Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Information

NOTE 4. SEGMENT INFORMATION

Our segments are comprised of strategic business units or other operations that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly. We have two reportable segments: Communications and Latin America.

We also evaluate segment and business unit performance based on EBITDA and/or EBITDA margin, which is defined as operating income excluding depreciation and amortization. EBITDA is used as part of our management reporting and we believe EBITDA to be a relevant and useful measurement to our investors as it measures the cash generation potential of our business units. EBITDA does not give effect to depreciation and amortization expenses incurred in operating income nor is it burdened by cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA margin is EBITDA divided by total revenue.

Effective for the first quarter of 2023, we stopped recording prior service credits to our individual business units or the corresponding charge to Corporate and Other, and segment operating expenses were recast to remove prior service credits from our historical reporting. Prior service credits are, and will continue to be, recorded as other income in our consolidated income statement in accordance with GAAP. This recast increased Communications segment operations and support expenses by approximately $2,400 for full-year 2022. Correspondingly, this recast lowered administrative expenses within Corporate and Other, with no change on a consolidated basis.

The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the U.S. and businesses globally. Our business strategies reflect bundled product offerings that cut across product lines and utilize shared assets. This segment contains the following business units:

•Mobility provides nationwide wireless service and equipment.

•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.

•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.

The Latin America segment provides wireless services and equipment in Mexico.

Corporate and Other reconciles our segment results to consolidated operating income and income before income taxes.

Corporate includes:

•DTV-related retained costs, which are costs previously allocated to the Video business that were retained after the transaction, net of reimbursements from DIRECTV under transition service agreements.

•Parent administration support, which includes costs borne by AT&T where the business units do not influence decision making.

•Securitization fees associated with our sales of receivables (see Note 8).

•Value portfolio, which are businesses no longer integral to our operations or which we no longer actively market.

Other items consist of:

•Certain significant items, which includes items associated with the merger and integration of acquired or divested businesses, including amortization of intangible assets, employee separation charges associated with voluntary and/or strategic offers, asset impairments and abandonments, and other items for which the segments are not being evaluated.

“Interest expense” and “Other income (expense) – net” are managed only on a total company basis and are, accordingly, reflected only in consolidated results.

For the three months ended 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

For the three months ended 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

For the nine months ended 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

For the nine months ended 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

The following table is a reconciliation of Segment Operating Income to “Income from Continuing Operations Before Income Taxes” reported in our consolidated statements of income:

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Communications	$	7,273	$	6,989	$	21,193	$	20,159
Latin America	(29)		(63)		(98)		(247)
Segment Operating Income	7,244		6,926		21,095		19,912
Reconciling Items:
Corporate	(725)		(710)		(2,206)		(2,044)
Transaction and other costs	(72)		(58)		(72)		(341)
Amortization of intangibles acquired	(21)		(16)		(55)		(60)
Asset impairments and abandonments and restructuring	(604)		(114)		(604)		(745)
Benefit-related gains (losses)	(40)		(16)		32		(217)
AT&T Operating Income	5,782		6,012		18,190		16,505
Interest expense	1,662		1,420		4,978		4,548
Equity in net income of affiliates	420		392		1,338		1,417
Other income (expense) — net	440		2,270		2,362		6,729
Income from Continuing Operations Before Income Taxes	$	4,980	$	7,254	$	16,912	$	20,103