AT&T & Verizon May Have Overstated Earnings by Billions

AT&T may have overstated earnings by $17B over the past decade according to Craig Moffet. AT&T has written off $2.9B and like many other companies, they've been wildly unrealistic about their pension plans. For 2010, AT&T found $1.2B in health care plan savings resulting in a cost increase of only 1.7%, far below the actual health care cost inflation. For 2011, T is assuming an 8.25% return on assets. In an economy unlikely to grow substantially, that's optimistic. I've also reported over the years on numerous AT&T "special items" that had the net effect of raising profits.  Given AT&T's actions, it seems like a certainty that Verizon will have to follow its lead. Verizon's pension liabilities are proportionately larger than AT&Ts, with slightly worse funding statuses.  Read more

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