10-KPeriod: FY2021

AT&T INC. Annual Report, Year Ended Dec 31, 2021

Filed February 16, 2022For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. reported revenues of $168.9 billion for the fiscal year ending December 31, 2021, a slight decrease from the previous year, primarily due to the separation of its U.S. video operations and the sale of its Latin America video operations. The company is strategically focusing on its core growth areas: 5G, fiber, and HBO Max. Significant progress has been made in expanding its fiber broadband footprint, adding over one million customers in 2021, and continuing its nationwide 5G deployment. Financially, AT&T is managing its debt levels, aiming to reduce leverage. The company announced plans to separate its WarnerMedia segment by combining it with Discovery, Inc., a transaction expected to close in the second quarter of 2022, which will reshape the company's media and entertainment assets. Despite ongoing investments in network upgrades and content, AT&T remains committed to returning value to shareholders through dividends and share repurchases, while navigating a competitive market and evolving consumer preferences.

Financial Highlights

49 data points
Beta

Revenue

$134.04B

Net Income

$20.08B

15.0% Net Margin

EPS (Diluted)

$2.73

Total Assets

$551.62B

Cash & Equivalents

$19.22B

Free Cash Flow

$41.96B

Financial Statements
Beta
Revenue$134.04B
SG&A Expenses$29.67B
Operating Expenses$108.14B
Operating Income$25.90B
Interest Expense$6.72B
Net Income$20.08B
EPS (Basic)$2.77
EPS (Diluted)$2.73
Shares Outstanding (Basic)7.17B
Shares Outstanding (Diluted)7.50B

Key Highlights

  • 1Revenue for the fiscal year ending December 31, 2021, was $168.9 billion, a 1.7% decrease compared to 2020.
  • 2The Communications segment generated $114.7 billion in revenue, an increase of 4.3% year-over-year, driven by Mobility and Consumer Wireline growth.
  • 3The WarnerMedia segment's revenue increased by 17.0% to $35.6 billion, boosted by subscription and content revenues, though it also experienced increased direct costs.
  • 4AT&T is strategically prioritizing investment in 5G network expansion and fiber broadband deployment, with fiber customers growing to nearly 6 million.
  • 5A significant corporate event is the pending combination of the WarnerMedia segment with Discovery, Inc., expected to close in Q2 2022, which will lead to the deconsolidation of WarnerMedia.
  • 6The company's net income attributable to common stock was $19.9 billion, a significant improvement from a net loss in the prior year, largely influenced by asset impairments in 2020.
  • 7AT&T paid dividends totaling $15.1 billion in 2021 and maintained its share repurchase program.

Frequently Asked Questions

AT&T's primary business segments are Communications, WarnerMedia, and Latin America. The Communications segment, representing about 74% of 2021 revenue, saw a 4.3% increase, driven by strong performance in Mobility and Consumer Wireline. WarnerMedia's revenue grew 17.0% to $35.6 billion, fueled by subscription and content revenues, although its operating contribution saw a decline. The Latin America segment experienced a revenue decrease of 6.3%.

In 2021, AT&T completed the separation of its U.S. video operations by forming DIRECTV Entertainment Holdings, LLC, and began accounting for it under the equity method. It also sold its Latin America video operations (Vrio). Most significantly, AT&T announced an agreement to combine its WarnerMedia segment with Discovery, Inc., a transaction anticipated to close in the second quarter of 2022, which will significantly alter its media and entertainment portfolio.

AT&T is focusing on managing its debt levels, with total debt at $177.4 billion at the end of 2021. The company generated $41.9 billion in cash from operations in 2021 and aims to fund its obligations through cash from operations, debt issuance, and asset sales. The upcoming WarnerMedia/Discovery transaction is expected to involve AT&T receiving approximately $43 billion, which is intended to be used for debt reduction.

AT&T's expected growth areas for the coming years are wireless and IP-based fiber broadband services. The company plans to continue its 5G deployment, expand its fiber footprint, and grow its HBO Max international subscriber base. Management expects revenue growth in wireless and broadband due to customer demand for higher speeds and connectivity, and in WarnerMedia from its streaming platform and premium content, despite ongoing shifts in consumer viewing habits.