AT&T(T) - 2024 Q2 - Quarterly Results

Consolidated Financial Statements Consolidated Statements of Income In the second quarter of 2024, AT&T's total operating revenues experienced a slight year-over-year decline of 0.4% to $29.8 billion, primarily due to a 5.4% drop in equipment revenue. Operating income fell by 10.1% to $5.8 billion, impacted by increased depreciation and amortization expenses. Consequently, net income attributable to common stock decreased by 20.1% to $3.5 billion, leading to a diluted EPS of $0.49, down from $0.61 in the same period last year Q2 and Six-Month Financial Performance (YoY) | Indicator | Q2 2024 | Q2 2023 | % Change | Six-Month 2024 | Six-Month 2023 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenues | $29,797 M | $29,917 M | (0.4)% | $59,825 M | $60,056 M | (0.4)% | | Operating Income | $5,760 M | $6,406 M | (10.1)% | $11,607 M | $12,408 M | (6.5)% | | Net Income Attributable to Common Stock | $3,546 M | $4,437 M | (20.1)% | $6,941 M | $8,613 M | (19.4)% | | Diluted EPS | $0.49 | $0.61 | (19.7)% | $0.96 | $1.19 | (19.3)% | Consolidated Balance Sheets As of June 30, 2024, AT&T's total assets were $398.0 billion, down from $407.1 billion at year-end 2023, reflecting a decrease in current assets, particularly cash and cash equivalents. Total liabilities also decreased to $278.7 billion from $289.6 billion, with a notable reduction in debt maturing within one year. Stockholders' equity saw a slight increase to $119.3 billion Balance Sheet Summary (as of June 30, 2024) | Account | Jun. 30, 2024 | Dec. 31, 2023 | | :--- | :--- | :--- | | Total Assets | $398,026 M | $407,060 M | | Cash and cash equivalents | $3,093 M | $6,722 M | | Total Liabilities | $278,679 M | $289,618 M | | Debt maturing within one year | $5,249 M | $9,477 M | | Long-Term Debt | $125,355 M | $127,854 M | | Total Stockholders' Equity | $119,347 M | $117,442 M | Consolidated Statements of Cash Flows For the first six months of 2024, net cash from operating activities remained stable at $16.6 billion. Net cash used in investing activities decreased to $7.0 billion from $9.2 billion YoY, mainly due to lower capital expenditures. However, net cash used in financing activities increased substantially to $13.3 billion, driven by debt repayments and consistent dividend payments, resulting in a net decrease in cash and cash equivalents of $3.6 billion Six-Month Cash Flow Summary (YoY) | Activity | Six-Month 2024 | Six-Month 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $16,640 M | $16,600 M | | Net Cash Used in Investing Activities | ($6,977 M) | ($9,241 M) | | Net Cash Used in Financing Activities | ($13,293 M) | ($1,530 M) | | Net (decrease) in cash | ($3,630 M) | $5,829 M | Consolidated Supplementary Data In the first half of 2024, AT&T's total capital expenditures decreased by 5.7% year-over-year to $8.1 billion. The company maintained its quarterly dividend at $0.2775 per common share. The debt ratio improved, declining by 300 basis points to 51.8%, and the total number of employees decreased by 6.8% compared to the previous year - Total Capital Expenditures for the first six months of 2024 were $8.1 billion, a 5.7% decrease from the same period in 2023[5] - The quarterly dividend declared per common share remained constant at $0.2775[5] - The company's debt ratio improved to 51.8%, a decrease of 300 basis points from 54.8% in the prior year period[5] Segment Results Communications Segment The Communications segment, which includes Mobility, Business Wireline, and Consumer Wireline, reported a 0.9% YoY revenue decline to $28.6 billion in Q2 2024. Segment operating income also fell by 2.4% to $7.0 billion. Growth in the Mobility and Consumer Wireline units was offset by a significant revenue and income drop in the Business Wireline unit - The Communications segment provides wireless and wireline telecom and broadband services to U.S. consumers and global businesses through its Mobility, Business Wireline, and Consumer Wireline units[7] Communications Segment Performance (Q2 2024 vs Q2 2023) | Reporting Unit | Operating Revenues | Operating Income | | :--- | :--- | :--- | | Mobility | $20,480 M (+0.8%) | $6,719 M (+1.6%) | | Business Wireline | $4,755 M (-9.9%) | $102 M (-74.2%) | | Consumer Wireline | $3,347 M (+3.0%) | $184 M (+9.5%) | | Total Segment | $28,582 M (-0.9%) | $7,005 M (-2.4%) | Mobility The Mobility unit delivered solid results in Q2 2024, with a 0.8% YoY revenue increase to $20.5 billion, driven by a 3.4% growth in service revenue. Operating income rose 1.6% to $6.7 billion. The unit achieved strong subscriber growth with 419,000 postpaid phone net additions and improved customer loyalty, as evidenced by a reduction in postpaid phone-only churn to 0.70% Mobility Financial Highlights (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Service Revenue | $16,277 M | $15,745 M | +3.4% | | Equipment Revenue | $4,203 M | $4,570 M | (8.0)% | | Total Operating Revenues | $20,480 M | $20,315 M | +0.8% | | Operating Income | $6,719 M | $6,613 M | +1.6% | Mobility Subscriber Metrics (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Postpaid Phone Net Additions | 419,000 | 326,000 | +28.5% | | Postpaid Phone-Only Churn | 0.70% | 0.79% | (9) BP | Business Wireline The Business Wireline unit faced significant challenges in Q2 2024, with revenues declining 9.9% YoY to $4.8 billion. This was primarily driven by a 10.6% drop in service revenue. Operating income saw a steep decline of 74.2% to $102 million, and the operating income margin contracted sharply by 540 basis points to 2.1% Business Wireline Financials (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Operating Revenues | $4,755 M | $5,279 M | (9.9)% | | Operating Income | $102 M | $396 M | (74.2)% | | Operating Income Margin | 2.1% | 7.5% | (540) BP | Consumer Wireline Consumer Wireline demonstrated strong growth in Q2 2024, with revenues up 3.0% YoY to $3.3 billion, fueled by a 7.0% increase in broadband revenue. Operating income grew 9.5% to $184 million. The unit continued its successful fiber expansion, adding 239,000 fiber broadband subscribers and increasing total fiber connections by 13.7% YoY to nearly 8.8 million Consumer Wireline Financials (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Broadband Revenue | $2,741 M | $2,561 M | +7.0% | | Total Operating Revenues | $3,347 M | $3,251 M | +3.0% | | Operating Income | $184 M | $168 M | +9.5% | - Fiber broadband net additions were 239,000 in Q2 2024, bringing total fiber connections to 8,798,000, a 13.7% increase year-over-year[15] Latin America Segment The Latin America segment, focused on wireless services in Mexico, showed significant improvement in Q2 2024. Revenues grew by 14.1% YoY to $1.1 billion, driven by increases in both service and equipment sales. The segment achieved profitability, posting an operating income of $6 million, a substantial turnaround from the $39 million loss in Q2 2023. Total wireless subscribers in Mexico increased by 4.4% to 22.6 million Latin America (Mexico) Financials (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Segment Operating Revenues | $1,103 M | $967 M | +14.1% | | Operating Income (Loss) | $6 M | ($39 M) | N/A | | Operating Income Margin | 0.5% | (4.0)% | +450 BP | - Total wireless subscribers in Mexico grew by 4.4% year-over-year to 22.6 million, with postpaid net additions more than doubling to 142,000[17] Supplemental Segment Reconciliation Q2 2024 vs. Q2 2023 Reconciliation The Q2 2024 reconciliation shows that the combined operating income from the Communications and Latin America segments was $7.01 billion. After accounting for $1.25 billion in net costs from 'Corporate and Other' activities, the total consolidated operating income for AT&T Inc. was $5.76 billion. This is a decrease from the $6.41 billion consolidated operating income reported in Q2 2023 Q2 2024 Segment to Consolidated Operating Income Reconciliation | Item | Revenues | EBITDA | Operating Income | | :--- | :--- | :--- | :--- | | Segment Total | $29,685 M | $11,959 M | $7,011 M | | Corporate and Other | $112 M | ($1,127 M) | ($1,251 M) | | AT&T Inc. Total | $29,797 M | $10,832 M | $5,760 M | Q2 2023 Segment to Consolidated Operating Income Reconciliation | Item | Revenues | EBITDA | Operating Income | | :--- | :--- | :--- | :--- | | Segment Total | $29,812 M | $11,636 M | $7,138 M | | Corporate and Other | $105 M | ($555 M) | ($732 M) | | AT&T Inc. Total | $29,917 M | $11,081 M | $6,406 M | Six-Month 2024 vs. 2023 Reconciliation For the first six months of 2024, the total segment operating income was $13.76 billion. After deducting $2.15 billion in costs from 'Corporate and Other', the consolidated operating income for AT&T Inc. was $11.61 billion. This is lower than the $12.41 billion consolidated operating income from the same six-month period in 2023 Six-Month 2024 Segment to Consolidated Operating Income Reconciliation | Item | Revenues | EBITDA | Operating Income | | :--- | :--- | :--- | :--- | | Segment Total | $59,605 M | $23,614 M | $13,759 M | | Corporate and Other | $220 M | ($1,888 M) | ($2,152 M) | | AT&T Inc. Total | $59,825 M | $21,726 M | $11,607 M | Six-Month 2023 Segment to Consolidated Operating Income Reconciliation | Item | Revenues | EBITDA | Operating Income | | :--- | :--- | :--- | :--- | | Segment Total | $59,847 M | $22,813 M | $13,851 M | | Corporate and Other | $209 M | ($1,099 M) | ($1,443 M) | | AT&T Inc. Total | $60,056 M | $21,714 M | $12,408 M |