AT&T's Business Plans Are Challenged
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S.R.A. News Volume 22 · Issue 2 SNET RETIREES ASSOCIATION, INC FALL 2019 AT&T’s Business Plans Are Challenged In a fast moving world AT&T was some- other stakeholders. end of 2021, prior to any strategic actions what taken aback when investment firm Over the past decade, AT&T’s share- regarding the portfolio. Beyond delivering Elliott Management sent an extensive letter holder returns have underperformed the a higher stock price for its shareholders, to the AT&T Board of Directors outlining S&P 500 by well over 100 percentage both institutional and employee, the letter changes that they believe would bring points. This share-price underperformance states that a more focused and efficient higher returns for shareholders in the future. has occurred as AT&T’s M&A strategy has AT&T would deliver far-reaching benefits . This is big news in the business while taken it into multiple new markets over a to other stakeholder groups as well. several high level executives at AT&T also series of deals totaling nearly $200 billion, The letter concludes by calling for announced retirements that were unex- and as its operational performance has constructive engagement on a mutually pected. It seems that there will be more measurably declined. As a result, AT&T agreed-upon plan to realize this unique to come based on the news reports some today is deeply undervalued, trading at just opportunity for all AT&T stakeholders.” of which are reprinted in our newsletter over half the multiple of the S&P 500 – by DALLAS, September 09, 2019 for your information. far its biggest discount yet. AT&T Statement on Despite these setbacks, Elliott believes September 09, 2019 07:34 AM that AT&T possesses a world-class collec- Elliott Management Letter Eastern Daylight Time to Board of Director NEW YORK--(BUSINESS WIRE)--El- tion of assets, each with a leading mar- “Our management team and Board of liott Management Corporation (“Elliott”), ket position, priced today at historically Directors maintain a regular and open which manages funds that collectively discounted levels. The letter notes that dialogue with shareholders and will review beneficially own $3.2 billion of AT&T this irreproducible collection of leading Elliott Management’s perspectives in the Inc. (“AT&T” or the “Company”), today businesses includes a well-performing context of the company’s business strategy. released a letter outlining a compelling wireless business poised for future growth We look forward to engaging with Elliott. value-creation opportunity at AT&T. The and market leadership in 5G, the premier Indeed, many of the actions outlined are letter, addressed to the Company’s Board, global enterprise connectivity solution, ones we are already executing today. noted that the opportunity could lead and one of the world’s most successful AT&T’s Board and management team AT&T to a $60+ per share value by the media franchises. firmly believe that the focused and suc- end of 2021, representing a 65%+ upside Elliott’s letter outlines a four-part plan cessful execution of our strategy is the to today’s share price. – the Activating AT&T Plan – that would best path forward to create value for According to the letter, Elliott made the improve AT&T’s share price and its business. shareholders. This strategy is driven by investment in AT&T – among its largest The Plan recommends increased strategic the unique portfolio of valuable businesses ever – because it exhibits a unique com- focus, improved operational efficiency, a we’ve assembled across communications bination of historical underperformance, formal capital allocation framework, and networks and media and entertainment, a depressed valuation, well-positioned enhanced leadership and oversight. The let- and as Elliott points out, is the foundation assets and a clear path forward to generate ter states that the Plan could enable AT&T extraordinary value for shareholders and to achieve a value per share of $60+ by the See “AT&T” On Page 3 Page 2 S.R.A. News Catastrophic Prescription Drug Benefit Catastrophic prescription drug need to: Complete all required benefit was established by AT&T fields in the Catastrophic Prescrip- to offer additional protection to tion Drug Credit Request Form; S.R.A. News AT&T retirees and dependents available through AON. Gather This is the official publication enrolled in coverage through the your Monthly Prescription Drug for SNET Retirees Association, Aon Retiree Health Exchange. The Summary showing your actual out- Inc. members. It contains timely news and feature items of AT&T Medicare-Eligible Health of-pocket expense for the year. You interest to all SNET retirees. Reimbursement Account Program can request this summary from your S.R.A. is a nonprofit Summary Plan Description (SPD) prescription drug carrier. Note: this organization. Readers are provides complete details regarding summary is also known as an Expla- encouraged to send or phone who is eligible for the catastrophic nation of Benefits (EOB). news tips. prescription drug benefit. Generally, Send the form and Prescription www.snetretirees.org retirees, eligible dependents, and Drug Summary to Your Spending surviving spouses of AT&T retirees Account (YSA), per the instructions are eligible for the catastrophic pre- on the form. After YSA reviews scription drug benefit if they: (i) Are your form and documentation, if eligible to obtain reimbursement approved, your HRA will be cred- from an AT&T Medicare-Eligible ited with the amount spent for Health Reimbursement Account actual out-of-pocket prescription and receive an HRA credit. drugs in excess of the $5,100 indi- You must be enrolled in a Medi- vidual threshold, up to $100,000 care Part D plan (or a Medicare per individual. How frequently can Advantage plan with Prescription I request credits? You can request EXECUTIVE BOARD Drug component); and (iii) Incur credits under the catastrophic pre- President actual out-of-pocket expenses for scription drug benefit all at once JoAnn Alix-Gagain eligible prescription drugs that or throughout the calendar year. exceed $5,100 (per individual) in However, all credit requests for Secretery the calendar year as shown on the 2019 must be submitted by March Mary Fontana Monthly Prescription Drug Sum- 31st of 2020. Keep in mind, that mary, also known as Medicare Part if you want to use the additional Treasurer D Explanation of Benefits, received credit for other health care claims Claudia Zerella from the prescription drug provider. incurred in 2019 you need to apply (iv) Actual out of pocket expenses for the additional credit in advance Founding Treasurer are costs that you pay. They do not of the March 31st deadline so you Bob Archambault include amounts your plan covers have time to submit your claims or any discounts received through per the usual YSA claims submis- Membership your plan. sion process. As requests are pro- Harry Green Once an eligible person’s actual cessed, your HRA will be credited Frank Pagerino out-of-pocket expenses for eligible with the incremental amount that prescription drugs exceed $5,100 you paid out-of-pocket over the in a calendar year, they are eligible $5,100 individual threshold for for incremental HRA crediting. To eligible prescription drugs under obtain additional credits, you will your Medicare Part D plan. S.R.A. News Page 3 “AT&T” From Page 1 for significant value creation. We believe S.R.A. RESPONSE TEAM growing and investing in these businesses The S.R.A. Response Team is active and ready to assist our is the best path forward for our company members with problems relative to Health Benefits and and our shareholders.” Pension items. AT&T hires Goldman Sachs to Before placing a telephone call to a member of the Response defend against activist hedge fund Team, for assistance, be sure you have contcted the AT&T By Josh Kosman @ NY POST Benefits Cetner. September 9, 2019 | 2:50pm Billionaire activist Paul Singer reveals The S.R.A. Response Team Members ready to assist you are: $3.2B stake in AT&T Activist investor ques- JoAnn Alix-Gagain 203-758-2409 ([email protected]) tions AT&T-Time Warner deal, calls for asset sales Frank Pagerino 203-929-7487 AT&T has hired Goldman Sachs to defend itself against activist investor Paul Singer, whose hedge fund is calling on the company to sell assets, including its Fraud Alert: Genetic Testing Scam DirectTV satellite service, The Post has The U.S. Department of Health for the entire cost of the test, which learned. The telecom company only and Human Services Office of could be thousands of dollars. learned on Friday that Singer’s Elliot Man- Inspector General is alerting the agement Corp. had taken a $3.2 billion public about a fraud scheme involv- PROTECT YOURSELF stake and would be pressing for change, ing genetic testing. If a genetic testing kit is mailed a source close to the situation said. On Genetic testing fraud occurs to you, don’t accept it unless it was Monday, Elliott called on AT&T to shed when Medicare is billed for a test ordered by your physician. Refuse fat, including DirectTV and its Mexican or screening that was not medically the delivery or return it to the sender. wireless operations, and questioned CEO necessary and/or was not ordered Keep a record of the sender’s name Randall Stephenson’s acquisitions strategy. and the date you returned the items. Goldman in 2018 hired AT&T’s former by a Medicare beneficiary’s treating Be suspicious of anyone who banker, Kurt Simon, away from JPMorgan, physician. which Stephenson hired in 2016 to lead Scammers are offering Medicare offers you “free” genetic testing and the company’s $85 billion deal to buy Time beneficiaries “free” screenings or then requests your Medicare num- Warner, as well as a 2011 failed attempt cheek swabs for genetic testing to ber.