AT&T to record $2.8 billion gain on its pension obligations in the first quarter

Shares of AT&T Inc.
T,
-1.35%
gained 0.2% in premarket trading Friday, after the media and telecommunications company disclosed that it will record a $2.8 billion pension-related gain in the first quarter. In a filing with the Securities and Exchange Commission, AT&T said due in part to recent restructuring actions, it expects total pension distributions to exceed the threshold of service and interest costs in 2021, which requires the company to remeasure its pension benefit obligation at the end of each quarter of 2021. The $2.8 billion non-cash gain it will record in the first quarter is mostly a result of an increase in the discount rate used to measure the obligation. The company is scheduled to report first-quarter results on April 22. The stock has gained 4.3% year to date through Thursday, while the SPDR Communication Services Select Sector ETF
XLC,
+0.01%
has run up 14.0% and the S&P 500
SPX,
+0.42%
has advanced 9.1%.