Annual Incentive Reward Results

February 4, 2009

 To: Michael J. Fahrenholt Assistant to the Vice President Communications Workers of America – District 3 3516 Covington Highway Decatur, Georgia 30032

 Re: 2008 Annual Incentive Award Results

 Despite all business units falling well short of their specific bonus targets, the Board of Directors recognized the employees' accomplishments in advancing AT&T's market position, in enhancing our network capabilities, and managing through a challenging 2008.

 As a result, the Board approved bonus payouts based on each business unit's overall achievements. The results are:

 Consumer Markets 45%

 Corporate 45%

 Local Network Services 45%

 Operations Support 45%

 Regional Business Markets 45%

 Regional Wireline 45%

 Enterprise Business Services 71%

 Global Business Services 76%

 Wholesale 82%

 Customer Information Services 82%

Also, if you have not received the results from Advertising & Publishing Labor Relations, the Advertising & Publishing business unit result is 58%.

The payment will be made in accordance with the individual working agreements. Direct  deposits will be made:

 Pay Group                           Pay Day

 A1                                       March 6

 B1                                       March 13

 Checks for the award will be mailed on March 11 from St Louis to the work place where required by the working agreement.

The 2008/2009 match rates for the represented Savings and Security Plan (SSP; 401(k) savings plan) will be released shortly.

 The 2009 interest crediting rate for the cash balance accounts under the BellSouth Pension Plan (BSPP) for represented employees is 4%. Please let me know if there are any questions.

Sincerely, CC: Judith R. Dennis