AT&T Wireless 2012 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2012 AT&T Wireless annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

Notes to Consolidated Financial Statements (continued)
Dollars in millions except per share amounts
66 | AT&T Inc.
NOTE 2. EARNINGS PER SHARE
A reconciliation of the numerators and denominators of
basic earnings per share and diluted earnings per share for
income from continuing operations for the years ended
December 31, 2012, 2011 and 2010, are shown in the
table below:
Year Ended December 31, 2012 2011 2010
Numerators
Numerator for basic earnings
per share:
Income from continuing
operations $7,539 $4,184 $19,400
Income attributable to
noncontrolling interest (275) (240) (315)
Income from continuing
operations attributable to AT&T 7,264 3,944 19,085
Dilutive potential common shares:
Other share-based payment 12 11 11
Numerator for diluted earnings
per share $7,276 $3,955 $19,096
Denominators (000,000)
Denominator for basic earnings
per share:
Weighted-average number of
common shares outstanding 5,801 5,928 5,913
Dilutive potential common
shares:
Stock options 3 4 3
Other share-based payment
(in shares) 17 18 22
Denominator for diluted
earnings per share 5,821 5,950 5,938
Basic earnings per share
from continuing operations
attributable to AT&T $ 1.25 $ 0.66 $ 3.23
Basic earnings per share from
discontinued operations
attributable to AT&T — — 0.13
Basic earnings per share
attributable to AT&T $ 1.25 $ 0.66 $ 3.36
Diluted earnings per share
from continuing operations
attributable to AT&T $ 1.25 $ 0.66 $ 3.22
Diluted earnings per share from
discontinued operations
attributable to AT&T — — 0.13
Diluted earnings per share
attributable to AT&T $ 1.25 $ 0.66 $ 3.35
a discounted cash flow approach on a presumed royalty rate
derived from the revenues related to the brand name. The fair
value measurements used are considered Level 3 under the
Fair Value Measurement and Disclosure framework (see Note 9).
Intangible assets that have finite useful lives are amortized
over their useful lives (see Note 6). Customer lists and
relationships are amortized using primarily the sum-of-the-
months-digits method of amortization over the expected
period in which those relationships are expected to
contribute to our future cash flows. The remaining finite-lived
intangible assets are generally amortized using the straight-
line method of amortization.
Advertising Costs We expense advertising costs for
advertising products and services or for promoting our
corporate image as we incur them (see Note 14).
Foreign Currency Translation We are exposed to foreign
currency exchange risk through our foreign affiliates and
equity investments in foreign companies. Our foreign
subsidiaries and foreign investments generally report their
earnings in their local currencies. We translate our share of
their foreign assets and liabilities at exchange rates in effect
at the balance sheet dates. We translate our share of their
revenues and expenses using average rates during the
year. The resulting foreign currency translation adjustments
are recorded as a separate component of accumulated
other comprehensive income (accumulated OCI) in the
accompanying consolidated balance sheets. We do not hedge
foreign currency translation risk in the net assets and income
we report from these sources. However, we do hedge a
portion of the foreign currency exchange risk involved in
anticipation of highly probable foreign currency-denominated
transactions, which we explain further in our discussion of our
methods of managing our foreign currency risk (see Note 9).
Employee Separations We established obligations for
expected termination benefits provided under existing plans
to former or inactive employees after employment but
before retirement. At December 31, 2012, we had severance
accruals of $120 and at December 31, 2011, we had
severance accruals of $335. The decline was primarily due
to payments during the year.
Pension and Other Postretirement Benefits See Note 11
for a comprehensive discussion of our pension and
postretirement benefit expense, including a discussion of
the actuarial assumptions and our policy for recognizing
the associated gains and losses.