AT&T (T) 8-K Solid Earnings Per Share and Cash Flows, Strong Mobile Data Growth and Record U-verse Broadband Gains Highlight

Financial Data
AT&T Inc.
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Three Months Ended
		3/31/2013			3/31/2012			% Chg
Operating Revenues		$	31,356		$	31,822			-1.5	%
Operating Expenses
Cost of services and sales (exclusive of depreciation and      amortization shown separately below)			12,554			12,817			-2.1	%
Selling, general and administrative			8,333			8,344			-0.1	%
Depreciation and amortization			4,529			4,560			-0.7	%
Total Operating Expenses			25,416			25,721			-1.2	%
Operating Income			5,940			6,101			-2.6	%
Interest Expense			827			859			-3.7	%
Equity in Net Income of Affiliates			185			223			-17.0	%
Other Income (Expense) - Net			32			52			-38.5	%
Income Before Income Taxes			5,330			5,517			-3.4	%
Income Tax Expense			1,557			1,865			-16.5	%
Net Income			3,773			3,652			3.3	%
Less: Net Income Attributable to Noncontrolling Interest			(73	)		(68	)		-7.4	%
Net Income Attributable to AT&T		$	3,700		$	3,584			3.2	%
Basic Earnings Per Share Attributable to AT&T		$	0.67		$	0.60			11.7	%
Weighted Average Common      Shares Outstanding (000,000)			5,513			5,918			-6.8	%
Diluted Earnings Per Share Attributable to AT&T		$	0.67		$	0.60			11.7	%
Weighted Average Common      Shares Outstanding with Dilution (000,000)			5,530			5,940			-6.9	%

Financial Data
AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended
Wireless	3/31/2013			3/31/2012			% Chg
Segment Operating Revenues
Data	$	5,125		$	4,235			21.0	%
Voice, text and other service		9,937			10,331			-3.8	%
Equipment		1,629			1,570			3.8	%
Total Segment Operating Revenues		16,691			16,136			3.4	%
Segment Operating Expenses
Operations and support		10,180			9,978			2.0	%
Depreciation and amortization		1,835			1,666			10.1	%
Total Segment Operating Expenses		12,015			11,644			3.2	%
Segment Operating Income		4,676			4,492			4.1	%
Equity in Net Income (Loss) of Affiliates		(18	)		(13	)		-38.5	%
Segment Income	$	4,658		$	4,479			4.0	%
Segment Operating Income Margin		28.0	%		27.8	%
Wireline
Segment Operating Revenues
Data	$	8,162		$	7,800			4.6	%
Voice		5,306			5,892			-9.9	%
Other		1,187	��		1,237			-4.0	%
Total Segment Operating Revenues		14,655			14,929			-1.8	%
Segment Operating Expenses
Operations and support		10,335			10,402			-0.6	%
Depreciation and amortization		2,688			2,808			-4.3	%
Total Segment Operating Expenses		13,023			13,210			-1.4	%
Segment Operating Income		1,632			1,719			-5.1	%
Equity in Net Income of Affiliates		1			-			-
Segment Income	$	1,633		$	1,719			-5.0	%
Segment Operating Income Margin		11.1	%		11.5	%
Advertising Solutions
Segment Operating Revenues	$	-		$	744			-
Segment Operating Expenses
Operations and support		-			547			-
Depreciation and amortization		-			77			-
Total Segment Operating Expenses		-			624			-
Segment Income	$	-		$	120			-
Segment Income Margin		-			16.1	%
Other
Segment Operating Revenues	$	10		$	13			-23.1	%
Segment Operating Expenses		378			243			55.6	%
Segment Operating Income (Loss)		(368	)		(230	)		-60.0	%
Equity in Net Income of Affiliates		202			236			-14.4	%
Segment Income (Loss)	$	(166	)	$	6			-

Financial Data
AT&T Inc.
Consolidated Balance Sheets
Dollars in millions
	03/31/2013			12/31/2012
	Unaudited
Assets
Current Assets
Cash and cash equivalents	$	3,875		$	4,868
Accounts receivable - net of allowances for
doubtful accounts of $547 and $547		12,100			12,657
Prepaid expenses		1,021			1,035
Deferred income taxes		980			1,036
Other current assets		2,396			3,110
Total current assets		20,372			22,706
Property, Plant and Equipment - Net		109,702			109,767
Goodwill		69,772			69,773
Licenses		53,507			52,352
Customer Lists and Relationships - Net		1,190			1,391
Other Intangible Assets - Net		5,022			5,032
Investments in and Advances to Equity Affiliates		4,998			4,581
Other Assets		6,431			6,713
Total Assets	$	270,994		$	272,315
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	3,446		$	3,486
Accounts payable and accrued liabilities		17,523			20,494
Advanced billing and customer deposits		4,167			4,225
Accrued taxes		2,210			1,026
Dividends payable		2,440			2,556
Total current liabilities		29,786			31,787
Long-Term Debt		70,686			66,358
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		28,918			28,491
Postemployment benefit obligation		41,663			41,392
Other noncurrent liabilities		11,603			11,592
Total deferred credits and other noncurrent liabilities		82,184			81,475
Stockholders' Equity
Common stock		6,495			6,495
Additional paid-in capital		90,940			91,038
Retained earnings		23,787			22,481
Treasury stock		(38,568	)		(32,888	)
Accumulated other comprehensive income		5,344			5,236
Noncontrolling interest		340			333
Total stockholders' equity		88,338			92,695
Total Liabilities and Stockholders' Equity	$	270,994		$	272,315

Financial Data
AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions
Unaudited	Three Months Ended March 31,
	2013			2012
Operating Activities
Net income	$	3,773		$	3,652
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		4,529			4,560
Undistributed earnings from investments in equity affiliates		(185	)		(223	)
Provision for uncollectible accounts		262			328
Deferred income tax expense and noncurrent
unrecognized tax benefits		509			337
Net (gain) loss from sale of investments, net of impairments		(11	)		(9	)
Changes in operating assets and liabilities:
Accounts receivable		295			73
Other current assets		864			1,120
Accounts payable and accrued liabilities		(1,675	)		(1,655	)
Other - net		(162	)		(338	)
Total adjustments		4,426			4,193
Net Cash Provided by Operating Activities		8,199			7,845
Investing Activities
Construction and capital expenditures:
Capital expenditures		(4,252	)		(4,261	)
Interest during construction		(66	)		(65	)
Acquisitions, net of cash acquired		(1,045	)		(433	)
Dispositions		5			16
Sales (purchases) of securities, net		-			5
Other		1			1
Net Cash Used in Investing Activities		(5,357	)		(4,737	)
Financing Activities
Net change in short-term borrowings with
original maturities of three months or less		274			-
Issuance of other short-term borrowings		1,474			-
Issuance of long-term debt		4,875			2,986
Repayment of long-term debt		(1,791	)		(2,204	)
Purchase of treasury stock		(5,911	)		(2,066	)
Issuance of treasury stock		56			218
Dividends paid		(2,502	)		(2,606	)
Other		(310	)		(130	)
Net Cash Used in Financing Activities		(3,835	)		(3,802	)
Net decrease in cash and cash equivalents		(993	)		(694	)
Cash and cash equivalents beginning of year		4,868			3,045
Cash and Cash Equivalents End of Period	$	3,875		$	2,351

Financial Data
AT&T Inc.
Supplementary Operating and Financial Data
Dollars in millions except per share amounts, subscribers and connections in (000s)
Unaudited		Three Months Ended
		3/31/2013			3/31/2012			% Chg
Wireless
Volumes
	Total		107,251			103,940			3.2	%
	Postpaid		70,749			69,403			1.9	%
	Prepaid		7,104			7,368			-3.6	%
	Reseller		14,702			13,869			6.0	%
	Connected Devices		14,696			13,300			10.5	%
Wireless Net Adds
	Total		291			726			-59.9	%
	Postpaid		296			187			58.3	%
	Prepaid		(184	)		125			-
	Reseller		(252	)		184			-
	Connected Devices		431			230			87.4	%
	M&A Activity, Partitioned Customers and Other Adjs.		3			(33	)		-
Wireless Churn
	Postpaid Churn		1.04	%		1.10	%	-6 BP
	Total Churn		1.38	%		1.47	%	-9 BP
Other
	Licensed POPs (000,000)		317			313			1.3	%
Wireline
Voice
	Total Wireline Voice Connections1		31,163			35,206			-11.5	%
	Net Change		(1,021	)		(1,126	)		9.3	%
Broadband
	Total Wireline Broadband Connections		16,514			16,530			-0.1	%
	Net Change		124			103			20.4	%
Video
	Total U-verse Video Connections		4,768			3,991			19.5	%
	Net Change		232			200			16.0	%
Consumer Revenue Connections
	Broadband2		14,686			14,595			0.6	%
	U-verse Video Connections1		4,755			3,983			19.4	%
	Voice1,3		17,960			20,534			-12.5	%
Total Consumer Revenue Connections1			37,401			39,112			-4.4	%
	Net Change		(266	)		(394	)		32.5	%
AT&T Inc.
	Construction and capital expenditures
	Capital expenditures	$	4,252		$	4,261			-0.2	%
	Interest during construction	$	66		$	65			1.5	%
	Dividends Declared per Share	$	0.45		$	0.44			2.3	%
	End of Period Common Shares Outstanding (000,000)		5,423			5,875			-7.7	%
	Debt Ratio4		45.6	%		38.4	%	720 BP
	Total Employees		243,340			252,330			-3.6	%
1	Prior year amounts restated to conform to current period reporting methodology.
2	Consumer wireline broadband connections include DSL lines, U-verse High Speed Internet access and satellite broadband.
3	Includes consumer U-verse Voice over Internet Protocol connections of 3,120 as of March 31, 2013.
4	Total long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity.
	Note: For the end of 1Q13, total switched access lines were 28,043, retail business switched access lines totaled 11,185, and wholesale,
	national mass markets and coin switched access lines totaled 2,018. Restated switched access lines do not include ISDN lines.

Financial Data
AT&T Inc.
Non-GAAP Wireless Reconciliation
Wireless Segment EBITDA
Dollars in millions
Unaudited
	Three Months Ended
	3/31/12			6/30/12			9/30/12			12/31/12			3/31/13
Segment Operating Revenues
Data	$	4,235		$	4,471		$	4,686		$	4,905		$	5,125
Voice, text and other service		10,331			10,294			10,220			10,044			9,937
Equipment		1,570			1,588			1,726			2,693			1,629
Total Segment Operating Revenues		16,136			16,353			16,632			17,642			16,691
Segment Operating Expenses
Operations and support		9,978			9,590			10,432			13,296			10,180
Depreciation and amortization		1,666			1,696			1,730			1,781			1,835
Total Segment Operating Expenses		11,644			11,286			12,162			15,077			12,015
Segment Operating Income		4,492			5,067			4,470			2,565			4,676
Segment Operating Income Margin		27.8	%		31.0	%		26.9	%		14.5	%		28.0	%
Plus: Depreciation and amortization		1,666			1,696			1,730			1,781			1,835
EBITDA		6,158			6,763			6,200			4,346			6,511
EBITDA as a % of Service Revenues1		42.3	%		45.8	%		41.6	%		29.1	%		43.2	%
EBITDA is defined as Operating Income Before Depreciation and Amortization.
1 Service revenues is defined as Wireless data and voice, text and other service revenues.

Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliation
Adjusted Diluted EPS
Unaudited
	Three Months Ended
	March 31,
	2012			2013
Reported Diluted EPS	$	0.60		$	0.67
Adjustments:
Removal of Advertising Solutions		(0.01	)		-
Income Tax Settlement		-			(0.03	)
Adjusted Diluted EPS	$	0.59		$	0.64
Year-over-year growth - Adjusted					8.5	%
Weighted Average Common Shares Outstanding
with Dilution (000,000)		5,940			5,530
Adjusted diluted EPS is a non-GAAP financial measure calculated by excluding from operating revenues, operating expenses and equity in net income of affiliates certain significant items that are non-operational or non-recurring in nature, including dispositions. Management believes that this measure provides relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends. Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculation of Adjusted diluted EPS, as presented, may differ from similarly titled measures reported by other companies.

Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliation
Free Cash Flow
Dollars in Millions
Unaudited
	Three Months Ended
	March 31,
	2012			2013
Net cash provided by operating activities	$	7,845		$	8,199
Less: Construction and capital expenditures		(4,326	)		(4,318	)
Free Cash Flow	$	3,519		$	3,881
Free Cash Flow after Dividends
Dollars in Millions
Unaudited
	Three Months Ended
	March 31,
		2012			2013
Net cash provided by operating activities	$	7,845		$	8,199
Less: Construction and capital expenditures		(4,326	)		(4,318	)
Free Cash Flow		3,519			3,881
Less: Dividends paid		(2,606	)		(2,502	)
Free Cash Flow After Dividends	$	913		$	1,379
Free cash flow includes reimbursements of certain postretirement benefits paid. Free cash flow is defined as cash from operations minus construction and capital expenditures. Free cash flow after dividends is defined as cash from operations minus construction, capital expenditures and dividends. We believe these metrics provide useful information to our investors because management regularly reviews free cash flow as an important indicator of how much cash is generated by normal business operations, including capital expenditures, and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.

Financial Data
AT&T Inc.
Non-GAAP Consolidated Reconciliation
Annualized Net-Debt-to-EBITDA Ratio
Dollars in millions
Unaudited
	3/31/13		2013 YTD
Operating Revenues	$	31,356	$	31,356
Operating Expenses		25,416		25,416
Total Operating Income		5,940		5,940
Add Back Depreciation and Amortization		4,529		4,529
Total Consolidated EBITDA		10,469		10,469
Annualized Consolidated EBITDA*				41,876
End-of-period current debt				3,446
End-of-period long-term debt				70,686
Total End-of-Period Debt				74,132
Less Cash and Cash Equivalents				3,875
Net Debt Balance				70,257
Annualized Net-Debt-to-EBITDA Ratio				1.68
Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and management believes these measures provide relevant and useful information to investors and other users of our financial data. The Net Debt to EBITDA ratio is calculated by dividing the Net Debt by annualized EBITDA. Net Debt is calculated by subtracting cash and cash equivalents from the sum of debt maturing within one year and long-term debt. Annualized EBITDA is calculated by annualizing the year-to-date EBITDA.

Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliation
Adjusted Operating Revenues
Dollars in Millions
Unaudited
	Three Months Ended
	March 31,
	2012			2013
Reported Operating Revenues	$	31,822		$	31,356
Adjustments:
Removal of Advertising Solutions		(744	)		-
Adjusted Operating Revenues	$	31,078		$	31,356
Year-over-year growth - Adjusted					0.9	%
Adjusted Operating Revenues is a non-GAAP financial measure calculated by excluding from operating revenues significant items that are non-operational or non-recurring in nature, including dispositions. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends. Adjusted Operating Revenues should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculations of Adjusted Operating Revenues may differ from similarly titled measures reported by other companies.