TIDM58KM
RNS Number : 9053C
AT & T Inc.
08 May 2012
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) April 24,
2012
AT&T INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-8610 43-1301883
(State or Other Jurisdiction (Commission File (IRS Employer Identification
of Incorporation) Number) 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))
Item 2.02 Results of Operations and Financial Condition.
The registrant announced on April 24, 2012, its results of
operations for the first quarter of 2012. 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 April 24, 2012 reporting financial results for the first quarter ended
March 31, 2012.
99.2 AT&T Inc. selected financial statements and operating data.
99.3 Discussion of EBITDA, Free Cash Flow, Free Cash Flow Yield and Free Cash Flow after Dividends
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: April 24, By: /s/ Paul W. Stephens______________
2012 Paul W. Stephens
Senior Vice President and Controller
For more information, contact:
McCall Butler
917-209-5792
mbutler@attnews.us
Solid Growth in Earnings, Revenues and Margins, and $4.7 Billion
Returned to Shareholders Highlight AT&T's First-Quarter
Results
Wireless Margins Expand and Smartphone Sales Set First-Quarter
Record; 30 Percent of Smartphone Customers are on 4G-Capable
Devices
-- $0.60 diluted EPS compared to $0.57 diluted EPS in the first
quarter of 2011
-- Consolidated revenues of $31.8 billion, up $575 million, or
1.8 percent, versus the year-earlier period
-- Wireless operating income margin up to 27.2 percent; wireless
EBITDA service margin up significantly to 41.6 percent even with
strong smartphone sales
-- More than $2 billion in stock buybacks; 67.7 million shares
repurchased
-- AT&T's growth engines - wireless, wireline data and
managed services - represented 78 percent of total revenues and
grew 6.2 percent versus the same quarter a year ago, led by:
o 19.9 percent growth in wireless data revenues, up more than $1
billion versus the year-earlier quarter
o 19.0 percent growth in strategic business services
revenues
o 38.2 percent growth in consumer U-verse revenues
-- Smartphone sales of 5.5 million, exceeding the previous
first-quarter record, with about 30 percent of all postpaid
smartphone subscribers on 4G-capable devices
-- 726,000 total wireless net adds, with gains in every customer
category
-- Postpaid wireless churn of 1.1 percent, lowest level in seven
quarters
-- Record first-quarter branded computing (tablets, tethering
plans, etc.) net adds of 460,000 to reach a total of 5.8 million,
up almost 70 percent versus a year ago
-- Postpaid wireless subscriber ARPU (average monthly revenues
per subscriber), up 1.7 percent to $64.46
-- Wireline business year-over-year revenue comparisons continue
to improve
-- Wireline consumer revenues up 1.0 percent versus the
year-earlier period; seventh consecutive quarter of year-over-year
growth
-- AT&T U-verse(R) subscribers (TV and high speed Internet)
top 6 million; U-verse TV subscribers reach 4 million in
service
Note: AT&T's first-quarter earnings conference call will be
broadcast live via the Internet at 10 a.m. ET on Tuesday, April 24,
2012, at www.att.com/investor.relations.
DALLAS, April 24, 2012 - AT&T Inc. (NYSE:T) today reported
first-quarter results highlighted by strong 4G mobile data sales
and wireless margins, and solid revenue and earnings growth.
"We continue to capitalize on our terrific momentum in mobile
Internet," said Randall Stephenson, AT&T chairman and chief
executive officer. "Smartphone and branded computing device sales
continue to set a record pace, mobile data revenues were up nearly
20 percent, and we achieved this growth with expanding margins.
These results add confidence in our outlook for the year."
First-Quarter Financial Results
For the quarter ended March 31, 2012, AT&T's consolidated
revenues totaled $31.8 billion, up $575 million, or 1.8 percent,
versus the year-earlier quarter.
Compared with results for the first quarter of 2011, operating
expenses were $25.7 billion versus $25.4 billion; operating income
was $6.1 billion, up from $5.8 billion; and operating income margin
was 19.2 percent, compared to 18.6 percent.
First-quarter 2012 net income attributable to AT&T totaled
$3.6 billion, or $0.60 per diluted share, up from $3.4 billion, or
$0.57 per diluted share, in the year-earlier quarter.
First-quarter 2012 cash from operating activities totaled $7.8
billion, and capital expenditures totaled $4.3 billion. Free cash
flow - cash from operating activities minus capital expenditures -
totaled $3.5 billion. During the first quarter, AT&T began
repurchasing shares under its outstanding 300 million share buyback
authorization. The company repurchased 67.7 million of its shares
for $2.1 billion in the quarter.
WIRELESS OPERATIONAL HIGHLIGHTS
Led by mobile data growth in the first quarter, AT&T
delivered strong smartphone and branded computing device sales with
solid data revenue growth, lower postpaid churn and expanding
margins. Highlights included:
Wireless Data Revenues Increase $1 Billion. Total wireless
revenues, which include equipment sales, were up 5.4 percent year
over year to $16.1 billion. Wireless service revenues increased 4.3
percent, to $14.6 billion, in the first quarter. Wireless data
revenues - driven by Internet access, access to applications,
messaging and related services - increased by more than $1 billion,
or 19.9 percent, from the year-earlier quarter to $6.1 billion.
First-quarter wireless operating expenses totaled $11.7 billion, up
3.4 percent versus the year-earlier quarter, and wireless operating
income was $4.4 billion, up 11.3 percent year over year.
Wireless Margins Expand Even With Strong Smartphone Sales.
First-quarter wireless margins grew significantly, driven by
improved operating efficiencies and further revenue gains from the
company's 41 million high-quality smartphone subscribers.
AT&T's first-quarter wireless operating income margin was 27.2
percent versus 25.8 percent in the year-earlier quarter, and
AT&T's wireless EBITDA service margin was 41.6 percent,
compared with 39.0 percent in the first quarter of 2011. (EBITDA
service margin is operating income before depreciation and
amortization, divided by total service revenues.)
Subscriber Gains in Every Category. AT&T posted a net
increase in total wireless subscribers of 726,000 in the first
quarter to reach 103.9 million in service. This included gains in
every customer category. Subscriber additions for the quarter
include postpaid net adds of 187,000. Prepaid net adds were
125,000, connected device net adds were 230,000 and reseller net
adds were 184,000. First-quarter net adds reflect continued
adoption of smartphones and sales of tablets.
Smartphone Sales Exceed First-Quarter Record. AT&T sold 5.5
million smartphones, exceeding a first-quarter sales record set
last year. Smartphones represented more than 78 percent of postpaid
device sales. At the end of the quarter, 59.3 percent, or 41.2
million, of AT&T's postpaid subscribers had smartphones, up
from 46.2 percent and 31.5 million a year earlier. AT&T's ARPU
for smartphones is 90 percent higher than for non-smartphone
subscribers. About 88 percent of smartphone subscribers are on
FamilyTalk(R) or business plans. Churn levels for these subscribers
are significantly lower than for other postpaid subscribers. About
30 percent of AT&T's postpaid smartphone customers use a
4G-capable device.
Both Android and iPhone device sales remain strong. iPhone sales
were helped by AT&T's 4G network, which lets iPhone 4S download
three-times faster than other U.S. carriers' networks. In the
quarter, the company activated 4.3 million iPhones, with 21 percent
new to AT&T.
Strong Branded Computing Sales. AT&T had its best-ever
first-quarter sales for branded computing subscribers, a new
wireless data revenue growth area for the company that includes
tablets, tethering plans, aircards, mobile Wi-Fi hot spots and
other data-only devices. AT&T added 460,000 of these devices to
reach 5.8 million, up almost 70 percent in total subscribers from a
year ago. During the quarter, 240,000 tablets were added, about
three-quarters of which were postpaid.
61 Percent of Smartphone Subscribers on Tiered Data Plans. The
number of subscribers on tiered data plans also continues to
increase. About 25 million, or 61 percent, of all smartphone
subscribers are on tiered data plans compared to 38 percent a year
ago, and more than 70 percent have chosen the higher-tiered plans.
AT&T's postpaid wireless subscribers on data plans increased by
15.1 percent over the past year.
Industry-Leading Postpaid ARPU Continues Growth. Postpaid
subscriber ARPU increased 1.7 percent versus the year-earlier
quarter to $64.46. AT&T continues to lead the industry with
postpaid subscriber ARPU. This marked the 13(th) consecutive
quarter AT&T has posted a year-over-year increase in postpaid
ARPU. Postpaid data ARPU reached $26.92, up 15.3 percent versus the
year-earlier quarter.
Postpaid Churn Improves. Postpaid churn reached its lowest level
in seven quarters. For the first quarter, postpaid churn was 1.10
percent, compared to 1.18 percent in the year-ago first quarter and
1.21 percent in the fourth quarter of 2011. Total churn was up, at
1.47 percent versus 1.36 percent in the first quarter of 2011 and
1.39 percent in the fourth quarter of 2011, due to higher reseller
and connected device churn.
WIRELINE OPERATIONAL HIGHLIGHTS
AT&T's first-quarter wireline results were led by continued
improving trends in business and strong growth in U-verse revenues.
Highlights included:
Wireline Operating Income Improves. AT&T's wireline
operating income totaled $1.8 billion, 2.4 percent higher than the
first quarter of 2011 and down 1.2 percent versus the fourth
quarter of 2011. First-quarter wireline operating income margin was
12.2 percent, compared to 11.8 percent in the year-earlier quarter.
Total first-quarter wireline revenues were $14.9 billion, down 0.8
percent versus the year-earlier quarter and down slightly
sequentially. First-quarter wireline operating expenses were $13.1
billion, down 1.2 percent versus the first quarter of 2011 and down
slightly sequentially. Improved consumer and business strategic
services revenue trends and execution of cost initiatives helped to
partially offset declines in voice revenues.
Business Revenues Continue Improving Trends. Business revenues
had their best year-over-year comparison in the last three years.
Total business revenues were $9.2 billion, down 0.8 percent versus
the year-earlier quarter. Business service revenues declined 0.3
percent year over year, compared to a year-over-year decline of 4.4
percent in the year-ago quarter, and were essentially flat
sequentially. Declines in legacy products were largely offset by
continued strong growth in strategic business services.
Business Data Revenue Growth Accelerates.Revenues from strategic
business services, the new-generation capabilities that lead
AT&T's most advanced business solutions - including Ethernet,
VPNs, hosting, IP conferencing and application services - grew 19.0
percent versus the year-earlier quarter, continuing strong trends
in this area. This now represents a $6.2 billion annualized revenue
stream. Total business data revenue growth accelerated to 4.2
percent year over year, the strongest showing in four years.
U-verse Drives Consumer Revenue Growth. Continued strong growth
in consumer IP data services in the first quarter offset lower
revenues from voice and legacy products. Driven by strength in IP
data services, revenues from residential customers totaled $5.4
billion, an increase of 1.0 percent versus the first quarter a year
ago. The first quarter marked the seventh consecutive quarter of
year-over-year growth in wireline consumer revenues. U-verse
continues to drive a transformation in wireline consumer, reflected
by the fact that consumer broadband, video and voice over IP
revenues now represent 55 percent of wireline consumer revenues, up
from 47 percent in the year-earlier quarter. Increased AT&T
U-verse penetration and a significant number of subscribers on
triple- or quad-play options drove 17.5 percent year-over-year
growth in IP revenues from residential customers (broadband,
U-verse TV and U-verse Voice) and 3.8 percent sequential quarterly
growth. Consumer U-verse revenues grew 38.2 percent compared with
the year-ago first quarter and were up 8.5 percent versus the
fourth quarter of 2011.
U-verse Tops 6 Million Subscriber Mark. Total AT&T U-verse
subscribers (TV and High Speed Internet) reached 6.2 million in the
first quarter. AT&T U-verse TV added 200,000 subscribers to
reach 4.0 million in service. In the first quarter, the AT&T
U-verse High Speed Internet attach rate was more than 90 percent
and about half of new subscribers took AT&T U-verse Voice.
About three-fourths of AT&T U-verse TV subscribers have a
triple- or quad-play option from AT&T. ARPU for U-verse
triple-play customers was $169, up slightly year over year.
Penetration of eligible living units continues to grow and was at
16.8 percent in the first quarter, and 27.1 percent across areas
marketed to for 42 months or more. AT&T U-verse High Speed
Internet delivered a first-quarter net gain of 718,000 subscribers
to reach a total of 5.9 million, more than offsetting losses from
DSL. Overall, AT&T added 103,000 wireline broadband
connections. About 45 percent of consumers have a broadband plan
delivering speeds up to 6 Mbps or higher versus 35 percent in the
year-ago quarter.
Web Site Links: Related Media Kits:
==================================== ===================================
AT&T News AT&T Investor Relations Events and
AT&T Investor Relations Presentations
2012 AT&T Events Calendar AT&T 2011 Annual Report
Related Releases: Related Fact Sheets:
==================================== ===================================
PCWorld Names AT&T 4G LTE Network AT&T Historical Dividend Data
Tops in Latest Speed Tests
AT&T To Sell Advertising Solutions
and Interactive Business Units
to Cerberus
AT&T Declares Quarterly Dividend
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.
About AT&T
AT&T Inc. (NYSE:T) is a premier communications holding
company and one of the most honored companies in the world. Its
subsidiaries and affiliates - AT&T operating companies - are
the providers of AT&T services in the United States and around
the world. With a powerful array of network resources that includes
the nation's largest 4G network, AT&T is a leading provider of
wireless, Wi-Fi, high speed Internet, voice and cloud-based
services. A leader in mobile Internet, AT&T also offers the
best wireless coverage worldwide of any U.S. carrier, offering the
most wireless phones that work in the most countries. It also
offers advanced TV services under the AT&T U-verse(R) and
AT&T DIRECTV brands. The company's suite of IP-based business
communications services is one of the most advanced in the world.
In domestic markets, AT&T Advertising Solutions and AT&T
Interactive are known for their leadership in local search and
advertising.
Additional information about AT&T Inc. and the products and
services provided by AT&T subsidiaries and affiliates is
available at http://www.att.com. This AT&T news release and
other announcements are available at http://www.att.com/newsroomand
as part of an RSS feed at www.att.com/rss. Or follow our news on
Twitter at @ATT.
(c) 2012 AT&T Intellectual Property. All rights reserved. 4G
not available everywhere. AT&T, the AT&T logo and all other
marks contained herein are trademarks 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 may 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 or 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 www.att.com/investor.relations. Accompanying financial
statements follow.
NOTE:EBITDA is defined as operating income before depreciation
and amortization. EBITDA differs from Segment Operating Income
(loss), as calculated in accordance with U.S. generally accepted
accounting principles (GAAP), in that it excludes depreciation and
amortization. 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 GAAP.
Our calculation of EBITDA, as presented, may differ from similarly
titled measures reported by other companies.
NOTE:Free cash flow is defined as cash from operations minus
capital expenditures. We believe this metric provides useful
information to our investors because management regularly reviews
free cash flow as an important indicator of how much cash is
generated by normal business operations, including capital
expenditures, and makes decisions based on it. Management also
views it as a measure of cash available to pay debt and return cash
to shareowners.
NOTE:Adjusted Operating Income and Adjusted Operating Income
Margin are non-GAAP financial measures calculated by excluding from
operating revenues and operating expenses significant items that
are non-operational or non-recurring in nature. 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 Income and Adjusted Operating Income Margin
should be considered in addition to, but not as a substitute for,
other measures of financial performance reported in accordance with
GAAP. Our calculation of Adjusted Operating Income, as presented,
may differ from similarly titled measures reported by other
companies.
AT&T INC.
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
Dollars in millions except per share amounts
(Unaudited)
--------------------------------------------------------------------------------
Three months ended
March 31,
2012 2011
--------------------------------------------------------- --------- --------
Operating Revenues
Wireless service $ 14,566 $ 13,961
Data 7,795 7,171
Voice 5,893 6,550
Directory 744 868
Other 2,824 2,697
--------------------------------------------------------- --------- --------
Total operating revenues 31,822 31,247
--------------------------------------------------------- --------- --------
Operating Expenses
Cost of services and sales (exclusive of depreciation
and amortization shown separately below) 12,913 12,813
Selling, general and administrative 8,248 8,042
Depreciation and amortization 4,560 4,584
--------------------------------------------------------- --------- --------
Total operating expenses 25,721 25,439
--------------------------------------------------------- --------- --------
Operating Income 6,101 5,808
--------------------------------------------------------- --------- --------
Other Income (Expense)
Interest expense (859) (846)
Equity in net income of affiliates 223 249
Other income (expense) - net 52 59
--------------------------------------------------------- --------- --------
Total other income (expense) (584) (538)
--------------------------------------------------------- --------- --------
Income Before Income Taxes 5,517 5,270
Income tax expense 1,865 1,802
--------------------------------------------------------- --------- --------
Net Income 3,652 3,468
--------------------------------------------------------- --------- --------
Less: Net Income Attributable to Noncontrolling Interest (68) (60)
--------------------------------------------------------- --------- --------
Net Income Attributable to AT&T $ 3,584 $ 3,408
========================================================= ========= ========
Basic Earnings Per Share Attributable to AT&T $ 0.60 $ 0.57
Diluted Earnings Per Share Attributable to AT&T $ 0.60 $ 0.57
--------------------------------------------------------- --------- --------
Weighted Average Number of Common Shares Outstanding
- Basic (in millions) 5,918 5,925
Weighted Average Number of Common Shares Outstanding
- with Dilution (in millions) 5,940 5,945
Dividends Declared Per Common Share $ 0.44 $ 0.43
========================================================= ========= ========
See Notes to Consolidated Financial Statements.
Financial Data
AT&T Inc.
------------------------------------- --- ---------- ---------- --- ------ ---
Statements of Segment Income
Dollars in millions
------------------------------------- --- ---------- ---------- --- ---
Unaudited
Three Months Ended
---------------------------------------
Wireless 3/31/2012 3/31/2011 % Chg
------------------------------------- --- ---------- ---------- --- ------
Segment Operating Revenues
Service $ 14,566 $ 13,961 4.3 %
Equipment 1,570 1,349 16.4 %
------------------------------------------ ---------- ---------- ---
Total Segment Operating Revenues 16,136 15,310 5.4 %
------------------------------------------ ---------- ---------- --- ------ ---
Segment Operating Expenses
Operations and support 10,083 9,861 2.3 %
Depreciation and amortization 1,666 1,506 10.6 %
------------------------------------------ ---------- ---------- ---
Total Segment Operating Expenses 11,749 11,367 3.4 %
------------------------------------------ ---------- ---------- --- ------ ---
Segment Operating Income 4,387 3,943 11.3 %
Equity in Net Loss of Affiliates (13) (4) -
Segment Income $ 4,374 $ 3,939 11.0 %
===================================== === ========== ========== === ====== ===
Segment Operating Income Margin 27.2 % 25.8 %
Wireline
------------------------------------- --- ---------- ---------- --- ------
Segment Operating Revenues
Data $ 7,795 $ 7,171 8.7 %
Voice 5,893 6,550 -10.0 %
Other 1,240 1,330 -6.8 %
------------------------------------------ ---------- ---------- ---
Total Segment Operating Revenues 14,928 15,051 -0.8 %
------------------------------------------ ---------- ---------- --- ------ ---
Segment Operating Expenses
Operations and support 10,297 10,312 -0.1 %
Depreciation and amortization 2,808 2,958 -5.1 %
------------------------------------------ ---------- ---------- ---
Total Segment Operating Expenses 13,105 13,270 -1.2 %
------------------------------------------ ---------- ---------- --- ------ ---
Segment Income $ 1,823 $ 1,781 2.4 %
===================================== === ========== ========== === ====== ===
Segment Operating Income Margin 12.2 % 11.8 %
Advertising Solutions
Segment Operating Revenues $ 744 $ 868 -14.3 %
------------------------------------- --- ---------- ---------- --- ------ ---
Segment Operating Expenses
Operations and support 547 572 -4.4 %
Depreciation and amortization 77 106 -27.4 %
------------------------------------------ ---------- ---------- ---
Total Segment Operating Expenses 624 678 -8.0 %
------------------------------------------ ---------- ---------- --- ------
Segment Income $ 120 $ 190 -36.8 %
===================================== === ========== ========== === ====== ===
Segment Income Margin 16.1 % 21.9 %
Other
------------------------------------- --- ---------- ---------- --- ------
Segment Operating Revenues $ 14 $ 18 -22.2 %
Segment Operating Expenses 243 124 96.0 %
------------------------------------------ ---------- ---------- --- ------
Segment Operating Loss (229) (106) -
Equity in Net Income of Affiliates 236 253 -6.7 %
------------------------------------------ ---------- ----------
Segment Income $ 7 $ 147 -95.2 %
===================================== === ========== ========== === ====== ===
AT&T INC.
---------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
Dollars in millions except per share amounts
---------------------------------------------------------------------------------
December
March 31, 31,
2012 2011
--------------------------------------------------- ---------------- ----------
Assets (Unaudited)
Current Assets
Cash and cash equivalents $ 2,442 $ 3,185
Accounts receivable - net of allowances for
doubtful accounts of $784 and $878 13,167 13,606
Prepaid expenses 1,706 1,155
Deferred income taxes 1,463 1,470
Other current assets 1,987 3,611
--------------------------------------------------- ------------ ---------
Total current assets 20,765 23,027
--------------------------------------------------- ------------ ---------
Property, plant and equipment 260,211 260,279
Less: accumulated depreciation and amortization (152,980) (153,192)
--------------------------------------------------- ------------ ---------
Property, Plant and Equipment - Net 107,231 107,087
--------------------------------------------------- ------------ ---------
Goodwill 70,929 70,842
Licenses 51,782 51,374
Customer Lists and Relationships - Net 2,385 2,757
Other Intangible Assets - Net 5,203 5,212
Investments in Equity Affiliates 4,302 3,718
Other Assets 6,759 6,327
--------------------------------------------------- ------------ ---------
Total Assets $ 269,356 $ 270,344
=================================================== ============ =========
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year $ 6,775 $ 3,453
Accounts payable and accrued liabilities 17,593 19,858
Advanced billing and customer deposits 3,966 3,872
Accrued taxes 1,601 1,003
Dividends payable 2,585 2,608
--------------------------------------------------- ------------ ---------
Total current liabilities 32,520 30,794
--------------------------------------------------- ------------ ---------
Long-Term Debt 58,934 61,300
--------------------------------------------------- ------------ ---------
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes 26,136 25,748
Postemployment benefit obligation 34,113 34,011
Other noncurrent liabilities 12,466 12,694
--------------------------------------------------- ------------ ---------
Total deferred credits and other noncurrent
liabilities 72,715 72,453
--------------------------------------------------- ------------ ---------
Stockholders' Equity
Common stock ($1 par value, 14,000,000,000
authorized at March 31, 2012 and
December 31, 2011: issued 6,495,231,088 at
March 31, 2012 and December 31, 2011) 6,495 6,495
Additional paid-in capital 91,032 91,156
Retained earnings 26,446 25,453
Treasury stock (620,517,527 at March 31, 2012
and 568,719,202
at December 31, 2011, at cost) (22,460) (20,750)
Accumulated other comprehensive income 3,386 3,180
Noncontrolling interest 288 263
--------------------------------------------------- ------------ ---------
Total stockholders' equity 105,187 105,797
--------------------------------------------------- ------------ ---------
Total Liabilities and Stockholders' Equity $ 269,356 $ 270,344
=================================================== ============ =========
See Notes to Consolidated Financial Statements.
AT&T INC.
-------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in millions
(Unaudited)
-------------------------------------------------------------------------------------------
Three months ended
March 31,
2012 2011
----------------------------------------------------------------- ------------- ---------
Operating Activities
Net income $ 3,652 $ 3,468
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 4,560 4,584
Undistributed earnings from investments in equity
affiliates (223) (233)
Provision for uncollectible accounts 328 292
Deferred income tax expense and noncurrent unrecognized
tax benefits 337 731
Net gain from impairment and sale of investments (9) (41)
Changes in operating assets and liabilities:
Accounts receivable 111 72
Other current assets 1,082 708
Accounts payable and accrued liabilities (1,573) (1,309)
Other - net (469) (540)
----------------------------------------------------------------- --------- --------
Total adjustments 4,144 4,264
----------------------------------------------------------------- --------- --------
Net Cash Provided by Operating Activities 7,796 7,732
----------------------------------------------------------------- --------- --------
Investing Activities
Construction and capital expenditures:
Capital expenditures (4,261) (4,133)
Interest during construction (65) (35)
Acquisitions, net of cash acquired (433) (54)
Dispositions 16 11
Sales of securities, net of investment 5 127
Other 1 9
----------------------------------------------------------------- --------- --------
Net Cash Used in Investing Activities (4,737) (4,075)
----------------------------------------------------------------- --------- --------
Financing Activities
Net change in short-term borrowings with original
maturities of three months or less - (36)
Issuance of long-term debt 2,986 -
Repayment of long-term debt (2,204) (1,264)
Purchase of treasury stock (2,066) -
Issuance of treasury stock 218 18
Dividends paid (2,606) (2,540)
Other (130) 119
----------------------------------------------------------------- --------- --------
Net Cash Used in Financing Activities (3,802) (3,703)
----------------------------------------------------------------- --------- --------
Net decrease in cash and cash equivalents (743) (46)
Cash and cash equivalents beginning of year 3,185 1,437
----------------------------------------------------------------- --------- --------
Cash and Cash Equivalents End of Period $ 2,442 $ 1,391
================================================================= ========= ========
Cash paid during the three months ended March 31
for:
Interest $ 1,224 $ 1,096
Income taxes, net of refunds $ (712) $ (511)
See Notes to Consolidated Financial Statements.
Financial Data
AT&T Inc.
----------------------------------------------------------- ------------------ ------------------- -------
Supplementary Operating and Financial Data
Dollars in millions except per share amounts
----------------------------------------------------------- ------------------ ------------------- -------
Unaudited Three Months Ended
------------------------------------------------
3/31/2012 3/31/2011 % Chg
--------------- ----------------------------------------- ------------------ ------------------- -------
Wireless
Volumes (000)
Total 103,940 97,519 6.6%
------------------------------------------ ------------------ -------------------
Postpaid 69,403 68,062 2.0%
Prepaid 7,368 6,613 11.4%
Reseller 13,869 12,241 13.3%
Connected Devices 13,300 10,603 25.4%
Wireless Net Adds (000)
Total 726 1,984 -63.4%
------------------------------------------ ------------------ -------------------
Postpaid 187 62 -
Prepaid 125 85 47.1%
Reseller 184 561 -67.2%
Connected Devices 230 1,276 -82.0%
M&A Activity, Partitioned Customers
and Other Adjs. (33) (1) -
Wireless Churn
Postpaid Churn 1.10% 1.18% -8 BP
Total Churn 1.47% 1.36% 11 BP
Other
Branded Computing Subscribers(1) 5,776 3,434 68.2%
Licensed POPs (000,000) 313 313 0.0%
Wireline
Voice
Total Wireline Voice Connections 37,878 42,457 -10.8%
------------------------------------------ ------------------ -------------------
Net Change (1,134) (1,106) -2.5%
Broadband
Total Wireline Broadband Connections(2) 16,530 16,486 0.3%
------------------------------------------ ------------------ -------------------
Net Change(2) 103 177 -41.8%
Video
----------------------------------------- ------------------ -------------------
U-verse 3,991 3,205 24.5%
Satellite 1,732 1,886 -8.2%
Total Video Connections 5,723 5,091 12.4%
========================================== ================== ===================
Net Change 167 174 -4.0%
Consumer
Revenue
Connections
----------------------------------------- ------------------ -------------------
Broadband(3) 14,595 14,515 0.6%
Video Connections(4) 5,706 5,085 12.2%
Voice(5) 20,537 23,479 -12.5%
------------------ -------------------
Total
Consumer
Revenue
Connections 40,838 43,079 -5.2%
================== ===================
Net Change (428) (348) -23.0%
AT&T Inc.
Construction and capital expenditures
Capital expenditures $ 4,261 $ 4,133 3.1%
Interest during construction $ 65 $ 35 85.7%
Dividends Declared per Share $ 0.44 $ 0.43 2.3%
End of Period Common Shares Outstanding
(000,000) 5,875 5,918 -0.7%
Debt Ratio(6) 38.4% 36.6% 180 BP
Total Employees 252,330 260,690 -3.2%
Branded Computing Subscribers includes tablets, tethering
plans, aircards, mobile Wi-Fi hot spots and other data-only
(1) devices.
Prior year amounts restated to conform to current period
(2) reporting methodology.
Consumer wireline broadband connections include DSL lines,
(3) U-verse High Speed Internet access and satellite broadband.
Video connections include sales under agency agreements
(4) with EchoStar and DirecTV customers and U-verse connections.
Includes consumer U-verse Voice over Internet Protocol
(5) connections of 2,442 as of March 31, 2012.
Total long-term debt plus debt maturing within one year
(6) divided by total debt plus total stockholders' equity.
Note: For the end of 1Q12, total switched access lines
were 35,436, retail business switched access lines totaled
15,256, and wholesale and coin switched access lines totaled
2,085.
Financial Data
AT&T Inc.
Non-GAAP Wireless Reconciliation
---------------------------------------------------- ------------- ------------- ------------- -------------
Wireless Segment EBITDA
Dollars in millions
Unaudited
Three Months Ended
3/31/11 6/30/11 9/30/11 12/31/11 3/31/12
------------- ------------- ------------- ------------- -------------
Segment Operating Revenues
Service $ 13,961 $ 14,157 $ 14,261 $ 14,347 $ 14,566
Equipment 1,349 1,446 1,345 2,349 1,570
Total Segment Operating
Revenues 15,310 15,603 15,606 16,696 16,136
------------------------------------- ------------- ------------- ------------- ------------- -------------
Segment Operating Expenses
Operations and support 9,861 9,786 9,376 12,598 10,083
Depreciation and amortization 1,506 1,615 1,620 1,588 1,666
Total Segment Operating
Expenses 11,367 11,401 10,996 14,186 11,749
------------------------------------- ------------- ------------- ------------- ------------- -------------
Segment Operating Income 3,943 4,202 4,610 2,510 4,387
------------------------------------- ------------- ------------- ------------- ------------- -------------
Segment Operating Income
Margin 25.8% 26.9% 29.5% 15.0% 27.2%
Plus: Depreciation and amortization 1,506 1,615 1,620 1,588 1,666
------------------------------------- ------------- ------------- ------------- ------------- -------------
EBITDA 5,449 5,817 6,230 4,098 6,053
------------------------------------- ------------- ------------- ------------- ------------- -------------
EBITDA as a % of Service
Revenue 39.0% 41.1% 43.7% 28.6% 41.6%
Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliation
-------------------------------------------------- ----------------
Free Cash Flow
Dollars in Millions
Unaudited
Three Months Ended
3/31/11 3/31/12
-------------------------------- ---------------- ----------------
Net cash provided by operating
activities $ 7,732 $ 7,796
Less: Construction and capital
expenditures (4,168) (4,326)
Free Cash Flow $ 3,564 $ 3,470
-------------------------------- ---------------- ----------------
Free Cash Flow after Dividends
Dollars in Millions
Unaudited
Three Months Ended
3/31/11 3/31/12
-------------------------------- ---------------- ----------------
Net cash provided by operating
activities $ 7,732 $ 7,796
Less: Construction and capital
expenditures (4,168) (4,326)
Free Cash Flow 3,564 3,470
-------------------------------- ---------------- ----------------
Less: Dividends paid (2,540) (2,606)
Free Cash Flow After Dividends $ 1,024 $ 864
-------------------------------- ---------------- ----------------
Financial Data
AT&T Inc.
Non-GAAP Financial Reconciliation
------------------------------------------------- ----------------
Net-Debt-to-EBITDA Ratio
Dollars in millions
Unaudited
Three Months Ended
3/31/12 2012 YTD
---------- ----------------
Operating Revenues $ 31,822 $ 31,822
Operating Expenses 25,721 25,721
Total Operating Income 6,101 6,101
Add Back Depreciation and
Amortization 4,560 4,560
Total Consolidated EBITDA 10,661 10,661
Annualized Consolidated EBITDA* 42,644
End-of-period current debt 6,775
End-of-period long-term debt 58,934
Total End-of-Period Debt 65,709
(Premiums) Discounts on long-term
debt (42)
Normalized Debt Balance 65,667
Less Cash and Cash Equivalents 2,442
Normalized Net Debt Balance 63,225
Net-Debt-to-EBITDA Ratio 1.48
EBITDA DISCUSSION
For AT&T, EBITDA is defined as operating income before
depreciation and amortization. EBITDA service margin is calculated
as EBITDA divided by service revenues. EBITDA differs from Segment
Operating Income (Loss), as calculated in accordance with GAAP, in
that it excludes depreciation and amortization. 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 generally accepted accounting
principles. Our calculation of EBITDA, as presented, may differ
from similarly titled measures reported by other companies.
We believe these measures are relevant and useful information to
our investors as they are part of AT&T Mobility's internal
management reporting and planning processes and are important
metrics that AT&T Mobility's management uses to evaluate the
operating performance of its regional operations. These measures
are used by management as a gauge of AT&T Mobility's success in
acquiring, retaining and servicing subscribers because we believe
these measures reflect AT&T Mobility'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 AT&T Mobility's 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 AT&T Mobility's operating managers are
responsible and upon which we evaluate their performance.
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
excludes other income (expense) - net, net income attributable to
noncontrolling interest and equity in net income (loss) of
affiliates, as these do not reflect the operating results of
AT&T Mobility's subscriber base and its national footprint that
AT&T Mobility utilizes to obtain and service its customers.
Equity in net income (loss) of affiliates represents AT&T
Mobility's proportionate share of the net income (loss) of
affiliates in which it exercises significant influence, but does
not control. As AT&T Mobility does not control these entities,
our management excludes these results when evaluating the
performance of our primary operations. EBITDA excludes interest
expense and the provision for income taxes. Excluding these items
eliminates the expenses associated with its capitalization and tax
structures. Finally, EBITDA excludes depreciation and amortization,
in order to eliminate the impact of capital investments.
We believe EBITDA as a percentage of service revenues to be a
more relevant measure of AT&T Mobility's operating margin than
EBITDA as a percentage of total revenue. AT&T Mobility
generally subsidizes a portion of its handset sales, all of which
are recognized in the period in which AT&T Mobility sells the
handset. This results in a disproportionate impact on its margin in
that period. Management views this equipment subsidy as a cost to
acquire or retain a subscriber, which is recovered through the
ongoing service revenue that is generated by the subscriber.
AT&T Mobility also uses service revenues to calculate margin to
facilitate comparison, both internally and externally with its
competitors, as they calculate their margins using service revenues
as well.
There are material limitations to using these non-GAAP financial
measures. EBITDA 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, which directly affect AT&T
Mobility's net income. 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 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.
FREE CASH FLOW DISCUSSION
Free cash flow is defined as cash from operations minus
construction and capital expenditures. Free cash flow after
dividends is defined as cash from operations minus construction,
capital expenditures and dividends. Free cash flow yield is defined
as cash from continuing operations less construction and capital
expenditures as a percentage of market capitalization computed on
the last trading day of the quarter. Market capitalization is
computed by multiplying the end of period stock price by the end of
period shares outstanding. We believe these metrics provide useful
information to our investors because management monthly reviews
free cash flow as an important indicator of how much cash is
generated by normal business operations, including capital
expenditures, and makes decisions based on it. Management also
views it as a measure of cash available to pay debt and return cash
to shareowners.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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