EX-99 4 ex99_2.htm SELECTED FINANCIAL STATEMENTS AND OPERATING DATA
Financial Data
AT&T Inc.
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited Three Months Ended   Twelve Months Ended  
  12/31/06 12/31/05 % Chg   12/31/2006  12/31/2005 % Chg
Operating Revenues              
  Voice   $   8,183   $   7,129   14 .8% $   33,908   $   24,484   38 .5%
  Data   4,603   3,391   35 .7% 18,068   10,734   68 .3%
  Wireless service   192   -   -   192   -   -  
  Directory   905   902   0 .3% 3,621   3,625   -0 .1%
  Other   2,008   1,487   35 .0% 7,266   4,921   47 .7%
    Total Operating Revenues   15,891   12,909   23 .1% 63,055   43,764   44 .1%
Operating Expenses  
  Cost of sales (exclusive of depreciation  
    and amortization shown separately below)   6,708   5,856   14 .5% 27,349   19,009   43 .9%
  Selling, general and administrative   4,115   3,715   10 .8% 15,511   10,944   41 .7%
  Depreciation and amortization   2,492   2,206   13 .0% 9,907   7,643   29 .6%
    Total Operating Expenses   13,315   11,777   13 .1% 52,767   37,596   40 .4%
Operating Income   2,576   1,132   -   10,288   6,168   66 .8%
Interest Expense   465   405   14 .8% 1,843   1,456   26 .6%
Interest Income   99   92   7 .6% 377   383   -1 .6%
Equity in Net Income of Affiliates   605   267   -   2,043   609   -  
Other Income (Expense) - Net   (21 ) 3   -   16   14   14 .3%
Income Before Income Taxes   2,794   1,089   -   10,881   5,718   90 .3%
Income Taxes   856   (566 ) -   3,525   932   -  
Net Income   $   1,938   $   1,655   17 .1% $  7,356   $  4,786   53 .7%

Basic Earnings Per Share:		  
Net Income   $     0.50   $     0.46   8 .7% $    1.89   $    1.42   33 .1%
Weighted Average Common  
  Shares Outstanding (000,000)   3,888   3,569   8 .9% 3,882   3,368   15 .3%

Diluted Earnings Per Share:		  
Net Income   $     0.50   $     0.46   8 .7% $    1.89   $    1.42   33 .1%
Weighted Average Common  
  Shares Outstanding with Dilution (000,000)   3,911   3,580   9 .2% 3,902   3,379   15 .5%




Financial Data
AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited        
  Three Months Ended   Twelve Months Ended  
Wireline   12/31/20 06 12/31/20 05 % Chg 12/31/20 06 12/31/20 05 % Chg
Segment Operating Revenues  
  Voice   $  8,183   $  7,129   14 .8% $33,908   $24,484   38 .5%
  Data   4,603   3,391   35 .7% 18,068   10,734   68 .3%
  Other   1,695   1,317   28 .7% 6,500   4,287   51 .6%
    Total Segment Operating Revenues   14,481   11,837   22 .3% 58,476   39,505   48 .0%
Segment Operating Expenses  
  Cost of sales   6,376   5,587   14 .1% 26,206   17,945   46 .0%
  Selling, general and administrative   3,713   3,537   5 .0% 14,305   9,912   44 .3%
  Depreciation and amortization   2,381   2,149   10 .8% 9,614   7,426   29 .5%
    Total Segment Operating Expenses   12,470   11,273   10 .6% 50,125   35,283   42 .1%
Segment Income   $  2,011   $     564   -   $  8,351   $  4,222   97 .8%


Wireless *              
Segment Operating Revenues  
  Service revenues   $ 8,795   $ 7,779   13 .1% $ 33,756   $ 30,638   10 .2%
  Equipment sales   960   1,070   -10 .3% 3,750   3,795   -1 .2%
    Total Segment Operating Revenues   9,755   8,849   10 .2% 37,506   34,433   8 .9%
Segment Operating Expenses  
  Cost of services and equipment sales   3,838   3,758   2 .1% 15,056   14,387   4 .7%
  Selling, general and administrative   3,008   2,812   7 .0% 11,447   11,647   -1 .7%
  Depreciation and amortization   1,582   1,730   -8 .6% 6,436   6,575   -2 .1%
    Total Segment Operating Expenses   8,428   8,300   1 .5% 32,939   32,609   1 .0%
Segment Operating Income   1,327   549   - 4,567   1,824   -
Other Income (Expense) - Net   (317 ) (297 ) -6 .7% (1,325 ) (1,293 ) -2 .5%
Segment Income   $ 1,010   $    252   - $   3,242   $      531   -

* Results reflect 100% of AT&T Mobility's actual results		  



Directory                
Segment Operating Revenues   $ 933   $ 928   0 .5% $ 3,702   $ 3,714   -0 .3%
Segment Operating Expenses  
  Cost of sales   264   277   -4 .7% 1,117   1,104   1 .2%
  Selling, general and administrative   175   137   27 .7% 643   611   5 .2%
  Depreciation and amortization   1   1   - 3   5   -40 .0%
    Total Segment Operating Expenses   440   415   6 .0% 1,763   1,720   2 .5%
Segment Operating Income   493   513   -3 .9% 1,939   1,994   -2 .8%
Equity in Net Income (Loss) of Affiliates   (4 ) (4 ) - (17 ) (5 ) -
Segment Income   $ 489   $ 509   -3 .9% $ 1,922   $ 1,989   -3 .4%


Other **              
Segment Operating Revenues   $350   $216   62 .0% $    954   $ 745   28 .1%
Segment Operating Expenses   299   160   86 .9% 977   792   23 .4%
Segment Operating Income (Loss)   51   56   -8 .9% (23 ) (47 ) 51 .1%
Equity in Net Income of Affiliates   609   271   - 2,060   614   -  
Segment Income   $660   $327   - $ 2,037   $ 567   -  
** Includes results from BellSouth for the 2 days following the December 29, 2006 acquisition. Equity in Net Income of Affiliates includes our 60% proportionate share of AT&T Mobility's results prior to the December 29, 2006 BellSouth acquisition. AT&T Mobility results for the 2 days following the acquisition are reflected in the Wireless segment and our Consolidated Statements of Income.




Financial Data

AT&T Inc.
Consolidated Balance Sheets
Dollars in millions except per share amounts
    12/31/06
Unaudited 		   12/31/05  
Assets      
Current Assets  
 Cash and cash equivalents   $     2,418   $     1,224  
 Accounts receivable - net of allowances for  
     uncollectibles of $1,276 and $1,176   16,194   9,351  
 Prepaid expenses   1,477   1,029  
 Deferred income taxes   3,034   2,011  
 Other current assets   2,430   1,039  
  Total current assets   25,553   14,654  
 Property, plant and equipment - at cost   192,006   149,238  
  Less: accumulated depreciation and amortization   96,560   90,511  
Property, Plant and Equipment - Net   95,446   58,727  
Goodwill   67,287   14,055  
Intangible Assets - Net   59,740   8,503  
Investments in Equity Affiliates   2,323   2,031  
Investments in and Advances to Cingular Wireless   -   31,404  
Postemployment benefit   14,228   12,666  
Other Assets   6,865   3,592  
   Total Assets   $ 271,442   $ 145,632  

Liabilities and Stockholders' Equity		  
Current Liabilities  
 Debt maturing within one year   $     9,737   $     4,455  
 Accounts payable and accrued liabilities   25,508   17,088  
 Accrued taxes   3,026   2,586  
 Dividends payable   2,215   1,289  
  Total current liabilities   40,486   25,418  
Long-Term Debt   51,169   26,115  
Deferred Credits and Other Noncurrent Liabilities  
 Deferred income taxes   27,290   15,713  
 Postemployment benefit obligation   28,901   18,133  
 Unamortized investment tax credits   181   209  
 Other noncurrent liabilities   8,169   5,354  
  Total deferred credits and other noncurrent liabilities   64,541   39,409  

Stockholders' Equity		  
 Common shares issued ($1 par value)   6,495   4,065  
 Capital in excess of par value   91,058   27,499  
 Retained earnings   30,375   29,106  
 Treasury shares (at cost)   (7,368 ) (5,406 )
 Additional minimum pension liability adjustment   -   (218 )
 Accumulated other comprehensive income   (5,314 ) (356 )
  Total stockholders' equity   115,246   54,690  
   Total Liabilities and Stockholders' Equity   $ 271,442   $ 145,632  




Financial Data

AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions, increase (decrease) in cash and cash equivalents
Unaudited Twelve Months Ended
  12/31/06 12/31/05 12/31/04   
Operating Activities        
Net income   $   7,356   $   4,786   $   5,887  
Adjustments to reconcile net income to  
  net cash provided by operating activities:  
 Depreciation and amortization   9,907   7,643   7,564  
 Undistributed earnings from investments in equity affiliates   (1,946 ) (451 ) (542 )
 Provision for uncollectible accounts   586   744   761  
 Amortization of investment tax credits   (28 ) (21 ) (32 )
 Deferred income tax (benefit) expense   (87 ) (658 ) 646  
 Net gain on sales of investments   (10 ) (135 ) (939 )
 Income from discontinued operations, net of tax   -   -   (908 )
 Retirement benefit funding   -   -   (2,232 )
Changes in operating assets and liabilities:  
   Accounts receivable   519   (94 ) 282  
   Other current assets   30   34   (102 )
   Accounts payable and accrued liabilities   (2,213 ) 74   408  
   Stock-based compensation tax benefit   (18 ) (3 ) (5 )
Other - net   1,519   1,055   162  
Total adjustments   8,259   8,188   5,063  
Net Cash Provided by Operating Activities   15,615   12,974   10,950  

Investing Activities		  
Construction and capital expenditures   (8,320 ) (5,576 ) (5,099 )
Receipts from (investments in) affiliates - net   (1,104 ) 2,436   (22,660 )
Dispositions   756   526   6,672  
Acquisitions, net of cash acquired   368   1,504   (74 )
Purchases of held-to-maturity securities   -   -   (135 )
Maturities of held-to-maturity securities   3   99   499  
Proceeds from note repayment   -   37   50  
Other   4   -   -  
Net Cash Used in Investing Activities   (8,293 ) (974 ) (20,747 )

Financing Activities		  
Net change in short-term borrowings with  
 original maturities of three months or less   3,649   (4,119 ) 3,398  
Repayment of other short-term borrowings   (2 ) -   -  
Issuance of long-term debt   1,491   1,973   6,461  
Repayment of long-term debt   (4,242 ) (2,682 ) (881 )
Purchase of treasury shares   (2,678 ) (1,843 ) (448 )
Issuance of treasury shares   589   432   216  
Repurchase of preferred shares of subsidiaries   -   (728 ) -  
Dividends paid   (5,153 ) (4,256 ) (4,141 )
Stock-based compensation tax benefit   18   3   5  
Other   200   (6 ) -  
Net Cash (Used in) Provided by Financing Activities   (6,128 ) (11,226 ) 4,610  
Net increase (decrease) in cash and cash equivalents  
  from continuing operations   1,194   774   (5,187 )
Net Cash Used in Operating Activities from Discontinued Operations   -   (310 ) (256 )
Net Cash Provided by Investing Activities from Discontinued Operations   -   -   1,397  
Net increase (decrease) in cash and cash equivalents   1,194   464   (4,046 )
Cash and cash equivalents beginning of year   1,224   760   4,806  
Cash and Cash Equivalents End of Year   $   2,418   $   1,224   $      760  




Financial Data

AT&T Inc.
Supplementary Operating Data
Dollars in millions
Unaudited Three Months Ended   Year to Date
    12/31/2006   12/31/2005   12/31/20 06 12/31/20 05
In-Region 1              
      Total Consumer Revenue Connections (000)  
          Retail Consumer Access Lines           25,307   26,683  
          Broadband Connections:  
          Consumer DSL Lines           7,255   5,807  
          U-verse High-Speed Internet Access           4   -  
          Satellite Broadband           5   -  
          Video Connections: 2  
          DISH Connections           632   457  
          U-verse Video Connections           3   -  
                     Total Consumer Revenue Connections (000)           33,206   32,947  
      Switched Access Lines (000)  
              Retail Consumer - Primary           21,841   22,793  
              Retail Consumer - Additional           3,466   3,890  
              Retail Business           17,136   17,457  
          Retail           42,443   44,140  
          Wholesale 3           3,615   4,938  
          Coin 4           249   335  
                     Total Switched Access Lines (000)           46,307   49,413  
      Unbundled Loops (000)           1,588   1,695  
      DSL Lines in Service (000)           8,529   6,921  
          Net DSL Line Additions (000)   381   425   1,608   1,817  
      Video Connections (000) 2           635   457  
          Net Video Connection Additions (000) 2   49   38   178   134  

Wireless		  
      Wireless Voice Customers (000)           60,962   54,144  
      Net Customer Additions (000)   2,357   1,820   6,892   5,006  
      M&A Activity, Partitioned Customers and Other Adjs   (61 ) 32   (74 ) 6  
      POPs (000,000)           296   294  
1  In-region represents access lines served by AT&T's incumbent local exchange companies (excluding BellSouth).
2  Video Connections include sales under agency agreement with EchoStar and U-verse connections.
3  Wholesale lines include lines purchased by AT&T Corp of approximately 1.04 million at 12/31/06 and 1.64 million at 12/31/05.
4  Coin includes both retail and wholesale access lines.