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Communication Services : Entertainment | Large Cap BlendCompany profile

The Walt Disney Company, formerly TWDC Holdco 613 Corp, is a worldwide entertainment company. The Company operates in four business segments: Media Networks, Parks Experiences and Products, Studio Entertainment, and Direct-To-Consumer and International. The media networks segment includes cable and broadcast television networks, television production and distribution operations, domestic television stations, and radio networks and stations. The Company's Walt Disney Imagineering unit designs and develops new theme park concepts and attractions, as well as resort properties. The studio entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings and live stage plays. The Company also develops and publishes games, primarily for mobile platforms, books, magazines and comic books.

Closing Price
$135.20
Day's Change
1.79 (1.34%)
Bid
--
Ask
--
B/A Size
--
Day's High
135.50
Day's Low
133.83
Volume
(Light)
Volume:
6,353,770

10-day average volume:
11,803,289
6,353,770

AT&T Reports Second-Quarter Results

6:21 am ET July 24, 2019 (BusinessWire) Print

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

AT&T Inc. (NYSE:T) reported solid operating results in the second quarter, including consolidated revenue growth, expanding operating income margin and record operating and free cash flow.

"We're halfway through the year and on track to deliver on all our 2019 priorities," said Randall Stephenson, AT&T chairman and CEO. "We continue to pay down debt and are more confident than ever that we'll meet our yearend deleveraging goal, and we'll take a look at buying back stock. Our FirstNet build is not only running ahead of schedule - it's become a driver of our wireless network leadership in speed, reliability and network performance. It also sets us up to have nationwide commercially available 5G coverage in the first half of 2020.

"On top of all this, our operating teams continue to deliver solid results. Our wireless business grew revenues, profitability and phone customers, both postpaid and prepaid. WarnerMedia delivered another strong quarter with both revenue and operating income growth. And our Entertainment Group profitability continued to stabilize, and even grow. Across the board, it was a solid quarter that puts us in position to have a really strong year."

Second-Quarter Results

Communications Highlights

Mobility: Recognized as the nation's fastest(4), best(5) and most reliable(6) network Service revenues up 2.4%, operating income and EBITDA growth with 355,000 phone net adds 144,000 postpaid smartphone net adds 72,000 postpaid phone net adds 341,000 prepaid net adds of which 283,000 were phones Entertainment Group: 2.6% operating income growth with solid video and broadband ARPU gains 1.1% EBITDA growth as company targets stability Focus on long-term value customer base 21.6 million premium TV subscribers - 778,000 net loss 1.3 million DIRECTV NOW subscribers - 168,000 net loss AT&T TV, company's new thin client video service, expected to begin trials in the third quarter IP broadband revenue growth of 6.5%; 318,000 AT&T Fiber gains Nearly 14 million customer locations passed with fiber

WarnerMedia Highlights

Solid revenue growth and strong operating income growth with gains in all business units Original content drives strong HBO digital subscriber growth HBO Max slated to launch Spring 2020 Strong Warner Bros. operating income growth Continued Turner subscription revenue growth

Consolidated Financial Results

AT&T's consolidated revenues for the second quarter totaled $45.0 billion versus $39.0 billion in the year-ago quarter, up 15.3%, primarily due to the Time Warner acquisition (Deal closed on June 14, 2018). Declines in revenues from legacy wireline services, Vrio, domestic video and wireless equipment were more than offset by the addition of WarnerMedia and growth in domestic wireless services, strategic and managed business services, IP broadband and Xandr. Operating expenses were $37.5 billion versus $32.5 billion in the year-ago quarter, an increase of about $4.9 billion due in part to the Time Warner acquisition, partially offset by cost efficiencies and lower Entertainment Group and wireless equipment costs.

Operating income was $7.5 billion versus $6.5 billion in the year-ago quarter, primarily due to the Time Warner acquisition, with operating income margin of 16.7% versus 16.6%. When adjusting for amortization, merger- and integration-related expenses and other items, operating income was $9.9 billion versus $8.2 billion in the year-ago quarter, and operating income margin was 22.0% versus 21.1% in the year-ago quarter primarily due to the acquisition of Time Warner.

Second-quarter net income attributable to AT&T was $3.7 billion, or $0.51 per diluted share, versus $5.1 billion, or $0.81 per diluted share, in the year-ago quarter. Adjusting for $0.38, which includes merger-amortization costs, a non-cash actuarial loss on benefit plans, merger- and integration-related expenses and other items, earnings per diluted share was $0.89 compared to an adjusted $0.91 in the year-ago quarter.

Cash from operating activities was $14.3 billion, and capital expenditures were $5.5 billion. Capital investment - which consists of capital expenditures plus cash payments for vendor financing - totaled $6.5 billion, which includes about $1.0 billion of cash payments for vendor financing. Free cash flow -- cash from operating activities minus capital expenditures -- was a record $8.8 billion for the quarter.

The Company now expects:

Free cash flow guidance in the $28 billion range(1)

Dividend payout ratio in the 50s% range(1)

(1) Free cash flow is cash from operating activities minus capital expenditures. The increase in guidance reflects higher cash from operations driven by incremental working capital efforts. Free cash flow dividend payout ratio is dividends divided by free cash flow.

Low single-digit adjusted EPS growth(2)

(2)Adjustments include merger-related adjusted amortization costs in the range of $7.5 billion, a non-cash mark-to-market benefit plan gain/loss, merger integration and other adjustments. The mark-to-market adjustment is driven by interest rates and investment returns that are not reasonably estimable and can be a significant item. Accordingly, we cannot provide a reconciliation between forecasted adjusted diluted EPS and reported diluted EPS without unreasonable effort.

Gross capital investment in the $23 billion range(3)

(3)Excludes expected FirstNet reimbursement in the $1 billion range; includes vendor financing

(4)Based on GWS OneScore Sept. 2018 (5)Based on analysis by Ookla(R) of Speedtest Intelligence(R) data average download speeds for Q2 2019 (6)Based on PC Mag June 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 is a leading media and entertainment company that creates and distributes premium and popular content to global audiences through its consumer brands including: HBO, Warner Bros., TNT, TBS, truTV, CNN, DC Entertainment, New Line, Cartoon Network, Adult Swim, Turner Classic Movies and others. 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. (C) 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                                                                                                                                                   
                                                            Second Quarter                                                                          Six-Month Period                                    
                                                               --------------------------------------------------------------------------------                                               --------------------------------------------------------------------------------
                            2019           2018             2019           2018       
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
Net cash provided by operating activities                    $     14,284                      $     10,229                        $     25,336                      $     19,176    
Less: Capital expenditures                      (5,472 )                          (5,108 )                           (10,654 )                         (11,226 )                     
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
Free Cash Flow                                   8,812          5,121           14,682          7,950    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                      
Less: Dividends paid                            (3,722 )                          (3,074 )                            (7,436 )                          (6,144 )                     
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
Free Cash Flow after Dividends                               $      5,090                      $      2,047                        $      7,246                      $      1,806    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
Free Cash Flow Dividend Payout Ratio              42.2 %                            60.0 %                              50.6 %                            77.3 %                     
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------

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                                                                                                                               
                                               Second Quarter                                                                              Six-Month Period
                                                      ------------------------------------------------------------------------                                               ----------------------------------------------------------------------------------------------
                 2019       2018          2019        2018     
-------------------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- --------------------
Capital Expenditures                                $ (5,472 )                                       $ (5,108 )                                         $ (10,654 )                                       $ (11,226 )                     
Cash paid for vendor financing     (1,016 )                         (85 )                         (1,836 )                         (257 )                     
-------------------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- --------------------
Cash paid for Capital Investment                    $ (6,488 )                                       $ (5,193 )                                         $ (12,490 )                                       $ (11,483 )                     
-------------------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- --------------------

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. For market comparability, management analyzes 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                                                                                                                                                                         
                                                                          Second Quarter                                                                                             Six-Month Period
                                                                  ----------------------------------------------------------------------------------------------------                           ----------------------------------------------------------------------------------------------------
                                          2019                              2018                                2019                              2018               
-------------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Net Income                                                      $      3,974                      $      5,248                        $      8,322                      $     10,007    
Additions:                                                                                                  
                                                    1,099          1,532            2,122          2,914    
   Income Tax Expense
                                                    2,149          2,023            4,290          3,794    
   Interest Expense
                                                      (40 )                              16              (33 )                               7    
   Equity in Net (Income) Loss of Affiliates
                                                      318         (2,353 )                                32         (4,055 )                     
   Other (Income) Expense - Net
                                                    7,101          6,378           14,307         12,372    
   Depreciation and amortization
-------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                             14,601         12,844           29,040         25,039    
-------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                         
Total Operating Revenues                           44,957         38,986           89,784         77,024    
Service Revenues                                   41,023         34,906           81,707         68,552    
                                                                                         
EBITDA Margin                                        32.5 %                            32.9 %                              32.3 %                            32.5 %                     
EBITDA Service Margin                                        35.6       35.6 %                                    36.8       36.8 %                                    35.5                 35.5       35.5 %                                    36.5       36.5 %
-------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- --------------------
                                                                                                                Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in millions                                                                                                                                                                                     
                                                            Second Quarter                                                                          Six-Month Period                                    
                                                               --------------------------------------------------------------------------------                                               --------------------------------------------------------------------------------
                                       2019                              2018                                2019                              2018               
----------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Communications Segment                                                                                   
----------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Operating Contribution                                       $      8,737                      $      8,414                        $     16,789                      $     16,441    
Additions:                                                                                               
Equity in Net (Income) Loss of Affiliates            -              -                -              2    
Depreciation and amortization                    4,620          4,638            9,213          9,213    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                          13,357         13,052           26,002         25,656    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                      
Total Operating Revenues                        35,508         35,410           70,901         70,943    
                                                                                      
Operating Income Margin                           24.6 %                            23.8 %                              23.7 %                            23.2 %                     
EBITDA Margin                                     37.6 %                            36.9 %                              36.7 %                            36.2 %                     
                                                                                      
----------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Mobility
Operating Contribution                                       $      5,833                      $      5,506                        $     11,184                      $     10,664    
Additions:                                                                                               
Depreciation and amortization                    2,025          2,113            4,060          4,208    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                           7,858          7,619           15,244         14,872    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                      
Total Operating Revenues                        17,512         17,282           35,079         34,637    
Service Revenues                                14,006         13,682           27,798         27,085    
                                                                                      
Operating Income Margin                           33.3 %                            31.9 %                              31.9 %                            30.8 %                     
EBITDA Margin                                     44.9 %                            44.1 %                              43.5 %                            42.9 %                     
EBITDA Service Margin                             56.1 %                            55.7 %                              54.8 %                            54.9 %                     
                                                                                      
----------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Entertainment Group
Operating Contribution                                       $      1,514                      $      1,475                        $      2,992                      $      2,784    
Additions:                                                                                               
Equity in Net (Income) Loss of Affiliates            -              1                -              2    
Depreciation and amortization                    1,339          1,345            2,662          2,655    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                           2,853          2,821            5,654          5,441    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                      
Total Operating Revenues                        11,368         11,478           22,696         22,909    
                                                                                      
Operating Income Margin                           13.3 %                            12.9 %                              13.2 %                            12.2 %                     
EBITDA Margin                                     25.1 %                            24.6 %                              24.9 %                            23.8 %                     
                                                                                      
----------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Business Wireline
Operating Contribution                                       $      1,390                      $      1,433                        $      2,613                      $      2,993    
Additions:                                                                                               
Equity in Net (Income) Loss of Affiliates            -             (1 )                                 -              -    
Depreciation and amortization                    1,256          1,180            2,491          2,350    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                           2,646          2,612            5,104          5,343    
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                      
Total Operating Revenues                         6,628          6,650           13,126         13,397    
                                                                                      
Operating Income Margin                           21.0 %                            21.5 %                              19.9 %                            22.3 %                     
EBITDA Margin                                             39.9       39.9 %                                    39.3       39.3 %                                    38.9                 38.9       38.9 %                                    39.9       39.9 %
----------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- --------------------
                                                                                                             Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in millions                                                                                                                                                                                
                                                       Second Quarter                                                                          Six-Month Period                                    
                                                          --------------------------------------------------------------------------------                                               --------------------------------------------------------------------------------
                                  2019                              2018                                2019                              2018               
------------------------------------ -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
WarnerMedia Segment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Contribution                                  $      2,025                      $        425                        $      4,335                      $        464    
Additions:                                                                                          
Equity in Net (Income) of Affiliates          (55 )                              26             (122 )                              16    
Depreciation and amortization                  91             31              234             32    
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                      2,061            482            4,447            512    
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                 
Total Operating Revenues                    8,350          1,393           16,729          1,505    
                                                                                 
Operating Income Margin                      23.6 %                            32.4 %                              25.2 %                            31.9 %                     
EBITDA Margin                                24.7 %                            34.6 %                              26.6 %                            34.0 %                     
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                                             Segment and Business Unit EBITDA, EBITDA Margin and EBITDA Service Margin
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in millions                                                                                                                                                                                
                                                       Second Quarter                                                                          Six-Month Period                                    
                                                          --------------------------------------------------------------------------------                                               --------------------------------------------------------------------------------
                                  2019                              2018                                2019                              2018               
------------------------------------ -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Latin America Segment                                                                               
------------------------------------ -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Operating Contribution                                  $       (209 )                                       $       (150 )                                         $       (382 )                                       $       (261 )                     
Additions:                                                                                          
Equity in Net (Income) of Affiliates          (12 )                             (15 )                               (12 )                             (15 )                     
Depreciation and amortization                 284            313              584            645    
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                         63            148              190            369    
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                 
Total Operating Revenues                    1,757          1,951            3,475          3,976    
                                                                                 
Operating Income Margin                     -12.6 %                            -8.5 %                             -11.3 %                            -6.9 %                     
EBITDA Margin                                 3.6 %                             7.6 %                               5.5 %                             9.3 %                     
                                                                                 
------------------------------------ -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Vrio                                                                                                
Operating Contribution                                  $         (2 )                                       $         67                        $         30                      $        215    
Additions:                                                                                          
Equity in Net (Income) of Affiliates          (12 )                             (15 )                               (12 )                             (15 )                     
Depreciation and amortization                 165            186              334            391    
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                        151            238              352            591    
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                 
Total Operating Revenues                    1,032          1,254            2,099          2,608    
                                                                                 
Operating Income Margin                      -1.4 %                             4.1 %                               0.9 %                             7.7 %                     
EBITDA Margin                                14.6 %                            19.0 %                              16.8 %                            22.7 %                     
                                                                                 
------------------------------------ -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Mexico                                                                                              
Operating Contribution                                  $       (207 )                                       $       (217 )                                         $       (412 )                                       $       (476 )                     
Additions:                                                                                          
Depreciation and amortization                 119            127              250            254    
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                        (88 )                             (90 )                              (162 )                            (222 )                     
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                 
Total Operating Revenues                      725            697            1,376          1,368    
                                                                                 
Operating Income Margin                     -28.6 %                           -31.1 %                             -29.9 %                           -34.8 %                     
EBITDA Margin                                       -12.1      -12.1 %                                   -12.9      -12.9 %                                   -11.8                -11.8      -11.8 %                                   -16.2      -16.2 %
------------------------------------ -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- --------------------
                                                                                                                   Segment EBITDA, EBITDA Margin and EBITDA Service Margin
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in millions                                                                                                                                                                         
                                                Second Quarter                                                                          Six-Month Period                                    
                                                   --------------------------------------------------------------------------------                                               --------------------------------------------------------------------------------
                           2019                              2018                                2019                              2018               
----------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Xandr                                                                                        
----------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Operating Contribution                           $        325                      $        333                        $        578                      $        619    
Additions:                                                                                   
Depreciation and amortization           13              -               26              1    
----------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
EBITDA                                 338            333              604            620    
----------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                          
Total Operating Revenues               485            392              911            729    
                                                                          
Operating Income Margin               67.0 %                            84.9 %                              63.4 %                            84.9 %                     
EBITDA Margin                         69.7 %                            84.9 %                              66.3 %                            85.0 %                     
----------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                          

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 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, in these cases we use the actual tax expense or combined marginal rate of approximately 25%.

                                                                                                                                                     Adjusting Items
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in millions                                                                                                                                                                                                 
                                                                                                          Second Quarter                                                                                    Six-Month Period
                                                                                                 ------------------------------------------------------------------------------------------------------                           ----------------------------------------------------------------------------------
                                                                         2019                               2018                                 2019                               2018
--------------------------------------------------------------------------- -------------------- -------------------------------  -------------------- -------------------------------  -------------------- -------------------- -------------------------------  -------------------- -------------------------------
Operating Revenues                                                                                                                           
                                                                                               $          30                      $           -                        $          72                      $           -  
   Time Warner merger adjustment
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
                                                                                       30               -                72               -  
   Adjustments to Operating Revenues
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
Operating Expenses                                                                                                                           
                                                                                      316             339               389             431  
   Time Warner and other merger costs
                                                                                       94             133               342             184  
   Employee separation costs
                                                                                        -               -                 -             104  
   Natural disaster costs
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
Adjustments to Operations and Support Expenses                                        410             472               731             719  
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
                                                                                    1,959           1,278             3,948           2,340  
   Amortization of intangible assets
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
Adjustments to Operating Expenses                                                   2,369           1,750             4,679           3,059  
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
Other                                                                                                                                        
                                                                                        -             636                 -           1,029  
   Merger-related interest and fees(1)
                                                                                     (638 )                                -              (638 )                                -  
   (Gains) losses on sale of investments
                                                                                      140              48               351              48  
   Special termination charges, debt redemption costs and other adjustments
                                                                                    1,699          (1,796 )                              2,131          (2,726 )
   Actuarial (gain) loss
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
Adjustments to Income Before Income Taxes                                           3,600             638             6,595           1,410  
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
                                                                                      779              44             1,428             217  
   Tax impact of adjustments
                                                                                        -             (96 )                                141             (96 )
   Tax-related items
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
Adjustments to Net Income                                                                      $       2,821                      $         690                        $       5,026                      $       1,289  
--------------------------------------------------------------------------- -------------------- ----------- -------------------- -------------------- ----------- -------------------- -------------------- -------------------- ----------- -------------------- -------------------- ----------- --------------------
(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                                                                                                                                                                                                             
                                                                            Second Quarter                                                                                  Six-Month Period                                    
                                                                    ----------------------------------------------------------------------------------------------------                           --------------------------------------------------------------------------------
                                            2019                              2018                                2019                              2018               
---------------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
Operating Income                                                  $      7,500                      $      6,466                        $     14,733                      $     12,667    
Adjustments to Operating Revenues                        30              -               72              -    
Adjustments to Operating Expenses                     2,369          1,750            4,679          3,059    
---------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
Adjusted Operating Income                             9,899          8,216           19,484         15,726    
---------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                           
---------------------------------------------- -------------------- ------------------------------  -------------------- ------------------------------  -------------------- -------------------- ------------------------------  -------------------- ------------------------------  --------------------
EBITDA                                               14,601         12,844           29,040         25,039    
Adjustments to Operating Revenues                        30              -               72              -    
Adjustments to Operations and Support Expenses          410            472              731            719    
---------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
Adjusted EBITDA                                      15,041         13,316           29,843         25,758    
---------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                           
Total Operating Revenues                             44,957         38,986           89,784         77,024    
Adjustments to Operating Revenues                        30              -               72              -    
---------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
Total Adjusted Operating Revenue                     44,987         38,986           89,856         77,024    
---------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
Service Revenues                                     41,023         34,906           81,707         68,552    
Adjustments to Service Revenues                          30              -               72              -    
---------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
Adjusted Service Revenue                             41,053         34,906           81,779         68,552    
---------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                           
                                                                                           
Operating Income Margin                                16.7 %                            16.6 %                              16.4 %                            16.4 %                     
Adjusted Operating Income Margin                       22.0 %                            21.1 %                              21.7 %                            20.4 %                     
Adjusted EBITDA Margin                                 33.4 %                            34.2 %                              33.2 %                            33.4 %                     
Adjusted EBITDA Service Margin                         36.6 %                            38.1 %                              36.5 %                            37.6 %                     
---------------------------------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- --------------------
                                                                                                                                                                                                                                     Adjusted Diluted EPS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                             Second Quarter                                                                                                                                                                                                                                                 Six-Month Period                                                                                                  
                                                                                                                 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                         -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   2019                                                                                                       2018                                                                                                                              2019                                                                                                       2018                                                    
---------------------------------------------------------------------- ----------------------------------------- ----------------------------------------------------------------------------------  ----------------------------------------- ----------------------------------------------------------------------------------  ----------------------------------------- ----------------------------------------- ----------------------------------------------------------------------------------  ----------------------------------------- ----------------------------------------------------------------------------------  -----------------------------------------
Diluted Earnings Per Share (EPS)                                                                               $                                      0.51                                                                $                                      0.81                                                                                       $                                      1.06                                                                $                                      1.56                                    
                                                                                                                                   0.21                                                                                    0.16                                                                                                           0.42                                                                                    0.29                                    
   Amortization of intangible assets
                                                                                                                                   0.05                                                                                    0.14                                                                                                           0.07                                                                                    0.20                                    
   Merger integration items(1)
                                                                                                                                  (0.06 )                                                                                                     0.01                                                                                                          (0.01 )                                                                                                     0.05                                    
   (Gain) loss on sale of assets, impairments and other adjustments(2)
                                                                                                                                   0.18                                                                                   (0.21 )                                                                                                                            0.23                                                                                   (0.33 )                                                     
   Actuarial (gain) loss(3)
                                                                                                                                      -                                                                                       -                                                                                                          (0.02 )                                                                                                        -                                    
   Tax-related items
---------------------------------------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Adjusted EPS                                                                                                   $                                      0.89                                                                $                                      0.91                                                                                       $                                      1.75                                                                $                                      1.77                                    
---------------------------------------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Year-over-year growth - Adjusted                                                                                                   -2.2 %                                                                                                                                                                                                                    -1.1 %                                                                                                                                             
---------------------------------------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------------------------------------------------  ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------------------------------------------------  -----------------------------------------
Weighted Average Common Shares Outstanding with Dilution (000,000)                                                                7,353                                                                                   6,374                                                                                                          7,347                                                                                   6,277                                    
---------------------------------------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
(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 (losses of $1.7 billion in the second quarter and $2.1 billion for the first six months of 2019) associated with our pension benefit plan. As a result, adjusted EPS reflects an expected return on plan assets of $880 million in the second quarter and $1,731 million for the first six months (based on an expected return on plan assets of 7.00%), rather than the actual return of $1.4 billion in the quarter and $3.4 billion for the first six months (actual return of 4.2% for the quarter and 10.0% for the first six months), included in the GAAP measure of income.

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 Adjusted EBITDA ratio is calculated by dividing the Net Debt by the sum of the most recent four quarters 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 Adjusted EBITDA
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dollars in millions                                                                                                                                                                          
                                                                                                     Three Months Ended                                                                                                            
                                                        --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Sep. 30,                                  Dec. 31,                        Mar. 31,               June 30,                           Four                   
                                                                         2018(1)                                                      2018(1)                                            2019(1)                                    2019                                              Quarters
---------------------------------- -------------------- --------------------------------------  -------------------- --------------------------------------  -------------------- -------------------- -------------------- -------------------- -------------------- --------------------------------------  --------------------
Adjusted EBITDA(1,2)                                  $             15,872                      $             15,029                      $               14,802                    $               15,041                    $             60,744    
                                                    (76 )                                    (327 )                                         -                      -                 (403 )                     
   Add back severance
Net Debt Adjusted EBITDA                         15,796                 14,702                   14,802                 15,041               60,341    
                                                                                                       12,625    
   End-of-period current debt
                                                                                                      157,937    
   End-of-period long-term debt
Total End-of-Period Debt                                                                              170,562    
                                                                                                        8,423    
   Less: Cash and Cash Equivalents
Net Debt Balance                                                                                      162,139    
---------------------------------- -------------------- --------------------------------------  -------------------- --------------------------------------  -------------------- -------------------- -------------------- -------------------- -------------------- ------------------ -------------------- --------------------
Annualized Net Debt to Adjusted EBITDA Ratio                                                                                                                                         2.69    
------------------------------------------------------------------------------------------------------------------------------------------------------       -------------------- -------------------- -------------------- -------------------- -------------------- ------------------ -------------------- --------------------
(1)As reported in AT&T's Form 8-K filed October 24, 2018, January 30, 2019 and April 24, 2019.
(2) Includes the purchase accounting reclassification of released content amortization of $772 million in the third quarter of 2018, $545 million in the fourth quarter of 2018, $150 million and $112 million reported by AT&T in the first and second quarters of 2019, respectively.

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
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                         Second Quarter
                                   -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                June 30, 2019                                                                                  June 30, 2018
                                   -------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------                              -------------------- --------------------------------------------------------------------------------------------------------------------------------------------------------------
                        Mobility               Business                  Adjustments(1)                 Business                                       Mobility               Business                  Adjustments(1)                 Business
                                                                                                        Wireline                                                                                       Solutions                                                                                                                      Wireline                                                                                       Solutions
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------  -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ------------------------------  -------------------- -------------------
Operating Revenues                                                                                              
                                                      $               14,006                    $                    -                    $    (11,984 )                                       $                2,022                                            $               13,682                    $                    -                    $    (11,853 )                                       $                1,829
   Wireless service
                                                        -                  3,848            -                    3,848                                              -                  3,603            -                    3,603
   Strategic and managed services
                                                        -                  2,331            -                    2,331                                              -                  2,730            -                    2,730
   Legacy voice and data services
                                                        -                    449            -                      449                                              -                    317            -                      317
   Other services and equipment
                                                    3,506                      -       (2,884 )                                       622                                          3,600                      -       (3,016 )                                       584
   Wireless equipment
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
Total Operating Revenues                           17,512                  6,628      (14,868 )                                     9,272                                         17,282                  6,650      (14,869 )                                     9,063
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
                                                                                             
Operating Expenses                                                                                              
                                                    9,654                  3,982       (8,097 )                                     5,539                                          9,663                  4,038       (8,085 )                                     5,616
   Operations and support
EBITDA                                              7,858                  2,646       (6,771 )                                     3,733                                          7,619                  2,612       (6,784 )                                     3,447
                                                    2,025                  1,256       (1,720 )                                     1,561                                          2,113                  1,180       (1,806 )                                     1,487
   Depreciation and amortization
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
Total Operating Expenses                           11,679                  5,238       (9,817 )                                     7,100                                         11,776                  5,218       (9,891 )                                     7,103
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
Operating Income                                    5,833                  1,390       (5,051 )                                     2,172                                          5,506                  1,432       (4,978 )                                     1,960
Equity in net Income of Affiliates                      -                      -            -                        -                                              -                      1            -                        1
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
Operating Contribution                                $                5,833                    $                1,390                    $     (5,051 )                                       $                2,172                                            $                5,506                    $                1,433                    $     (4,978 )                                       $                1,961
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ------------------------------  ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
(1)Non-business wireless reported in the Communication segment under the Mobility business unit.
                                                                                             
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------  -------------------- -------------------- ------------------------------  ------------------------------  -------------------  -------------------- -------------------- -------------------- ------------------------------  -------------------- -------------------
                                                                                                                                                                                                          Supplemental Operational Measure
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                        Six-Month Period
                                   -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                June 30, 2019                                                                                                                                                                June 30, 2018
                                   -------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------                              -------------------- --------------------------------------------------------------------------------------------------------------------------------------------------------------
                        Mobility               Business                  Adjustments(1)                 Business                                       Mobility               Business                  Adjustments(1)                 Business
                                                                                                        Wireline                                                                                       Solutions                                                                                                                      Wireline                                                                                       Solutions
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------  -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ------------------------------  -------------------- -------------------
Operating Revenues                                                                                              
                                                      $               27,798                    $                    -                    $    (23,863 )                                       $                3,935                                            $               27,085                    $                    -                    $    (23,465 )                                       $                3,620
   Wireless service
                                                        -                  7,640            -                    7,640                                              -                  7,198            -                    7,198
   Strategic and managed services
                                                        -                  4,735            -                    4,735                                              -                  5,595            -                    5,595
   Legacy voice and data services
                                                        -                    751            -                      751                                              -                    604            -                      604
   Other services and equipment
                                                    7,281                      -       (6,063 )                                     1,218                                          7,552                      -       (6,390 )                                     1,162
   Wireless equipment
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
Total Operating Revenues                           35,079                 13,126      (29,926 )                                    18,279                                         34,637                 13,397      (29,855 )                                    18,179
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
                                                                                             
Operating Expenses                                                                                              
                                                   19,835                  8,022      (16,678 )                                    11,179                                         19,765                  8,054      (16,609 )                                    11,210
   Operations and support
EBITDA                                             15,244                  5,104      (13,248 )                                     7,100                                         14,872                  5,343      (13,246 )                                     6,969
                                                    4,060                  2,491       (3,449 )                                     3,102                                          4,208                  2,350       (3,613 )                                     2,945
   Depreciation and amortization
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
Total Operating Expenses                           23,895                 10,513      (20,127 )                                    14,281                                         23,973                 10,404      (20,222 )                                    14,155
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
Operating Income                                   11,184                  2,613       (9,799 )                                     3,998                                         10,664                  2,993       (9,633 )                                     4,024
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
Equity in net Income of Affiliates                      -                      -            -                        -                                              -                      -            -                        -
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- --------------------                                 ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
Operating Contribution                                $               11,184                    $                2,613                    $     (9,799 )                                       $                3,998                                            $               10,664                    $                2,993                    $     (9,633 )                                       $                4,024
---------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ------------------------------  ------------------------------  -------------------  -------------------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------
(1)Non-business wireless reported in the Communication segment under the Mobility business unit.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190724005401/en/

SOURCE: AT&T Inc.

Erin McGrath
AT&T Inc.
Phone: (214) 862-0651
Email: erin.mcgrath@att.com

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