AT&T to Record $10 Billion in Charges for Fourth Quarter

By Sarah Rabil

Photographer: Patrick T. Fallon/Bloomberg

An employee helps a customer at an AT&T Inc. store in Manhattan Beach, California, U.S.

AT&T Inc. (T) said its fourth-quarter results will include a pretax loss of $7.9 billion to account for changes in its pension and retiree benefit plans.
The results will also include a $2.1 billion noncash charge because certain copper assets are no longer needed as customer demand declines for older voice and data products, the Dallas-based company said in a regulatory filing Friday. AT&T said its units’ operating results and margins won’t be affected.
The pension adjustments have become a regular January event before fourth-quarter results are announced. Leaving out one-time items such as the pension loss and asset charge, profit will be 56 cents a share, up from 53 cents a year earlier, on revenue of $34.2 billion, according to
the average of analysts’ estimates compiled by Bloomberg.
AT&T shares fell as much as 1.3 percent to $33.37 after U.S. markets closed in New York. The company is scheduled to report earnings results on Jan. 27.
On Dec. 31, AT&T reduced its assumed discount rates for the pension to 4.3 percent and for the retiree benefits to 4.2 percent, resulting in an actuarial loss of about $7.9 billion. Updated mortality rates also contributed to the loss, partially offset by higher asset gains than expected. The losses will only be reflected in consolidated results.