AT&T (T) 8-K AT&T Reports Fourth-Quarter Earnings Growth with a 2.7 Million

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.

Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliations
Free Cash Flow
AT&T Inc.
Dollars in Millions
Unaudited
December 31, 2009		Three Months Ended	Twelve Months Ended
Net cash provided by operating activities	$	8,964	$                    34,445
Less: Construction and capital expenditures		(5,715)	(17,335)
Free Cash Flow	$	3,249	$                  17,110

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 Wireless Reconciliation
Wireless Segment OIBDA
AT&T Inc.
Dollars in millions
Unaudited
	Three Months Ended
	12/31/2008			3/31/2009			6/30/2009			9/30/2009			12/31/2009
Service Revenues	$	11,541		$	11,668		$	11,983		$	12,399		$	12,607
Equipment Revenues		1,318			1,192			1,262			1,255			1,231
Total Operating Revenues		12,859			12,860			13,245			13,654			13,838
Operating Expenses
Operations and support		8,731			8,085			8,658			8,877			8,941
Depreciation and amortization		1,443			1,434			1,436			1,418			1,477
Total Operating Expenses		10,174			9,519			10,094			10,295			10,418
Operating Income		2,685			3,341			3,151			3,359			3,420
Plus: Depreciation and amortization		1,443			1,434			1,436			1,418			1,477
OIBDA		4,128			4,775			4,587			4,777			4,897
OIBDA as a % of Service Revenue		35.8	%		40.9	%		38.3	%		38.5	%		38.8	%

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.