Other Comprehensive Income (Loss), Cash Flow Hedge, Reclassification for Discontinuance, before Tax

AT&T INC.SEPTEMBER 30, 2022  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - ContinuedDollars in millions except per share amounts  
The following table presents information for our cash flow hedging relationships:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | Three months ended |  | Nine months ended |
|   | September 30, |  | September 30, |
| Cash Flow Hedging Relationships | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Cross-currency swaps: |   |  |   |  |   |  |   |
| Gain (Loss) recognized in accumulated OCI | $ | (690) |  |  | $ | (237) |  |  | $ | (1,077) |  |  | $ | (742) |  |
| Foreign exchange contracts: |  |  |  |  |  |  |  |
| Gain (Loss) recognized in accumulated OCI | —  |  |  | (14) |  |  | 3  |  |  | (14) |  |
| Other income (expense) - net reclassified fromaccumulated OCI into income | —  |  |  | 7  |  |  | 1  |  |  | (3) |  |
| Interest rate locks: |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
| Interest income (expense) reclassified fromaccumulated OCI into income | (15) |  |  | (22) |  |  | (51) |  |  | (70) |  |
| Other income (expense) reclassified fromaccumulated OCI into income | —  |  |  | —  |  |  | (45) |  |  | —  |  |
| Distribution of WarnerMedia | —  |  |  | —  |  |  | (12) |  |  | —  |  |

  
NOTE 8. ACQUISITIONS, DISPOSITIONS AND OTHER ADJUSTMENTS Acquisitions Spectrum Auction On January 14, 2022, the Federal Communications Commission (FCC) announced that we were the winning bidder for 1,624 3.45 GHz licenses in Auction 110. We provided the FCC with an upfront deposit of $123 in the third quarter of 2021 and paid the remaining $8,956 in the first quarter of 2022, for a total of $9,079. We funded the purchase price using cash and short-term investments. We received the licenses in May 2022 and classified the auction deposits and related capitalized interest as “Licenses - Net” on our September 30, 2022 consolidated balance sheet.  
In February 2021, the FCC announced that we were the winning bidder for 1,621 C-Band licenses. We provided the FCC an upfront deposit of $550 in 2020 and cash payments totaling $22,856 in the first quarter of 2021, for a total of $23,406. The licenses were received in July 2021. In the third quarter of 2022, we paid $98 of compensable relocation costs for a total of $1,703 Incentive Payments and compensable relocation costs paid to date for the C-Band licenses, with $1,605 paid in 2021.   
Cash paid, including spectrum deposits (net of refunds), capitalized interest, and any payments for incentive and relocation costs are included in “Acquisitions, net of cash acquired” on our consolidated statements of cash flows. Interest is capitalized until the spectrum is ready for its intended use.  
Dispositions WarnerMedia On April 8, 2022, we completed the separation and distribution of our WarnerMedia business, and merger of Spinco, an AT&T subsidiary formed to hold the WarnerMedia business, with a subsidiary of Discovery, Inc., which was renamed Warner Bros. Discovery, Inc (WBD). Each AT&T shareholder was entitled to receive 0.241917 shares of WBD common stock for each share of AT&T common stock held as of the record date, which represented approximately 71% of WBD. In connection with and in accordance with the terms of the Separation and Distribution Agreement (SDA), prior to the distribution and merger, AT&T received approximately $40,400, which includes $38,800 of Spinco cash and $1,600 of debt retained by WarnerMedia. During the second quarter, assets of approximately $121,100 and liabilities of $70,600 were removed from our balance sheet as well as $45,041 of retained earnings and $5,632 of additional paid-in capital associated with the transaction. Additionally, in August 2022, we and WBD finalized the post-closing adjustment, pursuant to section 1.3 of the SDA, which resulted in a $1,200 payment to WBD in the third quarter of 2022. The $1,200 post-closing adjustment was included in the change in additional paid-in capital for the three months ended June 30, 2022, and for balance sheets ended June 30, 2022 and September 30, 2022. (See Note 13)  
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