Summary: AT&T Inc.

Strong market position as one of the two largest wireless providers in the U.S.; Healthy wireless EBITDA margins; Good business and geographic diversity; Strong portfolio of assets; Secular industry declines in most its business segments, including video and phone service; Slowing growth in U-Verse broadband; Significant price-based competition in the U.S. wireless market; and Significant exposure to the mature U.S. pay TV market, which is being threatened by alternative video sources. Current leverage in the low-3x area, which supports our financial risk assessment; Our expectation that funds from operations (FFO)-to-debt will be in the mid-20% area, which is somewhat low for the financial risk assessment; An aggressive financial policy with a large common dividend that consumes a high percentage of

...Business Risk Financial Risk + Strong market position as one of the two largest wireless providers in the U.S.; + Healthy wireless EBITDA margins; + Good business and geographic diversity; + Strong portfolio of assets; + Secular industry declines in most its business segments, including video and phone service; + Slowing growth in U-Verse broadband; + Significant price-based competition in the U.S. wireless market; and + Significant exposure to the mature U.S. pay TV market, which is being threatened by alternative video sources. + Current leverage in the low-3x area, which supports our financial risk assessment; + Our expectation that funds from operations (FFO)-to-debt will be in the mid-20% area, which is somewhat low for the financial risk assessment; + An aggressive financial policy with a large common dividend that consumes a high percentage of free operating cash flow (FOCF) and reduces financial flexibility; and + Low levels of discretionary cash flow (DCF) relative to its debt...

Summary