AT&T Investor Update

1Q09 Earnings Conference CallApril 22, 2009

© 2009 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.

2

Information set forth in this presentation contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. 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 and revise statements contained in this presentation based on new information or otherwise.

This presentation may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company’s Web site at www.att.com/investor.relations.

Cautionary Language Concerning Forward-Looking Statements

3

1Q09 Financial Summary

1Q08 1Q09

$0.57

AT&T Diluted Earnings Per Share

$0.53 EPS – includes $0.05 of pressure from incremental noncash pension/retiree benefits costs

Stable consolidated revenues –(0.6)% versus 1Q08; continuing economic impacts largely offset by growth in wireless, U-verseSM, broadband and strategic business services

Stable consolidated margins – 18.8% in 1Q09 versus 18.6% for full-year 2008

$4.6 billion in free cash flow before dividends

Solid quarter, strong cost execution, results in line with full-year outlook:

$0.53

4

AT&T 1Q09 Highlights

• Strong wireless growth – 1.2 million total net adds; 875,000 postpaid net adds, up 24.1% versus 1Q08

• 1.6 million iPhone activations – >40% new to AT&T, ARPU and churn characteristics continue to be strong

• 40.9% wireless OIBDA service margin – up more than 500 basis points sequentially

• Strong U-verse TV growth – 284,000 net adds to reach 1.3 million, with strong broadband and VoIP attach rates

• 471,000 increase in total broadband subscribers –significant step up from recent quarters

• 16.4% growth in wireline IP data revenues –driven by AT&T U-verse growth and continued double-digit gains in business IP revenues

• Margin strength, on track with full-year outlook –driven by wireless improvement and disciplined execution of wireline cost initiatives

Strong execution,

solid cost discipline,

continued advances

in key growth areas

for the future

OIBDA service margin is operating income before depreciation and amortization, divided by total service revenues.

5

Revenue Trends

1Q09 Revenue Mix

Wireless – 100% owned 42%

Wired Data/Managed Services 24%

Wired Voice 28%

Advertising Solutions/Other 6%

• Economic impacts primarily affecting wireline voice, which was down 12.2%

• Growth in wireless and data services:

Wireless Services +9.6%

Wireline Data +5.3%

Wireline IP Data +16.4%

$30.6 billion 1Q09 consolidated operating revenues, down 0.6%

AT&T Consolidated Revenues($ in billions)

1Q08 2Q08 3Q08 4Q08 1Q09

$30.9 $31.3 $31.1$30.7 $30.6

Diversified mix with increased percentage of revenues coming from wireless and data services

6

Continued Strong Wireless Growth

Postpaid Gross Adds

(in millions)

1Q08 1Q09

Postpaid Net Adds

(in thousands)

1Q08 1Q09

3.02.8

875

705

Postpaid Subscriber

ARPU

$58.02$59.21

1Q08 1Q09

Wireless service revenues up >$1 billion or 9.6% versus 1Q08

Total wireless subscribers up 6.9 million over past year, led by strong postpaid gains

Year-over-year postpaid subscriber metrics:

Gross adds +9%

Net adds +24%

Data ARPU +27%

Total ARPU +2%

AT&T Wireless Service Revenues($ in billions)

1Q08 2Q08 3Q08 4Q08 1Q09

$11.0$11.3 $11.5

$10.6

$11.7

7

• Continued strong data ARPU growth, up >25% year over year

• >94 billion text messages sent in 1Q09, more than double 1Q08

• >40% growth in media bundles and Internet access revenues

• Postpaid subscribers with data plans up 900 basis points over past year, approaching 50%

Continued Robust Wireless Data Growth, Up 38.6%

Wireless data revenue growth driven by more data-capable devices, richer applications

$3.2

Wireless Data Revenues($ in billions)

$2.3

1Q08 1Q09

$13.64

Wireless Data ARPU

$10.80

1Q08 1Q09

8

Strong Integrated Device Growth, More Than 1.6 Million iPhone Activations

AT&T Wireless Postpaid Integrated Devices in Service

(in millions)

4Q083Q081Q08 2Q08

8.8

19.3

16.2

31.7%

22.3%

15.8%

18.0%

Percentage of Postpaid Subscribers with Integrated Devices

10.3

13.1

27.0%

1Q09

Broad array of attractive devices –Apple iPhone, BlackBerry® BoldTM, quick messaging devices, netbooks

Explosion of applications and content – AT&T Apps Beta launched in first quarter, largest catalog of mobile music among U.S. wireless companies

United States’ fastest 3G network –strong spectrum position, increased use of 850 MHz for 3G

9

40.9% Wireless OIBDA Service Margin

• ARPU and churn characteristics of growing iPhone 3G customer base

• Continuing operational improvements in network and support functions

• >10 basis point year-over-year improvement in total churn

Wireless margin expansion on track with full-year outlook.

Major drivers:

33.5%

35.8%

41.2% 40.9%41.7%

1Q08 4Q08 1Q093Q082Q08

AT&T Wireless OIBDA Service Margin

Continue to expect wireless OIBDA margin in the mid 40% range long term

iPhone 3G launch

OIBDA service margin is operating income before depreciation and amortization, divided by total service revenues.

10

Strong AT&T U-verse Growth

AT&T U-verse TV Subscribers(in thousands)

1Q08 2Q08 3Q08 4Q08 1Q09

Net gain: AT&T U-verse VoIP

• Double-digit U-verse TV penetration of eligible living units

• Mid-teens penetration in areas marketed to for at least 18 months

• Service includes a host of advanced features including:– Total Home DVR– 100+ High Definition channels– integrated voice and broadband– AT&T U-verse voice launched

in 86% of markets

• Total video penetration of households served at 12.6%

AT&T U-verse TV subscriber growth delivering high broadband and VoIP attach rates

1Q08 2Q08 3Q08 4Q08 1Q09

120

73

427

170

264

232

148170

284

Net Gain – AT&T U-verse TV Subscribers(in thousands)

549

781

1,045

379

1,329

11

Step Up in Broadband Growth

• 471,000 first-quarter increase in total broadband subscribers

• >50% sequential increase in wirelinebroadband net adds

• AT&T U-verse high speed Internet connections more than tripled over the past year to 1.3 million

• Continued growth in wireless/ broadband bundles

• Industry’s largest Wi-Fi footprint, with >20,000 U.S. hotspots

AT&T Total Broadband ConnectionsWireline Broadband Users Plus Wireless 3G

LaptopConnect Users(in millions)

4Q083Q081Q08 2Q08

15.4

16.3

15.616.0

Strong broadband growth driven by strength in wireline consumer connections

16.7

1Q09

264

238

148

168

284

Net gain: AT&T U-verse high speed Internet subscribers

12

Regional consumer revenues down 6.8% year over year; ARPU growth and improved connections trends driven by U-verse TV and broadband

Wireline Consumer Revenue and Connections Trends

1Q08 2Q08 3Q08 4Q08

1Q08

AT&T Regional Consumer Revenue Per Household Served

1Q09

$62.23

$63.50 1Q09

Sequential Change In Regional Consumer Connections(in thousands)

(923)(870)

(504)

(98)

(196)• 2.0% increase in

consumer ARPU

• 23.0% year-over-year growth in consumer IP revenues (AT&T U-verse and broadband services)

• Improved connections trends where AT&T U-verse TV is marketed

13

AT&T Business Solutions

Total $10.7 (4.0)%

Services (Excludes CPE) $10.3 (2.8)%

IP Data $1.5 10.5%

1Q09Year-Over-

Year Growth

AT&T Business Solutions Revenues($ in billions)

Total business trends reflect strong growth in IP data and strategic services, offset by continuing economic pressures, primarily impacting voice

• Economic impacts focused on voice usage; largest impacts in financial, transportation and general merchandise retailing sectors

• Largest economic impacts in low-margin areas such as CPE and international voice, with cost offsets

• New service adoption continues to be solid

• 10.5% growth in business IP data revenues

• 19.6% growth in strategic services

– Ethernet and VPNs up >20%

– IP conferencing up >70%

$969

$873

$810

$907

1Q08 2Q08 3Q08 4Q08 1Q09

Strategic Business Services Revenues($ in millions)

Strategic business services include the new-generation capabilities that lead AT&T’s most advanced solutions – including Ethernet, VPNs, hosting, IP conferencing and applications services.

$941

14

Stable Consolidated Margin

1Q09 margin stable versus 2008 and on track with full-year outlook, reflecting operational improvements in both wireless and wireline

• Execution of major operational cost initiatives on track:

– Consolidate support organizations

– Integrate network planning and operations, business services

– Total force down by 8,000 since year end 2008

• Further decline in dilution from iPhone3G initiative along with improvements in wireless network and support costs

18.6%

AT&T Consolidated Operating Income Margin

Full Year2008

1Q09

18.8%

15

Cash Flow, Balance Sheet Strength

• Cash from operations improvement reflects progress on cost initiatives and lower cash taxes

• Full-year 2009 capital expenditures expected to be in the $17 – $18 billion range

• Total debt reduced by $5.8 billion over the past three quarters

Free cash flow and capital expenditures in line with previously outlined full-year outlook

$7.9

Cash From Operations

$5.0

1Q08 1Q09

Dividends Paid $2.4

Free Cash Flow $4.6

AT&T Cash Summary($ in billions)

Capital Expenditures $3.4

Debt-to-Capital Ratio 43.2%

Totals may not foot due to rounding.

Free Cash Flow is defined as cash from operations less capital expenditures.

16

1Q09 Summary: Strong Execution, on Track with Full-Year Outlook

• Cost discipline – expense initiatives on track, driving stable margins

• Continued investment, strong ramp in major growth platforms –wireless, advanced business solutions, AT&T U-verse services

• Strong wireless momentum, well positioned for next wave of wireless data growth – strong network, attractive device lineup, innovation in applications and new services

• Solid U-verse TV ramp – with high broadband and VoIP attach rates helping drive improved consumer connection trends

• Strong free cash flow – with sound balance sheet and credit metrics

Clear focus: disciplined execution as economy works toward recovery; ramp capabilities and scale to lead

in industry’s best growth areas

AT&T Investor Update

1Q09 Earnings Conference CallApril 22, 2009

© 2009 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.