Special items

In a three-year period AT&T, the telecommunications provider, reported net income of $1.9 billion (Year Three), a net loss of $13 billion (Year Two), and net income of $7.7 billion (Year One). Included in these numbers were the following special items:

Year One:

losses from equity investments ($7.5 billion); net loss from discontinued operations ($4 billion); gain on disposition of discontinued operations ($1.3 billion); and gain from accounting changes ($904 million).

Year Two:

losses from equity investments ($400 million); net loss from discontinued operations ($14.5 billion); gain on disposition of discontinued operations ($1.3 billion); and loss from accounting changes ($856 million).

Year Three:

losses from equity investments ($12 million); net loss from discontinued operations ($13 million); and gain from accounting changes ($15 million).

a. Describe each special item.

b. Comment on AT&T”s performance across the three-year period.