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AT&T INC. Annual Report, Year Ended Dec 31, 1999

Filing Date
Filed March 10, 2000
Period End
December 31, 1999
Securities
TT-PCTBBT-PA
In the record · 2016–202610-K1110-Q348-K281

T filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 281 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Aug ’18Aug ’18
  2. Leadership change8-K · Apr ’20Apr ’20
  3. Deal closed8-K · Apr ’22Apr ’22
  4. Material agreement8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed March 10, 2000. Cited figures are marked; the original filing is the authoritative source.

SBC Communications Inc. reported 1999 operating revenues of $49.49 billiona, up from $46.21 billion in 1998, and operating income of $11.60 billion.

Net income was $8.16 billionb ($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 billionc 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 billiond. 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.

02—Key points

Key Highlights

  1. Operating revenues rose 7.1% to $49.49 billion in 1999, and operating income was $11.60 billion, up from $11.22 billion.
  2. Reported net income was $8.16 billion ($2.36 diluted EPS), but this includes a $1.38 billion extraordinary gain from the sale of overlapping cellular properties required by the Ameritech merger.
  3. Income before extraordinary items fell 15.0% to $6.57 billion, reflecting about $1.5 billion in after-tax one-time charges for merger integration, impairments and wireless conversion.
  4. Free cash flow was $6.27 billion in 1999, up from $4.10 billion in 1998.
  5. Wireless customers reached 11.2 million, and network access lines grew to 60.7 million.
  6. Planned 2000 capital expenditures are $13 billion to $14 billion, including Project Pronto, a broadband initiative estimated at $6 billion.
  7. Pending transactions include the approximately $3.9 billion Sterling Commerce acquisition and a Prodigy Internet partnership with SBC holding a 43% stake.

03—Questions

Frequently Asked Questions

  1. How did SBC's 1999 earnings compare with 1998?

    Reported net income rose to $8.16 billion from $7.69 billion, but that figure includes a $1.38 billion extraordinary gain on asset sales required by the Ameritech merger. Income before extraordinary items and accounting changes fell 15.0% to $6.57 billion, because of about $1.5 billion in after-tax one-time charges. The filing states that excluding these items, income would have been $7.44 billion, 12.5% higher than 1998.

  2. What is Project Pronto and what will it cost?

    Project Pronto is SBC's broadband initiative to offer advanced services to about 80% of its U.S. wireline customers over three years. SBC estimates it will invest about $6 billion in fiber, electronics and related technology. The build-out includes moving many customers from copper to fiber, and the company will reassess the carrying value of its existing network as this happens.

  3. What regulatory risks could affect SBC's results?

    The FCC's conditions on the Ameritech merger require SBC to enter 30 new local markets within 30 months, with fines of $40 million per missed market. Performance measurement failures could trigger payments of up to $1.1 billion over three years. SBC expects about $500 million in additional 2000 expenses to comply. Pending state and FCC decisions on SBC's in-region long distance applications, including Texas, also remain open.

  4. What major acquisitions and investments has SBC announced?

    SBC agreed in February 2000 to acquire Sterling Commerce in an all-cash tender offer valued at about $3.9 billion. It also agreed to form a partnership with Prodigy that will give SBC a 43% ownership stake, and it acquired Radiofone in March 2000. Earlier, it completed the Ameritech merger in October 1999 and acquired a 20% stake in Bell Canada for about $3.4 billion.

  5. What is SBC's balance sheet and cash position?

    At December 31, 1999, SBC reported total assets of $83.22 billion, long-term debt of $17.48 billion and total shareowners' equity of $26.73 billion. Cash and cash equivalents were $495 million. The board authorized repurchase of up to 100 million common shares in January 2000.

04—Continue

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