(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, 2016
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.
|
||||||||
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||
Dollars in millions except per share amounts
|
||||||||
(Unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2016
|
2015
|
|||||||
Operating Revenues
|
||||||||
Service
|
$
|
37,101
|
$
|
28,962
|
||||
Equipment
|
3,434
|
3,614
|
||||||
Total operating revenues
|
40,535
|
32,576
|
||||||
Operating Expenses
|
||||||||
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)
|
9,396
|
8,812
|
||||||
Selling, general and administrative
|
8,441
|
7,961
|
||||||
Depreciation and amortization
|
6,563
|
4,578
|
||||||
Total operating expenses
|
33,404
|
27,019
|
||||||
Operating Income
|
7,131
|
5,557
|
||||||
Other Income (Expense)
|
||||||||
Interest expense
|
(1,207
|
)
|
(899
|
)
|
||||
Equity in net income of affiliates
|
13
|
-
|
||||||
Other income (expense) – net
|
70
|
70
|
||||||
Total other income (expense)
|
(1,124
|
)
|
(829
|
)
|
||||
Income Before Income Taxes
|
6,007
|
4,728
|
||||||
Income tax expense
|
2,122
|
1,389
|
||||||
Net Income
|
3,885
|
3,339
|
||||||
Less: Net Income Attributable to Noncontrolling Interest
|
(82
|
)
|
(76
|
)
|
||||
Net Income Attributable to AT&T
|
$
|
3,803
|
$
|
3,263
|
||||
Basic Earnings Per Share Attributable to AT&T
|
$
|
0.62
|
$
|
0.63
|
||||
Diluted Earnings Per Share Attributable to AT&T
|
$
|
0.61
|
$
|
0.63
|
||||
Weighted Average Number of Common Shares Outstanding – Basic (in millions)
|
6,172
|
5,203
|
||||||
Weighted Average Number of Common Shares Outstanding – with Dilution (in millions)
|
6,190
|
5,219
|
||||||
Dividends Declared Per Common Share
|
$
|
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,
|
||||||||
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,
|
|||||||
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,
|
||||||||
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, 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
|
||||||||
March 31,
|
||||||||
2016
|
2015
|
|||||||
Numerators
|
||||||||
Numerator for basic earnings per share:
|
||||||||
Net income
|
$
|
3,885
|
$
|
3,339
|
||||
Less: Net income attributable to noncontrolling interest
|
(82
|
)
|
(76
|
)
|
||||
Net income attributable to AT&T
|
3,803
|
3,263
|
||||||
Dilutive potential common shares:
|
||||||||
Share-based payment
|
4
|
4
|
||||||
Numerator for diluted earnings per share
|
$
|
3,807
|
$
|
3,267
|
||||
Denominators (000,000)
|
||||||||
Denominator for basic earnings per share:
|
||||||||
Weighted-average number of common shares outstanding
|
6,172
|
5,203
|
||||||
Dilutive potential common shares:
|
||||||||
Share-based payment (in shares)
|
18
|
16
|
||||||
Denominator for diluted earnings per share
|
6,190
|
5,219
|
||||||
Basic earnings per share attributable to AT&T
|
$
|
0.62
|
$
|
0.63
|
||||
Diluted earnings per share attributable to AT&T
|
$
|
0.61
|
$
|
0.63
|
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
|
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,
|
||||||||
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, 2016
|
December 31, 2015
|
||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||||
Amount
|
Value
|
Amount
|
Value
|
||||||||||||
Notes and debentures1
|
$
|
129,229
|
$
|
137,865
|
$
|
124,847
|
$
|
128,993
|
|||||||
Bank borrowings
|
4
|
4
|
4
|
4
|
|||||||||||
Investment securities
|
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,
|
December 31,
|
|||||||
2016
|
2015
|
|||||||
Interest rate swaps
|
$
|
7,050
|
$
|
7,050
|
||||
Cross-currency swaps
|
29,642
|
29,642
|
||||||
Foreign exchange contracts
|
3
|
100
|
||||||
Total
|
$
|
36,695
|
$
|
36,792
|
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
|
||||||||
March 31,
|
March 31,
|
|||||||
Cash Flow Hedging Relationships
|
2016
|
2015
|
||||||
Cross-currency swaps:
|
||||||||
Gain (Loss) recognized in accumulated OCI
|
$
|
191
|
$
|
(228
|
)
|
|||
Interest rate locks:
|
||||||||
Gain (Loss) recognized in accumulated OCI
|
-
|
(316
|
)
|
|||||
Interest income (expense) reclassified from accumulated OCI into income
|
(15
|
)
|
(11
|
)
|
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
|
|||||||
|
March 31,
|
|||||||
|
2016
|
2015
|
||||||
Gross receivables sold
|
$
|
2,482
|
$
|
2,635
|
||||
Net receivables sold1
|
2,256
|
2,381
|
||||||
Cash proceeds received
|
1,521
|
1,524
|
||||||
Deferred purchase price recorded
|
719
|
858
|
||||||
1 Receivables net of allowance, imputed interest and trade-in right guarantees.
|
First Quarter
|
||||||||||||
2016
|
2015
|
Percent
Change
|
||||||||||
Operating Revenues
|
||||||||||||
Service
|
$
|
37,101
|
$
|
28,962
|
28.1
|
%
|
||||||
Equipment
|
3,434
|
3,614
|
(5.0
|
)
|
||||||||
Total Operating Revenues
|
40,535
|
32,576
|
24.4
|
|||||||||
Operating expenses
|
||||||||||||
Cost of services and sales
|
||||||||||||
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
|
8,441
|
7,961
|
6.0
|
|||||||||
Depreciation and amortization
|
6,563
|
4,578
|
43.4
|
|||||||||
Total Operating Expenses
|
33,404
|
27,019
|
23.6
|
|||||||||
Operating Income
|
7,131
|
5,557
|
28.3
|
|||||||||
Income Before Income Taxes
|
6,007
|
4,728
|
27.1
|
|||||||||
Net Income
|
3,885
|
3,339
|
16.4
|
|||||||||
Net Income Attributable to AT&T
|
$
|
3,803
|
$
|
3,263
|
16.5
|
%
|
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
|
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.
|
·
|
February issuance of $1,250 of 2.800% global notes due 2021.
|
·
|
February issuance of $1,500 of 3.600% global notes due 2023.
|
·
|
February issuance of $1,750 of 4.125% global notes due 2026.
|
·
|
February issuance of $1,500 of 5.650% global notes due 2047.
|
·
|
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 2016.
|
·
|
An accreting zero-coupon note may be redeemed each May until maturity in 2022. If the zero-coupon note (issued for principal of $500 in 2007) is held to maturity, the redemption amount will be $1,030.
|
·
|
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 limitation, intercarrier compensation; interconnection obligations; pending Notices of Apparent Liability; the transition from legacy technologies to IP-based infrastructure including the withdrawal of legacy TDM-based services; universal service; broadband deployment; E911 services; competition policy; net neutrality; including the FCC's order reclassifying broadband as Title II services subject to much more fulsome regulation; unbundled network elements and other wholesale obligations; multi-channel video programming distributor services and equipment; availability of new spectrum from the FCC on fair and balanced terms, and wireless and satellite license awards and renewals.
|
·
|
The final outcome of state and federal legislative efforts involving issues that are important to our business, including deregulation of IP-based services, relief from Carrier of Last Resort obligations and elimination of state commission review of the withdrawal of services.
|
·
|
Enactment of additional state, 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 segment operating margins.
|
·
|
Our ability to develop attractive and profitable product/service offerings to offset increasing competition.
|
·
|
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 video offerings through satellite and U-verse; the extent to which regulatory and build-out requirements apply to our offerings; and the availability, cost and/or reliability of the various technologies and/or content required to provide such offerings.
|
·
|
Our continued ability to maintain margins, attract and offer a diverse portfolio of wireless service and devices and device financing plans.
|
·
|
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, including satellites operated by DIRECTV; the effect of security breaches related to the network or customer information; our inability to obtain handsets, equipment/software or have handsets, equipment/software serviced in a timely and cost-effective manner from suppliers; and in the case of satellites launched, timely provisioning of services from vendors; or severe weather conditions, natural disasters, pandemics, energy shortages, wars or terrorist attacks.
|
·
|
The issuance by the Financial Accounting Standards Board or other accounting oversight bodies of new accounting standards or changes to existing standards.
|
·
|
Our ability to integrate our acquisition of DIRECTV.
|
·
|
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 Mexican wireless properties, including foreign exchange fluctuations as well as regulatory and political uncertainty in Latin America.
|
·
|
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 decrease in government spending and reluctance of businesses and consumers to spend in general.
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
||||||||||
(c) A summary of our repurchases of common stock during the first quarter of 2016 is as follows:
|
||||||||||
|
||||||||||
Period
|
(a)
Total Number of
Shares (or Units)
Purchased1,2
|
(b)
Average Price Paid
Per Share (or Unit)
|
(c)
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs1
|
(d)
Maximum Number (or
Approximate Dollar
Value) of Shares (or
Units) That May Yet Be
Purchased Under The
Plans or Programs
|
||||||
|
||||||||||
January 1, 2016 -
January 31, 2016
|
541,982
|
$
|
-
|
-
|
406,550,000
|
|||||
February 1, 2016 -
February 29, 2016
|
448
|
-
|
-
|
406,550,000
|
||||||
March 1, 2016 -
March 31, 2016
|
9,074
|
-
|
-
|
406,550,000
|
||||||
Total
|
551,504
|
$
|
-
|
-
|
||||||
1
|
In March 2014, our Board of Directors approved an additional authorization to repurchase up to 300 million shares of our common stock. In March 2013, our Board of Directors authorized the repurchase of up to 300 million shares of our common stock. The authorizations have no expiration date.
|
|||||||||
2
|
All repurchased shares were acquired through the withholding of taxes on the vesting of restricted stock or through the payment in stock of taxes on the exercise price of options.
|
|||||||||
|
|
10-a
12
|
2016 Incentive Plan
Computation of Ratios of Earnings to Fixed Charges
|
31
|
Rule 13a-14(a)/15d-14(a) Certifications
31.1 Certification of Principal Executive Officer
31.2 Certification of Principal Financial Officer
|
32
|
Section 1350 Certifications
|
101
|
XBRL Instance Document
|
May 5, 2016
|
|
AT&T Inc.
/s/ John J. Stephens
John J. Stephens
Senior Executive Vice President
and Chief Financial Officer
|
|
|
|
|
|
1.01
|
Establishment of the Plan. AT&T Inc., a Delaware corporation (the "Company" or "AT&T"), hereby establishes an incentive compensation plan (the "Plan"), as set forth in this document.
|
1.02
|
Purpose of the Plan. The purpose of the Plan is to promote the success and enhance the value of the Company by linking the personal interests of Participants to those of the Company's shareowners, and by providing Participants with an incentive for outstanding performance.
|
1.03
|
Effective Date of the Plan. The Plan is effective on May 1, 2016.
|
2.01
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Whenever used in the Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:
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(a)
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"Applicable Law" means the legal requirements relating to the administration of options and share-based or performance-based awards under any applicable laws of the United States, any other country, and any provincial, state, or local subdivision, any applicable stock exchange or automated quotation system rules or regulations, as such laws, rules, regulations and requirements shall be in place from time to time.
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(b)
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"Award" means, individually or collectively, a grant or award under this Plan of Stock Options, Restricted Stock (including unrestricted Stock), Restricted Stock Units, Performance Units, or Performance Shares.
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(c)
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"Award Agreement" means an agreement which may be entered into by each Participant and the Company, setting forth the terms and provisions applicable to Awards granted to Participants under this Plan.
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(d)
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"Board" or "Board of Directors" means the AT&T Board of Directors.
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(e)
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"Cause" means willful and gross misconduct on the part of an Employee that is materially and demonstrably detrimental to the Company or any Subsidiary as determined by the Committee in its sole discretion.
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(f)
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"Change in Control" shall be deemed to have occurred if (1) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the shareowners of the Company in substantially the same proportions as their ownership of stock of the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the total voting power represented by the Company's then outstanding voting securities; or (2) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new Director whose election by the Board of Directors or nomination for election by the Company's shareowners was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or (3) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the shareowners of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company's assets.
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(g)
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"Code" means the Internal Revenue Code of 1986, as amended from time to time.
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(h)
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"Committee" means the committee or committees of the Board of Directors given authority to administer the Plan as provided in Article 3.
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(i)
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"Director" means any individual who is a member of the AT&T Board of Directors.
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(j)
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"Disability" means, absence of an Employee from work under the relevant Company or Subsidiary long term disability plan.
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(k)
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"Employee" means any employee of the Company or of one of the Company's Subsidiaries. "Employment" means the employment of an Employee by the Company or one of its Subsidiaries. Directors who are not otherwise employed by the Company shall not be considered Employees under this Plan.
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(l)
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"Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor Act thereto.
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(m)
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"Exercise Price" means the price at which a Share may be purchased by a Participant pursuant to an Option, as determined by the Committee.
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(n)
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"Fair Market Value" means the closing price on the NYSE for a Share on the relevant date, or if such date was not a trading day, the next preceding trading date, all as determined by the Company. A trading day is any day that the Shares are traded on the NYSE. In lieu of the foregoing, the Committee may, from time to time, select any other index or measurement to determine the Fair Market Value of Shares under the Plan, including but not limited to an average determined over a period of trading days.
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(o)
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"Insider" means an Employee who is, on the relevant date, an officer, director, or ten percent (10%) beneficial owner of the Company, as those terms are defined under Section 16 of the Exchange Act.
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(p)
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"NYSE" or "New York Stock Exchange." If the New York Stock Exchange is no longer the principal exchange on which the stock is listed, then NYSE shall refer to such principal exchange unless otherwise provided by the Disinterested Committee.
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(q)
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"Officer Level Employee" means a Participant who is an officer level Employee for compensation purposes as indicated on the records of AT&T. References to records of AT&T shall include the records of its Subsidiaries.
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(r)
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"Option" means an option to purchase Shares from AT&T.
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(s)
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"Participant" means an Employee or former Employee who holds an outstanding Award granted under the Plan.
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(t)
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"Performance Unit" and "Performance Share" each mean an Award granted to an Employee pursuant to Article 8 herein.
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(u)
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"Retirement" or to "Retire" means the Participant's Termination of Employment for any reason other than death, Disability, or for Cause, on or after the earlier of the following dates, or as otherwise provided by the Committee: (1) for Officer Level Employees, the date the Participant is at least age fifty-five (55) and has completed a 5 year Term of Employment; provided, however, that individuals who are designated as an Officer on or after October 1, 2015, must have completed a 10-year Term of Employment; or (2) the date the Participant has attained one of the following combinations of age and service, except as otherwise indicated below:
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Term of Employment
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Age
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10 years or more
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65 or older
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20 years or more
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55 or older
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25 years or more
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50 or older
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30 years or more
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Any age
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(v)
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"Senior Manager" means a Participant who is a senior manager for compensation purposes as indicated on the records of AT&T.
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(w) | "Severance Termination of Employment" means a Termination of Employment where the Participant receives a cash severance payment under a severance plan of the Participant's employer or pursuant to an individually negotiated severance agreement. |
(x) | "Shares" or "Stock" means the shares of common stock of the Company. |
(y) | "Subsidiary" means any corporation, partnership, venture or other entity in which AT&T holds, directly or indirectly, a fifty percent (50%) or greater ownership interest. |
(z) | "Surplus Termination of Employment" means a Termination of Employment as a result of force surplus, technological, operational, organizational and/or structural changes affecting the relevant employer without an offer for comparable employment, or an Employment Termination that occurs as a result of declining a Company initiated or offered job relocation to a work location that is more than fifty (50) miles from the employee's work location and that increases the employee's work commute. |
(aa) | "Termination of Employment" or a similar reference means the event where the Employee is no longer an Employee of the Company or of any Subsidiary, including but not limited to where the employing company ceases to be a Subsidiary. With respect to any Award that provides "nonqualified deferred compensation" within the meaning of Section 409A of the Code, "Termination of Employment" shall mean a "separation from service" as defined under Section 409A of the Code. |
3.01
|
The Committee. Administration of the Plan shall be as follows:
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(a)
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With respect to Insiders, the Plan and Awards hereunder shall be administered by the Human Resources Committee of the Board or such other committee as may be appointed by the Board for this purpose (each of the Human Resources Committee and such other committee is the "Disinterested Committee"), where each Director on such Disinterested Committee is a "Non-Employee Director," as that term is used in Rule 16b-3 under the Exchange Act (or any successor designation for determining the committee that may administer plans, transactions or awards exempt under Section 16(b) of the Exchange Act), as that rule may be modified from time to time.
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(b)
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With respect to persons who are not Insiders, the Plan and Awards hereunder shall be administered by each of the Disinterested Committee and such other committee, if any, to which the Board may delegate such authority (such other Committee shall be the "Non-Insider Committee"), and each such Committee shall have full authority to administer the Plan and all Awards hereunder, except as otherwise provided herein or by the Board. The Disinterested Committee may, from time to time, limit the authority of the Non-Insider Committee in any way. Any Committee may be replaced by the Board at any time.
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(c)
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Except as otherwise indicated from the context, references to the "Committee" in this Plan shall be to either of the Disinterested Committee or the Non-Insider Committee.
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3.02
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Authority of the Committee. The Committee shall have complete control over the administration of the Plan and shall have the authority in its sole discretion to exercise all of the powers granted to it under the Plan, which shall include but not be limited to the authority to:
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(a)
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construe, interpret and implement the Plan, grant terms and grant notices, and all Award Agreements;
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(b)
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prescribe, amend and rescind rules and regulations relating to the Plan, including rules governing its own operations;
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(c)
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make all determinations necessary or advisable in administering the Plan or any Award thereunder;
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(d)
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correct any defect, supply any omission and reconcile any inconsistency in the Plan; and
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(e)
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with respect to Awards:
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(i)
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grant Awards,
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(ii)
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determine who shall receive Awards,
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(iii)
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determine when Awards shall be granted
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(v)
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determine whether and to the extent the terms and conditions of Awards have been achieved or satisfied.
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3.03
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No Award may be made under the Plan after April 30, 2026.
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3.04
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References to determinations or other actions by AT&T or the Company, herein, shall mean actions authorized by the Committee, the Chairman of the Board of AT&T, the Senior Executive Vice President of AT&T in charge of Human Resources or their respective successors or duly authorized delegates, in each case in the discretion of such person, provided, however, only the Disinterested Committee may take action with respect to Insiders with regard to granting or determining the terms of Awards or other matters that would require the Disinterested Committee to act in order to comply with Rule 16b-3 promulgated under the Exchange Act.
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3.05
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All determinations and decisions made by AT&T pursuant to the provisions of the Plan and all related orders or resolutions of the Board shall be final, conclusive, and binding on all persons, including but not limited to the Company, its stockholders, Employees, Participants, and their estates and beneficiaries.
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4.01
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Number of Shares. Subject to adjustment as provided in Section 4.03 herein, the number of Shares available for issuance under the Plan shall not exceed ninety (90) million Shares. The Shares granted under this Plan may be either authorized but unissued or reacquired Shares. The Disinterested Committee shall have full discretion to determine the manner in which Shares available for grant are counted in this Plan.
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4.02
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Share Accounting. Without limiting the discretion of the Committee under this section, unless otherwise provided by the Disinterested Committee, the following rules will apply for purposes of the determination of the number of Shares available for grant under the Plan or compliance with the foregoing limits:
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(a)
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If an outstanding Award for any reason expires or is terminated or canceled without having been exercised or settled in full, or if Shares acquired pursuant to an Award subject to forfeiture are forfeited under the terms of the Plan or the relevant Award, the Shares allocable to the terminated portion of such Award or such forfeited Shares shall again be available for issuance under the Plan.
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(b)
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Shares shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash, other than an Option.
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(c)
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When an Option is exercised (including but not limited to a Stock-Settled exercise), the number of shares available for issuance under the Plan shall be reduced by the gross number of shares for which the Option is exercised.
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4.03
|
Adjustments in Authorized Plan Shares and Outstanding Awards. In the event of any merger, reorganization, consolidation, recapitalization, separation, split-up, liquidation, Share combination, Stock split, Stock dividend, or other change in the corporate structure of the Company affecting the Shares, an adjustment shall be made in the number and class of Shares which may be delivered under the Plan (including but not limited to individual limits), and in the number and class of and/or price of Shares subject to outstanding Awards granted under the Plan, and/or the number of outstanding Options, Shares of Restricted Stock, and Performance Shares (and Performance Units and other Awards whose value is based on a number of Shares) constituting outstanding Awards, as may be determined to be appropriate and equitable by the Disinterested Committee, in its sole discretion, to prevent dilution or enlargement of rights.
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5.01
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Eligibility. All management Employees are eligible to receive Awards under this Plan.
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5.02
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Actual Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select from all eligible Employees, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No Employee is entitled to receive an Award unless selected by the Committee.
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6.01
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Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to eligible Employees at any time and from time to time, and under such terms and conditions, as shall be determined by the Committee. In addition, the Committee may, from time to time, provide for the payment of dividend equivalents on Options, prospectively and/or retroactively, on such terms and conditions as the Committee may require. The Committee shall have discretion in determining the number of Shares subject to Options granted to each Employee; provided, however, that no single Employee may receive Options under this Plan for more than one percent (1%) of the Shares approved for issuance under this Plan during any calendar year. The Committee may not grant Incentive Stock Options, as described in Section 422 of the Code, under this Plan.
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6.02
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Form of Issuance. The Committee may require, as a condition to receiving an Option Award, that the Participant enter into an Option Award Agreement, setting forth the terms and conditions of the Award. In lieu of an Option Award Agreement, the Committee may provide the terms and conditions of an Option Award in a notice to the Participant, in the resolution approving the Award, or in such other manner as it deems appropriate. Such terms and conditions shall include the Exercise Price, the duration of the Option, the number of Shares to which an Option pertains (unless otherwise provided by the Committee, each Option may be exercised to purchase one Share), and such other provisions as the Committee shall determine.
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6.03
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Exercise Price. Unless a greater Exercise Price is determined by the Committee, the Exercise Price for each Option Awarded under this Plan shall be equal to one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted. Subject to adjustment as provided in Section 4.03 herein or as otherwise provided herein, the terms of an Option may not be amended to reduce the exercise price nor may Options be cancelled or exchanged for cash, other awards or Options with an exercise price that is less than the exercise price of the original Options.
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6.04
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Duration of Options. Each Option shall expire at such time as the Committee shall determine at the time of grant (which duration may be extended by the Committee); provided, however, that no Option shall be exercisable later than the tenth (10th) anniversary date of its grant. In the event the Committee does not specify the expiration date of an Option, then such Option will expire on the tenth (10th) anniversary date of its grant, except as otherwise provided herein.
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6.05
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Vesting of Options. A grant of Options shall vest at such times and under such terms and conditions as determined by the Committee; provided, however, unless another vesting period is provided by the Committee at or before the grant of an Option, one-third of the Options will vest on each of the first three anniversaries of the grant; if one Option remains after equally dividing the grant by three, it will vest on the first anniversary of the grant, if two Options remain, then one will vest on each of the first two anniversaries. The Committee shall have the right to accelerate the vesting of any Option; however, the Chairman of the Board or the Senior Executive Vice President-Human Resources, or their respective successors, or such other persons designated by the Committee, shall have the authority to accelerate the vesting of Options for any Participant who is not an Insider.
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6.06
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Exercise of Options.
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(a)
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An Option shall be exercised by providing notice to the designated agent selected by the Company (if no such agent has been designated, then to the Company), in the manner and form determined by the Company, which notice shall be irrevocable, setting forth the exact number of Shares with respect to which the Option is being exercised and including with such notice payment of the Exercise Price, as applicable. When an Option has been transferred, the Company or its designated agent may require appropriate documentation that the person or persons exercising the Option, if other than the Participant, has the right to exercise the Option. No Option may be exercised with respect to a fraction of a Share.
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(b)
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Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant. Unless otherwise provided by the Committee, exercises of Options may be effected only on days and during the hours that the NYSE is open for regular trading. The Company may change or limit the times or days Options may be exercised. If an Option expires on a day or at a time when exercises are not permitted, then the Options may be exercised no later than the immediately preceding date and time that the Options were exercisable.
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6.07
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Payment of the Exercise Price.
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(a)
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Unless otherwise determined by the Committee, the Exercise Price shall be paid in full at the time of exercise. No Shares shall be issued or transferred until full payment has been received or the next business day thereafter, as determined by AT&T.
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(b)
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The Committee may, from time to time, determine, modify, or limit the method or methods of exercising Options or the manner in which the Exercise Price is to be paid. Unless otherwise provided by the Committee in full or in part:
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(i)
|
Payment may be made in cash.
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(ii)
|
An Option may be "stock settled," which shall mean upon exercise of an Option, the Company shall deliver that number of shares of Stock found by taking the difference between (A) the Fair Market Value of the Stock as of the first day that the Stock was traded on the NYSE immediately preceding the exercise date, multiplied by the number of Options being exercised and (B) the total Exercise Price of the Options being exercised, and dividing such difference by the Fair Market Value of the Stock as of the first day that the Stock was traded on the NYSE immediately preceding the exercise date.
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(iii)
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If the Company has designated an agent to process Option exercises, an Option may be exercised by issuing an exercise notice together with instructions to such agent irrevocably instructing the agent (which shall include any broker-dealer engaged by the agent): (A) to immediately sell (which shall include an exercise notice that becomes effective upon execution of a sale order) a sufficient portion of the Shares to be received from the Option exercise to pay the Exercise Price of the Options being exercised and the required tax withholding, and (B) to deliver on the settlement date the portion of the proceeds of the sale equal to the Exercise Price and tax withholding to the Company. In the event the agent sells any Shares on behalf of a Participant, the agent shall be acting solely as the agent of the Participant, and the Company disclaims any responsibility for the actions of the agent in making any such sales. No Shares shall be issued until the settlement date and until the proceeds (equal to the Exercise Price and tax withholding) are paid to the Company.
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6.08
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Termination of Employment. Unless otherwise provided by the Committee, the following limitations on exercise of Options shall apply upon Termination of Employment:
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(a)
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Termination by Death or Disability. In the event of the Participant's Termination of Employment by reason of death or Disability, all outstanding Options granted to that Participant shall immediately vest as of the date of Termination of Employment and may be exercised, if at all, no more than five (5) years from the date of the Termination of Employment, unless the Options, by their terms, expire earlier.
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(b)
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Termination for Cause. In the event of the Participant's Termination of Employment for Cause, then the Committee may, in its sole discretion, forfeit all outstanding Options held by the Participant to the Company and no additional exercise period shall be allowed, regardless of the vested status of the Options.
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(c)
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Retirement or Other Termination of Employment. In the event of the Participant's Termination of Employment for any reason other than the reasons set forth in (a) or (b), above:
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(i)
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If upon the Participant's Termination of Employment, the Participant is eligible to Retire, then all outstanding unvested Options granted to that Participant shall immediately vest as of the date of the Participant's Termination of Employment;
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(ii)
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All outstanding Options which are vested as of the effective date of Termination of Employment may be exercised, if at all, no more than five (5) years from the date of Termination of Employment if the Participant is eligible to Retire, or three (3) months from the date of the Termination of Employment if the Participant is not eligible to Retire, as the case may be, unless in either case the Options, by their terms, expire earlier; and
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(iii)
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In the event of the death of the Participant after Termination of Employment, this paragraph (c) shall still apply and not paragraph (a), above.
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(d)
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Options not Vested at Termination. Except as provided in paragraphs (a) and (c)(i), above, all Options held by the Participant which are not vested on or before the effective date of Termination of Employment shall immediately be forfeited to the Company (and the Shares subject to such forfeited Options shall once again become available for issuance under the Plan).
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(e)
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Other Terms and Conditions. Notwithstanding the foregoing, the Committee may, in its sole discretion, establish different, or waive, terms and conditions pertaining to the effect of Termination of Employment on Options, whether or not the Options are outstanding, but no such modification shall shorten the terms of Options issued prior to such modification or otherwise be materially adverse to the Participant.
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6.09
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Restrictions on Exercise and Transfer of Options. Unless otherwise provided by the Committee:
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(a)
|
During the Participant's lifetime, the Participant's Options shall be exercisable only by the Participant or by the Participant's guardian or legal representative. After the death of the Participant, except as otherwise provided by AT&T's Rules for Employee Beneficiary Designations, an Option shall only be exercised by the holder thereof (including, but not limited to, an executor or administrator of a decedent's estate) or his or her guardian or legal representative.
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(b)
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No Option shall be transferable except: (i) in the case of the Participant, only upon the Participant's death and in accordance with the AT&T Rules for Employee Beneficiary Designations; and (ii) in the case of any holder after the Participant's death, only by will or by the laws of descent and distribution.
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7.01
|
Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock to eligible Employees in such amounts and upon such terms and conditions as the Committee shall determine. In addition to any other terms and conditions imposed by the Committee, vesting of Restricted Stock may be conditioned upon the achievement of Performance Goals in the same manner as provided in Section 8.04, herein, with respect to Performance Shares. No Employee may be awarded, in any calendar year, a number of Shares in the form of Restricted Stock (or Restricted Stock Units) exceeding one percent (1%) of the Shares approved for issuance under this Plan.
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7.02
|
Restricted Stock Agreement. The Committee may require, as a condition to receiving a Restricted Stock Award, that the Participant enter into a Restricted Stock Award Agreement, setting forth the terms and conditions of the Award. In lieu of a Restricted Stock Award Agreement, the Committee may provide the terms and conditions of an Award in a notice to the Participant of the Award, on the Stock certificate representing the Restricted Stock, in the resolution approving the Award, or in such other manner as it deems appropriate.
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7.03
|
Transferability. Except as otherwise provided in this Article 7, and subject to any additional terms in the grant thereof, Shares of Restricted Stock granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until fully vested.
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7.04
|
Restrictions.
|
(a)
|
The Restricted Stock shall be subject to such vesting terms, including the achievement of Performance Goals (as described in Section 8.04), as may be determined by the Committee. Unless otherwise provided by the Committee, to the extent Restricted Stock is subject to any condition to vesting, if such condition or conditions are not satisfied by the time the period for achieving such condition has expired, such Restricted Stock shall be forfeited. The Committee may impose such other conditions and/or restrictions on any Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable including but not limited to a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock and/or restrictions under applicable Federal or state securities laws; and may legend the certificates representing Restricted Stock to give appropriate notice of such restrictions. The Committee may also grant Restricted Stock without any terms or conditions in the form of vested Stock Awards.
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(b)
|
The Company shall have the right to retain the certificates representing Shares of Restricted Stock in the Company's possession until such time as the Shares are fully vested and all conditions and/or restrictions applicable to such Shares have been satisfied.
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7.05
|
Removal of Restrictions. Except as otherwise provided in this Article 7 or otherwise provided in the grant terms, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall become freely transferable by the Participant after completion of all conditions to vesting, if any. However, the Committee, in its sole discretion, shall have the right to immediately vest the shares and waive all or part of the restrictions and conditions with regard to all or part of the Shares held by any Participant at any time.
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7.06
|
Voting Rights, Dividends and Other Distributions. Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights and, unless otherwise provided in the grant terms, shall receive all dividends and distributions paid with respect to such Shares. The Committee may require that dividends and other distributions, other than regular cash dividends, paid to Participants with respect to Shares of Restricted Stock be subject to the same restrictions and conditions as the Shares of Restricted Stock with respect to which they were paid. If any such dividends or distributions are paid in Shares, the Shares shall automatically be subject to the same restrictions and conditions as the Shares of Restricted Stock with respect to which they were paid.
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7.07
|
Termination of Employment Due to Death or Disability. In the event of the Participant's Termination of Employment by reason of death or Disability, all restrictions imposed on outstanding Shares of Restricted Stock held by the Participant shall immediately lapse and the Restricted Stock shall immediately become fully vested as of the date of Termination of Employment.
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7.08
|
Termination of Employment for Other Reasons. Unless otherwise provided by the Committee, in the event of the Participant's Termination of Employment for any reason other than due to Death, Disability, or Surplus Termination of Employment, all Shares of Restricted Stock held by the Participant which are not vested as of the effective date of Termination of Employment immediately shall be forfeited and returned to the Company.
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7.09
|
Restricted Stock Units.
|
7.10
|
Surplus Termination of Employment. Except as otherwise provided by the Committee, in the event of a Surplus Termination of Employment that occurs prior to the vesting date of a grant of Restricted Stock or Restricted Stock Units, the Participant shall receive a pro-rata distribution as follows: the number of the Participant's unvested Restricted Stock or Restricted Stock Units shall be prorated by multiplying the number of unvested Restricted Stock or Restricted Stock Units by the number of months in the restriction period during which the Participant worked at least one day divided by the total number of months in the restriction period, and such prorated amount shall be vested but shall not be payable until the scheduled distribution date, or as otherwise provided in the Plan.
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8.01
|
Grants of Performance Units and Performance Shares. Subject to the terms of the Plan, Performance Shares and Performance Units may be granted to eligible Employees at any time and from time to time, as determined by the Committee. The Committee shall have complete discretion in determining the number of Performance Units and/or Performance Shares Awarded to each Participant and the terms and conditions of each such Award.
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8.02
|
Value of Performance Shares and Units.
|
(a)
|
A Performance Share is equivalent in value to a Share. In any calendar year, no individual may be awarded Performance Shares having a potential payout of Shares exceeding one percent (1%) of the Shares approved for issuance under this Plan.
|
(b)
|
A Performance Unit shall be equal in value to a fixed dollar amount determined by the Committee. In any calendar year, no individual may be Awarded Performance Units having a potential payout equivalent exceeding the Fair Market Value, as of the date of granting the Award, of one percent (1%) of the Shares approved for issuance under this Plan. The number of Shares equivalent to the potential payout of a Performance Unit shall be determined by dividing the maximum cash payout of the Award by the Fair Market Value per Share on the effective date of the grant. The Committee may denominate a Performance Unit Award in dollars instead of Performance Units. A Performance Unit Award may be referred to as a "Key Executive Officer Short Term Award."
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8.03
|
Performance Period. The Performance Period for Performance Shares and Performance Units is the period over which the Performance Goals are measured. The Performance Period is set by the Committee for each Award; however, in no event shall an Award have a Performance Period of less than one year.
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8.04
|
Performance Goals.
|
(a)
|
For each Award of Performance Shares or Performance Units, the Committee shall establish (and may establish for other Awards) performance objectives ("Performance Goals") for the Company, its Subsidiaries, and/or divisions of any of foregoing, using the criteria and other factors set forth in (b) and (c), below. It may also use other criteria or factors in establishing Performance Goals in addition to or in lieu of the foregoing. A Performance Goal may be stated as an absolute value or as a value determined relative to an index, budget, prior period, similar measures of a peer group of other companies or other standard selected by the Committee. Performance Goals shall include payout tables, formulas or other standards to be used in determining the extent to which the Performance Goals are met, and, if met, the number of Performance Shares and/or Performance Units which would be converted into Stock and/or cash (or the rate of such conversion) and distributed to Participants in accordance with Section 8.6. Unless previously canceled or reduced, Performance Shares and Performance Units which may not be converted because of failure in whole or in part to satisfy the relevant Performance Goals or for any other reason shall be canceled at the time they would otherwise be distributable. When the Committee desires an Award of Performance Shares, Performance Units, Restricted Stock or Restricted Stock Units to qualify under Section 162(m) of the Code, as amended, the Committee shall establish or modify the Performance Goals for the respective Award prior to or within 90 days of the beginning of the Performance Period relating to such Performance Goal, and not later than after twenty-five percent (25%) of such period has elapsed. For all other Awards, the Performance Goals must be established or modified before the end of the respective Performance Period.
|
(b)
|
In establishing Performance Goals, Committee is authorized to use, in its sole discretion, any of the following criteria or any combination thereof, including but not limited to the offset against each other of any combination of the following criteria:
|
(i)
|
Financial performance of the Company (on a consolidated basis), of one or more of its Subsidiaries, and/or a division of any of the foregoing. Such financial performance may be based on net income, Value Added (after- tax cash operating profit less depreciation and less a capital charge), EBITDA (earnings before interest, taxes, depreciation and amortization), revenues, sales, expenses, costs, gross margin, operating margin, profit margin, pre-tax profit, market share, volumes of a particular product or service or category thereof, including but not limited to the product's life cycle (for example, products introduced in the last two years), number of customers or subscribers, number of items in service, including but not limited to every category of access or network connections, return on net assets, return on assets, return on capital, return on invested capital, cash flow, free cash flow, operating cash flow, operating revenues, operating expenses, and/or operating income.
|
(ii)
|
Service performance of the Company (on a consolidated basis), of one or more of its Subsidiaries, and/or of a division of any of the foregoing. Such service performance may be based upon measured customer perceptions of service quality (which may include measurements of the customer's likelihood to recommend the Company its products or services, among other things), employee satisfaction, employee retention, product development, completion of a joint venture or other corporate transaction, completion of an identified special project, and effectiveness of management.
|
(iii)
|
The Company's Stock price, return on stockholders' equity, total stockholder return (Stock price appreciation plus dividends, assuming the reinvestment of dividends), and/or earnings per Share.
|
(iv)
|
Impacts of acquisitions, dispositions, or restructurings, on any of the foregoing.
|
(c)
|
Exclusions and Adjustments to Performance Goals.
|
(i)
|
If the matters in a specific category below have a collective net impact (whether positive or negative) on net income, after taxes and available and collectible insurance, that exceed $500 million in a calendar year, then such matters (as well as any related effects on cash flow, if applicable) shall be excluded in determining whether or the extent to which the relevant Performance Goals applicable to such year are met:
|
(ii)
|
In addition, where matters in a specific category have a collective net impact (whether positive or negative) on net income, after taxes and available and collectible insurance, that exceed $200 million but not $500 million in a calendar year, then such matters (as well as any related effects on cash flow, if applicable) shall also be excluded in determining the achievement of the relevant Performance Goals but only if the combined net effect of matters in all such categories (exceeding $200 million but not $500 million) exceeds $500 million.
|
(iii)
|
Gains and losses related to the assets and liabilities from pension plans and other post-retirement benefit plans (and any associated tax effects) shall be disregarded in determining whether or the extent to which a Performance Goal has been met.
|
(iv)
|
Unless otherwise provided by the Committee at any time, no such adjustment shall be made for a current or former executive officer to the extent such adjustment would cause an Award to fail to satisfy the performance based exemption of Section 162(m) of the Code.
|
8.05
|
Dividend Equivalents on Performance Shares. Unless otherwise provided by the Committee, a cash payment ("Dividend Equivalent") in an amount equal to the dividend payable on one Share shall be made to a Participant for each Performance Share held by such Participant on the record date for the dividend. Such Dividend Equivalent, if any, will be payable at the time the relevant AT&T common stock dividend is payable or at such other time as determined by the Committee, and may be modified or terminated by the Committee at any time. Notwithstanding the foregoing, unless otherwise provided by the Committee, Dividend Equivalents paid with respect to Performance Shares granted to an Officer Level Employee shall only be paid on the number of Performance Shares actually distributed and such payment shall be made when the related Performance Shares are distributed.
|
8.06
|
Form and Timing of Payment of Performance Units and Performance Shares.
|
(a)
|
As soon as practicable after the applicable Performance Period has ended and all other conditions (other than Committee actions) to conversion and distribution of a Performance Share and/or Performance Unit Award have been satisfied (or, if applicable, at such other time determined by the Committee at or before the establishment of the Performance Goal), the Committee shall determine whether and the extent to which the Performance Goals were met for the applicable Performance Units and Performance Shares. If Performance Goals have been met, then the number of Performance Units and Performance Shares to be converted into Stock and/or cash and distributed to the Participants shall be determined in accordance with the Performance Goals for such Awards, subject to any limits imposed by the Committee.
|
(b)
|
Payment of Performance Units and Performance Shares shall be made in a single lump sum, as soon as reasonably administratively possible following the determination of the number of Shares or amount of cash to which the Participant is entitled but not later than the 15th day of the third month following the end of the applicable Performance Period.
|
(c)
|
Performance Units will be distributed to Participants in the form of cash. Unless otherwise provided by the Committee, Performance Shares will be distributed to Participants in the form of fifty percent (50%) Stock and fifty percent (50%) Cash.
|
(d)
|
At any time prior to the distribution of the Performance Shares and/or Performance Units, unless otherwise provided by the Committee or prohibited by this Plan (such as in the case of a Change in Control), the Committee shall have the authority to reduce or eliminate the number of Performance Units or Performance Shares to be converted and distributed, or to cancel any part or all of a grant or award of Performance Units or Performance Shares, or to mandate the form in which the Award shall be paid (i.e., in cash, in Stock or both, in any proportions determined by the Committee).
|
(e)
|
Notwithstanding anything to the contrary in this Plan, after a Change in Control, the payout of Performance Units and Performance Shares shall be determined exclusively by the attainment of the Performance Goals in effect prior to the Change in Control, and such Performance Goals may not be modified after such Change in Control. In addition, after a Change in Control, other than an adjustment to the awards based on the extent to which the Performance Goals were achieved, AT&T shall not reduce or eliminate the number of Performance Units or Performance Shares or cancel any part or all of a grant or award of Performance Units or Performance Shares.
|
(f)
|
Unless otherwise provided by the Committee, any election to take a greater amount of cash or Stock with respect to Performance Shares must be made in the calendar year prior to the calendar year in which the Performance Shares are distributed.
|
(g)
|
For the purpose of converting Performance Shares into cash and distributing the same to the holders thereof (or for determining the amount of cash to be deferred), the value of a Performance Share shall be the Fair Market Value of a Share on the date the Committee authorizes the payout of Awards. Performance Shares to be distributed in the form of Stock will be converted at the rate of one (1) Share per Performance Share.
|
8.07
|
Death or Disability. In the event of the Participant's death during a Performance Period, the Participant shall receive a lump sum payout of the related outstanding Performance Units and Performance Shares calculated as if all unfinished Performance Periods had ended with one hundred percent (100%) of the Performance Goals achieved, valued as of the date of death and payable as soon thereafter as reasonably possible but not later than the 15th day of the third month after the end of the calendar year in which such death occurred. Where the amount or part of Dividend Equivalents is determined by the number of Performance Shares that are paid out or is otherwise determined by a performance measure, and the related Performance Period for the Dividend Equivalents was not completed at death, then the Dividend Equivalents will be calculated as though one hundred percent (100%) of the goals were achieved and paid as soon as reasonably possible. A Termination of Employment due to Disability will not affect a Participant's Award.
|
8.08
|
Retirement, Surplus Termination, Severance Termination, or Other Termination. Unless the Committee determines otherwise at any time, in the event of the Participant's Termination of Employment during the Performance Period while Retirement eligible, in the event of a Surplus Termination of Employment, Severance Termination of Employment, and in each case, not due to death or Disability, then upon such Termination, the amount of the Participant's Performance Units and number of Performance Shares shall be adjusted; the revised Awards shall be determined by multiplying the amount of the Performance Units and the number of Performance Shares, as applicable, by the number of months the Participant worked at least one day during the respective Performance Period divided by the number of months in the Performance Period, to be paid, if at all, at the same time and under the same terms that such outstanding Performance Units or Performance Shares would otherwise be paid; provided, however, if the Termination of Employment occurs during the Performance Period and is for a reason other than Death, Disability, Surplus Termination of Employment, or Severance Termination of Employment and while not Retirement eligible, then the related Award shall be cancelled upon such Termination.
|
8.09
|
Nontransferability. Performance Units and Performance Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than in accordance with the AT&T Rules for Employee Beneficiary Designations.
|
9.01
|
In the event of the death of a Participant, distributions or Awards under this Plan, except for Restricted Stock, shall pass in accordance with the AT&T Rules for Employee Beneficiary Designations, as the same may be amended from time to time. A Participant's most recent Beneficiary Designation that is applicable to awards under the 1996 Stock and Incentive Plan, the 2001 Incentive Plan, the 2006 Incentive Plan, or the 2011 Incentive Plan will also apply to distributions or awards under this Plan, except for Restricted Stock, unless and until the Participant provides to the contrary in accordance with the procedures set forth in such Rules.
|
10.01
|
Employment Not Guaranteed. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant's Employment at any time, nor confer upon any Participant any right to continue in the employ of the Company or one of its Subsidiaries.
|
10.02
|
Participation. No Employee shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.
|
10.03
|
Loyalty Conditions and Enforcement. This section relates solely to Awards granted to a Participant who is an Officer Level Employee or a Senior Manager as of the date the Award is made.
|
(a)
|
Each Award under the Plan is intended to closely align the Participant's long-term interests with those of the Company and its shareholders, and the conditions set forth in subsections (b) or (d) hereof (collectively, the "Loyalty Conditions") are intended to protect the Company's critical need for each Participant's loyalty to the Company and its shareholders. If any Participant does not comply with a Loyalty Condition, either during employment or within the periods described below following Termination of Employment for any reason, then the Participant is acting contrary to the long-term interests of the Company, and there will be a failure of the consideration on which the Participant received any Award or Awards pursuant to the Plan. Accordingly, unless otherwise provided in the Award, as a condition of such Award, the Participant is deemed to agree that he shall not, without obtaining the written consent of AT&T in advance, violate the Loyalty Provisions of this Section 10.3. Unless otherwise expressly provided in an Award Agreement, if the Participant violates a Loyalty Condition, then the Company may terminate any outstanding, unexercised, unexpired, unpaid, or deferred Awards ("Award Termination"), rescind any exercise, payment or delivery pursuant to any Award or Awards ("Rescission"), or recapture any cash or Shares (whether restricted or unrestricted) issued pursuant to any Award or Awards, or proceeds from the Participant's sale of such Shares ("Recapture"). Notwithstanding any provision to the contrary, nothing in this Plan shall be interpreted to prohibit, limit or interfere with a Participant's right to report possible violations of federal, state or local law or regulation to any governmental or law enforcement agency or entity, including, but not limited to, the Department of Justice, the Securities and Exchange Commission, the Federal Communications Commission or Congress, or to make other disclosures that are protected under the whistleblower or other provision of federal, state or local law or regulation. Similarly, a Participant may report such possible violations to anyone in his or her chain of command, the AT&T Legal Department, AT&T Asset Protection, or any other AT&T group responsible for compliance with laws or AT&T policy.
|
(b)
|
During the Participant's employment with the Company and any of its Subsidiaries and for a period of two years after a Termination of Employment for any reason, a Participant shall not, without the Company's prior written authorization, (i) disclose to anyone outside the Company or use, other than in the Company's business, any Confidential Information, or (ii) disclose any trade secrets of the Company, as that term is defined under Applicable Law, for as long as such information is not generally known to the Company's competitors through no fault or negligence of the Participant.
|
(c)
|
Coincidentally with the exercise, receipt of payment, or delivery of cash or Shares pursuant to an Award, the Company may require that the Participant shall give a certification to the Company in writing if the Participant is not for any reason in full compliance with the terms and conditions of the Plan, including its Loyalty Conditions. If a Termination of Employment has occurred for any reason, the Participant's certification shall state the name and address of the Participant's then-current employer or any entity for which the Participant performs business services and the Participant's title, and shall identify any organization or business in which the Participant owns an equity interest of greater than five percent.
|
(d)
|
If the Company determines, in its sole and absolute discretion, that (i) a Participant has violated any of the Loyalty Conditions, or (ii) during his or her employment by the Company or any of its Subsidiaries, or within two years after the Termination of Employment for any reason, a Participant has engaged in any of the following conduct:
|
(i)
|
owned, operated or controlled, or participated in the ownership, operation or control of, any business enterprise (including, without limitation, any corporation, partnership, proprietorship or other venture) that competes with the Company in the Restricted Business (defined below) anywhere in the Restricted Territory (defined below);
|
(ii)
|
become employed as an officer or executive by any business enterprise (including, without limitation, any corporation, partnership, proprietorship or other venture) that competes with the Company in the Restricted Business anywhere in the Restricted Territory, if such employment or engagement requires Participant to compete against the Company in the Restricted Business;
|
(iii)
|
solicited any nonclerical employee of the Company with whom the Participant had Contact during his or her employment to terminate employment with the Company; or
|
(iv)
|
committed any breach of Participant's fiduciary duty or the duty of loyalty, as determined by Applicable Law,
|
(e)
|
Within ten days after receiving notice from the Company of any such activity described in subsection (d) above, the Participant shall deliver to the Company the cash or Shares acquired pursuant to any and all Awards, or, if Participant has sold the Shares, the gain realized, or payment received as a result of the rescinded exercise, payment, or delivery; provided, that if the Participant returns Shares that the Participant purchased pursuant to the exercise of an Option (or the gains realized from the sale of such Shares), the Company shall promptly refund the exercise price, without earnings or interest, that the Participant paid for the Shares. Any payment by the Participant to the Company pursuant to this Section shall be made either in cash or by returning to the Company the number of Shares that the Participant received in connection with the rescinded exercise, payment, or delivery. It shall not be a basis for Award Termination, Rescission or Recapture if, after a Termination of Employment, the Participant purchases, as an investment or otherwise, stock or other securities of an organization engaged in the Restricted Business, so long as (i) such stock or other securities are listed upon a recognized securities exchange or traded over the counter, and (ii) such investment does not represent more than a ten percent (10%) equity interest in the organization or business.
|
(f)
|
Notwithstanding the foregoing provisions of this Section, the Company has sole and absolute discretion not to require Award Termination, Rescission and/or Recapture, and its determination not to require Award Termination, Rescission and/or Recapture with respect to any particular act by a particular Participant or Award shall not in any way reduce or eliminate the Company's authority to require Award Termination, Rescission and/or Recapture with respect to any other act or Participant or Award. Nothing in this Section shall be construed to impose obligations on the Participant to refrain from engaging in lawful competition with the Company after the Participant's Termination of Employment that does not violate subsections (b) or (d) of this Section, other than any obligations that are part of any separate agreement between the Company and the Participant or that arise under Applicable Law.
|
(g)
|
All administrative and discretionary authority given to the Company under this Section shall be exercised by the most senior human resources executive of the Company or such other person or committee (including without limitation the Committee) as the Committee may designate from time to time.
|
(h)
|
If any provision within this Section is determined to be unenforceable or invalid under any applicable law, such provision will be applied to the maximum extent permitted by Applicable Law, and shall automatically be deemed amended in a manner consistent with its objectives and any limitations required under Applicable Law.
|
10.04
|
Reimbursement of Company for Unearned or Ill-gotten Gains. The Participant shall repay to the Company any amount received under any Award, and the Company may cancel or forfeit any unpaid or unvested Award, in each case to the extent required under any policy adopted at any time by the Company pursuant to any applicable listing standards established under Section 10D of the Securities Exchange Act of 1934. This section shall not limit the Company's right to revoke or cancel an award or take other action against a recipient of an award for any other reason, including but not limited to misconduct.
|
11.01
|
Amendment and Termination. At any time and from time to time, the Board or the Disinterested Committee may amend or terminate the Plan. The Board, the Disinterested Committee, or the Non-Insider Committee (subject to Section 3.01) may amend an Award in whole or in part. Notwithstanding the foregoing, no termination, amendment, or modification of the Plan or any Award (other than Performance Shares or Performance Units) that adversely affects in any material way any Award previously granted under the Plan shall be made without the written consent of the Participant holding such Award; provided, however, that any such modification made for the purpose of complying with Section 409A of the Code or due to changes in applicable law may be made by the Company without the consent of any Participant.
|
11.02
|
Delay in Payment. To the extent required in order to avoid the imposition of any interest and/or additional tax under Section 409A(a)(1)(B) of the Code, any amount that is considered deferred compensation under the Plan or Agreement and that is required to be postponed pursuant to Section 409A of the Code, following the a Participant's Termination of Employment shall be delayed for six months if a Participant is deemed to be a "specified employee" as defined in Section 409A(a)(2)(i)(B) of the Code; provided that, if the Participant dies during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of Section 409A shall be paid to the executor or administrator of the decedent's estate within 60 days following the date of his death. A "Specified Employee" means any Participant who is a "key employee" (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by AT&T in accordance with its uniform policy with respect to all arrangements subject to Code Section 409A, based upon the twelve (12) month period ending on each December 31st (such twelve (12) month period is referred to below as the "identification period"). All Participants who are determined to be key employees under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period shall be treated as Specified Employees for purposes of the Plan during the twelve (12) month period that begins on the first day of the 4th month following the close of such identification period.
|
12.01
|
Tax Withholding. Unless otherwise provided by the Committee, the Company shall deduct or withhold an amount sufficient to satisfy Federal, state, and local taxes (including but not limited to the Participant's employment tax obligations) required by law to be withheld with respect to any taxable event arising or as a result of this Plan ("Withholding Taxes").
|
12.02
|
Share Withholding.
|
(a)
|
Unless otherwise provided by the Committee, upon the exercise of Options, the lapse of restrictions on Restricted Stock, the distribution of Performance Shares in the form of Stock, or any other taxable event hereunder involving the transfer of Stock to a Participant, the Company shall withhold Stock equal in value to the Withholding Taxes applicable to such transaction using the method used to value the Stock for tax purposes.
|
(b)
|
Any fractional Share of Stock payable to a Participant shall be withheld as additional Federal withholding, or, at the option of the Company, paid in cash to the Participant.
|
(c)
|
Unless otherwise determined by the Committee, when the method of payment for the Exercise Price is from the sale through an agent appointed by the Company of the Stock acquired through the Option exercise, then the tax withholding shall be satisfied out of the proceeds. For administrative purposes in determining the amount of taxes due, the sale price of such Stock shall be deemed to be the Fair Market Value of the Stock.
|
(d)
|
If permitted by the Committee, prior to the end of any Performance Period a Participant may elect to have a greater amount of Stock withheld from the distribution of Performance Shares to pay withholding taxes; provided, however, the Committee may prohibit or limit any individual election or all such elections at any time.
|
(e)
|
Alternatively, or in combination with the foregoing, the Committee may require Withholding Taxes to be paid in cash by the Participant or by the sale of a portion of the Stock being distributed in connection with an Award, or by a combination thereof.
|
13.01
|
All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
|
14.01
|
Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.
|
14.02
|
Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
|
14.03
|
Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
|
14.04
|
Errors. At any time AT&T may correct any error made under the Plan without prejudice to AT&T. Such corrections may include, among other things, changing or revoking an issuance of an Award.
|
14.05
|
Elections and Notices.
|
(a)
|
Notwithstanding anything to the contrary contained in this Plan, all elections and notices of every kind shall be made on forms prepared by AT&T or the General Counsel, Secretary or Assistant Secretary, or their respective delegates or shall be made in such other manner as permitted or required by AT&T or the General Counsel, Secretary or Assistant Secretary, or their respective delegates, including but not limited to elections or notices through electronic means, over the Internet or otherwise. An election shall be deemed made when received by AT&T (or its designated agent, but only in cases where the designated agent has been appointed for the purpose of receiving such election), which may waive any defects in form. AT&T may limit the time an election may be made in advance of any deadline.
|
(b)
|
Where any notice or filing required or permitted to be given to AT&T under the Plan, it shall be delivered to the principal office of AT&T, directed to the attention of the Senior Executive Vice President-Human Resources of AT&T or his or her successor. Such notice shall be deemed given on the date of delivery.
|
(c)
|
Notice to the Participant shall be deemed given when mailed (or sent by telecopy) to the Participant's work or home address as shown on the records of AT&T or, at the option of AT&T, to the Participant's e-mail address as shown on the records of AT&T.
|
(d)
|
It is the Participant's responsibility to ensure that the Participant's addresses are kept up to date on the records of AT&T. In the case of notices affecting multiple Participants, the notices may be given by general distribution at the Participants' work locations.
|
14.06
|
Governing Law. To the extent not preempted by Federal law, the Plan, and all awards and agreements hereunder, and any and all disputes in connection therewith, shall be governed by and construed in accordance with the substantive laws of the State of Texas, without regard to conflict or choice of law principles which might otherwise refer the construction, interpretation or enforceability of this Plan to the substantive law of another jurisdiction.
|
14.07
|
Venue. Because awards under the Plan are granted in Texas, records relating to the Plan and awards thereunder are located in Texas, and the Plan and awards thereunder are administered in Texas, except as otherwise agreed by the Participant and the Company in a Mandatory Arbitration Agreement, the Company and the Participant to whom an award under this Plan is granted, for themselves and their successors and assigns, irrevocably submit to the exclusive and sole jurisdiction and venue of the state or federal courts of Texas with respect to any and all disputes arising out of or relating to this Plan, the subject matter of this Plan or any awards under this Plan, including but not limited to any disputes arising out of or relating to the interpretation and enforceability of any awards or the terms and conditions of this Plan. To achieve certainty regarding the appropriate forum in which to prosecute and defend actions arising out of or relating to this Plan, and to ensure consistency in application and interpretation of the Governing Law to the Plan, except as otherwise agreed by the Participant and the Company in a Mandatory Arbitration Agreement, the parties agree that:
|
(a)
|
sole and exclusive appropriate venue for any such action shall be an appropriate federal or state court in Dallas County, Texas, and no other,
|
(b)
|
all claims with respect to any such action shall be heard and determined exclusively in such Texas court, and no other,
|
(c)
|
such Texas court shall have sole and exclusive jurisdiction over the person of such parties and over the subject matter of any dispute relating hereto, and
|
(d)
|
that the parties waive any and all objections and defenses to bringing any such action before such Texas court, including but not limited to those relating to lack of personal jurisdiction, improper venue or forum non conveniens.
|
14.08
|
409A Compliance. Awards under the Plan may be structured to be exempt from or be subject to Section 409A of the Code. To the extent that Awards granted under the Plan are subject to Section 409A of the Code, the Plan will be construed and administered in a manner that enables the Plan and such Awards to comply with the provisions of Section 409A of the Code.
|
EXHIBIT 12
|
||||||||||||||||||||||||||||
AT&T INC.
|
||||||||||||||||||||||||||||
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
|
||||||||||||||||||||||||||||
Dollars in Millions
|
||||||||||||||||||||||||||||
Three Months Ended
|
Year Ended December 31,
|
|||||||||||||||||||||||||||
March 31,
|
||||||||||||||||||||||||||||
2016
|
2015
|
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||||||||
Earnings:
|
||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes
|
$
|
6,007
|
$
|
4,728
|
$
|
20,692
|
$
|
10,355
|
$
|
28,050
|
$
|
10,496
|
$
|
6,998
|
||||||||||||||
Equity in net income of affiliates included above
|
(13)
|
|
-
|
(79)
|
|
(175)
|
|
(642)
|
|
(752)
|
|
(784)
|
|
|||||||||||||||
Fixed charges
|
1,799
|
1,397
|
6,592
|
5,295
|
5,452
|
4,876
|
4,835
|
|||||||||||||||||||||
Distributed income of equity affiliates
|
8
|
-
|
30
|
148
|
318
|
137
|
161
|
|||||||||||||||||||||
Interest capitalized
|
(218)
|
|
(123)
|
|
(797)
|
|
(234)
|
|
(284)
|
|
(263)
|
|
(162)
|
|
||||||||||||||
Earnings, as adjusted
|
$
|
7,583
|
$
|
6,002
|
$
|
26,438
|
$
|
15,389
|
$
|
32,894
|
$
|
14,494
|
$
|
11,048
|
||||||||||||||
Fixed Charges:
|
||||||||||||||||||||||||||||
Interest expense
|
$
|
1,207
|
$
|
899
|
$
|
4,120
|
$
|
3,613
|
$
|
3,940
|
$
|
3,444
|
$
|
3,535
|
||||||||||||||
Interest capitalized
|
218
|
123
|
797
|
234
|
284
|
263
|
162
|
|||||||||||||||||||||
Portion of rental expense representative of interest factor
|
374
|
375
|
1,675
|
1,448
|
1,228
|
1,169
|
1,138
|
|||||||||||||||||||||
Fixed Charges
|
$
|
1,799
|
$
|
1,397
|
$
|
6,592
|
$
|
5,295
|
$
|
5,452
|
$
|
4,876
|
$
|
4,835
|
||||||||||||||
Ratio of Earnings to Fixed Charges
|
4.22
|
4.30
|
4.01
|
2.91
|
6.03
|
2.97
|
2.29
|
|||||||||||||||||||||
1.
|
I have reviewed this report on Form 10-Q of AT&T Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this report on Form 10-Q of AT&T Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
May 5, 2016 | May 5, 2016 |
. |
By: /s/ Randall Stephenson
Randall Stephenson
Chairman of the Board, Chief Executive Officer
and President
|
By: /s/ John J. Stephens
John J. Stephens
Senior Executive Vice President
and Chief Financial Officer
|
Document And Entity Information - shares shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Apr. 30, 2016 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Document Period End Date | Mar. 31, 2016 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0000732717 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Registrant Name | AT&T Inc. | |
Entity Common Stock, Shares Outstanding | 6,156 | |
Entity Trading Symbol | T |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Consolidated Statements of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustments, tax effect | $ (10) | $ (104) |
Unrealized gains (losses) on available-for-sale securities - tax | (15) | 19 |
Reclassification adjustment included in net income on available-for-sale securities - tax effect | (2) | (3) |
Unrealized gains (losses) on cash flow hedges - tax | 67 | (190) |
Reclassification adjustment included in net income on cash flow hedges - tax effect | 5 | 4 |
Amortization of net prior service credit included in net income, tax effect | $ (131) | $ (131) |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Consolidated Balance Sheets (Unaudited) | ||
Allowances for doubtful accounts | $ 697 | $ 704 |
Common stock, par value | $ 1 | $ 1 |
Common stock, authorized | 14,000,000,000 | 14,000,000,000 |
Common stock, issued | 6,495,231,088 | 6,495,231,088 |
Treasury stock, held | 339,006,986 | 350,291,239 |
Consolidated Statement Of Changes In Stockholders' Equity - 3 months ended Mar. 31, 2016 - USD ($) shares in Millions, $ in Millions |
Total |
Common Stock [Member] |
Additional Paid-In Capital [Member] |
Retained Earnings [Member] |
Treasury Stock [Member] |
Accumulated Other Comprehensive Income Attributable to AT&T, net of tax [Member] |
Noncontrolling Interest [Member] |
---|---|---|---|---|---|---|---|
Balance at beginning of year at Dec. 31, 2015 | $ 123,640 | $ 6,495 | $ 89,763 | $ 33,671 | $ (12,592) | $ 5,334 | $ 969 |
Balance at beginning of year (in shares) at Dec. 31, 2015 | 6,495 | (350) | |||||
Issuance of stock | $ 0 | ||||||
Issuance of stock (in shares) | 0 | ||||||
Issuance of treasury stock | (41) | $ 429 | |||||
Issuance of treasury stock, (in shares) | 11 | ||||||
Share-based payments | (308) | ||||||
Net income attributable to AT&T ($0.61 per diluted share) | 3,803 | 3,803 | |||||
Dividends to stockholders ($0.48 per share) | (2,968) | ||||||
Other comprehensive income attributable to AT&T | (154) | (154) | |||||
Net income attributable to noncontrolling interest | 82 | 82 | |||||
Distributions | (78) | ||||||
Balance at end of period at Mar. 31, 2016 | $ 124,405 | $ 6,495 | $ 89,414 | $ 34,506 | $ (12,163) | $ 5,180 | $ 973 |
Balance at end of period (in shares) at Mar. 31, 2016 | 6,495 | (339) |
Consolidated Statement Of Changes In Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) | ||
Net income attributable to AT&T, per diluted share | $ 0.61 | $ 0.63 |
Dividends to stockholders, per share | $ 0.48 | $ 0.47 |
Preparation Of Interim Financial Statements |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Preparation Of Interim Financial Statements Disclosure [Abstract] | |
Preparation Of Interim Financial Statements | NOTE 1. PREPARATION OF INTERIM FINANCIAL STATEMENTS
Basis of Presentation Throughout this document, AT&T Inc. is referred to as “AT&T,” “we” or the “Company.” These consolidated financial statements include all adjustments that are necessary to present fairly the results for the presented interim periods, consisting of normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of those for the full year. You should read this document in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2015.
The consolidated financial statements include the accounts of the Company and our majority-owned subsidiaries and affiliates, including the results of DIRECTV and wireless properties in Mexico for the period from acquisition to the reporting date. Our subsidiaries and affiliates operate in the communications and digital entertainment services industry, providing services and equipment that deliver voice, video and broadband services domestically and internationally.
All significant intercompany transactions are eliminated in the consolidation process. Investments in less than majority-owned subsidiaries and partnerships where we have significant influence are accounted for under the equity method. Earnings from certain investments accounted for using the equity method are included for periods ended within up to one quarter of our period end. We also record our proportionate share of our equity method investees' other comprehensive income (OCI) items, including cumulative translation adjustments.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes, including estimates of probable losses and expenses. Actual results could differ from those estimates. Certain amounts have been conformed to the current period's presentation, including our change in accounting to capitalize customer set-up and installations costs and amortize them over the expected economic life of the customer relationship. The consolidated statements of income also include revisions to present “Equipment” and “Broadcast, programming and operations” costs separately from “Other cost of services.”
New Accounting Standards
Leases In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, “Leases (Topic 842)” (ASU 2016-02), which replaces existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. ASU 2016-02 will require lessees to recognize most leases on their balance sheets as liabilities, with corresponding “right-of-use” assets. Leases will be classified as either a finance or an operating lease without relying upon the bright-line tests under current GAAP.
Upon initial evaluation, we believe the key change upon adoption will be the balance sheet recognition. The income statement recognition appears similar to our current methodology.
ASU 2016-02 becomes effective for annual reporting periods beginning after December 15, 2018, subject to early adoption. We have just begun our evaluation of the impact on our financial statements, as well as available adoption methods, but we believe our implementation of the revenue recognition standard discussed below could influence the timing of our adoption of ASU 2016-02.
Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09) and has since modified the standard with ASU 2015-14, “Deferral of the Effective Date,” ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” and ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” These standards replace existing revenue recognition rules with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. ASU 2014-09, as amended, becomes effective for annual reporting periods beginning after December 15, 2017, at which point we plan to adopt the standard.
The FASB allows two adoption methods under ASU 2014-09. Under one method, a company will apply the rules to contracts in all reporting periods presented, subject to certain allowable exceptions. Under the other method, a company will apply the rules to all contracts existing as of January 1, 2018, recognizing in beginning retained earnings an adjustment for the cumulative effect of the change and providing additional disclosures comparing results to previous rules (“modified retrospective method”). We continue to evaluate the impact of the new standard and available adoption methods.
Upon initial evaluation, we believe the key changes in the standard that impact our revenue recognition relate to the allocation of contract revenues between various services and equipment, and the timing of when those revenues are recognized. We are still in the process of evaluating these impacts. As a result of our accounting policy change for customer set-up and installation costs in 2015, we believe under the new standard that the requirement to defer such costs will not result in a significant change to our results. However, the requirement to defer incremental contract acquisition costs and recognize them over the contract period or expected customer life will result in the recognition of a deferred charge on our balance sheets. We cannot currently estimate the impact of this change upon adoption, as the industry continues to undergo changes in how devices and services are sold to customers.
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Earnings Per Share |
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Earnings Per Share | NOTE 2. EARNINGS PER SHARE
A reconciliation of the numerators and denominators of basic earnings per share and diluted earnings per share for the three months ended March 31, 2016 and 2015, is shown in the table below:
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Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | NOTE 3. OTHER COMPREHENSIVE INCOME
Changes in the balances of each component included in accumulated other comprehensive income (accumulated OCI) are presented below. All amounts are net of tax and exclude noncontrolling interest.
Following our 2015 acquisitions of DIRECTV and wireless businesses in Mexico, we have additional foreign operations that are exposed to fluctuations in the exchange rates used to convert operations, assets and liabilities into U.S. dollars. Since December 31, 2015, when compared to the U.S. dollar, the Brazilian real exchange rate has appreciated 9.3%, the Argentine peso exchange rate has depreciated 13.7% and the Mexican peso exchange rate has depreciated 0.4%.
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Segment Information |
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Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | NOTE 4. SEGMENT INFORMATION
Our segments are strategic business units that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly. Due to recent organizational changes and our July 24, 2015, acquisition of DIRECTV, effective for the quarter ended September 30, 2015, we revised our operating segments to align with our new management structure and organizational responsibilities. We analyze our operating segments based on segment contribution, which consists of operating income, excluding acquisition-related costs and other significant items (as discussed below), and equity in net income of affiliates for investments managed within each operating segment. We have four reportable segments: (1) Business Solutions, (2) Entertainment Group, (3) Consumer Mobility and (4) International.
We also evaluate segment performance based on segment operating income before depreciation and amortization, which we refer to as EBITDA and/or EBITDA margin. We believe EBITDA to be a relevant and useful measurement to our investors as it is part of our internal management reporting and planning processes and it is an important metric that management uses to evaluate segment operating performance. EBITDA does not give effect to cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses.
The Business Solutions segment provides services to business, including multinational companies; governmental and wholesale customers; and individual subscribers who purchase wireless services through employer-sponsored plans. We provide advanced IP-based services including Virtual Private Networks (VPN); Ethernet-related products and broadband, collectively referred to as strategic business services; as well as traditional data and voice products. We utilize our wireless and wired networks (referred to as “wired” or “wireline”) to provide a complete communications solution to our business customers.
The Entertainment Group segment provides video, Internet, voice communication and interactive and targeted advertising services to customers located in the U.S. or in U.S. territories. We utilize our copper and IP-based wired network and/or our satellite technology.
The Consumer Mobility segment provides nationwide wireless service to consumers and wireless wholesale and resale subscribers located in the U.S. or in U.S. territories. We utilize our U.S. wireless network to provide voice and data services, including high-speed Internet, video, and home monitoring services.
The International segment provides entertainment services in Latin America and wireless services in Mexico. Video entertainment services are provided to primarily residential customers using satellite technology. We utilize our regional and national networks in Mexico to provide consumer and business customers with wireless data and voice communication services. Our international subsidiaries conduct business in their local currency and operating results are converted to U.S. dollars using official exchange rates.
In reconciling items to consolidated operating income and income before income taxes, Corporate and Other includes: (1) operations that are not considered reportable segments and that are no longer integral to our operations or which we no longer actively market, and (2) impacts of corporate-wide decisions for which the individual operating segments are not being evaluated, including interest costs and expected return on plan assets for our pension and postretirement benefit plans.
Certain operating items are not allocated to our business segments:
Interest expense and other income (expense) – net, are managed only on a total company basis and are, accordingly, reflected only in consolidated results. Therefore, these items are also not included in each segment's reportable results.
Our operating assets are utilized by multiple segments and consist of our wireless and wired networks as well as an international satellite fleet. We manage our assets to provide for the most efficient, effective and integrated service to our customers, not by operating segment, and therefore asset information and capital expenditures by segment are not presented. Depreciation is allocated based on network usage or asset utilization by segment.
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Pension And Postretirement Benefits |
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Pension And Postretirement Benefits | NOTE 5. PENSION AND POSTRETIREMENT BENEFITS
Substantially all of our employees are covered by one of our noncontributory pension plans. We also provide certain medical, dental, life insurance and death benefits to certain retired employees under various plans and accrue actuarially determined postretirement benefit costs. Our objective in funding these plans, in combination with the standards of the Employee Retirement Income Security Act of 1974, as amended (ERISA), is to accumulate assets sufficient to provide benefits described in the plans to employees upon their retirement.
In 2013, we made a voluntary contribution of a preferred equity interest in AT&T Mobility II LLC, the primary holding company for our domestic wireless business, to the trust used to pay pension benefits under our qualified pension plans. The preferred equity interest had a fair value of $8,787 at March 31, 2016. The trust is entitled to receive cumulative cash distributions of $560 per annum, which will be distributed quarterly in equal amounts and will be accounted for as contributions. We distributed $140 to the trust during the three months ended March 31, 2016. So long as we make the distributions, we will have no limitations on our ability to declare a dividend or repurchase shares. This preferred equity interest is a plan asset under ERISA and is recognized as such in the plan's separate financial statements. However, because the preferred equity interest is not unconditionally transferable to an unrelated party, it is not reflected in plan assets in our consolidated financial statements and instead has been eliminated in consolidation. We have also agreed to make a cash contribution to the trust of $175 no later than the due date of our federal income tax return for 2015.
We recognize actuarial gains and losses on pension and postretirement plan assets in our operating results at our annual measurement date of December 31, unless earlier remeasurements are required. The following table details pension and postretirement benefit costs included in operating expenses in the accompanying consolidated statements of income. A portion of these expenses is capitalized as part of internal construction projects, providing a small reduction in the net expense recorded.
The increase of $59 in the first quarter of 2016 is primarily due to a lower expected return on assets resulting from a decrease in the value in the plan assets.
We also provide senior- and middle-management employees with nonqualified, unfunded supplemental retirement and savings plans. For the first quarter ended 2016 and 2015, net supplemental retirement pension benefits costs not included in the table above, were $23 and $20, respectively. |
Fair Value Measurements And Disclosure |
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Fair Value Measurements And Disclosure | NOTE 6. FAIR VALUE MEASUREMENTS AND DISCLOSURE
The Fair Value Measurement and Disclosure framework provides a three-tiered fair value hierarchy that gives highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
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:
Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The fair value measurements level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Our valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.
The valuation methodologies described above may produce a fair value calculation that may not be indicative of future net realizable value or reflective of future fair values. We believe our valuation methods are appropriate and consistent with other market participants. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There have been no changes in the methodologies used since December 31, 2015.
Long-Term Debt and Other Financial Instruments The carrying amounts and estimated fair values of our long-term debt, including current maturities and other financial instruments, are summarized as follows:
The carrying value of debt with an original maturity of less than one year approximates market value. The fair value measurements used for notes and debentures are considered Level 2 and are determined using various methods, including quoted prices for identical or similar securities in both active and inactive markets. The carrying and fair values included above reflect our March 2016 debt exchange of $16,049 of DIRECTV notes for AT&T global notes with matching terms.
Following is the fair value leveling for available-for-sale securities and derivatives as of March 31, 2016, and December 31, 2015:
Investment Securities Our investment securities include equities, fixed income bonds and other securities. A substantial portion of the fair values of our available-for-sale securities was estimated based on quoted market prices. Investments in securities not traded on a national securities exchange are valued using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Realized gains and losses on securities are included in “Other income (expense) – net” in the consolidated statements of income using the specific identification method. Unrealized gains and losses, net of tax, on available-for-sale securities are recorded in accumulated OCI. Unrealized losses that are considered other than temporary are recorded in “Other income (expense) – net” with the corresponding reduction to the carrying basis of the investment. Fixed income investments of $99 have maturities of less than one year, $308 within one to three years, $65 within three to five years, and $204 for five or more years.
Our cash equivalents (money market securities), short-term investments (certificate and time deposits) and customer deposits are recorded at amortized cost, and the respective carrying amounts approximate fair values. Short-term investments and customer deposits are recorded in “Other current assets” and our investment securities are recorded in “Other Assets” on the consolidated balance sheets.
Derivative Financial Instruments We enter into derivative transactions to manage certain market risks, primarily interest rate risk and foreign currency exchange risk. This includes the use of interest rate swaps, interest rate locks, foreign exchange forward contracts and combined interest rate foreign exchange contracts (cross-currency swaps). We do not use derivatives for trading or speculative purposes. We record derivatives on our consolidated balance sheets at fair value that is derived from observable market data, including yield curves and foreign exchange rates (all of our derivatives are Level 2). Cash flows associated with derivative instruments are presented in the same category on the consolidated statements of cash flows as the item being hedged.
Fair Value Hedging We designate our fixed-to-floating interest rate swaps as fair value hedges. The purpose of these swaps is to manage interest rate risk by managing our mix of fixed-rate and floating-rate debt. These swaps involve the receipt of fixed-rate amounts for floating interest rate payments over the life of the swaps without exchange of the underlying principal amount. Accrued and realized gains or losses from interest rate swaps impact interest expense in the consolidated statements of income. Unrealized gains on interest rate swaps are recorded at fair market value as assets, and unrealized losses on interest rate swaps are recorded at fair market value as liabilities. Changes in the fair values of the interest rate swaps are exactly offset by changes in the fair value of the underlying debt. Gains or losses realized upon early termination of our fair value hedges are recognized in interest expense. In the three months ended March 31, 2016, and March 31, 2015, no ineffectiveness was measured on interest rate swaps designated as fair value hedges.
Cash Flow Hedging We designate our cross-currency swaps as cash flow hedges. We have entered into multiple cross-currency swaps to hedge our exposure to variability in expected future cash flows that are attributable to foreign currency risk generated from the issuance of our Euro, British pound sterling, Canadian dollar and Swiss franc denominated debt. These agreements include initial and final exchanges of principal from fixed foreign currency denominations to fixed U.S. dollar denominated amounts, to be exchanged at a specified rate that is usually determined by the market spot rate upon issuance. They also include an interest rate swap of a fixed or floating foreign currency-denominated rate to a fixed U.S. dollar denominated interest rate.
Unrealized gains on derivatives designated as cash flow hedges are recorded at fair value as assets, and unrealized losses on derivatives designated as cash flow hedges are recorded at fair value as liabilities. For derivative instruments designated as cash flow hedges, the effective portion is reported as a component of accumulated OCI until reclassified into interest expense in the same period the hedged transaction affects earnings. The gain or loss on the ineffective portion is recognized as “Other income (expense) – net” in the consolidated statements of income in each period. We evaluate the effectiveness of our cross-currency swaps each quarter. In the three months ended March 31, 2016, and March 31, 2015, no ineffectiveness was measured on cross-currency swaps designated as cash flow hedges.
Periodically, we enter into and designate interest rate locks to partially hedge the risk of changes in interest payments attributable to increases in the benchmark interest rate during the period leading up to the probable issuance of fixed-rate debt. We designate our interest rate locks as cash flow hedges. Gains and losses when we settle our interest rate locks are amortized into income over the life of the related debt, except where a material amount is deemed to be ineffective, which would be immediately reclassified to “Other income (expense) – net” in the consolidated statements of income. Over the next 12 months, we expect to reclassify $59 from accumulated OCI to interest expense due to the amortization of net losses on historical interest rate locks.
We hedge a portion of the exchange risk involved in anticipation of highly probable foreign currency-denominated transactions. In anticipation of these transactions, we often enter into foreign exchange contracts to provide currency at a fixed rate. Gains and losses at the time we settle or take delivery on our designated foreign exchange contracts are amortized into income in the same period the hedged transaction affects earnings, except where an amount is deemed to be ineffective, which would be immediately reclassified to “Other income (expense) – net” in the consolidated statements of income. In the three months ended March 31, 2016, and March 31, 2015, no ineffectiveness was measured on foreign exchange contracts designated as cash flow hedges.
Collateral and Credit-Risk Contingency We have entered into agreements with our derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. At March 31, 2016, we had posted collateral of $1,743 (a deposit asset) and held collateral of $111 (a receipt liability). Under the agreements, if our credit rating had been downgraded one rating level by Fitch Ratings, before the final collateral exchange in March, we would have been required to post additional collateral of $130. If DIRECTV Holdings LLC's credit rating had been downgraded below BBB- (S&P) and below Baa3 (Moody's), we would owe an additional $195. At December 31, 2015, we had posted collateral of $2,343 (a deposit asset) and held collateral of $124 (a receipt liability). We do not offset the fair value of collateral, whether the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) exists, against the fair value of the derivative instruments.
Following is the notional amount of our outstanding derivative positions:
In addition, the net swap settlements that accrued and settled in the quarter ended March 31 were offset against interest expense.
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Acquisitions, Dispositions And Other Adjustments |
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Acquisitions, Dispositions And Other Adjustments | NOTE 7. ACQUISITIONS, DISPOSITIONS AND OTHER ADJUSTMENTS
Acquisitions
DIRECTV In July 2015, we completed our acquisition of DIRECTV, a leading provider of digital television entertainment services in both the United States and Latin America. For accounting purposes, the transaction was valued at $47,409. Our operating results include the results of DIRECTV following the acquisition date.
The fair values of the assets acquired and liabilities assumed were preliminarily determined using the income, cost and market approaches. The fair value measurements were primarily based on significant inputs that are not observable in the market and are considered Level 3 under the Fair Value Measurement and Disclosure framework, other than long-term debt assumed in the acquisition (see Note 6). The income approach was primarily used to value the intangible assets, consisting of acquired customer relationships, orbital slots and trade names. The income approach estimates fair value for an asset based on the present value of cash flows projected to be generated by the asset. Projected cash flows are discounted at a required rate of return that reflects the relative risk of achieving the cash flows and the time value of money. The cost approach, which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility, was used primarily for property, plant and equipment. The cost to replace a given asset reflects the estimated reproduction or replacement cost for the property, less an allowance for loss in value due to depreciation.
The fair value estimates are preliminary in nature and subject to adjustments, which could be material. Any necessary adjustments will be finalized within one year from the date of acquisition. Substantially all the receivables acquired are expected to be collectable. We have not identified any material unrecorded pre-acquisition contingencies where the related asset, liability or impairment is probable and the amount can be reasonably estimated. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired, and represents the future economic benefits that we expect to achieve as a result of acquisition. Prior to the finalization of the purchase price allocation, if information becomes available that would indicate it is probable that such events had occurred and the amounts can be reasonably estimated, such items will be included in the final purchase price allocation and may change goodwill.
The following table summarizes the preliminary estimated fair values of the DIRECTV assets acquired and liabilities assumed and related deferred income taxes that existed as of the acquisition date.
Purchased goodwill is not expected to be deductible for tax purposes. The goodwill was allocated to our Entertainment Group and International segments.
Nextel Mexico In April 2015, we completed our acquisition of the subsidiaries of NII Holdings Inc., operating its wireless business in Mexico, for $1,875, including approximately $427 of net debt and other adjustments. The subsidiaries offered service under the name Nextel Mexico.
The purchase price allocation of assets acquired was: $376 in licenses, $1,167 in property, plant and equipment, $128 in customer lists and $193 of goodwill. The goodwill was allocated to our International segment.
GSF Telecom In January 2015, we acquired Mexican wireless company GSF Telecom Holdings, S.A.P.I. de C.V. (GSF Telecom) for $2,500, including net debt of approximately $700. GSF Telecom offered service under both the Iusacell and Unefon brand names in Mexico.
The purchase price allocation of assets acquired was: $735 in licenses, $658 in property, plant and equipment, $378 in customer lists, $26 in trade names and $956 of goodwill. The goodwill was allocated to our International segment.
AWS-3 Auction In January 2015, we submitted winning bids of $18,189 in the Advanced Wireless Service (AWS)-3 Auction (FCC Auction 97) a portion of which represented spectrum clearing and First Responder Network Authority funding. We provided the Federal Communications Commission (FCC) an initial down payment of $921 in October 2014 and paid the remaining $17,268 in the first quarter of 2015.
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Sale of Equipment Installment Receivables |
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Finance Receivables Disclosure[Text Block] | NOTE 8. SALES OF EQUIPMENT INSTALLMENT RECEIVABLES
We offer our customers the option to purchase certain wireless devices in installments over a period of up to 30 months, with the right to trade in the original equipment for a new device within a set period and have the remaining unpaid balance satisfied. As of March 31, 2016, and December 31, 2015, gross equipment installment receivables of $5,079 and $5,719 were included on our consolidated balance sheets, of which $3,007 and $3,239 are notes receivable that are included in “Accounts receivable - net.”
In 2014, we entered into the first of a series of uncommitted agreements pertaining to the sale of equipment installment receivables and related security with Citibank and various other relationship banks as purchasers (collectively, the Purchasers). Under these agreements, we transferred the receivables to the Purchasers for cash and additional consideration upon settlement of the receivables, referred to as the deferred purchase price. Under the terms of the arrangements, we continue to bill and collect on behalf of our customers for the receivables sold.
The following table sets forth a summary of equipment installment receivables sold during the three months ended March 31, 2016 and 2015:
The deferred purchase price is initially recorded at estimated fair value, which is based on remaining installment payments expected to be collected, adjusted by the expected timing and value of device trade-ins, and subsequently carried at the lower of cost or net realizable value. The estimated value of the device trade-ins considers prices offered to us by independent third parties that contemplate changes in value after the launch of a device model. The fair value measurements used are considered Level 3 under the Fair Value Measurement and Disclosure framework (see Note 6).
During the first quarter of 2016, we repurchased installment receivables previously sold to the Purchasers, with a fair value of $532. These transactions reduced our current deferred purchase price receivable by $539, resulting in a loss of $7 during the quarter. This loss is included in “Selling, general and administrative” in the consolidated statements of income.
At March 31, 2016, and December 31, 2015, our deferred purchase price receivable was $2,975 and $2,961, respectively, of which $1,469 and $1,772 is included in “Other current assets” on our consolidated balance sheets, with the remainder in “Other Assets.” Our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the amount of our deferred purchase price at any point in time.
The sales of equipment installment receivables did not have a material impact on our consolidated statements of income or to “Total Assets” reported on our consolidated balance sheets. We reflect the cash flows related to the arrangement as operating activities in our consolidated statements of cash flows because the cash received from the Purchasers upon both the sale of the receivables and the collection of the deferred purchase price is not subject to significant interest rate risk. |
Preparation Of Interim Financial Statements (Policy) |
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Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | NOTE 1. PREPARATION OF INTERIM FINANCIAL STATEMENTS
Basis of Presentation Throughout this document, AT&T Inc. is referred to as “AT&T,” “we” or the “Company.” These consolidated financial statements include all adjustments that are necessary to present fairly the results for the presented interim periods, consisting of normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of those for the full year. You should read this document in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2015.
The consolidated financial statements include the accounts of the Company and our majority-owned subsidiaries and affiliates, including the results of DIRECTV and wireless properties in Mexico for the period from acquisition to the reporting date. Our subsidiaries and affiliates operate in the communications and digital entertainment services industry, providing services and equipment that deliver voice, video and broadband services domestically and internationally.
All significant intercompany transactions are eliminated in the consolidation process. Investments in less than majority-owned subsidiaries and partnerships where we have significant influence are accounted for under the equity method. Earnings from certain investments accounted for using the equity method are included for periods ended within up to one quarter of our period end. We also record our proportionate share of our equity method investees' other comprehensive income (OCI) items, including cumulative translation adjustments.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes, including estimates of probable losses and expenses. Actual results could differ from those estimates. Certain amounts have been conformed to the current period's presentation, including our change in accounting to capitalize customer set-up and installations costs and amortize them over the expected economic life of the customer relationship. The consolidated statements of income also include revisions to present “Equipment” and “Broadcast, programming and operations” costs separately from “Other cost of services.”
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New Accounting Standards | New Accounting Standards
Leases In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, “Leases (Topic 842)” (ASU 2016-02), which replaces existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. ASU 2016-02 will require lessees to recognize most leases on their balance sheets as liabilities, with corresponding “right-of-use” assets. Leases will be classified as either a finance or an operating lease without relying upon the bright-line tests under current GAAP.
Upon initial evaluation, we believe the key change upon adoption will be the balance sheet recognition. The income statement recognition appears similar to our current methodology.
ASU 2016-02 becomes effective for annual reporting periods beginning after December 15, 2018, subject to early adoption. We have just begun our evaluation of the impact on our financial statements, as well as available adoption methods, but we believe our implementation of the revenue recognition standard discussed below could influence the timing of our adoption of ASU 2016-02.
Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09) and has since modified the standard with ASU 2015-14, “Deferral of the Effective Date,” ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” and ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” These standards replace existing revenue recognition rules with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. ASU 2014-09, as amended, becomes effective for annual reporting periods beginning after December 15, 2017, at which point we plan to adopt the standard.
The FASB allows two adoption methods under ASU 2014-09. Under one method, a company will apply the rules to contracts in all reporting periods presented, subject to certain allowable exceptions. Under the other method, a company will apply the rules to all contracts existing as of January 1, 2018, recognizing in beginning retained earnings an adjustment for the cumulative effect of the change and providing additional disclosures comparing results to previous rules (“modified retrospective method”). We continue to evaluate the impact of the new standard and available adoption methods.
Upon initial evaluation, we believe the key changes in the standard that impact our revenue recognition relate to the allocation of contract revenues between various services and equipment, and the timing of when those revenues are recognized. We are still in the process of evaluating these impacts. As a result of our accounting policy change for customer set-up and installation costs in 2015, we believe under the new standard that the requirement to defer such costs will not result in a significant change to our results. However, the requirement to defer incremental contract acquisition costs and recognize them over the contract period or expected customer life will result in the recognition of a deferred charge on our balance sheets. We cannot currently estimate the impact of this change upon adoption, as the industry continues to undergo changes in how devices and services are sold to customers.
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Pension And Postretirement Benefits (Policy) |
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Pension And Postretirement Benefits | |
Capitalization Of Benefit Plan Costs | A portion of these expenses is capitalized as part of internal construction projects, providing a small reduction in the net expense recorded. |
Fair Value Measurements And Disclosure (Policy) |
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Fair Value Disclosures [Abstract] | |
Derivatives, Offsetting Fair Value Amounts, Policy [Policy Text Block] | We do not offset the fair value of collateral, whether the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) exists, against the fair value of the derivative instruments.
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Earnings Per Share (Tables) |
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Reconciliation Of The Numerators And Denominators Of Basic Earnings Per Share And Diluted Earnings Per Share |
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Accumulated Other Comprehensive Income (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income |
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Operating Income (Loss) from Segments to Consolidated Statements of Income |
|
Pension And Postretirement Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension And Postretirement Benefits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension And Postretirement Benefit Costs Included In Operating Expenses |
|
Fair Value Measurements And Disclosure (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt And Other Financial Instruments |
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Fair Value Leveling |
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notional Amount Of Outstanding Derivative Positions |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect Of Derivatives On The Consolidated Statements Of Income |
|
Acquisitions, Dispositions And Other Adjustments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions, Dispositions And Other Adjustments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] |
|
Sale of Equipment Installment Receivables (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes In Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance Receivables |
|
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Earnings Per Share | ||
Net income | $ 3,885 | $ 3,339 |
Less: Net income attributable to noncontrolling interest | (82) | (76) |
Net Income attributable to AT&T | 3,803 | 3,263 |
Share-based payment | 4 | 4 |
Numerator for diluted earnings per share | $ 3,807 | $ 3,267 |
Weighted-average number of common shares outstanding | 6,172 | 5,203 |
Share-based payment (in shares) | 18 | 16 |
Denominator for diluted earnings per share | 6,190 | 5,219 |
Basic Earnings Per Share Attributable to AT&T | $ 0.62 | $ 0.63 |
Diluted Earnings Per Share Attributable to AT&T | $ 0.61 | $ 0.63 |
Accumulated Other Comprehensive Income (Narrative) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Brazillian, Real [Member] | Appreciated [Member] | |
Foreign Currency Balance [Line Items] | |
Change in foreign currency exchange rate, percentage | 9.30% |
Argentina, Pesos [Member] | Depreciated [Member] | |
Foreign Currency Balance [Line Items] | |
Change in foreign currency exchange rate, percentage | 13.70% |
Mexico, Pesos [Member] | Depreciated [Member] | |
Foreign Currency Balance [Line Items] | |
Change in foreign currency exchange rate, percentage | 0.40% |
Segment Information (Summary Of Operating Revenues And Expenses) (Narrative) (Details) |
3 Months Ended | |
---|---|---|
Jul. 24, 2015 |
Mar. 31, 2016 |
|
Segment Reporting Information [Line Items] | ||
Number of Reportable Segments | 4 | |
DIRECTV [Member] | ||
Segment Reporting Information [Line Items] | ||
Business Acquisition - Effective Date of Acquisition | Jul. 24, 2015 |
Pension And Postretirement Benefits (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2013 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Combined net pension and postretirement cost increase (decrease) | $ 59 | |||
Net supplemental retirement pension benefits costs | 23 | $ 20 | ||
Pension Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension Contribution Date | Dec. 31, 2013 | |||
Required contribution to pension plans | 140 | $ 560 | ||
Annualized cash distributions to be received by the trust/pension | $ 175 | |||
Value of entity's noncash contribution to it's defined benefit plans | $ 8,787 |
Pension And Postretirement Benefits (Pension And Postretirement Benefit Costs Included In Operating Expenses) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Net (credit) cost | $ (148) | $ (207) |
Pension Benefit [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost - benefits earned during the period | 278 | 299 |
Interest cost on benefit obligation | 495 | 474 |
Expected return on assets | (778) | (826) |
Amortization of prior service credit | (26) | (26) |
Net (credit) cost | (31) | (79) |
Postretirement Benefit [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost - benefits earned during the period | 48 | 55 |
Interest cost on benefit obligation | 243 | 242 |
Expected return on assets | (89) | (105) |
Amortization of prior service credit | (319) | (320) |
Net (credit) cost | $ (117) | $ (128) |
Fair Value Measurements And Disclosure (Long-Term Debt And Other Financial Instruments) (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Carrying Amount [Member] | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Notes and debentures | $ 129,229 | $ 124,847 |
Bank borrowings | 4 | 4 |
Investment securities | 2,592 | 2,704 |
Fair Value [Member] | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Bank borrowings | 4 | 4 |
Investment securities | 2,592 | 2,704 |
Fair Value [Member] | Level 2 [Member] | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Notes and debentures | $ 137,865 | $ 128,993 |
Fair Value Measurements And Disclosure (Notional Amount Of Our Outstanding Derivative Positions) (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Derivative [Line Items] | ||
Notional Amount of Outstanding Derivative Positions | $ 36,695 | $ 36,792 |
Interest Rate Swaps [Member] | ||
Derivative [Line Items] | ||
Notional Amount of Outstanding Derivative Positions | 7,050 | 7,050 |
Cross-Currency Swaps [Member] | ||
Derivative [Line Items] | ||
Notional Amount of Outstanding Derivative Positions | 29,642 | 29,642 |
Foreign Exchange Contracts [Member] | ||
Derivative [Line Items] | ||
Notional Amount of Outstanding Derivative Positions | $ 3 | $ 100 |
Fair Value Measurements And Disclosure (Effect Of Derivatives On The Consolidated Statements Of Income) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Fair Value Hedging Relationships [Member] | Interest Rate Swaps [Member] | Interest expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) on interest rate swaps | $ 66 | $ 41 |
Gain (Loss) on long-term debt | (66) | (41) |
Cash Flow Hedging Relationships [Member] | Cross-Currency Swaps [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) recognized in accumulated OCI | 191 | (228) |
Cash Flow Hedging Relationships [Member] | Interest Rate Locks [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) recognized in accumulated OCI | 0 | (316) |
Cash Flow Hedging Relationships [Member] | Interest Rate Locks [Member] | Interest expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest income (expense) reclassified from accumulated OCI into income | $ (15) | $ (11) |
Sale Of Equipment Installment Receivables (Finance Receivables) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Changes In Other Assets [Line Items] | ||
Receivables sold during period | $ 2,482 | $ 2,635 |
Cash proceeds received | 1,521 | 1,524 |
Deferred purchase price recorded | 719 | 858 |
Finance Receivables Net [Member] | ||
Changes In Other Assets [Line Items] | ||
Receivables sold during period | $ 2,256 | $ 2,381 |
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