AT&T (T) 8-K Other Events

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.

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