Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

AT&T Inc. (NYSE:T)

Analysis of Operating Leases

Advanced level

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.


Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

AT&T Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total undiscounted future operating lease payments 27,594  25,928  29,657  28,845 
Discount rate1 4.40% 4.40% 4.20% 4.00%
 
Total present value of future operating lease payments 23,039  21,576  24,373  23,869 

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).

1 Weighted-average interest rate for AT&T Inc.’s debt

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 4.40%
2019 4,361  2019 4,361  4,177 
2020 4,046  2020 4,046  3,712 
2021 3,558  2021 3,558  3,127 
2022 3,253  2022 3,253  2,738 
2023 2,836  2023 2,836  2,287 
2024 and thereafter 9,540  2024 2,836  2,190 
2025 2,836  2,098 
2026 2,836  2,010 
2027 1,032  700 
Total: 27,594  27,594  23,039 

Based on: 10-K (filing date: 2019-02-20).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 4.40%
2018 3,945  2018 3,945  3,779 
2019 3,686  2019 3,686  3,382 
2020 3,414  2020 3,414  3,000 
2021 2,968  2021 2,968  2,498 
2022 2,659  2022 2,659  2,144 
2023 and thereafter 9,256  2023 2,659  2,054 
2024 2,659  1,967 
2025 2,659  1,884 
2026 1,279  868 
Total: 25,928  25,928  21,576 

Based on: 10-K (filing date: 2018-02-20).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 4.20%
2017 3,915  2017 3,915  3,757 
2018 3,706  2018 3,706  3,413 
2019 3,448  2019 3,448  3,048 
2020 3,208  2020 3,208  2,721 
2021 2,811  2021 2,811  2,288 
2022 and thereafter 12,569  2022 2,811  2,196 
2023 2,811  2,108 
2024 2,811  2,023 
2025 2,811  1,941 
2026 1,325  878 
Total: 29,657  29,657  24,373 

Based on: 10-K (filing date: 2017-02-17).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 4.00%
2016 3,775  2016 3,775  3,630 
2017 3,551  2017 3,551  3,283 
2018 3,257  2018 3,257  2,895 
2019 3,003  2019 3,003  2,567 
2020 2,771  2020 2,771  2,278 
2021 and thereafter 12,488  2021 2,771  2,190 
2022 2,771  2,106 
2023 2,771  2,025 
2024 2,771  1,947 
2025 1,404  948 
Total: 28,845  28,845  23,869 

Based on: 10-K (filing date: 2016-02-18).


Adjustments to Financial Statements for Operating Leases

AT&T Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
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 
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 —  23,039  21,576  24,373  23,869 
Total assets (adjusted) 551,669  554,903  465,673  428,194  426,541 
Adjustment to Total Debt
Total debt (as reported) 163,147  176,505  164,346  123,513  126,151 
Add: Operating lease liability (before adoption of FASB Topic 842)2 —  23,039  21,576  24,373  23,869 
Add: Current operating lease obligation (included in Accounts payable and accrued liabilities) 3,451  —  —  —  — 
Add: Noncurrent operating lease liabilities 21,804  —  —  —  — 
Total debt (adjusted) 188,402  199,544  185,922  147,886  150,020 

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).

1, 2 Equal to total present value of future operating lease payments.


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


Adjusted Financial Ratios for Operating Leases (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
Total Asset Turnover1
Reported total asset turnover 0.33 0.32 0.36 0.41 0.36
Adjusted total asset turnover 0.33 0.31 0.34 0.38 0.34
Debt to Equity2
Reported debt to equity 0.89 0.96 1.17 1.00 1.03
Adjusted debt to equity 1.02 1.08 1.32 1.20 1.22
Return on Assets3 (ROA)
Reported ROA 2.52% 3.64% 6.63% 3.21% 3.31%
Adjusted ROA 2.52% 3.49% 6.32% 3.03% 3.13%

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 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 improved from 2018 to 2019 not reaching 2017 level.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. AT&T Inc.’s adjusted debt to equity ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. AT&T Inc.’s adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019.

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


Adjusted Total Asset Turnover

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)
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 Operating Leases
Selected Financial Data (US$ in millions)
Operating revenues 181,193  170,756  160,546  163,786  146,801 
Adjusted total assets 551,669  554,903  465,673  428,194  426,541 
Activity Ratio
Adjusted total asset turnover2 0.33 0.31 0.34 0.38 0.34

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 ÷ 551,669 = 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 improved from 2018 to 2019 not reaching 2017 level.

Adjusted Debt to Equity

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 debt 163,147  176,505  164,346  123,513  126,151 
Stockholders’ equity attributable to AT&T 184,221  184,089  140,861  123,135  122,671 
Solvency Ratio
Debt to equity1 0.89 0.96 1.17 1.00 1.03
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 188,402  199,544  185,922  147,886  150,020 
Stockholders’ equity attributable to AT&T 184,221  184,089  140,861  123,135  122,671 
Solvency Ratio
Adjusted debt to equity2 1.02 1.08 1.32 1.20 1.22

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 Debt to equity = Total debt ÷ Stockholders’ equity attributable to AT&T
= 163,147 ÷ 184,221 = 0.89

2 Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity attributable to AT&T
= 188,402 ÷ 184,221 = 1.02

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. AT&T Inc.’s adjusted debt-to-equity ratio improved from 2017 to 2018 and 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 Operating Leases
Selected Financial Data (US$ in millions)
Net income attributable to AT&T 13,903  19,370  29,450  12,976  13,345 
Adjusted total assets 551,669  554,903  465,673  428,194  426,541 
Profitability Ratio
Adjusted ROA2 2.52% 3.49% 6.32% 3.03% 3.13%

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 × Net income attributable to AT&T ÷ Adjusted total assets
= 100 × 13,903 ÷ 551,669 = 2.52%

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