AT&T (T) 8-K AT&T Reports Solid Revenue Growth on Strong Wireless Gains Driven by Quality Network Performance and Continued U-verse Growth

Financial Data
AT&T Inc.
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Three Months Ended										Six Months Ended
		6/30/2013			6/30/2012			% Chg			6/30/2013			6/30/2012			% Chg
Operating Revenues		$	32,075		$	31,575			1.6	%	$	63,431		$	63,397			0.1	%
Operating Expenses
Cost of services and sales (exclusive of depreciation and      amortization shown separately below)			13,270			12,254			8.3	%		25,824			25,071			3.0	%
Selling, general and administrative			8,121			8,005			1.4	%		16,454			16,349			0.6	%
Depreciation and amortization			4,571			4,499			1.6	%		9,100			9,059			0.5	%
Total Operating Expenses			25,962			24,758			4.9	%		51,378			50,479			1.8	%
Operating Income			6,113			6,817			-10.3	%		12,053			12,918			-6.7	%
Interest Expense			825			941			-12.3	%		1,652			1,800			-8.2	%
Equity in Net Income of Affiliates			218			132			65.2	%		403			355			13.5	%
Other Income (Expense) - Net			288			23			-			320			75			-
Income Before Income Taxes			5,794			6,031			-3.9	%		11,124			11,548			-3.7	%
Income Tax Expense			1,914			2,066			-7.4	%		3,471			3,931			-11.7	%
Net Income			3,880			3,965			-2.1	%		7,653			7,617			0.5	%
Less: Net Income Attributable to Noncontrolling Interest			(58	)		(63	)		7.9	%		(131	)		(131	)		-
Net Income Attributable to AT&T		$	3,822		$	3,902			-2.1	%	$	7,522		$	7,486			0.5	%
Basic Earnings Per Share Attributable to AT&T		$	0.71		$	0.67			6.0	%	$	1.38		$	1.27			8.7	%
Weighted Average Common      Shares Outstanding (000,000)			5,381			5,855			-8.1	%		5,446			5,886			-7.5	%
Diluted Earnings Per Share Attributable to AT&T		$	0.71		$	0.66			7.6	%	$	1.38		$	1.27			8.7	%
Weighted Average Common      Shares Outstanding with Dilution (000,000)			5,397			5,876			-8.2	%		5,463			5,907			-7.5	%

Financial Data
AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended									Six Months Ended
Wireless	6/30/2013			6/30/2012			% Chg			6/30/2013			6/30/2012			% Chg
Segment Operating Revenues
Data	$	5,356		$	4,471			19.8	%	$	10,481		$	8,706			20.4	%
Voice, text and other service		10,014			10,294			-2.7	%		19,951			20,625			-3.3	%
Equipment		1,921			1,588			21.0	%		3,550			3,158			12.4	%
Total Segment Operating Revenues		17,291			16,353			5.7	%		33,982			32,489			4.6	%
Segment Operating Expenses
Operations and support		10,770			9,590			12.3	%		20,950			19,568			7.1	%
Depreciation and amortization		1,843			1,696			8.7	%		3,678			3,362			9.4	%
Total Segment Operating Expenses		12,613			11,286			11.8	%		24,628			22,930			7.4	%
Segment Operating Income		4,678			5,067			-7.7	%		9,354			9,559			-2.1	%
Equity in Net Income (Loss) of Affiliates		(19	)		(15	)		-26.7	%		(37	)		(28	)		-32.1	%
Segment Income	$	4,659		$	5,052			-7.8	%	$	9,317		$	9,531			-2.2	%
Segment Operating Income Margin		27.1	%		31.0	%					27.5	%		29.4	%
Wireline
Segment Operating Revenues
Data	$	8,400		$	7,935			5.9	%	$	16,562		$	15,735			5.3	%
Voice		5,141			5,696			-9.7	%		10,447			11,588			-9.8	%
Other		1,232			1,276			-3.4	%		2,419			2,513			-3.7	%
Total Segment Operating Revenues		14,773			14,907			-0.9	%		29,428			29,836			-1.4	%
Segment Operating Expenses
Operations and support		10,417			10,201			2.1	%		20,752			20,603			0.7	%
Depreciation and amortization		2,722			2,766			-1.6	%		5,410			5,574			-2.9	%
Total Segment Operating Expenses		13,139			12,967			1.3	%		26,162			26,177			-0.1	%
Segment Operating Income		1,634			1,940			-15.8	%		3,266			3,659			-10.7	%
Equity in Net Income (Loss) of Affiliates		-			(1	)		-			1			(1	)		-
Segment Income	$	1,634		$	1,939			-15.7	%	$	3,267		$	3,658			-10.7	%
Segment Operating Income Margin		11.1	%		13.0	%					11.1	%		12.3	%
Advertising Solutions
Segment Operating Revenues	$	-		$	305			-		$	-		$	1,049			-
Segment Operating Expenses
Operations and support		-			226			-			-			773			-
Depreciation and amortization		-			29			-			-			106			-
Total Segment Operating Expenses		-			255			-			-			879			-
Segment Income	$	-		$	50			-		$	-		$	170			-
Segment Income Margin		-			16.4	%					-			16.2	%
Other
Segment Operating Revenues	$	11		$	10			10.0	%	$	21		$	23			-8.7	%
Segment Operating Expenses		210			250			-16.0	%		588			493			19.3	%
Segment Operating Income (Loss)		(199	)		(240	)		17.1	%		(567	)		(470	)		-20.6	%
Equity in Net Income of Affiliates		237			148			60.1	%		439			384			14.3	%
Segment Income (Loss)	$	38		$	(92	)		-		$	(128	)	$	(86	)		-48.8	%

Financial Data
AT&T Inc.
Consolidated Balance Sheets
Dollars in millions
	6/30/13			12/31/12
	Unaudited
Assets
Current Assets
Cash and cash equivalents	$	4,548		$	4,868
Accounts receivable - net of allowances for doubtful accounts of $520 and $547		12,508			12,657
Prepaid expenses		1,038			1,035
Deferred income taxes		953			1,036
Other current assets		2,381			3,110
Total current assets		21,428			22,706
Property, Plant and Equipment - Net		110,734			109,767
Goodwill		69,770			69,773
Licenses		53,665			52,352
Customer Lists and Relationships - Net		1,015			1,391
Other Intangible Assets - Net		5,018			5,032
Investments in and Advances to Equity Affiliates		3,888			4,581
Other Assets		6,575			6,713
Total Assets	$	272,093		$	272,315
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	3,256		$	3,486
Accounts payable and accrued liabilities		19,438			20,494
Advanced billing and customer deposits		4,029			4,225
Accrued taxes		2,065			1,026
Dividends payable		2,401			2,556
Total current liabilities		31,189			31,787
Long-Term Debt		71,917			66,358
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		29,400			28,491
Postemployment benefit obligation		41,994			41,392
Other noncurrent liabilities		11,278			11,592
Total deferred credits and other noncurrent liabilities		82,672			81,475
Stockholders' Equity
Common stock		6,495			6,495
Additional paid-in capital		90,985			91,038
Retained earnings		25,212			22,481
Treasury stock		(41,819	)		(32,888	)
Accumulated other comprehensive income		5,107			5,236
Noncontrolling interest		335			333
Total stockholders' equity		86,315			92,695
Total Liabilities and Stockholders' Equity	$	272,093		$	272,315

Financial Data
AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions
Unaudited	Six Months Ended June 30,
	2013			2012
Operating Activities
Net income	$	7,653		$	7,617
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		9,100			9,059
Undistributed earnings from investments in equity affiliates		(198	)		(355	)
Provision for uncollectible accounts		439			572
Deferred income tax expense and noncurrent
unrecognized tax benefits		926			(639	)
Net (gain) loss from sale of investments, net of impairments		(260	)		2
Changes in operating assets and liabilities:
Accounts receivable		(290	)		(460	)
Other current assets		784			1,468
Accounts payable and accrued liabilities		(340	)		592
Other - net		(103	)		(531	)
Total adjustments		10,058			9,708
Net Cash Provided by Operating Activities		17,711			17,325
Investing Activities
Construction and capital expenditures:
Capital expenditures		(9,665	)		(8,742	)
Interest during construction		(140	)		(130	)
Acquisitions, net of cash acquired		(1,182	)		(477	)
Dispositions		825			800
Sales (purchases) of securities, net		-			124
Return of advances to and investments in equity affiliates		301			-
Other		(4	)		-
Net Cash Used in Investing Activities		(9,865	)		(8,425	)
Financing Activities
Issuance of other short-term borrowings		1,476			-
Repayment of other short-term borrowings		(233	)		-
Issuance of long-term debt		6,416			6,935
Repayment of long-term debt		(1,823	)		(7,035	)
Purchase of treasury stock		(9,217	)		(4,623	)
Issuance of treasury stock		104			376
Dividends paid		(4,930	)		(5,187	)
Other		41			(534	)
Net Cash Used in Financing Activities		(8,166	)		(10,068	)
Net decrease in cash and cash equivalents		(320	)		(1,168	)
Cash and cash equivalents beginning of year		4,868			3,045
Cash and Cash Equivalents End of Period	$	4,548		$	1,877

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									Six Months Ended
		6/30/2013			6/30/2012			% Chg			6/30/2013			6/30/2012			% Chg
Wireless
Subscribers and Connections
	Total											107,884			105,206			2.5	%
	Postpaid											71,278			69,666			2.3	%
	Prepaid											7,084			7,473			-5.2	%
	Reseller											14,330			14,382			-0.4	%
	Connected Devices											15,192			13,685			11.0	%
Wireless Net Adds
	Total		632			1,266			-50.1	%		923			1,992			-53.7	%
	Postpaid		551			320			72.2	%		847			507			67.1	%
	Prepaid		11			92			-88.0	%		(173	)		217			-
	Reseller		(414	)		472			-			(666	)		656			-
	Connected Devices		484			382			26.7	%		915			612			49.5	%
	M&A Activity, Partitioned Customers and Other Adjs.		1			-			-			4			(33	)		-
Wireless Churn
	Postpaid Churn		1.02	%		0.97	%	5 BP				1.03	%		1.03	%	0 BP
	Total Churn		1.36	%		1.18	%	18 BP				1.37	%		1.32	%	5 BP
Other
	Licensed POPs (000,000)											317			313			1.3	%
Wireline
Voice
	Total Wireline Voice Connections1											30,228			34,171			-11.5	%
	Net Change		(935	)		(1,035	)		9.7	%		(1,956	)		(2,161	)		9.5	%
Broadband
	Total Wireline Broadband Connections											16,453			16,434			0.1	%
	Net Change		(61	)		(96	)		36.5	%		63			7			-
Video
	Total U-verse Video Connections											5,001			4,146			20.6	%
	Net Change		233			155			50.3	%		465			355			31.0	%
Consumer Revenue Connections
	Broadband2											14,660			14,517			1.0	%
	U-verse Video Connections1											4,986			4,137			20.5	%
	Voice1,3											17,362			19,865			-12.6	%
Total Consumer Revenue Connections1												37,008			38,519			-3.9	%
	Net Change		(393	)		(593	)		33.7	%		(659	)		(987	)		33.2	%
AT&T Inc.
	Construction and capital expenditures
	Capital expenditures	$	5,413		$	4,481			20.8	%	$	9,665		$	8,742			10.6	%
	Interest during construction	$	74		$	65			13.8	%	$	140		$	130			7.7	%
	Dividends Declared per Share	$	0.45		$	0.44			2.3	%	$	0.90		$	0.88			2.3	%
	End of Period Common Shares Outstanding (000,000)											5,335			5,805			-8.1	%
	Debt Ratio4											46.6	%		38.4	%	820 BP
	Total Employees											245,350			242,380			1.2	%
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 3,379 as of June 30, 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 2Q13, total switched access lines were 26,849, retail business switched access lines totaled 10,905, and wholesale,
	national mass markets and coin switched access lines totaled 1,961. 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
	6/30/12			9/30/12			12/31/12			3/31/13			6/30/13
Segment Operating Revenues
Data	$	4,471		$	4,686		$	4,905		$	5,125		$	5,356
Voice, text and other service		10,294			10,220			10,044			9,937			10,014
Equipment		1,588			1,726			2,693			1,629			1,921
Total Segment Operating Revenues		16,353			16,632			17,642			16,691			17,291
Segment Operating Expenses
Operations and support		9,590			10,432			13,296			10,180			10,770
Depreciation and amortization		1,696			1,730			1,781			1,835			1,843
Total Segment Operating Expenses		11,286			12,162			15,077			12,015			12,613
Segment Operating Income		5,067			4,470			2,565			4,676			4,678
Segment Operating Income Margin		31.0	%		26.9	%		14.5	%		28.0	%		27.1	%
Plus: Depreciation and amortization		1,696			1,730			1,781			1,835			1,843
EBITDA	$	6,763		$	6,200		$	4,346		$	6,511		$	6,521
EBITDA as a % of Service Revenues		45.8	%		41.6	%		29.1	%		43.2	%		42.4	%
EBITDA is defined as Operating Income Before Depreciation and Amortization.

Financial Data
AT&T Inc.
Non-GAAP Consolidated Reconciliation
Adjusted Diluted EPS
AT&T Inc.
Unaudited
		Three Months Ended
		June 30,
		2012		2013
Reported Diluted EPS	$	0.66	$	0.71
Adjustments:
America Movil - Gain from sale of shares		-		(0.04)
Adjusted Diluted EPS	$	0.66	$	0.67
Year-over-year growth - Adjusted				1.5	%
Weighted Average Common Shares Outstanding
with Dilution (000,000)		5,876		5,397
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 Consolidated Reconciliation
Free Cash Flow
Dollars in millions
Unaudited
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2013			2012			2013
Net cash provided by operating activities	$	9,480		$	9,512		$	17,325		$	17,711
Less: Construction and capital expenditures		(4,546	)		(5,487	)		(8,872	)		(9,805	)
Free Cash Flow	$	4,934		$	4,025		$	8,453		$	7,906
Free Cash Flow after Dividends
Dollars in millions
Unaudited
	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2012			2013			2012			2013
Net cash provided by operating activities	$	9,480		$	9,512		$	17,325		$	17,711
Less: Construction and capital expenditures		(4,546	)		(5,487	)		(8,872	)		(9,805	)
Free Cash Flow		4,934			4,025			8,453			7,906
Less: Dividends paid		(2,581	)		(2,428	)		(5,187	)		(4,930	)
Free Cash Flow After Dividends	$	2,353		$	1,597		$	3,266		$	2,976
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
	Three Months Ended
	3/31/2013		6/30/13		2013 YTD
Operating Revenues	$	31,356	$	32,075	$	63,431
Operating Expenses		25,416		25,962		51,378
Total Operating Income		5,940		6,113		12,053
Add Back Depreciation and Amortization		4,529		4,571		9,100
Total Consolidated EBITDA		10,469		10,684		21,153
Annualized Consolidated EBITDA1						42,306
End-of-period current debt						3,256
End-of-period long-term debt						71,917
Total End-of-Period Debt						75,173
Less Cash and Cash Equivalents						4,548
Net Debt Balance						70,625
Annualized Net-Debt-to-EBITDA Ratio						1.67
Net-Debt-to-EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies. Management believes these measures provide relevant and useful information to investors and other users of our financial data. Net Debt is calculated by subtracting cash and cash equivalents from the sum of debt maturing within one year and long-term debt. The Net-Debt-to-EBITDA ratio is calculated by dividing the Net Debt by annualized EBITDA.
1Annualized 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						Six Months Ended
	June 30,						June 30,
	2012			2013			2012			2013
Reported Operating Revenues	$	31,575		$	32,075		$	63,397		$	63,431
Adjustments:
Removal of Advertising Solutions		(305	)		-			(1,049	)		-
Adjusted Operating Revenues	$	31,270		$	32,075		$	62,348		$	63,431
Year-over-year growth - Adjusted					2.6	%					1.7	%
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.