AT&T 4th Quarter 2008 Earnings

AT&T Reports Fourth-Quarter and Full-Year Results Highlighted by Robust Wireless Data Growth, Accelerated U-verse TV Ramp, Continued Double-Digit Growth in IP Data Services
Dallas, Texas, January 28, 2009

>Full-year reported EPS of $2.16, up from $1.94 for 2007; full-year adjusted EPS of $2.81, compared with $2.76 for 2007
>Fourth-quarter reported EPS of $0.41 versus $0.51 for the year-earlier quarter; adjusted fourth-quarter EPS of $0.64 versus $0.71
>Fourth-quarter EPS reflects the success of AT&T's iPhone 3G launch. Adjusted results exclude merger-related costs and a previously announced force reduction charge. In addition, both reported and adjusted fourth-quarter 2008 earnings include $0.07 of pressure from the company's iPhone 3G initiative, hurricane-related expenses and foreign exchange impacts
>2.1 million fourth-quarter net gain in wireless subscribers to reach 77.0 million in service, up 7.0 million over the past year
>4.3 million iPhone 3G devices activated in the second half of 2008, including 1.9 million in the fourth quarter. Approximately 40 percent of iPhone activations were for customers new to AT&T. iPhone 3G continues to deliver high-value subscribers with significantly higher ARPU (average monthly revenues per subscriber) and lower churn than AT&T's postpaid subscriber average
>Wireless postpaid subscriber ARPU growth of 3.9 percent versus the year-earlier quarter to $59.59; postpaid data ARPU up 35.7 percent versus the fourth quarter of 2007 and up 10.9 percent sequentially
>51.2 percent growth in wireless data revenues — reflecting rapid adoption of wireless integrated devices and increased usage of wireless Internet access, messaging and related services; AT&T's wireless integrated devices in service more than doubled over the past year
>Strong ramp in AT&T U-verseSM TV subscribers, with a fourth-quarter net increase of 264,000, the company's best quarterly gain to date, to reach more than 1 million in service; U-verse network deployment now reaches 17 million living units
>14.2 percent fourth-quarter growth in wireline IP data revenues driven by rapid expansion in AT&T U-verse services and growth in business products such as Virtual Private Networks (VPNs) and managed Internet services