AT&T and DirecTV Acquisition: A Financial and Market Analysis

This report provides a comprehensive financial analysis of AT&T's acquisition of DirecTV. It begins with an overview of AT&T's business segments, highlighting the strategic move to diversify into the media market through the DirecTV acquisition. The report examines the market and financial implications of the merger, including the financial terms, cash flow, and revenue generation. It explores the impact on AT&T's financial performance, including adjustments to EPS and cash flow, and the adoption of new accounting standards. The analysis further investigates the cash flow aspects, including capital expenditures, and the merger agreement terms. Finally, the report discusses the administrative expenses associated with the acquisition and provides a conclusion summarizing the key findings and the overall impact of the DirecTV acquisition on AT&T's business.

AT & T acquisition of DirecTV analysis
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Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7
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INTRODUCTION
AT&T is a leading organization which provide the telecom service in USA. It is became
core enterprise segments in 2020 which are maintained the communications, WarnerMedia. In
order to increase 84% of total revenue and also achieved by the communication segment (Visan,
Ionita and Filip, 2020). It is also comprised with the mobility, enterprise Wire-line and other type
of entertainment group. It will spilt into different communication segment.
Furthermore, the organization will comprise with the mobile telephone subscription and
established the other type of entertainment group in the form of broadband internet enterprise,
TV offerings and legacy telephone. It will create the strategic service, data service and legacy
voice. AT &T which make an efforts to increase revenue in term of mobile enterprise.
MAIN BODY
Overview
AT &T is based on the diversifying which related the technology market. In recently, the
organization is mainly deals with the media company. It has taken important step in July 2015,
Afterwards AT&T has acquired the DirectTV which deals with financed by 48.5 Billion USD.
Furthermore, it also focused on the further step in 2016 but it will require to maintain the
position and increase revenue in global marketplace (Albayrak, Özdemir and Zeydan, 2019).
DirectTV is related to satellite TV based operating firm which are smartly deal with
communication. In 2015, it has been accelerated to cut down the trends and also started to
become streaming the business such as Netflix. It is the best example of TV viewing distribution
channel in future.
Market Financial Analysis
As per analysis, it has identified that AT&T has performed the significant action which
hardly affected on the entire business share prices. The organization always tried the applied the
strategic plan in long term development (Curwen and et.al., 2019). In this way, it has found that
they being implement action of dividend aristocrat to identify situation or condition of
shareholders of organisation. In order to keep increase the role which will be categorised in long
term growth as well as development (Areeda, Kaplow and Hemphill, 2019). It has been seen that
shareholder within organization initially putting extra efforts in positive manner. It directly deals
with DirectTV and handle the stock price or cost, nut within one year it would be realised that
satellite pay TV enterprise easily replaced by other streaming. In this way, it understand that
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demand of client change in step by step manner. Initially, once organization announced as time
warner which mainly deal in 2016 but started to decline in completely(Visan, Ionita and Filip,
2020). It can happen when people believed that 85 billion paid was become high cost and
consider as debt load was higher (Areeda, Kaplow and Hemphill, 2019). In order to support for
dividing the pay-out ratio within 2018 which has automatically increased up to 78%.
Expected Objective of AT &T
 To increase the adjustment of EPS which increase range of $3.40 billion.
 To improve the cash flow which inclusive deals with the integration prices.
 To invest in the capital approximately $26 billion, expected the reimbursement.
Consolidate appropriate standards
AT&T has adopted the new accounting standards which require to deals with recognition
of current status of revenue (Areeda, Kaplow and Hemphill, 2019). It is beneficial for
understanding post-employment advantage price or cost, certain aspect of cash receipts on the
instalment. This type of changes directly impact on the business income statement and cash flow
(Curwen and et.al., 2019). By adoption of ASC, AT &T has made up significant policy and
procedure in decision-making which automatically record the condition. As a result, it has
provided the comparable outcome in order to help investor which better way to understand the
financial statement by using policies (Visan, Ionita and Filip, 2020).
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Cash Flow
It can be defined the entire cash flow on the basis of business operation in term of capital
expenditures (Wong-Ervin, 2019). This can be applicable when after divided, define as cash
from different operations. In order to calculate the pay-out ratio and accurate percentage of
divided paid. AT &T believed that it has require identifying the metrics which provided the
correct information of investors.
Therefore, management tried to view the cash flow which consider as an important
indicator and generate that how much cash flow occurs in regular enterprise operations (Kumar,
2019). It may include capital expenditure which make ensure to do better decision. The
organization will be identifying the cash flow and measure the availability of pay debt (Visan,
Ionita and Filip, 2020).
AT &T Merger
In 2015, AT &T has acquired the merger agreement and focused on the each share of
DirectTV stock. Therefore, it easily exchange from $29.0 cash plus 1.87 share of AT&T. As per
connection, it has recognized the merger which identify the cost or price (Lee, 2019).
Furthermore, it also considered the equipment, installation process which has been set up for
subscriber acquisitions.
Upgrade the retention cost: it is basically associated with the efforts for pre-existing
subscriber (Visan, Ionita and Filip, 2020). As per result, it can handle the high level average
monthly revenue. In order to put more efforts such as subscriber equipment upgrade program of
event.
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Administrative Expense: this department may include the cost in term of finance, legal,
information technology and marketing (Visan, Ionita and Filip, 2020). It can be identified the
expenses which require for debt. In order to maintain and fixed assets.
CONCLUSION
From above discussion, it concluded that AT &T is the fastest growing organization which
providing the better telecommunication service in global marketplace. AT &T has been
comprised with the mobility, enterprise Wire-line and other type of entertainment group. As per
discussion, it has analysed that spilt into different communication segment which require to
identify the specific result or outcome. It has summarised that organization develop the
coordination with mobile telephone subscription and established the entertainment group in the
form of broadband internet enterprise, TV offerings and legacy telephone. It can be identified the
various strategic service, data service which always support for business expansion in global
world.
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REFERENCES
Book and Journals
Albayrak, N., Özdemir, A. and Zeydan, E., 2019, February. An Artificial Intelligence Enabled
Data Analytics Platform for Digital Advertisement. In 2019 22nd Conference on
Innovation in Clouds, Internet and Networks and Workshops (ICIN) (pp. 239-241). IEEE.
Areeda, P., Kaplow, L. and Hemphill, C.S., 2019. 2019 Professor's Update to Antitrust Analysis:
Problems, Text, and Cases. Text, and Cases (August 13, 2019).
Curwen, P. and et.al., 2019. Multi-play as a Disruptive Strategy', Disruptive Activity in a
Regulated Industry.
Kumar, B.R., 2019. AT&T–Time Warner Acquisition. In Wealth Creation in the World’s
Largest Mergers and Acquisitions (pp. 121-129). Springer, Cham.
Lee, T., 2019. United States v. AT&T, Inc. Federal Communications Law Journal. 71(3).
pp.447-451. Kumar, B.R., 2019. Bell South Merger with AT&T. In Wealth Creation in
the World’s Largest Mergers and Acquisitions (pp. 155-161). Springer, Cham.
Visan, M., Ionita, A. and Filip, F.G., 2020. Data Analysis in Setting Action Plans of Telecom
Operators. In Data Science: New Issues, Challenges and Applications (pp. 97-110).
Springer, Cham.
Wong-Ervin, K., 2019. Antitrust Analysis of Vertical Mergers: Recent Developments and
Economic Teachings. ABA Antitrust Source, February.
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