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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

AT&T Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	22,741)	1,500)	32,698)	4,489)	24,495)
Cost of capital²	6.77%	7.04%	6.50%	7.10%	7.86%
Invested capital³	326,144)	309,447)	439,195)	412,041)	437,536)

Economic profit⁴	665)	(20,282)	4,158)	(24,771)	(9,895)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 22,741 – 6.77% × 326,144 = 665

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	AT&T Inc. economic profit decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

AT&T Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss) attributable to AT&T	14,400)	(8,524)	20,081)	(5,176)	13,903)
Deferred income tax expense (benefit)¹	1,456)	3,074)	5,504)	1,245)	1,701)
Increase (decrease) in allowance for credit loss²	(89)	(70)	(450)	(14)	328)
Increase (decrease) in equity equivalents³	1,367)	3,004)	5,054)	1,231)	2,029)
Interest expense	6,704)	6,108)	6,884)	7,925)	8,422)
Interest expense, operating lease liability⁴	865)	822)	924)	1,055)	1,061)
Adjusted interest expense	7,569)	6,930)	7,808)	8,980)	9,483)
Tax benefit of interest expense⁵	(1,589)	(1,455)	(1,640)	(1,886)	(1,991)
Adjusted interest expense, after taxes⁶	5,979)	5,474)	6,168)	7,094)	7,491)
(Gain) loss on marketable securities	14)	11)	(4)	(20)	—)
Interest income	(303)	(143)	—)	—)	—)
Investment income, before taxes	(289)	(132)	(4)	(20)	—)
Tax expense (benefit) of investment income⁷	61)	28)	1)	4)	—)
Investment income, after taxes⁸	(228)	(104)	(3)	(16)	—)
(Income) loss from discontinued operations, net of tax⁹	—)	181)	—)	—)	—)
Net income (loss) attributable to noncontrolling interest	1,223)	1,469)	1,398)	1,355)	1,072)
Net operating profit after taxes (NOPAT)	22,741)	1,500)	32,698)	4,489)	24,495)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for credit loss.

³ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to AT&T.

⁴ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 21,092 × 4.10% = 865

⁵ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 7,569 × 21.00% = 1,589

⁶ Addition of after taxes interest expense to net income (loss) attributable to AT&T.

⁷ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 289 × 21.00% = 61

⁸ Elimination of after taxes investment income.

⁹ Elimination of discontinued operations.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	AT&T Inc. NOPAT decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

AT&T Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income tax expense	4,225)	3,780)	5,468)	965)	3,493)
Less: Deferred income tax expense (benefit)	1,456)	3,074)	5,504)	1,245)	1,701)
Add: Tax savings from interest expense	1,589)	1,455)	1,640)	1,886)	1,991)
Less: Tax imposed on investment income	61)	28)	1)	4)	—)
Cash operating taxes	4,298)	2,134)	1,603)	1,602)	3,783)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	AT&T Inc. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

AT&T Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Debt maturing within one year	9,477)	7,467)	24,630)	3,470)	11,838)
Long-term debt, excluding maturing within one year	127,854)	128,423)	152,724)	153,775)	151,309)
Operating lease liability¹	21,092)	22,206)	24,967)	25,739)	25,255)
Total reported debt & leases	158,423)	158,096)	202,321)	182,984)	188,402)
Stockholders’ equity attributable to AT&T	103,297)	97,500)	166,332)	161,673)	184,221)
Net deferred tax (assets) liabilities²	58,583)	56,946)	64,996)	60,274)	59,334)
Allowance for credit loss³	499)	588)	771)	1,221)	1,235)
Equity equivalents⁴	59,082)	57,534)	65,767)	61,495)	60,569)
Accumulated other comprehensive (income) loss, net of tax⁵	(2,300)	(2,766)	(3,529)	(4,330)	(5,470)
Redeemable noncontrolling interest	1,973)	—)	—)	—)	—)
Noncontrolling interest	14,145)	8,957)	17,523)	17,567)	17,713)
Adjusted stockholders’ equity attributable to AT&T	176,197)	161,225)	246,093)	236,405)	257,033)
Under construction⁶	(5,640)	(7,182)	(5,845)	(4,099)	(4,176)
Investment securities⁷	(2,836)	(2,692)	(3,374)	(3,249)	(3,723)
Invested capital	326,144)	309,447)	439,195)	412,041)	437,536)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of equity equivalents to stockholders’ equity attributable to AT&T.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of under construction.

⁷ Subtraction of investment securities.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	AT&T Inc. invested capital decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

AT&T Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	120,167)	120,167)	÷	276,051)	=	0.44	0.44	×	11.20%	=	4.88%
5.000% Perpetual Preferred Stock, Series A	1,008)	1,008)	÷	276,051)	=	0.00	0.00	×	5.00%	=	0.02%
4.750% Perpetual Preferred Stock, Series C	1,381)	1,381)	÷	276,051)	=	0.01	0.01	×	4.75%	=	0.02%
Debt³	132,403)	132,403)	÷	276,051)	=	0.48	0.48	×	4.23% × (1 – 21.00%)	=	1.60%
Operating lease liability⁴	21,092)	21,092)	÷	276,051)	=	0.08	0.08	×	4.10% × (1 – 21.00%)	=	0.25%
Total:	276,051)					1.00					6.77%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	137,321)	137,321)	÷	286,836)	=	0.48	0.48	×	11.20%	=	5.36%
5.000% Perpetual Preferred Stock, Series A	881)	881)	÷	286,836)	=	0.00	0.00	×	5.00%	=	0.02%
4.750% Perpetual Preferred Stock, Series C	1,221)	1,221)	÷	286,836)	=	0.00	0.00	×	4.75%	=	0.02%
Debt³	125,207)	125,207)	÷	286,836)	=	0.44	0.44	×	4.10% × (1 – 21.00%)	=	1.41%
Operating lease liability⁴	22,206)	22,206)	÷	286,836)	=	0.08	0.08	×	3.70% × (1 – 21.00%)	=	0.23%
Total:	286,836)					1.00					7.04%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	171,001)	171,001)	÷	402,190)	=	0.43	0.43	×	11.20%	=	4.76%
5.000% Perpetual Preferred Stock, Series A	1,286)	1,286)	÷	402,190)	=	0.00	0.00	×	5.00%	=	0.02%
4.750% Perpetual Preferred Stock, Series C	1,838)	1,838)	÷	402,190)	=	0.00	0.00	×	4.75%	=	0.02%
Debt³	203,098)	203,098)	÷	402,190)	=	0.50	0.50	×	3.80% × (1 – 21.00%)	=	1.52%
Operating lease liability⁴	24,967)	24,967)	÷	402,190)	=	0.06	0.06	×	3.70% × (1 – 21.00%)	=	0.18%
Total:	402,190)					1.00					6.50%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	204,182)	204,182)	÷	422,357)	=	0.48	0.48	×	11.20%	=	5.42%
5.000% Perpetual Preferred Stock, Series A	1,303)	1,303)	÷	422,357)	=	0.00	0.00	×	5.00%	=	0.02%
4.750% Perpetual Preferred Stock, Series C	1,873)	1,873)	÷	422,357)	=	0.00	0.00	×	4.75%	=	0.02%
Debt³	189,260)	189,260)	÷	422,357)	=	0.45	0.45	×	4.10% × (1 – 21.00%)	=	1.45%
Operating lease liability⁴	25,739)	25,739)	÷	422,357)	=	0.06	0.06	×	4.10% × (1 – 21.00%)	=	0.20%
Total:	422,357)					1.00					7.10%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	276,945)	276,945)	÷	487,624)	=	0.57	0.57	×	11.20%	=	6.36%
5.000% Perpetual Preferred Stock, Series A	1,262)	1,262)	÷	487,624)	=	0.00	0.00	×	5.00%	=	0.01%
4.750% Perpetual Preferred Stock, Series C	—)	—)	÷	487,624)	=	0.00	0.00	×	0.00%	=	0.00%
Debt³	184,162)	184,162)	÷	487,624)	=	0.38	0.38	×	4.40% × (1 – 21.00%)	=	1.31%
Operating lease liability⁴	25,255)	25,255)	÷	487,624)	=	0.05	0.05	×	4.20% × (1 – 21.00%)	=	0.17%
Total:	487,624)					1.00					7.86%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

AT&T Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	665)	(20,282)	4,158)	(24,771)	(9,895)
Invested capital²	326,144)	309,447)	439,195)	412,041)	437,536)
Performance Ratio
Economic spread ratio³	0.20%	-6.55%	0.95%	-6.01%	-2.26%
Benchmarks
Economic Spread Ratio, Competitors⁴
T-Mobile US Inc.	0.61%	-3.16%	-3.18%	-2.65%	0.71%
Verizon Communications Inc.	-0.61%	2.42%	3.19%	2.59%	4.24%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 665 ÷ 326,144 = 0.20%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	AT&T Inc. economic spread ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.

AT&T Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	665)	(20,282)	4,158)	(24,771)	(9,895)
Operating revenues	122,428)	120,741)	168,864)	171,760)	181,193)
Performance Ratio
Economic profit margin²	0.54%	-16.80%	2.46%	-14.42%	-5.46%
Benchmarks
Economic Profit Margin, Competitors³
T-Mobile US Inc.	1.45%	-7.41%	-7.31%	-6.86%	1.16%
Verizon Communications Inc.	-1.39%	5.34%	6.93%	4.99%	7.09%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Operating revenues
= 100 × 665 ÷ 122,428 = 0.54%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	AT&T Inc. economic profit margin deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.

AT&T Inc. (NYSE:T)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin