AT&T Wireless 2008 Annual Report Download - page 64

Notes to Consolidated Financial Statements (continued)
Dollars in millions except per share amounts
62
| AT&T Annual Report 2008
AT&T Mobility Beginning December 29, 2006, we have
reported AT&T Mobility as a wholly-owned subsidiary.
The following table presents summarized operating results
for AT&T Mobility prior to the December 29, 2006 BellSouth
acquisition:
2006
Income Statements
Operating revenues $37,291
Operating income 4,547
Net income 2,513
Other Equity Method Investments Our investments in
equity affiliates include primarily international investments.
As of December 31, 2008, our investments in equity affiliates
included a 9.7% interest in Teléfonos de México, S.A. de C.V.
(Telmex), Mexico’s national telecommunications company,
and an 8.6% interest in América Móvil S.A. de C.V. (América
Móvil), primarily a wireless provider in Mexico with
telecommunications investments in the United States and
Latin America. In 2007, Telmex’s Board of Directors and
shareholders approved a strategic initiative to split off its
Latin American businesses and its Mexican yellow pages
business to a new holding company, Telmex Internacional
S.A.B. de C.V. (Telmex Internacional). Our investment in
Telmex Internacional is 9.8%. We are a member of
consortiums that hold all of the class AA shares of Telmex,
América Móvil and Telmex Internacional. In each case,
another member of the consortium has the right to appoint
a majority of the directors.
Amortized intangible assets are definite-life assets, and as
such, we record amortization expense based on a method
that most appropriately reflects our expected cash flows from
these assets with a weighted-average amortization period
of 7.4 years (7.3 years for customer lists and relationships
and 9.6 years for other). Amortization expense for definite-
life intangible assets was $4,570, $5,952 and $1,033 for
the years ended December 31, 2008, 2007 and 2006,
respectively. Amortization expense is estimated to be
$3,670 in 2009, $2,840 in 2010, $1,890 in 2011, $1,230
in 2012 and $670 in 2013.
Licenses include FCC licenses of $47,267 and $37,948
at December 31, 2008 and 2007, respectively, that provide
us with the exclusive right to utilize certain radio frequency
spectrum to provide wireless communications services.
While FCC licenses are issued for a fixed time, renewals of
FCC licenses have occurred routinely and at nominal cost.
Moreover, we have determined that there are currently no
legal, regulatory, contractual, competitive, economic or
other factors that limit the useful lives of our FCC licenses
and therefore, treat the FCC licenses as indefinite-lived
intangible assets.
NOTE 7. EQUITY METHOD INVESTMENTS
Investments in partnerships, joint ventures and less-than
majority-owned subsidiaries in which we have significant
influence are accounted for under the equity method. Until
our acquisition of BellSouth in December 2006 (see Note 2),
we accounted for our 60% economic interest in AT&T Mobility
under the equity method since we shared control equally
with BellSouth, our 40% economic partner. We had equal
voting rights and representation on the board of directors
that controlled AT&T Mobility. As a result of the BellSouth
acquisition, AT&T Mobility became a wholly-owned subsidiary
of AT&T and is reported in our wireless segment and our
consolidated statements of income.
Our other intangible assets are summarized as follows:
December 31, 2008 December 31, 2007
Gross Carrying Accumulated Gross Carrying Accumulated
Other Intangible Assets Amount Amortization Amount Amortization
Amortized intangible assets:
Customer lists and relationships:
AT&T Mobility $10,429 $ 6,409 $10,526 $4,549
BellSouth 9,215 4,062 9,205 2,205
ATTC 3,100 2,038 3,050 1,653
Other 788 441 429 298
Subtotal 23,532 12,950 23,210 8,705
Other 1,724 1,130 1,873 1,191
Total $25,256 $14,080 $25,083 $9,896
Indefinite life intangible assets not subject to amortization:
Licenses $47,306 $37,985
Trade name 5,230 5,230
Total $52,536 $43,215