AT&T Wireless 2014 Annual Report Download - page 31

AT&T INC. | 29
Cash Used in or Provided by Investing Activities
During 2014, cash used in investing activities consisted
primarily of:
• $21,199 in capital expenditures, excluding interest
during construction.
• $234 in interest during construction.
• $3,141 for the acquisitions of wireless spectrum
licenses (including a refundable deposit with the FCC
for the AWS-3 Auction), Leap and other operations.
• $1,890 in short-term investments, consisting of time
deposits greater than 90 days.
During 2014, cash provided by investing activities consisted
primarily of:
• $5,885 from the sale of our remaining shares in
América Móvil.
• $2,018 from the sale of our Connecticut operations.
• $220 from the sale of various properties.
Virtually all of our capital expenditures are spent on our
wireless and wireline networks, our U-verse services and
support systems for our communications services. Capital
expenditures, excluding interest during construction, increased
$255 from 2013. Our Wireless segment represented 53% of
our total spending and increased 2% in 2014. The Wireline
segment, which includes U-verse services, represented 47%
of the total capital expenditures and was flat in 2014,
primarily reflecting our implementation of Project VIP, which
we began in 2013 and substantially completed in 2014.
We expect our 2015 capital expenditures for our existing
businesses to be in the $18,000 range. Due to our completion
of Project VIP, we anticipate lower capital spending in our
Wireless and Wireline segments in 2015. The amount of
capital investment is influenced by demand for services and
products, capacity needs and network enhancements. We are
also focused on ensuring merger commitments are met and
our expenditures may also be influenced by regulatory
considerations. We expect to support our business and
spectrum acquisitions with a combination of debt issuances,
cash from operations, and asset sales.
On January 16, 2015, we purchased GSF Telecom for
$1,875 in cash, and on January 26, 2015, we also agreed
to acquire Nextel Mexico for approximately $1,875, less
the outstanding net debt of the business at closing.
We anticipate the transaction will close in mid-2015,
subject to regulatory review and approval.
In January 2015, we submitted winning bids for 251
AWS spectrum licenses in the AWS-3 Auction for $18,189.
We provided the FCC an initial down payment of $921
in October 2014 and paid the remaining down payment
amount of $2,717 on February 13, 2015. We will pay the
balance of $14,551 on or before March 2, 2015.
24,000 in our nine-state Southeast region. After expiration
of the current agreements, work stoppages or labor
disruptions may occur in the absence of new contracts
or other agreements being reached.
Environmental We are subject from time to time to
judicial and administrative proceedings brought by various
governmental authorities under federal, state or local
environmental laws. We reference in our Forms 10-Q and
10-K certain environmental proceedings that could result
in monetary sanctions (exclusive of interest and costs) of
one hundred thousand dollars or more. However, we do
not believe that any of those currently pending will have
a material adverse effect on our results of operations.
LIQUIDITY AND CAPITAL RESOURCES
We had $8,603 in cash and cash equivalents available at
December 31, 2014. Cash and cash equivalents included
cash of $1,257 and money market funds and other cash
equivalents of $7,346. We also had $1,890 in short-term
investments, which we included in “Other current assets”
on our consolidated balance sheet. Cash and cash
equivalents increased $5,264 since December 31, 2013.
During 2014, cash inflows were primarily provided by cash
receipts from operations and long-term debt issuances,
with additional cash from the monetization of our
investment in América Móvil, the sale of our Connecticut
wireline operations and other assets. These inflows were
largely offset by cash used to meet the needs of the
business, including but not limited to, payment of operating
expenses, funding capital expenditures, dividends to
stockholders, debt redemptions, the acquisition of
wireless spectrum and operations and stock repurchases.
We discuss many of these factors in detail below.
Cash Provided by or Used in Operating Activities
During 2014, cash provided by operating activities was
$31,338, compared to $34,796 in 2013. Lower operating
cash flows in 2014 were primarily due to wireless device
financing related to AT&T Next, which results in cash
collection over the installment period instead of at the
time of sale, increased inventory levels and retirement
benefit funding. In June 2014, we entered into uncommitted
agreements to periodically sell certain equipment installment
receivables for cash and future consideration (see Note 16
for details). Proceeds from the sale of equipment installment
receivables, which we included in our operating cash flows,
and the timing of working capital payments partially offset
the decline in operating cash flows.
During 2013, cash provided by operating activities was
$34,796 compared to $39,176 in 2012. Lower operating
cash flows in 2013 were due to higher cash tax payments
and the timing of working capital payments and wireless
device financing related to AT&T Next.