8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) January 28, 2009

AT&T INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-8610	43-1301883
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

208 S. Akard St., Dallas, Texas	75202
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (210) 821-4105

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01  Other Events.

Throughout this document, AT&T Inc. is referred to as “we” or “AT&T.” We are a holding company whose subsidiaries and affiliates operate in the communications services industry. Our subsidiaries and affiliates provide wireless and wireline telecommunications services and equipment, and directory advertising both domestically and worldwide.

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

Information set forth in this filing contains financial estimates and other forward-looking statements that are subject to risks and uncertainties. A discussion of factors that may affect future results is contained in AT&T’s filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this filing based on new information or otherwise.

We announced on January 28, 2009 that fourth-quarter 2008 reported earnings were $0.41 per diluted share compared with $0.51 per share for the fourth quarter of 2007. Fourth-quarter 2008 reported net income was $2.4 billion compared with $3.14 billion for the fourth quarter of 2007. Reported earnings for the full year 2008 were $2.16 per diluted share, up from $1.94 per share for the full year 2007. Reported net income for the full year 2008 was $12.9 billion, up from $11.95 billion for the full year 2007.

2008 results reflected strong wireless subscriber gains and growth in IP and wireless data services.  Growth in these areas more than offset a decline in wireline voice revenues.   2007 results reflected a similar trend and also reflected expense and capital savings of approximately $4.0 billion resulting from consolidating the operations of AT&T Corp.,  AT&T Mobility and BellSouth Corp. following completion of their acquisitions.

On a reported basis, our fourth-quarter 2008 revenues were $31.1 billion compared with $30.3 billion in fourth-quarter 2007 and full-year 2008 revenues were $124.0 billion, up 4.3 percent compared with the previous full year.  Fourth-quarter 2008 operating expenses were $26.2 billion compared with $24.9 billion in the year-ago quarter. Fourth-quarter 2008 reported operating income margin was 15.8 percent, down from 18.1 percent in the year-ago quarter, reflecting continued revenue growth and progress on cost-control initiatives, offset by costs associated with the iPhone 3G launch, severance costs associated with a previously announced force reduction and hurricane-related expenses.

AT&T Mobility’s reported revenues for the fourth-quarter 2008 were $12.9 billion up 13.2 percent versus the year-ago quarter. The increase in revenues reflected an increase in net customers and continued strong growth in data revenues.  AT&T Mobility recorded a net gain of 2.1 million wireless customers in the fourth quarter of 2008, bringing AT&T Mobility's customer base at year-end 2008 to 77.0  million compared to 70.1 million at year-end 2007.  Average revenue per subscriber also increased due to strong growth in data services and increased purchases and use of advanced handsets, including the iPhone 3G.  Fourth-quarter 2008 reported operating expenses totaled $10.2 billion compared with $9.4 billion for the fourth quarter of 2007, reflecting the July 2008 launch of the iPhone 3G, including customer acquisition costs.  Fourth-quarter iPhone 3G activations were 1.9 million and third-quarter activations were 2.4 million.

Revenues from our regional business customers were $3.2 billion, a decrease of 0.9 percent compared to the corresponding quarter in the previous year, reflecting increases in Internet-Protocol-based data services offset by a decline in usage-based, older circuit-based services, primarily voice. Revenues from our consumer customers were $5.3 billion, down 5.3 percent, versus fourth-quarter 2007, as a decline in voice revenues more than offset a continued increase in broadband and video revenues.  Revenues from the enterprise (large business) customer group totaled $4.5 billion, down 3.7 percent versus the year-earlier fourth quarter, reflecting lower voice and circuit-based data transport volumes.  Revenues from wholesale customers increased 1.0 percent versus the year-earlier fourth quarter, continuing the trend of recent quarters with an increase in demand for data services more than offsetting a decline in local voice revenues.

Revenue connections from our consumer customers (retail voice, high speed Internet and video) totaled 47.0 million at year-end 2008 versus 49.4 million at year-end 2007 and 47.5 million at the end of the third quarter of 2008.  Total wireline consumer broadband and TV connections over the past year increased by 1.8 million.  Our total switched access lines declined by 9.7 percent on a year-over-year basis.  The number of U-verse subscribers exceeded 1 million at year-end 2008, with a net gain of 264,000 subscribers in the fourth quarter of 2008.  U-verse deployment reached 17 million living units as of year-end 2008 and we expect to reach approximately 30 million living units across our 22-state local service area by the end of 2011.

We expect that capital expenditures in 2009 will be down 10 to 15 percent from the 2008 level of $20.3 billion.  We expect consolidated revenue growth in the lower-single-digit range for 2009, led by gains in wireless and IP data services.  We expect a significant increase in wireless margins as our iPhone 3G customer base matures, with continued revenue growth.  We expect our consolidated income margin, excluding pension and retiree benefits costs, to be stable.  We expect increased expenses related to pension and retiree benefits reflecting lower investment returns in 2008 on plan assets.  We do not expect significant pension funding requirements in 2009.

Item 9.01 Financial Statements and Exhibits.

The following exhibits are filed as part of this report:

(d)   Exhibits

99.1  AT&T Inc. selected financial statements and operating data.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AT&T INC.
Date: January 28, 2009	By: /s/ John J. Stephens     John J. Stephens Senior Vice President and Controller

EX-99.1

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.