AT&T Wireless 2015 Annual Report Download - page 53

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AT&T INC.
|
51
NOTE 2. EARNINGS PER SHARE
A reconciliation of the numerators and denominators of
basic earnings per share and diluted earnings per share is
shown in the table below:
Year Ended December 31, 2015 2014 2013
Numerators
Numerator for basic earnings
per share:
Net income $13,687 $6,736 $18,722
Less: Net income attributable
to noncontrolling interest (342) (294) (304)
Net income attributable to AT&T 13,345 6,442 18,418
Dilutive potential
common shares:
Share-based payment 13 13 13
Numerator for diluted earnings
per share $13,358 $6,455 $18,431
Denominators (000,000)
Denominator for basic earnings
per share:
Weighted-average number of
common shares outstanding 5,628 5,205 5,368
Dilutive potential common
shares:
Share-based payment
(in shares) 18 16 17
Denominator for diluted
earnings per share 5,646 5,221 5,385
Basic earnings per share
attributable to AT&T $ 2.37 $ 1.24 $ 3.42
Diluted earnings per share
attributable to AT&T $ 2.37 $ 1.24 $ 3.42
new contractual agreements. Bills reflecting actual
incurred information are generally not received within
three months subsequent to the end of the reporting
period, at which point a final adjustment is made to
the accrued switched traffic compensation expense.
Dedicated traffic compensation costs are estimated
based on the number of circuits and the average
projected circuit costs.
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 their foreign assets and liabilities at
exchange rates in effect at the balance sheet dates.
We translate 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 (see Note 3). Operations in countries with
highly inflationary economies consider the U.S. dollar as
the functional currency.
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 10).
Pension and Other Postretirement Benefits
See Note 12 for a comprehensive discussion of our
pension and postretirement benefit expense, including
a discussion of the actuarial assumptions, our policy
for recognizing the associated gains and losses and
our method used to estimate service and interest
cost components.