AT&T INC. Quarterly Report for Q2 Ended May 7, 2008

Summary

AT&T Inc. reported solid financial results for the first quarter ended March 31, 2008, demonstrating robust growth, particularly in its wireless segment. Total operating revenues increased by 6.1% year-over-year to $30.74 billion, driven by strong performance in wireless services and data revenues. The company saw a significant increase in operating income, up 28.2% to $5.98 billion, with an improved operating margin. This growth was fueled by the continued expansion of its wireless customer base, which reached 71.4 million, and a substantial rise in data ARPU, largely attributed to advanced handset usage. Despite a decline in traditional wireline voice revenues, the company's strategic focus on data services, including IP data and broadband, is showing positive traction. AT&T also made significant investments in the quarter, notably in spectrum licenses for future wireless services, highlighting its commitment to long-term growth. The company's financial position remains strong, although it has increased its debt ratio to fund strategic initiatives and capital expenditures.

Key Highlights

• 1Total operating revenues increased 6.1% to $30.74 billion, driven by wireless service and data growth.
• 2Operating income saw a substantial increase of 28.2% to $5.98 billion, with an improved operating margin of 19.5%.
• 3Wireless segment operating income surged 94.5% to $2.90 billion, with the wireless customer base growing to 71.4 million.
• 4Data revenues continue to be a key growth driver, with wireless data ARPU increasing by 37.1%.
• 5Capital expenditures increased significantly, notably for wireless network expansion and U-verse services deployment.
• 6The company spent $6.14 billion to acquire 700 MHz Band wireless spectrum licenses, signaling a strategic investment in future growth.
• 7Total debt increased, leading to a rise in the debt ratio to 39.6%, reflecting investments and share repurchases.

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