t-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-8610

AT&T INC.

Incorporated under the laws of the State of Delaware

I.R.S. Employer Identification Number 43-1301883

208 S. Akard St., Dallas, Texas 75202

Telephone Number: (210) 821-4105

Securities registered pursuant to Section 12(b) of the Act


		Name of each exchange
Title of each class	Trading Symbol(s)	on which registered
Common Shares (Par Value $1.00 Per Share)	T	New York Stock Exchange
Depositary Shares, each representing a 1/1000th interest in a share of 5.000% Perpetual Preferred Stock, Series A	T PRA	New York Stock Exchange
Depositary Shares, each representing a 1/1000th interest in a share of 4.750% Perpetual Preferred Stock, Series C	T PRC	New York Stock Exchange
AT&T Inc. 2.650% Global Notes due December 17, 2021	T 21B	New York Stock Exchange
AT&T Inc. 1.450% Global Notes due June 1, 2022	T 22B	New York Stock Exchange
AT&T Inc. 2.500% Global Notes due March 15, 2023	T 23	New York Stock Exchange
AT&T Inc. 2.750% Global Notes due May 19, 2023	T 23C	New York Stock Exchange
AT&T Inc. Floating Rate Global Notes due September 5, 2023	T 23D	New York Stock Exchange
AT&T Inc. 1.050% Global Notes due September 5, 2023	T 23E	New York Stock Exchange
AT&T Inc. 1.300% Global Notes due September 5, 2023	T 23A	New York Stock Exchange
AT&T Inc. 1.950% Global Notes due September 15, 2023	T 23F	New York Stock Exchange
AT&T Inc. 2.400% Global Notes due March 15, 2024	T 24A	New York Stock Exchange
AT&T Inc. 3.500% Global Notes due December 17, 2025	T 25	New York Stock Exchange
AT&T Inc. 0.250% Global Notes due March 4, 2026	T 26E	New York Stock Exchange
AT&T Inc. 1.800% Global Notes due September 5, 2026	T 26D	New York Stock Exchange


		Name of each exchange
Title of each class	Trading Symbol(s)	on which registered
AT&T Inc. 2.900% Global Notes due December 4, 2026	T 26A	New York Stock Exchange
AT&T Inc. 1.600% Global Notes due May 19, 2028	T 28C	New York Stock Exchange
AT&T Inc. 2.350% Global Notes due September 5, 2029	T 29D	New York Stock Exchange
AT&T Inc. 4.375% Global Notes due September 14, 2029	T 29B	New York Stock Exchange
AT&T Inc. 2.600% Global Notes due December 17, 2029	T 29A	New York Stock Exchange
AT&T Inc. 0.800% Global Notes due March 4, 2030	T 30B	New York Stock Exchange
AT&T Inc. 2.050% Global Notes due May 19, 2032	T 32A	New York Stock Exchange
AT&T Inc. 3.550% Global Notes due December 17, 2032	T 32	New York Stock Exchange
AT&T Inc. 5.200% Global Notes due November 18, 2033	T 33	New York Stock Exchange
AT&T Inc. 3.375% Global Notes due March 15, 2034	T 34	New York Stock Exchange
AT&T Inc. 2.450% Global Notes due March 15, 2035	T 35	New York Stock Exchange
AT&T Inc. 3.150% Global Notes due September 4, 2036	T 36A	New York Stock Exchange
AT&T Inc. 2.600% Global Notes due May 19, 2038	T 38C	New York Stock Exchange
AT&T Inc. 1.800% Global Notes due September 14, 2039	T 39B	New York Stock Exchange
AT&T Inc. 7.000% Global Notes due April 30, 2040	T 40	New York Stock Exchange
AT&T Inc. 4.250% Global Notes due June 1, 2043	T 43	New York Stock Exchange
AT&T Inc. 4.875% Global Notes due June 1, 2044	T 44	New York Stock Exchange
AT&T Inc. 4.000% Global Notes due June 1, 2049	T 49A	New York Stock Exchange
AT&T Inc. 4.250% Global Notes due March 1, 2050	T 50	New York Stock Exchange
AT&T Inc. 3.750% Global Notes due September 1, 2050	T 50A	New York Stock Exchange
AT&T Inc. 5.350% Global Notes due November 1, 2066	TBB	New York Stock Exchange
AT&T Inc. 5.625% Global Notes due August 1, 2067	TBC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Yes ☐ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

At April 30, 2021, there were 7,140 million common shares outstanding.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


AT&T INC.
CONSOLIDATED STATEMENTS OF INCOME
Dollars in millions except per share amounts
(Unaudited)
	Three months ended
	March 31,
		2021		2020
Operating Revenues
Service		$	38,504	$	38,883
Equipment		5,435		3,896
Total operating revenues		43,939		42,779

Operating Expenses
Cost of revenues
Equipment		5,556		4,092
Broadcast, programming and operations		7,538		6,754
Other cost of revenues (exclusive of depreciation and amortization shown separately below)		7,993		8,342
Selling, general and administrative		9,382		8,760
Asset impairments and abandonments		—		123
Depreciation and amortization		5,809		7,222
Total operating expenses		36,278		35,293
Operating Income		7,661		7,486
Other Income (Expense)
Interest expense		(1,870)		(2,018)
Equity in net income (loss) of affiliates		52		(6)
Other income (expense) — net		4,221		803
Total other income (expense)		2,403		(1,221)
Income Before Income Taxes		10,064		6,265
Income tax expense		2,122		1,302
Net Income		7,942		4,963
Less: Net Income Attributable to Noncontrolling Interest		(392)		(353)
Net Income Attributable to AT&T		$	7,550	$	4,610
Less: Preferred Stock Dividends		(50)		(32)
Net Income Attributable to Common Stock		$	7,500	$	4,578
Basic Earnings Per Share Attributable to Common Stock		$	1.04	$	0.63
Diluted Earnings Per Share Attributable to Common Stock		$	1.04	$	0.63
Weighted Average Number of Common Shares Outstanding — Basic (in millions)		7,161		7,187
Weighted Average Number of Common Shares Outstanding — with Dilution (in millions)		7,188		7,214

See Notes to Consolidated Financial Statements.


AT&T INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Dollars in millions
(Unaudited)
	Three months ended
	March 31,
		2021		2020
Net income		$	7,942	$	4,963
Other comprehensive income (loss), net of tax:
Foreign currency:
Translation adjustment (includes $(4) and $(51) attributable to noncontrolling interest), net of taxes of $(37) and $(62)		(109)		(1,854)
Securities:
Net unrealized gains (losses), net of taxes of $(18) and $22		(55)		66
Reclassification adjustment included in net income, net of taxes of $(1) and $0		(2)		—
Derivative instruments:
Net unrealized gains (losses), net of taxes of $136 and $(971)		511		(3,657)
Reclassification adjustment included in net income, net of taxes of $6 and $0		24		—
Defined benefit postretirement plans:
Amortization of net prior service credit included in net income, net of taxes of $(165) and $(151)		(504)		(461)
Other comprehensive income (loss)		(135)		(5,906)
Total comprehensive income (loss)		7,807		(943)
Less: Total comprehensive income attributable to noncontrolling interest		(388)		(302)
Total Comprehensive Income (Loss) Attributable to AT&T		$	7,419	$	(1,245)

See Notes to Consolidated Financial Statements.


AT&T INC.
CONSOLIDATED BALANCE SHEETS
Dollars in millions except per share amounts
	March 31, 2021		December 31, 2020
Assets	(Unaudited)
Current Assets
Cash and cash equivalents	$	11,342	$	9,740
Accounts receivable – net of related allowances for credit loss of $954 and $1,221	16,971		20,215
Inventories	3,347		3,695
Prepaid and other current assets	31,094		18,358
Total current assets	62,754		52,008
Noncurrent Inventories and Theatrical Film and Television Production Costs	15,626		14,752
Property, plant and equipment	322,534		327,751
Less: accumulated depreciation and amortization	(197,927)		(200,436)
Property, Plant and Equipment – Net	124,607		127,315
Goodwill	135,168		135,259
Licenses – Net	87,947		93,840
Trademarks and Trade Names – Net	23,043		23,297
Distribution Networks – Net	13,334		13,793
Other Intangible Assets – Net	13,384		15,386
Investments in and Advances to Equity Affiliates	1,805		1,780
Operating Lease Right-Of-Use Assets	24,415		24,714
Deposits on Wireless Licenses	23,406		—
Other Assets	21,496		23,617
Total Assets	$	546,985	$	525,761
Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	19,505	$	3,470
Accounts payable and accrued liabilities	48,245		50,051
Advanced billings and customer deposits	5,029		6,176
Dividends payable	3,829		3,741
Total current liabilities	76,608		63,438
Long-Term Debt	160,694		153,775
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes	61,886		60,472
Postemployment benefit obligation	14,723		18,276
Operating lease liabilities	21,766		22,202
Other noncurrent liabilities	28,229		28,358
Total deferred credits and other noncurrent liabilities	126,604		129,308
Stockholders’ Equity
Preferred stock ($1 par value, 10,000,000 authorized):
Series A (48,000 issued and outstanding at March 31, 2021 and December 31, 2020)	—		—
Series B (20,000 issued and outstanding at March 31, 2021 and December 31, 2020)	—		—
Series C (70,000 issued and outstanding at March 31, 2021 and December 31, 2020)	—		—
Common stock ($1 par value, 14,000,000,000 authorized at March 31, 2021 and December 31, 2020: issued 7,620,748,598 at March 31, 2021 and December 31, 2020)	7,621		7,621
Additional paid-in capital	129,856		130,175
Retained earnings	41,154		37,457
Treasury stock (480,892,174 at March 31, 2021 and 494,826,583 at December 31, 2020, at cost)	(17,342)		(17,910)
Accumulated other comprehensive income	4,199		4,330
Noncontrolling interest	17,591		17,567
Total stockholders’ equity	183,079		179,240
Total Liabilities and Stockholders’ Equity	$	546,985	$	525,761

See Notes to Consolidated Financial Statements.


AT&T INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in millions
(Unaudited)
	Three months ended
	March 31,
	2021		2020
Operating Activities
Net income	$	7,942	$	4,963
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,809		7,222
Amortization of film and television costs	2,886		2,269
Undistributed earnings from investments in equity affiliates	(47)		39
Provision for uncollectible accounts	321		780
Deferred income tax expense	1,848		259
Net (gain) loss on investments, net of impairments	(119)		(646)
Pension and postretirement benefit expense (credit)	(974)		(748)
Actuarial (gain) loss on pension and postretirement benefits	(2,844)		—
Asset impairments and abandonments	—		123
Changes in operating assets and liabilities:
Receivables	751		1,695
Other current assets, inventories and theatrical film and television production costs	(3,518)		(3,267)
Accounts payable and other accrued liabilities	(3,060)		(3,884)
Equipment installment receivables and related sales	1,190		535
Deferred customer contract acquisition and fulfillment costs	244		105
Postretirement claims and contributions	(343)		(111)
Other - net	(159)		(468)
Total adjustments	1,985		3,903
Net Cash Provided by Operating Activities	9,927		8,866
Investing Activities
Capital expenditures, including $(61) and $(28) of interest during construction	(4,033)		(4,966)
Acquisitions, net of cash acquired	(22,884)		(100)
Dispositions	51		118
(Purchases), sales and settlements of securities and investments, net	(4)		(6)
Advances to and investments in equity affiliates, net	18		(68)
Net Cash Used in Investing Activities	(26,852)		(5,022)
Financing Activities
Net change in short-term borrowings with original maturities of three months or less	687		1,742
Issuance of other short-term borrowings	15,485		1,390
Issuance of long-term debt	9,097		4,357
Repayment of long-term debt	(902)		(4,422)
Payment of vendor financing	(1,690)		(791)
Issuance of preferred stock	—		3,869
Purchase of treasury stock	(176)		(5,463)
Issuance of treasury stock	63		58
Dividends paid	(3,741)		(3,737)
Other - net	(340)		(3,102)
Net Cash Provided by (Used in) Financing Activities	18,483		(6,099)
Net increase (decrease) in cash and cash equivalents and restricted cash	1,558		(2,255)
Cash and cash equivalents and restricted cash beginning of year	9,870		12,295
Cash and Cash Equivalents and Restricted Cash End of Period	$	11,428	$	10,040

See Notes to Consolidated Financial Statements.


AT&T INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Dollars and shares in millions except per share amounts
(Unaudited)
	Three months ended
		March 31, 2021	March 31, 2020
			Shares	Amount		Shares	Amount
Preferred Stock - Series A
Balance at beginning of period			—	$	—	—	$	—
Issuance of stock			—	—		—	—
Balance at end of period			—	$	—	—	$	—
Preferred Stock - Series B
Balance at beginning of period			—	$	—	—	$	—
Issuance of stock			—	—		—	—
Balance at end of period			—	$	—	—	$	—
Preferred Stock - Series C
Balance at beginning of period			—	$	—	—	$	—
Issuance of stock			—	—		—	—
Balance at end of period			—	$	—	—	$	—
Common Stock
Balance at beginning of period			7,621	$	7,621	7,621	$	7,621
Issuance of stock			—	—		—	—
Balance at end of period			7,621	$	7,621	7,621	$	7,621
Additional Paid-In Capital
Balance at beginning of period				$	130,175		$	126,279
Repurchase and acquisition of common stock				—			67
Issuance of preferred stock				—			3,869
Issuance of treasury stock				(70)			(47)
Share-based payments				(249)			(202)

Balance at end of period				$	129,856		$	129,966
Retained Earnings
Balance at beginning of period				$	37,457		$	57,936
Cumulative effect of accounting change and other adjustments				—			(293)
Adjusted beginning balance				37,457			57,643
Net income attributable to AT&T				7,550			4,610
Preferred stock dividends				(117)			(32)
Common stock dividends ($0.52 and $0.52 per share)				(3,736)			(3,687)
Balance at end of period				$	41,154		$	58,534

See Notes to Consolidated Financial Statements.


AT&T INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - continued
Dollars and shares in millions except per share amounts
(Unaudited)
	Three months ended
		March 31, 2021	March 31, 2020
			Shares	Amount		Shares	Amount
Treasury Stock
Balance at beginning of period			(495)	$	(17,910)	(366)	$	(13,085)
Repurchase and acquisition of common stock			(6)	(176)		(148)	(5,547)
Reissuance of treasury stock			20	744		18	675
Balance at end of period			(481)	$	(17,342)	(496)	$	(17,957)
Accumulated Other Comprehensive Income Attributable to AT&T, net of tax
Balance at beginning of period				$	4,330		$	5,470
Other comprehensive income attributable to AT&T				(131)			(5,855)
Balance at end of period				$	4,199		$	(385)
Noncontrolling Interest
Balance at beginning of period				$	17,567		$	17,713
Cumulative effect of accounting change and other adjustments				—			(7)
Adjusted beginning balance				17,567			17,706
Net income attributable to noncontrolling interest				392			353
Issuance and acquisition by noncontrolling owners				—			1
Distributions				(364)			(339)
Translation adjustments attributable to noncontrolling interest, net of taxes				(4)			(51)
Balance at end of period				$	17,591		$	17,670
Total Stockholders' Equity at beginning of period				$	179,240		$	201,934
Total Stockholders' Equity at end of period				$	183,079		$	195,449

See Notes to Consolidated Financial Statements.

AT&T INC.

MARCH 31, 2021

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in millions except per share amounts

NOTE 1. PREPARATION OF INTERIM FINANCIAL STATEMENTS

Basis of Presentation Throughout this document, AT&T Inc. is referred to as “we,” “AT&T” or the “Company.” The consolidated financial statements include the accounts of the Company and subsidiaries and affiliates which we control. AT&T is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications, media and technology industries. You should read this document in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020. The results for the interim periods are not necessarily indicative of those for the full year. These consolidated financial statements include all adjustments that are necessary to present fairly the results for the presented interim periods, consisting of normal recurring accruals and other items.

All significant intercompany transactions are eliminated in the consolidation process. Investments in subsidiaries and partnerships which we do not control but have significant influence are accounted for under the equity method. Earnings from certain investments accounted for using the equity method are included for periods ended within up to one quarter of our period end. We also record our proportionate share of our equity method investees’ other comprehensive income (OCI) items.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain prior period amounts have been conformed to the current period’s presentation (see Note 4 and Note 5).

In the tables throughout this document, percentage increases and decreases that are not considered meaningful are denoted with a dash.

NOTE 2. EARNINGS PER SHARE

A reconciliation of the numerators and denominators of basic and diluted earnings per share for the three months ended March 31, 2021 and 2020, is shown in the table below:


	Three months ended
	March 31,
		2021		2020
Numerators
Numerator for basic earnings per share:




Net Income Attributable to Common Stock		$	7,500	$	4,578
Dilutive potential common shares:
Share-based payment		6		6
Numerator for diluted earnings per share		$	7,506	$	4,584
Denominators (000,000)
Denominator for basic earnings per share:
Weighted average number of common shares outstanding		7,161		7,187
Dilutive potential common shares:
Share-based payment (in shares)		27		27
Denominator for diluted earnings per share		7,188