Strong position in the wireless sector, with an expectation of continued modest growth; Strong cash generating ability, with net free cash flow after capital expenditures sufficient to accommodate the dividend; A global telecommunications network that enables it to serve large enterprise customers; and The still-nascent U-verse service, which provides potential to better bundle and retain customers. Weak leverage for the rating, at around 2.8x debt to EBITDA, adjusted for unfunded pension and other postemployment benefits; and Continuing material residential line losses from wireless substitution and cable telephony. The rating on AT&T Inc. reflects an overall solid investment-grade business position and modest financial risk profile. However, the negative outlook indicates our view that current leverage is only marginally supportive of the
