EX-99.2 3 ex99_2.htm AT&T INC. SELECTED FINANCIAL STATEMENTS AND OPERATING DATA ex99_2.htm
Financial Data
                  
                   
AT&T Inc.
                  
Consolidated Statements of Income
                  
Dollars in millions except per share amounts
                  
Unaudited
  
Three Months Ended
              
   
3/31/2008
    
3/31/2007
    
% Chg
  
Operating Revenues
                  
  Voice
   $ 9,693     $ 10,455       -7.3 %
  Data
     5,972       5,655       5.6 %
  Wireless service
     10,605       9,070       16.9 %
  Directory
     1,398       1,022       36.8 %
  Other
     3,076       2,767       11.2 %
    Total Operating Revenues
     30,744       28,969       6.1 %
                         
Operating Expenses
                        
  Cost of services and sales (exclusive of
                        
     depreciation and amortization shown separately below)
     11,775       11,252       4.6 %
  Selling, general and administrative
     8,086       7,437       8.7 %
  Depreciation and amortization
     4,903       5,616       -12.7 %
    Total Operating Expenses
     24,764       24,305       1.9 %
Operating Income
     5,980       4,664       28.2 %
Interest Expense
     865       873       -0.9 %
Equity in Net Income of Affiliates
     243       173       40.5 %
Other Income (Expense) - Net
     33       504       -93.5 %
Income Before Income Taxes
     5,391       4,468       20.7 %
Income Taxes
     1,930       1,620       19.1 %
Net Income
   $ 3,461     $ 2,848       21.5 %
                         
                         
Basic Earnings Per Share
   $ 0.58     $ 0.46       26.1 %
Weighted Average Common
                        
  Shares Outstanding (000,000)
     5,997       6,224       -3.6 %
                         
Diluted Earnings Per Share
   $ 0.57     $ 0.45       26.7 %
Weighted Average Common
                        
  Shares Outstanding with Dilution (000,000)
     6,033       6,266       -3.7 %
                         
 
 
 
 
 
Financial Data
                  
                   
AT&T Inc.
                  
Statements of Segment Income
                  
Dollars in millions
                  
Unaudited
                  
   
Three Months Ended
        
                   
Wireless
  
3/31/2008
    
3/31/2007
    
% Chg
  
Segment Operating Revenues
                  
  Service
   $ 10,645     $ 9,092       17.1 %
  Equipment
     1,180       905       30.4 %
    Total Segment Operating Revenues
     11,825       9,997       18.3 %
                         
Segment Operating Expenses
                        
  Cost of services and equipment sales
     4,110       3,670       12.0 %
  Selling, general and administrative
     3,279       2,913       12.6 %
  Depreciation and amortization
     1,480       1,891       -21.7 %
    Total Segment Operating Expenses
     8,869       8,474       4.7 %
Segment Operating Income
     2,956       1,523       94.1 %
Equity in Net Income of Affiliates
     2       7       -71.4 %
Minority Interest
     (60 )     (48 )     -25.0 %
Segment Income
   $ 2,898     $ 1,482       95.5 %
                         
                         
Wireline
                        
Segment Operating Revenues
                        
  Voice
   $ 9,919     $ 10,677       -7.1 %
  Data
     6,205       5,862       5.9 %
  Other
     1,500       1,447       3.7 %
    Total Segment Operating Revenues
     17,624       17,986       -2.0 %
                         
Segment Operating Expenses
                        
  Cost of sales
     7,616       7,558       0.8 %
  Selling, general and administrative
     4,005       4,093       -2.2 %
  Depreciation and amortization
     3,170       3,440       -7.8 %
    Total Segment Operating Expenses
     14,791       15,091       -2.0 %
Segment Income
   $ 2,833     $ 2,895       -2.1 %
                         
                         
Advertising & Publishing
                        
Segment Operating Revenues
   $ 1,417     $ 1,443       -1.8 %
                         
Segment Operating Expenses
                        
  Cost of sales
     444       455       -2.4 %
  Selling, general and administrative
     343       279       22.9 %
  Depreciation and amortization
     212       242       -12.4 %
    Total Segment Operating Expenses
     999       976       2.4 %
Segment Income
   $ 418     $ 467       -10.5 %
                         
                         
Other
                        
Segment Operating Revenues
   $ 544     $ 544       -  
Segment Operating Expenses
     770       464       65.9 %
Segment Operating Income(Loss)
     (226 )     80       -  
Equity in Net Income of Affiliates
     241       172       40.1 %
Segment Income
   $ 15     $ 252       -94.0 %
 
 
 
 
 
Financial Data
            
             
AT&T Inc.
            
Consolidated Balance Sheets
            
Dollars in millions except per share amounts
            
   
3/31/08
    
12/31/07
  
   
Unaudited
        
             
Assets
            
Current Assets
            
 Cash and cash equivalents
   $ 1,963     $ 1,970  
 Accounts receivable - net of allowances for
                
     uncollectibles of $1,361 and $1,364
     15,697       16,185  
 Prepaid expenses
     1,610       1,524  
 Deferred income taxes
     1,934       2,044  
 Other current assets
     2,742       2,963  
  Total current assets
     23,946       24,686  
Property, Plant and Equipment - Net
     96,238       95,890  
Goodwill
     70,815       70,713  
Licenses
     40,711       37,985  
Customer Lists and Relationships - Net
     13,692       14,505  
Other Intangible Assets - Net
     5,877       5,912  
Investments in Equity Affiliates
     2,578       2,270  
Postemployment Benefit
     17,645       17,291  
Other Assets
     6,697       6,392  
   Total Assets
   $ 278,199     $ 275,644  
                 
Liabilities and Stockholders' Equity
                
Current Liabilities
                
 Debt maturing within one year
   $ 13,301     $ 6,860  
 Accounts payable and accrued liabilities
     18,590       21,399  
 Advanced billing and customer deposits
     3,677       3,571  
 Accrued taxes
     4,186       5,027  
 Dividends payable
     2,375       2,417  
  Total current liabilities
     42,129       39,274  
Long-Term Debt
     60,189       57,255  
Deferred Credits and Other Noncurrent Liabilities
                
 Deferred income taxes
     25,203       24,939  
 Postemployment benefit obligation
     24,510       24,011  
 Unamortized investment tax credits
     144       150  
 Other noncurrent liabilities
     13,766       14,648  
  Total deferred credits and other noncurrent liabilities
     63,623       63,748  
                 
Stockholders' Equity
                
 Common shares issued ($1 par value)
     6,495       6,495  
 Capital in excess of par value
     91,598       91,638  
 Retained earnings
     34,311       33,297  
 Treasury shares (at cost)
     (19,590 )     (15,683 )
 Accumulated other comprehensive loss
     (556 )     (380 )
  Total stockholders' equity
     112,258       115,367  
   Total Liabilities and Stockholders' Equity
   $ 278,199     $ 275,644  
 
 
 
 
 
Financial Data
            
             
AT&T Inc.
            
Consolidated Statements of Cash Flows
            
Dollars in millions, increase (decrease) in cash and cash equivalents
            
Unaudited
  
Three Months Ended
  
   
 3/31/08
    
3/31/07
  
Operating Activities
            
Net income
   $ 3,461     $ 2,848  
Adjustments to reconcile net income to
                
  net cash provided by operating activities:
                
 Depreciation and amortization
     4,903       5,616  
 Undistributed earnings from investments in equity affiliates
     (225 )     (156 )
 Provision for uncollectible accounts
     480       376  
 Amortization of investment tax credits
     (6 )     (8 )
 Deferred income tax expense
     569       65  
 Net gain on sales of investments
     (46 )     -  
 Gain on license exchange
     -       (409 )
Changes in operating assets and liabilities:
                
   Accounts receivable
     (150 )     237  
   Other current assets
     142       (748 )
   Accounts payable and accrued liabilities
     (4,654 )     (3,232 )
   Stock-based compensation tax benefit
     (7 )     (47 )
Other - net
     490       71  
Total adjustments
     1,496       1,765  
Net Cash Provided by Operating Activities
     4,957       4,613  
                 
Investing Activities
                
Construction and capital expenditures
     (4,247 )     (3,338 )
Acquisitions, net of cash acquired
     (3,662 )     (198 )
Dispositions
     47       209  
Proceeds from sale of securities, net of investments
     131       518  
Other
     32       7  
Net Cash Used in Investing Activities
     (7,699 )     (2,802 )
                 
Financing Activities
                
Net change in short-term borrowings with
                
 original maturities of three months or less
     5,786       (2,989 )
Issuance of long-term debt
     3,972       5,924  
Repayment of long-term debt
     (613 )     (227 )
Purchase of treasury shares
     (4,071 )     (3,005 )
Issuance of treasury shares
     103       687  
Dividends paid
     (2,422 )     (2,218 )
Stock-based compensation tax benefit
     7       47  
Other
     (27 )     (84 )
Net Cash Provided by (Used in) Financing Activities
     2,735       (1,865 )
Net decrease in cash and cash equivalents
     (7 )     (54 )
Cash and cash equivalents beginning of year
     1,970       2,418  
Cash and Cash Equivalents End of Period
   $ 1,963     $ 2,364  
 
 
 
 
 
Financial Data
                  
                   
AT&T Inc.
                  
Supplementary Operating and Financial Data
                  
Dollars in millions except per share amounts
                  
Unaudited
  
Three Months Ended
        
   
3/31/2008
    
3/31/2007
    
% Chg
  
                   
Wireless
                  
Wireless Customers (000)
     71,367       62,217       14.7 %
     Net Customer Additions (000)
     1,295       1,191       8.7 %
     M&A Activity, Partitioned Customers and Other Adjs. (000)
     20       64       -68.8 %
Postpaid Customers (000)
     56,016       50,588       10.7 %
     Net Postpaid Customer Additions (000)
     705       680       3.7 %
     Postpaid Churn
     1.2 %     1.3 %  
-10 B
 P
Licensed POPs (000,000)
     304       296       2.7 %
                         
In-Region Wireline 1
                        
Total Consumer Revenue Connections (000) 8
                        
Retail Consumer Primary Switched/VoIP connections 2
     30,316       32,315       -6.2 %
Retail Consumer Additional Switched/VoIP connections 2
     3,866       4,345       -11.0 %
Consumer Broadband Connections 3
     12,547       10,908       15.0 %
Video Connections: 4
                        
Satellite Connections
     2,232       1,684       32.5 %
U-verse Video Connections
     379       13       -  
               Total Consumer Revenue Connections (000)
     49,340       49,265       0.2 %
                         
         Net Consumer Revenue Connections Changes (000)
     (98 )     404       -  
                         
Switched Access Lines (000) 8
                        
    Retail Consumer - Primary
     30,312       32,315       -6.2 %
    Retail Consumer - Additional
     3,866       4,345       -11.0 %
    Retail Business
     22,647       23,318       -2.9 %
Retail
     56,825       59,978       -5.3 %
                         
Wholesale 5
     3,407       5,136       -33.7 %
Coin 6
     183       315       -41.9 %
               Total Switched Access Lines (000)
     60,415       65,429       -7.7 %
                         
         Net Switched Access Line Changes (000)
     (1,167 )     (1,040 )     12.2 %
                         
Total Broadband Connections (000) 3, 8
     14,647       12,861       13.9 %
Net Broadband Connections Changes (000) 3, 8
     491       691       -28.9 %
Video Connections (000) 4
     2,611       1,697       53.9 %
Net Video Connections Changes (000) 4
     264       187       41.2 %
                         
AT&T Inc.
                        
Capital Expenditures
   $ 4,247     $ 3,338       27.2 %
Dividends Declared per Share
   $ 0.4000     $ 0.3550       12.7 %
End of Period Common Shares Outstanding (000,000)
     5,939       6,186       -4.0 %
Debt Ratio 7
     39.6 %     35.4 %  
420 B
 P 
Total Employees
     310,070       301,760       2.8 %
                         
                         
 
1
  In-region wireline represents access lines served by AT&T's incumbent local exchange companies.
2
  Primarily switched access lines.  Also includes VoIP.
3
  Broadband connections include DSL lines, U-verse high speed Internet access and satellite broadband.
4
  Video connections include sales under agency agreements with EchoStar and DirecTV customers and U-verse connections.
5
  Wholesale lines include 0.2 million lines purchased by AT&T Corp. at 03/31/08 and 1.1 million at 03/31/07.
6
  Coin includes both retail and wholesale access lines.
7
  Total long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity.
8
  Prior year amounts restated to conform to current period reporting methodology.
 
 
 
 
 
Financial Data
 
                        
AT&T Inc.
                        
Non-GAAP Wireless Reconciliations
                        
Wireless Segment Adjusted OIBDA
                        
Dollars in Millions                        
Unaudited                         
Quarter Ended March 31, 2008
  
 
  
 Adjusting Items
 
              
   
GAAP
    
Intangible Amortization
  
Adjusted
        
Service Revenues
   $ 10,645           $ 10,645        
Equipment Revenues
     1,180             1,180        
Total Operating Revenues
   $ 11,825     $ -     $ 11,825        
                               
Operating Expenses
                              
Cost of Services and Equipment Sales
     4,110       -       4,110        
Selling, General and Administrative
     3,279       -       3,279        
Depreciation and Amortization
     1,480       (568 )     912        
Total Operating Expenses
     8,869       (568 )     8,301        
                               
Operating Income
     2,956               3,524        
                               
Plus: Depreciation and Amortization
     1,480               912        
OIBDA
     4,436               4,436        
OIBDA as a % of Service Revenue
     41.7 %             41.7 %      
                               
Quarter Ended March 31, 2007
        
Adjusting Items
        
   
GAAP
    
Integration Costs
  
Intangible Amortization
  
Adjusted
  
Service Revenues
   $ 9,092                     $ 9,092  
Equipment Revenues
     905                       905  
Total Operating Revenues
   $ 9,997     $ -     $ -     $ 9,997  
                                 
Operating Expenses
                                
Cost of Services and Equipment Sales
     3,670       (20 )     -       3,650  
Selling, General and Administrative
     2,913       (104 )     -       2,809  
Depreciation and Amortization
     1,891       (85 )     (813 )     993  
Total Operating Expenses
     8,474       (209 )     (813 )     7,452  
                                 
Operating Income
     1,523                       2,545  
                                 
Plus: Depreciation and Amortization
     1,891                       993  
OIBDA
     3,414                       3,538  
OIBDA as a % of Service Revenue
     37.5 %                     38.9 %
 
 
   OIBDA is defined as operating income (loss) before depreciation and amortization.  OIBDA differs from segment operating income (loss), as calculated in accordance with generally accepted accounting principles (GAAP), in that it excludes depreciation and amortization.  OIBDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses.  OIBDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with GAAP.  Our calculation of OIBDA, as presented, may differ from similarly titled measures reported by other companies.
 
 
 
 
 
Financial Data
 
      
AT&T Inc.
  
Non-GAAP Consolidated Reconciliations
      
Reconciliation of Free Cash Flow and Free Cash Flow Yield
      
 Dollars in Millions, Except for Share Price      
       
unaudited
      
March 31, 2008
  
Trailing Twelve Months
  
       
Net cash provided by operating activities
  
$
 34,416  
Less: Construction and capital expenditures
     18,626  
Free Cash Flow
  
$
 15,790  
         
End of Period Share Price
  
$
 38.30  
End of Period Shares Outstanding (Ms)
     5,939  
Market Capitalization
  
$
 227,464  
         
Free Cash Flow Yield
     6.9 %
 
  Free cash flow yield is based upon cash from continuing operations less capital expenditures as a percentage of market capitalization computed on 03/31/08.  Market capitalization is computed by multiplying the end of period share price by the end of period shares outstanding as of 03/31/08.
 
 
 
Financial Data
                  
                   
AT&T Inc.
                  
Non-GAAP Consolidated Reconciliations
                  
Adjusted and Reported Wireline Operating Expenses
              
Dollars in Millions
                  
                   
Unaudited
                  
   
Three Months Ended
        
   
3/31/08
    
3/31/07
    
YoY % Change
  
                   
Reported Wireline Operating Expenses
   $ 14,791     $ 15,091       -2.0 %
Operating Adjustments
                        
Cash Integration Costs
     -       86       -100.0 %
Intangible Amortization
     421       630       -33.2 %
Total Adjusting Items
     421       716       -41.2 %
Adjusted Wireline Operating Expenses
   $ 14,370     $ 14,375       0.0 %
 
  Adjusted Wireline operating expenses differs from reported operating expenses in that it excludes the merger-related expenses shown above and provides additional comparability to prior periods.