By Josh Beckerman
AT&T Inc. expects to post pretax charges of about $7.9
billion related to pensions and post-employment benefit plans and
about $2.1 billion for the abandonment in place of certain assets
for its fourth quarter.
The charge for the pensions and benefits reflects an actuarial
loss. AT&T, along with about 30 other companies, in the past
few years has switched to mark-to-market pension accounting to make
it easier for investors to gauge plan performance.
With the switch, pension gains and losses flow into earnings
sooner than under the old rules, which are still in effect and
allow companies to smooth out the impact over several years.
Companies that switch to valuing assets at up-to-date market
prices may incur more volatility in their earnings, but it offers a
more current picture of a pension plan's health.
A year ago, AT&T posted a $7.6 billion pretax gain tied to
pension accounting.
The charge for network assets follows AT&T's determination
that certain copper assets won't be necessary to support future
network activity, due to lower demand for legacy voice and data
services and the move toward new technology.
Companies like AT&T and Verizon Communications Inc. have
been replacing copper-based technologies in their networks with
faster, Internet-based technologies that run over fiber-optic
lines.
Write to Josh Beckerman at josh.beckerman@wsj.com
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