AT&T (T) 8-K AT&T Reports Second-Quarter Results

Financial Data
AT&T Inc.
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Three Months Ended									Six Months Ended
	6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg
Operating Revenues
Service	$	37,142		$	29,541			25.7	%	$	74,243		$	58,503			26.9	%
Equipment		3,378			3,474			-2.8	%		6,812			7,088			-3.9	%
Total Operating Revenues		40,520			33,015			22.7	%		81,055			65,591			23.6	%
Operating Expenses
Cost of services and sales
Equipment		4,260			4,353			-2.1	%		8,635			8,899			-3.0	%
Broadcast, programming and operations		4,701			1,148			-			9,330			2,270			-
Other cost of services (exclusive of depreciation            and amortization shown separately below)		9,514			9,578			-0.7	%		18,910			18,390			2.8	%
Selling, general and administrative		8,909			7,467			19.3	%		17,350			15,428			12.5	%
Depreciation and amortization		6,576			4,696			40.0	%		13,139			9,274			41.7	%
Total Operating Expenses		33,960			27,242			24.7	%		67,364			54,261			24.1	%
Operating Income		6,560			5,773			13.6	%		13,691			11,330			20.8	%
Interest Expense		1,258			932			35.0	%		2,465			1,831			34.6	%
Equity in Net Income of Affiliates		28			33			-15.2	%		41			33			24.2	%
Other Income (Expense) - Net		91			48			89.6	%		161			118			36.4	%
Income Before Income Taxes		5,421			4,922			10.1	%		11,428			9,650			18.4	%
Income Tax Expense		1,906			1,738			9.7	%		4,028			3,127			28.8	%
Net Income		3,515			3,184			10.4	%		7,400			6,523			13.4	%
Less: Net Income Attributable to Noncontrolling Interest		(107	)		(102	)		-4.9	%		(189	)		(178	)		-6.2	%
Net Income Attributable to AT&T	$	3,408		$	3,082			10.6	%	$	7,211		$	6,345			13.6	%
Basic Earnings Per Share Attributable to AT&T	$	0.55		$	0.59			-6.8	%	$	1.17		$	1.22			-4.1	%
Weighted Average Common      Shares Outstanding (000,000)		6,174			5,204			18.6	%		6,173			5,204			18.6	%
Diluted Earnings Per Share Attributable to AT&T	$	0.55		$	0.59			-6.8	%	$	1.17		$	1.22			-4.1	%
Weighted Average Common      Shares Outstanding with Dilution (000,000)		6,195			5,220			18.7	%		6,193			5,220			18.6	%

Financial Data
AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended									Six Months Ended
	6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg
Business Solutions
Segment Operating Revenues
Wireless service	$	7,963		$	7,756			2.7	%	$	15,818		$	15,271			3.6	%
Fixed strategic services		2,797			2,580			8.4	%		5,559			5,099			9.0	%
Legacy voice and data services		4,158			4,681			-11.2	%		8,521			9,465			-10.0	%
Other service and equipment		886			854			3.7	%		1,744			1,700			2.6	%
Wireless equipment		1,775			1,793			-1.0	%		3,546			3,686			-3.8	%
Total Segment Operating Revenues		17,579			17,664			-0.5	%		35,188			35,221			-0.1	%
Segment Operating Expenses
Operations and support expenses		10,857			10,972			-1.0	%		21,659			22,045			-1.8	%
Depreciation and amortization		2,521			2,460			2.5	%		5,029			4,802			4.7	%
Total Segment Operating Expenses		13,378			13,432			-0.4	%		26,688			26,847			-0.6	%
Segment Operating Income		4,201			4,232			-0.7	%		8,500			8,374			1.5	%
Equity in Net Income of Affiliates		-			-			-			-			-			-
Segment Contribution	$	4,201		$	4,232			-0.7	%	$	8,500		$	8,374			1.5	%
Segment Operating Income Margin		23.9	%		24.0	%					24.2	%		23.8	%
Entertainment Group
Segment Operating Revenues
Video entertainment	$	8,963		$	1,991			-		$	17,867		$	3,862			-
High-speed internet		1,867			1,623			15.0	%		3,670			3,176			15.6	%
Legacy voice and data services		1,244			1,516			-17.9	%		2,557			3,128			-18.3	%
Other service and equipment		637			652			-2.3	%		1,275			1,276			-0.1	%
Total Segment Operating Revenues		12,711			5,782			-			25,369			11,442			-
Segment Operating Expenses
Operations and support expenses		9,569			4,913			94.8	%		19,147			9,772			95.9	%
Depreciation and amortization		1,489			1,065			39.8	%		2,977			2,130			39.8	%
Total Segment Operating Expenses		11,058			5,978			85.0	%		22,124			11,902			85.9	%
Segment Operating Income (Loss)		1,653			(196	)		-			3,245			(460	)		-
Equity in Net Income (Loss) of Affiliates		(2	)		(12	)		83.3	%		1			(18	)		-
Segment Contribution	$	1,651		$	(208	)		-		$	3,246		$	(478	)		-
Segment Operating Income Margin		13.0	%		-3.4	%					12.8	%		-4.0	%

Financial Data
AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended									Six Months Ended
	6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg
Consumer Mobility
Segment Operating Revenues
Service	$	6,948		$	7,359			-5.6	%	$	13,891		$	14,656			-5.2	%
Equipment		1,238			1,396			-11.3	%		2,623			2,877			-8.8	%
Total Segment Operating Revenues		8,186			8,755			-6.5	%		16,514			17,533			-5.8	%
Segment Operating Expenses
Operations and support expenses		4,680			5,202			-10.0	%		9,592			10,743			-10.7	%
Depreciation and amortization		932			934			-0.2	%		1,854			1,936			-4.2	%
Total Segment Operating Expenses		5,612			6,136			-8.5	%		11,446			12,679			-9.7	%
Segment Operating Income		2,574			2,619			-1.7	%		5,068			4,854			4.4	%
Equity in Net Income of Affiliates		-			-			-			-			-			-
Segment Contribution	$	2,574		$	2,619			-1.7	%	$	5,068		$	4,854			4.4	%
Segment Operating Income Margin		31.4	%		29.9	%					30.7	%		27.7	%
International
Segment Operating Revenues
Video entertainment	$	1,222		$	-			-		$	2,352		$	-			-
Wireless service		489			444			10.1	%		944			659			43.2	%
Wireless equipment		117			47			-			199			68			-
Total Segment Operating Revenues		1,828			491			-			3,495			727			-
Segment Operating Expenses
Operations and support expenses		1,723			529			-			3,311			747			-
Depreciation and amortization		298			93			-			575			121			-
Total Segment Operating Expenses		2,021			622			-			3,886			868			-
Segment Operating Income (Loss)		(193	)		(131	)		-47.3	%		(391	)		(141	)		-
Equity in Net Income of Affiliates		9			-			-			23			-			-
Segment Contribution	$	(184	)	$	(131	)		-40.5	%	$	(368	)	$	(141	)		-
Segment Operating Income Margin		-10.6	%		-26.7	%					-11.2	%		-19.4	%

Financial Data
AT&T Inc.
Consolidated Balance Sheets
Dollars in millions
	6/30/16			12/31/15
	Unaudited
Assets
Current Assets
Cash and cash equivalents	$	7,208		$	5,121
Accounts receivable - net of allowances for doubtful accounts of $642 and $704		15,830			16,532
Prepaid expenses		1,197			1,072
Other current assets		11,770			13,267
Total current assets		36,005			35,992
Property, Plant and Equipment - Net		123,537			124,450
Goodwill		105,252			104,568
Licenses		94,098			93,093
Customer Lists and Relationships - Net		16,259			18,208
Other Intangible Assets - Net		9,107			9,409
Investments in Equity Affiliates		1,677			1,606
Other Assets		15,873			15,346
Total Assets	$	401,808		$	402,672
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	9,528		$	7,636
Accounts payable and accrued liabilities		26,746			30,372
Advanced billing and customer deposits		4,465			4,682
Accrued taxes		2,773			2,176
Dividends payable		2,953			2,950
Total current liabilities		46,465			47,816
Long-Term Debt		117,308			118,515
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		57,983			56,181
Postemployment benefit obligation		34,023			34,262
Other noncurrent liabilities		21,425			22,258
Total deferred credits and other noncurrent liabilities		113,431			112,701
Stockholders' Equity
Common stock		6,495			6,495
Additional paid-in capital		89,486			89,763
Retained earnings		34,950			33,671
Treasury stock		(12,343	)		(12,592	)
Accumulated other comprehensive income		5,047			5,334
Noncontrolling interest		969			969
Total stockholders' equity		124,604			123,640
Total Liabilities and Stockholders' Equity	$	401,808		$	402,672

Financial Data
AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions
(Unaudited)
	Six months ended June 30,
	2016			2015
Operating Activities
Net income	$	7,400		$	6,523
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,139			9,274
Undistributed earnings from investments in equity affiliates		(22	)		(23	)
Provision for uncollectible accounts		705			535
Deferred income tax expense		1,767			1,244
Net gain from sale of investments, net of impairments		(85	)		(50	)
Changes in operating assets and liabilities:
Accounts receivable		543			434
Other current assets		1,069			732
Accounts payable and accrued liabilities		(3,059	)		(1,125	)
Retirement benefit funding		(280	)		(455	)
Other - net		(2,970	)		(1,191	)
Total adjustments		10,807			9,375
Net Cash Provided by Operating Activities		18,207			15,898
Investing Activities
Capital expenditures:
Purchase of property and equipment		(9,702	)		(8,328	)
Interest during construction		(437	)		(339	)
Acquisitions, net of cash acquired		(485	)		(20,954	)
Dispositions		107			72
Sales of securities, net		500			1,890
Other		-			(1	)
Net Cash Used in Investing Activities		(10,017	)		(27,660	)
Financing Activities
Issuance of long-term debt		10,140			33,958
Repayment of long-term debt		(9,129	)		(2,919	)
Purchase of treasury stock		(197	)		-
Issuance of treasury stock		119			20
Dividends paid		(5,899	)		(4,873	)
Other		(1,137	)		(2,071	)
Net Cash (Used in) Provided by Financing Activities		(6,103	)		24,115
Net increase in cash and cash equivalents		2,087			12,353
Cash and cash equivalents beginning of year		5,121			8,603
Cash and Cash Equivalents End of Period	$	7,208		$	20,956

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
		6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg
Business Solutions Wireless Subscribers												77,545			69,178			12.1	%
	Postpaid											49,432			46,697			5.9	%
	Branded Subscribers											49,432			46,697			5.9	%
	Reseller											52			19			-
	Connected Devices											28,061			22,462			24.9	%
Business Solutions Wireless Net Adds			1,371			1,769			-22.5	%		3,060			3,093			-1.1	%
	Postpaid		185			288			-35.8	%		318			585			-45.6	%
	Branded Net Adds		185			288			-35.8	%		318			585			-45.6	%
	Reseller		(13	)		3			-			(35	)		6			-
	Connected Devices		1,199			1,478			-18.9	%		2,777			2,502			11.0	%
Business Wireless Postpaid Churn			0.91	%		0.91	%		-			0.97	%		0.90	%	7		BP
Consumer Mobility Subscribers												54,260			54,724			-0.8	%
	Postpaid											27,862			29,844			-6.6	%
	Prepaid											12,633			10,438			21.0	%
	Branded Subscribers											40,495			40,282			0.5	%
	Reseller											12,869			13,487			-4.6	%
	Connected Devices											896			955			-6.2	%
Consumer Mobility Net Adds			(10	)		325			-			82			219			-62.6	%
	Postpaid		72			122			-41.0	%		68			266			-74.4	%
	Prepaid		365			331			10.3	%		865			429			-
	Branded Net Adds		437			453			-3.5	%		933			695			34.2	%
	Reseller		(446	)		(98	)		-			(824	)		(367	)		-
	Connected Devices		(1	)		(30	)		96.7	%		(27	)		(109	)		75.2	%
Consumer Mobility Postpaid Churn			1.09	%		1.16	%	-7		BP		1.16	%		1.18	%	-2		BP
Total Consumer Mobility Churn			1.96	%		1.86	%	10		BP		2.04	%		1.95	%	9		BP
Entertainment Group												51,291			33,686			52.3	%
Video Connections												25,295			5,946			-
	Satellite											20,454			-			-
	U-verse											4,841			5,946			-18.6	%
Video Net Adds			(49	)		(23	)		-			(103	)		26			-
	Satellite		342			-			-			670			-			-
	U-verse		(391	)		(23	)		-			(773	)		26			-
Broadband Connections												14,181			14,428			-1.7	%
	IP											12,596			12,013			4.9	%
	DSL											1,585			2,415			-34.4	%
Broadband Net Adds			(110	)		(107	)		-2.8	%		(105	)		(14	)		-
	IP		54			217			-75.1	%		240			630			-61.9	%
	DSL		(164	)		(324	)		49.4	%		(345	)		(644	)		46.4	%
Total Wireline Voice Connections												11,815			13,312			-11.2	%
AT&T International
Mexican Wireless Subscribers and Connections
	Subscribers											9,955			8,550			16.4	%
	Net Adds		742			(170	)		-			1,271			(458	)		-
	Total Churn		5.83	%		6.81	%	-98		BP		5.65	%		7.36	%	-171		BP
Video Subscribers and Connections
	Latin America Video Subscribers											12,523			-			-
	Pan Americana											7,175			-			-
	Brazil											5,348			-			-
Video Subscribers and Connections Net Adds
	Latin America Video Subscribers		87			-			-			14			-			-
	Pan Americana		81			-			-			109			-			-
	Brazil		6			-			-			(95	)		-			-

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
		6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg
AT&T Total Subscribers and Connections
AT&T Mobility Subscribers												131,805			123,902			6.4	%
	Postpaid											77,295			76,541			1.0	%
	Prepaid											12,633			10,438			21.0	%
	Branded Subscribers											89,928			86,979			3.4	%
	Reseller											12,920			13,506			-4.3	%
	Connected Devices											28,957			23,417			23.7	%
AT&T Mobility Net Adds			1,361			2,094			-35.0	%		3,142			3,312			-5.1	%
	Postpaid		257			410			-37.3	%		386			851			-54.6	%
	Prepaid		365			331			10.3	%		865			429			-
	Branded Net Adds		622			741			-16.1	%		1,251			1,280			-2.3	%
	Reseller		(459	)		(95	)		-			(859	)		(361	)		-
	Connected Devices		1,198			1,448			-17.3	%		2,750			2,393			14.9	%
M&A Activity, Partitioned Customers and Other Adjs.			(1	)		36			-			23			36			-36.1	%
AT&T Mobility Churn
Postpaid Churn			0.97	%		1.01	%	-4		BP		1.04	%		1.01	%	3		BP
Total Churn			1.35	%		1.31	%	4		BP		1.38	%		1.36	%	2		BP
Other
Domestic Licensed POPs (000,000)												322			321			0.3	%
Total Video Subscribers												37,846			5,971			-
	Domestic											25,323			5,971			-
	Pan Americana											7,175			-			-
	Brazil											5,348			-			-
Total Video Net Adds			38			(22	)		-			(87	)		28			-
	Domestic		(49	)		(22	)		-			(101	)		28			-
	Pan Americana		81			-			-			109			-			-
	Brazil		6			-			-			(95	)		-			-
Total Broadband Connections												15,641			15,961			-2.0	%
	IP											13,544			12,885			5.1	%
	DSL											2,097			3,076			-31.8	%
Broadband Net Adds			(123	)		(136	)		9.6	%		(137	)		(67	)		-
	IP		74			241			-69.3	%		276			680			-59.4	%
	DSL		(197	)		(377	)		47.7	%		(413	)		(747	)		44.7	%
Total Wireline Voice Connections												20,877			23,497			-11.2	%
Total Wireless Subscribers												141,760			132,452			7.0	%
Domestic Wireless Subscribers												131,805			123,902			6.4	%
Mexican Wireless Subscribers												9,955			8,550			16.4	%
Branded Subscribers												99,557			95,049			4.7	%
Branded Net Adds			1,401			741			89.1	%		2,596			1,280			-
AT&T Inc.
Capital expenditures:
	Purchase of property and equipment	$	5,251		$	4,480			17.2	%	$	9,702		$	8,328			16.5	%
	Interest during construction	$	219		$	216			1.4	%	$	437		$	339			28.9	%
Dividends Declared per Share		$	0.48		$	0.47			2.1	%	$	0.96		$	0.94			2.1	%
End of Period Common Shares Outstanding (000,000)												6,152			5,193			18.5	%
Debt Ratio1,2												50.4	%		55.5	%	-510		BP
Total Employees												277,200			250,730			10.6	%

1	Prior year amounts restated to conform to current period reporting methodology.
2	Total long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity.
	Note: For the end of 2Q16, total switched access lines were 15,285.
		Business Solutions and Consumer Mobility may not total to AT&T Mobility due to rounding.

Financial Data
AT&T Inc.
Segment Supplemental - QTD
Dollars in millions
Unaudited
For the three months ended June 30, 2016
	Revenues		Operations and Support Expenses		EBITDA			Depreciation and Amortization		Operating Income (Loss)			Equity in Net Income (Loss) of Affiliates			Segment Contribution
Business Solutions	$	17,579	$	10,857	$	6,722		$	2,521	$	4,201		$	-		$	4,201
Entertainment Group		12,711		9,569		3,142			1,489		1,653			(2	)		1,651
Consumer Mobility		8,186		4,680		3,506			932		2,574			-			2,574
International		1,828		1,723		105			298		(193	)		9			(184	)
Segment Total		40,304		26,829		13,475			5,240		8,235		$	7		$	8,242
Corporate and Other		216		293		(77	)		20		(97	)
Acquisition-related items		-		233		(233	)		1,316		(1,549	)
Certain Significant items		-		29		(29	)		-		(29	)
AT&T Inc.	$	40,520	$	27,384	$	13,136		$	6,576	$	6,560
For the three months ended June 30, 2015
	Revenues		Operations and Support Expenses		EBITDA			Depreciation and Amortization		Operating Income (Loss)			Equity in Net Income (Loss) of Affiliates			Segment Contribution
Business Solutions	$	17,664	$	10,972	$	6,692		$	2,460	$	4,232		$	-		$	4,232
Entertainment Group		5,782		4,913		869			1,065		(196	)		(12	)		(208	)
Consumer Mobility		8,755		5,202		3,553			934		2,619			-			2,619
International		491		529		(38	)		93		(131	)		-			(131	)
Segment Total		32,692		21,616		11,076			4,552		6,524		$	(12	)	$	6,512
Corporate and Other		323		236		87			24		63
Acquisition-related items		-		694		(694	)		120		(814	)
Certain Significant items		-		-		-			-		-
AT&T Inc.	$	33,015	$	22,546	$	10,469		$	4,696	$	5,773

Financial Data
AT&T Inc.
Segment Supplemental - YTD
Dollars in millions
Unaudited
For the six months ended June 30, 2016
	Revenues		Operations and Support Expenses			EBITDA			Depreciation and Amortization		Operating Income (Loss)			Equity in Net Income of Affiliates			Segment Contribution
Business Solutions	$	35,188	$	21,659		$	13,529		$	5,029	$	8,500		$	-		$	8,500
Entertainment Group		25,369		19,147			6,222			2,977		3,245			1			3,246
Consumer Mobility		16,514		9,592			6,922			1,854		5,068			-			5,068
International		3,495		3,311			184			575		(391	)		23			(368	)
Segment Total		80,566		53,709			26,857			10,435		16,422		$	24		$	16,446
Corporate and Other		489		670			(181	)		37		(218	)
Acquisition-related items		-		528			(528	)		2,667		(3,195	)
Certain Significant items		-		(682	)		682			-		682
AT&T Inc.	$	81,055	$	54,225		$	26,830		$	13,139	$	13,691
For the six months ended June 30, 2015
	Revenues		Operations and Support Expenses			EBITDA			Depreciation and Amortization		Operating Income (Loss)			Equity in Net Income (Loss) of Affiliates			Segment Contribution
Business Solutions	$	35,221	$	22,045		$	13,176		$	4,802	$	8,374		$	-		$	8,374
Entertainment Group		11,442		9,772			1,670			2,130		(460	)		(18	)		(478	)
Consumer Mobility		17,533		10,743			6,790			1,936		4,854			-			4,854
International		727		747			(20	)		121		(141	)		-			(141	)
Segment Total		64,923		43,307			21,616			8,989		12,627		$	(18	)	$	12,609
Corporate and Other		668		470			198			44		154
Acquisition-related items		-		993			(993	)		241		(1,234	)
Certain Significant items		-		217			(217	)		-		(217	)
AT&T Inc.	$	65,591	$	44,987		$	20,604		$	9,274	$	11,330

Financial Data
AT&T Inc.
Supplemental AT&T Mobility Results
Dollars in millions
Unaudited
	Three Months Ended											Six Months Ended
	6/30/2016				6/30/2015				% Chg			6/30/2016				6/30/2015				% Chg
AT&T Mobility
Operating Revenues
Service		$	14,912			$	15,115			-1.3	%		$	29,710			$	29,927			-0.7	%
Equipment			3,013				3,189			-5.5	%			6,169				6,563			-6.0	%
Total Operating Revenues			17,925				18,304			-2.1	%			35,879				36,490			-1.7	%
Operating Expenses
Operations and support expenses			10,502				10,973			-4.3	%			21,126				22,445			-5.9	%
Depreciation and amortization			2,081				2,031			2.5	%			4,137				4,036			2.5	%
Total Operating Expenses			12,583				13,004			-3.2	%			25,263				26,481			-4.6	%
Operating Income		$	5,342			$	5,300			0.8	%		$	10,616			$	10,009			6.1	%
Operating Income Margin			29.8	%			29.0	%						29.6	%			27.4	%