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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________________
FORM 8-K
______________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 20,
2022
______________________________________________________
AT&T INC.
(Exact Name of Registrant as Specified in Charter)
______________________________________________________
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Delaware |
001-08610 |
43-1301883 |
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
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208 S. Akard St., Dallas, Texas
(Address of Principal Executive Offices)
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75202
(Zip Code)
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Registrant’s telephone number, including area code (210)
821-4105
(Former Name or Former Address, if Changed Since Last
Report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
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☐ |
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240-14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Securities Registered Pursuant to Section 12(b) of the
Act
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Title of each class |
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Trading
Symbol(s) |
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Name of each exchange
on which registered |
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Common Shares (Par Value $1.00 Per Share) |
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T |
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New York Stock Exchange |
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Depositary Shares, each representing a 1/1000th interest in a share
of 5.000% Perpetual Preferred Stock, Series A |
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T PRA |
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New York Stock Exchange |
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Depositary Shares, each representing a 1/1000th interest in a share
of 4.750% Perpetual Preferred Stock, Series C |
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T PRC |
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New York Stock Exchange |
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AT&T Inc. 2.500% Global Notes due March 15, 2023 |
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T 23 |
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New York Stock Exchange |
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AT&T Inc. 2.750% Global Notes due May 19, 2023 |
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T 23C |
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New York Stock Exchange |
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AT&T Inc. Floating Rate Global Notes due September 5,
2023 |
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T 23D |
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New York Stock Exchange |
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AT&T Inc. 1.050% Global Notes due September 5, 2023 |
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T 23E |
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New York Stock Exchange |
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AT&T Inc. 1.300% Global Notes due September 5, 2023 |
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T 23A |
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New York Stock Exchange |
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Title of each class |
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Trading
Symbol(s)
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Name of each exchange
on which registered |
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AT&T Inc. 1.950% Global Notes due September 15,
2023 |
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T 23F |
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New York Stock Exchange |
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AT&T Inc. 2.400% Global Notes due March 15, 2024 |
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T 24A |
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New York Stock Exchange |
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AT&T Inc. 3.500% Global Notes due December 17, 2025 |
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T 25 |
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New York Stock Exchange |
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AT&T Inc. 0.250% Global Notes due March 4, 2026 |
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T 26E |
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New York Stock Exchange |
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AT&T Inc. 1.800% Global Notes due September 5, 2026 |
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T 26D |
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New York Stock Exchange |
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AT&T Inc. 2.900% Global Notes due December 4, 2026 |
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T 26A |
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New York Stock Exchange |
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AT&T Inc. 1.600% Global Notes due May 19, 2028 |
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T 28C |
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New York Stock Exchange |
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AT&T Inc. 2.350% Global Notes due September 5, 2029 |
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T 29D |
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New York Stock Exchange |
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AT&T Inc. 4.375% Global Notes due September 14,
2029 |
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T 29B |
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New York Stock Exchange |
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AT&T Inc. 2.600% Global Notes due December 17, 2029 |
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T 29A |
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New York Stock Exchange |
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AT&T Inc. 0.800% Global Notes due March 4, 2030 |
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T 30B |
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New York Stock Exchange |
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AT&T Inc. 2.050% Global Notes due May 19, 2032 |
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T 32A |
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New York Stock Exchange |
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AT&T Inc. 3.550% Global Notes due December 17, 2032 |
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T 32 |
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New York Stock Exchange |
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AT&T Inc. 5.200% Global Notes due November 18, 2033 |
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T 33 |
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New York Stock Exchange |
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AT&T Inc. 3.375% Global Notes due March 15, 2034 |
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T 34 |
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New York Stock Exchange |
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AT&T Inc. 2.450% Global Notes due March 15, 2035 |
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T 35 |
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New York Stock Exchange |
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AT&T Inc. 3.150% Global Notes due September 4, 2036 |
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T 36A |
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New York Stock Exchange |
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AT&T Inc. 2.600% Global Notes due May 19, 2038 |
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T 38C |
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New York Stock Exchange |
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AT&T Inc. 1.800% Global Notes due September 14,
2039 |
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T 39B |
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New York Stock Exchange |
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AT&T Inc. 7.000% Global Notes due April 30, 2040 |
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T 40 |
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New York Stock Exchange |
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AT&T Inc. 4.250% Global Notes due June 1, 2043 |
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T 43 |
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New York Stock Exchange |
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AT&T Inc. 4.875% Global Notes due June 1, 2044 |
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T 44 |
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New York Stock Exchange |
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AT&T Inc. 4.000% Global Notes due June 1, 2049 |
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T 49A |
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New York Stock Exchange |
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AT&T Inc. 4.250% Global Notes due March 1, 2050 |
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T 50 |
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New York Stock Exchange |
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AT&T Inc. 3.750% Global Notes due September 1, 2050 |
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T 50A |
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New York Stock Exchange |
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AT&T Inc. 5.350% Global Notes due November 1, 2066 |
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TBB |
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New York Stock Exchange |
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AT&T Inc. 5.625% Global Notes due August 1, 2067 |
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TBC |
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New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Item 8.01
Other Events.
Throughout this document, AT&T Inc. is referred to as “we” or
“AT&T.” AT&T is a holding company whose subsidiaries and
affiliates operate worldwide in the telecommunications and
technology industries.
On April 8, 2022, we completed the separation of our WarnerMedia
business and recast historical financial results to present
WarnerMedia and other business dispositions that were components of
AT&T’s single plan of a strategic shift as discontinued
operations. The discussion below refers to our continuing
operations and includes the results of the U.S. Video business that
was separated in July 2021.
Overview
We announced on October 20, 2022 that third-quarter 2022
income from continuing operations totaled $6.3 billion, or $0.79
per diluted share. Third-quarter 2022 income per diluted share
included amounts totaling to $444 million (pre-tax), or $0.11 per
share, resulting from the following significant items: actuarial
gains on remeasurement of our pension and postemployment benefit
plan assets and obligations of $0.14 per share and benefits from
tax items of $0.10 per share partially offset by $(0.04) per share
from our proportionate share of DIRECTV intangible amortization,
$(0.04) per share of other benefit related market-driven
adjustments $(0.02) per share from the adoption of Accounting
Standards Update (ASU) No. 2020-06 (ASU 2020-06) and $(0.03) per
share of other charges. These
results compare with a reported net income from continuing
operations of $5.0 billion,
or $0.63 per diluted share, in the third quarter of 2021, which
included $0.04 per share of actuarial gains and $(0.01) per share
from our retrospective adoption of ASU 2020-06.
Operating revenues in the third quarter of 2022 were $30.0 billion,
down 4.1 percent from the third quarter of 2021, reflecting the
impact of
our divested Video business and other businesses that did not
qualify as discontinued operations, and lower Business Wireline
revenues. The declines were partially offset by higher Mobility,
and, to a lesser extent, increased Consumer Wireline and Mexico
revenues.
Operating expenses in the third
quarter of
2022 were $24.0 billion, down 4.2 percent, reflecting impacts from
divested businesses and 3G network shutdown costs in the prior-year
quarter. Partially offsetting the decreases were increased Mobility
costs, including equipment costs driven by increased sales and the
mix of higher-priced smartphones.
Operating income in the third quarter was $6.0 billion compared to
$6.2 billion in the comparable 2021 period, and AT&T’s
third-quarter operating income margin was 20.0 percent, compared to
19.9 percent in the comparable 2021 period.
Other income (expense) - net in the third quarter was $2.3 billion
compared to $1.5 billion in the comparable 2021 period. The
increase reflects a $1.4 billion actuarial gain on pension and
postretirement benefits in the third quarter of 2022 versus a $374
million gain in the prior-year quarter. Third-quarter 2022 benefit
expense also includes approximately $140 million favorable impact
from a retirement benefit plan change, with $115 million resulting
from prior service credits that have no impact on consolidated
operating income. We present the impact of benefit plan amendments
in our business unit results, with the Communications segment
operating income margins including $115 million operating expense
reduction.
Cash from operating activities from continuing operations in the
third quarter of 2022 was $10.1 billion, up $0.8 billion when
compared to 2021, reflecting higher distributions from DIRECTV and
receivable sales, partially offset by payments for wireless
devices. Capital expenditures in the third quarter of 2022 were
$5.9 billion, and when including $0.9 billion cash paid for vendor
financing, capital investment was $6.8 billion, compared to
prior-year third quarter capital investment of $5.5 billion
(capital expenditures of $4.5 billion and vendor financing of $1.0
billion).
Segment Summary
We analyze our segments based on segment operating income, which
excludes acquisition-related costs and other significant items. Our
reportable segments are: Communications and Latin
America.
Communications
Our Communications segment consists of our Mobility, Business
Wireline and Consumer Wireline business units.
Third-quarter 2022 operating revenues were $29.1 billion, up 3.2
percent versus third-quarter 2021, with segment operating
income
of $7.6 billion, up 6.5 percent versus the year-ago quarter.
Operating income reflects lower costs associated with a
third-quarter 2022 benefit plan change of approximately $115
million, with $50 million for Business Wireline, $40 million for
Consumer Wireline and $20 million for Mobility.
The
Communications segment operating income margin was 26.2 percent,
compared to 25.4 percent in the year-earlier quarter.
Mobility
Mobility revenues for the third quarter of 2022 were $20.3 billion,
up 6.0 percent versus the third quarter of 2021, driven by service
revenue growth from subscriber and ARPU growth and equipment
revenue growth from higher sales and the mix of higher priced
smartphone sales. Mobility operating expenses totaled $13.9
billion, up 5.4 percent versus the third quarter of 2021 due to
increased equipment costs resulting from sales and the mix of
higher priced smartphones, higher bad debt expense, higher sales
costs, increased amortization of customer acquisition costs, higher
network costs and the elimination of CAF II government credits,
partially offset by the absence of 3G network shutdown costs in the
current-year quarter. Mobility’s operating income margin was 31.7
percent compared to 31.3 percent in the year-ago
quarter.
In our Mobility business unit, during the third quarter of 2022, we
reported a net gain of 7.1 million wireless subscribers. At
September 30, 2022, wireless subscribers totaled 210.7 million
(including approximately 4.0
million
FirstNet connections) compared to 196.5 million at
September 30, 2021.
During the third quarter, total phone net adds (postpaid and
prepaid) were 816,000 with total net adds by subscriber category as
follows:
•Postpaid
subscriber net adds were 964,000, with phone net adds of
708,000.
•Prepaid
subscriber net adds were 141,000, with phone net adds of
108,000.
•Reseller
net adds were 308,000.
•Connected
device net adds were 5.7 million, 2.6 million of which were
primarily attributable to wholesale connected cars.
For the quarter ended September 30, 2022, postpaid phone-only
ARPU increased
2.4 percent
versus the year-earlier quarter.
Postpaid phone-only churn was 0.84 percent compared to 0.72 percent
in the third quarter of 2021. Total postpaid churn was 1.01 percent
compared to 0.92 percent in the year-ago quarter.
Business Wireline
Business Wireline revenues for the third quarter of 2022 were $5.7
billion, down 4.5 percent versus the year-ago quarter, primarily
due to lower demand for legacy voice and data services and product
simplification. Also contributing to the decline was lower revenues
from the government sector. Partially offsetting revenue declines
was growth in connectivity services and revenues of approximately
$100 from intellectual property sales. Business Wireline operating
expenses totaled $4.8 billion, down 3.0 percent when compared to
the third quarter of 2021 due to ongoing operational cost
efficiencies, credits from a benefit plan change and lower
amortization of deferred fulfillment costs, partially offset by
higher wholesale access network costs and depreciation expense.
Business Wireline operating income margin was 15.6 percent compared
to 16.9 percent in the year-earlier quarter.
Consumer Wireline
Consumer Wireline revenues for the third quarter of 2022 were $3.2
billion, up 1.4 percent versus the year-ago quarter, driven by
growth in broadband revenues attributable to fiber growth,
partially offset by declines in legacy voice and data services and
other services. Consumer Wireline operating expenses totaled $2.9
billion, down 3.6 percent versus the third quarter of 2021, largely
driven by lower network and customer support costs, fewer
employee-related costs, including impacts of a benefit plan change,
decreased HBO Max licensing fees and lower amortization of deferred
fulfillment costs. Partially offsetting these decreases were the
elimination of CAF II government credits, and higher bad debt and
depreciation expenses. Consumer Wireline operating income margin
was 10.4 percent compared to 5.7 percent in the year-earlier
quarter.
At September 30, 2022, Consumer Wireline had approximately
13.8 million broadband connections compared to
13.8 million at September 30, 2021. During the third
quarter, broadband subscriber net losses were 29,000, with fiber
broadband net adds of 338,000. Total broadband and DSL connections
were 14.1 million at September 30, 2022, compared to
14.2 million at September 30, 2021.
Latin America
Our Latin America segment consists of our Mexico business unit and
is subject to foreign currency fluctuations.
Revenues were $785 million, up 8.4 percent when compared to the
third quarter of 2021, primarily due to increased service revenues
driven by growth in wholesale revenue and subscribers. Operating
expenses were $848 million, down 0.7 percent, driven by lower
equipment costs partially offset by higher bad debt and
depreciation expenses. Mexico’s operating income margin was (8.0)
percent, compared to (18.0) percent in the year-earlier
quarter.
We had approximately 21.0 million Mexico wireless subscribers at
September 30, 2022 compared to 19.5 million at
September 30, 2021. During the third quarter of 2022, we had
postpaid net adds of 19,000 and prepaid net adds of
267,000.
CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING
STATEMENTS
Information set forth in this filing contains financial estimates
and other forward-looking statements that are subject to risks and
uncertainties. A discussion of factors that may affect future
results is contained in AT&T’s filings with the Securities and
Exchange Commission. AT&T disclaims any obligation to update or
revise statements contained in this filing based on new information
or otherwise.
Item 9.01 Financial Statements and Exhibits.
The following exhibits are furnished as part of this
report:
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(d)
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Exhibits |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL
document) |
Signature
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly
authorized.
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AT&T INC. |
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Date: October 20, 2022
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By: /s/
Debra L. Dial
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Debra L. Dial
Senior Vice President - Chief Accounting Officer
and Controller
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