T 8-K

At&T Inc. (T)

8-K 2022-07-21 For: 2022-07-21

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☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


(d)	Exhibits

	99.1	Press release dated July 21, 2022 reporting financial results for the second quarter ended June 3 0 , 2022.

	99.2	AT&T Inc. selected financial statements and operating data.

	99.3	Discussion and reconciliation of non-GAAP measures.

	99.4	Supplemental Quarterly Standalone AT&T Financial Information

	104	Cover Page Interactive Data File (embedded within the Inline XBRL document)


AT&T Inc.
Financial Data

Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Second Quarter				Percent		Six-Month Period				Percent
	2022		2021		Change		2022		2021		Change
Operating Revenues
Service	$	24,268	$	30,651	(20.8)	%	$	48,267	$	61,093	(21.0)	%
Equipment	5,375		5,089		5.6	%	11,088		10,524		5.4	%
Total Operating Revenues	29,643		35,740		(17.1)	%	59,355		71,617		(17.1)	%

Operating Expenses
Cost of revenues
Equipment	5,534		5,315		4.1	%	11,570		10,841		6.7	%
Broadcast, programming and operations	—		3,397		—	%	—		6,989		—	%
Other cost of revenues (exclusive of depreciation and amortization shown separately below)	6,807		7,446		(8.6)	%	13,506		14,919		(9.5)	%
Selling, general and administrative	7,265		7,581		(4.2)	%	14,243		15,207		(6.3)	%
Asset impairments and abandonments and restructuring	631		—		—	%	631		—		—	%
Depreciation and amortization	4,450		4,429		0.5	%	8,912		8,895		0.2	%
Total Operating Expenses	24,687		28,168		(12.4)	%	48,862		56,851		(14.1)	%
Operating Income	4,956		7,572		(34.5)	%	10,493		14,766		(28.9)	%
Interest Expense	1,502		1,640		(8.4)	%	3,128		3,463		(9.7)	%
Equity in Net Income (Loss) of Affiliates	504		(18)		—	%	1,025		(24)		—	%
Other Income (Expense) — Net	2,302		1,206		90.9	%	4,459		5,436		(18.0)	%
Income from Continuing Operations Before Income Taxes	6,260		7,120		(12.1)	%	12,849		16,715		(23.1)	%
Income tax expense on continuing operations	1,509		1,151		31.1	%	2,949		3,160		(6.7)	%
Income From Continuing Operations	4,751		5,969		(20.4)	%	9,900		13,555		(27.0)	%
Income (loss) from discontinued operations, net of tax	(214)		(4,095)		94.8	%	(199)		(3,739)		94.7	%
Net Income	4,537		1,874		—	%	9,701		9,816		(1.2)	%
Less: Net Income Attributable to Noncontrolling Interest	(380)		(304)		(25.0)	%	(734)		(696)		(5.5)	%
Net Income Attributable to AT&T	$	4,157	$	1,570	—	%	$	8,967	$	9,120	(1.7)	%
Less: Preferred Stock Dividends	(52)		(56)		7.1	%	(100)		(106)		5.7	%
Net Income Attributable to Common Stock	$	4,105	$	1,514	—	%	$	8,867	$	9,014	(1.6)	%

Basic Earnings Per Share Attributable to Common Stock
From continuing operations	$	0.60	$	0.77	(22.1)	%	$	1.26	$	1.76	(28.4)	%
From discontinued operations	$	(0.03)	$	(0.56)	94.6	%	$	(0.03)	$	(0.51)	94.1	%
	$	0.57	$	0.21	—	%	$	1.23	$	1.25	(1.6)	%
Weighted Average Common Shares Outstanding (000,000)	7,169		7,168		—	%	7,176		7,165		0.2	%
Diluted Earnings Per Share Attributable to Common Stock 1
From continuing operations	$	0.59	$	0.76	(22.4)	%	$	1.23	$	1.73	(28.9)	%
From discontinued operations	$	(0.03)	$	(0.54)	94.4	%	$	(0.02)	$	(0.49)	95.9	%
	$	0.56	$	0.22	—	%	$	1.21	$	1.24	(2.4)	%
Weighted Average Common Shares Outstanding with Dilution (000,000) 1	7,611		7,484		1.7	%	7,584		7,483		1.3	%
1Reflects retrospective adoption of Accounting Standards Update (ASU) No. 2020-06


AT&T Inc.
Financial Data

Consolidated Balance Sheets
Dollars in millions
Unaudited	Jun. 30,		Dec. 31,
	2022		2021
Assets
Current Assets
Cash and cash equivalents	$	4,018	$	19,223
Accounts receivable – net of related allowances for credit loss of $655 and $658	11,377		12,313
Inventories	3,241		3,325
Prepaid and other current assets	15,764		16,131
Assets from discontinued operations	85		119,776
Total current assets	34,485		170,768

Property, Plant and Equipment – Net	125,135		121,649
Goodwill	92,746		92,740
Licenses – Net	123,557		113,830


Other Intangible Assets – Net	5,371		5,391
Investments in and Advances to Equity Affiliates	4,523		6,168
Operating Lease Right-Of-Use Assets	21,808		21,824

Other Assets	18,808		19,252
Total Assets	$	426,433	$	551,622
Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	6,210	$	24,620
Note payable to DIRECTV	619		1,245
Accounts payable and accrued liabilities	35,459		39,095
Advanced billings and customer deposits	3,603		3,966
Dividends payable	2,013		3,749
Liabilities from discontinued operations	85		33,555
Total current liabilities	47,989		106,230
Long-Term Debt	129,747		151,011
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes	55,301		53,767
Postemployment benefit obligation	9,775		12,560
Operating lease liabilities	18,749		18,956
Other noncurrent liabilities	28,365		25,243

Total deferred credits and other noncurrent liabilities	112,190		110,526
Stockholders’ Equity
Preferred stock	—		—
Common stock	7,621		7,621
Additional paid-in capital	124,050		130,112
Retained earnings	2,128		42,350
Treasury stock	(17,160)		(17,280)
Accumulated other comprehensive income	2,307		3,529
Noncontrolling interest	17,561		17,523
Total stockholders’ equity	136,507		183,855
Total Liabilities and Stockholders’ Equity	$	426,433	$	551,622


AT&T Inc.
Financial Data

Consolidated Statements of Cash Flows
Dollars in millions
Unaudited	Six-Month Period
	2022		2021
Operating Activities
Income from continuing operations	$	9,900	$	13,555
Adjustments to reconcile income from continuing operations to net cash provided by operating activities from continuing operations:
Depreciation and amortization	8,912		8,895


Provision for uncollectible accounts	870		606
Deferred income tax expense	2,324		3,525
Net (gain) loss on investments, net of impairments	333		(310)
Pension and postretirement benefit expense (credit)	(1,735)		(1,903)
Actuarial (gain) loss on pension and postretirement benefits	(2,398)		(2,647)
Asset impairments and abandonments and restructuring	631		—
Changes in operating assets and liabilities:
Receivables	1,292		796
Other current assets	11		751
Accounts payable and other accrued liabilities	(3,905)		(4,108)
Equipment installment receivables and related sales	342		811
Deferred customer contract acquisition and fulfillment costs	(506)		394
Postretirement claims and contributions	(186)		(207)
Other - net	(515)		(375)
Total adjustments	5,470		6,228
Net Cash Provided by Operating Activities from Continuing Operations	15,370		19,783

Investing Activities
Capital expenditures	(9,476)		(7,581)
Acquisitions, net of cash acquired	(9,570)		(23,143)
Dispositions	22		375
Distributions from DIRECTV in excess of cumulative equity in earnings	1,638		—
Other - net	75		20
Net Cash Used in Investing Activities from Continuing Operations	(17,311)		(30,329)

Financing Activities
Net change in short-term borrowings with original maturities of three months or less	172		76
Issuance of other short-term borrowings	2,593		16,440
Repayment of other short-term borrowings	(15,613)		(857)
Issuance of long-term debt	479		9,097
Repayment of long-term debt	(24,213)		(1,096)
Repayment of note payable to DIRECTV	(722)		—
Payment of vendor financing	(3,337)		(2,994)
Purchase of treasury stock	(872)		(185)
Issuance of treasury stock	28		85
Dividends paid	(5,835)		(7,571)
Other - net	(2,144)		(892)
Net Cash (Used in) Provided by Financing Activities from Continuing Operations	(49,464)		12,103
Net (decrease) increase in cash and cash equivalents and restricted cash from continuing operations	(51,405)		1,557
Cash flows from Discontinued Operations:
Cash (used in) provided by operating activities	(3,731)		1,054
Cash provided by (used in) investing activities	872		(302)
Cash provided by (used in) financing activities	37,065		(203)
Net increase in cash and cash equivalents and restricted cash from discontinued operations	34,206		549
Net (decrease) increase in cash and cash equivalents and restricted cash	$	(17,199)	$	2,106
Cash and cash equivalents and restricted cash beginning of year	21,316		9,870
Cash and Cash Equivalents and Restricted Cash End of Period	$	4,117	$	11,976


			AT&T INC.



Date: July 21, 2022			By: /s/ Debra L. Dial . Debra L. Dial Senior Vice President - Chief Accounting Officer and Controller


AT&T Inc.
Consolidated Supplementary Data

Supplementary Financial Data
Dollars in millions except per share amounts
Unaudited	Second Quarter				Percent		Six-Month Period						Percent
	2022		2021		Change		2022			2021			Change
Capital expenditures
Purchase of property and equipment	$	4,867	$	3,677	32.4	%	$	9,399		$	7,487		25.5	%
Interest during construction - capital expenditures	41		33		24.2	%	77			94			(18.1)	%
Total Capital Expenditures	$	4,908	$	3,710	32.3	%	$	9,476		$	7,581		25.0	%

Acquisition, net of cash acquired

Spectrum acquisitions	$	8	$	10	(20.0)	%	$	8,964		$	22,886		(60.8)	%
Interest during construction - spectrum	318		257		23.7	%	606			257			—	%
Total Acquisitions	$	326	$	267	22.1	%	$	9,570		$	23,143		(58.6)	%



Dividends Declared per Common Share	$	0.2775	$	0.52	(46.6)	%	$	0.5550		$	1.04		(46.6)	%

End of Period Common Shares Outstanding (000,000)							7,126			7,140			(0.2)	%
Debt Ratio							49.9		%	49.7		%	20	BP
Total Employees							172,400			188,710			(8.6)	%


Segment Results
Dollars in millions
Unaudited	Second Quarter				Percent		Six-Month Period				Percent
	2022		2021		Change		2022		2021		Change
Segment Operating Revenues
Mobility	$	19,926	$	18,936	5.2	%	$	40,001	$	37,970	5.3	%
Business Wireline	5,595		6,052		(7.6)	%	11,235		12,098		(7.1)	%
Consumer Wireline	3,174		3,140		1.1	%	6,335		6,238		1.6	%
Total Segment Operating Revenues	28,695		28,128		2.0	%	57,571		56,306		2.2	%

Operating Income
Mobility	6,212		6,007		3.4	%	12,065		12,051		0.1	%
Business Wireline	710		1,069		(33.6)	%	1,569		2,149		(27.0)	%
Consumer Wireline	304		308		(1.3)	%	621		615		1.0	%
Total Operating Income	$	7,226	$	7,384	(2.1)	%	$	14,255	$	14,815	(3.8)	%


Supplementary Operating Data
Subscribers and connections in thousands
Unaudited					June 30,		Percent
					2022	2021	Change
Broadband Connections
Broadband					15,136	14,988	1.0	%
DSL					373	493	(24.3)	%
Total Broadband Connections					15,509	15,481	0.2	%

Voice Connections
Retail Consumer Switched Access Lines					5,725	6,691	(14.4)	%
U-verse Consumer VoIP Connections					3,124	3,559	(12.2)	%
Total Retail Voice Connections					8,849	10,250	(13.7)	%

	Second Quarter		Percent		Six-Month Period		Percent
	2022	2021	Change		2022	2021	Change
Broadband Net Additions
Broadband	6	80	(92.5)	%	62	170	(63.5)	%
DSL	(30)	(34)	11.8	%	(57)	(73)	21.9	%
Total Broadband Net Additions	(24)	46	—	%	5	97	(94.8)	%


Mobility Results
Dollars in millions
Unaudited	Second Quarter						Percent		Six-Month Period						Percent
	2022			2021			Change		2022			2021			Change
Operating Revenues
Service	$	15,004		$	14,346		4.6	%	$	29,728		$	28,394		4.7	%
Equipment	4,922			4,590			7.2	%	10,273			9,576			7.3	%
Total Operating Revenues	19,926			18,936			5.2	%	40,001			37,970			5.3	%

Operating Expenses
Operations and support	11,697			10,906			7.3	%	23,860			21,882			9.0	%
Depreciation and amortization	2,017			2,023			(0.3)	%	4,076			4,037			1.0	%
Total Operating Expenses	13,714			12,929			6.1	%	27,936			25,919			7.8	%
Operating Income	$	6,212		$	6,007		3.4	%	$	12,065		$	12,051		0.1	%



Operating Income Margin	31.2		%	31.7		%	(50)	BP	30.2		%	31.7		%	(150)	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									June 30,						Percent
									2022			2021			Change
Mobility Subscribers
Postpaid									82,694			79,059			4.6	%
Postpaid phone									68,311			65,503			4.3	%
Prepaid									19,095			18,681			2.2	%
Reseller									5,480			6,406			(14.5)	%
Connected Devices									96,104			87,500			9.8	%
Total Mobility Subscribers1									203,373			191,646			6.1	%
1Wireless subscribers at June 30, 2022 includes a reduction of 10.7 million subscribers and connections (899 postpaid, including 438 phone, 234 prepaid, 749 reseller subscribers, and 8.8 million connected devices) resulting from our 3G network shutdown in February 2022.

	Second Quarter						Percent		Six-Month Period						Percent
	2022			2021			Change		2022			2021			Change
Mobility Net Additions
Postpaid Phone Net Additions	813			789			3.0	%	1,504			1,384			8.7	%
Total Phone Net Additions	1,009			963			4.8	%	1,813			1,765			2.7	%

Postpaid	1,058			1,156			(8.5)	%	2,023			1,979			2.2	%
Prepaid	231			297			(22.2)	%	347			576			(39.8)	%
Reseller	21			(125)			—	%	4			(193)			—	%
Connected Devices	5,292			4,209			25.7	%	9,760			6,726			45.1	%
Total Mobility Net Additions	6,602			5,537			19.2	%	12,134			9,088			33.5	%

Postpaid Churn	0.93		%	0.87		%	6	BP	0.93		%	0.90		%	3 BP
Postpaid Phone-Only Churn	0.75		%	0.69		%	6	BP	0.77		%	0.73		%	4 BP


Business Wireline Results
Dollars in millions
Unaudited	Second Quarter						Percent		Six-Month Period						Percent
	2022			2021			Change		2022			2021			Change
Operating Revenues
Service	$	5,416		$	5,860		(7.6)	%	$	10,894		$	11,732		(7.1)	%
Equipment	179			192			(6.8)	%	341			366			(6.8)	%
Total Operating Revenues	5,595			6,052			(7.6)	%	11,235			12,098			(7.1)	%

Operating Expenses
Operations and support	3,572			3,690			(3.2)	%	7,054			7,378			(4.4)	%
Depreciation and amortization	1,313			1,293			1.5	%	2,612			2,571			1.6	%
Total Operating Expenses	4,885			4,983			(2.0)	%	9,666			9,949			(2.8)	%
Operating Income	$	710		$	1,069		(33.6)	%	$	1,569		$	2,149		(27.0)	%



Operating Income Margin	12.7		%	17.7		%	(500)	BP	14.0		%	17.8		%	(380)	BP


Consumer Wireline Results
Dollars in millions
Unaudited	Second Quarter						Percent		Six-Month Period						Percent
	2022			2021			Change		2022			2021			Change
Operating Revenues
Broadband	$	2,393		$	2,266		5.6	%	$	4,748		$	4,471		6.2	%
Legacy voice and data services	445			504			(11.7)	%	905			1,023			(11.5)	%
Other service and equipment	336			370			(9.2)	%	682			744			(8.3)	%
Total Operating Revenues	3,174			3,140			1.1	%	6,335			6,238			1.6	%

Operating Expenses
Operations and support	2,085			2,063			1.1	%	4,163			4,092			1.7	%
Depreciation and amortization	785			769			2.1	%	1,551			1,531			1.3	%
Total Operating Expenses	2,870			2,832			1.3	%	5,714			5,623			1.6	%
Operating Income	$	304		$	308		(1.3)	%	$	621		$	615		1.0	%



Operating Income Margin	9.6		%	9.8		%	(20)	BP	9.8		%	9.9		%	(10)	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									June 30,						Percent
									2022			2021			Change
Broadband Connections
Total Broadband and DSL Connections									14,105			14,174			(0.5)	%
Broadband									13,825			13,818			0.1	%
Fiber Broadband Connections									6,597			5,432			21.4	%

Voice Connections
Retail Consumer Switched Access Lines									2,228			2,631			(15.3)	%
U-verse Consumer VoIP Connections									2,521			2,965			(15.0)	%
Total Retail Consumer Voice Connections									4,749			5,596			(15.1)	%

	Second Quarter						Percent		Six-Month Period						Percent
	2022			2021			Change		2022			2021			Change
Broadband Net Additions
Total Broadband and DSL Net Additions	(43)			28			—	%	(55)			74			—	%
Broadband	(25)			51			—	%	(20)			125			—	%
Fiber Broadband Net Additions	316			246			28.5	%	605			481			25.8	%


Business Solutions Results
Dollars in millions
Unaudited	Second Quarter						Percent		Six-Month Period						Percent
	2022			2021			Change		2022			2021			Change
Operating Revenues
Wireless service	$	2,175		$	2,025		7.4	%	$	4,309		$	3,994		7.9	%
Wireline service	5,416			5,860			(7.6)	%	10,894			11,732			(7.1)	%
Wireless equipment	874			781			11.9	%	1,773			1,571			12.9	%
Wireline equipment	179			192			(6.8)	%	341			366			(6.8)	%
Total Operating Revenues	8,644			8,858			(2.4)	%	17,317			17,663			(2.0)	%

Operating Expenses
Operations and support	5,684			5,643			0.7	%	11,292			11,162			1.2	%
Depreciation and amortization	1,666			1,638			1.7	%	3,326			3,252			2.3	%
Total Operating Expenses	7,350			7,281			0.9	%	14,618			14,414			1.4	%
Operating Income	$	1,294		$	1,577		(17.9)	%	$	2,699		$	3,249		(16.9)	%



Operating Income Margin	15.0		%	17.8		%	(280)	BP	15.6		%	18.4		%	(280)	BP


Three Months Ended
Dollars in millions
Unaudited
June 30, 2022
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)
Communications
Mobility	$	19,926	$	11,697	$	8,229	$	2,017	$	6,212
Business Wireline	5,595		3,572		2,023		1,313		710
Consumer Wireline	3,174		2,085		1,089		785		304
Total Communications	28,695		17,354		11,341		4,115		7,226
Latin America - Mexico	808		721		87		169		(82)
Segment Total	29,503		18,075		11,428		4,284		7,144
Corporate and Other
Corporate:
DTV-related retained costs	—		207		(207)		135		(342)
Parent administration support	(6)		303		(309)		4		(313)
Securitization fees	17		78		(61)		—		(61)
Value portfolio	129		37		92		10		82
Total Corporate	140		625		(485)		149		(634)





Reclassification of prior service credits	—		613		(613)		—		(613)
Merger & Significant Items	—		924		(924)		17		(941)

Total Corporate and Other	140		2,162		(2,022)		166		(2,188)
AT&T Inc.	$	29,643	$	20,237	$	9,406	$	4,450	$	4,956


Six Months Ended
Dollars in millions
Unaudited
June 30, 2022
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)
Communications
Mobility	$	40,001	$	23,860	$	16,141	$	4,076	$	12,065
Business Wireline	11,235		7,054		4,181		2,612		1,569
Consumer Wireline	6,335		4,163		2,172		1,551		621
Total Communications	57,571		35,077		22,494		8,239		14,255
Latin America - Mexico	1,498		1,352		146		330		(184)
Segment Total	59,069		36,429		22,640		8,569		14,071
Corporate and Other
Corporate:
DTV-related retained costs	8		335		(327)		269		(596)
Parent administration support	(18)		607		(625)		10		(635)
Securitization fees	33		160		(127)		—		(127)
Value portfolio	263		74		189		20		169
Total Corporate	286		1,176		(890)		299		(1,189)


Reclassification of prior service credits	—		1,230		(1,230)		—		(1,230)
Merger & Significant Items	—		1,115		(1,115)		44		(1,159)

Total Corporate and Other	286		3,521		(3,235)		343		(3,578)
AT&T Inc.	$	59,355	$	39,950	$	19,405	$	8,912	$	10,493


Adjusted Diluted EPS
	Second Quarter					Six-Month Period
	2022			2021		2022			2021
Diluted Earnings Per Share (EPS)	$	0.59		$	0.76	$	1.23		$	1.73


DIRECTV intangible amortization (proportionate share)	0.04			—		0.08			—
Actuarial (gain) loss 1	(0.13)			0.02		(0.24)			(0.27)
Restructuring and impairments	0.06			—		0.06			—
Benefit-related, transaction and other costs1, 2	0.08			(0.02)		0.13			(0.01)

Tax-related items	0.01			(0.03)		0.01			(0.05)

Adjusted EPS	$	0.65		$	0.73	$	1.27		$	1.40
Less: Video and Other dispositions	—			(0.09)		—			(0.18)
Standalone AT&T Adjusted EPS3	$	0.65		$	0.64	$	1.27		$	1.22
Year-over-year growth - Adjusted	1.6		%			4.1		%
Weighted Average Common Shares Outstanding with Dilution (000,000)	7,611			7,484		7,584			7,483
1Includes adjustments for actuarial gains or losses associated with our pension benefit plan, 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 gain of $1.3 billion in the second quarter of 2022. As a result, adjusted EPS reflects an expected return on plan assets of $0.8 billion (based on an average expected return on plan assets of 6.75% for our pension trust), rather than the actual return on plan assets of $(4.0) billion (actual pension return of -11.3%), included in the GAAP measure of income. Adjustments also include the impact to our second-quarter 2022 benefit expense accrual that resulted from the first-quarter 2022 remeasurement of plan assets and obligations, which included an increase in the assumed discount rate.
2As 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. The per share impact of ASU 2020-06 was to decrease reported diluted EPS $0.02 and $0.01 for the quarters ended June 30, 2022 and 2021, and $0.02 and $0.02 for the six months ended June 30, 2022 and 2021, respectively.
3See Exhibit 99.4 for reconciliation of Standalone AT&T Adjusted EPS.


	Standalone AT&T
	Supplemental Unaudited Quarterly Financial Information
	Dollars in millions
	Unaudited


	Operating Revenues	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21			6/30/21			9/30/21			12/31/21			2021			3/31/22			6/30/22
	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/Y											1.5		%	3.5		%	-11.5		%	-17.6		%	-6.3		%	-17.2		%	-17.1		%
	Standalone AT&T Revenue Growth Rate Y/Y											4.8		%	6.6		%	3.9		%	2.2		%	4.3		%	2.5		%	2.2		%


	Operations and Support Expenses	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21			6/30/21			9/30/21			12/31/21			2021			3/31/22			6/30/22
	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 Adjustments	720		(854)		32		(15,573)		(15,675)		(1)			70			(109)			(86)			(126)			(191)			(924)
	Adjusted Operations and Support Expenses from Continuing Operations	23,089		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 businesses	76		86		76		84		322		15			19			16			(4)			46			—			—
[C]	Add: DTV-related retained costs	350		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/Y											8.3		%	1.8		%	-13.1		%	-49.2		%	-19.5		%	-18.6		%	-14.8		%
	Adjusted Operations and Support Expenses from Continuing Operations Growth Rate Y/Y											4.9		%	6.0		%	-13.6		%	-20.4		%	-6.5		%	-19.4		%	-18.9		%
	Standalone AT&T Adjusted Operations and Support Expenses Growth Rate Y/Y											8.7		%	11.7		%	4.6		%	2.7		%	6.7		%	3.9		%	2.5		%


	Depreciation and Amortization Expense	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21			6/30/21			9/30/21			12/31/21			2021			3/31/22			6/30/22
	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 Operations	4,792		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 costs	180		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/Y											0.5		%	1.7		%	1.3		%	1.7		%	1.3		%	0.9		%	0.0		%


Free Cash Flow and Free Cash Flow Dividend Payout Ratio
Dollars in millions
	Second Quarter						Six-Month Period
	2022			2021			2022			2021
Net cash provided by operating activities1	$	7,740		$	10,181		$	15,370		$	19,783
Add: Distributions from DIRECTV classified as investing activities	323			—			1,638			—
Less: Capital expenditures	(4,908)			(3,710)			(9,476)			(7,581)
Less: Cash paid for vendor financing	(1,771)			(1,304)			(3,337)			(2,994)
Free Cash Flow	1,384			5,167			4,195			9,208

Less: Dividends paid	(2,086)			(3,830)			(5,835)			(7,571)
Free Cash Flow after Dividends	$	(702)		$	1,337		$	(1,640)		$	1,637
Free Cash Flow Dividend Payout Ratio	150.7		%	74.1		%	139.1		%	82.2		%
1Includes distributions from DIRECTV of $515 in the second quarter and $1,037 in the first six months of 2022.


Cash Paid for Capital Investment
Dollars in millions
	Second Quarter				Six-Month Period
	2022		2021		2022		2021
Capital Expenditures	$	(4,908)	$	(3,710)	$	(9,476)	$	(7,581)
Cash paid for vendor financing	(1,771)		(1,304)		(3,337)		(2,994)
Cash paid for Capital Investment	$	(6,679)	$	(5,014)	$	(12,813)	$	(10,575)


EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions
	Second Quarter				Six-Month Period
	2022		2021		2022		2021
Income from Continuing Operations	$	4,751	$	5,969	$	9,900	$	13,555
Additions:
Income Tax Expense	1,509		1,151		2,949		3,160
Interest Expense	1,502		1,640		3,128		3,463
Equity in Net (Income) Loss of Affiliates	(504)		18		(1,025)		24
Other (Income) Expense - Net	(2,302)		(1,206)		(4,459)		(5,436)
Depreciation and amortization	4,450		4,429		8,912		8,895
EBITDA	9,406		12,001		19,405		23,661
Transaction and other costs	185		—		283		35
Employee separation costs and benefit-related (gain) loss	108		(70)		201		(104)
Assets impairments and abandonment and restructuring	631		—		631		—

Adjusted EBITDA 1	$	10,330	$	11,931	$	20,520	$	23,592
Less: Video and Other dispositions	—		(1,776)		—		(3,243)
Standalone AT&T Adjusted EBITDA 2	$	10,330	$	10,155	$	20,520	$	20,349
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
	Second Quarter						Six-Month Period
	2022			2021			2022			2021
Communications Segment
Operating Income	$	7,226		$	7,384		$	14,255		$	14,815
Additions:
Depreciation and amortization	4,115			4,085			8,239			8,139
EBITDA	11,341			11,469			22,494			22,954

Total Operating Revenues	28,695			28,128			57,571			56,306

Operating Income Margin	25.2		%	26.3		%	24.8		%	26.3		%
EBITDA Margin	39.5		%	40.8		%	39.1		%	40.8		%
Mobility
Operating Income	$	6,212		$	6,007		$	12,065		$	12,051
Additions:
Depreciation and amortization	2,017			2,023			4,076			4,037
EBITDA	8,229			8,030			16,141			16,088

Total Operating Revenues	19,926			18,936			40,001			37,970
Service Revenues	15,004			14,346			29,728			28,394

Operating Income Margin	31.2		%	31.7		%	30.2		%	31.7		%
EBITDA Margin	41.3		%	42.4		%	40.4		%	42.4		%
EBITDA Service Margin	54.8		%	56.0		%	54.3		%	56.7		%
Business Wireline
Operating Income	$	710		$	1,069		$	1,569		$	2,149
Additions:
Depreciation and amortization	1,313			1,293			2,612			2,571
EBITDA	2,023			2,362			4,181			4,720

Total Operating Revenues	5,595			6,052			11,235			12,098

Operating Income Margin	12.7		%	17.7		%	14.0		%	17.8		%
EBITDA Margin	36.2		%	39.0		%	37.2		%	39.0		%
Consumer Wireline
Operating Income	$	304		$	308		$	621		$	615
Additions:
Depreciation and amortization	785			769			1,551			1,531
EBITDA	1,089			1,077			2,172			2,146

Total Operating Revenues	3,174			3,140			6,335			6,238

Operating Income Margin	9.6		%	9.8		%	9.8		%	9.9		%
EBITDA Margin	34.3		%	34.3		%	34.3		%	34.4		%

Latin America Segment - Mexico
Operating Income	$	(82)		$	(129)		$	(184)		$	(263)
Additions:
Depreciation and amortization	169			150			330			295
EBITDA	87			21			146			32

Total Operating Revenues	808			688			1,498			1,319

Operating Income Margin	-10.1		%	-18.8		%	-12.3		%	-19.9		%
EBITDA Margin	10.8		%	3.1		%	9.7		%	2.4		%


Adjusting Items
Dollars in millions
	Second Quarter				Six-Month Period
	2022		2021		2022		2021



Operating Expenses
Transaction and other costs	$	185	$	—	$	283	$	35
Benefit-related (gain) loss and other employee-related costs	108		(70)		201		(104)
Assets impairments and abandonment and restructuring	631		—		631		—

Adjustments to Operations and Support Expenses	924		(70)		1,115		(69)
Amortization of intangible assets	17		28		44		114
Adjustments to Operating Expenses	941		(42)		1,159		45
Other
DIRECTV intangible amortization (proportionate share)	396		—		812		—

Benefit-related (gain) loss, transaction financing costs and other	314		(213)		406		(337)
Actuarial (gain) loss	(1,345)		197		(2,398)		(2,647)
Adjustments to Income Before Income Taxes	306		(58)		(21)		(2,939)
Tax impact of adjustments	38		(1)		(65)		(725)
Tax-related items	(79)		250		(79)		368

Adjustments to Net Income	$	347	$	(307)	$	123	$	(2,582)


Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, and Adjusted EBITDA Margin
Dollars in millions
	Second Quarter						Six-Month Period
	2022			2021			2022			2021
Operating Income	$	4,956		$	7,572		$	10,493		$	14,766

Adjustments to Operating Expenses	941			(42)			1,159			45
Adjusted Operating Income	5,897			7,530			11,652			14,811

EBITDA	9,406			12,001			19,405			23,661

Adjustments to Operations and Support Expenses	924			(70)			1,115			(69)
Adjusted EBITDA	10,330			11,931			20,520			23,592

Total Operating Revenues	29,643			35,740			59,355			71,617







Operating Income Margin	16.7		%	21.2		%	17.7		%	20.6		%
Adjusted Operating Income Margin	19.9		%	21.1		%	19.6		%	20.7		%
Adjusted EBITDA Margin	34.8		%	33.4		%	34.6		%	32.9		%


Net Debt to Adjusted EBITDA - 2022
Dollars in millions
	Three Months Ended
	Sept. 30		Dec. 31,		March 31,		June 30,		Four Quarters
	2021 1		2021 1		2022 1		2022
Adjusted EBITDA	$	10,803	$	9,480	$	10,190	$	10,330	$	40,803





End-of-period current debt									6,210
End-of-period long-term debt									129,747
Total End-of-Period Debt									135,957
Less: Cash and Cash Equivalents									4,018
Net Debt Balance									131,939
Annualized Net Debt to Adjusted EBITDA Ratio 2									3.23
1As reported in Exhibit 99.4.
2Annualized Net Debt to Adjusted EBITDA Ratio of 3.28 when adjusted to remove the impacts for Video and Other dispositions of $568 and $4 in the third and fourth quarters of 2021, respectively. Additional information on Standalone AT&T can be found in Exhibit 99.4.


Net Debt to Adjusted EBITDA - 2021
Dollars in millions
	Three Months Ended
	Sept. 30		Dec. 31,		March 31,		June 30,		Four Quarters
	2020 1		2020 1		2021 1		2021 1
Adjusted EBITDA	$	11,642	$	10,590	$	11,661	$	11,931	$	45,824





End-of-period current debt									23,975
End-of-period long-term debt									154,006
Total End-of-Period Debt									177,981
Less: Cash and Cash Equivalents									9,924
Net Debt Balance									168,057
Annualized Net Debt to Adjusted EBITDA Ratio									3.67
1As reported in Exhibit 99.4.



Supplemental Operational Measure
	Second Quarter
	June 30, 2022								June 30, 2021
	Mobility		Business Wireline		Adjustments1		Business Solutions		Mobility		Business Wireline		Adjustments1		Business Solutions
Operating Revenues
Wireless service	$	15,004	$	—	$	(12,829)	$	2,175	$	14,346	$	—	$	(12,321)	$	2,025
Wireline service	—		5,416		—		5,416		—		5,860		—		5,860
Wireless equipment	4,922		—		(4,048)		874		4,590		—		(3,809)		781
Wireline equipment	—		179		—		179		—		192		—		192
Total Operating Revenues	19,926		5,595		(16,877)		8,644		18,936		6,052		(16,130)		8,858

Operating Expenses
Operations and support	11,697		3,572		(9,585)		5,684		10,906		3,690		(8,953)		5,643
EBITDA	8,229		2,023		(7,292)		2,960		8,030		2,362		(7,177)		3,215
Depreciation and amortization	2,017		1,313		(1,664)		1,666		2,023		1,293		(1,678)		1,638
Total Operating Expenses	13,714		4,885		(11,249)		7,350		12,929		4,983		(10,631)		7,281
Operating Income	6,212		710		(5,628)		1,294		6,007		1,069		(5,499)		1,577


1Non-business wireless reported in the Communications segment under the Mobility business unit.
Results have been recast to conform to the current period's classification.


	Other Income (Expense)	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21		6/30/21		9/30/21		12/31/21		2021		3/31/22		6/30/22
	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) - net	827		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 Adjustments	293		(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 investment	971		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


EBITDA2	3/31/20			6/30/20			9/30/20			12/31/20			2020			3/31/21			6/30/21			9/30/21			12/31/21			2021			3/31/22			6/30/22
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 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 - 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 amortization	5,705			5,655			5,610			5,553			22,523			4,466			4,429			4,457			4,500			17,852			4,462			4,450
EBITDA	12,988			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 EBITDA	12,268			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 Margin	34.7		%	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 Margin	37.5		%	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.


	Free Cash Flow ($B)3	3/31/21		6/30/21		9/30/21		12/31/21		2021		3/31/22		6/30/22
	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 Operations	4.0		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.



	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:	3/31/20		6/30/20		9/30/20		12/31/20		2020		3/31/21		6/30/21		9/30/21		12/31/21		2021		3/31/22		6/30/22

	Transaction and other costs	$	23	$	35	$	29	$	25	$	112	$	35	$	—	$	8	$	(3)	$	40	$	98	$	185
	Employee separation costs and benefit-related (gain) loss	129		748		(61)		(37)		779		(34)		(70)		(3)		(20)		(127)		93		108
	Asset impairments and abandonments and restructuring	28		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 assets	913		878		839		797		3,427		85		28		28		28		169		27		17
	Impairments	—		—		—		14		14		—		—		—		—		—		—		—
	Adjustments to Operating Income	193		1,732		807		16,384		19,116		86		(42)		137		114		295		218		941
	Other income (expense) net	293		(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.