AT&T Wireless 2009 Annual Report Download - page 75

AT&T 09 AR 73
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.
Our investments in equity affiliates include primarily
international investments. As of December 31, 2009, our
investments in equity affiliates included a 9.8% interest in
Télefonos de México, S.A. de C.V. (Telmex), Mexico’s national
telecommunications company, and an 8.8% 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 9.9%. We are a
member of a consortium that holds all of the class AA shares
of Telmex stock, representing voting control of the company.
Another member of the consortium, Carso Global Telecom,
S.A. de C.V. (CGT), has the right to appoint a majority of the
directors of Telmex. We also are a member of a consortium
that holds all of the class AA shares of América Móvil stock,
representing voting control of the company. Another member
of the consortium has the right to appoint a majority of the
directors of América Móvil. On January 13, 2010, América
Móvil announced that its Board of Directors had authorized it
to submit an offer for 100% of the equity of CGT, a holding
company that owns 59.4% of Telmex and 60.7% of Telmex
Internacional, in exchange for América Móvil shares; and an
offer for Telmex Internacional shares not owned by CGT, to be
purchased for cash or to be exchanged for América Móvil
shares, at the election of the shareholders.
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
8.1 years (8.0 years for customer lists and relationships and
9.6 years for other). Amortization expense for definite-life
intangible assets was $3,755 for the year ended December
31, 2009, $4,570 for the year ended December 31, 2008, and
$5,952 for the year ended December 31, 2007. Amortization
expense is estimated to be $2,977 in 2010, $1,994 in 2011,
$1,315 in 2012, $730 in 2013 and $346 in 2014. In 2009,
Mobility wrote off $4,889 in fully amortized intangible assets
(primarily customer lists).
Licenses include wireless FCC licenses of $48,650 at
December 31, 2009, and $47,267 at December 31, 2008,
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
we treat the FCC licenses as indefinite-lived intangible assets.
In 2009, we recorded an immaterial $18 impairment to
wireline licenses we no longer plan to use.
Our other intangible assets are summarized as follows:
December 31, 2009 December 31, 2008
Gross Carrying Accumulated Gross Carrying Accumulated
Other Intangible Assets Amount Amortization Amount Amortization
Amortized intangible assets:
Customer lists and relationships:
AT&T Mobility $ 5,804 $ 3,097 $10,429 $ 6,409
BellSouth 9,215 5,597 9,215 4,062
ATTC 3,134 2,377 3,100 2,038
Other 926 588 788 441
Subtotal 19,079 11,659 23,532 12,950
Other 1,176 767 1,724 1,130
Total $20,255 $12,426 $25,256 $14,080
Indefinite-life intangible assets not subject to amortization:
Licenses $48,759 $47,306
Trade name 5,235 5,230
Total $53,994 $52,536