AT&T Report Fourth-Quarter, Full-Year Financials
Thursday, January 27, 2022 | Comments

AT&T reported fourth-quarter results that showed continuing customer growth in wireless and fiber. Over the quarter, AT&T received $500 million in reimbursements from the First Responder Network Authority (FirstNet) for reaching milestones in the FirstNet network buildout.

“A year and a half ago, we began simplifying our business to reposition AT&T for growth, and we’re extremely pleased with how we’ve executed on that commitment,” said AT&T CEO John Stankey. “We ended 2021 the way we started it, by growing our customer relationships, running our operations more effectively and efficiently, and sharpening our focus. Our momentum is strong and we’re confident there is more opportunity to continue to grow our customer base and drive costs from the business.

For the fourth quarter, revenues were up 5.1%, service revenues were up 4.6% and equipment revenues were up 6.2%. Operating income was $5.4 billion, up 5.2% year over year, and earnings before interest, depreciation and amortization (EBITDA) was up 4.3%. Operating income margin was 25.3%, and EBITDA service margin was 50.5%.

For full-year 2021 when compared with 2020 results, AT&T's consolidated revenues totaled $168.9 billion versus $171.8 billion, reflecting the separation of the U.S. Video business in the third quarter of 2021, and the impacts from other divested businesses. These decreases were partially offset by higher revenues in WarnerMedia and communications. Excluding impacts of U.S. Video and Vrio from both years, consolidated revenues totaled $153.2 billion, compared to $144.6 billion in 2020.

Operating expenses were $145.5 billion in 2021 compared with $165.4 billion in 2020. Expenses declined due to $14 billion lower non-cash asset impairments year over year, a partial year of U.S. Video in 2021 and impacts of other divested businesses. These declines were partially offset by higher WarnerMedia programming, marketing and selling costs, and higher domestic wireless equipment costs. Additionally, depreciation and amortization expenses were $5.7 billion lower year over year, largely due to the impairments of long-lived assets taken in 2020 and ceasing depreciation and amortization of held-for-sale businesses.

Operating income was $23.3 billion compared to $6.4 billion in the prior year, and operating income margin was 13.8% versus 3.7% the prior year. With adjustments for both years, operating income was $32.8 billion versus $34.1 billion in 2020, and operating income margin was 19.4% versus 19.8%.

2021 net income attributable to common stock was $19.9 billion, or $2.76 per diluted common share, versus a loss of $5.4 billion, or $0.75 per common share, in 2020. With adjustments for both years, earnings per diluted common share was $3.40 compared to $3.18 in 2020.

Cash from operating activities was $42 billion, down $1.2 billion year over year. Capital expenditures were $16.5 billion for the year. Gross capital investment totaled $21.6 billion, which includes $4.6 billion of cash payments for vendor financing and excludes $500 million of FirstNet reimbursements. Full-year free cashflow was $26.8 billion for the year, compared to $27.5 billion in 2020. The company’s free cashflow to total dividend payout ratio for the full year was 56%. Net debt increased by $8.7 billion in the year.

For the full year, including WarnerMedia and Xandr, the company expects consolidated revenue growth in the low-single digits range compared to 2021 consolidated revenues of $153.2 billion, which excludes U.S. Video and Vrio. The company expects adjusted earnings per share (EPS) from $3.10 to $3.15. Gross capital investment is expected to be in the $24 billion range with capital expenditures in the $20 billion range. 2022 free cash flow is expected to be in the $23 billion range.

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