AT&T’s Pension Funding Announcement

From Randall Stephenson, CEO

“AT&T continues to provide retirement benefits, including pensions, to our employees and retirees at a time when only about one-third of Fortune 500 companies provide ongoing pensions. As reported in our annual report, we ended 2011 with $10.2 billion more in pension liabilities than assets in our pension trust, which was largely due to the economic downturn.

To address this deficit, today we announced plans to voluntarily contribute to our pension trust a preferred equity interest in our growing wireless business, valued at $9.5 billion. While we estimate our required funding for 2013 would be only about $300 million, our Board of Directors, my leadership team and I agree it’s important that we continue to strengthen our pension fund to help ensure earned benefits will be there for our approximately 600,000 U.S. employees and retirees. This proposal requires approval by the U.S. Department of Labor.

This contribution will help us significantly improve the funding of our pension, enhancing its strength at a time when many companies have eliminated pensions. And funding the pension this way addresses our pension commitments while giving us the financial flexibility to continue to invest in our business and return value to our investors — including the hundreds of thousands of you who are also shareholders in our company.

I’m proud that we’ve found an innovative approach that will enhance the strength of the pension fund. It’s the right thing to do for our employees, our company and our investors.

Randall”