TIDM58KN
RNS Number : 1978H
AT & T Inc.
08 March 2018
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) January 31,
2018
AT&T INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-8610 43-1301883
(State or Other (Commission (IRS Employer Identification
Jurisdiction File Number) No.)
of Incorporation)
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 January 31, 2018, its results of
operations for the fourth 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 January 31, 2018 reporting financial results for the fourth quarter ended
December 31, 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: January By: /s/ Debra L. Dial
31, 2018 Debra L. Dial
Senior Vice President and Controller
AT&T Reports Fourth-Quarter and Full-Year Results
Full Year
-- Consolidated revenues of $160.5 billion
-- Diluted EPS of $4.76 as reported and $3.05 as adjusted,
compared to $2.10 and $2.84 in the prior year
-- Cash from operations of $39.2 billion
-- Free cash flow of $17.6 billion
Fourth Quarter
-- Consolidated revenues of $41.7 billion
-- Diluted EPS of $3.08 as reported and $0.78 as adjusted,
compared to $0.39 and $0.66 in the year-ago quarter
-- Cash from operations of $9.9 billion
-- Free cash flow of $4.8 billion
2018 Outlook(1) (inclusive of tax reform and new accounting
standard)
-- Adjusted EPS in the $3.50 range
-- Free cash flow of about $21 billion
-- Capital expenditures approaching $25 billion; $23 billion net
of expected FirstNet reimbursements
-- With the passage of tax reform:
o $1 billion 2018 incremental capital investment
o More than $200 million in bonuses paid to frontline employees
in fourth quarter
o $800 million in voluntary funding to medical plans in fourth
quarter
o Additional impacts include a $20.3 billion increase in
reported fourth-quarter net income, including a more than $800
million increase in adjusted net income in the fourth quarter
-- 4.1 million total wireless net adds for the fourth quarter:
o 2.7 million in U.S., driven by connected devices, postpaid
phones and prepaid
o 1.3 million in Mexico
-- 300,000 total video net adds: 161,000 in U.S. and 139,000 in Latin America
-- U.S. wireless results:
o Operating income margin of 22.1% with EBITDA margin of 32.7%
and wireless service margin of 43.8%
o 329,000 postpaid phone net adds
o Added nearly 700,000 branded smartphones to base
o Best-ever fourth-quarter postpaid phone churn of 0.89%
-- Entertainment Group results:
o 95,000 IP broadband net adds; 19,000 total broadband net adds;
more than 7 million customer locations passed with fiber
o 161,000 total video net adds; 368,000 DIRECTV NOW net adds to
reach nearly 1.2 million DIRECTV NOW subscribers
-- International results:
o Revenues up 16.0% with strong growth in Mexico wireless and
DIRECTV Latin America
o Improved operating income and EBITDA growth driven by
improvements in Mexico and strong gains in Latin America
o 139,000 DIRECTV Latin America net adds with 13.6 million total
subscribers
Note: AT&T's fourth-quarter earnings conference call will be
webcast at 4:30 p.m. ET on Wednesday, January 31, 2018. The webcast
and related materials will be available on AT&T's Investor
Relations website at https://investors.att.com.
dALLAS, January 31, 2018 - AT&T Inc.* (NYSE:T) reported
solid wireless, business and international results in the fourth
quarter. Highlights include strong postpaid phone gains, record-low
fourth-quarter postpaid phone churn and DIRECTV NOW surpassing 1
million subscribers.
"The impact of tax reform and regulatory rationalization will be
substantial and positive for the U.S. economy and AT&T," said
Randall Stephenson, AT&T Chairman and CEO. "Our FirstNet win
and the opt-in by 100 percent of all states and territories will
enable us to put the industry's most robust spectrum assets to work
in building a best-in-class nationwide network for public safety
and first responders. On the Time Warner front, we look forward to
presenting our case in court and closing the deal."
Consolidated Financial Results
AT&T's consolidated revenues for the fourth quarter totaled
$41.7 billion versus $41.8 billion in the year-ago quarter,
primarily due to declines in legacy wireline services, wireless
service revenues and domestic video, which were mostly offset by
growth in wireless equipment and International. Compared with
results for the fourth quarter of 2016, operating expenses were
$41.3 billion versus $37.6 billion primarily due to a write-off of
certain network assets and higher wireless equipment costs;
operating income was $0.4 billion versus $4.2 billion; and
operating income margin was 0.9% versus 10.2%. When adjusting for
the write-off of certain network assets, non-cash actuarial loss on
benefit plans, amortization, merger- and integration-related
expenses and other items, operating income was $6.9 billion versus
$7.3 billion in the year-ago quarter and operating income margin
was 16.5%, versus 17.5% in the year-ago quarter.
Fourth-quarter net income attributable to AT&T was $19.0
billion, or $3.08 per diluted share, and reflects the impact of the
Tax Cuts and Jobs Act, compared to $2.4 billion, or $0.39 per
diluted share, in the year-ago quarter. Adjusting for the ($3.16)
benefit from the remeasurement of deferred tax liabilities, $0.41
write-off of certain network assets and natural disaster impacts,
$0.19 non-cash actuarial loss on benefit plans from the annual
remeasurement process and $0.26 of costs for amortization, merger-
and integration-related expenses and other items, earnings per
diluted share was $0.78 compared to an adjusted $0.66 in the
year-ago quarter. (The increase in adjusted diluted earnings per
share includes $0.13 impact of the new tax law on the
fourth-quarter 2017.)
Cash from operating activities was $9.9 billion in the fourth
quarter, and capital expenditures were $5.1 billion. Free cash flow
- cash from operating activities minus capital expenditures - was
$4.8 billion for the quarter.
Full-Year Results
For full-year 2017, compared with 2016 results, AT&T's
consolidated revenues totaled $160.5 billion versus $163.8 billion,
primarily due to declines in legacy wireline services and wireless
service revenues, which were partially offset by growth in
International and strategic business services. Operating expenses
were $139.6 billion compared with $139.4 billion. Excluding a $2.9
billion write-off of certain network assets, operating expenses
decreased due to cost efficiencies. Operating income was $20.9
billion versus $24.3 billion; and operating income margin was 13.0%
versus 14.9%. Net income attributable to AT&T reflects the
impact of the new tax law and was $29.5 billion versus $13.0
billion; and earnings per diluted share was $4.76, compared with
$2.10. With adjustments for both years, operating income was $31.8
billion versus $31.8 billion; operating income margin was 19.8%
versus 19.4%; and earnings per diluted share totaled $3.05,
compared with $2.84, an increase of 7.4%. (The increase in adjusted
diluted earnings per share includes $0.13 impact of the new tax law
on the fourth-quarter 2017.)
AT&T's full-year cash from operating activities was $39.2
billion versus $39.3 billion in 2016. Capital expenditures,
including capitalized interest, totaled $21.6 billion versus $22.4
billion in 2016. Full-year free cash flow was $17.6 billion
compared to $16.9 billion in 2016. The company's free cash flow
dividend payout ratio for the full year was 68%.(2)
2018 Outlook(1)
On a standalone basis, including impacts of tax reform and the
new ASC 606 revenue recognition standard, AT&T expects in
2018:
-- Adjusted EPS in the $3.50 range
-- Free cash flow of about $21 billion
-- Capital expenditures approaching $25 billion; $23 billion net
of expected FirstNet reimbursements and inclusive of $1 billion
incremental tax reform investment
(1) Adjustments include a non-cash mark-to-market benefit plan
gain/loss, merger-related interest expense, merger integration and
amortization costs and other adjustments. We expect the
mark-to-market adjustment which is driven by interest rates and
investment returns that are not reasonably estimable at this time,
to be the largest of these items. Accordingly, we cannot provide a
reconciliation between forecasted adjusted diluted EPS and reported
diluted EPS without unreasonable effort.
(2) Free cash flow dividend payout ratio is dividends divided by
free cash flow
*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) 2018 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 Twelve Months Ended
Unaudited December 31, Percent December 31, Percent
---------------------- -----------------------
2017 2016 Change 2017 2016 Change
---------------------------------- -------- ------- --------- --------- ------- ---------
Operating Revenues
Service $ 36,225 $ 37,369 -3.1% $ 145,597 $148,884 -2.2%
Equipment 5,451 4,472 21.9% 14,949 14,902 0.3%
----------------------------------- -------- ------- --------- -------
Total Operating Revenues 41,676 41,841 -0.4% 160,546 163,786 -2.0%
----------------------------------- -------- ------- --------- -------
Operating Expenses
Cost of services and sales
Equipment 6,532 5,667 15.3% 18,709 18,757 -0.3%
Broadcast, programming and
operations 6,003 5,612 7.0% 21,159 19,851 6.6%
Other cost of services
(exclusive of depreciation
and amortization shown
separately below) 9,797 9,840 -0.4% 37,511 38,276 -2.0%
Selling, general and
administrative 10,000 9,984 0.2% 34,917 36,347 -3.9%
Asset abandonment and impairments 2,914 361 -% 2,914 361 -%
Depreciation and amortization 6,071 6,129 -0.9% 24,387 25,847 -5.6%
----------------------------------- -------- ------- --------- -------
Total Operating Expenses 41,317 37,593 9.9% 139,597 139,439 0.1%
----------------------------------- -------- ------- --------- -------
Operating Income 359 4,248 -91.5% 20,949 24,347 -14.0%
----------------------------------- -------- ------- --------- -------
Interest Expense (1,926) (1,221) 57.7% (6,300) (4,910) 28.3%
Equity in Net Income (Loss) of
Affiliates 20 41 -51.2% (128) 98 -%
Other Income (Expense) - Net 264 123 -% 618 277 -%
----------------------------------- -------- ------- --------- -------
Income (Loss) Before Income Taxes (1,283) 3,191 -% 15,139 19,812 -23.6%
Income Tax (Benefit) Expense (20,419) 676 -% (14,708) 6,479 -%
----------------------------------- -------- ------- --------- -------
Net Income 19,136 2,515 -% 29,847 13,333 -%
----------------------------------- -------- ------- --------- -------
Less: Net Income Attributable to
Noncontrolling Interest (99) (78) 26.9% (397) (357) 11.2%
----------------------------------- -------- ------- --------- -------
Net Income Attributable to AT&T $ 19,037 $ 2,437 -% $ 29,450 $ 12,976 -%
=================================== ======== ======= ========= =======
Basic Earnings Per Share
Attributable to AT&T $ 3.08 $ 0.39 -% $ 4.77 $ 2.10 -%
Weighted Average Common
Shares Outstanding (000,000) 6,163 6,161 -% 6,164 6,168 -0.1%
Diluted Earnings Per Share
Attributable to AT&T $ 3.08 $ 0.39 -% $ 4.76 $ 2.10 -%
Weighted Average Common
Shares Outstanding with Dilution
(000,000) 6,182 6,181 -% 6,183 6,189 -0.1%
----------------------------------- -------- ------- ----- --------- ------- -----
AT&T Inc.
Financial Data
Consolidated Balance Sheets
------------------------------------------------------------------------------------------------------
Dollars in millions
Unaudited Dec. 31, Dec. 31,
2017 2016
------------------------------------------------------------------------------- -------- --------
Assets
Current Assets
Cash and cash equivalents $ 50,498 $ 5,788
Accounts receivable - net of allowances for doubtful accounts of $663 and $661 16,522 16,794
Prepaid expenses 1,369 1,555
Other current assets 10,757 14,232
-------------------------------------------------------------------------------- -------- --------
Total current assets 79,146 38,369
-------------------------------------------------------------------------------- -------- --------
Property, Plant and Equipment - Net 125,222 124,899
Goodwill 105,449 105,207
Licenses 96,136 94,176
Customer Lists and Relationships - Net 10,676 14,243
Other Intangible Assets - Net 7,464 8,441
Investments in Equity Affiliates 1,560 1,674
Other Assets 18,444 16,812
-------------------------------------------------------------------------------- -------- --------
Total Assets $ 444,097 $ 403,821
================================================================================ ======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year $ 38,374 $ 9,832
Accounts payable and accrued liabilities 34,470 31,138
Advanced billing and customer deposits 4,213 4,519
Accrued taxes 1,262 2,079
Dividends payable 3,070 3,008
-------------------------------------------------------------------------------- -------- --------
Total current liabilities 81,389 50,576
-------------------------------------------------------------------------------- -------- --------
Long-Term Debt 125,972 113,681
-------------------------------------------------------------------------------- -------- --------
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes 43,207 60,128
Postemployment benefit obligation 31,775 33,578
Other noncurrent liabilities 19,747 21,748
-------------------------------------------------------------------------------- -------- --------
Total deferred credits and other noncurrent liabilities 94,729 115,454
-------------------------------------------------------------------------------- -------- --------
Stockholders' Equity
Common stock 6,495 6,495
Additional paid-in capital 89,563 89,604
Retained earnings 52,029 34,734
Treasury stock (12,714) (12,659)
Accumulated other comprehensive income 5,488 4,961
Noncontrolling interest 1,146 975
-------------------------------------------------------------------------------- -------- --------
Total stockholders' equity 142,007 124,110
-------------------------------------------------------------------------------- -------- --------
Total Liabilities and Stockholders' Equity $ 444,097 $ 403,821
================================================================================ ======== ========
AT&T Inc.
Financial Data
Consolidated Statements of Cash Flows
---------------------------------------------------------------------------------------------------------
Dollars in millions Year Ended
Unaudited December 31,
2017 2016
---------------------------------------------------------------------------------- -------- --------
Operating Activities
Net income $ 29,847 $ 13,333
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 24,387 25,847
Undistributed loss (earnings) from investments in equity affiliates 174 (37)
Provision for uncollectible accounts 1,642 1,474
Deferred income tax (benefit) expense (15,940) 2,947
Net (gain) loss from sale of investments, net of impairments (282) (169)
Actuarial loss (gain) on pension and postretirement benefits 1,258 1,024
Asset abandonments and impairments 2,914 361
Changes in operating assets and liabilities:
Accounts receivable (986) (1,003)
Other current assets (777) 1,708
Accounts payable and other accrued liabilities 816 118
Equipment installment receivables and related sales (263) (576)
Deferred fulfillment costs (1,422) (2,359)
Retirement benefit funding (1,066) (910)
Other - net (1,151) (2,414)
----------------------------------------------------------------------------------- -------- --------
Total adjustments 9,304 26,011
----------------------------------------------------------------------------------- -------- --------
Net Cash Provided by Operating Activities 39,151 39,344
----------------------------------------------------------------------------------- -------- --------
Investing Activities
Capital expenditures:
Purchase of property and equipment (20,647) (21,516)
Interest during construction (903) (892)
Acquisitions, net of cash acquired 1,123 (2,959)
Dispositions 59 646
(Purchases) sales of securities, net (4) 506
Other 1 -
----------------------------------------------------------------------------------- -------- --------
Net Cash Used in Investing Activities (20,371) (24,215)
----------------------------------------------------------------------------------- -------- --------
Financing Activities
Issuance of long-term debt 48,793 10,140
Repayment of long-term debt (12,339) (10,823)
Purchase of treasury stock (463) (512)
Issuance of treasury stock 33 146
Dividends paid (12,038) (11,797)
Other 1,944 (1,616)
----------------------------------------------------------------------------------- -------- --------
Net Cash Provided by (Used in) Financing Activities 25,930 (14,462)
----------------------------------------------------------------------------------- -------- --------
Net increase in cash and cash equivalents 44,710 667
Cash and cash equivalents beginning of year 5,788 5,121
----------------------------------------------------------------------------------- -------- --------
Cash and Cash Equivalents End of Year $ 50,498 $ 5,788
=================================================================================== ======== ========
AT&T Inc.
Consolidated Supplementary Data
Supplementary Financial Data
------------------------------------------------------------------------------------------------------------
Dollars in millions except per
share amounts Three Months Ended Twelve Months Ended
Unaudited December 31, Percent December 31, Percent
---------------------- -------------------------
2017 2016 Change 2017 2016 Change
---------------------------------- -------- ------- --------- ------- ------- ---------
Capital expenditures
Purchase of property and equipment $ 4,891 $ 6,233 -21.5% $ 20,647$ 21,516 -4.0%
Interest during construction $ 185 $ 223 -17.0% $ 903$ 892 1.2%
Dividends Declared per Share $ 0.50 $ 0.49 2.0% $ 1.97$ 1.93 2.1%
End of Period Common Shares
Outstanding (000,000) 6,139 6,139 -%
Debt Ratio 53.6% 49.9% 370 BP
Total Employees 254,000 268,540 -5.4%
----------------------------------- -------- ------- ----- ------- ------- -----
Supplementary Operating Data
------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited December 31, Percent
-------------------------
2017 2016 Change
---------------------------------- -------- ------- ----- ------- ------- ---------
Wireless Subscribers
Domestic 141,567 134,859 5.0%
Mexico 15,099 11,973 26.1%
---------------------------------- -------- ------- ----- ------- -------
Total Wireless Subscribers 156,666 146,832 6.7%
----------------------------------- -------- ------- ----- ------- -------
Total Branded Wireless Subscribers 108,105 103,011 4.9%
Video Connections
Domestic 25,270 25,560 -1.1%
PanAmericana 8,270 7,206 14.8%
Brazil 5,359 5,249 2.1%
---------------------------------- -------- ------- ----- ------- -------
Total Video Connections 38,899 38,015 2.3%
----------------------------------- -------- ------- ----- ------- -------
Broadband Connections
IP 14,487 13,864 4.5%
DSL 1,232 1,741 -29.2%
---------------------------------- -------- ------- ----- ------- -------
Total Broadband Connections 15,719 15,605 0.7%
----------------------------------- -------- ------- ----- ------- -------
Voice Connections
Network Access Lines 11,753 13,986 -16.0%
U-verse VoIP Connections 5,682 5,787 -1.8%
---------------------------------- -------- ------- ----- ------- -------
Total Retail Consumer Voice
Connections 17,435 19,773 -11.8%
----------------------------------- -------- ------- ----- ------- ------- -----
Three Months Ended Twelve Months Ended
December 31, Percent December 31, Percent
---------------------- -------------------------
2017 2016 Change 2017 2016 Change
---------------------------------- -------- ------- --------- ------- ------- ---------
Wireless Net Additions
Domestic 2,741 1,522 80.1% 9,427 6,196 52.1%
Mexico 1,320 1,275 3.5% 3,126 3,289 -5.0%
---------------------------------- -------- ------- ------- -------
Total Wireless Net Additions 4,061 2,797 45.2% 12,553 9,485 32.3%
----------------------------------- -------- ------- ------- -------
Total Branded Wireless Net
Additions 2,029 2,221 -8.6% 4,811 6,102 -21.2%
Video Net Additions
Domestic 160 239 -33.1% (291) 136 -%
PanAmericana 69 67 3.0% 232 140 65.7%
Brazil 70 (88) -% (190) (195) 2.6%
---------------------------------- -------- ------- ------- -------
Total Video Net Additions 299 218 37.2% (249) 81 -%
----------------------------------- -------- ------- ------- -------
Broadband Net Additions
IP 103 149 -30.9% 623 596 4.5%
DSL (99) (162) 38.9% (509) (769) 33.8%
---------------------------------- -------- ------- ------- -------
Total Broadband Net Additions 4 (13) -% 114 (173) -%
----------------------------------- -------- ------- ----- ------- ------- -----
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 Twelve Months Ended
Unaudited December 31, Percent December 31, Percent
-------------------------- ---------------------------
2017 2016 Change 2017 2016 Change
-------------------------------- ------ ------ --------- ------- ------ ---------
Segment Operating Revenues
Wireless service $ 7,933$ 7,982 -0.6% $ 31,902$ 31,850 0.2%
Fixed strategic services 3,138 2,962 5.9% 12,227 11,431 7.0%
Legacy voice and data services 3,359 3,793 -11.4% 13,931 16,370 -14.9%
Other service and equipment 938 947 -1.0% 3,451 3,566 -3.2%
Wireless equipment 3,022 2,349 28.7% 7,895 7,771 1.6%
-------------------------------- ------ ------ ------- ------
Total Segment Operating
Revenues 18,390 18,033 2.0% 69,406 70,988 -2.2%
--------------------------------- ------ ------ ------- ------
Segment Operating Expenses
Operations and support expenses 12,207 11,746 3.9% 42,929 44,330 -3.2%
Depreciation and amortization 2,354 2,264 4.0% 9,326 9,832 -5.1%
--------------------------------- ------ ------ ------- ------
Total Segment Operating
Expenses 14,561 14,010 3.9% 52,255 54,162 -3.5%
--------------------------------- ------ ------ ------- ------
Segment Operating Income 3,829 4,023 -4.8% 17,151 16,826 1.9%
Equity in Net Income (Loss) of
Affiliates (1) - -% (1) - -%
--------------------------------- ------ ------ ------- ------
Segment Contribution $ 3,828$ 4,023 -4.8% $ 17,150$ 16,826 1.9%
================================= ====== ====== ======= ======
Segment Operating Income Margin 20.8% 22.3% 24.7% 23.7%
--------------------------------- ------ ------ ----- ------- ------ -----
Supplementary Operating Data
----------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited December 31, Percent
---------------------------
2017 2016 Change
-------------------------------- ------ ------ ----- ------- ------ ---------
Business Solutions Wireless
Subscribers
Postpaid/Branded 51,811 50,688 2.2%
Reseller 87 65 33.8%
Connected Devices 38,534 30,649 25.7%
-------------------------------- ------ ------ ----- ------- ------
Total Business Solutions Wireless
Subscribers 90,432 81,402 11.1%
--------------------------------- ------ ------ ----- ------- ------
Business Solutions IP Broadband Connections 1,025 977 4.9%
========================================================= ===== ======= ====== =====
Three Months Ended Twelve Months Ended
December 31, Percent December 31, Percent
-------------------------- ---------------------------
2017 2016 Change 2017 2016 Change
-------------------------------- ------ ------ --------- ------- ------ ---------
Business Solutions Wireless Net
Additions
Postpaid/Branded 221 250 -11.6% 147 759 -80.6%
Reseller 4 1 -% 7 (33) -%
Connected Devices 2,624 1,263 -% 9,639 5,330 80.8%
-------------------------------- ------ ------ ------- ------
Total Business Solutions Wireless
Net Additions 2,849 1,514 88.2% 9,793 6,056 61.7%
--------------------------------- ------ ------ ------- ------
Business Solutions Wireless
Postpaid Churn 1.08% 1.11% -3 BP 1.04% 1.00% 4 BP
--------------------------------- ------ ------ ------- ------
Business Solutions IP Broadband
Net Additions 7 14 -50.0% 48 66 -27.3%
--------------------------------- ------ ------ ----- ------- ------ -----
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 Twelve Months Ended
Unaudited December 31, Percent December 31, Percent
--------------------------- ---------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------- ------ --------- ------ ------- ---------
Segment Operating Revenues
Video entertainment $ 9,355$ 9,567 -2.2% $ 36,728$ 36,460 0.7%
High-speed internet 1,890 1,910 -1.0% 7,674 7,472 2.7%
Legacy voice and data services 910 1,104 -17.6% 3,920 4,829 -18.8%
Other service and equipment 590 625 -5.6% 2,376 2,534 -6.2%
------------------------------- ------- ------ ------ -------
Total Segment Operating
Revenues 12,745 13,206 -3.5% 50,698 51,295 -1.2%
-------------------------------- ------- ------ ------ -------
Segment Operating Expenses
Operations and support expenses 10,308 10,463 -1.5% 39,420 39,338 0.2%
Depreciation and amortization 1,367 1,381 -1.0% 5,623 5,862 -4.1%
-------------------------------- ------- ------ ------ -------
Total Segment Operating
Expenses 11,675 11,844 -1.4% 45,043 45,200 -0.3%
-------------------------------- ------- ------ ------ -------
Segment Operating Income 1,070 1,362 -21.4% 5,655 6,095 -7.2%
Equity in Net Income (Loss) of
Affiliates (7) 8 -% (30) 9 -%
-------------------------------- ------- ------ ------ -------
Segment Contribution $ 1,063$ 1,370 -22.4% $ 5,625$ 6,104 -7.8%
================================ ======= ====== ====== =======
Segment Operating Income Margin 8.4% 10.3% 11.2% 11.9%
-------------------------------- ------- ------ ----- ------ ------- -----
Supplementary Operating Data
----------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited December 31, Percent
---------------------------
2017 2016 Change
------------------------------- ------- ------ --------- ------ ------- ---------
Video Connections
Satellite 20,458 21,012 -2.6%
U-verse 3,631 4,253 -14.6%
DIRECTV NOW 1,155 267 -%
------------------------------- ------- ------ ----- ------ -------
Total Video Connections 25,244 25,532 -1.1%
-------------------------------- ------- ------ ----- ------ -------
Broadband Connections
IP 13,462 12,888 4.5%
DSL 888 1,291 -31.2%
------------------------------- ------- ------ ----- ------ -------
Total Broadband Connections 14,350 14,179 1.2%
-------------------------------- ------- ------ ----- ------ -------
Voice Connections
Retail Consumer Switched Access
Lines 4,774 5,853 -18.4%
U-verse Consumer VoIP
Connections 5,222 5,425 -3.7%
------------------------------- ------- ------ ----- ------ -------
Total Retail Consumer Voice
Connections 9,996 11,278 -11.4%
-------------------------------- ------- ------ ----- ------ ------- -----
Three Months Ended Twelve Months Ended
December 31, Percent December 31, Percent
--------------------------- ---------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------- ------ --------- ------ ------- ---------
Video Net Additions
Satellite (147) 235 -% (554) 1,228 -%
U-verse (60) (262) 77.1% (622) (1,361) 54.3%
DIRECTV NOW 368 267 37.8% 888 267 -%
------------------------------- ------- ------ ------ -------
Total Video Net Additions 161 240 -32.9% (288) 134 -%
-------------------------------- ------- ------ ------ -------
Broadband Net Additions
IP 95 136 -30.1% 574 532 7.9%
DSL (76) (133) 42.9% (403) (639) 36.9%
------------------------------- ------- ------ ------ -------
Total Broadband Net Additions 19 3 -% 171 (107) -%
-------------------------------- ------- ------ ----- ------ ------- -----
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 Twelve Months Ended
Unaudited December 31, Percent December 31, Percent
---------------------------- ---------------------------
2017 2016 Change 2017 2016 Change
------------------------------ ------ --- ------ --- --------- ------- ------ ---------
Segment Operating Revenues
Service $ 6,409$ 6,731 -4.8% $ 26,053$ 27,536 -5.4%
Equipment 1,864 1,688 10.4% 5,499 5,664 -2.9%
------------------------------ ------ --- ------ --- ------- ------
Total Segment Operating
Revenues 8,273 8,419 -1.7% 31,552 33,200 -5.0%
------------------------------- ------ --- ------ --- ------- ------
Segment Operating Expenses
Operations and support expenses 5,367 5,316 1.0% 18,966 19,659 -3.5%
Depreciation and amortization 886 918 -3.5% 3,507 3,716 -5.6%
------------------------------- ------ --- ------ --- ------- ------
Total Segment Operating
Expenses 6,253 6,234 0.3% 22,473 23,375 -3.9%
------------------------------- ------ --- ------ --- ------- ------
Segment Operating Income 2,020 2,185 -7.6% 9,079 9,825 -7.6%
Equity in Net Income of
Affiliates - - -% - - -%
------------------------------- ------ --- ------ --- ------- ------
Segment Contribution $ 2,020$ 2,185 -7.6% $ 9,079$ 9,825 -7.6%
=============================== ====== ====== === ======= ======
Segment Operating Income Margin 24.4% 26.0% 28.8% 29.6%
------------------------------- ------ ------ ----- ------- ------ -----
Supplementary Operating Data
----------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited December 31, Percent
---------------------------
2017 2016 Change
------------------------------ ------ --- ------ --- ----- ------- ------ ---------
Consumer Mobility Subscribers
Postpaid 26,064 27,095 -3.8%
Prepaid 15,335 13,536 13.3%
------------------------------ ------ --- ------ --- ----- ------- ------
Branded 41,399 40,631 1.9%
Reseller 9,279 11,884 -21.9%
Connected Devices 457 942 -51.5%
------------------------------- ------ --- ------ --- ----- ------- ------
Total Consumer Mobility
Subscribers 51,135 53,457 -4.3%
Three Months Ended Twelve Months Ended
December 31, Percent December 31, Percent
------------------------- -------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------- --- ------ --------- -------- ------- ---------
Consumer Mobility Net Additions
Postpaid 320 270 18.5% 447 359 24.5%
Prepaid(1) 140 406 -65.5% 1,013 1,575 -35.7%
-------------------------------- ------- --- ------ -------- -------
Branded 460 676 -32.0% 1,460 1,934 -24.5%
Reseller (533) (673) 20.8% (1,878) (1,813) -3.6%
Connected Devices(1) (35) 5 -% 52 19 -%
-------------------------------- ------- --- ------ -------- -------
Total Consumer Mobility Net
Additions (108) 8 -% (366) 140 -%
-------------------------------- ------- --- ------ -------- -------
Total Churn 2.48% 2.43% 5 BP 2.36% 2.15% 21 BP
Postpaid Churn 1.18% 1.25% -7 BP 1.17% 1.19% -2 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 Twelve Months Ended
Unaudited December 31, Percent December 31, Percent
--------------------------- ---------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------ --- ------ --------- ------- ------ ---------
Segment Operating Revenues
Video entertainment $ 1,391$ 1,261 10.3% $ 5,456$ 4,910 11.1%
Wireless service 501 477 5.0% 2,047 1,905 7.5%
Wireless equipment 323 171 88.9% 766 468 63.7%
------------------------------- ------ --- ------ ------- ------
Total Segment Operating
Revenues 2,215 1,909 16.0% 8,269 7,283 13.5%
-------------------------------- ------ --- ------ ------- ------
Segment Operating Expenses
Operations and support expenses 1,936 1,879 3.0% 7,404 6,830 8.4%
Depreciation and amortization 313 298 5.0% 1,218 1,166 4.5%
-------------------------------- ------ --- ------ ------- ------
Total Segment Operating
Expenses 2,249 2,177 3.3% 8,622 7,996 7.8%
-------------------------------- ------ --- ------ ------- ------
Segment Operating Income (Loss) (34) (268) 87.3% (353) (713) 50.5%
Equity in Net Income of
Affiliates 25 28 -10.7% 87 52 67.3%
-------------------------------- ------ --- ------ ------- ------
Segment Contribution $ (9)$ (240) 96.3% $ (266)$ (661) 59.8%
================================ ====== ====== ======= ======
Segment Operating Income Margin (1.5)% (14.0)% (4.3)% (9.8)%
-------------------------------- ------ ------ ----- ------- ------ -----
Supplementary Operating Data
----------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited December 31, Percent
---------------------------
2017 2016 Change
------------------------------- ------ --- ------ ----- ------- ------ ---------
Mexican Wireless Subscribers
Postpaid 5,498 4,965 10.7%
Prepaid 9,397 6,727 39.7%
------------------------------- ------ --- ------ ----- ------- ------
Branded 14,895 11,692 27.4%
Reseller 204 281 -27.4%
-------------------------------- ------ --- ------ ----- ------- ------
Total Mexican Wireless
Subscribers 15,099 11,973 26.1%
-------------------------------- ------ --- ------ ----- ------- ------
Latin America Satellite
Subscribers
PanAmericana 8,270 7,206 14.8%
SKY Brazil 5,359 5,249 2.1%
------------------------------- ------ --- ------ ----- ------- ------
Total Latin America Satellite
Subscribers 13,629 12,455 9.4%
================================ ====== === ====== ===== ======= ====== =====
Three Months Ended Twelve Months Ended
December 31, Percent December 31, Percent
--------------------------- ---------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------ --- ------ --------- ------- ------ ---------
Mexican Wireless Net Additions
Postpaid 182 233 -21.9% 533 677 -21.3%
Prepaid 1,166 1,062 9.8% 2,670 2,732 -2.3%
------------------------------- ------ --- ------ ------- ------
Branded 1,348 1,295 4.1% 3,203 3,409 -6.0%
Reseller (28) (20) -40.0% (77) (120) 35.8%
-------------------------------- ------ --- ------ ------- ------
Total Mexican Wireless Net
Additions 1,320 1,275 3.5% 3,126 3,289 -5.0%
-------------------------------- ------ --- ------ ------- ------
Latin America Satellite Net
Additions
PanAmericana 69 67 3.0% 232 140 65.7%
SKY Brazil 70 (88) -% (190) (195) 2.6%
------------------------------- ------ --- ------ ------- ------
Total Latin America Satellite
Net Additions 139 (21) -% 42 (55) -%
-------------------------------- ------ --- ------ ----- ------- ------ -----
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 Twelve Months Ended
Unaudited December 31, Percent December 31, Percent
---------------------------- -------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------- --- ------ --------- ------- ------- ---------
Operating Revenues
Service $ 14,342$ 14,713 -2.5% $ 57,955$ 59,386 -2.4%
Equipment 4,886 4,037 21.0% 13,394 13,435 -0.3%
------------------------------ ------- --- ------ ------- -------
Total Operating Revenues 19,228 18,750 2.5% 71,349 72,821 -2.0%
------------------------------- ------- --- ------ ------- -------
Operating Expenses
Operations and support expenses 12,947 12,064 7.3% 43,255 43,886 -1.4%
Depreciation and amortization 2,028 2,048 -1.0% 8,027 8,292 -3.2%
------------------------------- ------- --- ------ ------- -------
Total Operating Expenses 14,975 14,112 6.1% 51,282 52,178 -1.7%
------------------------------- ------- --- ------ ------- -------
Operating Income $ 4,253$ 4,638 -8.3% $ 20,067$ 20,643 -2.8%
=============================== ======= ====== ======= =======
Operating Income Margin 22.1% 24.7% 28.1% 28.3%
------------------------------- ------- ------ ----- ------- ------- -----
Supplementary Operating Data
--------------------------------------------------------------------------------------------------------------
Subscribers and connections in
thousands
Unaudited December 31, Percent
-------------------------
2017 2016 Change
------------------------------ ------- --- ------ ----- ------- ------- ---------
AT&T Mobility Subscribers
Postpaid 77,875 77,783 0.1%
Prepaid 15,335 13,536 13.3%
------------------------------ ------- --- ------ ----- ------- -------
Branded 93,210 91,319 2.1%
Reseller 9,366 11,949 -21.6%
Connected Devices 38,991 31,591 23.4%
------------------------------- ------- --- ------ ----- ------- -------
Total AT&T Mobility Subscribers 141,567 134,859 5.0%
------------------------------- ------- --- ------ ----- ------- -------
Domestic Licensed POPs
(000,000) 326 322 1.2%
Three Months Ended Twelve Months Ended
December 31, Percent December 31, Percent
-------------------------
2017 2016 Change 2017 2016 Change
------------------------------- ------- ---- ----- --------- -------- ------- ---------
AT&T Mobility Net Additions
Postpaid 541 520 4.0% 594 1,118 -46.9%
Prepaid(1) 140 406 -65.5% 1,013 1,575 -35.7%
-------------------------------- ------- ---- ----- -------- -------
Branded 681 926 -26.5% 1,607 2,693 -40.3%
Reseller (529) (672) 21.3% (1,871) (1,846) -1.4%
Connected Devices(1) 2,589 1,268 -% 9,691 5,349 81.2%
-------------------------------- ------- ---- ----- -------- -------
Total AT&T Mobility Net
Additions 2,741 1,522 80.1% 9,427 6,196 52.1%
-------------------------------- ------- ---- ----- -------- -------
M&A Activity, Partitioned
Customers and
Other Adjustments - (1) -% (2,719) 23 -%
Total Churn 1.38% 1.71% -33 BP 1.36% 1.48% -12 BP
Postpaid Churn 1.12% 1.16% -4 BP 1.08% 1.07% 1 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
December 31, 2017
-------------------- -------- ---------- ------- ------------ --------- ---------- --------------
Operations Equity in
and Depreciation Operating Net Income
Support and Income (Loss) of Segment
Revenues Expenses EBITDA Amortization (Loss) Affiliates Contribution
-------------------- -------- ---------- ------- ------------ --------- ---------- --------------
Business Solutions $ 18,390 $ 12,207 $ 6,183 $ 2,354 $ 3,829 $ (1) $ 3,828
Entertainment Group 12,745 10,308 2,437 1,367 1,070 (7) 1,063
Consumer Mobility 8,273 5,367 2,906 886 2,020 - 2,020
International 2,215 1,936 279 313 (34) 25 (9)
-------------------- -------- ---------- ------- ------------ --------- ---------- --------------
Segment Total 41,623 29,818 11,805 4,920 6,885 $ 17 $ 6,902
==================== ======== ========== ======= ============ ========= ========== ==============
Corporate and Other 207 157 50 18 32
Acquisition-related
items - 176 (176) 1,100 (1,276)
Certain Significant
items (154) 5,095 (5,249) 33 (5,282)
-------------------- -------- ---------- ------- ------------ ---------
AT&T Inc. $ 41,676 $ 35,246 $ 6,430 $ 6,071 $ 359
==================== ======== ========== ======= ============ =========
December 31, 2016
-------------------- -------- ---------- ------- ------------ --------- ---------- --------------
Operations Equity in
and Depreciation Operating Net Income
Support and Income (Loss) of Segment
Revenues Expenses EBITDA Amortization (Loss) Affiliates Contribution
-------------------- -------- ---------- ------- ------------ --------- ---------- --------------
Business Solutions $ 18,033 $ 11,746 $ 6,287 $ 2,264 $ 4,023 $ - $ 4,023
Entertainment Group 13,206 10,463 2,743 1,381 1,362 8 1,370
Consumer Mobility 8,419 5,316 3,103 918 2,185 - 2,185
International 1,909 1,879 30 298 (268) 28 (240)
-------------------- -------- ---------- ------- ------------ --------- ---------- --------------
Segment Total 41,567 29,404 12,163 4,861 7,302 $ 36 $ 7,338
==================== ======== ========== ======= ============ ========= ========== ==============
Corporate and Other 284 233 51 11 40
Acquisition-related
items - 385 (385) 1,228 (1,613)
Certain Significant
items (10) 1,442 (1,452) 29 (1,481)
-------------------- -------- ---------- ------- ------------ ---------
AT&T Inc. $ 41,841 $ 31,464 $ 10,377 $ 6,129 $ 4,248
==================== ======== ========== ======= ============ =========
Twelve Months Ended
-------------------------------------------------------------------------------------------------------------
Dollars in millions
Unaudited
December 31, 2017
-------------------- -------- ---------- ------- ------------ --------- ---------- ------------
Operations Equity in
and Depreciation Operating Net Income
Support and Income (Loss) of Segment
Revenues Expenses EBITDA Amortization (Loss) Affiliates Contribution
-------------------- -------- ---------- ------- ------------ --------- ---------- ------------
Business Solutions $ 69,406 $ 42,929 $ 26,477 $ 9,326 $ 17,151 $ (1) $ 17,150
Entertainment Group 50,698 39,420 11,278 5,623 5,655 (30) 5,625
Consumer Mobility 31,552 18,966 12,586 3,507 9,079 - 9,079
International 8,269 7,404 865 1,218 (353) 87 (266)
-------------------- -------- ---------- ------- ------------ --------- ---------- ------------
Segment Total 159,925 108,719 51,206 19,674 31,532 $ 56 $ 31,588
==================== ======== ========== ======= ============ ========= ========== ============
Corporate and Other 864 554 310 72 238
Acquisition-related
items - 798 (798) 4,608 (5,406)
Certain Significant
items (243) 5,139 (5,382) 33 (5,415)
-------------------- -------- ---------- ------- ------------ ---------
AT&T Inc. $ 160,546 $ 115,210 $ 45,336 $ 24,387 $ 20,949
==================== ======== ========== ======= ============ =========
December 31, 2016
-------------------- -------- ---------- ------- ------------ --------- ---------- ------------
Operations Equity in
and Depreciation Operating Net Income
Support and Income (Loss) of Segment
Revenues Expenses EBITDA Amortization (Loss) Affiliates Contribution
-------------------- -------- ---------- ------- ------------ --------- ---------- ------------
Business Solutions $ 70,988 $ 44,330 $ 26,658 $ 9,832 $ 16,826 $ - $ 16,826
Entertainment Group 51,295 39,338 11,957 5,862 6,095 9 6,104
Consumer Mobility 33,200 19,659 13,541 3,716 9,825 - 9,825
International 7,283 6,830 453 1,166 (713) 52 (661)
-------------------- -------- ---------- ------- ------------ --------- ---------- ------------
Segment Total 162,766 110,157 52,609 20,576 32,033 $ 61 $ 32,094
==================== ======== ========== ======= ============ ========= ========== ============
Corporate and Other 1,043 1,173 (130) 65 (195)
Acquisition-related
items - 1,203 (1,203) 5,177 (6,380)
Certain Significant
items (23) 1,059 (1,082) 29 (1,111)
-------------------- -------- ---------- ------- ------------ ---------
AT&T Inc. $ 163,786 $ 113,592 $ 50,194 $ 25,847 $ 24,347
==================== ======== ========== ======= ============ =========
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 Twelve Months Ended
December 31, December 31,
-------------------- ---------------------
2017 2016 2017 2016
------------------------------------------ --------- -------- -------- --------
Net cash provided by operating activities $ 9,877 $ 10,142 $ 39,151 $ 39,344
Less: Capital expenditures (5,076) (6,456) (21,550) (22,408)
------------------------------------------ --------- -------- -------- --------
Free Cash Flow 4,801 3,686 17,601 16,936
------------------------------------------ --------- -------- -------- --------
Less: Dividends paid (3,008) (2,947) (12,038) (11,797)
------------------------------------------ --------- -------- -------- --------
Free Cash Flow after Dividends $ 1,793 $ 739 $ 5,563 $ 5,139
------------------------------------------ --------- -------- -------- --------
Free Cash Flow Dividend Payout Ratio 62.7% 80.0% 68.4% 69.7%
------------------------------------------ --------- -------- -------- --------
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 Twelve Months Ended
December 31, December 31,
-------------------- ---------------------
2017 2016 2017 2016
-------------------------------------------- ---------- ------- --------- -------
Net Income $ 19,136 $ 2,515 $ 29,847 $ 13,333
Additions:
Income Tax (Benefit) Expense (20,419) 676 (14,708) 6,479
Interest Expense 1,926 1,221 6,300 4,910
Equity in Net (Income) Loss of Affiliates (20) (41) 128 (98)
Other (Income) Expense - Net (264) (123) (618) (277)
Depreciation and amortization 6,071 6,129 24,387 25,847
-------------------------------------------- ---------- ------- --------- -------
EBITDA 6,430 10,377 45,336 50,194
-------------------------------------------- ---------- ------- --------- -------
Total Operating Revenues 41,676 41,841 160,546 163,786
Service Revenues 36,225 37,369 145,597 148,884
EBITDA Margin 15.4% 24.8% 28.2% 30.6%
EBITDA Service Margin 17.8% 27.8% 31.1% 33.7%
-------------------------------------------- ---------- ------- --------- -------
2
Segment EBITDA, EBITDA Margin and EBITDA Service Margin
--------------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- -------------------
2017 2016 2017 2016
------------------------------------------ --------- -------- -------- --------
Business Solutions Segment
------------------------------------------ --------- -------- -------- --------
Segment Contribution $ 3,828 $ 4,023 $ 17,150 $ 16,826
Additions:
Equity in Net (Income) Loss of Affiliates 1 - 1 -
Depreciation and amortization 2,354 2,264 9,326 9,832
------------------------------------------ --------- -------- -------- --------
EBITDA 6,183 6,287 26,477 26,658
------------------------------------------ --------- -------- -------- --------
Total Segment Operating Revenues 18,390 18,033 69,406 70,988
Segment Operating Income Margin 20.8% 22.3% 24.7% 23.7%
EBITDA Margin 33.6% 34.9% 38.1% 37.6%
Entertainment Group Segment
------------------------------------------ --------- -------- -------- --------
Segment Contribution $ 1,063 $ 1,370 $ 5,625 $ 6,104
Additions:
Equity in Net (Income) Loss of Affiliates 7 (8) 30 (9)
Depreciation and amortization 1,367 1,381 5,623 5,862
------------------------------------------ --------- -------- -------- --------
EBITDA 2,437 2,743 11,278 11,957
------------------------------------------ --------- -------- -------- --------
Total Segment Operating Revenues 12,745 13,206 50,698 51,295
Segment Operating Income Margin 8.4% 10.3% 11.2% 11.9%
EBITDA Margin 19.1% 20.8% 22.2% 23.3%
Consumer Mobility Segment
------------------------------------------ --------- -------- -------- --------
Segment Contribution $ 2,020 $ 2,185 $ 9,079 $ 9,825
Additions:
Depreciation and amortization 886 918 3,507 3,716
------------------------------------------ --------- -------- -------- --------
EBITDA 2,906 3,103 12,586 13,541
------------------------------------------ --------- -------- -------- --------
Total Segment Operating Revenues 8,273 8,419 31,552 33,200
Service Revenues 6,409 6,731 26,053 27,536
Segment Operating Income Margin 24.4% 26.0% 28.8% 29.6%
EBITDA Margin 35.1% 36.9% 39.9% 40.8%
EBITDA Service Margin 45.3% 46.1% 48.3% 49.2%
International Segment
------------------------------------------ --------- -------- -------- --------
Segment Contribution $ (9) $ (240) $ (266) $ (661)
Additions:
Equity in Net (Income) of Affiliates (25) (28) (87) (52)
Depreciation and amortization 313 298 1,218 1,166
------------------------------------------ --------- -------- -------- --------
EBITDA 279 30 865 453
------------------------------------------ --------- -------- -------- --------
Total Segment Operating Revenues 2,215 1,909 8,269 7,283
Segment Operating Income Margin -1.5% -14.0% -4.3% -9.8%
EBITDA Margin 12.6% 1.6% 10.5% 6.2%
------------------------------------------ --------- -------- -------- --------
3
Supplemental AT&T Mobility EBITDA, EBITDA Margin and EBITDA Service Margin
--------------------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- -------------------
2017 2016 2017 2016
------------------------------------------- -------- --- ------- -------- --------
AT&T Mobility
------------------------------------------- -------- --- ------- -------- --------
Operating Income $ 4,253 $ 4,638 $ 20,067 $ 20,643
Add: Depreciation and amortization 2,028 2,048 8,027 8,292
------------------------------------------- -------- --- ------- -------- --------
EBITDA 6,281 6,686 28,094 28,935
------------------------------------------- -------- --- ------- -------- --------
Total Operating Revenues 19,228 18,750 71,349 72,821
Service Revenues 14,342 14,713 57,955 59,386
Operating Income Margin 22.1% 24.7% 28.1% 28.3%
EBITDA Margin 32.7% 35.7% 39.4% 39.7%
EBITDA Service Margin 43.8% 45.4% 48.5% 48.7%
------------------------------------------- -------- --- ------- -------- --------
Supplemental Latin America EBITDA and EBITDA Margin
-----------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- ---------------------
2017 2016 2017 2016
------------------------------------- --------- -------- -------- -------
International - Latin America
------------------------------------- --------- -------- -------- -------
Operating Income $ 135 $ 49 $ 435 $ 228
Add: Depreciation and amortization 207 215 849 835
------------------------------------- --------- -------- -------- -------
EBITDA 342 264 1,284 1,063
------------------------------------- --------- -------- -------- -------
Total Operating Revenues 1,391 1,261 5,456 4,910
Operating Income Margin 9.7% 3.9% 8.0% 4.6%
EBITDA Margin 24.6% 20.9% 23.5% 21.6%
------------------------------------- --------- -------- -------- -------
Supplemental Mexico EBITDA and EBITDA Margin
--------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- -------------------
2017 2016 2017 2016
------------------------------------ --------- -------- -------- --------
International - Mexico
------------------------------------ --------- -------- -------- --------
Operating Income (Loss) $ (169) $ (317) $ (788) $ (941)
Add: Depreciation and amortization 106 83 369 331
------------------------------------ --------- -------- -------- --------
EBITDA (63) (234) (419) (610)
------------------------------------ --------- -------- -------- --------
Total Operating Revenues 824 648 2,813 2,373
Operating Income Margin -20.5% -48.9% -28.0% -39.7%
EBITDA Margin -7.6% -36.1% -14.9% -25.7%
------------------------------------ --------- -------- -------- --------
4
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% for transactions prior to tax reform and 25% for
transactions after tax reform. 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.
Adjusting Items
------------------------------------------------------------------------------------------------------------------
Dollars in millions Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- -------------------
2017 2016 2017 2016
----------------------------------------------------------- ----------- ----- ---------- ------
Operating Revenues
Natural disaster revenue credits $ 154 $ 10 $ 243 $ 23
----------------------------------------------------------- ----------- ----- ---------- ------
Adjustments to Operating Revenues 154 10 243 23
----------------------------------------------------------- ----------- ----- ---------- ------
Operating Expenses
DIRECTV and other video merger integration costs 95 259 412 754
Mexico merger integration costs 19 78 172 309
Time Warner and other merger costs 63 47 214 47
Wireless merger integration costs - 1 - 93
Actuarial (gain) loss 1,517 1,024 1,258 1,024
Asset abandonments and impairments 2,914 361 2,914 361
Employee separation costs 177 30 445 344
Tax reform special bonus 220 - 220 -
Natural disaster costs 265 27 384 44
(Gain) loss on transfer of wireless spectrum - - (181) (714)
Venezuela devaluation - - 98 -
----------------------------------------------------------- ----------- ----- ---------- ------
Adjustments to Operations and Support Expenses 5,270 1,827 5,936 2,262
----------------------------------------------------------- ----------- ----- ---------- ------
Amortization of intangible assets 1,100 1,228 4,608 5,177
Impairments 33 29 33 29
----------------------------------------------------------- ----------- ----- ---------- ------
Adjustments to Operating Expenses 6,403 3,084 10,577 7,468
----------------------------------------------------------- ----------- ----- ---------- ------
Other
Merger-related interest and fees(1) 432 - 1,104 16
Debt exchange costs, (gain) loss on sale of assets,
impairments and other adjustments 161 28 382 32
----------------------------------------------------------- ----------- ----- ---------- ------
Adjustments to Income Before Income Taxes 7,150 3,122 12,306 7,539
----------------------------------------------------------- ----------- ----- ---------- ------
Tax impact of adjustments 1,908 1,097 3,625 2,618
Tax reform 19,455 - 19,455 -
Tax-related items - 359 (146) 359
----------------------------------------------------------- ----------- ----- ---------- ------
Adjustments to Net Income $ (14,213) $ 1,666 $ (10,628) $ 4,562
----------------------------------------------------------- ----------- ----- ---------- ------
(1) Includes interest expense incurred on debt issued and interest income earned on cash held
prior to the close of merger transactions, and fees to exchange DIRECTV notes.
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 Twelve Months Ended
December 31, December 31,
---------------------- -------------------
2017 2016 2017 2016
----------------------------------------------------------- -------- -------- -------- --------
Operating Income $ 359 $ 4,248 $ 20,949 $ 24,347
Adjustments to Operating Revenues 154 10 243 23
Adjustments to Operating Expenses 6,403 3,084 10,577 7,468
----------------------------------------------------------- -------- -------- -------- --------
Adjusted Operating Income(1) 6,916 7,342 31,769 31,838
----------------------------------------------------------- -------- -------- -------- --------
EBITDA 6,430 10,377 45,336 50,194
Adjustments to Operating Revenues 154 10 243 23
Adjustments to Operations and Support Expenses 5,270 1,827 5,936 2,262
----------------------------------------------------------- -------- -------- -------- --------
Adjusted EBITDA(1) 11,854 12,214 51,515 52,479
----------------------------------------------------------- -------- -------- -------- --------
Total Operating Revenues 41,676 41,841 160,546 163,786
Adjustments to Operating Revenues 154 10 243 23
----------------------------------------------------------- -------- -------- -------- --------
Total Adjusted Operating Revenues 41,830 41,851 160,789 163,809
----------------------------------------------------------- -------- -------- -------- --------
Service Revenues 36,225 37,369 145,597 148,884
Adjustments to Service Revenues 154 10 243 23
----------------------------------------------------------- -------- -------- -------- --------
Adjusted Service Revenues 36,379 37,379 145,840 148,907
----------------------------------------------------------- -------- -------- -------- --------
Operating Income Margin 0.9% 10.2% 13.0% 14.9%
Adjusted Operating Income Margin(1) 16.5% 17.5% 19.8% 19.4%
Adjusted EBITDA Margin(1) 28.3% 29.2% 32.0% 32.0%
Adjusted EBITDA Service Margin(1) 32.6% 32.7% 35.3% 35.2%
----------------------------------------------------------- -------- -------- -------- --------
(1) Adjusted Operating Income, Adjusted EBITDA and associated margins exclude all actuarial
gains or losses ($1.3 billion loss for the year end 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. As a result, Adjusted Operating Income
and Margin reflect an expected return on plan assets of $3.5 billion (based on an average
expected return on plan assets of 7.75% for our pension trust and 5.75% for our VEBA trusts),
rather than the actual return on plan assets of $6.6 billion (actual pension return of 14.6%
and VEBA return of 10.7%), included in the GAAP measure of income.
Adjusted Diluted EPS
------------------------------------------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- -------------------
2017 2016 2017 2016
----------------------------------------------------------- --------- ------- -------- --------
Diluted Earnings Per Share (EPS) $ 3.08 $ 0.39 $ 4.76 $ 2.10
Amortization of intangible assets 0.12 0.13 0.50 0.55
Merger integration items(1) 0.07 0.04 0.21 0.13
Asset abandonments, impairments and natural disasters 0.41 0.05 0.45 0.05
Actuarial (gain) loss 0.19 0.10 0.16 0.10
(Gain) loss on transfer of wireless spectrum - - (0.02) (0.07)
Other(2) 0.07 0.01 0.13 0.04
Tax reform (3.16) - (3.16) -
Tax-related items - (0.06) 0.02 (0.06)
----------------------------------------------------------- --------- ------- -------- --------
Adjusted EPS $ 0.78 $ 0.66 $ 3.05 $ 2.84
----------------------------------------------------------- --------- ------- -------- --------
Year-over-year growth - Adjusted 18.2% 7.4%
----------------------------------------------------------- --------- ------- -------- --------
Weighted Average Common Shares Outstanding
with Dilution (000,000) 6,182 6,181 6,183 6,189
----------------------------------------------------------- --------- ------- -------- --------
(1) Includes combined merger integration items and merger-related interest income and expense.
(2) Includes employee-related charges, Venezeula devaluation and debt exchange costs.
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, Dec. 31, YTD
2017 2017 2017 2017 2017
--------------------------------------------- -------- -------- -------- -------- -------
Adjusted EBITDA $ 13,080 $ 13,587 $ 12,994 $ 11,854 $ 51,515
Add back severance - (60) (208) (177) (445)
Net Debt Adjusted EBITDA 13,080 13,527 12,786 11,677 51,070
Annualized Adjusted EBITDA 51,070
End-of-period current debt 38,374
End-of-period long-term debt 125,972
Total End-of-Period Debt 164,346
Less: Cash and Cash Equivalents 50,498
Net Debt Balance 113,848
--------------------------------------------- -------- -------- -------- -------- -------
Annualized Net Debt to Adjusted EBITDA Ratio 2.23
--------------------------------------------- -------- -------- -------- -------- -------
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
December 31, 2017 December 31, 2016
------------------------------------------------ ----------------------------------------------------
Consumer Business AT&T Consumer Business AT&T
Mobility Solutions Adjustments(1) Mobility Mobility Solutions Adjustments(1) Mobility
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Operating
Revenues
Wireless
service $ 6,409 $ 7,933 $ - $ 14,342 $ 6,731 $ 7,982 $ - $ 14,713
Fixed
strategic
services - 3,138 (3,138) - - 2,962 (2,962) -
Legacy voice
and data
services - 3,359 (3,359) - - 3,793 (3,793) -
Other
services and
equipment - 938 (938) - - 947 (947) -
Wireless
equipment 1,864 3,022 - 4,886 1,688 2,349 - 4,037
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Total
Operating
Revenues 8,273 18,390 (7,435) 19,228 8,419 18,033 (7,702) 18,750
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Operating
Expenses
Operations
and support 5,367 12,207 (4,627) 12,947 5,316 11,746 (4,998) 12,064
EBITDA 2,906 6,183 (2,808) 6,281 3,103 6,287 (2,704) 6,686
Depreciation
and
amortization 886 2,354 (1,212) 2,028 918 2,264 (1,134) 2,048
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Total
Operating
Expense 6,253 14,561 (5,839) 14,975 6,234 14,010 (6,132) 14,112
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Operating
Income $ 2,020 $ 3,829 $ (1,596) $ 4,253 $ 2,185 $ 4,023 $ (1,570) $ 4,638
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
(1) Business wireline operations reported in Business Solutions segment.
Supplemental Operational Measure
------------------------------------------------------------------------------------------------------------------------
Twelve Months Ended
December 31, 2017 December 31, 2016
------------------------------------------------ ----------------------------------------------------
Consumer Business AT&T Consumer Business AT&T
Mobility Solutions Adjustments(1) Mobility Mobility Solutions Adjustments(1) Mobility
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Operating
Revenues
Wireless
service $ 26,053 $ 31,902 $ - $ 57,955 $ 27,536 $ 31,850 $ - $ 59,386
Fixed
strategic
services - 12,227 (12,227) - - 11,431 (11,431) -
Legacy voice
and data
services - 13,931 (13,931) - - 16,370 (16,370) -
Other
services and
equipment - 3,451 (3,451) - - 3,566 (3,566) -
Wireless
equipment 5,499 7,895 - 13,394 5,664 7,771 - 13,435
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Total
Operating
Revenues 31,552 69,406 (29,609) 71,349 33,200 70,988 (31,367) 72,821
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Operating
Expenses
Operations
and support 18,966 42,929 (18,640) 43,255 19,659 44,330 (20,103) 43,886
EBITDA 12,586 26,477 (10,969) 28,094 13,541 26,658 (11,264) 28,935
Depreciation
and
amortization 3,507 9,326 (4,806) 8,027 3,716 9,832 (5,256) 8,292
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Total
Operating
Expense 22,473 52,255 (23,446) 51,282 23,375 54,162 (25,359) 52,178
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
Operating
Income $ 9,079 $ 17,151 $ (6,163) $ 20,067 $ 9,825 $ 16,826 $ (6,008) $ 20,643
-------------- -------- --------- -------------- -------- -------- --------- -------------- ------------
(1) Business wireline 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
December 31, 2017 December 31, 2016
-------------------------------------- ---------------------------------------
Latin America Mexico International Latin America Mexico International
-------------------- ------------- ------ ------------- ------------- ------ -------------
Operating Revenues
Video service $ 1,391 $ - $ 1,391 $ 1,261 $ - $ 1,261
Wireless service - 501 501 - 477 477
Wireless equipment - 323 323 - 171 171
-------------------- ------------- ------ ------------- ------------- ------ -------------
Total Operating
Revenues 1,391 824 2,215 1,261 648 1,909
-------------------- ------------- ------ ------------- ------------- ------ -------------
Operating Expenses
Operations and
support 1,049 887 1,936 997 882 1,879
Depreciation and
amortization 207 106 313 215 83 298
-------------------- ------------- ------ ------------- ------------- ------ -------------
Total Operating
Expenses 1,256 993 2,249 1,212 965 2,177
-------------------- ------------- ------ ------------- ------------- ------ -------------
Operating Income
(Loss) 135 (169) (34) 49 (317) (268)
-------------------- ------------- ------ ------------- ------------- ------ -------------
Equity in Net Income
of Affiliates 25 - 25 28 - 28
-------------------- ------------- ------ ------------- ------------- ------ -------------
Segment Contribution $ 160 $ (169) $ (9) $ 77 $ (317) $ (240)
-------------------- ------------- ------ ------------- ------------- ------ -------------
Supplemental International
------------------------------------------------------------------------------------------------------
Twelve Months Ended
December 31, 2017 December 31, 2016
-------------------------------------- ---------------------------------------
Latin America Mexico International Latin America Mexico International
-------------------- ------------- ------ ------------- ------------- ------ -------------
Operating Revenues
Video service $ 5,456 $ - $ 5,456 $ 4,910 $ - $ 4,910
Wireless service - 2,047 2,047 - 1,905 1,905
Wireless equipment - 766 766 - 468 468
-------------------- ------------- ------ ------------- ------------- ------ -------------
Total Operating
Revenues 5,456 2,813 8,269 4,910 2,373 7,283
-------------------- ------------- ------ ------------- ------------- ------ -------------
Operating Expenses
Operations and
support 4,172 3,232 7,404 3,847 2,983 6,830
Depreciation and
amortization 849 369 1,218 835 331 1,166
-------------------- ------------- ------ ------------- ------------- ------ -------------
Total Operating
Expenses 5,021 3,601 8,622 4,682 3,314 7,996
-------------------- ------------- ------ ------------- ------------- ------ -------------
Operating Income
(Loss) 435 (788) (353) 228 (941) (713)
-------------------- ------------- ------ ------------- ------------- ------ -------------
Equity in Net Income
of Affiliates 87 - 87 52 - 52
-------------------- ------------- ------ ------------- ------------- ------ -------------
Segment Contribution $ 522 $ (788) $ (266) $ 280 $ (941) $ (661)
-------------------- ------------- ------ ------------- ------------- ------ -------------
9
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FKFDKBBKBPNK
(END) Dow Jones Newswires
March 09, 2018 02:00 ET (07:00 GMT)
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