EX-99.1 2 ex99_1.htm AT&T INC. 4TH QUARTER 2017 SELECTED FINANCIAL STATEMENTS AND OPERATING DATA
 

 

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

%