Thanks, John, and good morning, everyone.
As John said, during the third quarter, we made progress on our business priorities as you can see in our subscriber gains. Wireless growth was stronger than we've seen in quite some time. We added more than 1 million postpaid subscribers, including 645,000 postpaid phones.
We also saw solid growth in AT&T fiber subscribers with more than 350,000 fiber net ads, and our HBO Max activation base more than doubled in the first full quarter since we launched the business. We now have 38 million U.S. HBO Max and HBO subscribers and 57 million premium subscribers globally.
Our cost transformation continues on track.
We’re already seeing savings achieved from benefit efficiencies and organizational alignments.
Our focus on refining our distribution is also paying off. We shifted some stores to third party dealers, closed others and we've also been able to streamline our customer experience, especially our digital sales and simplify processes. We've been very deliberate in managing our debt and focusing on our cash flow.
So far this year, we have refinance more than 60 billion of debt at historically low rates, with about 30 billion of debt coming due through 2025. This has lowered our near-term debt maturities giving us ample financial flexibility in the years ahead. We now expect free cash flow of 26 billion or higher with a full year dividend payout ratio percentage in the high 50s. Slide 6 illustrates the success we've had this quarter in our market focused areas.
As mentioned, postpaid phone adds were strong. A big factor was postpaid phone churn of 0.69%, our best ever. Prepaid churn was less than 3% and [indiscernible] was even lower than that. Improved postpaid churn was driven by the strength of our network and straightforward pricing plans, including our premium unlimited plan, which includes bundling HBO Max. Penetration rates for AT&T fiber are also growing as you can see on the chart on the lower left. We're on track to grow our fiber base by 25% this year, adding 1 million new subscribers.
On the upper right chart, HBO Max continues to scale. We've over-performed on our initial target of 36 million domestic HBO Max and HBO subscribers for this year. All this is before we launch our AVOD product in the U.S. next year and before we begin our international deployment of HBO Max also planned for next year.
As you can see in the premium video chart in the lower right, we continue to make good progress in moving to ratable share losses in our pay TV business consistent with our share. This is a big step toward what we told you to expect as we exited 2020.
We are focused on high-value subscribers as the industry transitions to over the top, which has helped improve churn. The introduction of AT&T TV has helped, particularly in our broadband footprint.
Let's now take a look at our consolidated and segment results, starting with our financial summary on Slide 7. Cash flows continue to be strong, even during the pandemic. Cash from operations came in at more than $12 billion and free cash flow was 8.3 billion. Adjusted EPS was $0.76 per share. That included COVID impacts from incremental costs and lost revenues. Combined, COVID had a $0.21 impact to the third quarter EPS, which we did not adjust for. Adjustments for the quarter included 1.2 billion of debt redemption premiums associated with our debt management activity in the quarter. Revenues were down 2.2 billion from a year ago, including an estimated 2.8 billion of lost or deferred revenue from COVID and foreign exchange pressures.
Foreign exchange had a negative impact of about 300 million in revenue, primarily in our Latin America segment. Adjusted operating income was about $8.2 billion, which included the impact of COVID and shift of TV productions and sports to the third quarter. Lower revenues were partly offset by expense reductions. Adjusted operating income margins were down 280 basis points year-over-year, but would have been up if you exclude COVID impacts. And we continue to invest in our growth areas. CapEx was 3.9 billion and gross capital investment was 4.5 billion, a difference attributed to the timing of underpayment. And we invested about $600 million in HBO Max in the quarter and are on track with full year estimated investment of $2 billion.
Let's now look at our segment operating results, starting with our communication segment on Slide 8.
Our core businesses continue to show their resiliency. In mobility, in addition to strong total postpaid and postpaid phone net adds, we saw a strong demand for data connected devices. We had 730,000 total smartphone net adds both postpaid and prepaid. Prepaid had a solid quarter with 245,000 net adds with 131,000 of those phones. Bottom line, we're encouraged by our wireless market positioning heading into the fourth quarter, traditionally the busiest season for device upgrades and people moving to unlimited plans. Total wireless revenues were up year-over-year, thanks to growth in equipment revenues. COVID impacts came from international roaming as well as waived data overages and late payments. Without the roaming impacts alone, service revenues would have had a healthy growth. Roaming also impacted EBITDA margins, which were down slightly, even with much higher sales.
We’re pleased with AT&T fiber net add momentum, we're on track to add 1 million subscribers this year and the mix shift to fiber has helped stabilize broadband revenues. Premium video losses were improved sequentially and year-over-year, thanks to lower churn and our focus on high-value customers. The decline is a significant improvement over prior year trends.
We continue to drive ARPU growth in both video and IP broadband.
In fact, premium video ARPU was up more than 7%. Business wireline turned in another solid EBITDA quarter. EBITDA was up year-over-year and margins expanded by 130 basis points, despite legacy revenue trends.
Let's move to WarnerMedia and Latin America results, which are on Slide 9. The COVID impact is most evident in our WarnerMedia results. Theatrical and TV production is ramping back up, but theaters remained closed in many parts of the country. Altogether, COVID had an estimated 1.6 billion revenue impact on WarnerMedia in the quarter. Sports resumed in the quarter and programming and production costs associated with the shift to sports into the third quarter impacted expenses. At the same time, sports had a favorable impact on advertising revenues. HBO Max continued to scale nicely, driven by strong wholesale activations.
We are also pleased with consumer engagement, which is up nearly 60% from what we saw with HBO Now. WarnerMedia’s reputation as the industry's highest quality storyteller was again reinforced with it leading the industry with 38 Primetime and 15 News and Documentary Emmys.
We also saw subscriber turnaround in our Latin America operations. We added more than 400,000 subscribers in Mexico and 200,000 subscribers in Vrio, after both showed a COVID slowdown in the second quarter. Latin America revenues continue to be challenged by foreign exchange, slow economies and COVID. But even with this, Mexico’s EBITDA improved year-over-year, and Vrio continues to generate EBITDA and cash flow on a constant currency basis.
Now let's go to Slide 10 for an update on our capital structure.
Our cash flows continue to be resilient, even with the pandemic and allows us to invest in the business and comfortably pay for our dividend while also paying down debt. Free cash flow was 8.3 billion in the quarter and almost $20 billion year-to-date.
In fact, we've reduced net debt by more than 30 billion since we closed our Time Warner acquisition a little more than two years ago.
We continue to be active in the debt market. With interest rates at historical lows, we have been aggressive in refinancing our debt maturities and lowering our coupon rate.
As you can see on the bottom chart, our near-term debt obligations have changed significantly since the first quarter.
We have reduced debt maturities by almost 50% over the next five years. This has extended our average debt maturity, which is a good place to be with rates as low.
In fact, we have lowered our average interest rate on debt to just under 4.1% with the lowest coupon rates we've ever seen. That gives us financial flexibility, not just for today but going forward as well.
In fact, we ended the quarter with nearly $10 billion in cash on our balance sheet. The 500 billion of assets on our total balance sheet also gives us ample opportunity to continue to strengthen our cash position by monetizing non-core assets.
We expect $3 billion of previously announced asset sales to close before the end of the year, including CME which actually closed last week and our Puerto Rico wireless properties, which we expect to close by the end of October. Amir, that's our presentation. We're now ready for the Q&A.