0000732717-16-000190.txt : 20160721 0000732717-16-000190.hdr.sgml : 20160721 20160721160357 ACCESSION NUMBER: 0000732717-16-000190 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20160630 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160721 DATE AS OF CHANGE: 20160721 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AT&T INC. CENTRAL INDEX KEY: 0000732717 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 431301883 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08610 FILM NUMBER: 161777462 BUSINESS ADDRESS: STREET 1: 208 S. AKARD ST STREET 2: ATTN : JAMES LACY CITY: DALLAS STATE: TX ZIP: 75202 BUSINESS PHONE: 2108214105 MAIL ADDRESS: STREET 1: 208 S. AKARD ST STREET 2: ATTN : JAMES LACY CITY: DALLAS STATE: TX ZIP: 75202 FORMER COMPANY: FORMER CONFORMED NAME: SBC COMMUNICATIONS INC DATE OF NAME CHANGE: 19950501 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHWESTERN BELL CORP DATE OF NAME CHANGE: 19920703 8-K 1 q2earning8k.htm AT&T INC. 2ND QUARTER 2016 EARNINGS RELEASE

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) July 21, 2016

AT&T INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-8610	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))

Item 2.02 Results of Operations and Financial Condition.

The registrant announced on July 21, 2016, its results of operations for the second quarter of 2016. The text of the press release and accompanying financial information are attached as exhibits and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

The following exhibits are furnished as part of this report:

(d) Exhibits

99.1

Press release dated July 21, 2016 reporting financial results for the second quarter ended June 30, 2016.

	99.2	AT&T Inc. selected financial statements and operating data.

	99.3	Discussion and reconciliation of non-GAAP measures.

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: July 21, 2016	By: /s/ Debra L. Dial_________________ Debra L. Dial Senior Vice President and Controller

EX-99.1 2 ex99_1.htm AT&T INC. 1Q-2016 NEWS RELEASE

AT&T Reports Second-Quarter Results

Including DIRECTV Acquisition

●	Consolidated revenues of $40.5 billion, up more than 22%

●	Operating income up 13.6%

●	Net income up 10.6%

●	Cash from operations of $10.3 billion, up 12.5%

●	Free cash flow of $4.8 billion, up 8.4%

●	Diluted EPS of $0.55 as reported and $0.72 diluted adjusted EPS compared to $0.59 and $0.70 in the year-ago quarter

●	2.1 million wireless net adds driven by connected devices, Mexico and Cricket

●	U.S. wireless postpaid churn of 0.97%, second-lowest ever

●	U.S. wireless operating margins expand; best-ever U.S. wireless EBITDA margins

●	342,000 U.S. DIRECTV net adds; 38,000 global TV net adds

o	Nearly 1 million U.S. satellite net adds since acquisition of DIRECTV

●	74,000 IP broadband net adds

●	Nearly 800,000 U.S.-branded smartphones added to subscriber base, more than offsetting a nearly 600,000 decline in U.S.-branded feature phone base

●	185,000 U.S.-branded (postpaid and prepaid) phone net adds

●	380 million North American 4G LTE POPs

●	Year-to-date cash from operations up 14.5%; year-to-date free cash flow up 11.6%

●	Full-year guidance on track to meet or exceed expectations

Note: AT&T's second-quarter earnings conference call will be webcast at 4:30 p.m. ET on Thursday, July 21, 2016. The webcast and related materials will be available on AT&T's Investor Relations website at www.att.com/investor.relations

DALLAS, July 21, 2016 — AT&T Inc. (NYSE:T) today reported revenue, net income, adjusted EPS and free cash flow growth for the second quarter.

July 21, 2016

"One year after our acquisition of DIRECTV, the success of the integration has exceeded our expectations," said Randall Stephenson, AT&T chairman and CEO. "Cost synergies are ahead of target, we've added nearly 1 million DIRECTV subscribers since the acquisition, and our new video streaming services are scheduled to roll out later this year. We plan to serve every segment of the video industry and offer customers their favorite content virtually wherever and whenever they want it.

"Second-quarter results continued our strong track record of delivering revenue, adjusted earnings and free cash flow growth. This steady execution done at scale gives us the financial strength to grow our business while returning substantial value to our shareholders."

Consolidated Financial Results

AT&T's consolidated revenues for the second quarter totaled $40.5 billion, up more than 22% versus the year-earlier period largely due to the July 24, 2015 acquisition of DIRECTV. Compared with results for the second quarter of 2015, operating expenses were $34.0 billion versus $27.2 billion; operating income was $6.6 billion versus $5.8 billion; and operating income margin was 16.2% versus 17.5%. When adjusting for amortization, merger- and integration-related costs and other expenses, operating income was $8.1 billion versus $6.5 billion; and operating income margin was 20.1%, up 30 basis points from a year ago.

Second-quarter net income attributable to AT&T totaled $3.4 billion, or $0.55 per diluted share, compared to $3.1 billion, or $0.59 per diluted share, in the year-ago quarter. Adjusting for $0.17 of amortization, merger-and integration-related costs and other expenses, earnings per diluted share was $0.72 compared to an adjusted $0.70 in the year-ago quarter.

Cash from operating activities was $10.3 billion in the second quarter, and capital investment¹ totaled $5.6 billion. Free cash flow — cash from operating activities minus capital expenditures — was $4.8 billion, up 8.4% year over year.

For detailed segment results, please go to the Investor Briefing and Financial and Operational Results on the AT&T Investor Relations website.

¹2Q16 includes $95 million in capital purchases in Mexico with favorable vendor payment terms.

AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

July 21, 2016

About AT&T

AT&T Inc. (NYSE:T) helps millions around the globe connect with leading entertainment, mobile, high-speed Internet and voice services. We're the world's largest provider of pay TV. We have TV customers in the U.S. and 11 Latin American countries. We offer the best global coverage of any U.S. wireless provider*. And we help businesses worldwide serve their customers better with our mobility and highly secure cloud solutions.

Additional information about AT&T products and services is available at http://about.att.com. Follow our news on Twitter at @ATT, on Facebook at http://www.facebook.com/att and YouTube at http://www.youtube.com/att.

© 2016 AT&T Intellectual Property. All rights reserved. AT&T, the Globe logo and other marks are trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.

*Global coverage claim based on offering discounted voice and data roaming; LTE roaming; voice roaming; and world-capable smartphone and tablets in more countries than any other U.S. based carrier. International service required. Coverage not available in all areas. Coverage may vary per country and be limited/restricted in some countries.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise.

This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company's website at www.att.com/investor.relations.

The "quiet period" for FCC Spectrum Auction 1000 (also known as the 600 MHz incentive auction) is now in effect. During the quiet period, auction applicants are required to avoid discussions of bids, bidding strategy and post-auction market structure with other auction applicants.

Free Cash Flow

Free cash flow is defined as cash from operations minus Capital expenditures. Free cash flow after dividends is defined as cash from operations minus Capital expenditures and dividends. Free cash flow dividend payout ratio is defined as the percentage of dividends paid to free cash flow. We believe these metrics provide useful information to our investors because management views free cash flow as an important indicator of how much cash is generated by routine business operations, including Capital expenditures, and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.

July 21, 2016

Capital Investment

Capital Investment is a non-GAAP financial measure that adds to Capital expenditures the amount of vendor financing arrangements for capital improvements to our wireless network in Mexico. These favorable payment terms are considered vendor financing arrangements and are reported as repayments of debt instead of Capital expenditures. Management believes that Capital Investment provides relevant and useful information to investors and other users of our financial data in evaluating long-term investment in our business.

EBITDA

Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies. For AT&T, EBITDA excludes other income (expense) – net, and equity in net income (loss) of affiliates, as these do not reflect the operating results of our subscriber base or operations that are not under our control. Equity in net income (loss) of affiliates represents the proportionate share of the net income (loss) of affiliates in which we exercise significant influence, but do not control. Because we do not control these entities, management excludes these results when evaluating the performance of our primary operations. EBITDA also excludes interest expense and the provision for income taxes. Excluding these items eliminates the expenses associated with our capital and tax structures. Finally, EBITDA excludes depreciation and amortization in order to eliminate the impact of capital investments. EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA is not presented as an alternative measure of operating results or cash flows from operations, as determined in accordance with U.S. generally accepted accounting principles (GAAP).

EBITDA service margin is calculated as EBITDA divided by service revenues.

When discussing our segment results, EBITDA excludes equity in net income (loss) of affiliates, and depreciation and amortization from segment contribution. For our supplemental presentation of our combined domestic wireless operations (AT&T Mobility), EBITDA excludes depreciation and amortization from Operating Income.

These measures are used by management as a gauge of our success in acquiring, retaining and servicing subscribers because we believe these measures reflect AT&T's ability to generate and grow subscriber revenues while providing a high level of customer service in a cost-effective manner. Management also uses these measures as a method of comparing segment performance with that of many of its competitors. The financial and operating metrics which affect EBITDA include the key revenue and expense drivers for which segment managers are responsible and upon which we evaluate their performance.

We believe EBITDA Service Margin (EBITDA as a percentage of service revenues) to be a more relevant measure than EBITDA Margin (EBITDA as a percentage of total revenue) for our Consumer Mobility segment operating margin and our supplemental AT&T Mobility operating margin. For the periods covered by this report, we subsidized a portion of some of our wireless handset sales, which are recognized in the period in which we sell the handset. Management views this equipment subsidy as a cost to acquire or retain a subscriber, which is recovered through the ongoing service revenue that is generated by the subscriber. We also use wireless service revenues to calculate margin to facilitate comparison, both internally and externally with our wireless competitors, as they calculate their margins using wireless service revenues as well.

July 21, 2016

There are material limitations to using these non-GAAP financial measures. EBITDA, EBITDA margin and EBITDA service margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies. Furthermore, these performance measures do not take into account certain significant items, including depreciation and amortization, interest expense, tax expense and equity in net income (loss) of affiliates. Management compensates for these limitations by carefully analyzing how its competitors present performance measures that are similar in nature to EBITDA as we present it, and considering the economic effect of the excluded expense items independently as well as in connection with its analysis of net income as calculated in accordance with GAAP. EBITDA, EBITDA margin and EBITDA service margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.

Adjusting Items

Adjusting items include revenues and costs we consider nonoperational in nature, such as items arising from asset acquisitions or dispositions. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often significant impact on our fourth-quarter results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses.) As a result, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income.

The tax impact of adjusting items is calculated using the effective tax rate during the quarter except for (1) adjustments related to Mexico operations, which are taxed at the 30% marginal rate for Mexico and (2) adjustments that, given their magnitude can drive a change in the effective tax rate, reflect the actual tax expense or combined marginal rate of approximately 38%.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS are non-GAAP financial measures calculated by excluding from operating revenues, operating expenses and income tax expense certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transaction costs. Management believes that these measures provide relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends.

Adjusted Operating Revenues, Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. AT&T's calculation of Adjusted items, as presented, may differ from similarly titled measures reported by other companies.

July 21, 2016

Entertainment Group Segment Adjusted Operating Revenues includes the external operating revenues from DIRECTV U.S. as reported in the DIRECTV Form 10-Q/A dated June 30, 2015 adjusted to (1) include operations reported in other DIRECTV operating segments that AT&T has chosen to manage in our Entertainment Group segment, (2) conform DIRECTV's practice of recognizing revenue to be received under contractual commitments on a straight line basis over the minimum contract period to AT&T's method of limiting the revenue recognized to the monthly amounts billed and (3) eliminate intercompany transactions from DIRECTV U.S. and the Entertainment Group segment. Adjusting Entertainment Group segment operating revenues provides for comparability between periods.

Net Debt to Adjusted EBITDA Discussion

Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and management believes these measures provide relevant and useful information to investors and other users of our financial data. The Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by annualized Net Debt Adjusted EBITDA. Annualized Net Debt Adjusted EBITDA excludes severance-related adjustments as described in our credit agreements. Net Debt is calculated by subtracting cash and cash equivalents and certificates of deposit and time deposits that are greater than 90 days, from the sum of debt maturing within one year and long-term debt. Annualized Adjusted EBITDA is calculated by annualizing the year-to-date Net Debt Adjusted EBITDA.

For more information, contact:

Name: Fletcher Cook

AT&T Corporate Communications

Phone: (214) 757-7629

Email: fletcher.cook@att.com

Name: McCall Butler

AT&T Corporate Communications

Phone: (917) 209-5792

Email: butlerm@att.com

July 21, 2016

EX-99.2 3 ex99_2.htm AT&T INC. SELECTED FINANCIAL STATEMENTS AND OPERATING DATA

Financial Data

AT&T Inc.
Consolidated Statements of Income
Dollars in millions except per share amounts
Unaudited	Three Months Ended									Six Months Ended
	6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg

Operating Revenues
Service	$	37,142		$	29,541			25.7	%	$	74,243		$	58,503			26.9	%
Equipment		3,378			3,474			-2.8	%		6,812			7,088			-3.9	%
Total Operating Revenues		40,520			33,015			22.7	%		81,055			65,591			23.6	%

Operating Expenses
Cost of services and sales
Equipment		4,260			4,353			-2.1	%		8,635			8,899			-3.0	%
Broadcast, programming and operations		4,701			1,148			-			9,330			2,270			-
Other cost of services (exclusive of depreciation and amortization shown separately below)		9,514			9,578			-0.7	%		18,910			18,390			2.8	%
Selling, general and administrative		8,909			7,467			19.3	%		17,350			15,428			12.5	%
Depreciation and amortization		6,576			4,696			40.0	%		13,139			9,274			41.7	%
Total Operating Expenses		33,960			27,242			24.7	%		67,364			54,261			24.1	%
Operating Income		6,560			5,773			13.6	%		13,691			11,330			20.8	%
Interest Expense		1,258			932			35.0	%		2,465			1,831			34.6	%
Equity in Net Income of Affiliates		28			33			-15.2	%		41			33			24.2	%
Other Income (Expense) - Net		91			48			89.6	%		161			118			36.4	%
Income Before Income Taxes		5,421			4,922			10.1	%		11,428			9,650			18.4	%
Income Tax Expense		1,906			1,738			9.7	%		4,028			3,127			28.8	%
Net Income		3,515			3,184			10.4	%		7,400			6,523			13.4	%
Less: Net Income Attributable to Noncontrolling Interest		(107	)		(102	)		-4.9	%		(189	)		(178	)		-6.2	%
Net Income Attributable to AT&T	$	3,408		$	3,082			10.6	%	$	7,211		$	6,345			13.6	%


Basic Earnings Per Share Attributable to AT&T	$	0.55		$	0.59			-6.8	%	$	1.17		$	1.22			-4.1	%
Weighted Average Common Shares Outstanding (000,000)		6,174			5,204			18.6	%		6,173			5,204			18.6	%

Diluted Earnings Per Share Attributable to AT&T	$	0.55		$	0.59			-6.8	%	$	1.17		$	1.22			-4.1	%
Weighted Average Common Shares Outstanding with Dilution (000,000)		6,195			5,220			18.7	%		6,193			5,220			18.6	%

Financial Data

AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended									Six Months Ended
	6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg
Business Solutions
Segment Operating Revenues
Wireless service	$	7,963		$	7,756			2.7	%	$	15,818		$	15,271			3.6	%
Fixed strategic services		2,797			2,580			8.4	%		5,559			5,099			9.0	%
Legacy voice and data services		4,158			4,681			-11.2	%		8,521			9,465			-10.0	%
Other service and equipment		886			854			3.7	%		1,744			1,700			2.6	%
Wireless equipment		1,775			1,793			-1.0	%		3,546			3,686			-3.8	%
Total Segment Operating Revenues		17,579			17,664			-0.5	%		35,188			35,221			-0.1	%

Segment Operating Expenses
Operations and support expenses		10,857			10,972			-1.0	%		21,659			22,045			-1.8	%
Depreciation and amortization		2,521			2,460			2.5	%		5,029			4,802			4.7	%
Total Segment Operating Expenses		13,378			13,432			-0.4	%		26,688			26,847			-0.6	%
Segment Operating Income		4,201			4,232			-0.7	%		8,500			8,374			1.5	%
Equity in Net Income of Affiliates		-			-			-			-			-			-
Segment Contribution	$	4,201		$	4,232			-0.7	%	$	8,500		$	8,374			1.5	%

Segment Operating Income Margin		23.9	%		24.0	%					24.2	%		23.8	%

Entertainment Group
Segment Operating Revenues
Video entertainment	$	8,963		$	1,991			-		$	17,867		$	3,862			-
High-speed internet		1,867			1,623			15.0	%		3,670			3,176			15.6	%
Legacy voice and data services		1,244			1,516			-17.9	%		2,557			3,128			-18.3	%
Other service and equipment		637			652			-2.3	%		1,275			1,276			-0.1	%
Total Segment Operating Revenues		12,711			5,782			-			25,369			11,442			-

Segment Operating Expenses
Operations and support expenses		9,569			4,913			94.8	%		19,147			9,772			95.9	%
Depreciation and amortization		1,489			1,065			39.8	%		2,977			2,130			39.8	%
Total Segment Operating Expenses		11,058			5,978			85.0	%		22,124			11,902			85.9	%
Segment Operating Income (Loss)		1,653			(196	)		-			3,245			(460	)		-
Equity in Net Income (Loss) of Affiliates		(2	)		(12	)		83.3	%		1			(18	)		-
Segment Contribution	$	1,651		$	(208	)		-		$	3,246		$	(478	)		-

Segment Operating Income Margin		13.0	%		-3.4	%					12.8	%		-4.0	%

Financial Data

AT&T Inc.
Statements of Segment Income
Dollars in millions
Unaudited
	Three Months Ended									Six Months Ended
	6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg
Consumer Mobility
Segment Operating Revenues
Service	$	6,948		$	7,359			-5.6	%	$	13,891		$	14,656			-5.2	%
Equipment		1,238			1,396			-11.3	%		2,623			2,877			-8.8	%
Total Segment Operating Revenues		8,186			8,755			-6.5	%		16,514			17,533			-5.8	%

Segment Operating Expenses
Operations and support expenses		4,680			5,202			-10.0	%		9,592			10,743			-10.7	%
Depreciation and amortization		932			934			-0.2	%		1,854			1,936			-4.2	%
Total Segment Operating Expenses		5,612			6,136			-8.5	%		11,446			12,679			-9.7	%
Segment Operating Income		2,574			2,619			-1.7	%		5,068			4,854			4.4	%
Equity in Net Income of Affiliates		-			-			-			-			-			-
Segment Contribution	$	2,574		$	2,619			-1.7	%	$	5,068		$	4,854			4.4	%

Segment Operating Income Margin		31.4	%		29.9	%					30.7	%		27.7	%

International
Segment Operating Revenues
Video entertainment	$	1,222		$	-			-		$	2,352		$	-			-
Wireless service		489			444			10.1	%		944			659			43.2	%
Wireless equipment		117			47			-			199			68			-
Total Segment Operating Revenues		1,828			491			-			3,495			727			-

Segment Operating Expenses
Operations and support expenses		1,723			529			-			3,311			747			-
Depreciation and amortization		298			93			-			575			121			-
Total Segment Operating Expenses		2,021			622			-			3,886			868			-
Segment Operating Income (Loss)		(193	)		(131	)		-47.3	%		(391	)		(141	)		-
Equity in Net Income of Affiliates		9			-			-			23			-			-
Segment Contribution	$	(184	)	$	(131	)		-40.5	%	$	(368	)	$	(141	)		-

Segment Operating Income Margin		-10.6	%		-26.7	%					-11.2	%		-19.4	%

Financial Data

AT&T Inc.
Consolidated Balance Sheets
Dollars in millions
	6/30/16			12/31/15
	Unaudited

Assets
Current Assets
Cash and cash equivalents	$	7,208		$	5,121
Accounts receivable - net of allowances for doubtful accounts of $642 and $704		15,830			16,532
Prepaid expenses		1,197			1,072
Other current assets		11,770			13,267
Total current assets		36,005			35,992
Property, Plant and Equipment - Net		123,537			124,450
Goodwill		105,252			104,568
Licenses		94,098			93,093
Customer Lists and Relationships - Net		16,259			18,208
Other Intangible Assets - Net		9,107			9,409
Investments in Equity Affiliates		1,677			1,606
Other Assets		15,873			15,346
Total Assets	$	401,808		$	402,672

Liabilities and Stockholders' Equity
Current Liabilities
Debt maturing within one year	$	9,528		$	7,636
Accounts payable and accrued liabilities		26,746			30,372
Advanced billing and customer deposits		4,465			4,682
Accrued taxes		2,773			2,176
Dividends payable		2,953			2,950
Total current liabilities		46,465			47,816
Long-Term Debt		117,308			118,515
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		57,983			56,181
Postemployment benefit obligation		34,023			34,262
Other noncurrent liabilities		21,425			22,258
Total deferred credits and other noncurrent liabilities		113,431			112,701
Stockholders' Equity
Common stock		6,495			6,495
Additional paid-in capital		89,486			89,763
Retained earnings		34,950			33,671
Treasury stock		(12,343	)		(12,592	)
Accumulated other comprehensive income		5,047			5,334
Noncontrolling interest		969			969
Total stockholders' equity		124,604			123,640
Total Liabilities and Stockholders' Equity	$	401,808		$	402,672

Financial Data

AT&T Inc.
Consolidated Statements of Cash Flows
Dollars in millions
(Unaudited)
	Six months ended June 30,
	2016			2015

Operating Activities
Net income	$	7,400		$	6,523
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,139			9,274
Undistributed earnings from investments in equity affiliates		(22	)		(23	)
Provision for uncollectible accounts		705			535
Deferred income tax expense		1,767			1,244
Net gain from sale of investments, net of impairments		(85	)		(50	)
Changes in operating assets and liabilities:
Accounts receivable		543			434
Other current assets		1,069			732
Accounts payable and accrued liabilities		(3,059	)		(1,125	)
Retirement benefit funding		(280	)		(455	)
Other - net		(2,970	)		(1,191	)
Total adjustments		10,807			9,375
Net Cash Provided by Operating Activities		18,207			15,898

Investing Activities
Capital expenditures:
Purchase of property and equipment		(9,702	)		(8,328	)
Interest during construction		(437	)		(339	)
Acquisitions, net of cash acquired		(485	)		(20,954	)
Dispositions		107			72
Sales of securities, net		500			1,890
Other		-			(1	)
Net Cash Used in Investing Activities		(10,017	)		(27,660	)

Financing Activities
Issuance of long-term debt		10,140			33,958
Repayment of long-term debt		(9,129	)		(2,919	)
Purchase of treasury stock		(197	)		-
Issuance of treasury stock		119			20
Dividends paid		(5,899	)		(4,873	)
Other		(1,137	)		(2,071	)
Net Cash (Used in) Provided by Financing Activities		(6,103	)		24,115
Net increase in cash and cash equivalents		2,087			12,353
Cash and cash equivalents beginning of year		5,121			8,603
Cash and Cash Equivalents End of Period	$	7,208		$	20,956

Financial Data

AT&T Inc.
Supplementary Operating and Financial Data
Dollars in millions except per share amounts, subscribers and connections in (000s)
Unaudited		Three Months Ended									Six Months Ended
		6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg
Business Solutions Wireless Subscribers												77,545			69,178			12.1	%
	Postpaid											49,432			46,697			5.9	%
	Branded Subscribers											49,432			46,697			5.9	%
	Reseller											52			19			-
	Connected Devices											28,061			22,462			24.9	%

Business Solutions Wireless Net Adds			1,371			1,769			-22.5	%		3,060			3,093			-1.1	%
	Postpaid		185			288			-35.8	%		318			585			-45.6	%
	Branded Net Adds		185			288			-35.8	%		318			585			-45.6	%
	Reseller		(13	)		3			-			(35	)		6			-
	Connected Devices		1,199			1,478			-18.9	%		2,777			2,502			11.0	%

Business Wireless Postpaid Churn			0.91	%		0.91	%		-			0.97	%		0.90	%	7		BP

Consumer Mobility Subscribers												54,260			54,724			-0.8	%
	Postpaid											27,862			29,844			-6.6	%
	Prepaid											12,633			10,438			21.0	%
	Branded Subscribers											40,495			40,282			0.5	%
	Reseller											12,869			13,487			-4.6	%
	Connected Devices											896			955			-6.2	%

Consumer Mobility Net Adds			(10	)		325			-			82			219			-62.6	%
	Postpaid		72			122			-41.0	%		68			266			-74.4	%
	Prepaid		365			331			10.3	%		865			429			-
	Branded Net Adds		437			453			-3.5	%		933			695			34.2	%
	Reseller		(446	)		(98	)		-			(824	)		(367	)		-
	Connected Devices		(1	)		(30	)		96.7	%		(27	)		(109	)		75.2	%

Consumer Mobility Postpaid Churn			1.09	%		1.16	%	-7		BP		1.16	%		1.18	%	-2		BP
Total Consumer Mobility Churn			1.96	%		1.86	%	10		BP		2.04	%		1.95	%	9		BP

Entertainment Group												51,291			33,686			52.3	%
Video Connections												25,295			5,946			-
	Satellite											20,454			-			-
	U-verse											4,841			5,946			-18.6	%

Video Net Adds			(49	)		(23	)		-			(103	)		26			-
	Satellite		342			-			-			670			-			-
	U-verse		(391	)		(23	)		-			(773	)		26			-

Broadband Connections												14,181			14,428			-1.7	%
	IP											12,596			12,013			4.9	%
	DSL											1,585			2,415			-34.4	%

Broadband Net Adds			(110	)		(107	)		-2.8	%		(105	)		(14	)		-
	IP		54			217			-75.1	%		240			630			-61.9	%
	DSL		(164	)		(324	)		49.4	%		(345	)		(644	)		46.4	%

Total Wireline Voice Connections												11,815			13,312			-11.2	%

AT&T International
Mexican Wireless Subscribers and Connections
	Subscribers											9,955			8,550			16.4	%
	Net Adds		742			(170	)		-			1,271			(458	)		-
	Total Churn		5.83	%		6.81	%	-98		BP		5.65	%		7.36	%	-171		BP

Video Subscribers and Connections
	Latin America Video Subscribers											12,523			-			-
	Pan Americana											7,175			-			-
	Brazil											5,348			-			-

Video Subscribers and Connections Net Adds
	Latin America Video Subscribers		87			-			-			14			-			-
	Pan Americana		81			-			-			109			-			-
	Brazil		6			-			-			(95	)		-			-

Financial Data

AT&T Inc.
Supplementary Operating and Financial Data
Dollars in millions except per share amounts, subscribers and connections in (000s)
Unaudited		Three Months Ended									Six Months Ended
		6/30/2016			6/30/2015			% Chg			6/30/2016			6/30/2015			% Chg
AT&T Total Subscribers and Connections
AT&T Mobility Subscribers												131,805			123,902			6.4	%
	Postpaid											77,295			76,541			1.0	%
	Prepaid											12,633			10,438			21.0	%
	Branded Subscribers											89,928			86,979			3.4	%
	Reseller											12,920			13,506			-4.3	%
	Connected Devices											28,957			23,417			23.7	%

AT&T Mobility Net Adds			1,361			2,094			-35.0	%		3,142			3,312			-5.1	%
	Postpaid		257			410			-37.3	%		386			851			-54.6	%
	Prepaid		365			331			10.3	%		865			429			-
	Branded Net Adds		622			741			-16.1	%		1,251			1,280			-2.3	%
	Reseller		(459	)		(95	)		-			(859	)		(361	)		-
	Connected Devices		1,198			1,448			-17.3	%		2,750			2,393			14.9	%
M&A Activity, Partitioned Customers and Other Adjs.			(1	)		36			-			23			36			-36.1	%

AT&T Mobility Churn
Postpaid Churn			0.97	%		1.01	%	-4		BP		1.04	%		1.01	%	3		BP
Total Churn			1.35	%		1.31	%	4		BP		1.38	%		1.36	%	2		BP

Other
Domestic Licensed POPs (000,000)												322			321			0.3	%

Total Video Subscribers												37,846			5,971			-
	Domestic											25,323			5,971			-
	Pan Americana											7,175			-			-
	Brazil											5,348			-			-

Total Video Net Adds			38			(22	)		-			(87	)		28			-
	Domestic		(49	)		(22	)		-			(101	)		28			-
	Pan Americana		81			-			-			109			-			-
	Brazil		6			-			-			(95	)		-			-

Total Broadband Connections												15,641			15,961			-2.0	%
	IP											13,544			12,885			5.1	%
	DSL											2,097			3,076			-31.8	%

Broadband Net Adds			(123	)		(136	)		9.6	%		(137	)		(67	)		-
	IP		74			241			-69.3	%		276			680			-59.4	%
	DSL		(197	)		(377	)		47.7	%		(413	)		(747	)		44.7	%

Total Wireline Voice Connections												20,877			23,497			-11.2	%

Total Wireless Subscribers												141,760			132,452			7.0	%
Domestic Wireless Subscribers												131,805			123,902			6.4	%
Mexican Wireless Subscribers												9,955			8,550			16.4	%

Branded Subscribers												99,557			95,049			4.7	%
Branded Net Adds			1,401			741			89.1	%		2,596			1,280			-

AT&T Inc.
Capital expenditures:
	Purchase of property and equipment	$	5,251		$	4,480			17.2	%	$	9,702		$	8,328			16.5	%
	Interest during construction	$	219		$	216			1.4	%	$	437		$	339			28.9	%
Dividends Declared per Share		$	0.48		$	0.47			2.1	%	$	0.96		$	0.94			2.1	%
End of Period Common Shares Outstanding (000,000)												6,152			5,193			18.5	%
Debt Ratio^1,2												50.4	%		55.5	%	-510		BP
Total Employees												277,200			250,730			10.6	%

¹	Prior year amounts restated to conform to current period reporting methodology.
²	Total long-term debt plus debt maturing within one year divided by total debt plus total stockholders' equity.
	Note: For the end of 2Q16, total switched access lines were 15,285.
		Business Solutions and Consumer Mobility may not total to AT&T Mobility due to rounding.

Financial Data

AT&T Inc.
Segment Supplemental - QTD
Dollars in millions
Unaudited

For the three months ended June 30, 2016
	Revenues		Operations and Support Expenses		EBITDA			Depreciation and Amortization		Operating Income (Loss)			Equity in Net Income (Loss) of Affiliates			Segment Contribution
Business Solutions	$	17,579	$	10,857	$	6,722		$	2,521	$	4,201		$	-		$	4,201
Entertainment Group		12,711		9,569		3,142			1,489		1,653			(2	)		1,651
Consumer Mobility		8,186		4,680		3,506			932		2,574			-			2,574
International		1,828		1,723		105			298		(193	)		9			(184	)
Segment Total		40,304		26,829		13,475			5,240		8,235		$	7		$	8,242
Corporate and Other		216		293		(77	)		20		(97	)
Acquisition-related items		-		233		(233	)		1,316		(1,549	)
Certain Significant items		-		29		(29	)		-		(29	)
AT&T Inc.	$	40,520	$	27,384	$	13,136		$	6,576	$	6,560

For the three months ended June 30, 2015
	Revenues		Operations and Support Expenses		EBITDA			Depreciation and Amortization		Operating Income (Loss)			Equity in Net Income (Loss) of Affiliates			Segment Contribution
Business Solutions	$	17,664	$	10,972	$	6,692		$	2,460	$	4,232		$	-		$	4,232
Entertainment Group		5,782		4,913		869			1,065		(196	)		(12	)		(208	)
Consumer Mobility		8,755		5,202		3,553			934		2,619			-			2,619
International		491		529		(38	)		93		(131	)		-			(131	)
Segment Total		32,692		21,616		11,076			4,552		6,524		$	(12	)	$	6,512
Corporate and Other		323		236		87			24		63
Acquisition-related items		-		694		(694	)		120		(814	)
Certain Significant items		-		-		-			-		-
AT&T Inc.	$	33,015	$	22,546	$	10,469		$	4,696	$	5,773

Financial Data

AT&T Inc.
Segment Supplemental - YTD
Dollars in millions
Unaudited

For the six months ended June 30, 2016
	Revenues		Operations and Support Expenses			EBITDA			Depreciation and Amortization		Operating Income (Loss)			Equity in Net Income of Affiliates			Segment Contribution
Business Solutions	$	35,188	$	21,659		$	13,529		$	5,029	$	8,500		$	-		$	8,500
Entertainment Group		25,369		19,147			6,222			2,977		3,245			1			3,246
Consumer Mobility		16,514		9,592			6,922			1,854		5,068			-			5,068
International		3,495		3,311			184			575		(391	)		23			(368	)
Segment Total		80,566		53,709			26,857			10,435		16,422		$	24		$	16,446
Corporate and Other		489		670			(181	)		37		(218	)
Acquisition-related items		-		528			(528	)		2,667		(3,195	)
Certain Significant items		-		(682	)		682			-		682
AT&T Inc.	$	81,055	$	54,225		$	26,830		$	13,139	$	13,691

For the six months ended June 30, 2015
	Revenues		Operations and Support Expenses			EBITDA			Depreciation and Amortization		Operating Income (Loss)			Equity in Net Income (Loss) of Affiliates			Segment Contribution
Business Solutions	$	35,221	$	22,045		$	13,176		$	4,802	$	8,374		$	-		$	8,374
Entertainment Group		11,442		9,772			1,670			2,130		(460	)		(18	)		(478	)
Consumer Mobility		17,533		10,743			6,790			1,936		4,854			-			4,854
International		727		747			(20	)		121		(141	)		-			(141	)
Segment Total		64,923		43,307			21,616			8,989		12,627		$	(18	)	$	12,609
Corporate and Other		668		470			198			44		154
Acquisition-related items		-		993			(993	)		241		(1,234	)
Certain Significant items		-		217			(217	)		-		(217	)
AT&T Inc.	$	65,591	$	44,987		$	20,604		$	9,274	$	11,330

Financial Data

AT&T Inc.
Supplemental AT&T Mobility Results
Dollars in millions
Unaudited
	Three Months Ended											Six Months Ended
	6/30/2016				6/30/2015				% Chg			6/30/2016				6/30/2015				% Chg
AT&T Mobility
Operating Revenues
Service		$	14,912			$	15,115			-1.3	%		$	29,710			$	29,927			-0.7	%
Equipment			3,013				3,189			-5.5	%			6,169				6,563			-6.0	%
Total Operating Revenues			17,925				18,304			-2.1	%			35,879				36,490			-1.7	%

Operating Expenses
Operations and support expenses			10,502				10,973			-4.3	%			21,126				22,445			-5.9	%
Depreciation and amortization			2,081				2,031			2.5	%			4,137				4,036			2.5	%
Total Operating Expenses			12,583				13,004			-3.2	%			25,263				26,481			-4.6	%
Operating Income		$	5,342			$	5,300			0.8	%		$	10,616			$	10,009			6.1	%

Operating Income Margin			29.8	%			29.0	%						29.6	%			27.4	%

EX-99.3 4 ex99_3.htm DISCUSSION AND RECONCILIATION OF NON-GAAP MEASURES

Exhibit 99.3

Discussion and Reconciliation of Non-GAAP Measures

We believe the following measures are relevant and useful information to investors as they are part of AT&T's internal management reporting and planning processes and are important metrics that management uses to evaluate the operating performance of AT&T and its segments. Management also uses these measures as a method of comparing performance with that of many of our competitors.

Certain amounts have been conformed to the current period's presentation, including our change in accounting to capitalize customer set-up and installation costs and amortize them over the expected economic life of the customer relationship.

Free Cash Flow

Free Cash Flow and Free Cash Flow Dividend Payout Ratio
Dollars in millions	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Net cash provided by operating activities	$	10,307		$	9,160		$	18,207		$	15,898
Less: Capital expenditures		(5,470	)		(4,696	)		(10,139	)		(8,667	)
Free Cash Flow		4,837			4,464			8,068			7,231

Less: Dividends paid		(2,952	)		(2,439	)		(5,899	)		(4,873	)
Free Cash Flow after Dividends	$	1,885		$	2,025		$	2,169		$	2,358
Free Cash Flow Dividend Payout Ratio		61.0	%		54.6	%		73.1	%		67.4	%

Capital Investment

Capital Investment
Dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Capital expenditures	$	5,470	$	4,696	$	10,139	$	8,667
Vendor financing		95		-		138		-
Capital Investment	$	5,565	$	4,696	$	10,277	$	8,667

EBITDA

EBITDA service margin is calculated as EBITDA divided by service revenues.

EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Net Income	$	3,515		$	3,184		$	7,400		$	6,523
Additions:
Income Tax Expense		1,906			1,738			4,028			3,127
Interest Expense		1,258			932			2,465			1,831
Equity in Net (Income) of Affiliates		(28	)		(33	)		(41	)		(33	)
Other (Income) Expense – Net		(91	)		(48	)		(161	)		(118	)
Depreciation and amortization		6,576			4,696			13,139			9,274
EBITDA		13,136			10,469			26,830			20,604

Total Operating Revenues		40,520			33,015			81,055			65,591
Service Revenues		37,142			29,541			74,243			58,503

EBITDA Margin		32.4	%		31.7	%		33.1	%		31.4	%
EBITDA Service Margin		35.4	%		35.4	%		36.1	%		35.2	%

Segment EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Business Solutions Segment
Segment Contribution	$	4,201		$	4,232		$	8,500		$	8,374
Additions:
Equity in Net (Income) Loss of Affiliates		-			-			-			-
Depreciation and amortization		2,521			2,460			5,029			4,802
EBITDA		6,722			6,692			13,529			13,176

Total Segment Operating Revenues		17,579			17,664			35,188			35,221

Segment Operating Income Margin		23.9	%		24.0	%		24.2	%		23.8	%
EBITDA Margin		38.2	%		37.9	%		38.4	%		37.4	%

Entertainment Group Segment
Segment Contribution	$	1,651		$	(208	)	$	3,246		$	(478	)
Additions:
Equity in Net (Income) Loss of Affiliates		2			12			(1	)		18
Depreciation and amortization		1,489			1,065			2,977			2,130
EBITDA		3,142			869			6,222			1,670

Total Segment Operating Revenues		12,711			5,782			25,369			11,442

Segment Operating Income Margin		13.0	%		-3.4	%		12.8	%		-4.0	%
EBITDA Margin		24.7	%		15.0	%		24.5	%		14.6	%

Consumer Mobility Segment
Segment Contribution	$	2,574		$	2,619		$	5,068		$	4,854
Additions:
Equity in Net (Income) Loss of Affiliates		-			-			-			-
Depreciation and amortization		932			934			1,854			1,936
EBITDA		3,506			3,553			6,922			6,790

Total Segment Operating Revenues		8,186			8,755			16,514			17,533
Service Revenues		6,948			7,359			13,891			14,656

Segment Operating Income Margin		31.4	%		29.9	%		30.7	%		27.7	%
EBITDA Margin		42.8	%		40.6	%		41.9	%		38.7	%
EBITDA Service Margin		50.5	%		48.3	%		49.8	%		46.3	%

International Segment
Segment Contribution	$	(184	)	$	(131	)	$	(368	)	$	(141	)
Additions:
Equity in Net (Income) Loss of Affiliates		(9	)		-			(23	)		-
Depreciation and amortization		298			93			575			121
EBITDA		105			(38	)		184			(20	)

Total Segment Operating Revenues		1,828			491			3,495			727

Segment Operating Income Margin		-10.6	%		-26.7	%		-11.2	%		-19.4	%
EBITDA Margin		5.7	%		-7.7	%		5.3	%		-2.8	%

Supplemental AT&T Mobility EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
AT&T Mobility
Operating Income	$	5,342		$	5,300		$	10,616		$	10,009
Add: Depreciation and amortization		2,081			2,031			4,137			4,036
EBITDA		7,423			7,331			14,753			14,045

Total Operating Revenues		17,925			18,304			35,879			36,490
Service Revenues		14,912			15,115			29,710			29,927

Operating Income Margin		29.8	%		29.0	%		29.6	%		27.4	%
EBITDA Margin		41.4	%		40.1	%		41.1	%		38.5	%
EBITDA Service Margin		49.8	%		48.5	%		49.7	%		46.9	%

Adjusting Items

Adjusting items include revenues and costs we consider nonoperational in nature, such as items arising from asset acquisitions or dispositions. We also adjust for net actuarial gains or losses associated with our pension and postemployment benefit plans due to the often significant impact on our fourth-quarter results (we immediately recognize this gain or loss in the income statement, pursuant to our accounting policy for the recognition of actuarial gains and losses.) Consequently, our adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income.

Adjusting Items
Dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016			2015
Operating Expenses
DIRECTV and other video merger integration costs	$	133	$	92	$	306		$	164
Mexico merger integration costs		66		24		147			41
Wireless merger integration costs		33		215		75			424
Leap network decommissioning		-		364		-			364
Employee separation costs		29		-		54			217
Gain on transfer of wireless spectrum		-		-		(736	)		-
Adjustments to Operations and Support Expenses		261		695		(154	)		1,210
Amortization of intangible assets		1,316		63		2,667			113
Adjustments to Operating Expenses		1,577		758		2,513			1,323
Other
DIRECTV-related interest expense and exchange fees¹		-		104		16			104
(Gain) loss on sale of investments²		-		-		4			-
Adjustments to Income Before Income Taxes		1,577		862		2,533			1,427
Tax impact of adjustments		550		301		881			497
Tax-related items		-		-		-			262
Adjustments to Net Income	$	1,027	$	561	$	1,652		$	668

¹ Includes interest expense incurred on the debt issued prior to the close of the DIRECTV transaction and fees associated with the exchange of DIRECTV notes for AT&T notes.

² Residual effect of previously adjusted item.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA Service Margin
Dollars in millions	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Operating Income	$	6,560		$	5,773		$	13,691		$	11,330
Adjustments to Operating Expenses		1,577			758			2,513			1,323
Adjusted Operating Income		8,137			6,531			16,204			12,653

EBITDA		13,136			10,469			26,830			20,604
Adjustments to Operations and Support Expenses		261			695			(154	)		1,210
Adjusted EBITDA		13,397			11,164			26,676			21,814

Total Operating Revenues		40,520			33,015			81,055			65,591
Service Revenues		37,142			29,541			74,243			58,503

Operating Income Margin		16.2	%		17.5	%		16.9	%		17.3	%
Adjusted Operating Income Margin		20.1	%		19.8	%		20.0	%		19.3	%
Adjusted EBITDA Margin		33.1	%		33.8	%		32.9	%		33.3	%
Adjusted EBITDA Service Margin		36.1	%		37.8	%		35.9	%		37.3	%

Adjusted Diluted EPS
	Three Months Ended June 30,					Six Months Ended June 30,
	2016			2015		2016			2015
Diluted Earnings Per Share (EPS)	$	0.55		$	0.59	$	1.17		$	1.22
Amortization of intangible assets		0.14			0.01		0.28			0.01
Merger integration and other costs ¹		0.03			0.10		0.06			0.16
Gain on transfer of wireless spectrum		-			-		(0.08	)		-
Tax-related items		-			-		-			(0.05	)
Adjusted EPS	$	0.72		$	0.70	$	1.43		$	1.34
Year-over-year growth – Adjusted		2.9	%				6.7	%
Weighted Average Common Shares Outstanding with Dilution (000,000)		6,195			5,220		6,193			5,220

¹ Includes combined merger and integration costs, Leap network decommissioning, DIRECTV-related interest expense and exchange fees, employee separation charges and other costs.

Entertainment Group Adjusted Operating Revenues
Dollars in millions	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Segment Operating Revenues	$	12,711		$	5,782		$	25,369		$	11,442
DIRECTV Operating Revenues					6,708						13,164
Adjustments:
Other DIRECTV operations					94						182
Revenue recognition					99						194
Intercompany eliminations					(18	)					(34	)
Adjusted Segment Operating Revenues	$	12,711		$	12,665		$	25,369		$	24,948
Year-over-year growth – Adjusted		0.4	%					1.7	%

Net Debt to Adjusted EBITDA Discussion

Net Debt to Adjusted EBITDA
Dollars in millions
	Three Months Ended
	Mar. 31, 2016			Jun. 30, 2016			YTD 2016
Adjusted EBITDA	$	13,279		$	13,397		$	26,676
Add back severance		(25	)		(29	)		(54	)
Net Debt Adjusted EBITDA		13,254			13,368			26,622
Annualized Net Debt Adjusted EBITDA								53,244
End-of-period current debt								9,528
End-of-period long-term debt								117,308
Total End-of-Period Debt								126,836
Less Cash and Cash Equivalents								7,208
Net Debt Balance								119,628
Annualized Net Debt to Adjusted EBITDA Ratio								2.25

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