AT&T takes $1bn pension hit
AT&T warns SEC of $1bn quarterly loss because of pension obligation changes
Pension commitments will mean AT&T will record a $1 billion loss when it files its quarterly accounts on Wednesday.
The company warned of the loss in a filing to the US Securities and Exchange Commission (SEC) on Friday.
For the quarter ending 31 December "we expect to record a noncash, pre-tax loss of approximately $1.0 billion related to the annual remeasurement of pension and postemployment benefit plans", said the company.
AT&T added that on New Year’s Eve "we decreased our assumed discount rates used to measure our pension obligation to 4.4% from 4.6%, and to 4.3% from 4.5% for our postretirement obligation generating a loss of approximately $3.0 billion".
It explained to the SEC: "The loss was substantially offset by gains related to better than assumed claims experience, slightly higher than expected asset returns, demographic changes and mortality and other assumption changes. Actuarial gains and losses are managed on a total company basis and are, accordingly, reflected only in consolidated results. This loss will not affect segment operating results or margins and will be included as an adjusting item in our fourth-quarter results."
The company will also record an increase in subscribers when it files the full quarterly results on Wednesday.
AT&T has only 2.3 million remaining 2G subscribers, having deactivated 700,000 in the last quarter of 2016. "We have discontinued service on virtually all of our 2G cell sites," AT&T told the SEC. Last week the company announced it was ceasing 2G service entirely.
The company added 1.2 million customers in Mexico, and 200,000 video additions, "entirely driven by DirecTV Now", AT&T’s streaming service.