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

AT&T Inc.
Financial Data
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Second Quarter				Percent		Six-Month Period				Percent
		2019		2018	Change			2019		2018	Change
Operating Revenues
Service	$	41,023	$	34,906	17.5	%	$	81,707	$	68,552	19.2	%
Equipment		3,934		4,080	(3.6)	%		8,077		8,472	(4.7)	%
Total Operating Revenues		44,957		38,986	15.3	%		89,784		77,024	16.6	%
Operating Expenses
Cost of revenues
Equipment		4,061		4,377	(7.2)	%		8,563		9,225	(7.2)	%
Broadcast, programming and operations		7,730		5,449	41.9	%		15,382		10,615	44.9	%
Other cost of revenues (exclusive of depreciation           and amortization shown separately below)		8,721		7,632	14.3	%		17,306		15,564	11.2	%
Selling, general and administrative		9,844		8,684	13.4	%		19,493		16,581	17.6	%
Depreciation and amortization		7,101		6,378	11.3	%		14,307		12,372	15.6	%
Total Operating Expenses		37,457		32,520	15.2	%		75,051		64,357	16.6	%
Operating Income		7,500		6,466	16.0	%		14,733		12,667	16.3	%
Interest Expense		2,149		2,023	6.2	%		4,290		3,794	13.1	%
Equity in Net Income (Loss) of Affiliates		40		(16)	-	%		33		(7)	-	%
Other Income (Expense) - Net		(318)		2,353	-	%		(32)		4,055	-	%
Income Before Income Taxes		5,073		6,780	(25.2)	%		10,444		12,921	(19.2)	%
Income Tax Expense		1,099		1,532	(28.3)	%		2,122		2,914	(27.2)	%
Net Income		3,974		5,248	(24.3)	%		8,322		10,007	(16.8)	%
Less: Net Income Attributable to     Noncontrolling Interest		(261)		(116)	-	%		(513)		(213)	-	%
Net Income Attributable to AT&T	$	3,713	$	5,132	(27.7)	%	$	7,809	$	9,794	(20.3)	%
Basic Earnings Per Share Attributable to AT&T	$	0.51	$	0.81	(37.0)	%	$	1.06	$	1.56	(32.1)	%
Weighted Average Common     Shares Outstanding (000,000)		7,323		6,351	15.3	%		7,318		6,257	17.0	%
Diluted Earnings Per Share Attributable to AT&T	$	0.51	$	0.81	(37.0)	%	$	1.06	$	1.56	(32.1)	%
Weighted Average Common      Shares Outstanding with Dilution (000,000)		7,353		6,374	15.4	%		7,347		6,277	17.0	%

AT&T Inc.
Financial Data
Consolidated Balance Sheets
Dollars in millions
Unaudited		Jun. 30,		Dec. 31,
		2019		2018
Assets
Current Assets
Cash and cash equivalents	$	8,423	$	5,204
Accounts receivable - net of allowances for doubtful accounts of $1,086 and $907		22,381		26,472
Prepaid expenses		1,441		2,047
Other current assets		14,973		17,704
Total current assets		47,218		51,427
Noncurrent Inventories and Theatrical Film and Television Production Costs		10,685		7,713
Property, Plant and Equipment – Net		132,074		131,473
Goodwill		146,662		146,370
Licenses – Net		97,125		96,144
Trademarks and Trade Names – Net		24,088		24,345
Distribution Networks – Net		16,262		17,069
Other Intangible Assets – Net		23,284		26,269
Investments in and Advances to Equity Affiliates		4,133		6,245
Operating Lease Right-of-Use Assets		22,650		-
Other Assets		22,733		24,809
Total Assets	$	546,914	$	531,864
Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	12,625	$	10,255
Accounts payable and accrued liabilities		42,082		43,184
Advanced billings and customer deposits		5,734		5,948
Accrued taxes		2,062		1,179
Dividends payable		3,726		3,854
Total current liabilities		66,229		64,420
Long-Term Debt		157,937		166,250
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		58,713		57,859
Postemployment benefit obligation		21,210		19,218
Operating lease liabilities		20,568		-
Other noncurrent liabilities		28,176		30,233
Total deferred credits and other noncurrent liabilities		128,667		107,310
Stockholders’ Equity
Common stock		7,621		7,621
Additional paid-in capital		125,109		125,525
Retained earnings		59,389		58,753
Treasury stock		(11,151)		(12,059)
Accumulated other comprehensive income		3,289		4,249
Noncontrolling interest		9,824		9,795
Total stockholders’ equity		194,081		193,884
Total Liabilities and Stockholders' Equity	$	546,914	$	531,864

AT&T Inc.
Financial Data
Consolidated Statements of Cash Flows
Dollars in millions
Unaudited		Six-Month Period
			2019		2018
Operating Activities
Net income		$	8,322	$	10,007
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		14,307		12,372
	Amortization of film and television costs		5,199		168
	Undistributed earnings from investments in equity affiliates		76		235
	Provision for uncollectible accounts		1,216		808
	Deferred income tax expense (benefit)		1,080		2,285
	Net (gain) loss from investments, net of impairments		(905)		(29)
	Actuarial (gain) loss on pension and postretirement benefits		2,131		(2,726)
Changes in operating assets and liabilities:
	Accounts receivable		3,540		233
	Other current assets, inventories and theatrical film and television production costs		(5,422)		1,039
	Accounts payable and other accrued liabilities		(3,056)		(3,890)
	Equipment installment receivables and related sales		1,144		490
	Deferred customer contract acquisition and fulfillment costs		(614)		(1,725)
Retirement benefit funding			(1,232)		(933)
Other - net			(450)		842
Total adjustments			17,014		9,169
Net Cash Provided by Operating Activities			25,336		19,176
Investing Activities
Capital expenditures:
	Purchase of property and equipment		(10,542)		(10,959)
	Interest during construction		(112)		(267)
Acquisitions, net of cash acquired			(320)		(40,715)
Dispositions			3,593		59
(Purchases), sales and settlement of securities and investments, net			396		(218)
Advances to and investments in equity affiliates, net			(314)		(1,035)
Cash collections of deferred purchase price			-		500
Net Cash Used in Investing Activities			(7,299)		(52,635)
Financing Activities
Net change in short-term borrowings with original maturities of three months or less			119		2,227
Issuance of other short-term borrowings			3,067		4,839
Repayment of other short-term borrowings			(3,148)		-
Issuance of long-term debt			10,030		26,478
Repayment of long-term debt			(16,124)		(29,447)
Purchase of treasury stock			(240)		(564)
Issuance of treasury stock			455		12
Dividends paid			(7,436)		(6,144)
Other			(1,506)		(1,121)
Net Cash Used in Financing Activities			(14,783)		(3,720)
Net increase (decrease) in cash and cash equivalents and restricted cash			3,254		(37,179)
Cash and cash equivalents and restricted cash beginning of year			5,400		50,932
Cash and Cash Equivalents and Restricted Cash End of Period		$	8,654	$	13,753

AT&T Inc.
Consolidated Supplementary Data
Supplementary Financial Data
Dollars in millions except per share amounts
Unaudited		Second Quarter				Percent		Six-Month Period					Percent
			2019		2018	Change			2019		2018		Change
Capital expenditures
	Purchase of property and equipment	$	5,421	$	5,002	8.4	%	$	10,542	$	10,959		(3.8)	%
	Interest during construction		51		106	(51.9)	%		112		267		(58.1)	%
Total Capital Expenditures		$	5,472	$	5,108	7.1	%	$	10,654	$	11,226		(5.1)	%
Dividends Declared per Share		$	0.51	$	0.50	2.0	%	$	1.02	$	1.00		2.0	%
End of Period Common Shares Outstanding (000,000)									7,305		7,261		0.6	%
Debt Ratio									46.8	%	50.8	%	(400)	BP
Total Employees									257,790		273,210		(5.6)	%
Supplementary Operating Data
Subscribers and connections in thousands
Unaudited								June 30,					Percent
									2019		2018		Change
Wireless Subscribers
	Domestic								159,665		146,889		8.7	%
	Mexico								18,021		16,398		9.9	%
Total Wireless Subscribers									177,686		163,287		8.8	%
Video Connections
	Domestic								22,945		25,473		(9.9)	%
	Latin America								13,473		13,713		(1.8)	%
Total Video Connections									36,418		39,186		(7.1)	%
Broadband Connections
	IP								14,860		14,709		1.0	%
	DSL								838		1,063		(21.2)	%
Total Broadband Connections									15,698		15,772		(0.5)	%
Voice Connections
	Network Access Lines								9,207		10,832		(15.0)	%
	U-verse  VoIP Connections								4,766		5,449		(12.5)	%
Total Retail Voice Connections									13,973		16,281		(14.2)	%
		Second Quarter				Percent		Six-Month Period					Percent
			2019		2018	Change			2019		2018		Change
Wireless Net Additions
	Domestic		3,932		3,064	28.3	%		6,659		5,694		16.9	%
	Mexico		299		756	(60.4)	%		392		1,299		(69.8)	%
Total Wireless Net Additions			4,231		3,820	10.8	%		7,051		6,993		0.8	%
Video Net Additions
	Domestic		(946)		79	-	%		(1,572)		203		-	%
	Latin America		(111)		140	-	%		(143)		125		-	%
Total Video Net Additions			(1,057)		219	-	%		(1,715)		328		-	%
Broadband Net Additions
	IP		8		72	(88.9)	%		108		222		(51.4)	%
	DSL		(47)		(75)	37.3	%		(111)		(169)		34.3	%
Total Broadband Net Additions			(39)		(3)	-	%		(3)		53		-	%

COMMUNICATIONS SEGMENT
The Communications segment provides wireless and wireline telecom, video and broadband services to consumers located in the U.S. or in U.S. territories and businesses globally. The Communications segment contains three reporting units: Mobility, Entertainment Group, and Business Wireline.
Segment Results
Dollars in millions
Unaudited		Second Quarter				Percent		Six-Month Period				Percent
			2019		2018	Change			2019		2018	Change
Segment Operating Revenues
	Mobility	$	17,512	$	17,282	1.3	%	$	35,079	$	34,637	1.3	%
	Entertainment Group		11,368		11,478	(1.0)	%		22,696		22,909	(0.9)	%
	Business Wireline		6,628		6,650	(0.3)	%		13,126		13,397	(2.0)	%
Total Segment Operating Revenues			35,508		35,410	0.3	%		70,901		70,943	(0.1)	%
Segment Operating Contribution
	Mobility		5,833		5,506	5.9	%		11,184		10,664	4.9	%
	Entertainment Group		1,514		1,475	2.6	%		2,992		2,784	7.5	%
	Business Wireline		1,390		1,433	(3.0)	%		2,613		2,993	(12.7)	%
Total Segment Operating Contribution		$	8,737	$	8,414	3.8	%	$	16,789	$	16,441	2.1	%

Mobility
Mobility provides nationwide wireless service and equipment.
Mobility Results
Dollars in millions
Unaudited	Second Quarter					Percent		Six-Month Period					Percent
		2019		2018		Change			2019		2018		Change
Operating Revenues
Service	$	14,006	$	13,682		2.4	%	$	27,798	$	27,085		2.6	%
Equipment		3,506		3,600		(2.6)	%		7,281		7,552		(3.6)	%
Total Operating Revenues		17,512		17,282		1.3	%		35,079		34,637		1.3	%
Operating Expenses
Operations and support		9,654		9,663		(0.1)	%		19,835		19,765		0.4	%
Depreciation and amortization		2,025		2,113		(4.2)	%		4,060		4,208		(3.5)	%
Total Operating Expenses		11,679		11,776		(0.8)	%		23,895		23,973		(0.3)	%
Operating Income		5,833		5,506		5.9	%		11,184		10,664		4.9	%
Equity in Net Income of Affiliates		-		-		-	%		-		-		-	%
Operating  Contribution	$	5,833	$	5,506		5.9	%	$	11,184	$	10,664		4.9	%
Operating Income Margin		33.3	%	31.9	%	140	BP		31.9	%	30.8	%	110	BP
Supplementary Operating Data
Subscribers and connections in thousands
Unaudited								June 30,					Percent
									2019		2018		Change
Mobility Subscribers
Postpaid smartphones									60,737		60,183		0.9	%
Postpaid feature phones and data-centric devices									15,545		17,189		(9.6)	%
Postpaid									76,282		77,372		(1.4)	%
Prepaid									17,602		16,217		8.5	%
Reseller									7,392		8,582		(13.9)	%
Connected Devices									58,389		44,718		30.6	%
Total Mobility Subscribers									159,665		146,889		8.7	%
Postpaid Phone Subscribers									63,415		63,543		(0.2)	%
Total Phone Subscribers									80,003		78,919		1.4	%
	Second Quarter							Six-Month Period					Percent
		2019		2018					2019		2018		Change
Mobility Net Additions
Postpaid		(154)		73		-	%		(358)		122		-	%
Prepaid		341		453		(24.7)	%		437		694		(37.0)	%
Reseller		(214)		(444)		51.8	%		(467)		(832)		43.9	%
Connected Devices		3,959		2,982		32.8	%		7,047		5,710		23.4	%
Total Mobility Net Additions		3,932		3,064		28.3	%		6,659		5,694		16.9	%
Postpaid Phone Net Additions		72		51		41.2	%		152		(9)		-	%
Total Phone Net Additions		355		407		(12.8)	%		520		539		(3.5)	%
Postpaid Churn		1.08	%	1.02	%	6	BP		1.12	%	1.04	%	8	BP
Postpaid Phone-Only Churn		0.86	%	0.82	%	4	BP		0.89	%	0.83	%	6	BP

Entertainment Group
Entertainment Group provides video, including over-the-top (OTT) services, broadband and voice communication services primarily to residential customers. This business unit also sells advertising on video distribution platforms.
Entertainment Group Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
Video entertainment		$	8,035	$	8,173		(1.7)	%	$	16,109	$	16,398		(1.8)	%
High-speed internet			2,109		1,981		6.5	%		4,179		3,859		8.3	%
Legacy voice and data services			658		772		(14.8)	%		1,341		1,578		(15.0)	%
Other service and equipment			566		552		2.5	%		1,067		1,074		(0.7)	%
Total Operating Revenues			11,368		11,478		(1.0)	%		22,696		22,909		(0.9)	%
Operating Expenses
Operations and support			8,515		8,657		(1.6)	%		17,042		17,468		(2.4)	%
Depreciation and amortization			1,339		1,345		(0.4)	%		2,662		2,655		0.3	%
Total Operating Expenses			9,854		10,002		(1.5)	%		19,704		20,123		(2.1)	%
Operating Income			1,514		1,476		2.6	%		2,992		2,786		7.4	%
Equity in Net Income (Loss) of Affiliates			-		(1)		-	%		-		(2)		-	%
Operating Contribution		$	1,514	$	1,475		2.6	%	$	2,992	$	2,784		7.5	%
Operating Income Margin			13.3	%	12.9	%	40	BP		13.2	%	12.2	%	100	BP
Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									June 30,					Percent
										2019		2018		Change
Video Connections
Premium TV										21,581		23,640		(8.7)	%
DIRECTV NOW										1,340		1,809		(25.9)	%
Total Video Connections										22,921		25,449		(9.9)	%
Broadband Connections
IP										13,822		13,692		0.9	%
DSL										598		763		(21.6)	%
Total Broadband Connections										14,420		14,455		(0.2)	%
Fiber Broadband Connections (included in IP)										3,378		2,204		53.3	%
Voice Connections
Retail Consumer Switched Access Lines										3,630		4,333		(16.2)	%
U-verse Consumer VoIP Connections										4,211		4,950		(14.9)	%
Total Retail Consumer Voice Connections										7,841		9,283		(15.5)	%
		Second Quarter					Percent		Six-Month Period					Percent
			2019		2018		Change			2019		2018		Change
Video Net Additions
Premium TV1			(778)		(262)		-	%		(1,322)		(449)		-	%
DIRECTV NOW			(168)		342		-	%		(251)		654		-	%
Total Video Net Additions			(946)		80		-	%		(1,573)		205		-	%
Broadband Net Additions
IP			-		76		-	%		93		230		(59.6)	%
DSL			(34)		(53)		35.8	%		(82)		(125)		34.4	%
Total Broadband Net Additions			(34)		23		-	%		11		105		(89.5)	%
Fiber Broadband Net Additions (included in IP)			318		249		27.7	%		615		475		29.5	%
1	Includes the impact of customers that migrated to DIRECTV NOW.

Business Wireline
Business Wireline unit provides advanced IP-based services, as well as traditional data services to business customers. Revenues have been recast to conform to the current period's presentation.
Business Wireline Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
	Strategic and managed services	$	3,848	$	3,603		6.8	%	$	7,640	$	7,198		6.1	%
	Legacy voice and data services		2,331		2,730		(14.6)	%		4,735		5,595		(15.4)	%
	Other service and equipment		449		317		41.6	%		751		604		24.3	%
Total Operating Revenues			6,628		6,650		(0.3)	%		13,126		13,397		(2.0)	%
Operating Expenses
Operations and support			3,982		4,038		(1.4)	%		8,022		8,054		(0.4)	%
Depreciation and amortization			1,256		1,180		6.4	%		2,491		2,350		6.0	%
Total Operating Expenses			5,238		5,218		0.4	%		10,513		10,404		1.0	%
Operating Income			1,390		1,432		(2.9)	%		2,613		2,993		(12.7)	%
Equity in Net Income of Affiliates			-		1		-	%		-		-		-	%
Operating Contribution		$	1,390	$	1,433		(3.0)	%	$	2,613	$	2,993		(12.7)	%
Operating Income Margin			21.0	%	21.5	%	(50)	BP		19.9	%	22.3	%	(240)	BP

Business Solutions
As a supplemental presentation to our Communications segment operating results, we are providing a view of our AT&T Business Solutions results which includes both wireless and fixed operations. This combined view presents a complete profile of the entire business customer relationship and underscores the importance of mobile solutions to serving our business customers. Revenues have been recast to conform to the current period's presentation.
Business Solutions Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
	Wireless service	$	2,022	$	1,829		10.6	%	$	3,935	$	3,620		8.7	%
	Strategic and managed services		3,848		3,603		6.8	%		7,640		7,198		6.1	%
	Legacy voice and data services		2,331		2,730		(14.6)	%		4,735		5,595		(15.4)	%
	Other service and equipment		449		317		41.6	%		751		604		24.3	%
	Wireless equipment		622		584		6.5	%		1,218		1,162		4.8	%
Total Operating Revenues			9,272		9,063		2.3	%		18,279		18,179		0.6	%
Operating Expenses
Operations and support			5,539		5,616		(1.4)	%		11,179		11,210		(0.3)	%
Depreciation and amortization			1,561		1,487		5.0	%		3,102		2,945		5.3	%
Total Operating Expenses			7,100		7,103		-	%		14,281		14,155		0.9	%
Operating Income			2,172		1,960		10.8	%		3,998		4,024		(0.6)	%
Equity in Net Income of Affiliates			-		1		-	%		-		-		-	%
Operating Contribution		$	2,172	$	1,961		10.8	%	$	3,998	$	4,024		(0.6)	%
Operating Income Margin			23.4	%	21.6	%	180	BP		21.9	%	22.1	%	(20)	BP

WARNERMEDIA SEGMENT
The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content in various physical and digital formats globally. Results from Turner, Home Box Office and Warner Bros. businesses are combined with AT&T's Regional Sports Network (RSN) and Otter Media Holdings in the WarnerMedia segment.
Segment Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
	Subscription	$	3,536	$	687		-	%	$	6,905	$	785		-	%
	Advertising		1,285		225		-	%		2,564		239		-	%
	Content and other		3,529		481		-	%		7,260		481		-	%
Total Operating Revenues			8,350		1,393		-	%		16,729		1,505		-	%
Operating Expenses
Operations and support			6,289		911		-	%		12,282		993		-	%
Depreciation and amortization			91		31		-	%		234		32		-	%
Total Operating Expenses			6,380		942		-	%		12,516		1,025		-	%
Operating Income			1,970		451		-	%		4,213		480		-	%
Equity in Net Income (Loss) of Affiliates			55		(26)		-	%		122		(16)		-	%
Operating Contribution		$	2,025	$	425		-	%	$	4,335	$	464		-	%
Operating Income Margin			23.6	%	32.4	%	(880)	BP		25.2	%	31.9	%	(670)	BP

LATIN AMERICA SEGMENT
The Latin America segment provides entertainment and wireless service outside of the U.S. Our international subsidiaries conduct business in their local currency and operating results are converted to U.S. dollars using official exchange rates. The Latin America segment contains two business units: Vrio and Mexico.
Segment Results
Dollars in millions
Unaudited		Second Quarter				Percent		Six-Month Period				Percent
			2019		2018	Change			2019		2018	Change
Segment Operating Revenues
	Vrio	$	1,032	$	1,254	(17.7)	%	$	2,099	$	2,608	(19.5)	%
	Mexico		725		697	4.0	%		1,376		1,368	0.6	%
Total Segment Operating Revenues			1,757		1,951	(9.9)	%		3,475		3,976	(12.6)	%
Segment Operating Contribution
	Vrio		(2)		67	-	%		30		215	(86.0)	%
	Mexico		(207)		(217)	4.6	%		(412)		(476)	13.4	%
Total Segment Operating Contribution		$	(209)	$	(150)	(39.3)	%	$	(382)	$	(261)	(46.4)	%

Vrio
Vrio provides entertainment services to customers utilizing satellite technology in Latin America and the Caribbean.
Vrio Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues		$	1,032	$	1,254		(17.7)	%	$	2,099	$	2,608		(19.5)	%
Operating Expenses
Operations and support			881		1,016		(13.3)	%		1,747		2,017		(13.4)	%
Depreciation and amortization			165		186		(11.3)	%		334		391		(14.6)	%
Total Operating Expenses			1,046		1,202		(13.0)	%		2,081		2,408		(13.6)	%
Operating Income			(14)		52		-	%		18		200		(91.0)	%
Equity in Net Income of Affiliates			12		15		(20.0)	%		12		15		(20.0)	%
Operating Contribution		$	(2)	$	67		-	%	$	30	$	215		(86.0)	%
Operating Income Margin			(1.4)	%	4.1	%	(550)	BP		0.9	%	7.7	%	(680)	BP
Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									June 30,					Percent
										2019		2018		Change
Vrio Video Subscribers1										13,473		13,713		-1.8	%
		Second Quarter					Percent		Six-Month Period					Percent
			2019		2018		Change			2019		2018		Change
Vrio Video Net Subscriber Additions			(111)		140		-	%		(143)		125		-	%
1	2019 excludes the impact of 222 subscriber disconnections resulting from conforming our video credit policy across the region,
	which is reflected in beginning of period subscribers.

Mexico
Mexico provides wireless services and equipment to customers in Mexico.
Mexico Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
Wireless service		$	479	$	417		14.9	%	$	921	$	821		12.2	%
Wireless equipment			246		280		(12.1)	%		455		547		(16.8)	%
Total Operating Revenues			725		697		4.0	%		1,376		1,368		0.6	%
Operating Expenses
Operations and support			813		787		3.3	%		1,538		1,590		(3.3)	%
Depreciation and amortization			119		127		(6.3)	%		250		254		(1.6)	%
Total Operating Expenses			932		914		2.0	%		1,788		1,844		(3.0)	%
Operating Income (Loss)			(207)		(217)		4.6	%		(412)		(476)		13.4	%
Equity in Net Income of Affiliates			-		-		-	%		-		-		-	%
Operating Contribution		$	(207)	$	(217)		4.6	%	$	(412)	$	(476)		13.4	%
Operating Income Margin			(28.6)	%	(31.1)	%	250	BP		(29.9)	%	(34.8)	%	490	BP
Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									June 30,					Percent
										2019		2018		Change
Mexico Wireless Subscribers1
Postpaid										5,489		5,749		(4.5)	%
Prepaid										12,180		10,468		16.4	%
Reseller										352		181		94.5	%
Total Mexico Wireless Subscribers										18,021		16,398		9.9	%
		Second Quarter					Percent		Six-Month Period					Percent
			2019		2018		Change			2019		2018		Change
Mexico Wireless Net Additions
Postpaid			(153)		142		-	%		(222)		251		-	%
Prepaid			401		611		(34.4)	%		515		1,070		(51.9)	%
Reseller			51		3		-	%		99		(22)		-	%
Total Mexico Wireless Net Subscriber Additions			299		756		(60.4)	%		392		1,299		(69.8)	%
1	2019 excludes the impact of 692 subscriber disconnections resulting from the churn of customers related to sales by certain
	third-party distributors and the sunset of 2G services in Mexico, which are reflected in beginning of period subscribers.

XANDR SEGMENT
The Xandr segment provides advertising services. These services utilize data insights to develop higher value targeted advertising. Certain revenues in this segment are also reported by the Communications segment and are eliminated upon consolidation.
Segment Operating Results
Dollars in millions
Unaudited	Second Quarter					Percent		Six-Month Period					Percent
		2019		2018		Change			2019		2018		Change
Segment Operating Revenues	$	485	$	392		23.7	%	$	911	$	729		25.0	%
Segment Operating Expenses
Operations and support		147		59		-	%		307		109		-	%
Depreciation and amortization		13		-		-	%		26		1		-	%
Total Segment Operating Expenses		160		59		-	%		333		110		-	%
Operating Income		325		333		(2.4)	%		578		619		(6.6)	%
Equity in Net Income of Affiliates		-		-		-	%		-		-		-	%
Segment Operating Contribution	$	325	$	333		(2.4)	%	$	578	$	619		(6.6)	%
Segment Operating Income Margin		67.0	%	84.9	%	(1,790)	BP		63.4	%	84.9	%	(2,150)	BP

Supplemental AT&T Advertising Revenues
As a supplemental presentation to our Xandr segment operating results, we are providing a view of total advertising revenues generated by AT&T, which combines the advertising revenues recorded across all operating segments. This combined view presents the entire portfolio of revenues generated from AT&T assets and represents a significant strategic initiative and growth opportunity for AT&T.
Advertising Revenues
Dollars in millions
Unaudited		Second Quarter				Percent		Six-Month Period				Percent
			2019		2018	Change			2019		2018	Change
Operating Revenues
	WarnerMedia	$	1,285	$	225	-	%	$	2,564	$	239	-	%
	Communications		470		431	9.0	%		887		806	10.0	%
	Xandr		485		392	23.7	%		911		729	25.0	%
	Eliminations		(399)		(387)	(3.1)	%		(749)		(721)	(3.9)	%
Total Advertising Revenues		$	1,841	$	661	-	%	$	3,613	$	1,053	-	%

SUPPLEMENTAL SEGMENT RECONCILIATION
Three Months Ended
Dollars in millions
Unaudited
June 30, 2019
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	17,512	$	9,654	$	7,858	$	2,025	$	5,833	$	-	$	5,833
Entertainment Group		11,368		8,515		2,853		1,339		1,514		-		1,514
Business Wireline		6,628		3,982		2,646		1,256		1,390		-		1,390
Total Communications		35,508		22,151		13,357		4,620		8,737		-		8,737
WarnerMedia		8,350		6,289		2,061		91		1,970		55		2,025
Latin America
Vrio		1,032		881		151		165		(14)		12		(2)
Mexico		725		813		(88)		119		(207)		-		(207)
Total Latin America		1,757		1,694		63		284		(221)		12		(209)
Xandr		485		147		338		13		325		-		325
Segment Total		46,100		30,281		15,819		5,008		10,811		67		10,878
Corporate and Other
Corporate		209		626		(417)		134		(551)
Acquisition-related items		(30)		316		(346)		1,960		(2,306)
Certain significant items		-		94		(94)		-		(94)
Eliminations and consolidations		(1,322)		(961)		(361)		(1)		(360)
AT&T Inc.	$	44,957	$	30,356	$	14,601	$	7,101	$	7,500
June 30, 2018
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	17,282	$	9,663	$	7,619	$	2,113	$	5,506	$	-	$	5,506
Entertainment Group		11,478		8,657		2,821		1,345		1,476		(1)		1,475
Business Wireline		6,650		4,038		2,612		1,180		1,432		1		1,433
Total Communications		35,410		22,358		13,052		4,638		8,414		-		8,414
WarnerMedia		1,393		911		482		31		451		(26)		425
Latin America
Vrio		1,254		1,016		238		186		52		15		67
Mexico		697		787		(90)		127		(217)		-		(217)
Total Latin America		1,951		1,803		148		313		(165)		15		(150)
Xandr		392		59		333		-		333		-		333
Segment Total		39,146		25,131		14,015		4,982		9,033		(11)		9,022
Corporate and Other
Corporate		320		661		(341)		118		(459)
Acquisition-related items		-		321		(321)		1,278		(1,599)
Certain significant items		-		152		(152)		-		(152)
Eliminations and consolidations		(480)		(123)		(357)		-		(357)
AT&T Inc.	$	38,986	$	26,142	$	12,844	$	6,378	$	6,466

SUPPLEMENTAL SEGMENT RECONCILIATION
Six Months Ended
Dollars in millions
Unaudited
June 30, 2019
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	35,079	$	19,835	$	15,244	$	4,060	$	11,184	$	-	$	11,184
Entertainment Group		22,696		17,042		5,654		2,662		2,992		-		2,992
Business Wireline		13,126		8,022		5,104		2,491		2,613		-		2,613
Total Communications		70,901		44,899		26,002		9,213		16,789		-		16,789
WarnerMedia		16,729		12,282		4,447		234		4,213		122		4,335
Latin America
Vrio		2,099		1,747		352		334		18		12		30
Mexico		1,376		1,538		(162)		250		(412)		-		(412)
Total Latin America		3,475		3,285		190		584		(394)		12		(382)
Xandr		911		307		604		26		578		-		578
Segment Total		92,016		60,773		31,243		10,057		21,186	$	134	$	21,320
Corporate and Other
Corporate		418		1,139		(721)		303		(1,024)
Acquisition-related items		(72)		389		(461)		3,948		(4,409)
Certain significant items		-		342		(342)		-		(342)
Eliminations and consolidations		(2,578)		(1,899)		(679)		(1)		(678)
AT&T Inc.	$	89,784	$	60,744	$	29,040	$	14,307	$	14,733
June 30, 2018
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	34,637	$	19,765	$	14,872	$	4,208	$	10,664	$	-	$	10,664
Entertainment Group		22,909		17,468		5,441		2,655		2,786		(2)		2,784
Business Wireline		13,397		8,054		5,343		2,350		2,993		-		2,993
Total Communications		70,943		45,287		25,656		9,213		16,443		(2)		16,441
WarnerMedia		1,505		993		512		32		480		(16)		464
Latin America
Vrio		2,608		2,017		591		391		200		15		215
Mexico		1,368		1,590		(222)		254		(476)		-		(476)
Total Latin America		3,976		3,607		369		645		(276)		15		(261)
Xandr		729		109		620		1		619		-		619
Segment Total		77,153		49,996		27,157		9,891		17,266	$	(3)	$	17,263
Corporate and Other
Corporate		653		1,396		(743)		141		(884)
Acquisition-related items		-		388		(388)		2,340		(2,728)
Certain significant items		-		332		(332)		-		(332)
Eliminations and consolidations		(782)		(127)		(655)		-		(655)
AT&T Inc.	$	77,024	$	51,985	$	25,039	$	12,372	$	12,667