AT&T Wireless 2014 Annual Report Download - page 42

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Dollars in millions except per share amounts
40
|
AT&T INC.
restrictions on cash repatriation, foreign exchange controls,
fluctuations in currency values, trade restrictions and other
regulations that may affect materially our earnings. While
the countries involved represent significant opportunities to
sell our advanced services, a number of these same
countries have experienced unstable growth patterns and at
times have experienced high inflation, currency devaluation,
foreign exchange controls, instability in the banking sector
and high unemployment. Should these conditions reoccur,
customers in these countries may be unable to purchase
the services we offer or pay for services already provided.
In addition, operating in foreign countries also typically
involves participating with local businesses, either to
comply with local laws or, for example, to enhance product
marketing. Involvement with foreign firms exposes us to the
risk of being unable to control the actions of those firms
and therefore exposes us to violating the Foreign Corrupt
Practices Act. Violations of the FCPA could have a material
adverse effect on our operating results.
A majority of our workforce is represented by labor
unions. Absent the successful negotiation of agreements
that are scheduled to expire during 2015, we could
experience lengthy work stoppages.
A majority of our employees are represented by labor
unions as of year-end 2014. Labor contracts covering many
of the employees will expire during 2015. We experienced
a work stoppage in 2004 when the contracts involving our
wireline employees expired, and we may experience
additional work stoppages in 2015. A work stoppage could
adversely affect our business operations, including a loss of
revenue and strained relationships with customers, and we
cannot predict the length of any such strike. We cannot
predict the new contract provisions or the impact of any
new contract on our financial condition.
Increases in our debt levels to fund acquisitions,
additional spectrum purchases, or other strategic
decisions could adversely affect our ability to finance
future debt at attractive rates and reduce our ability to
respond to competition and adverse economic trends.
We have increased the amount of our debt during 2014
and 2015 to fund acquisitions, including spectrum
purchases needed to compete in our business. While we
believe such decisions were prudent and necessary to take
advantage of both growth opportunities and respond to
industry developments, banks and potential purchasers of
our publicly-traded debt may decide that these strategic
decisions and similar actions we may take in the future, as
well as expected trends in the industry, will increase the
risk of investing in our debt and may demand a higher rate
of interest, impose restrictive covenants or otherwise limit
the amount of potential borrowing.