Financial Data

SBC Communications Inc.

Consolidated Statements of Income

Dollars in millions except per share amounts

Unaudited Three Months Ended

		3/31/05			3/31/04	% Chg
Operating Revenues
Voice	$	5,086		$	5,213	-2.4	%
Data		2,824			2,647	6.7	%
Long-distance voice		901			749	20.3	%
Directory advertising		946			962	-1.7	%
Other		491			441	11.3	%
Total Operating Revenues		10,248			10,012	2.4	%
Operating Expenses
Cost of sales (exclusive of depreciation
and amortization shown separately below)		4,397			4,227	4.0	%
Selling, general and administrative		2,470			2,346	5.3	%
Depreciation and amortization		1,825			1,923	-5.1	%
Total Operating Expenses		8,692			8,496	2.3	%
Operating Income		1,556			1,516	2.6	%
Interest Expense		353			232	52.2	%
Interest Income		109			116	-6.0	%
Equity in Net Income (Loss) of Affiliates		(58	)		592	-
Other Income (Expense) - Net		47			861	-94.5	%
Income Before Income Taxes		1,301			2,853	-54.4	%
Income Taxes		416			942	-55.8	%
Income From Continuing Operations		885			1,911	-53.7	%
Income From Discontinued Operations, net of tax		-			26	-
Net Income	$	885		$	1,937	-54.3	%
Basic Earnings Per Share:
Income from Continuing Operations	$	0.27		$	0.58	-53.4	%
Net Income	$	0.27		$	0.59	-54.2	%
Weighted Average Common
Shares Outstanding (000,000)		3,303			3,308	-0.2	%
Diluted Earnings Per Share:
Income from Continuing Operations	$	0.27		$	0.58	-53.4	%
Net Income	$	0.27		$	0.58	-53.4	%
Weighted Average Common
Shares Outstanding with Dilution (000,000)		3,315			3,323	-0.2	%

Financial Data

SBC Communications Inc.

Statements of Segment Income

Dollars in millions

Unaudited

Three Months Ended

Wireline		3/31/05		3/31/04	% Chg
Segment Operating Revenues
Voice	$	5,086	$	5,213	-2.4	%
Data		2,824		2,647	6.7	%
Long-distance voice		901		749	20.3	%
Other		478		431	10.9	%
Total Segment Operating Revenues		9,289		9,040	2.8	%
Segment Operating Expenses
Cost of sales		4,182		4,021	4.0	%
Selling, general and administrative
Selling		1,662		1,663	-0.1	%
General and administrative		621		520	19.4	%
Selling, general and administrative		2,283		2,183	4.6	%
Depreciation and amortization		1,798		1,898	-5.3	%
Total Segment Operating Expenses		8,263		8,102	2.0	%
Segment Income	$	1,026	$	938	9.4	%

Cingular *

Segment Operating Revenues
Service revenues	$	7,419		$	3,583		-
Equipment sales		810			384		-
Total Segment Operating Revenues		8,229			3,967		-
Segment Operating Expenses
Cost of services and equipment sales		3,439			1,492		-
Selling, general and administrative		3,001			1,372		-
Depreciation and amortization		1,675			553		-
Total Segment Operating Expenses		8,115			3,417		-
Segment Operating Income		114			550		-79.3	%
Other Income (Expense) - Net		(332	)		(329	)	-0.9	%
Segment Income (Loss)	$	(218	)	$	221		-

* Results reflect 100% of Cingular Wireless’ actual results

Directory

Segment Operating Revenues	$	929		$	938	-1.0	%
Segment Operating Expenses
Cost of sales		241			228	5.7	%
Selling, general and administrative
Selling		103			86	19.8	%
General and administrative		99			96	3.1	%
Selling, general and administrative		202			182	11.0	%
Depreciation and amortization		2			3	-33.3	%
Total Segment Operating Expenses		445			413	7.7	%
Segment Operating Income		484			525	-7.8	%
Equity in Net Income (Loss) of Affiliates		(1	)		-	-
Segment Income	$	483		$	525	-8.0	%

International

Segment Operating Revenues	$	3		$	5		-40.0	%
Segment Operating Expenses		7			12		-41.7	%
Segment Operating Income (Loss)		(4	)		(7	)	42.9	%
Equity in Net Income of Affiliates		74			452		-83.6	%
Segment Income	$	70		$	445		-84.3	%

Financial Data

SBC Communications Inc.

Consolidated Balance Sheets

Dollars in millions except per share amounts

Unaudited 3/31/05 12/31/04

Assets
Current Assets
Cash and cash equivalents	$	427	$	760
Short-term investments		35		99
Accounts receivable - net of allowances for
uncollectibles of $953 and $881		5,268		5,480
Prepaid expenses		904		746
Deferred income taxes		552		566
Other current assets		828		890
Total current assets		8,014		8,541
Property, plant and equipment - at cost		136,770		136,177
Less: accumulated depreciation and amortization		87,459		86,131
Property, Plant and Equipment - Net		49,311		50,046
Goodwill		1,768		1,625
Investments in Equity Affiliates		1,867		1,798
Investments in and Advances to Cingular Wireless		32,949		33,687
Other Assets		13,037		13,147
Total Assets	$	106,946	$	108,844

Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	6,175		$	5,734
Accounts payable and accrued liabilities		9,083			10,038
Accrued taxes		1,267			1,787
Dividends payable		1,066			1,065
Liabilities of discontinued operations		-			310
Total current liabilities		17,591			18,934
Long-Term Debt		20,937			21,231
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		15,380			15,621
Postemployment benefit obligation		9,233			9,076
Unamortized investment tax credits		182			188
Other noncurrent liabilities		3,219			3,290
Total deferred credits and other noncurrent liabilities		28,014			28,175
Stockholders’ Equity
Common shares issued ($1 par value)		3,433			3,433
Capital in excess of par value		12,726			12,804
Retained earnings		29,171			29,352
Treasury shares (at cost)		(4,332	)		(4,535	)
Additional minimum pension liability adjustment		(190	)		(190	)
Accumulated other comprehensive income		(404	)		(360	)
Total stockholders’ equity		40,404			40,504
Total Liabilities and Stockholders’ Equity	$	106,946		$	108,844

Financial Data

SBC Communications Inc.

Consolidated Statement of Cash Flows

Dollars in millions, increase (decrease) in cash and cash equivalents

Unaudited Three Months Ended

3/31/05 3/31/04

Operating Activities
Net income	$	885		$	1,937
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		1,825			1,923
Undistributed earnings from investments in equity affiliates		74			(496	)
Provision for uncollectible accounts		239			231
Amortization of investment tax credits		(6	)		(8	)
Deferred income tax expense		(37	)		466
Net gain on sales of investments		(66	)		(889	)
Income from discontinued operations, net of tax		-			(26	)
Retirement benefit funding		-			(232	)
Changes in operating assets and liabilities:
Accounts receivable		(27	)		150
Other current assets		(97	)		(33	)
Accounts payable and accrued liabilities		(1,469	)		(986	)
Other - net		(65	)		(39	)
Total adjustments		371			61
Net Cash Provided by Operating Activities		1,256			1,998
Investing Activities
Construction and capital expenditures		(1,050	)		(936	)
Investments in affiliates - net		596			-
Purchases of held-to-maturity securities		-			(79	)
Maturities of held-to-maturity securities		64			130
Dispositions		73			2,179
Acquisitions		(169	)		-
Proceeds from note repayment		37			50
Net Cash Provided by (Used in) Investing Activities		(449	)		1,344
Financing Activities
Net change in short-term borrowings with
original maturities of three months or less		761			-
Repayment of long-term debt		(572	)		(142	)
Issuance of treasury shares		47			63
Dividends paid		(1,066	)		(1,034	)
Net Cash Used in Financing Activities		(830	)		(1,113	)
Net increase (decrease) in cash and cash equivalents
from continuing operations		(23	)		2,229
Net increase (decrease) in cash and cash equivalents
from discontinued operations		(310	)		46
Net increase (decrease) in cash and cash equivalents		(333	)		2,275
Cash and cash equivalents beginning of year		760			4,806
Cash and Cash Equivalents End of Year	$	427		$	7,081

Non-GAAP Financial Data

SBC Communications Inc.

Supplemental Consolidated Income Statements

Dollars in millions

Unaudited

Three Months Ended

3/31/05 3/31/04 % Chg

Total Operating Revenues	$	18,343	$	13,831		32.6	%
Operating Expenses
Cost of sales (exclusive of depreciation
and amortization shown separately below)		7,702		5,563		38.5	%
Selling, general and administrative		5,471		3,718		47.1	%
Depreciation and amortization		3,500		2,475		41.4	%
Total Operating Expenses		16,673		11,756		41.8	%
Operating Income		1,670		2,075		-19.5	%
Interest Expense		600		342		75.4	%
Interest Income		36		30		20.0	%
Minority Interest		71		(121	)	-
Equity in Net Income of Affiliates		88		351		-74.9	%
Other Income (Expense) - Net		49		863		-94.3	%
Income Before Income Taxes		1,314		2,856		-54.0	%
Income Taxes		429		945		-54.6	%
Income From Continuing Operations		885		1,911		-53.7	%
Income From Discontinued Operations, net of tax		-		26		-
Net Income	$	885	$	1,937		-54.3	%

As required by GAAP rules for joint ventures, SBC reflects Cingular’s results in the Equity in Net Income of Affiliates line of its Consolidated Statements of Income rather than in revenues and expenses. To facilitate peer comparisons, and in recognition of SBC’s majority economic ownership of the nation’s largest wireless provider and Cingular’s increased significance to SBC’s overall operations, SBC provides a supplemental consolidated income statement that includes full consolidation of Cingular’s operating results. This supplemental information also includes reconciliations to SBC’s Consolidated Statements of Income on the following page.

Non-GAAP Financial Data Reconciliation

SBC Communications Inc.

Supplemental Consolidated Income Statements

For the Three Months Ended 3/31/2005
Dollars in millions

Unaudited Reported Non-GAAP

SBC Cingular Consolidating
Adjustments Supplemental
Consolidated

Total Operating Revenues	$	10,248		$	8,229		$	(134	)	$	18,343
Operating Expenses
Cost of sales (exclusive of depreciation
and amortization shown separately below)		4,397			3,439			(134	)		7,702
Selling, general and administrative		2,470			3,001			-			5,471
Depreciation and amortization		1,825			1,675			-			3,500
Total Operating Expenses		8,692			8,115			(134	)		16,673
Operating Income		1,556			114			-			1,670
Interest Expense		353			338			(91	)		600
Interest Income		109			18			(91	)		36
Minority Interest		-			(16	)		87			71
Equity in Net Income (Loss) of Affiliates		(58	)		2			144			88
Other Income (Expense) - Net		47			2			-			49
Income Before Income Taxes		1,301			(218	)		231			1,314
Income Taxes		416			22			(9	)		429
Income From Continuing Operations		885			(240	)		240			885
Income From Discontinued Operations, net of tax		-			-			-			-
Net Income	$	885		$	(240	)	$	240		$	885

For the Three Months Ended 3/31/2004
Dollars in millions

Unaudited Reported Non-GAAP

SBC Cingular Consolidating
Adjustments Supplemental
Consolidated

Total Operating Revenues	$	10,012	$	3,967		$	(148	)	$	13,831
Operating Expenses
Cost of sales (exclusive of depreciation
and amortization shown separately below)		4,227		1,492			(156	)		5,563
Selling, general and administrative		2,346		1,372			-			3,718
Depreciation and amortization		1,923		553			(1	)		2,475
Total Operating Expenses		8,496		3,417			(157	)		11,756
Operating Income		1,516		550			9			2,075
Interest Expense		232		198			(88	)		342
Interest Income		116		2			(88	)		30
Minority Interest		-		(27	)		(94	)		(121	)
Equity in Net Income (Loss) of Affiliates		592		(108	)		(133	)		351
Other Income (Expense) - Net		861		2			-			863
Income Before Income Taxes		2,853		221			(218	)		2,856
Income Taxes		942		6			(3	)		945
Income From Continuing Operations		1,911		215			(215	)		1,911
Income From Discontinued Operations, net of tax		26		-			-			26
Net Income	$	1,937	$	215		$	(215	)	$	1,937