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August 11, 2015 5:06 PM EDT




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549
 

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934


Date of report (Date of earliest event reported) August 11, 2015

AT&T INC.
(Exact Name of Registrant as Specified in Charter)


Delaware
1-8610
43-1301883
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)

           208 S. Akard St., Dallas, Texas
75202
            (Address of Principal Executive Offices)
(Zip Code)

Registrant's telephone number, including area code (210) 821-4105


__________________________________
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))
 ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
 
Throughout this document, AT&T Inc. is referred to as "we" or "AT&T." AT&T announces a change in accounting for customer set-up and installation costs. Historically we have followed an accounting policy of deferring customer set-up and installation costs only to the extent of deferred revenues recorded for upfront fees (e.g., activation charges), and to expense any costs that exceed deferred revenues. With our acquisition of DIRECTV, we have changed our accounting to a more preferable method of deferring these costs and amortizing them over the expected customer life of approximately four years, subject to an assessment of the recoverability of such costs. AT&T will apply this change retrospectively, adjusting all prior periods. The cumulative effect of the change on "Retained earnings" as of January 1, 2015, was an increase of approximately $3.3 billion, with an increase of approximately $4.4 billion in "Total Assets" and $1.1 billion in deferred taxes liabilities on our consolidated balance sheets.

This change in accounting principle will be applicable to video, broadband Internet, DSL and wireline voice services and is considered preferable in that it provides a more accurate reflection of assets (i.e., the contractual customer relationship obtained through the set-up and installation) generated by those specific business activities. Our new accounting method is more comparable with the accounting method used in the cable entertainment industry. With our acquisition of DIRECTV, changing to this accounting method will enhance comparability to other companies in the industry. This change in accounting will not have an impact on our domestic or international wireless results.

This change will be effective with the reporting of our operating results for the quarter ended September 30, 2015. As a convenience to investors who may want to consider the effects of this change on our historical results, we are providing adjusted quarterly and annual consolidated and segment results for 2013, 2014 and the first two quarters of 2015 in Exhibit 99.1 and 99.2 hereto. Additionally, we are providing the adjusted quarterly results for our Wireline segment in Exhibit 99.3 hereto.


CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS
 
Information set forth in this filing contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this filing based on new information or otherwise.

Item 9.01 Financial Statements and Exhibits.
 
The following exhibits are filed as part of this report:
 
(d)          Exhibits

99.1
 
AT&T Inc. Consolidated Statements of Income - As Adjusted
99.2
 
AT&T Inc. Annual Segment Results - As Adjusted
99.3
 
AT&T Inc. Quarterly Wireline Segment Results - As Adjusted

 
.





Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
AT&T INC.
   
   
   
Date: August 11, 2015
By: /s/ Paul W. Stephens                                     
 Paul W. Stephens
Senior Vice President and Controller

  
   


 
Exhibit 99.1
 
 
AT&T Inc.
Consolidated Statements of Income - As Adjusted
For the Quarters and Six Months Ended
June 30, 2015
            
Dollars in millions except per share amounts
Unaudited
  
For the Quarter Ended
    
For the Six Months
   
Mar 31,
    
Jun 30,
    
Ended
Operating Revenues
            
  Service
  
$
28,962
    
$
29,541
    
$
58,503
  
  Equipment
    
3,614
      
3,474
      
7,088
  
    Total Operating Revenues
    
32,576
      
33,015
      
65,591
  
                         
Operating Expenses
                        
  Cost of services and sales (exclusive of depreciation and
     amortization shown separately below)
    
14,480
      
15,079
      
29,559
  
  Selling, general and administrative
    
7,961
      
7,467
      
15,428
  
  Depreciation and amortization
    
4,578
      
4,696
      
9,274
  
    Total Operating Expenses
    
27,019
      
27,242
      
54,261
  
Operating Income
    
5,557
      
5,773
      
11,330
  
Interest Expense
    
899
      
932
      
1,831
  
Equity in Net Income of Affiliates
    
-
      
33
      
33
  
Other Income (Expense) - Net
    
70
      
48
      
118
  
Income Before Income Taxes
    
4,728
      
4,922
      
9,650
  
Income Tax Expense
    
1,389
      
1,738
      
3,127
  
Net Income
    
3,339
      
3,184
      
6,523
  
  Less: Net Income Attributable to Noncontrolling Interest
    
(76
)
    
(102
)
    
(178
)
Net Income Attributable to AT&T
  
$
3,263
    
$
3,082
    
$
6,345
  
                         
                         
Basic Earnings Per Share Attributable to AT&T
  
$
0.63
    
$
0.59
    
$
1.22
  
Weighted Average Common
     Shares Outstanding (000,000)
    
5,203
      
5,204
      
5,204
  
                         
Diluted Earnings Per Share Attributable to AT&T
  
$
0.63
    
$
0.59
    
$
1.22
  
Weighted Average Common
     Shares Outstanding with Dilution (000,000)
    
5,219
      
5,220
      
5,220
  
                         
 
 
 
AT&T Inc.
Consolidated Statements of Income - As Adjusted
For the Quarters and Year Ended 2014
Dollars in millions except per share amounts
Unaudited
  
For the Quarter Ended
    
For the Year
   
Mar 31,
    
Jun 30,
    
Sep 30,
    
Dec 31,
    
Ended
Operating Revenues
                    
  Service
  
$
29,776
    
$
29,556
    
$
29,790
    
$
29,315
    
$
118,437
  
  Equipment
    
2,700
      
3,019
      
3,167
      
5,124
      
14,010
  
    Total Operating Revenues
    
32,476
      
32,575
      
32,957
      
34,439
      
132,447
  
                                         
Operating Expenses
                                        
  Cost of services and sales (exclusive of depreciation and
     amortization shown separately below)
    
13,264
      
14,089
      
14,336
      
18,456
      
60,145
  
  Selling, general and administrative
    
8,260
      
8,197
      
8,475
      
14,765
      
39,697
  
  Abandonment of network assets
    
-
      
-
      
-
      
2,120
      
2,120
  
  Depreciation and amortization
    
4,617
      
4,550
      
4,539
      
4,567
      
18,273
  
    Total Operating Expenses
    
26,141
      
26,836
      
27,350
      
39,908
      
120,235
  
Operating Income (Loss)
    
6,335
      
5,739
      
5,607
      
(5,469
)
    
12,212
  
Interest Expense
    
860
      
881
      
1,016
      
856
      
3,613
  
Equity in Net Income of Affiliates
    
88
      
102
      
(2
)
    
(13
)
    
175
  
Other Income (Expense) - Net
    
145
      
1,269
      
42
      
125
      
1,581
  
Income (Loss) Before Income Taxes
    
5,708
      
6,229
      
4,631
      
(6,213
)
    
10,355
  
Income Tax Expense (Benefit)
    
1,938
      
2,532
      
1,444
      
(2,295
)
    
3,619
  
Net Income (Loss)
    
3,770
      
3,697
      
3,187
      
(3,918
)
    
6,736
  
  Less: Net Income Attributable to Noncontrolling Interest
    
(82
)
    
(74
)
    
(57
)
    
(81
)
    
(294
)
Net Income (Loss) Attributable to AT&T
  
$
3,688
    
$
3,623
    
$
3,130
    
$
(3,999
)
  
$
6,442
  
                                         
                                         
Basic Earnings (Loss) Per Share Attributable to AT&T
  
$
0.71
    
$
0.70
    
$
0.60
    
$
(0.77
)
  
$
1.24
  
Weighted Average Common
     Shares Outstanding (000,000)
    
5,222
      
5,204
      
5,198
      
5,198
      
5,205
  
                                         
Diluted Earnings (Loss) Per Share Attributable to AT&T
  
$
0.70
    
$
0.69
    
$
0.60
    
$
(0.77
)
  
$
1.24
  
Weighted Average Common
     Shares Outstanding with Dilution (000,000)
    
5,238
      
5,220
      
5,214
      
5,214
      
5,221
  
                                         
 
 
                     
AT&T Inc.
Consolidated Statements of Income - As Adjusted
For the Quarters and Year Ended 2013
Dollars in millions except per share amounts
Unaudited
  
For the Quarter Ended
    
For the Year
   
Mar 31,
    
Jun 30,
    
Sep 30,
    
Dec 31,
    
Ended
Operating Revenues
                    
  Service
  
$
29,443
    
$
29,851
    
$
29,864
    
$
30,094
    
$
119,252
  
  Equipment
    
1,913
      
2,224
      
2,294
      
3,069
      
9,500
  
    Total Operating Revenues
    
31,356
      
32,075
      
32,158
      
33,163
      
128,752
  
                                         
Operating Expenses
                                        
  Cost of services and sales (exclusive of depreciation and
     amortization shown separately below)
    
12,521
      
13,186
      
13,314
      
12,170
      
51,191
  
  Selling, general and administrative
    
8,333
      
8,121
      
7,952
      
4,008
      
28,414
  
  Depreciation and amortization
    
4,529
      
4,571
      
4,615
      
4,680
      
18,395
  
    Total Operating Expenses
    
25,383
      
25,878
      
25,881
      
20,858
      
98,000
  
Operating Income
    
5,973
      
6,197
      
6,277
      
12,305
      
30,752
  
Interest Expense
    
827
      
825
      
829
      
1,459
      
3,940
  
Equity in Net Income of Affiliates
    
185
      
218
      
91
      
148
      
642
  
Other Income (Expense) - Net
    
32
      
288
      
50
      
226
      
596
  
Income Before Income Taxes
    
5,363
      
5,878
      
5,589
      
11,220
      
28,050
  
Income Tax Expense
    
1,569
      
1,946
      
1,628
      
4,185
      
9,328
  
Net Income
    
3,794
      
3,932
      
3,961
      
7,035
      
18,722
  
  Less: Net Income Attributable to Noncontrolling Interest
    
(73
)
    
(58
)
    
(91
)
    
(82
)
    
(304
)
Net Income Attributable to AT&T
  
$
3,721
    
$
3,874
    
$
3,870
    
$
6,953
    
$
18,418
  
                                         
                                         
Basic Earnings Per Share Attributable to AT&T
  
$
0.67
    
$
0.72
    
$
0.73
    
$
1.32
    
$
3.42
  
Weighted Average Common
     Shares Outstanding (000,000)
    
5,513
      
5,381
      
5,315
      
5,267
      
5,368
  
                                         
Diluted Earnings Per Share Attributable to AT&T
  
$
0.67
    
$
0.72
    
$
0.73
    
$
1.31
    
$
3.42
  
Weighted Average Common
     Shares Outstanding with Dilution (000,000)
    
5,530
      
5,397
      
5,331
      
5,283
      
5,385
  
                                         
Exhibit 99.2
 
AT&T Inc.
Segment Results for the Period Ended - As Adjusted
Dollars in millions
                   
For the six months ended June 30, 2015
  
Wireless
    
Wireline
    
International
    
Corporate and Other
    
Consolidated Results
Service
  
$
29,927
    
$
27,916
    
$
660
    
$
-
    
$
58,503
Equipment
    
6,563
      
446
      
67
      
12
      
7,088
Total segment operating revenues
    
36,490
      
28,362
      
727
      
12
      
65,591
Operations and support expenses
    
23,232
      
20,463
      
748
      
544
      
44,987
Depreciation and amortization expenses
    
4,131
      
4,964
      
169
      
10
      
9,274
Total segment operating expenses
    
27,363
      
25,427
      
917
      
554
      
54,261
Segment operating income (loss)
    
9,127
      
2,935
      
(190
)
    
(542
)
    
11,330
Interest expense
    
-
      
-
      
-
      
1,831
      
1,831
Equity in net income (loss) of affiliates
    
(4
)
    
(5
)
    
-
      
42
      
33
Other income (expense) - net
    
-
      
-
      
-
      
118
      
118
Segment income before income taxes
  
$
9,123
    
$
2,930
    
$
(190
)
  
$
(2,213
)
  
$
9,650
                                       
                                       
For the year ended December 31, 2014
  
Wireless
    
Wireline
    
International
    
Corporate and Other
    
Consolidated Results
Service
  
$
61,032
    
$
57,405
    
$
-
    
$
-
    
$
118,437
Equipment
    
12,960
      
1,020
      
-
      
30
      
14,010
Total segment operating revenues
    
73,992
      
58,425
      
-
      
30
      
132,447
Operations and support expense
    
48,924
      
42,005
      
-
      
11,033
      
101,962
Depreciation and amortization expenses
    
7,941
      
10,323
      
-
      
9
      
18,273
Total segment operating expenses
    
56,865
      
52,328
      
-
      
11,042
      
120,235
Segment operating income (loss)
    
17,127
      
6,097
      
-
      
(11,012
)
    
12,212
Interest expense
    
-
      
-
      
-
      
3,613
      
3,613
Equity in net income (loss) of affiliates
    
(112
)
    
-
      
153
      
134
      
175
Other income (expense) - net
    
-
      
-
      
-
      
1,581
      
1,581
Segment income before income taxes
  
$
17,015
    
$
6,097
    
$
153
    
$
(12,910
)
  
$
10,355
                                       
                                       
For the year ended December 31, 2013
  
Wireless
    
Wireline
    
International
    
Corporate and Other
    
Consolidated Results
Service
  
$
61,552
    
$
57,700
    
$
-
    
$
-
    
$
119,252
Equipment
    
8,347
      
1,114
      
-
      
39
      
9,500
Total segment operating revenues
    
69,899
      
58,814
      
-
      
39
      
128,752
Operations and support expenses
    
44,508
      
41,365
      
-
      
(6,268
)
    
79,605
Depreciation and amortization expenses
    
7,468
      
10,907
      
-
      
20
      
18,395
Total segment operating expenses
    
51,976
      
52,272
      
-
      
(6,248
)
    
98,000
Segment operating income (loss)
    
17,923
      
6,542
      
-
      
6,287
      
30,752
Interest expense
    
-
      
-
      
-
      
3,940
      
3,940
Equity in net income (loss) of affiliates
    
(75
)
    
2
      
532
      
183
      
642
Other income (expense) - net
    
-
      
-
      
-
      
596
      
596
Segment income before income taxes
  
$
17,848
    
$
6,544
    
$
532
    
$
3,126
    
$
28,050
Exhibit 99.3
 
AT&T Inc.
Wireline Segment Results for the Three Months Ended - As Adjusted
Dollars in millions
Unaudited
                                        
                                         
Wireline
  
3/31/2013
    
6/30/2013
    
9/30/2013
    
12/31/2013
    
3/31/2014
    
6/30/2014
    
9/30/2014
    
12/31/2014
    
3/31/2015
    
6/30/2015
  
Segment Operating Revenues
                                        
  Service
  
$
14,381
    
$
14,482
    
$
14,403
    
$
14,434
     $
14,389
     $
14,408
     $
14,368
     $
14,240
    
$
13,935
    
$
13,981
  
  Equipment
    
274
      
291
      
267
      
282
      
212
      
229
      
247
      
332
      
213
      
233
  
    Total Segment Operating Revenues
    
14,655
      
14,773
      
14,670
      
14,716
      
14,601
      
14,637
      
14,615
      
14,572
      
14,148
      
14,214
  
                                                                                 
Segment Operating Expenses
                                                                                
Operations and Support
    
10,301
      
10,334
      
10,295
      
10,435
      
10,401
      
10,575
      
10,557
      
10,472
      
10,163
      
10,300
  
  Depreciation and amortization
    
2,688
      
2,722
      
2,736
      
2,761
      
2,684
      
2,514
      
2,571
      
2,554
      
2,476
      
2,488
  
    Total Segment Operating Expenses
    
12,989
      
13,056
      
13,031
      
13,196
      
13,085
      
13,089
      
13,128
      
13,026
      
12,639
      
12,788
  
Segment Operating Income
    
1,666
      
1,717
      
1,639
      
1,520
      
1,516
      
1,548
      
1,487
      
1,546
      
1,509
      
1,426
  
Equity in Net Income (Loss) of Affiliates
    
-
      
1
      
-
      
1
      
1
      
-
      
1
      
(2
)
    
(6
)
    
1
  
Segment Income
  
$
1,666
    
$
1,718
    
$
1,639
    
$
1,521
    
$
1,517
    
$
1,548
    
$
1,488
    
$
1,544
    
$
1,503
    
$
1,427
  
                                   
 
 
                                          
Segment Operating Income Margin
    
11.4
%
    
11.6
%
    
11.2
%
    
10.3
%
    
10.4
%
    
10.6
%
    
10.2
%
    
10.6
%
    
10.7
%
    
10.0
%

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