AT&T (T) 8-K Stock Buyback Begins on Previous 300 Million Share Authorization

Financial Data
AT&T Inc.
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Three Months Ended										Twelve Months Ended
		12/31/2011			12/31/2010			% Chg			12/31/2011			12/31/2010			% Chg
Operating Revenues
Wireless service		$	14,347		$	13,799			4.0	%	$	56,726		$	53,510			6.0	%
Data			7,598			7,091			7.1	%		29,606			27,555			7.4	%
Voice			5,995			6,647			-9.8	%		25,131			28,332			-11.3	%
Directory			781			926			-15.7	%		3,293			3,935			-16.3	%
Other			3,782			2,898			30.5	%		11,967			10,948			9.3	%
Total Operating Revenues			32,503			31,361			3.6	%		126,723			124,280			2.0	%
Operating Expenses
Cost of services and sales (exclusive of depreciation and      amortization shown separately below)			17,474			13,939			25.4	%		57,374			52,379			9.5	%
Selling, general and administrative			16,536			10,342			59.9	%		38,844			32,864			18.2	%
Impairment of intangible assets			2,910			85			-			2,910			85			-
Depreciation and amortization			4,573			4,907			-6.8	%		18,377			19,379			-5.2	%
Total Operating Expenses			41,493			29,273			41.7	%		117,505			104,707			12.2	%
Operating Income (Loss)			(8,990	)		2,088			-			9,218			19,573			-52.9	%
Interest Expense			952			746			27.6	%		3,535			2,994			18.1	%
Equity in Net Income of Affiliates			135			133			1.5	%		784			762			2.9	%
Other Income (Expense) - Net			117			72			62.5	%		249			897			-72.2	%
Income (Loss) from Continuing Operations Before Income Taxes			(9,690	)		1,547			-			6,716			18,238			-63.2	%
Income Tax (Benefit) Expense			(3,062	)		388			-			2,532			(1,162	)		-
Income (Loss) from Continuing Operations			(6,628	)		1,159			-			4,184			19,400			-78.4	%
Income from Discontinued Operations, net of tax			-			2			-			-			779			-
Net Income (Loss)			(6,628	)		1,161			-			4,184			20,179			-79.3	%
Less: Net Income Attributable to Noncontrolling Interest			(50	)		(72	)		30.6	%		(240	)		(315	)		23.8	%
Net Income (Loss) Attributable to AT&T		$	(6,678	)	$	1,089			-		$	3,944		$	19,864			-80.1	%
Basic Earnings (Loss) Per Share from Continuing      Operations Attributable to AT&T		$	(1.12	)	$	0.18			-		$	0.66		$	3.23			-79.6	%
Basic Earnings Per Share from Discontinued      Operations Attributable to AT&T			-			-			-			-			0.13			-
Basic Earnings (Loss) Per Share Attributable to AT&T		$	(1.12	)	$	0.18			-		$	0.66		$	3.36			-80.4	%
Weighted Average Common      Shares Outstanding (000,000)			5,933			5,915			0.3	%		5,928			5,913			0.3	%
Diluted Earnings (Loss) Per Share from Continuing      Operations Attributable to AT&T		$	(1.12	)	$	0.18			-		$	0.66		$	3.22			-79.5	%
Diluted Earnings Per Share from Discontinued      Operations Attributable to AT&T			-			-			-			-			0.13			-
Diluted Earnings (Loss) Per Share Attributable to AT&T		$	(1.12	)	$	0.18			-		$	0.66		$	3.35			-80.3	%
Weighted Average Common      Shares Outstanding with Dilution (000,000)			5,955			5,941			0.2	%		5,950			5,938			0.2	%

Financial Data
AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended									Twelve Months Ended
Wireless	12/31/2011			12/31/2010			% Chg			12/31/2011				12/31/2010			% Chg
Segment Operating Revenues
Service	$	14,347		$	13,799			4.0	%	$	56,726			$	53,510			6.0	%
Equipment		2,348			1,382			69.9	%		6,486				4,990			30.0	%
Total Segment Operating Revenues		16,695			15,181			10.0	%		63,212				58,500			8.1	%
Segment Operating Expenses
Operations and support		12,574			9,988			25.9	%		41,581				36,746			13.2	%
Depreciation and amortization		1,587			1,721			-7.8	%		6,324				6,497			-2.7	%
Total Segment Operating Expenses		14,161			11,709			20.9	%		47,905				43,243			10.8	%
Segment Operating Income		2,534			3,472			-27.0	%		15,307				15,257			0.3	%
Equity in Net Income (Loss) of Affiliates		(10	)		(5	)		-			(29	)			9			-
Segment Income	$	2,524		$	3,467			-27.2	%	$	15,278			$	15,266			0.1	%
Segment Operating Income Margin		15.2	%		22.9	%					24.2	%			26.1	%
Wireline
Segment Operating Revenues
Data	$	7,598		$	7,091			7.1	%	$	29,606			$	27,555			7.4	%
Voice		5,995			6,647			-9.8	%		25,131				28,332			-11.3	%
Other		1,326			1,390			-4.6	%		5,028				5,413			-7.1	%
Total Segment Operating Revenues		14,919			15,128			-1.4	%		59,765				61,300			-2.5	%
Segment Operating Expenses
Operations and support		10,250			10,075			1.7	%		40,879				41,096			-0.5	%
Depreciation and amortization		2,889			3,091			-6.5	%		11,615				12,371			-6.1	%
Total Segment Operating Expenses		13,139			13,166			-0.2	%		52,494				53,467			-1.8	%
Segment Operating Income		1,780			1,962			-9.3	%		7,271				7,833			-7.2	%
Equity in Net Income of Affiliates		-			4			-			-				11			-
Segment Income	$	1,780		$	1,966			-9.5	%	$	7,271			$	7,844			-7.3	%
Segment Operating Income Margin		11.9	%		13.0	%					12.2	%			12.8	%
Advertising Solutions
Segment Operating Revenues	$	781		$	926			-15.7	%	$	3,293			$	3,935			-16.3	%
Segment Operating Expenses
Operations and support		558			626			-10.9	%		2,264				2,583			-12.3	%
Impairment of Intangible Assets		2,910			-			-			2,910				-			-
Depreciation and amortization		85			104			-18.3	%		386				497			-22.3	%
Total Segment Operating Expenses		3,553			730			-			5,560				3,080			80.5	%
Segment Income (Loss)	$	(2,772	)	$	196			-		$	(2,267	)		$	855			-
Segment Income Margin		-			21.2	%					(68.8	)	%		21.7	%
Other
Segment Operating Revenues	$	108		$	126			-14.3	%	$	453			$	545			-16.9	%
Segment Operating Expenses		4,360			1,147			-			5,266				2,396			-
Segment Operating Loss		(4,252	)		(1,021	)		-			(4,813	)			(1,851	)		-
Equity in Net Income of Affiliates		145			134			8.2	%		813				742			9.6	%
Segment Loss from Continuing Operations	$	(4,107	)	$	(887	)		-		$	(4,000	)		$	(1,109	)		-

Financial Data
AT&T Inc.
Consolidated Balance Sheets
Dollars in millions except per share amounts
	12/31/11			12/31/10
	Unaudited
Assets
Current Assets
Cash and cash equivalents	$	3,185		$	1,437
Accounts receivable - net of allowances for
doubtful accounts of $878 and $957		13,606			13,610
Prepaid expenses		1,155			1,458
Deferred income taxes		1,470			1,170
Other current assets		3,611			3,179
Total current assets		23,027			20,854
Property, Plant and Equipment - Net		107,087			103,196
Goodwill		70,842			73,601
Licenses		51,374			50,372
Customer Lists and Relationships - Net		2,757			4,708
Other Intangible Assets - Net		5,212			5,440
Investments in Equity Affiliates		3,718			4,515
Other Assets		6,327			6,705
Total Assets	$	270,344		$	269,391
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	3,453		$	7,196
Accounts payable and accrued liabilities		19,858			20,055
Advanced billing and customer deposits		3,872			4,086
Accrued taxes		1,003			975
Dividends payable		2,608			2,542
Total current liabilities		30,794			34,854
Long-Term Debt		61,300			58,971
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		25,748			22,070
Postemployment benefit obligation		34,011			28,803
Other noncurrent liabilities		12,694			12,743
Total deferred credits and other noncurrent liabilities		72,453			63,616
Stockholders' Equity
Common stock		6,495			6,495
Additional paid-in capital		91,156			91,731
Retained earnings		25,453			31,792
Treasury stock		(20,750	)		(21,083	)
Accumulated other comprehensive income		3,180			2,712
Noncontrolling interest		263			303
Total stockholders' equity		105,797			111,950
Total Liabilities and Stockholders' Equity	$	270,344		$	269,391

Financial Data
AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions
Unaudited	Twelve Months Ended
	12/31/11			12/31/10			12/31/09
Operating Activities
Net income	$	4,184		$	20,179		$	12,447
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		18,377			19,379			19,515
Undistributed earnings from investments in equity affiliates		(623	)		(603	)		(419	)
Provision for uncollectible accounts		1,136			1,334			1,762
Deferred income tax expense (benefit) and noncurrent
unrecognized tax benefits		2,937			(3,280	)		1,885
Net gain from impairment and sale of investments		(89	)		(802	)		-
Impairment of intangible assets		2,910			85			-
Remeasurement of pension and postretirement benefits		6,280			2,521			215
Income from discontinued operations		-			(779	)		(20	)
Changes in operating assets and liabilities:
Accounts receivable		(1,133	)		(99	)		(490	)
Other current assets		(428	)		(187	)		(617	)
Accounts payable and accrued liabilities		(383	)		(1,508	)		943
Retirement benefit funding		(1,000	)		-			-
Other - net		2,480			(1,247	)		(816	)
Total adjustments		30,464			14,814			21,958
Net Cash Provided by Operating Activities		34,648			34,993			34,405
Investing Activities
Construction and capital expenditures:
Capital expenditures		(20,110	)		(19,530	)		(16,554	)
Interest during construction		(162	)		(772	)		(740	)
Acquisitions, net of cash acquired		(2,368	)		(2,906	)		(983	)
Dispositions		1,301			1,830			287
(Purchases) and sales of securities, net		62			(100	)		55
Other		27			29			52
Net Cash Used in Investing Activities		(21,250	)		(21,449	)		(17,883	)
Financing Activities
Net change in short-term borrowings with
original maturities of three months or less		(1,625	)		1,592			(3,910	)
Issuance of long-term debt		7,936			2,235			8,161
Repayment of long-term debt		(7,574	)		(9,294	)		(8,652	)
Issuance of treasury shares		237			50			28
Dividends paid		(10,172	)		(9,916	)		(9,670	)
Other		(452	)		(515	)		(465	)
Net Cash Used in Financing Activities		(11,650	)		(15,848	)		(14,508	)
Net increase (decrease) in cash and cash equivalents		1,748			(2,304	)		2,014
Cash and cash equivalents beginning of year		1,437			3,741			1,727
Cash and Cash Equivalents End of Year	$	3,185		$	1,437		$	3,741

Financial Data
AT&T Inc.
Supplementary Operating and Financial Data
Dollars in millions except per share amounts
Unaudited			Three Months Ended									Twelve Months Ended
			12/31/2011			12/31/2010			% Chg			12/31/2011			12/31/2010			% Chg
Wireless
Volumes (000)
	Total												103,247			95,536			8.1	%
		Postpaid6											69,309			68,041			1.9	%
		Prepaid6											7,225			6,524			10.7	%
		Reseller6											13,644			11,645			17.2	%
		Connected Devices6											13,069			9,326			40.1	%
Wireless Net Adds (000)
	Total			2,497			2,803			-10.9	%		7,699			8,853			-13.0	%
		Postpaid6		717			400			79.3	%		1,429			2,153			-33.6	%
		Prepaid6		159			307			-48.2	%		674			952			-29.2	%
		Reseller6		592			595			-0.5	%		1,874			1,140			64.4	%
		Connected Devices6		1,029			1,501			-31.4	%		3,722			4,608			-19.2	%
	M&A Activity, Partitioned Customers and Other Adjs.			12			(28	)		-			12			1,563			-99.2	%
Wireless Churn
	Postpaid Churn6			1.21	%		1.15	%	6 BP				1.18	%		1.09	%	9 BP
	Total Churn6			1.39	%		1.32	%	7 BP				1.37	%		1.31	%	6 BP
Other
	Licensed POPs (000,000)												313			308			1.6	%
In-Region Wireline1
Voice
	Total Wireline Voice Connections												39,012			43,563			-10.4	%
		Net Change		(1,086	)		(1,233	)		11.9	%		(4,551	)		(4,925	)		7.6	%
Broadband
	Total Wireline Broadband Connections												16,427			16,309			0.7	%
		Net Change		(49	)		209			-			118			520			-77.3	%
Video
		U-verse											3,791			2,987			26.9	%
		Satellite											1,765			1,930			-8.5	%
	Total Video Connections												5,556			4,917			13.0	%
		Net Change		164			182			-9.9	%		639			678			-5.8	%
Consumer Revenue Connections
	Broadband3												14,492			14,320			1.2	%
	Video Connections4												5,542			4,912			12.8	%
	Voice2												21,232			24,195			-12.2	%
Total Consumer Revenue Connections													41,266			43,427			-5.0	%
	Net Change			(586	)		(306	)		-91.5	%		(2,161	)		(1,861	)		-16.1	%
AT&T Inc.
	Construction and capital expenditures
		Capital expenditures	$	5,485		$	6,360			-13.8	%	$	20,110		$	19,530			3.0	%
		Interest during construction	$	43		$	195			-77.9	%	$	162		$	772			-79.0	%
	Dividends Declared per Share		$	0.44		$	0.43			2.3	%	$	1.73		$	1.69			2.4	%
	End of Period Common Shares Outstanding (000,000)												5,927			5,911			0.3	%
	Debt Ratio5												38.0	%		37.1	%	90 BP
	Total Employees												256,420			266,590			-3.8	%
1	In-region wireline represents access lines served by AT&T's incumbent local exchange companies.
2	Includes consumer U-verse Voice over Internet Protocol connections of 2,278 as of December 31, 2011.
3	Consumer wireline 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 long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity.
6	Prior year amounts restated to conform to current period reporting methodology.
	Note: For the end of 4Q11, total switched access lines were 36,734, retail business switched access lines totaled 15,613, and wholesale
		and coin switched access lines totaled 2,167.

Financial Data
AT&T Inc.
Non-GAAP Wireless Reconciliation
Wireless Segment EBITDA
Dollars in millions
Unaudited
	Three Months Ended															Twelve Months Ended
	12/31/10			3/31/11			6/30/11			9/30/11			12/31/11			12/31/09			12/31/10			12/31/11
Segment Operating Revenues
Service	$	13,799		$	13,961		$	14,157		$	14,261		$	14,347		$	48,563		$	53,510		$	56,726
Equipment		1,382			1,348			1,445			1,345			2,348			4,941			4,990			6,486
Total Segment Operating Revenues		15,181			15,309			15,602			15,606			16,695			53,504			58,500			63,212
Segment Operating Expenses
Operations and support		9,988			9,858			9,782			9,367			12,574			33,631			36,746			41,581
Depreciation and amortization		1,721			1,505			1,613			1,619			1,587			6,043			6,497			6,324
Total Segment Operating Expenses		11,709			11,363			11,395			10,986			14,161			39,674			43,243			47,905
Segment Operating Income		3,472			3,946			4,207			4,620			2,534			13,830			15,257			15,307
Segment Operating Income Margin		22.9	%		25.8	%		27.0	%		29.6	%		15.2	%		25.8	%		26.1	%		24.2	%
Plus: Depreciation and amortization		1,721			1,505			1,613			1,619			1,587			6,043			6,497			6,324
EBITDA		5,193			5,451			5,820			6,239			4,121			19,873			21,754			21,631
EBITDA as a % of Service Revenue		37.6	%		39.0	%		41.1	%		43.7	%		28.7	%		40.9	%		40.7	%		38.1	%
EBITDA is defined as Earnings Before Interest, Taxes, Depreciation and Amortization. Annual Service EBITDA Margin is calculated as the sum of quarterly EBITDA divided by the sum of quarterly Service Revenues.

Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliation
Free Cash Flow
Dollars in Millions
Unaudited
	Three Months Ended						Twelve Months Ended
	12/31/10			12/31/11			12/31/10			12/31/11
Net cash provided by operating activities	$	9,643		$	7,498		$	34,993		$	34,648
Less: Construction and capital expenditures		(6,555	)		(5,528	)		(20,302	)		(20,272	)
Free Cash Flow	$	3,088		$	1,970		$	14,691		$	14,376
Free cash flow is defined as cash from operations minus construction and 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.
Free Cash Flow after Dividends
Dollars in Millions
Unaudited
	Three Months Ended						Twelve Months Ended
	12/31/10			12/31/11			12/31/10			12/31/11
Net cash provided by operating activities	$	9,643		$	7,498		$	34,993		$	34,648
Less: Construction and capital expenditures		(6,555	)		(5,528	)		(20,302	)		(20,272	)
Free Cash Flow		3,088			1,970			14,691			14,376
Less: Dividends paid		(2,480	)		(2,545	)		(9,916	)		(10,172	)
Free Cash Flow After Dividends	$	608		$	(575	)	$	4,775		$	4,204

Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliation
Net Debt-to-Adjusted EBITDA Ratio
Dollars in millions
Unaudited
	Three Months Ended
	3/31/11		6/30/11		9/30/11		12/31/11			2011
Operating Revenues	$	31,247	$	31,495	$	31,478	$	32,503		$	126,723
Operating Expenses		25,439		25,330		25,243		41,493			117,505
Total Operating Income		5,808		6,165		6,235		(8,990	)		9,218
Add Back Depreciation and Amortization		4,584		4,602		4,618		4,573			18,377
Consolidated Reported EBITDA		10,392		10,767		10,853		(4,417	)		27,595
Add Back:
Actuarial Loss on Benefit Plan								6,280			6,280
Termination of T-Mobile Acquistion								4,181			4,181
Directory Asset Impairments								2,910			2,910
Consolidated Adjusted EBITDA*		10,392		10,767		10,853		8,954			40,966
End-of-period current debt											3,453
End-of-period long-term debt											61,300
Total End-of-Period Debt											64,753
(Premiums) Discounts on long-term debt											(45	)
Normalized Debt Balance											64,708
Less Cash and Cash Equivalents											3,185
Normalized Net Debt Balance											61,523
Net Debt-to-Adjusted EBITDA Ratio											1.50
*Adjusted EBITDA excludes the impact of the benefit plan actuarial loss, charges related to the termination of the T-Mobile acquisition and asset impairments related to the the Directory business in order to better represent AT&T's operational performance.

Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliation
Adjusted Operating Income Margin
Dollars in millions
Unaudited
	Three Months Ended						Twelve Months Ended
	12/31/10			12/31/11			12/31/10			12/31/11
Operating Revenues	$	31,361		$	32,503		$	124,280		$	126,723
Operating Expenses		29,273			41,493			104,707			117,505
Total Operating Income		2,088			(8,990	)		19,573			9,218
Add Back:
Actuarial Loss on Benefit Plan		2,521			6,280			2,521			6,280
Termination of T-Mobile Acquisition					4,181			-			4,181
Asset Impairments		173			2,910			173			2,910
Severance Costs		769						769			-
Adjusted Operating Income		5,551			4,381			23,036			22,589
Adjusted Operating Income Margin		17.7	%		13.5	%		18.5	%		17.8	%
Adjusted Operating Income and Adjusted Operating Income Margin are non-GAAP financial measures calculated by excluding from operating revenues and operating expenses significant items that are non-operational or non-recurring in nature. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends. Adjusted Operating Income and Adjusted Operating Income Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculation of Adjusted Operating Income, as presented, may differ from similarly titled measures reported by other companies.

Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliation
Adjusted Diluted EPS
Unaudited
	Three Months Ended						Twelve Months Ended
	12/31/10			12/31/11			12/31/10			12/31/11
Reported Diluted EPS	$	0.18		$	(1.12	)	$	3.35		$	0.66
Significant Items:
Actuarial Loss on Benefit Plan		(0.26	)		(0.65	)		(0.26	)		(0.65	)
Termination of T-Mobile Acquisition		-			(0.44	)		-			(0.44	)
Asset Impairments*		(0.02	)		(0.48	)		(0.02	)		(0.48	)
Tax Settlement		-			0.03			1.40			0.03
Severance		(0.09	)		-			(0.09	)		-
Gain from Sterling Sale		-			-			0.13			-
Gain on Telmex Internacional Transaction		-			-			0.07			-
Tax Impact of Medicare Subsidy		-			-			(0.17	)		-
Adjusted Diluted EPS	$	0.55		$	0.42			2.29		$	2.20
*Impairments in 2011 were all from intangible assets.  Impairments in 2010 comprised several asset classes. Adjusted diluted EPS is a non-GAAP financial measure calculated by excluding from operating revenues and operating expenses significant items that are non-operational or non-recurring in nature. Management believes that this measure provides relevant and useful information to investors and other users  of our financial data in evaluating the effectiveness of our operations and underlying business trends. Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculation of Adjusted diluted EPS, as presented, may differ from similarly titled measures reported by other companies.