Stock Analysis on Net
Stock Analysis on Net
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AT&T Inc. (NYSE:T)

Analysis of Income Taxes

Advanced level

Income Tax Expense (Benefit)

AT&T Inc., income tax expense (benefit), continuing operations

US$ in millions

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12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Federal 584  3,258  682  2,915  2,496 
State and local 603  513  79  282  72 
Foreign 605  539  471  335  320 
Current 1,792  4,310  1,232  3,532  2,888 
Federal 1,656  277  (17,970) 3,127  3,828 
State and local 144  473  1,041  339  671 
Foreign (99) (140) 989  (519) (382)
Deferred 1,701  610  (15,940) 2,947  4,117 
Income tax expense (benefit) 3,493  4,920  (14,708) 6,479  7,005 

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. AT&T Inc.’s current increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. AT&T Inc.’s deferred increased from 2017 to 2018 and from 2018 to 2019.
Income tax expense (benefit) Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. AT&T Inc.’s income tax expense (benefit) increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Effective Income Tax Rate (EITR)

AT&T Inc., effective income tax rate (EITR) reconciliation

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Statutory federal income tax rate 21.00% 21.00% 35.00% 35.00% 35.00%
Effective tax rate, before enactment date and measurement period adjustments from the Act 18.90% 22.70% 36.80% 32.70% 33.90%
Effective tax rate 18.90% 19.80% -97.20% 32.70% 33.90%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

Item Description The company
Effective tax rate, before enactment date and measurement period adjustments from the Act Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. AT&T Inc.’s effective tax rate, before enactment date and measurement period adjustments from the Act decreased from 2017 to 2018 and from 2018 to 2019.

Components of Deferred Tax Assets and Liabilities

AT&T Inc., components of deferred tax assets and liabilities

US$ in millions

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Depreciation and amortization (44,896) (43,105) (30,982) (44,903) (59,879)
Licenses and nonamortizable intangibles (17,355) (17,561) (16,129) (22,892) (6,920)
Employee benefits 5,143  5,366  6,202  10,045  10,517 
Deferred fulfillment costs (3,050) (2,679) (2,472) (3,204) (2,172)
Net operating loss and other carryforwards 7,301  6,470  6,067  4,304  4,029 
Other, net (1,536) (1,651) (1,222) 216  1,478 
Subtotal (54,393) (53,160) (38,536) (56,434) (52,947)
Deferred tax assets valuation allowance (4,941) (4,588) (4,640) (2,283) (2,141)
Net deferred tax assets (liabilities) (59,334) (57,748) (43,176) (58,717) (55,088)

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

Item Description The company
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. AT&T Inc.’s net deferred tax assets (liabilities) decreased from 2017 to 2018 and from 2018 to 2019.

Deferred Tax Assets and Liabilities, Classification

AT&T Inc., deferred tax assets and liabilities, classification

US$ in millions

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Noncurrent deferred tax assets 168  111  31  1,411  1,093 
Noncurrent deferred tax liabilities 59,502  57,859  43,207  60,128  56,181 

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

Item Description The company
Noncurrent deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. AT&T Inc.’s noncurrent deferred tax assets increased from 2017 to 2018 and from 2018 to 2019.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. AT&T Inc.’s noncurrent deferred tax liabilities increased from 2017 to 2018 and from 2018 to 2019.

Adjustments to Financial Statements: Removal of Deferred Taxes

AT&T Inc., adjustments to financial statements

US$ in millions

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported) 551,669  531,864  444,097  403,821  402,672 
Less: Noncurrent deferred tax assets, net 168  111  31  1,411  1,093 
Total assets (adjusted) 551,501  531,753  444,066  402,410  401,579 
Adjustment to Total Liabilities
Total liabilities (as reported) 349,735  337,980  302,090  279,711  279,032 
Less: Noncurrent deferred tax liabilities, net 59,502  57,859  43,207  60,128  56,181 
Total liabilities (adjusted) 290,233  280,121  258,883  219,583  222,851 
Adjustment to Stockholders’ Equity Attributable To AT&T
Stockholders’ equity attributable to AT&T (as reported) 184,221  184,089  140,861  123,135  122,671 
Less: Net deferred tax assets (liabilities) (59,334) (57,748) (43,176) (58,717) (55,088)
Stockholders’ equity attributable to AT&T (adjusted) 243,555  241,837  184,037  181,852  177,759 
Adjustment to Net Income Attributable To AT&T
Net income attributable to AT&T (as reported) 13,903  19,370  29,450  12,976  13,345 
Add: Deferred income tax expense (benefit) 1,701  610  (15,940) 2,947  4,117 
Net income attributable to AT&T (adjusted) 15,604  19,980  13,510  15,923  17,462 

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).


AT&T Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

AT&T Inc., adjusted financial ratios

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net Profit Margin
Reported net profit margin 7.67% 11.34% 18.34% 7.92% 9.09%
Adjusted net profit margin 8.61% 11.70% 8.42% 9.72% 11.90%
Total Asset Turnover
Reported total asset turnover 0.33 0.32 0.36 0.41 0.36
Adjusted total asset turnover 0.33 0.32 0.36 0.41 0.37
Financial Leverage
Reported financial leverage 2.99 2.89 3.15 3.28 3.28
Adjusted financial leverage 2.26 2.20 2.41 2.21 2.26
Return on Equity (ROE)
Reported ROE 7.55% 10.52% 20.91% 10.54% 10.88%
Adjusted ROE 6.41% 8.26% 7.34% 8.76% 9.82%
Return on Assets (ROA)
Reported ROA 2.52% 3.64% 6.63% 3.21% 3.31%
Adjusted ROA 2.83% 3.76% 3.04% 3.96% 4.35%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. AT&T Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. AT&T Inc.’s adjusted total asset turnover ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
AT&T Inc.’s adjusted financial leverage ratio decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. AT&T Inc.’s adjusted ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. AT&T Inc.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

AT&T Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to AT&T 13,903  19,370  29,450  12,976  13,345 
Operating revenues 181,193  170,756  160,546  163,786  146,801 
Profitability Ratio
Net profit margin1 7.67% 11.34% 18.34% 7.92% 9.09%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to AT&T 15,604  19,980  13,510  15,923  17,462 
Operating revenues 181,193  170,756  160,546  163,786  146,801 
Profitability Ratio
Adjusted net profit margin2 8.61% 11.70% 8.42% 9.72% 11.90%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

2019 Calculations

1 Net profit margin = 100 × Net income attributable to AT&T ÷ Operating revenues
= 100 × 13,903 ÷ 181,193 = 7.67%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to AT&T ÷ Operating revenues
= 100 × 15,604 ÷ 181,193 = 8.61%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. AT&T Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

Adjusted Total Asset Turnover

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Operating revenues 181,193  170,756  160,546  163,786  146,801 
Total assets 551,669  531,864  444,097  403,821  402,672 
Activity Ratio
Total asset turnover1 0.33 0.32 0.36 0.41 0.36
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Operating revenues 181,193  170,756  160,546  163,786  146,801 
Adjusted total assets 551,501  531,753  444,066  402,410  401,579 
Activity Ratio
Adjusted total asset turnover2 0.33 0.32 0.36 0.41 0.37

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

2019 Calculations

1 Total asset turnover = Operating revenues ÷ Total assets
= 181,193 ÷ 551,669 = 0.33

2 Adjusted total asset turnover = Operating revenues ÷ Adjusted total assets
= 181,193 ÷ 551,501 = 0.33

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. AT&T Inc.’s adjusted total asset turnover ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 551,669  531,864  444,097  403,821  402,672 
Stockholders’ equity attributable to AT&T 184,221  184,089  140,861  123,135  122,671 
Solvency Ratio
Financial leverage1 2.99 2.89 3.15 3.28 3.28
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 551,501  531,753  444,066  402,410  401,579 
Adjusted stockholders’ equity attributable to AT&T 243,555  241,837  184,037  181,852  177,759 
Solvency Ratio
Adjusted financial leverage2 2.26 2.20 2.41 2.21 2.26

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

2019 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity attributable to AT&T
= 551,669 ÷ 184,221 = 2.99

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity attributable to AT&T
= 551,501 ÷ 243,555 = 2.26

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
AT&T Inc.’s adjusted financial leverage ratio decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Adjusted Return on Equity (ROE)

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to AT&T 13,903  19,370  29,450  12,976  13,345 
Stockholders’ equity attributable to AT&T 184,221  184,089  140,861  123,135  122,671 
Profitability Ratio
ROE1 7.55% 10.52% 20.91% 10.54% 10.88%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to AT&T 15,604  19,980  13,510  15,923  17,462 
Adjusted stockholders’ equity attributable to AT&T 243,555  241,837  184,037  181,852  177,759 
Profitability Ratio
Adjusted ROE2 6.41% 8.26% 7.34% 8.76% 9.82%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

2019 Calculations

1 ROE = 100 × Net income attributable to AT&T ÷ Stockholders’ equity attributable to AT&T
= 100 × 13,903 ÷ 184,221 = 7.55%

2 Adjusted ROE = 100 × Adjusted net income attributable to AT&T ÷ Adjusted stockholders’ equity attributable to AT&T
= 100 × 15,604 ÷ 243,555 = 6.41%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. AT&T Inc.’s adjusted ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to AT&T 13,903  19,370  29,450  12,976  13,345 
Total assets 551,669  531,864  444,097  403,821  402,672 
Profitability Ratio
ROA1 2.52% 3.64% 6.63% 3.21% 3.31%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to AT&T 15,604  19,980  13,510  15,923  17,462 
Adjusted total assets 551,501  531,753  444,066  402,410  401,579 
Profitability Ratio
Adjusted ROA2 2.83% 3.76% 3.04% 3.96% 4.35%

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-18).

2019 Calculations

1 ROA = 100 × Net income attributable to AT&T ÷ Total assets
= 100 × 13,903 ÷ 551,669 = 2.52%

2 Adjusted ROA = 100 × Adjusted net income attributable to AT&T ÷ Adjusted total assets
= 100 × 15,604 ÷ 551,501 = 2.83%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. AT&T Inc.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.