AT&T INC.  Management's Report of Financial Condition and Results of Operations in millions of dollars, except per share amounts (Form 10-Q)

AT&T INC. Management’s Report of Financial Condition and Results of Operations in millions of dollars, except per share amounts (Form 10-Q)

OVERVIEW

AT&T Inc. is known as "we," "AT&T" or the "Firm" all through this
doc, and the names of the actual subsidiaries and associates offering
the providers typically have been omitted. AT&T is a holding firm whose
subsidiaries and associates function worldwide within the telecommunications and
know-how industries. Our comparative outcomes are impacted by the July 2021
separation of our Video enterprise. You must learn this dialogue in conjunction
with the consolidated monetary statements and accompanying notes (Notes).

Now we have two reportable segments: Communications and Latin America. Our phase
outcomes introduced in Be aware 4 and mentioned under observe our inner administration
reporting. Proportion will increase and reduces that aren't thought of significant
are denoted with a touch.

On April 8, 2022, we closed on our transaction to mix considerably all of
our WarnerMedia phase (WarnerMedia enterprise) with a subsidiary of Discovery,
Inc (Discovery). Upon the separation and distribution of WarnerMedia, the
WarnerMedia enterprise met the standards for discontinued operations. For
discontinued operations, we additionally evaluated transactions that had been parts of
AT&T's single plan of a strategic shift, together with tendencies that didn't
individually meet the standards resulting from materiality, and have decided
discontinued operations to be comprised of WarnerMedia, Vrio, Xandr and
Playdemic Ltd. These companies are mirrored in our historic monetary
statements as discontinued operations, together with for intervals previous to the
consummation of the WarnerMedia/Discovery transaction.

                                                   Third Quarter                          9-Month Interval
                                                                    P.c                                  P.c
                                          2022          2021        Change         2022          2021        Change
Working Revenues
Communications                         $ 29,131      $ 28,218         3.2  %    $ 86,702      $ 84,524         2.6  %
Latin America - Mexico                      785           724         8.4          2,283         2,043        11.7
Company and Different:
Company                                   127           188       (32.4)           413           546       (24.4)
Video                                         -         2,149           -              -        15,513           -

Held-for-sale and different
reclassifications                             -            64           -              -           453           -
Eliminations and consolidation                -           (17)          -              -          (136)          -
AT&T Working Revenues                  30,043        31,326        (4.1)        89,398       102,943       (13.2)

Working Earnings
Communications                            7,631         7,168         6.5         21,886        21,983        (0.4)
Latin America - Mexico                      (63)         (130)       51.5           (247)         (393)       37.2
Phase Working Earnings                  7,568         7,038         7.5         21,639        21,590         0.2
Company                                  (621)         (402)      (54.5)        (1,810)       (1,033)      (75.2)
Video                                         -           374           -              -         2,491           -
Held-for-sale and different
reclassifications                             -            33           -              -           147           -
Reclassification of prior service
credit                                    (731)         (670)       (9.1)        (1,961)       (2,011)        2.5
Merger and Vital Objects               (204)         (136)      (50.0)        (1,363)         (181)          -

AT&T Working Earnings                  $  6,012      $  6,237        (3.6) %    $ 16,505      $ 21,003       (21.4) %



                                       36
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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

The Communications phase supplies providers to companies and customers situated
within the U.S. and companies globally. Our enterprise methods replicate bundled
product choices that lower throughout product traces and make the most of shared belongings. This
phase accommodates the next enterprise items:
•Mobility supplies nationwide wi-fi service and gear.
•Enterprise Wireline supplies superior ethernet-based fiber providers, IP Voice and
managed skilled providers, in addition to conventional voice and information providers
and associated gear to enterprise clients.
•Client Wireline supplies broadband providers, together with fiber connections that
now present our multi-gig providers to residential clients. Client Wireline
additionally supplies legacy telephony voice communication providers.

The Latin America sector supplies wi-fi providers and gear in Mexico.

Within the first quarter of 2022, we reclassified into "Company" sure
administrative prices borne by AT&T the place the enterprise items don't affect
determination making to adapt with the present interval presentation. This recast
elevated Company operations and help bills by roughly $270 for
full-year 2021. Correspondingly, this recast lowered administrative bills at
AT&T's Communications operations and Video, with no change on a consolidated
foundation.

RESULTS OF OPERATIONS

Consolidated Outcomes Our monetary outcomes from persevering with operations are summarized within the feedback under. Extra evaluation is roofed in our “Phase Outcomes” part. Sure prior interval quantities have been reclassified to adapt to the present interval’s presentation.

                                                             Third Quarter                                           9-Month Interval
                                                                                  P.c                                                   P.c
                                             2022              2021               Change               2022              2021               Change
Working Revenues
Service                                   $ 24,731          $ 26,247                  (5.8) %       $ 72,998          $ 87,340                 (16.4) %
Gear                                    5,312             5,079                   4.6            16,400            15,603                   5.1
Whole Working Revenues                    30,043            31,326                  (4.1)           89,398           102,943                 (13.2)

Working bills
Operations and help                      19,517            20,632                  (5.4)           59,467            68,588                 (13.3)
Depreciation and amortization                4,514             4,457                   1.3            13,426            13,352                   0.6
Whole Working Bills                    24,031            25,089                  (4.2)           72,893            81,940                 (11.0)
Working Earnings                             6,012             6,237                  (3.6)           16,505            21,003                 (21.4)
Curiosity expense                             1,420             1,627                 (12.7)            4,548             5,090                 (10.6)

Fairness in internet revenue (loss) of

 associates                                    392               183                     -             1,417               159                     -
Different revenue (expense) - internet                 2,270             1,522                  49.1             6,729             6,958                  (3.3)
Earnings from Persevering with Operations
Earlier than Earnings Taxes                          7,254             6,315                  14.9            20,103            23,030                 (12.7)

Income from persevering with operations $6,346 $5,019

           26.4  %       $ 16,246          $ 18,574                 (12.5) %



Working revenues decreased within the third quarter and for the primary 9 months
of 2022, reflecting the July 31, 2021 separation of the U.S. video enterprise,
different enterprise divestitures that weren't included in discontinued operations
and decrease Enterprise Wireline revenues pushed by decrease demand for legacy providers
and product simplification. Partially offsetting declines had been greater Mobility
service and gear revenues and, to a lesser extent, good points in broadband
service in our Communications phase and progress in Mexico wi-fi operations.

Operations and help bills decreased within the third quarter and for the primary
9 months of 2022. The expense lower displays the separation of U.S. video
and 3G shutdown prices within the prior-year third quarter. Offsetting these
decreases had been expense will increase ensuing from noncash impairment costs in
the second quarter of 2022 of roughly $600, due primarily to up to date
community construct plans stemming from spectrum acquired in current auctions and
impairment of private
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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

protecting gear stock. Expense will increase had been additionally pushed by greater
home wi-fi gear expense from elevated gross sales volumes and the sale of
higher-priced smartphones, elevated wholesale community entry costs, elevated
dangerous debt expense and 3G community shutdown prices within the first quarter of 2022.
These will increase had been partially offset by our first-quarter 2022 updates to the
anticipated financial lives of buyer relationships, which prolonged the
amortization interval of deferred acquisition and achievement prices and lowered
bills roughly $85 within the third quarter and $340 for the primary 9
months, with $30 within the third quarter and $130 for the nine-month interval
recorded to Mobility, $25 within the third quarter and $100 for the nine-month
interval to Enterprise Wireline and $30 within the third quarter and $110 for the
nine-month interval to Client Wireline.

Depreciation and amortization expense elevated within the third quarter and for the
first 9 months of 2022.
Depreciation expense elevated $69, or 1.6% within the third quarter and $156, or
1.2% for the primary 9 months of 2022. The will increase had been primarily resulting from
ongoing capital spending for community upgrades and growth, partially offset by
updates to increase the estimated lives of our fiber belongings.

Amortization expense decreased $12, or 42.9% within the third quarter and $82, or
57.7% for the primary 9 months of 2022 reflecting the accelerated methodology of
amortization utilized to intangibles related to prior acquisitions.

Working revenue decreased within the third quarter and for the primary 9 months of
2022, reflecting the separation of the U.S. video enterprise. Our working revenue
margin for the third quarter elevated from 19.9% in 2021 to twenty.0% in 2022 and
for the primary 9 months decreased from 20.4% in 2021 to 18.5% in 2022.

Curiosity expense decreased within the third quarter and for the primary 9 months of 2022, primarily resulting from decrease debt balances and better capitalized curiosity related to spectrum acquisitions, partially offset by decrease rates of interest. greater curiosity.

Fairness in internet revenue of associates elevated within the third quarter and for the
first 9 months of 2022, primarily as a result of shut of our transaction with
TPG and our accounting for our funding in DIRECTV Leisure Holdings, LLC
(DIRECTV) underneath the fairness methodology of accounting starting August 1, 2021 (see
Be aware 11).

Different revenue (expense) - internet elevated within the third quarter and decreased for
the primary 9 months of 2022. The rise within the third quarter was primarily
pushed by the popularity of an actuarial achieve of $1,440 in comparison with $374 in
2021, partially offset by decrease returns on benefit-related investments and
profit expense accrual will increase that resulted from earlier 2022 quarterly
remeasurements of plan belongings and obligations, which included will increase within the
assumed low cost charges. Third-quarter 2022 profit expense contains
roughly $140 favorable affect from a retirement profit plan change, with
$115 ensuing from prior service credit (roughly $50 for Enterprise
Wireline, $40 for Client Wireline and $20 for Mobility) (see Be aware 6).

The lower for the primary 9 months resulted from the aforementioned decrease
returns on benefit-related investments, greater
profit expense accruals, and the affect of good points on funding and enterprise
gross sales within the prior 12 months. (see Be aware 6).

Earnings tax expense decreased within the third quarter and for the primary 9 months
of 2022. The lower within the third quarter was primarily pushed by one-time
advantages within the third quarter of 2022 offset by greater revenue earlier than revenue tax.
One-time advantages are primarily resulting from a tax election which generated
incremental tax profit on the sale of Vrio and audit settlements in 2022. Our
efficient tax charge was 12.5% within the third quarter of 2022, versus 20.5% within the
comparable interval within the prior 12 months.

The lower for the primary 9 months was primarily resulting from decrease revenue earlier than
revenue tax. Our efficient tax charge was 19.2% for the primary 9 months of 2022,
versus 19.3% for the comparable interval within the prior 12 months.
                                       38
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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

COMMUNICATIONS SEGMENT                            Third Quarter                          9-Month Interval
                                                                   P.c                                  P.c
                                         2022          2021        Change         2022          2021        Change
Phase Working Revenues
Mobility                              $ 20,278      $ 19,138         6.0  %    $ 60,279      $ 57,108         5.6  %
Enterprise Wireline                        5,668         5,938        (4.5)        16,903        18,036        (6.3)
Client Wireline                        3,185         3,142         1.4          9,520         9,380         1.5
Whole Phase Working Revenues        29,131        28,218         3.2         86,702        84,524         2.6

Phase Working Earnings
Mobility                                 6,419         5,987         7.2         18,484        18,038         2.5
Enterprise Wireline                          882         1,002       (12.0)         2,451         3,151       (22.2)
Client Wireline                          330           179        84.4            951           794        19.8

Phase Whole Working Earnings $7,631 $7,168 6.5%

$21,886 $21,983 (0.4)%

Chosen subscribers and connections

                                                    September 30,
(000s)                                            2022               2021
Mobility Subscribers                                 210,678       196,519
Whole home broadband connections                  15,452        15,510
Community entry traces in service                        5,466         6,404
U-verse VoIP connections                               3,022         3,440



Working revenues elevated within the third quarter and for the primary 9 months
of 2022, pushed by will increase in our Mobility and Client Wireline enterprise
items, partially offset by decreases in our Enterprise Wireline enterprise unit. The
will increase are primarily pushed by wi-fi service and gear income progress
and good points in broadband service. Enterprise Wireline continues to replicate decrease
demand for legacy providers and product simplification.

Working revenue elevated within the third quarter and decreased for the primary 9
months of 2022, reflecting will increase in our Mobility and Client Wireline
enterprise items, offset by decrease working revenue from our Enterprise Wireline
enterprise unit within the third quarter. Working revenue for the primary 9 months
displays decrease working revenue from our Enterprise Wireline enterprise unit,
partially offset by will increase in our Mobility and Client Wireline enterprise
items. Our Communications phase working revenue margin within the third quarter
elevated from 25.4% in 2021 to 26.2% in 2022 and for the primary 9 months of
the 12 months decreased from 26.0% in 2021 to 25.2% in 2022, reflecting, partially,
elevated gear gross sales with adverse margins.

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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

Communications Enterprise Unit Dialogue
Mobility Outcomes
                                                        Third Quarter                                          9-Month Interval
                                                                             P.c                                                  P.c
                                         2022              2021               Change              2022              2021               Change
Working revenues
Service                               $ 15,337          $ 14,527                  5.6  %       $ 45,065          $ 42,921                  5.0  %
Gear                                4,941             4,611                  7.2            15,214            14,187                  7.2
Whole Working Revenues                20,278            19,138                  6.0            60,279            57,108                  5.6

Working bills
Operations and help                  11,817            11,116                  6.3            35,677            32,998                  8.1
Depreciation and amortization            2,042             2,035                  0.3             6,118             6,072                  0.8
Whole Working Bills                13,859            13,151                  5.4            41,795            39,070                  7.0
Working Earnings                      $  6,419          $  5,987                  7.2  %       $ 18,484          $ 18,038                  2.5  %



The next tables spotlight different key measures of efficiency for Mobility:
Subscribers
                                                                                September 30,                          P.c
(in 000s)                                                               2022                      2021                  Change
Postpaid                                                                    83,614                  80,249                  4.2  %
Postpaid telephone                                                              68,969                  66,396                  3.9
Pay as you go                                                                     19,215                  19,028                  1.0
Reseller                                                                     5,854                   6,263                 (6.5)
Related devices1                                                         101,995                  90,979                 12.1
Whole Mobility Subscribers2                                                210,678                 196,519                  7.2  %

1Includes data-centric units similar to session-based tablets, surveillance units, and primarily wholesale automotive methods. 2Wireless subscribers to September 30, 2022 excludes the affect of 10,707 disconnections of subscribers and linked units ensuing from the shutdown of our 3G community in February 2022. Postpaid disconnects had been 899, together with 438 phone, 234 pay as you go, 749 reseller subscribers and eight,825 linked units. The third quarter contains an adjustment of roughly 170 subscribers, principally linked units.



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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

Web Additions
                                                              Third Quarter                                                     9-Month Interval
                                                                                        P.c                                                             P.c
(in 000s)                                    2022                   2021                 Change                 2022                   2021                 Change
Postpaid Cellphone Web Additions                      708                   928               (23.7)  %               2,212                  2,312                 (4.3)  %
Whole Cellphone Web Additions                         816                 1,177               (30.7)                  2,629                  2,942                (10.6)

Postpaid2                                         964                 1,218               (20.9)                  2,987                  3,197                 (6.6)
Pay as you go                                           141                   351               (59.8)                    488                    927                (47.4)
Reseller                                          308                  (164)                  -                     312                   (357)                   -
Related devices3                              5,716                 3,468                64.8                  15,476                 10,194                 51.8
Mobility Web Subscriber                         7,129                 4,873                46.3   %              19,263                 13,961                 38.0   %
Additions1

Postpaid Churn4                                  1.01  %               0.92  %                9  BP                0.96  %                0.91  %                 5  BP
Postpaid Cellphone-Solely Churn4                       0.84  %               0.72  %               12  BP                0.79  %                0.72  %                 7  BP
1Excludes migrations and acquisition-related actions in the course of the interval.
2In addition to postpaid telephones, contains tablets and wearables and different. Pill internet provides (losses) had been 33 and 34 for the three months ended September 30, 2022 and
2021 and 118 and (16) for the primary 9 months ended September 30, 2022 and 2021. Wearables and different internet provides had been 223 and 256 for the quarter ended September 30,
2022 and 2021 and 657 and 901 for the primary 9 months ended September 30, 2022 and 2021.
3Includes data-centric units similar to session-based tablets, monitoring units and primarily wholesale car methods. Excludes postpaid tablets and different
postpaid information units. Wholesale linked automotive internet provides had been roughly 2,600 for the quarter ended September 30, 2022 and seven,400 for the 9 months ended
September 30, 2022.
4Calculated by dividing the mixture variety of wi-fi subscribers who canceled service throughout a month divided by the overall variety of wi-fi subscribers on the
starting of that month. The churn charge for the interval is the same as the common of the churn charge for every month of that interval.



Service income elevated within the third quarter and for the primary 9 months of
2022. The will increase are largely resulting from progress from subscriber good points and postpaid
common income per subscriber (ARPU) progress.

ARPU

ARPU elevated within the third quarter and for the primary 9 months of 2022. ARPU
throughout 2022 displays pricing actions, improved worldwide roaming and
clients shifting to greater priced limitless plans, partially offset by the
affect of upper promotional low cost amortization (see Be aware 5).

Churn

The efficient administration of subscriber churn is vital to our capability to
maximize income progress and to keep up and enhance margins. Postpaid churn and
postpaid phone-only churn had been greater for the primary 9 months resulting from a return
to pre-pandemic client habits in addition to pricing actions and the ensuing
improve in each voluntary and involuntary disconnects.

Gear income elevated within the third quarter and for the primary 9 months
of 2022, primarily pushed by a better quantity of units bought and the sale of
higher-priced smartphones.

Operations and help bills elevated within the third quarter and for the primary
9 months of 2022 largely pushed by progress in gear gross sales and related
bills, dangerous debt expense, greater community prices and the elimination of Join
America Fund Part II (CAF II) authorities credit. HBO Max licensing charges and
FirstNet prices additionally contributed to will increase for the nine-month interval.
Offsetting will increase within the third quarter had been third-quarter 2021 3G community
shutdown prices. Within the first quarter of 2022, we up to date our evaluation of
financial lives of buyer relationships and prolonged the amortization interval of
Mobility deferred buyer contract prices, which decreased expense roughly
$30 and $130 within the third quarter and for the primary 9 months of 2022.

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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

Depreciation expense elevated within the third quarter and for the primary 9 months of 2022, primarily resulting from ongoing capital expenditures for community upgrades and growth, partially offset by discontinued use 3G community belongings.

Working revenue elevated within the third quarter and for the primary 9 months of
2022. Our Mobility working revenue margin within the third quarter elevated from
31.3% in 2021 to 31.7% in 2022 and for the primary 9 months decreased from
31.6% in 2021 to 30.7% in 2022. Our Mobility EBITDA margin within the third quarter
decreased from 41.9% in 2021 to 41.7% in 2022 and for the primary 9 months
decreased from 42.2% in 2021 to 40.8% in 2022. EBITDA is outlined as working
revenue excluding depreciation and amortization.

Relations with subscribers

Because the wi-fi business has matured, with practically full penetration of
smartphones within the U.S. inhabitants, future wi-fi progress will rely upon our
capability to supply modern providers, plans and units that bundle product
choices and benefit from our 5G wi-fi community. We consider 5G opens up
huge potentialities of connecting sensors, units, and autonomous issues,
generally known as the Web of Issues (IoT). Increasingly more, these
units are performing use instances that require excessive bandwidth, ultra-reliability
and low latency that solely 5G and edge computing can convey. To help greater
cellular information utilization, our precedence is to finest make the most of a wi-fi community that has
enough spectrum and capability to help these improvements on as broad a
geographic foundation as attainable.

Enterprise Wireline Outcomes
                                              Third Quarter                         9-Month Interval
                                                              P.c                                  P.c
                                     2022         2021        Change         2022          2021        Change
Working revenues
Service                            $ 5,524      $ 5,765        (4.2) %    $ 16,418      $ 17,497        (6.2) %
Gear                              144          173       (16.8)           485           539       (10.0)
Whole Working Revenues             5,668        5,938        (4.5)        16,903        18,036        (6.3)

Working bills
Operations and help               3,444        3,632        (5.2)        10,498        11,010        (4.7)
Depreciation and amortization        1,342        1,304         2.9          3,954         3,875         2.0
Whole Working Bills             4,786        4,936        (3.0)        14,452        14,885        (2.9)
Working Earnings                   $   882      $ 1,002       (12.0) %    $  2,451      $  3,151       (22.2) %



Service revenues decreased within the third quarter and for the primary 9 months of
2022, pushed by decrease demand for legacy voice and information providers and product
simplification. Additionally contributing to the decline was decrease revenues from the
authorities sector. Partially offsetting income declines was progress in
connectivity providers and revenues of roughly $100 from mental
property gross sales within the third quarter of 2022. We count on these total income
tendencies to proceed for the rest of the 12 months.

Gear income declined within the third quarter and for the primary 9 months of 2022, resulting from declines in conventional and non-essential providers.

Operations and help bills decreased within the third quarter and for the primary
9 months of 2022, primarily resulting from our continued efforts to drive
efficiencies in our community operations by means of automation and reductions in
buyer help bills by means of digitization, and credit from a third-quarter
2022 retirement profit plan change. Expense declines had been additionally pushed by decrease
amortization of deferred achievement prices, together with our first-quarter 2022
updates to the estimated financial lives of subscribers, which decreased expense
roughly $25 and $100 within the third quarter and for the primary 9 months of
2022. The declines had been partially offset by greater wholesale entry community
prices for the nine-month interval. As a part of our transformation actions, we
count on operations and help expense enhancements by means of the rest of 2022
and into 2023 as we dimension our operations in line with the strategic path
of the enterprise.

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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

Depreciation expense elevated within the third quarter and for the primary 9
months of 2022, primarily resulting from ongoing capital spending for community upgrades
and growth, partially offset by updates to increase the estimated lives of our
fiber belongings.

Working revenue decreased within the third quarter and for the primary 9 months of
2022. Our Enterprise Wireline working revenue margin within the third quarter
decreased from 16.9% in 2021 to fifteen.6% in 2022 and for the primary 9 months
decreased from 17.5% in 2021 to 14.5% in 2022. Our Enterprise Wireline EBITDA
margin within the third quarter elevated from 38.8% in 2021 to 39.2% in 2022 and
for the primary 9 months decreased from 39.0% in 2021 to 37.9% in 2022.

Client Wireline Outcomes
                                               Third Quarter                         9-Month Interval
                                                               P.c                                  P.c
                                      2022         2021        Change         2022          2021        Change
Working revenues
Broadband                           $ 2,429      $ 2,290         6.1  %    $   7,177      $ 6,761         6.2  %
Legacy voice and information providers          427          484       (11.8)          1,332        1,507       (11.6)
Different service and gear             329          368       (10.6)          1,011        1,112        (9.1)
Whole Working Revenues              3,185        3,142         1.4           9,520        9,380         1.5

Working bills
Operations and help                2,055        2,188        (6.1)          6,218        6,280        (1.0)
Depreciation and amortization           800          775         3.2           2,351        2,306         2.0
Whole Working Bills              2,855        2,963        (3.6)          8,569        8,586        (0.2)
Working Earnings                    $   330      $   179        84.4  %    $     951      $   794        19.8  %



The next tables spotlight different key measures of efficiency for Client
Wireline:
Connections
                                                                          September 30,               P.c
(in 000s)                                                               2022              2021        Change
Broadband Connections
Whole Broadband and DSL Connections                                         14,055       14,180        (0.9) %
Broadband                                                                   13,796       13,846        (0.4)
Fiber Broadband Connections                                                 

6,935 5,721 21.2

Voice Connections
Retail Client Switched Entry Strains                                        2,123        2,527       (16.0)
U-verse Client VoIP Connections                                            2,409        2,843       (15.3)
Whole Retail Client Voice Connections                                      4,532        5,370       (15.6) %



Web Additions
                                               Third Quarter                                                            9-Month Interval
                                                                                  P.c                                                         P.c
(in 000s)                               2022                   2021                Change                  2022                 2021               Change
Broadband Web Additions
Whole Broadband and DSL Web
Additions                                 (50)                      6                    -  %                  (105)               80                    -  %
Broadband Web Additions                   (29)                     28                    -                      (49)              153                    -
Fiber Broadband Web Additions             338                     289                 17.0  %                   943               770                 22.5  %


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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

Broadband revenues elevated within the third quarter and for the primary 9 months
of 2022, pushed by a rise in fiber clients, which we count on to proceed
for the foreseeable future as we make investments additional in constructing our fiber footprint.

Legacy voice and information service revenues decreased within the third quarter and for
the primary 9 months of 2022, reflecting the continued decline within the variety of
clients, which we count on to proceed.

Different service and gear revenues decreased within the third quarter and for the
first 9 months of 2022, reflecting the continued decline within the variety of
VoIP clients, which we count on to proceed.

Operations and help bills decreased within the third quarter and for the primary
9 months of 2022, primarily pushed by decrease community and buyer help
prices, fewer employee-related prices, together with the affect of a retirement
profit plan change, and decrease HBO Max licensing charges within the third-quarter of
2022. Additionally contributing to the decline was decrease amortization of deferred
achievement prices, together with our first-quarter 2022 updates to the estimated
financial lives of broadband/fiber subscribers, which decreased bills
roughly $30 within the third quarter and $110 for the primary 9 months of
2022. The declines had been partially offset by the elimination of CAF II authorities
credit, greater dangerous debt expense and promoting prices for the nine-month
interval.

Depreciation expense elevated within the third quarter and for the primary 9
months of 2022, primarily resulting from ongoing capital spending for community upgrades
and growth, partially offset by updates to increase the estimated lives of our
fiber belongings.

Working revenue elevated within the third quarter and for the primary 9 months of
2022. Our Client Wireline working revenue margin within the third quarter
elevated from 5.7% in 2021 to 10.4% in 2022 and for the primary 9 months
elevated from 8.5% in 2021 to 10.0% in 2022. Our Client Wireline EBITDA
margin within the third quarter elevated from 30.4% in 2021 to 35.5% in 2022 and
for the primary 9 months elevated from 33.0% in 2021 to 34.7% in 2022.

LATIN AMERICA SEGMENT                                   Third Quarter                                         9-Month Interval
                                         2022              2021          P.c Change           2022              2021          P.c Change
Phase Working Revenues
Service                               $    559          $   463                 20.7  %       $   1,583          $ 1,349                 17.3  %
Gear                                  226              261                (13.4)               700              694                  0.9
Whole Phase Working
Revenues                                   785              724                  8.4              2,283            2,043                 11.7

Phase Working Bills
Operations and help                     684              697                 (1.9)             2,036            1,984                  2.6
Depreciation and amortization              164              157                  4.5                494              452                  9.3
Whole Phase Working
Bills                                   848              854                 (0.7)             2,530            2,436                  3.9
Working Earnings (Loss)               $    (63)         $  (130)                51.5  %       $    (247)         $  (393)                37.2  %


                                       44
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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities


The next tables spotlight different key measures of efficiency for Mexico:
                                                                                                                          September 30,                        P.c
(in 000s)                                                                                                        2022                      2021                 Change
Mexico Wi-fi Subscribers
Postpaid                                                                                                          4,854                      4,781                  1.5  %
Pay as you go                                                                                                          15,689                     14,199                 10.5
Reseller                                                                                                            455                        493                 (7.7)
Whole Mexico Wi-fi Subscribers                                                                                20,998                     19,473                  7.8  %

                                                                 Third Quarter                                                    9-Month Interval
                                                                                          P.c                                                              P.c
(in 000s)                                        2022                  2021                Change                2022                      2021                 Change
Mexico Wi-fi Web Additions
Postpaid                                               19                  36                (47.2) %                47                         85                (44.7) %
Pay as you go                                               267                 389                (31.4)                 632                        441                 43.3
Reseller                                               12                   2                    -                  (43)                         4                    -
Whole Mexico Wi-fi Web Additions                   298                 427                (30.2) %               636                        530                 20.0  %


Providers income elevated within the third quarter and for the primary 9 months of 2022, reflecting progress in wholesale providers and enhancing subscriber progress.

Gear income declined within the third quarter and elevated within the first 9 months of 2022. The decline within the third quarter was resulting from decrease gear gross sales. The rise for the primary 9 months is defined by the rise in gear gross sales.

Operations and help bills decreased within the third quarter and elevated for
the primary 9 months of 2022. The lower within the third quarter was pushed by
decrease gear prices ensuing from decrease gross sales, partially offset by dangerous debt
expense. The rise for the primary 9 months was resulting from greater dangerous debt,
partially offset by decrease gear prices within the third-quarter of 2022.
Roughly 7% of Mexico bills are U.S. greenback primarily based, with the rest in
the native forex.

Depreciation and amortization elevated within the third quarter and for the primary 9 months of 2022, reflecting a rise in belongings in service.

Working revenue improved within the third quarter and for the primary 9 months of
2022. Our Mexico working revenue margin within the third quarter elevated from
(18.0)% in 2021 to (8.0)% in 2022 and for the primary 9 months elevated from
(19.2)% in 2021 to (10.8)% in 2022. Our Mexico EBITDA margin within the third
quarter elevated from 3.7% in 2021 to 12.9% in 2022 and for the primary 9
months elevated from 2.9% in 2021 to 10.8% in 2022.

OTHER COMMERCIAL MATTERS

Spectrum Public sale On January 14, 2022, the Federal Communications Fee
(FCC) introduced that we had been the profitable bidder for 1,624 3.45 GHz licenses in
Public sale 110. We supplied the FCC with an upfront deposit of $123 within the third
quarter of 2021 and paid the remaining $8,956 within the first quarter of 2022, for
a complete of $9,079. We funded the acquisition value utilizing money and short-term
investments. We obtained the licenses in Might 2022, and categorised the public sale
deposits and associated capitalized curiosity as "Licenses - Web" on our September
30, 2022 consolidated stability sheet. (See Be aware 8)

In February 2021, the FCC introduced that we had been the profitable bidder for 1,621
C-Band licenses. We supplied the FCC an upfront deposit of $550 in 2020 and money
funds totaling $22,856 within the first quarter of 2021, for a complete of $23,406.
The licenses had been obtained in July 2021. Within the third quarter of 2022, we paid
$98 of compensable relocation prices for a complete of $1,703 Incentive Funds and
compensable relocation prices paid thus far for the C-Band licenses, with $1,605
paid in 2021. (See Be aware 8)
                                       45
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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities


WarnerMedia On April 8, 2022, we accomplished the separation and distribution of
our WarnerMedia enterprise, and merger of Magallanes, Inc. (Spinco), an AT&T
subsidiary fashioned to carry the WarnerMedia enterprise, with a subsidiary of
Discovery, Inc., which was renamed Warner Bros. Discovery Inc. (WBD). Every AT&T
shareholder was entitled to obtain 0.241917 shares of WBD frequent inventory for every
share of AT&T frequent inventory held as of the report date, which represented
roughly 71% of WBD. In reference to and in accordance with the phrases of
the Separation and Distribution Settlement (SDA), previous to the distribution and
merger, AT&T obtained roughly $40,400, which incorporates $38,800 of Spinco
money and $1,600 of debt retained by WarnerMedia. In the course of the second quarter,
belongings of roughly $121,100 and liabilities of $70,600 had been faraway from
our stability sheet in addition to $45,041 of retained earnings and $5,632 of
extra paid-in capital related to the transaction. Moreover, in
August 2022, we and WBD finalized the post-closing adjustment, pursuant to
part 1.3 of the SDA, which resulted in a $1,200 cost to WBD within the third
quarter of 2022. The $1,200 post-closing adjustment was included within the change
in extra paid-in capital for the three months ended June 30, 2022, and for
stability sheets ended June 30, 2022 and September 30, 2022. The cost was
accounted for as money utilized in financing actions in our assertion of money
flows in third quarter of 2022. (See Be aware 8)

AT&T, Spinco and Discovery entered right into a Tax Issues Settlement, which governs
the events' rights, tasks and obligations with respect to tax
liabilities and advantages, the preservation of the anticipated tax-free standing of
the transactions contemplated by the SDA, and different issues concerning taxes.

Moreover, we entered into an adjusted HBO Max settlement with WBD that
supplies us with expanded distribution rights and extra flexibility to
market and promote the service in a cost-efficient method. Underneath the phrases of the
settlement, we're permitted to incorporate HBO Max in our buyer choices in
change for a licensing charge. Moreover, AT&T has the best, however not the
obligation, to market and distribute HBO Max to its clients in plans, bundles,
and promotional provides.

Xandr On June 6, 2022, we accomplished the sale of {the marketplace} element of
Xandr to Microsoft Company. Xandr was mirrored in our historic monetary
statements as discontinued operations. (See Be aware 8)

COMPETITIVE AND REGULATORY ENVIRONMENT

Overview AT&T subsidiaries working inside america are topic to
federal and state regulatory authorities. AT&T subsidiaries working exterior
america are topic to the jurisdiction of nationwide and supranational
regulatory authorities within the markets the place service is supplied.

Within the Telecommunications Act of 1996 (Telecom Act), Congress established a
nationwide coverage framework supposed to convey the advantages of competitors and
funding in superior telecommunications services and providers to all
Individuals by opening all telecommunications markets to competitors and lowering
or eliminating regulatory burdens that hurt client welfare. Nonetheless, over
the following 20 years, the FCC and a few state regulatory commissions have
maintained or expanded sure regulatory necessities that had been imposed many years
in the past on our conventional wireline subsidiaries once they operated as authorized
monopolies. Extra just lately, the FCC has pursued a extra deregulatory agenda,
eliminating a wide range of antiquated and pointless laws and streamlining
its processes in a variety of areas. We proceed to help regulatory and
legislative measures and efforts, at each the state and federal ranges, to
scale back inappropriate regulatory burdens that inhibit our capability to compete
successfully and provide wanted providers to our clients, together with initiatives to
transition providers from conventional networks to all IP-based networks. On the
identical time, we additionally search to make sure that legacy laws will not be additional
prolonged to broadband or wi-fi providers, that are topic to vigorous
competitors.

The Inflation Discount Act of 2022 (Inflation Discount Act) was enacted on
August 16, 2022. The Inflation Discount Act imposes a brand new 15% company
different minimal tax (CAMT) on "relevant firms" for taxable years
starting after December 31, 2022. The CAMT is imposed to the extent the
different minimal tax exceeds an organization's common tax legal responsibility. An organization
that pays different minimal tax is eligible for a credit score in opposition to revenue tax in
future years. Topic to future regulatory steerage, we at present don't consider
the CAMT could have a cloth affect on our 2023 tax legal responsibility.

                                       46
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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

Communications Phase
Web The FCC at present classifies mounted and cellular client broadband
providers as info providers, topic to light-touch regulation. The D.C.
Circuit upheld the FCC's present classification, though it remanded three
discrete points to the FCC for additional consideration. These points associated to
the impact of the FCC's determination to categorise broadband providers as info
providers on public security, the regulation of pole attachments, and common
service help for low-income customers by means of the Lifeline program. As a result of
no social gathering sought Supreme Court docket assessment of the D.C. Circuit's determination to uphold
the FCC's classification of broadband as an info service, that call
is remaining.

In October 2020, the FCC adopted an order addressing the three points remanded
by the D.C. Circuit for additional consideration. After contemplating these points,
the FCC concluded they supplied no grounds to depart from its willpower that
mounted and cellular client broadband providers ought to be categorised as info
providers. An enchantment of the FCC's remand determination is pending.

Some states have adopted laws or issued govt orders, together with
California, that might reimpose internet neutrality guidelines just like these repealed
by the FCC. The California statute is now in impact, and challenges concerning
different states' internet neutrality legal guidelines are pending. We count on that going ahead
extra states might search to impose internet neutrality necessities.

On November 15, 2021, President Biden signed the Infrastructure Funding and
Jobs Act (IIJA) into legislation. The laws appropriates $65,000 to help
broadband deployment and adoption. The Nationwide Telecommunications and
Data Company (NTIA) is accountable for distributing greater than $48,000 of
this funding, together with $42,500 in state grants for broadband deployment
initiatives in unserved and underserved areas, $1,000 for center mile broadband
infrastructure, and $1,500 for digital fairness packages. On Might 13, 2022 NTIA
issued three Notices of Funding Alternative for these initiatives - the
Broadband Fairness, Entry, and Deployment Program, the Enabling Center Mile
Broadband Infrastructure Program, and the State Digital Fairness Program. NTIA
will proceed to manage and implement these packages. The IIJA additionally
appropriated $14,200 for institution of the Reasonably priced Connectivity Program
(ACP), an FCC-administered month-to-month, low-income broadband profit program,
changing the Emergency Broadband Profit program (established in December 2020
by the Consolidated Appropriations Act 2021). Qualifying clients can obtain
as much as thirty {dollars} per 30 days (or seventy-five {dollars} per 30 days for these on
Tribal lands) to help with their web invoice. AT&T is a taking part
supplier within the ACP program and can contemplate taking part within the deployment
program the place acceptable. The IIJA contains varied provisions which have
resulted in FCC proceedings concerning ACP program administration and client
safety, reform of the prevailing common help program, and broadband
labeling and equal entry.

Privateness-related laws continues to be adopted or thought of in a variety of
jurisdictions, together with on the federal stage. Legislative, regulatory and
litigation actions may lead to elevated prices of compliance, additional
regulation or claims in opposition to broadband web entry service suppliers and
others, and elevated uncertainty within the worth and availability of information.

Wi-fi Business-wide community densification and 5G know-how growth
efforts, that are wanted to fulfill in depth demand for video and web
entry, will contain important deployment of "small cell" gear. This
will increase the significance of native allowing processes that permit for the
placement of small cell gear within the public right-of-way on cheap
timelines and phrases. Between 2018 and 2020, the FCC adopted a number of Orders
streamlining federal, state, and native wi-fi construction assessment processes that
had the tendency to delay and impede deployment of small cell and associated
infrastructure used to supply telecommunications and broadband providers. The
key parts of those orders have been affirmed on judicial assessment. Throughout
2020-2021, now we have additionally deployed 5G nationwide on "low band" spectrum on macro
towers. Executing on the current spectrum buy, we introduced on-going
building and persevering with deployment of 5G on C-band spectrum in 2022 and
past.

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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

CASH AND CAPITAL RESOURCES

Operations continued for 9 months ended September 30, 2022

2021

Money supplied by working actions                       $ 25,464      $ 

29,093

Money utilized in investing actions                            (23,011)      

(28,528)

Money (utilized in) supplied by financing actions              (54,403)        8,453



                               September 30,       December 31,
                                    2022               2021
Money and money equivalents     $        2,423      $      19,223
Whole debt                           133,480            175,631



We had $2,423 in money and money equivalents accessible at September 30, 2022,
reducing $16,800 since December 31, 2021 and returning to historic
thresholds with the shut of the WarnerMedia/Discovery transaction. Money and
money equivalents included money of $1,132 and cash market funds and different money
equivalents of $1,291. Roughly $957 of our money and money equivalents had been
held by our international entities in accounts predominantly exterior of the U.S. and
could also be topic to restrictions on repatriation.

For the primary 9 months of 2022, money inflows had been primarily supplied by money
receipts from operations, together with money from our sale and switch of our
receivables to 3rd events, money obtained in reference to the separation
and distribution of the WarnerMedia enterprise, issuance of economic paper and
long-term debt and distributions from DIRECTV. These inflows had been exceeded by
money used to fulfill the wants of the enterprise, together with, however not restricted to,
cost of working bills, spectrum acquisitions, funding capital
expenditures and vendor financing funds, reimbursement of short-term borrowings
and long-term debt, and dividend funds to stockholders. We keep
availability underneath our credit score services and our industrial paper program to
meet our short-term liquidity necessities.

Money Offered by Working Actions from Persevering with Operations
In the course of the first 9 months of 2022, money supplied by working actions was
$25,464, in comparison with $29,093 for the primary 9 months of 2021, reflecting
working capital impacts together with greater funds for wi-fi units tied to
accelerated subscriber progress and timing of buyer collections. Though our
credit score insurance policies have been constant over the previous few years, buyer
collections started to pattern slower within the latter half of the second quarter of
2022 and remained comparatively steady within the third quarter when in comparison with the
second quarter of 2022, as clients returned to pre-pandemic cost tendencies.
Stimulus funds in the course of the pandemic contributed to raised assortment and dangerous
debt expense tendencies than historic ranges. Particularly, whereas dangerous debt expense
was barely greater than 2021, partially resulting from progress in our account base, it
was comparatively in line with 2019 (pre-pandemic) ranges.

We actively handle the timing of our provider funds for working gadgets to
optimize using our money. Amongst different issues, we search to make funds on
90-day or higher phrases, whereas offering the suppliers with entry to financial institution
services that let earlier funds at their price. As well as, for funds
to a key provider, as a part of our working capital initiatives, now we have
preparations that permit us to increase the acknowledged cost phrases by as much as 90 days
at a further price to us (known as provider financing). The online affect
of provider financing was to lower money from working actions $1,653 and
$1,803 for the 9 months ended September 30, 2022 and 2021, respectively. All
provider financing funds are due inside one 12 months.

Money Utilized in or Offered by Investing Actions from Persevering with Operations
For the primary 9 months of 2022, money utilized in investing actions totaled
$23,011, and consisted primarily of $15,397 (together with curiosity throughout
building) for capital expenditures and $9,959 for acquisitions of spectrum
licenses received in Public sale 110 and related capitalized curiosity. In the course of the
first 9 months of 2022, we obtained a return of funding of $2,205 from
DIRECTV representing distributions in extra of cumulative fairness in earnings
from DIRECTV (see Be aware 11).

For capital enhancements, now we have negotiated favorable vendor cost phrases of
120 days or extra (known as vendor financing) with a few of our distributors,
that are excluded from capital expenditures and reported as financing
actions. For the primary 9 months of 2022, vendor financing funds had been
$4,237, in comparison with $4,013 for the primary 9 months of 2021.
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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

Capital expenditures for the primary 9 months of 2022 had been $15,397, and when
together with $4,237 money paid for vendor financing, capital funding was $19,634
($3,570 greater than the prior-year comparable interval).

The overwhelming majority of our capital expenditures are spent on our networks,
together with product improvement and associated help methods. In the course of the first 9
months of 2022, we positioned $3,916 of apparatus in service underneath vendor financing
preparations (in comparison with $3,624 within the prior-year comparable interval) and
roughly $250 of belongings associated to the FirstNet construct (in comparison with $610 in
the prior-year comparable interval). The quantity of capital expenditures is
influenced by demand for providers and merchandise, capability wants and community
enhancements. Our capital expenditures and vendor financing funds are
elevated in 2022, reflecting strategic investments.

Money Offered by or Utilized in Financing Actions from Persevering with Operations
For the primary 9 months of 2022, money utilized in financing actions totaled
$54,403 and was comprised of debt issuances and repayments, funds of
dividends, vendor financing funds, and inventory repurchases. In the course of the first
9 months of 2022, we additionally paid roughly $1,070 in money on the be aware
payable to DIRECTV, with $271 remaining due as of September 30, 2022.

A abstract desk of our debt actions for the 9 months ended September 30, 2022 is as follows:

                                                     First           Second 

Third 9 months ended

                                                    Quarter          Quarter        Quarter     September 30, 2022
Web industrial paper borrowings                 $      1,471    $       (5,219)   $    (724)   $           (4,472)
Issuance of Notes and Debentures:
Personal Financing                                          -                 -          750                   750
Different                                                    479                 -            -                   479
Debt Issuances                                  $        479    $            -    $     750    $            1,229

Repayments:
2021 Syndicated Time period Mortgage                       $             - $       (7,350)   $       -    $           (7,350)
BAML Bilateral Time period Mortgage - Tranche A                       -            (1,000)           -                (1,000)
Personal financing                                          -              (750)           -                  (750)
Reimbursement of different short-term borrowings        $          -    $       (9,100)   $       -    $           (9,100)

USD notes1, 2, 3                                $       (123)   $      (18,957)   $       -    $          (19,080)
Euro notes                                                 -            (3,343)           -                (3,343)
BAML Bilateral Time period Mortgage - Tranche B                       -            (1,000)           -                (1,000)
Different                                                   (667)             (123)        (199)                 (989)
Repayments of long-term debt                    $       (790)   $      (23,423)   $    (199)   $          (24,412)
1On March 31, 2022, we issued a discover for the redemption in filled with the entire excellent $1,962 mixture
principal quantity of three.000% World Notes due June 30, 2022. We redeemed the notes on April 30, 2022 at 100% of the
principal quantity.
2On April 11, 2022, we issued notices for the redemption in filled with the entire excellent roughly $9,042
mixture principal quantity of assorted world notes due 2022 to 2026 with coupon charges starting from 2.625% to 4.450%
(Make-Complete Notes). The Make-Complete Notes had been redeemed on the redemption dates set forth within the notices of
redemption, at "make entire" redemption costs calculated as set forth within the respective redemption notices within the
second quarter.
3Includes $7,954 of money paid towards the $8,822 mixture principal quantity of assorted notes that had been tendered for
money in Might 2022. The notes had rates of interest ranging between 3.100% and eight.750% and unique maturities ranging
from 2026 to 2061.



The weighted common rate of interest of our total long-term debt portfolio,
together with credit score settlement borrowings and the affect of derivatives, was
roughly 4.1% as of September 30, 2022 and three.8% as of December 31, 2021. We
had $129,688 of whole notes and debentures excellent at September 30, 2022.
This additionally included Euro, British pound sterling, Canadian greenback, Mexican peso,
Australian greenback, and Swiss franc denominated debt that totaled roughly
$32,822.

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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

To September 30, 2022now we have had $9,626 money owed at lower than one 12 months, made up of $2,161 industrial paper borrowings, $750 borrowings underneath credit score settlement and $6,715 long-term debt points.

For the primary 9 months of 2022, we paid $4,237 of money underneath our vendor
financing program, in comparison with $4,013 within the prior-year comparable interval. Whole
vendor financing payables included in our September 30, 2022 consolidated
stability sheet had been $4,635, with $3,105 due inside one 12 months (in "Accounts payable
and accrued liabilities") and the rest predominantly due inside 5 years
(in "Different noncurrent liabilities").

At September 30, 2022, we had roughly 144 million shares remaining from
our share repurchase authorizations accepted by the Board of Administrators in 2014.
In the course of the first 9 months of 2022, we repurchased roughly 34 million
shares underneath the March 2014 authorization.

We paid dividends on the frequent and most well-liked shares of $7,845 within the first 9 months of 2022, in comparison with $11,319 for the primary 9 months of 2021.

Dividends on frequent inventory declared by our Board of Administrators totaled $0.8325 per
share within the first 9 months of 2022 and $1.56 per share within the first 9
months of 2021. Our dividend coverage considers the expectations and necessities
of stockholders, capital funding necessities of AT&T and long-term progress
alternatives. On February 1, 2022, we introduced that our Board of Administrators
accepted an anticipated annual dividend stage of $1.11 per frequent share, or
roughly $8,000 per 12 months, following the shut of the WarnerMedia/Discovery
transaction.

Subsequent to quarter finish, on October 24, 2022, roughly 105 million Collection
A Cumulative Perpetual Most popular Membership Pursuits in AT&T Mobility II LLC
(Mobility most well-liked pursuits) of the 319 million excellent had been put to AT&T
by a third-party investor. We paid roughly $2,600 money to redeem the
Mobility most well-liked curiosity, funded with industrial paper borrowings. As of
October 31, 2022, now we have roughly 213 million Mobility most well-liked pursuits
excellent, which have a redemption worth of roughly $5,300 and pay money
distributions of $373 every year, topic to declaration. Underneath the phrases of the
Mobility most well-liked pursuits, holders can put not more than 107 million pursuits
in any 12-month interval. In consequence, future places might be exercised within the fourth
quarter of 2023, on the earliest.

Credit score Amenities
The next abstract of our varied credit score and mortgage agreements doesn't purport
to be full and is certified in its entirety by reference to every settlement
filed as reveals to our Annual Report on Kind 10-Okay.

We use credit score services as a instrument in managing our liquidity standing. In November
2020, we amended one in every of our $7,500 revolving credit score agreements by extending the
termination date. In whole, now we have two $7,500 revolving credit score agreements,
totaling $15,000, with one terminating on December 11, 2023 and the opposite
terminating on November 17, 2025. No quantities had been excellent underneath both
settlement as of September 30, 2022.

On January 29, 2021, we entered right into a $14,700 Time period Mortgage Credit score Settlement (2021
Syndicated Time period Mortgage), with Financial institution of America, N.A., as agent. On March 23, 2021,
we borrowed $7,350 underneath the 2021 Syndicated Time period Mortgage and the remaining $7,350
of lenders' commitments had been terminated. Within the first quarter of 2022, the
maturity date of the 2021 Syndicated Time period Mortgage was prolonged to December 31,
2022. On April 13, 2022, the 2021 Syndicated Time period Mortgage was paid off and
terminated.

In March 2021, we entered into and drew on a $2,000 time period mortgage credit score settlement
(BAML Bilateral Time period Mortgage) consisting of (i) a $1,000 facility initially due
December 31, 2021 (BAML Tranche A Facility) and subsequently prolonged to
December 31, 2022 within the fourth quarter of 2021, and (ii) a $1,000 facility due
December 31, 2022 (BAML Tranche B Facility), with Financial institution of America, N.A., as
agent. On April 13, 2022, the BAML Bilateral Time period Mortgage was paid off and
terminated.

We additionally use different exterior sources of financing, which embrace varied government-backed credit score preparations to help community gear purchases and a industrial paper program.

Every of our credit score and mortgage agreements accommodates covenants which are customary for
an issuer with an funding grade senior debt credit standing in addition to a internet
debt-to-EBITDA monetary ratio covenant requiring AT&T to keep up, as of the
final day of every fiscal quarter by means of June 30, 2023, a ratio of no more than
4.0-to-1, and a ratio of no more than 3.5-to-1 for any fiscal quarter
thereafter. As of September 30, 2022, we had been in compliance with the covenants
for our credit score services.

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AT&T INC.
SEPTEMBER 30, 2022

Merchandise 2. Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations- Continued
{Dollars} in hundreds of thousands besides per share quantities

Collateral Preparations
Most of our counterparty collateral preparations require money collateral posting
by AT&T solely when by-product market values exceed sure thresholds. Underneath
these preparations, which cowl nearly all of our approximate $38,800
by-product portfolio, counterparties are nonetheless required to publish collateral.
In the course of the first 9 months of 2022, we posted roughly $1,640 of money
collateral, on a internet foundation. Money postings underneath these preparations fluctuate with
modifications in credit score scores and netting agreements. (See Be aware 7)

Different

Our whole capital consists of debt (long-term debt and debt maturing inside one
12 months) and stockholders' fairness. Our capital construction doesn't embrace debt
issued by our fairness methodology investments. At September 30, 2022, our debt ratio
was 48.8%, in comparison with 49.5% at September 30, 2021 and 48.9% at December 31,
2021. The debt ratio is affected by the identical elements that have an effect on whole capital,
and displays our current debt issuances and repayments.

CRITICAL ACCOUNTING ESTIMATES

Asset Valuations and Impairments As mentioned in Be aware 1 of our 2021 Annual
Report on Kind 10-Okay, goodwill and different indefinite-lived belongings are examined for
impairment at the very least yearly as of October 1, typically using a quantitative
strategy. Whereas an interim quantitative impairment was not warranted within the
third quarter of 2022, due to attainable sustained greater low cost charges and
declines within the worth of AT&T's frequent inventory, it's attainable that the guide
values of a number of of our reporting items will exceed their respective truthful
values, which can outcome within the recognition of a noncash impairment of goodwill
and/or indefinite-lived intangible belongings within the fourth quarter of 2022 that
could possibly be materials.

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