T 0000732717-20-000005 8-K as filed: Jan 29, 2020

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) January 29, 2020

AT&T INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-08610	43-1301883
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

208 S. Akard St., Dallas, Texas	75202
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (210) 821-4105

__________________________________

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act

		Name of each exchange
Title of each class	Trading Symbol(s)	on which registered
Common Shares (Par Value $1.00 Per Share)	T	New York Stock Exchange
Depositary Shares, each representing a 1/1000th interest in a share of 5.000% Perpetual Preferred Stock, Series A	TPRA	New York Stock Exchange
AT&T Inc. Floating Rate Global Notes due August 3, 2020	T 20C	New York Stock Exchange
AT&T Inc. 1.875% Global Notes due December 4, 2020	T 20	New York Stock Exchange
AT&T Inc. 2.650% Global Notes due December 17, 2021	T 21B	New York Stock Exchange
AT&T Inc. 1.450% Global Notes due June 1, 2022	T 22B	New York Stock Exchange
AT&T Inc. 2.500% Global Notes due March 15, 2023	T 23	New York Stock Exchange
AT&T Inc. 2.750% Global Notes due May 19, 2023	T 23C	New York Stock Exchange
AT&T Inc. Floating Rate Global Notes due September 5, 2023	T 23D	New York Stock Exchange

		Name of each exchange
Title of each class	Trading Symbol(s)	on which registered
AT&T Inc. 1.050% Global Notes due September 5, 2023	T 23E	New York Stock Exchange
AT&T Inc. 1.300% Global Notes due September 5, 2023	T 23A	New York Stock Exchange
AT&T Inc. 1.950% Global Notes due September 15, 2023	T 23F	New York Stock Exchange
AT&T Inc. 2.400% Global Notes due March 15, 2024	T 24A	New York Stock Exchange
AT&T Inc. 3.500% Global Notes due December 17, 2025	T 25	New York Stock Exchange
AT&T Inc. 0.250% Global Notes due March 4, 2026	T 26E	New York Stock Exchange
AT&T Inc. 1.800% Global Notes due September 5, 2026	T 26D	New York Stock Exchange
AT&T Inc. 2.900% Global Notes due December 4, 2026	T 26A	New York Stock Exchange
AT&T Inc. 2.350% Global Notes due September 5, 2029	T 29D	New York Stock Exchange
AT&T Inc. 4.375% Global Notes due September 14, 2029	T 29B	New York Stock Exchange
AT&T Inc. 2.600% Global Notes due December 17, 2029	T 29A	New York Stock Exchange
AT&T Inc. 0.800% Global Notes due March 4, 2030	T 30B	New York Stock Exchange
AT&T Inc. 3.550% Global Notes due December 17, 2032	T 32	New York Stock Exchange
AT&T Inc. 5.200% Global Notes due November 18, 2033	T 33	New York Stock Exchange
AT&T Inc. 3.375% Global Notes due March 15, 2034	T 34	New York Stock Exchange
AT&T Inc. 2.450% Global Notes due March 15, 2035	T 35	New York Stock Exchange
AT&T Inc. 3.150% Global Notes due September 4, 2036	T 36A	New York Stock Exchange
AT&T Inc. 1.800% Global Notes due September 14, 2039	T 39B	New York Stock Exchange
AT&T Inc. 7.000% Global Notes due April 30, 2040	T 40	New York Stock Exchange
AT&T Inc. 4.250% Global Notes due June 1, 2043	T 43	New York Stock Exchange
AT&T Inc. 4.875% Global Notes due June 1, 2044	T 44	New York Stock Exchange
AT&T Inc. 4.250% Global Notes due March 1, 2050	T 50	New York Stock Exchange
AT&T Inc. 5.350% Global Notes due November 1, 2066	TBB	New York Stock Exchange
AT&T Inc. 5.625% Global Notes due August 1, 2067	TBC	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 8.01 Other Events.

Throughout this document, AT&T Inc. is referred to as “we” or “AT&T.” AT&T is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications, media and technology industries.

Overview

We announced on January 29, 2020 that fourth-quarter 2019 net income attributable to common stock totaled $2.4 billion, or $0.33 per diluted share attributable to common stock (referred to as “diluted shares”). Fourth-quarter 2019 income per diluted share included amounts totaling to $(4.1) billion, or $(0.56) per share, resulting from the following significant items: $(0.19) per share for the amortization of merger-related intangible assets, $(0.13) per share for the abandonment of certain copper assets, $(0.12) per share for noncash losses for the annual adjustment related to pension and postemployment benefit accounting, and a combined $(0.12) per share for tax-related items, merger and integration costs and other items. The results compare with a reported net income attributable to common stock of $4.9 billion, or $0.66 per diluted share, in the fourth quarter of 2018. For the full year 2019, net income attributable to common stock was $13.9 billion versus $19.4 billion in 2018; earnings per diluted share were $1.89 compared with $2.85 for 2018. Results for full-year 2019 also reflect a full year’s worth of Time Warner Inc. (Time Warner), which was acquired in June 2018.

Fourth-quarter 2019 revenues were $46.8 billion, down 2.4 percent from the fourth quarter of 2018, and full-year 2019 revenues were $181.2 billion, up 6.1 percent from the previous full year. Fourth-quarter revenues declined primarily due to pressure in video subscriptions, continued decreases in legacy voice and data services, foregone television licensing revenues as we prepare for our launch of HBO Max in 2020, lower theatrical product resulting from a more favorable mix of box office releases in the prior year and lower wireless equipment sales. Partially offsetting these declines were growth in wireless service revenues and strategic and managed business services. Full-year revenue increases resulted primarily from the mid-2018 acquisition of Time Warner.

Compared with results for the fourth quarter of 2018, current quarter operating expenses were $41.5 billion, down 0.8 percent, and full-year 2019 operating expenses were $153.2 billion, up 5.9 percent from the previous full year; fourth-quarter operating income was $5.3 billion compared to $6.2 billion in the comparable 2018 period, and full-year 2019 operating income was $28.0 billion, up 7.1 percent from the full-year 2018; and AT&T’s fourth-quarter operating income margin was 11.4 percent, compared to 12.8 percent, and full-year 2019 operating income margin was 15.4 percent compared to 15.3 percent.

For the full year, cash from operating activities was $48.7 billion, up $5.1 billion when compared to 2018, driven by contributions from WarnerMedia and higher cash flows from working capital initiatives, including sales of receivables, partly offset by higher spend on film and television production and net tax payments in 2019 compared to net tax refunds in 2018. Capital expenditures in 2019 were $19.6 billion, and when including $3.1 billion cash paid for vendor financing and excluding $1.0 billion of FirstNet reimbursements, gross capital investment was $23.7 billion.

Segment Summary

We analyze our segments based on, among other things, segment contribution, which consists of operating income, excluding acquisition-related costs and other significant items, and equity in net income (loss) of affiliates for investments managed within each segment. Our reportable segments are: Communications, WarnerMedia, Latin America and Xandr.

Communications

Our Communications segment consists of our Mobility, Entertainment Group and Business Wireline business units. Historical results in the Mobility and Business Wireline business units of the Communications segment have been recast to remove operations in Puerto Rico and the U.S. Virgin Islands, for which we began held-for-sale accounting in the third quarter of 2019.

Fourth-quarter 2019 operating revenues were $36.5 billion, down 1.9 percent versus fourth-quarter 2018, with segment operating contribution of $7.5 billion, down 1.3 percent versus the year-ago quarter. The Communications segment operating income margin was 20.6 percent, compared to 20.4 percent in the year-earlier quarter.

Mobility

Mobility revenues for the fourth quarter of 2019 were $18.7 billion, up 0.8 percent versus the fourth quarter of 2018, driven by higher service revenues resulting from prepaid subscriber gains and postpaid phone average revenue per subscriber (ARPU) growth and partially offset by decreased equipment revenues as lower handset upgrade rates continue. Mobility operating expenses totaled $13.2 billion, up 0.5 percent versus the fourth quarter of 2018. The increase was driven by higher bad debt expense, promotional costs and handset insurance expenses, partially offset by slower postpaid upgrade rates and cost efficiencies. Mobility’s operating income margin was 29.4 percent compared to 29.2 percent in the year-ago quarter.

In our Mobility business unit, during the fourth quarter of 2019, we reported a net gain of 3.6 million wireless subscribers. At December 31, 2019, wireless subscribers totaled 165.9 million (including more than 1.0 million FirstNet connections) compared to 151.9 million at December 31, 2018.

During the fourth quarter, total phone net adds were 209,000, with total net adds by subscriber category as follows:

•	Prepaid subscriber net adds were 8,000, with phone net adds a loss of 20,000.

•	Postpaid subscriber net adds were 135,000, with phone net adds of 229,000 offsetting losses from tablets.

•	Reseller net losses were 251,000.

•	Connected device net adds were 3.7 million, 2.3 million of which were primarily attributable to wholesale connected cars.

For the quarter ended December 31, 2019, postpaid phone-only ARPU increased 0.4 percent versus the year-earlier quarter.

Postpaid phone-only churn was 1.07 percent, compared to 1.00 percent in the fourth quarter of 2018. Total postpaid churn was 1.29 percent, compared to 1.23 percent in the year-ago quarter.

Entertainment Group

Entertainment Group (Entertainment) revenues for the fourth quarter of 2019 were $11.2 billion, down 6.1 percent versus the year-ago quarter, reflecting continuing declines in video subscribers and legacy services that were partially offset by higher broadband revenues. Entertainment operating expenses totaled $10.5 billion, down 5.8 percent versus the fourth quarter of 2018. The decrease was largely driven by lower content costs from fewer subscribers and ongoing cost initiatives, partially offset by higher amortization of fulfillment cost deferrals and higher costs associated with NFL SUNDAY TICKET. The Entertainment operating income margin was 6.6 percent compared to 6.9 percent in the year-earlier quarter.

At December 31, 2019, Entertainment revenue connections included:

•

Approximately 20.4 million video connections (including 926,000 AT&T TV Now subscribers) at December 31, 2019 compared to 24.5 million at December 31, 2018. During the fourth quarter of 2019, premium TV video subscribers had a net loss of 945,000 and AT&T TV Now subscribers had a net loss of 219,000.

•	Approximately 14.1 million broadband connections at December 31, 2019 compared to 14.4 million at December 31, 2018. During the fourth quarter, IP broadband subscribers had a net loss of 141,000 (including fiber broadband net adds of 191,000), with 13.6 million subscribers at December 31, 2019.

Business Wireline

Business Wireline (Business) revenues for the fourth quarter of 2019 were $6.6 billion, down 1.7 percent versus the year-ago quarter, reflecting continued declines in legacy revenues, partially offset by growth in strategic and managed services. Business operating expenses totaled $5.3 billion, down 0.4 percent versus the fourth quarter of 2018, driven by lower technology expenses and cost initiatives. Business operating income margin was 19.2 percent compared to 20.2 percent in the year-earlier quarter.

At December 31, 2019, our total switched access lines (Entertainment and Business) were 8.5 million compared to 10.0 million at December 31, 2018. The number of U-verse voice connections (which use VoIP technology and therefore are not included in the access line total) decreased by 170,000 in the quarter, totaling 4.4 million at December 31, 2019, compared to 5.1 million at December 31, 2018.

WarnerMedia

Our WarnerMedia segment consists of our Turner, HBO and Warner Bros. business units. Fourth-quarter 2019 operating revenues were $8.9 billion, down 3.3 percent versus fourth-quarter 2018, with segment operating contribution of $2.4 billion, down 9.5 percent versus the year-ago quarter. Both operating revenue and segment contribution declines were driven by foregone television licensing revenues as we prepare for our launch of HBO Max in 2020. The WarnerMedia segment operating income margin was 27.1 percent, compared to 28.4 percent in the year-earlier quarter.

Turner

Turner revenues for the fourth quarter of 2019 were $3.3 billion, up 1.6 percent versus the fourth quarter of 2018, driven by higher subscription revenues due to higher domestic affiliate rates and growth at Turner’s international networks, partially offset by lower advertising revenues resulting from lower audience delivery in the domestic entertainment networks. Turner operating expenses totaled $2.0 billion, up 3.9 percent versus the fourth quarter of 2018, driven by higher programming expenses that were partially offset by lower operating costs. Turner operating income margin was 38.8 percent compared to 40.2 percent in the year-earlier quarter.

HBO

HBO revenues for the fourth quarter of 2019 were $1.7 billion, up 1.9 percent versus the fourth quarter of 2018, driven by higher content and other revenues resulting from higher digital programming. HBO operating expenses totaled $1.2 billion, up 16.4 percent versus the fourth quarter of 2018, driven by increased programming, distribution and marketing expenses. HBO operating income margin was 28.2 percent compared to 37.2 percent in the year-earlier quarter.

Warner Bros.

Warner Bros. revenues for the fourth quarter of 2019 were $4.1 billion, down 8.0 percent versus the fourth quarter of 2018, driven by foregone television licensing revenues as we prepare for our launch of HBO Max and lower theatrical product resulting from a more favorable mix of box office releases in the prior comparable period and, partly offset by increased initial telecast revenues. Warner Bros. operating expenses totaled $3.3 billion, down 9.6 percent versus the fourth quarter of 2018, driven by lower film and television production costs. Warner Bros. operating income margin was 19.5 percent compared to 18.1 percent in the year-earlier quarter.

Latin America

Our Latin America segment consists of our Mexico and Vrio business units and is subject to foreign currency fluctuations. Fourth-quarter 2019 operating revenues were $1.8 billion, down 4.6 percent versus the prior year. Segment operating contribution was $(87) million, versus $(248) million in the comparable 2018 period. Both operating revenue and segment contribution declines were driven by foreign exchange pressures. The Latin America operating income margin was (5.1) percent, compared to (14.0) percent in the year-earlier quarter.

Mexico

Wireless revenues were $776 million, up 0.9 percent when compared to the fourth quarter of 2018. Increased revenues were primarily due to increased service revenue from prepaid subscriber growth, partially offset by lower equipment sales. Operating expenses were $903 million, down 16.6 percent and Mexico’s operating income margin was (16.4) percent, compared to (40.8) percent in the year-earlier quarter.

We had approximately 19.2 million Mexican wireless subscribers at December 31, 2019 compared to 18.3 million at December 31, 2018. During the fourth quarter of 2019, we had prepaid net adds of 736,000 and postpaid net losses of 249,000.

Vrio

Video service revenues were $982 million, down 8.6 percent versus the prior year. Operating expenses were $944 million, down 7.3 percent. Both operating revenue and expense declines were driven by foreign exchange pressures. Vrio’s operating income margin was 3.9 percent, compared to 5.2 percent in the year-earlier quarter.

We had approximately 13.3 million Latin America video connections at December 31, 2019 compared to 13.8 million at December 31, 2018. During the fourth quarter of 2019, video net adds were 25,000.

Xandr

Our Xandr segment provides advertising services utilizing data insights to develop higher-value targeted advertising. Certain revenues in this segment are also reported by the Communications segment and are eliminated upon consolidation. Fourth-quarter 2019 operating revenues were $607 million, up 7.2 percent versus the prior year. Operating expenses were $194 million, up 4.9 percent due to investment in new technology and the development of our data advertising platform. Xandr segment operating contribution was $413 million, up 8.4 percent versus fourth-quarter 2018. The Xandr segment operating income margin was 68.0 percent, compared to 67.3 percent in the year-earlier quarter.

Supplemental Discussions

As a supplemental discussion of our operating results, for comparison purposes, we are providing (1) our AT&T Business Solutions results which include both wireless and wireline operations and (2) a combined view of reported advertising revenues across all segments of AT&T. A reconciliation of the non-GAAP numbers in this supplemental discussion is attached as exhibit 99.2 hereto.

AT&T Business Solutions

Revenues from AT&T Business Solutions for the fourth quarter of 2019 were $9.5 billion, up 1.1 percent versus the year-ago quarter, driven by growth in wireless service revenues and strategic and managed services, partially offset by declines in our legacy voice and data services. Operating expenses totaled $7.5 billion, up 2.2 percent versus the fourth quarter of 2018. AT&T Business Solutions operating income margin was 20.4 percent, compared to 21.2 percent in the year-earlier quarter.

AT&T Advertising Revenues

Total AT&T Advertising revenues for the fourth quarter of 2019 were $1.9 billion, down 1.2 percent, primarily driven by WarnerMedia.

Other Matters

As previously disclosed, we maintain a share repurchase program for common stock that is authorized by our Board of Directors. In the fourth quarter 2019, repurchases totaled 51.4 million shares, or $2.0 billion, and year-to-date 2019 totaled 56.2 million shares, or $2.4 billion.

On January 3, 2020, we executed an accelerated share repurchase (ASR) agreement with a third-party, financial institution to repurchase AT&T common stock. Under the terms of the agreement, we paid the financial institution $4.0 billion and received 80% of the stock. In January 2020, we have repurchased approximately 85 million shares, under repurchase authorizations.

The ASR is expected to conclude late in the first quarter of 2020. Upon final settlement of the agreement, we may be entitled to receive additional shares of AT&T common stock, or, under certain circumstances, we may be required to deliver shares of AT&T common stock or make a cash payment, at our election.

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

Information set forth in this filing contains financial estimates and other forward-looking statements that are subject to risks and uncertainties. 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 or revise statements contained in this filing based on new information or otherwise.

Item 9.01 Financial Statements and Exhibits.

The following exhibits are furnished as part of this report:

(d) Exhibits

	99.1	AT&T Inc. selected financial statements and operating data.
	99.2	Discussion and reconciliation of non-GAAP measures.
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AT&T INC.



Date: January 29, 2020	By: /s/ Debra L. Dial . Debra L. Dial Senior Vice President and Controller

AT&T Inc.
Financial Data


Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Fourth Quarter				Percent		Year Ended				Percent
		2019		2018	Change			2019		2018	Change
Operating Revenues
Service	$	41,475	$	42,496	(2.4)	%	$	163,499	$	152,345	7.3	%
Equipment		5,346		5,497	(2.7)	%		17,694		18,411	(3.9)	%
Total Operating Revenues		46,821		47,993	(2.4)	%		181,193		170,756	6.1	%

Operating Expenses
Cost of revenues
Equipment		5,606		5,733	(2.2)	%		18,653		19,786	(5.7)	%
Broadcast, programming and operations		8,684		8,885	(2.3)	%		31,132		26,727	16.5	%
Other cost of revenues (exclusive of depreciation and amortization shown separately below)		8,446		8,691	(2.8)	%		34,356		32,906	4.4	%
Selling, general and administrative		10,345		10,586	(2.3)	%		39,422		36,765	7.2	%
Asset abandonment and impairments		1,458		46	-	%		1,458		46	-	%
Depreciation and amortization		6,961		7,892	(11.8)	%		28,217		28,430	(0.7)	%
Total Operating Expenses		41,500		41,833	(0.8)	%		153,238		144,660	5.9	%
Operating Income		5,321		6,160	(13.6)	%		27,955		26,096	7.1	%
Interest Expense		2,049		2,112	(3.0)	%		8,422		7,957	5.8	%
Equity in Net Income (Loss) of Affiliates		(30)		23	-	%		6		(48)	-	%
Other Income (Expense) - Net		(104)		1,674	-	%		(1,071)		6,782	-	%
Income Before Income Taxes		3,138		5,745	(45.4)	%		18,468		24,873	(25.8)	%
Income Tax Expense		434		615	(29.4)	%		3,493		4,920	(29.0)	%
Net Income		2,704		5,130	(47.3)	%		14,975		19,953	(24.9)	%
Less: Net Income Attributable to Noncontrolling Interest		(310)		(272)	(14.0)	%		(1,072)		(583)	(83.9)	%
Net Income Attributable to AT&T	$	2,394	$	4,858	(50.7)	%	$	13,903	$	19,370	(28.2)	%
Less: Preferred Stock Dividends		(3)		-	-	%		(3)		-	-	%
Net Income Attributable to Common Stock	$	2,391	$	4,858	(50.8)	%	$	13,900	$	19,370	(28.2)	%


Basic Earnings Per Share Attributable to Common Stock	$	0.33	$	0.66	(50.0)	%	$	1.90	$	2.85	(33.3)	%
Weighted Average Common Shares Outstanding (000,000)		7,312		7,296	0.2	%		7,319		6,778	8.0	%
Diluted Earnings Per Share Attributable to Common Stock	$	0.33	$	0.66	(50.0)	%	$	1.89	$	2.85	(33.7)	%
Weighted Average Common Shares Outstanding with Dilution (000,000)		7,341		7,328	0.2	%		7,348		6,806	8.0	%

AT&T Inc.
Financial Data


Consolidated Balance Sheets
Dollars in millions
Unaudited		Dec. 31,		Dec. 31,
		2019		2018
Assets
Current Assets
Cash and cash equivalents	$	12,130	$	5,204
Accounts receivable - net of allowances for doubtful accounts of $1,235 and $907		22,703		26,472
Prepaid expenses		1,631		2,047
Other current assets		18,364		17,704
Total current assets		54,828		51,427
Noncurrent Inventories and Theatrical Film and Television Production Costs		12,434		7,713
Property, Plant and Equipment – Net		130,343		131,473
Goodwill		146,241		146,370
Licenses – Net		97,907		96,144
Trademarks and Trade Names – Net		23,567		24,345
Distribution Networks – Net		15,345		17,069
Other Intangible Assets – Net		20,798		26,269
Investments in and Advances to Equity Affiliates		3,695		6,245
Operating Lease Right-of-Use Assets		24,039		-
Other Assets		22,754		24,809
Total Assets	$	551,951	$	531,864

Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	11,438	$	10,255
Accounts payable and accrued liabilities		45,956		43,184
Advanced billings and customer deposits		6,191		5,948
Accrued taxes		1,212		1,179
Dividends payable		3,781		3,854
Total current liabilities		68,578		64,420
Long-Term Debt		151,709		166,250
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		59,502		57,859
Postemployment benefit obligation		18,788		19,218
Operating lease liabilities		21,804		-
Other noncurrent liabilities		29,636		30,233
Total deferred credits and other noncurrent liabilities		129,730		107,310
Stockholders’ Equity
Preferred stock		-		-
Common stock		7,621		7,621
Additional paid-in capital		126,279		125,525
Retained earnings		57,936		58,753
Treasury stock		(13,085)		(12,059)
Accumulated other comprehensive income		5,470		4,249
Noncontrolling interest		17,713		9,795
Total stockholders’ equity		201,934		193,884
Total Liabilities and Stockholders' Equity	$	551,951	$	531,864

AT&T Inc.
Financial Data


Consolidated Statements of Cash Flows
Dollars in millions
Unaudited	Year Ended
		2019		2018
Operating Activities
Net income	$	14,975	$	19,953
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		28,217		28,430
Amortization of film and television costs		9,587		3,772
Undistributed earnings from investments in equity affiliates		295		292
Provision for uncollectible accounts		2,575		1,791
Deferred income tax expense (benefit)		1,806		4,931
Net (gain) loss from investments, net of impairments		(1,218)		(739)
Pension and postiretirement benefit expense (credit)		(2,002)		(1,148)
Actuarial (gain) loss on pension and postretirement benefits		5,171		(3,412)
Asset abandonments and impairments		1,458		46
Changes in operating assets and liabilities:
Receivables		2,745		(1,580)
Other current assets, inventories and theatrical film and television production costs		(12,852)		(6,442)
Accounts payable and other accrued liabilities		(1,457)		1,602
Equipment installment receivables and related sales		548		(490)
Deferred customer contract acquisition and fulfillment costs		(910)		(3,458)
Postretirement claims and contributions		(1,008)		(936)
Other - net		738		990
Total adjustments		33,693		23,649
Net Cash Provided by Operating Activities		48,668		43,602

Investing Activities
Capital expenditures:
Purchase of property and equipment		(19,435)		(20,758)
Interest during construction		(200)		(493)
Acquisitions, net of cash acquired		(1,809)		(43,309)
Dispositions		4,684		2,148
(Purchases), sales and settlement of securities and investments, net		435		(183)
Advances to and investments in equity affiliates, net		(365)		(1,050)
Cash collections of deferred purchase price		-		500
Net Cash Used in Investing Activities		(16,690)		(63,145)

Financing Activities
Net change in short-term borrowings with original maturities of three months or less		(276)		(821)
Issuance of other short-term borrowings		4,012		4,898
Repayment of other short-term borrowings		(6,904)		(2,098)
Issuance of long-term debt		17,039		41,875
Repayment of long-term debt		(27,592)		(52,643)
Payment of vendor financing		(3,050)		(560)
Issuance of preferred stock		1,164		-
Purchase of treasury stock		(2,417)		(609)
Issuance of treasury stock		631		745
Issuance of preferred interests in subsidiary		7,876		-
Dividends paid		(14,888)		(13,410)
Other		(678)		(3,366)
Net Cash Used in Financing Activities		(25,083)		(25,989)
Net increase (decrease) in cash and cash equivalents and restricted cash		6,895		(45,532)
Cash and cash equivalents and restricted cash beginning of year		5,400		50,932
Cash and Cash Equivalents and Restricted Cash End of Year	$	12,295	$	5,400

AT&T Inc.
Consolidated Supplementary Data


Supplementary Financial Data
Dollars in millions except per share amounts
Unaudited		Fourth Quarter				Percent		Year Ended					Percent
			2019		2018	Change			2019		2018		Change
Capital expenditures
	Purchase of property and equipment	$	3,752	$	4,063	(7.7)	%	$	19,435	$	20,758		(6.4)	%
	Interest during construction		40		89	(55.1)	%		200		493		(59.4)	%
Total Capital Expenditures		$	3,792	$	4,152	(8.7)	%	$	19,635	$	21,251		(7.6)	%

Dividends Declared per Common Share		$	0.52	$	0.51	2.0	%	$	2.05	$	2.01		2.0	%

End of Period Common Shares Outstanding (000,000)									7,255		7,282		(0.4)	%
Debt Ratio									44.7	%	47.7	%	(300)	BP
Total Employees									247,800		268,220		(7.6)	%


Supplementary Operating Data
Subscribers and connections in thousands
Unaudited								December 31,					Percent
									2019		2018		Change
Broadband Connections
	IP								14,659		14,751		(0.6)	%
	DSL								730		950		(23.2)	%
Total Broadband Connections									15,389		15,701		(2.0)	%

Voice Connections
	Network Access Lines								8,487		10,002		(15.1)	%
	U-verse VoIP Connections								4,370		5,114		(14.5)	%
Total Retail Voice Connections									12,857		15,116		(14.9)	%


		Fourth Quarter				Percent		Year Ended					Percent
			2019		2018	Change			2019		2018		Change
Broadband Net Additions
	IP		(127)		7	-	%		(94)		264		-	%
	DSL		(59)		(53)	(11.3)	%		(219)		(282)		22.3	%
Total Broadband Net Additions			(186)		(46)	-	%		(313)		(18)		-	%

COMMUNICATIONS SEGMENT
The Communications segment provides wireless and wireline telecom, video and broadband services to consumers located in the U.S. and businesses globally. The Communications segment contains three reporting units: Mobility, Entertainment Group, and Business Wireline. Historical results in the Mobility and Business Wireline business units of the Communications segment have been recast to remove operations in Puerto Rico and the U.S. Virgin Islands, which we began held-for-sale accounting in the third quarter of 2019.
Segment Results
Dollars in millions
Unaudited		Fourth Quarter				Percent		Year Ended				Percent
			2019		2018	Change			2019		2018	Change
Segment Operating Revenues
	Mobility	$	18,700	$	18,556	0.8	%	$	71,056	$	70,521	0.8	%
	Entertainment Group		11,233		11,962	(6.1)	%		45,126		46,460	(2.9)	%
	Business Wireline		6,589		6,705	(1.7)	%		26,177		26,740	(2.1)	%
Total Segment Operating Revenues			36,522		37,223	(1.9)	%		142,359		143,721	(0.9)	%

Segment Operating Contribution
	Mobility		5,503		5,424	1.5	%		22,320		21,568	3.5	%
	Entertainment Group		745		825	(9.7)	%		4,822		4,713	2.3	%
	Business Wireline		1,263		1,358	(7.0)	%		5,087		5,824	(12.7)	%
Total Segment Operating Contribution		$	7,511	$	7,607	(1.3)	%	$	32,229	$	32,105	0.4	%

Mobility
Mobility provides nationwide wireless service and equipment. Results have been recast to conform to the current period's presentation.
Mobility Results
Dollars in millions
Unaudited	Fourth Quarter					Percent		Year Ended					Percent
		2019		2018		Change			2019		2018		Change
Operating Revenues
Service	$	13,948	$	13,700		1.8	%	$	55,331	$	54,294		1.9	%
Equipment		4,752		4,856		(2.1)	%		15,725		16,227		(3.1)	%
Total Operating Revenues		18,700		18,556		0.8	%		71,056		70,521		0.8	%

Operating Expenses
Operations and support		11,170		11,087		0.7	%		40,681		40,690		-	%
Depreciation and amortization		2,027		2,045		(0.9)	%		8,054		8,263		(2.5)	%
Total Operating Expenses		13,197		13,132		0.5	%		48,735		48,953		(0.4)	%
Operating Income		5,503		5,424		1.5	%		22,321		21,568		3.5	%
Equity in Net Income (Loss) of Affiliates		-		-		-	%		(1)		-		-	%
Operating Contribution	$	5,503	$	5,424		1.5	%	$	22,320	$	21,568		3.5	%

Operating Income Margin		29.4	%	29.2	%	20	BP		31.4	%	30.6	%	80	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited								December 31,					Percent
									2019		2018		Change
Mobility Subscribers
Postpaid smartphones									60,664		60,131		0.9	%
Postpaid feature phones and data-centric devices									14,543		15,937		(8.7)	%
Postpaid									75,207		76,068		(1.1)	%
Prepaid									17,803		16,828		5.8	%
Reseller									6,893		7,693		(10.4)	%
Connected Devices									65,986		51,332		28.5	%
Total Mobility Subscribers									165,889		151,921		9.2	%

Postpaid Phone Subscribers									63,018		62,882		0.2	%
Total Phone Subscribers									79,700		78,767		1.2	%

	Fourth Quarter							Year Ended					Percent
		2019		2018					2019		2018		Change
Mobility Net Additions
Postpaid		135		15		-	%		(435)		(90)		-	%
Prepaid		8		26		(69.2)	%		677		1,301		(48.0)	%
Reseller		(251)		(424)		40.8	%		(928)		(1,599)		42.0	%
Connected Devices		3,698		3,153		17.3	%		14,645		12,324		18.8	%
Total Mobility Net Additions		3,590		2,770		29.6	%		13,959		11,936		16.9	%

Postpaid Phone Net Additions		229		131		74.8	%		483		194		-	%
Total Phone Net Additions		209		144		45.1	%		989		1,248		(20.8)	%

Postpaid Churn		1.29	%	1.23	%	6	BP		1.18	%	1.12	%	6	BP
Postpaid Phone-Only Churn		1.07	%	1.00	%	7	BP		0.95	%	0.90	%	5	BP

Entertainment Group

Entertainment Group provides video, including over-the-top (OTT) services, broadband and voice communication services primarily to residential customers. This business unit also sells advertising on video distribution platforms.


Entertainment Group Results
Dollars in millions
Unaudited		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
Video entertainment		$	8,068	$	8,676		(7.0)	%	$	32,110	$	33,357		(3.7)	%
High-speed internet			2,107		2,052		2.7	%		8,403		7,956		5.6	%
Legacy voice and data services			604		724		(16.6)	%		2,573		3,041		(15.4)	%
Other service and equipment			454		510		(11.0)	%		2,040		2,106		(3.1)	%
Total Operating Revenues			11,233		11,962		(6.1)	%		45,126		46,460		(2.9)	%

Operating Expenses
Operations and support			9,189		9,807		(6.3)	%		35,028		36,430		(3.8)	%
Depreciation and amortization			1,298		1,329		(2.3)	%		5,276		5,315		(0.7)	%
Total Operating Expenses			10,487		11,136		(5.8)	%		40,304		41,745		(3.5)	%
Operating Income			746		826		(9.7)	%		4,822		4,715		2.3	%
Equity in Net Income (Loss) of Affiliates			(1)		(1)		-	%		-		(2)		-	%
Operating Contribution		$	745	$	825		(9.7)	%	$	4,822	$	4,713		2.3	%

Operating Income Margin			6.6	%	6.9	%	(30)	BP		10.7	%	10.1	%	60	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									December 31,					Percent
										2019		2018		Change
Video Connections
Premium TV										19,473		22,903		(15.0)	%
AT&T TV Now										926		1,591		(41.8)	%
Total Video Connections										20,399		24,494		(16.7)	%

Broadband Connections
IP										13,598		13,729		(1.0)	%
DSL										521		680		(23.4)	%
Total Broadband Connections										14,119		14,409		(2.0)	%
Fiber Broadband Connections (included in IP)										3,887		2,763		40.7	%

Voice Connections
Retail Consumer Switched Access Lines										3,329		3,967		(16.1)	%
U-verse Consumer VoIP Connections										3,794		4,582		(17.2)	%
Total Retail Consumer Voice Connections										7,123		8,549		(16.7)	%

		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Video Net Additions
Premium TV¹			(945)		(391)		-	%		(3,430)		(1,186)		-	%
AT&T TV Now			(219)		(267)		18.0	%		(665)		436		-	%
Total Video Net Additions			(1,164)		(658)		(76.9)	%		(4,095)		(750)		-	%

Broadband Net Additions
IP			(141)		6		-	%		(131)		267		-	%
DSL			(41)		(38)		(7.9)	%		(159)		(208)		23.6	%
Total Broadband Net Additions			(182)		(32)		-	%		(290)		59		-	%
Fiber Broadband Net Additions (included in IP)			191		259		(26.3)	%		1,124		1,034		8.7	%
¹	Includes the impact of customers that migrated to AT&T TV Now.

Business Wireline

Business Wireline unit provides advanced IP-based services, as well as traditional data services to business customers. Results have been recast to conform to the current period's presentation.

Business Wireline Results
Dollars in millions
Unaudited		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
	Strategic and managed services	$	3,927	$	3,811		3.0	%	$	15,440	$	14,660		5.3	%
	Legacy voice and data services		2,207		2,498		(11.6)	%		9,180		10,674		(14.0)	%
	Other service and equipment		455		396		14.9	%		1,557		1,406		10.7	%
Total Operating Revenues			6,589		6,705		(1.7)	%		26,177		26,740		(2.1)	%

Operating Expenses
Operations and support			4,062		4,154		(2.2)	%		16,091		16,201		(0.7)	%
Depreciation and amortization			1,264		1,194		5.9	%		4,999		4,714		6.0	%
Total Operating Expenses			5,326		5,348		(0.4)	%		21,090		20,915		0.8	%
Operating Income			1,263		1,357		(6.9)	%		5,087		5,825		(12.7)	%
Equity in Net Income (Loss) of Affiliates			-		1		-	%		-		(1)		-	%
Operating Contribution		$	1,263	$	1,358		(7.0)	%	$	5,087	$	5,824		(12.7)	%

Operating Income Margin			19.2	%	20.2	%	(100)	BP		19.4	%	21.8	%	(240)	BP

Business Solutions
As a supplemental presentation to our Communications segment operating results, we are providing a view of our AT&T Business Solutions results which includes both wireless and fixed operations. This combined view presents a complete profile of the entire business customer relationship and underscores the importance of mobile solutions to serving our business customers. Results have been recast to conform to the current period's presentation.



Business Solutions Results
Dollars in millions
Unaudited		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
	Wireless service	$	2,024	$	1,883		7.5	%	$	7,925	$	7,323		8.2	%
	Strategic and managed services		3,927		3,811		3.0	%		15,440		14,660		5.3	%
	Legacy voice and data services		2,207		2,498		(11.6)	%		9,180		10,674		(14.0)	%
	Other service and equipment		455		396		14.9	%		1,557		1,406		10.7	%
	Wireless equipment		855		773		10.6	%		2,757		2,510		9.8	%
Total Operating Revenues			9,468		9,361		1.1	%		36,859		36,573		0.8	%

Operating Expenses
Operations and support			5,965		5,884		1.4	%		22,735		22,608		0.6	%
Depreciation and amortization			1,570		1,492		5.2	%		6,213		5,900		5.3	%
Total Operating Expenses			7,535		7,376		2.2	%		28,948		28,508		1.5	%
Operating Income			1,933		1,985		(2.6)	%		7,911		8,065		(1.9)	%
Equity in Net Income (Loss) of Affiliates			-		1		-	%		-		(1)		-	%
Operating Contribution		$	1,933	$	1,986		(2.7)	%	$	7,911	$	8,064		(1.9)	%

Operating Income Margin			20.4	%	21.2	%	(80)	BP		21.5	%	22.1	%	(60)	BP

WARNERMEDIA SEGMENT

The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content in various physical and digital formats globally. Results from Turner, Home Box Office and Warner Bros. businesses are combined with AT&T's Regional Sports Network (RSN) and Otter Media Holdings in the WarnerMedia segment.

Segment Results
Dollars in millions
Unaudited		Fourth Quarter				Percent		Year Ended				Percent
			2019		2018	Change			2019		2018	Change
Segment Operating Revenues
	Turner	$	3,262	$	3,212	1.6	%	$	13,122	$	6,979	88.0	%
	HBO		1,704		1,673	1.9	%		6,749		3,598	87.6	%
	Warner Bros.		4,118		4,476	(8.0)	%		14,358		8,703	65.0	%
	Eliminations and other		(160)		(129)	(24.0)	%		(730)		(339)	-	%
Total Segment Operating Revenues			8,924		9,232	(3.3)	%		33,499		18,941	76.9	%

Segment Operating Contribution
	Turner		1,273		1,306	(2.5)	%		5,199		3,108	67.3	%
	HBO		471		650	(27.5)	%		2,365		1,384	70.9	%
	Warner Bros.		794		807	(1.6)	%		2,350		1,449	62.2	%
	Eliminations and other		(91)		(60)	(51.7)	%		(588)		(246)	-	%
Total Segment Operating Contribution		$	2,447	$	2,703	(9.5)	%	$	9,326	$	5,695	63.8	%

Turner

Turner is comprised of the WarnerMedia businesses managed by Turner as well as our RSN. This business unit creates and programs branded news, entertainment, sports and kids multi-platform content that is sold to various distribution affiliates. Turner also sells advertising on its networks and digital properties.


Turner Results
Dollars in millions
Unaudited		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
	Subscription	$	1,901	$	1,844		3.1	%	$	7,736	$	4,207		83.9	%
	Advertising		1,126		1,149		(2.0)	%		4,566		2,330		96.0	%
	Content and other		235		219		7.3	%		820		442		85.5	%
Total Operating Revenues			3,262		3,212		1.6	%		13,122		6,979		88.0	%

Operating Expenses
Operations and support			1,927		1,861		3.5	%		7,740		3,794		-	%
Depreciation and amortization			68		60		13.3	%		235		131		79.4	%
Total Operating Expenses			1,995		1,921		3.9	%		7,975		3,925		-	%
Operating Income			1,267		1,291		(1.9)	%		5,147		3,054		68.5	%
Equity in Net Income of Affiliates			6		15		(60.0)	%		52		54		(3.7)	%
Operating Contribution		$	1,273	$	1,306		(2.5)	%	$	5,199	$	3,108		67.3	%

Operating Income Margin			38.8	%	40.2	%	(140)	BP		39.2	%	43.8	%	(460)	BP

Home Box Office

Home Box Office consists of premium pay television and OTT services domestically and premium pay, basic tier television and OTT services internationally, as well as content licensing and home entertainment


Home Box Office Results
Dollars in millions
Unaudited		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
	Subscription	$	1,431	$	1,414		1.2	%	$	5,814	$	3,201		81.6	%
	Content and other		273		259		5.4	%		935		397		-	%
Total Operating Revenues			1,704		1,673		1.9	%		6,749		3,598		87.6	%

Operating Expenses
Operations and support			1,188		1,025		15.9	%		4,312		2,187		97.2	%
Depreciation and amortization			35		26		34.6	%		102		56		82.1	%
Total Operating Expenses			1,223		1,051		16.4	%		4,414		2,243		96.8	%
Operating Income			481		622		(22.7)	%		2,335		1,355		72.3	%
Equity in Net Income (Loss) of Affiliates			(10)		28		-	%		30		29		3.4	%
Operating Contribution		$	471	$	650		(27.5)	%	$	2,365	$	1,384		70.9	%

Operating Income Margin			28.2	%	37.2	%	(900)	BP		34.6	%	37.7	%	(310)	BP

Warner Bros.

Warner Bros. consists of the production, distribution and licensing of television programming and feature films, the distribution of home entertainment products and the production and distribution of games.


Warner Bros. Results
Dollars in millions
Unaudited		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
	Theatrical product	$	1,570	$	2,085		(24.7)	%	$	5,978	$	4,002		49.4	%
	Television product		1,983		1,827		8.5	%		6,367		3,621		75.8	%
	Video games and other		565		564		0.2	%		2,013		1,080		86.4	%
Total Operating Revenues			4,118		4,476		(8.0)	%		14,358		8,703		65.0	%

Operating Expenses
Operations and support			3,273		3,623		(9.7)	%		11,816		7,130		65.7	%
Depreciation and amortization			40		42		(4.8)	%		162		96		68.8	%
Total Operating Expenses			3,313		3,665		(9.6)	%		11,978		7,226		65.8	%
Operating Income			805		811		(0.7)	%		2,380		1,477		61.1	%
Equity in Net Income (Loss) of Affiliates			(11)		(4)		-	%		(30)		(28)		(7.1)	%
Operating Contribution		$	794	$	807		(1.6)	%	$	2,350	$	1,449		62.2	%

Operating Income Margin			19.5	%	18.1	%	140	BP		16.6	%	17.0	%	(40)	BP

LATIN AMERICA SEGMENT

The Latin America segment provides entertainment and wireless service outside of the U.S. Our international subsidiaries conduct business in their local currency and operating results are converted to U.S. dollars using official exchange rates. The Latin America segment contains two business units: Vrio and Mexico.

Segment Results
Dollars in millions
Unaudited		Fourth Quarter				Percent		Year Ended				Percent
			2019		2018	Change			2019		2018	Change
Segment Operating Revenues
	Vrio	$	982	$	1,074	(8.6)	%	$	4,094	$	4,784	(14.4)	%
	Mexico		776		769	0.9	%		2,869		2,868	-	%
Total Segment Operating Revenues			1,758		1,843	(4.6)	%		6,963		7,652	(9.0)	%

Segment Operating Contribution
	Vrio		40		66	(39.4)	%		83		347	(76.1)	%
	Mexico		(127)		(314)	59.6	%		(718)		(1,057)	32.1	%
Total Segment Operating Contribution		$	(87)	$	(248)	64.9	%	$	(635)	$	(710)	10.6	%

Mexico

Mexico provides wireless services and equipment to customers in Mexico.

Mexico Results
Dollars in millions
Unaudited		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues
Wireless service		$	487	$	440		10.7	%	$	1,863	$	1,701		9.5	%
Wireless equipment			289		329		(12.2)	%		1,006		1,167		(13.8)	%
Total Operating Revenues			776		769		0.9	%		2,869		2,868		-	%

Operating Expenses
Operations and support			773		956		(19.1)	%		3,085		3,415		(9.7)	%
Depreciation and amortization			130		127		2.4	%		502		510		(1.6)	%
Total Operating Expenses			903		1,083		(16.6)	%		3,587		3,925		(8.6)	%
Operating Income (Loss)			(127)		(314)		59.6	%		(718)		(1,057)		32.1	%
Equity in Net Income of Affiliates			-		-		-	%		-		-		-	%
Operating Contribution		$	(127)	$	(314)		59.6	%	$	(718)	$	(1,057)		32.1	%

Operating Income Margin			(16.4)	%	(40.8)	%	2,440	BP		(25.0)	%	(36.9)	%	1,190	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									December 31,					Percent
										2019		2018		Change
Mexico Wireless Subscribers¹
Postpaid										5,103		5,805		(12.1)	%
Prepaid										13,584		12,264		10.8	%
Reseller										472		252		87.3	%
Total Mexico Wireless Subscribers										19,159		18,321		4.6	%

		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Mexico Wireless Net Additions
Postpaid			(249)		(17)		-	%		(608)		307		-	%
Prepaid			736		994		(26.0)	%		1,919		2,867		(33.1)	%
Reseller			53		39		35.9	%		219		48		-	%
Total Mexico Wireless Net Subscriber Additions			540		1,016		(46.9)	%		1,530		3,222		(52.5)	%

¹	2019 excludes the impact of 692 subscriber disconnections resulting from the churn of customers related to sales by certain
	third-party distributors and the sunset of 2G services in Mexico, which are reflected in beginning of period subscribers.

Vrio

Vrio provides entertainment services to customers utilizing satellite technology in Latin America and the Caribbean.

Vrio Results
Dollars in millions
Unaudited		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Operating Revenues		$	982	$	1,074		(8.6)	%	$	4,094	$	4,784		(14.4)	%

Operating Expenses
Operations and support			780		849		(8.1)	%		3,378		3,743		(9.8)	%
Depreciation and amortization			164		169		(3.0)	%		660		728		(9.3)	%
Total Operating Expenses			944		1,018		(7.3)	%		4,038		4,471		(9.7)	%
Operating Income			38		56		(32.1)	%		56		313		(82.1)	%
Equity in Net Income of Affiliates			2		10		(80.0)	%		27		34		(20.6)	%
Operating Contribution		$	40	$	66		(39.4)	%	$	83	$	347		(76.1)	%

Operating Income Margin			3.9	%	5.2	%	(130)	BP		1.4	%	6.5	%	(510)	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									December 31,					Percent
										2019		2018		Change
Vrio Video Subscribers¹										13,331		13,838		(3.7)	%


		Fourth Quarter					Percent		Year Ended					Percent
			2019		2018		Change			2019		2018		Change
Vrio Video Net Subscriber Additions			25		198		(87.4)	%		(285)		250		-	%

¹	2019 excludes the impact of 222 subscriber disconnections resulting from conforming our video credit policy across the region,
	which is reflected in beginning of period subscribers.

XANDR SEGMENT

The Xandr segment provides advertising services. These services utilize data insights to develop higher value targeted advertising. Certain revenues in this segment are also reported by the Communications segment and are eliminated upon consolidation.


Segment Operating Results
Dollars in millions
Unaudited	Fourth Quarter					Percent		Year Ended					Percent
		2019		2018		Change			2019		2018		Change
Segment Operating Revenues	$	607	$	566		7.2	%	$	2,022	$	1,740		16.2	%

Segment Operating Expenses
Operations and support		177		180		(1.7)	%		646		398		62.3	%
Depreciation and amortization		17		5		-	%		58		9		-	%
Total Segment Operating Expenses		194		185		4.9	%		704		407		73.0	%
Operating Income		413		381		8.4	%		1,318		1,333		(1.1)	%
Equity in Net Income of Affiliates		-		-		-	%		-		-		-	%
Segment Operating Contribution	$	413	$	381		8.4	%	$	1,318	$	1,333		(1.1)	%

Segment Operating Income Margin		68.0	%	67.3	%	70	BP		65.2	%	76.6	%	(1,140)	BP

Supplemental AT&T Advertising Revenues

As a supplemental presentation to our Xandr segment operating results, we are providing a view of total advertising revenues generated by AT&T, which combines the advertising revenues recorded across all operating segments. This combined view presents the entire portfolio of revenues generated from AT&T assets and represents a significant strategic initiative and growth opportunity for AT&T.


Advertising Revenues
Dollars in millions
Unaudited		Fourth Quarter				Percent		Year Ended				Percent
			2019		2018	Change			2019		2018	Change
Operating Revenues
	WarnerMedia	$	1,167	$	1,239	(5.8)	%	$	4,676	$	2,461	90.0	%
	Communications		581		543	7.0	%		1,963		1,827	7.4	%
	Xandr		607		566	7.2	%		2,022		1,740	16.2	%
	Eliminations		(502)		(473)	(6.1)	%		(1,672)		(1,595)	(4.8)	%
Total Advertising Revenues		$	1,853	$	1,875	(1.2)	%	$	6,989	$	4,433	57.7	%

SUPPLEMENTAL SEGMENT RECONCILIATION

Three Months Ended
Dollars in millions
Unaudited
*December 31, 2019*
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	18,700	$	11,170	$	7,530	$	2,027	$	5,503	$	-	$	5,503
Entertainment Group		11,233		9,189		2,044		1,298		746		(1)		745
Business Wireline		6,589		4,062		2,527		1,264		1,263		-		1,263
Total Communications		36,522		24,421		12,101		4,589		7,512		(1)		7,511
WarnerMedia
Turner		3,262		1,927		1,335		68		1,267		6		1,273
Home Box Office		1,704		1,188		516		35		481		(10)		471
Warner Bros.		4,118		3,273		845		40		805		(11)		794
Eliminations and other		(160)		(40)		(120)		11		(131)		40		(91)
Total WarnerMedia		8,924		6,348		2,576		154		2,422		25		2,447
Latin America
Vrio		982		780		202		164		38		2		40
Mexico		776		773		3		130		(127)		-		(127)
Total Latin America		1,758		1,553		205		294		(89)		2		(87)
Xandr		607		177		430		17		413		-		413
Segment Total		47,811		32,499		15,312		5,054		10,258	$	26	$	10,284
Corporate and Other
Corporate		385		879		(494)		124		(618)
Acquisition-related items		-		381		(381)		1,741		(2,122)
Certain significant items		-		1,701		(1,701)		43		(1,744)
Eliminations and consolidations		(1,375)		(921)		(454)		(1)		(453)
AT&T Inc.	$	46,821	$	34,539	$	12,282	$	6,961	$	5,321

December 31, 2018
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	18,556	$	11,087	$	7,469	$	2,045	$	5,424	$	-	$	5,424
Entertainment Group		11,962		9,807		2,155		1,329		826		(1)		825
Business Wireline		6,705		4,154		2,551		1,194		1,357		1		1,358
Total Communications		37,223		25,048		12,175		4,568		7,607		-		7,607
WarnerMedia
Turner		3,212		1,861		1,351		60		1,291		15		1,306
Home Box Office		1,673		1,025		648		26		622		28		650
Warner Bros.		4,476		3,623		853		42		811		(4)		807
Eliminations and other		(129)		(39)		(90)		11		(101)		41		(60)
Total WarnerMedia		9,232		6,470		2,762		139		2,623		80		2,703
Latin America
Vrio		1,074		849		225		169		56		10		66
Mexico		769		956		(187)		127		(314)		-		(314)
Total Latin America		1,843		1,805		38		296		(258)		10		(248)
Xandr		566		180		386		5		381		-		381
Segment Total		48,864		33,503		15,361		5,008		10,353	$	90	$	10,443
Corporate and Other
Corporate		514		418		96		596		(500)
Acquisition-related items		(49)		435		(484)		2,262		(2,746)
Certain significant items		-		492		(492)		26		(518)
Eliminations and consolidations		(1,336)		(907)		(429)		-		(429)
AT&T Inc.	$	47,993	$	33,941	$	14,052	$	7,892	$	6,160

SUPPLEMENTAL SEGMENT RECONCILIATION



Year Ended
Dollars in millions
Unaudited
*December 31, 2019*
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	71,056	$	40,681	$	30,375	$	8,054	$	22,321	$	(1)	$	22,320
Entertainment Group		45,126		35,028		10,098		5,276		4,822		-		4,822
Business Wireline		26,177		16,091		10,086		4,999		5,087		-		5,087
Total Communications		142,359		91,800		50,559		18,329		32,230		(1)		32,229
WarnerMedia
Turner		13,122		7,740		5,382		235		5,147		52		5,199
Home Box Office		6,749		4,312		2,437		102		2,335		30		2,365
Warner Bros.		14,358		11,816		2,542		162		2,380		(30)		2,350
Eliminations and other		(730)		(71)		(659)		39		(698)		110		(588)
Total WarnerMedia		33,499		23,797		9,702		538		9,164		162		9,326
Latin America
Vrio		4,094		3,378		716		660		56		27		83
Mexico		2,869		3,085		(216)		502		(718)		-		(718)
Total Latin America		6,963		6,463		500		1,162		(662)		27		(635)
Xandr		2,022		646		1,376		58		1,318		-		1,318
Segment Total		184,843		122,706		62,137		20,087		42,050	$	188	$	42,238
Corporate and Other
Corporate		1,675		3,008		(1,333)		629		(1,962)
Acquisition-related items		(72)		960		(1,032)		7,460		(8,492)
Certain significant items		-		2,082		(2,082)		43		(2,125)
Eliminations and consolidations		(5,253)		(3,735)		(1,518)		(2)		(1,516)
AT&T Inc.	$	181,193	$	125,021	$	56,172	$	28,217	$	27,955

December 31, 2018
		Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	70,521	$	40,690	$	29,831	$	8,263	$	21,568	$	-	$	21,568
Entertainment Group		46,460		36,430		10,030		5,315		4,715		(2)		4,713
Business Wireline		26,740		16,201		10,539		4,714		5,825		(1)		5,824
Total Communications		143,721		93,321		50,400		18,292		32,108		(3)		32,105
WarnerMedia
Turner		6,979		3,794		3,185		131		3,054		54		3,108
Home Box Office		3,598		2,187		1,411		56		1,355		29		1,384
Warner Bros.		8,703		7,130		1,573		96		1,477		(28)		1,449
Eliminations and other		(339)		(145)		(194)		22		(216)		(30)		(246)
Total WarnerMedia		18,941		12,966		5,975		305		5,670		25		5,695
Latin America
Vrio		4,784		3,743		1,041		728		313		34		347
Mexico		2,868		3,415		(547)		510		(1,057)		-		(1,057)
Total Latin America		7,652		7,158		494		1,238		(744)		34		(710)
Xandr		1,740		398		1,342		9		1,333		-		1,333
Segment Total		172,054		113,843		58,211		19,844		38,367	$	56	$	38,423
Corporate and Other
Corporate		2,150		2,250		(100)		1,630		(1,730)
Acquisition-related items		(49)		1,185		(1,234)		6,931		(8,165)
Certain significant items		-		899		(899)		26		(925)
Eliminations and consolidations		(3,399)		(1,947)		(1,452)		(1)		(1,451)
AT&T Inc.	$	170,756	$	116,230	$	54,526	$	28,430	$	26,096

Discussion and Reconciliation of Non-GAAP Measures

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
		Fourth Quarter
		December 31, 2019								December 31, 2018
		Mobility		Business Wireline		Adjustments¹		Business Solutions		Mobility		Business Wireline		Adjustments¹		Business Solutions
Operating Revenues
Wireless service	$	13,948	$	-	$	(11,924)	$	2,024	$	13,700	$	-	$	(11,817)	$	1,883
Strategic and managed services		-		3,927		-		3,927		-		3,811		-		3,811
Legacy voice and data services		-		2,207		-		2,207		-		2,498		-		2,498
Other services and equipment		-		455		-		455		-		396		-		396
Wireless equipment		4,752		-		(3,897)		855		4,856		-		(4,083)		773
Total Operating Revenues		18,700		6,589		(15,821)		9,468		18,556		6,705		(15,900)		9,361

Operating Expenses
Operations and support		11,170		4,062		(9,267)		5,965		11,087		4,154		(9,357)		5,884
EBITDA		7,530		2,527		(6,554)		3,503		7,469		2,551		(6,543)		3,477
Depreciation and amortization		2,027		1,264		(1,721)		1,570		2,045		1,194		(1,747)		1,492
Total Operating Expenses		13,197		5,326		(10,988)		7,535		13,132		5,348		(11,104)		7,376
Operating Income		5,503		1,263		(4,833)		1,933		5,424		1,357		(4,796)		1,985
Equity in Net Income (Loss) of Affiliates		-		-		-		-		-		1		-		1
Operating Contribution	$	5,503	$	1,263	$	(4,833)	$	1,933	$	5,424	$	1,358	$	(4,796)	$	1,986
¹Non-business wireless reported in the Communication segment under the Mobility business unit.

Supplemental Operational Measure
		Year Ended
		December 31, 2019								December 31, 2018
		Mobility		Business Wireline		Adjustments¹		Business Solutions		Mobility		Business Wireline		Adjustments¹		Business Solutions
Operating Revenues
Wireless service	$	55,331	$	-	$	(47,406)	$	7,925	$	54,294	$	-	$	(46,971)	$	7,323
Strategic and managed services		-		15,440		-		15,440		-		14,660		-		14,660
Legacy voice and data services		-		9,180		-		9,180		-		10,674		-		10,674
Other services and equipment		-		1,557		-		1,557		-		1,406		-		1,406
Wireless equipment		15,725		-		(12,968)		2,757		16,227		-		(13,717)		2,510
Total Operating Revenues		71,056		26,177		(60,374)		36,859		70,521		26,740		(60,688)		36,573

Operating Expenses
Operations and support		40,681		16,091		(34,037)		22,735		40,690		16,201		(34,283)		22,608
EBITDA		30,375		10,086		(26,337)		14,124		29,831		10,539		(26,405)		13,965
Depreciation and amortization		8,054		4,999		(6,840)		6,213		8,263		4,714		(7,077)		5,900
Total Operating Expenses		48,735		21,090		(40,877)		28,948		48,953		20,915		(41,360)		28,508
Operating Income		22,321		5,087		(19,497)		7,911		21,568		5,825		(19,328)		8,065
Equity in Net Income (Loss) of Affiliates		(1)		-		1		-		-		(1)		-		(1)
Operating Contribution	$	22,320	$	5,087	$	(19,496)	$	7,911	$	21,568	$	5,824	$	(19,328)	$	8,064
¹Non-business wireless reported in the Communication segment under the Mobility business unit.