(Mark One)
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
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
|
[ ]
|
Emerging growth company
|
[ ]
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Numerators
|
||||||||||||||||
Numerator for basic earnings per share:
|
||||||||||||||||
Net Income
|
$
|
3,123
|
$
|
3,418
|
$
|
10,711
|
$
|
10,818
|
||||||||
Less: Net income attributable to noncontrolling interest
|
(94
|
)
|
(90
|
)
|
(298
|
)
|
(279
|
)
|
||||||||
Net Income attributable to AT&T
|
3,029
|
3,328
|
10,413
|
10,539
|
||||||||||||
Dilutive potential common shares:
|
||||||||||||||||
Share-based payment
|
3
|
3
|
9
|
9
|
||||||||||||
Numerator for diluted earnings per share
|
$
|
3,032
|
$
|
3,331
|
$
|
10,422
|
$
|
10,548
|
||||||||
Denominators (000,000)
|
||||||||||||||||
Denominator for basic earnings per share:
|
||||||||||||||||
Weighted average number of common shares outstanding
|
6,162
|
6,168
|
6,164
|
6,171
|
||||||||||||
Dilutive potential common shares:
|
||||||||||||||||
Share-based payment (in shares)
|
20
|
21
|
20
|
20
|
||||||||||||
Denominator for diluted earnings per share
|
6,182
|
6,189
|
6,184
|
6,191
|
||||||||||||
Basic earnings per share attributable to AT&T
|
$
|
0.49
|
$
|
0.54
|
$
|
1.69
|
$
|
1.70
|
||||||||
Diluted earnings per share attributable to AT&T
|
$
|
0.49
|
$
|
0.54
|
$
|
1.69
|
$
|
1.70
|
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, 2016
|
$
|
(1,995)
|
$
|
541
|
$
|
744
|
$
|
5,671
|
$
|
4,961
|
|||||
Other comprehensive income
(loss) before reclassifications
|
484
|
128
|
(174)
|
969
|
1,407
|
||||||||||
Amounts reclassified
from accumulated OCI
|
-
|
1
|
(86)
|
1
|
29
|
2
|
(731)
|
3
|
(788)
|
||||||
Net other comprehensive
income (loss)
|
484
|
42
|
(145)
|
238
|
619
|
||||||||||
Balance as of September 30, 2017
|
$
|
(1,511)
|
$
|
583
|
$
|
599
|
$
|
5,909
|
$
|
5,580
|
|||||
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
|
(72)
|
25
|
183
|
-
|
136
|
||||||||||
Amounts reclassified
from accumulated OCI
|
-
|
1
|
(5)
|
1
|
29
|
2
|
(644)
|
3
|
(620)
|
||||||
Net other comprehensive
income (loss)
|
(72)
|
20
|
212
|
(644)
|
(484)
|
||||||||||
Balance as of September 30, 2016
|
$
|
(1,270)
|
$
|
504
|
$
|
228
|
$
|
5,388
|
$
|
4,850
|
|||||
1
|
(Gains) losses are included in Other income (expense) - net in the consolidated statements of income.
|
||||||||||||||
2
|
(Gains) losses are included in Interest expense in the consolidated statements of income (see Note 6).
|
||||||||||||||
3
|
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
which consists of (1) items associated with the merger and integration of acquired businesses and (2) the noncash amortization of intangible assets acquired in acquisitions.
|
·
|
Certain significant items
which consists of (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 September 30, 2017
|
||||||||||||||||||||||||||||
Revenues
|
Operations
and Support
Expenses
|
EBITDA
|
Depreciation
and
Amortization
|
Operating
Income (Loss)
|
Equity in Net
Income (Loss) of
Affiliates
|
Segment
Contribution
|
||||||||||||||||||||||
Business Solutions
|
$
|
17,061
|
$
|
10,233
|
$
|
6,828
|
$
|
2,325
|
$
|
4,503
|
$
|
-
|
$
|
4,503
|
||||||||||||||
Entertainment Group
|
12,648
|
9,953
|
2,695
|
1,379
|
1,316
|
(6
|
)
|
1,310
|
||||||||||||||||||||
Consumer Mobility
|
7,748
|
4,551
|
3,197
|
877
|
2,320
|
-
|
2,320
|
|||||||||||||||||||||
International
|
2,099
|
1,937
|
162
|
304
|
(142
|
)
|
17
|
(125
|
)
|
|||||||||||||||||||
Segment Total
|
39,556
|
26,674
|
12,882
|
4,885
|
7,997
|
$
|
11
|
$
|
8,008
|
|||||||||||||||||||
Corporate and Other
|
201
|
89
|
112
|
21
|
91
|
|||||||||||||||||||||||
Acquisition-related items
|
-
|
134
|
(134
|
)
|
1,136
|
(1,270
|
)
|
|||||||||||||||||||||
Certain significant items
|
(89
|
)
|
326
|
(415
|
)
|
-
|
(415
|
)
|
||||||||||||||||||||
AT&T Inc.
|
$
|
39,668
|
$
|
27,223
|
$
|
12,445
|
$
|
6,042
|
$
|
6,403
|
For the three months ended September 30, 2016
|
||||||||||||||||||||||||||||
Revenues
|
Operations
and Support
Expenses
|
EBITDA
|
Depreciation
and
Amortization
|
Operating
Income (Loss)
|
Equity in Net
Income (Loss) of
Affiliates
|
Segment
Contribution
|
||||||||||||||||||||||
Business Solutions
|
$
|
17,767
|
$
|
10,925
|
$
|
6,842
|
$
|
2,539
|
$
|
4,303
|
$
|
-
|
$
|
4,303
|
||||||||||||||
Entertainment Group
|
12,720
|
9,728
|
2,992
|
1,504
|
1,488
|
-
|
1,488
|
|||||||||||||||||||||
Consumer Mobility
|
8,267
|
4,751
|
3,516
|
944
|
2,572
|
-
|
2,572
|
|||||||||||||||||||||
International
|
1,879
|
1,640
|
239
|
293
|
(54
|
)
|
1
|
(53
|
)
|
|||||||||||||||||||
Segment Total
|
40,633
|
27,044
|
13,589
|
5,280
|
8,309
|
$
|
1
|
$
|
8,310
|
|||||||||||||||||||
Corporate and Other
|
270
|
270
|
-
|
17
|
(17
|
)
|
||||||||||||||||||||||
Acquisition-related items
|
-
|
290
|
(290
|
)
|
1,282
|
(1,572
|
)
|
|||||||||||||||||||||
Certain significant items
|
(13
|
)
|
299
|
(312
|
)
|
-
|
(312
|
)
|
||||||||||||||||||||
AT&T Inc.
|
$
|
40,890
|
$
|
27,903
|
$
|
12,987
|
$
|
6,579
|
$
|
6,408
|
The following table is a reconciliation of Segment Contribution to "Income Before Income Taxes" reported on our
consolidated statements of income.
|
||||||||||||||||
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Business Solutions
|
$
|
4,503
|
$
|
4,303
|
$
|
13,322
|
$
|
12,803
|
||||||||
Entertainment Group
|
1,310
|
1,488
|
4,562
|
4,734
|
||||||||||||
Consumer Mobility
|
2,320
|
2,572
|
7,059
|
7,640
|
||||||||||||
International
|
(125
|
)
|
(53
|
)
|
(257
|
)
|
(421
|
)
|
||||||||
Segment Contribution
|
8,008
|
8,310
|
24,686
|
24,756
|
||||||||||||
Reconciling Items:
|
||||||||||||||||
Corporate and Other
|
91
|
(17
|
)
|
206
|
(235
|
)
|
||||||||||
Merger and integration charges
|
(134
|
)
|
(290
|
)
|
(622
|
)
|
(818
|
)
|
||||||||
Amortization of intangibles acquired
|
(1,136
|
)
|
(1,282
|
)
|
(3,508
|
)
|
(3,949
|
)
|
||||||||
Actuarial gain (loss)
|
-
|
-
|
259
|
-
|
||||||||||||
Employee separation costs
|
(208
|
)
|
(260
|
)
|
(268
|
)
|
(314
|
)
|
||||||||
Gain (loss) on wireless spectrum transactions
|
-
|
(22
|
)
|
181
|
714
|
|||||||||||
Natural disaster costs and revenue credits
|
(207
|
)
|
(30
|
)
|
(207
|
)
|
(30
|
)
|
||||||||
Venezuela devaluation
|
-
|
-
|
(98
|
)
|
-
|
|||||||||||
Segment equity in net (income) loss of affiliates
|
(11
|
)
|
(1
|
)
|
(39
|
)
|
(25
|
)
|
||||||||
AT&T Operating Income
|
6,403
|
6,408
|
20,590
|
20,099
|
||||||||||||
Interest expense
|
1,686
|
1,224
|
4,374
|
3,689
|
||||||||||||
Equity in net income (loss) of affiliates
|
11
|
16
|
(148
|
)
|
57
|
|||||||||||
Other income (expense) - net
|
246
|
(7
|
)
|
354
|
154
|
|||||||||||
Income Before Income Taxes
|
$
|
4,974
|
$
|
5,193
|
$
|
16,422
|
$
|
16,621
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Pension cost:
|
||||||||||||||||
Service cost – benefits earned during the period
|
$
|
282
|
$
|
278
|
$
|
846
|
$
|
834
|
||||||||
Interest cost on projected benefit obligation
|
484
|
495
|
1,452
|
1,485
|
||||||||||||
Expected return on assets
|
(783
|
)
|
(778
|
)
|
(2,350
|
)
|
(2,336
|
)
|
||||||||
Amortization of prior service credit
|
(31
|
)
|
(26
|
)
|
(93
|
)
|
(77
|
)
|
||||||||
Net pension (credit) cost
|
$
|
(48
|
)
|
$
|
(31
|
)
|
$
|
(145
|
)
|
$
|
(94
|
)
|
||||
Postretirement cost:
|
||||||||||||||||
Service cost – benefits earned during the period
|
$
|
32
|
$
|
48
|
$
|
107
|
$
|
144
|
||||||||
Interest cost on accumulated postretirement benefit obligation
|
193
|
243
|
617
|
729
|
||||||||||||
Expected return on assets
|
(81
|
)
|
(88
|
)
|
(240
|
)
|
(266
|
)
|
||||||||
Amortization of prior service credit
|
(382
|
)
|
(320
|
)
|
(1,084
|
)
|
(958
|
)
|
||||||||
Actuarial (gain) loss
|
-
|
-
|
(259
|
)
|
-
|
|||||||||||
Net postretirement (credit) cost
|
$
|
(238
|
)
|
$
|
(117
|
)
|
$
|
(859
|
)
|
$
|
(351
|
)
|
||||
Combined net pension and postretirement (credit) cost
|
$
|
(286
|
)
|
$
|
(148
|
)
|
$
|
(1,004
|
)
|
$
|
(445
|
)
|
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.
|
September 30, 2017
|
December 31, 2016
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Notes and debentures
1
|
$
|
162,450
|
$
|
171,025
|
$
|
122,381
|
$
|
128,726
|
||||||||
Bank borrowings
|
2
|
2
|
4
|
4
|
||||||||||||
Investment securities
|
2,565
|
2,565
|
2,587
|
2,587
|
||||||||||||
1
Includes credit agreement borrowings.
|
September 30, 2017
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Available-for-Sale Securities
|
||||||||||||||||
Domestic equities
|
$
|
1,274
|
$
|
-
|
$
|
-
|
$
|
1,274
|
||||||||
International equities
|
380
|
-
|
-
|
380
|
||||||||||||
Fixed income bonds
|
-
|
659
|
-
|
659
|
||||||||||||
Asset Derivatives
1
|
||||||||||||||||
Interest rate swaps
|
-
|
45
|
-
|
45
|
||||||||||||
Cross-currency swaps
|
-
|
967
|
-
|
967
|
||||||||||||
Liability Derivatives
1
|
||||||||||||||||
Interest rate swaps
|
-
|
(34
|
)
|
-
|
(34
|
)
|
||||||||||
Cross-currency swaps
|
-
|
(1,809
|
)
|
-
|
(1,809
|
)
|
||||||||||
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.
|
September 30,
|
December 31,
|
|||||||
2017
|
2016
|
|||||||
Interest rate swaps
|
$
|
10,775
|
$
|
9,650
|
||||
Cross-currency swaps
|
38,694
|
29,642
|
||||||
Total
|
$
|
49,469
|
$
|
39,292
|
|
Three months ended
|
Nine months ended
|
||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
Cash Flow Hedging Relationships
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Cross-currency swaps:
|
||||||||||||||||
Gain (Loss) recognized in accumulated OCI
|
$
|
429
|
$
|
686
|
$
|
(268
|
)
|
$
|
282
|
|||||||
Interest rate locks:
|
||||||||||||||||
Gain (Loss) recognized in accumulated OCI
|
79
|
-
|
-
|
-
|
||||||||||||
Interest income (expense) reclassified from
accumulated OCI into income
|
(15
|
)
|
(15
|
)
|
(44
|
)
|
(44
|
)
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Fair value of repurchased receivables
|
$
|
567
|
$
|
749
|
$
|
1,281
|
$
|
1,281
|
||||||||
Carrying value of deferred purchase price
|
507
|
722
|
1,147
|
1,261
|
||||||||||||
Gain (loss) on repurchases
1
|
$
|
60
|
$
|
27
|
$
|
134
|
$
|
20
|
||||||||
1
These gains (losses) are included in "Selling, general and administrative" in the consolidated statements of income.
|
2017
|
||||
Outstanding derecognized receivables at January 1,
|
$
|
7,232
|
||
Gross receivables sold
|
6,217
|
|||
Collections on cash purchase price
|
(3,556
|
)
|
||
Collections on deferred purchase price
|
(665
|
)
|
||
Trade ins and other
|
(295
|
)
|
||
Fair value of repurchased receivables
|
(1,281
|
)
|
||
Outstanding derecognized receivables at September 30,
|
$
|
7,652
|
Third Quarter
|
Nine-Month Period
|
|||||||||||||||||||||||
Percent
|
Percent
|
|||||||||||||||||||||||
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
|||||||||||||||||||
Operating Revenues
|
||||||||||||||||||||||||
Service
|
$
|
36,378
|
$
|
37,272
|
(2.4
|
)%
|
$
|
109,372
|
$
|
111,515
|
(1.9
|
)%
|
||||||||||||
Equipment
|
3,290
|
3,618
|
(9.1
|
)
|
9,498
|
10,430
|
(8.9
|
)
|
||||||||||||||||
Total Operating Revenues
|
39,668
|
40,890
|
(3.0
|
)
|
118,870
|
121,945
|
(2.5
|
)
|
||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
Cost of services and sales
|
||||||||||||||||||||||||
Equipment
|
4,191
|
4,455
|
(5.9
|
)
|
12,177
|
13,090
|
(7.0
|
)
|
||||||||||||||||
Broadcast, programming and
operations
|
5,284
|
4,909
|
7.6
|
15,156
|
14,239
|
6.4
|
||||||||||||||||||
Other cost of services
|
9,431
|
9,526
|
(1.0
|
)
|
27,714
|
28,436
|
(2.5
|
)
|
||||||||||||||||
Selling, general and administrative
|
8,317
|
9,013
|
(7.7
|
)
|
24,917
|
26,363
|
(5.5
|
)
|
||||||||||||||||
Depreciation and amortization
|
6,042
|
6,579
|
(8.2
|
)
|
18,316
|
19,718
|
(7.1
|
)
|
||||||||||||||||
Total Operating Expenses
|
33,265
|
34,482
|
(3.5
|
)
|
98,280
|
101,846
|
(3.5
|
)
|
||||||||||||||||
Operating Income
|
6,403
|
6,408
|
(0.1
|
)
|
20,590
|
20,099
|
2.4
|
|||||||||||||||||
Income Before Income Taxes
|
4,974
|
5,193
|
(4.2
|
)
|
16,422
|
16,621
|
(1.2
|
)
|
||||||||||||||||
Net Income
|
3,123
|
3,418
|
(8.6
|
)
|
10,711
|
10,818
|
(1.0
|
)
|
||||||||||||||||
Net Income Attributable to AT&T
|
$
|
3,029
|
$
|
3,328
|
(9.0
|
)%
|
$
|
10,413
|
$
|
10,539
|
(1.2
|
)%
|
Selected Financial and Operating Data
|
||||||||
September 30,
|
||||||||
Subscribers and connections in (000s)
|
2017
|
2016
|
||||||
Domestic wireless subscribers
|
138,826
|
133,338
|
||||||
Mexican wireless subscribers
|
13,779
|
10,698
|
||||||
North American wireless subscribers
|
152,605
|
144,036
|
||||||
North American branded subscribers
|
106,098
|
100,821
|
||||||
North American branded net additions
|
2,782
|
3,881
|
||||||
Domestic satellite and over-the-top video subscribers
|
21,392
|
20,777
|
||||||
AT&T U-verse® (U-verse) video subscribers
|
3,718
|
4,544
|
||||||
Latin America satellite video subscribers
1
|
13,490
|
12,476
|
||||||
Total video subscribers
|
38,600
|
37,797
|
||||||
Total domestic broadband connections
|
15,715
|
15,618
|
||||||
Network access lines in service
|
12,249
|
14,603
|
||||||
U-verse VoIP connections
|
5,774
|
5,707
|
||||||
Debt ratio
2
|
56.4
|
%
|
50.1
|
%
|
||||
Net debt ratio
3
|
39.7
|
%
|
47.8
|
%
|
||||
Ratio of earnings to fixed charges
4
|
3.55
|
3.91
|
||||||
Number of AT&T employees
|
256,800
|
273,140
|
Business Solutions
|
||||||||||||||||||||||||
Segment Results
|
||||||||||||||||||||||||
Third Quarter
|
Nine-Month Period
|
|||||||||||||||||||||||
2017
|
2016
|
Percent
Change
|
2017
|
2016
|
Percent
Change
|
|||||||||||||||||||
Segment operating revenues
|
||||||||||||||||||||||||
Wireless service
|
$
|
8,034
|
$
|
8,050
|
(0.2
|
)%
|
$
|
23,969
|
$
|
23,868
|
0.4
|
%
|
||||||||||||
Fixed strategic services
|
3,087
|
2,913
|
6.0
|
9,089
|
8,469
|
7.3
|
||||||||||||||||||
Legacy voice and data services
|
3,434
|
4,042
|
(15.0
|
)
|
10,572
|
12,577
|
(15.9
|
)
|
||||||||||||||||
Other service and equipment
|
852
|
886
|
(3.8
|
)
|
2,513
|
2,619
|
(4.0
|
)
|
||||||||||||||||
Wireless equipment
|
1,654
|
1,876
|
(11.8
|
)
|
4,873
|
5,422
|
(10.1
|
)
|
||||||||||||||||
Total Segment Operating Revenues
|
17,061
|
17,767
|
(4.0
|
)
|
51,016
|
52,955
|
(3.7
|
)
|
||||||||||||||||
Segment operating expenses
|
||||||||||||||||||||||||
Operations and support
|
10,233
|
10,925
|
(6.3
|
)
|
30,722
|
32,584
|
(5.7
|
)
|
||||||||||||||||
Depreciation and amortization
|
2,325
|
2,539
|
(8.4
|
)
|
6,972
|
7,568
|
(7.9
|
)
|
||||||||||||||||
Total Segment Operating Expenses
|
12,558
|
13,464
|
(6.7
|
)
|
37,694
|
40,152
|
(6.1
|
)
|
||||||||||||||||
Segment Operating Income
|
4,503
|
4,303
|
4.6
|
13,322
|
12,803
|
4.1
|
||||||||||||||||||
Equity in Net Income of Affiliates
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Segment Contribution
|
$
|
4,503
|
$
|
4,303
|
4.6
|
%
|
$
|
13,322
|
$
|
12,803
|
4.1
|
%
|
September 30,
|
Percent
|
|||||||||||
(in 000s)
|
2017
|
2016
|
Change
|
|||||||||
Business Wireless Subscribers
|
||||||||||||
Postpaid/Branded
|
51,412
|
50,014
|
2.8
|
%
|
||||||||
Reseller
|
77
|
58
|
32.8
|
|||||||||
Connected devices
1
|
35,909
|
29,355
|
22.3
|
|||||||||
Total Business Wireless Subscribers
|
87,398
|
79,427
|
10.0
|
|||||||||
Business IP Broadband Connections
|
1,017
|
963
|
5.6
|
%
|
||||||||
1
Includes data-centric devices such as session-based tablets, monitoring devices and primarily wholesale automobile systems.
Excludes postpaid tablets
.
|
Entertainment Group
|
||||||||||||||||||||||||
Segment Results
|
||||||||||||||||||||||||
Third Quarter
|
Nine-Month Period
|
|||||||||||||||||||||||
2017
|
2016
|
Percent
Change
|
2017
|
2016
|
Percent
Change
|
|||||||||||||||||||
Segment operating revenues
|
||||||||||||||||||||||||
Video entertainment
|
$
|
9,200
|
$
|
9,026
|
1.9
|
%
|
$
|
27,373
|
$
|
26,893
|
1.8
|
%
|
||||||||||||
High-speed internet
|
1,916
|
1,892
|
1.3
|
5,784
|
5,562
|
4.0
|
||||||||||||||||||
Legacy voice and data services
|
949
|
1,168
|
(18.8
|
)
|
3,010
|
3,725
|
(19.2
|
)
|
||||||||||||||||
Other service and equipment
|
583
|
634
|
(8.0
|
)
|
1,786
|
1,909
|
(6.4
|
)
|
||||||||||||||||
Total Segment Operating Revenues
|
12,648
|
12,720
|
(0.6
|
)
|
37,953
|
38,089
|
(0.4
|
)
|
||||||||||||||||
Segment operating expenses
|
||||||||||||||||||||||||
Operations and support
|
9,953
|
9,728
|
2.3
|
29,112
|
28,875
|
0.8
|
||||||||||||||||||
Depreciation and amortization
|
1,379
|
1,504
|
(8.3
|
)
|
4,256
|
4,481
|
(5.0
|
)
|
||||||||||||||||
Total Segment Operating Expenses
|
11,332
|
11,232
|
0.9
|
33,368
|
33,356
|
-
|
||||||||||||||||||
Segment Operating Income
|
1,316
|
1,488
|
(11.6
|
)
|
4,585
|
4,733
|
(3.1
|
)
|
||||||||||||||||
Equity in Net Income (Loss) of Affiliates
|
(6
|
)
|
-
|
-
|
(23
|
)
|
1
|
-
|
||||||||||||||||
Segment Contribution
|
$
|
1,310
|
$
|
1,488
|
(12.0
|
)%
|
$
|
4,562
|
$
|
4,734
|
(3.6
|
)%
|
Third Quarter
|
Nine-Month Period
|
|||||||||||||||||||||||
Percent
|
Percent
|
|||||||||||||||||||||||
(in 000s)
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
||||||||||||||||||
Video Net Additions
|
||||||||||||||||||||||||
Satellite
1
|
(251
|
)
|
323
|
-
|
%
|
(407
|
)
|
993
|
-
|
%
|
||||||||||||||
U-verse
1
|
(134
|
)
|
(326
|
)
|
58.9
|
(562
|
)
|
(1,099
|
)
|
48.9
|
||||||||||||||
DIRECTV NOW
2
|
296
|
-
|
-
|
520
|
-
|
-
|
||||||||||||||||||
Net Video Additions
|
(89
|
)
|
(3
|
)
|
-
|
(449
|
)
|
(106
|
)
|
-
|
||||||||||||||
Broadband Net Additions
|
||||||||||||||||||||||||
IP
|
125
|
156
|
(19.9
|
)
|
479
|
396
|
21.0
|
|||||||||||||||||
DSL
|
(96
|
)
|
(161
|
)
|
40.4
|
(327
|
)
|
(506
|
)
|
35.4
|
||||||||||||||
Net Broadband Additions
|
29
|
(5
|
)
|
-
|
%
|
152
|
(110
|
)
|
-
|
%
|
||||||||||||||
1
Includes disconnections for customers that migrated to DIRECTV NOW.
|
||||||||||||||||||||||||
2
Consistent with industry practice, DIRECTV NOW includes over-the-top connections that are on a free-trial.
|
Consumer Mobility
|
||||||||||||||||||||||||
Segment Results
|
||||||||||||||||||||||||
Third Quarter
|
Nine-Month Period
|
|||||||||||||||||||||||
2017
|
2016
|
Percent
Change
|
2017
|
2016
|
Percent
Change
|
|||||||||||||||||||
Segment operating revenues
|
||||||||||||||||||||||||
Service
|
$
|
6,507
|
$
|
6,914
|
(5.9
|
)%
|
$
|
19,644
|
$
|
20,805
|
(5.6
|
)%
|
||||||||||||
Equipment
|
1,241
|
1,353
|
(8.3
|
)
|
3,635
|
3,976
|
(8.6
|
)
|
||||||||||||||||
Total Segment Operating Revenues
|
7,748
|
8,267
|
(6.3
|
)
|
23,279
|
24,781
|
(6.1
|
)
|
||||||||||||||||
Segment operating expenses
|
||||||||||||||||||||||||
Operations and support
|
4,551
|
4,751
|
(4.2
|
)
|
13,599
|
14,343
|
(5.2
|
)
|
||||||||||||||||
Depreciation and amortization
|
877
|
944
|
(7.1
|
)
|
2,621
|
2,798
|
(6.3
|
)
|
||||||||||||||||
Total Segment Operating Expenses
|
5,428
|
5,695
|
(4.7
|
)
|
16,220
|
17,141
|
(5.4
|
)
|
||||||||||||||||
Segment Operating Income
|
2,320
|
2,572
|
(9.8
|
)
|
7,059
|
7,640
|
(7.6
|
)
|
||||||||||||||||
Equity in Net Income of Affiliates
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Segment Contribution
|
$
|
2,320
|
$
|
2,572
|
(9.8
|
)%
|
$
|
7,059
|
$
|
7,640
|
(7.6
|
)%
|
The following tables highlight other key measures of performance for the Consumer Mobility segment:
|
||||||||||||
September 30,
|
Percent
|
|||||||||||
(in 000s)
|
2017
|
2016
|
Change
|
|||||||||
Consumer Mobility Subscribers
|
||||||||||||
Postpaid
|
26,003
|
27,374
|
(5.0
|
)%
|
||||||||
Prepaid
2
|
15,136
|
13,035
|
16.1
|
|||||||||
Branded
|
41,139
|
40,409
|
1.8
|
|||||||||
Reseller
|
9,800
|
12,566
|
(22.0
|
)
|
||||||||
Connected devices
1, 2
|
489
|
936
|
(47.8
|
)
|
||||||||
Total Consumer Mobility Subscribers
|
51,428
|
53,911
|
(4.6
|
)%
|
||||||||
1
Includes data-centric devices such as session-based tablets, monitoring devices and postpaid automobile systems. Excludes
|
||||||||||||
postpaid tablets. See (2) below.
|
||||||||||||
2
Beginning in July 2017, we are reporting prepaid IoT connections, which primarily consist of "connected" cars, as a component of
|
||||||||||||
prepaid subscribers. The prepaid subscriber base at September 30, 2017 now includes approximately 543 subscribers that
|
||||||||||||
were formerly included in connected devices.
|
International
|
||||||||||||||||||||||||
Segment Results
|
||||||||||||||||||||||||
Third Quarter
|
Nine-Month Period
|
|||||||||||||||||||||||
2017
|
2016
|
Percent
Change
|
2017
|
2016
|
Percent
Change
|
|||||||||||||||||||
Segment operating revenues
|
||||||||||||||||||||||||
Video entertainment
|
$
|
1,363
|
$
|
1,297
|
5.1
|
%
|
$
|
4,065
|
$
|
3,649
|
11.4
|
%
|
||||||||||||
Wireless service
|
536
|
484
|
10.7
|
1,546
|
1,428
|
8.3
|
||||||||||||||||||
Wireless equipment
|
200
|
98
|
-
|
443
|
297
|
49.2
|
||||||||||||||||||
Total Segment Operating Revenues
|
2,099
|
1,879
|
11.7
|
6,054
|
5,374
|
12.7
|
||||||||||||||||||
Segment operating expenses
|
||||||||||||||||||||||||
Operations and support
|
1,937
|
1,640
|
18.1
|
5,468
|
4,951
|
10.4
|
||||||||||||||||||
Depreciation and amortization
|
304
|
293
|
3.8
|
905
|
868
|
4.3
|
||||||||||||||||||
Total Segment Operating Expenses
|
2,241
|
1,933
|
15.9
|
6,373
|
5,819
|
9.5
|
||||||||||||||||||
Segment Operating Income (Loss)
|
(142
|
)
|
(54
|
)
|
-
|
(319
|
)
|
(445
|
)
|
28.3
|
||||||||||||||
Equity in Net Income (Loss)
of Affiliates
|
17
|
1
|
-
|
62
|
24
|
-
|
||||||||||||||||||
Segment Contribution
|
$
|
(125
|
)
|
$
|
(53
|
)
|
-
|
%
|
$
|
(257
|
)
|
$
|
(421
|
)
|
39.0
|
%
|
September 30,
|
Percent
|
|||||||||||
(in 000s)
|
2017
|
2016
|
Change
|
|||||||||
Mexican Wireless Subscribers
|
||||||||||||
Postpaid
|
5,316
|
4,733
|
12.3
|
%
|
||||||||
Prepaid
|
8,231
|
5,665
|
45.3
|
|||||||||
Branded
|
13,547
|
10,398
|
30.3
|
|||||||||
Reseller
|
232
|
300
|
(22.7
|
)
|
||||||||
Total Mexican Wireless Subscribers
|
13,779
|
10,698
|
28.8
|
|||||||||
Latin America Satellite Subscribers
|
||||||||||||
PanAmericana
|
8,201
|
7,139
|
14.9
|
|||||||||
SKY Brazil
1
|
5,289
|
5,337
|
(0.9
|
)
|
||||||||
Total Latin America Satellite Subscribers
|
13,490
|
12,476
|
8.1
|
%
|
||||||||
1
Excludes subscribers of our International segment equity investments in SKY Mexico, in which we own a 41.3% stake. SKY Mexico
|
||||||||||||
had 8.0 million subscribers at June 30, 2017 and 7.9 million subscribers at September 30, 2016.
|
AT&T Mobility Results
|
||||||||||||||||||||||||
Third Quarter
|
Nine-Month Period
|
|||||||||||||||||||||||
2017
|
2016
|
Percent Change
|
2017
|
2016
|
Percent Change
|
|||||||||||||||||||
Operating revenues
|
||||||||||||||||||||||||
Service
|
$
|
14,541
|
$
|
14,964
|
(2.8
|
)%
|
$
|
43,613
|
$
|
44,673
|
(2.4
|
)%
|
||||||||||||
Equipment
|
2,895
|
3,229
|
(10.3
|
)
|
8,508
|
9,398
|
(9.5
|
)
|
||||||||||||||||
Total Operating Revenues
|
17,436
|
18,193
|
(4.2
|
)
|
52,121
|
54,071
|
(3.6
|
)
|
||||||||||||||||
Operating expenses
|
||||||||||||||||||||||||
Operations and support
|
10,113
|
10,697
|
(5.5
|
)
|
30,308
|
31,822
|
(4.8
|
)
|
||||||||||||||||
EBITDA
|
7,323
|
7,496
|
(2.3
|
)
|
21,813
|
22,249
|
(2.0
|
)
|
||||||||||||||||
Depreciation and amortization
|
2,010
|
2,107
|
(4.6
|
)
|
5,999
|
6,244
|
(3.9
|
)
|
||||||||||||||||
Total Operating Expenses
|
12,123
|
12,804
|
(5.3
|
)
|
36,307
|
38,066
|
(4.6
|
)
|
||||||||||||||||
Operating Income
|
$
|
5,313
|
$
|
5,389
|
(1.4
|
)%
|
$
|
15,814
|
$
|
16,005
|
(1.2
|
)%
|
Third Quarter
|
Nine-Month Period
|
|||||||||||||||||||||||
Percent
|
Percent
|
|||||||||||||||||||||||
(in 000s)
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
||||||||||||||||||
Wireless Net Additions
1, 4
|
||||||||||||||||||||||||
Postpaid
|
117
|
212
|
(44.8
|
)%
|
53
|
598
|
(91.1
|
)%
|
||||||||||||||||
Prepaid
5
|
324
|
304
|
6.6
|
873
|
1,169
|
(25.3
|
)
|
|||||||||||||||||
Branded Net Additions
|
441
|
516
|
(14.5
|
)
|
926
|
1,767
|
(47.6
|
)
|
||||||||||||||||
Reseller
|
(392
|
)
|
(315
|
)
|
(24.4
|
)
|
(1,342
|
)
|
(1,174
|
)
|
(14.3
|
)
|
||||||||||||
Connected devices
2, 5
|
2,274
|
1,331
|
70.8
|
7,102
|
4,081
|
74.0
|
||||||||||||||||||
Wireless Net Subscriber Additions
|
2,323
|
1,532
|
51.6
|
6,686
|
4,674
|
43.0
|
||||||||||||||||||
Smartphones sold under our installment
programs during period
|
3,491
|
4,283
|
(18.5
|
)%
|
10,575
|
12,378
|
(14.6
|
)%
|
||||||||||||||||
Total Churn
3, 4
|
1.32
|
%
|
1.45
|
%
|
(13) BP
|
1.35
|
%
|
1.41
|
%
|
(6) BP
|
||||||||||||||
Branded Churn
3, 4
|
1.70
|
%
|
1.63
|
%
|
7 BP
|
1.66
|
%
|
1.57
|
%
|
9 BP
|
||||||||||||||
Postpaid Churn
3, 4
|
1.07
|
%
|
1.05
|
%
|
2 BP
|
1.07
|
%
|
1.04
|
%
|
3 BP
|
||||||||||||||
Postpaid Phone Only Churn
3, 4
|
0.84
|
%
|
0.90
|
%
|
(6) BP
|
0.84
|
%
|
0.90
|
%
|
(6) BP
|
||||||||||||||
1
Excludes acquisition-related additions during the period.
|
||||||||||||||||||||||||
2
Includes data-centric devices such as session-based tablets, monitoring devices and primarily wholesale automobile systems. Excludes
|
||||||||||||||||||||||||
postpaid tablets. See (5) below.
|
||||||||||||||||||||||||
3
Calculated by dividing the aggregate number of wireless subscribers who canceled service during a month divided by the total number
|
||||||||||||||||||||||||
of wireless subscribers at the beginning of that month. The churn rate for the period is equal to the average of the churn rate for each month of that period.
|
||||||||||||||||||||||||
4
2017 excludes the impact of the 2G shutdown and a true-up to the reseller subscriber base, which were reflected in beginning of period subscribers.
|
||||||||||||||||||||||||
5
Beginning in July 2017, we are reporting prepaid IoT connections, which primarily consist of "connected" cars, as a component
|
||||||||||||||||||||||||
of prepaid subscribers, resulting in 97 additional prepaid net adds in the quarter. Had we restated our prior periods, prepaid
|
||||||||||||||||||||||||
net adds for the comparable periods would have been 381 in the third quarter of 2016, and 1,060 and 1,324 for the first nine months of,
|
||||||||||||||||||||||||
2017 and 2016, respectively.
|
·
|
Approximately 20,000 mobility employees across the country are covered by a contract that expired in early 2017. We continue to negotiate with labor representatives. On October 30, 2017, we presented a contract that provides for, among other things, compounded annual wage increases totaling nearly 10% over the term of the contract and continued health care coverage. The contract is subject to acceptance and ratification.
|
·
|
Approximately 15,000 traditional wireline employees in our West region are covered by a contract that expired in April 2016. In August, these employees, along with 2,300 legacy DIRECTV non-management employees, ratified a new four-year contract that will expire in April 2020.
|
·
|
Submitted winning bids for 251 Advanced Wireless Services (AWS) spectrum licenses for a near-nationwide contiguous block of high-quality spectrum in the AWS-3 Auction.
|
·
|
Redeployed spectrum previously used for basic 2G services to support more advanced mobile internet services on our 3G and 4G networks.
|
·
|
Secured the FirstNet contract, which provides us with access to a nationwide low band 20 MHz of spectrum, assuming all states opt-in.
|
·
|
Invested in 5G and millimeter-wave technologies with our in-process acquisition of Fiber-Tower Corporation, which holds significant amounts of spectrum in the millimeter wave bands (28 GHz and 39 GHz) that the FCC recently reallocated for mobile broadband services. These bands will help to accelerate our entry into 5G services.
|
·
|
February issuance of $1,250 of 3.200% global notes due 2022.
|
·
|
February issuance of $750 of 3.800% global notes due 2024.
|
·
|
February issuance of $2,000 of 4.250% global notes due 2027.
|
·
|
February issuance of $3,000 of 5.250% global notes due 2037.
|
·
|
February issuance of $2,000 of 5.450% global notes due 2047.
|
·
|
February issuance of $1,000 of 5.700% global notes due 2057.
|
·
|
March issuance of $1,430 of 5.500% global notes due 2047.
|
·
|
March issuance of $800 floating rate global notes due 2020. The floating rate for the notes is based upon the three-month London Interbank Offered Rate (LIBOR), reset quarterly, plus 65 basis points.
|
·
|
March draw of $300 on a private financing agreement with Banco Nacional de Mexico, S.A. due March 2019. The agreement contains terms similar to that provided under our syndicated credit arrangements; the interest rate is a market rate.
|
·
|
May issuance of $1,500 floating rate global notes due 2021. The floating rate for the notes is based upon the three-month LIBOR, reset quarterly, plus 95 basis points.
|
·
|
May issuance of CAD$600 of 2.850% global notes due 2024 and CAD$750 of 4.850% global notes due 2047 (together, equivalent to $994, when issued).
|
·
|
June issuance of £1,000 of 3.550% global notes due 2037, subject to mandatory redemption (equivalent to $1,282 when issued).
|
·
|
June issuance of €750 of 1.050% global notes due 2023, €1,750 of 1.800% global notes due 2026, €1,500 of 2.350% global notes due 2029, €1,750 of 3.150% global notes due 2036 and €1,250 of floating rate global notes due 2023. All except the 2036 global notes are subject to mandatory redemption (together, equivalent to $7,883, when issued).
|
·
|
August issuance of $750 of floating rate notes due 2023,
$1,750 of 2.85% global notes due 2023, $3,000 of 3.40% global notes due 2024, $5,000 of 3.90% global notes due 2027, $4,500 of 4.90% global notes due 2037, $5,000 of 5.15% global notes due 2050 and $2,500 of 5.30% global notes due 2058. All are subject to mandatory redemption.
|
·
|
$1,142 of 2.400% global notes due 2017.
|
·
|
$1,000 of 1.600% global notes due 2017.
|
·
|
$500 of floating rate notes due 2017.
|
·
|
£750 of 5.875% global notes due 2017.
|
·
|
$750 repayment of a private financing agreement with Export Development Canada due 2017.
|
·
|
$1,150 of 1.700% global notes due 2017.
|
·
|
$4,155 repayment of amounts outstanding under our syndicated credit agreement.
|
·
|
$1,000 of annual put reset securities issued by BellSouth that may be put back to us each April until maturity in 2021.
|
·
|
An accreting zero-coupon note that may be redeemed each May until maturity in 2022. In May 2017, $1 was redeemed by the holder for $1. If the remainder of the zero-coupon note (issued for principal of $500 in 2007) is held to maturity, the redemption amount will be $1,029.
|
Three Months Ended
|
||||||||||||||||||||||||||||||||
September 30, 2017
|
September 30, 2016
|
|||||||||||||||||||||||||||||||
Consumer Mobility
|
Business Solutions
|
Adjustments
1
|
AT&T Mobility
|
Consumer Mobility
|
Business Solutions
|
Adjustments
1
|
AT&T Mobility
|
|||||||||||||||||||||||||
Operating Revenues
|
||||||||||||||||||||||||||||||||
Wireless service
|
$
|
6,507
|
$
|
8,034
|
$
|
-
|
$
|
14,541
|
$
|
6,914
|
$
|
8,050
|
$
|
-
|
$
|
14,964
|
||||||||||||||||
Fixed strategic services
|
-
|
3,087
|
(3,087
|
)
|
-
|
-
|
2,913
|
(2,913
|
)
|
-
|
||||||||||||||||||||||
Legacy voice and data services
|
-
|
3,434
|
(3,434
|
)
|
-
|
-
|
4,042
|
(4,042
|
)
|
-
|
||||||||||||||||||||||
Other service and equipment
|
-
|
852
|
(852
|
)
|
-
|
-
|
886
|
(886
|
)
|
-
|
||||||||||||||||||||||
Wireless equipment
|
1,241
|
1,654
|
-
|
2,895
|
1,353
|
1,876
|
-
|
3,229
|
||||||||||||||||||||||||
Total Operating Revenues
|
7,748
|
17,061
|
(7,373
|
)
|
17,436
|
8,267
|
17,767
|
(7,841
|
)
|
18,193
|
||||||||||||||||||||||
Operating Expenses
|
||||||||||||||||||||||||||||||||
Operations and support
|
4,551
|
10,233
|
(4,671
|
)
|
10,113
|
4,751
|
10,925
|
(4,979
|
)
|
10,697
|
||||||||||||||||||||||
EBITDA
|
3,197
|
6,828
|
(2,702
|
)
|
7,323
|
3,516
|
6,842
|
(2,862
|
)
|
7,496
|
||||||||||||||||||||||
Depreciation and amortization
|
877
|
2,325
|
(1,192
|
)
|
2,010
|
944
|
2,539
|
(1,376
|
)
|
2,107
|
||||||||||||||||||||||
Total Operating Expense
|
5,428
|
12,558
|
(5,863
|
)
|
12,123
|
5,695
|
13,464
|
(6,355
|
)
|
12,804
|
||||||||||||||||||||||
Operating Income
|
$
|
2,320
|
$
|
4,503
|
$
|
(1,510
|
)
|
$
|
5,313
|
$
|
2,572
|
$
|
4,303
|
$
|
(1,486
|
)
|
$
|
5,389
|
||||||||||||||
1
Non-wireless (fixed) operations reported in Business Solutions segment.
|
Nine Months Ended
|
||||||||||||||||||||||||||||||||
September 30, 2017
|
September 30, 2016
|
|||||||||||||||||||||||||||||||
Consumer Mobility
|
Business Solutions
|
Adjustments
1
|
AT&T Mobility
|
Consumer Mobility
|
Business Solutions
|
Adjustments
1
|
AT&T Mobility
|
|||||||||||||||||||||||||
Operating Revenues
|
||||||||||||||||||||||||||||||||
Wireless service
|
$
|
19,644
|
$
|
23,969
|
$
|
-
|
$
|
43,613
|
$
|
20,805
|
$
|
23,868
|
$
|
-
|
$
|
44,673
|
||||||||||||||||
Fixed strategic services
|
-
|
9,089
|
(9,089
|
)
|
-
|
-
|
8,469
|
(8,469
|
)
|
-
|
||||||||||||||||||||||
Legacy voice and data services
|
-
|
10,572
|
(10,572
|
)
|
-
|
-
|
12,577
|
(12,577
|
)
|
-
|
||||||||||||||||||||||
Other service and equipment
|
-
|
2,513
|
(2,513
|
)
|
-
|
-
|
2,619
|
(2,619
|
)
|
-
|
||||||||||||||||||||||
Wireless equipment
|
3,635
|
4,873
|
-
|
8,508
|
3,976
|
5,422
|
-
|
9,398
|
||||||||||||||||||||||||
Total Operating Revenues
|
23,279
|
51,016
|
(22,174
|
)
|
52,121
|
24,781
|
52,955
|
(23,665
|
)
|
54,071
|
||||||||||||||||||||||
Operating Expenses
|
||||||||||||||||||||||||||||||||
Operations and support
|
13,599
|
30,722
|
(14,013
|
)
|
30,308
|
14,343
|
32,584
|
(15,105
|
)
|
31,822
|
||||||||||||||||||||||
EBITDA
|
9,680
|
20,294
|
(8,161
|
)
|
21,813
|
10,438
|
20,371
|
(8,560
|
)
|
22,249
|
||||||||||||||||||||||
Depreciation and amortization
|
2,621
|
6,972
|
(3,594
|
)
|
5,999
|
2,798
|
7,568
|
(4,122
|
)
|
6,244
|
||||||||||||||||||||||
Total Operating Expense
|
16,220
|
37,694
|
(17,607
|
)
|
36,307
|
17,141
|
40,152
|
(19,227
|
)
|
38,066
|
||||||||||||||||||||||
Operating Income
|
$
|
7,059
|
$
|
13,322
|
$
|
(4,567
|
)
|
$
|
15,814
|
$
|
7,640
|
$
|
12,803
|
$
|
(4,438
|
)
|
$
|
16,005
|
||||||||||||||
1
Non-wireless (fixed) operations reported in Business Solutions segment.
|
·
|
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 or repeal of healthcare legislation, regulations or related court decisions.
|
·
|
The final outcome of FCC and other federal, state or foreign government agency proceedings (including judicial review, if any, of such proceedings) involving issues that are important to our business, including, without limitation, special access and business data services; 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; wireless equipment siting regulations; E911 services; competition policy; privacy; net neutrality, including the FCC's order classifying broadband as Title II services subject to much more comprehensive regulation; unbundled network elements and other wholesale obligations; multi-channel video programming distributor services and equipment; availability of new spectrum, 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), subscriber reluctance to purchase new wireless handsets, and our ability to maintain capital expenditures.
|
·
|
The extent of competition including from governmental networks and other providers and the resulting pressure on customer 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 non-regulation of comparable alternative technologies (e.g., VoIP).
|
·
|
The continued development and delivery of attractive and profitable video and broadband offerings; the extent to which regulatory and build-out requirements apply to our offerings; our ability to match speeds offered by our competitors 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 video, 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 video and data services, including network quality and acquisition of adequate spectrum at reasonable costs and terms.
|
·
|
The outcome of pending, threatened or potential litigation (which includes arbitrations), 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 close our pending acquisition of Time Warner Inc. and successfully reorganize our operations, including the ability to manage various businesses in widely dispersed business locations and with decentralized management.
|
·
|
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, including foreign exchange fluctuations as well as regulatory and political uncertainty.
|
·
|
Changes in our corporate strategies, such as changing network-related 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.
|
·
|
The uncertainty and impact of anticipated regulatory and corporate tax reform, which may impact the overall economy and incentives for business investments.
|
November 3, 2017
|
|
|
AT&T Inc.
/s/ John J. Stephens
John J. Stephens
Senior Executive Vice President
and Chief Financial Officer
|
1.
|
The proration shall not apply to the performance shares granted after the date of this resolution to Mr. Donovan if he remains employed through December 30, 2020;
|
2.
|
In addition, the existing and future performance shares granted to Mr. Donovan shall not be prorated:
|
(a) |
if Mr. Donovan reports to an officer or employee of the Company or any of its affiliates other than the Chief Executive Officer of AT&T Inc.; or
|
(b) |
if the Company creates a higher-level position (e.g., Vice Chairman or Chief Operating Officer of AT&T Inc.) and Mr. Donovan is not placed in that role or an equivalent role; and
|
1.
|
The proration shall not apply to the performance shares granted after the date of this resolution to Mr. Stankey if he remains employed through December 30, 2020;
|
2.
|
In addition, the existing and future performance shares granted to Mr. Stankey shall not be prorated:
|
(a) |
if Mr. Stankey reports to an officer or employee of the Company or any of its affiliates other than the Chief Executive Officer of AT&T Inc.; or
|
(b) |
if the Company creates a higher-level position (e.g., Vice Chairman or Chief Operating Officer of AT&T Inc.) and Mr. Stankey is not placed in that role or an equivalent role; and
|
1.
|
The proration shall not apply to the performance shares granted after the date of this resolution to Mr. Stephens if he remains employed through December 30, 2020;
|
2.
|
In addition, the existing and future performance shares granted to Mr. Stephens shall not be prorated:
|
(a) |
if Mr. Stephens reports to an officer or employee of the Company or any of its affiliates other than the Chief Executive Officer of AT&T Inc.; or
|
(b) |
if the Company creates a higher-level position (e.g., Vice Chairman or Chief Operating Officer of AT&T Inc.) and Mr. Stephens is not placed in that role or an equivalent role; and
|
ARTICLE 1
|
PURPOSE ………………………………………………………………………………………………………………................................................................................................................................................................….
|
1
|
ARTICLE 2
|
DEFINITIONS………………………………………………………………………………………………………….....................................................................................................................................................................…
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1
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ARTICLE 3
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ELIGIBILITY ………………………………………………………………………………………………………….....................................................................................................................................................................…
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4
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ARTICLE 4
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BENEFITS …………………………………………………………………………………………………………….........................................................................................................................................................................
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5
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ARTICLE 5
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TERMINATION OF PARTICIPATION …………………………………………………………………..…................................................................................................................................................................................…..
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7
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ARTICLE 6
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DISABILITY ………………………………………………………………………………………………………….........................................................................................................................................................................
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9
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ARTICLE 7
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COSTS ………………………………………………………………………………………………………………….......................................................................................................................................................................
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9
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ARTICLE 8
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LOYALTY CONDITIONS ……………………………………………………………………………………….........................................................................................................................................................................…...
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10
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ARTICLE 9
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MISCELLANEOUS …………………………………………………………………………………………………….......................................................................................................................................................................
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13
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ARTICLE 10
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COBRA …………………………………………………………………………………………………………………......................................................................................................................................................................
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15
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ARTICLE 11
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PRIVACY OF MEDICAL INFORMATION …………………………………………………………………......................................................................................................................................................................................
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18
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ARTICLE 12
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CLAIM AND APPEAL PROCESS ………………………………………………………………………………................................................................................................................................................................................
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24
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2.1
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Active Participant
. "Active Participant" shall mean an Active Employee Participant and his Dependents.
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2.2
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Active Employee Participant
. "Active Employee Participant" shall mean an Eligible Employee electing to participate in the Plan while in active service, on a Leave of Absence or while receiving short term disability benefits under the Officer Disability Plan.
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2.3
|
Annual Deductible
. "Annual Deductible" shall mean the amount the Active Participant must pay for Covered Health Services in a Plan Year before the Plan will begin paying for Covered Benefits in that calendar year. The Annual Deductible applies to all Covered Health Services. The Annual Deductible does not apply to Preventive Care, Dental Services and Vision Services. Once the Participant meets his applicable Annual Deductible, the Plan will begin to pay Covered Benefits, subject to any required Coinsurance, in accordance with and as governed by Section 4.1. The applicable Annual Deductible is set forth in
Appendix A
to this Plan.
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2.4
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Annual Out-of-Pocket Maximum
.
"Annual Out-of-Pocket Maximum" shall mean the maximum amount of Covered Health Services an Active Participant must pay out-of-pocket every calendar year, including the Participant's Annual Deductible. Once the Participant reaches the applicable Annual Out-of-Pocket Maximum, Covered Benefits for those Covered Health Services that apply to the Annual Out-of-Pocket Maximum are payable in accordance with and as governed by Section 4.1 during the rest of that Plan Year. The following costs shall never apply toward the Annual Out-of-Pocket Maximum: (a) any applicable Monthly Contributions and (b) any charges for Non-Covered Health Services. Even when the Annual Out-of-Pocket Maximum has been reached, Covered Benefits will not be provided for the following: (a) any applicable Monthly Contributions and (b) any charges for Non-Covered Health Services. The applicable Annual Out-of-Pocket Maximum is set forth in
Appendix A
to this Plan.
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2.5
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AT&T
. "AT&T" shall mean AT&T Inc. References to "Company" shall mean AT&T.
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2.6
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Basic Plan(s)
. "Basic Plan(s)" shall mean AT&T's group dental (non-DHMO option), and vision care plans (including the AT&T Retiree Vision Care Program) or the "AT&T International Health Plan" for Officers serving in expatriate positions with the Company.
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|
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2.7
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CEO
. "CEO" shall mean the Chief Executive Officer of AT&T Inc.
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2.8
|
COBRA
.
"
COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
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2.9
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Coinsurance
.
"Coinsurance" shall mean the amount an Active Participant must pay each time he/she receives Covered Health Services, after he/she meets the applicable Annual Deductible. Coinsurance payments are calculated as a percentage of Covered Health Services, rather than a set dollar amount. Coinsurance does not apply to Preventive Care, Dental Services and Vision Services (or Medical Services for Retired Participants as provided in Section 4.1(c)). The applicable Coinsurance percentage is set forth in
Appendix A
to this Plan.
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2.10
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Committee
. "Committee" shall mean the Human Resources Committee of the Board of Directors of AT&T Inc.
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2.11
|
Covered Benefits
. "Covered Benefits" shall mean the benefits provided by the Plan, as provided for and governed by Section 4.1 of the Plan.
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2.12
|
Covered Health Services
. "Covered Health Services" means all Medical Services or Preventive Care that would qualify as deductible medical expenses for federal income tax purposes, whether deducted or not. Dental Services and Vision Services are not included in the definition of Covered Health Services.
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2.13
|
Dental Services
. "Dental Services" shall mean services for dental and orthodontic care. The Plan Administrator, in its sole discretion, shall determine whether a particular service is classified as Preventive Care or a Dental, Medical or Vision Service.
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2.14
|
Dependent(s)
. "Dependent(s)" shall mean those individuals who would qualify as a Participant's dependent(s) under the terms of the Basic Plan in which the Participant participates (or last previously participated with respect to Medicare Eligible Retired Participants (the "Prior Basic Plan"), or, if applicable, Substitute Basic Coverage.
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2.15
|
Disability
.
"Disability" shall mean qualification for long term disability benefits under Section 3.1 of the Officer Disability Plan.
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2.16
|
Eligible Employee
. "Eligible Employee" shall mean an Officer. Notwithstanding the foregoing, the CEO may, from time to time, exclude any Officer or group of Officers from being an "Eligible Employee" under this Plan. Employees of a company acquired by AT&T shall not be considered an Eligible Employee unless designated as such by the CEO. Notwithstanding the foregoing, only the Committee shall have the authority to exclude from participation or take any action with respect to Executive Officers.
Notwithstanding the foregoing provisions, individuals hired, rehired or promoted to an Officer level position on or after March 23, 2010 shall be excluded from the term Eligible Employee, and such individuals (and their Dependents) shall not be eligible to participate in this Plan. |
2.17
|
Employer
. "Employer" shall mean AT&T Inc. or any of its Subsidiaries.
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|
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2.18
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Executive Officer
. "Executive Officer" shall mean any executive officer of AT&T, as that term is used under the Securities Exchange Act of 1934.
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2.19
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Leave of Absence
. "Leave of Absence" shall mean a Company-approved leave of absence.
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2.20
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Medical Services
.
"Medical Services" shall mean medical/surgical, mental health/substance abuse and prescription pharmacy services. The Plan Administrator, in its sole discretion, shall determine whether a particular service is classified as Preventive Care or a Medical, Dental or Vision Service. Medical Services do not include Dental Services and Vision Services.
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2.21
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Monthly Contributions
.
"Monthly Contributions" shall mean the monthly premiums or contributions required for participation in this Plan as further governed by Article 7 of the Plan. The applicable Monthly Contributions are set forth in Exhibit A to this Plan.
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2.22
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Non-Covered Health Services
.
"Non-Covered Health Services" shall mean any Medical Services or Preventive Care which do not meet the definition of Covered Health Services.
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2.23
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Officer
. "Officer" shall mean an individual who is designated as an officer level employee for compensation purposes on the records of AT&T.
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2.24
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Participant
. "Participant" shall mean an Active Participant or Retired Participant or both, as the context indicates.
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2.25
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Plan Administrator
. "Plan Administrator" shall mean the SEVP-HR, or any other person or persons whom the Committee may appoint to administer the Plan; provided that the Committee may act as the Plan Administrator at any time.
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2.26
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Plan Year
.
"Plan Year" shall mean the calendar year.
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2.27
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Preventive Care
. "Preventive Care" generally focuses on evaluating a Participant's current health status when the Participant is symptom-free and taking the necessary steps to maintain the Participant's health. The Plan Administrator, in its sole discretion, shall determine whether a particular service constitutes Preventive Care.
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2.28
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Qualified Dependent
. "Qualified Dependent" shall mean
a Dependent who loses coverage under a COBRA eligible program due to a Qualifying Event.
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2.29
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Qualifying Event
.
"Qualifying Event" shall mean
any of the following events if, but for COBRA continuation coverage, they would result in a Participant's loss of coverage under this Plan:
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(1) |
death of a covered Eligible Employee;
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(2) |
termination (other than by reason of such Eligible Employee's gross misconduct) of an Employee's employment;
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(3) |
reduction in hours of an Eligible Employee;
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(4) |
divorce or legal separation of an Eligible Employee or dissolution of an Eligible Employee's registered domestic partnership;
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(5) |
an Eligible Employee's entitlement to Medicare benefits; or
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(6) |
a Dependent child ceasing to qualify as a Dependent under the Basic Plan, (or, if applicable, Substitute Basic Coverage)
or with respect to a Dependent child who is a Medicare Eligible Retired Participant, the child's ceasing to otherwise qualify under the Prior Basic Plan
.
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2.30
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Retire, Retired or Retirement
. "Retire," "Retired" or "Retirement" shall mean the termination of an Active Employee Participant's employment with AT&T or any of its Subsidiaries, for reasons other than death, on or after the earlier of the following dates: (1) the date such Active Employee Participant has attained age 55, and, for an Active Employee Participant on or after January 1, 2002, has five (5) years of service, or (2) the date the Active Employee Participant has attained one of the following combinations of age and service at termination of employment on or after April 1, 1997:
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Net Credit Services
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Age
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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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2.32
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Retired Employee Participant
.
"Retired Employee Participant" shall mean a former Active Employee Participant who has Retired within the meaning of Section 2.30 and who meets the additional requirements of Section 3.2 to be eligible for coverage in Retirement.
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2.34
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Subsidiary
.
"Subsidiary" shall mean any corporation, partnership, venture or other entity in which AT&T holds, directly or indirectly, a 50% or greater ownership interest. The Committee may, at its sole discretion, designate any other corporation, partnership, venture or other entity a Subsidiary for the purpose of participating in this Plan. Notwithstanding anything herein to the contrary, unless designated a "Subsidiary" pursuant to the immediately preceding sentence, Cingular Wireless LLC, Sterling Commerce, Inc., and their respective subsidiaries shall not be considered a Subsidiary under this Plan.
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2.35
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Vision Services
.
"Vision Services" shall mean services for vision care. The Plan Administrator, in its sole discretion, shall determine whether a particular service is classified as Preventive Care or a Vision, Medical or Dental Service.
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3.1
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Active Participants
.
Each Eligible Employee shall be eligible to participate in this Plan along with his/her Dependent(s) beginning on the effective date of the employee
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3.2
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Retired Participants
.
Provisions of this Plan will continue in effect during Retirement for each Retired Employee Participant and his/her Dependent(s) with respect to any Eligible Employee who became a Participant before January 1, 1999. Neither an Eligible Employee who became a Participant after December 31, 1998 nor his/her Dependent(s) shall be eligible for participation hereunder on or after such Participant's Retirement. Coverage for Retired Participants shall be subject to the payment of all applicable Monthly Contributions, as governed by Article 7. The provisions of this Plan related to Retired Participants, including the level of Covered Benefits and the applicable Monthly Premiums, shall begin to apply on the first day of the month following the month in which the Active Employee Participant Retires. If a Retired Employee Participant terminates participation at any time for any reason, participation of that Retired Employee participant and his/her Dependent(s) may not be reinstated for any reason.
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3.3
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Requirement to Enroll and Participate in Basic Plans and Medicare
.
Notwithstanding any provision in this plan to the contrary, as a condition to participation in the Plan, each Participant must be enrolled in, paying for, and participating in (i) the Basic Plans if such Participant is eligible for coverage under the terms of the Basic Plans, or, if applicable, Substitute Basic Coverage, and (ii) all parts of Medicare for which such Participant is eligible and for which Medicare would be primary if enrolled therein, except for Medicare Part D relating to prescription drug coverage.
Notwithstanding any other provision of the Plan to the contrary, an individual who first becomes an Eligible Employee in the middle of a Plan Year and who is enrolled in AT&T sponsored group health plans other than the Basic Plans, will be allowed to participate in the Plan for the remainder of the Plan Year along with his/her Dependent(s) who are enrolled in such other AT&T sponsored health plans, as if they were participating in the Basic Plans. At the next group enrollment opportunity for the Basic Plans, the Active Employee Participant and his/her Dependent(s) must enroll in the Basic Plans to continue participation in this Plan. |
4.1
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Covered Benefits
. Subject to the limitations in this
Plan (including but not limited to the loyalty conditions set forth in Article 8 below)
, this Plan provides the benefits described below. Monthly Contributions for participation in this Plan, the Basic Plans, Medicare, or any other health plan are not considered "services", and are therefore are not Covered Benefits under this Plan.
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(a)
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Active Participants (Medical Services and Preventive Care) -
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(b)
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Active Participants (Dental Services and Vision Services)
-
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(c)
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Retired Participants
–
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4.2
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Covered Benefit Limits
.
RESERVED
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4.3
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Priority of Paying Covered Claims
. Claims for benefits will be applied against the various health plans, as applicable, and coordinated with Medicare in the following order:
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(1) |
Medicare, to the extent the Participant is eligible therefore and such claim is actually paid by Medicare,
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(2) |
Basic Plans, if applicable,
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(3) |
CarePlus, if elected,
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(4) |
Long Term Care Plan, if elected,
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(5) |
this Plan.
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4.4
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Substitute Basic Coverage
. Notwithstanding any other provision of this Plan to the contrary, if a Retired Employee Participant, other than a Medicare Eligible Retired Participant, is eligible for participation under this Plan during Retirement, but not eligible to participate under the Basic Plans, the Plan shall provide medical, dental, and vision benefits for the Retired Employee Participant and his/her Dependent(s) substantially equivalent to the benefits under the Basic Plans through an insured product (hereinafter, "Substitute Basic Coverage"). Eligibility for Substitute Basic Coverage is conditioned upon the Retired Participant's payment of contributions in the same amount that a similarly situated retired Basic Plan participant is required to pay under the Basic Plans. Such Substitute Basic Coverage shall constitute such Retired Participant's Basic Plans for all purposes under this Plan. The costs of Substitute Basic Coverage (except for the required monthly contributions referenced in this paragraph) shall be borne by AT&T, and the costs of Substitute Basic Coverage shall not be included in the determination of any Retired Participant's annual Plan contribution amount as provided in Article 7. In addition, certain other Retired Employee Participants participate in the "Separation Medical Plan" rather than the Basic Plans. References to Substitute Basic Coverage
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5.1
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Termination of Participation
.
Participation will cease on the last day of the month in which one of the following conditions occurs:
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(1)
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The Participant, other than a Medicare Eligible Retired Participant, is no longer a participant in the Basic Plans or Substitute Basic Coverage, in which case participation ceases for such Participant;
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(2)
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A Participant ceases to meet the definition of a Dependent (as set forth in Section 2.14 of this Plan) for any reason, in which case participation ceases for such Participant;
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(3)
|
A Participant eligible to enroll in Medicare is no longer a participant in all parts of Medicare for which such Participant is eligible to enroll and for which Medicare would be primary if enrolled therein, except for Medicare Part D relating to prescription drug coverage, in which case participation ceases for such Participant;
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(4)
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The Active Employee Participant's termination of employment for reasons other than Death, Disability, or Retirement by an individual who meets the applicable requirements of Section 3.2 in order to qualify for Plan benefits in Retirement, in which case participation ceases for the Participant and his/her Dependent(s);
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(5)
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The demotion or designation of an Active Employee Participant so as to no longer be eligible to participate in the Plan, in which case participation ceases for the Participant and his/her Dependent(s);
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(6)
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The Active Employee Participant (or Retired Employee Participant) participates in an activity that constitutes engaging in competitive activity with AT&T or engaging in conduct disloyal to AT&T under Article 8, in which case participation ceases for the Active Employee Participant (or Retired Employee Participant) and his/her Dependent(s); or
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(7)
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Discontinuance of the Plan by AT&T, or, with respect to a Subsidiary's Active Employee Participants (or Retired Employee Participants), such Subsidiary's failure to make the benefits hereunder available to Active Employee Participants employed by it (or its Retired Employee Participants).
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5.2
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Dependents Failure to Participate in Basic Plans
. If a Dependent, other than a Medicare Eligible Retired Participant, ceases participation under a Basic Plan or, if applicable, Substitute Basic Coverage, such Dependent's participation under this Plan will cease with the same effective date.
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5.3
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Death
. In the event of the Active Employee Participant's (or Retired Employee's Participant's) death, his Dependents may continue participation in this Plan as follows:
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|
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(1) |
In the event of the death of a Retired Employee Participant such Retired Employee Participant's Dependents may continue participation in this Plan, eligible for the Covered Benefits described in Section 4.1(c) of the Plan, for so long as such Dependents are participating in the Basic Plans (or, if applicable, Substitute Basic Coverage) or with respect to a Dependent who is a Medicare Eligible Retired Participant, for so long as such Dependent would have otherwise been eligible for participation under the terms of the Prior Basic Plan and are paying any applicable contributions for this Plan as provided in Article 7. If a surviving spouse of such deceased Active Employee Participant otherwise eligible for participation in the Plan remarries, his/her participation and the participation of any otherwise eligible Dependents will cease with the effective date of his/ her marriage.
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(2) |
In the event of an in-service death of an Active Employee Participant eligible to participate in the Plan in Retirement as provided under Article 3.2, who was Retirement eligible, within the meaning of Section 2.30, at the time of death, such Active Employee Participant's surviving Dependents may continue participation in this Plan, eligible for the Covered Benefits described in Section 4.1(a) and (b), for so long as such Dependents are participating in the Basic Plans (or, if applicable Substitute Basic Coverage) or with respect to a Dependent who is a Medicare Eligible Retired Participant, for so long as such Dependent would have otherwise been eligible for participation under the terms of the Prior Basic Plan and are paying any applicable contributions for this Plan as provided in Article 7. If a surviving spouse of such deceased Active Employee Participant otherwise eligible for participation in the Plan remarries, his/her participation and the participation of any otherwise eligible Dependents will cease with the effective date of his/ her marriage.
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(3) |
In the event of (i) an in-service death of an Active Employee Participant not eligible to participate in the Plan in Retirement as provided in Article 3.2 or (ii) an in-service death of an Active Employee Participant eligible to participate in the Plan in Retirement as provided in Article 3.2 but the individual was not Retirement eligible, within the meaning of Section 2.30, at the time of death, such Active Employee Participant's Dependent(s) may continue participation in this Plan, eligible for the Covered Benefits described in Sections 4.1(a) and (b), for a 36-month period commencing the month following the month in which such Active Employee Participant dies as long as such Dependent(s) are participating in the Basic Plans (or with respect to a Dependent who is a Medicare Eligible Retired Participant, for so long as such Dependent would have otherwise been eligible for participation under the terms of the Prior Basic Plan) and subject to the payment of Active Participant Contributions for the first 12 months and payment of Active COBRA Contributions for the remaining 24 months, as provided by Articles 7 and 10.1. If the Active Employee Participant's Dependent(s) are eligible for COBRA, they will automatically be enrolled in COBRA so that there is no lapse in coverage, and this 36-month coverage will be integrated and run concurrently with COBRA coverage.
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6.1
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Disability
. With respect to any Active Employee Participant who commences receipt of short term or long term disability benefits under the Officer Disability Plan, participation under this Plan will be as follows:
|
(1) |
The Participant will continue to participate in this Plan, eligible for the Covered Benefits described in Section 4.1(a) and (b), for as long as he/she receives short term disability benefits under the Officer Disability Plan and pays the applicable contributions for this Plan as provided by Article 7.
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(2) |
An Active Employee Participant not eligible to participate in the Plan in Retirement as provided in Article 3.2 who commences long term disability benefits under the Officer Disability Plan or an Active Employee Participant eligible to participate in the Plan in Retirement as provided in Article 3.2 but who is not Retirement eligible, within the meaning of Section 2.30, at the time long term disability benefits under the Officer Disability Plan commence, will cease participation in this Plan (along with his/her Dependents) effective as of the last day of the calendar month in which such long term disability benefits commence, unless such benefits commence on the first day of a calendar month, in which case participation in this Plan shall cease effective as of the last day of the prior month.
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(3) |
An Active Employee Participant eligible to participate in the Plan in Retirement as provided in Article 3.2 ,who is Retirement eligible, within the meaning of Section 2.30, at the time long term disability benefits under the Officer Disability Plan commence, will be eligible to continue participation in this Plan on the same terms and conditions that participation would be available to such Participant in Retirement, subject to the payment of applicable contributions for this Plan as provided by Article 7, regardless of his/her continued receipt of long term disability benefits under the Officer Disability Plan.
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7.1
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Provision of Benefits under the Plan
. Except as provided below in this Article 7 with respect to required Monthly Contributions or with respect to any required Coinsurance, the benefits available to Participants under this Plan shall be provided through an insurance policy maintained by AT&T.
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7.2
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Active Participant Contributions
. An Active Participant electing to participate in the Plan will pay Monthly Contributions to participate in the Plan while in active service, while on Leave of Absence or while receiving short term disability benefits under the Officer Disability Plan. The Monthly Contribution for participation may change annually, effective at the beginning of each Plan Year. Contributions to be made by Active Participants electing to participate in the Plan shall be set annually by the SEVP-HR, determined in the SEVP-HR's sole and absolute discretion. The SEVP-HR may adopt tiered rates for similarly situated groups of Participants based on factors such as the number of Dependents covered or Medicare eligibility. Notwithstanding the foregoing, required Monthly Contributions for Executive Officers shall be approved by the Committee.
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7.3
|
Retired Participant Contributions
. Retired Participants who elect to participate will pay Monthly Contributions to participate in the Plan. The Monthly Contribution for participation may change annually, effective at the beginning of each Plan Year.
Contributions to be made by Retired Participants who elect to participate shall be set annually by the SEVP-HR (in his/her sole and absolute discretion), to the extent their contributions have not previously been provided for in a separate agreement.
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7.4
|
Survivor Contributions.
Upon the death of a Participant, the Participant's Dependents shall be required to pay Monthly Contributions to participate in the Plan. The Monthly Contributions shall
be set annually by the SEVP-HR, in the SEVP-HR's sole and absolute discretion.
Any changes to the Monthly Contributions shall be effective at the beginning of each Plan Year.
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7.5
|
Contributions for Participants on Disability
. Participants continuing benefits while on Disability shall be required to pay Monthly Contributions to participate in the Plan. The Monthly Contributions shall
be set annually by the SEVP-HR, determined in the SEVP-HR's sole and absolute discretion.
Any changes to the Monthly Contributions shall be effective at the beginning of each Plan Year.
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8.1
|
Participants acknowledge that no coverage and benefits would be provided under this Plan on and after January 1, 2010 but for the loyalty conditions and covenants set forth in this Article, and that the conditions and covenants herein are a material inducement to AT&T's willingness to sponsor the Plan and to offer Plan coverage and benefits for the Participants on or after January 1, 2010. Accordingly, as a condition of receiving coverage and any Plan benefits on or after January 1, 2010, each Participant is deemed to agree that he/she shall not, without obtaining the written consent of the Plan Administrator in advance, participate in activities that constitute engaging in competition with AT&T or engaging in conduct disloyal to AT&T, as those terms are defined in this Section. Further and notwithstanding any other provision of this Plan, all coverage and benefits under this Plan on and after January 1, 2010 with respect to a Participant and his or her Dependents shall be subject in their entirety to the enforcement provisions of this Section if the Participant, without the Plan Administrator's consent, participates in an activity that constitutes engaging in competition with AT&T or engaging in conduct disloyal to AT&T, as defined below. The provisions of this Article 8 as in effect immediately before such date shall be applicable to Participants who retire before January 1, 2010.
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8.2
|
Definitions
. For purposes of this Article and of the Plan generally
|
(1)
|
an "Employer Business" shall mean AT&T, any Subsidiary, or any business in which AT&T or a Subsidiary or an affiliated company of AT&T has a substantial ownership or joint venture interest;
|
(2)
|
"engaging in competition with AT&T" shall mean, while employed by an Employer Business or within two (2) years after the Participant's termination of employment, engaging by the Participant in any business or activity in all or any portion of the same geographical market where the same or substantially similar business or activity is being carried on by an
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|
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(3)
|
"engaging in conduct disloyal to AT&T" means, while employed by an Employer Business or within two (2) years after the Participant's termination of employment, (i) soliciting for employment or hire, whether as an employee or as an independent contractor, for any business in competition with an Employer Business, any person employed by AT&T or its affiliates during the one (1) year prior to the termination of the Participant's employment, whether or not acceptance of such position would constitute a breach of such person's contractual obligations to AT&T and its affiliates; (ii) soliciting, encouraging, or inducing any vendor or supplier with which Participant had business contact on behalf of any Employer Business during the two (2) years prior to the termination of the Participant's employment, for any reason to terminate, discontinue, renegotiate, reduce, or otherwise cease or modify its relationship with AT&T or its affiliate; or (iii) soliciting, encouraging, or inducing any customer or active prospective customer with whom Participant had business contact, whether in person or by other media, on behalf of any Employer Business during the two (2) years prior to the termination of Participant's employment for any reason ("Customer"), to terminate, discontinue, renegotiate, reduce, or otherwise cease or modify its relationship with any Employer Business, or to purchase competing goods or services from a business competing with any Employer Business, or accepting or servicing business from such Customer on behalf of himself or any other business. "Engaging in conduct disloyal to AT&T" also means, disclosing Confidential Information to any third party or using Confidential Information, other than for an Employer Business, or failing to return any Confidential Information to the Employer Business following termination of employment.
|
(4)
|
"Confidential Information" shall mean all information belonging to, or otherwise relating to, an Employer Business, which is not generally known, regardless of the manner in which it is stored or conveyed to the Participant, and which the Employer Business has taken reasonable measures under the circumstances to protect from unauthorized use or disclosure. Confidential Information includes trade secrets as well as other proprietary knowledge, information, know-how, and non-public intellectual property rights, including unpublished or pending patent applications and all related patent rights, formulae, processes, discoveries, improvements, ideas, conceptions, compilations of data, and data, whether or not patentable or copyrightable and whether or not it has been conceived, originated, discovered, or developed in whole or in part by the Participant. For example, Confidential Information includes, but is not limited to, information concerning the Employer Business' business plans, budgets, operations, products, strategies, marketing, sales, inventions, designs,
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8.3
|
Forfeiture of Benefits
. Subject to the provisions of Section 1001(5) of the Affordable Care Act, coverage and benefits shall be forfeited and shall not be provided under this Plan for any period as to which the Plan Administrator determines that, within the time period and without the written consent specified, Participant has been either engaging in competition with AT&T or engaging in conduct disloyal to AT&T.
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8.4
|
Equitable Relief
.
The parties recognize that any Participant's breach of any of the covenants in this Article 8 will cause irreparable injury to AT&T, will represent a failure of the consideration under which AT&T (in its capacity as creator and sponsor of the Plan) agreed to provide the Participant with the opportunity to receive Plan coverage and benefits, and that monetary damages would not provide AT&T with an adequate or complete remedy that would warrant AT&T's continued sponsorship of the Plan and payment of Plan benefits for all Participants. Accordingly, in the event of a Participant's actual or threatened breach of the covenants in this Article, the Plan Administrator, in addition to all other rights and acting as a fiduciary under ERISA on behalf of all Participants, shall have a fiduciary duty (in order to assure that AT&T receives fair and promised consideration for its continued Plan sponsorship and funding) to seek an injunction restraining the Participant from breaching the covenants in this Article 8. In addition, AT&T shall pay for any Plan expenses that the Plan Administrator incurs hereunder, and shall be entitled to recover from the Participant its reasonable attorneys' fees and costs incurred in obtaining such injunctive remedies. To enforce its repayment rights with respect to a Participant, the Plan shall have a first priority, equitable lien on all Plan benefits provided to or for the Participant and his or her Dependents. In the event the Plan Administrator succeeds in enforcing the terms of this Article through a written settlement with the Participant or a court order granting an injunction hereunder, the Participant shall be entitled to collect Plan benefits collect Plan benefits prospectively, if the Participant is otherwise entitled to such benefits, net of any fees and costs assessed pursuant hereto (which fees and costs shall be paid to AT&T as a repayment on behalf of the Participant), provided that the Participant complies with said settlement or injunction.
|
8.5
|
Uniform Enforcement
. In recognition of AT&T's need for nationally uniform standards for the Plan administration, it is an absolute condition in consideration of any Participant's accrual or receipt of benefits under the Plan after January 1, 2010 that each
|
(1)
|
ERISA shall control all issues and controversies hereunder, and the Committee shall serve for purposes hereof as a "fiduciary" of the Plan, and as its "named fiduciary" within the meaning of ERISA.
|
(2)
|
All litigation between the parties relating to this Article shall occur in federal court, which shall have exclusive jurisdiction, any such litigation shall be held in the United States District Court for the Northern District of Texas, and the only remedies available with respect to the Plan shall be those provided under ERISA.
|
(3)
|
If the Plan Administrator determines in its sole discretion either (I) that AT&T or its affiliate that employed the Participant terminated the Participant's employment for cause, or (II) that equitable relief enforcing the Participant's covenants under this Article 8 is either not reasonably available, not ordered by a court of competent jurisdiction, or circumvented because the Participant has sued in state court, or has otherwise sought remedies not available under ERISA, then in any and all of such instances the Participant shall not be entitled to collect any Plan benefits, and if any Plan benefits have been paid to the, the Participant shall immediately repay all Plan benefits to the Plan (with such repayments being used within such year for increased benefits for other Participants in any manner determined in the Plan Administrator's discretion) upon written demand from the Plan Administrator. Furthermore, the Participant shall hold AT&T and its affiliates harmless from any loss, expense, or damage that may arise from any of the conduct described in clauses (I) and (II) hereof.
|
9.1
|
Administration
. The Plan Administrator is the named fiduciary of the Plan and has the power and duty to do all things necessary to carry out the terms of the Plan. The Plan Administrator has the sole and absolute discretion to interpret the provisions of the Plan, to make findings of fact, to determine the rights and status of Participants and other under the Plan, to determine which expenses and benefits qualify as Covered Health Services or Covered Benefits, to make all benefit determinations under the Plan, to decide disputes under the Plan and to delegate all or a part of this discretion to third parties and insurers. To the fullest extent permitted by law, such interpretations, findings, determinations and decisions shall be final, binding and conclusive on all persons for all purposes of the Plan. The Plan Administrator may delegate any or all of its authority and responsibility under the Plan to other individuals, committees, third party administrators, claims administrators or insurers for any purpose, including, but not limited to the processing of benefits and claims related thereto. In carrying out these functions, these individuals or entities have been delegated responsibility and discretion for interpreting the provisions of the Plan, making findings of fact, determining the rights and status of Participants and others under the Plan, and deciding disputes under the Plan and such interpretations, findings, determinations and decisions shall be final, binding and conclusive on all persons for all purposes of the Plan.
|
9.2
|
Amendments and Termination
. This Plan may be modified or terminated at any time in accordance with the provisions of AT&T's Schedule of Authorizations.
|
9.3
|
Newborns' and Mothers' Health Protection Act of 1996
. To the extent this Plan provides benefits for hospital lengths of stay in connection with childbirth, the Plan will cover the minimum length of stay required for deliveries (i.e., a 48-hour hospital stay after a vaginal delivery or a 96-hour stay following a delivery by Cesarean section.) The mother's or newborn's attending physician, after consulting with the mother, may discharge the mother or her newborn earlier than the minimum length of stay otherwise required by law. Such coverage shall be subject to all other provisions of this Plan.
|
9.4
|
Women's Health and Cancer Rights Act of 1998
. To the extent this Plan provides benefits for mastectomies, it will provide, for an individual who is receiving benefits in connection with a mastectomy and who elects breast reconstruction in connection with such mastectomy, coverage for reconstruction on the breast on which the mastectomy was performed, surgery and reconstruction on the other breast to give a symmetrical appearance, and prosthesis and coverage for physical complications of all stages of the mastectomy, including lymphedemas. Such coverage shall be subject to all other provisions of this Plan.
|
9.5
|
Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
. To the extent this Plan provides mental health benefits or substance use disorder benefits it will not place annual or lifetime maximums for such benefits that are lower than the annual and lifetime maximums for physical health benefits. In addition, the financial requirements (e.g., deductibles and co-payments) and treatment limitations (e.g., number of visits or days of coverage) that apply to mental health benefits or substance use disorder benefits will not be more restrictive than the predominant financial requirements or treatment limitations that apply to substantially all medical/surgical benefits; mental health benefits and substance use disorder benefits will not be subject to any separate cost sharing requirements or treatment limitations that only apply to such benefits; if the Plan provides for out of network medical/surgical or substance use disorder benefits, it will provide for out of network mental health and substance use disorder benefits and standards for medical necessity determinations and reasons for any denial of benefits relating to mental health benefits and substance use disorder benefits will be made available upon request to plan participants. Such coverage shall be subject to all other provisions of this Plan.
|
9.6
|
Continuation of Coverage During Family or Medical Leave
. During any period which an Active Employee Participant is on a family or medical leave as defined in the Family or Medical Leave Act, any benefit elections in force for such Participant shall remain in effect. While the Participant is on paid leave, contributions shall continue. If the Participant is on an unpaid leave, the Participant may elect to prepay required contributions on a pre-tax basis before the commencement of such unpaid leave. Alternatively, the Participant may elect to make such payments on an after-tax basis monthly in accordance with an arrangement that the Plan Administrator shall provide. If coverage is not continued during the entire period of the family or medical leave because the Participant declines to pay the premium, the coverage must be reinstated upon reemployment with no exclusions or waiting periods, notwithstanding any other provision of this Plan to the contrary. If the Participant does not return to work upon completion of the leave, the Participant must pay the full cost of any health care coverage that was continued on his/her behalf during the leave. These rules apply to the COBRA eligible programs.
|
|
|
9.7
|
Rights While on Military Leave
. Pursuant to the provisions of the Uniformed Services Employment and Reemployment Rights Act of 1994, an Active Employee Participant on military leave will be considered to be on a Leave of Absence and will be entitled during the leave to the health and welfare benefits that would be made available to other similarly situated employees if they were on a Leave of Absence. This entitlement will end if the individual provides written notice of intent not to return to work following the completion of the military leave. The individual shall have the right to continue his/her coverage, including any Dependent coverage, for the lesser of the length of the leave or 18 months. If the military leave is for a period of 31 days or more, the individual may be required to pay 102 percent of the total premium (determined in the same manner as a COBRA continuation coverage premium). If coverage is not continued during the entire period of the military leave because the individual declines to pay the premium or the leave extends beyond 18 months, the coverage must be reinstated upon reemployment with no pre-existing condition exclusions (other than for service-related illnesses or injuries) or waiting periods (other than those applicable to all Eligible Employees).
|
9.8
|
Qualified Medical Child Support Orders
. The Plan will comply with any Qualified Medical Child Support Order issued by a court of competent jurisdiction or administrative body that requires the Plan to provide medical coverage to a Dependent child of an Active Employee or Retired Employee Participant. The Plan Administrator will establish reasonable procedures for determining whether a court order or administrative decree requiring medical coverage for a Dependent child meets the requirements for a Qualified Medical Child Support Order. The cost of coverage or any additional cost of such coverage, if any, shall be borne by the Participant.
|
9.9
|
Right of Recovery
.
If the Plan has made an erroneous or excess payment to any Participant, the Plan Administrator shall be entitled to recover such excess from the individual or entity to whom such payments were made. The recovery of such overpayment may be made by offsetting the amount of any other benefit or amount payable by the amount of the overpayment under the Plan.
|
10.1
|
Continuation of Coverage Under COBRA
. Participants shall have all COBRA continuation rights required by federal law and all conversion rights. COBRA continuation coverage shall be continued as provided in this Article 10.
|
10.2
|
COBRA Continuation Coverage for Terminated Participants
. A covered Active Employee Participant may elect COBRA continuation coverage, at his/her own expense, if his participation under this Plan would terminate as a result of one of the following Qualifying Events: an Employee's termination of employment or reduction of hours with an Employer.
|
10.3
|
COBRA Continuation Coverage for Dependents
. A Qualified Dependent may elect COBRA continuation coverage, at his/her own expense, if his/her participation under this Plan would terminate as a result of a Qualifying Event.
|
10.4
|
Period of Continuation Coverage for Covered Participants
.
A covered Active Employee Participant who qualifies for COBRA continuation coverage as a result of a Participant's termination of employment or reduction in hours of employment described in Subsection 10.2 may elect COBRA continuation coverage for up to 18 months
|
|
|
(1)
|
date on which the Active Employee Participant's Employer ceases to maintain this Plan;
|
(2)
|
last day of the month for which premium payments have been made with respect to this Plan, if the individual fails to make premium payments on time, in accordance with Subsection 10.6;
|
(3)
|
date the covered Active Employee Participant becomes entitled to Medicare; or
|
(4)
|
date the covered Participant is no longer subject to a pre-existing condition exclusion under the Participant's other coverage or new employer plan for the type of coverage available under the COBRA eligible program for which the COBRA election was made.
|
10.5
|
Period of COBRA Continuation Coverage for Dependents
. If a Qualified Dependent elects COBRA continuation coverage under a COBRA eligible program as a result of the an Active Employee Participant's termination of employment as described in Subsection 10.2, continuation coverage may be continued for up to 18 months measured from the date of the Qualifying Event. COBRA continuation coverage for all other Qualifying Events may continue for up to 36 months.
|
(1)
|
on which premium payments have not been made, in accordance with Subsection 10.6 below;
|
(2)
|
the Qualified Dependent becomes entitled to Medicare;
|
(3)
|
on which the Employer ceases to maintain this Plan; or
|
(4)
|
the Qualified Dependent is no longer subject to a pre-existing condition exclusion under the Participant's other coverage or new employer plan for the type of coverage available under this Plan.
|
10.6
|
Contribution Requirements for COBRA Continuation Coverage
. Covered Participants and Qualified Dependents who elect COBRA continuation coverage as a result of a Qualifying Event will be required to pay continuation coverage payments. Continuation coverage payments are the payments required for COBRA continuation coverage that is an amount equal to a reasonable estimate of the cost to this Plan of providing coverage for all covered Participants at the time of the Qualifying Event plus a 2% administrative expense. In the case of a disabled individual who receives an additional 11-month extended coverage under COBRA, the Employer may assess up to 150% of the cost for this extended coverage period. Such cost shall be determined on an actuarial basis and take into account such factors as the Secretary of the Treasury may prescribe in regulations.
|
10.7
|
Limitation on Participant's Rights to COBRA Continuation Coverage
.
|
(1)
|
If a Qualified Dependent loses, or will lose medical coverage under this Plan as a result of divorce, legal separation, entitlement to Medicare, or ceasing to be a Dependent, such Qualified Dependent is responsible for notifying the Plan Administrator in writing within 60 days of the Qualifying Event. Failure to make timely notification will terminate the Qualified Dependent's rights to COBRA continuation coverage under this Article.
|
(2)
|
A Participant must complete and return the required enrollment materials within 60 days from the later of (a) the date of loss of coverage, or (b) the date the Plan Administrator sends notice of eligibility for COBRA continuation coverage. Failure to enroll for COBRA continuation coverage during this 60-day period will terminate all rights to COBRA continuation coverage under this Article. An affirmative election of COBRA continuation coverage by a Participant or his/her spouse shall be deemed to be an election for that Participant's Dependent(s) who would otherwise lose coverage under the Plan.
|
10.8
|
Subsequent Qualifying Event
. If a second Qualifying Event occurs during an 18-month extension explained above, coverage may be continued for a maximum of 36 months from the date of the first Qualifying Event. In the event the Dependent loses coverage due to a Qualifying Event and after such date the Participant becomes entitled to Medicare, the Dependent shall have available up to 36 months of coverage measured from the date of the Qualifying Event that causes the loss of coverage. If the Participant
|
|
|
10.9
|
Extension of COBRA Continuation Period for Disabled Individuals
. The period of continuation shall be extended to 29 months in total (measured from the date of the Qualifying Event) in the event the individual is disabled as determined by the Social Security laws within 60 days of the Qualifying Event. The individual must provide evidence to the Plan Administrator of such Social Security determination prior to the earlier of 60 days after the date of the Social Security determination, or the expiration of the initial 18 months of COBRA continuation coverage. In such event, the Employer may charge the individual up to 150% of the COBRA cost of the coverage.
|
11.1
|
Definitions
. For purposes of this Article 11, the following defined terms shall have the meaning assigned to such terms in this subsection:
|
11.2
|
Privacy Provisions Relating to Protected Health Information ("PHI")
. The Plan and its Business Associates shall use and disclose PHI to the extent permitted by, and in accordance with, HIPAA, for purposes of providing benefits under the Plan and for purposes of administering the plan, including, by way of illustration and not by way of limitation, for purposes of Treatment, Payment, and Health Care Operations.
|
11.3
|
Disclosure of De-Identified or Summary Health Information
. The HIPAA Plan, or, with respect to the HIPAA Plan, a health insurance issuer, may disclose summary health information (as that phrase is defined at 45 C.F.R. § 160.5049a)) to the Plan Sponsor of the HIPAA Plan (and its affiliates) if such entity requests such information for the purpose of:
|
11.4
|
The HIPAA Plan Will Use and Disclose PHI as Required by Law
or as Permitted by the Authorization of the Participant or Beneficiary . |
11.5
|
Disclosure of PHI to the Plan Sponsor
.
The HIPAA Plan will disclose information to the Plan Sponsor only upon certification from the Plan Sponsor that the HIPAA Plan documents have been amended to incorporate the assurances provided below.
|
(1) |
not use or further disclose PHI other than as permitted or required by the HIPAA Plan document or as required by law;
|
(2) |
ensure that any affiliates or agents, including a subcontractor, to whom the Plan Sponsor provides PHI received from the HIPAA Plan, agrees to the same restrictions and conditions that apply to the Plan Sponsor with respect to such PHI;
|
(3) |
not use or disclose PHI for employment-related actions and decisions unless authorized by the individual to whom the PHI relates;
|
(4) |
not use or disclose PHI in connection with any other benefits or employee benefit plan of the Plan Sponsor or its affiliates unless permitted by the Plan or authorized by an individual to whom the PHI relates;
|
(5) |
report to the Plan any PHI use or disclosure that is inconsistent with the uses or disclosures provided for of which it becomes aware;
|
(6) |
make PHI available to an individual in accordance with HIPAA's access rules;
|
(7) |
make PHI available for amendment and incorporate any amendments to PHI in accordance with HIPAA;
|
(9) |
make internal practices, books and records relating to the use and disclosure of PHI received from the HIPAA Plan available to the Secretary of the United States Department of Health and Human Resources for purposes of determining the Plan's compliance with HIPAA; and
|
(10) |
if feasible, return or destroy all PHI received from the HIPAA Plan that the Plan Sponsor still maintains in any form, and retain no copies of such PHI when no longer needed for the purpose for which disclosure was made (or if return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction infeasible).
|
11.6
|
Separation Between the Plan Sponsor and the HIPAA Plan
.
In accordance with HIPAA, only the following employees and Business Associate personnel shall be given access to PHI:
|
(1) |
employees of the AT&T Benefits and/or AT&T Executive Compensation organizations responsible for administering group health plan benefits under the HIPAA Plan, including those employees whose functions in the regular course of business include Payment, Health Care Operations or other matters pertaining to the health care programs under a HIPAA Plan;
|
(2) |
employees who supervise the work of the employees described in (1), above;
|
(3) |
support personnel, including other employees outside of the AT&T Benefits or AT&T Executive Compensation organizations whose duties require them to rule on health plan-related appeals or perform functions concerning the HIPAA Plan;
|
(4) |
investigatory personnel to the limited extent that such PHI is necessary to conduct investigations of possible fraud;
|
(5) |
outside and in-house legal counsel providing counsel to the HIPAA Plan;
|
(6) |
consultants providing advice concerning the administration of the HIPAA Plan; and
|
(7) |
the employees of Business Associates charged with providing services to the HIPAA Plan.
|
11.7
|
Enforcement
.
|
Monthly Contributions
|
Individual - $152
Individual + Spouse - $187
Individual + 1 or More Children - $152
Individual + Spouse + 1 or More Children - $361
|
Annual Deductible
|
Individual - $1,600
Individual + 1 or More - $3,200
|
Coinsurance Percentage
|
10% after the Annual Deductible is met. Coinsurance applies until the Annual Out-of-Pocket Maximum is reached.
|
Annual Out-of-Pocket Maximum
|
Individual - $5,500
Individual + 1 or More - $11,000 (individual amount of $5,500)
|
Retired Prior to August 31, 1992 and Surviving Spouses
|
Individual - $203
Individual + Spouse - $203
Individual + 2 or More - $203
|
|
Retired on or after September 1, 1992 and Surviving Spouses
Note: The Plan Administrator shall maintain records governing whether a Retired Participant is in Class A, B, C or D.
|
Class A
|
Individual - $556
Individual + Spouse - $908
Individual + 1 or More Children - $556
Individual + Spouse + 1 or More Children - $782
|
Class B
|
Individual - $680
Individual + Spouse - $1,110
Individual + 1 or More Children - $680
Individual + Spouse + 1 or More Children - $958
|
|
Class C
|
Individual - $859
Individual + Spouse - $1,387
Individual + 1 or More Children - $859
Individual + Spouse + 1 or More Children - $1,209
|
|
Class D
|
Individual - $1,046
Individual + Spouse - $2,076
Individual + 1 or More Children - $1,046
Individual + Spouse + 1 or More Children - $1,770
|
Active COBRA
|
Individual - $1,793
Individual + Spouse - $3,674
Individual + 1 or More Children - $2,959
Individual + Spouse + 1 or More Children - $5,089
|
Retired Prior to August 31, 1992 and Surviving Spouses COBRA
|
Individual - $1,550
Individual + 1 - $3,176
Individual + 2 or More - $3,333
|
Retired on or after September 1, 1992 and Surviving Spouses COBRA
|
Individual - $1,501
Individual + Spouse - $3,186
Individual + 1 or More Children - $2,446
Individual + Spouse + 1 or More Children - $4,400
|
·
|
A claim related to basic eligibility for coverage under the Plan (See Section 12.2 of the Plan).
|
·
|
A claim related to the Loyalty Conditions contained in Article 8 of the Plan (See Section 12.2 of the Plan).
|
·
|
You will receive notice of the benefit determination in writing or electronically within 72 hours after the Claims Administrator receives all necessary information, taking into account the seriousness of your condition.
|
·
|
Notice of denial may be oral with a written or electronic confirmation to follow within three days.
|
·
|
The Claims Administrator's receipt of the requested information.
|
·
|
The end of the 48-hour period within which you were to provide the additional information, if the information is not received within that time.
|
·
|
For appeals of pre-service claims, the first-level appeal will be conducted and you will be notified by the Claims Administrator of the decision within 15 days from receipt of a request for appeal of a denied Claim. The second-level appeal will be conducted and you will be notified by the Claims Administrator of the decision within 15 days from receipt of a request for review of the first-level appeal decision.
|
·
|
For appeals of post-service claims, the first-level appeal will be conducted and you will be notified by the Claims Administrator of the decision within 30 days from receipt of a request for appeal of a denied claim. The second-level appeal will be conducted and you will be notified by the Claims Administrator of the decision within 30 days from receipt of a request for review of the first-level appeal decision.
|
·
|
For procedures associated with urgent Claims, refer to the following "Urgent Claim Appeals That Require Immediate Action" section.
|
·
|
If you are not satisfied with the first-level appeal decision of the Claims Administrator, you have the right to request a second-level appeal from the Claims Administrator. Your second level appeal request must be submitted to the Claims Administrator in writing within 60 days from receipt of the first-level appeal decision.
|
·
|
For pre-service and post-service claim appeals, the Plan Administrator has delegated to the Claims Administrator the exclusive right to interpret and administer the provisions of the Plan. The Claims Administrator's decisions are conclusive and binding.
|
ARTICLE I
|
||
DEFINITIONS AND ACCOUNTING TERMS
|
||
Section 1.01
|
Certain Defined Terms……………………………………………………………………………………...............................................................................................................................................................................................................
|
1
|
Section 1.02
|
Computation of Time Periods………………………………………………………………………….....................................................................................................................................................................................................................
|
15
|
Section 1.03
|
Accounting Terms……………………………………………………………………………………….....................................................................................................................................................................................……......................
|
15
|
ARTICLE II
|
||
AMOUNTS AND TERMS OF THE ADVANCES
|
||
Section 2.01
|
The Advances............................................................................................................................................................................................................................................................................................................................................................
|
15
|
Section 2.02
|
Making the Advances................................................................................................................................................................................................................................................................................................................................................
|
16
|
Section 2.03
|
Fees...........................................................................................................................................................................................................................................................................................................................................................................
|
17
|
Section 2.04
|
Optional Termination or Reduction of the Commitments........................................................................................................................................................................................................................................................................................
|
18
|
Section 2.05
|
Repayment of Advances...........................................................................................................................................................................................................................................................................................................................................
|
18
|
Section 2.06
|
Interest on Advances.................................................................................................................................................................................................................................................................................................................................................
|
18
|
Section 2.07
|
Interest Rate Determination......................................................................................................................................................................................................................................................................................................................................
|
19
|
Section 2.08
|
Optional Conversion of Advances............................................................................................................................................................................................................................................................................................................................
|
20
|
Section 2.09
|
Optional Prepayments of Advances.........................................................................................................................................................................................................................................................................................................................
|
21
|
Section 2.10
|
Increased Costs.........................................................................................................................................................................................................................................................................................................................................................
|
21
|
Section 2.11
|
Illegality.....................................................................................................................................................................................................................................................................................................................................................................
|
22
|
Section 2.12
|
Payments and Computations.....................................................................................................................................................................................................................................................................................................................................
|
22
|
Section 2.13
|
Taxes..........................................................................................................................................................................................................................................................................................................................................................................
|
23
|
Section 2.14
|
Sharing of Payments, Etc. .........................................................................................................................................................................................................................................................................................................................................
|
27
|
Section 2.15
|
Evidence of Debt........................................................................................................................................................................................................................................................................................................................................................
|
27
|
Section 2.16
|
Use of Proceeds..........................................................................................................................................................................................................................................................................................................................................................
|
28
|
Section 2.17
|
Defaulting Lenders.....................................................................................................................................................................................................................................................................................................................................................
|
28
|
Section 2.18
|
Replacement of Lenders.............................................................................................................................................................................................................................................................................................................................................
|
29
|
ARTICLE III
|
||
CONDITIONS TO EFFECTIVENESS AND LENDING
|
||
Section 3.01
|
Conditions Precedent to Effectiveness of Section 2.01............................................................................................................................................................................................................................................................................................
|
30
|
Section 3.02
|
Conditions Precedent to Each Borrowing................................................................................................................................................................................................................................................................................................................
|
31
|
Section 3.03
|
Determinations Under Section 3.01..........................................................................................................................................................................................................................................................................................................................
|
32
|
ARTICLE IV
|
||
REPRESENTATIONS AND WARRANTIES
|
||
Section 4.01
|
Representations and Warranties...............................................................................................................................................................................................................................................................................................................................
|
32
|
ARTICLE V
|
||
COVENANTS OF THE BORROWER
|
||
Section 5.01
|
Affirmative Covenants...........................................................................................................................................................................................................................................................................................................................................
|
33
|
Section 5.02
|
Negative Covenants ..............................................................................................................................................................................................................................................................................................................................................
|
36
|
Section 5.03
|
Financial Covenant.................................................................................................................................................................................................................................................................................................................................................
|
38
|
ARTICLE VI
|
||
EVENTS OF DEFAULT
|
||
Section 6.01
|
Events of Default..................................................................................................................................................................................................................................................................................................................................................
|
38
|
ARTICLE VII
|
||
THE AGENT
|
||
Section 7.01
|
Authorization and Authority.................................................................................................................................................................................................................................................................................................................................
|
41
|
Section 7.02
|
Agent Individually................................................................................................................................................................................................................................................................................................................................................
|
41
|
Section 7.03
|
Duties of Agent; Exculpatory Provisions.............................................................................................................................................................................................................................................................................................................
|
41
|
Section 7.04
|
Reliance by Agent................................................................................................................................................................................................................................................................................................................................................
|
42
|
Section 7.05
|
Delegation of Duties.............................................................................................................................................................................................................................................................................................................................................
|
43
|
Section 7.06
|
Resignation of Agent............................................................................................................................................................................................................................................................................................................................................
|
43
|
Section 7.07
|
Non-Reliance on Agent and Other Lenders..........................................................................................................................................................................................................................................................................................................
|
43
|
Section 7.08
|
Indemnification.....................................................................................................................................................................................................................................................................................................................................................
|
44
|
Section 7.09
|
Other Agents.........................................................................................................................................................................................................................................................................................................................................................
|
44
|
ARTICLE VIII
|
||
MISCELLANEOUS
|
||
Section 8.01
|
Amendments, Etc. ...............................................................................................................................................................................................................................................................................................................................................
|
44
|
Section 8.02
|
Notices; Effectiveness; Electronic Communication ............................................................................................................................................................................................................................................................................................
|
45
|
Section 8.03
|
No Waiver; Remedies .........................................................................................................................................................................................................................................................................................................................................
|
46
|
Section 8.04
|
Costs and Expenses .............................................................................................................................................................................................................................................................................................................................................
|
47
|
Section 8.05
|
Binding Effect ......................................................................................................................................................................................................................................................................................................................................................
|
48
|
Section 8.06
|
Assignments and Participations ...........................................................................................................................................................................................................................................................................................................................
|
48
|
Section 8.07
|
Confidentiality; PATRIOT Act .............................................................................................................................................................................................................................................................................................................................
|
52
|
Section 8.08
|
Governing Law .....................................................................................................................................................................................................................................................................................................................................................
|
53
|
Section 8.09
|
Jurisdiction, Etc. ...................................................................................................................................................................................................................................................................................................................................................
|
53
|
Section 8.10
|
Severability ...........................................................................................................................................................................................................................................................................................................................................................
|
54
|
Section 8.11
|
Waiver of Jury Trial ..............................................................................................................................................................................................................................................................................................................................................
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54
|
Section 8.12
|
Acknowledgement and Consent to Bail-In of EEA Financial Institutions ...........................................................................................................................................................................................................................................................
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54
|
Section 8.13
|
No Fiduciary Duties ..............................................................................................................................................................................................................................................................................................................................................
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55
|
Public Debt Rating S&P/Moody's/Fitch
|
Level 1
A- / A3 / A- or higher
|
Level 2
BBB+ / Baa1 / BBB+
|
Level 3
Lower than Level 2
|
Applicable Margin for Eurodollar Rate Advances under the Tranche A Facility
|
0.8750%
|
1.0000%
|
1.1250%
|
Applicable Margin for Eurodollar Rate Advances under the Tranche B Facility
|
0.9375%
|
1.0625%
|
1.1875%
|
Applicable Margin for Eurodollar Rate Advances under the Tranche C Facility
|
1.0000%
|
1.1250%
|
1.2500%
|
Applicable Margin for Base Rate Advances under the Tranche A Facility
|
0.0000%
|
0.0000%
|
0.1250%
|
Applicable Margin for Base Rate Advances under the Tranche B Facility
|
0.0000%
|
0.0625%
|
0.1875%
|
Applicable Margin for Base Rate Advances under the Tranche C Facility
|
0.0000%
|
0.1250%
|
0.2500%
|
(i)
|
Base Rate Advances
. During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in effect from time to time
plus
(y) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full.
|
(ii)
|
Eurodollar Rate Advances
. During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (x) the Eurodollar Rate for such Interest Period for such Advance
plus
(y) the Applicable Margin in effect from time to time, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.
|
(i)
|
the Agent shall forthwith notify the Borrower and the Lenders that the interest rate cannot be determined for such Eurodollar Rate Advances,
|
(ii)
|
with respect to Eurodollar Rate Advances, each such Advance will automatically, on the last day of the then existing Interest Period, Convert into a Base Rate Advance (or if such Advance is then a Base Rate Advance, will continue as a Base Rate Advance), and
|
(iii)
|
the obligation of the Lenders to make Eurodollar Rate Advances or to Convert Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.
|
(ii)
|
If a payment made to a Lender hereunder would be subject to United States federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Lender shall deliver to the Borrower and the Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Agent as may be necessary for the Borrower or the Agent to comply with its obligations under FATCA, to determine that such Lender has complied with such Lender
'
s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (ii), FATCA shall include any amendments to FATCA after the date hereof.
|
(i)
|
the Borrower shall have paid to the Agent the assignment fee (if any) specified in Section 8.06;
|
(ii)
|
such assigning Lender shall have received payment of an amount equal to the outstanding principal of its Advances, accrued interest thereon, accrued fees and all other amounts then payable to it hereunder (including any amounts under Section 8.04(c)) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
|
(iii)
|
in the case of any such assignment resulting from a claim for compensation under Section 2.10 or payments required to be made pursuant to Section 2.13, such assignment will result in a reduction in such compensation or payments after the date of such assignment;
|
(iv)
|
such assignment does not conflict with applicable law; and
|
(v)
|
in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.
|
(a)
|
Except as disclosed in filings with the Securities and Exchange Commission prior to the date hereof, there shall have occurred no Material Adverse Change since December 31, 2016.
|
(b)
|
There shall exist no action, suit, investigation, litigation or proceeding affecting the Borrower or any of its Subsidiaries pending or, to the knowledge of the Borrower, threatened before any court, governmental agency or arbitrator that (i) would be reasonably likely to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of this Agreement or any Note or the consummation of the transactions contemplated hereby.
|
(c)
|
All governmental and third party consents and approvals necessary in connection with the transactions contemplated hereby shall have been obtained (without the imposition of any conditions that are not acceptable to the Lenders) and shall remain in effect, and no law or regulation shall be applicable in the reasonable judgment of the Lenders that restrains, prevents or imposes materially adverse conditions upon the transactions contemplated hereby.
|
(d)
|
The Borrower shall have notified the Agent in writing as to the proposed Effective Date.
|
(e)
|
The Borrower shall have paid all accrued fees and expenses of the Agent and the Lenders (including the accrued fees and expenses of counsel to the Agent) required to be paid on or prior to the Effective Date.
|
(f)
|
On the Effective Date, the following statements shall be true and the Agent shall have received for the account of each Lender a certificate signed by a duly authorized officer of the Borrower, dated the Effective Date, stating that:
|
(i)
|
The representations and warranties contained in Section 4.01 are correct on and as of the Effective Date, and
|
(ii)
|
No event has occurred and is continuing that constitutes a Default.
|
(g)
|
The Agent shall have received on or before the Effective Date the following, each dated the Effective Date, in form and substance satisfactory to the Agent and (except for the Notes) in sufficient copies for each Lender:
|
(i)
|
The Notes of the Borrower to the order of the Lenders to the extent requested by any Lender pursuant to Section 2.15.
|
(ii)
|
Certified excerpts of the resolutions of the Board of Directors of the Borrower approving this Agreement and the Notes to be delivered by it, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement and the Notes.
|
(iii)
|
A certificate of the Secretary or an Assistant Secretary of the Borrower certifying the names and true signatures of the officers of the Borrower authorized to sign this Agreement and the Notes to be delivered by it and the other documents to be delivered by it hereunder.
|
(iv)
|
A favorable opinion of the associate general counsel of the Borrower, substantially in the form of Exhibit D hereto.
|
(i)
|
the representations and warranties of the Borrower contained in Section 4.01 (except the representations set forth in the last sentence of subsection (e) thereof and in subsection (f)(i) thereof) are correct in all material respects (except such representations that are qualified by materiality, which shall be correct) on and as of such date, before and after giving effect to such Borrowing and to the application of the proceeds therefrom, as though made on and as of such date,
|
(ii)
|
no event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, that constitutes a Default, and
|
(iii)
|
such Borrowing is within any mandatory debt limitations established by the Board of Directors of the Borrower;
|
(a)
|
The Borrower is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization.
|
(b)
|
The execution, delivery and performance by the Borrower of this Agreement and the Notes, and the consummation of the transactions contemplated hereby, are within the Borrower
'
s corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Borrower
'
s charter or by-laws, (ii) any material law applicable to the Borrower in any material respect or (iii) any material contractual restriction binding on or affecting the Borrower.
|
(c)
|
No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for the due execution, delivery and performance by the Borrower of this Agreement or the Notes.
|
(d)
|
This Agreement has been, and each of the Notes when delivered hereunder will have been, duly executed and delivered by the Borrower. This Agreement is, and each of the Notes when delivered hereunder will be, the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
|
(e)
|
The Audited Financial Statements, accompanied by an opinion of Ernst & Young LLP, independent public accountants (or other independent public accountants of national standing), and the Quarterly Financial Statements, duly certified by the chief financial officer of the Borrower, copies of which have been furnished to each Lender, fairly present in all material respects, subject, in the case of said Quarterly Financial Statements, to year-end audit adjustments, the Consolidated financial condition of the Borrower and its Subsidiaries as at such dates and the Consolidated results of the operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in accordance with generally accepted accounting principles consistently applied. Except as disclosed in filings with the Securities and Exchange Commission prior to the date hereof, since December 31, 2016, there has been no Material Adverse Change.
|
(f)
|
There is no pending or, to the knowledge of the Borrower, threatened action, suit, investigation, litigation or proceeding affecting the Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator that (i) is not disclosed in a filing by the Borrower with the Securities and Exchange Commission and would be reasonably likely to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of this Agreement or any Note or the consummation of the transactions contemplated hereby.
|
(g)
|
The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no proceeds of any Advance will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. Following application of the proceeds of each Advance, not more than 25 percent of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a Consolidated basis) that are subject to a restriction on sale, pledge, or disposal under this Agreement will be represented by margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System).
|
(h)
|
The Borrower is not an
"
investment company,
"
or a company
"
controlled
"
by an
"
investment company,
"
within the meaning of the Investment Company Act of 1940, as amended.
|
(i)
|
(i) None of the Borrower or any of the Borrower
'
s Subsidiaries is a Person that is, or is owned or controlled by Persons that are the subject or target of any Sanctions; (ii) the Borrower has implemented and maintains in effect policies and procedures designed to promote compliance by the Borrower with Anti-Corruption Laws, and (iii) the Borrower and its Subsidiaries are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.
|
(j)
|
The Borrower is not an EEA Financial Institution.
|
(a)
|
Compliance with Laws, Etc
. Comply, and cause each of its Subsidiaries to comply with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA and the PATRIOT Act, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
|
(b)
|
Payment of Taxes, Etc
. Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all federal and other material taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its material property;
provided
,
however
, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.
|
(c)
|
Maintenance of Insurance
. Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates;
provided
,
however
, that the Borrower and its Subsidiaries may self-insure (including through captive insurance subsidiaries) to the extent consistent with prudent business practice.
|
(d)
|
Preservation of Corporate Existence, Etc
. Preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its corporate existence and its material rights (charter and statutory) and franchises;
provided
,
however
, that the Borrower and its Subsidiaries may consummate any merger or consolidation permitted under Section 5.02(b) and
provided
further
that neither the Borrower nor any of its Subsidiaries shall be required to preserve any right or franchise, or in the case of any Subsidiary its corporate existence, if the Board of Directors of the Borrower or such Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Borrower or such Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material respect to the Borrower or such Subsidiary.
|
(e)
|
Visitation Rights
. At any reasonable time and from time to time during normal business hours, permit the Agent or any of the Lenders or any agents or representatives thereof, to examine the records and books of account of, and visit the properties of, the Borrower and any of its Subsidiaries, and, upon execution of a confidentiality agreement, to discuss the affairs, finances and accounts of the Borrower and any of its Subsidiaries with any of the officers or directors of the Borrower and with their independent certified public accountants,
provided
,
however
, that examination of the records and books of account of the Borrower or any of its Subsidiaries shall occur only at times when an Advance shall be outstanding.
|
(f)
|
Keeping of Books
. Keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Subsidiary in accordance with generally accepted accounting principles in effect from time to time.
|
(g)
|
Maintenance of Properties, Etc
.
Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
|
(h)
|
Reporting Requirements
. Furnish to the Lenders:
|
(i)
|
as soon as available and in any event within 40 days after the end of each of the first three quarters of each fiscal year of the Borrower, the Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such quarter and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by the chief financial officer of the Borrower as having been prepared in accordance with generally accepted accounting principles (it being understood that the certification provided by the chief financial officer in compliance with the Sarbanes-Oxley Act is acceptable for this purpose) and prepare and deliver a certificate of the chief financial officer of the Borrower as to compliance with the terms of this Agreement and setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 5.03 (it being understood that the only certification regarding pro forma adjustments included in such calculation shall be that the adjustments are reasonable good faith estimates prepared on the basis of information available as of the date that such pro forma adjustments are determined);
provided
that in the event of any change since the date hereof in generally accepted accounting principles used in the preparation of such financial statements, the Borrower shall provide the financial information required for the determination of compliance with Section 5.03 based on GAAP in effect as of the date hereof;
|
(ii)
|
as soon as available and in any event within 75 days after the end of each fiscal year of the Borrower, a copy of the annual report for such year for the Borrower containing the Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for such fiscal year, in each case accompanied by an opinion by Ernst & Young LLP or other independent public accountants of national standing to the effect that such Consolidated financial statements fairly present its financial condition and results of operations on a Consolidated basis in accordance with generally accepted accounting principles consistently applied and prepare and deliver a certificate of the chief financial officer of the Borrower as to compliance with the terms of this Agreement and setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 5.03 (it being understood that the only certification regarding pro forma adjustments included in such calculation shall be that the adjustments are reasonable good faith estimates prepared on the basis of information available as of the date that such pro forma adjustments are determined);
provided
that in the event of any change since the date hereof in generally accepted accounting principles used in the preparation of such financial statements, the Borrower shall provide the financial information required for the determination of compliance with Section 5.03 based on GAAP in effect as of the date hereof;
|
(iii)
|
as soon as possible and in any event within five Business Days after the occurrence of each Default continuing on the date of such statement, a statement of the chief financial officer of the Borrower setting forth details of such Default and the action that the Borrower has taken and proposes to take with respect thereto;
|
(iv)
|
if Advances are outstanding and if such are not available on the internet at www.att.com, www.sec.gov or another website designated by the Borrower, promptly after the sending or filing thereof, copies of all reports that the Borrower sends to any of its securityholders, and copies of all reports and registration statements that the Borrower or any Subsidiary files with the Securities and Exchange Commission or any national securities exchange;
|
(v)
|
prompt notice of the commencement of all actions and proceedings before any court, governmental agency or arbitrator affecting the Borrower or any of its Subsidiaries of the type described in Section 4.01(f); and
|
(vi)
|
such other information respecting the Borrower or any of its Subsidiaries as any Lender through the Agent may from time to time reasonably request of a material nature that may reasonably relate to the condition (financial or otherwise), operations, properties or prospects of the Borrower or the Borrower and its Subsidiaries taken as a whole.
|
(a)
|
Liens, Etc
. Create or suffer to exist, or permit any of its Subsidiaries to create or suffer to exist, any Lien on or with respect to any of its properties, whether now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any right to receive income, other than:
|
(i)
|
Permitted Liens,
|
(ii)
|
purchase money Liens upon or in any real property or equipment acquired or held by the Borrower or any Subsidiary of the Borrower in the ordinary course of business to secure the purchase price of such property or equipment or to secure Debt incurred solely for the purpose of financing the acquisition of such property or equipment (including capital leases), or Liens existing on such property or equipment at the time of its acquisition (other than any such Liens created in contemplation of such acquisition that were not incurred to finance the acquisition of such property) or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount,
provided
,
however
, that no such Lien shall extend to or cover any properties of any character other than the real property or equipment being acquired, and no such extension, renewal or replacement shall extend to or cover any properties not theretofore subject to the Lien being extended, renewed or replaced,
|
(iii)
|
the Liens existing on the date hereof and described on Schedule 5.02(a) hereto,
|
(iv)
|
Liens on property of a Person existing at the time such Person is merged into or consolidated with the Borrower or any Subsidiary of the Borrower or becomes a Subsidiary of the Borrower;
provided
that such Liens were not created in contemplation of such merger, consolidation or acquisition and do not extend to any assets other than those of the Person so merged into or consolidated with the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary,
|
(v)
|
Liens securing Debt incurred by the Borrower or its Subsidiaries in connection with a financing based on accounts receivable (including any Receivables Securitization),
|
(vi)
|
Liens on assets of a Subsidiary that is a regulated telephone company (a
"
Telco
"
) that, pursuant to the public debt indenture(s) of such Telco, are created upon the merger or conveyance or sale of all or substantially all of the assets of such Telco,
|
(vii)
|
Liens on real property securing Debt and other obligations in an aggregate principal amount not to exceed $1,000,000,000 at any time outstanding,
|
(viii)
|
other Liens securing Debt and other obligations in an aggregate principal amount not to exceed at any time outstanding 10 percent of Net Tangible Assets, and
|
(ix)
|
the replacement, extension or renewal of any Lien permitted by clause (iii) or (iv) above upon or in the same property theretofore subject thereto or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the Debt secured thereby.
|
(b)
|
Mergers, Etc
.
. Merge or consolidate with or into, or, directly or indirectly, convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, any Person.
|
(c)
|
Accounting Changes
. Make or permit, or permit any of its Subsidiaries to make or permit, any change in accounting policies or reporting practices, except as required or permitted by generally accepted accounting principles.
|
(d)
|
Sanctions and Anti-Corruption
. Request any Borrowing, nor directly or to its knowledge indirectly use the proceeds of any Borrowing, in each case (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, or (ii) in any manner that would result in the violation of any Sanctions applicable to the Borrower or its Subsidiaries or, to the knowledge of the Borrower, any other party hereto.
|
(a)
|
Failure to pay any principal of any Advance when the same becomes due and payable; or failure to pay any interest on any Advance or to make any other payment of fees or other amounts payable under this Agreement or any Note within three Business Days after the same becomes due and payable; or
|
(b)
|
Any representation or warranty made by the Borrower herein or in connection with this Agreement shall prove to have been incorrect in any material respect when made; or
|
(c)
|
(i) The Borrower shall fail to perform or observe any term, covenant or agreement applicable to it contained in Sections 5.01(d), (e) or (h), 5.02 or 5.03, or (ii) the Borrower shall fail to perform or observe any term, covenant or agreement (other than those referred to in clauses (a) and (c)(i) above) contained in this Agreement on its part to be performed or observed and such failure shall remain unremedied for 10 days after written notice thereof shall have been given to the Borrower by the Agent or any Lender; or
|
(d)
|
(i) The Borrower or any of its Subsidiaries shall fail to pay any principal of or premium or interest on any Debt that is outstanding in a principal or net amount of at least the Threshold Amount in the aggregate (but excluding Debt owing by the Borrower outstanding hereunder) of the Borrower or such Subsidiary (as the case may be), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; (ii) any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate the maturity of such Debt; or (iii) any such Debt shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof;
provided
, that, (x) the Debt subject of clause (ii) or (iii) above shall not include Debt of a Person that is merged into or consolidated with the Borrower or any Subsidiary of the Borrower or that becomes a Subsidiary of the Borrower for a period of 90 days after the date that such Debt becomes Debt of the Borrower or any of its Subsidiaries and (y) clauses (ii) and (iii) above shall not apply to any prepayment, redemption, repurchase or defeasance required to be made as a result of the obligor of such Debt making a voluntary notice of prepayment, voluntary notice of redemption, voluntary notice of repurchase, voluntary notice of defeasance or taking similar action with comparable effect; or
|
(e)
|
The Borrower or any of its Material Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its Material Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 30 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Borrower or any of its Material Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (e); or
|
(f)
|
Final and non-appealable judgments or orders for the payment of money in excess of the Threshold Amount in the aggregate shall be rendered against the Borrower or any of its Subsidiaries, 30 days shall have passed since such judgment became final and non-appealable and enforcement proceedings shall have been commenced by any creditor upon such judgment or order;
provided
,
however
, that any such judgment or order shall not be an Event of Default under this Section 6.01(f) if and for so long as (i) the amount of such judgment or order is covered by a valid and binding policy of insurance between the defendant and the insurer covering payment thereof and (ii) such insurer, which shall be rated at least "A" by A.M. Best Company, has been notified of, and has not disputed the claim made for payment of, the amount of such judgment or order; or
|
(g)
|
(i) Any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of the Borrower (or other securities convertible into such Voting Stock) representing more than 50% of the combined voting power of all Voting Stock of the Borrower; or (ii) during any period of 24 consecutive months, commencing after the date of this Agreement, individuals who at the beginning of such 24-month period were directors of the Borrower shall cease for any reason (other than due to retirement, death or disability) to constitute a majority of the Board of Directors of the Borrower (except to the extent that such individuals were replaced by individuals (x) elected by 66-2/3% of the members of the Board of Directors of the Borrower or (y) nominated for election by a majority of the members of the Board of Directors of the Borrower and thereafter elected as directors by the shareholders of the Borrower); or
|
(h)
|
The Borrower or any ERISA Affiliate shall fail to satisfy minimum funding requirements under Section 412 of the Internal Revenue Code or Section 302 of ERISA to any Plan, or apply for a waiver of such requirements, and such failure could reasonably be expected to subject the Borrower or any of its Subsidiaries to any liabilities in the aggregate in excess of the Threshold Amount;
|
(i)
|
shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
|
(ii)
|
shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein);
provided
that the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to this Agreement or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any debtor relief law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any debtor relief law; and
|
(iii)
|
shall not, except as expressly set forth herein, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Agent or any of its Affiliates in any capacity.
|
(i)
|
if to the Borrower, to it at 208 S. Akard Street, 18th Floor, Dallas, Texas 75202, Attention: Assistant Treasurer (Facsimile No. (214) 653-2578; Telephone No. (214) 757-7539; Email jk7035@att.com);
|
(ii)
|
if to the Agent, to it at The Bank of Nova Scotia, New York Agency 250 Vesey Street, New York, New York 10281, Attention of Loan Administration & Agency Services (Facsimile No. (212) 225-5709; Email:
GWSLoanOps.USAgency@scotiabank.com
; and
|
(iii)
|
if to a Lender, to it at its address (or facsimile number) set forth in its Administrative Questionnaire.
|
(i)
|
The Borrower agrees that the Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the
"
Platform
"
).
|
(ii)
|
The Platform is provided
"
as is
"
and
"
as available.
"
The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Agent or any of its Related Parties or the Arranger or any of its Related Parties (collectively, the
"
Agent Parties
"
) have any liability to the Borrower, any Lender or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower
'
s or the Agent
'
s transmission of communications through the Platform.
"
Communications
"
means, collectively, any notice, demand, communication, information, document or other material that the Borrower provides to the Agent pursuant to this Agreement or the transactions contemplated herein which is distributed to the Agent any Lender by means of electronic communications pursuant to this Section, including through the Platform.
|
(i)
|
Minimum Amounts.
|
(A)
|
in the case of an assignment of the entire remaining amount of the assigning Lender
'
s Appropriate Commitment and/or the Advances at the time owing to it thereunder or contemporaneous assignments to related Approved Funds that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
|
(B)
|
in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Appropriate Commitment (which for this purpose includes Advances outstanding thereunder) or, if the applicable Appropriate Commitment is not then in effect, the principal outstanding balance of the Advances thereunder of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Agent or, if
"
Trade Date
"
is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $10,000,000, unless each of the Agent and, so long as no Event of Default under Section 6.01(a) or 6.01(e) has occurred and is continuing, the Borrower otherwise consents (such consent not to be unreasonably withheld or delayed).
|
(ii)
|
Proportionate Amounts
. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender
'
s rights and obligations under this Agreement with respect to the Advances and/or the Commitment assigned.
|
(iii)
|
Required Consents
. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:
|
(A)
|
the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless:
|
(B)
|
the consent of the Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Commitments or Advances if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender.
|
(iv)
|
Assignment and Assumption
. The parties to each assignment shall execute and deliver to the Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500;
provided
that the Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment
.
The assignee, if it is not a Lender, shall deliver to the Agent an Administrative Questionnaire. The Agent shall notify the Borrower of each Assignment and Assumption within three Business Days of receipt thereof.
|
(v)
|
No Assignment to Certain Persons
. No such assignment shall be made to (A) the Borrower or any of the Borrower
'
s Affiliates or Subsidiaries or (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).
|
(vi)
|
No Assignment to Natural Persons
. No such assignment shall be made to a natural Person.
|
(vii)
|
Certain Additional Payments
. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations, or other compensating actions, including funding, with the consent of the Borrower and the Agent, the applicable pro rata share of Advances previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Agent and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Advances in respect of any relevant Facility in accordance with its Appropriate Commitment. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
|
(a)
|
the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
|
(b)
|
the effects of any Bail-In Action on any such liability, including, if applicable:
|
(i)
|
a reduction in full or in part or cancellation of any such liability;
|
(ii)
|
a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement; or the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.
|
AT&T INC. |
|
By |
Name: Title: |
By |
Name: Title: |
By |
Name: Title: |
By |
Name: Title: |
By |
Name: Title: |
By |
Name: Title: |
By |
Name: Title: |
By |
Name: Title: |
By |
Name: Title: |
EXHIBIT 12
|
||||||||||||||||||||||
AT&T INC.
|
||||||||||||||||||||||
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
|
||||||||||||||||||||||
Dollars in Millions
|
||||||||||||||||||||||
Nine Months Ended
|
||||||||||||||||||||||
September 30,
|
Year Ended December 31,
|
|||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||
2017
|
2016
|
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
Earnings:
|
||||||||||||||||||||||
Income from continuing operations before income taxes
|
$
|
16,422
|
$
|
16,621
|
$
|
19,812
|
$
|
20,692
|
$
|
10,355
|
$
|
28,050
|
$
|
10,496
|
||||||||
Equity in net loss (income) of affiliates included above
|
148
|
(57)
|
(98)
|
(79)
|
(175)
|
(642)
|
(752)
|
|||||||||||||||
Fixed charges
|
6,235
|
5,465
|
7,296
|
6,592
|
5,295
|
5,452
|
4,876
|
|||||||||||||||
Distributed income of equity affiliates
|
22
|
35
|
61
|
30
|
148
|
318
|
137
|
|||||||||||||||
Interest capitalized
|
(718)
|
(669)
|
(892)
|
(797)
|
(234)
|
(284)
|
(263)
|
|||||||||||||||
Earnings, as adjusted
|
$
|
22,109
|
$
|
21,395
|
$
|
26,179
|
$
|
26,438
|
$
|
15,389
|
$
|
32,894
|
$
|
14,494
|
||||||||
Fixed Charges:
|
||||||||||||||||||||||
Interest expense
|
$
|
4,374
|
$
|
3,689
|
$
|
4,910
|
$
|
4,120
|
$
|
3,613
|
$
|
3,940
|
$
|
3,444
|
||||||||
Interest capitalized
|
718
|
669
|
892
|
797
|
234
|
284
|
263
|
|||||||||||||||
Portion of rental expense representative of interest factor
|
1,143
|
1,107
|
1,494
|
1,675
|
1,448
|
1,228
|
1,169
|
|||||||||||||||
Fixed Charges
|
$
|
6,235
|
$
|
5,465
|
$
|
7,296
|
$
|
6,592
|
$
|
5,295
|
$
|
5,452
|
$
|
4,876
|
||||||||
Ratio of Earnings to Fixed Charges
|
3.55
|
3.91
|
3.59
|
4.01
|
2.91
|
6.03
|
2.97
|
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.
|
November 3, 2017 |
November 3, 2017
|
By: /s/ Randall Stephenson |
By:
/s/ John J. Stephens
|
Randall Stephenson |
John J. Stephens
|
Chairman of the Board, Chief Executive Officer |
Senior Executive Vice President
|
and President |
and Chief Financial Officer
|