AT&T Reports Third-Quarter Results
AT&T (NYSE: T) reported strong subscriber growth in Q3, adding 708,000 postpaid phone subscribers and over 2.2 million overall. The company also achieved 338,000 net adds in AT&T Fiber, driving a 5.6% increase in wireless service revenues—the best growth in over a decade. Consolidated revenues from continuing operations were $30 billion, with diluted EPS at $0.79. The firm expects adjusted EPS for the full year to exceed $2.50, underpinned by robust cash flow of $3.8 billion.
- 708,000 postpaid phone net adds in Q3, totaling over 2.2 million for the year.
- Wireless service revenues increased by 5.6%, the highest in 10 years.
- AT&T Fiber revenues surged over 30%, with 338,000 net adds.
- Operating cash flow reached $10.1 billion, contributing to $3.8 billion in free cash flow.
- Adjusted EPS guidance raised to over $2.50 for the full year.
- Total revenues from continuing operations decreased by 4.1% year-over-year to $30 billion.
- Business Wireline revenues declined by 4.5% due to lower demand for legacy services.
Continued strong subscriber growth
- 708,000 postpaid phone net adds; 2.2 million-plus through the third quarter, expected to be industry best
- 338,000 AT&T Fiber net adds, second-best quarter ever; 11 straight quarters with more than 200,000 net adds
Subscriber additions driving revenue growth
-
Wireless service revenues up
5.6% — best growth in more than a decade -
Broadband revenues up
6.1% driven by AT&T Fiber revenue growth of more than30%
Network deployment on or ahead of schedule
- Mid-band 5G spectrum covering 100 million people; updating end-of-year target to more than 130 million people
- Ability to serve 18.5 million consumer locations in more than 100 U.S. metro areas with AT&T Fiber
Transformation supporting margin growth
-
On track to achieve more than
$4 billion $6 billion
Third-Quarter Consolidated Results
-
Revenues from continuing operations1 of
$30.0 billion -
Diluted EPS from continuing operations of
$0.79 -
Adjusted EPS* from continuing operations of
$0.68 -
Cash from operating activities from continuing operations of
$10.1 billion -
Capital expenditures from continuing operations of
$5.9 billion $6.8 billion -
Free cash flow* from continuing operations of
$3.8 billion
Note: AT&T’s third-quarter earnings conference call will be webcast at
“We’re investing at record levels to enhance our 5G and fiber connectivity and to deliver the best experience available in the market,” said
“Our disciplined go-to-market approach is helping drive healthy subscriber growth with high-quality customers. As a result, we now expect to achieve wireless service revenue growth in the upper end of the 4.5 percent to 5 percent range. We remain confident in our ability to achieve, or surpass, all our financial commitments for the year, while still investing to bring our customers the industry’s best services.”
Consolidated Financial Results
Revenues from continuing operations for the third quarter totaled
Operating expenses from continuing operations were
Operating income from continuing operations was
Equity in net income (loss) of affiliates of
Income from continuing operations was
Cash from operating activities from continuing operations was
Free cash flow* from continuing operations was
Communications Operational Highlights
Third-quarter revenues were
Mobility
-
Revenues were up
6.0% year over year to$20.3 billion $15.3 billion 5.6% year over year, primarily driven by subscriber and postpaid ARPU growth. Equipment revenues were$4.9 billion 7.2% year over year, driven by increased sales and mix of higher-priced smartphones. -
Operating expenses were
$13.9 billion 5.4% year over year due to higher equipment costs, higher bad debt expense, higher sales costs, increased amortization of customer acquisition costs, higher network costs and the elimination ofCAF II government credits, partly offset by the absence of 3G network shutdown costs versus the third quarter of 2021. -
Operating income was
$6.4 billion 7.2% year over year. Operating income margin was31.7% , compared to31.3% in the year-ago quarter. -
EBITDA* was
$8.5 billion 5.5% year over year with EBITDA margin* of41.7% , down from41.9% a year ago. EBITDA service margin* was55.2% , consistent with the year-ago quarter. -
Total wireless net adds were 7.1 million including:
-
964,000 postpaid net adds with:
- 708,000 postpaid phone net adds
- 26,000 postpaid tablet and other branded computing device net adds
- 230,000 other net adds
- 108,000 prepaid phone net adds
-
964,000 postpaid net adds with:
-
Postpaid churn was
1.01% versus0.92% in the year-ago quarter. -
Postpaid phone churn was
0.84% versus0.72% in the year-ago quarter, due to a return to pre-pandemic consumer behavior as well as recent pricing actions. -
Prepaid churn was less than
3% , with Cricket substantially lower. -
Postpaid phone-only ARPU was
$55.67 2.4% versus the year-ago quarter, due to pricing actions, higher international roaming and a mix shift to higher-priced unlimited plans. -
Internet of Things (IoT) connections, including wholesale, have now reached more than 100 million.
AT&T is an industry leader in IoT and is the firstU.S. carrier to achieve this milestone. It also added more than 1 million connected cars to its network for the 30th consecutive quarter. -
FirstNet® connections reached approximately 4 million across more than 23,000 agencies. FirstNet is the nationwide communications platform dedicated to public safety. The
AT&T and FirstNet networks cover more than99% of theU.S. population, and FirstNet covers more first responders than any other network in America.
Business Wireline
-
Revenues were
$5.7 billion 4.5% year over year due to lower demand for legacy voice and data services and product simplification, partly offset by growth in connectivity services. Additionally, lower revenues from the government sector contributed to the year-over-year decline. The quarter also included approximately$100 million $80 million -
Operating expenses were
$4.8 billion 3.0% year over year due to ongoing operational cost efficiencies, lower costs associated with a retirement benefit plan change and lower amortization of deferred fulfillment costs, partly offset by higher depreciation expense and higher wholesale network access costs. -
Operating income was
$882 million 12.0% , with operating income margin of15.6% compared to16.9% in the year-ago quarter. -
EBITDA* was
$2.2 billion 3.6% year over year with EBITDA margin* of39.2% , compared to38.8% in the year-ago quarter. Third-quarter 2022 EBITDA margin included the impacts from intellectual property sales and a retirement benefit plan change. -
AT&T Business serves the largest global companies, government agencies and small businesses. More than 675,000
U.S. business buildings are lit with fiber fromAT&T , enabling high-speed fiber connections to approximately 3 millionU.S. business customer locations. Nationwide, more than 9.5 million business customer locations are on or within 1,000 feet of our fiber.3
Consumer Wireline
-
Revenues were
$3.2 billion 1.4% year over year due to gains in broadband more than offsetting declines in legacy voice and data and other services. Broadband revenues increased6.1% due to fiber growth of more than30% , partly offset by non-fiber revenue declines of approximately12% . -
Operating expenses were
$2.9 billion 3.6% year over year due to lower network and customer support costs, lower employee-related costs including lower costs associated with a retirement benefit plan change, lower HBO Max licensing fees and lower amortization of deferred fulfillment costs, partly offset by the elimination ofCAF II government credits, higher depreciation expense and higher bad debt expense. -
Operating income was
$330 million 84.4% year over year with operating income margin of10.4% , compared to5.7% in the year-ago quarter. -
EBITDA* was
$1.1 billion 18.4% year over year with EBITDA margin* of35.5% , up from30.4% in the year-ago quarter. - Total broadband losses, excluding DSL, were 29,000, reflecting AT&T Fiber net adds of 338,000, more than offset by losses in non-fiber services. AT&T Fiber now has the ability to serve 18.5 million customer locations, and offers symmetrical speeds up to 5-Gigs across parts of its entire footprint of more than 100 metro areas.
Revenues were
Operating loss was
Total wireless net adds were 298,000, including 267,000 prepaid net adds, 19,000 postpaid net adds and 12,000 reseller net adds.
* Further clarification and explanation of non-GAAP measures and reconciliations to their most comparable GAAP measures can be found in the “Non-GAAP Measures and Reconciliations to GAAP Measures” section of the release and at https://investors.att.com.
© 2022 AT&T Intellectual Property. All rights reserved.
FirstNet and the FirstNet logo are registered trademarks and service marks of the
1 With the closing of the WarnerMedia transaction in
2 Diluted Earnings per Common Share from continuing operations is calculated using Income from continuing operations, less Net Income Attributable to Noncontrolling Interest and Preferred Stock Dividends, divided by the weighted average diluted common shares outstanding for the period.
3 The approximately 3 million
4
About
We help more than 100 million
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T’s filings with the
Non-GAAP Measures and Reconciliations to GAAP Measures
Schedules and reconciliations of non-GAAP financial measures cited in this document to the most directly comparable financial measures under generally accepted accounting principles (GAAP) can be found at https://investors.att.com and in our Form 8-K dated
Adjusted diluted EPS from continuing operations includes adjusting items to revenues and costs that we consider non-operational in nature, including items arising from asset acquisitions or dispositions. We adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income. The tax impact of adjusting items is calculated using the effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate, in these cases we use the actual tax expense or combined marginal rate of approximately
For 3Q22, Adjusted EPS from continuing operations of
For 3Q21, Adjusted EPS from continuing operations of
The company expects adjustments to 2022 reported diluted EPS from continuing operations to include the proportionate share of intangible amortization at the DIRECTV equity method investment in the range of
Capital investment from continuing operations is a non-GAAP financial measure that provides an additional view of cash paid for capital investment to provide a comprehensive view of cash used to invest in our networks, product developments and support systems. In connection with capital improvements, we negotiate with some of our vendors to obtain favorable payment terms of 120 days or more, referred to as vendor financing, which are excluded from capital expenditures and reported in accordance with GAAP as financing activities. Capital investment from continuing operations includes capital expenditures from continuing operations and cash paid for vendor financing (
Free cash flow from continuing operations for 3Q22 of
For 3Q21, free cash flow from continuing operations of
EBITDA is operating income before depreciation and amortization. EBITDA margin is operating income before depreciation and amortization, divided by total revenues. EBITDA service margin is Operating Income before depreciation and amortization, divided by total service revenues.
Standalone AT&T results reflect the historical operating results of the company presented as continuing operations, and also excludes
Operating Revenues of standalone
Adjusted Operating Income of standalone
Standalone AT&T Adjusted diluted EPS for 3Q21 of
Adjusted Operating Income from continuing operations is Operating Income from continuing operations adjusted for revenues and costs we consider non-operational in nature, including items arising from asset acquisitions or dispositions. For 3Q22, Adjusted Operating Income from continuing operations of
Adjusted Equity in Net Income from DIRECTV investment of
Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt of
Discussion and Reconciliation of Non-GAAP Measures for Continuing Operations
We believe the following measures are relevant and useful information to investors as they are part of
On
Free Cash Flow
Free cash flow is defined as cash from operations and cash distributions from DIRECTV classified as investing activities minus capital expenditures and cash paid for vendor financing (classified as financing activities). Free cash flow after dividends is defined as cash from operations and cash distributions from DIRECTV, minus capital expenditures, cash paid for vendor financing and dividends on common and preferred shares. Free cash flow dividend payout ratio is defined as the percentage of dividends paid on common and preferred shares to free cash flow. We believe these metrics provide useful information to our investors because management views free cash flow as an important indicator of how much cash is generated by routine business operations, including capital expenditures and vendor financing, and from our continued economic interest in the
Free Cash Flow and Free Cash Flow Dividend Payout Ratio |
|||||||||||||
Dollars in millions |
|
|
|
|
|||||||||
|
Third Quarter |
|
Nine-Month Period |
||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Net cash provided by operating activities from continuing operations1 |
$ |
10,094 |
|
$ |
9,310 |
|
|
$ |
25,464 |
|
$ |
29,093 |
|
Add: Distributions from DIRECTV classified as investing activities |
|
567 |
|
|
— |
|
|
|
2,205 |
|
|
— |
|
Less: Capital expenditures |
|
(5,921 |
) |
|
(4,470 |
) |
|
|
(15,397 |
) |
|
(12,051 |
) |
Less: Cash paid for vendor financing |
|
(900 |
) |
|
(1,019 |
) |
|
|
(4,237 |
) |
|
(4,013 |
) |
Free Cash Flow2 |
|
3,840 |
|
|
3,821 |
|
|
|
8,035 |
|
|
13,029 |
|
|
|
|
|
|
|
||||||||
Less: Dividends paid |
|
(2,010 |
) |
|
(3,748 |
) |
|
|
(7,845 |
) |
|
(11,319 |
) |
Free Cash Flow after Dividends |
$ |
1,830 |
|
$ |
73 |
|
|
$ |
190 |
|
$ |
1,710 |
|
Free Cash Flow Dividend Payout Ratio |
|
52.3 |
% |
|
98.1 |
% |
|
|
97.6 |
% |
|
86.9 |
% |
1 Includes distributions from DIRECTV of |
|||||||||||||
2 For Standalone free cash flow see Exhibit 99.4. |
|||||||||||||
Cash Paid for
In connection with capital improvements, we negotiate with some of our vendors to obtain favorable payment terms of 120 days or more, referred to as vendor financing, which are excluded from capital expenditures and reported in accordance with GAAP as financing activities. We present an additional view of cash paid for capital investment to provide investors with a comprehensive view of cash used to invest in our networks, product developments and support systems.
Cash Paid for |
|||||||||||||||
Dollars in millions |
|
|
|
|
|||||||||||
|
Third Quarter |
|
Nine-Month Period |
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
||
Capital Expenditures |
$ |
(5,921 |
) |
$ |
(4,470 |
) |
|
$ |
(15,397 |
) |
$ |
(12,051 |
) |
||
Cash paid for vendor financing |
|
(900 |
) |
|
(1,019 |
) |
|
|
(4,237 |
) |
|
(4,013 |
) |
||
Cash paid for |
$ |
(6,821 |
) |
$ |
(5,489 |
) |
|
$ |
(19,634 |
) |
$ |
(16,064 |
) |
||
EBITDA
Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies. For
EBITDA service margin is calculated as EBITDA divided by service revenues.
These measures are used by management as a gauge of our success in acquiring, retaining and servicing subscribers because we believe these measures reflect
We believe EBITDA Service Margin (EBITDA as a percentage of service revenues) to be a more relevant measure than EBITDA Margin (EBITDA as a percentage of total revenue) for our Mobility business unit operating margin. We also use wireless service revenues to calculate margin to facilitate comparison, both internally and externally with our wireless competitors, as they calculate their margins using wireless service revenues as well.
There are material limitations to using these non-GAAP financial measures. EBITDA, EBITDA margin and EBITDA service margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies. Furthermore, these performance measures do not take into account certain significant items, including depreciation and amortization, interest expense, tax expense and equity in net income (loss) of affiliates. For market comparability, management analyzes performance measures that are similar in nature to EBITDA as we present it, and considering the economic effect of the excluded expense items independently as well as in connection with its analysis of net income as calculated in accordance with GAAP. EBITDA, EBITDA margin and EBITDA service margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.
EBITDA, EBITDA Margin and EBITDA Service Margin |
|||||||||||||
Dollars in millions |
|
|
|
|
|||||||||
|
Third Quarter |
|
Nine-Month Period |
||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Income from Continuing Operations |
$ |
6,346 |
|
$ |
5,019 |
|
|
$ |
16,246 |
|
$ |
18,574 |
|
Additions: |
|
|
|
|
|
||||||||
Income Tax Expense |
|
908 |
|
|
1,296 |
|
|
|
3,857 |
|
|
4,456 |
|
Interest Expense |
|
1,420 |
|
|
1,627 |
|
|
|
4,548 |
|
|
5,090 |
|
Equity in Net (Income) Loss of Affiliates |
|
(392 |
) |
|
(183 |
) |
|
|
(1,417 |
) |
|
(159 |
) |
Other (Income) Expense - Net |
|
(2,270 |
) |
|
(1,522 |
) |
|
|
(6,729 |
) |
|
(6,958 |
) |
Depreciation and amortization |
|
4,514 |
|
|
4,457 |
|
|
|
13,426 |
|
|
13,352 |
|
EBITDA |
|
10,526 |
|
|
10,694 |
|
|
|
29,931 |
|
|
34,355 |
|
Transaction and other costs |
|
58 |
|
|
8 |
|
|
|
341 |
|
|
43 |
|
Benefit-related (gain) loss and other employee costs |
|
16 |
|
|
(4 |
) |
|
|
217 |
|
|
(108 |
) |
Assets impairments and abandonment and restructuring |
|
114 |
|
|
105 |
|
|
|
745 |
|
|
105 |
|
Adjusted EBITDA1 |
$ |
10,714 |
|
$ |
10,803 |
|
|
$ |
31,234 |
|
$ |
34,395 |
|
Less: Video and Other dispositions |
|
— |
|
|
(568 |
) |
|
|
— |
|
|
(3,811 |
) |
Standalone AT&T Adjusted EBITDA2 |
$ |
10,714 |
|
$ |
10,235 |
|
|
$ |
31,234 |
|
$ |
30,584 |
|
1 See page 5 for additional discussion and reconciliation of adjusted items. |
|||||||||||||
2 See Exhibit 99.4 for reconciliation of Standalone AT&T Adjusted EBITDA. |
|||||||||||||
Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin |
|||||||||||||
Dollars in millions |
|
|
|
|
|||||||||
|
Third Quarter |
|
Nine-Month Period |
||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Communications Segment |
|||||||||||||
Operating Income |
$ |
7,631 |
|
$ |
7,168 |
|
|
$ |
21,886 |
|
$ |
21,983 |
|
Additions: |
|
|
|
|
|
||||||||
Depreciation and amortization |
|
4,184 |
|
|
4,114 |
|
|
|
12,423 |
|
|
12,253 |
|
EBITDA |
|
11,815 |
|
|
11,282 |
|
|
|
34,309 |
|
|
34,236 |
|
|
|
|
|
|
|
||||||||
Total Operating Revenues |
|
29,131 |
|
|
28,218 |
|
|
|
86,702 |
|
|
84,524 |
|
|
|
|
|
|
|
||||||||
Operating Income Margin |
|
26.2 |
% |
|
25.4 |
% |
|
|
25.2 |
% |
|
26.0 |
% |
EBITDA Margin |
|
40.6 |
% |
|
40.0 |
% |
|
|
39.6 |
% |
|
40.5 |
% |
Mobility |
|||||||||||||
Operating Income |
$ |
6,419 |
|
$ |
5,987 |
|
|
$ |
18,484 |
|
$ |
18,038 |
|
Additions: |
|
|
|
|
|
||||||||
Depreciation and amortization |
|
2,042 |
|
|
2,035 |
|
|
|
6,118 |
|
|
6,072 |
|
EBITDA |
|
8,461 |
|
|
8,022 |
|
|
|
24,602 |
|
|
24,110 |
|
|
|
|
|
|
|
||||||||
Total Operating Revenues |
|
20,278 |
|
|
19,138 |
|
|
|
60,279 |
|
|
57,108 |
|
Service Revenues |
|
15,337 |
|
|
14,527 |
|
|
|
45,065 |
|
|
42,921 |
|
|
|
|
|
|
|
||||||||
Operating Income Margin |
|
31.7 |
% |
|
31.3 |
% |
|
|
30.7 |
% |
|
31.6 |
% |
EBITDA Margin |
|
41.7 |
% |
|
41.9 |
% |
|
|
40.8 |
% |
|
42.2 |
% |
EBITDA Service Margin |
|
55.2 |
% |
|
55.2 |
% |
|
|
54.6 |
% |
|
56.2 |
% |
Business Wireline |
|||||||||||||
Operating Income |
$ |
882 |
|
$ |
1,002 |
|
|
$ |
2,451 |
|
$ |
3,151 |
|
Additions: |
|
|
|
|
|
||||||||
Depreciation and amortization |
|
1,342 |
|
|
1,304 |
|
|
|
3,954 |
|
|
3,875 |
|
EBITDA |
|
2,224 |
|
|
2,306 |
|
|
|
6,405 |
|
|
7,026 |
|
|
|
|
|
|
|
||||||||
Total Operating Revenues |
|
5,668 |
|
|
5,938 |
|
|
|
16,903 |
|
|
18,036 |
|
|
|
|
|
|
|
||||||||
Operating Income Margin |
|
15.6 |
% |
|
16.9 |
% |
|
|
14.5 |
% |
|
17.5 |
% |
EBITDA Margin |
|
39.2 |
% |
|
38.8 |
% |
|
|
37.9 |
% |
|
39.0 |
% |
Consumer Wireline |
|||||||||||||
Operating Income |
$ |
330 |
|
$ |
179 |
|
|
$ |
951 |
|
$ |
794 |
|
Additions: |
|
|
|
|
|
||||||||
Depreciation and amortization |
|
800 |
|
|
775 |
|
|
|
2,351 |
|
|
2,306 |
|
EBITDA |
|
1,130 |
|
|
954 |
|
|
|
3,302 |
|
|
3,100 |
|
|
|
|
|
|
|
||||||||
Total Operating Revenues |
|
3,185 |
|
|
3,142 |
|
|
|
9,520 |
|
|
9,380 |
|
|
|
|
|
|
|
||||||||
Operating Income Margin |
|
10.4 |
% |
|
5.7 |
% |
|
|
10.0 |
% |
|
8.5 |
% |
EBITDA Margin |
|
35.5 |
% |
|
30.4 |
% |
|
|
34.7 |
% |
|
33.0 |
% |
|
|
|
|
|
|
||||||||
Latin America Segment - |
|
|
|
|
|
||||||||
Operating Income |
$ |
(63 |
) |
$ |
(130 |
) |
|
$ |
(247 |
) |
$ |
(393 |
) |
Additions: |
|
|
|
|
|
||||||||
Depreciation and amortization |
|
164 |
|
|
157 |
|
|
|
494 |
|
|
452 |
|
EBITDA |
|
101 |
|
|
27 |
|
|
|
247 |
|
|
59 |
|
|
|
|
|
|
|
||||||||
Total Operating Revenues |
|
785 |
|
|
724 |
|
|
|
2,283 |
|
|
2,043 |
|
|
|
|
|
|
|
||||||||
Operating Income Margin |
|
-8.0 |
% |
|
-18.0 |
% |
|
|
-10.8 |
% |
|
-19.2 |
% |
EBITDA Margin |
|
12.9 |
% |
|
3.7 |
% |
|
|
10.8 |
% |
|
2.9 |
% |
Adjusting Items
Adjusting items include revenues and costs we consider non-operational in nature, including items arising from asset acquisitions or dispositions. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often-significant impact on our results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses). Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income. Prior periods have been recast for consistency to include gains on benefit-related and other cost investments.
The tax impact of adjusting items is calculated using the effective tax rate during the quarter except for adjustments that, given their magnitude, can drive a change in the effective tax rate, in these cases we use the actual tax expense or combined marginal rate of approximately
Adjusting Items |
|||||||||||||
Dollars in millions |
|
|
|
|
|||||||||
|
Third Quarter |
|
Nine-Month Period |
||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Operating Expenses |
|
|
|
|
|
||||||||
Transaction and other costs |
$ |
58 |
|
$ |
8 |
|
|
$ |
341 |
|
$ |
43 |
|
Benefit-related (gain) loss and other employee-related costs |
|
16 |
|
|
(4 |
) |
|
|
217 |
|
|
(108 |
) |
Assets impairments and abandonment and restructuring |
|
114 |
|
|
105 |
|
|
|
745 |
|
|
105 |
|
Adjustments to Operations and Support Expenses |
|
188 |
|
|
109 |
|
|
|
1,303 |
|
|
40 |
|
Amortization of intangible assets |
|
16 |
|
|
28 |
|
|
|
60 |
|
|
142 |
|
Adjustments to Operating Expenses |
|
204 |
|
|
137 |
|
|
|
1,363 |
|
|
182 |
|
Other |
|
|
|
|
|
||||||||
DIRECTV intangible amortization (proportionate share) |
|
376 |
|
|
392 |
|
|
|
1,188 |
|
|
392 |
|
Benefit-related (gain) loss, transaction financing costs and other |
|
416 |
|
|
— |
|
|
|
822 |
|
|
(337 |
) |
Actuarial (gain) loss |
|
(1,440 |
) |
|
(374 |
) |
|
|
(3,838 |
) |
|
(3,021 |
) |
Adjustments to Income Before Income Taxes |
|
(444 |
) |
|
155 |
|
|
|
(465 |
) |
|
(2,784 |
) |
Tax impact of adjustments |
|
(135 |
) |
|
2 |
|
|
|
(200 |
) |
|
(723 |
) |
Tax-related items |
|
727 |
|
|
— |
|
|
|
648 |
|
|
368 |
|
Adjustments to Net Income |
$ |
(1,036 |
) |
$ |
153 |
|
|
$ |
(913 |
) |
$ |
(2,429 |
) |
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, actuarial gains and losses, significant abandonments and impairment, benefit-related gains and losses, employee separation and other material gains and losses. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.
Adjusted Operating Revenues, Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, and Adjusted EBITDA Margin |
|||||||||||||
Dollars in millions |
|
|
|
|
|||||||||
|
Third Quarter |
|
Nine-Month Period |
||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Operating Income |
$ |
6,012 |
|
$ |
6,237 |
|
|
$ |
16,505 |
|
$ |
21,003 |
|
Adjustments to Operating Expenses |
|
204 |
|
|
137 |
|
|
|
1,363 |
|
|
182 |
|
Adjusted Operating Income |
|
6,216 |
|
|
6,374 |
|
|
|
17,868 |
|
|
21,185 |
|
|
|
|
|
|
|
||||||||
EBITDA |
|
10,526 |
|
|
10,694 |
|
|
|
29,931 |
|
|
34,355 |
|
Adjustments to Operations and Support Expenses |
|
188 |
|
|
109 |
|
|
|
1,303 |
|
|
40 |
|
Adjusted EBITDA |
|
10,714 |
|
|
10,803 |
|
|
|
31,234 |
|
|
34,395 |
|
|
|
|
|
|
|
||||||||
Total Operating Revenues |
|
30,043 |
|
|
31,326 |
|
|
|
89,398 |
|
|
102,943 |
|
|
|
|
|
|
|
||||||||
Operating Income Margin |
|
20.0 |
% |
|
19.9 |
% |
|
|
18.5 |
% |
|
20.4 |
% |
Adjusted Operating Income Margin |
|
20.7 |
% |
|
20.3 |
% |
|
|
20.0 |
% |
|
20.6 |
% |
Adjusted EBITDA Margin |
|
35.7 |
% |
|
34.5 |
% |
|
|
34.9 |
% |
|
33.4 |
% |
Adjusted Diluted EPS |
|||||||||||||
|
Third Quarter |
|
Nine-Month Period |
||||||||||
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Diluted Earnings Per Share (EPS) |
$ |
0.79 |
|
$ |
0.63 |
|
|
$ |
2.03 |
|
$ |
2.37 |
|
DIRECTV intangible amortization (proportionate share) |
|
0.04 |
|
|
0.04 |
|
|
|
0.12 |
|
|
0.04 |
|
Actuarial (gain) loss1 |
|
(0.14 |
) |
|
(0.04 |
) |
|
|
(0.38 |
) |
|
(0.30 |
) |
Restructuring and impairments |
|
0.01 |
|
|
0.01 |
|
|
|
0.08 |
|
|
0.01 |
|
Benefit-related, transaction and other costs1, 2 |
|
0.08 |
|
|
0.02 |
|
|
|
0.19 |
|
|
— |
|
Tax-related items |
|
(0.10 |
) |
|
— |
|
|
|
(0.09 |
) |
|
(0.05 |
) |
Adjusted EPS |
$ |
0.68 |
|
$ |
0.66 |
|
|
$ |
1.95 |
|
$ |
2.07 |
|
Less: Video and Other dispositions |
|
— |
|
|
(0.04 |
) |
|
|
— |
|
|
(0.22 |
) |
Standalone AT&T Adjusted EPS3 |
$ |
0.68 |
|
$ |
0.62 |
|
|
$ |
1.95 |
|
$ |
1.85 |
|
Year-over-year growth - Adjusted |
|
9.7 |
% |
|
|
|
5.4 |
% |
|
||||
Weighted Average Common Shares Outstanding with Dilution (000,000) |
|
7,647 |
|
|
7,506 |
|
|
|
7,605 |
|
|
7,491 |
|
1 |
Includes adjustments for actuarial gains or losses associated with our pension and postretirement benefit plans, which we immediately recognize in the income statement, pursuant to our accounting policy for the recognition of actuarial gains/losses. We recorded total net actuarial gains of |
2 |
As of |
3 |
See Exhibit 99.4 for reconciliation of Standalone AT&T Adjusted EPS. |
Net Debt to Adjusted EBITDA
Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and management believes these measures provide relevant and useful information to investors and other users of our financial data. Our Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters Adjusted EBITDA. Net Debt is calculated by subtracting cash and cash equivalents and certificates of deposit and time deposits that are greater than 90 days, from the sum of debt maturing within one year and long-term debt.
Net Debt to Adjusted EBITDA - 2022 |
||||||||||||||
Dollars in millions |
|
|
|
|
|
|||||||||
|
Three Months Ended |
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
Four Quarters |
|||||
|
20211 |
|
20221 |
|
20221 |
|
20221 |
|
||||||
Adjusted EBITDA |
$ |
9,480 |
|
$ |
10,190 |
|
$ |
10,330 |
|
$ |
10,714 |
|
$ |
40,714 |
End-of-period current debt |
|
|
|
|
|
|
|
|
|
9,626 |
||||
End-of-period long-term debt |
|
|
|
|
|
|
|
|
|
123,854 |
||||
Total End-of-Period Debt |
|
|
|
|
|
|
|
|
|
133,480 |
||||
Less: Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
2,423 |
||||
Net Debt Balance |
|
|
|
|
|
|
|
|
|
131,057 |
||||
Annualized Net Debt to Adjusted EBITDA Ratio |
|
|
|
|
|
|
|
|
|
3.22 |
||||
1 As reported in Exhibit 99.4. |
||||||||||||||
Net Debt to Adjusted EBITDA - 2021 |
||||||||||||||
Dollars in millions |
|
|
|
|
|
|||||||||
|
Three Months Ended |
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
Four Quarters |
|||||
|
20201 |
|
20211 |
|
20211 |
|
20211 |
|
||||||
Adjusted EBITDA |
$ |
10,590 |
|
$ |
11,661 |
|
$ |
11,931 |
|
$ |
10,803 |
|
$ |
44,985 |
End-of-period current debt |
|
|
|
|
|
|
|
|
|
23,712 |
||||
End-of-period long-term debt |
|
|
|
|
|
|
|
|
|
153,652 |
||||
Total End-of-Period Debt |
|
|
|
|
|
|
|
|
|
177,364 |
||||
Less: Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
18,485 |
||||
Net Debt Balance |
|
|
|
|
|
|
|
|
|
158,879 |
||||
Annualized Net Debt to Adjusted EBITDA Ratio |
|
|
|
|
|
|
|
|
|
3.53 |
||||
1 As reported in Exhibit 99.4. |
||||||||||||||
Supplemental Operational Measures
We provide a supplemental discussion of our business solutions operations that is calculated by combining our Mobility and Business Wireline operating units, and then adjusting to remove non-business operations. The following table presents a reconciliation of our supplemental Business Solutions results.
Supplemental Operational Measure |
|||||||||||||||||||
|
Third Quarter |
||||||||||||||||||
|
|
|
|
||||||||||||||||
|
Mobility |
Business Wireline |
Adjustments1 |
Business Solutions |
|
Mobility |
Business Wireline |
Adjustments1 |
Business Solutions |
||||||||||
Operating Revenues |
|
|
|
|
|
|
|
|
|
||||||||||
Wireless service |
$ |
15,337 |
$ |
— |
$ |
(13,115 |
) |
$ |
2,222 |
|
$ |
14,527 |
$ |
— |
$ |
(12,468 |
) |
$ |
2,059 |
Wireline service |
|
— |
|
5,524 |
|
— |
|
|
5,524 |
|
|
— |
|
5,765 |
|
— |
|
|
5,765 |
Wireless equipment |
|
4,941 |
|
— |
|
(4,082 |
) |
|
859 |
|
|
4,611 |
|
— |
|
(3,798 |
) |
|
813 |
Wireline equipment |
|
— |
|
144 |
|
— |
|
|
144 |
|
|
— |
|
173 |
|
— |
|
|
173 |
Total Operating Revenues |
|
20,278 |
|
5,668 |
|
(17,197 |
) |
|
8,749 |
|
|
19,138 |
|
5,938 |
|
(16,266 |
) |
|
8,810 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses |
|
|
|
|
|
|
|
|
|
||||||||||
Operations and support |
|
11,817 |
|
3,444 |
|
(9,730 |
) |
|
5,531 |
|
|
11,116 |
|
3,632 |
|
(9,167 |
) |
|
5,581 |
EBITDA |
|
8,461 |
|
2,224 |
|
(7,467 |
) |
|
3,218 |
|
|
8,022 |
|
2,306 |
|
(7,099 |
) |
|
3,229 |
Depreciation and amortization |
|
2,042 |
|
1,342 |
|
(1,685 |
) |
|
1,699 |
|
|
2,035 |
|
1,304 |
|
(1,688 |
) |
|
1,651 |
Total Operating Expenses |
|
13,859 |
|
4,786 |
|
(11,415 |
) |
|
7,230 |
|
|
13,151 |
|
4,936 |
|
(10,855 |
) |
|
7,232 |
Operating Income |
|
6,419 |
|
882 |
|
(5,782 |
) |
|
1,519 |
|
|
5,987 |
|
1,002 |
|
(5,411 |
) |
|
1,578 |
1 Non-business wireless reported in the Communications segment under the Mobility business unit. |
|||||||||||||||||||
Results have been recast to conform to the current period's classification. |
|||||||||||||||||||
Supplemental Operational Measure |
|||||||||||||||||||
|
Nine-Month Period |
||||||||||||||||||
|
|
|
|
||||||||||||||||
|
Mobility |
Business Wireline |
Adjustments1 |
Business Solutions |
|
Mobility |
Business Wireline |
Adjustments1 |
Business Solutions |
||||||||||
Operating Revenues |
|
|
|
|
|
|
|
|
|
||||||||||
Wireless service |
$ |
45,065 |
$ |
— |
$ |
(38,534 |
) |
$ |
6,531 |
|
$ |
42,921 |
$ |
— |
$ |
(36,868 |
) |
$ |
6,053 |
Wireline service |
|
— |
|
16,418 |
|
— |
|
|
16,418 |
|
|
— |
|
17,497 |
|
— |
|
|
17,497 |
Wireless equipment |
|
15,214 |
|
— |
|
(12,582 |
) |
|
2,632 |
|
|
14,187 |
|
— |
|
(11,803 |
) |
|
2,384 |
Wireline equipment |
|
— |
|
485 |
|
— |
|
|
485 |
|
|
— |
|
539 |
|
— |
|
|
539 |
Total Operating Revenues |
|
60,279 |
|
16,903 |
|
(51,116 |
) |
|
26,066 |
|
|
57,108 |
|
18,036 |
|
(48,671 |
) |
|
26,473 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses |
|
|
|
|
|
|
|
|
|
||||||||||
Operations and support |
|
35,677 |
|
10,498 |
|
(29,352 |
) |
|
16,823 |
|
|
32,998 |
|
11,010 |
|
(27,265 |
) |
|
16,743 |
EBITDA |
|
24,602 |
|
6,405 |
|
(21,764 |
) |
|
9,243 |
|
|
24,110 |
|
7,026 |
|
(21,406 |
) |
|
9,730 |
Depreciation and amortization |
|
6,118 |
|
3,954 |
|
(5,047 |
) |
|
5,025 |
|
|
6,072 |
|
3,875 |
|
(5,044 |
) |
|
4,903 |
Total Operating Expenses |
|
41,795 |
|
14,452 |
|
(34,399 |
) |
|
21,848 |
|
|
39,070 |
|
14,885 |
|
(32,309 |
) |
|
21,646 |
Operating Income |
|
18,484 |
|
2,451 |
|
(16,717 |
) |
|
4,218 |
|
|
18,038 |
|
3,151 |
|
(16,362 |
) |
|
4,827 |
1 Non-business wireless reported in the Communications segment under the Mobility business unit. |
|||||||||||||||||||
Results have been recast to conform to the current period's classification. |
|||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20221019006160/en/
For more information, contact:
Phone: (214) 912-8541
Email: fletcher.cook@att.com
Phone: (214) 202-6630
Email: brittany.a.siwald@att.com
Source:
FAQ
What were AT&T's Q3 2022 earnings results?
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