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) April 21, 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 April 21, 2010 that first-quarter 2010 reported earnings were $0.42 per diluted share compared with $0.53 per share for the first quarter of 2009. First-quarter 2010 reported net income was $2.5 billion compared with $3.1 billion for the first quarter of 2009.  First-quarter earnings reflect a previously disclosed non-cash charge of $995 million, or $0.17 per diluted share, related to recently enacted changes in the tax treatment for the Medicare Part D subsidy.

On a reported basis, our first-quarter 2010 revenues were $30.6 billion compared with $30.6 billion in first-quarter 2009.  First-quarter revenues reflected strong wireless subscriber gains and growth in IP and wireless data services which  offset  declines in wireline voice and print advertising.   First-quarter 2010 operating expenses were $24.6 billion compared with $24.8 billion in the year-ago quarter. First-quarter 2010 reported operating income margin was 19.6 percent, up from 18.8 percent in the year-ago quarter, reflecting continued progress on cost-control initiatives.

AT&T Mobility’s reported service revenues for the first-quarter 2010 were $12.8 billion up 10.3 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 1.9 million wireless customers in the first quarter of 2010, bringing AT&T Mobility's customer base at quarter-end to 87.0 million compared to 78.2 million for the year-ago quarter.  The subscriber increase reflects continued demand for advanced handsets as well as rapid growth of emerging devices such as eReaders, netbooks, alarm monitoring services and global positioning s ervices.  Connected devices in service increased by 1.1 million in the first quarter.  Retail postpaid subscriber net adds totaled 512,000 for the first quarter compared with 897,000 in the year-ago quarter and 841,000 in the fourth quarter of 2009, reflecting industry maturation trends.  First quarter iPhone 3G activations were 2.7 million and fourth-quarter 2009 activations were 3.1 million.  For the quarter, average revenue per postpaid subscriber increased 3.9 percent compared with the year-ago quarter 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.  Postpaid subscriber churn was 1.07 percent, down from 1.15 percent in the year-earlier quarter, and total subscriber churn was 1.30 percent versus 1.56 percent in the first-quarter of 2009. First-quarter 2010 reported operating expenses totaled $9.7 bi llion up 3.8 percent versus the year-earlier quarter.  AT&T Mobility’s operating income margin was 29.9 percent compared to 26.9 percent in the year-ago quarter, reflecting continued solid revenue growth, reduced churn, improved operating efficiencies and further growth in the number of high-value subscribers.

Total wireline revenues declined 4.6 percent compared with the year-ago quarter; this lower rate of decline was led by improved consumer customer trends.  First-quarter 2010 total wireline operating expenses declined 2.8 percent versus the year-ago quarter.  Wireline’s operating income margin was 11.1 percent compared with 12.7 percent for the first-quarter of 2009 and 11.2 percent for the fourth quarter of 2009.

Revenues from our wireline business customers were $9.7 billion, a decrease of 5.2 percent from 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, a decline of 1.3 percent from the first-quarter 2009, 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 45.0 million at quarter-end 2010 versus 45.3 million at year-end 2009 and 46.8 million at the end of the first quarter of 2009.  Total wireline consumer broadband and TV connections over the past year increased by 1.5 million.  At quarter-end 2010, our total switched access lines were 48.1 million compared with 54.0 million at quarter-end 2009.  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 video subs cribers totaled 2.3 million at quarter-end 2010, with a net gain of 231,000 subscribers in the first quarter of 2010.  U-verse deployment reached 23.8 million living units as of quarter-end 2010.

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: April 21, 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
	3/31/2010			3/31/2009			% Chg
Operating Revenues
Wireless service	$	12,850		$	11,646			10.3	%
Voice		7,479			8,503			-12.0	%
Data		6,631			6,281			5.6	%
Directory		1,041			1,249			-16.7	%
Other		2,648			2,892			-8.4	%
Total Operating Revenues		30,649			30,571			0.3	%
Operating Expenses
Cost of services and sales (exclusive of
depreciation and amortization shown separately below)		12,329			12,195			1.1	%
Selling, general and administrative		7,484			7,753			-3.5	%
Depreciation and amortization		4,826			4,886			-1.2	%
Total Operating Expenses		24,639			24,834			-0.8	%
Operating Income		6,010			5,737			4.8	%
Interest Expense		767			849			-9.7	%
Equity in Net Income of Affiliates		217			137			58.4	%
Other Income (Expense) - Net		(22	)		(15	)		-46.7	%
Income Before Income Taxes		5,438			5,010			8.5	%
Income Taxes		2,876			1,809			59.0	%
Net Income		2,562			3,201			-20.0	%
Less: Net Income Attributable to Noncontrolling Interest		(87	)		(75	)		-16.0	%
Net Income Attributable to AT&T	$	2,475		$	3,126			-20.8	%
Basic Earnings Per Share Attributable to AT&T	$	0.42		$	0.53			-20.8	%
Weighted Average Common
Shares Outstanding (000,000)		5,905			5,896			0.2	%
Diluted Earnings Per Share Attributable to AT&T	$	0.42		$	0.53			-20.8	%
Weighted Average Common
Shares Outstanding with Dilution (000,000)		5,935			5,922			0.2	%

Financial Data
AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended
Wireless	3/31/2010			3/31/2009			% Chg
Segment Operating Revenues
Service	$	12,850		$	11,646			10.3	%
Equipment		1,047			1,192			-12.2	%
Total Segment Operating Revenues		13,897			12,838			8.2	%
Segment Operating Expenses
Operations and support		8,183			7,886			3.8	%
Depreciation and amortization		1,558			1,499			3.9	%
Total Segment Operating Expenses		9,741			9,385			3.8	%
Segment Operating Income		4,156			3,453			20.4	%
Equity in Net Income of Affiliates		13			-			-
Segment Income	$	4,169		$	3,453			20.7	%
Segment Operating Income Margin		29.9	%		26.9	%
Wireline
Segment Operating Revenues
Voice	$	7,479		$	8,503			-12.0	%
Data		6,631			6,281			5.6	%
Other		1,311			1,377			-4.8	%
Total Segment Operating Revenues		15,421			16,161			-4.6	%
Segment Operating Expenses
Operations and support		10,612			10,928			-2.9	%
Depreciation and amortization		3,099			3,176			-2.4	%
Total Segment Operating Expenses		13,711			14,104			-2.8	%
Segment Operating Income		1,710			2,057			-16.9	%
Equity in Net Income of Affiliates		5			3			66.7	%
Segment Income	$	1,715		$	2,060			-16.7	%
Segment Operating Income Margin		11.1	%		12.7	%
Advertising Solutions
Segment Operating Revenues	$	1,041		$	1,249			-16.7	%
Segment Operating Expenses
Operations and support		675			721			-6.4	%
Depreciation and amortization		138			176			-21.6	%
Total Segment Operating Expenses		813			897			-9.4	%
Segment Income	$	228		$	352			-35.2	%
Segment Income Margin		21.9	%		28.2	%
Other
Segment Operating Revenues	$	290		$	323			-10.2	%
Segment Operating Expenses		374			448			-16.5	%
Segment Operating Income (Loss)		(84	)		(125	)		32.8	%
Equity in Net Income of Affiliates		199			134			48.5	%
Segment Income	$	115		$	9			-
Segment Income Margin		39.7	%		2.8	%

Financial Data
AT&T Inc.
Consolidated Balance Sheets
Dollars in millions except per share amounts
	3/31/10			12/31/09
	Unaudited
Assets
Current Assets
Cash and cash equivalents	$	2,617		$	3,802
Accounts receivable - net of allowances for
doubtful accounts of $1,125 and $1,205		14,167			14,978
Prepaid expenses		1,820			1,572
Deferred income taxes		1,293			1,274
Other current assets		2,465			2,708
Total current assets		22,362			24,334
Property, Plant and Equipment - Net		99,360			100,093
Goodwill		73,052			73,259
Licenses		49,028			48,759
Customer Lists and Relationships - Net		6,624			7,420
Other Intangible Assets - Net		5,680			5,644
Investments in Equity Affiliates		3,278			2,921
Other Assets		6,317			6,322
Total Assets	$	265,701		$	268,752
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	9,437		$	7,361
Accounts payable and accrued liabilities		18,087			20,999
Advanced billing and customer deposits		4,061			4,170
Accrued taxes		2,639			1,696
Dividends payable		2,482			2,479
Total current liabilities		36,706			36,705
Long-Term Debt		60,024			64,720
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		25,520			23,803
Postemployment benefit obligation		27,709			27,849
Other noncurrent liabilities		13,276			13,350
Total deferred credits and other noncurrent liabilities		66,505			65,002
Stockholders' Equity
Common stock ($1 par value)		6,495			6,495
Additional paid-in-capital		91,557			91,707
Retained earnings		39,373			39,366
Treasury stock (at cost)		(21,137	)		(21,260	)
Accumulated other comprehensive loss		(14,265	)		(14,408	)
Noncontrolling interest		443			425
Total stockholders' equity		102,466			102,325
Total Liabilities and Stockholders' Equity	$	265,701		$	268,752

Financial Data
AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions, increase (decrease) in cash and cash equivalents
Unaudited	Three months ended
	March 31,
	2010			2009
Operating Activities
Net income	$	2,562		$	3,201
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		4,826			4,886
Undistributed earnings from investments in equity affiliates		(201	)		(124	)
Bad debt expense		350			509
Deferred income tax expense		1,612			126
Net loss from impairment and sale of investments		50			82
Changes in operating assets and liabilities:
Accounts receivable		461			573
Other current assets		88			(51	)
Accounts payable and accrued liabilities		(2,084	)		(1,931	)
Net income attributable to noncontrolling interest		(87	)		(75	)
Other - net		(324	)		719
Total adjustments		4,691			4,714
Net Cash Provided by Operating Activities		7,253			7,915
Investing Activities
Construction and capital expenditures
Capital expenditures		(3,156	)		(3,173	)
Interest during construction		(184	)		(185	)
Acquisitions, net of cash acquired		(178	)		-
Dispositions		1			181
Sales of securities net of investments		(20	)		15
Other		8			5
Net Cash Used in Investing Activities		(3,529	)		(3,157	)
Financing Activities
Net change in short-term borrowings with
original maturities of three months or less		323			(3,909	)
Issuance of long-term debt		-			5,450
Repayment of long-term debt		(2,512	)		(1,261	)
Issuance of treasury stock		3			1
Dividends paid		(2,479	)		(2,416	)
Other		(244	)		(603	)
Net Cash Used in Financing Activities		(4,909	)		(2,738	)
Net increase (decrease) in cash and cash equivalents		(1,185	)		2,020
Cash and cash equivalents beginning of year		3,802			1,792
Cash and Cash Equivalents End of Period	$	2,617		$	3,812

Financial Data
AT&T Inc.
Supplementary Operating and Financial Data
Dollars in millions except per share amounts
Unaudited	Three Months Ended
	3/31/2010			3/31/2009			% Chg
Wireless
Wireless Customers (000)		86,987			78,232			11.2	%
Net Customer Additions (000)		1,857			1,223			51.8	%
M&A Activity, Partitioned Customers and Other Adjs. (000)		10			-
Total Churn7		1.30	%		1.56	%	-26 BP
Postpaid Customers (000)7		65,108			60,535			7.6	%
Net Postpaid Customer Additions (000)7		512			897			-42.9	%
Postpaid Churn7		1.07	%		1.15	%	-8 BP
Licensed POPs (000,000)		307			306			0.3	%
In-Region Wireline 1
Total Consumer Revenue Connections (000)
Retail Consumer Voice Connections 2		26,633			29,969			-11.1	%
Consumer Wired Broadband Connections 3		13,989			13,344			4.8	%
Video Connections: 4
Satellite Connections		2,127			2,205			-3.5	%
U-verse Video Connections		2,295			1,329			72.7	%
Total Consumer Revenue Connections (000)		45,044			46,847			-3.8	%
Net Consumer Revenue Connection Changes (000)		(243	)		(196	)		-24.0	%
Broadband and Video
Total Broadband Connections (000) 5		17,532			16,736			4.8	%
Net Broadband Connection Changes (000) 5		278			471			-41.0	%
Total Video Connections (000) 4		4,423			3,534			25.2	%
Net Video Connection Changes (000) 4		184			299			-38.5	%
AT&T Inc.
Construction and capital expenditures
Capital expenditures	$	3,156		$	3,173			-0.5	%
Interest during construction	$	184		$	185			-0.5	%
Dividends Declared per Share	$	0.4200		$	0.4100			2.4	%
End of Period Common Shares Outstanding (000,000)		5,909			5,900			0.2	%
Debt Ratio 6		40.4	%		43.2	%	-280 BP
Total Employees		276,280			294,600			-6.2	%

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	Consumer Wired 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 1Q10, total switched access lines were 48,083, retail business switched access lines totaled 19,854, and wholesale and coin switched access lines totaled 2,741.