AT&T Reports Second-Quarter Results

• Consolidated revenues of $39.8 billion
• Operating income of $7.3 billion
• Net income attributable to AT&T of $3.9 billion
• Diluted EPS of $0.63 as reported and $0.79 as adjusted, compared to $0.55 and $0.72 in the year-ago quarter
• Cash from operations of $8.9 billion
• Free cash flow of $3.7 billion

Company Maintains Full-Year Guidance

• U.S. wireless results:
  • Best-ever postpaid phone churn of 0.79%
  • Total postpaid churn, including tablets, of 1.01%
  • Growing operating income margin of 30.4% with record-high EBITDA margins including best-ever wireless service margin of 50.4%
• 2.8 million wireless net adds
  • 2.3 million U.S., driven by connected devices, prepaid and postpaid
  • 476,000 Mexico net adds
• Entertainment Group results:
  • 112,000 IP broadband net adds; 8,000 total broadband net adds
  • More than 5.5 million AT&T Fiber customer locations passed
  • Total video losses of 199,000 with DIRECTV NOW gains helping offset traditional TV subscriber decline; Total video subscribers essentially flat year over year
• International results:
  • Revenues up 10.8% with favorable operating trends
  • Continued revenue growth and margin improvement in Mexico

Note: AT&T’s second-quarter earnings conference call will be webcast at 4:30 p.m. ET on Tuesday, July 25, 2017. The webcast and related materials will be available on AT&T’s Investor Relations website at https://investors.att.com.

DALLAS--(BUSINESS WIRE)--AT&T Inc.* (NYSE:T) reported strong adjusted earnings growth and margin expansion with lower expenses in the second quarter.

“Once again our team delivered expanded consolidated margins and, as a result, grew adjusted earnings per share by nearly 10% as we executed well against our business priorities,” said Randall Stephenson, AT&T chairman and CEO. “And in a quarter where our competitors used promotions aggressively, we added more than 500,000 branded smartphones to our base and more than 100,000 IP broadband subscribers, achieved record EBITDA wireless margins and had the lowest postpaid phone churn in our history. We continue to expect the Time Warner deal to close by year-end and further transform the company.”

Consolidated Financial Results

AT&T’s consolidated revenues for the second quarter totaled $39.8 billion versus $40.5 billion in the year-ago quarter, primarily due to declines in legacy wireline services and consumer mobility. Compared with results for the second quarter of 2016, operating expenses were $32.5 billion versus $34.0 billion; operating income was $7.3 billion versus $6.6 billion; and operating income margin was 18.4% versus 16.2%. When adjusting for amortization, merger- and integration-related expenses and other items, operating income was $8.6 billion versus $8.1 billion and operating income margin was 21.6%, up 150 basis points versus the year-ago quarter.

Second-quarter net income attributable to AT&T totaled $3.9 billion, or $0.63 per diluted share, compared with $3.4 billion, or $0.55 per diluted share, in the year-ago quarter. Adjusting for $0.16 of costs for amortization, merger- and integration-related expenses and other items, earnings per diluted share was $0.79 compared with an adjusted $0.72 in the year-ago quarter, up 9.7%.

Cash from operating activities was $8.9 billion in the second quarter and $18.2 billion year to date. Capital expenditures were $5.2 billion in the quarter and $11.2 billion year to date. Free cash flow — cash from operating activities minus capital expenditures — was $3.7 billion for the quarter and $6.9 billion year to date.

*About AT&T
AT&T Inc. (NYSE:T) helps millions around the globe connect with leading entertainment, business, mobile and high speed internet services. We offer the nation’s best data network** and the best global coverage of any U.S. wireless provider. We’re one of the world’s largest providers of pay TV. We have TV customers in the U.S. and 11 Latin American countries. Nearly 3.5 million companies, from small to large businesses around the globe, turn to AT&T for our highly secure smart solutions.

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 about AT&T products and services is available at about.att.com. Follow our news on Twitter at @ATT, on Facebook at facebook.com/att and on YouTube at youtube.com/att.

© 2017 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.

**Claim based on the Nielsen Certified Data Network Score. Score includes data reported by wireless consumers in the Nielsen Mobile Insights survey, network measurements from Nielsen Mobile Performance and Nielsen Drive Test Benchmarks for Q4 2016 + Q1 2017 across 121 markets.

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.

Discussion and Reconciliation of Non-GAAP Measures

We believe the following measures are relevant and useful information to investors as they are part of AT&T’s internal management reporting and planning processes and are important metrics that management uses to evaluate the operating performance of AT&T and its segments. Management also uses these measures as a method of comparing performance with that of many of our competitors.

Free Cash Flow

Free cash flow is defined as cash from operations minus Capital expenditures. Free cash flow after dividends is defined as cash from operations minus Capital expenditures and dividends. Free cash flow dividend payout ratio is defined as the percentage of dividends paid to free cash flow. We believe these metrics provide useful information to our investors because management views free cash flow as an important indicator of how much cash is generated by routine 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.

Free Cash Flow and Free Cash Flow Dividend Payout Ratio
Dollars in millions	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Net cash provided by operating activities	$	8,942		$	10,307		$	18,160		$	18,207
Less: Capital expenditures		(5,208	)		(5,470	)		(11,223	)		(10,139	)
Free Cash Flow		3,734			4,837			6,937			8,068
Less: Dividends paid		(3,012	)		(2,952	)		(6,021	)		(5,899	)
Free Cash Flow after Dividends	$	722		$	1,885		$	916		$	2,169
Free Cash Flow Dividend Payout Ratio		80.7	%		61.0	%		86.8	%		73.1	%

EBITDA

Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies. For AT&T, EBITDA excludes other income (expense) – net, and equity in net income (loss) of affiliates, as these do not reflect the operating results of our subscriber base or operations that are not under our control. Equity in net income (loss) of affiliates represents the proportionate share of the net income (loss) of affiliates in which we exercise significant influence, but do not control. Because we do not control these entities, management excludes these results when evaluating the performance of our primary operations. EBITDA also excludes interest expense and the provision for income taxes. Excluding these items eliminates the expenses associated with our capital and tax structures. Finally, EBITDA excludes depreciation and amortization in order to eliminate the impact of capital investments. 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 U.S. generally accepted accounting principles (GAAP).

EBITDA service margin is calculated as EBITDA divided by service revenues.

When discussing our segment results, EBITDA excludes equity in net income (loss) of affiliates, and depreciation and amortization from segment contribution. For our supplemental presentation of our combined domestic wireless operations (AT&T Mobility) and our supplemental presentation of the Mexico Wireless and Latin America operations of our International segment, EBITDA excludes depreciation and amortization from operating income.

These measures are used by management as a gauge of our success in acquiring, retaining and servicing subscribers because we believe these measures reflect AT&T’s ability to generate and grow subscriber revenues while providing a high level of customer service in a cost-effective manner. Management also uses these measures as a method of comparing segment performance with that of many of its competitors. The financial and operating metrics which affect EBITDA include the key revenue and expense drivers for which segment managers are responsible and upon which we evaluate their performance. Management uses Mexico Wireless EBITDA in evaluating profitability trends after our two Mexico wireless acquisitions in 2015, and our investments in building a nationwide LTE network by end of 2018. Management uses Latin America EBITDA in evaluating the ability of our Latin America operations to generate cash to finance its own operations.

We believe EBITDA Service Margin (EBITDA as a percentage of service revenues) to be a more relevant measure than EBITDA Margin (EBITDA as a percentage of total revenue) for our Consumer Mobility segment operating margin and our supplemental AT&T Mobility operating margin. We also use wireless service revenues to calculate margin to facilitate comparison, both internally and externally with our wireless competitors, as they calculate their margins using wireless service revenues as well.

There are material limitations to using these non-GAAP financial measures. EBITDA, EBITDA margin and EBITDA service margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies. Furthermore, these performance measures do not take into account certain significant items, including depreciation and amortization, interest expense, tax expense and equity in net income (loss) of affiliates. Management compensates for these limitations by carefully analyzing how its competitors present performance measures that are similar in nature to EBITDA as we present it, and considering the economic effect of the excluded expense items independently as well as in connection with its analysis of net income as calculated in accordance with GAAP. EBITDA, EBITDA margin and EBITDA service margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.

EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Net Income	$	4,014		$	3,515		$	7,588		$	7,400
Additions:
Income Tax Expense		2,056			1,906			3,860			4,028
Interest Expense		1,395			1,258			2,688			2,465
Equity in Net (Income) Loss of Affiliates		(14	)		(28	)		159			(41	)
Other (Income) Expense - Net		(128	)		(91	)		(108	)		(161	)
Depreciation and amortization		6,147			6,576			12,274			13,139
EBITDA		13,470			13,136			26,461			26,830
Total Operating Revenues		39,837			40,520			79,202			81,055
Service Revenues		36,538			37,142			72,994			74,243
EBITDA Margin		33.8	%		32.4	%		33.4	%		33.1	%
EBITDA Service Margin		36.9	%		35.4	%		36.3	%		36.1	%

Segment EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Business Solutions Segment
Segment Contribution	$	4,459		$	4,201		$	8,819		$	8,500
Additions:
Depreciation and amortization		2,335			2,521			4,647			5,029
EBITDA		6,794			6,722			13,466			13,529
Total Segment Operating Revenues		17,107			17,579			33,955			35,188
Segment Operating Income Margin		26.1	%		23.9	%		26.0	%		24.2	%
EBITDA Margin		39.7	%		38.2	%		39.7	%		38.4	%
Entertainment Group Segment
Segment Contribution	$	1,655		$	1,651		$	3,252		$	3,246
Additions:
Equity in Net (Income) Loss of Affiliates		11			2			17			(1	)
Depreciation and amortization		1,458			1,489			2,877			2,977
EBITDA		3,124			3,142			6,146			6,222
Total Segment Operating Revenues		12,682			12,711			25,305			25,369
Segment Operating Income Margin		13.1	%		13.0	%		12.9	%		12.8	%
EBITDA Margin		24.6	%		24.7	%		24.3	%		24.5	%
Consumer Mobility Segment
Segment Contribution	$	2,400		$	2,574		$	4,739		$	5,068
Additions:
Depreciation and amortization		871			932			1,744			1,854
EBITDA		3,271			3,506			6,483			6,922
Total Segment Operating Revenues		7,791			8,186			15,531			16,514
Service Revenues		6,528			6,948			13,137			13,891
Segment Operating Income Margin		30.8	%		31.4	%		30.5	%		30.7	%
EBITDA Margin		42.0	%		42.8	%		41.7	%		41.9	%
EBITDA Service Margin		50.1	%		50.5	%		49.3	%		49.8	%
International Segment
Segment Contribution	$	(32	)	$	(184	)	$	(132	)	$	(368	)
Additions:
Equity in Net (Income) of Affiliates		(25	)		(9	)		(45	)		(23	)
Depreciation and amortization		311			298			601			575
EBITDA		254			105			424			184
Total Segment Operating Revenues		2,026			1,828			3,955			3,495
Segment Operating Income Margin		-2.8	%		-10.6	%		-4.5	%		-11.2	%
EBITDA Margin		12.5	%		5.7	%		10.7	%		5.3	%

Supplemental AT&T Mobility EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
AT&T Mobility
Operating Income	$	5,329		$	5,342		$	10,501		$	10,616
Add: Depreciation and amortization		1,992			2,081			3,989			4,137
EBITDA		7,321			7,423			14,490			14,753
Total Operating Revenues		17,518			17,924			34,685			35,878
Service Revenues		14,534			14,911			29,072			29,709
Operating Income Margin		30.4	%		29.8	%		30.3	%		29.6	%
EBITDA Margin		41.8	%		41.4	%		41.8	%		41.1	%
EBITDA Service Margin		50.4	%		49.8	%		49.8	%		49.7	%

Supplemental Latin America EBITDA and EBITDA Margin
Dollars in millions	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
International - Latin America
Operating Income	$	141		$	32		$	218		$	85
Add: Depreciation and amortization		222			212			436			408
EBITDA		363			244			654			493
Total Operating Revenues		1,361			1,222			2,702			2,352
Operating Income Margin		10.4	%		2.6	%		8.1	%		3.6	%
EBITDA Margin		26.7	%		20.0	%		24.2	%		21.0	%

Supplemental Mexico EBITDA and EBITDA Margin
Dollars in millions	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
International - Mexico
Operating Income	$	(198	)	$	(225	)	$	(395	)	$	(476	)
Add: Depreciation and amortization		89			86			165			167
EBITDA		(109	)		(139	)		(230	)		(309	)
Total Operating Revenues		665			606			1,253			1,143
Operating Income Margin		-29.8	%		-37.1	%		-31.5	%		-41.6	%
EBITDA Margin		-16.4	%		-22.9	%		-18.4	%		-27.0	%

Adjusting Items

Adjusting items include revenues and costs we consider nonoperational in nature, such as items arising from asset acquisitions or dispositions. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often significant impact on our fourth-quarter results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses.) Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income.

The tax impact of adjusting items is calculated using the effective tax rate during the quarter except for adjustments that, given their magnitude can drive a change in the effective tax rate, reflect the actual tax expense or combined marginal rate of approximately 38%. Certain foreign operations with losses, where such losses are not realizable for tax purposes, are not tax effected, resulting in no tax impact for Venezuela devaluation. For years prior to 2017, adjustments related to Mexico operations were taxed at the 30% marginal rate for Mexico.

Adjusting Items
Dollars in millions	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2017			2016		2017			2016
Operating Expenses
DIRECTV and other video merger integration costs	$	123		$	133	$	250		$	306
Mexico merger integration costs		80			66		119			147
Time Warner merger costs		78			-		119			-
Wireless merger integration costs		-			33		-			75
Actuarial (gain) loss		(259	)		-		(259	)		-
Employee separation costs		60			29		60			54
(Gain) loss on transfer of wireless spectrum		(63	)		-		(181	)		(736	)
Venezuela devaluation		98			-		98			-
Adjustments to Operations and Support Expenses		117			261		206			(154	)
Amortization of intangible assets		1,170			1,316		2,372			2,667
Adjustments to Operating Expenses		1,287			1,577		2,578			2,513
Other
Merger related interest expense and exchange fees^1		158			-		267			16
(Gain) loss on sale of assets, impairments and other adjustments		(36	)		-		221			4
Adjustments to Income Before Income Taxes		1,409			1,577		3,066			2,533
Tax impact of adjustments		445			550		1,001			881
Adjustments to Net Income	$	964		$	1,027	$	2,065		$	1,652
^1Includes interest expense incurred on the debt issued 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.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA Service Margin
Dollars in millions	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Operating Income	$	7,323		$	6,560		$	14,187		$	13,691
Adjustments to Operating Expenses		1,287			1,577			2,578			2,513
Adjusted Operating Income^1		8,610			8,137			16,765			16,204
EBITDA		13,470			13,136			26,461			26,830
Adjustments to Operations and Support Expenses		117			261			206			(154	)
Adjusted EBITDA^1		13,587			13,397			26,667			26,676
Total Operating Revenues		39,837			40,520			79,202			81,055
Service Revenues		36,538			37,142			72,994			74,243
Operating Income Margin		18.4	%		16.2	%		17.9	%		16.9	%
Adjusted Operating Income Margin^1		21.6	%		20.1	%		21.2	%		20.0	%
Adjusted EBITDA Margin^1		34.1	%		33.1	%		33.7	%		32.9	%
Adjusted EBITDA Service Margin^1		37.2	%		36.1	%		36.5	%		35.9	%
^1Adjusted Operating Income, Adjusted EBITDA and associated margins exclude all actuarial gains or losses ($259 million gain in the second quarter 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. As a result, Adjusted Operating Income and Margin reflect an expected return on plan assets of $106 million (based on an average expected return on plan assets of 5.75% for our VEBA trusts), rather than the actual return on plan assets of $234 million (actual annualized VEBA return of 12.2%), as included in the GAAP measure of income.

Adjusted Diluted EPS
	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2017			2016		2017			2016
Diluted Earnings Per Share (EPS)	$	0.63		$	0.55	$	1.19		$	1.17
Amortization of intangible assets		0.13			0.14		0.26			0.28
Merger integration and other items^1		0.05			0.03		0.08			0.06
Asset abandonments, impairments and other adjustments		-			-		0.03			-
Actuarial (gain) loss		(0.03	)		-		(0.03	)		-
(Gain) loss on transfer of wireless spectrum		(0.01	)		-		(0.02	)		(0.08	)
Venezuela devaluation		0.02			-		0.02			-
Adjusted EPS	$	0.79		$	0.72	$	1.53		$	1.43
Year-over-year growth - Adjusted		9.7	%				7.0	%
Weighted Average Common Shares Outstanding with Dilution (000,000)		6,184			6,195		6,185			6,193
^1Includes combined merger integration items, merger-related interest expense.

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,				YTD 2017
	2017		2017
Adjusted EBITDA	$	13,080	$	13,587		$	26,667
Add back severance		-		(60	)		(60	)
Net Debt Adjusted EBITDA		13,080		13,527			26,607
Annualized Adjusted EBITDA							53,214
End-of-period current debt							10,831
End-of-period long-term debt							132,824
Total End-of-Period Debt							143,655
Less: Cash and Cash Equivalents							25,617
Net Debt Balance							118,038
Annualized Net Debt to Adjusted EBITDA Ratio							2.22

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
	June 30, 2017									June 30, 2016
	Consumer Mobility		Business Solutions		Adjustments^1			AT&T Mobility		Consumer Mobility		Business Solutions		Adjustments^1			AT&T Mobility
Operating Revenues
Wireless service	$	6,528	$	8,006	$	-		$	14,534	$	6,948	$	7,963	$	-		$	14,911
Fixed strategic services		-		3,028		(3,028	)		-		-		2,805		(2,805	)		-
Legacy voice and data services		-		3,508		(3,508	)		-		-		4,162		(4,162	)		-
Other services and equipment		-		844		(844	)		-		-		874		(874	)		-
Wireless equipment		1,263		1,721		-			2,984		1,238		1,775		-			3,013
Total Operating Revenues		7,791		17,107		(7,380	)		17,518		8,186		17,579		(7,841	)		17,924
Operating Expenses
Operations and support		4,520		10,313		(4,636	)		10,197		4,680		10,857		(5,036	)		10,501
EBITDA		3,271		6,794		(2,744	)		7,321		3,506		6,722		(2,805	)		7,423
Depreciation and amortization		871		2,335		(1,214	)		1,992		932		2,521		(1,372	)		2,081
Total Operating Expenses		5,391		12,648		(5,850	)		12,189		5,612		13,378		(6,408	)		12,582
Operating Income	$	2,400	$	4,459	$	(1,530	)	$	5,329	$	2,574	$	4,201	$	(1,433	)	$	5,342
^1Non-wireless (fixed) operations reported in Business Solutions segment.

Supplemental Operational Measure
	Six Months Ended
	June 30, 2017									June 30, 2016
	Consumer Mobility		Business Solutions		Adjustments^1			AT&T Mobility		Consumer Mobility		Business Solutions		Adjustments^1			AT&T Mobility
Operating Revenues
Wireless service	$	13,137	$	15,935	$	-		$	29,072	$	13,891	$	15,818	$	-		$	29,709
Fixed strategic services		-		6,002		(6,002	)		-		-		5,556		(5,556	)		-
Legacy voice and data services		-		7,138		(7,138	)		-		-		8,535		(8,535	)		-
Other services and equipment		-		1,661		(1,661	)		-		-		1,733		(1,733	)		-
Wireless equipment		2,394		3,219		-			5,613		2,623		3,546		-			6,169
Total Operating Revenues		15,531		33,955		(14,801	)		34,685		16,514		35,188		(15,824	)		35,878
Operating Expenses
Operations and support		9,048		20,489		(9,342	)		20,195		9,592		21,659		(10,126	)		21,125
EBITDA		6,483		13,466		(5,459	)		14,490		6,922		13,529		(5,698	)		14,753
Depreciation and amortization		1,744		4,647		(2,402	)		3,989		1,854		5,029		(2,746	)		4,137
Total Operating Expenses		10,792		25,136		(11,744	)		24,184		11,446		26,688		(12,872	)		25,262
Operating Income	$	4,739	$	8,819	$	(3,057	)	$	10,501	$	5,068	$	8,500	$	(2,952	)	$	10,616
^1Non-wireless (fixed) operations reported in Business Solutions segment.

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
	June 30, 2017								June 30, 2016
	Latin America		Mexico			International			Latin America		Mexico			International
Operating Revenues
Video service	$	1,361	$	-		$	1,361		$	1,222	$	-		$	1,222
Wireless service		-		535			535			-		489			489
Wireless equipment		-		130			130			-		117			117
Total Operating Revenues		1,361		665			2,026			1,222		606			1,828
Operating Expenses
Operations and support		998		774			1,772			978		745			1,723
Depreciation and amortization		222		89			311			212		86			298
Total Operating Expenses		1,220		863			2,083			1,190		831			2,021
Operating Income		141		(198	)		(57	)		32		(225	)		(193	)
Equity in Net Income of Affiliates		25		-			25			9		-			9
Segment Contribution	$	166	$	(198	)	$	(32	)	$	41	$	(225	)	$	(184	)

Supplemental International
	Six Months Ended
	June 30, 2017								June 30, 2016
	Latin America		Mexico			International			Latin America		Mexico			International
Operating Revenues
Video service	$	2,702	$	-		$	2,702		$	2,352	$	-		$	2,352
Wireless service		-		1,010			1,010			-		944			944
Wireless equipment		-		243			243			-		199			199
Total Operating Revenues		2,702		1,253			3,955			2,352		1,143			3,495
Operating Expenses
Operations and support		2,048		1,483			3,531			1,859		1,452			3,311
Depreciation and amortization		436		165			601			408		167			575
Total Operating Expenses		2,484		1,648			4,132			2,267		1,619			3,886
Operating Income		218		(395	)		(177	)		85		(476	)		(391	)
Equity in Net Income of Affiliates		45		-			45			23		-			23
Segment Contribution	$	263	$	(395	)	$	(132	)	$	108	$	(476	)	$	(368	)