via Silicon Valley/San Jose Business Journal - January 26, 2006
The costs associated with the merger of SBC Communications Inc. and AT&T Corp. last fall resulted in a fourth-quarter charge of $866 million, the new AT&T Inc. said Thursday.
The financial results from San Antonio, Texas-based AT&T also include AT&T's portion of Cingular Wireless LLC's ongoing merger and amortization costs. That resulted in a charge of $707 million. In addition, AT&T's portion of Cingular's hurricane-related costs resulted in a charge of $20 million. AT&T owns a 60 percent stake in the Atlanta-based carrier.
AT&T also took a separate fourth-quarter charge of $106 million for workforce reduction costs not related to the merger.
The company did, however, experience a tax gain of $902 million, or 25 cents per share, from favorable tax settlements, which helped offset these charges.
According to purchase accounting rules, AT&T's most recent quarter includes SBC's stand-alone operations until the Nov. 18 merger and the combined SBC-AT&T operations for the remainder of the quarter. In addition, financial figures from the former AT&T Corp.'s fourth-quarter earnings for 2004 aren't factored into comparisons with the combined company's financial reports.
AT&T reported net income of $1.66 billion, or 46 cents per share, on revenue of $12.97 billion for the quarter ended Dec. 31.
That compares with net income from continuing operations of $688 million, or 21 cents per share, on revenue of $10.3 billion for the quarter ended Dec. 31. That figure reflects only SBC's operating results.
"The new AT&T has gotten off to a very strong start," AT&T Chairman and CEO Edward Whitacre Jr. said.
"We continue to execute well across our operations, and we have moved quickly on merger integration. The assets we acquired are in excellent shape, we did a thorough job of merger planning, we have retained key talent, and customer response to the new AT&T has been very positive."
Copyright 2006 San Jose Business Journal
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