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, 2010

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.

We announced on January 28, 2010 that fourth-quarter 2009 reported earnings were $0.51 per diluted share compared with $0.41 per share for the fourth quarter of 2008. Fourth-quarter 2009 reported net income was $3.0 billion compared with $2.4 billion for the fourth quarter of 2008. Reported earnings for the full year 2009 were $2.12 per diluted share, down from $2.16 per share for the full year 2008. Reported net income for the full year 2009 was $12.5 billion, down from $12.9 billion for the full year 2008.

On a reported basis, our fourth-quarter 2009 revenues were $30.9 billion compared with $31.1 billion in fourth-quarter 2008 and full-year 2009 revenues were $123.0 billion, compared with $124.0 billion for the previous full year.  Fourth quarter and full year 2009 revenues reflected strong wireless subscriber gains and growth in IP and wireless data services which were more than offset by declines in wireline voice and print advertising.   Fourth-quarter 2009 operating expenses were $26.0 billion compared with $26.2 billion in the year-ago quarter. Fourth-quarter 2009 reported operating income margin was 15.8 percent, the same as the year-ago quarter, reflecting continued progress on cost-control initiatives offsetting a revenue decline.

AT&T Mobility’s reported service revenues for the fourth-quarter 2009 were $12.6 billion up 9.2 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 2.7 million wireless customers in the fourth quarter of 2009, bringing AT&T Mobility's customer base at year-end 2009 to 85.1  million compared to 77.0 million at year-end 2008.  The subscriber increase reflects continued demand for advanced handsets as well as rapid growth in the fourth quarter of emerging devices such as eReaders, netbooks and navigation services.  Total connected devices on AT&T’s wireless network increased by more than 1 million in the fourth quarter, predominantly reflected in reseller subscriber totals.  Retail postpaid subscriber net adds totaled 910,000 for the fourth quarter compared with 1.3 million in the year-ago quarter and 1.4 million in the third quarter of 2009.  Fourth quarter iPhone 3G activations were 3.1 million and third-quarter activations were 3.2 million.  For the quarter, average revenue per postpaid subscriber increased due to strong growth in data services and increased purchases and use of advanced handsets.  Average revenue per total subscriber declined slightly, reflecting the rapid growth of emerging devices. Fourth-quarter 2009 reported operating expenses totaled $10.4 billion compared with $10.2 billion for the fourth quarter of 2008.  AT&T Mobility’s operating income margin was 24.7 percent compared to 20.9 percent in the year-ago quarter, reflecting continued low churn, improved operating efficiencies and growth in the number of high-value subscribers.

Revenues from our wireline business customers were $10.4 billion, a decrease of 5.5 percent from $11.0 billion in the year-ago quarter, reflecting increases in Internet-Protocol-based data services offset by a decline in usage-based, older circuit-based services, primarily voice. Revenues from our wireline consumer customers were $5.3 billion, down 3.7 percent from $5.5 billion in the fourth-quarter 2008, as a decline in voice revenues more than offset a continued increase in broadband and video revenues.

Revenue connections from our consumer customers (retail voice, high speed Internet and video) totaled 45.3 million at year-end 2009 versus 47.0 million at year-end 2008 and 45.7 million at the end of the third quarter of 2009.  Total wireline consumer broadband and TV connections over the past year increased by 1.8 million.  At year-end 2009, our total switched access lines were 49.4 million compared with 55.6 million at year-end 2008.  The decline reflects continuing economic pressures on our customers as well as increasing competition from wireless, Voice over Internet Protocol and cable providers.   The number of U-verse subscribers totaled 2.1 million at year-end 2009, with a net gain of 248,000 subscribers in the fourth quarter of 2009.  U-verse deployment reached 22.8 million living units as of year-end 2009 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 our total capital expenditures in 2010 will be in the $18 billion to $19 billion range, a level framed by the expectation that regulatory and legislative decisions relating to the telecom sector will continue to be sensitive to investment.  We expect a significant increase in spending of approximately $2.0 billion on wireless and wireline backhaul to support our wireless network. We expect consolidated revenue growth  to be stable for 2010, led by continued gains in wireless and IP data services, and stable to improved consolidated operating income margins.

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.

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, 2010	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
	12/31/2009			12/31/2008			% Chg			12/31/2009			12/31/2008			% Chg
Operating Revenues
Wireless service	$	12,585		$	11,523			9.2	%	$	48,563		$	44,249			9.7	%
Voice		7,612			8,796			-13.5	%		32,314			37,321			-13.4	%
Data		6,473			6,203			4.4	%		25,454			24,373			4.4	%
Directory		1,102			1,302			-15.4	%		4,724			5,416			-12.8	%
Other		3,086			3,252			-5.1	%		11,963			12,669			-5.6	%
Total Operating Revenues		30,858			31,076			-0.7	%		123,018			124,028			-0.8	%
Operating Expenses
Cost of services and sales (exclusive of
depreciation and amortization shown separately below)		12,800			12,642			1.2	%		50,405			49,556			1.7	%
Selling, general and administrative		8,182			8,492			-3.7	%		31,407			31,526			-0.4	%
Depreciation and amortization		5,015			5,044			-0.6	%		19,714			19,883			-0.8	%
Total Operating Expenses		25,997			26,178			-0.7	%		101,526			100,965			0.6	%
Operating Income		4,861			4,898			-0.8	%		21,492			23,063			-6.8	%
Interest Expense		798			813			-1.8	%		3,379			3,390			-0.3	%
Equity in Net Income of Affiliates		185			107			72.9	%		734			819			-10.4	%
Other Income (Expense) - Net		109			(425	)		-			152			(328	)		-
Income Before Income Taxes		4,357			3,767			15.7	%		18,999			20,164			-5.8	%
Income Taxes		1,266			1,290			-1.9	%		6,156			7,036			-12.5	%
Net Income		3,091			2,477			24.8	%		12,843			13,128			-2.2	%
Less: Net Income Attributable to Noncontrolling Interest		(72	)		(73	)		1.4	%		(308	)		(261	)		-18.0	%
Net Income Attributable to AT&T	$	3,019		$	2,404			25.6	%	$	12,535		$	12,867			-2.6	%
Basic Earnings Per Share Attributable to AT&T	$	0.51		$	0.41			24.4	%	$	2.12		$	2.17			-2.3	%
Weighted Average Common
Shares Outstanding (000,000)		5,901			5,893			0.1	%		5,900			5,927			-0.5	%
Diluted Earnings Per Share Attributable to AT&T	$	0.51		$	0.41			24.4	%	$	2.12		$	2.16			-1.9	%
Weighted Average Common
Shares Outstanding with Dilution (000,000)		5,927			5,920			0.1	%		5,924			5,958			-0.6	%

Financial Data
AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended									Twelve Months Ended
Wireless	12/31/2009			12/31/2008			% Chg			12/31/2009			12/31/2008			% Chg
Segment Operating Revenues
Service	$	12,607		$	11,541			9.2	%	$	48,657		$	44,410			9.6	%
Equipment		1,231			1,318			-6.6	%		4,940			4,925			0.3	%
Total Segment Operating Revenues		13,838			12,859			7.6	%		53,597			49,335			8.6	%
Segment Operating Expenses
Operations and support		8,941			8,731			2.4	%		34,561			32,481			6.4	%
Depreciation and amortization		1,477			1,443			2.4	%		5,765			5,770			-0.1	%
Total Segment Operating Expenses		10,418			10,174			2.4	%		40,326			38,251			5.4	%
Segment Operating Income		3,420			2,685			27.4	%		13,271			11,084			19.7	%
Equity in Net Income of Affiliates		9			1			-			9			6			50.0	%
Segment Income	$	3,429		$	2,686			27.7	%	$	13,280		$	11,090			19.7	%
Segment Operating Income Margin		24.7	%		20.9	%					24.8	%		22.5	%
Wireline
Segment Operating Revenues
Voice	$	7,793		$	9,007			-13.5	%	$	33,082		$	38,198			-13.4	%
Data		6,823			6,460			5.6	%		26,723			25,353			5.4	%
Other		1,546			1,606			-3.7	%		5,865			6,304			-7.0	%
Total Segment Operating Revenues		16,162			17,073			-5.3	%		65,670			69,855			-6.0	%
Segment Operating Expenses
Operations and support		10,987			11,299			-2.8	%		44,646			45,440			-1.7	%
Depreciation and amortization		3,306			3,392			-2.5	%		13,093			13,206			-0.9	%
Total Segment Operating Expenses		14,293			14,691			-2.7	%		57,739			58,646			-1.5	%
Segment Operating Income		1,869			2,382			-21.5	%		7,931			11,209			-29.2	%
Equity in Net Income of Affiliates		1			1			0.0	%		18			19			-5.3	%
Segment Income	$	1,870		$	2,383			-21.5	%	$	7,949		$	11,228			-29.2	%
Segment Operating Income Margin		11.6	%		14.0	%					12.1	%		16.0	%
Advertising Solutions
Segment Operating Revenues	$	1,129		$	1,328			-15.0	%	$	4,809		$	5,502			-12.6	%
Segment Operating Expenses
Operations and support		701			705			-0.6	%		2,922			2,998			-2.5	%
Depreciation and amortization		149			180			-17.2	%		649			789			-17.7	%
Total Segment Operating Expenses		850			885			-4.0	%		3,571			3,787			-5.7	%
Segment Income	$	279		$	443			-37.0	%	$	1,238		$	1,715			-27.8	%
Segment Income Margin		24.7	%		33.4	%					25.7	%		31.2	%
Other
Segment Operating Revenues	$	443		$	485			-8.7	%	$	1,731		$	2,042			-15.2	%
Segment Operating Expenses		1,150			1,096			4.9	%		2,678			2,986			-10.3	%
Segment Operating Income (Loss)		(707	)		(611	)		-15.7	%		(947	)		(944	)		-0.3	%
Equity in Net Income of Affiliates		175			105			66.7	%		706			794			-11.1	%
Segment Income(Loss)	$	(532	)	$	(506	)		-5.1	%	$	(241	)	$	(150	)		-60.7	%

Financial Data
AT&T Inc.
Consolidated Balance Sheets
Dollars in millions except per share amounts
	12/31/09			12/31/08
	Unaudited
Assets
Current Assets
Cash and cash equivalents	$	3,802		$	1,792
Accounts receivable - net of allowances for
doubtful accounts of $1,205 and $1,270		14,978			16,047
Prepaid expenses		1,572			1,538
Deferred income taxes		1,274			1,014
Other current assets		2,708			2,165
Total current assets		24,334			22,556
Property, Plant and Equipment - Net		100,093			99,088
Goodwill		73,259			71,829
Licenses		48,759			47,306
Customer Lists and Relationships - Net		7,420			10,582
Other Intangible Assets - Net		5,644			5,824
Investments in Equity Affiliates		2,921			2,332
Other Assets		6,322			5,728
Total Assets	$	268,752		$	265,245
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	7,361		$	14,119
Accounts payable and accrued liabilities		20,999			20,032
Advanced billing and customer deposits		4,170			3,849
Accrued taxes		1,696			1,874
Dividends payable		2,479			2,416
Total current liabilities		36,705			42,290
Long-Term Debt		64,720			60,872
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		23,803			19,196
Postemployment benefit obligation		27,849			31,930
Other noncurrent liabilities		13,350			14,207
Total deferred credits and other noncurrent liabilities		65,002			65,333
Stockholders' Equity
Common shares issued ($1 par value)		6,495			6,495
Additional paid-in-capital		91,707			91,728
Retained earnings		39,366			36,591
Treasury shares (at cost)		(21,260	)		(21,410	)
Accumulated other comprehensive loss		(14,408	)		(17,057	)
Noncontrolling interest		425			403
Total stockholders' equity		102,325			96,750
Total Liabilities and Stockholders' Equity	$	268,752		$	265,245

Financial Data
AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions, increase (decrease) in cash and cash equivalents
unaudited
	2009			2008			2007
Operating Activities
Net income	$	12,843		$	13,128		$	12,147
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		19,714			19,883			21,577
Undistributed earnings from investments in equity affiliates		(419	)		(654	)		(297	)
Provision for uncollectible accounts		1,763			1,796			1,617
Deferred income tax expense (benefit)		2,104			5,889			(240	)
Net (gain) loss from impairment and sale of investments		-			517			(11	)
Gain on license exchange		-			-			(409	)
Changes in operating assets and liabilities:
Accounts receivable		(454	)		(1,421	)		(1,491	)
Other current assets		(355	)		827			(1,020	)
Accounts payable and accrued liabilities		2,372			(5,563	)		672
Share-based payment excess tax benefit		-			(15	)		(173	)
Net income attributable to noncontrolling interest		(308	)		(261	)		(196	)
Other - net		(2,815	)		(470	)		2,066
Total adjustments		21,602			20,528			22,095
Net Cash Provided by Operating Activities		34,445			33,656			34,242
Investing Activities
Construction and capital expenditures
Capital expenditures		(16,595	)		(19,676	)		(17,717	)
Interest during construction		(740	)		(659	)		(171	)
Acquisitions, net of cash acquired		(983	)		(10,972	)		(2,873	)
Dispositions		287			1,615			1,594
Sales of securities, net of investments		55			68			455
Sale of other investments		-			436			-
Other		51			45			36
Net Cash Used in Investing Activities		(17,925	)		(29,143	)		(18,676	)
Financing Activities
Net change in short-term borrowings with
original maturities of three months or less		(3,910	)		2,017			(3,411	)
Issuance of long-term debt		8,161			12,416			11,367
Repayment of long-term debt		(8,654	)		(4,010	)		(6,772	)
Purchase of treasury shares		-			(6,077	)		(10,390	)
Issuance of treasury shares		28			319			1,986
Dividends paid		(9,670	)		(9,507	)		(8,743	)
Share-based payment excess tax benefit		-			15			173
Other		(465	)		136			(224	)
Net Cash Used in Financing Activities		(14,510	)		(4,691	)		(16,014	)
Net increase (decrease) in cash and cash equivalents		2,010			(178	)		(448	)
Cash and cash equivalents beginning of year		1,792			1,970			2,418
Cash and Cash Equivalents End of Period	$	3,802		$	1,792		$	1,970

Financial Data
AT&T Inc.
Supplementary Operating and Financial Data
Dollars in millions except per share amounts
Unaudited	Three Months Ended									Twelve Months Ended
	12/31/2009			12/31/2008			% Chg			12/31/2009			12/31/2008			% Chg
Wireless
Wireless Customers (000)											85,120			77,009			10.5	%
Net Customer Additions (000)		2,661			2,095			27.0	%		7,278			6,699			8.6	%
M&A Activity, Partitioned Customers and Other Adjs. (000)1		863			43						833			258
Postpaid Customers (000)											65,146			60,098			8.4	%
Net Postpaid Customer Additions (000)		910			1,342			-32.2	%		4,323			4,634			-6.7	%
Postpaid Churn		1.19	%		1.20	%	-1 BP				1.16	%		1.19	%	-3 BP
Licensed POPs (000,000)											306			304			0.7	%
In-Region Wireline 2
Total Consumer Revenue Connections (000)
Retail Consumer Voice Connections 3											24,562			27,479			-10.6	%
Retail Consumer Additional Voice Connections 3											2,770			3,359			-17.5	%
Consumer Wired Broadband Connections 4											13,717			12,970			5.8	%
Video Connections: 5
Satellite Connections											2,174			2,190			-0.7	%
U-verse Video Connections											2,064			1,045			97.5	%
Total Consumer Revenue Connections (000)											45,287			47,043			-3.7	%
Net Consumer Revenue Connection Changes (000)		(372	)		(504	)		26.2	%		(1,756	)		(2,395	)		26.7	%
Broadband and Video
Total Broadband Connections (000) 6											17,254			16,265			6.1	%
Net Broadband Connection Changes (000) 6		171			300			-43.0	%		989			1,463			-32.4	%
Total Video Connections (000) 5											4,239			3,235			31.0	%
Net Video Connection Changes (000) 5		227			272			-16.5	%		1,004			888			13.1	%
AT&T Inc.
Construction and capital expenditures
Capital expenditures	$	5,529		$	5,288			4.6	%	$	16,595		$	19,676			-15.7	%
Interest during construction	$	187		$	204			-8.3	%	$	740		$	659			12.3	%
Dividends Declared per Share	$	0.4200		$	0.4100			2.4	%	$	1.6500		$	1.6100			2.5	%
End of Period Common Shares Outstanding (000,000)											5,902			5,893			0.2	%
Debt Ratio 7,8											41.3	%		43.7	%	-240 BP
Total Employees											282,720			302,660			-6.6	%

1	4Q09 M&A Activity reflects the acquisition of Centennial Communications, which was completed in November 2009.
2	In-region wireline represents access lines served by AT&T's incumbent local exchange companies.
3	Includes consumer U-verse Voice over IP connections.
4	Consumer Wired Broadband Connections include DSL lines, U-verse High Speed Internet access and satellite broadband.
5	Video connections include sales under agency agreements with EchoStar and DirecTV customers and U-verse connections.
6	Total broadband connections include DSL lines, U-verse High Speed Internet access, satellite broadband and 3G LaptopConnect cards.
7	Total long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity.
8	Prior year amounts restated to conform to current period reporting methodology.
Note: For the end of year 2009, total switched access lines were 49,392, retail business switched access lines totaled 20,106 and wholesale and coin switched access lines totaled 2,908.