(Mark One)
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2017
or
|
|
||
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Large accelerated filer
|
[X]
|
Accelerated filer
|
[ ]
|
|
Non-accelerated filer
|
[ ]
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
[ ]
|
Emerging growth company
|
[ ]
|
Three months ended
|
||||||||
March 31,
|
||||||||
2017
|
2016
|
|||||||
Numerators
|
||||||||
Numerator for basic earnings per share:
|
||||||||
Net Income
|
$
|
3,574
|
$
|
3,885
|
||||
Less: Net income attributable to noncontrolling interest
|
(105
|
)
|
(82
|
)
|
||||
Net Income attributable to AT&T
|
3,469
|
3,803
|
||||||
Dilutive potential common shares:
|
||||||||
Share-based payment
|
4
|
4
|
||||||
Numerator for diluted earnings per share
|
$
|
3,473
|
$
|
3,807
|
||||
Denominators (000,000)
|
||||||||
Denominator for basic earnings per share:
|
||||||||
Weighted average number of common shares outstanding
|
6,166
|
6,172
|
||||||
Dilutive potential common shares:
|
||||||||
Share-based payment (in shares)
|
20
|
18
|
||||||
Denominator for diluted earnings per share
|
6,186
|
6,190
|
||||||
Basic earnings per share attributable to AT&T
|
$
|
0.56
|
$
|
0.62
|
||||
Diluted earnings per share attributable to AT&T
|
$
|
0.56
|
$
|
0.61
|
Foreign Currency Translation Adjustment
|
Net Unrealized Gains (Losses) on Available-for-Sale Securities
|
Net Unrealized Gains (Losses) on Cash Flow Hedges
|
Defined Benefit Postretirement Plans
|
Accumulated Other Comprehensive Income
|
|||||||||||
Balance as of December 31, 2016
|
$
|
(1,995)
|
$
|
541
|
$
|
744
|
$
|
5,671
|
$
|
4,961
|
|||||
Other comprehensive income
(loss) before reclassifications
|
366
|
33
|
13
|
-
|
412
|
||||||||||
Amounts reclassified
from accumulated OCI
|
-
|
1
|
5
|
1
|
10
|
2
|
(228)
|
3
|
(213)
|
||||||
Net other comprehensive
income (loss)
|
366
|
38
|
23
|
(228)
|
199
|
||||||||||
Balance as of March 31, 2017
|
$
|
(1,629)
|
$
|
579
|
$
|
767
|
$
|
5,443
|
$
|
5,160
|
|||||
Foreign Currency Translation Adjustment
|
Net Unrealized Gains (Losses) on Available-for-Sale Securities
|
Net Unrealized Gains (Losses) on Cash Flow Hedges
|
Defined Benefit Postretirement Plans
|
Accumulated Other Comprehensive Income
|
|||||||||||
Balance as of December 31, 2015
|
$
|
(1,198)
|
$
|
484
|
$
|
16
|
$
|
6,032
|
$
|
5,334
|
|||||
Other comprehensive income
(loss) before reclassifications
|
(44)
|
(26)
|
124
|
-
|
54
|
||||||||||
Amounts reclassified
from accumulated OCI
|
-
|
1
|
(3)
|
1
|
10
|
2
|
(215)
|
3
|
(208)
|
||||||
Net other comprehensive
income (loss)
|
(44)
|
(29)
|
134
|
(215)
|
(154)
|
||||||||||
Balance as of March 31, 2016
|
$
|
(1,242)
|
$
|
455
|
$
|
150
|
$
|
5,817
|
$
|
5,180
|
|||||
1
|
(Gains) losses are included in Other income (expense) - net in the consolidated statements of income.
|
||||||||||||||
2
|
(Gains) losses are included in Interest expense in the consolidated statements of income. See Note 6 for additional information.
|
||||||||||||||
3
|
The amortization of prior service credits associated with postretirement benefits, net of amounts capitalized as part of construction
|
||||||||||||||
labor, are included in Cost of services and sales and Selling, general and administrative in the consolidated statements of income
|
|||||||||||||||
(see Note 5).
|
·
|
Acquisition-related items
which consists of (1) items associated with the merger and integration of acquired businesses and (2) the noncash amortization of intangible assets acquired in acquisitions.
|
·
|
Certain significant items
which consists of (1) noncash actuarial gains and losses from pension and other postretirement benefits, (2) employee separation charges associated with voluntary and/or strategic offers, (3) losses resulting from abandonment or impairment of assets and (4) other items for which the segments are not being evaluated.
|
For the three months ended March 31, 2017
|
||||||||||||||||||||||||||||
Revenues
|
Operations
and Support
Expenses
|
EBITDA
|
Depreciation
and
Amortization
|
Operating
Income (Loss)
|
Equity in Net
Income (Loss) of
Affiliates
|
Segment
Contribution
|
||||||||||||||||||||||
Business Solutions
|
$
|
16,848
|
$
|
10,176
|
$
|
6,672
|
$
|
2,312
|
$
|
4,360
|
$
|
-
|
$
|
4,360
|
||||||||||||||
Entertainment Group
|
12,623
|
9,601
|
3,022
|
1,419
|
1,603
|
(6
|
)
|
1,597
|
||||||||||||||||||||
Consumer Mobility
|
7,740
|
4,528
|
3,212
|
873
|
2,339
|
-
|
2,339
|
|||||||||||||||||||||
International
|
1,929
|
1,759
|
170
|
290
|
(120
|
)
|
20
|
(100
|
)
|
|||||||||||||||||||
Segment Total
|
39,140
|
26,064
|
13,076
|
4,894
|
8,182
|
$
|
14
|
$
|
8,196
|
|||||||||||||||||||
Corporate and Other
|
225
|
221
|
4
|
31
|
(27
|
)
|
||||||||||||||||||||||
Acquisition-related items
|
-
|
207
|
(207
|
)
|
1,202
|
(1,409
|
)
|
|||||||||||||||||||||
Certain significant items
|
-
|
(118
|
)
|
118
|
-
|
118
|
||||||||||||||||||||||
AT&T Inc.
|
$
|
39,365
|
$
|
26,374
|
$
|
12,991
|
$
|
6,127
|
$
|
6,864
|
The following table is a reconciliation of Segment Contribution to "Income Before Income Taxes" reported on our consolidated statements of income.
|
||||||||
First Quarter
|
||||||||
2017
|
2016
|
|||||||
Business Solutions
|
$
|
4,360
|
$
|
4,299
|
||||
Entertainment Group
|
1,597
|
1,595
|
||||||
Consumer Mobility
|
2,339
|
2,494
|
||||||
International
|
(100
|
)
|
(184
|
)
|
||||
Segment Contribution
|
8,196
|
8,204
|
||||||
Reconciling Items:
|
||||||||
Corporate and Other
|
(27
|
)
|
(121
|
)
|
||||
Merger and integration charges
|
(207
|
)
|
(295
|
)
|
||||
Amortization of intangibles acquired
|
(1,202
|
)
|
(1,351
|
)
|
||||
Employee separation costs
|
-
|
(25
|
)
|
|||||
Gain on wireless spectrum transactions
|
118
|
736
|
||||||
Segment equity in net (income) loss of affiliates
|
(14
|
)
|
(17
|
)
|
||||
AT&T Operating Income
|
6,864
|
7,131
|
||||||
Interest expense
|
1,293
|
1,207
|
||||||
Equity in net income (loss) of affiliates
|
(173
|
)
|
13
|
|||||
Other income (expense) - net
|
(20
|
)
|
70
|
|||||
Income Before Income Taxes
|
$
|
5,378
|
$
|
6,007
|
Three months ended
|
||||||||
March 31,
|
||||||||
2017
|
2016
|
|||||||
Pension cost:
|
||||||||
Service cost – benefits earned during the period
|
$
|
282
|
$
|
278
|
||||
Interest cost on projected benefit obligation
|
484
|
495
|
||||||
Expected return on assets
|
(783
|
)
|
(778
|
)
|
||||
Amortization of prior service credit
|
(31
|
)
|
(26
|
)
|
||||
Net pension (credit) cost
|
$
|
(48
|
)
|
$
|
(31
|
)
|
||
Postretirement cost:
|
||||||||
Service cost – benefits earned during the period
|
$
|
41
|
$
|
48
|
||||
Interest cost on accumulated postretirement benefit obligation
|
222
|
243
|
||||||
Expected return on assets
|
(80
|
)
|
(89
|
)
|
||||
Amortization of prior service credit
|
(336
|
)
|
(319
|
)
|
||||
Net postretirement (credit) cost
|
$
|
(153
|
)
|
$
|
(117
|
)
|
||
Combined net pension and postretirement (credit) cost
|
$
|
(201
|
)
|
$
|
(148
|
)
|
Level 1 |
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access.
|
Level 2 |
Inputs to the valuation methodology include:
|
·
|
Quoted prices for similar assets and liabilities in active markets.
|
·
|
Quoted prices for identical or similar assets or liabilities in inactive markets.
|
·
|
Inputs other than quoted market prices that are observable for the asset or liability.
|
·
|
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
Level 3 |
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
·
|
Fair value is often based on developed models in which there are few, if any, external observations.
|
March 31, 2017
|
December 31, 2016
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Notes and debentures
1
|
$
|
132,379
|
$
|
138,944
|
$
|
122,381
|
$
|
128,726
|
||||||||
Bank borrowings
|
3
|
3
|
4
|
4
|
||||||||||||
Investment securities
|
2,640
|
2,640
|
2,587
|
2,587
|
||||||||||||
1
Includes credit agreement borrowings.
|
December 31, 2016
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Available-for-Sale Securities
|
||||||||||||||||
Domestic equities
|
$
|
1,215
|
$
|
-
|
$
|
-
|
$
|
1,215
|
||||||||
International equities
|
594
|
-
|
-
|
594
|
||||||||||||
Fixed income bonds
|
-
|
508
|
-
|
508
|
||||||||||||
Asset Derivatives
1
|
||||||||||||||||
Interest rate swaps
|
-
|
79
|
-
|
79
|
||||||||||||
Cross-currency swaps
|
-
|
89
|
-
|
89
|
||||||||||||
Liability Derivatives
1
|
||||||||||||||||
Interest rate swaps
|
-
|
(14
|
)
|
-
|
(14
|
)
|
||||||||||
Cross-currency swaps
|
-
|
(3,867
|
)
|
-
|
(3,867
|
)
|
||||||||||
1
Derivatives designated as hedging instruments are reflected as "Other assets," "Other noncurrent liabilities" and, for a portion of interest rate swaps, "Other current assets" in our consolidated balance sheets.
|
March 31,
|
December 31,
|
|||||||
2017
|
2016
|
|||||||
Interest rate swaps
|
$
|
10,450
|
$
|
9,650
|
||||
Cross-currency swaps
|
29,642
|
29,642
|
||||||
Total
|
$
|
40,092
|
$
|
39,292
|
Following are the related hedged items affecting our financial position and performance:
|
||||||||
Effect of Derivatives on the Consolidated Statements of Income
|
||||||||
Fair Value Hedging Relationships
|
Three months ended
|
|||||||
March 31,
|
||||||||
2017
|
2016
|
|||||||
Interest rate swaps (Interest expense):
|
||||||||
Gain (Loss) on interest rate swaps
|
$
|
(25
|
)
|
$
|
66
|
|||
Gain (Loss) on long-term debt
|
25
|
(66
|
)
|
Three months ended
|
||||||||
March 31,
|
||||||||
Cash Flow Hedging Relationships
|
2017
|
2016
|
||||||
Cross-currency swaps:
|
||||||||
Gain (Loss) recognized in accumulated OCI
|
$
|
20
|
$
|
191
|
||||
Interest rate locks:
|
||||||||
Interest income (expense) reclassified from accumulated OCI into income
|
(15
|
)
|
(15
|
)
|
Three months ended
|
||||||||
March 31,
|
||||||||
2017
|
2016
|
|||||||
Fair value of repurchased receivables
|
$
|
377
|
$
|
532
|
||||
Carrying value of deferred purchase price
|
339
|
539
|
||||||
Gain (loss) on repurchases
1
|
$
|
38
|
$
|
(7
|
)
|
|||
1
These gains (losses) are included in "Selling, general and administrative" in the consolidated statements of income.
|
2017
|
||||
Outstanding derecognized receivables at January 1,
|
$
|
7,232
|
||
Gross receivables sold
|
2,846
|
|||
Collections on cash purchase price
|
(1,128
|
)
|
||
Collections on deferred purchase price
|
(185
|
)
|
||
Fees
|
(23
|
)
|
||
Trade ins and other
|
(73
|
)
|
||
Fair value of repurchased receivables
|
(377
|
)
|
||
Outstanding derecognized receivables at March 31,
|
$
|
8,292
|
First Quarter
|
||||||||||||
2017
|
2016
|
Percent Change
|
||||||||||
Operating Revenues
|
||||||||||||
Service
|
$
|
36,456
|
$
|
37,101
|
(1.7
|
)%
|
||||||
Equipment
|
2,909
|
3,434
|
(15.3
|
)
|
||||||||
Total Operating Revenues
|
39,365
|
40,535
|
(2.9
|
)
|
||||||||
Operating expenses
|
||||||||||||
Cost of services and sales
|
||||||||||||
Equipment
|
3,848
|
4,375
|
(12.0
|
)
|
||||||||
Broadcast, programming and operations
|
4,974
|
4,629
|
7.5
|
|||||||||
Other cost of services
|
9,065
|
9,396
|
(3.5
|
)
|
||||||||
Selling, general and administrative
|
8,487
|
8,441
|
0.5
|
|||||||||
Depreciation and amortization
|
6,127
|
6,563
|
(6.6
|
)
|
||||||||
Total Operating Expenses
|
32,501
|
33,404
|
(2.7
|
)
|
||||||||
Operating Income
|
6,864
|
7,131
|
(3.7
|
)
|
||||||||
Income Before Income Taxes
|
5,378
|
6,007
|
(10.5
|
)
|
||||||||
Net Income
|
3,574
|
3,885
|
(8.0
|
)
|
||||||||
Net Income Attributable to AT&T
|
$
|
3,469
|
$
|
3,803
|
(8.8
|
)%
|
Selected Financial and Operating Data
|
||||||||
March 31,
|
||||||||
Subscribers and connections in (000s)
|
2017
|
2016
|
||||||
Domestic wireless subscribers
|
134,218
|
130,445
|
||||||
Mexican wireless subscribers
|
12,606
|
9,213
|
||||||
North American wireless subscribers
|
146,824
|
139,658
|
||||||
North American branded subscribers
|
103,532
|
98,158
|
||||||
North American branded net additions
|
738
|
1,195
|
||||||
Domestic satellite video subscribers
|
21,012
|
20,112
|
||||||
AT&T U-verse® (U-verse) video subscribers
|
4,048
|
5,260
|
||||||
Latin America satellite video subscribers
1
|
13,678
|
12,436
|
||||||
Total video subscribers
|
38,738
|
37,808
|
||||||
Total domestic broadband connections
|
15,695
|
15,764
|
||||||
Network access lines in service
|
13,363
|
15,975
|
||||||
U-verse VoIP connections
|
5,858
|
5,484
|
||||||
Debt ratio
2
|
51.6
|
%
|
51.2
|
%
|
||||
Net debt ratio
3
|
45.8
|
%
|
47.3
|
%
|
||||
Ratio of earnings to fixed charges
4
|
3.80
|
4.22
|
||||||
Number of AT&T employees
|
264,530
|
280,870
|
Business Solutions
|
||||||||||||
Segment Results
|
||||||||||||
First Quarter
|
||||||||||||
2017
|
2016
|
Percent Change
|
||||||||||
Segment operating revenues
|
||||||||||||
Wireless service
|
$
|
7,929
|
$
|
7,855
|
0.9
|
%
|
||||||
Fixed strategic services
|
2,974
|
2,751
|
8.1
|
|||||||||
Legacy voice and data services
|
3,630
|
4,373
|
(17.0
|
)
|
||||||||
Other service and equipment
|
817
|
859
|
(4.9
|
)
|
||||||||
Wireless equipment
|
1,498
|
1,771
|
(15.4
|
)
|
||||||||
Total Segment Operating Revenues
|
16,848
|
17,609
|
(4.3
|
)
|
||||||||
Segment operating expenses
|
||||||||||||
Operations and support
|
10,176
|
10,802
|
(5.8
|
)
|
||||||||
Depreciation and amortization
|
2,312
|
2,508
|
(7.8
|
)
|
||||||||
Total Segment Operating Expenses
|
12,488
|
13,310
|
(6.2
|
)
|
||||||||
Segment Operating Income
|
4,360
|
4,299
|
1.4
|
|||||||||
Equity in Net Income of Affiliates
|
-
|
-
|
-
|
|||||||||
Segment Contribution
|
$
|
4,360
|
$
|
4,299
|
1.4
|
%
|
March 31,
|
|
|||||||||||
(in 000s)
|
2017
|
2016
|
Percent Change
|
|||||||||
Business Wireless Subscribers
|
||||||||||||
Postpaid/Branded
|
50,839
|
48,844
|
4.1
|
%
|
||||||||
Reseller
|
76
|
64
|
18.8
|
|||||||||
Connected devices
1
|
31,439
|
26,863
|
17.0
|
|||||||||
Total Business Wireless Subscribers
|
82,354
|
75,771
|
8.7
|
|||||||||
Business IP Broadband Connections
|
980
|
928
|
5.6
|
%
|
||||||||
1
Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets.
|
Entertainment Group
|
||||||||||||
Segment Results
|
||||||||||||
First Quarter
|
||||||||||||
2017
|
2016
|
Percent Change
|
||||||||||
Segment operating revenues
|
||||||||||||
Video entertainment
|
$
|
9,020
|
$
|
8,904
|
1.3
|
%
|
||||||
High-speed internet
|
1,941
|
1,803
|
7.7
|
|||||||||
Legacy voice and data services
|
1,056
|
1,313
|
(19.6
|
)
|
||||||||
Other service and equipment
|
606
|
638
|
(5.0
|
)
|
||||||||
Total Segment Operating Revenues
|
12,623
|
12,658
|
(0.3
|
)
|
||||||||
Segment operating expenses
|
||||||||||||
Operations and support
|
9,601
|
9,578
|
0.2
|
|||||||||
Depreciation and amortization
|
1,419
|
1,488
|
(4.6
|
)
|
||||||||
Total Segment Operating Expenses
|
11,020
|
11,066
|
(0.4
|
)
|
||||||||
Segment Operating Income
|
1,603
|
1,592
|
0.7
|
|||||||||
Equity in Net Income (Loss) of Affiliates
|
(6
|
)
|
3
|
-
|
||||||||
Segment Contribution
|
$
|
1,597
|
$
|
1,595
|
0.1
|
%
|
March 31,
|
||||||||||||
(in 000s)
|
2017
|
2016
|
Percent Change
|
|||||||||
Linear Video Connections
|
||||||||||||
Satellite
|
21,012
|
20,112
|
4.5
|
%
|
||||||||
U-verse
|
4,020
|
5,232
|
(23.2
|
)
|
||||||||
Total Linear Video Connections
|
25,032
|
25,344
|
(1.2
|
)
|
||||||||
Broadband Connections
|
||||||||||||
IP
|
13,130
|
12,542
|
4.7
|
|||||||||
DSL
|
1,164
|
1,749
|
(33.4
|
)
|
||||||||
Total Broadband Connections
|
14,294
|
14,291
|
-
|
|||||||||
Retail Consumer Switched Access Lines
|
5,533
|
6,888
|
(19.7
|
)
|
||||||||
U-verse Consumer VoIP Connections
|
5,470
|
5,225
|
4.7
|
|||||||||
Total Retail Consumer Voice Connections
|
11,003
|
12,113
|
(9.2
|
)%
|
First Quarter
|
||||||||||||
2017
|
2016
|
Percent Change
|
||||||||||
(in 000s)
|
||||||||||||
Linear Video Net Additions
1
|
||||||||||||
Satellite
|
-
|
328
|
-
|
%
|
||||||||
U-verse
|
(233
|
)
|
(382
|
)
|
39.0
|
|||||||
Linear Net Video Additions
|
(233
|
)
|
(54
|
)
|
-
|
|||||||
Broadband Net Additions
|
||||||||||||
IP
|
242
|
186
|
30.1
|
|||||||||
DSL
|
(127
|
)
|
(181
|
)
|
29.8
|
|||||||
Net Broadband Additions
|
115
|
5
|
-
|
%
|
||||||||
1
Includes disconnections for customers that migrated to DIRECTV NOW.
|
Consumer Mobility
|
||||||||||||
Segment Results
|
||||||||||||
First Quarter
|
||||||||||||
2017
|
2016
|
Percent Change
|
||||||||||
Segment operating revenues
|
||||||||||||
Service
|
$
|
6,609
|
$
|
6,943
|
(4.8
|
)%
|
||||||
Equipment
|
1,131
|
1,385
|
(18.3
|
)
|
||||||||
Total Segment Operating Revenues
|
7,740
|
8,328
|
(7.1
|
)
|
||||||||
Segment operating expenses
|
||||||||||||
Operations and support
|
4,528
|
4,912
|
(7.8
|
)
|
||||||||
Depreciation and amortization
|
873
|
922
|
(5.3
|
)
|
||||||||
Total Segment Operating Expenses
|
5,401
|
5,834
|
(7.4
|
)
|
||||||||
Segment Operating Income
|
2,339
|
2,494
|
(6.2
|
)
|
||||||||
Equity in Net Income of Affiliates
|
-
|
-
|
-
|
|||||||||
Segment Contribution
|
$
|
2,339
|
$
|
2,494
|
(6.2
|
)%
|
First Quarter
|
||||||||||||
2017
|
2016
|
Percent Change
|
||||||||||
(in 000s)
|
||||||||||||
Consumer Mobility Net Additions
1, 4
|
||||||||||||
Postpaid
|
(66
|
)
|
(4
|
)
|
-
|
%
|
||||||
Prepaid
|
282
|
500
|
(43.6
|
)
|
||||||||
Branded Net Additions
|
216
|
496
|
(56.5
|
)
|
||||||||
Reseller
|
(588
|
)
|
(378
|
)
|
(55.6
|
)
|
||||||
Connected devices
2
|
19
|
(26
|
)
|
-
|
||||||||
Consumer Mobility Net Subscriber Additions
|
(353
|
)
|
92
|
-
|
%
|
|||||||
Total Churn
1, 3, 4
|
2.42
|
%
|
2.11
|
%
|
31 BP
|
|||||||
Postpaid Churn
1, 3, 4
|
1.22
|
%
|
1.24
|
%
|
(2) BP
|
|||||||
1
Excludes migrations between AT&T segments and/or subscriber categories and acquisition-related additions during the period.
|
||||||||||||
2
Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets.
|
||||||||||||
3
Calculated by dividing the aggregate number of wireless subscribers who canceled service during a month divided by the total number
of wireless subscribers at the beginning of that month. The churn rate for the period is equal to the average of the churn rate
for each month of that period.
|
||||||||||||
4
2017 excludes the impact of the 2G shutdown and a true-up to the reseller subscriber base, which were reflected in beginning of period subscribers.
|
International
|
||||||||||||
Segment Results
|
||||||||||||
First Quarter
|
||||||||||||
2017
|
2016
|
Percent Change
|
||||||||||
Segment operating revenues
|
||||||||||||
Video entertainment
|
$
|
1,341
|
$
|
1,130
|
18.7
|
%
|
||||||
Wireless service
|
475
|
455
|
4.4
|
|||||||||
Wireless equipment
|
113
|
82
|
37.8
|
|||||||||
Total Segment Operating Revenues
|
1,929
|
1,667
|
15.7
|
|||||||||
Segment operating expenses
|
||||||||||||
Operations and support
|
1,759
|
1,588
|
10.8
|
|||||||||
Depreciation and amortization
|
290
|
277
|
4.7
|
|||||||||
Total Segment Operating Expenses
|
2,049
|
1,865
|
9.9
|
|||||||||
Segment Operating Income (Loss)
|
(120
|
)
|
(198
|
)
|
39.4
|
|||||||
Equity in Net Income (Loss) of Affiliates
|
20
|
14
|
42.9
|
|||||||||
Segment Contribution
|
$
|
(100
|
)
|
$
|
(184
|
)
|
45.7
|
%
|
First Quarter
|
||||||||||||
(in 000s)
|
2017
|
2016
|
Percent Change
|
|||||||||
Mexican Wireless Net Additions
|
||||||||||||
Postpaid
|
130
|
116
|
12.1
|
%
|
||||||||
Prepaid
|
517
|
450
|
14.9
|
|||||||||
Branded Net Additions
|
647
|
566
|
14.3
|
|||||||||
Reseller
|
(14
|
)
|
(37
|
)
|
62.2
|
|||||||
Mexican Wireless Net Subscriber Additions
|
633
|
529
|
19.7
|
|||||||||
Latin America Satellite Net Additions
1
|
||||||||||||
PanAmericana
|
52
|
28
|
85.7
|
|||||||||
SKY Brazil
|
39
|
(101
|
)
|
-
|
||||||||
Latin America Satellite Net Subscriber Additions
2
|
91
|
(73
|
)
|
-
|
%
|
|||||||
1
In 2017, we updated the methodology used to account for prepaid video connections. The impact of this change is excluded.
|
||||||||||||
2
SKY Mexico had net subscriber additions of 100,000 for the quarter ended December 31, 2016, and 398,000 for the quarter ended March 31, 2016.
|
AT&T Mobility Results
|
||||||||||||
First Quarter
|
||||||||||||
2017
|
2016
|
Percent Change
|
||||||||||
Operating revenues
|
||||||||||||
Service
|
$
|
14,538
|
$
|
14,798
|
(1.8
|
)%
|
||||||
Equipment
|
2,629
|
3,156
|
(16.7
|
)
|
||||||||
Total Operating Revenues
|
17,167
|
17,954
|
(4.4
|
)
|
||||||||
Operating expenses
|
||||||||||||
Operations and support
|
9,998
|
10,624
|
(5.9
|
)
|
||||||||
EBITDA
|
7,169
|
7,330
|
(2.2
|
)
|
||||||||
Depreciation and amortization
|
1,997
|
2,056
|
(2.9
|
)
|
||||||||
Total Operating Expenses
|
11,995
|
12,680
|
(5.4
|
)
|
||||||||
Operating Income
|
$
|
5,172
|
$
|
5,274
|
(1.9
|
)%
|
First Quarter
|
||||||||||||
2017
|
2016
|
Percent Change
|
||||||||||
(in 000s)
|
||||||||||||
Wireless Net Additions
1, 4
|
||||||||||||
Postpaid
|
(191
|
)
|
129
|
-
|
%
|
|||||||
Prepaid
|
282
|
500
|
(43.6
|
)
|
||||||||
Branded Net Additions
|
91
|
629
|
(85.5
|
)
|
||||||||
Reseller
|
(582
|
)
|
(400
|
)
|
(45.5
|
)
|
||||||
Connected devices
2
|
2,572
|
1,552
|
65.7
|
|||||||||
Wireless Net Subscriber Additions
|
2,081
|
1,781
|
16.8
|
|||||||||
Smartphones sold under our installment programs during period
|
3,501
|
4,135
|
(15.3
|
)%
|
||||||||
Total Churn
3, 4
|
1.46
|
%
|
1.42
|
%
|
4 BP
|
|||||||
Branded Churn
3, 4
|
1.71
|
%
|
1.63
|
%
|
8 BP
|
|||||||
Postpaid Churn
3, 4
|
1.12
|
%
|
1.10
|
%
|
2 BP
|
|||||||
Postpaid Phone Only Churn
3, 4
|
0.90
|
%
|
0.96
|
%
|
(6) BP
|
|||||||
1
Excludes acquisition-related additions during the period.
|
||||||||||||
2
Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets.
|
||||||||||||
3
Calculated by dividing the aggregate number of wireless subscribers who canceled service during a month divided by the total number of wireless subscribers at the beginning of that month. The churn rate for the period is equal to the average of the churn rate for each month of that period.
|
||||||||||||
4
2017 excludes the impact of the 2G shutdown and a true-up to the reseller subscriber base, which were reflected in beginning of period subscribers.
|
·
|
Approximately 20,000 traditional wireline employees in the Southwest ratified a new contract in April 2017. The new contract will expire in April 2021.
|
·
|
Approximately 5,000 traditional wireline employees primarily in the Midwest are covered by a contract that expires in June 2017. In April, we reached a tentative agreement on a new five-year contract that is subject to ratification.
|
·
|
Approximately 20,000 mobility employees across the country are covered by contracts that expired in early 2017. We continue to negotiate with labor representatives.
|
·
|
Approximately 15,000 traditional wireline employees in our West region are covered by contracts that expired in April 2016. We continue to negotiate with labor representatives.
|
·
|
Approximately 11,000 former DIRECTV employees were eligible for and chose union representation. Bargaining has resulted in approximately 80% of these employees now being covered under ratified contracts that expire between 2017 and 2021.
|
·
|
Submitted winning bids for 251 AWS spectrum licenses for a near-nationwide contiguous block of high-quality AWS spectrum in the AWS-3 Auction.
|
·
|
Redeployed spectrum previously used for basic 2G services to support more advanced mobile internet services on our 3G and 4G networks.
|
·
|
Secured the FirstNet contract, which provides us with access to a nationwide low band 20 MHz of spectrum, assuming all states opt in.
|
·
|
Invested in 5G and millimeter-wave technologies with our in-process acquisition of Fiber Tower Corporation, which holds significant amounts of spectrum in the millimeter wave bands (28 GHz and 39 GHz) that the FCC recently reallocated for mobile broadband services. These bands will help to accelerate our entry into 5G services.
|
·
|
February issuance of $1,250 of 3.200% global notes due 2022.
|
·
|
February issuance of $750 of 3.800% global notes due 2024.
|
·
|
February issuance of $2,000 of 4.250% global notes due 2027.
|
·
|
February issuance of $3,000 of 5.250% global notes due 2037.
|
·
|
February issuance of $2,000 of 5.450% global notes due 2047.
|
·
|
February issuance of $1,000 of 5.700% global notes due 2057.
|
·
|
March issuance of $1,430 of 5.500% global notes due 2047.
|
·
|
March issuance of $800 floating rate global notes due 2020. The floating rate for the notes is based upon the three-month London Interbank Offered Rate (LIBOR), reset quarterly, plus 65 basis points.
|
·
|
March draw of $300 on a private financing agreement with Banco Nacional de Mexico, S.A. due March 2019. The agreement contains terms similar to that provided under our syndicated credit arrangements; the interest rate is a market rate.
|
·
|
$1,142 of 2.400% global notes due 2017.
|
·
|
$1,000 of 1.600% global notes due 2017.
|
·
|
$500 of floating rate notes due 2017.
|
·
|
$1,000 of annual put reset securities issued by BellSouth that may be put back to us each April until maturity in 2021. No such put was exercised during April 2017.
|
·
|
An accreting zero-coupon note that may be redeemed each May until maturity in 2022. If the zero-coupon note (issued for principal of $500 in 2007) is held to maturity, the redemption amount will be $1,030.
|
·
|
Adverse economic and/or capital access changes in the markets served by us or in countries in which we have significant investments, including the impact on customer demand and our ability and our suppliers' ability to access financial markets at favorable rates and terms.
|
·
|
Changes in available technology and the effects of such changes, including product substitutions and deployment costs.
|
·
|
Increases in our benefit plans' costs, including increases due to adverse changes in the United States and foreign securities markets, resulting in worse-than-assumed investment returns and discount rates; adverse changes in mortality assumptions; adverse medical cost trends; and unfavorable or delayed implementation or repeal of healthcare legislation, regulations or related court decisions.
|
·
|
The final outcome of FCC and other federal, state or foreign government agency proceedings (including judicial review, if any, of such proceedings) involving issues that are important to our business, including, without limitation, special access and business data services; intercarrier compensation; interconnection obligations; pending Notices of Apparent Liability; the transition from legacy technologies to IP-based infrastructure, including the withdrawal of legacy TDM-based services; universal service; broadband deployment; E911 services; competition policy; privacy; net neutrality, including the FCC's order classifying broadband as Title II services subject to much more comprehensive regulation; unbundled network elements and other wholesale obligations; multi-channel video programming distributor services and equipment; availability of new spectrum, on fair and balanced terms; and wireless and satellite license awards and renewals.
|
·
|
The final outcome of state and federal legislative efforts involving issues that are important to our business, including deregulation of IP-based services, relief from Carrier of Last Resort obligations and elimination of state commission review of the withdrawal of services.
|
·
|
Enactment of additional state, local, federal and/or foreign regulatory and tax laws and regulations, or changes to existing standards and actions by tax agencies and judicial authorities including the resolution of disputes with any taxing jurisdictions, pertaining to our subsidiaries and foreign investments, including laws and regulations that reduce our incentive to invest in our networks, resulting in lower revenue growth and/or higher operating costs.
|
·
|
Our ability to absorb revenue losses caused by increasing competition, including offerings that use alternative technologies or delivery methods (e.g., cable, wireless, VoIP and over-the-top video service), subscriber reluctance to purchase new wireless handsets, and our ability to maintain capital expenditures.
|
·
|
The extent of competition including from governmental networks and other providers and the resulting pressure on customer and access line totals and segment operating margins.
|
·
|
Our ability to develop attractive and profitable product/service offerings to offset increasing competition.
|
·
|
The ability of our competitors to offer product/service offerings at lower prices due to lower cost structures and regulatory and legislative actions adverse to us, including state regulatory proceedings relating to unbundled network elements and non-regulation of comparable alternative technologies (e.g., VoIP).
|
·
|
The continued development and delivery of attractive and profitable video offerings through satellite and IP-based networks; the extent to which regulatory and build-out requirements apply to our offerings; and the availability, cost and/or reliability of the various technologies and/or content required to provide such offerings.
|
·
|
Our continued ability to maintain margins, attract and offer a diverse portfolio of wireless service and devices and device financing plans.
|
·
|
The availability and cost of additional wireless spectrum and regulations and conditions relating to spectrum use, licensing, obtaining additional spectrum, technical standards and deployment and usage, including network management rules.
|
·
|
Our ability to manage growth in wireless video and data services, including network quality and acquisition of adequate spectrum at reasonable costs and terms.
|
·
|
The outcome of pending, threatened or potential litigation (which includes arbitrations), including, without limitation, patent and product safety claims by or against third parties.
|
·
|
The impact from major equipment failures on our networks, including satellites operated by DIRECTV; the effect of security breaches related to the network or customer information; our inability to obtain handsets, equipment/software or have handsets, equipment/software serviced in a timely and cost-effective manner from suppliers; and in the case of satellites launched, timely provisioning of services from vendors; or severe weather conditions, natural disasters, pandemics, energy shortages, wars or terrorist attacks.
|
·
|
The issuance by the Financial Accounting Standards Board or other accounting oversight bodies of new accounting standards or changes to existing standards.
|
·
|
Our ability to integrate our acquisition of DIRECTV.
|
·
|
Our ability to close our pending acquisition of Time Warner Inc. and successfully integrate its operations.
|
·
|
Our ability to adequately fund our wireless operations, including payment for additional spectrum, network upgrades and technological advancements.
|
·
|
Our increased exposure to video competition and foreign economies due to our recent acquisitions of DIRECTV and Mexican wireless properties, including foreign exchange fluctuations as well as regulatory and political uncertainty.
|
·
|
Changes in our corporate strategies, such as changing network-related requirements or acquisitions and dispositions, which may require significant amounts of cash or stock, to respond to competition and regulatory, legislative and technological developments.
|
·
|
The uncertainty surrounding further congressional action to address spending reductions, which may result in a significant decrease in government spending and reluctance of businesses and consumers to spend in general.
|
·
|
The uncertainty and impact of anticipated regulatory and corporate tax reform, which may impact the overall economy and incentives for business investments.
|
10-a
|
Stock Purchase and Deferral Plan
|
10-b
|
Cash Deferral Plan
|
12
|
Computation of Ratios of Earnings to Fixed Charges
|
31
|
Rule 13a-14(a)/15d-14(a) Certifications
31.1
Certification of Principal Executive Officer
31.2
Certification of Principal Financial Officer
|
32
|
Section 1350 Certifications
|
101
|
XBRL Instance Document
|
May 4, 2017
|
|
AT&T Inc.
/s/ John J. Stephens
John J. Stephens
Senior Executive Vice President
and Chief Financial Officer
|
(a)
|
base salary;
|
Net Credited Service
|
Age
|
10 years or more
|
65 or older
|
20 years or more
|
55 or older
|
25 years or more
|
50 or older
|
30 years or more
|
Any age
|
6.1 |
Distributions of Share Units.
|
6.6 |
Distribution Process.
|
7.1 |
Stockholder Approval
|
(i)
|
two (2) Options for each Share Unit acquired by the Participant as part of such Share Deferral Account during the immediately preceding June through the remainder of the relevant Plan Year with Employee Contributions of Base Compensation and/or Short Term Incentive Award; and
|
9.3 |
Amendment
.
|
10.7 |
Captions
.
|
(i)
|
an "Employer Business" shall mean AT&T Inc. and any of its Subsidiaries, or any business in which they or any affiliate of theirs has a substantial ownership or joint venture interest;
|
(ii)
|
"engaging in competition with AT&T" shall mean, while employed by AT&T or any of its Subsidiaries, or within two (2) years after Participant's Termination of Employment, engaging by the Participant in any business or activity in all or any portion of the same geographical market where the same or substantially similar business or activity is being carried on by an Employer Business. "Engaging in competition with AT&T" shall not include owning a non-substantial publicly traded interest as a shareholder in a business that competes with an Employer Business. "Engaging in competition with AT&T" shall include representing or providing consulting services to, or being an employee of, any person or entity that is engaged in competition with any Employer Business or that takes a position adverse to any Employer Business.
|
(iii)
|
"engaging in conduct disloyal to AT&T" means, while employed by AT&T or any of its Subsidiaries, or within two (2) years after Participant's Termination of Employment, (i) soliciting for employment or hire, whether as an employee or as an independent contractor, for any business in competition with an Employer Business, any person employed by AT&T or any of its Subsidiaries during the one (1) year prior to the Participant's Termination of Employment, whether or not acceptance of such position would constitute a breach of such person's contractual obligations to AT&T or any of its Subsidiaries; (ii) soliciting, encouraging, or inducing any vendor or supplier with which Participant had business contact on behalf of any Employer Business during the two (2) years prior to the Participant's Termination of Employment (regardless of the reason for that termination) to terminate, discontinue, renegotiate, reduce, or otherwise cease or modify its relationship with AT&T or any of its Subsidiaries; or (iii) soliciting, encouraging, or inducing any customer or active prospective customer with whom Participant had business contact, whether in person or by other media ("Customer"), on behalf of any Employer Business during the two (2) years prior to the Participant's Termination of Employment (regardless of the reason for that
|
|
|
(iv)
|
"Confidential Information" shall mean all information belonging to, or otherwise relating to, an Employer Business, which is not generally known, regardless of the manner in which it is stored or conveyed to Participant, and which the Employer Business has taken reasonable measures under the circumstances to protect from unauthorized use or disclosure. Confidential Information includes trade secrets as well as other proprietary knowledge, information, know-how, and non-public intellectual property rights, including unpublished or pending patent applications and all related patent rights, formulae, processes, discoveries, improvements, ideas, conceptions, compilations of data, and data, whether or not patentable or copyrightable and whether or not it has been conceived, originated, discovered, or developed in whole or in part by Participant. For example, Confidential Information includes, but is not limited to, information concerning the Employer Business' business plans, budgets, operations, products, strategies, marketing, sales, inventions, designs, costs, legal strategies, finances, employees, customers, prospective customers, licensees, or licensors; information received from third parties under confidential conditions; or other valuable financial, commercial, business, technical or marketing information concerning the Employer Business, or any of the products or services made, developed or sold by the Employer Business. Confidential Information does not include information that (i) was generally known to the public at the time of disclosure; (ii) was lawfully received by Participant from a third party; (iii) was known to Participant prior to receipt from the Employer Business; or (iv) was independently developed by Participant or independent third parties; in each of the foregoing circumstances, this exception applies only if such public knowledge or possession by an independent third party was without breach by Participant or any third party of any obligation of confidentiality or non-use, including but not limited to the obligations and restrictions set forth in this Plan.
|
(i)
|
ERISA shall control all issues and controversies hereunder, and the Committee shall serve for purposes hereof as a "fiduciary" of the Plan and its "named fiduciary" within the meaning of ERISA.
|
(ii)
|
All litigation between the parties relating to this section shall occur in federal court, which shall have exclusive jurisdiction; any such litigation shall be held in the United States District Court for the Northern District of Texas, and the only remedies available with respect to the Plan shall be those provided under ERISA.
|
Net Credited Service
|
Age
|
10 years or more
|
65 or older
|
20 years or more
|
55 or older
|
25 years or more
|
50 or older
|
30 years or more
|
Any age
|
(i)
|
an "Employer Business" shall mean AT&T Inc. and any of its Subsidiaries, or any business in which they or any affiliate of theirs has a substantial ownership or joint venture interest;
|
(ii)
|
"engaging in competition with AT&T" shall mean, while employed by AT&T or any of its Subsidiaries, or within two (2) years after Participant's Termination of Employment, engaging by the Participant in any business or activity in all or any portion of the same geographical market where the same or substantially similar business or activity is being carried on by an Employer Business. "Engaging in competition with AT&T" shall not include owning a non-substantial publicly traded interest as a shareholder in a business that competes with an Employer Business. "Engaging in competition with AT&T" shall include representing or providing consulting services to, or being an employee of, any person or entity that is engaged in competition with any Employer Business or that takes a position adverse to any Employer Business.
|
(iii)
|
"engaging in conduct disloyal to AT&T" means, while employed by AT&T or any of its Subsidiaries, or within two (2) years after Participant's Termination of Employment, (i) soliciting for employment or hire, whether as an employee or as an independent contractor, for any business in competition with an Employer Business, any person employed by AT&T or any of its Subsidiaries during the one (1) year prior to the Participant's Termination of Employment, whether or not acceptance of such position would constitute a breach of such person's contractual obligations to AT&T or any of its Subsidiaries; (ii) soliciting, encouraging, or inducing any vendor or supplier with which Participant had business contact on behalf of any Employer Business during the two (2) years prior to the Participant's Termination of Employment (regardless of the reason for that termination) to terminate, discontinue, renegotiate, reduce, or otherwise cease or modify its relationship with AT&T or any of its Subsidiaries; or (iii) soliciting, encouraging, or inducing any customer or active prospective customer with whom Participant had business contact, whether in person or by other media ("Customer"), on behalf of any Employer Business during the two (2) years prior to the Participant's Termination of Employment (regardless of the reason for that termination), to terminate, discontinue, renegotiate, reduce, or otherwise cease or modify its relationship with any Employer Business, or to purchase competing goods or services from a business competing with any Employer Business, or accepting or servicing business from such Customer on behalf of himself or any other business. "Engaging in conduct disloyal to AT&T" shall also mean, disclosing Confidential Information to any third party or using Confidential Information, other than for an Employer Business, or failing to return any Confidential Information to the Employer Business following termination of employment.
|
(iv)
|
"Confidential Information" shall mean all information belonging to, or otherwise relating to, an Employer Business, which is not generally known, regardless of the manner in which it is stored or conveyed to Participant, and which the Employer Business has taken reasonable measures under the circumstances to protect from unauthorized use or disclosure. Confidential
|
(i)
|
ERISA shall control all issues and controversies hereunder, and the Committee shall serve for purposes hereof as a "fiduciary" of the Plan and its "named fiduciary" within the meaning of ERISA.
|
(ii)
|
All litigation between the parties relating to this section shall occur in federal court, which shall have exclusive jurisdiction; any such litigation shall be held in the United States District Court for the Northern District of Texas, and the only remedies available with respect to the Plan shall be those provided under ERISA.
|
EXHIBIT 12
|
||||||||||||||||||||||
AT&T INC.
|
||||||||||||||||||||||
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
|
||||||||||||||||||||||
Dollars in Millions
|
||||||||||||||||||||||
Three Months Ended
|
||||||||||||||||||||||
March 31,
|
Year Ended December 31,
|
|||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||
2017
|
2016
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
Earnings:
|
||||||||||||||||||||||
Income from continuing operations before income taxes
|
$
|
5,378
|
$
|
6,007
|
$
|
19,812
|
$
|
20,692
|
$
|
10,355
|
$
|
28,050
|
$
|
10,496
|
||||||||
Equity in net income of affiliates included above
|
173
|
(13)
|
(98)
|
(79)
|
(175)
|
(642)
|
(752)
|
|||||||||||||||
Fixed charges
|
1,906
|
1,799
|
7,296
|
6,592
|
5,295
|
5,452
|
4,876
|
|||||||||||||||
Distributed income of equity affiliates
|
8
|
8
|
61
|
30
|
148
|
318
|
137
|
|||||||||||||||
Interest capitalized
|
(231)
|
(218)
|
(892)
|
(797)
|
(234)
|
(284)
|
(263)
|
|||||||||||||||
Earnings, as adjusted
|
$
|
7,234
|
$
|
7,583
|
$
|
26,179
|
$
|
26,438
|
$
|
15,389
|
$
|
32,894
|
$
|
14,494
|
||||||||
Fixed Charges:
|
||||||||||||||||||||||
Interest expense
|
$
|
1,293
|
$
|
1,207
|
$
|
4,910
|
$
|
4,120
|
$
|
3,613
|
$
|
3,940
|
$
|
3,444
|
||||||||
Interest capitalized
|
231
|
218
|
892
|
797
|
234
|
284
|
263
|
|||||||||||||||
Portion of rental expense representative of interest factor
|
382
|
374
|
1,494
|
1,675
|
1,448
|
1,228
|
1,169
|
|||||||||||||||
Fixed Charges
|
$
|
1,906
|
$
|
1,799
|
$
|
7,296
|
$
|
6,592
|
$
|
5,295
|
$
|
5,452
|
$
|
4,876
|
||||||||
Ratio of Earnings to Fixed Charges
|
3.80
|
4.22
|
3.59
|
4.01
|
2.91
|
6.03
|
2.97
|
1.
|
I have reviewed this report on Form 10-Q of AT&T Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this report on Form 10-Q of AT&T Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
May 4, 2017 | May 4, 2017 |
By:
/s/ Randall Stephenson
Randall Stephenson
Chairman of the Board, Chief Executive Officer
and President
|
By:
/s/ John J. Stephens
John J. Stephens
Senior Executive Vice President
and Chief Financial Officer
|