AT&T absorbs $10 billion pension-related charge in 4Q
<a href="http://macnn.com/rd/277582==http://www.attwireless.com/" rel='nofollow'>AT&T</a> has warned Wall Street and investors that prior to its January 24 quarterly reports report, it will record a $10 billion charge for the quarter on an "accounting shift" related to its pension and post-retirement employee benefit plans. The company reports that its pension was underfunded by more than $10 billion in 2011, with $56 billion in obligations. The offset eclipses the offset it took in 2011 of $6.3 billion.<br />
Balancing the charge slightly is a $1.9 billion gain on its investments above the assumed rate of return. Other gains totalling $100 million were remarked upon, but operating income would be slashed by $175 million from assorted <a href="http://macnn.com/rd/277583==http://www.electronista.com/articles/12/10/31/more.cell.coverage.degradation.expected/" rel='nofollow'>US storm damage</a> to its infrastructure.
The telephony provider also reported that it sold 10.2 million smartphones in the quarter, slightly refining a statement from earlier in the week that put the figure at "more than 10 million." AT&T warned that the volume of sales would apply "near-term pressure on operating income, margins and earnings per share" in the fourth quarter of 2011 and the first quarter of 2012 from subsidies paid to the handset manufacturers.
Competitor Verizon Communications warned last week that it would have a similar charge, including $7 billion for pension fund adjustments, with the rest related to storm damage and associated debts.
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