| AT&T Inc. | ||||||||||||||||||||||||
Financial Data | ||||||||||||||||||||||||
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Consolidated Statements of Income | ||||||||||||||||||||||||
Dollars in millions except per share amounts | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
Unaudited | June 30, | June 30, | ||||||||||||||||||||||
| 2018 | 2017 As Adjusted | Percent Change | 2018 | 2017 As Adjusted | Percent Change | ||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||
Service | $ | 33,773 | $ | 36,538 | -7.6 | % | $ | 67,419 | $ | 72,994 | -7.6 | % | ||||||||||||
Equipment | 4,080 | 3,299 | 23.7 | % | 8,472 | 6,208 | 36.5 | % | ||||||||||||||||
Media | 1,133 | - | - | % | 1,133 | - | - | % | ||||||||||||||||
Total Operating Revenues | 38,986 | 39,837 | -2.1 | % | 77,024 | 79,202 | -2.7 | % | ||||||||||||||||
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Operating Expenses | ||||||||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||
Equipment | 4,377 | 4,138 | 5.8 | % | 9,225 | 7,986 | 15.5 | % | ||||||||||||||||
Broadcast, programming and operations | 5,449 | 4,898 | 11.2 | % | 10,615 | 9,872 | 7.5 | % | ||||||||||||||||
Other cost of revenues (exclusive of depreciation and amortization shown separately below) | 7,632 | 9,569 | -20.2 | % | 15,564 | 18,857 | -17.5 | % | ||||||||||||||||
Selling, general and administrative | 8,684 | 8,559 | 1.5 | % | 16,581 | 17,331 | -4.3 | % | ||||||||||||||||
Depreciation and amortization | 6,378 | 6,147 | 3.8 | % | 12,372 | 12,274 | 0.8 | % | ||||||||||||||||
Total Operating Expenses | 32,520 | 33,311 | -2.4 | % | 64,357 | 66,320 | -3.0 | % | ||||||||||||||||
Operating Income | 6,466 | 6,526 | -0.9 | % | 12,667 | 12,882 | -1.7 | % | ||||||||||||||||
Interest Expense | (2,023 | ) | (1,395 | ) | 45.0 | % | (3,794 | ) | (2,688 | ) | 41.1 | % | ||||||||||||
Equity in Net Income (Loss) of Affiliates | (16 | ) | 14 | - | % | (7 | ) | (159 | ) | 95.6 | % | |||||||||||||
Other Income (Expense) - Net | 2,353 | 925 | - | % | 4,055 | 1,413 | - | % | ||||||||||||||||
Income Before Income Taxes | 6,780 | 6,070 | 11.7 | % | 12,921 | 11,448 | 12.9 | % | ||||||||||||||||
Income Tax Expense | 1,532 | 2,056 | -25.5 | % | 2,914 | 3,860 | -24.5 | % | ||||||||||||||||
Net Income | 5,248 | 4,014 | 30.7 | % | 10,007 | 7,588 | 31.9 | % | ||||||||||||||||
Less: Net Income Attributable to Noncontrolling Interest | (116 | ) | (99 | ) | -17.2 | % | (213 | ) | (204 | ) | -4.4 | % | ||||||||||||
Net Income Attributable to AT&T | $ | 5,132 | 3,915 | 31.1 | % | 9,794 | 7,384 | 32.6 | % | |||||||||||||||
| ||||||||||||||||||||||||
Basic Earnings Per Share Attributable to AT&T | $ | 0.81 | 0.63 | 28.6 | % | 1.56 | 1.19 | 31.1 | % | |||||||||||||||
Weighted Average Common Shares Outstanding (000,000) | 6,351 | 6,165 | 3.0 | % | 6,257 | 6,166 | 1.5 | % | ||||||||||||||||
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Diluted Earnings Per Share Attributable to AT&T | $ | 0.81 | 0.63 | 28.6 | % | 1.56 | 1.19 | 31.1 | % | |||||||||||||||
Weighted Average Common Shares Outstanding with Dilution (000,000) | 6,374 | 6,184 | 3.1 | % | 6,277 | 6,185 | 1.5 | % | ||||||||||||||||
| AT&T Inc. | ||||||||
Financial Data | ||||||||
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Consolidated Balance Sheets | ||||||||
Dollars in millions | ||||||||
Unaudited | Jun. 30, | Dec. 31, | ||||||
| 2018 | 2017 | ||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 13,523 | $ | 50,498 | ||||
Accounts receivable - net of allowances for doubtful accounts of $804 and $663 | 25,492 | 16,522 | ||||||
Prepaid expenses | 1,966 | 1,369 | ||||||
Other current assets | 14,305 | 10,757 | ||||||
Total current assets | 55,286 | 79,146 | ||||||
Noncurrent Inventories and Theatrical Film and Television Production Costs | 5,849 | - | ||||||
Property, Plant and Equipment - Net | 129,556 | 125,222 | ||||||
Goodwill | 143,499 | 105,449 | ||||||
Licenses | 96,802 | 96,136 | ||||||
Trademarks and Trade Names - Net | 24,440 | 7,021 | ||||||
Distribution Networks | 17,403 | - | ||||||
Other Intangible Assets - Net | 30,800 | 11,119 | ||||||
Investments in and Advances to Equity Affiliates | 8,007 | 1,560 | ||||||
Other Assets | 23,734 | 18,444 | ||||||
Total Assets | $ | 535,376 | $ | 444,097 | ||||
| ||||||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities | ||||||||
Debt maturing within one year | $ | 21,672 | $ | 38,374 | ||||
Accounts payable and accrued liabilities | 35,488 | 34,470 | ||||||
Advanced billing and customer deposits | 5,914 | 4,213 | ||||||
Accrued taxes | 1,889 | 1,262 | ||||||
Dividends payable | 3,630 | 3,070 | ||||||
Total current liabilities | 68,593 | 81,389 | ||||||
Long-Term Debt | 168,495 | 125,972 | ||||||
Deferred Credits and Other Noncurrent Liabilities | ||||||||
Deferred income taxes | 59,665 | 43,207 | ||||||
Postemployment benefit obligation | 29,476 | 31,775 | ||||||
Other noncurrent liabilities | 25,017 | 19,747 | ||||||
Total deferred credits and other noncurrent liabilities | 114,158 | 94,729 | ||||||
Stockholders' Equity | ||||||||
Common stock | 7,621 | 6,495 | ||||||
Additional paid-in capital | 125,960 | 89,563 | ||||||
Retained earnings | 56,555 | 50,500 | ||||||
Treasury stock | (12,872 | ) | (12,714 | ) | ||||
Accumulated other comprehensive income | 5,716 | 7,017 | ||||||
Noncontrolling interest | 1,150 | 1,146 | ||||||
Total stockholders' equity | 184,130 | 142,007 | ||||||
Total Liabilities and Stockholders' Equity | $ | 535,376 | $ | 444,097 | ||||
| ||||||||
| AT&T Inc. | ||||||||
Financial Data | ||||||||
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| ||||||||
Consolidated Statements of Cash Flows | ||||||||
Dollars in millions | Six Months Ended | |||||||
Unaudited | June 30, | |||||||
| 2018 | 2017 As Adjusted | ||||||
Operating Activities | ||||||||
Net income | $ | 10,007 | $ | 7,588 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 12,372 | 12,274 | ||||||
Amortization of film and television costs | 168 | - | ||||||
Undistributed earnings from investments in equity affiliates | 235 | 167 | ||||||
Provision for uncollectible accounts | 808 | 795 | ||||||
Deferred income tax expense | 2,032 | 964 | ||||||
Net (gain) loss from sale of investments, net of impairments | (29 | ) | 12 | |||||
Actuarial (gain) loss on pension and postretirement benefits | (2,726 | ) | (259 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 233 | 119 | ||||||
Other current assets, inventories and theatrical file and television production costs | 1,039 | 470 | ||||||
Accounts payable and other accrued liabilities | (3,890 | ) | (2,761 | ) | ||||
Equipment installment receivables and related sales | 490 | 525 | ||||||
Deferred customer contract acquisition and fulfillment costs | (1,725 | ) | (796 | ) | ||||
Retirement benefit funding | (280 | ) | (280 | ) | ||||
Other - net | 442 | (1,148 | ) | |||||
Total adjustments | 9,169 | 10,082 | ||||||
Net Cash Provided by Operating Activities | 19,176 | 17,670 | ||||||
| ||||||||
Investing Activities | ||||||||
Capital expenditures: | ||||||||
Purchase of property and equipment | (10,959 | ) | (10,750 | ) | ||||
Interest during construction | (267 | ) | (473 | ) | ||||
Acquisitions, net of cash acquired | (40,715 | ) | 1,224 | |||||
Dispositions | 59 | 51 | ||||||
(Purchases) sales of securities, net | (218 | ) | 169 | |||||
Advances to and investments in equity affiliates, net | (1,035 | ) | - | |||||
Cash collections of deferred purchase price | 500 | 382 | ||||||
Net Cash Used in Investing Activities | (52,635 | ) | (9,397 | ) | ||||
| ||||||||
Financing Activities | ||||||||
Net change in short-term borrowings with original maturities of three months or less | 2,992 | (2 | ) | |||||
Issuance of other short-term borrowings | 4,839 | - | ||||||
Issuance of long-term debt | 26,478 | 24,115 | ||||||
Repayment of long-term debt | (30,212 | ) | (6,118 | ) | ||||
Purchase of treasury stock | (564 | ) | (458 | ) | ||||
Issuance of treasury stock | 12 | 24 | ||||||
Dividends paid | (6,144 | ) | (6,021 | ) | ||||
Other | (1,121 | ) | 77 | |||||
Net Cash (Used in) Provided by Financing Activities | (3,720 | ) | 11,617 | |||||
Net (decrease) increase in cash and cash equivalents and restricted cash | (37,179 | ) | 19,890 | |||||
Cash and cash equivalents and restricted cash beginning of year | 50,932 | 5,935 | ||||||
Cash and Cash Equivalents and Restricted Cash End of Period | $ | 13,753 | $ | 25,825 | ||||
| ||||||||
AT&T Inc. | ||||||||||||||||||||||||||
Consolidated Supplementary Data | ||||||||||||||||||||||||||
| Supplementary Financial Data | ||||||||||||||||||||||||||
| Dollars in millions except per share amounts | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Unaudited | June 30, | Percent | June 30, | Percent | ||||||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||||
| Purchase of property and equipment | $ | 5,002 | $ | 4,966 | 0.7 | % | $ | 10,959 | $ | 10,750 | 1.9 | % | ||||||||||||||
| Interest during construction | 106 | 242 | -56.2 | % | 267 | 473 | -43.6 | % | ||||||||||||||||||
| Total Capital Expenditures | $ | 5,108 | $ | 5,208 | -1.9 | % | $ | 11,226 | $ | 11,223 | - | % | ||||||||||||||
| Dividends Declared per Share | $ | 0.50 | $ | 0.49 | 2.0 | % | $ | 1.00 | $ | 0.98 | 2.0 | % | ||||||||||||||
| End of Period Common Shares Outstanding (000,000) | 7,261 | 6,140 | 18.3 | % | ||||||||||||||||||||||
| Debt Ratio | 50.8 | % | 53.3 | % | -250 | BP | ||||||||||||||||||||
| Total Employees | 273,210 | 260,480 | 4.9 | % | ||||||||||||||||||||||
| Supplementary Operating Data | ||||||||||||||||||||||||||
| Subscribers and connections in thousands | ||||||||||||||||||||||||||
| Unaudited | June 30, | Percent | ||||||||||||||||||||||||
| 2018 | 2017 | Change | ||||||||||||||||||||||||
| Wireless Subscribers | ||||||||||||||||||||||||||
| Domestic | 146,889 | 136,102 | 7.9 | % | ||||||||||||||||||||||
| Mexico | 16,398 | 13,082 | 25.3 | % | ||||||||||||||||||||||
| Total Wireless Subscribers | 163,287 | 149,184 | 9.5 | % | ||||||||||||||||||||||
| Total Branded Wireless Subscribers | 109,806 | 104,022 | 5.6 | % | ||||||||||||||||||||||
| Video Connections | ||||||||||||||||||||||||||
| Domestic | 25,473 | 25,200 | 1.1 | % | ||||||||||||||||||||||
| Latin America | 13,713 | 13,622 | 0.7 | % | ||||||||||||||||||||||
| Total Video Connections | 39,186 | 38,822 | 0.9 | % | ||||||||||||||||||||||
| Broadband Connections | ||||||||||||||||||||||||||
| IP | 14,709 | 14,234 | 3.3 | % | ||||||||||||||||||||||
| DSL | 1,063 | 1,452 | -26.8 | % | ||||||||||||||||||||||
| Total Broadband Connections | 15,772 | 15,686 | 0.5 | % | ||||||||||||||||||||||
| Voice Connections | ||||||||||||||||||||||||||
| Network Access Lines | 10,832 | 12,791 | -15.3 | % | ||||||||||||||||||||||
| U-verse VoIP Connections | 5,449 | 5,853 | -6.9 | % | ||||||||||||||||||||||
| Total Retail Voice Connections | 16,281 | 18,644 | -12.7 | % | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, | Percent | June 30, | Percent | |||||||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | |||||||||||||||||||||
| Wireless Net Additions | ||||||||||||||||||||||||||
| Domestic | 3,064 | 2,298 | 33.3 | % | 5,694 | 4,376 | 30.1 | % | ||||||||||||||||||
| Mexico | 756 | 476 | 58.8 | % | 1,299 | 1,109 | 17.1 | % | ||||||||||||||||||
| Total Wireless Net Additions | 3,820 | 2,774 | 37.7 | % | 6,993 | 5,485 | 27.5 | % | ||||||||||||||||||
| Total Branded Wireless Net Additions | 1,280 | 904 | 41.6 | % | 2,138 | 1,639 | 30.4 | % | ||||||||||||||||||
| Video Net Additions | ||||||||||||||||||||||||||
| Domestic | 79 | (199 | ) | - | % | 203 | (360 | ) | - | % | ||||||||||||||||
| Latin America | 140 | (56 | ) | - | % | 125 | 35 | - | % | |||||||||||||||||
| Total Video Net Additions | 219 | (255 | ) | - | % | 328 | (325 | ) | - | % | ||||||||||||||||
| Broadband Net Additions | ||||||||||||||||||||||||||
| IP | 72 | 124 | -41.9 | % | 222 | 370 | -40.0 | % | ||||||||||||||||||
| DSL | (75 | ) | (133 | ) | 43.6 | % | (169 | ) | (289 | ) | 41.5 | % | ||||||||||||||
| Total Broadband Net Additions | (3 | ) | (9 | ) | 66.7 | % | 53 | 81 | -34.6 | % | ||||||||||||||||
CONSUMER MOBILITY | ||||||||||||||||||||||||
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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. | ||||||||||||||||||||||||
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Segment Results | ||||||||||||||||||||||||
Dollars in millions | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
Unaudited | June 30, | Percent | June 30, | Percent | ||||||||||||||||||||
| 2018 |
| 2017 | Change | 2018 |
| 2017 | Change | ||||||||||||||||
Segment Operating Revenues |
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| ||||||||||||||||||||||
Service | $ | 11,853 |
| $ | 12,467 | -4.9 | % | $ | 23,465 |
| $ | 24,932 | -5.9 | % | ||||||||||
Equipment | 3,016 |
| 2,624 | 14.9 | % | 6,390 |
| 4,965 | 28.7 | % | ||||||||||||||
Total Segment Operating Revenues | 14,869 |
| 15,091 | -1.5 | % | 29,855 |
| 29,897 | -0.1 | % | ||||||||||||||
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Segment Operating Expenses |
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Operations and support | 8,085 |
| 8,636 | -6.4 | % | 16,609 |
| 17,196 | -3.4 | % | ||||||||||||||
Depreciation and amortization | 1,806 |
| 1,716 | 5.2 | % | 3,613 |
| 3,432 | 5.3 | % | ||||||||||||||
Total Segment Operating Expenses | 9,891 |
| 10,352 | -4.5 | % | 20,222 |
| 20,628 | -2.0 | % | ||||||||||||||
Segment Operating Income | 4,978 |
| 4,739 | 5.0 | % | 9,633 |
| 9,269 | 3.9 | % | ||||||||||||||
Equity in Net Income of Affiliates | - |
| - | - | % | - |
| - | - | % | ||||||||||||||
Segment Contribution | $ | 4,978 |
| $ | 4,739 | 5.0 | % | $ | 9,633 |
| $ | 9,269 | 3.9 | % | ||||||||||
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Segment Operating Income Margin | 33.5 | % |
| 31.4 | % | 210 | BP | 32.3 | % |
| 31.0 | % | 130 | BP | ||||||||||
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Supplementary Operating Data | ||||||||||||||||||||||||
Subscribers and connections in thousands | ||||||||||||||||||||||||
Unaudited | June 30, | Percent | ||||||||||||||||||||||
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| 2018 |
| 2017 | Change | |||||||||||||||||||
Consumer Mobility Subscribers |
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| ||||||||||||||||||||||
Postpaid |
| 65,326 |
| 65,570 | -0.4 | % | ||||||||||||||||||
Prepaid |
| 15,376 |
| 14,187 | 8.4 | % | ||||||||||||||||||
Branded |
| 80,702 |
| 79,757 | 1.2 | % | ||||||||||||||||||
Reseller |
| 8,484 |
| 10,182 | -16.7 | % | ||||||||||||||||||
Total Consumer Mobility Subscribers |
| 89,186 |
| 89,939 | -0.8 | % | ||||||||||||||||||
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| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | Percent | June 30, | Percent | ||||||||||||||||||||
| 2018 |
| 2017 | Change | 2018 |
| 2017 | Change | ||||||||||||||||
Consumer Mobility Net Additions |
|
| ||||||||||||||||||||||
Postpaid | (49 | ) |
| (28 | ) | -75.0 | % | (113 | ) |
| (310 | ) | 63.5 | % | ||||||||||
Prepaid | 356 |
| 267 | 33.3 | % | 548 |
| 549 | -0.2 | % | ||||||||||||||
Branded | 307 |
| 239 | 28.5 | % | 435 |
| 239 | 82.0 | % | ||||||||||||||
Reseller | (451 | ) |
| (364 | ) | -23.9 | % | (841 | ) |
| (951 | ) | 11.6 | % | ||||||||||
Total Consumer Mobility Net Additions | (144 | ) |
| (125 | ) | -15.2 | % | (406 | ) |
| (712 | ) | 43.0 | % | ||||||||||
| BUSINESS SOLUTIONS |
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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. | ||||||||||||||||||||||||
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Segment Results | ||||||||||||||||||||||||
Dollars in millions | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
Unaudited | June 30, | Percent | June 30, | Percent | ||||||||||||||||||||
| 2018 |
| 2017 | Change | 2018 |
| 2017 | Change | ||||||||||||||||
Segment Operating Revenues |
|
| ||||||||||||||||||||||
Wireless service | $ | 1,829 |
| $ | 2,004 | -8.7 | % | $ | 3,620 |
| $ | 4,007 | -9.7 | % | ||||||||||
Strategic services | 3,039 |
| 2,958 | 2.7 | % | 6,109 |
| 5,862 | 4.2 | % | ||||||||||||||
Legacy voice and data services | 2,723 |
| 3,423 | -20.4 | % | 5,561 |
| 6,971 | -20.2 | % | ||||||||||||||
Other service and equipment | 888 |
| 922 | -3.7 | % | 1,727 |
| 1,800 | -4.1 | % | ||||||||||||||
Wireless equipment | 584 |
| 360 | 62.2 | % | 1,162 |
| 648 | 79.3 | % | ||||||||||||||
Total Segment Operating Revenues | 9,063 |
| 9,667 | -6.2 | % | 18,179 |
| 19,288 | -5.7 | % | ||||||||||||||
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Segment Operating Expenses |
|
| ||||||||||||||||||||||
Operations and support | 5,616 |
| 6,053 | -7.2 | % | 11,210 |
| 12,051 | -7.0 | % | ||||||||||||||
Depreciation and amortization | 1,487 |
| 1,483 | 0.3 | % | 2,945 |
| 2,943 | 0.1 | % | ||||||||||||||
Total Segment Operating Expenses | 7,103 |
| 7,536 | -5.7 | % | 14,155 |
| 14,994 | -5.6 | % | ||||||||||||||
Segment Operating Income | 1,960 |
| 2,131 | -8.0 | % | 4,024 |
| 4,294 | -6.3 | % | ||||||||||||||
Equity in Net Income (Loss) of Affiliates | 1 |
| - | - | % | - |
| - | - | % | ||||||||||||||
Segment Contribution | $ | 1,961 |
| $ | 2,131 | -8.0 | % | $ | 4,024 |
| $ | 4,294 | -6.3 | % | ||||||||||
|
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Segment Operating Income Margin | 21.6 | % |
| 22.0 | % | -40 | BP | 22.1 | % |
| 22.3 | % | -20 | BP | ||||||||||
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Supplementary Operating Data | ||||||||||||||||||||||||
Subscribers and connections in thousands | ||||||||||||||||||||||||
Unaudited | June 30, | Percent | ||||||||||||||||||||||
|
| 2018 |
| 2017 | Change | |||||||||||||||||||
Business Solutions Wireless Subscribers |
|
| ||||||||||||||||||||||
Postpaid |
| 12,046 |
| 11,432 | 5.4 | % | ||||||||||||||||||
Prepaid |
| 841 |
| - | - | % | ||||||||||||||||||
Branded |
| 12,887 |
| 11,432 | 12.7 | % | ||||||||||||||||||
Reseller |
| 98 |
| 73 | 34.2 | % | ||||||||||||||||||
Connected Devices |
| 44,718 |
| 34,658 | 29.0 | % | ||||||||||||||||||
Total Business Mobility Subscribers |
| 57,703 |
| 46,163 | 25.0 | % | ||||||||||||||||||
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Business Solutions IP Broadband Connections | 1,017 |
| 992 | 2.5 | % | |||||||||||||||||||
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| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | Percent | June 30, | Percent | ||||||||||||||||||||
| 2018 |
| 2017 | Change | 2018 |
| 2017 | Change | ||||||||||||||||
Business Solutions Wireless Net Additions |
|
| ||||||||||||||||||||||
Postpaid | 122 |
| 171 | -28.7 | % | 235 |
| 259 | -9.3 | % | ||||||||||||||
Prepaid | 97 |
| - | - | % | 146 |
| - | - | % | ||||||||||||||
Branded | 219 |
| 171 | 28.1 | % | 381 |
| 259 | 47.1 | % | ||||||||||||||
Reseller | 7 |
| (4 | ) | - | % | 9 |
| 1 | - | % | |||||||||||||
Connected Devices | 2,982 |
| 2,256 | 32.2 | % | 5,710 |
| 4,828 | 18.3 | % | ||||||||||||||
Total Business Solutions Wireless Net Additions | 3,208 |
| 2,423 | 32.4 | % | 6,100 |
| 5,088 | 19.9 | % | ||||||||||||||
|
|
| ||||||||||||||||||||||
Business Solutions IP Broadband Net Additions | (4 | ) |
| 12 | - | % | (8 | ) |
| 16 | - | % | ||||||||||||
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 | Six Months Ended | ||||||||||||||||||||||
Unaudited | June 30, | Percent | June 30, | Percent | ||||||||||||||||||||
| 2018 |
| 2017 | Change | 2018 |
| 2017 | Change | ||||||||||||||||
Segment Operating Revenues |
|
| ||||||||||||||||||||||
Video entertainment | $ | 8,331 |
| $ | 9,153 | -9.0 | % | $ | 16,690 |
| $ | 18,173 | -8.2 | % | ||||||||||
High-speed internet | 1,981 |
| 1,927 | 2.8 | % | 3,859 |
| 3,868 | -0.2 | % | ||||||||||||||
Legacy voice and data services | 785 |
| 981 | -20.0 | % | 1,604 |
| 2,012 | -20.3 | % | ||||||||||||||
Other service and equipment | 553 |
| 600 | -7.8 | % | 1,074 |
| 1,209 | -11.2 | % | ||||||||||||||
Total Segment Operating Revenues | 11,650 |
| 12,661 | -8.0 | % | 23,227 |
| 25,262 | -8.1 | % | ||||||||||||||
|
|
| ||||||||||||||||||||||
Segment Operating Expenses |
|
| ||||||||||||||||||||||
Operations and support | 8,852 |
| 9,561 | -7.4 | % | 17,791 |
| 19,166 | -7.2 | % | ||||||||||||||
Depreciation and amortization | 1,346 |
| 1,458 | -7.7 | % | 2,658 |
| 2,878 | -7.6 | % | ||||||||||||||
Total Segment Operating Expenses | 10,198 |
| 11,019 | -7.5 | % | 20,449 |
| 22,044 | -7.2 | % | ||||||||||||||
Segment Operating Income | 1,452 |
| 1,642 | -11.6 | % | 2,778 |
| 3,218 | -13.7 | % | ||||||||||||||
Equity in Net Income (Loss) of Affiliates | (20 | ) |
| (12 | ) | -66.7 | % | (11 | ) |
| (18 | ) | 38.9 | % | ||||||||||
Segment Contribution | $ | 1,432 |
| $ | 1,630 | -12.1 | % | $ | 2,767 |
| $ | 3,200 | -13.5 | % | ||||||||||
|
|
| ||||||||||||||||||||||
Segment Operating Income Margin | 12.5 | % |
| 13.0 | % | -50 | BP | 12.0 | % |
| 12.7 | % | -70 | BP | ||||||||||
|
|
| ||||||||||||||||||||||
|
|
| ||||||||||||||||||||||
Supplementary Operating Data | ||||||||||||||||||||||||
Subscribers and connections in thousands | ||||||||||||||||||||||||
Unaudited | June 30, | Percent | ||||||||||||||||||||||
|
| 2018 |
| 2017 | Change | |||||||||||||||||||
Video Connections |
|
| ||||||||||||||||||||||
Satellite |
| 19,984 |
| 20,856 | -4.2 | % | ||||||||||||||||||
U-verse |
| 3,656 |
| 3,825 | -4.4 | % | ||||||||||||||||||
DIRECTV NOW |
| 1,809 |
| 491 | - | % | ||||||||||||||||||
Total Video Connections |
| 25,449 |
| 25,172 | 1.1 | % | ||||||||||||||||||
|
|
| ||||||||||||||||||||||
Broadband Connections |
|
| ||||||||||||||||||||||
IP |
| 13,692 |
| 13,242 | 3.4 | % | ||||||||||||||||||
DSL |
| 763 |
| 1,060 | -28.0 | % | ||||||||||||||||||
Total Broadband Connections |
| 14,455 |
| 14,302 | 1.1 | % | ||||||||||||||||||
|
|
| ||||||||||||||||||||||
Voice Connections |
|
| ||||||||||||||||||||||
Retail Consumer Switched Access Lines |
| 4,333 |
| 5,257 | -17.6 | % | ||||||||||||||||||
U-verse Consumer VoIP Connections |
| 4,950 |
| 5,439 | -9.0 | % | ||||||||||||||||||
Total Retail Consumer Voice Connections |
| 9,283 |
| 10,696 | -13.2 | % | ||||||||||||||||||
|
|
| ||||||||||||||||||||||
|
|
| ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | Percent | June 30, | Percent | ||||||||||||||||||||
| 2018 |
| 2017 | Change | 2018 |
| 2017 | Change | ||||||||||||||||
Video Net Additions1 |
|
| ||||||||||||||||||||||
Satellite | (286 | ) |
| (156 | ) | -83.3 | % | (474 | ) |
| (156 | ) | - | % | ||||||||||
U-verse | 24 |
| (195 | ) | - | % | 25 |
| (428 | ) | - | % | ||||||||||||
DIRECTV NOW | 342 |
| 152 | - | % | 654 |
| 224 | - | % | ||||||||||||||
Total Video Net Additions | 80 |
| (199 | ) | - | % | 205 |
| (360 | ) | - | % | ||||||||||||
|
|
| ||||||||||||||||||||||
Broadband Net Additions |
|
| ||||||||||||||||||||||
IP | 76 |
| 112 | -32.1 | % | 230 |
| 354 | -35.0 | % | ||||||||||||||
DSL | (53 | ) |
| (104 | ) | 49.0 | % | (125 | ) |
| (231 | ) | 45.9 | % | ||||||||||
Total Broadband Net Additions | 23 |
| 8 | - | % | 105 |
| 123 | -14.6 | % | ||||||||||||||
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 | Six Months Ended | |||||||||||||||||||||||
Unaudited | June 30, | Percent | June 30, | Percent | |||||||||||||||||||||
| 2018 |
| 2017 | Change | 2018 |
| 2017 | Change | |||||||||||||||||
Segment Operating Revenues |
|
| |||||||||||||||||||||||
Video entertainment | $ | 1,254 |
| $ | 1,361 | -7.9 | % | $ | 2,608 |
| $ | 2,702 | -3.5 | % | |||||||||||
Wireless service | 417 |
| 535 | -22.1 | % | 821 |
| 1,010 | -18.7 | % | |||||||||||||||
Wireless equipment | 280 |
| 130 | 115.4 | % | 547 |
| 243 | 125.1 | % | |||||||||||||||
Total Segment Operating Revenues | 1,951 |
| 2,026 | -3.7 | % | 3,976 |
| 3,955 | 0.5 | % | |||||||||||||||
|
|
| |||||||||||||||||||||||
Segment Operating Expenses |
|
| |||||||||||||||||||||||
Operations and support | 1,803 |
| 1,772 | 1.7 | % | 3,607 |
| 3,531 | 2.2 | % | |||||||||||||||
Depreciation and amortization | 313 |
| 311 | 0.6 | % | 645 |
| 601 | 7.3 | % | |||||||||||||||
Total Segment Operating Expenses | 2,116 |
| 2,083 | 1.6 | % | 4,252 |
| 4,132 | 2.9 | % | |||||||||||||||
Segment Operating Income (Loss) | (165 | ) |
| (57 | ) | - | % | (276 | ) |
| (177 | ) | -55.9 | % | |||||||||||
Equity in Net Income of Affiliates | 15 |
| 25 | -40.0 | % | 15 |
| 45 | -66.7 | % | |||||||||||||||
Segment Contribution | $ | (150 | ) |
| $ | (32 | ) | - | % | $ | (261 | ) |
| $ | (132 | ) | -97.7 | % | |||||||
|
|
| |||||||||||||||||||||||
Segment Operating Income Margin | (8.5 | ) % |
| (2.8 | ) % | -570 | BP | (6.9 | ) % |
| (4.5 | ) % | -240 | BP | |||||||||||
|
|
| |||||||||||||||||||||||
|
|
| |||||||||||||||||||||||
Supplementary Operating Data | |||||||||||||||||||||||||
Subscribers and connections in thousands | |||||||||||||||||||||||||
Unaudited | June 30, | Percent | |||||||||||||||||||||||
|
| 2018 |
| 2017 | Change | ||||||||||||||||||||
Mexican Wireless Subscribers |
|
| |||||||||||||||||||||||
Postpaid |
| 5,749 |
| 5,187 | 10.8 | % | |||||||||||||||||||
Prepaid |
| 10,468 |
| 7,646 | 36.9 | % | |||||||||||||||||||
Branded |
| 16,217 |
| 12,833 | 26.4 | % | |||||||||||||||||||
Reseller |
| 181 |
| 249 | -27.3 | % | |||||||||||||||||||
Total Mexican Wireless Subscribers |
| 16,398 |
| 13,082 | 25.3 | % | |||||||||||||||||||
|
|
| |||||||||||||||||||||||
Latin America Satellite Subscribers |
|
| |||||||||||||||||||||||
Total Latin America Satellite Subscribers |
| 13,713 |
| 13,622 | 0.7 | % | |||||||||||||||||||
|
|
| |||||||||||||||||||||||
|
|
| |||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | Percent | June 30, | Percent | |||||||||||||||||||||
| 2018 |
| 2017 | Change | 2018 |
| 2017 | Change | |||||||||||||||||
Mexican Wireless Net Additions |
|
| |||||||||||||||||||||||
Postpaid | 142 |
| 92 | 54.3 | % | 251 |
| 222 | 13.1 | % | |||||||||||||||
Prepaid | 611 |
| 402 | 52.0 | % | 1,070 |
| 919 | 16.4 | % | |||||||||||||||
Branded | 753 |
| 494 | 52.4 | % | 1,321 |
| 1,141 | 15.8 | % | |||||||||||||||
Reseller | 3 |
| (18 | ) | - | % | (22 | ) |
| (32 | ) | 31.3 | % | ||||||||||||
Total Mexican Wireless Net Additions | 756 |
| 476 | 58.8 | % | 1,299 |
| 1,109 | 17.1 | % | |||||||||||||||
|
|
| |||||||||||||||||||||||
Latin America Satellite Net Additions |
|
| |||||||||||||||||||||||
Total Latin America Satellite Net Additions | 140 |
| (56 | ) | - | % | 125 |
| 35 | - | % | ||||||||||||||
Warner Media | |||||||||||||||||||||||||
|
|
| |||||||||||||||||||||||
The Warner Media segment consists of the results of Time Warner Inc. after we completed our acquisition June 14, 2018. Our Warner Media segment operating income margin was 35.4% for the 16-day period ended June 30, 2018. Consistent with our past practice, many of the adjustment from the application of purchase accounting rules required under GAAP have not been allocated to the business unit, instead they are reported as acquisition-related items. The Warner Media segment consists of the following businesses: Turner, consisting principally of cable networks and digital media properties; Home Box Office (HBO), consisting principally of premium pay television and OTT services; and Warner Bros., consisting principally of television, feature film, home video and game production and distribution. | |||||||||||||||||||||||||
|
|
| |||||||||||||||||||||||
Segment Results | |||||||||||||||||||||||||
Dollars in millions | Three Months Ended | Six Months Ended | |||||||||||||||||||||||
Unaudited | June 30, | Percent | June 30, | Percent | |||||||||||||||||||||
| 2018 |
| 2017 | Change | 2018 |
| 2017 | Change | |||||||||||||||||
Segment Operating Revenues |
|
| |||||||||||||||||||||||
Content | $ | 487 |
| $ | - | - | % | $ | 487 |
| $ | - | - | % | |||||||||||
Subscription | 591 |
| - | - | % | 591 |
| - | - | % | |||||||||||||||
Advertising | 208 |
| 208 |
| |||||||||||||||||||||
Other | 51 |
| - | - | % | 51 |
| - | - | % | |||||||||||||||
Intrasegment eliminations | (62 | ) |
| (62 | ) |
| |||||||||||||||||||
Total Segment Operating Revenues | 1,275 |
| - | - | % | 1,275 |
| - | - | % | |||||||||||||||
|
|
| |||||||||||||||||||||||
Segment Operating Expenses |
|
| |||||||||||||||||||||||
Operations and support | 794 |
| - | - | % | 794 |
| - | - | % | |||||||||||||||
Depreciation and amortization | 30 |
| - | - | % | 30 |
| - | - | % | |||||||||||||||
Total Segment Operating Expenses | 824 |
| - | �� | - | % | 824 |
| - | - | % | ||||||||||||||
Segment Operating Income (Loss) | 451 |
| - | - | % | 451 |
| - | - | % | |||||||||||||||
Equity in Net Income of Affiliates | (6 | ) |
| - | - | % | (6 | ) |
| - | - | % | |||||||||||||
Segment Contribution | $ | 445 |
| $ | - | - | % | $ | 445 |
| $ | - | - | % | |||||||||||
Segment Operating Income Margin | 35.4 | % |
| - | % | - | BP | 35.4 | % |
| - | % | - | BP | |||||||||||
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 |
| Six Months Ended |
| ||||||||||||||||||
Unaudited | June 30, | Percent | June 30, | Percent | ||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
Operating Revenues |
|
| ||||||||||||||||||||
Service | $ | 13,682 | $ | 14,471 | -5.5 | % | $ | 27,085 | $ | 28,939 | -6.4 | % | ||||||||||
Equipment | 3,600 | 2,984 | 20.6 | % | 7,552 | 5,613 | 34.5 | % | ||||||||||||||
Total Operating Revenues | 17,282 | 17,455 | -1.0 | % | 34,637 | 34,552 | 0.2 | % | ||||||||||||||
|
|
| ||||||||||||||||||||
Operating Expenses |
|
| ||||||||||||||||||||
Operations and support | 9,663 | 10,091 | -4.2 | % | 19,765 | 19,976 | -1.1 | % | ||||||||||||||
Depreciation and amortization | 2,113 | 1,988 | 6.3 | % | 4,208 | 3,980 | 5.7 | % | ||||||||||||||
Total Operating Expenses | 11,776 | 12,079 | -2.5 | % | 23,973 | 23,956 | 0.1 | % | ||||||||||||||
Operating Income | $ | 5,506 | $ | 5,376 | 2.4 | % | $ | 10,664 | $ | 10,596 | 0.6 | % | ||||||||||
|
|
| ||||||||||||||||||||
Operating Income Margin | 31.9 | % | 30.8 | % | 110 | BP | 30.8 | % | 30.7 | % | 10 | BP | ||||||||||
|
|
| ||||||||||||||||||||
|
|
| ||||||||||||||||||||
Supplementary Operating Data | ||||||||||||||||||||||
Subscribers and connections in thousands |
|
| ||||||||||||||||||||
Unaudited |
| June 30, | Percent | |||||||||||||||||||
|
| 2018 | 2017 | Change | ||||||||||||||||||
AT&T Mobility Subscribers |
|
| ||||||||||||||||||||
Postpaid |
| 77,372 | 77,002 | 0.5 | % | |||||||||||||||||
Prepaid |
| 16,217 | 14,187 | 14.3 | % | |||||||||||||||||
Branded |
| 93,589 | 91,189 | 2.6 | % | |||||||||||||||||
Reseller |
| 8,582 | 10,255 | -16.3 | % | |||||||||||||||||
Connected Devices |
| 44,718 | 34,658 | 29.0 | % | |||||||||||||||||
Total AT&T Mobility Subscribers |
| 146,889 | 136,102 | 7.9 | % | |||||||||||||||||
|
|
| ||||||||||||||||||||
Domestic Licensed POPs (000,000) |
| 329 | 326 | 0.9 | % | |||||||||||||||||
|
|
| ||||||||||||||||||||
|
|
| ||||||||||||||||||||
| Three Months Ended |
| Six Months Ended |
| ||||||||||||||||||
| June 30, | Percent | June 30, | Percent | ||||||||||||||||||
| 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
AT&T Mobility Net Additions |
|
| ||||||||||||||||||||
Postpaid | 73 | 143 | -49.0 | % | 122 | (51 | ) | - | % | |||||||||||||
Prepaid | 453 | 267 | 69.7 | % | 694 | 549 | 26.4 | % | ||||||||||||||
Branded | 526 | 410 | 28.3 | % | 816 | 498 | 63.9 | % | ||||||||||||||
Reseller | (444 | ) | (368 | ) | -20.7 | % | (832 | ) | (950 | ) | 12.4 | % | ||||||||||
Connected Devices | 2,982 | 2,256 | 32.2 | % | 5,710 | 4,828 | 18.3 | % | ||||||||||||||
Total AT&T Mobility Net Additions | 3,064 | 2,298 | 33.3 | % | 5,694 | 4,376 | 30.1 | % | ||||||||||||||
M&A Activity, Partitioned Customers and Other Adjustments | (7 | ) | - | - | % | (6 | ) | (2,723 | ) | 99.8 | % | |||||||||||
|
|
| ||||||||||||||||||||
Branded Churn | 1.50 | % | 1.57 | % | -7 | BP | 1.57 | % | 1.64 | % | -7 | BP | ||||||||||
Postpaid Churn | 1.02 | % | 1.01 | % | 1 | BP | 1.04 | % | 1.06 | % | -2 | BP | ||||||||||
Postpaid Phone Only Churn | 0.82 | % | 0.79 | % | 3 | BP | 0.83 | % | 0.84 | % | -1 | BP | ||||||||||
|
|
| ||||||||||||||||||||
SUPPLEMENTAL SEGMENT RECONCILIATION | ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||
Dollars in millions | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
June 30, 2018 | ||||||||||||||||||||||||||||
| Revenues | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | |||||||||||||||||||||
Consumer Mobility | $ | 14,869 | $ | 8,085 | $ | 6,784 | $ | 1,806 | $ | 4,978 | $ | - | $ | 4,978 | ||||||||||||||
Business Solutions | 9,063 | 5,616 | 3,447 | 1,487 | 1,960 | 1 | 1,961 | |||||||||||||||||||||
Entertainment Group | 11,650 | 8,852 | 2,798 | 1,346 | 1,452 | (20 | ) | 1,432 | ||||||||||||||||||||
International | 1,951 | 1,803 | 148 | 313 | (165 | ) | 15 | (150 | ) | |||||||||||||||||||
WarnerMedia | 1,275 | 794 | 481 | 30 | 451 | (6 | ) | 445 | ||||||||||||||||||||
Segment Total | 38,808 | 25,150 | 13,658 | 4,982 | 8,676 | $ | (10 | ) | $ | 8,666 | ||||||||||||||||||
Corporate and Other | 319 | 660 | (341 | ) | 118 | (459 | ) | |||||||||||||||||||||
Acquisition-related items | - | 321 | (321 | ) | 1,278 | (1,599 | ) | |||||||||||||||||||||
Certain Significant items | - | 152 | (152 | ) | - | (152 | ) | |||||||||||||||||||||
Eliminations | (141 | ) | (141 | ) | - | - | - | |||||||||||||||||||||
AT&T Inc. | $ | 38,986 | $ | 26,142 | $ | 12,844 | $ | 6,378 | $ | 6,466 | ||||||||||||||||||
| ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
June 30, 2017 | ||||||||||||||||||||||||||||
| Revenues | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | |||||||||||||||||||||
Consumer Mobility | $ | 15,091 | $ | 8,636 | $ | 6,455 | $ | 1,716 | $ | 4,739 | $ | - | $ | 4,739 | ||||||||||||||
Business Solutions | 9,667 | 6,053 | 3,614 | 1,483 | 2,131 | - | 2,131 | |||||||||||||||||||||
Entertainment Group | 12,661 | 9,561 | 3,100 | 1,458 | 1,642 | (12 | ) | 1,630 | ||||||||||||||||||||
International | 2,026 | 1,772 | 254 | 311 | (57 | ) | 25 | (32 | ) | |||||||||||||||||||
Segment Total | 39,445 | 26,022 | 13,423 | 4,968 | 8,455 | $ | 13 | $ | 8,468 | |||||||||||||||||||
Corporate and Other | 392 | 766 | (374 | ) | 9 | (383 | ) | |||||||||||||||||||||
Acquisition-related items | - | 281 | (281 | ) | 1,170 | (1,451 | ) | |||||||||||||||||||||
Certain Significant items | - | 95 | (95 | ) | - | (95 | ) | |||||||||||||||||||||
AT&T Inc. | $ | 39,837 | $ | 27,164 | $ | 12,673 | $ | 6,147 | $ | 6,526 | ||||||||||||||||||
| ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||||||||||
Dollars in millions | ||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
June 30, 2018 | ||||||||||||||||||||||||||||
| Revenues | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | |||||||||||||||||||||
Consumer Mobility | $ | 29,855 | $ | 16,609 | $ | 13,246 | $ | 3,613 | $ | 9,633 | $ | - | $ | 9,633 | ||||||||||||||
Business Solutions | 18,179 | 11,210 | 6,969 | 2,945 | 4,024 | - | 4,024 | |||||||||||||||||||||
Entertainment Group | 23,227 | 17,791 | 5,436 | 2,658 | 2,778 | (11 | ) | 2,767 | ||||||||||||||||||||
International | 3,976 | 3,607 | 369 | 645 | (276 | ) | 15 | (261 | ) | |||||||||||||||||||
WarnerMedia | 1,275 | 794 | 481 | 30 | 451 | (6 | ) | 445 | ||||||||||||||||||||
Segment Total | 76,512 | 50,011 | 26,501 | 9,891 | 16,610 | $ | (2 | ) | $ | 16,608 | ||||||||||||||||||
Corporate and Other | 653 | 1,395 | (742 | ) | 141 | (883 | ) | |||||||||||||||||||||
Acquisition-related items | - | 388 | (388 | ) | 2,340 | (2,728 | ) | |||||||||||||||||||||
Certain Significant items | - | 332 | (332 | ) | - | (332 | ) | |||||||||||||||||||||
Eliminations | (141 | ) | (141 | ) | - | - | - | |||||||||||||||||||||
AT&T Inc. | $ | 77,024 | $ | 51,985 | $ | 25,039 | $ | 12,372 | $ | 12,667 | ||||||||||||||||||
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June 30, 2017 | ||||||||||||||||||||||||||||
| Revenues | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | |||||||||||||||||||||
Consumer Mobility | $ | 29,897 | $ | 17,196 | $ | 12,701 | $ | 3,432 | $ | 9,269 | $ | - | $ | 9,269 | ||||||||||||||
Business Solutions | 19,288 | 12,051 | 7,237 | 2,943 | 4,294 | - | 4,294 | |||||||||||||||||||||
Entertainment Group | 25,262 | 19,166 | 6,096 | 2,878 | 3,218 | (18 | ) | 3,200 | ||||||||||||||||||||
International | 3,955 | 3,531 | 424 | 601 | (177 | ) | 45 | (132 | ) | |||||||||||||||||||
Segment Total | 78,402 | 51,944 | 26,458 | 9,854 | 16,604 | $ | 27 | $ | 16,631 | |||||||||||||||||||
Corporate and Other | 800 | 1,637 | (837 | ) | 48 | (885 | ) | |||||||||||||||||||||
Acquisition-related items | - | 488 | (488 | ) | 2,372 | (2,860 | ) | |||||||||||||||||||||
Certain Significant items | - | (23 | ) | 23 | - | 23 | ||||||||||||||||||||||
AT&T Inc. | $ | 79,202 | $ | 54,046 | $ | 25,156 | $ | 12,274 | $ | 12,882 | ||||||||||||||||||
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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 and other accounting changes. | |||||||||||||||||||
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SUPPLEMENTAL INCOME STATEMENT | |||||||||||||||||||
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Supplemental Consolidated Statements of Income | |||||||||||||||||||
Dollars in millions except per share amounts | Three Months Ended | ||||||||||||||||||
Unaudited | June 30, | ||||||||||||||||||
| 2018 | Accounting Impact | Historical 2018 | 2017 | Percent Change | ||||||||||||||
Operating Revenues | |||||||||||||||||||
Service | $ | 33,773 | $ | (1,390 | ) | $ | 35,163 | $ | 36,538 | -3.8 | % | ||||||||
Equipment | 4,080 | 469 | 3,611 | 3,299 | 9.5 | % | |||||||||||||
Media | 1,133 | (2 | ) | 1,135 | - | - | % | ||||||||||||
Total Operating Revenues | 38,986 | (923 | ) | 39,909 | 39,837 | 0.2 | % | ||||||||||||
| |||||||||||||||||||
Operating Expenses | |||||||||||||||||||
Cost of revenues | |||||||||||||||||||
Equipment | 4,377 | - | 4,377 | 4,138 | 5.8 | % | |||||||||||||
Broadcast, programming and operations | 5,449 | - | 5,449 | 4,898 | 11.2 | % | |||||||||||||
Other cost of revenues (exclusive of depreciation and amortization shown separately below) | 7,632 | (903 | ) | 8,535 | 9,569 | -10.8 | % | ||||||||||||
Selling, general and administrative | 8,684 | (583 | ) | 9,267 | 8,559 | 8.3 | % | ||||||||||||
Depreciation and amortization | 6,378 | - | 6,378 | 6,147 | 3.8 | % | |||||||||||||
Total Operating Expenses | 32,520 | (1,486 | ) | 34,006 | 33,311 | 2.1 | % | ||||||||||||
Operating Income | 6,466 | 563 | 5,903 | 6,526 | -9.5 | % | |||||||||||||
Interest Expense | (2,023 | ) | - | (2,023 | ) | (1,395 | ) | 45.0 | % | ||||||||||
Equity in Net Income (Loss) of Affiliates | (16 | ) | - | (16 | ) | 14 | - | % | |||||||||||
Other Income (Expense) - Net | 2,353 | - | 2,353 | 925 | - | % | |||||||||||||
Income Before Income Taxes | 6,780 | 563 | 6,217 | 6,070 | 2.4 | % | |||||||||||||
Income Tax Expense | 1,532 | 138 | 1,394 | 2,056 | -32.2 | % | |||||||||||||
Net Income | 5,248 | 425 | 4,823 | 4,014 | 20.2 | % | |||||||||||||
Less: Net Income Attributable to Noncontrolling Interest | (116 | ) | (6 | ) | (110 | ) | (99 | ) | -11.1 | % | |||||||||
Net Income Attributable to AT&T | $ | 5,132 | $ | 419 | $ | 4,713 | $ | 3,915 | 20.4 | % | |||||||||
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Basic Earnings Per Share Attributable to AT&T | $ | 0.81 | $ | 0.07 | $ | 0.74 | $ | 0.63 | 17.5 | % | |||||||||
Weighted Average Common Shares Outstanding (000,000) | 6,351 | - | 6,351 | 6,165 | 3.0 | % | |||||||||||||
| |||||||||||||||||||
Diluted Earnings Per Share Attributable to AT&T | $ | 0.81 | $ | 0.07 | $ | 0.74 | $ | 0.63 | 17.5 | % | |||||||||
Weighted Average Common Shares Outstanding with Dilution (000,000) | 6,374 | - | 6,374 | 6,184 | 3.1 | % | |||||||||||||
SUPPLEMENTAL CONSUMER MOBILITY | |||||||||||||||||||
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| ||||||||||||||||||
Supplemental Segment Results | |||||||||||||||||||
Dollars in millions | Three Months Ended |
| |||||||||||||||||
Unaudited | June 30, | ||||||||||||||||||
| 2018 | Accounting Impact | Historical 2018 | 2017 | Percent Change | ||||||||||||||
Segment Operating Revenues |
| ||||||||||||||||||
Service | $ | 11,853 | $ | (603 | ) | $ | 12,456 | $ | 12,467 | -0.1 | % | ||||||||
Equipment | 3,016 | 291 | 2,725 | 2,624 | 3.8 | % | |||||||||||||
Total Segment Operating Revenues | 14,869 | (312 | ) | 15,181 | 15,091 | 0.6 | % | ||||||||||||
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Segment Operating Expenses |
| ||||||||||||||||||
Operations and support | 8,085 | (571 | ) | 8,656 | 8,636 | 0.2 | % | ||||||||||||
EBITDA | 6,784 | 259 | 6,525 | 6,455 | 1.1 | % | |||||||||||||
Depreciation and amortization | 1,806 | - | 1,806 | 1,716 | 5.2 | % | |||||||||||||
Total Segment Operating Expenses | 9,891 | (571 | ) | 10,462 | 10,352 | 1.1 | % | ||||||||||||
Segment Operating Income | 4,978 | 259 | 4,719 | 4,739 | -0.4 | % | |||||||||||||
Equity in Net Income of Affiliates | - | - | - | - | - | % | |||||||||||||
Segment Contribution | $ | 4,978 | $ | 259 | $ | 4,719 | $ | 4,739 | -0.4 | % | |||||||||
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Operating Income Margin | 33.5 | % | 31.1 | % | 31.4 | % | -30 | BP | |||||||||||
EBITDA Margin | 45.6 | % | 43.0 | % | 42.8 | % | 20 | BP | |||||||||||
EBITDA Service Margin | 57.2 | % | 52.4 | % | 51.8 | % | 60 | BP | |||||||||||
SUPPLEMENTAL BUSINESS SOLUTIONS |
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Supplemental Segment Results | |||||||||||||||||||
Dollars in millions | Three Months Ended |
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Unaudited | June 30, | ||||||||||||||||||
| 2018 | Accounting Impact | Historical 2018 | 2017 | Percent Change | ||||||||||||||
Segment Operating Revenues |
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Wireless service | $ | 1,829 | $ | (209 | ) | $ | 2,038 | $ | 2,004 | 1.7 | % | ||||||||
Strategic services | 3,039 | (2 | ) | 3,041 | 2,958 | 2.8 | % | ||||||||||||
Legacy voice and data services | 2,723 | (251 | ) | 2,974 | 3,423 | -13.1 | % | ||||||||||||
Other service and equipment | 888 | (70 | ) | 958 | 922 | 3.9 | % | ||||||||||||
Wireless equipment | 584 | 160 | 424 | 360 | 17.8 | % | |||||||||||||
Total Segment Operating Revenues | 9,063 | (372 | ) | 9,435 | 9,667 | -2.4 | % | ||||||||||||
|
| ||||||||||||||||||
Segment Operating Expenses |
| ||||||||||||||||||
Operations and support | 5,616 | (443 | ) | 6,059 | 6,053 | 0.1 | % | ||||||||||||
EBITDA | 3,447 | 71 | 3,376 | 3,614 | -6.6 | % | |||||||||||||
Depreciation and amortization | 1,487 | - | 1,487 | 1,483 | 0.3 | % | |||||||||||||
Total Segment Operating Expenses | 7,103 | (443 | ) | 7,546 | 7,536 | 0.1 | % | ||||||||||||
Segment Operating Income | 1,960 | 71 | 1,889 | 2,131 | -11.4 | % | |||||||||||||
Equity in Net Income of Affiliates | 1 | - | 1 | - | - | % | |||||||||||||
Segment Contribution | $ | 1,961 | $ | 71 | $ | 1,890 | $ | 2,131 | -11.3 | % | |||||||||
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Operating Income Margin | 21.6 | % | 20.0 | % | 22.0 | % | -200 | BP | |||||||||||
EBITDA Margin | 38.0 | % | 35.8 | % | 37.4 | % | -160 | BP | |||||||||||
SUPPLEMENTAL ENTERTAINMENT GROUP | |||||||||||||||||||
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Supplemental Segment Results | |||||||||||||||||||
Dollars in millions | Three Months Ended |
| |||||||||||||||||
Unaudited | June 30, | ||||||||||||||||||
| 2018 | Accounting Impact | Historical 2018 | 2017 | Percent Change | ||||||||||||||
Segment Operating Revenues |
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Video entertainment | $ | 8,331 | $ | (107 | ) | $ | 8,438 | $ | 9,153 | -7.8 | % | ||||||||
High-speed internet | 1,981 | - | 1,981 | 1,927 | 2.8 | % | |||||||||||||
Legacy voice and data services | 785 | (33 | ) | 818 | 981 | -16.6 | % | ||||||||||||
Other service and equipment | 553 | (66 | ) | 619 | 600 | 3.2 | % | ||||||||||||
Total Segment Operating Revenues | 11,650 | (206 | ) | 11,856 | 12,661 | -6.4 | % | ||||||||||||
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Segment Operating Expenses |
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Operations and support | 8,852 | (425 | ) | 9,277 | 9,561 | -3.0 | % | ||||||||||||
EBITDA | 2,798 | 219 | 2,579 | 3,100 | -16.8 | % | |||||||||||||
Depreciation and amortization | 1,346 | - | 1,346 | 1,458 | -7.7 | % | |||||||||||||
Total Segment Operating Expenses | 10,198 | (425 | ) | 10,623 | 11,019 | -3.6 | % | ||||||||||||
Segment Operating Income | 1,452 | 219 | 1,233 | 1,642 | -24.9 | % | |||||||||||||
Equity in Net Income (Loss) of Affiliates | (20 | ) | - | (20 | ) | (12 | ) | -66.7 | % | ||||||||||
Segment Contribution | $ | 1,432 | $ | 219 | $ | 1,213 | $ | 1,630 | -25.6 | % | |||||||||
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Operating Income Margin | 12.5 | % | 10.4 | % | 13.0 | % | -260 | BP | |||||||||||
EBITDA Margin | 24.0 | % | 21.8 | % | 24.5 | % | -270 | BP | |||||||||||
SUPPLEMENTAL INTERNATIONAL | |||||||||||||||||||
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Supplemental Segment Results | |||||||||||||||||||
Dollars in millions | Three Months Ended |
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Unaudited | June 30, | ||||||||||||||||||
| 2018 | Accounting Impact | Historical 2018 | 2017 | Percent Change | ||||||||||||||
Segment Operating Revenues |
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Video entertainment | $ | 1,254 | $ | - | $ | 1,254 | $ | 1,361 | -7.9 | % | |||||||||
Wireless service | 417 | (40 | ) | 457 | 535 | -14.6 | % | ||||||||||||
Wireless equipment | 280 | 18 | 262 | 130 | - | % | |||||||||||||
Total Segment Operating Revenues | 1,951 | (22 | ) | 1,973 | 2,026 | -2.6 | % | ||||||||||||
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Segment Operating Expenses |
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Operations and support | 1,803 | (41 | ) | 1,844 | 1,772 | 4.1 | % | ||||||||||||
EBITDA | 148 | 19 | 129 | 254 | -49.2 | % | |||||||||||||
Depreciation and amortization | 313 | - | 313 | 311 | 0.6 | % | |||||||||||||
Total Segment Operating Expenses | 2,116 | (41 | ) | 2,157 | 2,083 | 3.6 | % | ||||||||||||
Segment Operating Income (Loss) | (165 | ) | 19 | (184 | ) | (57 | ) | - | % | ||||||||||
Equity in Net Income of Affiliates | 15 | - | 15 | 25 | -40.0 | % | |||||||||||||
Segment Contribution | $ | (150 | ) | $ | 19 | $ | (169 | ) | $ | (32 | ) | - | % | ||||||
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Operating Income Margin | -8.5 | % | -9.3 | % | -2.8 | % | -650 | BP | |||||||||||
EBITDA Margin | 7.6 | % | 6.5 | % | 12.5 | % | -600 | BP | |||||||||||
SUPPLEMENTAL AT&T MOBILITY | ||||||||||||||||||
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Supplemental Operating Results | ||||||||||||||||||
Dollars in millions | Three Months Ended |
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Unaudited | June 30, | |||||||||||||||||
| 2018 | Accounting Impact | Historical 2018 | 2017 | Percent Change | |||||||||||||
Operating Revenues |
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Service | $ | 13,682 | $ | (813 | ) | $ | 14,495 | $ | 14,471 | 0.2 | % | |||||||
Equipment | 3,600 | 451 | 3,149 | 2,984 | 5.5 | % | ||||||||||||
Total Operating Revenues | 17,282 | (362 | ) | 17,644 | 17,455 | 1.1 | % | |||||||||||
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Operating Expenses |
| |||||||||||||||||
Operations and support | 9,663 | (670 | ) | 10,333 | 10,091 | 2.4 | % | |||||||||||
EBITDA | 7,619 | 308 | 7,311 | 7,364 | -0.7 | % | ||||||||||||
Depreciation and amortization | 2,113 | - | 2,113 | 1,988 | 6.3 | % | ||||||||||||
Total Operating Expenses | 11,776 | (670 | ) | 12,446 | 12,079 | 3.0 | % | |||||||||||
Operating Income | $ | 5,506 | $ | 308 | $ | 5,198 | $ | 5,376 | -3.3 | % | ||||||||
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Operating Income Margin | 31.9 | % | 29.5 | % | 30.8 | % | -130 | BP | ||||||||||
EBITDA Margin | 44.1 | % | 41.4 | % | 42.2 | % | -80 | BP | ||||||||||
EBITDA Service Margin | 55.7 | % | 50.4 | % | 50.9 | % | -50 | BP | ||||||||||
SUPPLEMENTAL LATIN AMERICA | ||||||||||||||||||||
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Supplemental Latin America Results | ||||||||||||||||||||
Dollars in millions | Three Months Ended |
| ||||||||||||||||||
Unaudited | June 30, | |||||||||||||||||||
| 2018 | Accounting Impact | Historical 2018 | 2017 | Percent Change | |||||||||||||||
Operating Revenues |
| |||||||||||||||||||
Video entertainment | $ | 1,254 | $ | - | $ | 1,254 | $ | 1,361 | -7.9 | % | ||||||||||
Total Operating Revenues | 1,254 | - | 1,254 | 1,361 | -7.9 | % | ||||||||||||||
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| |||||||||||||||||||
Operating Expenses |
| |||||||||||||||||||
Operations and support | 1,016 | (40 | ) | 1,056 | 998 | 5.8 | % | |||||||||||||
EBITDA | 238 | 40 | 198 | 363 | -45.5 | % | ||||||||||||||
Depreciation and amortization | 186 | - | 186 | 222 | -16.2 | % | ||||||||||||||
Total Operating Expenses | 1,202 | (40 | ) | 1,242 | 1,220 | 1.8 | % | |||||||||||||
Operating Income (Loss) | 52 | 40 | 12 | 141 | -91.5 | % | ||||||||||||||
Equity in Net Income (Loss) of Affiliates | 15 | - | 15 | 25 | -40.0 | % | ||||||||||||||
Operating Contribution | $ | 67 | $ | 40 | $ | 27 | $ | 166 | -83.7 | % | ||||||||||
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Operating Income Margin | 4.1 | % | 1.0 | % | 10.4 | % | -940 | BP | ||||||||||||
EBITDA Margin | 19.0 | % | 15.8 | % | 26.7 | % | -1,090 | BP | ||||||||||||
SUPPLEMENTAL MEXICO | |||||||||||||||||||
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Supplemental Mexico Results | |||||||||||||||||||
Dollars in millions | Three Months Ended |
| |||||||||||||||||
Unaudited | June 30, | ||||||||||||||||||
| 2018 | Accounting Impact | Historical 2018 | 2017 | Percent Change | ||||||||||||||
Operating Revenues |
| ||||||||||||||||||
Wireless service | $ | 417 | $ | (40 | ) | $ | 457 | $ | 535 | -14.6 | % | ||||||||
Wireless equipment | 280 | 18 | 262 | 130 | - | % | |||||||||||||
Total Operating Revenues | 697 | (22 | ) | 719 | 665 | 8.1 | % | ||||||||||||
|
| ||||||||||||||||||
Operating Expenses |
| ||||||||||||||||||
Operations and support | 787 | (1 | ) | 788 | 774 | 1.8 | % | ||||||||||||
EBITDA | (90 | ) | (21 | ) | (69 | ) | (109 | ) | 36.7 | % | |||||||||
Depreciation and amortization | 127 | - | 127 | 89 | 42.7 | % | |||||||||||||
Total Operating Expenses | 914 | (1 | ) | 915 | 863 | 6.0 | % | ||||||||||||
Operating Income (Loss) | (217 | ) | (21 | ) | (196 | ) | (198 | ) | 1.0 | % | |||||||||
Operating Contribution | $ | (217 | ) | $ | (21 | ) | $ | (196 | ) | $ | (198 | ) | 1.0 | % | |||||
|
| ||||||||||||||||||
Operating Income Margin | -31.1 | % | -27.3 | % | -29.8 | % | 250 | BP | |||||||||||
EBITDA Margin | -12.9 | % | -9.6 | % | -16.4 | % | 680 | BP | |||||||||||
