ATT Sales Presentation DECA Area

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AT&T Sales Presentation- Title TBD

TBDJanuary 12, 2010

© 2010 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other markscontained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies.All other marks contained herein are the property of their respective owners.

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Agenda

Q and A

2

Introduction

Device

Network and Plans



3

Cautionary Language Concerning

Forward-Looking Statements

Information set forth in this presentation contains

financial estimates and other forward-looking

statements that are subject to risks and uncertainties,

and actual results might differ materially.

A discussion of factors that may affect future

results is contained in AT&T’s filings withthe Securities and Exchange Commission.

AT&T disclaims any obligation to update and

revise statements contained in this presentation

based on new information or otherwise.

This presentation may contain certain non-GAAP

financial measures. Reconciliations between thenon-GAAP financial measures and the GAAP financial

measures are available on the company’s Web site

at www.att.com/investor.relations.



AT&T 4Q09 Highlights: Solid Execution,

Positive OutlookSolid Progress Across Key Growth Areas

• 2.7 million wireless net adds, 9.2% service revenue growth

• 248,000 U-verse TV net adds to >2 million in service

• 31.8% growth in wireline consumer IP revenues

(U-verse and broadband)

• 17.0% growth in strategic business revenues

Disciplined Execution on Cost Initiatives

• Sequential stability in already strong wireline margins

• Improved wireless margins, continuing opportunities

for further expansion

Strong Cash Flow• Cash from operations and free cash flow up substantially

• Strong dividend — 26 consecutive years of increases

• Debt reduction — total debt net of cash down $10.2 billion

over past six quarters

5

AT&T Profile:

• Leader in Mobile

Broadband

• Premier BusinessCapabilities

• Powerful IP-Based

Platforms

• Financial Strength



6

4Q09 Revenue Mix

Wireless

100% owned

Wireline Data/

Managed Services

Wireline Voice

Advertising

Solutions/Other

45%

25%

25%

5%

Third consecutive quarter of sequential improvement inconsolidated revenues reflecting:

Revenue mix increasingly weightedto wireless and wireline data andmanaged services:

• 70% of revenues in 4Q09 with6.5% year-over-year growth

• 60% of revenues in 4Q07

2Q09 3Q09 4Q094Q08 1Q09

• Strong wireless growth

• U-verse growth

• Improved business comparisons

Consolidated Revenue Trends

AT&T Consolidated Revenues

$30.9

($ in billions)

$31.1 $30.7$30.6 $30.9



$12.4

$11.7

7

Continued Strong Wireless Service Revenue

Growth, Up 9.2%

AT&T Wireless Service Revenues

2Q09 3Q09 4Q094Q08 1Q09

77.0

81.6

78.279.6

2.7 million total wireless net addsin 4Q09 — second-highest quarterly

total in company’s history

Best-ever fourth-quarter churn

levels — sixth consecutive quarter of year-over-year improvement in both

total and postpaid churn

2.6% growth in postpaid wirelesssubscriber ARPU — eighth consecutive

quarter with a year-over-year increase

Total

Postpaid

Emerging Devices

2.7

0.9

>1.0

7.3

4.3

>2.0

4Q09 2009Net Adds (in millions)

Postpaid ARPU

$59.59 1.20%$61.13

4Q09 4Q09

1.19%

4Q084Q08

Postpaid Churn

($ in billions)

Total Wireless Subscribers (in millions)

$12.6

$12.0$11.5 85.1



8

26.3% Wireless Data Revenue Growth,

Continued Strength in Mobile Broadband

4Q08 4Q09

16.2

Total PostpaidIntegratedDevices(in millions)

30.2

4Q094Q08

$3.1

$16.30

Wireless DataRevenues($ in billions)

Postpaid Data ARPU

$3.9

$19.16

Wireless data revenues up $805 million,or 26.3%, driven by integrated device

adoption, 3G growth, rich applications

Strong volume growth

• Text messages up 70%

• Multimedia messages >doubledover past year

Robust integrated device growth

• 3G integrated devices up more than

4 million in 4Q09, more than 15 millionfor the full year 2009

• Average ARPU for integrated devices

continues to be 1.8X nonintegrated-device base

• Significant upside ahead, postpaidpenetration still below 50%



• Strong revenue growth

• High-quality subscriber base

• Continuing operational

improvements in network

and support functions

Even with high integrated-device volumes, wireless OIBDAservice margin up sequentially

and year over year, driven by:

OIBDA service margin is operating income before depreciationand amortization, divided by total service revenues.

9

Wireless Margin Expansion

AT&T Wireless OIBDA

Service Margin

38.8%

35.8%

38.5%

Longer-termexpectation

Mid-40%Range

4Q08 4Q093Q09

Trends reinforce confidencein longer-term margin target



10

AT&T Wireless Network Capabilities

Voice and data service to97 percent of the U.S. population

United States’ fastest 3G

network today

United States’ broadest Wi-Ficoverage with ~20,000hotspots nationwide

GSM/UMTS technology:

• Predominant global network

standard for the next few years;

broad R&D, wide range of devices• Simultaneous voice and data

connectivity

• Natural precursor to LTE with

backward compatibility

AT&T’s network supports twice thenumber of smartphones versusany of its competitors

AT&T is managing unprecedented

mobile broadband growth —

up more than 5,000% over the

past 3 years

AT&T Total Mobile

Broadband Usage >200%in 2009



11

Wireless Network Initiatives Drive Improved

Voice and Data Performance

National 3G Voice CompositeQuality Index up 22% in 2009

Jan Dec

Dec08 Dec09

3G Blocked CallsDown 25% YOY

1.41%

1.05%

Nov09

Dec08 Dec09

3G Dropped CallsDown 22% YOY

1.16%1.08%

1.01%

Nov09

Jan Dec

Broadband Data Throughputup more than 19% in 2009

2009 Investments

• ~1,900 new cell sites

• >100,000 new circuits

for backhaul, 4X 2008deployment

• Doubled number of

fiber-served cell sites

• Completed 850 MHz

spectrum conversion

to the 3G platform

0.91%

• 3G coverage expanded

by >4,100 sites, now

covers >360 cities



Closing the Gap: Aggressive Program of Network

Enhancements for High-Usage Markets

• 21% improvement in 3G VoiceComposite Quality Index in 4Q09

• Adding RNC capacity

• Three consecutive months of improvementin 3G Voice Composite Quality Index

• RNC change-outs

Next 90 Days: Continued Enhancements to Drive Further Improvement

• Additional third- and fourth-carrier implementation

• Deploy Ethernet to the cell site to improve network backhaul

• Projects are under way, expect significant improvement in both markets

over the coming months

12

Sept Dec Sept Dec

San Francisco3G Voice Composite Quality Index

San Francisco

New York City3G Voice Composite Quality Index

New York Metro

PerformanceObjective

PerformanceObjective

Manhattan



HSPA 7.2 Deployment: Step Up in Speed,

Major Competitive Differentiator

AT&T’s 3G Cell Sites Enabled Nationwide, Ahead of Schedule

• Improves consistency in accessing data sessions

• Prepares the network for faster speeds

• Increases network efficiency

• Immediate benefit to millions of AT&T customers

Aggressive Backhaul Program Under Way

• Supports doubling of theoretical peak speeds

• Expect majority of AT&T’s mobile data traffic on fiber-based backhaul

by end of 2010

• Prepares network for LTE deployment: testing under way, nearing

vendor selection

Immediate Benefit to Millions of AT&T Customers

• AT&T currently offers 10 HSPA 7.2 enabled devices, including iPhone 3GS

Early Results Are Promising

13



14

2010 Capital Plan Includes Substantial

Increase in Wireless Investment

AT&T Total CapitalExpenditures

$17.3B

2009

$18 – $19B

2010Plan

Total Capital Expenditures expected to beup 5% – 10% from 2009. Top priorities:

Wireless and Backhaul:

• ~$2B increase in 2010, which includeswireless spend and wireline backhaul in

support of wireless networks• Focus on HSPA 7.2, groundwork for LTE,

overall capacity and performance, intenseprogram for high-volume metros

AT&T U-verse: on track to pass 30 million

living units by the end of 2011

Enterprise: world-class service platform,

applications ecosystem

One AT&T: better customer experience and

more efficient operations — unified supportsystems, converged customer experience,common care portal



15

Improving Wireline Consumer Trends

• AT&T U-verse revenues nearly tripledover past year, now approaching

$3 billion annualized

• >90% AT&T U-verse broadband attachrate, VoIP attach rate approaches 70%

• >75% of U-verse subscribers have4Q08 1Q09

1.0

1.3

1.6

AT&T U-verse TV Subscribers(in millions)

1.8

2.1

2Q09 3Q09 4Q09

(372)

4Q094Q08(504)

Revenue PerHousehold

$65.68

$63.32

Change inTotal ConsumerConnections

4Q08 4Q09

31.8% fourth-quarter growth inrevenues from consumer IP services

— AT&T U-verse and broadband

• Third consecutive quarter of improvedyear-over-year comparisons for overallwireline consumer revenues

a triple or quad play

Positive impacts on consumer trends:

• Eighth consecutive quarter of year-over-year growth in consumer revenues

per household



Sequential Year-Over-

16

AT&T Business Solutions

Consistent fundamental businesstrends reflecting economicactivity and continued strengthin strategic service, IP data

• 17.0% strategic business servicesrevenue growth

• 7.3% growth in business

IP revenues

– VPN revenues up >20%

– Two-thirds of frame customers

have transitioned to IP

• Largest economic impacts onvolumes in voice and legacy

data products

• Operational cost efficienciescontinue to support businessmargins

AT&T Business Solutions Revenues($ in billions)

Change Year Change

Total (0.4)% (5.5)%

(0.4)%

1.8%

4.1%

$1,058

4Q08 1Q09 2Q09 3Q09 4Q09

Strategic business services include the new-generation capabilities that

lead AT&T’s most advanced solutions – including Ethernet, VPNs, hosting,IP conferencing and application services.

Services (excludes CPE)

IP Data

Strategic Services

Strategic BusinessServices Revenues($ in millions)

$969

$1,006

$941

(4.9)%

7.3%

17.0%

$1,101



Stable Consolidated Margins

Sharp focus on cost discipline,

operational improvements

18.6%

AT&T ConsolidatedOperating Income Margin

2008 2009

across the business

• Major cost initiatives on track

• Total force down ~20,000 forthe year

• 4Q wireline operating expensesdown 2.7% year over year

• Continuing cost-improvement

opportunities, including areas

such as organizational andsystems integration, order

and billing center consolidation

18.6%

17.5%

Year-Over-YearNoncashPension/RetireeBenefit Pressure

Reported margins are in blue.

17



Strong Cash Flow

Cash FromOperations($ in billions)

$33.7

$34.4

Free cash flow is cash from operations less capitalexpenditures.

18

20092008

Free CashFlow($ in billions)

$13.3

$17.1

$34.4

Capital Expenditures

Free Cash Flow

$17.3

$17.1

Dividends Paid $9.7

2009 Cash Profile

Cash from Operating Activities

Debt Reduction

Debt net of cash on hand reduced

by $10.2 billion over past six quarters

20092008



19

4Q09 Summary, 2010 Outlook

Premier Growth Platforms, Financial Strength Set AT&T Apart

• Leader in Wireless Broadband and Innovation — HSPA 7.2 deploymentunder way, investing for next generation of growth

• Premier Business Capabilities — great networks, expanding productportfolio, strength in strategic services

• AT&T U-verse Gaining Scale — changing consumer revenue profile

• Financial Strength — stable margins, strong cash flow, significant wireline

contribution, full financial exposure to wireless with 100% ownership

Positive Outlook

• Stable consolidated revenues, with opportunities for stronger resultsas the economy rebounds

• Stable-to-improved margins and EPS

• Expand full-year wireless OIBDA margins to low 40% range with a longer-termexpectation of reaching the mid-40% range

• Capital expenditures in the $18 to $19 billion range, with substantial increasein wireless to further expand capacity and coverage

• Continued strong free cash flow generally in line with 2008 results

• Maintain financial strength while returning cash to shareowners



AT&T Sales Presentation-Title TBD

4Q09 Earnings Conference CallJanuary 28, 2010

© 2010 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other markscontained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies.All other marks contained herein are the property of their respective owners.

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