UPDATE 2-AT&T sees fourth-quarter pension related gain of $7.6 bln

Wed Jan 22, 2014 7:40pm EST

Jan 22 (Reuters) - AT&T Inc said on Wednesday that it would record a non-cash, pre-tax gain of about $7.6 billion for the fourth quarter from its pensions and post-employment benefit plans, the latest company to see hefty pension related gains from 2013.

AT&T said the $7.6 billion included an actuarial gain of $7.9 billion resulting from an increase of its assumed discount rate to 5.0 percent and a gain of $3.2 billion from higher-than-expected asset returns as well as offsets from losses due to updated mortality and demographic changes.

The announcement came a day after AT&T's biggest rival Verizon Communications, reported a fourth-quarter after-tax gain of $3.7 billion, or $1.29 per share, related to its annual actuarial valuation of benefit plans and mark-to-market pension adjustments.

AT&T, the biggest U.S. telephone company, said the gain will not affect its operating results or margins in the quarter ended Dec. 31, the company said in a regulatory filing. (Filing:)

AT&T also said it expects to record a charge of about $500 million related to employee termination and other employee-related charges.

It said that the termination charges related to an offer it made to certain management retirement-eligible employees to choose a full lump sum payment of their accrued pension if they retired as of Dec. 30, 2013. The offer, which it announced in October, was accepted by 4,200 employees.

AT&T is scheduled to report fourth-quarter results on Jan. 28. Its shares fell almost 1 percent in late trade to $33.30 after they closed at $33.57 on the New York Stock Exchange on Wednesday.