We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
| Name | Symbol | Market | Type |
|---|---|---|---|
| At&t Inc 5.500% | LSE:58KN | London | Bond |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 121.921 | 0 | 00:00:00 |
From Feb 2020 to Feb 2025
TIDM58KN
RNS Number : 8713Y
AT & T Inc.
08 December 2017
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, 2017
AT&T INC.
(Exact Name of Registrant as Specified in Charter)
Hot Features
Premium
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 2.02 Results of Operations and Financial Condition.
The registrant announced on October 24, 2017, its results of operations for the third quarter of 2017. The text of the press release and accompanying financial information are attached as exhibits and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
The following exhibits are furnished as part of this report:
(d) Exhibits
99.1 Press release dated October 24, 2017 reporting financial results for the third quarter ended
September 30, 2017.
99.2 AT&T Inc. selected financial statements and operating data.
99.3 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, 2017 By: /s/ Debra L. Dial
Debra L. Dial
Senior Vice President and Controller
AT&T Reports Third-Quarter Results
-- Consolidated revenues of $39.7 billion -- Operating income of $6.4 billion -- Net income attributable to AT&T of $3.0 billion
-- Diluted EPS of $0.49 as reported and $0.74 as adjusted, compared to $0.54 and $0.74 in the year-ago quarter
-- Cash from operations of $11.1 billion -- Free cash flow of $5.9 billion
Company Maintains Full-Year Guidance
-- U.S. wireless results:
o Expanding operating income margin of 30.5% with best-ever EBITDA margins of 42.0% and wireless service margin of 50.4%
o Best-ever third-quarter postpaid phone churn of 0.84%, showing the success of video and wireless bundling strategy
o Continued growth of postpaid smartphone base
-- 3.0 million total wireless net adds
o 2.3 million in U.S., driven by connected devices, prepaid and postpaid
o Nearly 700,000 Mexico net adds
-- Entertainment Group results:
o 125,000 IP broadband net adds; 29,000 total broadband net adds
o More than 6 million customer locations passed with fiber
o Nearly 300,000 DIRECTV NOW net adds helped offset traditional TV subscriber decline
-- International revenues up 11.7% with continued strong revenue growth in Mexico
Note: AT&T's third-quarter earnings conference call will be webcast at 4:30 p.m. ET on Tuesday, October 24, 2017. The webcast and related materials will be available on AT&T's Investor Relations website at https://investors.att.com.
dALLAS, October 24, 2017 - AT&T Inc. (NYSE:T) reported record wireless EBITDA margins and phone churn and strong wireless and DIRECTV NOW subscriber gains in the third quarter.
"We look forward to closing our acquisition of Time Warner and bringing together premium content with world-class distribution to deliver a better entertainment experience for consumers and more effective targeted advertising," said Randall Stephenson, AT&T Inc. chairman and CEO. "We're also on track to have one of the largest high-speed internet networks in the U.S., reaching more than 50 million customer locations with competitive high speeds. This expansion will make our bundled video, mobile and broadband services even more compelling.
"We continued to operate our business efficiently in the quarter. At a time of transformation in our wireless and video businesses, as well as investment in growth opportunities, we're able to maintain our full-year guidance. Wireless margins and phone churn continue to run at record levels, our fiber deployment is helping drive broadband growth and DIRECTV NOW had another strong quarter. We're also pleased with our FirstNet progress. Already 27 states and territories have opted in, and we're working closely with them as we prepare to deploy the FirstNet network."
Consolidated Financial Results
AT&T's consolidated revenues for the third quarter totaled $39.7 billion versus
$40.9 billion in the year-ago quarter, primarily due to declines in legacy wireline services and consumer mobility. Excluding the impact of hurricanes and earthquakes in the third quarter, revenues would have been $39.8 billion. Compared with results for the third quarter of 2016, operating expenses were $33.3 billion versus $34.5 billion; operating income was flat versus the year-ago quarter at $6.4 billion; and operating income margin was 16.1% versus 15.7%. When adjusting for amortization, merger- and integration-related expenses and other items, operating income was $8.1 billion versus $8.3 billion in the year-ago quarter and operating income margin was 20.3%, the same as in the year-ago quarter.
Third-quarter net income attributable to AT&T totaled $3.0 billion, or $0.49 per diluted share, compared with $3.3 billion, or $0.54 per diluted share, in the year-ago quarter. Adjusting for $0.25 of costs for amortization, merger- and integration-related expenses and other items including hurricane and earthquake impacts, earnings per diluted share was $0.74, the same as in the year-ago quarter.
Cash from operating activities was $11.1 billion in the third quarter and $29.3 billion year to date. Capital expenditures were $5.3 billion in the quarter and $16.5 billion year to date.
Free cash flow - cash from operating activities minus capital expenditures - was $5.9 billion for the quarter and $12.8 billion year to date.
*About AT&T
AT&T Inc. (NYSE:T) is a holding company. AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc. Additional information about AT&T Inc. is available at about.att.com.
(c) 2017 AT&T Intellectual Property. All rights reserved. AT&T, the Globe logo and other marks are trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. 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 and revise statements contained in this news release based on new information or otherwise.
This news release may contain certain non-GAAP financial measures. Reconciliations between the non- GAAP financial measures and the GAAP financial measures are available on the company's website at https://investors.att.com.
For more information, contact:
Erin McGrath - AT&T Global Media Relations
Email: erin.mcgrath@att.com
Phone: (214) 862-0651
AT&T Inc.
Financial Data
Consolidated Statements of Income
----------------------------------------------------------------------------------------------------------
Dollars in millions except per share
amounts Three Months Ended Nine Months Ended
Unaudited September 30, Percent September 30, Percent
---------------------- ---------------------
2017 2016 Change 2017 2016 Change
------------------------------------ -------- ------- --------- ------- ------- ---------
Operating Revenues
Service $ 36,378 $ 37,272 -2.4% $ 109,372 $111,515 -1.9%
Equipment 3,290 3,618 -9.1% 9,498 10,430 -8.9%
------------------------------------- -------- ------- ------- -------
Total Operating Revenues 39,668 40,890 -3.0% 118,870 121,945 -2.5%
------------------------------------- -------- ------- ------- -------
Operating Expenses
Cost of services and sales
Equipment 4,191 4,455 -5.9% 12,177 13,090 -7.0%
Broadcast, programming and
operations 5,284 4,909 7.6% 15,156 14,239 6.4%
Other cost of services (exclusive
of depreciation
and amortization shown separately
below) 9,431 9,526 -1.0% 27,714 28,436 -2.5%
Selling, general and administrative 8,317 9,013 -7.7% 24,917 26,363 -5.5%
Depreciation and amortization 6,042 6,579 -8.2% 18,316 19,718 -7.1%
------------------------------------- -------- ------- ------- -------
Total Operating Expenses 33,265 34,482 -3.5% 98,280 101,846 -3.5%
------------------------------------- -------- ------- ------- -------
Operating Income 6,403 6,408 -0.1% 20,590 20,099 2.4%
------------------------------------- -------- ------- ------- -------
Interest Expense (1,686) (1,224) 37.7% (4,374) (3,689) 18.6%
Equity in Net Income (Loss) of
Affiliates 11 16 -31.3% (148) 57 -%
Other Income (Expense) - Net 246 (7) -% 354 154 -%
------------------------------------- -------- ------- ------- -------
Income Before Income Taxes 4,974 5,193 -4.2% 16,422 16,621 -1.2%
Income Tax Expense 1,851 1,775 4.3% 5,711 5,803 -1.6%
------------------------------------- -------- ------- ------- -------
Net Income 3,123 3,418 -8.6% 10,711 10,818 -1.0%
------------------------------------- -------- ------- ------- -------
Less: Net Income Attributable to
Noncontrolling Interest (94) (90) 4.4% (298) (279) 6.8%
------------------------------------- -------- ------- ------- -------
Net Income Attributable to AT&T $ 3,029 $ 3,328 -9.0% $ 10,413 $ 10,539 -1.2%
===================================== ======== ======= ======= =======
Basic Earnings Per Share Attributable
to AT&T $ 0.49 $ 0.54 -9.3% $ 1.69 $ 1.70 -0.6%
Weighted Average Common
Shares Outstanding (000,000) 6,162 6,168 -0.1% 6,164 6,171 -0.1%
Diluted Earnings Per Share
Attributable to AT&T $ 0.49 $ 0.54 -9.3% $ 1.69 $ 1.70 -0.6%
Weighted Average Common
Shares Outstanding with Dilution
(000,000) 6,182 6,189 -0.1% 6,184 6,191 -0.1%
------------------------------------- -------- ------- ----- ------- ------- -----
AT&T Inc.
Financial Data
Consolidated Balance Sheets
------------------------------------------------------------------------------------------------------
Dollars in millions
Unaudited Sep. 30, Dec. 31,
2017 2016
------------------------------------------------------------------------------- -------- --------
Assets
Current Assets
Cash and cash equivalents $ 48,499 $ 5,788
Accounts receivable - net of allowances for doubtful accounts of $741 and $661 15,876 16,794
Prepaid expenses 1,258 1,555
Other current assets 10,724 14,232
-------------------------------------------------------------------------------- -------- --------
Total current assets 76,357 38,369
-------------------------------------------------------------------------------- -------- --------
Property, Plant and Equipment - Net 126,462 124,899
Goodwill 105,668 105,207
Licenses 96,071 94,176
Customer Lists and Relationships - Net 11,573 14,243
Other Intangible Assets - Net 7,775 8,441
Investments in Equity Affiliates 1,627 1,674
Other Assets 18,332 16,812
-------------------------------------------------------------------------------- -------- --------
Total Assets $ 443,865 $ 403,821
================================================================================ ======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year $ 8,551 $ 9,832
Accounts payable and accrued liabilities 28,928 31,138
Advanced billing and customer deposits 4,503 4,519
Accrued taxes 2,703 2,079
Dividends payable 3,008 3,008
-------------------------------------------------------------------------------- -------- --------
Total current liabilities 47,693 50,576
-------------------------------------------------------------------------------- -------- --------
Long-Term Debt 154,728 113,681
-------------------------------------------------------------------------------- -------- --------
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes 64,381 60,128
Postemployment benefit obligation 31,231 33,578
Other noncurrent liabilities 19,723 21,748
-------------------------------------------------------------------------------- -------- --------
Total deferred credits and other noncurrent liabilities 115,335 115,454
-------------------------------------------------------------------------------- -------- --------
Stockholders' Equity
Common stock 6,495 6,495
Additional paid-in capital 89,527 89,604
Retained earnings 36,074 34,734
Treasury stock (12,716) (12,659)
Accumulated other comprehensive income 5,580 4,961
Noncontrolling interest 1,149 975
-------------------------------------------------------------------------------- -------- --------
Total stockholders' equity 126,109 124,110
-------------------------------------------------------------------------------- -------- --------
Total Liabilities and Stockholders' Equity $ 443,865 $ 403,821
================================================================================ ======== ========
AT&T Inc.
Financial Data
Consolidated Statements of Cash Flows
---------------------------------------------------------------------------------------------------------
Dollars in millions Nine Months Ended
Unaudited September 30,
2017 2016
---------------------------------------------------------------------------------- -------- --------
Operating Activities
Net income $ 10,711 $ 10,818
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 18,316 19,718
Undistributed loss (earnings) from investments in equity affiliates 171 (22)
Provision for uncollectible accounts 1,216 1,036
Deferred income tax expense 3,254 3,011
Net loss (gain) from sale of investments, net of impairments (114) (88)
Actuarial loss (gain) on pension and postretirement benefits (259) -
Changes in operating assets and liabilities:
Accounts receivable (652) (1,108)
Other current assets (106) 1,805
Accounts payable and other accrued liabilities (1,437) (1,173)
Equipment installment receivables and related sales 1,116 207
Deferred fulfillment costs (1,102) (1,883)
Retirement benefit funding (420) (770)
Other - net (1,420) (2,349)
----------------------------------------------------------------------------------- -------- --------
Total adjustments 18,563 18,384
----------------------------------------------------------------------------------- -------- --------
Net Cash Provided by Operating Activities 29,274 29,202
----------------------------------------------------------------------------------- -------- --------
Investing Activities
Capital expenditures:
Purchase of property and equipment (15,756) (15,283)
Interest during construction (718) (669)
Acquisitions, net of cash acquired 1,154 (2,922)
Dispositions 56 184
(Purchases) sales of securities, net (2) 501
Net Cash Used in Investing Activities (15,266) (18,189)
----------------------------------------------------------------------------------- -------- --------
Financing Activities
Issuance of long-term debt 46,761 10,140
Repayment of long-term debt (10,309) (10,688)
Purchase of treasury stock (460) (444)
Issuance of treasury stock 26 137
Dividends paid (9,030) (8,850)
Other 1,715 (534)
----------------------------------------------------------------------------------- -------- --------
Net Cash Provided by (Used in) Financing Activities 28,703 (10,239)
----------------------------------------------------------------------------------- -------- --------
Net increase in cash and cash equivalents 42,711 774
Cash and cash equivalents beginning of year 5,788 5,121
----------------------------------------------------------------------------------- -------- --------
Cash and Cash Equivalents End of Period $ 48,499 $ 5,895
=================================================================================== ======== ========
AT&T Inc.
Consolidated Supplementary Data
Supplementary Financial Data
------------------------------------------------------------------------------------------------------------
Dollars in millions except per
share amounts Three Months Ended Nine Months Ended
Unaudited September 30, Percent September 30, Percent
---------------------- -------------------------
2017 2016 Change 2017 2016 Change
---------------------------------- -------- ------- --------- ------- ------- ---------
Capital expenditures
Purchase of property and equipment $ 5,006 $ 5,581 -10.3% $ 15,756$ 15,283 3.1%
Interest during construction $ 245 $ 232 5.6% $ 718$ 669 7.3%
Dividends Declared per Share $ 0.49 $ 0.48 2.1% $ 1.47$ 1.44 2.1%
End of Period Common Shares
Outstanding (000,000) 6,139 6,141 -%
Debt Ratio 56.4% 50.1% 630 BP
Total Employees 256,800 273,140 -6.0%
----------------------------------- -------- ------- ----- ------- ------- -----
Supplementary Operating Data
------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited September 30, Percent
-------------------------
2017 2016 Change
---------------------------------- -------- ------- ----- ------- ------- ---------
Wireless Subscribers
Domestic 138,826 133,338 4.1%
Mexico 13,779 10,698 28.8%
---------------------------------- -------- ------- ----- ------- -------
Total Wireless Subscribers 152,605 144,036 5.9%
----------------------------------- -------- ------- ----- ------- -------
Total Branded Wireless Subscribers 106,098 100,821 5.2%
Video Connections
Domestic 25,110 25,321 -0.8%
PanAmericana 8,201 7,139 14.9%
Brazil 5,289 5,337 -0.9%
---------------------------------- -------- ------- ----- ------- -------
Total Video Connections 38,600 37,797 2.1%
----------------------------------- -------- ------- ----- ------- -------
Broadband Connections
IP 14,384 13,715 4.9%
DSL 1,331 1,903 -30.1%
---------------------------------- -------- ------- ----- ------- -------
Total Broadband Connections 15,715 15,618 0.6%
----------------------------------- -------- ------- ----- ------- -------
Voice Connections
Network Access Lines 12,249 14,603 -16.1%
U-verse VoIP Connections 5,774 5,707 1.2%
---------------------------------- -------- ------- ----- ------- -------
Total Retail Consumer Voice
Connections 18,023 20,310 -11.3%
=================================== ======== ======= ===== ======= ======= =====
Three Months Ended Nine Months Ended
September 30, Percent September 30, Percent
--------------------- -------------------
2017 2016 Change 2017 2016 Change
----------------------------------- --------- --------- --------- --------- -------- ---------
Wireless Net Additions
Domestic 2,323 1,532 51.6% 6,686 4,674 43.0%
Mexico 697 743 -6.2% 1,806 2,014 -10.3%
------------------------------------ --------- --------- --------- --------
Total Wireless Net Additions 3,020 2,275 32.7% 8,492 6,688 27.0%
------------------------------------ --------- --------- --------- --------
Total Branded Wireless Net Additions 1,156 1,285 -10.0% 2,782 3,881 -28.3%
Video Net Additions
Domestic (90) (2) -% (450) (103) -%
PanAmericana 98 (36) -% 163 73 -%
Brazil (230) (12) -% (260) (107) -%
------------------------------------ --------- --------- --------- --------
Total Video Net Additions (222) (50) -% (547) (137) -%
------------------------------------ --------- --------- --------- --------
Broadband Net Additions
IP 150 171 -12.3% 520 447 16.3%
DSL (121) (194) 37.6% (410) (607) 32.5%
------------------------------------ --------- --------- --------- --------
Total Broadband Net Additions 29 (23) -% 110 (160) -%
------------------------------------ --------- --------- ----- --------- -------- -----
BUSINESS SOLUTIONS
The Business Solutions segment provides services to business customers, including multinational
companies; governmental and wholesale customers; and individual subscribers who purchase wireless
services through employer-sponsored plans. We provide advanced IP-based services including
Virtual Private Networks (VPN); Ethernet-related products and broadband, collectively referred
to as strategic business services; as well as traditional data and voice products. We utilize
our wireless and wired networks (referred to as "wired" or "wireline") to provide a complete
communications solution to our business customers.
Segment Results
--------------------------------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Nine Months Ended
Unaudited September 30, Percent September 30, Percent
-------------------------- -----------------------
2017 2016 Change 2017 2016 Change
---------------------------------- ------ ------ --------- ------ ------ ---------
Segment Operating Revenues
Wireless service $ 8,034$ 8,050 -0.2% $23,969$ 23,868 0.4%
Fixed strategic services 3,087 2,913 6.0% 9,089 8,469 7.3%
Legacy voice and data services 3,434 4,042 -15.0% 10,572 12,577 -15.9%
Other service and equipment 852 886 -3.8% 2,513 2,619 -4.0%
Wireless equipment 1,654 1,876 -11.8% 4,873 5,422 -10.1%
---------------------------------- ------ ------ ------ ------
Total Segment Operating Revenues 17,061 17,767 -4.0% 51,016 52,955 -3.7%
----------------------------------- ------ ------ ------ ------
Segment Operating Expenses
Operations and support expenses 10,233 10,925 -6.3% 30,722 32,584 -5.7%
Depreciation and amortization 2,325 2,539 -8.4% 6,972 7,568 -7.9%
----------------------------------- ------ ------ ------ ------
Total Segment Operating Expenses 12,558 13,464 -6.7% 37,694 40,152 -6.1%
----------------------------------- ------ ------ ------ ------
Segment Operating Income 4,503 4,303 4.6% 13,322 12,803 4.1%
Equity in Net Income of Affiliates - - -% - - -%
----------------------------------- ------ ------ ------ ------
Segment Contribution $ 4,503$ 4,303 4.6% $13,322$ 12,803 4.1%
=================================== ====== ====== ====== ======
Segment Operating Income Margin 26.4% 24.2% 26.1% 24.2%
----------------------------------- ------ ------ ----- ------ ------ -----
Supplementary Operating Data
--------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited September 30, Percent
-----------------------
2017 2016 Change
---------------------------------- ------ ------ ----- ------ ------ ---------
Business Solutions Wireless
Subscribers
Postpaid/Branded 51,412 50,014 2.8%
Reseller 77 58 32.8%
Connected Devices 35,909 29,355 22.3%
---------------------------------- ------ ------ ----- ------ ------
Total Business Solutions Wireless
Subscribers 87,398 79,427 10.0%
----------------------------------- ------ ------ ----- ------ ------
Business Solutions IP Broadband Connections 1,017 963 5.6%
=========================================================== ===== ====== ====== =====
Three Months Ended Nine Months Ended
September 30, Percent September 30, Percent
-------------------------- -----------------------
2017 2016 Change 2017 2016 Change
---------------------------------- ------ ------ --------- ------ ------ ---------
Business Solutions Wireless Net
Additions
Postpaid/Branded 15 191 -92.1% (74) 509 -%
Reseller 2 1 -% 3 (34) -%
Connected Devices 2,292 1,290 77.7% 7,015 4,067 72.5%
---------------------------------- ------ ------ ------ ------
Total Business Solutions Wireless
Net Additions 2,309 1,482 55.8% 6,944 4,542 52.9%
----------------------------------- ------ ------ ------ ------
Business Solutions Wireless
Postpaid Churn 1.01% 0.97% 4 BP 1.02% 0.97% 5 BP
----------------------------------- ------ ------ ------ ------
Business Solutions IP Broadband
Net Additions 25 15 66.7% 41 52 -21.2%
----------------------------------- ------ ------ ----- ------ ------ -----
ENTERTAINMENT GROUP
The Entertainment Group segment provides video, internet, voice communication, and interactive
and targeted advertising services to customers located in the U.S. or in U.S. territories.
We utilize our copper and IP-based wired network and/or our satellite technology.
Segment Results
--------------------------------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Nine Months Ended
Unaudited September 30, Percent September 30, Percent
--------------------------- ------------------------
2017 2016 Change 2017 2016 Change
-------------------------------- ------- ------ --------- ------ ------- ---------
Segment Operating Revenues
Video entertainment $ 9,200$ 9,026 1.9% $27,373$ 26,893 1.8%
High-speed internet 1,916 1,892 1.3% 5,784 5,562 4.0%
Legacy voice and data services 949 1,168 -18.8% 3,010 3,725 -19.2%
Other service and equipment 583 634 -8.0% 1,786 1,909 -6.4%
-------------------------------- ------- ------ ------ -------
Total Segment Operating Revenues 12,648 12,720 -0.6% 37,953 38,089 -0.4%
--------------------------------- ------- ------ ------ -------
Segment Operating Expenses
Operations and support expenses 9,953 9,728 2.3% 29,112 28,875 0.8%
Depreciation and amortization 1,379 1,504 -8.3% 4,256 4,481 -5.0%
--------------------------------- ------- ------ ------ -------
Total Segment Operating
Expenses 11,332 11,232 0.9% 33,368 33,356 -%
--------------------------------- ------- ------ ------ -------
Segment Operating Income 1,316 1,488 -11.6% 4,585 4,733 -3.1%
Equity in Net Income (Loss) of
Affiliates (6) - -% (23) 1 -%
--------------------------------- ------- ------ ------ -------
Segment Contribution $ 1,310$ 1,488 -12.0% $ 4,562$ 4,734 -3.6%
================================= ======= ====== ====== =======
Segment Operating Income Margin 10.4% 11.7% 12.1% 12.4%
--------------------------------- ------- ------ ----- ------ ------- -----
Supplementary Operating Data
--------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands Nine Months Ended
Unaudited September 30, Percent
------------------------
2017 2016 Change
-------------------------------- ------- ------ --------- ------ ------- ---------
Video Connections
Satellite 20,605 20,777 -0.8%
U-verse 3,691 4,515 -18.3%
DIRECTV NOW 787 - -%
-------------------------------- ------- ------ ----- ------ -------
Total Video Connections 25,083 25,292 -0.8%
--------------------------------- ------- ------ ----- ------ -------
Broadband Connections
IP 13,367 12,752 4.8%
DSL 964 1,424 -32.3%
-------------------------------- ------- ------ ----- ------ -------
Total Broadband Connections 14,331 14,176 1.1%
--------------------------------- ------- ------ ----- ------ -------
Voice Connections
Retail Consumer Switched Access
Lines 4,996 6,155 -18.8%
U-verse Consumer VoIP
Connections 5,337 5,378 -0.8%
-------------------------------- ------- ------ ----- ------ -------
Total Retail Consumer Voice
Connections 10,333 11,533 -10.4%
================================= ======= ====== ===== ====== ======= =====
Three Months Ended Nine Months Ended
September 30, Percent September 30, Percent
--------------------------- ------------------------
2017 2016 Change 2017 2016 Change
-------------------------------- ------- ------ --------- ------ ------- ---------
Video Net Additions
Satellite (251) 323 -% (407) 993 -%
U-verse (134) (326) 58.9% (562) (1,099) 48.9%
DIRECTV NOW 296 - -% 520 - -%
-------------------------------- ------- ------ ------ -------
Total Video Net Additions (89) (3) -% (449) (106) -%
--------------------------------- ------- ------ ------ -------
Broadband Net Additions
IP 125 156 -19.9% 479 396 21.0%
DSL (96) (161) 40.4% (327) (506) 35.4%
-------------------------------- ------- ------ ------ -------
Total Broadband Net Additions 29 (5) -% 152 (110) -%
--------------------------------- ------- ------ ----- ------ ------- -----
CONSUMER MOBILITY
The Consumer Mobility segment provides nationwide wireless service to consumers and wholesale
and resale wireless subscribers located in the U.S. or in U.S. territories. We utilize our
U.S. wireless network to provide voice and data services, including high-speed internet, video,
and home monitoring services.
Segment Results
--------------------------------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Nine Months Ended
Unaudited September 30, Percent September 30, Percent
--------------------------- -------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------ --- ------ --------- ------- ------- ---------
Segment Operating Revenues
Service $ 6,507$ 6,914 -5.9% $ 19,644$ 20,805 -5.6%
Equipment 1,241 1,353 -8.3% 3,635 3,976 -8.6%
------------------------------- ------ --- ------ ------- -------
Total Segment Operating
Revenues 7,748 8,267 -6.3% 23,279 24,781 -6.1%
-------------------------------- ------ --- ------ ------- -------
Segment Operating Expenses
Operations and support expenses 4,551 4,751 -4.2% 13,599 14,343 -5.2%
Depreciation and amortization 877 944 -7.1% 2,621 2,798 -6.3%
-------------------------------- ------ --- ------ ------- -------
Total Segment Operating
Expenses 5,428 5,695 -4.7% 16,220 17,141 -5.4%
-------------------------------- ------ --- ------ ------- -------
Segment Operating Income 2,320 2,572 -9.8% 7,059 7,640 -7.6%
Equity in Net Income of
Affiliates - - -% - - -%
-------------------------------- ------ --- ------ ------- -------
Segment Contribution $ 2,320$ 2,572 -9.8% $ 7,059$ 7,640 -7.6%
================================ ====== ====== ======= =======
Segment Operating Income Margin 29.9% 31.1% 30.3% 30.8%
-------------------------------- ------ ------ ----- ------- ------- -----
Supplementary Operating Data
--------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited September 30, Percent
-------------------------
2017 2016 Change
------------------------------- ------ --- ------ ----- ------- ------- ---------
Consumer Mobility Subscribers
Postpaid 26,003 27,374 -5.0%
Prepaid 15,136 13,035 16.1%
------------------------------- ------ --- ------ ----- ------- -------
Branded 41,139 40,409 1.8%
Reseller 9,800 12,566 -22.0%
Connected Devices 489 936 -47.8%
-------------------------------- ------ --- ------ ----- ------- -------
Total Consumer Mobility
Subscribers 51,428 53,911 -4.6%
================================ ====== === ====== ===== ======= ======= =====
Three Months Ended Nine Months Ended
September 30, Percent September 30, Percent
--------------------------- -------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------ --- ------ --------- ------- ------- ---------
Consumer Mobility Net Additions
Postpaid 102 21 -% 127 89 42.7%
Prepaid(1) 324 304 6.6% 873 1,169 -25.3%
------------------------------- ------ --- ------ ------- -------
Branded 426 325 31.1% 1,000 1,258 -20.5%
Reseller (394) (316) -24.7% (1,345) (1,140) -18.0%
Connected Devices(1) (18) 41 -% 87 14 -%
-------------------------------- ------ --- ------ ------- -------
Total Consumer Mobility Net
Additions 14 50 -72.0% (258) 132 -%
-------------------------------- ------ --- ------ ------- -------
Total Churn 2.37% 2.11% 26 BP 2.32% 2.06% 26 BP
Postpaid Churn 1.17% 1.19% -2 BP 1.16% 1.17% -1 BP
-------------------------------- ------ ------ ----- ------- ------- -----
(1) Effective July 1, 2017 we prospectively reclassified prepaid internet of things (IoT)
connections from connected devices to prepaid.
INTERNATIONAL
The International segment provides entertainment services in Latin America and wireless services
in Mexico. Video entertainment services are provided to primarily residential customers using
satellite technology. We utilize our regional and national wireless networks in Mexico to
provide consumer and business customers with wireless data and voice communication services.
Our international subsidiaries conduct business in their local currency and operating results
are converted to U.S. dollars using official exchange rates.
Segment Results
--------------------------------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Nine Months Ended
Unaudited September 30, Percent September 30, Percent
-------------------------- -----------------------
2017 2016 Change 2017 2016 Change
---------------------------------- ------ --- ----- --------- ------ ------ ---------
Segment Operating Revenues
Video entertainment $ 1,363$ 1,297 5.1% $ 4,065$ 3,649 11.4%
Wireless service 536 484 10.7% 1,546 1,428 8.3%
Wireless equipment 200 98 -% 443 297 49.2%
---------------------------------- ------ --- ----- ------ ------
Total Segment Operating Revenues 2,099 1,879 11.7% 6,054 5,374 12.7%
----------------------------------- ------ --- ----- ------ ------
Segment Operating Expenses
Operations and support expenses 1,937 1,640 18.1% 5,468 4,951 10.4%
Depreciation and amortization 304 293 3.8% 905 868 4.3%
----------------------------------- ------ --- ----- ------ ------
Total Segment Operating Expenses 2,241 1,933 15.9% 6,373 5,819 9.5%
----------------------------------- ------ --- ----- ------ ------
Segment Operating Income (Loss) (142) (54) -% (319) (445) 28.3%
Equity in Net Income (Loss) of
Affiliates 17 1 -% 62 24 -%
----------------------------------- ------ --- ----- ------ ------
Segment Contribution $ (125)$ (53) -% $ (257)$ (421) 39.0%
=================================== ====== ===== ====== ======
Segment Operating Income Margin (6.8)% (2.9)% (5.3)% (8.3)%
----------------------------------- ------ ----- ----- ------ ------ -----
Supplementary Operating Data
--------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited September 30, Percent
-----------------------
2017 2016 Change
---------------------------------- ------ --- ----- ----- ------ ------ ---------
Mexican Wireless Subscribers
Postpaid 5,316 4,733 12.3%
Prepaid 8,231 5,665 45.3%
---------------------------------- ------ --- ----- ----- ------ ------
Branded 13,547 10,398 30.3%
Reseller 232 300 -22.7%
----------------------------------- ------ --- ----- ----- ------ ------
Total Mexican Wireless Subscribers 13,779 10,698 28.8%
----------------------------------- ------ --- ----- ----- ------ ------
Latin America Satellite Subscribers
PanAmericana 8,201 7,139 14.9%
SKY Brazil 5,289 5,337 -0.9%
---------------------------------- ------ --- ----- ----- ------ ------
Total Latin America Satellite
Subscribers 13,490 12,476 8.1%
=================================== ====== === ===== ===== ====== ====== =====
Three Months Ended Nine Months Ended
September 30, Percent September 30, Percent
-------------------------- -----------------------
2017 2016 Change 2017 2016 Change
---------------------------------- ------ --- ----- --------- ------ ------ ---------
Mexican Wireless Net Additions
Postpaid 129 163 -20.9% 351 444 -20.9%
Prepaid 585 606 -3.5% 1,504 1,670 -9.9%
---------------------------------- ------ --- ----- ------ ------
Branded 714 769 -7.2% 1,855 2,114 -12.3%
Reseller (17) (26) 34.6% (49) (100) 51.0%
----------------------------------- ------ --- ----- ------ ------
Total Mexican Wireless Net
Additions 697 743 -6.2% 1,806 2,014 -10.3%
----------------------------------- ------ --- ----- ------ ------
Latin America Satellite Net
Additions
PanAmericana 98 (36) -% 163 73 -%
SKY Brazil (230) (12) -% (260) (107) -%
---------------------------------- ------ --- ----- ------ ------
Total Latin America Satellite Net
Additions (132) (48) -% (97) (34) -%
----------------------------------- ------ --- ----- ----- ------ ------ -----
SUPPLEMENTAL OPERATING INFORMATION - AT&T MOBILITY
As a supplemental discussion of our operating results, for comparison purposes, we are providing
a view of our combined domestic wireless operations (AT&T Mobility).
Operating Results
--------------------------------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Nine Months Ended
Unaudited September 30, Percent September 30, Percent
---------------------------- -------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------- --- ------ --------- ------- ------- ---------
Operating Revenues
Service $ 14,541$ 14,964 -2.8% $ 43,613$ 44,673 -2.4%
Equipment 2,895 3,229 -10.3% 8,508 9,398 -9.5%
Total Operating Revenues 17,436 18,193 -4.2% 52,121 54,071 -3.6%
Operating Expenses
Operations and support expenses 10,113 10,697 -5.5% 30,308 31,822 -4.8%
Depreciation and amortization 2,010 2,107 -4.6% 5,999 6,244 -3.9%
Total Operating Expenses 12,123 12,804 -5.3% 36,307 38,066 -4.6%
Operating Income $ 5,313$ 5,389 -1.4% $ 15,814$ 16,005 -1.2%
Operating Income Margin 30.5% 29.6% 30.3% 29.6%
Supplementary Operating Data
--------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited September 30, Percent
-------------------------
2017 2016 Change
------- ------- ---------
AT&T Mobility Subscribers
Postpaid 77,415 77,388 -%
Prepaid 15,136 13,035 16.1%
Branded 92,551 90,423 2.4%
Reseller 9,877 12,624 -21.8%
Connected Devices 36,398 30,291 20.2%
Total AT&T Mobility Subscribers 138,826 133,338 4.1%
Domestic Licensed POPs
(000,000) 326 323 0.9%
Three Months Ended Nine Months Ended
September 30, Percent September 30, Percent
-------------------------
2017 2016 Change 2017 2016 Change
------- -------
AT&T Mobility Net Additions
Postpaid 117 212 -44.8% 53 598 -91.1%
Prepaid(1) 324 304 6.6% 873 1,169 -25.3%
Branded 441 516 -14.5% 926 1,767 -47.6%
Reseller (392) (315) -24.4% (1,342) (1,174) -14.3%
Connected Devices(1) 2,274 1,331 70.8% 7,102 4,081 74.0%
Total AT&T Mobility Net
Additions 2,323 1,532 51.6% 6,686 4,674 43.0%
M&A Activity, Partitioned
Customers and
Other Adjustments 3 1 -% (2,720) 24 -%
Total Churn 1.32% 1.45% -13 BP 1.35% 1.41% -6 BP
Postpaid Churn 1.07% 1.05% 2 BP 1.07% 1.04% 3 BP
(1) Effective July 1, 2017 we prospectively reclassified prepaid internet of things (IoT)
connections from connected devices
to prepaid.
SUPPLEMENTAL SEGMENT RECONCILIATION
Three Months Ended
--------------------------------------------------------------------------------------------------------------
Dollars in millions
Unaudited
September 30, 2017
--------
Operations Equity in
and Depreciation Operating Net Income
Support and Income (Loss) of Segment
Revenues Expenses EBITDA Amortization (Loss) Affiliates Contribution
--------
Business Solutions $ 17,061 $ 10,233 $ 6,828 $ 2,325 $ 4,503 $ - $ 4,503
Entertainment Group 12,648 9,953 2,695 1,379 1,316 (6) 1,310
Consumer Mobility 7,748 4,551 3,197 877 2,320 - 2,320
International 2,099 1,937 162 304 (142) 17 (125)
Segment Total 39,556 26,674 12,882 4,885 7,997 $ 11 $ 8,008
Corporate and Other 201 89 112 21 91
Acquisition-related
items - 134 (134) 1,136 (1,270)
Certain Significant
items (89) 326 (415) - (415)
--------
AT&T Inc. $ 39,668 $ 27,223 $12,445 $ 6,042 $ 6,403
September 30, 2016
--------
Operations Equity in
and Depreciation Operating Net Income
Support and Income (Loss) of Segment
Revenues Expenses EBITDA Amortization (Loss) Affiliates Contribution
--------
Business Solutions $ 17,767 $ 10,925 $ 6,842 $ 2,539 $ 4,303 $ - $ 4,303
Entertainment Group 12,720 9,728 2,992 1,504 1,488 - 1,488
Consumer Mobility 8,267 4,751 3,516 944 2,572 - 2,572
International 1,879 1,640 239 293 (54) 1 (53)
--------
Segment Total 40,633 27,044 13,589 5,280 8,309 $ 1 $ 8,310
Corporate and Other 270 270 - 17 (17)
Acquisition-related
items - 290 (290) 1,282 (1,572)
Certain Significant
items (13) 299 (312) - (312)
--------
AT&T Inc. $ 40,890 $ 27,903 $12,987 $ 6,579 $ 6,408
Nine Months Ended
------------------------------------------------------------------------------------------------------------
Dollars in millions
Unaudited
September 30, 2017
--------
Operations Equity in
and Depreciation Operating Net Income
Support and Income (Loss) of Segment
Revenues Expenses EBITDA Amortization (Loss) Affiliates Contribution
--------
Business Solutions $ 51,016 $ 30,722 $20,294 $ 6,972 $ 13,322 $ - $ 13,322
Entertainment Group 37,953 29,112 8,841 4,256 4,585 (23) 4,562
Consumer Mobility 23,279 13,599 9,680 2,621 7,059 - 7,059
International 6,054 5,468 586 905 (319) 62 (257)
Segment Total 118,302 78,901 39,401 14,754 24,647 $ 39 $ 24,686
Corporate and Other 657 397 260 54 206
Acquisition-related
items - 622 (622) 3,508 (4,130)
Certain Significant
items (89) 44 (133) - (133)
--------
AT&T Inc. $ 118,870 $ 79,964 $38,906 $ 18,316 $ 20,590
September 30, 2016
--------
Operations Equity in
and Depreciation Operating Net Income
Support and Income (Loss) of Segment
Revenues Expenses EBITDA Amortization (Loss) Affiliates Contribution
--------
Business Solutions $ 52,955 $ 32,584 $20,371 $ 7,568 $ 12,803 $ - $ 12,803
Entertainment Group 38,089 28,875 9,214 4,481 4,733 1 4,734
Consumer Mobility 24,781 14,343 10,438 2,798 7,640 - 7,640
International 5,374 4,951 423 868 (445) 24 (421)
--------
Segment Total 121,199 80,753 40,446 15,715 24,731 $ 25 $ 24,756
Corporate and Other 759 940 (181) 54 (235)
Acquisition-related
items - 818 (818) 3,949 (4,767)
Certain Significant
items (13) (383) 370 - 370
--------
AT&T Inc. $ 121,945 $ 82,128 $39,817 $ 19,718 $ 20,099
Discussion and Reconciliation of Non-GAAP Measures
We believe the following measures are relevant and useful information to investors as they are part of AT&T's internal management reporting and planning processes and are important metrics that management uses to evaluate the operating performance of AT&T and its segments. Management also uses these measures as a method of comparing performance with that of many of our competitors.
Free Cash Flow
Free cash flow is defined as cash from operations minus Capital expenditures. Free cash flow after dividends is defined as cash from operations minus Capital expenditures and dividends. Free cash flow dividend payout ratio is defined as the percentage of dividends paid to free cash flow. We believe these metrics provide useful information to our investors because management views free cash flow as an important indicator of how much cash is generated by routine business operations, including Capital expenditures, and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.
Free Cash Flow and Free Cash Flow Dividend Payout Ratio
Dollars in millions Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Net cash provided by operating activities $ 11,114 $ 10,995 $ 29,274 $ 29,202
Less: Capital expenditures (5,251) (5,813) (16,474) (15,952)
Free Cash Flow 5,863 5,182 12,800 13,250
Less: Dividends paid (3,009) (2,951) (9,030) (8,850)
Free Cash Flow after Dividends $ 2,854 $ 2,231 $ 3,770 $ 4,400
Free Cash Flow Dividend Payout Ratio 51.3% 56.9% 70.5% 66.8%
EBITDA
Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies. For AT&T, EBITDA excludes other income (expense) - net, and equity in net income (loss) of affiliates, as these do not reflect the operating results of our subscriber base or operations that are not under our control. Equity in net income (loss) of affiliates represents the proportionate share of the net income (loss) of affiliates in which we exercise significant influence, but do not control. Because we do not control these entities, management excludes these results when evaluating the performance of our primary operations. EBITDA also excludes interest expense and the provision for income taxes. Excluding these items eliminates the expenses associated with our capital and tax structures. Finally, EBITDA excludes depreciation and amortization in order to eliminate the impact of capital investments. EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with U.S. generally accepted accounting principles (GAAP).
EBITDA service margin is calculated as EBITDA divided by service revenues.
When discussing our segment results, EBITDA excludes equity in net income (loss) of affiliates, and depreciation and amortization from segment contribution. For our supplemental presentation of our combined domestic wireless operations (AT&T Mobility) and our supplemental presentation of the Mexico Wireless and Latin America operations of our International segment, EBITDA excludes depreciation and amortization from operating income.
1
These measures are used by management as a gauge of our success in acquiring, retaining and servicing subscribers because we believe these measures reflect AT&T's ability to generate and grow subscriber revenues while providing a high level of customer service in a cost-effective manner. Management also uses these measures as a method of comparing segment performance with that of many of its competitors. The financial and operating metrics which affect EBITDA include the key revenue and expense drivers for which segment managers are responsible and upon which we evaluate their performance. Management uses Mexico Wireless EBITDA in evaluating profitability trends after our two Mexico wireless acquisitions in 2015, and our investments in building a nationwide LTE network by end of 2018. Management uses Latin America EBITDA in evaluating the ability of our Latin America operations to generate cash to finance its own operations.
We believe EBITDA Service Margin (EBITDA as a percentage of service revenues) to be a more relevant measure than EBITDA Margin (EBITDA as a percentage of total revenue) for our Consumer Mobility segment operating margin and our supplemental AT&T Mobility operating margin. We also use wireless service revenues to calculate margin to facilitate comparison, both internally and externally with our wireless competitors, as they calculate their margins using wireless service revenues as well.
There are material limitations to using these non-GAAP financial measures. EBITDA, EBITDA margin and EBITDA service margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies. Furthermore, these performance measures do not take into account certain significant items, including depreciation and amortization, interest expense, tax expense and equity in net income (loss) of affiliates. Management compensates for these limitations by carefully analyzing how its competitors present performance measures that are similar in nature to EBITDA as we present it, and considering the economic effect of the excluded expense items independently as well as in connection with its analysis of net income as calculated in accordance with GAAP. EBITDA, EBITDA margin and EBITDA service margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.
EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Net Income $ 3,123 $ 3,418 $ 10,711 $ 10,818
Additions:
Income Tax Expense 1,851 1,775 5,711 5,803
Interest Expense 1,686 1,224 4,374 3,689
Equity in Net (Income) Loss of Affiliates (11) (16) 148 (57)
Other (Income) Expense - Net (246) 7 (354) (154)
Depreciation and amortization 6,042 6,579 18,316 19,718
EBITDA 12,445 12,987 38,906 39,817
Total Operating Revenues 39,668 40,890 118,870 121,945
Service Revenues 36,378 37,272 109,372 111,515
EBITDA Margin 31.4% 31.8% 32.7% 32.7%
EBITDA Service Margin 34.2% 34.8% 35.6% 35.7%
2
Segment EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Business Solutions Segment
Segment Contribution $ 4,503 $ 4,303 $ 13,322 $ 12,803
Additions:
Depreciation and amortization 2,325 2,539 6,972 7,568
EBITDA 6,828 6,842 20,294 20,371
Total Segment Operating Revenues 17,061 17,767 51,016 52,955
Segment Operating Income Margin 26.4% 24.2% 26.1% 24.2%
EBITDA Margin 40.0% 38.5% 39.8% 38.5%
Entertainment Group Segment
Segment Contribution $ 1,310 $ 1,488 $ 4,562 $ 4,734
Additions:
Equity in Net (Income) Loss of Affiliates 6 - 23 (1)
Depreciation and amortization 1,379 1,504 4,256 4,481
EBITDA 2,695 2,992 8,841 9,214
Total Segment Operating Revenues 12,648 12,720 37,953 38,089
Segment Operating Income Margin 10.4% 11.7% 12.1% 12.4%
EBITDA Margin 21.3% 23.5% 23.3% 24.2%
Consumer Mobility Segment
Segment Contribution $ 2,320 $ 2,572 $ 7,059 $ 7,640
Additions:
Depreciation and amortization 877 944 2,621 2,798
EBITDA 3,197 3,516 9,680 10,438
Total Segment Operating Revenues 7,748 8,267 23,279 24,781
Service Revenues 6,507 6,914 19,644 20,805
Segment Operating Income Margin 29.9% 31.1% 30.3% 30.8%
EBITDA Margin 41.3% 42.5% 41.6% 42.1%
EBITDA Service Margin 49.1% 50.9% 49.3% 50.2%
International Segment
Segment Contribution $ (125) $ (53) $ (257) $ (421)
Additions:
Equity in Net (Income) of Affiliates (17) (1) (62) (24)
Depreciation and amortization 304 293 905 868 EBITDA 162 239 586 423 Total Segment Operating Revenues 2,099 1,879 6,054 5,374 Segment Operating Income Margin -6.8% -2.9% -5.3% -8.3% EBITDA Margin 7.7% 12.7% 9.7% 7.9%
3
Supplemental AT&T Mobility EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
AT&T Mobility
Operating Income $ 5,313 $ 5,389 $ 15,814 $ 16,005
Add: Depreciation and amortization 2,010 2,107 5,999 6,244
EBITDA 7,323 7,496 21,813 22,249
Total Operating Revenues 17,436 18,193 52,121 54,071
Service Revenues 14,541 14,964 43,613 44,673
Operating Income Margin 30.5% 29.6% 30.3% 29.6%
EBITDA Margin 42.0% 41.2% 41.9% 41.1%
EBITDA Service Margin 50.4% 50.1% 50.0% 49.8%
Supplemental Latin America EBITDA and EBITDA Margin
Dollars in millions Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
International - Latin America
Operating Income $ 82 $ 94 $ 300 $ 179
Add: Depreciation and amortization 206 212 642 620
EBITDA 288 306 942 799
Total Operating Revenues 1,363 1,297 4,065 3,649
Operating Income Margin 6.0% 7.2% 7.4% 4.9%
EBITDA Margin 21.1% 23.6% 23.2% 21.9%
Supplemental Mexico EBITDA and EBITDA Margin
Dollars in millions Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
International - Mexico
Operating Income $ (224) $ (148) $ (619) $ (624)
Add: Depreciation and amortization 98 81 263 248
EBITDA (126) (67) (356) (376)
Total Operating Revenues 736 582 1,989 1,725
Operating Income Margin -30.4% -25.4% -31.1% -36.2%
EBITDA Margin -17.1% -11.5% -17.9% -21.8%
Adjusting Items
Adjusting items include revenues and costs we consider nonoperational in nature, such as items arising from asset acquisitions or dispositions. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often significant impact on our fourth-quarter results, unless earlier remeasurement is required (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses.) Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income.
The tax impact of adjusting items is calculated using the effective tax rate during the quarter except for adjustments that, given their magnitude can drive a change in the effective tax rate, reflect the actual tax expense or combined marginal rate of approximately 38%. Certain foreign operations with losses, where such losses are not realizable for tax purposes, are not tax effected, resulting in no tax impact for Venezuelan devaluation. For years prior to 2017, adjustments related to Mexico operations were taxed at the 30% marginal rate for Mexico.
4
Adjusting Items
Dollars in millions Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Operating Revenues
Natural disaster revenue credits $ 89 $ 13 $ 89 $ 13
Adjustments to Operating Revenues 89 13 89 13
Operating Expenses
DIRECTV and other video merger integration costs 67 189 317 495
Mexico merger integration costs 34 84 153 231
Time Warner merger costs 33 - 152 -
Wireless merger integration costs - 17 - 92
Actuarial (gain) loss - - (259) -
Employee separation costs 208 260 268 314
Natural disaster costs 118 17 118 17
(Gain) loss on transfer of wireless spectrum - 22 (181) (714)
Venezuela devaluation - - 98 -
Adjustments to Operations and Support Expenses 460 589 666 435
Amortization of intangible assets 1,136 1,282 3,508 3,949
Adjustments to Operating Expenses 1,596 1,871 4,174 4,384
Other
Merger related interest expense and exchange fees(1) 485 - 752 16
(Gain) loss on sale of assets, impairments
and other adjustments(2) (81) - 140 4
Adjustments to Income Before Income Taxes 2,089 1,884 5,155 4,417
Tax impact of adjustments 716 640 1,717 1,521
Tax-related items (146) - (146) -
Adjustments to Net Income $ 1,519 $ 1,244 $ 3,584 $ 2,896
(1) Includes interest expense incurred on the debt issued prior to the close of merger transactions.
(2) Includes interest income earned on cash held prior to the close of merger transactions.
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses and income tax expense certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.
Adjusted Operating Revenues, Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. AT&T's calculation of Adjusted items, as presented, may differ from similarly titled measures reported by other companies.
5
Adjusted Operating Income, Adjusted Operating Income Margin,
Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA Service Margin
Dollars in millions Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Operating Income $ 6,403 $ 6,408 $ 20,590 $ 20,099
Adjustments to Operating Revenues 89 13 89 13
Adjustments to Operating Expenses 1,596 1,871 4,174 4,384
Adjusted Operating Income(1) 8,088 8,292 24,853 24,496
EBITDA 12,445 12,987 38,906 39,817
Adjustments to Operating Revenues 89 13 89 13
Adjustments to Operations and Support Expenses 460 589 666 435
Adjusted EBITDA(1) 12,994 13,589 39,661 40,265
Total Operating Revenues 39,668 40,890 118,870 121,945
Adjustments to Operating Revenues 89 13 89 13
Total Adjusted Operating Revenues 39,757 40,903 118,959 121,958
Service Revenues 36,378 37,272 109,372 111,515
Adjustments to Service Revenues 89 13 89 13
Adjusted Service Revenues 36,467 37,285 109,461 111,528
Operating Income Margin 16.1% 15.7% 17.3% 16.5%
Adjusted Operating Income Margin(1) 20.3% 20.3% 20.9% 20.1%
Adjusted EBITDA Margin(1) 32.7% 33.2% 33.3% 33.0%
Adjusted EBITDA Service Margin(1) 35.6% 36.4% 36.2% 36.1%
(1) Adjusted Operating Income, Adjusted EBITDA and associated margins exclude all actuarial
gains or losses ($259 million gain for the first nine months of 2017) associated with our
postemployment benefit plan, which we immediately recognize in the income statement, pursuant
to our accounting policy for the recognition of actuarial gains/losses.
Adjusted Diluted EPS
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Diluted Earnings Per Share (EPS) $ 0.49 $ 0.54 $ 1.69 $ 1.70
Amortization of intangible assets 0.12 0.14 0.38 0.42
Merger integration and other items(1) 0.06 0.03 0.14 0.09
Asset abandonments, impairments and other adjustments 0.05 0.03 0.06 0.03
Actuarial (gain) loss - - (0.03) -
(Gain) loss on transfer of wireless spectrum - - (0.02) (0.07)
Venezuela devaluation - - 0.02 -
Tax-related items 0.02 - 0.02 -
Adjusted EPS $ 0.74 $ 0.74 $ 2.26 $ 2.17
Year-over-year growth - Adjusted 0.0% 4.1%
Weighted Average Common Shares Outstanding
with Dilution (000,000) 6,182 6,189 6,184 6,191
(1) Includes combined merger integration items, merger-related interest income and expense.
6
Net Debt to Adjusted EBITDA
Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and management believes these measures provide relevant and useful information to investors and other users of our financial data. The Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by Annualized Adjusted EBITDA. Net Debt is calculated by subtracting cash and cash equivalents and certificates of deposit and time deposits that are greater than 90 days, from the sum of debt maturing within one year and long-term debt. Annualized Adjusted EBITDA is calculated by annualizing the year-to-date Adjusted EBITDA.
Net Debt to Adjusted EBITDA
Dollars in millions
Three Months Ended
Mar. 31, Jun. 30, Sep. 30, YTD 2017
2017 2017 2017
Adjusted EBITDA $ 13,080 $ 13,587 $ 12,994 $ 39,661
Add back severance - (60) (208) (268)
Net Debt Adjusted EBITDA 13,080 13,527 12,786 39,393
Annualized Adjusted EBITDA 52,524
End-of-period current debt 8,551
End-of-period long-term debt 154,728
Total End-of-Period Debt 163,279
Less: Cash and Cash Equivalents 48,499
Net Debt Balance 114,780
Annualized Net Debt to Adjusted EBITDA Ratio 2.19
7
Supplemental Operational Measures
We provide a supplemental discussion of our domestic wireless operations that is calculated by combining our Consumer Mobility and Business Solutions segments, and then adjusting to remove non-wireless operations. The following table presents a reconciliation of our supplemental AT&T Mobility results.
Supplemental Operational Measure
Three Months Ended
September 30, 2017 September 30, 2016
Consumer Business AT&T Consumer Business AT&T
Mobility Solutions Adjustments(1) Mobility Mobility Solutions Adjustments(1) Mobility
Operating
Revenues
Wireless
service $ 6,507 $ 8,034 $ - $ 14,541 $ 6,914 $ 8,050 $ - $ 14,964
Fixed
strategic
services - 3,087 (3,087) - - 2,913 (2,913) -
Legacy voice
and data
services - 3,434 (3,434) - - 4,042 (4,042) -
Other
services and
equipment - 852 (852) - - 886 (886) -
Wireless
equipment 1,241 1,654 - 2,895 1,353 1,876 - 3,229
Total
Operating
Revenues 7,748 17,061 (7,373) 17,436 8,267 17,767 (7,841) 18,193
Operating
Expenses
Operations
and support 4,551 10,233 (4,671) 10,113 4,751 10,925 (4,979) 10,697
EBITDA 3,197 6,828 (2,702) 7,323 3,516 6,842 (2,862) 7,496
Depreciation
and
amortization 877 2,325 (1,192) 2,010 944 2,539 (1,376) 2,107
Total
Operating
Expense 5,428 12,558 (5,863) 12,123 5,695 13,464 (6,355) 12,804
Operating
Income $ 2,320 $ 4,503 $ (1,510) $ 5,313 $ 2,572 $ 4,303 $ (1,486) $ 5,389
(1) Non-wireless (fixed) operations reported in Business Solutions segment.
Supplemental Operational Measure
-------------------------------------------------------------------------------------------------------------------------
Nine Months Ended
September 30, 2017 September 30, 2016
Consumer Business AT&T Consumer Business AT&T
Mobility Solutions Adjustments(1) Mobility Mobility Solutions Adjustments(1) Mobility
Operating
Revenues
Wireless
service $ 19,644 $ 23,969 $ - $ 43,613 $ 20,805 $ 23,868 $ - $ 44,673
Fixed
strategic
services - 9,089 (9,089) - - 8,469 (8,469) -
Legacy voice
and data
services - 10,572 (10,572) - - 12,577 (12,577) -
Other
services and
equipment - 2,513 (2,513) - - 2,619 (2,619) -
Wireless
equipment 3,635 4,873 - 8,508 3,976 5,422 - 9,398
Total
Operating
Revenues 23,279 51,016 (22,174) 52,121 24,781 52,955 (23,665) 54,071
Operating
Expenses
Operations
and support 13,599 30,722 (14,013) 30,308 14,343 32,584 (15,105) 31,822
EBITDA 9,680 20,294 (8,161) 21,813 10,438 20,371 (8,560) 22,249
Depreciation
and
amortization 2,621 6,972 (3,594) 5,999 2,798 7,568 (4,122) 6,244
Total
Operating
Expense 16,220 37,694 (17,607) 36,307 17,141 40,152 (19,227) 38,066
Operating
Income $ 7,059 $ 13,322 $ (4,567) $ 15,814 $ 7,640 $ 12,803 $ (4,438) $ 16,005
(1) Non-wireless (fixed) operations reported in Business Solutions segment.
8
Supplemental International
We provide a supplemental presentation of the Latin America and Mexico Wireless operations within our International segment. The following table presents a reconciliation of our International segment.
Supplemental International
Three Months Ended
September 30, 2017 September 30, 2016
Latin America Mexico International Latin America Mexico International
Operating Revenues
Video service $ 1,363 $ - $ 1,363 $ 1,297 $ - $ 1,297
Wireless service - 536 536 - 484 484
Wireless equipment - 200 200 - 98 98
Total Operating
Revenues 1,363 736 2,099 1,297 582 1,879
Operating Expenses
Operations and
support 1,075 862 1,937 991 649 1,640
Depreciation and
amortization 206 98 304 212 81 293
Total Operating
Expenses 1,281 960 2,241 1,203 730 1,933
Operating Income
(Loss) 82 (224) (142) 94 (148) (54)
Equity in Net Income
of Affiliates 17 - 17 1 - 1
Segment Contribution $ 99 $ (224) $ (125) $ 95 $ (148) $ (53)
Supplemental International
------------------------------------------------------------------------------------------------------
Nine Months Ended
September 30, 2017 September 30, 2016
Latin America Mexico International Latin America Mexico International
Operating Revenues
Video service $ 4,065 $ - $ 4,065 $ 3,649 $ - $ 3,649
Wireless service - 1,546 1,546 - 1,428 1,428
Wireless equipment - 443 443 - 297 297
Total Operating
Revenues 4,065 1,989 6,054 3,649 1,725 5,374
Operating Expenses
Operations and
support 3,123 2,345 5,468 2,850 2,101 4,951
Depreciation and
amortization 642 263 905 620 248 868
Total Operating
Expenses 3,765 2,608 6,373 3,470 2,349 5,819
Operating Income
(Loss) 300 (619) (319) 179 (624) (445)
Equity in Net Income
of Affiliates 62 - 62 24 - 24
Segment Contribution $ 362 $ (619) $ (257) $ 203 $ (624) $ (421)
9
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRTEASAPELSXFFF
(END) Dow Jones Newswires
December 08, 2017 10:48 ET (15:48 GMT)
1 Year At&t Inc 5.500% Chart |
1 Month At&t Inc 5.500% Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
