AT&T Results Presentation Deck

11 Notes 1. "Standalone AT&T" results reflect the historical operating results of the company presented as continuing operations, and also excludes U.S. Video and other 2021 dispositions included in Corporate and Other. Standalone AT&T results are presented to provide 2Q21 results that are comparable to 2Q22 continuing operations financial data. For the current and future quarters, "standalone AT&T" is the same as Continuing Operations. See our Form 8-K dated July 21, 2022, for further discussion and information. Standalone AT&T revenues for 2Q21 of $29.0 billion is calculated as operating revenues from continuing operations of $35.7 billion less revenues of $6.7 billion from U.S. Video and other divested businesses. a. b. C. Adjusted operating income of standalone AT&T for 2Q21 of $5.7 billion is calculated as adjusted operating income from continuing operations of $7.5 billion less $1.8 billion from U.S. Video and other divested businesses, including a comparative adjustment applied to prior periods for estimated DIRECTV-related retained costs. Adjusted operating income margin of standalone AT&T for 2Q21 of 19.7% is calculated as adjusted operating income of standalone AT&T for 2Q21 of $5.7 billion divided by standalone AT&T revenues for 2Q21 of $29.0 billion. 2. EBITDA, EBITDA Margin and adjusted operating income are non-GAAP financial measures that are frequently used by investors and credit rating agencies to provide relevant and useful information. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures are provided in the Financial and Operational Schedules & Non-GAAP Reconciliations document on the company's Investor Relations website, investors.att.com. Adjusted EBITDA is 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 integrations and transaction costs, actuarial gains and losses, significant abandonments and impairment, severance and other material gains and losses. EBITDA and 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. 3. Free cash flow is a non-GAAP financial measure that is frequently used by investors and credit rating agencies to provide relevant and useful information. In 2Q22, free cash flow is cash from operating activities from continuing operations of $7.7 billion, plus cash distributions from DIRECTV classified as investing activities of $0.3 billion, minus capital expenditures from continuing operations of $4.9 billion and cash paid for vendor financing of $1.8 billion. Due to high variability and difficulty in predicting items that impact cash from operating activities, cash distributions from DIRECTV, capital expenditures and vendor financing payments, the company is not able to provide a reconciliation between projected free cash flow and the most comparable GAAP metric without unreasonable effort. 4. Capital investment includes capital expenditures and cash paid for vendor financing. In 2Q22, capital investment included $1.8 billion in vendor financing payments. Capital Investment for continuing operations is expected to be in the $24 billion range for 2022. Due to high variability and difficulty in predicting items that impact capital expenditures and vendor financing payments, the company is not able to provide a reconciliation between projected capital investment and the most comparable GAAP metrics without unreasonable effort. 5. Adjusted EPS from continuing operations is 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, severance and other material gains and losses. The company expects adjustments to 2022 reported diluted EPS from continuing operations (that excludes any impact of adoption of new accounting standards) to include the proportionate share of intangible amortization at the DIRECTV equity method investment in the range of $1.5 billion for 2022, a non-cash mark-to-market benefit plan gain/loss, and other items. The company expects the mark-to-market adjustment, which is driven by interest rates and investment returns that are not reasonably estimable at this time, to be a significant item. Our projected 2022 Adjusted EPS from continuing operations depends on future levels of revenues and expenses which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation between these projected non-GAAP metrics and the reported GAAP metrics without unreasonable effort. © 2022 AT&T Intellectual Property. 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