EX-99.4 5 t-2q2022exhibit994.htm EX-99.4 SUPPLEMENTAL QUARTERLY STANDALONE AT&T FINANCIAL INFORMATION Document

Standalone AT&T
Supplemental Unaudited Quarterly Financial Information
Dollars in millions
Unaudited
Operating Revenues3/31/206/30/209/30/2012/31/2020203/31/216/30/219/30/2112/31/21 2021 3/31/226/30/22
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 
[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 
Revenue from Continuing Operations Growth Rate Y/Y1.5 %3.5 %-11.5 %-17.6 %-6.3 %-17.2 %-17.1 %
Standalone AT&T Revenue Growth Rate Y/Y4.8 %6.6 %3.9 %2.2 %4.3 %2.5 %2.2 %
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Operations and Support Expenses3/31/206/30/209/30/2012/31/2020203/31/216/30/219/30/2112/31/2120213/31/226/30/22
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 
[I]Non-GAAP Adjustments720 (854)32 (15,573)(15,675)(1)70 (109)(86)(126)(191)(924)
Adjusted Operations and Support Expenses from Continuing Operations23,089 22,457 23,765 27,169 96,480 24,216 23,809 20,523 21,615 90,163 19,522 19,313 
[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 businesses76 86 76 84 322 15 19 16 (4)46 — — 
[C]Add: DTV-related retained costs350 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 
Operations and Support Expenses from Continuing Operations Growth Rate Y/Y8.3 %1.8 %-13.1 %-49.2 %-19.5 %-18.6 %-14.8 %
Adjusted Operations and Support Expenses from Continuing Operations Growth Rate Y/Y4.9 %6.0 %-13.6 %-20.4 %-6.5 %-19.4 %-18.9 %
Standalone AT&T Adjusted Operations and Support Expenses Growth Rate Y/Y8.7 %11.7 %4.6 %2.7 %6.7 %3.9 %2.5 %
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Depreciation and Amortization Expense3/31/206/30/209/30/2012/31/2020203/31/216/30/219/30/2112/31/2120213/31/226/30/22
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 
[I]Non-GAAP Adjustments(913)(878)(839)(811)(3,441)(85)(28)(28)(28)(169)(27)(17)
Adjusted Depreciation and Amortization Expense from Continuing Operations4,792 4,777 4,771 4,742 19,082 4,381 4,401 4,429 4,472 17,683 4,435 4,433 
[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 costs180 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 
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 %
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 %
Standalone AT&T Adjusted Depreciation and Amortization Expense Growth Rate Y/Y0.5 %1.7 %1.3 %1.7 %1.3 %0.9 %0.0 %
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Operating Income3/31/206/30/209/30/2012/31/2020203/31/216/30/219/30/2112/31/2120213/31/226/30/22
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 
[I]Non-GAAP Adjustments193 1,732 807 16,384 19,116 86 (42)137 114 295 218 941 
Adjusted Operating Income from Continuing Operations7,476 7,293 6,871 5,848 27,488 7,280 7,530 6,374 5,008 26,192 5,755 5,897 
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 $5,897 
Operating Income from Continuing Operations Growth Rate Y/Y-1.2 %36.2 %2.9 %146.5 %209.3 %-23.0 %-34.5 %
Adjusted Operating Income Growth Rate Y/Y-2.6 %3.2 %-7.2 %-14.4 %-4.7 %-20.9 %-21.7 %
Standalone AT&T Adjusted Operating Income Growth Rate Y/Y-3.1 %-4.0 %3.6 %0.6 %-0.9 %-0.7 %3.1 %
Operating Income Margin from Continuing Operations20.6 %16.1 %17.1 %-27.9 %5.9 %20.1 %21.2 %19.9 %15.7 %19.3 %18.6 %16.7 %
Adjusted Operating Income Margin21.1 %21.1 %19.4 %15.5 %19.2 %20.3 %21.1 %20.3 %16.1 %19.5 %19.4 %19.9 %
Standalone AT&T Adjusted Operating Income Margin21.6 %21.9 %19.9 %16.4 %19.9 %20.0 %19.7 %19.9 %16.1 %18.9 %19.4 %19.9 %
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Other Income (Expense)3/31/206/30/209/30/2012/31/2020203/31/216/30/219/30/2112/31/2120213/31/226/30/22
Interest expense$(1,963)$(1,990)$(1,923)$(1,851)$(7,727)$(1,823)$(1,640)$(1,627)$(1,626)$(6,716)$(1,626)$(1,502)
Equity in net income (loss) of affiliates— 10 29 50 89 (6)(18)183 444 603 521 504 
Other income (expense) - net827 1,161 (211)(2,865)(1,088)4,230 1,206 1,522 2,429 9,387 2,157 2,302 
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 
[I]Non-GAAP Adjustments293 (26)1,225 3,962 5,454 (2,968)(16)18 (769)(3,735)(545)(635)
Adjusted Other Income (Expense) from Continuing Operations(843)(845)(880)(704)(3,272)(567)(468)96 478 (461)507 669 
[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 investment971 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 
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Income From Continuing Operations3/31/206/30/209/30/2012/31/2020203/31/216/30/219/30/2112/31/2120213/31/226/30/22
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 
[I]Non-GAAP Adjustments383 1,330 1,645 17,485 20,843 (2,276)(307)153 (764)(3,194)(224)347 
Adjusted Income from Continuing Operations5,232 5,029 4,849 4,211 19,321 5,310 5,662 5,172 4,438 20,582 4,925 5,098 
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 investment971 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 Income4,819 4,651 4,450 3,909 17,829 4,720 4,978 4,939 4,441 19,078 4,925 5,098 
Less: Income from Continuing Operations attributable to Noncontrolling Interest(361)(384)(357)(368)(1,470)(394)(387)(356)(348)(1,485)(354)(380)
Less: Preferred Stock Dividends(32)(52)(54)(55)(193)(50)(56)(50)(51)(207)(48)(52)
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 
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 
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 
[J]Continuing Operations Adjusted Diluted$0.68 $0.73 $0.66 $0.56 $2.63 $0.63 $0.65 
[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 
Weighted Average Common Shares Outstanding7,187 7,145 7,147 7,150 7,157 7,161 7,168 7,171 7,172 7,168 7,184 7,169 
Weighted Average Common Shares Outstanding with Dilution under ASU 2020-067,455 7,463 7,465 7,480 7,466 7,482 7,484 7,506 7,541 7,503 7,555 7,611 
Weighted Average Common Shares Outstanding with Dilution under historical7,214 7,170 7,173 7,176 7,183 7,188 7,200 7,202 7,204 7,199 7,217 7,212 
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.
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EBITDA2
3/31/206/30/209/30/2012/31/2020203/31/216/30/219/30/2112/31/2120213/31/226/30/22
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 
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 
Interest Expense1,963 1,990 1,923 1,851 7,727 1,823 1,640 1,627 1,626 6,716 1,626 1,502 
Equity in Net Income (Loss) of Affiliates— (10)(29)(50)(89)6 18 (183)(444)(603)(521)(504)
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)
Depreciation and amortization5,705 5,655 5,610 5,553 22,523 4,466 4,429 4,457 4,500 17,852 4,462 4,450 
EBITDA12,988 11,216 11,674 (4,983)30,895 11,660 12,001 10,694 9,394 43,749 9,999 9,406 
Non-GAAP Adjustments(720)854 (32)15,573 15,675 1 (70)109 86 126 191 924 
Adjusted EBITDA12,268 12,070 11,642 10,590 46,570 11,661 11,931 10,803 9,480 43,875 10,190 10,330 
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 $10,330 
Adjusted EBITDA Growth Rate Y/Y-4.9 %-1.2 %-7.2 %-10.5 %-5.8 %-12.6 %-13.4 %
Standalone AT&T Adjusted EBITDA Growth Rate Y/Y-1.6 %-1.6 %2.6 %1.1 %0.1 %0.0 %1.7 %
Adjusted EBITDA Margin34.7 %35.0 %32.9 %28.0 %32.6 %32.5 %33.4 %34.5 %30.5 %32.7 %34.3 %34.8 %
Standalone AT&T Adjusted EBITDA Margin37.5 %38.0 %35.6 %30.8 %35.3 %35.2 %35.0 %35.1 %30.5 %33.9 %34.3 %34.8 %
2 EBITDA is operating income before depreciation and amortization. It excludes depreciation and amortization, interest expense, other income (expense) - net and income taxes from net income.
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Free Cash Flow ($B)3
3/31/216/30/219/30/2112/31/2120213/31/226/30/22
Net cash provided by operating activities from Continuing Operations$9.6 $10.2 $9.3 $8.1 $37.2 $7.6 $7.7 
Add: Distributions from DIRECTV classified as investing activities— — — 1.3 1.3 1.3 0.3 
Less: Capital expenditures(3.9)(3.7)(4.5)(3.5)(15.6)(4.6)(4.9)
Less: Cash paid vendor financing(1.7)(1.3)(1.0)(0.6)(4.6)(1.6)(1.8)
Free Cash Flow from Continuing Operations4.0 5.2 3.8 5.3 18.3 2.8 1.4 
[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 May not foot due to rounding. Historical presentation may differ due 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 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:3/31/206/30/209/30/2012/31/2020203/31/216/30/219/30/2112/31/2120213/31/226/30/22
Transaction and other costs$23 $35 $29 $25 $112 $35 $— $8 $(3)$40 $98 $185 
Employee separation costs and benefit-related (gain) loss129 748 (61)(37)779 (34)(70)(3)(20)(127)93 108 
Asset impairments and abandonments and restructuring28 71 — 15,585 15,684 — — 104 109 213 — 631 
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 
Amortization of intangible assets913 878 839 797 3,427 85 28 28 28 169 27 17 
Impairments— — — 14 14 — — — — — — — 
Adjustments to Operating Income193 1,732 807 16,384 19,116 86 (42)137 114 295 218 941 
Other income (expense) net293 (26)1,225 3,962 5,454 (2,968)(16)18 (769)(3,735)(545)(635)
Tax impact of adjustments and discrete items(103)(376)(387)(2,861)(3,727)606 (249)(2)(109)246 103 41 
Adjustments to Net Income$383 $1,330 $1,645 $17,485 $20,843 $(2,276)$(307)$153 $(764)$(3,194)$(224)$347 
[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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