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2006 AT&T Annual Report : :
77
NOTE 18. SUBSIDIARY FINANCIAL INFORMATION
We have fully and unconditionally guaranteed a 2006 debt
issuance of BellSouth, which is a wholly-owned subsidiary of
AT&T as of December 29, 2006. (See Note 2)
In accordance with Securities and Exchange Commission
(SEC) rules, we are providing the following condensed
consolidating financial information. The Parent column
presents investments in all subsidiaries under the equity
method of accounting. We have listed BellSouth separately
because we have guaranteed securities that are legal
obligations of BellSouth that would otherwise require SEC
periodic reporting for 2006. In the following Condensed
Consolidating Statements of Income and the Condensed
Consolidating Statements of Cash Flows, the BellSouth
column represents 100% of the results from BellSouth for
the two days following the December 29, 2006 acquisition.
All other wholly-owned subsidiaries are presented in the
Other column. The consolidating adjustments column (Adjs.)
eliminates the intercompany balances and transactions
between our subsidiaries.
Condensed Consolidating Statements of Income
For the Twelve Months Ended December 31, 2006
Parent BellSouth Other Adjs. Total
Total operating revenues $ — $113 $71,845 $(8,903) $63,055
Total operating expenses (184) 82 61,772 (8,903) 52,767
Operating Income 184 31 10,073 — 10,288
Interest expense 1,019 6 3,521 (2,703) 1,843
Equity in net income of affiliates 5,874 4 2,511 (6,346) 2,043
Other income (expense) – net 2,926 3 (253) (2,283) 393
Income Before Income Taxes 7,965 32 8,810 (5,926) 10,881
Income taxes 609 10 2,906 — 3,525
Net Income $7,356 $ 22 $ 5,904 $(5,926) $ 7,356
Condensed Consolidating Statements of Income
For the Twelve Months Ended December 31, 2005
Parent BellSouth Other Adjs. Total
Total operating revenues $ — $ — $49,563 $(5,799) $43,764
Total operating expenses (142) — 43,537 (5,799) 37,596
Operating Income 142 — 6,026 — 6,168
Interest expense 868 — 2,590 (2,002) 1,456
Equity in net income of affiliates 2,634 — 711 (2,736) 609
Other income (expense) – net 2,407 — (81) (1,929) 397
Income Before Income Taxes 4,315 — 4,066 (2,663) 5,718
Income taxes (471) — 1,403 — 932
Net Income $4,786 $ — $ 2,663 $(2,663) $ 4,786
Condensed Consolidating Statements of Income
For the Twelve Months Ended December 31, 2004
Parent BellSouth Other Adjs. Total
Total operating revenues $ — $ — $45,650 $(4,917) $40,733
Total operating expenses (182) — 39,931 (4,917) 34,832
Operating Income 182 — 5,719 — 5,901
Interest expense 417 — 1,255 (649) 1,023
Equity in net income of affiliates 5,035 — 1,714 (5,876) 873
Other income (expense) – net 1,039 — 183 192 1,414
Income Before Income Taxes 5,839 — 6,361 (5,035) 7,165
Income taxes (48) — 2,234 — 2,186
Income from Continuing Operations 5,887 — 4,127 (5,035) 4,979
Income from Discontinued Operations, net of tax — — 908 — 908
Net Income $5,887 $ — $ 5,035 $(5,035) $ 5,887