AT&T Wireless 2014 Annual Report Download - page 38

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Dollars in millions except per share amounts
36 | AT&T INC.
Customers are changing their buying habits in response
to both ongoing economic conditions and technological
advances. Should we fail to respond promptly to address
these changes in customer demands, we are likely to
experience greater pressure on pricing and margins as
we continue to compete for customers who would have
even less discretionary income.
Adverse changes in medical costs and the U.S. securities
markets and a further decline in interest rates could
materially increase our benefit plan costs.
Our costs to provide current benefits and funding for
future benefits are subject to increases, primarily due to
continuing increases in medical and prescription drug costs,
and can be affected by lower returns on funds held by our
pension and other benefit plans, which are reflected in our
financial statements for that year. Investment returns on
these funds depend largely on trends in the U.S. securities
markets and the U.S. economy. We have experienced
historically low interest rates during the last several years.
While we expect rates to increase during 2015, we expect
relatively stable rates to continue for the next several years.
Recent increases in market returns have led to better than
assumed investment returns on our plan assets; however
STOCK PERFORMANCE GRAPH
Comparison of Five Year Cumulative Total Return
AT&T Inc., S&P 500 Index, and S&P 500 Integrated Telecom Index
115
117
136
180
205
128
164 167
147
119
12/09 12/10 12/11 12/12 12/13 12/14
240
220
200
180
160
140
120
100
80
S&P 500 Integrated
Telecom Index
AT&T Inc. S&P 500 Index
158
122
157
112
143
The comparison above assumes $100 invested on December 31, 2009, in AT&T common stock, Standard & Poor’s 500 Index
(S&P 500), and Standard & Poor’s 500 Integrated Telecom Index (S&P 500 Integrated Telecom). Total return equals stock
price appreciation plus reinvestment of dividends.
RISK FACTORS
In addition to the other information set forth in this
document, including the matters contained under the
caption “Cautionary Language Concerning Forward-Looking
Statements,” you should carefully read the matters
described below. We believe that each of these matters
could materially affect our business. We recognize that
most of these factors are beyond our ability to control and
therefore we cannot predict an outcome. Accordingly, we
have organized them by first addressing general factors,
then industry factors and, finally, items specifically
applicable to us.
The current U.S. economy has changed our customers’
buying habits and a failure to adequately respond
could materially adversely affect our business.
We provide services and products to consumers and large
and small businesses in the United States and to larger
businesses throughout the world. The current slow
economic recovery in the United States continues to
pressure some of our customers’ demand for and ability
to pay for existing services, especially local landline
service, and their interest in purchasing new services.