(Mark One) x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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 | March 31, | |||||||||||||||
March 31, | 2016 | 2015 | ||||||||||||||
2015 | 2014 | |||||||||||||||
Operating Revenues | ||||||||||||||||
Service | $ | 28,962 | $ | 29,776 | $ | 37,101 | $ | 28,962 | ||||||||
Equipment | 3,614 | 2,700 | 3,434 | 3,614 | ||||||||||||
Total operating revenues | 32,576 | 32,476 | 40,535 | 32,576 | ||||||||||||
Operating Expenses | ||||||||||||||||
Cost of services and sales (exclusive of depreciation | ||||||||||||||||
Cost of services and sales | ||||||||||||||||
Equipment | 4,375 | 4,546 | ||||||||||||||
Broadcast, programming and operations | 4,629 | 1,122 | ||||||||||||||
Other cost of services (exclusive of depreciation | ||||||||||||||||
and amortization shown separately below) | 14,581 | 13,321 | 9,396 | 8,812 | ||||||||||||
Selling, general and administrative | 7,961 | 8,260 | 8,441 | 7,961 | ||||||||||||
Depreciation and amortization | 4,578 | 4,617 | 6,563 | 4,578 | ||||||||||||
Total operating expenses | 27,120 | 26,198 | 33,404 | 27,019 | ||||||||||||
Operating Income | 5,456 | 6,278 | 7,131 | 5,557 | ||||||||||||
Other Income (Expense) | ||||||||||||||||
Interest expense | (899 | ) | (860 | ) | (1,207 | ) | (899 | ) | ||||||||
Equity in net income of affiliates | - | 88 | 13 | - | ||||||||||||
Other income (expense) – net | 70 | 145 | 70 | 70 | ||||||||||||
Total other income (expense) | (829 | ) | (627 | ) | (1,124 | ) | (829 | ) | ||||||||
Income Before Income Taxes | 4,627 | 5,651 | 6,007 | 4,728 | ||||||||||||
Income tax expense | 1,351 | 1,917 | 2,122 | 1,389 | ||||||||||||
Net Income | 3,276 | 3,734 | 3,885 | 3,339 | ||||||||||||
Less: Net Income Attributable to Noncontrolling Interest | (76 | ) | (82 | ) | (82 | ) | (76 | ) | ||||||||
Net Income Attributable to AT&T | $ | 3,200 | $ | 3,652 | $ | 3,803 | $ | 3,263 | ||||||||
Basic Earnings Per Share Attributable to AT&T | $ | 0.61 | $ | 0.70 | $ | 0.62 | $ | 0.63 | ||||||||
Diluted Earnings Per Share Attributable to AT&T | $ | 0.61 | $ | 0.70 | $ | 0.61 | $ | 0.63 | ||||||||
Weighted Average Number of Common Shares Outstanding – Basic (in millions) | 5,203 | 5,222 | 6,172 | 5,203 | ||||||||||||
Weighted Average Number of Common Shares Outstanding – with Dilution (in millions) | 5,219 | 5,238 | 6,190 | 5,219 | ||||||||||||
Dividends Declared Per Common Share | $ | 0.47 | $ | 0.46 | $ | 0.48 | $ | 0.47 | ||||||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||
Dollars in millions | ||||||||
(Unaudited) | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Net income | $ | 3,276 | $ | 3,734 | ||||
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 | ||||||
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 | ) | ||||
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 | ||||||
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 | ||||||
Other comprehensive income (loss) | (719 | ) | (214 | ) | ||||
Total comprehensive income | 2,557 | 3,520 | ||||||
Less: Total comprehensive income attributable to noncontrolling interest | (76 | ) | (82 | ) | ||||
Total Comprehensive Income Attributable to AT&T | $ | 2,481 | $ | 3,438 | ||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||
Dollars in millions | ||||||||
(Unaudited) | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2016 | 2015 | |||||||
Net income | $ | 3,885 | $ | 3,339 | ||||
Other comprehensive income, net of tax: | ||||||||
Foreign currency: | ||||||||
Foreign currency translation adjustment, net of taxes of $(10) and $(104) | (44 | ) | (186 | ) | ||||
Available-for-sale securities: | ||||||||
Net unrealized gains (losses), net of taxes of $(15) and $19 | (26 | ) | 33 | |||||
Reclassification adjustment included in net income, net of taxes of $(2) and $(3) | (3 | ) | (5 | ) | ||||
Cash flow hedges: | ||||||||
Net unrealized gains (losses), net of taxes of $67 and $(190) | 124 | (354 | ) | |||||
Reclassification adjustment included in net income, net of taxes of $5 and $4 | 10 | 7 | ||||||
Defined benefit postretirement plans: | ||||||||
Amortization of net prior service credit included in net income, net of taxes of $(131) and $(131) | (215 | ) | (215 | ) | ||||
Other comprehensive income (loss) | (154 | ) | (720 | ) | ||||
Total comprehensive income | 3,731 | 2,619 | ||||||
Less: Total comprehensive income attributable to noncontrolling interest | (82 | ) | (76 | ) | ||||
Total Comprehensive Income Attributable to AT&T | $ | 3,649 | $ | 2,543 | ||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
Dollars in millions except per share amounts | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Assets | (Unaudited) | |||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 4,444 | $ | 8,603 | ||||
Accounts receivable - net of allowances for doubtful accounts of $488 and $454 | 13,592 | 14,527 | ||||||
Prepaid expenses | 930 | 831 | ||||||
Deferred income taxes | 1,538 | 1,142 | ||||||
Other current assets | 6,906 | 6,925 | ||||||
Total current assets | 27,410 | 32,028 | ||||||
Property, plant and equipment | 285,133 | 282,295 | ||||||
Less: accumulated depreciation and amortization | (171,935 | ) | (169,397 | ) | ||||
Property, Plant and Equipment – Net | 113,198 | 112,898 | ||||||
Goodwill | 70,341 | 69,692 | ||||||
Licenses | 80,560 | 60,824 | ||||||
Other Intangible Assets – Net | 6,423 | 6,139 | ||||||
Investments in Equity Affiliates | 266 | 250 | ||||||
Other Assets | 9,830 | 10,998 | ||||||
Total Assets | $ | 308,028 | $ | 292,829 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities | ||||||||
Debt maturing within one year | $ | 8,181 | $ | 6,056 | ||||
Accounts payable and accrued liabilities | 20,418 | 23,592 | ||||||
Advanced billing and customer deposits | 4,221 | 4,105 | ||||||
Accrued taxes | 2,390 | 1,091 | ||||||
Dividends payable | 2,441 | 2,438 | ||||||
Total current liabilities | 37,651 | 37,282 | ||||||
Long-Term Debt | 88,272 | 76,011 | ||||||
Deferred Credits and Other Noncurrent Liabilities | ||||||||
Deferred income taxes | 38,019 | 37,544 | ||||||
Postemployment benefit obligation | 37,074 | 37,079 | ||||||
Other noncurrent liabilities | 19,908 | 17,989 | ||||||
Total deferred credits and other noncurrent liabilities | 95,001 | 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 | ||||||
Additional paid-in capital | 90,977 | 91,108 | ||||||
Retained earnings | 28,490 | 27,736 | ||||||
Treasury stock (1,302,176,826 at March 31, 2015 and 1,308,318,131 | ||||||||
at December 31, 2014, at cost) | (46,804 | ) | (47,029 | ) | ||||
Accumulated other comprehensive income | 7,341 | 8,060 | ||||||
Noncontrolling interest | 605 | 554 | ||||||
Total stockholders' equity | 87,104 | 86,924 | ||||||
Total Liabilities and Stockholders' Equity | $ | 308,028 | $ | 292,829 | ||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
Dollars in millions except per share amounts | ||||||||
March 31, | December 31, | |||||||
2016 | 2015 | |||||||
Assets | (Unaudited) | |||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 10,008 | $ | 5,121 | ||||
Accounts receivable - net of allowances for doubtful accounts of $697 and $704 | 16,070 | 16,532 | ||||||
Prepaid expenses | 1,378 | 1,072 | ||||||
Other current assets | 10,545 | 13,267 | ||||||
Total current assets | 38,001 | 35,992 | ||||||
Property, plant and equipment | 309,380 | 306,227 | ||||||
Less: accumulated depreciation and amortization | (185,926 | ) | (181,777 | ) | ||||
Property, Plant and Equipment – Net | 123,454 | 124,450 | ||||||
Goodwill | 104,651 | 104,568 | ||||||
Licenses | 94,130 | 93,093 | ||||||
Customer Lists and Relationships - Net | 17,197 | 18,208 | ||||||
Other Intangible Assets – Net | 9,108 | 9,409 | ||||||
Investments in Equity Affiliates | 1,594 | 1,606 | ||||||
Other Assets | 15,503 | 15,346 | ||||||
Total Assets | $ | 403,638 | $ | 402,672 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities | ||||||||
Debt maturing within one year | $ | 8,399 | $ | 7,636 | ||||
Accounts payable and accrued liabilities | 26,169 | 30,372 | ||||||
Advanced billing and customer deposits | 4,550 | 4,682 | ||||||
Accrued taxes | 2,455 | 2,176 | ||||||
Dividends payable | 2,955 | 2,950 | ||||||
Total current liabilities | 44,528 | 47,816 | ||||||
Long-Term Debt | 122,104 | 118,515 | ||||||
Deferred Credits and Other Noncurrent Liabilities | ||||||||
Deferred income taxes | 57,489 | 56,181 | ||||||
Postemployment benefit obligation | 34,114 | 34,262 | ||||||
Other noncurrent liabilities | 20,998 | 22,258 | ||||||
Total deferred credits and other noncurrent liabilities | 112,601 | 112,701 | ||||||
Stockholders' Equity | ||||||||
Common stock ($1 par value, 14,000,000,000 authorized at March 31, 2016 and | ||||||||
December 31, 2015: issued 6,495,231,088 at March 31, 2016 and December 31, 2015) | 6,495 | 6,495 | ||||||
Additional paid-in capital | 89,414 | 89,763 | ||||||
Retained earnings | 34,506 | 33,671 | ||||||
Treasury stock (339,006,986 at March 31, 2016 and 350,291,239 | ||||||||
at December 31, 2015, at cost) | (12,163 | ) | (12,592 | ) | ||||
Accumulated other comprehensive income | 5,180 | 5,334 | ||||||
Noncontrolling interest | 973 | 969 | ||||||
Total stockholders' equity | 124,405 | 123,640 | ||||||
Total Liabilities and Stockholders' Equity | $ | 403,638 | $ | 402,672 | ||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Dollars in millions | ||||||||
(Unaudited) | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Operating Activities | ||||||||
Net income | $ | 3,276 | $ | 3,734 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 4,578 | 4,617 | ||||||
Undistributed earnings from investments in equity affiliates | - | 17 | ||||||
Provision for uncollectible accounts | 285 | 241 | ||||||
Deferred income tax expense | 214 | 578 | ||||||
Net (gain) loss from sale of investments, net of impairments | (33 | ) | (122 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 739 | (498 | ) | |||||
Other current assets | 13 | (340 | ) | |||||
Accounts payable and accrued liabilities | (1,817 | ) | 1,025 | |||||
Retirement benefit funding | (140 | ) | (140 | ) | ||||
Other - net | (377 | ) | (313 | ) | ||||
Total adjustments | 3,462 | 5,065 | ||||||
Net Cash Provided by Operating Activities | 6,738 | 8,799 | ||||||
Investing Activities | ||||||||
Construction and capital expenditures: | ||||||||
Capital expenditures | (3,848 | ) | (5,716 | ) | ||||
Interest during construction | (123 | ) | (55 | ) | ||||
Acquisitions, net of cash acquired | (19,514 | ) | (662 | ) | ||||
Dispositions | 8 | 351 | ||||||
Sale of securities | 1,890 | - | ||||||
Net Cash Used in Investing Activities | (21,587 | ) | (6,082 | ) | ||||
Financing Activities | ||||||||
Net change in short-term borrowings with original maturities of three months or less | - | (17 | ) | |||||
Issuance of long-term debt | 16,572 | 2,987 | ||||||
Repayment of long-term debt | (596 | ) | (1,867 | ) | ||||
Purchase of treasury stock | - | (1,237 | ) | |||||
Issuance of treasury stock | 8 | 13 | ||||||
Dividends paid | (2,434 | ) | (2,398 | ) | ||||
Other | (2,860 | ) | 74 | |||||
Net Cash Provided by (Used in) Financing Activities | 10,690 | (2,445 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (4,159 | ) | 272 | |||||
Cash and cash equivalents beginning of year | 8,603 | 3,339 | ||||||
Cash and Cash Equivalents End of Period | $ | 4,444 | $ | 3,611 | ||||
Cash paid (received) during the three months ended March 31 for: | ||||||||
Interest | $ | 1,021 | $ | 976 | ||||
Income taxes, net of refunds | $ | (247 | ) | $ | (40 | ) | ||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Dollars in millions | ||||||||
(Unaudited) | ||||||||
Three months ended | ||||||||
March 31, | ||||||||
2016 | 2015 | |||||||
Operating Activities | ||||||||
Net income | $ | 3,885 | $ | 3,339 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 6,563 | 4,578 | ||||||
Undistributed earnings from investments in equity affiliates | (13 | ) | - | |||||
Provision for uncollectible accounts | 374 | 285 | ||||||
Deferred income tax expense | 1,346 | 252 | ||||||
Net gain from sale of investments, net of impairments | (44 | ) | (33 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 627 | 739 | ||||||
Other current assets | 612 | 408 | ||||||
Accounts payable and accrued liabilities | (4,006 | ) | (1,817 | ) | ||||
Retirement benefit funding | (140 | ) | (140 | ) | ||||
Other - net | (1,304 | ) | (873 | ) | ||||
Total adjustments | 4,015 | 3,399 | ||||||
Net Cash Provided by Operating Activities | 7,900 | 6,738 | ||||||
Investing Activities | ||||||||
Construction and capital expenditures: | ||||||||
Capital expenditures | (4,451 | ) | (3,848 | ) | ||||
Interest during construction | (218 | ) | (123 | ) | ||||
Acquisitions, net of cash acquired | (165 | ) | (19,514 | ) | ||||
Dispositions | 81 | 8 | ||||||
Sale of securities, net | 445 | 1,890 | ||||||
Net Cash Used in Investing Activities | (4,308 | ) | (21,587 | ) | ||||
Financing Activities | ||||||||
Issuance of long-term debt | 5,978 | 16,572 | ||||||
Repayment of long-term debt | (2,296 | ) | (596 | ) | ||||
Issuance of treasury stock | 89 | 8 | ||||||
Dividends paid | (2,947 | ) | (2,434 | ) | ||||
Other | 471 | (2,860 | ) | |||||
Net Cash Provided by Financing Activities | 1,295 | 10,690 | ||||||
Net increase (decrease) in cash and cash equivalents | 4,887 | (4,159 | ) | |||||
Cash and cash equivalents beginning of year | 5,121 | 8,603 | ||||||
Cash and Cash Equivalents End of Period | $ | 10,008 | $ | 4,444 | ||||
Cash paid (received) during the three months ended March 31 for: | ||||||||
Interest | $ | 1,459 | $ | 1,021 | ||||
Income taxes, net of refunds | $ | 477 | $ | (247 | ) | |||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||
Dollars and shares in millions except per share amounts | ||||||||
(Unaudited) | ||||||||
March 31, 2015 | ||||||||
Shares | Amount | |||||||
Common Stock | ||||||||
Balance at beginning of year | 6,495 | $ | 6,495 | |||||
Issuance of stock | - | - | ||||||
Balance at end of period | 6,495 | $ | 6,495 | |||||
Additional Paid-In Capital | ||||||||
Balance at beginning of year | $ | 91,108 | ||||||
Issuance of treasury stock | 3 | |||||||
Share-based payments | (123 | ) | ||||||
Change related to acquisition of interests held by noncontrolling owners | (11 | ) | ||||||
Balance at end of period | $ | 90,977 | ||||||
Retained Earnings | ||||||||
Balance at beginning of year | $ | 27,736 | ||||||
Net income attributable to AT&T ($0.61 per diluted share) | 3,200 | |||||||
Dividends to stockholders ($0.47 per share) | (2,446 | ) | ||||||
Balance at end of period | $ | 28,490 | ||||||
Treasury Stock | ||||||||
Balance at beginning of year | (1,308 | ) | $ | (47,029 | ) | |||
Issuance of treasury stock | 6 | 225 | ||||||
Balance at end of period | (1,302 | ) | $ | (46,804 | ) | |||
Accumulated Other Comprehensive Income Attributable to AT&T, net of tax | ||||||||
Balance at beginning of year | $ | 8,060 | ||||||
Other comprehensive loss attributable to AT&T | (719 | ) | ||||||
Balance at end of period | $ | 7,341 | ||||||
Noncontrolling Interest | ||||||||
Balance at beginning of year | $ | 554 | ||||||
Net income attributable to noncontrolling interest | 76 | |||||||
Distributions | (54 | ) | ||||||
Acquisition of noncontrolling interests | 29 | |||||||
Balance at end of period | $ | 605 | ||||||
Total Stockholders' Equity at beginning of year | $ | 86,924 | ||||||
Total Stockholders' Equity at end of period | $ | 87,104 | ||||||
See Notes to Consolidated Financial Statements. |
AT&T INC. | ||||||||
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | ||||||||
Dollars and shares in millions except per share amounts | ||||||||
(Unaudited) | ||||||||
March 31, 2016 | ||||||||
Shares | Amount | |||||||
Common Stock | ||||||||
Balance at beginning of year | 6,495 | $ | 6,495 | |||||
Issuance of stock | - | - | ||||||
Balance at end of period | 6,495 | $ | 6,495 | |||||
Additional Paid-In Capital | ||||||||
Balance at beginning of year | $ | 89,763 | ||||||
Issuance of treasury stock | (41 | ) | ||||||
Share-based payments | (308 | ) | ||||||
Balance at end of period | $ | 89,414 | ||||||
Retained Earnings | ||||||||
Balance at beginning of year | $ | 33,671 | ||||||
Net income attributable to AT&T ($0.61 per diluted share) | 3,803 | |||||||
Dividends to stockholders ($0.48 per share) | (2,968 | ) | ||||||
Balance at end of period | $ | 34,506 | ||||||
Treasury Stock | ||||||||
Balance at beginning of year | (350 | ) | $ | (12,592 | ) | |||
Issuance of treasury stock | 11 | 429 | ||||||
Balance at end of period | (339 | ) | $ | (12,163 | ) | |||
Accumulated Other Comprehensive Income Attributable to AT&T, net of tax | ||||||||
Balance at beginning of year | $ | 5,334 | ||||||
Other comprehensive loss attributable to AT&T | (154 | ) | ||||||
Balance at end of period | $ | 5,180 | ||||||
Noncontrolling Interest | ||||||||
Balance at beginning of year | $ | 969 | ||||||
Net income attributable to noncontrolling interest | 82 | |||||||
Distributions | (78 | ) | ||||||
Balance at end of period | $ | 973 | ||||||
Total Stockholders' Equity at beginning of year | $ | 123,640 | ||||||
Total Stockholders' Equity at end of period | $ | 124,405 | ||||||
See Notes to Consolidated Financial Statements. |
Three months ended | Three months ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2015 | 2014 | 2016 | 2015 | |||||||||||||
Numerators | ||||||||||||||||
Numerator for basic earnings per share: | ||||||||||||||||
Net income | $ | 3,276 | $ | 3,734 | $ | 3,885 | $ | 3,339 | ||||||||
Less: Net income attributable to noncontrolling interest | (76 | ) | (82 | ) | (82 | ) | (76 | ) | ||||||||
Net income attributable to AT&T | 3,200 | 3,652 | 3,803 | 3,263 | ||||||||||||
Dilutive potential common shares: | ||||||||||||||||
Share-based payment | 4 | 4 | 4 | 4 | ||||||||||||
Numerator for diluted earnings per share | $ | 3,204 | $ | 3,656 | $ | 3,807 | $ | 3,267 | ||||||||
Denominators (000,000) | ||||||||||||||||
Denominator for basic earnings per share: | ||||||||||||||||
Weighted-average number of common shares outstanding | 5,203 | 5,222 | 6,172 | 5,203 | ||||||||||||
Dilutive potential common shares: | ||||||||||||||||
Share-based payment (in shares) | 16 | 16 | 18 | 16 | ||||||||||||
Denominator for diluted earnings per share | 5,219 | 5,238 | 6,190 | 5,219 | ||||||||||||
Basic earnings per share attributable to AT&T | $ | 0.61 | $ | 0.70 | $ | 0.62 | $ | 0.63 | ||||||||
Diluted earnings per share attributable to AT&T | $ | 0.61 | $ | 0.70 | $ | 0.61 | $ | 0.63 |
At March 31, 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 | |||||||||||
Balance as of December 31, 2014 | $ | (26) | $ | 498 | $ | 741 | $ | 6,847 | $ | 8,060 | |||||
Other comprehensive income (loss) before reclassifications | (186) | 34 | (354) | - | (506) | ||||||||||
Amounts reclassified from accumulated OCI | - | 1 | (5) | 2 | 7 | 3 | (215) | 4 | (213) | ||||||
Net other comprehensive income (loss) | (186) | 29 | (347) | (215) | (719) | ||||||||||
Balance as of March 31, 2015 | $ | (212) | $ | 527 | $ | 394 | $ | 6,632 | $ | 7,341 | |||||
At March 31, 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 | |||||||||||
Balance as of December 31, 2013 | $ | (367) | $ | 450 | $ | 445 | $ | 7,352 | $ | 7,880 | |||||
Other comprehensive income (loss) before reclassifications | (20) | 16 | 6 | - | 2 | ||||||||||
Amounts reclassified from accumulated OCI | 25 | 1 | (11) | 2 | 7 | 3 | (237) | 4 | (216) | ||||||
Net other comprehensive income (loss) | 5 | 5 | 13 | (237) | (214) | ||||||||||
Balance as of March 31, 2014 | $ | (362) | $ | 455 | $ | 458 | $ | 7,115 | $ | 7,666 | |||||
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. | |||||||||||||||
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. |
At March 31, 2016, 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 | |||||||||||
Balance as of December 31, 2015 | $ | (1,198) | $ | 484 | $ | 16 | $ | 6,032 | $ | 5,334 | |||||
Other comprehensive income (loss) before reclassifications | (44) | (26) | 124 | - | 54 | ||||||||||
Amounts reclassified from accumulated OCI | - | 1 | (3) | 2 | 10 | 3 | (215) | 4 | (208) | ||||||
Net other comprehensive income (loss) | (44) | (29) | 134 | (215) | (154) | ||||||||||
Balance as of March 31, 2016 | $ | (1,242) | $ | 455 | $ | 150 | $ | 5,817 | $ | 5,180 | |||||
At March 31, 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 | |||||||||||
Balance as of December 31, 2014 | $ | (26) | $ | 499 | $ | 741 | $ | 6,847 | $ | 8,061 | |||||
Other comprehensive income (loss) before reclassifications | (186) | 33 | (354) | - | (507) | ||||||||||
Amounts reclassified from accumulated OCI | - | 1 | (5) | 2 | 7 | 3 | (215) | 4 | (213) | ||||||
Net other comprehensive income (loss) | (186) | 28 | (347) | (215) | (720) | ||||||||||
Balance as of March 31, 2015 | $ | (212) | $ | 527 | $ | 394 | $ | 6,632 | $ | 7,341 | |||||
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. | ||||||||||||||
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). |
· | Acquisition-related items include (1) operations and support items associated with the merger and integration of newly acquired businesses, and (2) the noncash amortization of intangible assets acquired in acquisitions. |
· | Certain significant items include (1) noncash actuarial gains and losses from pension and other postretirement benefits, (2) employee separation charges associated with voluntary and/or strategic offers, (3) losses resulting from abandonment or impairment of assets and (4) other items for which the segments are not being evaluated. |
For the three months ended March 31, 2016 | ||||||||||||||||||||
Revenue | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | ||||||||||||||
Business Solutions | $ | 17,609 | $ | 10,802 | $ | 6,807 | $ | 2,508 | $ | 4,299 | $ | - | $ | 4,299 | ||||||
Entertainment Group | 12,658 | 9,578 | 3,080 | 1,488 | 1,592 | 3 | 1,595 | |||||||||||||
Consumer Mobility | 8,328 | 4,912 | 3,416 | 922 | 2,494 | - | 2,494 | |||||||||||||
International | 1,667 | 1,588 | 79 | 277 | (198) | 14 | (184) | |||||||||||||
Segment Total | 40,262 | 26,880 | 13,382 | 5,195 | 8,187 | $ | 17 | $ | 8,204 | |||||||||||
Corporate and Other | 273 | 377 | (104) | 17 | (121) | |||||||||||||||
Acquisition-related items | - | 295 | (295) | 1,351 | (1,646) | |||||||||||||||
Certain significant items | - | (711) | 711 | - | 711 | |||||||||||||||
AT&T Inc. | $ | 40,535 | $ | 26,841 | $ | 13,694 | $ | 6,563 | $ | 7,131 | ||||||||||
For the three months ended March 31, 2015 | ||||||||||||||||||||
Revenue | Operations and Support Expenses | EBITDA | Depreciation and Amortization | Operating Income (Loss) | Equity in Net Income (Loss) of Affiliates | Segment Contribution | ||||||||||||||
Business Solutions | $ | 17,557 | $ | 11,073 | $ | 6,484 | $ | 2,342 | $ | 4,142 | $ | - | $ | 4,142 | ||||||
Entertainment Group | 5,660 | 4,859 | 801 | 1,065 | (264) | (6) | (270) | |||||||||||||
Consumer Mobility | 8,778 | 5,541 | 3,237 | 1,002 | 2,235 | - | 2,235 | |||||||||||||
International | 236 | 218 | 18 | 28 | (10) | - | (10) | |||||||||||||
Segment Total | 32,231 | 21,691 | 10,540 | 4,437 | 6,103 | $ | (6) | $ | 6,097 | |||||||||||
Corporate and Other | 345 | 234 | 111 | 20 | 91 | |||||||||||||||
Acquisition-related items | - | 299 | (299) | 121 | (420) | |||||||||||||||
Certain significant items | - | 217 | (217) | - | (217) | |||||||||||||||
AT&T Inc. | $ | 32,576 | $ | 22,441 | $ | 10,135 | $ | 4,578 | $ | 5,557 |
For the three months ended March 31, 2015: | ||||||||||||||||||||
Wireless | Wireline | International | Corporate and Other | Consolidated Results | ||||||||||||||||
Service | $ | 14,812 | $ | 13,935 | $ | 215 | $ | - | $ | 28,962 | ||||||||||
Equipment | 3,374 | 213 | 21 | 6 | 3,614 | |||||||||||||||
Total segment operating revenues | 18,186 | 14,148 | 236 | 6 | 32,576 | |||||||||||||||
Operations and support expenses | 11,681 | 10,263 | 219 | 379 | 22,542 | |||||||||||||||
Depreciation and amortization expenses | 2,058 | 2,476 | 44 | - | 4,578 | |||||||||||||||
Total segment operating expenses | 13,739 | 12,739 | 263 | 379 | 27,120 | |||||||||||||||
Segment operating income (loss) | 4,447 | 1,409 | (27 | ) | (373 | ) | 5,456 | |||||||||||||
Interest expense | - | - | - | 899 | 899 | |||||||||||||||
Equity in net income (loss) of affiliates | (4 | ) | (7 | ) | - | 11 | - | |||||||||||||
Other income (expense) – net | - | - | - | 70 | 70 | |||||||||||||||
Segment income (loss) before income taxes | $ | 4,443 | $ | 1,402 | $ | (27 | ) | $ | (1,191 | ) | $ | 4,627 | ||||||||
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 |
The following table is a reconciliation of operating contribution to "Income Before Income Taxes" reported on our consolidated statements of income. | ||||||||
First Quarter | ||||||||
2016 | 2015 | |||||||
Business Solutions | $ | 4,299 | $ | 4,142 | ||||
Entertainment Group | 1,595 | (270 | ) | |||||
Consumer Mobility | 2,494 | 2,235 | ||||||
International | (184 | ) | (10 | ) | ||||
Segment Operating Contribution | 8,204 | 6,097 | ||||||
Reconciling Items: | ||||||||
Corporate and Other | (121 | ) | 91 | |||||
Merger and integration charges | (295 | ) | (299 | ) | ||||
Amortization of intangibles acquired | (1,351 | ) | (121 | ) | ||||
Employee separation charges | (25 | ) | (217 | ) | ||||
Gain on wireless spectrum transactions | 736 | - | ||||||
Segment equity in net (income) loss of affiliates | (17 | ) | 6 | |||||
AT&T Operating Income | 7,131 | 5,557 | ||||||
Interest Expense | 1,207 | 899 | ||||||
Equity in net income (loss) of affiliates | 13 | - | ||||||
Other income (expense) - Net | 70 | 70 | ||||||
Income Before Income Taxes | $ | 6,007 | $ | 4,728 |
Three months ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Pension cost: | ||||||||
Service cost – benefits earned during the period | $ | 299 | $ | 282 | ||||
Interest cost on projected benefit obligation | 474 | 661 | ||||||
Expected return on assets | (826 | ) | (849 | ) | ||||
Amortization of prior service credit | (26 | ) | (24 | ) | ||||
Net pension (credit) cost | $ | (79 | ) | $ | 70 | |||
Postretirement cost: | ||||||||
Service cost – benefits earned during the period | $ | 55 | $ | 58 | ||||
Interest cost on accumulated postretirement benefit obligation | 242 | 365 | ||||||
Expected return on assets | (105 | ) | (164 | ) | ||||
Amortization of prior service credit | (320 | ) | (362 | ) | ||||
Net postretirement (credit) cost | $ | (128 | ) | $ | (103 | ) | ||
Combined net pension and postretirement (credit) cost | $ | (207 | ) | $ | (33 | ) |
Three months ended | ||||||||
March 31, | ||||||||
2016 | 2015 | |||||||
Pension cost: | ||||||||
Service cost – benefits earned during the period | $ | 278 | $ | 299 | ||||
Interest cost on projected benefit obligation | 495 | 474 | ||||||
Expected return on assets | (778 | ) | (826 | ) | ||||
Amortization of prior service credit | (26 | ) | (26 | ) | ||||
Net pension (credit) cost | $ | (31 | ) | $ | (79 | ) | ||
Postretirement cost: | ||||||||
Service cost – benefits earned during the period | $ | 48 | $ | 55 | ||||
Interest cost on accumulated postretirement benefit obligation | 243 | 242 | ||||||
Expected return on assets | (89 | ) | (105 | ) | ||||
Amortization of prior service credit | (319 | ) | (320 | ) | ||||
Net postretirement (credit) cost | $ | (117 | ) | $ | (128 | ) | ||
Combined net pension and postretirement (credit) cost | $ | (148 | ) | $ | (207 | ) |
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 | March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||||||
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 | ||||||||||||||||||||||
Notes and debentures1 | $ | 129,229 | $ | 137,865 | $ | 124,847 | $ | 128,993 | ||||||||||||||||||||||
Bank borrowings | 5 | 5 | 5 | 5 | 4 | 4 | 4 | 4 | ||||||||||||||||||||||
Investment securities | 2,740 | 2,740 | 2,735 | 2,735 | 2,592 | 2,592 | 2,704 | 2,704 | ||||||||||||||||||||||
1 Includes credit agreement borrowings. |
March 31, 2016 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Available-for-Sale Securities | ||||||||||||||||
Domestic equities | $ | 1,111 | $ | - | $ | - | $ | 1,111 | ||||||||
International equities | 541 | - | - | 541 | ||||||||||||
Fixed income bonds | - | 676 | - | 676 | ||||||||||||
Asset Derivatives1 | ||||||||||||||||
Interest rate swaps | - | 197 | - | 197 | ||||||||||||
Cross-currency swaps | - | 519 | - | 519 | ||||||||||||
Liability Derivatives1 | ||||||||||||||||
Cross-currency swaps | - | (2,582 | ) | - | (2,582 | ) | ||||||||||
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. | ||||||||||||||||
December 31, 2015 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Available-for-Sale Securities | ||||||||||||||||
Domestic equities | $ | 1,132 | $ | - | $ | - | $ | 1,132 | ||||||||
International equities | 569 | - | - | 569 | ||||||||||||
Fixed income bonds | - | 680 | - | 680 | ||||||||||||
Asset Derivatives1 | ||||||||||||||||
Interest rate swaps | - | 136 | - | 136 | ||||||||||||
Cross-currency swaps | - | 556 | - | 556 | ||||||||||||
Foreign exchange contracts | - | 3 | - | 3 | ||||||||||||
Liability Derivatives1 | ||||||||||||||||
Cross-currency swaps | - | (3,466 | ) | - | (3,466 | ) | ||||||||||
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, 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. |
March 31, | December 31, | March 31, | December 31, | |||||||||||||
2015 | 2014 | 2016 | 2015 | |||||||||||||
Interest rate swaps | $ | 6,550 | $ | 6,550 | $ | 7,050 | $ | 7,050 | ||||||||
Cross-currency swaps | 29,350 | 26,505 | 29,642 | 29,642 | ||||||||||||
Interest rate locks | 7,000 | 6,750 | ||||||||||||||
Foreign exchange contracts | 3 | 100 | ||||||||||||||
Total | $ | 42,900 | $ | 39,805 | $ | 36,695 | $ | 36,792 |
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 |
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 | ||||||
March 31, | March 31, | ||||||
2016 | 2015 | ||||||
Interest rate swaps (Interest expense): | |||||||
Gain (Loss) on interest rate swaps | $ | 66 | $ | 41 | |||
Gain (Loss) on long-term debt | (66 | ) | (41 | ) |
Three months ended | Three months ended | ||||||||||||||
March 31, | March 31, | March 31, | March 31, | ||||||||||||
Cash Flow Hedging Relationships | 2015 | 2014 | 2016 | 2015 | |||||||||||
Cross-currency swaps: | |||||||||||||||
Gain (Loss) recognized in accumulated OCI | $ | (228 | ) | $ | 11 | $ | 191 | $ | (228 | ) | |||||
Interest rate locks: | |||||||||||||||
Gain (Loss) recognized in accumulated OCI | (316 | ) | - | - | (316 | ) | |||||||||
Interest income (expense) reclassified from accumulated OCI into income | (11 | ) | (11 | ) | (15 | ) | (11 | ) | |||||||
Foreign exchange contracts: | |||||||||||||||
Gain (Loss) recognized in accumulated OCI | - | (2 | ) |
Assets acquired | ||||
Cash | $ | 4,797 | ||
Accounts receivable | 2,026 | |||
All other current assets | 1,535 | |||
Property, plant and equipment | 9,331 | |||
Intangible assets not subject to amortization | ||||
Orbital slots | 11,946 | |||
Trade name | 1,371 | |||
Intangible assets subject to amortization | ||||
Customer lists and relationships | 19,508 | |||
Trade name | 2,915 | |||
Other | 457 | |||
Investments and other assets | 2,388 | |||
Goodwill | 34,449 | |||
Total assets acquired | 90,723 | |||
Liabilities assumed | ||||
Current liabilities, excluding current portion of long-term debt | 5,733 | |||
Long-term debt | 20,585 | |||
Other noncurrent liabilities | 16,642 | |||
Total liabilities assumed | 42,960 | |||
Net assets acquired | 47,763 | |||
Noncontrolling interest | (354 | ) | ||
Aggregate value of consideration paid | $ | 47,409 |
Three months ended | Three months ended | ||||||||||
March 31, | March 31, | ||||||||||
2015 | 2016 | 2015 | |||||||||
Gross receivables sold | $ | 2,482 | $ | 2,635 | |||||||
Net receivables sold1 | $ | 2,381 | 2,256 | 2,381 | |||||||
Cash proceeds received | 1,524 | 1,521 | 1,524 | ||||||||
Deferred purchase price recorded | 858 | 719 | 858 | ||||||||
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 | First Quarter | |||||||||||||||||||||||
2015 | 2014 | Percent Change | 2016 | 2015 | Percent Change | |||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||
Service | $ | 28,962 | $ | 29,776 | (2.7 | ) % | $ | 37,101 | $ | 28,962 | 28.1 | % | ||||||||||||
Equipment | 3,614 | 2,700 | 33.9 | 3,434 | 3,614 | (5.0 | ) | |||||||||||||||||
Total Operating Revenues | 32,576 | 32,476 | 0.3 | 40,535 | 32,576 | 24.4 | ||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||
Cost of services and sales | 14,581 | 13,321 | 9.5 | |||||||||||||||||||||
Equipment | 4,375 | 4,546 | (3.8 | ) | ||||||||||||||||||||
Broadcast, programming and operations | 4,629 | 1,122 | - | |||||||||||||||||||||
Other cost of services | 9,396 | 8,812 | 6.6 | |||||||||||||||||||||
Selling, general and administrative | 7,961 | 8,260 | (3.6 | ) | 8,441 | 7,961 | 6.0 | |||||||||||||||||
Depreciation and amortization | 4,578 | 4,617 | (0.8 | ) | 6,563 | 4,578 | 43.4 | |||||||||||||||||
Total Operating Expenses | 27,120 | 26,198 | 3.5 | 33,404 | 27,019 | 23.6 | ||||||||||||||||||
Operating Income | 5,456 | 6,278 | (13.1 | ) | 7,131 | 5,557 | 28.3 | |||||||||||||||||
Income Before Income Taxes | 4,627 | 5,651 | (18.1 | ) | 6,007 | 4,728 | 27.1 | |||||||||||||||||
Net Income | 3,276 | 3,734 | (12.3 | ) | 3,885 | 3,339 | 16.4 | |||||||||||||||||
Net Income Attributable to AT&T | $ | 3,200 | $ | 3,652 | (12.4 | ) % | $ | 3,803 | $ | 3,263 | 16.5 | % |
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 | ||||||||
March 31, | ||||||||
Subscribers and connections in (000s) | 2016 | 2015 | ||||||
Domestic wireless subscribers | 130,445 | 121,772 | ||||||
Mexican wireless subscribers | 9,213 | 5,728 | ||||||
North American wireless subscribers | 139,658 | 127,500 | ||||||
North American branded subscribers | 98,158 | 91,448 | ||||||
North American branded net additions | 1,195 | 539 | ||||||
Domestic satellite video subscribers | 20,112 | - | ||||||
U-verse video subscribers | 5,260 | 5,993 | ||||||
Latin America satellite video subscribers1 | 12,436 | - | ||||||
Total video subscribers | 37,808 | 5,993 | ||||||
Total domestic broadband connections | 15,764 | 16,097 | ||||||
Network access lines in service | 15,975 | 18,949 | ||||||
U-Verse VoIP connections | 5,484 | 5,200 | ||||||
Debt ratio2 | 51.2 | % | 51.5 | % | ||||
Net Debt Ratio3 | 47.3 | % | 49.1 | % | ||||
Ratio of earnings to fixed charges4 | 4.22 | 4.30 | ||||||
Number of AT&T employees | 280,870 | 250,790 |
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. |
Business Solutions | ||||||||||||
Segment Results | ||||||||||||
First Quarter | ||||||||||||
2016 | 2015 | Percent Change | ||||||||||
Segment operating revenues | ||||||||||||
Wireless service | $ | 7,855 | $ | 7,515 | 4.5 | % | ||||||
Fixed strategic services | 2,786 | 2,549 | 9.3 | |||||||||
Legacy voice and data services | 4,338 | 4,754 | (8.8 | ) | ||||||||
Other service and equipment | 859 | 846 | 1.5 | |||||||||
Wireless equipment | 1,771 | 1,893 | (6.4 | ) | ||||||||
Total Segment Operating Revenues | 17,609 | 17,557 | 0.3 | |||||||||
Segment operating expenses | ||||||||||||
Operations and support | 10,802 | 11,073 | (2.4 | ) | ||||||||
Depreciation and amortization | 2,508 | 2,342 | 7.1 | |||||||||
Total Segment Operating Expenses | 13,310 | 13,415 | (0.8 | ) | ||||||||
Segment Operating Income | 4,299 | 4,142 | 3.8 | |||||||||
Equity in Net Income (Loss) of Affiliates | - | - | - | |||||||||
Segment Contribution | $ | 4,299 | $ | 4,142 | 3.8 | % |
The following table highlights other key measures of performance for the Business Solutions segment: | ||||||||||||
First Quarter | ||||||||||||
2016 | 2015 | Percent Change | ||||||||||
(in 000s) | ||||||||||||
Business Wireless Subscribers | ||||||||||||
Postpaid | 48,844 | 45,959 | 6.3 | % | ||||||||
Reseller | 64 | 14 | - | |||||||||
Connected devices 1 | 26,863 | 20,972 | 28.1 | |||||||||
Total Business Wireless Subscribers | 75,771 | 66,945 | 13.2 | |||||||||
Business Wireless Net Additions 2 | ||||||||||||
Postpaid | 133 | 297 | (55.2 | ) | ||||||||
Reseller | (22 | ) | 3 | - | ||||||||
Connected devices 1 | 1,578 | 1,024 | 54.1 | |||||||||
Business Wireless Net Subscriber Additions | 1,689 | 1,324 | 27.6 | |||||||||
Business Wireless Postpaid Churn 2, 3 | 1.02% | 0.90% | 12 BP | |||||||||
Business IP Broadband Connections | 928 | 849 | 9.3 | |||||||||
Business IP Broadband Net Additions | 17 | 27 | (37.0 | ) % | ||||||||
1 Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets. | ||||||||||||
2 Excludes migrations between AT&T segments and/or subscriber categories and acquisition-related additions during the period. | ||||||||||||
3 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. |
Entertainment Group | ||||||||||||
Segment Results | ||||||||||||
First Quarter | ||||||||||||
2016 | 2015 | Percent Change | ||||||||||
Segment operating revenues | ||||||||||||
Video entertainment | $ | 8,904 | $ | 1,871 | - | |||||||
High-speed Internet | 1,803 | 1,553 | 16.1 | |||||||||
Legacy voice and data services | 1,313 | 1,612 | (18.5 | ) | ||||||||
Other service and equipment | 638 | 624 | 2.2 | |||||||||
Total Segment Operating Revenues | 12,658 | 5,660 | - | |||||||||
Segment operating expenses | ||||||||||||
Operations and support | 9,578 | 4,859 | 97.1 | |||||||||
Depreciation and amortization | 1,488 | 1,065 | 39.7 | |||||||||
Total Segment Operating Expenses | 11,066 | 5,924 | 86.8 | |||||||||
Segment Operating Income (Loss) | 1,592 | (264) | - | |||||||||
Equity in Net Income (Loss) of Affiliates | 3 | (6) | - | |||||||||
Segment Contribution | $ | 1,595 | $ | (270) | - |
First Quarter | ||||||||||||
2016 | 2015 | Percent Change | ||||||||||
(in 000s) | ||||||||||||
Video Connections | ||||||||||||
Satellite | 20,112 | - | - | |||||||||
U-verse | 5,232 | 5,969 | (12.3 | ) | ||||||||
Total Video Connections | 25,344 | 5,969 | - | |||||||||
Video Net Additions | ||||||||||||
Satellite | 328 | - | - | |||||||||
U-verse | (382 | ) | 49 | - | ||||||||
Net Video Additions | (54 | ) | 49 | - | ||||||||
Broadband Connections | ||||||||||||
IP | 12,542 | 11,796 | 6.3 | |||||||||
DSL | 1,749 | 2,741 | (36.2 | ) | ||||||||
Total Broadband Connections | 14,291 | 14,537 | (1.7 | ) | ||||||||
Broadband Net Additions | ||||||||||||
IP | 186 | 413 | (55.0 | ) | ||||||||
DSL | (181 | ) | (320 | ) | 43.4 | |||||||
Net Broadband Additions | 5 | 93 | (94.6 | ) | ||||||||
Retail Consumer Switched Access Lines | 6,888 | 8,660 | (20.5 | ) | ||||||||
U-verse Consumer VoIP Connections | 5,225 | 5,009 | 4.3 | |||||||||
Total Retail Consumer Voice Connections | 12,113 | 13,669 | (11.4 | ) % | ||||||||
Consumer Mobility | ||||||||||||
Segment Results | ||||||||||||
First Quarter | ||||||||||||
2016 | 2015 | Percent Change | ||||||||||
Segment operating revenues | ||||||||||||
Service | $ | 6,943 | $ | 7,297 | (4.9 | ) % | ||||||
Equipment | 1,385 | 1,481 | (6.5 | ) | ||||||||
Total Segment Operating Revenues | 8,328 | 8,778 | (5.1 | ) | ||||||||
Segment operating expenses | ||||||||||||
Operations and support | 4,912 | 5,541 | (11.4 | ) | ||||||||
Depreciation and amortization | 922 | 1,002 | (8.0 | ) | ||||||||
Total Segment Operating Expenses | 5,834 | 6,543 | (10.8 | ) | ||||||||
Segment Operating Income | 2,494 | 2,235 | 11.6 | |||||||||
Equity in Net Income (Loss) of Affiliates | - | - | - | |||||||||
Segment Contribution | $ | 2,494 | $ | 2,235 | 11.6 | % |
The following table highlights other key measures of performance for the Consumer Mobility segment: | ||||||||||||
First Quarter | ||||||||||||
2016 | 2015 | Percent Change | ||||||||||
(in 000s) | ||||||||||||
Consumer Mobility Subscribers | ||||||||||||
Postpaid | 28,294 | 30,216 | (6.4 | ) % | ||||||||
Prepaid | 12,171 | 10,037 | 21.3 | |||||||||
Branded | 40,465 | 40,253 | 0.5 | |||||||||
Reseller | 13,313 | 13,581 | (2.0 | ) | ||||||||
Connected devices 1 | 896 | 993 | (9.8 | ) | ||||||||
Total Consumer Mobility Subscribers | 54,674 | 54,827 | (0.3 | ) | ||||||||
Consumer Mobility Net Additions 2 | ||||||||||||
Postpaid | (4) | 144 | - | |||||||||
Prepaid | 500 | 98 | - | |||||||||
Branded Net Additions | 496 | 242 | - | |||||||||
Reseller | (378) | (269) | (40.5 | ) | ||||||||
Connected devices 1 | (26) | (79) | 67.1 | |||||||||
Consumer Mobility Net Subscriber Additions | 92 | (106) | - | |||||||||
Total Churn 2, 3 | 2.11% | 2.04% | 7 BP | |||||||||
Postpaid Churn 2, 3 | 1.24% | 1.20% | 4 BP | |||||||||
1 Includes data-centric devices such as session-based tablets, monitoring devices and automobile systems. Excludes postpaid tablets. | ||||||||||||
2 Excludes migrations between AT&T segments and/or subscriber categories and acquisition-related additions during the period. | ||||||||||||
3 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. |
· | Selling and commission expenses decreased $205 primarily due to lower sales volumes and lower average commission rates, including those paid under the AT&T Next program, combined with fewer upgrade transactions. |
· | Equipment costs decreased $120 primarily due to a decrease in postpaid handset volumes partially offset by the sale of more devices to prepaid subscribers. |
· | Network costs decreased $115 primarily due to lower interconnect costs resulting from our ongoing network transition to more efficient Ethernet/IP-based technologies. |
· | Other administrative expenses decreased $73 primarily due to lower technology and development costs. |
International | ||||||||||||
Segment Results | ||||||||||||
First Quarter | ||||||||||||
2016 | 2015 | Percent Change | ||||||||||
Segment operating revenues | ||||||||||||
Video entertainment | $ | 1,130 | $ | - | - | |||||||
Wireless | 455 | 215 | - | |||||||||
Equipment | 82 | 21 | - | |||||||||
Total Segment Operating Revenues | 1,667 | 236 | - | |||||||||
Segment operating expenses | ||||||||||||
Operations and support | 1,588 | 218 | - | |||||||||
Depreciation and amortization | 277 | 28 | - | |||||||||
Total Segment Operating Expenses | 1,865 | 246 | - | |||||||||
Segment Operating Income (Loss) | (198) | (10) | - | |||||||||
Equity in Net Income of Affiliates | 14 | - | - | |||||||||
Segment Contribution | $ | (184) | $ | (10) | - |
First Quarter | ||||||||||||
Percent | ||||||||||||
(in 000s) | 2016 | 2015 | Change | |||||||||
Mexican Wireless Subscribers | ||||||||||||
Postpaid | 4,405 | 1,646 | - | |||||||||
Prepaid | 4,445 | 3,590 | 23.8 | |||||||||
Branded | 8,850 | 5,236 | 69.0 | |||||||||
Reseller | 363 | 492 | (26.2 | ) | ||||||||
Total Mexican Wireless Subscribers | 9,213 | 5,728 | 60.8 | |||||||||
Mexican Wireless Net Additions | ||||||||||||
Postpaid | 116 | - | - | |||||||||
Prepaid | 450 | - | - | |||||||||
Branded Net Additions | 566 | - | - | |||||||||
Reseller | (37 | ) | - | - | ||||||||
Mexican Wireless Net Subscriber Additions | 529 | - | - | |||||||||
Latin America Satellite Subscribers | ||||||||||||
PanAmericana | 7,094 | - | - | |||||||||
SKY Brazil | 5,342 | - | - | |||||||||
Total Latin America Satellite Subscribers | 12,436 | - | - | |||||||||
Latin America Satellite Net Additions | ||||||||||||
PanAmericana | 28 | - | - | |||||||||
SKY Brazil | (101 | ) | - | - | ||||||||
Latin America Satellite Net Subscriber Additions | (73 | ) | - | - |
AT&T Mobility Results | ||||||||||||
First Quarter | ||||||||||||
2016 | 2015 | Percent Change | ||||||||||
Operating revenues | ||||||||||||
Service | $ | 14,798 | $ | 14,812 | (0.1 | ) % | ||||||
Equipment | 3,156 | 3,374 | (6.5 | ) | ||||||||
Total Operating Revenues | 17,954 | 18,186 | (1.3 | ) | ||||||||
Operating expenses | ||||||||||||
Operations and support | 10,624 | 11,472 | (7.4 | ) | ||||||||
EBITDA | 7,330 | 6,714 | 9.2 | |||||||||
Depreciation and amortization | 2,056 | 2,005 | 2.5 | |||||||||
Total Operating Expenses | 12,680 | 13,477 | (5.9 | ) | ||||||||
Operating Income | $ | 5,274 | $ | 4,709 | 12.0 | % |
The following table highlights other key measures of performance for AT&T Mobility: | ||||||||||||
First Quarter | ||||||||||||
2016 | 2015 | Percent Change | ||||||||||
(in 000s) | ||||||||||||
Wireless Subscribers 1 | ||||||||||||
Postpaid smartphones | 58,258 | 57,157 | 1.9 | % | ||||||||
Postpaid feature phones and data-centric devices | 18,880 | 19,018 | (0.7 | ) | ||||||||
Postpaid | 77,138 | 76,175 | 1.3 | |||||||||
Prepaid | 12,171 | 10,037 | 21.3 | |||||||||
Branded | 89,309 | 86,212 | 3.6 | |||||||||
Reseller | 13,378 | 13,595 | (1.6 | ) | ||||||||
Connected devices 2 | 27,758 | 21,965 | 26.4 | |||||||||
Total Wireless Subscribers | 130,445 | 121,772 | 7.1 | |||||||||
Net Additions 3 | ||||||||||||
Postpaid | 129 | 441 | (70.7 | ) | ||||||||
Prepaid | 500 | 98 | - | |||||||||
Branded Net Additions | 629 | 539 | 16.7 | |||||||||
Reseller | (400) | (266) | (50.4 | ) | ||||||||
Connected devices 2 | 1,552 | 945 | 64.2 | |||||||||
Net Subscriber Additions | 1,781 | 1,218 | 46.2 | |||||||||
Branded Smartphones | 68,271 | 64,047 | 6.6 | |||||||||
Mobile Share connections | 59,372 | 55,581 | 6.8 | |||||||||
Smartphones under our installment program at end of period | 28,548 | 18,540 | 54.0 | |||||||||
Smartphones sold under our installment program during period | 4,135 | 4,065 | 1.7 | % | ||||||||
Total Churn 4 | 1.42% | 1.40% | 2 BP | |||||||||
Branded Churn 4 | 1.63% | 1.59% | 4 BP | |||||||||
Postpaid Churn 4 | 1.10% | 1.02% | 8 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 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 | ) % |
International | |||||||||||
Segment Results | |||||||||||
First Quarter | |||||||||||
2015 | 2014 | Percent Change | |||||||||
Total Segment Operating Revenues | $ | 236 | $ | - | - | % | |||||
Segment operating expenses | |||||||||||
Operations and support | 219 | - | - | ||||||||
Depreciation and amortization | 44 | - | - | ||||||||
Total Segment Operating Expenses | 263 | - | - | ||||||||
Segment Income (Loss) | $ | (27 | ) | $ | - | - | % |
AT&T Business Solutions | |||||||||||
Operating Revenues | |||||||||||
First Quarter | |||||||||||
2015 | 2014 | Percent Change | |||||||||
ABS operating revenues | |||||||||||
Wireless | $ | 9,445 | $ | 9,032 | 4.6 | % | |||||
Wireline | 8,288 | 8,670 | (4.4 | ) | |||||||
Total ABS Operating Revenues | $ | 17,733 | $ | 17,702 | 0.2 | % |
· |
· |
· |
· |
· | February redemption of $1,250 of AT&T Floating Rate Notes due 2016. |
· | March prepayment of the remaining $1,000 of the outstanding advances under the $2,000 18-month credit agreement (the "18-month Credit Agreement") by and between AT&T and Mizuho. (See "Credit Facilities" below). |
· | $750 of 2.300% global notes due 2019. |
· | $750 of 2.800% global notes due 2021. |
· | $1,100 of 3.600% global notes due 2023. |
· | $900 of 4.125% global notes due 2026. |
· | $500 of 4.800% global notes due 2044. |
· | $1,000 of annual put reset securities issued by BellSouth that may be put back to us each April until maturity in 2021. No such put was exercised during April |
· | An accreting zero-coupon note |
· | at a variable annual rate equal to (i) the highest of: (a) the base rate of the bank affiliate of Citibank, N.A. which is serving as administrative agent under the Agreement, (b) 0.50% per annum above the Federal Funds Rate, and (c) the LIBOR applicable to U.S. dollars for a period of one month plus 1.00% per annum, plus (ii) an applicable margin, as set forth in the Revolving Credit Agreement ("Applicable Margin for Base Advances"); or |
· | at a rate equal to: (i) LIBOR for a period of one, two, three or six months, as applicable, plus (ii) the Applicable Margin ("Applicable Margin for Eurocurrency Rate Advances"). |
· | 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 |
· | 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, local, federal and/or foreign regulatory and tax laws and regulations, or changes to existing standards and actions by tax agencies and judicial authorities including the resolution of disputes with any taxing jurisdictions, 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 including from governmental networks and other providers and the resulting pressure on customer and access line totals and |
· | Our ability to develop attractive and profitable product/service offerings to offset increasing |
· | 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 maintain margins, attract and offer a diverse portfolio of wireless service and devices and device financing |
· | 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, without limitation, patent and product safety claims by or against third parties. |
· | The impact from major equipment failures on our networks, |
· | The issuance by the Financial Accounting Standards Board or other accounting oversight bodies of new accounting standards or changes to existing standards. |
· |
· | 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 |
42 AT&T INC. MARCH 31, 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.
43 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.
44 |