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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Dollars in millions except per share amounts
30
|
AT&T INC.
• June 2014 issuance of €1,600 (equivalent to $2,181
when issued) of 2.400% global notes due 2024 and
€500 (equivalent to $681 when issued) of 3.375%
global notes due 2034.
• November 2014 issuance of $1,295 of 4.700% global
notes due 2044.
• November 2014 issuance of CHF 450 of 0.500% senior
fixed-rate notes due 2019, CHF 450 of 1.375% senior
fixed-rate notes due 2024 and CHF 150 of 1.875%
senior fixed-rate notes due 2030 (together, equivalent
to $1,089 when issued).
• December 2014 issuance of €1,500 of 1.450% global
notes due 2022, €800 of 2.600% global notes due
2029 and €1,500 of floating rate global notes due
2019 (together, equivalent to $4,767 when issued).
• December 2014 draw of $250 on a private financing
agreement with U.S. Bank National Association.
During 2014, we redeemed $10,400 in debt, primarily
consisting of the following repayments:
• March 2014 redemption of $1,814 of Cricket
Communications, Inc. term loans and approximately
$38 of 4.500% Leap convertible senior notes (Leap
senior notes) in connection with the Leap acquisition.
• April 2014 redemption of Cricket Communications, Inc.
7.750% senior notes with a face value of $1,600 in
connection with the Leap acquisition.
• July 2014 redemption of $4,393 of debt consisting
of all of the outstanding BellSouth 5.200% notes due
2014, AT&T 0.875% global notes due 2015, AT&T
5.625% global notes due 2016, and BellSouth 5.200%
notes due 2016 as well as $750 in principal amount of
the outstanding AT&T 2.500% global notes due 2015.
• July 2014 redemption of the remaining $211 of Leap
senior notes in connection with the Leap acquisition.
• September 2014 redemption of $2,250 of SBC
Communications Inc. 5.100% global notes due 2014.
On January 29, 2015, we issued $2,619 of 4.600% global
notes due 2045.
At December 31, 2014, we had $6,056 of debt maturing
within one year, substantially all of which was related to
long-term debt issuances. Debt maturing within one year
includes the following notes that may be put back to us
by the holders:
• $1,000 of annual put reset securities issued by
BellSouth Corporation that may be put back to us each
April until maturity in 2021.
• An accreting zero-coupon note that may be redeemed
each May until maturity in 2022. If the zero-coupon
note (issued for principal of $500 in 2007) is held to
maturity, the redemption amount will be $1,030.
Cash Used in or Provided by Financing Activities
We paid dividends of $9,552 in 2014, $9,696 in 2013, and
$10,241 in 2012, primarily reflecting the decline in shares
outstanding due to our repurchase activity, partially offset
by dividend rate increases. In December 2014, our Board
of Directors approved a 2.2% increase in the quarterly
dividend from $0.46 to $0.47 per share. This follows
a 2.2% dividend increase approved by our Board in
December 2013. Dividends declared by our Board of
Directors totaled $1.85 per share in 2014, $1.81 per
share in 2013, and $1.77 per share in 2012. Our dividend
policy considers the expectations and requirements of
stockholders, capital funding 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 2014, 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, including
the impact of derivatives, to decrease from 4.4% at
December 31, 2013 to 4.2% at December 31, 2014. We had
$81,632 of total notes and debentures outstanding
(see Note 9) at December 31, 2014, which included Euro,
British pound sterling, Swiss Franc and Canadian dollar
denominated debt of approximately $24,655.
During 2014, we received net proceeds of $15,926 from
the issuance of $16,013 in long-term debt in various
markets, with an average weighted maturity of
approximately 13 years and a weighted average coupon
of 2.4%. Debt issued included:
• March 2014 issuance of $1,100 of 2.300% global
notes due 2019, $1,000 of 3.900% global notes due
2024 and $400 of floating rate global notes due 2019.
The floating rate for the notes is based upon the
three-month London Interbank Offered Rate (LIBOR),
reset quarterly, plus 67 basis points.
• March 2014 issuance of $500 of floating rate global
notes due 2017. The floating rate for the notes is
based upon the three-month LIBOR, reset quarterly,
plus 42 basis points.
• May 2014 draw of $750 on a private financing
agreement with Export Development Canada due 2017.
The agreement is designed to encourage the purchase
of Canadian-sourced equipment. The agreement
contains terms similar to that provided under our
revolving credit arrangements, discussed below.
• June 2014 issuance of $2,000 of 4.800% global notes
due 2044.