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AT&T Earnings Email

As you know, our big strategic goal for 2019 is growth. And in 2Q, that’s what you delivered – consolidated growth on the top and bottom lines. Not only that, all 3 reporting units – Mobility, Entertainment and Business Wireline – grew EBITDA margins. I congratulate each and every one of you on a great performance across the board.

Following are corporate results and business unit highlights.

AT&T Inc. Key Financial Results

		Free cash flow of $8.8 billion
		Consolidated revenues of $45.0 billion
		Adjusted earnings per share of $0.89

AT&T Communications Highlights

	*AT&T Business* AT&T Business has the best revenue trend we have seen in years. A model of consistency, Business Wireline again posted EBITDA in the $2.5B range with margins approaching 40%. A big contributor was strategic and managed services. These services grew by 6.7%, driven by core networking, voice and collaboration, cybersecurity and edge/cloud services. They now represent a $15B+ annualized revenue stream. FirstNet also continued to ramp up, now serving more than 700,000 connections with speeds faster than any commercial network.¹ And IoT connected 4 million new devices, up more than 35% compared to this quarter last year.

	*Mobility & Entertainment* Our Mobility business kept humming, increasing service revenue a healthy 2.4% and adding 355,000 phones. On the prepaid side, our Cricket brand had record low churn. In total, we added 283,000 prepaid phones. We also gained 318,000 A&T Fiber subscribers. That’s around 70,000 more than we added in 2Q 2018. In addition, during the quarter, we met the fiber build target we agreed to in acquiring DIRECTV. We will continue selling into our fiber-ready markets, helping to offset DSL losses. For video, we continue to focus on retaining profitable customers, resulting in fewer overall subscribers as lower value customers moved off of our TV platforms. This kept us on track to meet our commitment of stabilizing Entertainment Group EBITDA for the full year. You’ve probably seen the headlines, our company is standing up to the big TV broadcast network groups. We are in the middle of a historic shift where customers are watching the big networks less and they don’t want to pay for them. At the same time, the big TV networks are wanting us to pay more to deliver their content to customers. It’s an intense, ongoing public battle that we won’t stop fighting for our customers – and we want the world to know about it. As this model shifts, we continue to innovate. Project Osprey is a good example of that. This is the internal name for our effort to develop a premium entertainment experience over broadband. This summer, we will rebrand it AT&T TV and launch it in trial markets. Keep an eye on this one, as we are going to change the way people experience TV.

	*Technology & Operations* You don’t need to be a sports fan to realize how difficult it is to be a Triple Crown winner. But we have the privilege of working with one every day – our Technology & Operations team. AT&T has now won industry awards for fastest network, best network and most reliable network. This is a testament to exceptional work, from strategic planning to execution. In 2Q, we also held our lead with mobile 5G live in parts of 20 cities. By end of year, we plan to expand to parts of 9 more. And in June, our bid in the FCC’s Auction 102 won a large block of spectrum critical to continued leadership in 5G. As we transform our network, we also continue to make improvements to drive customer satisfaction. For example, we announced earlier this month that we will expand our robocall blocking service to millions of our mobile customers. While all this happened, we stepped up automation behind the scenes and helped reduce operating costs for the 17th consecutive quarter.

Thank you. You’ve embraced our Vision, putting us on the right path and closer to our goals. Keep your focus on growth, removing friction for customers and reducing costs throughout the business.

As you know, winning today requires whole new levels of speed, agility and efficiency. That’s why we’re transforming our business through innovative agreements, such as those recently announced with Microsoft and IBM. Both of these support our public cloud first policy, announced late last May.

You’re proving you can also drive results in the community. It hasn’t taken long for AT&T Believes℠ to hit cruising speed. It’s already in 18 cities, and your efforts have sparked the interest of business and political leaders. That includes the CEO of Microsoft. We’re exploring ways to work with that iconic company for social good.

Again, I appreciate your tremendous execution in 2Q. What you accomplished took courage and hard work, and I never take either for granted. My thanks and admiration to you all.

John Donovan
CEO – AT&T Communications

View more information on AT&T’s 2^nd Quarter Results.

¹ Based on AT&T analysis of Ookla^® Speedtest Intelligence^® data average download speeds for Q2 2019. Ookla trademarks used under license and reprinted with permission.

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AT&T Inc. Key Financial Results

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