This summary is based on the fourth quarter fiscal 2006 earnings call conducted by AT&T, Inc. (T: chart) on January 25, 2007.

Key Investors Issues

- Wireless makes up more than 1/3 of total revenues approaching a $40 billion annual run rate.
- Adjusted service EBITDA margin was up 340 basis points over the past year.
- Adjusted operating income from wireless was nearly $600 million better than the fourth quarter a year ago.

Fourth Quarter Highlights

In December, the company increased the AT&T dividends 6.8%, double the increase of the past few years.

- Wireless makes up more than 1/3 of total revenues approaching a $40 billion annual run rate.
- Business and wholesale together make up nearly 40%. Enterprise revenues are headed in the right direction, and regional business continues to deliver solid growth.
- Wireline consumers were just under 1/4 of total revenue base.

The company delivered a year-over-year increase in service ARPU and post-paid ARPU increases was even stronger than the blended total.

- Adjusted service EBITDA margin was up 340 basis points over the past year. Adjusted operating income from wireless was nearly $600 million better than the fourth quarter a year ago.
- The company has been on a path of margin expansion in consolidated operations. Adjusted operating income was 18.2% that is up 190 basis points versus a year ago.

Regional business revenues grew 7.5%.

That is up from a 6.6% growth rate last quarter, and consistent with mid single digit growth rates in this space over the past seven quarters.

- Regional consumer revenues grew 0.1% with bundling and broadband offsetting competitive impacts. Enterprise revenues totaled $4.4 billion with a year-over-year decline of 3.7%. This compares with declines of 5.1% in the third quarter and 7.3% in the second quarter.
- Sequentially wireline revenues excluding national mass markets increased in the fourth quarter over third quarter levels.
- The company continues to see double-digit growth in small and medium business.

- The company continues to see good growth in both voice and data in regional business. On the voice side, access lines increase. Churn rates are low and ARPU is stable. Regional business data revenues grew 18% with solid growth in transport and 25% growth in IP data led by strength in managed Internet services virtual private networking and DSL. Data now makes up nearly 30% of regional business revenues.

Total consumer connections that relate access lines plus high speed data and video were up 259,000 over the past year.

Primary access line losses were 227,000, down from last quarter.

- Broadband penetration of primary lines is above 33%. In the west region it is right at 40%. More of these customers are opting for higher speeds. 43% of consumer DSL base subscribe to higher speed service. That is up from 25% a year ago.
- The key drivers in consumer continue to be broadband and bundling. In early October the company simplified pricing for DSL and added another speed tier to line-up.

The company has launched U-verse service in 11 markets all of these markets have L DTV fiber to the node architecture is performing well.

Bandwidths delivered to homes are as good as or better than original forecast. Customer response has been positive. 70% of customers were signing up take higher end video packages and 70% are taking a highest broadband speeds.

- The company continues to see steady improvement in enterprise revenue trends. Demand is solid, data transport volumes are strong, and the pricing environment has not changed substantially. The company is capturing its share of technology migration as customers move from packet based service to IP data. In fact enterprise IP services which include virtual private networks, managed Internet services and hosting, had strong double-digit growth in the fourth quarter.
- Enterprise IP data revenues are now larger than traditional packets switch revenue including frame and ATM.
- As a result of these trends the company posted a sequential decline in enterprise revenues of less than 1%.

The company is on track with plan to repurchase $10 billion of shares by the end of 2007.

The company acquired 1.3 billion in the fourth quarter bringing 2006 total to 2.7 billion leaving over 7 billion to repurchase in 2007.