EX-99.2 3 ex99_2.htm AT&T INC. 4TH QUARTER 2018 SELECTED FINANCIAL STATEMENTS AND OPERATING DATA

 EXHIBIT 99.2


AT&T Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income

Dollars in millions except per share amounts

 

 

 

 

 

 

 

Unaudited

Fourth Quarter

Percent

 

Year Ended

Percent

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Service

 

$

42,496

$

36,225

 

17.3

%

 

$

152,345

$

145,597

 

4.6

%

  Equipment

 

 

5,497

 

5,451

 

0.8

%

 

 

18,411

 

14,949

 

23.2

%

    Total Operating Revenues

 

47,993

 

41,676

 

15.2

%

 

 

170,756

 

160,546

 

6.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Equipment

 

5,733

 

6,532

 

(12.2)

%

 

 

19,786

 

18,709

 

5.8

%

    Broadcast, programming and operations

 

8,885

 

6,003

 

48.0

%

 

 

26,727

 

21,159

 

26.3

%

    Other cost of revenues (exclusive of depreciation

          and amortization shown separately below)

 

8,691

 

9,391

 

(7.5)

%

 

 

32,906

 

37,942

 

(13.3)

%

   Selling, general and administrative

 

10,586

 

9,484

 

11.6

%

 

 

36,765

 

35,465

 

3.7

%

   Asset abandonment and impairments

 

46

 

2,914

 

(98.4)

%

 

 

46

 

2,914

 

(98.4)

%

   Depreciation and amortization

 

7,892

 

6,071

 

30.0

%

 

 

28,430

 

24,387

 

16.6

%

    Total Operating Expenses

 

41,833

 

40,395

 

3.6

%

 

 

144,660

 

140,576

 

2.9

%

Operating Income

 

6,160

 

1,281

 

-

%

 

 

26,096

 

19,970

 

30.7

%

Interest Expense

 

(2,112)

 

(1,926)

 

9.7

%

 

 

(7,957)

 

(6,300)

 

26.3

%

Equity in Net Income (Loss) of Affiliates

 

23

 

20

 

15.0

%

 

 

(48)

 

(128)

 

62.5

%

Other Income (Expense) - Net

 

1,674

 

(658)

 

-

%

 

 

6,782

 

1,597

 

-

%

Income (Loss) Before Income Taxes

 

5,745

 

(1,283)

 

-

%

 

 

24,873

 

15,139

 

64.3

%

Income Tax (Benefit) Expense

 

615

 

(20,419)

 

-

%

 

 

4,920

 

(14,708)

 

-

%

Net Income

 

5,130

 

19,136

 

(73.2)

%

 

 

19,953

 

29,847

 

(33.1)

%

 Less: Net Income Attributable to

    Noncontrolling Interest

 

(272)

 

(99)

 

-

%

 

 

(583)

 

(397)

 

(46.9)

%

Net Income Attributable to AT&T

$

4,858

$

19,037

 

(74.5)

%

 

$

19,370

$

29,450

 

(34.2)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share Attributable to AT&T

$

0.66

$

3.08

 

(78.6)

%

 

$

2.85

$

4.77

 

(40.3)

%

   Weighted Average Common

       Shares Outstanding (000,000)

 

7,296

 

6,163

 

18.4

%

 

 

6,778

 

6,164

 

10.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share Attributable to AT&T

$

0.66

$

3.08

 

(78.6)

%

 

$

2.85

$

4.76

 

(40.1)

%

   Weighted Average Common 

       Shares Outstanding with Dilution (000,000)

 

7,328

 

6,182

 

18.5

%

 

 

6,806

 

6,183

 

10.1

%

 


 

AT&T Inc.

 

 

 

 

 

Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets

Dollars in millions

 

Unaudited

 

Dec. 31,

 

 

Dec. 31,

 

 

 

2018

 

 

2017

Assets

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

$

5,204

 

$

50,498

Accounts receivable - net of allowances for doubtful accounts of $907 and $663

 

26,472

 

 

16,522

Prepaid expenses

 

2,047

 

 

1,369

Other current assets

 

17,704

 

 

10,757

Total current assets

 

51,427

 

 

79,146

Noncurrent Inventories and Theatrical Film and Television Production Costs

 

7,713

 

 

-

Property, Plant and Equipment – Net

 

131,473

 

 

125,222

Goodwill

 

146,370

 

 

105,449

Licenses

 

96,144

 

 

96,136

Trademarks and Trade Names - Net

 

24,345

 

 

7,021

Distribution Networks - Net

 

17,069

 

 

-

Other Intangible Assets – Net

 

26,269

 

 

11,119

Investments in and Advances to Equity Affiliates

 

6,245

 

 

1,560

Other Assets

 

24,809

 

 

18,444

Total Assets

$

531,864

 

$

444,097

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Debt maturing within one year

$

10,255

 

$

38,374

Accounts payable and accrued liabilities

 

43,184

 

 

34,470

Advanced billings and customer deposits

 

5,948

 

 

4,213

Accrued taxes

 

1,179

 

 

1,262

Dividends payable

 

3,854

 

 

3,070

Total current liabilities

 

64,420

 

 

81,389

Long-Term Debt

 

166,250

 

 

125,972

Deferred Credits and Other Noncurrent Liabilities

 

 

 

 

 

Deferred income taxes

 

57,859

 

 

43,207

Postemployment benefit obligation

 

19,218

 

 

31,775

Other noncurrent liabilities

 

30,233

 

 

19,747

Total deferred credits and other noncurrent liabilities

 

107,310

 

 

94,729

Stockholders’ Equity

 

 

 

 

 

Common stock

 

7,621

 

 

6,495

Additional paid-in capital

 

125,525

 

 

89,563

Retained earnings

 

58,753

 

 

50,500

Treasury stock

 

(12,059)

 

 

(12,714)

Accumulated other comprehensive income

 

4,249

 

 

7,017

Noncontrolling interest

 

9,795

 

 

1,146

Total stockholders’ equity

 

193,884

 

 

142,007

Total Liabilities and Stockholders' Equity

$

531,864

 

$

444,097

 

 

 

 

 

 

 


 

AT&T Inc.

 

 

 

 

 

Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows

Dollars in millions

 

Unaudited

Year Ended

 

 

 

2018

 

 

2017

Operating Activities

 

 

 

 

 

Net income

$

19,953

 

$

29,847

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

 

 

 

 

 

 

Depreciation and amortization

 

28,430

 

 

24,387

 

Amortization of film and television costs

 

3,772

 

 

-

 

Undistributed earnings from investments in equity affiliates

 

292

 

 

174

 

Provision for uncollectible accounts

 

1,791

 

 

1,642

 

Deferred income tax expense (benefit)

 

610

 

 

(15,940)

 

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

 

(739)

 

 

(282)

 

Actuarial (gain) loss on pension and postretirement benefits

 

(3,412)

 

 

1,258

 

Asset abandonments and impairments

 

46

 

 

2,914

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

(1,244)

 

 

(986)

 

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

 

(6,442)

 

 

(778)

 

Accounts payable and other accrued liabilities

 

1,602

 

 

816

 

Equipment installment receivables and related sales

 

(490)

 

 

(1,239)

 

Deferred customer contract acquisition and fulfillment costs

 

(3,458)

 

 

(1,422)

Retirement benefit funding

 

(500)

 

 

(1,066)

Other - net

 

3,391

 

 

(1,315)

Total adjustments

 

23,649

 

 

8,163

Net Cash Provided by Operating Activities

 

43,602

 

 

38,010

 

 

 

 

 

Investing Activities

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

Purchase of property and equipment

 

(20,758)

 

 

(20,647)

 

Interest during construction

 

(493)

 

 

(903)

Acquisitions, net of cash acquired

 

(43,309)

 

 

1,123

Dispositions

 

2,148

 

 

59

(Purchases) sales of securities, net

 

(185)

 

 

449

Advances to and investments in equity affiliates, net

 

(1,050)

 

 

-

Cash collections of deferred purchase price

 

500

 

 

976

Other

 

2

 

 

-

Net Cash Used in Investing Activities

 

(63,145)

 

 

(18,943)

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

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

 

(821)

 

 

(2)

Issuance of other short-term borrowings

 

4,898

 

 

-

Repayment of other short-term borrowings

 

(2,098)

 

 

-

Issuance of long-term debt

 

41,875

 

 

48,793

Repayment of long-term debt

 

(52,643)

 

 

(12,339)

Purchase of treasury stock

 

(609)

 

 

(463)

Issuance of treasury stock

 

745

 

 

33

Dividends paid

 

(13,410)

 

 

(12,038)

Other

 

(3,926)

 

 

1,946

Net Cash (Used in) Provided by Financing Activities

 

(25,989)

 

 

25,930

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

 

(45,532)

 

 

44,997

Cash and cash equivalents and restricted cash beginning of year

 

50,932

 

 

5,935

Cash and Cash Equivalents and Restricted Cash End of Year

$

5,400

 

$

50,932

 

 

 

 

 

 

 


 

AT&T Inc.

Consolidated Supplementary Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary Financial Data

Dollars in millions except per share amounts

 

 

 

 

 

 

 

Unaudited

Fourth Quarter

Percent

 

Year Ended

Percent

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

$

4,063

$

4,891

 

(16.9)

%

 

$

20,758

$

20,647

 

0.5

%

 

Interest during construction

 

89

 

185

 

(51.9)

%

 

 

493

 

903

 

(45.4)

%

Total Capital Expenditures

$

4,152

$

5,076

 

(18.2)

%

 

$

21,251

$

21,550

 

(1.4)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends Declared per Share

$

0.51

$

0.50

 

2.0

%

 

$

2.01

$

1.97

 

2.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

End of Period Common Shares Outstanding (000,000)

 

 

 

 

 

 

 

 

 

7,282

 

6,139

 

18.6

%

Debt Ratio

 

 

 

 

 

 

 

 

 

47.7

%

53.6

%

(590)

BP

Total Employees

 

 

 

 

 

 

 

 

 

268,220

 

254,000

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary Operating Data

Subscribers and connections in thousands

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

Year Ended

Percent

 

 

 

 

 

 

 

 

 

 

 

2018

 

2017

 

Change

Wireless Subscribers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

 

 

 

 

 

 

 

 

153,006

 

141,202

 

8.4

%

 

Mexico

 

 

 

 

 

 

 

 

 

18,321

 

15,099

 

21.3

%

Total Wireless Subscribers

 

 

 

 

 

 

 

 

 

171,327

 

156,301

 

9.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Branded Wireless Subscribers

 

 

 

 

 

 

 

 

 

111,958

 

107,740

 

3.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video Connections

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

 

 

 

 

 

 

 

 

24,517

 

25,270

 

(3.0)

%

 

Latin America

 

 

 

 

 

 

 

 

 

13,838

 

13,629

 

1.5

%

Total Video Connections

 

 

 

 

 

 

 

 

 

38,355

 

38,899

 

(1.4)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broadband Connections

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IP

 

 

 

 

 

 

 

 

 

14,751

 

14,487

 

1.8

%

 

DSL

 

 

 

 

 

 

 

 

 

950

 

1,232

 

(22.9)

%

Total Broadband Connections

 

 

 

 

 

 

 

 

 

15,701

 

15,719

 

(0.1)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Voice Connections

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Network Access Lines

 

 

 

 

 

 

 

 

 

10,002

 

11,753

 

(14.9)

%

 

U-verse  VoIP Connections

 

 

 

 

 

 

 

 

 

5,114

 

5,682

 

(10.0)

%

Total Retail Voice Connections

 

 

 

 

 

 

 

 

 

15,116

 

17,435

 

(13.3)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarter

Percent

 

Year Ended

Percent

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Wireless Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

2,753

 

2,757

 

(0.1)

%

 

 

11,810

 

9,474

 

24.7

%

 

Mexico

 

1,016

 

1,320

 

(23.0)

%

 

 

3,222

 

3,126

 

3.1

%

Total Wireless Net Additions

 

3,769

 

4,077

 

(7.6)

%

 

 

15,032

 

12,600

 

19.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Branded Wireless Net Additions

 

1,016

 

2,046

 

(50.3)

%

 

 

4,367

 

4,858

 

(10.1)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Video Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

(660)

 

159

 

-

%

 

 

(753)

 

(291)

 

-

%

 

Latin America

 

198

 

139

 

42.4

%

 

 

250

 

42

 

-

%

Total Video Net Additions

 

(462)

 

298

 

-

%

 

 

(503)

 

(249)

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broadband Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IP

 

7

 

103

 

(93.2)

%

 

 

264

 

623

 

(57.6)

%

 

DSL

 

(53)

 

(99)

 

46.5

%

 

 

(282)

 

(509)

 

44.6

%

Total Broadband Net Additions

 

(46)

 

4

 

-

%

 

 

(18)

 

114

 

-

%


 

COMMUNICATIONS SEGMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Communications segment provides wireless and wireline telecom, video and broadband services to consumers located in the U.S. or in U.S. territories and businesses globally. The Communications segment contains three reporting units: Mobility, Entertainment Group, and Business Wireline.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Results

Dollars in millions

 

 

 

 

 

 

 

Unaudited

Fourth Quarter

Percent

 

Year Ended

Percent

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

Segment Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility

$

18,769

$

19,168

 

(2.1)

%

 

$

71,344

$

71,090

 

0.4

%

 

Entertainment Group

 

11,962

 

12,560

 

(4.8)

%

 

 

46,460

 

49,995

 

(7.1)

%

 

Business Wireline

 

6,727

 

7,382

 

(8.9)

%

 

 

26,827

 

29,293

 

(8.4)

%

    Total Segment Operating Revenues

 

37,458

 

39,110

 

(4.2)

%

 

 

144,631

 

150,378

 

(3.8)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Contribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility

 

5,455

 

4,275

 

27.6

%

 

 

21,722

 

20,204

 

7.5

%

 

Entertainment Group

 

825

 

1,001

 

(17.6)

%

 

 

4,713

 

5,471

 

(13.9)

%

 

Business Wireline

 

1,359

 

1,588

 

(14.4)

%

 

 

5,827

 

6,010

 

(3.0)

%

    Total Segment Operating Contribution

$

7,639

$

6,864

 

11.3

%

 

$

32,262

$

31,685

 

1.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Mobility

 

Mobility provides nationwide wireless service and equipment.

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobility Results

 

Dollars in millions

 

 

 

 

 

 

 

 

Unaudited

Fourth Quarter

Percent

 

Year Ended

Percent

 

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

 

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service

$

13,859

$

14,282

 

(3.0)

%

 

$

54,933

$

57,696

 

(4.8)

%

 

 

Equipment

 

4,910

 

4,886

 

0.5

%

 

 

16,411

 

13,394

 

22.5

%

 

    Total Operating Revenues

 

18,769

 

19,168

 

(2.1)

%

 

 

71,344

 

71,090

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support

 

11,246

 

12,866

 

(12.6)

%

 

 

41,266

 

42,871

 

(3.7)

%

 

Depreciation and amortization

 

2,068

 

2,027

 

2.0

%

 

 

8,355

 

8,015

 

4.2

%

 

    Total Operating Expenses

 

13,314

 

14,893

 

(10.6)

%

 

 

49,621

 

50,886

 

(2.5)

%

 

Operating Income

 

5,455

 

4,275

 

27.6

%

 

 

21,723

 

20,204

 

7.5

%

 

Equity in Net Income (Loss) of Affiliates

 

-

 

-

 

-

%

 

 

(1)

 

-

 

-

%

 

Operating  Contribution

$

5,455

$

4,275

 

27.6

%

 

$

21,722

$

20,204

 

7.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

29.1

%

22.3

%

680

BP

 

 

30.4

%

28.4

%

200

BP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary Operating Data

 

Subscribers and connections in thousands

 

 

 

 

 

 

 

 

Unaudited

 

 

 

Year Ended

Percent

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

2017

 

Change

 

Mobility Subscribers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Postpaid

 

 

 

 

 

 

 

 

 

76,889

 

77,510

 

(0.8)

%

 

 

Prepaid

 

 

 

 

 

 

 

 

 

17,000

 

15,335

 

10.9

%

 

Branded

 

 

 

 

 

 

 

 

 

93,889

 

92,845

 

1.1

%

 

Reseller

 

 

 

 

 

 

 

 

 

7,782

 

9,366

 

(16.9)

%

 

Connected Devices

 

 

 

 

 

 

 

 

 

51,335

 

38,991

 

31.7

%

 

Total Mobility Subscribers

 

 

 

 

 

 

 

 

 

153,006

 

141,202

 

8.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarter

Percent

 

Year Ended

Percent

 

 

 

 

2018

 

2017

 

Change

 

 

2018

 

2017

 

Change

 

 Mobility Net Additions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Postpaid

 

13

 

558

 

(97.7)

%

 

 

(97)

 

641

 

-

%

 

 

Prepaid

 

26

 

140

 

(81.4)

%

 

 

1,290

 

1,013

 

27.3

%

 

Branded

 

39

 

698

 

(94.4)

%

 

 

1,193

 

1,654

 

(27.9)

%

 

Reseller

 

(438)

 

(530)

 

17.4

%

 

 

(1,704)

 

(1,871)

 

8.9

%

 

Connected Devices

 

3,152

 

2,589

 

21.7

%

 

 

12,321

 

9,691

 

27.1

%

 

Total Mobility Net Additions

 

2,753

 

2,757

 

(0.1)

%

 

 

11,810

 

9,474

 

24.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Branded Churn

 

1.82

%

1.75

%

7

BP

 

 

1.67

%

1.68

%

(1)

BP

 

Postpaid Churn

 

1.24

%

1.11

%

13

BP

 

 

1.12

%

1.07

%

5

BP

 

Postpaid Phone-Only Churn

 

1.00

%

0.89

%

11

BP

 

 

0.90

%

0.85