005, related to AT&T's pending merger with SBC Communications, which we expect to close by the end of 2005; and o a $41 million pretax benefit, or $0.03 per diluted share, in the third quarter of 2005, from insurance proceeds related to business losses sustained during 2001. o Free cash flow was $1.0 billion for the quarter. Free cash flow is defined as cash flows provided by operating activities of $1.4 billion less cash used for capital expenditures and other additions of $0.4 billion. o AT&T ended the quarter with net debt of $4.7 billion. Net debt is defined as total debt of $7.7 billion less cash of $2.8 billion and net foreign debt fluctuations of $0.1 billion. o Consolidated capital expenditures for the quarter were $349 million. DEFINITIONS and NOTES AT&T Business LD Voice - includes all of AT&T's domestic and international LD revenue, including Intralata toll when purchased as part of an LD calling plan. Local Voice - includes all local calling and feature revenue, Intralata toll when purchased as part of a local calling plan, as well as Inter-carrier local revenue. Data Services- includes bandwidth services (dedicated private line services through high-capacity optical transport), frame relay and asynchronous transfer mode (ATM) revenue for LD and local, as well as revenue for managed data services. Internet Protocol & Enhanced Services (IP&E-services) - includes all services that ride on the IP common backbone or that use IP technology, including managed IP services, as well as application services (e.g., hosting, security). Outsourcing, Professional Services & Other - includes complex bundled solutions primarily in the wide area/local area network space, AT&T's professional services revenue associated with the company's federal government customers, as well as all other Business Services revenue (and eliminations) not previously defined. Data, IP&E-Services - Percent Managed - managed services refers to AT&T's management of a client's network or network and applications including applications that extend to the customer premise equipment. Data, IP&E-Services - Percent International - a data service that either originates or terminates outside of the United States, or an IP&E-service installed or wholly delivered outside the United States. AT&T Consumer Bundled Services - includes any customer with a local relationship as a starting point, and all other AT&T subscription-based voice products provided to that customer. Standalone LD, Transactional & Other Services - includes any customer with solely a long distance relationship, non-voice products, or a non subscription-based relationship. Local Customers - residential customers who subscribe to AT&T local service. Other Definitions and Notes Foreign currency fluctuations - represents mark-to-market adjustments, net of cash collateral collected, that increased the debt balance by approximately $0.1 billion at September 30, 2005, from December 31, 2004, on non-U.S. denominated debt of approximately $0.6 billion. AT&T has entered into foreign exchange hedges that substantially offset the fluctuations in the debt balance. The offsetting mark-to-market adjustments of the hedges are included in "other current assets" and "other assets" on the balance sheet. ------------------------------------------------------------------------------------------------------------------------------------

AT&T Corp. Consolidated Statements of Operations (Unaudited) Dollars in millions (except per share amounts) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2005 2004 2005 2004 REVENUE AT&T Business $ 5,109 $ 5,645 $ 15,583 $ 17,128 AT&T Consumer 1,499 1,980 4,777 6,098 Corporate and Other 12 13 35 38 -------- -------- --------- --------- Total Revenue 6,620 7,638 20,395 23,264 OPERATING EXPENSES Access and other connection 2,317 2,411 7,111 7,530 Costs of services and products 1,498 1,783 4,686 5,406 Selling, general and administrative 1,228 1,653 3,830 5,160 Depreciation and amortization 623 647 1,889 3,128 Asset impairment and net restructuring and other charges (1) 12,469 35 12,736 -------- -------- --------- --------- Total operating expenses 5,665 18,963 17,551 33,960 Operating income (loss) 955 (11,325) 2,844 (10,696) Other income (expense), net 10 (34) (113) (172) Interest (expense) (166) (192) (538) (611) -------- -------- --------- --------- Income (loss) before income taxes, minority interest (loss) income and net earnings related to equity investments 799 (11,551) 2,193 (11,479) (Provision) benefit for income taxes (279) 4,402 (845) 4,741 Minority interest (loss) income (1) - (1) 1 Net earnings related to equity investments 1 2 9 2 -------- -------- --------- --------- Net income (loss) $ 520 $(7,147) $ 1,356 $ (6,735) ======== ======== ========= ========= Weighted-average common shares (millions) 803 795 801 794 Weighted-average common and potential common shares (millions) 812 795 809 794 Earnings (loss) per basic share $ 0.65 $ (8.99) $ 1.69 $ (8.48) Earnings (loss) per diluted share $ 0.64 $ (8.99) $ 1.68 $ (8.48) Dividends declared per share $ 0.2375 $ 0.2375 $ 0.7125 $ 0.7125 ------------------------------------------------------------------------------------------------------------------------------------

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AT&T Corp. Consolidated Statements of Operations (unaudited) Dollars in millions (except per share amounts) 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q04 2004 REVENUE AT&T Business $ 5,109 $ 5,155 $ 5,319 $ 5,454 $ 5,645 $ 5,611 $ 5,872 $22,582 AT&T Consumer 1,499 1,593 1,685 1,806 1,980 2,011 2,107 7,904 Corporate and Other 12 12 11 13 13 14 11 51 Total revenue 6,620 6,760 7,015 7,273 7,638 7,636 7,990 30,537 OPERATING EXPENSES Access and other connection 2,317 2,390 2,404 2,924 2,411 2,481 2,638 10,454 Costs of services and products 1,498 1,560 1,628 1,668 1,783 1,759 1,864 7,074 Selling, general and administrative 1,228 1,325 1,277 1,397 1,653 1,763 1,744 6,557 Depreciation and amortization 623 630 636 640 647 1,231 1,250 3,768 Asset impairment and net restructuring and other charges (1) 36 - 36 12,469 54 213 12,772 Total operating expenses 5,665 5,941 5,945 6,665 18,963 7,288 7,709 40,625 Operating income (loss) 955 819 1,070 608 (11,325) 348 281 (10,088) Other income (expense), net 10 (153) 30 28 (34) 36 (174) (144) Interest (expense) (166) (169) (203) (192) (192) (191) (228) (803) Income (loss) before income taxes, minority interest (loss) income and net earnings (losses) related to equity investments 799 497 897 444 (11,551) 193 (121) (11,035) (Provision) benefit for income taxes (279) (198) (368) (181) 4,402 (87) 426 4,560 Minority interest (loss) income (1) - - - - 1 - 1 Net earnings (losses) related to equity investments 1 8 - 3 2 1 (1) 5 Net income (loss) $ 520 $ 307 $ 529 $ 266 $(7,147) $ 108 $ 304 $(6,469) Weighted-average common shares (millions) 803 801 800 797 795 794 793 795 Weighted-average common shares and potential common shares (millions) 812 809 806 803 795 797 796 795 Earnings (loss) per basic share $ 0.65 $ 0.38 $ 0.66 $ 0.33 $ (8.99) $ 0.14 $ 0.38 $ (8.14) Earnings (loss) per diluted share $ 0.64 $ 0.38 $ 0.66 $ 0.33 $ (8.99) $ 0.14 $ 0.38 $ (8.14) ------------------------------------------------------------------------------------------------------------------------------------

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AT&T Corp. Historical Segment Data (Unaudited) Dollars in millions 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q04 2004 AT&T Business LD Voice $ 2,063 $ 2,080 $ 2,168 $ 2,163 $ 2,364 $ 2,386 $ 2,613 $ 9,526 Local Voice 313 364 371 490 390 404 389 1,673 Total Voice 2,376 2,444 2,539 2,653 2,754 2,790 3,002 11,199 Data Services 1,505 1,518 1,585 1,595 1,693 1,690 1,715 6,693 IP&E-Services 630 619 589 625 587 565 553 2,330 Total Data and IP&E-Services 2,135 2,137 2,174 2,220 2,280 2,255 2,268 9,023 Outsourcing, Professional Services & Other 598 574 606 581 611 566 602 2,360 Total revenue 5,109 5,155 5,319 5,454 5,645 5,611 5,872 22,582 Operating income (loss) (1) (5) 513 528 588 781 (11,095) 152 83 (10,079) Operating margin 10.0% 10.2% 11.0% 14.3% (196.5%) 2.7% 1.4% (44.6%) Capital expenditures 344 387 332 377 391 463 470 1,701 Depreciation & amortization (5) 596 596 601 607 610 1,176 1,192 3,585 Total Data and IP&E-Services - % managed 32% 32% 32% 33% 32% 32% 32% 32% Total Data and IP&E-Services - % international 15% 16% 16% 16% 15% 15% 15% 15% LD volume growth - yr/yr 10% 1% (3%) (2%) (2%) 0% 2% 0% LD volume % wholesale 63% 59% 57% 57% 56% 54% 54% 55% AT&T Consumer Standalone LD, Transactional and Other Services $ 924 $ 974 $ 1,025 $ 1,116 $ 1,256 $ 1,327 $ 1,462 $ 5,161 Bundled Services 575 619 660 690 724 684 645 2,743 Total revenue 1,499 1,593 1,685 1,806 1,980 2,011 2,107 7,904 Operating income (loss) (2) (5) (6) 541 489 575 (60) 281 240 371 832 Operating margin 36.1% 30.7% 34.1% (3.3%) 14.2% 11.9% 17.6% 10.5% Capital expenditures 0 0 0 5 9 15 13 42 Depreciation & amortization (5) 9 14 12 13 15 33 32 93 Local customers (in thousands) 3,301 3,565 3,859 4,156 4,477 4,677 4,364 4,156 Corporate and Other Revenue $ 12 $ 12 $ 11 $ 13 $ 13 $ 14 $ 11 $ 51 Operating (loss) (3) (99) (198) (93) (113) (511) (44) (173) (841) Capital expenditures 5 6 3 14 6 2 2 24 Depreciation & amortization 18 20 23 20 22 22 26 90 Total AT&T Revenue $ 6,620 $ 6,760 $ 7,015 $ 7,273 $ 7,638 $ 7,636 $ 7,990 $30,537 Operating income (loss) (4) (6) 955 819 1,070 608 (11,325) 348 281 (10,088) Operating margin 14.4% 12.1% 15.3% 8.4% (148.3%) 4.6% 3.5% (33.0%) Capital expenditures 349 393 335 396 406 480 485 1,767 Depreciation & amortization (5) 623 630 636 640 647 1,231 1,250 3,768 (1) Includes asset impairment and net restructuring and other charges of $(18M) in 2Q05, $9M in 4Q04, $11,859M in 3Q04, $52M in 2Q04 and $91M in 1Q04, totaling $12,011M in 2004. (2) Includes asset impairment and net restructuring and other charges of $10M in 2Q05, $188M in 3Q04 and $1M in 1Q04, totaling $189M in 2004. (3) Includes asset impairment and net restructuring and other charges of $(1M) in 3Q05, $44M in 2Q05, $27M in 4Q04, $422M in 3Q04, $2M in 2Q04 and $121M in 1Q04, totaling $572M in 2004. (4) Includes asset impairment and net restructuring and other charges of $(1M) in 3Q05, $36M in 2Q05, $36M in 4Q04, $12,469M in 3Q04, $54M in 2Q04 and $213M in 1Q04, totaling $12,772M in 2004. (5) As a result of the third-quarter 2004 asset impairment charge, second-quarter 2005, first-quarter 2005, fourth-quarter 2004 and third-quarter 2004 depreciation and amortization expense decreased by $542 million, $533 million, $538 million and $527 million, respectively, for AT&T Business and $6 million, $7 million, $8 million and $10 million, respectively, for AT&T Consumer. In addition, as a result of the transport service arrangement between AT&T Business and AT&T Consumer, network-related charges from AT&T Business (recorded as contra-expense) to AT&T Consumer were reduced by $29 million, $24 million, $30 million and $28 million in the second-quarter 2005, first-quarter 2005, fourth-quarter 2004 and third-quarter 2004, respectively, as a result of the lower depreciation and amortization expense recorded by AT&T Business. This resulted in a reduction in AT&T Business' operating income and an increase in AT&T Consumer's operating income. (6) Includes $553M prepaid card accrual in 4Q04. ------------------------------------------------------------------------------------------------------------------------------------

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AT&T Corp. Consolidated Balance Sheets (Unaudited) Dollars in Millions September 30, December 31, 2005 2004 ASSETS Cash and cash equivalents $ 2,837 $ 3,698 Accounts receivable, less allowances of $401 and $523 2,994 3,195 Deferred income taxes 1,016 1,111 Other current assets 546 1,383 -------- -------- Total Current Assets 7,393 9,387 Property, plant and equipment, net of accumulated depreciation of $2,791 and $1,588 10,845 11,509 Goodwill 4,753 4,888 Other purchased intangible assets, net of accumulated amortization of $438 and $428 290 375 Prepaid pension costs 4,149 3,991 Other assets 2,278 2,654 -------- -------- TOTAL ASSETS $ 29,708 $ 32,804 ======== ======== LIABILITIES Accounts payable and accrued expenses $ 2,361 $ 2,716 Compensation and benefit-related liabilities 1,684 2,193 Debt maturing within one year 522 1,886 Other current liabilities 2,456 2,293 -------- -------- Total Current Liabilities 7,023 9,088 Long-term debt 7,160 8,779 Long-term compensation and benefit-related liabilities 3,240 3,322 Deferred income taxes 1,667 1,356 Other long-term liabilities and deferred credits 2,743 3,240 -------- -------- Total Liabilities 21,833 25,785 -------- -------- SHAREOWNERS' EQUITY Common Stock, $1 par value, authorized 2,500,000,000 shares; issued and outstanding 803,013,312 shares (net of 171,983,367 treasury shares) at September 30, 2005 and 798,570,623 shares (net of 171,983,367 treasury shares) at December 31, 2004 803 799 Additional paid-in capital 26,787 27,170 Accumulated deficit (19,824) (21,180) Accumulated other comprehensive income 109 230 -------- -------- Total Shareowners' Equity 7,875 7,019 -------- -------- TOTAL LIABILITIES & SHAREOWNERS' EQUITY $ 29,708 $ 32,804 ======== ======== ------------------------------------------------------------------------------------------------------------------------------------

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AT&T Corp. Consolidated Statements of Cash Flows (Unaudited) Dollars in Millions For the Nine Months Ended September 30, 2005 2004 Operating Activities Net income $ 1,356 $ (6,735) Adjustments to reconcile net income to net cash provided by operating activities: Asset impairment and net restructuring and other charges 21 12,662 Net (gains) on sales of assets (6) (16) Loss on early extinguishment of debt 206 301 Depreciation and amortization 1,889 3,128 Provision for uncollectible receivables 122 371 Deferred income taxes 478 (4,469) Decrease in receivables 90 178 Decrease in accounts payable and accrued expenses (387) (488) Net change in other operating assets and liabilities (1,012) (839) Other adjustments, net (29) (82) ---------------------- Net Cash Provided by Operating Activities 2,728 4,011 ---------------------- Investing Activities Capital expenditures and other additions (1,072) (1,459) Proceeds from sale or disposal of property, plant and equipment 150 58 Investment distributions and sales 14 37 Net dispositions of businesses 82 8 Decrease in restricted cash 546 7 Other investing activities, net 27 9 --------------------- Net Cash Used in Investing Activities (253) (1,340) --------------------- Financing Activities Retirement of long-term debt, including redemption premiums (2,723) (3,711) Decrease in short-term borrowings, net (316) (511) Issuance of AT&T common shares 68 45 Dividends paid on common stock (570) (565) Other financing activities, net 205 345 ---------------------- Net Cash Used in Financing Activities (3,336) (4,397) ---------------------- Net decrease in cash and cash equivalents (861) (1,726) Cash and cash equivalents at beginning of year 3,698 4,353 ---------------------- Cash and Cash Equivalents at End of Period $ 2,837 2,627 ---------------------- ------------------------------------------------------------------------------------------------------------------------------------

Reconciliation of Non-GAAP Measures AT&T is providing information on net debt and adjusted operating income and related margins because these measures are commonly used by the investment community for evaluation purposes. They should be considered in addition to, but not in lieu of, other measures of liquidity, profitability and cash flows reported in accordance with generally accepted accounting principles. Additionally, they may not be comparable to similarly captioned measures reported by other companies. Net Debt

-------------------------------------------------------------------------------- Net debt is defined as total debt, less cash and net foreign debt fluctuations: (dollars in billions) September 30, 2005* Total debt $7.7 Less: Cash 2.8 Foreign debt fluctuations 0.1 ------------------ Net debt $4.7 ================== * Numbers may not add due to rounding --------------------------------------------------------------------------------

Operating Income

------------------------------------------------------------------------------------------------------------------------------------ (dollars in millions) For the three months ended September 30, 2004 ------------------------------------------------------------------------------------------------------------------------------------ AT&T Business AT&T Consumer Corp. and Other Consolidated ------------------------------------------------------------------------------------------------------------------------------------ Reported operating (loss) income and margin $ (11,095) (196.5)% $ 281 14.2% $ (511) NMF $(11,325) (148.3)% ------------------------------------------------------------------------------------------------------------------------------------ Add: Asset impairment and net restructuring and other charges 11,859 188 422 12,469 ------ --- --- ------ Adjusted operating income (loss) $ 764 13.5 % $ 469 23.7% $ (89) NMF $ 1,144 15.0 % ------------------------------------------------------------------------------------------------------------------------------------

NOTE TO FINANCIAL MEDIA: AT&T executives will discuss the company's performance in a two-way conference call for financial analysts at 8:15 a.m. ET today. Reporters are invited to listen to the call. U.S. callers should dial 888-428-4479 to access the call. Callers outside the U.S. should dial + 1-612-332-0630. In addition, Internet rebroadcasts of the call will be available on the AT&T Web site beginning later today. The Web site address is www.att.com/ir. An audio rebroadcast of the conference call will also be available beginning at 12:30 PM on Friday, October 21 through 12:00 AM on Friday, October 28. To access the audio rebroadcast, U.S. callers can dial 800-475-6701, access code 763294. Callers outside the U.S. should dial + 1-320-365-3844, access code 763294. The foregoing contains "forward-looking statements" which are based on management's beliefs as well as on a number of assumptions concerning future events made by and information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside AT&T's control, that could cause actual results to differ materially from such statements. These risk factors include the impact of increasing competition, continued capacity oversupply, regulatory uncertainty and the effects of technological substitution, among other risks. For a more detailed description of the factors that could cause such a difference, please see AT&T's10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission. AT&T disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results of AT&T. # # #