strategy and execution...continued double-digit growth in adjusted earnings per share and strong...

Strategy and Execution

Randall StephensonChairman and Chief Executive Officer

AT&T Inc.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in these presentations 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.

These presentations 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.

Areas to Cover

Customer trends shaping the industry

AT&T’s unique position to address these customer trends

AT&T’s business model for next-generation growth

Track record of leadership and execution

What you can expect from AT&T

Voice Minutes Are Growing 10% AnnuallyWith a Shift to Wireless

Sources: Chart: Sources: TIA, CTIA, NECA & FCC

0

250

500

750

1,000

1,250

Bill

ions

Trend: Voice Is Growing and Moving to Wireless

1996 2005 20061997 1998 1999 2003 200420022000 2001

Wireline LD minutes of use

Wireless minutes of use

1995

0

200

400

600

800

1,000

Worldwide Storage Capacity PurchasedPetabytes

Source: IDC, 2006

2004 2005 2006

104%104%

84%84%

Trend:Dramatic Expansion in Storage Capacity

AT&T Total Average Broadband Traffic Per DayTerabytes

2005 2006 2007

Trend: Consumer Broadband Volumes More Than Doubled Over the Past Two Years

Up more than 145% Up more than 145% over past two yearsover past two years

Terabytes/Day

60%60%

64%64%

63%63%

82%82%

2003 2004 2005 2006 2007

Trend:Robust Business Data Traffic Growth

Wireless Data Traffic Is Growing Exponentially, Usage Quadrupling Every Year

2005 2006 20072004

AT&T Wireless Data TrafficMbps in Millions

Trend: Wireless Data Growth Is Accelerating

Trend: Wireless Smartphones Drive Data Growth

How early adopters are using their iPhones:

51% have watched a YouTube video

46% have watched a music video

34% have watched the news

Almost twice the usage versus prior to buying the iPhone

Early in Adoption Curve for Media-Rich Devices, Huge Potential in Wireless Data

Trend: Increased Globalization

AT&T International TrafficGigabits Per Second

Nov. 2005 Nov. 2006 Nov. 2007

Up Up ~~ 150% over 150% over past two yearspast two years

Total Telecommunications Spend — 2006

$345Billion

$897 Billion

Sources: IDC, Gartner, Ovum, Merrill

U.S. International

A Growing IndustryPowered by Wireless and IP

Customer expectations for mobility and seamless interactivity are moving higher

Customer demand for bandwidth is increasing

Globalization is driving growth —customers take U.S. expectations for service quality and functionality around the world

The network is increasingly relevant —low-cost, high-capacity, capable of delivering high levels of functionality and security

Transforming AT&T to Align Uniquely With Customer Trends

Wireless AT&T Wireless acquisition

100% wireless ownership through BellSouth acquisition

More recent acquisitions including Dobson and Aloha

Strong wireless execution: 1,350 basis points of wireless margin expansion in 2½ years

Dramatic acceleration in subscriber growth

Five straight quarters of wireless data revenue growth above 60%


Wireless Enterprise AT&T Corp. acquisition

Great set of assets that we have transformed into a premier global network with advanced product sets

Deep sales and technical resourcesincluding AT&T labs

Return to positive enterprise revenue growth a year ahead of original plan


Wireless Enterprise Broadband Industry’s largest broadband subscriber base, approaching 14 million

Nearly 6 million added over past two and a half years


Moving to IP in backbone, wireless and wired

IP makes possible converged wireless and wired services

AT&T U-verseSM deployment expanded to reach 30 million customer locations by 2010

Wireless Enterprise BroadbandIP-Based Network

IP-DrivenMobility

Seamless interactivity

Increased functionality

Scalability

Low cost

Business Model for the Next Generation of Growth

AT&T Platform Connections

Connect more wireless and wired devices, applications and people to our network

Our Goal

More than 1 billion devices connected

AT&T’s Vision

Connect people with their world, everywhere they live and work,

and do it better than anyone else.

Proven Leadership: diverse backgrounds, intensely focused on execution

Bill BlaseSenior Executive VP-Human Resources

Jim CallawaySenior Executive VP-Executive Operations

Jim CicconiSenior ExecutiveVP-External andLegislative Affairs

Cathy CoughlinSenior Executive VP and Global Marketing Officer

Ralph de la VegaPresident and CEO AT&T Mobility

Rick LindnerSenior Executive VP and Chief Financial Officer

Ron SpearsGroup President Global Business Services

John StankeyGroup PresidentTelecom Operations

Wayne WattsSenior Executive VP and General Counsel

Ray WilkinsGroup PresidentDiversified Businesses

Forrest MillerGroup President Corporate Strategy and Development

StrongExecutive Team

Operational execution

Commitment to growth

Shareowner value

What You Can ExpectFrom AT&T

Operate as one company with increased velocity in the marketplacePremier IP-based network

Converged services, seamless connectivity

Continuously elevate the customer experience

What You Can Expect From AT&T

Operational Execution

Commitment to Growth

Shareowner Value

10 Consecutive Quarters of Double-Digit Growth in Adjusted EPS

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07

$0.43$0.47 $0.48

$0.52

$0.58

$0.63$0.61

$0.65

$0.70 $0.71




Shareowner Value


Continued double-digit growthin adjusted earnings per share and strong free cash flow growth

Results increasingly driven by top-line growth — expect to achieve revenue growth at mid-single-digit or better



Shareowner Value


Invest for growth and economic value, return cash to shareowners

12.7% dividend increase announced today, largest annual increase in our history

New share repurchase authorization

Expect to return more than $19 billion to shareowners this year through dividends and share buybacks


Shareowner Value


Unique set of assetsin a growth industry

Lead in mobility and IP, the industry’s powerful growth engines

Proven record of strong operational execution

Strong growth outlook

Substantial value returned to shareowners

AT&T:Our Time Is Now

Strategy and Execution

Randall StephensonChairman and Chief Executive Officer

AT&T Inc.

strategy and execution...continued double-digit growth in adjusted earnings per share and strong...

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