2011 at&T Financial Statement Analysis

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AT&T Inc.

Financial Analysis Report

BUS 624 Professor Shirley Daniels 25 March 2012

Group 5

1. VU Hong Hanh 2. LE Thi My Hanh 3. DINH Duc Thang 4. VU Ngoc Bien 5. NGUYEN Thi Thu Thuy

TABLE OF CONTENTS

1 2 3 3.1 3.2 3.3 3.4 3.5 3.6

INTRODUCTION OF AT&T.....................................................................................3 FINANCIAL ANALYSIS OF AT&T .............................................................................4 IN-DEPTH ANALYSIS OF AT&T............................................................................. 11 Reporting and Analyzing Operating Income ............................................... 11 Reporting and Analyzing Operating Assets ................................................. 12 Reporting and Analyzing Intercorporate Investments ................................. 14 Reporting and Analyzing Nonowner Financing ........................................... 15 Reporting and Analyzing Owner Financing ................................................. 17 Reporting and Analyzing Off-Balance Sheet Financing .............................. 18

1

1. INTRODUCTION OF AT&T
Company Profile

Products

Key Facts

Wireless services (AT&T is also the brand name used for the company's mobile service) Data Voice Directory (yellow pages) Other value added services The largest telecom operator in the world by revenue The leader in high telecom technology - serving 4G to mass users Offering one of the world's most advanced and powerful global backbone networks, carrying 28.9 petabytes of data traffic Offering voice coverage in more than 225 countries, data roaming in more than 205 countries and mobile broadband in more than 145 countries Managing the nation's largest Wi-Fi network: nearly 29,000 AT&T Wi-Fi Hot Spots, including locations in all 50 states, and access to more than 190,000 hot spots around the globe. Publishers and distributor of more than 1,200 AT&T Real Yellow Pages titles annually

2

2. FINANCIAL ANALYSIS OF AT&T
Current Market Info. Company: Listed on: Stock Performance: 52-week High: 52-week Low: Market Cap.: Sources: Yahoo Finance

AT&T Inc. (T) NYSE US$ 31.44/share (as of 12 Mar 2012) US$ 31.94 US$ 27.27 US$ 187.28 Bn (as of 12 Mar 2012)

Beside

from preserving its

position as one of the top telecom services providers in the US by offering high quality services and diversified products, AT&T has also been proving its other competitive

advantages on the financial market. AT&T is publicly traded on the New York Stock Exchange (NYSE). The company has been holding the #1 ranking in market capitalization compared to 26 other companies in the same industry. AT&T financial report shows many optimistic signs on the company’s financial strength. In this analysis, the comparison will only be between AT&T, Sprint, and Verizon. The reason is because Sprint and Verizon are considered as the direct competitors as these 3 companies have the most similar product line: mobile service, data, and voice. On a global level, there are a lot of compatible rivals to conduct the analysis such as Vodafone (UK), France Telecom (France), China Telecom (China), SingTel (Singapore), etc. Unfortunately, those players are listed on other stock exchange and full required information was not able to obtain for the best evaluation result. Therefore, only Verizon and Sprint were selected. REVENUES Revenues of the company are combined mainly by 5 products: wireless service, data, voice, and directory. Wireless service is the main component in AT&T’s revenues, accounted for 44.7% of total 2011 revenues. Although in 2007, data service was slightly ahead of wireless, by 2008, this service really picked up and has been the biggest contribution to overall achievement of the company in the past 4 years. Data and voice, which are the traditional telecom services, are next in line and contributed 23.36% and 19.83% to the total revenues in 2011 respectively. Directory is only...
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