DALLAS--(BUSINESS WIRE)--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:
- Service revenues up 2.9%; operating income and EBITDA growth with postpaid phone and prepaid net adds
-
179,000 postpaid smartphone net adds in the U.S.
- 80,000 postpaid phone net adds
- 96,000 prepaid net adds of which 85,000 are phones
-
Entertainment Group:
- 13% operating income growth with solid ARPU gains
- 6.9% EBITDA growth as company targets stability
-
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
- Nearly 300,000 AT&T Fiber gains; 45,000 broadband net adds with broadband revenue growth of more than 8%
- 12.4 million customer locations passed with fiber
WarnerMedia Highlights
-
Solid revenue growth with strong operating income growth with gains in
all business units
- Turner subscription revenue growth
- HBO digital subscriber growth continued as last season of Game of Thrones begins
- 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.
1 Based on GWS OneScore Sept. 2018
2 Based 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.
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. These measures should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with U.S. generally accepted accounting principles (GAAP).
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 | |||||||||||
First Quarter | |||||||||||
2019 | 2018 | ||||||||||
Net cash provided by operating activities | $ | 11,052 | $ | 8,947 | |||||||
Less: Capital expenditures | (5,182 | ) | (6,118 | ) | |||||||
Free Cash Flow | 5,870 | 2,829 | |||||||||
Less: Dividends paid | (3,714 | ) | (3,070 | ) | |||||||
Free Cash Flow after Dividends | $ | 2,156 | $ | (241 | ) | ||||||
Free Cash Flow Dividend Payout Ratio | 63.3 | % | 108.5 | % | |||||||
Cash Paid for Capital Investment
In connection with capital improvements, we negotiate with some of our vendors to obtain favorable payment terms of 120 days or more, referred to as vendor financing, which are excluded from capital expenditures and reported in accordance with GAAP as financing activities. We present an additional view of cash paid for capital investment to provide investors with a comprehensive view of cash used to invest in our networks, product developments and support systems.
Cash Paid for Capital Investment | |||||||||||
Dollars in millions | |||||||||||
First Quarter | |||||||||||
2019 | 2018 | ||||||||||
Capital Expenditures | $ | (5,182 | ) | $ | (6,118 | ) | |||||
Cash paid for vendor financing | (820 | ) | (172 | ) | |||||||
Cash paid for Capital Investment | $ | (6,002 | ) | $ | (6,290 | ) | |||||
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, business unit and supplemental results, EBITDA excludes equity in net income (loss) of affiliates, and depreciation and amortization from operating contribution.
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 operating 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 management is responsible and upon which we evaluate performance.
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 Mobility business unit 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 | |||||||||||
First Quarter | |||||||||||
2019 | 2018 | ||||||||||
Net Income | $ | 4,348 | $ | 4,759 | |||||||
Additions: | |||||||||||
Income Tax (Benefit) Expense | 1,023 | 1,382 | |||||||||
Interest Expense | 2,141 | 1,771 | |||||||||
Equity in Net (Income) Loss of Affiliates | 7 | (9 | ) | ||||||||
Other (Income) Expense - Net | (286 | ) | (1,702 | ) | |||||||
Depreciation and amortization | 7,206 | 5,994 | |||||||||
EBITDA | 14,439 | 12,195 | |||||||||
Total Operating Revenues | 44,827 | 38,038 | |||||||||
Service Revenues | 40,684 | 33,646 | |||||||||
EBITDA Margin | 32.2 | % | 32.1 | % | |||||||
EBITDA Service Margin | 35.5 | % | 36.2 | % | |||||||
Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin | |||||||||||
Dollars in millions | |||||||||||
First Quarter | |||||||||||
2019 | 2018 | ||||||||||
Communications Segment | |||||||||||
Operating Contribution | $ | 8,052 | $ | 8,027 | |||||||
Additions: | |||||||||||
Equity in Net (Income) Loss of Affiliates | - | 2 | |||||||||
Depreciation and amortization | 4,593 | 4,575 | |||||||||
EBITDA | 12,645 | 12,604 | |||||||||
Total Operating Revenues | 35,393 | 35,533 | |||||||||
Operating Income Margin | 22.8 | % | 22.6 | % | |||||||
EBITDA Margin | 35.7 | % | 35.5 | % | |||||||
Mobility | |||||||||||
Operating Contribution | $ | 5,351 | $ | 5,158 | |||||||
Additions: | |||||||||||
Depreciation and amortization | 2,035 | 2,095 | |||||||||
EBITDA | 7,386 | 7,253 | |||||||||
Total Operating Revenues | 17,567 | 17,355 | |||||||||
Service Revenues | 13,792 | 13,403 | |||||||||
Operating Income Margin | 30.5 | % | 29.7 | % | |||||||
EBITDA Margin | 42.0 | % | 41.8 | % | |||||||
EBITDA Service Margin | 53.6 | % | 54.1 | % | |||||||
Entertainment Group | |||||||||||
Operating Contribution | $ | 1,478 | $ | 1,309 | |||||||
Additions: | |||||||||||
Equity in Net (Income) Loss of Affiliates | - | 1 | |||||||||
Depreciation and amortization | 1,323 | 1,310 | |||||||||
EBITDA | 2,801 | 2,620 | |||||||||
Total Operating Revenues | 11,328 | 11,431 | |||||||||
Operating Income Margin | 13.0 | % | 11.5 | % | |||||||
EBITDA Margin | 24.7 | % | 22.9 | % | |||||||
Business Wireline | |||||||||||
Operating Contribution | $ | 1,223 | $ | 1,560 | |||||||
Additions: | |||||||||||
Equity in Net (Income) Loss of Affiliates | - | 1 | |||||||||
Depreciation and amortization | 1,235 | 1,170 | |||||||||
EBITDA | 2,458 | 2,731 | |||||||||
Total Operating Revenues | 6,498 | 6,747 | |||||||||
Operating Income Margin | 18.8 | % | 23.1 | % | |||||||
EBITDA Margin | 37.8 | % | 40.5 | % | |||||||
Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin | |||||||||||
Dollars in millions | |||||||||||
First Quarter | |||||||||||
2019 | 2018 | ||||||||||
WarnerMedia Segment | |||||||||||
Operating Contribution | $ | 2,310 | $ | 39 | |||||||
Additions: | |||||||||||
Equity in Net (Income) of Affiliates | (67 | ) | (10 | ) | |||||||
Depreciation and amortization | 143 | 1 | |||||||||
EBITDA | 2,386 | 30 | |||||||||
Total Operating Revenues | 8,379 | 112 | |||||||||
Operating Income Margin | 26.8 | % | 25.9 | % | |||||||
EBITDA Margin | 28.5 | % | 26.8 | % | |||||||
Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin | |||||||||||
Dollars in millions | |||||||||||
First Quarter | |||||||||||
2019 | 2018 | ||||||||||
Latin America Segment | |||||||||||
Operating Contribution | $ | (173 | ) | $ | (111 | ) | |||||
Additions: | |||||||||||
Depreciation and amortization | 300 | 332 | |||||||||
EBITDA | 127 | 221 | |||||||||
Total Operating Revenues | 1,718 | 2,025 | |||||||||
Operating Income Margin | -10.1 | % | -5.5 | % | |||||||
EBITDA Margin | 7.4 | % | 10.9 | % | |||||||
Vrio | |||||||||||
Operating Contribution | $ | 32 | $ | 148 | |||||||
Additions: | |||||||||||
Depreciation and amortization | 169 | 205 | |||||||||
EBITDA | 201 | 353 | |||||||||
Total Operating Revenues | 1,067 | 1,354 | |||||||||
Operating Income Margin | 3.0 | % | 10.9 | % | |||||||
EBITDA Margin | 18.8 | % | 26.1 | % | |||||||
Mexico | |||||||||||
Operating Contribution | $ | (205 | ) | $ | (259 | ) | |||||
Additions: | |||||||||||
Depreciation and amortization | 131 | 127 | |||||||||
EBITDA | (74 | ) | (132 | ) | |||||||
Total Operating Revenues | 651 | 671 | |||||||||
Operating Income Margin | -31.5 | % | -38.6 | % | |||||||
EBITDA Margin | -11.4 | % | -19.7 | % | |||||||
|
|||||||||||
Segment EBITDA, EBITDA Margin and EBITDA Service Margin | |||||||||||
Dollars in millions | |||||||||||
First Quarter | |||||||||||
2019 | 2018 | ||||||||||
Xandr | |||||||||||
Operating Contribution | $ | 253 | $ | 286 | |||||||
Additions: | |||||||||||
Depreciation and amortization | 13 | 1 | |||||||||
EBITDA | 266 | 287 | |||||||||
Total Operating Revenues | 426 | 337 | |||||||||
Operating Income Margin | 59.4 | % | 84.9 | % | |||||||
EBITDA Margin | 62.4 | % | 85.2 | % | |||||||
Adjusting Items
Adjusting items include revenues and costs we consider non-operational 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, unless earlier remeasurement is required (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 25% for transactions after tax reform.
Adjusting Items | ||||||||||
Dollars in millions | ||||||||||
First Quarter | ||||||||||
2019 | 2018 | |||||||||
Operating Revenues | ||||||||||
Time Warner merger adjustment | $ | 42 | $ | - | ||||||
Adjustments to Operating Revenues | 42 | - | ||||||||
Operating Expenses | ||||||||||
Time Warner and other merger costs | 73 | 67 | ||||||||
Employee separation costs | 248 | 51 | ||||||||
Natural disaster costs | - | 104 | ||||||||
Foreign currency exchange | - | 25 | ||||||||
Adjustments to Operations and Support Expenses | 321 | 247 | ||||||||
Amortization of intangible assets | 1,989 | 1,062 | ||||||||
Adjustments to Operating Expenses | 2,310 | 1,309 | ||||||||
Other | ||||||||||
Merger-related interest and fees1 | - | 393 | ||||||||
Special termination charges, debt redemption costs and other adjustments | 211 | - | ||||||||
Actuarial (gain) loss | 432 | (930 | ) | |||||||
Adjustments to Income Before Income Taxes | 2,995 | 772 | ||||||||
Tax impact of adjustments | 649 | 173 | ||||||||
Tax-related items | 141 | - | ||||||||
Adjustments to Net Income | $ | 2,205 | $ | 599 |
1 Includes interest expense incurred on debt issued, redemption premiums and 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.
Adjusted Operating Income, Adjusted Operating Income Margin, | |||||||||||
Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA Service Margin | |||||||||||
Dollars in millions | |||||||||||
First Quarter | |||||||||||
2019 | 2018 | ||||||||||
Operating Income | $ | 7,233 | $ | 6,201 | |||||||
Adjustments to Operating Revenues | 42 | - | |||||||||
Adjustments to Operating Expenses | 2,310 | 1,309 | |||||||||
Adjusted Operating Income | 9,585 | 7,510 | |||||||||
EBITDA | 14,439 | 12,195 | |||||||||
Adjustments to Operating Revenues | 42 | - | |||||||||
Adjustments to Operations and Support Expenses | 321 | 247 | |||||||||
Adjusted EBITDA | 14,802 | 12,442 | |||||||||
Total Operating Revenues | 44,827 | 38,038 | |||||||||
Adjustments to Operating Revenues | 42 | - | |||||||||
Total Adusted Operating Revenue | 44,869 | 38,038 | |||||||||
Service Revenues | 40,684 | 33,646 | |||||||||
Adjustments to Service Revenues | 42 | - | |||||||||
Adusted Service Revenue | 40,726 | 33,646 | |||||||||
Operating Income Margin | 16.1 | % | 16.3 | % | |||||||
Adjusted Operating Income Margin | 21.4 | % | 19.7 | % | |||||||
Adjusted EBITDA Margin | 33.0 | % | 32.7 | % | |||||||
Adjusted EBITDA Service Margin | 36.3 | % | 37.0 | % | |||||||
Adjusted Diluted EPS | |||||||||||
First Quarter | |||||||||||
2019 | 2018 | ||||||||||
Diluted Earnings Per Share (EPS) | $ | 0.56 | $ | 0.75 | |||||||
Amortization of intangible assets | 0.21 | 0.13 | |||||||||
Merger integration items1 | 0.01 | 0.06 | |||||||||
(Gain) loss on sale of assets, impairments and other adjustments2 |
0.05 | 0.03 | |||||||||
Actuarial (gain) loss3 | 0.05 | (0.12 | ) | ||||||||
Tax-related items | (0.02 | ) | - | ||||||||
Adjusted EPS | $ | 0.86 | $ | 0.85 | |||||||
Year-over-year growth - Adjusted | 1.2 | % | |||||||||
Weighted Average Common Shares Outstanding with Dilution (000,000) | 7,342 | 6,180 | |||||||||
|
1 Includes combined merger integration items and merger-related interest income and expense, and redemption premiums.
2 Includes gains on transactions, natural disaster adjustments and charges, and employee-related and other costs.
3 Includes adjustments for actuarial gains or losses ($432 million loss in the first quarter of 2019) associated with our pension 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 EPS reflects an expected return on plan assets of $816 million (based on an average expected return on plan assets of 7.00% for our pension trust), rather than the actual return on plan assets of $2.8 billion (actual return of 5.8% for the quarter), included in the GAAP measure of income.
Pro Forma 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. Our Net Debt to Pro Forma Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters Pro Forma 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.
Net Debt to Pro Forma Adjusted EBITDA | ||||||||||||||||||||||||
Dollars in millions | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
Jun. 30, | Sep. 30, | Dec. 31, | Mar. 31, | Four Quarters | ||||||||||||||||||||
20181 |
20181 |
20181 |
2019 | |||||||||||||||||||||
Pro Forma Adjusted EBITDA1,2 | $ | 15,119 | $ | 15,872 | $ | 15,029 | $ | 14,802 | $60,822 | |||||||||||||||
Add back severance | (133 | ) | (76 | ) | (327 | ) | - | (536 | ) | |||||||||||||||
Net Debt Pro Forma Adjusted EBITDA | 14,986 | 15,796 | 14,702 | 14,802 | 60,286 | |||||||||||||||||||
End-of-period current debt | 11,538 | |||||||||||||||||||||||
End-of-period long-term debt | 163,942 | |||||||||||||||||||||||
Total End-of-Period Debt | 175,480 | |||||||||||||||||||||||
Less: Cash and Cash Equivalents | 6,516 | |||||||||||||||||||||||
Net Debt Balance | 168,964 | |||||||||||||||||||||||
Annualized Net Debt to Pro Forma Adjusted EBITDA Ratio | 2.80 | |||||||||||||||||||||||
|
1 As reported in AT&T's Form 8-K filed July 24, 2018, October 24, 2018 and January 30, 2019.
2 Includes the purchase accounting reclassification of released content amortization of $491 million pro forma and $98 million reported by AT&T in the second quarter of 2018, $772 million reported in the third quarter of 2018, $545 million reported by AT&T in the fourth quarter of 2018 and $150 million reported by AT&T in the first quarter of 2019.
Supplemental Operational Measures
We provide a supplemental discussion of our business solutions operations that is calculated by combining our Mobility and Business Wireline operating units, and then adjusting to remove non-business operations. The following table presents a reconciliation of our supplemental Business Solutions results.
Supplemental Operational Measure | |||||||||||||||||||||||||||||||||||||
First Quarter | |||||||||||||||||||||||||||||||||||||
March 31, 2019 | March 31, 2018 | ||||||||||||||||||||||||||||||||||||
Mobility |
Business |
Adjustments1 |
Business |
Mobility |
Business |
Adjustments1 |
Business |
||||||||||||||||||||||||||||||
Operating Revenues | |||||||||||||||||||||||||||||||||||||
Wireless service | $ | 13,792 | $ | - | $ | (11,879 | ) | $ | 1,913 | $ | 13,403 | $ | - | $ | (11,612 | ) | $ | 1,791 | |||||||||||||||||||
Strategic and managed services | - | 3,792 | - | 3,792 | - | 3,595 | - | 3,595 | |||||||||||||||||||||||||||||
Legacy voice and data services | - | 2,404 | - | 2,404 | - | 2,865 | - | 2,865 | |||||||||||||||||||||||||||||
Other services and equipment | - | 302 | - | 302 | - | 287 | - | 287 | |||||||||||||||||||||||||||||
Wireless equipment | 3,775 | - | (3,179 | ) | 596 | 3,952 | - | (3,374 | ) | 578 | |||||||||||||||||||||||||||
Total Operating Revenues | 17,567 | 6,498 | (15,058 | ) | 9,007 | 17,355 | 6,747 | (14,986 | ) | 9,116 | |||||||||||||||||||||||||||
Operations and support | 10,181 | 4,040 | (8,581 | ) | 5,640 | 10,102 | 4,016 | (8,524 | ) | 5,594 | |||||||||||||||||||||||||||
EBITDA | 7,386 | 2,458 | (6,477 | ) | 3,367 | 7,253 | 2,731 | (6,462 | ) | 3,522 | |||||||||||||||||||||||||||
Depreciation and amortization | 2,035 | 1,235 | (1,729 | ) | 1,541 | 2,095 | 1,170 | (1,807 | ) | 1,458 | |||||||||||||||||||||||||||
Total Operating Expenses | 12,216 | 5,275 | (10,310 | ) | 7,181 | 12,197 | 5,186 | (10,331 | ) | 7,052 | |||||||||||||||||||||||||||
Operating Income | 5,351 | 1,223 | (4,748 | ) | 1,826 | 5,158 | 1,561 | (4,655 | ) | 2,064 | |||||||||||||||||||||||||||
Equity in net Income of Affiliates | - | - | - | - | - | (1 | ) | - | (1 | ) | |||||||||||||||||||||||||||
Contribution | $ | 5,351 | $ | 1,223 | $ | (4,748 | ) | $ | 1,826 | $ | 5,158 | $ | 1,560 | $ | (4,655 | ) | $ | 2,063 |
1 Non-business wireless reported in the Communication segment under the Mobility business unit.