Item 8.01 Other Events.
Throughout this document, AT&T Inc. is referred to as "we" or "AT&T." We are a
holding company whose subsidiaries and affiliates operate in the communications
services industry. Our subsidiaries and affiliates provide wireless and wireline
telecommunications services and equipment both domestically and internationally.
We announced on October 23, 2013 that third-quarter 2013 net income attributable
to AT&T totaled $3.8 billion, or $0.72 per diluted share, compared to net income
attributable to AT&T of $3.6 billion, or $0.63 per diluted share, in the third
quarter of 2012.
Third-quarter 2013 revenues were $32.2 billion, up $699 million, or 2.2 percent,
from the third-quarter 2012. The increase in revenues reflected higher wireless
data and equipment revenues and increased wireline data revenues partially
offset by declines in wireline voice and wireless voice and text revenues.
Compared with results for the third quarter of 2012, operating expenses were
$26.0 billion versus $25.4 billion; operating income was $6.2 billion, up from
$6.0 billion; and AT&T's operating income margin was 19.2 percent, compared to
Revenues from our Wireless segment for the third-quarter of 2013 were $17.5
billion, up 5.1 percent versus the year-ago quarter. The increase in revenues
reflected an increase in net subscribers and continued strong growth in data
revenues. Third-quarter 2013 wireless operating expenses totaled $12.9 billion,
up 5.7 percent versus the third quarter of 2012. AT&T's wireless operating
income margin was 26.4 percent compared to 26.9 percent in the year-ago quarter,
reflecting increased smartphone sales and strong device upgrades partially
offset by further revenue growth from the company's high-value smartphone
We reported a net gain of 989,000 wireless subscribers in the third quarter of
2013, bringing our wireless customer base to approximately 109.5 million at
September 30, 2013, compared to 105.9 million at September 30, 2012. During the
third quarter, net adds for connected devices were 719,000 postpaid subscriber
net adds were 363,000 and prepaid subscriber net adds were 192,000.
Third-quarter postpaid net adds reflect the continued adoption of smartphones
and sales of almost 388,000 tablets. Reseller had a net loss of 285,000, which
was primarily due to losses in low-revenue accounts. For the quarter, average
revenue per postpaid subscriber increased 1.5 percent versus the year-earlier
quarter due to strong data growth.
During the third quarter of 2013, smartphone sales were 6.7 million. At the end
of the quarter, approximately 72 percent, or 36.4 million, of postpaid
smartphone subscribers are on usage-based data plans, compared to about 64
percent, or 28.5 million, a year ago.
Postpaid churn was 1.07 percent, compared to 1.08 percent in the year-ago third
quarter, and compared to 1.02 percent in the second quarter of 2013. Total
customer churn was 1.31 percent versus 1.34 percent in the third quarter of 2012
and 1.36 percent in the second quarter of 2013.
Revenues from our Wireline segment for the third quarter of 2013 were $14.7
billion, a 1.0 percent decrease from the year-ago quarter and a 0.7 percent
decrease on a sequential quarterly basis. Revenues from our wireline business
customers were $8.8 billion, a decrease of 2.6 percent from the year-ago
quarter, reflecting continued declines in older circuit-based data services and
voice partially offset by increases in IP-based data services. Revenues from our
wireline consumer customers were $5.6 billion, an increase of 2.4 percent
compared to the third-quarter 2012, driven by a continued increase in IP-based
broadband and video revenues partially offset by the decline in voice revenues.