AT&T Wireless 2012 Annual Report Download - page 69

AT&T Inc. | 67
The Wireless segment uses our nationwide network to provide
consumer and business customers with wireless voice and
advanced data communications services. This segment
includes our portion of the results from our mobile payment
joint venture marketed as the Isis Mobile WalletTM (ISIS), which
is accounted for as an equity investment.
The Wireline segment uses our regional, national and global
network to provide consumer and business customers with
landline voice and data communications services, AT&T
U-verse® high-speed broadband, video and voice services and
managed networking to business customers. Additionally,
we receive commissions on sales of satellite television
services offered through our agency arrangements.
The Wireline segment results have been reclassified to
exclude the operating results of the home monitoring
business moved to our Other segment and to include the
operating results of customer information services, which
were previously reported in our Other segment’s results.
The Advertising Solutions segment included our directory
operations, which published Yellow and White Pages directories
and sold directory advertising and Internet-based advertising
and local search through May 8, 2012 (see Note 4).
The Other segment includes our portion of the results from
our international equity investments, our 47 percent equity
interest in YP Holdings, and costs to support corporate-driven
activities and operations. Also included in the Other segment
are impacts of corporate-wide decisions for which the
individual operating segments are not being evaluated.
The Other segment results have been reclassified to exclude
the operating results of customer information services,
which are now reported in our Wireline segment’s results.
At December 31, 2012, 2011 and 2010, we had issued and
outstanding options to purchase approximately 17 million,
66 million, and 130 million shares of AT&T common stock.
The exercise prices of 3 million, 40 million, and 100 million
shares in 2012, 2011, and 2010 were above the average
market price of AT&T stock for the respective periods.
Accordingly, we did not include these amounts in determining
the dilutive potential common shares. At December 31, 2012,
the exercise prices of 14 million vested stock options were
below market price.
NOTE 3. SEGMENT INFORMATION
Our segments are strategic business units that offer
different products and services over various technology
platforms and are managed accordingly. We analyze our
operating segments based on segment income before
income taxes. We make our capital allocation decisions
based on our strategic direction of the business, needs of
the network (wireless or wireline) providing services and
other assets needed to provide emerging services to our
customers. Actuarial gains and losses from pension and
other postemployment benefits, interest expense and
other income (expense) – net, are managed only on a
total company basis and are, accordingly, reflected only
in consolidated results. Therefore, these items are not
included in each segment’s reportable results. The customers
and long-lived assets of our reportable segments are
predominantly in the United States. At December 31, 2012,
we had three reportable segments: (1) Wireless, (2) Wireline
and (3) Other. Our operating results prior to May 9, 2012,
also included Advertising Solutions, which was a reportable
segment. On May 8, 2012, we completed the sale of our
Advertising Solutions segment and received a 47 percent
equity interest in the new entity YP Holdings LLC
(YP Holdings) (see Note 4).