Form 8-K AT&T INC. For: Apr 24

April 24, 2019 6:49 AM

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549
     

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934


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

AT&T INC.
(Exact Name of Registrant as Specified in Charter)


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

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

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


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

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

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Emerging growth company 

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


Item 2.02 Results of Operations and Financial Condition.

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

Item 9.01 Financial Statements and Exhibits.
The following exhibits are furnished as part of this report:
(d)          Exhibits

   99.1 Press release dated April 24, 2019 reporting financial results for the first quarter ended March 31, 2019.
     

     

 99.3



Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
AT&T INC.
   
   
   
Date: April 24, 2019
By: /s/ Debra L. Dial                                   
       Debra L. Dial
Senior Vice President and Controller

 


 
AT&T Reports First-Quarter Results

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


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

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

“Our first-quarter results show that we’re delivering on what we promised,” said Randall Stephenson, AT&T chairman and CEO. “We’re on plan to meet our de-leveraging goals with strong free cash flow and asset sales. We grew Entertainment Group EBITDA in the quarter and are confident we’ll meet or exceed our full-year target. FirstNet deployment continues ahead of schedule.  And we are recognized for having the nation’s best wireless network1, as well as the fastest network2.

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



 


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

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

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

Latin America Highlights
93,000 Mexico wireless net adds

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



Consolidated Financial Results

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

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

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

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





1Based on GWS OneScore Sept. 2018
2Based on analysis by Ookla® of Speedtest Intelligence® data average download speeds for Q1 2019




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

AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc. Additional information is available at about.att.com. © 2019 AT&T Intellectual Property. All rights reserved. AT&T, the Globe logo and other marks are trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T’s filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.
This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company's website at https://investors.att.com.

For more information, contact:
Erin McGrath
AT&T Inc.
Phone: 214-862-0651
Email: erin.mcGrath@att.com
 

 

AT&T Inc.

 

 

 

 

 

 

 

Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income

Dollars in millions except per share amounts

 

 

 

Unaudited

First Quarter

Percent

 

 

 

2019

 

2018

 

Change

Operating Revenues

 

 

 

 

 

 

 

  Service

 

$

40,684

$

33,646

 

20.9

%

  Equipment

 

 

4,143

 

4,392

 

(5.7)

%

    Total Operating Revenues

 

44,827

 

38,038

 

17.8

%

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

   Cost of revenues

 

 

 

 

 

 

 

    Equipment

 

4,502

 

4,848

 

(7.1)

%

    Broadcast, programming and operations

 

7,652

 

5,166

 

48.1

%

    Other cost of revenues (exclusive of depreciation

          and amortization shown separately below)

 

8,585

 

7,932

 

8.2

%

   Selling, general and administrative

 

9,649

 

7,897

 

22.2

%

   Depreciation and amortization

 

7,206

 

5,994

 

20.2

%

    Total Operating Expenses

 

37,594

 

31,837

 

18.1

%

Operating Income

 

7,233

 

6,201

 

16.6

%

Interest Expense

 

2,141

 

1,771

 

20.9

%

Equity in Net Income (Loss) of Affiliates

 

(7)

 

9

 

-

%

Other Income (Expense) - Net

 

286

 

1,702

 

(83.2)

%

Income Before Income Taxes

 

5,371

 

6,141

 

(12.5)

%

Income Tax Expense

 

1,023

 

1,382

 

(26.0)

%

Net Income

 

4,348

 

4,759

 

(8.6)

%

 Less: Net Income Attributable to

    Noncontrolling Interest

 

(252)

 

(97)

 

-

%

Net Income Attributable to AT&T

$

4,096

$

4,662

 

(12.1)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share Attributable to AT&T

$

0.56

$

0.75

 

(25.3)

%

   Weighted Average Common

       Shares Outstanding (000,000)

 

7,313

 

6,161

 

18.7

%

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Share Attributable to AT&T

$

0.56

$

0.75

 

(25.3)

%

   Weighted Average Common 

       Shares Outstanding with Dilution (000,000)

 

7,342

 

6,180

 

18.8

%




 

 

AT&T Inc.

 

 

 

 

 

Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets

Dollars in millions

 

Unaudited

 

Mar. 31,

 

 

Dec. 31,

 

 

 

2019

 

 

2018

Assets

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

$

6,516

 

$

5,204

Accounts receivable - net of allowances for doubtful accounts of $905 and $907

 

23,863

 

 

26,472

Prepaid expenses

 

1,518

 

 

2,047

Other current assets

 

14,575

 

 

17,704

Total current assets

 

46,472

 

 

51,427

Noncurrent Inventories and Theatrical Film and Television Production Costs

 

10,270

 

 

7,713

Property, Plant and Equipment – Net

 

132,051

 

 

131,473

Goodwill

 

146,434

 

 

146,370

Licenses – Net

 

97,001

 

 

96,144

Trademarks and Trade Names – Net

 

24,218

 

 

24,345

Distribution Networks – Net

 

16,623

 

 

17,069

Other Intangible Assets – Net

 

24,732

 

 

26,269

Investments in and Advances to Equity Affiliates

 

6,230

 

 

6,245

Operating Lease Right-of-Use Assets

 

20,235

 

 

-

Other Assets

 

24,118

 

 

24,809

Total Assets

$

548,384

 

$

531,864

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Debt maturing within one year

$

11,538

 

$

10,255

Accounts payable and accrued liabilities

 

42,306

 

 

43,184

Advanced billings and customer deposits

 

5,956

 

 

5,948

Accrued taxes

 

1,130

 

 

1,179

Dividends payable

 

3,722

 

 

3,854

Total current liabilities

 

64,652

 

 

64,420

Long-Term Debt

 

163,942

 

 

166,250

Deferred Credits and Other Noncurrent Liabilities

 

 

 

 

 

Deferred income taxes

 

59,207

 

 

57,859

Postemployment benefit obligation

 

19,664

 

 

19,218

Operating lease liabilities

 

18,253

 

 

-

Other noncurrent liabilities

 

27,715

 

 

30,233

Total deferred credits and other noncurrent liabilities

 

124,839

 

 

107,310

Stockholders’ Equity

 

 

 

 

 

Common stock

 

7,621

 

 

7,621

Additional paid-in capital

 

125,174

 

 

125,525

Retained earnings

 

59,424

 

 

58,753

Treasury stock

 

(11,452)

 

 

(12,059)

Accumulated other comprehensive income

 

4,345

 

 

4,249

Noncontrolling interest

 

9,839

 

 

9,795

Total stockholders’ equity

 

194,951

 

 

193,884

Total Liabilities and Stockholders' Equity

$

548,384

 

$

531,864

 

 

 

 

 

 

 



 

AT&T Inc.

 

 

 

 

 

Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows

Dollars in millions

 

Unaudited

First Quarter

 

 

 

2019

 

 

2018

Operating Activities

 

 

 

 

 

Net income

$

4,348

 

$

4,759

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

7,206

 

 

5,994

 

Amortization of film and television costs

 

2,497

 

 

-

 

Undistributed earnings from investments in equity affiliates

 

112

 

 

(2)

 

Provision for uncollectible accounts

 

592

 

 

438

 

Deferred income tax expense (benefit)

 

1,069

 

 

1,222

 

Net (gain) loss from investments, net of impairments

 

(175)

 

 

2

 

Actuarial (gain) loss on pension and postretirement benefits

 

432

 

 

(930)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

1,894

 

 

(439)

 

Other current assets, inventories and theatrical film and television production costs

 

(2,510)

 

 

614

 

Accounts payable and other accrued liabilities

 

(3,686)

 

 

(1,962)

 

Equipment installment receivables and related sales

 

652

 

 

505

 

Deferred customer contract acquisition and fulfillment costs

 

(375)

 

 

(826)

Retirement benefit funding

 

-

 

 

(140)

Other - net

 

(1,004)

 

 

(288)

Total adjustments

 

6,704

 

 

4,188

Net Cash Provided by Operating Activities

 

11,052

 

 

8,947

 

 

 

 

 

Investing Activities

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

Purchase of property and equipment

 

(5,121)

 

 

(5,957)

 

Interest during construction

 

(61)

 

 

(161)

Acquisitions, net of cash acquired

 

(213)

 

 

(234)

Dispositions

 

10

 

 

56

(Purchases) sales of securities, net

 

(1)

 

 

(116)

Advances to and investments in equity affiliates, net

 

(15)

 

 

(1,007)

Cash collections of deferred purchase price

 

-

 

 

267

Net Cash Used in Investing Activities

 

(5,401)

 

 

(7,152)

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

Net change in short-term borrowings with original maturities of three months or less

 

(256)

 

 

-

Issuance of other short-term borrowings

 

296

 

 

-

Repayment of other short-term borrowings

 

(176)

 

 

-

Issuance of long-term debt

 

9,182

 

 

2,565

Repayment of long-term debt

 

(9,840)

 

 

(4,911)

Purchase of treasury stock

 

(189)

 

 

(145)

Issuance of treasury stock

 

167

 

 

11

Dividends paid

 

(3,714)

 

 

(3,070)

Other

 

109

 

 

2,048

Net Cash Used in Financing Activities

 

(4,421)

 

 

(3,502)

Net increase (decrease) in cash and cash equivalents and restricted cash

 

1,230

 

 

(1,707)

Cash and cash equivalents and restricted cash beginning of year

 

5,400

 

 

50,932

Cash and Cash Equivalents and Restricted Cash End of Period

$

6,630

 

$

49,225

 

 

 

 

 

 

 




 

AT&T Inc.

Consolidated Supplementary Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary Financial Data

Dollars in millions except per share amounts

 

 

 

Unaudited

First Quarter

Percent

 

 

 

2019

 

2018

 

Change

Capital expenditures

 

 

 

 

 

 

 

 

Purchase of property and equipment

$

5,121

$

5,957

 

(14.0)

%

 

Interest during construction

 

61

 

161

 

(62.1)

%

Total Capital Expenditures

$

5,182

$

6,118

 

(15.3)

%

 

 

 

 

 

 

 

 

 

Dividends Declared per Share

$

0.51

$

0.50

 

2.0

%

 

 

 

 

 

 

 

 

 

End of Period Common Shares Outstanding (000,000)

 

7,297

 

6,148

 

18.7

%

Debt Ratio

 

47.4

%

52.6

%

(520)

BP

Total Employees

 

262,290

 

249,240

 

5.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary Operating Data

Subscribers and connections in thousands

 

 

 

 

Unaudited

First Quarter

Percent

 

 

 

2019

 

2018

 

Change

Wireless Subscribers

 

 

 

 

 

 

 

 

Domestic

 

155,732

 

143,832

 

8.3

%

 

Mexico

 

17,722

 

15,642

 

13.3

%

Total Wireless Subscribers

 

173,454

 

159,474

 

8.8

%

 

 

 

 

 

 

 

 

 

Video Connections

 

 

 

 

 

 

 

 

Domestic

 

23,891

 

25,394

 

(5.9)

%

 

Latin America

 

13,584

 

13,573

 

0.1

%

Total Video Connections

 

37,475

 

38,967

 

(3.8)

%

 

 

 

 

 

 

 

 

 

Broadband Connections

 

 

 

 

 

 

 

 

IP

 

14,852

 

14,637

 

1.5

%

 

DSL

 

885

 

1,138

 

(22.2)

%

Total Broadband Connections

 

15,737

 

15,775

 

(0.2)

%

 

 

 

 

 

 

 

 

 

Voice Connections

 

 

 

 

 

 

 

 

Network Access Lines

 

9,576

 

11,288

 

(15.2)

%

 

U-verse  VoIP Connections

 

4,935

 

5,585

 

(11.6)

%

Total Retail Voice Connections

 

14,511

 

16,873

 

(14.0)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

Percent

 

 

 

2019

 

2018

 

Change

Wireless Net Additions

 

 

 

 

 

 

 

 

Domestic

 

2,727

 

2,630

 

3.7

%

 

Mexico

 

93

 

543

 

(82.9)

%

Total Wireless Net Additions

 

2,820

 

3,173

 

(11.1)

%

 

 

 

 

 

 

 

 

 

Video Net Additions

 

 

 

 

 

 

 

 

Domestic

 

(626)

 

124

 

-

%

 

Latin America

 

(32)

 

(15)

 

-

%

Total Video Net Additions

 

(658)

 

109

 

-

%

 

 

 

 

 

 

 

 

 

Broadband Net Additions

 

 

 

 

 

 

 

 

IP

 

100

 

150

 

(33.3)

%

 

DSL

 

(64)

 

(94)

 

31.9

%

Total Broadband Net Additions

 

36

 

56

 

(35.7)

%





COMMUNICATIONS SEGMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Communications segment provides wireless and wireline telecom, video and broadband services to consumers located in the U.S. or in U.S. territories and businesses globally. The Communications segment contains three reporting units: Mobility, Entertainment Group, and Business Wireline.

 

 

 

 

 

 

 

 

 

Segment Results

Dollars in millions

 

 

 

Unaudited

First Quarter

Percent

 

 

 

2019

 

2018

 

Change

Segment Operating Revenues

 

 

 

 

 

 

 

 

Mobility

 $  

17,567

 $  

17,355

 

1.2

 %  

 

Entertainment Group

 

11,328

 

11,431

 

(0.9)

%

 

Business Wireline

 

6,498

 

6,747

 

(3.7)

 %  

    Total Segment Operating Revenues

 

35,393

 

35,533

 

(0.4)

%

 

 

 

 

 

 

 

 

 

Segment Operating Contribution

 

 

 

 

 

 

 

 

Mobility

 

5,351

 

5,158

 

3.7

 %  

 

Entertainment Group

 

1,478

 

1,309

 

12.9

%

 

Business Wireline

 

1,223

 

1,560

 

(21.6)

 %  

    Total Segment Operating Contribution

$

8,052

$

8,027

 

0.3

%

 

 

 

 

 

 

 

 

 



Mobility

 

 

 

 

 

 

 

 

 

Mobility provides nationwide wireless service and equipment.

 

 

 

 

 

 

 

 

 

Mobility Results

Dollars in millions

 

 

 

Unaudited

First Quarter

Percent

 

 

 

2019

 

2018

 

Change

Operating Revenues

 

 

 

 

 

 

 

Service

 $  

13,792

 $  

13,403

 

2.9

%

Equipment

 

3,775

 

3,952

 

(4.5)

%

    Total Operating Revenues

 

17,567

 

17,355

 

1.2

%

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Operations and support

 

10,181

 

10,102

 

0.8

%

Depreciation and amortization

 

2,035

 

2,095

 

(2.9)

 %  

    Total Operating Expenses

 

12,216

 

12,197

 

0.2

%

Operating Income

 

5,351

 

5,158

 

3.7

 %  

Equity in Net Income (Loss) of Affiliates

 

-

 

-

 

-

%

Operating  Contribution

$

5,351

$

5,158

 

3.7

 %  

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

30.5

%

29.7

%

80

BP

 

 

 

 

 

 

 

 

 

Supplementary Operating Data

Subscribers and connections in thousands

 

 

 

 

Unaudited

First Quarter

Percent

 

 

 

2019

 

2018

 

Change

Mobility Subscribers

 

 

 

 

 

 

 

Postpaid

 

76,550

 

77,431

 

(1.1)

%

Prepaid

 

17,180

 

15,671

 

9.6

%

Reseller

 

7,574

 

9,002

 

(15.9)

%

Connected Devices

 

54,428

 

41,728

 

30.4

%

Total Mobility Subscribers

 

155,732

 

143,832

 

8.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

Percent

 

 

 

2019

 

2018

 

Change

Mobility Net Additions

 

 

 

 

 

 

 

Postpaid

 

(204)

 

49

 

-

%

Prepaid

 

96

 

241

 

(60.2)

%

Reseller

 

(253)

 

(388)

 

34.8

%

Connected Devices

 

3,088

 

2,728

 

13.2

%

Total Mobility Net Additions

 

2,727

 

2,630

 

3.7

%

 

 

 

 

 

 

 

 

Postpaid Churn

 

1.17

%

1.06

%

11

BP

Postpaid Phone-Only Churn

 

0.93

%

0.84

%

9

BP



Entertainment Group

 

 

 

 

 

 

 

 

 

 

 

Entertainment Group provides video, including over-the-top (OTT) services, broadband and voice communication services primarily to residential customers. This business unit also sells advertising on video distribution platforms.

 
 

 

 

 

 

 

 

 

 

 

 

Entertainment Group Results

 

Dollars in millions

 

 

 

 

Unaudited

First Quarter

Percent

 

 

 

 

2019

 

2018

 

Change

 

 Operating Revenues

 

 

 

 

 

 

 

 

Video entertainment

 $  

8,074

 $  

8,225

 

(1.8)

 %  

 

High-speed internet

 

2,070

 

1,878

 

10.2

%

 

Legacy voice and data services

 

683

 

806

 

(15.3)

 %  

 

Other service and equipment

 

501

 

522

 

(4.0)

%

 

Total Operating Revenues

 

11,328

 

11,431

 

(0.9)

 %  

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Operations and support

 

8,527

 

8,811

 

(3.2)

%

 

Depreciation and amortization

 

1,323

 

1,310

 

1.0

 %  

 

Total Operating Expenses

 

9,850

 

10,121

 

(2.7)

%

 

Operating Income

 

1,478

 

1,310

 

12.8

 %  

 

Equity in Net Income (Loss) of Affiliates

 

-

 

(1)

 

-

%

 

Operating Contribution

$

1,478

 $  

1,309

 

12.9

 %  

 

 

 

 

 

 

 

 

 

 

 

Operating Income Margin

 

13.0

%

11.5

%

150

BP

 

 

 

 

 

 

 

 

 

 

 

Supplementary Operating Data

 

Subscribers and connections in thousands

 

 

 

 

Unaudited

First Quarter

Percent

 

 

 

 

2019

 

2018

 

Change

 

Video Connections1

 

 

 

 

 

 

 

 

Premium TV

 

22,359

 

23,902

 

(6.5)

%

 

DIRECTV NOW

 

1,508

 

1,467

 

2.8

%

 

Total Video Connections

 

23,867

 

25,369

 

(5.9)

%

 

 

 

 

 

 

 

 

 

 

 

Broadband Connections1

 

 

 

 

 

 

 

 

IP

 

13,822

 

13,616

 

1.5

%

 

DSL

 

632

 

816

 

(22.5)

%

 

Total Broadband Connections

 

14,454

 

14,432

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

Voice Connections

 

 

 

 

 

 

 

 

Retail Consumer Switched Access Lines

 

3,787

 

4,535

 

(16.5)

%

 

U-verse Consumer VoIP Connections

 

4,393

 

5,105

 

(13.9)

%

 

Total Retail Consumer Voice Connections

 

8,180

 

9,640

 

(15.1)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Quarter

Percent

 

 

 

 

2019

 

2018

 

Change

 

Video Net Additions1,2

 

 

 

 

 

 

 

 

Premium TV

 

(544)

 

(187)

 

-

%

 

DIRECTV NOW

 

(83)

 

312

 

-

%

 

Total Video Net Additions

 

(627)

 

125

 

-

%

 

 

 

 

 

 

 

 

 

 

 

Broadband Net Additions1

 

 

 

 

 

 

 

 

IP

 

93

 

154

 

(39.6)

%

 

DSL

 

(48)

 

(72)

 

33.3

%

 

Total Broadband Net Additions

 

45

 

82

 

(45.1)

 %  

 

 

 

 

 

 

 

 

 

 

 

1

2019 includes the impact of conforming our subscriber disconnection policy with that of our wireless business and industry

 

 

practice (to billing cycle basis), resulting in 117 additional video and 38 additional broadband subscribers at March 31, 2019.

 

2

Includes the impact of customers that migrated to DIRECTV NOW.

 


Business Wireline

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Wireline unit provides advanced IP-based services, as well as traditional data services to business customers. Revenues have been recast to conform to the current period's presentation.

 

 

 

 

 

 

 

 

 

Business Wireline Results

Dollars in millions

 

 

 

Unaudited

First Quarter

Percent

 

 

2019

 

2018

 

Change

Operating Revenues

 

 

 

 

 

 

 

 

Strategic and managed services

 $  

3,792

 $  

3,595

 

5.5

 %  

 

Legacy voice and data services

 

2,404

 

2,865

 

(16.1)

%

 

Other service and equipment

 

302

 

287

 

5.2

 %  

    Total Operating Revenues

 

6,498

 

6,747

 

(3.7)

%