SBC-ATT Merger Triggers $866 Million Charge
- From: San Jose Business Journal <sjbj@xxxxxxxxxxxxxxxxxx>
- Date: Fri, 27 Jan 2006 14:43:23 -0600
via Silicon Valley/San Jose Business Journal - January 26, 2006
http://sanjose.bizjournals.com/sanjose/stories/2006/01/23/daily48.html
Silicon Valley/San Jose Business Journal
SBC-AT&T Merger Costs Trigger $866M Charge
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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