AT&T INC. The company continues to attract high quality customers with the most reliable 5G network1 and the country's largest consumer fiber network
Consistent strategy driving strong second-quarter results
- Revenues of
$29.9 billion , up 0.9% year over year - Cash from operating activities of
$9.9 billion , up 28.2% year over year and up$1.2 billion in first-half 2023 compared to first-half 2022 - Free cash flow* of
$4.2 billion , up$1.0 billion in first-half 2023 compared to first-half 2022; confident in full-year free cash flow* of$16 billion or better - Operating income of
$6.4 billion , up 29.3% year over year - On track for full-year Adjusted EBITDA* growth of more than 3%
"The direction we set three years ago is sound, and we're on the right trajectory. Compared to last year, Mobility service and broadband revenues are up, Adjusted EBITDA is up, free cash flow is up, Mobility and Consumer Wireline margins are up and customer lifetime values are up," said
Establishing a foundation for durable, long-term growth
- Delivered 326,000 postpaid phone net adds with continued strong ARPU growth and historically low levels of churn
- Mobility service revenues up 4.9%; achieved company's best-ever second-quarter Mobility operating income
- 251,000 AT&T Fiber net adds; 14 straight quarters with more than 200,000 net adds
- Consumer broadband revenues up 7.0%, driven by AT&T Fiber revenue growth of 28.0%
- Surpassed 5 million FirstNet® connections; FirstNet continues to be the leading choice for the first responder community
- Named #1 in wireless customer satisfaction by the American Customer Satisfaction Index
A leading investor in America's broadband infrastructure
- Expanded most reliable 5G network1; mid-band 5G spectrum now covers more than 175 million people; remain on track to reach 200 million people with mid-band 5G by the end of the year
- Grew country's largest consumer fiber network; ability to serve 20.2 million consumer and more than 3 million business customer locations with fiber; remain on track to pass 30 million-plus fiber locations by the end of 2025
- Closed joint venture with BlackRock to form Gigapower to provide a state-of-the-art fiber network to an initial 8 new areas
- Collaborated with AST SpaceMobile to achieve world-first direct voice call from space between unmodified everyday 4G LTE smartphones, connected via a low-earth orbit satellite; a key step in allowing us to provide even more expansive connectivity
Becoming more efficient and effective
- Achieved
$6 billion -plus run-rate cost savings target six months ahead of schedule - Increased target to
$8 billion -plus run-rate cost savings with expectation of achieving incremental$2 billion -plus in run-rate cost savings over three years - Accelerated cost-savings across the company with AI; collaborated with Microsoft to launch custom-built generative AI tool, Ask AT&T
Note:
Consolidated Financial Results
Revenues for the second quarter totaled
Operating expenses were
Operating income was
Equity in net income of affiliates was
Income from continuing operations was
Cash from operating activities from continuing operations was
Free cash flow* was
Communications Operational Highlights
Second-quarter revenues were
Mobility
- Revenues were up 2.0% year over year to
$20.3 billion due to higher service revenues, partially offset by lower equipment revenues. Service revenues were$15.7 billion , up 4.9% year over year, primarily driven by subscriber and postpaid ARPU growth. Equipment revenues were$4.6 billion , down 7.2% year over year, driven by lower volumes. - Operating expenses were
$13.7 billion , down 1.3% year over year primarily due to lower equipment costs driven by lower device sales and lower content costs. These decreases were partly offset by increased amortization of deferred customer acquisition costs, higher network and customer support costs and higher depreciation expense. - Operating income was
$6.6 billion , up 9.3% year over year. Operating income margin was 32.6%, compared to 30.4% in the year-ago quarter. - EBITDA* was
$8.7 billion , up 8.3% year over year with EBITDA margin* of 43.0%, up from 40.5% in the year-ago quarter. This was the company's best-ever second-quarter Mobility EBITDA*. EBITDA service margin* was 55.5%, up from 53.8% in the year-ago quarter. - Total wireless net adds were 6.2 million, including:
- 464,000 postpaid net adds with:
- 326,000 postpaid phone net adds
- (70,000) postpaid tablet and other branded computing device net losses
- 208,000 other net adds
- 123,000 prepaid phone net adds
- Postpaid churn was 0.95% versus 0.93% in the year-ago quarter.
- Postpaid phone churn was 0.79% versus 0.75% in the year-ago quarter.
- Prepaid churn was 2.50%, with Cricket substantially lower, versus 2.59% in the year-ago quarter.
- Postpaid phone ARPU was
$55.63 , up 1.5% versus the year-ago quarter, due to prior-year pricing actions, higher international roaming and a mix shift to higher-priced unlimited plans. - FirstNet connections reached more than 5.0 million across more than 26,000 agencies. FirstNet is the nationwide communications platform dedicated to public safety. The
AT&T and FirstNet networks cover more than 99% of theU.S. population, and FirstNet covers more first responders than any other network in America.
Business Wireline
- Revenues were
$5.3 billion , down 5.6% year over year due to lower demand for legacy voice and data services and product simplification, partly offset by growth in connectivity services. - Operating expenses were
$4.9 billion , down 4.3% year over year due to ongoing operational cost efficiencies, including lower personnel, lower wholesale network access costs, one-time cost benefits and lower marketing expenses. - Operating income was
$396 million , down 19.2%, with operating income margin of 7.5% compared to 8.8% in the year-ago quarter. - EBITDA* was
$1.7 billion , down 4.1% year over year with EBITDA margin* of 32.8%, compared to 32.2% in the year-ago quarter. - AT&T Business serves the largest global companies, government agencies and small businesses. More than 750,000
U.S. business buildings are lit with fiber fromAT&T , enabling high-speed fiber connections to more than 3 millionU.S. business customer locations. Nationwide, more than 10 million business customer locations are on or within 1,000 feet of our fiber.3
Consumer Wireline
- Revenues were
$3.3 billion , up 2.4% year over year due to gains in broadband more than offsetting declines in legacy voice and data and other services. Broadband revenues increased 7.0% due to fiber growth of 28.0%, partly offset by a 13.7% decline in non-fiber revenues. - Operating expenses were
$3.1 billion , up 1.8% year over year due to higher depreciation expense, higher network and maintenance costs and increased amortization of deferred customer acquisition costs, partly offset by lower customer support costs, including one-time cost benefits and lower content costs. - Operating income was
$168 million , up 15.9% year over year with operating income margin of 5.2%, compared to 4.6% in the year-ago quarter. - EBITDA* was
$1.0 billion , up 10.2% year over year with EBITDA margin* of 31.5%, up from 29.3% in the year-ago quarter. - Total broadband net losses, excluding DSL, were 35,000, reflecting AT&T Fiber net adds of 251,000, more than offset by losses in non-fiber services. AT&T Fiber now has the ability to serve 20.2 million customer locations and offers symmetrical, multi-gig speeds across parts of its entire footprint of more than 100 metro areas.
Revenues were
Operating loss was ($39) million compared to ($82) million in the year-ago quarter. EBITDA* was
Total wireless net adds were 76,000, including 50,000 prepaid net adds, 56,000 postpaid net adds and 30,000 reseller net losses.
* 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.
FirstNet and the FirstNet logo are registered trademarks and service marks of the |
1 5G claim based on nationwide GWS drive test data. GWS conducts paid drive tests for |
2 Diluted Earnings per Common Share from continuing operations is calculated using Income (Loss) from Continuing Operations, less Net Income Attributable to Noncontrolling Interest and Preferred Stock Dividends and adjustment for distributions on Mobility II preferred interests (prior to redemption) and share-based payments (when not antidilutive), divided by the weighted average common shares outstanding for the period. |
3 The more than 3 million |
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
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
Free cash flow for 2Q23 of
Free cash flow for 2Q23 year-to-date of
Free cash flow for 2Q22 year-to-date of
Due to high variability and difficulty in predicting items that impact cash from operating activities and cash distributions from DIRECTV, the company is not able to provide a reconciliation between projected free cash flow and the most comparable GAAP metric without unreasonable effort.
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.
Adjusted EBITDA is calculated by excluding from operating revenues and operating expenses certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs, significant abandonments and impairment, benefit-related gains and losses, employee separation and other material gains and losses.
Adjusted EBITDA estimates depend on future levels of revenues and expenses which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation between projected EBITDA and projected Adjusted EBITDA and the most comparable GAAP metrics without unreasonable effort.
Adjusted Operating Income is operating income adjusted for revenues and costs we consider non-operational in nature, including items arising from asset acquisitions or dispositions. For 2Q23, Adjusted Operating Income of
Adjusted Equity in Net Income from DIRECTV investment of
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, including the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and those assets contribute to revenue generation. 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 25%.
For 2Q23, Adjusted EPS from continuing operations of
For 2Q22, Adjusted EPS from continuing operations of
Capital investment 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 includes capital expenditures and cash paid for vendor financing (
Net Debt of
Net debt-to-adjusted EBITDA ratios are non-GAAP financial measures that are frequently used by investors and credit rating agencies to provide relevant and useful information. Our Net Debt-to-Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters of Adjusted EBITDA. Net Debt is calculated by subtracting cash and cash equivalents and deposits at financial institutions that are greater than 90 days (e.g., certificates of deposit and time deposits), from the sum of debt maturing within one year and long-term debt.
Adjusted EBITDA is calculated as defined above. Net Debt and Adjusted EBITDA estimates depend on future levels of revenues, expenses and other metrics which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation between projected Net Debt-to-Adjusted EBITDA and the most comparable GAAP metrics and related ratios without unreasonable effort.
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
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 | |||||
Second Quarter | Six-Month Period | ||||
2023 | 2022 | 2023 | 2022 | ||
Net cash provided by operating activities from continuing operations1 | $ 9,922 | $ 7,740 | $ 16,600 | $ 15,370 | |
Add: Distributions from DIRECTV classified as investing activities | 200 | 323 | 974 | 1,638 | |
Less: Capital expenditures | (4,270) | (4,908) | (8,605) | (9,476) | |
Less: Cash paid for vendor financing | (1,643) | (1,771) | (3,756) | (3,337) | |
Free Cash Flow | 4,209 | 1,384 | 5,213 | 4,195 | |
Less: Dividends paid | (2,083) | (2,086) | (4,097) | (5,835) | |
Free Cash Flow after Dividends | $ 2,126 | $ (702) | $ 1,116 | $ (1,640) | |
Free Cash Flow Dividend Payout Ratio | 49.5 % | 150.7 % | 78.6 % | 139.1 % | |
1 Includes distributions from DIRECTV of |
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 | |||||
Second Quarter | Six-Month Period | ||||
2023 | 2022 | 2023 | 2022 | ||
Capital Expenditures | $ (4,270) | $ (4,908) | $ (8,605) | $ (9,476) | |
Cash paid for vendor financing | (1,643) | (1,771) | (3,756) | (3,337) | |
Cash paid for | $ (5,913) | $ (6,679) | $ (12,361) | $ (12,813) | |
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 | |||||
Second Quarter | Six-Month Period | ||||
2023 | 2022 | 2023 | 2022 | ||
Income from Continuing Operations | $ 4,762 | $ 4,751 | $ 9,215 | $ 9,900 | |
Additions: | |||||
Income Tax Expense | 1,403 | 1,509 | 2,717 | 2,949 | |
Interest Expense | 1,608 | 1,502 | 3,316 | 3,128 | |
Equity in Net (Income) of Affiliates | (380) | (504) | (918) | (1,025) | |
Other (Income) Expense - Net | (987) | (2,302) | (1,922) | (4,459) | |
Depreciation and amortization | 4,675 | 4,450 | 9,306 | 8,912 | |
EBITDA | 11,081 | 9,406 | 21,714 | 19,405 | |
Transaction and other costs | — | 185 | — | 283 | |
Benefit-related (gain) loss | (28) | 108 | (72) | 201 | |
Assets impairments and abandonment and restructuring | — | 631 | — | 631 | |
Adjusted EBITDA1 | $ 11,053 | $ 10,330 | $ 21,642 | $ 20,520 | |
1 See "Adjusting Items" section for additional discussion and reconciliation of adjusted items. |
Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin | |||||
Dollars in millions | |||||
Second Quarter | Six-Month Period | ||||
2023 | 2022 | 2023 | 2022 | ||
Communications Segment | |||||
Operating Income | $ 7,177 | $ 6,683 | $ 13,920 | $ 13,170 | |
Add: Depreciation and amortization | 4,313 | 4,115 | 8,602 | 8,239 | |
EBITDA | $ 11,490 | $ 10,798 | $ 22,522 | $ 21,409 | |
Total Operating Revenues | $ 28,845 | $ 28,695 | $ 57,997 | $ 57,571 | |
Operating Income Margin | 24.9 % | 23.3 % | 24.0 % | 22.9 % | |
EBITDA Margin | 39.8 % | 37.6 % | 38.8 % | 37.2 % | |
Mobility | |||||
Operating Income | $ 6,613 | $ 6,048 | $ 12,884 | $ 11,737 | |
Add: Depreciation and amortization | 2,123 | 2,017 | 4,221 | 4,076 | |
EBITDA | $ 8,736 | $ 8,065 | $ 17,105 | $ 15,813 | |
Total Operating Revenues | $ 20,315 | $ 19,926 | $ 40,897 | $ 40,001 | |
Service Revenues | 15,745 | 15,004 | 31,228 | 29,728 | |
Operating Income Margin | 32.6 % | 30.4 % | 31.5 % | 29.3 % | |
EBITDA Margin | 43.0 % | 40.5 % | 41.8 % | 39.5 % | |
EBITDA Service Margin | 55.5 % | 53.8 % | 54.8 % | 53.2 % | |
Business Wireline | |||||
Operating Income | $ 396 | $ 490 | $ 774 | $ 1,129 | |
Add: Depreciation and amortization | 1,333 | 1,313 | 2,663 | 2,612 | |
EBITDA | $ 1,729 | $ 1,803 | $ 3,437 | $ 3,741 | |
Total Operating Revenues | $ 5,279 | $ 5,595 | $ 10,610 | $ 11,235 | |
Operating Income Margin | 7.5 % | 8.8 % | 7.3 % | 10.0 % | |
EBITDA Margin | 32.8 % | 32.2 % | 32.4 % | 33.3 % | |
Consumer Wireline | |||||
Operating Income | $ 168 | $ 145 | $ 262 | $ 304 | |
Add: Depreciation and amortization | 857 | 785 | 1,718 | 1,551 | |
EBITDA | $ 1,025 | $ 930 | $ 1,980 | $ 1,855 | |
Total Operating Revenues | $ 3,251 | $ 3,174 | $ 6,490 | $ 6,335 | |
Operating Income Margin | 5.2 % | 4.6 % | 4.0 % | 4.8 % | |
EBITDA Margin | 31.5 % | 29.3 % | 30.5 % | 29.3 % | |
Latin America Segment | |||||
Operating Income (Loss) | $ (39) | $ (82) | $ (69) | $ (184) | |
Add: Depreciation and amortization | 185 | 169 | 360 | 330 | |
EBITDA | $ 146 | $ 87 | $ 291 | $ 146 | |
Total Operating Revenues | $ 967 | $ 808 | $ 1,850 | $ 1,498 | |
Operating Income Margin | -4.0 % | -10.1 % | -3.7 % | -12.3 % | |
EBITDA Margin | 15.1 % | 10.8 % | 15.7 % | 9.7 % | |
Adjusting Items
Adjusting items include revenues and costs we consider non-operational in nature, including items arising from asset acquisitions or dispositions, including the amortization of intangible assets. While the expense associated with the amortization of certain wireless licenses and customer lists is excluded, the revenue of the acquired companies is reflected in the measure and that those assets contribute to revenue generation. 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.
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 25%.
Adjusting Items | |||||
Dollars in millions | |||||
Second Quarter | Six-Month Period | ||||
2023 | 2022 | 2023 | 2022 | ||
Operating Expenses | |||||
Transaction and other costs | $ — | $ 185 | $ — | $ 283 | |
Benefit-related (gain) loss | (28) | 108 | (72) | 201 | |
Assets impairments and abandonment and restructuring | — | 631 | — | 631 | |
Adjustments to Operations and Support Expenses | (28) | 924 | (72) | 1,115 | |
Amortization of intangible assets | 17 | 17 | 34 | 44 | |
Adjustments to Operating Expenses | (11) | 941 | (38) | 1,159 | |
Other | |||||
DIRECTV intangible amortization (proportionate share) | 324 | 396 | 665 | 812 | |
Benefit-related (gain) loss and other | (82) | 314 | (193) | 406 | |
Actuarial and settlement (gain) loss - net | (74) | (1,345) | (74) | (2,398) | |
Adjustments to Income Before Income Taxes | 157 | 306 | 360 | (21) | |
Tax impact of adjustments | 35 | 38 | 81 | (65) | |
Tax-related items | — | (79) | — | (79) | |
Adjustments to Net Income | $ 122 | $ 347 | $ 279 | $ 123 | |
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 | |||||
Second Quarter | Six-Month Period | ||||
2023 | 2022 | 2023 | 2022 | ||
Operating Income | $ 6,406 | $ 4,956 | $ 12,408 | $ 10,493 | |
Adjustments to Operating Expenses | (11) | 941 | (38) | 1,159 | |
Adjusted Operating Income | $ 6,395 | $ 5,897 | $ 12,370 | $ 11,652 | |
EBITDA | $ 11,081 | $ 9,406 | $ 21,714 | $ 19,405 | |
Adjustments to Operations and Support Expenses | (28) | 924 | (72) | 1,115 | |
Adjusted EBITDA | $ 11,053 | $ 10,330 | $ 21,642 | $ 20,520 | |
Total Operating Revenues | $ 29,917 | $ 29,643 | $ 60,056 | $ 59,355 | |
Operating Income Margin | 21.4 % | 16.7 % | 20.7 % | 17.7 % | |
Adjusted Operating Income Margin | 21.4 % | 19.9 % | 20.6 % | 19.6 % | |
Adjusted EBITDA Margin | 36.9 % | 34.8 % | 36.0 % | 34.6 % | |
Adjusted Diluted EPS | |||||
Second Quarter | Six-Month Period | ||||
2023 | 2022 | 2023 | 2022 | ||
Diluted Earnings Per Share (EPS) | $ 0.61 | $ 0.59 | $ 1.19 | $ 1.23 | |
DIRECTV intangible amortization (proportionate share) | 0.03 | 0.04 | 0.07 | 0.08 | |
Actuarial and settlement (gain) loss - net1 | (0.01) | (0.13) | (0.01) | (0.24) | |
Restructuring and impairments | — | 0.06 | — | 0.06 | |
Benefit-related, transaction and other costs2 | — | 0.08 | (0.02) | 0.13 | |
Tax-related items | — | 0.01 | — | 0.01 | |
Adjusted EPS | $ 0.63 | $ 0.65 | $ 1.23 | $ 1.27 | |
Year-over-year growth - Adjusted | -3.1 % | -3.1 % | |||
Weighted Average Common Shares Outstanding with | 7,180 | 7,611 | 7,327 | 7,584 | |
1 Includes adjustments for actuarial gains or losses associated with our pension and postretirement benefit plans, which we immediately |
2 As of |
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 deposits at financial institutions that are greater than 90 days (e.g., certificates of deposit and time deposits), from the sum of debt maturing within one year and long-term debt.
Net Debt to Adjusted EBITDA - 2023 | |||||||||
Dollars in millions | |||||||||
Three Months Ended | |||||||||
Four Quarters | |||||||||
20221 | 20221 | 20231 | 2023 | ||||||
Adjusted EBITDA | $ 10,714 | $ 10,231 | $ 10,589 | $ 11,053 | $ 42,587 | ||||
End-of-period current debt | 15,268 | ||||||||
End-of-period long-term debt | 128,012 | ||||||||
Total End-of-Period Debt | 143,280 | ||||||||
Less: Cash and Cash Equivalents | 9,528 | ||||||||
Less: Time Deposits | 1,750 | ||||||||
Net Debt Balance | 132,002 | ||||||||
Annualized Net Debt to Adjusted EBITDA Ratio | 3.10 | ||||||||
1 As reported in |
Net Debt to Adjusted EBITDA - 2022 | |||||||||
Dollars in millions | |||||||||
Three Months Ended | |||||||||
Four Quarters | |||||||||
20211 | 20211 | 20221 | 20221 | ||||||
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 | 3.23 | ||||||||
1 As reported in |
Supplemental Operational Measures
As a supplemental presentation to our Communications segment operating results, we are providing a view of our AT&T Business Solutions results which includes both wireless and fixed operations. This combined view presents a complete profile of the entire business customer relationship and underscores the importance of mobile solutions to serving our business customers. Our supplemental presentation of business solutions operations 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 | ||||||||||
Second Quarter | ||||||||||
Mobility | Business Wireline | Adj.1 | Business Solutions | Mobility | Business Wireline | Adj.1 | Business Solutions | Percent | ||
Operating Revenues | ||||||||||
Wireless service | $ 15,745 | $ — | $ 2,374 | $ 15,004 | $ — | $ 2,175 | 9.1 % | |||
Wireline service | — | 5,114 | — | 5,114 | — | 5,416 | — | 5,416 | (5.6) % | |
Wireless equipment | 4,570 | — | (3,796) | 774 | 4,922 | — | (4,048) | 874 | (11.4) % | |
Wireline equipment | — | 165 | — | 165 | — | 179 | — | 179 | (7.8) % | |
Total Operating Revenues | 20,315 | 5,279 | (17,167) | 8,427 | 19,926 | 5,595 | (16,877) | 8,644 | (2.5) % | |
Operating Expenses | ||||||||||
Operations and support | 11,579 | 3,550 | (9,440) | 5,689 | 11,861 | 3,792 | (9,718) | 5,935 | (4.1) % | |
EBITDA | 8,736 | 1,729 | (7,727) | 2,738 | 8,065 | 1,803 | (7,159) | 2,709 | 1.1 % | |
Depreciation and amortization | 2,123 | 1,333 | (1,733) | 1,723 | 2,017 | 1,313 | (1,664) | 1,666 | 3.4 % | |
Total Operating Expenses | 13,702 | 4,883 | (11,173) | 7,412 | 13,878 | 5,105 | (11,382) | 7,601 | (2.5) % | |
Operating Income | $ 6,613 | $ 396 | $ (5,994) | $ 1,015 | $ 6,048 | $ 490 | $ (5,495) | $ 1,043 | (2.7) % | |
Operating Income Margin | 12.0 % | 12.1 % | (10) BP | |||||||
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 | ||||||||||
Six-Month Period | ||||||||||
Mobility | Business Wireline | Adj.1 | Business Solutions | Mobility | Business Wireline | Adj.1 | Business Solutions | Percent | ||
Operating Revenues | ||||||||||
Wireless service | $ 31,228 | $ — | $ 4,654 | $ 29,728 | $ — | $ 4,309 | 8.0 % | |||
Wireline service | — | 10,314 | — | 10,314 | — | 10,894 | — | 10,894 | (5.3) % | |
Wireless equipment | 9,669 | — | (8,122) | 1,547 | 10,273 | — | (8,500) | 1,773 | (12.7) % | |
Wireline equipment | — | 296 | — | 296 | — | 341 | — | 341 | (13.2) % | |
Total Operating Revenues | 40,897 | 10,610 | (34,696) | 16,811 | 40,001 | 11,235 | (33,919) | 17,317 | (2.9) % | |
Operating Expenses | ||||||||||
Operations and support | 23,792 | 7,173 | (19,636) | 11,329 | 24,188 | 7,494 | (19,887) | 11,795 | (4.0) % | |
EBITDA | 17,105 | 3,437 | (15,060) | 5,482 | 15,813 | 3,741 | (14,032) | 5,522 | (0.7) % | |
Depreciation and amortization | 4,221 | 2,663 | (3,445) | 3,439 | 4,076 | 2,612 | (3,362) | 3,326 | 3.4 % | |
Total Operating Expenses | 28,013 | 9,836 | (23,081) | 14,768 | 28,264 | 10,106 | (23,249) | 15,121 | (2.3) % | |
Operating Income | $ 12,884 | $ 774 | $ 2,043 | $ 11,737 | $ 1,129 | $ 2,196 | (7.0) % | |||
Operating Income Margin | 12.2 % | 12.7 % | (50) BP | |||||||
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. |
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