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Analysis of Investments

Difficulty: Advanced


Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

AT&T Inc., adjustment to Net Income Attributable To AT&T

USD $ in millions

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12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net income attributable to AT&T (as reported) 29,450  12,976  13,345  6,224  18,249 
Add: Available-for-sale securities 57  (15) 48  178 
Net income attributable to AT&T (adjusted) 29,452  13,033  13,330  6,272  18,427 

Adjusted Ratios: Mark to Market Available-for-sale Securities (Summary)

AT&T Inc., adjusted ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net Profit Margin
Reported net profit margin 18.34% 7.92% 9.09% 4.70% 14.17%
Adjusted net profit margin 18.34% 7.96% 9.08% 4.74% 14.31%
Return on Equity (ROE)
Reported ROE 20.91% 10.54% 10.88% 7.21% 20.06%
Adjusted ROE 20.91% 10.58% 10.87% 7.26% 20.25%
Return on Assets (ROA)
Reported ROA 6.63% 3.21% 3.31% 2.13% 6.57%
Adjusted ROA 6.63% 3.23% 3.31% 2.14% 6.63%
Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. AT&T Inc.'s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders' equity. AT&T Inc.'s adjusted ROE deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. AT&T Inc.'s adjusted ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Net income attributable to AT&T (USD $ in millions) 29,450  12,976  13,345  6,224  18,249 
Operating revenues (USD $ in millions) 160,546  163,786  146,801  132,447  128,752 
Net profit margin1 18.34% 7.92% 9.09% 4.70% 14.17%
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net income attributable to AT&T (USD $ in millions) 29,452  13,033  13,330  6,272  18,427 
Operating revenues (USD $ in millions) 160,546  163,786  146,801  132,447  128,752 
Adjusted net profit margin2 18.34% 7.96% 9.08% 4.74% 14.31%

2017 Calculations

1 Net profit margin = 100 × Net income attributable to AT&T ÷ Operating revenues
= 100 × 29,450 ÷ 160,546 = 18.34%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to AT&T ÷ Operating revenues
= 100 × 29,452 ÷ 160,546 = 18.34%

Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. AT&T Inc.'s adjusted net profit margin deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Net income attributable to AT&T (USD $ in millions) 29,450  12,976  13,345  6,224  18,249 
Stockholders' equity attributable to AT&T (USD $ in millions) 140,861  123,135  122,671  86,370  90,988 
ROE1 20.91% 10.54% 10.88% 7.21% 20.06%
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net income attributable to AT&T (USD $ in millions) 29,452  13,033  13,330  6,272  18,427 
Stockholders' equity attributable to AT&T (USD $ in millions) 140,861  123,135  122,671  86,370  90,988 
Adjusted ROE2 20.91% 10.58% 10.87% 7.26% 20.25%

2017 Calculations

1 ROE = 100 × Net income attributable to AT&T ÷ Stockholders' equity attributable to AT&T
= 100 × 29,450 ÷ 140,861 = 20.91%

2 Adjusted ROE = 100 × Adjusted net income attributable to AT&T ÷ Stockholders' equity attributable to AT&T
= 100 × 29,452 ÷ 140,861 = 20.91%

Ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders' equity. AT&T Inc.'s adjusted ROE deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
As Reported
Net income attributable to AT&T (USD $ in millions) 29,450  12,976  13,345  6,224  18,249 
Total assets (USD $ in millions) 444,097  403,821  402,672  292,829  277,787 
ROA1 6.63% 3.21% 3.31% 2.13% 6.57%
Adjusted: Mark to Market Available-for-sale Securities
Adjusted net income attributable to AT&T (USD $ in millions) 29,452  13,033  13,330  6,272  18,427 
Total assets (USD $ in millions) 444,097  403,821  402,672  292,829  277,787 
Adjusted ROA2 6.63% 3.23% 3.31% 2.14% 6.63%

2017 Calculations

1 ROA = 100 × Net income attributable to AT&T ÷ Total assets
= 100 × 29,450 ÷ 444,097 = 6.63%

2 Adjusted ROA = 100 × Adjusted net income attributable to AT&T ÷ Total assets
= 100 × 29,452 ÷ 444,097 = 6.63%

Ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. AT&T Inc.'s adjusted ROA deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.