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TMCNet:  AT&T Reports 20 Percent Adjusted EPS Growth, Record-Low Fourth-Quarter Postpaid Churn, Solid Smartphone Gains and Continued Strong U-verse Momentum in Fourth-Quarter Results

[January 28, 2014]

AT&T Reports 20 Percent Adjusted EPS Growth, Record-Low Fourth-Quarter Postpaid Churn, Solid Smartphone Gains and Continued Strong U-verse Momentum in Fourth-Quarter Results

DALLAS --(Business Wire)--

AT&T Inc. (NYSE:T) today reported solid fourth-quarter results with strong revenue and EPS growth driven by continued gains in the company's key growth drivers - mobile and IP data, U-verse and strategic business services.

"2013 was the year of the network," said Randall Stephenson, AT&T chairman and CEO. "With Project VIP, we're delivering faster speeds and new services to millions more customers. And growth on these platforms is going strong. We exceeded build targets across the board. Our 4G LTE network is nearly complete and is the nation's most reliable with lightning-fast speeds. U-verse is rapidly expanding, and our fiber-to-the-business build is off to a fast start.

"The next steps are to make our networks even more powerful and layer on services that will drive new growth in the years ahead. We have good momentum in areas like connected car, home automation and mobile business solutions. We're also committed to transforming our operations to make them more responsive and efficient. To that end, we've launched Project Agile, a broad set of initiatives to streamline and improve every part of our business. Execution has begun and will be a focus area for us in 2014 and beyond."

Fourth-Quarter Financial Results

For the quarter ended December 31, 2013, AT&T's consolidated revenues totaled $33.2�billion, up 1.8 percent versus the year-earlier period. Compared with results for the fourth quarter of 2012, operating expenses were $20.9�billion versus $38.5�billion; operating income was $12.2�billion compared to a loss of $6.0�billion; and operating income margin was 36.9�percent compared to (18.3) percent. Adjusted operating expenses were $28.0 billion, compared to an adjusted $28.4 billion in the year-ago quarter, down 1.4 percent; operating income was $5.2 billion versus $4.2 billion a year ago; and operating income margin was 15.5 percent, up from 12.9 percent last year.

Fourth-quarter 2013 net income attributable to AT&T totaled $6.9�billion, or $1.31 per diluted share, compared to $(3.9)�billion, or $(0.68) per diluted share, in the year-earlier quarter. Adjusting for $0.89 from the non-cash actuarial gain on benefit plans and $(0.11) from other significant items (which included charges of $0.07 from debt redemption costs and $0.06 from employee separations, and a $0.02 gain from the sale of Am�rica M�vil shares), earnings per share was $0.53 compared to an adjusted $0.44 in the year-ago quarter, an increase of 20.5 percent.

Fourth-quarter 2013 cash from operating activities totaled $7.9�billion, and capital expenditures totaled $5.5�billion. Free cash flow - cash from operating activities minus capital expenditures - totaled $2.5�billion.

Full-Year Results

For full year 2013, compared with 2012 results, AT&T's consolidated revenues totaled $128.8�billion versus $127.4�billion; when excluding the divested Advertising Solutions business unit, revenues were up 1.9 percent for the year. Operating expenses reflect actuarial gains on benefit plans and were $98.3�billion, compared with $114.4�billion, down 14.1 percent; net income attributable to AT&T was $18.2�billion versus $7.3�billion; and earnings per diluted share was $3.39, compared with $1.25 in the prior year. With adjustments for both years, earnings per share totaled $2.50, compared with $2.31, an increase of 8.2 percent.

AT&T's full-year cash from operating activities was $34.8�billion, down from a record $39.2�billion in 2012 reflecting higher cash tax payments, timing of working capital payments and wireless device financing related to the AT&T Next program. Capital expenditures, including capitalized interest, totaled $21.2�billion versus $19.7�billion in 2012, as AT&T began its Project Velocity IP (Project VIP) build. Full-year free cash flow was $13.6�billion.

As part of its Project VIP-related LTE deployment, the company now covers nearly 280 million POPs. The company's LTE deployment is expected to be substantially complete by this summer.

Share Repurchases

During the quarter, the company repurchased 54 million of its shares for $1.9�billion. In 2013, the company repurchased 366�million shares, or more than 6 percent of outstanding shares, for $13.0�billion. The company expects to make future repurchases opportunistically.

Outlook

AT&T is on track to deliver the financial targets laid out with Project VIP. It expects solid revenue and earnings per share growth with stable margins while returning substantial value to shareowners.

In 2014, AT&T expects continued consolidated revenue growth in the 2 to 3 percent range, including strength in wireless service and wireline consumer revenues. The company also expects stable consolidated margins with continued improvement in wireless margins helping offset Project VIP pressure in wireline. Adjusted earnings per share growth is expected to be in the mid-single digit range excluding any impact from future share buybacks.

AT&T expects capital expenditures in the $21 billion range. Free cash flow is expected to be in the $11 billion range.

2014 outlook assumes no lift from the economy and excludes adjustments such as non-cash mark-to-market benefit-plan adjustments. It also excludes any impact from the planned acquisition of Leap Wireless.

WIRELESS OPERATIONAL HIGHLIGHTS

Reflecting the quality of the nation's most reliable 4G LTE network, AT&T delivered strong wireless revenue growth and postpaid ARPU gains, continued expansion of its high-value smartphone base and its lowest-ever fourth-quarter postpaid churn.* Highlights included:

Wireless Service Revenues Grow 4.8 Percent. Total wireless revenues, which include equipment sales, were up 4.5�percent year over year to $18.4�billion. Wireless service revenues increased 4.8�percent in the fourth quarter to $15.7�billion. Wireless data revenues increased 16.8�percent from the year-earlier quarter to $5.7�billion. Fourth-quarter wireless operating expenses totaled $14.5�billion, down 3.9�percent versus the year-earlier quarter, and wireless operating income was $3.9 billion, up 53.8 percent year over year.

Phone-Only Postpaid ARPU Increases 3.9 Percent. Postpaid phone-only ARPU increased 3.9 percent versus the year-earlier quarter. Total postpaid subscriber ARPU, which includes high-margin but lower-ARPU tablets, increased 2.1 percent versus the year-earlier quarter. This marked the 20th consecutive quarter AT&T has posted a year-over-year increase in postpaid ARPU. Postpaid data ARPU increased 15.4 percent versus the year-earlier quarter.

Smartphones and Tablets Drive Postpaid Growth. AT&T posted a net increase in total wireless subscribers of 809,000 in the fourth quarter. Subscriber additions for the quarter included postpaid net adds of 566,000. Postpaid net adds include 299,000 smartphones. Total branded smartphone net adds (both postpaid and prepaid) were 529,000. Total branded tablet net adds were 440,000.

Connected device net adds were 398,000. Prepaid had a net loss of 32,000 subscribers primarily due to declines in session-based tablets; however, prepaid revenues increased both year over year and sequentially. Reseller had a net loss of 123,000 subscribers primarily due to losses in low-revenue 2G subscriber accounts.

Record-Low Fourth-Quarter Postpaid Churn. The company had its lowest-ever fourth-quarter postpaid churn of 1.11�percent compared to 1.19 percent in the year-ago quarter. Total churn was stable at 1.43 percent versus 1.42 percent in the year-ago quarter. The strength of the network helped drive lower churn. About 90�percent of postpaid subscribers are on Mobile Share, FamilyTalk® or business plans, all of which have significantly lower churn than other postpaid subscribers.

Smartphones Reach Record 93 Percent of Phone Sales. AT&T added 1.2�million postpaid smartphones in the fourth quarter. At the end of the quarter, 77�percent, or 51.9�million, of AT&T's postpaid phone subscribers had smartphones, up from 70�percent, or 47.1�million, a year earlier. The company sold 7.9�million smartphones in the quarter. More than 1 million of those smartphone sales were on the new AT&T Next program. Smartphones accounted for a record 93�percent of postpaid phone sales in the quarter. AT&T's ARPU for smartphones is twice that of non-smartphone subscribers. More than half of AT&T's postpaid smartphone customers now use an LTE device, and 77 percent use a 4G-capable device (LTE/HSPA+).

Mobile Share Passes 21 Million Connections. Mobile Share plans now represent more than 21 million connections, or about 29 percent of postpaid subscribers. The number of Mobile Share accounts reached 7.1 million in the fourth quarter with an average of about three devices per account. Take rates on the higher-data plans continue to be strong with 30 percent of Mobile Share accounts choosing 10 gigabyte or higher plans.

The number of subscribers on usage-based data plans (tiered data and Mobile Share plans) continues to increase. About 73 percent, or 37.7�million, of postpaid smartphone subscribers are on usage-based data plans. This compares to 31.7 million a year ago. About 80 percent of customers on usage-based data plans have chosen the medium- and higher-data plans: 24 percent have chosen the higher plans, compared to 13 percent in the year-ago quarter.

Wireless Margins Expand. Wireless margins reflect lower year-over-year smartphone sales and upgrades, further revenue gains from the company's growing high-quality smartphone subscriber base and the impact from AT&T Next. AT&T's fourth-quarter wireless operating income margin was 21.4�percent versus 14.5�percent in the year-earlier quarter. AT&T's wireless EBITDA service margin was 37.4�percent, compared with 29.1�percent in the fourth quarter of 2012. (EBITDA service margin is operating income before depreciation and amortization, divided by total service revenues.)

WIRELINE OPERATIONAL HIGHLIGHTS

AT&T's fourth-quarter wireline results were led by continued wireline consumer revenue growth, strong U-verse gains and accelerating growth in strategic business services. Highlights included:

Wireline Revenues Up Sequentially. Total fourth-quarter wireline revenues were $14.7�billion, down 1.4�percent versus the year-earlier quarter and up 0.3 percent sequentially. Wireline service revenues were down 0.7 percent year over year. Total U-verse revenues grew 27.9�percent year over year and were up 7.0�percent versus the third quarter of 2013. Fourth-quarter wireline operating expenses were $13.3�billion, up 1.0 percent versus the fourth quarter of 2012. AT&T's wireline operating income totaled $1.5�billion, down 18.8 percent versus the fourth quarter of 2012. Fourth-quarter wireline operating income margin was 9.9�percent, down versus 12.0�percent in the year-earlier quarter, primarily due to declines in voice revenues, success-based growth, U-verse content costs and costs incurred as part of Project VIP.

Consumer Revenues Increase 2.9 Percent. Revenues from residential customers totaled $5.6�billion, an increase of 2.9�percent versus the fourth quarter a year ago and up 1.3 percent sequentially. Continued strong growth in consumer IP data services in the fourth quarter more than offset lower revenues from voice and legacy products. U-verse, which includes TV, high speed Internet and voice over IP, now represents 57 percent of wireline consumer revenues, up from 46�percent in the year-earlier quarter. Consumer U-verse revenues grew 26.8�percent year over year and were up 6.8�percent versus the third quarter of 2013.

Record-Low U-verse TV Churn. Total U-verse subscribers (TV and high speed Internet) reached 10.7�million in the fourth quarter. U-verse TV had the lowest-ever churn in its history. U-verse TV added 194,000 subscribers in the fourth quarter with an increase of 924,000 for the full year to reach 5.5 million in service. AT&T has more pay TV subscribers than any other telecommunications company. U-verse high speed Internet had a record fourth-quarter net gain of 630,000 subscribers, to reach a total of 10.4�million, and a record annual increase of 2.7 million, or 34 percent. Overall, total wireline broadband subscribers were essentially flat in the quarter but grew year over year. Total wireline broadband ARPU was up more than 7 percent year over year. Total U-verse high speed Internet subscribers now represent 63 percent of all wireline broadband subscribers compared with 47 percent in the year-earlier quarter.

About 59 percent of U-verse broadband subscribers have a plan delivering speeds up to 12�Mbps or higher. In the fourth quarter, more than 90�percent of new U-verse TV customers also signed up for U-verse high speed Internet. About two-thirds of AT&T U-verse TV subscribers take three or four services from AT&T. ARPU for U-verse triple-play customers continues to be more than $170. U-verse TV penetration of customer locations continues to grow and was at 21 percent at the end of the fourth quarter.

Strategic Business Services Revenue Growth Accelerating. Total revenues from business customers were $8.8�billion, down 3.4�percent versus the year-earlier quarter, and were essentially flat from the third quarter. Business service revenues declined 2.4�percent year over year and were down 0.3 percent compared with the third quarter of 2013. Overall, declines in legacy products were partially offset by continued double-digit growth in strategic business services. Revenues from these services, the next-generation capabilities that lead AT&T's most advanced business solutions - including VPN, Ethernet, cloud, hosting and other advanced IP services - grew 17.4�percent versus the year-earlier quarter. These services represent a $9 billion annualized revenue stream and are more than a quarter of business wireline revenues. During the fourth quarter, the company also added 78,000 business U-verse high speed broadband subscribers.

AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

About AT&T

AT&T Inc. (NYSE:T) is a premier communications holding company and one of the most honored companies in the world. Its subsidiaries and affiliates - AT&T operating companies - are the providers of AT&T services in the United States and internationally. With a powerful array of network resources that includes the nation's most reliable 4G LTE network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet, voice and cloud-based services. A leader in mobile Internet, AT&T also offers the best wireless coverage worldwide of any U.S. carrier, offering the most wireless phones that work in the most countries. It also offers advanced TV service with the AT&T U-verse® brand. The company's suite of IP-based business communications services is one of the most advanced in the world.

Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com/aboutus or follow our news on Twitter at @ATT, on Facebook at http://www.facebook.com/att and YouTube at http://www.youtube.com/att.

© 2014 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.

*Reliability claim based on data transfer completion rates on nationwide 4G LTE networks. 4G LTE availability varies.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise. This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company's website at www.att.com/investor.relations. Accompanying financial statements follow.

NOTE: EBITDA is defined as operating income before depreciation and amortization. EBITDA differs from Segment Operating Income (loss), as calculated in accordance with U.S. generally accepted accounting principles (GAAP), in that it excludes depreciation and amortization. EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with GAAP. Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies.

NOTE: Free cash flow is defined as cash from operations minus capital expenditures. We believe this metric provides useful information to our investors because management regularly reviews free cash flow as an important indicator of how much cash is generated by normal business operations, including capital expenditures, and makes decisions based on it. Management also views it as a measure of cash available to pay debt and return cash to shareowners.

NOTE: Adjusted Operating Income, Adjusted Operating Expenses, Adjusted Operating Revenues, Adjusted Operating Income Margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses and equity in net income of affiliates certain significant items that are non-operational or non-recurring in nature, including dispositions. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends. Adjusted Operating Income, Adjusted Operating Expenses, Adjusted Operating Revenues, Adjusted Operating Income Margin and Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculations of Adjusted Operating Income and Adjusted diluted EPS, as presented, may differ from similarly titled measures reported by other companies.



Financial Data
AT&T Inc.
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited Three Months Ended Twelve Months Ended
12/31/2013 12/31/2012 % Chg 12/31/2013 12/31/2012 % Chg
Operating Revenues $ 33,163 $ 32,578 1.8 % $ 128,752 $ 127,434 1.0 %
Operating Expenses

Cost of services and sales (exclusive of depreciation and amortization shown separately below)

12,237 17,555 -30.3 % 51,464 55,228 -6.8 %
Selling, general and administrative 4,008 16,409 -75.6 % 28,414 41,066 -30.8 %
Depreciation and amortization 4,680 4,572 2.4 % 18,395 18,143 1.4 %
Total Operating Expenses 20,925 38,536 -45.7 % 98,273 114,437 -14.1 %
Operating Income (Loss) 12,238 (5,958 ) - 30,479 12,997 -
Interest Expense 1,459 820 77.9 % 3,940 3,444 14.4 %
Equity in Net Income of Affiliates 148 215 -31.2 % 642 752 -14.6 %
Other Income (Expense) - Net 226 12 - 596 134 -
Income (Loss) Before Income Taxes 11,153 (6,551 ) - 27,777 10,439 -
Income Tax Expense (Benefit) 4,158 (2,772 ) - 9,224 2,900 -
Net Income (Loss) 6,995 (3,779 ) - 18,553 7,539 -
Less: Net Income Attributable to Noncontrolling Interest (82 ) (78 ) -5.1 % (304 ) (275 ) -10.5 %
Net Income (Loss) Attributable to AT&T $ 6,913 $ (3,857 ) - $ 18,249 $ 7,264 -
Basic Earnings Per Share Attributable to AT&T $ 1.31 $ (0.68 ) - $ 3.39 $ 1.25 -

Weighted Average Common Shares Outstanding (000,000)

5,267 5,661 -7.0 % 5,368 5,801 -7.5 %
Diluted Earnings Per Share Attributable to AT&T $ 1.31 $ (0.68 ) - $ 3.39 $ 1.25 -

Weighted Average Common Shares Outstanding with Dilution (000,000)

5,283 5,680 -7.0 % 5,385 5,821 -7.5 %
Financial Data � � � � � AT&T Inc. Consolidated Balance Sheets Dollars in millions � December 31, � � � � � 2013 � � 2012 � Unaudited Assets Current Assets Cash and cash equivalents $ 3,339 $ 4,868 Accounts receivable - net of allowances for doubtful accounts of $483 and $547 12,918 12,657 Prepaid expenses 960 1,035 Deferred income taxes 1,199 1,036 Other current assets � � � � 4,780 � � � � 3,110 � � Total current assets � � � � 23,196 � � � � 22,706 � � Property, Plant and Equipment - Net 110,968 109,767 Goodwill 69,273 69,773 Licenses 56,433 52,352 Customer Lists and Relationships - Net 763 1,391 Other Intangible Assets - Net 5,016 5,032 Investments in and Advances to Equity Affiliates 3,860 4,581 Other Assets � � � � 8,278 � � � � 6,713 � � Total Assets � � � $ 277,787 � � � $ 272,315 � � �

Liabilities and Stockholders' Equity

Current Liabilities Debt maturing within one year $ 5,498 $ 3,486 Accounts payable and accrued liabilities 21,107 20,494 Advanced billing and customer deposits 4,212 4,225 Accrued taxes 1,774 1,026 Dividends payable � � � � 2,404 � � � � 2,556 � � Total current liabilities � � � � 34,995 � � � � 31,787 � � Long-Term Debt � � � � 69,290 � � � � 66,358 � � Deferred Credits and Other Noncurrent Liabilities Deferred income taxes 36,308 28,491 Postemployment benefit obligation 29,946 41,392 Other noncurrent liabilities � � � � 15,766 � � � � 11,592 � � Total deferred credits and other noncurrent liabilities � � � � 82,020 � � � � 81,475 � �

Stockholders' Equity

Common stock 6,495 6,495 Additional paid-in capital 91,091 91,038 Retained earnings 31,141 22,481 Treasury stock (45,619 ) (32,888 ) Accumulated other comprehensive income 7,880 5,236 Noncontrolling interest � � � � 494 � � � � 333 � �

Total stockholders' equity

� � � � 91,482 � � � � 92,695 � �

Total Liabilities and Stockholders' Equity

� � � $ 277,787 � � � $ 272,315 � � �
Financial Data � � � � � AT&T Inc. Consolidated Statements of Cash Flows Dollars in millions Unaudited Twelve Months Ended December 31, � � � � 2013 � � 2012 � � Operating Activities Net income $ 18,553 $ 7,539

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 18,395 18,143 Undistributed earnings from investments in equity affiliates (324 ) (615 ) Provision for uncollectible accounts 954 1,117 Deferred income tax expense 6,242 1,747 Net (gain) loss from sale of investments, net of impairments (492 ) (19 ) Actuarial (gain) loss on pension and postretirement benefits (7,584 ) 9,994 Changes in operating assets and liabilities: Accounts receivable (1,329 ) (1,365 ) Other current assets 412 1,017 Accounts payable and accrued liabilities (152 ) 1,798 Retirement benefit funding (209 ) - Other - net � � � � 330 � � � � (180 ) � Total adjustments � � � � 16,243 � � � � 31,637 � � Net Cash Provided by Operating Activities � � � � 34,796 � � � � 39,176 � � � Investing Activities Construction and capital expenditures: Capital expenditures (20,944 ) (19,465 ) Interest during construction (284 ) (263 ) Acquisitions, net of cash acquired (4,113 ) (828 ) Dispositions 1,923 812 Sales (purchases) of securities, net - 65 Return of advances to and investments in equity affiliates 301 - Other � � � � (7 ) � � � (1 ) � Net Cash Used in Investing Activities � � � � (23,124 ) � � � (19,680 ) � � Financing Activities

Net change in short-term borrowings with original maturities of three months or less

20 1 Issuance of other short-term borrowings 1,476 - Repayment of other short-term borrowings (1,476 ) - Issuance of long-term debt 12,040 13,486 Repayment of long-term debt (7,698 ) (8,733 ) Issuance of other long-term financing obligations 4,796 - Purchase of treasury stock (13,028 ) (12,752 ) Issuance of treasury stock 114 477 Dividends paid (9,696 ) (10,241 ) Other � � � � 251 � � � � 89 � � Net Cash Used in Financing Activities � � � � (13,201 ) � � � (17,673 ) � Net (decrease) increase in cash and cash equivalents (1,529 ) 1,823 Cash and cash equivalents beginning of year � � � � 4,868 � � � � 3,045 � � Cash and Cash Equivalents End of Year � � � $ 3,339 � � � $ 4,868 � � �
Financial Data � � � � � � � � � � � � � � � AT&T Inc. Statements of Segment Income Dollars in millions Unaudited � Three Months Ended � � Twelve Months Ended � � Wireless � � � 12/31/2013 � � 12/31/2012 � � % Chg � � 12/31/2013 � � 12/31/2012 � � % Chg � Segment Operating Revenues Data $ 5,729 $ 4,905 16.8 % $ 21,719 $ 18,297 18.7 % Voice, text and other service 9,931 10,044 -1.1 % 39,833 40,889 -2.6 % Equipment � � � � 2,777 � � � � 2,693 � � � 3.1 % � � � 8,347 � � � � 7,577 � � � 10.2 % � Total Segment Operating Revenues � � � � 18,437 � � � � 17,642 � � � 4.5 % � � � 69,899 � � � � 66,763 � � � 4.7 % � � Segment Operating Expenses Operations and support 12,576 13,296 -5.4 % 44,508 43,296 2.8 % Depreciation and amortization � � � � 1,915 � � � � 1,781 � � � 7.5 % � � � 7,468 � � � � 6,873 � � � 8.7 % � Total Segment Operating Expenses � � � � 14,491 � � � � 15,077 � � � -3.9 % � � � 51,976 � � � � 50,169 � � � 3.6 % � Segment Operating Income 3,946 2,565 53.8 % 17,923 16,594 8.0 % Equity in Net Income (Loss) of Affiliates � � � � (20 ) � � � (17 ) � � -17.6 % � � � (75 ) � � � (62 ) � � -21.0 % � Segment Income � � � $ 3,926 � � � $ 2,548 � � � 54.1 % � � $ 17,848 � � � $ 16,532 � � � 8.0 % � � Segment Operating Income Margin

21.4

%

14.5

%

25.6

%

24.9

%

Wireline � � � � � � � � � � � � � � � � � � � � Segment Operating Revenues Data $ 8,574 $ 8,119 5.6 % $ 33,593 $ 31,841 5.5 % Voice 4,863 5,463 -11.0 % 20,333 22,614 -10.1 % Other � � � � 1,279 � � � � 1,341 � � � -4.6 % � � � 4,888 � � � � 5,118 � � � -4.5 % � Total Segment Operating Revenues � � � � 14,716 � � � � 14,923 � � � -1.4 % � � � 58,814 � � � � 59,573 � � � -1.3 % � � Segment Operating Expenses Operations and support 10,501 10,358 1.4 % 41,638 41,207 1.0 % Depreciation and amortization � � � � 2,761 � � � � 2,775 � � � -0.5 % � � � 10,907 � � � � 11,123 � � � -1.9 % � Total Segment Operating Expenses � � � � 13,262 � � � � 13,133 � � � 1.0 % � � � 52,545 � � � � 52,330 � � � 0.4 % � Segment Operating Income 1,454 1,790 -18.8 % 6,269 7,243 -13.4 % Equity in Net Income (Loss) of Affiliates � � � � 1 � � � � - � � � - � � � � 2 � � � � (1 ) � � - � � Segment Income � � � $ 1,455 � � � $ 1,790 � � � -18.7 % � � $ 6,271 � � � $ 7,242 � � � -13.4 % � � Segment Operating Income Margin

9.9

%

12.0

%

10.7

%

12.2

%

Advertising Solutions � � � � � � � � � � � � � � � � � � � � Segment Operating Revenues � � � $ - � � � $ - � � � - � � � $ - � � � $ 1,049 � � � - � � � Segment Operating Expenses Operations and support - - - - 773 - Depreciation and amortization � � � � - � � � � - � � � - � � � � - � � � � 106 � � � - � � Total Segment Operating Expenses � � � � - � � � � - � � � - � � � � - � � � � 879 � � � - � � Segment Income � � � $ - � � � $ - � � � - � � � $ - � � � $ 170 � � � - � � � Segment Income Margin - - -

16.2

%

Other � � � � � � � � � � � � � � � � � � � � Segment Operating Revenues $ 10 $ 13 -23.1 % $ 39 $ 49 -20.4 % Segment Operating Expenses � � � � 756 � � � � 332 � � � - � � � � 1,336 � � � � 1,065 � � � 25.4 % � Segment Operating Income (Loss) (746 ) (319 ) - (1,297 ) (1,016 ) -27.7 % Equity in Net Income of Affiliates � � � � 167 � � � � 232 � � � -28.0 % � � � 715 � � � � 815 � � � -12.3 % � Segment Income (Loss) � � � $ (579 ) � � $ (87 ) � � - � � � $ (582 ) � � $ (201 ) � � - � � �
Financial Data � � � � � � � � � � � � � � � AT&T Inc. Supplementary Operating and Financial Data Dollars in millions except per share amounts, subscribers and connections in (000s) Unaudited � Three Months Ended � � Twelve Months Ended � � � � � 12/31/2013 � � 12/31/2012 � � % Chg � � 12/31/2013 � � 12/31/2012 � � % Chg � � Wireless Subscribers and Connections � � � � � � � � � � � � Total � � � � � � � � � 110,376 � � � � 106,957 � 3.2 % Postpaid 72,638 70,497 3.0 % Prepaid 7,384 7,328 0.8 % Reseller 14,028 14,875 -5.7 % Connected Devices 16,326 14,257 14.5 % � Wireless Net Adds � � � � � � � � � � � � Total � � � � 809 � � � � 1,094 � -26.1 % � � 2,721 � � � � 3,764 � -27.7 % Postpaid 566 780 -27.4 % 1,776 1,438 23.5 % Prepaid (32 ) (166 ) 80.7 % (13 ) 128 - Reseller (123 ) 234 - (1,074 ) 1,027 - Connected Devices 398 246 61.8 % 2,032 1,171 73.5 % M&A Activity, Partitioned Customers and Other Adjs. 107 (8 ) - 698 (54 ) - � Wireless Churn Postpaid Churn 1.11 % 1.19 % -8 BP 1.06 % 1.09 % -3 BP Total Churn 1.43 % 1.42 % 1 BP 1.37 % 1.35 % 2 BP � Other Licensed POPs (000,000) 317 313 1.3 % � Wireline Voice � � � � � � � � � � � � Total Wireline Voice Connections1 � � � � � � � � � 28,489 � � � � 32,184 � -11.5 % Net Change (807 ) (992 ) 18.6 % (3,695 ) (4,148 ) 10.9 % � Broadband � � � � � � � � � � � � Total Wireline Broadband Connections � � � � � � � � � 16,425 � � � � 16,390 � 0.2 % Net Change (2 ) (2 ) - 35 (37 ) - � Video � � � � � � � � � � � � Total U-verse Video Connections � � � � � � � � � 5,460 � � � � 4,536 � 20.4 % Net Change 194 192 1.0 % 924 745 24.0 % � Consumer Revenue Connections � � � � � � � � � � � � Broadband2 14,697 14,531 1.1 % U-verse Video Connections1 5,442 4,524 20.3 % Voice1,3 � � � � � � � � � 16,251 � � � � 18,612 � -12.7 % Total Consumer Revenue Connections1 � � � � � � � � � 36,390 � � � � 37,667 � -3.4 % Net Change (273 ) (386 ) 29.3 % (1,277 ) (1,839 ) 30.6 % � AT&T Inc. Construction and capital expenditures: Capital expenditures $ 5,379 $ 5,846 -8.0 % $ 20,944 $ 19,465 7.6 % Interest during construction $ 71 $ 66 7.6 % $ 284 $ 263 8.0 % Dividends Declared per Share $ 0.46 $ 0.45 2.2 % $ 1.81 $ 1.77 2.3 % End of Period Common Shares Outstanding (000,000) 5,226 5,581 -6.4 % Debt Ratio4 45.0 % 43.0 % 200 BP Total Employees 243,360 241,810 0.6 % �

1 Prior year amounts restated to conform to current period reporting methodology.

2 Consumer wireline broadband connections include DSL lines, U-verse High Speed Internet access and satellite broadband.

3 Includes consumer U-verse Voice over Internet Protocol connections of 3,848 as of December 31, 2013.

4 Total long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity.

Note: For the end of 4Q13, total switched access lines were 24,639, retail business switched access lines totaled 10,364, and wholesale, national mass markets and coin switched access lines totaled 1,872. Restated switched access lines do not include ISDN lines.

Financial Data � � � � � � � � � � � � � � � AT&T Inc. Non-GAAP Wireless Reconciliation Wireless Segment EBITDA Dollars in millions Unaudited Three Months Ended Twelve Months Ended � 12/31/12 � � 3/31/13 � � 6/30/13 � � 9/30/13 � � 12/31/13 � � 12/31/12 � � 12/31/13Segment Operating Revenues Data $ 4,905 $ 5,125 $ 5,356 $ 5,509 $ 5,729 $ 18,297 $ 21,719 Voice, text and other service 10,044 9,937 10,014 9,951 9,931 40,889 39,833 Equipment � � � � 2,693 � � � � 1,629 � � � � 1,921 � � � � 2,020 � � � � 2,777 � � � � 7,577 � � � � 8,347 � � Total Segment Operating Revenues � � � � 17,642 � � � � 16,691 � � � � 17,291 � � � � 17,480 � � � � 18,437 � � � � 66,763 � � � � 69,899 � � � Segment Operating Expenses Operations and support 13,296 10,180 10,770 10,982 12,576 43,296 44,508 Depreciation and amortization � � � � 1,781 � � � � 1,835 � � � � 1,843 � � � � 1,875 � � � � 1,915 � � � � 6,873 � � � � 7,468 � � Total Segment Operating Expenses � � � � 15,077 � � � � 12,015 � � � � 12,613 � � � � 12,857 � � � � 14,491 � � � � 50,169 � � � � 51,976 � � Segment Operating Income � � � � 2,565 � � � � 4,676 � � � � 4,678 � � � � 4,623 � � � � 3,946 � � � � 16,594 � � � � 17,923 � � Segment Operating Income Margin 14.5 % 28.0 % 27.1 % 26.4 % 21.4 % 24.9 % 25.6 % � Plus: Depreciation and amortization � � � � 1,781 � � � � 1,835 � � � � 1,843 � � � � 1,875 � � � � 1,915 � � � � 6,873 � � � � 7,468 � � EBITDA � � � $ 4,346 � � � $ 6,511 � � � $ 6,521 � � � $ 6,498 � � � $ 5,861 � � � $ 23,467 � � � $ 25,391 � � EBITDA as a % of Service Revenues1 29.1 % 43.2 % 42.4 % 42.0 % 37.4 % 40 % 41.3 % � EBITDA is defined as Operating Income Before Depreciation and Amortization. �

1 Service revenues is defined as Wireless data and voice, text and other service revenues.

Financial Data � � � � � � � � � AT&T Inc. Non-GAAP Consolidated Reconciliation Free Cash Flow Dollars in millions Unaudited Three Months Ended Twelve Months Ended December 31, December 31, � � � � 2012 � � 2013 � � 2012 � � 2013 � Net cash provided by operating activities $ 10,520 $ 7,917 $ 39,176 $ 34,796 Less: Construction and capital expenditures � � � � (5,912 ) � � � (5,450 ) � � � (19,728 ) � � � (21,228 )Free Cash Flow � � � $ 4,608 � � � $ 2,467 � � � $ 19,448 � � � $ 13,568 � � � � � � � � � � � � � � � � � � � � Free Cash Flow after Dividends Dollars in millions Unaudited Three Months Ended Twelve Months Ended December 31, December 31, � � � � 2012 � � 2013 � � 2012 � � 2013 � Net cash provided by operating activities $ 10,520 $ 7,917 $ 39,176 $ 34,796 Less: Construction and capital expenditures � � � � (5,912 ) � � � (5,450 ) � � � (19,728 ) � � � (21,228 )Free Cash Flow � � � � 4,608 � � � � 2,467 � � � � 19,448 � � � � 13,568 � � Less: Dividends paid � � � � (2,503 ) � � � (2,371 ) � � � (10,241 ) � � � (9,696 )Free Cash Flow After Dividends � � � $ 2,105 � � � $ 96 � � � $ 9,207 � � � $ 3,872 � � �

Free cash flow includes reimbursements of certain postretirement benefits paid.

Free cash flow is defined as cash from operations minus construction and capital expenditures. Free cash flow after dividends is defined as cash from operations minus construction, capital expenditures and dividends. We believe these metrics provide useful information to our investors because management regularly reviews free cash flow as an important indicator of how much cash is generated by normal business operations, including capital expenditures, and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.

Financial Data � � � � � � � � � � � AT&T Inc. Non-GAAP Consolidated Reconciliation Net-Debt-to-Adjusted-EBITDA Ratio Dollars in millions Unaudited Three Months Ended � � � � 3/31/13 � � 6/30/13 � � 9/30/13 � � 12/31/13 � � 2013 � Operating Revenues $ 31,356 $ 32,075 $ 32,158 $ 33,163 $ 128,752 Operating Expenses 25,416 25,962 25,970 20,925 98,273 Total Operating Income 5,940 6,113 6,188 12,238 30,479 Add Back Depreciation and Amortization 4,529 4,571 4,615 4,680 18,395 Consolidated Reported EBITDA 10,469 10,684 10,803 16,918 48,874 Add back: Actuarial (gain) / loss on benefit plan (7,584 ) (7,584 ) Consolidated Adjusted EBITDA 10,469 10,684 10,803 9,334 41,290 End-of-period current debt 5,498 End-of-period long-term debt 69,290 Total End-of-Period Debt 74,788 Less Cash and Cash Equivalents 3,339 Net Debt Balance � � � � � � � � � � � � � � � � 71,449 � � Net-Debt-to-Adjusted-EBITDA Ratio � � � � � � � � � � � � � � � � 1.73 � � �

Net-Debt-to-EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies. Management believes these measures provide relevant and useful information to investors and other users of our financial data. Net Debt is calculated by subtracting cash and cash equivalents from the sum of debt maturing within one year and long-term debt. The Net-Debt-to-EBITDA ratio is calculated by dividing the Net Debt by annualized EBITDA.

Adjusted EBITDA excludes all actuarial gains or losses ($7.6 billion gain in 2013) associated with our pension and postemployment benefit plans, which we immediately recognize in the income statement, pursuant to our accounting policy for the recognition of actuarial gains/losses. As a result, Adjusted EBITDA reflects an expected return on plan assets of $4.0 billion (based on an average expected return on plan assets of 7.75%), rather than the actual return on plan assets of $7.2 billion (actual return of 14.1%), as included in the GAAP measure of income.

Our calculation of Adjusted EBITDA, as presented, may differ from similarly titled measures reported by other companies.

Financial Data � � � � � � � � � AT&T Inc. Non-GAAP Financial Reconciliation Adjusted Operating Revenues, Operating Income and Margin Dollars in millions Unaudited Three Months Ended Twelve Months Ended December 31, December 31, � � � � 2012 � � 2013 � � 2012 � � 2013 � Reported Operating Revenues $ 32,578 $ 33,163 $ 127,434 $ 128,752 Adjustments: Removal of Advertising Solutions - - (1,049 ) - Storm Impacts � � � � 27 � � � � - � � � � 27 � � � � - � � Adjusted Operating Revenues � � � $ 32,605 � � � $ 33,163 � � � $ 126,412 � � � $ 128,752 � � Year-over-year growth - Adjusted � � � � � � � 1.7 % � � � � � � 1.9 % � �

Adjusted Operating Revenues is a non-GAAP financial measure calculated by excluding from operating revenues significant items that are non-operational or non-recurring in nature, including dispositions. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

Adjusted Operating Revenues should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculations of Adjusted Operating Revenues may differ from similarly titled measures reported by other companies.

� � � � Adjusted Operating Income Dollars in millions Unaudited Three Months Ended Twelve Months Ended December 31, December 31, � � � � 2012 � � 2013 � � 2012 � � 2013 � Reported Operating Income $ (5,958 ) $ 12,238 $ 12,997 $ 30,479 Adjustments: Removal of Advertising Solutions - - (170 ) - Storm Impacts 176 - 176 -

Actuarial (gain) / loss on benefit plan

9,994 (7,584 ) 9,994 (7,584 ) Employee separation charges - 501 - 501 Gain on transfer of wireless spectrum � � � � - � � � � - � � � � - � � � � (229 )Adjusted Operating Income � � � $ 4,212 � � � $ 5,155 � � � $ 22,997 � � � $ 23,167 � � Year-over-year growth - Adjusted � � � � � � � 22.4 % � � � � � � 0.7 %Adjusted Operating Income Margin* � � � � 12.9 % � � � 15.5 % � � � 18.2 % � � � 18.0 % � �

Adjusted Operating Income and Margin are non-GAAP financial measures calculated by excluding from operating revenues and operating expenses significant items that are non-operational or non-recurring in nature. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

Adjusted Operating Income and Margin exclude all actuarial gains or losses ($7.6 billion gain in 2013) associated with our pension and postemployment benefit plans, which we immediately recognize in the income statement, pursuant to our accounting policy for the recognition of actuarial gains/losses. As a result, Adjusted Operating Income and Margin reflect an expected return on plan assets of $4.0 billion (based on an average expected return on plan assets of 7.75%), rather than the actual return on plan assets of $7.2 billion (actual return of 14.1%), as included in the GAAP measure of income.

Adjusted Operating Income and Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculation of Adjusted Operating Income and Margin, as presented, may differ from similarly titled measures reported by other companies.

*Adjusted Operating Income Margin is calculated by dividing Adjusted Operating Income by Adjusted Operating Revenues.

Financial Data � � � � � AT&T Inc. Non-GAAP Consolidated Reconciliation Adjusted Operating Expenses Dollars in Millions Unaudited Three Months Ended December 31, � � � � 2012 � � 2013 � Reported Operating Expenses $ 38,536 $ 20,925 Adjustments: Storm Impacts (149 ) - Actuarial gain / (loss) on benefit plan (9,994 ) 7,584 Employee separation charges � � � � - � � � � (501 )Adjusted Operating Expenses � � � $ 28,393 � � � $ 28,008 � � Year-over-year growth - Adjusted � � � � � � � -1.4 % � �

Adjusted Operating Expenses is a non-GAAP financial measure calculated by excluding from operating expenses significant items that are non-operational or non-recurring in nature. Management believes that this measure provides relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

Adjusted Operating Expenses excludes all actuarial gains ($7.6 billion in 2013) associated with our pension and postemployment benefit plans, which we immediately recognize in the income statement, pursuant to our accounting policy for the recognition of actuarial gains/losses. As a result, the Adjusted Operating Expenses reflects an expected return on plan assets of $4.0 billion (based on an average expected return on plan assets of 7.75%), rather than the actual return on plan assets of $7.2 billion (actual return of 14.1%), as included in the GAAP measure of income.

Adjusted Operating Expenses should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculation of Adjusted Operating Expenses, as presented, may differ from similarly titled measures reported by other companies.

Financial Data � � � � � � � � � AT&T Inc. Non-GAAP Consolidated Reconciliation Adjusted Diluted EPS AT&T Inc. Unaudited Three Months Ended Twelve Months Ended December 31, December 31, � � � � 2012 � � 2013 � � 2012 � � 2013 � Reported Diluted EPS $ (0.68 ) $ 1.31 $ 1.25 $ 3.39 Adjustments: Removal of Advertising Solutions - - (0.03 ) - Storm Impacts 0.02 - 0.02 - Actuarial (gain) / loss on benefit plan 1.10 (0.89 ) 1.07 (0.88 ) Gain on transfer of wireless spectrum - - - (0.03 ) Income tax settlement/items - - - (0.05 ) Early debt redemption costs - 0.07 - 0.07 Employee separation charges - 0.06 - 0.06 Am�rica M�vil - Gain from sale of shares � � � � - � � � � (0.02 ) � � � - � � � � (0.06 )Adjusted Diluted EPS � � � $ 0.44 � � � $ 0.53 � � � $ 2.31 � � � $ 2.50 � � Year-over-year growth - Adjusted � � � � � � � 20.5 % � � � � � � 8.2 % � �

Weighted Average Common Shares Outstanding with Dilution (000,000)

� � � � 5,680 � � � � 5,283 � � � � 5,821 � � � � 5,385 � � �

Adjusted Diluted EPS is a non-GAAP financial measure calculated by excluding from operating revenues, operating expenses and equity in net income of affiliates certain significant items that are non-operational or non-recurring in nature, including dispositions. Management believes that this measure provides relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

Adjusted Diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculation of Adjusted Diluted EPS, as presented, may differ from similarly titled measures reported by other companies.

EBITDA DISCUSSION

For AT&T, EBITDA is defined as operating income before depreciation and amortization. EBITDA service margin is calculated as EBITDA divided by service revenues. EBITDA differs from Segment Operating Income (Loss), as calculated in accordance with U.S. generally accepted accounting principles (GAAP), in that it excludes depreciation and amortization. EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with GAAP. Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies.

We believe these measures are relevant and useful information to our investors as they are part of AT&T's internal management reporting and planning processes and are important metrics that management uses to evaluate the operating performance of its wireless operations. These measures are used by management as a gauge of our success in acquiring, retaining and servicing wireless subscribers because we believe these measures reflect AT&T's ability to generate and grow subscriber revenues while providing a high level of customer service in a cost-effective manner. Management also uses these measures as a method of comparing our Wireless segment's performance with that of many of its competitors. The financial and operating metrics which affect EBITDA include the key revenue and expense drivers for which AT&T Mobility's operating managers are responsible and upon which we evaluate their performance.

EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA excludes other income (expense) - net, net income attributable to noncontrolling interest and equity in net income (loss) of affiliates, as these do not reflect the operating results of our wireless subscriber base and national footprint that we utilizes to obtain and service our customers. Equity in net income (loss) of affiliates represents AT&T Mobility's proportionate share of the net income (loss) of affiliates in which it exercises significant influence, but does not control. As AT&T Mobility does not control these entities, our management excludes these results when evaluating the performance of our primary operations. EBITDA excludes interest expense and the provision for income taxes. Excluding these items eliminates the expenses associated with its capitalization and tax structures. Finally, EBITDA excludes depreciation and amortization, in order to eliminate the impact of capital investments.

We believe EBITDA as a percentage of service revenues to be a more relevant measure of our Wireless segment operating margin than EBITDA as a percentage of total revenue. We generally subsidize a portion of our wireless handset sales, all of which are recognized in the period in which we sell the handset. Management views this equipment subsidy as a cost to acquire or retain a subscriber, which is recovered through the ongoing service revenue that is generated by the subscriber. We also use wireless service revenues to calculate margin to facilitate comparison, both internally and externally with our wireless competitors, as they calculate their margins using wireless service revenues as well.

There are material limitations to using these non-GAAP financial measures. EBITDA and EBITDA service margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies. Furthermore, these performance measures do not take into account certain significant items, including depreciation and amortization, interest expense, tax expense and equity in net income (loss) of affiliates, which directly affect our Wireless segment income. Management compensates for these limitations by carefully analyzing how its competitors present performance measures that are similar in nature to EBITDA as we present it, and considering the economic effect of the excluded expense items independently as well as in connection with its analysis of net income as calculated in accordance with GAAP. EBITDA and EBITDA service margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.

FREE CASH FLOW DISCUSSION

Free cash flow is defined as cash from operations minus construction and capital expenditures. Free cash flow after dividends is defined as cash from operations minus construction, capital expenditures and dividends. Free cash flow yield is defined as cash from continuing operations less construction and capital expenditures as a percentage of market capitalization computed on the last trading day of the quarter. Market capitalization is computed by multiplying the end of period stock price by the end of period shares outstanding. We believe these metrics provide useful information to our investors because management reviews free cash flow as an important indicator of how much cash is generated by normal business operations, including capital expenditures, and makes decisions based on it. Management also views it as a measure of cash available to pay debt and return cash to shareowners.

NET DEBT TO EBITDA DISCUSSION

Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and management believes these measures provide relevant and useful information to investors and other users of our financial data. The Net Debt to EBITDA ratio is calculated by dividing the Net Debt by annualized EBITDA. Net Debt is calculated by subtracting cash and cash equivalents from the sum of debt maturing within one year and long-term debt. Annualized EBITDA is calculated by annualizing the year-to-date EBITDA.

Adjusted EBITDA excludes net actuarial gains or losses associated with our pension and postemployment benefit plans, which we immediately recognize in the income statement, pursuant to our accounting policy for the recognition of actuarial gains/losses. As a result, the Adjusted EBITDA reflects an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income. This measure is consistent with metrics under our existing credit agreements.

ADJUSTING ITEMS DISCUSSION

Adjusted Operating Revenues, Adjusted Operating Income, Adjusted Operating Income Margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses and income tax expense certain significant items that are non-operational or non-recurring in nature, including dispositions. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

Adjusted Operating Revenues, Adjusted Operating Income, Adjusted Operating Income Margin and Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculations of Adjusted diluted EPS, as presented, may differ from similarly titled measures reported by other companies.


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