Intrinsic value of AT&T - T

Previous Close

$33.03

  Intrinsic Value

$74.57

stock screener

  Rating & Target

str. buy

+126%

Previous close

$33.03

 
Intrinsic value

$74.57

 
Up/down potential

+126%

 
Rating

str. buy

We calculate the intrinsic value of T stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 202.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  163,757
  167,523
  171,829
  176,662
  182,018
  187,895
  194,294
  201,220
  208,683
  216,692
  225,260
  234,402
  244,136
  254,481
  265,459
  277,092
  289,406
  302,428
  316,188
  330,716
  346,046
  362,212
  379,252
  397,207
  416,117
  436,026
  456,982
  479,034
  502,234
  526,636
Variable operating expenses, $m
  120,249
  122,510
  125,094
  127,994
  131,209
  134,735
  138,576
  142,733
  147,211
  152,018
  135,187
  140,674
  146,515
  152,724
  159,312
  166,294
  173,684
  181,499
  189,757
  198,476
  207,675
  217,377
  227,604
  238,379
  249,728
  261,676
  274,253
  287,487
  301,410
  316,055
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  120,249
  122,510
  125,094
  127,994
  131,209
  134,735
  138,576
  142,733
  147,211
  152,018
  135,187
  140,674
  146,515
  152,724
  159,312
  166,294
  173,684
  181,499
  189,757
  198,476
  207,675
  217,377
  227,604
  238,379
  249,728
  261,676
  274,253
  287,487
  301,410
  316,055
Operating income, $m
  43,508
  45,014
  46,735
  48,668
  50,809
  53,159
  55,718
  58,488
  61,472
  64,674
  90,073
  93,728
  97,620
  101,757
  106,147
  110,798
  115,722
  120,929
  126,431
  132,240
  138,370
  144,834
  151,648
  158,828
  166,389
  174,350
  182,729
  191,547
  200,824
  210,581
EBITDA, $m
  100,770
  103,087
  105,737
  108,711
  112,007
  115,623
  119,561
  123,823
  128,415
  133,344
  138,616
  144,242
  150,232
  156,598
  163,353
  170,512
  178,089
  186,103
  194,570
  203,510
  212,943
  222,891
  233,377
  244,426
  256,062
  268,314
  281,209
  294,779
  309,055
  324,071
Interest expense (income), $m
  5,696
  8,875
  9,184
  9,568
  10,007
  10,499
  11,045
  11,643
  12,295
  13,001
  13,761
  14,577
  15,450
  16,382
  17,373
  18,427
  19,546
  20,731
  21,986
  23,313
  24,714
  26,195
  27,756
  29,404
  31,140
  32,969
  34,896
  36,924
  39,059
  41,306
  43,670
Earnings before tax, $m
  34,633
  35,829
  37,167
  38,661
  40,310
  42,115
  44,075
  46,192
  48,471
  50,913
  75,495
  78,278
  81,239
  84,384
  87,719
  91,252
  94,991
  98,944
  103,119
  107,526
  112,176
  117,078
  122,245
  127,688
  133,420
  139,454
  145,805
  152,488
  159,518
  166,912
Tax expense, $m
  9,351
  9,674
  10,035
  10,439
  10,884
  11,371
  11,900
  12,472
  13,087
  13,746
  20,384
  21,135
  21,934
  22,784
  23,684
  24,638
  25,648
  26,715
  27,842
  29,032
  30,287
  31,611
  33,006
  34,476
  36,023
  37,653
  39,367
  41,172
  43,070
  45,066
Net income, $m
  25,282
  26,155
  27,132
  28,223
  29,427
  30,744
  32,174
  33,720
  35,384
  37,166
  55,111
  57,143
  59,304
  61,600
  64,035
  66,614
  69,343
  72,229
  75,277
  78,494
  81,888
  85,467
  89,239
  93,212
  97,397
  101,802
  106,438
  111,316
  116,448
  121,846

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  452,367
  462,772
  474,665
  488,017
  502,812
  519,046
  536,723
  555,858
  576,472
  598,596
  622,264
  647,519
  674,409
  702,986
  733,311
  765,447
  799,464
  835,437
  873,448
  913,580
  955,927
  1,000,586
  1,047,659
  1,097,256
  1,149,493
  1,204,492
  1,262,382
  1,323,299
  1,387,386
  1,454,795
Adjusted assets (=assets-cash), $m
  452,367
  462,772
  474,665
  488,017
  502,812
  519,046
  536,723
  555,858
  576,472
  598,596
  622,264
  647,519
  674,409
  702,986
  733,311
  765,447
  799,464
  835,437
  873,448
  913,580
  955,927
  1,000,586
  1,047,659
  1,097,256
  1,149,493
  1,204,492
  1,262,382
  1,323,299
  1,387,386
  1,454,795
Revenue / Adjusted assets
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
  0.362
Average production assets, $m
  352,896
  361,013
  370,291
  380,707
  392,249
  404,913
  418,703
  433,630
  449,712
  466,970
  485,434
  505,136
  526,113
  548,407
  572,063
  597,133
  623,670
  651,733
  681,385
  712,693
  745,728
  780,567
  817,289
  855,980
  896,731
  939,636
  984,797
  1,032,319
  1,082,314
  1,134,900
Working capital, $m
  -35,208
  -36,018
  -36,943
  -37,982
  -39,134
  -40,397
  -41,773
  -43,262
  -44,867
  -46,589
  -48,431
  -50,396
  -52,489
  -54,713
  -57,074
  -59,575
  -62,222
  -65,022
  -67,980
  -71,104
  -74,400
  -77,876
  -81,539
  -85,399
  -89,465
  -93,746
  -98,251
  -102,992
  -107,980
  -113,227
Total debt, $m
  170,077
  177,183
  185,306
  194,426
  204,531
  215,618
  227,692
  240,761
  254,840
  269,951
  286,116
  303,365
  321,731
  341,250
  361,961
  383,910
  407,144
  431,714
  457,675
  485,085
  514,008
  544,510
  576,661
  610,536
  646,214
  683,778
  723,317
  764,923
  808,695
  854,735
Total liabilities, $m
  308,967
  316,073
  324,196
  333,316
  343,421
  354,508
  366,582
  379,651
  393,730
  408,841
  425,006
  442,255
  460,621
  480,140
  500,851
  522,800
  546,034
  570,604
  596,565
  623,975
  652,898
  683,400
  715,551
  749,426
  785,104
  822,668
  862,207
  903,813
  947,585
  993,625
Total equity, $m
  143,400
  146,699
  150,469
  154,701
  159,392
  164,538
  170,141
  176,207
  182,742
  189,755
  197,258
  205,263
  213,787
  222,847
  232,460
  242,647
  253,430
  264,834
  276,883
  289,605
  303,029
  317,186
  332,108
  347,830
  364,389
  381,824
  400,175
  419,486
  439,801
  461,170
Total liabilities and equity, $m
  452,367
  462,772
  474,665
  488,017
  502,813
  519,046
  536,723
  555,858
  576,472
  598,596
  622,264
  647,518
  674,408
  702,987
  733,311
  765,447
  799,464
  835,438
  873,448
  913,580
  955,927
  1,000,586
  1,047,659
  1,097,256
  1,149,493
  1,204,492
  1,262,382
  1,323,299
  1,387,386
  1,454,795
Debt-to-equity ratio
  1.190
  1.210
  1.230
  1.260
  1.280
  1.310
  1.340
  1.370
  1.390
  1.420
  1.450
  1.480
  1.500
  1.530
  1.560
  1.580
  1.610
  1.630
  1.650
  1.670
  1.700
  1.720
  1.740
  1.760
  1.770
  1.790
  1.810
  1.820
  1.840
  1.850
Adjusted equity ratio
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317
  0.317

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  25,282
  26,155
  27,132
  28,223
  29,427
  30,744
  32,174
  33,720
  35,384
  37,166
  55,111
  57,143
  59,304
  61,600
  64,035
  66,614
  69,343
  72,229
  75,277
  78,494
  81,888
  85,467
  89,239
  93,212
  97,397
  101,802
  106,438
  111,316
  116,448
  121,846
Depreciation, amort., depletion, $m
  57,262
  58,074
  59,002
  60,043
  61,197
  62,464
  63,843
  65,336
  66,944
  68,670
  48,543
  50,514
  52,611
  54,841
  57,206
  59,713
  62,367
  65,173
  68,139
  71,269
  74,573
  78,057
  81,729
  85,598
  89,673
  93,964
  98,480
  103,232
  108,231
  113,490
Funds from operations, $m
  82,544
  84,229
  86,134
  88,266
  90,624
  93,207
  96,017
  99,056
  102,327
  105,836
  103,655
  107,656
  111,916
  116,441
  121,241
  126,327
  131,710
  137,402
  143,415
  149,763
  156,461
  163,524
  170,968
  178,810
  187,070
  195,765
  204,918
  214,548
  224,679
  235,336
Change in working capital, $m
  -690
  -810
  -926
  -1,039
  -1,152
  -1,263
  -1,376
  -1,489
  -1,604
  -1,722
  -1,842
  -1,966
  -2,093
  -2,224
  -2,360
  -2,501
  -2,648
  -2,800
  -2,958
  -3,124
  -3,296
  -3,476
  -3,664
  -3,860
  -4,066
  -4,281
  -4,506
  -4,741
  -4,988
  -5,246
Cash from operations, $m
  83,234
  85,039
  87,059
  89,305
  91,776
  94,471
  97,393
  100,545
  103,932
  107,558
  105,497
  109,622
  114,008
  118,665
  123,601
  128,829
  134,358
  140,202
  146,374
  152,887
  159,757
  166,999
  174,631
  182,670
  191,135
  200,046
  209,423
  219,289
  229,667
  240,582
Maintenance CAPEX, $m
  -34,596
  -35,290
  -36,101
  -37,029
  -38,071
  -39,225
  -40,491
  -41,870
  -43,363
  -44,971
  -46,697
  -48,543
  -50,514
  -52,611
  -54,841
  -57,206
  -59,713
  -62,367
  -65,173
  -68,139
  -71,269
  -74,573
  -78,057
  -81,729
  -85,598
  -89,673
  -93,964
  -98,480
  -103,232
  -108,231
New CAPEX, $m
  -6,940
  -8,117
  -9,278
  -10,416
  -11,542
  -12,664
  -13,790
  -14,927
  -16,082
  -17,259
  -18,464
  -19,702
  -20,977
  -22,294
  -23,657
  -25,070
  -26,537
  -28,063
  -29,652
  -31,308
  -33,035
  -34,839
  -36,722
  -38,691
  -40,751
  -42,905
  -45,161
  -47,522
  -49,995
  -52,586
Cash from investing activities, $m
  -41,536
  -43,407
  -45,379
  -47,445
  -49,613
  -51,889
  -54,281
  -56,797
  -59,445
  -62,230
  -65,161
  -68,245
  -71,491
  -74,905
  -78,498
  -82,276
  -86,250
  -90,430
  -94,825
  -99,447
  -104,304
  -109,412
  -114,779
  -120,420
  -126,349
  -132,578
  -139,125
  -146,002
  -153,227
  -160,817
Free cash flow, $m
  41,699
  41,633
  41,680
  41,860
  42,163
  42,582
  43,112
  43,748
  44,487
  45,328
  40,336
  41,377
  42,518
  43,760
  45,104
  46,553
  48,108
  49,772
  51,548
  53,440
  55,452
  57,588
  59,852
  62,250
  64,787
  67,468
  70,299
  73,288
  76,440
  79,764
Issuance/(repayment) of debt, $m
  5,731
  7,106
  8,123
  9,120
  10,105
  11,087
  12,073
  13,069
  14,080
  15,110
  16,165
  17,249
  18,366
  19,519
  20,712
  21,949
  23,234
  24,570
  25,961
  27,411
  28,923
  30,502
  32,151
  33,875
  35,678
  37,564
  39,539
  41,606
  43,772
  46,040
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  5,731
  7,106
  8,123
  9,120
  10,105
  11,087
  12,073
  13,069
  14,080
  15,110
  16,165
  17,249
  18,366
  19,519
  20,712
  21,949
  23,234
  24,570
  25,961
  27,411
  28,923
  30,502
  32,151
  33,875
  35,678
  37,564
  39,539
  41,606
  43,772
  46,040
Total cash flow (excl. dividends), $m
  47,430
  48,739
  49,803
  50,979
  52,268
  53,670
  55,185
  56,817
  58,567
  60,438
  56,502
  58,626
  60,884
  63,278
  65,816
  68,502
  71,341
  74,342
  77,509
  80,851
  84,375
  88,090
  92,003
  96,125
  100,464
  105,032
  109,838
  114,894
  120,212
  125,805
Retained Cash Flow (-), $m
  -2,539
  -3,298
  -3,770
  -4,233
  -4,690
  -5,146
  -5,604
  -6,066
  -6,535
  -7,013
  -7,503
  -8,006
  -8,524
  -9,059
  -9,613
  -10,187
  -10,783
  -11,404
  -12,049
  -12,722
  -13,424
  -14,157
  -14,922
  -15,722
  -16,559
  -17,435
  -18,351
  -19,311
  -20,316
  -21,369
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  44,891
  45,441
  46,033
  46,747
  47,578
  48,524
  49,582
  50,751
  52,032
  53,425
  48,999
  50,620
  52,360
  54,219
  56,203
  58,314
  60,558
  62,938
  65,460
  68,129
  70,951
  73,933
  77,081
  80,403
  83,905
  87,597
  91,487
  95,583
  99,896
  104,436
Discount rate, %
  5.60
  5.88
  6.17
  6.48
  6.81
  7.15
  7.50
  7.88
  8.27
  8.69
  9.12
  9.58
  10.06
  10.56
  11.09
  11.64
  12.22
  12.84
  13.48
  14.15
  14.86
  15.60
  16.38
  17.20
  18.06
  18.96
  19.91
  20.91
  21.95
  23.05
PV of cash for distribution, $m
  42,510
  40,534
  38,460
  36,361
  34,230
  32,068
  29,877
  27,665
  25,443
  23,225
  18,757
  16,891
  15,065
  13,298
  11,608
  10,012
  8,525
  7,160
  5,925
  4,828
  3,868
  3,045
  2,353
  1,782
  1,322
  959
  679
  470
  316
  207
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

AT&T Inc. is a holding company. The Company is a provider of communications and digital entertainment services in the United States and the world. The Company operates through four segments: Business Solutions, Entertainment Group, Consumer Mobility and International. The Company offers its services and products to consumers in the United States, Mexico and Latin America and to businesses and other providers of telecommunications services worldwide. It also owns and operates three regional TV sports networks, and retains non-controlling interests in another regional sports network and a network dedicated to game-related programming, as well as Internet interactive game playing. Its services and products include wireless communications, data/broadband and Internet services, digital video services, local and long-distance telephone services, telecommunications equipment, managed networking, and wholesale services. Its subsidiaries include AT&T Mobility and SKY Brasil Servicos Ltda.

FINANCIAL RATIOS  of  AT&T (T)

Valuation Ratios
P/E Ratio 15.6
Price to Sales 1.2
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 5.2
Price to Free Cash Flow 11.4
Growth Rates
Sales Growth Rate 11.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 12%
Cap. Spend. - 3 Yr. Gr. Rate 0.5%
Financial Strength
Quick Ratio 1
Current Ratio 0.2
LT Debt to Equity 92.3%
Total Debt to Equity 100.3%
Interest Coverage 4
Management Effectiveness
Return On Assets 4.2%
Ret/ On Assets - 3 Yr. Avg. 3.7%
Return On Total Capital 5.2%
Ret/ On T. Cap. - 3 Yr. Avg. 5.1%
Return On Equity 10.6%
Return On Equity - 3 Yr. Avg. 10.1%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 53.1%
Gross Margin - 3 Yr. Avg. 54%
EBITDA Margin 31.4%
EBITDA Margin - 3 Yr. Avg. 28.4%
Operating Margin 14.9%
Oper. Margin - 3 Yr. Avg. 13.7%
Pre-Tax Margin 12.1%
Pre-Tax Margin - 3 Yr. Avg. 11.3%
Net Profit Margin 7.9%
Net Profit Margin - 3 Yr. Avg. 7.3%
Effective Tax Rate 32.7%
Eff/ Tax Rate - 3 Yr. Avg. 33.8%
Payout Ratio 90.9%

T stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the T stock intrinsic value calculation we used $160546 million for the last fiscal year's total revenue generated by AT&T. The default revenue input number comes from 2017 income statement of AT&T. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our T stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.6%, whose default value for T is calculated based on our internal credit rating of AT&T, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of AT&T.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of T stock the variable cost ratio is equal to 73.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for T stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for AT&T.

Corporate tax rate of 27% is the nominal tax rate for AT&T. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the T stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for T are equal to 215.5%.

Life of production assets of 10 years is the average useful life of capital assets used in AT&T operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for T is equal to -21.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $140861 million for AT&T - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 6139 million for AT&T is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of AT&T at the current share price and the inputted number of shares is $202.8 billion.

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COMPANY NEWS

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▶ AT&T sued over loss of cryptocurrency   [05:19PM  Reuters Videos]
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▶ Austin is losing the 5G race here's why   [11:23AM  American City Business Journals]
▶ AT&T Completes Acquisition of AppNexus   [09:20AM  Business Wire]
▶ Verizon Is Close to Apple, Google Deals for 5G TV   [Aug-14-18 05:04PM  Bloomberg]
▶ AT&T invested $110M in Pittsburgh networks between 2015 and 2017   [02:06PM  American City Business Journals]
▶ Another AT&T Director Snaps Up Shares   [10:12AM  Barrons.com]
▶ 20 Dividend Stocks to Fund 20 Years of Retirement   [Aug-13-18 03:46PM  Kiplinger]
▶ The Meg chomps Warner Bros. biggest box-office opening of the year   [12:54PM  American City Business Journals]
▶ [$$] AT&T Hangs Up on Corporate Responsibility   [07:48PM  The Wall Street Journal]
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▶ Tribune Media terminates merger deal with Sinclair   [06:52AM  Fox Business Videos]
▶ AT&T buys full ownership of Otter Media   [02:30PM  American City Business Journals]
▶ Why T-Mobile Stock Needs the Sprint Merger   [11:12AM  InvestorPlace]
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