AT&T (T) 8-K AT&T Reports Third-Quarter Results

	Standalone AT&T
	Supplemental Unaudited Quarterly Financial Information
	Dollars in millions
	Unaudited
	Operating Revenues	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21			6/30/21			9/30/21			12/31/21			2021			3/31/22			6/30/22			9/30/22
	Revenues from Continuing Operations	$	35,357	$	34,527	$	35,407	$	37,759	$	143,050	$	35,877		$	35,740		$	31,326		$	31,095		$	134,038		$	29,712		$	29,643		$	30,043
[A]	Less: Video	(7,407)		(7,021)		(7,014)		(7,168)		(28,610)		(6,725)			(6,639)			(2,149)			—			(15,513)			—			—			—
[B]	Less: Other dispositions (Held-for-sale)	(369)		(369)		(420)		(256)		(1,414)		(231)			(158)			(64)			—			(453)			—			—			—
[H]	Less: Intercompany eliminations	64		55		65		83		267		62			57			17			—			136			—			—			—
	Standalone AT&T Operating Revenues	$	27,645	$	27,192	$	28,038	$	30,418	$	113,293	$	28,983		$	29,000		$	29,130		$	31,095		$	118,208		$	29,712		$	29,643		$	30,043
	Revenue from Continuing Operations Growth Rate Y/Y											1.5		%	3.5		%	-11.5		%	-17.6		%	-6.3		%	-17.2		%	-17.1		%	-4.1		%
	Standalone AT&T Revenue Growth Rate Y/Y											4.8		%	6.6		%	3.9		%	2.2		%	4.3		%	2.5		%	2.2		%	3.1		%

1

	Operations and Support Expenses	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21			6/30/21			9/30/21			12/31/21			2021			3/31/22			6/30/22			9/30/22
	Operations and Support Expenses from Continuing Operations	$	22,369	$	23,311	$	23,733	$	42,742	$	112,155	$	24,217		$	23,739		$	20,632		$	21,701		$	90,289		$	19,713		$	20,237		$	19,517
[I]	Non-GAAP Adjustments	720		(854)		32		(15,573)		(15,675)		(1)			70			(109)			(86)			(126)			(191)			(924)			(188)
	Adjusted Operations and Support Expenses from Continuing Operations	23,089		22,457		23,765		27,169		96,480		24,216			23,809			20,523			21,615			90,163			19,522			19,313			19,329
[A]	Less: Video	(6,020)		(5,809)		(5,887)		(6,458)		(24,174)		(5,660)			(5,275)			(1,731)			—			(12,666)			—			—			—
[B]	Less: Other dispositions (Held-for-sale)	(272)		(268)		(310)		(190)		(1,040)		(194)			(115)			(47)			—			(356)			—			—			—
[H]	Less: Intercompany eliminations	64		55		65		83		267		62			57			17			—			136			—			—			—
[D]	Less: Reclassification of allocations for separated businesses	76		86		76		84		322		15			19			16			(4)			46			—			—			—
[C]	Add: DTV-related retained costs	350		350		350		350		1,400		350			350			117			—			817			—			—			—
	Standalone AT&T Adjusted Operations and Support Expenses	$	17,287	$	16,871	$	18,059	$	21,038	$	73,255	$	18,789		$	18,845		$	18,895		$	21,611		$	78,140		$	19,522		$	19,313		$	19,329
	Operations and Support Expenses from Continuing Operations Growth Rate Y/Y											8.3		%	1.8		%	-13.1		%	-49.2		%	-19.5		%	-18.6		%	-14.8		%	-5.4		%
	Adjusted Operations and Support Expenses from Continuing Operations Growth Rate Y/Y											4.9		%	6.0		%	-13.6		%	-20.4		%	-6.5		%	-19.4		%	-18.9		%	-5.8		%
	Standalone AT&T Adjusted Operations and Support Expenses Growth Rate Y/Y											8.7		%	11.7		%	4.6		%	2.7		%	6.7		%	3.9		%	2.5		%	2.3		%

2

	Depreciation and Amortization Expense	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21			6/30/21			9/30/21			12/31/21			2021			3/31/22			6/30/22			9/30/22
	Depreciation and Amortization Expense from Continuing Operations	$	5,705	$	5,655	$	5,610	$	5,553	$	22,523	$	4,466		$	4,429		$	4,457		$	4,500		$	17,852		$	4,462		$	4,450		$	4,514
[I]	Non-GAAP Adjustments	(913)		(878)		(839)		(811)		(3,441)		(85)			(28)			(28)			(28)			(169)			(27)			(17)			(16)
	Adjusted Depreciation and Amortization Expense from Continuing Operations	4,792		4,777		4,771		4,742		19,082		4,381			4,401			4,429			4,472			17,683			4,435			4,433			4,498
[A]	Less: Video	(591)		(593)		(557)		(521)		(2,262)		(164)			(148)			(44)			—			(356)			—			—			—
[B]	Less: Other dispositions (Held-for-sale)	(4)		(4)		(4)		(3)		(15)		—			—			—			—			—			—			—			—
[C]	Add: DTV-related retained costs	180		180		180		180		720		180			180			60			—			420			—			—			—
	Standalone AT&T Adjusted Depreciation and Amortization Expense	$	4,377	$	4,360	$	4,390	$	4,398	$	17,525	$	4,397		$	4,433		$	4,445		$	4,472		$	17,747		$	4,435		$	4,433		$	4,498
	Depreciation and Amortization Expense from Continuing Operations Growth Rate Y/Y											-21.7		%	-21.7		%	-20.6		%	-19.0		%	-20.7		%	-0.1		%	0.5		%	1.3		%
	Adjusted Depreciation and Amortization Expense from Continuing Operations Growth Rate Y/Y											-8.6		%	-7.9		%	-7.2		%	-5.7		%	-7.3		%	1.2		%	0.7		%	1.6		%
	Standalone AT&T Adjusted Depreciation and Amortization Expense Growth Rate Y/Y											0.5		%	1.7		%	1.3		%	1.7		%	1.3		%	0.9		%	0.0		%	1.2		%

3

	Operating Income	3/31/20			6/30/20			9/30/20			12/31/20			2020			3/31/21			6/30/21			9/30/21			12/31/21			2021			3/31/22			6/30/22			9/30/22
	Operating Income from Continuing Operations	$	7,283		$	5,561		$	6,064		$	(10,536)		$	8,372		$	7,194		$	7,572		$	6,237		$	4,894		$	25,897		$	5,537		$	4,956		$	6,012
[I]	Non-GAAP Adjustments	193			1,732			807			16,384			19,116			86			(42)			137			114			295			218			941			204
	Adjusted Operating Income from Continuing Operations	7,476			7,293			6,871			5,848			27,488			7,280			7,530			6,374			5,008			26,192			5,755			5,897			6,216
	Less: Video	(796)			(619)			(570)			(189)			(2,174)			(901)			(1,216)			(374)			—			(2,491)			—			—			—
	Less: Other dispositions (Held-for-sale)	(93)			(97)			(106)			(63)			(359)			(37)			(43)			(17)			—			(97)			—			—			—
	Less: Intercompany eliminations	—			—			—			—			—			—			—			—			—			—			—			—			—
	Less: Reclassification of allocations for separated businesses	(76)			(86)			(76)			(84)			(322)			(15)			(19)			(16)			4			(46)			—			—			—
	Add: DTV-related retained costs	(530)			(530)			(530)			(530)			(2,120)			(530)			(530)			(177)			—			(1,237)			—			—			—
	Standalone AT&T Adjusted Operating Income	$	5,981		$	5,961		$	5,589		$	4,982		$	22,513		$	5,797		$	5,722		$	5,790		$	5,012		$	22,321		$	5,755		$	5,897		$	6,216
	Operating Income from Continuing Operations Growth Rate Y/Y																-1.2		%	36.2		%	2.9		%	146.5		%	209.3		%	-23.0		%	-34.5		%	-3.6		%
	Adjusted Operating Income Growth Rate Y/Y																-2.6		%	3.2		%	-7.2		%	-14.4		%	-4.7		%	-20.9		%	-21.7		%	-2.5		%
	Standalone AT&T Adjusted Operating Income Growth Rate Y/Y																-3.1		%	-4.0		%	3.6		%	0.6		%	-0.9		%	-0.7		%	3.1		%	7.4		%
	Operating Income Margin from Continuing Operations	20.6		%	16.1		%	17.1		%	-27.9		%	5.9		%	20.1		%	21.2		%	19.9		%	15.7		%	19.3		%	18.6		%	16.7		%	20.0		%
	Adjusted Operating Income Margin	21.1		%	21.1		%	19.4		%	15.5		%	19.2		%	20.3		%	21.1		%	20.3		%	16.1		%	19.5		%	19.4		%	19.9		%	20.7		%
	Standalone AT&T Adjusted Operating Income Margin	21.6		%	21.9		%	19.9		%	16.4		%	19.9		%	20.0		%	19.7		%	19.9		%	16.1		%	18.9		%	19.4		%	19.9		%	20.7		%

4

	Other Income (Expense)	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21		6/30/21		9/30/21		12/31/21		2021		3/31/22		6/30/22		9/30/22
	Interest expense	$	(1,963)	$	(1,990)	$	(1,923)	$	(1,851)	$	(7,727)	$	(1,823)	$	(1,640)	$	(1,627)	$	(1,626)	$	(6,716)	$	(1,626)	$	(1,502)	$	(1,420)
	Equity in net income (loss) of affiliates	—		10		29		50		89		(6)		(18)		183		444		603		521		504		392
	Other income (expense) - net	827		1,161		(211)		(2,865)		(1,088)		4,230		1,206		1,522		2,429		9,387		2,157		2,302		2,270
	Other Income (Expense) from Continuing Operations	(1,136)		(819)		(2,105)		(4,666)		(8,726)		2,401		(452)		78		1,247		3,274		1,052		1,304		1,242
[I]	Non-GAAP Adjustments	293		(26)		1,225		3,962		5,454		(2,968)		(16)		18		(769)		(3,735)		(545)		(635)		(648)
	Adjusted Other Income (Expense) from Continuing Operations	(843)		(845)		(880)		(704)		(3,272)		(567)		(468)		96		478		(461)		507		669		594
[F]	Less: Estimated interest expense impact of debt redemptions	—		—		—		—		—		371		371		371		371		1,484		371		371		—
[E]	Add: Estimated equity in net income from DIRECTV investment	971		848		789		497		3,105		746		955		293		—		1,994		—		—		—
	Standalone AT&T Adjusted Other Income (Expense)	$	128	$	3	$	(91)	$	(207)	$	(167)	$	550	$	858	$	760	$	849	$	3,017	$	878	$	1,040	$	594

5

	Income From Continuing Operations	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21		6/30/21		9/30/21		12/31/21		2021		3/31/22		6/30/22		9/30/22
	Income from Continuing Operations	$	4,849	$	3,699	$	3,204	$	(13,274)	$	(1,522)	$	7,586	$	5,969	$	5,019	$	5,202	$	23,776	$	5,149	$	4,751	$	6,346
[I]	Non-GAAP Adjustments	383		1,330		1,645		17,485		20,843		(2,276)		(307)		153		(764)		(3,194)		(224)		347		(1,036)
	Adjusted Income from Continuing Operations	5,232		5,029		4,849		4,211		19,321		5,310		5,662		5,172		4,438		20,582		4,925		5,098		5,310
	Less: Operating Income of Video and Other dispositions	(1,495)		(1,332)		(1,282)		(866)		(4,975)		(1,483)		(1,808)		(584)		4		(3,871)		—		—		—
	Add: Estimated equity in net income from DIRECTV investment	971		848		789		497		3,105		746		955		293		—		1,994		—		—		—
	Less: Estimated interest expense impact of debt redemptions	—		—		—		—		—		371		371		371		371		1,484		371		371		—
[G]	Less: Estimated tax on Video & Other dispositions	(111)		(106)		(94)		(67)		(378)		(73)		(95)		16		75		(76)		74		74		—
	Add: Adjustment of estimated interest expense impact of debt redemptions	—		—		—		—		—		(297)		(297)		(297)		(297)		(1,187)		(297)		(297)		—
	Standalone AT&T Adjusted Net Income	4,819		4,651		4,450		3,909		17,829		4,720		4,978		4,939		4,441		19,078		4,925		5,098		5,310
	Less: Income from Continuing Operations attributable to Noncontrolling Interest	(361)		(384)		(357)		(368)		(1,470)		(394)		(387)		(356)		(348)		(1,485)		(354)		(380)		(373)
	Less: Preferred Stock Dividends	(32)		(52)		(54)		(55)		(193)		(50)		(56)		(50)		(51)		(207)		(48)		(52)		(49)
	Adjusted Standalone AT&T Income Attributable to Common Stock	$	4,426	$	4,215	$	4,039	$	3,486	$	16,166	$	4,276	$	4,535	$	4,533	$	4,042	$	17,386	$	4,523	$	4,666	$	4,888
	Earnings from Continuing Operations per share of common stock:1
	Basic	$	0.62	$	0.46	$	0.39	$	(1.92)	$	(0.45)	$	0.99	$	0.77	$	0.64	$	0.67	$	3.07	$	0.66	$	0.60	$	0.82
	Diluted	$	0.62	$	0.46	$	0.39	$	(1.92)	$	(0.45)	$	0.97	$	0.76	$	0.63	$	0.66	$	3.02	$	0.65	$	0.59	$	0.79
[J]	Continuing Operations Adjusted Diluted											$	0.68	$	0.73	$	0.66	$	0.56	$	2.63	$	0.63	$	0.65	$	0.68
[J]	Standalone AT&T Adjusted Diluted	$	0.61	$	0.58	$	0.56	$	0.50	$	2.25	$	0.58	$	0.64	$	0.62	$	0.56	$	2.41	$	0.63	$	0.65	$	0.68
	Weighted Average Common Shares Outstanding	7,187		7,145		7,147		7,150		7,157		7,161		7,168		7,171		7,172		7,168		7,184		7,169		7,153
	Weighted Average Common Shares Outstanding with Dilution under ASU 2020-06	7,455		7,463		7,465		7,480		7,466		7,482		7,484		7,506		7,541		7,503		7,555		7,611		7,647
	Weighted Average Common Shares Outstanding with Dilution under historical	7,214		7,170		7,173		7,176		7,183		7,188		7,200		7,202		7,204		7,199		7,217		7,212		7,201
	1 Earnings per share from continuing operations is calculated using Income from Continuing Operations, less Income from Continuing Operations Attributable to Noncontrolling Interest and Preferred Stock Dividends divided by the weighted average common shares outstanding for the period.

6

EBITDA2	3/31/20			6/30/20			9/30/20			12/31/20			2020			3/31/21			6/30/21			9/30/21			12/31/21			2021			3/31/22			6/30/22			9/30/22
Net Income from Continuing Operations	$	4,849		$	3,699		$	3,204		$	(13,274)		$	(1,522)		$	7,586		$	5,969		$	5,019		$	5,202		$	23,776		$	5,149		$	4,751		$	6,346
Additions:
Income Tax Expense (Benefit)	1,298			1,043			755			(1,928)			1,168			2,009			1,151			1,296			939			5,395			1,440			1,509			908
Interest Expense	1,963			1,990			1,923			1,851			7,727			1,823			1,640			1,627			1,626			6,716			1,626			1,502			1,420
Equity in Net Income (Loss) of Affiliates	—			(10)			(29)			(50)			(89)			6			18			(183)			(444)			(603)			(521)			(504)			(392)
Other (Income) Expense - net	(827)			(1,161)			211			2,865			1,088			(4,230)			(1,206)			(1,522)			(2,429)			(9,387)			(2,157)			(2,302)			(2,270)
Depreciation and amortization	5,705			5,655			5,610			5,553			22,523			4,466			4,429			4,457			4,500			17,852			4,462			4,450			4,514
EBITDA	12,988			11,216			11,674			(4,983)			30,895			11,660			12,001			10,694			9,394			43,749			9,999			9,406			10,526
Non-GAAP Adjustments	(720)			854			(32)			15,573			15,675			1			(70)			109			86			126			191			924			188
Adjusted EBITDA	12,268			12,070			11,642			10,590			46,570			11,661			11,931			10,803			9,480			43,875			10,190			10,330			10,714
Less: Video	(1,387)			(1,212)			(1,127)			(710)			(4,436)			(1,065)			(1,364)			(418)			—			(2,847)			—			—			—
Less: Other dispositions (Held-for-sale)	(97)			(101)			(110)			(66)			(374)			(37)			(43)			(17)			—			(97)			—			—			—
Less: Intercompany eliminations	—			—			—			—			—			—			—			—			—			—			—			—			—
Less: Reclassification of allocations for separated businesses	(76)			(86)			(76)			(84)			(322)			(15)			(19)			(16)			4			(46)			—			—			—
Add: DTV-related retained costs	(350)			(350)			(350)			(350)			(1,400)			(350)			(350)			(117)			—			(817)			—			—			—
Standalone AT&T Adjusted EBITDA	$	10,358		$	10,321		$	9,979		$	9,380		$	40,038		$	10,194		$	10,155		$	10,235		$	9,484		$	40,068		$	10,190		$	10,330		$	10,714
Adjusted EBITDA Growth Rate Y/Y																-4.9		%	-1.2		%	-7.2		%	-10.5		%	-5.8		%	-12.6		%	-13.4		%	-0.8		%
Standalone AT&T Adjusted EBITDA Growth Rate Y/Y																-1.6		%	-1.6		%	2.6		%	1.1		%	0.1		%	0.0		%	1.7		%	4.7		%
Adjusted EBITDA Margin	34.7		%	35.0		%	32.9		%	28.0		%	32.6		%	32.5		%	33.4		%	34.5		%	30.5		%	32.7		%	34.3		%	34.8		%	35.7		%
Standalone AT&T Adjusted EBITDA Margin	37.5		%	38.0		%	35.6		%	30.8		%	35.3		%	35.2		%	35.0		%	35.1		%	30.5		%	33.9		%	34.3		%	34.8		%	35.7		%
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.

7

	Free Cash Flow ($B)3	3/31/21		6/30/21		9/30/21		12/31/21		2021		3/31/22		6/30/22		9/30/22
	Net cash provided by operating activities from Continuing Operations	$	9.6	$	10.2	$	9.3	$	8.1	$	37.2	$	7.6	$	7.7	$	10.1
	Add: Distributions from DIRECTV classified as investing activities	—		—		—		1.3		1.3		1.3		0.3		0.6
	Less: Capital expenditures	(3.9)		(3.7)		(4.5)		(3.5)		(15.6)		(4.6)		(4.9)		(5.9)
	Less: Cash paid vendor financing	(1.7)		(1.3)		(1.0)		(0.6)		(4.6)		(1.6)		(1.8)		(0.9)
	Free Cash Flow from Continuing Operations	4.0		5.2		3.8		5.3		18.3		2.8		1.4		3.8
[E]	Add: Estimated equity in net income from DIRECTV investment	—		—		0.7		—		0.7		—		—		—
	Standalone AT&T Free Cash Flow	$	4.0	$	5.2	$	4.5	$	5.3	$	19.0	$	2.8	$	1.4	$	3.8
	3 May not foot due to rounding. Historical presentation may differ due to insignificant reclasses between continuing and discontinued operations.

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	NOTES
[A]	Video business results as reported in AT&T's consolidated financial results; quarters ended 2021 include retained depreciation on assets supporting U-verse products.
[B]	Other dispositions include the held-for-sale businesses, Crunchyroll, Government Solutions and operations in Puerto Rico that do not meet the requirements for presentation in discontinued operations.
[C]	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.
[D]	Adjustment to reflect AT&T's first-quarter 2022 reclassification of certain administrative costs borne by AT&T where the business units did not influence decision making. These costs are not expected to continue in standalone AT&T.
[E]	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.
[F]	Reflects the use of proceeds to pay down approximately $39.0 billion of borrowings and the resulting reduction to interest expense. The estimated impact of interest expense reduction was determined using the weighted-average interest rate of AT&T’s long-term debt portfolio, including credit agreement borrowings and the impact of derivatives, of 3.8%. This adjustment is required for pro forma financial information prepared in accordance with Article 11 of Regulation S-X.
[G]	Estimated tax impact of pro forma and other adjustments at AT&T's adjusted effective tax rate.
[H]	Under GAAP, AT&T removed transactions involving dealing between segments, including advertising arrangements with Video.
[I]	Non-GAAP Adjustments:	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21		6/30/21		9/30/21		12/31/21		2021		3/31/22		6/30/22		9/30/22
	Transaction and other costs	$	23	$	35	$	29	$	25	$	112	$	35	$	—	$	8	$	(3)	$	40	$	98	$	185	$	58
	Employee separation costs and benefit-related (gain) loss	129		748		(61)		(37)		779		(34)		(70)		(4)		(20)		(128)		93		108		16
	Asset impairments and abandonments and restructuring	28		71		—		15,585		15,684		—		—		105		109		214		—		631		114
	Gain on spectrum transaction	(900)		—		—		—		(900)		—		—		—		—		—		—		—		—
	Adjustments to Operations and Support Expenses/ EBITDA	(720)		854		(32)		15,573		15,675		1		(70)		109		86		126		191		924		188
	Amortization of intangible assets	913		878		839		797		3,427		85		28		28		28		169		27		17		16
	Impairments	—		—		—		14		14		—		—		—		—		—		—		—		—
	Adjustments to Operating Income	193		1,732		807		16,384		19,116		86		(42)		137		114		295		218		941		204
	Other income (expense) net	293		(26)		1,225		3,962		5,454		(2,968)		(16)		18		(769)		(3,735)		(545)		(635)		(648)
	Tax impact of adjustments and discrete items	(103)		(376)		(387)		(2,861)		(3,727)		606		(249)		(2)		(109)		246		103		41		(592)
	Adjustments to Net Income	$	383	$	1,330	$	1,645	$	17,485	$	20,843	$	(2,276)	$	(307)	$	153	$	(764)	$	(3,194)	$	(224)	$	347	$	(1,036)
[J]	As of January 1, 2022, we adopted, through retrospective application, Accounting Standards Update (ASU) No. 2020-06, which requires that instruments which may be settled in cash or stock to be presumed settled in stock in calculating diluted EPS. While our intent is to settle the Mobility II preferred interests in cash, the ability to settle this instrument in AT&T shares will result in additional dilutive impact, the magnitude of which is influenced by the fair value of the Mobility II preferred interests and the average AT&T common stock price during the reporting period, which could vary from period-to-period. For these reasons, we have excluded the impact of ASU 2020-06 from our adjusted EPS calculation.

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