Company Announcements

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

 

Date of report (Date of earliest event reported) April 24, 2019

 

AT&T INC.

(Exact Name of Registrant as Specified in Charter)

 

 

Delaware	1-8610	43-1301883
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

208 S. Akard St., Dallas, Texas	75202
(Address of Principal Executive Offices)	(Zip Code)

 

Registrant's telephone number, including area code (210) 821-4105

 

 

__________________________________

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

Item 2.02 Results of Operations and Financial Condition.

 

The registrant announced on April 24, 2019, its results of operations for the first quarter of 2019. The text of the press release and accompanying financial information are attached as exhibits and incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

The following exhibits are furnished as part of this report:

(d)          Exhibits

 

	99.1	Press release dated April 24, 2019 reporting financial results for the first quarter ended March 31, 2019 .
	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: April 24, 2019	By: / s/ Debra L. Dial                                           Debra L. Dial Senior Vice President and Controller

 

 

 

 

AT&T Reports First-Quarter Results

 

First-Quarter Consolidated Results

●	Diluted EPS of $0.56 as reported compared to $0.75 in the year-ago quarter
●	Adjusted EPS of $0.86 compared to $0.85 in the year-ago quarter
●	Consolidated revenues of $44.8 billion
●	Cash from operations of $11.1 billion, up 24%
●	Capital expenditures of $5.2 billion
●	Free cash flow of $5.9 billion

 

 

Note: AT&T's first-quarter earnings conference call will be webcast at 8:30 a.m. ET on Wednesday, April 24, 2019. The webcast and related materials will be available on AT&T's Investor Relations website at https://investors.att.com .

 

DALLAS, April 24, 2019   - AT&T Inc . ( NYSE:T ) reported solid Mobility and WarnerMedia results in the first quarter, including wireless service revenue growth and postpaid phone net adds, and grew operating income and EBITDA in the Entertainment Group.

 

"Our first-quarter results show that we're delivering on what we promised," said Randall Stephenson, AT&T chairman and CEO. "We're on plan to meet our de-leveraging goals with strong free cash flow and asset sales. We grew Entertainment Group EBITDA in the quarter and are confident we'll meet or exceed our full-year target. FirstNet deployment continues ahead of schedule.  And we are recognized for having the nation's best wireless network 1 , as well as the fastest network 2 .

 

"All this speaks volumes about our focus on our strategic priorities and our ability to grow our Mobility, WarnerMedia and emerging Xandr businesses. Our teams are executing well and have turned in a good performance to start the year."

 

 

 

 

 

 

 

 

First-Quarter Results

Communications Highlights

●	Mobility:
o		Service revenues up 2.9%; operating income and EBITDA growth with postpaid phone and prepaid net adds
o		179,000 postpaid smartphone net adds in the U.S.
●			80,000 postpaid phone net adds
o		96,000 prepaid net adds of which 85,000 are phones

 

●	Entertainment Group:
o		13% operating income growth with solid ARPU gains
o		6.9% EBITDA growth as company targets stability
o		Focus on long-term value customer base
●			22.4 million premium TV subscribers - 544,000 net loss
●			1.5 million DIRECTV NOW subscribers - 83,000 net loss
o		Nearly 300,000 AT&T Fiber gains; 45,000 broadband net adds with broadband revenue growth of more than 8%
o		12.4 million customer locations passed with fiber

 

WarnerMedia Highlights

●	Solid revenue growth with strong operating income growth with gains in all business units
o		Turner subscription revenue growth
o		HBO digital subscriber growth continued as last season of Game of Thrones begins
o		Strong Warner Bros. revenue and operating income growth

 

Latin America Highlights

 

●	93,000 Mexico wireless net adds

 

Xandr Highlights

●	Advertising revenues grew by 26.4% largely due to the AppNexus acquisition

 

 

 

 

Consolidated Financial Results

 

AT&T's consolidated revenues for the first quarter totaled $44.8 billion versus $38.0 billion in the year-ago quarter, up 17.8%, primarily due to the Time Warner acquisition. Declines in legacy wireline services, Vrio, wireless equipment and domestic video were more than offset by the addition of WarnerMedia, domestic wireless services and Xandr. Operating expenses were $37.6 billion versus $31.8 billion in the year-ago quarter, an increase of about $5.8 billion due to the Time Warner acquisition and  higher commission amortization from adopting new accounting standards last year, partially offset by lower wireless equipment costs and cost efficiencies.

 

Operating income was $7.2 billion versus $6.2 billion in the year-ago quarter, primarily due to the Time Warner acquisition, with operating income margin of 16.1% versus 16.3%.  When adjusting for amortization, merger- and integration-related expenses and other items, operating income was $9.6 billion versus $7.5 billion in the year-ago quarter, and operating income margin was 21.4% versus 19.7% in the year-ago quarter due to the acquisition of Time Warner.

 

First-quarter net income attributable to AT&T was $4.1 billion, or $0.56 per diluted share, versus $4.7 billion, or $0.75 per diluted share, in the year-ago quarter. Adjusting for $0.30, which includes merger-amortization costs, merger- and integration-related expenses, a non-cash actuarial loss on benefit plans and other items, earnings per diluted share was $0.86 compared to an adjusted $0.85 in the year-ago quarter.

 

Cash from operating activities was $11.1 billion, and capital expenditures were $5.2 billion. Capital investment - which consists of capital expenditures plus cash payments for vendor financing - totaled $6.0 billion, which includes about $800 million of cash payments for vendor financing. Free cash flow - cash from operating activities minus capital expenditures - was $5.9 billion for the quarter.

 

 

 

 

1 Based on GWS OneScore Sept. 2018

2 Based on analysis by Ookla ®  of Speedtest Intelligence ®  data average download speeds for Q1 2019

 

 

 

 

 

*About AT&T

AT&T Inc. ( NYSE:T ) is a diversified, global leader in telecommunications, media and entertainment, and technology. It executes in the market under four operating units. WarnerMedia's HBO, Turner and Warner Bros. divisions are world leaders in creating premium content, operate one of the world's largest TV and film studios, and own a world-class library of entertainment. AT&T Communications provides more than 100 million U.S. consumers with entertainment and communications experiences across TV, mobile and broadband services. Plus, it serves nearly 3 million business customers with high-speed, highly secure connectivity and smart solutions. AT&T Latin America provides pay-TV services across 11 countries and territories in Latin America and the Caribbean, and is the fastest growing wireless provider in Mexico, serving consumers and businesses. Xandr provides marketers with innovative and relevant advertising solutions for consumers around premium video content and digital advertising through its AppNexus platform.

 

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 is available at about.att.com. © 2019 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 re lease 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 Inc.

Phone: 214-862-0651

Email: erin.mcGrath@att.com

 

 

 

AT&T Inc.
Financial Data
Dollars in millions except per share amounts
Unaudited		First Quarter					Percent
			2019		2018		Change
Operating Revenues
Service		$	40,684	$	33,646		20.9	%
Equipment			4,143		4,392		(5.7)	%
Total Operating Revenues			44,827		38,038		17.8	%
Operating Expenses
Cost of revenues
Equipment			4,502		4,848		(7.1)	%
Broadcast, programming and operations			7,652		5,166		48.1	%
Other cost of revenues (exclusive of depreciation           and amortization shown separately below)			8,585		7,932		8.2	%
Selling, general and administrative			9,649		7,897		22.2	%
Depreciation and amortization			7,206		5,994		20.2	%
Total Operating Expenses			37,594		31,837		18.1	%
Operating Income			7,233		6,201		16.6	%
Interest Expense			2,141		1,771		20.9	%
Equity in Net Income (Loss) of Affiliates			(7)		9		-	%
Other Income (Expense) - Net			286		1,702		(83.2)	%
Income Before Income Taxes			5,371		6,141		(12.5)	%
Income Tax Expense			1,023		1,382		(26.0)	%
Net Income			4,348		4,759		(8.6)	%
Less: Net Income Attributable to     Noncontrolling Interest			(252)		(97)		-	%
Net Income Attributable to AT&T		$	4,096	$	4,662		(12.1)	%
Basic Earnings Per Share Attributable to AT&T		$	0.56	$	0.75		(25.3)	%
Weighted Average Common        Shares Outstanding (000,000)			7,313		6,161		18.7	%
Diluted Earnings Per Share Attributable to AT&T		$	0.56	$	0.75		(25.3)	%
Weighted Average Common         Shares Outstanding with Dilution (000,000)			7,342		6,180		18.8	%

 

 

 

 

 

AT&T Inc.
Financial Data
Dollars in millions
Unaudited			Mar. 31,			Dec. 31,
			2019			2018
Assets
Current Assets
Cash and cash equivalents		$	6,516		$	5,204
Accounts receivable - net of allowances for doubtful accounts of $905 and $907			23,863			26,472
Prepaid expenses			1,518			2,047
Other current assets			14,575			17,704
Total current assets			46,472			51,427
Noncurrent Inventories and Theatrical Film and Television Production Costs			10,270			7,713
Property, Plant and Equipment - Net			132,051			131,473
Goodwill			146,434			146,370
Licenses - Net			97,001			96,144
Trademarks and Trade Names - Net			24,218			24,345
Distribution Networks - Net			16,623			17,069
Other Intangible Assets - Net			24,732			26,269
Investments in and Advances to Equity Affiliates			6,230			6,245
Operating Lease Right-of-Use Assets			20,235			-
Other Assets			24,118			24,809
Total Assets		$	548,384		$	531,864
Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year		$	11,538		$	10,255
Accounts payable and accrued liabilities			42,306			43,184
Advanced billings and customer deposits			5,956			5,948
Accrued taxes			1,130			1,179
Dividends payable			3,722			3,854
Total current liabilities			64,652			64,420
Long-Term Debt			163,942			166,250
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes			59,207			57,859
Postemployment benefit obligation			19,664			19,218
Operating lease liabilities			18,253			-
Other noncurrent liabilities			27,715			30,233
Total deferred credits and other noncurrent liabilities			124,839			107,310
Stockholders' Equity
Common stock			7,621			7,621
Additional paid-in capital			125,174			125,525
Retained earnings			59,424			58,753
Treasury stock			(11,452)			(12,059)
Accumulated other comprehensive income			4,345			4,249
Noncontrolling interest			9,839			9,795
Total stockholders' equity			194,951			193,884
Total Liabilities and Stockholders' Equity		$	548,384		$	531,864

 

 

 

AT&T Inc.
Financial Data
Dollars in millions
Unaudited		First Quarter
			2019			2018
Operating Activities
Net income		$	4,348		$	4,759
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		7,206			5,994
	Amortization of film and television costs		2,497			-
	Undistributed earnings from investments in equity affiliates		112			(2)
	Provision for uncollectible accounts		592			438
	Deferred income tax expense (benefit)		1,069			1,222
	Net (gain) loss from investments, net of impairments		(175)			2
	Actuarial (gain) loss on pension and postretirement benefits		432			(930)
Changes in operating assets and liabilities:
	Accounts receivable		1,894			(439)
	Other current assets, inventories and theatrical film and television production costs		(2,510)			614
	Accounts payable and other accrued liabilities		(3,686)			(1,962)
	Equipment installment receivables and related sales		652			505
	Deferred customer contract acquisition and fulfillment costs		(375)			(826)
Retirement benefit funding			-			(140)
Other - net			(1,004)			(288)
Total adjustments			6,704			4,188
Net Cash Provided by Operating Activities			11,052			8,947
Investing Activities
Capital expenditures:
	Purchase of property and equipment		(5,121)			(5,957)
	Interest during construction		(61)			(161)
Acquisitions, net of cash acquired			(213)			(234)
Dispositions			10			56
(Purchases) sales of securities, net			(1)			(116)
Advances to and investments in equity affiliates, net			(15)			(1,007)
Cash collections of deferred purchase price			-			267
Net Cash Used in Investing Activities			(5,401)			(7,152)
Financing Activities
Net change in short-term borrowings with original maturities of three months or less			(256)			-
Issuance of other short-term borrowings			296			-
Repayment of other short-term borrowings			(176)			-
Issuance of long-term debt			9,182			2,565
Repayment of long-term debt			(9,840)			(4,911)
Purchase of treasury stock			(189)			(145)
Issuance of treasury stock			167			11
Dividends paid			(3,714)			(3,070)
Other			109			2,048
Net Cash Used in Financing Activities			(4,421)			(3,502)
Net increase (decrease) in cash and cash equivalents and restricted cash			1,230			(1,707)
Cash and cash equivalents and restricted cash beginning of year			5,400			50,932
Cash and Cash Equivalents and Restricted Cash End of Period		$	6,630		$	49,225

 

 

 

 

AT&T Inc.
Consolidated Supplementary Data
Dollars in millions except per share amounts
Unaudited		First Quarter					Percent
			2019		2018		Change
Capital expenditures
	Purchase of property and equipment	$	5,121	$	5,957		(14.0)	%
	Interest during construction		61		161		(62.1)	%
Total Capital Expenditures		$	5,182	$	6,118		(15.3)	%
Dividends Declared per Share		$	0.51	$	0.50		2.0	%
End of Period Common Shares Outstanding (000,000)			7,297		6,148		18.7	%
Debt Ratio			47.4	%	52.6	%	(520)	BP
Total Employees			262,290		249,240		5.2	%
Subscribers and connections in thousands
Unaudited		First Quarter					Percent
			2019		2018		Change
Wireless Subscribers
	Domestic		155,732		143,832		8.3	%
	Mexico		17,722		15,642		13.3	%
Total Wireless Subscribers			173,454		159,474		8.8	%
Video Connections
	Domestic		23,891		25,394		(5.9)	%
	Latin America		13,584		13,573		0.1	%
Total Video Connections			37,475		38,967		(3.8)	%
Broadband Connections
	IP		14,852		14,637		1.5	%
	DSL		885		1,138		(22.2)	%
Total Broadband Connections			15,737		15,775		(0.2)	%
Voice Connections
	Network Access Lines		9,576		11,288		(15.2)	%
	U-verse  VoIP Connections		4,935		5,585		(11.6)	%
Total Retail Voice Connections			14,511		16,873		(14.0)	%
		First Quarter					Percent
			2019		2018		Change
Wireless Net Additions
	Domestic		2,727		2,630		3.7	%
	Mexico		93		543		(82.9)	%
Total Wireless Net Additions			2,820		3,173		(11.1)	%
Video Net Additions
	Domestic		(626)		124		-	%
	Latin America		(32)		(15)		-	%
Total Video Net Additions			(658)		109		-	%
Broadband Net Additions
	IP		100		150		(33.3)	%
	DSL		(64)		(94)		31.9	%
Total Broadband Net Additions			36		56		(35.7)	%

 

 

 

 

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.
Dollars in millions
Unaudited		First Quarter					Percent
			2019		2018		Change
Segment Operating Revenues
	Mobility	$	17,567	$	17,355		1.2	%
	Entertainment Group		11,328		11,431		(0.9)	%
	Business Wireline		6,498		6,747		(3.7)	%
Total Segment Operating Revenues			35,393		35,533		(0.4)	%
Segment Operating Contribution
	Mobility		5,351		5,158		3.7	%
	Entertainment Group		1,478		1,309		12.9	%
	Business Wireline		1,223		1,560		(21.6)	%
Total Segment Operating Contribution		$	8,052	$	8,027		0.3	%

 

 

Mobility
Mobility provides nationwide wireless service and equipment.
Dollars in millions
Unaudited		First Quarter					Percent
			2019		2018		Change
Operating Revenues
Service		$	13,792	$	13,403		2.9	%
Equipment			3,775		3,952		(4.5)	%
Total Operating Revenues			17,567		17,355		1.2	%
Operating Expenses
Operations and support			10,181		10,102		0.8	%
Depreciation and amortization			2,035		2,095		(2.9)	%
Total Operating Expenses			12,216		12,197		0.2	%
Operating Income			5,351		5,158		3.7	%
Equity in Net Income (Loss) of Affiliates			-		-		-	%
Operating  Contribution		$	5,351	$	5,158		3.7	%
Operating Income Margin			30.5	%	29.7	%	80	BP
Subscribers and connections in thousands
Unaudited		First Quarter					Percent
			2019		2018		Change
Mobility Subscribers
Postpaid			76,550		77,431		(1.1)	%
Prepaid			17,180		15,671		9.6	%
Reseller			7,574		9,002		(15.9)	%
Connected Devices			54,428		41,728		30.4	%
Total Mobility Subscribers			155,732		143,832		8.3	%
		First Quarter					Percent
			2019		2018		Change
Mobility Net Additions
Postpaid			(204)		49		-	%
Prepaid			96		241		(60.2)	%
Reseller			(253)		(388)		34.8	%
Connected Devices			3,088		2,728		13.2	%
Total Mobility Net Additions			2,727		2,630		3.7	%
Postpaid Churn			1.17	%	1.06	%	11	BP
Postpaid Phone-Only Churn			0.93	%	0.84	%	9	BP

 

 

 

 

Entertainment Group
Entertainment Group provides video, including over-the-top (OTT) services, broadband and voice communication services primarily to residential customers. This business unit also sells advertising on video distribution platforms.
Dollars in millions
Unaudited			First Quarter					Percent
				2019		2018		Change
Operating Revenues
Video entertainment			$	8,074	$	8,225		(1.8)	%
High-speed internet				2,070		1,878		10.2	%
Legacy voice and data services				683		806		(15.3)	%
Other service and equipment				501		522		(4.0)	%
Total Operating Revenues				11,328		11,431		(0.9)	%
Operating Expenses
Operations and support				8,527		8,811		(3.2)	%
Depreciation and amortization				1,323		1,310		1.0	%
Total Operating Expenses				9,850		10,121		(2.7)	%
Operating Income				1,478		1,310		12.8	%
Equity in Net Income (Loss) of Affiliates				-		(1)		-	%
Operating Contribution			$	1,478	$	1,309		12.9	%
Operating Income Margin				13.0	%	11.5	%	150	BP
Subscribers and connections in thousands
Unaudited			First Quarter					Percent
				2019		2018		Change
Video Connections 1
Premium TV				22,359		23,902		(6.5)	%
DIRECTV NOW				1,508		1,467		2.8	%
Total Video Connections				23,867		25,369		(5.9)	%
Broadband Connections 1
IP				13,822		13,616		1.5	%
DSL				632		816		(22.5)	%
Total Broadband Connections				14,454		14,432		0.2	%
Voice Connections
Retail Consumer Switched Access Lines				3,787		4,535		(16.5)	%
U-verse Consumer VoIP Connections				4,393		5,105		(13.9)	%
Total Retail Consumer Voice Connections				8,180		9,640		(15.1)	%
			First Quarter					Percent
				2019		2018		Change
Video Net Additions 1,2
Premium TV				(544)		(187)		-	%
DIRECTV NOW				(83)		312		-	%
Total Video Net Additions				(627)		125		-	%
Broadband Net Additions 1
IP				93		154		(39.6)	%
DSL				(48)		(72)		33.3	%
Total Broadband Net Additions				45		82		(45.1)	%
1	2019 includes the impact of conforming our subscriber disconnection policy with that of our wireless business and industry
	practice (to billing cycle basis), resulting in 117 additional video and 38 additional broadband subscribers at March 31, 2019.
2	Includes the impact of customers that migrated to DIRECTV NOW.

 

 

 

 

Business Wireline
Business Wireline unit provides advanced IP-based services, as well as traditional data services to business customers. Revenues have been recast to conform to the current period's presentation.
Dollars in millions
Unaudited		First Quarter					Percent
			2019		2018		Change
Operating Revenues
	Strategic and managed services	$	3,792	$	3,595		5.5	%
	Legacy voice and data services		2,404		2,865		(16.1)	%
	Other service and equipment		302		287		5.2	%
Total Operating Revenues			6,498		6,747		(3.7)	%
Operating Expenses
Operations and support			4,040		4,016		0.6	%
Depreciation and amortization			1,235		1,170		5.6	%
Total Operating Expenses			5,275		5,186		1.7	%
Operating Income			1,223		1,561		(21.7)	%
Equity in Net Income (Loss) of Affiliates			-		(1)		-	%
Operating Contribution		$	1,223	$	1,560		(21.6)	%
Operating Income Margin			18.8	%	23.1	%	(430)	BP

 

 

Business Solutions
As a supplemental presentation to our Communications segment operating results, we are providing a view of our AT&T Business Solutions results which includes both wireless and fixed operations. This combined view presents a complete profile of the entire business customer relationship and underscores the importance of mobile solutions to serving our business customers. Revenues have been recast to conform to the current period's presentation.
Dollars in millions
Unaudited		First Quarter					Percent
			2019		2018		Change
Operating Revenues
	Wireless service	$	1,913	$	1,791		6.8	%
	Strategic and managed services		3,792		3,595		5.5	%
	Legacy voice and data services		2,404		2,865		(16.1)	%
	Other service and equipment		302		287		5.2	%
	Wireless equipment		596		578		3.1	%
Total Operating Revenues			9,007		9,116		(1.2)	%
Operating Expenses
Operations and support			5,640		5,594		0.8	%
Depreciation and amortization			1,541		1,458		5.7	%
Total Operating Expenses			7,181		7,052		1.8	%
Operating Income			1,826		2,064		(11.5)	%
Equity in Net Income (Loss) of Affiliates			-		(1)		-	%
Operating Contribution		$	1,826	$	2,063		(11.5)	%
Operating Income Margin			20.3	%	22.6	%	(230)	BP

 

 

 

 

W ARNER M EDIA  SEGMENT
The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content in various physical and digital formats globally. Results from Turner, Home Box Office and Warner Bros. businesses are combined with AT&T's Regional Sports Network (RSN) and Otter Media Holdings in the WarnerMedia segment.
Dollars in millions
Unaudited		First Quarter					Percent
			2019		2018		Change
Operating Revenues
	Subscription	$	3,369	$	98		-	%
	Advertising		1,279		14		-	%
	Content and other		3,731		-		-	%
Total Operating Revenues			8,379		112		-	%
Operating Expenses
Operations and support			5,993		82		-	%
Depreciation and amortization			143		1		-	%
Total Operating Expenses			6,136		83		-	%
Operating Income			2,243		29		-	%
Equity in Net Income (Loss) of Affiliates			67		10		-	%
Operating Contribution		$	2,310	$	39		-	%
Operating Income Margin			26.8	%	25.9	%	90	BP

 

 

LATIN AMERICA SEGMENT
The Latin America segment provides entertainment and wireless service outside of the U.S. Our international subsidiaries conduct business in their local currency and operating results are converted to U.S. dollars using official exchange rates. The Latin America segment contains two business units: Vrio and Mexico.
Dollars in millions
Unaudited		First Quarter					Percent
			2019		2018		Change
Segment Operating Revenues
	Vrio	$	1,067	$	1,354		(21.2)	%
	Mexico		651		671		(3.0)	%
Total Segment Operating Revenues			1,718		2,025		(15.2)	%
Segment Operating Contribution
	Vrio		32		148		(78.4)	%
	Mexico		(205)		(259)		20.8	%
Total Segment Operating Contribution		$	(173)	$	(111)		(55.9)	%

 

 

 

 

 

Vrio
Vrio provides entertainment services to customers utilizing satellite technology in Latin America and the Caribbean.
Dollars in millions
Unaudited			First Quarter					Percent
				2019		2018		Change
Operating Revenues			$	1,067	$	1,354		(21.2)	%
Operating Expenses
Operations and support				866		1,001		(13.5)	%
Depreciation and amortization				169		205		(17.6)	%
Total Operating Expenses				1,035		1,206		(14.2)	%
Operating Income				32		148		(78.4)	%
Equity in Net Income of Affiliates				-		-		-	%
Operating Contribution			$	32	$	148		(78.4)	%
Operating Income Margin				3.0	%	10.9	%	(790)	BP
Subscribers and connections in thousands
Unaudited			First Quarter					Percent
				2019		2018		Change
Vrio Video Subscribers 1				13,584		13,573		0.1	%
			First Quarter					Percent
				2019		2018		Change
Vrio Video Net Subscriber Additions				(32)		(15)		-	%
1	2019 excludes the impact of 222 subscriber disconnections resulting from conforming our video credit policy across the region, which is
	reflected in beginning of period subscribers.

 

 

Mexico
Mexico provides wireless services and equipment to customers in Mexico.
Dollars in millions
Unaudited			First Quarter					Percent
				2019		2018		Change
Operating Revenues
Wireless service			$	442	$	404		9.4	%
Wireless equipment				209		267		(21.7)	%
Total Operating Revenues				651		671		(3.0)	%
Operating Expenses
Operations and support				725		803		(9.7)	%
Depreciation and amortization				131		127		3.1	%
Total Operating Expenses				856		930		(8.0)	%
Operating Income (Loss)				(205)		(259)		20.8	%
Equity in Net Income of Affiliates				-		-		-	%
Operating Contribution			$	(205)	$	(259)		20.8	%
Operating Income Margin				(31.5)	%	(38.6)	%	710	BP
Subscribers and connections in thousands
Unaudited			First Quarter					Percent
				2019		2018		Change
Mexico Wireless Subscribers 1
Postpaid				5,642		5,607		0.6	%
Prepaid				11,779		9,857		19.5	%
Reseller				301		178		69.1	%
Total Mexico Wireless Subscribers				17,722		15,642		13.3	%
			First Quarter					Percent
				2019		2018		Change
Mexico Wireless Net Additions
Postpaid				(69)		109		-	%
Prepaid				114		459		(75.2)	%
Reseller				48		(25)		-	%
Total Mexico Wireless Net Subscriber Additions				93		543		(82.9)	%
1	2019 excludes the impact of 692 subscriber disconnections resulting from the churn of customers related to sales by certain third-party
	distributors and the sunset of 2G services in Mexico, which are reflected in beginning of period subscribers.

 

 

 

 

XANDR SEGMENT
The Xandr segment provides advertising services. These services utilize data insights to develop higher value targeted advertising. Certain revenues in this segment are also reported by the Communications segment and are eliminated upon consolidation.
Dollars in millions
Unaudited	First Quarter					Percent
		2019		2018		Change
Segment Operating Revenues	$	426	$	337		26.4	%
Segment Operating Expenses
Operations and support		160		50		-	%
Depreciation and amortization		13		1		-	%
Total Segment Operating Expenses		173		51		-	%
Operating Income		253		286		(11.5)	%
Equity in Net Income of Affiliates		-		-		-	%
Segment Operating Contribution	$	253	$	286		(11.5)	%
Segment Operating Income Margin		59.4	%	84.9	%	(2,550)	BP

 

 

Supplemental AT&T Advertising Revenues
As a supplemental presentation to our Xandr segment operating results, we are providing a view of total advertising revenues generated by AT&T, which combines the advertising revenues recorded across all operating segments. This combined view presents the entire portfolio of revenues generated from AT&T assets and represents a significant strategic initiative and growth opportunity for AT&T.
Dollars in millions
Unaudited		First Quarter					Percent
			2019		2018		Change
Operating Revenues
	WarnerMedia	$	1,279	$	14		-	%
	Communications		417		375		11.2	%
	Xandr		426		337		26.4	%
	Eliminations		(350)		(334)		(4.8)	%
Total Advertising Revenues		$	1,772	$	392		-	%

 

 

 

 

SUPPLEMENTAL SEGMENT RECONCILIATION
Dollars in millions
Unaudited
March 31, 2019
		Revenues			Operations and Support Expenses			EBITDA			Depreciation and Amortization			Operating Income (Loss)			Equity in Net Income (Loss) of Affiliates			Segment Contribution
Communications
Mobility	$	17,567		$	10,181		$	7,386		$	2,035		$	5,351		$	-		$	5,351
Entertainment Group		11,328			8,527			2,801			1,323			1,478			-			1,478
Business Wireline		6,498			4,040			2,458			1,235			1,223			-			1,223
Total Communications		35,393			22,748			12,645			4,593			8,052			-			8,052
WarnerMedia		8,379			5,993			2,386			143			2,243			67			2,310
Latin America
Vrio		1,067			866			201			169			32			-			32
Mexico		651			725			(74)			131			(205)			-			(205)
Total Latin America		1,718			1,591			127			300			(173)			-			(173)
Xandr		426			160			266			13			253			-			253
Segment Total		45,916			30,492			15,424			5,049			10,375		$	67		$	10,442
Corporate and Other
Corporate		209			513			(304)			169			(473)
Acquisition-related items		(42)			73			(115)			1,988			(2,103)
Certain significant items		-			248			(248)			-			(248)
Eliminations and consolidations		(1,256)			(938)			(318)			-			(318)
AT&T Inc.	$	44,827		$	30,388		$	14,439		$	7,206		$	7,233
March 31, 2018
		Revenues			Operations and Support Expenses			EBITDA			Depreciation and Amortization			Operating Income (Loss)			Equity in Net Income (Loss) of Affiliates			Segment Contribution
Communications
Mobility	$	17,355		$	10,102		$	7,253		$	2,095		$	5,158		$	-		$	5,158
Entertainment Group		11,431			8,811			2,620			1,310			1,310			(1)			1,309
Business Wireline		6,747			4,016			2,731			1,170			1,561			(1)			1,560
Total Communications		35,533			22,929			12,604			4,575			8,029			(2)			8,027
WarnerMedia		112			82			30			1			29			10			39
Latin America
Vrio		1,354			1,001			353			205			148			-			148
Mexico		671			803			(132)			127			(259)			-			(259)
Total Latin America		2,025			1,804			221			332			(111)			-			(111)
Xandr		337			50			287			1			286			-			286
Segment Total		38,007			24,865			13,142			4,909			8,233		$	8		$	8,241
Corporate and Other
Corporate		333			735			(402)			23			(425)
Acquisition-related items		-			67			(67)			1,062			(1,129)
Certain significant items		-			180			(180)			-			(180)
Eliminations and consolidations		(302)			(4)			(298)			-			(298)
AT&T Inc.	$	38,038		$	25,843		$	12,195		$	5,994		$	6,201

 

 

 

 

 

 

                                                                          

 

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. These measures should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with US generally accepted accounting principles (GAAP).

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
		First Quarter
		2019		2018
Net cash provided by operating activities	$	11,052	$	8,947
Less: Capital expenditures		(5,182)		(6,118)
Free Cash Flow		5,870		2,829
Less: Dividends paid		(3,714)		(3,070)
Free Cash Flow after Dividends	$	2,156	$	(241)
Free Cash Flow Dividend Payout Ratio		63.3%		108.5%

 

Cash Paid for Capital Investment

In connection with capital improvements, we negotiate with some of our vendors to obtain favorable payment terms of 120 days or more, referred to as vendor financing, which are excluded from capital expenditures and reported in accordance with GAAP as financing activities. We present an additional view of cash paid for capital investment to provide investors with a comprehensive view of cash used to invest in our networks, product developments and support systems.

 

Cash Paid for Capital Investment
Dollars in millions
		First Quarter
		2019		2018
Capital Expenditures	$	(5,182)	$	(6,118)
Cash paid for vendor financing		(820)		(172)
Cash paid for Capital Investment	$	(6,002)	$	(6,290)

 

1

 

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, business unit and supplemental results, EBITDA excludes equity in net income (loss) of affiliates, and depreciation and amortization from operating contribution.

 

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 operating 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 management is responsible and upon which we evaluate performance.

 

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 Mobility business unit 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
		First Quarter
		2019		2018
Net Income	$	4,348	$	4,759
Additions:
Income Tax (Benefit) Expense		1,023		1,382
Interest Expense		2,141		1,771
Equity in Net (Income) Loss of Affiliates		7		(9)
Other (Income) Expense - Net		(286)		(1,702)
Depreciation and amortization		7,206		5,994
EBITDA		14,439		12,195
Total Operating Revenues		44,827		38,038
Service Revenues		40,684		33,646
EBITDA Margin		32.2%		32.1%
EBITDA Service Margin		35.5%		36.2%

 

2

 

 

 

Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions
		First Quarter
		2019		2018
Communications Segment
Operating Contribution	$	8,052	$	8,027
Additions:
Equity in Net (Income) Loss of Affiliates		-		2
Depreciation and amortization		4,593		4,575
EBITDA		12,645		12,604
Total Operating Revenues		35,393		35,533
Operating Income Margin		22.8%		22.6%
EBITDA Margin		35.7%		35.5%
Mobility
Operating Contribution	$	5,351	$	5,158
Additions:
Depreciation and amortization		2,035		2,095
EBITDA		7,386		7,253
Total Operating Revenues		17,567		17,355
Service Revenues		13,792		13,403
Operating Income Margin		30.5%		29.7%
EBITDA Margin		42.0%		41.8%
EBITDA Service Margin		53.6%		54.1%
Entertainment Group
Operating Contribution	$	1,478	$	1,309
Additions:
Equity in Net (Income) Loss of Affiliates		-		1
Depreciation and amortization		1,323		1,310
EBITDA		2,801		2,620
Total Operating Revenues		11,328		11,431
Operating Income Margin		13.0%		11.5%
EBITDA Margin		24.7%		22.9%
Business Wireline
Operating Contribution	$	1,223	$	1,560
Additions:
Equity in Net (Income) Loss of Affiliates		-		1
Depreciation and amortization		1,235		1,170
EBITDA		2,458		2,731
Total Operating Revenues		6,498		6,747
Operating Income Margin		18.8%		23.1%
EBITDA Margin		37.8%		40.5%

 

3

 

 

 

Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions
		First Quarter
		2019		2018
WarnerMedia Segment
Operating Contribution	$	2,310	$	39
Additions:
Equity in Net (Income) of Affiliates		(67)		(10)
Depreciation and amortization		143		1
EBITDA		2,386		30
Total Operating Revenues		8,379		112
Operating Income Margin		26.8%		25.9%
EBITDA Margin		28.5%		26.8%

 

 

Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions
		First Quarter
		2019		2018
Latin America Segment
Operating Contribution	$	(173)	$	(111)
Additions:
Depreciation and amortization		300		332
EBITDA		127		221
Total Operating Revenues		1,718		2,025
Operating Income Margin		-10.1%		-5.5%
EBITDA Margin		7.4%		10.9%
Vrio
Operating Contribution	$	32	$	148
Additions:
Depreciation and amortization		169		205
EBITDA		201		353
Total Operating Revenues		1,067		1,354
Operating Income Margin		3.0%		10.9%
EBITDA Margin		18.8%		26.1%
Mexico
Operating Contribution	$	(205)	$	(259)
Additions:
Depreciation and amortization		131		127
EBITDA		(74)		(132)
Total Operating Revenues		651		671
Operating Income Margin		-31.5%		-38.6%
EBITDA Margin		-11.4%		-19.7%

 

4

 

 

 

Segment EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions
		First Quarter
		2019		2018
Xandr
Operating Contribution	$	253	$	286
Additions:
Depreciation and amortization		13		1
EBITDA		266		287
Total Operating Revenues		426		337
Operating Income Margin		59.4%		84.9%
EBITDA Margin		62.4%		85.2%

Adjusting Items

Adjusting items include revenues and costs we consider non-operational 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 25% for transactions after tax reform.   

 

Adjusting Items
Dollars in millions
		First Quarter
		2019		2018
Operating Revenues
Time Warner merger adjustment	$	42	$	-
Adjustments to Operating Revenues		42		-
Operating Expenses
Time Warner and other merger costs		73		67
Employee separation costs		248		51
Natural disaster costs		-		104
Foreign currency exchange		-		25
Adjustments to Operations and Support Expenses		321		247
Amortization of intangible assets		1,989		1,062
Adjustments to Operating Expenses		2,310		1,309
Other
Merger-related interest and fees 1		-		393
Special termination charges, debt redemption costs and other adjustments		211		-
Actuarial (gain) loss		432		(930)
Adjustments to Income Before Income Taxes		2,995		772
Tax impact of adjustments		649		173
Tax-related items		141		-
Adjustments to Net Income	$	2,205	$	599
1 Includes interest expense incurred on debt issued, redemption premiums and interest income earned on cash held prior to the close of merger transactions.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses and income tax expense certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

 

5

 

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.

 

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA Service Margin
Dollars in millions
		First Quarter
		2019		2018
Operating Income	$	7,233	$	6,201
Adjustments to Operating Revenues		42		-
Adjustments to Operating Expenses		2,310		1,309
Adjusted Operating Income		9,585		7,510
EBITDA		14,439		12,195
Adjustments to Operating Revenues		42		-
Adjustments to Operations and Support Expenses		321		247
Adjusted EBITDA		14,802		12,442
Total Operating Revenues		44,827		38,038
Adjustments to Operating Revenues		42		-
Total Adusted Operating Revenue		44,869		38,038
Service Revenues		40,684		33,646
Adjustments to Service Revenues		42		-
Adusted Service Revenue		40,726		33,646
Operating Income Margin		16.1%		16.3%
Adjusted Operating Income Margin		21.4%		19.7%
Adjusted EBITDA Margin		33.0%		32.7%
Adjusted EBITDA Service Margin		36.3%		37.0%

 

 

Adjusted Diluted EPS
		First Quarter
		2019		2018
Diluted Earnings Per Share (EPS)	$	0.56	$	0.75
Amortization of intangible assets		0.21		0.13
Merger integration items 1		0.01		0.06
(Gain) loss on sale of assets, impairments       and other adjustments 2		0.05		0.03
Actuarial (gain) loss 3		0.05		(0.12)
Tax-related items		(0.02)		-
Adjusted EPS	$	0.86	$	0.85
Year-over-year growth - Adjusted		1.2%
Weighted Average Common Shares Outstanding with Dilution (000,000)		7,342		6,180
1 Includes combined merger integration items and merger-related interest income and expense, and redemption premiums.
2 Includes gains on transactions, natural disaster adjustments and charges, and employee-related and other costs.
3 Includes adjustments for actuarial gains or losses ($432 million loss in the first quarter of 2019) associated with our pension 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 EPS reflects an expected return on plan assets of $816 million (based on an average expected return on plan assets of 7.00% for our pension trust), rather than the actual return on plan assets of $2.8 billion (actual return of 5.8% for the quarter), included in the GAAP measure of income.

 

6

 

Pro Forma 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. Our Net Debt to Pro Forma Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters Pro Forma 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.

 

 

Net Debt to Pro Forma Adjusted EBITDA
Dollars in millions
		Three Months Ended
		Jun. 30,		Sep. 30,		Dec. 31,		Mar. 31,		Four Quarters
		2018 1		2018 1		2018 1		2019
Pro Forma Adjusted EBITDA 1,2	$	15,119	$	15,872	$	15,029	$	14,802	$	60,822
Add back severance		(133)		(76)		(327)		-		(536)
Net Debt  Pro Forma Adjusted EBITDA		14,986		15,796		14,702		14,802		60,286
End-of-period current debt										11,538
End-of-period long-term debt										163,942
Total End-of-Period Debt										175,480
Less: Cash and Cash Equivalents										6,516
Net Debt Balance										168,964
Annualized Net Debt to Pro Forma Adjusted EBITDA Ratio										2.80
1 As reported in AT&T's Form 8-K filed July 24, 2018, October 24, 2018 and January 30, 2019.
2 Includes the purchase accounting reclassification of released content amortization of $491 million pro forma and $98 million reported by AT&T in the second quarter of 2018,  $772 million reported in the third quarter of 2018, $545 million reported by AT&T in the fourth quarter of 2018 and $150 million reported by AT&T in the first quarter of 2019.

 

 

 

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Supplemental Operational Measures

We provide a supplemental discussion of our business solutions operations that is calculated by combining our Mobility and Business Wireline operating units, and then adjusting to remove non-business operations. The following table presents a reconciliation of our supplemental Business Solutions results.

 

 

Supplemental Operational Measure
		First Quarter
		March 31, 2019									March 31, 2018
		Mobility		Business Wireline		Adjustments 1		Business Solutions			Mobility		Business Wireline		Adjustments 1		Business Solutions
Operating Revenues
Wireless service	$	13,792	$	-	$	(11,879)	$	1,913		$	13,403	$	-	$	(11,612)	$	1,791
Strategic and managed services		-		3,792		-		3,792			-		3,595		-		3,595
Legacy voice and data services		-		2,404		-		2,404			-		2,865		-		2,865
Other services and equipment		-		302		-		302			-		287		-		287
Wireless equipment		3,775		-		(3,179)		596			3,952		-		(3,374)		578
Total Operating Revenues		17,567		6,498		(15,058)		9,007			17,355		6,747		(14,986)		9,116
Operations and support		10,181		4,040		(8,581)		5,640			10,102		4,016		(8,524)		5,594
EBITDA		7,386		2,458		(6,477)		3,367			7,253		2,731		(6,462)		3,522
Depreciation and amortization		2,035		1,235		(1,729)		1,541			2,095		1,170		(1,807)		1,458
Total Operating Expenses		12,216		5,275		(10,310)		7,181			12,197		5,186		(10,331)		7,052
Operating Income		5,351		1,223		(4,748)		1,826			5,158		1,561		(4,655)		2,064
Equity in net Income of Affiliates		-		-		-		-			-		(1)		-		(1)
Contribution	$	5,351	$	1,223	$	(4,748)	$	1,826		$	5,158	$	1,560	$	(4,655)	$	2,063
1 Non-business wireless reported in the Communication segment under the Mobility business unit.

 

 

 

 

 

 

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