AT&T Reports Third-Quarter Results

• Consolidated revenues of $39.7 billion
• Operating income of $6.4 billion
• Net income attributable to AT&T of $3.0 billion
• Diluted EPS of $0.49 as reported and $0.74 as adjusted, compared to $0.54 and $0.74 in the year-ago quarter
• Cash from operations of $11.1 billion
• Free cash flow of $5.9 billion

Company Maintains Full-Year Guidance

• U.S. wireless results:
  • Expanding operating income margin of 30.5% with best-ever EBITDA margins of 42.0% and wireless service margin of 50.4%
  • Best-ever third-quarter postpaid phone churn of 0.84%, showing the success of video and wireless bundling strategy
  • Continued growth of postpaid smartphone base
• 3.0 million total wireless net adds
  • 2.3 million in U.S., driven by connected devices, prepaid and postpaid
  • Nearly 700,000 Mexico net adds
• Entertainment Group results:
  • 125,000 IP broadband net adds; 29,000 total broadband net adds
  • More than 6 million customer locations passed with fiber
  • Nearly 300,000 DIRECTV NOW net adds helped offset traditional TV subscriber decline
• International revenues up 11.7% with continued strong revenue growth in Mexico

Note: AT&T's third-quarter earnings conference call will be webcast at 4:30 p.m. ET on Tuesday, October 24, 2017. The webcast and related materials will be available on AT&T’s Investor Relations website at https://investors.att.com/.

DALLAS--(BUSINESS WIRE)--AT&T Inc.* (NYSE:T) reported record wireless EBITDA margins and phone churn and strong wireless and DIRECTV NOW subscriber gains in the third quarter.

“We look forward to closing our acquisition of Time Warner and bringing together premium content with world-class distribution to deliver a better entertainment experience for consumers and more effective targeted advertising,” said Randall Stephenson, AT&T Inc. chairman and CEO. “We’re also on track to have one of the largest high-speed internet networks in the U.S., reaching more than 50 million customer locations with competitive high speeds. This expansion will make our bundled video, mobile and broadband services even more compelling.

“We continued to operate our business efficiently in the quarter. At a time of transformation in our wireless and video businesses, as well as investment in growth opportunities, we’re able to maintain our full-year guidance. Wireless margins and phone churn continue to run at record levels, our fiber deployment is helping drive broadband growth and DIRECTV NOW had another strong quarter. We’re also pleased with our FirstNet progress. Already 27 states and territories have opted in, and we’re working closely with them as we prepare to deploy the FirstNet network.”

Consolidated Financial Results

AT&T's consolidated revenues for the third quarter totaled $39.7 billion versus $40.9 billion in the year-ago quarter, primarily due to declines in legacy wireline services and consumer mobility. Excluding the impact of hurricanes and earthquakes in the third quarter, revenues would have been $39.8 billion. Compared with results for the third quarter of 2016, operating expenses were $33.3 billion versus $34.5 billion; operating income was flat versus the year-ago quarter at $6.4 billion; and operating income margin was 16.1% versus 15.7%. When adjusting for amortization, merger- and integration-related expenses and other items, operating income was $8.1 billion versus $8.3 billion in the year-ago quarter and operating income margin was 20.3%, the same as in the year-ago quarter.

Third-quarter net income attributable to AT&T totaled $3.0 billion, or $0.49 per diluted share, compared with $3.3 billion, or $0.54 per diluted share, in the year-ago quarter. Adjusting for $0.25 of costs for amortization, merger- and integration-related expenses and other items including hurricane and earthquake impacts, earnings per diluted share was $0.74, the same as in the year-ago quarter.

Cash from operating activities was $11.1 billion in the third quarter and $29.3 billion year to date. Capital expenditures were $5.3 billion in the quarter and $16.5 billion year to date. Free cash flow — cash from operating activities minus capital expenditures — was $5.9 billion for the quarter and $12.8 billion year to date.

*About AT&T

AT&T Inc. (NYSE:T) is a holding company. 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. Additional information about AT&T Inc. is available at about.att.com.

© 2017 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.

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 https://investors.att.com.

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.

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.

Free Cash Flow and Free Cash Flow Dividend Payout Ratio
Dollars in millions	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net cash provided by operating activities	$	11,114		$	10,995		$	29,274		$	29,202
Less: Capital expenditures		(5,251	)		(5,813	)		(16,474	)		(15,952	)
Free Cash Flow		5,863			5,182			12,800			13,250
Less: Dividends paid		(3,009	)		(2,951	)		(9,030	)		(8,850	)
Free Cash Flow after Dividends	$	2,854		$	2,231		$	3,770		$	4,400
Free Cash Flow Dividend Payout Ratio		51.3	%		56.9	%		70.5	%		66.8	%

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) and our supplemental presentation of the Mexico Wireless and Latin America operations of our International segment, 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. Management uses Mexico Wireless EBITDA in evaluating profitability trends after our two Mexico wireless acquisitions in 2015, and our investments in building a nationwide LTE network by end of 2018. Management uses Latin America EBITDA in evaluating the ability of our Latin America operations to generate cash to finance its own operations.

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. 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.

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.

EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net Income	$	3,123		$	3,418		$	10,711		$	10,818
Additions:
Income Tax Expense		1,851			1,775			5,711			5,803
Interest Expense		1,686			1,224			4,374			3,689
Equity in Net (Income) Loss of Affiliates		(11	)		(16	)		148			(57	)
Other (Income) Expense - Net		(246	)		7			(354	)		(154	)
Depreciation and amortization		6,042			6,579			18,316			19,718
EBITDA		12,445			12,987			38,906			39,817
Total Operating Revenues		39,668			40,890			118,870			121,945
Service Revenues		36,378			37,272			109,372			111,515
EBITDA Margin		31.4	%		31.8	%		32.7	%		32.7	%
EBITDA Service Margin		34.2	%		34.8	%		35.6	%		35.7	%

Segment EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Business Solutions Segment
Segment Contribution	$	4,503		$	4,303		$	13,322		$	12,803
Additions:
Depreciation and amortization		2,325			2,539			6,972			7,568
EBITDA		6,828			6,842			20,294			20,371
Total Segment Operating Revenues		17,061			17,767			51,016			52,955
Segment Operating Income Margin		26.4	%		24.2	%		26.1	%		24.2	%
EBITDA Margin		40.0	%		38.5	%		39.8	%		38.5	%
Entertainment Group Segment
Segment Contribution	$	1,310		$	1,488		$	4,562		$	4,734
Additions:
Equity in Net (Income) Loss of Affiliates		6			-			23			(1	)
Depreciation and amortization		1,379			1,504			4,256			4,481
EBITDA		2,695			2,992			8,841			9,214
Total Segment Operating Revenues		12,648			12,720			37,953			38,089
Segment Operating Income Margin		10.4	%		11.7	%		12.1	%		12.4	%
EBITDA Margin		21.3	%		23.5	%		23.3	%		24.2	%
Consumer Mobility Segment
Segment Contribution	$	2,320		$	2,572		$	7,059		$	7,640
Additions:
Depreciation and amortization		877			944			2,621			2,798
EBITDA		3,197			3,516			9,680			10,438
Total Segment Operating Revenues		7,748			8,267			23,279			24,781
Service Revenues		6,507			6,914			19,644			20,805
Segment Operating Income Margin		29.9	%		31.1	%		30.3	%		30.8	%
EBITDA Margin		41.3	%		42.5	%		41.6	%		42.1	%
EBITDA Service Margin		49.1	%		50.9	%		49.3	%		50.2	%
International Segment
Segment Contribution	$	(125	)	$	(53	)	$	(257	)	$	(421	)
Additions:
Equity in Net (Income) of Affiliates		(17	)		(1	)		(62	)		(24	)
Depreciation and amortization		304			293			905			868
EBITDA		162			239			586			423
Total Segment Operating Revenues		2,099			1,879			6,054			5,374
Segment Operating Income Margin		-6.8	%		-2.9	%		-5.3	%		-8.3	%
EBITDA Margin		7.7	%		12.7	%		9.7	%		7.9	%

Supplemental AT&T Mobility EBITDA, EBITDA Margin and EBITDA Service Margin
Dollars in millions	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
AT&T Mobility
Operating Income	$	5,313		$	5,389		$	15,814		$	16,005
Add: Depreciation and amortization		2,010			2,107			5,999			6,244
EBITDA		7,323			7,496			21,813			22,249
Total Operating Revenues		17,436			18,193			52,121			54,071
Service Revenues		14,541			14,964			43,613			44,673
Operating Income Margin		30.5	%		29.6	%		30.3	%		29.6	%
EBITDA Margin		42.0	%		41.2	%		41.9	%		41.1	%
EBITDA Service Margin		50.4	%		50.1	%		50.0	%		49.8	%

Supplemental Latin America EBITDA and EBITDA Margin
Dollars in millions	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
International - Latin America
Operating Income	$	82		$	94		$	300		$	179
Add: Depreciation and amortization		206			212			642			620
EBITDA		288			306			942			799
Total Operating Revenues		1,363			1,297			4,065			3,649
Operating Income Margin		6.0	%		7.2	%		7.4	%		4.9	%
EBITDA Margin		21.1	%		23.6	%		23.2	%		21.9	%

Supplemental Mexico EBITDA and EBITDA Margin
Dollars in millions	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
International - Mexico
Operating Income	$	(224	)	$	(148	)	$	(619	)	$	(624	)
Add: Depreciation and amortization		98			81			263			248
EBITDA		(126	)		(67	)		(356	)		(376	)
Total Operating Revenues		736			582			1,989			1,725
Operating Income Margin		-30.4	%		-25.4	%		-31.1	%		-36.2	%
EBITDA Margin		-17.1	%		-11.5	%		-17.9	%		-21.8	%

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, unless earlier remeasurement is required (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.

The tax impact of adjusting items is calculated using the effective tax rate during the quarter except for 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%. Certain foreign operations with losses, where such losses are not realizable for tax purposes, are not tax effected, resulting in no tax impact for Venezuelan devaluation. For years prior to 2017, adjustments related to Mexico operations were taxed at the 30% marginal rate for Mexico.

Adjusting Items
Dollars in millions	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2017			2016		2017			2016
Operating Revenues
Natural disaster revenue credits	$	89		$	13	$	89		$	13
Adjustments to Operating Revenues		89			13		89			13
Operating Expenses
DIRECTV and other video merger integration costs		67			189		317			495
Mexico merger integration costs		34			84		153			231
Time Warner merger costs		33			-		152			-
Wireless merger integration costs		-			17		-			92
Actuarial (gain) loss		-			-		(259	)		-
Employee separation costs		208			260		268			314
Natural disaster costs		118			17		118			17
(Gain) loss on transfer of wireless spectrum		-			22		(181	)		(714	)
Venezuela devaluation		-			-		98			-
Adjustments to Operations and Support Expenses		460			589		666			435
Amortization of intangible assets		1,136			1,282		3,508			3,949
Adjustments to Operating Expenses		1,596			1,871		4,174			4,384
Other
Merger related interest expense and exchange fees^1		485			-		752			16
(Gain) loss on sale of assets, impairments and other adjustments^2		(81	)		-		140			4
Adjustments to Income Before Income Taxes		2,089			1,884		5,155			4,417
Tax impact of adjustments		716			640		1,717			1,521
Tax-related items		(146	)		-		(146	)		-
Adjustments to Net Income	$	1,519		$	1,244	$	3,584		$	2,896
^1Includes interest expense incurred on the debt issued prior to the close of merger transactions.
^2Includes interest income earned on cash held prior to the close of merger transactions.

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.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA Service Margin
Dollars in millions	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Operating Income	$	6,403		$	6,408		$	20,590		$	20,099
Adjustments to Operating Revenues		89			13			89			13
Adjustments to Operating Expenses		1,596			1,871			4,174			4,384
Adjusted Operating Income^1		8,088			8,292			24,853			24,496
EBITDA		12,445			12,987			38,906			39,817
Adjustments to Operating Revenues		89			13			89			13
Adjustments to Operations and Support Expenses		460			589			666			435
Adjusted EBITDA^1		12,994			13,589			39,661			40,265
Total Operating Revenues		39,668			40,890			118,870			121,945
Adjustments to Operating Revenues		89			13			89			13
Total Adjusted Operating Revenues		39,757			40,903			118,959			121,958
Service Revenues		36,378			37,272			109,372			111,515
Adjustments to Service Revenues		89			13			89			13
Adjusted Service Revenues		36,467			37,285			109,461			111,528
Operating Income Margin		16.1	%		15.7	%		17.3	%		16.5	%
Adjusted Operating Income Margin^1		20.3	%		20.3	%		20.9	%		20.1	%
Adjusted EBITDA Margin^1		32.7	%		33.2	%		33.3	%		33.0	%
Adjusted EBITDA Service Margin^1		35.6	%		36.4	%		36.2	%		36.1	%
^1Adjusted Operating Income, Adjusted EBITDA and associated margins exclude all actuarial gains or losses ($259 million gain for the first nine months of 2017) associated with our postemployment benefit plan, which we immediately recognize in the income statement, pursuant to our accounting policy for the recognition of actuarial gains/losses.

Adjusted Diluted EPS
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2017			2016		2017			2016
Diluted Earnings Per Share (EPS)	$	0.49		$	0.54	$	1.69		$	1.70
Amortization of intangible assets		0.12			0.14		0.38			0.42
Merger integration and other items^1		0.06			0.03		0.14			0.09
Asset abandonments, impairments and other adjustments		0.05			0.03		0.06			0.03
Actuarial (gain) loss		-			-		(0.03	)		-
(Gain) loss on transfer of wireless spectrum		-			-		(0.02	)		(0.07	)
Venezuela devaluation		-			-		0.02			-
Tax-related items		0.02			-		0.02			-
Adjusted EPS	$	0.74		$	0.74	$	2.26		$	2.17
Year-over-year growth - Adjusted		0.0	%				4.1	%
Weighted Average Common Shares Outstanding with Dilution (000,000)		6,182			6,189		6,184			6,191
^1Includes combined merger integration items, merger-related interest income and expense.

Net Debt to Adjusted EBITDA

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 Adjusted EBITDA. 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 Adjusted EBITDA.

Net Debt to Adjusted EBITDA
Dollars in millions
	Three Months Ended
	Mar. 31,		Jun. 30,			Sep. 30,				YTD 2017
	2017		2017			2017
Adjusted EBITDA	$	13,080	$	13,587		$	12,994		$	39,661
Add back severance		-		(60	)		(208	)		(268	)
Net Debt Adjusted EBITDA		13,080		13,527			12,786			39,393
Annualized Adjusted EBITDA										52,524
End-of-period current debt										8,551
End-of-period long-term debt										154,728
Total End-of-Period Debt										163,279
Less: Cash and Cash Equivalents										48,499
Net Debt Balance										114,780
Annualized Net Debt to Adjusted EBITDA Ratio										2.19

Supplemental Operational Measures

We provide a supplemental discussion of our domestic wireless operations that is calculated by combining our Consumer Mobility and Business Solutions segments, and then adjusting to remove non-wireless operations. The following table presents a reconciliation of our supplemental AT&T Mobility results.

Supplemental Operational Measure
	Three Months Ended
	September 30, 2017									September 30, 2016
		Consumer Mobility		Business Solutions		Adjustments^1			AT&T Mobility		Consumer Mobility		Business Solutions		Adjustments^1			AT&T Mobility
Operating Revenues
Wireless service	$	6,507	$	8,034	$	-		$	14,541	$	6,914	$	8,050	$	-		$	14,964
Fixed strategic services		-		3,087		(3,087	)		-		-		2,913		(2,913	)		-
Legacy voice and data services		-		3,434		(3,434	)		-		-		4,042		(4,042	)		-
Other services and equipment		-		852		(852	)		-		-		886		(886	)		-
Wireless equipment		1,241		1,654		-			2,895		1,353		1,876		-			3,229
Total Operating Revenues		7,748		17,061		(7,373	)		17,436		8,267		17,767		(7,841	)		18,193
Operating Expenses
Operations and support		4,551		10,233		(4,671	)		10,113		4,751		10,925		(4,979	)		10,697
EBITDA		3,197		6,828		(2,702	)		7,323		3,516		6,842		(2,862	)		7,496
Depreciation and amortization		877		2,325		(1,192	)		2,010		944		2,539		(1,376	)		2,107
Total Operating Expense		5,428		12,558		(5,863	)		12,123		5,695		13,464		(6,355	)		12,804
Operating Income	$	2,320	$	4,503	$	(1,510	)	$	5,313	$	2,572	$	4,303	$	(1,486	)	$	5,389
^1Non-wireless (fixed) operations reported in Business Solutions segment.
Supplemental Operational Measure
		Nine Months Ended
	September 30, 2017									September 30, 2016
		Consumer Mobility		Business Solutions		Adjustments^1			AT&T Mobility		Consumer Mobility		Business Solutions		Adjustments^1			AT&T Mobility
Operating Revenues
Wireless service	$	19,644	$	23,969	$	-		$	43,613	$	20,805	$	23,868	$	-		$	44,673
Fixed strategic services		-		9,089		(9,089	)		-		-		8,469		(8,469	)		-
Legacy voice and data services		-		10,572		(10,572	)		-		-		12,577		(12,577	)		-
Other services and equipment		-		2,513		(2,513	)		-		-		2,619		(2,619	)		-
Wireless equipment		3,635		4,873		-			8,508		3,976		5,422		-			9,398
Total Operating Revenues		23,279		51,016		(22,174	)		52,121		24,781		52,955		(23,665	)		54,071
Operating Expenses
Operations and support		13,599		30,722		(14,013	)		30,308		14,343		32,584		(15,105	)		31,822
EBITDA		9,680		20,294		(8,161	)		21,813		10,438		20,371		(8,560	)		22,249
Depreciation and amortization		2,621		6,972		(3,594	)		5,999		2,798		7,568		(4,122	)		6,244
Total Operating Expense		16,220		37,694		(17,607	)		36,307		17,141		40,152		(19,227	)		38,066
Operating Income	$	7,059	$	13,322	$	(4,567	)	$	15,814	$	7,640	$	12,803	$	(4,438	)	$	16,005
^1Non-wireless (fixed) operations reported in Business Solutions segment.

Supplemental International

We provide a supplemental presentation of the Latin America and Mexico Wireless operations within our International segment. The following table presents a reconciliation of our International segment.

Supplemental International
		Three Months Ended
		September 30, 2017							September 30, 2016
		Latin America		Mexico			International			Latin America		Mexico			International
Operating Revenues
Video service	$	1,363	$	-		$	1,363		$	1,297	$	-		$	1,297
Wireless service		-		536			536			-		484			484
Wireless equipment		-		200			200			-		98			98
Total Operating Revenues		1,363		736			2,099			1,297		582			1,879
Operating Expenses
Operations and support		1,075		862			1,937			991		649			1,640
Depreciation and amortization		206		98			304			212		81			293
Total Operating Expenses		1,281		960			2,241			1,203		730			1,933
Operating Income (Loss)		82		(224	)		(142	)		94		(148	)		(54	)
Equity in Net Income of Affiliates		17		-			17			1		-			1
Segment Contribution	$	99	$	(224	)	$	(125	)	$	95	$	(148	)	$	(53	)
Supplemental International
		Nine Months Ended
		September 30, 2017							September 30, 2016
		Latin America		Mexico			International			Latin America		Mexico			International
Operating Revenues
Video service	$	4,065	$	-		$	4,065		$	3,649	$	-		$	3,649
Wireless service		-		1,546			1,546			-		1,428			1,428
Wireless equipment		-		443			443			-		297			297
Total Operating Revenues		4,065		1,989			6,054			3,649		1,725			5,374
Operating Expenses
Operations and support		3,123		2,345			5,468			2,850		2,101			4,951
Depreciation and amortization		642		263			905			620		248			868
Total Operating Expenses		3,765		2,608			6,373			3,470		2,349			5,819
Operating Income (Loss)		300		(619	)		(319	)		179		(624	)		(445	)
Equity in Net Income of Affiliates		62		-			62			24		-			24
Segment Contribution	$	362	$	(619	)	$	(257	)	$	203	$	(624	)	$	(421	)