Enhanced Investments - Financial Portal

Published: 2021-01-27 06:40:13 ET

EX-99.2 3 t-4q2020exhibit992.htm EX-99.2 AT&T INC. SELECTED FINANCIAL STATEMENTS AND OPERATING DATA Document


AT&T Inc.
Financial Data

Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Fourth Quarter				Percent		Year Ended				Percent
	2020		2019		Change		2020		2019		Change
Operating Revenues
Service	$	39,051	$	41,475	(5.8)	%	$	152,767	$	163,499	(6.6)	%
Equipment	6,640		5,346		24.2	%	18,993		17,694		7.3	%
Total Operating Revenues	45,691		46,821		(2.4)	%	171,760		181,193		(5.2)	%

Operating Expenses
Cost of revenues
Equipment	7,084		5,606		26.4	%	19,706		18,653		5.6	%
Broadcast, programming and operations	7,750		8,684		(10.8)	%	27,305		31,132		(12.3)	%
Other cost of revenues (exclusive of depreciation and amortization shown separately below)	8,076		8,446		(4.4)	%	32,909		34,356		(4.2)	%
Selling, general and administrative	10,182		10,345		(1.6)	%	38,039		39,422		(3.5)	%
Asset impairments and abandonments	16,365		1,458		—	%	18,880		1,458		—	%
Depreciation and amortization	6,979		6,961		0.3	%	28,516		28,217		1.1	%
Total Operating Expenses	56,436		41,500		36.0	%	165,355		153,238		7.9	%
Operating Income (Loss)	(10,745)		5,321		—	%	6,405		27,955		(77.1)	%
Interest Expense	1,894		2,049		(7.6)	%	7,925		8,422		(5.9)	%
Equity in Net Income (Loss) of Affiliates	106		(30)		—	%	95		6		—	%
Other Income (Expense) — Net	(3,020)		(104)		—	%	(1,431)		(1,071)		(33.6)	%
Income (Loss) Before Income Taxes	(15,553)		3,138		—	%	(2,856)		18,468		—	%
Income Tax (Benefit) Expense	(2,038)		434		—	%	965		3,493		(72.4)	%
Net Income (Loss)	(13,515)		2,704		—	%	(3,821)		14,975		—	%
Less: Net Income Attributable to Noncontrolling Interest	(368)		(310)		(18.7)	%	(1,355)		(1,072)		(26.4)	%
Net Income (Loss) Attributable to AT&T	$	(13,883)	$	2,394	—	%	$	(5,176)	$	13,903	—	%
Less: Preferred Stock Dividends	(55)		(3)		—	%	(193)		(3)		—	%
Net Income (Loss) Attributable to Common Stock	$	(13,938)	$	2,391	—	%	$	(5,369)	$	13,900	—	%

Basic Earnings Per Share Attributable to Common Stock	$	(1.95)	$	0.33	—	%	$	(0.75)	$	1.90	—	%
Weighted Average Common Shares Outstanding (000,000)	7,150		7,312		(2.2)	%	7,157		7,319		(2.2)	%
Diluted Earnings Per Share Attributable to Common Stock	$	(1.95)	$	0.33	—	%	$	(0.75)	$	1.89	—	%
Weighted Average Common Shares Outstanding with Dilution (000,000)	7,176		7,341		(2.2)	%	7,183		7,348		(2.2)	%


AT&T Inc.
Financial Data

Consolidated Balance Sheets
Dollars in millions
Unaudited	Dec. 31,		Dec. 31,
	2020		2019
Assets
Current Assets
Cash and cash equivalents	$	9,740	$	12,130
Accounts receivable - net of related allowance for credit loss of $1,221 and $1,235	20,215		22,636
Prepaid expenses	1,822		1,631
Other current assets	20,231		18,364
Total current assets	52,008		54,761
Noncurrent Inventories and Theatrical Film and Television Production Costs	14,752		12,434
Property, Plant and Equipment – Net	127,315		130,128
Goodwill	135,259		146,241
Licenses – Net	93,840		97,907
Trademarks and Trade Names – Net	23,297		23,567
Distribution Networks – Net	13,793		15,345
Other Intangible Assets – Net	15,386		20,798
Investments in and Advances to Equity Affiliates	1,780		3,695
Operating Lease Right-Of-Use Assets	24,714		24,039
Other Assets	23,617		22,754
Total Assets	$	525,761	$	551,669
Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	3,470	$	11,838
Accounts payable and accrued liabilities	49,032		45,956
Advanced billings and customer deposits	6,176		6,124
Accrued taxes	1,019		1,212
Dividends payable	3,741		3,781
Total current liabilities	63,438		68,911
Long-Term Debt	153,775		151,309
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes	60,472		59,502
Postemployment benefit obligation	18,276		18,788
Operating lease liabilities	22,202		21,804
Other noncurrent liabilities	28,358		29,421
Total deferred credits and other noncurrent liabilities	129,308		129,515
Stockholders’ Equity
Preferred stock	—		—
Common stock	7,621		7,621
Additional paid-in capital	130,175		126,279
Retained earnings	37,457		57,936
Treasury stock	(17,910)		(13,085)
Accumulated other comprehensive income	4,330		5,470
Noncontrolling interest	17,567		17,713
Total stockholders’ equity	179,240		201,934
Total Liabilities and Stockholders’ Equity	$	525,761	$	551,669


AT&T Inc.
Financial Data

Consolidated Statements of Cash Flows
Dollars in millions
Unaudited	Year Ended
	2020		2019
Operating Activities
Net income (loss)	$	(3,821)	$	14,975
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	28,516		28,217
Amortization of film and television costs	8,603		9,587
Undistributed earnings from investments in equity affiliates	38		295
Provision for uncollectible accounts	1,972		2,575
Deferred income tax expense	1,675		1,806
Net (gain) loss on investments, net of impairments	(742)		(1,218)
Pension and postretirement benefit expense (credit)	(2,992)		(2,002)
Actuarial (gain) loss on pension and postretirement benefits	4,169		5,171
Asset impairments and abandonments	18,880		1,458
Changes in operating assets and liabilities:
Receivables	2,216		2,812
Other current assets, inventories and theatrical film and television production costs	(13,070)		(12,852)
Accounts payable and other accrued liabilities	(1,410)		(1,524)
Equipment installment receivables and related sales	(1,429)		548
Deferred customer contract acquisition and fulfillment costs	376		(910)
Postretirement claims and contributions	(985)		(1,008)
Other - net	1,134		738
Total adjustments	46,951		33,693
Net Cash Provided by Operating Activities	43,130		48,668

Investing Activities
Capital expenditures, including $(123) and $(200) of interest during construction	(15,675)		(19,635)
Acquisitions, net of cash acquired	(1,851)		(1,809)
Dispositions	3,641		4,684
(Purchases), sales and settlements of securities and investments, net	497		435
Advances to and investments in equity affiliates, net	(160)		(365)
Net Cash Used in Investing Activities	(13,548)		(16,690)

Financing Activities
Net change in short-term borrowings with original maturities of three months or less	(17)		(276)
Issuance of other short-term borrowings	9,440		4,012
Repayment of other short-term borrowings	(9,467)		(6,904)
Issuance of long-term debt	31,988		17,039
Repayment of long-term debt	(39,964)		(27,592)
Payment of vendor financing	(2,966)		(3,050)
Issuance of preferred stock	3,869		1,164
Purchase of treasury stock	(5,498)		(2,417)
Issuance of treasury stock	105		631
Issuance of preferred interests in subsidiary	1,979		7,876
Redemption of preferred interest in subsidiary	(1,950)		—
Dividends paid	(14,956)		(14,888)
Other - net	(4,570)		(678)
Net Cash Used in Financing Activities	(32,007)		(25,083)
Net (decrease) increase in cash and cash equivalents and restricted cash	(2,425)		6,895
Cash and cash equivalents and restricted cash beginning of year	12,295		5,400
Cash and Cash Equivalents and Restricted Cash End of Year	$	9,870	$	12,295


AT&T Inc.
Consolidated Supplementary Data

Supplementary Financial Data
Dollars in millions except per share amounts
Unaudited	Fourth Quarter				Percent		Year Ended						Percent
	2020		2019		Change		2020			2019			Change
Capital expenditures
Purchase of property and equipment	$	2,361	$	3,752	(37.1)	%	$	15,552		$	19,435		(20.0)	%
Interest during construction	31		40		(22.5)	%	123			200			(38.5)	%
Total Capital Expenditures	$	2,392	$	3,792	(36.9)	%	$	15,675		$	19,635		(20.2)	%

Dividends Declared per Common Share	$	0.52	$	0.52	—	%	$	2.08		$	2.05		1.5	%

End of Period Common Shares Outstanding (000,000)							7,126			7,255			(1.8)	%
Debt Ratio							46.7		%	44.7		%	200	BP
Total Employees							230,760			247,800			(6.9)	%

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited							December 31,						Percent
							2020			2019			Change
Broadband Connections
IP							14,818			14,659			1.1	%
DSL							566			730			(22.5)	%
Total Broadband Connections							15,384			15,389			—	%

Voice Connections
Network Access Lines							7,263			8,487			(14.4)	%
U-verse VoIP Connections							3,816			4,370			(12.7)	%
Total Retail Voice Connections							11,079			12,857			(13.8)	%

	Fourth Quarter				Percent		Year Ended						Percent
	2020		2019		Change		2020			2019			Change
Broadband Net Additions
IP	57		(127)		—	%	159			(94)			—	%
DSL	(48)		(59)		18.6	%	(164)			(219)			25.1	%
Total Broadband Net Additions	9		(186)		—	%	(5)			(313)			98.4	%

COMMUNICATIONS SEGMENT

Our Communications segment consists of our Mobility, Video, Broadband and Business Wireline business units. During the fourth quarter, to further accelerate our ability to innovate and execute in our fast-growing broadband and fiber business, we began operating our video business separately from our broadband and legacy telephony operations. We have recast our results for all prior periods to split the Entertainment Group into two separate business units, Video and Broadband, and remove video operations from Business Wireline, combining all video operations in Video.


Segment Results
Dollars in millions
Unaudited	Fourth Quarter				Percent		Year Ended				Percent
	2020		2019		Change		2020		2019		Change
Segment Operating Revenues
Mobility	$	20,119	$	18,700	7.6	%	$	72,564	$	71,056	2.1	%
Video	7,168		8,075		(11.2)	%	28,610		32,124		(10.9)	%
Broadband	3,116		3,161		(1.4)	%	12,318		13,012		(5.3)	%
Business Wireline	6,319		6,586		(4.1)	%	25,358		26,167		(3.1)	%
Total Segment Operating Revenues	36,722		36,522		0.5	%	138,850		142,359		(2.5)	%

Segment Operating Contribution
Mobility	5,088		5,503		(7.5)	%	22,372		22,321		0.2	%
Video	98		39		—	%	1,729		2,064		(16.2)	%
Broadband	366		686		(46.6)	%	1,822		2,681		(32.0)	%
Business Wireline	1,006		1,283		(21.6)	%	4,598		5,164		(11.0)	%
Total Segment Operating Contribution	$	6,558	$	7,511	(12.7)	%	$	30,521	$	32,230	(5.3)	%

Mobility

Mobility provides nationwide wireless service and equipment.


Mobility Results
Dollars in millions
Unaudited	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Operating Revenues
Service	$	14,022		$	13,948		0.5	%	$	55,542		$	55,331		0.4	%
Equipment	6,097			4,752			28.3	%	17,022			15,725			8.2	%
Total Operating Revenues	20,119			18,700			7.6	%	72,564			71,056			2.1	%

Operating Expenses
Operations and support	13,023			11,170			16.6	%	42,106			40,681			3.5	%
Depreciation and amortization	2,008			2,027			(0.9)	%	8,086			8,054			0.4	%
Total Operating Expenses	15,031			13,197			13.9	%	50,192			48,735			3.0	%
Operating Income	5,088			5,503			(7.5)	%	22,372			22,321			0.2	%
Equity in Net Income (Loss) of Affiliates	—			—			—	%	—			—			—	%
Operating Contribution	$	5,088		$	5,503		(7.5)	%	$	22,372		$	22,321		0.2	%

Operating Income Margin	25.3		%	29.4		%	(410)	BP	30.8		%	31.4		%	(60)	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									December 31,						Percent
									2020			2019			Change
Mobility Subscribers
Postpaid									77,154			75,207			2.6	%
Prepaid									18,102			17,803			1.7	%
Reseller									6,535			6,893			(5.2)	%
Connected Devices									80,767			65,986			22.4	%
Total Mobility Subscribers									182,558			165,889			10.0	%

	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Mobility Net Additions
Postpaid Phone Net Additions1	800			229			—	%	1,457			483			—	%
Total Phone Net Additions1	760			209			—	%	1,640			989			65.8	%

Postpaid1, 2	1,229			135			—	%	2,183			(435)			—	%
Prepaid2, 3	14			8			75.0	%	379			677			(44.0)	%
Reseller2	(197)			(251)			21.5	%	(449)			(928)			51.6	%
Connected Devices	4,809			3,698			30.0	%	14,785			14,645			1.0	%
Total Mobility Net Additions	5,855			3,590			63.1	%	16,898			13,959			21.1	%

Postpaid Churn1	0.94		%	1.29		%	(35)	BP	0.98		%	1.18		%	(20) BP
Postpaid Phone-Only Churn1	0.76		%	1.07		%	(31)	BP	0.79		%	0.95		%	(16) BP
1Fourth-quarter 2020 subscriber net adds include 35 postpaid (28 phone) “Keep Americans Connected Pledge” paying accounts. The fourth quarter postpaid churn excluding “Keep Americans Connected Pledge” paying accounts was 0.96% (0.78% phone), with no impact for the year ended December 31, 2020.
2The year ended December 31, 2020, includes subscribers transferred in connection with business dispositions.
3The year ended December 31, 2020, includes 188 subscriber disconnections resulting from updating our prepaid activation policy.

Video


Video provides video, including over-the-top (OTT) services and also sells advertising on video distribution platforms. Video results were previously reported in the Entertainment Group and Business Wireline business units.

Video Results
Dollars in millions
Unaudited	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Operating Revenues
Service	$	7,124		$	8,074		(11.8)	%	$	28,465		$	32,123		(11.4)	%
Equipment	44			1			—	%	145			1			—	%
Total Operating Revenues	7,168			8,075			(11.2)	%	28,610			32,124			(10.9)	%

Operating Expenses
Operations and support	6,549			7,447			(12.1)	%	24,619			27,599			(10.8)	%
Depreciation and amortization	521			589			(11.5)	%	2,262			2,461			(8.1)	%
Total Operating Expenses	7,070			8,036			(12.0)	%	26,881			30,060			(10.6)	%
Operating Income	98			39			—	%	1,729			2,064			(16.2)	%
Equity in Net Income (Loss) of Affiliates	—			—			—	%	—			—			—	%
Operating Contribution	$	98		$	39		—	%	$	1,729		$	2,064		(16.2)	%

Operating Income Margin	1.4		%	0.5		%	90	BP	6.0		%	6.4		%	(40)	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									December 31,						Percent
									2020			2019			Change
Video Connections
Premium TV									16,505			19,496			(15.3)	%
AT&T TV Now									656			926			(29.2)	%
Total Video Connections									17,161			20,422			(16.0)	%

	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Video Net Additions
Premium TV 1	(617)			(946)			34.8	%	(2,992)			(3,430)			12.8	%
AT&T TV Now	(27)			(219)			87.7	%	(270)			(665)			59.4	%
Total Video Net Additions	(644)			(1,165)			44.7	%	(3,262)			(4,095)			20.3	%
1Fourth-quarter 2020 subscriber net adds include 4 premium TV “Keep Americans Connected Pledge” paying accounts.

Broadband

Broadband provides internet, including broadband fiber, and legacy telephony voice communication services to residential customers. Broadband was previously combined with the majority of our Video business unit and reported as Entertainment Group. Results have been recast to conform to the current period’s presentation of separate Video and Broadband business units.


Broadband Results
Dollars in millions
Unaudited	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Operating Revenues

High-speed internet	$	2,205		$	2,107		4.7	%	$	8,534		$	8,403		1.6	%
Legacy voice and data services	534			604			(11.6)	%	2,213			2,573			(14.0)	%
Other service and equipment	377			450			(16.2)	%	1,571			2,036			(22.8)	%
Total Operating Revenues	3,116			3,161			(1.4)	%	12,318			13,012			(5.3)	%

Operating Expenses
Operations and support	2,012			1,749			15.0	%	7,582			7,451			1.8	%
Depreciation and amortization	738			726			1.7	%	2,914			2,880			1.2	%
Total Operating Expenses	2,750			2,475			11.1	%	10,496			10,331			1.6	%
Operating Income	366			686			(46.6)	%	1,822			2,681			(32.0)	%
Equity in Net Income (Loss) of Affiliates	—			—			—	%	—			—			—	%
Operating Contribution	$	366		$	686		(46.6)	%	$	1,822		$	2,681		(32.0)	%

Operating Income Margin	11.7		%	21.7		%	(1,000)	BP	14.8		%	20.6		%	(580)	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									December 31,						Percent
									2020			2019			Change





Broadband Connections
Total Broadband Connections									14,100			14,119			(0.1)	%
Fiber Broadband Connections									4,951			3,887			27.4	%

Voice Connections
Retail Consumer Switched Access Lines									2,862			3,329			(14.0)	%
U-verse Consumer VoIP Connections									3,231			3,794			(14.8)	%
Total Retail Consumer Voice Connections									6,093			7,123			(14.5)	%

	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change





Broadband Net Additions
Total Broadband Net Additions1	(2)			(182)			98.9	%	(19)			(290)			93.4	%
Fiber Broadband Net Additions	273			191			42.9	%	1,064			1,124			(5.3)	%
1Fourth-quarter 2020 subscriber net adds include 4 “Keep Americans Connected Pledge” paying accounts.

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 of a separate Video business unit.


Business Wireline Results
Dollars in millions
Unaudited	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Operating Revenues
Strategic and managed services	$	4,006		$	3,925		2.1	%	$	15,788		$	15,430		2.3	%
Legacy voice and data services	1,956			2,207			(11.4)	%	8,183			9,180			(10.9)	%
Other service and equipment	357			454			(21.4)	%	1,387			1,557			(10.9)	%
Total Operating Revenues	6,319			6,586			(4.1)	%	25,358			26,167			(3.1)	%

Operating Expenses
Operations and support	3,993			4,056			(1.6)	%	15,534			16,069			(3.3)	%
Depreciation and amortization	1,320			1,247			5.9	%	5,226			4,934			5.9	%
Total Operating Expenses	5,313			5,303			0.2	%	20,760			21,003			(1.2)	%
Operating Income	1,006			1,283			(21.6)	%	4,598			5,164			(11.0)	%
Equity in Net Income (Loss) of Affiliates	—			—			—	%	—			—			—	%
Operating Contribution	$	1,006		$	1,283		(21.6)	%	$	4,598		$	5,164		(11.0)	%

Operating Income Margin	15.9		%	19.5		%	(360)	BP	18.1		%	19.7		%	(160)	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 classification of consumer and business wireless subscribers and a separate Video reporting unit.


Business Solutions Results
Dollars in millions
Unaudited	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Operating Revenues
Wireless service	$	1,948		$	1,899		2.6	%	$	7,732		$	7,444		3.9	%
Strategic and managed services	4,006			3,925			2.1	%	15,788			15,430			2.3	%
Legacy voice and data services	1,956			2,207			(11.4)	%	8,183			9,180			(10.9)	%
Other service and equipment	357			454			(21.4)	%	1,387			1,557			(10.9)	%
Wireless equipment	925			855			8.2	%	2,882			2,754			4.6	%
Total Operating Revenues	9,192			9,340			(1.6)	%	35,972			36,365			(1.1)	%

Operating Expenses
Operations and support	6,091			5,960			2.2	%	22,713			22,714			—	%
Depreciation and amortization	1,640			1,554			5.5	%	6,509			6,148			5.9	%
Total Operating Expenses	7,731			7,514			2.9	%	29,222			28,862			1.2	%
Operating Income	1,461			1,826			(20.0)	%	6,750			7,503			(10.0)	%
Equity in Net Income (Loss) of Affiliates	—			—			—	%	—			—			—	%
Operating Contribution	$	1,461		$	1,826		(20.0)	%	$	6,750		$	7,503		(10.0)	%

Operating Income Margin	15.9		%	19.6		%	(370)	BP	18.8		%	20.6		%	(180)	BP

WARNERMEDIA SEGMENT

The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content in various physical and digital formats globally, and also includes our Xandr business, which utilizes data analytics to provide targeted advertising services. Results from Turner, Home Box Office (HBO) and Warner Bros. businesses are combined with AT&T's Regional Sports Network (RSN), Otter Media Holdings and Xandr in the WarnerMedia segment. All previously reported periods have been recast to include Xandr, which was a separate reportable segment prior to the second quarter of 2020 and to remove the Crunchyroll anime business that was classified as held-for-sale.


Segment Results
Dollars in millions
Unaudited	Fourth Quarter				Percent		Year Ended				Percent
	2020		2019		Change		2020		2019		Change
Segment Operating Revenues
Turner	$	3,242	$	3,262	(0.6)	%	$	12,568	$	13,122	(4.2)	%
HBO	1,903		1,704		11.7	%	6,808		6,749		0.9	%
Warner Bros.	3,247		4,118		(21.2)	%	12,154		14,358		(15.4)	%
Eliminations and other	162		369		(56.1)	%	(1,088)		1,030		—	%
Total Segment Operating Revenues	8,554		9,453		(9.5)	%	30,442		35,259		(13.7)	%

Cost of revenues
Turner	1,356		1,458		(7.0)	%	5,330		5,970		(10.7)	%
HBO	1,201		892		34.6	%	4,356		3,248		34.1	%
Warner Bros.	2,057		2,823		(27.1)	%	8,236		10,006		(17.7)	%
Selling, general and administrative	1,698		1,416		19.9	%	5,803		5,368		8.1	%
Eliminations and other	(477)		(141)		—	%	(2,146)		(420)		—	%
Depreciation and amortization	177		169		4.7	%	671		589		13.9	%
Total Operating Expenses	6,012		6,617		(9.1)	%	22,250		24,761		(10.1)	%
Operating Income	2,542		2,836		(10.4)	%	8,192		10,498		(22.0)	%
Equity in Net Income (Loss) of Affiliates	(13)		23		—	%	18		161		(88.8)	%
Total Segment Operating Contribution	$	2,529	$	2,859	(11.5)	%	$	8,210	$	10,659	(23.0)	%

Turner

Turner 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
	2020			2019			Change		2020			2019			Change
Operating Revenues
Subscription	$	1,920		$	1,901		1.0	%	$	7,613		$	7,736		(1.6)	%
Advertising	1,111			1,126			(1.3)	%	3,941			4,566			(13.7)	%
Content and other	211			235			(10.2)	%	1,014			820			23.7	%
Total Operating Revenues	3,242			3,262			(0.6)	%	12,568			13,122			(4.2)	%

Operating Expenses
Cost of revenues	1,356			1,458			(7.0)	%	5,330			5,970			(10.7)	%
Selling, general and administrative	453			469			(3.4)	%	1,624			1,770			(8.2)	%
Depreciation and amortization	70			68			2.9	%	277			235			17.9	%
Total Operating Expenses	1,879			1,995			(5.8)	%	7,231			7,975			(9.3)	%
Operating Income	1,363			1,267			7.6	%	5,337			5,147			3.7	%
Equity in Net Income (Loss) of Affiliates	(2)			6			—	%	(2)			52			—	%
Operating Contribution	$	1,361		$	1,273		6.9	%	$	5,335		$	5,199		2.6	%

Operating Income Margin	42.0		%	38.8		%	320	BP	42.5		%	39.2		%	330	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
	2020			2019			Change		2020			2019			Change
Operating Revenues
Subscription	$	1,687		$	1,431		17.9	%	$	6,090		$	5,814		4.7	%
Content and other	216			273			(20.9)	%	718			935			(23.2)	%
Total Operating Revenues	1,903			1,704			11.7	%	6,808			6,749			0.9	%

Operating Expenses
Cost of revenues	1,201			892			34.6	%	4,356			3,248			34.1	%
Selling, general and administrative	591			296			99.7	%	1,672			1,064			57.1	%
Depreciation and amortization	25			35			(28.6)	%	98			102			(3.9)	%
Total Operating Expenses	1,817			1,223			48.6	%	6,126			4,414			38.8	%
Operating Income	86			481			(82.1)	%	682			2,335			(70.8)	%
Equity in Net Income (Loss) of Affiliates	1			(10)			—	%	16			30			(46.7)	%
Operating Contribution	$	87		$	471		(81.5)	%	$	698		$	2,365		(70.5)	%

Operating Income Margin	4.5		%	28.2		%	(2,370)	BP	10.0		%	34.6		%	(2,460)	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
	2020			2019			Change		2020			2019			Change
Operating Revenues
Theatrical product	$	1,186		$	1,570		(24.5)	%	$	4,389		$	5,978		(26.6)	%
Television product	1,566			1,983			(21.0)	%	6,171			6,367			(3.1)	%
Games and other	495			565			(12.4)	%	1,594			2,013			(20.8)	%
Total Operating Revenues	3,247			4,118			(21.2)	%	12,154			14,358			(15.4)	%

Operating Expenses
Cost of revenues	2,057			2,823			(27.1)	%	8,236			10,006			(17.7)	%
Selling, general and administrative	354			450			(21.3)	%	1,681			1,810			(7.1)	%
Depreciation and amortization	45			40			12.5	%	169			162			4.3	%
Total Operating Expenses	2,456			3,313			(25.9)	%	10,086			11,978			(15.8)	%
Operating Income	791			805			(1.7)	%	2,068			2,380			(13.1)	%
Equity in Net Income (Loss) of Affiliates	(20)			(11)			(81.8)	%	(70)			(30)			—	%
Operating Contribution	$	771		$	794		(2.9)	%	$	1,998		$	2,350		(15.0)	%

Operating Income Margin	24.4		%	19.5		%	490	BP	17.0		%	16.6		%	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
	2020		2019		Change		2020		2019		Change
Segment Operating Revenues
Vrio	$	762	$	982	(22.4)	%	$	3,154	$	4,094	(23.0)	%
Mexico	736		776		(5.2)	%	2,562		2,869		(10.7)	%
Total Segment Operating Revenues	1,498		1,758		(14.8)	%	5,716		6,963		(17.9)	%

Segment Operating Contribution
Vrio	(41)		40		—	%	(142)		83		—	%
Mexico	(126)		(127)		0.8	%	(587)		(718)		18.2	%
Total Segment Operating Contribution	$	(167)	$	(87)	(92.0)	%	$	(729)	$	(635)	(14.8)	%

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
	2020			2019			Change		2020			2019			Change
Operating Revenues	$	762		$	982		(22.4)	%	$	3,154		$	4,094		(23.0)	%

Operating Expenses
Operations and support	681			780			(12.7)	%	2,800			3,378			(17.1)	%
Depreciation and amortization	120			164			(26.8)	%	520			660			(21.2)	%
Total Operating Expenses	801			944			(15.1)	%	3,320			4,038			(17.8)	%
Operating Income (Loss)	(39)			38			—	%	(166)			56			—	%
Equity in Net Income (Loss) of Affiliates	(2)			2			—	%	24			27			(11.1)	%
Operating Contribution	$	(41)		$	40		—	%	$	(142)		$	83		—	%

Operating Income Margin	(5.1)		%	3.9		%	(900)	BP	(5.3)		%	1.4		%	(670)	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									December 31,						Percent
									2020			2019			Change
Vrio Video Subscribers									10,942			13,331			(17.9)	%

	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Vrio Video Net Additions1	49			25			96.0	%	(148)			(285)			48.1	%

12020 excludes the impact of 2.2 million subscriber disconnections resulting from the closure of our DIRECTV operations in Venezuela.

Mexico

Mexico provides wireless services and equipment to customers in Mexico.


Mexico Results
Dollars in millions
Unaudited	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Operating Revenues
Wireless service	$	459		$	487		(5.7)	%	$	1,656		$	1,863		(11.1)	%
Wireless equipment	277			289			(4.2)	%	906			1,006			(9.9)	%
Total Operating Revenues	736			776			(5.2)	%	2,562			2,869			(10.7)	%

Operating Expenses
Operations and support	722			773			(6.6)	%	2,636			3,085			(14.6)	%
Depreciation and amortization	140			130			7.7	%	513			502			2.2	%
Total Operating Expenses	862			903			(4.5)	%	3,149			3,587			(12.2)	%
Operating Income (Loss)	(126)			(127)			0.8	%	(587)			(718)			18.2	%
Equity in Net Income of Affiliates	—			—			—	%	—			—			—	%
Operating Contribution	$	(126)		$	(127)		0.8	%	$	(587)		$	(718)		18.2	%

Operating Income Margin	(17.1)		%	(16.4)		%	(70)	BP	(22.9)		%	(25.0)		%	210	BP

Supplementary Operating Data
Subscribers and connections in thousands
Unaudited									December 31,						Percent
									2020			2019			Change
Mexico Wireless Subscribers
Postpaid									4,696			5,103			(8.0)	%
Prepaid									13,758			13,584			1.3	%
Reseller									489			472			3.6	%
Mexico Wireless Subscribers									18,943			19,159			(1.1)	%

	Fourth Quarter						Percent		Year Ended						Percent
	2020			2019			Change		2020			2019			Change
Mexico Wireless Net Additions1
Postpaid	(14)			(249)			94.4	%	(407)			(608)			33.1	%
Prepaid	509			736			(30.8)	%	174			1,919			(90.9)	%
Reseller	34			53			(35.8)	%	118			219			(46.1)	%
Mexico Wireless Net Additions	529			540			(2.0)	%	(115)			1,530			—	%

12020 excludes the impact of 101 subscriber disconnections resulting from conforming our policy on reporting of fixed wireless resellers.

Supplemental AT&T Advertising Revenues

As a supplemental presentation, 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.


Advertising Revenues
Dollars in millions
Unaudited	Fourth Quarter				Percent		Year Ended				Percent
	2020		2019		Change		2020		2019		Change
Operating Revenues
Turner	$	1,111	$	1,126	(1.3)	%	$	3,941	$	4,566	(13.7)	%
Video	603		502		20.1	%	1,718		1,672		2.8	%
Xandr	741		607		22.1	%	2,089		2,022		3.3	%
Other	122		116		5.2	%	386		382		1.0	%
Eliminations	(603)		(502)		(20.1)	%	(1,718)		(1,672)		(2.8)	%
Total Advertising Revenues	$	1,974	$	1,849	6.8	%	$	6,416	$	6,970	(7.9)	%

SUPPLEMENTAL SEGMENT RECONCILIATION


Three Months Ended
Dollars in millions
Unaudited
December 31, 2020
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	20,119	$	13,023	$	7,096	$	2,008	$	5,088	$	—	$	5,088
Video	7,168		6,549		619		521		98		—		98
Broadband	3,116		2,012		1,104		738		366		—		366
Business Wireline	6,319		3,993		2,326		1,320		1,006		—		1,006
Total Communications	36,722		25,577		11,145		4,587		6,558		—		6,558
WarnerMedia
Turner	3,242		1,809		1,433		70		1,363		(2)		1,361
Home Box Office	1,903		1,792		111		25		86		1		87
Warner Bros.	3,247		2,411		836		45		791		(20)		771
Eliminations and other	162		(177)		339		37		302		8		310
Total WarnerMedia	8,554		5,835		2,719		177		2,542		(13)		2,529
Latin America
Vrio	762		681		81		120		(39)		(2)		(41)
Mexico	736		722		14		140		(126)		—		(126)
Total Latin America	1,498		1,403		95		260		(165)		(2)		(167)
Segment Total	46,774		32,815		13,959		5,024		8,935		$	(15)	$	8,920
Corporate and Other
Corporate	388		894		(506)		52		(558)
Acquisition-related items	—		37		(37)		1,890		(1,927)
Certain significant items	—		16,617		(16,617)		14		(16,631)
Eliminations and consolidations	(1,471)		(906)		(565)		(1)		(564)
AT&T Inc.	$	45,691	$	49,457	$	(3,766)	$	6,979	$	(10,745)


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
Video	8,075		7,447		628		589		39		—		39
Broadband	3,161		1,749		1,412		726		686		—		686
Business Wireline	6,586		4,056		2,530		1,247		1,283		—		1,283
Total Communications	36,522		24,422		12,100		4,589		7,511		—		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	369		60		309		26		283		38		321
Total WarnerMedia	9,453		6,448		3,005		169		2,836		23		2,859
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)
Segment Total	47,733		32,423		15,310		5,052		10,258		$	25	$	10,283
Corporate and Other
Corporate	463		955		(492)		126		(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

SUPPLEMENTAL SEGMENT RECONCILIATION


Year Ended
Dollars in millions
Unaudited
December 31, 2020
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)		Equity in Net Income (Loss) of Affiliates		Segment Contribution
Communications
Mobility	$	72,564	$	42,106	$	30,458	$	8,086	$	22,372	$	—	$	22,372
Video	28,610		24,619		3,991		2,262		1,729		—		1,729
Broadband	12,318		7,582		4,736		2,914		1,822		—		1,822
Business Wireline	25,358		15,534		9,824		5,226		4,598		—		4,598
Total Communications	138,850		89,841		49,009		18,488		30,521		—		30,521
WarnerMedia
Turner	12,568		6,954		5,614		277		5,337		(2)		5,335
Home Box Office	6,808		6,028		780		98		682		16		698
Warner Bros.	12,154		9,917		2,237		169		2,068		(70)		1,998
Eliminations and other	(1,088)		(1,320)		232		127		105		74		179
Total WarnerMedia	30,442		21,579		8,863		671		8,192		18		8,210
Latin America
Vrio	3,154		2,800		354		520		(166)		24		(142)
Mexico	2,562		2,636		(74)		513		(587)		—		(587)
Total Latin America	5,716		5,436		280		1,033		(753)		24		(729)
Segment Total	175,008		116,856		58,152		20,192		37,960		$	42	$	38,002
Corporate and Other
Corporate	1,932		3,974		(2,042)		300		(2,342)
Acquisition-related items	—		468		(468)		8,012		(8,480)
Certain significant items	—		19,156		(19,156)		14		(19,170)
Eliminations and consolidations	(5,180)		(3,615)		(1,565)		(2)		(1,563)
AT&T Inc.	$	171,760	$	136,839	$	34,921	$	28,516	$	6,405


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	$	—	$	22,321
Video	32,124		27,599		4,525		2,461		2,064		—		2,064
Broadband	13,012		7,451		5,561		2,880		2,681		—		2,681
Business Wireline	26,167		16,069		10,098		4,934		5,164		—		5,164
Total Communications	142,359		91,800		50,559		18,329		32,230		—		32,230
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	1,030		304		726		90		636		109		745
Total WarnerMedia	35,259		24,172		11,087		589		10,498		161		10,659
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)
Segment Total	184,581		122,435		62,146		20,080		42,066		$	188	$	42,254
Corporate and Other
Corporate	1,937		3,279		(1,342)		636		(1,978)
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