REG - AT & T Inc. - Half-year Report 10-Q <Origin Href="QuoteRef">T.N</Origin> - Part 5
23/08/2017 16:51
- Part 5: For the preceding part double click ID:nRSW8233Od
special mandatory redemption feature described below. Details for the offering are as follows:
· $750 of floating rate notes due 2023.
· $1,750 of 2.850% global notes due 2023.
· $3,000 of 3.400% global notes due 2024.
· $5,000 of 3.900% global notes due 2027.
· $4,500 of 4.900% global notes due 2037.
· $5,000 of 5.150% global notes due 2050.
· $2,500 of 5.300% global notes due 2058.
For notes subject to mandatory redemption if we do not consummate the Time Warner acquisition pursuant to the merger
agreement on or prior to April 22, 2018, or, if prior to such date, the merger agreement is terminated, then in either
case, we must redeem certain of the notes at a redemption price equal to 101% of the principal amount of the notes, plus
accrued but unpaid interest.
During the first six months of 2017, we redeemed $6,118 of debt, primarily consisting of the following:
· $1,142 of 2.400% global notes due 2017.
· $1,000 of 1.600% global notes due 2017.
· $500 of floating rate notes due 2017.
· £750 of 5.875% global notes due 2017.
· $750 repayment of a private financing agreement with Export Development Canada due 2017.
· $1,150 of 1.700% global notes due 2017.
Our weighted average interest rate of our entire long-term debt portfolio, including the impact of derivatives, was
approximately 4.3% as of June 30, 2017, compared to 4.2% as of December 31, 2016. We had $142,816
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AT&T INC.
JUNE 30, 2017
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Dollars in millions except per share and per subscriber amounts
of total notes and debentures outstanding at June 30, 2017, which included Euro, British pound sterling, Swiss franc,
Brazilian real, Mexican peso and Canadian dollar denominated debt that totaled approximately $35,808.
As of June 30, 2017, we had approximately 388 million shares remaining from 2013 and 2014 authorizations from our Board of
Directors to repurchase shares of our common stock. During the first six months of 2017, we repurchased approximately 7
million shares totaling $279 under these authorizations. In 2017, we intend to use free cash flow (operating cash flows
less construction and capital expenditures) after dividends primarily to pay down debt.
We paid dividends of $6,021 during the first six months of 2017, compared with $5,899 for the first six months of 2016,
primarily reflecting the increase in the quarterly dividend approved by our Board of Directors in October 2016. Dividends
declared by our Board of Directors totaled $0.49 per share in the second quarter and $0.98 per share in the first six
months of 2017 and $0.48 per share in the second quarter and $0.96 for the first six months of 2016. Our dividend policy
considers the expectations and requirements of stockholders, capital funding requirements of AT&T and long-term growth
opportunities. It is our intent to provide the financial flexibility to allow our Board of Directors to consider dividend
growth and to recommend an increase in dividends to be paid in future periods. All dividends remain subject to declaration
by our Board of Directors.
At June 30, 2017, we had $10,831 of debt maturing within one year, $10,662 of which was related to long-term debt
issuances. Debt maturing within one year includes the following notes that may be put back to us by the holders:
· $1,000 of annual put reset securities issued by BellSouth that may be put back to us each April until maturity in 2021. No such put was exercised during April 2017.
· An accreting zero-coupon note that may be redeemed each May until maturity in 2022. In May 2017, $1 was redeemed by the holder for $1. If the remainder of the zero-coupon note (issued for principal of $500 in 2007) is held to maturity, the redemption amount will be $1,029.
Credit Facilities
The following summary of our various credit and loan agreements does not purport to be complete and is qualified in its
entirety by reference to each agreement filed as exhibits to our Annual Report on Form 10-K.
We use credit facilities as a tool in managing our liquidity status. In December 2015, we entered into a five-year $12,000
revolving credit agreement of which no amounts are outstanding as of June 30, 2017. We also have a $9,155 syndicated credit
agreement, of which $4,155 remains outstanding as of June 30, 2017 ($2,286 of which is payable March 2018).
We also enter into various credit arrangements supported by government agencies to support network equipment purchases.
In connection with our pending Merger with Time Warner, we have also entered into a $30,000 bridge loan credit agreement
("Bridge Loan") and a $10,000 term loan agreement ("Term Loan"). Following the June issuances of E7,000 global notes and
£1,000 global notes, we reduced the commitments under the Bridge Loan to $21,000. Upon settlement of our July 27, 2017,
debt offering, we expect to terminate our bridge loan credit agreement. No amounts will be borrowed under the Term Loan
prior to the closing of the Merger. Borrowings under the Term Loan will be used solely to finance a portion of the cash to
be paid in the Merger, the refinancing of debt of Time Warner and its subsidiaries and the payment of related expenses.
Each of our credit and loan agreements contains covenants that are customary for an issuer with an investment grade senior
debt credit rating as well as a net debt-to-EBITDA financial ratio covenant requiring AT&T to maintain, as of the last day
of each fiscal quarter, a ratio of not more than 3.5-to-1. As of June 30, 2017, we were in compliance with the covenants
for our credit facilities.
Collateral Arrangements
During the first six months of 2017, we received $957 of additional cash collateral, on a net basis, from banks and other
participants in our derivative arrangements. Subsequent to the end of the quarter, approximately $1,336 of additional
collateral has been returned to AT&T. Cash postings under these arrangements vary with changes in credit ratings and
netting agreements. (See Note 6)
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AT&T INC.
JUNE 30, 2017
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Dollars in millions except per share and per subscriber amounts
Other
Our total capital consists of debt (long-term debt and debt maturing within one year) and stockholders' equity. Our capital
structure does not include debt issued by our equity method investments. At June 30, 2017, our debt ratio was 53.3%,
compared to 50.5% at June 30, 2016, and 49.9% at December 31, 2016. Our net debt ratio was 43.8% at June 30, 2017, compared
to 47.6% at June 30, 2016 and 47.5% at December 31, 2016. The debt ratio is affected by the same factors that affect total
capital, and reflects our recent debt issuances and repayments.
During the first six months of 2017, we received $2,906 from the monetization of various assets, primarily the sale of
certain equipment installment receivables. We plan to continue to explore similar opportunities.
In 2013, we made a voluntary contribution of a preferred equity interest in AT&T Mobility II LLC (Mobility), the holding
company for our U.S. wireless operations, to the trust used to pay pension benefits under our qualified pension plans. The
preferred equity interest had a value of $8,294 as of June 30, 2017, and $8,477 as of December 31, 2016, does not have any
voting rights and has a liquidation value of $8,000. The trust is entitled to receive cumulative cash distributions of $560
per annum, which are distributed quarterly in equal amounts. We distributed $280 to the trust during the first six months
of 2017. So long as we make the distributions, the terms of the preferred equity interest will not impose any limitations
on our ability to declare a dividend or repurchase shares.
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AT&T INC.
JUNE 30, 2017
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Dollars in millions except per share and per subscriber amounts
DISCUSSION AND RECONCILIATION OF NON-GAAP MEASURE
We believe the following measure is relevant and useful information to investors as it is used by management as a method of
comparing performance with that of many of our competitors. This supplemental measure should be considered in addition to,
but not as a substitute of, our consolidated and segment financial information.
Supplemental Operational Measure
We provide a supplemental discussion of our domestic wireless operations that is calculated by combining our Consumer
Mobility and Business Solutions segments, and then adjusting to remove non-wireless operations. The following table
presents a reconciliation of our supplemental AT&T Mobility results.
Three Months Ended
June 30, 2017 June 30, 2016
Consumer Mobility Business Solutions Adjustments 1 AT&T Mobility Consumer Mobility Business Solutions Adjustments 1 AT&T Mobility
Operating Revenues
Wireless service $ 6,528 $ 8,006 $ - $ 14,534 $ 6,948 $ 7,963 $ - $ 14,911
Fixed strategic services - 3,028 (3,028 ) - - 2,805 (2,805 ) -
Legacy voice and data services - 3,508 (3,508 ) - - 4,162 (4,162 ) -
Other service and equipment - 844 (844 ) - - 874 (874 ) -
Wireless equipment 1,263 1,721 - 2,984 1,238 1,775 - 3,013
Total Operating Revenues 7,791 17,107 (7,380 ) 17,518 8,186 17,579 (7,841 ) 17,924
Operating Expenses
Operations and support 4,520 10,313 (4,636 ) 10,197 4,680 10,857 (5,036 ) 10,501
EBITDA 3,271 6,794 (2,744 ) 7,321 3,506 6,722 (2,805 ) 7,423
Depreciation and amortization 871 2,335 (1,214 ) 1,992 932 2,521 (1,372 ) 2,081
Total Operating Expense 5,391 12,648 (5,850 ) 12,189 5,612 13,378 (6,408 ) 12,582
Operating Income $ 2,400 $ 4,459 $ (1,530 ) $ 5,329 $ 2,574 $ 4,201 $ (1,433 ) $ 5,342
1 Non-wireless (fixed) operations reported in Business Solutions segment.
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AT&T INC.
JUNE 30, 2017
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Dollars in millions except per share and per subscriber amounts
Six Months Ended
June 30, 2017 June 30, 2016
Consumer Mobility Business Solutions Adjustments 1 AT&T Mobility Consumer Mobility Business Solutions Adjustments 1 AT&T Mobility
Operating Revenues
Wireless service $ 13,137 $ 15,935 $ - $ 29,072 $ 13,891 $ 15,818 $ - $ 29,709
Fixed strategic services - 6,002 (6,002 ) - - 5,556 (5,556 ) -
Legacy voice and data services - 7,138 (7,138 ) - - 8,535 (8,535 ) -
Other service and equipment - 1,661 (1,661 ) - - 1,733 (1,733 ) -
Wireless equipment 2,394 3,219 - 5,613 2,623 3,546 - 6,169
Total Operating Revenues 15,531 33,955 (14,801 ) 34,685 16,514 35,188 (15,824 ) 35,878
Operating Expenses
Operations and support 9,048 20,489 (9,342 ) 20,195 9,592 21,659 (10,126 ) 21,125
EBITDA 6,483 13,466 (5,459 ) 14,490 6,922 13,529 (5,698 ) 14,753
Depreciation and amortization 1,744 4,647 (2,402 ) 3,989 1,854 5,029 (2,746 ) 4,137
Total Operating Expense 10,792 25,136 (11,744 ) 24,184 11,446 26,688 (12,872 ) 25,262
Operating Income $ 4,739 $ 8,819 $ (3,057 ) $ 10,501 $ 5,068 $ 8,500 $ (2,952 ) $ 10,616
1 Non-wireless (fixed) operations reported in Business Solutions segment.
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AT&T INC.
JUNE 30, 2017
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Dollars in millions except per share amounts
At June 30, 2017, we had interest rate swaps with a notional value of $10,775 and a fair value of $15.
We have fixed-to-fixed and floating-to-fixed cross-currency swaps on foreign currency-denominated debt instruments with a
U.S. dollar notional value of $38,694 to hedge our exposure to changes in foreign currency exchange rates. These
derivatives have been designated at inception and qualify as cash flow hedges with a net fair value of $(2,337) at June 30,
2017.
Item 4. Controls and Procedures
The registrant maintains disclosure controls and procedures that are designed to ensure that information required to be
disclosed by the registrant is recorded, processed, summarized, accumulated and communicated to its management, including
its principal executive and principal financial officers, to allow timely decisions regarding required disclosure, and
reported within the time periods specified in the Securities and Exchange Commission's rules and forms. The chief executive
officer and chief financial officer have performed an evaluation of the effectiveness of the design and operation of the
registrant's disclosure controls and procedures as of June 30, 2017. Based on that evaluation, the chief executive officer
and chief financial officer concluded that the registrant's disclosure controls and procedures were effective as of June
30, 2017.
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AT&T INC.
JUNE 30, 2017
CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS
Information set forth in this report contains forward-looking statements that are subject to risks and uncertainties, and
actual results could differ materially. Many of these factors are discussed in more detail in the "Risk Factors" section.
We claim the protection of the safe harbor for forward-looking statements provided by the Private Securities Litigation
Reform Act of 1995.
The following factors could cause our future results to differ materially from those expressed in the forward-looking
statements:
· Adverse economic and/or capital access changes in the markets served by us or in countries in which we have significant investments, including the impact on customer demand and our ability and our suppliers' ability to access financial markets at favorable
rates and terms.
· Changes in available technology and the effects of such changes, including product substitutions and deployment costs.
· Increases in our benefit plans' costs, including increases due to adverse changes in the United States and foreign securities markets, resulting in worse-than-assumed investment returns and discount rates; adverse changes in mortality assumptions; adverse
medical cost trends; and unfavorable or delayed implementation or repeal of healthcare legislation, regulations or related court decisions.
· The final outcome of FCC and other federal, state or foreign government agency proceedings (including judicial review, if any, of such proceedings) involving issues that are important to our business, including, without limitation, special access and
business data services; intercarrier compensation; interconnection obligations; pending Notices of Apparent Liability; the transition from legacy technologies to IP-based infrastructure, including the withdrawal of legacy TDM-based services; universal
service; broadband deployment; wireless equipment siting regulations; E911 services; competition policy; privacy; net neutrality, including the FCC's order classifying broadband as Title II services subject to much more comprehensive regulation; unbundled
network elements and other wholesale obligations; multi-channel video programming distributor services and equipment; availability of new spectrum, on fair and balanced terms; and wireless and satellite license awards and renewals.
· The final outcome of state and federal legislative efforts involving issues that are important to our business, including deregulation of IP-based services, relief from Carrier of Last Resort obligations and elimination of state commission review of the
withdrawal of services.
· Enactment of additional state, local, federal and/or foreign regulatory and tax laws and regulations, or changes to existing standards and actions by tax agencies and judicial authorities including the resolution of disputes with any taxing jurisdictions,
pertaining to our subsidiaries and foreign investments, including laws and regulations that reduce our incentive to invest in our networks, resulting in lower revenue growth and/or higher operating costs.
· Our ability to absorb revenue losses caused by increasing competition, including offerings that use alternative technologies or delivery methods (e.g., cable, wireless, VoIP and over-the-top video service), subscriber reluctance to purchase new wireless
handsets, and our ability to maintain capital expenditures.
· The extent of competition including from governmental networks and other providers and the resulting pressure on customer totals and segment operating margins.
· Our ability to develop attractive and profitable product/service offerings to offset increasing competition.
· The ability of our competitors to offer product/service offerings at lower prices due to lower cost structures and regulatory and legislative actions adverse to us, including state regulatory proceedings relating to unbundled network elements and non
-regulation of comparable alternative technologies (e.g., VoIP).
· The continued development and delivery of attractive and profitable video offerings through satellite and IP-based networks; the extent to which regulatory and build-out requirements apply to our offerings; and the availability, cost and/or reliability of
the various technologies and/or content required to provide such offerings.
· Our continued ability to maintain margins, attract and offer a diverse portfolio of wireless service and devices and device financing plans.
· The availability and cost of additional wireless spectrum and regulations and conditions relating to spectrum use, licensing, obtaining additional spectrum, technical standards and deployment and usage, including network management rules.
· Our ability to manage growth in wireless video and data services, including network quality and acquisition of adequate spectrum at reasonable costs and terms.
· The outcome of pending, threatened or potential litigation (which includes arbitrations), including, without limitation, patent and product safety claims by or against third parties.
· The impact from major equipment failures on our networks, including satellites operated by DIRECTV; the effect of security breaches related to the network or customer information; our inability to obtain handsets, equipment/software or have handsets,
equipment/software serviced in a timely and cost-effective manner from suppliers; and in the case of satellites launched, timely provisioning of services from vendors; or severe weather conditions, natural disasters, pandemics, energy shortages, wars or
terrorist attacks.
· The issuance by the Financial Accounting Standards Board or other accounting oversight bodies of new accounting standards or changes to existing standards.
· Our ability to integrate our acquisition of DIRECTV.
· Our ability to close our pending acquisition of Time Warner Inc. and successfully integrate its operations.
· Our ability to adequately fund our wireless operations, including payment for additional spectrum, network upgrades and technological advancements.
· Our increased exposure to video competition and foreign economies, including foreign exchange fluctuations as well as regulatory and political uncertainty.
· Changes in our corporate strategies, such as changing network-related requirements or acquisitions and dispositions, which may require significant amounts of cash or stock, to respond to competition and regulatory, legislative and technological
developments.
· The uncertainty surrounding further congressional action to address spending reductions, which may result in a significant decrease in government spending and reluctance of businesses and consumers to spend in general.
· The uncertainty and impact of anticipated regulatory and corporate tax reform, which may impact the overall economy and incentives for business investments.
Readers are cautioned that other factors discussed in this report, although not enumerated here, also could materially
affect our future earnings.
48
AT&T INC.
JUNE 30, 2017
PART II - OTHER INFORMATION
Dollars in millions except per share amounts
Item 1A. Risk Factors
We discuss in our Annual Report on Form 10-K various risks that may materially affect our business. We use this section to
update this discussion to reflect material developments since our Form 10-K was filed. For the second quarter 2017, there
were no such material developments.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) A summary of our repurchases of common stock during the second quarter of 2017 is as follows:
Period (a) Total Number ofShares (or Units) Purchased 1, 2, 3 (b) Average Price PaidPer Share (or Unit) (c) Total Number ofShares (or Units)Purchased as Part ofPublicly AnnouncedPlans or Programs 1 (d) Maximum Number (orApproximate DollarValue) of Shares (orUnits) That May Yet BePurchased Under ThePlans or Programs
April 1, 2017 -April 30, 2017 12,802 $ 41.46 - 395,550,000
May 1, 2017 -May 31, 2017 7,272,174 38.43 7,254,000 388,296,000
June 1, 2017 -June 30, 2017 642,772 38.84 - 388,296,000
Total 7,927,748 $ 38.43 7,254,000
1 In March 2014, our Board of Directors approved an additional authorization to repurchase up to 300 million shares of our common
stock. In March 2013, our Board of Directors authorized the repurchase of up to an additional 300 million shares of our common stock.
The authorizations have no expiration date.
2 Of the shares repurchased, 46,300 shares were acquired through the withholding of taxes on the vesting of restricted stock
and performance shares or on the exercise price of options.
3 Of the shares repurchased, 627,448 shares were acquired through reimbursements from AT&T maintained Voluntary Employee Benefit
Association (VEBA) trusts.
49
AT&T INC.
JUNE 30, 2017
Item 6. Exhibits
Exhibits identified in parentheses below, on file with the Securities and Exchange Commission, are incorporated by
reference as exhibits hereto. Unless otherwise indicated, all exhibits so incorporated are from File No. 1-8610.
12 Computation of Ratios of Earnings to Fixed Charges
31 Rule 13a-14(a)/15d-14(a) Certifications31.1 Certification of Principal Executive Officer31.2 Certification of Principal Financial Officer
32 Section 1350 Certifications
101 XBRL Instance Document
50
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
August 3, 2017 AT&T Inc. /s/ John J. StephensJohn J. StephensSenior Executive Vice President and Chief Financial Officer
51
EXHIBIT 12
AT&T, INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Dollars in millions
Six Months EndedJune 30,(Unaudited) Year Ended December 31,
2017 2016 2016 2015 2014 2013 2012
Earnings:
Income from continuing operations before income taxes $ 11,448 $ 11,428 $ 19,812 $ 20,692 $ 10,355 $ 28,050 $ 10,496
Equity in net (income) loss of affiliates included above 159 (41) (98) (79) (175) (642) (752)
Fixed Charges 3,925 3,644 7,296 6,592 5,295 5,452 4,876
Distributed income of equity affiliates 8 19 61 30 148 318 137
Interest capitalized (473) (437) (892) (797) (234) (284) (263)
Earnings, as adjusted $ 15,067 $ 14,613 $ 26,179 $ 26,438 $ 15,389 $ 32,894 $ 14,494
Fixed Charges:
Interest expense $ 2,688 $ 2,465 $ 4,910 $ 4,120 $ 3,613 $ 3,940 $ 3,444
Interest capitalized 473 437 892 797 234 284 263
Portion of rental expense representative of interest factor 764 742 1,494 1,675 1,448 1,228 1,169
Fixed Charges $ 3,925 $ 3,644 $ 7,296 $ 6,592 $ 5,295 $ 5,452 $ 4,876
Ratio of Earnings to Fixed Charges 3.84 4.01 3.59 4.01 2.91 6.03 2.97
CERTIFICATION
I, Randall Stephenson, certify that:
1. I have reviewed this report on Form 10-Q of AT&T Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 3, 2017
/s/ Randall Stephenson
Randall Stephenson
Chairman of the Board,
Chief Executive Officer and President
CERTIFICATION
I, John J. Stephens, certify that:
1. I have reviewed this report on Form 10-Q of AT&T Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 3, 2017
/s/ John J. Stephens
John J. Stephens
Senior Executive Vice President
and Chief Financial Officer
Certification of Periodic Financial Reports
Pursuant to 18 U.S.C. Section 1350, each of the undersigned officers of AT&T Inc. (the "Company") hereby certifies that the
Company's Quarterly Report on Form 10-Q for the three months ended June 30, 2017 (the "Report") fully complies with the
requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
August 3, 2017 August 3, 2017
By: /s/ Randall Stephenson Randall Stephenson Chairman of the Board, Chief Executive Officer and President By: /s/ John J. Stephens John J. Stephens Senior Executive Vice Presidentand Chief Financial Officer
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of
the Report or as a separate disclosure document. This certification shall not be deemed "filed" for purposes of Section 18
of the Securities Exchange Act of 1934 ("Exchange Act") or otherwise subject to liability under that section. This
certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the
Exchange Act except to the extent this Exhibit 32 is expressly and specifically incorporated by reference in any such
filing.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or
otherwise adopting the signature that appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to AT&T Inc. and will be retained by AT&T Inc. and furnished to the Securities
and Exchange Commission or its staff upon request.
This information is provided by RNS
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