AT&T has warned that its fourth quarter results will take a hit due to a bigger than expected $10 billion pension charge. In a filing, the company said that a shift in the assumed discount rate from 5.3% to 4.3% resulted in an actuarial loss of $12 billion, though this loss was partially offset by an asset gain of $1.9 billion. AT&T went on to add that it was lowering the expected long-term rate of return on its pension to 7.75% due to continued uncertainty in the securities market and overall U.S. economy.

The quarterly report will also show that other issues hurt AT&T’s operating income, margins, and results. While the company sold 10.2 million smartphones in the quarter, the high subsidies it pays to keep the price on the devices low will hurt immediate profits. The subsidies model relies on long-term contracts to bring in profits over an extended period.

AT&T also suffered from Hurricane Sandy. The damage to cellphone towers and service outages cause by the storm is expected to reduce operating income by $175 million, primarily for the wireless division. To see the full extent of the damage, check out AT&T’s quarterly report when it’s released on January 24.