AT&T To Record $1 Billion Charge After Lowering Discount Rates For Pension Obligations

By Tomi KilgoreMarketsMarketWatch Pulse

AT&T Inc. disclosed Friday that it expects to record a $1 billion fourth-quarter non-cash charge following a remeasurement of its pension and postemployment benefit plans. The telecom giant said a $3 billion loss was generated after it lowered on Dec. 31 the assumed discount rates for pension obligations to 4.4% from 4.6% and for postretirement obligations to 4.3% from 4.5%. The loss was largely offset by gains related to a "better than assumed claims experience," higher-than-expected asset returns and changes in demographics, mortality and other assumptions. Separately, the company said it plans to report in its fourth-quarter results more than 900,000 branded net subscriber adds, with more than 1.2 million wireless net adds in Mexico. The stock, which was unchanged in premarket trade, has run up 21% over the past 12 months while the S&P 500 has climbed 22%.

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