REG - AT & T Inc. - 3rd Quarter Results 2017 8-K <Origin Href="QuoteRef">T.N</Origin> - Part 4
08/12/2017 15:51
- Part 4: For the preceding part double click ID:nRSH8713Yc
1,136 1,282 3,508 3,949
Adjustments to Operating Expenses 1,596 1,871 4,174 4,384
Other
Merger related interest expense and exchange fees1 485 - 752 16
(Gain) loss on sale of assets, impairments and other adjustments2 (81) - 140 4
Adjustments to Income Before Income Taxes 2,089 1,884 5,155 4,417
Tax impact of adjustments 716 640 1,717 1,521
Tax-related items (146) - (146) -
Adjustments to Net Income $ 1,519 $ 1,244 $ 3,584 $ 2,896
1 Includes interest expense incurred on the debt issued prior to the close of merger transactions.
2 Includes interest income earned on cash held prior to the close of merger transactions.
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA
service margin and Adjusted diluted EPS are non-GAAP financial measures 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 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 Operating Revenues, Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA
margin, Adjusted EBITDA service margin and 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. AT&T's calculation of Adjusted
items, as presented, may differ from similarly titled measures reported by other companies.
5
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA Service Margin
Dollars in millions Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Operating Income $ 6,403 $ 6,408 $ 20,590 $ 20,099
Adjustments to Operating Revenues 89 13 89 13
Adjustments to Operating Expenses 1,596 1,871 4,174 4,384
Adjusted Operating Income1 8,088 8,292 24,853 24,496
EBITDA 12,445 12,987 38,906 39,817
Adjustments to Operating Revenues 89 13 89 13
Adjustments to Operations and Support Expenses 460 589 666 435
Adjusted EBITDA1 12,994 13,589 39,661 40,265
Total Operating Revenues 39,668 40,890 118,870 121,945
Adjustments to Operating Revenues 89 13 89 13
Total Adjusted Operating Revenues 39,757 40,903 118,959 121,958
Service Revenues 36,378 37,272 109,372 111,515
Adjustments to Service Revenues 89 13 89 13
Adjusted Service Revenues 36,467 37,285 109,461 111,528
Operating Income Margin 16.1% 15.7% 17.3% 16.5%
Adjusted Operating Income Margin1 20.3% 20.3% 20.9% 20.1%
Adjusted EBITDA Margin1 32.7% 33.2% 33.3% 33.0%
Adjusted EBITDA Service Margin1 35.6% 36.4% 36.2% 36.1%
1 Adjusted Operating Income, Adjusted EBITDA and associated margins exclude all actuarial gains or losses ($259 million gain for the first nine months of 2017) associated with our postemployment benefit plan, which we immediately recognize in the income statement, pursuant to our accounting policy for the recognition of actuarial gains/losses.
Adjusted Diluted EPS
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Diluted Earnings Per Share (EPS) $ 0.49 $ 0.54 $ 1.69 $ 1.70
Amortization of intangible assets 0.12 0.14 0.38 0.42
Merger integration and other items1 0.06 0.03 0.14 0.09
Asset abandonments, impairments and other adjustments 0.05 0.03 0.06 0.03
Actuarial (gain) loss - - (0.03) -
(Gain) loss on transfer of wireless spectrum - - (0.02) (0.07)
Venezuela devaluation - - 0.02 -
Tax-related items 0.02 - 0.02 -
Adjusted EPS $ 0.74 $ 0.74 $ 2.26 $ 2.17
Year-over-year growth - Adjusted 0.0% 4.1%
Weighted Average Common Shares Outstanding with Dilution (000,000) 6,182 6,189 6,184 6,191
1Includes combined merger integration items, merger-related interest income and expense.
6
Net Debt to Adjusted EBITDA
Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and
management believes these measures provide relevant and useful information to investors and other users of our financial
data. The Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by Annualized Adjusted EBITDA. Net Debt
is calculated by subtracting cash and cash equivalents and certificates of deposit and time deposits that are greater than
90 days, from the sum of debt maturing within one year and long-term debt. Annualized Adjusted EBITDA is calculated by
annualizing the year-to-date Adjusted EBITDA.
Net Debt to Adjusted EBITDA
Dollars in millions
Three Months Ended
Mar. 31, Jun. 30, Sep. 30, YTD 2017
2017 2017 2017
Adjusted EBITDA $ 13,080 $ 13,587 $ 12,994 $ 39,661
Add back severance - (60) (208) (268)
Net Debt Adjusted EBITDA 13,080 13,527 12,786 39,393
Annualized Adjusted EBITDA 52,524
End-of-period current debt 8,551
End-of-period long-term debt 154,728
Total End-of-Period Debt 163,279
Less: Cash and Cash Equivalents 48,499
Net Debt Balance 114,780
Annualized Net Debt to Adjusted EBITDA Ratio 2.19
7
Supplemental Operational Measures
We provide a supplemental discussion of our domestic wireless operations that is calculated by combining our Consumer
Mobility and Business Solutions segments, and then adjusting to remove non-wireless operations. The following table
presents a reconciliation of our supplemental AT&T Mobility results.
Supplemental Operational Measure
Three Months Ended
September 30, 2017 September 30, 2016
Consumer Mobility Business Solutions Adjustments1 AT&T Mobility Consumer Mobility Business Solutions Adjustments1 AT&T Mobility
Operating Revenues
Wireless service $ 6,507 $ 8,034 $ - $ 14,541 $ 6,914 $ 8,050 $ - $ 14,964
Fixed strategic services - 3,087 (3,087) - - 2,913 (2,913) -
Legacy voice and data services - 3,434 (3,434) - - 4,042 (4,042) -
Other services and equipment - 852 (852) - - 886 (886) -
Wireless equipment 1,241 1,654 - 2,895 1,353 1,876 - 3,229
Total Operating Revenues 7,748 17,061 (7,373) 17,436 8,267 17,767 (7,841) 18,193
Operating Expenses
Operations and support 4,551 10,233 (4,671) 10,113 4,751 10,925 (4,979) 10,697
EBITDA 3,197 6,828 (2,702) 7,323 3,516 6,842 (2,862) 7,496
Depreciation and amortization 877 2,325 (1,192) 2,010 944 2,539 (1,376) 2,107
Total Operating Expense 5,428 12,558 (5,863) 12,123 5,695 13,464 (6,355) 12,804
Operating Income $ 2,320 $ 4,503 $ (1,510) $ 5,313 $ 2,572 $ 4,303 $ (1,486) $ 5,389
1 Non-wireless (fixed) operations reported in Business Solutions segment.
Supplemental Operational Measure
Nine Months Ended
September 30, 2017 September 30, 2016
Consumer Mobility Business Solutions Adjustments1 AT&T Mobility Consumer Mobility Business Solutions Adjustments1 AT&T Mobility
Operating Revenues
Wireless service $ 19,644 $ 23,969 $ - $ 43,613 $ 20,805 $ 23,868 $ - $ 44,673
Fixed strategic services - 9,089 (9,089) - - 8,469 (8,469) -
Legacy voice and data services - 10,572 (10,572) - - 12,577 (12,577) -
Other services and equipment - 2,513 (2,513) - - 2,619 (2,619) -
Wireless equipment 3,635 4,873 - 8,508 3,976 5,422 - 9,398
Total Operating Revenues 23,279 51,016 (22,174) 52,121 24,781 52,955 (23,665) 54,071
Operating Expenses
Operations and support 13,599 30,722 (14,013) 30,308 14,343 32,584 (15,105) 31,822
EBITDA 9,680 20,294 (8,161) 21,813 10,438 20,371 (8,560) 22,249
Depreciation and amortization 2,621 6,972 (3,594) 5,999 2,798 7,568 (4,122) 6,244
Total Operating Expense 16,220 37,694 (17,607) 36,307 17,141 40,152 (19,227) 38,066
Operating Income $ 7,059 $ 13,322 $ (4,567) $ 15,814 $ 7,640 $ 12,803 $ (4,438) $ 16,005
1 Non-wireless (fixed) operations reported in Business Solutions segment.
8
Supplemental International
We provide a supplemental presentation of the Latin America and Mexico Wireless operations within our International
segment. The following table presents a reconciliation of our International segment.
Supplemental International
Three Months Ended
September 30, 2017 September 30, 2016
Latin America Mexico International Latin America Mexico International
Operating Revenues
Video service $ 1,363 $ - $ 1,363 $ 1,297 $ - $ 1,297
Wireless service - 536 536 - 484 484
Wireless equipment - 200 200 - 98 98
Total Operating Revenues 1,363 736 2,099 1,297 582 1,879
Operating Expenses
Operations and support 1,075 862 1,937 991 649 1,640
Depreciation and amortization 206 98 304 212 81 293
Total Operating Expenses 1,281 960 2,241 1,203 730 1,933
Operating Income (Loss) 82 (224) (142) 94 (148) (54)
Equity in Net Income of Affiliates 17 - 17 1 - 1
Segment Contribution $ 99 $ (224) $ (125) $ 95 $ (148) $ (53)
Supplemental International
Nine Months Ended
September 30, 2017 September 30, 2016
Latin America Mexico International Latin America Mexico International
Operating Revenues
Video service $ 4,065 $ - $ 4,065 $ 3,649 $ - $ 3,649
Wireless service - 1,546 1,546 - 1,428 1,428
Wireless equipment - 443 443 - 297 297
Total Operating Revenues 4,065 1,989 6,054 3,649 1,725 5,374
Operating Expenses
Operations and support 3,123 2,345 5,468 2,850 2,101 4,951
Depreciation and amortization 642 263 905 620 248 868
Total Operating Expenses 3,765 2,608 6,373 3,470 2,349 5,819
Operating Income (Loss) 300 (619) (319) 179 (624) (445)
Equity in Net Income of Affiliates 62 - 62 24 - 24
Segment Contribution $ 362 $ (619) $ (257) $ 203 $ (624) $ (421)
9
This information is provided by RNS
The company news service from the London Stock ExchangeRecent news on AT&T
See all newsREG - AT & T Inc. - Annual Financial Report
AnnouncementREG - Societe Generale SA - Stabilisation Notice - AT+T
AnnouncementREG - Societe Generale SA - Stabilisation Notice - AT&T
AnnouncementREG - Societe Generale SA - Stabilisation Notice - AT&T
AnnouncementREG - Nestle SA Nestle Holdings Inc - Nestlé appoints Lisa Gibby as CCO
Announcement