UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549
 

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934


Date of report (Date of earliest event reported) October 24, 2018

AT&T INC.
(Exact Name of Registrant as Specified in Charter)


Delaware
1-8610
43-1301883
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)

 
 208 S. Akard St., Dallas, Texas
75202
 
 (Address of Principal Executive Offices)
(Zip Code)

Registrant’s telephone number, including area code (210) 821-4105


__________________________________
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Item 8.01  Other Events.

Throughout this document, AT&T Inc. is referred to as “we” or “AT&T.” AT&T is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications, media and technology industries.

Overview
We announced on October 24, 2018 that third-quarter 2018 net income attributable to AT&T totaled $4.7 billion, or $0.65 per diluted share, reflecting our acquisition of Time Warner Inc. (Time Warner), favorable impacts from U.S. corporate tax reform and new revenue accounting rules, compared to $3.0 billion, or $0.49 per diluted share in the third quarter of 2017. Third-quarter 2018 revenues were $45.7 billion, up 15.3 percent from the third-quarter 2017. Third-quarter revenues reflect increased revenues primarily from our acquisition of Time Warner and higher equipment revenues. Revenue increases were partially offset by our adoption of a new revenue accounting standard, including the netting of approximately $920 million Universal Service Fund (USF) fees in the third quarter of 2018, and continued declines in video and legacy services. Compared with results for the third quarter of 2017, current year operating expenses were $38.5 billion, up 13.6 percent; operating income was $7.3 billion, up 25.2 percent; and AT&T’s operating income margin was 15.9 percent, compared to 14.6 percent. Third-quarter 2018 cash from operating activities was $12.3 billion, up $1.5 billion when compared to the third quarter of 2017, due to contributions from acquired businesses.

We reported a net gain of 4.3 million North American wireless subscribers in the third quarter of 2018, of which 3.4 million were domestic. At September 30, 2018, our North American wireless customer base was approximately 167.6 million compared to 152.2 million in the prior year, and our domestic wireless subscribers totaled 150.3 million compared to 138.4 million. During the third quarter, net adds in North America were as follows:
●
Branded net adds (combined postpaid and prepaid) were 1.2 million, of which 338,000 were domestic.
o
Prepaid subscriber net adds were 1.4 million, of which 570,000 were domestic.
o
Postpaid subscriber net adds were a loss of 159,000, of which 232,000 were domestic.
●
Total domestic postpaid tablet and computing device net adds were a loss of 420,000.
●
Reseller net adds were a loss of 402,000, with 434,000 in the U.S.
●
Connected device net adds were 3.5 million, 2.2 million of which were primarily attributable to wholesale connected cars.

We offer subscribers the choice to purchase devices on installment (AT&T Next) or to bring their own device (BYOD). During the third quarter of 2018, we sold 4.0 million smartphones under our AT&T Next program and had BYOD gross adds of 545,000. Sales under our equipment installment programs represented nearly 80 percent of all postpaid smartphone gross adds and upgrades, consistent with the prior year. At September 30, 2018, about 52 percent of the postpaid smartphone base is on AT&T Next, consistent with the prior year.

At September 30, 2018, we had 38.8 million video subscribers (including 1.9 million DIRECTV NOW) compared with 38.6 million at September 30, 2017. Including the impact of gains from our over-the-top (OTT) video service, DIRECTV NOW, total video subscribers decreased by 369,000 in the third quarter of 2018, of which 296,000 were in the U.S. (including Entertainment Group and Business Wireline subscribers).

Our total broadband connections were 15.7 million at September 30, 2018, and 15.7 million at September 30, 2017. During the third quarter, we added 35,000 IP broadband subscribers, for a total of 14.7 million at September 30, 2018. Total broadband net adds were a loss of 25,000 in the quarter.

At September 30, 2018, our total switched access lines were 10.4 million compared with 12.2 million at September 30, 2017. The number of U-verse voice connections (which use VoIP technology and therefore are not included in the access line total) decreased by 175,000 in the quarter, totaling 5.3 million at September 30, 2018, compared to 5.8 million at September 30, 2017.

Segment Summary
During the third-quarter of 2018, we announced that, following our June 14, 2018 acquisition of Time Warner and effective for the quarter ended September 30, 2018, we revised our operating segments to align with the new management structure and organizational responsibilities. Our new reportable segments are: Communications, WarnerMedia, Latin America and Xandr.

We analyze our segments based on segment contribution, which consists of operating income, excluding acquisition-related costs and other significant items, and equity in net income (loss) of affiliates for investments managed within each segment.

Communications
Our Communications segment consists of our Mobility, Entertainment Group and Business Wireline business units. Third-quarter 2018 operating revenues were $36.2 billion, down 2.4 percent versus third-quarter 2017, with segment operating contribution of $8.2 billion, up 1.4% versus the year-ago quarter. Our adoption of new revenue accounting rules reduced third-quarter 2018 revenues by $836 million and increased operating contribution by $584 million. The Communications operating income margin was 22.6 percent, compared to 21.7 percent in the year-earlier quarter.

Mobility
Mobility revenues for the third quarter of 2018 were $17.9 billion, up 3.3 percent versus the third quarter of 2017, driven by device sales that were partially offset by revenue declines resulting from our election to net USF fees. Mobility operating expenses totaled $12.3 billion, up 2.5 percent versus the third quarter of 2017. The increase was largely driven equipment expense associated with higher device sales, partially offset by our adoption of new accounting rules that resulted in the netting of USF fees and commission deferrals. Mobility’s operating income margin was 31.2 percent compared to 30.7 percent in the year-ago quarter.

For the quarter ended September 30, 2018, postpaid phone-only ARPU decreased 5.1 percent versus the year-earlier quarter, primarily due to new revenue accounting rules.

Postpaid phone only churn was 0.93 percent, compared to 0.84 percent in the third quarter of 2017. Total postpaid churn was 1.17 percent, compared to 1.06 percent in the year-ago quarter.

Entertainment Group
Entertainment Group (Entertainment) revenues for the third quarter of 2018 were $11.6 billion, down 7.0 percent versus the year-ago quarter reflecting continued pressure in video revenues from declines in linear video subscribers and the revenue impact of a significant pay-per-view event in the prior year. Our adoption of the new revenue accounting standard, including changes in our USF policy, also pressured revenues in the third quarter of 2018. Entertainment operating expenses totaled $10.5 billion, down 6.2 percent versus the third quarter of 2017. The decrease was largely driven by commission deferrals resulting from new accounting rules, cost initiatives and lower volumes that were partially offset by content-cost increases and an additional week of NFL SUNDAY TICKET. The Entertainment operating income margin was 9.5 percent compared to 10.3 percent in the year-earlier quarter.

At September 30, 2018, Entertainment revenue connections included:
●
Approximately 25.2 million video connections (including 1.9 million DIRECTV NOW subscribers) at September 30, 2018 compared to 25.1 million at September 30, 2017. During the third quarter of 2018, including the impact of gains from DIRECTV NOW, total video subscribers decreased 297,000. DIRECTV NOW subscribers included approximately 46,000 on free or substantially free trials. At September 30, 2018 and 2017, about 84 percent of traditional video subscribers are on the satellite platform.
●
Approximately 14.4 million broadband connections at September 30, 2018 compared to 14.3 million at September 30, 2017. During the third quarter, we added 31,000 IP broadband subscribers, for a total of 13.7 million at September 30, 2018. Total broadband subscribers decreased 14,000 in the quarter.
●
Approximately 8.9 million wired voice connections at September 30, 2018 compared to 10.3 million at September 30, 2017. Voice connections include switched access lines and VoIP connections.
Business Wireline
Business Wireline (Business) revenues for the third quarter of 2018 were $6.7 billion, down 7.9 percent versus the year-ago quarter reflecting continued declines in legacy service revenues, partially offset by growth in strategic services. Business operating expenses totaled $5.2 billion, down 10.3 percent versus the third quarter of 2017. The decrease was largely driven by our adoption of new accounting rules, which included our policy election to record USF fees on a net basis, and cost efficiencies. The Business operating income margin was 22.0 percent compared to 20.0 percent in the year-earlier quarter.

During the third quarter of 2018, we added 5,000 high-speed internet business subscribers, bringing total business IP broadband to 1.0 million subscribers. Total business broadband had a loss of 11,000 subscribers in the quarter.

WarnerMedia
Our WarnerMedia segment consists of our Turner, Home Box Office and Warner Bros. business units. Third-quarter 2018 operating revenues were $8.2 billion, with segment operating contribution of $2.5 billion and an operating income margin of 31.3 percent. Our WarnerMedia segment does not include results from Time Warner operations for the periods prior to our June 14, 2018 acquisition.

Turner
Turner is comprised of the WarnerMedia businesses managed by Turner as well as our Regional Sports Networks (RSN), which represents the 2017 results reported in this business unit.

Turner revenues for the third quarter of 2018 were $3.0 billion, compared to $107 million in the third quarter of 2017. Revenues during the quarter included $1.9 billion of subscription, $944 million of advertising and $189 million of content and other revenues. Turner operating expenses totaled $1.5 billion, compared to $98 million in the third quarter of 2017. Turner’s operating income margin was 48.3 percent compared to 8.4 percent in the year-ago quarter. The increases were predominantly due to our June 2018 acquisition of Time Warner.

Home Box Office (HBO)
HBO revenues for the third quarter of 2018 were $1.6 billion and included $1.5 billion of subscription and $127 million of content and other revenues. HBO operating expenses totaled $1.0 billion and the operating income margin was 38.2 percent. All increases were due to our June 2018 acquisition of Time Warner.

Warner Bros.
Warner Bros. revenues for the third quarter of 2018 were $3.7 billion and included revenues of $1.7 billion from theatrical product, $1.6 billion from television product and $435 million from video games and other. Warner Bros. operating expenses totaled $3.1 billion, and the operating income margin was 15.5 percent. All increases were due to our June 2018 acquisition of Time Warner.

Latin America
Our Latin America segment consists of our Vrio and Mexico business units and is subject to foreign currency fluctuations. Third-quarter 2018 operating revenues were $1.8 billion, down 12.7 percent versus the prior year, with segment operating contribution of $(201) million, down 60.8% versus third-quarter 2017. The Latin America operating income margin was (11.5) percent, compared to (6.8) percent in the year-earlier quarter.

Vrio
Video service revenues were $1.1 billion, down 19.1 percent versus the prior year, primarily resulting from foreign exchange pressure offset by pricing increases driven by macroeconomic conditions. Operating expenses were $1.0 billion, down 18.4 percent and Vrio’s operating income margin was 5.2 percent, compared to 6.0 percent in the year-earlier quarter.

We had approximately 13.6 million Latin America video connections at September 30, 2018 compared to 13.5 million at September 30, 2017. During the third quarter of 2018, video net adds were a loss of 73,000.

Mexico
Wireless revenues were $731 million, down 0.7 percent when compared to the third quarter of 2017. Decreased revenues were largely due to competitive pricing, the shutdown of a wholesale business in the fourth-quarter of 2017 and our adoption of the new revenue accounting standard, partially offset by gains in equipment revenues. Operating expenses were $1.0 billion, up 4.0 percent and Mexico’s operating income margin was (36.5) percent, compared to (30.4) percent in the year-earlier quarter.

We had approximately 17.3 million Mexican wireless subscribers at September 30, 2018 compared to 13.8 million at September 30, 2017. During the third quarter of 2018, we had branded net adds of 875,000 (prepaid net adds were 802,000 and postpaid net adds were 73,000).

Xandr
Our Xandr segment provides advertising services utilizing 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. Third-quarter 2018 operating revenues were $445 million, up 33.6 percent versus the prior year, reflecting the acquisition of AppNexus. Xandr segment operating contribution was $333 million, up 13.3% versus third-quarter 2017. The Xandr segment operating income margin was 74.8 percent, compared to 88.3 percent in the year-earlier quarter.

Supplemental Discussions
As a supplemental discussion of our operating results, for comparison purposes, we are providing (1) our AT&T Business Solutions results which include both wireless and wireline operations and (2) a combined view of reported advertising revenues across all segments of AT&T. A reconciliation of the non-GAAP numbers in this supplemental discussion is attached as exhibit 99.2 hereto.

AT&T Business Solutions
Revenues from AT&T Business Solutions for the third quarter of 2018 were $9.2 billion, down 4.9 percent versus the year-ago quarter driven by our adoption of a new revenue accounting standard, which included changes in our USF policy, and declines in our legacy services. Partially offsetting the decreases were higher wireless revenues and growth in strategic services. Operating expenses totaled $7.1 billion, down 6.1 percent versus the third quarter of 2017, largely due to commission deferrals resulting from new accounting rules and increased cost efficiencies, partially offset by wireless sales costs. AT&T Business Solutions operating income margin was 22.6 percent, compared to 21.6 percent in the year-earlier quarter.

AT&T Total Advertising Revenues
Total AT&T Advertising revenues for the third quarter of 2018 were $1.5 billion compared to $389 million in the year-ago quarter, with the increase primarily driven by our acquisition of Time Warner, primarily from Turner.

Supplemental Segment Results
As a supplemental presentation of our operating results, we are providing certain segment and business unit results under the comparative historical accounting method prior to our adoption of Financial Accounting Standards Board Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” as modified (ASC 606), which is included in Exhibit 99.1 hereto.


CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

Information set forth in this filing contains financial estimates and other forward-looking statements that are subject to risks and uncertainties. A discussion of factors that may affect future results is contained in AT&T’s filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this filing based on new information or otherwise.

Item 9.01 Financial Statements and Exhibits.

The following exhibits are filed as part of this report:

(d)   Exhibits

99.1  AT&T Inc. selected financial statements and operating data.

99.2  Discussion and reconciliation of non-GAAP measures.





Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
AT&T INC.
   
   
   
Date: October 24, 2018
By:/s/Debra L. Dial                                   .
  Debra L. Dial
Senior Vice President and Controller
  
   


 

AT&T Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income

Dollars in millions except per share amounts

 

 

 

 

 

 

 

Unaudited

Third Quarter

 

 

Nine-Month Period

 

 

 

 

2018

 

2017

As Adjusted

 

Percent

Change

 

 

2018

 

2017

As Adjusted

 

Percent

Change

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service

$

41,297

$

36,378

 

13.5

%

 

$

109,849

$

109,372

 

0.4

%

Equipment

 

4,442

 

3,290

 

35.0

%

 

 

12,914

 

9,498

 

36.0

%

    Total Operating Revenues

 

45,739

 

39,668

 

15.3

%

 

 

122,763

 

118,870

 

3.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equipment

 

4,828

 

4,191

 

15.2

%

 

 

14,053

 

12,177

 

15.4

%

Broadcast, programming and operations

 

7,227

 

5,284

 

36.8

%

 

 

17,842

 

15,156

 

17.7

%

Other cost of revenues (exclusive of depreciation

  and amortization shown separately below)

 

8,651

 

9,694

 

(10.8)

%

 

 

24,215

 

28,551

 

(15.2)

%

   Selling, general and administrative

 

9,598

 

8,650

 

11.0

%

 

 

26,179

 

25,981

 

0.8

%

   Depreciation and amortization

 

8,166

 

6,042

 

35.2

%

 

 

20,538

 

18,316

 

12.1

%

    Total Operating Expenses

 

38,470

 

33,861

 

13.6

%

 

 

102,827

 

100,181

 

2.6

%

Operating Income

 

7,269

 

5,807

 

25.2

%

 

 

19,936

 

18,689

 

6.7

%

Interest Expense

 

(2,051)

 

(1,686)

 

21.6

%

 

 

(5,845)

 

(4,374)

 

33.6

%

Equity in Net Income (Loss) of Affiliates

 

(64)

 

11

 

-

%

 

 

(71)

 

(148)

 

52.0

%

Other Income (Expense) - Net

 

1,053

 

842

 

25.1

%

 

 

5,108

 

2,255

 

-

%

Income Before Income Taxes

 

6,207

 

4,974

 

24.8

%

 

 

19,128

 

16,422

 

16.5

%

Income Tax Expense

 

1,391

 

1,851

 

(24.9)

%

 

 

4,305

 

5,711

 

(24.6)

%

Net Income

 

4,816

 

3,123

 

54.2

%

 

 

14,823

 

10,711

 

38.4

%

 Less: Net Income Attributable to

    Noncontrolling Interest

 

(98)

 

(94)

 

(4.3)

%

 

 

(311)

 

(298)

 

(4.4)

%

Net Income Attributable to AT&T

$

4,718

$

3,029

 

55.8

%

 

$

14,512

$

10,413

 

39.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share Attributable to AT&T

$

0.65

$

0.49

 

32.7

%

 

$

2.19

$

1.69

 

29.6

%

   Weighted Average Common

       Shares Outstanding (000,000)

 

7,284

 

6,162

 

18.2

%

 

 

6,603

 

6,164

 

7.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share Attributable to AT&T

$

0.65

$

0.49

 

32.7

%

 

$

2.19

$

1.69

 

29.6

%

   Weighted Average Common 

       Shares Outstanding with Dilution (000,000)

 

7,320

 

6,182

 

18.4

%

 

 

6,630

 

6,184

 

7.2

%

 

1

AT&T Inc.

 

 

 

 

 

Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets

Dollars in millions

 

Unaudited

 

Sep. 30,

 

 

Dec. 31,

 

 

 

2018

 

 

2017

Assets

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

$

8,657

 

$

50,498

Accounts receivable - net of allowances for doubtful accounts of $845 and $663

 

26,312

 

 

16,522

Prepaid expenses

 

1,860

 

 

1,369

Other current assets

 

16,278

 

 

10,757

Total current assets

 

53,107

 

 

79,146

Noncurrent Inventories and Theatrical Film and Television Production Costs

 

7,221

 

 

-

Property, Plant and Equipment - Net

 

130,348

 

 

125,222

Goodwill

 

146,475

 

 

105,449

Licenses

 

96,077

 

 

96,136

Trademarks and Trade Names - Net

 

24,389

 

 

7,021

Distribution Networks

 

 

16,962

 

 

-

Other Intangible Assets - Net

 

28,673

 

 

11,119

Investments in and Advances to Equity Affiliates

 

6,128

 

 

1,560

Other Assets

 

25,490

 

 

18,444

Total Assets

$

534,870

 

$

444,097

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Debt maturing within one year

$

14,905

 

$

38,374

Accounts payable and accrued liabilities

 

39,375

 

 

34,470

Advanced billing and customer deposits

 

6,045

 

 

4,213

Accrued taxes

 

1,460

 

 

1,262

Dividends payable

 

3,635

 

 

3,070

Total current liabilities

 

65,420

 

 

81,389

Long-Term Debt

 

168,513

 

 

125,972

Deferred Credits and Other Noncurrent Liabilities

 

 

 

 

 

Deferred income taxes

 

60,495

 

 

43,207

Postemployment benefit obligation

 

28,981

 

 

31,775

Other noncurrent liabilities

 

26,490

 

 

19,747

Total deferred credits and other noncurrent liabilities

 

115,966

 

 

94,729

Stockholders' Equity

 

 

 

 

 

Common stock

 

7,621

 

 

6,495

Additional paid-in capital

 

125,706

 

 

89,563

Retained earnings

 

57,624

 

 

50,500

Treasury stock

 

(12,486)

 

 

(12,714)

Accumulated other comprehensive income

 

5,383

 

 

7,017

Noncontrolling interest

 

1,123

 

 

1,146

Total stockholders' equity

 

184,971

 

 

142,007

Total Liabilities and Stockholders' Equity

$

534,870

 

$

444,097

 

 

 

 

 

 

 

 

2

AT&T Inc.

 

 

 

 

 

Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows

Dollars in millions

 

Unaudited

Nine-Month Period

 

 

 

2018

 

 

2017

As Adjusted

Operating Activities

 

 

 

 

 

Net income

$

14,823

 

$

10,711

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

20,538

 

 

18,316

 

Amortization of film and television costs

 

1,608

 

 

-

 

Undistributed earnings from investments in equity affiliates

 

312

 

 

171

 

Provision for uncollectible accounts

 

1,240

 

 

1,216

 

Deferred income tax expense

 

2,934

 

 

3,254

 

Net (gain) loss from sale of investments, net of impairments

 

(501)

 

 

(114)

 

Actuarial (gain) loss on pension and postretirement benefits

 

(2,726)

 

 

(259)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

(1,018)

 

 

(652)

 

Other current assets, inventories and theatrical film and television production costs

 

(2,729)

 

 

(106)

 

Accounts payable and other accrued liabilities

 

(1,385)

 

 

(1,437)

 

Equipment installment receivables and related sales

 

220

 

 

451

 

Deferred customer contract acquisition and fulfillment costs

 

(2,657)

 

 

(1,102)

Retirement benefit funding

 

(420)

 

 

(420)

Other - net

 

1,283

 

 

(1,556)

Total adjustments

 

16,699

 

 

17,762

Net Cash Provided by Operating Activities

 

31,522

 

 

28,473

 

 

 

 

 

Investing Activities

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

Purchase of property and equipment

 

(16,695)

 

 

(15,756)

 

Interest during construction

 

(404)

 

 

(718)

Acquisitions, net of cash acquired

 

(43,116)

 

 

1,154

Dispositions

 

983

 

 

56

(Purchases) sales of securities, net

 

(234)

 

 

235

Advances to and investments in equity affiliates, net

 

(1,021)

 

 

-

Cash collections of deferred purchase price

 

500

 

 

665

Net Cash Used in Investing Activities

 

(59,987)

 

 

(14,364)

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

Net change in short-term borrowings with original maturities of three months or less

 

1

 

 

(2)

Issuance of other short-term borrowings

 

4,852

 

 

-

Repayment of other short-term borrowings

 

(2,147)

 

 

-

Issuance of long-term debt

 

38,325

 

 

46,761

Repayment of long-term debt

 

(43,579)

 

 

(10,309)

Purchase of treasury stock

 

(577)

 

 

(460)

Issuance of treasury stock

 

359

 

 

26

Dividends paid

 

(9,775)

 

 

(9,030)

Other

 

(1,138)

 

 

1,716

Net Cash (Used in) Provided by Financing Activities

 

(13,679)

 

 

28,702

Net (decrease) increase in cash and cash equivalents and restricted cash

 

(42,144)

 

 

42,811

Cash and cash equivalents and restricted cash beginning of year

 

50,932

 

 

5,935

Cash and Cash Equivalents and Restricted Cash End of Period

$

8,788

 

$

48,746

 

 

 

 

 

 

 

 

3

 

AT&T Inc.

Consolidated Supplementary Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary Financial Data

Dollars in millions except per share amounts

 

 

 

 

 

 

 

Unaudited

Third Quarter

Percent

 

Nine-Month Period

Percent

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

$

5,736

$

5,006

 

14.6

%

 

$

16,695

$

15,756

 

6.0

%

 

Interest during construction

 

137

 

245

 

(44.1)

%

 

 

404

 

718

 

(43.7)

%

Total Capital Expenditures

$

5,873

$

5,251

 

11.8

%

 

$

17,099

$

16,474

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends Declared per Share

$

0.50

$

0.49

 

2.0

%

 

$

1.50

$

1.47

 

2.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

End of Period Common Shares Outstanding (000,000)

 

 

 

 

 

 

 

 

 

7,270

 

6,139

 

18.4

%

Debt Ratio

 

 

 

 

 

 

 

 

 

49.8

%

56.4

%

(660)

BP

Total Employees

 

 

 

 

 

 

 

 

 

269,280

 

256,800

 

4.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary Operating Data

Subscribers and connections in thousands

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

Nine-Month Period

Percent

 

 

 

 

 

 

 

 

 

 

 

2018

 

2017

 

Change

Wireless Subscribers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

 

 

 

 

 

 

 

 

150,252

 

138,445

 

8.5

%

 

Mexico

 

 

 

 

 

 

 

 

 

17,305

 

13,779

 

25.6

%

Total Wireless Subscribers

 

 

 

 

 

 

 

 

 

167,557

 

152,224

 

10.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Branded Wireless Subscribers

 

 

 

 

 

 

 

 

 

110,982

 

105,717

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video Connections

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

 

 

 

 

 

 

 

 

25,176

 

25,110

 

0.3

%

 

Latin America

 

 

 

 

 

 

 

 

 

13,640

 

13,490

 

1.1

%

Total Video Connections

 

 

 

 

 

 

 

 

 

38,816

 

38,600

 

0.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broadband Connections

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IP

 

 

 

 

 

 

 

 

 

14,744

 

14,384

 

2.5

%

 

DSL

 

 

 

 

 

 

 

 

 

1,002

 

1,331

 

(24.7)

%

Total Broadband Connections

 

 

 

 

 

 

 

 

 

15,746

 

15,715

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Voice Connections

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Network Access Lines

 

 

 

 

 

 

 

 

 

10,399

 

12,249

 

(15.1)

%

 

U-verse  VoIP Connections

 

 

 

 

 

 

 

 

 

5,274

 

5,774

 

(8.7)

%

Total Retail Voice Connections

 

 

 

 

 

 

 

 

 

15,673

 

18,023

 

(13.0)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter

Percent

 

Nine-Month Period

Percent

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Wireless Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

3,363

 

2,341

 

43.7

%

 

 

9,057

 

6,717

 

34.8

%

 

Mexico

 

907

 

697

 

30.1

%

 

 

2,206

 

1,806

 

22.1

%

Total Wireless Net Additions

 

4,270

 

3,038

 

40.6

%

 

 

11,263

 

8,523

 

32.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Branded Wireless Net Additions

 

1,213

 

1,173

 

3.4

%

 

 

3,351

 

2,812

 

19.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

(296)

 

(90)

 

-

%

 

 

(93)

 

(450)

 

79.3

%

 

Latin America

 

(73)

 

(132)

 

44.7

%

 

 

52

 

(97)

 

-

%

Total Video Net Additions

 

(369)

 

(222)

 

(66.2)

%

 

 

(41)

 

(547)

 

92.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broadband Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IP

 

35

 

150

 

(76.7)

%

 

 

257

 

520

 

(50.6)

%

 

DSL

 

(60)

 

(121)

 

50.4

%

 

 

(230)

 

(410)

 

43.9

%

Total Broadband Net Additions

 

(25)

 

29

 

-

%

 

 

27

 

110

 

(75.5)

%

 

4

 

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

Third Quarter

Percent

 

Nine-Month Period

Percent

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Segment Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility

$

17,938

$

17,370

 

3.3

%

 

$

52,575

$

51,922

 

1.3

%

 

Entertainment Group

 

11,589

 

12,467

 

(7.0)

%

 

 

34,498

 

37,435

 

(7.8)

%

 

Business Wireline

 

6,703

 

7,278

 

(7.9)

%

 

 

20,100

 

21,911

 

(8.3)

%

    Total Segment Operating Revenues

 

36,230

 

37,115

 

(2.4)

%

 

 

107,173

 

111,268

 

(3.7)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Contribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility

 

5,603

 

5,333

 

5.1

%

 

 

16,267

 

15,929

 

2.1

%

 

Entertainment Group

 

1,104

 

1,283

 

(14.0)

%

 

 

3,888

 

4,470

 

(13.0)

%

 

Business Wireline

 

1,475

 

1,455

 

1.4

%

 

 

4,468

 

4,422

 

1.0

%

    Total Segment Operating Contribution

$

8,182

$

8,071

 

1.4

%

 

$

24,623

$

24,821

 

(0.8)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility

  

Mobility provides nationwide wireless service and equipment.

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Mobility Results

  

Dollars in millions

 

 

 

 

 

 

 

  

Unaudited

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 Service

$

13,989

$

14,475

 

(3.4)

%

 

$

41,074

$

43,414

 

(5.4)

%

  

 

 Equipment

 

3,949

 

2,895

 

36.4

%

 

 

11,501

 

8,508

 

35.2

%

  

    Total Operating Revenues

 

17,938

 

17,370

 

3.3

%

 

 

52,575

 

51,922

 

1.3

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operations and support

 

10,255

 

10,029

 

2.3

%

 

 

30,020

 

30,005

 

-

%

  

Depreciation and amortization

 

2,079

 

2,008

 

3.5

%

 

 

6,287

 

5,988

 

5.0

%

  

    Total Operating Expenses

 

12,334

 

12,037

 

2.5

%

 

 

36,307

 

35,993

 

0.9

%

  

Operating Income

 

5,604

 

5,333

 

5.1

%

 

 

16,268

 

15,929

 

2.1

%

  

Equity in Net Income (Loss) of Affiliates

 

(1)

 

-

 

-

%

 

 

(1)

 

-

 

-

%

  

Operating  Contribution

$

5,603

$

5,333

 

5.1

%

 

$

16,267

$

15,929

 

2.1

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Income Margin

 

31.2

%

30.7

%

50

BP

 

 

30.9

%

30.7

%

20

BP

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Supplementary Operating Data

  

Subscribers and connections in thousands

 

 

 

 

 

 

 

  

Unaudited

 

 

 

Nine-Month Period

Percent

  

 

 

 

 

 

 

 

 

 

 

 

2018

 

2017

 

Change

  

Mobility Subscribers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 Postpaid

 

 

 

 

 

 

 

 

 

76,996

 

77,034

 

-

%

  

 

 Prepaid

 

 

 

 

 

 

 

 

 

16,894

 

15,136

 

11.6

%

  

Branded

 

 

 

 

 

 

 

 

 

93,890

 

92,170

 

1.9

%

  

Reseller

 

 

 

 

 

 

 

 

 

8,183

 

9,877

 

(17.2)

%

  

Connected Devices

 

 

 

 

 

 

 

 

 

48,179

 

36,398

 

32.4

%

  

Total Mobility Subscribers

 

 

 

 

 

 

 

 

 

150,252

 

138,445

 

8.5

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

 Mobility Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 Postpaid

 

(232)

 

134

 

-

%

 

 

(110)

 

83

 

-

%

  

 

 Prepaid

 

570

 

324

 

75.9

%

 

 

1,264

 

873

 

44.8

%

  

Branded

 

338

 

458

 

(26.2)

%

 

 

1,154

 

956

 

20.7

%

  

Reseller

 

(434)

 

(391)

 

(11.0)

%

 

 

(1,266)

 

(1,341)

 

5.6

%

  

Connected Devices

 

3,459

 

2,274

 

52.1

%

 

 

9,169

 

7,102

 

29.1

%

  

Total Mobility Net Additions

 

3,363

 

2,341

 

43.7

%

 

 

9,057

 

6,717

 

34.8

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Branded Churn

 

1.70

%

1.70

%

-

BP

 

 

1.62

%

1.66

%

(4)

BP

  

Postpaid Churn

 

1.17

%

1.06

%

11

BP

 

 

1.08

%

1.06

%

2

BP

  

Postpaid Phone-Only Churn

 

0.93

%

0.84

%

9

BP

 

 

0.87

%

0.84

%

3

BP

  

 

5

 

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 DIRECTV and U-verse distribution platforms.

  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Entertainment Group Results

  

Dollars in millions

 

 

 

 

 

 

 

  

Unaudited

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

 Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Video entertainment

$

8,283

$

9,052

 

(8.5)

%

 

$

24,681

$

26,967

 

(8.5)

%

  

 

High-speed internet

 

2,045

 

1,916

 

6.7

%

 

 

5,904

 

5,784

 

2.1

%

  

 

Legacy voice and data services

 

740

 

913

 

(18.9)

%

 

 

2,317

 

2,889

 

(19.8)

%

  

 

Other service and equipment

 

521

 

586

 

(11.1)

%

 

 

1,596

 

1,795

 

(11.1)

%

  

    Total Operating Revenues

 

11,589

 

12,467

 

(7.0)

%

 

 

34,498

 

37,435

 

(7.8)

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operations and support

 

9,155

 

9,804

 

(6.6)

%

 

 

26,623

 

28,711

 

(7.3)

%

  

Depreciation and amortization

 

1,331

 

1,379

 

(3.5)

%

 

 

3,986

 

4,254

 

(6.3)

%

  

    Total Operating Expenses

 

10,486

 

11,183

 

(6.2)

%

 

 

30,609

 

32,965

 

(7.1)

%

  

Operating Income

 

1,103

 

1,284

 

(14.1)

%

 

 

3,889

 

4,470

 

(13.0)

%

  

Equity in Net Income (Loss) of Affiliates

 

1

 

(1)

 

-

%

 

 

(1)

 

-

 

-

%

  

Operating Contribution

$

1,104

$

1,283

 

(14.0)

%

 

$

3,888

$

4,470

 

(13.0)

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Income Margin

 

9.5

%

10.3

%

(80)

BP

 

 

11.3

%

11.9

%

(60)

BP

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Supplementary Operating Data

  

Subscribers and connections in thousands

 

 

 

 

 

 

 

 

  

Unaudited

 

 

 

 

Nine-Month Period

Percent

  

 

 

 

 

 

 

 

 

 

 

2018

 

2017

 

Change

  

Video Connections

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Satellite

 

 

 

 

 

 

 

 

 

19,625

 

20,605

 

(4.8)

%

  

 

U-verse

 

 

 

 

 

 

 

 

 

3,669

 

3,691

 

(0.6)

%

  

 

DIRECTV NOW

 

 

 

 

 

 

 

 

 

1,858

 

787

 

-

%

  

Total Video Connections

 

 

 

 

 

 

 

 

 

25,152

 

25,083

 

0.3

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Broadband Connections

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

IP

 

 

 

 

 

 

 

 

 

13,723

 

13,367

 

2.7

%

  

 

DSL

 

 

 

 

 

 

 

 

 

718

 

964

 

(25.5)

%

  

Total Broadband Connections

 

 

 

 

 

 

 

 

 

14,441

 

14,331

 

0.8

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Voice Connections

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Retail Consumer Switched Access Lines

 

 

 

 

 

 

 

 

 

4,144

 

4,996

 

(17.1)

%

  

 

U-verse Consumer VoIP Connections

 

 

 

 

 

 

 

 

 

4,757

 

5,337

 

(10.9)

%

  

Total Retail Consumer Voice Connections

 

 

 

 

 

 

 

 

 

8,901

 

10,333

 

(13.9)

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Video Net Additions1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Satellite

 

(359)

 

(251)

 

(43.0)

%

 

 

(833)

 

(407)

 

-

%

  

 

U-verse

 

13

 

(134)

 

-

%

 

 

38

 

(562)

 

-

%

  

 

DIRECTV NOW

 

49

 

296

 

(83.4)

%

 

 

703

 

520

 

35.2

%

  

Total Video Net Additions

 

(297)

 

(89)

 

-

%

 

 

(92)

 

(449)

 

79.5

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Broadband Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

IP

 

31

 

125

 

(75.2)

%

 

 

261

 

479

 

(45.5)

%

  

 

DSL

 

(45)

 

(96)

 

53.1

%

 

 

(170)

 

(327)

 

48.0

%

  

Total Broadband Net Additions

 

(14)

 

29

 

-

%

 

 

91

 

152

 

(40.1)

%

  

 

1 Includes the impact of customers that migrated to DIRECTV NOW.

 

 

 

 

 

 

 

 

 

 

 

  

 

6

 

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

Third Quarter

Percent

 

Nine-Month Period

Percent

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Strategic services

$

3,059

$

3,018

 

1.4

%

 

$

9,168

$

8,880

 

3.2

%

 

Legacy voice and data services

 

2,615

 

3,343

 

(21.8)

%

 

 

8,176

 

10,314

 

(20.7)

%

 

Other service and equipment

 

1,029

 

917

 

12.2

%

 

 

2,756

 

2,717

 

1.4

%

    Total Operating Revenues

 

6,703

 

7,278

 

(7.9)

%

 

 

20,100

 

21,911

 

(8.3)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support

 

4,030

 

4,635

 

(13.1)

%

 

 

12,084

 

13,906

 

(13.1)

%

Depreciation and amortization

 

1,197

 

1,189

 

0.7

%

 

 

3,547

 

3,583

 

(1.0)

%

    Total Operating Expenses

 

5,227

 

5,824

 

(10.3)

%

 

 

15,631

 

17,489

 

(10.6)

%

Operating Income

 

1,476

 

1,454

 

1.5

%

 

 

4,469

 

4,422

 

1.1

%

Equity in Net Income (Loss) of Affiliates

 

(1)

 

1

 

-

%

 

 

(1)

 

-

 

-

%

Operating Contribution

$

1,475

$

1,455

 

1.4

%

 

$

4,468

$

4,422

 

1.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

22.0

%

20.0

%

200

BP

 

 

22.2

%

20.2

%

200

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.

  
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Business Solutions Results

  

Dollars in millions

 

 

 

 

 

 

 

  

Unaudited

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Wireless service

$

1,877

$

2,023

 

(7.2)

%

 

$

5,497

$

6,030

 

(8.8)

%

  

 

Strategic services

 

3,059

 

3,018

 

1.4

%

 

 

9,168

 

8,880

 

3.2

%

  

 

Legacy voice and data services

 

2,615

 

3,343

 

(21.8)

%

 

 

8,176

 

10,314

 

(20.7)

%

  

 

Other service and equipment

 

1,029

 

917

 

12.2

%

 

 

2,756

 

2,717

 

1.4

%

  

 

Wireless equipment

 

590

 

340

 

73.5

%

 

 

1,752

 

988

 

77.3

%

  

    Total Operating Revenues

 

9,170

 

9,641

 

(4.9)

%

 

 

27,349

 

28,929

 

(5.5)

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operations and support

 

5,598

 

6,096

 

(8.2)

%

 

 

16,808

 

18,147

 

(7.4)

%

  

Depreciation and amortization

 

1,499

 

1,466

 

2.3

%

 

 

4,444

 

4,409

 

0.8

%

  

    Total Operating Expenses

 

7,097

 

7,562

 

(6.1)

%

 

 

21,252

 

22,556

 

(5.8)

%

  

Operating Income

 

2,073

 

2,079

 

(0.3)

%

 

 

6,097

 

6,373

 

(4.3)

%

  

Equity in Net Income (Loss) of Affiliates

 

(1)

 

-

 

-

%

 

 

(1)

 

-

 

-

%

  

Operating Contribution

$

2,072

$

2,079

 

(0.3)

%

 

$

6,096

$

6,373

 

(4.3)

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Income Margin

 

22.6

%

21.6

%

100

BP

 

 

22.3

%

22.0

%

30

BP

  

 

7

 

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 AT&T's Regional Sports Network (RSN) and Otter Media Holdings are also included in the WarnerMedia segment. The WarnerMedia segment contains three business units: Turner, Home Box Office, and Warner Bros.

 

Segment Results

Dollars in millions

 

 

 

 

 

 

 

Unaudited

Third Quarter

Percent

 

Nine-Month Period

Percent

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Segment Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turner

$

2,988

$

107

 

-

%

 

$

3,767

$

323

 

-

%

 

Home Box Office

 

1,644

 

-

 

-

%

 

 

1,925

 

-

 

-

%

 

Warner Bros.

 

3,720

 

-

 

-

%

 

 

4,227

 

-

 

-

%

 

Eliminations and other

 

(148)

 

-

 

-

%

 

 

(210)

 

-

 

-

%

    Total Segment Operating Revenues

 

8,204

 

107

 

-

%

 

 

9,709

 

323

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Contribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turner

 

1,449

 

22

 

-

%

 

 

1,802

 

79

 

-

%

 

Home Box Office

 

630

 

-

 

-

%

 

 

734

 

-

 

-

%

 

Warner Bros.

 

553

 

-

 

-

%

 

 

642

 

-

 

-

%

 

Eliminations and other

 

(104)

 

(20)

 

-

%

 

 

(186)

 

(58)

 

-

%

    Total Segment Operating Contribution

$

2,528

$

2

 

-

%

 

$

2,992

$

21

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turner

  

Turner is comprised of the WarnerMedia businesses managed by Turner as well as our RSN. This business unit 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

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Operating Revenues

 

 

 

 

 

  

 

 

 

 

 

 

 

  

 

  

 

Subscription

$

1,855

$

90

 

-

%

 

$

2,363

$

271

 

-

%

  

 

Advertising

 

944

 

17

 

-

%

 

 

1,181

 

52

 

-

%

  

 

Content and other

 

189

 

-

 

-

%

 

 

223

 

-

 

-

%

  

    Total Operating Revenues

 

2,988

 

107

 

-

%

 

 

3,767

 

323

 

-

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operations and support

 

1,487

 

97

 

-

%

 

 

1,933

 

273

 

-

%

  

Depreciation and amortization

 

59

 

1

 

-

%

 

 

71

 

3

 

-

%

  

    Total Operating Expenses

 

1,546

 

98

 

-

%

 

 

2,004

 

276

 

-

%

  

Operating Income

 

1,442

 

9

 

-

%

 

 

1,763

 

47

 

-

%

  

Equity in Net Income of Affiliates

 

7

 

13

 

(46.2)

%

 

 

39

 

32

 

21.9

%

  

Operating Contribution

$

1,449

$

22

 

-

%

 

$

1,802

$

79

 

-

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Income Margin

 

48.3

%

8.4

%

-

BP

 

 

46.8

%

14.6

%

-

BP

  

 

8

 

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

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Operating Revenues

 

 

 

 

 

  

 

 

 

 

 

 

 

  

 

  

 

Subscription

$

1,517

$

-

 

-

%

 

$

1,787

$

-

 

-

%

  

 

Content and other

 

127

 

-

 

-

%

 

 

138

 

-

 

-

%

  

Total Operating Revenues

 

1,644

 

-

 

-

%

 

 

1,925

 

-

 

-

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operations and support

 

991

 

-

 

-

%

 

 

1,162

 

-

 

-

%

  

Depreciation and amortization

 

25

 

-

 

-

%

 

 

30

 

-

 

-

%

  

    Total Operating Expenses

 

1,016

 

-

 

-

%

 

 

1,192

 

-

 

-

%

  

Operating Income

 

628

 

-

 

-

%

 

 

733

 

-

 

-

%

  

Equity in Net Income of Affiliates

 

2

 

-

 

-

%

 

 

1

 

-

 

-

%

  

Operating Contribution

$

630

$

-

 

-

%

 

$

734

$

-

 

-

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Income Margin

 

38.2

%

-

%

  -

BP

 

 

38.1

%

-

%

-

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

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Operating Revenues

 

 

 

 

 

  

 

 

 

 

 

 

 

  

 

  

 

Theatrical product

$

1,694

$

-

 

-

%

 

$

1,917

$

-

 

-

%

  

 

Television product

 

1,591

 

-

 

-

%

 

 

1,794

 

-

 

-

%

  

 

Games and other

 

435

 

-

 

-

%

 

 

516

 

-

 

-

%

  

    Total Operating Revenues

 

3,720

 

-

 

-

%

 

 

4,227

 

-

 

-

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operations and support

 

3,104

 

-

 

-

%

 

 

3,507

 

-

 

-

%

  

Depreciation and amortization

 

40

 

-

 

-

%

 

 

54

 

-

 

-

%

  

    Total Operating Expenses

 

3,144

 

-

 

-

%

 

 

3,561

 

-

 

-

%

  

Operating Income

 

576

 

-

 

-

%

 

 

666

 

-

 

-

%

  

Equity in Net Income (Loss) of Affiliates

 

(23)

 

-

 

-

%

 

 

(24)

 

-

 

-

%

  

Operating Contribution

$

553

$

-

 

-

%

 

$

642

$

-

 

-

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Income Margin

 

15.5

%

-

%

-

BP

 

 

15.8

%

-

%

-

BP

  

 

9

 

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

Third Quarter

Percent

 

Nine-Month Period

Percent

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Segment Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vrio

$

1,102

$

1,363

 

(19.1)

%

 

$

3,710

$

4,065

 

(8.7)

%

 

Mexico

 

731

 

736

 

(0.7)

%

 

 

2,099

 

1,989

 

5.5

%

    Total Segment Operating Revenues

 

1,833

 

2,099

 

(12.7)

%

 

 

5,809

 

6,054

 

(4.0)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Contribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vrio

 

66

 

99

 

(33.3)

%

 

 

281

 

362

 

(22.4)

%

 

Mexico

 

(267)

 

(224)

 

(19.2)

%

 

 

(743)

 

(619)

 

(20.0)

%

    Total Segment Operating Contribution

$

(201)

$

(125)

 

(60.8)

%

 

$

(462)

$

(257)

 

(79.8)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vrio

 

Vrio provides entertainment services to customers utilizing satellite technology in Latin America and the Caribbean.

 

Vrio Results

Dollars in millions

 

 

 

 

 

 

 

Unaudited

Third Quarter

Percent

 

Nine-Month Period

Percent

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

   Operating Revenues

$

1,102

$

1,363

 

(19.1)

%

 

$

3,710

$

4,065

 

(8.7)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support

 

877

 

1,075

 

(18.4)

%

 

 

2,894

 

3,123

 

(7.3)

%

Depreciation and amortization

 

168

 

206

 

(18.4)

%

 

 

559

 

642

 

(12.9)

%

    Total Operating Expenses

 

1,045

 

1,281

 

(18.4)

%

 

 

3,453

 

3,765

 

(8.3)

%

Operating Income

 

57

 

82

 

(30.5)

%

 

 

257

 

300

 

(14.3)

%

Equity in Net Income of Affiliates

 

9

 

17

 

(47.1)

%

 

 

24

 

62

 

(61.3)

%

Operating Contribution

$

66

$

99

 

(33.3)

%

 

$

281

$

362

 

(22.4)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

5.2

%

6.0

%

(80)

BP

 

 

6.9

%

7.4

%

(50)

BP

 

Supplementary Operating Data

Subscribers and connections in thousands

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

Nine-Month Period

Percent

 

 

 

 

 

 

 

 

 

 

2018

 

2017

 

Change

Vrio Satellite Subscribers

 

 

 

 

 

 

 

 

 

13,640

 

13,490

 

1.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter

 

 

 

 

Nine-Month Period

 

 

 

 

 

2018

 

2017

 

 

 

 

 

 2,018  

 

 2,017  

 

 

 

Vrio Satellite Net Subscriber Additions

 

(73)

 

(132)

 

44.7

%

 

 

52

 

(97)

 

-

%

 

10

 

Mexico

  

 Mexico provides wireless services and equipment to customers in Mexico.

  
 

 

  

Mexico Results

  

Dollars in millions

 

 

 

 

 

 

 

  

Unaudited

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Operating Revenues

 

 

 

 

 

  

 

 

 

 

 

 

 

  

 

  

 

Wireless service

$

440

$

536

 

(17.9)

%

 

$

1,261

$

1,546

 

(18.4)

%

  

 

Wireless equipment

 

291

 

200

 

45.5

%

 

 

838

 

443

 

89.2

%

  

    Total Operating Revenues

 

731

 

736

 

(0.7)

%

 

 

2,099

 

1,989

 

5.5

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operations and support

 

869

 

862

 

0.8

%

 

 

2,459

 

2,345

 

4.9

%

  

Depreciation and amortization

 

129

 

98

 

31.6

%

 

 

383

 

263

 

45.6

%

  

    Total Operating Expenses

 

998

 

960

 

4.0

%

 

 

2,842

 

2,608

 

9.0

%

  

Operating Income (Loss)

 

(267)

 

(224)

 

(19.2)

%

 

 

(743)

 

(619)

 

(20.0)

%

  

Operating Contribution

$

(267)

$

(224)

 

(19.2)

%

 

$

(743)

$

(619)

 

(20.0)

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operating Income Margin

 

(36.5)

%

(30.4)

%

(610)

BP

 

 

(35.4)

%

(31.1)

%

(430)

BP

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Supplementary Operating Data

  

Subscribers and connections in thousands

 

 

 

 

 

 

 

 

 

  

Unaudited

 

 

 

 

 

Nine-Month Period

Percent

  

 

 

 

 

 

 

 

 

 

 

2018

 

2017

 

Change

  

Mexico Wireless Subscribers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Postpaid

 

 

 

 

 

 

 

 

 

5,822

 

5,316

 

9.5

%

  

 

Prepaid

 

 

 

 

 

 

 

 

 

11,270

 

8,231

 

36.9

%

  

Branded

 

 

 

 

 

 

 

 

 

17,092

 

13,547

 

26.2

%

  

Reseller

 

 

 

 

 

 

 

 

 

213

 

232

 

(8.2)

%

  

Total Mexico Wireless Subscribers

 

 

 

 

 

 

 

 

 

17,305

 

13,779

 

25.6

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Mexico Wireless Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

Postpaid

 

73

 

129

 

(43.4)

%

 

 

324

 

351

 

(7.7)

%

  

 

Prepaid

 

802

 

585

 

37.1

%

 

 

1,873

 

1,504

 

24.5

%

  

Branded

 

875

 

714

 

22.5

%

 

 

2,197

 

1,855

 

18.4

%

  

Reseller

 

32

 

(17)

 

-

%

 

 

9

 

(49)

 

-

%

  

Total Mexico Wireless Net Subscriber Additions

 

907

 

697

 

30.1

%

 

 

2,206

 

1,806

 

22.1

%

  

 

11

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

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Segment Operating Revenues

$

445

$

333

 

33.6

%

 

$

1,174

$

992

 

18.3

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Segment Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Operations and support

 

109

 

39

 

-

%

 

 

218

 

118

 

84.7

%

  

Depreciation and amortization

 

3

 

-

 

-

%

 

 

4

 

1

 

-

%

  

    Total Segment Operating Expenses

 

112

 

39

 

-

%

 

 

222

 

119

 

86.6

%

  

Operating Income

 

333

 

294

 

13.3

%

 

 

952

 

873

 

9.0

%

  

Segment Operating Contribution

$

333

$

294

 

13.3

%

 

$

952

$

873

 

9.0

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Segment Operating Income Margin

 

74.8

%

88.3

%

(1,350)

BP

 

 

81.1

%

88.0

%

(690)

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

Third Quarter

Percent

 

Nine-Month Period

Percent

  

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

  

Operating Revenues

 

 

 

 

 

  

 

 

 

 

 

 

 

  

 

  

 

WarnerMedia

$

983

$

17

 

-

%

 

$

1,222

$

52

 

-

%

  

 

Communications

 

478

 

368

 

29.9

%

 

 

1,284

 

1,093

 

17.5

%

  

 

Xandr

 

445

 

333

 

33.6

%

 

 

1,174

 

992

 

18.3

%

  

 

Eliminations

 

(401)

 

(329)

 

(21.9)

%

 

 

(1,122)

 

(980)

 

(14.5)

%

  

    Total Advertising Revenues

$

1,505

$

389

 

-

%

 

$

2,558

$

1,157

 

-

%

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

12

SUPPLEMENTAL SEGMENT RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Dollars in millions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 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

$

17,938

 

$

10,255

 

$

7,683

 

$

2,079

 

$

5,604

 

$

(1)

 

$

5,603

  Entertainment Group

 

11,589

 

 

9,155

 

 

2,434

 

 

1,331

 

 

1,103

 

 

1

 

 

1,104

  Business Wireline

 

6,703

 

 

4,030

 

 

2,673

 

 

1,197

 

 

1,476

 

 

(1)

 

 

1,475

Total Communications

 

36,230

 

 

23,440

 

 

12,790

 

 

4,607

 

 

8,183

 

 

(1)

 

 

8,182

WarnerMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Turner

 

2,988

 

 

1,487

 

 

1,501

 

 

59

 

 

1,442

 

 

7

 

 

1,449

  Home Box Office

 

1,644

 

 

991

 

 

653

 

 

25

 

 

628

 

 

2

 

 

630

  Warner Bros.

 

3,720

 

 

3,104

 

 

616

 

 

40

 

 

576

 

 

(23)

 

 

553

  Other

 

(148)

 

 

(79)

 

 

(69)

 

 

10

 

 

(79)

 

 

(25)

 

 

(104)

Total WarnerMedia

 

8,204

 

 

5,503

 

 

2,701

 

 

134

 

 

2,567

 

 

(39)

 

 

2,528

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Vrio

 

1,102

 

 

877

 

 

225

 

 

168

 

 

57

 

 

9

 

 

66

  Mexico

 

731

 

 

869

 

 

(138)

 

 

129

 

 

(267)

 

 

-

 

 

(267)

Total Latin America

 

1,833

 

 

1,746

 

 

87

 

 

297

 

 

(210)

 

 

9

 

 

(201)

Xandr

 

445

 

 

109

 

 

336

 

 

3

 

 

333

 

 

-

 

 

333

Segment Total

 

46,712

 

 

30,798

 

 

15,914

 

 

5,041

 

 

10,873

 

 

(31)

 

 

10,842

Corporate and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Corporate

 

308

 

 

(18)

 

 

326

 

 

797

 

 

(471)

 

 

 

 

 

 

  Acquisition-related items

 

-

 

 

362

 

 

(362)

 

 

2,329

 

 

(2,691)

 

 

 

 

 

 

  Certain significant items

 

-

 

 

75

 

 

(75)

 

 

-

 

 

(75)

 

 

 

 

 

 

  Eliminations and consolidations

 

(1,281)

 

 

(913)

 

 

(368)

 

 

(1)

 

 

(367)

 

 

 

 

 

 

AT&T Inc.

$

45,739

 

$

30,304

 

$

15,435

 

$

8,166

 

$

7,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

Operations and Support Expenses

 

 

EBITDA

 

 

Depreciation and Amortization

 

 

Operating Income (Loss)

 

 

Equity in Net Income (Loss) of Affiliates

 

 

Segment Contribution

Communications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Mobility

$

17,370

 

$

10,029

 

$

7,341

 

$

2,008

 

$

5,333

 

$

-

 

$

5,333

  Entertainment Group

 

12,467

 

 

9,804

 

 

2,663

 

 

1,379

 

 

1,284

 

 

(1)

 

 

1,283

  Business Wireline

 

7,278

 

 

4,635

 

 

2,643

 

 

1,189

 

 

1,454

 

 

1

 

 

1,455

Total Communications

 

37,115

 

 

24,468

 

 

12,647

 

 

4,576

 

 

8,071

 

 

-

 

 

8,071

WarnerMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Turner

 

107

 

 

97

 

 

10

 

 

1

 

 

9

 

 

13

 

 

22

  Home Box Office

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

  Warner Bros.

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

  Other

 

-

 

 

1

 

 

(1)

 

 

-

 

 

(1)

 

 

(19)

 

 

(20)

Total WarnerMedia

 

107

 

 

98

 

 

9

 

 

1

 

 

8

 

 

(6)

 

 

2

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Vrio

 

1,363

 

 

1,075

 

 

288

 

 

206

 

 

82

 

 

17

 

 

99

  Mexico

 

736

 

 

862

 

 

(126)

 

 

98

 

 

(224)

 

 

-

 

 

(224)

Total Latin America

 

2,099

 

 

1,937

 

 

162

 

 

304

 

 

(142)

 

 

17

 

 

(125)

Xandr

 

333

 

 

39

 

 

294

 

 

-

 

 

294

 

 

-

 

 

294

Segment Total

 

39,654

 

 

26,542

 

 

13,112

 

 

4,881

 

 

8,231

 

 

11

 

 

8,242

Corporate and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Corporate

 

382

 

 

801

 

 

(419)

 

 

24

 

 

(443)

 

 

 

 

 

 

  Acquisition-related items

 

-

 

 

134

 

 

(134)

 

 

1,136

 

 

(1,270)

 

 

 

 

 

 

  Certain significant items

 

(89)

 

 

325

 

 

(414)

 

 

1

 

 

(415)

 

 

 

 

 

 

  Eliminations and consolidations

 

(279)

 

 

17

 

 

(296)

 

 

-

 

 

(296)

 

 

 

 

 

 

AT&T Inc.

$

39,668

 

$

27,819

 

$

11,849

 

$

6,042

 

$

5,807

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

SUPPLEMENTAL SEGMENT RECONCILIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

Dollars in millions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 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

$

52,575

 

$

30,020

 

$

22,555

 

$

6,287

 

$

16,268

 

$

(1)

 

$

16,267

  Entertainment Group

 

34,498

 

 

26,623

 

 

7,875

 

 

3,986

 

 

3,889

 

 

(1)

 

 

3,888

  Business Wireline

 

20,100

 

 

12,084

 

 

8,016

 

 

3,547

 

 

4,469

 

 

(1)

 

 

4,468

Total Communications

 

107,173

 

 

68,727

 

 

38,446

 

 

13,820

 

 

24,626

 

 

(3)

 

 

24,623

WarnerMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Turner

 

3,767

 

 

1,933

 

 

1,834

 

 

71

 

 

1,763

 

 

39

 

 

1,802

  Home Box Office

 

1,925

 

 

1,162

 

 

763

 

 

30

 

 

733

 

 

1

 

 

734

  Warner Bros.

 

4,227

 

 

3,507

 

 

720

 

 

54

 

 

666

 

 

(24)

 

 

642

  Other

 

(210)

 

 

(106)

 

 

(104)

 

 

11

 

 

(115)

 

 

(71)

 

 

(186)

Total WarnerMedia

 

9,709

 

 

6,496

 

 

3,213

 

 

166

 

 

3,047

 

 

(55)

 

 

2,992

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Vrio

 

3,710

 

 

2,894

 

 

816

 

 

559

 

 

257

 

 

24

 

 

281

  Mexico

 

2,099

 

 

2,459

 

 

(360)

 

 

383

 

 

(743)

 

 

-

 

 

(743)

Total Latin America

 

5,809

 

 

5,353

 

 

456

 

 

942

 

 

(486)

 

 

24

 

 

(462)

Xandr

 

1,174

 

 

218

 

 

956

 

 

4

 

 

952

 

 

-

 

 

952

Segment Total

 

123,865

 

 

80,794

 

 

43,071

 

 

14,932

 

 

28,139

 

 

(34)

 

 

28,105

Corporate and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Corporate

 

961

 

 

1,378

 

 

(417)

 

 

938

 

 

(1,355)

 

 

 

 

 

 

  Acquisition-related items

 

-

 

 

750

 

 

(750)

 

 

4,669

 

 

(5,419)

 

 

 

 

 

 

  Certain significant items

 

-

 

 

407

 

 

(407)

 

 

-

 

 

(407)

 

 

 

 

 

 

Eliminations and consolidations

 

(2,063)

 

 

(1,040)

 

 

(1,023)

 

 

(1)

 

 

(1,022)

 

 

 

 

 

 

AT&T Inc.

$

122,763

 

$

82,289

 

$

40,474

 

$

20,538

 

$

19,936

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

Operations and Support Expenses

 

 

EBITDA

 

 

Depreciation and Amortization

 

 

Operating Income (Loss)

 

 

Equity in Net Income (Loss) of Affiliates

 

 

Segment Contribution

Communications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Mobility

$

51,922

 

$

30,005

 

$

21,917

 

$

5,988

 

$

15,929

 

$

-

 

$

15,929

  Entertainment Group

 

37,435

 

 

28,711

 

 

8,724

 

 

4,254

 

 

4,470

 

 

-

 

 

4,470

  Business Wireline

 

21,911

 

 

13,906

 

 

8,005

 

 

3,583

 

 

4,422

 

 

-

 

 

4,422

Total Communications

 

111,268

 

 

72,622

 

 

38,646

 

 

13,825

 

 

24,821

 

 

-

 

 

24,821

WarnerMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Turner

 

323

 

 

273

 

 

50

 

 

3

 

 

47

 

 

32

 

 

79

  Home Box Office

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

  Warner Bros.

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

  Other

 

-

 

 

3

 

 

(3)

 

 

-

 

 

(3)

 

 

(55)

 

 

(58)

Total WarnerMedia

 

323

 

 

276

 

 

47

 

 

3

 

 

44

 

 

(23)

 

 

21

Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Vrio

 

4,065

 

 

3,123

 

 

942

 

 

642

 

 

300

 

 

62

 

 

362

  Mexico

 

1,989

 

 

2,345

 

 

(356)

 

 

263

 

 

(619)

 

 

-

 

 

(619)

Total Latin America

 

6,054

 

 

5,468

 

 

586

 

 

905

 

 

(319)

 

 

62

 

 

(257)

Xandr

 

992

 

 

118

 

 

874

 

 

1

 

 

873

 

 

-

 

 

873

Segment Total

 

118,637

 

 

78,484

 

 

40,153

 

 

14,734

 

 

25,419

 

 

39

 

 

25,458

Corporate and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Corporate

 

1,182

 

 

2,440

 

 

(1,258)

 

 

73

 

 

(1,331)

 

 

 

 

 

 

  Acquisition-related items

 

-

 

 

622

 

 

(622)

 

 

3,508

 

 

(4,130)

 

 

 

 

 

 

  Certain significant items

 

(89)

 

 

302

 

 

(391)

 

 

1

 

 

(392)

 

 

 

 

 

 

Eliminations and consolidations

 

(860)

 

 

17

 

 

(877)

 

 

-

 

 

(877)

 

 

 

 

 

 

AT&T Inc.

$

118,870

 

$

81,865

 

$

37,005

 

$

18,316

 

$

18,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL INCOME STATEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Consolidated Statements of Income

Dollars in millions except per share amounts

 

 

 

 

Unaudited

 

Third Quarter

 

 

 

 

 

2018

 

Accounting Impact

 

 

Historical

2018

 

2017

 

Percent

Change

 

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Service

 

$

41,297

$

(1,384)

 

$

42,681

$

36,378

 

17.3

%

Equipment

 

 

4,442

 

516

 

 

3,926

 

3,290

 

19.3

%

    Total Operating Revenues

 

45,739

 

(868)

 

 

46,607

 

39,668

 

17.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

   Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

   Equipment

 

4,828

 

-

 

 

4,828

 

4,191

 

15.2

%

   Broadcast, programming and operations

 

7,227

 

-

 

 

7,227

 

5,284

 

36.8

%

   Other cost of revenues (exclusive of depreciation

          and amortization shown separately below)

 

8,651

 

(917)

 

 

9,568

 

9,694

 

(1.3)

%

   Selling, general and administrative

 

9,598

 

(547)

 

 

10,145

 

8,650

 

17.3

%

   Depreciation and amortization

 

8,166

 

-

 

 

8,166

 

6,042

 

35.2

%

    Total Operating Expenses

 

38,470

 

(1,464)

 

 

39,934

 

33,861

 

17.9

%

Operating Income

 

7,269

 

596

 

 

6,673

 

5,807

 

14.9

%

Interest Expense

 

(2,051)

 

-

 

 

(2,051)

 

(1,686)

 

21.6

%

Equity in Net Income (Loss) of Affiliates

 

(64)

 

-

 

 

(64)

 

11

 

-

%

Other Income (Expense) - Net

 

1,053

 

-

 

 

1,053

 

842

 

25.1

%

Income Before Income Taxes

 

6,207

 

596

 

 

5,611

 

4,974

 

12.8

%

Income Tax Expense

 

1,391

 

146

 

 

1,245

 

1,851

 

(32.7)

%

Net Income

 

4,816

 

450

 

 

4,366

 

3,123

 

39.8

%

 Less: Net Income Attributable to

    Noncontrolling Interest

 

(98)

 

(5)

 

 

(93)

 

(94)

 

1.1

%

Net Income Attributable to AT&T

$

4,718

$

445

 

$

4,273

$

3,029

 

41.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share Attributable to AT&T

$

0.65

$

0.06

 

$

0.59

$

0.49

 

20.4

%

   Weighted Average Common

       Shares Outstanding (000,000)

 

7,284

 

-

 

 

7,284

 

6,162

 

18.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share Attributable to AT&T

$

0.65

$

0.06

 

$

0.59

$

0.49

 

20.4

%

   Weighted Average Common

       Shares Outstanding with Dilution (000,000)

 

7,320

 

-

 

 

7,320

 

6,182

 

18.4

%

 

15

Supplemental Mobility

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Results

Dollars in millions

 

 

 

 

Unaudited

 

Third Quarter

 

 

 

 

2018

 

Accounting Impact

 

 

Historical

2018

 

2017

 

Percent

Change

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Service

$

13,989

$

(821)

 

$

14,810

$

14,475

 

2.3

%

 

Equipment

 

3,949

 

505

 

 

3,444

 

2,895

 

19.0

%

    Total Operating Revenues

 

17,938

 

(316)

 

 

18,254

 

17,370

 

5.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support

 

10,255

 

(650)

 

 

10,905

 

10,029

 

8.7

%

    EBITDA

 

7,683

 

334

 

 

7,349

 

7,341

 

0.1

%

Depreciation and amortization

 

2,079

 

-

 

 

2,079

 

2,008

 

3.5

%

    Total Operating Expenses

 

12,334

 

(650)

 

 

12,984

 

12,037

 

7.9

%

Operating Income

 

5,604

 

334

 

 

5,270

 

5,333

 

(1.2)

%

Equity in Net Income (Loss) of Affiliates

 

(1)

 

-

 

 

(1)

 

-

 

-

%

Operating Contribution

$

5,603

$

334

 

$

5,269

$

5,333

 

(1.2)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

31.2

%

 

 

 

28.9

%

30.7

%

(180)

BP

EBITDA Margin

 

42.8

%

 

 

 

40.3

%

42.3

%

(200)

BP

EBITDA Service Margin

 

54.9

%

 

 

 

49.6

%

50.7

%

(110)

BP

 

 

Supplemental Entertainment Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Entertainment Group Results

Dollars in millions

 

 

 

 

Unaudited

 

Third Quarter

 

 

 

 

2018

 

Accounting Impact

 

 

Historical

2018

 

2017

 

Percent

Change

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Video entertainment

$

8,283

$

(113)

 

$

8,396

$

9,052

 

(7.2)

%

 

High-speed internet

 

2,045

 

-

 

 

2,045

 

1,916

 

6.7

%

 

Legacy voice and data services

 

740

 

(29)

 

 

769

 

913

 

(15.8)

%

 

Other service and equipment

 

521

 

(64)

 

 

585

 

586

 

(0.2)

%

    Total Operating Revenues

 

11,589

 

(206)

 

 

11,795

 

12,467

 

(5.4)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support

 

9,155

 

(431)

 

 

9,586

 

9,804

 

(2.2)

%

    EBITDA

 

2,434

 

225

 

 

2,209

 

2,663

 

(17.0)

%

Depreciation and amortization

 

1,331

 

-

 

 

1,331

 

1,379

 

(3.5)

%

    Total Operating Expenses

 

10,486

 

(431)

 

 

10,917

 

11,183

 

(2.4)

%

Operating Income

 

1,103

 

225

 

 

878

 

1,284

 

(31.6)

%

Equity in Net Income (Loss) of Affiliates

 

1

 

-

 

 

1

 

(1)

 

-

%

Contribution

$

1,104

$

225

 

$

879

$

1,283

 

(31.5)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

9.5

%

 

 

 

7.4

%

10.3

%

(290)

BP

EBITDA Margin

 

21.0

%

 

 

 

18.7

%

21.4

%

(270)

BP

 

16

 

Supplemental Business Wireline

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Business Wireline Results

Dollars in millions

 

 

 

 

Unaudited

 

Third Quarter

 

 

 

 

2018

 

Accounting Impact

 

 

Historical

2018

 

2017

 

Percent Change

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Strategic services

$

3,059

$

(3)

 

$

3,062

$

3,018

 

1.5

%

 

Legacy voice and data services

 

2,615

 

(242)

 

 

2,857

 

3,343

 

(14.5)

%

 

Other service and equipment

 

1,029

 

(69)

 

 

1,098

 

917

 

19.7

%

    Total Operating Revenues

 

6,703

 

(314)

 

 

7,017

 

7,278

 

(3.6)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support

 

4,030

 

(339)

 

 

4,369

 

4,635

 

(5.7)

%

    EBITDA

 

2,673

 

25

 

 

2,648

 

2,643

 

0.2

%

Depreciation and amortization

 

1,197

 

-

 

 

1,197

 

1,189

 

0.7

%

    Total Operating Expenses

 

5,227

 

(339)

 

 

5,566

 

5,824

 

(4.4)

%

Operating Income

 

1,476

 

25

 

 

1,451

 

1,454

 

(0.2)

%

Equity in Net Income (Loss) of Affiliates

 

(1)

 

-

 

 

(1)

 

1

 

-

%

Operating Contribution

$

1,475

$

25

 

$

1,450

$

1,455

 

(0.3)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

22.0

%

 

 

 

20.7

%

20.0

%

70

BP

EBITDA Margin

 

39.9

%

 

 

 

37.7

%

36.3

%

140

BP

 

 

Supplemental Latin America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Segment Results

Dollars in millions

 

 

 

 

Unaudited

 

Third Quarter

 

 

 

 

2018

 

Accounting Impact

 

 

Historical

2018

 

2017

 

Percent

Change

Segment Operating Revenues

 

 

 

 

 

 

 

 

 

 

  

 

 

Vrio

$

1,102

$

-

 

$

1,102

$

1,363

 

(19.1)

%

 

Mexico

 

731

 

(24)

 

 

755

 

736

 

2.6

%

    Total Segment Operating Revenues

 

1,833

 

(24)

 

 

1,857

 

2,099

 

(11.5)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Expenses

 

 

 

 

 

 

 

 

 

 

  

 

Operations and support

 

1,746

 

(38)

 

 

1,784

 

1,937

 

(7.9)

%

    EBITDA

 

87

 

14

 

 

73

 

162

 

(54.9)

%

Depreciation and amortization

 

297

 

-

 

 

297

 

304

 

(2.3)

%

    Total Segment Operating Expenses

 

2,043

 

(38)

 

 

2,081

 

2,241

 

(7.1)

%

Segment Operating Income (Loss)

 

(210)

 

14

 

 

(224)

 

(142)

 

(57.7)

%

Equity in Net Income of Affiliates

 

9

 

-

 

 

9

 

17

 

(47.1)

%

Segment Contribution

$

(201)

$

14

 

$

(215)

$

(125)

 

(72.0)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

(11.5)

%

 

 

 

(12.1)

%

(6.8)

%

(530)

BP

EBITDA Margin

 

4.7

%

 

 

 

3.9

%

7.7

%

(380)

BP

 

17

 

Supplemental 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Operating Results

Dollars in millions

 

 

 

 

Unaudited

 

Third Quarter

 

 

 

 

2018

 

Accounting Impact

 

 

Historical

2018

 

2017

 

Percent

Change

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless service

$

1,877

$

(206)

 

$

2,083

$

2,023

 

3.0

%

 

Strategic services

 

3,059

 

(3)

 

 

3,062

 

3,018

 

1.5

%

 

Legacy voice and data services

 

2,615

 

(242)

 

 

2,857

 

3,343

 

(14.5)

%

 

Other service and equipment

 

1,029

 

(69)

 

 

1,098

 

917

 

19.7

%

 

Wireless equipment

 

590

 

167

 

 

423

 

340

 

24.4

%

    Total Operating Revenues

 

9,170

 

(353)

 

 

9,523

 

9,641

 

(1.2)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support

 

5,598

 

(404)

 

 

6,002

 

6,096

 

(1.5)

%

    EBITDA

 

3,572

 

51

 

 

3,521

 

3,545

 

(0.7)

%

Depreciation and amortization

 

1,499

 

-

 

 

1,499

 

1,466

 

2.3

%

    Total Operating Expenses

 

7,097

 

(404)

 

 

7,501

 

7,562

 

(0.8)

%

Operating Income

 

2,073

 

51

 

 

2,022

 

2,079

 

(2.7)

%

Equity in Net Income (Loss) of Affiliates

 

(1)

 

-

 

 

(1)

 

-

 

-

%

Operating Contribution

$

2,072

$

51

$

 

2,021

$

2,079

 

(2.8)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

22.6

%

 

 

 

21.2

%

21.6

%

(40)

BP

EBITDA Margin

 

39.0

%

 

 

 

37.0

%

36.8

%

20

BP

 

 

 
18

Discussion and Reconciliation of Non-GAAP Measures

 

Supplemental Operational Measures

We provide a supplemental discussion of our business solutions operations that is calculated by combining our Mobility and Business Wireline operating units, and then adjusting to remove non-business operations. The following table presents a reconciliation of our supplemental Business Solutions results.

Supplemental Operational Measure

 

 

Three Months Ended

 

 

September 30, 2018

 

 

September 30, 2017

 

 

Mobility

 

Business Wireline

 

Adjustments1

 

Business Solutions

 

 

Mobility

 

Business
Wireline

 

Adjustments1

 

Business Solutions

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Wireless service

$

13,989

$

-

$

(12,112)

$

1,877

 

$

14,475

$

-

$

(12,452)

$

2,023

  Strategic services

 

-

 

3,059

 

-

 

3,059

 

 

-

 

3,018

 

-

 

3,018

  Legacy voice and data services

 

-

 

2,615

 

-

 

2,615

 

 

-

 

3,343

 

-

 

3,343

  Other services and equipment

 

-

 

1,029

 

-

 

1,029

 

 

-

 

917

 

-

 

917

  Wireless equipment

 

3,949

 

-

 

(3,359)

 

590

 

 

2,895

 

-

 

(2,555)

 

340

Total Operating Revenues

 

17,938

 

6,703

 

(15,471)

 

9,170

 

 

17,370

 

7,278

 

(15,007)

 

9,641

  Operations and support

 

10,255

 

4,030

 

(8,687)

 

5,598

 

 

10,029

 

4,635

 

(8,568)

 

6,096

EBITDA

 

7,683

 

2,673

 

(6,784)

 

3,572

 

 

7,341

 

2,643

 

(6,439)

 

3,545

  Depreciation and amortization

 

2,079

 

1,197

 

(1,777)

 

1,499

 

 

2,008

 

1,189

 

(1,731)

 

1,466

Total Operating Expenses

 

12,334

 

5,227

 

(10,464)

 

7,097

 

 

12,037

 

5,824

 

(10,299)

 

7,562

Operating Income

$

5,604

$

1,476

$

(5,007)

$

2,073

 

$

5,333

$

1,454

$

(4,708)

$

2,079

Equity in net Income of Affiliates

 

(1)

 

(1)

 

1

 

(1)

 

 

-

 

1

 

(1)

 

-

Contribution

 

5,603

 

1,475

 

(5,006)

 

2,072

 

 

5,333

 

1,455

 

(4,709)

 

2,079

1 Non-business wireless reported in the Communication segment under the Mobility business unit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Operational Measure

 

 

Nine Months Ended

 

 

September 30, 2018

 

 

September 30, 2017

 

 

Mobility

 

Business Wireline

 

Adjustments1

 

Business Solutions

 

 

Mobility

 

Business
Wireline

 

Adjustments1

 

Business Solutions

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Wireless service

$

41,074

$

-

$

(35,577)

$

5,497

 

$

43,414

$

-

$

(37,384)

$

6,030

  Strategic services

 

-

 

9,168

 

-

 

9,168

 

 

-

 

8,880

 

-

 

8,880

  Legacy voice and data services

 

-

 

8,176

 

-

 

8,176

 

 

-

 

10,314

 

-

 

10,314

  Other services and equipment

 

-

 

2,756

 

-

 

2,756

 

 

-

 

2,717

 

-

 

2,717

  Wireless equipment

 

11,501

 

-

 

(9,749)

 

1,752

 

 

8,508

 

-

 

(7,520)

 

988

Total Operating Revenues

 

52,575

 

20,100

 

(45,326)

 

27,349

 

 

51,922

 

21,911

 

(44,904)

 

28,929

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Operations and support

 

30,020

 

12,084

 

(25,296)

 

16,808

 

 

30,005

 

13,906

 

(25,764)

 

18,147

EBITDA

 

22,555

 

8,016

 

(20,030)

 

10,541

 

 

21,917

 

8,005

 

(19,140)

 

10,782

  Depreciation and amortization

 

6,287

 

3,547

 

(5,390)

 

4,444

 

 

5,988

 

3,583

 

(5,162)

 

4,409

Total Operating Expenses

 

36,307

 

15,631

 

(30,686)

 

21,252

 

 

35,993

 

17,489

 

(30,926)

 

22,556

Operating Income

$

16,268

$

4,469

$

(14,640)

$

6,097

 

$

15,929

$

4,422

$

(13,978)

$

6,373

Equity in net Income of Affiliates

 

(1)

 

(1)

 

1

 

(1)

 

 

-

 

-

 

-

 

-

Contribution

 

16,267

 

4,468

 

(14,639)

 

6,096

 

 

15,929

 

4,422

 

(13,978)

 

6,373

1 Non-business wireless reported in the Communication segment under the Mobility business unit.

 

 

1