AT&T Wireless 2014 Annual Report Download - page 55

AT&T INC. | 53
NOTE 6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is summarized as follows at
December 31:
Lives (years) 2014 2013
Land — $ 1,567 $ 1,523
Buildings and improvements 10-44 32,204 31,485
Central office equipment1 3-10 89,857 86,370
Cable, wiring and conduit 15-50 72,766 76,107
Other equipment 3-15 74,244 67,887
Software 3-52 8,604 8,150
Under construction — 3,053 3,276
282,295 274,798
Accumulated depreciation
and amortization 169,397 163,830
Property, plant and
equipment – net $112,898 $110,968
1 Includes certain network software.
2 Reflects extended estimated useful life (see Note 1).
Our depreciation expense was $17,773 in 2014, $17,722 in
2013 and $16,933 in 2012. Depreciation expense included
amortization of software totaling $1,504 in 2014, $2,142 in
2013 and $2,130 in 2012.
We periodically assess our network assets for impairment,
and our analysis in 2014 indicated no impairment. However,
due to declining customer demand for our legacy voice and
data products and the migration of our networks to next
generation technologies, we decided in the fourth quarter
of 2014 to abandon in place specific copper network assets
classified as cable, wiring and conduit. These abandoned
assets had a gross book value of approximately $7,141,
with accumulated depreciation of $5,021. We recorded a
$2,120 noncash charge for this abandonment, which is
included in “Abandonment of network assets” on our
consolidated statements of income.
Certain facilities and equipment used in operations are
leased under operating or capital leases. Rental expenses
under operating leases were $4,345 for 2014, $3,683 for
2013, and $3,507 for 2012. At December 31, 2014, the
future minimum rental payments under noncancelable
operating leases for the years 2015 through 2019 were
$3,879, $3,641, $3,290, $2,981, and $2,713, with $14,543
due thereafter. Certain real estate operating leases contain
renewal options that may be exercised. Capital leases are
not significant.
between AT&T and DIRECTV, satisfying one of the conditions
to closing the merger. Under certain circumstances relating
to a competing transaction, DIRECTV may be required to
pay a termination fee to us in connection with or following
a termination of the agreement.
Dispositions
Connecticut Wireline On October 24, 2014, we sold
our incumbent local exchange operations in Connecticut
for $2,018 and recorded a pre-tax gain of $147, which
is included in “Other income (expense) – net,” on our
consolidated statements of income. In conjunction with
the sale, we allocated $743 of goodwill from our Wireline
reporting unit. Because the book value of the goodwill
did not have a corresponding tax basis, the resulting net
income impact of the sale was a loss of $289.
We applied held-for-sale treatment to the assets and
liabilities of the Connecticut operations, and, accordingly,
included the assets in “Other current assets,” and the related
liabilities in “Accounts payable and accrued liabilities,” on
our consolidated balance sheets at December 31, 2013.
However, the business did not qualify as discontinued
operations as we expect significant continuing direct cash
flows related to the disposed operations. Assets and
liabilities of the Connecticut operations included the
following as of December 31, 2013:
Assets held for sale:
Current assets $ 155
Property, plant and equipment – net 1,289
Goodwill 799
Other assets 17
Total assets $2,260
Liabilities related to assets held for sale:
Current liabilities $ 128
Noncurrent liabilities 480
Total liabilities $ 608
América Móvil In 2014, we sold our remaining stake in
América Móvil for approximately $5,885 and recorded a
pre-tax gain of $1,330, which is included in “Other income
(expense) – net,” on our consolidated statements of income.
In 2013, we sold a portion of our shares in América Móvil
for approximately $1,179. América Móvil was accounted for
as an equity method investment (see Note 8).
Advertising Solutions In May 2012, we completed the
sale of our Advertising Solutions segment to an affiliate of
Cerberus Capital Management, L.P. for approximately $740
in cash after closing adjustments, a $200 advance, which
was repaid in 2013, and a 47 percent equity interest in
the new entity, YP Holdings. Our operating results include
the results of the Advertising Solutions segment through
May 8, 2012.