AT&T Inc. (NYSE: T) is a diverse telecommunications firm located in the United States that provides wireless, Internet, video and voice communications services, as well as Internet-protocol-based business solutions. The company also has international operations, primarily in Latin America. The firm's capital structure includes roughly even amounts of debt and equity financing, meaning AT&T's financial leverage is significantly lower than that of its closest peer, Verizon Communications Inc. (NYSE: VZ) and many other large, mature corporations. Financial leverage and enterprise value expanded in 2015, driven largely by the acquisition of DirecTV.
Equity capital includes common stock at par value, preferred stock and retained earnings, and can be found in a company's balance sheet in financial filings. As of December 2015, AT&T had total shareholder equity value of $123.6 billion, comprised of $6.5 billion of common stock at $1 par value, $89.8 billion of additional paid-in capital, $33.7 billion of retained earnings, $12.6 billion of treasury stock, $5.3 billion of accumulated other comprehensive income and $969 million of non-controlling interests.
The 2015 equity capital figure marks an increase from the restated value of $90.3 billion in 2014 and $94.6 billion in 2013, with the change being influenced primarily by the $34.7 billion issuance of Treasury stock associated with the 2015 acquisition of DirecTV. Cash dividends ranged from $9.6 billion to $10.8 billion from 2013 to 2016, which have partially offset the earnings generated during those years.
Although debt capital is not universally defined, it commonly includes all forms of short- and long-term debt, such as bonds and unsecured notes. Some analysts and investors use broader definitions that can include other liabilities or obligations like unfunded pension liabilities, but these definitions are less frequently used. As of December 2015, AT&T carried $126 billion of total debt, with $7.6 billion in short-term debt and $118.5 billion of long-term debt. The company's long-term debt is comprised primarily of notes and debentures with interest rates ranging from 0.49 to 9.5% and maturity dates ranging from 2016 to 2097.
While AT&T's short-term debt increased from $5.5 billion in 2013 to $7.6 billion in 2015, fluctuations in long-term debt have been the primary driver of the company's rising financial leverage. Long-term debt was $75.8 billion in 2014 and $69.3 billion in 2013. During 2015, the company issued $34 billion of long-term debt, $11 billion of which were term loans and credit agreements and $23 billion of which were notes.
Leverage is the extent to which a company finances itself with debt capital, generally expressed in relation to equity capital. One popular leverage metric is the debt-to-total-capital ratio, which is simply calculated by dividing total debt by total capital. AT&T had total capital of $250 billion as of December 2015, $172 billion in 2014 and $169 billion in 2013. The debt-to-total-capital ratio reached 0.5 in 2015, up from 0.48 in 2014 and 0.44 in 2013. Both debt and equity capital rose significantly in 2015, due largely to the $49 billion cash-and-stock acquisition of DirecTV, with proportionately more debt financing being employed. Although AT&T's debt-to-total-capital ratio is higher than those of many smaller companies, one of its closest competitors, Verizon, had a much higher leverage ratio at 0.87 in December 2015. It is common for large, established firms with predictable cash flows to maintain capital structures with significantly more leverage than AT&T.
Enterprise value (EV) is a measurement of a firm's total value calculated as the sum of common stock market value, preferred equity market value and debt market value, less investments, cash and equivalents. As of April 2016, AT&T's enterprise value was $361 billion, of which $240 billion was attributed to market capitalization. This is slightly below the trailing-three-year high EV of $365 billion. With an April 2013 EV of $38.2 billion, AT&T's value has fluctuated without trending firmly in one direction. Over the three years leading up to April 2016, the company's EV fell as low as $32 billion, which was 19% below the highest level of that period.