2011 Trends Trend: Businesses across many industries have started to embrace low-carbon solutions in their business models

and are increasingly turning to ICT solutions to help them address escalating costs of power consumption and address climate change. Support: y ICT-enabled solutions could cut annual CO2 emissions in the U.S. by up to 22% in 2020. This translates to gross energy and fuel savings of as much as $240 billion. (SMART 2020 U.S. Addendum) o ICT-enabled solutions could cut annual CO2 emissions in the U.S. by up to 22 percent in 2020. This translates to gross energy and fuel savings of as much as $240 billion. (SMART 2020) A 7 percent increase in broadband adoption could result in $6.4 billion per year in mileage savings from unnecessary driving and 3.2 billion fewer pounds of carbon emissions in the U.S. The equivalent to taking 273,858 cars off the road for a year. (Connected Nation) Widespread use of broadband has the potential to reduce carbon emissions by more than 1 billion metric tons. And thats equivalent to the annual CO2 emissions of 215 coal-fired power plants. (American Consumer Institute)

Trend: Smart Workplace enable remote work or telecommuting, whereby once-centralized information resources are virtualized through broadband connections and collaborative tools that can be accessed by employees without regard to their physical location. The result is a workplace environment that can reduce the need for commuting and unnecessary travel, with the potential to deliver an additive and cumulative reduction in CO2e emissions. Whats more, by space-sharing (part-time telecommuters) and space-shedding (full-time telecommuters), a business may also be able to reduce office space and associated heating, cooling and lighting requirements, thereby further reducing emissions and reducing costs. Support: y At the end of 2009, AT&T counted more than 10,000 approved telecommuters, who are delivering reductions in CO2-e emissions. The telecommuter population avoided 142 million commute miles per year, with annual fuel savings of approximately 7 million gallons and a net reduction in CO2-e emissions of 61,637 metric tons per year. y In addition, the company has enabled more than 130,000 employees with mobile and remote access technologies that allow them to telework from a variety of locations. In 2010, we hope to build on the current program and expand it to even more employees. In June 2010, AT&T opened our first-ever tPlace Flexible Workspace in Richardson, TX. This new workspace allows AT&T employees who primarily work from home access to an office environment. The workspace allows team members to collaborate when needed and take advantage of the latest office technology and high-tech tools without commuting long distances.

Trend: Use of travel substitution technology is on the rise, as companies look to trim travel costs and reduce environmental impact. Support: y In June 2010, AT&T and the Carbon Disclosure Project commissioned a study, "The Telepresence Revolution. According to the study, large U.S. and U.K. businesses that substitute some business travel with telepresence can cut CO2 emissions by nearly 5.5 million metric tons in total the

greenhouse gas equivalent of removing more than one million passenger vehicles from the road for one year and achieve total economy-wide financial benefits of almost $19 billion, by 2020. o Through our own use of telepresence from November 2009-10 alone, we realized almost $3 million in travel dollars saved and more than 1,800 metric tons of CO2 emissions avoided the equivalent of removing more than 340 passenger vehicles from the road for a year. y The study also found that a large company using telepresence can achieve a return on investment in as little as 15 months; reduce travel in the first year by nearly 900 flights; and, reduce greenhouse gas emissions by nearly 2,000 metric tonsthe equivalent of removing about 300 cars from the road for a year Trend: Related somewhat to the rise in telecommuting and Smart Workplaces, companies are doing more with less space. Support:  In 2009, we vacated 210 facilities or 2.8 million square feet of space, which will help us conserve 28 million kWh of electricity each year. This is equivalent to the electricity use of approximately 2,612 households.  We launched an Energy Scorecard to benchmark the energy performance at each of the 500 largest energy-consuming AT&T facilities. These facilities account for 50 percent of our total energy consumption. These initiatives not only lead to increased operational efficiencies, but also decrease our energy expenses. For the first time, were tying energy management performance to annual employee performance reviews for real estate managers.

Trend: Alternative fuel vehicles are becoming increasingly attractive to fleet operators sensitive to volatile fuel prices and the environmental impact of emissions. Support: o AT&T operates one of the nations largest commercial fleets. We have more than 75,900 vehicles and more than 21,000 wheeled equipment units, that include portable power units and utility trailers used for transporting supplies and equipment. We recognize the economic and environmental implications of maintaining a fleet that size which is why reducing fuel consumption and emissions are ongoing priorities for us.  Finding cleaner, more efficient methods of powering our fleet is one of the most important steps we can take to reduce our environmental impact. Thats why, in 2009, we made a commitment to spend about $565 million to deploy approximately 15,000 alternative-fuel vehicles (AFVs) through 2018. In July 2010, we rolled out the 2,000th alternative fuel vehicle and 1,500th compressed natural gas vehicle in our corporate fleet. By August 2010, we had more than 2,400 alternative-fuel vehicles on the road in 28 states. In addition, our first allelectric vehicle (AEV), the Smith Newton, hit the road in St. Louis. It was the first commercial all-electric truck to achieve new vehicle emissions certification in California. Weve announced plans to add more AEVs later this year.

Trend: Faced with the increasing cost of energy, businesses across a broad swath of industries are increasingly looking at ways to introduce low-carbon solutions into their business models, particularly

when the cost of mitigating carbon emissions can be turned into an opportunity for savings that can boost their bottom lines. Support: o According to a recent study by McKinsey, Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?, a $520 billion U.S. investment in energy efficiency could result in savings of up to $1.2 trillion by 2020, decreasing energy consumption by 23 percent and eliminating up to 1.1 billion tons of GHG annually. o This year AT&Ts goal is to identify $35 million in energy related savings across its real estate portfolio alone. The first step toward achieving this goal was the roll out of a comprehensive energy scorecard used to benchmark energy performance at each of AT&Ts 500 largest energy-consuming facilities, which account for 50% of the companys total energy consumption. Performance is being assessed and will be reported next year. o Also, in 2008, we used 654 kilowatt hours (kWh) per terabyte of data carried on our network. We set a goal for 2009 to reduce that intensity by 15 percent. In 2009, we achieved that goal, using 498 kWh per terabyte of data carried on our network, which was a 23.8 percent decrease from 2008. In 2010, we aspire to reduce the electricity consumption of our company relative to data growth on our network by 16 percent as compared with year 2009.