REG - AT & T Inc. - 1st Quarter Results - 8k <Origin Href="QuoteRef">T.N</Origin> - Part 2
16/05/2016 15:40
- Part 2: For the preceding part double click ID:nRSP3838Ya
AT&T Mobility Subscribers 130,445 121,772 7.1 %
Postpaid 77,138 76,175 1.3 %
Prepaid 12,171 10,037 21.3 %
Branded 89,309 86,212 3.6 %
Reseller 13,378 13,595 -1.6 %
Connected Devices 27,758 21,965 26.4 %
AT&T Mobility Net Adds 1,781 1,218 46.2 %
Postpaid 129 441 -70.7 %
Prepaid 500 98 -
Branded 629 539 16.7 %
Reseller (400 ) (266 ) -50.4 %
Connected Devices 1,552 945 64.2 %
M&A Activity, Partitioned Customers and Other Adjs. 24 - -
AT&T Mobility Churn
Postpaid Churn 1.10 % 1.02 % 8 BP
Total Churn 1.42 % 1.40 % 2 BP
Other
Domestic Licensed POPs (000,000) 322 321 0.3 %
Total Video Subscribers 37,808 5,993 -
Domestic 25,372 5,993 -
Pan Americana 7,094 - -
Brazil 5,342 - -
Total Video Net Adds (125 ) 50 -
Domestic (52 ) 50 -
Pan Americana 28 - -
Brazil (101 ) - -
Total Broadband Connections 15,764 16,097 -2.1 %
IP 13,470 12,644 6.5 %
DSL 2,294 3,453 -33.6 %
Broadband Net Adds (14 ) 69 -
IP 202 439 -54.0 %
DSL (216 ) (370 ) 41.6 %
Total Wireline Voice Connections 21,459 24,149 -11.1 %
Total Wireless Subscribers 139,658 127,500 9.5 %
Domestic Wireless Subscribers 130,445 121,772 7.1 %
Mexican Wireless Subscribers 9,213 5,728 60.8 %
Branded Subscribers 98,158 91,448 7.3 %
Branded Net Adds 1,195 539 -
AT&T Inc.
Construction and capital expenditures:
Capital expenditures $ 4,451 $ 3,848 15.7 %
Interest during construction $ 218 $ 123 77.2 %
Dividends Declared per Share $ 0.48 $ 0.47 2.1 %
End of Period Common Shares Outstanding (000,000) 6,156 5,193 18.5 %
Debt Ratio1,2 51.2 % 51.5 % -30 BP
Total Employees 280,870 250,790 12.0 %
1 Prior year amounts restated to conform to current period reporting methodology.
2 Total long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity.
Note: For the end of 1Q16, total switched access lines were 15,975.
Business Solutions and Consumer Mobility may not total to AT&T Mobility due to rounding.
Financial Data
AT&T Inc.
Supplemental AT&T Mobility Results
Dollars in millions
Unaudited
Three Months Ended
3/31/2016 3/31/2015 % Chg
AT&T Mobility
Operating Revenues
Service $ 14,798 $ 14,812 -0.1 %
Equipment 3,156 3,374 -6.5 %
Total Operating Revenues 17,954 18,186 -1.3 %
Operating Expenses
Operations and support expenses 10,624 11,472 -7.4 %
Depreciation and amortization 2,056 2,005 2.5 %
Total Operating Expenses 12,680 13,477 -5.9 %
Operating Income $ 5,274 $ 4,709 12.0 %
Operating Income Margin 29.4 % 25.9 %
Financial Data
AT&T Inc.
Segment Supplemental
Dollars in millions except per share amounts
For the three months ended March 31, 2016
Revenues Operations and Support Expenses EBITDA Depreciation and Amortization Operating Income (Loss) Equity in Net Income of Affiliates Segment Contribution
Business Solutions $ 17,609 $ 10,802 $ 6,807 $ 2,508 $ 4,299 $ - $ 4,299
Entertainment Group 12,658 9,578 3,080 1,488 1,592 3 1,595
Consumer Mobility 8,328 4,912 3,416 922 2,494 - 2,494
International 1,667 1,588 79 277 (198 ) 14 (184 )
Segment Total $ 40,262 $ 26,880 $ 13,382 $ 5,195 $ 8,187 $ 17 $ 8,204
Corporate and Other 273 377 (104 ) 17 (121 )
Acquisition-related items - 295 (295 ) 1,351 (1,646 )
Certain Significant items - (711 ) 711 - 711
AT&T Inc. $ 40,535 $ 26,841 $ 13,694 $ 6,563 $ 7,131
For the three months ended March 31, 2015
Revenues Operations and Support Expenses EBITDA Depreciation and Amortization Operating Income (Loss) Equity in Net Income of Affiliates Segment Contribution
Business Solutions $ 17,557 $ 11,073 $ 6,484 $ 2,342 $ 4,142 $ - $ 4,142
Entertainment Group 5,660 4,859 801 1,065 (264 ) (6 ) (270 )
Consumer Mobility 8,778 5,541 3,237 1,002 2,235 - 2,235
International 236 218 18 28 (10 ) - (10 )
Segment Total $ 32,231 $ 21,691 $ 10,540 $ 4,437 $ 6,103 $ (6 ) $ 6,097
Corporate and Other 345 234 111 20 91
Acquisition-related items - 299 (299 ) 121 (420 )
Certain Significant items - 217 (217 ) - (217 )
AT&T Inc. $ 32,576 $ 22,441 $ 10,135 $ 4,578 $ 5,557
Financial Data
AT&T Inc.
Non-GAAP Consolidated Reconciliation
Adjusted EBITDA and Margin1
Dollars in millions
Unaudited
Three Months Ended
March 31,
2015 2016
Reported Operating Revenues $ 32,576 $ 40,535
Reported Operating Income $ 5,557 $ 7,131
Plus: Depreciation and Amortization 4,578 6,563
EBITDA2 $ 10,135 $ 13,694
Adjustments:
Wireless merger integration costs3 209 42
DIRECTV/Mexico merger integration costs4 89 254
Employee separation costs 217 25
Gain on transfer of wireless spectrum - (736 )
Adjusted EBITDA $ 10,650 $ 13,279
Adjusted EBITDA Margin* 32.7 % 32.8 %
1 2015 Adjusted EBITDA has been restated to reflect the change in accounting for customer set-up and
installation costs.2 EBITDA is defined as operating income before depreciation and amortization.3
Adjustments include Operations and Support expenses for domestic wireless integration costs.4
Adjustments include DIRECTV merger integration costs and Operations and Support expenses for
international wireless integration costs.
Adjusted EBITDA and Margin are non-GAAP financial measures calculated by excluding from operating
revenues and operating expenses certain significant items that are non-operational or non-recurring in
nature, including dispositions and merger integration and transaction costs. Management believes that
these measures provide relevant and useful information to investors and other users of our financial
data in evaluating the effectiveness of our operations and underlying business trends. Adjusted EBITDA
should be considered in addition to, but not as a substitute for, other measures of financial
performance reported in accordance with GAAP. Our calculation of Adjusted EBITDA, as presented, may
differ from similarly titled measures reported by other companies. *Adjusted EBITDA Margin is
calculated by dividing Adjusted EBITDA by Operating Revenues.
Financial Data
AT&T Inc.
Non-GAAP Segment
Reconciliation
Business Solutions
Segment EBITDA
Dollars in
millions
Unaudited
Three Months Ended
3/31/15 6/30/15 9/30/15 12/31/15 3/31/16
Segment Operating
Revenues
Total Segment $ 17,557 $ 17,664 $ 17,692 $ 18,214 $ 17,609
Operating Revenues
Segment Operating 4,142 4,232 4,297 3,721 4,299
Income
Segment Operating 23.6 % 24.0 % 24.3 % 20.4 % 24.4 %
Income Margin
Plus: Depreciation 2,342 2,460 2,474 2,513 2,508
and amortization
EBITDA1 $ 6,484 $ 6,692 $ 6,771 $ 6,234 $ 6,807
EBITDA as a % of 36.9 % 37.9 % 38.3 % 34.2 % 38.7 %
Revenues
Entertainment
Group Segment
EBITDA
Three Months Ended
3/31/15 6/30/15 9/30/15 12/31/15 3/31/16
Segment Operating
Revenues
Total Segment $ 5,660 $ 5,782 $ 10,858 $ 12,994 $ 12,658
Operating Revenues
Segment Operating (264 ) (196 ) 1,019 1,445 1,592
Income
Segment Operating -4.7 % -3.4 % 9.4 % 11.1 % 12.6 %
Income Margin
Plus: Depreciation 1,065 1,065 1,389 1,426 1,488
and amortization
EBITDA1 $ 801 $ 869 $ 2,408 $ 2,871 $ 3,080
EBITDA as a % of 14.2 % 15.0 % 22.2 % 22.1 % 24.3 %
Revenues
Entertainment
Group Segment
Adjusted Operating
Revenues
Three Months Ended
3/31/15 3/31/16
Segment Operating $ 5,660 $ 12,658
Revenues
DIRECTV Operating 6,456
Revenues2
Adjustments:
Other DIRECTV 88
operations
Revenue 95
recognition
Intercompany (16 )
eliminations
Adjusted Total $ 12,283 $ 12,658
Segment Operating
Revenues
YoY Growth 3.1 %
1 For AT&T, EBITDA
is defined as
operating income
before
depreciation and
amortization.
EBITDA differs
from Segment
Operating Income
(Loss), as
calculated in
accordance with
U.S. generally
accepted
accounting
principles (GAAP),
in that it
excludes
depreciation and
amortization.
EBITDA does not
give effect to
cash used for debt
service
requirements and
thus does not
reflect available
funds for
distributions,
reinvestment or
other
discretionary
uses. EBITDA is
not presented as
an alternative
measure of
operating results
or cash flows from
operations, as
determined in
accordance with
GAAP. Our
calculation of
EBITDA, as
presented, may
differ from
similarly titled
measures reported
by other
companies.2
Includes operating
revenues for
DIRECTV, as
reported in
DIRECTV's Form 10
-Q for the period
ended 3/31/15.3
Includes certain
adjustments to
conform to AT&T
methodology and
presentation and
eliminate
intercompany
transactions.
Revenue
recognition
adjustment
conforms DIRECTV's
practice of
recognizing
revenue to be
received under
contractual
commitments on a
straight line
basis over the
minimum contract
period to AT&T's
method of limiting
the revenue
recognized to the
monthly amounts
billed.
Financial Data
AT&T Inc.
Non-GAAP Segment
Reconciliation
Consumer Mobility
Segment EBITDA
Dollars in millions
Unaudited
Three Months Ended
3/31/15 6/30/15 9/30/15 12/31/15 3/31/16
Segment Operating
Revenues
Total Segment Operating $ 8,778 $ 8,755 $ 8,784 $ 8,749 $ 8,328
Revenues
Segment Operating 2,235 2,619 2,743 2,141 2,494
Income
Segment Operating 25.5 % 29.9 % 31.2 % 24.5 % 29.9 %
Income Margin
Plus: Depreciation and 1,002 934 976 939 922
amortization
EBITDA1 $ 3,237 $ 3,553 $ 3,719 $ 3,080 $ 3,416
EBITDA as a % of 36.9 % 40.6 % 42.3 % 35.2 % 41.0 %
Revenues
International Segment
EBITDA
Three Months Ended
3/31/15 6/30/15 9/30/15 12/31/15 3/31/16
Segment Operating
Revenues
Total Segment Operating $ 236 $ 491 $ 1,526 $ 1,849 $ 1,667
Revenues
Segment Operating (10 ) (131 ) (83 ) (259 ) (198 )
Income
Segment Operating -4.2 % -26.7 % -5.4 % -14.0 % -11.9 %
Income Margin
Plus: Depreciation and 28 93 225 309 277
amortization
EBITDA1 $ 18 $ (38 ) $ 142 $ 50 $ 79
EBITDA as a % of 7.6 % -7.7 % 9.3 % 2.7 % 4.7 %
Revenues
1 For AT&T, EBITDA is
defined as operating
income before
depreciation and
amortization. EBITDA
differs from Segment
Operating Income
(Loss), as calculated
in accordance with U.S.
generally accepted
accounting principles
(GAAP), in that it
excludes depreciation
and amortization.
EBITDA does not give
effect to cash used for
debt service
requirements and thus
does not reflect
available funds for
distributions,
reinvestment or other
discretionary uses.
EBITDA is not presented
as an alternative
measure of operating
results or cash flows
from operations, as
determined in
accordance with GAAP.
Our calculation of
EBITDA, as presented,
may differ from
similarly titled
measures reported by
other companies.
Financial Data
AT&T Inc.
Non-GAAP
Reconciliation -
Supplemental
AT&T Mobility
EBITDA
Dollars in
millions
Unaudited
Three Months Ended
3/31/15 6/30/15 9/30/15 12/31/15 3/31/16
Operating Revenues
Service Revenues $ 14,812 $ 15,115 $ 15,095 $ 14,815 $ 14,798
Equipment Revenues 3,374 3,189 3,234 4,071 3,156
Total Operating $ 18,186 $ 18,304 $ 18,329 $ 18,886 $ 17,954
Revenues
Operating Income 4,709 5,300 5,418 4,376 5,274
Operating Income 25.9 % 29.0 % 29.6 % 23.2 % 29.4 %
Margin
Plus: Depreciation 2,005 2,031 2,046 2,031 2,056
and amortization
EBITDA1 $ 6,714 $ 7,331 $ 7,464 $ 6,407 $ 7,330
YoY Growth 9.2 %
EBITDA as a % of 36.9 % 40.1 % 40.7 % 33.9 % 40.8 %
Revenues
EBITDA as a % of 45.3 % 48.5 % 49.4 % 43.2 % 49.5 %
Service Revenues
Mexico EBITDA
Dollars in
millions
Unaudited
Three Months Ended
3/31/15 6/30/15 9/30/15 12/31/15 3/31/16
Operating Revenues
Total Operating $ 236 $ 491 $ 581 $ 643 $ 537
Revenues
Operating Income (10 ) (131 ) (134 ) (258 ) (251 )
Operating Income -4.2 % -26.7 % -23.1 % -40.1 % -46.7 %
Margin
Plus: Depreciation 28 93 67 89 81
and amortization
EBITDA1 $ 18 $ (38 ) $ (67 ) $ (169 ) $ (170 )
EBITDA as a % of 7.6 % -7.7 % -11.5 % -26.3 % -31.7 %
Revenues
1 For AT&T, EBITDA
is defined as
operating income
before
depreciation and
amortization.
EBITDA service
margin is
calculated as
EBITDA divided by
service revenues.
EBITDA differs
from Segment
Operating Income
(Loss), as
calculated in
accordance with
U.S. generally
accepted
accounting
principles (GAAP),
in that it
excludes
depreciation and
amortization.
EBITDA does not
give effect to
cash used for debt
service
requirements and
thus does not
reflect available
funds for
distributions,
reinvestment or
other
discretionary
uses. EBITDA is
not presented as
an alternative
measure of
operating results
or cash flows from
operations, as
determined in
accordance with
GAAP. Our
calculation of
EBITDA, as
presented, may
differ from
similarly titled
measures reported
by other
companies.
Financial Data
AT&T Inc.
Non-GAAP Consolidated Reconciliation
Adjusted Diluted EPS1
Unaudited
Three Months Ended
March 31,
2015 2016
Reported Diluted EPS $ 0.63 $ 0.61
Adjustments:
Amortization of intangible assets 0.01 0.14
Merger and integration costs2 0.04 0.03
Tax-related item (0.05 ) -
Gain on transfer of wireless spectrum - (0.08 )
Other3 0.02 0.02
Adjusted Diluted EPS $ 0.65 $ 0.72
Year-over-year growth - Adjusted 10.8 %
Weighted Average Common Shares Outstanding
with Dilution (000,000) 5,219 6,190
1 2015 Adjusted Diluted EPS has been restated to reflect the change in accounting for customer set-up and installation costs.2 Adjustments include DIRECTV merger and integration costs, domestic and international wireless merger and integration costs.3 Other adjustments include employee separation costs and other costs.
Adjusted Diluted EPS is a non-GAAP financial measure calculated by excluding from operating revenues, operating expenses, and income tax expense certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs. Management believes that this measure provides relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.
Adjusted Diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. Our calculation of Adjusted Diluted EPS, as presented, may differ from similarly titled measures reported by other companies. Sum of components may not tie due to rounding.
Financial Data
AT&T Inc.
Non-GAAP Consolidated Reconciliation
Capital Investment
Dollars in millions
Unaudited
Three Months
Ended
March 31,
2016
Reported construction and capital $ 4,669
expenditures
Add: Vendor financing for capital 43
investments in Mexico
Capital Investment $ 4,712
Free Cash Flow
Dollars in millions
Unaudited
Three Months Ended
March 31,
2015 2016
Net cash provided by operating $ 6,738 $ 7,900
activities
Less: Construction and capital (3,971 ) (4,669 )
expenditures
Free Cash Flow $ 2,767 $ 3,231
Free Cash Flow after Dividends
Dollars in millions
Unaudited
Three Months Ended
March 31,
2015 2016
Net cash provided by operating $ 6,738 $ 7,900
activities
Less: Construction and capital (3,971 ) (4,669 )
expenditures
Free Cash Flow 2,767 3,231
Less: Dividends paid (2,434 ) (2,947 )
Free Cash Flow after Dividends $ 333 $ 284
Capital Investment is a non-GAAP
financial measure calculated by
including financing arrangements for
capital improvements of the wireless
network in Mexico. These favorable
payment terms are considered vendor
financing arrangements and are reported
as repayments of debt instead of
capital expenditures. Management
believes that Capital Investment
provides relevant and useful
information to investors and other
users of our financial data in
evaluating the investment in our
business. Free cash flow includes
reimbursements of certain
postretirement benefits paid. Free cash
flow is defined as cash from operations
minus construction and capital
expenditures. Free cash flow after
dividends is defined as cash from
operations minus construction, capital
expenditures and dividends. We believe
these metrics provide useful
information to our investors because
management regularly reviews free cash
flow as an important indicator of the
cash generated by normal business
operations, including capital
expenditures, and makes decisions based
on it. Management also views free cash
flow as a measure of cash available to
pay debt and return cash to
shareowners.
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