(Mark One) x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||
For the quarterly period ended September 30, 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 | [ ] |
AT&T INC. | AT&T INC. | AT&T INC. | ||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | CONSOLIDATED STATEMENTS OF INCOME | CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||||||||
Dollars in millions except per share amounts | Dollars in millions except per share amounts | Dollars in millions except per share amounts | ||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||||
Three months ended | Nine months ended | Three months ended | Nine months ended | |||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||
As Adjusted | As Adjusted | |||||||||||||||||||||||||||||||
Operating Revenues | $ | 32,957 | $ | 32,158 | $ | 98,008 | $ | 95,589 | ||||||||||||||||||||||||
Service | $ | 35,625 | $ | 29,790 | $ | 94,128 | $ | 89,122 | ||||||||||||||||||||||||
Equipment | 3,466 | 3,167 | 10,554 | 8,886 | ||||||||||||||||||||||||||||
Total operating revenues | 39,091 | 32,957 | 104,682 | 98,008 | ||||||||||||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||||||
Cost of services and sales (exclusive of depreciation | ||||||||||||||||||||||||||||||||
and amortization shown separately below) | 14,541 | 13,403 | 42,074 | 39,227 | ||||||||||||||||||||||||||||
Cost of services and sales | ||||||||||||||||||||||||||||||||
Equipment | 4,501 | 4,432 | 13,400 | 12,503 | ||||||||||||||||||||||||||||
Broadcast, programming and operations | 4,081 | 1,038 | 6,351 | 3,019 | ||||||||||||||||||||||||||||
Other cost of services (exclusive of depreciation and amortization shown separately below) | 9,214 | 8,866 | 27,604 | 26,167 | ||||||||||||||||||||||||||||
Selling, general and administrative | 8,475 | 7,952 | 24,932 | 24,406 | 9,107 | 8,475 | 24,535 | 24,932 | ||||||||||||||||||||||||
Depreciation and amortization | 4,539 | 4,615 | 13,706 | 13,715 | 6,265 | 4,539 | 15,539 | 13,706 | ||||||||||||||||||||||||
Total operating expenses | 27,555 | 25,970 | 80,712 | 77,348 | 33,168 | 27,350 | 87,429 | 80,327 | ||||||||||||||||||||||||
Operating Income | 5,402 | 6,188 | 17,296 | 18,241 | 5,923 | 5,607 | 17,253 | 17,681 | ||||||||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||||||||||
Interest expense | (1,016 | ) | (829 | ) | (2,757 | ) | (2,481 | ) | (1,146 | ) | (1,016 | ) | (2,977 | ) | (2,757 | ) | ||||||||||||||||
Equity in net income (loss) of affiliates | (2 | ) | 91 | 188 | 494 | 15 | (2 | ) | 48 | 188 | ||||||||||||||||||||||
Other income (expense) – net | 42 | 50 | 1,456 | 370 | ||||||||||||||||||||||||||||
Other (expense) income – net | (57 | ) | 42 | 61 | 1,456 | |||||||||||||||||||||||||||
Total other income (expense) | (976 | ) | (688 | ) | (1,113 | ) | (1,617 | ) | (1,188 | ) | (976 | ) | (2,868 | ) | (1,113 | ) | ||||||||||||||||
Income Before Income Taxes | 4,426 | 5,500 | 16,183 | 16,624 | 4,735 | 4,631 | 14,385 | 16,568 | ||||||||||||||||||||||||
Income tax expense | 1,367 | 1,595 | 5,769 | 5,066 | 1,657 | 1,444 | 4,784 | 5,914 | ||||||||||||||||||||||||
Net Income | 3,059 | 3,905 | 10,414 | 11,558 | 3,078 | 3,187 | 9,601 | 10,654 | ||||||||||||||||||||||||
Less: Net Income Attributable to Noncontrolling Interest | (57 | ) | (91 | ) | (213 | ) | (222 | ) | (84 | ) | (57 | ) | (262 | ) | (213 | ) | ||||||||||||||||
Net Income Attributable to AT&T | $ | 3,002 | $ | 3,814 | $ | 10,201 | $ | 11,336 | $ | 2,994 | $ | 3,130 | $ | 9,339 | $ | 10,441 | ||||||||||||||||
Basic Earnings Per Share Attributable to AT&T | $ | 0.58 | $ | 0.72 | $ | 1.96 | $ | 2.10 | $ | 0.50 | $ | 0.60 | $ | 1.71 | $ | 2.00 | ||||||||||||||||
Diluted Earnings Per Share Attributable to AT&T | $ | 0.58 | $ | 0.72 | $ | 1.95 | $ | 2.09 | $ | 0.50 | $ | 0.60 | $ | 1.71 | $ | 2.00 | ||||||||||||||||
Weighted Average Number of Common Shares | ||||||||||||||||||||||||||||||||
Outstanding – Basic (in millions) | 5,198 | 5,315 | 5,208 | 5,402 | 5,924 | 5,198 | 5,447 | 5,208 | ||||||||||||||||||||||||
Weighted Average Number of Common Shares | ||||||||||||||||||||||||||||||||
Outstanding – with Dilution (in millions) | 5,214 | 5,331 | 5,224 | 5,419 | 5,943 | 5,214 | 5,463 | 5,224 | ||||||||||||||||||||||||
Dividends Declared Per Common Share | $ | 0.46 | $ | 0.45 | $ | 1.38 | $ | 1.35 | $ | 0.47 | $ | 0.46 | $ | 1.41 | $ | 1.38 | ||||||||||||||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
Dollars in millions | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
As Adjusted | As Adjusted | |||||||||||||||
Net income | $ | 3,078 | $ | 3,187 | $ | 9,601 | $ | 10,654 | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||
Foreign Currency: | ||||||||||||||||
Translation adjustment (includes $(20), $(1), $(20) and $0 attributable to noncontrolling interest), net of taxes of $(535), $(22), $(638) and $(17) | (1,039 | ) | (35 | ) | (1,224 | ) | (29 | ) | ||||||||
Reclassification adjustment included in net income, net of taxes of $0, $0, $0 and $224 | - | - | - | 416 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||
Net unrealized gains (losses), net of taxes of $(49), $(15), $(30) and $19 | (85 | ) | (29 | ) | (51 | ) | 30 | |||||||||
Reclassification adjustment included in net income, net of taxes of $2, $(1), $(3) and $(9) | 3 | (1 | ) | (6 | ) | (15 | ) | |||||||||
Cash flow hedges: | ||||||||||||||||
Net unrealized gains (losses), net of taxes of $(237), $201, $(479) and $148 | (441 | ) | 370 | (890 | ) | 272 | ||||||||||
Reclassification adjustment included in net income, net of taxes of $6, $3, $15 and $14 | 11 | 8 | 28 | 29 | ||||||||||||
Defined benefit postretirement plans: | ||||||||||||||||
Amortization of net prior service credit included in net income, net of taxes of $(131), $(146), $(393) and $(435) | (215 | ) | (239 | ) | (644 | ) | (718 | ) | ||||||||
Reclassification adjustment included in net income, net of taxes $0, $0, $0 and $33 | - | - | - | 61 | ||||||||||||
Other comprehensive income (loss) | (1,766 | ) | 74 | (2,787 | ) | 46 | ||||||||||
Total comprehensive income | 1,312 | 3,261 | 6,814 | 10,700 | ||||||||||||
Less: Total comprehensive income attributable to noncontrolling interest | (64 | ) | (56 | ) | (242 | ) | (213 | ) | ||||||||
Total Comprehensive Income Attributable to AT&T | $ | 1,248 | $ | 3,205 | $ | 6,572 | $ | 10,487 | ||||||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
Dollars in millions | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income | $ | 3,059 | $ | 3,905 | $ | 10,414 | $ | 11,558 | ||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Foreign Currency: | ||||||||||||||||
Translation adjustments (includes $(1), $(1), $0 and $(2) attributable to noncontrolling interest), net of taxes of $(22), $(21), $(17) and $(86) | (35 | ) | (37 | ) | (29 | ) | (155 | ) | ||||||||
Reclassification adjustment included in net income, net of taxes of $0, $0, $224 and $19 | - | - | 416 | 34 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||
Net unrealized gains (losses), net of taxes of $(15), $38, $19 and $84 | (29 | ) | 69 | 30 | 155 | |||||||||||
Reclassification adjustment realized in net income, net of taxes of $(1), $(2), $(9) and $(7) | (1 | ) | (3 | ) | (15 | ) | (13 | ) | ||||||||
Cash flow hedges: | ||||||||||||||||
Net unrealized gains, net of taxes of $201, $171, $148 and $286 | 370 | 316 | 272 | 526 | ||||||||||||
Reclassification adjustment included in net income, net of taxes of $3, $4, $14 and $12 | 8 | 7 | 29 | 22 | ||||||||||||
Defined benefit postretirement plans: | ||||||||||||||||
Reclassification adjustment included in net income, net of taxes $0, $0, $33 and $5 | - | - | 61 | 8 | ||||||||||||
Amortization of net prior service credit included in net income, net of taxes of $(146), $(109), $(435) and $(327) | (239 | ) | (178 | ) | (718 | ) | (533 | ) | ||||||||
Other comprehensive income | 74 | 174 | 46 | 44 | ||||||||||||
Total comprehensive income | 3,133 | 4,079 | 10,460 | 11,602 | ||||||||||||
Less: Total comprehensive income attributable to noncontrolling interest | (56 | ) | (90 | ) | (213 | ) | (220 | ) | ||||||||
Total Comprehensive Income Attributable to AT&T | $ | 3,077 | $ | 3,989 | $ | 10,247 | $ | 11,382 | ||||||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
Dollars in millions except per share amounts | ||||||||
September 30, | December 31, | |||||||
2015 | 2014 | |||||||
Assets | (Unaudited) | As Adjusted | ||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 6,202 | $ | 8,603 | ||||
Accounts receivable - net of allowances for doubtful accounts of $656 and $454 | 16,329 | 14,527 | ||||||
Prepaid expenses | 1,166 | 831 | ||||||
Other current assets | 11,254 | 9,802 | ||||||
Total current assets | 34,951 | 33,763 | ||||||
Property, plant and equipment | 302,194 | 282,295 | ||||||
Less: accumulated depreciation and amortization | (179,358 | ) | (169,397 | ) | ||||
Property, Plant and Equipment – Net | 122,836 | 112,898 | ||||||
Goodwill | 105,966 | 69,692 | ||||||
Licenses | 93,063 | 60,824 | ||||||
Customer Lists and Relationships - Net | 19,608 | 812 | ||||||
Other Intangible Assets – Net | 8,236 | 5,327 | ||||||
Investments in Equity Affiliates | 1,744 | 250 | ||||||
Other Assets | 13,585 | 13,659 | ||||||
Total Assets | $ | 399,989 | $ | 297,225 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities | ||||||||
Debt maturing within one year | $ | 7,535 | $ | 6,056 | ||||
Accounts payable and accrued liabilities | 28,280 | 23,592 | ||||||
Advanced billing and customer deposits | 4,640 | 4,105 | ||||||
Accrued taxes | 4,591 | 1,136 | ||||||
Dividends payable | 2,892 | 2,438 | ||||||
Total current liabilities | 47,938 | 37,327 | ||||||
Long-Term Debt | 119,395 | 76,011 | ||||||
Deferred Credits and Other Noncurrent Liabilities | ||||||||
Deferred income taxes | 53,044 | 38,549 | ||||||
Postemployment benefit obligation | 36,396 | 37,079 | ||||||
Other noncurrent liabilities | 20,427 | 17,989 | ||||||
Total deferred credits and other noncurrent liabilities | 109,867 | 93,617 | ||||||
Stockholders' Equity | ||||||||
Common stock ($1 par value, 14,000,000,000 authorized at September 30, 2015 and | ||||||||
December 31, 2014: issued 6,495,231,088 at September 30, 2015 and December 31, 2014) | 6,495 | 6,495 | ||||||
Additional paid-in capital | 89,717 | 91,108 | ||||||
Retained earnings | 32,627 | 31,081 | ||||||
Treasury stock (342,990,428 at September 30, 2015 and 1,308,318,131 | ||||||||
at December 31, 2014, at cost) | (12,309 | ) | (47,029 | ) | ||||
Accumulated other comprehensive income | 5,294 | 8,061 | ||||||
Noncontrolling interest | 965 | 554 | ||||||
Total stockholders' equity | 122,789 | 90,270 | ||||||
Total Liabilities and Stockholders' Equity | $ | 399,989 | $ | 297,225 | ||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
Dollars in millions except per share amounts | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Assets | (Unaudited) | |||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 2,458 | $ | 3,339 | ||||
Accounts receivable - net of allowances for doubtful accounts of $482 and $483 | 13,445 | 12,918 | ||||||
Prepaid expenses | 869 | 960 | ||||||
Deferred income taxes | 1,030 | 1,199 | ||||||
Other current assets | 8,033 | 4,780 | ||||||
Total current assets | 25,835 | 23,196 | ||||||
Property, plant and equipment | 286,987 | 274,798 | ||||||
Less: accumulated depreciation and amortization | (171,853 | ) | (163,830 | ) | ||||
Property, Plant and Equipment – Net | 115,134 | 110,968 | ||||||
Goodwill | 70,131 | 69,273 | ||||||
Licenses | 60,784 | 56,433 | ||||||
Other Intangible Assets – Net | 6,252 | 5,779 | ||||||
Investments in Equity Affiliates | 166 | 3,860 | ||||||
Other Assets | 9,637 | 8,278 | ||||||
Total Assets | $ | 287,939 | $ | 277,787 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities | ||||||||
Debt maturing within one year | $ | 5,109 | $ | 5,498 | ||||
Accounts payable and accrued liabilities | 24,119 | 21,107 | ||||||
Advanced billing and customer deposits | 4,038 | 4,212 | ||||||
Accrued taxes | 4,328 | 1,774 | ||||||
Dividends payable | 2,385 | 2,404 | ||||||
Total current liabilities | 39,979 | 34,995 | ||||||
Long-Term Debt | 70,516 | 69,290 | ||||||
Deferred Credits and Other Noncurrent Liabilities | ||||||||
Deferred income taxes | 37,393 | 36,308 | ||||||
Postemployment benefit obligation | 29,918 | 29,946 | ||||||
Other noncurrent liabilities | 17,014 | 15,766 | ||||||
Total deferred credits and other noncurrent liabilities | 84,325 | 82,020 | ||||||
Stockholders' Equity | ||||||||
Common stock ($1 par value, 14,000,000,000 authorized at September 30, 2014 and | ||||||||
December 31, 2013: issued 6,495,231,088 at September 30, 2014 and December 31, 2013) | 6,495 | 6,495 | ||||||
Additional paid-in capital | 91,064 | 91,091 | ||||||
Retained earnings | 34,165 | 31,141 | ||||||
Treasury stock (1,310,226,392 at September 30, 2014 and 1,268,914,913 | ||||||||
at December 31, 2013, at cost) | (47,037 | ) | (45,619 | ) | ||||
Accumulated other comprehensive income | 7,926 | 7,880 | ||||||
Noncontrolling interest | 506 | 494 | ||||||
Total stockholders' equity | 93,119 | 91,482 | ||||||
Total Liabilities and Stockholders' Equity | $ | 287,939 | $ | 277,787 | ||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Dollars in millions | ||||||||
(Unaudited) | ||||||||
Nine months ended | ||||||||
September 30, | ||||||||
2015 | 2014 | |||||||
Operating Activities | As Adjusted | |||||||
Net income | $ | 9,601 | $ | 10,654 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 15,539 | 13,706 | ||||||
Undistributed earnings from investments in equity affiliates | (36 | ) | (45 | ) | ||||
Provision for uncollectible accounts | 895 | 692 | ||||||
Deferred income tax expense | 1,539 | 1,450 | ||||||
Net gain from sale of investments, net of impairments | (46 | ) | (1,374 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 453 | (1,269 | ) | |||||
Other current assets | 350 | (840 | ) | |||||
Accounts payable and accrued liabilities | 1,279 | 4,790 | ||||||
Retirement benefit funding | (595 | ) | (420 | ) | ||||
Other - net | (2,284 | ) | (1,751 | ) | ||||
Total adjustments | 17,094 | 14,939 | ||||||
Net Cash Provided by Operating Activities | 26,695 | 25,593 | ||||||
Investing Activities | ||||||||
Construction and capital expenditures: | ||||||||
Capital expenditures | (13,356 | ) | (16,829 | ) | ||||
Interest during construction | (566 | ) | (178 | ) | ||||
Acquisitions, net of cash acquired | (30,694 | ) | (2,053 | ) | ||||
Dispositions | 79 | 6,074 | ||||||
Sales (purchases) of securities, net | 1,490 | (1,996 | ) | |||||
Return of advances to and investments in equity affiliates | - | 3 | ||||||
Other | - | (1 | ) | |||||
Net Cash Used in Investing Activities | (43,047 | ) | (14,980 | ) | ||||
Financing Activities | ||||||||
Net change in short-term borrowings with original maturities of three months or less | (1 | ) | (16 | ) | ||||
Issuance of long-term debt | 33,967 | 8,564 | ||||||
Repayment of long-term debt | (9,962 | ) | (10,376 | ) | ||||
Purchase of treasury stock | - | (1,617 | ) | |||||
Issuance of treasury stock (excluding acquisition of DIRECTV) | 133 | 34 | ||||||
Dividends paid | (7,311 | ) | (7,170 | ) | ||||
Other | (2,875 | ) | (913 | ) | ||||
Net Cash Provided by (Used in) Financing Activities | 13,951 | (11,494 | ) | |||||
Net decrease in cash and cash equivalents | (2,401 | ) | (881 | ) | ||||
Cash and cash equivalents beginning of year | 8,603 | 3,339 | ||||||
Cash and Cash Equivalents End of Period | $ | 6,202 | $ | 2,458 | ||||
Cash paid during the nine months ended September 30 for: | ||||||||
Interest | $ | 3,462 | $ | 3,351 | ||||
Income taxes, net of refunds | $ | 873 | $ | 1,337 | ||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Dollars in millions | ||||||||
(Unaudited) | ||||||||
Nine months ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
Operating Activities | ||||||||
Net income | $ | 10,414 | $ | 11,558 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 13,706 | 13,715 | ||||||
Undistributed earnings from investments in equity affiliates | (45 | ) | (232 | ) | ||||
Provision for uncollectible accounts | 692 | 653 | ||||||
Deferred income tax expense | 1,304 | 2,505 | ||||||
Net gain from sale of investments, net of impairments | (1,374 | ) | (272 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (1,269 | ) | (440 | ) | ||||
Other current assets | (813 | ) | 520 | |||||
Accounts payable and accrued liabilities | 4,763 | (420 | ) | |||||
Retirement benefit funding | (420 | ) | (175 | ) | ||||
Other - net | (1,365 | ) | (533 | ) | ||||
Total adjustments | 15,179 | 15,321 | ||||||
Net Cash Provided by Operating Activities | 25,593 | 26,879 | ||||||
Investing Activities | ||||||||
Construction and capital expenditures: | ||||||||
Capital expenditures | (16,829 | ) | (15,565 | ) | ||||
Interest during construction | (178 | ) | (213 | ) | ||||
Acquisitions, net of cash acquired | (2,053 | ) | (4,025 | ) | ||||
Dispositions | 6,074 | 846 | ||||||
Purchases of securities | (1,996 | ) | - | |||||
Return of advances to and investments in equity affiliates | 3 | 301 | ||||||
Other | (1 | ) | (4 | ) | ||||
Net Cash Used in Investing Activities | (14,980 | ) | (18,660 | ) | ||||
Financing Activities | ||||||||
Net change in short-term borrowings with original maturities of three months or less | (16 | ) | 1,851 | |||||
Issuance of other short-term borrowings | - | 1,476 | ||||||
Repayment of other short-term borrowings | - | (1,476 | ) | |||||
Issuance of long-term debt | 8,564 | 6,416 | ||||||
Repayment of long-term debt | (10,376 | ) | (2,131 | ) | ||||
Purchase of treasury stock | (1,617 | ) | (11,134 | ) | ||||
Issuance of treasury stock | 34 | 108 | ||||||
Dividends paid | (7,170 | ) | (7,325 | ) | ||||
Other | (913 | ) | 499 | |||||
Net Cash Used in Financing Activities | (11,494 | ) | (11,716 | ) | ||||
Net decrease in cash and cash equivalents | (881 | ) | (3,497 | ) | ||||
Cash and cash equivalents beginning of year | 3,339 | 4,868 | ||||||
Cash and Cash Equivalents End of Period | $ | 2,458 | $ | 1,371 | ||||
Cash paid during the nine months ended September 30 for: | ||||||||
Interest | $ | 3,351 | $ | 2,980 | ||||
Income taxes, net of refunds | $ | 1,337 | $ | 1,573 | ||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||
Dollars and shares in millions except per share amounts | ||||||||
(Unaudited) | ||||||||
September 30, 2015 | ||||||||
Shares | Amount | |||||||
As Adjusted | ||||||||
Common Stock | ||||||||
Balance at beginning of year | 6,495 | $ | 6,495 | |||||
Issuance of stock | - | - | ||||||
Balance at end of period | 6,495 | $ | 6,495 | |||||
Additional Paid-In Capital | ||||||||
Balance at beginning of year | $ | 91,108 | ||||||
Issuance of treasury stock | (1,593 | ) | ||||||
Share-based payments | 202 | |||||||
Balance at end of period | $ | 89,717 | ||||||
Retained Earnings | ||||||||
Balance at beginning of year | $ | 31,081 | ||||||
Net income attributable to AT&T ($1.71 per diluted share) | 9,339 | |||||||
Dividends to stockholders ($1.41 per share) | (7,793 | ) | ||||||
Balance at end of period | $ | 32,627 | ||||||
Treasury Stock | ||||||||
Balance at beginning of year | (1,308 | ) | $ | (47,029 | ) | |||
Repurchase of common stock | (1 | ) | (10 | ) | ||||
Issuance of treasury stock | 967 | 34,730 | ||||||
Balance at end of period | (342 | ) | $ | (12,309 | ) | |||
Accumulated Other Comprehensive Income Attributable to AT&T, net of tax | ||||||||
Balance at beginning of year | $ | 8,061 | ||||||
Other comprehensive loss attributable to AT&T | (2,767 | ) | ||||||
Balance at end of period | $ | 5,294 | ||||||
Noncontrolling Interest | ||||||||
Balance at beginning of year | $ | 554 | ||||||
Net income attributable to noncontrolling interest | 262 | |||||||
Distributions | (214 | ) | ||||||
Acquisition of noncontrolling interests | 383 | |||||||
Translation adjustments attributable to noncontrolling interest, net of taxes | (20 | ) | ||||||
Balance at end of period | $ | 965 | ||||||
Total Stockholders' Equity at beginning of year | $ | 90,270 | ||||||
Total Stockholders' Equity at end of period | $ | 122,789 | ||||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||
Dollars and shares in millions except per share amounts | ||||||||
(Unaudited) | ||||||||
September 30, 2014 | ||||||||
Shares | Amount | |||||||
Common Stock | ||||||||
Balance at beginning of year | 6,495 | $ | 6,495 | |||||
Issuance of stock | - | - | ||||||
Balance at end of period | 6,495 | $ | 6,495 | |||||
Additional Paid-In Capital | ||||||||
Balance at beginning of year | $ | 91,091 | ||||||
Issuance of treasury stock | 3 | |||||||
Share-based payments | 3 | |||||||
Change related to acquisition of interests held by noncontrolling owners | (33 | ) | ||||||
Balance at end of period | $ | 91,064 | ||||||
Retained Earnings | ||||||||
Balance at beginning of year | $ | 31,141 | ||||||
Net income attributable to AT&T ($1.95 per diluted share) | 10,201 | |||||||
Dividends to stockholders ($1.38 per share) | (7,177 | ) | ||||||
Balance at end of period | $ | 34,165 | ||||||
Treasury Stock | ||||||||
Balance at beginning of year | (1,269 | ) | $ | (45,619 | ) | |||
Repurchase of common stock | (48 | ) | (1,617 | ) | ||||
Issuance of treasury stock | 7 | 199 | ||||||
Balance at end of period | (1,310 | ) | $ | (47,037 | ) | |||
Accumulated Other Comprehensive Income Attributable to AT&T, net of tax | ||||||||
Balance at beginning of year | $ | 7,880 | ||||||
Other comprehensive income attributable to AT&T | 46 | |||||||
Balance at end of period | $ | 7,926 | ||||||
Noncontrolling Interest | ||||||||
Balance at beginning of year | $ | 494 | ||||||
Net income attributable to noncontrolling interest | 213 | |||||||
Distributions | (200 | ) | ||||||
Acquisitions of noncontrolling interests | 69 | |||||||
Acquisition of interests held by noncontrolling owners | (70 | ) | ||||||
Balance at end of period | $ | 506 | ||||||
Total Stockholders' Equity at beginning of year | $ | 91,482 | ||||||
Total Stockholders' Equity at end of period | $ | 93,119 | ||||||
See Notes to Consolidated Financial Statements. |
Historical Accounting Method | As Adjusted | Effect of Change | ||||||||||
For the three months ended September 30, 2015 | ||||||||||||
Other cost of services | $ | 9,290 | $ | 9,214 | $ | (76 | ) | |||||
Income tax expense | 1,628 | 1,657 | 29 | |||||||||
Net Income | 3,031 | 3,078 | 47 | |||||||||
Net Income Attributable to AT&T | 2,947 | 2,994 | 47 | |||||||||
Basic Earnings per Share Attributable to AT&T | $ | 0.50 | $ | 0.50 | $ | - | ||||||
Diluted Earnings per Share Attributable to AT&T | 0.50 | 0.50 | - | |||||||||
At September 30, 2015 or for the nine months ended | ||||||||||||
Other cost of services | $ | 27,842 | $ | 27,604 | $ | (238 | ) | |||||
Income tax expense | 4,694 | 4,784 | 90 | |||||||||
Net Income | 9,453 | 9,601 | 148 | |||||||||
Net Income Attributable to AT&T | 9,191 | 9,339 | 148 | |||||||||
Basic Earnings per Share Attributable to AT&T | $ | 1.68 | $ | 1.71 | $ | 0.03 | ||||||
Diluted Earnings per Share Attributable to AT&T | 1.68 | 1.71 | 0.03 | |||||||||
Other current assets | $ | 9,579 | $ | 11,254 | $ | 1,675 | ||||||
Other Assets | 10,671 | 13,585 | 2,914 | |||||||||
Deferred income taxes | 51,949 | 53,044 | 1,095 | |||||||||
Retained earnings | 29,133 | 32,627 | 3,494 |
Historical Accounting Method | As Adjusted | Effect of Change | ||||||||||
For the three months ended September 30, 2014 | ||||||||||||
Other cost of services | $ | 9,071 | $ | 8,866 | $ | (205 | ) | |||||
Income tax expense | 1,367 | 1,444 | 77 | |||||||||
Net Income | 3,059 | 3,187 | 128 | |||||||||
Net Income Attributable to AT&T | 3,002 | 3,130 | 128 | |||||||||
Basic Earnings per Share Attributable to AT&T | $ | 0.58 | $ | 0.60 | $ | 0.02 | ||||||
Diluted Earnings per Share Attributable to AT&T | 0.58 | 0.60 | 0.02 | |||||||||
For the nine months ended September 30, 2014 | ||||||||||||
Other cost of services | $ | 26,552 | $ | 26,167 | $ | (385 | ) | |||||
Income tax expense | 5,769 | 5,914 | 145 | |||||||||
Net Income | 10,414 | 10,654 | 240 | |||||||||
Net Income Attributable to AT&T | 10,201 | 10,441 | 240 | |||||||||
Basic Earnings per Share Attributable to AT&T | $ | 1.96 | $ | 2.00 | $ | 0.04 | ||||||
Diluted Earnings per Share Attributable to AT&T | 1.95 | 2.00 | 0.05 |
Historical Accounting Method | As Adjusted | Effect of Change | ||||||||||
At December 31, 2014 | ||||||||||||
Other current assets | $ | 8,067 | $ | 9,802 | $ | 1,735 | ||||||
Other Assets | 10,998 | 13,659 | 2,661 | |||||||||
Accrued taxes | 1,091 | 1,136 | 45 | |||||||||
Deferred income taxes | 37,544 | 38,549 | 1,005 | |||||||||
Retained earnings | 27,736 | 31,081 | 3,345 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Numerators | ||||||||||||||||
Numerator for basic earnings per share: | ||||||||||||||||
Net Income | $ | 3,059 | $ | 3,905 | $ | 10,414 | $ | 11,558 | ||||||||
Less: Net income attributable to noncontrolling interest | (57 | ) | (91 | ) | (213 | ) | (222 | ) | ||||||||
Net Income attributable to AT&T | 3,002 | 3,814 | 10,201 | 11,336 | ||||||||||||
Dilutive potential common shares: | ||||||||||||||||
Share-based payment | 3 | 3 | 10 | 9 | ||||||||||||
Numerator for diluted earnings per share | $ | 3,005 | $ | 3,817 | $ | 10,211 | $ | 11,345 | ||||||||
Denominators (000,000) | ||||||||||||||||
Denominator for basic earnings per share: | ||||||||||||||||
Weighted average number of common shares outstanding | 5,198 | 5,315 | 5,208 | 5,402 | ||||||||||||
Dilutive potential common shares: | ||||||||||||||||
Share-based payment (in shares) | 16 | 16 | 16 | 17 | ||||||||||||
Denominator for diluted earnings per share | 5,214 | 5,331 | 5,224 | 5,419 | ||||||||||||
Basic earnings per share attributable to AT&T | $ | 0.58 | $ | 0.72 | $ | 1.96 | $ | 2.10 | ||||||||
Diluted earnings per share attributable to AT&T | $ | 0.58 | $ | 0.72 | $ | 1.95 | $ | 2.09 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Numerators | ||||||||||||||||
Numerator for basic earnings per share: | ||||||||||||||||
Net Income | $ | 3,078 | $ | 3,187 | $ | 9,601 | $ | 10,654 | ||||||||
Less: Net income attributable to noncontrolling interest | (84 | ) | (57 | ) | (262 | ) | (213 | ) | ||||||||
Net Income attributable to AT&T | 2,994 | 3,130 | 9,339 | 10,441 | ||||||||||||
Dilutive potential common shares: | ||||||||||||||||
Share-based payment | 3 | 2 | 9 | 9 | ||||||||||||
Numerator for diluted earnings per share | $ | 2,997 | $ | 3,132 | $ | 9,348 | $ | 10,450 | ||||||||
Denominators (000,000) | ||||||||||||||||
Denominator for basic earnings per share: | ||||||||||||||||
Weighted average number of common shares outstanding | 5,924 | 5,198 | 5,447 | 5,208 | ||||||||||||
Dilutive potential common shares: | ||||||||||||||||
Share-based payment (in shares) | 19 | 16 | 16 | 16 | ||||||||||||
Denominator for diluted earnings per share | 5,943 | 5,214 | 5,463 | 5,224 | ||||||||||||
Basic earnings per share attributable to AT&T | $ | 0.50 | $ | 0.60 | $ | 1.71 | $ | 2.00 | ||||||||
Diluted earnings per share attributable to AT&T | $ | 0.50 | $ | 0.60 | $ | 1.71 | $ | 2.00 |
At September 30, 2015 and for the period ended: | At September 30, 2015 and for the period ended: | ||||||||||||||||||||||||||||||||||
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, 2014 | Balance as of December 31, 2014 | $ | (26) | $ | 499 | $ | 741 | $ | 6,847 | $ | 8,061 | ||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | Other comprehensive income (loss) before reclassifications | (1,204) | (51) | (890) | - | (2,145) | |||||||||||||||||||||||||||||
Amounts reclassified from accumulated OCI | Amounts reclassified from accumulated OCI | - | 1 | (6) | 2 | 28 | 3 | (644) | 4 | (622) | |||||||||||||||||||||||||
Net other comprehensive income (loss) | Net other comprehensive income (loss) | (1,204) | (57) | (862) | (644) | (2,767) | |||||||||||||||||||||||||||||
Balance as of September 30, 2015 | Balance as of September 30, 2015 | $ | (1,230) | $ | 442 | $ | (121) | $ | 6,203 | $ | 5,294 | ||||||||||||||||||||||||
At September 30, 2014 and for the period ended: | At September 30, 2014 and for the period ended: | At September 30, 2014 and for the period ended: | |||||||||||||||||||||||||||||||||
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 | 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, 2013 | $ | (367 | ) | $ | 450 | $ | 445 | $ | 7,352 | $ | 7,880 | Balance as of December 31, 2013 | $ | (367) | $ | 450 | $ | 445 | $ | 7,352 | $ | 7,880 | |||||||||||||
Other comprehensive income (loss) before reclassifications | (29 | ) | 30 | 272 | - | 273 | Other comprehensive income (loss) before reclassifications | (29) | 30 | 272 | - | 273 | |||||||||||||||||||||||
Amounts reclassified from accumulated OCI | 416 | 1 | (15 | )2 | 29 | 3 | (657 | )4 | (227 | ) | Amounts reclassified from accumulated OCI | 416 | 1 | (15) | 2 | 29 | 3 | (657) | 4 | (227) | |||||||||||||||
Net other comprehensive income (loss) | 387 | 15 | 301 | (657 | ) | 46 | Net other comprehensive income (loss) | 387 | 15 | 301 | (657) | 46 | |||||||||||||||||||||||
Balance as of September 30, 2014 | $ | 20 | $ | 465 | $ | 746 | $ | 6,695 | $ | 7,926 | Balance as of September 30, 2014 | $ | 20 | $ | 465 | $ | 746 | $ | 6,695 | $ | 7,926 | ||||||||||||||
At September 30, 2013 and for the period ended: | |||||||||||||||||||||||||||||||||||
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, 2012 | $ | (284 | ) | $ | 272 | $ | (110 | ) | $ | 5,358 | $ | 5,236 | |||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | (153 | ) | 155 | 526 | - | 528 | |||||||||||||||||||||||||||||
Amounts reclassified from accumulated OCI | 34 | 1 | (13 | )2 | 22 | 3 | (525 | )4 | (482 | ) | |||||||||||||||||||||||||
Net other comprehensive income (loss) | (119 | ) | 142 | 548 | (525 | ) | 46 | ||||||||||||||||||||||||||||
Balance as of September 30, 2013 | $ | (403 | ) | $ | 414 | $ | 438 | $ | 4,833 | $ | 5,282 | ||||||||||||||||||||||||
1 Translation (gain) loss reclassifications are included in Other income (expense) - net in the consolidated statements of income. | 1 Translation (gain) loss reclassifications are included in Other income (expense) - net in the consolidated statements of income. | ||||||||||||||||||||||||||||||||||
2 (Gains) losses are included in Other income (expense) - net in the consolidated statements of income. | 2 (Gains) losses are included in Other income (expense) - net in the consolidated statements of income. | ||||||||||||||||||||||||||||||||||
3 (Gains) losses are included in Interest expense in the consolidated statements of income. See Note 6 for additional information. | 3 (Gains) losses are included in Interest expense in the consolidated statements of income. See Note 6 for additional information. | ||||||||||||||||||||||||||||||||||
4 The amortization of prior service credits associated with postretirement benefits, net of amounts capitalized as part of construction labor, are included in Other cost of services and Selling, general and administrative in the consolidated statements of income (see Note 5). Actuarial loss | 4 The amortization of prior service credits associated with postretirement benefits, net of amounts capitalized as part of construction labor, are included in Other cost of services and Selling, general and administrative in the consolidated statements of income (see Note 5). Actuarial loss | ||||||||||||||||||||||||||||||||||
reclassifications related to our equity method investees are included in Other income (expense) - net in the consolidated statements of income. | reclassifications related to our equity method investees are included in Other income (expense) - net in the consolidated statements of income. |
· | Acquisition-related items include (1) operations and support items associated with the merger and integration of newly acquired businesses, and (2) the noncash amortization of intangible assets acquired in acquisitions. |
· | Certain significant items include (1) noncash actuarial gains and losses from pension and other postretirement benefits, (2) employee separation charges associated with voluntary and/or strategic offers, (3) abandonment or impairments of assets and (4) other items for which the segments are not being evaluated. |
For the three months ended September 30, 2014 | ||||||||||||||||
Wireless | Wireline | Corporate and Other | Consolidated Results | |||||||||||||
Service | $ | 15,423 | $ | 14,368 | $ | - | $ | 29,791 | ||||||||
Equipment | 2,914 | 247 | 5 | 3,166 | ||||||||||||
Total segment operating revenues | 18,337 | 14,615 | 5 | 32,957 | ||||||||||||
Operations and support expenses | 11,855 | 10,761 | 400 | 23,016 | ||||||||||||
Depreciation and amortization expenses | 1,965 | 2,571 | 3 | 4,539 | ||||||||||||
Total segment operating expenses | 13,820 | 13,332 | 403 | 27,555 | ||||||||||||
Segment operating income (loss) | 4,517 | 1,283 | (398 | ) | 5,402 | |||||||||||
Interest expense | - | - | 1,016 | 1,016 | ||||||||||||
Equity in net income (loss) of affiliates | (26 | ) | 1 | 23 | (2 | ) | ||||||||||
Other income (expense) – net | - | - | 42 | 42 | ||||||||||||
Segment income (loss) before income taxes | $ | 4,491 | $ | 1,284 | $ | (1,349 | ) | $ | 4,426 | |||||||
For the nine months ended September 30, 2014 | Consolidated Results | |||||||||||||||
Wireless | Wireline | Corporate and Other | ||||||||||||||
Service | $ | 45,958 | $ | 43,165 | $ | - | $ | 89,123 | ||||||||
Equipment | 8,175 | 688 | 22 | 8,885 | ||||||||||||
Total segment operating revenues | 54,133 | 43,853 | 22 | 98,008 | ||||||||||||
Operations and support expenses | 34,305 | 31,918 | 783 | 67,006 | ||||||||||||
Depreciation and amortization expenses | 5,931 | 7,769 | 6 | 13,706 | ||||||||||||
Total segment operating expenses | 40,236 | 39,687 | 789 | 80,712 | ||||||||||||
Segment operating income (loss) | 13,897 | 4,166 | (767 | ) | 17,296 | |||||||||||
Interest expense | - | - | 2,757 | 2,757 | ||||||||||||
Equity in net income (loss) of affiliates | (75 | ) | 2 | 261 | 188 | |||||||||||
Other income (expense) – net | - | - | 1,456 | 1,456 | ||||||||||||
Segment income (loss) before income taxes | $ | 13,822 | $ | 4,168 | $ | (1,807 | ) | $ | 16,183 |
For the three months ended September 30, 2015 | ||||||||||||||||||||||||||||
Revenue | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | ||||||||||||||||||||||
Business Solutions | $ | 17,692 | $ | 10,921 | $ | 6,771 | $ | 2,474 | $ | 4,297 | $ | - | $ | 4,297 | ||||||||||||||
Entertainment and Internet Services | 10,858 | 8,450 | 2,408 | 1,389 | 1,019 | 2 | 1,021 | |||||||||||||||||||||
Consumer Mobility | 8,784 | 5,065 | 3,719 | 976 | 2,743 | - | 2,743 | |||||||||||||||||||||
International | 1,526 | 1,384 | 142 | 225 | (83 | ) | (4 | ) | (87 | ) | ||||||||||||||||||
Segment Total | 38,860 | 25,820 | 13,040 | 5,064 | 7,976 | (2 | ) | 7,974 | ||||||||||||||||||||
Corporate and Other | 316 | 315 | 1 | 3 | (2 | ) | ||||||||||||||||||||||
Acquisition-related items | (85 | ) | 611 | (696 | ) | 1,198 | (1,894 | ) | ||||||||||||||||||||
Certain significant items | - | 157 | (157 | ) | - | (157 | ) | |||||||||||||||||||||
AT&T Inc. | $ | 39,091 | $ | 26,903 | $ | 12,188 | $ | 6,265 | $ | 5,923 | ||||||||||||||||||
For the nine months ended September 30, 2015 | ||||||||||||||||||||||||||||
Revenue | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | ||||||||||||||||||||||
Business Solutions | $ | 52,913 | $ | 32,966 | $ | 19,947 | $ | 7,276 | $ | 12,671 | $ | - | $ | 12,671 | ||||||||||||||
Entertainment and Internet Services | 22,300 | 18,222 | 4,078 | 3,519 | 559 | (16 | ) | 543 | ||||||||||||||||||||
Consumer Mobility | 26,317 | 15,808 | 10,509 | 2,912 | 7,597 | - | 7,597 | |||||||||||||||||||||
International | 2,253 | 2,131 | 122 | 346 | (224 | ) | (4 | ) | (228 | ) | ||||||||||||||||||
Segment Total | 103,783 | 69,127 | 34,656 | 14,053 | 20,603 | (20 | ) | 20,583 | ||||||||||||||||||||
Corporate and Other | 984 | 785 | 199 | 47 | 152 | |||||||||||||||||||||||
Acquisition-related items | (85 | ) | 1,604 | (1,689 | ) | 1,439 | (3,128 | ) | ||||||||||||||||||||
Certain significant items | - | 374 | (374 | ) | - | (374 | ) | |||||||||||||||||||||
AT&T Inc. | $ | 104,682 | $ | 71,890 | $ | 32,792 | $ | 15,539 | $ | 17,253 |
For the three months ended September 30, 2013 | ||||||||||||||||
Wireless | Wireline | Corporate and Other | Consolidated Results | |||||||||||||
Service | $ | 15,460 | $ | 14,403 | $ | - | $ | 29,863 | ||||||||
Equipment | 2,020 | 267 | 8 | 2,295 | ||||||||||||
Total segment operating revenues | 17,480 | 14,670 | 8 | 32,158 | ||||||||||||
Operations and support expenses | 10,982 | 10,385 | (12 | ) | 21,355 | |||||||||||
Depreciation and amortization expenses | 1,875 | 2,736 | 4 | 4,615 | ||||||||||||
Total segment operating expenses | 12,857 | 13,121 | (8 | ) | 25,970 | |||||||||||
Segment operating income | 4,623 | 1,549 | 16 | 6,188 | ||||||||||||
Interest expense | - | - | 829 | 829 | ||||||||||||
Equity in net income (loss) of affiliates | (18 | ) | - | 109 | 91 | |||||||||||
Other income (expense) – net | - | - | 50 | 50 | ||||||||||||
Segment income (loss) before income taxes | $ | 4,605 | $ | 1,549 | $ | (654 | ) | $ | 5,500 | |||||||
For the nine months ended September 30, 2013 | Consolidated Results | |||||||||||||||
Wireless | Wireline | Corporate and Other | ||||||||||||||
Service | $ | 45,892 | $ | 43,266 | $ | - | $ | 89,158 | ||||||||
Equipment | 5,570 | 832 | 29 | 6,431 | ||||||||||||
Total segment operating revenues | 51,462 | 44,098 | 29 | 95,589 | ||||||||||||
Operations and support expenses | 31,932 | 31,137 | 564 | 63,633 | ||||||||||||
Depreciation and amortization expenses | 5,553 | 8,146 | 16 | 13,715 | ||||||||||||
Total segment operating expenses | 37,485 | 39,283 | 580 | 77,348 | ||||||||||||
Segment operating income (loss) | 13,977 | 4,815 | (551 | ) | 18,241 | |||||||||||
Interest expense | - | - | 2,481 | 2,481 | ||||||||||||
Equity in net income (loss) of affiliates | (55 | ) | 1 | 548 | 494 | |||||||||||
Other income (expense) – net | - | - | 370 | 370 | ||||||||||||
Segment income (loss) before income taxes | $ | 13,922 | $ | 4,816 | $ | (2,114 | ) | $ | 16,624 |
For the three months ended September 30, 2014 | ||||||||||||||||||||||||||||
Revenue | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | ||||||||||||||||||||||
Business Solutions | $ | 17,487 | $ | 11,295 | $ | 6,192 | $ | 2,331 | $ | 3,861 | $ | - | $ | 3,861 | ||||||||||||||
Entertainment and Internet Services | 5,553 | 4,781 | 772 | 1,109 | (337 | ) | - | (337 | ) | |||||||||||||||||||
Consumer Mobility | 9,208 | 5,731 | 3,477 | 950 | 2,527 | (1 | ) | 2,526 | ||||||||||||||||||||
International | - | - | - | - | - | - | - | |||||||||||||||||||||
Segment Total | 32,248 | 21,807 | 10,441 | 4,390 | 6,051 | (1 | ) | 6,050 | ||||||||||||||||||||
Corporate and Other | 709 | 791 | (82 | ) | 24 | (106 | ) | |||||||||||||||||||||
Acquisition-related items | - | 213 | (213 | ) | 125 | (338 | ) | |||||||||||||||||||||
Certain significant items | - | - | - | - | - | |||||||||||||||||||||||
AT&T Inc. | $ | 32,957 | $ | 22,811 | $ | 10,146 | $ | 4,539 | $ | 5,607 | ||||||||||||||||||
For the nine months ended September 30, 2014 | ||||||||||||||||||||||||||||
Revenue | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | ||||||||||||||||||||||
Business Solutions | $ | 51,877 | $ | 32,836 | $ | 19,041 | $ | 7,009 | $ | 12,032 | $ | - | $ | 12,032 | ||||||||||||||
Entertainment and Internet Services | 16,640 | 14,182 | 2,458 | 3,396 | (938 | ) | - | (938 | ) | |||||||||||||||||||
Consumer Mobility | 27,247 | 17,173 | 10,074 | 2,846 | 7,228 | (1 | ) | 7,227 | ||||||||||||||||||||
International | - | - | - | - | - | 153 | 153 | |||||||||||||||||||||
Segment Total | 95,764 | 64,191 | 31,573 | 13,251 | 18,322 | 152 | 18,474 | |||||||||||||||||||||
Corporate and Other | 2,244 | 2,027 | 217 | 77 | 140 | |||||||||||||||||||||||
Acquisition-related items | - | 403 | (403 | ) | 378 | (781 | ) | |||||||||||||||||||||
Certain significant items | - | - | - | - | - | |||||||||||||||||||||||
AT&T Inc. | $ | 98,008 | $ | 66,621 | $ | 31,387 | $ | 13,706 | $ | 17,681 |
The following table is a reconciliation of operating income (loss) to "Income Before Income Taxes" reported on our consolidated statements of income. | ||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Business Solutions | $ | 4,297 | $ | 3,861 | $ | 12,671 | $ | 12,032 | ||||||||
Entertainment and Internet Services | 1,021 | (337 | ) | 543 | (938 | ) | ||||||||||
Consumer Mobility | 2,743 | 2,526 | 7,597 | 7,227 | ||||||||||||
International | (87 | ) | - | (228 | ) | 153 | ||||||||||
Segment Contribution | 7,974 | 6,050 | 20,583 | 18,474 | ||||||||||||
Reconciling Items: | ||||||||||||||||
Corporate and Other | (2 | ) | (106 | ) | 152 | 140 | ||||||||||
Merger and integration charges | (696 | ) | (213 | ) | (1,689 | ) | (403 | ) | ||||||||
Amortization of intangibles acquired | (1,198 | ) | (125 | ) | (1,439 | ) | (378 | ) | ||||||||
Employee separation charges | (122 | ) | - | (339 | ) | - | ||||||||||
Other (expenses) credits | (35 | ) | - | (35 | ) | - | ||||||||||
Less: segment equity in net (income) loss of affiliates | 2 | 1 | 20 | (152 | ) | |||||||||||
AT&T Operating Income | 5,923 | 5,607 | 17,253 | 17,681 | ||||||||||||
Interest Expense | 1,146 | 1,016 | 2,977 | 2,757 | ||||||||||||
Equity in net income (loss) of affiliates | 15 | (2 | ) | 48 | 188 | |||||||||||
Other income (expense) - Net | (57 | ) | 42 | 61 | 1,456 | |||||||||||
Income Before Income Taxes | $ | 4,735 | $ | 4,631 | $ | 14,385 | $ | 16,568 |
Three months ended | Nine months ended | Three months ended | Nine months ended | |||||||||||||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||
Pension cost: | ||||||||||||||||||||||||||||||||
Service cost – benefits earned during the period | $ | 282 | $ | 331 | $ | 846 | $ | 991 | $ | 305 | $ | 282 | $ | 904 | $ | 846 | ||||||||||||||||
Interest cost on projected benefit obligation | 661 | 608 | 1,984 | 1,822 | 477 | 661 | 1,424 | 1,984 | ||||||||||||||||||||||||
Expected return on assets | (849 | ) | (828 | ) | (2,549 | ) | (2,484 | ) | (832 | ) | (849 | ) | (2,484 | ) | (2,549 | ) | ||||||||||||||||
Amortization of prior service credit | (24 | ) | (25 | ) | (71 | ) | (71 | ) | (25 | ) | (24 | ) | (77 | ) | (71 | ) | ||||||||||||||||
Net pension cost | $ | 70 | $ | 86 | $ | 210 | $ | 258 | ||||||||||||||||||||||||
Net pension (credit) cost | $ | (75 | ) | $ | 70 | $ | (233 | ) | $ | 210 | ||||||||||||||||||||||
Postretirement cost: | ||||||||||||||||||||||||||||||||
Service cost – benefits earned during the period | $ | 59 | $ | 95 | $ | 175 | $ | 286 | $ | 55 | $ | 59 | $ | 166 | $ | 175 | ||||||||||||||||
Interest cost on accumulated postretirement benefit obligation | 365 | 389 | 1,094 | 1,168 | 242 | 365 | 725 | 1,094 | ||||||||||||||||||||||||
Expected return on assets | (165 | ) | (177 | ) | (491 | ) | (533 | ) | (105 | ) | (165 | ) | (315 | ) | (491 | ) | ||||||||||||||||
Amortization of prior service credit | (362 | ) | (263 | ) | (1,086 | ) | (788 | ) | (320 | ) | (362 | ) | (959 | ) | (1,086 | ) | ||||||||||||||||
Net postretirement (credit) cost | $ | (103 | ) | $ | 44 | $ | (308 | ) | $ | 133 | $ | (128 | ) | $ | (103 | ) | $ | (383 | ) | $ | (308 | ) | ||||||||||
Combined net pension and postretirement (credit) cost | $ | (33 | ) | $ | 130 | $ | (98 | ) | $ | 391 | $ | (203 | ) | $ | (33 | ) | $ | (616 | ) | $ | (98 | ) |
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. |
September 30, 2014 | December 31, 2013 | September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | Carrying | Fair | |||||||||||||||||||||||
Amount | Value | Amount | Value | Amount | Value | Amount | Value | |||||||||||||||||||||||
Notes and debentures | $ | 75,226 | $ | 82,938 | $ | 74,484 | $ | 79,309 | $ | 126,042 | $ | 129,524 | $ | 81,632 | $ | 90,367 | ||||||||||||||
Commercial paper | - | - | 20 | 20 | ||||||||||||||||||||||||||
Bank borrowings | 5 | 5 | 1 | 1 | 4 | 4 | 5 | 5 | ||||||||||||||||||||||
Investment securities | 2,643 | 2,643 | 2,450 | 2,450 | 2,644 | 2,644 | 2,735 | 2,735 |
September 30, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Available-for-Sale Securities | |||||||||||||||
Domestic equities | $ | 1,094 | $ | - | $ | - | $ | 1,094 | |||||||
International equities | 561 | - | - | 561 | |||||||||||
Fixed income bonds | - | 737 | - | 737 | |||||||||||
Asset Derivatives1 | |||||||||||||||
Interest rate swaps | - | 217 | - | 217 | |||||||||||
Cross-currency swaps | - | 796 | - | 796 | |||||||||||
Liability Derivatives1 | |||||||||||||||
Cross-currency swaps | - | (3,202 | ) | - | (3,202 | ) | |||||||||
Foreign exchange contracts | - | (1 | ) | - | (1 | ) | |||||||||
December 31, 2014 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Available-for-Sale Securities | |||||||||||||||
Domestic equities | $ | 1,160 | $ | - | $ | - | $ | 1,160 | |||||||
International equities | 553 | - | - | 553 | |||||||||||
Fixed income bonds | - | 836 | - | 836 | |||||||||||
Asset Derivatives1 | |||||||||||||||
Interest rate swaps | - | 157 | - | 157 | |||||||||||
Cross-currency swaps | - | 1,243 | - | 1,243 | |||||||||||
Interest rate locks | - | 5 | - | 5 | |||||||||||
Liability Derivatives1 | |||||||||||||||
Cross-currency swaps | - | (1,506 | ) | - | (1,506 | ) | |||||||||
Interest rate locks | - | (133 | ) | - | (133 | ) | |||||||||
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. |
September 30, 2014 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Available-for-Sale Securities | |||||||||||||||
Domestic equities | $ | 1,108 | $ | - | $ | - | $ | 1,108 | |||||||
International equities | 541 | - | - | 541 | |||||||||||
Fixed income bonds | - | 913 | - | 913 | |||||||||||
Asset Derivatives1 | |||||||||||||||
Interest rate swaps | - | 131 | - | 131 | |||||||||||
Cross-currency swaps | - | 1,536 | - | 1,536 | |||||||||||
Liability Derivatives1 | |||||||||||||||
Interest rate swaps | - | (10 | ) | - | (10 | ) | |||||||||
Cross-currency swaps | - | (901 | ) | - | (901 | ) | |||||||||
December 31, 2013 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Available-for-Sale Securities | |||||||||||||||
Domestic equities | $ | 1,049 | $ | - | $ | - | $ | 1,049 | |||||||
International equities | 563 | - | - | 563 | |||||||||||
Fixed income bonds | - | 759 | - | 759 | |||||||||||
Asset Derivatives1 | |||||||||||||||
Interest rate swaps | - | 191 | - | 191 | |||||||||||
Cross-currency swaps | - | 1,951 | - | 1,951 | |||||||||||
Liability Derivatives1 | |||||||||||||||
Interest rate swaps | - | (7 | ) | - | (7 | ) | |||||||||
Cross-currency swaps | - | (519 | ) | - | (519 | ) | |||||||||
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. |
September 30, | December 31, | |||||||
2015 | 2014 | |||||||
Interest rate swaps | $ | 7,050 | $ | 6,550 | ||||
Cross-currency swaps | 29,642 | 26,505 | ||||||
Interest rate locks | - | 6,750 | ||||||
Foreign exchange contracts | 23 | - | ||||||
Total | $ | 36,715 | $ | 39,805 |
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 | Nine months ended | |||||||||||||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||||
Interest rate swaps (Interest expense): | |||||||||||||||
Gain (Loss) on interest rate swaps | $ | 54 | $ | (70 | ) | $ | 65 | $ | (59 | ) | |||||
Gain (Loss) on long-term debt | (54 | ) | 70 | (65 | ) | 59 |
Three months ended | Nine months ended | |||||||||||||||
Cash Flow Hedging Relationships | September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||||
Cross-currency swaps: | ||||||||||||||||
Gain (Loss) recognized in accumulated OCI | $ | (678 | ) | $ | 567 | $ | (1,008 | ) | $ | 418 | ||||||
Interest rate locks: | ||||||||||||||||
Gain (Loss) recognized in accumulated OCI | - | - | (361 | ) | - | |||||||||||
Interest income (expense) reclassified from accumulated OCI into income | (17 | ) | (11 | ) | (43 | ) | (33 | ) | ||||||||
Foreign exchange contracts: | ||||||||||||||||
Gain (Loss) recognized in accumulated OCI | - | - | - | (2 | ) |
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Interest rate swaps | $ | 6,550 | $ | 4,750 | ||||
Cross-currency swaps | 20,650 | 17,787 | ||||||
Total | $ | 27,200 | $ | 22,537 |
Following is 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 | Nine months ended | |||||||||||||
September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | ||||||||||||
Interest rate swaps (Interest expense): | |||||||||||||||
Gain (Loss) on interest rate swaps | $ | (70 | ) | $ | 9 | $ | (59 | ) | $ | (78 | ) | ||||
Gain (Loss) on long-term debt | 70 | (9 | ) | 59 | 78 |
Three months ended | Nine months ended | |||||||||||||||
Cash Flow Hedging Relationships | September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | ||||||||||||
Cross-currency swaps: | ||||||||||||||||
Gain (Loss) recognized in accumulated OCI | $ | 567 | $ | 482 | $ | 418 | $ | 807 | ||||||||
Interest rate locks: | ||||||||||||||||
Interest income (expense) reclassified from accumulated OCI into income | (11 | ) | (11 | ) | (33 | ) | (34 | ) | ||||||||
Foreign exchange contracts: | ||||||||||||||||
Gain (Loss) recognized in accumulated OCI | - | 5 | (2 | ) | 5 |
DIRECTV | ||||
Assets acquired | ||||
Cash | $ | 4,763 | ||
Accounts receivable | 2,116 | |||
All other current assets | 1,795 | |||
Property, plant and equipment (including satellites) | 8,811 | |||
Intangible assets not subject to amortization | ||||
Orbital slots | 11,946 | |||
��Trade name (Latin America) | 1,371 | |||
Intangible assets subject to amortization | ||||
Customer lists and relationships | 19,803 | |||
Trade name (U.S.) | 1,634 | |||
Other | 324 | |||
Investments and other assets | 3,730 | |||
Goodwill | 35,343 | |||
Total assets acquired | 91,636 | |||
Liabilities assumed | ||||
Current liabilities, excluding current portion of long-term debt | 5,886 | |||
Long-term debt | 20,500 | |||
Other noncurrent liabilities | 17,492 | |||
Total liabilities assumed | 43,878 | |||
Net assets acquired | 47,758 | |||
Noncontrolling interest | (354 | ) | ||
Aggregate value of consideration paid | $ | 47,404 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Total operating revenues 1 | $ | 41,230 | $ | 41,301 | $ | 123,346 | $ | 122,263 | ||||||||
Net Income Attributable to AT&T | 2,985 | 3,429 | 9,210 | 11,065 | ||||||||||||
Basic Earnings Per Share Attributable to AT&T | $ | 0.50 | $ | 0.56 | $ | 1.69 | $ | 1.80 | ||||||||
Diluted Earnings Per Share Attributable to AT&T | $ | 0.50 | $ | 0.55 | $ | 1.69 | $ | 1.79 |
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Assets held for sale: | ||||||||
Current assets | $ | 138 | $ | 155 | ||||
Property, plant and equipment - net | 1,436 | 1,289 | ||||||
Goodwill | 799 | 799 | ||||||
Other assets | 18 | 17 | ||||||
Total assets | $ | 2,391 | $ | 2,260 | ||||
Liabilities related to assets held for sale: | ||||||||
Current liabilities | $ | 122 | $ | 128 | ||||
Noncurrent liabilities | 537 | 480 | ||||||
Total liabilities | $ | 659 | $ | 608 |
Wireless | Wireline | Business Solutions | Entertainment and Internet Services | Consumer Mobility | International | Total | ||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 36,106 | $ | 33,167 | $ | - | $ | - | $ | - | $ | - | $ | 69,273 | ||||||||||||||
Goodwill Acquired | 367 | - | - | - | - | - | 367 | |||||||||||||||||||||
Other | (4 | ) | 56 | - | - | - | - | 52 | ||||||||||||||||||||
Balance as of December 31, 2014 | 36,469 | 33,223 | - | - | - | - | 69,692 | |||||||||||||||||||||
Goodwill Acquired | 6 | - | - | 31,653 | - | 5,228 | 36,887 | |||||||||||||||||||||
Foreign Currency Translation Adjustments | - | - | - | - | - | (610 | ) | (610 | ) | |||||||||||||||||||
Allocation of Goodwill | (36,471 | ) | (33,226 | ) | 44,763 | 8,422 | 16,512 | - | - | |||||||||||||||||||
Other | (4 | ) | 3 | - | - | - | (2 | ) | (3 | ) | ||||||||||||||||||
Balance as of September 30, 2015 | $ | - | $ | - | $ | 44,763 | $ | 40,075 | $ | 16,512 | $ | 4,616 | $ | 105,966 |
Three months | Nine months | Three months ended | Nine months ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
Gross receivables sold | $ | 1,601 | $ | 1,028 | $ | 5,964 | $ | 2,665 | ||||||||||||||||
Net receivables sold1 | $ | 885 | $ | 2,276 | 1,431 | 885 | 5,367 | 2,276 | ||||||||||||||||
Cash proceeds received | 556 | 1,375 | 980 | 556 | 3,553 | 1,375 | ||||||||||||||||||
Deferred purchase price recorded | 324 | 889 | 456 | 324 | 1,819 | 889 | ||||||||||||||||||
1 Gross receivables sold were $1,028 and $2,665 for the third quarter and the first nine months of 2014, respectively, before deducting the allowance, imputed interest and trade-in right guarantees. | ||||||||||||||||||||||||
1 Receivables net of allowance, imputed interest and trade-in right guarantees. | 1 Receivables net of allowance, imputed interest and trade-in right guarantees. |
Third Quarter | Nine-Month Period | Third Quarter | Nine-Month Period | |||||||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | Percent Change | 2014 | 2013 | Percent Change | 2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||||||||||||||||||||
Operating Revenues | $ | 32,957 | $ | 32,158 | 2.5 | % | $ | 98,008 | $ | 95,589 | 2.5 | % | ||||||||||||||||||||||||||||||||||||
Service | $ | 35,625 | $ | 29,790 | 19.6 | % | $ | 94,128 | $ | 89,122 | 5.6 | % | ||||||||||||||||||||||||||||||||||||
Equipment | 3,466 | 3,167 | 9.4 | 10,554 | 8,886 | 18.8 | ||||||||||||||||||||||||||||||||||||||||||
Total Operating Revenues | 39,091 | 32,957 | 18.6 | 104,682 | 98,008 | 6.8 | ||||||||||||||||||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||||||||||||
Cost of services and sales | 14,541 | 13,403 | 8.5 | 42,074 | 39,227 | 7.3 | ||||||||||||||||||||||||||||||||||||||||||
Equipment | 4,501 | 4,432 | 1.6 | 13,400 | 12,503 | 7.2 | ||||||||||||||||||||||||||||||||||||||||||
Broadcast, programming and operations | 4,081 | 1,038 | - | 6,351 | 3,019 | - | ||||||||||||||||||||||||||||||||||||||||||
Other cost of services (exclusive of depreciation and amortization shown separately below) | 9,214 | 8,866 | 3.9 | 27,604 | 26,167 | 5.5 | ||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 8,475 | 7,952 | 6.6 | 24,932 | 24,406 | 2.2 | 9,107 | 8,475 | 7.5 | 24,535 | 24,932 | (1.6 | ) | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | 4,539 | 4,615 | (1.6 | ) | 13,706 | 13,715 | (0.1 | ) | 6,265 | 4,539 | 38.0 | 15,539 | 13,706 | 13.4 | ||||||||||||||||||||||||||||||||||
Total Operating Expenses | 27,555 | 25,970 | 6.1 | 80,712 | 77,348 | 4.3 | 33,168 | 27,350 | 21.3 | 87,429 | 80,327 | 8.8 | ||||||||||||||||||||||||||||||||||||
Operating Income | 5,402 | 6,188 | (12.7 | ) | 17,296 | 18,241 | (5.2 | ) | 5,923 | 5,607 | 5.6 | 17,253 | 17,681 | (2.4 | ) | |||||||||||||||||||||||||||||||||
Income Before Income Taxes | 4,426 | 5,500 | (19.5 | ) | 16,183 | 16,624 | (2.7 | ) | 4,735 | 4,631 | 2.2 | 14,385 | 16,568 | (13.2 | ) | |||||||||||||||||||||||||||||||||
Net Income | 3,059 | 3,905 | (21.7 | ) | 10,414 | 11,558 | (9.9 | ) | 3,078 | 3,187 | (3.4 | ) | 9,601 | 10,654 | (9.9 | ) | ||||||||||||||||||||||||||||||||
Net Income Attributable to AT&T | $ | 3,002 | $ | 3,814 | (21.3 | )% | $ | 10,201 | $ | 11,336 | (10.0 | )% | $ | 2,994 | $ | 3,130 | (4.3 | ) % | $ | 9,339 | $ | 10,441 | (10.6 | ) % |
Third Quarter | Nine-Month Period | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
América Móvil | $ | - | $ | 85 | $ | 153 | $ | 410 | ||||||||
YP Holdings LLC (YP Holdings) | 23 | 23 | 108 | 138 | ||||||||||||
SoftcardTM Mobile Wallet Joint Venture | (25 | ) | (18 | ) | (74 | ) | (55 | ) | ||||||||
Other | - | 1 | 1 | 1 | ||||||||||||
Equity in Net Income (Loss) of Affiliates | $ | (2 | ) | $ | 91 | $ | 188 | $ | 494 |
Selected Financial and Operating Data | ||||||||
September 30, | ||||||||
Subscribers and connections in (000s) | 2015 | 2014 | ||||||
Domestic wireless subscribers | 126,406 | 118,650 | ||||||
Mexican wireless subscribers | 8,091 | - | ||||||
Total wireless subscribers | 134,497 | 118,650 | ||||||
Domestic satellite video subscribers | 19,570 | - | ||||||
U-verse video subscribers1 | 5,880 | 6,067 | ||||||
Latin America satellite video subscribers2 | 12,544 | - | ||||||
Total video subscribers | 37,994 | 6,067 | ||||||
Total domestic broadband connections | 15,832 | 16,486 | ||||||
Network access lines in service 1 | 17,352 | 21,464 | ||||||
U-Verse VoIP connections1 | 5,443 | 4,756 | ||||||
Debt ratio3 | 50.8 | % | 43.9 | % | ||||
Net Debt Ratio4 | 48.3 | % | 42.5 | % | ||||
Ratio of earnings to fixed charges5 | 3.85 | 5.08 | ||||||
Number of AT&T employees6 | 281,240 | 247,700 |
Selected Financial and Operating Data | ||||||||
September 30, | ||||||||
Subscribers and connections in (000s) | 2014 | 2013 | ||||||
Wireless subscribers | 118,650 | 109,460 | ||||||
Network access lines in service | 21,464 | 25,680 | ||||||
U-Verse VoIP connections | 4,756 | 3,616 | ||||||
Total wireline broadband connections | 16,486 | 16,427 | ||||||
Debt ratio1 | 44.8 | % | 46.9 | % | ||||
Ratio of earnings to fixed charges2 | 4.99 | 5.50 | ||||||
Number of AT&T employees | 247,700 | 246,740 |
Business Solutions | ||||||||||||||||||||||||
Segment Results | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
Segment operating revenues | ||||||||||||||||||||||||
Wireless service | $ | 7,732 | $ | 7,542 | 2.5 | % | $ | 23,003 | $ | 22,593 | 1.8 | % | ||||||||||||
Fixed strategic services | 2,763 | 2,454 | 12.6 | 8,083 | 7,103 | 13.8 | ||||||||||||||||||
Legacy voice and data services | 4,499 | 4,928 | (8.7 | ) | 13,743 | 15,055 | (8.7 | ) | ||||||||||||||||
Other services | 885 | 977 | (9.4 | ) | 2,585 | 2,834 | (8.8 | ) | ||||||||||||||||
Wireless equipment | 1,813 | 1,586 | 14.3 | 5,499 | 4,292 | 28.1 | ||||||||||||||||||
Total Segment Operating Revenues | 17,692 | 17,487 | 1.2 | 52,913 | 51,877 | 2.0 | ||||||||||||||||||
Segment operating expenses | ||||||||||||||||||||||||
Operations and support | 10,921 | 11,295 | (3.3 | ) | 32,966 | 32,836 | 0.4 | |||||||||||||||||
Depreciation and amortization | 2,474 | 2,331 | 6.1 | 7,276 | 7,009 | 3.8 | ||||||||||||||||||
Total Segment Operating Expenses | 13,395 | 13,626 | (1.7 | ) | 40,242 | 39,845 | 1.0 | |||||||||||||||||
Segment Operating Income | 4,297 | 3,861 | 11.3 | 12,671 | 12,032 | 5.3 | ||||||||||||||||||
Equity in Net Income of Affiliates | - | - | - | - | - | - | ||||||||||||||||||
Segment Contribution | $ | 4,297 | $ | 3,861 | 11.3 | % | $ | 12,671 | $ | 12,032 | 5.3 | % |
Wireless | ||||||||||||||||||||||||
Segment Results | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2014 | 2013 | Percent Change | 2014 | 2013 | Percent Change | |||||||||||||||||||
Segment operating revenues | ||||||||||||||||||||||||
Service | $ | 15,423 | $ | 15,460 | (0.2 | )% | $ | 45,958 | $ | 45,892 | 0.1 | % | ||||||||||||
Equipment | 2,914 | 2,020 | 44.3 | 8,175 | 5,570 | 46.8 | ||||||||||||||||||
Total Segment Operating Revenues | 18,337 | 17,480 | 4.9 | 54,133 | 51,462 | 5.2 | ||||||||||||||||||
Segment operating expenses | ||||||||||||||||||||||||
Operations and support | 11,855 | 10,982 | 7.9 | 34,305 | 31,932 | 7.4 | ||||||||||||||||||
Depreciation and amortization | 1,965 | 1,875 | 4.8 | 5,931 | 5,553 | 6.8 | ||||||||||||||||||
Total Segment Operating Expenses | 13,820 | 12,857 | 7.5 | 40,236 | 37,485 | 7.3 | ||||||||||||||||||
Segment Operating Income | 4,517 | 4,623 | (2.3 | ) | 13,897 | 13,977 | (0.6 | ) | ||||||||||||||||
Equity in Net Income (Loss) of | ||||||||||||||||||||||||
Affiliates | (26) | (18) | (44.4 | ) | (75) | (55) | (36.4 | ) | ||||||||||||||||
Segment Income | $ | 4,491 | $ | 4,605 | (2.5 | )% | $ | 13,822 | $ | 13,922 | (0.7 | )% |
The following table highlights other key measures of performance for the Business Solutions segment: | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
(in 000s) | ||||||||||||||||||||||||
Business Wireless Subscribers | ||||||||||||||||||||||||
Postpaid | 47,414 | 44,063 | 7.6 | % | ||||||||||||||||||||
Reseller | 83 | 6 | - | |||||||||||||||||||||
Connected devices 1 | 24,064 | 18,482 | 30.2 | |||||||||||||||||||||
Total Business Wireless Subscribers | 71,561 | 62,551 | 14.4 | |||||||||||||||||||||
Business Wireless Net Additions 2 | ||||||||||||||||||||||||
Postpaid | 265 | 545 | (51.4 | ) % | 850 | 1,498 | (43.3 | ) | ||||||||||||||||
Reseller | 8 | (4) | - | 14 | 4 | - | ||||||||||||||||||
Connected devices 1 | 1,602 | 1,275 | 25.6 | 4,104 | 2,144 | 91.4 | ||||||||||||||||||
Business Wireless Net Subscriber Additions | 1,875 | 1,816 | 3.2 | 4,968 | 3,646 | 36.3 | ||||||||||||||||||
Business Wireless Postpaid Churn 2, 3 | 1.05 | % | 0.84 % | 21 BP | 0.95 | % | 0.84 % | 11 BP | ||||||||||||||||
Business IP Broadband Connections | 891 | 791 | 12.6 | |||||||||||||||||||||
Business IP Broadband Net Additions | 20 | 43 | (53.5 | ) % | 70 | 159 | (56.0 | ) % | ||||||||||||||||
1 Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets. | ||||||||||||||||||||||||
2 Excludes migrations between AT&T segments and/or subscriber categories and acquisition-related additions during the period. | ||||||||||||||||||||||||
3 Calculated by dividing the aggregate number of wireless subscribers who canceled service during a period divided by the total number of wireless subscribers at the beginning of that period. The churn rate for the period is equal to the average of the churn rate for each month of that period. |
· | Lower commission costs of $304 primarily due to lower average commission rates and fewer upgrade transactions. |
· | Reductions of $58 in access costs, primarily due to lower interconnect, roaming and traffic compensations costs. |
· | Lower customer service costs of $45 primarily due to our simplified offers and increased efforts to take care of customers on their first call. |
· | Lower employee charges resulting from workforce reductions and other cost initiatives. |
· | Increased equipment expense of $765 due to the continuing trend of customers choosing higher-cost devices. |
· | Higher wireless handset insurance cost of $304 resulting from higher claim rates and costs per claim. |
· | Lower commission costs of $437 primarily due to lower average commission rates and fewer upgrade transactions.. |
· | Lower customer service costs of $160 primarily due to our simplified offers and increased efforts to take care of customers on their first call. |
· | Reductions of $159 in access costs, primarily due to lower interconnect, roaming and traffic compensations costs. |
· | Lower employee charges resulting from workforce reductions and other cost initiatives. |
Entertainment and Internet Services | ||||||||||||||||||||||||
Segment Results | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
Segment operating revenues | ||||||||||||||||||||||||
Video entertainment | $ | 7,162 | $ | 1,719 | - | $ | 11,024 | $ | 5,016 | - | ||||||||||||||
High-speed Internet | 1,685 | 1,414 | 19.2 | 4,861 | 4,040 | 20.3 | ||||||||||||||||||
Legacy voice and data services | 1,419 | 1,834 | (22.6 | ) | 4,547 | 5,897 | (22.9 | ) | ||||||||||||||||
Equipment and other | 592 | 586 | 1.0 | 1,868 | 1,687 | 10.7 | ||||||||||||||||||
Total Segment Operating Revenues | 10,858 | 5,553 | 95.5 | 22,300 | 16,640 | 34.0 | ||||||||||||||||||
Segment operating expenses | ||||||||||||||||||||||||
Operations and support | 8,450 | 4,781 | 76.7 | 18,222 | 14,182 | 28.5 | ||||||||||||||||||
Depreciation and amortization | 1,389 | 1,109 | 25.2 | 3,519 | 3,396 | 3.6 | ||||||||||||||||||
Total Segment Operating Expenses | 9,839 | 5,890 | 67.0 | 21,741 | 17,578 | 23.7 | ||||||||||||||||||
Segment Operating Income | 1,019 | (337) | - | 559 | (938) | - | ||||||||||||||||||
Equity in Net Income (Loss) of Affiliates | 2 | - | - | (16 | ) | - | - | |||||||||||||||||
Segment Contribution | $ | 1,021 | $ | (337) | - | $ | 543 | $ | (938) | - |
The following table highlights other key measures of performance for the Wireless segment: | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2014 | 2013 | Percent Change | 2014 | 2013 | Percent Change | |||||||||||||||||||
(in 000s) | ||||||||||||||||||||||||
Wireless Subscribers 1 | 118,650 | 109,460 | 8.4 | % | ||||||||||||||||||||
Postpaid smartphones | 55,791 | 50,637 | 10.2 | |||||||||||||||||||||
Postpaid feature phones and data-centric | ||||||||||||||||||||||||
devices | 19,314 | 21,395 | (9.7 | ) | ||||||||||||||||||||
Postpaid | 75,105 | 72,032 | 4.3 | |||||||||||||||||||||
Prepaid | 11,179 | 7,425 | 50.6 | |||||||||||||||||||||
Reseller | 13,884 | 14,089 | (1.5 | ) | ||||||||||||||||||||
Connected devices 2 | 18,482 | 15,914 | 16.1 | |||||||||||||||||||||
Total Wireless Subscribers | 118,650 | 109,460 | 8.4 | |||||||||||||||||||||
Net Additions 3 | ||||||||||||||||||||||||
Postpaid | 785 | 363 | - | 2,436 | 1,210 | - | ||||||||||||||||||
Prepaid | (140 | ) | 192 | - | (595 | ) | 19 | - | ||||||||||||||||
Reseller | 87 | (285 | ) | - | (281 | ) | (951 | ) | 70.5 | |||||||||||||||
Connected devices2 | 1,275 | 719 | 77.3 | 2,143 | 1,634 | 31.2 | ||||||||||||||||||
Net Subscriber Additions | 2,007 | 989 | - | 3,703 | 1,912 | 93.7 | ||||||||||||||||||
Mobile Share connections | 46,909 | 16,130 | - | |||||||||||||||||||||
Smartphones sold under our installment | ||||||||||||||||||||||||
program during period | 3,401 | 401 | - | 9,411 | 401 | - | ||||||||||||||||||
Total Churn4 | 1.36 | % | 1.31 | % | 5 BP | 1.41 | % | 1.35 | % | 6 BP | ||||||||||||||
Postpaid Churn4 | 0.99 | % | 1.07 | % | (8) BP | 0.97 | % | 1.04 | % | (7) BP |
The following table highlights other key measures of performance for the Entertainment and Internet Services segment: | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
(in 000s) | ||||||||||||||||||||||||
Video Connections | ||||||||||||||||||||||||
Satellite | 19,570 | - | - | |||||||||||||||||||||
U-verse | 5,854 | 5,848 | 0.1 | |||||||||||||||||||||
Total Video Connections | 25,424 | 5,848 | - | |||||||||||||||||||||
Video Net Additions 1 | ||||||||||||||||||||||||
Satellite | 26 | - | - | 26 | - | - | ||||||||||||||||||
U-verse | (92 | ) | 212 | - | (66 | ) | 591 | - | ||||||||||||||||
Net Video Additions | (66 | ) | 212 | - | (40 | ) | 591 | - | �� | |||||||||||||||
Broadband Connections | ||||||||||||||||||||||||
IP | 12,185 | 11,010 | 10.7 | |||||||||||||||||||||
DSL | 2,137 | 3,455 | (38.1 | ) | ||||||||||||||||||||
Total Broadband Connections | 14,322 | 14,465 | (1.0 | ) | ||||||||||||||||||||
Broadband Net Additions | ||||||||||||||||||||||||
IP | 172 | 547 | (68.6 | ) | 802 | 1,527 | (47.5 | ) | ||||||||||||||||
DSL | (278 | ) | (479) | 42.0 | (922 | ) | (1,375) | 32.9 | ||||||||||||||||
Net Broadband Additions | (106 | ) | 68 | - | (120 | ) | 152 | - | ||||||||||||||||
Retail Consumer Switched Access Lines | 7,675 | 9,851 | (22.1 | ) | ||||||||||||||||||||
U-verse Consumer VoIP Connections | 5,216 | 4,530 | 15.1 | |||||||||||||||||||||
Total Retail Consumer Voice Connections | 12,891 | 14,381 | (10.4 | ) % | ||||||||||||||||||||
1 Excludes acquisition-related additions during the period. |
Consumer Mobility | ||||||||||||||||||||||||
Segment Results | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
Segment operating revenues | ||||||||||||||||||||||||
Postpaid wireless | $ | 5,527 | $ | 6,071 | (9.0 | ) % | $ | 16,783 | $ | 18,490 | (9.2 | ) % | ||||||||||||
Prepaid wireless | 1,198 | 1,163 | 3.0 | 3,411 | 3,106 | 9.8 | ||||||||||||||||||
Other service revenue | 638 | 646 | (1.2 | ) | 1,825 | 1,768 | 3.2 | |||||||||||||||||
Equipment | 1,421 | 1,328 | 7.0 | 4,298 | 3,883 | 10.7 | ||||||||||||||||||
Total Segment Operating Revenues | 8,784 | 9,208 | (4.6 | ) | 26,317 | 27,247 | (3.4 | ) | ||||||||||||||||
Segment operating expenses | ||||||||||||||||||||||||
Operations and support | 5,065 | 5,731 | (11.6 | ) | 15,808 | 17,173 | (7.9 | ) | ||||||||||||||||
Depreciation and amortization | 976 | 950 | 2.7 | 2,912 | 2,846 | 2.3 | ||||||||||||||||||
Total Segment Operating Expenses | 6,041 | 6,681 | (9.6 | ) | 18,720 | 20,019 | (6.5 | ) | ||||||||||||||||
Segment Operating Income | 2,743 | 2,527 | 8.5 | 7,597 | 7,228 | 5.1 | ||||||||||||||||||
Equity in Net Income (Loss) of Affiliates | - | (1) | - | - | (1) | - | ||||||||||||||||||
Segment Contribution | $ | 2,743 | $ | 2,526 | 8.6 | % | $ | 7,597 | $ | 7,227 | 5.1 | % |
The following table highlights other key measures of performance for the Consumer Mobility segment: | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
(in 000s) | ||||||||||||||||||||||||
Consumer Mobility Subscribers | ||||||||||||||||||||||||
Postpaid | 29,257 | 31,043 | (5.8 | ) % | ||||||||||||||||||||
Prepaid | 10,988 | 10,026 | 9.6 | |||||||||||||||||||||
Reseller | 13,647 | 13,877 | (1.7 | ) | ||||||||||||||||||||
Connected devices 1 | 953 | 1,153 | (17.3 | ) | ||||||||||||||||||||
Total Consumer Mobility Subscribers | 54,845 | 56,099 | (2.2 | ) | ||||||||||||||||||||
Consumer Mobility Net Additions 2 | ||||||||||||||||||||||||
Postpaid | 23 | 240 | (90.4 | ) % | 289 | 938 | (69.2 | ) | ||||||||||||||||
Prepaid | 466 | (46) | - | 895 | (244) | - | ||||||||||||||||||
Reseller | 149 | 91 | 63.7 | (218 | ) | (286) | 23.8 | |||||||||||||||||
Connected devices 1 | - | (94) | - | (109 | ) | (351) | 68.9 | |||||||||||||||||
Consumer Mobility Net Subscriber Additions | 638 | 191 | - | 857 | 57 | - | ||||||||||||||||||
Consumer Mobility Postpaid Churn 2, 3 | 1.33 % | 1.20 % | 13 BP | 1.23 % | 1.15 % | 8 BP | ||||||||||||||||||
Total Consumer Mobility Churn 2, 3 | 1.90 % | 2.03 % | (13) BP | 1.93 % | 2.00 % | (7) BP | ||||||||||||||||||
1 Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets. | ||||||||||||||||||||||||
2 Excludes migrations between AT&T segments and/or subscriber categories and acquisition-related additions during the period. | ||||||||||||||||||||||||
3 Calculated by dividing the aggregate number of wireless subscribers who canceled service during a period divided by the total number of wireless subscribers at the beginning of that period. The churn rate for the period is equal to the average of the churn rate for each month of that period. |
· | Selling and commission expenses decreased $202 primarily due to lower average commission rates, including those paid under the AT&T Next program, combined with fewer upgrade transactions. |
· | Network costs decreased $135 primarily due to lower interconnect costs resulting from our ongoing network transition to more efficient Ethernet/IP-based technologies. |
· | Customer service costs decreased $108 primarily due to lower call volumes, reductions in professional services and contract labor, and lower payroll costs. |
· | Other cost of service decreased $90 primarily due to incollect roaming fee rate declines, which were partially offset by increased data volume. |
· | Selling and commission expenses decreased $403 primarily due to lower average commission rates, including those paid under the AT&T Next program, partially offset by an increase in rates associated with Cricket sales. |
· | Network costs decreased $299 primarily due to lower interconnect costs resulting from our ongoing network transition to more efficient Ethernet/IP-based technologies. |
· | Customer service costs decreased $187 primarily due to reduced salaries and benefits, lower outsourced vendor and professional services from reduced call volumes and integration activities. |
· | Other cost of service decreased $168 primarily due to incollect roaming fee rate declines, which were partially offset by increased data volume. |
International | ||||||||||||||||||||||||
Segment Results | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
Segment operating revenues | ||||||||||||||||||||||||
Video entertainment | $ | 945 | $ | - | - | $ | 945 | $ | - | - | ||||||||||||||
Wireless | 494 | - | - | 1,153 | - | - | ||||||||||||||||||
Equipment | 87 | - | - | 155 | - | - | ||||||||||||||||||
Total Segment Operating Revenues | $ | 1,526 | $ | - | - | $ | 2,253 | $ | - | - | ||||||||||||||
Segment operating expenses | ||||||||||||||||||||||||
Operations and support | $ | 1,384 | $ | - | - | $ | 2,131 | $ | - | - | ||||||||||||||
Depreciation and amortization | 225 | - | - | 346 | - | - | ||||||||||||||||||
Total Segment Operating Expenses | 1,609 | - | - | 2,477 | - | - | ||||||||||||||||||
Segment Operating Income (Loss) | (83 | ) | - | - | (224 | ) | - | - | ||||||||||||||||
Equity in Net Income (Loss) of Affiliates | (4 | ) | - | - | (4 | ) | 153 | - | ||||||||||||||||
Segment Contribution | $ | (87 | ) | $ | - | - | $ | (228 | ) | $ | 153 | - |
AT&T Mobility Results | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
Operating revenues | ||||||||||||||||||||||||
Service | $ | 15,095 | $ | 15,423 | (2.1 | ) % | $ | 45,022 | $ | 45,958 | (2.0 | ) % | ||||||||||||
Equipment | 3,234 | 2,914 | 11.0 | 9,797 | 8,175 | 19.8 | ||||||||||||||||||
Total Operating Revenues | 18,329 | 18,337 | - | 54,819 | 54,133 | 1.3 | ||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||
Operations and support | 10,865 | 11,683 | (7.0 | ) | 33,310 | 34,021 | (2.1 | ) | ||||||||||||||||
EBITDA | 7,464 | 6,654 | 12.2 | 21,509 | 20,112 | 6.9 | ||||||||||||||||||
Depreciation and amortization | 2,046 | 1,909 | 7.2 | 6,082 | 5,785 | 5.1 | ||||||||||||||||||
Total Operating Expenses | 12,911 | 13,592 | (5.0 | ) | 39,392 | 39,806 | (1.0 | ) | ||||||||||||||||
Operating Income | $ | 5,418 | $ | 4,745 | 14.2 | % | $ | 15,427 | $ | 14,327 | 7.7 | % |
The following table highlights other key measures of performance for AT&T Mobility: | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
(in 000s) | ||||||||||||||||||||||||
Wireless Subscribers 1 | ||||||||||||||||||||||||
Postpaid smartphones | 57,733 | 55,791 | 3.5 | % | ||||||||||||||||||||
Postpaid feature phones and data-centric devices | 18,938 | 19,314 | (1.9 | ) | ||||||||||||||||||||
Postpaid | 76,671 | 75,105 | 2.1 | |||||||||||||||||||||
Prepaid | 10,988 | 10,026 | 9.6 | |||||||||||||||||||||
Reseller | 13,729 | 13,884 | (1.1 | ) | ||||||||||||||||||||
Connected devices 2 | 25,018 | 19,635 | 27.4 | |||||||||||||||||||||
Total Wireless Subscribers | 126,406 | 118,650 | 6.5 | |||||||||||||||||||||
Net Additions 3 | ||||||||||||||||||||||||
Postpaid | 289 | 785 | (63.2 | ) % | 1,140 | 2,436 | (53.2 | ) | ||||||||||||||||
Prepaid | 466 | (46) | - | 895 | (244) | - | ||||||||||||||||||
Reseller | 156 | 87 | 79.3 | (205 | ) | (281) | 27.0 | |||||||||||||||||
Connected devices2 | 1,602 | 1,181 | 35.6 | 3,995 | 1,792 | - | ||||||||||||||||||
Net Subscriber Additions | 2,513 | 2,007 | 25.2 | 5,825 | 3,703 | 57.3 | ||||||||||||||||||
Mobile Share connections | 59,592 | 46,909 | 27.0 | |||||||||||||||||||||
Smartphones under our installment program at end of period | 23,487 | 10,133 | - | |||||||||||||||||||||
Smartphones sold under our installment program during period | 4,074 | 3,401 | 19.8 | % | 11,998 | 9,411 | 27.5 | % | ||||||||||||||||
Total Churn4 | 1.33 % | 1.36 % | (3) BP | 1.35 % | 1.41 % | (6) BP | ||||||||||||||||||
Postpaid Churn4 | 1.16 % | 0.99 % | 17 BP | 1.06 % | 0.97 % | 9 BP | ||||||||||||||||||
1 Represents 100% of AT&T Mobility wireless subscribers. | ||||||||||||||||||||||||
2 Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets. | ||||||||||||||||||||||||
3 Excludes acquisition-related additions during the period. | ||||||||||||||||||||||||
4 Calculated by dividing the aggregate number of wireless subscribers who canceled service during a period divided by the total number of wireless subscribers at the beginning of that period. The churn rate for the period is equal to the average of the churn rate for each month of that period. |
· |
· |
· |
· |
· | Compliance Program and Reporting – We will appoint a Company Compliance Officer to develop and implement a plan to ensure compliance with these merger conditions. We will engage an independent, third-party compliance officer to evaluate the plan and our implementation. Both AT&T and the independent compliance officer will submit periodic reports to the FCC. |
Wireline | ||||||||||||||||||||||||
Segment Results | ||||||||||||||||||||||||
Third Quarter | Nine-Month Period | |||||||||||||||||||||||
2014 | 2013 | Percent Change | 2014 | 2013 | Percent Change | |||||||||||||||||||
Segment operating revenues | ||||||||||||||||||||||||
Service | $ | 14,368 | $ | 14,403 | (0.2) | % | $ | 43,165 | $ | 43,266 | (0.2) | % | ||||||||||||
Equipment | 247 | 267 | (7.5) | 688 | 832 | (17.3) | ||||||||||||||||||
Total Segment Operating Revenues | 14,615 | 14,670 | (0.4) | 43,853 | 44,098 | (0.6) | ||||||||||||||||||
Segment operating expenses | ||||||||||||||||||||||||
Operations and support | 10,761 | 10,385 | 3.6 | 31,918 | 31,137 | 2.5 | ||||||||||||||||||
Depreciation and amortization | 2,571 | 2,736 | (6.0) | 7,769 | 8,146 | (4.6) | ||||||||||||||||||
Total Segment Operating Expenses | 13,332 | 13,121 | 1.6 | 39,687 | 39,283 | 1.0 | ||||||||||||||||||
Segment Operating Income | 1,283 | 1,549 | (17.2) | 4,166 | 4,815 | (13.5) | ||||||||||||||||||
Equity in Net Income of Affiliates | 1 | - | - | 2 | 1 | - | ||||||||||||||||||
Segment Income | $ | 1,284 | $ | 1,549 | (17.1) | % | $ | 4,168 | $ | 4,816 | (13.5) | % |
September 30, | September 30, | Percent | ||||||||||
(in 000s) | 2014 | 2013 | Change | |||||||||
U-verse high speed Internet | 12,098 | 9,745 | 24.1 | % | ||||||||
DSL and Other Broadband Connections | 4,388 | 6,682 | (34.3) | |||||||||
Total Wireline Broadband Connections1 | 16,486 | 16,427 | 0.4 | |||||||||
Total U-verse Video Connections | 6,067 | 5,266 | 15.2 | |||||||||
Retail Consumer Switched Access Lines | 10,182 | 13,133 | (22.5) | |||||||||
U-verse Consumer VoIP Connections | 4,698 | 3,616 | 29.9 | |||||||||
Total Retail Consumer Voice Connections | 14,880 | 16,749 | (11.2) | |||||||||
Switched Access Lines | ||||||||||||
Retail Consumer | 10,182 | 13,133 | (22.5) | |||||||||
Retail Business | 9,509 | 10,632 | (10.6) | |||||||||
Retail Subtotal | 19,691 | 23,765 | (17.1) | |||||||||
Wholesale Subtotal | 1,562 | 1,655 | (5.6) | |||||||||
Total Switched Access Lines2 | 21,464 | 25,680 | (16.4) | % |
· | $17,703 for acquisitions of spectrum licenses, largely due to the remaining payment for AWS spectrum licenses in the AWS-3 Auction. |
· | $13,356 for capital expenditures, excluding interest during construction. |
· | $12,991 for the acquisitions of DIRECTV, GSF Telecom, Nextel Mexico and other operations. |
· |
· | March 2015 borrowings under a variable rate term loan facility due 2018, variable rate term loan facility due 2020 and variable rate 18-month credit agreement due 2016, together totaling $11,155. |
· | March 2015 issuance of |
· | May 2015 issuance of $3,000 of 2.450% global notes due 2020; $2,750 of 3.000% global notes due 2022; $5,000 of 3.400% global notes due 2025; $2,500 of 4.500% global notes due 2035; $3,500 of 4.750% global notes due 2046; and $750 floating rate global notes due |
· |
· | April |
· |
· | September |
· | September 2015 prepayment of $1,000 of the outstanding advances under the $2,000 18-month credit agreement (the "18-Month Credit Agreement") by and between AT&T and Mizuho. (See the "Credit Facilities" discussion below.) |
· | $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 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 of healthcare legislation, regulations or related court decisions. |
· | The final outcome of FCC and other federal or state agency proceedings (including judicial review, if any, of such proceedings) involving issues that are important to our business, including, without limit, 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, net neutrality, including the FCC's order reclassifying broadband as Title II services subject to much more fulsome regulation, unbundled network elements and other wholesale obligations, availability of new spectrum from the FCC 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, federal and/or foreign regulatory and tax laws and regulations 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 |
· | The extent of competition and the resulting pressure on customer and access line totals and |
· | Our ability to develop attractive and profitable product/service offerings to offset increasing |
· | 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 nonregulation of comparable alternative technologies (e.g., VoIP). |
· | The continued development and delivery of attractive and profitable |
· | Our continued ability to attract and offer a diverse portfolio of wireless service and devices, 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 data services, including network quality and acquisition of adequate spectrum at reasonable costs and terms. |
· | The outcome of pending, threatened or potential litigation, including patent and product safety claims by or against third parties. |
· | The impact on our networks, including satellites operated by DIRECTV, and business from major equipment failures; security breaches related to the network or customer information; our inability to obtain handsets, equipment/software or have handsets, equipment/software serviced, and in the case of satellites launched, in a timely and cost-effective manner from suppliers; 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. |
· | The issuance by the Internal Revenue Service and/or state or foreign tax authorities of new tax regulations or changes to existing standards and actions by federal, state, local or |
· | Our |
· | 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 in Latin America. |
· | Changes in our corporate strategies, such as changing network 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 reduction in government spending and reluctance of businesses and consumers to spend in general and on our products and services specifically, due to this fiscal uncertainty. |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | ||||||||||||||||
(c) A summary of our repurchases of common stock during the third quarter of 2014 is as follows: | ||||||||||||||||
Period | (a) Total Number of Shares (or Units) Purchased1,2 | (b) Average Price Paid Per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs1 | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under The Plans or Programs | ||||||||||||
July 1, 2014 - July 31, 2014 | 5,205,380 | $ | 35.57 | 5,200,000 | 415,550,000 | |||||||||||
August 1, 2014 - August 31, 2014 | 1,004,945 | 35.67 | 1,000,000 | 414,550,000 | ||||||||||||
September 1, 2014 - September 30, 2014 | 3,379 | - | - | 414,550,000 | ||||||||||||
Total | 6,213,704 | $ | 35.58 | 6,200,000 | ||||||||||||
1 In March 2014, our Board of Directors approved a fourth authorization to repurchase up to 300 million shares of our common stock. In March 2013, our Board of Directors approved a third authorization to repurchase up to an additional 300 million shares of our common stock. | ||||||||||||||||
The authorizations have no expiration date. | ||||||||||||||||
2 Of the shares repurchased, 13,704 shares were acquired through the withholding of taxes on the vesting of restricted stock or through the payment in stock of taxes on the exercise price of options. | ||||||||||||||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | |||||||||
(c) A summary of our repurchases of common stock during the third quarter of 2015 is as follows: | |||||||||
Period | (a) Total Number of Shares (or Units) Purchased1, 2 | (b) Average Price Paid Per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs1 | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under The Plans or Programs | |||||
July 1, 2015 - July 31, 2015 | 28,296 | $ | - | - | 414,550,000 | ||||
August 1, 2015 - August 31, 2015 | 7,006 | - | - | 414,550,000 | |||||
September 1, 2015 - September 30, 2015 | 425 | - | - | 414,550,000 | |||||
Total | 35,727 | $ | - | - | |||||
1 In March 2014, our Board of Directors approved a fourth authorization to repurchase up to 300 million shares of our common stock. In March 2013, our Board of Directors authorized the repurchase of up to an additional 300 million shares of our common stock. The authorizations | |||||||||
have no expiration date. | |||||||||
2 All shares were acquired through the withholding of taxes on the vesting of restricted stock or through the payment in stock of taxes on the exercise price of options. |
10-a | 2011 Incentive Plan, amended September 24, 2015 |
10-b | Cash Deferral Plan, amended September 24, 2015 |
10-c | Administrative Plan, amended September 24, 2015 |
10-d | Stock Purchase and Deferral Plan, amended September 24, 2015 |
10-e | Supplemental Life Insurance Plan, amended September 24, 2015 |
10-f | DIRECTV Deferred Compensation Plan for Non-Employee Directors |
12 | Computation of Ratios of Earnings to Fixed Charges |
18 | Letter regarding change in Accounting Principles |
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 |
99.1 | The unaudited consolidated balance sheets of DIRECTV as of June 30, 2015 and the consolidated statements of income, consolidated statements of cash flows and consolidated statements of stockholders' equity and comprehensive income of DIRECTV for the period ended June 30, 2015, and the notes related thereto (incorporated by reference to Item 1 of DIRECTV's Quarterly Report on Form 10-Q/A filed October 20, 2015 (SEC File No. 001-34554)). |
101 | XBRL Instance Document |
November | AT&T Inc. /s/ John J. Stephens John J. Stephens Senior Executive Vice President and Chief Financial Officer | |||