ex99_2.htm

Financial Data

AT&T Inc.
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Three Months Ended								Twelve Months Ended
	12/31/2008			12/31/2007		% Ch		g	12/31/2008			12/31/2007		% Ch		g
Operating Revenues
Wireless service	$	11,523		$	10,151		13.5	%	$	44,249		$	38,568		14.7	%
Voice		8,796			9,801		-10.3	%		37,321			40,798		-8.5	%
Data		6,202			5,925		4.7	%		24,372			23,206		5.0	%
Directory		1,302			1,389		-6.3	%		5,416			4,806		12.7	%
Other		3,253			3,083		5.5	%		12,670			11,550		9.7	%
Total Operating Revenues		31,076			30,349		2.4	%		124,028			118,928		4.3	%

Operating Expenses
Cost of services and sales (exclusive of
depreciation and amortization shown separately below)		12,923			11,889		8.7	%		49,895			46,705		6.8	%
Selling, general and administrative		8,211			7,745		6.0	%		31,187			30,242		3.1	%
Depreciation and amortization		5,044			5,223		-3.4	%		19,883			21,577		-7.9	%
Total Operating Expenses		26,178			24,857		5.3	%		100,965			98,524		2.5	%
Operating Income		4,898			5,492		-10.8	%		23,063			20,404		13.0	%
Interest Expense		813			868		-6.3	%		3,390			3,507		-3.3	%
Equity in Net Income of Affiliates		107			147		-27.2	%		819			692		18.4	%
Other Income (Expense) - Net		(498	)		1		-			(589	)		615		-
Income Before Income Taxes		3,694			4,772		-22.6	%		19,903			18,204		9.3	%
Income Taxes		1,290			1,636		-21.1	%		7,036			6,253		12.5	%
Net Income	$	2,404		$	3,136		-23.3	%	$	12,867		$	11,951		7.7	%


Basic Earnings Per Share	$	0.41		$	0.52		-21.2	%	$	2.17		$	1.95		11.3	%
Weighted Average Common
Shares Outstanding (000,000)		5,893			6,054		-2.7	%		5,927			6,127		-3.3	%

Diluted Earnings Per Share	$	0.41		$	0.51		-19.6	%	$	2.16		$	1.94		11.3	%
Weighted Average Common
Shares Outstanding with Dilution (000,000)		5,920			6,095		-2.9	%		5,958			6,170		-3.4	%

Financial Data

AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended									Twelve Months Ended

Wireless	12/31/2008			12/31/2007			% Ch		g	12/31/2008			12/31/2007			% Ch		g
Segment Operating Revenues
Service	$	11,541		$	10,186			13.3	%	$	44,410		$	38,678			14.8	%
Equipment		1,318			1,169			12.7	%		4,925			4,006			22.9	%
Total Segment Operating Revenues		12,859			11,355			13.2	%		49,335			42,684			15.6	%

Segment Operating Expenses
Cost of services and equipment sales		4,817			4,301			12.0	%		18,078			15,991			13.1	%
Selling, general and administrative		3,914			3,458			13.2	%		14,403			12,594			14.4	%
Depreciation and amortization		1,443			1,669			-13.5	%		5,770			7,079			-18.5	%
Total Segment Operating Expenses		10,174			9,428			7.9	%		38,251			35,664			7.3	%
Segment Operating Income		2,685			1,927			39.3	%		11,084			7,020			57.9	%
Equity in Net Income of Affiliates		1			4			-75.0	%		6			16			-62.5	%
Minority Interest		(70	)		(55	)		-27.3	%		(256	)		(198	)		-29.3	%
Segment Income	$	2,616		$	1,876			39.4	%	$	10,834		$	6,838			58.4	%


Wireline
Segment Operating Revenues
Voice	$	9,007		$	10,011			-10.0	%	$	38,198		$	41,630			-8.2	%
Data		6,459			6,157			4.9	%		25,352			24,075			5.3	%
Other		1,606			1,489			7.9	%		6,304			5,878			7.2	%
Total Segment Operating Revenues		17,072			17,657			-3.3	%		69,854			71,583			-2.4	%

Segment Operating Expenses
Cost of sales		8,021			7,622			5.2	%		31,929			31,018			2.9	%
Selling, general and administrative		3,319			3,805			-12.8	%		13,624			15,159			-10.1	%
Depreciation and amortization		3,380			3,340			1.2	%		13,150			13,416			-2.0	%
Total Segment Operating Expenses		14,720			14,767			-0.3	%		58,703			59,593			-1.5	%
Segment Income	$	2,352		$	2,890			-18.6	%	$	11,151		$	11,990			-7.0	%


Advertising & Publishing
Segment Operating Revenues	$	1,328		$	1,473			-9.8	%	$	5,502		$	5,851			-6.0	%

Segment Operating Expenses
Cost of sales		395			431			-8.4	%		1,716			1,645			4.3	%
Selling, general and administrative		310			354			-12.4	%		1,282			1,421			-9.8	%
Depreciation and amortization		180			181			-0.6	%		789			924			-14.6	%
Total Segment Operating Expenses		885			966			-8.4	%		3,787			3,990			-5.1	%
Segment Income	$	443		$	507			-12.6	%	$	1,715		$	1,861			-7.8	%


Other
Segment Operating Revenues	$	486		$	571			-14.9	%	$	2,043		$	2,229			-8.3	%
Segment Operating Expenses		1,067			367			-			2,929			2,040			43.6	%
Segment Operating Income(Loss)		(581	)		204			-			(886	)		189			-
Equity in Net Income of Affiliates		106			143			-25.9	%		813			676			20.3	%
Segment Income (Loss)	$	(475	)	$	347			-		$	(73	)	$	865			-

Financial Data

AT&T Inc.
Consolidated Balance Sheets
Dollars in millions except per share amounts
	12/31/08			12/31/07
	Unaudited

Assets
Current Assets
Cash and cash equivalents	$	1,792		$	1,970
Accounts receivable - net of allowances for
uncollectibles of $1,270 and $1,364		16,047			16,185
Prepaid expenses		1,538			1,524
Deferred income taxes		1,014			2,044
Other current assets		2,165			2,963
Total current assets		22,556			24,686
Property, Plant and Equipment - Net		99,088			95,890
Goodwill		71,829			70,713
Licenses		47,306			37,985
Customer Lists and Relationships - Net		10,582			14,505
Other Intangible Assets - Net		5,824			5,912
Investments in Equity Affiliates		2,332			2,270
Postemployment Benefit		-			17,291
Other Assets		5,728			6,392
Total Assets	$	265,245		$	275,644

Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	14,119		$	6,860
Accounts payable and accrued liabilities		20,032			21,399
Advanced billing and customer deposits		3,849			3,571
Accrued taxes		1,874			5,027
Dividends payable		2,416			2,417
Total current liabilities		42,290			39,274
Long-Term Debt		60,872			57,255
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		19,196			24,939
Postemployment benefit obligation		31,930			24,011
Other noncurrent liabilities		14,610			14,798
Total deferred credits and other noncurrent liabilities		65,736			63,748

Stockholders' Equity
Common shares issued ($1 par value)		6,495			6,495
Capital in excess of par value		91,728			91,638
Retained earnings		36,591			33,297
Treasury shares (at cost)		(21,410	)		(15,683	)
Accumulated other comprehensive income (loss)		(17,057	)		(380	)
Total stockholders' equity		96,347			115,367
Total Liabilities and Stockholders' Equity	$	265,245		$	275,644

Financial Data

AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions, increase (decrease) in cash and cash equivalents
Unaudited	Twelve Months Ended
	12/31/08			12/31/07			12/31/06
Operating Activities
Net income	$	12,867			11,951		$	7,356
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		19,883			21,577			9,907
Undistributed earnings from investments in equity affiliates		(654	)		(297	)		(1,946	)
Provision for uncollectible accounts		1,796			1,617			586
Deferred income tax expense (benefit)		5,889			(240	)		(87	)
Net (gain) loss from impairment and sale of investments		517			(11	)		(10	)
Gain on license exchange		-			(409	)		-
Changes in operating assets and liabilities:
Accounts receivable		(1,421	)		(1,491	)		519
Other current assets		827			(1,020	)		30
Accounts payable and accrued liabilities		(5,563	)		672			(2,213	)
Stock-based compensation tax benefit		(15	)		(173	)		(18	)
Other - net		(470	)		2,066			1,564
Total adjustments		20,789			22,291			8,332
Net Cash Provided by Operating Activities		33,656			34,242			15,688

Investing Activities
Construction and capital expenditures
Capital expenditures		(19,676	)		(17,717	)		(8,320	)
Interest during construction		(659	)		(171	)		(73	)
Net Investments in affiliates		-			-			(1,104	)
Acquisitions, net of cash acquired		(10,972	)		(2,873	)		368
Dispositions		1,615			1,594			756
Proceeds from sale of securities, net of investments		68			455			-
Sale of other investments		436			-			-
Other		45			36			7
Net Cash Used in Investing Activities		(29,143	)		(18,676	)		(8,366	)

Financing Activities
Net change in short-term borrowings with original maturities of three months or less		2,017			(3,411	)		3,649
Issuance of long-term debt		12,416			11,367			1,491
Repayment of long-term debt		(4,010	)		(6,772	)		(4,242	)
Purchase of treasury shares		(6,077	)		(10,390	)		(2,678	)
Issuance of treasury shares		319			1,986			589
Dividends paid		(9,507	)		(8,743	)		(5,153	)
Stock-based compensation tax benefit		15			173			18
Other		136			(224	)		198
Net Cash Used in Financing Activities		(4,691	)		(16,014	)		(6,128	)
Net increase (decrease) in cash and cash equivalents		(178	)		(448	)		1,194
Cash and cash equivalents beginning of year		1,970			2,418			1,224
Cash and Cash Equivalents End of Year	$	1,792		$	1,970		$	2,418

Financial Data

AT&T Inc.
Supplementary Operating and Financial Data
Dollars in millions except per share amounts
Unaudited	Three Months Ended									Twelve Months Ended
	12/31/2008			12/31/2007			% Ch		g	12/31/2008			12/31/2007			% Ch		g

Wireless
Wireless Customers (000)											77,009			70,052			9.9	%
Net Customer Additions (000)		2,095			2,675			-21.7	%		6,699			7,315			-8.4	%
M&A Activity, Partitioned Customers and Other Adjs. (000)		43			1,711			-97.5	%		258			1,775			-85.5	%
Postpaid Customers (000)											60,098			55,310			8.7	%
Net Postpaid Customer Additions (000)		1,342			1,178			13.9	%		4,634			3,982			16.4	%
Postpaid Churn		1.2	%		1.2	%		-			1.2	%		1.3	%	-10 B		P
Licensed POPs (000,000)											304			299			1.7	%

In-Region Wireline 1
Total Consumer Revenue Connections (000) 7
Retail Consumer Voice Connections 2											27,479			31,005			-11.4	%
Retail Consumer Additional Voice Connections 2											3,359			4,004			-16.1	%
Consumer Wired Broadband Connections 3											12,972			12,082			7.4	%
Video Connections: 4
Satellite Connections											2,190			2,116			3.5	%
U-verse Video Connections											1,045			231			-
Total Consumer Revenue Connections (000)											47,045			49,438			-4.8	%

Net Consumer Revenue Connection Changes (000)		(503	)		(160	)		-			(2,393	)		577			-

Broadband and Video
Total Broadband Connections (000) 5, 7											16,322			14,802			10.3	%
Net Broadband Connection Changes (000) 5, 7		357			525			-32.0	%		1,520			2,632			-42.2	%
Total Video Connections (000) 4											3,235			2,347			37.8	%
Net Video Connection Changes (000) 4		272			235			15.7	%		888			837			6.1	%

AT&T Inc.
Construction and capital expenditures
Capital expenditures	$	5,288		$	5,593			-5.5	%	$	19,676		$	17,717			11.1	%
Interest during construction	$	204		$	46			-		$	659		$	171			-
Dividends Declared per Share	$	0.4100		$	0.4000			2.5	%	$	1.6100		$	1.4650			9.9	%
End of Period Common Shares Outstanding (000,000)											5,893			6,044			-2.5	%
Debt Ratio 6											43.8	%		35.7	%	810 B		P
Total Employees											302,660			309,050			-2.1	%

1	In-region wireline represents access lines served by AT&T's incumbent local exchange companies.
2	Includes consumer U-verse Voice over IP connections.
3	Wireline consumer broadband connections include DSL lines, U-verse high speed Internet access and satellite broadband.
4	Video connections include sales under agency agreements with EchoStar and DirecTV customers and U-verse connections.
5	Total broadband connections include DSL lines, U-verse high speed Internet access, satellite broadband and 3G LaptopConnect cards.
6	Total long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity.
7	Prior year amounts restated to conform to current period reporting methodology.
Note: For the end of year 2008, total switched access lines were 55,610, retail business switched access lines totaled 21,826, and wholesale and coin switched access lines totaled 3,170.

Non-GAAP Wireless Reconciliations
Wireless Segment Adjusted OIBDA
AT&T Inc.
Dollars in Millions
unaudited
Quarter Ended December 31, 2008	Adjusting Items
	GAAP			Workforce Reduction			Intangible Amortization			Adjusted
Service Revenues	$	11,541								$	11,541
Equipment Revenues		1,318									1,318
Total Operating Revenues	$	12,859		$	-		$	-		$	12,859

Operating Expenses
Cost of Services and Equipment Sales		4,817			-			-			4,817
Selling, General and Administrative		3,914			(13	)		-			3,901
Depreciation and Amortization		1,443			-			(470	)		973
Total Operating Expenses		10,174			(13	)		(470	)		9,691

Operating Income		2,685									3,168

Plus: Depreciation and Amortization		1,443									973
OIBDA		4,128									4,141
OIBDA as a % of Service Revenue		35.8	%								35.9	%

Quarter Ended December 31, 2007	Adjusting Items
	GAAP			Integration Costs			Intangible Amortization			Adjusted
Service Revenues	$	10,186								$	10,186
Equipment Revenues		1,169									1,169
Total Operating Revenues	$	11,355		$	-		$	-		$	11,355

Operating Expenses
Cost of Services and Equipment Sales		4,301			(147	)		-			4,154
Selling, General and Administrative		3,458			(148	)		-			3,310
Depreciation and Amortization		1,669			(68	)		(628	)		973
Total Operating Expenses		9,428			(363	)		(628	)		8,437

Operating Income		1,927									2,918

Plus: Depreciation and Amortization		1,669									973
OIBDA		3,596									3,891
OIBDA as a % of Service Revenue		35.3	%								38.2	%

OIBDA is defined as operating income (loss) before depreciation and amortization. OIBDA differs from
segment operating income (loss), as calculated in accordance with generally accepted accounting principles (GAAP), in that it excludes depreciation and amortization. OIBDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. OIBDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with GAAP. Our calculation of OIBDA, as presented, may differ from similarly titled measures reported by other companies.

Financial Data

AT&T Inc.
Non-GAAP Consolidated Reconciliations
Reconciliation of Free Cash Flow
Dollars in Millions

Unaudited
December 31, 2008	Three Months Ended			Twelve Months Ended

Net cash provided by operating activities	$	10,883		$	33,656
Less: Construction and capital expenditures		(5,492	)		(20,335	)
Free Cash Flow	$	5,391		$	13,321

Free cash flow is defined as cash from operations minus capital expenditures. We believe these metrics provide useful information to our investors because management regularly reviews free cash flow as an important indicator of how much cash is generated by normal business operations, including capital expenditures, and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.

Financial Data

AT&T Inc.
Non-GAAP Consolidated Reconciliations
Adjusted and Reported Wireline Operating Expenses
Dollars in Millions

Unaudited
	Three Months Ended
	12/31/08		12/31/07		YoY % Change

Reported Wireline Operating Expenses	$	14,720	$	14,767		-0.3	%
Operating Adjustments
Noncash Merger-Related Costs		2		-		-
Cash Integration Costs		-		81		-
Intangible Amortization		391		455		-14.1	%
Total Adjusting Items		393		536		-26.7	%
Adjusted Wireline Operating Expenses	$	14,327	$	14,231		0.7	%

Adjusted Wireline operating expenses differs from reported operating expenses in that it excludes the merger-related expenses shown above and provides additional comparability to prior periods.