v3.20.4

Segment Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Information

NOTE 4. SEGMENT INFORMATION

Our segments are comprised of strategic business units that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly. We analyze our segments based on segment operating contribution, which consists of operating income, excluding acquisition-related costs and other significant items (as discussed below), and equity in net income (loss) of affiliates for investments managed within each segment. We have three reportable segments: (1) Communications, (2) WarnerMedia and (3) Latin America.

We have recast our segment results for all prior periods to include our prior Xandr segment within our WarnerMedia segment and to remove the Crunchyroll anime business that is classified as held-for-sale and removed from the WarnerMedia segment, instead including it in Corporate and Other.

We also evaluate segment and business unit performance based on EBITDA and/or EBITDA margin. EBITDA is defined as operating contribution excluding equity in net income (loss) of affiliates and depreciation and amortization. We believe EBITDA to be a relevant and useful measurement to our investors as it is part of our internal management reporting and planning processes and it is an important metric that management uses to evaluate operating performance. EBITDA does not

give effect to depreciation and amortization expenses incurred in operating contribution nor is it burdened by cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. EBITDA margin is EBITDA divided by total revenues.

The Communications segment provides wireless and wireline telecom, video and broadband services to consumers located in the U.S. and businesses globally. Our business strategies reflect bundled product offerings that cut across product lines and utilize shared assets. In December 2020, we changed our management strategy and reevaluated our domestic video business, allowing us to maximize value in our domestic video business and further accelerate our ability to innovate and execute in our fast-growing broadband and fiber business. In conjunction with the strategy change, we separated the former Entertainment Group into two business units, Video and Broadband, which includes 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 removed video operations from Business Wireline, combining all video operations in the Video business unit. This segment contains the following business units:

•Mobility provides nationwide wireless service and equipment.

•Video provides video, including over-the-top (OTT) services and also sells multiplatform advertising services as video revenues.

•Broadband provides internet, including broadband fiber, and legacy telephony voice communication services to residential customers.

•Business Wireline provides advanced IP-based services, as well as traditional voice and data services to business customers.

The WarnerMedia segment develops, produces and distributes feature films, television, gaming and other content in various physical and digital formats globally. Historical financial results of Eliminations & Other included in the WarnerMedia segment have been recast to include Xandr, previously a separate reportable segment, and to remove the Crunchyroll anime business that was classified as held-for-sale. This segment contains the following:

•Turner primarily operates multichannel basic television networks and digital properties. Turner also sells advertising on its networks and digital properties.

•Home Box Office consists of premium pay television and HBO Max domestically and premium pay, basic tier television internationally, and content licensing and home entertainment.

•Warner Bros. primarily 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.

•Eliminations & Other includes the Xandr advertising business, and also removes transactions between the Turner, Home Box Office and Warner Bros. business units, including internal sales of content to the HBO Max platform that began in the fourth quarter of 2019 (see Note 5).

The Latin America segment provides entertainment and wireless services outside of the U.S. This segment contains the following business units:

•Vrio provides video services primarily to residential customers using satellite technology in Latin America and the Caribbean.

•Mexico provides wireless service and equipment to customers in Mexico.

Corporate and Other reconciles our segment results to consolidated operating income and income before income taxes, and includes:

•Corporate, which consists of: (1) businesses no longer integral to our operations or which we no longer actively market, (2) corporate support functions, (3) impacts of corporate-wide decisions for which the individual operating segments are not being evaluated, and (4) the reclassification of the amortization of prior service credits, which we continue to report with segment operating expenses, to consolidated “Other income (expense) – net.”

•Acquisition-related items, which consists of items associated with the merger and integration of acquired businesses, including amortization of intangible assets.

•Certain significant items, which includes (1) employee separation charges associated with voluntary and/or strategic offers, (2) losses resulting from asset impairments and abandonments, and (3) other items for which the segments are not being evaluated.

•Eliminations and consolidations, which (1) removes transactions involving dealings between our segments, including channel distribution between WarnerMedia and Communications, and (2) includes adjustments for our reporting of the advertising business.

“Interest expense” and “Other income (expense) – net” are managed only on a total company basis and are, accordingly, reflected only in consolidated results.

For the year ended 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
Corporate1			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
1Includes $2,442 for the reclassification of prior service credit amortization.

For the year ended 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
Corporate1			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
1Includes $1,934 for the reclassification of prior service credit amortization.

For the year ended December 31, 2018
			Revenues						Operations and Support Expenses						EBITDA						Depreciation and Amortization						Operating Income (Loss)						Equity in Net Income (Loss) of Affiliates						Segment Contribution
Communications
Mobility			$	70,521					$	40,690					$	29,831					$	8,263					$	21,568					$	—					$	21,568
Video			33,363						29,334						4,029						2,698						1,331						—						1,331
Broadband			13,108						7,116						5,992						2,623						3,369						—						3,369
Business Wireline			26,729						16,181						10,548						4,708						5,840						—						5,840
Total Communications			143,721						93,321						50,400						18,292						32,108						—						32,108
WarnerMedia
Turner			6,979						3,794						3,185						131						3,054						54						3,108
Home Box Office			3,598						2,187						1,411						56						1,355						29						1,384
Warner Bros.			8,703						7,130						1,573						96						1,477						(28)						1,449
Eliminations and other			1,305						168						1,137						28						1,109						(30)						1,079
Total WarnerMedia			20,585						13,279						7,306						311						6,995						25						7,020
Latin America
Vrio			4,784						3,743						1,041						728						313						34						347
Mexico			2,868						3,415						(547)						510						(1,057)						—						(1,057)
Total Latin America			7,652						7,158						494						1,238						(744)						34						(710)
Segment Total			171,958						113,758						58,200						19,841						38,359						$	59					$	38,418
Corporate and Other
Corporate1			2,246						2,335						(89)						1,633						(1,722)
Acquisition-related items			(49)						1,185						(1,234)						6,931						(8,165)
Certain significant items			—						899						(899)						26						(925)
Eliminations and consolidations			(3,399)						(1,947)						(1,452)						(1)						(1,451)
AT&T Inc.			$	170,756					$	116,230					$	54,526					$	28,430					$	26,096
1Includes $1,753 for the reclassification of prior service credit amortization.

The following table is a reconciliation of operating income (loss) to “Income Before Income Taxes” reported in our consolidated statements of income:

			2020						2019						2018
Communications			$	30,521					$	32,230					$	32,108
WarnerMedia			8,210						10,659						7,020
Latin America			(729)						(635)						(710)
Segment Contribution			38,002						42,254						38,418
Reconciling Items:
Corporate and Other			(2,342)						(1,978)						(1,722)
Merger and integration items			(468)						(1,032)						(1,234)
Amortization of intangibles acquired			(8,012)						(7,460)						(6,931)
Impairments and abandonments			(18,880)						(1,458)						(46)
Gain on spectrum transaction1			900						—						—
Employee separation charges and benefit-related (gain) loss			(1,177)						(624)						(587)
Other noncash charges (credits), net			(13)						(43)						(111)
Natural disaster items			—						—						(181)
Segment equity in net income of affiliates			(42)						(188)						(59)
Eliminations and consolidations			(1,563)						(1,516)						(1,451)
AT&T Operating Income			6,405						27,955						26,096
Interest Expense			7,925						8,422						7,957
Equity in net income (loss) of affiliates			95						6						(48)
Other income (expense) - net			(1,431)						(1,071)						6,782
Income (Loss) Before Income Taxes			$	(2,856)					$	18,468					$	24,873
1 Included as a reduction of “Selling, general and administrative expenses” in the consolidated statements of income.

The following table sets forth revenues earned from customers, and property, plant and equipment located in different geographic areas:

			2020												2019												2018
			Revenues						Net Property, Plant & Equipment						Revenues						Net Property, Plant & Equipment						Revenues						Net Property, Plant & Equipment
United States			$	155,899					$	121,208					$	161,689					$	122,567					$	154,795					$	123,457
Europe			5,387						1,152						6,536						1,854						4,073						1,634
Mexico			2,862						3,530						3,198						3,648						3,100						3,467
Brazil			1,807						694						2,797						1,057						2,724						1,213
All other Latin America			2,679						485						3,219						544						3,055						1,217
Asia/Pacific Rim			2,322						203						2,793						390						2,214						408
Other			804						43						961						68						795						77
Total			$	171,760					$	127,315					$	181,193					$	130,128					$	170,756					$	131,473

The following tables present intersegment revenues, assets, investments in equity affiliates and capital expenditures by segment:

Intersegment Reconciliation
			2020						2019						2018
Intersegment revenues
Communications			$	11					$	26					$	13
WarnerMedia			3,183						3,318						1,875
Latin America			—						—						—
Total Intersegment Revenues			3,194						3,344						1,888
Consolidations			1,986						1,909						1,511
Eliminations and consolidations			$	5,180					$	5,253					$	3,399

At or for the years ended December 31,						2020																		2019
						Assets						Investments in Equity Method Investees						Capital Expenditures						Assets						Investments in Equity Method Investees						Capital Expenditures
Communications						$	522,758					$	—					$	14,107					$	521,252					$	—					$	17,410
WarnerMedia						150,947						1,123						699						143,492						3,011						1,205
Latin America						15,811						590						708						20,606						650						757
Corporate and eliminations						(163,755)						67						161						(133,681)						34						263
Total						$	525,761					$	1,780					$	15,675					$	551,669					$	3,695					$	19,635

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X

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/topic&trid=2134510

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