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

AT&T Inc.
Financial Data
Consolidated Statements of Income
Dollars in millions except per share amounts			Three Months Ended
Unaudited			March 31,
			2018		2017 As Adjusted	Percent Change
Operating Revenues
	Service	$	33,646	$	36,456	-7.7	%
	Equipment		4,392		2,909	51.0	%
Total Operating Revenues			38,038		39,365	-3.4	%
Operating Expenses
Cost of services and sales
Equipment			4,848		3,848	26.0	%
Broadcast, programming and operations			5,166		4,974	3.9	%
Other cost of services (exclusive of depreciation           and amortization shown separately below)			7,932		9,288	-14.6	%
Selling, general and administrative			7,897		8,772	-10.0	%
Depreciation and amortization			5,994		6,127	-2.2	%
Total Operating Expenses			31,837		33,009	-3.6	%
Operating Income			6,201		6,356	-2.4	%
Interest Expense			(1,771)		(1,293)	37.0	%
Equity in Net Income (Loss) of Affiliates			9		(173)	-	%
Other Income (Expense) - Net			1,702		488	-	%
Income Before Income Taxes			6,141		5,378	14.2	%
Income Tax Expense			1,382		1,804	-23.4	%
Net Income			4,759		3,574	33.2	%
Less: Net Income Attributable to     Noncontrolling Interest			(97)		(105)	7.6	%
Net Income Attributable to AT&T		$	4,662	$	3,469	34.4	%
Basic Earnings Per Share Attributable to AT&T		$	0.75	$	0.56	33.9	%
Weighted Average Common        Shares Outstanding (000,000)			6,161		6,166	-0.1	%
Diluted Earnings Per Share Attributable to AT&T		$	0.75	$	0.56	33.9	%
Weighted Average Common        Shares Outstanding with Dilution (000,000)			6,180		6,186	-0.1	%

AT&T Inc.
Financial Data
Consolidated Balance Sheets
Dollars in millions
Unaudited for 2018		Mar. 31,		Dec. 31,
		2018		2017
Assets
Current Assets
Cash and cash equivalents	$	48,872	$	50,498
Accounts receivable - net of allowances for doubtful accounts of $642 and $663		16,290		16,522
Prepaid expenses		1,335		1,369
Other current assets		12,008		10,757
Total current assets		78,505		79,146
Property, Plant and Equipment - Net		125,124		125,222
Goodwill		105,482		105,449
Licenses		96,556		96,136
Customer Lists and Relationships - Net		9,878		10,676
Other Intangible Assets - Net		7,201		7,464
Investments in and Advances to Equity Affiliates		2,623		1,560
Other Assets		20,943		18,444
Total Assets	$	446,312	$	444,097
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	29,322	$	38,374
Accounts payable and accrued liabilities		31,569		34,470
Advanced billings and customer deposits		5,081		4,213
Accrued taxes		1,534		1,262
Dividends payable		3,074		3,070
Total current liabilities		70,580		81,389
Long-Term Debt		133,724		125,972
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		45,730		43,207
Postemployment benefit obligation		30,116		31,775
Other noncurrent liabilities		19,117		19,747
Total deferred credits and other noncurrent liabilities		94,963		94,729
Stockholders' Equity
Common stock		6,495		6,495
Additional paid-in capital		89,404		89,563
Retained earnings		55,018		50,500
Treasury stock		(12,432)		(12,714)
Accumulated other comprehensive income		7,404		7,017
Noncontrolling interest		1,156		1,146
Total stockholders' equity		147,045		142,007
Total Liabilities and Stockholders' Equity	$	446,312	$	444,097

AT&T Inc.
Financial Data
Consolidated Statements of Cash Flows
Dollars in millions		Three Months Ended
Unaudited			March 31,
			2018		2017 As Adjusted
Operating Activities
Net income		$	4,759	$	3,574
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		5,994		6,127
	Undistributed earnings from investments in equity affiliates		(2)		182
	Provision for uncollectible accounts		438		393
	Deferred income tax expense		1,222		480
	Net (gain) loss from investments, net of impairments		2		61
	Actuarial (gain) loss on pension and postretirement benefits		(930)		-
Changes in operating assets and liabilities:
	Accounts receivable		(439)		445
	Other current assets		614		229
	Accounts payable and other accrued liabilities		(1,962)		(1,582)
	Equipment installment receivables and related sales		505		394
	Deferred customer contract acquisition and fulfillment costs		(826)		(436)
Retirement benefit funding			(140)		(140)
Other - net			(288)		(762)
Total adjustments			4,188		5,391
Net Cash Provided by Operating Activities			8,947		8,965
Investing Activities
Capital expenditures:
	Purchase of property and equipment		(5,957)		(5,784)
	Interest during construction		(161)		(231)
Acquisitions, net of cash acquired			(234)		(162)
Dispositions			56		6
Sales (purchases) of securities, net			(116)		17
Advances to and investments in equity affiliates, net			(1,007)		-
Cash collections of deferred purchase price			267		185
Net Cash Used in Investing Activities			(7,152)		(5,969)
Financing Activities
Issuance of long-term debt			2,565		12,440
Repayment of long-term debt			(4,911)		(3,053)
Purchase of treasury stock			(145)		(177)
Issuance of treasury stock			11		21
Dividends paid			(3,070)		(3,009)
Other			2,048		(173)
Net Cash (Used in) Provided by Financing Activities			(3,502)		6,049
Net (decrease) increase in cash and cash equivalents and restricted cash			(1,707)		9,045
Cash and cash equivalents and restricted cash beginning of year			50,932		5,935
Cash and Cash Equivalents and Restricted Cash End of Period		$	49,225	$	14,980

AT&T Inc.
Consolidated Supplementary Data
Supplementary Financial Data
Dollars in millions except per share amounts			Three Months Ended
Unaudited			March 31,			Percent
			2018		2017	Change
Capital expenditures
	Purchase of property and equipment	$	5,957	$	5,784	3.0	%
	Interest during construction		161		231	-30.3	%
Total Capital Expenditures		$	6,118	$	6,015	1.7	%
Dividends Declared per Share		$	0.50	$	0.49	2.0	%
End of Period Common Shares Outstanding (000,000)			6,148		6,147	-	%
Debt Ratio			52.6%		51.6%	100	BP
Total Employees			249,240		264,530	-5.8	%

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited		March 31,			Percent
		2018	2017		Change
Wireless Subscribers
	Domestic	143,832	133,804		7.5	%
	Mexico	15,642	12,606		24.1	%
Total Wireless Subscribers		159,474	146,410		8.9	%
Total Branded Wireless Subscribers		108,566	103,118		5.3	%
Video Connections
	Domestic	25,394	25,399		-	%
	Latin America	13,573	13,678		-0.8	%
Total Video Connections		38,967	39,077		-0.3	%
Broadband Connections
	IP	14,637	14,110		3.7	%
	DSL	1,138	1,585		-28.2	%
Total Broadband Connections		15,775	15,695		0.5	%
Voice Connections
	Network Access Lines	11,288	13,363		-15.5	%
	U-verse  VoIP Connections	5,585	5,858		-4.7	%
Total Retail Voice Connections		16,873	19,221		-12.2	%
		Three Months Ended
		March 31,			Percent
		2018	2017		Change
Wireless Net Additions
	Domestic	2,630	2,078	��	26.6	%
	Mexico	543	633		-14.2	%
Total Wireless Net Additions		3,173	2,711		17.0	%
Total Branded Wireless Net Additions		858	735		16.7	%
Video Net Additions
	Domestic	124	(161)		-	%
	Latin America	(15)	91		-	%
Total Video Net Additions		109	(70)		-	%
Broadband Net Additions
	IP	150	246		-39.0	%
	DSL	(94)	(156)		39.7	%
Total Broadband Net Additions		56	90		-37.8	%

CONSUMER MOBILITY
The Consumer Mobility segment provides nationwide wireless service to consumers and wholesale and resale wireless subscribers located in the U.S. or in U.S. territories. We  provide voice and data services, including high-speed internet, and video services.
Segment Results
Dollars in millions			Three Months Ended
Unaudited			March 31,				Percent
			2018		2017		Change
Segment Operating Revenues
	Service	$	11,612	$	12,465		-6.8	%
	Equipment		3,374		2,341		44.1	%
Total Segment Operating Revenues			14,986		14,806		1.2	%
Segment Operating Expenses
Operations and support			8,524		8,560		-0.4	%
Depreciation and amortization			1,807		1,716		5.3	%
Total Segment Operating Expenses			10,331		10,276		0.5	%
Segment Operating Income			4,655		4,530		2.8	%
Equity in Net Income of Affiliates			-		-		-	%
Segment Contribution		$	4,655	$	4,530		2.8	%
Segment Operating Income Margin			31.1	%	30.6	%	50	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited		March 31,		Percent
		2018	2017	Change
Consumer Mobility Subscribers
	Postpaid	65,489	65,692	-0.3	%
	Prepaid	14,928	13,844	7.8	%
Branded		80,417	79,536	1.1	%
Reseller		8,910	10,549	-15.5	%
Total Consumer Mobility Subscribers		89,327	90,085	-0.8	%
		Three Months Ended
		March 31,		Percent
		2018	2017	Change
Consumer Mobility Net Additions
	Postpaid	(64)	(282)	77.3	%
	Prepaid	192	282	-31.9	%
Branded		128	-	-	%
Reseller		(390)	(587)	33.6	%
Total Consumer Mobility Net Additions		(262)	(587)	55.4	%

BUSINESS SOLUTIONS
The Business Solutions segment provides services to business customers, including multinational companies; governmental and wholesale customers. We provide advanced IP-based services including Virtual Private Networks (VPN); Ethernet-related products and broadband, collectively referred to as strategic business services; as well as traditional data and voice products. We provide a complete communications solution to our business customers.
Segment Results
Dollars in millions			Three Months Ended
Unaudited			March 31,				Percent
			2018		2017		Change
Segment Operating Revenues
	Wireless service	$	1,791	$	2,003		-10.6	%
	Strategic services		3,138		2,974		5.5	%
	Legacy voice and data services		2,839		3,549		-20.0	%
	Other service and equipment		839		878		-4.4	%
	Wireless equipment		578		288		-	%
Total Segment Operating Revenues			9,185		9,692		-5.2	%
Segment Operating Expenses
Operations and support			5,638		6,040		-6.7	%
Depreciation and amortization			1,462		1,465		-0.2	%
Total Segment Operating Expenses			7,100		7,505		-5.4	%
Segment Operating Income			2,085		2,187		-4.7	%
Equity in Net Income (Loss) of Affiliates			(1)		-		-	%
Segment Contribution		$	2,084	$	2,187		-4.7	%
Segment Operating Income Margin			22.7	%	22.6	%	10	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited		March 31,		Percent
		2018	2017	Change
Business Solutions Wireless Subscribers
	Postpaid	11,942	11,243	6.2	%
	Prepaid	743	-	-	%
Branded		12,685	11,243	12.8	%
Reseller		92	76	21.1	%
Connected Devices		41,728	32,400	28.8	%
Total Business Mobility Subscribers		54,505	43,719	24.7	%
Business Solutions IP Broadband Connections		1,021	980	4.2	%
		Three Months Ended
		March 31,		Percent
		2018	2017	Change
Business Solutions Wireless Net Additions
	Postpaid	113	88	28.4	%
	Prepaid	49	-	-	%
Branded		162	88	84.1	%
Reseller		2	5	-60.0	%
Connected Devices		2,728	2,572	6.1	%
Total Business Solutions Wireless Net Additions		2,892	2,665	8.5	%
Business Solutions IP Broadband   Net Additions		(4)	4	-	%

ENTERTAINMENT GROUP
The Entertainment Group segment provides video, internet, voice communication, and interactive and targeted advertising services to customers located in the U.S. or in U.S. territories.
Segment Results
Dollars in millions			Three Months Ended
Unaudited			March 31,				Percent
			2018		2017		Change
Segment Operating Revenues
	Video entertainment	$	8,359	$	9,020		-7.3	%
	High-speed internet		1,878		1,941		-3.2	%
	Legacy voice and data services		819		1,031		-20.6	%
	Other service and equipment		521		609		-14.4	%
Total Segment Operating Revenues			11,577		12,601		-8.1	%
Segment Operating Expenses
Operations and support			8,939		9,605		-6.9	%
Depreciation and amortization			1,312		1,420		-7.6	%
Total Segment Operating Expenses			10,251		11,025		-7.0	%
Segment Operating Income			1,326		1,576		-15.9	%
Equity in Net Income (Loss) of Affiliates			9		(6)		-	%
Segment Contribution		$	1,335	$	1,570		-15.0	%
Segment Operating Income Margin			11.5	%	12.5	%	-100	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited		March 31,		Percent
		2018	2017	Change
Video Connections
	Satellite	20,270	21,012	-3.5	%
	U-verse	3,632	4,020	-9.7	%
	DIRECTV NOW	1,467	339	-	%
Total Video Connections		25,369	25,371	-	%
Broadband Connections
	IP	13,616	13,130	3.7	%
	DSL	816	1,164	-29.9	%
Total Broadband Connections		14,432	14,294	1.0	%
Voice Connections
	Retail Consumer Switched Access Lines	4,535	5,533	-18.0	%
	U-verse Consumer VoIP Connections	5,105	5,470	-6.7	%
Total Retail Consumer Voice Connections		9,640	11,003	-12.4	%
		Three Months Ended
		March 31,		Percent
		2018	2017	Change
Video Net Additions1
	Satellite	(188)	-	-	%
	U-verse	1	(233)	-	%
	DIRECTV NOW	312	72	-	%
Total Video Net Additions		125	(161)	-	%
Broadband Net Additions
	IP	154	242	-36.4	%
	DSL	(72)	(127)	43.3	%
Total Broadband Net Additions		82	115	-28.7	%
	1 Includes the impact of customers that migrated to DIRECTV NOW.

INTERNATIONAL
The International segment provides entertainment services in Latin America and wireless services in Mexico. Video entertainment services are provided to primarily residential customers using satellite technology. We utilize our regional and national wireless networks in Mexico to provide consumer and business customers with wireless data and voice communication services. Our international subsidiaries conduct business in their local currency and operating results are converted to U.S. dollars using official exchange rates.
Segment Results
Dollars in millions			Three Months Ended
Unaudited			March 31,				Percent
			2018		2017		Change
Segment Operating Revenues
	Video entertainment	$	1,354	$	1,341		1.0	%
	Wireless service		404		475		-14.9	%
	Wireless equipment		267		113		136.3	%
Total Segment Operating Revenues			2,025		1,929		5.0	%
Segment Operating Expenses
Operations and support			1,804		1,759		2.6	%
Depreciation and amortization			332		290		14.5	%
Total Segment Operating Expenses			2,136		2,049		4.2	%
Segment Operating Income (Loss)			(111)		(120)		7.5	%
Equity in Net Income (Loss) of Affiliates			-		20		-	%
Segment Contribution		$	(111)	$	(100)		-11.0	%
Segment Operating Income Margin			(5.5)	%	(6.2)	%	70	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited		March 31,		Percent
		2018	2017	Change
Mexican Wireless Subscribers
	Postpaid	5,607	5,095	10.0	%
	Prepaid	9,857	7,244	36.1	%
Branded		15,464	12,339	25.3	%
Reseller		178	267	-33.3	%
Total Mexican Wireless Subscribers		15,642	12,606	24.1	%
Latin America Satellite Subscribers
Total Latin America Satellite Subscribers		13,573	13,678	-0.8	%
		Three Months Ended
		March 31,		Percent
		2018	2017	Change
Mexican Wireless Net Additions
	Postpaid	109	130	-16.2	%
	Prepaid	459	517	-11.2	%
Branded		568	647	-12.2	%
Reseller		(25)	(14)	-78.6	%
Total Mexican Wireless Net Additions		543	633	-14.2	%
Latin America Satellite Net Additions
Total Latin America Satellite Net Additions		(15)	91	-	%

SUPPLEMENTAL OPERATING INFORMATION - AT&T MOBILITY
As a supplemental discussion of our operating results, for comparison purposes, we are providing a view of our combined domestic wireless operations (AT&T Mobility).
Operating Results
Dollars in millions			Three Months Ended
Unaudited			March 31,				Percent
			2018		2017		Change
Operating Revenues
	Service	$	13,403	$	14,468		-7.4	%
	Equipment		3,952		2,629		50.3	%
Total Operating Revenues			17,355		17,097		1.5	%
Operating Expenses
Operations and support			10,102		9,885		2.2	%
Depreciation and amortization			2,095		1,992		5.2	%
Total Operating Expenses			12,197		11,877		2.7	%
Operating Income		$	5,158	$	5,220		-1.2	%
Operating Income Margin			29.7	%	30.5	%	-80	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited		March 31,		Percent
		2018	2017	Change
AT&T Mobility Subscribers
	Postpaid	77,431	76,935	0.6	%
	Prepaid	15,671	13,844	13.2	%
Branded		93,102	90,779	2.6	%
Reseller		9,002	10,625	-15.3	%
Connected Devices		41,728	32,400	28.8	%
Total AT&T Mobility Subscribers		143,832	133,804	7.5	%
Domestic Licensed POPs (000,000)		329	325	1.2	%
		Three Months Ended
		March 31,		Percent
		2018	2017	Change
AT&T Mobility Net Additions
	Postpaid	49	(194)	-	%
	Prepaid	241	282	-14.5	%
Branded		290	88	-	%
Reseller		(388)	(582)	33.3	%
Connected Devices		2,728	2,572	6.1	%
Total AT&T Mobility Net Additions		2,630	2,078	26.6	%
M&A Activity, Partitioned Customers and   Other Adjustments		1	(2,723)	-	%
Branded Churn		1.65%	1.71%	-6	BP
Postpaid Churn		1.06%	1.12%	-6	BP
Postpaid Phone Only Churn		0.84%	0.90%	-6	BP

SUPPLEMENTAL SEGMENT RECONCILIATION
Three Months Ended
Dollars in millions
Unaudited
March 31, 2018
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Consumer Mobility	$	14,986	$	8,524	$	6,462	$	1,807	$	4,655	$	-	$	4,655
Business Solutions		9,185		5,638		3,547		1,462		2,085		(1)		2,084
Entertainment Group		11,577		8,939		2,638		1,312		1,326		9		1,335
International		2,025		1,804		221		332		(111)		-		(111)
Segment Total		37,773		24,905		12,868		4,913		7,955	$	8	$	7,963
Corporate and Other		265		691		(426)		19		(445)
Acquisition-related items		-		67		(67)		1,062		(1,129)
Certain Significant items		-		180		(180)		-		(180)
AT&T Inc.	$	38,038	$	25,843	$	12,195	$	5,994	$	6,201
March 31, 2017
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Consumer Mobility	$	14,806	$	8,560	$	6,246	$	1,716	$	4,530	$	-	$	4,530
Business Solutions		9,692		6,040		3,652		1,465		2,187		-		2,187
Entertainment Group		12,601		9,605		2,996		1,420		1,576		(6)		1,570
International		1,929		1,759		170		290		(120)		20		(100)
Segment Total		39,028		25,964		13,064		4,891		8,173	$	14	$	8,187
Corporate and Other		337		829		(492)		34		(526)
Acquisition-related items		-		207		(207)		1,202		(1,409)
Certain Significant items		-		(118)		118		-		118
AT&T Inc.	$	39,365	$	26,882	$	12,483	$	6,127	$	6,356

As a supplemental discussion of our operating results, we are providing results under the comparative historical accounting method prior to our adoption of ASC 606.
SUPPLEMENTAL INCOME STATEMENT
Supplemental Consolidated Statements of Income
Dollars in millions except per share amounts			Three Months Ended
Unaudited			March 31,
			2018		Impact of ASC 606		Historical 2018		2017	Percent Change
Operating Revenues
	Service	$	33,646	$	(1,423)	$	35,069	$	36,456	-3.8	%
	Equipment		4,392		531		3,861		2,909	32.7	%
Total Operating Revenues			38,038		(892)		38,930		39,365	-1.1	%
Operating Expenses
Cost of services and sales
Equipment			4,848		-		4,848		3,848	26.0	%
Broadcast, programming and operations			5,166		-		5,166		4,974	3.9	%
Other cost of services (exclusive of depreciation           and amortization shown separately below)			7,932		(929)		8,861		9,288	-4.6	%
Selling, general and administrative			7,897		(600)		8,497		8,772	-3.1	%
Depreciation and amortization			5,994		-		5,994		6,127	-2.2	%
Total Operating Expenses			31,837		(1,529)		33,366		33,009	1.1	%
Operating Income			6,201		637		5,564		6,356	-12.5	%
Interest Expense			(1,771)		-		(1,771)		(1,293)	37.0	%
Equity in Net Income (Loss) of Affiliates			9		-		9		(173)	-	%
Other Income (Expense) - Net			1,702		-		1,702		488	-	%
Income Before Income Taxes			6,141		637		5,504		5,378	2.3	%
Income Tax Expense			1,382		156		1,226		1,804	-32.0	%
Net Income			4,759		481		4,278		3,574	19.7	%
Less: Net Income Attributable to     Noncontrolling Interest			(97)		(6)		(91)		(105)	13.3	%
Net Income Attributable to AT&T		$	4,662	$	475	$	4,187	$	3,469	20.7	%
Basic Earnings Per Share Attributable to AT&T		$	0.75	$	0.07	$	0.68	$	0.56	21.4	%
Weighted Average Common        Shares Outstanding (000,000)			6,161		-		6,161		6,166	-0.1	%
Diluted Earnings Per Share Attributable to AT&T		$	0.75	$	0.07	$	0.68	$	0.56	21.4	%
Weighted Average Common        Shares Outstanding with Dilution (000,000)			6,180		-		6,180		6,186	-0.1	%

SUPPLEMENTAL CONSUMER MOBILITY
Supplemental Segment Results
Dollars in millions			Three Months Ended
Unaudited			March 31,
			2018		Impact of ASC 606		Historical 2018		2017	Percent Change
Segment Operating Revenues
	Service	$	11,612	$	(612)	$	12,224	$	12,465	-1.9	%
	Equipment		3,374		331		3,043		2,341	30.0	%
Total Segment Operating Revenues			14,986		(281)		15,267		14,806	3.1	%
Segment Operating Expenses
Operations and support			8,524		(650)		9,174		8,560	7.2	%
EBITDA			6,462		369		6,093		6,246	-2.4	%
Depreciation and amortization			1,807		-		1,807		1,716	5.3	%
Total Segment Operating Expenses			10,331		(650)		10,981		10,276	6.9	%
Segment Operating Income			4,655		369		4,286		4,530	-5.4	%
Equity in Net Income of Affiliates			-		-		-		-	-	%
Segment Contribution		$	4,655	$	369	$	4,286	$	4,530	-5.4	%
Operating Income Margin			31.1%				28.1%		30.6%	-250	BP
EBITDA Margin			43.1%				39.9%		42.2%	-230	BP
EBITDA Service Margin			55.6%				49.8%		50.1%	-30	BP

SUPPLEMENTAL BUSINESS SOLUTIONS
Supplemental Segment Results
Dollars in millions			Three Months Ended
Unaudited			March 31,
			2018		Impact of ASC 606		Historical 2018		2017	Percent Change
Segment Operating Revenues
	Wireless service	$	1,791	$	(203)	$	1,994	$	2,003	-0.4	%
	Fixed strategic services		3,138		(2)		3,140		2,974	5.6	%
	Legacy voice and data services		2,839		(267)		3,106		3,549	-12.5	%
	Other service and equipment		839		(69)		908		878	3.4	%
	Wireless equipment		578		190		388		288	34.7	%
Total Segment Operating Revenues			9,185		(351)		9,536		9,692	-1.6	%
Segment Operating Expenses
Operations and support			5,638		(423)		6,061		6,040	0.3	%
EBITDA			3,547		72		3,475		3,652	-4.8	%
Depreciation and amortization			1,462		-		1,462		1,465	-0.2	%
Total Segment Operating Expenses			7,100		(423)		7,523		7,505	0.2	%
Segment Operating Income			2,085		72		2,013		2,187	-8.0	%
Equity in Net Income of Affiliates			(1)		-		(1)		-	-	%
Segment Contribution		$	2,084	$	72	$	2,012	$	2,187	-8.0	%
Operating Income Margin			22.7%				21.1%		22.6%	-150	BP
EBITDA Margin			38.6%				36.4%		37.7%	-130	BP

 

SUPPLEMENTAL ENTERTAINMENT GROUP
Supplemental Segment Results
Dollars in millions			Three Months Ended
Unaudited			March 31,
			2018		Impact of ASC 606		Historical 2018		2017	Percent Change
Segment Operating Revenues
	Video entertainment	$	8,359	$	(106)	$	8,465	$	9,020	-6.2	%
	High-speed internet		1,878		-		1,878		1,941	-3.2	%
	Legacy voice and data services		819		(35)		854		1,031	-17.2	%
	Other service and equipment		521		(72)		593		609	-2.6	%
Total Segment Operating Revenues			11,577		(213)		11,790		12,601	-6.4	%
Segment Operating Expenses
Operations and support			8,939		(414)		9,353		9,605	-2.6	%
EBITDA			2,638		201		2,437		2,996	-18.7	%
Depreciation and amortization			1,312		-		1,312		1,420	-7.6	%
Total Segment Operating Expenses			10,251		(414)		10,665		11,025	-3.3	%
Segment Operating Income			1,326		201		1,125		1,576	-28.6	%
Equity in Net Income (Loss) of Affiliates			9		-		9		(6)	-	%
Segment Contribution		$	1,335	$	201	$	1,134	$	1,570	-27.8	%
Operating Income Margin			11.5%				9.5%		12.5%	-300	BP
EBITDA Margin			22.8%				20.7%		23.8%	-310	BP

SUPPLEMENTAL INTERNATIONAL
Supplemental Segment Results
Dollars in millions			Three Months Ended
Unaudited			March 31,
			2018		Impact of ASC 606		Historical 2018		2017	Percent Change
Segment Operating Revenues
	Video entertainment	$	1,354	$	-	$	1,354	$	1,341	1.0	%
	Wireless service		404		(50)		454		475	-4.4	%
	Wireless equipment		267		10		257		113	-	%
Total Segment Operating Revenues			2,025		(40)		2,065		1,929	7.1	%
Segment Operating Expenses
Operations and support			1,804		(35)		1,839		1,759	4.5	%
EBITDA			221		(5)		226		170	32.9	%
Depreciation and amortization			332		-		332		290	14.5	%
Total Segment Operating Expenses			2,136		(35)		2,171		2,049	6.0	%
Segment Operating Income (Loss)			(111)		(5)		(106)		(120)	11.7	%
Equity in Net Income (Loss) of Affiliates			-		-		-		20	-	%
Segment Contribution		$	(111)	$	(5)	$	(106)	$	(100)	-6.0	%
Operating Income Margin			-5.5%				-5.1%		-6.2%	110	BP
EBITDA Margin			10.9%				10.9%		8.8%	210	BP

SUPPLEMENTAL AT&T MOBILITY
Supplemental Operating Results
Dollars in millions			Three Months Ended
Unaudited			March 31,
			2018		Impact of ASC 606		Historical 2018		2017	Percent Change
Operating Revenues
	Service	$	13,403	$	(814)	$	14,217	$	14,468	-1.7	%
	Equipment		3,952		521		3,431		2,629	30.5	%
Total Operating Revenues			17,355		(293)		17,648		17,097	3.2	%
Operating Expenses
Operations and support			10,102		(712)		10,814		9,885	9.4	%
EBITDA			7,253		419		6,834		7,212	-5.2	%
Depreciation and amortization			2,095		-		2,095		1,992	5.2	%
Total Operating Expenses			12,197		(712)		12,909		11,877	8.7	%
Operating Income		$	5,158	$	419	$	4,739	$	5,220	-9.2	%
Operating Income Margin			29.7%				26.9%		30.5%	-360	BP
EBITDA Margin			41.8%				38.7%		42.2%	-350	BP
EBITDA Service Margin			54.1%				48.1%		49.8%	-170	BP

SUPPLEMENTAL LATIN AMERICA
Supplemental Latin America Results
Dollars in millions			Three Months Ended
Unaudited			March 31,
			2018		Impact of ASC 606		Historical 2018		2017	Percent Change
Operating Revenues
	Video entertainment	$	1,354	$	-	$	1,354	$	1,341	1.0	%
Total Operating Revenues			1,354		-		1,354		1,341	1.0	%
Operating Expenses
Operations and support			1,001		(31)		1,032		1,050	-1.7	%
EBITDA			353		31		322		291	10.7	%
Depreciation and amortization			205		-		205		214	-4.2	%
Total Operating Expenses			1,206		(31)		1,237		1,264	-2.1	%
Operating Income (Loss)			148		31		117		77	51.9	%
Equity in Net Income (Loss) of Affiliates			-		-		-		20	-	%
Operating Contribution		$	148	$	31	$	117	$	97	20.6	%
Operating Income Margin			10.9%				8.6%		5.7%	290	BP
EBITDA Margin			26.1%				23.8%		21.7%	210	BP

SUPPLEMENTAL MEXICO
Supplemental Mexico Results
Dollars in millions			Three Months Ended
Unaudited			March 31,
			2018		Impact of ASC 606			Historical 2018		2017	Percent Change
Operating Revenues
	Wireless service	$	404	$	(50)		$	454	$	475	-4.4	%
	Wireless equipment		267		10			257		113	-	%
Total Operating Revenues			671		(40)			711		588	20.9	%
Operating Expenses
Operations and support			803		(4)			807		709	13.8	%
EBITDA			(132)		(36)			(96)		(121)	20.7	%
Depreciation and amortization			127		-			127		76	67.1	%
Total Operating Expenses			930		(4)			934		785	19.0	%
Operating Income (Loss)			(259)		(36)			(223)		(197)	-13.2	%
Operating Contribution		$	(259)	$	(36)		$	(223)	$	(197)	-13.2	%
Operating Income Margin			-38.6%					-31.4%		-33.5%	210	BP
EBITDA Margin			-19.7%			��		-13.5%		-20.6%	710	BP