Company AnalysisPresented By: Blake Vaughn

AT&T Overview

• Products/Services:

• Wireless/Wireline/U-verse/Consulting

• Size: 281,000 Employees

• Founding: The company was formerly known as SBC Communications Inc. and changed its name to AT&T Inc. in November 2005 as a result of merger with AT&T Corp. The company was founded in 1983 and is based in Dallas, Texas.

• Leadership: Randall L. Stephenson, Chairman & CEO

• Financials: $123.28B Revenue which produced a $72.61B Gross Profit

Key Facts

• The nation's fastest 3G network serving 85.1 million customers

• Offers the most phones that work in the most countries.

• The U.S. wireless carrier for the iPhone 4, which launched in June 2010 and revolutionized the industry.

• The only U.S. national service provider to offer a 100% IP-based television service with U-verse TV.

• The nation's largest provider of broadband — more than 17.5 million high speed Internet subscribers.

• The nation's largest Wi-Fi provider, now offering customers access at more than 125,000 hot spots spanning countries around the world— with the addition of approximately 7,000 Starbucks locations.

• The nation's largest directory publisher, delivering print directories to 173 million.

AT&T 2Q10 Highlights

• Strong Wireless Growth:

• 10.3% service revenue growth, 3.4% postpaid ARPU growth

• 1.6 million organic net adds with best-ever churn levels •

• Wireless operating income up 25%

• Consumer Trends Improving:

• Revenue flat year over year, second quarter of sequential improvement.

• 32.0% growth in consumer IP-based revenues, driven by 209,000. U-verse TV net adds to reach 2.5 million in service

• Further Signs of Stabilization in Business Markets:

• 15.8% growth in strategic business services revenues.

• Third consecutive quarter of year-over-year improvement in business revenue trends

• Strong Margins, Continued Solid Cash Flow:

• Consolidated margins up year over year

• Free cash flow of $7.6 billion in 1H10

Simplified Turbulence Study

• Environmental Turbulence

• Marketing Turbulence (5)

• Innovation Turbulence (5)

• AT&T Strategy

• AT&T Organization

Marketing TurbulenceResult: 4.75

• Sales Aggresiveness (5)

• Responsiveness to Competition (5)

• Promotion/Advertising (5)

• Market Share (4)

Innovation TurbulenceResult: 4.8

• Frequency of New Products (5)

• Length of Product Life Cycle (4)

• Number of Competing Technologies (5)

• Rate of Technological Change (5)

• Product Performance Differentiation (5)

• Critical Innovation Success Factors (5)

Firm StrategyEnvironmental Turbulence:

4.8

• Marketing Aggressiveness (5)

• Gap: Maximum Profit Profile

• Innovation Aggressiveness (5)

• Gap: Maximum Profit Profile

• Product Portfolio (5)

• Gap: Maximum Profit Profile

• Technology Applications (4)

• Gap: -.8 Gap = Maximum Profit Profile

Firm OrganizationEnvironmental Turbulence:

4.8

• CEO Attributes (3)• Gap: -1.8 Gap = Critical Profit Impact

• Culture (4)• Gap: -.8 Gap = Marginal Profit

Impact

• Structure (5)• Gap: Maximum Profit Profile

Firm Organization Environmental Turbulence:

4.8

• Internal Technology Application (5)• Gap: Maximum Profit Profile

• Strategic Planning (5)• Gap: Maximum Profit Profile

Company AnalysisPresented By: Blake Vaughn