Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Analysis of Debt
- Aggregate Accruals
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Economic Profit
AT&T Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial data reveals significant fluctuations in several key performance indicators across the reviewed periods, indicating volatility in operational efficiency and capital management.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibits considerable variation over the years. It reached its peak value in 2021 at 32,698 million US dollars, followed by a steep decline to 1,500 million US dollars in 2022. Subsequently, there was a recovery to 22,742 million in 2023, with a slight decrease to 18,826 million in 2024. This pattern reflects substantial operational performance volatility, with notable recovery after a sharp downturn.
- Cost of Capital
- The cost of capital has fluctuated within a narrow range, starting at 7.59% in 2020, decreasing to 6.93% in 2021, then increasing to 7.52% in 2022, slightly dropping again to 7.21% in 2023, and finally rising to 8.39% in 2024. The increase in the cost of capital in the final period suggests a higher required return by investors or higher financing costs.
- Invested Capital
- Invested capital shows a decreasing trend over the five years. It grew from 412,041 million US dollars in 2020 to 439,195 million in 2021, then dropped sharply to 309,447 million in 2022. Following a moderate increase to 326,144 million in 2023, it declined again to 314,065 million in 2024. The reduction in invested capital may indicate a strategic divestment, asset optimization, or reduced investment in capital assets.
- Economic Profit
- The economic profit illustrates a challenging profitability environment, with negative values in most years. It was at -26,780 million US dollars in 2020 before improving to a positive 2,275 million in 2021. The metric returned to negative territory in 2022 with -21,776 million, then improved slightly to -767 million in 2023 but worsened again to -7,522 million in 2024. This persistent negative economic profit, except for a brief positive spike, indicates that the company has struggled to generate returns exceeding its cost of capital during the majority of the analyzed periods.
Overall, the data reflects a period of operational and financial instability characterized by sharp fluctuations in profitability and invested capital levels, a generally stable yet slightly increasing cost of capital, and challenges in creating economic value consistently across the reviewed years.
Net Operating Profit after Taxes (NOPAT)
AT&T Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit loss.
3 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to AT&T.
4 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
6 Addition of after taxes interest expense to net income (loss) attributable to AT&T.
7 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
8 Elimination of after taxes investment income.
9 Elimination of discontinued operations.
The financial data indicates notable fluctuations in profitability metrics over the five-year period.
- Net Income (Loss) Attributable to the Company
- The net income demonstrates significant volatility, beginning with a substantial loss of approximately 5,176 million US dollars at the end of 2020. This is followed by a sharp turnaround in 2021, with net income reaching an impressive 20,081 million US dollars. However, this positive result was not sustained, as net income reverted to a loss of around 8,524 million in 2022. Subsequently, the company recovered again with net income of 14,400 million in 2023, before experiencing a moderate decline to 10,948 million in 2024. The pattern suggests a cyclical or event-driven influence on profitability, with pronounced peaks and troughs.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibits a similar pattern of fluctuations, though trends show a stronger positive trajectory post-2020. Starting from 4,489 million in 2020, there was a notable surge to 32,698 million in 2021, reaching the peak value within the dataset. A sharp drop to 1,500 million follows in 2022, indicating substantial operational or performance challenges. Recovery is evident thereafter, with NOPAT climbing back to 22,742 million in 2023 and slightly declining to 18,826 million in 2024. These variations highlight periods of operational strength and weakness, indicating potential impacts from market conditions, restructuring, or other internal and external factors affecting operating efficiency and profitability.
Overall, both net income and NOPAT metrics reflect high volatility but suggest a capacity for rapid recovery following downturns. Despite these fluctuations, the company managed to maintain generally positive operating profitability from 2021 onwards, although net income was less consistent. The downward adjustments in the latest year indicate caution and emphasize the need to monitor ongoing financial performance and underlying factors driving the variability.
Cash Operating Taxes
AT&T Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Income Tax Expense
- The income tax expense shows a marked increase from 965 million US dollars in 2020 to a peak of 5,468 million US dollars in 2021. This sharp rise is followed by a decline to 3,780 million US dollars in 2022. Subsequently, the tax expense exhibits a gradual increase over the next two periods, reaching 4,445 million US dollars by the end of 2024. Overall, the trend highlights significant volatility with an initial surge, a drop, and then stabilization at a relatively high level compared to the starting point.
- Cash Operating Taxes
- Cash operating taxes present a steady upward trajectory throughout the analyzed period. The values begin at 1,602 million US dollars in 2020 and remain relatively stable into 2021 at 1,603 million US dollars. After this point, there is a substantial increase to 2,134 million US dollars in 2022, followed by a pronounced rise to 4,298 million US dollars in 2023 and further growth to 5,277 million US dollars in 2024. This consistent increase indicates growing cash tax payments, potentially reflecting heightened operational profitability or changes in tax regulation or payment timing.
- Comparative Observation
- Comparing both items, cash operating taxes have increased consistently every year following a plateau in the first two years, whereas income tax expense has shown more fluctuation. The disparity between income tax expense and cash operating taxes narrows over time, especially from 2023 onwards, suggesting a possible alignment between reported tax expenses and actual cash tax outflows in the most recent periods.
Invested Capital
AT&T Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of equity equivalents to stockholders’ equity attributable to AT&T.
5 Removal of accumulated other comprehensive income.
6 Subtraction of under construction.
7 Subtraction of investment securities.
- Total reported debt & leases
-
The total reported debt and leases showed an initial increase from 182,984 million USD in 2020 to 202,321 million USD in 2021, reflecting a rising leverage or financing need in that period. Subsequently, there was a marked decline to 158,096 million USD in 2022, which remained relatively stable in 2023 at 158,423 million USD before continuing to decrease to 144,456 million USD by the end of 2024. The overall trend from 2021 to 2024 indicates a strategic reduction in debt obligations, potentially aimed at deleveraging and improving financial stability.
- Stockholders’ equity attributable to AT&T
-
Stockholders' equity attributable to the company gradually increased from 161,673 million USD in 2020 to 166,332 million USD in 2021. However, a significant drop occurred in 2022, bringing equity down to 97,500 million USD. Following this decline, there was a modest recovery to 103,297 million USD in 2023 and a slight increase to 104,372 million USD in 2024. This decline in 2022 could signify a major event such as restructuring, asset revaluation, or other factors impacting retained earnings or equity components, with partial recovery in the subsequent years.
- Invested capital
-
Invested capital exhibited an upward trajectory from 412,041 million USD in 2020 to 439,195 million USD in 2021, suggesting an increase in capital investment or assets employed in operations. However, this was followed by a notable decrease to 309,447 million USD in 2022, partly recovering to 326,144 million USD in 2023 before decreasing again to 314,065 million USD in 2024. The fluctuations in invested capital closely mirror the changes in equity, indicating possible asset disposals, changes in working capital, or other operational adjustments that influenced the capital base over the period.
Cost of Capital
AT&T Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 5.000% Perpetual Preferred Stock, Series A | ÷ | = | × | = | |||||||||
| 4.750% Perpetual Preferred Stock, Series C | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 5.000% Perpetual Preferred Stock, Series A | ÷ | = | × | = | |||||||||
| 4.750% Perpetual Preferred Stock, Series C | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 5.000% Perpetual Preferred Stock, Series A | ÷ | = | × | = | |||||||||
| 4.750% Perpetual Preferred Stock, Series C | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 5.000% Perpetual Preferred Stock, Series A | ÷ | = | × | = | |||||||||
| 4.750% Perpetual Preferred Stock, Series C | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 5.000% Perpetual Preferred Stock, Series A | ÷ | = | × | = | |||||||||
| 4.750% Perpetual Preferred Stock, Series C | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
AT&T Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit exhibited notable fluctuations over the years. It was significantly negative in 2020 at -26,780 million US dollars, turned positive in 2021 with a modest profit of 2,275 million US dollars, then declined again substantially to -21,776 million US dollars in 2022. The economic profit showed some improvement in 2023, decreasing the loss to -767 million US dollars, but worsened again in 2024 to -7,522 million US dollars. This pattern indicates inconsistency and volatility in value creation over the observed period.
- Invested Capital
- Invested capital increased from 412,041 million US dollars in 2020 to a peak of 439,195 million US dollars in 2021. Subsequently, it declined sharply to 309,447 million US dollars in 2022. Following this decline, the invested capital showed slight increases and decreases, registering 326,144 million US dollars in 2023 and then decreasing again to 314,065 million US dollars in 2024. Overall, invested capital appears to have undergone a sizable reduction after 2021 but stabilized somewhat in the last two years.
- Economic Spread Ratio
- The economic spread ratio, which reflects the difference between return on invested capital and cost of capital, followed a similar volatile trajectory. Starting at a negative -6.5% in 2020, it recovered slightly to a positive 0.52% in 2021. However, it declined again to -7.04% in 2022, showing a considerable deterioration in the economic efficiency of invested capital. Afterward, it improved somewhat, remaining close to zero at -0.24% in 2023 but deteriorated again to -2.4% in 2024. This pattern suggests challenges in generating returns above the cost of capital throughout most of the period.
- Summary Insights
- Overall, the data reveals a pattern of economic profit and spread ratios fluctuating significantly, with positive performance only observed briefly in 2021. Invested capital peaked in 2021 but was then reduced substantially, potentially reflecting strategic adjustments or asset restructuring. The negative economic spread ratios in most years point to difficulties in value creation above capital costs. The volatility in economic profit combined with these trends suggests underlying operational or market challenges impacting profitability and investment returns over the analyzed timeframe.
Economic Profit Margin
AT&T Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Operating revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Operating revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several notable trends and fluctuations in key financial metrics.
- Economic Profit
- The economic profit shows considerable volatility. In 2020, there was a significant economic loss of approximately -26,780 million USD. This shifted dramatically to a positive economic profit of 2,275 million USD in 2021, indicating improved profitability. However, this improvement was not sustained, as economic profit declined sharply again in subsequent years, recording losses of -21,776 million USD in 2022, a smaller loss of -767 million USD in 2023, and then another decline to -7,522 million USD in 2024. These fluctuations suggest instability in the company's value creation over the period.
- Operating Revenues
- The operating revenues reveal a clear downward trend from 2020 to 2022, dropping from approximately 171,760 million USD in 2020 to 120,741 million USD in 2022, which represents a significant reduction in revenue. From 2022 onward, the revenues stabilize, showing only marginal increases and decreases, with 122,428 million USD in 2023 and a slight decrease to 122,336 million USD in 2024. This stabilization following a sharp decline may imply a plateau after a difficult period.
- Economic Profit Margin
- The economic profit margin follows a pattern consistent with the economic profit figures. It starts at a negative margin of -15.59% in 2020, improves to a positive margin of 1.35% in 2021, and then declines again to -18.04% in 2022. In 2023, the margin approaches breakeven at -0.63% but worsens to -6.15% in 2024. These margins highlight ongoing challenges in translating revenue into economic profit, with substantial fluctuations indicating instability in cost management or profitability drivers.