AT&T INC. : Regulation FD Disclosure, Financial Statements and Exhibits (Form 8-K)

Section 7.01 Disclosure of FD Rules.

At March 11, 2022, AT&T Inc. (AT&T or the Company) issued a press release providing an update on its strategy and financial outlook. The press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

AT&T also provides, for the convenience of its investors, additional operating information reflecting the repositioning of the Company’s assets, excluding the results of operations of subsequent pending and/or completed business dispositions. To see AT&T Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for more information on these transactions.

Warner Media in May 2021, AT&T entered into an agreement to combine its WarnerMedia segment, subject to certain exceptions, with a subsidiary of Discovery, Inc. (Discovery). The transaction (including the spin-off of the WarnerMedia segment, subject to certain exceptions) is expected to close in the second quarter of 2022, subject to Discovery shareholder approval and customary closing conditions, including receipt of regulatory approvals .

alexander in December 2021, AT&T entered into an agreement to sell the market component of alexanderwhich is expected to close in 2022, subject to customary closing conditions. alexander was excluded from the WarnerMedia/Discovery transaction, was accounted for as held for sale as of December 31, 2021and is reported in the WarnerMedia segment.

Playdemic In the third quarter of 2021, AT&T sold WarnerMedia’s mobile games application studio, Playdemic Ltd. (Playdemic). Playdemic was declared in the WarnerMedia segment and was excluded from the WarnerMedia/Discovery transaction.

Otter Media In the third quarter of 2021, AT&T sold almost all of the assets of Otter Media Fundwhich was reported in the WarnerMedia segment.

Vrio In the fourth quarter of 2021, AT&T sold his Latin America video operations, which were reported in the Latin America segment.

Video input July 2021, AT&T completed its transaction with TPG to form a new company named DIRECTV Entertainment Holdings, LLC (DIREC TV). The transaction resulted in our deconsolidation of the we the video business (including DIRECTV, AT&T TV and U-verse video services), with DIRECTV being accounted for using the equity method.

Other divestitures reported in Corporate and Other, including Crunchyroll anime business (sold in Q3 2021), Government Solutions (sold in Q1 2021), and wireless and wireline businesses in Porto Rico and the
US Virgin Islands (sold in the fourth quarter of 2020).

Upon closing of the WarnerMedia/Discovery transaction, WarnerMedia’s business will meet the discontinued business criteria, which will require AT&T to restate historical results to reflect continuing operations separately from discontinued operations. As authorized under we generally accepted accounting principles (GAAP), the Company expects to include all components of its unique strategic change plan, including divestitures that may not have individually met the criteria due to their materiality, in its presentation of discontinued operations , except for the video. The video does not meet the criteria for discontinuing activities due to AT&T ongoing involvement.

The information included in Exhibit 99.2 is intended to reflect the Company’s historical operating results, excluding the aforementioned activities, as if such a transfer had occurred in January 1, 2020, and reflects many, but not all, of the adjustments required for pro forma financial information prepared in accordance with Article 11 of Regulation SX. This additional pro forma information is not intended to be a complete presentation of AT&T operating results or financial condition. This pro forma presentation is presented for informational purposes only and does not purport to represent what AT&T operations would have been and do not purport to project results or operations for a future period. Accordingly, this information should not be considered as an indicator of future performance, financial condition or liquidity.

Adjustment to AT&T historical financial statements, including the removal of intercompany transactions, were primarily derived from amounts reported in AT&T Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The tax impact has been estimated using the adjusted effective tax rate, which may differ from actual results. Exhibit 99.1 excludes the adjustment for potential debt repayments. The actual amounts of these adjustments, including the actual pro forma tax impact and the actual adjustments for debt repayments, will be determined at closing and, therefore, the pro forma financial information AT&T
will file upon completion of the WarnerMedia/Discovery transaction may differ materially from the information presented in Exhibit 99.2. Investors are cautioned not to place undue reliance on this information.

Additionally, AT&T updates its definition of free cash flow to include payments for supplier financing, which are classified as financing activities. Free cash flow is a non-GAAP measure that management considers a measure of cash available to pay debt

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and return cash to shareholders and is defined as cash flow from operations and cash distributions from DIRECTV (classified as investing activities) less capital expenditures and cash paid for supplier financing.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

The information in this filing contains financial estimates, statements as to timing, completion and expected effects of WarnerMedia and alexander
transactions and other forward-looking statements that are subject to risks and uncertainties. These estimates and statements are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that could affect future results is contained in AT&T deposits with the
Security and Exchange Commission. AT&T disclaims any obligation to update or revise the statements contained in this file based on new information or otherwise

Item 9.01 Financial statements and supporting documents.

The following documents are provided as part of this report:

(d)      Exhibits

           99.1           Press Release of AT&T Inc., dated     March 11, 2022
           99.    2       Supplemental Pro Forma Financial Information
         104            Cover Page Interactive Data File (embedded within the Inline XBRL document)




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