8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported)  July 23, 2013

AT&T INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-8610	43-1301883
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

208 S. Akard St., Dallas, Texas	75202
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (210) 821-4105

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01  Other Events.

Throughout this document, AT&T Inc. is referred to as “we” or “AT&T.” We are a holding company whose subsidiaries and affiliates operate in the communications services industry. Our subsidiaries and affiliates provide wireless and wireline telecommunications services and equipment both domestically and internationally.

We announced on July 23, 2013 that second-quarter 2013 net income attributable to AT&T totaled $3.8 billion, or $0.71 per diluted share, compared to net income attributable to AT&T of $3.9 billion, or $0.66 per diluted share, in the second quarter of 2012.  

Second-quarter 2013 revenues were $32.1 billion, up $500 million, or 1.6 percent, from the second-quarter 2012. The increase in revenues reflected higher wireless data and equipment revenues and increased wireline data revenues partially offset by declines in wireline voice and wireless voice and text revenues, as well as from the loss of directory revenues resulting from the second-quarter 2012 sale of our Advertising Solutions segment. Compared with results for the second quarter of 2012, operating expenses were $26.0 billion versus $24.8 billion; operating income was $6.1 billion, down from $6.8 billion; and AT&T's operating income margin was 19.1 percent, compared to 21.6 percent.

Revenues from our Wireless segment for the second-quarter of 2013 were $17.3 billion, up 5.7 percent versus the year-ago quarter. The increase in revenues reflected an increase in net subscribers and continued strong growth in data revenues. Second-quarter 2013 wireless operating expenses totaled $12.6 billion, up 11.8 percent versus the second quarter of 2012. AT&T’s wireless operating income margin was 27.1 percent compared to 31.0 percent in the year-ago quarter, reflecting increased smartphone sales and strong device upgrades partially offset by further revenue growth from the company’s high-value smartphone subscriber base.

We reported a net gain of 632,000 wireless subscribers in the second quarter of 2013, bringing our wireless customer base to approximately 107.9 million at June 30, 2013, compared to 105.2 million at June 30, 2012. During the second quarter, postpaid subscriber net adds were 551,000, net adds for connected devices were 484,000 and prepaid subscriber net adds were 11,000. Second-quarter postpaid net adds reflect the continued adoption of smartphones and sales of almost 398,000 tablets. Reseller had a net loss of 414,000, which was primarily due to losses in low-revenue accounts, but revenues increased almost 30 percent year over year. For the quarter, average revenue per postpaid subscriber increased 1.8 percent versus the year-earlier quarter due to strong data growth.

During the second quarter of 2013, smartphone sales were 6.8 million. At the end of the quarter, approximately 70 percent, or 35.1 million, of postpaid smartphone subscribers are on usage-based data plans, compared to about 62 percent, or 26.6 million, a year ago.

Postpaid churn was 1.02 percent, compared to 0.97 percent in the year-ago second quarter, and compared to 1.04 percent in the first quarter of 2013. Total customer churn was 1.36 percent versus 1.18 percent in the second quarter of 2012 and 1.38 percent in the first quarter of 2013.

Revenues from our Wireline segment for the second quarter of 2013 were $14.8 billion, a 0.9 percent decrease from the year-ago quarter and a 0.8 percent increase on a sequential quarterly basis. Revenues from our wireline business customers were $8.9 billion, a decrease of 2.2 percent from the year-ago quarter, reflecting continued declines in older circuit-based data services and voice partially offset by increases in IP-based data services. Revenues from our wireline consumer customers were $5.6 billion, an increase of 2.4 percent compared to the second-quarter 2012, driven by a continued increase in IP-based broadband and video revenues partially offset by the decline in voice revenues.

At June 30, 2013, our total switched access lines were 26.8 million compared with 31.6 million at June 30, 2012. The decline reflects continuing economic pressures on our customers as well as customers switching to another AT&T product like wireless and Voice over Internet Protocol (VoIP) and increasing competition from other wireless, VoIP and cable providers. Our total broadband connections were 16.5 million at June 30, 2013 and 16.4 million at June 30, 2012. U-verse High Speed Internet subscribers totaled 9.1 million at June 30, 2013, and now represent 55 percent of our total broadband base. At June 30, 2013, the number of U-verse video subscribers totaled 5.0 million, with a net gain of 233,000 subscribers in the second quarter of 2013. U-verse video penetration of customer locations continues to grow and was 20.1 percent at June 30, 2013. The number of U-verse voice connections (which use VoIP technology and therefore are not included in the access line total) increased by 259,000 in the quarter to reach 3.4 million.

Second-quarter wireline operating expenses totaled $13.1 billion, up 1.3 percent from the year-ago quarter. AT&T’s wireline operating margin was 11.1 percent, compared to 13.0 percent in the year-earlier quarter.

During the second quarter of 2013, we completed the second 300 million share repurchase authorization and began buying back stock under the third authorization. We repurchased approximately 89 million shares for $3.3 billion in the second quarter. At the end of the quarter, approximately 272 million shares remained on the third authorization. We expect to make future repurchases opportunistically.

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

Information set forth in this filing contains financial estimates and other forward-looking statements that are subject to risks and uncertainties. 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 filing based on new information or otherwise.

Item 9.01 Financial Statements and Exhibits.

The following exhibits are filed as part of this report:

(d)   Exhibits

99.1  AT&T Inc. selected financial statements and operating data.

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 hereunto duly authorized.

	AT&T INC.
Date: July 23, 2013	By: /s/ Paul W. Stephens        Paul W. Stephens Senior Vice President and Controller

EX-99.1

Financial Data
AT&T Inc.
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Three Months Ended										Six Months Ended
		6/30/2013			6/30/2012			% Chg			6/30/2013			6/30/2012			% Chg
Operating Revenues		$	32,075		$	31,575			1.6	%	$	63,431		$	63,397			0.1	%
Operating Expenses
Cost of services and sales (exclusive of depreciation and      amortization shown separately below)			13,270			12,254			8.3	%		25,824			25,071			3.0	%
Selling, general and administrative			8,121			8,005			1.4	%		16,454			16,349			0.6	%
Depreciation and amortization			4,571			4,499			1.6	%		9,100			9,059			0.5	%
Total Operating Expenses			25,962			24,758			4.9	%		51,378			50,479			1.8	%
Operating Income			6,113			6,817			-10.3	%		12,053			12,918			-6.7	%
Interest Expense			825			941			-12.3	%		1,652			1,800			-8.2	%
Equity in Net Income of Affiliates			218			132			65.2	%		403			355			13.5	%
Other Income (Expense) - Net			288			23			-			320			75			-
Income Before Income Taxes			5,794			6,031			-3.9	%		11,124			11,548			-3.7	%
Income Tax Expense			1,914			2,066			-7.4	%		3,471			3,931			-11.7	%
Net Income			3,880			3,965			-2.1	%		7,653			7,617			0.5	%
Less: Net Income Attributable to Noncontrolling Interest			(58	)		(63	)		7.9	%		(131	)		(131	)		-
Net Income Attributable to AT&T		$	3,822		$	3,902			-2.1	%	$	7,522		$	7,486			0.5	%
Basic Earnings Per Share Attributable to AT&T		$	0.71		$	0.67			6.0	%	$	1.38		$	1.27			8.7	%
Weighted Average Common      Shares Outstanding (000,000)			5,381			5,855			-8.1	%		5,446			5,886			-7.5	%
Diluted Earnings Per Share Attributable to AT&T		$	0.71		$	0.66			7.6	%	$	1.38		$	1.27			8.7	%
Weighted Average Common      Shares Outstanding with Dilution (000,000)			5,397			5,876			-8.2	%		5,463			5,907			-7.5	%

Financial Data
AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended									Six Months Ended
Wireless	6/30/2013			6/30/2012			% Chg			6/30/2013			6/30/2012			% Chg
Segment Operating Revenues
Data	$	5,356		$	4,471			19.8	%	$	10,481		$	8,706			20.4	%
Voice, text and other service		10,014			10,294			-2.7	%		19,951			20,625			-3.3	%
Equipment		1,921			1,588			21.0	%		3,550			3,158			12.4	%
Total Segment Operating Revenues		17,291			16,353			5.7	%		33,982			32,489			4.6	%
Segment Operating Expenses
Operations and support		10,770			9,590			12.3	%		20,950			19,568			7.1	%
Depreciation and amortization		1,843			1,696			8.7	%		3,678			3,362			9.4	%
Total Segment Operating Expenses		12,613			11,286			11.8	%		24,628			22,930			7.4	%
Segment Operating Income		4,678			5,067			-7.7	%		9,354			9,559			-2.1	%
Equity in Net Income (Loss) of Affiliates		(19	)		(15	)		-26.7	%		(37	)		(28	)		-32.1	%
Segment Income	$	4,659		$	5,052			-7.8	%	$	9,317		$	9,531			-2.2	%
Segment Operating Income Margin		27.1	%		31.0	%					27.5	%		29.4	%
Wireline
Segment Operating Revenues
Data	$	8,400		$	7,935			5.9	%	$	16,562		$	15,735			5.3	%
Voice		5,141			5,696			-9.7	%		10,447			11,588			-9.8	%
Other		1,232			1,276			-3.4	%		2,419			2,513			-3.7	%
Total Segment Operating Revenues		14,773			14,907			-0.9	%		29,428			29,836			-1.4	%
Segment Operating Expenses
Operations and support		10,417			10,201			2.1	%		20,752			20,603			0.7	%
Depreciation and amortization		2,722			2,766			-1.6	%		5,410			5,574			-2.9	%
Total Segment Operating Expenses		13,139			12,967			1.3	%		26,162			26,177			-0.1	%
Segment Operating Income		1,634			1,940			-15.8	%		3,266			3,659			-10.7	%
Equity in Net Income (Loss) of Affiliates		-			(1	)		-			1			(1	)		-
Segment Income	$	1,634		$	1,939			-15.7	%	$	3,267		$	3,658			-10.7	%
Segment Operating Income Margin		11.1	%		13.0	%					11.1	%		12.3	%
Advertising Solutions
Segment Operating Revenues	$	-		$	305			-		$	-		$	1,049			-
Segment Operating Expenses
Operations and support		-			226			-			-			773			-
Depreciation and amortization		-			29			-			-			106			-
Total Segment Operating Expenses		-			255			-			-			879			-
Segment Income	$	-		$	50			-		$	-		$	170			-
Segment Income Margin		-			16.4	%					-			16.2	%
Other
Segment Operating Revenues	$	11		$	10			10.0	%	$	21		$	23			-8.7	%
Segment Operating Expenses		210			250			-16.0	%		588			493			19.3	%
Segment Operating Income (Loss)		(199	)		(240	)		17.1	%		(567	)		(470	)		-20.6	%
Equity in Net Income of Affiliates		237			148			60.1	%		439			384			14.3	%
Segment Income (Loss)	$	38		$	(92	)		-		$	(128	)	$	(86	)		-48.8	%

Financial Data
AT&T Inc.
Consolidated Balance Sheets
Dollars in millions
	6/30/13			12/31/12
	Unaudited
Assets
Current Assets
Cash and cash equivalents	$	4,548		$	4,868
Accounts receivable - net of allowances for doubtful accounts of $520 and $547		12,508			12,657
Prepaid expenses		1,038			1,035
Deferred income taxes		953			1,036
Other current assets		2,381			3,110
Total current assets		21,428			22,706
Property, Plant and Equipment - Net		110,734			109,767
Goodwill		69,770			69,773
Licenses		53,665			52,352
Customer Lists and Relationships - Net		1,015			1,391
Other Intangible Assets - Net		5,018			5,032
Investments in and Advances to Equity Affiliates		3,888			4,581
Other Assets		6,575			6,713
Total Assets	$	272,093		$	272,315
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	3,256		$	3,486
Accounts payable and accrued liabilities		19,438			20,494
Advanced billing and customer deposits		4,029			4,225
Accrued taxes		2,065			1,026
Dividends payable		2,401			2,556
Total current liabilities		31,189			31,787
Long-Term Debt		71,917			66,358
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		29,400			28,491
Postemployment benefit obligation		41,994			41,392
Other noncurrent liabilities		11,278			11,592
Total deferred credits and other noncurrent liabilities		82,672			81,475
Stockholders' Equity
Common stock		6,495			6,495
Additional paid-in capital		90,985			91,038
Retained earnings		25,212			22,481
Treasury stock		(41,819	)		(32,888	)
Accumulated other comprehensive income		5,107			5,236
Noncontrolling interest		335			333
Total stockholders' equity		86,315			92,695
Total Liabilities and Stockholders' Equity	$	272,093		$	272,315

Financial Data
AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions
Unaudited	Six Months Ended June 30,
	2013			2012
Operating Activities
Net income	$	7,653		$	7,617
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		9,100			9,059
Undistributed earnings from investments in equity affiliates		(198	)		(355	)
Provision for uncollectible accounts		439			572
Deferred income tax expense and noncurrent
unrecognized tax benefits		926			(639	)
Net (gain) loss from sale of investments, net of impairments		(260	)		2
Changes in operating assets and liabilities:
Accounts receivable		(290	)		(460	)
Other current assets		784			1,468
Accounts payable and accrued liabilities		(340	)		592
Other - net		(103	)		(531	)
Total adjustments		10,058			9,708
Net Cash Provided by Operating Activities		17,711			17,325
Investing Activities
Construction and capital expenditures:
Capital expenditures		(9,665	)		(8,742	)
Interest during construction		(140	)		(130	)
Acquisitions, net of cash acquired		(1,182	)		(477	)
Dispositions		825			800
Sales (purchases) of securities, net		-			124
Return of advances to and investments in equity affiliates		301			-
Other		(4	)		-
Net Cash Used in Investing Activities		(9,865	)		(8,425	)
Financing Activities
Issuance of other short-term borrowings		1,476			-
Repayment of other short-term borrowings		(233	)		-
Issuance of long-term debt		6,416			6,935
Repayment of long-term debt		(1,823	)		(7,035	)
Purchase of treasury stock		(9,217	)		(4,623	)
Issuance of treasury stock		104			376
Dividends paid		(4,930	)		(5,187	)
Other		41			(534	)
Net Cash Used in Financing Activities		(8,166	)		(10,068	)
Net decrease in cash and cash equivalents		(320	)		(1,168	)
Cash and cash equivalents beginning of year		4,868			3,045
Cash and Cash Equivalents End of Period	$	4,548		$	1,877

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									Six Months Ended
		6/30/2013			6/30/2012			% Chg			6/30/2013			6/30/2012			% Chg
Wireless
Subscribers and Connections
	Total											107,884			105,206			2.5	%
	Postpaid											71,278			69,666			2.3	%
	Prepaid											7,084			7,473			-5.2	%
	Reseller											14,330			14,382			-0.4	%
	Connected Devices											15,192			13,685			11.0	%
Wireless Net Adds
	Total		632			1,266			-50.1	%		923			1,992			-53.7	%
	Postpaid		551			320			72.2	%		847			507			67.1	%
	Prepaid		11			92			-88.0	%		(173	)		217			-
	Reseller		(414	)		472			-			(666	)		656			-
	Connected Devices		484			382			26.7	%		915			612			49.5	%
	M&A Activity, Partitioned Customers and Other Adjs.		1			-			-			4			(33	)		-
Wireless Churn
	Postpaid Churn		1.02	%		0.97	%	5 BP				1.03	%		1.03	%	0 BP
	Total Churn		1.36	%		1.18	%	18 BP				1.37	%		1.32	%	5 BP
Other
	Licensed POPs (000,000)											317			313			1.3	%
Wireline
Voice
	Total Wireline Voice Connections1											30,228			34,171			-11.5	%
	Net Change		(935	)		(1,035	)		9.7	%		(1,956	)		(2,161	)		9.5	%
Broadband
	Total Wireline Broadband Connections											16,453			16,434			0.1	%
	Net Change		(61	)		(96	)		36.5	%		63			7			-
Video
	Total U-verse Video Connections											5,001			4,146			20.6	%
	Net Change		233			155			50.3	%		465			355			31.0	%
Consumer Revenue Connections
	Broadband2											14,660			14,517			1.0	%
	U-verse Video Connections1											4,986			4,137			20.5	%
	Voice1,3											17,362			19,865			-12.6	%
Total Consumer Revenue Connections1												37,008			38,519			-3.9	%
	Net Change		(393	)		(593	)		33.7	%		(659	)		(987	)		33.2	%
AT&T Inc.
	Construction and capital expenditures
	Capital expenditures	$	5,413		$	4,481			20.8	%	$	9,665		$	8,742			10.6	%
	Interest during construction	$	74		$	65			13.8	%	$	140		$	130			7.7	%
	Dividends Declared per Share	$	0.45		$	0.44			2.3	%	$	0.90		$	0.88			2.3	%
	End of Period Common Shares Outstanding (000,000)											5,335			5,805			-8.1	%
	Debt Ratio4											46.6	%		38.4	%	820 BP
	Total Employees											245,350			242,380			1.2	%
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 3,379 as of June 30, 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 2Q13, total switched access lines were 26,849, retail business switched access lines totaled 10,905, and wholesale,
	national mass markets and coin switched access lines totaled 1,961. Restated switched access lines do not include ISDN lines.