(Mark One) x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended or | |||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large accelerated filer | [X] | Accelerated filer | [ ] | |
Non-accelerated filer | [ ] | (Do not check if a smaller reporting company) | Smaller reporting company | [ ] |
AT&T INC. | AT&T INC. | AT&T INC. | ||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | CONSOLIDATED STATEMENTS OF INCOME | CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
Dollars in millions except per share amounts | Dollars in millions except per share amounts | Dollars in millions except per share amounts | ||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
Three months ended | Three months ended | Six months ended | ||||||||||||||||||||||
March 31, | June 30, | June 30, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||
Service | $ | 28,962 | $ | 29,776 | $ | 29,541 | $ | 29,556 | $ | 58,503 | $ | 59,332 | ||||||||||||
Equipment | 3,614 | 2,700 | 3,474 | 3,019 | 7,088 | 5,719 | ||||||||||||||||||
Total operating revenues | 32,576 | 32,476 | 33,015 | 32,575 | 65,591 | 65,051 | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||
Cost of services and sales (exclusive of depreciation | ||||||||||||||||||||||||
and amortization shown separately below) | 14,581 | 13,321 | 15,140 | 14,212 | 29,721 | 27,533 | ||||||||||||||||||
Selling, general and administrative | 7,961 | 8,260 | 7,467 | 8,197 | 15,428 | 16,457 | ||||||||||||||||||
Depreciation and amortization | 4,578 | 4,617 | 4,696 | 4,550 | 9,274 | 9,167 | ||||||||||||||||||
Total operating expenses | 27,120 | 26,198 | 27,303 | 26,959 | 54,423 | 53,157 | ||||||||||||||||||
Operating Income | 5,456 | 6,278 | 5,712 | 5,616 | 11,168 | 11,894 | ||||||||||||||||||
Other Income (Expense) | ||||||||||||||||||||||||
Interest expense | (899 | ) | (860 | ) | (932 | ) | (881 | ) | (1,831 | ) | (1,741 | ) | ||||||||||||
Equity in net income of affiliates | - | 88 | 33 | 102 | 33 | 190 | ||||||||||||||||||
Other income (expense) – net | 70 | 145 | 48 | 1,269 | 118 | 1,414 | ||||||||||||||||||
Total other income (expense) | (829 | ) | (627 | ) | (851 | ) | 490 | (1,680 | ) | (137 | ) | |||||||||||||
Income Before Income Taxes | 4,627 | 5,651 | 4,861 | 6,106 | 9,488 | 11,757 | ||||||||||||||||||
Income tax expense | 1,351 | 1,917 | 1,715 | 2,485 | 3,066 | 4,402 | ||||||||||||||||||
Net Income | 3,276 | 3,734 | 3,146 | 3,621 | 6,422 | 7,355 | ||||||||||||||||||
Less: Net Income Attributable to Noncontrolling Interest | (76 | ) | (82 | ) | (102 | ) | (74 | ) | (178 | ) | (156 | ) | ||||||||||||
Net Income Attributable to AT&T | $ | 3,200 | $ | 3,652 | $ | 3,044 | $ | 3,547 | $ | 6,244 | $ | 7,199 | ||||||||||||
Basic Earnings Per Share Attributable to AT&T | $ | 0.61 | $ | 0.70 | $ | 0.58 | $ | 0.68 | $ | 1.20 | $ | 1.38 | ||||||||||||
Diluted Earnings Per Share Attributable to AT&T | $ | 0.61 | $ | 0.70 | $ | 0.58 | $ | 0.68 | $ | 1.20 | $ | 1.38 | ||||||||||||
Weighted Average Number of Common Shares Outstanding – Basic (in millions) | 5,203 | 5,222 | ||||||||||||||||||||||
Weighted Average Number of Common Shares Outstanding – with Dilution (in millions) | 5,219 | 5,238 | ||||||||||||||||||||||
Weighted Average Number of Common Shares | ||||||||||||||||||||||||
Outstanding – Basic (in millions) | 5,204 | 5,204 | 5,204 | 5,213 | ||||||||||||||||||||
Weighted Average Number of Common Shares | ||||||||||||||||||||||||
Outstanding – with Dilution (in millions) | 5,220 | 5,220 | 5,220 | 5,229 | ||||||||||||||||||||
Dividends Declared Per Common Share | $ | 0.47 | $ | 0.46 | $ | 0.47 | $ | 0.46 | $ | 0.94 | $ | 0.92 | ||||||||||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||||||||||
Dollars in millions | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three months ended | Three months ended | Six months ended | ||||||||||||||||||||||
March 31, | June 30, | June 30, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Net income | $ | 3,276 | $ | 3,734 | $ | 3,146 | $ | 3,621 | $ | 6,422 | $ | 7,355 | ||||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||||||||||
Foreign currency: | ||||||||||||||||||||||||
Foreign currency translation adjustment (includes $0 and $0 attributable to noncontrolling interest), net of taxes of $(104) and $(9) | (186 | ) | (20 | ) | ||||||||||||||||||||
Reclassification adjustment included in net income, net of taxes of $0 and $14 | - | 25 | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Foreign Currency: | ||||||||||||||||||||||||
Translation adjustment (includes $0, $1, $0 and $1 attributable to noncontrolling interest), net of taxes of $1, $15, $(103) and $5 | 1 | 26 | (185 | ) | 6 | |||||||||||||||||||
Reclassification adjustment included in net income, net of taxes of $0, $210, $0 and $224 | - | 391 | - | 416 | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
Net unrealized gains, net of taxes of $19 and $10 | 34 | 16 | ||||||||||||||||||||||
Reclassification adjustment included in net income, net of taxes of $(3) and $(7) | (5 | ) | (11 | ) | ||||||||||||||||||||
Net unrealized gains, net of taxes of $0, $24, $19 and $34 | - | 43 | 34 | 59 | ||||||||||||||||||||
Reclassification adjustment realized in net income, net of taxes of $(2), $(1), $(5) and $(8) | (4 | ) | (3 | ) | (9 | ) | (14 | ) | ||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||
Net unrealized (losses) gains, net of taxes of $(190) and $3 | (354 | ) | 6 | |||||||||||||||||||||
Reclassification adjustment included in net income, net of taxes of $4 and $4 | 7 | 7 | ||||||||||||||||||||||
Net unrealized gains (losses), net of taxes of $(52), $(56), $(242) and $(53) | (95 | ) | (104 | ) | (449 | ) | (98 | ) | ||||||||||||||||
Reclassification adjustment included in net income, net of taxes of $5, $7, $9 and $11 | 10 | 14 | 17 | 21 | ||||||||||||||||||||
Defined benefit postretirement plans: | ||||||||||||||||||||||||
Amortization of net prior service credit included in net income, net of taxes of $(131) and $(147) | (215 | ) | (240 | ) | ||||||||||||||||||||
Reclassification adjustment included in net income, net of taxes of $0 and $2 | - | 3 | ||||||||||||||||||||||
Amortization of net prior service credit included in net income, net of taxes of $(131), $(142), $(262) and $(289) | (214 | ) | (239 | ) | (429 | ) | (479 | ) | ||||||||||||||||
Reclassification adjustment included in net income, net of taxes $0, $31, $0 and $33 | - | 58 | - | 61 | ||||||||||||||||||||
Other comprehensive income (loss) | (719 | ) | (214 | ) | (302 | ) | 186 | (1,021 | ) | (28 | ) | |||||||||||||
Total comprehensive income | 2,557 | 3,520 | 2,844 | 3,807 | 5,401 | 7,327 | ||||||||||||||||||
Less: Total comprehensive income attributable to noncontrolling interest | (76 | ) | (82 | ) | (102 | ) | (75 | ) | (178 | ) | (157 | ) | ||||||||||||
Total Comprehensive Income Attributable to AT&T | $ | 2,481 | $ | 3,438 | $ | 2,742 | $ | 3,732 | $ | 5,223 | $ | 7,170 | ||||||||||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | AT&T INC. | AT&T INC. | ||||||||||||||
CONSOLIDATED BALANCE SHEETS | CONSOLIDATED BALANCE SHEETS | CONSOLIDATED BALANCE SHEETS | ||||||||||||||
Dollars in millions except per share amounts | Dollars in millions except per share amounts | Dollars in millions except per share amounts | ||||||||||||||
March 31, | December 31, | June 30, | December 31, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Assets | (Unaudited) | (Unaudited) | ||||||||||||||
Current Assets | ||||||||||||||||
Cash and cash equivalents | $ | 4,444 | $ | 8,603 | $ | 20,956 | $ | 8,603 | ||||||||
Accounts receivable - net of allowances for doubtful accounts of $488 and $454 | 13,592 | 14,527 | ||||||||||||||
Accounts receivable - net of allowances for doubtful accounts of $492 and $454 | 13,821 | 14,527 | ||||||||||||||
Prepaid expenses | 930 | 831 | 834 | 831 | ||||||||||||
Deferred income taxes | 1,538 | 1,142 | 1,131 | 1,142 | ||||||||||||
Other current assets | 6,906 | 6,925 | 6,421 | 6,925 | ||||||||||||
Total current assets | 27,410 | 32,028 | 43,163 | 32,028 | ||||||||||||
Property, plant and equipment | 285,133 | 282,295 | 289,856 | 282,295 | ||||||||||||
Less: accumulated depreciation and amortization | (171,935 | ) | (169,397 | ) | (175,508 | ) | (169,397 | ) | ||||||||
Property, Plant and Equipment – Net | 113,198 | 112,898 | 114,348 | 112,898 | ||||||||||||
Goodwill | 70,341 | 69,692 | 70,920 | 69,692 | ||||||||||||
Licenses | 80,560 | 60,824 | 80,922 | 60,824 | ||||||||||||
Other Intangible Assets – Net | 6,423 | 6,139 | 6,385 | 6,139 | ||||||||||||
Investments in Equity Affiliates | 266 | 250 | 288 | 250 | ||||||||||||
Other Assets | 9,830 | 10,998 | 10,463 | 10,998 | ||||||||||||
Total Assets | $ | 308,028 | $ | 292,829 | $ | 326,489 | $ | 292,829 | ||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Debt maturing within one year | $ | 8,181 | $ | 6,056 | $ | 8,603 | $ | 6,056 | ||||||||
Accounts payable and accrued liabilities | 20,418 | 23,592 | 21,560 | 23,592 | ||||||||||||
Advanced billing and customer deposits | 4,221 | 4,105 | 4,075 | 4,105 | ||||||||||||
Accrued taxes | 2,390 | 1,091 | 3,848 | 1,091 | ||||||||||||
Dividends payable | 2,441 | 2,438 | 2,441 | 2,438 | ||||||||||||
Total current liabilities | 37,651 | 37,282 | 40,527 | 37,282 | ||||||||||||
Long-Term Debt | 88,272 | 76,011 | 105,067 | 76,011 | ||||||||||||
Deferred Credits and Other Noncurrent Liabilities | ||||||||||||||||
Deferred income taxes | 38,019 | 37,544 | 38,516 | 37,544 | ||||||||||||
Postemployment benefit obligation | 37,074 | 37,079 | 36,638 | 37,079 | ||||||||||||
Other noncurrent liabilities | 19,908 | 17,989 | 18,240 | 17,989 | ||||||||||||
Total deferred credits and other noncurrent liabilities | 95,001 | 92,612 | 93,394 | 92,612 | ||||||||||||
Stockholders' Equity | ||||||||||||||||
Common stock ($1 par value, 14,000,000,000 authorized at March 31, 2015 and | ||||||||||||||||
December 31, 2014: issued 6,495,231,088 at March 31, 2015 and December 31, 2014) | 6,495 | 6,495 | ||||||||||||||
Common stock ($1 par value, 14,000,000,000 authorized at June 30, 2015 and | ||||||||||||||||
December 31, 2014: issued 6,495,231,088 at June 30, 2015 and December 31, 2014) | 6,495 | 6,495 | ||||||||||||||
Additional paid-in capital | 90,977 | 91,108 | 91,032 | 91,108 | ||||||||||||
Retained earnings | 28,490 | 27,736 | 29,086 | 27,736 | ||||||||||||
Treasury stock (1,302,176,826 at March 31, 2015 and 1,308,318,131 | ||||||||||||||||
Treasury stock (1,301,916,280 at June 30, 2015 and 1,308,318,131 | ||||||||||||||||
at December 31, 2014, at cost) | (46,804 | ) | (47,029 | ) | (46,793 | ) | (47,029 | ) | ||||||||
Accumulated other comprehensive income | 7,341 | 8,060 | 7,039 | 8,060 | ||||||||||||
Noncontrolling interest | 605 | 554 | 642 | 554 | ||||||||||||
Total stockholders' equity | 87,104 | 86,924 | 87,501 | 86,924 | ||||||||||||
Total Liabilities and Stockholders' Equity | $ | 308,028 | $ | 292,829 | $ | 326,489 | $ | 292,829 | ||||||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | AT&T INC. | AT&T INC. | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | CONSOLIDATED STATEMENTS OF CASH FLOWS | CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
Dollars in millions | Dollars in millions | Dollars in millions | ||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
Three months ended | Six months ended | |||||||||||||||
March 31, | June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating Activities | ||||||||||||||||
Net income | $ | 3,276 | $ | 3,734 | $ | 6,422 | $ | 7,355 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 4,578 | 4,617 | 9,274 | 9,167 | ||||||||||||
Undistributed earnings from investments in equity affiliates | - | 17 | (23 | ) | (58 | ) | ||||||||||
Provision for uncollectible accounts | 285 | 241 | 535 | 444 | ||||||||||||
Deferred income tax expense | 214 | 578 | 1,183 | 546 | ||||||||||||
Net (gain) loss from sale of investments, net of impairments | (33 | ) | (122 | ) | ||||||||||||
Net gain from sale of investments, net of impairments | (50 | ) | (1,365 | ) | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | 739 | (498 | ) | 434 | (566 | ) | ||||||||||
Other current assets | 13 | (340 | ) | 743 | (771 | ) | ||||||||||
Accounts payable and accrued liabilities | (1,817 | ) | 1,025 | (1,125 | ) | 2,894 | ||||||||||
Retirement benefit funding | (140 | ) | (140 | ) | (455 | ) | (280 | ) | ||||||||
Other - net | (377 | ) | (313 | ) | (1,040 | ) | (497 | ) | ||||||||
Total adjustments | 3,462 | 5,065 | 9,476 | 9,514 | ||||||||||||
Net Cash Provided by Operating Activities | 6,738 | 8,799 | 15,898 | 16,869 | ||||||||||||
Investing Activities | ||||||||||||||||
Construction and capital expenditures: | ||||||||||||||||
Capital expenditures | (3,848 | ) | (5,716 | ) | (8,328 | ) | (11,649 | ) | ||||||||
Interest during construction | (123 | ) | (55 | ) | (339 | ) | (118 | ) | ||||||||
Acquisitions, net of cash acquired | (19,514 | ) | (662 | ) | (20,954 | ) | (857 | ) | ||||||||
Dispositions | 8 | 351 | 72 | 4,921 | ||||||||||||
Sale of securities | 1,890 | - | 1,890 | - | ||||||||||||
Return of advances to and investments in equity affiliates | - | 2 | ||||||||||||||
Other | (1 | ) | - | |||||||||||||
Net Cash Used in Investing Activities | (21,587 | ) | (6,082 | ) | (27,660 | ) | (7,701 | ) | ||||||||
Financing Activities | ||||||||||||||||
Net change in short-term borrowings with original maturities of three months or less | - | (17 | ) | - | 134 | |||||||||||
Issuance of long-term debt | 16,572 | 2,987 | 33,958 | 8,564 | ||||||||||||
Repayment of long-term debt | (596 | ) | (1,867 | ) | (2,919 | ) | (3,508 | ) | ||||||||
Purchase of treasury stock | - | (1,237 | ) | - | (1,396 | ) | ||||||||||
Issuance of treasury stock | 8 | 13 | 20 | 27 | ||||||||||||
Dividends paid | (2,434 | ) | (2,398 | ) | (4,873 | ) | (4,784 | ) | ||||||||
Other | (2,860 | ) | 74 | (2,071 | ) | (239 | ) | |||||||||
Net Cash Provided by (Used in) Financing Activities | 10,690 | (2,445 | ) | 24,115 | (1,202 | ) | ||||||||||
Net (decrease) increase in cash and cash equivalents | (4,159 | ) | 272 | |||||||||||||
Net increase in cash and cash equivalents | 12,353 | 7,966 | ||||||||||||||
Cash and cash equivalents beginning of year | 8,603 | 3,339 | 8,603 | 3,339 | ||||||||||||
Cash and Cash Equivalents End of Period | $ | 4,444 | $ | 3,611 | $ | 20,956 | $ | 11,305 | ||||||||
Cash paid (received) during the three months ended March 31 for: | ||||||||||||||||
Cash paid (received) during the six months ended June 30 for: | ||||||||||||||||
Interest | $ | 1,021 | $ | 976 | $ | 2,178 | $ | 2,292 | ||||||||
Income taxes, net of refunds | $ | (247 | ) | $ | (40 | ) | $ | (71 | ) | $ | 987 | |||||
See Notes to Consolidated Financial Statements. | See Notes to Consolidated Financial Statements. |
AT&T INC. | AT&T INC. | AT&T INC. | ||||||||||||||
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||||||||
Dollars and shares in millions except per share amounts | Dollars and shares in millions except per share amounts | Dollars and shares in millions except per share amounts | ||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
March 31, 2015 | June 30, 2015 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Common Stock | ||||||||||||||||
Balance at beginning of year | 6,495 | $ | 6,495 | 6,495 | $ | 6,495 | ||||||||||
Issuance of stock | - | - | - | - | ||||||||||||
Balance at end of period | 6,495 | $ | 6,495 | 6,495 | $ | 6,495 | ||||||||||
Additional Paid-In Capital | ||||||||||||||||
Balance at beginning of year | $ | 91,108 | $ | 91,108 | ||||||||||||
Issuance of treasury stock | 3 | 8 | ||||||||||||||
Share-based payments | (123 | ) | (84 | ) | ||||||||||||
Change related to acquisition of interests held by noncontrolling owners | (11 | ) | ||||||||||||||
Balance at end of period | $ | 90,977 | $ | 91,032 | ||||||||||||
Retained Earnings | ||||||||||||||||
Balance at beginning of year | $ | 27,736 | $ | 27,736 | ||||||||||||
Net income attributable to AT&T ($0.61 per diluted share) | 3,200 | |||||||||||||||
Dividends to stockholders ($0.47 per share) | (2,446 | ) | ||||||||||||||
Net income attributable to AT&T ($1.20 per diluted share) | 6,244 | |||||||||||||||
Dividends to stockholders ($0.94 per share) | (4,894 | ) | ||||||||||||||
Balance at end of period | $ | 28,490 | $ | 29,086 | ||||||||||||
Treasury Stock | ||||||||||||||||
Balance at beginning of year | (1,308 | ) | $ | (47,029 | ) | (1,308 | ) | $ | (47,029 | ) | ||||||
Repurchase of common stock | (1 | ) | (10 | ) | ||||||||||||
Issuance of treasury stock | 6 | 225 | 7 | 246 | ||||||||||||
Balance at end of period | (1,302 | ) | $ | (46,804 | ) | (1,302 | ) | $ | (46,793 | ) | ||||||
Accumulated Other Comprehensive Income Attributable to AT&T, net of tax | ||||||||||||||||
Balance at beginning of year | $ | 8,060 | $ | 8,060 | ||||||||||||
Other comprehensive loss attributable to AT&T | (719 | ) | (1,021 | ) | ||||||||||||
Balance at end of period | $ | 7,341 | $ | 7,039 | ||||||||||||
Noncontrolling Interest | ||||||||||||||||
Balance at beginning of year | $ | 554 | $ | 554 | ||||||||||||
Net income attributable to noncontrolling interest | 76 | 178 | ||||||||||||||
Distributions | (54 | ) | (119 | ) | ||||||||||||
Acquisition of noncontrolling interests | 29 | 29 | ||||||||||||||
Balance at end of period | $ | 605 | $ | 642 | ||||||||||||
Total Stockholders' Equity at beginning of year | $ | 86,924 | $ | 86,924 | ||||||||||||
Total Stockholders' Equity at end of period | $ | 87,104 | $ | 87,501 | ||||||||||||
See Notes to Consolidated Financial Statements. |
Three months ended | Three months ended | Six months ended | ||||||||||||||||||||||
March 31, | June 30, | June 30, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Numerators | ||||||||||||||||||||||||
Numerator for basic earnings per share: | ||||||||||||||||||||||||
Net income | $ | 3,276 | $ | 3,734 | ||||||||||||||||||||
Net Income | $ | 3,146 | $ | 3,621 | $ | 6,422 | $ | 7,355 | ||||||||||||||||
Less: Net income attributable to noncontrolling interest | (76 | ) | (82 | ) | (102 | ) | (74 | ) | (178 | ) | (156 | ) | ||||||||||||
Net income attributable to AT&T | 3,200 | 3,652 | ||||||||||||||||||||||
Net Income attributable to AT&T | 3,044 | 3,547 | 6,244 | 7,199 | ||||||||||||||||||||
Dilutive potential common shares: | ||||||||||||||||||||||||
Share-based payment | 4 | 4 | 2 | 3 | 6 | 7 | ||||||||||||||||||
Numerator for diluted earnings per share | $ | 3,204 | $ | 3,656 | $ | 3,046 | $ | 3,550 | $ | 6,250 | $ | 7,206 | ||||||||||||
Denominators (000,000) | ||||||||||||||||||||||||
Denominator for basic earnings per share: | ||||||||||||||||||||||||
Weighted-average number of common shares outstanding | 5,203 | 5,222 | ||||||||||||||||||||||
Weighted average number of common shares outstanding | 5,204 | 5,204 | 5,204 | 5,213 | ||||||||||||||||||||
Dilutive potential common shares: | ||||||||||||||||||||||||
Share-based payment (in shares) | 16 | 16 | 16 | 16 | 16 | 16 | ||||||||||||||||||
Denominator for diluted earnings per share | 5,219 | 5,238 | 5,220 | 5,220 | 5,220 | 5,229 | ||||||||||||||||||
Basic earnings per share attributable to AT&T | $ | 0.61 | $ | 0.70 | $ | 0.58 | $ | 0.68 | $ | 1.20 | $ | 1.38 | ||||||||||||
Diluted earnings per share attributable to AT&T | $ | 0.61 | $ | 0.70 | $ | 0.58 | $ | 0.68 | $ | 1.20 | $ | 1.38 |
At March 31, 2015 and for the period ended: | ||||||||||||||||||||||||||||||
At June 30, 2015 and for the period ended: | At June 30, 2015 and for the period ended: | |||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment | Net Unrealized Gains (Losses) on Available- for-Sale Securities | Net Unrealized Gains (Losses) on Cash Flow Hedges | Defined Benefit Postretirement Plans | Accumulated Other Comprehensive Income | Foreign Currency Translation Adjustment | Net Unrealized Gains (Losses) on Available- for-Sale Securities | Net Unrealized Gains (Losses) on Cash Flow Hedges | Defined Benefit Postretirement Plans | Accumulated Other Comprehensive Income | |||||||||||||||||||||
Balance as of December 31, 2014 | Balance as of December 31, 2014 | $ | (26) | $ | 498 | $ | 741 | $ | 6,847 | $ | 8,060 | Balance as of December 31, 2014 | $ | (26) | $ | 498 | $ | 741 | $ | 6,847 | $ | 8,060 | ||||||||
Other comprehensive income (loss) before reclassifications | Other comprehensive income (loss) before reclassifications | (186) | 34 | (354) | - | (506) | Other comprehensive income (loss) before reclassifications | (185) | 34 | (449) | - | (600) | ||||||||||||||||||
Amounts reclassified from accumulated OCI | Amounts reclassified from accumulated OCI | - | 1 | (5) | 2 | 7 | 3 | (215) | 4 | (213) | Amounts reclassified from accumulated OCI | - | 1 | (9) | 2 | 17 | 3 | (429) | 4 | (421) | ||||||||||
Net other comprehensive income (loss) | Net other comprehensive income (loss) | (186) | 29 | (347) | (215) | (719) | Net other comprehensive income (loss) | (185) | 25 | (432) | (429) | (1,021) | ||||||||||||||||||
Balance as of March 31, 2015 | $ | (212) | $ | 527 | $ | 394 | $ | 6,632 | $ | 7,341 | ||||||||||||||||||||
Balance as of June 30, 2015 | Balance as of June 30, 2015 | $ | (211) | $ | 523 | $ | 309 | $ | 6,418 | $ | 7,039 | |||||||||||||||||||
At March 31, 2014 and for the period ended: | ||||||||||||||||||||||||||||||
At June 30, 2014 and for the period ended: | At June 30, 2014 and for the period ended: | |||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment | Net Unrealized Gains (Losses) on Available- for-Sale Securities | Net Unrealized Gains (Losses) on Cash Flow Hedges | Defined Benefit Postretirement Plans | Accumulated Other Comprehensive Income | Foreign Currency Translation Adjustment | Net Unrealized Gains (Losses) on Available- for-Sale Securities | Net Unrealized Gains (Losses) on Cash Flow Hedges | Defined Benefit Postretirement Plans | Accumulated Other Comprehensive Income | |||||||||||||||||||||
Balance as of December 31, 2013 | Balance as of December 31, 2013 | $ | (367) | $ | 450 | $ | 445 | $ | 7,352 | $ | 7,880 | Balance as of December 31, 2013 | $ | (367) | $ | 450 | $ | 445 | $ | 7,352 | $ | 7,880 | ||||||||
Other comprehensive income (loss) before reclassifications | Other comprehensive income (loss) before reclassifications | (20) | 16 | 6 | - | 2 | Other comprehensive income (loss) before reclassifications | 5 | 59 | (98) | - | (34) | ||||||||||||||||||
Amounts reclassified from accumulated OCI | Amounts reclassified from accumulated OCI | 25 | 1 | (11) | 2 | 7 | 3 | (237) | 4 | (216) | Amounts reclassified from accumulated OCI | 416 | 1 | (14) | 2 | 21 | 3 | (418) | 4 | 5 | ||||||||||
Net other comprehensive income (loss) | Net other comprehensive income (loss) | 5 | 5 | 13 | (237) | (214) | Net other comprehensive income (loss) | 421 | 45 | (77) | (418) | (29) | ||||||||||||||||||
Balance as of March 31, 2014 | $ | (362) | $ | 455 | $ | 458 | $ | 7,115 | $ | 7,666 | ||||||||||||||||||||
Balance as of June 30, 2014 | Balance as of June 30, 2014 | $ | 54 | $ | 495 | $ | 368 | $ | 6,934 | $ | 7,851 | |||||||||||||||||||
1 Translation (gain) loss reclassifications are included in Other income (expense) - net in the consolidated statements of income. | 1 Translation (gain) loss reclassifications are included in Other income (expense) - net in the consolidated statements of income. | 1 Translation (gain) loss reclassifications are included in Other income (expense) - net in the consolidated statements of income. | ||||||||||||||||||||||||||||
2 (Gains) losses are included in Other income (expense) - net in the consolidated statements of income. | 2 (Gains) losses are included in Other income (expense) - net in the consolidated statements of income. | 2 (Gains) losses are included in Other income (expense) - net in the consolidated statements of income. | ||||||||||||||||||||||||||||
3 (Gains) losses are included in interest expense in the consolidated statements of income. See Note 6 for additional information. | ||||||||||||||||||||||||||||||
4 The amortization of prior service credits associated with postretirement benefits, net of amounts capitalized as part of construction labor, are included in Cost of services and sales and Selling, general and administrative in the consolidated statements of income (see Note 5). | ||||||||||||||||||||||||||||||
Actuarial loss reclassifications related to our equity method investees are included in Other income (expense) - net in the consolidated statements of income. | ||||||||||||||||||||||||||||||
3 (Gains) losses are included in Interest expense in the consolidated statements of income. See Note 6 for additional information. | 3 (Gains) losses are included in Interest expense in the consolidated statements of income. See Note 6 for additional information. | |||||||||||||||||||||||||||||
4 The amortization of prior service credits associated with postretirement benefits, net of amounts capitalized as part of construction labor, are included in Cost of services and sales and Selling, general and administrative in the consolidated statements of income (see Note 5). Actuarial loss | 4 The amortization of prior service credits associated with postretirement benefits, net of amounts capitalized as part of construction labor, are included in Cost of services and sales and Selling, general and administrative in the consolidated statements of income (see Note 5). Actuarial loss | |||||||||||||||||||||||||||||
reclassifications related to our equity method investees are included in Other income (expense) - net in the consolidated statements of income. | reclassifications related to our equity method investees are included in Other income (expense) - net in the consolidated statements of income. |
For the three months ended March 31, 2015: | ||||||||||||||||||||||||||||||||||||||||
For the three months ended June 30, 2015 | For the three months ended June 30, 2015 | |||||||||||||||||||||||||||||||||||||||
Wireless | Wireline | International | Corporate and Other | Consolidated Results | ||||||||||||||||||||||||||||||||||||
Service | $ | 15,115 | $ | 13,981 | $ | 445 | $ | - | $ | 29,541 | ||||||||||||||||||||||||||||||
Equipment | 3,189 | 233 | 46 | 6 | 3,474 | |||||||||||||||||||||||||||||||||||
Total segment operating revenues | 18,304 | 14,214 | 491 | 6 | 33,015 | |||||||||||||||||||||||||||||||||||
Operations and support expenses | 11,551 | 10,362 | 529 | 165 | 22,607 | |||||||||||||||||||||||||||||||||||
Depreciation and amortization expenses | 2,073 | 2,488 | 125 | 10 | 4,696 | |||||||||||||||||||||||||||||||||||
Total segment operating expenses | 13,624 | 12,850 | 654 | 175 | 27,303 | |||||||||||||||||||||||||||||||||||
Segment operating income (loss) | 4,680 | 1,364 | (163 | ) | (169 | ) | 5,712 | |||||||||||||||||||||||||||||||||
Interest expense | - | - | - | 932 | 932 | |||||||||||||||||||||||||||||||||||
Equity in net income of affiliates | - | 1 | - | 32 | 33 | |||||||||||||||||||||||||||||||||||
Other income (expense) – net | - | - | - | 48 | 48 | |||||||||||||||||||||||||||||||||||
Segment income (loss) before income taxes | $ | 4,680 | $ | 1,365 | $ | (163 | ) | $ | (1,021 | ) | $ | 4,861 | ||||||||||||||||||||||||||||
For the six months ended June 30, 2015 | For the six months ended June 30, 2015 | Consolidated Results | ||||||||||||||||||||||||||||||||||||||
Wireless | Wireline | International | Corporate and Other | Consolidated Results | Wireless | Wireline | International | Corporate and Other | ||||||||||||||||||||||||||||||||
Service | $ | 14,812 | $ | 13,935 | $ | 215 | $ | - | $ | 28,962 | $ | 29,927 | $ | 27,916 | $ | 660 | $ | - | $ | 58,503 | ||||||||||||||||||||
Equipment | 3,374 | 213 | 21 | 6 | 3,614 | 6,563 | 446 | 67 | 12 | 7,088 | ||||||||||||||||||||||||||||||
Total segment operating revenues | 18,186 | 14,148 | 236 | 6 | 32,576 | 36,490 | 28,362 | 727 | 12 | 65,591 | ||||||||||||||||||||||||||||||
Operations and support expenses | 11,681 | 10,263 | 219 | 379 | 22,542 | 23,232 | 20,625 | 748 | 544 | 45,149 | ||||||||||||||||||||||||||||||
Depreciation and amortization expenses | 2,058 | 2,476 | 44 | - | 4,578 | 4,131 | 4,964 | 169 | 10 | 9,274 | ||||||||||||||||||||||||||||||
Total segment operating expenses | 13,739 | 12,739 | 263 | 379 | 27,120 | 27,363 | 25,589 | 917 | 554 | 54,423 | ||||||||||||||||||||||||||||||
Segment operating income (loss) | 4,447 | 1,409 | (27 | ) | (373 | ) | 5,456 | 9,127 | 2,773 | (190 | ) | (542 | ) | 11,168 | ||||||||||||||||||||||||||
Interest expense | - | - | - | 899 | 899 | - | - | - | 1,831 | 1,831 | ||||||||||||||||||||||||||||||
Equity in net income (loss) of affiliates | (4 | ) | (7 | ) | - | 11 | - | (4 | ) | (6 | ) | - | 43 | 33 | ||||||||||||||||||||||||||
Other income (expense) – net | - | - | - | 70 | 70 | - | - | - | 118 | 118 | ||||||||||||||||||||||||||||||
Segment income (loss) before income taxes | $ | 4,443 | $ | 1,402 | $ | (27 | ) | $ | (1,191 | ) | $ | 4,627 | $ | 9,123 | $ | 2,767 | $ | (190 | ) | $ | (2,212 | ) | $ | 9,488 | ||||||||||||||||
For the three months ended March 31, 2014: | ||||||||||||||||||||||||||||||||||||||||
Wireless | Wireline | International | Corporate and Other | Consolidated Results | ||||||||||||||||||||||||||||||||||||
Service | $ | 15,387 | $ | 14,389 | $ | - | $ | - | $ | 29,776 | ||||||||||||||||||||||||||||||
Equipment | 2,479 | 212 | - | 9 | 2,700 | |||||||||||||||||||||||||||||||||||
Total segment operating revenues | 17,866 | 14,601 | - | 9 | 32,476 | |||||||||||||||||||||||||||||||||||
Operations and support expenses | 10,882 | 10,457 | - | 242 | 21,581 | |||||||||||||||||||||||||||||||||||
Depreciation and amortization expenses | 1,931 | 2,684 | - | 2 | 4,617 | |||||||||||||||||||||||||||||||||||
Total segment operating expenses | 12,813 | 13,141 | - | 244 | 26,198 | |||||||||||||||||||||||||||||||||||
Segment operating income (loss) | 5,053 | 1,460 | - | (235 | ) | 6,278 | ||||||||||||||||||||||||||||||||||
Interest expense | - | - | - | 860 | 860 | |||||||||||||||||||||||||||||||||||
Equity in net income (loss) of affiliates | (20 | ) | 1 | - | 107 | 88 | ||||||||||||||||||||||||||||||||||
Other income (expense) – net | - | - | - | 145 | 145 | |||||||||||||||||||||||||||||||||||
Segment income (loss) before income taxes | $ | 5,033 | $ | 1,461 | $ | - | $ | (843 | ) | $ | 5,651 |
For the three months ended June 30, 2014 | ||||||||||||||||||||
Wireless | Wireline | International | Corporate and Other | Consolidated Results | ||||||||||||||||
Service | $ | 15,148 | $ | 14,408 | $ | - | $ | - | $ | 29,556 | ||||||||||
Equipment | 2,782 | 229 | - | 8 | 3,019 | |||||||||||||||
Total segment operating revenues | 17,930 | 14,637 | - | 8 | 32,575 | |||||||||||||||
Operations and support expenses | 11,568 | 10,700 | - | 141 | 22,409 | |||||||||||||||
Depreciation and amortization expenses | 2,035 | 2,514 | - | 1 | 4,550 | |||||||||||||||
Total segment operating expenses | 13,603 | 13,214 | - | 142 | 26,959 | |||||||||||||||
Segment operating income (loss) | 4,327 | 1,423 | - | (134 | ) | 5,616 | ||||||||||||||
Interest expense | - | - | - | 881 | 881 | |||||||||||||||
Equity in net income (loss) of affiliates | (29 | ) | - | 99 | 32 | 102 | ||||||||||||||
Other income (expense) – net | - | - | - | 1,269 | 1,269 | |||||||||||||||
Segment income before income taxes | $ | 4,298 | $ | 1,423 | $ | 99 | $ | 286 | $ | 6,106 | ||||||||||
For the six months ended June 30, 2014 | �� | Consolidated Results | ||||||||||||||||||
Wireless | Wireline | International | Corporate and Other | |||||||||||||||||
Service | $ | 30,535 | $ | 28,797 | $ | - | $ | - | $ | 59,332 | ||||||||||
Equipment | 5,261 | 441 | - | 17 | 5,719 | |||||||||||||||
Total segment operating revenues | 35,796 | 29,238 | - | 17 | 65,051 | |||||||||||||||
Operations and support expenses | 22,450 | 21,157 | - | 383 | 43,990 | |||||||||||||||
Depreciation and amortization expenses | 3,966 | 5,198 | - | 3 | 9,167 | |||||||||||||||
Total segment operating expenses | 26,416 | 26,355 | - | 386 | 53,157 | |||||||||||||||
Segment operating income (loss) | 9,380 | 2,883 | - | (369 | ) | 11,894 | ||||||||||||||
Interest expense | - | - | - | 1,741 | 1,741 | |||||||||||||||
Equity in net income (loss) of affiliates | (49 | ) | 1 | 153 | 85 | 190 | ||||||||||||||
Other income (expense) – net | - | - | - | 1,414 | 1,414 | |||||||||||||||
Segment income (loss) before income taxes | $ | 9,331 | $ | 2,884 | $ | 153 | $ | (611 | ) | $ | 11,757 |
Three months ended | Three months ended | Six months ended | ||||||||||||||||||||||
March 31, | June 30, | June 30, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Pension cost: | ||||||||||||||||||||||||
Service cost – benefits earned during the period | $ | 299 | $ | 282 | $ | 300 | $ | 282 | $ | 599 | $ | 564 | ||||||||||||
Interest cost on projected benefit obligation | 474 | 661 | 473 | 662 | 947 | 1,323 | ||||||||||||||||||
Expected return on assets | (826 | ) | (849 | ) | (826 | ) | (851 | ) | (1,652 | ) | (1,700 | ) | ||||||||||||
Amortization of prior service credit | (26 | ) | (24 | ) | (26 | ) | (23 | ) | (52 | ) | (47 | ) | ||||||||||||
Net pension (credit) cost | $ | (79 | ) | $ | 70 | $ | (79 | ) | $ | 70 | $ | (158 | ) | $ | 140 | |||||||||
Postretirement cost: | ||||||||||||||||||||||||
Service cost – benefits earned during the period | $ | 55 | $ | 58 | $ | 56 | $ | 58 | $ | 111 | $ | 116 | ||||||||||||
Interest cost on accumulated postretirement benefit obligation | 242 | 365 | 241 | 364 | 483 | 729 | ||||||||||||||||||
Expected return on assets | (105 | ) | (164 | ) | (105 | ) | (162 | ) | (210 | ) | (326 | ) | ||||||||||||
Amortization of prior service credit | (320 | ) | (362 | ) | (319 | ) | (362 | ) | (639 | ) | (724 | ) | ||||||||||||
Net postretirement (credit) cost | $ | (128 | ) | $ | (103 | ) | $ | (127 | ) | $ | (102 | ) | $ | (255 | ) | $ | (205 | ) | ||||||
Combined net pension and postretirement (credit) cost | $ | (207 | ) | $ | (33 | ) | $ | (206 | ) | $ | (32 | ) | $ | (413 | ) | $ | (65 | ) |
Level 1 | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access. |
Level 2 | Inputs to the valuation methodology include: |
· | Quoted prices for similar assets and liabilities in active markets. |
· | Quoted prices for identical or similar assets or liabilities in inactive markets. |
· | Inputs other than quoted market prices that are observable for the asset or liability. |
· | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
Level 3 | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
· | Fair value is often based on developed models in which there are few, if any, external observations. |
March 31, 2015 | December 31, 2014 | June 30, 2015 | December 31, 2014 | |||||||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | Carrying | Fair | |||||||||||||||||||||||
Amount | Value | Amount | Value | Amount | Value | Amount | Value | |||||||||||||||||||||||
Notes and debentures | $ | 96,026 | $ | 105,084 | $ | 81,632 | $ | 90,367 | $ | 113,167 | $ | 116,669 | $ | 81,632 | $ | 90,367 | ||||||||||||||
Bank borrowings | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | ||||||||||||||||||||||
Investment securities | 2,740 | 2,740 | 2,735 | 2,735 | 2,758 | 2,758 | 2,735 | 2,735 |
March 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Available-for-Sale Securities | |||||||||||||||
Domestic equities | $ | 1,176 | $ | - | $ | - | $ | 1,176 | |||||||
International equities | 592 | - | - | 592 | |||||||||||
Fixed income bonds | - | 793 | - | 793 | |||||||||||
Asset Derivatives1 | |||||||||||||||
Interest rate swaps | - | 194 | - | 194 | |||||||||||
Cross-currency swaps | - | 706 | - | 706 | |||||||||||
Liability Derivatives1 | |||||||||||||||
Cross-currency swaps | - | (3,528 | ) | - | (3,528 | ) | |||||||||
Interest rate locks | - | (444 | ) | - | (444 | ) | |||||||||
December 31, 2014 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Available-for-Sale Securities | |||||||||||||||
Domestic equities | $ | 1,160 | $ | - | $ | - | $ | 1,160 | |||||||
International equities | 553 | - | - | 553 | |||||||||||
Fixed income bonds | - | 836 | - | 836 | |||||||||||
Asset Derivatives1 | |||||||||||||||
Interest rate swaps | - | 157 | - | 157 | |||||||||||
Cross-currency swaps | - | 1,243 | - | 1,243 | |||||||||||
Interest rate locks | - | 5 | - | 5 | |||||||||||
Liability Derivatives1 | |||||||||||||||
Cross-currency swaps | - | (1,506 | ) | - | (1,506 | ) | |||||||||
Interest rate locks | - | (133 | ) | - | (133 | ) | |||||||||
1 Derivatives designated as hedging instruments are reflected as "Other assets," "Other noncurrent liabilities" and, for a portion of interest rate swaps, "Other current assets" in our consolidated balance sheets. |
June 30, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Available-for-Sale Securities | |||||||||||||||
Domestic equities | $ | 1,165 | $ | - | $ | - | $ | 1,165 | |||||||
International equities | 614 | - | - | 614 | |||||||||||
Fixed income bonds | - | 778 | - | 778 | |||||||||||
Asset Derivatives1 | |||||||||||||||
Interest rate swaps | - | 170 | - | 170 | |||||||||||
Cross-currency swaps | - | 1,280 | - | 1,280 | |||||||||||
Liability Derivatives1 | |||||||||||||||
Cross-currency swaps | - | (2,568 | ) | - | (2,568 | ) | |||||||||
December 31, 2014 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Available-for-Sale Securities | |||||||||||||||
Domestic equities | $ | 1,160 | $ | - | $ | - | $ | 1,160 | |||||||
International equities | 553 | - | - | 553 | |||||||||||
Fixed income bonds | - | 836 | - | 836 | |||||||||||
Asset Derivatives1 | |||||||||||||||
Interest rate swaps | - | 157 | - | 157 | |||||||||||
Cross-currency swaps | - | 1,243 | - | 1,243 | |||||||||||
Interest rate locks | - | 5 | - | 5 | |||||||||||
Liability Derivatives1 | |||||||||||||||
Cross-currency swaps | - | (1,506 | ) | - | (1,506 | ) | |||||||||
Interest rate locks | - | (133 | ) | - | (133 | ) | |||||||||
1 Derivatives designated as hedging instruments are reflected as "Other assets," "Other noncurrent liabilities" and, for a portion of interest rate swaps, "Other current assets" in our consolidated balance sheets. |
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Interest rate swaps | $ | 6,550 | $ | 6,550 | ||||
Cross-currency swaps | 29,350 | 26,505 | ||||||
Interest rate locks | 7,000 | 6,750 | ||||||
Total | $ | 42,900 | $ | 39,805 |
Following is the related hedged items affecting our financial position and performance: | |||||||
Effect of Derivatives on the Consolidated Statements of Income | |||||||
Fair Value Hedging Relationships | Three months ended | ||||||
March 31, | March 31, | ||||||
2015 | 2014 | ||||||
Interest rate swaps (Interest expense): | |||||||
Gain (Loss) on interest rate swaps | $ | 41 | $ | (11 | ) | ||
Gain (Loss) on long-term debt | (41 | ) | 11 |
June 30, | December 31, | |||||||
2015 | 2014 | |||||||
Interest rate swaps | $ | 8,050 | $ | 6,550 | ||||
Cross-currency swaps | 27,375 | 26,505 | ||||||
Interest rate locks | - | 6,750 | ||||||
Total | $ | 35,425 | $ | 39,805 |
Following are the related hedged items affecting our financial position and performance: | |||||||||||||||
Effect of Derivatives on the Consolidated Statements of Income | |||||||||||||||
Fair Value Hedging Relationships | Three months ended | Six months ended | |||||||||||||
June 30, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | ||||||||||||
Interest rate swaps (Interest expense): | |||||||||||||||
Gain (Loss) on interest rate swaps | $ | (30 | ) | $ | 22 | $ | 11 | $ | 11 | ||||||
Gain (Loss) on long-term debt | 30 | (22 | ) | (11 | ) | (11 | ) |
Three months ended | |||||||||||||||||||||||
March 31, | March 31, | Three months ended | Six months ended | ||||||||||||||||||||
Cash Flow Hedging Relationships | 2015 | 2014 | June 30, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | |||||||||||||||||
Cross-currency swaps: | |||||||||||||||||||||||
Gain (Loss) recognized in accumulated OCI | $ | (228 | ) | $ | 11 | $ | (102 | ) | $ | (160 | ) | $ | (330 | ) | $ | (149 | ) | ||||||
Interest rate locks: | |||||||||||||||||||||||
Gain (Loss) recognized in accumulated OCI | (316 | ) | - | (45 | ) | - | (361 | ) | - | ||||||||||||||
Interest income (expense) reclassified from accumulated OCI into income | (11 | ) | (11 | ) | (15 | ) | (11 | ) | (26 | ) | (22 | ) | |||||||||||
Foreign exchange contracts: | |||||||||||||||||||||||
Gain (Loss) recognized in accumulated OCI | - | (2 | ) | - | - | - | (2 | ) |
Three months ended | Three months ended | Six months ended | |||||||||||||||||
March 31, | June 30, | June 30, | |||||||||||||||||
2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
Gross receivables sold | $ | 1,728 | $ | 1,637 | $ | 4,363 | $ | 1,637 | |||||||||||
Net receivables sold1 | $ | 2,381 | 1,555 | 1,391 | 3,936 | 1,391 | |||||||||||||
Cash proceeds received | 1,524 | 1,049 | 819 | 2,573 | 819 | ||||||||||||||
Deferred purchase price recorded | 858 | 505 | 565 | 1,363 | 565 | ||||||||||||||
1 Gross receivables sold were $2,635, before deducting the allowance, imputed interest and trade-in right guarantees. | |||||||||||||||||||
1 Receivables net of allowance, imputed interest and trade-in right guarantees. | 1 Receivables net of allowance, imputed interest and trade-in right guarantees. |
First Quarter | Second Quarter | Six-Month Period | ||||||||||||||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | ||||||||||||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||||||||||||||
Service | $ | 28,962 | $ | 29,776 | (2.7 | ) % | $ | 29,541 | $ | 29,556 | (0.1) | % | $ | 58,503 | $ | 59,332 | (1.4) | % | ||||||||||||||||||
Equipment | 3,614 | 2,700 | 33.9 | 3,474 | 3,019 | 15.1 | 7,088 | 5,719 | 23.9 | |||||||||||||||||||||||||||
Total Operating Revenues | 32,576 | 32,476 | 0.3 | 33,015 | 32,575 | 1.4 | 65,591 | 65,051 | 0.8 | |||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||
Cost of services and sales | 14,581 | 13,321 | 9.5 | 15,140 | 14,212 | 6.5 | 29,721 | 27,533 | 7.9 | |||||||||||||||||||||||||||
Selling, general and administrative | 7,961 | 8,260 | (3.6 | ) | 7,467 | 8,197 | (8.9) | 15,428 | 16,457 | (6.3) | ||||||||||||||||||||||||||
Depreciation and amortization | 4,578 | 4,617 | (0.8 | ) | 4,696 | 4,550 | 3.2 | 9,274 | 9,167 | 1.2 | ||||||||||||||||||||||||||
Total Operating Expenses | 27,120 | 26,198 | 3.5 | 27,303 | 26,959 | 1.3 | 54,423 | 53,157 | 2.4 | |||||||||||||||||||||||||||
Operating Income | 5,456 | 6,278 | (13.1 | ) | 5,712 | 5,616 | 1.7 | 11,168 | 11,894 | (6.1) | ||||||||||||||||||||||||||
Income Before Income Taxes | 4,627 | 5,651 | (18.1 | ) | 4,861 | 6,106 | (20.4) | 9,488 | 11,757 | (19.3) | ||||||||||||||||||||||||||
Net Income | 3,276 | 3,734 | (12.3 | ) | 3,146 | 3,621 | (13.1) | 6,422 | 7,355 | (12.7) | ||||||||||||||||||||||||||
Net Income Attributable to AT&T | $ | 3,200 | $ | 3,652 | (12.4 | ) % | $ | 3,044 | $ | 3,547 | (14.2) | % | $ | 6,244 | $ | 7,199 | (13.3) | % |
Selected Financial and Operating Data | ||||||||
March 31, | ||||||||
Subscribers and connections in (000s) | 2015 | 2014 | ||||||
Domestic wireless subscribers | 121,772 | 116,014 | ||||||
Network access lines in service | 18,949 | 23,582 | ||||||
U-verse VoIP connections | 5,200 | 4,134 | ||||||
Total wireline broadband connections | 16,097 | 16,503 | ||||||
Debt ratio1 | 52.5 | % | 46.6 | % | ||||
Net debt ratio2 | 50.1 | % | 44.5 | % | ||||
Ratio of earnings to fixed charges3 | 4.22 | 5.50 | ||||||
Number of AT&T employees4 | 250,790 | 246,730 |
Selected Financial and Operating Data | ||||||||
June 30, | ||||||||
Subscribers and connections in (000s) | 2015 | 2014 | ||||||
Wireless subscribers | 123,902 | 116,634 | ||||||
Network access lines in service | 18,116 | 22,547 | ||||||
U-Verse VoIP connections | 5,381 | 4,411 | ||||||
Total wireline broadband connections | 15,961 | 16,448 | ||||||
Debt ratio1 | 56.5 | % | 47.6 | % | ||||
Net Debt Ratio2 | 46.1 | % | 41.2 | % | ||||
Ratio of earnings to fixed charges3 | 4.12 | 5.53 | ||||||
Number of AT&T employees4 | 250,730 | 248,170 |
Wireless | ||||||||||||
Segment Results | ||||||||||||
First Quarter | ||||||||||||
2015 | 2014 | Percent Change | ||||||||||
Segment operating revenues | ||||||||||||
Service | $ | 14,812 | $ | 15,387 | (3.7 | ) % | ||||||
Equipment | 3,374 | 2,479 | 36.1 | |||||||||
Total Segment Operating Revenues | 18,186 | 17,866 | 1.8 | |||||||||
Segment operating expenses | ||||||||||||
Operations and support | 11,681 | 10,882 | 7.3 | |||||||||
Depreciation and amortization | 2,058 | 1,931 | 6.6 | |||||||||
Total Segment Operating Expenses | 13,739 | 12,813 | 7.2 | |||||||||
Segment Operating Income | 4,447 | 5,053 | (12.0 | ) | ||||||||
Equity in Net Income (Loss) of Affiliates | (4 | ) | (20 | ) | 80.0 | |||||||
Segment Income | $ | 4,443 | $ | 5,033 | (11.7 | ) % |
The following table highlights other key measures of performance for the Wireless segment: | ||||||||||||
First Quarter | ||||||||||||
2015 | 2014 | Percent Change | ||||||||||
(in 000s) | ||||||||||||
Wireless Subscribers 1 | 121,772 | 116,014 | 5.0 | % | ||||||||
Postpaid smartphones | 57,157 | 53,020 | 7.8 | |||||||||
Postpaid feature phones and data-centric devices | 19,018 | 20,271 | (6.2 | ) | ||||||||
Postpaid | 76,175 | 73,291 | 3.9 | |||||||||
Prepaid | 10,037 | 10,411 | (3.6 | ) | ||||||||
Reseller | 13,595 | 13,886 | (2.1 | ) | ||||||||
Connected devices 2 | 21,965 | 18,426 | 19.2 | |||||||||
Total Wireless Subscribers | 121,772 | 116,014 | 5.0 | |||||||||
Net Additions 3 | ||||||||||||
Postpaid | 441 | 625 | (29.4 | ) | ||||||||
Prepaid | 98 | 88 | 11.4 | |||||||||
Reseller | (266 | ) | (206 | ) | (29.1 | ) | ||||||
Connected devices2 | 945 | 555 | 70.3 | |||||||||
Net Subscriber Additions | 1,218 | 1,062 | 14.7 | |||||||||
Mobile Share connections | 55,581 | 32,585 | 70.6 | |||||||||
Smartphones under our installment program at end of period | 18,540 | 4,132 | - | |||||||||
Smartphones sold under our installment program during period | 4,065 | 2,868 | 41.7 | % | ||||||||
Total Churn4 | 1.40 | % | 1.39 | % | 1 BP | |||||||
Postpaid Churn4 | 1.02 | % | 1.07 | % | (5) BP | |||||||
1 Represents 100% of AT&T Mobility wireless subscribers. | ||||||||||||
2 Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets. | ||||||||||||
3 Excludes merger and acquisition-related additions during the period. | ||||||||||||
4 Calculated by dividing the aggregate number of wireless subscribers who canceled service during a period divided by the total number of wireless subscribers at the beginning of that period. The churn rate for the period is equal to the average of the churn rate for each month of that period. |
Wireless | ||||||||||||||||||||||||
Segment Results | ||||||||||||||||||||||||
Second Quarter | Six-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
Segment operating revenues | ||||||||||||||||||||||||
Service | $ | 15,115 | $ | 15,148 | (0.2) | % | $ | 29,927 | $ | 30,535 | (2.0) | % | ||||||||||||
Equipment | 3,189 | 2,782 | 14.6 | 6,563 | 5,261 | 24.7 | ||||||||||||||||||
Total Segment Operating Revenues | 18,304 | 17,930 | 2.1 | 36,490 | 35,796 | 1.9 | ||||||||||||||||||
Segment operating expenses | ||||||||||||||||||||||||
Operations and support | 11,551 | 11,568 | (0.1) | 23,232 | 22,450 | 3.5 | ||||||||||||||||||
Depreciation and amortization | 2,073 | 2,035 | 1.9 | 4,131 | 3,966 | 4.2 | ||||||||||||||||||
Total Segment Operating Expenses | 13,624 | 13,603 | 0.2 | 27,363 | 26,416 | 3.6 | ||||||||||||||||||
Segment Operating Income | 4,680 | 4,327 | 8.2 | 9,127 | 9,380 | (2.7) | ||||||||||||||||||
Equity in Net Income (Loss) of | ||||||||||||||||||||||||
Affiliates | - | (29) | - | (4 | ) | (49) | 91.8 | |||||||||||||||||
Segment Income | $ | 4,680 | $ | 4,298 | 8.9 | % | $ | 9,123 | $ | 9,331 | (2.2) | % |
The following table highlights other key measures of performance for the Wireless segment: | ||||||||||||||||||||||||
Second Quarter | Six-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
(in 000s) | ||||||||||||||||||||||||
Wireless Subscribers 1 | ||||||||||||||||||||||||
Postpaid smartphones | 57,536 | 54,629 | 5.3 | % | ||||||||||||||||||||
Postpaid feature phones and data-centric devices | 19,005 | 19,703 | (3.5 | ) | ||||||||||||||||||||
Postpaid | 76,541 | 74,332 | 3.0 | |||||||||||||||||||||
Prepaid | 10,438 | 10,082 | 3.5 | |||||||||||||||||||||
Reseller | 13,506 | 13,756 | (1.8 | ) | ||||||||||||||||||||
Connected devices 2 | 23,417 | 18,464 | 26.8 | |||||||||||||||||||||
Total Wireless Subscribers | 123,902 | 116,634 | 6.2 | |||||||||||||||||||||
Net Additions 3 | ||||||||||||||||||||||||
Postpaid | 410 | 1,026 | (60.0 | ) % | 851 | 1,651 | (48.5 | ) | ||||||||||||||||
Prepaid | 331 | (286) | - | 429 | (198) | - | ||||||||||||||||||
Reseller | (95 | ) | (162) | 41.4 | (361 | ) | (368) | 1.9 | ||||||||||||||||
Connected devices2 | 1,448 | 56 | - | 2,393 | 611 | - | ||||||||||||||||||
Net Subscriber Additions | 2,094 | 634 | - | 3,312 | 1,696 | 95.3 | ||||||||||||||||||
�� | ||||||||||||||||||||||||
Mobile Share connections | 57,813 | 41,291 | 40.0 | |||||||||||||||||||||
Smartphones under our installment program at end of period | 21,106 | 7,198 | - | |||||||||||||||||||||
Smartphones sold under our installment program during period | 3,859 | 3,142 | 22.8 | % | 7,924 | 6,010 | 31.8 | % | ||||||||||||||||
Total Churn4 | 1.31 | % | 1.47 | % | (16) BP | 1.36 | % | 1.43 | % | (7) BP | ||||||||||||||
Postpaid Churn4 | 1.01 | % | 0.86 | % | 15 BP | 1.01 | % | 0.96 | % | 5 BP | ||||||||||||||
1 Represents 100% of AT&T Mobility wireless subscribers. | ||||||||||||||||||||||||
2 Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets. | ||||||||||||||||||||||||
3 Excludes merger and acquisition-related additions during the period. | ||||||||||||||||||||||||
4 Calculated by dividing the aggregate number of wireless subscribers who canceled service during a period divided by the total number of wireless subscribers at the beginning of that period. The churn rate for the period is equal to the average of the churn rate for each month of that period. |
Wireline | ||||||||||||
Segment Results | ||||||||||||
First Quarter | ||||||||||||
2015 | 2014 | Percent Change | ||||||||||
Segment operating revenues | ||||||||||||
Service | $ | 13,935 | $ | 14,389 | (3.2 | ) % | ||||||
Equipment | 213 | 212 | 0.5 | |||||||||
Total Segment Operating Revenues | 14,148 | 14,601 | (3.1 | ) | ||||||||
Segment operating expenses | ||||||||||||
Operations and support | 10,263 | 10,457 | (1.9 | ) | ||||||||
Depreciation and amortization | 2,476 | 2,684 | (7.7 | ) | ||||||||
Total Segment Operating Expenses | 12,739 | 13,141 | (3.1 | ) | ||||||||
Segment Operating Income | 1,409 | 1,460 | (3.5 | ) | ||||||||
Equity in Net Income (Loss) of Affiliates | (7 | ) | 1 | - | ||||||||
Segment Income | $ | 1,402 | $ | 1,461 | (4.0 | ) % |
March 31, | March 31, | Percent | ||||||||||
(in 000s) | 20151 | 20141 | Change | |||||||||
U-verse high speed Internet | 12,644 | 11,009 | 14.9 | % | ||||||||
DSL and Other Broadband Connections | 3,453 | 5,494 | (37.1 | ) | ||||||||
Total Wireline Broadband Connections2 | 16,097 | 16,503 | (2.5 | ) | ||||||||
Total U-verse Video Connections | 5,993 | 5,661 | 5.9 | |||||||||
Retail consumer Switched Access Lines | 8,660 | 11,655 | (25.7 | ) | ||||||||
U-verse consumer VoIP connections | 5,009 | 4,120 | 21.6 | |||||||||
Total Retail Consumer Voice Connections | 13,669 | 15,775 | (13.4 | ) | ||||||||
Switched Access Lines | ||||||||||||
Retail consumer | 8,660 | 11,655 | (25.7 | ) | ||||||||
Retail business | 8,610 | 10,084 | (14.6 | ) | ||||||||
Retail Subtotal | 17,270 | 21,739 | (20.6 | ) | ||||||||
Wholesale | 1,490 | 1,611 | (7.5 | ) | ||||||||
Total Switched Access Lines3 | 18,949 | 23,582 | (19.6 | ) % |
· | Selling (other than commissions) and administrative expenses decreased $270, primarily due to decreases of $162 in customer service and retention cost and $111 in professional, administrative and legal costs. |
· | Commission expenses decreased $234, primarily due to lower average commission rates, including those paid under the AT&T Next program. These decreases are partially offset by an increase in rates associated with Cricket sales. |
· | Incollect roaming fees decreased $75 primarily due to rate declines, which were partially offset by increased data volume. |
· | Network costs increased $355 due to ongoing network rationalization charges of $364 associated with the acquisition of Leap. These increases were partially offset by lower interconnect costs resulting from our ongoing network transition to more efficient Ethernet/IP-based technologies. |
· | Handset insurance cost increased $161 due to an increase in the cost and volume of replacement phones. |
· | Equipment costs increased $151, reflecting the sales of more expensive smartphones. Equipment costs also include subscriber integration charges. |
· | Equipment costs increased $841, reflecting the sales of more expensive smartphones. Equipment costs also include subscriber integration charges. |
· | Network costs increased $455 due to ongoing network rationalization charges of $364 associated with the acquisition of Leap and increased lease fees. These increases were partially offset by lower interconnect costs resulting from our ongoing network transition to more efficient Ethernet/IP-based technologies. |
· | Handset insurance cost increased $272 due to an increase in the cost and volume of replacement phones. |
· | Selling (other than commissions) and administrative expenses decreased $345, primarily due to: decreases of $183 in customer service and retention cost; $110 in advertising and promotions; and $93 in professional, administrative and legal costs, partially offset by an increase of $86 in bad debt expense. |
· | Commission expenses decreased $287, primarily due to lower average commission rates, including those paid under the AT&T Next program. These decreases are partially offset by an increase in rates associated with Cricket sales and increased upgrade transactions. |
· | Incollect roaming fees decreased $60 primarily due to rate declines, which were partially offset by increased data volume. |
Wireline | ||||||||||||||||||||||||
Segment Results | ||||||||||||||||||||||||
Second Quarter | Six-Month Period | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||
Segment operating revenues | ||||||||||||||||||||||||
Service | $ | 13,981 | $ | 14,408 | (3.0 | ) % | $ | 27,916 | $ | 28,797 | (3.1 | ) % | ||||||||||||
Equipment | 233 | 229 | 1.7 | 446 | 441 | 1.1 | ||||||||||||||||||
Total Segment Operating Revenues | 14,214 | 14,637 | (2.9 | ) | 28,362 | 29,238 | (3.0 | ) | ||||||||||||||||
Segment operating expenses | ||||||||||||||||||||||||
Operations and support | 10,362 | 10,700 | (3.2 | ) | 20,625 | 21,157 | (2.5 | ) | ||||||||||||||||
Depreciation and amortization | 2,488 | 2,514 | (1.0 | ) | 4,964 | 5,198 | (4.5 | ) | ||||||||||||||||
Total Segment Operating Expenses | 12,850 | 13,214 | (2.8 | ) | 25,589 | 26,355 | (2.9 | ) | ||||||||||||||||
Segment Operating Income | 1,364 | 1,423 | (4.1 | ) | 2,773 | 2,883 | (3.8 | ) | ||||||||||||||||
Equity in Net Income (Loss) of Affiliates | 1 | - | - | (6 | ) | 1 | - | |||||||||||||||||
Segment Income | $ | 1,365 | $ | 1,423 | (4.1 | ) % | $ | 2,767 | $ | 2,884 | (4.1 | ) % |
June 30, | June 30, | Percent | ||||||||||
(in 000s) | 2015 1 | 2014 1 | Change | |||||||||
U-verse high speed Internet | 12,884 | 11,497 | 12.1 | % | ||||||||
DSL and Other Broadband Connections | 3,077 | 4,951 | (37.9 | ) | ||||||||
Total Wireline Broadband Connections2 | 15,961 | 16,448 | (3.0 | ) | ||||||||
Total U-verse Video Connections | 5,971 | 5,851 | 2.1 | |||||||||
Retail Consumer Switched Access Lines | 8,142 | 10,935 | (25.5 | ) | ||||||||
U-verse Consumer VoIP Connections | 5,170 | 4,379 | 18.1 | |||||||||
Total Retail Consumer Voice Connections | 13,312 | 15,314 | (13.1 | ) | ||||||||
Switched Access Lines | ||||||||||||
Retail Consumer | 8,142 | 10,935 | (25.5 | ) | ||||||||
Retail Business | 8,331 | 9,806 | (15.0 | ) | ||||||||
Retail Subtotal | 16,473 | 20,741 | (20.6 | ) | ||||||||
Wholesale | 1,467 | 1,586 | (7.5 | ) | ||||||||
Total Switched Access Lines3 | 18,116 | 22,547 | (19.7 | ) % |
International | |||||||||||||||||||||||||||||||||||
Segment Results | |||||||||||||||||||||||||||||||||||
First Quarter | Second Quarter | Six-Month Period | |||||||||||||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | |||||||||||||||||||||||||||
Total Segment Operating Revenues | $ | 236 | $ | - | - | % | $ | 491 | $ | - | - | % | $ | 727 | $ | - | - | % | |||||||||||||||||
Segment operating expenses | |||||||||||||||||||||||||||||||||||
Operations and support | 219 | - | - | 529 | - | - | 748 | - | - | ||||||||||||||||||||||||||
Depreciation and amortization | 44 | - | - | 125 | - | - | 169 | - | - | ||||||||||||||||||||||||||
Total Segment Operating Expenses | 263 | - | - | 654 | - | - | 917 | - | - | ||||||||||||||||||||||||||
Segment Operating Income (Loss) | (163 | ) | - | - | (190 | ) | - | - | |||||||||||||||||||||||||||
Equity in Net Income of Affiliates | - | 99 | - | - | 153 | - | |||||||||||||||||||||||||||||
Segment Income (Loss) | $ | (27 | ) | $ | - | - | % | $ | (163 | ) | $ | 99 | - | % | $ | (190 | ) | $ | 153 | - | % |
AT&T Business Solutions | ||||||||||||||||||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||||||||||||
First Quarter | Second Quarter | Six-Month Period | ||||||||||||||||||||||||||||||||
2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | 2015 | 2014 | Percent Change | ||||||||||||||||||||||||||
ABS operating revenues | ||||||||||||||||||||||||||||||||||
Wireless | $ | 9,445 | $ | 9,032 | 4.6 | % | $ | 9,584 | $ | 8,739 | 9.7 | % | $ | 19,029 | $ | 17,771 | 7.1 | % | ||||||||||||||||
Wireline | 8,288 | 8,670 | (4.4 | ) | 8,239 | 8,672 | (5.0 | ) | 16,527 | 17,342 | (4.7 | ) | ||||||||||||||||||||||
Total ABS Operating Revenues | $ | 17,733 | $ | 17,702 | 0.2 | % | $ | 17,823 | $ | 17,411 | 2.4 | % | $ | 35,556 | $ | 35,113 | 1.3 | % |
· | Fiber to the Premises Deployment – Within four years, we will offer our all-fiber Internet access service to at least 12.5 million customer locations such as residences, home offices and very small businesses. Combined with our existing high-speed broadband network, at least 25.7 million customer locations will have access to broadband speeds of 45Mbps or higher by the end of the four-year build. While the addition of medium and large businesses do not count towards the commitments, we will have the opportunity to provide services to those customers as part of this expansion. In addition, we will offer 1 Gbps fiber Internet access service pursuant to applicable E-rate rules to any eligible school or library requesting that service within or contiguous to our all-fiber footprint. |
· | Discounted Broadband Services Program – Within our 21-state area, we will offer a discounted fixed broadband service to low-income households that qualify for the government's Supplemental Nutrition Assistance Program. In locations where it is available, service with speeds of at least 10Mbps will be offered for ten dollars per month. Elsewhere, 5Mbps service will be offered for ten dollars per month or, in some locations, 3Mbps service will be offered for five dollars per month. |
· | Non-Discriminatory Usage-Based Practices – We are required to refrain from using usage-based allowances or other retail terms and conditions on our fixed broadband Internet access service, as defined in the order, to discriminate in favor of our own online video services. We can and will continue to offer discounts on integrated bundles of our video and fixed broadband services. |
· | Internet Interconnection Disclosure Requirements – We will submit to the FCC new interconnection agreements we enter into with peering networks and with "on-net" customers that purchase Managed Internet Service to exchange Internet traffic with other AT&T customers. We will develop, together with an independent expert, a methodology for measuring the performance of our Internet traffic exchange and regularly report these metrics to the FCC. |
· | Compliance Program and Reporting – We will appoint a Company Compliance Officer to develop and implement a plan to ensure compliance with these merger conditions. We will engage an independent, third-party compliance officer to evaluate the plan and our implementation. Both AT&T and the independent compliance officer will submit periodic reports to the FCC. |
· | $ |
· | $ |
· | $3,254 for the acquisition of GSF Telecom, Nextel Mexico and other operations. |
· | February 2015 issuance of $2,619 of 4.600% global notes due 2045. |
· | March 2015 borrowings under a variable rate term loan facility due 2018, variable rate term loan facility due 2020 and variable rate 18-month credit agreement due 2016, together totaling $11,155. |
· | March 2015 issuance of €1,250 of 1.300% global notes due 2023 and €1,250 of 2.450% global notes due 2035 (together, equivalent to $2,844, when issued). |
· |
· | Redemption of $894 of various senior notes in connection with the January 2015 GSF Telecom acquisition and April 2015 Nextel Mexico acquisition. |
· | April 2015 redemption of €1,250 (approximately $1,975 at maturity) of AT&T 6.125% notes due 2015. |
· | $1,000 of annual put reset securities issued by BellSouth that may be put back to us each April until maturity in 2021. |
· | An accreting zero-coupon note that may be redeemed each May until maturity in 2022. If the zero-coupon note (issued for principal of $500 in 2007) is held to maturity, the redemption amount will be $1,030. |
· | Adverse economic and/or capital access changes in the markets served by us or in countries in which we have significant investments, including the impact on customer demand and our ability and our suppliers' ability to access financial markets at favorable rates and terms. |
· | Changes in available technology and the effects of such changes, including product substitutions and deployment costs. |
· | Increases in our benefit plans' costs, including increases due to adverse changes in the United States and foreign securities markets, resulting in worse-than-assumed investment returns and discount rates; adverse changes in mortality assumptions; adverse medical cost trends, and unfavorable or delayed implementation of healthcare legislation, regulations or related court decisions. |
· | The final outcome of FCC and other federal or state agency proceedings (including judicial review, if any, of such proceedings) involving issues that are important to our business, including, without limit, intercarrier compensation, interconnection obligations, pending Notices of Apparent Liability, the transition from legacy technologies to IP-based infrastructure, universal service, broadband deployment, E911 services, competition policy, net neutrality, including the FCC's order reclassifying broadband as Title II services subject to much more fulsome regulation, unbundled network elements and other wholesale obligations, availability of new spectrum from the FCC on fair and balanced terms, and wireless license awards and renewals. |
· | The final outcome of state and federal legislative efforts involving issues that are important to our business, including deregulation of IP-based services, relief from Carrier of Last Resort obligations, and elimination of state commission review of the withdrawal of services. |
· | Enactment of additional state, federal and/or foreign regulatory and tax laws and regulations pertaining to our subsidiaries and foreign investments, including laws and regulations that reduce our incentive to invest in our networks, resulting in lower revenue growth and/or higher operating costs. |
· | Our ability to absorb revenue losses caused by increasing competition, including offerings that use alternative technologies or delivery methods (e.g., cable, wireless, VoIP and Over The Top Video service) and our ability to maintain capital expenditures. |
· | The extent of competition and the resulting pressure on customer and access line totals and wireline and wireless operating margins. |
· | Our ability to develop attractive and profitable product/service offerings to offset increasing competition in our wireless and wireline markets. |
· | The ability of our competitors to offer product/service offerings at lower prices due to lower cost structures and regulatory and legislative actions adverse to us, including state regulatory proceedings relating to unbundled network elements and nonregulation of comparable alternative technologies (e.g., VoIP). |
· | The continued development and delivery of attractive and profitable |
· | Our continued ability to attract and offer a diverse portfolio of wireless service and device financing plans, devices and maintain margins. |
· | The availability and cost of additional wireless spectrum and regulations and conditions relating to spectrum use, licensing, obtaining additional spectrum, technical standards and deployment and usage, including network management rules. |
· | Our ability to manage growth in wireless data services, including network quality and acquisition of adequate spectrum at reasonable costs and terms. |
· | The outcome of pending, threatened or potential litigation, including patent and product safety claims by or against third parties. |
· | The impact on our networks, including satellites operated by DIRECTV, and business from major equipment failures; security breaches related to the network or customer information; our inability to obtain handsets, equipment/software or have handsets, equipment/software serviced, and in the case of satellites launched, in a timely and cost-effective manner from suppliers; or severe weather conditions, natural disasters, pandemics, energy shortages, wars or terrorist attacks. |
· | The issuance by the Financial Accounting Standards Board or other accounting oversight bodies of new accounting standards or changes to existing standards. |
· | The issuance by the Internal Revenue Service and/or state tax authorities of new tax regulations or changes to existing standards and actions by federal, state or local tax agencies and judicial authorities with respect to applying applicable tax laws and regulations and the resolution of disputes with any taxing jurisdictions. |
· | Our |
· | Our ability to adequately fund our wireless operations, including payment for additional spectrum, network upgrades and technological advancements. |
· | Our increased exposure to video competition and foreign economies due to our recent acquisitions of DIRECTV and |
· | Changes in our corporate strategies, such as changing network requirements or acquisitions and dispositions, which may require significant amounts of cash or stock, to respond to competition and regulatory, legislative and technological developments. |
· | The uncertainty surrounding further congressional action to address spending reductions, which may result in a significant reduction in government spending and reluctance of businesses and consumers to spend in general and on our products and services specifically, due to this fiscal uncertainty. |
Our ability to successfully integrate our July 2015 acquisition of DIRECTV, including the risk that the cost savings and any other synergies from the acquisition may not be fully realized or may take longer to realize than expected; our costs in financing the acquisition and potential adverse effects on our share price and dividend amount due to the issuance of additional shares; the addition of DIRECTV's existing debt to our balance sheet; disruption from the acquisition making it more difficult to maintain relationships with customers, employees or suppliers; and competition and its effect on pricing, spending, third party relationships and revenues. We completed our acquisition of DIRECTV in July 2015. We believe that the acquisition will give us the scale, resources and ability to deploy video services to more customers than otherwise possible and to provide an integrated bundle of broadband, video and wireless services enabling us to compete more effectively against cable operators as well as other technology, media and communications companies. In addition, we believe the acquisition will result in cost savings, especially in the area of video content costs, and other potential synergies, enabling us to expand and enhance our broadband deployment and provide more video options across multiple fixed and mobile devices. We must comply with various regulatory conditions and integrate a large number of video network and other operational systems and administrative systems. The integration process may also result in significant expenses and charges against earnings, both cash and noncash. While we have successfully merged large companies into our operations in the past, delays in the process could have a material adverse effect on our revenues, expenses, operating results and financial condition. This acquisition has increased the amount of debt on our balance sheet (both from DIRECTV's debt and the indebtedness needed to pay a portion of the purchase price) leading to additional interest expense and, due to additional shares being issued, will result in additional cash being required for any dividends declared. Both of these factors could put pressure on our financial flexibility to continue capital investments, develop new services and declare future dividends. In addition, events outside of our control, including changes in regulation and laws as well as economic trends, could adversely affect our ability to realize the expected benefits from this acquisition. 40 AT&T INC. JUNE 30, 2015 PART II – OTHER INFORMATION - Continued Dollars in millions except per share amounts
41 AT&T INC. Item 6. Exhibits Exhibits identified in parentheses below, on file with the Securities and Exchange Commission, are incorporated by reference as exhibits hereto. Unless otherwise indicated, all exhibits so incorporated are from File No. 1-8610.
42 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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