(Mark One)
☒
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
or
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Large accelerated filer
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[X]
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Accelerated filer
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[ ]
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Non-accelerated filer
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[ ]
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Smaller reporting company
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[ ]
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Emerging growth company
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[ ]
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Name of each exchange
|
||
Title
of each class
|
Trading
Symbol(s)
|
on
which registered
|
Common Shares (Par Value $1.00 Per Share)
|
T
|
New York Stock Exchange
|
Floating Rate AT&T Inc.
|
T 19B
|
New York Stock Exchange
|
Global Notes due June 4, 2019
|
||
Floating Rate AT&T Inc.
|
T 20C
|
New York Stock Exchange
|
Global Notes due August 3, 2020
|
||
1.875% AT&T Inc.
|
T 20
|
New York Stock Exchange
|
Global Notes due December 4, 2020
|
2.65% AT&T Inc.
|
T 21B
|
New York Stock Exchange
|
Global Notes due December 17, 2021
|
||
1.45% AT&T Inc.
|
T 22B
|
New York Stock Exchange
|
Global Notes due June 1, 2022
|
||
2.50% AT&T Inc.
|
T 23
|
New York Stock Exchange
|
Global Notes due March 15, 2023
|
||
Floating Rate AT&T Inc.
|
T23 D
|
New York Stock Exchange
|
Global Notes due September 5, 2023
|
||
1.05% AT&T Inc.
|
T 23E
|
New York Stock Exchange
|
Global Notes due September 5, 2023
|
||
1.30% AT&T Inc.
|
T 23A
|
New York Stock Exchange
|
Global Notes due September 5, 2023
|
||
2.75% AT&T Inc.
|
T 23C
|
New York Stock Exchange
|
Global Notes due May 19, 2023
|
||
2.40% AT&T Inc.
|
T 24A
|
New York Stock Exchange
|
Global Notes due March 15, 2024
|
||
3.50% AT&T Inc.
|
T 25
|
New York Stock Exchange
|
Global Notes due December 17, 2025
|
||
1.80% AT&T Inc.
|
T 26D
|
New York Stock Exchange
|
Global Notes due September 5, 2026
|
Name of each exchange
|
||
Title of each class
|
Trading Symbol(s)
|
on which registered
|
2.90% AT&T Inc.
|
T 26A
|
New York Stock Exchange |
Global Notes due December 4, 2026
|
||
2.35% AT&T Inc.
|
T 29D
|
New York Stock Exchange
|
Global Notes due September 5, 2029
|
||
4.375% AT&T Inc.
|
T 29B
|
New York Stock Exchange
|
Global Notes due September 14, 2029
|
||
2.60% AT&T Inc.
|
T 29A
|
New York Stock Exchange
|
Global Notes due December 17, 2029
|
||
3.55% AT&T Inc.
|
T 32
|
New York Stock Exchange
|
Global Notes due December 17, 2032
|
||
5.20% AT&T Inc.
|
T 33
|
New York Stock Exchange
|
Global Notes due November 18, 2033
|
||
3.375% AT&T Inc.
|
T 34
|
New York Stock Exchange
|
Global Notes due March 15, 2034
|
||
2.45% AT&T Inc.
|
T 35
|
New York Stock Exchange
|
Global Notes due March 15, 2035
|
||
3.15% AT&T Inc.
|
T 36A
|
New York Stock Exchange
|
Global Notes due September 4, 2036
|
||
7.00% AT&T Inc.
|
T 40
|
New York Stock Exchange
|
Global Notes due April 30, 2040
|
||
4.25% AT&T Inc.
|
T 43
|
New York Stock Exchange
|
Global Notes due June 1, 2043
|
||
4.875% AT&T Inc.
|
T 44
|
New York Stock Exchange
|
Global Notes due June 1, 2044
|
5.35% AT&T Inc.
|
TBB
|
New York Stock Exchange
|
Global Notes due November 1, 2066
|
||
5.625% AT&T Inc.
|
TBC
|
New York Stock Exchange
|
Global Notes due August 1, 2067
|
Explanatory Note
AT&T Inc. (AT&T) is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 6, 2019 (the Original Filing) to correct the signature dates and hyperlinks related to Exhibits 31.1, 31.2 and 32 of the Original Filing.
This Amendment is limited in scope to the items identified above. This Amendment does not reflect events occurring after the filing of the Original Filing and no revisions are being made to the Company’s financial statements or disclosures pursuant to this Amendment.
Three months ended
|
|||||
March 31,
|
|||||
2019
|
2018
|
||||
Numerators
|
|||||
Numerator for basic earnings per share:
|
|||||
Net Income
|
$
|
4,348
|
$
|
4,759
|
|
Less: Net income attributable to noncontrolling interest
|
(252)
|
(97)
|
|||
Net Income attributable to AT&T
|
4,096
|
4,662
|
|||
Dilutive potential common shares:
|
|||||
Share-based payment
|
6
|
5
|
|||
Numerator for diluted earnings per share
|
$
|
4,102
|
$
|
4,667
|
|
Denominators (000,000)
|
|||||
Denominator for basic earnings per share:
|
|||||
Weighted average number of common shares outstanding
|
7,313
|
6,161
|
|||
Dilutive potential common shares:
|
|||||
Share-based payment (in shares)
|
29
|
19
|
|||
Denominator for diluted earnings per share
|
7,342
|
6,180
|
|||
Basic earnings per share attributable to AT&T
|
$
|
0.56
|
$
|
0.75
|
|
Diluted earnings per share attributable to AT&T
|
$
|
0.56
|
$
|
0.75
|
Foreign Currency Translation Adjustment
|
Net Unrealized Gains (Losses) on Securities
|
Net Unrealized Gains (Losses) on Derivative Instruments
|
Defined Benefit Postretirement Plans
|
Accumulated Other Comprehensive Income
|
|||||||||||
Balance as of December 31, 2018
|
$
|
(3,084)
|
$
|
(2)
|
$
|
818
|
$
|
6,517
|
$
|
4,249
|
|||||
Other comprehensive income
(loss) before reclassifications
|
288
|
16
|
127
|
-
|
431
|
||||||||||
Amounts reclassified
from accumulated OCI
|
-
|
-
|
11
|
1
|
(346)
|
2
|
(335)
|
||||||||
Net other comprehensive
income (loss)
|
288
|
16
|
138
|
(346)
|
96
|
||||||||||
Balance as of March 31, 2019
|
$
|
(2,796)
|
$
|
14
|
$
|
956
|
$
|
6,171
|
$
|
4,345
|
|||||
Foreign Currency Translation Adjustment
|
Net Unrealized Gains (Losses) on Securities
|
Net Unrealized Gains (Losses) on Derivative Instruments
|
Defined Benefit Postretirement Plans
|
Accumulated Other Comprehensive Income
|
|||||||||||
Balance as of December 31, 2017
|
$
|
(2,054)
|
$
|
660
|
$
|
1,402
|
$
|
7,009
|
$
|
7,017
|
|||||
Other comprehensive income
(loss) before reclassifications
|
106
|
(12)
|
674
|
567
|
1,335
|
||||||||||
Amounts reclassified
from accumulated OCI
|
-
|
-
|
12
|
1
|
(323)
|
2
|
(311)
|
||||||||
Net other comprehensive
income (loss)
|
106
|
(12)
|
686
|
244
|
1,024
|
||||||||||
Amounts reclassified to
retained earnings
|
-
|
(655)
|
3
|
-
|
-
|
(655)
|
|||||||||
Balance as of March 31, 2018
|
$
|
(1,948)
|
$
|
(7)
|
$
|
2,088
|
$
|
7,253
|
$
|
7,386
|
|||||
1
|
(Gains) losses are included in Interest expense in the consolidated statements of income (see Note 7).
|
||||||||||||||
2
|
The amortization of prior service credits associated with postretirement benefits are included in Other income
(expense) in the
|
||||||||||||||
consolidated statements of income (see Note 6).
|
|||||||||||||||
3
|
With the adoption of ASU 2016-01, the unrealized (gains) losses on our equity investments are reclassified to
retained earnings.
|
● |
Mobility
provides nationwide wireless service and equipment.
|
● |
Entertainment Group
provides video, including over-the-top (OTT) services, broadband and voice communications services primarily to residential customers. This segment also sells advertising on DIRECTV and U-verse distribution platforms.
|
● |
Business Wireline
provides advanced IP-based services, as well as traditional voice and data services to business customers.
|
● |
Turner
is comprised of
the historic Turner division as well as the financial results of our RSNs. This business unit primarily operates multichannel basic television networks and digital properties. Turner also sells advertising on its networks and
digital properties.
|
● |
Home Box Office
consists of premium pay television and OTT services domestically and premium pay, basic tier television and OTT services internationally, as well as content licensing and home entertainment.
|
● |
Warner Bros.
consists
of the production, distribution and licensing of television programming and feature films, the distribution of home entertainment products and the production and distribution of games.
|
● |
Vrio
provides video
services primarily to residential customers using satellite technology in Latin America and the Caribbean.
|
● |
Mexico
provides
wireless service and equipment to customers in Mexico.
|
● |
Corporate
, which
consists of: (1) businesses no longer integral to our operations or which we no longer actively market, (2) corporate support functions, (3) impacts of corporate-wide decisions for which the individual operating segments are not
being evaluated, (4) the reclassification of the amortization of prior service credits, which we continue to report with segment operating expenses, to consolidated other income (expense)-net and (5) the recharacterization of $150
of programming intangible asset amortization, for released programming acquired in the Time Warner acquisition, which we continue to report within WarnerMedia segment operating expense, to consolidated amortization expense.
|
● |
Acquisition-related items
which consists of items associated with the merger and integration of acquired businesses, including amortization of intangible assets.
|
● |
Certain significant items
includes (1) employee separation charges associated with voluntary and/or strategic offers, (2) losses resulting from abandonment or impairment of assets and (3) other items for which the segments are not being evaluated.
|
● |
Eliminations and
consolidations
, which (1) removes transactions involving dealings between our segments, including content licensing between WarnerMedia and Communications, and (2) includes adjustments for our reporting of the advertising
business.
|
AT&T INC.
MARCH 31, 2019
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Dollars in millions except per share amounts
For the three months ended 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
|
||||||||||||||||||||
Turner
|
112
|
74
|
38
|
1
|
37
|
27
|
64
|
|||||||||||||
Home Box Office
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||
Warner Bros.
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||
Other
|
-
|
8
|
(8)
|
-
|
(8)
|
(17)
|
(25)
|
|||||||||||||
Total 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
|
Three months ended
March 31,
|
|||||
2019
|
2018
|
||||
Communications
|
$
|
8,052
|
$
|
8,027
|
|
WarnerMedia
|
2,310
|
39
|
|||
Latin America
|
(173)
|
(111)
|
|||
Xandr
|
253
|
286
|
|||
Segment Contribution
|
10,442
|
8,241
|
|||
Reconciling Items:
|
|||||
Corporate and Other
|
(473)
|
(425)
|
|||
Merger and integration items
|
(115)
|
(67)
|
|||
Amortization of intangibles acquired
|
(1,988)
|
(1,062)
|
|||
Employee separation charges
|
(248)
|
(51)
|
|||
Natural disaster items
|
-
|
(104)
|
|||
Foreign currency devaluation
|
-
|
(25)
|
|||
Segment equity in net income of affiliates
|
(67)
|
(8)
|
|||
Eliminations and consolidations
|
(318)
|
(298)
|
|||
AT&T Operating Income
|
7,233
|
6,201
|
|||
Interest Expense
|
2,141
|
1,771
|
|||
Equity in net income (loss) of affiliates
|
(7)
|
9
|
|||
Other income (expense) - net
|
286
|
1,702
|
|||
Income Before Income Taxes
|
$
|
5,371
|
$
|
6,141
|
Intersegment Reconciliation
|
|||||
Three months ended
March 31,
|
|||||
2019
|
2018
|
||||
Intersegment revenues
|
|||||
Communications
|
$
|
-
|
$
|
-
|
|
WarnerMedia
|
858
|
31
|
|||
Latin America
|
-
|
-
|
|||
Xandr
|
-
|
-
|
|||
Total Intersegment Revenues
|
858
|
31
|
|||
Consolidations
|
398
|
271
|
|||
Eliminations and consolidations
|
$
|
1,256
|
$
|
302
|
Revenue Categories
|
||||||||||||||||||||||||||
The following tables set forth reported revenue by category:
|
||||||||||||||||||||||||||
For the three months ended March 31, 2019
|
||||||||||||||||||||||||||
Service Revenues
|
||||||||||||||||||||||||||
Wireless
|
Advanced Data
|
Legacy Voice & Data
|
Subscription
|
Content
|
Advertising
|
Other
|
Equipment
|
Total
|
||||||||||||||||||
Communications
|
||||||||||||||||||||||||||
Mobility
|
$
|
13,725
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
67
|
$
|
-
|
$
|
3,775
|
$
|
17,567
|
||||||||
Entertainment Group
|
-
|
2,070
|
683
|
7,724
|
-
|
350
|
501
|
-
|
11,328
|
|||||||||||||||||
Business Wireline
|
-
|
3,186
|
2,404
|
-
|
-
|
-
|
749
|
159
|
6,498
|
|||||||||||||||||
WarnerMedia
|
||||||||||||||||||||||||||
Turner
|
-
|
-
|
-
|
1,965
|
135
|
1,261
|
82
|
-
|
3,443
|
|||||||||||||||||
Home Box Office
|
-
|
-
|
-
|
1,334
|
173
|
-
|
3
|
-
|
1,510
|
|||||||||||||||||
Warner Bros.
|
-
|
-
|
-
|
21
|
3,332
|
10
|
155
|
-
|
3,518
|
|||||||||||||||||
Eliminations and Other
|
-
|
-
|
-
|
49
|
(152)
|
8
|
3
|
-
|
(92)
|
|||||||||||||||||
Latin America
|
||||||||||||||||||||||||||
Vrio
|
-
|
-
|
-
|
1,067
|
-
|
-
|
-
|
-
|
1,067
|
|||||||||||||||||
Mexico
|
442
|
-
|
-
|
-
|
-
|
-
|
-
|
209
|
651
|
|||||||||||||||||
Xandr
|
-
|
-
|
-
|
-
|
-
|
426
|
-
|
-
|
426
|
|||||||||||||||||
Corporate and Other
|
-
|
-
|
-
|
-
|
-
|
-
|
167
|
-
|
167
|
|||||||||||||||||
Eliminations and
consolidations
|
-
|
-
|
-
|
-
|
(837)
|
(350)
|
(69)
|
-
|
(1,256)
|
|||||||||||||||||
Total Operating Revenues
|
$
|
14,167
|
$
|
5,256
|
$
|
3,087
|
$
|
12,160
|
$
|
2,651
|
$
|
1,772
|
$
|
1,591
|
$
|
4,143
|
$
|
44,827
|
March 31,
|
December 31,
|
|||||
2019
|
2018
|
|||||
Contract asset
|
$
|
2,198
|
$
|
1,896
|
||
Contract liability
|
6,899
|
6,856
|
|
Three months ended
|
||||
March 31,
|
|||||
2019
|
2018
|
||||
Pension cost:
|
|||||
Service cost – benefits earned during the period
|
$
|
240
|
$
|
291
|
|
Interest cost on projected benefit obligation
|
549
|
487
|
|||
Expected return on assets
|
(851)
|
(760)
|
|||
Amortization of prior service credit
|
(33)
|
(30)
|
|||
Actuarial (gain) loss
|
432
|
-
|
|||
Net pension (credit) cost
|
$
|
337
|
$
|
(12)
|
|
Postretirement cost:
|
|||||
Service cost – benefits earned during the period
|
$
|
18
|
$
|
29
|
|
Interest cost on accumulated postretirement benefit obligation
|
186
|
191
|
|||
Expected return on assets
|
(56)
|
(77)
|
|||
Amortization of prior service credit
|
(426)
|
(397)
|
|||
Actuarial (gain) loss
|
-
|
(930)
|
|||
Net postretirement (credit) cost
|
$
|
(278)
|
$
|
(1,184)
|
|
Combined net pension and postretirement (credit) cost
|
$
|
59
|
$
|
(1,196)
|
March 31, 2019
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||
Equity Securities
|
||||||||||||
Domestic equities
|
$
|
1,092
|
$
|
-
|
$
|
-
|
$
|
1,092
|
||||
International equities
|
263
|
-
|
-
|
263
|
||||||||
Fixed income equities
|
208
|
-
|
-
|
208
|
||||||||
Available-for-Sale Debt Securities
|
-
|
989
|
-
|
989
|
||||||||
Asset Derivatives
|
||||||||||||
Interest rate swaps
|
-
|
2
|
-
|
2
|
||||||||
Cross-currency swaps
|
-
|
427
|
-
|
427
|
||||||||
Foreign exchange contracts
|
-
|
87
|
-
|
87
|
||||||||
Liability Derivatives
|
||||||||||||
Interest rate swaps
|
-
|
(13)
|
-
|
(13)
|
||||||||
Cross-currency swaps
|
-
|
(2,697)
|
-
|
(2,697)
|
||||||||
Foreign exchange contracts
|
-
|
(6)
|
-
|
(6)
|
December 31, 2018
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||
Equity Securities
|
||||||||||||
Domestic equities
|
$
|
1,061
|
$
|
-
|
$
|
-
|
$
|
1,061
|
||||
International equities
|
256
|
-
|
-
|
256
|
||||||||
Fixed income equities
|
172
|
-
|
-
|
172
|
||||||||
Available-for-Sale Debt Securities
|
-
|
870
|
-
|
870
|
||||||||
Asset Derivatives
|
||||||||||||
Cross-currency swaps
|
-
|
472
|
-
|
472
|
||||||||
Foreign exchange contracts
|
-
|
87
|
-
|
87
|
||||||||
Liability Derivatives
|
||||||||||||
Interest rate swaps
|
-
|
(39)
|
-
|
(39)
|
||||||||
Cross-currency swaps
|
-
|
(2,563)
|
-
|
(2,563)
|
||||||||
Foreign exchange contracts
|
-
|
(2)
|
-
|
(2)
|
Three months ended
|
|||||
March 31,
|
|||||
2019
|
2018
|
||||
Total gains (losses) recognized on equity securities
|
$
|
160
|
$
|
(13)
|
|
Gains (Losses) recognized on equity securities sold
|
86
|
52
|
|||
Unrealized gains (losses) recognized on equity securities held at end of period
|
74
|
(65)
|
March 31,
|
December 31,
|
||||
2019
|
2018
|
||||
Interest rate swaps
|
$
|
1,633
|
$
|
3,483
|
|
Cross-currency swaps
|
42,192
|
42,192
|
|||
Foreign exchange contracts
|
1,238
|
2,094
|
|||
Total
|
$
|
45,063
|
$
|
47,769
|
Three months ended
|
|||||
March 31,
|
|||||
Cash Flow Hedging Relationships
|
2019
|
2018
|
|||
Cross-currency swaps:
|
|||||
Gain (Loss) recognized in accumulated OCI
|
$
|
168
|
$
|
854
|
|
Foreign exchange contracts:
|
|||||
Gain (Loss) recognized in accumulated OCI
|
(7)
|
-
|
|||
Other income (expense) - net reclassified from
accumulated OCI into income
|
3
|
-
|
|||
Interest rate locks:
|
|||||
Interest income (expense) reclassified from
accumulated OCI into income
|
(16)
|
(15)
|
Assets acquired
|
|||
Cash
|
$
|
1,889
|
|
Accounts receivable
|
9,052
|
||
All other current assets
|
2,913
|
||
Noncurrent inventory and theatrical film and television production costs
|
5,591
|
||
Property, plant and equipment
|
4,785
|
||
Intangible assets subject to amortization
|
|||
Distribution network
|
18,040
|
||
Released television and film content
|
10,806
|
||
Trademarks and trade names
|
18,081
|
||
Other
|
10,300
|
||
Investments and other assets
|
9,449
|
||
Goodwill
|
38,569
|
||
Total assets acquired
|
129,475
|
||
Liabilities assumed
|
|||
Current liabilities, excluding current portion of long-term debt
|
8,303
|
||
Debt maturing within one year
|
4,471
|
||
Long-term debt
|
18,394
|
||
Other noncurrent liabilities
|
18,948
|
||
Total liabilities assumed
|
50,116
|
||
Net assets acquired
|
79,359
|
||
Noncontrolling interest
|
(1)
|
||
Aggregate value of consideration paid
|
$
|
79,358
|
Three months ended
|
||||||
March 31,
|
||||||
2019
|
2018
|
|||||
Gross receivables sold
|
$
|
4,101
|
$
|
3,010
|
||
Net receivables sold
1
|
3,909
|
2,795
|
||||
Cash proceeds received
|
3,675
|
2,395
|
||||
Deferred purchase price recorded
|
309
|
519
|
||||
Guarantee obligation recorded
|
138
|
123
|
||||
1
|
Receivables net of allowance, imputed interest and trade-in right guarantees.
|
Three months ended
|
||||||
March 31,
|
||||||
2019
|
2018
|
|||||
Fair value of repurchased receivables
|
$
|
423
|
$
|
-
|
||
Carrying value of deferred purchase price
|
407
|
-
|
||||
Gain (loss) on repurchases
1
|
$
|
16
|
$
|
-
|
||
1
|
These gains (losses) are included in “Selling, general and administrative” in the consolidated statements of
income.
|
Three months ended
|
||
March 31, 2019
|
||
Operating lease cost
|
$
|
1,242
|
Finance lease cost:
|
||
Amortization of right-of-use assets
|
$
|
66
|
Interest on lease obligation
|
42
|
|
Total finance lease cost
|
$
|
108
|
At March 31, 2019
|
|||
Operating Leases
|
|||
Operating lease right-of-use assets
|
$
|
20,235
|
|
Accounts payable and accrued liabilities
|
$
|
3,072
|
|
Operating lease obligation
|
18,253
|
||
Total operating lease obligation
|
$
|
21,325
|
|
Finance Leases
|
|||
Property, plant and equipment, at cost
|
$
|
3,377
|
|
Accumulated depreciation and amortization
|
(1,173)
|
||
Property, plant and equipment, net
|
$
|
2,204
|
|
Current portion of long-term debt
|
$
|
135
|
|
Long-term debt
|
1,852
|
||
Total finance lease obligation
|
$
|
1,987
|
|
Weighted-Average Remaining Lease Term
|
|||
Operating leases
|
7.9
|
yrs
|
|
Finance leases
|
10.9
|
yrs
|
|
Weighted-Average Discount Rate
|
|||
Operating leases
|
4.7
|
%
|
|
Finance leases
|
8.6
|
%
|
At March 31, 2019
|
Operating
|
Finance
|
|||
Leases
|
Leases
|
||||
Remainder of 2019
|
$
|
3,201
|
$
|
246
|
|
2020
|
3,981
|
290
|
|||
2021
|
3,533
|
279
|
|||
2022
|
3,231
|
263
|
|||
2023
|
2,893
|
254
|
|||
Thereafter
|
9,633
|
1,828
|
|||
Total lease payments
|
26,472
|
3,160
|
|||
Less imputed interest
|
(5,147)
|
(1,173)
|
|||
Total
|
$
|
21,325
|
$
|
1,987
|
March 31,
|
December 31,
|
|||||||||||
Cash and Cash Equivalents and Restricted Cash
|
2019
|
2018
|
2018
|
2017
|
||||||||
Cash and cash equivalents
|
$
|
6,516
|
$
|
48,872
|
$
|
5,204
|
$
|
50,498
|
||||
Restricted cash in Other current assets
|
20
|
8
|
61
|
6
|
||||||||
Restricted cash in Other Assets
|
94
|
345
|
135
|
428
|
||||||||
Cash and cash equivalents and restricted cash
|
$
|
6,630
|
$
|
49,225
|
$
|
5,400
|
$
|
50,932
|
Three months ended
|
|||||
March 31,
|
|||||
Cash Paid for Amounts Included in the Measurement of Lease Liabilities:
|
2019
|
2018
|
|||
Operating cash flows from operating leases
|
$
|
1,332
|
$
|
1,207
|
Three months ended
|
||||||
March 31,
|
||||||
Cash Paid (Received) During the Period for:
|
2019
|
2018
|
||||
Interest
|
$
|
2,507
|
$
|
2,408
|
||
Income taxes, net of refunds
|
(379)
|
(1,089)
|
First Quarter
|
|||||||
Percent
|
|||||||
2019
|
2018
|
Change
|
|||||
Operating Revenues
|
|||||||
Communications
|
$
|
35,393
|
$
|
35,533
|
(0.4)
|
%
|
|
WarnerMedia
|
8,379
|
112
|
-
|
||||
Latin America
|
1,718
|
2,025
|
(15.2)
|
||||
Xandr
|
426
|
337
|
26.4
|
||||
Corporate and other
|
167
|
333
|
(49.8)
|
||||
Eliminations and consolidation
|
(1,256)
|
(302)
|
-
|
||||
AT&T Operating Revenues
|
44,827
|
38,038
|
17.8
|
||||
Operating Contribution
|
|||||||
Communications
|
8,052
|
8,027
|
0.3
|
||||
WarnerMedia
|
2,310
|
39
|
-
|
||||
Latin America
|
(173)
|
(111)
|
(55.9)
|
||||
Xandr
|
253
|
286
|
(11.5)
|
||||
Segment Operating Contribution
|
$
|
10,442
|
$
|
8,241
|
26.7
|
%
|
|
Mobility
provides
nationwide wireless service and equipment.
|
|
Entertainment Group
provides video, including over-the-top (OTT) services, broadband and voice communications services primarily to residential customers. This segment also sells advertising on DIRECTV and U-verse distribution platforms.
|
|
Business Wireline
provides advanced IP-based services, as well as traditional voice and data services to business customers.
|
|
Turner
is comprised of
the historic Turner division as well as the financial results of our AT&T's Regional Sports Networks (RSNs). This business unit primarily operates multichannel basic television networks and digital properties. Turner also
sells advertising on its networks and digital properties.
|
|
Home Box Office
consists of premium pay television and OTT services domestically and premium pay, basic tier television and OTT services internationally, as well as content licensing and home entertainment.
|
|
Warner Bros.
consists
of the production, distribution and licensing of television programming and feature films, the distribution of home entertainment products and the production and distribution of games.
|
|
Vrio
provides video
services primarily to residential customers using satellite technology in Latin America and the Caribbean.
|
|
Mexico
provides
wireless service and equipment to customers in Mexico.
|
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
|
|||||||
Operations and support
|
30,388
|
25,843
|
17.6
|
||||
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)
|
||||
Net Income
|
4,348
|
4,759
|
(8.6)
|
||||
Net Income Attributable to AT&T
|
$
|
4,096
|
$
|
4,662
|
(12.1)
|
%
|
COMMUNICATIONS SEGMENT
|
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
|
%
|
Selected Subscribers and Connections
|
|||
First Quarter
|
|||
(000s)
|
2019
|
2018
|
|
Total domestic broadband connections
|
15,737
|
15,775
|
|
Network access lines in service
|
9,576
|
11,288
|
|
U-verse VoIP connections
|
4,935
|
5,585
|
Communications Business Unit Discussion
|
|||||||
Mobility Results
|
|||||||
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
|
%
|
First Quarter
|
Percent
|
|||||||
(in 000s)
|
2019
|
2018
|
Change
|
|||||
Wireless Subscribers
|
||||||||
Postpaid smartphones
|
60,597
|
60,002
|
1.0
|
%
|
||||
Postpaid feature phones and data-centric devices
|
15,953
|
17,429
|
(8.5)
|
|||||
Postpaid
|
76,550
|
77,431
|
(1.1)
|
|||||
Prepaid
|
17,180
|
15,671
|
9.6
|
|||||
Reseller
|
7,574
|
9,002
|
(15.9)
|
|||||
Connected devices
1
|
54,428
|
41,728
|
30.4
|
|||||
Total Wireless Subscribers
|
155,732
|
143,832
|
8.3
|
|||||
Wireless Net Additions
2
|
||||||||
Postpaid
|
(204)
|
49
|
-
|
|||||
Prepaid
|
96
|
241
|
(60.2)
|
|||||
Reseller
|
(253)
|
(388)
|
34.8
|
|||||
Connected devices
1
|
3,088
|
2,728
|
13.2
|
|||||
Wireless Net Subscriber Additions
|
2,727
|
2,630
|
3.7
|
|||||
Postpaid Phone Subscribers
|
63,438
|
63,657
|
(0.3)
|
|||||
Postpaid Phone Net Additions
|
80
|
(60)
|
-
|
%
|
||||
Postpaid Churn
3
|
1.17
|
1.06
|
11
|
BP
|
||||
Postpaid Phone-Only Churn
3
|
0.93
|
0.84
|
9
|
BP
|
||||
1
|
Includes data-centric devices such as session-based tablets, monitoring devices and primarily wholesale automobile
systems. Excludes
|
|||||||
postpaid tablets.
|
||||||||
2
|
Excludes acquisition-related additions during the period.
|
|||||||
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.
|
Entertainment Group Results
|
|||||||
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
|
%
|
First Quarter
|
Percent
Change
|
||||||
(in 000s)
|
2019
|
2018
|
|||||
Video Connections
|
|||||||
Premium TV
1
|
22,359
|
23,902
|
(6.5)
|
%
|
|||
DIRECTV NOW
2
|
1,508
|
1,467
|
2.8
|
||||
Total Video Connections
|
23,867
|
25,369
|
(5.9)
|
||||
Broadband Connections
|
|||||||
IP
1
|
13,822
|
13,616
|
1.5
|
||||
DSL
|
632
|
816
|
(22.5)
|
||||
Total Broadband Connections
|
14,454
|
14,432
|
0.2
|
||||
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)
|
||||
Video Net Additions
|
|||||||
Premium TV
1, 3
|
(544)
|
(187)
|
-
|
||||
DIRECTV NOW
2
|
(83)
|
312
|
-
|
||||
Net Video Additions
|
(627)
|
125
|
-
|
||||
Broadband Net Additions
|
|||||||
IP
1
|
93
|
154
|
(39.6)
|
||||
DSL
|
(48)
|
(72)
|
33.3
|
||||
Net Broadband Additions
|
45
|
82
|
(45.1)
|
||||
Fiber Broadband Connections (included in IP)
|
3,060
|
1,955
|
56.5
|
||||
Fiber Broadband Net Additions (included in IP)
|
297
|
226
|
31.4
|
%
|
|||
1
|
2019 includes the impact of aligning our subscriber billing practice with the industry and AT&T Mobility to
extend customer business
|
||||||
disconnection period to the end of the billing cycle, resulting in an increase of 117 net video and 38 net
broadband subscribers at March
|
|||||||
31, 2019.
|
|||||||
2
|
Consistent with industry practice, DIRECTV NOW includes connections that are on a free-trial.
|
||||||
3
|
Includes disconnections for customers that migrated to DIRECTV NOW.
|
Business Wireline Results
|
|||||||
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)
|
%
|
WARNERMEDIA SEGMENT
|
First Quarter
|
||||||
Percent
|
|||||||
2019
|
2018
|
Change
|
|||||
Segment Operating Revenues
|
|||||||
Turner
|
$
|
3,443
|
$
|
112
|
-
|
%
|
|
Home Box Office
|
1,510
|
-
|
-
|
||||
Warner Bros.
|
3,518
|
-
|
-
|
||||
Eliminations & Other
|
(92)
|
-
|
-
|
||||
Total Segment Operating Revenues
|
8,379
|
112
|
-
|
||||
Segment Operating Contribution
|
|||||||
Turner
|
1,272
|
64
|
-
|
||||
Home Box Office
|
582
|
-
|
-
|
||||
Warner Bros.
|
553
|
-
|
-
|
||||
Eliminations & Other
|
(97)
|
(25)
|
-
|
||||
Total Segment Operating Contribution
|
$
|
2,310
|
$
|
39
|
-
|
%
|
WarnerMedia Business Unit Discussion
|
|||||||
Turner Results
|
|||||||
First Quarter
|
|||||||
Percent
|
|||||||
2019
|
2018
|
Change
|
|||||
Operating revenues
|
|||||||
Subscription
|
$
|
1,965
|
$
|
98
|
-
|
%
|
|
Advertising
|
1,261
|
14
|
-
|
||||
Content and other
|
217
|
-
|
-
|
||||
Total Operating Revenues
|
3,443
|
112
|
-
|
||||
Operating expenses
|
|||||||
Operations and support
|
2,136
|
74
|
-
|
||||
Depreciation and amortization
|
60
|
1
|
-
|
||||
Total Operating Expenses
|
2,196
|
75
|
-
|
||||
Operating Income
|
1,247
|
37
|
-
|
||||
Equity in Net Income of Affiliates
|
25
|
27
|
(7.4)
|
||||
Operating Contribution
|
$
|
1,272
|
$
|
64
|
-
|
%
|
Home Box Office Results
|
|||||||
First Quarter
|
|||||||
Percent
|
|||||||
2019
|
2018
|
Change
|
|||||
Operating revenues
|
|||||||
Subscription
|
$
|
1,334
|
$
|
-
|
-
|
%
|
|
Content and other
|
176
|
-
|
-
|
||||
Total Operating Revenues
|
1,510
|
-
|
-
|
||||
Operating expenses
|
|||||||
Operations and support
|
921
|
-
|
-
|
||||
Depreciation and amortization
|
22
|
-
|
-
|
||||
Total Operating Expenses
|
943
|
-
|
-
|
||||
Operating Income
|
567
|
-
|
-
|
||||
Equity in Net Income of Affiliates
|
15
|
-
|
-
|
||||
Operating Contribution
|
$
|
582
|
$
|
-
|
-
|
%
|
Warner Bros. Results
|
|||||||
First Quarter
|
|||||||
Percent
|
|||||||
2019
|
2018
|
Change
|
|||||
Operating revenues
|
|||||||
Theatrical product
|
$
|
1,506
|
$
|
-
|
-
|
%
|
|
Television product
|
1,613
|
-
|
-
|
||||
Games and other
|
399
|
-
|
-
|
||||
Total Operating Revenues
|
3,518
|
-
|
-
|
||||
Operating expenses
|
|||||||
Operations and support
|
2,919
|
-
|
-
|
||||
Depreciation and amortization
|
52
|
-
|
-
|
||||
Total Operating Expenses
|
2,971
|
-
|
-
|
||||
Operating Income
|
547
|
-
|
-
|
||||
Equity in Net Income of Affiliates
|
6
|
-
|
-
|
||||
Operating Contribution
|
$
|
553
|
$
|
-
|
-
|
%
|
LATIN AMERICA SEGMENT
|
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)
|
%
|
AT&T INC.
MARCH 31, 2019
Item 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations - Continued
Dollars, subscribers and connections in millions, except per share and per subscriber amounts
|
|||||||
First Quarter
|
|||||||
2019
|
2018
|
Percent
Change
|
|||||
Operating revenues
|
|||||||
Service
|
$
|
442
|
$
|
404
|
9.4
|
%
|
|
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
|
||||
Operating Contribution
|
$
|
(205)
|
$
|
(259)
|
20.8
|
%
|
XANDR SEGMENT
|
|||||||
First Quarter
|
|||||||
Percent
|
|||||||
2019
|
2018
|
Change
|
|||||
Operating revenues
|
$
|
426
|
$
|
337
|
26.4
|
%
|
|
Operating expenses
|
|||||||
Operations and support
|
160
|
50
|
-
|
||||
Depreciation and amortization
|
13
|
1
|
-
|
||||
Total Operating Expenses
|
173
|
51
|
-
|
||||
Operating Income
|
253
|
286
|
(11.5)
|
||||
Equity in Net Income of Affiliates
|
-
|
-
|
-
|
||||
Operating Contribution
|
$
|
253
|
$
|
286
|
(11.5)
|
%
|
Total Advertising Revenues
|
|||||||
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
|
-
|
%
|
Business Solutions Results
|
|||||||
First Quarter
|
|||||||
2019
|
2018
|
Percent
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 of Affiliates
|
-
|
(1)
|
-
|
||||
Operating Contribution
|
$
|
1,826
|
$
|
2,063
|
(11.5)
|
%
|
● |
January draw of $2,850 on an 11-month syndicated term loan agreement.
|
● |
January borrowings of $725 supported by government agencies to support network equipment purchases.
|
● |
January draw of $750 on a private financing agreement.
|
● |
February issuance of $3,000 of 4.350% global notes due 2029.
|
● |
February issuance of $2,000 of 4.850% global notes due 2039.
|
● |
The final $2,625 of amounts outstanding under our Acquisition Term Loan (defined below).
|
● |
$750 of January borrowings under a private financing agreement.
|
● |
$1,850 of 2.300% notes due 2019.
|
● |
$400 of floating rate notes due 2019.
|
● |
$890 of 5.200% notes due 2020.
|
● |
$1,120 of 5.000% notes due 2021.
|
● |
$1,000 of 4.700% Warner Media, LLC notes due 2021.
|
● |
$1,000 of 4.750% Warner Media, LLC notes due 2021.
|
● |
$38 of 4.600% DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. notes due 2021.
|
● |
$40 of 5.000% DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. notes due 2021.
|
● |
$1,000 of annual put reset securities issued by BellSouth that may be put back to us each April until maturity in 2021.
|
● |
An accreting zero-coupon note that may be redeemed each May until maturity in 2022. If the remainder of the zero-coupon note
(issued for principal of $500 in 2007 and partially exchanged in the 2017 debt exchange offers) is held to maturity, the redemption amount will be $592.
|
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 service 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
|
|||||||||
Operating Expenses
|
|||||||||||||||||
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 Expense
|
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 (loss)
of affiliates
|
-
|
-
|
-
|
-
|
-
|
(1)
|
-
|
(1)
|
|||||||||
Operating Contribution
|
$
|
5,351
|
$
|
1,223
|
$
|
(4,748)
|
$
|
1,826
|
$
|
5,158
|
$
|
1,560
|
$
|
(4,655)
|
$
|
2,063
|
|
1
Non-business wireless reported
in the Communications segment under the Mobility business unit.
|
● |
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) and legislative efforts involving issues that are important to our business, including, without limitation, special access and business data services; 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; wireless equipment siting regulations; E911 services; competition policy; privacy; net
neutrality; multichannel video programming distributor services and equipment; content licensing and copyright protection; availability of new spectrum, on fair and balanced terms; and wireless and satellite license awards and
renewals.
|
● |
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.
|
● |
Potential changes to the electromagnetic spectrum currently used for broadcast television and satellite distribution being
considered by the FCC could negatively impact WarnerMedia’s ability to deliver linear network feeds of its domestic cable networks to its affiliates, and in some cases, WarnerMedia’s ability to produce high-value news and
entertainment programming on location.
|
● |
U.S. and foreign laws and regulations regarding intellectual property rights protection and privacy, personal data protection
and user consent are complex and rapidly evolving and could result in impact to our business plans, increased costs, or claims against us that may harm our reputation.
|
● |
Our ability to respond to revenue and margin pressures from increasing competition, including services that use alternative
technologies and/or government-owned or subsidized networks.
|
● |
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 non-regulation of comparable alternative technologies (e.g., VoIP and data usage).
|
● |
The continued development and delivery of attractive and profitable wireless, video and broadband offerings and devices; the
extent to which regulatory and build-out requirements apply to our offerings; our ability to match speeds offered by our competitors and the availability, cost and/or reliability of the various technologies and/or content required
to provide such offerings.
|
● |
Our ability to generate advertising revenue from attractive video content, especially from WarnerMedia, in the face of
unpredictable and rapidly evolving public viewing habits.
|
● |
The availability and cost and our ability to adequately fund additional wireless spectrum and network upgrades; 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 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 or software 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 including flooding and hurricanes, natural disasters including earthquakes and forest fires, 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 successfully integrate our WarnerMedia operations, including the ability to manage various businesses in widely
dispersed business locations and with decentralized management.
|
● |
Our ability to take advantage of the desire of advertisers to change traditional video advertising models.
|
● |
Our increased exposure to foreign economies, 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.
|
May 6, 2019
|
AT&T Inc.
/s/ John J. Stephens
John J. Stephens
Senior Executive Vice President
and Chief Financial Officer
|
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;
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4.
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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:
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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;
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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
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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 6, 2019
|
May 6, 2019
|
|
By: /s/ Randall Stephenson |
By:
/s/ John J. Stephens
|
|
Randall Stephenson |
John J. Stephens
|
|
Chairman of the Board, Chief Executive Officer |
Senior Executive Vice President
|
|
and President |
and Chief Financial Officer
|