Financial Data | ||||||||||||||||||||||||
AT&T Inc. | ||||||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||||||
Dollars in millions except per share amounts | ||||||||||||||||||||||||
Unaudited | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
9/30/2007 | 9/30/2006 | % Chg | 9/30/2007 | 9/30/2006 | % Chg | |||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||
Voice | $ | 10,164 | $ | 8,400 | 21.0 | % | $ | 30,997 | $ | 25,524 | 21.4 | % | ||||||||||||
Data | 5,880 | 4,598 | 27.9 | % | 17,281 | 13,633 | 26.8 | % | ||||||||||||||||
Wireless service | 9,834 | 8 | - | 28,417 | 24 | - | ||||||||||||||||||
Directory | 1,240 | 906 | 36.9 | % | 3,417 | 2,716 | 25.8 | % | ||||||||||||||||
Other | 3,014 | 1,726 | 74.6 | % | 8,467 | 5,267 | 60.8 | % | ||||||||||||||||
Total Operating Revenues | 30,132 | 15,638 | 92.7 | % | 88,579 | 47,164 | 87.8 | % | ||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||
Cost of sales (exclusive of depreciation | ||||||||||||||||||||||||
and amortization shown separately below) | 11,591 | 6,923 | 67.4 | % | 34,321 | 21,450 | 60.0 | % | ||||||||||||||||
Selling, general and administrative | 7,915 | 3,361 | - | 22,992 | 10,587 | - | ||||||||||||||||||
Depreciation and amortization | 5,322 | 2,437 | - | 16,354 | 7,415 | - | ||||||||||||||||||
Total Operating Expenses | 24,828 | 12,721 | 95.2 | % | 73,667 | 39,452 | 86.7 | % | ||||||||||||||||
Operating Income | 5,304 | 2,917 | 81.8 | % | 14,912 | 7,712 | 93.4 | % | ||||||||||||||||
Interest Expense | 887 | 442 | - | 2,639 | 1,378 | 91.5 | % | |||||||||||||||||
Equity in Net Income of Affiliates | 162 | 649 | -75.0 | % | 545 | 1,438 | -62.1 | % | ||||||||||||||||
Other Income (Expense) - Net | (17 | ) | 109 | - | 614 | 315 | 94.9 | % | ||||||||||||||||
Income Before Income Taxes | 4,562 | 3,233 | 41.1 | % | 13,432 | 8,087 | 66.1 | % | ||||||||||||||||
Income Taxes | 1,499 | 1,068 | 40.4 | % | 4,617 | 2,669 | 73.0 | % | ||||||||||||||||
Net Income | $ | 3,063 | $ | 2,165 | 41.5 | % | $ | 8,815 | $ | 5,418 | 62.7 | % | ||||||||||||
Basic Earnings Per Share | ||||||||||||||||||||||||
Net Income | $ | 0.50 | $ | 0.56 | -10.7 | % | $ | 1.43 | $ | 1.40 | 2.1 | % | ||||||||||||
Weighted Average Common | ||||||||||||||||||||||||
Shares Outstanding (000,000) | 6,088 | 3,873 | 57.2 | % | 6,152 | 3,880 | 58.6 | % | ||||||||||||||||
Diluted Earnings Per Share | ||||||||||||||||||||||||
Net Income | $ | 0.50 | $ | 0.56 | -10.7 | % | $ | 1.42 | $ | 1.39 | 2.2 | % | ||||||||||||
Weighted Average Common | ||||||||||||||||||||||||
Shares Outstanding with Dilution (000,000) | 6,129 | 3,892 | 57.5 | % | 6,196 | 3,900 | 58.9 | % | ||||||||||||||||
Financial Data | ||||||||||||||||||||||||
AT&T Inc. | ||||||||||||||||||||||||
Statements of Segment Income | ||||||||||||||||||||||||
Dollars in millions | ||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
Wireline | 9/30/2007 | 9/30/2006 | % Chg | 9/30/2007 | 9/30/2006 | % Chg | ||||||||||||||||||
Segment Operating Revenues | ||||||||||||||||||||||||
Voice | $ | 10,356 | $ | 8,400 | 23.3 | % | $ | 31,619 | $ | 25,524 | 23.9 | % | ||||||||||||
Data | 6,076 | 4,598 | 32.1 | % | 17,918 | 13,633 | 31.4 | % | ||||||||||||||||
Other | 1,508 | 1,308 | 15.3 | % | 4,382 | 4,006 | 9.4 | % | ||||||||||||||||
Total Segment Operating Revenues | 17,940 | 14,306 | 25.4 | % | 53,919 | 43,163 | 24.9 | % | ||||||||||||||||
Segment Operating Expenses | ||||||||||||||||||||||||
Cost of sales | 7,620 | 6,495 | 17.3 | % | 22,801 | 20,072 | 13.6 | % | ||||||||||||||||
Selling, general and administrative | 4,105 | 3,068 | 33.8 | % | 12,157 | 9,816 | 23.8 | % | ||||||||||||||||
Depreciation and amortization | 3,333 | 2,387 | 39.6 | % | 10,073 | 7,266 | 38.6 | % | ||||||||||||||||
Total Segment Operating Expenses | 15,058 | 11,950 | 26.0 | % | 45,031 | 37,154 | 21.2 | % | ||||||||||||||||
Segment Income | $ | 2,882 | $ | 2,356 | 22.3 | % | $ | 8,888 | $ | 6,009 | 47.9 | % | ||||||||||||
Wireless * | ||||||||||||||||||||||||
Segment Operating Revenues | ||||||||||||||||||||||||
Service revenues | $ | 9,860 | $ | 8,670 | 13.7 | % | $ | 28,492 | $ | 24,985 | 14.0 | % | ||||||||||||
Equipment sales | 1,077 | 891 | 20.9 | % | 2,837 | 2,789 | 1.7 | % | ||||||||||||||||
Total Segment Operating Revenues | 10,937 | 9,561 | 14.4 | % | 31,329 | 27,774 | 12.8 | % | ||||||||||||||||
Segment Operating Expenses | ||||||||||||||||||||||||
Cost of services and equipment sales | 4,079 | 3,725 | 9.5 | % | 11,690 | 11,218 | 4.2 | % | ||||||||||||||||
Selling, general and administrative | 3,183 | 2,836 | 12.2 | % | 9,136 | 8,439 | 8.3 | % | ||||||||||||||||
Depreciation and amortization | 1,709 | 1,582 | 8.0 | % | 5,410 | 4,874 | 11.0 | % | ||||||||||||||||
Total Segment Operating Expenses | 8,971 | 8,143 | 10.2 | % | 26,236 | 24,531 | 7.0 | % | ||||||||||||||||
Segment Operating Income | 1,966 | 1,418 | 38.6 | % | 5,093 | 3,243 | 57.0 | % | ||||||||||||||||
Equity in Net Income (Loss) of Affiliates ** | (40 | ) | (36 | ) | -11.1 | % | (131 | ) | (99 | ) | -32.3 | % | ||||||||||||
Segment Income | $ | 1,926 | $ | 1,382 | 39.4 | % | $ | 4,962 | $ | 3,144 | 57.8 | % | ||||||||||||
* Results include 100% of AT&T's actual wireless results. | ||||||||||||||||||||||||
** Includes minority interest recorded as Other Income (Expense) - Net on the Consolidated Statements of Income. | ||||||||||||||||||||||||
Advertising & Publishing | ||||||||||||||||||||||||
Segment Operating Revenues | $ | 1,457 | $ | 913 | 59.6 | % | $ | 4,378 | $ | 2,746 | 59.4 | % | ||||||||||||
Segment Operating Expenses | ||||||||||||||||||||||||
Cost of sales | 440 | 277 | 58.8 | % | 1,281 | 853 | 50.2 | % | ||||||||||||||||
Selling, general and administrative | 315 | 154 | - | 1,000 | 445 | - | ||||||||||||||||||
Depreciation and amortization | 238 | 1 | - | 743 | 2 | - | ||||||||||||||||||
Total Segment Operating Expenses | 993 | 432 | - | 3,024 | 1,300 | - | ||||||||||||||||||
Segment Operating Income | 464 | 481 | -3.5 | % | 1,354 | 1,446 | -6.4 | % | ||||||||||||||||
Equity in Net Income (Loss) of Affiliates | - | (2 | ) | - | - | (13 | ) | - | ||||||||||||||||
Segment Income | $ | 464 | $ | 479 | -3.1 | % | $ | 1,354 | $ | 1,433 | -5.5 | % | ||||||||||||
Other *** | ||||||||||||||||||||||||
Segment Operating Revenues | $ | 562 | $ | 469 | 19.8 | % | $ | 1,664 | $ | 1,390 | 19.7 | % | ||||||||||||
Segment Operating Expenses | 440 | 391 | 12.5 | % | 1,468 | 1,137 | 29.1 | % | ||||||||||||||||
Segment Operating Income | 122 | 78 | 56.4 | % | 196 | 253 | -22.5 | % | ||||||||||||||||
Equity in Net Income of Affiliates | 159 | 644 | -75.3 | % | 533 | 1,421 | -62.5 | % | ||||||||||||||||
Segment Income | $ | 281 | $ | 722 | -61.1 | % | $ | 729 | $ | 1,674 | -56.5 | % | ||||||||||||
*** Equity in Net Income of Affiliates includes our 60% proportionate share of wireless results in 2006. |
Financial Data | ||||||||
AT&T Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
Dollars in millions except per share amounts | ||||||||
9/30/07 | 12/31/06 | |||||||
Unaudited | ||||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 2,714 | $ | 2,418 | ||||
Accounts receivable - net of allowances for | ||||||||
uncollectibles of $1,362 and $1,276 | 16,305 | 16,194 | ||||||
Prepaid expenses | 1,900 | 1,477 | ||||||
Deferred income taxes | 2,433 | 3,034 | ||||||
Other current assets | 2,191 | 2,430 | ||||||
Total current assets | 25,543 | 25,553 | ||||||
Property, Plant and Equipment - Net | 94,446 | 94,596 | ||||||
Goodwill | 66,847 | 67,657 | ||||||
Licenses | 35,687 | 34,252 | ||||||
Customer Lists and Relationships - Net | 15,361 | 18,922 | ||||||
Other Intangible Assets - Net | 6,001 | 6,566 | ||||||
Investments in Equity Affiliates | 2,403 | 1,995 | ||||||
Postemployment Benefit | 14,779 | 14,228 | ||||||
Other Assets | 6,901 | 6,865 | ||||||
Total Assets | $ | 267,968 | $ | 270,634 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities | ||||||||
Debt maturing within one year | $ | 6,026 | $ | 9,733 | ||||
Accounts payable and accrued liabilities | 20,239 | 22,106 | ||||||
Advanced billing and customer deposits | 3,471 | 3,402 | ||||||
Accrued taxes | 6,282 | 3,026 | ||||||
Dividends payable | 2,156 | 2,215 | ||||||
Total current liabilities | 38,174 | 40,482 | ||||||
Long-Term Debt | 54,585 | 50,063 | ||||||
Deferred Credits and Other Noncurrent Liabilities | ||||||||
Deferred income taxes | 22,595 | 27,406 | ||||||
Postemployment benefit obligation | 28,756 | 28,901 | ||||||
Unamortized investment tax credits | 158 | 181 | ||||||
Other noncurrent liabilities | 12,526 | 8,061 | ||||||
Total deferred credits and other noncurrent liabilities | 64,035 | 64,549 | ||||||
Stockholders' Equity | ||||||||
Common shares issued ($1 par value) | 6,495 | 6,495 | ||||||
Capital in excess of par value | 91,534 | 91,352 | ||||||
Retained earnings | 32,606 | 30,375 | ||||||
Treasury shares (at cost) | (14,411 | ) | (7,368 | ) | ||||
Accumulated other comprehensive income | (5,050 | ) | (5,314 | ) | ||||
Total stockholders' equity | 111,174 | 115,540 | ||||||
Total Liabilities and Stockholders' Equity | $ | 267,968 | $ | 270,634 |
Financial Data | |||||||||
AT&T Inc. | |||||||||
Consolidated Statements of Cash Flows | |||||||||
Dollars in millions, increase (decrease) in cash and cash equivalents | |||||||||
Unaudited | Nine Months Ended | ||||||||
9/30/07 | 9/30/06 | ||||||||
Operating Activities | |||||||||
Net income | $ | 8,815 | $ | 5,418 | |||||
Adjustments to reconcile net income to | |||||||||
net cash provided by operating activities: | |||||||||
Depreciation and amortization | 16,354 | 7,415 | |||||||
Undistributed earnings from investments in equity affiliates | (434 | ) | (1,359 | ) | |||||
Provision for uncollectible accounts | 1,142 | 450 | |||||||
Amortization of investment tax credits | (23 | ) | (21 | ) | |||||
Deferred income tax (benefit) expense | 486 | (269 | ) | ||||||
Net gain on sales of investments | (29 | ) | (10 | ) | |||||
Gain on license exchange | (409 | ) | - | ||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | (1,253 | ) | 249 | ||||||
Other current assets | (661 | ) | 42 | ||||||
Accounts payable and accrued liabilities | (46 | ) | (1,819 | ) | |||||
Stock-based compensation tax benefit | (149 | ) | (10 | ) | |||||
Other - net | 427 | 507 | |||||||
Total adjustments | 15,405 | 5,175 | |||||||
Net Cash Provided by Operating Activities | 24,220 | 10,593 | |||||||
Investing Activities | |||||||||
Construction and capital expenditures | (12,124 | ) | (6,158 | ) | |||||
Net investments in affiliates | - | (633 | ) | ||||||
Dispositions | 993 | 72 | |||||||
Acquisitions, net of cash acquired | (233 | ) | (115 | ) | |||||
Proceeds from sale of marketable securities | 471 | - | |||||||
Proceeds from sale of debt and equity securities | 414 | - | |||||||
Investments in debt and equity securities | (301 | ) | - | ||||||
Other | 28 | 8 | |||||||
Net Cash Used in Investing Activities | (10,752 | ) | (6,826 | ) | |||||
Financing Activities | |||||||||
Net change in short-term borrowings with | |||||||||
original maturities of three months or less | (4,279 | ) | 2,336 | ||||||
Issuance of long-term debt | 7,898 | 1,491 | |||||||
Repayment of long-term debt | (3,008 | ) | (2,882 | ) | |||||
Purchase of treasury shares | (8,912 | ) | (1,359 | ) | |||||
Issuance of treasury shares | 1,736 | 463 | |||||||
Dividends paid | (6,584 | ) | (3,873 | ) | |||||
Stock-based compensation tax benefit | 149 | 10 | |||||||
Other | (172 | ) | 74 | ||||||
Net Cash Used in Financing Activities | (13,172 | ) | (3,740 | ) | |||||
Net increase in cash and cash equivalents | 296 | 27 | |||||||
Cash and cash equivalents beginning of year | 2,418 | 1,224 | |||||||
Cash and Cash Equivalents End of Period | $ | 2,714 | $ | 1,251 |
Financial Data | ||||||||||||||||||||||||
AT&T Inc. | ||||||||||||||||||||||||
Supplementary Operating and Financial Data | ||||||||||||||||||||||||
Dollars in millions except per share amounts | ||||||||||||||||||||||||
Unaudited | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
9/30/2007 | 9/30/2006 | % Chg | 9/30/2007 | 9/30/2006 | % Chg | |||||||||||||||||||
Wireless | ||||||||||||||||||||||||
Wireless Customers (000) | 65,666 | 58,666 | 11.9 | % | ||||||||||||||||||||
Net Customer Additions (000) | 1,993 | 1,358 | 46.8% | 4,640 | 4,535 | 2.3 | % | |||||||||||||||||
M&A Activity, Partitioned Customers and Other Adjs. (000) | - | - | - | 64 | (13 | ) | - | |||||||||||||||||
Postpaid Customers (000) | 52,689 | 49,127 | 7.3 | % | ||||||||||||||||||||
Net Postpaid Customer Additions (000) | 1,212 | 928 | 30.6% | 2,804 | 2,869 | -2.3 | % | |||||||||||||||||
Postpaid Churn | 1.3% | 1.5 | % | -20 BP | 1.3% | 1.5% | -20 B | P | ||||||||||||||||
Licensed POPs (000,000) | 299 | 296 | 1.0 | % | ||||||||||||||||||||
In-Region Wireline 1 | ||||||||||||||||||||||||
Total Consumer Revenue Connections (000) | ||||||||||||||||||||||||
Retail Consumer Access Lines | 35,811 | 25,641 | 39.7 | % | ||||||||||||||||||||
Consumer Broadband Connections 2 | 11,716 | 6,913 | 69.5 | % | ||||||||||||||||||||
Video Connections: 3 | ||||||||||||||||||||||||
Satellite Connections | 1,986 | 640 | - | |||||||||||||||||||||
U-verse Video Connections | 126 | 3 | - | |||||||||||||||||||||
Total Consumer Revenue Connections (000) | 49,639 | 33,197 | 49.5 | % | ||||||||||||||||||||
Net Consumer Revenue Connections Changes (000) | 83 | 43 | 93.0% | 731 | 194 | - | ||||||||||||||||||
Switched Access Lines (000) | ||||||||||||||||||||||||
Retail Consumer - Primary | 31,691 | 22,068 | 43.6 | % | ||||||||||||||||||||
Retail Consumer - Additional 6 | 4,120 | 3,573 | 15.3 | % | ||||||||||||||||||||
Retail Business 6 | 22,942 | 16,689 | 37.5 | % | ||||||||||||||||||||
Retail 6 | 58,753 | 42,330 | 38.8 | % | ||||||||||||||||||||
Wholesale 4, 6 | 3,849 | 4,493 | -14.3 | % | ||||||||||||||||||||
Coin 5 | 269 | 264 | 1.9 | % | ||||||||||||||||||||
Total Switched Access Lines (000) | 62,871 | 47,087 | 33.5 | % | ||||||||||||||||||||
Net Switched Access Line Changes (000) | (1,207 | ) | (824 | ) | -46.5% | (3,598 | ) | (2,326 | ) | -54.7 | % | |||||||||||||
Total Broadband Connections (000) 2, 6 | 13,760 | 8,155 | 68.7 | % | ||||||||||||||||||||
Net Broadband Connections Changes (000) 2 | 499 | 379 | 31.7% | 1,590 | 1,234 | 28.8 | % | |||||||||||||||||
Video Connections (000) 3, 6 | 2,112 | 643 | - | |||||||||||||||||||||
Net Video Connections Changes (000) 3 | 215 | 53 | - | 602 | 130 | - | ||||||||||||||||||
AT&T Inc. | ||||||||||||||||||||||||
Capital Expenditures | $ | 4,664 | $ | 2,116 | - | $ | 12,124 | $ | 6,158 | 96.9 | % | |||||||||||||
Dividends Declared per Share | $ | 0.3550 | $ | 0.3325 | 6.8% | $ | 1.0650 | $ | 0.9975 | 6.8 | % | |||||||||||||
End of Period Common Shares Outstanding (000,000) | 6,072 | 3,853 | 57.6 | % | ||||||||||||||||||||
Debt Ratio 7 | 35.3% | 36.3% | -100 B | P | ||||||||||||||||||||
Total Employees | 303,670 | 179,420 | 69.3 | % | ||||||||||||||||||||
1 | In-region Wireline represents access lines served by AT&T's incumbent local exchange companies. | |||
2 | Broadband connections include DSL lines, U-verse high speed Internet access and satellite broadband. | |||
3 | Video connections include sales under agency agreements with EchoStar and DirecTV customers and U-verse connections. | |||
4 | Wholesale lines include 0.3 million lines purchased by AT&T Corp. at 9/30/07. | |||
5 | Coin includes both retail and wholesale access lines. | |||
6 | Prior year amounts restated to conform to current period reporting methodology. | |||
7 | Total long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity. |
AT&T Inc. | ||||||||
Non-GAAP Consolidated Reconciliations | ||||||||
Reconciliation of Free Cash Flow after Dividends | ||||||||
Dollars in Millions | ||||||||
unaudited | ||||||||
September 30, 2007 | Three Months Ended | Nine Months Ended | ||||||
Net cash provided by operating activities | $ | 9,219 | $ | 24,220 | ||||
Less: Construction and capital expenditures | (4,664 | ) | (12,124 | ) | ||||
Less: Dividends Paid | (2,170 | ) | (6,584 | ) | ||||
Free Cash Flow after Dividends | $ | 2,385 | $ | 5,512 | ||||
Free cash flow after dividends is defined as cash from operations minus capital expenditures and dividends. Management reviews free cash flow monthly as an important indicator of how much cash is generated by normal business operations, including capital expenditures, and makes business decisions based on this measure. Management also views free cash flow as a measure of cash available to pay debt and return value to shareowners.
AT&T Inc. | ||||||||||||||||
Non-GAAP Wireless Reconciliations | ||||||||||||||||
Wireless Segment Adjusted OIBDA | ||||||||||||||||
Dollars in Millions | ||||||||||||||||
unaudited | ||||||||||||||||
Quarter Ended September 30, 2007 | ||||||||||||||||
Adjusting Items | ||||||||||||||||
GAAP | Integration Costs | Intangible Amortization | Adjusted | |||||||||||||
Service Revenues | $ | 9,860 | $ | 9,860 | ||||||||||||
Equipment Revenues | 1,077 | 1,077 | ||||||||||||||
Total Operating Revenues | $ | 10,937 | $ | - | $ | - | $ | 10,937 | ||||||||
Operating Expenses | ||||||||||||||||
Cost of Services and Equipment Sales | 4,079 | (60 | ) | - | 4,019 | |||||||||||
Selling, General and Administrative | 3,183 | (117 | ) | - | 3,066 | |||||||||||
Depreciation and Amortization | 1,709 | (83 | ) | (658 | ) | 968 | ||||||||||
Total Operating Expenses | 8,971 | (260 | ) | (658 | ) | 8,053 | ||||||||||
Operating Income | 1,966 | 2,884 | ||||||||||||||
Plus: Depreciation and Amortization | 1,709 | 968 | ||||||||||||||
OIBDA | 3,675 | 3,852 | ||||||||||||||
OIBDA as a % of Service Revenue | 37.3% | 39.1% | ||||||||||||||
Quarter Ended September 30, 2006 | ||||||||||||||||
Adjusting Items | ||||||||||||||||
GAAP | Integration Costs | Intangible Amortization | Adjusted | |||||||||||||
Service Revenues | $ | 8,670 | $ | 8,670 | ||||||||||||
Equipment Revenues | 891 | 891 | ||||||||||||||
Total Operating Revenues | $ | 9,561 | $ | - | $ | - | $ | 9,561 | ||||||||
Operating Expenses | ||||||||||||||||
Cost of Services and Equipment Sales | 3,725 | (65 | ) | - | 3,660 | |||||||||||
Selling, General and Administrative | 2,836 | (22 | ) | - | 2,814 | |||||||||||
Depreciation and Amortization | 1,582 | (52 | ) | (314 | ) | 1,216 | ||||||||||
Total Operating Expenses | 8,143 | (139 | ) | (314 | ) | 7,690 | ||||||||||
Operating Income | 1,418 | 1,871 | ||||||||||||||
Plus: Depreciation and Amortization | 1,582 | 1,216 | ||||||||||||||
OIBDA | 3,000 | 3,087 | ||||||||||||||
OIBDA as a % of Service Revenue | 34.6% | 35.6% |
OIBDA is defined as operating income (loss) before depreciation and amortization. OIBDA differs from segment operating income (loss), as calculated in accordance with GAAP, in that it excludes depreciation and amortization. OIBDA 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. OIBDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with GAAP. Our calculation of OIBDA, as presented, may differ from similarly titled measures reported by other companies.