This summary is based on the fourth quarter fiscal 2007 earnings call conducted by AT&T Inc. (T: chart) on January 24, 2008.

Chief Financial Officer: Rick Lindner
Senior Vice President Investor Relations: Rich Dietz

Key Investors Issues

- Earnings per share increased from 50 cents in the prior year to 51 cents.
- Quarterly revenue increased from $15.9 billion in previous year to $30.3 billion.
- The company repurchased 37 million shares for $1.5 billion in the fourth quarter.
- The company expects mid-single-digit range growth in revenue in 2008.

Fourth Quarter Fiscal 2007 Financial Highlights

For the quarter, AT&T''s reported revenues totaled $30.3 billion, up from $15.9 billion in the year-earlier quarter.

AT&T''s 2007 reported results reflect the acquisition of BellSouth Corporation and the accompanying consolidation of wireless results.

On a pro forma basis, which combine revenues from AT&T, BellSouth and Cingular Wireless consistently in all periods, AT&T''s fourth-quarter 2007 revenues totaled $30.4 billion, up 2.9% versus results for the year-earlier quarter. Excluding revenues from enterprise CPE (customer premises equipment) sales, which AT&T began de-emphasizing after the fourth quarter of 2006, consolidated pro forma revenue growth was 3.5%.

AT&T''s fourth-quarter revenue growth was driven by a solid mid-teens increase in wireless revenues, improved growth in recurring enterprise services, continued growth in regional business and stable regional consumer revenues. Growth across these areas more than offset anticipated declines in revenues from wholesale and national mass market customers.

The net income for the fourth quarter totaled $3.1 billion, or 51 cents per diluted share, compared with $1.9 billion, or 50 cents per diluted share, in the year-earlier quarter.

Compared with results in the fourth quarter of 2006, reported operating expenses were $24.9 billion, up from $13.3 billion; reported operating income was $5.5 billion, up from $2.6 billion; and AT&T''s reported operating income margin was 18.1% versus 16.2%.

AT&T''s adjusted earnings, which exclude costs and accounting effects associated with acquisitions, totaled $4.3 billion, up from $2.4 billion in the year-earlier fourth quarter. Adjusted earnings per diluted share increased 16.4% to 71 cents, up from 61 cents in the year-earlier quarter.

AT&T''s adjusted operating income for the fourth quarter of 2007 was $7.3 billion, versus $2.9 billion in the year-earlier quarter. AT&T''s adjusted operating income margin was 24%, up from 18.2% in the fourth quarter of 2006.

AT&T''s cash from operating activities totaled $9.9 billion in the fourth quarter of 2007, up from $5 billion in the year-earlier fourth quarter.

For the full year, cash from operating activities totaled $34.1 billion, up from $15.6 billion for the full year 2006. In addition to operational progress, increased cash from operating activities reflects the inclusion of results from former BellSouth operations and the accompanying consolidation of wireless results.

Full-year 2007 capital expenditures totaled $17.7 billion, free cash flow totaled $16.4 billion, and free cash flow after dividends totaled $7.6 billion, significantly above AT&T''s original outlook of $5 billion to $6 billion.

AT&T continues to return substantial value to shareowners through dividends and share repurchases.

Dividends paid totaled $2.2 billion in the fourth quarter and $8.7 billion for the full year 2007. Shares repurchased totaled $1.5 billion for 37 million shares in the fourth quarter, and for the full year 2007 they totaled $10.4 billion for 266.6 million shares. AT&T ended the year with 6 billion shares outstanding. Combining dividends and share repurchases, AT&T returned $19.1 billion of value to shareowners in 2007.

The board of directors of AT&T has approved a 12.7% increase in the company''s quarterly dividend, from 35 cents to 40 cents a share on a quarterly basis and from $1.42 to $1.60 a share on an annualized basis, the largest annual increase in the company''s history. The dividend will be payable on Feb. 1, 2008, to common shareowners of record on Jan. 10, 2008.

The board also approved a new authorization for the repurchase of 400 million shares, which represents approximately 6.6% of AT&T''s shares outstanding as of Dec. 31, 2007. Based on current market conditions and the company''s outlook, AT&T expects to complete the repurchases available in the new authorization by the end of 2009.