Consolidated Statements of Income

	(dollars in millions, except per share amounts)
Years Ended December 31,	2003	2002	2001
Operating Revenues	$ 67,752	$ 67,304	$ 66,713
Operating Expenses
Cost of services and sales (exclusive of items shown below)	21,783	19,911	20,538
Selling, general & administrative expense	24,999	21,846	20,829
Depreciation and amortization expense	13,617	13,290	13,523
Sales of businesses, net	(141)	(2,747)	350
Total Operating Expenses	60,258	52,300	55,240
Operating Income	7,494	15,004	11,473
Equity in earnings (loss) of unconsolidated businesses	1,278	(1,547)	446
Income (loss) from other unconsolidated businesses	331	(2,857)	(5,486)
Other income and (expense), net	38	192	199
Interest expense	(2,797)	(3,130)	(3,276)
Minority interest	(1,583)	(1,404)	(625)
Income before provision for income taxes, discontinued operations
and cumulative effect of accounting change	4,761	6,258	2,731
Provision for income taxes	(1,252)	(1,597)	(2,147)
Income Before Discontinued Operations and Cumulative
Effect of Accounting Change	3,509	4,661	584
Discontinued Operations
Income (loss) from operations of Iusacell	(957)	(74)	6
Income tax benefit (provision)	22	(12)	(19)
Loss on discontinued operations, net of tax	(935)	(86)	(13)
Cumulative Effect of Accounting Change, Net of Tax	503	(496)	(182)
Net Income	$   3,077	$   4,079	$    389
Basic Earnings Per Common Share:
Income before discontinued operations and cumulative
effect of accounting change	$     1.27	$     1.71	$     .22
Loss on discontinued operations, net of tax	(.34)	(.03)	—
Cumulative effect of accounting change, net of tax	.18	(.18)	(.07)
Net Income (1)	$     1.12	$     1.49	$     .14
Weighted-average shares outstanding (in millions)	2,756	2,729	2,710
Diluted Earnings Per Common Share:
Income before discontinued operations and cumulative
effect of accounting change	$     1.27	$     1.70	$     .21
Loss on discontinued operations, net of tax	(.34)	(.03)	—
Cumulative effect of accounting change, net of tax	.18	(.18)	(.07)
Net Income (1)	$     1.11	$     1.49	$     .14
Weighted-average shares outstanding (in millions)	2,789	2,745	2,730

(1) Total per share amounts may not add due to rounding.

See Notes to Consolidated Financial Statements.