AT&T Writes Down $1.1 Billion on Venezuelan Adjustment

  • DirecTV assets in Venezuela now valued at about $75 million
  • Telco applies conservative exchange rates amid devaluation

AT&T Inc., about three months after completing its $48.5 billion acquisition of DirecTV, is erasing $1.1 billion from its books -- or almost the entire value of DirecTV’s Venezuela assets based on a more conservative currency exchange rate.

DirecTV had valued its Venezuelan business at $1.17 billion as of June 30, using a rate of 6.3 Venezuela bolivars to $1. AT&T, which values its cash and assets in Venezuela as effectively stranded, is now applying an exchange rate of 200 bolivars to $1, according to a filing last month. This would reduce the Venezuela asset value to about $75 million.

AT&T next week will release third-quarter results in a new format: four business units, which include business services, TV, consumer wireless and international. Previously the company reported results in two categories: wireless and wireline.

AT&T is on pace to add more than 2 million wireless subscribers, matching its year-earlier number, based on preliminary numbers released by the company last month. The company also expects earnings excluding certain items to be $2.62 to $2.68 per share.

AT&T shares are down 2.4 percent from when the company closed its acquisition of DirecTV.

(An earlier version of this story corrected the timing of the DirecTV acquisition.)

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