AT&T Wireless 2013 Annual Report Download - page 31

AT&T Inc. | 29
by dividend rate increases. In December 2013, our Board
of Directors approved a 2.2% increase in the quarterly
dividend from $0.45 to $0.46 per share. This follows a
2.3% dividend increase approved by our Board in
November2012. Dividends declared by our Board of
Directors totaled $1.81 per share in 2013, $1.77 per
share in 2012, and $1.73 per share in 2011. Our dividend
policy considers the expectations and requirements of
stockholders, internal requirements of AT&T and long-term
growth opportunities. It is our intent to provide the
financial flexibility to allow our Board of Directors to
consider dividend growth and to recommend an increase
in dividends to be paid in future periods. All dividends
remain subject to declaration by our Board of Directors.
In 2013, we continued to take advantage of lower market
interest rates and undertook several activities related to our
long-term debt which caused our weighted average interest
rate of our entire long-term debt portfolio to decrease from
4.9% at December 31, 2012 to 4.5% at December 31, 2013.
We had $74,484 of total notes and debentures outstanding
(see Note 9) at December 31, 2013, which included Euro,
British pound sterling or Canadian dollar denominated debt
of approximately $18,206.
During 2013, we received net proceeds of $12,040 from the
issuance of $12,108 in long-term debt in various markets,
with an average weighted maturity of approximately 10 years
and an average interest rate of 2.6%. Debt issued included:
• February 2013 issuance of $1,000 of 0.900% global
notes due 2016 and $1,250 of floating rate notes due
2016. The floating rate is based upon the three-month
London Interbank Offered Rate (LIBOR), reset quarterly,
plus 38.5 basis points.
• March 2013 issuance of $500 of 1.400% global notes
due 2017.
• March 2013 issuance of €1,250 of 2.500% global notes
due 2023 (equivalent to $1,626 when issued) and €400
of 3.550% global notes due 2032 (equivalent to $520
when issued).
• May 2013 issuance of £1,000 of 4.250% global notes
due 2043 (equivalent to $1,560 when issued).
• November 2013 issuance of €1,000 of 2.650% global
notes due 2021 (equivalent to $1,349 when issued)
and €1,000 of 3.500% global notes due 2025
(equivalent to $1,349 when issued).
• November 2013 issuance of CDN$1,000 of 3.825%
global notes due 2020 (equivalent to $954 when
issued).
• November 2013 issuance of $1,600 of 2.375% global
notes due 2018 and $400 of floating rate notes due
2018. The floating rate is based upon the three-month
LIBOR, reset quarterly, plus 91 basis points.
We expect lower cash from operations in 2014, in part
as the tax rules allowing companies to more rapidly deduct
the cost of equipment have ended and our AT&T Next
program continues to gain popularity with customers.
During 2012, cash provided by operating activities was
$39,176 compared to $34,743 in 2011. Our higher
operating cash flows in 2012 were due to nonrecurring
payments made in the prior year, including a $3,000 merger
breakup fee to Deutsche Telekom AG (Deutsche Telekom)
and a contribution to our pension plan of $1,000, as well
as improvements in inventory and working capital
management during 2012.
Cash Used in or Provided by Investing Activities
During 2013, cash used in investing activities consisted
primarily of:
• $20,944 in capital expenditures, excluding interest
during construction.
• $284 in interest during construction.
• $4,050 purchase of wireless spectrum licenses and
operations.
During 2013, cash provided by investing activities consisted
primarily of:
• $1,179 from the sale of a portion of our shares in
América Móvil.
• $712 from the sale of various properties.
• $200 from the repayment of advances to YP Holdings.
• $101 from the return of investment in YP Holdings.
Virtually all of our capital expenditures are spent on our
wireless and wireline networks, our U-verse services and
support systems for our communications services. Capital
expenditures, excluding interest during construction,
increased $1,479 from 2012. Our Wireless segment
represented 52% of our total spending and increased 3%
in 2013. The Wireline segment, which includes U-verse
services, represented 48% of the total capital expenditures
and increased 13% in 2013, primarily reflecting our
implementation of Project VIP.
We expect that our capital expenditures during 2014
will be in the $21,000 range. We expect 2014 to be our
peak investment year for Project VIP and anticipate our
Wireless and Wireline segments’ spend to be proportionally
consistent to the previous year. Upon our completion of
Project VIP, we expect capital investments to trend back
to historic levels. The amount of capital investment is
influenced by demand for services and products, continued
growth and regulatory considerations.
Cash Used in or Provided by Financing Activities
We paid dividends of $9,696 in 2013, $10,241 in 2012, and
$10,172 in 2011, primarily reflecting the decline in shares
outstanding due to our repurchase activity, partially offset