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T · AT&T INC.

37 filings

10-K

T 10-K Annual Reports

AT&T INC. - 37 annual reports

Filing record · 2016–202610-K1110-Q348-K281

2025
AT&T INC. Annual Report, Year Ended Dec 31, 2025
AT&T Inc.'s 2025 Annual Report (10-K) indicates a year of significant revenue growth, driven primarily by its Communications segment, which accounts for approximately 97% of total segment operating revenues. The company saw increased revenues in its Mobility and Consumer Wireline businesses, bolstered by subscriber growth and expanded fiber and fixed wireless offerings. While the Business Wireline segment experienced revenue declines due to a shift away from legacy services, the overall growth in Communications, coupled with improved operating income margins, demonstrates the company's strategic focus on high-growth areas. The company continues to invest heavily in its 5G and fiber networks, anticipating that these investments will fuel future demand and revenue. A notable event during the year was the sale of AT&T's remaining interest in DIRECTV, which contributed a substantial gain to 'Other income (expense) – net' and improved the company's financial flexibility. Management remains focused on operational efficiencies and cost transformation initiatives, expecting these to continue offsetting investments in network expansion and technological advancements, including AI.
Feb 9, 2026
2024
AT&T INC. Annual Report, Year Ended Dec 31, 2024
AT&T Inc. reported a net income of $10.9 billion for the fiscal year ending December 31, 2024, a decrease from $14.4 billion in the prior year. Total operating revenues remained relatively flat year-over-year at $122.3 billion. The Communications segment, which represents the vast majority of the company's revenue and operating income, saw a slight decline in total segment operating revenues by 0.3%, primarily driven by a 9.9% decrease in Business Wireline revenues, which is attributed to lower demand for legacy services. However, this was partially offset by growth in Mobility service revenue and Consumer Wireline business. The company is strategically focusing on its 5G and fiber network expansion as key growth drivers. Capital expenditures were $20.3 billion in 2024, down from $17.9 billion in 2023, with expectations for similar investment levels in 2025. AT&T continues its transition away from its legacy copper network, migrating customers to fiber and wireless alternatives. The company also reported a significant goodwill impairment charge of $4.4 billion related to its Business Wireline reporting unit due to faster-than-anticipated declines in legacy services. Financially, AT&T's debt levels continued to be managed, with total debt decreasing to $123.5 billion from $137.3 billion. The company also returned value to shareholders through dividends, paying $8.2 billion in 2024. Looking ahead, AT&T anticipates continued revenue growth in wireless and broadband services, supported by ongoing network investments. The company remains committed to cost transformation initiatives and operational efficiencies to drive future profitability.
Feb 12, 2025
2023
AT&T INC. Annual Report, Year Ended Dec 31, 2023
AT&T Inc. reported solid revenue growth of 1.4% to $122.4 billion for the fiscal year 2023, driven primarily by its Communications segment. The Mobility and Consumer Wireline divisions showed particular strength, with Mobility service revenues increasing 4.4% and Consumer Wireline broadband revenues growing 8.1%, indicating strong customer demand for wireless and fiber services. The company continues to invest heavily in its 5G and fiber networks, aiming to capitalize on the increasing demand for high-speed connectivity and integrated services. Despite revenue growth, the company highlighted ongoing transformation efforts and strategic investments, including the deployment of Open RAN technology, which are expected to pressure expense trends in 2024. AT&T is focused on efficiency and cost transformation initiatives to support its growth objectives and maintain a competitive edge in the evolving telecommunications landscape. Financially, AT&T has managed its debt levels, with total debt at $137.3 billion at year-end 2023. The company generated significant cash from operating activities, $38.3 billion, which was used to fund capital expenditures of $19.7 billion and dividend payments of $8.1 billion. The company's strategic focus on fiber and 5G deployment positions it for future growth, although competition remains intense across its business segments. Investors should monitor the company's ability to execute its strategic initiatives while managing operational costs and capital expenditures effectively.
Feb 23, 2024
2022
AT&T INC. Annual Report, Year Ended Dec 31, 2022
AT&T Inc. reported a decrease in total operating revenues for the fiscal year ending December 31, 2022, primarily due to the separation of its U.S. video business and other divestitures. While Mobility and Consumer Wireline segments showed growth, Business Wireline experienced a decline. The company incurred significant non-cash goodwill impairments in 2022, particularly in Business Wireline, Consumer Wireline, and Mexico segments, driven by higher interest rates and secular declines. AT&T continues to focus on its core growth areas of 5G and fiber, investing heavily in network expansion and enhancements. Financially, the company saw a decrease in cash provided by operating activities, partly attributed to working capital impacts and higher payments for wireless devices. Significant financing activities included debt repayment and dividend payments, with a focus on managing debt levels in 2023. AT&T maintained compliance with its debt covenants, and liquidity remains available through its credit facilities. The company's strategic priorities for 2023 include continued wireless subscriber momentum, 5G deployment, fiber footprint expansion, and cost transformation initiatives to drive efficiency.
Feb 13, 2023
2021
AT&T INC. Annual Report, Year Ended Dec 31, 2021
AT&T Inc. reported revenues of $168.9 billion for the fiscal year ending December 31, 2021, a slight decrease from the previous year, primarily due to the separation of its U.S. video operations and the sale of its Latin America video operations. The company is strategically focusing on its core growth areas: 5G, fiber, and HBO Max. Significant progress has been made in expanding its fiber broadband footprint, adding over one million customers in 2021, and continuing its nationwide 5G deployment. Financially, AT&T is managing its debt levels, aiming to reduce leverage. The company announced plans to separate its WarnerMedia segment by combining it with Discovery, Inc., a transaction expected to close in the second quarter of 2022, which will reshape the company's media and entertainment assets. Despite ongoing investments in network upgrades and content, AT&T remains committed to returning value to shareholders through dividends and share repurchases, while navigating a competitive market and evolving consumer preferences.
Feb 16, 2022
2020
AT&T INC. Annual Report, Year Ended Dec 31, 2020
AT&T Inc.'s 2020 10-K filing reveals a challenging year marked by a significant decrease in operating revenues, primarily driven by the impacts of the COVID-19 pandemic across all segments. The company experienced substantial asset impairments, particularly related to its video business, leading to a net loss for the year. Despite these headwinds, AT&T continued to invest in strategic growth areas like 5G deployment and the HBO Max streaming platform, which showed subscriber growth. The Communications segment, representing the largest portion of revenue, saw a slight decline but maintained stable operating contribution, with the Mobility unit showing resilience and growth in connected devices. WarnerMedia's revenue was significantly impacted by pandemic-related disruptions to content releases and advertising. Latin America also faced revenue declines due to economic and foreign exchange factors. Looking ahead, AT&T anticipates continued revenue growth in wireless and broadband, driven by 5G and fiber expansion, while expecting ongoing pressure on WarnerMedia's results due to strategic content distribution decisions. The company remains focused on debt management and reinvesting savings into growth areas.
Feb 25, 2021
2019
AT&T INC. Annual Report, Year Ended Dec 31, 2019
AT&T's 2019 10-K filing reveals a company navigating significant strategic shifts, most notably the integration of its Time Warner acquisition. The Communications segment, comprising wireless, video, and wireline services, remained the largest revenue contributor, though it faced pressure from legacy services. The company is heavily investing in its 5G network, expecting it to drive future growth and device upgrades. The WarnerMedia segment, bolstered by the Time Warner acquisition, saw substantial revenue increases but also increased operating expenses. Latin America operations experienced revenue declines, largely due to foreign exchange pressures. Financially, AT&T is focused on managing its debt levels and returning value to shareholders through dividends and share repurchases. The company is actively managing its capital expenditures, with a significant portion dedicated to network enhancements, particularly 5G deployment. Despite ongoing investments and the integration of new businesses, AT&T aims to leverage its diverse service offerings and infrastructure to drive future growth and profitability in an increasingly competitive landscape.
Feb 20, 2020
2018
AT&T INC. Annual Report, Year Ended Dec 31, 2018
AT&T's FY2018 10-K (filed February 20, 2019) is dominated by the June 14, 2018 acquisition of Time Warner (now WarnerMedia), which transformed the company's scale and balance sheet. Consolidated operating revenues rose 6.4% to $170.8 billion and operating income climbed 30.7% to $26.1 billion, but the increase was driven by acquisition accounting and the adoption of ASC 606 rather than organic growth. Net income attributable to AT&T fell 34.2% to $19.4 billion, largely because 2017 benefited from a $20.3 billion one-time tax reform benefit, and diluted EPS dropped to $2.85 from $4.76. Pre-tax income and total assets ($531.9 billion, up from $444.1 billion) reflect the Time Warner deal, and the company issued roughly 1.13 billion shares to Time Warner holders. Leverage rose sharply. Total debt reached $176.5 billion, the debt ratio was 47.7% (versus 53.6% in 2017, which was inflated by bridge financing), and the net debt ratio was 46.2%. Management is prioritizing debt reduction, with a February 2019 bond issuance and about $4.1 billion of notes called for redemption, plus repayment of Time Warner acquisition term loans. Cash from operations increased to $43.6 billion, supported by acquired businesses and working-capital actions, while capital expenditures were roughly $21.3 billion and 2019 total capital investment is guided to about $23 billion. Dividends were raised to $0.51 per quarter ($2.01 for 2018), and the company used $9.9 billion of asset monetizations in 2018. Segment performance was mixed. Communications, still about 84% of segment revenue, saw revenue decline 3.8% as legacy voice and data, linear video, and Entertainment Group subscribers fell, partly offset by Mobility growth. WarnerMedia contributed $18.9 billion of revenue in its partial year and $5.7 billion of segment contribution, while Latin America remained loss-making at $(710) million, driven by Mexico. Management expects continued linear video and legacy wireline pressure in 2019, offset by wireless, broadband, and WarnerMedia growth, and it flagged the pending DOJ appeal of the Time Warner merger, a securities class action over DIRECTV NOW subscriber disclosures, and integration risk as key uncertainties.
Feb 20, 2019
2017
AT&T INC. Annual Report, Year Ended Dec 31, 2017
AT&T's 2017 Form 10-K shows a year dominated by a $20.3 billion one-time non-cash income tax benefit from the Tax Cuts and Jobs Act, which drove reported net income to $29.4 billion (diluted EPS $4.76), versus $13.0 billion ($2.10) in 2016. Excluding that benefit, the underlying business was under pressure: consolidated revenues fell 2.0% to $160.5 billion, operating income declined 14.0% to $20.9 billion (operating margin 13.0% vs. 14.9%), largely due to a $2.9 billion non-cash copper asset abandonment charge and higher natural disaster costs. Service revenues dropped 2.2%, with legacy wireline voice and data declines and lower wireless service revenue from unlimited plans only partly offset by growth in video, fixed strategic services and connected devices. Balance sheet leverage rose sharply in anticipation of the pending $85.4 billion Time Warner acquisition. Total debt reached $164.3 billion (versus $123.5 billion a year earlier), cash on hand climbed to $50.5 billion, and the debt ratio increased to 53.6%. Operating cash flow was roughly flat at $39.2 billion, while dividends paid rose to $12.0 billion ($1.97 per share declared). Management guided to roughly $25 billion of 2018 capex, a 23% effective tax rate, and continued pressure on legacy and wireless service revenues. The Department of Justice antitrust lawsuit against the Time Warner deal, with trial set for March 19, 2018, is the most important binary risk for investors. Investors should weigh the reported earnings jump as largely non-recurring, focus on the underlying operating decline and rising leverage, and track the Time Warner litigation outcome, the FirstNet build-out commitments, and the 2018 tax-reform-driven cash tax savings.
Feb 20, 2018
2016
AT&T INC. Annual Report, Year Ended Dec 31, 2016
AT&T's 2016 10-K shows a company in transition. Revenue rose 11.6% to $163.8 billion, driven mainly by the July 2015 acquisition of DIRECTV (full-year contribution in 2016 versus 160 days in 2015) and the 2015 Mexican wireless acquisitions. Operating income fell 1.8% to $24.3 billion, and operating margin declined to 14.9% from 16.9%, largely because of higher amortization of acquired intangibles ($5.2 billion, up from $2.7 billion), higher content and programming costs, and a pension/postretirement actuarial loss of $1.0 billion versus a gain of $2.2 billion in 2015. Net income attributable to AT&T declined 2.8% to $12.98 billion, and diluted EPS was $2.10 versus $2.37, though the share count rose sharply following the DIRECTV stock issuance (weighted diluted shares of 6.19 billion versus 5.65 billion). Cash generation remained strong: operating cash flow reached $39.3 billion, and free cash flow after $21.5 billion of capex was roughly $17.8 billion, which covered dividends of $11.8 billion. Dividends declared were $1.93 per share, and the quarterly rate was raised 2.1% to $0.49. Leverage is elevated: total debt stands at $123.5 billion, the debt ratio is 49.9%, and the company has been downgraded in credit ratings. The company also committed to acquire Time Warner for roughly $108.7 billion including net debt, financed with about $40 billion of bridge and term loans. Closing is expected before year-end 2017, subject to DOJ review, and a $1.725 billion termination fee is payable to AT&T under certain circumstances. The operating outlook is mixed. Management expects wireless equipment revenue pressure as customers hold handsets longer, continued pricing pressure in wireless and video, and ongoing declines in legacy wireline voice and data. It expects margin expansion from lower subsidy costs and network modernization, and it projects 2017 capex of about $22 billion. Significant legal and regulatory exposure remains, including FTC and DOJ actions involving DIRECTV and the FCC's broadband classification order, and the Time Warner deal introduces substantial integration and financing risk.
Feb 17, 2017
2015
AT&T INC. Annual Report, Year Ended Dec 31, 2015
AT&T's fiscal 2015 10-K, filed February 18, 2016, shows a company transformed by its July 2015 acquisition of DIRECTV and its purchase of wireless operations in Mexico. Consolidated operating revenues rose 10.8% to $146.8 billion, and operating income more than doubled to $24.8 billion, though this was flattered by a $2.2 billion noncash pension actuarial gain versus a $7.9 billion loss in 2014. Net income attributable to AT&T was $13.3 billion, or $2.37 per diluted share, versus $1.24 in 2014. Excluding the pension swing, the picture is more mixed: operating margin was 16.9% in 2015, and the DIRECTV and Mexico acquisitions added significant integration costs, amortization, and interest expense. The balance sheet and capital structure changed materially. Total assets grew to $402.7 billion from $296.8 billion, and total debt rose to $126.2 billion from $81.8 billion. The debt ratio climbed to 50.5% from 47.5%. Management has said its priority is to use free cash flow after dividends to pay down debt, and the company issued $6 billion of new long-term debt in February 2016. The dividend was raised 2.1% to $0.48 per quarter, and the company paid $10.2 billion in dividends in 2015, a large cash commitment given the higher leverage. Share count rose sharply to about 6.1 billion shares outstanding at year-end from 5.2 billion, because roughly 954 million shares were issued to DIRECTV shareholders. Operationally, wireless remains the core earnings engine, though growth is slowing. Postpaid phone ARPU fell 4.0%, and management expects continued pricing pressure, with the end of subsidized handsets in late December 2015 shifting revenue from service to equipment. Regulatory risk is elevated: the FCC's February 2015 reclassification of broadband as a Title II service is under appeal, and the FTC and FCC have pending actions over AT&T's unlimited data plan throttling and DIRECTV's marketing. The company also faces spectrum constraints and an upcoming 600 MHz auction scheduled to begin March 29, 2016.
Feb 18, 2016
2014
AT&T INC. Annual Report, Year Ended Dec 31, 2014
AT&T's FY2014 10-K shows a year dominated by non-operating and one-time items rather than core growth. Reported operating revenue rose 2.9% to $132.4 billion, driven by a 47.5% jump in equipment revenue as customers shifted to AT&T Next installment plans, while service revenue slipped 0.7% to $118.4 billion. Operating income fell 61.5% to $11.7 billion, mainly because of a $7.9 billion noncash pension/postretirement actuarial loss (versus a $7.6 billion gain in 2013) and a $2.1 billion noncash charge for abandoning copper network assets. Net income attributable to AT&T dropped 65.9% to $6.2 billion, or $1.19 per diluted share, versus $3.39 in 2013. Excluding these items, the underlying trend is more mixed: wireless segment income fell 4.7%, wireline segment income fell 10.2%, and postpaid phone-only ARPU declined 6.6%, reflecting heavier competition and the move to no-subsidy plans. Balance sheet leverage increased meaningfully. Total debt rose to $82.1 billion and the debt ratio climbed to 48.6% from 45.0%, as AT&T issued $16.0 billion of long-term debt and bought spectrum. Operating cash flow fell to $31.3 billion from $34.8 billion. Dividends were raised to $0.47 per quarter, and buybacks were minimal at $1.6 billion. Subsequent events matter heavily for the outlook: the pending $48.5 billion DIRECTV acquisition, the $18.2 billion AWS-3 spectrum win (of which about $14.6 billion was still due in March 2015), and the GSF Telecom and NII Holdings Mexican wireless acquisitions. Management has said free cash flow after dividends will go to debt paydown once DIRECTV closes, and it expects operating margins to expand in 2015. For investors, the key questions are whether the company can absorb a heavier debt load while still growing dividends, whether wireless ARPU and churn pressure stabilize as installment plans mature, and whether the DIRECTV and Mexico integrations deliver the projected synergies. Regulatory risk is also elevated, including the FCC's possible reclassification of broadband under Title II, an FTC suit over the Maximum Bit Rate program, and labor contracts covering about 41,000 non-Mobility employees expiring in 2015.
Feb 20, 2015
2013
AT&T INC. Annual Report, Year Ended Dec 31, 2013
AT&T's 2013 10-K shows a sharp rebound in reported profitability, driven largely by non-cash items. Operating income rose to $30,479 million from $12,997 million in 2012, and net income attributable to AT&T climbed to $18,249 million ($3.39 per diluted share) from $7,264 million ($1.25). Roughly $7,584 million of the operating income improvement came from a non-cash actuarial gain on pension and postretirement plans, versus a $9,994 million actuarial loss in 2012. Excluding these pension swings, the underlying business grew more modestly: revenues increased 1.0% to $128,752 million, driven by wireless data (up 18.7%) and U-verse/strategic business services, while voice revenues continued to decline (down 10.1% in wireline voice). Segment trends diverged. Wireless remained the profit engine, delivering 76% of 2013 segment income with segment operating income up 8.0%, and the company ended the year with 110.4 million wireless subscribers. Wireline segment operating income fell 13.4% as legacy voice erosion outpaced U-verse growth, and management expects continued wireline margin pressure in 2014. Capital allocation was active: AT&T repurchased 366 million shares for $13,028 million, paid $9,696 million in dividends, and raised the quarterly dividend 2.2% to $0.46. Free cash flow is tightening, however, as operating cash flow fell to $34,796 million from $39,176 million and capital expenditures rose to roughly $21 billion, with management guiding to lower operating cash flow in 2014. Balance sheet and portfolio moves matter for investors. Total debt rose to $74,788 million and the debt ratio climbed to 45.0% from 43.0%, reflecting borrowings and share buybacks. Management also monetized assets, including a $4,827 million tower transaction with Crown Castle and a $2,000 million agreed sale of Connecticut wireline operations, and pursued spectrum and wireless acquisitions (including the pending Leap Wireless deal for about $1,260 million plus debt). A $2.7 billion pension-related lump sum payout and a preferred equity contribution of $9,104 million to the pension trust also shape future cash obligations.
Feb 21, 2014
2012
AT&T INC. Annual Report, Year Ended Dec 31, 2012
AT&T's 2012 10-K shows a company with growing wireless and IP data businesses offsetting steep declines in traditional voice revenue. Consolidated operating revenues rose 0.6% to $127.4 billion, despite a $2.2 billion revenue reduction from the May 2012 sale of the Advertising Solutions (directory) segment. Operating income rose 41% to $13.0 billion, but that figure absorbed a $9.99 billion non-cash actuarial loss on pension and retiree benefit plans. Net income attributable to AT&T was $7.26 billion, or $1.25 per diluted share, versus $0.66 in 2011, which was depressed by goodwill impairment and T-Mobile termination charges. Excluding these items, the underlying trend is more modest: wireless segment income grew 6.1% and wireline segment income grew 1.0%. Wireless is the growth engine, with 107 million subscribers (up 3.6%) and data service revenue up 17.8% to $26 billion. Voice and other wireless service revenue fell 4.2%. Wireline voice revenue dropped 10.0% as switched access lines fell 13.2%, while data revenue rose 7.6% on U-verse and strategic business services. Management expects 2013 revenue growth driven by wireless, and it guided to roughly $21 billion in capital expenditures for 2013, rising to about $22 billion annually in 2014 and 2015 under Project VIP, a broadband network build-out. Capital allocation was shareholder-friendly. AT&T repurchased 371 million shares for $12.75 billion in 2012 and raised its quarterly dividend 2.3% to $0.45. Total debt rose to $69.8 billion and the debt ratio climbed to 43.0% from 38.0%. Key risks include spectrum constraints, intensifying competition, labor contract renewals in 2013, and a $13.9 billion pension funding gap that management plans to address with a proposed $9.5 billion preferred equity contribution.
Feb 22, 2013
2011
AT&T INC. Annual Report, Year Ended Dec 31, 2011
AT&T's 2011 10-K shows a year of sharp reported earnings decline driven largely by non-cash and one-time items rather than core operating deterioration. Revenue rose 2.0% to $126.7 billion, led by Wireless service growth (+6.0%) and wireline data (+7.4%), while wireline voice fell 11.3%. However, operating income dropped 52.9% to $9.2 billion, and net income attributable to AT&T fell 80.1% to $3.9 billion ($0.66 per diluted share, versus $3.35 in 2010). The decline reflects a $6.3 billion non-cash pension/OPEB actuarial loss, $4.2 billion of charges tied to the terminated T-Mobile acquisition (including a $3.0 billion breakup fee), and $2.9 billion of impairments in the Advertising Solutions directory business. The 2010 comparison was also inflated by an $8.3 billion one-time IRS tax settlement, which is why effective tax rates swung from (6.4)% to 37.7%. Underlying trends remain mixed. Wireless is the growth engine, with 103.2 million subscribers, data service revenue up 21%, and a segment margin of 24.2%, though margins compressed from higher smartphone subsidies and handset costs. Wireline is in structural decline, with switched access lines down 12.3% and segment operating income down 7.2%, partly offset by U-verse growth (3.8 million subscribers). Cash generation remained solid, with operating cash flow of $34.6 billion covering $20.1 billion of capex and $10.2 billion of dividends. Management expects 2012 revenue growth and an improving operating margin, with capex of roughly $20 billion, and it is authorizing up to 300 million share buybacks. Investors should weigh the spectrum constraints, rising competition, and the labor contract renewals covering about 120,000 employees in 2012.
Feb 24, 2012
2010
AT&T INC. Annual Report, Year Ended Dec 31, 2010
AT&T's 2010 10-K shows a company whose top-line growth is coming from wireless data and IP-based wireline services, while its legacy voice business continues to shrink. Operating revenues rose 1.4% to $124.3 billion, driven by wireless service revenue (up 10.2%) and wireline data (up 7.5%), offsetting a 12.4% decline in wireline voice revenue. Reported operating income fell 6.8% to $19.6 billion, but that comparison is distorted by a new pension accounting policy adopted in January 2011 that immediately recognizes actuarial gains and losses in operating results; the $2.5 billion actuarial loss in 2010 weighed on reported operating income. Net income attributable to AT&T rose 63.7% to $19.9 billion, boosted largely by an $8.3 billion income tax benefit from a 2010 IRS settlement on wireless restructuring, so the earnings jump should not be read as a run-rate improvement. Balance sheet and cash flow remain the core of the investment case. Operating cash flow was $35.0 billion and capital expenditures were $19.5 billion, leaving substantial free cash flow to fund dividends of $9.9 billion. Total debt fell to $66.2 billion from $72.1 billion, and the debt ratio improved to 37.1% from 41.4%. Management guided to 2011 capex in the low-to-mid $19 billion range, a $1.9 billion Lower 700 MHz spectrum purchase from Qualcomm, a dividend increase to $0.43 per quarter, and a new authorization to repurchase up to 300 million shares. Key risks flagged include continued access line losses (total switched lines down 11.6%), pricing pressure in wireless as the industry matures, U-verse deployment and municipal franchise disputes, and evolving FCC net neutrality and universal service rules. For investors, the main questions are whether wireless data growth can keep offsetting wireline erosion and whether margins stabilize as subsidized smartphone and integrated device costs rise. The company's 2011 outlook calls for revenue growth and an improved operating margin, but management also cautioned that a weak economy could pressure pricing and margins further.
Mar 1, 2011
2010
AT&T INC. Annual Report, Year Ended Feb 25, 2010
AT&T's 2009 10-K shows a company whose top line was roughly flat but whose profitability fell. Operating revenues were $123.0 billion, down 0.8% from $124.0 billion in 2008, while operating income fell 6.8% to $21.5 billion and the operating margin compressed from 18.6% to 17.5%. Diluted EPS was $2.12, down from $2.16, and net income attributable to AT&T was $12.5 billion, down 2.6%. The decline was driven by shrinking wireline voice revenue (down 13.4%) and print directory declines, along with higher pension and OPEB expense, partly offset by strong wireless service growth (up 9.6%) fueled by the Apple iPhone and data services (up 33.4%). The balance sheet and cash generation remain solid. Operating cash flow was $34.4 billion, which covered capital expenditures of $16.6 billion and dividends of $9.7 billion, leaving room for debt reduction. Total debt fell to $72.1 billion from $75.0 billion, and the debt ratio improved to 41.3% from 43.7%. The dividend was raised 2.4% to $0.42 per quarter, and management said it intends to focus on reducing debt in 2010. Management guided 2010 revenues to be stable, capital investment to $18-19 billion, and operating margins to be stable, with upside if the economy improves. Key risks include a challenging economic recession, continued access-line losses to cable, wireless, and VoIP competitors, regulatory uncertainty around U-verse video and net neutrality, labor contract renewals (with a possible work stoppage), and pressure on the wireless ARPU from declining voice revenue. The company also has pending acquisitions, including a roughly $2.35 billion purchase of wireless assets from Verizon, and recently closed the Centennial acquisition.
Feb 25, 2010
2009
AT&T INC. Annual Report, Year Ended Feb 25, 2009
AT&T's 2008 10-K shows a company that grew revenue modestly and operating income strongly, while its balance sheet took a large hit from pension losses and its core wireline voice business continued to erode. Consolidated operating revenues rose 4.3% to $124.0 billion, and operating income climbed 13.0% to $23.1 billion, with the operating margin expanding from 16.3% in 2006 to 18.6% in 2008. Net income increased 7.7% to $12.9 billion, and diluted EPS rose 11.3% to $2.16. Growth was driven by the wireless segment, which posted segment revenue up 15.6%, segment income up 58.4% to $10.8 billion, and a 77 million customer base that now accounts for 46% of segment income. Wireline, by contrast, saw segment income fall 7.0% as voice revenue declined 8.2% from access line losses to cable, VoIP and wireless substitution. The most important balance sheet development is the deterioration of retirement plan funding. Stockholders' equity fell from $115.4 billion to $96.3 billion, and the debt ratio rose from 35.7% to 43.8%, driven by a $16.7 billion swing in accumulated other comprehensive loss from pension and postretirement plan investment losses. Management expects pension and retiree benefit costs to rise significantly in 2009 and plans to focus on debt reduction rather than buybacks, having repurchased 164 million shares for $6.1 billion in 2008. Free cash flow was constrained by roughly $20 billion in capital expenditures, which included $9.5 billion for spectrum licenses, including the 700 MHz auction. Looking ahead, management guides to modest 2009 revenue growth driven by wireless and broadband, while acknowledging a challenging economy and rising competition. Key risks include a potential work stoppage as the CWA contracts for roughly 80,000 wireline employees expire in April 2009, municipal litigation over U-verse video deployment, and the pending Centennial Communications acquisition for about $944 million plus roughly $2 billion of net debt.
Feb 25, 2009
2008
AT&T INC. Annual Report, Year Ended Feb 26, 2008
AT&T's 2007 Form 10-K (filed February 27, 2008) shows a company transformed by the December 2006 BellSouth acquisition, which consolidated AT&T Mobility (formerly Cingular) and made 2007 the first full year of combined operations. Consolidated operating revenues rose 88.6% to $118.9 billion, operating income rose 98.3% to $20.4 billion, and net income climbed 62.5% to $11.95 billion, or $1.94 diluted EPS. Operating margin expanded from 16.3% in 2006 to 17.2% in 2007, which management attributes to merger synergies (roughly $3 billion in 2007), workforce reductions, and the higher-margin wireline operations acquired from BellSouth. Much of the revenue gain reflects acquisitions rather than organic growth; on a pro forma basis, which assumes the deals closed January 1, 2005, revenue grew only 1.6% in 2007. The balance sheet and cash flow profile also changed sharply. Long-term debt grew to $57.3 billion and total assets reached $275.6 billion, with goodwill and licenses rising substantially. Operating cash flow nearly doubled to $34.1 billion, but capital spending jumped to $17.7 billion and the company returned significant capital to shareholders through $10.4 billion in buybacks and $8.7 billion in dividends. Management guided to continued revenue growth in 2008 led by wireless and broadband, expects capital expenditures in the mid-teens as a percentage of revenue, and raised the quarterly dividend 12.7% to $0.40 per share. Key risks include access-line erosion from cable, wireless and VoIP competition, U-verse deployment execution and regulatory exposure, the NSA litigation, and the E911 location-accuracy order.
Feb 27, 2008
2006
AT&T INC. Annual Report, Year Ended Dec 31, 2006
AT&T's 2006 Form 10-K reports a transformational year driven by the December 29, 2006 acquisition of BellSouth, which gave AT&T 100% ownership of AT&T Mobility (formerly Cingular Wireless) and added nine southeastern states to its wireline footprint. Consolidated operating revenues rose 44.1% to $63.1 billion and operating income rose 66.8% to $10.3 billion, largely reflecting the full-year inclusion of AT&T Corp. (acquired November 2005). Net income increased 53.7% to $7.4 billion, or $1.89 per diluted share, though the 2006 results include only two days of BellSouth and AT&T Mobility operations, so the year is not a clean picture of the combined company's earnings power. Total assets roughly doubled to $270.6 billion and long-term debt rose to $50.1 billion, while the debt ratio improved to 34.1% as stockholders' equity grew to $115.5 billion through the stock-based acquisitions. The filing points to a shift in the business mix toward wireless and broadband/data. Wireline data revenues grew 68.3%, while wireline voice revenues, which are under structural pressure from access line losses to wireless, cable, and VoIP competitors, continued to decline on a same-store basis. Wireless ended the year with about 61 million customers, and ARPU fell 1.1% as prepaid and reseller mix increased, offset by a 44.8% rise in data revenue per customer. Management expects 2007 reported revenue to increase substantially as BellSouth and AT&T Mobility are consolidated for the full year, while acquisition-related costs will weigh on 2007 and 2008 expenses. Capital expenditures are guided to the mid-teens as a percentage of revenue, and Project Lightspeed (U-verse IPTV) is budgeted at roughly $4.6 billion through 2008. Investors should weigh several items: significant integration and amortization charges, including $3.997 billion in accumulated intangible amortization and an estimated $5.87 billion of amortization expense in 2007; regulatory and municipal franchising risk to the U-verse video rollout; ongoing NSA-related litigation; and a substantial shareholder return program, with 2007 share repurchases expected near $7.3 billion alongside a $3.2 billion debt issuance in February 2007 and a quarterly dividend raised 6.8% to $0.355.
Feb 26, 2007
2005
AT&T INC. Annual Report, Year Ended Dec 31, 2005
AT&T Inc. (formerly SBC Communications) closed its acquisition of AT&T Corp. (ATTC) on November 18, 2005, roughly doubling its scale in business and data services. Consolidated 2005 operating revenues grew 7.5% to $43.9 billion, but only 43 days of ATTC results are included, and net income fell 18.7% to $4.8 billion ($1.42 per diluted share, from $1.77). The decline was driven by lower equity income from international holdings, lower other income, and a sharp drop in the effective tax rate to 16.3%, which was helped by a $902 million one-time IRS settlement benefit. Operating income rose 4.5% to $6.2 billion, but the operating margin slipped to 14.1% from 14.5%, pressured by merger costs and a charge to terminate WilTel agreements. The core wireline business remains under structural pressure. Total switched access lines fell 5.6% to 49.4 million as customers shifted to wireless, cable, and VoIP, and the FCC's UNE-P rule changes continue to erode wholesale revenue. Growth came from data (up 18% to about 30% of consolidated revenue, with 6.9 million DSL lines) and long-distance. Cingular, the 60%-owned wireless joint venture, ended 2005 with 54.1 million customers and is now the largest U.S. wireless provider, though its results are reported only through equity income. Management guides to higher 2006 capital spending of $8.0-8.5 billion, about $4.4 billion of it for Project Lightspeed IP video and broadband, and expects pension and postretirement costs of $1.7-1.8 billion. For investors, the filing shows a company in transition with strong cash generation (operating cash flow of $13.0 billion) and a dividend of $1.30 per share, raised to $0.3325 quarterly. Debt rose to about $30 billion after assuming $8.3 billion of ATTC debt, and the debt ratio fell to 35.9%. The key questions are whether Project Lightspeed and merger synergies can offset access-line losses, and whether the expected workforce reductions and integration of ATTC deliver the planned savings.
Mar 1, 2006
2004
AT&T INC. Annual Report, Year Ended Dec 31, 2004
SBC Communications' 2004 Form 10-K (filed March 11, 2005) shows a company in transition: consolidated operating revenues were essentially flat at $40.8 billion (up 0.7%), while operating income fell 6.1% to $5.9 billion and diluted EPS was $1.77 (including $1.77 from discontinued operations and a $0.27 contribution from the Illinois/northwest Indiana directory sale). Income from continuing operations declined 15% to $4.98 billion. The decline was driven by a 2.0% rise in operating expenses, including growth-initiative costs, a labor strike and settlements, and a higher cost of sales, partly offset by lower pension and retiree medical costs. Wireline voice revenue fell 5.4% as retail access lines declined 4.3% to 52.4 million, while data revenue rose 8.2% on DSL growth to 5.1 million lines and long-distance voice grew 28.7%. Wireline segment income fell 10.3% and its operating margin dropped to 9.8%. The defining 2004 event was the October closing of Cingular's $41 billion acquisition of AT&T Wireless, which SBC funded with roughly $21.6 billion of equity contributions. That funding was largely financed by new debt and proceeds from the sale of Belgacom, TDC, and Telkom. Consolidated total assets rose to $108.8 billion, long-term debt rose to $21.2 billion, and the debt-to-total-capital ratio increased to 40.0% from 32.0%. Management expects 2005 operating margin to improve slightly and capital expenditures to rise to $5.4–5.7 billion to fund Project Lightspeed fiber deployment. Management also expects combined pension and retiree costs of $1.4–1.55 billion. The most important subsequent event is the January 30, 2005 agreement to acquire AT&T Corp. in a stock-for-stock deal valued at about $16 billion, with management estimating more than $15 billion in net synergy value. Closing is expected in late 2005 or early 2006 and is subject to shareholder, DOJ, and FCC approval. Management expects the deal to slow near-term revenue growth but to be accretive to EPS beginning in 2008. Regulatory uncertainty remains significant, particularly the December 2004 FCC unbundling rules that eliminated mandatory UNE-P access for mass-market customers, which SBC has challenged in court.
Mar 11, 2005
2003
AT&T INC. Annual Report, Year Ended Dec 31, 2003
SBC Communications Inc. (now AT&T Inc.) reported 2003 operating revenues of $40.84 billion, down 5.3% from $43.14 billion in 2002, and operating income of $6.47 billion, down 25.0% from $8.62 billion. Net income rose to $8.51 billion ($2.56 per diluted share) from $5.65 billion, but this was driven by a $2.54 billion net benefit from accounting changes (a $3.68 billion gain from adopting FAS 143, partly offset by a $1.14 billion directory accounting charge). Income before extraordinary item and cumulative effect of accounting changes was $5.97 billion ($1.80 per diluted share), down from $7.47 billion. The filing attributes the operating decline mainly to a $1.92 billion increase in combined net pension and postretirement cost and the continuing loss of retail access lines to UNE-P wholesale lines. Net income also benefited from a $1.57 billion gain on the sale of the Cegetel interest. The wireline segment, which provides about 65% of 2003 revenues, faces continued pressure: total switched access lines fell 4.2% to 54.7 million, while DSL lines grew to about 3.5 million. Management expects a 2004 capital budget of $5.0 to $5.5 billion and combined pension and postretirement cost of $1.0 to $1.4 billion. Regulatory uncertainty is significant, as the D.C. Circuit's March 2, 2004 decision overturned portions of the FCC's Triennial Review Order, including mass-market switching and UNE-P, with the effect still unclear. The most significant subsequent event is Cingular's February 17, 2004 agreement to acquire AT&T Wireless for about $41 billion in cash. SBC expects to contribute about $25 billion, funded primarily with debt, cash on hand, operating cash flow and asset sales. The filing notes this may initially reduce net income through integration costs and higher financing costs, and that the transaction requires shareholder and federal regulatory approval.
Mar 11, 2004
2002
AT&T INC. Annual Report, Year Ended Dec 31, 2002
SBC Communications Inc. reported 2002 operating revenues of $43.14 billion, down 6.0% from $45.91 billion in 2001, and operating income of $8.62 billion, down from $10.51 billion. The decline was attributed primarily to lost retail access lines to below-cost UNE-P wholesale lines, a weak U.S. economy, and increased competition including technology substitution. Net income was $5.65 billion, or $1.69 per diluted share, after a $1.82 billion non-cash cumulative effect charge from adopting FAS 142 (goodwill impairment, primarily $1.79 billion at Sterling Commerce). Income before extraordinary items and accounting changes rose to $7.47 billion from $7.03 billion, aided by gains on international investments, including the Bell Canada redemption. Cash generation remained strong, with operating cash flow of $15.21 billion and capital expenditures cut to $6.81 billion from $11.19 billion. Management expects 2003 capital spending of $5 to $6 billion and expects total consolidated revenue to decline slightly in 2003, with total operating expenses rising significantly due mainly to pension and postretirement costs estimated at $1.8 to $2.0 billion. Long-term debt was $18.54 billion at year-end, and the debt ratio fell to 39.9% from 44.3%. The company also sold its Cegetel stake to Vodafone for about $2.27 billion in January 2003. The filing highlights significant regulatory uncertainty. The FCC's February 2003 Triennial Review, whose full text was not yet released when the filing was made, largely defers UNE-P decisions to the states. Management stated it expects the decision may have an overall unfavorable effect on results. The company also disclosed a pending 2001 comprehensive review and ongoing antitrust class actions, though it believes an adverse material outcome is unlikely.
Mar 14, 2003
2001-A3
AT&T INC. Annual Report (Amendment), Year Ended Dec 31, 2001
This filing is a Form 10-K/A that amends the 2001 Annual Report of SBC Communications Inc. (the prompt refers to it as AT&T Inc., ticker T; SBC later renamed itself AT&T Inc. and kept the ticker). It adds no consolidated financial statements, segment data, or management discussion. Instead, it attaches Form 11-K annual reports for three employee retirement plans: the SBC Savings Plan, the SBC Savings and Security Plan, and the Ameritech Savings and Security Plan for Non-Salaried Employees. The filing was signed by CFO Randall Stephenson on June 28, 2002. The plan data mainly reflects the 2001 decline in SBC's stock price. Net assets in the SBC Savings Plan rose to $6.90 billion from $5.73 billion, largely because the Ameritech plan merged in, bringing in about $3.23 billion of transferred assets. Net depreciation on investments was $1.08 billion, and the plan paid out $1.40 billion in distributions. The SBC Savings and Security Plan fell to $4.00 billion from $4.63 billion, and the Ameritech plan fell to $2.09 billion from $2.57 billion. Both reported large investment depreciation, driven mainly by losses on SBC common shares. For investors, the filing's main significance is governance and employee-benefit disclosure rather than company performance. The most notable item is a January 1, 2002 plan amendment that shortened vesting from five years to three years and raised maximum employee contributions from 16% to 30% of pay. The filing also documents the transfer of employees and about $125 million of plan assets to the Cingular Wireless joint venture with BellSouth, and it reports that the IRS determination letter for the plans is still pending.
Jun 28, 2002
2001-A
AT&T INC. Annual Report (Amendment), Year Ended Dec 31, 2001
This document is an amendment to AT&T Inc.'s (formerly SBC Communications Inc.) 2001 Form 10-K, specifically detailing the financial statements and supplemental schedules for the SBC Savings and Security Plan for the fiscal year ended December 31, 2001. The plan's net assets available for benefits decreased by approximately $635 million from $4.63 billion in 2000 to $4.00 billion in 2001, primarily due to a net depreciation in the fair value of investments totaling $637.8 million. Despite this investment depreciation, the plan saw significant additions through participant and employer contributions, totaling over $332 million, along with investment income of $111.8 million. The plan also paid out $430.3 million in distributions to participants. A notable event during the year was the repayment in full of ESOP Notes previously guaranteed by SBC, eliminating the plan's long-term debt. Additionally, the plan merged with the Woodbury Telephone Company Union 401(k) Plan and facilitated the transfer of assets for employees who became Cingular employees.
Jun 27, 2002
2001-A2
AT&T INC. Annual Report (Amendment), Year Ended Dec 31, 2001
This 10-K/A filing for the SBC Savings Plan as of December 31, 2001, primarily details the financial health and operations of the employee retirement plan, rather than the parent company, AT&T Inc. (which was SBC Communications Inc. at the time). The Plan experienced significant growth in net assets, increasing from $5.73 billion in 2000 to $6.90 billion in 2001, largely driven by substantial transfers from merged plans and strong participant and employer contributions. A key event was the merger of the Ameritech Savings Plan into the SBC Savings Plan on January 1, 2001, which contributed over $3.2 billion in assets. Despite a net depreciation of $1.08 billion in investment values during 2001, the overall asset base expanded due to these inflows. Investors interested in SBC Communications Inc. (now AT&T) should note the significant exposure of the savings plan to SBC common shares, which constitute a large portion of the plan's investments, particularly through the Employee Stock Ownership Plan (ESOP) and the SBC Shares Fund. The plan also employs long-term debt to finance the ESOP, with significant balances outstanding. While the filing indicates the plan is in compliance with ERISA and generally with the IRS code, it notes an ongoing application for a new tax determination letter. The plan underwent amendments effective January 1, 2002, including changes to vesting schedules and contribution limits, signaling ongoing efforts to enhance employee retirement benefits.
Jun 27, 2002
2001
AT&T INC. Annual Report, Year Ended Dec 31, 2001
This is SBC Communications Inc.'s (NYSE: T, later renamed AT&T Inc.) Form 10-K for fiscal 2001, filed February 28, 2002. Reported 2001 results were weaker than the prior year: operating revenues fell 10.6% to $45.9 billion, largely because wireless operations were deconsolidated into the 60%-owned Cingular joint venture, and net income declined 9.1% to $7.24 billion, or $2.13 diluted EPS. On a normalized basis, which excludes one-time items and proportionally consolidates Cingular, revenue rose 2.0% to $54.3 billion and diluted EPS before extraordinary items rose 4.0% to $2.35. Management attributes the slowdown to a weak U.S. economy, regulatory uncertainty, and competition, and expects pressure to continue in 2002. The filing shows a company retrenching. Free cash flow improved to $3.6 billion from $0.9 billion as capital spending fell to $11.2 billion, and 2002 capex guidance is $9.2 to $9.7 billion, reflecting a slowdown in Project Pronto, the $6 billion broadband build-out. Only 1.3 million DSL subscribers were active at year-end. Management also cut about 17,000 employees from the payroll and took a $619 million restructuring charge in the fourth quarter. Shareholders benefited from about $2.1 billion in buybacks and a dividend of $1.025 per share. Balance-sheet and accounting risks are significant: the company expects a $1.5 to $1.9 billion pre-tax goodwill impairment on its Sterling investment in 2002 under new FAS 142 rules, and it faces regulatory exposure including up to $1.9 billion in potential merger-condition payments and an unresolved state dispute in California. Investors should note that the 2001 normalized and reported figures differ materially, and that a large share of growth depends on Cingular, international equity affiliates such as TDC and Telmex, and the outcome of pending FCC and state regulatory proceedings.
Feb 28, 2002
2000-A
AT&T INC. Annual Report (Amendment), Year Ended Dec 31, 2000
This filing is not an AT&T Inc. 10-K annual report. It is a Form 10-K/A amendment filed June 27, 2001 by SBC Communications Inc. (File No. 1-8610, San Antonio, Texas) for fiscal year 2000. Its sole purpose is to add three Form 11-K employee savings plan annual reports (SBC Savings Plan, SBC Savings and Security Plan, and Ameritech Savings and Security Plan for Non-Salaried Employees) as exhibits. The filing contains no company-level income statement, balance sheet, cash flow, segment data, business description, or management discussion, so it does not support a meaningful analysis of AT&T or of SBC's overall financial performance. The plan-level figures are the main content. The SBC Savings Plan reported net assets available for benefits of about $5.73 billion at December 31, 2000, down from $6.59 billion in 1999, with a large share invested in SBC common stock through an ESOP and an SBC Shares Fund. The SBC Savings and Security Plan reported about $4.63 billion in net assets, down from $4.83 billion. The Ameritech Savings and Security Plan for Non-Salaried Employees reported about $2.57 billion, down from $2.97 billion. Declines were driven largely by distributions to participants and net depreciation in investment values, reflecting the weaker 2000 equity market and SBC's share price decline. For investors, the practical takeaway is limited. These documents describe retirement plan administration rather than the financial health of a public telecom operator. Investors seeking AT&T Inc. (ticker T) financial information should review AT&T's own 10-K for the relevant year, which would be filed under AT&T's own CIK and would present consolidated financial statements.
Jun 27, 2001
2000
AT&T INC. Annual Report, Year Ended Dec 31, 2000
SBC Communications Inc. reported 2000 operating revenues of $51.48 billion, up from $49.53 billion in 1999, and operating income of $10.74 billion, down from $11.60 billion. Net income was $7.97 billion ($2.32 diluted EPS), compared with $8.16 billion in 1999. The decline in operating income reflects normalizing items, including merger integration costs tied to Ameritech, a SecurityLink impairment, and DSL rollout and national expansion expenses. The filing states that operating expenses rose 7.4% in 2000, and the company points to several factors expected to raise first-quarter 2001 operating expenses above first-quarter 2000 levels. The most significant structural change was the October 2000 contribution of substantially all domestic wireless operations to Cingular Wireless, a 60/40 joint venture with BellSouth. Going forward, SBC will report its 60% share of Cingular's results as equity in net income of affiliates rather than consolidating wireless revenue. Cingular served about 19 million customers at year-end 2000. Total assets were $98.65 billion, long-term debt was $15.49 billion, and debt maturing within one year was $10.47 billion, including $6.44 billion of commercial paper. Capital expenditures were $13.12 billion, and free cash flow fell to $1.18 billion from $6.27 billion, while the company guided 2001 capital spending to $12.0 to $13.0 billion. The filing also covers the company's broadband strategy (Project Pronto, approximately 34% complete at year-end 2000), national expansion into new local markets, and interLATA long distance approvals in Texas, Kansas and Oklahoma, with Missouri approved by its state commission in March 2001. Regulatory and legal risks remain significant, including reciprocal compensation disputes, unbundled network element rules and pending Supreme Court review of FCC pricing rules. Several items reference exhibits incorporated from the 2000 Annual Report to Shareowners.
Mar 12, 2001
1999-A
AT&T INC. Annual Report (Amendment), Year Ended Dec 31, 1999
This document is not an AT&T annual report. It is Amendment No. 1 to the Form 10-K of SBC Communications Inc. (Commission File No. 1-8610, San Antonio, Texas) for fiscal year 1999, filed June 27, 2000. The amendment adds four Form 11-K exhibits covering the annual reports of SBC's employee savings plans: the SBC Savings Plan, the SBC Savings and Security Plan, the Ameritech Savings Plan for Salaried Employees, and the Ameritech Savings and Security Plan for Non-Salaried Employees. It contains no company-level financial statements, business discussion, risk factors, or guidance, so it does not support an analysis of AT&T or of SBC's corporate performance. The exhibits show combined net assets available for benefits of roughly $18.6 billion across the four plans at December 31, 1999. The SBC Savings Plan held $6.59 billion, up from $6.13 billion in 1998. The SBC Savings and Security Plan rose to $4.83 billion from $2.24 billion, largely because of plan mergers with SNET and Pacific Telesis, which contributed about $3.1 billion of transfers in. The two Ameritech plans declined: the salaried plan fell to $4.24 billion from $4.44 billion, and the non-salaried plan fell to $2.97 billion from $3.21 billion. Most of the plan assets are invested in SBC common stock through the SBC Shares Fund and ESOP holdings, so the plans' value is closely tied to SBC's share price. All four plans were audited, with Ernst & Young LLP issuing unqualified opinions for 1999. Arthur Andersen LLP audited the 1998 statements of the Ameritech non-salaried plan. The filing is administrative and mainly relevant to plan participants, ERISA compliance, and anyone tracking SBC's employee stock ownership. For investment analysis of AT&T (ticker T), the appropriate source would be AT&T's own 10-K for the relevant fiscal year.
Jun 27, 2000
1999
AT&T INC. Annual Report, Year Ended Dec 31, 1999
SBC Communications Inc. reported 1999 operating revenues of $49.49 billion, up from $46.21 billion in 1998, and operating income of $11.60 billion. Net income was $8.16 billion ($2.36 diluted EPS), boosted by a $1.38 billion extraordinary gain on the required sale of overlapping cellular properties tied to the Ameritech merger. Income before extraordinary items and cumulative effect of accounting change fell to $6.57 billion from $7.74 billion, reflecting roughly $1.5 billion in after-tax one-time charges, mainly merger integration and impairment charges. On a normalized basis, the company states that 1999 income before extraordinary items would have been $7.44 billion, 12.5% higher than 1998. The company is building out its wireline network and expanding into new markets. Project Pronto, a broadband initiative, is expected to cost an estimated $6 billion over three years, and 2000 capital spending is expected to be $13 billion to $14 billion. SBC's "National-Local" strategy calls for entering 30 new local markets, and it has agreed to acquire Sterling Commerce for about $3.9 billion and to form a partnership with Prodigy. Wireless customers grew to 11.2 million, and free cash flow reached $6.27 billion. The filing also notes that the FCC's Ameritech merger conditions could trigger more than $2 billion in payments if goals are missed, and that SBC expects about $500 million in added 2000 expenses to comply. Pending regulatory decisions include SBC's Texas interLATA long distance application, filed with the FCC in January 2000. Total assets were $83.22 billion and long-term debt was $17.48 billion at year-end 1999.
Mar 10, 2000
1998-A2
AT&T INC. Annual Report (Amendment), Year Ended Dec 31, 1998
This filing is not an AT&T Inc. 10-K. It is Amendment No. 1 to the 1998 Form 10-K of SBC Communications Inc. (Commission file no. 1-8610), filed June 29, 1999. Its only purpose is to add Exhibits 99-a through 99-c: an accountant's report on Pacific Telesis Group's 1996 financials and the Form 11-K annual reports for two SBC employee savings plans, the SBC Savings Plan and the SBC Savings and Security Plan. It contains no consolidated income statement, balance sheet, segment data, or management discussion of SBC's operations, so it offers little for evaluating the company as an investment. The employee plan data shows substantial growth in 1998. The SBC Savings Plan's net assets available for benefits rose from $2.23 billion to $6.13 billion, driven largely by a $2.51 billion transfer from the Pacific Telesis Group Supplemental Retirement and Savings Plan, effective July 1, 1998, after SBC's April 1997 merger with Pacific Telesis. The SBC Savings and Security Plan's net assets rose from $1.60 billion to $2.24 billion. Within the SBC Savings Plan, the SBC Shares Fund's unit value increased from $13.64 to $19.90, about 46%, and the ESOP unit value increased from $1.76 to $3.93. These gains reflect the strength of SBC common stock during 1998, and the plans hold large stakes in it: about $2.05 billion in the SBC Shares Fund and $1.56 billion in the Savings Plan's ESOP, plus roughly $0.79 billion across the Savings and Security Plan's ESOP and SBC Shares Fund. Investors seeking SBC's financial results, guidance, or risk factors should consult the original full 10-K for fiscal 1998. The filing also has a date and identity issue. The request describes it as an AT&T Inc. (ticker T) filing, but the document is signed by SBC Communications' CFO, Donald E. Kiernan, and the registrant is SBC Communications Inc., based in San Antonio, Texas. Analysis should be attributed to SBC Communications, not AT&T.
Jun 29, 1999
1998-A
AT&T INC. Annual Report (Amendment), Year Ended Dec 31, 1998
Important correction: this filing is not an AT&T Inc. (ticker T) annual report. It is Amendment No. 1 (Form 10-K/A) by SBC Communications Inc. (Commission file No. 1-8610), filed June 28, 1999 for fiscal year 1998. Its sole purpose is to attach two Form 11-K annual reports for employee savings plans inherited from Southern New England Telecommunications Corporation (SNET), which SBC acquired on October 26, 1998. The filing contains no consolidated income statement, balance sheet, cash flow statement, or MD&A for SBC, so it offers no company-level financial performance or valuation data for investors. The two attached plans are the SNET Bargaining Unit Retirement Savings Plan and the SNET Management Retirement Savings Plan. Both are defined contribution plans, and both are invested heavily in SBC common stock through an ESOP and a Common Shares Fund. The Bargaining Unit plan's net assets rose from $184.1 million to $282.5 million in 1998, and the Management plan's rose from $398.7 million to $574.2 million. Much of that growth came from appreciation in SBC shares, which was $89.5 million for the Bargaining Unit plan and $166.3 million for the Management plan. Each SNET share converted into 1.7568 SBC shares in the merger. For investors, the main points are that the amendment is administrative, that employee retirement plans hold a meaningful block of SBC stock, and that both plans are slated to merge into the SBC Savings and Security Plan in October 1999. The user should obtain SBC's original 1998 Form 10-K, which contains the company's actual financial statements, before drawing investment conclusions.
Jun 28, 1999
1998
AT&T INC. Annual Report, Year Ended Dec 31, 1998
SBC Communications Inc. is a holding company whose subsidiaries and affiliates operate predominantly in communications services, with 1998 operating revenues of $28.78 billion (up from $26.68 billion in 1997) and net income of $4.02 billion, or $2.06 per share. Wireline is the largest segment, providing about 77% of 1998 operating revenues, and the company reports approximately 37 million access lines and 6.9 million wireless customers in the United States. Results were affected by normalizing items: 1998 included $219 million of gains on non-core business sales and $268 million of SNET merger-related strategic charges, while 1997 included $1.9 billion of PAC merger-integration costs. Excluding these items, 1998 income before extraordinary loss and accounting change would have been $4.12 billion, 19.3% higher than 1997. The company is pursuing its pending merger with Ameritech Corporation, expected to close in 1999 as a pooling of interests, with each Ameritech share exchanged for 1.316 SBC shares, and has agreed to acquire Comcast Cellular for $1.674 billion in total value. Management plans a "national-local" strategy contingent on the Ameritech transaction. Capital spending for 1999 is expected to be between $6.4 billion and $6.8 billion, and 1998 free cash flow was $2.45 billion. Investors should note that the filing states management cannot quantify the impact of local exchange competition on 1999 business and that several regulatory matters, including reciprocal compensation for Internet traffic and the Ameritech Ohio approval, remain pending.
Mar 12, 1999
1993-A
AT&T INC. Annual Report (Amendment), Year Ended Dec 31, 1993
This filing is a Form 10-K/A amendment from Southwestern Bell Corporation, not a full 10-K from AT&T Inc. (ticker T). It does not contain the company's business description, revenue, earnings, or balance sheet. Its only purpose is to attach Form 11-K annual reports for two employee savings plans for fiscal 1993: the Savings Plan for Salaried Employees and the Savings and Security Plan (Non-Salaried Employees). AT&T Inc. (ticker T) is the later successor to SBC, so this filing belongs to that corporate lineage. Investors should treat the content as employee-benefit plan disclosure, not corporate financial results. The two plans held combined net assets of about $1.87 billion at December 31, 1993, up from about $1.60 billion a year earlier, a gain of roughly 17%. The salaried plan ended 1993 at $1,095.5 million (up from $944.5 million) and the non-salaried plan at $777.7 million (up from $655.2 million). Much of the growth came from appreciation in SBC common shares. The unit value of the Corporation Shares fund rose from $6.03 to $7.00 for the salaried plan and from $6.26 to $7.29 for the non-salaried plan, reflecting the stock's performance during 1993. Both plans hold large leveraged Employee Stock Ownership Plan (ESOP) positions in SBC stock, financed by guaranteed ESOP notes due 2000. The salaried plan's notes totaled about $208.7 million and the non-salaried plan's about $145.6 million, both with payments guaranteed by the Corporation. Participant counts fell in 1993, from 18,910 to 15,620 in the salaried plan and from 33,738 to 32,814 in the non-salaried plan. The Diversified Telephone Portfolio was eliminated effective December 31, 1993, with balances moved to other funds or distributed.
May 26, 1994
1993
AT&T INC. Annual Report, Year Ended Dec 31, 1993
Southwestern Bell Corporation, a communications holding company, reported 1993 operating revenues of $10.69 billion, up from $10.02 billion in 1992, and operating income of $2.38 billion. Its largest subsidiary, Southwestern Bell Telephone Company, provided 76 percent of 1993 operating revenues through about 13.2 million access lines in Arkansas, Kansas, Missouri, Oklahoma and Texas. Income before extraordinary loss and accounting changes rose 10.3 percent to $1.44 billion, or $2.39 per share, but the company posted a net loss of $845.2 million, or $1.41 per share, after a $2.13 billion charge for accounting changes (postretirement benefits, postemployment benefits and income taxes) and a $153.2 million extraordinary loss on debt refinancing. Growth was driven mainly by Mobile Systems' cellular business, where customers rose to 2,049,000 from 1,413,000, and by higher equity income from its Telmex stake, which was $249.7 million in 1993. The company sold its Metromedia Paging subsidiary in December 1993 and bought two cable systems in Maryland and Virginia for $650 million in January 1994. It also signed a non-binding memorandum with Cox Cable Communications for a $4.9 billion cable partnership, in which the company would hold a 40 percent interest and contribute $1.6 billion. Management expects 1994 capital expenditures of $2.2 billion to $2.4 billion, funded from operations, and the dividend was $1.51 per share. The filing also flags regulatory risk. Missouri regulators ordered annual rate reductions of $84.6 million starting in 1994, which the company is contesting, and an Oklahoma order could cut annual revenues by $100.6 million. Competition is growing from competitive access providers, cable companies and interexchange carriers, and the company remains restricted under the Modification of Final Judgment from providing interexchange services and manufacturing telecommunications equipment.
Mar 18, 1994