AT&T (T) 8-K AT&T Raises Full-Year Adjusted EBITDA and Free Cash Flow Guidance Driven by Continued Subscriber and Revenue Growth

AT&T Inc.
Financial Data
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Third Quarter				Percent		Nine-Month Period				Percent
	2023		2022		Change		2023		2022		Change
Operating Revenues
Service	$	25,112	$	24,731	1.5	%	$	74,579	$	72,998	2.2	%
Equipment	5,238		5,312		(1.4)	%	15,827		16,400		(3.5)	%
Total Operating Revenues	30,350		30,043		1.0	%	90,406		89,398		1.1	%
Operating Expenses
Cost of revenues
Equipment	5,219		5,440		(4.1)	%	15,933		17,010		(6.3)	%
Other cost of revenues (exclusive of depreciation    and amortization shown separately below)	6,835		6,761		1.1	%	20,279		20,267		0.1	%
Selling, general and administrative	7,205		7,202		—	%	21,389		21,445		(0.3)	%
Asset impairments and abandonments     and restructuring	604		114		—	%	604		745		(18.9)	%
Depreciation and amortization	4,705		4,514		4.2	%	14,011		13,426		4.4	%
Total Operating Expenses	24,568		24,031		2.2	%	72,216		72,893		(0.9)	%
Operating Income	5,782		6,012		(3.8)	%	18,190		16,505		10.2	%
Interest Expense	1,662		1,420		17.0	%	4,978		4,548		9.5	%
Equity in Net Income of Affiliates	420		392		7.1	%	1,338		1,417		(5.6)	%
Other Income (Expense) — Net	440		2,270		(80.6)	%	2,362		6,729		(64.9)	%
Income from Continuing Operations  Before Income Taxes	4,980		7,254		(31.3)	%	16,912		20,103		(15.9)	%
Income tax expense on continuing operations	1,154		908		27.1	%	3,871		3,857		0.4	%
Income From Continuing Operations	3,826		6,346		(39.7)	%	13,041		16,246		(19.7)	%
Income (loss) from discontinued operations, net of tax	—		53		—	%	—		(146)		—	%
Net Income	3,826		6,399		(40.2)	%	13,041		16,100		(19.0)	%
Less: Net Income Attributable to Noncontrolling Interest	(331)		(373)		11.3	%	(829)		(1,107)		25.1	%
Net Income Attributable to AT&T	$	3,495	$	6,026	(42.0)	%	$	12,212	$	14,993	(18.5)	%
Less: Preferred Stock Dividends	(51)		(49)		(4.1)	%	(155)		(149)		(4.0)	%
Net Income Attributable to Common Stock	$	3,444	$	5,977	(42.4)	%	$	12,057	$	14,844	(18.8)	%
Basic Earnings (Loss) Per Share Attributable to Common Stock
From continuing operations	$	0.48	$	0.82	(41.5)	%	$	1.67	$	2.08	(19.7)	%
From discontinued operations	$	—	$	0.01	—	%	$	—	$	(0.02)	—	%
	$	0.48	$	0.83	(42.2)	%	$	1.67	$	2.06	(18.9)	%
Weighted Average Common Shares Outstanding (000,000)	7,185		7,153		0.4	%	7,178		7,169		0.1	%
Diluted Earnings (Loss) Per Share Attributable to Common Stock
From continuing operations	$	0.48	$	0.79	(39.2)	%	$	1.67	$	2.03	(17.7)	%
From discontinued operations	$	—	$	0.01	—	%	$	—	$	(0.02)	—	%
	$	0.48	$	0.80	(40.0)	%	$	1.67	$	2.01	(16.9)	%
Weighted Average Common Shares Outstanding with Dilution (000,000)	7,185		7,647		(6.0)	%	7,280		7,605		(4.3)	%

1

AT&T Inc.
Financial Data
Consolidated Balance Sheets
Dollars in millions
Unaudited	Sep. 30,		Dec. 31,
	2023		2022
Assets
Current Assets
Cash and cash equivalents	$	7,540	$	3,701
Accounts receivable – net of related allowances for credit loss of $484 and $588	8,962		11,466
Inventories	2,520		3,123
Prepaid and other current assets	16,598		14,818
Total current assets	35,620		33,108
Property, Plant and Equipment – Net	128,496		127,445
Goodwill – Net	67,854		67,895
Licenses – Net	127,113		124,092
Other Intangible Assets – Net	5,332		5,354
Investments in and Advances to Equity Affiliates	1,847		3,533
Operating Lease Right-Of-Use Assets	21,001		21,814
Other Assets	19,435		19,612
Total Assets	$	406,698	$	402,853
Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	11,302	$	7,467
Note payable to DIRECTV	—		130
Accounts payable and accrued liabilities	34,659		42,644
Advanced billings and customer deposits	3,703		3,918
Dividends payable	2,020		2,014
Total current liabilities	51,684		56,173
Long-Term Debt	126,701		128,423
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes	58,671		57,032
Postemployment benefit obligation	6,494		7,260
Operating lease liabilities	17,730		18,659
Other noncurrent liabilities	25,591		28,849
Total deferred credits and other noncurrent liabilities	108,486		111,800
Redeemable Noncontrolling Interest	1,972		—
Stockholders’ Equity
Preferred stock	—		—
Common stock	7,621		7,621
Additional paid-in capital	116,890		123,610
Retained (deficit) earnings	(7,203)		(19,415)
Treasury stock	(16,150)		(17,082)
Accumulated other comprehensive income	2,545		2,766
Noncontrolling interest	14,152		8,957
Total stockholders’ equity	117,855		106,457
Total Liabilities and Stockholders’ Equity	$	406,698	$	402,853

2

AT&T Inc.
Financial Data
Consolidated Statements of Cash Flows
Dollars in millions
Unaudited	Nine-Month Period
	2023		2022
Operating Activities
Income from continuing operations	$	13,041	$	16,246
Adjustments to reconcile income from continuing operations to net cash provided by     operating activities from continuing operations:
Depreciation and amortization	14,011		13,426
Provision for uncollectible accounts	1,409		1,323
Deferred income tax expense	3,163		2,947
Net (gain) loss on investments, net of impairments	335		412
Pension and postretirement benefit expense (credit)	(1,966)		(2,529)
Actuarial and settlement (gain) loss on pension and postretirement benefits - net	(145)		(3,838)
Asset impairments and abandonments and restructuring	604		745
Changes in operating assets and liabilities:
Receivables	1,173		1,021
Other current assets	57		(799)
Accounts payable and other accrued liabilities	(5,062)		(3,261)
Equipment installment receivables and related sales	(56)		906
Deferred customer contract acquisition and fulfillment costs	47		(756)
Postretirement claims and contributions	(715)		(443)
Other - net	1,040		64
Total adjustments	13,895		9,218
Net Cash Provided by Operating Activities from Continuing Operations	26,936		25,464
Investing Activities
Capital expenditures	(13,252)		(15,397)
Acquisitions, net of cash acquired	(923)		(9,959)
Dispositions	66		49
Distributions from DIRECTV in excess of cumulative equity in earnings	1,447		2,205
(Purchases), sales and settlements of securities and investments - net	(1,043)		93
Other - net	(81)		(2)
Net Cash Used in Investing Activities from Continuing Operations	(13,786)		(23,011)
Financing Activities
Net change in short-term borrowings with original maturities of three months or less	(914)		84
Issuance of other short-term borrowings	5,406		3,955
Repayment of other short-term borrowings	(979)		(16,861)
Issuance of long-term debt	9,633		479
Repayment of long-term debt	(11,889)		(24,412)
Repayment of note payable to DIRECTV	(130)		(1,070)
Payment of vendor financing	(4,736)		(4,237)
Purchase of treasury stock	(190)		(875)
Issuance of treasury stock	3		28
Issuance of preferred interests in subsidiary	7,151		—
Redemption of preferred interests in subsidiary	(5,333)		—
Dividends paid	(6,116)		(7,845)
Other - net	(1,190)		(3,649)
Net Cash Used in Financing Activities from Continuing Operations	(9,284)		(54,403)
Net increase (decrease) in cash and cash equivalents and restricted cash from continuing operations	3,866		(51,950)
Cash flows from Discontinued Operations:
Cash (used in) provided by operating activities	—		(3,754)
Cash provided by (used in) investing activities	—		1,029
Cash provided by (used in) financing activities	—		35,853
Net increase (decrease) in cash and cash equivalents and restricted cash from discontinued operations	—		33,128
Net increase (decrease) in cash and cash equivalents and restricted cash	$	3,866	$	(18,822)
Cash and cash equivalents and restricted cash beginning of year	3,793		21,316
Cash and Cash Equivalents and Restricted Cash End of Period	$	7,659	$	2,494

3

AT&T Inc.
Consolidated Supplementary Data
Supplementary Financial Data
Dollars in millions except per share amounts
Unaudited	Third Quarter				Percent		Nine-Month Period						Percent
	2023		2022		Change		2023			2022			Change
Capital expenditures
Purchase of property and equipment	$	4,601	$	5,874	(21.7)	%	$	13,116		$	15,273		(14.1)	%
Interest during construction - capital expenditures	46		47		(2.1)	%	136			124			9.7	%
Total Capital Expenditures	$	4,647	$	5,921	(21.5)	%	$	13,252		$	15,397		(13.9)	%
Acquisitions, net of cash acquired
Business acquisitions	$	—	$	—	—	%	$	—		$	—		—	%
Spectrum acquisitions	241		111		—	%	309			9,076			(96.6)	%
Interest during construction - spectrum	167		278		(39.9)	%	614			883			(30.5)	%
Total Acquisitions	$	408	$	389	4.9	%	$	923		$	9,959		(90.7)	%
Cash paid for interest - continuing operations	$	2,099	$	1,953	7.5	%	$	5,703		$	5,981		(4.6)	%
Cash paid for income taxes, net of refunds - continuing operations	$	423	$	62	—	%	$	758		$	400		89.5	%
Dividends Declared per Common Share	$	0.2775	$	0.2775	—	%	$	0.8325		$	0.8325		—	%
End of Period Common Shares Outstanding (000,000)							7,150			7,126			0.3	%
Debt Ratio							53.5		%	48.8		%	470	BP
Total Employees							152,740			169,880			(10.1)	%

4

COMMUNICATIONS SEGMENT

The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the U.S. and businesses globally. The Communications segment contains three reporting units: Mobility, Business Wireline, and Consumer Wireline.

Results have been recast to remove prior service credits from our historical reporting.

Segment Results
Dollars in millions
Unaudited	Third Quarter				Percent		Nine-Month Period				Percent
	2023		2022		Change		2023		2022		Change
Segment Operating Revenues
Mobility	$	20,692	$	20,278	2.0	%	$	61,589	$	60,279	2.2	%
Business Wireline	5,221		5,668		(7.9)	%	15,831		16,903		(6.3)	%
Consumer Wireline	3,331		3,185		4.6	%	9,821		9,520		3.2	%
Total Segment Operating Revenues	29,244		29,131		0.4	%	87,241		86,702		0.6	%
Segment Operating Income
Mobility	6,763		6,226		8.6	%	19,647		17,963		9.4	%
Business Wireline	350		621		(43.6)	%	1,124		1,750		(35.8)	%
Consumer Wireline	160		142		12.7	%	422		446		(5.4)	%
Total Segment Operating Income	$	7,273	$	6,989	4.1	%	$	21,193	$	20,159	5.1	%

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited					September 30,		Percent
					2023	2022	Change
Broadband Connections
Broadband					15,065	15,112	(0.3)	%
DSL					231	340	(32.1)	%
Total Broadband Connections					15,296	15,452	(1.0)	%
Voice Connections
Retail Consumer Switched Access Lines					4,421	5,466	(19.1)	%
Consumer VoIP Connections					2,649	3,022	(12.3)	%
Total Retail Consumer Voice Connections					7,070	8,488	(16.7)	%
	Third Quarter		Percent		Nine-Month Period		Percent
	2023	2022	Change		2023	2022	Change
Broadband Net Additions
Broadband	20	(24)	—	%	(10)	38	—	%
DSL	(28)	(33)	15.2	%	(80)	(90)	11.1	%
Total Broadband Net Additions	(8)	(57)	86.0	%	(90)	(52)	(73.1)	%

5

Mobility

Mobility provides nationwide wireless service and equipment.

Mobility Results
Dollars in millions
Unaudited	Third Quarter						Percent		Nine-Month Period						Percent
	2023			2022			Change		2023			2022			Change
Operating Revenues
Service	$	15,908		$	15,337		3.7	%	$	47,136		$	45,065		4.6	%
Equipment	4,784			4,941			(3.2)	%	14,453			15,214			(5.0)	%
Total Operating Revenues	20,692			20,278			2.0	%	61,589			60,279			2.2	%
Operating Expenses
Operations and support	11,795			12,010			(1.8)	%	35,587			36,198			(1.7)	%
Depreciation and amortization	2,134			2,042			4.5	%	6,355			6,118			3.9	%
Total Operating Expenses	13,929			14,052			(0.9)	%	41,942			42,316			(0.9)	%
Operating Income	$	6,763		$	6,226		8.6	%	$	19,647		$	17,963		9.4	%
Operating Income Margin	32.7		%	30.7		%	200	BP	31.9		%	29.8		%	210	BP
Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									September 30,						Percent
									2023			2022			Change
Mobility Subscribers
Postpaid									86,365			83,614			3.3	%
Postpaid phone									70,757			68,969			2.6	%
Prepaid									19,391			19,215			0.9	%
Reseller									7,101			5,854			21.3	%
Connected Devices									122,728			101,995			20.3	%
Total Mobility Subscribers1									235,585			210,678			11.8	%
1Wireless subscribers at September 30, 2023 includes an increase of 295 subscribers and connections (206 postpaid, including 74 phone, and 89 connected devices) resulting from our 3G network shutdown.
	Third Quarter						Percent		Nine-Month Period						Percent
	2023			2022			Change		2023			2022			Change
Mobility Net Additions
Postpaid Phone Net Additions	468			708			(33.9)	%	1,218			2,212			(44.9)	%
Total Phone Net Additions	494			816			(39.5)	%	1,407			2,629			(46.5)	%
Postpaid	550			964			(42.9)	%	1,556			2,987			(47.9)	%
Prepaid	56			141			(60.3)	%	263			488			(46.1)	%
Reseller	401			308			30.2	%	941			312			—	%
Connected Devices	5,547			5,716			(3.0)	%	15,133			15,476			(2.2)	%
Total Mobility Net Additions	6,554			7,129			(8.1)	%	17,893			19,263			(7.1)	%
Postpaid Churn	0.95		%	1.01		%	(6)	BP	0.97		%	0.96		%	1 BP
Postpaid Phone-Only Churn	0.79		%	0.84		%	(5)	BP	0.80		%	0.79		%	1 BP

6

Business Wireline

Business Wireline provides advanced ethernet-based fiber services, IP Voice and managed professional services, as well as traditional voice and data services and related equipment to business customers.

Business Wireline Results
Dollars in millions
Unaudited	Third Quarter						Percent		Nine-Month Period						Percent
	2023			2022			Change		2023			2022			Change
Operating Revenues
Service	$	5,087		$	5,524		(7.9)	%	$	15,401		$	16,418		(6.2)	%
Equipment	134			144			(6.9)	%	430			485			(11.3)	%
Total Operating Revenues	5,221			5,668			(7.9)	%	15,831			16,903			(6.3)	%
Operating Expenses
Operations and support	3,526			3,705			(4.8)	%	10,699			11,199			(4.5)	%
Depreciation and amortization	1,345			1,342			0.2	%	4,008			3,954			1.4	%
Total Operating Expenses	4,871			5,047			(3.5)	%	14,707			15,153			(2.9)	%
Operating Income	$	350		$	621		(43.6)	%	$	1,124		$	1,750		(35.8)	%
Operating Income Margin	6.7		%	11.0		%	(430)	BP	7.1		%	10.4		%	(330)	BP

7

Consumer Wireline

Consumer Wireline provides broadband services, including fiber connections that provide our multi-gig services to residential customers in select locations. Consumer Wireline also provides legacy telephony voice communication services.

Consumer Wireline Results
Dollars in millions
Unaudited	Third Quarter						Percent		Nine-Month Period						Percent
	2023			2022			Change		2023			2022			Change
Operating Revenues
Broadband	$	2,667		$	2,429		9.8	%	$	7,755		$	7,177		8.1	%
Legacy voice and data services	368			427			(13.8)	%	1,147			1,332			(13.9)	%
Other service and equipment	296			329			(10.0)	%	919			1,011			(9.1)	%
Total Operating Revenues	3,331			3,185			4.6	%	9,821			9,520			3.2	%
Operating Expenses
Operations and support	2,300			2,243			2.5	%	6,810			6,723			1.3	%
Depreciation and amortization	871			800			8.9	%	2,589			2,351			10.1	%
Total Operating Expenses	3,171			3,043			4.2	%	9,399			9,074			3.6	%
Operating Income	$	160		$	142		12.7	%	$	422		$	446		(5.4)	%
Operating Income Margin	4.8		%	4.5		%	30	BP	4.3		%	4.7		%	(40)	BP
Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									September 30,						Percent
									2023			2022			Change
Broadband Connections
Total Broadband and DSL Connections									13,887			14,055			(1.2)	%
Broadband									13,710			13,796			(0.6)	%
Fiber Broadband Connections									8,034			6,935			15.8	%
Voice Connections
Retail Consumer Switched Access Lines									1,737			2,123			(18.2)	%
Consumer VoIP Connections									2,035			2,409			(15.5)	%
Total Retail Consumer Voice Connections									3,772			4,532			(16.8)	%
	Third Quarter						Percent		Nine-Month Period						Percent
	2023			2022			Change		2023			2022			Change
Broadband Net Additions
Total Broadband and DSL Net Additions	(8)			(50)			84.0	%	(104)			(105)			1.0	%
Broadband Net Additions	15			(29)			—	%	(43)			(49)			12.2	%
Fiber Broadband Net Additions	296			338			(12.4)	%	819			943			(13.1)	%

8

LATIN AMERICA SEGMENT

The segment provides wireless services and equipment to customers in Mexico.

Segment Results
Dollars in millions
Unaudited	Third Quarter						Percent		Nine-Month Period						Percent
	2023			2022			Change		2023			2022			Change
Operating Revenues
Wireless service	$	672		$	559		20.2	%	$	1,898		$	1,583		19.9	%
Wireless equipment	320			226			41.6	%	944			700			34.9	%
Total Segment Operating Revenues	992			785			26.4	%	2,842			2,283			24.5	%
Operating Expenses
Operations and support	837			684			22.4	%	2,396			2,036			17.7	%
Depreciation and amortization	184			164			12.2	%	544			494			10.1	%
Total Segment Operating Expenses	1,021			848			20.4	%	2,940			2,530			16.2	%
Operating Income (Loss)	$	(29)		$	(63)		54.0	%	$	(98)		$	(247)		60.3	%
Operating Income Margin	(2.9)		%	(8.0)		%	510	BP	(3.4)		%	(10.8)		%	740	BP
Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									September 30,						Percent
									2023			2022			Change
Mexico Wireless Subscribers
Postpaid									5,085			4,854			4.8	%
Prepaid									16,213			15,689			3.3	%
Reseller									456			455			0.2	%
Total Mexico Wireless Subscribers									21,754			20,998			3.6	%
	Third Quarter						Percent		Nine-Month Period						Percent
	2023			2022			Change		2023			2022			Change
Mexico Wireless Net Additions
Postpaid	55			19			—	%	160			47			—	%
Prepaid	17			267			(93.6)	%	9			632			(98.6)	%
Reseller	(7)			12			—	%	(18)			(43)			58.1	%
Total Mexico Wireless Net Additions	65			298			(78.2)	%	151			636			(76.3)	%

9

SUPPLEMENTAL SEGMENT RECONCILIATION

Three Months Ended
Dollars in millions
Unaudited
September 30, 2023
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)
Communications
Mobility	$	20,692	$	11,795	$	8,897	$	2,134	$	6,763
Business Wireline	5,221		3,526		1,695		1,345		350
Consumer Wireline	3,331		2,300		1,031		871		160
Total Communications	29,244		17,621		11,623		4,350		7,273
Latin America - Mexico	992		837		155		184		(29)
Segment Total	30,236		18,458		11,778		4,534		7,244
Corporate and Other
Corporate:
DTV-related retained costs	—		167		(167)		144		(311)
Parent administration support	(1)		333		(334)		1		(335)
Securitization fees	25		164		(139)		—		(139)
Value portfolio	90		25		65		5		60
Total Corporate	114		689		(575)		150		(725)
Certain significant items	—		716		(716)		21		(737)
Total Corporate and Other	114		1,405		(1,291)		171		(1,462)
AT&T Inc.	$	30,350	$	19,863	$	10,487	$	4,705	$	5,782
September 30, 2022
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)
Communications
Mobility	$	20,278	$	12,010	$	8,268	$	2,042	$	6,226
Business Wireline	5,668		3,705		1,963		1,342		621
Consumer Wireline	3,185		2,243		942		800		142
Total Communications	29,131		17,958		11,173		4,184		6,989
Latin America - Mexico	785		684		101		164		(63)
Segment Total	29,916		18,642		11,274		4,348		6,926
Corporate and Other
Corporate:
DTV-related retained costs	—		235		(235)		139		(374)
Parent administration support	(6)		317		(323)		2		(325)
Securitization fees	15		103		(88)		—		(88)
Value portfolio	118		32		86		9		77
Total Corporate	127		687		(560)		150		(710)
Certain significant items	—		188		(188)		16		(204)
Total Corporate and Other	127		875		(748)		166		(914)
AT&T Inc.	$	30,043	$	19,517	$	10,526	$	4,514	$	6,012

10

SUPPLEMENTAL SEGMENT RECONCILIATION

Nine Months Ended
Dollars in millions
Unaudited
September 30, 2023
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)
Communications
Mobility	$	61,589	$	35,587	$	26,002	$	6,355	$	19,647
Business Wireline	15,831		10,699		5,132		4,008		1,124
Consumer Wireline	9,821		6,810		3,011		2,589		422
Total Communications	87,241		53,096		34,145		12,952		21,193
Latin America - Mexico	2,842		2,396		446		544		(98)
Segment Total	90,083		55,492		34,591		13,496		21,095
Corporate and Other
Corporate:
DTV-related retained costs	—		514		(514)		440		(954)
Parent administration support	(13)		1,039		(1,052)		4		(1,056)
Securitization fees	61		439		(378)		—		(378)
Value portfolio	275		77		198		16		182
Total Corporate	323		2,069		(1,746)		460		(2,206)
Certain significant items	—		644		(644)		55		(699)
Total Corporate and Other	323		2,713		(2,390)		515		(2,905)
AT&T Inc.	$	90,406	$	58,205	$	32,201	$	14,011	$	18,190
September 30, 2022
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)
Communications
Mobility	$	60,279	$	36,198	$	24,081	$	6,118	$	17,963
Business Wireline	16,903		11,199		5,704		3,954		1,750
Consumer Wireline	9,520		6,723		2,797		2,351		446
Total Communications	86,702		54,120		32,582		12,423		20,159
Latin America - Mexico	2,283		2,036		247		494		(247)
Segment Total	88,985		56,156		32,829		12,917		19,912
Corporate and Other
Corporate:
DTV-related retained costs	8		634		(626)		408		(1,034)
Parent administration support	(24)		1,005		(1,029)		12		(1,041)
Securitization fees	48		263		(215)		—		(215)
Value portfolio	381		106		275		29		246
Total Corporate	413		2,008		(1,595)		449		(2,044)
Certain significant items	—		1,303		(1,303)		60		(1,363)
Total Corporate and Other	413		3,311		(2,898)		509		(3,407)
AT&T Inc.	$	89,398	$	59,467	$	29,931	$	13,426	$	16,505

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