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| Pro Forma Financial Information |
Supplemental Unaudited Quarterly Pro Forma Financial Information1 |
| Dollars in millions | | | | | | | | | | |
| Unaudited | | | | | | | | | | |
| | | | | | | | | | |
| Operating Revenues | 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | 2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | 2021 |
| Reported AT&T Operating Revenues | $ | 42,779 | | $ | 40,950 | | $ | 42,340 | | $ | 45,691 | | $ | 171,760 | | $ | 43,939 | | $ | 44,045 | | $ | 39,922 | | $ | 40,958 | | $ | 168,864 | |
| Less: WarnerMedia (A1) | (7,765) | | (6,728) | | (7,395) | | (8,554) | | (30,442) | | (8,526) | | (8,791) | | (8,442) | | (9,873) | | (35,632) | |
| Less: Vrio (A2) | (887) | | (752) | | (753) | | (762) | | (3,154) | | (743) | | (749) | | (756) | | (359) | | (2,607) | |
| Less: Other dispositions and adjustments (A3) | (383) | | (392) | | (441) | | (280) | | (1,496) | | (262) | | (193) | | (105) | | (29) | | (589) | |
| Less: Video (A4) | (7,407) | | (7,021) | | (7,014) | | (7,168) | | (28,610) | | (6,725) | | (6,639) | | (2,149) | | — | | (15,513) | |
| Less: Intercompany eliminations (B1) | 1,296 | | 1,125 | | 1,288 | | 1,471 | | 5,180 | | 1,290 | | 1,311 | | 645 | | 383 | | 3,629 | |
| Pro Forma Operating Revenues | $ | 27,633 | | $ | 27,182 | | $ | 28,025 | | $ | 30,398 | | $ | 113,238 | | $ | 28,973 | | $ | 28,984 | | $ | 29,115 | | $ | 31,080 | | $ | 118,152 | |
| Reported Revenue Growth Rate Y/Y | | | | | | 2.7 | % | 7.6 | % | (5.7) | % | (10.4) | % | (1.7) | % |
| Pro Forma Revenue Growth Rate Y/Y | | | | | | 4.8 | % | 6.6 | % | 3.9 | % | 2.2 | % | 4.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operations and Support Expenses | 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | 2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | 2021 |
Reported AT&T Operations and
Support Expenses | $ | 28,071 | | $ | 30,133 | | $ | 29,178 | | $ | 49,457 | | $ | 136,839 | | $ | 30,469 | | $ | 35,015 | | $ | 27,194 | | $ | 29,977 | | $ | 122,655 | |
| Adjustments (C1) | 476 | | (3,295) | | (151) | | (16,655) | | (19,625) | | (94) | | (4,555) | | (291) | | (320) | | (5,260) | |
Adjusted AT&T Operations and
Support Expenses | 28,547 | | 26,838 | | 29,027 | | 32,802 | | 117,214 | | 30,375 | | 30,460 | | 26,903 | | 29,657 | | 117,395 | |
| Less: WarnerMedia (A1) | (5,605) | | (4,656) | | (5,483) | | (5,835) | | (21,579) | | (6,403) | | (6,934) | | (6,271) | | (8,129) | | (27,737) | |
| Less: Vrio (A2) | (783) | | (661) | | (675) | | (681) | | (2,800) | | (661) | | (660) | | (660) | | (321) | | (2,302) | |
| Less: Other dispositions and adjustments (A3) | (261) | | (210) | | (323) | | (214) | | (1,008) | | (253) | | (171) | | (82) | | (38) | | (544) | |
| Less: Video (A4) | (6,020) | | (5,809) | | (5,887) | | (6,458) | | (24,174) | | (5,660) | | (5,275) | | (1,731) | | — | | (12,666) | |
| Less: Intercompany eliminations (B1) | 922 | | 869 | | 918 | | 906 | | 3,615 | | 941 | | 939 | | 546 | | 383 | | 2,809 | |
Add: Retained costs and other items
affecting comparability (A5) | 350 | | 350 | | 350 | | 350 | | 1,400 | | 383 | | 421 | | 121 | | 19 | | 944 | |
Pro Forma Adjusted Operations and
Support Expenses | $ | 17,150 | | $ | 16,721 | | $ | 17,927 | | $ | 20,870 | | $ | 72,668 | | $ | 18,722 | | $ | 18,780 | | $ | 18,826 | | $ | 21,571 | | $ | 77,899 | |
| Reported Operations and Support Expense Growth Rate Y/Y | | | 8.5 | % | 16.2 | % | (6.8) | % | (39.4) | % | (10.4) | % |
| Adjusted Operations and Support Expense Growth Rate Y/Y | | 6.4 | % | 13.5 | % | (7.3) | % | (9.6) | % | 0.2 | % |
| Pro Forma Adjusted Operations and Support Expense Growth Rate Y/Y | | 9.2 | % | 12.3 | % | 5.0 | % | 3.4 | % | 7.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Depreciation and Amortization Expense | 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | 2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | 2021 |
Reported AT&T Depreciation and
Amortization Expense | $ | 7,222 | | $ | 7,285 | | $ | 7,030 | | $ | 6,979 | | $ | 28,516 | | $ | 5,809 | | $ | 5,761 | | $ | 5,619 | | $ | 5,673 | | $ | 22,862 | |
| Adjustments (C1) | (2,056) | | (2,145) | | (1,921) | | (1,904) | | (8,026) | | (1,131) | | (1,069) | | (1,012) | | (1,021) | | (4,233) | |
Adjusted Depreciation and
Amortization Expense | 5,166 | | 5,140 | | 5,109 | | 5,075 | | 20,490 | | 4,678 | | 4,692 | | 4,607 | | 4,652 | | 18,629 | |
| Less: WarnerMedia (A1) | (161) | | (164) | | (169) | | (177) | | (671) | | (163) | | (165) | | (163) | | (165) | | (656) | |
| Less: Vrio (A2) | (147) | | (127) | | (126) | | (120) | | (520) | | (117) | | (114) | | — | | — | | (231) | |
| Less: Other dispositions and adjustments (A3) | (73) | | (81) | | (51) | | (40) | | (245) | | (20) | | (15) | | (19) | | (19) | | (73) | |
| Less: Video (A4) | (591) | | (593) | | (557) | | (521) | | (2,262) | | (164) | | (148) | | (44) | | — | | (356) | |
| Less: Intercompany eliminations (B1) | — | | — | | — | | — | | — | | — | | — | | — | | — | | — | |
Add: Retained costs and other items
affecting comparability (A5) | 180 | | 180 | | 180 | | 180 | | 720 | | 180 | | 180 | | 60 | | — | | 420 | |
Pro Forma Adjusted Depreciation and
Amortization Expense | $ | 4,374 | | $ | 4,355 | | $ | 4,386 | | $ | 4,397 | | $ | 17,512 | | $ | 4,394 | | $ | 4,430 | | $ | 4,441 | | $ | 4,468 | | $ | 17,733 | |
| Reported Depreciation and Amortization Expense Growth Rate Y/Y | (19.6) | % | (20.9) | % | (20.1) | % | (18.7) | % | (19.8) | % |
| Adjusted Depreciation and Amortization Expense Growth Rate Y/Y | (9.4) | % | (8.7) | % | (9.8) | % | (8.3) | % | (9.1) | % |
| Pro Forma Adjusted Depreciation and Amortization Expense Growth Rate Y/Y | 0.5 | % | 1.7 | % | 1.3 | % | 1.6 | % | 1.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | 2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | 2021 |
| Reported AT&T Operating Income | $ | 7,486 | | $ | 3,532 | | $ | 6,132 | | $ | (10,745) | | $ | 6,405 | | $ | 7,661 | | $ | 3,269 | | $ | 7,109 | | $ | 5,308 | | $ | 23,347 | |
| Adjustments (C1) | 1,580 | | 5,440 | | 2,072 | | 18,559 | | 27,651 | | 1,225 | | 5,624 | | 1,303 | | 1,341 | | 9,493 | |
| Adjusted Operating Income | 9,066 | | 8,972 | | 8,204 | | 7,814 | | 34,056 | | 8,886 | | 8,893 | | 8,412 | | 6,649 | | 32,840 | |
| Less: WarnerMedia (A1) | (1,999) | | (1,908) | | (1,743) | | (2,542) | | (8,192) | | (1,960) | | (1,692) | | (2,008) | | (1,579) | | (7,239) | |
| Less: Vrio (A2) | 43 | | 36 | | 48 | | 39 | | 166 | | 35 | | 25 | | (96) | | (38) | | (74) | |
| Less: Other dispositions and adjustments (A3) | (49) | | (101) | | (67) | | (26) | | (243) | | 11 | | (7) | | (4) | | 28 | | 28 | |
| Less: Video (A4) | (796) | | (619) | | (570) | | (189) | | (2,174) | | (901) | | (1,216) | | (374) | | — | | (2,491) | |
| Less: Intercompany eliminations (B1) | 374 | | 256 | | 370 | | 565 | | 1,565 | | 349 | | 372 | | 99 | | — | | 820 | |
Add: Retained costs and other items
affecting comparability (A5) | (530) | | (530) | | (530) | | (530) | | (2,120) | | (563) | | (601) | | (181) | | (19) | | (1,364) | |
| Pro Forma Adjusted Operating Income | $ | 6,109 | | $ | 6,106 | | $ | 5,712 | | $ | 5,131 | | $ | 23,058 | | $ | 5,857 | | $ | 5,774 | | $ | 5,848 | | $ | 5,041 | | $ | 22,520 | |
| Reported Operating Income Growth Rate Y/Y | | | | | | 2.3 | % | (7.4) | % | 15.9 | % | 149.4 | % | 264.5 | % |
| Adjusted Operating Income Growth Rate Y/Y | | | | | | (2.0) | % | (0.9) | % | 2.5 | % | (14.9) | % | (3.6) | % |
Pro Forma Adjusted Operating Income
Growth Rate Y/Y | | | | | | (4.1) | % | (5.4) | % | 2.4 | % | (1.8) | % | (2.3) | % |
| Reported Operating Income Margin | 17.5 | % | 8.6 | % | 14.5 | % | (23.5) | % | 3.7 | % | 17.4 | % | 7.4 | % | 17.8 | % | 13.0 | % | 13.8 | % |
| Adjusted Operating Income Margin | 21.2 | % | 21.9 | % | 19.4 | % | 17.1 | % | 19.8 | % | 20.2 | % | 20.2 | % | 21.1 | % | 16.2 | % | 19.4 | % |
| Pro Forma Adjusted Operating Income Margin | 22.1 | % | 22.5 | % | 20.4 | % | 16.9 | % | 20.4 | % | 20.2 | % | 19.9 | % | 20.1 | % | 16.2 | % | 19.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EBITDA2 | 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | 2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | 2021 |
| Reported AT&T Net Income | $ | 4,963 | | $ | 1,563 | | $ | 3,168 | | $ | (13,515) | | $ | (3,821) | | $ | 7,942 | | $ | 1,874 | | $ | 6,273 | | $ | 5,390 | | $ | 21,479 | |
| Additions: | | | | | | | | | | |
| Income Tax Expense (Benefit) | 1,302 | | 935 | | 766 | | (2,038) | | 965 | | 2,122 | | 751 | | 1,539 | | 1,056 | | 5,468 | |
| Interest Expense | 2,018 | | 2,041 | | 1,972 | | 1,894 | | 7,925 | | 1,870 | | 1,684 | | 1,667 | | 1,663 | | 6,884 | |
| Equity in Net Income (Loss) of Affiliates | 6 | | 10 | | (5) | | (106) | | (95) | | (52) | | (41) | | (91) | | (447) | | (631) | |
| Other (Income) Expense - net | (803) | | (1,017) | | 231 | | 3,020 | | 1,431 | | (4,221) | | (999) | | (2,279) | | (2,354) | | (9,853) | |
| Depreciation and amortization | 7,222 | | 7,285 | | 7,030 | | 6,979 | | 28,516 | | 5,809 | | 5,761 | | 5,619 | | 5,673 | | 22,862 | |
| EBITDA | 14,708 | | 10,817 | | 13,162 | | (3,766) | | 34,921 | | 13,470 | | 9,030 | | 12,728 | | 10,981 | | 46,209 | |
| Adjustments (C1) | (476) | | 3,295 | | 151 | | 16,655 | | 19,625 | | 94 | | 4,555 | | 291 | | 320 | | 5,260 | |
| Adjusted EBITDA | 14,232 | | 14,112 | | 13,313 | | 12,889 | | 54,546 | | 13,564 | | 13,585 | | 13,019 | | 11,301 | | 51,469 | |
| Less: WarnerMedia (A1) | (2,160) | | (2,072) | | (1,912) | | (2,719) | | (8,863) | | (2,123) | | (1,857) | | (2,171) | | (1,744) | | (7,895) | |
| Less: Vrio (A2) | (104) | | (91) | | (78) | | (81) | | (354) | | (82) | | (89) | | (96) | | (38) | | (305) | |
| Less: Other dispositions and adjustments (A3) | (122) | | (182) | | (118) | | (66) | | (488) | | (9) | | (22) | | (23) | | 9 | | (45) | |
| Less: Video (A4) | (1,387) | | (1,212) | | (1,127) | | (710) | | (4,436) | | (1,065) | | (1,364) | | (418) | | — | | (2,847) | |
| Less: Intercompany eliminations (B1) | 374 | | 256 | | 370 | | 565 | | 1,565 | | 349 | | 372 | | 99 | | — | | 820 | |
Add: Retained costs and other items affecting comparability (A5)3 | (350) | | (350) | | (350) | | (350) | | (1,400) | | (383) | | (421) | | (121) | | (19) | | (944) | |
Pro Forma Adjusted EBITDA3 | $ | 10,483 | | $ | 10,461 | | $ | 10,098 | | $ | 9,528 | | $ | 40,570 | | $ | 10,251 | | $ | 10,204 | | $ | 10,289 | | $ | 9,509 | | $ | 40,253 | |
| Adjusted EBITDA Growth Rate Y/Y | | | | | | (4.7) | % | (3.7) | % | (2.2) | % | (12.3) | % | (5.6) | % |
| Pro Forma Adjusted EBITDA Growth Rate Y/Y | | | | | | (2.2) | % | (2.5) | % | 1.9 | % | (0.2) | % | (0.8) | % |
| Adjusted EBITDA Margin | 33.3 | % | 34.5 | % | 31.4 | % | 28.2 | % | 31.8 | % | 30.9 | % | 30.8 | % | 32.6 | % | 27.6 | % | 30.5 | % |
| Pro Forma Adjusted EBITDA Margin | 37.9 | % | 38.5 | % | 36.0 | % | 31.3 | % | 35.8 | % | 35.4 | % | 35.2 | % | 35.3 | % | 30.6 | % | 34.1 | % |
| | | | | | | | | | |
1 This pro forma information does not include the impacts of accounting for the NFL Sunday Ticket, per the Contribution Agreement. WarnerMedia retained costs are not expected to be significant. |
2 EBITDA is operating income before depreciation and amortization. It excludes depreciation and amortization, interest expense, other income (expense) - net and income taxes from net income. |
3 Pro forma adjusted EBITDA and pro forma adjusted net income definitions have been updated to exclude mark-to-market adjustments on benefit-related investments in 2021. Benefit-related investment gains included in EBITDA were ~$30M, $70M, $5M and $20M in the first, second, third and fourth quarters of 2021. Total benefit-related gains (losses) in net income were ~$90M, $170M, $0M and $170M in first, second, third and fourth quarters of 2021. |
| | | | | | | | |
| Pro Forma Financial Information | | |
| Reconciliation of Adjusted EPS | |
| Dollars in millions, except per share amounts | | |
| Unaudited | | |
| | |
| 2020 | 2021 |
| AT&T Income Attributable to Common Stock | $ | (5,369) | | $ | 19,874 | |
| Adjustments to Net Income (C1) | 28,210 | | 4,588 | |
| AT&T Adjusted Income Attributable to Common Stock | $ | 22,841 | | $ | 24,462 | |
| Pro Forma adjustments to Operating Income: | | |
| Less: WarnerMedia (A1) | (8,192) | | (7,239) | |
| Less: Vrio (A2) | 166 | | (74) | |
| Less: Other dispositions and adjustments (A3) | (243) | | 28 | |
| Less: Video (A4) | (2,174) | | (2,491) | |
| Less: Intercompany eliminations (B1) | 1,565 | | 820 | |
Add: Retained costs and other items affecting comparability (A5)3 | (2,120) | | (1,364) | |
| Pro Forma adjustments to other income (expense): | | |
| Less: WarnerMedia equity method investments (A1) | (18) | | (38) | |
| Less: Vrio equity method investments (A2) | (12) | | (11) | |
| Add: Estimated equity in net income from DIRECTV (A4b) | 3,105 | | 1,993 | |
Add: Other items affecting comparability (A5)3 | (17) | | (426) | |
| Income tax on pro forma adjustments (A6) | 1,556 | | 1,760 | |
Pro Forma Adjusted Income Attributable to Common Stock3 | $ | 16,457 | | $ | 17,420 | |
| | |
| AT&T Diluted EPS | $ | (0.75) | | $ | 2.76 | |
| AT&T Adjusted EPS | $ | 3.18 | | $ | 3.40 | |
| Pro Forma Adjusted Diluted EPS | $ | 2.29 | | $ | 2.41 | |
| | |
| Weighted Average Common Shares Outstanding | | |
| with Dilutions (000,000) | 7,183 | | 7,199 | |
3 Pro forma adjusted EBITDA and pro forma adjusted net income definitions have been updated to exclude mark-to-market adjustments on benefit-related investments in 2021. Benefit-related investment gains (included in EBITDA and other income (expense) were ~$430M for the year ended December 31, 2021.
| | | | | | | | |
| Pro Forma Financial Information | | |
| Reconciliation of Free Cash Flow | |
| Dollars in millions | | |
| Unaudited | | |
| | |
| Cash From Operations | 2020 | 2021 |
| Reported AT&T Cash from Operations | $ | 43,130 | | $ | 41,957 | |
| Less: WarnerMedia | (4,836) | | (3,592) | |
| Less: Xandr | 365 | | (79) | |
| Less: Vrio | (354) | | (305) | |
| Pro Forma Cash from Operations | $ | 38,305 | | $ | 37,981 | |
| | |
| Capital Expenditures | 2020 | 2021 |
| Reported AT&T Capital Expenditures | $ | 15,675 | | $ | 16,527 | |
| Less: WarnerMedia (A1) | (699) | | (764) | |
| Less: Vrio (A2) | (366) | | (261) | |
| Pro Forma Capital Expenditures | $ | 14,610 | | $ | 15,502 | |
| | |
Free Cash Flow4 | 2020 | 2021 |
| AT&T Cash from Operations | $ | 43,130 | | $ | 41,957 | |
| Add: Distributions from DIRECTV classified as investing | — | | 1,323 | |
| Less: AT&T Capital Expenditures | (15,675) | | (16,527) | |
| Less: Cash paid for vendor financing | (2,966) | | (4,596) | |
| AT&T Free Cash Flow | $ | 24,489 | | $ | 22,157 | |
| | |
| Pro Forma Cash from Operations | $ | 38,305 | | $ | 37,981 | |
| Add: Distributions from DIRECTV classified as investing | — | | 1,323 | |
| Less: Pro Forma Capital Expenditures | (14,610) | | (15,502) | |
| Less: Cash paid for vendor financing | (2,966) | | (4,596) | |
| Pro Forma Free Cash Flow | $ | 20,729 | | $ | 19,206 | |
| | | | | | | | |
Pro Forma Gross Capital Investment5 | 2020 | 2021 |
| Pro Forma Capital Expenditures | $ | 14,610 | | $ | 15,502 | |
| Cash paid for vendor financing | 2,966 | | 4,596 | |
| Cash paid for Capital Investment | 17,576 | | 20,098 | |
| FirstNet reimbursement | 1,063 | | 515 | |
| Pro Forma Gross Capital Investment | $ | 18,639 | | $ | 20,613 | |
| | |
4 Free cash flow is defined as cash from operations and cash distributions from DIRECTV (classified as investing activities) minus capital expenditures and cash paid for vendor financing (classified as financing activities). |
5 Gross capital investment includes capital expenditures and cash payments for vendor financing and excludes FIrstNet reimbursements. |
NOTES
| | | | | |
| (A1) | WarnerMedia segment results as reported in AT&T's consolidated financial statements, including Otter, Xandr and Playdemic. |
| (A2) | Vrio business unit results within the Latin America segment as reported in AT&T's consolidated statements. AT&T retained the investment in Sky Mexico. |
| (A3) | Other dispositions (Crunchyroll, Government Solutions and operations in Puerto Rico) and adjustments (i.e., purchase accounting reclassification of released content amortization and receivable securitization fees) reported in Corporate in AT&T's consolidated financial statements. |
| (A4) | Video business results as reported in AT&T's consolidated financial results; quarters ended 2021 include retained depreciation on assets supporting U-verse products. |
| (A4b) | Estimated equity in net income of affiliates from DIRECTV. Calculated at 70% of Video EBITDA, which excludes the noncash depreciation and amortization of fair value accretion expected to result from DIRECTV’s revaluation of assets and purchase price allocation. |
| (A5) | After the DIRECTV transaction, we expect to retain incurred operations and support costs in the range of ~$500M per quarter and depreciation of network infrastructure that provides both U-verse video and broadband services to customers of ~$150M per quarter, of which approximately 60% will be received from DIRECTV through transition service agreements and commercial arrangements. These estimated net retained costs have been applied to prior periods for comparability.
In addition to these retained Video costs, this adjustment also includes certain items affecting comparability, which have been applied to present consistent trending in this pro forma financial information, even though those items may not have been adjusted for in AT&T's earnings materials: benefit-related mark-to-market gains of ~$430M (with ~$130M included in Operations and Support Expenses) in 2021, and gains on other cost investments of ~$100M in 2021. |
| (A6) | Estimated tax impact of pro forma and other adjustments at AT&T's adjusted effective tax rate of 20.0% for the year ended December 31, 2021, and 19.6% for the year ended December 31, 2020. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(B1) Under GAAP, AT&T removed transactions involving dealing between segments, including channel distribution of WarnerMedia content, and advertising arrangements. |
| | | | | | | | | | |
| 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | 2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | 2021 |
| Intercompany Eliminations as reported by AT&T: | | | | | | | | | | |
DTC (HBO Max) sales to Mobility &
Consumer Wireline | $ | — | | $ | (61) | | $ | (190) | | $ | (217) | | $ | (468) | | $ | (235) | | $ | (253) | | $ | (261) | | $ | (302) | | $ | (1,051) | |
WarnerMedia video distribution sales
to DIRECTV and Vrio | (794) | | (704) | | (600) | | (544) | | (2,642) | | (585) | | (570) | | (226) | | (31) | | (1,412) | |
WarnerMedia sales of DIRECTV
advertising inventory | (413) | | (294) | | (408) | | (603) | | (1,718) | | (388) | | (410) | | (111) | | — | | (909) | |
| Other | (89) | | (66) | | (90) | | (107) | | (352) | | (82) | | (78) | | (47) | | (50) | | (257) | |
| Revenue Eliminations | (1,296) | | (1,125) | | (1,288) | | (1,471) | | (5,180) | | (1,290) | | (1,311) | | (645) | | (383) | | (3,629) | |
DTC (HBO Max) sales to Mobility &
Consumer Wireline | — | | (61) | | (190) | | (217) | | (468) | | (235) | | (253) | | (261) | | (302) | | (1,051) | |
WarnerMedia video distribution sales
to DIRECTV and Vrio | (794) | | (704) | | (600) | | (544) | | (2,642) | | (585) | | (570) | | (226) | | (31) | | (1,412) | |
WarnerMedia sales of DIRECTV
advertising inventory | (39) | | (38) | | (38) | | (38) | | (153) | | (39) | | (38) | | (12) | | — | | (89) | |
| Other | (89) | | (66) | | (90) | | (107) | | (352) | | (82) | | (78) | | (47) | | (50) | | (257) | |
| Operations and Support Eliminations | (922) | | (869) | | (918) | | (906) | | (3,615) | | (941) | | (939) | | (546) | | (383) | | (2,809) | |
| Operating Income & EBITDA | $ | (374) | | $ | (256) | | $ | (370) | | $ | (565) | | $ | (1,565) | | $ | (349) | | $ | (372) | | $ | (99) | | $ | — | | $ | (820) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(C1) Non-GAAP Adjustments1: | 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | 2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | 2021 |
| Merger costs | $ | 182 | | $ | 211 | | $ | 38 | | $ | 37 | | $ | 468 | | $ | 37 | | $ | — | | $ | 130 | | $ | 132 | | $ | 299 | |
Employee separation costs and
benefit-related (gain) loss | 119 | | 765 | | 40 | | 253 | | 1,177 | | 57 | | — | | — | | — | | 57 | |
| Asset impairments and abandonments | 123 | | 2,319 | | 73 | | 16,365 | | 18,880 | | — | | 4,555 | | 161 | | 188 | | 4,904 | |
| Gain on spectrum transaction | (900) | | — | | — | | — | | (900) | | — | | — | | — | | — | | — | |
Adjustments to Operations and
Support Expenses & EBITDA | (476) | | 3,295 | | 151 | | 16,655 | | 19,625 | | 94 | | 4,555 | | 291 | | 320 | | 5,260 | |
| Amortization of intangible assets | 2,056 | | 2,145 | | 1,921 | | 1,890 | | 8,012 | | 1,131 | | 1,069 | | 1,012 | | 1,021 | | 4,233 | |
| Impairments | — | | — | | — | | 14 | | 14 | | — | | — | | — | | — | | — | |
| Adjustments to Operating Income | 1,580 | | 5,440 | | 2,072 | | 18,559 | | 27,651 | | 1,225 | | 5,624 | | 1,303 | | 1,341 | | 9,493 | |
Other income (expense) net2 | 317 | | 132 | | 1,262 | | 3,971 | | 5,682 | | (2,903) | | 337 | | (682) | | (491) | | (3,739) | |
Tax impact of adjustments and
discrete items | (394) | | (749) | | (648) | | (3,227) | | (5,018) | | 352 | | (1,018) | | (195) | | (224) | | (1,085) | |
| Noncontrolling interest | — | | (105) | | — | | — | | (105) | | — | | (81) | | — | | — | | (81) | |
| Adjustments to Net Income | $ | 1,503 | | $ | 4,718 | | $ | 2,686 | | $ | 19,303 | | $ | 28,210 | | $ | (1,326) | | $ | 4,862 | | $ | 426 | | $ | 626 | | $ | 4,588 | |
1 As reported in AT&T’s Form 8-K filed April 22, 2021, July 23, 2021, October 21, 2021 and January 26, 2022. Adjusting items include items considered non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairments, severance and other material gains and losses.
2 Includes adjustments to equity in net income of affiliates, including adjustment for DIRECTV intangible amortization (proportionate share).
