AT&T Uverse 2007 Annual Report Download - page 80

Notes to Consolidated Financial Statements (continued)
Dollars in millions except per share amounts
78
| 2007 AT&T Annual Report
NOTE 13. STOCKHOLDERS’ EQUITY
From time to time, we repurchase shares of common stock
for distribution through our employee benefit plans or in
connection with certain acquisitions. In December 2007,
the Board of Directors authorized the repurchase of up to
400 million shares of our common stock. This authorization
replaced previous authorizations and will expire on
December 31, 2009. As of December 31, 2007, we had not
repurchased any shares under this program.
NOTE 14. ADDITIONAL FINANCIAL INFORMATION
December 31,
Balance Sheets 2007 2006
Accounts payable and accrued liabilities:
Accounts payable $ 7,059 $ 6,919
Accrued rents and other 4,321 3,957
Accrued payroll and commissions 3,419 3,974
Deferred directory revenue 2,348 1,721
Accrued interest 1,149 915
Compensated future absences 637 759
Current portion of employee
benefit obligation 249 973
Other 2,217 2,888
Total accounts payable and
accrued liabilities $21,399 $22,106
Deferred compensation (included in
Other noncurrent liabilities) $ 2,141 $ 2,064
Statements of Income 2007 2006 2005
Advertising expense $3,430 $1,530 $ 812
Interest expense incurred $3,678 $1,916 $1,492
Capitalized interest (171) (73) (36)
Total interest expense $3,507 $1,843 $1,456
Statements of Cash Flows 2007 2006 2005
Cash paid during the year for:
Interest $3,445 $1,666 $1,395
Income taxes, net of refunds 4,013 2,777 2,038
Statements of Stockholders’ Equity 2007 2006 2005
Accumulated other comprehensive
income (loss) is comprised of
the following components, net
of taxes, at December 31:
Foreign currency translation
adjustment $(469) $ (488) $(505)
Unrealized gains on securities 375 345 340
Unrealized (losses) on
cash flow hedges (226) (172) (189)
Defined benefit
postretirement plan (59) (4,999) —
Other (1) — (2)
Accumulated other
comprehensive (loss) $(380) $(5,314) $(356)
No customer accounted for more than 10% of consolidated
revenues in 2007, 2006 or 2005.
NOTE 15. TRANSACTIONS WITH AT&T MOBILITY
Prior to our December 29, 2006 acquisition of BellSouth (see
Note 2), we and BellSouth, the two owners of AT&T Mobility,
each made a subordinated loan to AT&T Mobility (shareholder
loans) and entered into a revolving credit agreement with
AT&T Mobility to provide short-term financing for operations.
Following the BellSouth acquisition both our shareholder loan
and revolving credit agreement with AT&T Mobility were
consolidated and do not appear on our consolidated balance
sheets at December 31, 2007 and 2006. The shareholder loan
carries an annual 6.0% interest rate and we earned interest
income on this loan of $246 during 2006 and $311 in 2005.
Prior to our BellSouth acquisition, we generated revenues
of $1,466 in 2006 and $869 in 2005 for services sold to AT&T
Mobility. These revenues were primarily from access and
long-distance services sold to AT&T Mobility on a wholesale
basis and commissions revenue related to customers added
through AT&T sales sources.
NOTE 16. CONTINGENT LIABILITIES
In addition to issues specifically discussed elsewhere, we are
party to numerous lawsuits, regulatory proceedings and
other matters arising in the ordinary course of business.
In accordance with Statement of Financial Accounting
Standards No. 5, “Accounting for Contingencies,” in evaluating
these matters on an ongoing basis, we take into account
amounts already accrued on the balance sheet. In our opinion,
although the outcomes of these proceedings are uncertain,
they should not have a material adverse effect on our
financial position, results of operations or cash flows.
We have contractual obligations to purchase certain
goods or services from various other parties. Our purchase
obligations are expected to be approximately $2,461 in
2008, $2,237 in total for 2009 and 2010, $1,197 in total for
2011 and 2012 and $471 in total for years thereafter.