AT&T 8K Reports Second-Quarter Results | T 23 Jul 20

AT&T Inc.
Financial Data


Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Second Quarter				Percent		Six-Month Period				Percent
		2020		2019	Change			2020		2019	Change
Operating Revenues
Service	$	37,051	$	41,023	(9.7)	%	$	75,934	$	81,707	(7.1)	%
Equipment		3,899		3,934	(0.9)	%		7,795		8,077	(3.5)	%
Total Operating Revenues		40,950		44,957	(8.9)	%		83,729		89,784	(6.7)	%

Operating Expenses
Cost of revenues
Equipment		3,978		4,061	(2.0)	%		8,070		8,563	(5.8)	%
Broadcast, programming and operations		5,889		7,730	(23.8)	%		12,643		15,382	(17.8)	%
Other cost of revenues (exclusive of depreciation and amortization shown separately below)		8,116		8,721	(6.9)	%		16,458		17,306	(4.9)	%
Selling, general and administrative		9,831		9,844	(0.1)	%		18,591		19,493	(4.6)	%
Impairments		2,319		-	-	%		2,442		-	-	%
Depreciation and amortization		7,285		7,101	2.6	%		14,507		14,307	1.4	%
Total Operating Expenses		37,418		37,457	(0.1)	%		72,711		75,051	(3.1)	%
Operating Income		3,532		7,500	(52.9)	%		11,018		14,733	(25.2)	%
Interest Expense		2,041		2,149	(5.0)	%		4,059		4,290	(5.4)	%
Equity in Net Income (Loss) of Affiliates		(10)		40	-	%		(16)		33	-	%
Other Income (Expense) - Net		1,017		(318)	-	%		1,820		(32)	-	%
Income Before Income Taxes		2,498		5,073	(50.8)	%		8,763		10,444	(16.1)	%
Income Tax Expense		935		1,099	(14.9)	%		2,237		2,122	5.4	%
Net Income		1,563		3,974	(60.7)	%		6,526		8,322	(21.6)	%
Less: Net Income Attributable to Noncontrolling Interest		(282)		(261)	(8.0)	%		(635)		(513)	(23.8)	%
Net Income Attributable to AT&T	$	1,281	$	3,713	(65.5)	%	$	5,891	$	7,809	(24.6)	%
Less: Preferred Stock Dividends		(52)		-	-	%		(84)		-	-	%
Net Income Attributable to Common Stock	$	1,229	$	3,713	(66.9)	%	$	5,807	$	7,809	(25.6)	%


Basic Earnings Per Share Attributable to Common Stock	$	0.17	$	0.51	(66.7)	%	$	0.81	$	1.06	(23.6)	%
Weighted Average Common Shares Outstanding (000,000)		7,145		7,323	(2.4)	%		7,166		7,318	(2.1)	%
Diluted Earnings Per Share Attributable to Common Stock	$	0.17	$	0.51	(66.7)	%	$	0.81	$	1.06	(23.6)	%
Weighted Average Common Shares Outstanding with Dilution (000,000)		7,170		7,353	(2.5)	%		7,192		7,347	(2.1)	%

AT&T Inc.
Financial Data


Consolidated Balance Sheets
Dollars in millions
Unaudited		Jun. 30,		Dec. 31,
		2020		2019
Assets
Current Assets
Cash and cash equivalents	$	16,941	$	12,130
Accounts receivable - net of related allowances for credit loss of $1,606 and $1,235		19,127		22,636
Prepaid expenses		1,439		1,631
Other current assets		19,048		18,364
Total current assets		56,555		54,761
Noncurrent Inventories and Theatrical Film and Television Production Costs		14,514		12,434
Property, Plant and Equipment – Net		128,945		130,128
Goodwill		143,651		146,241
Licenses – Net		98,763		97,907
Trademarks and Trade Names – Net		23,757		23,567
Distribution Networks – Net		14,704		15,345
Other Intangible Assets – Net		18,452		20,798
Investments in and Advances to Equity Affiliates		2,302		3,695
Operating Lease Right-of-Use Assets		24,692		24,039
Other Assets		21,563		22,754
Total Assets	$	547,898	$	551,669

Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	15,576	$	11,838
Accounts payable and accrued liabilities		41,881		45,956
Advanced billings and customer deposits		5,723		6,124
Accrued taxes		2,548		1,212
Dividends payable		3,741		3,781
Total current liabilities		69,469		68,911
Long-Term Debt		153,388		151,309
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		58,387		59,502
Postemployment benefit obligation		18,167		18,788
Operating lease liabilities		22,230		21,804
Other noncurrent liabilities		32,804		29,421
Total deferred credits and other noncurrent liabilities		131,588		129,515
Stockholders’ Equity
Preferred stock		-		-
Common stock		7,621		7,621
Additional paid-in capital		130,046		126,279
Retained earnings		56,045		57,936
Treasury stock		(17,945)		(13,085)
Accumulated other comprehensive income		129		5,470
Noncontrolling interest		17,557		17,713
Total stockholders’ equity		193,453		201,934
Total Liabilities and Stockholders' Equity	$	547,898	$	551,669

AT&T Inc.
Financial Data


Consolidated Statements of Cash Flows
Dollars in millions
Unaudited		Six-Month Period
			2020		2019
Operating Activities
Net income		$	6,526	$	8,322
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		14,507		14,307
	Amortization of film and television costs		3,985		5,199
	Undistributed earnings from investments in equity affiliates		64		76
	Provision for uncollectible accounts		1,199		1,216
	Deferred income tax expense (benefit)		653		1,080
	Net (gain) loss on assets, net of impairments		(705)		(905)
	Pension and postiretirement benefit expense (credit)		(1,495)		(808)
	Actuarial (gain) loss on pension and postretirement benefits		-		2,131
	Asset abandonments and impairments		2,442		-
Changes in operating assets and liabilities:
	Receivables		2,522		3,584
	Other current assets, inventories and theatrical film and television production costs		(5,592)		(5,422)
	Accounts payable and other accrued liabilities		(3,847)		(3,056)
	Equipment installment receivables and related sales		226		1,144
	Deferred customer contract acquisition and fulfillment costs		322		(614)
Postretirement claims and contributions			(228)		(424)
Other - net			346		(494)
Total adjustments			14,399		17,014
Net Cash Provided by Operating Activities			20,925		25,336

Investing Activities
Capital expenditures:
	Purchase of property and equipment		(9,372)		(10,542)
	Interest during construction		(60)		(112)
Acquisitions, net of cash acquired			(1,174)		(320)
Dispositions			347		3,593
(Purchases), sales and settlement of securities and investments, net			47		396
Advances to and investments in equity affiliates, net			(66)		(314)
Net Cash Used in Investing Activities			(10,278)		(7,299)

Financing Activities
Net change in short-term borrowings with original maturities of three months or less			498		119
Issuance of other short-term borrowings			8,440		3,067
Repayment of other short-term borrowings			(5,975)		(3,148)
Issuance of long-term debt			21,060		10,030
Repayment of long-term debt			(17,284)		(16,124)
Payment of vendor financing			(1,354)		(1,836)
Issuance of preferred stock			3,869		-
Purchase of treasury stock			(5,480)		(240)
Issuance of treasury stock			84		455
Dividends paid			(7,474)		(7,436)
Other			(2,295)		330
Net Cash Used in Financing Activities			(5,911)		(14,783)
Net increase (decrease) in cash and cash equivalents and restricted cash			4,736		3,254
Cash and cash equivalents and restricted cash beginning of year			12,295		5,400
Cash and Cash Equivalents and Restricted Cash End of Period		$	17,031	$	8,654

AT&T Inc.
Consolidated Supplementary Data


Supplementary Financial Data
Dollars in millions except per share amounts
Unaudited		Second Quarter				Percent		Six-Month Period					Percent
			2020		2019	Change			2020		2019		Change
Capital expenditures
	Purchase of property and equipment	$	4,434	$	5,421	(18.2)	%	$	9,372	$	10,542		(11.1)	%
	Interest during construction		32		51	(37.3)	%		60		112		(46.4)	%
Total Capital Expenditures		$	4,466	$	5,472	(18.4)	%	$	9,432	$	10,654		(11.5)	%

Dividends Declared per Common Share		$	0.52	$	0.51	2.0	%	$	1.04	$	1.02		2.0	%

End of Period Common Shares Outstanding (000,000)									7,125		7,305		(2.5)	%
Debt Ratio									46.6	%	46.8	%	(20)	BP
Total Employees									243,350		257,790		(5.6)	%


Supplementary Operating Data
Subscribers and connections in thousands
Unaudited								June 30,					Percent
									2020		2019		Change
Broadband Connections
	IP								14,548		14,860		(2.1)	%
	DSL								653		838		(22.1)	%
Total Broadband Connections									15,201		15,698		(3.2)	%

Voice Connections
	Network Access Lines								7,878		9,207		(14.4)	%
	U-verse VoIP Connections								4,058		4,766		(14.9)	%
Total Retail Voice Connections									11,936		13,973		(14.6)	%


		Second Quarter				Percent		Six-Month Period					Percent
			2020		2019	Change			2020		2019		Change
Broadband Net Additions
	IP		(79)		8	-			(111)		108		-	%
	DSL		(35)		(47)	25.5			(77)		(111)		30.6	%
Total Broadband Net Additions			(114)		(39)	-			(188)		(3)		-	%

COMMUNICATIONS SEGMENT

The Communications segment provides wireless and wireline telecom, video and broadband services to consumers located in the U.S. 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
			2020		2019	Change			2020		2019	Change
Segment Operating Revenues
	Mobility	$	17,149	$	17,292	(0.8)	%	$	34,551	$	34,655	(0.3)	%
	Entertainment Group		10,069		11,368	(11.4)	%		20,584		22,696	(9.3)	%
	Business Wireline		6,374		6,607	(3.5)	%		12,706		13,085	(2.9)	%
Total Segment Operating Revenues			33,592		35,267	(4.7)	%		67,841		70,436	(3.7)	%

Segment Operating Contribution
	Mobility		5,805		5,767	0.7	%		11,593		11,076	4.7	%
	Entertainment Group		1,030		1,514	(32.0)	%		2,365		2,992	(21.0)	%
	Business Wireline		1,277		1,390	(8.1)	%		2,357		2,614	(9.8)	%
Total Segment Operating Contribution		$	8,112	$	8,671	(6.4)	%	$	16,315	$	16,682	(2.2)	%

Mobility

Mobility provides nationwide wireless service and equipment.

Mobility Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change			2020		2019		Change
Operating Revenues
Service		$	13,669	$	13,824		(1.1)	%	$	27,637	$	27,453		0.7	%
Equipment			3,480		3,468		0.3	%		6,914		7,202		(4.0)	%
Total Operating Revenues			17,149		17,292		(0.8)	%		34,551		34,655		(0.3)	%

Operating Expenses
Operations and support			9,332		9,522		(2.0)	%		18,901		19,563		(3.4)	%
Depreciation and amortization			2,012		2,003		0.4	%		4,057		4,016		1.0	%
Total Operating Expenses			11,344		11,525		(1.6)	%		22,958		23,579		(2.6)	%
Operating Income			5,805		5,767		0.7	%		11,593		11,076		4.7	%
Equity in Net Income (Loss) of Affiliates			-		-		-	%		-		-		-	%
Operating Contribution		$	5,805	$	5,767		0.7	%	$	11,593	$	11,076		4.7	%

Operating Income Margin			33.9	%	33.4	%	50	BP		33.6	%	32.0	%	160	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									June 30,					Percent
										2020		2019		Change
Mobility Subscribers
Postpaid										74,919		75,478		(0.7)	%
Prepaid										18,008		17,434		3.3	%
Reseller										6,718		7,323		(8.3)	%
Connected Devices										71,762		58,387		22.9	%
Total Mobility Subscribers¹										171,407		158,622		8.1	%

		Second Quarter							Six-Month Period					Percent
			2020		2019					2020		2019		Change
Mobility Net Additions
Postpaid Phone Net Additions			(151)		74		-	%		12		153		(92.2)	%
Total Phone Net Additions			(16)		357		-	%		104		525		(80.2)	%

Postpaid			(154)		(146)		(5.5)	%		(127)		(353)		64.0	%
Prepaid			165		341		(51.6)	%		120		442		(72.9)	%
Reseller			(58)		(204)		71.6	%		(248)		(446)		44.4	%
Connected Devices			2,255		3,959		(43.0)	%		5,773		7,047		(18.1)	%
Total Mobility Net Additions¹			2,208		3,950		(44.1)	%		5,518		6,690		(17.5)	%

Postpaid Churn¹			1.05	%	1.07	%	(2)	BP		1.06	%	1.12	%	(6)	BP
Postpaid Phone-Only Churn¹			0.84	%	0.86	%	(2)	BP		0.85	%	0.89	%	(4)	BP
¹	The second quarter and six-month period ended June 30, 2020, excludes 466 (338 phone) and 521 (382 phone) customers, respectively, who
	we have agreed not to terminate service under the FCC’s “Keep Americans Connected Pledge.”

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
			2020		2019		Change			2020		2019		Change
Operating Revenues
Video entertainment		$	6,976	$	8,035		(13.2)	%	$	14,371	$	16,109		(10.8)	%
High-speed internet			2,092		2,109		(0.8)	%		4,201		4,179		0.5	%
Legacy voice and data services			560		658		(14.9)	%		1,141		1,341		(14.9)	%
Other service and equipment			441		566		(22.1)	%		871		1,067		(18.4)	%
Total Operating Revenues			10,069		11,368		(11.4)	%		20,584		22,696		(9.3)	%

Operating Expenses
Operations and support			7,730		8,515		(9.2)	%		15,621		17,042		(8.3)	%
Depreciation and amortization			1,309		1,339		(2.2)	%		2,598		2,662		(2.4)	%
Total Operating Expenses			9,039		9,854		(8.3)	%		18,219		19,704		(7.5)	%
Operating Income			1,030		1,514		(32.0)	%		2,365		2,992		(21.0)	%
Equity in Net Income (Loss) of Affiliates			-		-		-	%		-		-		-	%
Operating Contribution		$	1,030	$	1,514		(32.0)	%	$	2,365	$	2,992		(21.0)	%

Operating Income Margin			10.2	%	13.3	%	(310)	BP		11.5	%	13.2	%	(170)	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									June 30,					Percent
										2020		2019		Change
Video Connections
Premium TV										17,690		21,581		(18.0)	%
AT&T TV Now										720		1,340		(46.3)	%
Total Video Connections										18,410		22,921		(19.7)	%

Total Broadband Connections										13,944		14,420		(3.3)	%
Fiber Broadband Connections										4,321		3,378		27.9	%

Voice Connections
Retail Consumer Switched Access Lines										3,096		3,630		(14.7)	%
U-verse Consumer VoIP Connections										3,480		4,211		(17.4)	%
Total Retail Consumer Voice Connections¹										6,576		7,841		(16.1)	%


		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change			2020		2019		Change
Video Net Additions
Premium TV¹			(886)		(778)		(13.9)	%		(1,783)		(1,322)		(34.9)	%
AT&T TV Now			(68)		(168)		59.5	%		(206)		(251)		17.9	%
Total Video Net Additions¹			(954)		(946)		(0.8)	%		(1,989)		(1,573)		(26.4)	%

Broadband Net Additions
Net Broadband Net Additions¹			(102)		(34)		-	%		(175)		11		-	%
Fiber Broadband Net Additions			225		318		(29.2)	%		434		615		(29.4)	%

¹	The second quarter and six-month period ended June 30, 2020, excludes 91 and 157 premium TV and 159 and 194 broadband connections,
	respectively, who we have agreed not to terminate service under the FCC's "Keep Americans Connected Pledge."

Business Wireline

Business Wireline unit provides advanced IP-based services, as well as traditional data services to business customers.

Business Wireline Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change			2020		2019		Change
Operating Revenues
	Strategic and managed services	$	3,943	$	3,834		2.8	%	$	7,822	$	7,613		2.7	%
	Legacy voice and data services		2,067		2,324		(11.1)	%		4,196		4,721		(11.1)	%
	Other service and equipment		364		449		(18.9)	%		688		751		(8.4)	%
Total Operating Revenues			6,374		6,607		(3.5)	%		12,706		13,085		(2.9)	%

Operating Expenses
Operations and support			3,779		3,975		(4.9)	%		7,730		8,007		(3.5)	%
Depreciation and amortization			1,318		1,242		6.1	%		2,619		2,464		6.3	%
Total Operating Expenses			5,097		5,217		(2.3)	%		10,349		10,471		(1.2)	%
Operating Income			1,277		1,390		(8.1)	%		2,357		2,614		(9.8)	%
Equity in Net Income (Loss) of Affiliates			-		-		-	%		-		-		-	%
Operating Contribution		$	1,277	$	1,390		(8.1)	%	$	2,357	$	2,614		(9.8)	%

Operating Income Margin			20.0	%	21.0	%	(100)	BP		18.6	%	20.0	%	(140)	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. Results have been recast to conform to the current period's classification of consumer and business wireless subscribers.



Business Solutions Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change			2020		2019		Change
Operating Revenues
	Wireless service	$	1,884	$	1,881		0.2	%	$	3,833	$	3,658		4.8	%
	Strategic and managed services		3,943		3,834		2.8	%		7,822		7,613		2.7	%
	Legacy voice and data services		2,067		2,324		(11.1)	%		4,196		4,721		(11.1)	%
	Other service and equipment		364		449		(18.9)	%		688		751		(8.4)	%
	Wireless equipment		585		617		(5.2)	%		1,295		1,207		7.3	%
Total Operating Revenues			8,843		9,105		(2.9)	%		17,834		17,950		(0.6)	%

Operating Expenses
Operations and support			5,424		5,512		(1.6)	%		11,134		11,126		0.1	%
Depreciation and amortization			1,637		1,545		6.0	%		3,262		3,070		6.3	%
Total Operating Expenses			7,061		7,057		0.1	%		14,396		14,196		1.4	%
Operating Income			1,782		2,048		(13.0)	%		3,438		3,754		(8.4)	%
Equity in Net Income (Loss) of Affiliates			-		-		-	%		-		-		-	%
Operating Contribution		$	1,782	$	2,048		(13.0)	%	$	3,438	$	3,754		(8.4)	%

Operating Income Margin			20.2	%	22.5	%	(230)	BP		19.3	%	20.9	%	(160)	BP

WARNERMEDIA SEGMENT

The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content in various physical and digital formats globally, and also includes our Xandr business, which utilizes data analytics to provide targeted advertising services. Results from Turner, Home Box Office and Warner Bros. businesses are combined with AT&T's Regional Sports Network (RSN), Otter Media Holdings and Xandr in the WarnerMedia segment. All previously reported periods have been recast to include Xandr, which was a separate reportable segment prior to the second quarter of 2020.

Segment Results
Dollars in millions
Unaudited		Second Quarter				Percent		Six-Month Period				Percent
			2020		2019	Change			2020		2019	Change
Segment Operating Revenues
	Turner	$	2,988	$	3,410	(12.4)	%	$	6,150	$	6,853	(10.3)	%
	HBO		1,627		1,716	(5.2)	%		3,124		3,226	(3.2)	%
	Warner Bros.		3,256		3,389	(3.9)	%		6,496		6,907	(6.0)	%
	Eliminations and other		(1,057)		320	-	%		(1,108)		654	-	%
Total Segment Operating Revenues			6,814		8,835	(22.9)	%		14,662		17,640	(16.9)	%

Cost of revenues
	Turner		965		1,796	(46.3)	%		2,285		3,476	(34.3)	%
	HBO		1,095		839	30.5	%		1,911		1,509	26.6	%
	Warner Bros.		2,233		2,492	(10.4)	%		4,579		4,922	(7.0)	%
Selling, general and administrative			1,324		1,344	(1.5)	%		2,788		2,716	2.7	%
Eliminations and other			(883)		(35)	-	%		(1,142)		(34)	-	%
Depreciation and amortization			167		104	60.6	%		330		260	26.9	%
Total Operating Expenses			4,901		6,540	(25.1)	%		10,751		12,849	(16.3)	%
Operating Income			1,913		2,295	(16.6)	%		3,911		4,791	(18.4)	%
Equity in Net Income of Affiliates			4		55	(92.7)	%		19		122	(84.4)	%
Total Segment Operating Contribution		$	1,917	$	2,350	(18.4)	%	$	3,930	$	4,913	(20.0)	%

Turner
Turner creates and programs branded news, entertainment, sports and kids multi-platform content that is sold to various distribution affiliates. Turner also sells advertising on its networks and digital properties.


Turner Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change			2020		2019		Change
Operating Revenues
	Subscription	$	1,804	$	1,943		(7.2)	%	$	3,853	$	3,908		(1.4)	%
	Advertising		796		1,266		(37.1)	%		1,753		2,527		(30.6)	%
	Content and other		388		201		93.0	%		544		418		30.1	%
Total Operating Revenues			2,988		3,410		(12.4)	%		6,150		6,853		(10.3)	%

Operating Expenses
	Cost of revenues		965		1,796		(46.3)	%		2,285		3,476		(34.3)	%
	Selling, general and administrative		382		421		(9.3)	%		772		877		(12.0)	%
	Depreciation and amortization		69		39		76.9	%		138		99		39.4	%
Total Operating Expenses			1,416		2,256		(37.2)	%		3,195		4,452		(28.2)	%
Operating Income			1,572		1,154		36.2	%		2,955		2,401		23.1	%
Equity in Net Income of Affiliates			-		11		-	%		6		36		(83.3)	%
Operating Contribution		$	1,572	$	1,165		34.9	%	$	2,961	$	2,437		21.5	%

Operating Income Margin			52.6	%	33.8	%	1,880	BP		48.0	%	35.0	%	1,300	BP

Home Box Office

Home Box Office consists of premium pay television and OTT services domestically and premium pay, basic tier television and OTT services internationally, as well as content licensing and home entertainment.


Home Box Office Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change			2020		2019		Change
Operating Revenues
	Subscription	$	1,441	$	1,516		(4.9)	%	$	2,779	$	2,850		(2.5)	%
	Content and other		186		200		(7.0)	%		345		376		(8.2)	%
Total Operating Revenues			1,627		1,716		(5.2)	%		3,124		3,226		(3.2)	%

Operating Expenses
	Cost of revenues		1,095		839		30.5	%		1,911		1,509		26.6	%
	Selling, general and administrative		394		292		34.9	%		631		543		16.2	%
	Depreciation and amortization		25		12		-	%		46		34		35.3	%
Total Operating Expenses			1,514		1,143		32.5	%		2,588		2,086		24.1	%
Operating Income			113		573		(80.3)	%		536		1,140		(53.0)	%
Equity in Net Income (Loss) of Affiliates			(5)		15		-	%		15		30		(50.0)	%
Operating Contribution		$	108	$	588		(81.6)	%	$	551	$	1,170		(52.9)	%

Operating Income Margin			6.9	%	33.4	%	(2,650)	BP		17.2	%	35.3	%	(1,810)	BP

Warner Bros.

Warner Bros. consists of the production, distribution and licensing of television programming and feature films, the distribution of home entertainment products and the production and distribution of games.


Warner Bros. Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change			2020		2019		Change
Operating Revenues
	Theatrical product	$	1,029	$	1,527		(32.6)	%	$	2,135	$	3,033		(29.6)	%
	Television product		1,876		1,310		43.2	%		3,645		2,923		24.7	%
	Video games and other		351		552		(36.4)	%		716		951		(24.7)	%
Total Operating Revenues			3,256		3,389		(3.9)	%		6,496		6,907		(6.0)	%

Operating Expenses
	Cost of revenues		2,233		2,492		(10.4)	%		4,579		4,922		(7.0)	%
	Selling, general and administrative		350		426		(17.8)	%		954		915		4.3	%
	Depreciation and amortization		40		31		29.0	%		81		83		(2.4)	%
Total Operating Expenses			2,623		2,949		(11.1)	%		5,614		5,920		(5.2)	%
Operating Income			633		440		43.9	%		882		987		(10.6)	%
Equity in Net Income (Loss) of Affiliates			(19)		-		-	%		(27)		6		-	%
Operating Contribution		$	614	$	440		39.5	%	$	855	$	993		(13.9)	%

Operating Income Margin			19.4	%	13.0	%	640	BP		13.6	%	14.3	%	(70)	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
			2020		2019	Change			2020		2019	Change
Segment Operating Revenues
	Vrio	$	752	$	1,032	(27.1)	%	$	1,639	$	2,099	(21.9)	%
	Mexico		480		725	(33.8)	%		1,183		1,376	(14.0)	%
Total Segment Operating Revenues			1,232		1,757	(29.9)	%		2,822		3,475	(18.8)	%

Segment Operating Contribution
	Vrio		(28)		(2)	-	%		(67)		30	-	%
	Mexico		(173)		(207)	16.4	%		(318)		(412)	22.8	%
Total Segment Operating Contribution		$	(201)	$	(209)	3.8	%	$	(385)	$	(382)	(0.8)	%

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
			2020		2019		Change		2020		2019			Change
Operating Revenues		$	752	$	1,032		(27.1)	%	$	1,639	$	2,099		(21.9)	%

Operating Expenses
Operations and support			661		881		(25.0)	%		1,444		1,747		(17.3)	%
Depreciation and amortization			127		165		(23.0)	%		274		334		(18.0)	%
Total Operating Expenses			788		1,046		(24.7)	%		1,718		2,081		(17.4)	%
Operating Income			(36)		(14)		-	%		(79)		18		-	%
Equity in Net Income of Affiliates			8		12		(33.3)	%		12		12		-	%
Operating Contribution		$	(28)	$	(2)		-	%	$	(67)	$	30		-	%

Operating Income Margin			(4.8)	%	(1.4)	%	(340)	BP		(4.8)	%	0.9	%	(570)	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									June 30,					Percent
									2020		2019			Change
Vrio Video Subscribers										10,664		13,473		(20.8)	%


		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change		2020		2019			Change
Vrio Video Net Additions¹			(312)		(111)		-	%		(426)		(143)		-	%

¹	The second-quarter and six-month period ended June 30, 2020, exclude the impact of 2.2 million subscriber disconnections resulting
	from the closure of our DIRECTV operations in Venezuela.

Mexico

Mexico provides wireless services and equipment to customers in Mexico.

Mexico Results
Dollars in millions
Unaudited		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change		2020		2019			Change
Operating Revenues
Wireless service		$	345	$	479		(28.0)	%	$	812	$	921		(11.8)	%
Wireless equipment			135		246		(45.1)	%		371		455		(18.5)	%
Total Operating Revenues			480		725		(33.8)	%		1,183		1,376		(14.0)	%

Operating Expenses
Operations and support			538		813		(33.8)	%		1,252		1,538		(18.6)	%
Depreciation and amortization			115		119		(3.4)	%		249		250		(0.4)	%
Total Operating Expenses			653		932		(29.9)	%		1,501		1,788		(16.1)	%
Operating Income (Loss)			(173)		(207)		16.4	%		(318)		(412)		22.8	%
Equity in Net Income of Affiliates			-		-		-	%		-		-		-	%
Operating Contribution		$	(173)	$	(207)		16.4	%	$	(318)	$	(412)		22.8	%

Operating Income Margin			(36.0)	%	(28.6)	%	(740)	BP		(26.9)	%	(29.9)	%	300	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									June 30,					Percent
									2020		2019			Change
Mexico Wireless Subscribers
Postpaid										4,771		5,489		(13.1)	%
Prepaid										12,777		12,180		4.9	%
Reseller										425		352		20.7	%
Total Mexico Wireless Subscribers										17,973		18,021		(0.3)	%

		Second Quarter					Percent		Six-Month Period					Percent
			2020		2019		Change		2020		2019			Change
Mexico Wireless Net Additions¹
Postpaid			(191)		(153)		(24.8)	%		(332)		(222)		(49.5)	%
Prepaid			(915)		401		-	%		(807)		515		-	%
Reseller			21		51		(58.8)	%		53		99		(46.5)	%
Total Mexico Wireless Net Additions			(1,085)		299		-	%		(1,086)		392		-	%

¹	The second-quarter and six-month period ended June 30, 2020, exclude the impact of 101 subscriber disconnections resulting from
	conforming our policy on reporting of fixed wireless resellers.

Supplemental AT&T Advertising Revenues

As a supplemental presentation, 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.

Advertising Revenues
Dollars in millions
Unaudited		Second Quarter				Percent		Six-Month Period				Percent
			2020		2019	Change			2020		2019	Change
Operating Revenues
	Turner	$	796	$	1,266	(37.1)	%	$	1,753	$	2,527	(30.6)	%
	Entertainment Group		294		399	(26.3)	%		707		749	(5.6)	%
	Xandr		362		485	(25.4)	%		851		911	(6.6)	%
	Other		75		90	(16.7)	%		173		175	(1.1)	%
	Eliminations		(294)		(399)	26.3	%		(707)		(749)	5.6	%
Total Advertising Revenues		$	1,233	$	1,841	(33.0)	%	$	2,777	$	3,613	(23.1)	%

SUPPLEMENTAL SEGMENT RECONCILIATION

Three Months Ended

Dollars in millions

Unaudited

June 30, 2020

Revenues

Operations and Support Expenses

EBITDA

Depreciation and Amortization

Operating Income (Loss)

Equity in Net Income (Loss) of Affiliates

Segment Contribution

Communications

Mobility

17,149

9,332

7,817

2,012

5,805

Entertainment Group

10,069

7,730

2,339

1,309

1,030

Business Wireline

6,374

3,779

2,595

1,318

1,277

Total Communications

33,592

20,841

12,751

4,639

8,112

WarnerMedia

Turner

2,988

1,347

1,641

1,572

Home Box Office

1,627

1,489

138

113

(5)

108

Warner Bros.

3,256

2,583

673

633

(19)

614

Eliminations and other

(1,057)

(685)

(372)

(405)

(377)

Total WarnerMedia

6,814

4,734

2,080

167

1,913

1,917

Latin America

Vrio

752

661

127

(36)

(28)

Mexico

480

538

(58)

115

(173)

Total Latin America

1,232

1,199

242

(209)

(201)

Segment Total

41,638

26,774

14,864

5,048

9,816

9,828

Corporate and Other

Corporate

437

933

(496)

(589)

Acquisition-related items

211

(211)

2,145

(2,356)

Certain significant items

3,084

(3,084)

Eliminations and consolidations

(1,125)

(869)

(256)

(1)

(255)

AT&T Inc.

40,950

30,133

10,817

7,285

3,532


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	$	17,292	$	9,522	$	7,770	$	2,003	$	5,767	$	-	$	5,767
Entertainment Group		11,368		8,515		2,853		1,339		1,514		-		1,514
Business Wireline		6,607		3,975		2,632		1,242		1,390		-		1,390
Total Communications		35,267		22,012		13,255		4,584		8,671		-		8,671
WarnerMedia
Turner		3,410		2,217		1,193		39		1,154		11		1,165
Home Box Office		1,716		1,131		585		12		573		15		588
Warner Bros.		3,389		2,918		471		31		440		-		440
Eliminations and other		320		170		150		22		128		29		157
Total WarnerMedia		8,835		6,436		2,399		104		2,295		55		2,350
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)
Segment Total		45,859		30,142		15,717		4,972		10,745	$	67	$	10,812
Corporate and Other
Corporate		450		765		(315)		170		(485)
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

SUPPLEMENTAL SEGMENT RECONCILIATION

Six Months Ended

Dollars in millions

Unaudited

June 30, 2020

Revenues

Operations and Support Expenses

EBITDA

Depreciation and Amortization

Operating Income (Loss)

Equity in Net Income (Loss) of Affiliates

Segment Contribution

Communications

Mobility

34,551

18,901

15,650

4,057

11,593

Entertainment Group

20,584

15,621

4,963

2,598

2,365

Business Wireline

12,706

7,730

4,976

2,619

2,357

Total Communications

67,841

42,252

25,589

9,274

16,315

WarnerMedia

Turner

6,150

3,057

3,093

138

2,955

2,961

Home Box Office

3,124

2,542

582

536

551

Warner Bros.

6,496

5,533

963

882

(27)

855

Eliminations and other

(1,108)

(711)

(397)

(462)

(437)

Total WarnerMedia

14,662

10,421

4,241

330

3,911

3,930

Latin America

Vrio

1,639

1,444

195

274

(79)

(67)

Mexico

1,183

1,252

(69)

249

(318)

Total Latin America

2,822

2,696

126

523

(397)

(385)

Segment Total

85,325

55,369

29,956

10,127

19,829

19,860

Corporate and Other

Corporate

825

1,807

(982)

180

(1,162)

Acquisition-related items

393

(393)

4,201

(4,594)

Certain significant items

2,426

(2,426)

Eliminations and consolidations

(2,421)

(1,791)

(630)

(1)

(629)

AT&T Inc.

83,729

58,204

25,525

14,507

11,018

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	$	34,655	$	19,563	$	15,092	$	4,016	$	11,076	$	-	$	11,076
Entertainment Group		22,696		17,042		5,654		2,662		2,992		-		2,992
Business Wireline		13,085		8,007		5,078		2,464		2,614		-		2,614
Total Communications		70,436		44,612		25,824		9,142		16,682		-		16,682
WarnerMedia
Turner		6,853		4,353		2,500		99		2,401		36		2,437
Home Box Office		3,226		2,052		1,174		34		1,140		30		1,170
Warner Bros.		6,907		5,837		1,070		83		987		6		993
Eliminations and other		654		347		307		44		263		50		313
Total WarnerMedia		17,640		12,589		5,051		260		4,791		122		4,913
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)
Segment Total		91,551		60,486		31,065		9,986		21,079	$	134	$	21,213
Corporate and Other
Corporate		883		1,426		(543)		374		(917)
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

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